IRVINE, Calif., July 22, 2009 /PRNewswire-FirstCall/ -- Standard
Pacific Corp. (NYSE:SPF) today announced operating results for its
second quarter ended June 30, 2009. Homebuilding revenues from
continuing operations for the 2009 second quarter were $289.7
million, down 29% from $410.6 million last year. The Company
generated a net loss of $23.1 million, or $0.10 per diluted share,
versus a net loss of $249.0 million, or $3.44 per diluted share,
for the year earlier period. The 2009 second quarter results
included asset impairment charges of $21.3 million, of which $13.1
million related to real estate inventories and $8.2 million related
to a joint venture. Impairment related charges for the 2008 second
quarter totaled $149.2 million. The 2009 second quarter results
also included $5.5 million in restructuring charges and an $8.9
million charge related to the Company's deferred tax asset
valuation allowance. Excluding asset impairment and restructuring
charges, the Company generated 2009 second quarter net income of
approximately $2.2 million*, or $0.01 per diluted share.* During
the quarter the Company generated $68.6 million of cash flows from
operating activities, driven primarily from a $95.3 million
decrease in inventories that was largely attributable to a 48%
reduction in the number of completed spec homes (excluding podium
projects). These cash flows were partially offset by other changes
in working capital. The Company reduced its homebuilding debt
during the quarter by $136.0 million (after assuming $25.2 million
of secured project debt in connection with a joint venture unwind)
and ended the quarter with $573.0 million of homebuilding cash
(including $4.2 million of restricted cash). The debt reduction was
driven primarily by the repayment of the remaining $124.6 million
balance of the Company's 5 1/8% senior notes and the repayment of
$10.0 million of credit facility indebtedness. The Company's
homebuilding restricted cash balance decreased by $120.8 million
during the quarter as a result of the Company meeting its bank
credit facility cash flow coverage requirement. The Company's 2009
second quarter selling, general and administrative ("SG&A")
expenses decreased $33.1 million, or 42%, from the year earlier
period resulting in an SG&A rate of 15.9% versus 19.3% in the
prior year period. Excluding restructuring charges, the Company's
2009 second quarter SG&A rate was 14.3%* versus 19.1%* for the
2008 second quarter despite a 29% decrease in revenues. Ken
Campbell, President and CEO stated, "We are pleased with the
progress we have made to date, particularly with respect to
reducing our SG&A - both in absolute dollars and as a percent
of revenues. Our SG&A reductions demonstrate our ability to
vary our costs in line with our sales volumes, a capability that
may get tested further if the recession continues for an extended
period of time. We are also pleased with the $69 million of cash
flows generated from operations during the quarter that resulted
largely from the reduction of our completed spec inventory levels
and improved order and delivery activity. These were improvements
we told investors we were going to make, so I guess it's not a big
surprise, but all of us here at Standard Pacific feel good about
our progress to date." Mr. Campbell added, "While we still
obviously have not achieved the level of profitability that we
ultimately need, we are a lot closer than we were a couple of
quarters ago and believe that we are in pretty good shape in the
short run because of our higher backlog level. However, if we need
to adjust further, we will." Homebuilding Operations The Company
generated a homebuilding pretax loss from continuing operations for
the 2009 second quarter of $24.3 million compared to a pretax loss
of $185.9 million in the year earlier period. The Company's
homebuilding pretax loss from continuing operations for the 2009
second quarter included $21.3 million of asset impairment charges
and $5.3 million in restructuring charges. The decrease in pretax
loss was primarily the result of a $127.9 million decrease in
impairment charges, a $33.1 million decrease in the Company's
SG&A expenses (which included approximately $4.6 million in
restructuring charges related to severance and facilities
reductions), a $12.2 million decrease in joint venture loss and a
$13.0 million decrease in other expense. These changes were
partially offset by a 29% decrease in homebuilding revenues to
$289.7 million (due to a 24% decrease in new home deliveries to 942
homes and an 8% decline in our consolidated average home price to
$302,000) and the expensing of $11.7 million of non-capitalized
interest expense during the 2009 second quarter. Gross Margin The
Company's homebuilding gross margin percentage from continuing
operations (including land sales) for the 2009 second quarter was
13.5% compared to a negative 18.5% in the prior year period. The
2009 second quarter gross margin included $13.1 million in
inventory impairment charges related to 10 projects. The
impairments, which were included in cost of sales, related
primarily to four projects in California totaling $8.2 million.
