Standard Pacific Corp. Reports 2015 Second Quarter Results

Revenues increase to $694.7 million, up 17%

Q2 2015 backlog value of $1.5 billion, up 30% from Q2 2014

Jul 30, 2015, 16:04 ET from Standard Pacific Corp.

IRVINE, Calif., July 30, 2015 /PRNewswire/ -- Standard Pacific Corp. (NYSE: SPF) today announced results for the second quarter ended June 30, 2015.

2015 Second Quarter Highlights and Comparisons to 2014 Second Quarter

  • Net new orders of 1,567, up 10%; Dollar value of net new orders up 26% (excluding Q2 2014 acquisition)
  • Backlog of 2,572 homes, up 12%; Dollar value of backlog up 30%
  • 203 average active selling communities, up 11%
  • 1,305 new home deliveries, up 6%
  • Average selling price of $532 thousand, up 11%
  • Home sale revenues of $694.7 million, up 17%
  • Gross margin from home sales of 24.6%, compared to 26.6%
  • Operating margin from home sales of $90.8 million, or 13.1%, compared to $89.7 million, or 15.2%
  • Net income of $57.2 million, or $0.14 per diluted share, vs. net income of $56.5 million, or $0.14 per diluted share
  • $190.0 million of land purchases and development costs, compared to $212.0 million
  • Results include $5.2 million of transaction costs related to the proposed merger with The Ryland Group, Inc.

Scott Stowell, the Company's President and Chief Executive Officer commented, "I am pleased with our solid financial performance in the 2015 second quarter.  Our results reflect a continuation of the housing market recovery and our focus on the execution of our strategy, with backlog value, the value of our orders, and home sale revenues up 30%, 26% and 17% respectively."

Orders.  Excluding the impact of the 99 homes in backlog we acquired in connection with our June 2014 acquisition of an Austin, Texas homebuilder, net new orders for the 2015 second quarter were up 10% from the 2014 second quarter, to 1,567 homes, with the dollar value of these orders up 26%, and the Company's monthly sales absorption rate was 2.6 per community for the 2015 second quarter, flat from both the 2014 second quarter and the 2015 first quarter.  The Company's cancellation rate for the 2015 second quarter was 15% compared to 14% for the 2014 second quarter and 11% for the 2015 first quarter.

Backlog.  The dollar value of homes in backlog increased 30% to $1.5 billion, or 2,572 homes, compared to $1.1 billion, or 2,304 homes, for the 2014 second quarter, and increased 15% compared to $1.3 billion, or 2,310 homes, for the 2015 first quarter.  The increase in year-over-year backlog value was driven primarily by our continued growth in orders and a 17% increase in the average selling price of the homes in backlog, reflecting the continued execution of our move-up homebuyer focused strategy and a favorable pricing environment in a majority of our markets.

Revenue.  Revenues from home sales for the 2015 second quarter increased 17%, to $694.7 million, as compared to the prior year period, resulting primarily from an 11% increase in the Company's average home price to $532 thousand, the highest quarterly average home price in Company history, and a 6% increase in new home deliveries.  The increase in average home price was primarily attributable to a shift to more move-up product and general price increases within a majority of our markets. 

Gross Margin.  Gross margin percentage from home sales for the 2015 second quarter was 24.6%, up 40 basis points from last quarter, consistent with the Company's expectations. 

Land.  During the 2015 second quarter, the Company spent $190.0 million on land purchases and development costs, compared to $212.0 million for the 2014 second quarter. The Company purchased $98.6 million of land, consisting of 1,283 homesites, of which 53% (based on homesites) is located in Florida, 23% in the Carolinas, 12% in the California and 12% in Texas.  As of June 30, 2015, the Company owned or controlled 36,034 homesites, of which 24,693 were owned and actively selling or under development, 7,168 were controlled or under option, and the remaining 4,173 homesites were held for future development or for sale.  The homesites owned that are actively selling or under development represent a 4.9x year supply based on the Company's deliveries for the trailing twelve months ended June 30, 2015.

Liquidity.  The Company ended the quarter with $497 million of available liquidity, including $77 million of unrestricted homebuilding cash and $420 million available to borrow under the revolving credit facility. The revolving credit facility has an accordion feature under which the aggregate commitment may be increased from $450 million to a maximum amount of $750 million, subject to the Company's future needs and the availability of additional bank capacity.  The Company's homebuilding debt to book capitalization as of June 30, 2015 and 2014 was 55.3% and 53.8%, respectively, and adjusted net homebuilding debt to adjusted book capitalization was 53.9%* and 51.6%*, respectively.  In addition, the Company's homebuilding debt to adjusted homebuilding EBITDA for the LTM period ending June 30, 2015 and 2014 was 4.4x* and 3.9x*, respectively.  

