Beazer Homes Usa, Inc. · NYSE:BZH
Beazer Homes Usa — Q4 2023 Earnings Presentation
32 slides from Beazer Homes Usa's earnings presentation, 2023
Slide 1: Q4 2023 Earnings Presentation
Beazer Homes USA, Inc. Q4 2023 Earnings Presentation Artavia Conroe, TX © Beazer Homes – Confidential and Proprietary – Distribution Prohibited 1
Slide 2: Forward Looking Statements
Forward Looking Statements 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 statemen
Slide 3: Introduction
Introduction Allan P. Merrill David I. Goldberg Chairman & Chief Executive Officer Sr. Vice President & Chief Financial Officer © Beazer Homes – Confidential and Proprietary – Distribution Prohibited 3
Slide 4: Fiscal 2023 Highlights
Fiscal 2023 Highlights Financial Highlights Operational Highlights Net Income >$150MM Land Investment ~$600MM Reduced Cycle Positioned for Times Future Growth Leverage(a) ~36% Stockholders’ Equity >$1B Grew Energy Sustained Employee Efficiency Engagement (a) Leverage refers to net debt to net capita
Slide 5: 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 © Beazer Homes – Confidential and Proprietary – Distribution Prohibited 5
Slide 6: Growth From More Communities
Growth From More Communities 220 35 > 200 Active Communities 33 200 31 Double-digit 180 annual community Total Lots Controlled (thousands) Active Community Count - Period-End 29 count growth 166 27 160 145 25 140 134 23 123 120 117 21 19 100 17 20k 18k 22k 25k 26k 80 15 FYE19 FYE20 FYE21 FYE22 FYE23
Slide 7: Balance Sheet Improvement
Balance Sheet Improvement 70% 66.5% 60% 57.5% 52.7% 50% 45.0% 40% 36.4% 30% < 30% Net Debt / Net Cap 20% FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 Period-end Net Debt to Net Capitalization Data labels reflect fiscal year-end net debt to net capitalization percentages See “Non-GAAP © Beazer Net Debt Ho
Slide 8: Zero Energy Ready Starts
Zero Energy Ready Starts 100% 100% by CYE25 90% 80% ZER Starts as % of Total Period Starts 70% 60% 50% 40% 28% 30% 20% Beazer is the only public builder 11% to commit 100% of starts to ZER 10% 4% 2% 0% © Beazer Homes – Confidential and Proprietary – Distribution Prohibited 8
Slide 9: Affordability Remains a Challenge
Affordability Remains a Challenge Monthly Mortgage Payment as a % of Income Our Three 35% Differentiators 30% 25% 20% 15% 10% Monthly Mortgage Payment as a % of Income (a) (a) Monthly median new residential sales price of homes sold in United States published by the U.S. Census / Department of Housi
Slide 10: Growth Expected in Fiscal 2024
Growth Expected in Fiscal 2024 Community Count Closings Revenue Profitability Book Value © Beazer Homes – Confidential and Proprietary – Distribution Prohibited 10
Slide 11: Fiscal 2023 Results
Fiscal 2023 Results Results FY23 YoY Change New Home Orders 3,866 (4.8%) Sales Pace 2.6 (8.4%) Community Count, Avg 125 3.9% Community Count, Period End 134 8.9% Closings 4,246 (10.7%) Adjusted Homebuilding Revenue ($MM) $2,198.4 (4.5%) Average Selling Price ($K) $517.8 7.0% Adjusted HB Gross Margin
Slide 12: FY23 Cycle Time & Cost Reduction
FY23 Cycle Time & Cost Reduction Cycle Time Improvement Construction Cost Reduction Cycle Time Projections Actual FY19 350 300 250 200 22% 24% 150 GM% GM% 100 50 182 288 309 323 274 211 0 FY19 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 *Reflects sales to close cycle times of pre-sale closings excluding
Slide 13: 1st Quarter Expectations
1st Quarter Expectations Metric Expectations New Orders (a) Up >30% Community Count, Ending (a) Up ~10% Backlog Conversion >45% Average Selling Price ~$510K HB Gross Margin % (b) >23% SG&A Absolute Dollars (a) Up ~$2MM Adjusted EBITDA ~$40MM Interest Amort. % of HB Revenue Low 3’s Effective Tax Rate
Slide 14: Fiscal 2024 Expectations
Fiscal 2024 Expectations Metric Expectations Land Spend >$700MM Community Count Double Digit Growth YoY Backlog Conversion Up YoY Average Sales Price ~$500k HB Revenue Up YoY HB Gross Margin % (a) 22% - 23% Effective Tax Rate 15% - 20% Return on Equity Double Digit (a) Excludes impairments, abandonm
Slide 15: Book Value Per Share Growth
Book Value Per Share Growth $40.00 $35.87 $35.00 $30.50 $30.00 $25.00 $23.82 $19.81 $20.00 $17.60 $15.00 $10.00 $5.00 $- FY19 FY20 FY21 FY22 FY23 Homebuilding Assets DTA Book Value Weighted-average shares outstanding at period-end used for all per share calculations Balances as of 9/30 used for all
Slide 16: Maturity Schedule
Maturity Schedule $700 Net Debt / Net Cap (a) 36.4% $ in millions Net Debt / Adj. EBITDA 2.3x $600 Total liquidity of ~$610 million $265 $500 $400 $41 $300 $200 $346 $357 $350 $100 $202 $74 $- Unrestricted Cash Restricted Cash - LC/Escrow Undrawn Revolver Senior Unsecured Debt Junior Debt - Net of A
