News

M.D.C. Holdings Reports 10% Increase in 2002 First Quarter Earnings
- Record first quarter net income of $32.3 million - Earnings per share of $1.16 vs. $1.09 a year ago - Highest first quarter homebuilding revenues and operating profits in Company history - Home gross margins of 23.4%, 24.4% before interest - Debt-to-capital ratio of .24; debt-to-EBITDA ratio of .70 - Quarterly interest coverage of 15.8, up from 9.9
PRNewswire-FirstCall
DENVER

M.D.C. Holdings, Inc. ( www.RichmondAmerican.com ), whose subsidiaries build homes under the name "Richmond American Homes," today announced net income for the three months ended March 31, 2002 of $32.3 million, or $1.16 per share, compared with net income of $29.3 million, or $1.09 per share, for the same period in 2001. Total revenues for the first quarter of 2002 were $456 million, compared with revenues of $420 million in the 2001 first quarter.

Larry A. Mizel, MDC's chairman and chief executive officer, stated, "We are proud to report another quarter of significant accomplishments by our Company. Not only did we achieve record first quarter levels of net income and earnings per share, but our home orders were the highest for any quarter in the Company's history, producing a quarter-end backlog with a sales value in excess of $1 billion. Also in the 2002 first quarter, we continued our strategy of expanding in our existing markets, and we made significant progress in further enhancing our geographic diversity."

The Company recently announced an agreement to acquire most of the homebuilding assets of W.L. Homes LLC (dba John Laing Homes) in Salt Lake City and in Las Vegas, where the Company will be among the top five builders in this market. In February, the Company announced the hiring of a senior manager to lead its expansion into the Dallas/Fort Worth market.

Mizel continued, "Our successes have continued to be recognized by the firms that rate our public debt. Standard & Poor's recently upgraded our senior credit rating to 'BB+,' and Moody's Investors Service assigned a 'positive' outlook to their 'Ba1' rating of our senior debt. Both of these ratings are one step away from the investment grade rating which already has been assigned to MDC by Fitch Ratings."

Record Homebuilding and Mortgage Lending Results

Operating profits from the Company's homebuilding operations for the first quarter of 2002 increased to $57.8 million, compared with $53.9 million for the same period in 2001. The 2002 increase primarily resulted from a $33,000 increase in the average selling price of homes closed, partially offset by 85 fewer homes closed, compared with the first quarter of 2001. Home gross margins were 23.4% for the three months ended March 31, 2002, compared with 23.3% for the same period in 2001.

Paris G. Reece III, MDC's executive vice president and chief financial officer, said, "We experienced significantly higher year-over-year operating results in Virginia, Maryland and Las Vegas, primarily due to increases in average selling prices of more than $30,000 and improvements in home gross margins of over 400 basis points in each of these markets. In Southern California, higher home closings as well as increased average selling prices and home gross margins combined to produce substantially improved earnings in the 2002 first quarter in this strengthening market. Our first quarter home gross margins improved by 120 basis points from the 2001 fourth quarter primarily as a result of non-recurring adjustments to reduce previous estimates of costs to complete land development in certain active projects in Virginia and Southern California."

Reece continued, "As previously announced, our first quarter results were enhanced by favorable weather for construction in most of our markets, enabling us to close approximately 100 homes that originally were scheduled for completion and closing in the 2002 second quarter. While a small number of these accelerated home closings may be replaced in the second quarter as a result of our record first quarter home orders, most of the increased homes sold will close in the third and fourth quarters of 2002. Our increased first quarter home orders help to confirm the importance of getting new communities open and completing and opening model homes in these communities, particularly in Colorado. With active communities up 10% from 2001 year-end levels, we are on track to achieve our objective of having over 160 communities active by June 30, 2002, which should position us to take further advantage of the strong demand for new homes we have been experiencing in each of our markets."

