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Standard Pacific Corp. Message Board

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  • oldschoolbuilder oldschoolbuilder Feb 17, 2007 6:20 PM Flag


    <<How does SPF plan to meet its stated objectives when orders are down 70% in FL and 80% in AZ and based on comments in the CC one can possibly infer that the trend continued into January?>>

    AZ and FL are smaller potatoes relative to CA. But orders will improve there too as cancellations fall. Remember, the order decline is not as severe when looking at GROSS orders--which are down moderately, but appear to be improving. On finished specs, orders typically turn into closings within the quarter--so looking at quarter end orders don't always tell the whole story. CA orders are much improved--that's the more important thing.

    <<Further, with orders running at that level, how can SPF reasonably expect to make a profit with current land basis, overhead and debt structure?>>

    Profit matters less than turning inventory to cash and paying down debt. Having said that, some modest level of profit is likely in 2007--and certainly in 2008. This is the cyclical trough--normalized earnings are significantly higher.

    Frankly, I'm just tired of the number of constant repetitive posts from alstry. Shorts will lose a lot of money here as the company delevers and the market improves. It's way too late in the game to be short--especially at book value. SPF is likely a takeover candidate by 2008 when industry M&A picks up (as it always does when the market stabilizes).

    This may be my last post here for a while. Take care all.

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    • Look at KB Home's recent results. They bear out what you say about focusing on generating cash, even if it means significant losses.

      BTW, SPF and KBH have the distinction of having the highest deb-to-cap ratios among the large public builders.

      What evidence do you have that CA net orders are getting any better?

      Any thoughts on what the squeeze in sub-prime lending will have on sales?