FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from N/A to
----------------- -----------------
Commission file number 1-10959
STANDARD PACIFIC CORP.
(Exact name of registrant as specified in its charter)
Delaware 33-0475989
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1565 W. MacArthur Blvd., Costa Mesa, CA 92626
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (714) 668-4300
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [_].
APPLICABLE ONLY TO CORPORATE ISSUERS
Registrant's shares of common stock outstanding at November 3, 1997: 29,568,281.
STANDARD PACIFIC CORP. AND SUBSIDIARIES
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997
The consolidated condensed financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and regulations
of the Securities and Exchange Commission. Certain information normally
included in the financial statements prepared in accordance with generally
accepted accounting principles has been omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are adequate to
make the information presented not misleading. The financial statements should
be read in conjunction with the financial statements and notes thereto included
in the Company's Annual Report on Form 10-K for the year ended December 31,
1996 and the Company's current report on Form 8-K dated June 11, 1997.
STANDARD PACIFIC CORP. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
FOR THE THREE MONTH PERIODS ENDED SEPTEMBER 30, 1997 AND 1996
(Dollars in thousands, except per share data)
(Unaudited)
1997 1996
--------------- ---------------
Revenues $ 177,150 $ 105,417
Cost of sales 149,572 91,212
--------------- ---------------
Gross margin 27,578 14,205
--------------- ---------------
Selling, general and administrative expenses 16,158 9,287
Income from unconsolidated joint venture 1,148 871
Interest expense 1,109 1,841
Other income 201 210
--------------- ---------------
Income from continuing operations before income taxes 11,660 4,158
Provision for income taxes (4,786) (1,661)
--------------- ---------------
Income from continuing operations 6,874 2,497
Income (loss) from discontinued operations, net of income
taxes of $(255) and $344 for the three months ended
September 30, 1997 and 1996, respectively 367 (472)
--------------- ---------------
NET INCOME $ 7,241 $ 2,025
=============== ===============
NET INCOME PER SHARE:
Income from continuing operations $ 0.23 $ 0.08
Income (loss) from discontinued operations 0.01 (0.01)
--------------- ---------------
NET INCOME PER SHARE $ 0.24 $ 0.07
=============== ===============
Weighted average common and equivalent shares outstanding 29,835,195 30,063,811
=============== ===============
The accompanying notes are an integral part of these
consolidated condensed statements.
STANDARD PACIFIC CORP. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1997 AND 1996
(Dollars in thousands, except per share data)
(Unaudited)
1997 1996
------------ ------------
Revenues $ 429,030 $ 268,729
Cost of sales 364,775 234,736
------------ ------------
Gross margin 64,255 33,993
------------ ------------
Selling, general and administrative expenses 38,869 25,811
Income from unconsolidated joint ventures 2,665 3,900
Interest expense 3,956 5,046
Other income 664 738
------------ ------------
Income from continuing operations before income taxes 24,759 7,774
Provision for income taxes (10,163) (3,116)
------------ ------------
Income from continuing operations 14,596 4,658
Income from discontinued operations, net of income taxes of
$(578) and $(79) for the nine months ended September 30,
1997 and 1996, respectively 829 151
------------ ------------
NET INCOME $ 15,425 $ 4,809
============ ============
NET INCOME PER SHARE:
Income from continuing operations $ 0.49 $ 0.15
Income from discontinued operations 0.03 0.01
------------ ------------
NET INCOME PER SHARE $ 0.52 $ 0.16
============ ============
Weighted average common and equivalent shares outstanding 29,749,635 30,065,262
============ ============
The accompanying notes are an integral part of these
consolidated condensed statements.
