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SMALL BUSINESS
Standard Pacific Corp. Reports 2009 Third Quarter Results
IRVINE, Calif., Oct. 29, 2009 /PRNewswire-FirstCall/ -- Standard Pacific Corp. (NYSE: SPF) today announced operating results for its third quarter ended September 30, 2009. Homebuilding revenues for the 2009 third quarter were $327.4 million (including $57.5 million in land sale revenues), down 18% from $400.3 million last year. The Company generated a net loss of $23.8 million, or $0.10 per diluted share, versus a net loss of $369.9 million, or $2.54 per diluted share, for the year earlier period. The 2009 third quarter results included asset impairment charges of $7.8 million, which related primarily to the sale of a podium building and land, versus $368.4 million in impairments in the prior year period. The 2009 third quarter results also included $10.1 million in debt and other restructuring charges and a $9.3 million charge related to the deferred tax asset generated during the quarter. Excluding asset impairment and restructuring charges, the Company generated a 2009 third quarter net loss of approximately $3.6 million*, or $0.01 per diluted share.*
During the quarter, the Company generated $112.6 million of cash flows from operations, driven primarily from a $104.0 million decrease in inventories (including $56.2 million related to the sale of a podium building and land). The Company ended the quarter with $806.8 million of homebuilding cash (including $283.3 million of restricted cash, $257.6 million of which was held in escrow related to the issuance of $280 million of 10¾% senior notes due 2016). On October 9, 2009, the Company completed a refinancing transaction pursuant to which it utilized the $257.6 million of net proceeds from the issuance of the 10¾% senior notes due 2016 and cash on hand to repurchase approximately $133.4 million, $122.0 million and $3.4 million of senior notes due 2010, 2011 and 2013, respectively. The Company also exchanged $32.8 million of its 2012 senior subordinated convertible notes during the quarter for approximately 7.6 million shares of common stock at an effective price of $4.30 per share. Finally, the Company repaid the remaining $37.1 million balance on its Term Loan A credit facility, the $22.9 million balance on its revolving credit facility, $51.3 million of other indebtedness and assumed $52.1 million of joint venture recourse debt during the quarter. In connection with these financing transactions, the Company recorded an $8.8 million non-cash loss on the early extinguishment of debt.
As a result of these transactions, the Company reduced the amount of senior notes, revolving credit facility and Term Loan A indebtedness that was scheduled to mature before 2013 from $528 million to $180 million ($15 million in 2010, $49 million in 2011 and $116 million in 2012). Since just prior to the closing of the MatlinPatterson transaction in June 2008, the Company has reduced the principal amount of its total homebuilding and joint venture recourse debt by over $725 million from $2.0 billion to $1.27 billion and has reduced the amount of homebuilding and joint venture recourse debt maturing prior to 2013 from $1.33 billion to $322 million (including $180 million of senior notes, $97 million of project specific debt and $45 million of joint venture recourse debt related to three joint ventures).
Ken Campbell, the Company's President and CEO stated, "With over $500 million of cash in the bank, anticipated near-term positive cash flows from operations and the significant reduction in the amount of our debt that is scheduled to mature in the next three years, we believe we have ample liquidity to acquire land assets to support our growth when the upturn in the housing market occurs."
Mr. Campbell continued, "Holding our gross margins at 18% and our SG&A rate at 15% during the quarter is not great performance, but gives a good indication of the margins built into our inventory and positions us reasonably well for significant improvements in profitability with only small improvements in the housing market."
Homebuilding Operations
The Company generated a homebuilding pretax loss for the 2009 third quarter of $24.8 million compared to a pretax loss of $389.4 million in the year earlier period. The Company's homebuilding pretax loss for the 2009 third quarter included $7.8 million of asset impairment charges, $8.8 million of loss on early extinguishment of debt and $1.6 million in restructuring charges. The decrease in pretax loss was primarily the result of a $360.5 million decrease in impairment charges and a $33.2 million decrease in the Company's SG&A expenses. These changes were partially offset by a $9.3 million reduction in gross margin (excluding impairments), an $8.7 million increase in non-capitalized interest expense and a $7.0 million increase in loss on early extinguishment of debt.
