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Standard Pacific Corp. Reports 2008 Fourth Quarter Results
Posted by: gurufocus (IP Logged)
Date: February 13, 2009 04:02PM

Press Release: Standard Pacific Corp. Reports 2008 Fourth Quarter Results

IRVINE, Calif., Feb. 13 /PRNewswire-FirstCall/ -- Standard Pacific Corp. (NYSE: SPF) today reported the Company's unaudited 2008 fourth quarter operating results.

2008 Fourth Quarter Financial and Operating Highlights From Continuing and Discontinued Operations:

  • Homebuilding cash of $626 million;
  • Homebuilding debt reduction of $73.8 million during the quarter;
  • Cash flows generated from operating activities of $65.2 million;
  • Homebuilding segment pretax loss from continuing operations of $444.2 million compared to $385.3 million last year;
  • Consolidated net loss per diluted share of $1.65 vs. net loss per diluted share of $6.10 last year;
  • Consolidated net loss of $396.6 million compared to a net loss of $440.9 million last year;
  • $443.6 million of pretax charges related to inventory, joint venture and goodwill impairments and land deposit write-offs coupled with recording an additional $124.9 million net deferred tax asset valuation allowance during the quarter; and
  • Net loss of approximately $148,000, or $0.00 per diluted share, excluding aggregate charges totaling $1.65 per diluted share** related to after-tax impairment and tax valuation allowance charges.

2008 Fourth Quarter Financial and Operating Highlights From Continuing Operations:

  • Homebuilding revenues of $376.4 million vs. $933.6 million last year;
  • New home deliveries of 1,146*, down 47% from 2,150* last year;
  • 539* net new home orders, down 46% from 1,002* last year;
  • Cancellation rate of 33%*, down from 37%* in the prior year period and up from 26%* for the 2008 third quarter; and
  • Quarter-end backlog of 642* homes, valued at $193 million compared to 1,279* homes valued at $443 million a year ago.

The net loss for the quarter ended December 31, 2008 was $396.6 million, or $1.65 per diluted share, compared to a net loss of $440.9 million, or $6.10 per diluted share, in the year earlier period. Homebuilding revenues from continuing operations for the 2008 fourth quarter were $376.4 million versus $933.6 million last year. The Company's results for the 2008 fourth quarter included pretax impairment charges of $443.6 million. The impairment charges consisted of: $350.3 million related to ongoing consolidated real estate inventories; $26.6 million related to land sold or held for sale; $22.7 million related to the Company's share of joint venture impairment charges; $8.5 million related to land deposit and capitalized preacquisition cost write-offs for abandoned projects; and $35.5 million related to goodwill impairment charges leaving no goodwill remaining on the Company's balance sheet. In addition, the 2008 fourth quarter operating results also included a noncash charge related to a net increase in the Company's deferred tax asset valuation allowance of $124.9 million, or $0.52 per diluted share. Excluding these charges, the Company generated a loss of approximately $148,000, or $0.00 per diluted share.**

Ken Campbell, CEO of Standard Pacific Corp. said, "The well publicized economic and housing downturn has had a profound impact on the Company's operating results. We saw our sales absorption rates, our cancellation rate and general traffic levels deteriorate beyond normal seasonal changes in the fourth quarter. These trends, combined with an expectation of further new home price declines, led to the high level of impairments during the quarter."

"On a positive note," Mr. Campbell continued, "We generated $65 million in cash from operating activities, reduced our homebuilding debt by nearly $74 million, net of $74 million of joint venture and other debt assumed during the fourth quarter, and ended the year with $626 million of cash on our balance sheet. In addition, the Company continued to make aggressive reductions in its headcount and overhead to better align its cost structure with the realities of today's housing market. And while we have made much progress to date in this area, we are vigorously pursuing additional cost cutting initiatives based on our expectation that 2009 will be an extremely challenging year for our Company and the industry."

Mr. Campbell concluded, "With our year end cash balance of over $600 million, an expected tax refund of over $110 million in early 2009 and our cost reductions to date and in process, we believe we have a strong liquidity position."

