x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
DELAWARE
|
|
58-2086934
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
Class
|
|
Outstanding as of January 30, 2019
|
Common Stock, $0.001 par value
|
|
32,136,987
|
|
|
|
|
in thousands (except share and per share data)
|
December 31,
2018 |
|
September 30,
2018 |
||||
ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
84,399
|
|
|
$
|
139,805
|
|
Restricted cash
|
12,637
|
|
|
13,443
|
|
||
Accounts receivable (net of allowance of $378 and $378, respectively)
|
19,349
|
|
|
24,647
|
|
||
Owned inventory
|
1,722,120
|
|
|
1,692,284
|
|
||
Investments in unconsolidated entities
|
3,650
|
|
|
4,035
|
|
||
Deferred tax assets, net
|
218,025
|
|
|
213,955
|
|
||
Property and equipment, net
|
24,408
|
|
|
20,843
|
|
||
Goodwill
|
10,605
|
|
|
9,751
|
|
||
Other assets
|
8,197
|
|
|
9,339
|
|
||
Total assets
|
$
|
2,103,390
|
|
|
$
|
2,128,102
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Trade accounts payable
|
$
|
99,864
|
|
|
$
|
126,432
|
|
Other liabilities
|
112,633
|
|
|
126,389
|
|
||
Total debt (net of premium of $2,447 and $2,640, respectively, and debt issuance costs of $13,651 and $14,336, respectively)
|
1,255,784
|
|
|
1,231,254
|
|
||
Total liabilities
|
1,468,281
|
|
|
1,484,075
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock (par value $.01 per share, 5,000,000 shares authorized, no shares issued)
|
—
|
|
|
—
|
|
||
Common stock (par value $0.001 per share, 63,000,000 shares authorized, 32,674,596 issued and outstanding and 33,522,046 issued and outstanding, respectively)
|
33
|
|
|
34
|
|
||
Paid-in capital
|
863,797
|
|
|
880,025
|
|
||
Accumulated deficit
|
(228,721
|
)
|
|
(236,032
|
)
|
||
Total stockholders’ equity
|
635,109
|
|
|
644,027
|
|
||
Total liabilities and stockholders’ equity
|
$
|
2,103,390
|
|
|
$
|
2,128,102
|
|
|
Three Months Ended
|
||||||
|
December 31,
|
||||||
in thousands (except per share data)
|
2018
|
|
2017
|
||||
Total revenue
|
$
|
402,040
|
|
|
$
|
372,489
|
|
Home construction and land sales expenses
|
340,378
|
|
|
311,660
|
|
||
Inventory impairments and abandonments
|
1,007
|
|
|
—
|
|
||
Gross profit
|
60,655
|
|
|
60,829
|
|
||
Commissions
|
15,737
|
|
|
14,356
|
|
||
General and administrative expenses
|
38,642
|
|
|
37,285
|
|
||
Depreciation and amortization
|
2,770
|
|
|
2,507
|
|
||
Operating income
|
3,506
|
|
|
6,681
|
|
||
Equity in loss of unconsolidated entities
|
(64
|
)
|
|
(101
|
)
|
||
Loss on extinguishment of debt
|
—
|
|
|
(25,904
|
)
|
||
Other expense, net
|
(42
|
)
|
|
(3,145
|
)
|
||
Income (loss) from continuing operations before income taxes
|
3,400
|
|
|
(22,469
|
)
|
||
(Benefit) expense from income taxes
|
(3,922
|
)
|
|
108,106
|
|
||
Income (loss) from continuing operations
|
7,322
|
|
|
(130,575
|
)
|
||
Loss from discontinued operations, net of tax
|
(11
|
)
|
|
(372
|
)
|
||
Net income (loss)
|
$
|
7,311
|
|
|
$
|
(130,947
|
)
|
Weighted average number of shares:
|
|
|
|
||||
Basic
|
31,801
|
|
|
32,055
|
|
||
Diluted
|
32,055
|
|
|
32,055
|
|
||
Basic and diluted earnings (loss) per share:
|
|
|
|
||||
Continuing operations
|
$
|
0.23
|
|
|
$
|
(4.07
|
)
|
Discontinued operations
|
—
|
|
|
(0.01
|
)
|
||
Total
|
$
|
0.23
|
|
|
$
|
(4.08
|
)
|
|
Three Months Ended
|
||||||
|
December 31,
|
||||||
in thousands
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
7,311
|
|
|
$
|
(130,947
|
)
|
Adjustments to reconcile net income (loss) to net cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization
|
2,770
|
|
|
2,507
|
|
||
Stock-based compensation expense
|
2,114
|
|
|
2,610
|
|
||
Inventory impairments and abandonments
|
1,007
|
|
|
450
|
|
||
Deferred and other income tax (benefit) expense
|
(4,070
|
)
|
|
107,795
|
|
||
Gain on sale of fixed assets
|
(35
|
)
|
|
(65
|
)
|
||
Change in allowance for doubtful accounts
|
—
|
|
|
(1
|
)
|
||
Equity in loss of unconsolidated entities
|
65
|
|
|
88
|
|
||
Cash distributions of income from unconsolidated entities
|
320
|
|
|
50
|
|
||
Non-cash loss on extinguishment of debt
|
—
|
|
|
3,173
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Decrease in accounts receivable
|
5,298
|
|
|
4,520
|
|
||
Increase in inventory
|
(29,722
|
)
|
|
(83,205
|
)
|
||
Decrease in other assets
|
1,430
|
|
|
1,252
|
|
||
Decrease in trade accounts payable
|
(26,568
|
)
|
|
(5,949
|
)
|
||
Decrease in other liabilities
|
(14,610
|
)
|
|
(4,502
|
)
|
||
Net cash used in operating activities
|
(54,690
|
)
|
|
(102,224
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(6,354
|
)
|
|
(3,702
|
)
|
||
Proceeds from sale of fixed assets
|
54
|
|
|
84
|
|
||
Investments in unconsolidated entities
|
—
|
|
|
(421
|
)
|
||
Net cash used in investing activities
|
(6,300
|
)
|
|
(4,039
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Repayment of debt
|
(1,479
|
)
|
|
(401,481
|
)
|
||
Proceeds from issuance of new debt
|
—
|
|
|
400,000
|
|
||
Repayment of borrowings from credit facility
|
(75,000
|
)
|
|
—
|
|
||
Borrowings from credit facility
|
100,000
|
|
|
—
|
|
||
Debt issuance costs
|
(400
|
)
|
|
(5,649
|
)
|
||
Repurchase of common stock
|
(16,500
|
)
|
|
—
|
|
||
Tax payments for stock-based compensation awards
|
(1,850
|
)
|
|
(1,322
|
)
|
||
Other financing activities
|
7
|
|
|
—
|
|
||
Net cash provided by (used in) financing activities
|
4,778
|
|
|
(8,452
|
)
|
||
Decrease in cash, cash equivalents, and restricted cash
|
(56,212
|
)
|
|
(114,715
|
)
|
||
Cash, cash equivalents, and restricted cash at beginning of period
|
153,248
|
|
|
304,609
|
|
||
Cash, cash equivalents, and restricted cash at end of period
|
$
|
97,036
|
|
|
$
|
189,894
|
|
•
|
Identify the contract(s) with a customer
|
•
|
Identify the performance obligations
|
•
|
Determine the transaction price
|
•
|
Allocate the transaction price
|
•
|
Recognize revenue when the performance obligations are met
|
|
Three Months Ended
|
||||||
|
December 31,
|
||||||
in thousands
|
2018
|
|
2017
|
||||
Homebuilding revenue
|
$
|
400,982
|
|
|
$
|
367,754
|
|
Land sales and other revenue
|
1,058
|
|
|
4,735
|
|
||
Total revenue
(a)
|
$
|
402,040
|
|
|
$
|
372,489
|
|
|
Three Months Ended
|
||||||
|
December 31,
|
||||||
in thousands
|
2018
|
|
2017
|
||||
Supplemental disclosure of cash activity:
|
|
|
|
||||
Interest payments
|
$
|
13,986
|
|
|
$
|
10,766
|
|
Income tax payments
|
121
|
