Whether the housing industry dips next year or sets new records, top executives of both public and privately owned big builders are focused on strengthening their balance sheets and building their businesses. We put a single question to them: What major initiatives will you have in 2004 to improve your company's financial standing and its perception among investors? Here's what they told us.

Bruce Gross
Vice President, CFO
Lennar Corp.
Miami, Fla.

"We'll continue our dual marketing strategy, which is made up of our 'Everything's Included' and 'Design Studio' programs. This dual approach helps increase absorption and market share and helps us operate more efficiently. We plan to implement this strategy in all our markets.

We'll also focus on reducing costs while improving the quality of our homes and look for additional products in our financial services company so that we can offer a full line of services to our customers while improving our return on capital.

As far as Wall Street goes, we want to encourage investors to recognize that our financial structure has changed significantly from what it was, say, 10 years ago. Today, our capital structure is diversified with longer-term maturities, and the operating focus of the company is to deliver sustainable high returns on capital."

Leldon Echols
Executive Vice President, CFO
Centex Corp.
Dallas, Texas

"While we think the P/E for the company should be higher, we are going to continue to focus on what we can control -- the operations of the company and our profitability. That said, we are significantly increasing our communications with investors and portfolio managers through a variety of channels.

For example, we created a shareholder handbook [available on the Web site] to provide investors with a good background on the company, the fundamentals of each of the companies in the Centex portfolio, and the key drivers of our businesses.

We are also increasing our direct contact with investors. We think that is the most effective way to promote our story. We met with three or four times as many investors this year, in a wider variety of markets, including more than 15 cities in the United States and 13 cities in nine countries throughout Europe. We think active outreach to investors is a vital part of our investor relations program."

Dom Cecere
Senior Vice President, CFO
KB Home
Los Angeles, Calif.

"Our issue isn't providing improved financial results so much as it is getting credit for the results we've produced. How do we get major analysts and portfolio managers to understand our story and the transformation this sector has made?

We are making personal calls on targeted investors in key cities, on both the sell and buy sides. We matched a profile of our company -- which is a story of solid growth with very good cash flow and returns -- against a profile of the potential buyers most likely to buy our stock. We further narrowed the field to investors buying companies with a similar profile whose stocks we are outperforming.

We will continue to build rapport with these investors and make them comfortable with the fact that although our stocks are up 60 percent in 2003, we are still significantly undervalued."

Gordon Milne
Executive Vice President, CFO
The Ryland Group
Calabasas, Calif.

"Our strategy with Wall Street is to be consistent so that the people who buy our shares aren't going to be surprised. We've focused on organic growth and on improving our margins. We haven't done an acquisition of note for nearly 10 years, and we have been very successful in improving margins for many years.

We've done a lot on the construction side to simplify our building, to expand national purchasing programs, and to offer more upgrades, all of which is to improve profitability by making sustainable changes in our business.

We've also consistently bought back two million shares a year for the past five years, and at the same time, we've focused on improving our credit rating. Both S&P and Moody's have given us upgrades in the last year."

James O'Leary
Executive Vice President, CFO
Beazer Homes USA
Atlanta, Ga.

"We have two principal initiatives. The first is to focus on organic growth. Certainly we've achieved organic growth, but in recent years, we've grown significantly by acquisition and assembled a geographic footprint that we think is as good as anybody's in the industry. Now the big opportunity is to focus on existing markets where we have a presence and are in a position to capitalize on it by expanding market share.

The second initiative, related to the first, is to leverage our size and scale to reduce costs through purchasing efficiencies. We are looking at vendors in multiple markets and trade contractors with whom we can achieve win-win results. The recent partnership with Masco is a good example. They became preferred vendors and we become preferred customers. As preferred customers, we're getting favorable price terms and performance in return for an expanded business relationship."

Jim Wigger
Vice President of Finance
Fischer Homes
Crestview Hills, Ky.

"A couple of years ago we identified areas we thought were critical to operational excellence, and today we recognize that -- as a company -- we must do a better job of executing on those factors each and every day. Particularly, our focus is to enhance referral and repurchase sales. We believe referrals are the best source of tomorrow's business and we are not going to get a referral without placing a great emphasis on customer satisfaction.

We have to create a better quality new-home buying experience and improve the customers' perception of that experience. That means sales counselors doing better at setting expectations of the process, construction people being focused on the sales and marketing process, and support functions providing useful and timely data, not just for financial measures, but operational measures as well. We have to work better as a team, from the top to the bottom, than was required in the past if we are going to continue to succeed as a company."

Mori Hosseini
ICI Homes
Daytona Beach, Fla.

"The biggest thing we are doing to increase revenues is more product diversification. Our core products have been targeted to second home buyers all the way up to ultra luxury, averaging from around $200,000 up to $10 million. Now we are offering product for the first-time buyer, too. That product will come into play this year and we will see the first revenues from it in 2004.

Ken Artz
Executive Vice President, CFO
Fieldstone Communities
Newport Beach, Calif.

"We are expanding both our institutional and private sources of financing. Our institutional relationships are very important, but we must continue to expand these sources as we grow our business. We want to be careful not to be constrained by an investor's geographic or product concentration issues. We are very optimistic, however, about building relationships with private investors.

We are fortunate to be located in an area with many highly successful, smart, entrepreneurial people. They understand risk-reward concepts and are willing to invest at lower or higher returns depending upon the underlying risk of the project. We think institutional and private investors are complementary and will provide us a flexible, steady source of financing."

Chad Horne
Windward Homes
Tampa, Fla.

"On the operational side, we're working very hard to reduce cycle times and increase inventory turns. We're working to expand our trade base, making significant efforts to reach out to additional contractors and to pull some of the trades from markets that are nearing build-out into areas that will remain active. At the same time we're helping them to be more efficient and to be more efficient ourselves in our decision-making and paperwork.

Financially, we continue to look for takedown opportunities on land. We want to increase the proportion of land we buy using rolling options. It's about 50 percent now. And we are working to push up our mortgage capture rate. Currently it is around 70 percent, but I believe we will push it to 90 percent in the next 18 months."

Thomas E. Ryan
President, Co-CEO
Town & Country Homes
Lombard, Ill.

"We've created a Web-enabled Total Operational Management system that enables internal and external customers the opportunity to work online doing options selecting, prospecting, paperwork, scheduling, etc. This program is also lowering the cycle time of all of our processes.

Additionally, we created a focus group system that helps provide instant direction to the community design team and enables us to alter our land plan and home designs much more quickly. We now employ the Design Studio and have seen a dramatic increase in option dollars. We also now employ a survey system that achieves a 100 percent rate of return and shows us any trend in operational efficiency, which can be addressed within days.

And financially, we've added to our land position while lowering velocity to achieve a better gross margin. We are now achieving the highest gross margin in the history of the company."

Learn more about markets featured in this article: Los Angeles, CA.