Cash Generation and Debt Reduction Results

Standard Pacific ended the year with more than $626 million of homebuilding cash while repaying the remaining $103.5 million of its 6 1/2% senior notes due October 1, 2008, reducing the balance outstanding under the Company's revolving credit facility during the 2008 fourth quarter by $5 million to $47.5 million, and paying down its Term Loan A by $5 million to $57.5 million. As a result of Standard Pacific's net operating loss carrybacks for federal income taxes, the Company expects to receive a tax refund of approximately $114 million during the 2009 first quarter.

Inventory Reduction

As a result of the continued focus on inventory reduction initiatives, Standard Pacific's owned or controlled lot position stood at approximately 24,000 lots (including discontinued operations) at December 31, 2008, a 31% reduction from the year ago level and a 68% decrease from the peak lot count at December 31, 2005.

Joint Venture Update

The Company unwound two Southern California joint ventures during the 2008 fourth quarter resulting in the assumption of approximately $67.6 million of joint venture debt. The Company also made an $8.7 million loan remargin payment related to one of these Southern California joint ventures during the 2008 fourth quarter prior to the unwind. The Company's unconsolidated joint ventures reduced their borrowings by approximately $90 million during the 2008 fourth quarter and by $349 million since the end of 2007. As of December 31, 2008, the Company's unconsolidated joint ventures had borrowings outstanding of approximately $422 million, of which $248 million was non-recourse debt (two joint ventures) and $174 million of which was subject to loan-to-value maintenance agreements (seven joint ventures) which the Company was either solely or jointly and severally liable. The Company continues to evaluate its homebuilding joint ventures and may exit additional joint ventures in the future, which may be accomplished by acquiring its partner's interest, disposing of its interest or other means.

Debt Compliance Update

The bank credit facilities contain a liquidity test requiring the Company to maintain either a minimum ratio of cash flow from operations (excluding cash flows from certain excluded subsidiaries) to consolidated home building interest incurred or a minimum liquidity reserve. Since we were unable to meet the minimum cash flow coverage ratio at December 31, 2008, we will set aside approximately $120 million in an interest reserve account. The cash flow coverage ratio was adversely impacted over the past four quarters by the number and magnitude of joint venture unwinds. In addition, in the near term, the Company expects its interest expense will generally decrease as it continues to reduce its debt levels.

In addition, based on the Company's leverage at December 31, 2008, pursuant to its public notes, the Company will be limited in its ability to incur additional indebtedness subject to carve outs for additional borrowings of up to $550 million under bank facilities and an unlimited amount for purchase money non-recourse indebtedness. In addition, the Company will be prohibited from making restricted payments from funds other than those residing in unrestricted subsidiaries. As of December 31, 2008, the Company had in excess of $500 million of liquidity in those unrestricted subsidiaries to cover its joint venture capital and other restricted payment needs.

Restructuring Charges

The Company's 2008 fourth quarter results included approximately $16.4 million in restructuring charges related to division consolidations and related headcount and facilities reductions, of which approximately $13.8 million was included in the Company's selling, general and administrative ("SG&A") expenses, $1.2 million in cost of sales and $1.4 million in other expense. The charges were incurred in an effort to better align the Company's operations and costs with the lower delivery volume levels as a result of weaker economic and housing conditions. The Company's 2008 fourth quarter SG&A rate would have been 14.9%** excluding these restructuring charges. In addition, the Company incurred $3.0 million of G&A related costs in connection with the potential TOUSA acquisition. Excluding these costs and the restructuring related costs the Company's SG&A rate would have been 14.2%**.

Homebuilding Operations

Three Months Ended December 31,   Year Ended December 31,
                       2008         2007  %Change    2008        2007  %Change
                                      (Dollars in thousands)
    Homebuilding
     revenues:
      California      $213,433    $602,457  (65%)   $796,737 $1,484,047  (46%)
      Southwest (1)     82,990     166,156  (50%)    416,749    793,455  (47%)
      Southeast         79,976     164,995  (52%)    322,130    611,331  (47%)
        Total
         homebuilding
         revenues     $376,399    $933,608  (60%) $1,535,616 $2,888,833  (47%)

