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Press release from PR Newswire

Standard Pacific Corp. Reports 2013 Second Quarter Results

Thursday, July 25, 2013

Standard Pacific Corp. Reports 2013 Second Quarter Results

16:02 EDT Thursday, July 25, 2013

Q2 2013 Pretax Income of $51.1 million, up 254% vs. Q2 2012
Q2 2013 Net New Order Value up 73% and Backlog Value up 116% vs. Q2 2012

IRVINE, Calif., July 25, 2013 /PRNewswire/ -- Standard Pacific Corp. (NYSE: SPF) today announced results for the second quarter ended June 30, 2013.

2013 Second Quarter Highlights and Comparisons to the 2012 Second Quarter

  • Net income of $43.1 million, or $0.11 per diluted share, vs. $14.3 million, or $0.04 per diluted share
    • Pretax income of $51.1 million, vs. $14.5 million
  • Net new orders of 1,516, up 37%; Dollar value of net new orders up 73%
  • Backlog of 2,272 homes, up 79%; Dollar value of backlog up 116%
  • 164 average active selling communities, up 4% compared to the prior year
  • Home sale revenues up 58%
    • Average selling price of $397 thousand, up 18%
    • 1,095 new home deliveries, up 34%
  • Gross margin from home sales of 23.7%, compared to 20.5%
  • SG&A rate from home sales of 12.6%, a 270 basis point improvement
  • $299.0 million of land purchases and development costs, compared to $131.1 million
  • Adjusted Homebuilding EBITDA of $82.4 million*, or 18.8%* of homebuilding revenues, compared to $41.8 million*, or 15.2%* of homebuilding revenues

Scott Stowell, the Company's Chief Executive Officer commented, "Our strong second quarter performance reflects a continuation of the first quarter's positive momentum. The demand and pricing power we experienced in nearly all of our markets has resulted in a growing backlog with growing margins, which we believe are strong indicators of future performance."  Mr. Stowell added, "As I reflect back on our results over the first half of the year, I am pleased to see the execution of our strategy driving top line revenue and profitability." 

Revenues from home sales for the 2013 second quarter increased 58%, to $434.3 million, as compared to the prior year period, resulting primarily from a 34% increase in new home deliveries and an 18% increase in the Company's consolidated average home price to $397 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 second quarter increased to 23.7% compared to 20.5% in the prior year period.  The 320 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 30.7%* for the 2013 second quarter versus 29.4%* for the 2012 second quarter.    

The Company's 2013 second quarter SG&A expenses (including Corporate G&A) were $54.6 million compared to $42.0 million, down 270 basis points as a percentage of home sale revenues to 12.6%, compared to 15.3% for the 2012 second quarter.  The improvement in the Company's SG&A rate was primarily due to a 58% increase in revenues from home sales and reflects the operating leverage inherent in our business.

Net new orders for the 2013 second quarter increased 37% from the 2012 second quarter to 1,516 homes.  The year-over-year growth is primarily attributable to a 31% increase in the Company's monthly sales absorption rate to 3.1 per community (2.8 per community excluding the impact of the acquisition of 119 homes under contract for sale in Florida) for the 2013 second quarter, compared to 2.4 per community for the 2012 second quarter, and a 5% increase from 2.9 per community for the 2013 first quarter.       

The dollar value of homes in backlog increased 116% to $947.6 million, or 2,272 homes, compared to $439.7 million, or 1,266 homes, for the 2012 second quarter, and increased 32% compared to $719.7 million, or 1,851 homes, for the 2013 first quarter.  The increase in year-over-year backlog value was driven primarily by a 37% increase in net new orders, a 20% 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 Company used $90.7 million of cash in operating activities for the 2013 second quarter versus $56.6 million in the 2012 second quarter.  During the 2013 second quarter, the Company spent $299.0 million on land purchases and development costs, compared to $131.1 million for the 2012 second quarter.  Excluding land purchases and development costs, cash inflows from operating activities for the 2013 second quarter were $94.5 million* versus $74.5 million* in the 2012 second quarter.  The year-over-year increase in cash inflows from operating activities (excluding land purchases and development costs) was primarily due to a 58% increase in home sale revenues. 

The Company purchased $236.0 million of land (2,885 homesites) during the 2013 second quarter, of which 36% (based on homesites) was located in Florida, 31% in the Carolinas and 16% in California, with the balance spread throughout the Company's other operations.  As of June 30, 2013, the Company owned or controlled 35,126 homesites, of which 22,182 are owned and actively selling or under development, 7,629 are controlled or under option, and the remaining 5,315 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 June 30, 2013.

