The Ryland Group (NYSE:RYL) reported a net loss of $73.7 million (-$1.70 per share) for the second quarter ended June 30 as revenues, closings, prices and new orders all declined. Analysts were expecting a loss of $1.04 per share.
The loss, which compared to a loss of $241.6 million (-$5.70 per share) for last year's second quarter, included pretax charges for inventory and other valuation adjustments and write-offs that totaled $47.3 million, down from $180.4 million for the same period in 2008.
Home building revenues decreased 44.6% to $261.6 million as closings dropped 40.3% to 1,091 units and the average price fell 5.5% to $240,000. Home building revenues for the second quarter of 2009 included $95,000 from land sales, which contributed net pretax gains of $22,000.
New orders were down 16.1% to 1,716 units, and new order dollars declined 19.6% to $404.5 million, both compared to last year's second quarter.Inventory of houses started and unsold decreased by 29.9% to 448 units at June 30, 2009, from 639 units at December 31, 2008.
Backlog at the end of the second quarter of 2009 increased 33.7% to 2,482 units from first-quarter end but was down 33.0% from the comparable quarter last year. The dollar value of the company's backlog at quarter's end was up 30.8% from first quarter but down 36.4% from June 30, 2008.
Housing gross profit margins averaged 7.8%, excluding inventory and other valuation adjustments, versus 6.0% for the quarter ended March 31, 2009 and 12.5% for the quarter ended June 30, 2008. Including inventory and other valuation adjustments, housing gross profit margins averaged negative 10% for the second quarter of 2009, compared to negative 18.2% for the same period in 2008.
SG&A, including severance and model abandonment charges, was 14.4% of revenue for the quarter, up from 13.8% for the same period in 2008. Minus severance and model abandonment charges of $1.7 million, SG&A was 13.8%, up from 12.9% for last year's second quarter.
The financial services segment reported pretax earnings of $1.1 million, compared to pretax earnings of $5.5 million for the same period in 2008.This decrease was primarily attributable to a 39.1% decline in the number of mortgages originated, partially offset by increased net gains on mortgages, on a per-unit basis, due to product mix.
Ryland generated $11.2 million in cash for the quarter and ended with cash, cash equivalents and marketable securities totaling $712.9 million. It retired $70.6 million of its senior notes during the quarter and issued $230.0 million of 8.4% senior notes due May 2017. Net debt-to-capital ratio was 20.4% at June 30, 2009. It also terminated its $200 million revolving credit facility during the quarter.
The company did not comment on the earnings. Shares of Ryland were down 5% at $19.45 in after-hours trading after closing down 2% on the day Wednesday.