Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - M.D.C. HOLDINGS, INC. | d388507d8k.htm |
News Release
M.D.C. HOLDINGS ANNOUNCES 2012 SECOND QUARTER RESULTS
DENVER, COLORADO, Tuesday, July 31, 2012. M.D.C. Holdings, Inc. (NYSE: MDC) announced results for the quarter ended June 30, 2012.
2012 Second Quarter Highlights and Comparisons to 2011 Second Quarter
| • | Net income of $10.6 million, or $0.22 per diluted share, vs. net loss of $28.0 million, or $0.60 per diluted share |
| • | 1,402 net new orders, up 32% |
| • | Backlog of 2,028 homes, up 42%; backlog dollar value up 52% to $657.5 million |
| • | Home sale revenues of $256.5 million, up 24% |
| • | 861 homes closed, up 21% |
| • | Gross margin from home sales of 14.2% vs. 8.9% |
| • | No inventory impairment charges versus $8.6 million for the 2011 second quarter |
| • | Home gross margin before impairment charges, interest and warranty adjustments improved 200 basis points to 16.9%* |
| • | Homebuilding SG&A expenses of $39.2 million, a decrease of $9.9 million, or 20% |
| • | SG&A as a percentage of home sale revenues of 15.3%, an 850 basis point improvement |
| • | G&A expense included $3.8 million in litigation recoveries |
Larry A. Mizel, MDC’s Chairman and Chief Executive Officer, stated, “I am pleased to announce a second quarter profit of $0.22 per share, with net income improving by nearly $40 million over the prior year. We believe that our favorable results are largely attributable to our implementation of several key strategic initiatives, which we announced over the past few quarters, combined with modest improvements in homebuilding and overall market conditions.”
Mizel continued, “We dramatically improved our operating leverage in the second quarter by accelerating our sales absorption pace and reducing overhead costs. These efforts drove a 21% year-over-year increase in new home deliveries and a 20% year-over-year reduction in our homebuilding SG&A costs. In addition, our interest expense decreased by $7.3 million for the second quarter, largely due to the debt reduction we undertook during the last half of 2011, and our impairment charges fell $8.6 million against a backdrop of stabilizing new home prices. As a result, our homebuilding segment achieved an operating profit for the first time in five years.”
Mr. Mizel concluded, “As the overall housing market has continued to show signs of recovery over the last several quarters, our efforts to improve our sales process, product offering and cancellation rate have helped us improve sales results. During the second quarter, net new orders
1
increased 32% year-over-year to a five-year second quarter high, driven by a 24% improvement in our absorption pace per community and a 900 basis point reduction in our cancellation rate. With our quarter-end backlog up 42% over the prior year, we are well-positioned to achieve continued gains in operating leverage during the second half of 2012 and achieve our goal of reaching profitability for 2012.”
Homebuilding
Home sale revenues for the 2012 second quarter increased 24% to $256.5 million compared to $206.2 million for the prior year period. The increase in revenues resulted primarily from a 21% increase in homes closed to 861 homes as compared to 709 in the prior year. The Company’s average selling price for homes closed was $297,900, up 2% year-over-year compared to $290,800 for the prior year period, due to increases in most markets.
Gross margin from home sales for the 2012 second quarter was 14.2% versus 8.9% for the year earlier period. The 2012 second quarter did not include any inventory impairments or benefits related to warranty accrual adjustments. However, the 2011 second quarter included $8.6 million in inventory impairments and a $1.8 million benefit related to a warranty accrual reduction.
Excluding inventory impairments, warranty accrual adjustments and previously capitalized interest in cost of sales, adjusted gross margin from home sales was 16.9%* for the 2012 second quarter, compared to 14.9%* for the 2011 second quarter and up marginally compared to 16.7%* for the 2012 first quarter. The 200 basis point year-over-year improvement in the Company’s adjusted gross margin from home sales was driven by closing a significantly higher percentage of homes started with buyers under contract, which historically have been more profitable than homes started without a buyer under contract. In addition, our gross margin percentage benefited from a meaningful year-over-year reduction in incentives, partially offset by reduced customer spending on home upgrades, as we are including a higher level of upgrades in our base home price in communities across the country.
The Company’s 2012 second quarter homebuilding selling, general and administrative (“SG&A”) expenses decreased 20% to $39.2 million, compared to $49.2 million for 2011 second quarter, down 850 basis points as a percentage of home sale revenues to 15.3% versus 23.8% for the 2011 second quarter. The lower level of SG&A expenses and SG&A rate was primarily attributable to various cost reduction efforts, including lower compensation expense due to lower headcount, higher operating leverage from increased revenues and $3.8 million in legal recoveries.
