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Press release from PR Newswire

Standard Pacific Corp. Reports 2013 Third Quarter Results

Thursday, October 31, 2013

Standard Pacific Corp. Reports 2013 Third Quarter Results

16:02 EDT Thursday, October 31, 2013

Q3 2013 Pretax Income of $70.1 million, up 220% vs. Q3 2012
Q3 2013 Net New Order Value up 38% and Backlog Value up 93% vs. Q3 2012

IRVINE, Calif., Oct. 31, 2013 /PRNewswire/ -- Standard Pacific Corp. (NYSE: SPF) today announced results for the third quarter ended September 30, 2013.

2013 Third Quarter Highlights and Comparisons to the 2012 Third Quarter

  • Net income of $58.9 million, or $0.15 per diluted share, vs. $21.7 million, or $0.05 per diluted share
  • Pretax income of $70.1 million, vs. $21.9 million
  • Net new orders of 1,110, up 12%; Dollar value of net new orders up 38%
  • Backlog of 2,165 homes, up 55%; Dollar value of backlog up 93%
  • 168 average active selling communities, up 8%
  • Home sale revenues up 61%
  • Average selling price of $420 thousand, up 14%
  • 1,217 new home deliveries, up 41%
  • Gross margin from home sales of 25.3%, compared to 20.2%
  • SG&A rate from home sales of 12.1%, a 150 basis point improvement
  • Operating margin from home sales of $67.4 million, or 13.2%, compared to $20.9 million, or 6.6%
  • $141.7 million of land purchases and development costs, compared to $246.2 million

Scott Stowell, the Company's Chief Executive Officer commented, "The positive performance we achieved during the first half of 2013 continued into the third quarter." Mr. Stowell added, "Notwithstanding the tempered approach to homebuying that impacted the market during the third quarter, the benefit of our long-term growth strategy continued to unfold as disciplined land buying, moving up market, and new home designs, all led to a solid third quarter performance." 

Net income for the 2013 third quarter was $58.9 million, or $0.15 per diluted share, compared to $21.7 million, or $0.05 per diluted share.  Pretax income for the 2013 third quarter increased 220% to $70.1 million compared to $21.9 million for the prior year period.  The provision for income taxes for the 2013 third quarter included a non-cash tax benefit of $16.1 million related to the reduction of the Company's accrual for unrecognized tax benefits.

Revenues from home sales for the 2013 third quarter increased 61%, to $511.1 million, as compared to the prior year period, resulting primarily from a 41% increase in new home deliveries and a 14% increase in the Company's consolidated average home price to $420 thousand.  The increase in average home price was primarily attributable to our move-up market focus and general price increases within most of our markets.  The increase in new home deliveries was driven by a 62% year-over-year increase in the number of homes in beginning backlog expected to close during the quarter, partially offset by a decrease in speculative homes sold and closed in the quarter. 

Gross margin from home sales for the 2013 third quarter increased to 25.3% compared to 20.2% in the prior year period.  The 510 basis point year-over-year increase was primarily attributable to price increases and a decrease in the use of sales incentives.  Excluding previously capitalized interest costs, gross margin from home sales was 31.2%* for the 2013 third quarter versus 28.7%* for the 2012 third quarter.    

The Company's 2013 third quarter SG&A expenses (including Corporate G&A) were $61.9 million compared to $43.1 million, down 150 basis points as a percentage of home sale revenues to 12.1%, compared to 13.6% for the 2012 third 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 third quarter increased 12% from the 2012 third quarter to 1,110 homes.  The year-over-year growth is primarily attributable to an increase in the Company's monthly sales absorption rate to 2.2 per community for the 2013 third quarter, compared to 2.1 per community for the 2012 third quarter. The Company's cancellation rate for the 2013 third quarter was 20%, compared to 14% for the 2012 third quarter and 11% for the 2013 second quarter.  Our 2013 third quarter cancellation rate increased from the historically low levels we experienced in the prior quarter and the prior year period, but was consistent with our average historical cancellation rate over the last 10 years. As a percentage of beginning backlog our cancellation rate was 6.5% in the quarter, a 90 basis point reduction from the same period last year.      

