<PAGE>
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
<PAGE>
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
<PAGE>
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)
<TABLE>
<CAPTION>
1996 1995
-------- -------
<S> <C> <C>
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)
======== =======
</TABLE>
The accompanying notes are an integral part of these consolidated statements
3
<PAGE>
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)
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
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
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated statements
4
<PAGE>
STANDARD PACIFIC CORP. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1996 1995
------------- -------------
<S> <C> <C>
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
============= =============
</TABLE>
The accompanying notes are an integral part of these consolidated balance
sheets
5
<PAGE>
STANDARD PACIFIC CORP. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1996 1995
------------- ------------
<S> <C> <C>
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
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated balance sheets
6
<PAGE>
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)
<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
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
-------- --------
</TABLE>
The accompanying notes are an integral part of these consolidated statements
7
<PAGE>
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)
<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
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
</TABLE>
The accompanying notes are an integral part of these consolidated statements
8
<PAGE>
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:
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, THREE MONTHS ENDED SEPTEMBER 30,
------------------------------- --------------------------------
1996 1995 1996 1995
------------- ------------- ---------- -------------
<S> <C> <C> <C> <C>
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
======= ======= ======= =======
</TABLE>
3. Reclassifications
-----------------
Certain reclassifications to 1995 financial information have been made to
conform to current period presentation.
9
<PAGE>
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):
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, THREE MONTHS ENDED SEPTEMBER 30,
------------------------------- --------------------------------
1996 1995 1996 1995
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
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
======== ======== ======== =======
</TABLE>
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:
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, THREE MONTHS ENDED SEPTEMBER 30,
-------------------------------- --------------------------------
1996 1995 1996 1995
-------------- ---------------- ------------ ----------------
<S> <C> <C> <C> <C>
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
</TABLE>
10
<PAGE>
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.
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30, 1996 THREE MONTHS ENDED SEPTEMBER 30, 1995
------------------------------------- -------------------------------------
As Reported As Adjusted (1) As Reported As Adjusted (1)
---------------- ------------------ -------------- -------------------
<S> <C> <C> <C> <C>
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%
</TABLE>
- -------------------------------
(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
<PAGE>
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):
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, THREE MONTHS ENDED SEPTEMBER 30,
------------------------------- --------------------------------
1996 1995 1996 1995
----------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
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)
======= ======= ====== ======
</TABLE>
_________________________________
(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
<PAGE>
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):
<TABLE>
<CAPTION>
NINE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------- ---------------------
1996 1995 1996 1995
------- ------- ------- -------
<S> <C> <C> <C> <C>
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)
======= ======= ======= =======
</TABLE>
- -------------------------------
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
<PAGE>
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:
<TABLE>
<CAPTION>
1996 1995
------- --------
<S> <C> <C>
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)%
======= ========
</TABLE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
Exhibit 11
STANDARD PACIFIC CORP. AND SUBSIDIARIES
EARNINGS PER SHARE CALCULATIONS
FOR THE NINE MONTHS AND THREE MONTHS ENDED
SEPTEMBER 30, 1996 AND 1995
<TABLE>
<CAPTION>
NINE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------- ----------------------
1996 1995 1996 1995
----------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
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)
=========== =========== =========== ==========
</TABLE>
18
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SEP-30-1996
10Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1995
<PERIOD-START> JUL-01-1996 JAN-01-1996
<PERIOD-END> SEP-30-1996 SEP-30-1996
<CASH> 12,040 0
<SECURITIES> 49,349 0
<RECEIVABLES> 229,928 0
<ALLOWANCES> 2,421 0
<INVENTORY> 397,149 0
<CURRENT-ASSETS> 0<F1> 0
<PP&E> 13,596 0
<DEPRECIATION> 7,370 0
<TOTAL-ASSETS> 735,202 0
<CURRENT-LIABILITIES> 0<F1> 0
<BONDS> 100,000 0
0 0
0 0
<COMMON> 301 0
<OTHER-SE> 259,703 0
<TOTAL-LIABILITY-AND-EQUITY> 735,202 0
<SALES> 109,828 282,566
<TOTAL-REVENUES> 114,743 297,861
<CGS> 99,950 259,728
<TOTAL-COSTS> 109,474 288,038
<OTHER-EXPENSES> 86 (3,692)
<LOSS-PROVISION> 0 465
<INTEREST-EXPENSE> 1,841 5,046
<INCOME-PRETAX> 3,342 8,004
<INCOME-TAX> 1,317 3,195
<INCOME-CONTINUING> 2,025 4,809
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 2,025 4,809
<EPS-PRIMARY> .07 .16
<EPS-DILUTED> .07 .16
<FN>
<F1> Amounts for current assets and current liabilities are not shown since
balance sheet is presented in nonclassified format.
</FN>
</TABLE>
