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Ryland Reports Results for the Third Quarter of 2007.



CALABASAS, Calif. -- The Ryland The name Ryland can refer to several things:
  • William Wynne Ryland - English engraver
  • Ryland Homes - developer
  • Ryland Heights, Kentucky
  • Ryland, Norway
  • Rylands Library Papyrus P52
  • Rylands v Fletcher
 Group, Inc. (NYSE NYSE

See: New York Stock Exchange
:RYL), today announced results for its third quarter ended September September: see month.  30, 2007. Items of note included:

* Pretax pre·tax  
adj.
Existing before tax deductions: pretax income.

pretax adj [profit] → vor (Abzug der) Steuern 
 charges for inventory valuation adjustments and write-offs of $128.1 million for the quarter ended September 30, 2007;

* Loss of $1.30 per share for the quarter ended September 30, 2007, including inventory valuation adjustments and write-offs, compared to earnings of $1.97 per share for the same period in the prior year;

* Excluding inventory valuation adjustments and write-offs, earnings for the quarter would have been $0.46 per share;

* Consolidated revenues of $732.3 million for the quarter ended September 30, 2007, reflected a decrease of 35.2 percent from the quarter ended September 30, 2006;

* Gross profit margins Gross profit margin

Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold.


gross profit margin

A measure calculated by dividing gross profit by net sales.
 averaged 17.4 percent prior to inventory valuation adjustments and write-offs and negative 0.3 percent subsequent to these adjustments for the quarter ended September 30, 2007, compared to 22.5 percent for the same period in 2006;

* Positive operating cash flow Operating cash flow

Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements.
 of $42.6 million for the third quarter of 2007, primarily used to reduce debt by $36.9 million;

* Closings for the quarter ended September 30, 2007, totaled 2,495 units, reflecting a 32.3 percent decrease from the same period in the prior year;

* New orders in the third quarter of 2007 declined 20.9 percent to 1,876 units from 2,372 units in the third quarter of 2006;

* Inventory of houses started and unsold declined to 1,362 units at September 30, 2007, denoting decreases of 21.9 percent and 30.2 percent from December December: see month.  31, 2006 and September 30, 2006, respectively; and

* Net debt-to-total capital ratio was 40.4 percent at September 30, 2007.

RESULTS FOR THE THIRD QUARTER OF 2007

For the third quarter ended September 30, 2007, the Company reported a consolidated loss of $54.7 million, or $1.30 per diluted di·lute  
tr.v. di·lut·ed, di·lut·ing, di·lutes
1. To make thinner or less concentrated by adding a liquid such as water.

2. To lessen the force, strength, purity, or brilliance of, especially by admixture.
 share, compared to earnings of $87.9 million, or $1.97 per diluted share, for the same period in 2006. Inventory valuation adjustments and write-offs totaled $128.1 million for the third quarter ended September 30, 2007. Excluding these adjustments and write-offs, earnings for the quarter would have been $0.46 per share.

The homebuilding segments reported a pretax loss pretax loss

A loss reported before tax benefits are considered.
 of $90.0 million during the third quarter of 2007, compared to $141.3 million in pretax earnings for the same period in 2006. This decrease was primarily due to a decline in closings and margins, which included the impact of inventory valuation adjustments and write-offs.

Homebuilding revenues decreased 35.2 percent to $717.5 million for the third quarter of 2007, compared to $1.1 billion for the same period in 2006. This decline was primarily attributable to lower closings that totaled 2,495 units, representing a 32.3 percent decrease from the same period in the prior year, and to a decline in the average closing price of a home, which decreased to $284,000 for the quarter ended September 30, 2007, from $291,000 for the quarter ended September 30, 2006. Homebuilding revenues for the third quarter of 2007 included $8.3 million from land sales, compared to $37.4 million from land sales for the third quarter of 2006, which contributed net gains of $294,000 and $7.3 million to pretax earnings in 2007 and 2006, respectively.

New orders of 1,876 units for the quarter ended September 30, 2007, represented a decrease of 20.9 percent, compared to new orders of 2,372 units for the same period in 2006. For the third quarter of 2007, new order dollars declined 27.0 percent to $491.4 million from $673.2 million for the third quarter of 2006. Backlog Backlog

The total value of sales orders waiting to be fulfilled.

Notes:
This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings.
 at the end of the third quarter of 2007 decreased 36.6 percent to 4,334 units from 6,835 units at the end of the third quarter of 2006. At September 30, 2007, the dollar value of the Company's backlog was $1.2 billion, reflecting a decline of 41.6 percent from September 30, 2006.

