Exhibit 99.1
Standard Pacific Corp. Reports Record Second Quarter Earnings of $1.72 per
Share, Up 37%, and Raises Full Year Guidance to $8.60 to $8.70 per Share on
Strength of $2.4 Billion Backlog, Up 60% Year-Over- Year
Financial and Operating Highlights - 2004 Second Quarter
vs. 2003 Second Quarter
* Earnings per share up 37% to a record $1.72 (including debt redemption
charge of $0.18 per share) vs. $1.26 last year
* Net income of $60.0 million, up 43%
* Homebuilding revenues up 49% to a record $769 million
* Record 2,054 new home deliveries, up 13% from last year
* Homebuilding gross margin up 280 basis points to 23.5%
* Record Adjusted Homebuilding EBITDA* of $113.1 million, an increase of
41% over 2003, and an EBITDA margin of 14.7%
* LTM return on average equity of 24.2%
* Record 3,215 new home orders, up 24% year-over-year
* Record quarter-end backlog of 6,752 homes, valued at $2.4 billion,
up 60%
EPS Guidance for 2004 Raised to $8.60 to $8.70, an Increase of
Up to 43% Year-Over-Year
IRVINE, Calif., July 28 /PRNewswire-FirstCall/ -- Standard Pacific Corp.
(NYSE: SPF) today reported the Company's 2004 second quarter operating
results. Net income for the second quarter ended June 30, 2004 increased 43%
to $60.0 million, or $1.72 per diluted share, compared to $42.0 million, or
$1.26 per diluted share, for the year earlier period. The Company's operating
results for the 2004 second quarter include an after-tax charge of
$6.3 million, or $0.18 per diluted share, recorded in connection with the
Company's decision to fully redeem $250 million of 8% and 8.5% senior notes.
Stephen J. Scarborough, Chairman and Chief Executive Officer, stated, "We
are pleased to report another quarter of record operating results underscoring
our position as one of the leading homebuilders in some of the nation's
largest and most dynamic markets. Our superior operating results reflect the
success of our growth initiatives in our existing markets, particularly in
California where our product and pricing power has generated significant
top-line and bottom-line growth, as well as our success in integrating
acquisitions with diversified operating models as we have steadily expanded
into new geographic regions. Looking ahead, our long-term outlook for the
future is bolstered by favorable demographic and economic forces, constraints
on the supply of buildable land in certain of our markets resulting in low
levels of housing inventory and additional growth opportunities through our
participation in the ongoing consolidation of the homebuilding industry."
Mr. Scarborough added, "We continued to benefit from our strong position
in three of the country's largest, most dynamic markets -- California, Florida
and Arizona -- which generated over 80% of our unit volume companywide.
During the quarter, our deliveries were up 29% in California and up 11% in
Arizona. In Florida, where we delivered 463 homes for the quarter versus
533 homes last year, we are projecting to deliver over 2,800 homes for all of
2004 which would represent a 27% increase year-over-year. In fact, new home
deliveries in Florida during the second half of 2004 are expected to be up
over 40% year-over-year, and our Florida deliveries will represent
approximately 29% of our deliveries companywide in only our second full year
of operations in the state."
"Notwithstanding our successful record of growth, we continue to be
focused on generating strong financial returns and conservatively managing our
balance sheet. For the twelve-month period ended June 30, 2004, we generated
a return on average stockholders' equity of 24.2%. To fuel our growth plans,
we increased our land inventory by over 12,000 lots, up 35% year-over-year,
while keeping our leverage well within our target range. At June 30, 2004, we
controlled approximately 48,500 lots, of which 54% were owned, representing a
3 to 4 year supply of land, most of which is located in increasingly supply
constrained markets."
"Based on our positive results experienced in the first half of the year
and on our record backlog, we are raising our 2004 earnings guidance for the
full year to between $8.60 and $8.70 per share, up from our previous guidance
of $7.55 to $7.65 per share. Our new earnings target would result in up to a
43% increase over our full year 2003 per share earnings. The updated guidance
for 2004 reflects the impact of the $6.3 million after-tax charge, or $0.18
per share, recorded in the second quarter in connection with the Company's
decision to fully redeem its $100 million of 8% Senior Notes due 2008 and
$150 million of 8 1/2% Senior Notes due 2009. These notes were repaid from
the proceeds of two notes issued in March of this year which were $150 million
each with interest rates of 5 1/8% and 6 1/4%."
