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Press release from PR Newswire

Standard Pacific Corp. Reports 2012 Third Quarter Results

Thursday, October 25, 2012

Q3 2012 Net Income of $21.7 million, or $0.05 per diluted share
Q3 2012 Net New Orders up 29% and Backlog up 64% vs. Q3 2011

IRVINE, Calif., Oct. 25, 2012 /PRNewswire/ -- Standard Pacific Corp. (NYSE: SPF) today announced results for the third quarter ended September 30, 2012.

2012 Third Quarter Highlights and Comparisons to the 2011 Third Quarter:

  • Net income of $21.7 million, or $0.05 per diluted share, vs. net loss of $6.4 million, or $0.02 per diluted share
  • Net new orders of 989, up 29%
  • Backlog of 1,394 homes, up 64%
  • 156 average active selling communities, down 2%
  • Homebuilding revenues up 32%
    • Average selling price of $369 thousand, up 7%
    • 861 new home deliveries, up 24%
  • Gross margin from home sales of 20.2%, compared to 15.8% (18.8%* excluding impairment charges)
  • SG&A rate from home sales of 13.6%, a 260 basis point improvement
  • $246.2 million of land purchases and development costs compared to $106.4 million
  • Adjusted Homebuilding EBITDA of $51.5 million*, or 16.2%* of homebuilding revenues, compared to $28.4 million*, or 11.7%* of homebuilding revenues
  • Homebuilding cash balance of $500 million
  • Amended undrawn revolving credit facility in October 2012 to increase capacity to $350 million

Scott Stowell, the Company's Chief Executive Officer and President commented, "We are pleased that the positive momentum we experienced during the first half of 2012 continued into the third quarter.  We earned $21.7 million, with deliveries up 24%, orders up 29% and homebuilding revenues up 32% over the prior year period.  We are most pleased by the significant 64% year-over-year increase in the dollar value and number of homes in backlog to approximately $500 million, or 1,400 homes.  Our solid third quarter results reflect the execution of our strategy and improved housing market conditions during the quarter."

Revenues from home sales for the 2012 third quarter increased 31%, to $317.4 million from $241.4 million, as compared to the prior year period, primarily due to a 24% increase in new home deliveries (excluding joint ventures) to 861 homes and a 7% increase in our consolidated average home price to $369 thousand.  The increase in new home deliveries was driven by a 62% increase in the number of homes in backlog at the beginning of the quarter as compared to the prior year period. 

Gross margin from home sales for the 2012 third quarter increased to 20.2% compared to 15.8% (18.8%* excluding $7.2 million of inventory impairment charges) in the prior year period.  Excluding inventory impairment charges and previously capitalized interest costs, gross margin from home sales was 28.7%* for the 2012 third quarter versus 26.6%* for the 2011 third quarter.  This 210 basis point improvement was primarily attributable to a mix shift to more deliveries from higher margin communities, price increases in certain communities with higher sales absorption, and improved margins from speculative homes sold and delivered during the quarter. 

The Company's 2012 third quarter SG&A expenses (including Corporate G&A) were $43.1 million compared to $39.1 million for the prior year period, down 260 basis points as a percentage of home sale revenues to 13.6%, compared to 16.2% for the 2011 third quarter.  The improvement in the Company's SG&A rate was primarily due to a 31% increase in revenues from home sales and the operating leverage inherent in our business.

Net new orders (excluding joint ventures) for the 2012 third quarter increased 29% from the 2011 third quarter to 989 homes.  The 29% year-over-year growth is attributable to a 32% increase in the Company's monthly sales absorption rate, partially offset by a 2% decrease in the number of average active selling communities.    The Company's monthly sales absorption rate for the 2012 third quarter was 2.1 per community, compared to 1.6 per community for the 2011 third quarter and 2.4 per community for the 2012 second quarter.  The 10% decrease in absorption rate from the 2012 second quarter to the 2012 third quarter is slightly better than the historical seasonality for the Company.  The Company's cancellation rate for the 2012 third quarter was 14%, compared to 16% for the 2011 third quarter and 11% for the 2012 second quarter.   

