Standard Pacific Corp. Reports 2014 Second Quarter Results

Q2 2014 pretax income of $91.8 million, up 80% from Q2 2013

Q2 2014 backlog value of $1.1 billion, up 20% from Q2 2013

31 Jul, 2014, 16:02 ET from Standard Pacific Corp.

IRVINE, Calif., July 31, 2014 /PRNewswire/ -- Standard Pacific Corp. (NYSE: SPF) today announced results for the second quarter ended June 30, 2014.

2014 Second Quarter Highlights and Comparisons to the 2013 Second Quarter

  • Net income of $56.5 million, or $0.14 per diluted share, vs. $43.1 million, or $0.11 per diluted share
  • Pretax income of $91.8 million, up 80%
  • Net new orders of 1,524, up 1%; Dollar value of net new orders up 10%
  • Backlog of 2,304 homes, up 1%; Dollar value of backlog up 20%
  • 183 average active selling communities, up 12%
  • Home sale revenues of $591.7 million, up 36%
  • Average selling price of $479 thousand, up 21%
  • 1,236 new home deliveries, up 13%
  • Gross margin from home sales of 26.6%, compared to 23.7%
  • Operating margin from home sales of $89.7 million, or 15.2%, compared to $48.2 million, or 11.1%
  • $212.0 million of land purchases and development costs, compared to $311.2 million

Scott Stowell, the Company's President and Chief Executive Officer stated, "Our 2014 second quarter performance reflects the strength of our positioning and the continued execution of our strategy. Our early efforts to build a strong land position and to create an innovative product portfolio for the move-up homebuyer, combined with the unwavering focus of our team on constructing well built homes and providing an exceptional customer experience, have all contributed to our 80% increase in pretax profit and our solid operating margin, which was 15.2% for the 2014 second quarter."      

Revenue.  Revenues from home sales for the 2014 second quarter increased 36%, to $591.7 million, as compared to the prior year period, resulting primarily from a 21% increase in the Company's average home price to $479 thousand, the highest quarterly average home price in the Company's nearly 50 year history, and a 13% increase in new home deliveries.  The increase in average home price was primarily attributable to a shift to more move-up product, a continued reduction in the use of sales incentives, and general price increases within a majority of the Company's markets.  The increase in new home deliveries was driven by a 6% year-over-year increase in the number of homes in beginning backlog expected to close during the quarter and a 30% increase in speculative homes sold and closed compared to the prior year period. 

Orders.  Net new orders for the 2014 second quarter were up slightly from the 2013 second quarter, to 1,524 homes, with the dollar value of these orders up 10%.  The Company's monthly sales absorption rate was 2.8 per community (2.6 per community excluding the impact of the acquisition of 99 homes under contract for sale in Austin, Texas) for the 2014 second quarter, compared to 2.5 per community for the 2014 first quarter. The increase in sales absorption rate from the 2014 first quarter to the 2014 second quarter was consistent with the seasonality we typically experience in our business. The Company's cancellation rate for the 2014 second quarter was 14%, compared to 11% for the 2013 second quarter and 14% for the 2014 first quarter.  Our 2014 second quarter cancellation rate remains well below our average historical cancellation rate of approximately 21% over the last 10 years.    

Backlog.  The dollar value of homes in backlog increased 20% to $1.1 billion, or 2,304 homes, compared to $947.6 million, or 2,272 homes, for the 2013 second quarter, and increased 14% compared to $1.0 billion, or 2,016 homes, for the 2014 first quarter.  The increase in year-over-year backlog value was driven primarily by an 18% increase in the average selling price of the homes in backlog, reflecting the continued execution of our move-up buyer focused strategy and pricing opportunities in select markets.

Land.  During the 2014 second quarter, the Company spent $212.0 million on land purchases and development costs, compared to $311.2 million for the 2013 second quarter. The Company purchased $113.0 million of land, 1,309 homesites, of which 40% (based on homesites) was located in Florida, 28% in Texas, 16% in California, 13% in the Carolinas and 3% in Colorado.  As of June 30, 2014, the Company owned or controlled 35,948 homesites, of which 24,104 were owned and actively selling or under development, 7,174 were controlled or under option, and the remaining 4,670 homesites were 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 trailing twelve months ended June 30, 2014.

