Even with more than $584 million in cash on hand, Beazer Homes USA clearly has some balance sheet issues it needs to address, company executives said during its Tuesday, Dec. 2 morning earnings conference call.

But addressing that issue is going to have to wait until the company resolves a bigger, potentially cash-gobbling issue hanging over its head--negotiating a settlement with federal and state regulators investigating its mortgage lending practices. The company has admitted its guilt, but has yet to strike a settlement.

"We are actively studying options [to bolster the balance sheet], but ... it is our continuing and current intent to attempt to resolve maters with the Department of Justice and other governmental agencies prior to engaging in any transactions to address the capital structures, and that continues to be our belief as of today, " CFO Allan Merrill said during the call.

In the meantime, the company's financials are looking direr, even with the significant increase of cash on hand. The Atlanta-based company is likely to sell fewer houses and at a lower profit in 2009, so incoming cash is likely to be down even more.

Borrowing money will be difficult since the company's stock price has plunged, pushing its debt to capitalization above 75%.

Beazer's decline in net worth has also reduced how much it would be able to borrow from its revolving line of credit. Now it is required to put up enough cash or collateral to cover 4.5 times what it borrows on its revolver and to secure its letters of credit. As a result, the company has been required to restrict $20 million of its cash to collateralize its existing outstanding letters of credits in the revolver, and it expects to add $250 million worth of assets in the next year to give it access to $35 million worth of borrowing.

"We are acutely aware of our need to reduce our leverage ratio, ... which has increased significantly this year with the reduction of our net worth due to the combination of operation losses, impairments, and the FAS 109 tax reserve," Merrill said.

There was no discussion of how long it might take to resolve the regulatory issues or how much the settlement could end up costing the company.

Meanwhile, in other significant announcements, the company reported Tuesday that it had an ownership change Dec. 31, 2007, among its stockholders under IRS rules. That change will limit losses the company can write off against profits in the future to $17 million a year for five years. But the effects of that won't hit until the company returns to profitability.

In the meantime, the company does expect to receive a $150 million tax refund in its 2009 fiscal year, which began Oct. 1.