Troubled homebuilder Beazer Homes USA Inc. said Monday it restated financial results for several prior-year periods and reported that it swung to a hefty loss in its fiscal fourth-quarter of 2007 amid a steep decline in revenue and home closings.
The Atlanta-based company, which faces several investigations, said the cumulative impact of its restatement for periods in the years 1998 to 2006 resulted in a $27.6 million increase in retained earnings.
Beazer attributed the errors to accounting mistakes due in part to inappropriate accumulation of reserves or accrued liabilities associated with land development and house costs. It also cited inaccurate revenue recognition related to model home sale leaseback transactions.
The positive earnings adjustment was overshadowed by the company's results for its quarter ended Sept. 30, 2007, which it had been delayed in reporting.
Beazer said Monday it lost $155.2 million, or $4.03 a share, in the quarter, compared to a restated profit of $83.7 million, or $1.99 a share, in the same period a year earlier. Revenue in the quarter fell to $1.10 billion, compared to $1.83 billion recorded a year earlier.
Home closings in the fourth quarter fell to 3,949 homes, compared to 6,268 homes in the same period a year earlier. New orders totaled 982 homes in the quarter, compared to 1,921 homes in the fourth quarter of the prior year.
For all of fiscal 2007, Beazer said it lost $411.07 million, or $10.70 a share, compared to a restated profit of $368.84 million, or $8.44 a share, in fiscal 2006. Twelve-month revenue fell to $3.49 billion, compared to $5.36 billion recorded in the prior fiscal year.
Beazer said it expects to report financial results for the quarters ended Dec. 31, 2007, and March 31, 2008, by Thursday.
The slide in the U.S. housing market and investigations of the company's business practices have hampered Beazer for months.
In February, Beazer said it would no longer originate mortgages and would offer its buyers mortgage services through Countrywide Financial Corp. The company also said at the time that it would stop building homes in several communities.
The company said it would restate financials for several prior-year periods after an internal probe found employees in its mortgage-origination unit violated federal lending rules. The company has said it received a subpoena from the United States Attorney's office in the Western District of North Carolina seeking documents related to the mortgage service.
Beazer previously disclosed that its former chief accounting officer may have inflated reserves and other accrued liabilities in earlier periods.
The Securities and Exchange Commission has launched a formal investigation of Beazer to determine whether any person or entity related to the company violated federal securities laws.
A shareholder advisory group has since urged Beazer's board to fire Chief Executive Ian McCarthy. The board has not complied.
Beazer said it intends to attempt to negotiate settlements with prosecutors and regulatory authorities concering some if the outstanding issues the company faces.
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