Standard Pacific Corp. Reports 2009 Fourth Quarter and Full Year Results
IRVINE, Calif., Feb. 3, 2010 /PRNewswire-FirstCall/ -- Standard Pacific Corp. (NYSE: SPF) today announced operating results for its fourth quarter ended December 31, 2009. Homebuilding revenues for the quarter were $339.8 million, down 10% from $376.4 million for the fourth quarter of last year. The Company generated net income of $82.7 million, or $0.31 per diluted share, for the 2009 fourth quarter compared to a net loss of $397.8 million, or $1.65 per diluted share, for the year earlier period. Net income for the 2009 fourth quarter included an income tax benefit of $94.1 million related to recently enacted tax legislation that extended the carryback of net operating losses from two years to five years. The 2009 fourth quarter results included asset impairment charges of $11.2 million versus $443.6 million in the prior year quarter and also included $5.1 million in debt refinancing and other restructuring charges. Excluding asset impairment and restructuring charges and the tax benefit, the Company generated net income of $4.0 million* during the 2009 fourth quarter.
Homebuilding revenues for the year ended December 31, 2009 were $1.17 billion versus $1.54 billion in the prior year. The Company generated a net loss of $13.8 million, or $0.06 per diluted share, for 2009, compared to a net loss of $1.23 billion, or $9.14 per diluted share, for 2008.
The Company's average home price for the fourth quarter was up 5% to $318,000 versus $302,000 for the 2009 third quarter and down 3% from the prior year quarter. On a same plan community basis, which adjusts for shifts in product mix, the fourth quarter average home price was up 1% over the 2009 third quarter and down 5% versus the 2008 fourth quarter. Gross margin from home sales for the fourth quarter was 18.1% versus 18.6% for the 2009 third quarter and, excluding impairments, was 20.3%* versus 18.6%* for the same periods.
The Company generated $100.9 million of cash flows from operations during the 2009 fourth quarter which included $39.3 million of proceeds from land sales and $35.3 million in land purchases. For the full year 2009, the Company generated $411.1 million of cash flows from operations and ended the year with $602.2 million of homebuilding cash (including $15.1 million of restricted cash). Excluding land purchases and proceeds from land sales, cash flows from operations for the year ended December 31, 2009 were $372.1 million*. In addition, the Company expects to receive a $103 million federal tax refund during the 2010 first quarter.
The Company reduced the principal amount of its homebuilding debt during 2009 by $322 million, from $1.51 billion to $1.19 billion. Homebuilding debt due before 2013 declined from $838 million to $239 million, and the Company ended the year with an adjusted net homebuilding debt to total adjusted book capital ratio of 56.0%* versus 67.8%* as of December 31, 2008. Unconsolidated joint venture recourse debt was reduced by $135.1 million during the year, bringing total joint venture recourse debt to $38.8 million as of December 31, 2009.
Ken Campbell, the Company's President and CEO stated, "We are pleased with our fourth quarter results, particularly with the improvement in our gross margin and average selling price as compared to the 2009 third quarter, as well as with the significant level of cash generation we achieved. Notwithstanding the challenging economic and housing market conditions that exist, we look ahead to 2010 with the goals of returning to profitability and rebuilding our land portfolio."
Mr. Campbell continued, "With over $600 million of cash, an anticipated tax refund in excess of $100 million and our ability to generate cash flows from operations, we believe we are well positioned to support our growth prospects and to withstand a further decline if the market takes longer to recover."
Homebuilding Operations
The Company's homebuilding pretax loss of $14.2 million for the 2009 fourth quarter included $11.2 million of asset impairment charges, $3.5 million of loss on early extinguishment of debt and $1.6 million in restructuring charges. The decrease in quarterly pretax loss from $445.5 million in the 2008 fourth quarter was primarily the result of a $432.4 million decrease in impairment charges and a $20.6 million decrease in the Company's selling, general and administrative ("SG&A") expenses. These improvements were partially offset by a $5.6 million increase in non-capitalized interest expense from $6.4 million to $12.0 million.
Revenues and Average Selling Price
Homebuilding revenues decreased 10% from the 2008 fourth quarter to $339.8 million during the 2009 fourth quarter primarily due to an 18% decrease in new home deliveries to 943 homes (exclusive of joint ventures) and a 3% decline in consolidated average home price to $318,000. These decreases were offset in part by a $39.2 million increase in land sale revenues as compared to the 2008 fourth quarter. The 2009 fourth quarter land sale revenues included $34.8 million attributable to the bulk sale of a finished podium project in Southern California, which resulted in a $2.9 million loss that was included in cost of land sales as an inventory impairment charge.
The year over year decrease in the fourth quarter average home price was primarily due to general price declines offset in part by a slight mix shift to more California deliveries. The Company's 2009 fourth quarter average home price increased 5% to $318,000 as compared to $302,000 for the 2009 third quarter. The increase was primarily due to a greater distribution of homes delivered within California during the fourth quarter at higher average home prices.