    Homebuilding
     pretax loss:
      California     $(232,965)  $(197,338)  18%   $(722,096) $(524,856)  38%
      Southwest (1)    (83,701)   (113,460) (26%)   (256,162)  (165,685)  55%
      Southeast       (124,027)    (73,687)  68%    (221,872)  (150,808)  47%
      Corporate         (3,527)       (794) 344%     (34,176)    (5,130) 566%
        Total
         homebuilding
         pretax
         loss        $(444,220)  $(385,279)  15% $(1,234,306) $(846,479)  46%

    Homebuilding
     pretax
     impairment
     charges:
      California      $240,261    $196,504   22%    $690,890   $577,990   20%
      Southwest (1)     81,774     114,374  (29%)    252,877    211,075   20%
      Southeast        121,611      82,072   48%     209,763    195,527    7%
        Total
         homebuilding
         pretax
         impairment
         charges      $443,646    $392,950   13%  $1,153,530   $984,592   17%


    Homebuilding pretax
     impairment
     charges:
      Deposit
       write-offs       $8,550     $11,833  (28%)    $25,649    $22,539   14%
      Inventory
       impairments     376,914     276,228   36%     943,094    705,420   34%
      Joint venture
       impairments      22,660      68,515  (67%)    149,265    202,309  (26%)
      Goodwill
       impairments      35,522      36,374   (2%)     35,522     54,324  (35%)
        Total
         homebuilding
         pretax
         impairment
         charges      $443,646    $392,950   13%  $1,153,530   $984,592   17%

    (1)  Excludes the Company's San Antonio and Tucson divisions, which are
         classified as discontinued operations.

The Company generated a homebuilding pretax loss from continuing operations for the 2008 fourth quarter of $444.2 million compared to a pretax loss of $385.3 million in the year earlier period. The increase in pretax loss was primarily the result of a $50.7 million, or 13%, increase in impairment charges, a 60% decrease in homebuilding revenues to $376.4 million, and an increase in interest expense of approximately $10.3 million. These changes were partially offset by a $39.2 million decrease in the Company's absolute level of SG&A expenses, which included approximately $13.8 million in restructuring charges related to division closures and consolidations, and a $49.6 million decrease in joint venture loss (to a loss of $21.4 million). The Company's homebuilding operations for the 2008 fourth quarter included $443.6 million of pretax impairment charges, which are detailed in the table above. The inventory impairment charges were included in cost of sales, the joint venture charges were included in income (loss) from unconsolidated joint ventures and the land deposit and capitalized preacquisition cost write-offs and goodwill impairment charges were included in other income (expense).

Three Months Ended             Year Ended
                                 December 31,               December 31,
                          2008       2007  %Change    2008       2007  %Change
    New homes
     delivered:
      Southern
       California          279        712   (61%)     1,020     1,476  (31%)
      Northern
       California          181        261   (31%)       648       713   (9%)
        Total
         California        460        973   (53%)     1,668     2,189  (24%)
      Arizona (1)          104        167   (38%)       540     1,029  (48%)
      Texas (1)            157        235   (33%)       677       984  (31%)
      Colorado              49        118   (58%)       229       388  (41%)
      Nevada                 7         25   (72%)        62        68   (9%)
        Total Southwest    317        545   (42%)     1,508     2,469  (39%)
      Florida              237        299   (21%)       883     1,314  (33%)
      Carolinas            132        333   (60%)       548       946  (42%)
        Total Southeast    369        632   (42%)     1,431     2,260  (37%)
          Consolidated
           total         1,146      2,150   (47%)     4,607     6,918  (33%)

      Unconsolidated
       joint ventures:
        Southern
         California         20        146   (86%)       164       348  (53%)
        Northern
         California         26         41   (37%)       102       123  (17%)
        Florida              2          -     -           2         -    -
        Illinois             -          3  (100%)         2        28  (93%)
          Total
           unconsolidated
           joint ventures   48        190   (75%)       270       499  (46%)

          Discontinued
           operations        1        161   (99%)       148       634  (77%)

      Total
       (including
       joint
       ventures)         1,195      2,501   (52%)     5,025     8,051  (38%)