|
|
—
|
|
||
Tax refunds received
|
1,148
|
|
|
39
|
|
||
Reconciliation of cash, cash equivalents, and restricted cash:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
84,399
|
|
|
$
|
177,812
|
|
Restricted cash
|
12,637
|
|
|
12,082
|
|
||
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows
|
$
|
97,036
|
|
|
$
|
189,894
|
|
in thousands
|
December 31, 2018
|
|
September 30, 2018
|
||||
Beazer's investment in unconsolidated entities
|
$
|
3,650
|
|
|
$
|
4,035
|
|
Total equity of unconsolidated entities
|
8,578
|
|
|
10,113
|
|
||
Total outstanding borrowings of unconsolidated entities
|
11,867
|
|
|
12,266
|
|
|
Three Months Ended
|
||||||
|
December 31,
|
||||||
in thousands
|
2018
|
|
2017
|
||||
Equity in loss of unconsolidated entities
|
$
|
(64
|
)
|
|
$
|
(101
|
)
|
in thousands
|
December 31, 2018
|
|
September 30, 2018
|
||||
Homes under construction
|
$
|
478,539
|
|
|
$
|
476,752
|
|
Development projects in progress
|
925,728
|
|
|
907,793
|
|
||
Land held for future development
|
83,177
|
|
|
83,173
|
|
||
Land held for sale
|
6,997
|
|
|
7,781
|
|
||
Capitalized interest
|
151,886
|
|
|
144,645
|
|
||
Model homes
|
75,793
|
|
|
72,140
|
|
||
Total owned inventory
|
$
|
1,722,120
|
|
|
$
|
1,692,284
|
|
in thousands
|
Projects in
Progress
(a)
|
|
Land Held for Future Development
|
|
Land Held
for Sale
|
|
Total Owned
Inventory
|
||||||||
December 31, 2018
|
|
|
|
|
|
|
|
||||||||
West Segment
|
$
|
785,702
|
|
|
$
|
58,129
|
|
|
$
|
—
|
|
|
$
|
843,831
|
|
East Segment
|
277,300
|
|
|
14,077
|
|
|
3,906
|
|
|
295,283
|
|
||||
Southeast Segment
|
357,172
|
|
|
10,971
|
|
|
3,091
|
|
|
371,234
|
|
||||
Corporate and unallocated
(b)
|
211,772
|
|
|
—
|
|
|
—
|
|
|
211,772
|
|
||||
Total
|
$
|
1,631,946
|
|
|
$
|
83,177
|
|
|
$
|
6,997
|
|
|
$
|
1,722,120
|
|
September 30, 2018
|
|
|
|
|
|
|
|
||||||||
West Segment
|
$
|
763,453
|
|
|
$
|
58,125
|
|
|
$
|
—
|
|
|
$
|
821,578
|
|
East Segment
|
280,761
|
|
|
14,077
|
|
|
4,580
|
|
|
299,418
|
|
||||
Southeast Segment
|
358,126
|
|
|
10,971
|
|
|
3,177
|
|
|
372,274
|
|
||||
Corporate and unallocated
(b)
|
198,990
|
|
|
—
|
|
|
24
|
|
|
199,014
|
|
||||
Total
|
$
|
1,601,330
|
|
|
$
|
83,173
|
|
|
$
|
7,781
|
|
|
$
|
1,692,284
|
|
$ in thousands
|
|
|
Undiscounted Cash Flow Analyses Prepared
|
|||||||||
Segment
(a)
|
# of
Communities on Watch List (b) |
|
# of
Communities (c) |
|
Pre-analysis
Book Value (BV) |
|
Aggregate
Undiscounted Cash Flow as a % of BV (d) |
|||||
Quarter Ended December 31, 2018
|
|
|
|
|
|
|
|
|||||
West
|
3
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
%
|
Southeast
|
1
|
|
|
1
|
|
|
2,225
|
|
|
71.3
|
%
|
|
Corporate and unallocated
(e)
|
—
|
|
|
—
|
|
|
387
|
|
|
N/A
(f)
|
|
|
Total
|
4
|
|
|
1
|
|
|
$
|
2,612
|
|
|
|
$ in thousands
|
Results of Discounted Cash Flow Analyses Prepared
|
||||||||||||
Segment
|
# of
Communities Impaired |
|
# of Lots
Impaired |
|
Impairment
Charge |
|
Estimated Fair
Value of Impaired Inventory at time of Impairment |
||||||
Quarter Ended December 31, 2018
|
|
|
|
|
|
|
|
||||||
Southeast
|
1
|
|
|
15
|
|
|
$
|
858
|
|
|
$
|
1,367
|
|
Corporate and unallocated
(a)
|
—
|
|
|
—
|
|
|
149
|
|
|
238
|
|
||
Total
|
1
|
|
|
15
|
|
|
$
|
1,007
|
|
|
$
|
1,605
|
|
$ in thousands
|
Three Months Ended
|
||
Unobservable Inputs
|
December 31, 2018
|
||
Average selling price
|
$
|
412
|
|
Closings per community per month
|
1 - 2
|
|
|
Discount rate
|
16.8
|
%
|
|
Three Months Ended December 31,
|
||||||
in thousands
|
2018
|
|
2017
|
||||
Projects in Progress:
|
|
|
|
||||
Southeast
|
$
|
858
|
|
|
$
|
—
|
|
Corporate and unallocated
(a)
|
149
|
|
|
—
|
|
||
Total impairment charges on projects in progress
|
$
|
1,007
|
|
|
$
|
—
|
|
Discontinued Operations:
|
|
|
|
||||
Land Held for Sale
|
—
|
|
|
450
|
|
||
Total impairment and abandonment charges
|
$
|
1,007
|
|
|
$
|
450
|
|
in thousands
|
Deposits &
Non-refundable
Pre-acquisition
Costs Incurred
|
|
Remaining
Obligation
|
||||
As of December 31, 2018
|
|
|
|
||||
Unconsolidated lot option agreements
|
$
|
71,644
|
|
|
$
|
367,026
|
|
As of September 30, 2018
|
|
|
|
||||
Unconsolidated lot option agreements
|
$
|
72,191
|
|
|
$
|
383,150
|
|
|
Three Months Ended December 31,
|
||||||
in thousands
|
2018
|
|
2017
|
||||
Capitalized interest in inventory, beginning of period
|
$
|
144,645
|
|
|
$
|
139,203
|
|
Interest incurred
|
24,921
|
|
|
25,555
|
|
||
Capitalized interest impaired
|
(115
|
)
|
|
—
|
|
||
Interest expense not qualified for capitalization and included as other expense
(a)
|
(242
|
)
|
|
(3,435
|
)
|
||
Capitalized interest amortized to home construction and land sales expenses
(b)
|
(17,323
|
)
|
|
(16,476
|
)
|
||
Capitalized interest in inventory, end of period
|
$
|
151,886
|
|
|
$
|
144,847
|
|
in thousands
|
Maturity Date
|
|
December 31, 2018
|
|
September 30, 2018
|
||||
8 3/4% Senior Notes
|
March 2022
|
|
$
|
500,000
|
|
|
$
|
500,000
|
|
7 1/4% Senior Notes
|
February 2023
|
|
24,834
|
|
|
24,834
|
|
||
6 3/4% Senior Notes
|
March 2025
|
|
250,000
|
|
|
250,000
|
|
||
5 7/8% Senior Notes
|
October 2027
|
|
400,000
|
|
|
400,000
|
|
||
Unamortized debt premium, net
|
|
|
2,447
|
|
|
2,640
|
|
||
Unamortized debt issuance costs
|
|
|
(13,651
|
)
|
|
(14,336
|
)
|
||
Total Senior Notes, net
|
|
|
1,163,630
|
|
|
1,163,138
|
|
||
Junior Subordinated Notes (net of unamortized accretion of $36,253 and $36,770, respectively)
|
July 2036
|
|
64,520
|
|
|
64,003
|
|
||
Revolving Credit Facility
|
February 2021
|
|
25,000
|
|
|
—
|
|
||
Other Secured Notes payable
|
Various Dates
|
|
2,634
|
|
|
4,113
|
|
||
Total debt, net
|
|
|
$
|
1,255,784
|
|
|
$
|
1,231,254
|
|
Senior Note Description
|
|
Issuance Date
|
|
Maturity Date
|
|
Redemption Terms
|
8 3/4% Senior Notes
|
|
September 2016
|
|
March 2022
|
|
Callable at any time prior to March 15, 2019, in whole or in part, at a redemption price equal to 100.000% of the principal amount, plus a customary make-whole premium; on or after March 15, 2019, callable at a redemption price equal to 104.375% of the principal amount; on or after March 15, 2020, callable at a redemption price equal to 102.188% of the principal amount; on or after March 15, 2021, callable at a redemption price equal to 100.000% of the principal amount plus, in each case, accrued and unpaid interest
|
7 1/4% Senior Notes
|
|
February 2013
|
