BZH: Management Discusses Q4/FY09 Results and Modestly Improved Outlook

Beazer Homes USA, Inc. (BZH) announced its financial results on Monday for the fourth quarter and year ended September 30, 2009.

Total fourth quarter revenue was $376.3 million, compared to $649.8 million in the fourth quarter of the prior year. Income from continuing operations of $35.3 million, or $0.87 per diluted share, compared to a loss of $(11.77) per share in the fourth quarter of the prior year.

Total revenue in fiscal 2009 was $1.01 billion, compared to $1.81 billion in the prior year. The loss from continuing operations for fiscal 2009 was $(178.0) million, or $(4.60) per share, versus a loss of $(20.77) per

share in fiscal 2008.

Ian McCarthy, President and CEO of Beazer Homes, commented in a conference call today, "Following difficult market conditions throughout 2009, we finished Q4 with a year-over-year increase in net new home orders, improved gross margins and a significant cash balance. During Q4, we experienced some moderation in negative market trends, with attractive interest rates, historically high housing affordability and the federal tax credit attracting more prospective buyers to purchase a new home. Nonetheless, elevated unemployment and rising foreclosure activity make it difficult to predict when and to what extent the housing market will sustainably recover. We will maintain a disciplined operating approach, focused on gradually improving profitability and protecting our liquidity."

He added, "Our belief that market conditions will modestly improve in 2010 doesn't necessitate the need to begin securing additional land positions in certain markets. We continue to concentrate on specific buyer profiles within each sub-market that we operate."

Mr. McCarthy noted, "While we may not achieve positive year-over-year comparisons for each quarter of 2010, we do expect full year orders to modestly increase compared to 2009."

Allan Merrill, CFO of Beazer Homes, explained, "We remain disciplined in new home starts and speculative inventory. As of September 30, 2009, we had only 270 unsold finished homes and 417 unsold homes under construction, representing declines of 34% and 27% respectively from last year.

He concluded, "We expect to generate a smaller, but still material, loss from continuing operations in FY10. Absent the impact of any recapitalization transaction, but reflecting our cautiously optimistic outlook, our current expectation is that we will only use a modest amount of cash during FY10. However, whether we ultimately use cash or generate cash in FY10, will be a function of many market conditions that are very difficult to predict. We believe that we have plenty of liquidity to operate our business this year in the range of scenarios that we can see."

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