Cancellations Up, Cash Down For SPF

A homebuilder just reported operating results. "Standard Pacific Corp. today reported the Company's 2005 fourth quarter and fiscal year operating results. Stephen J. Scarborough, Chairman and Chief Executive Officer, stated, 'Notwithstanding the demands on capital associated with our growth, we have continued to maintain a strong balance sheet. We increased our lot position 45% year over year." "'Our business plan for 2006 reflects our current view that many of our housing markets are moderating from the unsustainable pace of the past few years and that demand for new homes will adjust to more normalized and sustainable levels resulting in generally lower absorption rates on a project-by-project basis. At the same time, we plan to open approximately 150 new projects during the year, up 63% over 2005.'" "'We remain confident in our long-term prospects for growth. This confidence is no more evident than by our recent stock buyback activity. During the fourth quarter we repurchased over 1.2 million shares, extending our buyback string to 10 consecutive years. And to provide for additional buyback capacity, our Board approved a new $100 million repurchase plan this week.'" "During the 2005 fourth quarter, the Company delivered 989 new homes in California (exclusive of joint ventures), a 12% decrease from the 2004 fourth quarter. Deliveries were up 7% in Southern California..deliveries were down 47% in Northern California." "During the 2005 fourth quarter, the Company's average home price declined 12% year-over-year to $351,000. The lower average selling price was attributable to the shifting geographic mix of our new home deliveries. Our average home price in California was $687,000 for the fourth quarter of 2005, a 1% increase from the year earlier period." "Our expectations for the year are bolstered by our backlog of nearly 6,300 homes, valued at $2.3 billion. The Company's cancellation rate for the 2005 fourth quarter was 25%, up from the year earlier rate of 17%. The Company's cancellation rate was noticeably higher in Northern California." It looks like the company has a negative cash flow again. This firm ended 2004 with $141 million in cash and equivalents and at the time accounts payable was at $96 million. Standard Pacific had only $19 million in cash at the end of 2005, and accounts payable rose to $115 million.