Beazer Homes USA's CEO Ian McCarthy jokingly told investors at the Credit Suisse Home Builder Conference Tuesday (Sept. 18) that, given the company's extensive legal issues of late, he was tempted to follow a written script.

"With all the numbers of lawyers that I'm talking to today, I should just read this," he said.

In the end, he did read the official company line regarding the company's legal issues related to federal investigations of its lending practices, its own independent investigation into its lending practices, and a lawsuit it has filed against lenders asking a judge to keep them from declaring the company in default for not giving them a copy of the company's second quarter earnings.

Those details taken care of, McCarthy launched into a more preferred topic: "We would much rather talk about the business now" and what the Atlanta-based company is doing to survive the tough market.

Cost reduction is a major focus, he said. The company has cut $60 million of overhead out of the business by reducing employees and other costs. And the company is also saving money because it isn't buying land.

Reducing the costs of building a house is a battle being fought and won on a number of fronts, McCarthy said. The company is standardizing and simplifying all of its processes.

Architecture, design and planning have been centralized in its Atlanta office, with the exception of homes being built in California. "One design team now is really trying to get efficiencies across the whole product range," he said. The company has dramatically reduced the number of SKU's to further simplify purchasing.

It has also quadrupled the incentives offered by manufacturers.

Cash generation is another initiative. The company had $130 million in cash on hand at the end of June and the goal is to have $300 million by the end of the year. "We are confident we can get to that $300 million."

Beazer is in the process of reviewing not only every market where it is building, but the sub-markets within them to find out whether to stay and, if so, what kind of product would work best.

"We want to identify where we made money and what nodes of buyer demand are available, which buyer profiles are more likely to be strong," said McCarthy. "I think the basis of (the review) is very fundamental. It's looking at demographic drivers of the business going forward...Interest rates don't drive the market, hot bodies do."

The company also offered more color on its initiative to reduce its mortgage company's warehouse credit line from $100 million to $17.5 million as well.

"We were not making any money and we were arguably making less money under our warehouse line," said McCarthy. "There was no reason to have a $100 million facility."

The company has little borrowed from the line of credit. "We didn't even have a warehouse line until about 18 months ago," he said.