Net new orders for the 2012 second quarter increased 32% to 1,402 homes, compared to 1,064 homes during the same period in 2011. The Company’s monthly sales absorption rate for the 2012 second quarter was 2.6 per community, compared to 2.1 per community for the 2011 second quarter. The Company’s cancellation rate for the 2012 second quarter was 20% versus 29% in the prior year second quarter.
2
The Company ended the 2012 second quarter with 2,028 homes in backlog, its highest backlog level since the 2007 third quarter, with an estimated sales value of $657.5 million, compared with a backlog of 1,424 homes with an estimated sales value of $433.5 million at June 30, 2011.
Financial Services
Income before taxes from our financial services segment for the 2012 second quarter was $6.7 million, compared to $3.1 million for the 2011 second quarter. The increase in pretax income primarily reflected a $4.4 million increase in our mortgage operations pretax income from $1.3 million in the 2011 second quarter to $5.7 million for the 2012 second quarter. The improvement in our mortgage profitability was driven largely by a $4.1 million increase in the gains on sales of mortgage loans due to favorable mortgage market conditions and a decrease in the level of special financing programs that we offered our homebuyers.
About MDC
Since 1972, MDC’s subsidiary companies have built and financed the American dream for more than 165,000 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 Francisco Bay Area, Washington D.C., Baltimore, Philadelphia, Jacksonville and Seattle. 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 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 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 conditions, including changes in consumer confidence, inflation or deflation and employment levels; (2) changes in business conditions experienced by the Company, including cancellation rates, net home orders, home gross margins, and land and home values; (3) changes in interest rates, mortgage lending programs and the availability of credit; (4) changes in the market value of the Company’s investments in marketable securities; (5) uncertainty in the mortgage lending
3
industry, including repurchase requirements associated with HomeAmerican’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 the Company 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; (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; and (16) other factors over which the Company has little or no control. Additional information about the risks and uncertainties applicable to the Company’s business is contained in the Company’s Form 10-Q for the quarter ended June 30, 2012, 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. The Company 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.
| Contact: | Robert N. Martin |
| Vice President of Finance |
| (720) 977-3431 |
| bob.martin@mdch.com |
| * | Please see “Reconciliation of Non-GAAP Financial Measures” on page 12. |
4
M.D.C. HOLDINGS, INC.
Consolidated Statements of Operations and Comprehensive Income
| Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| (Dollars in thousands, except per share amounts) (Unaudited) |
||||||||||||||||
| Homebuilding: |
||||||||||||||||
| Home sale revenues |
$ | 256,532 | $ | 206,163 | $ | 441,210 | $ | 369,546 | ||||||||
| Land sale revenues |
1,815 | 2,565 | 3,405 | 2,769 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total home sale and land revenues |
258,347 | 208,728 | 444,615 | 372,315 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Home cost of sales |
(220,220 | ) | (179,097 | ) | (378,874 | ) | (320,078 | ) | ||||||||
| Land cost of sales |
(1,718 | ) | (1,741 | ) | (3,208 | ) | (1,758 | ) | ||||||||
| Inventory impairments |
— | (8,633 | ) | — | (8,633 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total cost of sales |
(221,938 | ) | (189,471 | ) | (382,082 | ) | (330,469 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Gross margin |
36,409 | 19,257 | 62,533 | 41,846 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Selling, general and administrative expenses |
(39,223 | ) | (49,158 | ) | (73,347 | ) | (96,811 | ) | ||||||||
| Interest income |
5,373 | 6,986 | 11,286 | 13,474 | ||||||||||||
| Interest expense |
— | (7,334 | ) | (808 | ) | (16,001 | ) | |||||||||
| Other income (expense) |
418 | (2,643 | ) | 576 | (884 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Homebuilding pretax income (loss) |
2,977 | (32,892 | ) | 240 | (58,376 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Financial Services: |
||||||||||||||||
| Revenues |
10,587 | 6,731 | 18,306 | 12,434 | ||||||||||||
| Expenses |
(3,909 | ) | (3,642 | ) | (6,766 | ) | (7,565 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Financial services pretax income |
6,678 | 3,089 | 11,540 | 4,869 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income (loss) before income taxes |
9,655 | (29,803 | ) | 11,780 | (53,507 | ) | ||||||||||
| Benefit (provision) for income taxes |
983 | 1,823 | 1,123 | 5,648 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income (loss) |
$ | 10,638 | $ | (27,980 | ) | $ | 12,903 | $ | (47,859 | ) | ||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Other comprehensive income (loss): |
||||||||||||||||
| Unrealized gain related to available-for-sale securities |
(698 | ) | (1,971 | ) | 5,850 | 1,332 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Comprehensive income (loss) |
$ | 9,940 | $ | (29,951 | ) | $ | 18,753 | $ | (46,527 | ) | ||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Earnings (loss) per share: |
||||||||||||||||
| Basic |
$ | 0.22 | $ | (0.60 | ) | $ | 0.27 | $ | (1.03 | ) | ||||||
| Diluted |
$ | 0.22 | $ | (0.60 | ) | $ | 0.26 | $ | (1.03 | ) | ||||||
| Weighted Average Common Shares Outstanding: |
||||||||||||||||
| Basic |
47,398,088 | 46,719,233 | 47,367,051 | 46,717,408 | ||||||||||||
| Diluted |
47,752,729 | 46,719,233 | 47,677,067 | 46,717,408 | ||||||||||||
| Dividends declared per share |
$ | 0.25 | $ | 0.25 | $ | 0.50 | $ | 0.50 | ||||||||
5
M.D.C. HOLDINGS, INC.
