-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GGqrtlguoIw4s92Cc+97cP3tahX6yY2Om92x1v1qLh1zwuH1/h6ytmdSI44E2m9J PvQ8Ao09Lf552O/rU4lnZg== 0001017062-96-000474.txt : 19961113 0001017062-96-000474.hdr.sgml : 19961113 ACCESSION NUMBER: 0001017062-96-000474 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961112 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: STANDARD PACIFIC CORP /DE/ CENTRAL INDEX KEY: 0000878560 STANDARD INDUSTRIAL CLASSIFICATION: OPERATIVE BUILDERS [1531] IRS NUMBER: 330475989 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10959 FILM NUMBER: 96659008 BUSINESS ADDRESS: STREET 1: 1565 W MACARTHUR BLVD CITY: COSTA MESA STATE: CA ZIP: 92626 BUSINESS PHONE: 7146684300 MAIL ADDRESS: STREET 1: 1565 W MACARTHUR BLVD CITY: COSTA MESA STATE: CA ZIP: 92626 10-Q 1 FORM 10-Q DATED 9/30/96 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1996 OR [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from N/A to ---------------- ----------------- Commission file number 1-10959 STANDARD PACIFIC CORP. (Exact name of registrant as specified in its charter) Delaware 33-0475989 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1565 W. MacArthur Blvd., Costa Mesa, CA 92626 (Address of principal executive offices) (Zip Code) (Registrant's telephone number, including area code) (714) 668-4300 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No . ---- ---- APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes No . ---- ---- APPLICABLE ONLY TO CORPORATE ISSUERS Registrant's shares of common stock outstanding at October 31, 1996: 30,060,281. 1 STANDARD PACIFIC CORP. AND SUBSIDIARIES FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1996 The consolidated condensed financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information normally included in the financial statements prepared in accordance with generally accepted accounting principles has been omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. The financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 1995. 2 STANDARD PACIFIC CORP. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)
1996 1995 -------- ------- HOMEBUILDING AND CORPORATE: Revenues $105,417 $99,372 Cost of sales 97,205 95,224 -------- ------- Gross margin 8,212 4,148 -------- ------- General and administrative expense 3,294 3,367 Income from unconsolidated joint venture 871 1,828 Interest expense 1,841 298 Other income 210 155 -------- ------- Homebuilding and corporate pretax income 4,158 2,466 -------- ------- MANUFACTURING: Revenues 4,411 3,834 Cost of sales 2,745 2,497 -------- ------- Gross margin 1,666 1,337 -------- ------- Selling, general and administrative expense 1,261 1,444 Other income 3 30 -------- ------- Manufacturing pretax income (loss) 408 (77) -------- ------- SAVINGS AND LOAN: Interest income 4,915 6,378 Interest expense 4,170 6,111 -------- ------- Net interest margin 745 267 -------- ------- Provision for loan losses - 793 General and administrative expense 799 725 SAIF recapitalization charge 1,291 - Other income (expense) 121 (2,005) -------- ------- Savings and loan pretax income (loss) (1,224) (3,256) -------- ------- CONSOLIDATED INCOME (LOSS) BEFORE TAXES 3,342 (867) (PROVISION) CREDIT FOR INCOME TAXES (1,317) 391 -------- ------- NET INCOME (LOSS) $ 2,025 $ (476) ======== ======= NET INCOME (LOSS) PER SHARE $ .07 $ (.02) ======== =======
The accompanying notes are an integral part of these consolidated statements 3 STANDARD PACIFIC CORP. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)
1996 1995 -------- -------- HOMEBUILDING AND CORPORATE: Revenues $268,729 $245,457 Cost of sales 251,030 232,940 -------- -------- Gross margin 17,699 12,517 -------- -------- General and administrative expense 9,517 9,866 Income from unconsolidated joint venture 3,900 4,640 Interest expense 5,046 298 Other income 738 381 -------- -------- Homebuilding and corporate pretax income 7,774 7,374 -------- -------- MANUFACTURING: Revenues 13,837 11,558 Cost of sales 8,698 7,432 -------- -------- Gross margin 5,139 4,126 -------- -------- Selling, general and administrative expense 3,776 4,276 Other income 64 141 -------- -------- Manufacturing pretax income (loss) 1,427 (9) -------- -------- SAVINGS AND LOAN: Interest income 15,295 19,756 Interest expense 13,375 18,554 -------- -------- Net interest margin 1,920 1,202 -------- -------- Provision for loan losses 465 1,057 General and administrative expense 1,642 2,237 SAIF recapitalization charge 1,291 - Other income (expense) 281 (2,198) -------- -------- Savings and loan pretax income (loss) (1,197) (4,290) -------- -------- CONSOLIDATED INCOME BEFORE TAXES 8,004 3,075 PROVISION FOR INCOME TAXES (3,195) (1,238) -------- -------- NET INCOME $ 4,809 $ 1,837 ======== ======== NET INCOME PER SHARE $ .16 $ .06 ======== ========