Proposed Merger with The Ryland Group, Inc.

During the second quarter of 2015, the Company entered into a merger agreement with The Ryland Group, Inc. ("Ryland").  Subject to the terms and conditions of the merger agreement, which was unanimously approved by the boards of directors of the Company and Ryland, the Company and Ryland have agreed that Ryland will merge with and into the Company in a "merger of equals," with the Company continuing as the surviving corporation, and the separate corporate existence of Ryland will cease.  Concurrent with the closing of the merger, each five shares of common stock issued and outstanding of the Company will be combined and converted into one issued and outstanding share of common stock of the surviving corporation and each share of common stock of Ryland issued and outstanding will be converted and exchangeable for 1.0191 issued and outstanding shares of common stock of the surviving corporation.  The proposed merger is subject to approval by the stockholders of the Company and Ryland and other customary closing conditions. The Company currently expects the transaction to close in early fall 2015.  As of June 30, 2015, the Company incurred transaction related fees totaling $5.2 million, which was reported in "other income (expense)" in the condensed consolidated statements of operations during the second quarter.

Earnings Conference Call

A conference call to discuss the Company's 2015 second quarter results will be held at 12:00 p.m. Eastern time July 31, 2015.  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) 946-0720 (domestic) or (719) 325-2384 (international); Passcode: 2656006.  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: 2656006.  

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; cancellation rates; average home price; 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 the expected closing date of our proposed merger with The Ryland Group, Inc.  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, 2014 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.

Additional Information

In connection with the proposed transaction, Standard Pacific and Ryland will be filing documents with the SEC, including the filing by Standard Pacific of a registration statement on Form S-4, and Standard Pacific and Ryland intend to mail a joint proxy statement regarding the proposed merger to their respective stockholders that will also constitute a prospectus of Standard Pacific.  Before making any voting or investment decision, investors are urged to read the joint proxy statement/prospectus when it becomes available because it will contain important information about the proposed transaction.  You may obtain copies of all documents filed with the SEC regarding this transaction, free of charge, at the SEC's website (www.sec.gov), by accessing Standard Pacific's website at www.standardpacifichomes.com under the heading "Investor Relations" and then under the link "SEC Filings" and from Standard Pacific by directing a request to Standard Pacific Corp., 15360 Barranca Parkway, Irvine, California 92618, Attention:  Secretary, and by accessing Ryland's website at www.ryland.com under the heading "Investors" and then under the link "SEC Filings" and from Ryland by directing a request to The Ryland Group, Inc., 3011 Townsgate Rd., Ste. 200, Westlake Village, California 91361, Attention:  Investor Relations.

Standard Pacific and Ryland and their respective directors and executive officers and certain other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction.  You can find information about Standard Pacific's directors and executive officers in its definitive proxy statement filed with the SEC on April 24, 2015.  You can find information about Ryland's directors and executive officers in its definitive proxy statement filed with the SEC on March 13, 2015.  Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holding or otherwise, will be contained in the joint proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.  You can obtain free copies of these documents from Standard Pacific and Ryland using the contact information above.

No Offer or Solicitation

The information in this communication is for informational purposes only and is neither an offer to purchase, nor a solicitation of an offer to sell, subscribe for or buy any securities or the solicitation of any vote or approval in any jurisdiction pursuant to or in connection with the proposed transactions or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law. 

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

2015

2014

or % Change

2015

or % Change

Operating Data

(Dollars in thousands)

Deliveries

1,305

1,236

6%

972

34%

Average selling price

$

532

$

479

11%

$

482

10%

Home sale revenues

$

694,678

$

591,706

17%

$

468,379

48%

Gross margin % (including land sales)

24.6%

26.7%

(2.1%)

24.3%

0.3%

Gross margin % from home sales

24.6%

26.6%

(2.0%)

24.2%

0.4%

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

29.6%

31.7%

(2.1%)

29.0%

0.6%

Incentive and stock-based compensation expense

$

6,520

$

6,724

(3%)

