2014

Standard Pacific Corp. Reports 2013 Full Year and Fourth Quarter Results 2013 pretax income of $257.7 million, up 230% from 2012

Fourth most profitable year in Company's nearly 50-year history

IRVINE, Calif., Feb. 5, 2014 /PRNewswire/ -- Standard Pacific Corp. (NYSE: SPF) today announced results for the year and fourth quarter ended December 31, 2013.

2013 Highlights and Comparisons to 2012

  • Net income of $188.7 million, or $0.47 per diluted share, vs. net income of $531.4 million, or $1.44 per diluted share (2012 diluted earnings per share of $0.21*, excluding $454 million deferred tax asset valuation allowance reversal)
  • Pretax income of $257.7 million, up 230%
  • Net new orders of 4,898, up 22%
  • Backlog of 1,700 homes, up 21%; Dollar value of backlog up 55%
  • 166 average active selling communities, up 7%
  • Home sale revenues of $1,899.0 million, up 60%
  • Average selling price of $413 thousand, up 14%
  • 4,602 new home deliveries, up 40%
  • Gross margin from home sales of 24.6%, compared to 20.5%
  • SG&A rate from home sales of 12.1%, compared to 14.5%
  • Operating margin from home sales of $236.5 million, or 12.5%, compared to $71.4 million, or 6.0%
  • $807.9 million of land purchases and development costs, compared to $719.6 million

2013 Fourth Quarter Highlights and Comparisons to the 2012 Fourth Quarter

  • Net income of $64.8 million, or $0.16 per diluted share, vs. $486.9 million, or $1.22 per diluted share ($0.08* per diluted share, excluding $454 million deferred tax asset valuation allowance reversal)
  • Pretax income of $101.0 million, up 205%
  • Net new orders of 878, down 11%; Dollar value of net new orders up 9%
  • 173 average active selling communities, up 15%
  • Home sale revenues of $598.5 million, up 58%
  • Average selling price of $446 thousand, up 15%
  • 1,343 new home deliveries, up 38%
  • Gross margin from home sales of 26.8%, compared to 20.8%
  • SG&A rate from home sales of 11.3%, a 180 basis point improvement
  • Operating margin from home sales of $92.6 million, or 15.5%, compared to $29.1 million, or 7.7%
  • $216.0 million of land purchases and development costs, compared to $270.7 million

Scott Stowell, the Company's Chief Executive Officer commented, "I am pleased with our strong financial performance in 2013, the fourth most profitable year in Standard Pacific Homes' nearly 50-year history and our highest annual pretax earnings since 2005."  Mr. Stowell added, "The execution of our strategy continues to drive top line revenue and profitability and is reflected in our strong results."  

Revenues from home sales for the 2013 fourth quarter increased 58%, to $598.5 million, as compared to the prior year period, resulting primarily from a 38% increase in new home deliveries and a 15% increase in the Company's consolidated average home price to $446 thousand.  The increase in average home price was primarily attributable to general price increases within a majority of the Company's markets and a decrease in the use of sales incentives.  The increase in new home deliveries was driven by a 50% year-over-year increase in the number of homes in beginning backlog expected to close during the quarter. 

Gross margin from home sales for the 2013 fourth quarter increased to 26.8% compared to 20.8% in the prior year period.  The 600 basis point year-over-year increase was primarily attributable to price increases and a decrease in the use of sales incentives.  Excluding previously capitalized interest costs, gross margin from home sales was 32.2%* for the 2013 fourth quarter versus 28.9%* for the 2012 fourth quarter.    

The Company's 2013 fourth quarter SG&A expenses (including Corporate G&A) were $67.9 million compared to $49.4 million, down 180 basis points as a percentage of home sale revenues to 11.3%, compared to 13.1% for the 2012 fourth quarter.  The improvement in the Company's SG&A rate was primarily due to a 58% increase in revenues from home sales and reflects the operating leverage inherent in our business.

Net new orders for the 2013 fourth quarter decreased 11% from the 2012 fourth quarter to 878 homes.  The year-over-year decrease is primarily attributable to a decrease in the Company's monthly sales absorption rate to 1.7 per community for the 2013 fourth quarter, compared to 2.2 per community in both the 2012 fourth quarter and the 2013 third quarter. The Company's cancellation rate for the 2013 fourth quarter was 21%, compared to 15% for the 2012 fourth quarter and 20% for the 2013 third quarter.  Our 2013 fourth quarter cancellation rate increased from the historically low levels we experienced in the prior year period, but was consistent with our average historical cancellation rate over the last 10 years.  As a percentage of beginning backlog our cancellation rate was 7.9% in the quarter, a 20 basis point increase from the same period last year.    

The dollar value of homes in backlog increased 55% to $800.5 million, or 1,700 homes, compared to $515.5 million, or 1,404 homes, as of the end of fiscal year 2012, and was down 17% compared to $964.1 million, or 2,165 homes, as of the end of the 2013 third quarter.  The increase in year-over-year backlog value was driven primarily by a 28% increase in the average selling price of the homes in backlog, reflecting the continued execution of our strategy to focus on the move-up buyer, the shift to more to-be-built homes that have a longer construction cycle, and pricing opportunities in select markets.

