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2014

Standard Pacific Corp. Reports 2013 Third Quarter Results

Q3 2013 Pretax Income of $70.1 million, up 220% vs. Q3 2012

Q3 2013 Net New Order Value up 38% and Backlog Value up 93% vs. Q3 2012

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IRVINE, Calif., Oct. 31, 2013 /PRNewswire/ -- Standard Pacific Corp. (NYSE: SPF) today announced results for the third quarter ended September 30, 2013.

2013 Third Quarter Highlights and Comparisons to the 2012 Third Quarter

  • Net income of $58.9 million, or $0.15 per diluted share, vs. $21.7 million, or $0.05 per diluted share
  • Pretax income of $70.1 million, vs. $21.9 million
  • Net new orders of 1,110, up 12%; Dollar value of net new orders up 38%
  • Backlog of 2,165 homes, up 55%; Dollar value of backlog up 93%
  • 168 average active selling communities, up 8%
  • Home sale revenues up 61%
  • Average selling price of $420 thousand, up 14%
  • 1,217 new home deliveries, up 41%
  • Gross margin from home sales of 25.3%, compared to 20.2%
  • SG&A rate from home sales of 12.1%, a 150 basis point improvement
  • Operating margin from home sales of $67.4 million, or 13.2%, compared to $20.9 million, or 6.6%
  • $141.7 million of land purchases and development costs, compared to $246.2 million

Scott Stowell, the Company's Chief Executive Officer commented, "The positive performance we achieved during the first half of 2013 continued into the third quarter." Mr. Stowell added, "Notwithstanding the tempered approach to homebuying that impacted the market during the third quarter, the benefit of our long-term growth strategy continued to unfold as disciplined land buying, moving up market, and new home designs, all led to a solid third quarter performance." 

Net income for the 2013 third quarter was $58.9 million, or $0.15 per diluted share, compared to $21.7 million, or $0.05 per diluted share.  Pretax income for the 2013 third quarter increased 220% to $70.1 million compared to $21.9 million for the prior year period.  The provision for income taxes for the 2013 third quarter included a non-cash tax benefit of $16.1 million related to the reduction of the Company's accrual for unrecognized tax benefits.

Revenues from home sales for the 2013 third quarter increased 61%, to $511.1 million, as compared to the prior year period, resulting primarily from a 41% increase in new home deliveries and a 14% increase in the Company's consolidated average home price to $420 thousand.  The increase in average home price was primarily attributable to our move-up market focus and general price increases within most of our markets.  The increase in new home deliveries was driven by a 62% year-over-year increase in the number of homes in beginning backlog expected to close during the quarter, partially offset by a decrease in speculative homes sold and closed in the quarter. 

Gross margin from home sales for the 2013 third quarter increased to 25.3% compared to 20.2% in the prior year period.  The 510 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 31.2%* for the 2013 third quarter versus 28.7%* for the 2012 third quarter.    

The Company's 2013 third quarter SG&A expenses (including Corporate G&A) were $61.9 million compared to $43.1 million, down 150 basis points as a percentage of home sale revenues to 12.1%, compared to 13.6% for the 2012 third quarter.  The improvement in the Company's SG&A rate was primarily due to a 61% increase in revenues from home sales and reflects the operating leverage inherent in our business.

Net new orders for the 2013 third quarter increased 12% from the 2012 third quarter to 1,110 homes.  The year-over-year growth is primarily attributable to an increase in the Company's monthly sales absorption rate to 2.2 per community for the 2013 third quarter, compared to 2.1 per community for the 2012 third quarter. The Company's cancellation rate for the 2013 third quarter was 20%, compared to 14% for the 2012 third quarter and 11% for the 2013 second quarter.  Our 2013 third quarter cancellation rate increased from the historically low levels we experienced in the prior quarter and 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 6.5% in the quarter, a 90 basis point reduction from the same period last year.      

