Beazer Homes USA, No. 7 on the 2006 BUILDER 100, is reporting a fiscal 3rd quarter net loss of $123 million on $761 million in revenue. During the same period in 2006, the Atlanta-based company had a net income of $102.6 million on $1.2 billion in revenue. Speaking at a company teleconference on Thursday, CEO Ian J. McCarthy described the past few months as "an extremely challenging period."

"Operating conditions in the housing industry deteriorated further in the fiscal third quarter and remain very challenging," says McCarthy. "Most housing markets across the country continue to be characterized by an oversupply of both new- and resale-home inventory, reduced levels of consumer demand for new homes, and aggressive price competition among home builders. These factors, together with a pronounced credit tightening in the mortgage markets, particularly for credit challenged home buyers, are likely to lead to continued difficult market conditions for Beazer Homes and other home builders. Although we cannot predict when market conditions will improve, we continue to believe that longer-term industry fundamentals remain compelling due to demographic changes, employment trends, and new-home supply constraints."

The net loss of $123 million includes pre-tax charges related to inventory impairments, abandonment of land option contracts, and goodwill impairments totaling $188.5 million. Closings for the builder in the 3rd quarter totaled 2,666 homes, compared to 4,156 in the third quarter of 2006, and new orders in 2007 3Q reached 3,055 homes, compared to 4,378 in the same quarter last year. Unsold finished homes declined 38 percent compared to the second quarter of this fiscal year.

Quarterly numbers weren't the only focus on Thursday; the company announced that it has entered into a new $500 million revolving credit facility. The new four-year credit arrangement, which matures in July 2011, replaces the company's existing $1 billion revolving credit facility, which was scheduled to mature in August 2009.

Also during the company's quarterly teleconference, McCarthy spoke about Beazer's impending SEC investigation of possible securities law violations at the company. "We intend to fully cooperate with these inquiries," he said, adding that the company has launched an internal investigation independent of management. When pressed further about the subject, McCarthy said that the advice of the company's counsel is to not comment further.

"You'll have to take it as it is," he said. "This is a company that gives full disclosure."

Prior to the July announcement that it was under a formal SEC investigation, Beazer Homes fired Chief Accounting Officer Michael T. Rand in June due to a company ethics violation stemming from attempts to destroy documents. An FBI probe was launched as a result of Rand's actions.

In March, the company received a subpoena from the U.S. Attorney's Office in the Western North Carolina relating to its mortgage origination services and alleged mortgage fraud.In February, General Counsel Kenneth J. Gary was dismissed "for a pattern of personal conduct, which includes violations of company policies."

McCarthy ended Thursday's teleconference by saying that the company "doesn't see an upturn until sometime next year."

Learn more about markets featured in this article: Atlanta, GA.