Standard Pacific reports Q1 net income of US$38.2M, up from US$21.8M a year earlier, on revenues up 28.6% to US$460.2B; net new orders down 6% to 1,311 units, dollar value of net new orders up 15.5% to US$633.8M

IRVINE, California , May 2, 2014 (press release) – Q1 2014 pretax income of $61.6 million, up 74% from Q1 2013

Q1 2014 backlog value of $1.0 billion, up 39% from Q1 2013


Standard Pacific Corp. (NYSE: SPF) today announced results for the first quarter ended March 31, 2014.

2014 First Quarter Highlights and Comparisons to the 2013 First Quarter

  • Net income of $38.2 million, or $0.09 per diluted share, vs. $21.8 million, or $0.05 per diluted share
  • Pretax income of $61.6 million, up 74%
  • Net new orders of 1,311, down 6%; Dollar value of net new orders up 16%
  • Backlog of 2,016 homes, up 9%; Dollar value of backlog up 39%
  • 174 average active selling communities, up 10%
  • Home sale revenues of $446.9 million, up 26%
  • Average selling price of $449 thousand, up 20%
  • 995 new home deliveries, up 5%
  • Gross margin from home sales of 26.6%, compared to 21.0%
  • Operating margin from home sales of $60.1 million, or 13.4%, compared to $28.2 million, or 7.9%
  • $224.1 million of land purchases and development costs, compared to $124.4 million

Scott Stowell, the Company's Chief Executive Officer commented, "The strong operating performance we achieved during the last two years has continued into the first quarter, with pretax income, backlog value, home sale revenues and new order value up 74%, 39%, 26% and 16%, respectively." Mr. Stowell added, "In addition to these solid results, I am particularly pleased with our operating margin from home sales, which was 13.4% for the 2014 first quarter, a 550 basis point improvement from the prior year."

Revenues from home sales for the 2014 first quarter increased 26%, to $446.9 million, as compared to the prior year period, resulting primarily from a 20% increase in the Company's consolidated average home price to $449 thousand and a 5% increase in new home deliveries. The increase in average home price was primarily attributable to general price increases within a majority of the Company's markets, a shift to more move-up product and a decrease in the use of sales incentives. The increase in new home deliveries was driven by a 10% year-over-year increase in the number of homes in beginning backlog expected to close during the quarter.

Gross margin from home sales for the 2014 first quarter increased to 26.6% compared to 21.0% in the prior year period. The 560 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 32.0%* for the 2014 first quarter versus 28.8%* for the 2013 first quarter.

While net new orders for the 2014 first quarter decreased 6% from the 2013 first quarter to 1,311 homes, the dollar value of these orders was up 16%. The Company's monthly sales absorption rate was 2.5 per community for the 2014 first quarter, compared to 1.7 per community for the 2013 fourth quarter. The increase in sales absorption rate from the 2013 fourth quarter to the 2014 first quarter was above the seasonality we typically experience in our business. The Company's cancellation rate for the 2014 first quarter was 14%, compared to 21% for the 2013 fourth quarter. Our 2014 first quarter cancellation rate was below our average historical cancellation rate of approximately 21% over the last 10 years.

The dollar value of homes in backlog increased 39% to $1.0 billion, or 2,016 homes, compared to $719.7 million, or 1,851 homes, for the 2013 first quarter, and increased 25% compared to $800.5 million, or 1,700 homes, as of the end of 2013. The increase in year-over-year backlog value was driven primarily by a 28% increase in the average selling price of the homes in backlog, reflecting the continued execution of our strategy to focus on the move-up buyer and pricing opportunities in select markets.

The Company purchased $144.7 million of land (2,190 homesites) during the 2014 first quarter, of which 34% (based on homesites) was located in Florida, 20% in Arizona, 19% in the Carolinas, 14% in California and 12% in Texas. As of March 31, 2014, the Company owned or controlled 35,715 homesites, of which 23,783 are owned and actively selling or under development, 6,972 are controlled or under option, and the remaining 4,960 homesites are held for future development or for sale. The homesites owned that are actively selling or under development represent a 5.1 year supply based on the Company's deliveries for the trailing twelve months ended March 31, 2014.