The dollar value of homes in backlog increased 93% to $964.1 million, or 2,165 homes, compared to $498.7 million, or 1,394 homes, for the 2012 third quarter, and increased 2% compared to $947.6 million, or 2,272 homes, for the 2013 second quarter.  The increase in year-over-year backlog value was driven primarily by a 24% increase in the average selling price of the homes in backlog, a 12% increase in net new orders and a shift to more to-be-built homes that have a longer construction cycle. 

Cash provided by operating activities was $22.8 million for the 2013 third quarter versus cash used in operating activities of $72.4 million in the 2012 third quarter.  During the 2013 third quarter, the Company spent $141.7 million on land purchases and development costs, compared to $246.2 million for the 2012 third quarter, of which $140.8 million of cash land purchases and development costs were included in cash flows used in operating activities.  Excluding land purchases and development costs, cash inflows from operating activities for the 2013 third quarter were $164.5 million* versus $68.4 million* in the 2012 third 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 $69.2 million of land (628 homesites) during the 2013 third quarter, of which 46% (based on homesites) was located in Florida, 21% in the Carolinas and 18% in California, with the balance spread throughout the Company's other operations.  As of September 30, 2013, the Company owned or controlled 35,643 homesites, of which 21,993 are owned and actively selling or under development, 8,707 are controlled or under option, and the remaining 4,943 homesites are held for future development or for sale.  The homesites owned that are actively selling or under development represent a 5.2 year supply based on the Company's deliveries for the trailing twelve months ended September 30, 2013.

Earnings Conference Call

A conference call to discuss the Company's 2013 third quarter results will be held at 12:00 p.m. Eastern time November 1, 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) 768-6490 (domestic) or (785) 830-7987 (international); Passcode: 8782855.  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: 8782855.

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; the benefit of, and 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

September 30,

September 30,

Percentage

June 30,

Percentage

2013

2012

or % Change

2013

or % Change

Operating Data

(Dollars in thousands)

Deliveries

1,217

861

41%

1,095

11%

Average selling price

$

420

$

369

14%

$

397

6%

Home sale revenues

$

511,059

$

317,389

61%

$

434,308

18%

Gross margin % (including land sales)

25.3%

20.1%

5.2%

23.4%

1.9%

Gross margin % from home sales

25.3%

20.2%

5.1%

23.7%

1.6%

Gross margin % from home sales (excluding interest amortized

to cost of home sales)*

31.2%

28.7%

2.5%

30.7%

0.5%

Incentive and stock-based compensation expense

$

8,023

$

4,768

68%

$

5,927

35%

Selling expenses

$

24,301

$

17,069

42%

$

22,146

10%

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

$

29,615

$

21,284

39%

$

26,525

12%

SG&A expenses

$

61,939

$

43,121

44%

$

54,598

13%

SG&A % from home sales

12.1%

13.6%

(1.5%)

12.6%

(0.5%)

Operating margin

$

67,426

$

20,924

222%

$

48,207

40%

Operating margin % from home sales

13.2%

6.6%

6.6%

11.1%

2.1%

Net new orders (homes)

1,110

989

12%

1,516

(27%)

Net new orders (dollar value)

$

510,668

$

368,772

38%

$

648,299

(21%)

Average active selling communities

168

156

8%

164

2%

Monthly sales absorption rate per community

2.2

2.1

4%

3.1

(29%)

Cancellation rate

20%

14%

6%

11%

9%

Gross cancellations

272

161

69%

184

48%

Cancellations from current quarter sales

124

67

85%

87

43%

Backlog (homes)

2,165

1,394

55%

2,272

(5%)

Backlog (dollar value)

$

964,148

$

498,739

93%

$

947,584

2%

Cash flows (uses) from operating activities

$

22,808

$

(72,418)

$

(90,743)

Cash flows (uses) from investing activities

$

(2,296)

$

(95,704)

98%

$

(125,253)

98%

Cash flows (uses) from financing activities

$

261,980

$

348,696

(25%)