"For 2004 we are targeting 9,500 deliveries, excluding 250 homes in joint
ventures, and homebuilding revenues of approximately $3.4 billion. At the end
of the second quarter, over 100% of our projected deliveries for the full year
have been delivered or are in our backlog. To support our 19% increase in
projected deliveries this year, we are planning to open between 100 and 110
new communities companywide, up approximately 30% year-over-year, which would
result in a year-end community count of 170 to 180 projects, up approximately
16%."
"We are also providing initial earnings guidance for the third quarter of
2004 of $1.90 to $1.95 per share, which would represent a 13% increase year-
over-year. We are targeting 2,450 deliveries, excluding 50 joint venture
homes, and homebuilding revenues of $850 million in the quarter. For the
fourth quarter of 2004, our earnings are expected to be $3.65 to $3.75 per
share, an increase of up to 61%. The dramatic increase in the fourth quarter
is due to the higher level of new community openings in the first half of this
year versus last year coupled with the strong level of demand and pricing
power in our major markets during the same period."
Mr. Scarborough concluded, "We continue to allocate our available capital
in a manner that we feel will enhance long-term value for our shareholders.
We remain committed to reinvesting cash in our existing operations while
preserving sufficient liquidity for pursuing our growth initiatives. During
the quarter, we also took advantage of the equity markets' reaction to higher
interest rates by repurchasing nearly 500,000 shares of our stock for
$22.8 million, of which approximately $7.9 million of these buybacks were made
under our Board's new $75 million authorization. We will continue to evaluate
share repurchases in a balanced manner consistent with our desire to continue
to grow and diversify."
"While we recognize that many investors have expressed legitimate concerns
about the impact on housing of a rising interest rate environment, we want to
re-emphasize the importance that other significant factors and trends have on
the supply and demand for new housing, particularly over the long haul. Jobs,
population, immigration, and the aging baby boomers play an important role in
the housing demand equation and are generally positive in the major markets in
which we build. The public homebuilders have demonstrated an ability to grow
over the past decade through acquisition and share gains in a number of market
conditions. Moreover, with the growing constraints on the availability of
buildable land, the large public builders with their strong balance sheets and
sophisticated management teams have an increasingly significant competitive
advantage."
Homebuilding Operations
Homebuilding pretax income for the 2004 second quarter increased 47% to
$97.2 million from $66.1 million in the year earlier period. The increase in
pretax income was driven by a 49% increase in homebuilding revenues and a
280 basis point improvement in the Company's homebuilding gross margin
percentage. These positive factors were partially offset by a $2.5 million
decrease in joint venture income and a 60 basis point increase in our SG&A
rate.
Homebuilding revenues for the 2004 second quarter increased 49% to
$769.3 million from $515.2 million last year. The increase in revenues was
attributable to an 18% increase in new home deliveries (exclusive of joint
ventures) combined with a 30% increase in our consolidated average home price
to $382,000.
During the 2004 second quarter, the Company delivered 789 new homes in
California (exclusive of joint ventures), a 51% increase over the 2003 second
quarter. Including joint ventures, California deliveries were up 29% to
839 homes, which reflected strong housing market conditions throughout
Southern California and improving market conditions in Northern California.
Deliveries were up 9% in Southern California to 539 new homes (including
9 joint venture deliveries), while deliveries were up 94% in Northern
California to 300 new homes (including 41 joint venture deliveries). In
Florida, where housing market conditions remain healthy, the Company delivered
463 new homes in the second quarter of 2004, including 67 homes from our
recently acquired operations in Jacksonville. Although deliveries were down
13% year-over-year in Florida due primarily to the timing of new community
openings and sales releases, deliveries for the full year are expected to be
up over 25%. The Company delivered 351 homes during the second quarter in
Phoenix, an 11% increase over the 2003 second quarter, reflective of strong
housing demand in the nation's second largest metropolitan housing market,
combined with the opening of 13 new communities over the past three quarters.
In the Carolinas, deliveries were off 4% to 127 new homes. New home
deliveries were up 50% in Texas and up 28% in Colorado. While economic and
housing market conditions remain weak in Texas, the Company has successfully
introduced a number of lower-priced new home projects resulting in an increase
in absorption rates year-over-year. In Colorado, improving economic
conditions, combined with a similar introduction of more affordable housing,
have contributed to the increased level of new home deliveries.
