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Beazer Homes Says Incentives To Continue

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By HARRY R. WEBER, The Associated Press

Published: December 5, 2007

ATLANTA - Beazer Homes USA will continue offering discounts to move inventory in a sluggish housing market, but financial and internal troubles aren't forcing the company into a fire sale, a senior executive said Tuesday.

Chief Financial Officer Allan Merrill said at an investor conference in Orlando that there are bargain hunters in every market the company serves, but that doesn't mean drastic price cuts.

"We are going to generate cash," Merrill said. "We are very focused on that."

Merrill said at the Bank of America Securities Credit Conference that Beazer has good positions and poor positions in varying markets that could allow for different pricing strategies.

Asked by an analyst to give a broader outlook on promotions Beazer will offer to lure buyers, Merrill quipped, "I think we would have to look into that crystal ball that we have, like every management team has, and predict the future."

Merrill said internal investigations and planned financial restatements were ongoing.

Last month, the company said it would restate financials for a three-year period 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 U.S. Attorney's Office in the Western District of North Carolina seeking documents related to the mortgage service.

Beazer also had 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 since has urged Beazer's board to fire Chief Executive Officer Ian McCarthy.

Beazer has been beset by turmoil in the housing industry that has caused its number of home closings to plunge. It said it cut 650 jobs, or 25 percent of its work force, in October, and suspended its quarterly dividend.

Beazer shares fell 29 cents to close at $7.86 Tuesday.

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