Consolidated Balance Sheets
| June 30, 2012 |
December 31, 2011 |
|||||||
| (Dollars in thousands, except per share amounts) (Unaudited) |
||||||||
| ASSETS | ||||||||
| Homebuilding: |
||||||||
| Cash and cash equivalents |
$ | 298,274 | $ | 316,418 | ||||
| Marketable securities |
454,775 | 485,434 | ||||||
| Restricted cash |
2,260 | 667 | ||||||
| Trade and other receivables |
40,341 | 21,593 | ||||||
| Inventories: |
||||||||
| Housing completed or under construction |
437,287 | 300,714 | ||||||
| Land and land under development |
414,466 | 505,338 | ||||||
| Property and equipment, net |
34,471 | 36,277 | ||||||
| Deferred tax asset, net of valuation allowance of $273,828 and $281,178 at June 30, 2012 and December 31, 2011, respectively |
— | — | ||||||
| Prepaid expenses and other assets |
44,272 | 50,423 | ||||||
|
|
|
|
|
|||||
| Total homebuilding assets |
1,726,146 | 1,716,864 | ||||||
|
|
|
|
|
|||||
| Financial Services: |
||||||||
| Cash and cash equivalents |
27,850 | 26,943 | ||||||
| Marketable securities |
32,256 | 34,509 | ||||||
| Mortgage loans held-for-sale, net |
65,687 | 78,335 | ||||||
| Prepaid expenses and other assets |
3,975 | 2,074 | ||||||
|
|
|
|
|
|||||
| Total financial services assets |
129,768 | 141,861 | ||||||
|
|
|
|
|
|||||
| Total Assets |
$ | 1,855,914 | $ | 1,858,725 | ||||
|
|
|
|
|
|||||
| LIABILITIES AND EQUITY | ||||||||
| Homebuilding: |
||||||||
| Accounts payable |
$ | 42,829 | $ | 25,645 | ||||
| Accrued liabilities |
111,730 | 119,188 | ||||||
| Senior notes, net |
744,470 | 744,108 | ||||||
|
|
|
|
|
|||||
| Total homebuilding liabilities |
899,029 | 888,941 | ||||||
| Financial Services: |
||||||||
| Accounts payable and accrued liabilities |
52,965 | 52,446 | ||||||
| Mortgage repurchase facility |
32,660 | 48,702 | ||||||
|
|
|
|
|
|||||
| Total financial services liabilities |
85,625 | 101,148 | ||||||
|
|
|
|
|
|||||
| Total Liabilities |
984,654 | 990,089 | ||||||
|
|
|
|
|
|||||
| 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; 47,990,975 issued and outstanding at June 30, 2012 and 48,017,108 and 47,957,196 issued and outstanding, respectively, at December 31, 2011 |
480 | 480 | ||||||
| Additional paid-in-capital |
870,331 | 863,128 | ||||||
| Retained earnings |
1,839 | 12,927 | ||||||
| Accumulated other comprehensive income (loss) |
(1,390 | ) | (7,240 | ) | ||||
| Treasury stock, at cost; no shares at June 30, 2012 and 59,912 at December 31, 2011 |
— | (659 | ) | |||||
|
|
|
|
|
|||||
| Total Stockholders’ Equity |
871,260 | 868,636 | ||||||
|
|
|
|
|
|||||
| Total Liabilities and Stockholders’ Equity |
$ | 1,855,914 | $ | 1,858,725 | ||||
|
|
|
|
|
|||||
6
M.D.C. HOLDINGS, INC.
