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M.D.C. Holdings Announces 2017 Third Quarter Results

Certain statements on the Site, including statements regarding the MDC Companies' business, financial condition, results of operation, cash flows, strategies and prospects, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by terminology such as "likely," "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential" or "continue," or the negative of such terms and other comparable terminology. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the MDC Companies to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Additional information about the risks and uncertainties applicable to the MDC Companies' business is contained in MDC's filings with the Securities and Exchange Commission, including MDC's Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. The MDC Companies undertake no duty to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. However, any further disclosures made on related subjects in MDC's subsequent filings with the Securities and Exchange Commission, press releases and/or presentations should be considered.
November 2, 2017
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M.D.C. Holdings Announces 2017 Third Quarter Results

DENVER, Nov. 2, 2017 /PRNewswire/ -- M.D.C. Holdings, Inc. (NYSE: MDC) announced results for the quarter ended September 30, 2017.

2017 Third Quarter Highlights and Comparisons to 2016 Third Quarter

  • Net income up 132% to $61.2 million, or $1.16 per diluted share, from $26.4 million or $0.51 per diluted share*
    • Pretax gain of $52.2 million on investment sales
  • Home sale revenues up 2% to $584.9 million from $575.7 million
  • Gross margin from home sales percentage up 80 basis points from 15.5% to 16.3%
  • Selling, general and administrative expenses as a percentage of home sale revenues ("SG&A rate") of 11.8% versus 10.8%
  • Dollar value of net new orders of $596.7 million, up 6% from $563.9 million
  • Ending backlog dollar value up 6% to $1.71 billion from $1.61 billion
  • Lot purchase approvals up 83% to 2,489 lots in 37 communities
  • Last twelve months return on equity improved 500 basis points to 11.8%
  • Increased homebuilding line of credit from $550 million to $700 million
  • Announced entry into Portland market
  • Added $150 million to our senior notes due January 2043 subsequent to quarter end

*Per share amount for 2016 third quarter has been adjusted for the 5% stock dividend declared and paid in the 2016 fourth quarter.

Larry A. Mizel, MDC's Chairman and Chief Executive Officer, stated, "Despite the challenges presented to our Florida operations by Hurricane Irma and our Colorado operations by the Weyerhaeuser joist issue, we increased revenues, net order value and ending backlog value year-over-year for the 2017 third quarter. In addition, we recognized significant gains from the opportunistic sale of several investments during the quarter, which drove a 132% increase in our net income."

Mr. Mizel continued, "Solid economic fundamentals continue to support the homebuilding industry, driving robust demand for new homes, especially in the first-time homebuyer segment. To meet this growing demand, we have taken a number of steps to grow community count. First, we substantially increased our approvals of future lots for purchase. Through the first nine months of 2017, we approved the purchase of over 7,800 lots, more than double the approvals from the same period a year ago. An increasing percentage of our lot approvals are focused on the first-time homebuyer segment, which has responded favorably to one of our newest product lines, the Seasons™ collection."

Mr. Mizel continued, "Also, we announced in September that we will commence operations in the greater Portland area, giving us additional exposure to the Pacific Northwest, where we have experienced solid results."

Mr. Mizel concluded, "Lastly, we expanded the capacity under our line of credit at the end of the third quarter from $550 million to $700 million and extended its maturity by two years to December 2022. In addition, at the start of the fourth quarter, we added $150 million to our senior notes due January 2043. We ended our 2017 third quarter with liquidity of almost $1.1 billion, an increase of 40% over the prior year. The higher liquidity provides us with additional resources to fund our increased lot approval activity, providing us the foundation for community count growth in 2018."

Homebuilding

Home sale revenues for the 2017 third quarter increased 2% to $584.9 million, primarily driven by a 2% improvement in deliveries, which was mostly the result of a 2% year-over-year increase in our homes in beginning backlog. However, deliveries were negatively impacted by the Weyerhaeuser joist issue in Colorado and Hurricane Irma in Florida. The deliveries of approximately 115 homes that were previously scheduled to close during the 2017 third quarter were delayed to later quarters as a result of these issues.

For the 2017 third quarter, our gross margin from home sales percentage was 16.3%, an 80 basis point improvement from 15.5% in the prior year period. During the 2017 and 2016 third quarters, we recorded inventory impairments of $4.5 million and $4.7 million, respectively. The impairments recorded for each period negatively impacted gross margin by 80 basis points. Additionally, during the 2016 third quarter, we recorded adjustments of $1.8 million (a 30 basis point negative impact to gross margins) to increase our warranty accrual while for our 2017 third quarter, we recorded an adjustment to decrease our warranty accrual by $0.4 million (a 10 basis point positive impact to gross margins).