Gross profit margins averaged 17.4 percent prior to inventory valuation adjustments and write-offs and negative 0.3 percent subsequent to these adjustments for the third quarter of 2007, compared to 22.5 percent for the same period in 2006. This decrease was primarily due to inventory valuation adjustments and write-offs, as well as to increased sales incentives Noun 1. sales incentive - remuneration offered to a salesperson for exceeding some predetermined sales goal
bonus, incentive - an additional payment (or other remuneration) to employees as a means of increasing output
 that related to home deliveries, for the third quarter of 2007. Selling, general and administrative expenses, as a percentage of homebuilding revenue, were 12.3 percent for the third quarter of 2007, compared to 9.7 percent for the same period in 2006. This increase was primarily attributable to the decline in revenues, as well as higher marketing and advertising costs per unit. Selling, general and administrative expense dollars decreased $19.6 million, versus the same period in the prior year. The homebuilding segments capitalized Capitalized

Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year.
 all interest incurred during the third quarter of 2007 due to development activity.

Corporate expenses were $11.1 million for the third quarter of 2007, compared to $16.1 million for the same period in the prior year. This decrease was primarily due to lower incentive compensation expense that resulted from declines in earnings and stock price.

The Company's financial services The examples and perspective in this article or section may not represent a worldwide view of the subject.
Please [ improve this article] or discuss the issue on the talk page.
 segment, which includes mortgage, title, escrow escrow

Instrument, such as a deed, money, or property, that constitutes evidence of obligations between two or more parties and is held by a third party. It is delivered by the third party only upon fulfillment of some condition.
 and insurance services, reported pretax earnings of $6.8 million for the third quarter of 2007, compared to pretax earnings of $14.4 million for the same period in 2006. This decline was primarily attributable to a 35.1 percent decrease in the number of mortgages originated due to a slowdown For articles with similar titles, see Slow Down (disambiguation).
A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties.
 in the homebuilding market and to a decrease of 1.0 percent in average loan size. The capture rate of mortgages originated for the Company's homebuilding customers was 77.7 percent for the third quarter of 2007, compared to 82.2 percent for the same period in 2006.

RESULTS FOR THE FIRST NINE MONTHS OF 2007

For the nine months ended September 30, 2007, the Company reported a consolidated loss of $131.6 million, or $3.12 per diluted share, compared to earnings of $272.8 million, or $5.86 per diluted share, for the same period in 2006. Excluding inventory valuation adjustments and write-offs, which totaled $340.7 million, earnings for the first nine months of 2007 would have been $1.80 per share.

The homebuilding segments reported a pretax loss of $213.7 million during the first nine months of 2007, compared to $442.6 million in pretax earnings for the same period in 2006. This decrease was primarily due to a decline in closings and margins, which included the impact of $340.7 million of inventory valuation adjustments and write-offs.

Homebuilding revenues decreased 36.1 percent to $2.1 billion for the first nine months of 2007, compared to $3.3 billion for the same period in 2006. This decline was primarily attributable to closings that totaled 7,258 units, a 34.3 percent decrease from the same period in 2006. The average closing price of a home was $291,000 and $294,000 for nine-month periods ended September 30, 2007 and 2006, respectively. Homebuilding revenues for the first nine months of 2007 included $15.2 million from land sales, compared to $71.3 million from land sales for the same period in 2006, which contributed net gains of $1.4 million and $18.7 million to pretax earnings in 2007 and 2006, respectively.

New orders of 7,386 units for the nine months ended September 30, 2007, represented a decrease of 21.6 percent, compared to new orders of 9,416 units for the same period in 2006. For the first nine months of 2007, new order dollars declined 24.9 percent to $2.1 billion from $2.7 billion for the first nine months of 2006.

Gross profit margins averaged 18.3 percent prior to inventory valuation adjustments and write-offs and 2.5 percent subsequent to these adjustments for the first nine months of 2007, compared to 23.3 percent for the same period in 2006. This decrease was primarily due to inventory valuation adjustments and write-offs, as well as to increased sales incentives that related to home deliveries for the first nine months of 2007. Selling, general and administrative expenses, as a percentage of homebuilding revenue, were 12.5 percent for the first nine months of 2007, compared to 10.1 percent for the same period in 2006. This increase was primarily attributable to the decline in revenues, higher marketing and advertising costs per unit, as well as to severance The act of dividing, or the state of being divided.

The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when
 costs. Selling, general and administrative expense dollars decreased $68.9 million, versus the same period in the prior year. The homebuilding segments capitalized all interest incurred during the first nine months of 2007 due to development activity.

Corporate expenses were $24.7 million for the first nine months of 2007, compared to $50.1 million for the same period in the prior year. This decrease was primarily due to lower incentive compensation expense that resulted from declines in earnings and stock price.