During the 2004 second quarter, the Company's average home price was up
30% year-over-year to $382,000. The higher selling price was driven primarily
by a 24% increase in the Company's average price in California to $634,000
(exclusive of joint ventures) and from an increase in the percentage of
deliveries from our California operations compared to the year earlier period.
The higher price in California represents the impact of general price
increases in the state and a change in mix during the 2004 second quarter
compared to the prior year. Our average price in Florida was $233,000, up 26%
from the year ago period, which also reflects general price increases, a shift
in mix, and the addition of Jacksonville which had an average home price in
excess of $250,000. Our average price in Arizona was up 4% to $192,000 and up
11% in the Carolinas to $148,000. Both changes are primarily the result of
changes in our product mix. Our average price in Texas was down 13%,
reflecting our increasing emphasis on more affordable homes. For 2004, we
expect that our average home price will increase approximately 16% from the
prior year to $355,000 as a result of higher average prices in California and
Florida, partially offset by lower average prices in Texas and Colorado due to
a shift to more affordable homes. We expect that our 2004 third quarter
average home price will be approximately $345,000, while our fourth quarter
average home price is expected to be approximately $360,000.
The Company's homebuilding gross margin was up 280 basis points year-over-
year to 23.5%. The increase in the year-over-year gross margin percentage was
driven primarily by higher margins in California and Arizona. Our margins in
Florida were generally in line with the year earlier period and reflect
healthy housing market conditions in all eight of our regions in the state.
Margins in Texas and Colorado, while improving, were still below our company-
wide average. The higher overall gross margin percentage reflects our ability
to raise home prices in most of our California markets during the past several
quarters as a result of strong housing demand and improving margins in Arizona
due to healthy demand for new homes combined with volume and cost
efficiencies. To a lesser degree, our homebuilding gross margin percentage
was favorably impacted by the reclassification of certain expenses from cost
of sales to SG&A beginning this year. The gross margins in our backlog are
comparable to those generated in the second quarter of 2004.
Selling, general and administrative expenses (including corporate G&A) for
the 2004 second quarter increased 60 basis points to 10.8% of homebuilding
revenues compared to 10.2% last year. The increase in SG&A expenses as a
percentage of homebuilding revenues was due to the reclassification of certain
expenses from cost of sales to SG&A discussed above. Excluding the impact of
the reclassification, our SG&A rate would have been lower. We expect that our
full-year SG&A rate for 2004 will be in the 10% range.
Consistent with our expectations, income from unconsolidated joint
ventures was down $2.5 million for the 2004 second quarter to $11.4 million.
The lower level of profits was driven by a decrease in the number of joint
venture deliveries to 50 homes versus 125 homes last year, which was partially
offset by an increase in income from land sales to other builders. For 2004,
we expect to generate approximately $55 million in joint venture income from
approximately 250 new home deliveries as well as profits from land sales to
other builders. This compares to $60.7 million in 2003 from 620 venture
deliveries and builder land sale profits. The decrease in projected profits
from joint venture new home deliveries this year will be offset, in part, by
an increase in venture land sale profits.
New orders for the quarter increased 24% to a record 3,215 new homes
(including 69 joint venture orders) on a 13% increase in average community
count. The Company's cancellation rate for the quarter remained unchanged at
15% versus the year earlier period. Year-over-year sales were up in three of
our four Southern California divisions. Sales were down in our Orange County
division with fewer active selling communities and a difficult year-over-year
comparison for two larger attractively priced attached products that sold out
during the second quarter of 2004. In Northern California, new home orders
were up 86% on a 32% increase in active selling communities, reflecting both
stronger housing market conditions as well as the expansion of our geographic
footprint including our entrance into Sacramento. The Northern California
total for the 2004 second quarter includes 95 orders from 5 communities from
our new Sacramento division. In Florida, orders were up 39% on a 53% higher
community count. The lower sales rate per community during the quarter
reflects a lack of inventory for sale due to stronger than anticipated
absorption levels in previous periods. The total for the 2004 second quarter
also includes 130 orders from 11 communities from Coppenbarger Homes in
Jacksonville, which was acquired in October 2003. In Arizona, second quarter
orders were up 19% year-over-year despite a 35% decline in the number of
active selling communities. This resulted in an 83% increase on a same store
basis, reflecting strong housing market conditions in Phoenix. Orders were up
1% in the Carolinas on a 10% higher community count, up 72% in Colorado on an
8% higher community count and up 38% in Texas on a 17% higher community count.
