Standard Pacific Corp. Reports 2013 Second Quarter Results Q2 2013 Pretax Income of $51.1 million, up 254% vs. Q2 2012

Q2 2013 Net New Order Value up 73% and Backlog Value up 116% vs. Q2 2012

IRVINE, Calif., July 25, 2013 /PRNewswire/ -- Standard Pacific Corp. (NYSE: SPF) today announced results for the second quarter ended June 30, 2013.

2013 Second Quarter Highlights and Comparisons to the 2012 Second Quarter

  • Net income of $43.1 million, or $0.11 per diluted share, vs. $14.3 million, or $0.04 per diluted share
    • Pretax income of $51.1 million, vs. $14.5 million
  • Net new orders of 1,516, up 37%; Dollar value of net new orders up 73%
  • Backlog of 2,272 homes, up 79%; Dollar value of backlog up 116%
  • 164 average active selling communities, up 4% compared to the prior year
  • Home sale revenues up 58%
    • Average selling price of $397 thousand, up 18%
    • 1,095 new home deliveries, up 34%
  • Gross margin from home sales of 23.7%, compared to 20.5%
  • SG&A rate from home sales of 12.6%, a 270 basis point improvement
  • $299.0 million of land purchases and development costs, compared to $131.1 million
  • Adjusted Homebuilding EBITDA of $82.4 million*, or 18.8%* of homebuilding revenues, compared to $41.8 million*, or 15.2%* of homebuilding revenues

Scott Stowell, the Company's Chief Executive Officer commented, "Our strong second quarter performance reflects a continuation of the first quarter's positive momentum. The demand and pricing power we experienced in nearly all of our markets has resulted in a growing backlog with growing margins, which we believe are strong indicators of future performance."  Mr. Stowell added, "As I reflect back on our results over the first half of the year, I am pleased to see the execution of our strategy driving top line revenue and profitability." 

Revenues from home sales for the 2013 second quarter increased 58%, to $434.3 million, as compared to the prior year period, resulting primarily from a 34% increase in new home deliveries and an 18% increase in the Company's consolidated average home price to $397 thousand.  The increase in average home price was primarily attributable to our increasing focus on the move-up market segment and price increases within most of our markets.  The increase in new home deliveries was driven by a 70% year-over-year increase in the number of homes in beginning backlog expected to close during the quarter, partially offset by a decrease in specs sold and closed in the quarter. 

Gross margin from home sales for the 2013 second quarter increased to 23.7% compared to 20.5% in the prior year period.  The 320 basis point year-over-year increase was primarily attributable to price increases, a mix shift to higher margin communities, and improved margins from speculative homes sold and delivered during the quarter.  Excluding previously capitalized interest costs, gross margin from home sales was 30.7%* for the 2013 second quarter versus 29.4%* for the 2012 second quarter.    

The Company's 2013 second quarter SG&A expenses (including Corporate G&A) were $54.6 million compared to $42.0 million, down 270 basis points as a percentage of home sale revenues to 12.6%, compared to 15.3% for the 2012 second 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 second quarter increased 37% from the 2012 second quarter to 1,516 homes.  The year-over-year growth is primarily attributable to a 31% increase in the Company's monthly sales absorption rate to 3.1 per community (2.8 per community excluding the impact of the acquisition of 119 homes under contract for sale in Florida) for the 2013 second quarter, compared to 2.4 per community for the 2012 second quarter, and a 5% increase from 2.9 per community for the 2013 first quarter.       

The dollar value of homes in backlog increased 116% to $947.6 million, or 2,272 homes, compared to $439.7 million, or 1,266 homes, for the 2012 second quarter, and increased 32% compared to $719.7 million, or 1,851 homes, for the 2013 first quarter.  The increase in year-over-year backlog value was driven primarily by a 37% increase in net new orders, a 20% increase in the average selling price of the homes in backlog and a shift to more to-be-built homes that have a longer construction cycle. 