Cash used in operating activities was $27.8 million for the 2013 fourth quarter versus $112.0 million in the 2012 fourth quarter.  During the 2013 fourth quarter, the Company spent $216.0 million on land purchases and development costs, compared to $270.7 million for the 2012 fourth quarter.  Excluding land purchases and development costs, cash inflows from operating activities for the 2013 fourth quarter were $185.7 million* versus $158.8 million* in the 2012 fourth quarter.  The year-over-year increase in cash inflows from operating activities (excluding land purchases and development costs) was primarily due to a 58% increase in home sale revenues. 

The Company purchased $116.9 million of land (2,231 homesites) during the 2013 fourth quarter, of which 38% (based on homesites) was located in Florida, 22% in the Carolinas, 20% in Texas and 16% in California, with the balance spread throughout the Company's other operations.  As of December 31, 2013, the Company owned or controlled 35,175 homesites, of which 22,790 are owned and actively selling or under development, 7,442 are controlled or under option, and the remaining 4,943 homesites are held for future development or for sale.  The homesites owned that are actively selling or under development represent a 5.0 year supply based on the Company's deliveries for the year ended December 31, 2013.

Earnings Conference Call

A conference call to discuss the Company's 2013 full year and fourth quarter results will be held at 12:00 p.m. Eastern time February 6, 2014.  The call will be broadcast live over the Internet and can be accessed through the Company's website at http://ir.standardpacifichomes.com.  The call will also be accessible via telephone by dialing (877) 638-9069 (domestic) or (647) 438-1132 (international); Passcode: 2285500.  The audio transmission with the slide presentation will be available on our website for replay within 2 to 3 hours following the live broadcast, and can be accessed by dialing (888) 203-1112 (domestic) or (719) 457-0820 (international); Passcode: 2285500.

About Standard Pacific

Standard Pacific Homes (NYSE: SPF) has been building beautiful, high-quality homes and neighborhoods since its founding in Southern California in 1965.  With a trusted reputation for quality craftsmanship, an outstanding customer experience and exceptional architectural design, the Company utilizes its decades of land acquisition, development and homebuilding expertise to successfully navigate today's complex landscape to acquire and build desirable communities in locations that meet the high expectations of the Company's targeted move-up homebuyers.  Currently offering new homes in major metropolitan areas in Arizona, California, Colorado, Florida, North Carolina, South Carolina, and Texas, we invite you to learn more about us by visiting standardpacifichomes.com.

This news release contains forward-looking statements.  These statements include but are not limited to statements regarding new home orders, deliveries, backlog, absorption rates, average home price, pricing power, revenue, profitability, cash flow, liquidity, gross margin, overhead expenses and other costs; community count; product mix; the benefit of, and execution on, our strategy; supply; demand; our future performance and the future condition of the economy and the housing market.  Forward-looking statements are based on our current expectations or beliefs regarding future events or circumstances, and you should not place undue reliance on these statements.  Such statements involve known and unknown risks, uncertainties, assumptions and other factors many of which are out of the Company's control and difficult to forecast that may cause actual results to differ materially from those that may be described or implied.  Such factors include but are not limited to:  local and general economic and market conditions, including consumer confidence, employment rates, interest rates, the cost and availability of mortgage financing, and stock market, home and land valuations; the impact on economic conditions, terrorist attacks or the outbreak or escalation of armed conflict involving the United States; the cost and availability of suitable undeveloped land, building materials and labor; the cost and availability of construction financing and corporate debt and equity capital; our significant amount of debt and the impact of restrictive covenants in our debt agreements; our ability to repay our debt as it comes due; changes in our credit rating or outlook; the demand for and affordability of single-family homes; the supply of housing for sale; cancellations of purchase contracts by homebuyers; the cyclical and competitive nature of the Company's business; governmental regulation, including the impact of "slow growth" or similar initiatives; delays in the land entitlement process, development, construction, or the opening of new home communities; adverse weather conditions and natural disasters; environmental matters; risks relating to the Company's mortgage banking operations; future business decisions and the Company's ability to successfully implement the Company's operational and other strategies; litigation and warranty claims; and other risks discussed in the Company's filings with the Securities and Exchange Commission, including in the Company's Annual Report on Form 10-K for the year ended Dec. 31, 2012 and subsequent Quarterly Reports on Form 10-Q.  The Company assumes no, and hereby disclaims any, obligation to update any of the foregoing or any other forward-looking statements.  The Company nonetheless reserves the right to make such updates from time to time by press release, periodic report or other method of public disclosure without the need for specific reference to this press release.  No such update shall be deemed to indicate that other statements not addressed by such update remain correct or create an obligation to provide any other updates.