Gross Margin
The Company's homebuilding gross margin (including land sales) for the 2009 fourth quarter was 15.3% compared to a negative 78.6% in the prior year quarter. The 2009 fourth quarter gross margin included $10.9 million in inventory impairment charges, of which $6.6 million was included in cost of home sales related to one Southern California project and $4.3 million was included in cost of land sales related to a parcel of land in Florida and the sale of a Southern California podium project. Excluding land sales and the inventory impairment charges, the Company's 2009 fourth quarter gross margin from home sales was 20.3%* versus 21.6%* for the 2008 fourth quarter and 18.6%* for the 2009 third quarter. The Company's 2008 fourth quarter gross margin from home sales benefited from a $10.7 million reduction in its warranty accrual. The 170 basis point improvement in the 2009 fourth quarter gross margin from homes sales as compared to the 2009 third quarter was largely the result of a larger mix of California deliveries in the 2009 fourth quarter, lower direct construction costs and, to a lesser extent, price increases primarily in California. Adjusted gross margins from homes sales excluding impairments and previously capitalized interest included in cost of home sales for the 2009 fourth quarter was 26.9%* versus 24.3%* for the 2009 third quarter.
SG&A
The Company's 2009 fourth quarter SG&A expenses (including Corporate G&A) decreased $20.6 million, from $70.0 million to $49.4 million, or 29%, from the year earlier period resulting in an SG&A rate of 14.5% versus 18.6% for the prior year period. The Company's 2009 fourth quarter SG&A expenses included approximately $1.0 million in restructuring charges related primarily to severance and lease terminations versus $13.8 million in the prior year quarter. Excluding land sale revenues and restructuring charges, the Company's 2009 fourth quarter SG&A rate was 16.1%* compared to 15.0%* in the 2008 fourth quarter. The higher SG&A rate was primarily due to a $7.0 million expense recorded during the 2009 fourth quarter related to incentive compensation (of which $4.1 million represented stock-based compensation). The 2008 fourth quarter SG&A rate benefited from the reversal of $9.5 million of incentive compensation expense. Adjusting the SG&A rate further to exclude the impact of compensation expense related to annual bonuses for these periods, our SG&A rate would have been 13.8%* for the 2009 fourth quarter versus 17.5%* for the year earlier period. The 2009 fourth quarter also included the amortization of $1.5 million in other stock-based compensation expense versus $778,000 in the year earlier period.
Net New Orders and Backlog
Net new orders (excluding joint ventures and discontinued operations) for the 2009 fourth quarter increased 1% from the 2008 fourth quarter to 547 new homes on a 28% decrease in the number of average active selling communities from 172 in the 2008 fourth quarter to 124 for the 2009 fourth quarter. The Company's monthly sales absorption rate for the 2009 fourth quarter was 1.5 per community, up from the prior year fourth quarter rate of 1.0 per community, but down from 2.2 per community for the 2009 third quarter. The Company's cancellation rate for the three months ended December 31, 2009 was 21%, down from 33% for the 2008 fourth quarter, but up from 15% for the 2009 third quarter. The Company's cancellation rate as a percentage of beginning backlog was 15% for the 2009 fourth quarter, compared to 21% in the year earlier period and 17% in the 2009 third quarter.
The dollar value of the Company's backlog (excluding joint ventures) increased 7% to $207.9 million, or 599 homes, as compared to the 2008 fourth quarter value, but was down 37% from the 2009 third quarter backlog value.
Earnings Conference Call
A conference call to discuss the Company's 2009 fourth quarter will be held at 1:00 p.m. Eastern Time Thursday, February 4, 2010. The call will be broadcast live over the Internet and can be accessed through the Company's website at http://standardpacifichomes.com/ir. The call will also be accessible via telephone by dialing (888) 599-4883 (domestic) or (913) 312-1475 (international); Passcode: 8400892. The entire audio transmission with the synchronized 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: 8400892.
About Standard Pacific
Standard Pacific, one of the nation's largest homebuilders, has built more than 110,000 homes during its 44-year history. The Company constructs homes within a wide range of price and size targeting a broad range of homebuyers. Standard Pacific operates in many of the largest housing markets in the country with operations in major metropolitan areas in California, Florida, Arizona, the Carolinas, Texas, Colorado and Nevada. For more information about the Company and its new home developments, please visit our website at: www.standardpacifichomes.com.
This news release contains forward-looking statements. These statements include but are not limited to our ability to rebuild our land portfolio; statements regarding trends in new home orders, deliveries, average home price and backlog; anticipated cash flows and future profitability; the sufficiency of our liquidity to support growth and to withstand further market declines; an expected tax refund; the value of our deferred tax asset; and the future condition of 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 of 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 credit agreements, public notes, and private term loans and our ability to comply with their covenants and repay such debt as it comes due; a negative change 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, 2008 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:
John Stephens, SVP & CFO (949) 789-1641, [email protected]
*Please see "Reconciliation of Non-GAAP Financial Measures" on page 10.
