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Beazer Homes Reports Third Quarter Fiscal 2023 Results

Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com) today announced its financial results for the three months ended June 30, 2023.

“Strong third quarter results were highlighted by an improved sales pace, higher backlog conversion and lower sales concessions,” said Allan P. Merrill, the Company’s Chairman and Chief Executive Officer. “These factors and careful management of overheads allowed us to generate $73 million in Adjusted EBITDA and $1.42 of earnings per diluted share.”

Commenting on current market conditions, Mr. Merrill said, “While home affordability remains quite challenging, homebuyer demand has remained surprisingly resilient. We believe the strength of the economy and the lack of existing homes for sale have contributed to this favorable new home sales environment. From a production perspective, supply chain issues continue to improve, which allowed us to reduce construction cycle times and increase the share of our home starts that met the Department of Energy’s Zero Energy Ready standards.”

Looking further out, Mr. Merrill concluded, “We remain confident in the multi-year outlook for our Company and industry. Powerful demographic trends and a persistent undersupply of homes should provide support for new home sales, even when we encounter more challenging economic conditions. With a dedicated operating team, a growing community count and a more efficient and less leveraged balance sheet, we have the resources to create durable value for our stakeholders in the years ahead.”

Beazer Homes Fiscal Third Quarter 2023 Highlights and Comparison to Fiscal Third Quarter 2022

  • Net income from continuing operations of $43.8 million, or $1.42 per diluted share, compared to net income from continuing operations of $54.3 million, or $1.76 per diluted share, in fiscal third quarter 2022
  • Adjusted EBITDA of $72.8 million, down 17.5%
  • Homebuilding revenue of $570.5 million, up 9.0% on a 7.1% increase in home closings to 1,117 and a 1.8% increase in average selling price to $510.8 thousand
  • Homebuilding gross margin was 20.2%, down 490 basis points. Excluding impairments, abandonments and amortized interest, homebuilding gross margin was 23.4%, down 470 basis points
  • SG&A as a percentage of total revenue was 11.5%, down 30 basis points
  • Net new orders of 1,200, up 29.7% on a 28.3% increase in orders per community per month to 3.2 and a 1.1% increase in average community count to 124
  • Backlog dollar value of $1.0 billion, down 36.4% on a 35.4% decrease in backlog units to 1,941 and a 1.6% decrease in average selling price of homes in backlog to $520.3 thousand
  • Unrestricted cash at quarter end was $276.1 million; total liquidity was $541.1 million

The following provides additional details on the Company's performance during the fiscal third quarter 2023:

Profitability. Net income from continuing operations was $43.8 million, generating diluted earnings per share of $1.42. This included the impact of energy efficiency tax credits of $5.7 million or $0.18 per share compared to $2.7 million of such credits or $0.09 per share in the prior year quarter. Third quarter adjusted EBITDA of $72.8 million was down $15.5 million, or 17.5%, primarily due to lower gross margin.

Orders. Net new orders for the third quarter were 1,200, up 29.7% from 925 in the prior year quarter primarily driven by a 28.3% increase in sales pace to 3.2 orders per community per month, up from 2.5 in the prior year quarter. The cancellation rate for the quarter was 16.1%, down from 17.0% in the prior year quarter.

Backlog. The dollar value of homes in backlog as of June 30, 2023 was $1.0 billion, representing 1,941 homes, compared to $1.6 billion, representing 3,003 homes, at the same time last year. The average selling price (ASP) of homes in backlog was $520.3 thousand, down 1.6% versus the prior year quarter. Backlog units, although down year-over-year, have been growing for two consecutive quarters driven by strong sales.

Homebuilding Revenue. Third quarter homebuilding revenue was $570.5 million, up 9.0% year-over-year. The increase in homebuilding revenue was driven by a 7.1% increase in home closings to 1,117 homes, as well as an 1.8% increase in the average selling price to $510.8 thousand. The increase in home closings was due to higher backlog conversion rates as a result of improved cycle times, partially offset by lower beginning backlog.

