IRVINE, Calif., Feb. 13 /PRNewswire-FirstCall/ -- Standard Pacific Corp. (NYSE: SPF) today reported the Company's unaudited 2008 fourth quarter operating results.

2008 Fourth Quarter Financial and Operating Highlights From Continuing and Discontinued Operations:

• Homebuilding cash of $626 million;
• Homebuilding debt reduction of $73.8 million during the quarter;
• Cash flows generated from operating activities of $65.2 million;
• Homebuilding segment pretax loss from continuing operations of $444.2 million compared to $385.3 million last year;
• Consolidated net loss per diluted share of $1.65 vs. net loss per diluted share of $6.10 last year;
• Consolidated net loss of $396.6 million compared to a net loss of $440.9 million last year;
• $443.6 million of pretax charges related to inventory, joint venture and goodwill impairments and land deposit write-offs coupled with recording an additional $124.9 million net deferred tax asset valuation allowance during the quarter; and
• Net loss of approximately $148,000, or $0.00 per diluted share, excluding aggregate charges totaling $1.65 per diluted share** related to after-tax impairment and tax valuation allowance charges.

2008 Fourth Quarter Financial and Operating Highlights From Continuing Operations:

• Homebuilding revenues of $376.4 million vs. $933.6 million last year;
• New home deliveries of 1,146*, down 47% from 2,150* last year;
• 539* net new home orders, down 46% from 1,002* last year;
• Cancellation rate of 33%*, down from 37%* in the prior year period and up from 26%* for the 2008 third quarter; and
• Quarter-end backlog of 642* homes, valued at $193 million compared to 1,279* homes valued at $443 million a year ago.

The net loss for the quarter ended December 31, 2008 was $396.6 million, or $1.65 per diluted share, compared to a net loss of $440.9 million, or $6.10 per diluted share, in the year earlier period. Homebuilding revenues from continuing operations for the 2008 fourth quarter were $376.4 million versus $933.6 million last year. The Company's results for the 2008 fourth quarter included pretax impairment charges of $443.6 million. The impairment charges consisted of: $350.3 million related to ongoing consolidated real estate inventories; $26.6 million related to land sold or held for sale; $22.7 million related to the Company's share of joint venture impairment charges; $8.5 million related to land deposit and capitalized preacquisition cost write-offs for abandoned projects; and $35.5 million related to goodwill impairment charges leaving no goodwill remaining on the Company's balance sheet. In addition, the 2008 fourth quarter operating results also included a noncash charge related to a net increase in the Company's deferred tax asset valuation allowance of $124.9 million, or $0.52 per diluted share. Excluding these charges, the Company generated a loss of approximately $148,000, or $0.00 per diluted share.**

Ken Campbell, CEO of Standard Pacific Corp. said, 'The well publicized economic and housing downturn has had a profound impact on the Company's operating results. We saw our sales absorption rates, our cancellation rate and general traffic levels deteriorate beyond normal seasonal changes in the fourth quarter. These trends, combined with an expectation of further new home price declines, led to the high level of impairments during the quarter.'

'On a positive note,' Mr. Campbell continued, 'We generated $65 million in cash from operating activities, reduced our homebuilding debt by nearly $74 million, net of $74 million of joint venture and other debt assumed during the fourth quarter, and ended the year with $626 million of cash on our balance sheet. In addition, the Company continued to make aggressive reductions in its headcount and overhead to better align its cost structure with the realities of today's housing market. And while we have made much progress to date in this area, we are vigorously pursuing additional cost cutting initiatives based on our expectation that 2009 will be an extremely challenging year for our Company and the industry.'

Mr. Campbell concluded, 'With our year end cash balance of over $600 million, an expected tax refund of over $110 million in early 2009 and our cost reductions to date and in process, we believe we have a strong liquidity position.'

Cash Generation and Debt Reduction Results

Standard Pacific ended the year with more than $626 million of homebuilding cash while repaying the remaining $103.5 million of its 6 1/2% senior notes due October 1, 2008, reducing the balance outstanding under the Company's revolving credit facility during the 2008 fourth quarter by $5 million to $47.5 million, and paying down its Term Loan A by $5 million to $57.5 million. As a result of Standard Pacific's net operating loss carrybacks for federal income taxes, the Company expects to receive a tax refund of approximately $114 million during the 2009 first quarter.

Inventory Reduction

As a result of the continued focus on inventory reduction initiatives, Standard Pacific's owned or controlled lot position stood at approximately 24,000 lots (including discontinued operations) at December 31, 2008, a 31% reduction from the year ago level and a 68% decrease from the peak lot count at December 31, 2005.

Joint Venture Update

The Company unwound two Southern California joint ventures during the 2008 fourth quarter resulting in the assumption of approximately $67.6 million of joint venture debt. The Company also made an $8.7 million loan remargin payment related to one of these Southern California joint ventures during the 2008 fourth quarter prior to the unwind. The Company's unconsolidated joint ventures reduced their borrowings by approximately $90 million during the 2008 fourth quarter and by $349 million since the end of 2007. As of December 31, 2008, the Company's unconsolidated joint ventures had borrowings outstanding of approximately $422 million, of which $248 million was non-recourse debt (two joint ventures) and $174 million of which was subject to loan-to-value maintenance agreements (seven joint ventures) which the Company was either solely or jointly and severally liable. The Company continues to evaluate its homebuilding joint ventures and may exit additional joint ventures in the future, which may be accomplished by acquiring its partner's interest, disposing of its interest or other means.