(Note: Tables follow)
KEY STATISTICS AND FINANCIAL DATA**
Operating Data
As of or For the Three Months Ended
-------------------------------------------------------------
% or % or
December 31, December 31, Percentage September 30, Percentage
2009 2008 Change 2009 Change
-------- -------- ------ -------- ------
(Dollars in thousands, except average selling price)
Deliveries
(1) 943 1,146 (18%) 893 6%
Average
selling
price (1) $318,000 $328,000 (3%) $302,000 5%
Homebuilding
revenues $339,779 $376,399 (10%) $327,411 4%
Gross
margin % 15.3% (78.6%) 93.9% 13.0% 2.3%
Gross
margin %
from
home sales
(excluding
impairments)* 20.3% 21.6% (1.3%) 18.6% 1.7%
Impairments
and write-
offs $11,192 $443,646 (97%) $7,814 43%
Restructuring
charges $1,637 $17,563 (91%) $1,315 24%
SG&A % 14.5% 18.6% (4.1%) 13.3% 1.2%
SG&A %
(excluding
restructuring
charges
and
land sales)* 16.1% 15.0% 1.1% 15.6% 0.5%
Net new
orders (1) 547 539 1% 893 (39%)
Average
active
selling
communities (1) 124 172 (28%) 134 (7%)
Monthly sales
absorption
rate per
community (1) 1.5 1.0 50% 2.2 (32%)
Cancellation
rate (1) 21% 33% (12%) 15% 6%
Backlog
(homes) (1) 599 642 (7%) 995 (40%)
Backlog
(dollar
value)
(1) $207,887 $193,440 7% $329,661 (37%)
Cash flows
(uses) from
operating
activities $100,901 $65,188 55% $112,572 (10%)
Cash flows
(uses) from
investing
activities $(6,432) $(27,999) (77%) $(9,241) (30%)
Cash flows
(uses) from
financing
activities $(28,915) $(123,985) (77%) $(147,732) (80%)
Land
purchases
(excl.
JV unwinds) $35,256 $27,847 27% $21,595 63%
Land sale
proceeds $39,273 $1,405 2,695% $56,273 (30%)
Adjusted
Homebuilding
EBITDA (2) $49,471 $38,607 28% $31,749 56%
Homebuilding
interest
incurred $26,566 $25,760 3% $26,218 1%
Homebuilding
interest
capitalized
to
inventories
owned $13,901 $18,464 (25%) $12,836 8%
Homebuilding
interest
capitalized to
investments in
unconsolidated
joint
ventures $616 $854 (28%) $749 (18%)
For the Year Ended
--------------------------------------
% or
December 31, December 31, Percentage
2009 2008 Change
---- ---- ------
(Dollars in thousands,
except average selling price)
Deliveries (1) 3,465 4,607 (25%)
Average selling price (1) $306,000 $330,000 (7%)
Homebuilding revenues $1,166,397 $1,535,616 (24%)
Gross margin % 12.2% (45.4%) 57.6%
Gross margin % from home sales
(excluding impairments)* 18.8% 15.9% 2.9%
Impairments and write-offs $71,081 $1,153,530 (94%)
Restructuring charges $22,575 $25,143 (10%)
SG&A % 16.4% 19.9% (3.5%)
SG&A % (excluding restructuring
charges
and land sales)* 16.3% 18.8% (2.5%)
Net new orders (1) 3,343 3,946 (15%)
Monthly sales absorption rate per
community (1) 2.0 1.7 18%
Cancellation rate (1) 18% 26% (8%)
Average active selling communities
(1) 140 192 (27%)
Cash flows (uses) from operating
activities $411,066 $263,151 56%
Cash flows (uses) from investing
activities $(27,301) $(11,579) 136%
Cash flows (uses) from financing
activities $(414,051) $142,712 (390%)
Land purchases (excl. JV unwinds) $64,804 $146,967 (56%)
Land sale proceeds $103,770 $15,709 561%
Adjusted Homebuilding EBITDA (2) $116,252 $43,885 165%
KEY STATISTICS AND FINANCIAL DATA (Continued)**
Balance Sheet Data
As of
---------------------------------------------------
December September % or December % or
31, 30, Percentage 31, Percentage
2009 2009 Change 2008 Change
---- ---- ------ ---- ------
(Dollars in thousands, except per share amounts)
Homebuilding cash
(including restricted
cash) $602,222 $806,766 (25%) $626,379 (4%)
Inventories owned $986,322 $1,074,153 (8%) $1,262,521 (22%)
Building sites
owned or controlled 19,191 20,020 (4%) 24,136 (20%)
Homes under
construction (1) 934 1,106 (16%) 1,326 (30%)
Completed specs
(excluding
podium projects) (1) 233 163 43% 589 (60%)
Completed specs
- podium projects (1) 49 193 (75%) - -
Deferred tax asset
valuation allowance $534,596 $691,464 (23%) $654,107 (18%)
Homebuilding debt $1,156,726 $1,451,336 (20%) $1,486,437 (22%)
Joint venture
recourse debt $38,835 $45,189 (14%) $173,894 (78%)
Stockholders' equity $435,798 $349,591 25% $407,941 7%
Stockholders'
equity per share
(including if-
converted
preferred stock) (3) $1.75 $1.40 25% $1.70 3%
Total debt to book
capitalization (4) 73.4% 81.0% (7.6%) 79.2% (5.8%)
Adjusted net
homebuilding debt
to total adjusted
book capitalization* 56.0% 64.8% (8.8%) 67.8% (11.8%)
* Please see "Reconciliation of Non-GAAP Financial Measures" beginning on
page 10.