The dollar value of homes in backlog (excluding joint ventures) increased 64% to $498.7 million, or 1,394 homes, compared to $304.8 million, or 848 homes, for the 2011 third quarter, and increased 13% compared to $439.7 million, or 1,266 homes, for the 2012 second quarter.  The increase in year over year backlog value was driven primarily by a 29% increase in net new orders and a shift to more to-be-built homes. 

The Company used $72.4 million of cash in operating activities for the 2012 third quarter versus $78.5 million in the 2011 third quarter.  During the 2012 third quarter, the Company spent $246.2 million on land purchases and development costs, of which $140.8 million of cash land purchases and development costs were included in cash flows used in operating activities, compared to $106.4 million for the 2011 third quarter.  Excluding land purchases and development costs, cash inflows from operating activities for the 2012 third quarter were $68.4 million* versus $27.9 million* in the 2011 third quarter.  The year over year increase in cash inflows from operating activities (excluding land purchases and development costs) was primarily due to a 31% increase in home sale revenues. 

The Company purchased $206.7 million of land (3,497 homesites) during the 2012 third quarter, of which 76% (based on homesites) was located in California and 11% in Texas, with the balance spread throughout the Company's other operations.  The Company purchased $337.3 million of land (6,259 homesites) during the nine months ended September 30, 2012, of which 47% (based on homesites) was located in California, 24% in the Carolinas, 13% in Texas and 13% in Florida, with the balance spread throughout the Company's other operations.  As of September 30, 2012, the Company owned or controlled 30,154 homesites, of which 17,718 are owned and actively selling or under development, 6,180 are controlled or under option, and the remaining 6,256 homesites are held for future development or for sale.  The homesites owned that are actively selling or under development represent a 5.7 year supply based on the Company's deliveries for the trailing twelve months ended September 30, 2012.  

Earnings Conference Call

A conference call to discuss the Company's 2012 third quarter results will be held at 12:00 p.m. Eastern time October 26, 2012.  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 (888) 811-5448 (domestic) or (913) 905-3226 (international); Passcode: 8191394.  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: 8191394.

About Standard Pacific

Standard Pacific, one of the nation's largest homebuilders, has built more than 115,000 homes during its 47-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 and Colorado.  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 statements regarding new home orders, deliveries, backlog, average home price, revenue, profitability, cash flow, liquidity, gross margins, overhead expenses and other costs; community count; product mix; execution on our strategy; and the future condition of the economy and the housing market.  Forward-looking statements are based on our current expectations or beliefs regarding future events or circumstances, and you should not place undue reliance on these statements.  Such statements involve known and unknown risks, uncertainties, assumptions and other factors many of which are out of the Company's control and difficult to forecast that may cause actual results to differ materially from those that may be described or implied.  Such factors include but are not limited to:  local and general economic and market conditions, including consumer confidence, employment rates, interest rates, the cost and availability of mortgage financing, and stock market, home and land valuations; the impact on economic conditions, terrorist attacks or the outbreak or escalation of armed conflict involving the United States; the cost and availability of suitable undeveloped land, building materials and labor; the cost and availability of construction financing and corporate debt and equity capital; our significant amount of debt and the impact of restrictive covenants in our debt agreements; our ability to repay our debt as it comes due; changes in our credit rating or outlook; the demand for and affordability of single-family homes; the supply of housing for sale; cancellations of purchase contracts by homebuyers; the cyclical and competitive nature of the Company's business; governmental regulation, including the impact of "slow growth" or similar initiatives; delays in the land entitlement process, development, construction, or the opening of new home communities; adverse weather conditions and natural disasters; environmental matters; risks relating to the Company's mortgage banking operations; future business decisions and the Company's ability to successfully implement the Company's operational and other strategies; litigation and warranty claims; and other risks discussed in the Company's filings with the Securities and Exchange Commission, including in the Company's Annual Report on Form 10-K for the year ended Dec. 31, 2011 and subsequent Quarterly Reports on Form 10-Q.  The Company assumes no, and hereby disclaims any, obligation to update any of the foregoing or any other forward-looking statements.  The Company nonetheless reserves the right to make such updates from time to time by press release, periodic report or other method of public disclosure without the need for specific reference to this press release.  No such update shall be deemed to indicate that other statements not addressed by such update remain correct or create an obligation to provide any other updates.