The accompanying notes are an integral part of these consolidated statements 4 STANDARD PACIFIC CORP. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (DOLLARS IN THOUSANDS) (UNAUDITED) ASSETS
SEPTEMBER 30, DECEMBER 31, 1996 1995 ------------- ------------- HOMEBUILDING, CORPORATE AND MANUFACTURING: Cash and equivalents $ 1,483 $ 895 Investment securities held to maturity 6,089 5,410 Mortgage notes receivable and accrued interest 3,848 3,203 Other notes and accounts receivable, net 9,227 8,821 Inventories: Real estate in process of development and completed model homes 381,774 354,290 Real estate held for sale 13,842 13,386 Manufacturing 1,533 1,332 Property and equipment, at cost, net of accumulated depreciation of $6,311 in 1996 and $5,875 in 1995 6,021 6,263 Investments in and advances to unconsolidated joint ventures 3,800 4,460 Deferred income taxes 16,605 17,605 Deferred charges and other assets 6,047 6,859 ------------- ------------- Total assets - homebuilding, corporate and manufacturing 450,269 422,524 ------------- ------------- SAVINGS AND LOAN: Cash and equivalents 10,557 36,702 Investment securities available for sale 43,260 28,635 Mortgage notes receivable and accrued interest, net 214,432 269,128 Property and equipment, at cost, net 205 266 Real estate acquired in settlement of loans, net 2,498 2,704 Deferred income taxes 4,282 3,825 Investment in FHLB stock 7,834 7,500 Other assets 1,865 1,894 ------------- ------------- Total assets - savings and loan 284,933 350,654 ------------- ------------- TOTAL ASSETS $735,202 $773,178 ============= =============
The accompanying notes are an integral part of these consolidated balance sheets 5 STANDARD PACIFIC CORP. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (DOLLARS IN THOUSANDS) (UNAUDITED) LIABILITIES AND STOCKHOLDERS' EQUITY
SEPTEMBER 30, DECEMBER 31, 1996 1995 ------------- ------------ HOMEBUILDING, CORPORATE AND MANUFACTURING Unsecured notes payable $ 71,850 $ 48,500 Trust deed notes payable 18,358 14,854 Accounts payable and accrued expenses 23,625 24,547 10-1/2 percent senior notes due 2000 100,000 100,000 -------- -------- Total liabilities - homebuilding, corporate and manufacturing 213,833 187,901 -------- -------- SAVINGS AND LOAN: Savings accounts 135,509 157,542 FHLB advances 104,000 150,000 Securities sold subject to agreements to repurchase 18,099 15,016 Accounts payable and accrued expenses 3,757 4,873 -------- -------- Total liabilities - savings and loan 261,365 327,431 -------- -------- STOCKHOLDERS' EQUITY: Preferred stock, $.01 par value; 10,000,000 shares authorized; none issued - - Common stock, $.01 par value; 100,000,000 shares authorized; 30,060,281 and 30,060,281 shares outstanding in 1996 and 1995, respectively 301 301 Paid-in capital 285,655 285,655 Investment securities valuation adjustment (25) (80) Retained deficit (25,927) (28,030) -------- -------- Total stockholders' equity 260,004 257,846 -------- -------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $735,202 $773,178 ======== ========
The accompanying notes are an integral part of these consolidated balance sheets 6 STANDARD PACIFIC CORP. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 (DOLLARS IN THOUSANDS) (UNAUDITED)
1996 1995 --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 4,809 $ 1,837 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 531 424 Amortization of deferred income and discounts 62 351 Net (gain) loss on sale of investments, loans and REO (560) 194 Provision for loan losses 465 1,057 Changes in cash and equivalents due to: Inventories (19,238) 34,713 Receivables and accrued interest 207 4,869 Investments in and advances to joint ventures 660 (6,249) Accounts payable and accrued expenses (2,038) (2,156) Deferred income taxes 543 448 Other, net 240 332 -------- -------- Net cash provided by (used in) operating activities $(14,319) $ 35,820 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from the sale of investments and principal repayments $ 15,164 $ 20,824 Net sales of real estate owned 4,134 2,453 Net (additions to) retirements from property and equipment (229) (102) Purchases of investment securities (30,410) (4,923) New loan fundings and loan purchases (1,560) (17,753) Loan sales and principal repayments from loans 52,415 40,298 -------- -------- Net cash provided by (used in) investing activities $ 39,514 $ 40,797 -------- --------