In Texas, order levels still reflect the impact of generally weak economic
conditions on the demand for new housing. The Company's improving order
trends in Colorado reflect improving economic conditions, while order levels
in the Carolinas, which are slightly lower then the year ago period on a same
store basis, are running at about one home per week per community.
Order activity in July has been mixed with the companywide total down
approximately 25% for the first four reporting weeks. Order levels in Florida
were up, while they were generally flat in the Carolinas and Texas. In
Arizona, where sales are down year-over-year in July, we have intentionally
slowed our release of new homes to better align sales with our production
capabilities that have been constrained by the record setting permit level in
the greater Phoenix metropolitan area. The year-over-year comparison in
Phoenix is also impacted by a 39% reduction in new home communities. Sales
activity has also slowed in some of our California divisions, we believe
reflecting, in large part, a low inventory of homes available for sale. In
addition, in our Orange County division in Southern California in particular,
we are sensing that some of the slowdown is due to home price appreciation and
negative press concerning interest rates. However, the underlying long-term
economic and supply fundamentals remain strong in this market.
The record level of new home orders for the 2004 second quarter resulted
in a record second quarter backlog of 6,752 presold homes (including 150 joint
venture homes) valued at an estimated $2.4 billion (including $95 million of
joint venture backlog), an increase of 60% from the June 30, 2003 backlog
value.
The Company ended the quarter with 157 active selling communities, a 10%
increase over the year earlier period. The higher community count resulted
from the opening of 49 new communities during the first half of 2004 including
25 new communities during the second quarter. The Company is planning to open
50 to 60 new communities during the balance of the year and is targeting a
year-end community count of approximately 170 to 180 active subdivisions,
approximately 16% higher than at the end of 2003.
Financial Services
The Company generated a modest loss at its financial services subsidiary,
which currently offers mortgage banking services to our homebuyers in
California, Arizona, Texas, and in South Florida. The decline compared to
last year was a result of lower margins on loan sales and capture rates due to
competitive pressures resulting from the significant reduction in mortgage
refinance activity during the first half of the year due to higher mortgage
interest rates, as well as the start up nature of our operations in Arizona
and Texas. The Company has decided to transition its mortgage operations in
Arizona and Texas from the joint venture structure to its wholly owned
financial services subsidiary.
Financial services joint venture income, which is derived from mortgage
banking joint ventures with third party financial institutions, which operate
in conjunction with our homebuilding divisions in Arizona, Texas, Colorado,
the Carolinas, and Tampa and Southwestern Florida, was down 2% to $721,000.
The lower level of income was primarily due to the decrease in business in
Arizona and Texas as we transition our mortgage lending activities to our
wholly owned financial services subsidiary.
Earnings Conference Call
A conference call to discuss the Company's 2004 second quarter earnings
will be held at 10:00 am Eastern time tomorrow morning. The call will be
broadcast live over the Internet and can be accessed through the Company's
website at www.standardpacifichomes.com/investor/investors.asp. The call will
also be accessible via telephone by dialing (800) 915-4836. The entire audio
transmission with the synchronized slide presentation will also be available
on our website for replay within 2 to 3 hours following the live broadcast. A
replay of the conference call will also be available by dialing (800) 428-6051
(Code 364934).
Standard Pacific, one of the nation's largest homebuilders, has built
homes for more than 65,000 families during its 38-year history. The Company
constructs homes within a wide range of price and size targeting a broad range
of homebuyers. Standard Pacific operates in some of the strongest housing
markets in the country with operations in major metropolitan areas in
California, Texas, Arizona, Colorado, Florida and the Carolinas. The Company
provides mortgage financing and title services to its homebuyers through its
subsidiaries and joint ventures, Family Lending Services, WRT Financial,
Westfield Home Mortgage, Universal Land Title of South Florida 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: the Company's outlook;
demographic trends driving long-term demand; constraints on the supply of
buildable land and ongoing industry consolidation; the Company's pursuit of
growth initiatives; the outlook for the housing sector, including the relative
impact of interest rates, jobs, land constraints, demographic trends and the
availability of mortgage financing; housing market conditions in the markets
in which the Company operates; orders and backlog; the Company's three to four
year lot supply; expected new community openings and active subdivisions; the
Company's expected earnings, deliveries and revenues; the Company's expected
SG&A rate; expected average home prices; the Company's expected homebuilding
gross margin percentage; and expected joint venture income and deliveries.
