Beazer Homes USA, Inc. (NYSE:BZH) after market close Tuesday reported 728 new orders for the quarter ended Dec. 31, a 36.6% increase from the same period in 2008.
Closings for the period were up 8% to 961, the company said in releasing preliminary results for the quarter.
Beazer also announced it intends to issue 18 million shares of common stock and $50 million of mandatory convertible subordinated notes to redeem in full the Company's 8 5/8% Senior Notes due 2011, which the Company will call for redemption prior to the closing of the offerings. Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC are serving as the joint book-running managers for the offerings, Deutsche Bank Securities Inc. and UBS Securities LLC will serve as joint lead managers and Moelis &Company LLC will serve as co-manager.
Shares of Beazer, which closed up 3% at $5.42, dropped 9.23% in after-market trading Tuesday to $4.92.
J.P. Morgan home building analyst Michael Rehaut said in a research note that while the order increase was a positive for both Beazer and home building in general, the stock and debt issuance was just a start in Beazers efforts to recapitalize the company. "While we do not know the amount of 1Q's charges, all else equal, this transaction would result in a net debt-to-cap of roughly 71%, down from 4Q's 83% assuming $5.00 per share for the equity. While these steps appear to be a positive start, we continue to believe BZH's still relatively high debt load and low level of equity is likely to result in additional recapitalization efforts in 2010."
The company did not report further information on orders, closings or beyond issuing regional breakouts.
New orders in the West drove much of the gain, with a 41.1% jump to 357. The East was exceptionally strong as well, with a 36.3% increase to 274. The Southeast was up a robust 22.8% to 97.
Closings, however, were driven by the East, which rose 43.2% to 388. The West was down 7.5% to 406 and the Southeast was down 7.2% to 167.