Standard Pacific Corp. Reports 2014 Third Quarter Results

Q3 2014 pretax income of $92.1 million, up 31% from Q3 2013

Q3 2014 backlog value of $1.1 billion, up 17% from Q3 2013

News provided by

Standard Pacific Corp.

Oct 30, 2014, 04:01 ET

IRVINE, Calif., Oct. 30, 2014 /PRNewswire/ -- Standard Pacific Corp. (NYSE: SPF) today announced results for the third quarter ended September 30, 2014.

2014 Third Quarter Highlights and Comparisons to the 2013 Third Quarter

  • Net income of $56.6 million, or $0.14 per diluted share, vs. $58.9 million, or $0.15 per diluted share
  • Pretax income of $92.1 million, up 31%
  • Net new orders of 1,154, up 4%; Dollar value of net new orders up 11%
  • Backlog of 2,208 homes, up 2%; Dollar value of backlog up 17%
  • 185 average active selling communities, up 10%
  • Home sale revenues of $603.8 million, up 18%
  • Average selling price of $483 thousand, up 15%
  • 1,250 new home deliveries, up 3%
  • Gross margin from home sales of 26.3%, compared to 25.3%
  • Operating margin from home sales of $88.7 million, or 14.7%, compared to $67.4 million, or 13.2%
  • $251.2 million of land purchases and development costs, compared to $156.3 million

Scott Stowell, the Company's President and Chief Executive Officer commented, "The solid performance we achieved during the first half of 2014 continued into the third quarter, with pretax income, home sale revenues and backlog value up 31%, 18% and 17%, respectively, over the prior year period." Mr. Stowell added, "In addition, I am pleased with the growth in our operating margin from home sales, which was 14.7% for the 2014 third quarter, compared to 13.2% for the prior year period."

Revenue.  Revenues from home sales for the 2014 third quarter increased 18%, to $603.8 million, as compared to the prior year period, resulting primarily from a 15% increase in the Company's average home price to $483 thousand, the highest quarterly average home price in the Company's nearly 50 year history, and a 3% increase in new home deliveries.  The increase in average home price was primarily attributable to a shift to more move-up product and general price increases within a majority of the Company's markets.  The increase in new home deliveries compared to the prior year period was driven primarily by the increase in deliveries from the Company's Southwest region where the Company's average active selling communities grew 31%, and an 81% increase in speculative homes sold and closed during the quarter. 

Orders.  Net new orders for the 2014 third quarter were up slightly from the 2013 third quarter, to 1,154 homes, with the dollar value of these orders up 11%.  The Company's monthly sales absorption rate was 2.1 per community for the 2014 third quarter, relatively flat compared to 2.2 per community for the 2013 third quarter and 2.8 per community for the 2014 second quarter (or 2.6 per community for the 2014 second quarter excluding the backlog the Company acquired in connection with the acquisition of an Austin, Texas homebuilder in June 2014). The decrease in sales absorption rate from the 2014 second quarter to the 2014 third quarter (excluding the impact of the second quarter acquisition) was consistent with the seasonality we typically experience in our business. The Company's cancellation rate for the 2014 third quarter was 19%, compared to 20% for the 2013 third quarter and 14% for the 2014 second quarter.  Our 2014 third quarter cancellation rate remains below our average historical cancellation rate of approximately 21% over the last 10 years.    

Backlog.  The dollar value of homes in backlog increased 17% to $1.1 billion, or 2,208 homes, compared to $964.1 million, or 2,165 homes, for the 2013 third quarter, and decreased 1% compared to $1.1 billion, or 2,304 homes, for the 2014 second quarter.  The increase in year-over-year backlog value was driven primarily by a 15% increase in the average selling price of the homes in backlog, reflecting the continued execution of our move-up homebuyer focused strategy and a favorable pricing environment in select markets.

Land.  During the 2014 third quarter, the Company spent $251.2 million on land purchases and development costs, compared to $156.3 million for the 2013 third quarter. The Company purchased $155.7 million of land, consisting of 1,377 homesites, of which 37% (based on homesites) is located in California, 35% in Florida, 13% in the Carolinas, 8% in Colorado and 7% in Texas.  As of September 30, 2014, the Company owned or controlled 36,307 homesites, of which 23,997 were owned and actively selling or under development, 7,370 were controlled or under option, and the remaining 4,940 homesites were held for future development or for sale.  The homesites owned that are actively selling or under development represent a 5.0 year supply based on the Company's deliveries for the trailing twelve months ended September 30, 2014.