|
February 2023
|
|
Callable at any time on or after February 1, 2018, callable at a redemption price equal to 103.625% of the principal amount; on or after February 1, 2019, callable at a redemption price equal to 102.417% of the principal amount; on or after February 1, 2020, callable at a redemption price equal to 101.208% of the principal amount; on or after February 1, 2021, callable at 100.000% of the principal amount plus, in each case, accrued and unpaid interest
|
6 3/4% Senior Notes
|
|
March 2017
|
|
March 2025
|
|
Callable at any time prior to March 15, 2020, in whole or in part, at a redemption price equal to 100.000% of the principal amount, plus a customary make-whole premium; on or after March 15, 2020, callable at a redemption price equal to 105.063% of the principal amount; on or after March 15, 2021, callable at a redemption price equal to 103.375% of the principal amount; on or after March 15, 2022, callable at a redemption price equal to 101.688% of the principal amount; on or after March 15, 2023, callable at a redemption price equal to 100.000% of the principal amount, plus, in each case, accrued and unpaid interest
|
5 7/8% Senior Notes
|
|
October 2017
|
|
October 2027
|
|
Callable at any time prior to October 15, 2022, in whole or in part, at a redemption price equal to 100.000% of the principal amount, plus a customary make-whole premium; on or after October 15, 2022, callable at a redemption price equal to 102.938% of the principal amount; on or after October 15, 2023, callable at a redemption price equal to 101.958% of the principal amount; on or after October 15, 2024, callable at a redemption price equal to 100.979% of the principal amount; on or after October 15, 2025, callable at a redemption price equal to 100.000% of the principal amount, plus, in each case, accrued and unpaid interest
|
|
Three Months Ended
|
||||||
|
December 31,
|
||||||
in thousands
|
2018
|
|
2017
|
||||
Balance at beginning of period
|
$
|
15,331
|
|
|
$
|
18,091
|
|
Accruals for warranties issued
(a)
|
2,305
|
|
|
4,212
|
|
||
Changes in liability related to warranties existing in prior periods
|
(1,874
|
)
|
|
(2,296
|
)
|
||
Payments made
|
(2,330
|
)
|
|
(4,191
|
)
|
||
Balance at end of period
|
$
|
13,432
|
|
|
$
|
15,816
|
|
•
|
Level 1 – Quoted prices in active markets for identical assets or liabilities;
|
•
|
Level 2 – Inputs other than quoted prices included in Level 1 that are observable either directly or indirectly through corroboration with market data; and
|
•
|
Level 3 – Unobservable inputs that reflect our own estimates about the assumptions market participants would use in pricing the asset or liability.
|
in thousands
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
As of December 31, 2018
|
|
|
|
|
|
|
|
||||||||
Deferred compensation plan assets
(a)
|
$
|
—
|
|
|
$
|
1,760
|
|
|
$
|
—
|
|
|
$
|
1,760
|
|
Development projects in progress
(b)
|
—
|
|
|
—
|
|
|
1,605
|
|
|
1,605
|
|
||||
As of September 30, 2018
|
|
|
|
|
|
|
|
||||||||
Deferred compensation plan assets
(a)
|
$
|
—
|
|
|
$
|
1,578
|
|
|
$
|
—
|
|
|
$
|
1,578
|
|
Development projects in progress
(b)
|
—
|
|
|
—
|
|
|
1,312
|
|
|
1,312
|
|
||||
Land held for sale
(b)
|
—
|
|
|
—
|
|
|
1,724
|
|
|
1,724
|
|
||||
Unconsolidated entity investments
(b)
|
—
|
|
|
—
|
|
|
80
|
|
|
80
|
|
|
As of December 31, 2018
|
|
As of September 30, 2018
|
||||||||||||
in thousands
|
Carrying
Amount (a) |
|
Fair Value
|
|
Carrying
Amount (a) |
|
Fair Value
|
||||||||
Senior Notes
(b)
|
$
|
1,163,630
|
|
|
$
|
1,048,346
|
|
|
$
|
1,163,138
|
|
|
$
|
1,096,214
|
|
Junior Subordinated Notes
|
64,520
|
|
|
64,520
|
|
|
64,003
|
|
|
64,003
|
|
||||
Total
|
$
|
1,228,150
|
|
|
$
|
1,112,866
|
|
|
$
|
1,227,141
|
|
|
$
|
1,160,217
|
|
|
Three Months Ended
|
|||||
|
December 31, 2018
|
|||||
|
Shares
|
|
Weighted Average
Exercise Price |
|||
Outstanding at beginning of period
|
533,052
|
|
|
$
|
14.26
|
|
Granted
|
25,230
|
|
|
10.38
|
|
|
Exercised
|
(1,000
|
)
|
|
7.56
|
|
|
Cancelled
|
(1,319
|
)
|
|
11.53
|
|
|
Outstanding at end of period
|
555,963
|
|
|
$
|
14.10
|
|
Exercisable at end of period
|
504,092
|
|
|
$
|
14.13
|
|
Vested or expected to vest in the future
|
552,799
|
|
|
$
|
14.13
|
|
|
Three Months Ended December 31, 2018
|
|||||||
|
Performance-Based Restricted Shares
|
|
Time-Based Restricted Shares
|
|
Total Restricted Shares
|
|||
Beginning of period
|
644,785
|
|
|
431,783
|
|
|
1,076,568
|
|
Granted
(a)
|
467,819
|
|
|
441,991
|
|
|
909,810
|
|
Vested
(a)
|
(309,843
|
)
|
|
(196,246
|
)
|
|
(506,089
|
)
|
Forfeited
|
(7,020
|
)
|
|
(21,329
|
)
|
|
(28,349
|
)
|
End of period
|
795,741
|
|
|
656,199
|
|
|
1,451,940
|
|
|
Three Months Ended December 31,
|
||||||
in thousands, except per share data
|
2018
|
|
2017
|
||||
Numerator:
|
|
|
|
||||
Income (loss) from continuing operations
|
$
|
7,322
|
|
|
$
|
(130,575
|
)
|
Loss from discontinued operations, net of tax
|
(11
|
)
|
|
(372
|
)
|
||
Net income (loss)
|
$
|
7,311
|
|
|
$
|
(130,947
|
)
|
|
|
|
|
||||
Denominator:
|
|
|
|
||||
Basic weighted-average shares
|
31,801
|
|
|
32,055
|
|
||
Dilutive effect of restricted stock awards
|
243
|
|
|
—
|
|
||
Dilutive effect of stock options
|
11
|
|
|
—
|
|
||
Diluted weighted-average shares
(a)
|
32,055
|
|
|
32,055
|
|
||
|
|
|
|
||||
Basic and diluted income (loss) per share:
|
|
|
|
||||
Continuing operations
|
$
|
0.23
|
|
|
$
|
(4.07
|
)
|
Discontinued operations
|
—
|
|
|
(0.01
|
)
|
||
Total
|
$
|
0.23
|
|
|
$
|
(4.08
|
)
|
|
Three Months Ended December 31,
|
||||
in thousands
|
2018
|
|
2017
|
||
Stock options
|
493
|
|
|
556
|
|
Time-based restricted stock
|
195
|
|
|
828
|
|
Performance-based restricted stock
|
—
|
|
|
628
|
|
in thousands
|
December 31, 2018
|
|
September 30, 2018
|
||||
Accrued interest
|
$
|
24,217
|
|
|
$
|
14,401
|
|
Accrued bonus and deferred compensation
|
20,236
|
|
|
41,508
|
|
||
Customer deposits
|
13,462
|
|
|
14,903
|
|
||
Accrued warranty expense
|
13,432
|
|
|
15,331
|
|
||
Litigation accrual
|
3,348
|
|
|
3,656
|
|
||
Income tax liabilities
|
856
|
|
|
710
|
|
||
Other
|
37,082
|
|
|
35,880
|
|
||
Total
|
$
|
112,633
|
|
|
$
|
126,389
|
|
|
Three Months Ended
|
||||||
|
December 31,
|
||||||
in thousands
|
2018
|
|
2017
|
||||
Operating income
(a)
|
|
|
|
||||
West
|
$
|
24,261
|
|
|
$
|
21,110
|
|
East
|
5,395
|
|
|
7,396
