This weekend, Ryland Group will conduct a national 'Purchase Price Advantage Sales Event,' a three-day promotion offering buyers in its 28 markets significant price reductions, 50 percent savings on options, and a 4.99 percent 30-year fixed-rate mortgage if the loan is financed through Ryland's mortgage subsidiary. Buyers could also register on Ryland's web site to qualify for an additional 10 percent saving on options.
What's unique about this promotion, which runs from January 25 through 28, is that Ryland will guarantee the price and interest rate of a home and mortgage through closing, even if either goes up after the customer signs a contract. The sales event will take place only days after the Calabasas, Calif.-based builder reported a 36.4 percent drop in its home building revenue for the year ended December 31, to $3 billion; and a 33 percent decline in its closings to 10,319 units. Its new orders for the year were off 19.3 percent to 8,982, and its backlog fell 31.8 percent to $2,869 units; the value of that backlog was down 39.3 percent to $786 million.
Ryland ended this year with a $333.5 million loss in net income, compared to a $359.9 million net gain in the same period a year ago. It wrote off $583.4 million in inventory valuations adjustments.
During the fourth quarter of 2007, Ryland lost $201.9 million, or $4.80 per share, and its home building revenue dropped 37.2 percent to $828.8 million. Its closings for the quarter were off 29.6 percent, to 3,061 units, and Ryland wrote off $242.7 million in inventory adjustments, which caused its gross margins for the quarter to fall to a negative 15.3 percent. Despite these numbers, Ryland was able to report some good news. During the quarter its cash flow of $312.2 million was partly used to reduce its debt by $144.2 million. Its inventory of unsold houses also dropped to 823 units, which was 52.8 percent less than the same quarter a year ago.