Beazer Withdrew Outlook After Agreeing to $2.2 Billion Sale
Homebuilding revenue reached $490.9 million as closings recovered from the prior quarter.
Beazer Homes USA (BZH), the home builder, reported a wider fiscal third-quarter loss as it agreed to be acquired by Dream Finders Homes and withdrew its financial outlook.
The $33.50-a-share cash transaction valued Beazer at approximately $2.2 billion. The company canceled its earnings call after announcing the agreement, shifting attention from its near-term forecast to completion of the sale.
Homebuilding revenue rose 23.4% from the prior quarter as closings increased 18.4% and the average selling price gained 4.3%. Revenue remained 8.3% below the year-earlier period, a narrower decline than the 28.5% contraction recorded in the second quarter.
The net loss widened to $4.2 million, or $0.16 a share, from $0.9 million, or $0.03 a share, in the prior quarter. Adjusted earnings before interest, taxes, depreciation and amortization climbed sequentially to $15.6 million, though it remained 51.3% below the year-earlier period as operating margin declined.
Homebuilding gross margin recovered 160 basis points sequentially to 13.6%. Margin excluding impairments, abandonments and amortized interest improved to 16.9% as construction costs declined and newer, higher-margin communities accounted for more closings, according to the company. That measure remained 150 basis points below a year earlier amid greater price concessions, closing-cost incentives and changes in product and community mix.
Regional results diverged. Southeast homebuilding revenue rose 60.2% as closings increased 37.9%, while revenue fell 14.1% in the West and 27.1% in the East.
Net new orders fell 14.1% from the second quarter to 900 as the monthly sales pace slowed, though orders were 4.5% higher than a year earlier. Backlog held nearly steady sequentially at 1,303 homes and increased 2.2% in value from the prior year because of a higher average selling price.
Beazer increased land acquisition and development spending 29.7% from a year earlier, while available liquidity declined to $263.8 million and total debt to capitalization rose to 55.1%. The company also refinanced its nearest maturity by issuing $400 million of 8.000% notes due 2032 and retiring about $357 million of notes due 2027, leaving October 2029 as its next debt maturity.