Liquidity.  The Company ended the quarter with $570 million of available liquidity, including $130 million of unrestricted homebuilding cash and a $440 million untapped revolving credit facility. The untapped revolving credit facility was amended on July 31, 2014 to, among other things, extend the maturity date to July 2018, increase the aggregate commitment to $450 million, and expand the accordion feature to permit the aggregate commitment to be increased to a maximum amount of $750 million, subject to the Company's future needs and the availability of additional bank capacity.  The credit facility's financial covenants were not altered in connection with the amendment. The Company's homebuilding debt to book capitalization as of June 30, 2014 and 2013 was 53.8% and 53.5%, respectively, and adjusted net homebuilding debt to adjusted book capitalization was 51.6%* and 52.0%*, respectively.  In addition, the Company's homebuilding debt to adjusted homebuilding EBITDA for the LTM period ending June 30, 2014 and 2013 was 4.1x* and 5.8x*, respectively.

Earnings Conference Call

A conference call to discuss the Company's 2014 second quarter results will be held at 12:00 p.m. Eastern time August 1, 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) 723-9523 (domestic) or (719) 325-4749 (international); Passcode: 6252778.  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: 6252778.

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 the strength of our land position and product portfolio; construction quality and customer experience; new home orders; deliveries; backlog; absorption rates; average home price; pricing power; revenue; profitability; cash flow; liquidity; gross margin; operating margin; product mix; land supply; the benefit of, and execution on, our strategy; our future cash needs and the availability of additional bank commitments; and our future performance.  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, 2013 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

2014

2013

or % Change

2014

or % Change

Operating Data

(Dollars in thousands)

Deliveries

1,236

1,095

13%

995

24%

Average selling price

$

479

$

397

21%

$

449

7%

Home sale revenues

$

591,706

$

434,308

36%

$

446,918

32%

Gross margin % (including land sales)

26.7%

23.4%

3.3%

25.8%

0.9%

Gross margin % from home sales

26.6%

23.7%

2.9%

26.6%

        ―  

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

31.7%

30.7%

1.0%

32.0%

(0.3%)

Incentive and stock-based compensation expense

$

6,724

$

5,927

13%

$

5,028

34%

Selling expenses

$

28,782

$

22,146

30%

$

22,699

27%

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

$

32,329

$

26,525

22%

$

30,863

5%

SG&A expenses

$

67,835

$

54,598

24%

$

58,590

16%

SG&A % from home sales

11.5%

12.6%

(1.1%)

13.1%

(1.6%)

Operating margin from home sales

$

89,675

$

48,207

86%

$

60,083

49%

Operating margin % from home sales

15.2%

11.1%

4.1%

13.4%

1.8%

Net new orders (homes)

1,524

1,516

1%

1,311

16%

Net new orders (dollar value)

$

713,347

$

648,299

10%

$

633,818

13%

Average active selling communities

183

164

12%

174

5%

Monthly sales absorption rate per community

2.8

3.1

(10%)

2.5

11%

Cancellation rate

14%

11%

3%

14%

        ―  

Gross cancellations

247

184

34%

221

12%

Cancellations from current quarter sales

93

87

7%

90

3%

Backlog (homes)

2,304

2,272

1%

2,016

14%

Backlog (dollar value)

$

1,138,886

$

947,584

20%

$

1,001,385

14%

Cash flows (uses) from operating activities

$

(25,949)

$

(90,743)

71%

$

(117,563)

78%

Cash flows (uses) from investing activities

$

(36,050)

$

(125,253)

71%

$

10,286

Cash flows (uses) from financing activities

$

4,426

$

10,319

(57%)

$

(50,902)

Land purchases (incl. seller financing)

$

113,001

$

235,991

(52%)

$

144,744

(22%)