Our interest and other income for the three months ended September 30, 2017 and 2016 was $54.5 million and $1.9 million, respectively. The year-over-year increase was driven by a $52.2 million gain from investment sales in the 2017 third quarter. The majority of the gain relates to the sale of the Company's metropolitan district bond securities, which we held for the past ten years and relate to a master-planned community being developed by one of our homebuilding subsidiaries.

Selling, general and administrative expenses for the 2017 third quarter were $69.1 million, up $7.2 million from $61.9 million for the same period in 2016. As we continued to plan for future growth of our business, we increased headcount, resulting in higher compensation-related expenses. Our SG&A rate was up 100 basis points year-over-year to 11.8%. However, absent the Weyerhaeuser joist issue and Hurricane Irma issues discussed above, we estimate that our SG&A rate might have increased by only 40 basis points year-over-year.

The dollar value of net new orders for the 2017 third quarter increased 6% year-over-year to $596.7 million, as an 8% increase in the average selling price of net new orders was slightly offset by a 2% decline in the number of net new orders. The year-over-year change in our average selling price of net new orders was driven by price increases in existing communities due to robust demand and the mix of sales between markets, partially offset by an increase in the percentage of sales coming from our more affordable product lines. The slight decline in the number of net new orders was caused by a 4% decrease in our average active community count, partially offset by a 2% increase in our monthly sales absorption rate.

Our backlog value at the end of the 2017 third quarter was up 6% year-over-year to $1.71 billion, due mostly to a 6% increase in the average selling price of homes in backlog. The change in average selling price is consistent with that explained for our net new orders.

Financial Services

Income before taxes for our financial services operations for the 2017 third quarter was $9.5 million, a $0.9 million decline from $10.4 million in the 2016 third quarter. The change in average selling price is consistent with the explanation provided above for our net new orders.

About MDC

M.D.C. Holdings, Inc. was founded in 1972. MDC's homebuilding subsidiaries, which operate under the name Richmond American Homes, have built and financed the American Dream for more than 190,000 homebuyers since 1977. MDC's commitment to customer satisfaction, quality and value is reflected in each home its subsidiaries build. MDC is one of the largest homebuilders in the United States. Its subsidiaries have homebuilding operations across the country, including the metropolitan areas of Denver, Colorado Springs, Salt Lake City, Las Vegas, Phoenix, Tucson, Riverside-San Bernardino, Los Angeles, San Diego, Orange County, San Francisco Bay Area, Sacramento, Washington D.C., Baltimore, Orlando, Jacksonville, South Florida, Seattle and Portland. The Company's subsidiaries also provide mortgage financing, insurance and title services, primarily for Richmond American homebuyers, through HomeAmerican Mortgage Corporation, American Home Insurance Agency, Inc. and American Home Title and Escrow Company, respectively. M.D.C. Holdings, Inc. is traded on the New York Stock Exchange under the symbol "MDC." For more information, visit www.mdcholdings.com.

Forward-Looking Statements

Certain statements in this release, including any statements regarding our business, financial condition, results of operation, cash flows, strategies and prospects, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of MDC to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among other things, (1) general economic conditions, including changes in consumer confidence, inflation or deflation and employment levels; (2) changes in business conditions experienced by MDC, including cancellation rates, net home orders, home gross margins, land and home values and subdivision counts; (3) changes in interest rates, mortgage lending programs and the availability of credit; (4) changes in the market value of MDC's investments in marketable securities; (5) uncertainty in the mortgage lending industry, including repurchase requirements associated with HomeAmerican Mortgage Corporation's sale of mortgage loans (6) the relative stability of debt and equity markets; (7) competition; (8) the availability and cost of land and other raw materials used by MDC in its homebuilding operations; (9) the availability and cost of performance bonds and insurance covering risks associated with our business; (10) shortages and the cost of labor; (11) weather related slowdowns and natural disasters; (12) slow growth initiatives; (13) building moratoria; (14) governmental regulation, including the interpretation of tax, labor and environmental laws; (15) terrorist acts and other acts of war; (16) changes in energy prices; and (17) other factors over which MDC has little or no control. Additional information about the risks and uncertainties applicable to MDC's business is contained in MDC's Form 10-Q for the quarter ended September 30, 2017, which is scheduled to be filed with the Securities and Exchange Commission today. All forward-looking statements made in this press release are made as of the date hereof, and the risk that actual results will differ materially from expectations expressed in this press release will increase with the passage of time. MDC undertakes no duty to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. However, any further disclosures made on related subjects in our subsequent filings, releases or webcasts should be consulted.

M.D.C. HOLDINGS, INC.