Homebuilding revenues decreased 18% to $327.4 million during the 2009 third quarter primarily due to a 25% decrease in new home deliveries to 893 homes and a 9% decline in consolidated average home price to $302,000. These decreases were offset in part by a $52.1 million increase in land sale revenues in the 2009 third quarter. The Company's average home price was flat with the 2009 second quarter at $302,000 and was slightly positive on a same community basis.
The Company's homebuilding gross margin (including land sales) for the 2009 third quarter was 13.0% compared to a negative 51.9% in the prior year period. The 2009 third quarter gross margin included $7.7 million in inventory impairment charges, which were included in cost of land sales and related to the sale of a podium building in Southern California and a land sale in Florida. Excluding land sales and the related inventory impairment charges, the Company's 2009 third quarter gross margin from home sales would have been 18.6%* versus 14.1%* for the 2008 third quarter. The 450 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.
The Company's 2009 third quarter selling, general and administrative ("SG&A") expenses (including Corporate G&A) decreased $33.2 million, or 43%, from the year earlier period resulting in an SG&A rate of 13.3% versus 19.2% in the prior year period. The Company's 2009 third quarter results included approximately $1.5 million in homebuilding restructuring charges related to severance and lease terminations, all of which was included in the Company's SG&A expenses. Excluding land sale revenues and restructuring charges, the Company's 2009 third quarter SG&A rate was 15.6%* versus 18.7%* for the 2008 third quarter despite a 32% decrease in home sale revenues.
Net new orders (excluding joint ventures and discontinued operations) for the 2009 third quarter decreased 3% from the 2008 third quarter to 893 new homes on a 28% decrease in the number of average active selling communities from the prior year period from 186 to 134. The Company's cancellation rate for the three months ended September 30, 2009 was 15%, down from 16% for the 2009 second quarter and 26% for the 2008 third quarter. The Company's monthly sales absorption rate for the 2009 third quarter was 2.2 per community, up from the prior year third quarter rate of 1.7 per community, but down from 2.7 per community for the 2009 second quarter. The improvement in the Company's sales absorption rate during the quarter as compared to the 2008 third quarter was due to increases in most of its markets on a per community basis with absorption rates relatively better in California, Arizona and Florida.
The dollar value of the Company's backlog (excluding joint ventures) decreased 17% to $329.7 million, or 995 homes, as compared to the 2008 third quarter value, but was up 7% from the 2009 second quarter backlog value.
Earnings Conference Call
A conference call to discuss the Company's 2009 third quarter will be held at 1:00 p.m. Eastern Time Friday, October 30, 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) 213-3752 (domestic) or (913) 981-5510 (international); Passcode: 5369884. 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: 5369884.
About Standard Pacific
Standard Pacific, one of the nation's largest homebuilders, has built more than 108,000 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: www.standardpacifichomes.com.
This news release contains forward-looking statements. These statements include but are not limited to statements regarding: trends in new home orders, deliveries, average home price and backlog; anticipated cash flows and future profitability; the sufficiency of our liquidity to support growth; 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 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, jstephens@stanpac.com or
Lloyd McKibbin, SVP & Treasurer (949) 789-1603, lmckibbin@stanpac.com.
*Please see "Reconciliation of Non-GAAP Financial Measures" on page 8.