Consolidated Statement of Cash Flows
| Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| (Dollars in thousands) (Unaudited) |
||||||||||||||||
| Operating Activities: |
||||||||||||||||
| Net income (loss) |
$ | 10,638 | $ | (27,980 | ) | $ | 12,903 | $ | (47,859 | ) | ||||||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
||||||||||||||||
| Stock-based compensation expense |
5,110 | 3,559 | 7,721 | 6,680 | ||||||||||||
| Depreciation and amortization |
1,349 | 1,627 | 2,656 | 3,217 | ||||||||||||
| Inventory impairments and write-offs of land option deposits |
229 | 11,244 | 311 | 12,305 | ||||||||||||
| Amortization of (premium) discount on marketable debt securities |
1 | 476 | (151 | ) | 912 | |||||||||||
| Net changes in assets and liabilities: |
||||||||||||||||
| Restricted cash |
(1,180 | ) | (185 | ) | (1,593 | ) | (184 | ) | ||||||||
| Trade and other receivables |
(7,283 | ) | 19,717 | (18,345 | ) | 18,935 | ||||||||||
| Mortgage loans held-for-sale |
(10,697 | ) | (1,503 | ) | 12,648 | 25,914 | ||||||||||
| Housing completed or under construction |
(90,512 | ) | 24,618 | (136,387 | ) | 51,590 | ||||||||||
| Land and land under development |
74,048 | (35,115 | ) | 91,048 | (108,622 | ) | ||||||||||
| Prepaid expenses and other assets |
562 | (2,220 | ) | 3,956 | (1,376 | ) | ||||||||||
| Accounts payable |
9,377 | 5,935 | 17,169 | (5,910 | ) | |||||||||||
| Accrued liabilities |
11,581 | (11,729 | ) | (7,526 | ) | (24,859 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net cash provided by (used in) operating activities |
3,223 | (11,556 | ) | (15,590 | ) | (69,257 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Investing Activities: |
||||||||||||||||
| Purchase of marketable securities |
(107,178 | ) | (142,997 | ) | (292,788 | ) | (258,423 | ) | ||||||||
| Maturity of marketable securities |
54,500 | 305,000 | 106,000 | 451,000 | ||||||||||||
| Sale of marketable securities |
95,180 | 54,727 | 225,701 | 129,677 | ||||||||||||
| Purchase of property and equipment and other |
(304 | ) | (28,812 | ) | (668 | ) | (29,295 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net cash provided by (used in) investing activities |
42,198 | 187,918 | 38,245 | 292,959 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Financing Activities: |
||||||||||||||||
| Payments on mortgage repurchase facility |
(36,784 | ) | (21,681 | ) | (90,409 | ) | (47,115 | ) | ||||||||
| Advances on mortgage repurchase facility |
43,604 | 23,933 | 74,367 | 30,669 | ||||||||||||
| Dividend payments |
(11,996 | ) | (11,868 | ) | (23,990 | ) | (23,692 | ) | ||||||||
| Proceeds from exercise of stock options |
140 | 46 | 140 | 46 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net cash provided by (used in) financing activities |
(5,036 | ) | (9,570 | ) | (39,892 | ) | (40,092 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net increase (decrease) in cash and cash equivalents |
40,385 | 166,792 | (17,237 | ) | 183,610 | |||||||||||
| Cash and cash equivalents: |
||||||||||||||||
| Beginning of period |
285,739 | 589,043 | 343,361 | 572,225 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| End of period |
$ | 326,124 | $ | 755,835 | $ | 326,124 | $ | 755,835 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
7
M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
New Home Deliveries:
| Three Months Ended June 30, | ||||||||||||||||||||||||||||||||||||
| 2012 | 2011 | % Change | ||||||||||||||||||||||||||||||||||
| Homes | Dollar Value |
Average Price |
Homes | Dollar Value |
Average Price |
Homes | Dollar Value |
Average Price |
||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||
| Arizona |
127 | $ | 27,086 | $ | 213.3 | 98 | $ | 18,299 | $ | 186.7 | 30 | % | 48 | % | 14 | % | ||||||||||||||||||||
| California |