** Please see "Notes to Key Statistics and Financial Data" beginning on
page 12.
STANDARD PACIFIC CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(2008 as Adjusted(1))
Three Months Ended Year Ended
December 31, December 31,
---------------- ----------------
2009 2008 2009 2008
---- ---- ---- ----
(Dollars in thousands, except per share amounts)
Homebuilding:
Home sale revenues $300,190 $376,032 $1,060,502 $1,521,640
Land sale revenues 39,589 367 105,895 13,976
-------- -------- ---------- ----------
Total revenues 339,779 376,399 1,166,397 1,535,616
-------- -------- ---------- ----------
Cost of home sales (245,847) (645,104) (907,058) (2,107,758)
Cost of land sales (41,939) (27,082) (117,517) (124,786)
-------- -------- ---------- ----------
Total cost of sales (287,786) (672,186) (1,024,575) (2,232,544)
Gross margin 51,993 (295,787) 141,822 (696,928)
-------- -------- ---------- ----------
Gross margin % 15.3% (78.6%) 12.2% (45.4%)
-------- -------- ---------- ----------
Selling, general and
administrative expenses (49,388) (70,007) (191,488) (305,480)
Loss from unconsolidated
joint ventures (268) (21,407) (4,717) (151,729)
Interest expense (12,049) (6,442) (47,458) (10,380)
Loss on
early extinguishment of
debt (3,474) (4,356) (6,931) (15,695)
Other income (expense) (987) (47,483) (2,296) (57,628)
-------- -------- ---------- ----------
Homebuilding pretax
loss (14,173) (445,482) (111,068) (1,237,840)
-------- -------- ---------- ----------
Financial Services:
Revenues 3,050 2,690 13,145 13,587
Expenses (2,808) (2,596) (11,817) (13,659)
Income from unconsolidated
joint ventures - 195 119 854
Other income 31 106 139 234
-------- -------- ---------- ----------
Financial services
pretax income 273 395 1,586 1,016
-------- -------- ---------- ----------
Loss from continuing
operations before
income taxes (13,900) (445,087) (109,482) (1,236,824)
Benefit for income taxes 96,563 47,525 96,265 5,495
-------- -------- ---------- ----------
Income (loss) from
continuing operations 82,663 (397,562) (13,217) (1,231,329)
Loss from discontinued
operations, net of income
taxes - (281) (569) (2,286)
-------- -------- ---------- ----------
Net income (loss) 82,663 (397,843) (13,786) (1,233,615)
Less: Net (income) loss
allocated to preferred
stockholders (49,060) 244,518 8,371 489,229
-------- -------- ---------- ----------
Net income (loss) available
to common stockholders $33,603 $(153,325) $(5,415) $(744,386)
======== ========= ========== ==========
Basic earnings (loss) per
common share:
Continuing operations $0.33 $(1.65) $(0.06) $(9.12)
Discontinued operations - - - (0.02)
-------- -------- ---------- ----------
Basic earnings (loss) per
common share $0.33 $(1.65) $(0.06) $(9.14)
======== ========= ========== ==========
Diluted earnings (loss) per
common share:
Continuing operations $0.31 $(1.65) $(0.06) $(9.12)
Discontinued operations - - - (0.02)
-------- -------- ---------- ----------
Diluted earnings (loss) per
common share $0.31 $(1.65) $(0.06) $(9.14)
======== ========= ========== ==========
Weighted average common
shares outstanding:
Basic 101,239,928 92,686,226 95,623,851 81,439,248
Diluted 109,348,514 92,686,226 95,623,851 81,439,248
Weighted average if-
converted preferred
shares outstanding 147,812,786 147,812,786 147,812,786 53,523,829
-------------------
(1) Certain 2008 amounts have been retroactively adjusted to reflect the
adoption of certain provisions of ASC Topic 470, "Debt."