The Company ended the quarter with $635 million of available liquidity, including $195 million of unrestricted homebuilding cash and a $440 million untapped revolving credit facility. Cash used in operating activities was $117.6 million for the 2014 first quarter versus $58.5 million in the 2013 first quarter. During the 2014 first quarter, the Company spent $224.1 million on land purchases and development costs, compared to $124.4 million for the 2013 first quarter. The Company's homebuilding debt to book capitalization as of March 31, 2014 and 2013 was 54.9% and 54.4%, respectively, and adjusted net homebuilding debt to adjusted book capitalization was 51.7%* and 48.8%*, respectively. In addition, the Company's homebuilding debt to adjusted homebuilding EBITDA for the LTM period ending March 31, 2014 and 2013 was 4.5x* and 6.8x*, respectively.

Earnings Conference Call

A conference call to discuss the Company's 2014 first quarter results will be held at 12:00 p.m. Eastern time May 2, 2014. 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) 545-1414 (domestic) or (719) 325-4831 (international); Passcode: 8923683. 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: 8923683.

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, 2013 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




2014


2013


or % Change


2013


or % Change

Operating Data

(Dollars in thousands)
















Deliveries


995



947


5%



1,343


(26%)

Average selling price

$

449


$

375


20%


$

446


1%

Home sale revenues

$

446,918


$

355,126


26%


$

598,496


(25%)

Gross margin % (including land sales)


25.8%



20.8%


5.0%



26.8%


(1.0%)

Gross margin % from home sales


26.6%



21.0%


5.6%



26.8%


(0.2%)

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














32.0%



28.8%


3.2%



32.2%


(0.2%)

Incentive and stock-based compensation expense

$

5,028


$

4,848


4%


$

9,442


(47%)

Selling expenses

$

22,699


$

18,444


23%


$

28,114


(19%)

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













$

30,863


$

23,002


34%


$

30,304


2%

SG&A expenses

$

58,590


$

46,294


27%


$

67,860


(14%)

SG&A % from home sales


13.1%



13.0%


0.1%



11.3%


1.8%

Operating margin from home sales

$

60,083


$

28,220


113%


$

92,648


(35%)

Operating margin % from home sales


13.4%



7.9%


5.5%



15.5%


(2.1%)

Net new orders (homes)


1,311



1,394


(6%)



878


49%

Net new orders (dollar value)

$

633,818


$

548,561


16%


$

418,828


51%

Average active selling communities


174



158


10%



173


1%

Monthly sales absorption rate per community


2.5



2.9


(15%)



1.7


48%

Cancellation rate


14%



10%


4%



21%


(7%)

Gross cancellations


221



162


36%



234


(6%)

Cancellations from current quarter sales


90



86


5%



64


41%

Backlog (homes)


2,016



1,851


9%



1,700


19%

Backlog (dollar value)

$

1,001,385


$

719,651


39%


$

800,494


25%
















Cash flows (uses) from operating activities

$

(117,563)


$

(58,461)


(101%)


$

(27,820)


(323%)

Cash flows (uses) from investing activities

$

10,286


$

(1,601)




$

(14,707)



Cash flows (uses) from financing activities

$

(50,902)


$

(180)


(28179%)


$

42,690



Land purchases (incl. seller financing and JV purchases)

$

144,744


$

71,541


102%


$

116,856


24%

Adjusted Homebuilding EBITDA*

$

89,008


$

63,823


39%


$

135,469


(34%)

Adjusted Homebuilding EBITDA Margin %*


19.3%



17.8%


1.5%



22.3%


(3.0%)

Homebuilding interest incurred

$

38,786


$

35,027


11%


$

37,546


3%

Homebuilding interest capitalized to inventories owned

$

38,213


$

34,201


12%


$

36,889


4%

Homebuilding interest capitalized to investments in JVs

$

573


$

826


(31%)


$

657


(13%)

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

$

24,983


$

27,885


(10%)


$

32,909


(24%)

















     

As of 

     

March 31,

 

December 31,

 

Percentage

     

2014

 

2013

 

or % Change

Balance Sheet Data

(Dollars in thousands, except per share amounts)