STANDARD PACIFIC CORP. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------- ------------
ASSETS
Cash and equivalents $ 3,173 $ 5,252
Investment securities held to maturity - 5,329
Mortgage notes receivable and accrued interest 2,821 3,741
Other notes and accounts receivable, net 10,916 8,648
Inventories:
Real estate in process of development and completed model homes 434,807 363,718
Real estate held for sale 6,174 8,927
Property and equipment, at cost, net of accumulated depreciation
and amortization of $4,081 and $3,320, respectively 5,903 1,741
Investments in and advances to unconsolidated joint ventures 23,879 885
Deferred income taxes 14,136 16,481
Other assets 4,087 6,325
Excess of cost over net assets acquired, net 6,850 -
-------- --------
Total assets of continuing operations 512,746 421,047
-------- --------
Net assets of discontinued operations 24,169 28,028
-------- --------
TOTAL ASSETS $536,915 $449,075
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Unsecured notes payable $ 33,200 $ 57,300
Trust deed notes payable 8,373 4,467
Accounts payable and accrued expenses 44,699 26,958
10-1/2 percent senior notes due 2000 78,800 100,000
8-1/2 percent senior notes due 2007, net 99,319 -
-------- --------
Total liabilities 264,391 188,725
-------- --------
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value; 10,000,000 shares authorized;
none issued - -
Common stock, $.01 par value; 100,000,000 shares authorized;
29,561,781 and 29,629,981 shares outstanding in 1997 and 1996,
respectively 296 296
Paid-in capital 282,827 283,331
Investment securities valuation adjustment 162 (39)
Accumulated deficit (10,761) (23,238)
-------- --------
Total stockholders' equity 272,524 260,350
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $536,915 $449,075
======== ========
The accompanying notes are an integral part of these
consolidated condensed balance sheets.
STANDARD PACIFIC CORP. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1997 AND 1996
(Dollars in thousands)
(Unaudited)
Nine Months Ended September 30,
-------------------------------
1997 1996
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 15,425 $ 4,809
Adjustments to reconcile net income to net cash provided by (used in)
operating activities:
Depreciation and amortization 665 531
Amortization of deferred income and discounts 4 62
Net (gain) loss on sale of investments, loans and REO (2,613) (560)
Provision for loan losses 3 465
Changes in cash and equivalents due to:
Inventories (60,192) (19,238)
Receivables and accrued interest (672) 207
Investments in and advances to joint ventures (22,994) 660
Accounts payable and accrued expenses 16,331 (2,038)
Deferred income taxes 2,541 543
Excess of cost over net assets acquired (6,850) -
Other, net 4,962 240
-------- --------
Net cash provided by (used in) operating activities $(53,390) $(14,319)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale of investments and principal repayments $ 53,778 $ 15,164
Net sales of real estate owned 2,895 4,134
Net (additions to) retirements from property and equipment (1,144) (229)
Purchases of investment securities (49,207) (30,410)
New loan fundings and loan purchases (352) (1,560)
Loan sales and principal repayments from loans 187,744 52,415
-------- --------
Net cash provided by (used in) investing activities $193,714 $ 39,514
-------- --------
The accompanying notes are an integral part of these consolidated condensed
statements.
STANDARD PACIFIC CORP. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1997 AND 1996
(Dollars in thousands)
(Unaudited)
Nine Months Ended September 30,
-------------------------------
1997 1996
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from (payments on) bank credit facilities $ (24,100) $ 23,350
Net proceeds from the issuance of 8 1/2 percent Senior Notes 96,931 -
Proceeds from deposits to savings accounts 167,365 199,523
Payments on savings account withdrawals (230,996) (225,093)
Interest credited to savings accounts 2,392 3,537
Proceeds from FHLB advances 79,000 13,000
Principal payments on FHLB advances (170,000) (59,000)
Principal payments on notes and trust deed notes payable (25,308) (6,447)
Dividends paid (2,948) (2,705)
Net change in securities sold subject to agreements to repurchase - 3,083
Repurchase of common shares (1,964) -
Proceeds from the exercise of stock options 1,459 -
------------ ------------
Net cash provided by (used in) financing activities $(108,169) $ (50,752)
------------ ------------
Net increase (decrease) in cash and equivalents $ 32,155 $ (25,557)
Cash and equivalents at beginning of period 16,234 37,597
------------ ------------
Cash and equivalents at end of period $ 48,389 $ 12,040
============ ============
SUMMARY OF CASH BALANCES:
Homebuilding and corporate $ 3,173 $ 5,252
Discontinued operations 45,216 6,788
------------ ------------
$ 48,389 $ 12,040
============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Noncash transactions:
Expenses capitalized in connection with the issuance of the
8 1/2 percent Senior Notes due 2007 $ 2,377 $ -
Land acquisitions financed by purchase money trust deeds 8,014 8,904
Loans receivable foreclosed on, net 1,110 2,013
Cash paid during the period for:
Interest, all entities $ 21,190 $ 26,350
Income taxes 3,883 1,478
The accompanying notes are an integral part of these consolidated condensed
statements.
