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Press release from PR Newswire

Standard Pacific Corp. Reports 2013 First Quarter Results

Thursday, May 02, 2013

Standard Pacific Corp. Reports 2013 First Quarter Results

16:02 EDT Thursday, May 02, 2013

Q1 2013 Pretax Income of $35.4 million, up 306% vs. Q1 2012
Q1 2013 Net New Order Value up 74% and Backlog Value up 117% vs. Q1 2012

IRVINE, Calif., May 2, 2013 /PRNewswire/ -- Standard Pacific Corp. (NYSE: SPF) today announced results for the first quarter ended March 31, 2013.

2013 First Quarter Highlights and Comparisons to the 2012 First Quarter

  • Net income of $21.8 million, or $0.05 per diluted share, vs. $8.5 million, or $0.02 per diluted share
    • Pretax income of $35.4 million, vs. $8.7 million
  • Net new orders of 1,394, up 49%; Dollar value of net new orders up 74%
  • Backlog of 1,851 homes, up 90%; Dollar value of backlog up 117%
  • 158 average active selling communities, flat compared to the prior year
  • Home sale revenues up 61%
    • Average selling price of $375 thousand, up 9%
    • 947 new home deliveries, up 48%
  • Gross margin from home sales of 21.0%, compared to 20.3%
  • SG&A rate from home sales of 13.0%, a 410 basis point improvement
  • $118.7 million of land purchases and development costs, compared to $65.8 million
  • Adjusted Homebuilding EBITDA of $63.8 million*, or 17.8%* of homebuilding revenues, compared to $31.8 million*, or 14.2%* of homebuilding revenues
  • Homebuilding cash balance of $308 million

Scott Stowell, the Company's Chief Executive Officer commented, "Reflecting the significant progress we've made as we continue to execute our strategy and the lift we've experienced from the current housing market recovery, the strong performance we demonstrated in 2012 has continued into 2013."  Mr. Stowell added, "I am pleased with the strong start to the year and look forward to the remainder of 2013."   

Revenues from home sales for the 2013 first quarter increased 61%, to $355.1 million, as compared to the prior year period, resulting primarily from a 48% increase in new home deliveries and a 9% increase in the Company's consolidated average home price to $375 thousand.  The increase in average home price was primarily attributable to our increasing focus on the move-up market segment and price increases within most of our markets.  The increase in new home deliveries was driven by a 70% year-over-year increase in the number of homes in beginning backlog expected to close during the quarter, partially offset by a decrease in specs sold and closed in the quarter. 

Gross margin from home sales for the 2013 first quarter increased to 21.0% compared to 20.3% in the prior year period.  The 70 basis point year-over-year increase was primarily attributable to price increases, a mix shift to higher margin communities, and improved margins from speculative homes sold and delivered during the quarter.  Excluding previously capitalized interest costs, gross margin from home sales was 28.8%* for the 2013 first quarter versus 28.7%* for the 2012 first quarter.    

The Company's 2013 first quarter SG&A expenses (including Corporate G&A) were $46.3 million compared to $37.7 million, down 410 basis points as a percentage of home sale revenues to 13.0%, compared to 17.1% for the 2012 first quarter.  The improvement in the Company's SG&A rate was primarily due to a 61% increase in revenues from home sales and reflects the operating leverage inherent in our business.

Net new orders for the 2013 first quarter increased 49% from the 2012 first quarter to 1,394 homes.  The  year-over-year growth is primarily attributable to a 49% increase in the Company's monthly sales absorption rate to 2.9 per community for the 2013 first quarter, compared to 2.0 per community for the 2012 first quarter, and a 35% increase from 2.2 per community for the 2012 fourth quarter.       

The dollar value of homes in backlog increased 117% to $719.7 million, or 1,851 homes, compared to $331.9 million, or 973 homes, for the 2012 first quarter, and increased 40% compared to $515.5 million, or 1,404 homes, for the 2012 fourth quarter.  The increase in year-over-year backlog value was driven primarily by a 49% increase in net new orders, a 14% increase in the average selling price of the homes in backlog and a shift to more to-be-built homes that have a longer construction cycle.  The gross margin of our homes in backlog was 23.1% at the end of the quarter as compared to 20.2% at the end of the first quarter of 2012.