Adjusted Homebuilding EBITDA*

$

125,730

$

82,376

53%

$

89,008

41%

Adjusted Homebuilding EBITDA Margin %*

21.2%

18.8%

2.4%

19.3%

1.9%

Homebuilding interest incurred

$

37,641

$

33,526

12%

$

38,786

(3%)

Homebuilding interest capitalized to inventories owned

$

37,228

$

32,782

14%

$

38,213

(3%)

Homebuilding interest capitalized to investments in JVs

$

413

$

744

(44%)

$

573

(28%)

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

$

29,816

$

30,662

(3%)

$

24,983

19%

As of 

June 30,

December 31,

Percentage

2014

2013

or % Change

Balance Sheet Data

(Dollars in thousands, except per share amounts)

Homebuilding cash (including restricted cash)

$

161,121

$

376,949

(57%)

Inventories owned

$

2,902,840

$

2,536,102

14%

Homesites owned and controlled

35,948

35,175

2%

Homes under construction

2,602

2,001

30%

Completed specs

347

327

6%

Deferred tax asset valuation allowance

$

4,591

$

4,591

      ―  

Homebuilding debt

$

1,834,837

$

1,839,595

(0%)

Stockholders' equity

$

1,572,583

$

1,468,960

7%

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

$

4.28

$

4.02

6%

Total consolidated debt to book capitalization

54.7%

56.9%

(2.2%)

Adjusted net homebuilding debt to total adjusted book capitalization*

51.6%

49.9%

1.7%

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,

2014

2013

2014

2013

(Dollars in thousands, except per share amounts)

(Unaudited)

Homebuilding:

Home sale revenues

$

591,706

$

434,308

$

1,038,624

$

789,434

Land sale revenues

780

4,373

14,061

6,968

Total revenues

592,486

438,681

1,052,685

796,402

Cost of home sales

(434,196)

(331,503)

(762,441)

(612,115)

Cost of land sales

(350)

(4,416)

(13,354)

(6,999)

Total cost of sales

(434,546)

(335,919)

(775,795)

(619,114)

Gross margin

157,940

102,762

276,890

177,288

Gross margin %

26.7%

23.4%

26.3%

22.3%

Selling, general and administrative expenses

(67,835)

(54,598)

(126,425)

(100,892)

Income (loss) from unconsolidated joint ventures

(462)

147

(899)

1,281

Other income (expense)

(363)

(1,247)

(376)

2,323

Homebuilding pretax income 

89,280

47,064

149,190

80,000

Financial Services:

Revenues

6,112

7,411

11,096

13,088

Expenses

(3,760)

(3,482)

(7,200)

(6,804)

Other income

214

151

375

253

Financial services pretax income

2,566

4,080

4,271

6,537

Income before taxes

91,846

51,144

153,461

86,537

Provision for income taxes

(35,383)

(8,008)

(58,839)

(21,577)

Net income 

56,463

43,136

94,622

64,960

  Less: Net income allocated to preferred shareholder

(13,496)

(14,293)

(22,650)

(23,991)

  Less: Net income allocated to unvested restricted stock

(77)

(66)

(134)

(82)

Net income available to common stockholders

$

42,890

$

28,777

$

71,838

$

40,887

Income Per Common Share:

Basic

$

0.15

$

0.12

$

0.26

$

0.18

Diluted

$

0.14

$

0.11

$

0.23

$

0.16

Weighted Average Common Shares Outstanding:

Basic

279,075,416

243,171,726

278,514,992

228,749,443

Diluted

316,727,592

281,708,696

316,451,929

267,274,060

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

87,812,786

120,779,819

87,812,786

134,221,626

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

404,540,378

402,488,515

404,264,715

401,495,686

 

CONDENSED CONSOLIDATED BALANCE SHEETS

June 30,

December 31,

2014

2013

(Dollars in thousands)

ASSETS

(Unaudited)

Homebuilding:

Cash and equivalents

$

129,736

$

355,489

Restricted cash

31,385

21,460

Trade and other receivables

25,446

14,431

Inventories:

Owned

2,902,840

2,536,102

Not owned

89,906

98,341

Investments in unconsolidated joint ventures

50,278

66,054

Deferred income taxes, net

334,095

375,400

Other assets

46,353

45,977

Total Homebuilding Assets

3,610,039

3,513,254

Financial Services:

Cash and equivalents

17,803

7,802

Restricted cash

1,295

1,295

Mortgage loans held for sale, net

79,343

122,031

Mortgage loans held for investment, net

12,233

12,220

Other assets

7,451

5,503

Total Financial Services Assets

118,125

148,851

Total Assets

$

3,728,164

$

3,662,105

LIABILITIES AND EQUITY

Homebuilding:

Accounts payable

$

41,920

$

35,771

Accrued liabilities

209,859

214,266

Secured project debt and other notes payable

5,054

6,351

Senior notes payable

1,829,783

1,833,244

Total Homebuilding Liabilities

2,086,616

2,089,632

Financial Services:

Accounts payable and other liabilities

2,386

2,646

Mortgage credit facilities

66,579

100,867

Total Financial Services Liabilities

68,965

103,513

Total Liabilities

2,155,581

2,193,145

Equity:

Stockholders' Equity:

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

    authorized; 267,829 shares issued and outstanding

    at June 30, 2014 and December 31, 2013

3

3

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

    authorized; 279,287,853 and 277,618,177 shares 

    issued and outstanding at June 30, 2014 and

    December 31, 2013, respectively

2,793

2,776

Additional paid-in capital

1,363,798

1,354,814

Accumulated earnings

205,989

111,367

Total Equity

1,572,583

1,468,960

Total Liabilities and Equity

$

3,728,164

$

3,662,105

 

INVENTORIES

June 30,

December 31,

2014

2013

(Dollars in thousands)

Inventories Owned:

(Unaudited)

     Land and land under development

$ 1,883,837

$ 1,771,661

     Homes completed and under construction

876,199

628,371

     Model homes

142,804

136,070

        Total inventories owned

$ 2,902,840

$ 2,536,102

Inventories Owned by Segment:

     California

$ 1,274,707

$ 1,182,520

     Southwest

742,513

603,303

     Southeast

885,620

750,279

        Total inventories owned

$ 2,902,840

$ 2,536,102

 

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended June 30,

Six Months Ended June 30,

2014

2013

2014

2013

(Dollars in thousands)

(Unaudited)

Cash Flows From Operating Activities:

Net income

$

56,463

$

43,136

$

94,622

$

64,960

Adjustments to reconcile net income to net cash 

provided by (used in) operating activities:

Amortization of stock-based compensation

2,859

2,444

5,231

3,975

Deferred income tax provision

35,383

7,809

59,005

21,183

Other operating activities

3,595

2,084

5,211

3,496

Changes in cash and equivalents due to:

Trade and other receivables

6,416

(10,732)

(11,133)

(19,648)

Mortgage loans held for sale

(9,364)

11,818

42,574

11,958

Inventories - owned

(127,264)

(156,993)

(316,023)

(230,023)

Inventories - not owned

(6,629)

(4,770)

(14,794)

(9,710)

Other assets

(1,142)

(3,083)

(1,975)

(1,254)

Accounts payable

4,773

1,198

6,149

(380)

Accrued liabilities

8,961

16,346

(12,379)

6,239

Net cash provided by (used in) operating activities

(25,949)

(90,743)

(143,512)

(149,204)

Cash Flows From Investing Activities:

Investments in unconsolidated homebuilding joint ventures

(2,890)

(8,200)

(5,677)

(10,752)

Distributions of capital from unconsolidated joint ventures

       ―   

249

14,808

1,569

Net cash paid for acquisitions

(33,408)

(113,793)

(33,408)

(113,793)

Other investing activities

248

(3,509)

(1,487)

(3,878)

Net cash provided by (used in) investing activities

(36,050)

(125,253)

(25,764)

(126,854)

Cash Flows From Financing Activities:

Change in restricted cash

(4,687)

2,725

(9,925)

2,063

Principal payments on secured project debt and other notes payable

(171)