$

10,319

2,439%

Land purchases (incl. seller financing and JV purchases)

$

69,196

$

206,740

(67%)

$

235,991

(71%)

Adjusted Homebuilding EBITDA*

$

101,953

$

51,523

98%

$

82,376

24%

Adjusted Homebuilding EBITDA Margin %*

19.9%

16.2%

3.7%

18.8%

1.1%

Homebuilding interest incurred

$

34,766

$

36,112

(4%)

$

33,526

4%

Homebuilding interest capitalized to inventories owned

$

34,118

$

32,604

5%

$

32,782

4%

Homebuilding interest capitalized to investments in JVs

$

648

$

1,839

(65%)

$

744

(13%)

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

$

30,322

$

27,078

12%

$

30,662

(1%)

As of 

September 30,

June 30,

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)

$

373,523

$

90,589

312%

$

366,808

2%

Inventories owned

$

2,410,649

$

2,325,490

4%

$

1,971,418

22%

Homesites owned and controlled

35,643

35,126

1%

30,767

16%

Homes under construction

2,373

2,277

4%

1,574

51%

Completed specs

183

139

32%

215

(15%)

Deferred tax asset valuation allowance

$

10,510

$

10,510

   ?  

$

22,696

(54%)

Homebuilding debt

$

1,837,622

$

1,537,021

20%

$

1,542,018

19%

Stockholders' equity

$

1,400,026

$

1,337,468

5%

$

1,255,816

11%

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

$

3.84

$

3.67

5%

$

3.48

10%

Total consolidated debt to book capitalization

57.6%

55.0%

2.6%

56.5%

1.1%

Adjusted net homebuilding debt to total adjusted book capitalization*

51.1%

52.0%

(0.9%)

48.3%

2.8%

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,

2013

2012

2013

2012

(Dollars in thousands, except per share amounts)

(Unaudited)

Homebuilding:

Home sale revenues

$

511,059

$

317,389

$

1,300,493

$

812,578

Land sale revenues

697

1,152

7,665

4,537

Total revenues

511,756

318,541

1,308,158

817,115

Cost of home sales

(381,694)

(253,344)

(993,809)

(647,525)

Cost of land sales

(672)

(1,092)

(7,671)

(4,458)

Total cost of sales

(382,366)

(254,436)

(1,001,480)

(651,983)

Gross margin

129,390

64,105

306,678

165,132

Gross margin %

25.3%

20.1%

23.4%

20.2%

Selling, general and administrative expenses

(61,939)

(43,121)

(162,831)

(122,765)

Income (loss) from unconsolidated joint ventures

(32)

(39)

1,249

(2,707)

Interest expense

 ?   

(1,669)

 ?   

(5,816)

Other income (expense)

301

117

2,624

4,708

Homebuilding pretax income 

67,720

19,393

147,720

38,552

Financial Services:

Revenues

5,839

5,218

18,927

14,249

Expenses

(3,590)

(2,777)

(10,394)

(7,952)

Other income

167

70

420

217

Financial services pretax income

2,416

2,511

8,953

6,514

Income before taxes

70,136

21,904

156,673

45,066

Provision for income taxes

(11,201)

(194)

(32,778)

(570)

Net income 

58,935

21,710

123,895

44,496

  Less: Net income allocated to preferred shareholder

(14,166)

(9,100)

(40,353)

(18,980)

  Less: Net income allocated to unvested restricted stock

(90)

(22)

(169)

(31)

Net income available to common stockholders

$

44,679

$

12,588

$

83,373

$

25,485

Income Per Common Share:

Basic

$

0.16

$

0.06

$

0.34

$

0.13

Diluted

$

0.15

$

0.05

$

0.31

$

0.12

Weighted Average Common Shares Outstanding:

Basic

276,966,995

204,485,294

244,998,581

198,469,130

Diluted

314,897,098

235,273,648

283,189,878

210,441,932

Weighted average additional common shares outstanding

if preferred shares converted to common shares

87,812,786

147,812,786

118,582,017

147,812,786

Total weighted average diluted common shares outstanding

if preferred shares converted to common shares

402,709,884

383,086,434

401,771,895

358,254,718

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

December 31,

2013

2012

(Dollars in thousands)