The dollar value of homes in backlog increased 93% to $964.1 million, or 2,165 homes, compared to $498.7 million, or 1,394 homes, for the 2012 third quarter, and increased 2% compared to $947.6 million, or 2,272 homes, for the 2013 second quarter.  The increase in year-over-year backlog value was driven primarily by a 24% increase in the average selling price of the homes in backlog, a 12% increase in net new orders and a shift to more to-be-built homes that have a longer construction cycle. 

Cash provided by operating activities was $22.8 million for the 2013 third quarter versus cash used in operating activities of $72.4 million in the 2012 third quarter.  During the 2013 third quarter, the Company spent $141.7 million on land purchases and development costs, compared to $246.2 million for the 2012 third quarter, of which $140.8 million of cash land purchases and development costs were included in cash flows used in operating activities.  Excluding land purchases and development costs, cash inflows from operating activities for the 2013 third quarter were $164.5 million* versus $68.4 million* in the 2012 third quarter.  The year-over-year increase in cash inflows from operating activities (excluding land purchases and development costs) was primarily due to a 61% increase in home sale revenues. 

The Company purchased $69.2 million of land (628 homesites) during the 2013 third quarter, of which 46% (based on homesites) was located in Florida, 21% in the Carolinas and 18% in California, with the balance spread throughout the Company's other operations.  As of September 30, 2013, the Company owned or controlled 35,643 homesites, of which 21,993 are owned and actively selling or under development, 8,707 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 5.2 year supply based on the Company's deliveries for the trailing twelve months ended September 30, 2013.

Earnings Conference Call

A conference call to discuss the Company's 2013 third quarter results will be held at 12:00 p.m. Eastern time November 1, 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 (800) 768-6490 (domestic) or (785) 830-7987 (international); Passcode: 8782855.  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: 8782855.

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




September 30,


September 30,


Percentage


June 30,


Percentage




2013


2012


or % Change


2013


or % Change

Operating Data

(Dollars in thousands)
















Deliveries


1,217



861


41%



1,095


11%

Average selling price

$

420


$

369


14%


$

397


6%

Home sale revenues

$

511,059


$

317,389


61%


$

434,308


18%

Gross margin % (including land sales)


25.3%



20.1%


5.2%



23.4%


1.9%

Gross margin % from home sales


25.3%



20.2%


5.1%



23.7%


1.6%

Gross margin % from home sales (excluding interest amortized

to cost of home sales)*


31.2%



28.7%


2.5%



30.7%


0.5%

Incentive and stock-based compensation expense

$

8,023


$

4,768


68%


$

5,927


35%

Selling expenses

$

24,301


$

17,069


42%


$

22,146


10%

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

$

29,615


$

21,284


39%


$

26,525


12%

SG&A expenses

$

61,939


$

43,121


44%


$

54,598


13%

SG&A % from home sales


12.1%



13.6%


(1.5%)



12.6%


(0.5%)

Operating margin

$

67,426


$

20,924


222%


$

48,207


40%

Operating margin % from home sales


13.2%



6.6%


6.6%



11.1%


2.1%

Net new orders (homes)


1,110



989


12%



1,516


(27%)

Net new orders (dollar value)

$

510,668


$

368,772


38%


$

648,299


(21%)

Average active selling communities


168



156


8%



164


2%

Monthly sales absorption rate per community


2.2



2.1


4%



3.1


(29%)

Cancellation rate


20%



14%


6%



11%


9%

Gross cancellations


272



161


69%



184


48%

Cancellations from current quarter sales


124



67


85%



87


43%

Backlog (homes)


2,165



1,394


55%



2,272


(5%)

Backlog (dollar value)

$

964,148


$

498,739


93%


$

947,584


2%
















Cash flows (uses) from operating activities

$

22,808


$

(72,418)




$

(90,743)



Cash flows (uses) from investing activities

$

(2,296)


$

(95,704)


98%


$

(125,253)


98%

Cash flows (uses) from financing activities

$

261,980


$

348,696


(25%)


$

10,319


2,439%

Land purchases (incl. seller financing and JV purchases)

$

69,196


$

206,740


(67%)


$

235,991


(71%)

