Beazer Homes Reaffirms Outlook For Profit In 2014, Plans Senior Notes Offering

(RTTNews) - Beazer Homes USA, Inc. (BZH) on Thursday reiterated that it expects to report positive net income for fiscal 2014. However, the homebuilder reported a year-over-year decline in new orders, closings and backlog for the second quarter. Separately, the company said it is proposing to issue $300 million of senior notes in a private offering.

For the second quarter ended March 31, Beazer Homes said that total new orders declined 9 percent to 1,390 units from 1,521 units in the prior-year period. Home closings declined 13 percent to 977 units from 1,127 units in the year-ago quarter.

Atlanta, Georgia-based Beazer Homes' backlog at the end of the second quarter decreased 2 percent to 2,163 from 2,211 in the same period last year.

Beazer Homes said that as expected, new orders and home closings were impacted by an estimated 6 percent decline in active community count, including a 21 percent decline in active community count in the company's West segment. In addition, closings and some new orders were impacted by severe weather conditions in the company's East Segment, which comprises about 40 percent of its active community count.

The company noted that sales per community per month for the second quarter were 3.3, up from 2.2 in the first quarter and down from 3.4 in the year-ago quarter.

Beazer Homes expects to report an unrestricted cash balance as of March 31, 2014 of between $285 million and $315 million.

Looking ahead, Allan Merrill, CEO of Beazer Homes, said, "We remain optimistic about the 2014 spring selling season. The new home market continues to benefit from gradual improvements in the labor market, limited home inventories and generally favorable affordability metrics."

In a separate statement, Beazer Homes announced a proposed offering of $300 million aggregate amount of senior notes due 2019 in a private offering that is exempt from the registration requirements of the Securities Act of 1933. The company intends to offer the notes to qualified institutional buyers.

Beazer Homes plans to use the net proceeds from the offering to fund or replenish cash that is expected to be used to fund the redemption of its 9.25 percent senior notes due 2018.

In Thursday's regular trading session, BZH is trading at $20.56, down $0.24 or 1.15 percent on a volume of 49,598 shares.