ASSETS

(Unaudited)

Homebuilding:

Cash and equivalents

$

345,999

$

339,908

Restricted cash

27,524

26,900

Trade and other receivables

19,186

10,724

Inventories:

Owned

2,410,649

1,971,418

Not owned

103,734

71,295

Investments in unconsolidated joint ventures

58,330

52,443

Deferred income taxes, net

405,912

455,372

Other assets

48,812

41,918

Total Homebuilding Assets

3,420,146

2,969,978

Financial Services:

Cash and equivalents

17,129

6,647

Restricted cash

1,795

2,420

Mortgage loans held for sale, net

75,211

119,549

Mortgage loans held for investment, net

10,989

9,923

Other assets

4,926

4,557

Total Financial Services Assets

110,050

143,096

Total Assets

$

3,530,196

$

3,113,074

LIABILITIES AND EQUITY

Homebuilding:

Accounts payable

$

29,301

$

22,446

Accrued liabilities

196,478

198,144

Secured project debt and other notes payable

5,105

11,516

Senior notes payable

1,832,517

1,530,502

Total Homebuilding Liabilities

2,063,401

1,762,608

Financial Services:

Accounts payable and other liabilities

2,589

2,491

Mortgage credit facilities

64,180

92,159

Total Financial Services Liabilities

66,769

94,650

Total Liabilities

2,130,170

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 September 30, 2013 and December 31, 2012, respectively

3

5

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

    authorized; 277,064,975 and 213,245,488 shares 

    issued and outstanding at September 30, 2013 and 

    December 31, 2012, respectively

2,770

2,132

Additional paid-in capital

1,350,706

1,333,255

Accumulated earnings (deficit)

46,547

(77,348)

Accumulated other comprehensive loss, net of tax

  ?    

(2,228)

Total Equity

1,400,026

1,255,816

Total Liabilities and Equity

$

3,530,196

$

3,113,074

 

INVENTORIES

September 30,

December 31,

2013

2012

(Dollars in thousands)

Inventories Owned:

(Unaudited)

     Land and land under development

$     1,636,011

$     1,444,161

     Homes completed and under construction

647,271

427,196

     Model homes

127,367

100,061

        Total inventories owned

$     2,410,649

$     1,971,418

Inventories Owned by Segment:

     California

$     1,151,866

$     1,086,159

     Southwest

581,280

461,201

     Southeast

677,503

424,058

        Total inventories owned

$     2,410,649

$     1,971,418

 

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months EndedSeptember 30,

Nine Months EndedSeptember 30,

2013

2012

2013

2012

(Dollars in thousands)

(Unaudited)

Cash Flows From Operating Activities:

Net income

$

58,935

$

21,710

$

123,895

$

44,496

Adjustments to reconcile net income to net cash 

provided by (used in) operating activities:

Amortization of stock-based compensation

2,681

1,559

6,656

4,518

Deposit write-offs

 ?   

 ?   

 ?   

133

Deferred income taxes

27,306

 ?   

48,489

 ?   

Other operating activities

1,096

1,798

4,592

5,838

Changes in cash and equivalents due to:

Trade and other receivables

11,186

(4,681)

(8,462)

(12,143)

Mortgage loans held for sale

32,221

(18,119)

44,179

(14,016)

Inventories - owned

(84,352)

(70,645)

(314,375)

(185,832)

Inventories - not owned

(21,990)

(7,191)

(31,700)

(10,690)

Other assets

1,655

999

401

922

Accounts payable

7,235

82

6,855

(1,371)

Accrued liabilities

(13,165)

2,070

(6,926)

(2,991)

Net cash provided by (used in) operating activities

22,808

(72,418)

(126,396)

(171,136)

Cash Flows From Investing Activities:

Investments in unconsolidated homebuilding joint ventures

(2,190)

(44,797)

(12,942)

(53,078)

Distributions of capital from unconsolidated joint ventures

750

10,145

2,319

11,940

Net cash paid for acquisitions

 ?   