    Average
     selling
     prices
     of homes
     delivered:
      Southern
       California     $511,000   $575,000   (11%)  $521,000  $651,000  (20%)
      Northern
       California      391,000    440,000   (11%)   402,000   498,000  (19%)
        Total
         California    464,000    538,000   (14%)   475,000   601,000  (21%)
      Arizona (1)      208,000    245,000   (15%)   228,000   304,000  (25%)
      Texas (1)        282,000    254,000    11%    280,000   253,000   11%
      Colorado         312,000    367,000   (15%)   348,000   355,000   (2%)
      Nevada           261,000    309,000   (16%)   285,000   316,000  (10%)
        Total
         Southwest     262,000    278,000    (6%)   272,000   292,000   (7%)
      Florida          203,000    238,000   (15%)   209,000   267,000  (22%)
      Carolinas        238,000    235,000     1%    246,000   232,000    6%
        Total
         Southeast     216,000    237,000    (9%)   223,000   253,000  (12%)
      Consolidated
       (excluding
       joint
       ventures)       328,000    384,000   (15%)   330,000   377,000  (12%)
      Unconsolidated
       joint
       ventures        587,000    652,000   (10%)   525,000   565,000   (7%)
      Total
       continuing
       operations
       (including
       joint
       ventures)      $339,000   $406,000   (17%)  $341,000  $390,000  (13%)

      Discontinued
       operations
       (including
       joint
       ventures)      $260,000   $205,000    27%   $175,000  $200,000  (13%)

    (1) Arizona and Texas exclude the Tucson and San Antonio divisions, which
        are classified as discontinued operations.
Three Months Ended December 31,
                                        2008      2007  % Change  % Change
                                                                  Same Store
    Net new orders:
      Southern California                137       243     (44%)     (28%)
      Northern California                 92       148     (38%)     (24%)
        Total California                 229       391     (41%)     (27%)
      Arizona (1)                         40        92     (57%)     (35%)
      Texas (1)                           68       134     (49%)     (44%)
      Colorado                            24        49     (51%)     (30%)
      Nevada                             (3)        15    (120%)    (140%)
        Total Southwest                  129       290     (56%)     (43%)
      Florida                            123       173     (29%)     (17%)
      Carolinas                           58       148     (61%)     (57%)
        Total Southeast                  181       321     (44%)     (35%)
          Consolidated total             539     1,002     (46%)     (34%)

      Unconsolidated joint ventures:
        Southern California               15        58     (74%)     (12%)
        Northern California               11         9      22%       83%
        Florida                            1         -       -         -
        Illinois                          (1)        -       -         -
          Total unconsolidated
           joint ventures                 26        67     (61%)     (12%)
          Discontinued operations          2        84     (98%)       -

      Total (including joint ventures)   567     1,153     (51%)     (31%)

    Average number of selling
     communities during the period:
      Southern California                 33        42     (21%)
      Northern California                 22        27     (19%)
        Total California                  55        69     (20%)
      Arizona (1)                         12        18     (33%)
      Texas (1)                           27        30     (10%)
      Colorado                             7        10     (30%)
      Nevada                               2         4     (50%)
        Total Southwest                   48        62     (23%)
      Florida                             41        48     (15%)
      Carolinas                           28        31     (10%)
        Total Southeast                   69        79     (13%)
          Consolidated total             172       210     (18%)

      Unconsolidated joint ventures:
        Southern California                5        17     (71%)
        Northern California                4         6     (33%)
        Florida                            1         -       -
        Illinois                           1         2     (50%)
          Total unconsolidated
           joint ventures                 11        25     (56%)

          Discontinued operations          -        20    (100%)

      Total (including joint ventures)   183       255     (28%)


                                             Year Ended December 31,
                                        2008      2007  % Change  % Change
                                                                  Same Store
    Net new orders:
      Southern California                909     1,377     (34%)     (32%)
      Northern California                586       735     (20%)     (20%)
        Total California               1,495     2,112     (29%)     (28%)
      Arizona (1)                        422       593     (29%)     (15%)
      Texas (1)                          506       844     (40%)     (48%)
      Colorado                           184       363     (49%)     (30%)
      Nevada                              37        86     (57%)     (43%)
        Total Southwest                1,149     1,886     (39%)     (36%)
      Florida                            810       837      (3%)       1%
      Carolinas                          492       862     (43%)     (47%)
        Total Southeast                1,302     1,699     (23%)     (23%)
          Consolidated total           3,946     5,697     (31%)     (29%)

