Standard Pacific Corp., Irvine, Calif. (NYSE:SPF) after market close Thursday reported a net loss for the second quarter ended June 30 of $10.5 million (-$0.03 per share). The loss included $6 million in impairments and a $2.2 million charge related to management changes and compared with a profit of $10.7 million, or four cents a share, in last year's quarter.
Analysts were expecting breakeven without charges. Shares moved down a bit more than 1% in after-market trading on the news.
Home building revenues slid 36% to $204.3 million as closings dropped 32% to 610 and the average selling price dipped 5.6% to $335,000.
New orders rose 6.2% from last year's quarter to 764, 17% ahead of this year's first quarter. The cancellation rate was 14%, down from 15% last June and flat with this year's first quarter. The monthly sales absorption rate slid to 1.7 from 1.9 in the 2010 quarter but rose from 1.6 in first quarter, 2011.
Average active selling communities jumped 20% over last year's quarter to 153, 11% ahead of this year's first quarter.
Backlog at quarter's end was up 20% from a year earlier to 781 homes, up 25% from first quarter, 2011. Backlog value rose to $293.8 million from $237.7 million at the same time last year and from $211.8 million at the end of the first quarter of this year.
Gross margin fell to 17% from 20.9% in last year's quarter and 20.5% in first quarter, 2011; minus impairments, it was 20%. SG&A or $38.4 million was 18.8% of sales, including charges, up from 13.7% in last year's quarter but down from 22.5% in this year's first quarter.
The land position at the end of the quarter was 26,403 lots, 19,121 owned,5,848 optioned and 1,234 through joint ventures. The company reported that7,294 of the owned lots are finished. The total lot count was up from 21,853 (16,944, 3,943 and 975, respectively) at the same time last year.
The company ended the quarter with a cash balance of $507.2 million and $196 million available on its revolver, down from $710.4 million at the close of last year's quarter, when there was no revolving credit facility. During the quarter, Standard Pacific approved land purchases of $98.5 million for 1,493 lots, down from $121.5 million in the first quarter of 2011.
"We are excited about our new communities coming out of the ground," said Ken Campbell, Standard Pacific CEO. "It was a bit painful last year when we slowed our growth in order to re-design our homes, but we are now pleased with the results. Managing to open this many communities without increasing our overhead is a tribute to our team; kind of remarkable accomplishment in my opinion. With over 20 new communities scheduled to open before year-end, we have more excitement (and more hard work) to look forward to."
He added, "The slowdown in land buying should not be viewed as a change in strategy. We are still pursuing a significant land pipeline, but will continue to maintain our pricing discipline in the face of a pretty poor sales environment. Hopefully, land sellers will get more reasonable on pricing, or other land buyers enthusiasm will wane as we muddle through this difficult market. The current slowdown does not concern us too much since we have already committed to purchase enough land to support growth through 2012."