The Company used $58.5 million of cash in operating activities for the 2013 first quarter versus $42.1 million in the 2012 first quarter.  During the 2013 first quarter, the Company spent $118.7 million on land purchases and development costs, compared to $65.8 million for the 2012 first quarter.  Excluding land purchases and development costs, cash inflows from operating activities for the 2013 first quarter were $60.2 million* versus $23.6 million* in the 2012 first quarter.  The year-over-year increase in cash inflows from operating activities (excluding land purchases and development costs) was primarily due to a 61% increase in home sale revenues. 

The Company purchased $71.5 million of land (1,167 homesites) during the 2013 first quarter, of which 34% (based on homesites) was located in Florida, 31% in California and 26% in Texas, with the balance spread throughout the Company's other operations.  As of March 31, 2013, the Company owned or controlled 32,123 homesites, of which 20,213 are owned and actively selling or under development, 6,434 are controlled or under option, and the remaining 5,476 homesites are held for future development or for sale.  The homesites owned that are actively selling or under development represent a 5.6 year supply based on the Company's deliveries for the trailing twelve months ended March 31, 2013.

Scott Stowell, the Company's Chief Executive Officer concluded, "I am pleased with our first quarter results and am excited about the strong spring selling season that has continued into the month of April.  In April, we recorded 527 net new orders, raising our April 30 ending backlog to 2,096 units (up 89% from last year) with an average selling price of $396 thousand and gross margin in backlog of 23.8%." 

Earnings Conference Call

A conference call to discuss the Company's 2013 first quarter results will be held at 12:00 p.m. Eastern time May 3, 2013.  The call will be broadcast live over the Internet and can be accessed through the Company's website at http://ir.standardpacifichomes.com.  The call will also be accessible via telephone by dialing (800) 390-5311 (domestic) or (719) 325-2316 (international); Passcode: 4768857.  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: 4768857.

About Standard Pacific

Standard Pacific Homes (NYSE: SPF) has been building beautiful, high-quality homes and neighborhoods since its founding in Southern California in 1965.  With a trusted reputation for quality craftsmanship, an outstanding customer experience and exceptional architectural design, the Company utilizes its decades of land acquisition, development and homebuilding expertise to successfully navigate today's complex landscape to acquire and build desirable communities in locations that meet the high expectations of the Company's targeted move-up homebuyers.  Currently offering new homes in major metropolitan areas in Arizona, California, Colorado, Florida, North Carolina, South Carolina, and Texas, we invite you to learn more about us by visiting standardpacifichomes.com.

This news release contains forward-looking statements.  These statements include but are not limited to statements regarding new home orders, deliveries, backlog, absorption rates, average home price, revenue, profitability, cash flow, liquidity, gross margin, overhead expenses and other costs; community count; product mix; execution on our strategy; our future performance and the future condition of the economy and the housing market.  Forward-looking statements are based on our current expectations or beliefs regarding future events or circumstances, and you should not place undue reliance on these statements.  Such statements involve known and unknown risks, uncertainties, assumptions and other factors many of which are out of the Company's control and difficult to forecast that may cause actual results to differ materially from those that may be described or implied.  Such factors include but are not limited to:  local and general economic and market conditions, including consumer confidence, employment rates, interest rates, the cost and availability of mortgage financing, and stock market, home and land valuations; the impact on economic conditions, terrorist attacks or the outbreak or escalation of armed conflict involving the United States; the cost and availability of suitable undeveloped land, building materials and labor; the cost and availability of construction financing and corporate debt and equity capital; our significant amount of debt and the impact of restrictive covenants in our debt agreements; our ability to repay our debt as it comes due; changes in our credit rating or outlook; the demand for and affordability of single-family homes; the supply of housing for sale; cancellations of purchase contracts by homebuyers; the cyclical and competitive nature of the Company's business; governmental regulation, including the impact of "slow growth" or similar initiatives; delays in the land entitlement process, development, construction, or the opening of new home communities; adverse weather conditions and natural disasters; environmental matters; risks relating to the Company's mortgage banking operations; future business decisions and the Company's ability to successfully implement the Company's operational and other strategies; litigation and warranty claims; and other risks discussed in the Company's filings with the Securities and Exchange Commission, including in the Company's Annual Report on Form 10-K for the year ended Dec. 31, 2012 and subsequent Quarterly Reports on Form 10-Q.  The Company assumes no, and hereby disclaims any, obligation to update any of the foregoing or any other forward-looking statements.  The Company nonetheless reserves the right to make such updates from time to time by press release, periodic report or other method of public disclosure without the need for specific reference to this press release.  No such update shall be deemed to indicate that other statements not addressed by such update remain correct or create an obligation to provide any other updates.