Consolidated Statements of Operations and Comprehensive Income

 
 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

 

2017

 

2016

 

2017

 

2016

 

(Dollars in thousands, except per share amounts)

 

(Unaudited)

Homebuilding:

                     

Home sale revenues

$

584,947

 

$

575,722

 

$

1,796,046

 

$

1,541,337

Land sale revenues

 

1,340

   

2,290

   

2,938

   

4,930

Total home and land sale revenues

 

586,287

   

578,012

   

1,798,984

   

1,546,267

Home cost of sales

 

(485,147)

   

(481,511)

   

(1,493,166)

   

(1,287,373)

Land cost of sales

 

(1,259)

   

(2,318)

   

(2,672)

   

(4,197)

Inventory impairments

 

(4,540)

   

(4,700)

   

(9,390)

   

(6,300)

Total cost of sales

 

(490,946)

   

(488,529)

   

(1,505,228)

   

(1,297,870)

Gross margin

 

95,341

   

89,483

   

293,756

   

248,397

Selling, general and administrative expenses

 

(69,102)

   

(61,904)

   

(206,109)

   

(182,621)

Interest and other income

 

54,548

   

1,869

   

59,722

   

5,358

Other expense

 

(618)

   

(1,558)

   

(1,635)

   

(2,463)

Other-than-temporary impairment of marketable securities

 

-

   

(215)

   

(51)

   

(934)

Homebuilding pretax income

 

80,169

   

27,675

   

145,683

   

67,737

                       

Financial Services:

                     

Revenues

 

17,464

   

17,408

   

54,516

   

44,248

Expenses

 

(8,849)

   

(7,955)

   

(25,247)

   

(21,739)

Interest and other income

 

925

   

1,035

   

3,142

   

2,648

Other-than-temporary impairment of marketable securities

 

(29)

   

(111)

   

(160)

   

(111)

Financial services pretax income

 

9,511

   

10,377

   

32,251

   

25,046

                       

Income before income taxes

 

89,680

   

38,052

   

177,934

   

92,783

Provision for income taxes

 

(28,517)

   

(11,693)

   

(60,651)

   

(29,948)

Net income

$

61,163

 

$

26,359

 

$

117,283

 

$

62,835

                       

Other comprehensive income (loss) related to

                     

available for sale securities, net of tax

 

(23,175)

   

1,028

   

(19,245)

   

3,871

Comprehensive income

$

37,988

 

$

27,387

 

$

98,038

 

$

66,706

                       

Earnings per share:

                     

Basic

$

1.18

 

$

0.51

 

$

2.27

 

$

1.22

Diluted

$

1.16

 

$

0.51

 

$

2.23

 

$

1.22

                       

Weighted average common shares outstanding:

                     

Basic

 

51,650,360

   

51,297,132

   

51,502,986

   

51,286,844

Diluted

 

52,601,118

   

51,460,446

   

52,248,377

   

51,297,765

                       

Dividends declared per share

$

0.25

 

$

0.24

 

$

0.75

 

$

0.72

 

M.D.C. HOLDINGS, INC.

Consolidated Balance Sheets

 
 

September 30,

 

December 31,

 

2017

 

2016

ASSETS

(Dollars in thousands, except

 

per share amounts)

Homebuilding:

(Unaudited)

     

Cash and cash equivalents

$

351,399

 

$

259,087

Marketable securities

 

-

   

59,770

Restricted cash

 

8,723

   

3,778

Trade and other receivables

 

42,904

   

42,492

Inventories:

         

Housing completed or under construction

 

969,419

   

874,199

Land and land under development

 

863,002

   

884,615

Total inventories

 

1,832,421

   

1,758,814

Property and equipment, net

 

26,304

   

28,041

Deferred tax asset, net

 

64,164

   

74,888

Metropolitan district bond securities (related party)

 

-

   

30,162

Prepaid and other assets

 

72,808

   

60,463

Total homebuilding assets

 

2,398,723

   

2,317,495

Financial Services:

         

Cash and cash equivalents

 

26,419

   

23,822

Marketable securities

 

40,221

   

36,436

Mortgage loans held-for-sale, net

 

89,804

   

138,774

Other assets

 

11,135

   

12,062

Total financial services assets

 

167,579

   

211,094

Total Assets

$

2,566,302

 

$

2,528,589

LIABILITIES AND EQUITY

         

Homebuilding:

         

Accounts payable

$

49,390

 

$

42,088

Accrued liabilities

 

151,661

   

144,566

Revolving credit facility

 

15,000

   

15,000

Senior notes, net

 

842,532

   

841,646

Total homebuilding liabilities

 

1,058,583

   

1,043,300

Financial Services:

         

Accounts payable and accrued liabilities

 

51,697

   

50,734

Mortgage repurchase facility

 