Debt Compliance Update

The bank credit facilities contain a liquidity test requiring the Company to maintain either a minimum ratio of cash flow from operations (excluding cash flows from certain excluded subsidiaries) to consolidated home building interest incurred or a minimum liquidity reserve. Since we were unable to meet the minimum cash flow coverage ratio at December 31, 2008, we will set aside approximately $120 million in an interest reserve account. The cash flow coverage ratio was adversely impacted over the past four quarters by the number and magnitude of joint venture unwinds. In addition, in the near term, the Company expects its interest expense will generally decrease as it continues to reduce its debt levels.

In addition, based on the Company's leverage at December 31, 2008, pursuant to its public notes, the Company will be limited in its ability to incur additional indebtedness subject to carve outs for additional borrowings of up to $550 million under bank facilities and an unlimited amount for purchase money non-recourse indebtedness. In addition, the Company will be prohibited from making restricted payments from funds other than those residing in unrestricted subsidiaries. As of December 31, 2008, the Company had in excess of $500 million of liquidity in those unrestricted subsidiaries to cover its joint venture capital and other restricted payment needs.

Restructuring Charges

The Company's 2008 fourth quarter results included approximately $16.4 million in restructuring charges related to division consolidations and related headcount and facilities reductions, of which approximately $13.8 million was included in the Company's selling, general and administrative ('SG&A') expenses, $1.2 million in cost of sales and $1.4 million in other expense. The charges were incurred in an effort to better align the Company's operations and costs with the lower delivery volume levels as a result of weaker economic and housing conditions. The Company's 2008 fourth quarter SG&A rate would have been 14.9%** excluding these restructuring charges. In addition, the Company incurred $3.0 million of G&A related costs in connection with the potential TOUSA acquisition. Excluding these costs and the restructuring related costs the Company's SG&A rate would have been 14.2%**.

Homebuilding Operations

                    Three Months Ended December 31,   Year Ended December 31,
                       2008         2007  %Change    2008        2007  %Change
                                      (Dollars in thousands)
    Homebuilding
     revenues:
      California      $213,433    $602,457  (65%)   $796,737 $1,484,047  (46%)
      Southwest (1)     82,990     166,156  (50%)    416,749    793,455  (47%)
      Southeast         79,976     164,995  (52%)    322,130    611,331  (47%)
        Total
         homebuilding
         revenues     $376,399    $933,608  (60%) $1,535,616 $2,888,833  (47%)
    Homebuilding
     pretax loss:
      California     $(232,965)  $(197,338)  18%   $(722,096) $(524,856)  38%
      Southwest (1)    (83,701)   (113,460) (26%)   (256,162)  (165,685)  55%
      Southeast       (124,027)    (73,687)  68%    (221,872)  (150,808)  47%
      Corporate         (3,527)       (794) 344%     (34,176)    (5,130) 566%
        Total
         homebuilding
         pretax
         loss        $(444,220)  $(385,279)  15% $(1,234,306) $(846,479)  46%
    Homebuilding
     pretax
     impairment
     charges:
      California      $240,261    $196,504   22%    $690,890   $577,990   20%
      Southwest (1)     81,774     114,374  (29%)    252,877    211,075   20%
      Southeast        121,611      82,072   48%     209,763    195,527    7%
        Total
         homebuilding
         pretax
         impairment
         charges      $443,646    $392,950   13%  $1,153,530   $984,592   17%

    Homebuilding pretax
     impairment
     charges:
      Deposit
       write-offs       $8,550     $11,833  (28%)    $25,649    $22,539   14%
      Inventory
       impairments     376,914     276,228   36%     943,094    705,420   34%
      Joint venture
       impairments      22,660      68,515  (67%)    149,265    202,309  (26%)
      Goodwill
       impairments      35,522      36,374   (2%)     35,522     54,324  (35%)
        Total
         homebuilding
         pretax
         impairment
         charges      $443,646    $392,950   13%  $1,153,530   $984,592   17%
    (1)  Excludes the Company's San Antonio and Tucson divisions, which are
         classified as discontinued operations.

The Company generated a homebuilding pretax loss from continuing operations for the 2008 fourth quarter of $444.2 million compared to a pretax loss of $385.3 million in the year earlier period. The increase in pretax loss was primarily the result of a $50.7 million, or 13%, increase in impairment charges, a 60% decrease in homebuilding revenues to $376.4 million, and an increase in interest expense of approximately $10.3 million. These changes were partially offset by a $39.2 million decrease in the Company's absolute level of SG&A expenses, which included approximately $13.8 million in restructuring charges related to division closures and consolidations, and a $49.6 million decrease in joint venture loss (to a loss of $21.4 million). The Company's homebuilding operations for the 2008 fourth quarter included $443.6 million of pretax impairment charges, which are detailed in the table above. The inventory impairment charges were included in cost of sales, the joint venture charges were included in income (loss) from unconsolidated joint ventures and the land deposit and capitalized preacquisition cost write-offs and goodwill impairment charges were included in other income (expense).