The Company's mortgage lending operations reported operating profits of $5.0 million for the three months ended March 31, 2002, compared with $4.2 million for the same period in 2001. The improvement in operating profits primarily was due to increased gains from sales of mortgage loans and higher interest revenues in the first quarter of 2002. In addition, the Company recognized increased loan origination fees in the 2002 first quarter primarily due to a greater volume of loans originated for MDC's home buyers. The Company originated or brokered $306 million in mortgage loans for 83% of MDC's home buyers in the 2002 first quarter, compared with $293 million in mortgage loans for 83% of MDC's home buyers for the same period in 2001.

Strengthened Balance Sheet and Improved Operating Efficiency

The Company continued to strengthen its balance sheet and improve the efficiency of its operations in the first quarter of 2002. This success is represented by the achievement of ratios of homebuilding and corporate debt-to-capital and debt-to-EBITDA (as defined below) at March 31, 2002 of .24 and .70, respectively. In addition, MDC improved its return on average assets and EBIT return on capital for the 12 months ended March 31, 2002 to 13.2% and 30.9%, respectively. Each of these ratios rank among the best in the homebuilding industry. The Company's strong operating results over the past year have increased MDC's stockholders' equity by 33% to $694 million, or $25.81 per outstanding share, at March 31, 2002. Further, notwithstanding higher inventory levels needed to support the Company's expanded homebuilding operations, MDC ended the 2002 first quarter with liquidity of $434 million, 27% higher than at March 31, 2001.

First quarter 2002 earnings before interest, taxes, depreciation and amortization ("EBITDA") increased to $63.7 million, compared with $59.9 million for the same period in 2001. This EBITDA increase contributed to the improvement in the Company's ratio of EBITDA to interest incurred to 15.8 for the quarter ended March 31, 2002, compared with 9.9 for the comparable period in 2001.

MDC, whose subsidiaries build homes under the name "Richmond American Homes," is one of the largest homebuilders in the United States. The Company also provides mortgage financing, primarily for MDC's home buyers, through its wholly owned subsidiary, HomeAmerican Mortgage Corporation. MDC is a major regional homebuilder with a significant presence in some of the country's best housing markets. The Company is the largest homebuilder in Colorado; among the top five homebuilders in Northern Virginia, Phoenix and Tucson; and among the top ten homebuilders in suburban Maryland, Las Vegas, Northern California and Southern California.

All earnings per share amounts discussed above are on a diluted basis.

Certain statements in this release 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 the Company 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 and business conditions; (2) interest rate changes; (3) the relative stability of debt and equity markets; (4) competition; (5) the availability and cost of land and other raw materials used by the Company in its homebuilding operations; (6) demographic changes; (7) shortages and the cost of labor; (8) weather related slowdowns; (9) slow growth initiatives; (10) building moratoria; (11) governmental regulation, including the interpretation of tax, labor and environmental laws; (12) changes in consumer confidence and preferences; (13) required accounting changes; (14) terrorist acts and other acts of war; and (15) other factors over which the Company has little or no control.

                          M.D.C. HOLDINGS, INC.
                  Condensed Consolidated Balance Sheets
                              (In thousands)

                                                 March 31,  December 31,
                                                   2002         2001
  ASSETS

    Corporate
      Cash and cash equivalents                    $23,265     $31,322
      Property and equipment, net                    2,097       2,723
      Deferred income taxes                         27,379      30,081
      Deferred debt issue costs, net                 1,885       1,947
      Other assets, net                             13,555       7,597
                                                    68,181      73,670

    Homebuilding
      Cash and cash equivalents                      5,094       4,760
      Home sales and other accounts receivable       5,750       2,621
      Inventories, net
        Housing completed or under construction    475,854     456,752
        Land and land under development            506,536     450,502
      Prepaid expenses and other assets, net        55,277      49,544
                                                 1,048,511     964,179