Contact: Jeff McCall, EVP & CFO (949) 789-1655, jmccall@stanpac.com

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

(Note: Tables Follow)

 

KEY STATISTICS AND FINANCIAL DATA1

As of or For the Three Months Ended

September 30,

September 30,

Percentage

June 30,

Percentage

2012

2011

or % Change

2012

or % Change

Operating Data

(Dollars in thousands)

Deliveries

861

697

24%

815

6%

Average selling price

$

369

$

346

7%

$

337

9%

Home sale revenues

$

317,389

$

241,434

31%

$

274,872

15%

Gross margin %

20.1%

15.8%

4.3%

20.5%

(0.4%)

Gross margin % from home sales (excluding impairments)*

20.2%

18.8%

1.4%

20.5%

(0.3%)

Gross margin % from home sales (excluding impairments and

interest amortized to cost of home sales)*

28.7%

26.6%

2.1%

29.4%

(0.7%)

Inventory impairments and deposit write-offs

$

  ?  

$

8,959

(100%)

$

  ?  

  ?  

Restructuring charges

$

  ?  

$

631

(100%)

$

  ?  

  ?  

Incentive and stock-based compensation expense

$

4,768

$

4,380

9%

$

4,676

2%

Selling expenses

$

17,069

$

12,985

31%

$

16,311

5%

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

expenses and restructuring charges)

$

21,284

$

21,128

1%

$

20,965

2%

SG&A expenses

$

43,121

$

39,124

10%

$

41,952

3%

SG&A % from home sales

13.6%

16.2%

(2.6%)

15.3%

(1.7%)

Net new orders

989

764

29%

1,108

(11%)

Average active selling communities

156

159

(2%)

157

(1%)

Monthly sales absorption rate per community

2.1

1.6

32%

2.4

(10%)

Cancellation rate

14%

16%

(2%)

11%

3%

Gross cancellations

161

144

12%

138

17%

Cancellations from current quarter sales

67

63

6%

72

(7%)

Backlog (homes)

1,394

848

64%

1,266

10%

Backlog (dollar value)

$

498,739

$

304,846

64%

$

439,694

13%

Cash flows (uses) from operating activities

$

(72,418)

$

(78,464)

8%

$

(56,600)

(28%)

Cash flows (uses) from investing activities

$

(95,704)

$

4,254

$

(5,545)

(1,626%)

Cash flows (uses) from financing activities

$

348,696

$

21,884

1,493%

$

(11,638)

Land purchases (incl. seller financing and JV purchases) 

$

206,740

$

74,736

177%

$

96,584

114%

Adjusted Homebuilding EBITDA*

$

51,523

$

28,350

82%

$

41,810

23%

Adjusted Homebuilding EBITDA Margin %*

16.2%

11.7%

4.5%

15.2%

1.0%

Homebuilding interest incurred

$

36,112

$

35,273

2%

$

35,305

2%

Homebuilding interest capitalized to inventories owned

$

32,604

$

29,329

11%

$

31,876

2%

Homebuilding interest capitalized to investments in JVs

$

1,839

$

1,694

9%

$

1,812

1%

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

$

27,078

$

18,853

44%

$

24,465

11%

 

As of 

September 30,

June 30,

Percentage

December 31,

Percentage

2012

2012

or % Change

2011

or % Change

Balance Sheet Data

(Dollars in thousands, except per share amounts)

Homebuilding cash (including restricted cash)

$

499,572

$

317,242

57%

$

438,157

14%

Inventories owned

$

1,829,996

$

1,605,138

14%

$

1,477,239

24%

Homesites owned and controlled

30,154

27,757

9%

26,444

14%

Homes under construction

1,507

1,317

14%

940

60%

Completed specs

212

239

(11%)

383

(45%)

Deferred tax asset valuation allowance

$

488,490

$

499,701

(2%)

$

510,621

(4%)

Homebuilding debt

$

1,581,076

$

1,319,682

20%

$

1,324,948

19%

Stockholders' equity

$

760,017

$

656,624

16%

$

623,754

22%

Stockholders' equity per share (including if-converted 

preferred stock)*

$

2.11

$

1.91

10%

$

1.82

16%

Total consolidated debt to book capitalization

68.5%

67.5%

1.0%

68.7%

(0.2%)

Adjusted net homebuilding debt to total adjusted 

book capitalization*

58.7%

60.4%

(1.7%)