      Unconsolidated joint ventures:
        Southern California              113       392     (71%)     (33%)
        Northern California               83       110     (25%)       6%
        Florida                            4         -       -         -
        Illinois                          (3)       16    (119%)    (138%)
          Total unconsolidated
           joint ventures                197       518     (62%)     (27%)

          Discontinued operations        105       522     (80%)     151%

      Total (including joint ventures) 4,248     6,737     (37%)     (25%)

    Average number of selling
     communities during the period:
      Southern California                 38        39      (3%)
      Northern California                 25        25       0%
        Total California                  63        64      (2%)
      Arizona (1)                         15        18     (17%)
      Texas (1)                           29        25      16%
      Colorado                             8        11     (27%)
      Nevada                               3         4     (25%)
        Total Southwest                   55        58      (5%)
      Florida                             45        47      (4%)
      Carolinas                           29        27       7%
        Total Southeast                   74        74       0%
          Consolidated total             192       196      (2%)

      Unconsolidated joint ventures:
        Southern California                6        14     (57%)
        Northern California                5         7     (29%)
        Florida                            -         -       -
        Illinois                           1         2     (50%)
          Total unconsolidated
           joint ventures                 12        23     (48%)

          Discontinued operations          2        25     (92%)

      Total (including joint ventures)   206       244     (16%)

    (1)  Arizona and Texas exclude the Tucson and San Antonio divisions, which
         are classified as discontinued operations.
At December 31,
                                                2008        2007    % Change
    Backlog (in homes):
      Southern California                          89        176      (49%)
      Northern California                          65        127      (49%)
        Total California                          154        303      (49%)
      Arizona (1)                                  76        194      (61%)
      Texas (1)                                   130        301      (57%)
      Colorado                                     78        123      (37%)
      Nevada                                        4         29      (86%)
        Total Southwest                           288        647      (55%)
      Florida                                     147        220      (33%)
      Carolinas                                    53        109      (51%)
        Total Southeast                           200        329      (39%)
          Consolidated total                      642      1,279      (50%)

      Unconsolidated joint ventures:
        Southern California                        19         94      (80%)
        Northern California                         5         24      (79%)
        Florida                                     2          -        -
        Illinois                                    -          5     (100%)
          Total unconsolidated joint ventures      26        123      (79%)

          Discontinued operations                   1         44      (98%)

      Total (including joint ventures)            669      1,446      (54%)


    Backlog (estimated dollar
     value in thousands):
      Southern California                     $46,350   $106,648      (57%)
      Northern California                      23,172     57,165      (59%)
        Total California                       69,522    163,813      (58%)
      Arizona (1)                              17,083     50,091      (66%)
      Texas (1)                                38,782     92,030      (58%)
      Colorado                                 24,017     44,311      (46%)
      Nevada                                      893      8,160      (89%)
        Total Southwest                        80,775    194,592      (58%)
      Florida                                  30,408     52,787      (42%)
      Carolinas                                12,735     31,476      (60%)
        Total Southeast                        43,143     84,263      (49%)
          Consolidated total                  193,440    442,668      (56%)

      Unconsolidated joint ventures:
        Southern California                     8,123     60,255      (87%)
        Northern California                     3,266     15,773      (79%)
        Florida                                   540          -        -
        Illinois                                    -      5,978     (100%)
          Total unconsolidated joint ventures  11,929     82,006      (85%)

          Discontinued operations                 208      8,099      (97%)

      Total (including joint ventures)       $205,577   $532,773      (61%)

    (1)  Arizona and Texas exclude the Tucson and San Antonio divisions, which
         are classified as discontinued operations.