Earnings Conference Call

A conference call to discuss the Company's 2013 second quarter results will be held at 12:00 p.m. Eastern time July 26, 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 (877) 604-9674 (domestic) or (719) 325-4754 (international); Passcode: 7292055.  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: 7292055.

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, pricing power, revenue, profitability, cash flow, liquidity, gross margin, overhead expenses and other costs; community count; product mix; execution on our strategy; supply; demand; 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

June 30,

June 30,

Percentage

March 31,

Percentage

2013

2012

or % Change

2013

or % Change

Operating Data

(Dollars in thousands)

Deliveries

1,095

815

34%

947

16%

Average selling price

$

397

$

337

18%

$

375

6%

Home sale revenues

$

434,308

$

274,872

58%

$

355,126

22%

Gross margin % (including land sales)

23.4%

20.5%

2.9%

20.8%

2.6%

Gross margin % from home sales

23.7%

20.5%

3.2%

21.0%

2.7%

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

30.7%

29.4%

1.3%

28.8%

1.9%

Incentive and stock-based compensation expense

$

5,927

$

4,676

27%

$

4,848

22%

Selling expenses

$

22,146

$

16,311

36%

$

18,444

20%

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

$

26,525

$

20,965

27%

$

23,002

15%

SG&A expenses

$

54,598

$

41,952

30%

$

46,294

18%

SG&A % from home sales

12.6%

15.3%

(2.7%)

13.0%

(0.4%)

Net new orders (homes)

1,516

1,108

37%

1,394

9%

Net new orders (dollar value)

$

648,299

$

375,783

73%

$

548,561

18%

Average active selling communities

164

157

4%

158

4%

Monthly sales absorption rate per community

3.1

2.4

31%

2.9

5%

Cancellation rate

11%

11%

 ? 

10%

1%

Gross cancellations

184

138

33%

162

14%

Cancellations from current quarter sales

87

72

21%

86

1%

Backlog (homes)

2,272

1,266

79%

1,851

23%

Backlog (dollar value)

$

947,584

$

439,694

116%

$

719,652

32%

Cash flows (uses) from operating activities

$

(90,743)

$

(56,600)

(60%)

$

(58,461)

(55%)

Cash flows (uses) from investing activities

$

(125,253)

$

(5,545)

(2,159%)

$

(1,601)

(7,723%)

Cash flows (uses) from financing activities

$

10,319

$

(11,638)

$

(180)

Land purchases

$

235,991

$

96,584

144%

$

71,541

230%

Adjusted Homebuilding EBITDA*

$

82,376

$

41,810

97%

$

63,823

29%

Adjusted Homebuilding EBITDA Margin %*

18.8%

15.2%

3.6%

17.8%

1.0%

Homebuilding interest incurred

$

33,526

$

35,305

(5%)

$

35,027

(4%)

Homebuilding interest capitalized to inventories owned

$

32,782

$

31,876

3%

$

34,201

(4%)

Homebuilding interest capitalized to investments in JVs

$

744

$

1,812

(59%)

$

826

(10%)

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

$

30,662

$

24,465

25%

$

27,885

10%

 

As of 

June 30,

March 31,

Percentage

December 31,

Percentage

2013

2013

or % Change

2012

or % Change

Balance Sheet Data

(Dollars in thousands, except per share amounts)

Homebuilding cash (including restricted cash)

$

90,589

$

308,029

(71%)

$

366,808

(75%)

Inventories owned

$

2,325,490

$

2,049,702

13%

$

1,971,418

18%

Homesites owned and controlled

35,126

32,123

9%

30,767

14%

Homes under construction

2,277

1,907

19%

1,574

45%

Completed specs

139

200

(31%)

215

(35%)

Deferred tax asset valuation allowance

$

10,510

$

22,696

(54%)

$

22,696

(54%)

Homebuilding debt

$

1,537,021

$

1,535,570

0%

$

1,542,018

(0%)

Stockholders' equity

$

1,337,468

$

1,287,207

4%

$

1,255,816

7%

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

$

3.67

$

3.55

3%

$

3.48

5%

Total consolidated debt to book capitalization

55.0%

55.9%

(0.9%)

56.5%

(1.5%)

Adjusted net homebuilding debt to total adjusted book capitalization*

52.0%

48.8%

3.2%

48.3%

3.7%

1All statistical numbers exclude unconsolidated joint ventures unless noted otherwise.*Please see "Reconciliation of Non-GAAP Financial Measures" at the end of this release.

