Beazer Homes USA (NYSE:BZH) on Thursday reported net income of $6.1 million, $0.19 per share, for the third fiscal quarter ended June 30, 2016, compared with a net income of $12.2 million for the quarter ended June 30, 2015. Wall Street was looking for a profit of $0.12 per share.
Results included tax expense of $5.3 million, compared to a tax benefit of $0.1 million last year, reflecting the reversal of a significant portion of the company’s valuation allowance in the fourth quarter of fiscal 2015. Net income in the quarter also included a $15.5 million benefit from insurance recoveries, offset by $11.9 million in impairment charges and $6.4 million in additional year-over-year interest expense.
Revenue and Adjusted EBITDA both grew compared to the prior year. Revenue of $459.9 million was up 7.1%, driven by an increase in home closings, which totaled 1,364, up 5.5%, and average selling prices, which reached $330.6 thousand, up 4.0%. Adjusted EBITDA rose 3.6% versus the prior year to $38.3 million.
Relative to the company’s objective to achieve $2 billion in revenue with adjusted EBITDA of at least $200 million, referred to as the “2B-10” Plan, for the trailing twelve months, total revenue was $1.8 billion, up 18.3%, and Adjusted EBITDA of $161.4 million was up $27.0 million, or 20.1%, compared to the same period last year.
BZH ended the quarter with more than $127 million of unrestricted cash and total available liquidity of more than $240 million. During the quarter, the Company reduced outstanding debt by nearly $30 million, bringing the fiscal year to date debt reduction total to over $71 million. The Company now intends to reduce debt by a total of at least $150 million during fiscal 2016, an increase of $50 million from previous expectations.
“Our results in the third quarter built on the strength we experienced in the first half of the year, as we generated EBITDA growth while reducing our leverage. Our sales pace and Average Selling Prices met our expectations in all regions, and gross margin was up sequentially as demand benefited from employment gains, low interest rates and a limited supply of new and used homes,” said Allan Merrill, CEO of Beazer Homes.