The accompanying notes are an integral part of these consolidated statements 7 STANDARD PACIFIC CORP. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 (DOLLARS IN THOUSANDS) (UNAUDITED)
1996 1995 --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Net proceeds from (payments on) bank lines of credit and term loans $ 23,350 $ (19,000) Proceeds from deposits to savings accounts 199,523 247,708 Payments on savings account withdrawals (225,093) (266,330) Interest credited to savings accounts 3,537 3,173 Principal payments on FHLB advances (59,000) (107,300) Proceeds from FHLB advances 13,000 97,000 Principal payments on bonds, notes and trust deed notes payable (6,447) (9,540) Dividends paid (2,705) (2,756) Net change in securities sold subject to agreements to repurchase 3,083 (18,841) Repurchase of common shares - (1,248) Proceeds from the exercise of stock options - 64 --------- --------- Net cash provided by (used in) financing activities $ (50,752) $ (77,070) --------- --------- Net increase (decrease) in cash and equivalents $ (25,557) $ (453) Cash and equivalents at beginning of period 37,597 16,504 --------- --------- Cash and equivalents at end of period $ 12,040 $ 16,051 ========= ========= SUMMARY OF CASH BALANCES: Homebuilding and manufacturing $ 1,483 $ 3,901 Savings and loan 10,557 12,150 --------- --------- $ 12,040 $ 16,051 ========= ========= SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Noncash transactions Land acquisitions financed by purchase money trust deeds $ 8,904 $ - Cash paid during the period for: Interest, all entities 26,350 32,911 Income taxes 1,478 532
The accompanying notes are an integral part of these consolidated statements 8 STANDARD PACIFIC CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS SEPTEMBER 30, 1996 (Dollar amounts presented in tables are in thousands) 1. Basis of presentation --------------------- In the opinion of management, the financial statements reflect all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position as of September 30, 1996 and December 31, 1995, and the results of operations and cash flows for the periods shown. 2. Capitalization of interest -------------------------- The following is a summary of interest capitalized and expensed related to real estate inventories for the nine-month and three-month periods ended September 30, 1996 and 1995:
NINE MONTHS ENDED SEPTEMBER 30, THREE MONTHS ENDED SEPTEMBER 30, ------------------------------- -------------------------------- 1996 1995 1996 1995 ------------- ------------- ---------- ------------- Total interest incurred during the period $12,975 $13,890 $ 4,071 $ 4,220 Less-interest capitalized as a cost of real estate inventories 7,929 13,592 2,229 3,922 ------- ------- ------- ------- Net interest expensed $ 5,046 $ 298 $ 1,842 $ 298 ======= ======= ======= ======= Interest previously capitalized as a cost of real estate inventories, included in cost of sales $12,895 $20,648 $ 5,014 $ 6,250 ======= ======= ======= =======
3. Reclassifications ----------------- Certain reclassifications to 1995 financial information have been made to conform to current period presentation. 9 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS DISCUSSION OF OPERATIONS BY SEGMENT - ----------------------------------- RESIDENTIAL HOUSING AND CORPORATE SEGMENT A comparative summary of operating results for residential housing and corporate operations for the nine-month and three-month periods ended September 30, 1996 and 1995 is as follows (dollar amounts in thousands):
NINE MONTHS ENDED SEPTEMBER 30, THREE MONTHS ENDED SEPTEMBER 30, ------------------------------- -------------------------------- 1996 1995 1996 1995 -------------- -------------- -------------- -------------- Revenues $268,729 $245,457 $105,417 $99,372 Cost of sales 251,030 232,940 97,205 95,224 -------- -------- -------- ------- Gross margin 17,699 12,517 8,212 4,148 -------- -------- -------- ------- Gross margin percentage 6.6% 5.1% 7.8% 4.2% General and administrative expense 9,517 9,866 3,294 3,367 Income from unconsolidated joint venture 3,900 4,640 871 1,828 Interest expense 5,046 298 1,841 298 Other income 738 381 210 155 -------- -------- -------- ------- Homebuilding and corporate pretax income $ 7,774 $ 7,374 $ 4,158 $ 2,466 ======== ======== ======== =======