Liquidity.  The Company ended the quarter with $465 million of available liquidity, including $15 million of unrestricted homebuilding cash and a $450 million untapped revolving credit facility. The revolving credit facility has an accordion feature under which the aggregate commitment may be increased to a maximum amount of $750 million, subject to the Company's future needs and the availability of additional bank capacity.  The Company's homebuilding debt to book capitalization as of September 30, 2014 and 2013 was 52.9% and 56.8%, respectively, and adjusted net homebuilding debt to adjusted book capitalization was 52.2%* and 51.1%*, respectively.  In addition, the Company's homebuilding debt to adjusted homebuilding EBITDA for the LTM period ending September 30, 2014 and 2013 was 3.9x* and 5.8x*, respectively.

Earnings Conference Call

A conference call to discuss the Company's 2014 third quarter results will be held at 12:00 p.m. Eastern time October 31, 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 (888) 312-3055 (domestic) or (719) 325-2165 (international); Passcode: 3386276.  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: 3386276.

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 the strength of our land position and product portfolio; construction quality and customer experience; new home orders; deliveries; backlog; absorption rates; cancellation rates; average home price; favorable pricing environment; revenue; profitability; cash flow; liquidity; gross margin; operating margin; product mix; land supply; the benefit of, and execution on, our strategy; our future cash needs and the availability of additional bank commitments; and our future performance.  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, [email protected]

*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



2014

2013

or % Change

2014

or % Change

Operating Data

(Dollars in thousands)















Deliveries

1,250

1,217

3%

1,236

1%

Average selling price

$

483

$

420

15%

$

479

1%

Home sale revenues

$

603,788

$

511,059

18%

$

591,706

2%

Gross margin % (including land sales)

26.3%

25.3%

1.0%

26.7%

(0.4%)

Gross margin % from home sales

26.3%

25.3%

1.0%

26.6%

(0.3%)

Adjusted gross margin % from home sales (excluding interest 

amortized to cost of home sales)*

31.1%

31.2%

(0.1%)

31.7%

(0.6%)

Incentive and stock-based compensation expense

$

7,527

$

8,023

(6%)

$

6,724

12%

Selling expenses

$

29,424

$

24,301

21%

$

28,782

2%

G&A expenses (excluding incentive and stock-based 

compensation expenses)

$

33,213

$

29,615

12%

$

32,329

3%

SG&A expenses

$

70,164

$

61,939

13%

$

67,835

3%

SG&A % from home sales

11.6%

12.1%

(0.5%)

11.5%

0.1%

Operating margin from home sales

$

88,726

$

67,426

32%

$

89,675

(1%)

Operating margin % from home sales

14.7%

13.2%

1.5%

15.2%

(0.5%)

Net new orders (homes)

1,154

1,110

4%

1,524

(24%)

Net new orders (dollar value)

$

568,977

$

510,668

11%

$

713,347

(20%)

Average active selling communities

185

168

10%

183

1%

Monthly sales absorption rate per community

2.1

2.2

(6%)

2.8

(25%)

Cancellation rate

19%

20%

(1%)

14%

36%

Gross cancellations

278

272

2%

247

13%

Cancellations from current quarter sales

107

124

(14%)

93

15%

Backlog (homes)

2,208

2,165

2%

2,304

(4%)

Backlog (dollar value)

$

1,126,125

$

964,148

17%

$

1,138,886

(1%)















Cash flows (uses) from operating activities

$

(115,034)

$

22,808


$

(25,949)

(343%)

Cash flows (uses) from investing activities

$

434

$

(2,296)


$

(36,050)

Cash flows (uses) from financing activities

$

(7,271)

$

261,980


$

4,426

Land purchases (incl. seller financing)

$

155,670

$

69,196

125%

$

113,001

38%

Adjusted Homebuilding EBITDA*

$

121,737

$

101,953

19%

$

125,730

(3%)

Adjusted Homebuilding EBITDA Margin %*

20.1%

19.9%

0.2%

21.2%

(1.1%)