STANDARD PACIFIC CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
(Dollar amounts presented in tables are in thousands)
1. Basis of presentation
---------------------
In the opinion of management, the financial statements reflect all adjustments
(which include only normal recurring adjustments) necessary to present fairly
the financial position as of September 30, 1997 and December 31, 1996, and the
results of operations and cash flows for the periods shown.
2. Capitalization of interest
--------------------------
The following is a summary of interest capitalized and expensed related to real
estate inventories for the nine month and three month periods ended September
30, 1997 and 1996:
Nine Months Ended Three Months Ended,
September 30, September 30,
--------------------------- ---------------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
Total interest incurred during the period $12,362 $12,975 $ 4,247 $ 4,071
Less: Interest capitalized as a cost of real
estate inventories 8,406 7,929 3,138 2,229
---------- ---------- ---------- ----------
Interest expense $ 3,956 $ 5,046 $ 1,109 $ 1,842
========== ========== ========== ==========
Interest previously capitalized as a cost of real
estate inventories, included in cost of sales $17,321 $12,895 $ 7,131 $ 5,014
========== ========== ========== ==========
Interest capitalized in ending inventories $16,227 $27,551 $16,227 $27,551
========== ========== ========== ==========
3. Reclassifications
-----------------
Effective January 1, 1997, the Company changed its presentation of selling costs
in its consolidated statements of operations whereby they are now combined with
general and administrative expenses. This presentation is consistent with
industry practice. Previously, the Company included these costs as a component
of cost of sales. The Company reclassified the prior period amounts to conform
with the 1997 presentation.
Additionally, certain other reclassifications have been made to the 1996
financial information to conform with current period presentation.
4. Earnings per share
------------------
Earnings per share for the three month and nine month periods ended September
30, 1997 and 1996 were calculated based on the weighted average number of common
and equivalent shares outstanding during the periods. Equivalent shares were
determined by using the treasury stock method, which assumes that all dilutive
securities were exercised and that the proceeds received were applied to
repurchase outstanding shares at the average market prices during the period.
In February 1997, the Financial Accounting Standards Board issued Statement No.
128, "Earnings Per Share," which is required to be adopted by the Company no
later than December 31, 1997. At that time, the Company will be required to
change the method used to compute earnings per share and to restate all prior
periods presented. Under the new requirements primary earnings per share will
be replaced with basic earnings per share and fully diluted earnings per share
will be replaced with diluted earnings per share. Basic earnings per share
excludes the dilutive effect of common stock equivalents, including stock
options. With the exception of the three month period ended September 30, 1997,
both basic and diluted net income per share, as calculated under the new
standard, would be the same as net income per share as reflected in the
accompanying consolidated statements of operations for the three month and nine
month periods ended September 30, 1997 and 1996, respectively. Basic net income
per share would have been $0.25 per share versus $0.24 per share for the three
month period ended September 30, 1997.
5. Acquisition
-----------
On September 30, 1997, the Company acquired all of the outstanding stock of Duc
Development Company (Duc), a privately held northern California homebuilding
company, for approximately $16 million in cash. In connection with the
acquisition, the Company acquired certain other real estate assets related to
Duc's operations for approximately $55 million in cash and the assumption of
approximately $8 million of debt.
The acquisition has been accounted for as a purchase, and accordingly, the
purchase price has been allocated to the net assets acquired based upon their
estimated fair market values as of the date of acquisition and are included in
the accompanying consolidated condensed balance sheets. In addition, the excess
of the purchase price over the estimated fair value of net assets acquired
totaled approximately $6.85 million, which has been recorded as excess of cost
over net assets acquired in the accompanying consolidated condensed balance
sheets and is being amortized on a straight-line basis over 7 years. Included
in the $16 million paid for the stock of Duc is contingent consideration of
approximately $5 million which is to be paid upon the Company obtaining
entitlement approvals on a certain parcel of land. Upon such payment, the amount
will be recorded as real estate inventory.
The pro forma effect of including Duc's operations in the Company's consolidated
operating results since January 1, 1997 is not presented, as the impact is not
material. Commencing October 1, 1997, the operating results of Duc will be
included in the Company's consolidated financial statements.