133 | 43,195 | 324.8 | 62 | 19,704 | 317.8 | 115 | % | 119 | % | 2 | % | ||||||||||||||||||||||||
| Nevada |
155 | 28,460 | 183.6 | 80 | 14,731 | 184.1 | 94 | % | 93 | % | 0 | % | ||||||||||||||||||||||||
| Washington |
59 | 17,170 | 291.0 | 51 | 13,779 | 270.2 | 16 | % | 25 | % | 8 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| West |
474 | 115,911 | 244.5 | 291 | 66,513 | 228.6 | 63 | % | 74 | % | 7 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Colorado |
185 | 66,254 | 358.1 | 182 | 60,047 | 329.9 | 2 | % | 10 | % | 9 | % | ||||||||||||||||||||||||
| Utah |
46 | 13,142 | 285.7 | 66 | 17,876 | 270.8 | -30 | % | -26 | % | 5 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Mountain |
231 | 79,396 | 343.7 | 248 | 77,923 | 314.2 | -7 | % | 2 | % | 9 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Maryland |
47 | 19,777 | 420.8 | 49 | 20,267 | 413.6 | -4 | % | -2 | % | 2 | % | ||||||||||||||||||||||||
| Virginia |
70 | 32,171 | 459.6 | 72 | 30,573 | 424.6 | -3 | % | 5 | % | 8 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| East |
117 | 51,948 | 444.0 | 121 | 50,840 | 420.2 | -3 | % | 2 | % | 6 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Florida |
37 | 8,726 | 235.8 | 48 | 10,594 | 220.7 | -23 | % | -18 | % | 7 | % | ||||||||||||||||||||||||
| Illinois |
2 | 551 | 275.5 | 1 | 293 | 293.0 | 100 | % | 88 | % | -6 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Other Homebuilding |
39 | 9,277 | 237.9 | 49 | 10,887 | 222.2 | -20 | % | -15 | % | 7 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Total |
861 | $ | 256,532 | $ | 297.9 | 709 | $ | 206,163 | $ | 290.8 | 21 | % | 24 | % | 2 | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||
| 2012 | 2011 | % Change | ||||||||||||||||||||||||||||||||||
| Homes | Dollar Value |
Average Price |
Homes | Dollar Value |
Average Price |
Homes | Dollar Value |
Average Price |
||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||
| Arizona |
215 | $ | 45,043 | $ | 209.5 | 175 | $ | 31,911 | $ | 182.3 | 23 | % | 41 | % | 15 | % | ||||||||||||||||||||
| California |
188 | 61,188 | 325.5 | 110 | 34,671 | 315.2 | 71 | % | 76 | % | 3 | % | ||||||||||||||||||||||||
| Nevada |
261 | 50,056 | 191.8 | 146 | 27,763 | 190.2 | 79 | % | 80 | % | 1 | % | ||||||||||||||||||||||||
| Washington |
103 | 29,166 | 283.2 | 51 | 13,777 | 270.1 | 102 | % | 112 | % | 5 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| West |
767 | 185,453 | 241.8 | 482 | 108,122 | 224.3 | 59 | % | 72 | % | 8 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Colorado |
310 | 111,217 | 358.8 | 348 | 115,022 | 330.5 | -11 | % | -3 | % | 9 | % | ||||||||||||||||||||||||
| Utah |
98 | 27,242 | 278.0 | 120 | 32,473 | 270.6 | -18 | % | -16 | % | 3 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Mountain |
408 | 138,459 | 339.4 | 468 | 147,495 | 315.2 | -13 | % | -6 | % | 8 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Maryland |
91 | 38,571 | 423.9 | 106 | 44,486 | 419.7 | -14 | % | -13 | % | 1 | % | ||||||||||||||||||||||||
| Virginia |
129 | 58,326 | 452.1 | 115 | 48,791 | 424.3 | 12 | % | 20 | % | 7 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| East |
220 | 96,897 | 440.4 | 221 | 93,277 | 422.1 | 0 | % | 4 | % | 4 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Florida |
83 | 19,850 | 239.2 | 91 | 20,359 | 223.7 | -9 | % | -3 | % | 7 | % | ||||||||||||||||||||||||
| Illinois |
2 | 551 | 275.5 | 1 | 293 | 293.0 | 100 | % | 88 | % | -6 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Other Homebuilding |
85 | 20,401 | 240.0 | 92 | 20,652 | 224.5 | -8 | % | -1 | % | 7 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Total |
1,480 | $ | 441,210 | $ | 298.1 | 1,263 | $ | 369,546 | $ | 292.6 | 17 | % | 19 | % | 2 | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
