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 24, 2013
Date of Report
(Date of earliest event reported)
THE RYLAND GROUP, INC.
(Exact Name of Registrant as Specified in Charter)
Maryland |
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001-08029 |
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52-0849948 |
(State or Other Jurisdiction of |
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(Commission File Number) |
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(IRS Employer Identification No.) |
3011 Townsgate Road, Suite 200, Westlake Village, CA 91361-3027
(Address of Principal Executive Offices) (ZIP Code)
Registrants telephone number, including area code: (805) 367-3800
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:
[ ] Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition
On April 24, 2013, The Ryland Group, Inc. announced financial results for the three months ended March 31, 2013. A copy of this press release is attached hereto as Exhibit 99. The information in Exhibit 99 is being furnished pursuant to Item 2.02 of Form 8-K.
The information in this report, including Exhibit 99 attached hereto, shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liabilities of that Section, and shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit 99 Press release dated April 24, 2013
SIGNATURES
Pursuant to the requirements of the Exchange Act, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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THE RYLAND GROUP, INC. | ||
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Date: April 24, 2013 |
By: |
/s/ David L. Fristoe |
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David L. Fristoe |
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Senior Vice President, Corporate | |
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Controller and Chief Accounting Officer |
EXHIBIT INDEX
Exhibit Number |
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Description |
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99 |
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Press release dated April 24, 2013 |
Exhibit 99
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News Release |
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The Ryland Group, Inc. www.ryland.com |
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FOR IMMEDIATE RELEASE |
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CONTACT: |
Drew Mackintosh, VP, Investor Relations and |
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Corporate Communications (805) 367-3722 |
RYLAND REPORTS RESULTS FOR THE FIRST QUARTER OF 2013
WESTLAKE VILLAGE, Calif. (April 24, 2013) The Ryland Group, Inc. (NYSE: RYL), today announced results for its quarter ended March 31, 2013. Items of note included:
· Net income from continuing operations totaled $22.0 million, or $0.43 per diluted share, for the quarter ended March 31, 2013, compared to a net loss of $3.0 million, or $0.07 per diluted share, for the same period in 2012;
· Revenues totaled $374.7 million for the quarter ended March 31, 2013, representing a 73.6 percent increase from $215.9 million for the quarter ended March 31, 2012;
· New orders increased 54.4 percent to 2,051 units for the first quarter of 2013 from 1,328 units for the first quarter of 2012. New order dollars rose 75.3 percent to $605.1 million for the first quarter of 2013 from $345.1 million for the same period in 2012;
· Average monthly sales absorption rate was 2.8 homes per community for the quarter ended March 31, 2013, versus 2.1 homes per community for the quarter ended March 31, 2012;
· Closings increased 60.4 percent to 1,307 units for the quarter ended March 31, 2013, compared to 815 units for the same period in the prior year;
· Backlog rose 57.2 percent to 3,135 units at March 31, 2013, from 1,994 units at March 31, 2012;
· Active communities increased 19.6 percent to 250 communities at March 31, 2013, from 209 communities at March 31, 2012;
· Average closing price increased 8.2 percent to $277,000 for the quarter ended March 31, 2013, from $256,000 for the same period in 2012;
· Housing gross profit margin was 19.4 percent for the first quarter of 2013, compared to 17.5 percent for the first quarter of 2012;
· Selling, general and administrative expense totaled 13.8 percent of homebuilding revenues for the first quarter of 2013, compared to 17.8 percent for the first quarter of 2012;
· Cash, cash equivalents and marketable securities totaled $614.6 million at March 31, 2013, with no outstanding borrowings against the Companys $75.0 million financial services credit facility; and
· Net debt-to-capital ratio was 49.0 percent at March 31, 2013, compared to 50.8 percent at December 31, 2012.
-more-
RYLAND FIRST-QUARTER RESULTS
RESULTS FOR THE FIRST QUARTER OF 2013
For the quarter ended March 31, 2013, the Company reported net income from continuing operations of $22.0 million, or $0.43 per diluted share, compared to a net loss of $3.0 million, or $0.07 per diluted share, for the same period in 2012. The Company had pretax charges that totaled $213,000 primarily related to preacquisition feasibility cost write-offs for the quarter ended March 31, 2013, compared to pretax charges that totaled $2.1 million primarily related to inventory valuation adjustments for the same period in 2012.