65,103

   

114,485

Total financial services liabilities

 

116,800

   

165,219

Total Liabilities

 

1,175,383

   

1,208,519

Stockholders' Equity

         

Preferred stock, $0.01 par value; 25,000,000 shares authorized; none issued or outstanding

 

-

   

-

Common stock, $0.01 par value; 250,000,000 shares authorized; 51,933,969 and 51,485,090

         

issued and outstanding at September 30, 2017 and December 31, 2016, respectively

 

519

   

515

Additional paid-in-capital

 

995,132

   

983,532

Retained earnings

 

392,442

   

313,952

Accumulated other comprehensive income

 

2,826

   

22,071

Total Stockholders' Equity

 

1,390,919

   

1,320,070

Total Liabilities and Stockholders' Equity

$

2,566,302

 

$

2,528,589

 

M.D.C. HOLDINGS, INC.

Consolidated Statement of Cash Flows

 
 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

 

2017

 

2016

 

2017

 

2016

 

(Dollars in thousands)

 

(Unaudited)

Operating Activities:

                     

Net income

$

61,163

 

$

26,359

 

$

117,283

 

$

62,835

Adjustments to reconcile net income to net cash provided by (used in)

                     

operating activities:

                     

Stock-based compensation expense

 

1,062

   

473

   

3,100

   

6,636

Depreciation and amortization

 

1,501

   

1,335

   

4,205

   

3,702

Inventory impairments

 

4,540

   

4,700

   

9,390

   

6,300

Other-than-temporary impairment of marketable securities

 

29

   

326

   

211

   

1,045

Gain on sale of marketable securities

 

(16,364)

   

(649)

   

(18,122)

   

(911)

Gain on sale of metropolitan district bond securities (related party)

 

(35,847)

   

-

   

(35,847)

   

-

Deferred income tax expense

 

12,762

   

3,484

   

22,795

   

11,357

Net changes in assets and liabilities:

                     

Restricted cash

 

(3,696)

   

(675)

   

(4,945)

   

(871)

Trade and other receivables

 

(5,300)

   

4,556

   

119

   

(21,679)

Mortgage loans held-for-sale

 

5,479

   

710

   

48,970

   

(2,319)

Housing completed or under construction

 

(62,290)

   

(42,934)

   

(101,997)

   

(229,739)

Land and land under development

 

(17,635)

   

18,430

   

19,886

   

141,131

Prepaid expenses and other assets

 

(3,627)

   

(1,598)

   

(11,229)

   

(4,573)

Accounts payable and accrued liabilities

 

6,500

   

(1,334)

   

15,345

   

18,183

Net cash provided by (used in) operating activities

 

(51,723)

   

13,183

   

69,164

   

(8,903)

                       

Investing Activities:

                     

Purchases of marketable securities

 

(5,561)

   

(12,846)

   

(17,604)

   

(28,272)

Sales of marketable securities

 

71,865

   

6,108

   

83,315

   

56,873

Proceeds from sale of metropolitan district bond securities (related party)

 

44,253

   

-

   

44,253

   

-

Purchases of property and equipment

 

(553)

   

(748)

   

(1,917)

   

(3,865)

Net cash provided by (used in) investing activities

 

110,004

   

(7,486)

   

108,047

   

24,736

                       

Financing Activities:

                     

Advances (payments) on mortgage repurchase facility, net

 

(4,024)

   

(1,286)

   

(49,382)

   

3,400

Dividend payments

 

(12,984)

   

(12,259)

   

(38,793)

   

(36,763)

Payments of deferred financing costs

 

(2,630)

   

-

   

(2,630)

   

-

Proceeds from exercise of stock options

 

1,199

   

-

   

8,503

   

-

Net cash used in financing activities

 

(18,439)

   

(13,545)

   

(82,302)

   

(33,363)

                       

Net increase (decrease) in cash and cash equivalents

 

39,842

   

(7,848)

   

94,909

   

(17,530)

Cash and cash equivalents:

                     

Beginning of period

 

337,976

   

171,306

   

282,909

   

180,988

End of period

$

377,818

 

$

163,458

 

$

377,818

 

$

163,458

 

M.D.C. HOLDINGS, INC.