Homebuilding Gross Margin. Homebuilding gross margin (excluding impairments, abandonments and amortized interest) was 23.4% for the third quarter, down from 28.1% in the prior year quarter. Although down versus the prior year quarter, homebuilding gross margin was strong by historical standards and exceeded expectations, in part due to higher than expected spec home margins, as well as reduced build costs and lower closing cost incentives.

SG&A Expenses. Selling, general and administrative expenses as a percentage of total revenue was 11.5% for the quarter, down 30 basis points year-over-year as a result of the Company's continued focus on overhead cost management while benefiting from higher revenue on higher closings.

Land Position. Controlled lots decreased 8.8% to 22,719, compared to 24,899 from the prior year quarter. Excluding land held for future development and land held for sale lots, active lots controlled were 22,061, down 8.6% year-over-year in part due to timing of home closings and new land deals. As of June 30, 2023, the Company controlled 52.2% of its total active lots through option agreements compared to 52.1% as of June 30, 2022.

Liquidity. At the close of the third quarter, the Company had $541.1 million of available liquidity, including $276.1 million of unrestricted cash and $265.0 million of remaining capacity under the unsecured revolving credit facility.

Debt Repurchases. During the quarter, the Company repurchased $5.0 million of its outstanding 6.750% unsecured Senior Notes due March 2025.

Commitment to ESG Initiatives

The Company remains committed to ensuring that by the end of 2025 every new Beazer home will be Zero Energy Ready, which will meet the requirements of the U.S. Department of Energy’s Zero Energy Ready Home program. By the end of the third quarter, the Company had Zero Energy Ready homes under construction in every division, consisting of 11% of new home starts in the quarter.

In April, Beazer Homes earned the 2023 Top Workplaces Culture Excellence recognition for Leadership, Purpose and Values, Compensation and Benefits, Work-Life Flexibility and Innovation, awarded by Energage, the employee engagement platform powered by 16 years of experience surveying data from more than 27 million employees across 70,000 organizations. The Top Workplaces awards are based solely on employee feedback.

Summary results for the three and nine months ended June 30, 2023 are as follows:

 

Three Months Ended June 30,

 

2023

 

2022

 

Change*

New home orders, net of cancellations

 

1,200

 

 

 

925

 

 

29.7

%

Orders per community per month

 

3.2

 

 

 

2.5

 

 

28.3

%

Average active community count

 

124

 

 

 

123

 

 

1.1

%

Active community count at quarter-end

 

125

 

 

 

124

 

 

0.8

%

Cancellation rates

 

16.1

%

 

 

17.0

%

 

(90) bps

 

 

 

 

 

 

Total home closings

 

1,117

 

 

 

1,043

 

 

7.1

%

Average selling price (ASP) from closings (in thousands)

$

510.8

 

 

$

501.7

 

 

1.8

%

Homebuilding revenue (in millions)

$

570.5

 

 

$

523.2

 

 

9.0

%

Homebuilding gross margin

 

20.2

%

 

 

25.1

%

 

(490) bps

Homebuilding gross margin, excluding impairments and abandonments (I&A)

 

20.3

%

 

 

25.1

%

 

(480) bps

Homebuilding gross margin, excluding I&A and interest amortized to cost of sales

 

23.4

%

 

 

28.1

%

 

(470) bps

 

 

 

 

 

 

Income from continuing operations before income taxes (in millions)

$

50.1

 

 

$

67.5

 

 

(25.8

)%

Expense from income taxes (in millions)

$

6.2

 

 

$

13.2

 

 

(52.5

)%

Income from continuing operations, net of tax (in millions)

$

43.8

 

 

$

54.3

 

 

(19.3

)%

Basic income per share from continuing operations

$

1.44

 

 

$

1.78

 

 

(19.1

)%

Diluted income per share from continuing operations

$

1.42

 

 

$

1.76

 

 

(19.3

)%

 

 

 

 

 

 

Net income (in millions)

$

43.8

 

 

$

54.3

 

 

(19.3

)%

 

 

 

 

 

 

Land acquisition and land development spending (in millions)

$

131.6

 

 

$

159.5

 

 

(17.5

)%

 

 

 

 

 

 

Adjusted EBITDA (in millions)

$

72.8

 

 

$

88.2

 

 

(17.5

)%

LTM Adjusted EBITDA (in millions)

$

325.4

 

 

$

302.8

 

 

7.5

%

* Change and totals are calculated using unrounded numbers.