Homebuilding interest incurred

$

37,308

$

34,766

7%

$

37,641

(1%)

Homebuilding interest capitalized to inventories owned

$

36,927

$

34,118

8%

$

37,228

(1%)

Homebuilding interest capitalized to investments in JVs

$

381

$

648

(41%)

$

413

(8%)

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

$

28,959

$

30,322

(4%)

$

29,816

(3%)



As of 



September 30,

December 31,

Percentage



2014

2013

or % Change

Balance Sheet Data

(Dollars in thousands, except per share amounts)










Homebuilding cash (including restricted cash)

$

52,322

$

376,949

(86%)

Inventories owned

$

3,145,369

$

2,536,102

24%

Homesites owned and controlled

36,307

35,175

3%

Homes under construction

2,550

2,001

27%

Completed specs

406

327

24%

Deferred tax asset valuation allowance

$

4,591

$

4,591

      ―  

Homebuilding debt

$

1,835,314

$

1,839,595

(0%)

Stockholders' equity

$

1,634,664

$

1,468,960

11%

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

$

4.45

$

4.02

11%

Total consolidated debt to book capitalization

53.8%

56.9%

(3.1%)

Adjusted net homebuilding debt to total adjusted book capitalization*

52.2%

49.9%

2.3%










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
September 30,

Nine Months Ended
September 30,




2014

2013

2014

2013




(Dollars in thousands, except per share amounts)




(Unaudited)

Homebuilding:











Home sale revenues

$

603,788

$

511,059

$

1,642,412

$

1,300,493

Land sale revenues

1,061

697

15,122

7,665


Total revenues

604,849

511,756

1,657,534

1,308,158

Cost of home sales

(444,898)

(381,694)

(1,207,339)

(993,809)

Cost of land sales

(891)

(672)

(14,245)

(7,671)


Total cost of sales

(445,789)

(382,366)

(1,221,584)

(1,001,480)



Gross margin

159,060

129,390

435,950

306,678



Gross margin %

26.3%

25.3%

26.3%

23.4%

Selling, general and administrative expenses

(70,164)

(61,939)

(196,589)

(162,831)

Income (loss) from unconsolidated joint ventures

557

(32)

(342)

1,249

Other income (expense)

(69)

301

(445)

2,624



Homebuilding pretax income 

89,384

67,720

238,574

147,720

Financial Services:











Revenues

6,179

5,839

17,275

18,927

Expenses

(3,673)

(3,590)

(10,873)

(10,394)

Other income

231

167

606

420



Financial services pretax income

2,737

2,416

7,008

8,953

Income before taxes

92,121

70,136

245,582

156,673

Provision for income taxes

(35,522)

(11,201)

(94,361)

(32,778)

Net income 

56,599

58,935

151,221

123,895

  Less: Net income allocated to preferred shareholder

(13,511)

(14,166)

(36,165)

(40,353)

  Less: Net income allocated to unvested restricted stock

(77)

(90)

(211)

(169)

Net income available to common stockholders

$

43,011

$

44,679

$

114,845

$

83,373















Income Per Common Share:











Basic

$

0.15

$

0.16

$

0.41

$

0.34

Diluted

$

0.14

$

0.15

$

0.37

$

0.31















Weighted Average Common Shares Outstanding:











Basic

279,547,711

276,966,995

278,863,014

244,998,581

Diluted

317,116,924

314,897,098

316,691,803

283,189,878















Weighted average additional common shares outstanding











if preferred shares converted to common shares

87,812,786

87,812,786

87,812,786

118,582,017















Total weighted average diluted common shares outstanding











if preferred shares converted to common shares

404,929,710

402,709,884

404,504,589

401,771,895

CONDENSED CONSOLIDATED BALANCE SHEETS







September 30,

December 31,






2014

2013






(Dollars in thousands)

ASSETS

(Unaudited)


Homebuilding:





Cash and equivalents

$

15,295

$

355,489

Restricted cash

37,027

21,460

Trade and other receivables

30,910

14,431

Inventories:








Owned


3,145,369

2,536,102


Not owned

86,791

98,341

Investments in unconsolidated joint ventures

47,922

66,054

Deferred income taxes, net

285,540

375,400

Other assets


44,977

45,977



Total Homebuilding Assets

3,693,831

3,513,254

Financial Services:





Cash and equivalents

10,373

7,802

Restricted cash

1,295

1,295

Mortgage loans held for sale, net

68,746

122,031

Mortgage loans held for investment, net

11,730

12,220

Other assets


7,095

5,503



Total Financial Services Assets

99,239

148,851




Total Assets

$

3,793,070

$

3,662,105











LIABILITIES AND EQUITY




Homebuilding:





Accounts payable

$

51,297

$

35,771

Accrued liabilities

204,678

214,266

Secured project debt and other notes payable

4,748

6,351

Senior notes payable

1,830,566

1,833,244



Total Homebuilding Liabilities

2,091,289

2,089,632

Financial Services:





Accounts payable and other liabilities

2,419

2,646

Mortgage credit facilities

64,698

100,867



Total Financial Services Liabilities

67,117

103,513




Total Liabilities

2,158,406

2,193,145

Equity:





Stockholders' Equity:






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






    authorized; 267,829 shares issued and outstanding






    at September 30, 2014 and December 31, 2013

3

3


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






    authorized; 279,866,166 and 277,618,177 shares 






    issued and outstanding at September 30, 2014 and






    December 31, 2013, respectively

2,799

2,776


Additional paid-in capital

1,369,274

1,354,814


Accumulated earnings

262,588

111,367



Total Equity

1,634,664

1,468,960




Total Liabilities and Equity

$

3,793,070

$

3,662,105

INVENTORIES





September 30,

December 31,




2014

2013




(Dollars in thousands)

Inventories Owned:


(Unaudited)








     Land and land under development


$   2,048,167

$  1,771,661

     Homes completed and under construction


940,448

628,371

     Model homes


156,754

136,070

        Total inventories owned


$   3,145,369

$  2,536,102







Inventories Owned by Segment:












     California


$   1,373,645

$  1,182,520

     Southwest


788,886

603,303

     Southeast


982,838

750,279

        Total inventories owned


$   3,145,369

$  2,536,102

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS






Three Months Ended
September 30,

Nine Months Ended
September 30,





2014

2013

2014

2013





(Dollars in thousands)





(Unaudited)

Cash Flows From Operating Activities:











Net income

$

56,599

$

58,935

$

151,221

$

123,895

Adjustments to reconcile net income to net cash 












provided by (used in) operating activities:













Amortization of stock-based compensation

2,505

2,681

7,736

6,656



Excess tax benefits from share-based payment arrangements

(960)

       ―   

(960)

       ―   



Deferred income tax provision

35,469

27,306

94,474

48,489



Other operating activities

698

1,096

5,909

4,592



Changes in cash and equivalents due to:














Trade and other receivables

(5,464)

11,186

(16,597)

(8,462)




Mortgage loans held for sale

10,534

32,221

53,108

44,179




Inventories - owned

(231,567)

(84,352)

(547,590)

(314,375)




Inventories - not owned

(5,090)

(21,990)

(19,884)

(31,700)




Other assets

3,927

1,655

1,952

401




Accounts payable

8,604

7,235

14,753

6,855




Accrued liabilities

9,711

(13,165)

(2,668)

(6,926)


Net cash provided by (used in) operating activities

(115,034)

22,808

(258,546)

(126,396)
















Cash Flows From Investing Activities:











Investments in unconsolidated homebuilding joint ventures

(2,271)

(2,190)

(7,948)

(12,942)

Distributions of capital from unconsolidated joint ventures

3,202

750

18,010

2,319

Net cash paid for acquisitions

       ―   

       ―   

(33,408)

(113,793)

Other investing activities

(497)

(856)

(1,984)

(4,734)


Net cash provided by (used in) investing activities

434

(2,296)

(25,330)

(129,150)
















Cash Flows From Financing Activities:











Change in restricted cash

(5,642)

(2,062)

(15,567)

1

Principal payments on secured project debt and other notes payable

(338)

(72)

(1,399)

(7,289)

Principal payments on senior notes payable

       ―   

       ―   

(4,971)

       ―   

Proceeds from the issuance of senior notes payable

       ―   

300,000

       ―   

300,000

Payment of debt issuance costs

(2,387)