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended June 30,

Six Months Ended June 30,

2013

2012

2013

2012

(Dollars in thousands, except per share amounts)

(Unaudited)

Homebuilding:

Home sale revenues

$

434,308

$

274,872

$

789,434

$

495,189

Land sale revenues

4,373

 ?   

6,968

3,385

Total revenues

438,681

274,872

796,402

498,574

Cost of home sales

(331,503)

(218,586)

(612,115)

(394,181)

Cost of land sales

(4,416)

 ?   

(6,999)

(3,366)

Total cost of sales

(335,919)

(218,586)

(619,114)

(397,547)

Gross margin

102,762

56,286

177,288

101,027

Gross margin %

23.4%

20.5%

22.3%

20.3%

Selling, general and administrative expenses

(54,598)

(41,952)

(100,892)

(79,644)

Income (loss) from unconsolidated joint ventures

147

(1,146)

1,281

(2,668)

Interest expense

 ?   

(1,617)

 ?   

(4,147)

Other income (expense)

(1,247)

307

2,323

4,591

Homebuilding pretax income 

47,064

11,878

80,000

19,159

Financial Services:

Revenues

7,411

5,405

13,088

9,031

Expenses

(3,482)

(2,915)

(6,804)

(5,175)

Other income

151

84

253

147

Financial services pretax income

4,080

2,574

6,537

4,003

Income before taxes

51,144

14,452

86,537

23,162

Provision for income taxes

(8,008)

(189)

(21,577)

(376)

Net income 

43,136

14,263

64,960

22,786

  Less: Net income allocated to preferred shareholder

(14,293)

(6,130)

(23,991)

(9,807)

  Less: Net income allocated to unvested restricted stock

(66)

(15)

(82)

(12)

Net income available to common stockholders

$

28,777

$

8,118

$

40,887

$

12,967

Income Per Common Share:

Basic

$

0.12

$

0.04

$

0.18

$

0.07

Diluted

$

0.11

$

0.04

$

0.16

$

0.06

Weighted Average Common Shares Outstanding:

Basic

243,171,726

195,746,733

228,749,443

195,427,992

Diluted

281,708,696

201,340,622

267,274,060

200,564,039

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

120,779,819

147,812,786

134,221,626

147,812,786

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

402,488,515

349,153,408

401,495,686

348,376,825

 

CONDENSED CONSOLIDATED BALANCE SHEETS

June 30,

December 31,

2013

2012

(Dollars in thousands)

ASSETS

(Unaudited)

Homebuilding:

Cash and equivalents

$

65,127

$

339,908

Restricted cash

25,462

26,900

Trade and other receivables

30,372

10,724

Inventories:

Owned

2,325,490

1,971,418

Not owned

80,134

71,295

Investments in unconsolidated joint ventures

57,486

52,443

Deferred income taxes, net

432,817

455,372

Other assets

46,819

41,918

Total Homebuilding Assets

3,063,707

2,969,978

Financial Services:

Cash and equivalents

15,509

6,647

Restricted cash

1,795

2,420

Mortgage loans held for sale, net

107,580

119,549

Mortgage loans held for investment, net

11,264

9,923

Other assets

4,558

4,557

Total Financial Services Assets

140,706

143,096

Total Assets

$

3,204,413

$

3,113,074

LIABILITIES AND EQUITY

Homebuilding:

Accounts payable

$

22,066

$

22,446

Accrued liabilities

208,345

198,144

Secured project debt and other notes payable

5,192

11,516

Senior notes payable

1,531,829

1,530,502

Total Homebuilding Liabilities

1,767,432

1,762,608

Financial Services:

Accounts payable and other liabilities

2,549

2,491

Mortgage credit facilities

96,964

92,159

Total Financial Services Liabilities

99,513

94,650

Total Liabilities

1,866,945

1,857,258

Equity:

Stockholders' Equity:

Preferred stock, $0.01 par value; 10,000,000 shares authorized; 267,829 and 450,829 shares issued and outstanding at June 30, 2013 and December 31, 2012, respectively

3

5

Common stock, $0.01 par value; 600,000,000 shares authorized; 276,792,010 and 213,245,488 shares issued and outstanding at June 30, 2013 and December 31, 2012, respectively

2,768

2,132

Additional paid-in capital

1,347,085

1,333,255

Accumulated deficit

(12,388)

(77,348)

Accumulated other comprehensive loss, net of tax

  ?    

