Standard Pacific Corp. announced its quarterly financial results today, but the major concerns during this morning's conference call centered on the builder's pending waiver from its bank group for failing to meet debt-to-equity and tangible net worth requirements.

This actually represents an extension of a waiver obtained in March by the company. As of March 31, Standard Pacific stood at a debt-to-equity ratio of 2.03 compared to its lenders' maximum ratio of 1.75. The company also did not meet its $1 million-plus minimum tangible net worth requirement, hitting a value of $758.2 million.

Standard Pacific wants to extend this March waiver until mid-August and expand its scope. The banks have tentatively agreed, although the agreement probably won't be finalized until May 14. In exchange for the extension, Standard Pacific has agreed to reduce its revolver by $200 million to $500 million; not use the revolver unless the company has fewer than $300 million in cash available; and also provide collateral for any new money that it borrows under this revolving credit line.

Currently, the builder has $328.8 million in cash on hand. Should Standard Pacific need to draw upon its soon-to-be-revised revolver, it could borrow against its model homes (valued at $160 million) and its completed homes and finished lots.

Standard Pacific's access to credit is also affecting its financial services subsidiary, which is in search of a new mortgage credit facility after the builder lost its two mortgage credit lines earlier this year.

In terms of quarterly results, the builder generated $229 million in operating cash flow. It also delivered 1,036 homes (excluding joint ventures and discontinued operations), which translated into a 38 percent year-over-year closings drop. Home building revenue slid 47 percent, to $348 million. Standard Pacific also wrote off $192.3 million worth of joint ventures and neighborhood impairments.

Standard Pacific saw a few bright spots in the quarter. Cancellation rates returned to a more reasonable 24 percent. Sales also increased in Florida by 6 percent, to 267 net new orders. It also reduced its joint venture debt by $127 million, to $644 million overall.

Alison Rice is senior editor, online, for BUILDER magazine.