Slide 17: Wrap-Up
Wrap-Up Strong FY23 results Growth Expected in FY24 • Community Count • Revenue • Profitability & Book Value Commitment to Multi-Year Goals • > 200 Communities ~ FYE26 • < 30% Net Debt to Net Capitalization ~ FYE26 • 100% Zero Energy Ready Starts ~ CYE25 © Beazer Homes – Confidential and Proprietary
Slide 18: Appendix
Appendix © Beazer Homes – Confidential and Proprietary – Distribution Prohibited 18
Slide 19: Managing SG&A is a Priority
Managing SG&A is a Priority SG&A Per Closing SG&A Leverage LTM Homebuilding $59.6 % of Total Revenue $60 $55.3 $55.3 $55.2 14% $53.4 $52.9 $50.0 11.9% $50 12% 11.4% 11.5% $46.7 10.9% 10% $40 8% $30 6% 11.1% 11.0% 11.1% $20 8.9% 4% $10 2% $- 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q4 Q4 Q4 Q4 FY22 FY23 FY20 FY21
Slide 20: Land Spend
Land Spend $ in millions $250 $213.7 $200 $65.0 $159.5 $150.8 $150 $130.7 $132.6 $41.6 $131.6 $41.2 $114.7 $113.0 $32.9 $39.4 $47.8 $100 $31.5 $44.5 $148.7 $117.9 $109.7 $50 $97.7 $93.2 $83.2 $83.8 $68.5 $- Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY22 FY23 Land Land Development $’s in millions Note: Totals may not
Slide 21: Historical Cancellation Rates
Historical Cancellation Rates 35% 33% 30% 25% 24% 22% 20% 21% 20% 16% 16% 15% 15% 14% 14% 13% 13% 12%13% 12% 11% 10% 10% 5% 5% 0% (a) Q4 FY15 Q4 FY16 Q4 FY17 Q4 FY18 Q4 FY19 Q4 FY20 Q4 FY21 Q4 FY22 Q4 FY23 Cancellation Rate Cancellation Rate (% of Backlog) (a) Cancellation Rate as a % of Backlog is
Slide 22: Specs per Community
Spec Homes 1,000 18 887 900 864 16 793 626 779 800 14 645 700 649 12 Specs per Community 600 516 576 Spec Homes 542 10 500 7 8 400 6 5 5 6 300 4 4 200 100 2 238 133 34 94 134 - - Q4 FY19 Q4 FY20 Q4 FY21 Q4 FY22 Q4 FY23 Completed Under Construction Per Community Note: Spec count as of each quarter en
Slide 23: Geographic Mix Impacts ASP & Margins
Geographic Mix Impacts ASP & Margins ($ in thousands) FY22 ASP FY23 ASP Change in Change in FY22 FY23 Change in ASP ($) ASP (%) Closings Closings Mix West $468.7 $523.5 $54.8 11.7% 59.6% 58.8% (0.8%) East $514.4 $532.2 $17.8 3.5% 22.7% 22.9% 0.2% Southeast $497.2 $484.2 $(13.0) (2.6)% 17.7% 18.3% 0.
Slide 24: Q4 Results
Q4 Results $ in millions (except ASP) Q4 FY22 Q4 FY23 ∆(d) Profitability Total Revenue $ 827.7 $ 645.4 (22.0%) Net Income - Cont. Ops. $ 86.8 $ 55.8 $ (31.1) Adjusted EBITDA (a) $ 143.3 $ 90.0 $ (53.4) Unit Activity New Home Orders 704 1,003 42.5% Closings 1,616 1,233 (23.7%) Average Selling Price (
Slide 25: FY23 Results
FY23 Results $ in millions (except ASP) FY22 FY23 ∆(d) Profitability Total Revenue $ 2,317.0 $ 2,206.8 (4.8%) Adjusted EBITDA (a) $ 370.1 $ 272.0 $ (98.1) Net Income - Cont. Ops. $ 220.7 $ 158.7 $ (62.0) Unit Activity New Home Orders 4,061 3,866 (4.8%) Closings 4,756 4,246 (10.7%) Average Selling Pr
Slide 26: Backlog Detail
Backlog Detail Q4 FY22 Q4 FY23 Quarter Ending Backlog (units) 2,091 1,711 Quarter Ending Backlog ($ in millions) $ 1,144.9 $ 886.4 ASP in Backlog ($ in thousands) $ 547.5 $ 518.0 Quarter Beg. Backlog 3,003 1,941 Scheduled to Close in Future Qtrs. (1,239) (902) Backlog Scheduled to Close in the Qtr.
Slide 27: Non-GAAP Homebuilding Gross Margin Reconciliation
Non-GAAP Homebuilding Gross Margin Reconciliation Three Months Ended September 30, 2023 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, 2023 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 (a) In periods during which we impaired certain of our inventory assets, capitalized interest that is impaired is included in the line above titled "Interest amortized to home construction and land sales expenses and capitalized interest impaired." © Beazer Ho
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 2022 Total debt $ 978,028 $ 983,440 Stockholders' equity 1,102,819 939,286 Total capitalization $ 2,080,847 $ 1,922,726 Total debt to total capitalization ratio 47.0 % 51.1 % Total debt $ 978,0
Slide 31: Beazer Tax Benefits
Beazer Tax Benefits FY23 FY24 - FY25 FY26 - 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 Current tax code (DOE Zero Energy Ready) – $5K SFD Credits < 15% > 15% & < 20% < 17% GA
Slide 32: Deferred Tax Assets - Summary
Deferred Tax Assets - Summary As of September 30, 2023, our conclusions on whether we are more likely than not to realize all of our federal tax attributes and certain portions of our state tax attributes remain consistent with our fiscal 2022 conclusion. Valuation allowance of $30.4 million as of S