Beazer Homes USA, Inc. (NYSE: BZH), Atlanta, on Friday before market open reported a profit of $44.5 million ($1.09 per diluted) for its fiscal first quarter ended Dec, 31, owing to a $101 million tax benefit under the Worker, Homeownership and Business Assistance Act of 2009, which allowed the company to carry back 2009 losses against profits going back five years. The company posted $94 million of that tax benefit to earnings for the quarter.
The profit, which included non-cash pre-tax charges of $8.8 million for inventory impairments, compares with a loss of $79.2 million for the comparable quarter in the prior fiscal year, which included charges and impairments of $12.4 million. Analysts were expecting a loss of 90 cents per share. Share of Beazer initially rose in Friday morning trading before reversing on an overall market slide later in the day. Without the tax benefit, however, the company posted a $49.5 million loss from continuing operations.
Revenues were roughly flat with the year-ago quarter, coming in at $218.8 million, compared to $218.2 million. Home closings rose 8% to 961 homes, but average prices fell 8.8%.New orders jumped 36.6% to 728 homes, driven by a 41.1% increase in new orders in the West segment, as the cancellation rate improved to 26.9% in the first quarter compared to 46.1% in the first quarter of the prior year.
Backlog as of Dec. 31 was 960 homes with a sales value of $232.3 million compared to 961 homes with a sales value of $226.5 million as of December 31, 2008.
Lot count was down 18.7% from yearend 2008 and 2.8% from the end of the previous quarter at 29,784 lots, 83% owned and 17% optioned, including 738 owned lots in discontinued operations. As of Dec. 31, 2009, unsold finished homes totaled 291, a decline of approximately 42.1% from the level a year before.
Gross profit margin was 8.8% (12.9% without impairments and abandonments), compared to 5.6% (11.3% without impairments and abandonments) in the first quarter of the prior year. SG&A was $45.8 million, down from $53.9 million in the year-ago quarter.
The company ended the quarter with total cash and cash equivalents of $480.5 million, including restricted cash of $47.7 million against long term debt of approximately $1.5 billion and $34.5 million in debt related to joint ventures. As previously reported, on January 12, 2010, the Beazer closed its concurrent public offerings of 22,425,000 shares of its common stock and $57.5 million mandatory convertible notes, a portion of the proceeds from which were used to repay outstanding 2011 Senior Notes at par. Net proceeds of these transactions, after the debt repayment were approximately $24 million. In addition, on January 15, 2010, Beazer completed a partial exchange of $75 million of our outstanding junior subordinated notes.
"While it is premature to signal the beginning of a sustainable recovery in the housing market, we are seeing indications that historically high levels of home affordability, home price stability, low mortgage interest rates and home buyer tax credits may be beginning to balance out prospective home buyers' concerns about falling home prices, foreclosures, and risk of job loss in most of our markets," said Ian J. McCarthy, President and CEO. "We are also pleased with the progress we made in improving our balance sheet, both during and after the end of the quarter. The increase in equity and reduction in debt better position us to fully participate in the eventual housing recovery."