Beazer Homes USA(BZH) - 2024 Q3 - Quarterly Report

Community Growth and Land Position - The company's average active community count increased by 17.2% to 146 in Q3 2024, compared to 124 in the prior year quarter, as part of its goal to reach over 200 active communities by fiscal 2026[97] - The company's land position grew by 24.9% to 28,365 controlled lots as of June 30, 2024, with 55.5% of active lots under option agreements[99] - The company controlled 28,365 lots as of June 30, 2024, with 55.5% (15,434 lots) controlled through option agreements, up from 52.2% (11,510 lots) as of June 30, 2023[172] - The total remaining purchase price, net of cash deposits, committed under all options was $1.20 billion as of June 30, 2024[173] Sales and Orders Performance - Sales per community per month decreased to 2.4 in Q3 2024 from 3.2 in the prior year quarter, with net new orders down 10.8$595.7 million, up 4.0% from $572.5 million in the prior year quarter, while gross profit decreased to$103.3 million from $116.7 million[106] - Operating income for Q3 2024 was$28.5 million, down 40.5% from $47.9 million in the prior year quarter, with operating income as a percentage of total revenue at 4.8$27.2 million, down from $43.8 million in the same period in 2023, a decrease of$16.6 million[110] - Adjusted EBITDA (Non-GAAP) for the three months ended June 30, 2024, was $53.5 million, compared to$72.8 million in 2023, a decrease of $19.3 million[110] - Total homebuilding revenue decreased by 3.0$1.51 billion for the nine months ended June 30, 2024, with a 2.0% decrease in closings to 2,954 units and a 1.1% decrease in ASP to $510.9 thousand[123] - Total homebuilding gross profit excluding impairments and abandonments and interest amortized to cost of sales (Non-GAAP) was$119.5 million with a gross margin of 20.3% for the three months ended June 30, 2024[132] - Total homebuilding gross profit excluding impairments and abandonments and interest amortized to cost of sales (Non-GAAP) was $323.4 million with a gross margin of 21.4$13.5 million to $102.0 million for Q2 2024, with gross margin dropping 290 basis points to 17.3$23.5 million to $278.7 million for the nine months ended June 30, 2024, with gross margin dropping 90 basis points to 18.5$19.4 million to $28.5 million for the three months ended June 30, 2024, compared to$47.9 million in the same period in 2023[149] - Operating income decreased by $30.4 million to$84.8 million for the nine months ended June 30, 2024, compared to $115.2 million in the same period in 2023[150] Segment Performance - West Segment homebuilding revenue increased by 1.6$945.2 million for the nine months ended June 30, 2024, driven by a 4.2% increase in closings to 1,849 units, partially offset by a 2.4% decrease in ASP to $511.2 thousand[123][126] - East Segment homebuilding revenue decreased by 10.1$304.6 million for the nine months ended June 30, 2024, due to an 8.2% decrease in closings to 591 units and a 2.0% decrease in ASP to $515.4 thousand[123][126] - Southeast Segment homebuilding revenue decreased by 9.8$259.4 million for the nine months ended June 30, 2024, primarily due to a 13.5% decrease in closings to 514 units, partially offset by a 4.2% increase in ASP to $504.7 thousand[123][127] - West Segment homebuilding revenue increased by 11.9$365.9 million for the three months ended June 30, 2024, driven by a 14.8% increase in closings to 728 units, partially offset by a 2.5% decrease in ASP to $502.6 thousand[124][128] - East Segment homebuilding revenue decreased by 8.7$121.2 million for the three months ended June 30, 2024, due to a 5.1% decrease in closings to 240 units and a 3.8% decrease in ASP to $505.2 thousand[124][128] - Southeast Segment homebuilding revenue decreased by 7.5$102.5 million for the three months ended June 30, 2024, primarily due to a 13.5% decrease in closings to 199 units, partially offset by a 6.9% increase in ASP to $515.1 thousand[125][128] - West segment homebuilding gross margin decreased to 20.6$10.0 million for the three months ended June 30, 2024, compared to the same period in 2023[151] - East segment operating income decreased by $7.3 million for the three months ended June 30, 2024, compared to the same period in 2023[151] - Southeast segment operating income decreased by$4.2 million for the three months ended June 30, 2024, compared to the same period in 2023[151] Backlog and Pricing - Total backlog units as of June 30, 2024, were 1,949, a slight increase of 0.4% compared to 1,941 in 2023[121] - The aggregate dollar value of homes in backlog as of June 30, 2024, was $1.0465 billion, up 3.6$1.0098 billion in 2023[121] - The average selling price (ASP) in backlog increased by 3.2% to $536.9 thousand as of June 30, 2024, compared to$520.3 thousand in 2023[121] - Average Selling Price (ASP) for homes closed in Q3 2024 was $505.3 thousand, down 1.1$510.8 thousand in the prior year quarter[100] SG&A and Operating Expenses - SG&A as a percentage of total revenue increased to 11.9% in Q3 2024 from 11.5% in the prior year quarter, driven by higher commissions and sales and marketing costs[103] - SG&A as a percentage of total revenue increased by 40 basis points to 11.9% for the three months ended June 30, 2024, compared to 11.5% in the same period in 2023[149] - SG&A as a percentage of total revenue increased by 80 basis points to 12.4% for the nine months ended June 30, 2024, compared to 11.6% in the same period in 2023[150] - Corporate and unallocated net expenses decreased by $2.1 million for the three months ended June 30, 2024, compared to the same period in 2023[152] Energy Efficiency and Tax Strategy - The company is transitioning to Zero Energy Ready homes, with 93$5,000 per single family home meeting Zero Energy Ready qualifications, benefiting the company's tax strategy[107] Debt and Liquidity - Total debt to total capitalization ratio (GAAP) was 47.6% as of June 30, 2024, compared to 48.4% in 2023[113] - Net debt to net capitalization ratio (Non-GAAP) was 45.8% as of June 30, 2024, compared to 40.3% in 2023[113] - The company's liquidity position as of June 30, 2024, consisted of $73.2 million in cash and cash equivalents and$255.0 million of remaining capacity under the Unsecured Facility[163] - The company had variable rate debt outstanding totaling approximately $75.9 million as of June 30, 2024, with a one percent increase in interest rates resulting in an additional$1.0 million in interest expense over the next twelve months[182] - The estimated fair value of the company's fixed-rate debt as of June 30, 2024 was $957.9 million, compared to a carrying amount of$948.5 million[182] - A hypothetical one-percentage point decrease in the estimated discount rates would increase the estimated fair value of the fixed rate debt instruments from $957.9 million to$997.8 million as of June 30, 2024[182] Share Repurchase and Capital Allocation - The company repurchased 455 thousand shares of its common stock for $12.9 million at an average price per share of$28.41 during the three and nine months ended June 30, 2024[170] - As of June 30, 2024, the remaining availability of the share repurchase program was $28.9 million[170] Land Sales and Other Revenue - Land sales and other revenue increased by$4.0 million to $6.0 million for Q2 2024, with gross profit remaining flat at$1.3 million[147] - Land sales and other revenue increased by $10.1 million to$14.8 million for the nine months ended June 30, 2024, with gross profit increasing by $1.0 million to$4.2 million[147] Cash Flow and Operating Activities - Net cash used in operating activities was $323.0 million for the nine months ended June 30, 2024, compared to$95.8 million provided by operating activities in the same period in 2023[158] Letters of Credit and Surety Bonds - The company had outstanding letters of credit and surety bonds of $34.9 million and$265.9 million, respectively, as of June 30, 2024[175]