Beazer Homes Reports Strong First Quarter Fiscal 2021 Results

Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com) today announced its financial results for the three months ended December 31, 2020.

“We finished the first quarter of our fiscal year with very strong operational and financial results,” said Allan P. Merrill, the company’s Chairman and Chief Executive Officer. “We generated a significantly higher sales pace relative to the same quarter last year, more than offsetting a temporary reduction in our community count. At the same time, we increased the number of lots we own or control as we position for enhanced growth in the coming years. On the financial side, profitability expanded meaningfully with notable improvements in both gross margin and overhead cost efficiency leading to higher Adjusted EBITDA and Net Income.”

Commenting on Fiscal 2021 full year expectations, Mr. Merrill said, “With the strong results we generated in the first quarter, a healthy demand environment and a dollar value of backlog of sold homes up nearly 60% compared to this time last year, we have confidence that we will generate substantial growth in book value while continuing to reduce leverage.”

Looking beyond Fiscal 2021, Mr. Merrill concluded, “Our pivot to growth this year, supported by our differentiated and comprehensive ESG program, has positioned us to create durable and growing value for our customers, employees, partners and shareholders in the years ahead.”

Beazer Homes Fiscal First Quarter 2021 Highlights and Comparison to Fiscal First Quarter 2020

• Net income from continuing operations of $12.0 million, compared to net income from continuing operations of $2.8 million in fiscal first quarter 2020
• Adjusted EBITDA of $43.6 million, up 48.5%
• Homebuilding revenue of $424.2 million, up 1.6% on a 1.4% increase in average selling price to $380.8 thousand and a 0.2% increase in home closings to 1,114
• Homebuilding gross margin was 17.6%, up 250 basis points. Excluding impairments, abandonments and amortized interest, homebuilding gross margin was 22.1%, up 230 basis points
• SG&A as a percentage of total revenue was 12.7%, down 60 basis points year-over-year
• Net new orders of 1,442, up 15.3% on a 42.4% increase in orders/community/month to 3.5 and a 19.0% decrease in average community count to 136
• Dollar value of backlog of $1,162.4 million, up 58.8%
• Unrestricted cash at quarter end was $244.6 million; total liquidity was $494.6 million

The following provides additional details on the Company's performance during the fiscal first quarter 2021:

Profitability. Net income from continuing operations was $12.0 million, generating diluted earnings per share of $0.40. First quarter adjusted EBITDA of $43.6 million was up $14.2 million year-over-year. The increase in profitability was primarily driven by higher homebuilding gross margin and improved SG&A leverage.

Orders. Net new orders for the first quarter increased to 1,442, up 15.3% from the prior year, achieving the highest first quarter level in more than a decade. The increase in net new orders was driven by a 42.4% increase in the absorption rate to 3.5 sales per community per month, up from 2.5 in the previous year, partially offset by a 19.0% decrease in average community count to 136. The cancellation rate for the quarter was 12.3%, down 260 basis points year-over-year.

Backlog. The dollar value of homes in backlog as of December 31, 2020 increased 58.8% to $1,162.4 million, representing 2,837 homes, compared to $732.1 million, representing 1,847 homes, at the same time last year. The average selling price of homes in backlog was $409.7 thousand, up 3.4% year-over-year.

Homebuilding Revenue. First quarter homebuilding revenue was $424.2 million, up 1.6% year-over-year. The increase