(4,045)

(2,387)

(4,045)

Net proceeds from (payments on) mortgage credit facilities

(1,881)

(32,784)

(36,169)

(27,979)

Payment of issuance costs in connection with preferred shareholder equity transaction

―



(3)

 ―

(350)

Proceeds from the exercise of stock options

2,017

946

5,786

11,781

Excess tax benefits from share-based payment arrangements

960

       ―   

960

       ―   


Net cash provided by (used in) financing activities

(7,271)

261,980

(53,747)

272,119
















Net increase (decrease) in cash and equivalents

(121,871)

282,492

(337,623)

16,573

Cash and equivalents at beginning of period

147,539

80,636

363,291

346,555

Cash and equivalents at end of period

$

25,668

$

363,128

$

25,668

$

363,128
















Cash and equivalents at end of period

$

25,668

$

363,128

$

25,668

$

363,128

Homebuilding restricted cash at end of period

37,027

27,524

37,027

27,524

Financial services restricted cash at end of period

1,295

1,795

1,295

1,795

Cash and equivalents and restricted cash at end of period

$

63,990

$

392,447

$

63,990

$

392,447

REGIONAL OPERATING DATA






Three Months Ended September 30,





2014

2013

% Change





Homes

ASP

Homes

ASP

Homes

ASP





(Dollars in thousands)

New homes delivered:


















California

437

$

640

467

$

586

(6%)

9%


Arizona

69

362

51

286

35%

27%


Texas

225

468

170

385

32%

22%


Colorado

47

504

36

484

31%

4%

Southwest

341

451

257

379

33%

19%


Florida

266

385

285

283

(7%)

36%


Carolinas

206

329

208

284

(1%)

16%

Southeast

472

360

493

284

(4%)

27%



Consolidated total

1,250

483

1,217

420

3%

15%

Unconsolidated joint ventures

           ―    

           ―   

2

578

(100%)

           ―   



Total (including joint ventures)

1,250

$

483

1,219

$

420

3%

15%





Nine Months Ended September 30,





2014

2013

% Change





Homes

ASP

Homes

ASP

Homes

ASP





(Dollars in thousands)

New homes delivered:


















California

1,215

$

643

1,286

$

541

(6%)

19%


Arizona

192

327

171

260

12%

26%


Texas

553

453

458

379

21%

20%


Colorado

158

500

117

439

35%

14%

Southwest

903

434

746

361

21%

20%


Florida

766

368

707

269

8%

37%


Carolinas

597

312

520

279

15%

12%

Southeast

1,363

344

1,227

273

11%

26%



Consolidated total

3,481

472

3,259

399

7%

18%

Unconsolidated joint ventures

           ―    

           ―   

23

505

(100%)

           ―   



Total (including joint ventures)

3,481

$

472

3,282

$

400

6%

18%





Three Months Ended September 30,





2014

2013

% Change





Homes

ASP

Homes

ASP

Homes

ASP





(Dollars in thousands)

Net new orders:


















California

399

$

645

386

$

630

3%

2%


Arizona

64

325

95

291

(33%)

12%


Texas

206

472

154

423

34%

12%


Colorado

39

521

29

499

34%

4%

Southwest

309

448

278

386

11%

16%


Florida

243

428

274

389

(11%)

10%


Carolinas

203

341

172

311

18%

10%

Southeast

446

388

446

359

           ―   

8%



Consolidated total

1,154

493

1,110

460

4%

7%

Unconsolidated joint ventures

           ―    

           ―   

2

585

(100%)

           ―   



Total (including joint ventures)

1,154

$

493

1,112

$

460

4%

7%





Nine Months Ended September 30,





2014

2013

% Change





Homes

ASP

Homes

ASP

Homes

ASP





(Dollars in thousands)

Net new orders:


















California

1,370

$

633

1,381

$

582

(1%)

9%


Arizona

206

313

248

298

(17%)

5%


Texas

800

454

612

403

31%

13%


Colorado

167

510

156

452

7%

13%

Southwest

1,173

437

1,016

385

15%

14%


Florida

784

413

1,010

336

(22%)

23%


Carolinas

662

320

613

283

8%

13%

Southeast

1,446

371

1,623

316

(11%)