Homebuilding Operational Data

 

New Home Deliveries

 
   

Three Months Ended September 30,

   

2017

 

2016

 

% Change

   

Homes

 

Dollar
Value

 

Average
Price

 

Homes

 

Dollar
Value

 

Average
Price

 

Homes

 

Dollar
Value

 

Average
Price

   

(Dollars in thousands)

 

Arizona

186

 

$

58,640

 

$

315.3

 

221

 

$

64,314

 

$

291.0

 

(16)%

 

(9)%

 

8%

 

California

223

   

135,745

   

608.7

 

195

   

125,602

   

644.1

 

14%

 

8%

 

(5)%

 

Nevada

240

   

81,483

   

339.5

 

177

   

59,601

   

336.7

 

36%

 

37%

 

1%

 

Washington

98

   

50,936

   

519.8

 

75

   

35,072

   

467.6

 

31%

 

45%

 

11%

 

West

747

   

326,804

   

437.5

 

668

   

284,589

   

426.0

 

12%

 

15%

 

3%

 

Colorado

314

   

146,883

   

467.8

 

343

   

169,858

   

495.2

 

(8)%

 

(14)%

 

(6)%

 

Utah

45

   

18,843

   

418.7

 

55

   

20,728

   

376.9

 

(18)%

 

(9)%

 

11%

 

Mountain

359

   

165,726

   

461.6

 

398

   

190,586

   

478.9

 

(10)%

 

(13)%

 

(4)%

 

Maryland

41

   

21,506

   

524.5

 

61

   

27,297

   

447.5

 

(33)%

 

(21)%

 

17%

 

Virginia

68

   

33,537

   

493.2

 

78

   

39,795

   

510.2

 

(13)%

 

(16)%

 

(3)%

 

Florida

102

   

37,374

   

366.4

 

88

   

33,455

   

380.2

 

16%

 

12%

 

(4)%

 

East

211

   

92,417

   

438.0

 

227

   

100,547

   

442.9

 

(7)%

 

(8)%

 

(1)%

 

Total

1,317

 

$

584,947

 

$

444.2

 

1,293

 

$

575,722

 

$

445.3

 

2%

 

2%

 

(0)%

   
   

Nine Months Ended September 30,

   

2017

 

2016

 

% Change

   

Homes

 

Dollar
Value

 

Average
Price

 

Homes

 

Dollar
Value

 

Average
Price

 

Homes

 

Dollar
Value

 

Average
Price

   

(Dollars in thousands)

 

Arizona

586

 

$

183,258

 

$

312.7

 

582

 

$

170,352

 

$

292.7

 

1%

 

8%

 

7%

 

California

662

   

403,974

   

610.2

 

512

   

319,116

   

623.3

 

29%

 

27%

 

(2)%

 

Nevada

642

   

223,303

   

347.8

 

432

   

149,861

   

346.9

 

49%

 

49%

 

0%

 

Washington

290

   

149,106

   

514.2

 

234

   

106,665

   

455.8

 

24%

 

40%

 

13%

 

West

2,180

   

959,641

   

440.2

 

1,760

   

745,994

   

423.9

 

24%

 

29%

 

4%

 

Colorado

1,064

   

510,211

   

479.5

 

945

   

463,534

   

490.5

 

13%

 

10%

 

(2)%

 

Utah

126

   

51,409

   

408.0

 

145

   

53,238

   

367.2

 

(13)%

 

(3)%

 

11%

 

Mountain

1,190

   

561,620

   

471.9

 

1,090

   

516,772

   

474.1

 

9%

 

9%

 

(0)%

 

Maryland

140

   

65,870

   

470.5

 

178

   

84,742

   

476.1

 

(21)%

 

(22)%

 

(1)%

 

Virginia

171

   

92,432

   

540.5

 

193

   

98,572

   

510.7

 

(11)%

 

(6)%

 

6%

 

Florida

304

   

116,483

   

383.2

 

251

   

95,257

   

379.5

 

21%

 

22%

 

1%

 

East

615

   

274,785

   

446.8

 

622

   

278,571

   

447.9

 

(1)%

 

(1)%

 

(0)%

 

Total

3,985

 

$

1,796,046

 

$

450.7

 

3,472

 

$

1,541,337

 

$

443.9

 

15%

 

17%

 

2%

 

M.D.C. HOLDINGS, INC.

Homebuilding Operational Data

 

Net New Orders

 
 

Three Months Ended September 30,

 

2017

 

2016

 

% Change

 

Homes

 

Dollar
Value

 

Average
Price

 

Monthly
Absorption
Rate *

 

Homes

 

Dollar
Value

 

Average
Price

 

Monthly
Absorption
Rate *

 

Homes

 

Dollar
Value

 

Average
Price

 

Monthly
Absorption
Rate

 

(Dollars in thousands)

Arizona

192

 

$

64,765

 

$

337.3

 

2.53

 

225

 

$

67,424

 

$

299.7

 

2.56

 

(15)%

 

(4)%

 

13%

 

(1)%

California

250

   

164,265

   

657.1

 

4.17

 

260

   

152,901

   

588.1

 

4.08

 

(4)%

 

7%

 

12%

 

2%

Nevada

184

   

