Standard Pacific Corp.’s chief executive title is being passed from a self-described “outsider” in the homebuilding business to one of the company’s longest-serving veterans.
Irvine-based Standard Pacific announced last week that’s its chief executive, Ken Campbell, will step down from the company—the largest homebuilder based in Orange County—at the end of the year.
His position will be taken over by Scott Stowell, Standard Pacific’s current president and an employee since 1986.
Stowell has held a series of executive positions at the builder, including a stint as president of the company’s Southern California region. Prior to that, Stowell headed up its OC operations.
Stowell has already begun to assume day-to-day management of the company. He will also take a seat on the company’s board along with the chief executive’s title at the start of 2012, according to the company.
Expected
The personnel move was expected, especially after Stowell was promoted from chief operating officer—a position he’d held since 2007—to president in March.
At the time, Campbell cited Stowell’s efforts in reviving the company from the lows of the housing crash.
“His expertise was vital in transforming Standard Pacific from a company that some had counted out of the game to one of the frontrunners in the industry,” Campbell said at the time.
More surprising than the personnel change was the timing of the announcement, which comes amid a sluggish housing market that’s still looking to find its feet.
Campbell, a turnaround specialist, told The Wall Street Journal last year that he didn’t expect to be at the company five years from then, saying “I’m not a career home builder.”
The market hasn’t turned around but Standard Pacific has, Campbell said when announcing his departure last week.
Standard Pacific “is well positioned for the future,” Campbell said. “I look forward to watching Scott and the rest of the outstanding leadership group we have assembled execute our growth plan as we come out of the economic downturn.”
After bottoming out with a $1.2 billion loss in 2008, Standard Pacific has flirted with profitability for the past year-and-a-half.
It hit tougher going as the market slowed again more recently, with a loss of $10.5 million in the second quarter on $204 million of sales.
Analysts expect the company to earn about a $10 million profit for the second half of the year, on sales of about $500 million. Next year, the company is projected to earn more than $30 million, with sales about 20% higher than 2011.
The company counts a market value of about $477 million.
• Headquarters: Irvine
• Business: homebuilder
• Founded: 1961
• Ticker symbol: SPF (NYSE)
• Market value: about $477 million
• Notable: Chief Executive Ken Campbell will step down at end of year; Scott Stowell will move from president to chief executive, with seat on board.
Campbell’s Time Up
Being chief executive for almost three years “is about as long as a restructuring guy like me should stick around,” said Campbell, who was brought in from Standard Pacific’s dominant shareholder, New York-based private equity firm MatlinPatterson Global Advisers LLC, where he was a partner.
Stowell will be the fourth chief executive at Standard Pacific since 2008, when longtime chief executive Stephen Scarborough stepped down from the post.
Scarborough, a 27-year veteran of the company, retired and was replaced by Jeffrey Peterson, who had been a director with the company since 2001.
Peterson’s stint as chief executive only lasted less than a year, but included one sizeable financial transaction for Standard Pacific: landing a $530 million financing deal with MatlinPatterson.
The May 2008 deal acted as a life preserver for the then-financially troubled company.
At the start of 2008, Standard Pacific was an odds-on favorite to become the largest national homebuilder to declare bankruptcy during the housing downturn, thanks to its heavy debt and focus on hard-hit California, Florida, Arizona and Nevada.
Campbell joined the company soon after the MatlinPatterson deal and took over the CEO role near the end of 2008. Throughout his tenure at Standard Pacific, he made it clear he didn’t think of himself as a homebuilder.
“Partner”
If homebuilding expertise was needed, Campbell—in a 2009 Business Journal profile—said that he turned to his “partner” Stowell, who worked at Newport Beach-based Irvine Company before joining Standard Pacific in 1986.
“Scott and I are on the same page,” Campbell said at the time.
While not necessarily making a lot of friends in the tight-knit homebuilding industry over the past three years, Campbell is credited with bringing the company back from the brink of bankruptcy.
Campbell inherited a company with more than $2 billion in debt, most of it due to mature before 2016. Now, the company’s debt load runs about $1.3 billion, with only a minimal amount of that due in the next five years.
The lowered debt load and other fundraising efforts have given the company the ability to buy land, much of it in California, in preparation for an improved housing market.
Land Buys
Standard Pacific spent about $315 million on land buys for all of 2010, and has spent another $180 million on land in the first half of this year.
The company’s overhead was cut by about 50%, to $150 million under Campbell’s watch. Standard Pacific is now said to have the highest profit margins in the homebuilding industry, on a per-home basis.
The company is the 12th-largest builder in the U.S., according to trade reports.
“As I look around the company, I see a talented and experienced group of people who will help us to create stockholder value as we navigate the remainder of this downturn while preparing for the housing market’s eventual recovery,” Stowell said in a statement last week.