(124)

(1,061)

(7,217)

Principal payments on senior notes payable

(4,971)

       ―   

(4,971)

       ―   

Net proceeds from (payments on) mortgage credit facilities

14,082

3,688

(34,288)

4,805

Payment of issuance costs in connection with preferred shareholder equity transaction

       ―   

(347)

       ―   

(347)

Proceeds from the exercise of stock options

173

4,377

3,769

10,835

Net cash provided by (used in) financing activities

4,426

10,319

(46,476)

10,139

Net increase (decrease) in cash and equivalents

(57,573)

(205,677)

(215,752)

(265,919)

Cash and equivalents at beginning of period

205,112

286,313

363,291

346,555

Cash and equivalents at end of period

$

147,539

$

80,636

$

147,539

$

80,636

Cash and equivalents at end of period

$

147,539

$

80,636

$

147,539

$

80,636

Homebuilding restricted cash at end of period

31,385

25,462

31,385

25,462

Financial services restricted cash at end of period

1,295

1,795

1,295

1,795

Cash and equivalents and restricted cash at end of period

$

180,219

$

107,893

$

180,219

$

107,893

 

REGIONAL OPERATING DATA

Three Months Ended June 30,

2014

2013

% Change

Homes

ASP

Homes

ASP

Homes

ASP

(Dollars in thousands)

New homes delivered:

California

439

$

662

419

$

538

5%

23%

Arizona

60

309

57

249

5%

24%

Texas

179

466

155

399

15%

17%

Colorado

58

510

38

441

53%

16%

Southwest

297

443

250

371

19%

19%

Florida

265

368

239

261

11%

41%

Carolinas

235

306

187

289

26%

6%

Southeast

500

339

426

273

17%

24%

Consolidated total

1,236

479

1,095

397

13%

21%

Unconsolidated joint ventures

―    

―   

7

474

(100%)

―   

Total (including joint ventures)

1,236

$

479

1,102

$

397

12%

21%

 

Six Months Ended June 30,

2014

2013

% Change

Homes

ASP

Homes

ASP

Homes

ASP

(Dollars in thousands)

New homes delivered:

California

778

$

645

819

$

515

(5%)

25%

Arizona

123

307

120

249

3%

23%

Texas

328

443

288

375

14%

18%

Colorado

111

498

81

419

37%

19%

Southwest

562

424

489

352

15%

20%

Florida

500

360

422

260

18%

38%

Carolinas

391

303

312

275

25%

10%

Southeast

891

335

734

266

21%

26%

Consolidated total

2,231

466

2,042

387

9%

20%

Unconsolidated joint ventures

―   

21

498

(100%)

―   

Total (including joint ventures)

2,231

$

466

2,063

$

388

8%

20%

 

Three Months Ended June 30,

2014

2013

% Change

Homes

ASP

Homes

ASP

Homes

ASP

(Dollars in thousands)

Net new orders:

California

498

$

611

513

$

590

(3%)

4%

Arizona

75

309

78

321

(4%)

(4%)

Texas

359

436

216

411

66%

6%

Colorado

75

526

65

460

15%

14%

Southwest

509

431

359

400

42%

8%

Florida

258

420

443

331

(42%)

27%

Carolinas

259

314

201

275

29%

14%

Southeast

517

367

644

313

(20%)

17%

Consolidated total

1,524

468

1,516

428

1%

9%

Unconsolidated joint ventures

 ―

1

646

(100%)

Total (including joint ventures)

1,524

$

468

1,517

$

428

0%

9%

 

Six Months Ended June 30,

2014

2013

% Change

Homes

ASP

Homes

ASP

Homes

ASP

(Dollars in thousands)

Net new orders:

California

971

$

628

995

$

563

(2%)

12%

Arizona

142

307

153

302

(7%)

2%

Texas

594

447

458

397

30%

13%

Colorado

128

507

127

442

1%

15%

Southwest

864

433

738

385

17%

12%

Florida

541

407

736

316

(26%)

29%

Carolinas

459

311

441

272

4%

14%

Southeast

1,000

363

1,177

299

(15%)