70,130

   

381.1

 

3.23

 

175

   

58,443

   

334.0

 

2.75

 

5%

 

20%

 

14%

 

17%

Washington

66

   

37,570

   

569.2

 

2.84

 

83

   

38,061

   

458.6

 

2.26

 

(20)%

 

(1)%

 

24%

 

26%

West

692

   

336,730

   

486.6

 

3.20

 

743

   

316,829

   

426.4

 

2.95

 

(7)%

 

6%

 

14%

 

8%

Colorado

333

   

162,725

   

488.7

 

2.45

 

321

   

146,911

   

457.7

 

3.82

 

4%

 

11%

 

7%

 

(36)%

Utah

48

   

23,041

   

480.0

 

2.29

 

35

   

14,718

   

420.5

 

1.41

 

37%

 

57%

 

14%

 

62%

Mountain

381

   

185,766

   

487.6

 

2.43

 

356

   

161,629

   

454.0

 

3.27

 

7%

 

15%

 

7%

 

(26)%

Maryland

39

   

17,006

   

436.1

 

2.00

 

50

   

22,612

   

452.2

 

1.42

 

(22)%

 

(25)%

 

(4)%

 

41%

Virginia

44

   

20,984

   

476.9

 

3.45

 

52

   

26,869

   

516.7

 

2.04

 

(15)%

 

(22)%

 

(8)%

 

69%

Florida

114

   

36,229

   

317.8

 

2.20

 

95

   

35,938

   

378.3

 

1.74

 

20%

 

1%

 

(16)%

 

26%

East

197

   

74,219

   

376.7

 

2.35

 

197

   

85,419

   

433.6

 

1.71

 

0%

 

(13)%

 

(13)%

 

37%

Total

1,270

 

$

596,715

 

$

469.9

 

2.78

 

1,296

 

$

563,877

 

$

435.1

 

2.72

 

(2)%

 

6%

 

8%

 

2%

 
 

Nine Months Ended September 30,

 

2017

 

2016

 

% Change

 

Homes

 

Dollar
Value

 

Average
Price

 

Monthly
Absorption
Rate *

 

Homes

 

Dollar
Value

 

Average
Price

 

Monthly
Absorption
Rate *

 

Homes

 

Dollar
Value

 

Average
Price

 

Monthly
Absorptio
Rate

 

(Dollars in thousands)

Arizona

638

 

$

209,547

 

$

328.4

 

2.76

 

684

 

$

207,456

 

$

303.3

 

2.52

 

(7)%

 

1%

 

8%

 

10%

California

727

   

465,164

   

639.8

 

4.21

 

797

   

476,341

   

597.7

 

4.36

 

(9)%

 

(2)%

 

7%

 

(3)%

Nevada

746

   

265,691

   

356.2

 

4.17

 

634

   

220,799

   

348.3

 

3.31

 

18%

 

20%

 

2%

 

26%

Washington

332

   

184,112

   

554.6

 

3.80

 

325

   

156,546

   

481.7

 

2.82

 

2%

 

18%

 

15%

 

35%

West

2,443

   

1,124,514

   

460.3

 

3.64

 

2,440

   

1,061,142

   

434.9

 

3.20

 

0%

 

6%

 

6%

 

14%

Colorado

1,292

   

627,845

   

485.9

 

3.40

 

1,227

   

583,309

   

475.4

 

4.00

 

5%

 

8%

 

2%

 

(15)%

Utah

171

   

77,114

   

451.0

 

2.41

 

178

   

67,394

   

378.6

 

2.47

 

(4)%

 

14%

 

19%

 

(2)%

Mountain

1,463

   

704,959

   

481.9

 

3.24

 

1,405

   

650,703

   

463.1

 

3.71

 

4%

 

8%

 

4%

 

(13)%

Maryland

122

   

54,468

   

446.5

 

1.65

 

208

   

96,590

   

464.4

 

1.89

 

(41)%

 

(44)%

 

(4)%

 

(13)%

Virginia

171

   

88,600

   

518.1

 

3.58

 

210

   

108,779

   

518.0

 

2.75

 

(19)%

 

(19)%

 

0%

 

30%

Florida

365

   

128,091

   

350.9

 

2.22

 

325

   

133,533

   

410.9

 

2.19

 

12%

 

(4)%

 

(15)%

 

1%

East

658

   

271,159

   

412.1

 

2.30

 

743

   

338,902

   

456.1

 

2.22

 

(11)%

 

(20)%

 

(10)%

 

4%

Total

4,564

 

$

2,100,632

 

$

460.3

 

3.24

 

4,588

 

$

2,050,747

 

$

447.0

 

3.11

 

(1)%

 

2%

 

3%

 

4%

   
 

* Calculated as total net new orders in period ÷ average active communities during period ÷ number of months in period

 

 

M.D.C. HOLDINGS, INC.