A summary of residential housing key operating data for the nine-month and three-month periods ended September 30, 1996 and 1995 is as follows:
NINE MONTHS ENDED SEPTEMBER 30, THREE MONTHS ENDED SEPTEMBER 30, -------------------------------- -------------------------------- 1996 1995 1996 1995 -------------- ---------------- ------------ ---------------- New homes delivered California 773 652 307 269 Texas 244 227 83 90 Joint Venture 135 125 35 59 -------- -------- -------- -------- Total 1,152 1,004 425 418 -------- -------- -------- -------- Average selling price - excluding joint venture $262,000 $278,000 $270,000 $275,000 Average selling price - including joint venture $256,000 $273,000 $262,000 $267,000 Net new orders 1,455 1,170 431 419 Backlog at quarter-end 609 443 609 443
10 During the quarter ended September 30, 1996, the Company delivered 425 new homes (including 35 homes delivered by the Company's unconsolidated joint venture) at an average selling price of $262,000 compared to 418 new homes (including 59 homes delivered by the Company's unconsolidated joint venture) at an average selling price of $267,000 for the 1995 third quarter. The following selected operating information has been adjusted on a proforma basis to include the operating results of the Company's unconsolidated joint venture for the three months ended September 30, 1996 and 1995 (dollar amounts in thousands). Discussions of variations and trends in revenues, cost of sales and gross margins have been made utilizing a comparison of the "As Adjusted" amounts.
THREE MONTHS ENDED SEPTEMBER 30, 1996 THREE MONTHS ENDED SEPTEMBER 30, 1995 ------------------------------------- ------------------------------------- As Reported As Adjusted (1) As Reported As Adjusted (1) ---------------- ------------------ -------------- ------------------- Revenues $105,417 $111,725 $99,372 $112,434 Cost of sales 97,205 102,707 95,224 106,485 -------- -------- ------- -------- Gross margin $ 8,212 $ 9,018 $ 4,148 $ 5,949 ======== ======== ======= ======== Gross margin percentage 7.8% 8.1% 4.2% 5.3%
- ------------------------------- (1) Joint venture revenues for the three-month periods ended September 30, 1996 and 1995 amounted to $6.3 million and $13.1 million, respectively. Residential housing sales for the quarter ended September 30, 1996 decreased by less than one percent from the comparable prior year period, while cost of sales attributed to residential housing decreased by approximately 3.5 percent over the same period. The slight decrease in residential housing sales of approximately $709,000 as compared to the third quarter of 1995 resulted primarily from a decrease of $2.1 million attributable to a 1.9 percent lower average selling price of homes delivered which was partially offset by an increase of $1.9 million due to an increase in the number of new homes delivered. The decrease in the average selling price of homes delivered was primarily due to a reduction in deliveries of higher priced homes from the Company's Orange County division. The Company expects its average selling price in the next few quarters to increase as the Company begins to deliver homes in the $400,000 to $700,000 price range from certain of its newer projects in Orange County and the San Francisco Bay area. Residential housing cost of sales for the quarter ended September 30, 1996 decreased by approximately $3.8 million as compared to the third quarter of 1995 primarily as a result of a decrease of $5.1 million due to a decline in the average cost of new homes delivered which was partially offset by an increase of $1.8 million due to an increase in the number of new homes delivered. The Company's gross margin percentage improved to 8.1 percent for the 1996 third quarter as compared to 5.3 percent for the same period last year. This improvement was primarily due to increased deliveries from newer projects in the Company's California markets, particularly from 11 the Company's Northern California and Orange County divisions, a favorable mortgage interest rate environment and from an improving California economic climate. Income from the unconsolidated joint venture decreased to $871,000 in the third quarter of 1996 from $1.8 million in the third quarter of 1995. The joint venture delivered 24 fewer homes in the third quarter of 1996 versus the third quarter of 1995. The