At December 31,
                                                2008        2007    % Change
    Building sites owned or controlled:
      Southern California                      5,676       7,235       (22%)
      Northern California                      2,815       4,579       (39%)
        Total California                       8,491      11,814       (28%)
      Arizona (1)                              2,303       2,997       (23%)
      Texas (1)                                1,881       3,370       (44%)
      Colorado                                   374         771       (51%)
      Nevada                                   1,994       2,390       (17%)
        Total Southwest                        6,552       9,528       (31%)
      Florida                                  6,986       8,462       (17%)
      Carolinas                                2,042       3,885       (47%)
      Illinois                                    60          62        (3%)
        Total Southeast                        9,088      12,409       (27%)

        Discontinued operations                    5       1,007      (100%)

          Total (including joint ventures)    24,136      34,758       (31%)

      Building sites owned                    19,306      21,371       (10%)
      Building sites optioned or
       subject to contract                     2,519       5,619       (55%)
      Joint venture lots                       2,306       6,761       (66%)
        Total continuing operations           24,131      33,751       (29%)
        Discontinued operations                    5       1,007      (100%)
          Total (including joint ventures)    24,136      34,758       (31%)

    Completed and unsold homes:
      Consolidated (1)                           589         695       (15%)
      Joint ventures (1)                          26          45       (42%)
        Total continuing operations              615         740       (17%)
        Discontinued operations                    1          54       (98%)
          Total                                  616         794       (22%)

    Spec homes under construction:
      Consolidated (1)                           865       1,089       (21%)
      Joint ventures (1)                         154         368       (58%)
        Total continuing operations            1,019       1,457       (30%)
        Discontinued operations                    -          31      (100%)
          Total                                1,019       1,488       (32%)

    Total homes under construction
     (including specs):
      Consolidated (1)                         1,326       2,085       (36%)
      Joint ventures (1)                         183         440       (58%)
        Total continuing operations            1,509       2,525       (40%)
        Discontinued operations                    -          64      (100%)
          Total                                1,509       2,589       (42%)

    (1)  Arizona and Texas exclude the Tucson and San Antonio divisions, which
         are classified as discontinued operations.

Homebuilding Gross Margin Percentage

The Company's 2008 fourth quarter homebuilding gross margin percentage from continuing operations (including land sales) was down year-over-year to a negative 78.2% from a negative 17.0% in the prior year period. The 2008 fourth quarter gross margin reflected a $376.9 million pretax inventory impairment charge related to 97 projects, of which $350.3 million related to current and future projects and $26.6 million related to land or lots that are intended to be sold. These impairments related primarily to projects located in California, Nevada and Florida, and to a lesser degree, in Arizona, Colorado, the Carolinas and Texas. Excluding the housing inventory impairment charges from continuing operations, the Company's 2008 fourth quarter gross margin percentage from home sales would have been 21.9% versus 14.1% in 2007.** The 780 basis point increase in the year-over-year as adjusted gross margin percentage was driven primarily by the close out of certain projects in California and the resulting decrease in cost of sales and a $9.4 million reduction in the Company's warranty accrual due to a decrease in warranty expenditure trends. The impact of these adjustments on the Company's gross margin percentage was magnified by the 54% decrease in home sale revenues from the prior year period. Until market conditions stabilize, the Company may continue to incur additional inventory impairment charges.

Income Taxes

As a result of the continued downturn in the housing market and the uncertainty as to its magnitude and length, the Company recorded a noncash valuation allowance of $124.9 million, net of the reversal of a portion of the deferred tax asset valuation allowance discussed below, during the three months ended December 31, 2008 against the Company's net deferred tax assets in accordance with Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes," resulting in a total valuation allowance of $654.1 million at December 31, 2008. To the extent that the Company generates eligible taxable income in the future to utilize the tax benefits of the related deferred tax assets, it will be able to reduce its effective tax rate by reducing the valuation allowance.

As a result of the closing of the first phase of the MatlinPatterson transaction, the Company believes that an ownership change under Internal Revenue Code Section 382 ("Section 382") occurred during the 2008 second quarter. Accordingly, the Company may be limited to its use of certain tax attributes that relate to tax periods prior to the ownership change, however, after further review the Company believes it has generated sufficient net operating losses ("NOL's") that are not subject to the Section 382 limitation such that its 2008 NOL carryback will not be limited. As such, the Company recognized an income tax benefit during the three months ended December 31, 2008 by reversing $47.5 million of its previously recorded deferred tax valuation allowance.

