-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, mnNRz6m2FbOD+DtyppJDiBH50wbTUq0rvwpzdO66JkWsS31vRmsGVLhWtqAw5zxQ BuK+iO2MtzBLXiHXIH4vHQ== 0000912057-94-000150.txt : 19940128 0000912057-94-000150.hdr.sgml : 19940128 ACCESSION NUMBER: 0000912057-94-000150 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19930930 FILED AS OF DATE: 19940126 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RYLAND GROUP INC CENTRAL INDEX KEY: 0000085974 STANDARD INDUSTRIAL CLASSIFICATION: 1531 IRS NUMBER: 520849948 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 34 SEC FILE NUMBER: 001-08029 FILM NUMBER: 94502764 BUSINESS ADDRESS: STREET 1: 11000 BROKEN LAND PARKWAY CITY: COLUMBIA STATE: MD ZIP: 21044 BUSINESS PHONE: 4107157000 FORMER COMPANY: FORMER CONFORMED NAME: RYAN JAMES P CO DATE OF NAME CHANGE: 19720414 10-Q/A 1 10-Q/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QA-1 ------------ [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 1993 --------------------- or [ ] Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to ------------- -------------- Commission File Number: 1-8029 THE RYLAND GROUP, INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Maryland 52-0849948 - -------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer of incorporation or organization) Identification No.) 11000 Broken Land Parkway, Columbia, Maryland 21044 --------------------------------------------------------- (Address of principal executive offices) (Zip Code) (410) 715-7000 --------------------------------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ------ ----- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. The number of shares of common stock of The Ryland Group, Inc., outstanding on October 29, 1993 was 15,283,942. THE RYLAND GROUP, INC. FORM 10-Q INDEX Page Number PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheets at September 30, 1993 (unaudited) and December 31, 1992 1-2 Consolidated Statements of Earnings for the three months ended September 30, 1993 and 1992 and the nine months ended September 30, 1993 and 1992 (unaudited) 3 Consolidated Statements of Cash Flows for the nine months ended September 30, 1993 and 1992 (unaudited) 4 Notes to Consolidated Financial Statements (unaudited) 5-9 SIGNATURES 10 NOTE: This amendment is being filed to correct a misprint on the Consolidated Statements of Earnings on page 3 resulting from the EDGAR electronic transmission. The Ryland Group, Inc. and subsidiaries CONSOLIDATED BALANCE SHEETS (amounts in thousands)
SEPTEMBER 30, December 31, 1993 1992 ------------------------------------- (unaudited) ASSETS HOMEBUILDING: Cash $ 16,012 $ 10,413 Homebuilding inventories: Sold homes and lots 209,681 148,846 Unsold homes, lots and land 338,936 336,338 ------------------------------------ Total inventories 548,617 485,184 Investment in/advances to unconsolidated joint ventures 23,852 34,962 Property, plant and equipment 14,206 13,865 Purchase price in excess of net assets acquired 23,897 24,671 Other assets 44,646 32,194 ------------------------------------ 671,230 601,289 ------------------------------------ FINANCIAL SERVICES: Mortgage loans held for sale, net 402,762 392,533 Mortgage-backed securities held for sale, net 217,560 241,102 Purchased servicing and administration rights, net 16,883 19,056 Other assets 64,815 47,023 ------------------------------------ 702,020 699,714 ------------------------------------ LIMITED-PURPOSE SUBSIDIARIES: Collateral for bonds payable, net 918,776 1,559,661 Other assets 12,082 20,981 ------------------------------------ 930,858 1,580,642 ------------------------------------ Net deferred taxes 33,509 3,267 Other assets 19,487 11,769 ------------------------------------ TOTAL ASSETS $ 2,357,104 $ 2,896,681 - ------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------
See notes to consolidated financial statements. 1 The Ryland Group, Inc. and subsidiaries CONSOLIDATED BALANCE SHEETS (amounts in thousands, except share data)
SEPTEMBER 30, December 31, 1993 1992 ------------------------------------- (unaudited) LIABILITIES HOMEBUILDING: Accounts payable and other liabilities $ 70,421 $ 55,837 Current portion of long-term debt 24,952 146,668 Long-term debt 380,332 170,899 ------------------------------------ 475,705 373,404 ------------------------------------ FINANCIAL SERVICES: Accounts payable and other liabilities 76,896 31,145 Short-term notes payable 560,912 587,872 ------------------------------------ 637,808 619,017 ------------------------------------ LIMITED-PURPOSE SUBSIDIARIES: Accounts payable and other liabilities 26,288 37,928 Bonds payable, net * 896,352 1,533,237 ------------------------------------ 922,640 1,571,165 ------------------------------------ Other liabilities 35,127 27,406 ------------------------------------ TOTAL LIABILITIES 2,071,280 2,590,992 ------------------------------------ STOCKHOLDERS' EQUITY Convertible preferred stock, $1 par value Authorized - 1,400,000 shares Issued - 1,162,984 shares (1,198,533 for 1992) 1,163 1,199 Common stock, $1 par value Authorized - 78,600,000 shares Issued - 15,268,014 shares (15,390,314 for 1992) 15,268 15,390 Paid-in capital 115,066 119,100 Retained earnings 175,451 196,203 Other (21,124) (26,203) ------------------------------------ TOTAL STOCKHOLDERS' EQUITY 285,824 305,689 ------------------------------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,357,104 $ 2,896,681 - ------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------ See notes to consolidated financial statements. * The 'bonds payable, net' shown in the financial statements represent obligations solely of the limited-purpose subsidiaries, which are secured by the assets of the limited-purpose subsidiaries. The bonds are not guaranteed or insured by The Ryland Group, Inc. or any of its subsidiaries.