The homebuilding segments reported pretax earnings of $23.8 million for the first quarter of 2013, compared to pretax earnings of $1.1 million for the same period in 2012. This increase was primarily due to a rise in closing volume; higher housing gross profit margin, including lower inventory valuation adjustments; and a reduced selling, general and administrative expense ratio.
Homebuilding revenues increased 73.5 percent to $363.5 million for the first quarter of 2013, compared to $209.5 million for the same period in 2012. This rise in homebuilding revenues was primarily attributable to a 60.4 percent increase in closings that totaled 1,307 units for the quarter ended March 31, 2013, compared to 815 units for the same period in the prior year, as well as to an 8.2 percent higher average closing price, which was $277,000 for the first quarter of 2013, versus $256,000 for the same period in 2012. Homebuilding revenues for the first quarter of 2013 included $2.1 million from land sales, which resulted in pretax earnings of $946,000, compared to homebuilding revenues for the first quarter of 2012 that included $712,000 from land sales, which resulted in pretax earnings of $299,000.
New orders increased 54.4 percent to 2,051 units for the quarter ended March 31, 2013, compared to new orders of 1,328 units for the same period in 2012. The Company had an average monthly sales absorption rate of 2.8 homes per community for the quarter ended March 31, 2013, versus 2.1 homes per community for the quarter ended March 31, 2012, and an average cancellation rate of 15.4 percent for the quarter ended March 31, 2013, versus 18.0 percent for the same period in 2012. For the first quarter of 2013, new order dollars increased 75.3 percent to $605.1 million from $345.1 million for the first quarter of 2012. At March 31, 2013, backlog increased 57.2 percent to 3,135 units from 1,994 units at March 31, 2012. At the end of the first quarter of 2013, the dollar value of the Companys backlog was $907.1 million, reflecting a 75.1 percent rise from the end of the first quarter of the prior year. For the quarter ended March 31, 2013, there were 58 new orders and 44 closings related to the acquisition of Trend Homes in December 2012.
Housing gross profit margin was 19.4 percent for the quarter ended March 31, 2013, compared to 17.5 percent for the quarter ended March 31, 2012. This improvement in housing gross profit margin was primarily attributable to lower inventory valuation adjustments; higher leverage of direct overhead expense due to an increase in the number of homes delivered and to a higher average closing price; and a relative decline in direct construction costs, partially offset by higher land costs. For the first quarter of 2013, sales incentives and price concessions totaled 7.9 percent of housing revenues, compared to 10.9 percent for the same period in 2012.
-more-
RYLAND FIRST-QUARTER RESULTS
Selling, general and administrative expense totaled 13.8 percent of homebuilding revenues for the first quarter of 2013, compared to 17.8 percent for the first quarter of 2012. This decrease in the selling, general and administrative expense ratio was primarily attributable to higher leverage resulting from increased revenues.
The homebuilding segments recorded $3.8 million of interest expense during the first quarter of 2013, compared to $3.6 million during the first quarter of 2012. This increase in interest expense from the first quarter of 2012 was primarily due to interest incurred on additional senior notes issued in 2012, partially offset by the capitalization of a greater amount of interest incurred during the first quarter of 2013, which resulted from a higher level of inventory under development.
During the first quarter of 2013, the Company used $8.2 million of cash for operating activities, provided $21.5 million of cash from investing activities and provided $10.9 million of cash from financing activities.
For the quarter ended March 31, 2013, the financial services segment reported pretax earnings of $4.3 million, compared to $645,000 for the same period in 2012. This improvement was primarily attributable to increases in locked loan pipeline and origination volumes and to higher title income, partially offset by a rise in indemnification and personnel expenses.
