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.”
Hunter issues humidifier recall
Hunter Fan, in cooperation with The U.S. Consumer Product Safety Commission, announced a recall of their “Warm Mist Carefree” humidifiers yesterday.
The recall affects 84,000 units that were made in China and sold at Wal-Mart and Lowe’s retail stores, as well as online.
The company received four reports about the water leaks and one report of a fire that caused minor property damage. No injuries have been reported.
Orchard Supply Hardware appoints real estate and legal executives
Orchard Supply Hardware (OSH), the San Jose, Calif.-based home improvement and garden retail chain, appointed Eric Kelly as vp-real estate and store planning, and Roger Smith as chief legal counsel.
“With the additions of Eric Kelly and Roger Smith, I am pleased that we have a solid and complete senior leadership team in place,” OSH president and CEO Rob Lynch said. “Eric and Roger bring deep experience in retail, law and real estate and will play pivotal roles in helping us achieve our company’s goals.”
Kelly comes to OSH from L.A. Fitness, where he had been senior vp-real estate, responsible for strategic planning, site analysis and financial pro forma development. Kelly has also served in senior real estate and construction roles with 24-Hour Fitness, and Beverages and More.
Smith, whose appointment becomes effective Nov. 26, served as associate general counsel at Sears Holdings, providing legal guidance and oversight for OSH and other specialty retail businesses. His legal experience spans commercial and contract law, corporate law and governance, regulatory compliance, distribution, marketing and advertising, acquisitions, and real estate and construction, OSH said.
OSH, which began as a farmers’ co-op in 1931, now has 85 home improvement/garden retail stores throughout California.