58.7%

0.0%

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 EndedSeptember 30,

Nine Months EndedSeptember 30,

2012

2011

2012

2011

(Dollars in thousands, except per share amounts)

(Unaudited)

Homebuilding:

Home sale revenues

$

317,389

$

241,434

$

812,578

$

589,369

Land sale revenues

1,152

359

4,537

468

Total revenues

318,541

241,793

817,115

589,837

Cost of home sales

(253,344)

(203,188)

(647,525)

(486,933)

Cost of land sales

(1,092)

(359)

(4,458)

(473)

Total cost of sales

(254,436)

(203,547)

(651,983)

(487,406)

Gross margin

64,105

38,246

165,132

102,431

Gross margin %

20.1%

15.8%

20.2%

17.4%

Selling, general and administrative expenses

(43,121)

(39,124)

(122,765)

(109,828)

Loss from unconsolidated joint ventures

(39)

(455)

(2,707)

(1,091)

Interest expense

(1,669)

(4,250)

(5,816)

(22,209)

Other income (expense)

117

(1,948)

4,708

(679)

Homebuilding pretax income (loss)

19,393

(7,531)

38,552

(31,376)

Financial Services:

Revenues

5,218

3,529

14,249

7,124

Expenses

(2,777)

(2,324)

(7,952)

(7,171)

Other income

70

42

217

98

Financial services pretax income

2,511

1,247

6,514

51

Income (loss) before income taxes

21,904

(6,284)

45,066

(31,325)

Provision for income taxes

(194)

(150)

(570)

(425)

Net income (loss)

21,710

(6,434)

44,496

(31,750)

  Less: Net (income) loss allocated to preferred shareholder

(9,100)

2,780

(18,980)

13,743

  Less: Net (income) loss allocated to unvested restricted stock

(22)

 ?   

(31)

 ?   

Net income (loss) available to common stockholders

$

12,588

$

(3,654)

$

25,485

$

(18,007)

Income (Loss) Per Common Share:

Basic

$

0.06

$

(0.02)

$

0.13

$

(0.09)

Diluted

$

0.05

$

(0.02)

$

0.12

$

(0.09)

Weighted Average Common Shares Outstanding:

Basic

204,485,294

194,311,129

198,469,130

193,686,614

Diluted

235,273,648

194,311,129

210,441,932

193,686,614

Weighted average additional common shares outstanding

if preferred shares converted to common shares

147,812,786

147,812,786

147,812,786

147,812,786

Total weighted average diluted common shares outstanding

if preferred shares converted to common shares

383,086,434

342,123,915

358,254,718

341,499,400

 

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

December 31,

2012

2011

(Dollars in thousands)

ASSETS

(Unaudited)

Homebuilding:

Cash and equivalents

$

473,859

$

406,785

Restricted cash

25,713

31,372

Trade and other receivables

23,668

11,525

Inventories:

Owned

1,829,996

1,477,239

Not owned

52,112

59,840

Investments in unconsolidated joint ventures

52,630

81,807

Deferred income taxes, net

2,366

5,326

Other assets

40,833

35,693

Total Homebuilding Assets

2,501,177

2,109,587

Financial Services:

Cash and equivalents

5,597

3,737

Restricted cash

1,920

1,295

Mortgage loans held for sale, net

88,136

73,811

Mortgage loans held for investment, net

9,652

10,115

Other assets

3,871

1,838

Total Financial Services Assets

109,176

90,796

Total Assets

$

2,610,353

$

2,200,383

LIABILITIES AND EQUITY

Homebuilding:

Accounts payable

$

16,458

$

17,829

Accrued liabilities

179,658

185,890

Secured project debt and other notes payable

11,600

3,531

Senior notes payable

1,529,863

1,275,093

Senior subordinated notes payable

39,613

46,324

Total Homebuilding Liabilities

1,777,192

1,528,667

Financial Services:

Accounts payable and other liabilities

2,109

1,154

Mortgage credit facilities

71,035

46,808

Total Financial Services Liabilities

73,144

47,962

Total Liabilities

1,850,336

1,576,629

Equity:

Stockholders' Equity:

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

    authorized; 450,829 shares issued and outstanding

    at September 30, 2012 and December 31, 2011

5

5

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

    authorized; 215,576,688 and 198,563,273 shares 

    issued and outstanding at September 30, 2012 and 

    and December 31, 2011, respectively

2,156

1,985

Additional paid-in capital

1,325,970

1,239,180

Accumulated deficit

(564,273)

(608,769)

Accumulated other comprehensive loss, net of tax

(3,841)

(8,647)

Total Equity

760,017

623,754

Total Liabilities and Equity

$

2,610,353

$

2,200,383

 

INVENTORIES

September 30,

December 31,

2012

2011

(Dollars in thousands)

Inventories Owned:

(Unaudited)

     Land and land under development

$      1,301,857

$      1,036,829

     Homes completed and under construction

416,759

339,849

     Model homes

111,380

100,561

        Total inventories owned

$      1,829,996

$      1,477,239

Inventories Owned by Segment:

     California

$      1,082,181

$         890,300

     Southwest

378,954

302,686

     Southeast

368,861

284,253

        Total inventories owned

$      1,829,996

$      1,477,239

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months EndedSeptember 30,

Nine Months EndedSeptember 30,

2012

2011

2012

2011

(Dollars in thousands)

(Unaudited)

Cash Flows From Operating Activities:

Net income (loss)

$

21,710

$

(6,434)

$

44,496

$

(31,750)

Adjustments to reconcile net income (loss) to net cash 

provided by (used in) operating activities:

Amortization of stock-based compensation

1,559

2,635

4,518

8,094

Inventory impairment charges and deposit write-offs

 ?   

8,959

133

14,918

Other operating activities

1,798

1,343

5,838

3,901

Changes in cash and equivalents due to:

Trade and other receivables

(4,681)

(816)

(12,143)

(12,309)

Mortgage loans held for sale

(18,119)

(14,967)

(14,016)

(19,737)

Inventories - owned

(70,645)

(67,719)

(185,832)

(261,777)

Inventories - not owned

(7,191)

(4,859)

(10,690)

(17,659)

Other assets

999

(2,341)

922

(313)

Accounts payable

82

6,027

(1,371)

5,889

Accrued liabilities

2,070

(292)

(2,991)

166

Net cash provided by (used in) operating activities

(72,418)

(78,464)

(171,136)

(310,577)

Cash Flows From Investing Activities:

Investments in unconsolidated homebuilding joint ventures

(44,797)

(2,484)

(53,078)

(11,304)

Distributions of capital from unconsolidated joint ventures

10,145

7,737

11,940

7,786

Net cash paid for acquisitions

(60,752)

 ?   

(60,752)

 ?   

Other investing activities

(300)

(999)

(1,705)

(1,752)

Net cash provided by (used in) investing activities

(95,704)

4,254

(103,595)

(5,270)

Cash Flows From Financing Activities:

Change in restricted cash

(1,203)

3,757

5,034

(1,819)

Principal payments on secured project debt and other notes payable

(138)

(316)

(782)

(839)

Principal payments on senior subordinated notes payable

 ?   

 ?   

(9,990)

 ?   

Proceeds from the issuance of senior notes payable

253,000

 ?   

253,000

 ?   

Payment of debt issuance costs

(8,081)

 ?   

(8,081)

(4,575)

Net proceeds from (payments on) mortgage credit facilities

26,608

17,655

24,227

22,184

Proceeds from the issuance of common stock

75,849

 ?   

75,849

 ?   

Payment of common stock issuance costs

(3,913)

 ?   

(3,913)

 ?   

Proceeds from the exercise of stock options

6,574

788

8,321

874

Net cash provided by (used in) financing activities

348,696

21,884

343,665

15,825

Net increase (decrease) in cash and equivalents

180,574

(52,326)

68,934

(300,022)

Cash and equivalents at beginning of period

298,882

483,675

410,522

731,371

Cash and equivalents at end of period

$

479,456

$

431,349

$

479,456

$

431,349

Cash and equivalents at end of period

$

479,456

$

431,349

$

479,456

$

431,349

Homebuilding restricted cash at end of period

25,713

31,182

25,713

31,182

Financial services restricted cash at end of period

1,920

1,745

1,920

1,745

Cash and equivalents and restricted cash at end of period

$

507,089

$

464,276

$

507,089

$

464,276

 

REGIONAL OPERATING DATA

Three Months EndedSeptember 30, 

Nine Months EndedSeptember 30, 

2012

2011

% Change

2012

2011

% Change

New homes delivered:

California

363

295

23%

904

696

30%

Arizona

66

37

78%

176

115

53%

Texas

107

113

(5%)

368

285

29%

Colorado

33

25

32%

80

69

16%

Nevada

     ? 