-more-
RYLAND FIRST-QUARTER RESULTS
Headquartered in Southern California, Ryland is one of the nations largest homebuilders and a leading mortgage-finance company. Since its founding in 1967, Ryland has built more than 300,000 homes and financed more than 250,000 mortgages. The Company currently operates in 14 states across the country and is listed on the New York Stock Exchange under the symbol RYL. For more information, please visit 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 Companys 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, could, 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.
These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of the Companys 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 herein are based are subject to risks and uncertainties which include, among others:
· economic changes nationally or in the Companys local markets, including volatility and increases in interest rates, the impact of, and changes in, governmental stimulus, tax and deficit reduction programs, inflation, changes in consumer demand and confidence levels and the state of the market for homes in general;
· changes and developments in the mortgage lending market, including revisions to underwriting standards for borrowers and lender requirements for originating and holding mortgages, changes in government support of and participation in such market, and delays or changes in terms and conditions for the sale of mortgages originated by the Company;
· the availability and cost of land and the future value of land held or under development;
· increased land development costs on projects under development;
· shortages of skilled labor or raw materials used in the production of homes;
· increased prices for labor, land and materials used in the production of homes;
· increased competition;
· 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 or other factors;
· 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, the environment and the residential mortgage industry);
· delays in obtaining approvals from applicable regulatory agencies and others in connection with the Companys communities and land activities;
· changes in the Companys effective tax rate and assumptions and valuations related to its tax accounts;
· the risk factors set forth in the Companys most recent Annual Report on Form 10-K; and
· other factors over which the Company has little or no control.
###
Four financial-statement pages to follow.
THE RYLAND GROUP, INC. and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
(in thousands, except share data)
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Three months ended March 31, |
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2013 |
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2012 |
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REVENUES |
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Homebuilding |
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$ |
363,501 |
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$ |
209,535 |
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Financial services |
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11,179 |
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6,334 |
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TOTAL REVENUES |
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374,680 |
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215,869 |
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EXPENSES |
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Cost of sales |
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292,336 |
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172,690 |
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Selling, general and administrative |
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50,226 |
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37,388 |
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Financial services |
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6,858 |
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5,689 |
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Interest |
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3,762 |
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3,569 |
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TOTAL EXPENSES |
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353,182 |
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219,336 |
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OTHER INCOME |
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Gain from marketable securities, net |
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705 |
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446 |
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TOTAL OTHER INCOME |
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705 |
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446 |
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Income (loss) from continuing operations before taxes |
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22,203 |
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(3,021 |
) | ||
Tax expense |
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199 |
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- |
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NET INCOME (LOSS) FROM CONTINUING OPERATIONS |
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22,004 |
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(3,021 |
) | ||
Income (loss) from discontinued operations, net of taxes |
|
113 |
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(2,087 |
) | ||
NET INCOME (LOSS) |
|
$ |
22,117 |
|