8
M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
Net New Orders:
| Three Months Ended June 30, | ||||||||||||||||||||||||||||||||||||
| 2012 | 2011 | % Change | ||||||||||||||||||||||||||||||||||
| Homes | Dollar Value |
Average Price |
Homes | Dollar Value |
Average Price |
Dollar Homes |
Average Value |
Price | ||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||
| Arizona |
246 | $ | 56,108 | $ | 228.1 | 164 | $ | 32,465 | $ | 198.0 | 50 | % | 73 | % | 15 | % | ||||||||||||||||||||
| California |
217 | 78,895 | 363.6 | 117 | 34,358 | 293.7 | 85 | % | 130 | % | 24 | % | ||||||||||||||||||||||||
| Nevada |
225 | 50,163 | 222.9 | 154 | 29,138 | 189.2 | 46 | % | 72 | % | 18 | % | ||||||||||||||||||||||||
| Washington |
69 | 19,346 | 280.4 | 26 | 6,727 | 258.7 | 165 | % | 188 | % | 8 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| West |
757 | 204,512 | 270.2 | 461 | 102,688 | 222.8 | 64 | % | 99 | % | 21 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Colorado |
311 | 108,045 | 347.4 | 232 | 76,945 | 331.7 | 34 | % | 40 | % | 5 | % | ||||||||||||||||||||||||
| Utah |
69 | 21,467 | 311.1 | 109 | 30,948 | 283.9 | -37 | % | -31 | % | 10 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Mountain |
380 | 129,512 | 340.8 | 341 | 107,893 | 316.4 | 11 | % | 20 | % | 8 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Maryland |
113 | 50,441 | 446.4 | 74 | 29,011 | 392.0 | 53 | % | 74 | % | 14 | % | ||||||||||||||||||||||||
| Virginia |
98 | 52,828 | 539.1 | 95 | 41,429 | 436.1 | 3 | % | 28 | % | 24 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| East |
211 | 103,269 | 489.4 | 169 | 70,440 | 416.8 | 25 | % | 47 | % | 17 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Florida |
53 | 12,450 | 234.9 | 91 | 19,813 | 217.7 | -42 | % | -37 | % | 8 | % | ||||||||||||||||||||||||
| Illinois |
1 | 315 | 315.0 | 2 | 580 | 290.0 | -50 | % | -46 | % | 9 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Other |
54 | 12,765 | 236.4 | 93 | 20,393 | 219.3 | -42 | % | -37 | % | 8 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Total |
1,402 | $ | 450,058 | $ | 321.0 | 1,064 | $ | 301,414 | $ | 283.3 | 32 | % | 49 | % | 13 | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||
| 2012 | 2011 | % Change | ||||||||||||||||||||||||||||||||||
| Homes | Dollar Value |
Average Price |
Homes | Dollar Value |
Average Price |
Dollar Homes |
Average Value |
Price | ||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||
| Arizona |
433 | $ | 94,282 | $ | 217.7 | 286 | $ | 54,880 | $ | 191.9 | 51 | % | 72 | % | 13 | % | ||||||||||||||||||||
| California |
338 | 119,026 | 352.2 | 194 | 56,815 | 292.9 | 74 | % | 109 | % | 20 | % | ||||||||||||||||||||||||
| Nevada |
391 | 83,879 | 214.5 | 242 | 46,036 | 190.2 | 62 | % | 82 | % | 13 | % | ||||||||||||||||||||||||
| Washington |
145 | 42,042 | 289.9 | 26 | 6,727 | 258.7 | 458 | % | 525 | % | 12 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| West |
1,307 | 339,229 | 259.5 | 748 | 164,458 | 219.9 | 75 | % | 106 | % | 18 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Colorado |
546 | 192,192 | 352.0 | 413 | 138,748 | 336.0 | 32 | % | 39 | % | 5 | % | ||||||||||||||||||||||||
| Utah |
137 | 40,271 | 293.9 | 176 | 48,550 | 275.9 | -22 | % | -17 | % | 7 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Mountain |
683 | 232,463 | 340.4 | 589 | 187,298 | 318.0 | 16 | % | 24 | % | 7 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Maryland |
196 | 85,048 | 433.9 | 120 | 50,448 | 420.4 | 63 | % | 69 | % | 3 | % | ||||||||||||||||||||||||
| Virginia |
188 | 94,186 | 501.0 | 163 | 70,083 | 430.0 | 15 | % | 34 | % | 17 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| East |
384 | 179,234 | 466.8 | 283 | 120,531 | 425.9 | 36 | % | 49 | % | 10 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Florida |