The Company used $90.7 million of cash in operating activities for the 2013 second quarter versus $56.6 million in the 2012 second quarter.  During the 2013 second quarter, the Company spent $299.0 million on land purchases and development costs, compared to $131.1 million for the 2012 second quarter.  Excluding land purchases and development costs, cash inflows from operating activities for the 2013 second quarter were $94.5 million* versus $74.5 million* in the 2012 second 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 $236.0 million of land (2,885 homesites) during the 2013 second quarter, of which 36% (based on homesites) was located in Florida, 31% in the Carolinas and 16% in California, with the balance spread throughout the Company's other operations.  As of June 30, 2013, the Company owned or controlled 35,126 homesites, of which 22,182 are owned and actively selling or under development, 7,629 are controlled or under option, and the remaining 5,315 homesites are held for future development or for sale.  The homesites owned that are actively selling or under development represent a 5.7 year supply based on the Company's deliveries for the trailing twelve months ended June 30, 2013.

Earnings Conference Call

A conference call to discuss the Company's 2013 second quarter results will be held at 12:00 p.m. Eastern time July 26, 2013.  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) 604-9674 (domestic) or (719) 325-4754 (international); Passcode: 7292055.  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: 7292055.

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; 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


June 30,


June 30,


Percentage


March 31,


Percentage


2013


2012


or % Change


2013


or % Change

Operating Data

(Dollars in thousands)
















Deliveries


1,095



815


34%



947


16%

Average selling price

$

397


$

337


18%


$

375


6%

Home sale revenues

$

434,308


$

274,872


58%


$

355,126


22%

Gross margin % (including land sales)


23.4%



20.5%


2.9%



20.8%


2.6%

Gross margin % from home sales


23.7%



20.5%


3.2%



21.0%


2.7%

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


30.7%



29.4%


1.3%



28.8%


1.9%

Incentive and stock-based compensation expense

$

5,927


$

4,676


27%


$

4,848


22%

Selling expenses

$

22,146


$

16,311


36%


$

18,444


20%

G&A expenses (excluding incentive and stock-based compensation expenses)

$

26,525


$

20,965


27%


$

23,002


15%

SG&A expenses

$

54,598


$

41,952


30%


$

46,294


18%

SG&A % from home sales


12.6%



15.3%


(2.7%)



13.0%


(0.4%)
















Net new orders (homes)


1,516



1,108


37%



1,394


9%

Net new orders (dollar value)

$

648,299


$

375,783


73%


$

548,561


18%

Average active selling communities


164



157


4%



158


4%

Monthly sales absorption rate per community


3.1



2.4


31%



2.9


5%

Cancellation rate


11%



11%


 ― 



10%


1%

Gross cancellations


184



138


33%



162


14%

Cancellations from current quarter sales


87



72


21%



86


1%

Backlog (homes)


2,272



1,266


79%



1,851


23%

Backlog (dollar value)

$

947,584


$

439,694


116%


$

719,652


32%
















Cash flows (uses) from operating activities

$

(90,743)


$

(56,600)


(60%)


$

(58,461)


(55%)

Cash flows (uses) from investing activities

$

(125,253)


$

(5,545)


(2,159%)


$

(1,601)


(7,723%)

Cash flows (uses) from financing activities

$

10,319


$

(11,638)




$

(180)



Land purchases

$

235,991


$

96,584


144%


$

71,541


230%

Adjusted Homebuilding EBITDA*

$

82,376


$

41,810


97%


$

63,823


29%

Adjusted Homebuilding EBITDA Margin %*


18.8%



15.2%


3.6%



17.8%


1.0%

Homebuilding interest incurred

$

33,526


$

35,305


(5%)


$

35,027


(4%)

Homebuilding interest capitalized to inventories owned

$

32,782


$

31,876


3%


$

34,201


(4%)

Homebuilding interest capitalized to investments in JVs

$

744


$

1,812


(59%)