Adjusted Homebuilding EBITDA*

$

101,953


$

51,523


98%


$

82,376


24%

Adjusted Homebuilding EBITDA Margin %*


19.9%



16.2%


3.7%



18.8%


1.1%

Homebuilding interest incurred

$

34,766


$

36,112


(4%)


$

33,526


4%

Homebuilding interest capitalized to inventories owned

$

34,118


$

32,604


5%


$

32,782


4%

Homebuilding interest capitalized to investments in JVs

$

648


$

1,839


(65%)


$

744


(13%)

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

$

30,322


$

27,078


12%


$

30,662


(1%)






























As of 




September 30,


June 30,


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)

$

373,523


$

90,589


312%


$

366,808


2%

Inventories owned

$

2,410,649


$

2,325,490


4%


$

1,971,418


22%

Homesites owned and controlled


35,643



35,126


1%



30,767


16%

Homes under construction


2,373



2,277


4%



1,574


51%

Completed specs


183



139


32%



215


(15%)

Deferred tax asset valuation allowance

$

10,510


$

10,510


   ―  


$

22,696


(54%)

Homebuilding debt

$

1,837,622


$

1,537,021


20%


$

1,542,018


19%

Stockholders' equity

$

1,400,026


$

1,337,468


5%


$

1,255,816


11%

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

$

3.84


$

3.67


5%


$

3.48


10%

Total consolidated debt to book capitalization


57.6%



55.0%


2.6%



56.5%


1.1%

Adjusted net homebuilding debt to total adjusted book capitalization*


51.1%



52.0%


(0.9%)



48.3%


2.8%


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
September 30,


Nine Months Ended
September 30,





2013


2012


2013


2012





(Dollars in thousands, except per share amounts)





(Unaudited)

Homebuilding:













Home sale revenues

$

511,059


$

317,389


$

1,300,493


$

812,578


Land sale revenues


697



1,152



7,665



4,537



Total revenues


511,756



318,541



1,308,158



817,115


Cost of home sales


(381,694)



(253,344)



(993,809)



(647,525)


Cost of land sales


(672)



(1,092)



(7,671)



(4,458)



Total cost of sales


(382,366)



(254,436)



(1,001,480)



(651,983)




Gross margin


129,390



64,105



306,678



165,132




Gross margin %


25.3%



20.1%



23.4%



20.2%


Selling, general and administrative expenses


(61,939)



(43,121)



(162,831)



(122,765)


Income (loss) from unconsolidated joint ventures


(32)



(39)



1,249



(2,707)


Interest expense


 ―   



(1,669)



 ―   



(5,816)


Other income (expense)


301



117



2,624



4,708




Homebuilding pretax income 


67,720



19,393



147,720



38,552

Financial Services:













Revenues


5,839



5,218



18,927



14,249


Expenses


(3,590)



(2,777)



(10,394)



(7,952)


Other income


167



70



420



217




Financial services pretax income


2,416



2,511



8,953



6,514

Income before taxes


70,136



21,904



156,673



45,066

Provision for income taxes


(11,201)



(194)



(32,778)



(570)

Net income 


58,935



21,710



123,895



44,496

  Less: Net income allocated to preferred shareholder


(14,166)



(9,100)



(40,353)



(18,980)

  Less: Net income allocated to unvested restricted stock


(90)



(22)



(169)



(31)

Net income available to common stockholders

$

44,679


$

12,588


$

83,373


$

25,485
















Income Per Common Share:













Basic


$

0.16


$

0.06


$

0.34


$

0.13


Diluted

$

0.15


$

0.05


$

0.31


$

0.12
















Weighted Average Common Shares Outstanding:













Basic



276,966,995



204,485,294



244,998,581



198,469,130


Diluted


314,897,098



235,273,648



283,189,878



210,441,932
















Weighted average additional common shares outstanding

if preferred shares converted to common shares













87,812,786



147,812,786



118,582,017



147,812,786
















Total weighted average diluted common shares outstanding

if preferred shares converted to common shares













402,709,884



383,086,434



401,771,895



358,254,718

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS








September 30,


December 31,







2013


2012







(Dollars in thousands)

