Beazer Homes USA(US:BZH)2021-04-30 12:23Financial Data and Key Metrics Changes - New home orders increased approximately 12% to 1,854, with sales pace up more than 40% to 4.7 sales per community per month [18] - Homebuilding revenue rose about 12% to $547 million on 9% higher closings [18] - Gross margin, excluding amortized interest, impairment, and abandonment, was 22.2%, up approximately 140 basis points [18] - Adjusted EBITDA was $64.2 million, up over 45%, with an EBITDA margin of 11.7%, the highest second quarter level in the past 10 years [19] - Net income from continuing operations was $24.6 million, yielding earnings per share of $0.81, more than double the same period last year [19] - Full-year earnings per share is now expected to be above $3, up from previous guidance of at least $2.50 [20] Business Line Data and Key Metrics Changes - The company successfully adapted to increased construction costs by raising prices, limiting sales paces, and extending delivery dates on sold homes [7] - The backlog of sold and already started homes is up more than 50%, indicating strong future performance [12] Market Data and Key Metrics Changes - The housing shortage is estimated to be closer to 4 million homes, significantly higher than previous estimates [10] - Strong demographic demand and limited supply are expected to sustain housing market strength [9] Company Strategy and Development Direction - The company aims to create value for stakeholders by delivering homes on time and at intended margins [7] - A balanced growth strategy is emphasized, focusing on generating shareholder value while managing risk [13] - The company is committed to having every home built Net Zero Energy Ready by 2025, with recent recognition as ENERGY STAR Partner of the Year for the sixth consecutive year [8][47] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the durability of housing market strength due to demographic demand and a recovering economy [9][11] - The company anticipates a multimillion dollar reduction in GAAP interest expense based on actions already taken [17] - Management acknowledged challenges in production capacity but expects improvements over time [35] Other Important Information - The company ended the second quarter with over $600 million in liquidity, more than double the amount from the previous year [22] - Approximately $100 million was spent on land acquisition and development during the quarter, with expectations for total land spend to exceed $600 million for the year [23] Q&A Session Summary Question: How does the company approach the market with differing sales strategies? - The company is navigating between "to be built" and "started" sales strategies based on cost certainty and market conditions [31] Question: What is the current production pace and capacity? - Production capacity is expected to improve over time, but there are no immediate increases in throughput [34] Question: How much more pricing power exists in the current environment? - There is a breaking point related to affordability, and while there is current pricing power, it may not be sustainable long-term [39][40] Question: Are there changes in consumer preferences affecting product mix? - There is increased demand for home office and homeschooling spaces, influencing architectural designs [42][45] Question: What is the progress on the Net Zero Energy Ready commitment? - The commitment remains strong, with recognition as ENERGY STAR Partner of the Year, but changes in existing communities are limited [46][47] Question: What are the uses of cash and capital allocation strategy? - The focus is on investing in the business and reducing debt below $1 billion by the end of fiscal '22 [58][59]