(60,752)

(113,793)

(60,752)

Other investing activities

(856)

(300)

(4,734)

(1,705)

Net cash provided by (used in) investing activities

(2,296)

(95,704)

(129,150)

(103,595)

Cash Flows From Financing Activities:

Change in restricted cash

(2,062)

(1,203)

1

5,034

Principal payments on secured project debt and other notes payable

(72)

(138)

(7,289)

(782)

Principal payments on senior subordinated notes payable

 ?   

 ?   

 ?   

(9,990)

Proceeds from the issuance of senior notes payable

300,000

253,000

300,000

253,000

Payment of debt issuance costs

(4,045)

(8,081)

(4,045)

(8,081)

Net proceeds from (payments on) mortgage credit facilities

(32,784)

26,608

(27,979)

24,227

Proceeds from the issuance of common stock

 ?   

75,849

 ?   

75,849

Payment of common stock issuance costs

 ?   

(3,913)

 ?   

(3,913)

Payment of issuance costs in connection with preferred 

shareholder equity transactions

(3)

 ?   

(350)

 ?   

Proceeds from the exercise of stock options

946

6,574

11,781

8,321

Net cash provided by (used in) financing activities

261,980

348,696

272,119

343,665

Net increase (decrease) in cash and equivalents

282,492

180,574

16,573

68,934

Cash and equivalents at beginning of period

80,636

298,882

346,555

410,522

Cash and equivalents at end of period

$

363,128

$

479,456

$

363,128

$

479,456

Cash and equivalents at end of period

$

363,128

$

479,456

$

363,128

$

479,456

Homebuilding restricted cash at end of period

27,524

25,713

27,524

25,713

Financial services restricted cash at end of period

1,795

1,920

1,795

1,920

Cash and equivalents and restricted cash at end of period

$

392,447

$

507,089

$

392,447

$

507,089

 

REGIONAL OPERATING DATA

Three Months EndedSeptember 30, 

Nine Months EndedSeptember 30, 

2013

2012

% Change

2013

2012

% Change

New homes delivered:

California

467

363

29%

1,286

904

42%

Arizona

51

66

(23%)

171

176

(3%)

Texas

170

107

59%

458

368

24%

Colorado

36

33

9%

117

80

46%

Nevada

       ?   

       ?   

      ?  

       ?   

9

(100%)

Florida

285

151

89%

707

411

72%

Carolinas

208

141

48%

520

370

41%

Consolidated total

1,217

861

41%

3,259

2,318

41%

Unconsolidated joint ventures

2

14

(86%)

23

28

(18%)

Total (including joint ventures)

1,219

875

39%

3,282

2,346

40%

Three Months EndedSeptember 30, 

Nine Months EndedSeptember 30, 

2013

2012

% Change

2013

2012

% Change

(Dollars in thousands)

Average selling prices of homes delivered:

California

$

586

$

505

16%

$

541

$

489

11%

Arizona

286

204

40%

260

206

26%

Texas

385

328

17%

379

307

23%

Colorado

484

399

21%

439

386

14%

Nevada

      ?  

      ?  

      ?  

      ?  

192

      ?  

Florida

283

256

11%

269

244

10%

Carolinas

284

241

18%

279

238

17%

Consolidated

420

369

14%

399

351

14%

Unconsolidated joint ventures

578

450

28%

505

443

14%

Total (including joint ventures)

$

420

$

370

14%

$

400

$

352

14%

Three Months EndedSeptember 30,

Nine Months EndedSeptember 30,

2013

2012

% Change

2013

2012

% Change

Net new orders:

California

386

417

(7%)

1,381

1,169

18%

Arizona

95

61

56%

248

237

5%

Texas

154

132

17%

612

424

44%

Colorado

29

45

(36%)

156

113

38%

Nevada

        ?  

        ?  

        ?  

        ?  