Excluding the housing inventory impairment charges from continuing
operations, the Company's 2009 second quarter gross margin from
home sales would have been 18.5%* versus 12.9%* for the 2008 second
quarter. The 560 basis point increase in the year-over-year
adjusted gross margin was driven primarily by higher margins in
California and lower direct construction costs as a result of value
engineering and the rebidding of contracts. These factors were
partially offset by lower home prices. Restructuring The Company's
2009 second quarter results included approximately $5.3 million in
homebuilding restructuring charges related to severance ($3.0
million) and lease terminations and fixed asset write offs ($2.3
million), of which approximately $4.6 million was included in the
Company's SG&A expenses and $0.7 million in other expense.
Since December 31, 2008, the Company has reduced its total
headcount by 33%, or 425 employees. Net New Orders and Backlog Net
new orders (excluding joint ventures and discontinued operations)
for the 2009 second quarter decreased 6% from the 2008 second
quarter to 1,169 new homes on a 29% decrease in the number of
average active selling communities from the prior year period. The
Company's cancellation rate for the three months ended June 30,
2009 was 16%, down from 24% for the 2009 first quarter and 25% for
the 2008 second quarter. The Company's sales absorption rate for
the 2009 second quarter was 2.7 per month per community, up from
the prior year second quarter rate of 2.0 per month per community,
and up from 1.5 per month per community for the 2009 first quarter.
The improvement in the Company's sales absorption rate during the
quarter as compared to the 2008 second quarter was due to increases
in most of its markets on a per community basis with absorption
rates particularly stronger in California and Arizona. As a result
of the improved order trends experienced during the 2009 second
quarter, the dollar value of the Company's backlog (excluding joint
ventures) increased 45% from the 2009 first quarter to $308.5
million, or 982 homes. Joint Ventures During the 2009 second
quarter the Company unwound one Southern California joint venture
for a $1.1 million cash payment and the assumption of approximately
$25.2 million of secured project debt. The Company also made a $9.1
million loan remargin payment related to another Southern
California joint venture. As of June 30, 2009, the Company's
unconsolidated joint ventures had $361.1 million in outstanding
borrowings, $112.1 million of which were recourse to the Company,
and remaining land takedown obligations of approximately $21.1
million related to a single unconsolidated joint venture. In
addition, the Company recorded an $8.2 million impairment charge
during the quarter related to its remaining investment in its North
Las Vegas joint venture. Income Taxes The Company recorded a
noncash valuation allowance of $8.9 million against the net
deferred tax asset created as a result of the net loss generated
during the three months ended June 30, 2009. As of June 30, 2009,
the total deferred tax valuation allowance was $682.2 million.