ASSETS

(Unaudited)




Homebuilding:







Cash and equivalents

$

345,999


$

339,908


Restricted cash



27,524



26,900


Trade and other receivables


19,186



10,724


Inventories:










Owned




2,410,649



1,971,418



Not owned



103,734



71,295


Investments in unconsolidated joint ventures


58,330



52,443


Deferred income taxes, net


405,912



455,372


Other assets




48,812



41,918




Total Homebuilding Assets


3,420,146



2,969,978

Financial Services:







Cash and equivalents


17,129



6,647


Restricted cash



1,795



2,420


Mortgage loans held for sale, net


75,211



119,549


Mortgage loans held for investment, net


10,989



9,923


Other assets




4,926



4,557




Total Financial Services Assets


110,050



143,096





Total Assets

$

3,530,196


$

3,113,074












LIABILITIES AND EQUITY






Homebuilding:







Accounts payable


$

29,301


$

22,446


Accrued liabilities



196,478



198,144


Secured project debt and other notes payable


5,105



11,516


Senior notes payable


1,832,517



1,530,502




Total Homebuilding Liabilities


2,063,401



1,762,608

Financial Services:







Accounts payable and other liabilities


2,589



2,491


Mortgage credit facilities


64,180



92,159




Total Financial Services Liabilities


66,769



94,650





Total Liabilities


2,130,170



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 September 30, 2013 and December 31, 2012, respectively


3



5



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








    authorized; 277,064,975 and 213,245,488 shares 








    issued and outstanding at September 30, 2013 and 








    December 31, 2012, respectively


2,770



2,132



Additional paid-in capital


1,350,706



1,333,255



Accumulated earnings (deficit)


46,547



(77,348)



Accumulated other comprehensive loss, net of tax


  ―    



(2,228)




Total Equity


1,400,026



1,255,816





Total Liabilities and Equity

$

3,530,196


$

3,113,074

 


INVENTORIES






September 30,


December 31,





2013


2012





(Dollars in thousands)

Inventories Owned:




(Unaudited)










     Land and land under development




$     1,636,011


$     1,444,161

     Homes completed and under construction




647,271


427,196

     Model homes




127,367


100,061

        Total inventories owned




$     2,410,649


$     1,971,418








Inventories Owned by Segment:














     California




$     1,151,866


$     1,086,159

     Southwest




581,280


461,201

     Southeast




677,503


424,058

        Total inventories owned




$     2,410,649


$     1,971,418

 

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS







Three Months Ended
September 30,


Nine Months Ended
September 30,






2013


2012


2013


2012






(Dollars in thousands)






(Unaudited)

Cash Flows From Operating Activities:













Net income

$

58,935


$

21,710


$

123,895


$

44,496


Adjustments to reconcile net income to net cash 














provided by (used in) operating activities:















Amortization of stock-based compensation


2,681



1,559



6,656



4,518




Deposit write-offs


 ―   



 ―   



 ―   



133




Deferred income taxes


27,306



 ―   



48,489



 ―   




Other operating activities


1,096



1,798



4,592



5,838




Changes in cash and equivalents due to:
















Trade and other receivables


11,186



(4,681)



(8,462)



(12,143)





Mortgage loans held for sale


32,221



(18,119)



44,179



(14,016)





Inventories - owned


(84,352)



(70,645)



(314,375)



(185,832)





Inventories - not owned


(21,990)



(7,191)



(31,700)



(10,690)





Other assets


1,655



999



401



922





Accounts payable


7,235



82



6,855



(1,371)





Accrued liabilities


(13,165)



2,070



(6,926)



(2,991)



Net cash provided by (used in) operating activities


22,808



(72,418)



(126,396)



(171,136)

















Cash Flows From Investing Activities:













Investments in unconsolidated homebuilding joint ventures


(2,190)



(44,797)



(12,942)



(53,078)


Distributions of capital from unconsolidated joint ventures


750



10,145



2,319



11,940


Net cash paid for acquisitions


 ―   



(60,752)