Forward-looking statements are based on 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 our 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 continued impact of terrorist activities and 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; the demand for single-family homes; cancellations of purchase
contracts by homebuyers; the cyclical and competitive nature of our 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 our
mortgage banking operations, including hedging activities; future business
decisions and our ability to successfully implement our operational, growth
and other strategies; litigation and warranty claims; and other risks
discussed in our filings with the Securities and Exchange Commission,
including in our Annual Report on Form 10-K for the year ended December 31,
2003. We assume no, and hereby disclaim any, obligation to update any of the
foregoing or any other forward-looking statements. We nonetheless reserve 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.
* For a definition of Adjusted Homebuilding EBITDA and a reconciliation of
net income to Adjusted Homebuilding EBITDA and cash flows from operating
activities to Adjusted Homebuilding EBITDA, please see the Selected
Financial Data included herewith.
STANDARD PACIFIC CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
Homebuilding:
Revenues $769,274 $515,197 $1,304,528 $914,930
Cost of sales (588,759) (408,800) (1,002,582) (730,707)
Gross margin 180,515 106,397 301,946 184,223
Selling, general
and administrative
expenses (83,215) (52,693) (150,922) (98,528)
Income from
unconsolidated
joint ventures 11,410 13,899 27,659 22,127
Interest expense (2,047) (1,831) (3,612) (3,487)
Other income
(expense) (9,513) 312 (8,858) 627
Homebuilding
pretax income 97,150 66,084 166,213 104,962
Financial Services:
Revenues 1,798 4,108 3,929 7,292
Expenses (2,638) (2,117) (5,202) (4,151)
Income from
unconsolidated
joint ventures 721 735 1,457 1,389
Other income 158 68 205 103
Financial services
pretax income 39 2,794 389 4,633
Income before taxes 97,189 68,878 166,602 109,595
Provision for income
taxes (37,193) (26,915) (64,215) (42,843)
Net Income $59,996 $41,963 $102,387 $66,752
Earnings Per Share:
Basic $1.78 $1.30 $3.02 $2.07
Diluted $1.72 $1.26 $2.93 $2.01
Weighted Average
Common Shares
Outstanding:
Basic 33,781,442 32,341,042 33,860,745 32,254,469
Diluted 34,898,194 33,347,970 34,993,203 33,188,967
Cash dividends
per share $0.08 $0.08 $0.16 $0.16
Selected Operating Data
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
New homes delivered:
Southern California 530 406 872 739
Northern California 259 118 441 241
Total California 789 524 1,313 980
Florida 463 533 856 846
Arizona 351 315 833 643
Carolinas 127 132 205 239
Texas 179 119 276 229
Colorado 95 74 167 111
Consolidated total 2,004 1,697 3,650 3,048
Unconsolidated joint
ventures:
Southern California 9 88 78 191
Northern California 41 37 60 53
Total
unconsolidated
joint ventures 50 125 138 244
Total (including
joint ventures) 2,054 1,822 3,788 3,292
Average selling price
of homes delivered:
California (excluding
joint ventures) $634,000 $512,000 $613,000 $508,000
Florida $233,000 $185,000 $224,000 $183,000
Arizona $192,000 $185,000 $188,000 $179,000
Carolinas $148,000 $133,000 $142,000 $134,000
Texas $235,000 $271,000 $243,000 $273,000
Colorado $309,000 $308,000 $297,000 $310,000
Consolidated
(excluding
joint ventures) $382,000 $293,000 $356,000 $294,000
Unconsolidated
joint ventures
(California) $655,000 $553,000 $624,000 $543,000
Total (including
joint ventures) $389,000 $311,000 $366,000 $312,000
Net new orders:
Southern California 561 561 1,214 1,084
Northern California 415 184 805 331
Total California 976 745 2,019 1,415
Florida 1,055 760 1,970 1,473
Arizona 651 545 1,083 928
Carolinas 146 144 304 309
Texas 177 128 335 246
Colorado 141 82 272 170
Consolidated total 3,146 2,404 5,983 4,541
Unconsolidated joint
ventures:
Southern California 3 105 14 216
Northern California 66 74 108 119
Total
unconsolidated
joint ventures 69 179 122 335
Total (including
joint ventures) 3,215 2,583 6,105 4,876
Average number of
selling communities
during the period:
Southern California 22 21 23 22
Northern California 22 14 23 14
Total California 44 35 46 36
Florida 49 32 47 30
Arizona 15 23 18 23
Carolinas 11 10 11 9
Texas 21 18 20 20
Colorado 13 12 12 12
Consolidated total 153 130 154 130
Unconsolidated joint
ventures:
Southern California 1 4 1 5
Northern California 3 5 3 4
Total
unconsolidated
joint ventures 4 9 4 9
Total (including
joint ventures) 157 139 158 139
Selected Operating Data (continued)
At June 30,
Backlog (in homes): 2004 2003
Southern California 1,226 1,201
Northern California 847 247
Total California 2,073 1,448
Florida 2,844 1,661
Arizona 1,002 852
Carolinas 164 151
