Rocky fourth quarter at Beazer Homes
Beazer Homes, the national home builder plagued by recent accounting, financial and legal problems, has given a preliminary fourth-quarter report reflecting a rocky fiscal quarter and year.
This week, the company said it was unable to provide investors with final fourth-quarter financial figures because in a recent internal audit, the company determined it will have to restate financial figures for fiscal years 2004 through 2006, and for interim periods of 2007. In preliminary fourth-quarter results, the company said it expects to take a $230 million charge for abandoned land option contracts, a surplus of unsold homes and several other related items.
Also this week, CTW Investment Group called for the ouster of company CEO Ian McCarthy, citing the company’s difficulty in accounting for land development costs, sale-leaseback transactions, as well as for other legal matters plaguing the home builder.
Still, in the company’s fourth-quarter preliminary statement, McCarthy spoke on how Beazer plans to stabilize its financial position.
"With recent industry data suggesting that market conditions may deteriorate further before a recovery is underway, we need to adapt and further align our cost structure and investment levels to expected lower volumes,” he said. “While these decisions are not taken lightly, they are necessary in order to maintain our sound financial position.”
To combat its declining financial position, since October 2007, Beazer has reduced its employee base by 25 percent -- approximately 650 positions. Overall headcount has declined more than 50 percent, the company said, both through reductions and attrition. Beazer’s board of directors also recently voted to suspend the company’s quarterly dividend of 10 cents per share.
Additionally, the company has been investigated by the United States Department of Housing and Urban Development for regulatory violations. McCarthy has said he expects negotiations between the home builder and federal agency to begin “in the short term.”