Earnings Conference Call

A conference call to discuss the Company's 2008 fourth quarter will be held at 11:00 am Eastern Time Tuesday, February 17, 2009. The call will be broadcast live over the Internet and can be accessed through the Company's website at :0cd6:http://standardpacifichomes.com/ir:/0cd6:. The call will also be accessible via telephone by dialing (888) 713-3588 (domestic) or (913) 312-1239 (international); Passcode: 7018740. 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, and can be accessed by dialing (888) 203-1112 (domestic) or (719) 457-0820 (international); Passcode: 7018740.

About Standard Pacific

Standard Pacific, one of the nation's largest homebuilders, has built homes for more than 105,000 families during its 42-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 its subsidiaries Standard Pacific Mortgage, Inc., 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: our liquidity; interest expense; the expectation of further new home price declines; additional cost cutting initiatives; our expectation that 2009 will be an extremely challenging year; the Company's expected tax refund; the liquidity in our unrestricted subsidiaries to fund joint venture capital and other restricted payment needs; land and lots intended to be sold; the potential for exiting additional joint ventures; the potential for further inventory impairment charges; that all or a portion of our tax valuation allowance could be unwound; the potential impact of future earnings or losses on our deferred tax valuation allowance; the Company's expectation that its 2008 NOL carryback will not be limited; and orders and backlog. Forward-looking statements are based on our current expectations or beliefs regarding future events or circumstances, and you should not place undue reliance on these statements. Such statements involve known and unknown risks, uncertainties, assumptions and other factors many of which are out of the Company's control and difficult to forecast that may cause actual results to differ materially from those that may be described or implied. Such factors include but are not limited to: local and general economic and market conditions, including consumer confidence, employment rates, interest rates, the cost and availability of mortgage financing, and stock market, home and land valuations; the impact on economic conditions of terrorist attacks or the outbreak or escalation of armed conflict involving the United States; the cost and availability of suitable undeveloped land, building materials and labor; the cost and availability of construction financing and corporate debt and equity capital; our significant amount of debt and the impact of restrictive covenants in our credit agreements, public notes, and private term loans and our ability to comply with their covenants and repay such debt as it comes due; a negative change in our credit rating or outlook; the demand for and affordability of single-family homes; the supply of housing for sale; cancellations of purchase contracts by homebuyers; the cyclical and competitive nature of the Company's business; governmental regulation, including the impact of "slow growth" or similar initiatives; new law restricting down payment assistance programs; 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, including hedging activities; 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, 2007 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:

Andrew H. Parnes, Executive Vice President-Finance & CFO (949) 789-1616, aparnes@stanpac.com" target="_new">aparnes@stanpac.com or Lloyd H. McKibbin, Senior Vice President & Treasurer (949) 789-1603, lmckibbin@stanpac.com" target="_new">lmckibbin@stanpac.com.

* Excludes the Company's unconsolidated joint ventures and the Company's Tucson and San Antonio operations, which are included in discontinued operations.

** Please see "Reconciliation of Non-GAAP Financial Measures" below.

(Note: Tables follow)



                        STANDARD PACIFIC CORP AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                      (Unaudited)

                                             Three Months Ended December 31,
                                             2008        2007        % Change
                                              (Dollars in thousands, except
                                                     per share amounts)
    Homebuilding:
      Home sale revenues                    $376,032    $825,151         (54%)
      Land sale revenues                         367     108,457        (100%)
        Total revenues                       376,399     933,608         (60%)
      Cost of home sales                    (643,842)   (804,671)        (20%)
      Cost of land sales                     (27,082)   (287,797)        (91%)
        Total cost of sales                 (670,924) (1,092,468)        (39%)
          Gross margin                      (294,525)   (158,860)         85%
          Gross margin %                      (78.2%)     (17.0%)
      Selling, general and
       administrative expenses               (70,007)   (109,211)        (36%)
      Loss from unconsolidated
       joint ventures                        (21,407)    (70,976)        (70%)
      Interest expense                       (10,336)          -           -
      Other income (expense)                 (47,945)    (46,232)          4%
          Homebuilding pretax loss          (444,220)   (385,279)         15%
    Financial Services:
      Revenues                                 2,690       4,662         (42%)
      Expenses                                (2,596)     (4,122)        (37%)
      Income from unconsolidated
       joint ventures                            195         270         (28%)
      Other income                               106         110          (4%)
          Financial services
           pretax income                         395         920         (57%)
    Loss from continuing operations
     before income taxes                    (443,825)   (384,359)         15%
    (Provision) benefit for income taxes      47,525     (30,022)       (258%)
    Loss from continuing operations         (396,300)   (414,381)         (4%)
    Loss from discontinued operations,
     net of income taxes                        (281)     (6,966)        (96%)
    Loss from disposal of discontinued
     operations, net of income taxes               -     (19,550)       (100%)
    Net loss                                (396,581)   (440,897)        (10%)
      Less: Net loss allocated to
       preferred stockholders                 243,742          -           -
    Net loss available to common
     stockholders                          $(152,839)  $(440,897)        (65%)

