News

M.D.C. Holdings Announces 2014 Fourth Quarter Results
PR Newswire
DENVER

DENVER, Jan. 28, 2015 /PRNewswire/ -- M.D.C. Holdings, Inc. (NYSE: MDC) announced results for the quarter ended December 31, 2014.

2014 Fourth Quarter Highlights and Comparisons to 2013 Fourth Quarter

  • Net income of $14.6 million, or $0.30 per share; excluding debt extinguishment charge, net income of $20.1* million, or $0.41* per share vs. $30.7 million or $0.62 per share
    • Year-over-year decrease almost entirely attributable to 2014 fourth quarter debt charge ($8.7 million) and increased effective tax rate (38.7% vs. 10.5%)
  • Income before tax of $23.9 million; excluding debt extinguishment charge, income before tax of $32.6* million vs. $34.3 million
  • Home sale revenues of $493.1 million, up 7% from $460.9 million
    • Homes delivered of 1,242 down from 1,252
    • Average sales price up $28,800 per home, or 8%, to $397,000
  • Gross margin from home sales of 16.3% down from 17.4%
    • Gross margin excluding impairments of 16.5%* vs. 17.5%*
  • Homebuilding SG&A rate of 11.1% vs. 12.0%, a 90 basis point improvement
  • Dollar value of net new orders of $356.4 million, up 25%
  • Ending active community count of 159, up 9%
  • Ending backlog dollar value of $663.2 million, up 31%

Larry A. Mizel, MDC's Chairman and Chief Executive Officer, stated, "We are pleased to announce a successful 2014 fourth quarter, capping a third consecutive year of profitability for our Company. Although we have made significant progress with our business since the end of the downturn, in 2014 the homebuilding industry experienced weaker demand, following a brief surge in sales velocity and home prices during the first half of 2013. This environment led us to increase our use of incentives during 2014 to stimulate demand for new homes in certain markets. Combined with rising construction and land costs, the increased incentives placed pressure on our homebuilding gross margins for both the fourth quarter and full year, although we have been able to offset some of the gross margin pressure by keeping our overhead low."

Mr. Mizel concluded, "The outlook for 2015 is somewhat clouded by uncertainty surrounding global and domestic economic conditions, with the full impact of issues such as falling oil prices yet to be fully understood. Nonetheless, primarily as a result of our land acquisition efforts over the past two years, we have set the stage for our Company's growth in 2015 by expanding both our active communities and our backlog year-over-year. Additionally, during 2014, we reduced our interest costs and extended our next senior note maturity to 2020 by eliminating $500 million of existing senior notes and issuing $250 million of new senior notes. These improvements provide us with the opportunity for top and bottom line expansion in future periods, in spite of the obstacles that may remain for the housing market."

Homebuilding

Home sale revenues for the 2014 fourth quarter increased 7% to $493.1 million, compared to $460.9 million for the prior year period.  The increase in revenue was primarily driven by an 8% increase in the average selling price due to the mix of homes closed and, to a lesser extent, price appreciation. 

Gross margin from home sales for the 2014 fourth quarter was 16.3%, compared with 17.4% for the year-earlier period and 16.5% in the prior quarter. Gross margin from home sales excluding impairments was 16.5%* versus 17.5%* in the prior year and 16.5%* in the prior quarter. The year-over-year decrease was primarily due to the use of additional incentives used to stimulate demand and higher construction and land costs in our homes delivered.

SG&A expenses as a percentage of home sale revenues decreased by 90 basis points to 11.1% for the 2014 fourth quarter versus 12.0% for the same period in 2013. The improvement from the prior year was primarily the result of lower compensation-related expenses and, to a lesser extent, lower legal expenses.

The dollar value of net new orders for the 2014 fourth quarter increased 25% from the same period in 2013 to $356.4 million. The increase was driven by an 18% increase in unit volume, resulting primarily from a 16% increase in our average active communities, and a 6% increase in the average selling price of net new home orders to $402,000 compared to $379,000 for the same period in 2013. Our cancellation rate for the 2014 fourth quarter was 28% compared to 26% in the same period in the prior year.

Our backlog value at the end of the 2014 fourth quarter was up 31% year-over-year to $663.2 million. The increase was driven primarily by a 20% increase in units in backlog, due primarily to the net sales activity discussed above, coupled with a 9% increase in the average selling price of homes in backlog, primarily driven by a shift in mix.