$

826


(10%)

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

$

30,662


$

24,465


25%


$

27,885


10%
















 




As of 




June 30,


March 31,


Percentage


December 31,


Percentage




2013


2013


or % Change


2012


or % Change

Balance Sheet Data

(Dollars in thousands, except per share amounts)
















Homebuilding cash (including restricted cash)

$

90,589


$

308,029


(71%)


$

366,808


(75%)

Inventories owned

$

2,325,490


$

2,049,702


13%


$

1,971,418


18%

Homesites owned and controlled


35,126



32,123


9%



30,767


14%

Homes under construction


2,277



1,907


19%



1,574


45%

Completed specs


139



200


(31%)



215


(35%)

Deferred tax asset valuation allowance

$

10,510


$

22,696


(54%)


$

22,696


(54%)

Homebuilding debt

$

1,537,021


$

1,535,570


0%


$

1,542,018


(0%)

Stockholders' equity

$

1,337,468


$

1,287,207


4%


$

1,255,816


7%














Stockholders' equity per share (including if-converted preferred stock)*

$

3.67


$

3.55


3%


$

3.48


5%

Total consolidated debt to book capitalization


55.0%



55.9%


(0.9%)



56.5%


(1.5%)














Adjusted net homebuilding debt to total adjusted book capitalization*


52.0%



48.8%


3.2%



48.3%


3.7%















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 June 30,


Six Months Ended June 30,


2013


2012


2013


2012


(Dollars in thousands, except per share amounts)


(Unaudited)

Homebuilding:













Home sale revenues

$

434,308


$

274,872


$

789,434


$

495,189


Land sale revenues


4,373



 ―   



6,968



3,385



Total revenues


438,681



274,872



796,402



498,574


Cost of home sales


(331,503)



(218,586)



(612,115)



(394,181)


Cost of land sales


(4,416)



 ―   



(6,999)



(3,366)



Total cost of sales


(335,919)



(218,586)



(619,114)



(397,547)




Gross margin


102,762



56,286



177,288



101,027




Gross margin %


23.4%



20.5%



22.3%



20.3%


Selling, general and administrative expenses


(54,598)



(41,952)



(100,892)



(79,644)


Income (loss) from unconsolidated joint ventures


147



(1,146)



1,281



(2,668)


Interest expense


 ―   



(1,617)



 ―   



(4,147)


Other income (expense)


(1,247)



307



2,323



4,591




Homebuilding pretax income 


47,064



11,878



80,000



19,159

Financial Services:













Revenues


7,411



5,405



13,088



9,031


Expenses


(3,482)



(2,915)



(6,804)



(5,175)


Other income


151



84



253



147




Financial services pretax income


4,080



2,574



6,537



4,003

Income before taxes


51,144



14,452



86,537



23,162

Provision for income taxes


(8,008)



(189)



(21,577)



(376)

Net income 


43,136



14,263



64,960



22,786

  Less: Net income allocated to preferred shareholder


(14,293)



(6,130)



(23,991)



(9,807)

  Less: Net income allocated to unvested restricted stock


(66)



(15)



(82)



(12)

Net income available to common stockholders

$

28,777


$

8,118


$

40,887


$

12,967
















Income Per Common Share:













Basic


$

0.12


$

0.04


$

0.18


$

0.07


Diluted

$

0.11


$

0.04


$

0.16


$

0.06
















Weighted Average Common Shares Outstanding:













Basic



243,171,726



195,746,733



228,749,443



195,427,992


Diluted


281,708,696



201,340,622



267,274,060



200,564,039
















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


120,779,819



147,812,786



134,221,626



147,812,786
















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


402,488,515



349,153,408



401,495,686



348,376,825

 

CONDENSED CONSOLIDATED BALANCE SHEETS



June 30,


December 31,


2013


2012


(Dollars in thousands)

ASSETS

(Unaudited)