(2,228)

Total Equity

1,337,468

1,255,816

Total Liabilities and Equity

$

3,204,413

$

3,113,074

 

INVENTORIES

June 30,

December 31,

2013

2012

(Dollars in thousands)

Inventories Owned:

(Unaudited)

     Land and land under development

$     1,618,124

$     1,444,161

     Homes completed and under construction

591,990

427,196

     Model homes

115,376

100,061

        Total inventories owned

$     2,325,490

$     1,971,418

Inventories Owned by Segment:

     California

$     1,147,966

$     1,086,159

     Southwest

548,254

461,201

     Southeast

629,270

424,058

        Total inventories owned

$     2,325,490

$     1,971,418

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended June 30,

Six Months Ended June 30,

2013

2012

2013

2012

(Dollars in thousands)

(Unaudited)

Cash Flows From Operating Activities:

Net income

$

43,136

$

14,263

$

64,960

$

22,786

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

Amortization of stock-based compensation

2,444

1,885

3,975

2,959

Deposit write-offs

 ?   

 ?   

 ?   

133

Deferred income taxes

7,809

 ?   

21,183

 ?   

Other operating activities

2,084

1,912

3,496

4,040

Changes in cash and equivalents due to:

Trade and other receivables

(10,732)

(471)

(19,648)

(7,462)

Mortgage loans held for sale

11,818

(4,430)

11,958

4,103

Inventories - owned

(156,993)

(70,986)

(230,023)

(115,187)

Inventories - not owned

(4,770)

(872)

(9,710)

(3,499)

Other assets

(3,083)

(1,105)

(1,254)

(77)

Accounts payable

1,198

(3,368)

(380)

(1,453)

Accrued liabilities

16,346

6,572

6,239

(5,061)

Net cash provided by (used in) operating activities

(90,743)

(56,600)

(149,204)

(98,718)

Cash Flows From Investing Activities:

Investments in unconsolidated homebuilding joint ventures

(8,200)

(5,414)

(10,752)

(8,281)

Distributions of capital from unconsolidated joint ventures

249

806

1,569

1,795

Net cash paid for acquisitions

(113,793)

 ?   

(113,793)

 ?   

Other investing activities

(3,509)

(937)

(3,878)

(1,405)

Net cash provided by (used in) investing activities

(125,253)

(5,545)

(126,854)

(7,891)

Cash Flows From Financing Activities:

Change in restricted cash

2,725

2,663

2,063

6,237

Principal payments on secured project debt and other notes payable

(124)

(178)

(7,217)

(644)

Principal payments on senior subordinated notes payable

 ?   

(9,990)

 ?   

(9,990)

Net proceeds from (payments on) mortgage credit facilities

3,688

(5,102)

4,805

(2,381)

Payment of issuance costs in connection with preferred shareholder equity transactions

(347)

 ?   

(347)

 ?   

Proceeds from the exercise of stock options

4,377

969

10,835

1,747

Net cash provided by (used in) financing activities

10,319

(11,638)

10,139

(5,031)

Net increase (decrease) in cash and equivalents

(205,677)

(73,783)

(265,919)

(111,640)

Cash and equivalents at beginning of period

286,313

372,665

346,555

410,522

Cash and equivalents at end of period

$

80,636

$

298,882

$

80,636

$

298,882

Cash and equivalents at end of period

$

80,636

$

298,882

$

80,636

$

298,882

Homebuilding restricted cash at end of period

25,462

25,135

25,462

25,135

Financial services restricted cash at end of period

1,795

1,295

1,795

1,295

Cash and equivalents and restricted cash at end of period

$

107,893

$

325,312

$

107,893

$

325,312

 

REGIONAL OPERATING DATA

Three Months Ended June 30, 

Six Months Ended June 30, 

2013

2012

% Change

2013

2012

% Change

New homes delivered:

California

419

316

33%

819

541

51%

Arizona

57

64

(11%)

120

110

9%

Texas

155

137

13%

288

261

10%

Colorado

38

23

65%

81

47

72%

Nevada

?   

6

(100%)

    ?   

