Standard Pacific Corp. (NYSE:SPF), Irvine, Calif., on Thursday after market close reported a net loss for the first quarter of 2009 of $49.5 million, (-$0.21) per diluted share, compared to a net loss of $216.9 million (-$3.00 per diluted share), for the year earlier period. The loss included asset impairment charges of $30.8 million, comprised of $28.7 million related to real estate inventories and $2.1 million related to lot option deposits compared to $192.3 million for last year's first quarter. The 2009 results also included $14.1 million in restructuring charges related to division consolidation and headcount reductions and a $19.2 million charge related to the Company's deferred tax asset valuation allowance.
The loss beat the Wall Street consensus estimate of a loss of $0.30 per share, and, minus the impairments and charges, would have been only $2.8 million, or $0.01 per share.
Home building revenues declined 40% to $209.5 million as closings fell 32% to 687 and the average selling price fell 10% to $300,000. Closings at unconsolidated joint ventures fell even more, by 81% to 19.
Net new orders were down 41% to 734. The cancellation rate held steady with last year's first quarter at 24%. Average active selling communities were down 23% to 158. The monthly sales absorption rate per community fell 25% to1.5 from last year's first quarter but was up from 1 in the fourth quarter of 2008.
Backlog was down 54% to 689, with dollar value of homes in backlog down 58% to $212.8 million.
Standard Pacific generated $129.0 million in cash flow, driven largely by a$114.5 million federal income tax refund and a $41.1 million decrease in inventories related to a reduction in the number of homes under construction and a decrease in land purchases. The company ended the quarter with $668.3 million in cash (including restricted cash), a $41.9 million increase from December 2008.
Its owned lot count was down 15% to 18,265; optioned lots were down 51% to 2,281. Joint venture lots were down 61% to 2,227. Spec homes under construction were down 35% to 628, and unsold spec homes were down 7% to 500.
The company retired $26.9 million of its 5 1/8% 2009 senior notes during the quarter and paid of the remaining 124.6 million on April 1. It repaid $35 million of its bank credit facilities and paid $7.3 million to exit a joint venture in Chicago. Exiting that JV resulted in the elimination of $19.8 million of joint venture recourse debt. As of March 31, 2009, the company's unconsolidated JVs had $406.4 million in outstanding borrowings, $157.5 million of which were recourse to Standard Pacific. As of the same date, the company had remaining land takedown obligations of approximately $21.2 million related to a single unconsolidated joint venture. As of March 31, it had $1.28 billion in long-term debt, $96 million in secured project debt and other notes payable and $27.8 million out on its revolver.
Standard Pacific reduced its total headcount by 30%, or 380 employees, from December 31, 2008 through the end of April 2009. It has reduced headcount by more than 50% since yearend 2007. It also has reduced the number of divisions from 20 to 9 during that same period. This pushed up SG&A up 2.2% to $52.4 million. Gross margin improved by 37.7% to 3.9% from a negative 33.8% in the same quarter of 2008.
Since December 31, 2007 the Company has reduced its workforce by over 50%, or nearly 1,000 employees. From December 31, 2007 through the end of April 2009, the Company has also reduced its division count from 20 to nine, down from 24 at its peak. This helped push up SG&A up 2.2% to 25% of revenues. Gross margin improved by 37.7% to 3.9% from a negative 33.8% in the same quarter of 2008.
"While we continue to endure the effects of the same lousy housing market that all of the other homebuilders are trying to operate in, we made significant progress in reducing our cost structure to better align our business with the decline in demand for new homes," said Ken Campbell, president and CEO in a statement. "Although we saw improvement in new home orders as compared to the anemic levels experienced during the 2008 fourth quarter, we remain intently focused on preserving cash by controlling our expenses, carefully managing new home starts and reducing speculative inventory levels."
Standard Pacific shares, which closed down 1.3% at $2.23, were up more than 4% in after hours trading at $2.32.