Beazer Homes USA announced Thursday that it will restate its financial statements for the fiscal years 2004 to 2006 and the interim periods of fiscal 2006 and 2007. The announcement comes after the Atlanta-based builder conducted an internal probe. The restatement may also have an impact on 1999 to 2003 financials but won't cause an adjustment to its current cash position.
The company also announced that the internal investigation found evidence that employees of its Beazer Mortgage Corporation subsidiary violated certain U.S. Department of Housing and Urban Development regulations, particularly in relation to Down Payment Assistance programs. The builder added in the report that "at this time it is not possible for the company to determine the total financial statement impact related to the mortgage issues identified in the internal investigation."
The builder might be liable for losses suffered by mortgage purchasers or HUD and will attempt to negotiate a settlement with regulatory authorities in the range of $8 million to $15 million.
In addition, Beazer announced that the company entered into a waiver and amendment of its revolving credit facility, waiving events of default that arose when the company decided to restate its financials.
Lastly, the company said that the internal investigation, in addition to a couple of external probes, would continue.
"While the restatement will address the accounting errors and irregularities preliminarily identified in the Audit Committee investigation and in the additional reviews conducted by management, the U.S. Attorney and the SEC investigations are ongoing, and there can be no assurance that there will not be additional issues or matters arising from these investigations. In addition, there can be no assurance that the Audit Committee will not discover additional information that could affect the restatement adjustments presently being considered. The company continues to fully cooperate with the U.S. Attorney and SEC investigations."
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