$

4,422

47%

Selling expenses

$

35,873

$

28,782

25%

$

26,123

37%

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

$

37,517

$

32,329

16%

$

35,525

6%

SG&A expenses

$

79,910

$

67,835

18%

$

66,070

21%

SG&A % from home sales

11.5%

11.5%

        ―    

14.1%

(2.6%)

Operating margin from home sales

$

90,835

$

89,675

1%

$

47,492

91%

Operating margin % from home sales

13.1%

15.2%

(2.1%)

10.1%

3.0%

Net new orders (homes, excluding Q2 2014 acquisition)

1,567

1,425

10%

1,571

(0%)

Net new orders (dollar value, excluding Q2 2014 acquisition)

$

857,747

$

679,785

26%

$

829,930

3%

Average active selling communities

203

183

11%

198

3%

Monthly sales absorption rate per community (excl. Q2 2014 acq.)

2.6

2.6

(1%)

2.6

(3%)

Cancellation rate

15%

14%

1%

11%

4%

Gross cancellations

268

247

9%

200

34%

Cancellations from current quarter sales

118

93

27%

84

40%

Backlog (homes)

2,572

2,304

12%

2,310

11%

Backlog (dollar value)

$

1,484,544

$

1,138,886

30%

$

1,293,272

15%

Cash flows (uses) from operating activities

$

(17,126)

$

(25,949)

34%

$

(94,071)

82%

Cash flows (uses) from investing activities

$

(16,156)

$

(36,050)

55%

$

(7,884)

(105%)

Cash flows (uses) from financing activities

$

17,997

$

4,426

307%

$

(6,840)

Land purchases (incl. seller financing)

$

98,627

$

113,001

(13%)

$

78,494

26%

Adjusted Homebuilding EBITDA*

$

135,263

$

131,294

3%

$

79,028

71%

Adjusted Homebuilding EBITDA Margin %*

19.3%

22.2%

(2.9%)

16.8%

2.5%

Homebuilding interest incurred

$

41,857

$

37,641

11%

$

41,803

0%

Homebuilding interest capitalized to inventories owned

$

41,508

$

37,228

11%

$

41,401

0%

Homebuilding interest capitalized to investments in JVs

$

349

$

413

(15%)

$

402

(13%)

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

$

36,563

$

29,816

23%

$

22,638

62%

 

As of 

June 30,

December 31,

Percentage

2015

2014

or % Change

Balance Sheet Data

(Dollars in thousands, except per share amounts)

Homebuilding cash (including restricted cash)

$

116,802

$

218,650

(47%)

Inventories owned

$

3,624,498

$

3,255,204

11%

Homesites owned and controlled

36,034

35,430

2%

Homes under construction

2,991

2,032

47%

Completed specs

359

515

(30%)

Deferred tax asset valuation allowance

$

1,115

$

2,561

(56%)

Homebuilding debt

$

2,169,038

$

2,136,082

2%

Stockholders' equity

$

1,752,543

$

1,676,688

5%

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

$

4.82

$

4.62

4%

Total consolidated debt to book capitalization

56.3%

57.0%

(0.7%)

Adjusted net homebuilding debt to total adjusted book capitalization*

53.9%

53.3%

0.6%

1All statistical numbers exclude unconsolidated joint ventures unless noted otherwise.

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

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended June 30,

Six Months Ended June 30,

2015

2014

2015

2014

(Dollars in thousands, except per share amounts)

(Unaudited)

Homebuilding:

Home sale revenues

$

694,678

$

591,706

$

1,163,057

$

1,038,624

Land sale revenues

4,954

780

6,853

14,061

Total revenues

699,632

592,486

1,169,910

1,052,685

Cost of home sales

(523,933)

(434,196)

(878,750)

(762,441)

Cost of land sales

(3,758)

(350)

(5,114)

(13,354)

Total cost of sales

(527,691)

(434,546)

(883,864)

(775,795)

Gross margin

171,941

157,940

286,046

276,890

Gross margin %

24.6%

26.7%

24.5%

26.3%

Selling, general and administrative expenses

(79,910)

(67,835)

(145,980)

(126,425)

Income (loss) from unconsolidated joint ventures

(51)

(462)

(502)

(899)

Other income (expense)

(5,276)

(363)

(5,572)

(376)

Homebuilding pretax income 

86,704

89,280

133,992

149,190

Financial Services:

Revenues

6,716

6,112

11,635

11,096

Expenses

(4,446)

(3,760)