(Note: Tables follow)
KEY STATISTICS AND FINANCIAL DATA**
As of or For the Three Months Ended
% or % or
September 30, September 30, Percentage June 30, Percentage
2009 2008 Change 2009 Change
(Dollars in thousands, except average selling price)
Operating Data:
Deliveries (1) 893 1,188 (25%) 942 (5%)
Average
selling
price (1) $302,000 $332,000 (9%) $302,000 0%
Homebuilding
revenues $327,411 $400,340 (18%) $289,672 13%
Gross
margin % 13.0% (51.9%) 64.9% 13.5% (0.5%)
Gross
margin %
from home
sales
(excluding
impairments)* 18.6% 14.1% 4.5% 18.5% 0.1%
Impairments
and write-
offs $7,814 $368,354 (98%) $21,270 (63%)
Restructuring
charges $1,315 $4,181 (69%) $5,504 (76%)
SG&A % 13.3% 19.2% (5.9%) 15.9% (2.6%)
SG&A %
(excluding
restructuring
charges and
land sales)* 15.6% 18.7% (3.1%) 14.6% 1.0%
Net new
orders (1) 893 921 (3%) 1,169 (24%)
Monthly sales
absorption
rate per
community (1) 2.2 1.7 29% 2.7 (19%)
Cancellation
rate (1) 15% 26% (11%) 16% (1%)
Average active
selling
communities (1) 134 186 (28%) 144 (7%)
Backlog
(homes) (1) 995 1,248 (20%) 982 1%
Backlog
(dollar
value) (1) $329,661 $395,657 (17%) $308,540 7%
Cash flows
(uses) from
operating
activities $112,572 $31,933 253% $68,595 64%
Cash flows
(uses)
from
investing
activities $(9,241) $(11,111) (17%) $(10,128) (9%)
Cash flows
(uses)
from
financing
activities $(147,732) $116,719 (227%) $(32,681) 352%
Land
purchases $21,595 $9,267 133% $7,857 175%
Adjusted
Homebuilding
EBITDA (2) $31,749 $13,126 142% $32,963 (4%)
Homebuilding
interest
incurred $26,218 $34,428 (24%) $26,797 (2%)
Homebuilding
interest
capitalized
to inventories
owned $12,836 $28,890 (56%) $14,106 (9%)
Homebuilding
interest
capitalized to
investments in
unconsolidated
joint
ventures $749 $1,600 (53%) $956 (22%)
As of
% or % or
September 30, June 30, Percentage December 31, Percentage
2009 2009 Change 2008 Change
(Dollars in thousands, except per share amounts)
Balance Sheet
Data:
Homebuilding
cash
(including
restricted
cash) $806,766 $573,038 41% $626,379 29%
Inventories
owned $1,074,153 $1,115,556 (4%)$1,262,521 (15%)
Building
sites
owned or
controlled 20,020 22,012 (9%) 24,136 (17%)
Homes under
construction
(1) 1,106 1,041 6% 1,326 (17%)
Completed
specs
(excluding
podium
projects) (1) 163 258 (37%) 589 (72%)
Completed
specs - podium
projects (1) 193 193 0% - -
Deferred tax
asset
valuation
allowance $691,464 $682,186 1% $654,107 6%
Homebuilding
debt $1,451,336 $1,275,300 14% $1,486,437 (2%)
Joint
venture
recourse
debt $45,189 $112,141 (60%) $173,894 (74%)
Stockholders'
equity $349,591 $346,512 1% $407,941 (14%)
Stockholders'
equity per
share
(including
as-converted
preferred
stock) (3) $1.40 $1.44 (3%) $1.70 (18%)
Total debt
to book
capitalization
(4) 81.0% 79.3% 1.7% 79.2% 1.8%
Adjusted net
homebuilding
debt to book
capitalization
(5) 65.0% 67.1% (2.1%) 68.0% (3.0%)
*Please see "Reconciliation of Non-GAAP Financial Measures" on page 8.
**Please see "Notes to Key Statistics and Financial Data" beginning on
page 9.
STANDARD PACIFIC CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(2008 as Adjusted(1))
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
(Dollars in thousands, except per share amounts)
Homebuilding:
Home sale revenues $269,873 $394,942 $760,312 $1,145,608
Land sale revenues 57,538 5,398 66,306 13,609
Total revenues 327,411 400,340 826,618 1,159,217
Cost of home sales (219,641) (548,622) (661,211)(1,462,654)
Cost of land sales (65,147) (59,375) (75,578) (97,704)
Total cost of
sales (284,788) (607,997) (736,789)(1,560,358)
Gross margin 42,623 (207,657) 89,829 (401,141)