decrease in deliveries coupled with the delivery of lower priced homes that carried smaller gross margins resulted in the decrease in joint venture earnings. It is expected that deliveries from this joint venture, and the Company's share of its results of operations, will continue to decrease in 1996 as the venture delivers its lower priced product and nears the end of its inventory of lots. However, the Company expects to begin to deliver homes from a new unconsolidated joint venture during the first quarter of 1997. The Company's net new orders for the third quarter were 3 percent higher than last year's level; however, the increase in orders was over 13 percent higher for the Company's California divisions. In addition, the Company's backlog of presold homes stood at 609 at September 30, 1996, a 37 percent increase over the backlog at the same time last year. The higher order level and backlog is primarily due to the opening of several new projects in both the Northern California and Orange County regions as well as an improving economic climate in many parts of California. Inventory Financing Sources - --------------------------- Sources of financing for the Company's real estate inventories at September 30, 1996 were: purchase money secured notes 5%; unsecured debt 43% and equity 52%. MANUFACTURING SEGMENT A summary of operations for the manufacturing segment for the nine-month and three-month periods ended September 30, 1996 and 1995 is as follows (dollar amounts in thousands):
NINE MONTHS ENDED SEPTEMBER 30, THREE MONTHS ENDED SEPTEMBER 30, ------------------------------- -------------------------------- 1996 1995 1996 1995 ----------- ------------- ------------ ------------- Net product sales $13,837 $11,558 $4,411 $3,834 Cost of sales 8,698 7,432 2,745 2,497 ------- ------- ------ ------ Gross margin 5,139 4,126 1,666 1,337 ------- ------- ------ ------ Gross margin percentage 37.1% 35.7% 37.8% 34.9% Selling, general and administrative expense 3,776 4,276 1,261 1,444 Other income (1) 265 315 71 93 ------- ------- ------ ------ Manufacturing pretax income (loss) $ 1,628 $ 165 $ 476 $ (14) ======= ======= ====== ======
_________________________________ (1) Includes intersegment income of $201,000 and $174,000 for the nine months ended September 30, 1996 and 1995, respectively, and $68,000 and $63,000 for the three months ended September 30, 1996 and 1995, respectively. These intersegment transactions are eliminated in consolidation with no effect on consolidated earnings. 12 Net product sales for the quarter ended September 30, 1996 were 15 percent higher than the prior year third quarter. The office furniture industry continues to show positive growth as evidenced by the strength of the Company's backlog at September 30, 1996 which totaled $1.9 million compared to $1.4 million at the same time last year. General and administrative expenses were reduced through improved cost controls. SAVINGS AND LOAN SEGMENT ("SAVINGS") The following is a summary of operations of Savings for the nine-month and three-month periods ended September 30, 1996 and 1995 (dollar amounts in thousands):
NINE MONTHS ENDED THREE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------- --------------------- 1996 1995 1996 1995 ------- ------- ------- ------- Interest income $15,295 $19,756 $ 4,915 $ 6,378 Interest expense 13,375 18,554 4,170 6,111 ------- ------- ------- ------- Net interest margin 1,920 1,202 745 267 ------- ------- ------- ------- Provision for loan losses 465 1,057 - 793 General and administrative expense 1,642 2,237 799 725 SAIF recapitalization charge 1,291 - 1,291 - Other income (expense) 281 (2,198) 121 (2,005) ------- ------- ------- ------- Income (loss) before taxes (1,197) (4,290) (1,224) (3,256) (Provision) credit for income taxes 496 1,781 507 1,350 ------- ------- ------- ------- Net income (loss) $ (701) $(2,509) $ (717) $(1,906) ======= ======= ======= =======