Contact:
Jeff McCall, EVP & CFO (949) 789-1655, jmccall@stanpac.com

*Please see "Reconciliation of Non-GAAP Financial Measures" at the end of this release.

(Note: Tables Follow)

 

KEY STATISTICS AND FINANCIAL DATA1




As of or For the Three Months Ended


December 31,


December 31,


Percentage


September 30,


Percentage


2013


2012


or % Change


2013


or % Change

Operating Data

(Dollars in thousands)














Deliveries


1,343



973


38%



1,217


10%

Average selling price

$

446


$

388


15%


$

420


6%

Home sale revenues

$

598,496


$

377,674


58%


$

511,059


17%

Gross margin % (including land sales)


26.8%



18.7%


8.1%



25.3%


1.5%

Gross margin % from home sales


26.8%



20.8%


6.0%



25.3%


1.5%

Gross margin % from home sales (excluding interest amortized

     to cost of home sales)*














32.2%



28.9%


3.3%



31.2%


1.0%

Incentive and stock-based compensation expense

$

9,442


$

7,013


35%


$

8,023


18%

Selling expenses

$

28,114


$

19,362


45%


$

24,301


16%

G&A expenses (excluding incentive and stock-based 

     compensation expenses)













$

30,304


$

23,067


31%


$

29,615


2%

SG&A expenses

$

67,860


$

49,442


37%


$

61,939


10%

SG&A % from home sales


11.3%



13.1%


(1.8%)



12.1%


(0.8%)

Operating margin from home sales

$

92,648


$

29,127


218%


$

67,426


37%

Operating margin % from home sales


15.5%



7.7%


7.8%



13.2%


2.3%

Net new orders (homes)


878



983


(11%)



1,110


(21%)

Net new orders (dollar value)

$

418,828


$

385,461


9%


$

510,668


(18%)

Average active selling communities


173



150


15%



168


3%

Monthly sales absorption rate per community


1.7



2.2


(23%)



2.2


(23%)

Cancellation rate


21%



15%


6%



20%


1%

Gross cancellations


234



178


31%



272


(14%)

Cancellations from current quarter sales


64



71


(10%)



124


(48%)

Backlog (homes)


1,700



1,404


21%



2,165


(21%)

Backlog (dollar value)

$

800,494


$

515,469


55%


$

964,148


(17%)














Cash flows (uses) from operating activities

$

(27,820)


$

(111,980)


75%


$

22,808



Cash flows (uses) from investing activities

$

(14,707)


$

(1,610)


(813%)


$

(2,296)


(541%)

Cash flows (uses) from financing activities

$

42,690


$

(19,311)




$

261,980


(84%)

Land purchases (incl. seller financing and JV purchases)

$

116,856


$

204,796


(43%)


$

69,196


69%

Adjusted Homebuilding EBITDA*

$

135,469


$

68,802


97%


$

101,953


33%

Adjusted Homebuilding EBITDA Margin %*


22.3%



16.4%


5.9%



19.9%


2.4%

Homebuilding interest incurred

$

37,546


$

35,095


7%


$

34,766


8%

Homebuilding interest capitalized to inventories owned

$

36,889


$

33,664


10%


$

34,118


8%

Homebuilding interest capitalized to investments in JVs

$

657


$

851


(23%)


$

648


1%

Interest amortized to cost of sales (incl. cost of land sales)

$

32,909


$

33,784


(3%)


$

30,322


9%

 


For the Year Ended


December 31,


December 31,


Percentage


2013


2012


or % Change

Operating Data

(Dollars in thousands)









Deliveries


4,602



3,291


40%

Average selling price

$

413


$

362


14%

Home sale revenues

$

1,898,989


$

1,190,252


60%

Gross margin % (including land sales)


24.5%



19.7%


4.8%

Gross margin % from home sales


24.6%



20.5%


4.1%

Gross margin % from home sales (excluding interest amortized 
     to cost of home sales)*









31.0%



28.9%


2.1%

Incentive and stock-based compensation expense

$

28,240


$

20,362


39%

Selling expenses

$

93,005


$

65,608


42%

G&A expenses (excluding incentive and stock-based 

     compensation expenses)








$

109,446


$

86,237


27%

SG&A expenses

$

230,691


$

172,207


34%

SG&A % from home sales


12.1%



14.5%


(2.4%)

Operating margin from home sales

$

236,501


$

71,415


231%

Operating margin % from home sales


12.5%



6.0%


6.5%

Net new orders (homes)


4,898



4,014


22%

Net new orders (dollar value)

$

2,126,355


$

1,445,962


47%

Average active selling communities


166



155


7%

Monthly sales absorption rate per community


2.5



2.2


14%

Cancellation rate


15%



13%


2%

Gross cancellations


852



621


37%

Cancellations from current year sales


361



289


25%









Cash flows (uses) from operating activities

$

(154,216)


$

(283,116)


46%

Cash flows (uses) from investing activities

$

(143,857)


$

(105,205)


(37%)

Cash flows (uses) from financing activities

$

314,809


$

324,354


(3%)

