At a Bank of America investor conference Thursday, the management team at The Ryland Group had one more positive thing to chirp about than their short tail in land, low debt levels, and strong balance sheet. Through the downturn, the company has gained market share in 13 of its 21 geographic markets.

Executive vice president and COO Larry Nicholson attributed some of that growth to smaller, private builders going out of business, but he commended the company's sales staffs for pushing hard to close sales.

"It's a grind every day," he said.

With the company's store count down, sales teams have been converting traffic to sales at higher rates than normal, which Nicholson said generally was between 5% and 8%. Nicholson didn't provide any comment on the amount of traffic flowing the company's sales centers, but a May neighborhood survey by FTN Midwest analyst Jay McCanless indicated that foot traffic was steady or increased at all the Ryland communities surveyed. Moreover, those same respondents also indicated that they expected future promotions like reduced costs on options or cash toward closing to increase in the future.

"We compete on price," stated Gordon Milne, Ryland's CFO and executive vice president, during the conference.

Nicholson said he imagined that the company could sustain its organic growth going forward. "If we stay focused on what we've done in the past," he said, "I think we can continue to take share."

He pointed to Atlanta as the model for taking market share in the future. National builders controlled just 20% of the market. But with business failures taking out a yet-to-be-determined portion of the roughly 2,000 private builders in the market, public builders like Ryland can gain traction, he said.

Although Nicholson applauded the sales teams for their efforts in getting buyers "to the finish line," he acknowledged that company's sales strategy is also playing a role in the company's biggest inefficiency right now: controlling its SG&A. In 1Q2008, Ryland's SG&A costs were 16% of revenues.

"You still have to spend money to get people to your sales centers," he said.

Management already has aggressively cut headcount, reducing it by nearly half from its peak; today the payroll has roughly 1,700 employees. But Milne said that there was some lag on the severance costs associated with the downsizing, which was contributing to the high overhead costs. However, he added there was still considerable work to be done to strip out more costs.

"We think we need to be at 10% to survive in this business," Milne said.

To that end, Milne alluded to several cost-cutting initiatives underway and said that he expected to SG&A to be back in line at 11% by 4Q2008.