2 The Ryland Group, Inc. and subsidiaries CONSOLIDATED STATEMENTS OF EARNINGS (unaudited) (amounts in thousands, except share data)
THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30, 1993 1992 1993 1992 --------------------------------- -------------------------------- REVENUES: Homebuilding $ 315,021 $ 305,468 $ 836,904 $ 777,438 Financial services 38,765 33,937 125,461 94,564* Limited-purpose subsidiaries 24,966 50,411 89,207 174,471 ----------------------------- ------------------------------ Total revenues 378,752 389,816 1,051,572 1,046,473* EXPENSES: Homebuilding: Cost of sales 319,519 265,894 781,618 673,088 Interest expense 6,974 4,213 19,315 12,229 Selling, general and administrative expenses 29,930 27,595 81,868 79,024 ----------------------------- ---------------------------- Total 356,423 297,702 882,801 764,341 Financial services: Interest expense 7,480 7,596 21,898 19,360 General and administrative expenses 21,471 15,786 60,603 47,870 ----------------------------- ---------------------------- Total 28,951 23,382 82,501 67,230 Limited-purpose subsidiaries : Interest expense 23,867 46,035 84,605 161,899 Other expenses 1,059 3,331 4,478 9,665 ----------------------------- ---------------------------- Total 24,926 49,366 89,083 171,564 Other expenses 3,119 4,100 11,463 11,388 ----------------------------- ---------------------------- Total expenses 413,419 374,550 1,065,848 1,014,523 Equity in losses of unconsolidated joint ventures (1,903) (560) (2,143) (757) ----------------------------- ----------------------------- (LOSS) EARNINGS BEFORE TAXES (36,570) 14,706 (16,419) 31,193 Tax (benefit) expense (14,014) 5,000 (6,156) 10,604 ----------------------------- ----------------------------- NET (LOSS) EARNINGS $ (22,556) $ 9,706 $ (10,263) $ 20,589 ----------------------------- ----------------------------- ----------------------------- ----------------------------- Preferred dividends $ 642 $ 668 $ 1,952 $ 2,015 Net (loss) earnings applicable to common stockholders $ (23,198) $ 9,038 $ (12,215) $ 18,574 NET (LOSS) EARNINGS PER COMMON SHARE: Primary $ (1.52) $ 0.58 $ (0.80) $ 1.26 Fully diluted (1.52) 0.54 (0.80) 1.18 Dividends per common share $ 0.15 $ 0.15 $ 0.45 $ 0.45 Dividends per preferred share 0.55 0.55 1.65 1.65 - ------------------------------------------------------------------------------------------------------------------------- See notes to consolidated financial statements. * THESE AMOUNTS ARE AMENDED TO CORRECT A MISPRINT RESULTING FROM THE EDGAR ELECTRONIC TRANSMISSION. THIS CONSOLIDATED STATEMENTS OF EARNINGS NOW CONFORMS TO THE CONSOLIDATED STATEMENTS OF EARNINGS AS REPORTED IN THE PAPER COPY FILED WITH THE COMMISSION ON NOVEMBER 18, 1993.