*Please see "Reconciliation of Non-GAAP Financial Measures" on page
10. KEY STATISTICS AND FINANCIAL DATA** As of or For The Three
Months Ended % or % or June 30, June 30, Percentage March 31,
Percentage 2009 2008 Change 2009 Change (Dollars in thousands,
except average selling price) Operating Data: Deliveries (1) 942
1,237 (24%) 687 37% Average selling price (1) $302,000 $327,000
(8%) $300,000 1% Homebuilding revenues $289,672 $410,634 (29%)
$209,535 38% Gross margin % 13.5% (18.5%) 32.0% 3.9% 9.6% Gross
margin % from home sales (excluding impairments) 18.5% 12.9% 5.6%
17.4% 1.1% Impairments $21,270 $149,185 (86%) $30,805 (31%)
Restructuring charges $5,504 $913 503% $14,119 (61%) SG&A %
15.9% 19.3% (3.4%) 25.0% (9.1%) SG&A % (excluding restructuring
charges) 14.3% 19.1% (4.8%) 19.3% (5.0%) Net new orders (1) 1,169
1,241 (6%) 734 59% Monthly sales absorption rate per community (1)
2.7 2.0 35% 1.5 80% Cancellation rate (1) 16% 25% (9%) 24% (8%)
Average active selling communities (1) 144 203 (29%) 158 (9%)
Backlog (homes) (1) 982 1,515 (35%) 689 43% Backlog (dollar value)
(1) $308,540 $522,484 (41%) $212,208 45% Cash flows (uses) from
operating activities $68,595 $(62,852) (209%) $128,998 (47%) Cash
flows (uses) from investing activities $(10,128) $18,923 (154%)
$(1,500) 575% Cash flows (uses) from financing activities $(32,681)
$278,151 (112%) $(204,723) (84%) Land purchases, net $7,857 $19,819
(60%) $680 1055% Adjusted Homebuilding EBITDA (2) $33,139 $(10,859)
(405%) $7,260 356% As of % or % or June 30, March 31, Percentage
December 31, Percentage 2009 2009 Change 2008 Change (Dollars in
thousands, except per share amounts) Balance Sheet Data:
Homebuilding cash (including restricted cash) $573,038 $668,300
(14%) $626,379 (9%) Inventories owned $1,115,556 $1,195,483 (7%)
$1,262,521 (12%) Building sites owned or controlled 22,012 22,775
(3%) 24,136 (9%) Homes under Construction (1) 1,041 999 4% 1,326
(21%) Completed specs (excluding podium projects) (1) 258 500 (48%)
589 (56%) Completed specs - podium projects (1) 193 104 86% - -
Deferred tax asset valuation allowance $682,186 $673,274 1%
$654,107 4% Homebuilding debt $1,275,300 $1,411,290 (10%)
$1,486,437 (14%) Joint venture recourse debt $112,141 $157,492
(29%) $173,894 (36%) Stockholders' equity $346,512 $361,028 (4%)
$407,941 (15%) Stockholders' equity per share (including
as-converted preferred stock) (3) $1.44 $1.50 (4%) $1.70 (15%)
Total debt to book capitalization (4) 79.3% 80.2% (0.9%) 79.2% 0.1%
Adjusted net homebuilding debt to book capitalization (5) 67.1%
67.4% (0.3%) 68.0% (0.9%) **Please see "Notes to Key Statistics and
Financial Data" beginning on page 11. Earnings Conference Call A
conference call to discuss the Company's 2009 second quarter will
be held at 1:00 p.m. Eastern Time Thursday, July 23, 2009. 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 (888) 791-4315 (domestic) or
(913) 981-5567 (international); Passcode: 5410511. 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 (888) 203-1112
(domestic) or (719) 457-0820 (international); Passcode: 5410511.
About Standard Pacific Standard Pacific, one of the nation's
largest homebuilders, has built more than 105,000 homes during its
43-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. The
Company provides mortgage financing and title services to its
homebuyers through Standard Pacific Mortgage and SPH Title. For
more information about the Company and its new home developments,
please visit our website at: http://www.standardpacifichomes.com/.
