Standard Pacific Corp. (SPF)

[eastunder]

Standard Pacific Corp. Reports 2012 Third Quarter Results

Thursday , October 25, 2012 16:02ET

IRVINE, Calif., Oct. 25, 2012 /PRNewswire/ -- Standard Pacific Corp. (NYSE: SPF) today announced results for the third quarter ended September 30, 2012.

2012 Third Quarter Highlights and Comparisons to the 2011 Third Quarter:

-- Net income of $21.7 million, or $0.05 per diluted share, vs. net loss of
$6.4 million, or $0.02 per diluted share
-- Net new orders of 989, up 29%
-- Backlog of 1,394 homes, up 64%
-- 156 average active selling communities, down 2%
-- Homebuilding revenues up 32%
-- Average selling price of $369 thousand, up 7%
-- 861 new home deliveries, up 24%
-- Gross margin from home sales of 20.2%, compared to 15.8% (18.8%*
excluding impairment charges)
-- SG&A rate from home sales of 13.6%, a 260 basis point improvement
-- $246.2 million of land purchases and development costs compared to
$106.4 million
-- Adjusted Homebuilding EBITDA of $51.5 million*, or 16.2%* of
homebuilding revenues, compared to $28.4 million*, or 11.7%* of
homebuilding revenues
-- Homebuilding cash balance of $500 million
-- Amended undrawn revolving credit facility in October 2012 to increase
capacity to $350 million

Scott Stowell, the Company's Chief Executive Officer and President commented, "We are pleased that the positive momentum we experienced during the first half of 2012 continued into the third quarter. We earned $21.7 million, with deliveries up 24%, orders up 29% and homebuilding revenues up 32% over the prior year period. We are most pleased by the significant 64% year-over-year increase in the dollar value and number of homes in backlog to approximately $500 million, or 1,400 homes. Our solid third quarter results reflect the execution of our strategy and improved housing market conditions during the quarter."

Revenues from home sales for the 2012 third quarter increased 31%, to $317.4 million from $241.4 million, as compared to the prior year period, primarily due to a 24% increase in new home deliveries (excluding joint ventures) to 861 homes and a 7% increase in our consolidated average home price to $369 thousand. The increase in new home deliveries was driven by a 62% increase in the number of homes in backlog at the beginning of the quarter as compared to the prior year period.

Gross margin from home sales for the 2012 third quarter increased to 20.2% compared to 15.8% (18.8%* excluding $7.2 million of inventory impairment charges) in the prior year period. Excluding inventory impairment charges and previously capitalized interest costs, gross margin from home sales was 28.7%* for the 2012 third quarter versus 26.6%* for the 2011 third quarter. This 210 basis point improvement was primarily attributable to a mix shift to more deliveries from higher margin communities, price increases in certain communities with higher sales absorption, and improved margins from speculative homes sold and delivered during the quarter.

The Company's 2012 third quarter SG&A expenses (including Corporate G&A) were $43.1 million compared to $39.1 million for the prior year period, down 260 basis points as a percentage of home sale revenues to 13.6%, compared to 16.2% for the 2011 third quarter. The improvement in the Company's SG&A rate was primarily due to a 31% increase in revenues from home sales and the operating leverage inherent in our business.

Net new orders (excluding joint ventures) for the 2012 third quarter increased 29% from the 2011 third quarter to 989 homes. The 29% year-over-year growth is attributable to a 32% increase in the Company's monthly sales absorption rate, partially offset by a 2% decrease in the number of average active selling communities. The Company's monthly sales absorption rate for the 2012 third quarter was 2.1 per community, compared to 1.6 per community for the 2011 third quarter and 2.4 per community for the 2012 second quarter. The 10% decrease in absorption rate from the 2012 second quarter to the 2012 third quarter is slightly better than the historical seasonality for the Company. The Company's cancellation rate for the 2012 third quarter was 14%, compared to 16% for the 2011 third quarter and 11% for the 2012 second quarter.

The dollar value of homes in backlog (excluding joint ventures) increased 64% to $498.7 million, or 1,394 homes, compared to $304.8 million, or 848 homes, for the 2011 third quarter, and increased 13% compared to $439.7 million, or 1,266 homes, for the 2012 second quarter. The increase in year over year backlog value was driven primarily by a 29% increase in net new orders and a shift to more to-be-built homes.

The Company used $72.4 million of cash in operating activities for the 2012 third quarter versus $78.5 million in the 2011 third quarter. During the 2012 third quarter, the Company spent $246.2 million on land purchases and development costs, of which $140.8 million of cash land purchases and development costs were included in cash flows used in operating activities, compared to $106.4 million for the 2011 third quarter. Excluding land purchases and development costs, cash inflows from operating activities for the 2012 third quarter were $68.4 million* versus $27.9 million* in the 2011 third quarter. The year over year increase in cash inflows from operating activities (excluding land purchases and development costs) was primarily due to a 31% increase in home sale revenues.

The Company purchased $206.7 million of land (3,497 homesites) during the 2012 third quarter, of which 76% (based on homesites) was located in California and 11% in Texas, with the balance spread throughout the Company's other operations. The Company purchased $337.3 million of land (6,259 homesites) during the nine months ended September 30, 2012, of which 47% (based on homesites) was located in California, 24% in the Carolinas, 13% in Texas and 13% in Florida, with the balance spread throughout the Company's other operations. As of September 30, 2012, the Company owned or controlled 30,154 homesites, of which 17,718 are owned and actively selling or under development, 6,180 are controlled or under option, and the remaining 6,256 homesites are held for future development or for sale. The homesites owned that are actively selling or under development represent a 5.7 year supply based on the Company's deliveries for the trailing twelve months ended September 30, 2012.

Earnings Continued at:

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