Homebuilding Operational Data

 

Active Subdivisions

 
               

Average Active Subdivisions

 

Average Active Subdivisions

   

Active Subdivisions

 

Three Months Ended

 

Nine Months Ended

   

September 30,

 

%

 

September 30,

 

%

 

September 30,

 

%

   

2017

 

2016

 

Change

 

2017

 

2016

 

Change

 

2017

 

2016

 

Change

 

Arizona

27

 

30

 

(10)%

 

25

 

29

 

(14)%

 

26

 

30

 

(13)%

 

California

23

 

21

 

10%

 

20

 

21

 

(5)%

 

19

 

20

 

(5)%

 

Nevada

19

 

20

 

(5)%

 

19

 

21

 

(10)%

 

20

 

21

 

(5)%

 

Washington

7

 

14

 

(50)%

 

8

 

12

 

(33)%

 

10

 

13

 

(23)%

 

West

76

 

85

 

(11)%

 

72

 

83

 

(13)%

 

75

 

84

 

(11)%

 

Colorado

48

 

28

 

71%

 

45

 

28

 

61%

 

42

 

34

 

24%

 

Utah

7

 

9

 

(22)%

 

7

 

8

 

(13)%

 

8

 

8

 

0%

 

Mountain

55

 

37

 

49%

 

52

 

36

 

44%

 

50

 

42

 

19%

 

Maryland

5

 

11

 

(55)%

 

7

 

12

 

(42)%

 

8

 

12

 

(33)%

 

Virginia

4

 

8

 

(50)%

 

4

 

9

 

(56)%

 

5

 

9

 

(44)%

 

Florida

14

 

18

 

(22)%

 

17

 

18

 

(6)%

 

18

 

17

 

6%

 

East

23

 

37

 

(38)%

 

28

 

39

 

(28)%

 

31

 

38

 

(18)%

 

Total

154

 

159

 

(3)%

 

152

 

158

 

(4)%

 

156

 

164

 

(5)%

 

Backlog

 
   

At September 30,

   

2017

 

2016

 

% Change

   

Homes

 

Dollar
Value

 

Average
Price

 

Homes

 

Dollar
Value

 

Average
Price

 

Homes

 

Dollar
Value

 

Average
Price

   

(Dollars in thousands)

 

Arizona

374

 

$

133,074

 

$

355.8

 

423

 

$

132,929

 

$

314.3

 

(12)%

 

0%

 

13%

 

California

546

   

378,448

   

693.1

 

627

   

389,622

   

621.4

 

(13)%

 

(3)%

 

12%

 

Nevada

411

   

151,726

   

369.2

 

397

   

139,731

   

352.0

 

4%

 

9%

 

5%

 

Washington

279

   

156,974

   

562.6

 

270

   

133,367

   

494.0

 

3%

 

18%

 

14%

 

West

1,610

   

820,222

   

509.5

 

1,717

   

795,649

   

463.4

 

(6)%

 

3%

 

10%

 

Colorado

1,192

   

595,675

   

499.7

 

1,104

   

530,662

   

480.7

 

8%

 

12%

 

4%

 

Utah

149

   

67,830

   

455.2

 

141

   

53,180

   

377.2

 

6%

 

28%

 

21%

 

Mountain

1,341

   

663,505

   

494.8

 

1,245

   

583,842

   

468.9

 

8%

 

14%

 

6%

 

Maryland

74

   

34,102

   

460.8

 

120

   

56,837

   

473.6

 

(38)%

 

(40)%

 

(3)%

 

Virginia

111

   

58,225

   

524.5

 

118

   

64,228

   

544.3

 

(6)%

 

(9)%

 

(4)%

 

Florida

327

   

132,238

   

404.4

 

248

   

111,499

   

449.6

 

32%

 

19%

 

(10)%

 

East

512

   

224,565

   

438.6

 

486

   

232,564

   

478.5

 

5%

 

(3)%

 

(8)%

 

Total

3,463

 

$

1,708,292

 

$

493.3

 

3,448

 

$

1,612,055

 

$

467.5

 

0%

 

6%

 

6%

                                                       

 

M.D.C. HOLDINGS, INC.