This news release contains forward-looking statements. These
statements include but are not limited to statements regarding: our
ability to align our cost structure with demand for new homes;
trends in new home orders and deliveries; our progress toward
achieving profitability; and orders and backlog. 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 of 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 credit agreements,
public notes, and private term loans and our ability to comply with
their covenants and repay such debt as it comes due; a negative
change 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, 2008 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: John Stephens, SVP & CFO (949)
789-1641, or Lloyd McKibbin, SVP & Treasurer (949) 789-1603,
(Note: Tables follow) STANDARD PACIFIC CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (2008
as Adjusted(1)) Three Months Ended June 30, Six Months Ended June
30, 2009 2008 % Change 2009 2008 % Change (Dollars in thousands,
except per share amounts) Homebuilding: Home sale revenues $284,206
$404,678 (30%) $490,439 $750,666 (35%) Land sale revenues 5,466
5,956 (8%) 8,768 8,211 7% Total revenues 289,672 410,634 (29%)
499,207 758,877 (34%) Cost of home sales (244,868) (479,690) (49%)
(441,570) (914,032) (52%) Cost of land sales (5,696) (6,834) (17%)
(10,431) (38,329) (73%) Total cost of sales (250,564) (486,524)
(48%) (452,001) (952,361) (53%) Gross margin 39,108 (75,890) (152%)
47,206 (193,484) (124%) Gross margin % 13.5% (18.5%) 9.5% (25.5%)
Selling, general and administrative expenses (46,026) (79,135)
(42%) (98,405) (158,579) (38%) Loss from unconsolidated joint
ventures (5,578) (17,817) (69%) (2,489) (38,385) (94%) Interest
expense (11,735) - - (22,776) - - Other income (expense) (61)
(13,098) (100%) 4,363 (12,543) (135%) Homebuilding pretax loss
(24,292) (185,940) (87%) (72,101) (402,991) (82%) Financial
Services: Revenues 4,283 2,164 98% 6,333 8,405 (25%) Expenses
(3,261) (3,514) (7%) (6,256) (7,957) (21%) Income from
unconsolidated joint ventures 119 172 (31%) 119 375 (68%) Other
income 48 53 (9%) 89 111 (20%) Financial services pretax income
(loss) 1,189 (1,125) (206%) 285 934 (69%) Loss from continuing
operations before income taxes (23,103) (187,065) (88%) (71,816)
(402,057) (82%) Provision for income taxes (10) (61,186) (100%)
(265) (61,870) (100%) Loss from continuing operations (23,113)
(248,251) (91%) (72,081) (463,927) (84%) Loss from discontinued
operations, net of income taxes (20) (745) (97%) (524) (1,936)
(73%) Net loss (23,133) (248,996) (91%) (72,605) (465,863) (84%)
Less: Net loss allocated to preferred stockholders 14,191 - -
44,573 - - Net loss available to common stockholders $(8,942)
$(248,996) (96%) $(28,032) $(465,863) (94%) Basic loss per share:
Continuing operations $(0.10) $(3.43) (97%) $(0.30) $(6.41) (95%)
Discontinued operations - (0.01) (100%) - (0.03) (100%) Basic loss
per share $(0.10) $(3.44) (97%) $(0.30) $(6.44) (95%) Diluted loss
per share: Continuing operations $(0.10) $(3.43) (97%) $(0.30)
$(6.41) (95%) Discontinued operations - (0.01) (100%) - (0.03)
(100%) Diluted loss per share $(0.10) $(3.44) (97%) $(0.30) $(6.44)
(95%) Weighted average common shares outstanding: Basic 93,134,612
72,418,288 29% 92,959,116 72,361,505 28% Diluted 240,947,398
72,418,288 233% 240,771,902 72,361,505 233% (1) Certain 2008
amounts have been retroactively adjusted to reflect the adoption of
APB No. 14-1, "Accounting for Convertible Debt Instruments That May
be Settled in Cash upon Conversion (Including Partial Cash
Settlement)." STANDARD PACIFIC CORP. AND SUBSIDIARIES CONDENSED
CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except per share