2

(100%)

9

12

(25%)

Florida

151

120

26%

411

293

40%

Carolinas

141

105

34%

370

276

34%

Consolidated total

861

697

24%

2,318

1,746

33%

Unconsolidated joint ventures

14

13

8%

28

27

4%

Total (including joint ventures) 

875

710

23%

2,346

1,773

32%

 

Three Months EndedSeptember 30, 

Nine Months EndedSeptember 30, 

2012

2011

% Change

2012

2011

% Change

(Dollars in thousands)

Average selling prices of homes delivered:

California

$

505

$

496

2%

$

489

$

487

0%

Arizona

204

195

5%

206

204

1%

Texas

328

281

17%

307

290

6%

Colorado

399

307

30%

386

308

25%

Nevada

      ?  

192

--

192

194

(1%)

Florida

256

202

27%

244

200

22%

Carolinas

241

226

7%

238

225

6%

Consolidated

369

346

7%

351

338

4%

Unconsolidated joint ventures

450

356

26%

443

409

8%

Total (including joint ventures)

$

370

$

347

7%

$

352

$

339

4%

 

Three Months EndedSeptember 30,

Nine Months EndedSeptember 30,

2012

2011

% Change

2012

2011

% Change

Net new orders:

California

417

286

46%

1,169

831

41%

Arizona

61

57

7%

237

136

74%

Texas

132

117

13%

424

376

13%

Colorado

45

24

88%

113

75

51%

Nevada

     ? 

4

(100%)

6

7

(14%)

Florida

174

154

13%

568

411

38%

Carolinas

160

122

31%

514

344

49%

Consolidated total

989

764

29%

3,031

2,180

39%

Unconsolidated joint ventures

18

7

157%

42

23

83%

Total (including joint ventures)

1,007

771

31%

3,073

2,203

39%

 

Three Months EndedSeptember 30,

Nine Months EndedSeptember 30,

2012

2011

% Change

2012

2011

% Change

Average number of selling communities 

  during the period:

California

50

52

(4%)

51

50

2%

Arizona

5

10

(50%)

7

9

(22%)

Texas

22

22

      ? 

20

21

(5%)

Colorado

7

5

40%

6

5

20%

Nevada

      ? 

1

(100%)

      ? 

1

(100%)

Florida

38

38

      ? 

37

36

3%

Carolinas

34

31

10%

35

28

25%

Consolidated total

156

159

(2%)

156

150

4%

Unconsolidated joint ventures 

1

3

(67%)

2

3

(33%)

Total (including joint ventures)

157

162

(3%)

158

153

3%

 

At September 30,

2012

2011

% Change

Homes

Dollar Value

Homes

Dollar Value

Homes

Dollar Value

(Dollars in thousands)

Backlog:

California

439

$

217,549

254

$

145,043

73%

50%

Arizona

118

28,357

57

11,229

107%

153%

Texas

205

74,736

190

57,468

8%

30%

Colorado

66

26,406

36

12,362

83%

114%

Nevada

       ?  

       ?  

3

565

(100%)

(100%)

Florida

319

81,950

185

45,781

72%

79%

Carolinas

247

69,741

123

32,398

101%

115%

Consolidated total

1,394

498,739

848

304,846

64%

64%

Unconsolidated joint ventures 

17

6,836

1

409

1,600%

1,571%

Total (including joint ventures)

1,411

$

505,575

849

$

305,255

66%

66%

 

At September 30,

2012

2011

% Change

Homesites owned and controlled:

California

9,806

9,527

3%

Arizona

1,844

1,860

(1%)

Texas

4,451

4,120

8%

Colorado

669

718

(7%)

Nevada

1,124

1,136

(1%)

Florida

8,211

6,554

25%

Carolinas

4,049

2,911

39%

Total (including joint ventures)

30,154

26,826

12%

Homesites owned

23,974

20,139

19%

Homesites optioned or subject to contract 

5,605

5,392

4%

Joint venture homesites

575

1,295

(56%)

Total (including joint ventures)

30,154

26,826

12%

Homesites owned:

Raw lots

4,503

4,202

7%

Homesites under development

8,773

4,326

103%

Finished homesites

5,304

5,982

(11%)

Under construction or completed homes

2,170

1,961

11%

Held for sale

3,224

3,668

(12%)

Total

23,974

20,139

19%

 

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 inventory impairment charges and interest amortized to cost of home sales.  We believe these measures are useful to management and investors as they provide perspective on the underlying operating performance of the business excluding these charges and provide comparability with the Company's peer group.

