8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

April 21, 2004

Date of Report

(Date of earliest event reported)

THE RYLAND GROUP, INC.

(Exact Name of Registrant as Specified in Charter)

Maryland	001-08029	52-0849948
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

24025 Park Sorrento, Suite 400, Calabasas, California    91302
(Address of Principal Executive Offices)                                (ZIP Code)

Registrant’s telephone number, including area code: (818) 223-7500

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

TABLE OF CONTENTS

	Item 9. Regulation FD Disclosure; and
	Item 12. Results of Operations and Financial Condition
SIGNATURES
EXHIBIT INDEX
EXHIBIT 99

Item 9. Regulation FD Disclosure; and

Item 12. Results of Operations and Financial Condition

On April 21, 2004, The Ryland Group, Inc. announced financial results for the three months ended March 31, 2004. A copy of this press release is attached hereto as Exhibit 99. The information in Exhibit 99 is being furnished pursuant to both Items 9 and 12 of Form 8-K.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	THE RYLAND GROUP, INC.
Date: April 21, 2004	By:	/s/ David L. Fristoe
		David L. Fristoe
		Senior Vice President, Corporate Controller and Chief Accounting Officer

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EXHIBIT INDEX

Exhibit Number	Description
99	Press release dated April 21, 2004

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EX-99

Exhibit 99

News Release The Ryland Group, Inc.
www.ryland.com

FOR IMMEDIATE RELEASE	CONTACT:	Cathey Lowe, Senior Vice President, Finance
		Investor Relations	(818) 223-7530
		Melissa Bailey, Vice President, Communications
		Media Relations	(818) 223-7590

RYLAND REPORTS 44 PERCENT INCREASE IN FIRST-QUARTER EPS,
INCREASES EARNINGS GUIDANCE FOR 2004

CALABASAS, Calif. (April 21, 2004) — The Ryland Group, Inc. (NYSE: RYL) today announced record results for its first quarter ended March 31, 2004, including the highest first-quarter consolidated net earnings, revenues, new orders, closings, backlog and earnings per share in its history. Highlights include:

• Diluted earnings of $2.06 per share for the quarter ended March 31, 2004, representing an increase of 44.1 percent over the same period in the prior year

• Revenues of $754.6 million for the quarter ended March 31, 2004, reflecting an increase of 14.4 percent over the quarter ended March 31, 2003

• Gross profit margins from home sales of 22.3 percent for the quarter ended March 31, 2004, compared to 20.8 percent for the quarter ended March 31, 2003

• Record first-quarter new orders of 4,970, signifying a 16.7 percent increase over the quarter ended March 31, 2003, and the highest quarterly new order volume in the Company’s history

• Record first-quarter closings of 3,038, signifying a 3.0 percent increase over the quarter ended March 31, 2003

• Record backlog units of 7,773, up 16.4 percent at March 31, 2004, and dollar backlog at $2.0 billion, up 35.0 percent, the highest quarter-end backlog in the Company’s history

• The repurchase of 500,000 shares of Ryland common stock during the first quarter of 2004

• Increased earnings guidance for the fiscal year ending December 31, 2004. Earnings are expected to exceed $11.00 per share.

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RYLAND FIRST-QUARTER RESULTS

RECORD RESULTS HIGHLIGHT FIRST QUARTER

     The Company’s consolidated net earnings for the three months ended March 31, 2004, represented a first quarter record at $52.4 million, or $2.06 per diluted share, compared to consolidated net earnings of $38.2 million, or $1.43 per diluted share, for the first quarter of 2003.

     The Company finished the first quarter of 2004 in a strong financial position. Its cash and cash equivalents totaled $108.3 million, and there were no borrowings outstanding against its revolving credit facility.

     The homebuilding segment reported first-quarter pretax earnings of $85.9 million, which represents a 36.6 percent rise over the $62.9 million reported for the first quarter of 2003. The increase over the prior year was primarily attributable to a higher closing volume, higher average closing prices of homes sold and increased margins on homes closed.

     Homebuilding revenues rose $96.8 million, or 15.1 percent, to $738.0 million for the first quarter of 2004, compared to the same period in the prior year. This was the result of an 11.5 percent increase in the average closing price of a home from $217,000 for the quarter ended March 31, 2003, to $242,000 for the quarter ended March 31, 2004, as well as a 3.0 percent increase in the number of closings (3,038 homes closed in the first quarter of 2004 versus 2,950 homes closed in the same quarter of 2003). Homebuilding revenues for the first quarter of 2004 included $3.8 million from land sales, compared to $2.0 million for the first quarter of 2003, which contributed net gains of $0.4 million and $0.5 million to pretax earnings in 2004 and 2003, respectively.

