M.D.C. Holdings Announces 2023 Fourth Quarter and Full Year Results

DENVER, Jan. 30, 2024 /PRNewswire/ -- M.D.C. Holdings, Inc. (NYSE: MDC), announced results for the quarter and full year ended December 31, 2023. As previously announced on January 18, 2024, MDC has entered into a definitive agreement to be acquired by a wholly-owned subsidiary of Sekisui House in an all-cash transaction (the "Merger"). Consummation of the Merger is subject to shareholder approval, regulatory approval and completion of other customary closing conditions.

About MDC
M.D.C. Holdings, Inc. was founded in 1972. MDC's homebuilding subsidiaries, which operate under the name Richmond American Homes, have helped more than 240,000 homebuyers achieve the American Dream since 1977. One of the largest homebuilders in the nation, MDC is committed to quality and value that is reflected in each home its subsidiaries build. The Richmond American companies have operations in Alabama, Arizona, California, Colorado, Florida, Idaho, Maryland, Nevada, New Mexico, Oregon, Pennsylvania, Tennessee, Texas, Utah, Virginia and Washington. Mortgage lending, insurance and title services are offered by the following MDC subsidiaries, respectively: HomeAmerican Mortgage Corporation, American Home Insurance Agency, Inc. and American Home Title and Escrow Company. M.D.C. Holdings, Inc. stock is traded on the New York Stock Exchange under the symbol "MDC." For more information, visit www.mdcholdings.com.

Forward-Looking Statements

Any statements regarding our business, financial condition, results of operation, cash flows, strategies and prospects, may 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, 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 orders addressing the COVID-19 pandemic, 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, 2023, which is scheduled to be filed with the Securities and Exchange Commission today.  All forward-looking statements are made as of their date, and the risk that actual results will differ materially from expectations expressed 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
(Unaudited)



Three Months Ended
December 31,


Year Ended
December 31,


2023


2022


2023


2022










(Dollars in thousands, except per share amounts)

Homebuilding:








Home sale revenues

$      1,309,760


$      1,487,279


$      4,520,296


$      5,586,264

Home cost of sales

(1,062,125)


(1,170,989)


(3,684,487)


(4,214,379)

Inventory impairments

(2,200)


(92,800)


(29,700)


(121,875)

Total cost of sales

(1,064,325)


(1,263,789)


(3,714,187)


(4,336,254)

Gross profit

245,435


223,490


806,109


1,250,010

Selling, general and administrative expenses

(126,862)


(131,797)


(429,894)


(536,395)

Interest and other income

21,755


7,046


73,567


10,843

Other income (expense), net

(637)


(4,258)


350


(32,991)

Homebuilding pretax income

139,691


94,481


450,132


691,467









Financial Services:








Revenues

36,696


32,262


122,570


131,723

Expenses

(16,712)


(16,887)


(62,942)


(71,327)

Other income (expense), net

4,603


3,364


16,345


7,991

Financial services pretax income

24,587


18,739


75,973


68,387









Income before income taxes

164,278


113,220


526,105


759,854

Provision for income taxes

(44,771)


(33,444)


(125,100)


(197,715)

Net income

$         119,507


$           79,776


$         401,005


$         562,139









Other comprehensive income net of tax:








Unrealized gain related to available-for-sale debt
ecurities

$                (40)


$                  —


$                  51


$                  —

Other comprehensive income

(40)



51


Comprehensive income

$         119,467


$           79,776


$         401,056


$         562,139









Earnings per share:








Basic

$               1.60


$               1.11


$               5.42


$               7.87

Diluted

$               1.56


$               1.08


$               5.29


$               7.67









Weighted average common shares outstanding:








Basic

74,216,586


71,646,237


73,505,508


71,035,558

Diluted

76,126,163


73,179,135


75,357,965


72,943,844









Dividends declared per share

$               0.55


$               0.50


$               2.10


$               2.00

 

M.D.C. HOLDINGS, INC.
Consolidated Balance Sheets
(Unaudited) 



December 31,
2023


December 31,
2022






(Dollars in thousands, except

per share amounts)