9

(100%)

Florida

239

134

78%

422

260

62%

Carolinas

187

135

39%

312

229

36%

      Consolidated total

1,095

815

34%

2,042

1,457

40%

Unconsolidated joint ventures

7

10

(30%)

21

14

50%

       Total (including joint ventures)

1,102

825

34%

2,063

1,471

40%

 

Three Months Ended June 30,

Six Months Ended June 30,

2013

2012

% Change

2013

2012

% Change

(Dollars in thousands)

Average selling prices of homes delivered:

California

$

538

$

465

16%

$

515

$

479

8%

Arizona

249

206

21%

249

207

20%

Texas

399

300

33%

375

299

25%

Colorado

441

377

17%

419

377

11%

Nevada

      ?  

194

      ?  

      ?  

192

      ?  

Florida

261

230

13%

260

237

10%

Carolinas

289

244

18%

275

236

17%

       Consolidated

397

337

18%

387

340

14%

Unconsolidated joint ventures

474

426

11%

498

436

14%

       Total (including joint ventures)

$

397

$

338

17%

$

388

$

341

14%

 

Three Months Ended June 30,

Six Months Ended June 30,

2013

2012

% Change

2013

2012

% Change

Net new orders:

California

513

425

21%

995

752

32%

Arizona

78

93

(16%)

153

176

(13%)

Texas

216

151

43%

458

292

57%

Colorado

65

42

55%

127

68

87%

Nevada

        ?  

1

(100%)

        ?  

6

(100%)

Florida

443

208

113%

736

394

87%

Carolinas

201

188

7%

441

354

25%

Consolidated total

1,516

1,108

37%

2,910

2,042

43%

Unconsolidated joint ventures

1

16

(94%)

10

24

(58%)

Total (including joint ventures)

1,517

1,124

35%

2,920

2,066

41%

 

Three Months Ended June 30,

Six Months Ended June 30,

2013

2012

% Change

2013

2012

% Change

Average number of selling communities 

  during the period:

California

46

53

(13%)

46

52

(12%)

Arizona

9

7

29%

8

8

        ?  

Texas

30

20

50%

30

20

50%

Colorado

8

6

33%

7

6

17%

Florida

41

36

14%

39

36

8%

Carolinas

30

35

(14%)

31

35

(11%)

Consolidated total

164

157

4%

161

157

3%

Unconsolidated joint ventures

         ?  

2

(100%)

         ?  

3

(100%)

Total (including joint ventures)

164

159

3%

161

160

1%

 

At June 30,

2013

2012

% Change

Homes

Dollar Value

Homes

Dollar Value

Homes

Dollar Value

(Dollars in thousands)

Backlog:

California

616

$

366,617

385

$

191,654

60%

91%

Arizona

110

36,330

123

25,648

(11%)

42%

Texas

374

156,036

180

62,773

108%

149%

Colorado

121

57,425

54

21,317

124%

169%

Florida

680

220,621

296

76,986

130%

187%

Carolinas

371

110,555

228

61,316

63%

80%

Consolidated total

2,272

947,584

1,266

439,694

79%

116%

Unconsolidated joint ventures

1

586

13

5,997

(92%)

(90%)

Total (including joint ventures)

2,273

$

948,170

1,279

$

445,691

78%

113%

 

At June 30,

2013

2012

% Change

Homesites owned and controlled:

California

10,150

8,926

14%

Arizona

1,975

1,820

9%

Texas

5,220

4,038

29%

Colorado

1,268

690

84%

Nevada

1,124

1,124

          ?   

Florida

10,481

6,937

51%

Carolinas

4,908

4,222

16%

Total (including joint ventures)

35,126

27,757

27%

Homesites owned

27,497

21,369

29%

Homesites optioned or subject to contract 

7,039

5,176

36%

Joint venture homesites

590

1,212

(51%)

Total (including joint ventures)

35,126

27,757

27%

Homesites owned:

Raw lots

7,300

3,570

104%

Homesites under development

8,027

6,582

22%

Finished homesites

5,865

5,464

7%

Under construction or completed homes

2,908

2,089

39%

Held for sale

3,397

3,664

(7%)

Total

27,497

21,369

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

June 30, 2013

GrossMargin %

June 30,2012

GrossMargin %

March 31, 2013

GrossMargin %

(Dollars in thousands)

Home sale revenues

$

434,308

$

274,872

$

355,126

Less: Cost of home sales

(331,503)

(218,586)

(280,612)

Gross margin from home sales

102,805

23.7%

56,286

20.5%

74,514

21.0%

Add: Capitalized interest included in cost of home sales

30,337

7.0%

24,465

8.9%

27,696

7.8%

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

$

133,142

30.7%

$

80,751

29.4%

$

102,210

28.8%

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

June 30,2013

June 30,2012

March 31,2013

(Dollars in thousands)

Cash flows used in operations

$

(90,743)

$

(56,600)

$

(58,461)

Add: Cash land purchases included in operating activities

122,180

96,584

71,541

Add: Land development costs

63,028

34,514

47,152

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

$

94,465

$

74,498

$

60,232

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.