3 The Ryland Group, Inc. and subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (amounts in thousands)
Nine months ended September 30, 1993 1992 -------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net (loss) earnings $ (10,263) $ 20,589 Adjustments to reconcile net (loss) earnings to net cash used for operating activities: Depreciation and amortization 14,942 24,295 Increase in inventories (63,433) (128,178) Net change in other assets, payables and other liabilities (11,739) (4,927) Equity in losses of unconsolidated joint ventures 2,143 757 Decrease (increase) in investment in/advances to unconsolidated joint ventures 8,809 (1,158) Decrease (increase) in mortgage loans and mortgage-backed securities held for resale, net 13,313 (341,229) Gain on sale of investment (5,322) 0 -------------------------------- Net cash used for operating activities (51,550) (429,851) -------------------------------- CASH FLOWS FROM INVESTING ACTIVITIES: Net additions to property, plant and equipment (9,123) (10,323) Principal reduction of mortgage collateral 649,349 761,260 Other investing activities, net 6,726 (6,964) -------------------------------- Net cash provided by investing activities 646,952 743,973 -------------------------------- CASH FLOWS FROM FINANCING ACTIVITIES: (Decrease) increase in short-term notes payable (26,960) 314,583 Cash proceeds of long-term debt 114,080 125,894 Reduction of long-term debt (26,363) (41,372) Bond principal payments (643,151) (755,888) Common stock issuance 0 66,863 Common and preferred stock dividends 8,850 (8,950) Other financing activities, net 1,441 7,733 -------------------------------- Net cash used for financing activities (572,103) (291,137) -------------------------------- Net increase in cash 23,299 22,985 Cash at beginning of year 10,413 3,001 -------------------------------- CASH AT END OF PERIOD $ 33,712 $ 25,986 -------------------------------- -------------------------------- SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid for interest $ 131,888 $ 210,007 Cash paid for income taxes $ 26,225 $ 19,178 - ---------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------
See notes to consolidated financial statements. The Ryland Group, Inc. and subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (amounts in thousands)
Note 1. Segment Information THREE MONTHS ENDED SEPTEMBER 30, 1993 1992 -------------- -------------- Revenues: Homebuilding $ 315,021 $ 305,468 Financial services 38,768 34,849 Limited-purpose subsidiaries 25,090 50,679 Intersegment transactions (127) (1,180) -------------- -------------- Total $ 378,752 $ 389,816 -------------- -------------- -------------- -------------- Pretax (loss) earnings: Homebuilding $ (43,305) $ 7,206 Financial services 9,817 10,826 Limited-purpose subsidiaries 37 774 Corporate expenses (3,119) (4,100) -------------- -------------- Total $ (36,570) $ 14,706 -------------- -------------- -------------- --------------
NINE MONTHS ENDED SEPTEMBER 30, 1993 1992 -------------- -------------- Revenues: Homebuilding $ 836,904 $ 777,438 Financial services 125,496 95,511 Limited-purpose subsidiaries 89,612 174,506 Intersegment transactions (440) (982) -------------- -------------- Total $ 1,051,572 $ 1,046,473 -------------- -------------- -------------- -------------- Pretax (loss) earnings: Homebuilding $ (48,040) $ 12,340 Financial services 42,995 27,873 Limited-purpose subsidiaries 89 2,368 Corporate expenses (11,463) (11,388) -------------- -------------- Total $ (16,419) $ 31,193 -------------- -------------- -------------- --------------
5 The Ryland Group, Inc. and subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued (unaudited) Note 2. Consolidated Financial Statements The consolidated financial statements include the accounts of The Ryland Group, Inc. and its wholly owned subsidiaries (the company). Additionally, certain investments in joint ventures are accounted for by the equity method, as the company generally has a 50 percent or less interest in the joint ventures. Intercompany transactions have been eliminated in consolidation. The consolidated balance sheet as of September 30, 1993, and the consolidated statements of earnings for the three months and nine months ended September 30, 1993 and 1992, and the consolidated statements of cash flows for the nine months ended September 30, 1993 and 1992 have been prepared by the company, without audit. In the opinion of management, all adjustments, which include normal recurring adjustments necessary to present fairly the financial position, results of operations and cash flows at September 30, 1993, and for all periods presented, have been made. The consolidated balance sheet at December 31, 1992 has been taken from the audited financial statements as of that date. Certain amounts in the consolidated statements have been reclassified to conform to the 1993 presentation. Certain information and footnote disclosures normally included in the financial statements have been condensed or omitted. It is suggested that these financial statements be read in conjunction with the financial statements and related notes included in the company's December 31, 1992 annual report to shareholders. The results of operations for the three months and nine months ended September 30, 1993 are not necessarily indicative of the operating results for the full year. Assets presented in the financial statements are net of any valuation allowances. In calculating primary (loss) earnings per common share applicable to stockholders, the dividend requirements of the preferred shares held by the Ryland Retirement and Stock Ownership Plan Trust (the RSOP Trust) have been added to net loss or deducted from net earnings as appropriate. For the three and nine month periods ended September 30, 1992 the average shares outstanding have been increased by the common stock equivalents relating to the employee stock option and employee incentive