Homebuilding:







Cash and equivalents

$

65,127


$

339,908


Restricted cash


25,462



26,900


Trade and other receivables


30,372



10,724


Inventories:








Owned


2,325,490



1,971,418



Not owned

80,134



71,295


Investments in unconsolidated joint ventures


57,486



52,443


Deferred income taxes, net


432,817



455,372


Other assets


46,819



41,918




Total Homebuilding Assets


3,063,707



2,969,978

Financial Services:







Cash and equivalents


15,509



6,647


Restricted cash


1,795



2,420


Mortgage loans held for sale, net


107,580



119,549


Mortgage loans held for investment, net


11,264



9,923


Other assets


4,558



4,557




Total Financial Services Assets


140,706



143,096





Total Assets

$

3,204,413


$

3,113,074








LIABILITIES AND EQUITY






Homebuilding:







Accounts payable

$

22,066


$

22,446


Accrued liabilities


208,345



198,144


Secured project debt and other notes payable


5,192



11,516


Senior notes payable


1,531,829



1,530,502




Total Homebuilding Liabilities


1,767,432



1,762,608

Financial Services:







Accounts payable and other liabilities


2,549



2,491


Mortgage credit facilities


96,964



92,159




Total Financial Services Liabilities


99,513



94,650





Total Liabilities


1,866,945



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 June 30, 2013 and December 31, 2012, respectively


3



5



Common stock, $0.01 par value; 600,000,000 shares authorized; 276,792,010 and 213,245,488 shares issued and outstanding at June 30, 2013 and December 31, 2012, respectively


2,768



2,132



Additional paid-in capital


1,347,085



1,333,255



Accumulated deficit


(12,388)



(77,348)



Accumulated other comprehensive loss, net of tax


  ―    



(2,228)




Total Equity


1,337,468



1,255,816





Total Liabilities and Equity

$

3,204,413


$

3,113,074

 

INVENTORIES












June 30,


December 31,





2013


2012





(Dollars in thousands)

Inventories Owned:




(Unaudited)










     Land and land under development




$     1,618,124


$     1,444,161

     Homes completed and under construction




591,990


427,196

     Model homes




115,376


100,061

        Total inventories owned




$     2,325,490


$     1,971,418








Inventories Owned by Segment:














     California




$     1,147,966


$     1,086,159

     Southwest




548,254


461,201

     Southeast




629,270


424,058

        Total inventories owned




$     2,325,490


$     1,971,418

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



Three Months Ended June 30,


Six Months Ended June 30,


2013


2012


2013


2012


(Dollars in thousands)


(Unaudited)

Cash Flows From Operating Activities:













Net income

$

43,136


$

14,263


$

64,960


$

22,786


Adjustments to reconcile net income to net cash provided by (used in) operating activities:















Amortization of stock-based compensation


2,444



1,885



3,975



2,959




Deposit write-offs


 ―   



 ―   



 ―   



133




Deferred income taxes


7,809



 ―   



21,183



 ―   




Other operating activities


2,084



1,912



3,496



4,040




Changes in cash and equivalents due to:
















Trade and other receivables


(10,732)



(471)



(19,648)



(7,462)





Mortgage loans held for sale


11,818



(4,430)



11,958



4,103





Inventories - owned


(156,993)



(70,986)



(230,023)



(115,187)





Inventories - not owned


(4,770)



(872)



(9,710)



(3,499)





Other assets


(3,083)



(1,105)



(1,254)



(77)





Accounts payable


1,198



(3,368)



(380)



(1,453)





Accrued liabilities


16,346



6,572



6,239



(5,061)



Net cash provided by (used in) operating activities


(90,743)



(56,600)



(149,204)



(98,718)

















Cash Flows From Investing Activities:













Investments in unconsolidated homebuilding joint ventures


(8,200)



(5,414)



(10,752)



(8,281)