                   

Homebuilding cash (including restricted cash)

$

221,400

 

$

376,949

 

(41%)

Inventories owned

$

2,741,269

 

$

2,536,102

 

8%

Homesites owned and controlled

 

35,715

   

35,175

 

2%

Homes under construction

 

2,245

   

2,001

 

12%

Completed specs

 

368

   

327

 

13%

Deferred tax asset valuation allowance

$

4,591

 

$

4,591

 

Homebuilding debt

$

1,839,994

 

$

1,839,595

 

0%

Stockholders' equity

$

1,513,087

 

$

1,468,960

 

3%

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

             

$

4.13

 

$

4.02

 

3%

Total consolidated debt to book capitalization

 

55.6%

   

56.9%

 

(1.3%)

Adjusted net homebuilding debt to total adjusted book capitalization*

             
 

51.7%

   

49.9%

 

1.8%

 

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 Ended March 31,

       

2014

 

2013

       

(Dollars in thousands, except per share amounts)

       

(Unaudited)

Homebuilding:

         
 

Home sale revenues

$

446,918

 

$

355,126

 

Land sale revenues

 

13,281

   

2,595

   

Total revenues

 

460,199

   

357,721

 

Cost of home sales

 

(328,245)

   

(280,612)

 

Cost of land sales

 

(13,004)

   

(2,583)

   

Total cost of sales

 

(341,249)

   

(283,195)

     

Gross margin

 

118,950

   

74,526

     

Gross margin %

 

25.8%

   

20.8%

 

Selling, general and administrative expenses

 

(58,590)

   

(46,294)

 

Income (loss) from unconsolidated joint ventures

 

(437)

   

1,134

 

Other income (expense)

 

(13)

   

3,570

     

Homebuilding pretax income 

 

59,910

   

32,936

Financial Services:

         
 

Revenues

 

4,984

   

5,677

 

Expenses

 

(3,440)

   

(3,322)

 

Other income

 

161

   

102

     

Financial services pretax income

 

1,705

   

2,457

Income before taxes

 

61,615

   

35,393

Provision for income taxes

 

(23,456)

   

(13,569)

Net income 

 

38,159

   

21,824

  Less: Net income allocated to preferred shareholder

 

(9,147)

   

(8,903)

  Less: Net income allocated to unvested restricted stock

 

(59)

   

(22)

Net income available to common stockholders

$

28,953

 

$

12,899

                 

Income Per Common Share:

         
 

Basic

 

$

0.10

 

$

0.06

 

Diluted

$

0.09

 

$

0.05

                 

Weighted Average Common Shares Outstanding:

         
 

Basic

   

277,948,342

   

214,166,912

 

Diluted

 

315,894,969

   

252,947,416

                 

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

         
 

87,812,786

   

147,812,786

                 

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

         
 

403,707,755

   

400,760,202

                 

 


 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

           

March 31,

 

December 31,

           

2014

 

2013

           

(Dollars in thousands)

ASSETS

(Unaudited)

     

Homebuilding:

         
 

Cash and equivalents

$

194,702

 

$

355,489

 

Restricted cash

   

26,698

   

21,460

 

Trade and other receivables

 

31,896

   

14,431

 

Inventories:

             
   

Owned

     

2,741,269

   

2,536,102

   

Not owned

   

83,601

   

98,341

 

Investments in unconsolidated joint ventures

 

49,720

   

66,054

 

Deferred income taxes, net

 

354,478

   

375,400

 

Other assets

     

45,442

   

45,977

     

Total Homebuilding Assets

 

3,527,806

   

3,513,254

Financial Services:

         
 

Cash and equivalents

 

10,410

   

7,802

 

Restricted cash

   

1,295

   

1,295

 

Mortgage loans held for sale, net

 

70,093

   

122,031

 

Mortgage loans held for investment, net

 

13,165

   

12,220

 

Other assets

     

6,483

   

5,503

     

Total Financial Services Assets

 

101,446

   

148,851

       

Total Assets

$

3,629,252

 

$

3,662,105

                     

LIABILITIES AND EQUITY

         

Homebuilding:

         
 