     New orders of 4,970 for the first quarter of 2004 represented a 16.7 percent increase, compared to new orders of 4,260 for the first quarter of 2003. This also signifies the highest quarterly new orders in the Company’s history. The Company operated in 306 active communities at March 31, 2004, compared to 322 active communities at March 31, 2003. The Company’s backlog at the end of the first quarter of 2004 increased to 7,773 outstanding contracts from 6,678 outstanding contracts at March 31, 2003, a rise of 16.4 percent. The dollar value of the Company’s backlog at March 31, 2004, was $2.0 billion, or an increase of 35.0 percent over that of March 31, 2003.

     Gross profit margins from home sales averaged 22.3 percent in the first quarter of 2004, compared to 20.8 percent in the first quarter of 2003. Selling, general and administrative expenses, as a percentage of revenue, were 10.6 percent in the first quarter of 2004 versus 10.8 percent for the same period in 2003. The Company capitalized all interest incurred during the first quarter of 2004 due to increased development activity in a greater number of new communities during the period with no incremental debt. This compares to interest expense of $1.2 million in the first quarter of 2003. The pretax homebuilding margin was 11.6 percent in the first quarter of 2004, compared to 9.8 percent in the first quarter of 2003.

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RYLAND FIRST-QUARTER RESULTS

     Corporate expenses were $11.0 million for the first quarter of 2004, compared to $11.7 million for the same period in the prior year.

     The Company’s financial services segment, which includes Ryland Mortgage Company and its title, escrow and insurance services, reported pretax earnings of $10.3 million for the first quarter of 2004, compared to $12.4 million for the same period last year. This decrease was attributable to a more competitive marketplace and an increase in less profitable adjustable rate mortgage product. The number of mortgage originations declined by approximately 1.2 percent during the first quarter of 2004. The capture rate of mortgages originated for homebuilding customers was 84.3 percent in the first quarter of 2004, compared to 85.2 percent in the first quarter of 2003.

STOCK REPURCHASE PROGRAM

     The Company repurchased 500,000 shares of its common stock during the first quarter of 2004. At March 31, 2004, the Company had Board authorization to purchase an additional 1.4 million shares.

UPDATED 2004 EARNINGS GUIDANCE

     The Company anticipates that earnings for the fiscal year ending December 31, 2004, will exceed $11.00 per share.

     With headquarters in Southern California, Ryland is one of the nation’s largest homebuilders and a leading mortgage-finance company. The Company currently operates in 27 markets across the country and has built more than 220,000 homes and financed more than 190,000 mortgages since its founding in 1967. Ryland is a Fortune 500 company listed on the New York Stock Exchange 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” within the meaning of the Private Securities Litigation Reform Act of 1995, and may qualify for the safe harbor 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,” “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.

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RYLAND FIRST-QUARTER RESULTS

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. 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 in interest rates, inflation, changes in consumer 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;

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

• 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); or

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

# # #

Five financial-statement pages follow.

CONSOLIDATED STATEMENTS OF EARNINGS (unaudited)
The Ryland Group, Inc. and subsidiaries
(in thousands, except share data)

	Three months ended March 31,
	2004		2003
REVENUES
Homebuilding	$	738,044	$	641,167
Financial services		16,555		18,509
TOTAL REVENUES		754,599		659,676
EXPENSES
Homebuilding
Cost of sales		573,809		507,835
Selling, general and administrative		78,328		69,305
Interest		—		1,165
Total homebuilding expenses		652,137		578,305
Financial services
General and administrative		6,004		5,615
Interest		283		484
Total financial services expenses		6,287		6,099
Corporate expenses		10,954		11,653
TOTAL EXPENSES		669,378		596,057
Earnings before taxes		85,221		63,619
Tax expense		32,810		25,448
NET EARNINGS	$	52,411	$	38,171
NET EARNINGS PER COMMON SHARE
Basic	$	2.19	$	1.52
Diluted	$	2.06	$	1.43
AVERAGE COMMON SHARES OUTSTANDING
Basic		23,973,414		25,156,209
Diluted		25,487,991		26,632,814

