Beazer reports big losses for 1Q and 2Q
ATLANTA—Beazer Homes USA Inc. said Thursday its loss widened in its fiscal second quarter as sales fell by half.
The Atlanta-based homebuilder had been delayed in reporting its results for the period ended March 31 because it was conducting an accounting review of several prior-year periods.
It also had been delayed in reporting its fiscal first-quarter results, which it released Thursday at the same time it released its second-quarter results.
The slide in the U.S. housing market and investigations of the company's business practices have hampered Beazer for months.
In its dual financial disclosures Thursday, Beazer said it lost $229.89 million, or $5.96 a share in the quarter ended March 31, compared with a loss of $57.19 million, or $1.49 a share, in the same period a year earlier. Revenue in the quarter was $405.42 million, compared with $823.6 million in the same period a year earlier.
It recorded 1,568 home closings in the second quarter, compared with 2,748 homes in the second quarter of the prior year. A home is only booked as sold if the buyer completes the purchase at closing.
It recorded new orders of 1,956 homes in the quarter, compared with 4,090 homes in the second quarter of the prior year.
In the quarter ended Dec. 31, Beazer said it lost $138.24 million, or $3.59 a share, compared with a loss of $79.9 million, or $2.09 a share, in the same period a year earlier. Revenue in the quarter was $503.15 million, compared with $802.54 million recorded a year earlier.
It recorded 2,006 home closings in the first quarter, compared with 2,664 homes in the first quarter of the prior year. It recorded new orders of 1,252 homes in the quarter, compared with 1,783 homes in the first quarter of the prior year.
For the first six months of its current fiscal year, Beazer said it lost $368.13 million, or $9.55 a share, compared with a loss of $137.09 million, or $3.57 a share, for the same period a year earlier.
Beazer said it has pending asset sales with estimated net cash proceeds in excess of $100 million, which are expected to close over the next 120 days. The assets are located both in markets the company is exiting and in those where the company is maintaining a presence but has determined that sale of certain assets in those markets is appropriate.
On Monday, Beazer said it restated financial results for several prior-year periods and reported that it swung to a hefty loss in its fiscal fourth-quarter of 2007 amid a steep decline in revenue and home closings.
The company said the cumulative impact of its restatement for periods in the years 1998 to 2006 resulted in a $27.6 million increase in retained earnings.
Beazer attributed the errors to accounting mistakes due in part to inappropriate accumulation of reserves or accrued liabilities associated with land development and house costs. It also cited inaccurate revenue recognition related to model home sale leaseback transactions.
The positive earnings adjustment was overshadowed by the company's results for its quarter ended Sept. 30, 2007, which, like the results reported Thursday, had been delayed in reporting.
In February, Beazer said it would no longer originate mortgages and would offer its buyers mortgage services through Countrywide Financial Corp. The company also said at the time that it would stop building homes in several communities.
The company said it would restate financials for several prior-year periods after an internal probe found employees in its mortgage-origination unit violated federal lending rules. The company has said it received a subpoena from the United States Attorney's office in the Western District of North Carolina seeking documents related to the mortgage service.
Beazer previously disclosed that its former chief accounting officer may have inflated reserves and other accrued liabilities in earlier periods.
The Securities and Exchange Commission has launched a formal investigation of Beazer to determine whether any person or entity related to the company violated federal securities laws.