Three Months Ended

September 30, 2012

GrossMargin %

September 30,2011

GrossMargin %

June 30, 2012

GrossMargin %

(Dollars in thousands)

Home sale revenues

$

317,389

$

241,434

$

274,872

Less: Cost of home sales

(253,344)

(203,188)

(218,586)

Gross margin from home sales

64,045

20.2%

38,246

15.8%

56,286

20.5%

Add: Inventory impairment charges

    ?    

7,230

    ?    

Gross margin from home sales, excluding

  impairment charges

64,045

20.2%

45,476

18.8%

56,286

20.5%

Add: Capitalized interest included in cost 

  of home sales

27,071

8.5%

18,776

7.8%

24,465

8.9%

Gross margin from home sales, excluding 

  impairment charges and interest amortized

  to cost of home sales

$

91,116

28.7%

$

64,252

26.6%

$

80,751

29.4%

The table set forth below reconciles the Company's cash flows used in operations to cash inflows from operations excluding land purchases and development costs.  We believe this measure is useful to management and investors to provide perspective on underlying cash flow generation excluding swings related to the timing of land purchases and development costs.

Three Months Ended

September 30,2012

September 30,2011

June 30,2012

(Dollars in thousands)

Cash flows used in operations

$

(72,418)

$

(78,464)

$

(56,600)

Add: Land purchases (excl. seller financing and JV purchases)

101,363

74,736

96,584

Add: Land development costs

39,422

31,673

34,514

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

$

68,367

$

27,945

$

74,498

The table set forth below calculates EBITDA and Adjusted Homebuilding EBITDA.  Adjusted Homebuilding EBITDA means net income (loss) (plus cash distributions of income from unconsolidated joint ventures) before (a) income taxes, (b) homebuilding interest expense (c) expensing of previously capitalized interest included in cost of sales, (d) impairment charges and deposit write-offs, (e) (gain) loss on early extinguishment of debt (f) homebuilding depreciation and amortization, (g) amortization of stock-based compensation, (h) income (loss) from unconsolidated joint ventures and (i) income (loss) from financial services subsidiary.  Other companies may calculate Adjusted Homebuilding EBITDA (or similarly titled measures) differently.  We believe Adjusted Homebuilding EBITDA information is useful to management and investors as one measure of the Company's ability to service debt and obtain financing.  Adjusted Homebuilding EBITDA is a non-GAAP financial measure and due to the significance of the GAAP components excluded, should not be considered in isolation or as an alternative to net income, cash flow from operations or any other operating or liquidity performance measure prescribed by GAAP.

Three Months Ended

LTM Ended September 30,

September 30,2012

September 30,2011

June 30,2012

2012

2011

(Dollars in thousands)

Net income (loss)

$

21,710

$

(6,434)

$

14,263

$

59,829

$

(53,607)

Provision (benefit) for income taxes

194

150

189

89

(765)

Homebuilding interest amortized to cost of sales and interest expense

28,747

23,103

26,082

102,550

90,539

Homebuilding depreciation and amortization

590

687

575

2,386

2,512

Amortization of stock-based compensation

1,559

2,635

1,885

7,663

11,344

EBITDA

52,800

20,141

42,994

172,517

50,023

Add:

Cash distributions of income from unconsolidated joint ventures

1,125

       ?  

160

1,285

20

Impairment charges and deposit write-offs

       ?  

8,959

       ?  

549

16,836

Loss on early extinguishment of debt

       ?  

       ?  

       ?  

       ?  