CONSOLIDATED BALANCE SHEETS
The Ryland Group, Inc. and subsidiaries
(in thousands, except share data)

	March 31,		December 31,
	2004		2003
	(unaudited)
ASSETS
Homebuilding
Cash and cash equivalents	$	104,548	$	314,518
Housing inventories
Homes under construction		847,625		734,280
Land under development and improved lots		632,880		602,504
Consolidated inventory not owned		124,548		59,868
Total inventories		1,605,053		1,396,652
Property, plant and equipment		43,702		40,853
Purchase price in excess of net assets acquired		18,185		18,185
Other		53,886		59,432
		1,825,374		1,829,640
Financial Services
Cash and cash equivalents		3,745		2,186
Mortgage-backed securities and notes receivable		24,710		26,260
Other		22,135		39,824
		50,590		68,270
Other Assets
Net deferred taxes		34,880		37,443
Other		86,161		72,237
TOTAL ASSETS		1,997,005		2,007,590
LIABILITIES
Homebuilding
Accounts payable and other liabilities		334,221		366,131
Long-term debt		540,500		540,500
		874,721		906,631
Financial Services
Accounts payable and other liabilities		15,673		23,376
Short-term notes payable		24,607		26,254
		40,280		49,630
Other Liabilities		138,474		170,136
TOTAL LIABILITIES		1,053,475		1,126,397
MINORITY INTEREST		91,832		56,651
STOCKHOLDERS’ EQUITY
Common stock, $1.00 par value:
Authorized — 80,000,000 shares
Issued — 24,077,425 shares (24,276,247 for 2003)		24,077		24,276
Retained earnings		826,539		799,135
Accumulated other comprehensive income		1,082		1,131
TOTAL STOCKHOLDERS’ EQUITY		851,698		824,542
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,997,005	$	2,007,590
Stockholders’ equity per common share	$	35.37	$	33.97

SEGMENT INFORMATION (unaudited)
The Ryland Group, Inc. and subsidiaries
(in thousands)

	Three months ended March 31,
	2004			2003
Earnings before taxes
Homebuilding	$	85,907		$	62,862
Financial services		10,268			12,410
Corporate		(10,954	)		(11,653	)
Total	$	85,221		$	63,619

HOMEBUILDING OPERATIONAL DATA (unaudited)
The Ryland Group, Inc. and subsidiaries

	North		Texas		Southeast		West		Total
For the three months ended March 31,
New Orders (units)
2004		1,413		1,026		1,445		1,086		4,970
2003		1,181		1,011		1,250		818		4,260
Closings (units)
2004		902		523		911		702		3,038
2003		961		629		810		550		2,950
Average Closing Price (in thousands)
2004	$	268	$	171	$	224	$	283	$	242
2003	$	249	$	159	$	201	$	249	$	217
Outstanding Contracts at March 31,
Units
2004		2,249		1,312		2,757		1,455		7,773
2003		1,966		1,341		2,231		1,140		6,678
Dollars (in millions)
2004	$	686	$	223	$	649	$	462	$	2,020
2003	$	498	$	214	$	470	$	315	$	1,497
Average Price (in thousands)
2004	$	305	$	170	$	236	$	317	$	260
2003	$	253	$	159	$	211	$	276	$	224

FINANCIAL SERVICES SUPPLEMENTAL INFORMATION (unaudited)
The Ryland Group, Inc. and subsidiaries
($s in thousands)

	Three months ended March 31,
	2004			2003
RESULTS OF OPERATIONS
Revenues
Net gains on sales of mortgages and mortgage servicing rights	$	9,890		$	11,553
Title/escrow/insurance		4,520			3,637
Net origination fees		1,174			1,755
Interest
Mortgage-backed securities and notes receivable		771			1,263
Other		200			244
Total interest		971			1,507
Other		—			57
Total revenues		16,555			18,509
Expenses
General and administrative		6,004			5,615
Interest		283			484
Total expenses		6,287			6,099
Pretax earnings	$	10,268		$	12,410
OPERATIONAL DATA
Retail operations:
Originations (units)		2,395			2,423
Ryland Homes closings as a percentage of total closings		99.1	%		98.3	%
Ryland Homes origination capture rate		84.3	%		85.2	%
Investment operations:
Mortgage-backed securities and notes receivable average balance	$	24,361		$	38,728