-2-
6. Discontinued Operations
-----------------------
In May 1997, the Company's Board of Directors adopted a plan of disposition (the
"Savings Plan") for the Company's savings and loan subsidiary ("Savings"). In
June 1997, and pursuant to the Savings Plan, Savings sold substantially all of
their mortgage loan portfolio and the Company entered into a definitive
agreement to sell the remainder of Savings' business, including Savings'
charter. The proceeds from the sale of the mortgages were used to pay off
substantially all of the outstanding balances of Federal Home Loan Bank advances
with the remaining amount temporarily invested until the savings deposits are
sold along with Savings' remaining assets. The definitive sale agreement is
subject to, among other things, the approval of the Office of Thrift
Supervision. Management currently estimates that both the disposition of Savings
under the Savings Plan and the operating results of Savings for the period
through the disposition will not result in a significant gain or loss to the
Company.
In November 1997, the Company entered into a definitive agreement (the
"Agreement") to sell all of the outstanding stock of Panel Concepts, Inc.
("Panel") to a third party to be effective December 1, 1997. The net gain will
be recorded upon the closing of the sale, and as a result, no gain on
disposition has been reflected in the accompanying consolidated condensed
results of operations. Proceeds from the sale of Panel are expected to be
approximately $8.8 million before transaction and other related costs.
Additionally, certain assets of Panel totaling approximately $9 million have
been or will be distributed to the Company prior to the closing.
Savings and Panel have been accounted for as discontinued operations and,
accordingly, the results of their operations have been segregated in the
accompanying consolidated condensed statements of operations. Additionally, the
assets and liabilities of these discontinued operations have been classified in
the accompanying consolidated condensed balance sheets as "Net assets of
discontinued operations." Discontinued operations have not been segregated in
the accompanying consolidated condensed statements of cash flows.
Interest income and product sales from these discontinued operations aggregated
$25,866,000 and $29,132,000 for the nine month periods ended September 30, 1997
and 1996, respectively, and $7,637,000 and $9,326,000 for the three month
periods ended September 30, 1997 and 1996, respectively.
-3-
The components of net assets of discontinued operations included in the
accompanying consolidated condensed balance sheets at September 30, 1997 and
December 31, 1996 are as follows:
At September 30, At December 31,
1997 1996
---------------- ---------------
(Dollars in thousands)
Assets:
Cash and equivalents $ 45,216 $ 10,981
Accounts receivable, net 2,459 2,426
Investment securities available for sale 43,402 42,401
Mortgage notes receivable and accrued interest, net 11,605 199,135
Manufacturing inventories 1,302 1,432
Property and equipment, at cost, net of accumulated
depreciation of $3,472 and $4,189, respectively 810 4,527
Real estate acquired in settlement of loans, net 1,405 2,079
Deferred income taxes 1,385 1,581
Investment in FHLB stock 8,330 7,958
Other assets 911 1,813
---------------- ---------------
Total assets--discontinued operations $116,825 $274,333
---------------- ---------------
Liabilities:
Savings accounts $ 71,574 $132,813
FHLB advances 18,000 109,000
Accounts payable and accrued expenses 3,082 4,492
---------------- ---------------
Total liabilities--discontinued operations 92,656 246,305
---------------- ---------------
Net assets of discontinued operations $ 24,169 $28,028
================= ================
-4-
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
A comparative summary of operating results for homebuilding and corporate
operations for the nine month and three month periods ended September 30, 1997
and 1996 is as follows (dollar amounts in thousands):
Nine Months Ended Three Months Ended
September 30, September 30,
-------------------------- --------------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
Revenues $429,030 $268,729 $177,150 $105,417
Cost of sales 364,775 234,736 149,572 91,212
-------- -------- -------- --------
Gross margin 64,255 33,993 27,578 14,205
-------- -------- -------- --------
Gross margin percentage 15.0% 12.6% 15.6% 13.5%
-------- -------- -------- --------
Selling, general and administrative expenses 38,869 25,811 16,158 9,287
Income from unconsolidated joint ventures 2,665 3,900 1,148 871
Interest expense 3,956 5,046 1,109 1,841
Other income 664 738 201 210
-------- -------- -------- --------
Homebuilding and corporate pretax income $ 24,759 $ 7,774 $ 11,660 $ 4,158
======== ======== ======== ========
A summary of residential housing key operating data for the nine month and three
month periods ended September 30, 1997 and 1996 is as follows (dollar amounts in
thousands, except average selling prices):
Nine Months Ended Three Months Ended
September 30, September 30,
-------------------------- --------------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
New homes delivered:
California 1,135 773 462 307
Texas 276 244 95 83
Joint ventures (California) 46 135 17 35
---------- ---------- ---------- ----------
Total 1,457 1,152 574 425
---------- ---------- ---------- ----------
Average Selling Price:
California deliveries (excluding joint ventures) $328,610 $286,764 $341,048 $292,093
Texas deliveries $190,551 $184,185 $186,567 $186,187
Combined (excluding joint ventures) $301,605 $262,153 $314,700 $269,554
Combined (including joint ventures) $303,923 $255,757 $318,565 $262,197
Net new orders 1,591 1,455 480 431
Backlog at quarter end (in units) 633 609
Backlog at quarter end (in dollars) $210,242 $193,649
Active selling communities at quarter end 56 53
-5-
During the quarter ended September 30, 1997, the Company delivered 574 new homes
(including 17 by the Company's unconsolidated joint venture), a new third
quarter high, at an average selling price of $318,565 compared to 425 new homes
(including 35 by the Company's unconsolidated joint venture) at an average
selling price of $262,197 for the 1996 third quarter.