    Basic loss per share:
      Continuing operations                  $ (1.65)    $ (5.73)        (71%)
      Discontinued operations                      -       (0.37)       (100%)
      Basic loss per share                   $ (1.65)    $ (6.10)        (73%)

    Diluted loss per share:
      Continuing operations                  $ (1.65)    $ (5.73)        (71%)
      Discontinued operations                      -       (0.37)       (100%)
      Diluted loss per share                 $ (1.65)    $ (6.10)        (73%)

    Weighted average common
     shares outstanding:
      Basic                               92,686,226  72,268,057          28%
      Diluted                            240,499,012  72,268,057         233%
    Cash dividends per share                      $-          $-           -


                                                Year Ended December 31,
                                             2008        2007       % Change
                                            (Dollars in thousands, except
                                                  per share amounts)
    Homebuilding:
      Home sale revenues                  $1,521,640  $2,607,824        (42%)
      Land sale revenues                      13,976     281,009        (95%)
        Total revenues                     1,535,616   2,888,833        (47%)
      Cost of home sales                  (2,104,224) (2,520,157)       (17%)
      Cost of land sales                    (124,786)   (568,539)       (78%)
        Total cost of sales               (2,229,010) (3,088,696)       (28%)
          Gross margin                      (693,394)   (199,863)       247%
          Gross margin %                      (45.2%)      (6.9%)
      Selling, general and
       administrative expenses              (305,480)   (387,981)       (21%)
      Loss from unconsolidated
       joint ventures                       (151,729)   (190,025)       (20%)
      Interest expense                       (14,274)          -          -
      Other income (expense)                 (69,429)    (68,610)         1%
          Homebuilding pretax loss        (1,234,306)   (846,479)        46%

    Financial Services:
      Revenues                                13,587      16,677        (19%)
      Expenses                               (13,659)    (16,045)       (15%)
      Income from unconsolidated
       joint ventures                            854       1,050        (19%)
      Other income                               234         611        (62%)
          Financial services
           pretax income                       1,016       2,293        (56%)
    Loss from continuing operations
     before income taxes                  (1,233,290)   (844,186)        46%
    (Provision) benefit for income taxes       5,495     149,003        (96%)
    Loss from continuing operations       (1,227,795)   (695,183)        77%
    Loss from discontinued operations,
     net of income taxes                      (2,286)    (52,540)       (96%)
    Loss from disposal of discontinued
     operations, net of income taxes               -     (19,550)      (100%)
    Net loss                              (1,230,081)   (767,273)        60%
      Less: Net loss allocated to
       preferred stockholders                487,827           -          -
    Net loss available to common
     stockholders                          $(742,254)  $(767,273)        (3%)

    Basic loss per share:
      Continuing operations                   $(9.10)     $(9.63)        (6%)
      Discontinued operations                  (0.01)      (1.00)       (99%)
      Basic loss per share                    $(9.11)    $(10.63)       (14%)

    Diluted loss per share:
      Continuing operations                   $(9.10)     $(9.63)        (6%)
      Discontinued operations                  (0.01)      (1.00)       (99%)
      Diluted loss per share                  $(9.11)    $(10.63)       (14%)

    Weighted average common
     shares outstanding:
      Basic                               81,439,248  72,157,394         13%
      Diluted                            134,963,077  72,157,394         87%

    Cash dividends per share                      $-       $0.12       (100%)

Source: PRNewsWire



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