Land purchases (incl. seller financing and JV purchases)

$

493,583


$

542,106


(9%)

Adjusted Homebuilding EBITDA*

$

383,621


$

193,903


98%

Adjusted Homebuilding EBITDA Margin %*


20.0%



15.7%


4.3%

Homebuilding interest incurred

$

140,865


$

141,827


(1%)

Homebuilding interest capitalized to inventories owned

$

137,990


$

129,136


7%

Homebuilding interest capitalized to investments in JVs

$

2,875


$

6,295


(54%)

Interest amortized to cost of sales (incl. cost of land sales)

$

121,778


$

103,902


17%

 


As of 


December 31,


December 31,


Percentage


2013


2012


or % Change

Balance Sheet Data

(Dollars in thousands, except per share amounts)









Homebuilding cash (including restricted cash)

$

376,949


$

366,808


3%

Inventories owned

$

2,536,102


$

1,971,418


29%

Homesites owned and controlled


35,175



30,767


14%

Homes under construction


2,001



1,574


27%

Completed specs


327



215


52%

Deferred tax asset valuation allowance

$

4,591


$

22,696


(80%)

Homebuilding debt

$

1,839,595


$

1,542,018


19%

Stockholders' equity

$

1,468,960


$

1,255,816


17%

Stockholders' equity per share (including if-converted 

     preferred stock)*

 

$

 

4.02


 

$

 

3.48


 

16%


Total consolidated debt to book capitalization


56.9%



56.5%


0.4%

Adjusted net homebuilding debt to total adjusted 

     book capitalization*









49.9%



48.3%


1.6%









1All statistical numbers exclude unconsolidated joint ventures unless noted otherwise.
*Please see "Reconciliation of Non-GAAP Financial Measures" at the end of this release. 



 


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS












Three Months Ended
December 31,


Year Ended
December 31,





2013


2012


2013


2012





(Dollars in thousands, except per share amounts)





(Unaudited)

Homebuilding:













Home sale revenues

$

598,496


$

377,674


$

1,898,989


$

1,190,252


Land sale revenues


7,955



42,169



15,620



46,706



Total revenues


606,451



419,843



1,914,609



1,236,958


Cost of home sales


(437,988)



(299,105)



(1,431,797)



(946,630)


Cost of land sales


(5,945)



(42,196)



(13,616)



(46,654)



Total cost of sales


(443,933)



(341,301)



(1,445,413)



(993,284)




Gross margin


162,518



78,542



469,196



243,674




Gross margin %


26.8%



18.7%



24.5%



19.7%


Selling, general and administrative expenses


(67,860)



(49,442)



(230,691)



(172,207)


Income (loss) from unconsolidated joint ventures


(300)



617



949



(2,090)


Interest expense


  ―    



(580)



  ―    



(6,396)


Other income (expense)


4,191



(44)



6,815



4,664




Homebuilding pretax income 


98,549



29,093



246,269



67,645

Financial Services:













Revenues


5,983



7,051



24,910



21,300


Expenses


(3,765)



(3,110)



(14,159)



(11,062)


Other income


258



87



678



304




Financial services pretax income


2,476



4,028



11,429



10,542

Income before taxes


101,025



33,121



257,698



78,187

(Provision) benefit for income taxes


(36,205)



453,804



(68,983)



453,234

Net income 


64,820



486,925



188,715



531,421

  Less: Net income allocated to preferred shareholder


(15,570)



(199,646)



(57,386)



(224,408)

  Less: Net income allocated to unvested restricted stock


(99)



(489)



(265)



(410)

Net income available to common stockholders

$

49,151


$

286,790


$

131,064


$

306,603
















Income Per Common Share:













Basic


$

0.18


$

1.35


$

0.52


$

1.52


Diluted

$

0.16


$

1.22


$

0.47


$

1.44
















Weighted Average Common Shares Outstanding:













Basic



277,212,473



212,332,054



253,118,247



201,953,799


Diluted


315,284,731



250,562,775



291,173,953



220,518,897
















Weighted average additional common shares outstanding if preferred shares converted to common shares


 

87,812,786



147,812,786



 

110,826,557



147,812,786
















Total weighted average diluted common shares outstanding if preferred shares converted to common shares


403,097,517



398,375,561



402,000,510



368,331,683

 

CONDENSED CONSOLIDATED BALANCE SHEETS
















December 31,


December 31,







2013


2012







(Dollars in thousands)

ASSETS

(Unaudited)




Homebuilding:







Cash and equivalents

$

355,489


$

339,908


Restricted cash



21,460



26,900


Trade and other receivables


14,431



10,724


Inventories:










Owned




2,536,102



1,971,418



Not owned



98,341



71,295


Investments in unconsolidated joint ventures


66,054



52,443


Deferred income taxes, net


375,400



455,372


Other assets




45,977



41,918




Total Homebuilding Assets


3,513,254



2,969,978

Financial Services:







Cash and equivalents


7,802



6,647


Restricted cash



1,295



2,420


Mortgage loans held for sale, net


122,031



119,549


Mortgage loans held for investment, net


12,220



9,923


Other assets




5,503



4,557




Total Financial Services Assets


148,851



143,096





Total Assets

$

3,662,105


$

3,113,074












LIABILITIES AND EQUITY






Homebuilding:







Accounts payable


$

35,771


$

22,446


Accrued liabilities



214,266



198,144


Secured project debt and other notes payable


6,351



11,516


Senior notes payable


1,833,244



1,530,502




Total Homebuilding Liabilities


2,089,632



1,762,608

Financial Services:







Accounts payable and other liabilities


2,646



2,491


Mortgage credit facilities


100,867



92,159




Total Financial Services Liabilities


103,513



94,650





Total Liabilities


2,193,145



1,857,258

Equity:







Stockholders' Equity:








Preferred stock, $0.01 par value; 10,000,000 shares    








    authorized; 267,829 and 450,829 shares issued and outstanding








    at December 31, 2013 and 2012, respectively


3



5



Common stock, $0.01 par value; 600,000,000 shares 








    authorized; 277,618,177 and 213,245,488 shares 








    issued and outstanding at December 31, 2013 and








    2012, respectively


2,776



2,132



Additional paid-in capital


1,354,814



1,333,255



Accumulated earnings (deficit)


111,367



(77,348)



Accumulated other comprehensive loss, net of tax


  ―    



(2,228)




Total Equity


1,468,960



1,255,816





Total Liabilities and Equity

$

3,662,105


$

3,113,074

 

INVENTORIES








December 31,


December 31,



2013


2012



(Dollars in thousands)

Inventories Owned:


(Unaudited)








     Land and land under development


$     1,771,661


$     1,444,161

     Homes completed and under construction


628,371


427,196

     Model homes


136,070


100,061

        Total inventories owned


$     2,536,102


$     1,971,418






Inventories Owned by Segment:










     California


$     1,182,520


$     1,086,159

     Southwest


603,303


461,201

     Southeast


750,279


424,058

        Total inventories owned


$     2,536,102


$     1,971,418

 


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS














Three Months Ended
December 31,


Year Ended
December 31,






2013


2012


2013


2012






(Dollars in thousands)






(Unaudited)

Cash Flows From Operating Activities:













Net income

$

64,820


$

486,925


$

188,715


$

531,421


Adjustments to reconcile net income to net cash 














provided by (used in) operating activities:















Amortization of stock-based compensation


2,359



2,633



9,015



7,151




Deposit write-offs


 ―   



 ―   



 ―   



133




Deferred income taxes


35,725



(454,000)



84,214



(454,000)




Other operating activities


1,427



2,679



6,019



8,517




Changes in cash and equivalents due to:
















Trade and other receivables


5,218



12,944



(3,244)



801





Mortgage loans held for sale


(46,722)



(32,323)



(2,543)



(46,339)





Inventories - owned


(100,937)



(129,807)



(415,312)



(315,639)





Inventories - not owned


(11,619)



(20,861)



(43,319)



(31,551)





Other assets


564



1,696



965



2,618





Accounts payable


6,470



5,988



13,325



4,617





Accrued liabilities


14,875



12,146



7,949



9,155



Net cash provided by (used in) operating activities


(27,820)



(111,980)



(154,216)



(283,116)

















Cash Flows From Investing Activities:













Investments in unconsolidated homebuilding joint ventures


(11,386)



(4,380)



(24,328)



(57,458)


Distributions of capital from unconsolidated joint ventures


2,444



2,590



4,763



14,530


Net cash paid for acquisitions


(2,469)



 ―   



(116,262)



(60,752)


Other investing activities


(3,296)



180



(8,030)



(1,525)



Net cash provided by (used in) investing activities


(14,707)



(1,610)



(143,857)



(105,205)

















Cash Flows From Financing Activities:













Change in restricted cash


6,564



(1,687)



6,565



3,347


Principal payments on secured project debt and other notes payable


(1,045)



(84)



(8,334)



(866)


Principal payments on senior subordinated notes payable


 ―   



(39,613)



 ―   



(49,603)


Proceeds from the issuance of senior notes payable


 ―   



 ―   



300,000



253,000


Payment of debt issuance costs


(1,271)



(3,680)



(5,316)



(11,761)


Net proceeds from (payments on) mortgage credit facilities


36,687



21,124



8,708



45,351


Proceeds from the issuance of common stock


 ―   



 ―   



 ―   



75,849


Payment of common stock issuance costs


 ―   



(88)



 ―   



(4,002)


Payment of issuance costs in connection with preferred 














shareholder equity transactions


 ―   



 ―   



(350)



 ―   


Proceeds from the exercise of stock options


1,755



4,717



13,536



13,039



Net cash provided by (used in) financing activities


42,690



(19,311)



314,809



324,354

















Net increase (decrease) in cash and equivalents


163



(132,901)



16,736



(63,967)