The Company's financial services segment, which includes mortgage, title, escrow and insurance services, reported pretax earnings of $24.6 million for the first nine months of 2007, compared to pretax earnings of $42.8 million for the same period in 2006. This decline was primarily attributable to a 36.2 percent decrease in the number of mortgages originated due to a slowdown in the homebuilding market, slightly offset by an increase of 1.0 percent in average loan size. The capture rate of mortgages originated for the Company's homebuilding customers was 78.9 percent for the first nine months of 2007, compared to 81.7 percent for the same period in 2006.

STOCK REPURCHASE Stock repurchase

A firm's repurchase of outstanding shares of its common stock.
 PROGRAM

During the three months ended September 30, 2007, the Company did not repurchase re·pur·chase  
tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es
To buy (something) again.

n.
The act of buying something that one previously sold or owned.

Noun 1.
 any shares of its common stock.

CHANGE IN OVERALL EFFECTIVE TAX RATE

The effective tax rate for the third quarter of 2007 was 42.1 percent. The increase in the tax benefit rate in the third quarter was primarily due to the Company's reversal of prior year tax provisions no longer required due to the expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute.
     2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created
 of various tax statutes of limitations. The Company anticipates its annual effective rate to be approximately 39.0 percent; however, as a result of the uncertainty of current market conditions, the Company is unable to provide more precise annual effective rate guidance at this time.

AMENDED a·mend  
v. a·mend·ed, a·mend·ing, a·mends

v.tr.
1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive.

2.
 REVOLVING CREDIT Revolving Credit

A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs.
 FACILITY

The Company has amended its revolving credit facility by reducing its borrowing capacity to $750.0 million from $1.1 billion in an effort to reduce costs related to unused capacity and to provide additional flexibility by modifying several covenants. The facility's maturity date of January 2011 and the uncommitted accordion accordion, musical instrument consisting of a rectangular bellows expanded and contracted between the hands. Buttons or keys operated by the player open valves, allowing air to enter or to escape. The air sets in motion free reeds, frequently made of metal.  feature to $1.5 billion remain unchanged.

With headquarters in Southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, , Ryland is one of the nation's largest homebuilders and a leading mortgage-finance company. The Company currently operates in 28 markets across the country and has built more than 270,000 homes and financed more than 230,000 mortgages since its founding in 1967. Ryland is a Fortune 500 company listed on the New York Stock Exchange New York Stock Exchange (NYSE)

World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City.
 under the symbol "RYL." Previous news releases may be obtained at www.ryland.com.

Note: Certain statements in this press release may be regarded as "forward-looking statements forward-looking statement

A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections.
" within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and  of 1995, and may qualify for the safe harbor Safe Harbor

1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated.

2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive.
 provided for in Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements represent the Company's expectations and beliefs concerning future events, and no assurance can be given that the future results described in this press release will be achieved. These forward-looking statements can generally be identified by the use of statements that include words such as "anticipate," "believe," "estimate," "expect," "foresee fore·see  
tr.v. fore·saw , fore·seen , fore·see·ing, fore·sees
To see or know beforehand: foresaw the rapid increase in unemployment.
," "goal," "intend," "likely," "may," "plan," "project," "should," "target," "will" or other similar words or phrases. All forward-looking statements contained herein are based upon information available to the Company on the date of this press release. Except as may be required under applicable law, the Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of the Company's control, that could cause actual results to differ materially from the results discussed in the forward-looking statements. The factors and assumptions upon which any forward-looking statements are subject to risks and uncertainties which include, among others:

* economic changes nationally or in the Company's local markets, including volatility and increases in interest rates, inflation, changes in consumer demand and confidence levels and the state of the market for homes in general;

* the availability and cost of land;

* increased land development costs on projects under development;

* shortages of skilled labor or raw materials used in the production of houses;

* increased prices for labor, land and raw materials used in the production of houses;

* increased competition;

* instability instability /in·sta·bil·i·ty/ (-stah-bil´i-te) lack of steadiness or stability.

detrusor instability
 and uncertainty in the mortgage lending market, including revisions to underwriting Underwriting

1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt).

2. The process of issuing insurance policies.
 standards for borrowers;

* failure to anticipate or react to changing consumer preferences in home design;

* increased costs and delays in land development or home construction resulting from adverse weather conditions;

* potential delays or increased costs in obtaining necessary permits as a result of changes to laws, regulations, or governmental policies (including those that affect zoning, density, building standards and the environment);

* delays in obtaining approvals from applicable regulatory agencies regulatory agency

Independent government commission charged by the legislature with setting and enforcing standards for specific industries in the private sector. The concept was invented by the U.S.
 and others in connection with the Company's communities and land activities;

* the risk factors set forth in the Company's most recent Annual Report on Form 10-K Form 10-K

A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information.


Form 10-K

See 10-K.
; and

* other factors over which the Company has little or no control.

Four financial statements follow.
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Publication:Business Wire
Article Type:Financial report
Date:Oct 24, 2007
Words:2308
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