Beazer Homes USA Inc. posted quarterly losses of $123 million as the builder wrote down the value of unsold homes, abandoned land option contracts and totaled up goodwill impairments.
Pretax charges on inventory impairments totaled $113.9 million, the company said, and charges related to abandoned land options were $44.8 million. Goodwill impairment on operations in Northern California, Nevada and Florida totaled $29.8 million, the builder said in a Securities and Exchange Commission filing.
The company’s backlog of unsold homes at the end of June stood at 5,952, which the company valued at $1.69 billion, compared with 9,449 homes with a sales value of $2.85 billion at the same time last year. The inventory of unsold homes was up slightly from the previous quarter, when it stood at 5,563 homes valued at $1.67 billion.
Beazer is “intensely focused on enhancing our sales and marketing efforts, including the use of integrated, national promotion efforts to reduce unsold home inventories,” said Chief Executive Officer Ian McCarthy in a statement.
Home closings totaled 2,666 for the quarter, down 36 percent from a year ago, pushing revenue down 37 percent to $761 million. The cancellation rate for the quarter was 36 percent, compared with 34 percent a year ago and 29 percent in the previous quarter.
Beazer slashed its controlled lot count to 71,801 at the end of June, down 31 percent from a year ago, and a 10 percent reduction from the previous quarter.
The company said it “remains committed to aligning its land supply and inventory levels to current expectations for home closings, and continues to exercise caution and discipline with regard to land and land development spending.”
Beazer also announced a new, four-year $500 million revolving credit facility that replaces an existing $1 billion commitment that was scheduled to mature in August 2009. The new facility contains an accordion feature that could allow the commitment to increase up to $1 billion.
Beazer is the subject of a Department of Justice investigation into the company’s mortgage origination services, a separate SEC probe of whether company officials violated securities laws, and several civil lawsuits seeking class-action status.
The company acknowledged that injunctions on its conduct or the imposition of penalties could affect future results.