(113,793)



(60,752)


Other investing activities


(856)



(300)



(4,734)



(1,705)



Net cash provided by (used in) investing activities


(2,296)



(95,704)



(129,150)



(103,595)

















Cash Flows From Financing Activities:













Change in restricted cash


(2,062)



(1,203)



1



5,034


Principal payments on secured project debt and other notes payable


(72)



(138)



(7,289)



(782)


Principal payments on senior subordinated notes payable


 ―   



 ―   



 ―   



(9,990)


Proceeds from the issuance of senior notes payable


300,000



253,000



300,000



253,000


Payment of debt issuance costs


(4,045)



(8,081)



(4,045)



(8,081)


Net proceeds from (payments on) mortgage credit facilities


(32,784)



26,608



(27,979)



24,227


Proceeds from the issuance of common stock


 ―   



75,849



 ―   



75,849


Payment of common stock issuance costs


 ―   



(3,913)



 ―   



(3,913)


Payment of issuance costs in connection with preferred 














shareholder equity transactions


(3)



 ―   



(350)



 ―   


Proceeds from the exercise of stock options


946



6,574



11,781



8,321



Net cash provided by (used in) financing activities


261,980



348,696



272,119



343,665

















Net increase (decrease) in cash and equivalents


282,492



180,574



16,573



68,934

Cash and equivalents at beginning of period


80,636



298,882



346,555



410,522

Cash and equivalents at end of period

$

363,128


$

479,456


$

363,128


$

479,456

















Cash and equivalents at end of period

$

363,128


$

479,456


$

363,128


$

479,456

Homebuilding restricted cash at end of period


27,524



25,713



27,524



25,713

Financial services restricted cash at end of period


1,795



1,920



1,795



1,920

Cash and equivalents and restricted cash at end of period

$

392,447


$

507,089


$

392,447


$

507,089

 

REGIONAL OPERATING DATA








Three Months Ended
September 30, 


Nine Months Ended
September 30, 







2013


2012


% Change


2013


2012


% Change

New homes delivered:














California


467


363


29%


1,286


904


42%


Arizona


51


66


(23%)


171


176


(3%)


Texas


170


107


59%


458


368


24%


Colorado


36


33


9%


117


80


46%


Nevada


       ―   


       ―   


      ―  


       ―   


9


(100%)


Florida


285


151


89%


707


411


72%


Carolinas


208


141


48%


520


370


41%




Consolidated total


1,217


861


41%


3,259


2,318


41%


Unconsolidated joint ventures


2


14


(86%)


23


28


(18%)




Total (including joint ventures)


1,219


875


39%


3,282


2,346


40%






Three Months Ended
September 30, 


Nine Months Ended
September 30, 






2013


2012


% Change


2013


2012


% Change






(Dollars in thousands)

Average selling prices of homes delivered:


















California


$

586


$

505


16%


$

541


$

489


11%


Arizona



286



204


40%



260



206


26%


Texas



385



328


17%



379



307


23%


Colorado



484



399


21%



439



386


14%


Nevada



      ―  



      ―  


      ―  



      ―  



192


      ―  


Florida



283



256


11%



269



244


10%


Carolinas



284



241


18%



279



238


17%




Consolidated



420



369


14%



399



351


14%


Unconsolidated joint ventures



578



450


28%



505



443


14%




Total (including joint ventures)


$

420


$

370


14%


$

400


$

352


14%






Three Months Ended
September 30,


Nine Months Ended
September 30,






2013


2012


% Change


2013


2012


% Change

Net new orders:














California


386


417


(7%)


1,381


1,169


18%


Arizona


95


61


56%


248


237


5%


Texas


154


132


17%


612


424


44%


Colorado


29


45


(36%)


156


113


38%


Nevada


        ―  


        ―  


        ―  


        ―  


6


(100%)


Florida


274


174


57%


1,010


568


78%


Carolinas


172


160


8%


613


514


19%




Consolidated total


1,110


989


12%


4,020


3,031


33%


Unconsolidated joint ventures


2


18


(89%)