(8,547)

(7,200)

Other income

548

214

938

375

Financial services pretax income

2,818

2,566

4,026

4,271

Income before taxes

89,522

91,846

138,018

153,461

Provision for income taxes

(32,324)

(35,383)

(49,215)

(58,839)

Net income 

57,198

56,463

88,803

94,622

  Less: Net income allocated to preferred shareholder

(13,798)

(13,496)

(21,475)

(22,650)

  Less: Net income allocated to unvested restricted stock

(112)

(77)

(181)

(134)

Net income available to common stockholders

$

43,288

$

42,890

$

67,147

$

71,838

Income Per Common Share:

Basic

$

0.16

$

0.15

$

0.24

$

0.26

Diluted

$

0.14

$

0.14

$

0.22

$

0.23

Weighted Average Common Shares Outstanding:

Basic

275,498,449

279,075,416

274,572,173

278,514,992

Diluted

310,553,895

316,727,592

310,407,657

316,451,929

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

87,812,786

87,812,786

87,812,786

87,812,786

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

398,366,681

404,540,378

398,220,443

404,264,715

 

CONDENSED CONSOLIDATED BALANCE SHEETS

June 30,

December 31,

2015

2014

(Dollars in thousands)

ASSETS

(Unaudited)

Homebuilding:

Cash and equivalents

$

77,088

$

180,428

Restricted cash

39,714

38,222

Inventories:

Owned

3,624,498

3,255,204

Not owned

45,771

85,153

Investments in unconsolidated joint ventures

60,835

50,111

Deferred income taxes, net

266,091

276,402

Other assets

54,424

61,597

Total Homebuilding Assets

4,168,421

3,947,117

Financial Services:

Cash and equivalents

11,225

31,965

Restricted cash

1,045

1,295

Mortgage loans held for sale, net

109,239

174,420

Mortgage loans held for investment, net

23,366

14,380

Other assets

6,596

5,243

Total Financial Services Assets

151,471

227,303

Total Assets

$

4,319,892

$

4,174,420

LIABILITIES AND EQUITY

Homebuilding:

Accounts payable

$

79,719

$

45,085

Accrued liabilities

225,622

223,783

Revolving credit facility

30,000

        ―    

Secured project debt and other notes payable

5,927

4,689

Senior notes payable

2,133,111

2,131,393

Total Homebuilding Liabilities

2,474,379

2,404,950

Financial Services:

Accounts payable and other liabilities

2,629

3,369

Mortgage credit facilities

90,341

89,413

Total Financial Services Liabilities

92,970

92,782

Total Liabilities

2,567,349

2,497,732

Equity:

Stockholders' Equity:

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

    authorized; 267,829 shares issued and outstanding

    at June 30, 2015 and December 31, 2014

3

3

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

    authorized; 276,042,503 and 275,141,189 shares 

    issued and outstanding at June 30, 2015 and

    December 31, 2014, respectively

2,760

2,751

Additional paid-in capital

1,333,745

1,346,702

Accumulated earnings

416,035

327,232

Total Equity

1,752,543

1,676,688

Total Liabilities and Equity

$

4,319,892

$

4,174,420

 

INVENTORIES

June 30,

December 31,

2015

2014

(Dollars in thousands)

Inventories Owned:

(Unaudited)

     Land and land under development

$ 2,269,998

$   2,248,289

     Homes completed and under construction

1,129,718

827,612

     Model homes

224,782

179,303

        Total inventories owned

$ 3,624,498

$   3,255,204

Inventories Owned by Segment:

     California

$ 1,582,027

$   1,422,330

     Southwest

848,739

799,473

     Southeast

1,193,732

1,033,401

        Total inventories owned

$ 3,624,498

$   3,255,204

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended June 30,

Six Months Ended June 30,

2015

2014

2015

2014

(Dollars in thousands)

(Unaudited)

Cash Flows From Operating Activities:

Net income

$

57,198

$

56,463

$

88,803

$

94,622

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

Depreciation and amortization

8,989

6,822

14,982

12,024

Amortization of stock-based compensation

2,389

2,859

5,084

5,231

Excess tax benefits from share-based payment arrangements

(2,994)

       ―   

(6,363)

       ―   

Deferred income tax provision

32,324

35,383

49,198

59,005

Other operating activities

658

2,337

1,128

2,775

Changes in cash and equivalents due to:

Mortgage loans held for sale

(10,542)