17%



Consolidated total

3,989

480

4,020

425

(1%)

13%

Unconsolidated joint ventures

           ―    

            ―    

12

546

(100%)

            ―    



Total (including joint ventures)

3,989

$

480

4,032

$

425

(1%)

13%





Three Months Ended September 30,

Nine Months Ended September 30,





2014

2013

% Change

2014

2013

% Change

Average number of selling communities during the period:












California

48

48

        ―  

47

46

2%


Arizona

10

10

        ―  

10

9

11%


Texas

42

30

40%

39

30

30%


Colorado

11

8

38%

11

7

57%

Southwest

63

48

31%

60

46

30%


Florida

47

41

15%

44

40

10%


Carolinas

27

31

(13%)

30

31

(3%)

Southeast

74

72

3%

74

71

4%



Consolidated total

185

168

10%

181

163

11%





At September 30,





2014

2013

% Change





Homes

Dollar Value

Homes

Dollar Value

Homes

Dollar Value





(Dollars in thousands)

Backlog:


















California

551

$

362,388

535

$

341,743

3%

6%


Arizona

119

40,433

154

50,512

(23%)

(20%)


Texas

537

258,724

358

158,863

50%

63%


Colorado

117

65,634

114

56,528

3%

16%

Southwest

773

364,791

626

265,903

23%

37%


Florida

522

270,797

669

250,241

(22%)

8%


Carolinas

362

128,149

335

106,261

8%

21%

Southeast

884

398,946

1,004

356,502

(12%)

12%



Consolidated total

2,208

1,126,125

2,165

964,148

2%

17%

Unconsolidated joint ventures

           ―    

           ―   

1

599

(100%)

(100%)



Total (including joint ventures)

2,208

$

1,126,125

2,166

$

964,747

2%

17%





At September 30,





2014

2013

% Change

Homesites owned and controlled:






California

9,881

9,979

(1%)


Arizona

2,173

2,291

(5%)


Texas

4,986

4,468

12%


Colorado

1,182

1,216

(3%)


Nevada

1,124

1,124

          ―   

Southwest

9,465

9,099

4%


Florida

12,683

11,409

11%


Carolinas

4,278

5,156

(17%)

Southeast

16,961

16,565

2%


Total (including joint ventures)

36,307

35,643

2%











Homesites owned

28,937

26,936

7%

Homesites optioned or subject to contract 

7,172

8,192

(12%)

Joint venture homesites

198

515

(62%)


Total (including joint ventures)

36,307

35,643

2%




















Homesites owned:






Raw lots

6,745

6,101

11%

Homesites under development

9,379

8,549

10%

Finished homesites

6,448

6,871

(6%)

Under construction or completed homes

3,594

3,061

17%

Held for sale

2,771

2,354

18%


Total

28,937

26,936

7%

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 adjusted 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,
2014

Gross
Margin %

September 30,
2013

Gross
Margin %

June 30,
2014

Gross
Margin %

(Dollars in thousands)















Home sale revenues

$

603,788


$

511,059


$

591,706

Less: Cost of home sales

(444,898)



(381,694)



(434,196)

Gross margin from home sales

158,890

26.3%

129,365

25.3%

157,510

26.6%

Add: Capitalized interest included in cost 













  of home sales

28,872

4.8%

30,303

5.9%

29,812

5.1%

Adjusted gross margin from home sales, excluding 













  interest amortized to cost of home sales

$

187,762

31.1%

$

159,668

31.2%

$

187,322

31.7%

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. 




September 30,
2014

June 30,
2014

December 31,
2013

September 30,
2013



(Dollars in thousands)














Total consolidated debt

$

1,900,012

$

1,901,416

$

1,940,462

$

1,901,802

Less:












Financial services indebtedness

(64,698)

(66,579)

(100,867)

(64,180)

Homebuilding cash

(52,322)

(161,121)

(376,949)

(373,523)

Adjusted net homebuilding debt

1,782,992

1,673,716

1,462,646

1,464,099

Stockholders' equity

1,634,664

1,572,583

1,468,960

1,400,026

Total adjusted book capitalization

$

3,417,656

$

3,246,299

$

2,931,606

$

2,864,125














Total consolidated debt to book capitalization

53.8%

54.7%

56.9%

57.6%














Adjusted net homebuilding debt to total adjusted book capitalization

52.2%

51.6%

49.9%

51.1%




























Homebuilding debt

$

1,835,314






$

1,837,622

LTM adjusted homebuilding EBITDA

471,944







316,954














Homebuilding debt to adjusted homebuilding EBITDA

 3.9x 







 5.8x 

The table set forth below calculates adjusted stockholders' equity per common share.  The Company believes that the adjusted 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 the pro forma effect to the conversion of our outstanding preferred shares assuming full conversion to common stock.