"LTM" indicates amounts for the trailing 12 months.

 

Nine Months Ended June 30,

 

2023

 

2022

 

Change*

New home orders, net of cancellations

 

2,863

 

 

 

3,357

 

 

(14.7

)%

LTM orders per community per month

 

2.4

 

 

 

3.1

 

 

(22.6

)%

Cancellation rates

 

21.5

%

 

 

13.5

%

 

800 bps

 

 

 

 

 

 

Total home closings

 

3,013

 

 

 

3,140

 

 

(4.0

)%

ASP from closings (in thousands)

$

516.6

 

 

$

470.4

 

 

9.8

%

Homebuilding revenue (in millions)

$

1,556.6

 

 

$

1,477.2

 

 

5.4

%

Homebuilding gross margin

 

19.4

%

 

 

23.3

%

 

(390) bps

Homebuilding gross margin, excluding I&A

 

19.5

%

 

 

23.3

%

 

(380) bps

Homebuilding gross margin, excluding I&A and interest amortized to cost of sales

 

22.6

%

 

 

26.5

%

 

(390) bps

 

 

 

 

 

 

Income from continuing operations before income taxes (in millions)

$

118.4

 

 

$

163.6

 

 

(27.6

)%

Expense from income taxes (in millions)

$

15.5

 

 

$

29.7

 

 

(47.8

)%

Income from continuing operations, net of tax (in millions)

$

102.9

 

 

$

133.9

 

 

(23.1

)%

Basic income per share from continuing operations

$

3.39

 

 

$

4.39

 

 

(22.8

)%

Diluted income per share from continuing operations

$

3.36

 

 

$

4.35

 

 

(22.8

)%

 

 

 

 

 

 

Net income (in millions)

$

102.9

 

 

$

133.9

 

 

(23.2

)%

 

 

 

 

 

 

Land acquisition and land development spending (in millions)

$

359.3

 

 

$

422.8

 

 

(15.0

)%

 

 

 

 

 

 

Adjusted EBITDA (in millions)

$

182.1

 

 

$

226.7

 

 

(19.7

)%

* Change and totals are calculated using unrounded numbers.

"LTM" indicates amounts for the trailing 12 months.

 

As of June 30,

 

 

2023

 

 

2022

 

Change

Backlog units

 

1,941

 

 

3,003

 

(35.4

)%

Dollar value of backlog (in millions)

$

1,009.8

 

$

1,588.0

 

(36.4

)%

ASP in backlog (in thousands)

$

520.3

 

$

528.8

 

(1.6

)%

Land and lots controlled

 

22,719

 

 

24,899

 

(8.8

)%

Conference Call

The Company will hold a conference call on July 27, 2023 at 5:00 p.m. ET to discuss these results. Interested parties may listen to the conference call and view the Company's slide presentation on the "Investor Relations" page of the Company's website, www.beazer.com. In addition, the conference call will be available by telephone at 800-475-0542 (for international callers, dial 630-395-0227). To be admitted to the call, enter the pass code “8571348". A replay of the conference call will be available, until 11:59 PM ET on August 3, 2023 at 800-568-3652 (for international callers, dial 203-369-3289) with pass code “3740”.

About Beazer Homes

Headquartered in Atlanta, Beazer Homes (NYSE: BZH) is one of the country’s largest homebuilders. Every Beazer home is designed and built to provide Surprising Performance, giving you more quality and more comfort from the moment you move in – saving you money every month. With Beazer's Choice Plans™, you can personalize your primary living areas – giving you a choice of how you want to live in the home, at no additional cost. And unlike most national homebuilders, we empower our customers to shop and compare loan options. Our Mortgage Choice program gives you the resources to easily compare multiple loan offers and choose the best lender and loan offer for you, saving you thousands over the life of your loan.

We build our homes in Arizona, California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada, North Carolina, South Carolina, Tennessee, Texas, and Virginia. For more information, visit beazer.com, or check out Beazer on Facebook, Instagram and Twitter.