During the quarter, we completed the early redemption of $250 million in Senior Notes due July 2015. As a result of this transaction, we recognized an $8.7 million charge related to the extinguishment of debt.

Financial Services

Income before taxes from our financial services operations for the 2014 fourth quarter was $7.0 million, up $1.7 million compared to $5.3 million for the 2013 fourth quarter, as both our mortgage and insurance operations experienced growth in pretax income. The improvement in pretax income for our mortgage operations was driven primarily by an increase in the number of loans locked, due to higher net sales activity, and lower SG&A expenses. 

Income Taxes

During the 2014 fourth quarter, we recognized $9.2 million of income tax expense resulting in an effective tax rate of 38.7% while for the 2013 fourth quarter, we had income tax expense of $3.6 million, resulting in an effective tax rate of 10.5%, due primarily to an $11.3 million reversal of our deferred tax asset valuation allowance.

About MDC

Since 1972, MDC's homebuilding subsidiary companies, which operate under the name Richmond American Homes, have built and financed the American dream for more than 180,000 homebuyers. 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, Philadelphia, Orlando, Jacksonville, South Florida and Seattle. MDC'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 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-K for the year ended December 31, 2014, 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.

*Please see "Reconciliation of Non-GAAP Financial Measures" at the end of this release.

 

M.D.C. HOLDINGS, INC.

Consolidated Statements of Operations and Comprehensive Income


























Three Months Ended


Year Ended


December 31,


December 31,


2014


2013


2014


2013


(Dollars in thousands, except per share amounts)

Homebuilding:

(Unaudited)


(Unaudited)




Home sale revenues

$

493,070


$

460,939


$

1,647,398


$

1,626,707

Land sale revenues


62



636



3,233



2,468

Total home and land sale revenues


493,132



461,575



1,650,631



1,629,175

Home cost of sales


(411,931)



(380,086)



(1,365,621)



(1,336,978)

Land cost of sales


(52)



(491)



(2,559)



(1,961)

Inventory impairments


(910)



(569)



(1,760)



(919)

Total cost of sales


(412,893)



(381,146)



(1,369,940)



(1,339,858)

Gross margin


80,239



80,429



280,691



289,317

Selling, general and administrative expenses


(54,601)



(55,421)



(203,253)



(213,283)

Interest and other income


2,222



6,193



26,310



29,798

Interest expense


-



-



(685)



(1,726)

Other expense


(2,279)



(2,177)



(4,813)



(3,783)

Losses from early extinguishments of debt


(8,741)



-



(18,153)



-

Other-than-temporary impairment of












 marketable securities


-



-



(4,293)



-

Homebuilding pretax income


16,840



29,024



75,804



100,323













Financial Services:












Revenues


12,540



10,587



43,953



51,259

Expenses


(6,152)



(6,127)



(22,334)



(25,271)

Interest and other income


657



834



3,052



3,514

Financial services pretax income


7,045



5,294



24,671



29,502













Income before income taxes


23,885



34,318



100,475



129,825

Benefit from (provision for) income taxes


(9,246)



(3,609)



(37,332)



184,560

Net income

$

14,639


$

30,709


$

63,143


$

314,385

























Other comprehensive income (loss) related to available for sale securities, net of tax













3,082



4,237



(1,120)



6,737

Comprehensive income

$

17,721


$

34,946


$

62,023


$

321,122













Earnings per share












Basic

$

0.30


$

0.62


$

1.29


$

6.39

Diluted

$

0.30


$

0.62


$

1.29


$

6.34













Weighted average common shares outstanding












Basic


48,635,629



48,497,526



48,615,541



48,453,119

Diluted


48,785,682



48,728,889



48,817,566



48,831,785













Dividends declared per share

$

0.25


$

-


$

1.00


$

-

 

 

M.D.C. HOLDINGS, INC.

