Orders were flat year-over-year for Atlanta-based Beazer Homes USA, according to the company’s 2015 fiscal results for the fourth quarter and fiscal year ended Sept. 30.

Beazer saw 1,170 new home orders in the fourth quarter, three more than 2014’s fourth quarter, failing to meet analyst projections. J.P. Morgan's Michael Rehaut estimated a 6% growth in orders while UBS set the bar high at 14%. Orders were up 26% in the West region, but down 31% in the East. UBS did note in its analysis that Beazer is in the process of exiting its operations in New Jersey (announced in F2Q), which likely accounted for some of this decline.


For the full year, new home orders increased 12.8%, with an average active community count that was 13.4% higher than a year ago. The company reported income from continuing operations of $346.6 million for its full year fiscal 2015, including a $324.6 million tax benefit that reflects the reversal of a substantial portion of the valuation allowance against its deferred tax assets. Adjusted EBITDA, excluding unexpected warranty costs and a litigation settlement in discontinued operations, was $144.1 million for the year, up $10.9 million from fiscal 2014.

Despite the results of the quarter, USB states, “Our confidence in the ongoing turnaround at Beazer reflects our view that management's efforts to improve absorptions, cut costs, and raise profitability will allow it to narrow peer relative underperformance.”

Rehaut rates the stock neutral relative to its peers. “Overall, we believe BZH’s valuation fairly reflects its recent return to full year profitability and our outlook for further solid earnings improvement.”

Allan Merrill, CEO of Beazer, likes the track his company is on. “After returning to profitability last year, 2015 represented a meaningful step forward in achieving our '2B-10' goals, with growth in both revenue and Adjusted EBITDA arising from higher community count, additional closings and an increase in average sales prices,” he said in a release. “This was accomplished while maintaining our operating margins, as the benefit from improving leverage and higher prices offset the impact from rising costs.

“Looking ahead to fiscal 2016 and beyond,” he continued, “we expect significant EBITDA growth, as we benefit from more closings, further increases in average sales prices and additional fixed cost leverage, enabling us to achieve our '2B-10' goals in fiscal 2017, in line with our previous guidance. At the same time, we expect to take steps this year to reduce our leverage, reflecting our view that doing so in an improving market will create long-term shareholder value.”