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

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

(Note: Tables Follow)

 

KEY STATISTICS AND FINANCIAL DATA1

As of or For the Three Months Ended

March 31,

March 31,

Percentage

December 31,

Percentage

2013

2012

or % Change

2012

or % Change

Operating Data

(Dollars in thousands)

Deliveries

947

642

48%

973

(3%)

Average selling price

$

375

$

343

9%

$

388

(3%)

Home sale revenues

$

355,126

$

220,317

61%

$

377,674

(6%)

Gross margin % (including land sales)

20.8%

20.0%

0.8%

18.7%

2.1%

Gross margin % from home sales

21.0%

20.3%

0.7%

20.8%

0.2%

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

28.8%

28.7%

0.1%

28.9%

(0.1%)

Incentive and stock-based compensation expense

$

4,848

$

3,905

24%

$

7,013

(31%)

Selling expenses

$

18,444

$

12,866

43%

$

19,362

(5%)

G&A expenses (excluding incentive and stock-based

compensation expenses)

$

23,002

$

20,921

10%

$

23,067

(0%)

SG&A expenses

$

46,294

$

37,692

23%

$

49,442

(6%)

SG&A % from home sales

13.0%

17.1%

(4.1%)

13.1%

(0.1%)

Net new orders (homes)

1,394

934

49%

983

42%

Net new orders (dollar value)

$

548,561

$

315,946

74%

$

385,461

42%

Average active selling communities

158

158

   ?  

150

5%

Monthly sales absorption rate per community

2.9

2.0

49%

2.2

35%

Cancellation rate

10%

13%

(3%)

15%

(5%)

Gross cancellations

162

144

13%

178

(9%)

Cancellations from current quarter sales

86

79

9%

71

21%

Backlog (homes)

1,851

973

90%

1,404

32%

Backlog (dollar value)

$

719,652

$

331,884

117%

$

515,469

40%

Cash flows (uses) from operating activities

$

(58,461)

$

(42,118)

(39%)

$

(111,980)

48%

Cash flows (uses) from investing activities

$

(1,601)

$

(2,346)

32%

$

(1,610)

1%

Cash flows (uses) from financing activities

$

(180)

$

6,607

$

(19,311)

99%

Land purchases

$

71,541

$

33,986

111%

$

204,796

(65%)

Adjusted Homebuilding EBITDA*

$

63,823

$

31,768

101%

$

68,802

(7%)

Adjusted Homebuilding EBITDA Margin %*

17.8%

14.2%

3.6%

16.4%

1.4%

Homebuilding interest incurred

$

35,027

$

35,315

(1%)

$

35,095

(0%)

Homebuilding interest capitalized to inventories owned

$

34,201

$

30,992

10%

$

33,664

2%

Homebuilding interest capitalized to investments in JVs

$

826

$

1,793

(54%)

$

851

(3%)

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

$

27,885

$

18,575

50%

$

33,784

(17%)

 

As of 

March 31,

December 31,

Percentage

2013

2012

or % Change

Balance Sheet Data

(Dollars in thousands, except per share amounts)

Homebuilding cash (including restricted cash)

$

308,029

$

366,808

(16%)

Inventories owned

$

2,049,702

$

1,971,418

4%

Homesites owned and controlled

32,123

30,767

4%

Homes under construction

1,907

1,574

21%

Completed specs

200

215

(7%)

Deferred tax asset valuation allowance

$

22,696

$

22,696

   ?  