Homebuilding Operational Data

 

Homes Completed or Under Construction (WIP lots)

 
   

September 30,

 

%

   

2017

 

2016

 

Change

 

Unsold:

         
 

Completed

78

 

81

 

(4)%

 

Under construction

218

 

298

 

(27)%

 

Total unsold started homes

296

 

379

 

(22)%

 

Sold homes under construction or completed

2,591

 

2,626

 

(1)%

 

Model homes under construction or completed

319

 

293

 

9%

 

Total homes completed or under construction

3,206

 

3,298

 

(3)%

 

Lots Owned and Optioned (including homes completed or under construction)

 
   

September 30, 2017

 

September 30, 2016

   
   

Lots
Owned

 

Lots
Optioned

 

Total

 

Lots
Owned

 

Lots
Optioned

 

Total

 

Total %
Change

 

Arizona

1,971

 

761

 

2,732

 

1,515

 

269

 

1,784

 

53%

 

California

1,454

 

679

 

2,133

 

1,753

 

75

 

1,828

 

17%

 

Nevada

2,150

 

401

 

2,551

 

2,051

 

200

 

2,251

 

13%

 

Washington

655

 

64

 

719

 

853

 

-

 

853

 

(16)%

 

West

6,230

 

1,905

 

8,135

 

6,172

 

544

 

6,716

 

21%

 

Colorado

4,622

 

2,960

 

7,582

 

4,051

 

1,347

 

5,398

 

40%

 

Utah

456

 

132

 

588

 

380

 

-

 

380

 

55%

 

Mountain

5,078

 

3,092

 

8,170

 

4,431

 

1,347

 

5,778

 

41%

 

Maryland

122

 

48

 

170

 

261

 

143

 

404

 

(58)%

 

Virginia

282

 

30

 

312

 

429

 

15

 

444

 

(30)%

 

Florida

941

 

1,231

 

2,172

 

962

 

455

 

1,417

 

53%

 

East

1,345

 

1,309

 

2,654

 

1,652

 

613

 

2,265

 

17%

 

Total

12,653

 

6,306

 

18,959

 

12,255

 

2,504

 

14,759

 

28%

                                         

 

M.D.C. HOLDINGS, INC.

Other Financial Data

 

Selling, General and Administrative Expenses

 
   

Three Months Ended September 30,

 

Nine Months Ended September 30,

   

2017

 

2016

 

Change

 

2017

 

2016

 

Change

   

(Dollars in thousands)

 

General and administrative expenses

$

33,170

 

$

27,758

 

$

5,412

 

$

97,831

 

$

90,638

 

$

7,193

 

General and administrative expenses

                                 
 

as a percentage of home sale revenues

 

5.7%

   

4.8%

   

90 bps

   

5.4%

   

5.9%

   

(50) bps

                                     
 

Marketing expenses

$

16,445

 

$

15,262

 

$

1,183

 

$

48,545

 

$

41,728

 

$

6,817

 

Marketing expenses as a percentage of

                                 
 

home sale revenues

 

2.8%

   

2.7%

   

10 bps

   

2.7%

   

2.7%

   

0 bps

                                     
 

Commissions expenses

$

19,487

 

$

18,884

 

$

603

 

$

59,733

 

$

50,255

 

$

9,478

 

Commissions expenses as a percentage of

                                 
 

home sale revenues

 

3.3%

   

3.3%

   

0 bps

   

3.3%

   

3.3%

   

0 bps

                                     
 

Total selling, general and administrative expenses

$

69,102

 

$

61,904

 

$

7,198

 

$

206,109

 

$

182,621

 

$

23,488

 

Total selling, general and administrative

                                 
 

expenses as a percentage of home

                                 
 

sale revenues

 

11.8%

   

10.8%

   

100 bps

   

11.5%

   

11.8%

   

(30) bps

 

Capitalized Interest

 
   

Three Months Ended

 

Nine Months Ended

   

September 30,

 

September 30,

   

2017

 

2016

 

2017

 

2016

   

(Dollars in thousands)

 

Homebuilding interest incurred

$

13,212

 

$

13,187

 

$

39,594

 

$

39,511

 

Less: Interest capitalized

 

(13,212)

   

(13,187)

   

(39,594)

   

(39,511)

 

Homebuilding interest expensed

$

-

 

$

-

 

$

-

 

$

-

                         
 

Interest capitalized, beginning of period

$

62,091

 

$

77,150

 

$

68,085

 

$

77,541

 

Plus: Interest capitalized during period

 

13,212

   

13,187

   

39,594

   

39,511

 

Less: Previously capitalized interest included in home and land cost of sales

 

(15,087)

   

(15,922)

   

(47,463)

   

(42,637)

 

Interest capitalized, end of period

$

60,216

 

$

74,415

 

$

60,216

 

$

74,415

                                                         

 

View original content:http://www.prnewswire.com/news-releases/mdc-holdings-announces-2017-third-quarter-results-300548220.html

SOURCE M.D.C. Holdings, Inc.

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Equal Housing Opportunity © 2017 M.D.C. Holdings, Inc.