Gross margin % 13.0% (51.9%) 10.9% (34.6%)
Selling, general and
administrative
expenses (43,695) (76,894) (142,100) (235,473)
Loss from
unconsolidated
joint ventures (1,960) (91,937) (4,449) (130,322)
Interest expense (12,633) (3,938) (35,409) (3,938)
Loss on early
extinguishment
of debt (8,824) (1,841) (3,457) (11,339)
Other income (expense) (305) (7,100) (1,309) (10,145)
Homebuilding pretax
loss (24,794) (389,367) (96,895) (792,358)
Financial Services:
Revenues 3,762 2,492 10,095 10,897
Expenses (2,753) (3,106) (9,009) (11,063)
Income from
unconsolidated
joint ventures - 284 119 659
Other income 19 17 108 128
Financial
services
pretax
income (loss) 1,028 (313) 1,313 621
Loss from continuing
operations before
income taxes (23,766) (389,680) (95,582) (791,737)
(Provision) benefit for
income taxes (33) 19,840 (298) (42,030)
Loss from continuing
operations (23,799) (369,840) (95,880) (833,767)
Loss from discontinued
operations, net of
income taxes (45) (69) (569) (2,005)
Net loss (23,844) (369,909) (96,449) (835,772)
Less: Net loss
allocated to
preferred
stockholders 14,500 165,213 59,022 188,354
Net loss available to
common stockholders $(9,344) $(204,696) $(37,427) $(647,418)
Basic loss per share:
Continuing operations $(0.10) $(2.54) $(0.40) $(8.59)
Discontinued operations - - - (0.02)
Basic loss per share $(0.10) $(2.54) $(0.40) $(8.61)
Diluted loss per share:
Continuing operations $(0.10) $(2.54) $(0.40) $(8.59)
Discontinued operations - - - (0.02)
Diluted loss per share $(0.10) $(2.54) $(0.40) $(8.61)
Weighted average
common shares
outstanding:
Basic 95,250,351 80,681,394 93,731,253 75,155,044
Diluted 243,063,137 145,800,364 241,544,039 97,019,962
(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))
September 30, December 31,
2009 2008
ASSETS (unaudited)
Homebuilding:
Cash and equivalents $523,474 $622,157
Restricted cash 283,292 4,222
Trade and other receivables 17,677 21,008
Inventories:
Owned 1,074,153 1,262,521
Not owned 33,389 42,742
Investments in unconsolidated joint
ventures 38,548 50,468
Deferred income taxes 10,383 14,122
Other assets 21,263 145,567
2,002,179 2,162,807
Financial Services:
Cash and equivalents 6,524 3,681
Restricted cash 2,295 4,295
Mortgage loans held for sale 42,625 63,960
Mortgage loans held for investment 10,734 11,736
Other assets 4,373 4,792
66,551 88,464
Assets of discontinued operations 159 1,217
Total Assets $2,068,889 $2,252,488
LIABILITIES AND EQUITY
Homebuilding:
Accounts payable $22,928 $40,225
Accrued liabilities 179,473 216,418
Liabilities from inventories not owned 22,440 24,929
Revolving credit facility - 47,500
Secured project debt and other notes
payable 96,816 111,214
Senior notes payable 1,251,193 1,204,501
Senior subordinated notes payable 103,327 123,222
1,676,177 1,768,009
Financial Services:
Accounts payable and other liabilities 1,731 3,657
Mortgage credit facilities 38,798 63,655
40,529 67,312
Liabilities of discontinued operations 854 1,331
Total Liabilities 1,717,560 1,836,652
Equity:
Stockholders' Equity:
Preferred stock, $0.01 par
value; 10,000,000 shares authorized;
450,829 shares issued and outstanding
at September 30, 2009 and
December 31, 2008, respectively 5 5
Common stock, $0.01 par value;
600,000,000 shares authorized;
105,119,880 and 100,624,350 shares
issued and outstanding at
September 30, 2009 and
December 31, 2008, respectively 1,051 1,006
Additional paid-in capital 1,028,624 996,492
Accumulated deficit (663,291) (566,842)
Accumulated other comprehensive
loss, net of tax (16,798) (22,720)
Total Stockholders' Equity 349,591 407,941