Homebuilding debt

$

1,535,570

$

1,542,018

(0%)

Stockholders' equity

$

1,287,207

$

1,255,816

2%

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

$

3.55

$

3.48

2%

Total consolidated debt to book capitalization

55.9%

56.5%

(0.6%)

Adjusted net homebuilding debt to total adjusted book capitalization*

48.8%

48.3%

0.5%

1

All 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 March 31,

2013

2012

(Dollars in thousands, except per share amounts)

(Unaudited)

Homebuilding:

Home sale revenues

$

355,126

$

220,317

Land sale revenues

2,595

3,385

Total revenues

357,721

223,702

Cost of home sales

(280,612)

(175,595)

Cost of land sales

(2,583)

(3,366)

Total cost of sales

(283,195)

(178,961)

Gross margin

74,526

44,741

Gross margin %

20.8%

20.0%

Selling, general and administrative expenses

(46,294)

(37,692)

Income (loss) from unconsolidated joint ventures

1,134

(1,522)

Interest expense

   ?  

(2,530)

Other income (expense)

3,570

4,284

Homebuilding pretax income 

32,936

7,281

Financial Services:

Revenues

5,677

3,626

Expenses

(3,322)

(2,260)

Other income

102

63

Financial services pretax income

2,457

1,429

Income before taxes

35,393

8,710

Provision for income taxes

(13,569)

(187)

Net income 

21,824

8,523

  Less: Net income allocated to preferred shareholder

(8,903)

(3,674)

  Less: Net income allocated to unvested restricted stock

(22)

 ?   

Net income available to common stockholders

$

12,899

$

4,849

Income Per Common Share:

Basic

$

0.06

$

0.02

Diluted

$

0.05

$

0.02

Weighted Average Common Shares Outstanding:

Basic

214,166,912

195,109,252

Diluted

252,947,416

199,873,977

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

147,812,786

147,812,786

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

400,760,202

347,686,763

 

CONDENSED CONSOLIDATED BALANCE SHEETS

March 31,

December 31,

2013

2012

(Dollars in thousands)

ASSETS

(Unaudited)

Homebuilding:

Cash and equivalents

$

280,467

$

339,908

Restricted cash

27,562

26,900

Trade and other receivables

19,640

10,724

Inventories:

Owned

2,049,702

1,971,418

Not owned

72,019

71,295

Investments in unconsolidated joint ventures

53,024

52,443

Deferred income taxes, net

441,344

455,372

Other assets

39,322

41,918

Total Homebuilding Assets

2,983,080

2,969,978

Financial Services:

Cash and equivalents

5,846

6,647

Restricted cash

2,420

2,420

Mortgage loans held for sale, net

119,246

119,549

Mortgage loans held for investment, net

9,716

9,923

Other assets

5,391

4,557

Total Financial Services Assets

142,619

143,096

Total Assets

$

3,125,699

$

3,113,074

LIABILITIES AND EQUITY

Homebuilding:

Accounts payable

$

20,868

$

22,446

Accrued liabilities

186,712

198,144

Secured project debt and other notes payable

4,423

11,516

Senior notes payable

1,531,147

1,530,502

Total Homebuilding Liabilities

1,743,150

1,762,608

Financial Services:

Accounts payable and other liabilities

2,066

2,491

Mortgage credit facilities

93,276

92,159

Total Financial Services Liabilities

95,342

94,650

Total Liabilities

1,838,492

1,857,258

Equity:

Stockholders' Equity:

Preferred stock, $0.01 par value; 10,000,000 shares authorized; 450,829 shares issued and outstanding at March 31, 2013 and December 31, 2012

5

5

Common stock, $0.01 par value; 600,000,000 shares authorized; 215,210,139 and 213,245,488 shares issued and outstanding at March 31, 2013 and December 31, 2012, respectively

