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

July 27, 2012 | About:

10qk

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Standard Pacific Corp. (SPF) filed Quarterly Report for the period ended 2012-06-30.

Standard Pacific Corp. has a market cap of $1.25 billion; its shares were traded at around $6.035 with a P/E ratio of 125.6 and P/S ratio of 1.4.

Highlight of Business Operations:

Our 2012 second quarter reflected a continuation of the positive momentum we experienced during the first quarter, with new home deliveries up 34%, revenues up 35%, net new orders up 45%, and homes in backlog up 62% as compared to the year earlier period. Net income for the quarter was $14.3 million, or $0.04 per diluted share, compared to a net loss of $10.5 million, or $0.03 per diluted share, in the second quarter of 2011. The $24.8 million year over year improvement in net income is attributable to several factors, including the continued execution of our strategy of constructing well built, innovatively designed, and energy efficient homes targeted at the discriminating “move-up” homebuyer; our focus on increasing base prices, reducing sales incentives and controlling costs; and the operating leverage inherent in our business. With over $292 million of unrestricted homebuilding cash and the additional amounts that remain available under our revolving credit facility, we believe we have ample liquidity to continue the progress we have made against our strategy.

Our 2012 second quarter reflected a continuation of the positive momentum we experienced during the first quarter, with new home deliveries up 34%, revenues up 35%, net new orders up 45%, and homes in backlog up 62% as compared to the year earlier period. Net income for the quarter was $14.3 million, or $0.04 per diluted share, compared to a net loss of $10.5 million, or $0.03 per diluted share, in the second quarter of 2011. The $24.8 million year over year improvement in net income is attributable to several factors, including the continued execution of our strategy of constructing well built, innovatively designed, and energy efficient homes targeted at the discriminating “move-up” homebuyer; our focus on increasing base prices, reducing sales incentives and controlling costs; and the operating leverage inherent in our business. With over $292 million of unrestricted homebuilding cash and the additional amounts that remain available under our revolving credit facility, we believe we have ample liquidity to continue the progress we have made against our strategy.

-29- Table of Contents For the six months ended June 30, 2012, we reported homebuilding pretax income of $19.2 million compared to a pretax loss of $23.8 million in the year earlier period. The improvement in our financial performance was primarily the result of a 42% increase in home sale revenues, a $13.8 million decrease in interest expense and a $6.0 million decrease in inventory impairment charges. Revenues Home sale revenues increased 35%, from $204.2 million for the 2011 second quarter to $274.9 million for the 2012 second quarter, as a result of a 34% increase in new home deliveries and a 1% increase in our consolidated average home price to $337 thousand. Home sale revenues increased 42%, from $347.9 million for the six months ended June 30, 2011 to $495.2 million for the six months ended June 30, 2012, as a result of a 39% increase in new home deliveries and a 2% increase in our consolidated average home price to $340 thousand.

Home sale revenues increased 35%, from $204.2 million for the 2011 second quarter to $274.9 million for the 2012 second quarter, as a result of a 34% increase in new home deliveries and a 1% increase in our consolidated average home price to $337 thousand. Home sale revenues increased 42%, from $347.9 million for the six months ended June 30, 2011 to $495.2 million for the six months ended June 30, 2012, as a result of a 39% increase in new home deliveries and a 2% increase in our consolidated average home price to $340 thousand.

We continue to closely monitor new home starts based on sales volume and the number of completed and unsold homes. As of June 30, 2012, the number of completed unsold homes (excluding joint ventures) decreased 28% from the year earlier period. Total homes under construction (excluding joint ventures) as of June 30, 2012 increased 32% compared to the year earlier period as a result of a 45% increase in the number of homes sold in the second quarter of 2012 compared to 2011. Financial Services In the 2012 second quarter our financial services subsidiary reported pretax income of approximately $2.5 million compared to $0.1 million in the year earlier period. The improvement was driven primarily by a 49% increase in the dollar volume of loans closed and sold, an increase in margins, and a $1.1 million decrease in loan loss reserve expense related to indemnification and repurchase reserves, from $1.4 million for the 2011 second quarter to $0.3 million for the 2012 second quarter. -34- Table of Contents The following table details information regarding loan originations and related credit statistics for our mortgage financing operations:

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