Standard Pacific Corp. (NYSE:SPF) after market close Friday reported a net loss of $396.6 million ($-1.65 per diluted share) for the fourth quarter of 2008. The loss missed Wall Street consensus estimates of a loss of $0.77 per share and even blew past the low estimate of $1.61.
The loss included impairments and write-downs totaling $443.6 million, including a $35.5 million charge to goodwill, wiping it off the balance sheet. The company also took at $124.9 million non-cash charge to deferred tax assets. The loss for the 2008 year was $1.23 billion.
Standard Pacific reported it is out of compliance with the minimum cash flow coverage ratio set by its loan covenants and thus will set aside $120 million of its available cash in an interest reserve account. It listed $626 million in cash on its balance sheet as of Dec. 31, and it is expecting a tax carry-back refund of $114 million during the first quarter of this year.
During the quarter, home building revenues fell 60% to $376.4 million as closings fell 47% to 1,146 and average prices fell 15% to $328,000. New orders were down 46% to 539. The cancellation rate was 33%, better than the 37% posted during last year's fourth quarter but a jump from 26% for the previous quarter.
Quarter-end backlog was down 50% to 642 homes valued at $193.4 million, a 56% drop compared to a year ago.
The company's owned or controlled lot count was 24,000 lots (including discontinued operations) at quarter's end, a 31% reduction from the year ago level and a 68% decrease from peak at the end of 2005.
Standard Pacific unwound two Southern California joint ventures during the quarter resulting in the assumption of approximately $67.6 million of joint venture debt. It also made an $8.7 million loan remargin payment related to one of these Southern California joint ventures prior to the unwind.
The company said its unconsolidated joint ventures reduced their borrowings by approximately $90 million during the quarter and by $349 million during all of 2008 and, as of year end, unconsolidated joint ventures had borrowings outstanding of approximately $422 million, including $248 million in non-recourse debt (two joint ventures) and $174 million subject to loan-to-value maintenance agreements (seven joint ventures) for which the company has sole or joint liability.
"The well publicized economic and housing downturn has had a profound impact on the Company's operating results," said CEO Ken Campbell in a statement."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."
He added, ""On a positive note, 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."
Total debt to capitalization rose to 80.6% for the full year, up from 66.2% at yearend 2007; net debt-to-cap was 70.1%, up from 61.1%. Total consolidated debt fell to $1.58 billion from $1.95 billion at the end of 2007.
Included in the earnings report was the disclosure that the company had incurred $3 million in expenses related to its talks with TOUSA, Inc. over possible asset acquisitions. The company has not commented on those talks since it confirmed that talks were being held in December.