|
|
||
Southeast
|
1,380
|
|
|
6,910
|
|
||
Segment total
|
31,036
|
|
|
35,416
|
|
||
Corporate and unallocated
(b)
|
(27,530
|
)
|
|
(28,735
|
)
|
||
Total operating income
|
$
|
3,506
|
|
|
$
|
6,681
|
|
|
Three Months Ended
|
||||||
|
December 31,
|
||||||
in thousands
|
2018
|
|
2017
|
||||
Depreciation and amortization
|
|
|
|
||||
West
|
$
|
1,278
|
|
|
$
|
1,256
|
|
East
|
538
|
|
|
439
|
|
||
Southeast
|
610
|
|
|
579
|
|
||
Segment total
|
2,426
|
|
|
2,274
|
|
||
Corporate and unallocated
(b)
|
344
|
|
|
233
|
|
||
Total depreciation and amortization
|
$
|
2,770
|
|
|
$
|
2,507
|
|
|
Three Months Ended
|
||||||
|
December 31,
|
||||||
in thousands
|
2018
|
|
2017
|
||||
Capital Expenditures
|
|
|
|
||||
West
|
$
|
2,651
|
|
|
$
|
1,776
|
|
East
|
762
|
|
|
595
|
|
||
Southeast
|
859
|
|
|
743
|
|
||
Corporate and unallocated
|
2,082
|
|
|
588
|
|
||
Total capital expenditures
|
$
|
6,354
|
|
|
$
|
3,702
|
|
in thousands
|
December 31, 2018
|
|
September 30, 2018
|
||||
Assets
|
|
|
|
||||
West
|
$
|
855,823
|
|
|
$
|
835,230
|
|
East
|
305,232
|
|
|
335,474
|
|
||
Southeast
|
390,934
|
|
|
414,685
|
|
||
Corporate and unallocated
(a)
|
551,401
|
|
|
542,713
|
|
||
Total assets
|
$
|
2,103,390
|
|
|
$
|
2,128,102
|
|
in thousands
|
Beazer Homes
USA, Inc. |
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Consolidating
Adjustments |
|
Consolidated
Beazer Homes USA, Inc. |
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
82,115
|
|
|
$
|
2,267
|
|
|
$
|
17
|
|
|
$
|
—
|
|
|
$
|
84,399
|
|
Restricted cash
|
11,897
|
|
|
740
|
|
|
—
|
|
|
—
|
|
|
12,637
|
|
|||||
Accounts receivable (net of allowance of $378)
|
—
|
|
|
19,349
|
|
|
—
|
|
|
—
|
|
|
19,349
|
|
|||||
Owned inventory
|
—
|
|
|
1,722,120
|
|
|
—
|
|
|
—
|
|
|
1,722,120
|
|
|||||
Investments in unconsolidated entities
|
773
|
|
|
2,877
|
|
|
—
|
|
|
—
|
|
|
3,650
|
|
|||||
Deferred tax assets, net
|
218,025
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
218,025
|
|
|||||
Property and equipment, net
|
—
|
|
|
24,408
|
|
|
—
|
|
|
—
|
|
|
24,408
|
|
|||||
Investments in subsidiaries
|
636,800
|
|
|
—
|
|
|
—
|
|
|
(636,800
|
)
|
|
—
|
|
|||||
Intercompany
|
963,614
|
|
|
(6,858
|
)
|
|
1,686
|
|
|
(958,442
|
)
|
|
—
|
|
|||||
Goodwill
|
—
|
|
|
10,605
|
|
|
—
|
|
|
—
|
|
|
10,605
|
|
|||||
Other assets
|
982
|
|
|
7,215
|
|
|
—
|
|
|
—
|
|
|
8,197
|
|
|||||
Total assets
|
$
|
1,914,206
|
|
|
$
|
1,782,723
|
|
|
$
|
1,703
|
|
|
$
|
(1,595,242
|
)
|
|
$
|
2,103,390
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Trade accounts payable
|
$
|
—
|
|
|
$
|
99,864
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
99,864
|
|
Other liabilities
|
24,261
|
|
|
88,359
|
|
|
13
|
|
|
—
|
|
|
112,633
|
|
|||||
Intercompany
|
1,686
|
|
|
956,756
|
|
|
—
|
|
|
(958,442
|
)
|
|
—
|
|
|||||
Total debt (net of premium and debt issuance costs)
|
1,253,150
|
|
|
2,634
|
|
|
—
|
|
|
—
|
|
|
1,255,784
|
|
|||||
Total liabilities
|
1,279,097
|
|
|
1,147,613
|
|
|
13
|
|
|
(958,442
|
)
|
|
1,468,281
|
|
|||||
Stockholders’ equity
|
635,109
|
|
|
635,110
|
|
|
1,690
|
|
|
(636,800
|
)
|
|
635,109
|
|
|||||
Total liabilities and stockholders’ equity
|
$
|
1,914,206
|
|
|
$
|
1,782,723
|
|
|
$
|
1,703
|
|
|
$
|
(1,595,242
|
)
|
|
$
|
2,103,390
|
|
in thousands
|
Beazer Homes
USA, Inc. |
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Consolidating
Adjustments |
|
Consolidated
Beazer Homes USA, Inc. |
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
93,875
|
|
|
$
|
45,355
|
|
|
$
|
575
|
|
|
$
|
—
|
|
|
$
|
139,805
|
|
Restricted cash
|
10,921
|
|
|
2,522
|
|
|
—
|
|
|
—
|
|
|
13,443
|
|
|||||
Accounts receivable (net of allowance of $378)
|
—
|
|
|
24,647
|
|
|
—
|
|
|
—
|
|
|
24,647
|
|
|||||
Owned inventory
|
—
|
|
|
1,692,284
|
|
|
—
|
|
|
—
|
|
|
1,692,284
|
|
|||||
Investments in unconsolidated entities
|
773
|
|
|
3,262
|
|
|
—
|
|
|
—
|
|
|
4,035
|
|
|||||
Deferred tax assets, net
|
213,955
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
213,955
|
|
|||||
Property and equipment, net
|
—
|
|
|
20,843
|
|
|
—
|
|
|
—
|
|
|
20,843
|
|
|||||
Investments in subsidiaries
|
645,086
|
|
|
—
|
|
|
—
|
|
|
(645,086
|
)
|
|
—
|
|
|||||
Intercompany
|
922,525
|
|
|
—
|
|
|
2,304
|
|
|
(924,829
|
)
|
|
—
|
|
|||||
Goodwill
|
—
|
|
|
9,751
|
|
|
—
|
|
|
—
|
|
|
9,751
|
|
|||||
Other assets
|
694
|
|
|
8,626
|
|
|
19
|
|
|
—
|
|
|
9,339
|
|
|||||
Total assets
|
$
|
1,887,829
|
|
|
$
|
1,807,290
|
|
|
$
|
2,898
|
|
|
$
|
(1,569,915
|
)
|
|
$
|
2,128,102
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Trade accounts payable
|
$
|
—
|
|
|
$
|
126,432
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
126,432
|
|
Other liabilities
|
14,357
|
|
|
111,906
|
|
|
126
|
|
|
—
|
|
|
126,389
|
|
|||||
Intercompany
|
2,304
|
|
|
922,525
|
|
|
—
|
|
|
(924,829
|
)
|
|
—
|
|
|||||
Total debt (net of premium and debt issuance costs)
|
1,227,141
|
|
|
4,113
|
|
|
—
|
|
|
—
|
|
|
1,231,254
|
|
|||||
Total liabilities
|
1,243,802
|
|
|
1,164,976
|
|
|
126
|
|
|
(924,829
|
)
|
|
1,484,075
|
|
|||||
Stockholders’ equity
|
644,027
|
|
|
642,314
|
|
|
2,772
|
|
|
(645,086
|
)
|
|
644,027
|
|
|||||
Total liabilities and stockholders’ equity
|
$
|
1,887,829
|
|
|
$
|
1,807,290
|
|
|
$
|
2,898
|
|
|
$
|
(1,569,915
|
)
|
|
$
|
2,128,102
|
|
in thousands
|
Beazer Homes
USA, Inc. |
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Consolidating
Adjustments |
|
Consolidated
Beazer Homes USA, Inc. |
||||||||||
Three Months Ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenue
|
$
|
—
|
|
|
$
|
402,040
|
|
|
$
|
115
|
|
|
$
|
(115
|
)
|
|
$
|
402,040
|
|
Home construction and land sales expenses
|
17,323
|
|
|
323,170
|
|
|
—
|
|
|
(115
|
)
|
|
340,378
|
|
|||||
Inventory impairments and abandonments
|
115
|
|
|
892
|
|
|
—
|
|
|
—
|
|
|
1,007
|
|
|||||
Gross (loss) profit
|
(17,438
|
)
|
|
77,978
|
|
|
115
|
|
|
—
|
|
|
60,655
|
|
|||||
Commissions
|
—
|
|
|
15,737
|
|
|
—
|
|
|
—
|
|
|
15,737
|
|
|||||
General and administrative expenses
|
—
|
|
|
38,646
|
|
|
(4
|
)
|
|
—
|
|
|
38,642
|
|
|||||
Depreciation and amortization
|
—
|
|
|
2,770
|
|
|
—
|
|
|
—
|
|
|
2,770
|
|
|||||
Operating (loss) income
|
(17,438
|
)
|
|
20,825
|
|
|
119
|
|
|
—
|
|
|
3,506
|
|
|||||
Equity in loss of unconsolidated entities
|
—
|
|
|
(64
|
)
|
|
—
|
|
|
—
|
|
|
(64
|
)
|
|||||
Other (expense) income, net
|
(242