89 | 20,584 | 231.3 | 142 | 31,960 | 225.1 | -37 | % | -36 | % | 3 | % | ||||||||||||||||||||||||
| Illinois |
2 | 550 | 275.0 | 7 | 2,041 | 291.6 | -71 | % | -73 | % | -6 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Other |
91 | 21,134 | 232.2 | 149 | 34,001 | 228.2 | -39 | % | -38 | % | 2 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Total |
2,465 | $ | 772,060 | $ | 313.2 | 1,769 | $ | 506,288 | $ | 286.2 | 39 | % | 52 | % | 9 | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
9
M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
Active Subdivisions:
| June 30, | ||||||||||||
| 2012 | 2011 | % Change | ||||||||||
| Arizona |
17 | 30 | -43 | % | ||||||||
| California |
19 | 16 | 19 | % | ||||||||
| Nevada |
19 | 17 | 12 | % | ||||||||
| Washington |
11 | 9 | 22 | % | ||||||||
|
|
|
|
|
|
|
|||||||
| West |
66 | 72 | -8 | % | ||||||||
|
|
|
|
|
|
|
|||||||
| Colorado |
47 | 40 | 18 | % | ||||||||
| Utah |
17 | 21 | -19 | % | ||||||||
|
|
|
|
|
|
|
|||||||
| Mountain |
64 | 61 | 5 | % | ||||||||
|
|
|
|
|
|
|
|||||||
| Maryland |
19 | 13 | 46 | % | ||||||||
| Virginia |
12 | 12 | 0 | % | ||||||||
|
|
|
|
|
|
|
|||||||
| East |
31 | 25 | 24 | % | ||||||||
|
|
|
|
|
|
|
|||||||
| Florida |
12 | 17 | -29 | % | ||||||||
| Illinois |
— | 1 | -100 | % | ||||||||
|
|
|
|
|
|
|
|||||||
| Other Homebuilding |
12 | 18 | -33 | % | ||||||||
|
|
|
|
|
|
|
|||||||
| Total |
173 | 176 | -2 | % | ||||||||
|
|
|
|
|
|
|
|||||||
| Average for quarter ended |
180 | 167 | 8 | % | ||||||||
|
|
|
|
|
|
|
|||||||
Backlog:
| June 30, | ||||||||||||||||||||||||||||||||||||
| 2012 | 2011 | % Change | ||||||||||||||||||||||||||||||||||
| Homes | Dollar Value |
Average Price |
Homes | Dollar Value |
Average Price |
Homes | Dollar Value |
Average Price |
||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||||||
| Arizona |
346 | $ | 76,564 | $ | 221.3 | 195 | $ | 39,644 | $ | 203.3 | 77 | % | 93 | % | 9 | % | ||||||||||||||||||||
| California |
268 | 92,161 | 343.9 | 163 | 48,420 | 297.1 | 64 | % | 90 | % | 16 | % | ||||||||||||||||||||||||
| Nevada |
286 | 63,283 | 221.3 | 172 | 35,382 | 205.7 | 66 | % | 79 | % | 8 | % | ||||||||||||||||||||||||
| Washington |
96 | 30,438 | 317.1 | 51 | 13,778 | 270.2 | 88 | % | 121 | % | 17 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| West |
996 | 262,446 | 263.5 | 581 | 137,224 | 236.2 | 71 | % | 91 | % | 12 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Colorado |
469 | 171,862 | 366.4 | 338 | 118,124 | 349.5 | 39 | % | 45 | % | 5 | % | ||||||||||||||||||||||||
| Utah |
107 | 30,116 | 281.5 | 125 | 34,518 | 276.1 | -14 | % | -13 | % | 2 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Mountain |
576 | 201,978 | 350.7 | 463 | 152,642 | 329.7 | 24 | % | 32 | % | 6 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Maryland |
218 | 90,570 | 415.5 | 140 | 61,170 | 436.9 | 56 | % | 48 | % | -5 | % | ||||||||||||||||||||||||
| Virginia |
162 | 82,723 | 510.6 | 118 | 53,098 | 450.0 | 37 | % | 56 | % | 13 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| East |
380 | 173,293 | 456.0 | 258 | 114,268 | 442.9 | 47 | % | 52 | % | 3 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Florida |
76 | 19,734 | 259.7 | 115 | 27,203 | 236.5 | -34 | % | -27 | % | 10 | % | ||||||||||||||||||||||||
| Illinois |
— | — | N/A | 7 | 2,138 | 305.4 | -100 | % | -100 | % | N/A | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Other Homebuilding |
76 | 19,734 | 259.7 | 122 | 29,341 | 240.5 | -38 | % | -33 | % | 8 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Total |
2,028 | $ | 657,451 | $ | 324.2 | 1,424 | $ | 433,475 | $ | 304.4 | 42 | % | 52 | % | 7 | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
10
M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