June 30,2013

March 31,2013

December 31,2012

June 30,2012

(Dollars in thousands)

Total consolidated debt

$

1,633,985

$

1,628,846

$

1,634,177

$

1,364,109

Less:

Financial services indebtedness

(96,964)

(93,276)

(92,159)

(44,427)

Homebuilding cash

(90,589)

(308,029)

(366,808)

(317,242)

Adjusted net homebuilding debt

1,446,432

1,227,541

1,175,210

1,002,440

Stockholders' equity

1,337,468

1,287,207

1,255,816

656,624

Total adjusted book capitalization

$

2,783,900

$

2,514,748

$

2,431,026

$

1,659,064

Total consolidated debt to book capitalization

55.0%

55.9%

56.5%

67.5%

Adjusted net homebuilding debt to total adjusted book capitalization

52.0%

48.8%

48.3%

60.4%

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.

June 30,

March 31,

December 31,

2013

2013

2012

Actual common shares outstanding

276,792,010

215,210,139

213,245,488

Add: Conversion of preferred shares to common shares

87,812,786

147,812,786

147,812,786

Pro forma common shares outstanding

364,604,796

363,022,925

361,058,274

Stockholders' equity (Dollars in thousands)

$

1,337,468

$

1,287,207

$

1,255,816

Divided by pro forma common shares outstanding

÷

364,604,796

÷

363,022,925

÷

361,058,274

Pro forma stockholders' equity per common share

$

3.67

$

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 June 30,

June 30,2013

June 30,2012

March 31,2013

2013

2012

(Dollars in thousands)

Net income 

$

43,136

$

14,263

$

21,824

$

573,595

$

31,685

Provision (benefit) for income taxes

8,008

189

13,569

(432,033)

45

Homebuilding interest amortized to cost of sales and interest expense

30,662

26,082

27,885

121,658

96,906

Homebuilding depreciation and amortization

702

575

628

2,537

2,483

Amortization of stock-based compensation

2,444

1,885

1,531

8,167

8,739

EBITDA

84,952

42,994

65,437

273,924

139,858

Add:

Cash distributions of income from unconsolidated joint ventures

1,500

160

1,875

7,125

160

Impairment charges and deposit write-offs

       ?  

       ?  

       ?  

       ?  

9,508

Less:

Income (loss) from unconsolidated joint ventures

147

(1,146)

1,134

1,859

(1,825)

Income from financial services subsidiary

3,929

2,490

2,355

12,666

6,614

Adjusted Homebuilding EBITDA

$

82,376

$

41,810

$

63,823

$

266,524

$

144,737

Homebuilding revenues

$

438,681

$

274,872

$

357,721

$

1,534,786

$

1,033,523

Adjusted Homebuilding EBITDA Margin %

18.8%

15.2%

17.8%

17.4%

14.0%

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 30,2013

June 30,2012

March 31,2013

2013

2012

(Dollars in thousands)

Net cash provided by (used in) operating activities

$

(90,743)

$

(56,600)

$

(58,461)

$

(333,602)

$

(189,218)

Add:

Provision for income taxes, net of deferred component

199

189

195

784

45

Homebuilding interest amortized to cost of sales and interest expense

30,662

26,082

27,885

121,658

96,906

Less:

Income from financial services subsidiary

3,929

2,490

2,355

12,666

6,614

Depreciation and amortization from financial services subsidiary

28

28

28

120

79

Loss on disposal of property and equipment

1

3

15

50

182

Net changes in operating assets and liabilities:

Trade and other receivables

10,732

471

8,916

11,385

1,327

Mortgage loans held for sale

(11,818)

4,430

(140)

38,484

34,788

Inventories-owned

156,993

70,986

73,030

430,475

203,576

Inventories-not owned

4,770

872

4,940

37,762

10,426

Other assets

3,083

1,105

(1,829)

(1,441)

(4,107)

Accounts payable 

(1,198)

3,368

1,578

(5,690)

202

Accrued liabilities

(16,346)

(6,572)

10,107

(20,455)

(2,333)

Adjusted Homebuilding EBITDA

$

82,376

$

41,810

$

63,823

$

266,524

$

144,737

SOURCE Standard Pacific Corp.

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