Standard Pacific Corp. Reports 2014 Full Year and Fourth Quarter Results
2014 pretax income of $350.0 million, up 36% from 2013
2014 backlog value of $916.4 million, up 14% from 2013
IRVINE, CALIFORNIA, February 5, 2015. Standard Pacific Corp. (NYSE: SPF) today announced results for the year and fourth quarter ended December 31, 2014.
2014 Highlights and Comparisons to 2013
| · | Net income of $215.9 million, or $0.54 per diluted share, vs. net income of $188.7 million, or $0.47 per diluted share |
| · | Pretax income of $350.0 million, up 36% |
| · | Net new orders of 4,967, up 1%; Dollar value of net new orders up 13% |
| · | Backlog of 1,711 homes, up 1%; Dollar value of backlog up 14% |
| · | 182 average active selling communities, up 10% |
| · | Home sale revenues of $2,366.8 million, up 25% |
| · | Average selling price of $478 thousand, up 16% |
| · | 4,956 new home deliveries, up 8% |
| · | Gross margin from home sales of 26.1%, compared to 24.6% |
| · | SG&A rate from home sales of 11.7%, compared to 12.1% |
| · | Operating margin from home sales of $341.9 million, or 14.4%, compared to $236.5 million, or 12.5% |
| · | $943.1 million of land purchases and development costs, compared to $807.9 million |
2014 Fourth Quarter Highlights and Comparisons to the 2013 Fourth Quarter
| · | Net income of $64.6 million, or $0.16 per diluted share, vs. $64.8 million, or $0.16 per diluted share |
| · | Pretax income of $104.4 million, up 3% |
| · | Net new orders of 978, up 11%; Dollar value of net new orders up 18% |
| · | 184 average active selling communities, up 6% |
| · | Home sale revenues of $724.3 million, up 21% |
| · | Average selling price of $491 thousand, up 10% |
| · | 1,475 new home deliveries, up 10% |
| · | Gross margin from home sales of 25.2%, compared to 26.8% |
| · | Operating margin from home sales of $103.5 million, or 14.3%, compared to $92.6 million, or 15.5% |
| · | $255.9 million of land purchases and development costs, compared to $216.0 million |
Scott Stowell, the Company's President and Chief Executive Officer commented, "I am pleased with our solid financial performance in 2014, the third most profitable year in Standard Pacific Homes' 50-year history." Mr. Stowell added, "Our 2014 results reflect our strong land position and the continued execution of our strategy, with full year pretax income, home sale revenues and backlog value up 36%, 25% and 14%, respectively."
Revenue. Revenues from home sales for the 2014 fourth quarter increased 21%, to $724.3 million, as compared to the prior year period, resulting primarily from a 10% increase in the Company's average home price to $491 thousand, the highest quarterly average home price in Company history, and a 10% 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 a 21% increase in deliveries from the Company's Southwest region where the Company's average active selling communities grew 23%, and a 14% increase from the Company's California region.
Orders. Net new orders for the 2014 fourth quarter were up 11% from the 2013 fourth quarter, to 978 homes, with the dollar value of these orders up 18%. The Company's monthly sales absorption rate was 1.8 per community for the 2014 fourth quarter, up 5% from the 2013 fourth quarter and down 15% compared to the 2014 third quarter. The 15% decrease in sales absorption rate from the 2014 third quarter to the 2014 fourth quarter was favorable compared to the approximately 20% decrease in sales absorption rate we have typically experienced from the third quarter to the fourth quarter over the last 10 years. The Company's cancellation rate for both the 2014 and 2013 fourth quarter was 21%, compared to 19% for the 2014 third quarter. Our 2014 fourth quarter cancellation rate is consistent with our average historical cancellation rate of approximately 22% over the last 10 years.
Backlog. The dollar value of homes in backlog increased 14% to $916.4 million, or 1,711 homes, compared to $800.5 million, or 1,700 homes, for the 2013 fourth quarter, and decreased 19% compared to $1.1 billion, or 2,208 homes, for the 2014 third quarter. The increase in year-over-year backlog value was driven primarily by a 14% 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 fourth quarter, the Company spent $255.9 million on land purchases and development costs, compared to $216.0 million for the 2013 fourth quarter. The Company purchased $172.3 million of land, consisting of 1,937 homesites, of which 38% (based on homesites) is located in California, 31% in Florida, 16% in Texas, 12% in Colorado, and 3% in the Carolinas. As of December 31, 2014, the Company owned or controlled 35,430 homesites, of which 24,434 were owned and actively selling or under development, 6,458 were controlled or under option, and the remaining 4,538 homesites were held for future development or for sale. The homesites owned that are actively selling or under development represent a 4.9 year supply based on the Company's deliveries for the twelve months ended December 31, 2014.
Liquidity. The Company ended the quarter with $630 million of available liquidity, including $180 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 December 31, 2014 and 2013 was 56.0% and 55.6%, respectively, and adjusted net homebuilding debt to adjusted book capitalization was 53.3%* and 49.9%*, respectively. In addition, the Company's homebuilding debt to adjusted homebuilding EBITDA for the year ended December 31, 2014 and 2013 was 4.5x* and 4.8x*, respectively.
Earnings Conference Call
A conference call to discuss the Company's 2014 fourth quarter results will be held at 12:00 p.m. Eastern time February 6, 2015. 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) 312-9852 (domestic) or (719) 325-2149 (international); Passcode: 6873830. 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: 6873830.
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; new home orders; deliveries; backlog; absorption rates; cancellation rates; average home price; 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, jmccall@stanpac.com
*Please see "Reconciliation of Non-GAAP Financial Measures" beginning on page 11.
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*Please see "Reconciliation of Non-GAAP Financial Measures" beginning on page 11.