    Financial Services
      Cash and cash equivalents                        550         518
      Mortgage loans held in inventory              92,135     144,971
      Other assets, net                              4,993       7,618
                                                    97,678     153,107

  Total Assets                                  $1,214,370  $1,190,956

  LIABILITIES

    Corporate
      Accounts payable and accrued expenses        $41,939     $61,135
      Income taxes payable                          22,273       9,953
      Senior notes, net                            174,519     174,503
                                                   238,731     245,591
    Homebuilding
      Accounts payable and accrued expenses        165,043     174,955
      Line of credit                                50,000          --
                                                   215,043     174,955

    Financial Services
      Accounts payable and accrued expenses         22,235      16,937
      Line of credit                                44,833      99,642
                                                    67,068     116,579

        Total Liabilities                          520,842     537,125

  STOCKHOLDERS' EQUITY

        Total Stockholders' Equity                 693,528     653,831

  Total Liabilities and Stockholders' Equity    $1,214,370  $1,190,956



                          M.D.C. HOLDINGS, INC.
               Condensed Consolidated Statements of Income
                 (In thousands, except per share amounts)


                                                   Three Months Ended
                                                        March 31,
                                                   2002         2001
  REVENUES

    Homebuilding                                  $446,761    $411,096
    Financial Services                               9,381       8,341
    Corporate                                          232         285

      Total Revenues                              $456,374    $419,722

  NET INCOME

    Homebuilding                                   $57,844     $53,931
    Financial Services                               5,030       4,204

      Operating Profit                              62,874      58,135

    Corporate general and administrative
     expense, net                                   (9,828)    (10,121)

  Income before income taxes                        53,046      48,014
  Provision for income taxes                       (20,710)    (18,731)

      Net Income                                   $32,336     $29,283

  EARNINGS PER SHARE
      Basic                                          $1.21       $1.13
      Diluted                                        $1.16       $1.09


  WEIGHTED-AVERAGE SHARES OUTSTANDING
      Basic                                         26,714      25,933
      Diluted                                       27,773      26,938

  DIVIDENDS PAID PER SHARE                            $.07        $.06



                          M.D.C. HOLDINGS, INC.
                     Information on Business Segments
                              (In thousands)


                                                      Three Months
                                                     Ended March 31,
                                                   2002         2001
  Homebuilding
    Home sales                                    $445,167    $409,720
    Land sales                                          --         346
    Other revenues                                   1,594       1,030
      Total Homebuilding Revenues                  446,761     411,096

    Home cost of sales                             341,061     314,437
    Land cost of sales                                  --         263
    Marketing                                       25,663      22,853
    General and administrative                      22,193      19,612
                                                   388,917     357,165
      Homebuilding Operating Profit                 57,844      53,931

  Financial Services
    Interest revenues                                1,008         541
    Origination fees                                 4,229       3,685
    Gains on sales of mortgage servicing               471       1,683
    Gains on sales of mortgage loans, net            3,461       2,574
    Mortgage servicing and other                       212        (142)
      Total Financial Services Revenues              9,381       8,341

    General and administrative                       4,351       4,137
      Financial Services Operating Profit            5,030       4,204

  Total Operating Profit                            62,874      58,135

  Corporate
    Interest and other revenues                        232         285
    General and administrative                     (10,060)    (10,406)
      Net Corporate Expenses                        (9,828)    (10,121)

  Income Before Income Taxes                       $53,046     $48,014



                          M.D.C. HOLDINGS, INC.
                         Selected Financial Data
             (Dollars in thousands, except per share amounts)

                                      March 31,  December 31,  March 31,
                                         2002        2001         2001
  BALANCE SHEET DATA

  Stockholders' Equity                 $693,528    $653,831    $521,962
  Book Value Per Share Outstanding       $25.81      $24.59      $20.03
  Homebuilding and Corporate Debt      $224,519    $174,503    $284,458
  Ratio of Homebuilding and Corporate
   Debt to Equity                           .32         .27         .54

