Beazer Homes Usa, Inc. · NYSE:BZH
Beazer Homes Usa — Q4 2024 Earnings Presentation
32 slides from Beazer Homes Usa's earnings presentation, Nov 13, 2024
Slide 1: Q4 2024 Earnings Presentation
Beazer Homes USA, Inc. Q4 2024 Earnings Presentation Poppy Meadows Elk Grove, CA 1
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements about Beazer Homes USA, Inc. (“Beazer Homes”) that only speak as of this date. Beazer Homes disclaims any obligation to update these statements. These forward-looking statements represent our good-faith estimates, expec
Slide 3: Introduction
Introduction Allan P. Merrill David I. Goldberg Chairman & Chief Executive Officer Sr. Vice President & Chief Financial Officer 3
Slide 4: FY 2024 Highlights
FY 2024 Highlights Land Investment Growth Community Count Expansion Double-Digit Returns Zero Energy Ready Adoption Top TrustBuilder Rating Employer of Choice 4
Slide 5: Current Operating Environment
Current Operating Environment New & Existing Housing Inventory Units Monthly Mortgage Payment as a % of Income (in millions) 4.50 34% 32% 4.00 30% 3.50 28% 3.00 26% 24% 2.50 22% 2.00 20% 1.50 18% 16% 1.00 14% 0.50 12% - 10% Average Monthly Mortgage Pmt as % of Income (a) Data reflects new and existi
Slide 6: FY25 Outlook
FY25 Outlook Community Count Growth Macro Assessment Higher Mix Mortgage Rates Spec Sales / Growth In Average Communities Remain ~7% Closings +18 - 22 Communities Wage & Job Improved Sales Growth Pace Significant Revenue Growth Leading To Profitability & Double-Digit Return on Capital Employed 6
Slide 7: Multi-Year Goals
Multi-Year Goals > 200 Communities Fiscal Year-end 2026 < 30% Net Debt to Net Capitalization Fiscal Year-end 2026 100% Zero Energy Ready Starts Calendar Year-end 2025 7
Slide 8: Community Count Growth
Community Count Growth > 200 Active Communities FYE26 200 40 ~ 180 Active Active Community Count - Period-End 180 Communities FYE25 35 Total Lots Controlled (thousands) 160 162 30 145 140 25 134 123 120 20 117 100 15 18k 22k 25k 26k 29k 80 10 FYE20 FYE21 FYE22 FYE23 FYE24 FYE25 FYE26 Lots Controlled
Slide 9: Balance Sheet Improvement
Balance Sheet Improvement 60% 57.5% 52.7% 50% 45.0% 40% 40.0% 36.4% Mid-to-low 30’s by FYE25 30% De-lever through retained earnings and cash flow < 30% Net Debt / Net Cap 20% FYE20 FYE21 FYE22 FYE23 FYE24 FYE25 FYE26 Net Debt to Net Capitalization See “Non-GAAP Net Debt to Net Capitalization Reconci
Slide 10: Zero Energy Ready Starts
Zero Energy Ready Starts 100% ZER Starts 100% by CYE25 92% 90% 80% 70% 67% 60% Beazer is the only public builder to 50% commit 100% of starts to ZER 40% 30% 20% 20% 10% 3% 0% 1st Half 2nd Half 1st Half 2nd Half CYE25 FY23 FY24 10
Slide 11: Q4 and FY24 Results
Q3 Q4Results and FY24 Results Balanced Growth Results Q4 FY24 FY24 New Home Orders 1,029 4,221 Sales Pace 2.2 2.4 Community Count, Avg 153 144 Homebuilding Revenue ($mm) $783.8 $2,293.0 Closings 1,496 4,450 Average Selling Price ($k) $523.9 $515.3 HB Gross Margin %(a) 20.4% 21.1% SG&A as % of Total
Slide 12: 1st Quarter Expectations
1st Quarter Expectations Metric Expectations Active Community Count, Ending(a) Up ~20% Sales Pace(a) Up ~10% New Home Orders(a) Up ~30% Closings > 925 Average Sales Pace ~$515k Adjusted HB Gross Margin %(b) ~19.0% SG&A as % of Total Revenue ~13.0% Adjusted EBITDA ~$30MM Interest Amort. % of HB Reven
Slide 13: Outlook for Fiscal Year 2025