- ------------------------------- The 1996 third quarter operating results included a one-time assessment of $1,291,000 associated with the recapitalization of the Savings Association Insurance Fund (SAIF). This assessment is one element in the recently enacted Federal law that will resolve the deposit insurance premium disparity between SAIF-insured and Bank Insurance Fund (BIF)-insured institutions, and substantially reduce future deposit insurance premiums for Savings. Excluding the effect of this assessment, Savings would have generated pretax income of $67,000 for the 1996 third quarter. Savings' operating results for the quarter ended September 30, 1996, after excluding the SAIF assessment discussed above, improved from the prior year third quarter as a result of (1) an improvement in the net interest margin, even though interest earning assets declined, (2) a reduction in the provision for loan losses, (3) a reduction in general and administrative expenses, and (4) an improvement in other income (expense) which for 1995 included a $1.8 million pretax charge recorded in connection with reducing the future cost of both FHLB borrowings and an interest rate swap and the sale of certain lower yielding assets. Savings' assets were approximately $284.9 million at September 30, 1996, a decrease of $65.7 million from the December 31, 1995 balance. The decrease in assets was caused by a decrease in mortgage notes receivable and certain cash and investment securities which were sold or paid off 13 during 1996 in accordance with Savings' goal of reducing its level of assets. The proceeds from the sale or paydown of assets and investment securities was used to reduce FHLB borrowings and savings deposits. The following table sets forth the weighted average interest rates on interest earning assets, interest bearing liabilities and the interest rate spread for the three months ended September 30, 1996 and 1995:
1996 1995 ------- -------- Weighted Average Rate on: Interest Earning Assets 6.93% 6.69% Interest Bearing Liabilities 6.25 6.70 ------- -------- Interest Rate Spread 0.68% (0.01)% ======= ========
The weighted average interest rate on interest earning assets improved during the third quarter of 1996 when compared to both the third quarter of 1995 and the second quarter of 1996. This improvement is primarily a result of upward repricing on certain adjustable rate mortgages. The decrease in the average cost of funds was due primarily to the restructuring of the interest rate swap and the FHLB advances during the 1995 third quarter. For a more detailed discussion of Savings' operations, reference should be made to the Company's Annual Report on Form 10-K for the year ended December 31, 1995. CORPORATE SEGMENT On October 22, 1996, the Board of Directors declared a quarterly dividend of $.03 per share of common stock. The cash dividend will be payable on November 27, 1996 to shareholders of record on November 13, 1996. Financial Condition - ------------------- Unsecured notes payable (excluding the 10-1/2% Senior Notes due 2000) totaled $71.9 million at September 30, 1996 versus $48.5 million at December 31, 1995. The increase in debt is primarily due to an increase in real estate inventories resulting from the acquisition of new projects and their related development costs. Total commitments available under the Company's revolving credit facilities aggregated $115 million at September 30, 1996, of which a total of $77.6 million was unused and available for additional borrowings under the terms and conditions of the agreements. During the quarter ended September 30, 1996, the Company entered into a new $10 million term loan agreement with one of its lenders. Quarterly principal payments of $833,000, under this loan agreement, will commence September 30, 1997. 14 Shelf Registration Statement - ---------------------------- In January 1992, the Company filed a shelf registration statement with the Securities and Exchange Commission which was declared effective in March 1992. In connection therewith, the Company may, after issuing the $100 million principal amount of the 10-1/2% Senior Notes in March 1993, issue up to an additional $100 million of either senior or subordinated debt securities from time to time, at prices and terms acceptable to the Company. STATEMENT REGARDING FORWARD LOOKING DISCLOSURE The foregoing "Management's Discussion and Analysis of Financial Condition and Results of Operations" contains "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which represent the Company's expectations or beliefs concerning future events, including, but not limited to, the following: statements regarding the price range of future homes constructed by the Company; statements regarding the future home deliveries and income from the Company's unconsolidated joint ventures; statements regarding a favorable mortgage interest rate environment and an improving California economic climate; statements regarding the homebuilding segment's backlog of