plans. For the three and nine month periods ended September 30, 1993 these common stock equivalents were not considered as the effect would be anti-dilutive. Net earnings used in calculating fully diluted earnings per common share for the three and nine month periods ended September 30, 1992 were decreased by the amount of the additional RSOP contribution required to fund the difference between the RSOP's earnings from preferred stock dividends and the RSOP's potential earnings from 6 The Ryland Group, Inc. and subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued (unaudited) Note 2. Consolidated Financial Statements (continued) common stock dividends after an assumed conversion. Net loss used in calculating fully diluted loss per common share for the three and nine month periods ending September 30, 1993 was increased by the dividend requirements of the preferred shares held by the RSOP Trust, as an adjustment for incremental dividends on convertible preferred shares would be anti-dilutive. Fully diluted earnings per common share for the three and nine month periods ended September 30, 1992, gives effect to the common stock equivalents and the assumed conversion of the preferred stock into 1,213,038 shares and 1,220,868 shares respectively, of common stock, in accordance with the RSOP Trust Agreement. In computing fully diluted loss per common share for the three and nine month periods ended September 30, 1993, average shares outstanding have not been increased by the common stock equivalents relating to the employee stock option, employee incentive plans and the assumed conversion of the preferred stock held by the RSOP Trust as the effect would be anti-dilutive. Note 3. Contingencies Contingent liabilities may arise from the obligations incurred in the ordinary course of business, or from the usual obligations of on-site housing producers for the completion of contracts. In the opinion of management, the completion of its obligations will not have a material effect on the results of operations or financial condition of the company. Also see Part II, Item 1, Legal Proceedings. Note 4. Valuation Reserves During the third quarter of 1993, the company increased its valuation allowance for inventories from $19 million to $62 million, and increased its reserve allowance against investments in unconsolidated joint ventures from $1 million to $3 million. 7 The Ryland Group, Inc. and subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued (unaudited) Note 5. Income Taxes The company adopted Statement of Financial Accounting Standards No. 109 ("SFAS No. 109"), Accounting for Income Taxes, effective January 1, 1993. Prior to the adoption of SFAS No. 109, the company accounted for its income taxes under SFAS No. 96. The impact of the adoption of SFAS No. 109 was not material. The company's income tax benefit for the nine months ended September 30, 1993 is summarized as follows (amounts in thousands):
Current: Federal $ 19,823 State 4,263 ------------ Total current 24,086 Deferred: Federal $(24,889) State ( 5,353) ------------ Total deferred (30,242) ------------ Total benefit $( 6,156) - --------------------------------------------------------------------- - ---------------------------------------------------------------------
Components of the deferred income tax benefit for the nine months ended September 30, 1993 are as follows (amounts in thousands): Operational reserves $(20,884) Gross profit from sales reported on the installment method ( 4,761) Capitalization of costs to inventory ( 2,146) Other, net ( 1,492) Recognition of fees, discounts and hedging ( 959) ------------ Total deferred income tax benefit $(30,242) - --------------------------------------------------------------------- - ---------------------------------------------------------------------
8 The Ryland Group, Inc. and subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued (unaudited) The balance of the net deferred tax asset is primarily comprised of the following (amounts in thousands):
9/30/93 12/31/92 Deferred tax liabilities: Gross profit from sales reported on the installment method $ (4,968) $(12,559) Amortization of servicing and administration (1,922) ( 3,353) Recognition of fees, discounts and hedging ( 1,575) Other, net ( 3,428) ----------- --------- Total deferred tax liabilities $ (6,890) $(20,915) ----------- --------- Deferred tax assets: Operational reserves $ 29,920 $12,436 Employee benefit plans 2,893 3,543 Capitalization of costs to inventory 3,968 6,036 Recognition of joint venture income 2,315 2,167 Other, net 1,303 ------------ --------- Total deferred tax assets $ 40,399 $24,182 ------------ --------- Net deferred tax asset $ 33,509 $3,267 ----------- ---------- ----------- ----------
The company has determined that no valuation allowance for the deferred tax asset is required due to the prior years' tax history as well as temporary differences attributable to the current year. In the third quarter of 1993, the company revised its estimated annual effective tax rate to reflect a change in the federal statutory rate from 34% to 35% effective January 1, 1993. The actual income tax rate of 37.5% for the nine months ended September 30, 1993 differs from the statutory rate by 2.5%. This difference is primarily comprised of the effects of state income taxes, RSOP dividends, and amortization of goodwill. 9 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. THE RYLAND GROUP, INC. ---------------------- Registrant January 25, 1994 By: /s/ Alan P. Hoblitzell, Jr. - ---------------- ---------------------------------- Date Alan P. Hoblitzell, Jr., Director, Executive Vice President and Chief Financial Officer (Principal Financial Officer) January 25, 1994 By: /s/ Stephen B. Cook - ---------------- ----------------------------------- Date Stephen B. Cook, Vice President and Corporate Controller (Principal Accounting Officer) 10 -----END PRIVACY-ENHANCED MESSAGE-----