Noncontrolling Interests 1,738 7,895
Total Equity 351,329 415,836
Total Liabilities and Equity $2,068,889 $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 September 30,
2009 2008
Avg. Selling Avg. Selling
Homes Price Homes Price
New homes delivered:
California 347 $442,000 435 $482,000
Arizona 75 202,000 132 215,000
Texas (1) 82 269,000 165 291,000
Colorado 37 312,000 62 358,000
Nevada 5 226,000 22 278,000
Florida 235 181,000 220 206,000
Carolinas 112 216,000 152 233,000
Consolidated total 893 302,000 1,188 332,000
Unconsolidated joint ventures 15 548,000 66 578,000
Discontinued operations 1 130,000 14 176,000
Total (including joint
ventures) 909 $306,000 1,268 $343,000
Three Months Ended September 30,
2009 2008 % Change
Avg. Selling Avg. Selling Same
Homes Communities Homes Communities Store
Net new orders:
California 377 49 340 60 36%
Arizona 79 7 100 13 47%
Texas (1) 96 19 117 29 25%
Colorado 34 6 54 8 (16%)
Nevada 2 2 15 2 (87%)
Florida 189 28 168 45 81%
Carolinas 116 23 127 29 15%
Consolidated
total 893 134 921 186 35%
Unconsolidated
joint ventures 28 5 49 11 26%
Discontinued
operations 1 - 8 - -
Total (including
joint ventures) 922 139 978 197 34%
At September 30,
Backlog ($in 2009 2008
thousands): Homes Value Homes Value
California 424 $190,185 384 $177,890
Arizona 102 21,815 140 30,413
Texas 137 42,849 219 64,950
Colorado 60 18,022 103 31,609
Nevada 1 213 14 3,408
Florida 161 31,457 261 57,880
Carolinas 110 25,120 127 29,507
Consolidated
total 995 329,661 1,248 395,657
Unconsolidated
joint ventures 22 10,722 49 35,443
Total (including
joint ventures) 1,017 $340,383 1,297 $431,100
(1) Texas excludes the San Antonio division, which is classified as a
discontinued operation.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
The table set forth below reconciles the Company's earnings (loss) for the
three months ended September 30, 2009 and 2008 to earnings (loss)
excluding the after-tax impairment, restructuring, loss on early
extinguishment of debt and deferred tax asset valuation charges:
Three Months Ended
September 30,
2009 2008
(Dollars in thousands,
except per share amounts)
Net income (loss) $(23,844) $(369,909)
Add: Impairment charges, net of income
taxes 4,774 225,064
Add: Restructuring charges, net of income
taxes 804 2,555
Add: Loss on early extinguishment of debt,
net of income taxes 5,391 1,125
Add: Deferred tax asset charge 9,278 134,088
Net income (loss), as adjusted $(3,597) $(7,077)
Diluted earnings (loss) per share $(0.01) $(0.05)
Diluted shares outstanding 243,063,137 145,800,364
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 September 30, 2009 and 2008, and June 30, 2009,
excluding housing inventory impairment charges:
Three Months Ended
September 30, Gross September 30, Gross June 30, Gross
2009 Margin % 2008 Margin % 2009 Margin %
(Dollars in thousands)
Homebuilding
gross
margin $42,623 13.0% $(207,657) (51.9%) $39,108 13.5%
Less: Land
sale
revenues (57,538) (5,398) (5,466)
Add: Cost
of land
sales 65,147 59,375 5,696
Gross margin
from home
sales 50,232 18.6% (153,680) (38.9%) 39,338 13.8%
Add: Housing
inventory
impairment
charges - 209,228 13,129
Gross margin
from home
sales, as
adjusted $50,232 18.6% $55,548 14.1% $52,467 18.5%
The table set forth below reconciles the Company's SG&A rate for the three
months ended September 30, 2009 and 2008, and June 30, 2009 to the SG&A
rate excluding restructuring charges and the SG&A rate excluding land sale
revenues and restructuring charges:
Three Months Ended
SG&A% SG&A% SG&A%
(excl. (excl. (excl.