2,152

2,132

Additional paid-in capital

1,341,223

1,333,255

Accumulated deficit

(55,524)

(77,348)

Accumulated other comprehensive loss, net of tax

(649)

(2,228)

Total Equity

1,287,207

1,255,816

Total Liabilities and Equity

$

3,125,699

$

3,113,074

 

INVENTORIES

March 31,

December 31,

2013

2012

(Dollars in thousands)

Inventories Owned:

(Unaudited)

     Land and land under development

$ 1,450,962

$  1,444,161

     Homes completed and under construction

495,110

427,196

     Model homes

103,630

100,061

        Total inventories owned

$ 2,049,702

$  1,971,418

Inventories Owned by Segment:

     California

$ 1,087,285

$  1,086,159

     Southwest

504,391

461,201

     Southeast

458,026

424,058

        Total inventories owned

$ 2,049,702

$  1,971,418

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

2013

2012

(Dollars in thousands)

(Unaudited)

Cash Flows From Operating Activities:

Net income

$

21,824

$

8,523

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

Amortization of stock-based compensation

1,531

1,074

Deposit write-offs

 ?   

133

Deferred income taxes

13,374

 ?   

Other operating activities

1,412

2,128

Changes in cash and equivalents due to:

Trade and other receivables

(8,916)

(6,991)

Mortgage loans held for sale

140

8,533

Inventories - owned

(73,030)

(44,201)

Inventories - not owned

(4,940)

(2,627)

Other assets

1,829

1,028

Accounts payable

(1,578)

1,915

Accrued liabilities

(10,107)

(11,633)

Net cash provided by (used in) operating activities

(58,461)

(42,118)

Cash Flows From Investing Activities:

Investments in unconsolidated homebuilding joint ventures

(2,552)

(2,867)

Distributions of capital from unconsolidated joint ventures

1,320

989

Other investing activities

(369)

(468)

Net cash provided by (used in) investing activities

(1,601)

(2,346)

Cash Flows From Financing Activities:

Change in restricted cash

(662)

3,574

Principal payments on secured project debt and other notes payable

(7,093)

(466)

Net proceeds from (payments on) mortgage credit facilities

1,117

2,721

Proceeds from the exercise of stock options

6,458

778

Net cash provided by (used in) financing activities

(180)

6,607

Net increase (decrease) in cash and equivalents

(60,242)

(37,857)

Cash and equivalents at beginning of period

346,555

410,522

Cash and equivalents at end of period

$

286,313

$

372,665

Cash and equivalents at end of period

$

286,313

$

372,665

Homebuilding restricted cash at end of period

27,562

27,798

Financial services restricted cash at end of period

2,420

1,295

Cash and equivalents and restricted cash at end of period

$

316,295

$

401,758

 

REGIONAL OPERATING DATA

Three Months Ended March 31, 

2013

2012

% Change

New homes delivered:

California

400

225

78%

Arizona

63

46

37%

Texas

133

124

7%

Colorado

43

24

79%

Nevada

       ?   

3

(100%)

Florida

183

126

45%

Carolinas

125

94

33%

Consolidated total

947

642

48%

Unconsolidated joint ventures

14

4

250%

Total (including joint ventures)

961

646

49%

Three Months Ended March 31, 

2013

2012

% Change

(Dollars in thousands)

Average selling prices of homes delivered:

California

$

492

$

498

(1%)

Arizona

249

208

20%

Texas

348

298

17%

Colorado

400

377

6%

Nevada

      ?  

190

      ?  

Florida

259

246

5%

Carolinas

254

226

12%

Consolidated

375

343

9%

Unconsolidated joint ventures

510

460

11%

Total (including joint ventures)

$

377

$

344

10%

Three Months Ended March 31,

2013

2012

% Change

Net new orders:

California

482

327

47%

Arizona

75

83

(10%)

Texas

242

141

72%

Colorado

62

26

138%

Nevada

        ?  