(9,364)

65,182

42,574

Inventories - owned

(137,351)

(132,828)

(341,894)

(325,611)

Inventories - not owned

(6,183)

(6,629)

(12,061)

(14,794)

Other assets

12,809

5,274

5,877

(13,108)

Accounts payable

21,155

4,773

34,634

6,149

Accrued liabilities

4,422

8,961

(15,767)

(12,379)

Net cash provided by (used in) operating activities

(17,126)

(25,949)

(111,197)

(143,512)

Cash Flows From Investing Activities:

Investments in unconsolidated homebuilding joint ventures

(13,139)

(2,890)

(20,778)

(5,677)

Distributions of capital from unconsolidated joint ventures

3,028

       ―   

8,760

14,808

Net cash paid for acquisitions

       ―   

(33,408)

       ―   

(33,408)

Other investing activities

(6,045)

248

(12,022)

(1,487)

Net cash provided by (used in) investing activities

(16,156)

(36,050)

(24,040)

(25,764)

Cash Flows From Financing Activities:

Change in restricted cash

(223)

(4,687)

(1,242)

(9,925)

Borrowings from revolving credit facility

131,200

       ―   

158,900

       ―   

Principal payments on revolving credit facility

(116,200)

       ―   

(128,900)

       ―   

Principal payments on secured project debt and other notes payable

(186)

(171)

(497)

(1,061)

Principal payments on senior notes payable

       ―   

(4,971)

       ―   

(4,971)

Net proceeds from (payments on) mortgage credit facilities

(1,196)

14,082

928

(34,288)

Repurchases of common stock

       ―   

       ―   

(22,073)

       ―   

Excess tax benefits from share-based payment arrangements

2,994

       ―   

6,363

       ―   

Issuance of common stock under employee stock plans, net of tax withholdings

1,608

173

(2,322)

3,769

Net cash provided by (used in) financing activities

17,997

4,426

11,157

(46,476)

Net increase (decrease) in cash and equivalents

(15,285)

(57,573)

(124,080)

(215,752)

Cash and equivalents at beginning of period

103,598

205,112

212,393

363,291

Cash and equivalents at end of period

$

88,313

$

147,539

$

88,313

$

147,539

Cash and equivalents at end of period

$

88,313

$

147,539

$

88,313

$

147,539

Homebuilding restricted cash at end of period

39,714

31,385

39,714

31,385

Financial services restricted cash at end of period

1,045

1,295

1,045

1,295

Cash and equivalents and restricted cash at end of period

$

129,072

$

180,219

$

129,072

$

180,219

 

REGIONAL OPERATING DATA

Three Months Ended June 30,

2015

2014

% Change

Homes

ASP

Homes

ASP

Homes

ASP

(Dollars in thousands)

New homes delivered:

California

438

$

683

439

$

662

(0%)

3%

Arizona

53

315

60

309

(12%)

2%

Texas

265

526

179

466

48%

13%

Colorado

73

583

58

510

26%

14%

Southwest

391

508

297

443

32%

15%

Florida

255

472

265

368

(4%)

28%

Carolinas

221

347

235

306

(6%)

13%

Southeast

476

414

500

339

(5%)

22%

Consolidated total

1,305

$

532

1,236

$

479

6%

11%

 

Six Months Ended June 30,

2015

2014

% Change

Homes

ASP

Homes

ASP

Homes

ASP

(Dollars in thousands)

New homes delivered:

California

730

$

663

778

$

645

(6%)

3%

Arizona

110

319

123

307

(11%)

4%

Texas

463

512

328

443

41%

16%

Colorado

113

572

111

498

2%

15%

Southwest

686

491

562

424

22%

16%

Florida

456

447

500

360

(9%)

24%

Carolinas

405

342

391

303

4%

13%

Southeast

861

398

891

335

(3%)

19%

Consolidated total

2,277

$

511

2,231

$

466

2%

10%

 

Three Months Ended June 30,

2015

2014

% Change

Homes

ASP

Homes

ASP

Homes

ASP

(Dollars in thousands)

Net new orders:

California

528

$

720

498

$

611

6%

18%

Arizona

109

343

75

309

45%

11%

Texas (excludes Q2 2014 acquisition)

344

502

260

473

32%

6%

Colorado

62

550

75

526

(17%)

5%

Southwest

515

474

410

453

26%

5%

Florida

284

495

258

420

10%

18%

Carolinas

240

387

259

314

(7%)