amounts) (2008 as Adjusted(1)) June 30, December 31, 2009 2008
ASSETS (unaudited) Homebuilding: Cash and equivalents $568,816
$622,157 Restricted cash 4,222 4,222 Trade and other receivables
19,831 21,008 Inventories: Owned 1,115,556 1,262,521 Not owned
35,815 42,742 Investments in unconsolidated joint ventures 50,850
50,468 Deferred income taxes 10,715 14,122 Other assets 22,990
145,567 1,828,795 2,162,807 Financial Services: Cash and
equivalents 5,583 3,681 Restricted cash 2,745 4,295 Mortgage loans
held for sale 58,393 63,960 Mortgage loans held for investment
10,337 11,736 Other assets 5,964 4,792 83,022 88,464 Assets of
discontinued operations 331 1,217 Total Assets $1,912,148
$2,252,488 LIABILITIES AND EQUITY Homebuilding: Accounts payable
$22,301 $40,225 Accrued liabilities 182,509 216,418 Liabilities
from inventories not owned 24,409 24,929 Revolving credit facility
22,870 47,500 Secured project debt and other notes payable 95,960
111,214 Senior notes payable 1,030,702 1,204,501 Senior
subordinated notes payable 125,768 123,222 1,504,519 1,768,009
Financial Services: Accounts payable and other liabilities 2,298
3,657 Mortgage credit facilities 55,640 63,655 57,938 67,312
Liabilities of discontinued operations 1,114 1,331 Total
Liabilities 1,563,571 1,836,652 Equity: Stockholders' Equity:
Preferred stock, $0.01 par value; 10,000,000 shares authorized;
450,829 shares issued and outstanding at June 30, 2009 and December
31, 2008, respectively 5 5 Common stock, $0.01 par value;
600,000,000 shares authorized; 101,110,072 and 100,624,350 shares
issued and outstanding at June 30, 2009 and December 31, 2008,
respectively 1,011 1,006 Additional paid-in capital 1,002,227
996,492 Accumulated deficit (639,447) (566,842) Accumulated other
comprehensive loss, net of tax (17,284) (22,720) Total
Stockholders' Equity 346,512 407,941 Noncontrolling Interests 2,065
7,895 Total Equity 348,577 415,836 Total Liabilities and Equity
$1,912,148 $2,252,488 (1) Certain 2008 amounts have been
retroactively adjusted to reflect the adoption of APB No. 14-1,
"Accounting for Convertible Debt Instruments That May be Settled in
Cash upon Conversion (Including Partial Cash Settlement)." REGIONAL
OPERATING DATA Three Months Ended June 30, 2009 2008 % Change New
homes delivered: California 383 469 (18%) Arizona 62 149 (58%)
Texas (1) 118 176 (33%) Colorado 46 72 (36%) Nevada 6 12 (50%)
Florida 208 224 (7%) Carolinas 119 135 (12%) Consolidated total 942
1,237 (24%) Unconsolidated joint ventures 58 57 2% Discontinued
operations - 46 (100%) Total (including joint ventures) 1,000 1,340
(25%) Average selling prices of homes delivered: California
$403,000 $442,000 (9%) Arizona 203,000 236,000 (14%) Texas (1)
293,000 280,000 5% Colorado 303,000 374,000 (19%) Nevada 222,000
280,000 (21%) Florida 195,000 215,000 (9%) Carolinas 224,000
258,000 (13%) Consolidated (excluding joint ventures) 302,000
327,000 (8%) Unconsolidated joint ventures 513,000 468,000 10%
Total continuing operations (including joint ventures) $314,000
$333,000 (6%) Discontinued operations (including joint ventures) $-
$195,000 (100%) Three Months Ended June 30, % Change % Same 2009
2008 Change Store Net new orders: California 499 488 2% 33% Arizona
116 139 (17%) 48% Texas (1) 131 164 (20%) 33% Colorado 32 39 (18%)
9% Nevada 8 12 (33%) 0% Florida 249 252 (1%) 45% Carolinas 134 147
(9%) 14% Consolidated total 1,169 1,241 (6%) 33% Unconsolidated
joint ventures 89 69 29% 93% Discontinued operations - 25 (100%) -
Total (including joint ventures) 1,258 1,335 (6%) 35% Average
number of selling communities during the period: California 53 69
(23%) Arizona 9 16 (44%) Texas (1) 18 30 (40%) Colorado 6 8 (25%)
Nevada 2 3 (33%) Florida 32 47 (32%) Carolinas 24 30 (20%)