Consolidated Balance Sheets














December 31,


December 31,


2014


2013

ASSETS

(Dollars in thousands, except


per share amounts)

Homebuilding:

(Unaudited)




Cash and cash equivalents

$

122,642


$

148,634

Marketable securities


140,878



569,021

Restricted cash


2,816



2,195

Trade and other receivables


28,555



23,407

Inventories:






  Housing completed or under construction


732,692



636,700

  Land and land under development


935,268



774,961

  Total inventories


1,667,960



1,411,661

Property and equipment, net


30,491



31,248

Deferred tax asset, net


140,486



176,262

Metropolitan district bond securities (related party)


18,203



12,729

Prepaid and other assets


67,996



53,525

Total homebuilding assets


2,220,027



2,428,682

Financial Services:






Cash and cash equivalents


31,183



50,704

Marketable securities


15,262



19,046

Mortgage loans held-for-sale, net


88,392



92,578

Other assets


3,574



4,439

Total financial services assets


138,411



166,767

      Total Assets

$

2,358,438


$

2,595,449

LIABILITIES AND EQUITY






Homebuilding:






Accounts payable

$

35,445


$

15,046

Accrued liabilities


115,117



152,821

Revolving credit facility


15,000



-

Senior notes, net


846,450



1,095,620

Total homebuilding liabilities


1,012,012



1,263,487

Financial Services:






Accounts payable and accrued liabilities


57,268



55,639

Mortgage repurchase facility


60,822



63,074

Total financial services liabilities


118,090



118,713

      Total Liabilities


1,130,102



1,382,200

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; 48,831,639 and 48,788,887 issued and outstanding at December 31, 2014 and December 31, 2013, respectively







488



488

Additional paid-in-capital


909,974



908,090

Retained earnings


307,419



293,096

Accumulated other comprehensive income


10,455



11,575

Total Stockholders' Equity


1,228,336



1,213,249

Total Liabilities and Stockholders' Equity

$

2,358,438


$

2,595,449

 

 

M.D.C. HOLDINGS, INC.

Consolidated Statement of Cash Flows


























Three Months Ended


Year Ended


December 31,


December 31,


2014


2013


2014


2013


(Dollars in thousands)


(Unaudited)


(Unaudited)




Operating Activities:












Net income

$

14,639


$

30,709


$

63,143


$

314,385

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























Losses from early extinguishments of debt


8,741



-



18,153



-

Stock-based compensation expense


1,224



1,412



5,978



9,652

Depreciation and amortization


1,000



904



3,928



3,864

Inventory impairments


910



569



1,760



919

Other-than-temporary impairment of marketable securities


-



-



4,293



-

Net loss on sale of marketable securities


312



-



(7,310)



-

Amortization of discount / premiums on marketable debt securities


65



(597)



566



219

Deferred income tax expense (benefit)


5,863



2,486



34,226



(187,171)

Excess tax benefits from stock-based compensation


(26)



(391)



(26)



(391)

Net changes in assets and liabilities:












      Restricted cash


218



(9)



(621)



(336)

      Trade and other receivables


(817)



5,785



(6,638)



4,186

      Mortgage loans held-for-sale


(30,260)



(18,238)



4,186



27,375

      Housing completed or under construction


103,472



(3,046)



(96,936)



(124,211)

      Land and land under development


(80,998)



(74,852)



(160,463)



(285,070)

      Prepaid expenses and other assets


2,211



471



(11,873)



(13,562)

      Accounts payable and accrued liabilities


(16,945)



11,108



(16,013)



(19,408)

Net cash provided by (used in) operating activities


9,609



(43,689)



(163,647)



(269,549)













Investing Activities:












Purchases of marketable securities


(18,863)



(35,078)



(428,709)



(404,965)

Maturities of marketable securities


2,250



27,100



167,339



159,592

Sales of marketable securities


315,391



29,673



687,692



216,756

Purchases of property and equipment


(1,323)



(507)



(3,242)



(1,785)

Net cash provided by (used in) investing activities


297,455



21,188



423,080



(30,402)













Financing Activities:












Advances (payments) on mortgage repurchase facility, net


29,040



24,162



(2,252)



(13,253)

Proceeds from issuance of senior notes


-



-



248,375



346,938

Repayment of senior notes


(258,532)



-



(517,650)



-

Advances on revolving credit facility, net


5,000



-



15,000



-

Dividend payments


(12,204)



-



(48,820)



-

Excess tax benefits from stock-based compensation


26



391



26



391

Proceeds from exercise of stock options


312



-



375



5,118

Net cash provided by (used in) financing activities


(236,358)



24,553



(304,946)



339,194













Net increase (decrease) in cash and cash equivalents


70,706



2,052



(45,513)



39,243

Cash and cash equivalents:












      Beginning of period


83,119



197,286



199,338



160,095

      End of period

$

153,825


$

199,338


$

153,825


$

199,338

 

 

M.D.C. HOLDINGS, INC.