6

(100%)

Florida

274

174

57%

1,010

568

78%

Carolinas

172

160

8%

613

514

19%

Consolidated total

1,110

989

12%

4,020

3,031

33%

Unconsolidated joint ventures

2

18

(89%)

12

42

(71%)

Total (including joint ventures)

1,112

1,007

10%

4,032

3,073

31%

Three Months EndedSeptember 30,

Nine Months EndedSeptember 30,

2013

2012

% Change

2013

2012

% Change

Average number of selling communities 

  during the period:

California

48

50

(4%)

46

51

(10%)

Arizona

10

5

100%

9

7

29%

Texas

30

22

36%

30

20

50%

Colorado

8

7

14%

7

6

17%

Florida

41

38

8%

40

37

8%

Carolinas

31

34

(9%)

31

35

(11%)

Consolidated total

168

156

8%

163

156

4%

Unconsolidated joint ventures

         ?  

1

(100%)

         ?  

2

(100%)

Total (including joint ventures)

168

157

7%

163

158

3%

 

At September 30,

2013

2012

% Change

Homes

Dollar Value

Homes

Dollar Value

Homes

Dollar Value

(Dollars in thousands)

Backlog:

California

535

$

341,743

439

$

217,549

22%

57%

Arizona

154

50,512

118

28,357

31%

78%

Texas

358

158,863

205

74,736

75%

113%

Colorado

114

56,528

66

26,406

73%

114%

Florida

669

250,241

319

81,950

110%

205%

Carolinas

335

106,261

247

69,741

36%

52%

Consolidated total

2,165

964,148

1,394

498,739

55%

93%

Unconsolidated joint ventures

1

599

17

6,836

(94%)

(91%)

Total (including joint ventures)

2,166

$

964,747

1,411

$

505,575

54%

91%

 

At September 30,

2013

2012

% Change

Homesites owned and controlled:

California

9,979

9,806

2%

Arizona

2,291

1,844

24%

Texas

4,468

4,451

0%

Colorado

1,216

669

82%

Nevada

1,124

1,124

          ?   

Florida

11,409

8,211

39%

Carolinas

5,156

4,049

27%

Total (including joint ventures)

35,643

30,154

18%

Homesites owned

26,936

23,974

12%

Homesites optioned or subject to contract 

8,192

5,605

46%

Joint venture homesites

515

575

(10%)

Total (including joint ventures)

35,643

30,154

18%

Homesites owned:

Raw lots

6,101

4,503

35%

Homesites under development

8,549

8,773

(3%)

Finished homesites

6,871

5,304

30%

Under construction or completed homes

3,061

2,170

41%

Held for sale

2,354

3,224

(27%)

Total

26,936

23,974

12%

 

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

September 30, 2013

GrossMargin %

September 30,2012

GrossMargin %

June 30, 2013

GrossMargin %

(Dollars in thousands)

Home sale revenues

$

511,059

$

317,389

$

434,308

Less: Cost of home sales

(381,694)

(253,344)

(331,503)

Gross margin from home sales

129,365

25.3%

64,045

20.2%

102,805

23.7%

Add: Capitalized interest included in cost 

  of home sales

30,303

5.9%

27,071

8.5%

30,337

7.0%

Gross margin from home sales, excluding 

  interest amortized to cost of home sales

$

159,668

31.2%

$

91,116

28.7%

$

133,142

30.7%

The table set forth below reconciles the Company's cash flows provided by (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 30,2013

September 30,2012

June 30,2013

(Dollars in thousands)

Cash flows provided by (used in) operations

$

22,808

$

(72,418)

$

(90,743)

Add: Cash land purchases included in operating activities

69,196

101,363

122,180

Add: Land development costs

72,542

39,422

63,028

Cash inflows from operations (excluding land purchases and

   development costs)

$

164,546

$

68,367

$

94,465

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 30,2013

June 30,2013

December 31,2012

September 30,2012

(Dollars in thousands)

Total consolidated debt

$

1,901,802

$

1,633,985

$

1,634,177

$

1,652,111

Less:

Financial services indebtedness

(64,180)