Texas 243 163
Colorado 276 147
Consolidated total 6,602 4,422
Unconsolidated joint ventures:
Southern California 19 249
Northern California 131 109
Total unconsolidated joint ventures 150 358
Total (including joint ventures) 6,752 4,780
Backlog (estimated dollar value in thousands):
Consolidated total $2,329,277 $1,333,850
Unconsolidated joint ventures (California) 95,337 183,374
Total (including joint ventures) $2,424,614 $1,517,224
Building sites owned or controlled:
Southern California 12,304 9,810
Northern California 4,907 3,532
Total California 17,211 13,342
Florida 14,876 10,216
Arizona 7,479 4,671
Carolinas 4,062 3,300
Texas 3,090 2,758
Colorado 1,712 1,681
Total (including joint ventures) 48,430 35,968
Total building sites owned 26,022 17,458
Total building sites optioned 15,365 12,267
Total joint venture lots 7,043 6,243
Total (including joint ventures) 48,430 35,968
Completed and unsold homes 100 145
Homes under construction 5,932 4,237
Selected Financial Data
Three Months Ended
June 30,
2004 2003
(Dollars in thousands)
Net income $59,996 $41,963
Net cash provided by (used in)
operating activities $(5,453) $(63,742)
Net cash provided by (used in)
investing activities $18,001 $8,648
Net cash provided by (used in)
financing activities $(230,723) $131,986
Adjusted Homebuilding EBITDA (1) $113,149 $80,252
Homebuilding SG&A as a percentage
of homebuilding revenues 10.8% 10.2%
Homebuilding interest incurred $21,919 $18,864
Homebuilding interest capitalized
to inventories owned $19,872 $17,033
Ratio of LTM Adjusted Homebuilding
EBITDA to homebuilding
interest incurred 5.6x 4.2x
(1) Adjusted Homebuilding EBITDA means net income (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) material noncash
impairment charges, if any, (e) homebuilding depreciation and
amortization, (f) amortization of stock-based compensation, (g) income
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 a measure of our ability to service debt and obtain
financing. However, it should be noted that Adjusted Homebuilding
EBITDA is a non-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 accounting principles generally accepted in the
United States. The tables set forth below reconcile net cash provided
by (used in) operating activities and net income, calculated and
presented in accordance with accounting principles generally accepted
in the United States, to Adjusted Homebuilding EBITDA:
Three Months Ended
June 30,
2004 2003
(Dollars in thousands)
Net cash provided by (used in)
operating activities $(5,453) $(63,742)
Add:
Income taxes 37,193 26,915
Homebuilding interest expense 2,047 1,831
Expensing of previously capitalized
interest included in cost of sales 12,718 14,590
Less:
Income (loss) from financial services
subsidiary (840) 1,991
Depreciation and amortization from
financial services
Subsidiary 114 79
Loss on extinguishment of debt 10,154 --
Net changes in operating assets and
liabilities:
Mortgages, other notes and receivables 18,620 (1,037)
Inventories-owned 40,394 119,988
Inventories-not owned 27,056 (1,811)
Deferred income taxes 2,878 1,273
Other assets 14,465 2,110
Accounts payable 10,486 (5,643)
Accrued liabilities (38,257) (22,506)
Liabilities from inventories not owned 430 10,354
Adjusted Homebuilding EBITDA $113,149 $80,252
Selected Financial Data (continued)
Three Months Ended
June 30,
2004 2003
(Dollars in thousands)
Net income $59,996 $41,963
Add:
Cash distributions of income from
unconsolidated joint ventures 10,013 10,788
Income taxes 37,193 26,915
Homebuilding interest expense 2,047 1,831
Expensing of previously capitalized
interest included in cost of sales 12,718 14,590
Homebuilding depreciation and
amortization 872 790
Amortization of stock-based compensation 1,601 --
Less:
Income from unconsolidated joint
ventures 12,131 14,634
Income (loss) from financial
services subsidiary (840) 1,991
Adjusted Homebuilding EBITDA $113,149 $80,252
Balance Sheet Data
(Dollars in thousands, except per share amounts)
At June 30,
2004 2003
Stockholders' equity per share $33.21 $25.88
Ratio of total debt to total
book capitalization (1) 51.5% 54.5%
Ratio of adjusted net homebuilding
debt to total book capitalization (2) 49.8% 50.4%
Ratio of total debt to LTM adjusted
homebuilding EBITDA (1) 2.5x 3.7x
Ratio of adjusted net homebuilding debt
to LTM adjusted homebuilding EBITDA (2) 2.4x 3.2x
Homebuilding interest capitalized in
inventories owned $55,004 $39,129
Homebuilding interest capitalized as a
percentage of inventories owned 2.7% 2.5%
(1) Total debt at June 30, 2004 and 2003 includes $45.3 million and
$69.3 million, respectively, of indebtedness of the Company's
financial services subsidiary and $25.9 million and $1.7 million,
respectively, of indebtedness included in liabilities from inventories
not owned.
