The Ryland Group (NYSE:RYL), Calabasas, Calif., after market close Wednesday reported a net loss of $14.3 million (-$0.33 per diluted share) for the first quarter ended March 31, compared to a consolidated net loss of $75.3 million (-$1.76 per diluted share), for the same period in 2009. The loss included impairments and write-downs of $4.6 million, compared to $49.4 million for the same period in 2009.
Analysts were expecting a loss of $0.36 per share. Shares of Ryland were down 5.2% at $23.20 shortly after the earnings announcement.
Home building reported a pre-tax loss of $9.4 million for the quarter as home-building revenues decreased 6.6% to $241.9 million. Closings fell 6.2% to 984 units and the average closing price declined 0.8% to $245,000 from $247,000 for the same period in 2009.
New orders also were down, by 13.4%, to 1,167 units, the result of a 29.9% cut in active community count. The absorption rate improved to 2.2 homes per community compared to 1.7 for last year's first quarter. Still, new order dollars declined 12.7% to $276.1 million. The cancellation rate fell to 20.7% from 24.1%.
Backlog at the end of the first quarter of 2010 rose 3.1% to 1,915 units with a dollar value of $470.3 million, up 1.2% from March 31, 2009.
Housing gross profit margins fell to 13.9%, excluding inventory and other valuation adjustments compared to 14.2% for the quarter ended December 31,2009 but were up from 6.0% for the quarter ended March 31, 2009. Including inventory and other valuation adjustments, housing gross profit margins averaged 12.2% for the first quarter of 2010, compared to negative 13.1% percent for the same period in 2009.
Sales incentives and price concessions averaged 11.4% for the quarter, down from 18% for the same period in 2009. Selling, general and administrative expense totaled 13.3% of homebuilding revenues for the first quarter, down$8.1 million from 15.6% for the prior-year quarter.
The financial services segment reported pretax earnings of $472,000, compared to a pretax loss of $1.6 million for the same period in 2009.
The company did not provide an accounting of owned and optioned lots in its earnings release but stated that its controlled lot count increased more tha 10% from the previous quarter.
Ryland ended the quarter with cash, cash equivalents and marketable securities of $820.6 million. It listed $848.4 million in debt. The net debt-to-capital ratio (calculated as debt, net of cash, cash equivalents and marketable securities, divided by the sum of debt and total stockholders' equity, net of cash, cash equivalents and marketablesecurities) was 4.7% at March 31, 2010.
In April 2010, the Company offered to purchase, in a tender offer and redemption, up to $300.0 million aggregate principal amount of its senior notes due 2012, 2013 and 2015. In addition, it issued $300.0 million of new 6.6% senior notes due May 2020.