(96,964)

(92,159)

(71,035)

Homebuilding cash

(373,523)

(90,589)

(366,808)

(499,572)

Adjusted net homebuilding debt

1,464,099

1,446,432

1,175,210

1,081,504

Stockholders' equity

1,400,026

1,337,468

1,255,816

760,017

Total adjusted book capitalization

$

2,864,125

$

2,783,900

$

2,431,026

$

1,841,521

Total consolidated debt to book capitalization

57.6%

55.0%

56.5%

68.5%

Adjusted net homebuilding debt to total adjusted book capitalization

51.1%

52.0%

48.3%

58.7%

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.

September 30,

June 30,

December 31,

2013

2013

2012

Actual common shares outstanding

277,064,975

276,792,010

213,245,488

Add: Conversion of preferred shares to common shares

87,812,786

87,812,786

147,812,786

Pro forma common shares outstanding

364,877,761

364,604,796

361,058,274

Stockholders' equity (Dollars in thousands)

$

1,400,026

$

1,337,468

$

1,255,816

Divided by pro forma common shares outstanding

÷

364,877,761

÷

364,604,796

÷

361,058,274

Pro forma stockholders' equity per common share

$

3.84

$

3.67

$

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 September 30,

September 30,2013

September 30,2012

June 30,2013

2013

2012

(Dollars in thousands)

Net income 

$

58,935

$

21,710

$

43,136

$

610,820

$

59,829

Provision (benefit) for income taxes

11,201

194

8,008

(421,026)

89

Homebuilding interest amortized to cost of sales and interest expense

30,322

28,747

30,662

123,233

102,550

Homebuilding depreciation and amortization

1,031

590

702

2,978

2,386

Amortization of stock-based compensation

2,681

1,559

2,444

9,289

7,663

EBITDA

104,170

52,800

84,952

325,294

172,517

Add:

Cash distributions of income from unconsolidated joint ventures

       ?  

1,125

1,500

6,000

1,285

Deposit write-offs

       ?  

       ?  

       ?  

       ?  

549

Less:

Income (loss) from unconsolidated joint ventures

(32)

(39)

147

1,866

(1,409)

Income from financial services subsidiary

2,249

2,441

3,929

12,474

7,850

Adjusted Homebuilding EBITDA

$

101,953

$

51,523

$

82,376

$

316,954

$

167,910

Homebuilding revenues

$

511,756

$

318,541

$

438,681

$

1,728,001

$

1,110,271

Adjusted Homebuilding EBITDA Margin %

19.9%

16.2%

18.8%

18.3%

15.1%

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 September 30,

September 30,2013

September 30,2012

June 30,2013

2013

2012

(Dollars in thousands)

Net cash provided by (used in) operating activities

$

22,808

$

(72,418)

$

(90,743)

$

(238,376)

$

(183,172)

Add:

Provision (benefit) for income taxes, net of deferred component

(16,105)

194

199

(15,515)

89

Homebuilding interest amortized to cost of sales and interest expense

30,322

28,747

30,662

123,233

102,550

Less:

Income from financial services subsidiary

2,249

2,441

3,929

12,474

7,850

Depreciation and amortization from financial services subsidiary

33

32

28

121

94

Loss on disposal of property and equipment

        ?   

12

1

38

10

Net changes in operating assets and liabilities:

Trade and other receivables

(11,186)

4,681

10,732

(4,482)

5,192

Mortgage loans held for sale

(32,221)

18,119

(11,818)

(11,856)

37,940

Inventories-owned

84,352

70,645

156,993

444,182

206,502

Inventories-not owned

21,990

7,191

4,770

52,561

12,758

Other assets

(1,655)

(999)

3,083

(2,097)

(7,447)

Accounts payable 

(7,235)

(82)

(1,198)

(12,843)

6,147

Accrued liabilities

13,165

(2,070)

(16,346)

(5,220)

(4,695)

Adjusted Homebuilding EBITDA

$

101,953

$

51,523

$

82,376

$

316,954

$

167,910

SOURCE Standard Pacific Corp.

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