|
)
|
|
204
|
|
|
(4
|
)
|
|
—
|
|
|
(42
|
)
|
|||||
(Loss) income from continuing operations before income taxes
|
(17,680
|
)
|
|
20,965
|
|
|
115
|
|
|
—
|
|
|
3,400
|
|
|||||
Expense (benefit) from income taxes
|
20,385
|
|
|
(24,336
|
)
|
|
29
|
|
|
—
|
|
|
(3,922
|
)
|
|||||
Equity in income of subsidiaries
|
45,387
|
|
|
—
|
|
|
—
|
|
|
(45,387
|
)
|
|
—
|
|
|||||
Income from continuing operations
|
7,322
|
|
|
45,301
|
|
|
86
|
|
|
(45,387
|
)
|
|
7,322
|
|
|||||
Loss from discontinued operations, net of tax
|
—
|
|
|
(7
|
)
|
|
(4
|
)
|
|
—
|
|
|
(11
|
)
|
|||||
Equity in loss of subsidiaries from discontinued operations
|
(11
|
)
|
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|||||
Net income
|
$
|
7,311
|
|
|
$
|
45,294
|
|
|
$
|
82
|
|
|
$
|
(45,376
|
)
|
|
$
|
7,311
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
in thousands
|
Beazer Homes
USA, Inc. |
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Consolidating
Adjustments |
|
Consolidated
Beazer Homes USA, Inc. |
||||||||||
Three Months Ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenue
|
$
|
—
|
|
|
$
|
372,489
|
|
|
$
|
14
|
|
|
$
|
(14
|
)
|
|
$
|
372,489
|
|
Home construction and land sales expenses
|
16,468
|
|
|
295,206
|
|
|
—
|
|
|
(14
|
)
|
|
311,660
|
|
|||||
Gross (loss) profit
|
(16,468
|
)
|
|
77,283
|
|
|
14
|
|
|
—
|
|
|
60,829
|
|
|||||
Commissions
|
—
|
|
|
14,356
|
|
|
—
|
|
|
—
|
|
|
14,356
|
|
|||||
General and administrative expenses
|
—
|
|
|
37,244
|
|
|
41
|
|
|
—
|
|
|
37,285
|
|
|||||
Depreciation and amortization
|
—
|
|
|
2,507
|
|
|
—
|
|
|
—
|
|
|
2,507
|
|
|||||
Operating (loss) income
|
(16,468
|
)
|
|
23,176
|
|
|
(27
|
)
|
|
—
|
|
|
6,681
|
|
|||||
Equity in loss of unconsolidated entities
|
—
|
|
|
(101
|
)
|
|
—
|
|
|
—
|
|
|
(101
|
)
|
|||||
Loss on extinguishment of debt
|
(25,904
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,904
|
)
|
|||||
Other (expense) income, net
|
(3,435
|
)
|
|
296
|
|
|
(6
|
)
|
|
—
|
|
|
(3,145
|
)
|
|||||
(Loss) income from continuing operations before income taxes
|
(45,807
|
)
|
|
23,371
|
|
|
(33
|
)
|
|
—
|
|
|
(22,469
|
)
|
|||||
(Benefit) expense from income taxes
|
(12,185
|
)
|
|
120,303
|
|
|
(12
|
)
|
|
—
|
|
|
108,106
|
|
|||||
Equity in loss of subsidiaries
|
(96,953
|
)
|
|
—
|
|
|
—
|
|
|
96,953
|
|
|
—
|
|
|||||
Loss from continuing operations
|
(130,575
|
)
|
|
(96,932
|
)
|
|
(21
|
)
|
|
96,953
|
|
|
(130,575
|
)
|
|||||
Loss from discontinued operations
|
—
|
|
|
(369
|
)
|
|
(3
|
)
|
|
—
|
|
|
(372
|
)
|
|||||
Equity in loss of subsidiaries from discontinued operations
|
(372
|
)
|
|
—
|
|
|
—
|
|
|
372
|
|
|
—
|
|
|||||
Net loss
|
$
|
(130,947
|
)
|
|
$
|
(97,301
|
)
|
|
$
|
(24
|
)
|
|
$
|
97,325
|
|
|
$
|
(130,947
|
)
|
|
|
|
|
|
|
|
|
|
|
in thousands
|
Beazer Homes
USA, Inc. |
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Consolidating
Adjustments |
|
Consolidated
Beazer Homes USA, Inc. |
||||||||||
Three Months Ended December 31, 2018
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash used in operating activities
|
$
|
(31,908
|
)
|
|
$
|
(22,756
|
)
|
|
$
|
(26
|
)
|
|
$
|
—
|
|
|
$
|
(54,690
|
)
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
—
|
|
|
(6,354
|
)
|
|
—
|
|
|
—
|
|
|
(6,354
|
)
|
|||||
Proceeds from sale of fixed assets
|
—
|
|
|
54
|
|
|
—
|
|
|
—
|
|
|
54
|
|
|||||
Return of capital from unconsolidated entities
|
532
|
|
|
—
|
|
|
(532
|
)
|
|
—
|
|
|
—
|
|
|||||
Advances to/from subsidiaries
|
21,204
|
|
|
—
|
|
|
—
|
|
|
(21,204
|
)
|
|
—
|
|
|||||
Net cash provided by (used in) investing activities
|
21,736
|
|
|
(6,300
|
)
|
|
(532
|
)
|
|
(21,204
|
)
|
|
(6,300
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Repayment of debt
|
(11
|
)
|
|
(1,468
|
)
|
|
—
|
|
|
—
|
|
|
(1,479
|
)
|
|||||
Repayment of borrowings from credit facility
|
(75,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(75,000
|
)
|
|||||
Borrowings from credit facility
|
100,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
100,000
|
|
|||||
Debt issuance costs
|
(400
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(400
|
)
|
|||||
Repurchase of common stock
|
(16,500
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,500
|
)
|
|||||
Tax payments for stock-based compensation awards
|
(1,850
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,850
|
)
|
|||||
Advances to/from subsidiaries
|
—
|
|
|
(21,204
|
)
|
|
—
|
|
|
21,204
|
|
|
—
|
|
|||||
Other financing activities
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|||||
Net cash provided by (used in) financing activities
|
6,246
|
|
|
(22,672
|
)
|
|
—
|
|
|
21,204
|
|
|
4,778
|
|
|||||
Decrease in cash, cash equivalents, and restricted cash
|
(3,926
|
)
|
|
(51,728
|
)
|
|
(558
|
)
|
|
—
|
|
|
(56,212
|
)
|
|||||
Cash, cash equivalents, and restricted cash at beginning of period
|
104,796
|
|
|
47,877
|
|
|
575
|
|
|
—
|
|
|
153,248
|
|
|||||
Cash, cash equivalents, and restricted cash at end of period
|
$
|
100,870
|
|
|
$
|
(3,851
|
)
|
|
$
|
17
|
|
|
$
|
—
|
|
|
$
|
97,036
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
in thousands
|
Beazer Homes
USA, Inc. |
|
Guarantor
Subsidiaries |
|
Non-Guarantor
Subsidiaries |
|
Consolidating
Adjustments |
|
Consolidated
Beazer Homes USA, Inc. |
||||||||||
Three Months Ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
91,465
|
|
|
$
|
(193,721
|
)
|
|
$
|
32
|
|
|
$
|
—
|
|
|
$
|
(102,224
|
)
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
—
|
|
|
(3,702
|
)
|
|
—
|
|
|
—
|
|
|
(3,702
|
)
|
|||||
Proceeds from sale of fixed assets
|
—
|
|
|
84
|
|
|
—
|
|
|
—
|
|
|
84
|
|
|||||
Investments in unconsolidated entities
|
—
|
|
|
(421
|
)
|
|
—
|
|
|
—
|
|
|
(421
|
)
|
|||||
Advances to/from subsidiaries
|
(187,451
|
)
|
|
—
|
|
|
(26
|
)
|
|
187,477
|
|
|
—
|
|
|||||
Net cash used in investing activities
|
(187,451
|
)
|
|
(4,039
|
)
|
|
(26
|
)
|
|
187,477
|
|
|
(4,039
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Repayment of debt
|
(400,012
|
)
|
|
(1,469
|
)
|
|
—
|
|
|
—
|
|
|
(401,481
|
)
|
|||||
Proceeds from issuance of new debt
|
400,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
400,000
|
|
|||||
Debt issuance costs
|
(5,649
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,649
|
)
|
|||||
Tax payments for stock-based compensation awards
|
(1,322
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,322