ASSETS




Homebuilding:




Cash and cash equivalents

$      1,475,964


$         696,075

Restricted cash

4,094


3,143

Marketable securities


443,712

Trade and other receivables

119,004


116,364

Inventories:




Housing completed or under construction

1,881,268


1,722,061

Land and land under development

1,419,778


1,793,718

Total inventories

3,301,046


3,515,779

Property and equipment, net

82,218


63,730

Deferred tax assets, net

38,830


49,252

Prepaids and other assets

76,036


70,007

Total homebuilding assets

5,097,192


4,958,062

Financial Services:




Cash and cash equivalents

162,839


17,877

Marketable securities

78,250


117,388

Mortgage loans held-for-sale, net

258,212


229,513

Other assets

34,592


40,432

Total financial services assets

533,893


405,210

Total Assets

$      5,631,085


$      5,363,272

LIABILITIES AND EQUITY




Homebuilding:




Accounts payable

$         114,852


$         109,218

Accrued and other liabilities

326,478


383,406

Revolving credit facility

10,000


10,000

Senior notes, net

1,483,404


1,482,576

Total homebuilding liabilities

1,934,734


1,985,200

Financial Services:




Accounts payable and accrued liabilities

113,485


110,536

Mortgage repurchase facility

204,981


175,752

Total financial services liabilities

318,466


286,288

Total Liabilities

2,253,200


2,271,488

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; 74,661,479 and 72,585,596 issued and
     outstanding at December 31, 2023 and December 31, 2022, respectively

747


726

Additional paid-in-capital

1,824,434


1,784,173

Retained earnings

1,552,653


1,306,885

Accumulated other comprehensive income

51


Total Stockholders' Equity

3,377,885


3,091,784

Total Liabilities and Stockholders' Equity

$      5,631,085


$      5,363,272

 

M.D.C. HOLDINGS, INC.
Consolidated Statement of Cash Flows
(Unaudited)



Three Months Ended
December 31,


Year Ended
December 31,


2023


2022


2023


2022










(Dollars in thousands)

Operating Activities:








Net income

$     119,507


$       79,776


$     401,005


$     562,139

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








Stock-based compensation expense

9,110


10,637


23,468


60,985

Depreciation and amortization

7,683


7,088


25,553


27,751

Inventory impairments

2,200


92,800


29,700


121,875

Project abandonment costs

918


4,371


(45)


33,129

Amortization of discount of marketable debt securities

(4,809)


(3,208)


(29,673)


(4,290)

Deferred income tax expense

7,800


(27,130)


10,408


(31,310)

Net changes in assets and liabilities:








Trade and other receivables

(22,993)


(2,463)


21,986


(21,784)

Mortgage loans held-for-sale, net

(93,958)


(38,680)


(28,699)


53,016

Housing completed or under construction

39,035


505,348


(163,877)


186,265

Land and land under development

(106,658)


(75,662)


349,783


(95,402)

Prepaids and other assets

(789)


39,786


(3,886)


31,736

Accounts payable and accrued liabilities

(18,565)


(30,970)


(74,093)


(18,464)

Net cash provided by (used in) operating activities

(61,519)


561,693


561,630


905,646









Investing Activities:








Purchases of marketable securities

(77,979)


(365,684)


(1,166,412)


(656,810)

Maturities of marketable securities

430,000


100,000


1,679,000


100,000

Purchases of property and equipment

(28,265)


(7,646)


(43,145)


(29,075)

Net cash provided by (used in) investing activities

323,756


(273,330)


469,443


(585,885)









Financing Activities:








Advances on mortgage repurchase facility, net

59,511


(20,462)


29,229


(80,548)

Dividend payments

(41,065)


(35,632)


(155,237)


(142,417)

Payments of deferred debt issuance costs

(36)



(36)


Issuance of shares under stock-based compensation programs, net

(39)


28,385


20,773


16,840

Net cash provided by (used in) financing activities

18,371


(27,709)


(105,271)


(206,125)









Net increase in cash, cash equivalents and restricted cash

280,608


260,654


925,802


113,636

Cash, cash equivalents and restricted cash:








Beginning of period

1,362,289


456,441


717,095


603,459

End of period

$  1,642,897


$     717,095


$  1,642,897


$     717,095









Reconciliation of cash, cash equivalents and restricted cash:








Homebuilding:








Cash and cash equivalents

$  1,475,964


$     696,075


$  1,475,964


$     696,075

Restricted cash

4,094


3,143


4,094


3,143

Financial Services:








Cash and cash equivalents

162,839


17,877


162,839


17,877

Total cash, cash equivalents and restricted cash

$  1,642,897


$     717,095


$  1,642,897


$     717,095

 

New Home Deliveries



Three Months Ended December 31,


2023


2022


% Change


Homes


Home Sale

Revenues


Average

Price


Homes


Home Sale

Revenues


Average

Price


Homes


Home

Sale

Revenues


Average Price




















(Dollars in thousands)

West

1,397


$  778,410


$      557.2


1,308


$  756,109


$      578.1


7 %


3 %


(4) %

Mountain

561


336,220


599.3


756


492,850


651.9


(26) %


(32) %


(8) %

East

442


195,130


441.5


490


238,320


486.4


(10) %


(18) %


(9) %

Total

2,400


$  1,309,760


$      545.7


2,554


$  1,487,279


$      582.3


(6) %


(12) %


(6) %



Year Ended December 31,


2023


2022


% Change


Homes


Home Sale

Revenues


Average

Price


Homes


Home Sale

Revenues


Average

Price


Homes


Home

Sale

Revenues


Average Price




















(Dollars in thousands)

West

4,821


$  2,624,373


$      544.4


5,234


$  3,024,056


$      577.8


(8) %


(13) %


(6) %

Mountain

2,028


1,267,586


625.0


2,616


1,689,376


645.8


(22) %


(25) %


(3) %

East

1,379


628,337


455.6


1,860


872,832


469.3


(26) %


(28) %


(3) %

Total

8,228


$  4,520,296


$      549.4


9,710


$  5,586,264


$      575.3


(15) %


(19) %


(5) %

 

Net New Orders



Three Months Ended December 31,


2023


2022


% Change


Homes


Dollar

Value


Average

Price 1


Monthly

Absorption

Rate 2


Homes


Dollar
Value


Average
Price 1


Monthly

Absorption
Rate 2


Homes


Dollar
Value


Average
Price


Monthly

Absorption

Rate


























(Dollars in thousands)

West

827


$   457,532


$  553.2


1.96


155


$   67,710


$  436.8


0.39


434 %


576 %


27 %


406 %

Mountain

372


219,867


591.0


2.29


(37)


(25,924)


700.6


(0.24)


N/A


N/A


N/A


N/A

East

316


138,770


439.1


2.79


72


32,649


453.5


0.64


339 %


325 %


(3) %


333 %

Total

1,515


$   816,169


$  538.7


2.17


190


$   74,435


$  391.8


0.29


697 %


996 %


38 %


660 %


1 Gross order average selling price for the three months ended December 31, 2023 decreased approximately 2% year-over-year to $543,000.

 


Year Ended December 31,


2023


2022


% Change


Homes


Dollar

Value


Average

Price


Monthly

Absorption

Rate 2


Homes


Dollar
Value


Average
Price


Monthly

Absorption

Rate 2


Homes


Dollar
Value


Average
Price


Monthly

Absorption

Rate


























(Dollars in thousands)

West

4,202


$  2,399,987


$   571.2


2.51


2,909


$  1,735,202


$   596.5


2.01


44 %


38 %


(4) %


25 %

Mountain

1,657


1,004,360


606.1


2.50


1,157


788,734


681.7


1.85


43 %


27 %


(11) %


35 %

East

1,285


578,427


450.1


2.85


978


489,946


501.0


2.25


31 %


18 %


(10) %


27 %

Total

7,144


$  3,982,774


$   557.5


2.57


5,044


$  3,013,882


$   597.5


2.02


42 %


32 %


(7) %


27 %


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

 

