Beazer Homes' Strong Performance in First Quarter 2025
Beazer Homes Reports First Quarter Fiscal 2025 Results
Beazer Homes USA, Inc. (NYSE: BZH) recently unveiled its impressive financial results for the three months ending December 31, 2024. The company faced challenges in new home sales but showcased resilience by achieving substantial growth in net new orders and closings, primarily driven by an increased community count.
Chairman and Chief Executive Officer Allan P. Merrill expressed optimism despite market headwinds, stating, "Our net new orders and closings increased year-over-year, supported by a 20% higher community count. Additionally, we expanded our total lot position by about 10% compared to last year through options, which gives us a strategic advantage moving forward." This proactive approach prepares Beazer for further growth in community counts in the coming years.
Reflecting on the full fiscal year, Merrill mentioned, "Despite near-term affordability challenges, we are confident in generating a double-digit return on capital employed this year while setting the stage for significant growth in future years." This confidence is reinforced by the company meeting its Multi-Year Goals, projecting a total of approximately 180 active communities by the end of FY 2025, with plans to reach 200 by the conclusion of FY 2026.
Merrill noted that the company’s financial health is evident in its reduction of net debt to net capitalization ratio, estimated to be in the mid-30% range at fiscal year-end, approaching the target of less than 30% by FY 2026. Furthermore, with 98% of home starts in Q1 being Zero Energy Ready, the goal is to achieve 100% compliance by December 2025, supporting their commitment to energy-efficient housing.
The first quarter of FY 2025 highlighted the following financial metrics compared to the previous fiscal year:
- Net income from continuing operations was $3.1 million, or $0.10 per diluted share, down from $21.7 million, or $0.70 per diluted share, in Q1 of FY 2024.
- Adjusted EBITDA stood at $23 million, reflecting a 39.4% decrease compared to the prior year.
- Homebuilding revenue reached $460.4 million, increasing by 20.9%, attributable to a 22.1% rise in home closings to 907 units.
- The average selling price (ASP) for homes decreased slightly by 1.0% to $507.6 thousand.
- Homebuilding gross margin was reported at 15.2%, a decline of 470 basis points year-over-year.
- Net new orders were 932, marking a 13.2% increase, while the active community count ended at 163, a 19.9% rise.
- Backlog dollar value totaled $816.0 million, down 12.5%, influenced by a 15.9% drop in backlog units to 1,507.
- Controlled lots increased by 9.5%, reaching 28,874.
- Unrestricted cash at quarter-end was $80.4 million, with total liquidity reported at $335.4 million.
- The total debt to total capitalization ratio remained unchanged at 46.5%. Meanwhile, the net debt to net capitalization ratio was 44.5% compared to 43.7% a year prior.
In addition to financial measures, Beazer Homes continues to focus on sustainability, aiming to meet the requirements of the U.S. Department of Energy’s Zero Energy Ready Home program, establishing itself at the forefront of energy-efficient construction.
Amid the competitive landscape, entering new markets and expanding product offerings remain part of Beazer's growth strategy.
For interested stakeholders, Beazer Homes will host a conference call to further discuss these results, inviting participants to engage actively in the discussion of the company's future vision.
About Beazer Homes
Beazer Homes, headquartered in Atlanta, is one of the largest homebuilders in the United States. With a commitment to delivering quality homes tailored to individual customer preferences, Beazer stands out in the marketplace by facilitating options for homebuyers to personalize their living spaces without added costs. The organization is dedicated to transparency in financing, allowing customers to compare various mortgage solutions, potentially saving thousands over the lifespan of their loans.
Frequently Asked Questions
What financial results did Beazer Homes report for Q1 2025?
Beazer Homes reported a net income of $3.1 million, with adjusted EBITDA of $23 million and homebuilding revenue of $460.4 million for Q1 2025.
How did Beazer's community count change from the previous year?
The active community count increased by 19.9% to 163 communities compared to the previous fiscal year.
What sustainability initiative does Beazer Homes have?
Beazer Homes aims for every new home to meet Zero Energy Ready standards by the end of December 2025, as part of their commitment to energy efficiency.
What was the change in backlog units for Beazer Homes?
The backlog units totaled 1,507, representing a decrease of 15.9% compared to the previous year.
When will Beazer Homes hold a conference call to discuss the results?
Beazer Homes will hold a conference call on January 30, 2025, at 5:00 p.m. ET to discuss the financial results and outlook.
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