Homebuilding revenues for the quarter ended September 30, 1997, also a new third
quarter high, increased by approximately 68 percent from the year earlier
period, while cost of sales attributed to residential housing increased by
approximately 64 percent over the same period. The rise in homebuilding
revenues of approximately $71.7 million over the 1996 third quarter resulted
primarily from an increase of $45.0 million due to a 43 percent increase in unit
deliveries (excluding joint venture deliveries), an increase of $25.1 million
due to a 16.7 percent jump in the average selling price of homes delivered, with
the balance attributable to an increase in improved lot sales. The Company's
Northern California, Ventura County and Houston divisions experienced strong
growth in unit deliveries, increasing 130 percent, 48 percent and 61 percent
over the year earlier quarter, respectively, while deliveries from the Company's
Orange County division remained consistent with the strong level of deliveries
generated in the 1996 third quarter. The increase in the average selling price
resulted from a greater distribution of homes delivered in the $400,000 to
$800,000 price range in California. The Company anticipates its average selling
price to remain above the $300,000 level for the foreseeable future.
Residential housing cost of sales for the quarter ended September 30, 1997
increased by approximately $58.4 million over the 1996 third quarter primarily
as a result of an increase of $39.0 million due to a greater number of homes
delivered, an increase of $17.9 million attributable to a higher average cost of
new homes delivered and an increase of approximately $1.5 million related to
improved lots.
The homebuilding gross margin percentage increased from 13.5 percent in the
third quarter of 1996 to 15.6 percent in the third quarter of 1997. The
improvement in gross margin reflects the generally healthy housing market in
California.
Selling, general and administrative expenses for the homebuilding and corporate
segment increased as a percentage of revenues from 8.8 percent in the third
quarter of 1996 to 9.1 percent for the 1997 third quarter. This increase is
primarily attributable to the opening of several new communities in the
Company's California markets, an increase in profit based compensation and
certain nonrecurring expenses.
Income from the unconsolidated joint ventures increased from $871,000 in the
third quarter of 1996 to $1.1 million in the third quarter of 1997. Although
joint venture unit deliveries were down from the prior year, profits increased
due to stronger gross margins coupled with higher selling prices.
Interest incurred for the quarter ended September 30, 1997 was $4.2 million of
which $3.1 million was capitalized to real estate inventories compared to $4.1
million incurred for the quarter ended September 30, 1996 of which $2.2 million
was capitalized.
-6-
The Company continues to see a recovery in the San Diego housing market as
evidenced by a more than doubling of net new home orders for the third quarter
over the year earlier period. Company-wide orders for the quarter were up over
11 percent from the previous year to 480, which represents the highest third
quarter order level since 1987. In addition, the Company ended the quarter with
a backlog of 633 homes valued in excess of $210 million, up 9 percent over the
1996 level.
The Company is optimistic about its opportunities in California with its
inventory of well located projects which was further enhanced by the recently
announced acquisition of a homebuilder in the San Francisco Bay Area.
Deliveries from this acquisition should have a positive effect on the Northern
California division beginning in 1998. With this acquisition, the Company adds
over 1,400 single family lots to its real estate inventory.
Inventory Financing Sources
- ---------------------------
Sources of financing for the Company's real estate inventories at September 30,
1997 were: trust deed notes payable 2%, unsecured debt 48% and equity 50%.