Accounts payable

 

$

37,147

 

$

35,771

 

Accrued liabilities

   

184,386

   

214,266

 

Secured project debt and other notes payable

 

6,015

   

6,351

 

Senior notes payable

 

1,833,979

   

1,833,244

     

Total Homebuilding Liabilities

 

2,061,527

   

2,089,632

Financial Services:

         
 

Accounts payable and other liabilities

 

2,141

   

2,646

 

Mortgage credit facilities

 

52,497

   

100,867

     

Total Financial Services Liabilities

 

54,638

   

103,513

       

Total Liabilities

 

2,116,165

   

2,193,145

Equity:

         
 

Stockholders' Equity:

         
   

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

         
   

    authorized; 267,829 shares issued and outstanding

         
   

    at March 31, 2014 and December 31, 2013

 

3

   

3

   

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

         
   

    authorized; 278,776,082 and 277,618,177 shares 

         
   

    issued and outstanding at March 31, 2014 and

         
   

    December 31, 2013, respectively

 

2,787

   

2,776

   

Additional paid-in capital

 

1,360,771

   

1,354,814

   

Accumulated earnings

 

149,526

   

111,367

     

Total Equity

 

1,513,087

   

1,468,960

       

Total Liabilities and Equity

$

3,629,252

 

$

3,662,105

                     

 

INVENTORIES

       

March 31,

 

December 31,

       

2014

 

2013

       

(Dollars in thousands)

Inventories Owned:

     

(Unaudited)

   
             

     Land and land under development

     

$     1,841,551

 

$     1,771,661

     Homes completed and under construction

     

769,786

 

628,371

     Model homes

     

129,932

 

136,070

        Total inventories owned

     

$     2,741,269

 

$     2,536,102

             

Inventories Owned by Segment:

           
             

     California

     

$     1,237,357

 

$     1,182,520

     Southwest

     

678,499

 

603,303

     Southeast

     

825,413

 

750,279

        Total inventories owned

     

$     2,741,269

 

$     2,536,102

             


 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

           
         

Three Months Ended March 31,

         

2014

 

2013

         

(Dollars in thousands)

         

(Unaudited)

Cash Flows From Operating Activities:

         
 

Net income

$

38,159

 

$

21,824

 

Adjustments to reconcile net income to net cash 

         
   

provided by (used in) operating activities:

         
     

Amortization of stock-based compensation

 

2,372

   

1,531

     

Deferred income tax provision

 

23,622

   

13,374

     

Other operating activities

 

1,616

   

1,412

     

Changes in cash and equivalents due to:

         
       

Trade and other receivables

 

(17,549)

   

(8,916)

       

Mortgage loans held for sale

 

51,938

   

140

       

Inventories - owned

 

(188,759)

   

(73,030)

       

Inventories - not owned

 

(8,165)

   

(4,940)

       

Other assets

 

(833)

   

1,829

       

Accounts payable

 

1,376

   

(1,578)

       

Accrued liabilities

 

(21,340)

   

(10,107)

   

Net cash provided by (used in) operating activities

 

(117,563)

   

(58,461)

                   

Cash Flows From Investing Activities:

         
 

Investments in unconsolidated homebuilding joint ventures

 

(2,787)

   

(2,552)

 

Distributions of capital from unconsolidated joint ventures

 

14,808

   

1,320

 

Other investing activities

 

(1,735)

   

(369)

   

Net cash provided by (used in) investing activities

 

10,286

   

(1,601)

                   

Cash Flows From Financing Activities:

         
 

Change in restricted cash

 

(5,238)

   

(662)

 

Principal payments on secured project debt and other notes payable

 

(890)

   

(7,093)

 

Net proceeds from (payments on) mortgage credit facilities

 

(48,370)

   

1,117

 

Proceeds from the exercise of stock options

 

3,596

   

6,458

   

Net cash provided by (used in) financing activities

 

(50,902)

   

(180)

                   

Net increase (decrease) in cash and equivalents

 

(158,179)

   

(60,242)

Cash and equivalents at beginning of period

 

363,291

   

346,555

Cash and equivalents at end of period

$

205,112

 

$

286,313

                   