Outlook for Fiscal Year 2025 Community Count Growth Macro Assessment Ranges Low High Average Community Count +12.5% +15.0% Sales Pace ~2.50 ~3.00 Gross Margin ~19.5% ~20.5% Estimates ASP >$530k SG&A ~11% Significant Revenue Growth Leading to Profitability & Double-Digit Return on Capital Employed 13
Slide 14: Liquidity and Capitalization
Liquidity and Capitalization $ in millions $600 Net Debt / Net Cap(a) 40.0% Net Debt / Adj. EBITDA 3.4x Total liquidity of ~$504 million $500 $400 $300 $300 $39 $200 $357 $350 $250 $100 $204 $76 $- $0 Unrestricted Cash Restricted Cash - LC/Escrow Undrawn Revolver Senior Unsecured Debt Junior Debt -
Slide 15: Book Value Per Share Growth
Book Value Per Share Growth $50.00 $40.05 $40.00 $35.53 $30.53 $30.00 $23.48 $19.77 $20.00 $10.00 $- FY20 FY21 FY22 FY23 FY24 Homebuilding Assets DTA Quarterly diluted weighted-average shares outstanding at period-end used for all per share calculations Balances as of 9/30 used for all periods Homeb
Slide 16: Lot Position
Lot Position 60% 40 58% 57% 55% 47% Total Active Lots Controlled by Option 45% 30 27.9 25.6 Ending Active Lot Balance (thousands) 24.4 35% 21.4 30% 16.1 20 16.9 13.3 14.5 10.0 5.9 15% 10 11.0 11.4 11.1 11.1 11.8 0% - FYE20 FYE21 FYE22 FYE23 FYE24 Active Owned Lots (000s) Option Lots (000s) Option %
Slide 17: Wrap-Up
Wrap-Up FY24 Results • Invested For Our Future • Generated Double-Digit Returns • Accelerated Adoption of Zero Energy Ready FY25 Outlook • Growing Community Count • Significant Revenue Growth • Double-Digit Returns(a) Progress Towards Multi-Year Goals • > 200 Communities - FYE26 • < 30% Net Debt to
Slide 18: Appendix
AK BEAZER tomes Appendix
Slide 19: Zero Energy Ready Homes
Zero Energy Ready Homes A DOE Zero Energy Ready Home® is a high-performance home that is so energy efficient that a renewable energy system could offset most or all the home's annual energy use. Each DOE Zero Energy Ready Home meets rigorous efficiency and performance criteria. • Homeowner Benefits
Slide 20: SG&A Leverage
SG&A Leverage SG&A Per Closing SG&A Leverage LTM Homebuilding % of Total Revenue $ in thousands 14% $70 $61.0 $61.6 $62.1 11.9% $59.9 12% 11.4% 11.5% 11.4% $60 10.9% $50 10% $40 8% $30 6% 11.1% 11.0% 11.1% 9.7% 8.9% $20 4% $10 2% $- 0% Q1 Q2 Q3 Q4 Q4 Q4 Q4 Q4 Q4 FY24 FY20 FY21 FY22 FY23 FY24 SG&A Pe
Slide 21: Cancellation Rates
Cancellation Rates 35% 33% 30% 25% 22% 20% 16% 15% 15% 12% 13% 12% 11% 10% 10% 5% 5% 0% Q4 FY20 Q4 FY21 Q4 FY22 Q4 FY23 Q4 FY24 Cancellation Rate Cancellation Rate (% of Backlog)(a) (a) Cancellation Rate as a % of Backlog is calculated using the quarter's beginning backlog units 21
Slide 22: Specs per Community
Spec Homes 20 1,200 1,154 827 18 1,000 16 887 14 793 800 779 Specs per Community 12 Spec Homes 645 649 516 576 10 600 542 8 7 7 400 6 6 5 4 327 4 200 2 133 94 134 - 34 - Q4 FY20 Q4 FY21 Q4 FY22 Q4 FY23 Q4 FY24 Completed Under Construction Per Community Note: Spec count as of each quarter end include
Slide 23: Segment ASP & Margins
Segment ASP & Margins ($ in thousands) Q4 FY23 Q4 FY24 Change in Change in Q4 FY23 Q4 FY24 Change in ASP ASP ASP ($) ASP (%) Closings Closings Mix West $522.2 $517.9 ($4.3) (0.8%) 56.2% 65.0% 8.8% East $545.4 $544.0 ($1.4) (0.3%) 24.5% 22.0% (2.5%) Southeast $483.9 $519.8 $35.9 7.4% 19.3% 13.0% (6.3
Slide 24: Q4 Results
Q4 Results $ in millions (except ASP) Q4 FY23 Q4 FY24 ∆(d) Profitability Total Revenue $ 645.4 $ 806.2 24.9% Adjusted EBITDA (a) $ 90.0 $ 93.1 $3.2 Net Income - Cont. Ops. $ 55.8 $ 52.1 ($3.7) Unit Activity New Home Orders 1,003 1,029 2.6% Closings 1,233 1,496 21.3% Average Selling Price ($k) $ 520.