September 30,

June 30,

December 31,

2014

2014

2013









Actual common shares outstanding

279,866,166

279,287,853

277,618,177

Add: Conversion of preferred shares to common shares

87,812,786

87,812,786

87,812,786

Pro forma common shares outstanding

367,678,952

367,100,639

365,430,963









Stockholders' equity (Dollars in thousands)

$

1,634,664

$

1,572,583

$

1,468,960

Divided by pro forma common shares outstanding

÷

367,678,952

÷

367,100,639

÷

365,430,963

Adjusted stockholders' equity per common share

$

4.45

$

4.28

$

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 September 30,



September 30,
2014

September 30,
2013

June 30,
2014

2014

2013



(Dollars in thousands)

















Net income 

$

56,599

$

58,935

$

56,463

$

216,041

$

610,820

Provision (benefit) for income taxes

35,522

11,201

35,383

130,566

(421,026)

Homebuilding interest amortized to cost of sales and interest expense

28,959

30,322

29,816

116,667

123,233

Homebuilding depreciation and amortization

1,215

1,031

1,224

4,678

2,978

Amortization of stock-based compensation

2,505

2,681

2,859

10,095

9,289

EBITDA

124,800

104,170

125,745

478,047

325,294

Add:














Cash distributions of income from unconsolidated joint ventures

         ―    

         ―    

1,875

1,875

6,000

Less:















Income (loss) from unconsolidated joint ventures

557

(32)

(462)

(642)

1,866

Income from financial services subsidiary

2,506

2,249

2,352

8,620

12,474

Adjusted Homebuilding EBITDA

$

121,737

$

101,953

$

125,730

$

471,944

$

316,954

















Homebuilding revenues

$

604,849

$

511,756

$

592,486

$

2,263,985

$

1,728,001

















Adjusted Homebuilding EBITDA Margin %

20.1%

19.9%

21.2%

20.8%

18.3%

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,
2014

September 30,
2013

June 30,
2014

2014

2013




(Dollars in thousands)


















Net cash provided by (used in) operating activities

$

(115,034)

$

22,808

$

(25,949)

$

(286,366)

$

(238,376)

Add:














Provision (benefit) for income taxes

35,522

(11,201)

35,383

130,566

(421,026)

Deferred income tax benefit (provision)

(35,469)

(27,306)

(35,383)

(130,199)

405,511

Homebuilding interest amortized to cost of sales and interest expense

28,959

30,322

29,816

116,667

123,233

Excess tax benefits from share-based payment arrangements

960

        ―   

        ―   

960

        ―   

Less:















Income from financial services subsidiary

2,506

2,249

2,352

8,620

12,474

Depreciation and amortization from financial services subsidiary

35

33

34

134

121

Loss on disposal of property and equipment

5

        ―   

        ―   

7

38

Net changes in operating assets and liabilities:















Trade and other receivables

5,464

(11,186)

(6,416)

11,379

(4,482)


Mortgage loans held for sale

(10,534)

(32,221)

9,364

(6,386)

(11,856)


Inventories-owned

231,567

84,352

127,264

648,527

444,182


Inventories-not owned

5,090

21,990

6,629

31,503

52,561


Other assets

(3,927)

(1,655)

1,142

(2,516)

(2,097)


Accounts payable 

(8,604)

(7,235)

(4,773)

(21,223)

(12,843)


Accrued liabilities

(9,711)

13,165

(8,961)

(12,207)

(5,220)

Adjusted Homebuilding EBITDA

$

121,737

$

101,953

$

125,730

$

471,944

$

316,954

SOURCE Standard Pacific Corp.

Related Links

http://www.standardpacifichomes.com

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