Active Subdivisions









Average Active Subdivisions


Active Subdivisions


Three Months Ended


Year Ended


December 31,


%


December 31,


%


December 31,


%


2023


2022


Change


2023


2022


Change


2023


2022


Change

West

138


134


3 %


141


133


5 %


140


120


17 %

Mountain

53


53


— %


54


51


6 %


55


52


6 %

East

35


38


(8) %


38


37


1 %


38


36


6 %

Total

226


225


— %


233


222


5 %


233


208


12 %

 

Backlog



December 31,


2023


2022


% Change


Homes


Dollar

Value


Average

Price


Homes


Dollar

Value


Average

Price


Homes


Dollar

Value


Average

Price




















(Dollars in thousands)

West

1,272


$  789,317


$      620.5


1,891


$  1,049,805


$      555.2


(33) %


(25) %


12 %

Mountain

344


237,154


689.4


715


515,460


720.9


(52) %


(54) %


(4) %

East

274


130,524


476.4


368


187,629


509.9


(26) %


(30) %


(7) %

Total

1,890


$  1,156,995


$      612.2


2,974


$  1,752,894


$      589.4


(36) %


(34) %


4 %

 

Homes Completed or Under Construction (WIP lots)



December 31,


%


2023


2022


Change

Unsold:






Completed

339


396


(14) %

Under construction

2,709


1,063


155 %

Total unsold started homes

3,048


1,459


109 %

Sold homes under construction or completed

1,812


2,756


(34) %

Model homes under construction or completed

542


555


(2) %

Total homes completed or under construction

5,402


4,770


13 %

 

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



December 31, 2023


December 31, 2022




Lots

Owned


Lots

Optioned


Total


Lots

Owned


Lots

Optioned


Total


Total

% Change

West

9,957


1,186


11,143


12,667


687


13,354


(17) %

Mountain

5,038


1,088


6,126


5,398


1,561


6,959


(12) %

East

3,004


2,142


5,146


3,534


1,455


4,989


3 %

Total

17,999


4,416


22,415


21,599


3,703


25,302


(11) %

 

Selling, General and Administrative Expenses



Three Months Ended December 31,


Year Ended December 31,


2023


2022


Change


2023


2022


Change














(Dollars in thousands)

General and administrative expenses

$    62,665


$    66,614


$       (3,949)


$  203,878


$  292,349


$     (88,471)

General and administrative expenses as a
percentage of home sale revenues

4.8 %


4.5 %


30 bps


4.5 %


5.2 %


-70 bps

Marketing expenses

$    26,199


$    25,308


$            891


$    96,807


$  103,330


$       (6,523)

Marketing expenses as a percentage of home
sale revenues

2.0 %


1.7 %


30 bps


2.1 %


1.8 %


30 bps

Commissions expenses

$    37,998


$    39,875


$       (1,877)


$  129,209


$  140,716


$     (11,507)

Commissions expenses as a percentage of home
sale revenues

2.9 %


2.7 %


20 bps


2.9 %


2.5 %


40 bps

Total selling, general and administrative expenses

$  126,862


$  131,797


$       (4,935)


$  429,894


$  536,395


$   (106,501)

Total selling, general and administrative
expenses as a percentage of home sale revenues

9.7 %


8.9 %


80 bps


9.5 %


9.6 %


-10 bps

 

Capitalized Interest



Three Months Ended
December 31,


Year Ended
December 31,


2023


2022


2023


2022










(Dollars in thousands)

Homebuilding interest incurred

$           17,515


$         17,419


$        69,901


$         69,450

Less: Interest capitalized

(17,515)


(17,419)


(69,901)


(69,450)

Homebuilding interest expensed

$                  —


$                —


$               —


$                —









Interest capitalized, beginning of period

$           65,428


$         63,583


$        59,921


$         58,054

Plus: Interest capitalized during period

17,515


17,419


69,901


69,450

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

(18,284)


(21,081)


(65,163)


(67,583)

Interest capitalized, end of period

$           64,659


$         59,921


$        64,659


$         59,921

 

SOURCE M.D.C. Holdings, Inc.