Cash and equivalents at end of period

$

205,112

 

$

286,313

Homebuilding restricted cash at end of period

 

26,698

   

27,562

Financial services restricted cash at end of period

 

1,295

   

2,420

Cash and equivalents and restricted cash at end of period

$

233,105

 

$

316,295

                   

 

REGIONAL OPERATING DATA

             
           

Three Months Ended March 31, 

           

2014

 

2013

 

% Change

New homes delivered:

           
 

California

 

339

 

400

 

(15%)

   

Arizona

 

63

 

63

 

      ―  

   

Texas

   

149

 

133

 

12%

   

Colorado

 

53

 

43

 

23%

 

Southwest

 

265

 

239

 

11%

   

Florida

 

235

 

183

 

28%

   

Carolinas

 

156

 

125

 

25%

 

Southeast

 

391

 

308

 

27%

     

Consolidated total

 

995

 

947

 

5%

 

Unconsolidated joint ventures

 

       ―   

 

14

 

(100%)

     

Total (including joint ventures)

 

995

 

961

 

4%

 

 

         

Three Months Ended March 31, 

         

2014

 

2013

 

% Change

         

(Dollars in thousands)

Average selling prices of homes delivered:

               
 

California

 

$

624

 

$

492

 

27%

   

Arizona

   

305

   

249

 

22%

   

Texas

   

415

   

348

 

19%

   

Colorado

   

484

   

400

 

21%

 

Southwest

   

403

   

331

 

22%

   

Florida

   

350

   

259

 

35%

   

Carolinas

   

298

   

254

 

17%

 

Southeast

   

329

   

257

 

28%

     

Consolidated

   

449

   

375

 

20%

 

Unconsolidated joint ventures

   

      ―  

   

510

 

     

Total (including joint ventures)

 

$

449

 

$

377

 

19%

                       

 

 

         

Three Months Ended March 31,

         

2014

 

2013

 

% Change

Net new orders:

           
 

California

 

473

 

482

 

(2%)

   

Arizona

 

67

 

75

 

(11%)

   

Texas

 

235

 

242

 

(3%)

   

Colorado

 

53

 

62

 

(15%)

 

Southwest

 

355

 

379

 

(6%)

   

Florida

 

283

 

293

 

(3%)

   

Carolinas

 

200

 

240

 

(17%)

 

Southeast

 

483

 

533

 

(9%)

     

Consolidated total

 

1,311

 

1,394

 

(6%)

 

Unconsolidated joint ventures

 

        ―  

 

9

 

(100%)

     

Total (including joint ventures)

 

1,311

 

1,403

 

(7%)

                   

 

         

Three Months Ended March 31,

         

2014

 

2013

 

% Change

Average number of selling communities 

           

  during the period:

           
 

California

 

46

 

44

 

5%

   

Arizona

 

11

 

8

 

38%

   

Texas

 

35

 

29

 

21%

   

Colorado

 

10

 

7

 

43%

 

Southwest

 

56

 

44

 

27%

   

Florida

 

41

 

37

 

11%

   

Carolinas

 

31

 

33

 

(6%)

 

Southeast

 

72

 

70

 

3%

     

Consolidated total

 

174

 

158

 

10%

                   

 

         

At March 31,

         

2014

 

2013

 

% Change

         

Homes

 

Dollar Value

 

Homes

 

Dollar Value

 

Homes

 

Dollar Value

         

(Dollars in thousands)

Backlog:

                                   
 

California

   

530

 

$

360,371

   

522

 

$

284,033

   

2%

   

27%

   

Arizona

   

109

   

38,032

   

89

   

24,886

   

22%

   

53%

   

Texas

   

376

   

184,452

   

313

   

126,276

   

20%

   

46%

   

Colorado

   

108

   

55,930

   

94

   

42,374

   

15%

   

32%

 

Southwest

   

593

   

278,414

   

496

   

193,536

   

20%

   

44%

   

Florida

   

552

   

248,543

   

476

   

134,880

   

16%

   

84%

   

Carolinas

   

341

   

114,057

   

357

   

107,202

   

(4%)

   

6%

 

Southeast

   

893

   