Financial Condition and Liquidity
- ---------------------------------
In June 1997, the Company issued $100 million of 8 1/2 percent Senior Notes due
in 2007. The notes were issued at a discount to yield approximately 8.6
percent. The Senior Notes are subject to certain restrictive financial
covenants, which among other things, impose certain limitations on the ability
of the Company to (i) incur additional indebtedness, (ii) create liens, (iii)
pay dividends, and (iv) sell assets. These notes are callable at the Company's
option commencing June 15, 2002 at a premium of 104.25% of par value, with the
call price reducing ratably to par on June 15, 2005. Net proceeds to the
Company after offering expenses were approximately $96.9 million. The Company
used the net proceeds to repay indebtedness outstanding under the Company's
unsecured revolving credit facility.
Borrowings outstanding under the Company's unsecured revolving credit facility
totaled $33.2 million at September 30, 1997 versus $57.3 million at December 31,
1996. In August 1997, the Company and its bank group amended the unsecured
revolving credit facility to, among other things, increase the commitment to
$275 million, increase the term of the facility from three years to four years
and reduce the cost of borrowings and other fees.
On March 1, 1997, the Company made its first of three annual $20 million sinking
fund payments on the 10 1/2 percent Senior Notes due in 2000.
The Company did not repurchase any shares of its common stock during the third
quarter related to the previously announced common stock repurchase program.
However, since the inception of the Company's stock buyback plan the Company has
repurchased an aggregate of 1,285,750 shares of its common stock for
approximately $8.3 million, leaving a balance of approximately $11.7 million
available under the repurchase program.
-7-
On October 28, 1997, the Company's Board of Directors declared a quarterly cash
dividend of $.04 per share of common stock. The dividend will be payable on
November 27, 1997 to shareholders of record on November 13, 1997.
Cash requirements for the homebuilding and corporate segments were provided from
internally generated funds and outside borrowings, principally the revolving
credit facility and the net proceeds from the issuance of the 8 1/2 percent
Senior Notes. Management believes that these sources of cash, including capital
available through the public debt and equity markets, are sufficient to finance
its current and future working capital requirements and other needs.
-8-
STATEMENT REGARDING FORWARD LOOKING DISCLOSURE
The foregoing "Management's Discussion and Analysis of Financial Condition and
Results of Operations" contains "forward looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, which represent the Company's
expectations or beliefs concerning future events, including, but not limited to,
statements regarding the following: the price range of future homes constructed
by the Company; a generally healthy housing market in California; a recovery in
the San Diego housing market; the Company's opportunities in California and the
strength of its inventory in certain California markets; the expected effect of
the acquisition of a San Francisco Bay Area homebuilder on the Company's
operations; the homebuilding segment's backlog of homes; the sufficiency of the
Company's cash provided by internally generated funds and outside borrowings;
the expected gain or loss resulting from the operation of Savings prior to sale
and from the sale of Savings; and the expected sale of Panel Concepts and the
gain to be recognized on such sale. The Company cautions that these statements
are further qualified by important factors that could cause actual results to
differ materially from those in the forward looking statements, including,
without limitation, the following: change in the demand for new homes
attributable to the cyclical and competitive nature of the homebuilding
business; changes in general economic conditions; uncertainty in or changes in
the continued availability of suitable undeveloped land at reasonable prices;
adverse local market conditions; existing and changing governmental regulations,
including regulations concerning environmental matters and the permitting
process for home construction; increases in prevailing interest rates; the level
of real estate taxes and energy costs; the cost of materials and labor; the
availability of construction financing and home mortgage financing attractive to
the purchasers of homes; the availability of financing to homebuilders; and
inclement weather and other natural disasters. Results actually achieved thus
may differ materially from expected results included in these and any other
forward looking statements contained herein.
-9-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
STANDARD PACIFIC CORP.
(Registrant)
Dated: November 10, 1997 By: /s/ Arthur E. Svendsen
----------------------
Arthur E. Svendsen
Chairman of the Board and
Chief Executive Officer
Dated: November 10, 1997 By: /s/ Andrew H. Parnes
--------------------
Andrew H. Parnes
Vice President of Finance, Treasurer
and Principal Financial and
Accounting Officer
-10-
PART II OTHER INFORMATION
Item 1. Legal proceedings
None
Item 2. Change in Securities
None
Item 3. Default upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.9 Stock Purchase Agreement between Standard Pacific Corp. and
Duc Development Company dated September 30, 1997
11. Statement of computation of earnings per share.
27. Financial Data Schedule.
(b) Current Reports on Form 8-K
None
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