5

(100%)

Florida

293

186

58%

Carolinas

240

166

45%

Consolidated total

1,394

934

49%

Unconsolidated joint ventures

9

8

13%

Total (including joint ventures)

1,403

942

49%

Three Months Ended March 31,

2013

2012

% Change

Average number of selling communities 

  during the period:

California

44

51

(14%)

Arizona

8

9

(11%)

Texas

29

19

53%

Colorado

7

6

17%

Nevada

         ?  

1

(100%)

Florida

37

37

         ?  

Carolinas

33

35

(6%)

Consolidated total

158

158

         ?  

Unconsolidated joint ventures

         ?  

3

(100%)

Total (including joint ventures)

158

161

(2%)

At March 31,

2013

2012

% Change

Homes

Dollar Value

Homes

Dollar Value

Homes

Dollar Value

(Dollars in thousands)

Backlog:

California

522

$

284,034

276

$

142,152

89%

100%

Arizona

89

24,886

94

18,384

(5%)

35%

Texas

313

126,276

166

53,438

89%

136%

Colorado

94

42,374

35

14,118

169%

200%

Nevada

?   

 ?   

5

953

(100%)

(100%)

Florida

476

134,880

222

57,632

114%

134%

Carolinas

357

107,202

175

45,207

104%

137%

Consolidated total

1,851

719,652

973

331,884

90%

117%

Unconsolidated joint ventures

7

3,241

7

3,304

          ?   

(2%)

Total (including joint ventures)

1,858

$

722,893

980

$

335,188

90%

116%

At March 31,

2013

2012

% Change

Homesites owned and controlled:

California

10,407

9,031

15%

Arizona

1,902

1,826

4%

Texas

5,165

4,199

23%

Colorado

1,174

666

76%

Nevada

1,124

1,130

(1%)

Florida

8,445

6,276

35%

Carolinas

3,906

2,989

31%

Total (including joint ventures)

32,123

26,117

23%

Homesites owned

25,689

19,935

29%

Homesites optioned or subject to contract 

5,837

4,960

18%

Joint venture homesites

597

1,222

(51%)

Total (including joint ventures)

32,123

26,117

23%

Homesites owned:

Raw lots

5,722

2,749

108%

Homesites under development

8,371

5,897

42%

Finished homesites

5,616

5,531

2%

Under construction or completed homes

2,583

1,872

38%

Held for sale

3,397

3,886

(13%)

Total

25,689

19,935

29%

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Each of the below measures are non-GAAP financial measures and other companies may calculate such non-GAAP measures differently.  Due to the significance of the GAAP components excluded, such measures should not be considered in isolation or as an alternative to operating performance measures prescribed by GAAP.

The table set forth below reconciles the Company's gross margin percentage from home sales to the gross margin percentage from home sales, excluding interest amortized to cost of home sales.  We believe these measures are useful to management and investors as they provide perspective on the underlying operating performance of the business excluding these charges and provide comparability with the Company's peer group.

 

Three Months Ended

March 31,

2013

Gross

Margin %

March 31,

2012

Gross

Margin %

December 31,

2012

Gross

Margin %

(Dollars in thousands)

Home sale revenues

$

355,126

$

220,317

$

377,674

Less: Cost of home sales

(280,612)

(175,595)

(299,105)

Gross margin from home sales

74,514

21.0%

44,722

20.3%

78,569

20.8%

Add: Capitalized interest included in cost of home sales

27,696

7.8%

18,556

8.4%

30,592

8.1%

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

$

102,210

28.8%

$

63,278

28.7%

$

109,161

28.9%

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

March 31,

2013

March 31,

2012

December 31,

2012

(Dollars in thousands)

Cash flows used in operations

$

(58,461)

$

(42,118)

$

(111,980)

Add: Cash land purchases 

71,541

33,986

204,796

Add: Land development costs

47,152

31,778

62,806

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

$

60,232

$

23,646

$

155,622

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.