This press release contains forward-looking statements. These forward-looking statements represent our expectations or beliefs concerning future events, and it is possible that the results described in this press release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of our control, that could cause actual results to differ materially from the results discussed in the forward-looking statements, including, among other things:

  • the cyclical nature of the homebuilding industry and deterioration in homebuilding industry conditions;
  • continued increases in mortgage interest rates and reduced availability of mortgage financing due to, among other factors, additional actions by the Federal Reserve to address sharp increases in inflation;
  • other economic changes nationally and in local markets, including changes in consumer confidence, wage levels, declines in employment levels, and an increase in the number of foreclosures, each of which is outside our control and affects the affordability of, and demand for, the homes we sell;
  • continued supply chain challenges negatively impacting our homebuilding production, including shortages of raw materials and other critical components such as windows, doors, and appliances;
  • continued shortages of or increased costs for labor used in housing production, and the level of quality and craftsmanship provided by such labor;
  • inaccurate estimates related to homes to be delivered in the future (backlog), as they are subject to various cancellation risks that cannot be fully controlled;
  • financial institution disruptions, such as recent bank failures;
  • potential negative impacts of public health emergencies such as the COVID-19 pandemic, which, in addition to exacerbating each of the risks listed above and below, may include a significant decrease in demand for our homes or consumer confidence generally with respect to purchasing a home, an inability to sell and build homes in a typical manner or at all, increased costs or decreased supply of building materials, including lumber, or the availability of subcontractors, housing inspectors, and other third-parties we rely on to support our operations, and recognizing charges in future periods, which may be material, for goodwill impairments, inventory impairments and/or land option agreement abandonments;
  • factors affecting margins, such as adjustments to home pricing, increased sales incentives and mortgage rate buy down programs in order to remain competitive; decreased revenues; decreased land values underlying land option agreements; increased land development costs in communities under development or delays or difficulties in implementing initiatives to reduce our cycle times and production and overhead cost structures; not being able to pass on cost increases (including cost increases due to increasing the energy efficiency of our homes) through pricing increases;
  • the availability and cost of land and the risks associated with the future value of our inventory, such as asset impairment charges we took on select California assets during the second quarter of fiscal 2019;
  • our ability to raise debt and/or equity capital, due to factors such as limitations in the capital markets (including market volatility), adverse credit market conditions and financial institution disruptions, and our ability to otherwise meet our ongoing liquidity needs (which could cause us to fail to meet the terms of our covenants and other requirements under our various debt instruments and therefore trigger an acceleration of a significant portion or all of our outstanding debt obligations), including the impact of any downgrades of our credit ratings or reduction in our liquidity levels;
  • market perceptions regarding any capital raising initiatives we may undertake (including future issuances of equity or debt capital);
  • changes in tax laws or otherwise regarding the deductibility of mortgage interest expenses and real estate taxes;
  • increased competition or delays in reacting to changing consumer preferences in home design;
  • natural disasters or other related events that could result in delays in land development or home construction, increase our costs or decrease demand in the impacted areas;
  • the potential recoverability of our deferred tax assets;
  • increases in corporate tax rates;
  • potential delays or increased costs in obtaining necessary permits as a result of changes to, or complying with, laws, regulations or governmental policies, and possible penalties for failure to comply with such laws, regulations or governmental policies, including those related to the environment;
  • the results of litigation or government proceedings and fulfillment of any related obligations;
  • the impact of construction defect and home warranty claims;
  • the cost and availability of insurance and surety bonds, as well as the sufficiency of these instruments to cover potential losses incurred;
  • the impact of information technology failures, cybersecurity issues or data security breaches;
  • the impact of governmental regulations on homebuilding in key markets, such as regulations limiting the availability of water and electricity (including availability of electrical equipment such as transformers and meters);
  • the success of our ESG initiatives, including our ability to meet our goal that by 2025 every home we build will be Net Zero Energy Ready, as well as the success of any other related partnerships or pilot programs we may enter into in order to increase the energy efficiency of our homes and prepare for a Net Zero future; and
  • terrorist acts, protests and civil unrest, political uncertainty, acts of war or other factors over which the Company has no control.