362,600

   

833

   

242,082

   

7%

   

50%

     

Consolidated total

   

2,016

   

1,001,385

   

1,851

   

719,651

   

9%

   

39%

 

Unconsolidated joint ventures

   

           ―    

   

           ―    

   

7

   

3,241

   

(100%)

   

(100%)

     

Total (including joint ventures)

   

2,016

 

$

1,001,385

   

1,858

 

$

722,892

   

9%

   

39%

                                           

 

 

         

At March 31,

         

2014

 

2013

 

% Change

Homesites owned and controlled:

           
 

California

 

9,545

 

10,407

 

(8%)

   

Arizona

 

2,302

 

1,902

 

21%

   

Texas

 

4,555

 

5,165

 

(12%)

   

Colorado

 

1,254

 

1,174

 

7%

   

Nevada

 

1,124

 

1,124

 

          ―   

 

Southwest

 

9,235

 

9,365

 

(1%)

   

Florida

 

12,257

 

8,445

 

45%

   

Carolinas

 

4,678

 

3,906

 

20%

 

Southeast

 

16,935

 

12,351

 

37%

   

Total (including joint ventures)

 

35,715

 

32,123

 

11%

                   
 

Homesites owned

 

28,743

 

25,689

 

12%

 

Homesites optioned or subject to contract 

 

6,707

 

5,837

 

15%

 

Joint venture homesites

 

265

 

597

 

(56%)

   

Total (including joint ventures)

 

35,715

 

32,123

 

11%

                   
                   

Homesites owned:

           
 

Raw lots

 

6,892

 

5,722

 

20%

 

Homesites under development

 

9,811

 

8,371

 

17%

 

Finished homesites

 

6,341

 

5,616

 

13%

 

Under construction or completed homes

 

3,198

 

2,583

 

24%

 

Held for sale

 

2,501

 

3,397

 

(26%)

   

Total

 

28,743

 

25,689

 

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

 

March 31,
2014

 

Gross
Margin %

 

March 31,
2013

 

Gross
Margin %

 

December 31,
2013

 

Gross
Margin %

 

(Dollars in thousands)

                             

Home sale revenues

$

446,918

     

$

355,126

     

$

598,496

   

Less: Cost of home sales

 

(328,245)

       

(280,612)

       

(437,988)

   

Gross margin from home sales

 

118,673

 

26.6%

   

74,514

 

21.0%

   

160,508

 

26.8%

Add: Capitalized interest included in cost of home sales

                           
 

24,368

 

5.4%

   

27,696

 

7.8%

   

32,378

 

5.4%

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

                           

$

143,041

 

32.0%

 

$

102,210

 

28.8%

 

$

192,886

 

32.2%

                             

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

     

March 31,
2014

 

December 31,
2013

 

March 31,
2013

     

(Dollars in thousands)

                     

Total consolidated debt

$

1,892,491

 

$

1,940,462

 

$

1,628,846

Less:

                 
 

Financial services indebtedness

 

(52,497)

   

(100,867)

   

(93,276)

 

Homebuilding cash

 

(221,400)

   

(376,949)

   

(308,029)

Adjusted net homebuilding debt

 

1,618,594

   

1,462,646

   

1,227,541

Stockholders' equity

 

1,513,087

   

1,468,960

   

1,287,207

Total adjusted book capitalization

$

3,131,681

 

$

2,931,606

 

$

2,514,748

                     

Total consolidated debt to book capitalization

 

55.6%

   

56.9%

   

55.9%

                     

Adjusted net homebuilding debt to total adjusted book capitalization

 

51.7%

   

49.9%

   

48.8%

                     
                     

Homebuilding debt

$

1,839,994

       

$

1,535,570

LTM adjusted homebuilding EBITDA

 

408,806

         

225,958

                     

Homebuilding debt to adjusted homebuilding EBITDA

 

 4.5x 

         

 6.8x 

                     

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,

 

2014

 

2013

           

Actual common shares outstanding

 

278,776,082

   

277,618,177

Add: Conversion of preferred shares to common shares

 

87,812,786

   

87,812,786

Pro forma common shares outstanding

 

366,588,868

   

