Beazer Ready to Downsize Further

Atlanta, GA, September 19, 2007--Struggling homebuilder Beazer Homes USA Inc. is cutting costs and offering discounts to weather the downturn in the housing market and is prepared to downsize further if needed, CEO Ian McCarthy said.

McCarthy told investors at a conference in New York that was broadcast on the Internet that the Atlanta-based company knows that the landscape has changed, and it must deal with the hard realities it faces.

Beazer has been "rightsizing" its business by cutting costs and centralizing functions, McCarthy said.

"If we have to rightsize that further, if we have to shrink that further ... we will be prepared to do that," he said.

McCarthy said Beazer is looking at demographics and making projections of where the business is going.

He said the company may pull back from some positions and potentially some markets in the short-term, with hope for growth in the long-term.

Promotions the company has been running periodically since June 2006 have helped Beazer attract new buyers as others have left during the persistent housing slump that has been felt across the country.

McCarthy said the discounts are a "way to hook our buyers in, not only with dollars, but with other incentives."

He said the promotions will continue.

"I think this is something we have to accept," McCarthy said. "This is something that's part of the business today."

Beazer has faced difficulties in the marketplace as well as internally with investigations into company practices.

Beazer recently disclosed that its former chief accounting officer may have inflated reserves and other accrued liabilities in earlier periods. The discrepancies surfaced during an independent internal investigation of the company's mortgage origination business.

Beazer previously disclosed that it received a subpoena from the United States Attorney's office in the Western District of North Carolina, seeking the production of documents focusing on the company's mortgage origination services. 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.

The company has said it is cooperating with the inquiries.

McCarthy did not elaborate on the status of the internal and external probes of the company.