Standard Pacific Corp. (NYSE: SPF), Irvine, Calif., late Wednesday became the latest big builder to report a profit for the fourth quarter ended Dec. 31 based solely on a tax benefit made possible by the net-operating-loss carryback extension passed by Congress late last year.
The company after market close Wednesday reported a net profit of $82.7 million ($0.31 per diluted share) for the quarter, due entirely to a $94.1 million tax benefit booked thanks to the NOL law, which allows builders for one year to write losses against profits going back five years instead of two.
For the full year, Standard Pacific generated a net loss of $13.8 million(-$0.06 per diluted share), compared to a net loss of $1.23 billion (-$9.14 per diluted share) for 2008.
Analysts were expecting a gain of two cents a share for the quarter and a loss of 32 cents per share for the full year. Despite beating the expectations, the company's stock was off 4.3% at $3.99 in after-market trading Wednesday on the news.
The quarter included impairment charges of $11.2 million versus $443.6 million in the prior year quarter and also included $5.1 million in debt refinancing and other restructuring charges. Excluding asset impairment and restructuring charges and the tax benefit, the Company generated net income of $4.0 million during the 2009 quarter.
The home building segment posted a $14.2 million pretax loss. Home building revenues for the quarter were $339.8 million, down 10% from $376.4 million for the fourth quarter of last year as home deliveries fell 18% to 943 (exclusive of joint ventures) and a 3% decline in consolidated average home price to $318,000. These decreases were offset in part by a $39.2 million increase in land sale revenues as compared to the 2008 fourth quarter. The2009 fourth quarter land sale revenues included $34.8 million attributable to the bulk sale of a finished podium project in Southern California, which resulted in a $2.9 million loss that was included in cost of land sales as an inventory impairment charge.
The company said the year-over-year decrease in the fourth quarter average home price was primarily due to general price declines offset in part by a slight mix shift to more California deliveries. The average price increased 5% sequentially, again due to a greater distribution of homes delivered within California during the fourth quarter at higher average home prices.
Net new orders (excluding joint ventures and discontinued operations) were up only 1% from the 2008 fourth quarter to 547, partly attribuatable to a 28% decrease in the number of average active selling communities to 124. The company's monthly sales absorption rate for the 2009 fourth quarter was 1.5 per community, up from the prior year fourth quarter rate of 1 per community, but down from 2.2 per community for the 2009 third quarter.
The cancellation rate for the quarter was 21%, down from 33% for the 2008 fourth quarter, but up from 15% for the 2009 third quarter. As a percentage of beginning backlog, the rate was 15%, down from 21% in the year earlier period and 17% in the 2009 third quarter.
The dollar value of the Company's backlog (excluding joint ventures) increased 7% to $207.9 million, or 599 homes, compared to the 2008 fourth quarter value, but was down 37% from the 2009 third quarter backlog value.
For the full year, home building revenues were down 24% to $1.16 billion, deliveries were down 25% to 3,465 and the average selling price was down 7% to $306,000.
For the fourth quarter, gross margin improved to 15.3% from a negative 78.6% in the prior year quarter. SG&A was down 29% to $49.3 million.
The company ended the year with $587.1 million in cash and $15 million in restricted cash for a total of $602.2 million. It is expecting a $103 federal tax refund during the first quarter of 2010. It listed $1.19 billion in term debt and no borrowings under its credit facility. Home building debt due before 2013 declined from $838 million to $239 million. The net adjusted debt-to-capital ratio was 56%, down from 67.8% at yearend 2008.
Unconsolidated joint venture recourse debt was reduced by $135.1 million during the year, bringing total joint venture recourse debt to $38.8 million as of Dec. 31.
The company did not report its land position at yearend.
"Notwithstanding the challenging economic and housing market conditions that exist, we look ahead to 2010 with the goals of returning to profitability and rebuilding our land portfolio," said Ken Campbell, president and CEO."With over $600 million of cash, an anticipated tax refund in excess of $100 million and our ability to generate cash flows from operations, we believe we are well positioned to support our growth prospects and to withstand a further decline if the market takes longer to recover."