12


42


(71%)




Total (including joint ventures)


1,112


1,007


10%


4,032


3,073


31%






Three Months Ended
September 30,


Nine Months Ended
September 30,






2013


2012


% Change


2013


2012


% Change

Average number of selling communities 













  during the period:














California


48


50


(4%)


46


51


(10%)


Arizona


10


5


100%


9


7


29%


Texas


30


22


36%


30


20


50%


Colorado


8


7


14%


7


6


17%


Florida


41


38


8%


40


37


8%


Carolinas


31


34


(9%)


31


35


(11%)




Consolidated total


168


156


8%


163


156


4%


Unconsolidated joint ventures


         ―  


1


(100%)


         ―  


2


(100%)




Total (including joint ventures)


168


157


7%


163


158


3%

 






At September 30,






2013


2012


% Change






Homes


Dollar Value


Homes


Dollar Value


Homes


Dollar Value






(Dollars in thousands)

Backlog:




















California



535


$

341,743



439


$

217,549



22%



57%


Arizona



154



50,512



118



28,357



31%



78%


Texas



358



158,863



205



74,736



75%



113%


Colorado



114



56,528



66



26,406



73%



114%


Florida



669



250,241



319



81,950



110%



205%


Carolinas



335



106,261



247



69,741



36%



52%




Consolidated total



2,165



964,148



1,394



498,739



55%



93%


Unconsolidated joint ventures



1



599



17



6,836



(94%)



(91%)




Total (including joint ventures)



2,166


$

964,747



1,411


$

505,575



54%



91%

 






At September 30,






2013


2012


% Change

Homesites owned and controlled:








California


9,979


9,806


2%


Arizona


2,291


1,844


24%


Texas


4,468


4,451


0%


Colorado


1,216


669


82%


Nevada


1,124


1,124


          ―   


Florida


11,409


8,211


39%


Carolinas


5,156


4,049


27%



Total (including joint ventures)


35,643


30,154


18%












Homesites owned


26,936


23,974


12%


Homesites optioned or subject to contract 


8,192


5,605


46%


Joint venture homesites


515


575


(10%)



Total (including joint ventures)


35,643


30,154


18%





















Homesites owned:








Raw lots


6,101


4,503


35%


Homesites under development


8,549


8,773


(3%)


Finished homesites


6,871


5,304


30%


Under construction or completed homes


3,061


2,170


41%


Held for sale


2,354


3,224


(27%)



Total


26,936


23,974


12%

 


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


September 30,
2013


Gross
Margin %


September 30,
2012


Gross
Margin %


June 30,
2013


Gross
Margin %


(Dollars in thousands)
















Home sale revenues

$

511,059




$

317,389




$

434,308



Less: Cost of home sales


(381,694)





(253,344)





(331,503)



Gross margin from home sales


129,365


25.3%



64,045


20.2%



102,805


23.7%

Add: Capitalized interest included in cost 















  of home sales


30,303


5.9%



27,071


8.5%



30,337


7.0%

Gross margin from home sales, excluding 















  interest amortized to cost of home sales

$

159,668


31.2%


$

91,116


28.7%


$

133,142


30.7%

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


September 30,
2013


September 30,
2012


June 30,
2013


(Dollars in thousands)










Cash flows provided by (used in) operations

$

22,808


$

(72,418)


$

(90,743)

Add: Cash land purchases included in operating activities


69,196



101,363



122,180

Add: Land development costs


72,542



39,422



63,028

Cash inflows from operations (excluding land purchases and









   development costs)

$

164,546


$

68,367


$

94,465

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.




