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Standard Pacific Corp. Reports Operating Results (10-K)

February 28, 2012 | About:
10qk

10qk

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Standard Pacific Corp. (SPF) filed Annual Report for the period ended 2011-12-31.

Standard Pac has a market cap of $841.5 million; its shares were traded at around $4.24 with and P/S ratio of 1.

Highlight of Business Operations:

Overview We made significant progress on our growth strategy during 2011. We increased our average active community count by 17% compared to 2010, to 152 average active communities, and spent $437 million in land and land development, compared to $336 million in 2010. Approximately 63% of the land we purchased (based on land values) over the last two years is located in California, which is consistent with our emphasis on investing in land-constrained markets. Our operations continue to be hampered by challenging housing market conditions. These conditions include weak housing demand in substantially all of our markets, resulting from a housing supply/demand imbalance, low consumer confidence, high unemployment and price uncertainty. However, despite these factors new orders and backlog increased during 2011 compared to the prior year, resulting in our highest year-end backlog since 2007. Additionally, with $438 million of cash on hand and the additional amounts that remain available under our $210 million revolving credit facility, we believe we have ample liquidity to navigate the market downturn. For the year ended December 31, 2011, we reported a net loss of $16.4 million, or $0.05 per diluted share, compared to a net loss of $11.7 million, or $0.05 per diluted share, in 2010. The net loss incurred during fiscal 2011 included $15.3 million of asset impairment charges and deposit write-offs, $2.1 million of restructuring charges and $2.1 million of management change charges. The net loss incurred during fiscal 2010 included a $30.0 million charge related to the early extinguishment of debt and $2.4 million of asset impairment charges and deposit write-offs. Our results for the year ended December 31, 2009 included a $96.6 million tax benefit primarily related to the carryback of net operating losses, $71.1 million of asset impairment charges and deposit write-offs, $22.6 million of restructuring charges and a $6.9 million charge related to the early extinguishment of debt. We ended 2011 with $438.2 million of homebuilding cash (including $31.4 million of restricted cash). Net cash used in operating activities during 2011 was $322.6 million compared to $81.0 million in 2010. The increase in cash used in operating activities for the year ended December 31, 2011 as compared to the prior year period was driven primarily by a $48.7 million increase in cash land purchases, a $52.6 million increase in land development costs, a $108 million decrease attributable to the federal tax refund that was received in the 2010 first quarter and a $29.4 million decrease in homebuilding revenues. The decrease in homebuilding revenues was primarily attributable to a 4% decline in new home deliveries and a $3.0 million decrease in land sale revenues. 19 Table of Contents

We ended 2011 with $438.2 million of homebuilding cash (including $31.4 million of restricted cash). Net cash used in operating activities during 2011 was $322.6 million compared to $81.0 million in 2010. The increase in cash used in operating activities for the year ended December 31, 2011 as compared to the prior year period was driven primarily by a $48.7 million increase in cash land purchases, a $52.6 million increase in land development costs, a $108 million decrease attributable to the federal tax refund that was received in the 2010 first quarter and a $29.4 million decrease in homebuilding revenues. The decrease in homebuilding revenues was primarily attributable to a 4% decline in new home deliveries and a $3.0 million decrease in land sale revenues.

For 2011, we reported a homebuilding pretax loss of $18.2 million compared to a pretax loss of $14.0 million in 2010. The decrease in our financial performance was primarily the result of a 4% decrease in new home deliveries, a $12.9 million increase in asset impairment charges and deposit write-offs, a decrease in our gross margin percentage from home sales excluding impairments and a $3.8 million increase in our SG&A expenses (which included approximately $2.1 million in restructuring charges and $2.1 million of management change charges in 2011 compared to none in 2010). These unfavorable changes were partially offset by a $15.0 million decrease in interest expense and a $30.0 million decrease in loss on early extinguishment of debt. Our homebuilding operations for the year ended December 31, 2011 included $15.3 million of asset impairment charges and deposit write-offs, which are detailed in the table above.

Our 2011 SG&A expenses (including corporate G&A) were $154.4 million compared to $150.5 million for the prior year. Our SG&A expenses for 2011 included $2.1 million in restructuring charges and $2.1 million of severance and other charges incurred in connection with the change in our Chief Financial Officer position during the 2011 second quarter, whereas 2010 did not include any restructuring or management change charges. Our 2011 SG&A rate from home sales was 17.5% versus a SG&A rate from home sales of 16.6% for 2010. The 90 basis point increase in our adjusted SG&A rate was primarily the result of the restructuring and management change charges in 2011 and a 3% decrease in home sale revenues.

For the year ended December 31, 2011, we used $322.6 million of cash in operating activities versus $81.0 million in the year earlier period. The increase in cash used in operating activities for 2011 as compared to the prior year was driven primarily by a $48.7 million increase in cash land purchases, a $52.6 million increase in land development costs, a $108 million decrease attributable to the federal tax refund that was received in the 2010 first quarter and a $29.4 million decrease in homebuilding revenues. The decrease in homebuilding revenues was primarily attributable to a 4% decline in new home deliveries and a $3.0 million decrease in land sale revenues. As of December 31, 2011, our homebuilding cash balance was $438.2 million (including $31.4 million in restricted cash).

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