|
)
|
|||||
Advances to/from subsidiaries
|
—
|
|
|
186,563
|
|
|
—
|
|
|
(186,563
|
)
|
|
—
|
|
|||||
Other financing activities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net cash (used in) provided by financing activities
|
(6,983
|
)
|
|
185,094
|
|
|
—
|
|
|
(186,563
|
)
|
|
(8,452
|
)
|
|||||
(Decrease) increase in cash, cash equivalents, and restricted cash
|
(102,969
|
)
|
|
(12,666
|
)
|
|
6
|
|
|
914
|
|
|
(114,715
|
)
|
|||||
Cash, cash equivalents, and restricted cash at beginning of period
|
294,192
|
|
|
16,854
|
|
|
724
|
|
|
(7,161
|
)
|
|
304,609
|
|
|||||
Cash, cash equivalents, and restricted cash at end of period
|
$
|
191,223
|
|
|
$
|
4,188
|
|
|
$
|
730
|
|
|
$
|
(6,247
|
)
|
|
$
|
189,894
|
|
|
Three Months Ended
|
||||||
|
December 31,
|
||||||
in thousands
|
2018
|
|
2017
|
||||
Total revenue
|
$
|
55
|
|
|
$
|
625
|
|
Home construction and land sales expenses
|
33
|
|
|
667
|
|
||
Inventory impairments and lot option abandonments
|
—
|
|
|
450
|
|
||
Gross profit (loss)
|
22
|
|
|
(492
|
)
|
||
General and administrative expenses
|
33
|
|
|
16
|
|
||
Operating loss
|
(11
|
)
|
|
(508
|
)
|
||
Equity in (loss) income of unconsolidated entities
|
(1
|
)
|
|
12
|
|
||
Other expense, net
|
(1
|
)
|
|
(3
|
)
|
||
Loss from discontinued operations before income taxes
|
(13
|
)
|
|
(499
|
)
|
||
Benefit from income taxes
|
(2
|
)
|
|
(127
|
)
|
||
Loss from discontinued operations, net of tax
|
$
|
(11
|
)
|
|
$
|
(372
|
)
|
•
|
Income tax benefit from continuing operations was $3.9 million for the first fiscal quarter of 2019 primarily due to the recognition of $5.3 million of income tax credits. Income tax expense from continuing operations was $108.1 million for the prior year quarter due to a $108.0 million income tax charge primarily stemming from the remeasurement of our deferred tax assets as a result of the enactment of the Tax Cut and Jobs Act in December 2017. Refer to Note 10 of the notes to the condensed consolidated financial statements for additional discussion of these matters.
|
•
|
We recognized $25.9 million in loss on extinguishment of debt in the first fiscal quarter of 2018 compared to no such loss in the current quarter.
|
•
|
Sales per community per month was
2.0
and
2.4
for the quarters ended
December 31, 2018
and
December 31, 2017
, respectively.
The dollar value of our backlog decreased due to a decline in backlog units. Sales per community per month decreased to
2.9
for the trailing 12 months ended
December 31, 2018
versus
3.0
a year ago. We believe that we are among the industry leaders in sales absorption rates, and we are focused on maintaining a competitive sales pace going forward.
|
•
|
Our ASP for homes closed during the quarter ended
December 31, 2018
was
$370.3 thousand
, up
7.3%
compared to the prior year quarter.
ASP for closings during the trailing 12 months ended
December 31, 2018
was
$364.9 thousand
, up
6.0%
year-over-year, and our ASP in backlog as of
December 31, 2018
has risen
4.9%
versus the prior year quarter to
$388.9 thousand
.
|
•
|
During the quarter ended December 31, 2018, we had an average active community count of
160
, up
3.0%
from the prior year quarter. We ended the current quarter with
162
active communities.
We invested
$121.0 million
in land and land development during the current quarter compared to
$141.7 million
in the prior year quarter. We expect our spending on land and land development activities to lead to growth in community count going forward. We continually evaluate strategic opportunities to purchase land within our geographic footprint, balancing our desire to reduce leverage with land acquisition strategies that maximize the efficiency of capital employed.
|
•
|
Homebuilding gross margin excluding impairments and abandonments and interest for the quarter ended
December 31, 2018
was
19.7%
, down from
20.9%
in the prior year quarter.
For the trailing 12 months ended
December 31, 2018
, this adjusted gross margin was
21.0%
. In some of our markets, we have experienced cost pressures in land, labor, and materials driven by a variety of factors including the location and structure of our land deals, the availability of materials and labor, and shifts in community mix, including an increasing number of closings from recently activated assets formerly classified as land held for future development which generally have lower margins. We continue to take action to mitigate these cost pressures through our efforts to reduce construction costs, improve cycle time, and raise home prices where possible.
|
•
|
SG&A for the quarter ended
December 31, 2018
was
13.5%
of total revenue compared to
13.9%
in the prior year quarter.
SG&A for the trailing 12 months ended
December 31, 2018
was
11.8%
of total revenue, a
decrease
of
40
basis points from the trailing 12 months ended December 31, 2017. The decrease in SG&A as a percentage of total revenue was due to our continued focus on improving overhead cost management in relation to our revenue growth.
|
•
|
Capital efficiency, debt reduction, and share repurchases.
We continue to employ a number of strategies to improve capital efficiency, including use of option contracts, acquisition of shorter duration land parcels, and activation of previously land held for future development communities. In addition, our Board of Directors approved a share repurchase program that authorizes us to repurchase up to $50.0 million of our outstanding common stock. As part of this program, we completed an accelerated share repurchase of $16.5 million of our common stock in December, and we repurchased an additional
$6.4 million
of our common stock subsequent to quarter end. As previously announced, we intend to repurchase or redeem a similar amount of debt to our share repurchases by the end of the current fiscal year, consistent with our ongoing objective of reducing debt and cash interest expense (see the notes to our condensed consolidated financial statements in this Form 10-Q for further discussion of our share repurchases and outstanding borrowings). We may change our allocation of capital, including the level of debt and share repurchases and inventory investment, in response to and in consideration of market and business conditions, strategic opportunities, compliance with our debt agreements, and other factors.