$ |
(5,108 |
) |
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NET INCOME (LOSS) PER COMMON SHARE |
|
|
|
|
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Basic |
|
|
|
|
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Continuing operations |
|
$ |
0.48 |
|
$ |
(0.07 |
) |
Discontinued operations |
|
0.00 |
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(0.04 |
) | ||
Total |
|
0.48 |
|
(0.11 |
) | ||
Diluted |
|
|
|
|
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Continuing operations |
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0.43 |
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(0.07 |
) | ||
Discontinued operations |
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0.00 |
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(0.04 |
) | ||
Total |
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$ |
0.43 |
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$ |
(0.11 |
) |
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|
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|
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AVERAGE COMMON SHARES |
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|
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|
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OUTSTANDING |
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|
|
|
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Basic |
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45,434,996 |
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44,473,870 |
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Diluted |
|
53,361,805 |
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44,473,870 |
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THE RYLAND GROUP, INC. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
|
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March 31, 2013 |
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December 31, 2012 |
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(Unaudited) |
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ASSETS |
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Cash, cash equivalents and marketable securities |
|
|
|
|
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Cash and cash equivalents |
|
$ |
179,917 |
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$ |
155,692 |
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Restricted cash |
|
71,604 |
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70,893 |
| ||
Marketable securities, available-for-sale |
|
363,058 |
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388,020 |
| ||
Total cash, cash equivalents and marketable securities |
|
614,579 |
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614,605 |
| ||
Housing inventories |
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|
|
|
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Homes under construction |
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546,142 |
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459,269 |
| ||
Land under development and improved lots |
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570,095 |
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573,975 |
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Inventory held-for-sale |
|
7,182 |
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4,684 |
| ||
Consolidated inventory not owned |
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33,944 |
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39,490 |
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Total housing inventories |
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1,157,363 |
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1,077,418 |
| ||
Property, plant and equipment |
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21,139 |
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20,409 |
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Mortgage loans held-for-sale |
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57,568 |
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107,950 |
| ||
Other |
|
113,924 |
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111,057 |
| ||
Assets of discontinued operations |
|
536 |
|
2,480 |
| ||
TOTAL ASSETS |
|
1,965,109 |
|
1,933,919 |
| ||
|
|
|
|
|
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LIABILITIES |
|
|
|
|
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Accounts payable |
|
117,135 |
|
124,797 |
| ||
Accrued and other liabilities |
|
156,807 |
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147,358 |
| ||
Debt |
|
1,133,160 |
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1,134,468 |
| ||
Liabilities of discontinued operations |
|
1,258 |
|
1,536 |
| ||
TOTAL LIABILITIES |
|
1,408,360 |
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1,408,159 |
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|
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EQUITY |
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STOCKHOLDERS EQUITY |
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Preferred stock, $1.00 par value: |
|
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Authorized10,000 shares Series A Junior |
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|
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Participating Preferred, none outstanding |
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- |
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- |
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Common stock, $1.00 par value: |
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Authorized199,990,000 shares |