Cash and equivalents at beginning of period


363,128



479,456



346,555



410,522

Cash and equivalents at end of period

$

363,291


$

346,555


$

363,291


$

346,555

















Cash and equivalents at end of period

$

363,291


$

346,555


$

363,291


$

346,555

Homebuilding restricted cash at end of period


21,460



26,900



21,460



26,900

Financial services restricted cash at end of period


1,295



2,420



1,295



2,420

Cash and equivalents and restricted cash at end of period

$

386,046


$

375,875


$

386,046


$

375,875

 

REGIONAL OPERATING DATA
















Three Months Ended
December 31, 


Year Ended
December 31, 







2013


2012


% Change


2013


2012


% Change

New homes delivered:















California



476


400


19%


1,762


1,304


35%


Arizona



87


71


23%


258


247


4%


Texas



211


104


103%


669


472


42%


Colorado



51


34


50%


168


114


47%


Nevada



       ―   


       ―   


      ―  


      ―  


9


(100%)


Florida



320


170


88%


1,027


581


77%


Carolinas



198


194


2%


718


564


27%




Consolidated total



1,343


973


38%


4,602


3,291


40%


Unconsolidated joint ventures



2


10


(80%)


25


38


(34%)




Total (including joint ventures)



1,345


983


37%


4,627


3,329


39%














Three Months Ended
December 31, 


Year Ended
December 31, 






2013


2012


% Change


2013


2012


% Change






(Dollars in thousands)

Average selling prices of homes delivered:


















California


$

628


$

543


16%


$

565


$

506


12%


Arizona



318



231


38%



280



213


31%


Texas



423



354


19%



393



318


24%


Colorado



476



392


21%



450



388


16%


Nevada



      ―  



      ―  


      ―  



      ―  



192


      ―  


Florida



300



253


19%



279



247


13%


Carolinas



315



263


20%



289



247


17%




Consolidated



446



388


15%



413



362


14%


Unconsolidated joint ventures



581



446


30%



511



444


15%




Total (including joint ventures)


$

446


$

389


15%


$

413


$

363


14%














Three Months Ended
December 31,


Year Ended
December 31,






2013


2012


% Change


2013


2012


% Change

Net new orders:














California


337


401


(16%)


1,718


1,570


9%


Arizona


38


30


27%


286


267


7%


Texas


143


103


39%


755


527


43%


Colorado


45


43


5%


201


156


29%


Nevada


        ―  


        ―  


        ―  


        ―  


6


(100%)


Florida


155


217


(29%)


1,165


785


48%


Carolinas


160


189


(15%)


773


703


10%




Consolidated total


878


983


(11%)


4,898


4,014


22%


Unconsolidated joint ventures


1


5


(80%)


13


47


(72%)




Total (including joint ventures)


879


988


(11%)


4,911


4,061


21%






















Three Months Ended
December 31,


Year Ended
December 31,






2013


2012


% Change


2013


2012


% Change

Average number of selling communities 













  during the period:














California


49


45


9%


47


49


(4%)


Arizona


10


6


67%


9


7


29%


Texas


33


24


38%


31


21


48%


Colorado


9


8


13%


8


7


14%


Florida


40


33


21%


40


36


11%


Carolinas


32


34


(6%)


31


35


(11%)




Consolidated total


173


150


15%


166


155


7%


Unconsolidated joint ventures


         ―  


1


(100%)


         ―  


2


(100%)




Total (including joint ventures)


173


151


15%


166


157


6%

 






At December 31,






2013


2012


% Change






Homes


Dollar Value


Homes


Dollar Value


Homes


Dollar Value






(Dollars in thousands)

Backlog:




















California



396


$

262,097



440


$

218,115



(10%)



20%


Arizona



105



35,846



77



19,178



36%



87%


Texas



290



134,583



204



78,468



42%



72%


Colorado



108



54,946



75



32,230



44%



70%


Florida



504



215,312



366



95,264



38%



126%


Carolinas



297



97,710



242



72,214



23%



35%




Consolidated total



1,700



800,494



1,404



515,469



21%



55%


Unconsolidated joint ventures



           ―    



           ―    



12



5,575



(100%)



(100%)




Total (including joint ventures)



1,700


$

800,494



1,416


$

521,044



20%



54%

 






At December 31,






2013


2012


% Change

Homesites owned and controlled:








California


9,638


10,288


(6%)


Arizona


2,351


1,965


20%


Texas


4,607


5,129


(10%)


Colorado


1,307


792


65%


Nevada


1,124


1,124


          ―   


Florida


11,461


8,159


40%


Carolinas


4,687


3,310


42%



Total (including joint ventures)


35,175


30,767


14%












Homesites owned


27,733


25,475


9%


Homesites optioned or subject to contract 


7,047


4,681


51%


Joint venture homesites


395


611


(35%)



Total (including joint ventures)


35,175


30,767


14%





















Homesites owned:








Raw lots


6,211


5,522


12%


Homesites under development


9,340


9,357


(0%)


Finished homesites


7,024


5,178


36%


Under construction or completed homes


2,804


2,194


28%


Held for sale


2,354


3,224


(27%)



Total


27,733


25,475


9%

 

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Each of the below measures are non-GAAP financial measures and other companies may calculate such non-GAAP measures differently.  Due to the significance of the GAAP components excluded, such measures should not be considered in isolation or as an alternative to operating performance measures prescribed by GAAP.

