Q4 2011 Net Income of $15.3 million, or $0.04 per diluted share
Q4 2011 Net New Orders up 44% vs. Q4 2010

IRVINE, Calif., Feb. 6, 2012 (CRWENEWSWIRE) — Standard Pacific Corp. (NYSE:SPF) announced results for the fourth quarter and year ended December 31, 2011.

2011 Fourth Quarter Highlights and Comparisons to the 2010 Fourth Quarter

* Net income of $15.3 million, or $0.04 per diluted share, vs. net loss of $21.9 million, or $0.08 per diluted share
* Net new orders of 615, up 44%
* Backlog of 681 homes, up 64%
* Highest year-end backlog since 2007
* 160 average active selling communities (16 new/8 closed out), up 19%
* Homebuilding revenues up 38%
* Average selling price of $374 thousand, up 10%
* 782 new home deliveries, up 26%
* Gross margin from home sales of 20.4%, compared to 22.2%
* SG&A rate from home sales of 15.2%, a 290 basis point improvement
* Operating cash outflows of $12.0 million, a $40.5 million improvement from $52.5 million
* Excluding land purchases, development costs and debt restructuring payments, cash inflows of $74.3 million* vs. $38.5 million*
* Adjusted Homebuilding EBITDA of $42.8 million*, or 14.6%* of homebuilding revenues

2011 Fiscal Year Highlights and Comparisons to Fiscal Year 2010

* Net loss of $16.4 million, or $0.05 per diluted share, vs. net loss of $11.7 million, or $0.05 per diluted share
* Net new orders of 2,795, up 14%
* Homebuilding revenues of $883.0 million, down 3.2% from $912.4 million
* Average selling price of $349 thousand, up 2%
* 2,528 new home deliveries, down 4% from 2,646 homes
* Gross margin from home sales of 18.4%, compared to 22.2%
* SG&A rate from home sales of 17.5%, compared to 16.6%
* Operating cash outflows of $322.6 million vs. $81.0 million
* Excluding land purchases, development costs and debt restructuring payments, cash inflows of $114.5 million* vs. $285.9 million*
* Adjusted Homebuilding EBITDA of $105.9 million*, or 12.0%* of homebuilding revenues

Scott Stowell, the Company’s Chief Executive Officer and President commented, “I am pleased with the results for the quarter. Our strategic focus on growing community count in the move-up segment, our continued dedication to quality home design, and our commitment to creating a superior customer experience have all contributed to our solid 4th quarter results.” Mr. Stowell added, “While we believe the homebuilding industry will face ongoing headwinds throughout 2012, I am confident that with our focus on execution at every level of our organization we will continue to drive improved profitability despite these challenging market conditions.”

For the fourth quarter of 2011, the Company reported net income of $15.3 million, or $0.04 per diluted share, compared to a net loss of $21.9 million, or $0.08 per diluted share, for the year earlier period. The 2010 fourth quarter included a $23.8 million charge related to the early extinguishment of debt and $2.4 million of asset impairment charges and deposit write-offs.

For fiscal year 2011, the Company reported a net loss of $16.4 million, or $0.05 per diluted share, compared to a net loss of $11.7 million, or $0.05 per diluted share, for the full year 2010. The Company’s adjusted net income for fiscal year 2011 was $3.2 million*, or $0.01* per diluted share, excluding $15.3 million of inventory impairment charges and deposit write-offs and $4.2 million of restructuring, severance and other charges related to management changes. Fiscal year 2010 included $30.0 million of debt refinance charges and $2.4 million of asset impairment charges and deposit write-offs.

Homebuilding revenues increased 38% from $212.4 million for the 2010 fourth quarter to $293.2 million for the 2011 fourth quarter driven primarily by a 26% increase in new home deliveries to 782 homes. The Company’s consolidated average home price for the 2011 fourth quarter was $374 thousand, which was up 10% over the prior year. The increase in the Company’s average selling price was largely due to an increase in deliveries of luxury homes in Southern California during the 2011 fourth quarter, which includes the delivery of two homes with an average selling price of approximately $6 million from one of the Company’s Southern California coastal communities.

Gross margin from home sales for the 2011 fourth quarter was 20.4% versus 22.2% for the prior year. The 2011 fourth quarter gross margin from home sales included a $2.9 million benefit related to a reduction in the Company’s warranty accrual, compared to a $2.0 million benefit recorded in the prior year quarter. Excluding warranty accrual adjustments and $1.8 million of inventory impairment charges recorded during the prior year quarter, the adjusted gross margin from home sales for the 2011 fourth quarter was 19.4%*, versus 22.2%* for the prior year. The 280 basis point decline in the Company’s adjusted gross margin from home sales was driven primarily by lower margins in a majority of the Company’s markets due to a mix shift to more deliveries from lower margin projects and a reduction in the percentage of California deliveries as compared to the prior year. Excluding warranty accrual adjustments, inventory impairments and previously capitalized interest costs, gross margin from home sales was 27.5%* for the 2011 fourth quarter versus 29.2%* for the 2010 fourth quarter.