Any forward-looking statement, including any statement expressing confidence regarding future outcomes, speaks only as of the date on which such statement is made and, except as required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible to predict all such factors.

-Tables Follow-

BEAZER HOMES USA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

Three Months Ended

 

Nine Months Ended

 

June 30,

 

June 30,

in thousands (except per share data)

 

2023

 

 

 

2022

 

 

2023

 

 

 

2022

 

Total revenue

$

572,544

 

 

$

526,666

 

$

1,561,380

 

 

$

1,489,321

 

Home construction and land sales expenses

 

455,485

 

 

 

394,201

 

 

1,255,356

 

 

 

1,138,771

 

Inventory impairments and abandonments

 

315

 

 

 

 

 

616

 

 

 

935

 

Gross profit

 

116,744

 

 

 

132,465

 

 

305,408

 

 

 

349,615

 

Commissions

 

19,473

 

 

 

16,277

 

 

51,883

 

 

 

48,668

 

General and administrative expenses

 

46,464

 

 

 

45,760

 

 

129,891

 

 

 

129,057

 

Depreciation and amortization

 

2,907

 

 

 

3,189

 

 

8,440

 

 

 

9,101

 

Operating income

 

47,900

 

 

 

67,239

 

 

115,194

 

 

 

162,789

 

(Loss) gain on extinguishment of debt, net

 

(18

)

 

 

86

 

 

(533

)

 

 

(78

)

Other income, net

 

2,176

 

 

 

137

 

 

3,759

 

 

 

859

 

Income from continuing operations before income taxes

 

50,058

 

 

 

67,462

 

 

118,420

 

 

 

163,570

 

Expense from income taxes

 

6,241

 

 

 

13,150

 

 

15,488

 

 

 

29,685

 

Income from continuing operations

 

43,817

 

 

 

54,312

 

 

102,932

 

 

 

133,885

 

Gain (loss) from discontinued operations, net of tax

 

 

 

 

12

 

 

(77

)

 

 

(4

)

Net income

$

43,817

 

 

$

54,324

 

$

102,855

 

 

$

133,881

 

Weighted-average number of shares:

 

 

 

 

 

 

 

Basic

 

30,395

 

 

 

30,512

 

 

30,335

 

 

 

30,480

 

Diluted

 

30,860

 

 

 

30,872

 

 

30,649

 

 

 

30,806

 

Basic income per share:

 

 

 

 

 

 

 

Continuing operations

$

1.44

 

 

$

1.78

 

$

3.39

 

 

$

4.39

 

Discontinued operations

 

 

 

 

 

 

 

 

 

 

Total

$

1.44

 

 

$

1.78

 

$

3.39

 

 

$

4.39

 

Diluted income per share:

 

 

 

 

 

 

 

Continuing operations

$

1.42

 

 

$

1.76

 

$

3.36

 

 

$

4.35

 

Discontinued operations

 

 

 

 

 

 

 

 

 

 

Total

$

1.42

 

 

$

1.76

 

$

3.36

 

 

$

4.35

 

 

Three Months Ended

 

Nine Months Ended

 

June 30,

 

June 30,

Capitalized Interest in Inventory

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Capitalized interest in inventory, beginning of period

$

113,886

 

 

$

112,686

 

 

$

109,088

 

 

$

106,985

 

Interest incurred

 

18,027

 

 

 

18,728

 

 

 

53,891

 

 

 

55,292

 

Capitalized interest amortized to home construction and land sales expenses

 

(17,504

)

 

 

(15,679

)

 

 

(48,570

)

 

 

(46,542

)

Capitalized interest in inventory, end of period

$

114,409

 

 

$

115,735

 

 

$

114,409

 

 

$

115,735

 

BEAZER HOMES USA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

in thousands (except share and per share data)

June 30, 2023

 

September 30, 2022

ASSETS

 

 

 

Cash and cash equivalents

$

276,125

 

$

214,594

Restricted cash

 

39,540

 

 

37,234

Accounts receivable (net of allowance of $284 and $284, respectively)

 

33,195

 

 

35,890

Income tax receivable

 

 

 

9,606

Owned inventory

 

1,741,651

 

 