STANDARD PACIFIC CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amounts)
(2008 as Adjusted(1))
December 31,
--------------------
2009 2008
---- ----
ASSETS (unaudited)
Homebuilding:
Cash and equivalents $587,152 $622,157
Restricted cash 15,070 4,222
Trade and other receivables 12,676 21,008
Inventories:
Owned 986,322 1,262,521
Not owned 11,770 42,742
Investments in unconsolidated joint
ventures 40,415 50,468
Deferred income taxes 9,431 14,122
Other assets 131,086 145,567
------- -------
1,793,922 2,162,807
--------- ---------
Financial Services:
Cash and equivalents 8,407 3,681
Restricted cash 3,195 4,295
Mortgage loans held for sale 41,048 63,960
Mortgage loans held for investment 10,818 11,736
Other assets 3,621 4,792
----- -----
67,089 88,464
------ ------
Assets of discontinued operations - 1,217
--- -----
Total Assets $1,861,011 $2,252,488
========== ==========
LIABILITIES AND EQUITY
Homebuilding:
Accounts payable $22,702 $40,225
Accrued liabilities 196,135 216,418
Liabilities from inventories not owned 3,713 24,929
Revolving credit facility - 47,500
Secured project debt and other notes
payable 59,531 111,214
Senior notes payable 993,018 1,204,501
Senior subordinated notes payable 104,177 123,222
------- -------
1,379,276 1,768,009
--------- ---------
Financial Services:
Accounts payable and other liabilities 1,436 3,657
Mortgage credit facilities 40,995 63,655
------ ------
42,431 67,312
------ ------
Liabilities of discontinued operations - 1,331
--- -----
Total Liabilities 1,421,707 1,836,652
--------- ---------
Equity:
Stockholders' Equity:
Preferred stock, $0.01 par value;
10,000,000 shares authorized; 450,829
shares issued and outstanding at
December 31, 2009 and 2008,
respectively 5 5
Common stock, $0.01 par value;
600,000,000 shares authorized;
105,293,180 and 100,624,350 shares
issued and outstanding at December 31,
2009 and 2008, respectively 1,053 1,006
Additional paid-in capital 1,030,664 996,492
Accumulated deficit (580,628) (566,842)
Accumulated other comprehensive loss,
net of tax (15,296) (22,720)
------- -------
Total Stockholders' Equity 435,798 407,941
Noncontrolling Interests 3,506 7,895
----- -----
Total Equity 439,304 415,836
------- -------
Total Liabilities and Equity $1,861,011 $2,252,488
========== ==========
(1) Certain 2008 amounts have been retroactively adjusted to reflect the
adoption of certain provisions of ASC Topic 470, "Debt."
REGIONAL OPERATING DATA
Three Months Ended December 31,
-----------------------------------
2009 2008
---------------- ----------------
Avg. Avg.
Selling Selling
Homes Price Homes Price
----- -------- ----- --------
New homes delivered:
California 396 $447,000 460 $464,000
Arizona 94 211,000 104 208,000
Texas (1) 91 293,000 157 282,000
Colorado 34 305,000 49 312,000
Nevada 2 222,000 7 261,000
Florida 194 192,000 237 203,000
Carolinas 132 218,000 132 238,000
--- ------- --- -------
Consolidated total 943 318,000 1,146 328,000
Unconsolidated joint
ventures 20 486,000 48 587,000
Discontinued operations - - 1 260,000
--- --- --- -------
Total (including joint
ventures) 963 $322,000 1,195 $338,000
=== ======== ===== ========
Year Ended December 31,
-----------------------------------
2009 2008
---------------- ----------------
Avg. Avg.
Selling Selling
Homes Price Homes Price
----- -------- ----- --------
New homes delivered:
California 1,344 $434,000 1,668 $475,000
Arizona 303 211,000 540 228,000
Texas (1) 419 282,000 677 280,000
Colorado 147 305,000 229 348,000
Nevada 15 225,000 62 285,000
Florida 797 190,000 883 209,000
Carolinas 440 218,000 548 246,000
--- ------- --- -------
Consolidated total 3,465 306,000 4,607 330,000
Unconsolidated joint
ventures 112 517,000 270 525,000
Discontinued operations 4 201,000 148 175,000
--- ------- --- -------
Total (including joint
ventures) 3,581 $313,000 5,025 $336,000
===== ======== ===== ========
Three Months Ended December 31,
-----------------------------------------------------
2009 2008
------------------- ---------------------
% Change
Avg. Selling Avg. Selling Same
Homes Communities Homes Communities Store
----- ---------- ----- ------------ ----------
Net new orders:
California 219 45 229 55 17%
Arizona 39 6 40 12 95%
Texas (1) 63 19 68 27 32%
Colorado 28 6 24 7 36%
Nevada 1 1 (3) 2 (167%)
Florida 111 24 123 41 54%
Carolinas 86 23 58 28 81%
--- --- --- --- ---
Consolidated
total 547 124 539 172 41%
Unconsolidated
joint ventures 7 4 26 11 (26%)
Discontinued
operations - - 2 - -
--- --- --- --- ---
Total (including
joint ventures) 554 128 567 183 40%
=== === === === ===
Year Ended December 31,
------------------------------------------------------
2009 2008
-------------------- --------------------
Avg. Selling Avg. Selling % Change
Homes Communities Homes Communities Same Store
----- ---------- ----- ------------ -----------
Net new orders:
California 1,358 50 1,495 63 14%
Arizona 274 8 422 15 22%
Texas (1) 398 19 506 29 20%
Colorado 123 6 184 8 (11%)
Nevada 11 2 37 3 (55%)
Florida 728 31 810 45 30%
Carolinas 451 24 492 29 11%
--- --- --- --- ---
Consolidated
total 3,343 140 3,946 192 16%
Unconsolidated
joint ventures 174 7 197 12 51%