Consolidated total 144 203 (29%) Unconsolidated joint ventures 8 12
(33%) Discontinued operations - 2 (100%) Total (including joint
ventures) 152 217 (30%) (1) Texas excludes the San Antonio
division, which is classified as a discontinued operation. At June
30, Backlog 2009 2008 % Change ($in Dollar Dollar Dollar
thousands): Homes Value Homes Value Homes Value California 381
$164,807 479 $247,050 (20%) (33%) Arizona 98 21,144 172 42,212
(43%) (50%) Texas (1) 123 37,618 267 82,098 (54%) (54%) Colorado 63
19,432 111 38,681 (43%) (50%) Nevada 4 917 21 6,037 (81%) (85%)
Florida 207 39,843 313 68,688 (34%) (42%) Carolinas 106 24,779 152
37,718 (30%) (34%) Consolidated total 982 308,540 1,515 522,484
(35%) (41%) Unconsolidated joint ventures 22 17,706 66 46,201 (67%)
(62%) Discontinued operations - - 6 1,183 (100%) (100%) Total
(including joint ventures) 1,004 $326,246 1,587 $569,868 (37%)
(43%) (1) Texas excludes the San Antonio division, which is
classified as a discontinued operation. At June 30, 2009 2008 %
Change Building sites owned or controlled: Building sites owned
17,508 21,000 (17%) Building sites optioned or subject to contract
2,413 3,843 (37%) Joint venture lots 2,089 4,272 (51%) Total
continuing operations (including joint ventures) 22,010 29,115
(24%) Discontinued operations 2 20 (90%) Total 22,012 29,135 (24%)
Total homes under construction (including specs): Consolidated
(excluding podium projects) 1,041 2,248 (54%) Podium projects - 134
(100%) Total consolidated 1,041 2,382 (56%) Spec homes under
construction: Consolidated (excluding podium projects) 480 1,009
(52%) Podium projects - 134 (100%) Total consolidated 480 1,143
(58%) Completed and unsold homes: Consolidated (excluding podium
projects) 258 421 (39%) Podium projects 193 - - Total consolidated
451 421 7% RECONCILIATION OF NON-GAAP FINANCIAL MEASURES The table
set forth below reconciles the Company's earnings (loss) for the
three months ended June 30, 2009 and 2008 to earnings (loss)
excluding the after-tax impairment, restructuring and deferred tax
asset valuation charges: Three Months Ended June 30, 2009 2008
(Dollars in thousands, except per share amounts) Net income (loss)
$(23,133) $(248,996) Add: Impairment charges, net of income taxes
13,081 93,539 Add: Restructuring charges, net of income taxes 3,384
572 Add: Deferred tax asset charge 8,912 130,871 Add: Loss on early
extinguishment of debt - 9,144 Net income (loss), as adjusted
$2,244 $(14,870) Diluted earnings (loss) per share $0.01 $(0.21)
Diluted shares outstanding 240,947,398 72,418,288 The table set
forth below reconciles the Company's homebuilding gross margin
percentage and gross margin percentage from home sales for the
three months ended June 30, 2009 and 2008, and March 31, 2009,
excluding housing inventory impairment charges: Three Months Ended
June 30, Gross June 30, Gross March 31, Gross 2009 Margin % 2008
Margin % 2009 Margin % (Dollars in thousands) Homebuilding gross
margin $39,108 13.5% $(75,890) (18.5%) $8,098 3.9% Less: Land sale
revenues (5,466) (5,956) (3,302) Add: Cost of land sales 5,696
6,834 4,735 Gross margin from home sales 39,338 13.8% (75,012)
(18.5%) 9,531 4.6% Add: Housing inventory impairment charges 13,129
127,386 26,332 Gross margin from home sales, as adjusted $52,467
18.5% $52,374 12.9% $35,863 17.4% The table set forth below
reconciles the Company's SG&A rate for the three months ended
June 30, 2009 and 2008, and March 31, 2009 to the SG&A rate
excluding restructuring charges: Three Months Ended June 30, June
30, March 31, 2009 SG&A% 2008 SG&A% 2009 SG&A% (Dollars
in thousands) Selling, general and administrative expenses $46,026
15.9% $79,135 19.3% $52,379 25.0% Less: Restructuring charges