23,839

Less:

Income (loss) from unconsolidated joint ventures

(39)

(455)

(1,146)

(1,409)

(1,066)

Income (loss) from financial services subsidiary

2,441

1,205

2,490

7,850

(154)

Adjusted Homebuilding EBITDA

$

51,523

$

28,350

$

41,810

$

167,910

$

91,938

Homebuilding revenues

$

318,541

$

241,793

$

274,872

$

1,110,271

$

802,261

Adjusted Homebuilding EBITDA Margin %

16.2%

11.7%

15.2%

15.1%

11.5%

The table set forth below reconciles net cash provided by (used in) operating activities, calculated and presented in accordance with GAAP, to Adjusted Homebuilding EBITDA:

Three Months Ended

LTM Ended September 30,

September 30,2012

September 30,2011

June 30,2012

2012

2011

(Dollars in thousands)

Net cash provided by (used in) operating activities

$

(72,418)

$

(78,464)

$

(56,600)

$

(183,172)

$

(363,040)

Add:

Provision (benefit) for income taxes

194

150

189

89

(765)

Homebuilding interest amortized to cost of sales and interest expense

28,747

23,103

26,082

102,550

90,539

Less:

Income (loss) from financial services subsidiary

2,441

1,205

2,490

7,850

(154)

Depreciation and amortization from financial services subsidiary

32

17

28

94

937

(Gain) loss on disposal of property and equipment

12

184

3

10

182

Net changes in operating assets and liabilities:

Trade and other receivables

4,681

816

471

5,192

4,785

Mortgage loans held for sale

18,119

14,967

4,430

37,940

13,418

Inventories-owned

70,645

67,719

70,986

206,502

290,063

Inventories-not owned

7,191

4,859

872

12,758

21,450

Other assets

(999)

2,341

1,105

(7,447)

(2,337)

Accounts payable and accrued liabilities

(2,152)

(5,735)

(3,204)

1,452

38,790

Adjusted Homebuilding EBITDA

$

51,523

$

28,350

$

41,810

$

167,910

$

91,938

The table set forth below reconciles the Company's total consolidated debt to adjusted net homebuilding debt and provides the Company's total consolidated debt to book capitalization and adjusted net homebuilding debt to total adjusted book capitalization ratios.  We believe that the adjusted net homebuilding debt to total adjusted book capitalization ratio is useful to management and investors as a measure of the Company's ability to obtain financing.  For purposes of the ratio of adjusted net homebuilding debt to total adjusted book capitalization, total adjusted book capitalization is adjusted net homebuilding debt plus stockholders' equity.  Adjusted net homebuilding debt excludes indebtedness of the Company's financial services subsidiary and additionally reflects the offset of cash and equivalents.

September 30,

June 30,

December 31,

September 30,

2012

2012

2011

2011

(Dollars in thousands)

Total consolidated debt

$

1,652,111

$

1,364,109

$

1,371,756

$

1,376,252

Less:

Financial services indebtedness

(71,035)

(44,427)

(46,808)

(52,528)

Homebuilding cash

(499,572)

(317,242)

(438,157)

(451,192)

Adjusted net homebuilding debt

1,081,504

1,002,440

886,791

872,532

Stockholders' equity

760,017

656,624

623,754

604,931

Total adjusted book capitalization

$

1,841,521

$

1,659,064

$

1,510,545

$

1,477,463

Total consolidated debt to book capitalization

68.5%

67.5%

68.7%

69.5%

Adjusted net homebuilding debt to total adjusted book capitalization

58.7%

60.4%

58.7%

59.1%

The table set forth below calculates pro forma stockholders' equity per common share.  The pro forma common shares outstanding include common shares issuable upon conversion of our outstanding Series B Preferred Stock, and excludes 3.9 million shares issued under a share lending agreement related to the Company's 6% Convertible Senior Subordinated Notes.  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 and excluding shares outstanding under the share lending agreement.

September 30,

June 30,

December 31,

2012

2012

2011

Actual common shares outstanding

215,576,688

199,933,447

198,563,273

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)

(3,919,904)

Pro forma common shares outstanding

359,469,570

343,826,329

342,456,155

Stockholders' equity (Dollars in thousands)

$

760,017

$

656,624

$

623,754

Divided by pro forma common shares outstanding

÷

359,469,570

÷

343,826,329

÷

342,456,155

Pro forma stockholders' equity per common share

$

2.11

$

1.91

$

1.82

 

SOURCE Standard Pacific Corp.