|
|
Three Months Ended
|
||||||
|
December 31,
|
||||||
$ in thousands
|
2018
|
|
2017
|
||||
Revenue:
|
|
|
|
||||
Homebuilding
|
$
|
400,982
|
|
|
$
|
367,754
|
|
Land sales and other
|
1,058
|
|
|
4,735
|
|
||
Total
|
$
|
402,040
|
|
|
$
|
372,489
|
|
Gross profit:
|
|
|
|
||||
Homebuilding
|
$
|
60,619
|
|
|
$
|
60,232
|
|
Land sales and other
|
36
|
|
|
597
|
|
||
Total
|
$
|
60,655
|
|
|
$
|
60,829
|
|
Gross margin:
|
|
|
|
||||
Homebuilding
|
15.1
|
%
|
|
16.4
|
%
|
||
Land sales and other
|
3.4
|
%
|
|
12.6
|
%
|
||
Total
|
15.1
|
%
|
|
16.3
|
%
|
||
Commissions
|
$
|
15,737
|
|
|
$
|
14,356
|
|
General and administrative expenses (G&A)
|
$
|
38,642
|
|
|
$
|
37,285
|
|
SG&A (commissions plus G&A) as a percentage of total revenue
|
13.5
|
%
|
|
13.9
|
%
|
||
G&A as a percentage of total revenue
|
9.6
|
%
|
|
10.0
|
%
|
||
Depreciation and amortization
|
$
|
2,770
|
|
|
$
|
2,507
|
|
Operating income
|
$
|
3,506
|
|
|
$
|
6,681
|
|
Operating income as a percentage of total revenue
|
0.9
|
%
|
|
1.8
|
%
|
||
Effective tax rate
(a)
|
(115.4
|
)%
|
|
(481.1
|
)%
|
||
Equity in income of unconsolidated entities
|
$
|
(64
|
)
|
|
$
|
(101
|
)
|
Loss on extinguishment of debt
|
$
|
—
|
|
|
$
|
25,904
|
|
|
Three Months Ended December 31,
|
|
LTM Ended December 31,
(a)
|
||||||||||||||||||||
in thousands
|
2018
|
|
2017
|
|
18 vs 17
|
|
2018
|
|
2017
|
|
18 vs 17
|
||||||||||||
Net income (loss)
|
$
|
7,311
|
|
|
$
|
(130,947
|
)
|
|
$
|
138,258
|
|
|
$
|
92,883
|
|
|
$
|
(97,705
|
)
|
|
$
|
190,588
|
|
(Benefit) expense from income taxes
|
(3,924
|
)
|
|
107,979
|
|
|
(111,903
|
)
|
|
(17,530
|
)
|
|
113,179
|
|
|
(130,709
|
)
|
||||||
Interest amortized to home construction and land sales expenses and capitalized interest impaired
|
17,438
|
|
|
16,476
|
|
|
962
|
|
|
92,293
|
|
|
89,652
|
|
|
2,641
|
|
||||||
Interest expense not qualified for capitalization
|
242
|
|
|
3,435
|
|
|
(3,193
|
)
|
|
2,132
|
|
|
13,819
|
|
|
(11,687
|
)
|
||||||
EBIT
|
21,067
|
|
|
(3,057
|
)
|
|
24,124
|
|
|
169,778
|
|
|
118,945
|
|
|
50,833
|
|
||||||
Depreciation and amortization and stock-based compensation amortization
|
4,884
|
|
|
5,117
|
|
|
(233
|
)
|
|
23,832
|
|
|
22,431
|
|
|
1,401
|
|
||||||
EBITDA
|
25,951
|
|
|
2,060
|
|
|
23,891
|
|
|
193,610
|
|
|
141,376
|
|
|
52,234
|
|
||||||
Loss on extinguishment of debt
|
—
|
|
|
25,904
|
|
|
(25,904
|
)
|
|
1,935
|
|
|
38,534
|
|
|
(36,599
|
)
|
||||||
Inventory impairments and abandonments
(b)
|
892
|
|
|
450
|
|
|
442
|
|
|
7,212
|
|
|
2,839
|
|
|
4,373
|
|
||||||
Joint venture impairment and abandonment charges
|
—
|
|
|
—
|
|
|
—
|
|
|
341
|
|
|
—
|
|
|
341
|
|
||||||
Adjusted EBITDA
|
$
|
26,843
|
|
|
$
|
28,414
|
|
|
$
|
(1,571
|
)
|
|
$
|
203,098
|
|
|
$
|
182,749
|
|
|
$
|
20,349
|
|
|
Three Months Ended December 31,
|
|||||||||||||
|
New Orders, net
|
|
Cancellation Rates
|
|||||||||||
|
2018
|
|
2017
|
|
18 vs 17
|
|
2018
|
|
2017
|
|||||
West
|
519
|
|
|
534
|
|
|
(2.8
|
)%
|
|
19.2
|
%
|
|
18.5
|
%
|
East
|
201
|
|
|
259
|
|
|
(22.4
|
)%
|
|
20.9
|
%
|
|
23.1
|
%
|
Southeast
|
256
|
|
|
317
|
|
|
(19.2
|
)%
|
|
20.0
|
%
|
|
15.9
|
%
|
Total
|
976
|
|
|
1,110
|
|
|
(12.1
|
)%
|
|
19.8
|
%
|
|
18.9
|
%
|
|
As of December 31,
|
|||||||||
|
2018
|
|
2017
|
|
18 vs 17
|
|||||
Backlog Units:
|
|
|
|
|
|
|||||
West
|
776
|
|
|
887
|
|
|
(12.5
|
)%
|
||
East
|
294
|
|
|
447
|
|
|
(34.2
|
)%
|
||
Southeast
|
455
|
|
|
565
|
|
|
(19.5
|
)%
|
||
Total
|
1,525
|
|
|
1,899
|
|
|
(19.7
|
)%
|
||
Aggregate dollar value of homes in backlog (in millions)
|
$
|
593.1
|
|
|
$
|
704.4
|
|
|
(15.8
|
)%
|
ASP in backlog (in thousands)
|
$
|
388.9
|
|
|
$
|
370.9
|
|
|
4.9
|
%
|
|
Three Months Ended December 31,
|
|||||||||||||||||||||||||||||
|
Homebuilding Revenue
|
|
Average Selling Price
|
|
Closings
|
|||||||||||||||||||||||||
$ in thousands
|
2018
|
|
2017
|
|
18 vs 17
|
|
2018
|
|
2017
|
|
18 vs 17
|
|
2018
|
|
2017
|
|
18 vs 17
|
|||||||||||||
West
|
$
|
208,944
|
|
|
$
|
176,556
|
|
|
18.3
|
%
|
|
$
|
347.7
|
|
|
$
|
335.7
|
|
|
3.6
|
%
|
|
601
|
|
|
526
|
|
|
14.3
|
%
|
East
|
87,765
|
|
|
85,688
|
|
|
2.4
|
%
|
|
466.8
|
|
|
380.8
|
|
|
22.6
|
%
|
|
188
|
|
|
225
|
|
|
(16.4
|
)%
|
||||
Southeast
|
104,273
|
|
|
105,510
|
|
|
(1.2
|
)%
|
|
354.7
|
|
|
335.0
|
|
|
5.9
|
%
|
|
294
|
|
|
315
|
|
|
(6.7
|
)%
|
||||
Total
|
$
|
400,982
|
|
|
$
|
367,754
|
|
|
9.0
|
%
|
|
$
|
370.3
|
|
|
$
|
345.0
|
|
|
7.3
|
%
|
|
1,083
|
|
|
1,066
|
|
|
1.6
|
%
|
|
Three Months Ended December 31, 2018
|
|||||||||||||||||||||||||||
$ in thousands
|
HB Gross
Profit (Loss)
|
|
HB Gross
Margin
|
|
Impairments &
Abandonments
(I&A)
|
|
HB Gross
Profit (Loss)w/o
I&A
|
|
HB Gross
Margin w/o
I&A
|
|
Interest
Amortized to
COS (Interest)
|
|
HB Gross Profit
w/o I&A and
Interest
|
|
HB Gross Margin
w/o I&A and
Interest
|
|||||||||||||
West
|
$
|
43,860
|
|
|
21.0
|
%
|
|
$
|
—
|
|
|
$
|
43,860
|
|
|
21.0
|
%
|
|
$
|
—
|
|
|
$
|
43,860
|
|
|
21.0
|
%
|
East
|
14,396
|
|
|
16.4
|
%
|
|
—
|
|
|
14,396
|
|
|
16.4
|
%
|
|
—
|
|
|
14,396
|
|
|
16.4
|
%
|
|||||
Southeast
|
14,105
|
|
|
13.5
|
%
|
|
858
|
|
|
14,963
|
|
|
14.3
|
%
|
|
—
|
|
|
14,963
|
|
|
14.3
|
%
|
|||||
Corporate & unallocated
|
(11,742
|
)
|
|
|
|
149
|
|
|
(11,593
|
)
|
|
|
|
17,323
|
|
|
5,730
|
|
|
|
||||||||
Total homebuilding
|
$
|
60,619
|
|
|
15.1
|
%
|
|
$
|
1,007
|
|
|
$
|
61,626
|
|
|
15.4
|
%
|
|
$
|
17,323
|
|
|
$
|
78,949
|
|
|
19.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Three Months Ended December 31, 2017
|
|||||||||||||||||||||||||||
$ in thousands
|
HB Gross
Profit (Loss)
|
|
HB Gross
Margin
|
|
Impairments &
Abandonments
(I&A)
|
|
HB Gross
Profit (Loss) w/o
I&A
|
|
HB Gross
Margin w/o
I&A
|
|
Interest
Amortized to
COS
(Interest)
|
|
HB Gross Profit
w/o I&A and
Interest
|
|
HB Gross Margin
w/o I&A and
Interest
|
|||||||||||||
West
|
$
|
38,082
|
|
|
21.6
|
%
|
|
$
|
—
|
|
|
$
|
38,082
|
|
|
21.6
|
%
|
|
$
|
—
|
|
|
$
|
38,082
|
|
|
21.6
|
%
|
East
|
16,436
|
|
|
19.2
|
%
|
|
—
|
|
|
16,436
|
|
|
19.2
|
%
|
|
—
|
|
|
16,436
|
|
|
19.2
|
%
|
|||||
Southeast
|
18,578
|
|
|
17.6
|
%
|
|
—
|
|
|
18,578
|
|
|
17.6
|
%
|
|
—
|
|
|
18,578
|
|
|
17.6
|
%
|
|||||
Corporate & unallocated
|
(12,864
|
)
|
|
|
|
—
|
|
|
(12,864
|
)
|
|
|
|
16,468
|
|
|
3,604
|
|
|
|
||||||||
Total homebuilding
|
$
|
60,232
|
|
|
16.4
|
%
|
|
$
|
—
|
|
|
$
|
60,232
|
|
|
16.4
|
%
|
|
$
|
16,468
|
|
|
$
|
76,700
|
|
|
20.9
|
%
|
|
|
Homebuilding Gross Margin from previously impaired communities:
|
|
|
Pre-impairment turn gross margin
|
(13.5
|
)%
|
Impact of interest amortized to COS related to these communities
|
15.4
|
%
|