Homebuilding Operational Data


New Home Deliveries

















































Three Months Ended December 31,



2014


2013


% Change



Homes


Dollar Value


Average Price


Homes


Dollar Value


Average Price


Homes


Dollar Value


Average Price



(Dollars in thousands)


Arizona

200


$

62,093


$

310.5


192


$

50,646


$

263.8


4%


23%


18%


California

253



121,974



482.1


174



75,164



432.0


45%


62%


12%


Nevada

169



53,355



315.7


112



35,515



317.1


51%


50%


(0)%


Washington

59



21,918



371.5


64



22,004



343.8


(8)%


(0)%


8%


West

681



259,340



380.8


542



183,329



338.2


26%


41%


13%


Colorado

287



124,226



432.8


354



132,409



374.0


(19)%


(6)%


16%


Utah

54



17,905



331.6


37



12,195



329.6


46%


47%


1%


Mountain

341



142,131



416.8


391



144,604



369.8


(13)%


(2)%


13%


Maryland

73



36,345



497.9


131



58,484



446.4


(44)%


(38)%


12%


Virginia

54



26,029



482.0


107



53,807



502.9


(50)%


(52)%


(4)%


Florida

93



29,225



314.2


81



20,715



255.7


15%


41%


23%


East

220



91,599



416.4


319



133,006



416.9


(31)%


(31)%


(0)%


Total

1,242


$

493,070


$

397.0


1,252


$

460,939


$

368.2


(1)%


7%


8%

















































Year Ended December 31,



2014


2013


% Change



Homes


Dollar

Value


Average Price


Homes


Dollar

Value


Average Price


Homes


Dollar

Value


Average Price



(Dollars in thousands)


Arizona

731


$

200,994


$

275.0


635


$

156,308


$

246.2


15%


29%


12%


California

624



296,189



474.7


643



243,804



379.2


(3)%


21%


25%


Nevada

564



176,371



312.7


593



163,127



275.1


(5)%


8%


14%


Washington

267



96,496



361.4


333



108,038



324.4


(20)%


(11)%


11%


West

2,186



770,050



352.3


2,204



671,277



304.6


(1)%


15%


16%


Colorado

1,172



478,669



408.4


1,287



479,619



372.7


(9)%


(0)%


10%


Utah

165



53,136



322.0


208



65,292



313.9


(21)%


(19)%


3%


Mountain

1,337



531,805



397.8


1,495



544,911



364.5


(11)%


(2)%


9%


Maryland

305



144,695



474.4


368



159,169



432.5


(17)%


(9)%


10%


Virginia

234



115,001



491.5


355



177,142



499.0


(34)%


(35)%


(2)%


Florida

304



85,847



282.4


288



74,208



257.7


6%


16%


10%


East

843



345,543



409.9


1,011



410,519



406.1


(17)%


(16)%


1%


Total

4,366


$

1,647,398


$

377.3


4,710


$

1,626,707


$

345.4


(7)%


1%


9%

 

 

M.D.C. HOLDINGS, INC.



