Standard Pacific Corp. (SPF)

[eastunder]

Standard Pacific Corp. Reports 2010 First Quarter Results

Monday , April 19, 2010 07:00ET

IRVINE, Calif., April 19, 2010 /PRNewswire-FirstCall/ -- Standard Pacific Corp. (NYSE: SPF) today announced operating results for its first quarter ended March 31, 2010.


2010 First Quarter Highlights and Comparisons to the 2009 First Quarter

-- Net loss of $5.1 million vs. a net loss of $49.5 million
-- Homebuilding revenues of $175.4 million, down 16% from $209.5 million
-- 537 new home deliveries (excluding joint ventures), down 22% from 687
homes
-- Gross margin from home sales of 22.7% vs. 17.4%* (2009 first quarter
gross margin excludes $26.3 million of impairment charges)
-- Average home price of $326,000, up 9% from $300,000
-- Homebuilding SG&A expenses of $32.8 million, down 19% from $40.4
million* (excluding $12.0 million of restructuring charges in 2009)
-- Homebuilding SG&A rate from home sales of 18.7% vs. 19.6%* (2009 first
quarter excludes restructuring charges)
-- Net new orders (excluding joint ventures) up 3% to 759 homes
-- Backlog value (excluding joint ventures) up 31% to $278.3 million vs.
$212.2 million
-- 821 homes in backlog, up 19% from 689 homes
-- Cash flow from operating activities of $33.6 million vs. $129.0 million
-- $50.8 million of land purchases in 2010 vs. $3.7 million in 2009
-- Tax refund of $108 million vs. $114 million in 2009
-- $32.5 million reduction in homebuilding debt during the quarter
-- Homebuilding cash balance of $591.7 million
-- Adjusted net homebuilding debt to total capitalization ratio of 55.1%*
vs. 67.3%*



The Company generated a net loss of $5.1 million, or $0.02 per diluted share, for the 2010 first quarter compared to a net loss of $49.5 million, or $0.21 per diluted share, for the year earlier period. The primary drivers of the improved operating performance were higher gross margins, reduced asset impairments, higher average sales price and lower overhead costs. The 2009 first quarter results included $30.8 million of asset impairment charges, $14.1 million of restructuring charges and a $5.2 million gain on the early extinguishment of debt. The 2010 first quarter did not include any asset impairment or restructuring charges.


Homebuilding revenues for the 2010 first quarter were $175.4 million, down 16% from $209.5 million for the 2009 first quarter. The decrease in homebuilding revenues was driven primarily by a 22% decline in new home deliveries to 537 homes (exclusive of joint ventures). The decrease in deliveries was partially due to the significant reduction in the number of completed and unsold homes available for sale at the beginning of the 2010 first quarter as compared to the year earlier period and, to a lesser extent, a 7% decline in the 2010 first quarter beginning backlog as compared to the prior year period. The decline in deliveries was partially offset by a 9% increase in consolidated average home price to $326,000, largely due to a greater proportion of homes delivered within California during the quarter as compared to the 2009 first quarter.


Gross margin from home sales for the 2010 first quarter was 22.7% versus an adjusted gross margin from home sales for the year earlier period of 17.4%* (excluding $26.3 million of inventory impairments for the 2009 first quarter). The 530 basis point improvement in the 2010 first quarter gross margin from home sales was primarily the result of a larger mix of California deliveries, lower direct construction costs and, to a lesser extent, price increases in California. Excluding impairments and previously capitalized interest costs, gross margin from home sales for the 2010 first quarter was 29.2%* versus 23.7%* for the 2009 first quarter.


The Company's 2010 first quarter SG&A expenses (including Corporate G&A) decreased $19.6 million, or 37%, to $32.8 million from $52.4 million in the 2009 first quarter. The Company's 2009 first quarter SG&A expenses included $12.0 million in restructuring charges related to severance and lease terminations. The Company's 2010 first quarter SG&A rate from home sales was 18.7% versus an adjusted rate of 19.6%* (excluding restructuring charges for the 2009 first quarter). The reduction in the Company's SG&A expenses was primarily the result of lower personnel costs, commissions and model costs.


The Company generated $33.6 million of cash flows from operations for the 2010 first quarter versus $129.0 million for the year earlier period. The decline in cash flows as compared to the 2009 first quarter was driven primarily by a $47.1 million increase in land purchases and a 22% decline in deliveries resulting from a decrease in the number of unsold completed and under construction homes available for sale as of December 31, 2009 as compared to December 31, 2008. Cash flows from operations for the three months ended March 31, 2010 and 2009 included $50.8 million and $3.7 million, respectively, of land purchases and $108 million and $114 million, respectively, of federal tax refunds. Excluding land purchases and sales, cash flows from operations for the 2010 first quarter were $83.9 million* versus $132.1 million* in the year earlier period.


Net new orders (excluding joint ventures) for the 2010 first quarter increased 3% from the 2009 first quarter to 759 homes, despite a 20% decrease in the number of average active selling communities, from 158 to 126. The Company's monthly sales absorption rate for the 2010 first quarter was 2.0 per community compared to 1.5 per community for the 2009 first quarter. The Company's cancellation rate for the 2010 first quarter was 15% versus 24% for the 2009 first quarter and 21% for the 2009 fourth quarter. The total number of sales cancellations for the 2010 first quarter was 133, of which 60 cancellations related to homes in the Company's 2010 first quarter beginning backlog and 73 related to orders generated during the quarter.


The dollar value of the Company's backlog (excluding joint ventures) increased 31% to $278.3 million, or 821 homes, compared to $212.2 million, or 689 homes, for the 2009 first quarter. The increase in backlog value was driven primarily by an increase in the number and average price of California homes in backlog and, to a lesser extent, increased sales during the quarter.


During the 2010 first quarter, the Company approved the purchase of $105 million of land, comprised of approximately 1,800 lots, 76% of which are finished, 11% partially developed and 13% raw. Approximately 56% of the approved purchases are transactions with developers and 25% with banks. During the same period, the Company purchased approximately 940 lots valued at $51 million. Approximately 42% of the $51 million in land purchases related to land located in California and 37% in the Carolinas, with the balance spread throughout the Company's other operations. As of March 31, 2010, the Company had outstanding approximately $179 million of approved land purchases and option contracts, of which $113 million is expected to be purchased in 2010 and $66 million expected to be purchased in 2011 and beyond.


Ken Campbell, the Company's President and CEO commented, "I am pleased with our strong gross margins and reduced spending on overhead. I am also encouraged by the growth in our land opportunities at prices that meet our return thresholds."


Earnings Conference Call


A conference call to discuss the Company's 2010 first quarter will be held at 1:00 p.m. Eastern time Monday, April 19, 2010. The call will be broadcast live over the Internet and can be accessed through the Company's website at http://standardpacifichomes.com/ir. The call will also be accessible via telephone by dialing [phone] (domestic) or [phone] (international); Passcode: 2530604. The entire audio transmission with the synchronized 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 [phone] (domestic) or [phone] (international); Passcode: 2530604.


About Standard Pacific


Standard Pacific, one of the nation's largest homebuilders, has built more than 110,000 homes during its 44-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.