September 30,
2013


June 30,
2013


December 31,
2012


September 30,
2012




(Dollars in thousands)















Total consolidated debt

$

1,901,802


$

1,633,985


$

1,634,177


$

1,652,111

Less:













Financial services indebtedness


(64,180)



(96,964)



(92,159)



(71,035)


Homebuilding cash


(373,523)



(90,589)



(366,808)



(499,572)

Adjusted net homebuilding debt


1,464,099



1,446,432



1,175,210



1,081,504

Stockholders' equity


1,400,026



1,337,468



1,255,816



760,017

Total adjusted book capitalization

$

2,864,125


$

2,783,900


$

2,431,026


$

1,841,521















Total consolidated debt to book capitalization


57.6%



55.0%



56.5%



68.5%















Adjusted net homebuilding debt to total adjusted book capitalization


51.1%



52.0%



48.3%



58.7%

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.


September 30,


June 30,


December 31,


2013


2013


2012










Actual common shares outstanding


277,064,975



276,792,010



213,245,488

Add: Conversion of preferred shares to common shares


87,812,786



87,812,786



147,812,786

Pro forma common shares outstanding


364,877,761



364,604,796



361,058,274










Stockholders' equity (Dollars in thousands)

$

1,400,026


$

1,337,468


$

1,255,816

Divided by pro forma common shares outstanding

÷

364,877,761


÷

364,604,796


÷

361,058,274

Pro forma stockholders' equity per common share

$

3.84


$

3.67


$

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 September 30,




September 30,
2013


September 30,
2012


June 30,
2013


2013


2012




(Dollars in thousands)


















Net income 

$

58,935


$

21,710


$

43,136


$

610,820


$

59,829


Provision (benefit) for income taxes


11,201



194



8,008



(421,026)



89


Homebuilding interest amortized to cost of sales and interest expense


30,322



28,747



30,662



123,233



102,550


Homebuilding depreciation and amortization


1,031



590



702



2,978



2,386


Amortization of stock-based compensation


2,681



1,559



2,444



9,289



7,663

EBITDA


104,170



52,800



84,952



325,294



172,517

Add:
















Cash distributions of income from unconsolidated joint ventures


       ―  



1,125



1,500



6,000



1,285


Deposit write-offs


       ―  



       ―  



       ―  



       ―  



549

Less:

















Income (loss) from unconsolidated joint ventures


(32)



(39)



147



1,866



(1,409)


Income from financial services subsidiary


2,249



2,441



3,929



12,474



7,850

Adjusted Homebuilding EBITDA

$

101,953


$

51,523


$

82,376


$

316,954


$

167,910


















Homebuilding revenues

$

511,756


$

318,541


$

438,681


$

1,728,001


$

1,110,271


















Adjusted Homebuilding EBITDA Margin %


19.9%



16.2%



18.8%



18.3%



15.1%

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 September 30,





September 30,
2013


September 30,
2012


June 30,
2013


2013


2012





(Dollars in thousands)



















Net cash provided by (used in) operating activities


$

22,808


$

(72,418)


$

(90,743)


$

(238,376)


$

(183,172)

Add:
















Provision (benefit) for income taxes, net of deferred component


(16,105)



194



199



(15,515)



89


Homebuilding interest amortized to cost of sales and interest expense



30,322



28,747



30,662



123,233



102,550

Less:

















Income from financial services subsidiary


2,249



2,441



3,929



12,474



7,850


Depreciation and amortization from financial services subsidiary



33



32



28



121



94


Loss on disposal of property and equipment


        ―   



12



1



38



10

Net changes in operating assets and liabilities:

















Trade and other receivables


(11,186)



4,681



10,732



(4,482)



5,192



Mortgage loans held for sale



(32,221)



18,119



(11,818)



(11,856)



37,940



Inventories-owned


84,352



70,645



156,993



444,182



206,502



Inventories-not owned



21,990



7,191



4,770



52,561



12,758



Other assets


(1,655)



(999)



3,083



(2,097)



(7,447)



Accounts payable 



(7,235)



(82)



(1,198)



(12,843)



6,147



Accrued liabilities


13,165



(2,070)



(16,346)



(5,220)



(4,695)

Adjusted Homebuilding EBITDA


$

101,953


$

51,523


$

82,376


$

316,954


$

167,910

SOURCE Standard Pacific Corp.



RELATED LINKS
http://www.standardpacifichomes.com

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