Homebuilding Operational Data






Net New Orders




























































Three Months Ended December 31,


2014


2013


% 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

141


$

39,533


$

280.4


1.31


137


$

34,817


$

254.1


2.10


3%


14%


10%


(38)%

California

138



68,509



496.4


2.19


110



58,546



532.2


3.12


25%


17%


(7)%


(30)%

Nevada

94



33,750



359.0


1.87


88



27,285



310.1


1.89


7%


24%


16%


(1)%

Washington

47



17,517



372.7


1.57


38



13,277



349.4


1.01


24%


32%


7%


55%

West

420



159,309



379.3


1.67


373



133,925



359.0


2.02


13%


19%


6%


(17)%

Colorado

266



116,740



438.9


2.18


184



73,557



399.8


1.61


45%


59%


10%


35%

Utah

46



14,512



315.5


2.45


16



5,186



324.1


1.07


188%


180%


(3)%


129%

Mountain

312



131,252



420.7


2.21


200



78,743



393.7


1.55


56%


67%


7%


43%

Maryland

44



21,992



499.8


1.30


62



29,586



477.2


1.27


(29)%


(26)%


5%


2%

Virginia

49



24,031



490.4


1.72


42



20,377



485.2


1.51


17%


18%


1%


14%

Florida

62



19,776



319.0


1.45


75



22,597



301.3


2.00


(17)%


(12)%


6%


(28)%

East

155



65,799



424.5


1.48


179



72,560



405.4


1.57


(13)%


(9)%


5%


(6)%

Total

887


$

356,360


$

401.8


1.78


752


$

285,228


$

379.3


1.76


18%


25%


6%


1%


























































Year Ended December 31,


2014


2013


% 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

802


$

235,041


$

293.1


2.04


645


$

165,101


$

256.0


2.91


24%


42%


14%


(30)%

California

669



327,248



489.2


3.22


561



237,694



423.7


3.90


19%


38%


15%


(17)%

Nevada

579



192,708



332.8


2.93


529



162,270



306.7


3.47


9%


19%


9%


(16)%

Washington

276



102,795



372.4


2.30


300



98,156



327.2


2.19


(8)%


5%


14%


5%

West

2,326



857,792



368.8


2.54


2,035



663,221



325.9


3.11


14%


29%


13%


(18)%

Colorado

1,334



576,322



432.0


2.88


1,234



466,285



377.9


2.67


8%


24%


14%


8%

Utah

179



59,304



331.3


2.55


153



48,893



319.6


1.80


17%


21%


4%


42%

Mountain

1,513



635,626



420.1


2.84


1,387



515,178



371.4


2.53


9%


23%


13%


12%

Maryland

244



117,646



482.2


1.43


314



145,310



462.8


1.45


(22)%


(19)%


4%


(1)%

Virginia

221



111,068



502.6


1.96


273



136,054



498.4


2.07


(19)%


(18)%


1%


(5)%

Florida

319



109,141



342.1


1.85


318



84,897



267.0


2.09


0%


29%


28%


(11)%

East

784



337,855



430.9


1.72


905



366,261



404.7


1.81


(13)%


(8)%


6%


(5)%

Total

4,623


$

1,831,273


$

396.1


2.43


4,327


$

1,544,660


$

357.0


2.54


7%


19%


11%


(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



















December 31,


%




2014


2013


Change



Arizona

36


25


44%



California

19


11


73%



Nevada

16


15


7%



Washington

10


13


(23)%



West

81


64


27%



Colorado

40


38


5%



Utah

6


5


20%



Mountain

46


43


7%



Maryland

9


17


(47)%



Virginia

10


10


0%



Florida

13


12


8%



East

32


39


(18)%



Total

159


146


9%



Average for Quarter Ended

166


143


16%



Average for Year Ended

159


142


12%


 

Backlog




























































At December 31,



2014


2013


% Change



Homes


Dollar

Value


Average Price


Homes


Dollar

Value


Average Price


Homes


Dollar

Value


Average Price



(Dollars in thousands)


Arizona

231


$

75,419


$

326.5


160


$

43,184


$

269.9


44%


75%


21%


California

192



98,057



510.7


147



71,855



488.8


31%


36%


4%


Nevada

155



61,020



393.7


140



49,350



352.5


11%


24%


12%


Washington

55



20,655



375.5


46



16,430



357.2


20%


26%


5%


West

633



255,151



403.1


493



180,819



366.8


28%


41%


10%


Colorado

579



266,280



459.9


417



171,688



411.7


39%


55%


12%


Utah

40



13,580



339.5


26



8,422



323.9


54%


61%


5%


Mountain

619



279,860



452.1


443



180,110



406.6


40%


55%


11%


Maryland

68



34,293



504.3


129



65,435



507.2


(47)%


(48)%


(1)%


Virginia

90



45,521



505.8


103



51,594



500.9


(13)%


(12)%


1%


Florida

109



48,412



444.1


94



28,037



298.3


16%


73%


49%


East

267



128,226



480.2


326



145,066



445.0


(18)%


(12)%


8%


Total

1,519


$

663,237


$

436.6


1,262


$

505,995


$

400.9


20%


31%


9%

 

 

M.D.C. HOLDINGS, INC.