Distributions of capital from unconsolidated joint ventures


249



806



1,569



1,795


Net cash paid for acquisitions


(113,793)



 ―   



(113,793)



 ―   


Other investing activities


(3,509)



(937)



(3,878)



(1,405)



Net cash provided by (used in) investing activities


(125,253)



(5,545)



(126,854)



(7,891)

















Cash Flows From Financing Activities:













Change in restricted cash


2,725



2,663



2,063



6,237


Principal payments on secured project debt and other notes payable


(124)



(178)



(7,217)



(644)


Principal payments on senior subordinated notes payable


 ―   



(9,990)



 ―   



(9,990)


Net proceeds from (payments on) mortgage credit facilities


3,688



(5,102)



4,805



(2,381)


Payment of issuance costs in connection with preferred shareholder equity transactions


(347)



 ―   



(347)



 ―   


Proceeds from the exercise of stock options


4,377



969



10,835



1,747



Net cash provided by (used in) financing activities


10,319



(11,638)



10,139



(5,031)

















Net increase (decrease) in cash and equivalents


(205,677)



(73,783)



(265,919)



(111,640)

Cash and equivalents at beginning of period


286,313



372,665



346,555



410,522

Cash and equivalents at end of period

$

80,636


$

298,882


$

80,636


$

298,882

















Cash and equivalents at end of period

$

80,636


$

298,882


$

80,636


$

298,882

Homebuilding restricted cash at end of period


25,462



25,135



25,462



25,135

Financial services restricted cash at end of period


1,795



1,295



1,795



1,295

Cash and equivalents and restricted cash at end of period

$

107,893


$

325,312


$

107,893


$

325,312

 

REGIONAL OPERATING DATA



Three Months Ended June 30, 


Six Months Ended June 30, 


2013


2012


% Change


2013


2012


% Change

New homes delivered:













California

419


316


33%


819


541


51%


Arizona

57


64


(11%)


120


110


9%


Texas

155


137


13%


288


261


10%


Colorado

38


23


65%


81


47


72%


Nevada

―   


6


(100%)


    ―   


9


(100%)


Florida

239


134


78%


422


260


62%


Carolinas

187


135


39%


312


229


36%


      Consolidated total

1,095


815


34%


2,042


1,457


40%


Unconsolidated joint ventures

7


10


(30%)


21


14


50%


       Total (including joint ventures)

1,102


825


34%


2,063


1,471


40%

 



Three Months Ended June 30,


Six Months Ended June 30,


2013


2012


% Change


2013


2012


% Change


(Dollars in thousands)

Average selling prices of homes delivered:

















California


$

538


$

465


16%


$

515


$

479


8%


Arizona



249



206


21%



249



207


20%


Texas



399



300


33%



375



299


25%


Colorado



441



377


17%



419



377


11%


Nevada



      ―  



194


      ―  



      ―  



192


      ―  


Florida



261



230


13%



260



237


10%


Carolinas



289



244


18%



275



236


17%


       Consolidated



397



337


18%



387



340


14%


Unconsolidated joint ventures



474



426


11%



498



436


14%


       Total (including joint ventures)


$

397


$

338


17%


$

388


$

341


14%




















 







Three Months Ended June 30,


Six Months Ended June 30,




2013


2012


% Change


2013


2012


% Change

Net new orders:














California


513


425


21%


995


752


32%


Arizona


78


93


(16%)


153


176


(13%)


Texas


216


151


43%


458


292


57%


Colorado


65


42


55%


127


68


87%


Nevada


        ―  


1


(100%)


        ―  


6


(100%)


Florida


443


208


113%


736


394


87%


Carolinas


201


188


7%


441


354


25%



Consolidated total


1,516


1,108


37%


2,910


2,042


43%


Unconsolidated joint ventures


1


16


(94%)


10


24


(58%)



Total (including joint ventures)


1,517


1,124


35%


2,920


2,066


41%

 






