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Updated: 4:52 p.m. Tuesday, Nov. 15, 2011 | Posted: 4:16 p.m. Tuesday, Nov. 15, 2011
The Atlanta Journal-Constitution
Atlanta's Beazer Homes, one of the nation's largest home builders, reported losses in fiscal 2011 with decreases in orders for new homes, home closings and revenues, but it hopes to build on a strong finish to the year, which saw sales rise.
Allan Merrill, the president and CEO since June, said Tuesday that he restructured sales leadership nationally, getting rid of some employees, cut overhead costs and spending on land to try to push the company back to profitability.
Beazer lost 57 cents a share for the quarter and $2.71 for the year.
Shares of Beazer Homes opened at $2.22 Tuesday and dropped to $2.13 within three hours of the release of the earnings report.
Despite the losses, Merrill said the fourth quarter ended on an up note with increases in revenue and closing compared the same time last year. Beazer closed 1,376 homes, up 23 percent from the same time in 2010.
“Our new home orders showed encouraging signs of improvement in the second half of Fiscal 2011. While we acknowledge the many challenges facing the industry, we believe we have the people, the communities and the homes to allow us to generate increased new home orders and deliveries in 2012 as we pursue a deliberate climb back to profitability," Merrill said.
The company is also implementing a new home-rental program, with test markets in Las Vegas and Phoenix including 120 houses.
The company has been pummeled by the economy and some actions of past leadership.
In late October Michael T. Rand of Alpharetta, the former chief accounting officer for Beazer, was convicted by a federal jury of crimes relating to accounting fraud conspiracy, document destruction and obstruction of justice, the FBI said. The Securities and Exchange Commission also recovered bonuses and other pay from the former CEO who was in charge during the time.
Beazer was charged with participation in conspiracy and securities fraud with Rand. The company accepted responsibility and in a prosecution agreement agreed to pay $50 million in restitution.
An August analysis of housing markets by Barclays Capital says Beazer is not set up well for a housing rebound as few of its homes are being built in metro areas Barclays believes are set for new growth.
Merrill said the company has a realistic plan to continue building in the bad market and he understands why there is doubt about Beazer, but he believes the company will succeed.
"The market has unsuccessfully predicted our demise several times in the past," he said.
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