Beazer Homes reports net income of US$739,000 for fiscal Q1, compared to loss of US$48.8M a year earlier; CEO cites 36% improvement year-over-year in new home orders, lower overhead costs

ATLANTA , February 2, 2012 (press release) – Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com) today announced its financial results for the quarter ended December 31, 2011.

“I am pleased with our results for the quarter,” said Allan Merrill, President and Chief Executive Officer of Beazer Homes. “In spite of still challenging market conditions, our team managed to generate a 36% improvement in year-over-year new home orders while reducing overhead costs in dollar and percentage terms. While we have a lot of work in front of us to return to sustainable profitability, we are committed to delivering higher orders and closings as well as positive EBITDA for the full fiscal year.”

Summary results of the quarter are as follows:

As of December 31, 2011

Total cash and cash equivalents: $550 million, including unrestricted cash of approximately $273 million
Stockholders’ equity: $200 million, not including $57.5 million of mandatory convertible subordinated notes, which automatically convert to common stock at maturity in 2013
Total backlog from continuing operations: 1,307 homes with a sales value of $315.8 million, compared to 787 homes with a sales value of $198.0 million as of December 31, 2010
Land and lots controlled: 25,998 lots (84% owned), a decrease of 3% from December 31, 2010

Quarter Ended December 31, 2011 – Results from Continuing Operations (unless otherwise specified)

Total new orders: 724 homes, a 36% increase from fiscal 2011
Cancellation rates: 35.1%, compared with 31.4% in fiscal 2011
Total home closings: 867 homes, a 67% increase from fiscal 2011
Revenue: $188.5 million, compared to $109.0 million in fiscal 2011
Average sales price from closings: $215,500, compared with $209,300 in fiscal 2011
Gross profit margin: 11.8%, compared to 10.3% in fiscal 2011. These margins were impacted by $3.5 million and $0.6 million in fiscal 2012 and fiscal 2011, respectively, for impairments and option contract abandonments. In addition, these margins were impacted by an $11.0 million warranty recovery in fiscal 2012 and a $1.4 million warranty recovery in fiscal 2011.
Homebuilding gross profit margin, excluding impairments and abandonments: 13.3%, compared to 10.7% in fiscal 2011
Homebuilding gross profit margin, excluding impairments, abandonments and interest amortized to cost of sales: 20.2%, compared to 17.0% in fiscal 2011. Excluding the warranty-related items mentioned above, these margins would have been: 14.3%, compared to 15.8% in fiscal 2011
Net income from continuing operations: $0.7 million, or diluted earnings per share of $0.01, including non-cash pre-tax charges of $3.5 million for inventory impairments and a benefit from income taxes of $35.7 million. This compared to a loss from continuing operations in the first quarter of fiscal 2011 of $48.3 million, or $0.65 per share, which included non-cash pre-tax charges of $0.6 million for inventory impairments.
Net income: $739,000 (including net income from discontinued operations of $41,000), compared with a net loss of $48.8 million for fiscal 2011 (including a loss from discontinued operations of $0.5 million.)
Total Company land and land development spending: $58.2 million, compared with $62.6 million in fiscal 2011

Conference Call

The Company will hold a conference call on February 2, 2012 at 10:00 am EST to discuss these results. Interested parties may listen to the conference call and view the Company’s slide presentation over the internet by visiting the “Investor Relations” section of the Company’s website at www.beazer.com. To access the conference call by telephone, listeners should dial 800-619-8639. To be admitted to the call, verbally supply the passcode "BZH". A replay of the call will be available shortly after the conclusion of the live call. To directly access the replay, dial 866-413-9161 or 203-369-0666 and enter the passcode “3740” (available until 11:00 pm ET on February 9, 2012), or visit www.beazer.com. A replay of the webcast will be available at www.beazer.com for approximately 30 days.

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