Three Months Ended June 30,


Six Months Ended June 30,






2013


2012


% Change


2013


2012


% Change

Average number of selling communities 













  during the period:














California


46


53


(13%)


46


52


(12%)


Arizona


9


7


29%


8


8


        ―  


Texas


30


20


50%


30


20


50%


Colorado


8


6


33%


7


6


17%


Florida


41


36


14%


39


36


8%


Carolinas


30


35


(14%)


31


35


(11%)



Consolidated total


164


157


4%


161


157


3%


Unconsolidated joint ventures


         ―  


2


(100%)


         ―  


3


(100%)



Total (including joint ventures)


164


159


3%


161


160


1%

 






At June 30,






2013


2012


% Change






Homes


Dollar Value


Homes


Dollar Value


Homes


Dollar Value






(Dollars in thousands)

Backlog:




















California



616


$

366,617



385


$

191,654



60%



91%


Arizona



110



36,330



123



25,648



(11%)



42%


Texas



374



156,036



180



62,773



108%



149%


Colorado



121



57,425



54



21,317



124%



169%


Florida



680



220,621



296



76,986



130%



187%


Carolinas



371



110,555



228



61,316



63%



80%




Consolidated total



2,272



947,584



1,266



439,694



79%



116%


Unconsolidated joint ventures



1



586



13



5,997



(92%)



(90%)




Total (including joint ventures)



2,273


$

948,170



1,279


$

445,691



78%



113%

 







At June 30,




2013


2012


% Change

Homesites owned and controlled:







California


10,150


8,926


14%


Arizona


1,975


1,820


9%


Texas


5,220


4,038


29%


Colorado


1,268


690


84%


Nevada


1,124


1,124


          ―   


Florida


10,481


6,937


51%


Carolinas


4,908


4,222


16%



Total (including joint ventures)


35,126


27,757


27%











Homesites owned


27,497


21,369


29%


Homesites optioned or subject to contract 


7,039


5,176


36%


Joint venture homesites


590


1,212


(51%)



Total (including joint ventures)


35,126


27,757


27%



















Homesites owned:







Raw lots


7,300


3,570


104%


Homesites under development


8,027


6,582


22%


Finished homesites


5,865


5,464


7%


Under construction or completed homes


2,908


2,089


39%


Held for sale


3,397


3,664


(7%)



Total


27,497


21,369


29%

 

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 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


June 30,
2013


Gross
Margin %


June 30,
2012


Gross
Margin %


March 31,
2013


Gross
Margin %


(Dollars in thousands)
















Home sale revenues

$

434,308




$

274,872




$

355,126



Less: Cost of home sales


(331,503)





(218,586)





(280,612)



Gross margin from home sales


102,805


23.7%



56,286


20.5%



74,514


21.0%

Add: Capitalized interest included in cost of home sales


30,337


7.0%



24,465


8.9%



27,696


7.8%

Gross margin from home sales, excluding interest amortized to cost of home sales

$

133,142


30.7%


$

80,751


29.4%


$

102,210


28.8%

The table set forth below reconciles the Company's cash flows 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


June 30,
2013


June 30,
2012


March 31,
2013


(Dollars in thousands)










Cash flows used in operations

$

(90,743)


$

(56,600)


$

(58,461)

Add: Cash land purchases included in operating activities


122,180



96,584



71,541

Add: Land development costs


63,028



34,514



47,152

Cash inflows from operations (excluding land purchases and development costs)

$

94,465


$

74,498


$

60,232

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.




June 30,
2013


March 31,
2013


December 31,
2012


June 30,
2012




(Dollars in thousands)















Total consolidated debt

$

1,633,985


$

1,628,846


$

1,634,177


$

1,364,109

Less:














Financial services indebtedness


(96,964)



(93,276)



(92,159)



(44,427)


Homebuilding cash


(90,589)



(308,029)



(366,808)



(317,242)

Adjusted net homebuilding debt


1,446,432



1,227,541



1,175,210



1,002,440

Stockholders' equity


1,337,468



1,287,207



1,255,816



656,624

Total adjusted book capitalization

$

2,783,900


$

2,514,748


$

2,431,026


$

1,659,064















Total consolidated debt to book capitalization


55.0%



55.9%



56.5%



67.5%















Adjusted net homebuilding debt to total adjusted book capitalization


52.0%



48.8%



48.3%



60.4%

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.


