Beazer Reports 2Q Loss

Atlanta, GA, April 26, 2007--Beazer Homes USA in the second quarter reported a net loss of $43.1 million, or $1.12 a share, verses net income of $104.4 million, or $2.35, in the year ago period. Revenue was off 35 percent to $826.3 million.

Analysts had forecast a loss of $0.14 per share on revenue of $684 million, according to a poll by Thomson Financial

The company also withdrew its fiscal 2007 profit outlook

Beazer recorded $86.9 million in pretax expenses to walk away from land-option contracts and to write down the value of land. New home orders fell to 4,085 from 4,224.

Chief Executive Officer Ian McCarthy said, "Most housing markets across the country continue to experience lower levels of demand coupled with higher levels of inventory, resulting in increased competition and continued significant discounting.  He said “We continued to experience extremely challenging operating conditions during our second quarter,''. ``At this point in the traditional spring selling season we still have yet to see any meaningful evidence of a sustainable recovery.''

The company said it's pleased with the level of new orders achieved during the quarter, but has yet to see "any meaningful evidence of a sustainable recovery in the housing market."

Beazer also said it recently learned a second homeowner class action lawsuit was filed in South Carolina, and that it has been named a defendant in a shareholder complaint filed against certain current and former executives and directors on matters related to the company's mortgage origination business.

As previously disclosed Beazer Homes received a subpoena from the U.S. Attorney's office in the Western District of North Carolina, seeking documents on its mortgage origination services and was named as a defendant in a securities class action lawsuit and homeowner class action lawsuit. The company said it is cooperating with the regulators and intends to vigorously defend each of the lawsuits.

Looking ahead, Beazer said the current housing market environment continues to show lower demand and higher inventories, with heavy discounting needed to drive meaningful sales volume. Given current market conditions and low visibility, Beazer Homes withdrew its earnings per share outlook for fiscal 2007.