Homebuilding Operational Data


Homes Completed or Under Construction (WIP lots)

















December 31,


%



2014


2013


Change


Unsold:







Completed

483


378


28%


Under construction

583


1,038


(44)%


Total unsold started homes

1,066


1,416


(25)%


Sold homes under construction or completed

1,089


981


11%


Model homes

272


258


5%


Total homes completed or under construction

2,427


2,655


(9)%

 

 

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



































December 31, 2014


December 31, 2013






Lots Owned


Lots Optioned


Total


Lots Owned


Lots Optioned


Total


Total % Change



Arizona

2,266


45


2,311


2,838


74


2,912


(21)%



California

1,600


94


1,694


1,765


129


1,894


(11)%



Nevada

1,589


286


1,875


1,503


391


1,894


(1)%



Washington

886


-


886


537


182


719


23%



West

6,341


425


6,766


6,643


776


7,419


(9)%



Colorado

4,083


929


5,012


4,292


1,093


5,385


(7)%



Utah

598


-


598


538


19


557


7%



Mountain

4,681


929


5,610


4,830


1,112


5,942


(6)%



Maryland

417


417


834


446


304


750


11%



Virginia

525


469


994


469


133


602


65%



Florida

891


184


1,075


650


423


1,073


0%



East

1,833


1,070


2,903


1,565


860


2,425


20%



Total

12,855


2,424


15,279


13,038


2,748


15,786


(3)%


 

 

M.D.C. HOLDINGS, INC.

Reconciliations of Non-GAAP Financial Measures


Gross Margin from Home Sales Excluding Interest and Impairments (Unaudited)


Gross Margin from Home Sales Excluding Impairments and Gross Margin from Home Sales Excluding Interest and Impairments are non-GAAP financial measures. We believe this information is meaningful as it isolates the impact that interest and impairments have on our Gross Margin from Home Sales and permits investors to make better comparisons with our competitors, who also break out and adjust gross margins in a similar fashion.










































Three Months Ended December 31,


Year Ended December 31,


2014


Gross Margin %


2013


Gross Margin %


2014


Gross Margin %


2013


Gross Margin %


(Dollars in thousands)

Gross Margin

$

80,239


16.3%


$

80,429


17.4%


$

280,691


17.0%


$

289,317


17.8%

Less: Land Sales Revenue


(62)





(636)





(3,233)





(2,468)



Add: Land Cost of Sales


52





491





2,559





1,961



Gross Margin from Home Sales


80,229


16.3%



80,284


17.4%



280,017


17.0%



288,810


17.8%

Add: Inventory Impairments


910





569





1,760





919



Gross Margin from Home Sales




















Excluding Impairments


81,139


16.5%



80,853


17.5%



281,777


17.1%



289,729


17.8%

Add: Interest in Cost of Sales


17,296





16,140





60,508





54,261



Gross Margin from Home Sales




















Excluding Impairments and




















Interest in Cost of Sales

$

98,435


20.0%


$

96,993


21.0%


$

342,285


20.8%


$

343,990


21.1%

 

 

Pretax Income, Net Income and Diluted Earnings per Share before Debt Extinguishment Charge (Unaudited)


Pretax Income, Net Income and Diluted Earnings per Share before Debt Extinguishment Charge are non-GAAP financial measures. We believe this information is meaningful as it isolates the impact that the debt extinguishment costs have on the results of MDC and permits investors to make better comparisons with our competitors, who may not have incurred debt extinguishment charges.














Three Months Ended December 31,


2014


2013


(Dollars in thousands)

Income before tax

$

23,885


$

34,318

Losses from early extinguishments of debt


8,741



-

Adjusted income before tax


32,626



34,318

Adjusted income tax provision


(12,568)



(3,609)

Adjusted net income

$

20,058


$

30,709


























Three Months Ended December 31,


2014


2013


Dollars


EPS


Dollars


EPS


(Dollars in thousands, except per share amounts)

Numerator for diluted earnings per share under two class method

$

14,582


$

0.30


$

30,163


$

0.62

Effect of debt extinguishment charge on numerator for diluted earnings per share under two class method













5,398



0.11



-



-

Numerator for adjusted diluted earnings per share under two class method

$

19,980


$

0.41


$

30,163


$

0.62













Weighted average diluted shares outstanding


48,785,682






48,728,889




 

 

 

 

 

SOURCE M.D.C. Holdings, Inc.