  Total Capital (excluding mortgage
   lending debt)                       $918,047    $828,334    $806,420

  Ratio of Homebuilding and Corporate
   Debt to Total Capital                    .24         .21         .35
  Ratio of Homebuilding and Corporate
   Debt to Total Capital (net of cash)      .22         .17         .34

  Ratio of Homebuilding and Corporate
   Debt to EBITDA*                          .70         .55        1.07
  Ratio of Homebuilding and Corporate
   Debt (net of cash) to EBITDA*            .61         .43        1.01

  Total Liquidity                      $433,655    $491,770    $341,380

  Total Homebuilding Inventories       $982,390    $907,254    $872,923
  Interest Capitalized in Inventories   $16,937     $17,358     $19,770
  Interest Capitalized as a Percent
   of Inventories                          1.7%        1.9%        2.3%

  Total Lots Owned                       14,354      13,524      11,453
  Total Lots Under Option                 5,559       6,059       9,703
  Homes Under Construction
   (including models)                     3,248       2,783       3,459
  Active Subdivisions                       150         137         138


                                        Three Months Ended
                                             March 31,
                                         2002        2001
  OPERATING DATA

    EBITDA
      Net Income                        $32,336     $29,283
        Add:
          Income taxes                   20,710      18,731
          Interest in home and land
           cost of sales                  4,462       5,679
          Other fixed charges               963         876
          Depreciation and
          amortization                    5,249       5,376
    Total EBITDA                        $63,720     $59,945

  Ratio of EBITDA to Interest Incurred     15.8         9.9

  Homebuilding and Corporate SG&A as a
   Percent of Home Sales Revenues         13.0%       12.9%

  Interest Incurred                      $4,041      $6,032
  Interest Capitalized                   $4,041      $6,032
  Interest in Home Cost of Sales as a
   Percent of Home Sales Revenues          1.0%        1.3%

  Operating Return on Revenues             7.1%        7.0%
  Operating Return on Average Assets*     13.2%       12.9%
  EBIT Return on Capital*                 30.9%       29.2%
    *Rolling 12 months Ended March 31



                          M.D.C. HOLDINGS, INC.
                      Homebuilding Operational Data
                          (Dollars in thousands)


                                                   Three Months Ended
                                                        March 31,
                                                   2002         2001

  Home Sales Revenues                             $445,167    $409,720

  Average Selling Price Per Home Closed             $265.9      $232.9

  Home Gross Margins                                 23.4%       23.3%
    Excluding Interest in Home Cost of Sales         24.4%       24.6%

  Orders For Homes, net (Units)
    Colorado                                         1,001         968
    California                                         591         441
    Arizona                                            670         732
    Nevada                                             207         268
    Virginia                                           242         220
    Maryland                                            65          98

      Total                                          2,776       2,727

  Homes Closed (Units)
    Colorado                                           609         629
    California                                         292         240
    Arizona                                            438         498
    Nevada                                             141         159
    Virginia                                           130         170
    Maryland                                            64          63

      Total                                          1,674       1,759


                                    March 31,   December 31,  March 31,
                                      2002          2001         2001

  Backlog (Units)
    Colorado                           1,587         1,195        1,724
    California                           789           490          709
    Arizona                              857           625        1,044
    Nevada                               247           181          307
    Virginia                             346           234          378
    Maryland                             158           157          161

      Total                            3,984         2,882        4,323

  Backlog Estimated Sales Value   $1,050,000      $760,000   $1,075,000

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SOURCE: M.D.C. Holdings, Inc.

Contact: Paris G. Reece III, Chief Financial Officer of M.D.C. Holdings,
Inc., +1-303-804-7706, greece@mdch.com; or Rodger Van Allen of Rubenstein
Associates, Inc., +1-212-843-8000, rvanallen@rubenstein.com, for M.D.C.
Holdings, Inc.