1,737,865

Deferred tax assets, net

 

141,761

 

 

156,358

Property and equipment, net

 

28,927

 

 

24,566

Operating lease right-of-use assets

 

16,156

 

 

9,795

Goodwill

 

11,376

 

 

11,376

Other assets

 

29,867

 

 

14,679

Total assets

$

2,318,598

 

$

2,251,963

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Trade accounts payable

$

136,813

 

$

143,641

Operating lease liabilities

 

17,665

 

 

11,208

Other liabilities

 

138,207

 

 

174,388

Total debt (net of debt issuance costs of $6,142 and $7,280, respectively)

 

981,128

 

 

983,440

Total liabilities

 

1,273,813

 

 

1,312,677

Stockholders’ equity:

 

 

 

Preferred stock (par value $0.01 per share, 5,000,000 shares authorized, no shares issued)

 

 

 

Common stock (par value $0.001 per share, 63,000,000 shares authorized, 31,339,214 issued and outstanding and 30,880,138 issued and outstanding, respectively)

 

31

 

 

31

Paid-in capital

 

862,500

 

 

859,856

Retained earnings

 

182,254

 

 

79,399

Total stockholders’ equity

 

1,044,785

 

 

939,286

Total liabilities and stockholders’ equity

$

2,318,598

 

$

2,251,963

 

 

 

 

Inventory Breakdown

 

 

 

Homes under construction

$

719,231

 

$

785,742

Land under development

 

785,752

 

 

731,190

Land held for future development

 

19,879

 

 

19,879

Land held for sale

 

16,764

 

 

15,674

Capitalized interest

 

114,409

 

 

109,088

Model homes

 

85,616

 

 

76,292

Total owned inventory

$

1,741,651

 

$

1,737,865

 

BEAZER HOMES USA, INC.

CONSOLIDATED OPERATING AND FINANCIAL DATA – CONTINUING OPERATIONS

 

Three Months Ended June 30,

 

Nine Months Ended June 30,

SELECTED OPERATING DATA

2023

 

2022

 

2023

 

2022

Closings:

 

 

 

 

 

 

 

West region

634

 

666

 

1,775

 

1,934

East region

253

 

212

 

644

 

709

Southeast region

230

 

165

 

594

 

497

Total closings

1,117

 

1,043

 

3,013

 

3,140

 

 

 

 

 

 

 

 

New orders, net of cancellations:

 

 

 

 

 

 

 

West region

705

 

576

 

1,584

 

2,063

East region

251

 

192

 

667

 

712

Southeast region

244

 

157

 

612

 

582

Total new orders, net

1,200

 

925

 

2,863

 

3,357

 

As of June 30,

Backlog units:

2023

 

2022

West region

 

1,066

 

 

1,782

East region

 

433

 

 

614

Southeast region

 

442

 

 

607

Total backlog units

 

1,941

 

 

3,003

Aggregate dollar value of homes in backlog (in millions)

$

1,009.8

 

$

1,588.0

ASP in backlog (in thousands)

$

520.3

 

$

528.8

in thousands

Three Months Ended June 30,

 

Nine Months Ended June 30,

SUPPLEMENTAL FINANCIAL DATA

 

2023

 

 

2022

 

 

2023

 

 

2022

Homebuilding revenue:

 

 

 

 

 

 

 

West region

$

326,883

 

$

324,074

 

$

930,166

 

$

883,453

East region

 

132,863

 

 

112,237

 

 

338,763

 

 

354,948

Southeast region

 

110,789

 

 

86,918

 

 

287,697

 

 

238,765

Total homebuilding revenue

$

570,535

 

$

523,229

 

$

1,556,626

 

$

1,477,166

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

Homebuilding

$

570,535

 

$

523,229

 

$

1,556,626

 

$

1,477,166

Land sales and other

 

2,009

 

 

3,437

 

 

4,754

 

 

12,155

Total revenue

$

572,544

 

$

526,666

 

$

1,561,380

 

$

1,489,321

 

 

 

 

 

 

 

 

Gross profit:

 

 

 

 

 

 

 

Homebuilding

$

115,493

 

$

131,549

 

$

302,195

 