(2) Adjusted net homebuilding debt reflects the offset of $7.2 million and
$79.3 million in cash and equivalents at June 30, 2004 and 2003,
respectively, against homebuilding debt of $1,114.6 million and
$936.2 million, respectively. Adjusted net homebuilding debt at
June 30, 2004 and 2003 is further adjusted to exclude $45.3 million
and $69.3 million, respectively, of indebtedness of the Company's
financial services subsidiary and $25.9 million and $1.7 million,
respectively, of indebtedness included in liabilities from inventories
not owned. We believe that the adjusted net homebuilding debt to
total book capitalization and net adjusted homebuilding debt to LTM
adjusted homebuilding EBITDA ratios are useful to investors as a
measure of our ability to obtain financing. These are non-GAAP ratios
and other companies may calculate these ratios differently.
STANDARD PACIFIC CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
June 30, December 31,
2004 2003
(Unaudited)
ASSETS
Homebuilding:
Cash and equivalents $12,209 $159,654
Mortgage notes receivable and
accrued interest 4,501 7,171
Other notes and receivables 34,418 37,721
Inventories:
Owned 2,059,447 1,760,567
Not owned 243,439 128,453
Investments in and advances to
unconsolidated joint ventures 164,440 164,649
Property and equipment, net 7,496 7,343
Deferred income taxes 28,454 26,361
Other assets 36,169 17,291
Goodwill 75,639 73,558
2,666,212 2,382,768
Financial Services:
Cash and equivalents 6,958 10,829
Mortgage loans held for sale 53,436 64,043
Other assets 1,997 3,063
62,391 77,935
Total Assets $2,728,603 $2,460,703
LIABILITIES AND STOCKHOLDERS' EQUITY
Homebuilding:
Accounts payable $68,428 $77,837
Accrued liabilities 216,095 203,138
Liabilities from inventories not owned 29,743 19,615
Revolving credit facility 51,500 --
Trust deed and other notes payable 40,108 24,232
Senior notes payable 874,028 823,001
Senior subordinated notes payable 148,980 148,936
1,428,882 1,296,759
Financial Services:
Accounts payable and other liabilities 1,481 1,694
Mortgage credit facilities 45,259 59,317
46,740 61,011
Total Liabilities 1,475,622 1,357,770
Minority Interests 137,192 69,732
Stockholders' Equity:
Preferred stock, $0.01 par value;
10,000,000 shares authorized;
none issued -- --
Common stock, $0.01 par value;
100,000,000 shares authorized;
33,598,010 and 33,862,218 shares
outstanding, respectively 336 339
Additional paid-in capital 420,795 435,164
Retained earnings 694,658 597,698
Total Stockholders' Equity 1,115,789 1,033,201
Total Liabilities and
Stockholders' Equity $2,728,603 $2,460,703
SOURCE Standard Pacific Corp.
-0- 07/28/2004
/CONTACT: Andrew H. Parnes, Executive Vice President of Standard Pacific
Corp., +1-949-789-1616/
/Web site: http://www.standardpacifichomes.com/investor/investors.asp /
/Web site: http://www.standardpacifichomes.com /
(SPF)
CO: Standard Pacific Corp.
ST: California
IN: RLT FIN CST
SU: ERN CCA