23%

Southeast

524

446

517

367

1%

22%

Consolidated total

1,567

$

547

1,425

$

477

10%

15%

 

Six Months Ended June 30,

2015

2014

% Change

Homes

ASP

Homes

ASP

Homes

ASP

(Dollars in thousands)

Net new orders:

California

1,054

$

704

971

$

628

9%

12%

Arizona

204

344

142

307

44%

12%

Texas (excludes Q2 2014 acquisition)

653

503

495

469

32%

7%

Colorado

145

537

128

507

13%

6%

Southwest

1,002

475

765

445

31%

7%

Florida

597

482

541

407

10%

18%

Carolinas

485

375

459

311

6%

21%

Southeast

1,082

434

1,000

363

8%

20%

Consolidated total

3,138

$

538

2,736

$

480

15%

12%

 

Three Months Ended June 30,

Six Months Ended June 30,

2015

2014

% Change

2015

2014

% Change

Average number of selling communities 

  during the period:

California

47

48

(2%)

47

47

          ―   

Arizona

13

10

30%

13

10

30%

Texas

47

38

24%

47

37

27%

Colorado

8

11

(27%)

8

11

(27%)

Southwest

68

59

15%

68

58

17%

Florida

56

45

24%

55

43

28%

Carolinas

32

31

3%

30

31

(3%)

Southeast

88

76

16%

85

74

15%

Consolidated total

203

183

11%

200

179

12%

 

At June 30,

2015

2014

% Change

Homes

Dollar Value

Homes

Dollar Value

Homes

Dollar Value

(Dollars in thousands)

Backlog:

California

622

$

499,226

589

$

378,962

6%

32%

Arizona

190

70,954

124

43,678

53%

62%

Texas

661

345,333

556

261,384

19%

32%

Colorado

107

61,094

125

67,005

(14%)

(9%)

Southwest

958

477,381

805

372,067

19%

28%

Florida

592

347,873

545

262,827

9%

32%

Carolinas

400

160,064

365

125,030

10%

28%

Southeast

992

507,937

910

387,857

9%

31%

Consolidated total

2,572

$

1,484,544

2,304

$

1,138,886

12%

30%

 

At June 30,

2015

2014

% Change

Homesites owned and controlled:

California

10,975

9,603

14%

Arizona

1,970

2,242

(12%)

Texas

4,430

5,204

(15%)

Colorado

974

1,196

(19%)

Nevada

920

1,124

(18%)

Southwest

8,294

9,766

(15%)

Florida

12,366

12,138

2%

Carolinas

4,399

4,441

(1%)

Southeast

16,765

16,579

1%

Total (including joint ventures)

36,034

35,948

0%

Homesites owned

28,866

28,774

0%

Homesites optioned or subject to contract 

6,123

6,909

(11%)

Joint venture homesites

1,045

265

294%

Total (including joint ventures)

36,034

35,948

0%

Homesites owned:

Raw lots

7,116

6,747

5%

Homesites under development

8,361

9,373

(11%)

Finished homesites

7,397

6,605

12%

Under construction or completed homes

4,010

3,548

13%

Held for sale

1,982

2,501

(21%)

Total

28,866

28,774

0%

 

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 adjusted 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, 2015

Gross Margin %

June 30, 2014

Gross Margin %

March 31, 2015

Gross Margin %

(Dollars in thousands)

Home sale revenues

$

694,678

$

591,706

$

468,379

Less: Cost of home sales

(523,933)

(434,196)

(354,817)

Gross margin from home sales

170,745

24.6%

157,510

26.6%

113,562

24.2%

Add: Capitalized interest included in cost of home sales

35,051

5.0%

29,812

5.1%

22,395

4.8%

Adjusted gross margin from home sales, excluding interest amortized to cost of home sales

$

205,796

29.6%

$

187,322

31.7%

$

135,957

29.0%

 

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, 2015

March 31, 2015

December 31, 2014

June 30, 2014

(Dollars in thousands)

Total consolidated debt

$

2,259,379

$

2,243,144

$

2,225,495

$

1,901,416

Less:

Financial services indebtedness

(90,341)

(91,537)

(89,413)

(66,579)

Homebuilding cash

(116,802)

(120,167)

(218,650)

(161,121)