Slide 25: FY24 Results
FY24 Results $ in millions (except ASP) FY23 FY24 ∆(d) Profitability Total Revenue $ 2,206.8 $ 2,330.2 5.6% Adjusted EBITDA (a) $ 272.0 $ 243.4 ($28.6) Net Income - Cont. Ops. $ 158.7 $ 140.2 ($18.5) Unit Activity New Home Orders 3,866 4,221 9.2% Closings 4,246 4,450 4.8% Average Selling Price ($k)
Slide 26: Backlog Detail
Backlog Detail Q4 FY23 Q4 FY24 Quarter Ending Backlog (units) 1,711 1,482 Quarter Ending Backlog ($ in millions) $ 886.4 $ 797.2 ASP in Backlog ($ in thousands) $ 518.0 $ 537.9 Quarter Beg. Backlog 1,941 1,949 Scheduled to Close in Future Qtrs. (902) (706) Backlog Scheduled to Close in the Qtr. 1,03
Slide 27: Non-GAAP Homebuilding Gross Margin Reconciliation
Non-GAAP Homebuilding Gross Margin Reconciliation Three Months Ended September 30, 2024 HB Gross HB Gross HB Gross Profit HB Gross Margin Impairments & Profit Margin Interest excluding excluding HB Gross HB Gross Abandonments excluding excluding Amortized to I&A and I&A and ($ in thousands) Profit M
Slide 28: Non-GAAP Homebuilding Gross Margin Reconciliation
Non-GAAP Homebuilding Gross Margin Reconciliation Fiscal Year Ended September 30, 2024 HB Gross HB Gross HB Gross Profit HB Gross Margin Impairments & Profit Margin Interest excluding excluding HB Gross HB Gross Abandonments excluding excluding Amortized to I&A and I&A and ($ in thousands) Profit Ma
Slide 29: Non-GAAP Adjusted EBITDA Reconciliation
Non-GAAP Adjusted EBITDA Reconciliation Three Months Ended September 30, Fiscal Year Ended September 30, (in thousands) 2023 2024 24 v 23 2023 2024 24 v 23 Net income (GAAP) $ 55,756 $ 52,066 $ (3,690) $ 158,611 $ 140,175 $ (18,436) Expense from income taxes 8,470 8,537 67 23,936 18,910 (5,026) Inte
Slide 30: Non-GAAP Net Debt to Net Capitalization Reconciliation
Non-GAAP Net Debt to Net Capitalization Reconciliation Fiscal Year Ended September 30, ($ in thousands) 2023 2024 Total debt (GAAP) $ 978,028 $ 1,025,349 Stockholders' equity (GAAP) 1,102,819 1,232,111 Total capitalization (GAAP) $ 2,080,847 $ 2,257,460 Total debt to total capitalization ratio (GAAP
Slide 31: Beazer Tax Benefits
Beazer Tax Benefits FY25 - FY26 FY27 - FY33(a) Building industry-leading, energy efficient homes provides tax benefits: Energy Prior tax code – $2K Home Efficiency Current tax code (Energy Star) – $2.5K SFD Credits Current tax code (DOE Zero Energy Ready) – $5K SFD > 14% & < 17% < 17% GAAP Taxes (Cu
Slide 32: Deferred Tax Assets - Summary
Deferred Tax Assets - Summary ($ in millions) September 30, 2023 September 30, 2024 Deferred Tax Assets $ 169.8 $ 161.4 Valuation Allowance $ (30.4) $ (27.6) Deferred Tax Liabilities $ (5.4) $ (5.3) Net Deferred Tax Assets $ 134.0 $ 128.5 As of September 30, 2024, our conclusions on whether we are m