Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com) today announced its financial results for the three and nine months ended June 30, 2021.

“We had a very successful third quarter, driven by strong operational execution and continued strength in the housing market,” said Allan P. Merrill, the company’s Chairman and Chief Executive Officer. “We generated significant gains in operating margin and adjusted EBITDA, leading to quarterly net income that was more than double the same period last year. At the same time, we grew our total active lot position while continuing to reduce leverage.”

Commenting on fiscal 2021 full-year expectations, Mr. Merrill said, “With our outstanding performance in the third quarter and our confidence in fourth quarter results, we now expect fiscal 2021 earnings per share to be above $3.25.”

Looking at fiscal 2022, Mr. Merrill concluded, “We are positioned to generate double-digit growth in earnings per share for shareholders while expanding our ESG activities to create durable value for all of our stakeholders.”

Beazer Homes Fiscal Third Quarter 2021 Highlights and Comparison to Fiscal Third Quarter 2020

• Net income from continuing operations of $37.1 million, or $1.22 per diluted share, compared to net income from continuing operations of $15.3 million, or $0.51 per diluted share, in fiscal third quarter 2020
• Adjusted EBITDA of $78.8 million, up 45.9%
• Homebuilding revenue of $566.9 million, up 6.5% on a 5.5% increase in average selling price to $411.4 thousand and a 0.9% increase in home closings to 1,378
• Homebuilding gross margin was 20.2%, up 320 basis points. Excluding impairments, abandonments and amortized interest, homebuilding gross margin was 24.2%, up 300 basis points
• SG&A as a percentage of total revenue was 11.1%, down 60 basis points year-over-year
• Net new orders of 1,199, down 12.6% on a 18.6% increase in orders/community/month to 3.2 and a 26.3% decrease in average community count to 123
• Dollar value of backlog of $1,354.6 million, up 53.1%
• Unrestricted cash at quarter end was $358.3 million; total liquidity was $608.3 million

The following provides additional details on the Company's performance during the fiscal third quarter 2021:

Profitability. Net income from continuing operations was $37.1 million, generating diluted earnings per share of $1.22. Third quarter adjusted EBITDA of $78.8 million was up $24.8 million year-over-year. The increase in profitability was primarily driven by higher revenue, homebuilding gross margin and improved SG&A leverage.

Orders. Net new orders for the third quarter decreased to 1,199, down 12.6% from the prior year. The decrease in net new orders was driven by a 26.3% decrease in average community count to 123, partially offset by a 18.6% increase in sales pace to 3.2 orders per community per month, up from 2.7 in the previous year. In a number of communities, we proactively limited sales pace to align with the pace of production, optimize margins and ensure a positive customer experience. The cancellation rate for the quarter was 10.9%, an improvement of 1,020 basis points year-over-year.

Backlog. The dollar value of homes in backlog as of June 30, 2021 increased 53.1% to $1,354.6 million, representing 3,124 homes, compared to $884.9 million, representing 2,237 homes, at the same time last year. The average selling price of homes in backlog was $433.6 thousand, up 9.6% year-over-year.

Homebuilding Revenue. Third quarter homebuilding revenue was $566.9 million, up 6.5% year-over-year. The increase in homebuilding revenue was driven by a 5.5% increase in the average selling price to $411.4 thousand and a 0.9% increase in home closings to 1,378 homes.

Homebuilding Gross Margin. Homebuilding gross margin (excluding impairments, abandonments and amortized interest) was 24.2% for the third quarter, up 300 basis points year-over-year, driven primarily by lower sales incentives and pricing increases. Gross margin was up across each of our geographic segments.

SG&A Expenses. Selling, general and administrative expenses as a percentage of total revenue was 11.1% for the quarter, down 60 basis points year-over-year as a result of the Company's continued focus on overhead cost management while driving revenue growth.

Liquidity. At the close of the third quarter, the Company had approximately $608.3 million of available liquidity, including $358.3 million of unrestricted cash and a fully undrawn revolving credit facility capacity of $250.0 million.

Debt Repurchases. The Company repurchased $14.0 million of its outstanding 5.875% unsecured Senior Notes due October 2027 at an average price of $106.545 per $100 principal amount.

Commitment to Net Zero Energy Ready

Reflecting our continued leadership and commitment to energy efficiency, during the quarter, Brian Shanks, Beazer’s Manager of National Accounts and Governmental Affairs, was named to the International Code Council (ICC) Residential Energy Code Consensus Committee created to lead development of future energy codes. The new committee will begin work this summer on developing the 2024 International Energy Conservation Code (IECC).

In December 2020, Beazer became the first national builder to publicly commit to ensuring that by the end of 2025 every home we build will be Net Zero Energy Ready. Net Zero Energy Ready means that each home will have a gross HERS® index score (before any benefit of renewable energy production) of 45 or less, and homeowners will be able to achieve net zero energy consumption by attaching a properly sized renewable energy system.

Summary results for the three and nine months ended June 30, 2021 are as follows:

Conference Call

The Company will hold a conference call on July 29, 2021 at 5:00 p.m. ET to discuss these results. Interested parties may listen to the conference call and view the Company's slide presentation on the "Investor Relations" page of the Company's website, www.beazer.com. In addition, the conference call will be available by telephone at 800-475-0542 (for international callers, dial 517-308-9429). To be admitted to the call, enter the pass code “8571348". A replay of the conference call will be available, until 10:00 PM ET on August 6, 2021 at 800-391-9853 (for international callers, dial 203-369-3269) with pass code “3794.”