homes; statements regarding the manufacturing segment's backlog; and statements regarding future deposit insurance premiums for the Company's savings and loan. The Company cautions that these statements are further qualified by important factors that could cause actual results to differ materially from those in the forward looking statements, including, without limitation, the following: change in the demand for new homes attributable to the cyclical and competitive nature of the homebuilding business; changes in general economic conditions; uncertainty in or changes in the continued availability of suitable undeveloped land at reasonable prices; adverse local market conditions; existing and changing governmental regulations, including regulations concerning environmental matters, the permitting process for home construction and the savings associations' insurance fund; increases in prevailing interest rates; the level of real estate taxes and energy costs; the cost of materials and labor; the availability of construction financing and home mortgage financing attractive to the purchasers of homes; inclement weather and other natural disasters; and change in the demand for office furniture products. Results actually achieved thus may differ materially from expected results included in these and any other forward looking statements contained herein. 15 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. STANDARD PACIFIC CORP. (Registrant) Dated: November 8, 1996 By: /s/ ARTHUR E. SVENDSEN ---------------------- Arthur E. Svendsen Chairman of the Board and Chief Executive Officer Dated: November 8, 1996 By: /s/ ANDREW H. PARNES -------------------- Andrew H. Parnes Treasurer and Chief Financial Officer 16 PART II OTHER INFORMATION Item 1. Legal proceedings None Item 2. Change in Securities None Item 3. Default upon Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders None Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 11. Statement of computation of earnings per share. 27. Financial Data Schedule. (b) Current Reports on Form 8-K None 17 EX-11 2 EARNINGS PER SHARE CALCULATIONS Exhibit 11 STANDARD PACIFIC CORP. AND SUBSIDIARIES EARNINGS PER SHARE CALCULATIONS FOR THE NINE MONTHS AND THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
NINE MONTHS ENDED THREE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ----------------------- ---------------------- 1996 1995 1996 1995 ----------- ----------- ----------- ---------- Primary earnings (loss) per share and equivalent share: Income (loss) before taxes $ 8,004,000 $ 3,075,000 $ 3,342,000 $ (867,000) (Provision) credit for income taxes (3,195,000) (1,238,000) (1,317,000) 391,000 ----------- ----------- ----------- ---------- Net income (loss) $ 4,809,000 $ 1,837,000 $ 2,025,000 $ (476,000) =========== =========== =========== ========== Shares and equivalent shares: Average shares outstanding 30,060,281 30,612,540 30,060,281 30,591,228 Equivalent shares 4,981 4,303 3,530 6,333 ----------- ----------- ----------- ---------- Total 30,065,262 30,616,843 30,063,811 30,597,561 =========== =========== =========== ========== Primary Earnings (Loss) Per Share $ 0.16 $ 0.06 $ 0.07 $ (0.02) ========== ========== =========== ========== Fully-diluted earnings (loss) per share and equivalent share: Net income (loss) $ 4,809,000 $ 1,837,000 $ 2,025,000 $ (476,000) =========== =========== =========== ========== Shares and equivalent shares: Average shares outstanding 30,060,281 30,612,540 30,060,281 30,591,228 Equivalent shares 4,981 5,699 3,530 7,009 ----------- ----------- ----------- ---------- Total 30,065,262 30,618,239 30,063,811 30,598,237 =========== =========== =========== ========== Fully-Diluted Earnings (Loss) Per Share $ 0.16 $ 0.06 $ 0.07 $ (0.02) =========== =========== =========== ==========
18 EX-27 3 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SEP-30-1996 10Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS 9-MOS DEC-31-1995 DEC-31-1995 JUL-01-1996 JAN-01-1996 SEP-30-1996 SEP-30-1996 12,040 0 49,349 0 229,928 0 2,421 0 397,149 0 0 0 13,596 0 7,370 0 735,202 0 0 0 100,000 0 0 0 0 0 301 0 259,703 0 735,202 0 109,828 282,566 114,743 297,861 99,950 259,728 109,474 288,038 86 (3,692) 0 465 1,841 5,046 3,342 8,004 1,317 3,195 2,025 4,809 0 0 0 0 0 0 2,025 4,809 .07 .16 .07 .16 Amounts for current assets and current liabilities are not shown since balance sheet is presented in nonclassified format.
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