Thursday, May 15, 2008
Beazer Restates Results for 9 Years
Beazer Homes USA Inc. restated financial results over nine years, removing one of several clouds hanging over the home builder.
After a nearly yearlong internal review that delayed the company's quarterly filings and resulted in a showdown with bondholders, Beazer late Monday restated its earnings for fiscal years 1998 to 2006. The Atlanta company said its audit committee determined it had improperly recorded certain liabilities associated with land development and other costs, according to its filings with the Securities and Exchange Commission. Based partly on the probe's findings, management concluded there were "material weaknesses" in Beazer's internal controls over financial reporting, according to the filings.
But the restatement resulted in a $27.6 million gain for Beazer partly because the costs the company recorded as "accrued" liabilities turned out to be less than expected.
Beazer has seen its stock price get hammered by the housing crisis and a range of investigations, including the internal accounting review, which was launched after problems surfaced relating to its lending practices. During the review, Beazer fired its chief accounting officer last summer for allegedly attempting to destroy company documents.
In 4 p.m. New York Stock Exchange composite trading Monday, Beazer's shares fell 46 cents, or 4.6%, to $9.46, down 74% from its 52-week high. After hours, shares rose 1.1% to $9.56.
The restatement brings Beazer closer to curing default issues with holders of more than $1.3 billion in debt. The company said it had received "purported" default notices from bondholders because it had failed to file its quarterly and annual reports on time.
In October, Beazer struck a deal with many of its bondholders to extend the deadline to provide the financial statements to May 15 in exchange for about $21 million. Beazer also needs to file first and second fiscal-quarter results by Thursday in order to comply with its agreement with bondholders.
Beazer still faces multiple investigations into its lending operations, including a probe by the U.S. attorney in North Carolina. The SEC also is investigating whether the company violated federal securities laws, involving "antifraud, books and records, internal accounting controls," according to Beazer's SEC filings.
Beazer said it intends to negotiate a settlement with prosecutors and regulators, but "no settlement has been reached," according to the SEC filings. The company said it can't quantify the liability of possible regulatory or criminal fines that could result from the investigations.
Write to Michael Corkery at michael.corkery@wsj.com
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