The table set forth below reconciles the Company's net income to net income excluding the partial reversal of the deferred tax asset valuation allowance during the 2012 fourth quarter.  We believe this measure is useful to management and investors as it provides perspective on the underlying operating performance of the business excluding the benefit from the valuation allowance reversal and provides comparability with the Company's peer group.  Net income and diluted earnings per share excluding the reversal of the deferred tax asset valuation allowance for the three months and year ended December 31, 2012 is calculated as follows:


Three Months Ended


Year Ended


December 31, 2012


December 31, 2012


(Dollars in thousands, except per share amounts)







Net income

$

486,925


$

531,421

Less: Deferred tax asset valuation allowance reversal


(454,000)



(454,000)

Adjusted net income

$

32,925


$

77,421







Diluted earnings per share

$

0.08


$

0.21

Total weighted average diluted common shares outstanding






   if preferred shares converted to common


398,375,561



368,331,683

 

The table set forth below reconciles the Company's gross margin percentage from home sales to the gross margin percentage from home sales, excluding interest amortized to cost of home sales.  We believe these measures are useful to management and investors as they provide perspective on the underlying operating performance of the business excluding these charges and provide comparability with the Company's peer group.


Three Months Ended


December 31,
2013


Gross
Margin %


December 31,
2012


Gross
Margin %


September 30,
2013


Gross
Margin %


(Dollars in thousands)
















Home sale revenues

$

598,496




$

377,674




$

511,059



Less: Cost of home sales


(437,988)





(299,105)





(381,694)



Gross margin from home sales


160,508


26.8%



78,569


20.8%



129,365


25.3%

Add: Capitalized interest included in cost 















  of home sales


32,378


5.4%



30,592


8.1%



30,303


5.9%

Gross margin from home sales, excluding 















  interest amortized to cost of home sales

$

192,886


32.2%


$

109,161


28.9%


$

159,668


31.2%

 



Year Ended December 31,


2013


Gross
Margin %


2012


Gross
Margin %


(Dollars in thousands)











Home sale revenues

$

1,898,989




$

1,190,252



Less: Cost of home sales


(1,431,797)





(946,630)



Gross margin from home sales


467,192


24.6%



243,622


20.5%

Add: Capitalized interest included in cost 










  of home sales


120,714


6.4%



100,683


8.4%

Gross margin from home sales, excluding 










  interest amortized to cost of home sales

$

587,906


31.0%


$

344,305


28.9%

 

The table set forth below reconciles the Company's cash flows provided by (used in) operations to cash inflows from operations excluding land purchases and development costs.  We believe this measure is useful to management and investors to provide perspective on underlying cash flow generation excluding swings related to the timing of land purchases and development costs.


Three Months Ended


Year Ended December 31,


December 31,
2013


December 31,
2012


September 30,
2013


2013


2012


(Dollars in thousands)
















Cash flows provided by (used in) operations

$

(27,820)


$

(111,980)


$

22,808


$

(154,216)


$

(283,116)

Add: Cash land purchases included in operating activities


114,386



204,796



69,196



377,303



436,729

Add: Land development costs


99,133



65,948



87,115



314,267



177,452

Cash inflows from operations (excluding land purchases















   and development costs)

$

185,699


$

158,764


$

179,119


$

537,354


$

331,065

 

The table set forth below reconciles the Company's total consolidated debt to adjusted net homebuilding debt and provides the Company's total consolidated debt to book capitalization and adjusted net homebuilding debt to total adjusted book capitalization ratios.  We believe that the adjusted net homebuilding debt to total adjusted book capitalization ratio is useful to management and investors as a measure of the Company's ability to obtain financing.  For purposes of the ratio of adjusted net homebuilding debt to total adjusted book capitalization, total adjusted book capitalization is adjusted net homebuilding debt plus stockholders' equity.  Adjusted net homebuilding debt excludes indebtedness of the Company's financial services subsidiary and additionally reflects the offset of cash and equivalents.




At December 31,




2013


2012




(Dollars in thousands)









Total consolidated debt

$

1,940,462


$

1,634,177

Less:







Financial services indebtedness


(100,867)



(92,159)


Homebuilding cash


(376,949)



(366,808)

Adjusted net homebuilding debt


1,462,646



1,175,210

Stockholders' equity


1,468,960



1,255,816

Total adjusted book capitalization

$

2,931,606


$

2,431,026









Total consolidated debt to book capitalization


56.9%



56.5%









Adjusted net homebuilding debt to total adjusted book capitalization


49.9%



48.3%

 

The table set forth below calculates pro forma stockholders' equity per common share.  The Company believes that the pro forma stockholders' equity per common share information is useful to management and investors as a measure to determine the book value per common share after giving effect to the conversion of our outstanding preferred shares assuming full conversion to common stock.