365,430,963

           

Stockholders' equity (Dollars in thousands)

$

1,513,087

 

$

1,468,960

Divided by pro forma common shares outstanding

÷

366,588,868

 

÷

365,430,963

Pro forma stockholders' equity per common share

$

4.13

 

$

4.02


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,
2014

 

March 31,
2013

 

December 31,
2013

 

2014

 

2013

     

(Dollars in thousands)

                                 

Net income 

$

38,159

 

$

21,824

 

$

64,820

 

$

205,050

 

$

544,722

 

Provision (benefit) for income taxes

 

23,456

   

13,569

   

36,205

   

78,870

   

(439,852)

 

Homebuilding interest amortized to cost of sales and interest expense

 

24,983

   

27,885

   

32,909

   

118,876

   

117,078

 

Homebuilding depreciation and amortization

 

1,145

   

628

   

1,094

   

3,972

   

2,410

 

Amortization of stock-based compensation

 

2,372

   

1,531

   

2,359

   

9,856

   

7,608

EBITDA

 

90,115

   

65,437

   

137,387

   

416,624

   

231,966

Add:

                           
 

Cash distributions of income from unconsolidated joint ventures

 

       ―  

   

1,875

   

       ―  

   

1,500

   

5,785

Less:

                             
 

Income (loss) from unconsolidated joint ventures

 

(437)

   

1,134

   

(300)

   

(622)

   

566

 

Income from financial services subsidiary

 

1,544

   

2,355

   

2,218

   

9,940

   

11,227

Adjusted Homebuilding EBITDA

$

89,008

 

$

63,823

 

$

135,469

 

$

408,806

 

$

225,958

                                 

Homebuilding revenues

$

460,199

 

$

357,721

 

$

606,451

 

$

2,017,087

 

$

1,370,977

                                 

Adjusted Homebuilding EBITDA Margin %

 

19.3%

   

17.8%

   

22.3%

   

20.3%

   

16.5%

                                 

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

 

       

Three Months Ended

 

LTM Ended March 31,

       

March 31,
2014

 

March 31,
2013

 

December 31,
2013

 

2014

 

2013

       

(Dollars in thousands)

                                   

Net cash provided by (used in) operating activities

 

$

(117,563)

 

$

(58,461)

 

$

(27,820)

 

$

(213,318)

 

$

(299,459)

Add:

                           
 

Provision (benefit) for income taxes

 

23,456

   

13,569

   

36,205

   

78,870

   

(439,852)

 

Deferred income tax benefit (provision)

   

(23,622)

   

(13,374)

   

(35,725)

   

(94,462)

   

440,626

 

Homebuilding interest amortized to cost of sales and interest expense

   

24,983

   

27,885

   

32,909

   

118,876

   

117,078

Less:

                             
 

Income from financial services subsidiary

 

1,544

   

2,355

   

2,218

   

9,940

   

11,227

 

Depreciation and amortization from financial services subsidiary

   

33

   

28

   

32

   

126

   

120

 

Loss on disposal of property and equipment

 

1

   

15

   

1

   

3

   

52

Net changes in operating assets and liabilities:

                           
   

Trade and other receivables

 

17,549

   

8,916

   

(5,218)

   

11,877

   

1,124

   

Mortgage loans held for sale

   

(51,938)

   

(140)

   

46,722

   

(49,255)

   

54,732

   

Inventories-owned

 

188,759

   

73,030

   

100,937

   

531,041

   

344,468

   

Inventories-not owned

   

8,165

   

4,940

   

11,619

   

46,544

   

33,864

   

Other assets

 

833

   

(1,829)

   

(564)

   

1,697

   

(3,419)

   

Accounts payable 

   

(1,376)

   

1,578

   

(6,470)

   

(16,279)

   

(1,124)

   

Accrued liabilities

 

21,340

   

10,107

   

(14,875)

   

3,284

   

(10,681)

Adjusted Homebuilding EBITDA

 

$

89,008

 

$

63,823

 

$

135,469

 

$

408,806

 

$

225,958

 

SOURCE Standard Pacific Corp.


RELATED LINKS
http://standardpacifichomes.com

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.