Beazer Homes USA Inc. (NYSE:BZH), Atlanta, on Thursday after market close reported a net loss of loss of $27.9 million (-$0.72) per share for its fiscal third quarter, easily beating the Wall Street consensus estimate of a loss of $1.53 per share. The loss was a significant improvement from the $109.7 million (-$2.85) lost in the comparable quarter last year.
The loss included charges of $28.6 million for impairments, abandonment of land option contracts and other write-downs. It also included a charge of$4.8 million for joint venture impairments as well as a deferred tax valuation allowance of $4.5 million. The company also booked a $55.2 million gain on the repurchase of $115.5 million of senior notes in open market transactions for an aggregate purchase price of $58.2 million.
Revenue declined 48.3% year-over-year in the June quarter, due to a 43.4% decline in total home closings to 950 and an 8.7% decline in the average selling price, which was not specified in the company's earnings release.Net new home orders totaled 1,537 for the quarter, a decrease of 13.4% the third quarter of the prior fiscal year. However, net orders declined 5.0% in markets where the Company maintains a presence and 99.4% in its exit markets. The cancellation rate for the third quarter improved to 23.0%, compared to 29.8% in the second quarter of this fiscal year and 36.8% in the third quarter of the prior year.
Backlog as of June 30, 2009 was 1,867 homes with a sales value of $430.8 million compared to 1,280 homes with a sales value of $296.6 million as of March 31, 2009 and 2,716 homes with a sales value of $668.1 million as of June 30, 2008.
Beazer controlled 32,904 lots at June 30, 2009 (81% owned and 19% controlled under options),down 17% and 28.8% from levels as of September 30, 2008 and June 30, 2008, respectively. Also at quarter's end, unsold finished homes totaled 234, down 38% from the second quarter of this fiscal year and 22% from the level a year ago.
Beazer at quarter's end had cash and cash equivalents of $464.9 million, compared to $559.5 million at March 31, 2009 and $314.2 million at June 30, 2008. It also reduced the amount avialable under its revolver to $22 million provided by one lender. The company is carrying more than $1.5 billion in longer-term debt on its balance sheet.
"Although the economic recession continued to weigh on both the overall housing industry and our operations in the third quarter, we continued to experience sequential improvement in sales trends," said Ian J. McCarthy, president and CEO. "In addition to normal seasonal patterns, we attribute this increased demand to attractive interest rates, historically high housing affordability and federal and state tax credits which have enticed more prospective buyers to purchase a new home. On the other hand, we remain cautious as rising levels of both unemployment and foreclosures, coupled with the scheduled expiration of the federal home purchase tax credit, make it difficult to predict when and to what extent housing market conditions will sustainably recover."