Standard Pacific Corp. (NYSE:SPF) after market close Wednesday reported a net loss of $23.1 million ($0.10 per diluted share), beating the consensus analyst estimate of a loss of $0.15 per share and sending the company stock soaring in after-hours trading.
Shares of SPF, which had risen 38% during the past 10 days, shot up more than 12% to $3.01 in after hours trading shortly after the earnings were released.
The loss, which compares with a loss of $249.0 million ($3.44 per dilutedshare) for the year-earlier period, included asset impairment charges of$21.3 million, of which $13.1 million related to real estate inventories and$8.2 million related to a joint venture. The results also included $5.5 million in restructuring charges and an $8.9 million charge related to the company's deferred tax asset valuation allowance. Excluding asset impairment and restructuring charges, the company generated a profit of approximately$2.2 million.
Home building revenues fell 29% to $289.7 million on a drop of 24% in new home deliveries to 942 homes and an 8% decline in average home price to $302,000. Net new orders were down 6% from the 2008 second quarter to 1,169 new homes on a 29% decrease in the number of average active selling communities. The cancellation rate was 16%, down from 24% for the 2009 first quarter and 25% for the 2008 second quarter. The sales absorption rate 2.7 per month per community, up from the prior year second quarter rate of 2.0 per month per community and up from 1.5 per month per community for the 2009 first quarter.
The dollar value of the Company's backlog (excluding joint ventures) increased 45% from the 2009 first quarter to $308.5 million, or 982 homes, down 35% from the same time last year.
SG&A decreased $33.1 million, or 42%, from last year's quarter resulting in an SG&A rate of 15.9% versus 19.3% in the comparable period.Excluding restructuring charges, the SG&A rate was 14.3%.
The company reduced its home building debt during the quarter by $136.0 million (after assuming $25.2 million of secured project debt in connection with a joint venture unwind) and ended the quarter with $573.0 million of homebuilding cash (including $4.2 million of restricted cash). The debt reduction was driven primarily by the repayment of the remaining $124.6 million balance of the company's 5 1/8% senior notes and the repayment of $10.0 million of credit facility indebtedness. Its home building restricted cash balance decreased by $120.8 million during the quarter as a result of the Company meeting its bank credit facility cash flow coverage requirement.
Regarding joint ventures, Standard Pacific unwound the Southern California joint venture for a $1.1 million cash payment and the assumption of the $25.2 million of secured project debt. It also made a $9.1 million loan remargin payment related to another Southern California joint venture. As of June 30, 2009, the Company's unconsolidated joint ventures had $361.1 million in outstanding borrowings, $112.1 million of which were recourse to the Standard Pacific, and remaining land takedown obligations of approximately $21.1 million related to a single unconsolidated joint venture. In addition, the company recorded an $8.2 million impairment charge during the quarter related to its remaining investment in its North Las Vegas joint venture
"We are pleased with the progress we have made to date, particularly with respect to reducing our SG&A, both in absolute dollars and as a percent of revenues. Our SG&A reductions demonstrate our ability to vary our costs in line with our sales volumes, a capability that may get tested further if the recession continues for an extended period of time," said Ken Campbell, president and CEO. "We are also pleased with the $69 million of cash flows generated from operations during the quarter that resulted largely from the reduction of our completed spec inventory levels and improved order and delivery activity. These were improvements we told investors we were going to make, so I guess it's not a big surprise, but all of us here at Standard Pacific feel good about our progress to date."
He added, "While we still obviously have not achieved the level of profitability that we ultimately need, we are a lot closer than we were a couple of quarters ago and believe that we are in pretty good shape in the short run because of our higher backlog level. However, if we need to adjust further, we will."