About Beazer Homes

Headquartered in Atlanta, Beazer Homes (NYSE: BZH) is one of the country’s largest homebuilders. Every Beazer home is designed and built to provide Surprising Performance, giving you more quality and more comfort from the moment you move in – saving you money every month. With Beazer's Choice Plans™, you can personalize your primary living areas – giving you a choice of how you want to live in the home, at no additional cost. And unlike most national homebuilders, we empower our customers to shop and compare loan options. Our Mortgage Choice program gives you the resources to easily compare multiple loan offers and choose the best lender and loan offer for you, which will save you thousands over the life of your loan.

We build our homes in Arizona, California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada, North Carolina, South Carolina, Tennessee, Texas, and Virginia. For more information, visit beazer.com, or check out Beazer on Facebook, Instagram and Twitter.

This press release contains forward-looking statements. These forward-looking statements represent our expectations or beliefs concerning future events, and it is possible that the results described in this press release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of our control, that could cause actual results to differ materially from the results discussed in the forward-looking statements, including, among other things: (i) the cyclical nature of the homebuilding industry and a potential deterioration in homebuilding industry conditions; (ii) economic changes nationally or in local markets, changes in consumer confidence, wage levels, declines in employment levels, inflation and governmental actions, each of which is outside our control and affects the affordability of and demand for, the homes we sell; (iii) potential negative impacts of the COVID-19 pandemic, which, in addition to exacerbating each of the risks listed above and below, may include a significant decrease in demand for our homes or consumer confidence generally with respect to purchasing a home, an inability to sell and build homes in a typical manner or at all, increased costs or decreased supply of building materials, including lumber, or the availability of subcontractors, housing inspectors, and other third-parties we rely on to support our operations, and recognizing charges in future periods, which may be material, for goodwill impairments, inventory impairments and/or land option contract abandonments; (iv) shortages of or increased prices for labor, land or raw materials used in housing production, and the level of quality and craftsmanship provided by our subcontractors; (v) the availability and cost of land and the risks associated with the future value of our inventory, such as asset impairment charges we took on select California assets during the second quarter of fiscal 2019; (vi) factors affecting margins, such as decreased land values underlying land option agreements, increased land development costs in communities under development or delays or difficulties in implementing initiatives to reduce our production and overhead cost structure; (vii) our ability to raise debt and/or equity capital, due to factors such as limitations in the capital markets (including market volatility) or adverse credit market conditions, and our ability to otherwise meet our ongoing liquidity needs (which could cause us to fail to meet the terms of our covenants and other requirements under our various debt instruments and therefore trigger an acceleration of a significant portion or all of our outstanding debt obligations), including the impact of any downgrades of our credit ratings or reduction in our liquidity levels; (viii) market perceptions regarding any capital raising initiatives we may undertake (including future issuances of equity or debt capital); (ix) terrorist acts, protests and civil unrest, political uncertainty, natural disasters, acts of war or other factors over which the Company has no control; (x) inaccurate estimates related to homes to be delivered in the future (backlog), as they are subject to various cancellation risks that cannot be fully controlled; (xi) increases in mortgage interest rates, increased disruption in the availability of mortgage financing, changes in tax laws or otherwise regarding the deductibility of mortgage interest expenses and real estate taxes or an increased number of foreclosures; (xii) increased competition or delays in reacting to changing consumer preferences in home design; (xiii) natural disasters or other related events that could result in delays in land development or home construction, increase our costs or decrease demand in the impacted areas; (xiv) the potential recoverability of our deferred tax assets; (xv) increases in corporate tax rates; (xvi) potential delays or increased costs in obtaining necessary permits as a result of changes to, or complying with, laws, regulations or governmental policies, and possible penalties for failure to comply with such laws, regulations or governmental policies, including those related to the environment; (xvii) the results of litigation or government proceedings and fulfillment of any related obligations; (xviii) the impact of construction defect and home warranty claims; (xix) the cost and availability of insurance and surety bonds, as well as the sufficiency of these instruments to cover potential losses incurred; (xx) the impact of information technology failures, cybersecurity issues or data security breaches; or (xxi) the impact on homebuilding in key markets of governmental regulations limiting the availability of water.

Any forward-looking statement, including any statement expressing confidence regarding future outcomes, speaks only as of the date on which such statement is made and, except as required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time-to-time, and it is not possible to predict all such factors.

-Tables Follow-

Reconciliation of homebuilding gross profit and the related gross margin before impairments and abandonments and interest amortized to cost of sales to homebuilding gross profit and gross margin, the most directly comparable GAAP measure, is provided for each period discussed below. Management believes that this information assists investors in comparing the operating characteristics of homebuilding activities by eliminating many of the differences in companies' respective level of impairments/abandonments and level of debt.

Reconciliation of Adjusted EBITDA to total company net income, the most directly comparable GAAP measure, is provided for each period discussed below. Management believes that Adjusted EBITDA assists investors in understanding and comparing the operating characteristics of homebuilding activities by eliminating many of the differences in companies' respective capitalization, tax position, and level of impairments. These EBITDA measures should not be considered alternatives to net income determined in accordance with GAAP as an indicator of operating performance.

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