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Issued45,688,050 shares at March 31, 2013 |
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|
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|
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(45,175,053 shares at December 31, 2012) |
|
45,688 |
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45,175 |
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Retained earnings |
|
494,464 |
|
458,669 |
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Accumulated other comprehensive (loss) income |
|
(32 |
) |
92 |
| ||
TOTAL STOCKHOLDERS EQUITY |
|
|
|
|
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FOR THE RYLAND GROUP, INC. |
|
540,120 |
|
503,936 |
| ||
NONCONTROLLING INTEREST |
|
16,629 |
|
21,824 |
| ||
TOTAL EQUITY |
|
556,749 |
|
525,760 |
| ||
TOTAL LIABILITIES AND EQUITY |
|
$ |
1,965,109 |
|
$ |
1,933,919 |
|
THE RYLAND GROUP, INC. and Subsidiaries
SEGMENT INFORMATION (Unaudited)
|
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Three months ended March 31, |
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2013 |
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2012 |
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EARNINGS (LOSS) BEFORE TAXES (in thousands) |
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|
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Homebuilding |
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|
|
|
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North |
|
$ |
3,383 |
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$ |
(1,622 |
) |
Southeast |
|
7,340 |
|
891 |
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Texas |
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5,050 |
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3,525 |
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West |
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7,991 |
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(1,726 |
) | ||
Financial services |
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4,321 |
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645 |
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Corporate and unallocated |
|
(5,882 |
) |
(4,734 |
) | ||
Discontinued operations |
|
113 |
|
(2,087 |
) | ||
Total |
|
$ |
22,316 |
|
$ |
(5,108 |
) |
NEW ORDERS |
|
|
|
|
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Units |
|
|
|
|
| ||
North |
|
640 |
|
411 |
| ||
Southeast |
|
704 |
|
417 |
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Texas |
|
389 |
|
373 |
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West |
|
318 |
|
127 |
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Discontinued operations |
|
1 |
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29 |
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Total |
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2,052 |
|
1,357 |
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Dollars (in millions) |
|
|
|
|
| ||
North |
|
$ |
192 |
|
$ |
116 |
|
Southeast |
|
177 |
|
93 |
| ||
Texas |
|
117 |
|
96 |
| ||
West |
|
119 |
|
40 |
| ||
Discontinued operations |
|
- |
|
6 |
| ||
Total |
|
$ |
605 |
|
$ |
351 |
|
CLOSINGS |
|
|
|
|
| ||
Units |
|
|
|
|
| ||
North |
|
328 |
|
224 |
| ||
Southeast |
|
439 |
|
265 |
| ||
Texas |
|
271 |
|
244 |
| ||
West |
|
269 |
|
82 |
| ||
Discontinued operations |
|
8 |
|
33 |
| ||
Total |
|
1,315 |
|
848 |
| ||
Average closing price (in thousands) |
|
|
|
|
| ||
North |
|
$ |
291 |
|
$ |
277 |
|
Southeast |
|
239 |
|
214 |
| ||
Texas |
|
284 |
|
259 |
| ||
West |
|
313 |
|
330 |
| ||
Discontinued operations |
|
312 |
|
210 |
| ||
Total |
|
$ |
277 |
|
$ |
254 |
|
OUTSTANDING CONTRACTS |
|
March 31, | |||||
Units |
|
2013 |
|
2012 |
| ||
North |
|
931 |
|
607 |
| ||
Southeast |
|
1,146 |
|
673 |
| ||
Texas |
|
595 |
|
562 |
| ||
West |
|
463 |
|
152 |
| ||
Discontinued operations |
|
- |
|
29 |
| ||
Total |
|
3,135 |
|
2,023 |
| ||
Dollars (in millions) |
|
|
|
|
| ||
North |
|
$ |
285 |
|
$ |
175 |
|
Southeast |
|
284 |
|
147 |
| ||
Texas |
|
175 |
|
145 |
| ||
West |
|
163 |
|
51 |
| ||
Discontinued operations |
|
- |
|
6 |
| ||
Total |
|
$ |
907 |
|
$ |
524 |
|
Average price (in thousands) |
|
|
|
|
| ||
North |
|
$ |
306 |
|
$ |
288 |
|
Southeast |
|
247 |
|
219 |
| ||
Texas |
|
294 |
|
257 |
| ||
West |
|
353 |
|
336 |
| ||
Discontinued operations |
|
- |
|
219 |
| ||
Total |
|
$ |
289 |
|
$ |
259 |
|
THE RYLAND GROUP, INC. and Subsidiaries
FINANCIAL SERVICES SUPPLEMENTAL INFORMATION (Unaudited)
(in thousands, except origination data)
|
|
Three months ended March 31, |
| ||||
RESULTS OF OPERATIONS |
|
2013 |
|
2012 |
| ||
REVENUES |
|
|
|
|
| ||
Income from origination and sale of mortgage loans, net |
|
$ |
8,986 |
|
$ |
4,624 |
|
Title, escrow and insurance |
|
1,762 |
|
1,264 |
| ||
Interest and other |
|
431 |
|
446 |
| ||
TOTAL REVENUES |
|
11,179 |
|
6,334 |
| ||
EXPENSES |
|
6,858 |
|
5,689 |
| ||
PRETAX EARNINGS |
|
$ |
4,321 |
|
$ |
645 |
|
|
|
|
|
|
| ||
OPERATIONAL DATA |
|
|
|
|
| ||
|
|
|
|
|
| ||
Retail operations: |
|
|
|
|
| ||
Originations (units) |
|
714 |
|
552 |
| ||
Ryland Homes originations as a |
|
|
|
|
| ||
percentage of total originations |
|
100.0 |
% |
99.8 |
% | ||
Ryland Homes origination capture rate |
|
62.4 |
% |
72.5 |
% | ||
|
|
|
|
|
| ||
OTHER CONSOLIDATED SUPPLEMENTAL INFORMATION (Unaudited) |
|
|
|
|
| ||
(in thousands) |
|
Three months ended March 31, |
| ||||
|
|
2013 |
|
2012 |
| ||
Interest incurred |
|
$ |
16,805 |
|
$ |
14,181 |
|
Interest capitalized during the period |
|
12,894 |
|
10,253 |
| ||
Amortization of capitalized interest included in cost of sales |
|
11,114 |
|
7,819 |
| ||
Depreciation and amortization |
|
4,040 |
|
3,001 |
|