September 30, land September 30, land June 30, land
2009 sales) 2008 sales) 2009 sales)
(Dollars in thousands)
Selling,
general and
administrative
expenses $43,695 16.2% $76,894 19.5% $46,026 16.2%
Less:
Restructuring
charges (1,495) (0.6%) (2,977) (0.8%) (4,650) (1.6%)
Selling,
general
and
administrative
expenses,
excluding
restructuring
charges $42,200 15.6% $73,917 18.7% $41,376 14.6%
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) (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 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 September 30, 2009 and 2008, and
three months ended June 30, 2009, EBITDA and Adjusted Homebuilding
EBITDA from continuing and discontinued operations was calculated as
follows:
Three Months Ended LTM Ended September 30,
September 30, September 30, June 30,
2009 2008 2009 2009 2008
(Dollars in thousands)
Net
income
(loss) $(23,844) $(369,909) $(23,133) $(494,292) $(1,276,776)
Provision
(benefit)
for
income
taxes - (19,886) - (47,678) 55,883
Homebuilding
interest
amortized
to cost
of sales
and
interest
expense 35,681 25,867 33,590 129,526 115,359
Homebuilding
depreciation
and
amortization 672 1,438 711 3,356 6,931
Amortization
of
stock-
based
compensation 1,651 5,174 4,079 8,037 20,671
EBITDA 14,160 (357,316) 15,247 (401,051) (1,077,932)
Add:
Cash
distributions
of income
from
unconsolidated
joint
ventures - 229 326 1,530 1,402
Impairment
charges 7,814 276,105 13,129 472,734 938,986
(Gain)
loss on
early
extinguishment
of debt 8,824 1,841 (176) 7,812 9,380
Less:
Income
(loss)
from
unconsolidated
joint
ventures (1,960) (91,653) (5,459) (25,542) (209,703)
Income
(loss)
from
financial
services
subsidiary 1,009 (614) 1,022 1,180 374
Adjusted
Homebuilding
EBITDA $31,749 $13,126 $32,963 $105,387 $81,165
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 September 30,
September 30, September 30, June 30,
2009 2008 2009 2009 2008
(Dollars in thousands)
Net cash
provided
by (used in)
operating
activities $112,572 $31,933 $68,595 $375,353 $545,946
Add:
Provision
(benefit)
for income
taxes - (19,886) - (47,678) 55,883
Deferred tax
valuation
allowance (9,278) (134,088) (8,913) (162,280) (529,185)
Homebuilding
interest
amortized
to cost of
sales and
interest
expense 35,681 25,867 33,590 133,420 115,359
Less:
Income
(loss)
from
financial
services
subsidiary 1,009 (614) 1,022 1,180 374
Depreciation
and
amortization
from
financial
services
subsidiary 169 188 171 700 837
Loss on
disposal
of property
and equipment 1 901 675 3,230 2,340
Net changes
in operating
assets and
liabilities:
Trade and
other
receivables (2,191) 1,442 (7,666) (15,287) (40,315)
Mortgage
loans held
for sale (16,071) 14,446 8,854 (20,039) (22,969)
Inventories-
owned (103,969) (58,537) (95,734) (303,581) (330,984)
Inventories-
not owned 324 6,154 460 (5,715) 5,344
Deferred
income
taxes 9,277 124,936 8,913 169,218 206,136
Other
assets 1,997 18,669 1,599 (94,995) (4,624)
Accounts
payable (540) 1,264 10,336 42,877 50,535
Accrued
liabilities 5,126 1,401 14,797 39,204 33,590
Adjusted
Homebuilding
EBITDA $31,749 $13,126 $32,963 $105,387 $81,165
(3) The pro forma common shares outstanding include the as-converted
Series B Preferred Stock. In addition, this calculation excludes
3.9 million shares as of September 30, 2009, and 7.8 million shares
as of June 30, 2009 and December 31, 2008, issued under a share
lending agreement related to the Company's 6% Convertible Senior
Subordinated Notes issued on September 28, 2007. During the 2009
third quarter, 3.9 million of the shares issued under the share
lending agreement were returned to the Company. 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 used to calculate pro forma
stockholders' equity per share:
September 30, June 30, December 31,
2009 2009 2008
Actual common shares
outstanding 105,119,880 101,110,072 100,624,350
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 (3,919,904) (7,839,809) (7,839,809)
Pro forma common shares
outstanding 249,012,762 241,083,049 240,597,327
Stockholders' equity
(actual amounts rounded
to nearest thousand) $349,591,000 $346,512,000 $407,941,000
Divided by pro forma
common shares outstanding / 249,012,762 / 241,083,049 / 240,597,327
Pro forma stockholders'
equity per common share $1.40 $1.44 $1.70
(4) Total debt at September 30, 2009, June 30, 2009 and December 31, 2008
includes $38.8 million, $55.6 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:
September 30, June 30, December 31,
2009 2009 2008
(Dollars in thousands)
Total consolidated debt $1,490,134 $1,330,940 $1,550,092
Less:
Financial services
indebtedness (38,798) (55,640) (63,655)
Homebuilding cash in excess
of $5 million (801,766) (568,038) (621,386)
Adjusted net homebuilding debt $649,570 $707,262 $865,051
SOURCE Standard Pacific Corp.