(4,650) (1.6%) (569) (0.2%) (12,001) (5.7%) Selling, general and
administrative expenses, excluding restructuring charges $41,376
14.3% $78,566 19.1% $40,378 19.3% We believe that the measures
described above, which exclude the effect of impairment, tax
valuation and restructuring charges, and loss on early
extinguishment of debt, are useful to investors as they provide
investors with a perspective on the underlying operating
performance of the business by isolating the impact of charges
related to impairments, tax valuation and restructuring charges,
and loss on early extinguishment of debt. However, it should be
noted that such measures are not GAAP financial measures. 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. NOTES TO KEY
STATISTICS AND FINANCIAL DATA (1) Excludes unconsolidated joint
ventures and discontinued operations. (2) 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, (e) homebuilding depreciation and amortization, (f)
amortization of stock-based compensation, (g) income (loss) from
unconsolidated joint ventures and (h) 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
investors as one measure of the Company's ability to service debt
and obtain financing. However, it should be noted that Adjusted
Homebuilding EBITDA is not a U.S. generally accepted accounting
principles ("GAAP") financial measure. Due to the significance of
the GAAP components excluded, Adjusted Homebuilding EBITDA 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. For the three and twelve
months ended June 30, 2009 and 2008, and three months ended March
31, 2009, EBITDA and Adjusted Homebuilding EBITDA from continuing
and discontinued operations was calculated as follows: Three Months
Ended LTM Ended June 30, June 30, June 30, March 31, 2009 2008 2009
2009 2008 (Dollars in thousands) Net income (loss) $(23,133)
$(248,996) $(49,472) $(840,357) $(1,026,533) Provision (benefit)
for income taxes - 60,769 - (67,564) 390 Homebuilding interest
amortized to cost of sales and interest expense 33,590 20,689
25,718 123,606 115,876 Homebuilding depreciation and amortization
711 1,613 824 4,122 7,326 Amortization of stock-based compensation
4,079 1,002 1,529 11,560 18,674 EBITDA 15,247 (164,923) (21,401)
(768,633) (884,267) Add: Cash distributions of income from
unconsolidated joint ventures 326 185 - 1,759 7,155 Impairment
charges 13,129 134,884 30,805 741,025 844,582 Less: Income (loss)
from unconsolidated joint ventures (5,459) (17,645) 3,089 (115,235)
(156,502) Income (loss) from financial services subsidiary 1,022
(1,350) (945) (443) (269) Adjusted Homebuilding EBITDA $33,139
$(10,859) $7,260 $89,829 $124,241 The table set forth below
reconciles net cash provided by (used in) operating activities,
from continuing and discontinued operations, calculated and
presented in accordance with GAAP, to Adjusted Homebuilding EBITDA:
Three Months Ended LTM Ended June 30, June 30, June 30, March 31,
2009 2008 2009 2009 2008 (Dollars in thousands) Net cash provided
by (used in) operating activities $68,595 $(62,852) $128,998
$294,714 $499,385 Add: Provision (benefit) for income taxes -
60,769 - (67,564) 390 Deferred tax valuation allowance (8,913)
(130,871) (19,167) (287,090) (395,097) Homebuilding interest
amortized to cost of sales and interest expense 33,590 20,689
25,718 123,606 115,876 Excess tax benefits from share-based payment
arrangements - - - - 28 Gain (loss) on early extinguishment of debt
55 (9,144) 5,333 5,388 (5,254) Less: Income (loss) from financial
services subsidiary 1,022 (1,350) (945) (443) (269) Depreciation
and amortization from financial services subsidiary 171 203 175 719
832 Loss on disposal of property and equipment 675 - 663 4,130