21%

Consolidated total

2,835

475

2,910

411

(3%)

16%

Unconsolidated joint ventures

10

538

(100%)

   ―

Total (including joint ventures)

2,835

$

475

2,920

$

412

(3%)

15%

 

Three Months Ended June 30,

Six Months Ended June 30,

2014

2013

% Change

2014

2013

% Change

Average number of selling communities 

  during the period:

California

48

46

4%

47

46

2%

Arizona

10

9

11%

10

8

25%

Texas

38

30

27%

37

30

23%

Colorado

11

8

38%

11

7

57%

Southwest

59

47

26%

58

45

29%

Florida

45

41

10%

43

39

10%

Carolinas

31

30

3%

31

31

        ―  

Southeast

76

71

7%

74

70

6%

Consolidated total

183

164

12%

179

161

11%

 

At June 30,

2014

2013

% Change

Homes

Dollar Value

Homes

Dollar Value

Homes

Dollar Value

(Dollars in thousands)

Backlog:

California

589

$

378,962

616

$

366,617

(4%)

3%

Arizona

124

43,678

110

36,330

13%

20%

Texas

556

261,384

374

156,036

49%

68%

Colorado

125

67,005

121

57,425

3%

17%

Southwest

805

372,067

605

249,791

33%

49%

Florida

545

262,827

680

220,621

(20%)

19%

Carolinas

365

125,030

371

110,555

(2%)

13%

Southeast

910

387,857

1,051

331,176

(13%)

17%

Consolidated total

2,304

1,138,886

2,272

947,584

1%

20%

Unconsolidated joint ventures

―    

―   

1

586

(100%)

(100%)

Total (including joint ventures)

2,304

$

1,138,886

2,273

$

948,170

1%

20%

 

At June 30,

2014

2013

% Change

Homesites owned and controlled:

     California

9,603

10,150

(5%)

   Arizona

2,242

1,975

14%

   Texas

5,204

5,220

(0%)

   Colorado

1,196

1,268

(6%)

   Nevada

1,124

1,124

          ―   

            Southwest

9,766

9,587

2%

   Florida

12,138

10,481

16%

   Carolinas

4,441

4,908

(10%)

            Southeast

16,579

15,389

8%

   Total (including joint ventures)

35,948

35,126

2%

Homesites owned

28,774

27,497

5%

Homesites optioned or subject to contract 

6,909

7,039

(2%)

Joint venture homesites

265

590

(55%)

Total (including joint ventures)

35,948

35,126

2%

Homesites owned:

Raw lots

6,747

7,300

(8%)

Homesites under development

9,373

8,027

17%

Finished homesites

6,605

5,865

13%

Under construction or completed homes

3,548

2,908

22%

Held for sale

2,501

3,397

(26%)

Total

28,774

27,497

5%

 

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, 2014

Gross Margin %

June 30, 2013

Gross Margin %

March 31,  2014

Gross Margin %

(Dollars in thousands)

Home sale revenues

$

591,706

$

434,308

$

446,918

Less: Cost of home sales

(434,196)

(331,503)

(328,245)

Gross margin from home sales

157,510

26.6%

102,805

23.7%

118,673

26.6%

Add: Capitalized interest included in cost of home sales

29,812

5.1%

30,337

7.0%

24,368

5.4%

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

$

187,322

31.7%

$

133,142

30.7%

$

143,041

32.0%

 

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.  In addition, the table set forth below calculates homebuilding debt to adjusted homebuilding EBITDA.  We believe these ratios are 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, 2014

March 31, 2014

December 31, 2013

June 30, 2013

(Dollars in thousands)

Total consolidated debt

$

1,901,416

$

1,892,491

$

1,940,462

$

1,633,985

Less:

        Financial services indebtedness

(66,579)

(52,497)

(100,867)

(96,964)

        Homebuilding cash

(161,121)

(221,400)

(376,949)

(90,589)