$

344,255

Land sales and other

 

1,251

 

 

916

 

 

3,213

 

 

5,360

Total gross profit

$

116,744

 

$

132,465

 

$

305,408

 

$

349,615

Reconciliation of homebuilding gross profit and the related gross margin excluding impairments and abandonments and interest amortized to cost of sales to homebuilding gross profit and gross margin, the most directly comparable GAAP measure, is provided for each period discussed below. Management believes that this information assists investors in comparing the operating characteristics of homebuilding activities by eliminating many of the differences in companies' respective level of impairments and level of debt. These measures should not be considered alternative to homebuilding gross profit and gross margin determined in accordance with GAAP as an indicator of operating performance.

 

Three Months Ended June 30,

 

Nine Months Ended June 30,

in thousands

2023

 

 

2022

 

 

2023

 

 

2022

 

Homebuilding gross

profit/margin

$

115,493

 

20.2

%

 

$

131,549

 

25.1

%

 

$

302,195

 

19.4

%

 

$

344,255

 

23.3

%

Inventory impairments and

abandonments (I&A)

 

315

 

 

 

 

 

 

 

 

616

 

 

 

 

495

 

 

Homebuilding gross

profit/margin excluding I&A

 

115,808

 

20.3

%

 

 

131,549

 

25.1

%

 

 

302,811

 

19.5

%

 

 

344,750

 

23.3

%

Interest amortized to cost of

sales

 

17,504

 

 

 

 

15,679

 

 

 

 

48,570

 

 

 

 

46,542

 

 

Homebuilding gross profit/margin excluding I&A

and interest amortized to cost

of sales

$

133,312

 

23.4

%

 

$

147,228

 

28.1

%

 

$

351,381

 

22.6

%

 

$

391,292

 

26.5

%

Reconciliation of Adjusted EBITDA to total company net income, the most directly comparable GAAP measure, is provided for each period discussed below. Management believes that Adjusted EBITDA assists investors in understanding and comparing the operating characteristics of homebuilding activities by eliminating many of the differences in companies' respective capitalization, tax position, and level of impairments. These EBITDA measures should not be considered alternatives to net income determined in accordance with GAAP as an indicator of operating performance.

 

Three Months Ended June 30,

 

Nine Months Ended June 30,

 

LTM Ended June 30,(a)

in thousands

 

2023

 

 

2022

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

Net income

$

43,817

 

$

54,324

 

 

$

102,855

 

$

133,881

 

$

189,678

 

$

182,242

Expense from income taxes

 

6,241

 

 

13,152

 

 

 

15,466

 

 

29,683

 

 

39,050

 

 

28,597

Interest amortized to home construction and land sales expenses and capitalized interest impaired

 

17,504

 

 

15,679

 

 

 

48,570

 

 

46,542

 

 

74,086

 

 

68,380

EBIT

 

67,562

 

 

83,155

 

 

 

166,891

 

 

210,106

 

 

302,814

 

 

279,219

Depreciation and amortization

 

2,907

 

 

3,189

 

 

 

8,440

 

 

9,101

 

 

12,699

 

 

12,583

EBITDA

 

70,469

 

 

86,344

 

 

 

175,331

 

 

219,207

 

 

315,513

 

 

291,802

Stock-based compensation expense

 

1,989

 

 

1,983

 

 

 

5,247

 

 

6,515

 

 

7,210

 

 

9,428

Loss (gain) on extinguishment of debt

 

18

 

 

(86

)

 

 

533

 

 

78

 

 

146

 

 

490

Inventory impairments and abandonments(b)

 

315

 

 

 

 

 

616

 

 

935

 

 

2,205

 

 

1,092

Severance expenses

 

 

 

 

 

 

335

 

 

 

 

335

 

 

Adjusted EBITDA

$

72,791

 

$

88,241

 

 

$

182,062

 

$

226,735

 

$

325,409

 

$

302,812

(a)

 

"LTM" indicates amounts for the trailing 12 months.

(b)

 

In periods during which we impaired certain of our inventory assets, capitalized interest that is impaired is included in the line above titled "Interest amortized to home construction and land sales expenses and capitalized interest impaired."

 

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