Discontinued
operations 3 - 105 2 -
--- --- --- --- ---
Total (including
joint ventures) 3,520 147 4,248 206 16%
===== === ===== === ===
At December 31,
-------------------------------------
2009 2008
----------------- ----------------
Backlog ($ in thousands): Homes Value Homes Value
----- -------- ----- -------
California 247 $117,536 154 $69,522
Arizona 47 9,686 76 17,083
Texas (1) 109 33,708 130 38,782
Colorado 54 15,587 78 24,017
Nevada - - 4 893
Florida 78 15,033 147 30,408
Carolinas 64 16,337 53 12,735
--- ------ --- ------
Consolidated total 599 207,887 642 193,440
Unconsolidated joint ventures 9 4,601 26 11,929
Discontinued operations - - 1 208
--- --- --- ---
Total (including joint ventures) 608 $212,488 669 $205,577
=== ======== === ========
(1) Texas excludes the San Antonio division, which is classified as a
discontinued operation.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Each of the below measures are not 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 earnings (loss) for the
three months and years ended December 31, 2009 and 2008 to earnings (loss)
excluding the after-tax impairment, restructuring, loss on early
extinguishment of debt and net deferred tax asset valuation charge
(benefit). We believe this measure is useful to investors as it provides investors with a perspective of the underlying operating performance of the business excluding these charges and provides comparability with the Company’s peer group.
Three Months Ended Year Ended
December 31, December 31,
-------------- ----------------
2009 2008 2009 2008
---- ---- ---- ----
(Dollars in thousands)
Net income
(loss) $82,663 $(397,843) $(13,786) $(1,233,615)
Add: Impairment
charges, net of
income taxes 6,917 271,511 43,573 705,960
Add:
Restructuring
charges, net of
income taxes 1,012 10,749 13,838 15,388
Add: Loss on
early
extinguishment
of debt,
net of income
taxes 2,147 2,666 4,249 15,695
Add: Net
deferred tax
asset charge
(benefit) (88,787) 124,922 (51,429) 473,627
------- ------- ------- -------
Net income
(loss), as
adjusted $3,952 $12,005 $(3,555) $(22,945)
====== ======= ======= ========
The tables set forth below reconcile the Company's homebuilding gross
margin percentage for the three months ended December 31, 2009 and 2008,
and September 30, 2009, and the years ended December 31, 2009 and 2008, to
the gross margin percentage from home sales, excluding housing inventory
impairment charges and interest amortized to cost of home sales. We believe these measures are useful to investors as they provide perspective of the underlying operating performance of the business excluding these charges and provides comparability with the Company’s peer group.
Three Months Ended
---------------------------------------------------
December December September
31, Gross 31, Gross 30, Gross
2009 Margin % 2008 Margin % 2009 Margin %
---- ----- --------- ------ ----- ------
(Dollars in thousands)
Homebuilding gross
margin $51,993 15.3% $(295,787) (78.6%) $42,623 13.0%
Less: Land sale
revenues (39,589) (367) (57,538)
Add: Cost of land
sales 41,939 27,082 65,147
------ ------ ------
Gross margin from
home sales 54,343 18.1% (269,072) (71.6%) 50,232 18.6%
Add: Housing
inventory
impairment charges 6,601 350,338 -
----- ------- ---
Gross margin from
home sales,
excluding
impairment charges 60,944 20.3% 81,266 21.6% 50,232 18.6%
Add: Capitalized
interest included
in cost
of home sales 19,769 6.6% 28,032 7.5% 15,383 5.7%
------ ------ ------
Gross margin from
home sales,
excluding
impairment charges
and interest
amortized
to cost of home
sales $80,713 26.9% $109,298 29.1% $65,615 24.3%
======= ======== =======
Year Ended December 31,
-------------------------------------------------
Gross Gross
2009 Margin % 2008 Margin %
---- -------- ---- --------
(Dollars in thousands)
Homebuilding gross
margin $141,822 12.2% $(696,928) (45.4%)
Less: Land sale
revenues (105,895) (13,976)
Add: Cost of land
sales 117,517 124,786
------- -------
Gross margin from
home sales 153,444 14.5% (586,118) (38.5%)
Add: Housing
inventory
impairment charges 46,063 827,611
------ -------
Gross margin from
home sales,
excluding
impairment charges 199,507 18.8% 241,493 15.9%
Add: Capitalized
interest included
in cost
of home sales 67,522 6.4% 83,053 5.4%
------ ------
Gross margin from
home sales,
excluding
impairment charges
and interest
amortized
to cost of home
sales $267,029 25.2% $324,546 21.3%
======== ========
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Continued)
The table set forth below reconciles the Company's SG&A rate for the three
months ended December 31, 2009 and 2008, and September 30, 2009 and for
the years ended December 31, 2009 and 2008, to the SG&A rate excluding
land sales and restructuring charges and, for the three months ended
December 31, 2009 and 2008, excluding land sales, restructuring charges
and compensation expense related to 2009 and 2008 annual bonuses. We believe these measures are useful to investors as they provide perspective on the underlying operating performance of the business excluding these charges which have had significant swings between the periods presented.