 

March 31,

2013

December 31,

2012

March 31,

2012

(Dollars in thousands)

Total consolidated debt

$

1,628,846

$

1,634,177

$

1,375,609

Less:

Financial services indebtedness

(93,276)

(92,159)

(49,529)

Homebuilding cash

(308,029)

(366,808)

(394,368)

Adjusted net homebuilding debt

1,227,541

1,175,210

931,712

Stockholders' equity

1,287,207

1,255,816

637,912

Total adjusted book capitalization

$

2,514,748

$

2,431,026

$

1,569,624

Total consolidated debt to book capitalization

55.9%

56.5%

68.3%

Adjusted net homebuilding debt to total adjusted book capitalization

48.8%

48.3%

59.4%

The table set forth below calculates pro forma stockholders' equity per common share.  The Company believes that the pro forma stockholders' equity per common share information is useful to management and investors as a measure to determine the book value per common share after giving effect to the conversion of our outstanding preferred shares assuming full conversion to common stock.

 

March 31,

December 31,

2013

2012

Actual common shares outstanding

215,210,139

213,245,488

Add: Conversion of preferred shares to common shares

147,812,786

147,812,786

Pro forma common shares outstanding

363,022,925

361,058,274

Stockholders' equity (Dollars in thousands)

$

1,287,207

$

1,255,816

Divided by pro forma common shares outstanding

÷

363,022,925

÷

361,058,274

Pro forma stockholders' equity per common share

$

3.55

$

3.48

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

 

Three Months Ended

LTM Ended March 31,

March 31,

2013

March 31,

2012

December 31,

2012

2013

2012

(Dollars in thousands)

Net income 

$

21,824

$

8,523

$

486,925

$

544,722

$

6,903

Provision (benefit) for income taxes

13,569

187

(453,804)

(439,852)

31

Homebuilding interest amortized to cost of sales and interest expense

27,885

21,105

34,364

117,078

94,414

Homebuilding depreciation and amortization

628

590

617

2,410

2,571

Amortization of stock-based compensation

1,531

1,074

2,633

7,608

10,391

EBITDA

65,437

31,479

70,735

231,966

114,310

Add:

Cash distributions of income from unconsolidated joint ventures

1,875

       ?  

2,625

5,785

       ?  

Impairment charges and deposit write-offs

       ?  

133

       ?  

       ?  

15,467

Less:

Income (loss) from unconsolidated joint ventures

1,134

(1,522)

617

566

(1,058)

Income from financial services subsidiary

2,355

1,366

3,941

11,227

4,230

Adjusted Homebuilding EBITDA

$

63,823

$

31,768

$

68,802

$

225,958

$

126,605

Homebuilding revenues

$

357,721

$

223,702

$

419,843

$

1,370,977

$

962,996

Adjusted Homebuilding EBITDA Margin %

17.8%

14.2%

16.4%

16.5%

13.1%

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

 

Three Months Ended

LTM Ended March 31,

March 31,

2013

March 31,

2012

December 31,

2012

2013

2012

(Dollars in thousands)

Net cash provided by (used in) operating activities

$

(58,461)

$

(42,118)

$

(111,980)

$

(299,459)

$

(254,581)

Add:

Provision for income taxes

195

187

196

774

31

Homebuilding interest amortized to cost of sales and interest expense

27,885

21,105

34,364

117,078

94,414

Less:

Income from financial services subsidiary

2,355

1,366

3,941

11,227

4,230

Depreciation and amortization from financial services subsidiary

28

16

32

120

284

Loss on disposal of property and equipment

15

        ?   

22

52

177

Net changes in operating assets and liabilities:

Trade and other receivables

8,916

6,991

(12,944)

1,124

11,186

Mortgage loans held for sale

(140)

(8,533)

32,323

54,732

45,422

Inventories-owned

73,030

44,201

129,807

344,468

221,502

Inventories-not owned

4,940

2,627

20,861

33,864

19,544

Other assets

(1,829)

(1,028)

(1,696)

(3,419)

(4,100)

Accounts payable 

1,578

(1,915)

(5,988)

(1,124)

(3,959)

Accrued liabilities

10,107

11,633

(12,146)

(10,681)

1,837

Adjusted Homebuilding EBITDA

$

63,823

$

31,768

$

68,802

$

225,958

$

126,605

SOURCE Standard Pacific Corp.

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