Standard Pacific Chief Financial Officer Andrew Parnes said during this morning’s first-quarter earnings conference call that the beleaguered Irvine-based homebuilder is exploring several “alternative financial and strategic opportunities.” Among them:

“… a merger, business combination or sale of the company.”

Parnes and other top Standard Pacific execs immediately moved on to other financial matters without elaborating. Nor did the matter come up during the more than 30-minute question-and-answer period afterward. The company’s 10-Q filing with the Securities and Exchange Commission contained this comment on Page 47:

“As a result of these uncertainties, and to help position the Company to weather the current market downturn and to be prepared to take advantage of market opportunities when the market strengthens, our Board of Directors has initiated a process to examine alternative financial and strategic opportunities available to us to provide the Company with possible additional liquidity and operating flexibility. These alternatives may include the sale of equity or debt securities, debt exchanges, the sale of additional non-core assets, or a merger, business combination or sale of the Company. This process may not result in any prospective transaction, or any specific type of transaction, and our Board of Directors may determine that any prospective transaction is not in the best interests of the Company.”

Parnes’ comment came amid a mixed report on the company’s first-quarter earnings.

On the one hand, losses are up 431%, but the company increased its cash by $110 million. Its ability to borrow money is restricted because of an excessive debt-to-equity ratio, but the exceptions to those restrictions will allow the company to borrow enough to pay bills not covered by its increased cash. The company is in technical default on its loans, but lenders are negotiating.

Company officials continue to have a dire outlook on the housing market. Problems “continue to reflect the difficult housing conditions in most markets,” company execs said. Among the chief concerns: Lower home prices, increased discounts offered to buyers, rising foreclosures, higher costs for jumbo loans and continued restrictions on low- or no-documentation loans. That has decreased the pool of buyers, and as a result, company officials said, “there will continue to be pricing pressure for the remainder of this year.”

This entry was posted on Monday, May 12th, 2008 at 6:01 pm and is filed under Brokers, builders, etc.. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.