1,439 Net changes in operating assets and liabilities: Trade and
other receivables (7,666) 396 6,393 (11,654) (1,230) Mortgage loans
held for sale 8,854 (9,020) (15,799) 10,478 (36,850) Inventories-
owned (95,734) 49,968 (41,822) (258,149) (214,539) Inventories-not
owned 460 29 678 115 (5,554) Deferred income taxes 8,913 26,108
19,167 284,877 122,638 Other assets 1,599 32,910 (120,274) (78,323)
14,615 Accounts payable 10,336 3,340 7,793 44,681 14,126 Accrued
liabilities 14,918 5,672 10,135 33,156 17,709 Adjusted Homebuilding
EBITDA $33,139 $(10,859) $7,260 $89,829 $124,241 (3) The pro forma
common shares outstanding include the as-converted Series B
Preferred Stock. In addition, this calculation excludes 7.8 million
shares issued under a share lending agreement related to the
Company's 6% Convertible Senior Subordinated Notes issued on
September 28, 2007. The Company believes that the pro forma
stockholders' equity per common share information is useful to
investors as a measure to determine the book value per common share
after giving effect of the issuance of Preferred Shares assuming
full conversion to common stock and excluding shares outstanding
under the share lending agreement. This is a non-GAAP financial
measure and due to the significance of items adjusted and excluded
from this calculation, such measure should not be considered in
isolation or as an alternative to operating performance measures.
The following table reconciles actual common shares outstanding to
pro forma common shares outstanding and calculates pro forma
stockholders' equity per share: June 30, March 31, December 31,
2009 2009 2008 Actual common shares outstanding 101,110,072
100,851,622 100,624,350 Add: Conversion of Preferred shares to
common shares 147,812,786 147,812,786 147,812,786 Less: Common
shares outstanding under share lending facility (7,839,809)
(7,839,809) (7,839,809) Pro forma common shares outstanding
241,083,049 240,824,599 240,597,327 Stockholders' equity (actual
amounts rounded to nearest thousand) $346,512,000 $361,028,000
$407,941,000 Divided by pro forma common shares outstanding /
241,083,049 / 240,824,599 / 240,597,327 Pro forma stockholders'
equity per common share $1.44 $1.50 $1.70 (4) Total debt at June
30, 2009, March 31, 2009 and December 31, 2008 includes $55.6
million, $46.9 million and $63.7 million, respectively, of
indebtedness of the Company's financial services subsidiary. (5)
Adjusted net homebuilding debt excludes indebtedness of the
Company's financial services subsidiary and additionally reflects
the offset of cash and equivalents in excess of $5 million. We
believe that the adjusted net homebuilding debt to total book
capitalization ratio is useful to investors as a measure of the
Company's ability to obtain financing. This is a non-GAAP ratio and
other companies may calculate this ratio differently. For purposes
of the ratio of adjusted net homebuilding debt to total book
capitalization, total book capitalization is adjusted net
homebuilding debt plus stockholders' equity. Adjusted net
homebuilding debt is calculated as follows: June 30, March 31,
December 31, 2009 2009 2008 (Dollars in thousands) Total
consolidated debt $1,330,940 $1,458,230 $1,550,092 Less: Financial
services indebtedness (55,640) (46,940) (63,655) Homebuilding cash
in excess of $5 million (568,038) (663,300) (621,386) Adjusted net
homebuilding debt $707,262 $747,990 $865,051 DATASOURCE: Standard
Pacific Corp. CONTACT: John Stephens, SVP & CFO,
+1-949-789-1641, , or Lloyd McKibbin, SVP & Treasurer,
+1-949-789-1603, , both of Standard Pacific Corp. Web Site:
http://www.standardpacifichomes.com/
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