Pre-impairment turn gross margin, excluding interest amortization
|
1.9
|
%
|
Impact of impairment turns
|
15.9
|
%
|
Gross margin (post impairment turns), excluding interest amortization
|
17.8
|
%
|
|
Land Sales and Other Revenue
|
|
Land Sales and Other Gross Profit
|
||||||||||||||||||||
|
Three Months Ended December 31,
|
|
Three Months Ended December 31,
|
||||||||||||||||||||
in thousands
|
2018
|
|
2017
|
|
18 vs 17
|
|
2018
|
|
2017
|
|
18 vs 17
|
||||||||||||
West
|
$
|
—
|
|
|
$
|
1,415
|
|
|
$
|
(1,415
|
)
|
|
$
|
—
|
|
|
$
|
363
|
|
|
$
|
(363
|
)
|
East
|
981
|
|
|
3,165
|
|
|
(2,184
|
)
|
|
40
|
|
|
213
|
|
|
(173
|
)
|
||||||
Southeast
|
77
|
|
|
155
|
|
|
(78
|
)
|
|
(4
|
)
|
|
31
|
|
|
(35
|
)
|
||||||
Corporate and unallocated
(a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
10
|
|
||||||
Total
|
$
|
1,058
|
|
|
$
|
4,735
|
|
|
$
|
(3,677
|
)
|
|
$
|
36
|
|
|
$
|
597
|
|
|
$
|
(561
|
)
|
|
Three Months Ended December 31,
|
||||||||||
in thousands
|
2018
|
|
2017
|
|
18 vs 17
|
||||||
West
|
$
|
24,261
|
|
|
$
|
21,110
|
|
|
$
|
3,151
|
|
East
|
5,395
|
|
|
7,396
|
|
|
(2,001
|
)
|
|||
Southeast
|
1,380
|
|
|
6,910
|
|
|
(5,530
|
)
|
|||
Corporate and Unallocated
(a)
|
(27,530
|
)
|
|
(28,735
|
)
|
|
1,205
|
|
|||
Operating income
(b)
|
$
|
3,506
|
|
|
$
|
6,681
|
|
|
$
|
(3,175
|
)
|
|
Three Months Ended December 31,
|
||||||
in thousands
|
2018
|
|
2017
|
||||
Cash used in operating activities
|
$
|
(54,690
|
)
|
|
$
|
(102,224
|
)
|
Cash used in investing activities
|
(6,300
|
)
|
|
(4,039
|
)
|
||
Cash provided by (used in) financing activities
|
4,778
|
|
|
(8,452
|
)
|
||
Net decrease in cash, cash equivalents, and restricted cash
|
$
|
(56,212
|
)
|
|
$
|
(114,715
|
)
|
•
|
$84.4 million
in cash and cash equivalents;
|
•
|
$183.5 million
of remaining capacity under the Credit Facility; and
|
•
|
$12.6 million
of restricted cash, the majority of which is used to secure certain stand-alone letters of credit.
|
•
|
Identify the contract(s) with a customer
|
•
|
Identify the performance obligations
|
•
|
Determine the transaction price
|
•
|
Allocate the transaction price
|
•
|
Recognize revenue when the performance obligations are met
|
•
|
the cyclical nature of the homebuilding industry and a potential deterioration in homebuilding industry conditions;
|
•
|
economic changes nationally or in local markets, changes in consumer confidence, declines in employment levels, inflation or increases in the quantity and decreases in the price of new homes and resale homes on the market;
|
•
|
shortages of or increased prices for labor, land or raw materials used in housing production, and the level of quality and craftsmanship provided by our subcontractors;
|
•
|
factors affecting margins, such as decreased land values underlying land option agreements, increased land development costs in communities under development or delays or difficulties in implementing initiatives to reduce our production and overhead cost structure;
|
•
|
the availability and cost of land and the risks associated with the future value of our inventory, such as additional asset impairment charges or write-downs;
|
•
|
estimates related to homes to be delivered in the future (backlog) are imprecise, as they are subject to various cancellation risks that cannot be fully controlled;
|
•
|
increases in mortgage interest rates, increased disruption in the availability of mortgage financing, continued changes in tax laws or otherwise regarding the deductibility of mortgage interest expenses and real estate taxes or an increased number of foreclosures;
|
•
|
our allocation of capital and the cost of and ability to access capital, due to factors such as limitations in the capital markets or adverse credit market conditions, and otherwise meet our ongoing liquidity needs, including the impact of any downgrades of our credit ratings or liquidity levels;
|
•
|
our ability to reduce our outstanding indebtedness and to comply with covenants in our debt agreements or satisfy such obligations through repayment or refinancing;
|
•
|
increased competition or delays in reacting to changing consumer preferences in home design;
|
•
|
natural disasters or other related events that could result in delays in land development or home construction, increase our costs or decrease demand in the impacted areas;
|
•
|
the potential recoverability of our deferred tax assets;
|
•
|
potential delays or increased costs in obtaining necessary permits as a result of changes to, or complying with, laws, regulations or governmental policies, and possible penalties for failure to comply with such laws, regulations or governmental policies, including those related to the environment;
|
•
|
the results of litigation or government proceedings and fulfillment of any related obligations;
|
•
|
the impact of construction defect and home warranty claims;
|
•
|
the cost and availability of insurance and surety bonds, as well as the sufficiency of these instruments to cover potential losses incurred;
|
•
|
the impact of information technology failures, cybersecurity issues or data security breaches;
|
•
|
terrorist acts, natural disasters, acts of war or other factors over which the Company has little or no control; or
|
•
|
the impact on homebuilding in key markets of governmental regulations limiting the availability of water.
|
31.1
|
|
|
|
31.2
|
|
|
|
32.1
|
|
|
|
32.2
|
|
|
|
101.INS
|
XBRL Instance Document
|
|
|
101.SCH
|
XBRL Schema Document
|
|
|
101.CAL
|
XBRL Calculation Linkbase Document
|
|
|
101.LAB
|
XBRL Labels Linkbase Document
|
|
|
101.PRE
|
XBRL Presentation Linkbase Document
|
|
|
101.DEF
|
XBRL Definition Linkbase Document
|
Date:
|
February 4, 2019
|
Beazer Homes USA, Inc.
|
||
|
|
|
|
|
|
|
By:
|
|
/s/ Robert L. Salomon
|
|
|
|
Name:
|
Robert L. Salomon
|
|
|
|
|
Executive Vice President and
Chief Financial Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Beazer Homes USA, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
Date:
|
February 4, 2019
|
|
|
|
|
/s/ Allan P. Merrill
|
|
|
Allan P. Merrill
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Beazer Homes USA, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
Date:
|
February 4, 2019
|
|
|
|
|
/s/ Robert L. Salomon
|
|
|
Robert L. Salomon
|
|
|
Executive Vice President and Chief Financial Officer
|
|
Date:
|
February 4, 2019
|
|
|
|
|
/s/ Allan P. Merrill
|
|
|
Allan P. Merrill
|
|
|
President and Chief Executive Officer
|
|
Date:
|
February 4, 2019
|
|
|
|
|
/s/ Robert L. Salomon
|
|
|
Robert L. Salomon
|
|
|
Executive Vice President and Chief Financial Officer
|