June 30,


March 31,


December 31,


2013


2013


2012










Actual common shares outstanding


276,792,010



215,210,139



213,245,488

Add: Conversion of preferred shares to common shares


87,812,786



147,812,786



147,812,786

Pro forma common shares outstanding


364,604,796



363,022,925



361,058,274










Stockholders' equity (Dollars in thousands)

$

1,337,468


$

1,287,207


$

1,255,816

Divided by pro forma common shares outstanding

÷

364,604,796


÷

363,022,925


÷

361,058,274

Pro forma stockholders' equity per common share

$

3.67


$

3.55


$

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


LTM Ended June 30,




June 30,
2013


June 30,
2012


March 31,
2013


2013


2012




(Dollars in thousands)


















Net income 

$

43,136


$

14,263


$

21,824


$

573,595


$

31,685


Provision (benefit) for income taxes


8,008



189



13,569



(432,033)



45


Homebuilding interest amortized to cost of sales and interest expense


30,662



26,082



27,885



121,658



96,906


Homebuilding depreciation and amortization


702



575



628



2,537



2,483


Amortization of stock-based compensation


2,444



1,885



1,531



8,167



8,739

EBITDA


84,952



42,994



65,437



273,924



139,858

Add:
















Cash distributions of income from unconsolidated joint ventures


1,500



160



1,875



7,125



160


Impairment charges and deposit write-offs


       ―  



       ―  



       ―  



       ―  



9,508

Less:

















Income (loss) from unconsolidated joint ventures


147



(1,146)



1,134



1,859



(1,825)


Income from financial services subsidiary


3,929



2,490



2,355



12,666



6,614

Adjusted Homebuilding EBITDA

$

82,376


$

41,810


$

63,823


$

266,524


$

144,737


















Homebuilding revenues

$

438,681


$

274,872


$

357,721


$

1,534,786


$

1,033,523


















Adjusted Homebuilding EBITDA Margin %


18.8%



15.2%



17.8%



17.4%



14.0%

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


LTM Ended June 30,





June 30,
2013


June 30,
2012


March 31,
2013


2013


2012





(Dollars in thousands)



















Net cash provided by (used in) operating activities


$

(90,743)


$

(56,600)


$

(58,461)


$

(333,602)


$

(189,218)

Add:
















Provision for income taxes, net of deferred component


199



189



195



784



45


Homebuilding interest amortized to cost of sales and interest expense



30,662



26,082



27,885



121,658



96,906

Less:

















Income from financial services subsidiary


3,929



2,490



2,355



12,666



6,614


Depreciation and amortization from financial services subsidiary



28



28



28



120



79


Loss on disposal of property and equipment


1



3



15



50



182

Net changes in operating assets and liabilities:

















Trade and other receivables


10,732



471



8,916



11,385



1,327



Mortgage loans held for sale



(11,818)



4,430



(140)



38,484



34,788



Inventories-owned


156,993



70,986



73,030



430,475



203,576



Inventories-not owned



4,770



872



4,940



37,762



10,426



Other assets


3,083



1,105



(1,829)



(1,441)



(4,107)



Accounts payable 



(1,198)



3,368



1,578



(5,690)



202



Accrued liabilities


(16,346)



(6,572)



10,107



(20,455)



(2,333)

Adjusted Homebuilding EBITDA


$

82,376


$

41,810


$

63,823


$

266,524


$

144,737

SOURCE Standard Pacific Corp.



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http://www.standardpacifichomes.com

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