Adjusted net homebuilding debt

1,673,716

1,618,594

1,462,646

1,446,432

Stockholders' equity

1,572,583

1,513,087

1,468,960

1,337,468

Total adjusted book capitalization

$

3,246,299

$

3,131,681

$

2,931,606

$

2,783,900

Total consolidated debt to book capitalization

54.7%

55.6%

56.9%

55.0%

Adjusted net homebuilding debt to total adjusted book capitalization

51.6%

51.7%

49.9%

52.0%

Homebuilding debt

$

1,834,837

$

1,537,021

LTM adjusted homebuilding EBITDA

452,160

266,524

Homebuilding debt to adjusted homebuilding EBITDA

 4.1x 

 5.8x 

 

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,

2014

2014

2013

Actual common shares outstanding

279,287,853

278,776,082

277,618,177

Add: Conversion of preferred shares to common shares

87,812,786

87,812,786

87,812,786

Pro forma common shares outstanding

367,100,639

366,588,868

365,430,963

Stockholders' equity (Dollars in thousands)

$

1,572,583

$

1,513,087

$

1,468,960

Divided by pro forma common shares outstanding

÷

367,100,639

÷

366,588,868

÷

365,430,963

Pro forma stockholders' equity per common share

$

4.28

$

4.13

$

4.02

 

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, 2014

June 30, 2013

March 31, 2014

2014

2013

(Dollars in thousands)

Net income 

$

56,463

$

43,136

$

38,159

$

218,377

$

573,595

Provision (benefit) for income taxes

35,383

8,008

23,456

106,245

(432,033)

Homebuilding interest amortized to cost of sales and interest expense

29,816

30,662

24,983

118,030

121,658

Homebuilding depreciation and amortization

1,224

702

1,145

4,494

2,537

Amortization of stock-based compensation

2,859

2,444

2,372

10,271

8,167

EBITDA

125,745

84,952

90,115

457,417

273,924

Add:

Cash distributions of income from unconsolidated joint ventures

1,875

1,500

       ―  

1,875

7,125

Less:

Income (loss) from unconsolidated joint ventures

(462)

147

(437)

(1,231)

1,859

Income from financial services subsidiary

2,352

3,929

1,544

8,363

12,666

Adjusted Homebuilding EBITDA

$

125,730

$

82,376

$

89,008

$

452,160

$

266,524

Homebuilding revenues

$

592,486

$

438,681

$

460,199

$

2,170,892

$

1,534,786

Adjusted Homebuilding EBITDA Margin %

21.2%

18.8%

19.3%

20.8%

17.4%

 

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, 2014

June 30, 2013

March 31, 2014

2014

2013

(Dollars in thousands)

Net cash provided by (used in) operating activities

$

(25,949)

$

(90,743)

$

(117,563)

$

(148,524)

$

(333,602)

Add:

Provision (benefit) for income taxes

35,383

199

23,456

114,054

(439,842)

Deferred income tax benefit (provision)

(35,383)

        ―   

(23,622)

(129,845)

440,626

Homebuilding interest amortized to cost of sales and interest expense

29,816

30,662

24,983

118,030

121,658

Less:

Income from financial services subsidiary

2,352

3,929

1,544

8,363

12,666

Depreciation and amortization from financial services subsidiary

34

28

33

132

120

Loss on disposal of property and equipment

        ―   

1

1

2

50

Net changes in operating assets and liabilities:

Trade and other receivables

(6,416)

10,732

17,549

(5,271)

11,385

Mortgage loans held for sale

9,364

(11,818)

(51,938)

(28,073)

38,484

Inventories-owned

127,264

156,993

188,759

501,312

430,475

Inventories-not owned

6,629

4,770

8,165

48,403

37,762

Other assets

1,142

3,083

833

(244)

(1,441)

Accounts payable 

(4,773)

(1,198)

(1,376)

(19,854)

(5,690)

Accrued liabilities

(8,961)

(16,346)

21,340

10,669

(20,455)

Adjusted Homebuilding EBITDA

$

125,730

$

82,376

$

89,008

$

452,160

$

266,524

 

SOURCE Standard Pacific Corp.