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
Year Ended
December 31,
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 $(40)
$ - $51
$ -
ecurities
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, December 31,
2023 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 747 726
outstanding at December 31, 2023 and December 31, 2022, respectively
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
Year Ended
December 31,
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 Average Homes Home Sale Average Homes Home Average
Price
Revenues Price Revenues Price Sale
Revenues
(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 Average Homes Home Sale Average Homes Home Average
Price
Revenues Price Revenues Price Sale
Revenues
(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 Average Monthly Homes Dollar Average Monthly Homes Dollar Average Monthly
Value Price (1) Value Price
Value Price (1) Absorption Absorption Absorption
Rate (2)
Rate (2) 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 Average Monthly Homes Dollar Average Monthly Homes Dollar Average Monthly
Value Price Value Price
Value Price Absorption Absorption Absorption
Rate (2) Rate (2) 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 Average Homes Dollar Average Homes Dollar Average
Value Price Value Price Value 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 Lots Total Lots Lots Total Total
Owned Optioned Owned Optioned % 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 4.8 % 4.5 % 30 bps 4.5 % 5.2 % -70 bps
percentage of home sale revenues
Marketing expenses $26,199 $25,308 $891 $96,807 $103,330 $(6,523)
Marketing expenses as a percentage of home 2.0 % 1.7 % 30 bps 2.1 % 1.8 % 30 bps
sale revenues
Commissions expenses $37,998 $39,875 $(1,877) $129,209 $140,716 $(11,507)
Commissions expenses as a percentage of home 2.9 % 2.7 % 20 bps 2.9 % 2.5 % 40 bps
sale revenues
Total selling, general and administrative expenses $126,862 $131,797 $(4,935) $429,894 $536,395 $(106,501)
Total selling, general and administrative 9.7 % 8.9 % 80 bps 9.5 % 9.6 % -10 bps
expenses as a percentage of home sale revenues
Capitalized Interest
Three Months Ended
Year Ended
December 31,
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 (18,284) (21,081) (65,163) (67,583)
sales
Interest capitalized, end of period $64,659 $59,921 $64,659 $59,921
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SOURCE M.D.C. Holdings, Inc.
