Top Energy Efficient Builder Delivers Record Q1 Closings in Earnings Report
Beazer Homes announced its financial results for the three months ending Dec.31, 2024.
“Despite a challenging new home sales environment, we had a productive first quarter and made progress toward our full year and Multi-Year Goals,” said Allan P. Merrill, the Company’s Chairman and Chief Executive Officer. “Net new orders and closings increased year-over-year, supported by a 20% higher community count. We also grew our total lot position by about 10% versus the prior year, primarily through options, positioning us for further community count growth in the years ahead.”
“Despite the affordability challenges of the near-term environment, we remain confident in our ability to generate a double-digit return on capital employed this year – even as we position the Company for substantial growth in the years ahead, Merrill said, looking to the full fiscal year.
Merrill also spoke to the Company’s three Multi-Year Goals and longer-term outlook, “Our community count growth, deleveraging and Zero Energy Ready goals are all within sight. We expect to end fiscal year 2025 with approximately 180 active communities, with control of the land necessary to reach 200 active communities by the end of fiscal year 2026. Our net debt to net capitalization ratio should be in the mid-30% range at fiscal year-end, approaching our target of less than 30% by the end of fiscal year 2026. Finally, with 98% of our home starts in the first quarter being built to Zero Energy Ready standards and only four communities remaining with legacy product, we expect 100% of our starts will be Zero Energy Ready by December 2025. With our experienced operating team, growing lot position, healthy balance sheet, and industry-leading energy efficient homes, we are well-positioned to drive sustainable value for our shareholders in the years ahead.”
According to Beazer Homes, Some details on the Company’s performance during the fiscal first quarter 2025 include:
Profitability. Net income from continuing operations was $3.1 million, generating diluted earnings per share of $0.10. First quarter adjusted EBITDA of $23.0 million was down $15.0 million, or 39.4%, primarily due to lower operating margin, partially offset by higher revenue on higher closings.
Orders. Net new orders for the first quarter increased to 932, up 13.2% from 823 in the prior year quarter, primarily driven by a 17.8% increase in average community count to 161 from 137 a year ago, partially offset by a 3.8% decrease in sales pace to 1.9 orders per community per month, down from 2.0 in the prior year quarter. The cancellation rate for the quarter was 16.5%, down from 19.0% in the prior year quarter.
Backlog. The dollar value of homes in backlog as of December 31, 2024 was $816.0 million, representing 1,507 homes, compared to $932.8 million, representing 1,791 homes, at the same time last year. The ASP of homes in backlog was $541.5 thousand, up 4.0% versus the prior year quarter. The increase in backlog ASP was primarily due to changes in product and community mix and price appreciation in certain communities.