Adjusted net homebuilding debt

2,052,236

2,031,440

1,917,432

1,673,716

Stockholders' equity

1,752,543

1,688,355

1,676,688

1,572,583

Total adjusted book capitalization

$

3,804,779

$

3,719,795

$

3,594,120

$

3,246,299

Total consolidated debt to book capitalization

56.3%

57.1%

57.0%

54.7%

Adjusted net homebuilding debt to total adjusted book capitalization

53.9%

54.6%

53.3%

51.6%

Homebuilding debt

$

2,169,038

$

1,834,837

LTM adjusted homebuilding EBITDA

$

492,388

$

472,219

Homebuilding debt to adjusted homebuilding EBITDA

 4.4x 

 3.9x 

 

The table set forth below calculates adjusted stockholders' equity per common share.  The Company believes that the adjusted 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 the pro forma effect to the conversion of our outstanding preferred shares assuming full conversion to common stock.

June 30,

December 31,

2015

2014

Actual common shares outstanding

276,042,503

275,141,189

Add: Conversion of preferred shares to common shares

87,812,786

87,812,786

Pro forma common shares outstanding

363,855,289

362,953,975

Stockholders' equity (Dollars in thousands)

$

1,752,543

$

1,676,688

Divided by pro forma common shares outstanding

÷

363,855,289

÷

362,953,975

Adjusted stockholders' equity per common share

$

4.82

$

4.62

 

The table set forth below calculates EBITDA and Adjusted Homebuilding EBITDA.  Adjusted Homebuilding EBITDA means net income (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, including amortization of capitalized model costs, (g) amortization of stock-based compensation, (h) income (loss) from unconsolidated joint ventures and (i) income (loss) from financial services subsidiaries.  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, 2015

June 30, 2014

March 31, 2015

2015

2014

(Dollars in thousands)

Net income 

$

57,198

$

56,463

$

31,605

$

210,046

$

218,377

Provision for income taxes

32,324

35,383

16,891

124,475

106,245

Homebuilding interest amortized to cost of sales and interest expense

36,563

29,816

22,638

127,514

118,030

Homebuilding depreciation and amortization

8,964

6,788

5,956

30,172

24,553

Amortization of stock-based compensation

2,389

2,859

2,695

8,322

10,271

EBITDA

137,438

131,309

79,785

500,529

477,476

Add:

Cash distributions of income from unconsolidated joint ventures

592

1,875

         ―    

592

1,875

Less:

Income (loss) from unconsolidated joint ventures

(51)

(462)

(451)

(271)

(1,231)

Income from financial services subsidiaries

2,818

2,352

1,208

9,004

8,363

Adjusted Homebuilding EBITDA

$

135,263

$

131,294

$

79,028

$

492,388

$

472,219

Homebuilding revenues

$

699,632

$

592,486

$

470,278

$

2,528,403

$

2,170,892

Adjusted Homebuilding EBITDA Margin %

19.3%

22.2%

16.8%

19.5%

21.8%

 

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, 2015

June 30, 2014

March 31, 2015

2015

2014

(Dollars in thousands)

Net cash provided by (used in) operating activities

$

(17,126)

$

(25,949)

$

(94,071)

$

(330,082)

$

(148,524)

Add:

Provision for income taxes, net of deferred component

       ―   

        ―   

17

35,284

(15,791)

Homebuilding interest amortized to cost of sales and interest expense

36,563

29,816

22,638

127,514

118,030

Excess tax benefits from share-based payment arrangements

2,994

        ―   

3,369

19,767

        ―   

Less:

Income from financial services subsidiaries

2,818

2,352

1,208

9,004

8,363

Depreciation and amortization from financial services subsidiaries

25

34

37

133

132

Loss on disposal of property and equipment

15

        ―   

19

44

2

Net changes in operating assets and liabilities:

Mortgage loans held for sale

10,542

9,364

(75,724)

30,230

(28,073)

Inventories-owned

137,351

132,828

204,543

680,710

521,371

Inventories-not owned

6,183

6,629

5,878

30,294

48,403

Other assets

(12,809)

(5,274)

6,932

(23,514)

(5,515)

Accounts payable 

(21,155)

(4,773)

(13,479)

(37,799)

(19,854)

Accrued liabilities

(4,422)

(8,961)

20,189

(30,835)

10,669

Adjusted Homebuilding EBITDA

$

135,263

$

131,294

$

79,028

$

492,388

$

472,219

 

SOURCE Standard Pacific Corp.



RELATED LINKS

http://www.standardpacifichomes.com