Year Ended
Three Months Ended December 31,
----------------------------------------------------
December 31, December 31, September 30,
2009 2008 2009 2009 2008
---- ---- ---- ---- ----
(Dollars in thousands)
Selling,
general
and
administrative
expenses $49,388 $70,007 $43,695 $191,488 $305,480
Less:
Restructuring
charges (980) (13,763) (1,495) (19,125) (19,179)
------- ------- ------- -------- --------
Selling, general
and administrative
expenses, excluding
restructuring
charges 48,408 56,244 $42,200 $172,363 $286,301
======= ======== ========
Less: Compensation
expense
related to
2009 and 2008
annual bonuses (7,030) 9,513
------- --------
Selling, general and
administrative
expenses, excluding
restructuring charges
and compensation
expense
related to 2009 and
2008 annual bonuses $41,378 $65,757
======= =======
SG&A % (excluding
land sales and
restructuring charges) 16.1% 15.0% 15.6% 16.3% 18.8%
======= ======= ======= ====== ======
SG&A % (excluding land
sales and
restructuring charges
and compensation
expense related to
2009 and 2008
annual bonuses) 13.8% 17.5%
====== =======
The table set forth below reconciles the Company's cash flows from
operations to cash flows from operations excluding land purchases and
proceeds from land sales. We believe this measure is useful to investors to provide perspective on underlying cash flow generation excluding swings related to the timing of land purchases and land sales.
Year Ended
Three Months Ended December 31,
--------------------------------------- ------------------
December 31, December 31, September 30,
2009 2008 2009 2009 2008
---- ---- ---- ---- ----
(Dollars in thousands)
Cash flows
from operations $100,901 $65,188 $112,572 $411,066 $263,151
Add: Land
purchases 35,256 27,847 21,595 64,804 146,967
Less:
Land sale
proceeds (39,273) (1,405) (56,273) (103,770) (15,709)
------- ------ ------- -------- -------
Cash
flows
from
operations
(excluding
land
purchases
and
land
sales) $96,884 $91,630 $77,894 $372,100 $394,409
======= ======= ======= ======== ========
The table set forth below reconciles the Company's total consolidated debt
to adjusted net homebuilding debt and provides the Company's total 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
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 included in liabilities from inventories not
owned, indebtedness of the Company's financial services subsidiary and
additionally reflects the offset of cash and equivalents.
December 31, September 30, December 31,
2009 2009 2008
---- ---- ----
(Dollars in thousands)
Total consolidated
debt $1,199,621 $1,490,134 $1,550,092
Less:
Indebtedness
included in
liabilities from
inventories not
owned (1,900) - -
Financial services
indebtedness (40,995) (38,798) (63,655)
Homebuilding cash (602,222) (806,766) (626,386)
-------- -------- --------
Adjusted net
homebuilding debt 554,504 644,570 860,051
Stockholders'
equity 435,798 349,591 407,941
------- ------- -------
Total adjusted
book
capitalization $990,302 $994,161 $1,267,992
======== ======== ==========
Total debt to book
capitalization 73.4% 81.0% 79.2%
==== ==== ====
Adjusted net
homebuilding debt
to total adjusted
book
capitalization
ratio 56.0% 64.8% 67.8%
==== ==== ====
NOTES TO KEY STATISTICS AND FINANCIAL DATA
(1) Excludes unconsolidated joint ventures and discontinued operations.
(2) 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, (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 investors as one measure
of the Company's ability to service debt and obtain financing.
However, it should be noted that Adjusted Homebuilding EBITDA is not
a U.S. generally accepted accounting principles ("GAAP") financial
measure. Due to the significance of the GAAP components excluded,
Adjusted Homebuilding EBITDA 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.