December 31,


December 31,


2013


2012







Actual common shares outstanding


277,618,177



213,245,488

Add: Conversion of preferred shares to common shares


87,812,786



147,812,786

Pro forma common shares outstanding


365,430,963



361,058,274







Stockholders' equity (Dollars in thousands)

$

1,468,960


$

1,255,816

Divided by pro forma common shares outstanding

÷

365,430,963


÷

361,058,274

Pro forma stockholders' equity per common share

$

4.02


$

3.48

 

The table set forth below calculates EBITDA and Adjusted Homebuilding EBITDA.  Adjusted Homebuilding EBITDA means net income (loss) (plus cash distributions of income from unconsolidated joint ventures) before (a) income taxes, (b) homebuilding interest expense (c) expensing of previously capitalized interest included in cost of sales, (d) impairment charges and deposit write-offs, (e) (gain) loss on early extinguishment of debt (f) homebuilding depreciation and amortization, (g) amortization of stock-based compensation, (h) income (loss) from unconsolidated joint ventures and (i) income (loss) from financial services subsidiary.  Other companies may calculate Adjusted Homebuilding EBITDA (or similarly titled measures) differently.  We believe Adjusted Homebuilding EBITDA information is useful to management and investors as one measure of the Company's ability to service debt and obtain financing.  Adjusted Homebuilding EBITDA is a non-GAAP financial measure and due to the significance of the GAAP components excluded, should not be considered in isolation or as an alternative to net income, cash flow from operations or any other operating or liquidity performance measure prescribed by GAAP.




Three Months Ended


Year Ended December 31,




December 31,
2013


December 31,
2012


September 30,
2013


2013


2012




(Dollars in thousands)


















Net income 

$

64,820


$

486,925


$

58,935


$

188,715


$

531,421


Provision (benefit) for income taxes


36,205



(453,804)



11,201



68,983



(453,234)


Homebuilding interest amortized to cost of sales and interest expense


32,909



34,364



30,322



121,778



110,298


Homebuilding depreciation and amortization


1,094



617



1,031



3,455



2,372


Amortization of stock-based compensation


2,359



2,633



2,681



9,015



7,151

EBITDA


137,387



70,735



104,170



391,946



198,008

Add:
















Cash distributions of income from unconsolidated joint ventures


       ―  



2,625



       ―  



3,375



3,910


Deposit write-offs


       ―  



       ―  



       ―  



       ―  



133

Less:
















Income (loss) from unconsolidated joint ventures


(300)



617



(32)



949



(2,090)


Income from financial services subsidiary


2,218



3,941



2,249



10,751



10,238

Adjusted Homebuilding EBITDA

$

135,469


$

68,802


$

101,953


$

383,621


$

193,903


















Homebuilding revenues

$

606,451


$

419,843


$

511,756


$

1,914,609


$

1,236,958


















Adjusted Homebuilding EBITDA Margin %


22.3%



16.4%



19.9%



20.0%



15.7%

 

The table set forth below reconciles net cash provided by (used in) operating activities, calculated and presented in accordance with GAAP, to Adjusted Homebuilding EBITDA:





Three Months Ended


Year Ended December 31,





December 31,
2013


December 31,
2012


September 30,
2013


2013


2012





(Dollars in thousands)



















Net cash provided by (used in) operating activities


$

(27,820)


$

(111,980)


$

22,808


$

(154,216)


$

(283,116)

Add:
















Provision (benefit) for income taxes


480



(453,804)



(16,105)



(15,231)



(453,234)


Deferred income tax benefit



        ―   



454,000



        ―   



        ―   



454,000


Homebuilding interest amortized to cost of sales and interest expense



32,909



34,364



30,322



121,778



110,298

Less:
















Income from financial services subsidiary


2,218



3,941



2,249



10,751



10,238


Depreciation and amortization from financial services subsidiary



32



32



33



121



108


Loss on disposal of property and equipment


1



22



        ―   



17



37

Net changes in operating assets and liabilities:

















Trade and other receivables


(5,218)



(12,944)



(11,186)



3,244



(801)



Mortgage loans held for sale



46,722



32,323



(32,221)



2,543



46,339



Inventories-owned


100,937



129,807



84,352



415,312



315,639



Inventories-not owned



11,619



20,861



21,990



43,319



31,551



Other assets


(564)



(1,696)



(1,655)



(965)



(2,618)



Accounts payable 



(6,470)



(5,988)



(7,235)



(13,325)



(4,617)



Accrued liabilities


(14,875)



(12,146)



13,165



(7,949)



(9,155)

Adjusted Homebuilding EBITDA


$

135,469


$

68,802


$

101,953


$

383,621


$

193,903

 

SOURCE Standard Pacific Corp.



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