The Company’s 2011 fourth quarter SG&A expenses (including Corporate G&A) were $44.5 million and included noncash stock-based compensation expenses of $3.1 million and restructuring charges of $0.9 million, primarily related to employee severance costs. The Company’s 2011 fourth quarter SG&A rate from home sales was 15.2% (14.9%* excluding restructuring charges) versus 18.1% for the 2010 fourth quarter. The improvement in the Company’s SG&A rate was primarily due to the operating leverage inherent in our business resulting from a 39% increase in revenues from home sales. The Company’s G&A expenses (excluding incentive compensation and restructuring charges) were $23.2 million for the 2011 fourth quarter, compared to $22.8 million for the 2010 fourth quarter and 2011 third quarter. The increase in the Company’s 2011 fourth quarter G&A expenses was due to an increase in insurance expense, which is primarily a variable expense based on revenues.

Net new orders (excluding joint ventures) for the 2011 fourth quarter increased 44% from the 2010 fourth quarter to 615 homes on a 19% increase in the number of average active selling communities from 134 to 160. The Company’s monthly sales absorption rate for the 2011 fourth quarter was 1.3 per community, compared to 1.1 per community for the 2010 fourth quarter and 1.6 per community for the 2011 third quarter. The Company’s cancellation rate for the 2011 fourth quarter was 19%, compared to 23% for the 2010 fourth quarter and 16% for the 2011 third quarter. The total number of sales cancellations for the 2011 fourth quarter was 141, of which 88 cancellations related to homes in the Company’s 2011 fourth quarter beginning backlog and 53 related to orders generated during the quarter.

The dollar value of homes in backlog (excluding joint ventures) increased 69% to $232.6 million, or 681 homes, compared to $137.4 million, or 414 homes, for the 2010 fourth quarter, and decreased 24% compared to $304.8 million, or 848 homes, for the 2011 third quarter. The increase in year over year backlog value was driven primarily by a 44% increase in net new orders as compared to the prior period.

The Company used $12.0 million of cash in operating activities for the 2011 fourth quarter versus $52.5 million in the 2010 fourth quarter. Cash flows used in operating activities for the 2011 fourth quarter included $49.8 million of cash land purchases and $36.6 million of land development costs, compared to $33.6 million and $26.3 million, respectively, for the 2010 fourth quarter. The 2010 fourth quarter also included $31.1 million of cash used in operations related to debt restructuring activities. Excluding land purchases, development costs and debt restructuring payments incurred in the 2010 fourth quarter, cash inflows from operating activities for the 2011 fourth quarter were $74.3 million* versus $38.5 million* in the 2010 fourth quarter. The year over year increase in cash inflows from operating activities (excluding land purchases, development costs and debt restructuring payments) was primarily due to a 26% increase in deliveries compared to the prior year period.

The Company purchased $49.8 million of land (684 lots) during the 2011 fourth quarter. Approximately 41% of land purchases (based on land value) were located in California and 29% in Texas, with the balance spread throughout the Company’s other operations. For the year ended December 31, 2011, the Company purchased $303.8 million of land (4,895 lots), of which approximately 57% (based on land value) is located in California and 18% in Texas, with the balance spread throughout the Company’s other operations. As of December 31, 2011, the Company owned or controlled 26,444 lots, of which 13,584 owned lots are actively selling or under development. The lots owned that are actively selling or under development represent a 5.4 year supply based on the Company’s deliveries for the year ended December 31, 2011.

Earnings Conference Call

A conference call to discuss the Company’s 2011 fourth quarter results will be held at 11:00 a.m. Eastern time February 7, 2012. The call will be broadcast live over the Internet and can be accessed through the Company’s website at http://ir.standardpacifichomes.com. The call will also be accessible via telephone by dialing (888) 708-5705 (domestic) or (913) 312-1448 (international); Passcode: 6675438. 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: 6675438.

About Standard Pacific

Standard Pacific, one of the nation’s largest homebuilders, has built more than 115,000 homes during its 46-year history. The Company constructs homes within a wide range of price and size targeting a broad range of homebuyers. Standard Pacific operates in many of the largest housing markets in the country with operations in major metropolitan areas in California, Florida, Arizona, the Carolinas, Texas, Colorado and Nevada. For more information about the Company and its new home developments, please visit our website at: www.standardpacifichomes.com.

This news release contains forward-looking statements. These statements include but are not limited to statements regarding new home orders, deliveries, backlog, average home price, revenue, profitability, cash flow, liquidity, gross margins, overhead expenses and other costs; strategy; community count growth; product mix; the quality of our homes and customer experience; our focus on, and ability to execute, our strategy; and the future condition of 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, 2010 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.

Source: Standard Pacific Corp.

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.

Tables Follow:

	December 31,			December 31,
	2011			2010
Actual common shares outstanding		198,563,273			196,641,551
Add: Conversion of preferred shares to common shares		147,812,786			147,812,786
Less: Common shares outstanding under share lending facility		(3,919,904)			(3,919,904)
Pro forma common shares outstanding		342,456,155			340,534,433
Stockholders’ equity (Dollars in thousands)	$	623,754		$	621,862
Divided by pro forma common shares outstanding		342,456,155			340,534,433
Pro forma stockholders’ equity per common share	$	1.82		$	1.83

 

 

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