Homes Completed or Under Construction (WIP lots):
| June 30, | ||||||||||||
| 2012 | 2011 | % Change | ||||||||||
| Unsold |
||||||||||||
| Completed |
138 | 42 | 229 | % | ||||||||
| Under construction—frame |
264 | 353 | -25 | % | ||||||||
| Under construction—foundation |
215 | 101 | 113 | % | ||||||||
|
|
|
|
|
|
|
|||||||
| Total unsold started homes |
617 | 496 | 24 | % | ||||||||
|
|
|
|
|
|
|
|||||||
| Sold homes under construction or completed |
1,392 | 843 | 65 | % | ||||||||
| Model homes |
221 | 231 | -4 | % | ||||||||
|
|
|
|
|
|
|
|||||||
| Total homes completed or under construction |
2,230 | 1,570 | 42 | % | ||||||||
|
|
|
|
|
|
|
|||||||
Lots Owned and Optioned (including homes completed or under construction):
| June 30, 2012 | June 30, 2011 | |||||||||||||||||||||||
| Lots Owned |
Lots Optioned |
Total | Lots Owned |
Lots Optioned |
Total | |||||||||||||||||||
| Arizona |
774 | 108 | 882 | 1,292 | 108 | 1,400 | ||||||||||||||||||
| California |
1,196 | — | 1,196 | 1,568 | — | 1,568 | ||||||||||||||||||
| Nevada |
966 | 27 | 993 | 1,366 | 398 | 1,764 | ||||||||||||||||||
| Washington |
397 | 161 | 558 | 324 | 42 | 366 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| West |
3,333 | 296 | 3,629 | 4,550 | 548 | 5,098 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Colorado |
3,236 | 584 | 3,820 | 3,626 | 602 | 4,228 | ||||||||||||||||||
| Utah |
492 | 13 | 505 | 689 | 298 | 987 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Mountain |
3,728 | 597 | 4,325 | 4,315 | 900 | 5,215 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Maryland |
607 | 399 | 1,006 | 514 | 795 | 1,309 | ||||||||||||||||||
| Virginia |
596 | 121 | 717 | 713 | 234 | 947 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| East |
1,203 | 520 | 1,723 | 1,227 | 1,029 | 2,256 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Florida |
285 | 133 | 418 | 381 | 480 | 861 | ||||||||||||||||||
| Illinois |
123 | — | 123 | 133 | — | 133 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Other |
408 | 133 | 541 | 514 | 480 | 994 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
8,672 | 1,546 | 10,218 | 10,606 | 2,957 | 13,563 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
11
M.D.C. HOLDINGS, INC.
Reconciliation of Non-GAAP Financial Measures
Adjusted gross margin from home sales is a non-GAAP financial measure. We believe this information is meaningful as it isolates the impact that inventory impairments, warranty adjustments and interest 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 | Six Months Ended | |||||||||||||||||||||||||||||||
| June 30, 2012 |
Gross Margin % |
June 30, 2011 |
Gross Margin % |
June 30, 2012 |
Gross Margin % |
June 30, 2011 |
Gross Margin % |
|||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||
| Gross Margin |
$ | 36,409 | 14.1 | % | $ | 19,257 | 9.2 | % | $ | 62,533 | 14.1 | % | $ | 41,846 | 11.2 | % | ||||||||||||||||
| Less: Land Sales Revenue |
(1,815 | ) | (2,565 | ) | (3,405 | ) | (2,769 | ) | ||||||||||||||||||||||||
| Add: Land Cost of Sales |
1,718 | 1,741 | 3,208 | 1,758 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Gross Margin from Home Sales |
$ | 36,312 | 14.2 | % | $ | 18,433 | 8.9 | % | $ | 62,336 | 14.1 | % | $ | 40,835 | 11.1 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Add: Inventory Impairments |
— | 8,633 | — | 8,633 | ||||||||||||||||||||||||||||
| Add: Interest in Cost of Sales |
7,105 | 5,454 | 11,999 | 9,657 | ||||||||||||||||||||||||||||
| Less: Warranty Adjustments |
— | (1,832 | ) | — | (2,263 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Adjusted Gross Margin from Home Sales |
$ | 43,417 | 16.9 | % | $ | 30,688 | 14.9 | % | $ | 74,335 | 16.8 | % | $ | 56,862 | 15.4 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
12