For the three months ended December 31, 2009 and 2008 and September
30, 2009, and years ended December 31, 2009 and 2008, EBITDA and
Adjusted Homebuilding EBITDA from continuing and discontinued
operations was calculated as follows:
Year Ended
Three Months Ended December 31,
--------------------------------------- ---------------
December 31, December 31, September 30,
2009 2008 2009 2009 2008
---- ---- ---- ---- ----
(Dollars in thousands)
Net income (loss) $82,663 $(397,843) $(23,844) $(13,786)$(1,233,615)
Provision (benefit)
for income taxes (96,563) (47,678) - (96,563) (6,795)
Homebuilding
interest
amortized to
cost of sales
and interest
expense 39,304 34,537 35,681 134,293 94,452
Homebuilding
depreciation
and amortization 632 1,149 672 2,839 5,851
Amortization of
stock-based
compensation 5,605 778 1,651 12,864 11,110
------- -------- ------- ------- ----------
EBITDA 31,641 (409,057) 14,160 39,647 (1,128,997)
Add:
Cash distributions
of income from
unconsolidated
joint ventures 3,139 1,204 - 3,465 1,975
Impairment charges 11,192 420,986 7,814 62,940 1,004,265
(Gain) loss on
early
extinguishment
of debt 3,474 4,356 8,824 6,931 15,695
Less:
Income (loss) from
unconsolidated
joint ventures (267) (21,212) (1,960) (4,597) (150,875)
Income (loss)
from financial
services subsidiary 242 94 1,009 1,328 (72)
------- -------- ------- ------- ----------
Adjusted Homebuilding
EBITDA $49,471 $38,607 $31,749 $116,252 $43,885
======= ======== ======= ======== ==========
The table set forth below reconciles net cash provided by (used in)
operating activities, from continuing and discontinued operations,
calculated and presented in accordance with GAAP, to Adjusted Homebuilding
EBITDA:
Year Ended
Three Months Ended December 31,
--------------------------------------- ---------------
December 31, December 31, September 30,
2009 2008 2009 2009 2008
---- ---- ---- ---- ----
(Dollars in thousands)
Net cash provided by
(used in) operating
activities $100,901 $65,188 $112,572 $411,066 $263,151
Add:
Provision
(benefit) for
income taxes (96,563) (47,678) - (96,563) (6,795)
Deferred tax
valuation
allowance 88,787 (124,922) (9,278) 51,429 (473,627)
Homebuilding
interest
amortized to
cost of sales
and interest
expense 39,304 34,537 35,681 134,293 94,452
Excess tax
benefits from
share-based
payment
arrangements 297 - - 297 -
Less:
Income (loss)
from financial
services subsidiary 242 94 1,009 1,328 (72)
Depreciation and
amortization from
financial services
subsidiary 163 185 169 678 783
Loss on disposal
of property and
equipment 1,272 1,891 1 2,611 2,792
Net changes in
operating assets
and liabilities:
Trade and
other
receivables (4,976) (11,823) (2,191) (8,440) (6,408)
Mortgage loans
held for sale (1,702) 2,977 (16,071) (24,718) (91,380)
Inventories-
owned (84,537) (59,784) (103,969) (326,062) (34,567)
Inventories-
not owned 1,343 (9,449) 324 2,805 (1,049)
Deferred income
taxes 7,775 131,861 9,277 45,133 343,754
Other assets 7,177 25,578 1,997 (109,501) (142,834)
Accounts payable 965 25,288 (540) 18,554 57,949
Accrued
liabilities (7,623) 9,004 5,126 22,576 44,742
------- ------- ------- -------- -------
Adjusted Homebuilding
EBITDA $49,471 $38,607 $31,749 $116,252 $43,885
======= ======= ======= ======== =======
NOTES TO KEY STATISTICS AND FINANCIAL DATA (Continued)
(3) The pro forma common shares outstanding include the if-converted
Series B Preferred Stock. In addition, this calculation excludes 3.9
million shares as of December 31, 2009 and September 30, 2009, and
7.8 million shares as of December 31, 2008, issued under a share
lending agreement related to the Company's 6% Convertible Senior
Subordinated Notes issued on September 28, 2007. During the 2009
third quarter, 3.9 million of the shares issued under the share
lending agreement were returned to the Company. The Company believes
that the pro forma stockholders' equity per common share information
is useful to investors as a measure to determine the book value per
common share after giving effect of the issuance of preferred shares
assuming full conversion to common stock and excluding shares
outstanding under the share lending agreement. This is a non-GAAP
financial measure and due to the significance of items adjusted and
excluded from this calculation, such measure should not be considered
in isolation or as an alternative to operating performance measures.
The following table reconciles actual common shares outstanding to
pro forma common shares outstanding used to calculate pro forma
stockholders' equity per share:
December 31, September 30, December 31,
2009 2009 2008
---- ---- ----
Actual common
shares
outstanding 105,293,180 105,119,880 100,624,350
Add: Conversion
of preferred
shares to
common shares 147,812,786 147,812,786 147,812,786
Less: Common
shares
outstanding
under share
lending
facility (3,919,904) (3,919,904) (7,839,809)
Pro forma common
shares
outstanding 249,186,062 249,012,762 240,597,327
=========== =========== ===========
Stockholders'
equity (actual
amounts rounded
to nearest
thousand) $435,798,000 $349,591,000 $407,941,000
Divided by pro
forma common
shares
outstanding / 249,186,062 / 249,012,762 / 240,597,327
----------- ----------- -----------
Pro forma
stockholders'
equity per
common share $1.75 $1.40 $1.70
===== ===== =====
(4) Total debt at December 31, 2009, September 30, 2009 and December 31,
2008 includes $41.0 million, $38.8 million and $63.7 million,
respectively, of indebtedness of the Company's financial services
subsidiary, and at December 31, 2009, includes $1.9 million of
indebtedness included in liabilities from inventories not owned.
SOURCE Standard Pacific Corp.
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