Attached files
| file | filename |
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| 8-K - 8-K - M.D.C. HOLDINGS, INC. | mdc-20200728.htm |
Exhibit 99.1
News Release
M.D.C. HOLDINGS ANNOUNCES SECOND QUARTER 2020 RESULTS
Significant revenue growth and margin expansion drove a 55% improvement to net income, while ongoing consumer demand for new housing strengthened both the Company’s backlog and earnings outlook.
DENVER, COLORADO, Tuesday, July 28, 2020. M.D.C Holdings, Inc. (NYSE: MDC), one of the nation’s leading homebuilders, announced results for the quarter ended June 30, 2020.
Larry A. Mizel, MDC's Chairman and Chief Executive Officer, stated, "MDC experienced a remarkable turnaround in the second quarter of 2020, as order activity rebounded sharply from the initial weeks of the pandemic. Unit net orders for the quarter rose 5% year-over-year and increased 53% for the month of June, with our sales efforts gaining momentum as the quarter progressed. We also generated strong revenue growth and margin expansion in the quarter, resulting in net income of $84.4 million, or $1.31 per diluted share.”
Mr. Mizel continued, "Our results this quarter reflect the favorable industry dynamics in place today, including a low interest rate environment, a lack of available supply and a highly motivated buyer. They also reflect our continued shift in focus to the more affordable segments of the market and the benefits of our build-to-order strategy, which caters to the wants and needs of a large segment of the buying population. We believe that providing homebuyers with flexibility and choice at an affordable price is a winning strategy for our company. Given the favorable market conditions we are experiencing, we now believe that we may achieve as many as 8,000 home deliveries for the 2020 full year, which would be a 15% increase from the prior year”
Mr. Mizel concluded, "While there are still many uncertainties regarding the pandemic’s impact on our industry and the broader economy, MDC is well positioned for the future given our seasoned leadership team, our strategic focus and our balance sheet strength. I want to thank all of our team members who have done such an excellent job adapting to this new reality and who have been vigilant in providing a safe environment for our employees, suppliers and customers.”
1
2020 Second Quarter Highlights and Comparisons to 2019 Second Quarter
•Home sale revenues increased 21% to $886.8 million from $732.8 million
◦Unit deliveries up 25% to 1,900
◦Average selling price of deliveries down 4% to $466,700
•Homebuilding pretax income increased 38% to $84.9 million from $61.6 million
◦Gross margin from home sales increased 70 basis points to 20.2% from 19.5%
◦Selling, general and administrative expenses as a percentage of home sale revenues ("SG&A rate") improved by 90 basis points to 10.4%
•Financial services pretax income increased 110% to $26.7 million vs. $12.7 million
◦Loan capture rate increased 800 basis points to 69%
•Net income of $84.4 million, or $1.31 per diluted share, up 55% from $54.6 million or $0.86 per diluted share
◦Effective tax rate of 24.4% vs. 26.6%
•Dollar value of net new orders increased 8% to $1.04 billion from $967.9 million
◦Unit net orders increased 5% to 2,390
◦Average selling price of net orders up 3%
•Dollar value of ending backlog up 23% to $2.37 billion from $1.93 billion
◦Unit backlog increased 20% to 5,143
◦Average selling price of homes in backlog up 3%
June 30, 2020 Financial Position Highlights
•Total liquidity of $1.52 billion
◦Total cash and cash equivalents of $544.9 million
◦$964.1 million of availability under homebuilding line of credit ($1.0 billion facility size; maturity of December 2023)
•No senior note maturities until 2024
2020 Outlook and Other Selected Information1
•Home deliveries for the 2020 third quarter between 1,900 and 2,100
◦Average selling price for 2020 third quarter unit deliveries exceeding $460,000
◦Gross margin from home sales for the 2020 third quarter of approximately 20% (excluding impairments and warranty adjustments)
•Full year 2020 home deliveries between 7,700 and 8,000
•Active subdivision count at June 30, 2020 of 192, up 3% year-over-year
•Lots controlled of 25,027 at June 30, 2020, up 6% year-over-year
•Quarterly cash dividend of thirty-three cents ($0.33) per share declared on July 27, 2020, up 10% from prior year
1 See "Forward-Looking Statements" below.
2
About MDC
M.D.C. Holdings, Inc. was founded in 1972. MDC's homebuilding subsidiaries, which operate under the name Richmond American Homes, have built and financed the American Dream for more than 210,000 homebuyers since 1977. 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, Orlando, Jacksonville, Seattle and Portland. 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 any 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 the impact of the COVID-19 pandemic, changes in consumer confidence, inflation or deflation and employment levels; (2) changes in business conditions experienced by MDC, including restrictions on business activities resulting from the COVID-19 pandemic, 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-Q for the quarter ended June 30, 2020, 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.
Contact: Robert N. Martin
Senior Vice President and Chief Financial Officer
1-866-424-3395
IR@mdch.com
3
M.D.C. HOLDINGS, INC.
Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
| (Dollars in thousands, except per share amounts) | |||||||||||||||||||||||
| Homebuilding: | |||||||||||||||||||||||
| Home sale revenues | $ | 886,758 | $ | 732,844 | $ | 1,583,843 | $ | 1,380,122 | |||||||||||||||
| Home cost of sales | (707,789) | (590,172) | (1,266,436) | (1,114,724) | |||||||||||||||||||
| Inventory impairments | — | — | — | (610) | |||||||||||||||||||
| Total cost of sales | (707,789) | (590,172) | (1,266,436) | (1,115,334) | |||||||||||||||||||
| Gross profit | 178,969 | 142,672 | 317,407 | 264,788 | |||||||||||||||||||
| Selling, general and administrative expenses | (92,316) | (82,712) | (181,637) | (164,973) | |||||||||||||||||||
| Interest and other income | 720 | 2,764 | 2,609 | 5,155 | |||||||||||||||||||
| Other expense | (2,452) | (1,110) | (3,789) | (2,301) | |||||||||||||||||||
| Homebuilding pretax income | 84,921 | 61,614 | 134,590 | 102,669 | |||||||||||||||||||
| Financial Services: | |||||||||||||||||||||||
| Revenues | 32,964 | 18,597 | 54,850 | 36,001 | |||||||||||||||||||
| Expenses | (12,178) | (9,574) | (23,107) | (18,531) | |||||||||||||||||||
| Other income (expense), net | 5,931 | 3,694 | (6,133) | 9,798 | |||||||||||||||||||
| Financial services pretax income | 26,717 | 12,717 | 25,610 | 27,268 | |||||||||||||||||||
| Income before income taxes | 111,638 | 74,331 | 160,200 | 129,937 | |||||||||||||||||||
| Provision for income taxes | (27,242) | (19,738) | (39,044) | (34,794) | |||||||||||||||||||
| Net income | $ | 84,396 | $ | 54,593 | $ | 121,156 | $ | 95,143 | |||||||||||||||
| Comprehensive income | $ | 84,396 | $ | 54,593 | $ | 121,156 | $ | 95,143 | |||||||||||||||
| Earnings per share: | |||||||||||||||||||||||
| Basic | $ | 1.33 | $ | 0.88 | $ | 1.92 | $ | 1.55 | |||||||||||||||
| Diluted | $ | 1.31 | $ | 0.86 | $ | 1.87 | $ | 1.50 | |||||||||||||||
| Weighted average common shares outstanding: | |||||||||||||||||||||||
| Basic | 63,015,827 | 61,336,404 | 62,755,310 | 61,138,982 | |||||||||||||||||||
| Diluted | 64,080,940 | 63,323,267 | 64,538,835 | 63,023,149 | |||||||||||||||||||
| Dividends declared per share | $ | 0.33 | $ | 0.30 | $ | 0.66 | $ | 0.60 | |||||||||||||||
4
M.D.C. HOLDINGS, INC.
Consolidated Balance Sheets
(Unaudited)
| June 30, 2020 | December 31, 2019 | ||||||||||
| (Dollars in thousands, except per share amounts) | |||||||||||
| ASSETS | |||||||||||
| Homebuilding: | |||||||||||
| Cash and cash equivalents | $ | 482,702 | $ | 424,186 | |||||||
| Restricted cash | 15,668 | 14,279 | |||||||||
| Trade and other receivables | 88,279 | 65,829 | |||||||||
| Inventories: | |||||||||||
| Housing completed or under construction | 1,270,300 | 1,036,191 | |||||||||
| Land and land under development | 1,235,598 | 1,330,384 | |||||||||
| Total inventories | 2,505,898 | 2,366,575 | |||||||||
| Property and equipment, net | 62,516 | 60,414 | |||||||||
| Deferred tax asset, net | 19,828 | 21,768 | |||||||||
| Prepaid and other assets | 69,484 | 78,358 | |||||||||
| Total homebuilding assets | 3,244,375 | 3,031,409 | |||||||||
| Financial Services: | |||||||||||
| Cash and cash equivalents | 62,218 | 35,747 | |||||||||
| Marketable securities | — | 56,747 | |||||||||
| Mortgage loans held-for-sale, net | 173,567 | 197,021 | |||||||||
| Other assets | 25,775 | 17,432 | |||||||||
| Total financial services assets | 261,560 | 306,947 | |||||||||
| Total Assets | $ | 3,505,935 | $ | 3,338,356 | |||||||
| LIABILITIES AND EQUITY | |||||||||||
| Homebuilding: | |||||||||||
| Accounts payable | $ | 95,018 | $ | 87,364 | |||||||
| Accrued liabilities | 278,543 | 245,940 | |||||||||
| Revolving credit facility | 10,000 | 15,000 | |||||||||
| Senior notes, net | 1,037,062 | 989,422 | |||||||||
| Total homebuilding liabilities | 1,420,623 | 1,337,726 | |||||||||
| Financial Services: | |||||||||||
| Accounts payable and accrued liabilities | 70,033 | 68,529 | |||||||||
| Mortgage repurchase facility | 142,094 | 149,616 | |||||||||
| Total financial services liabilities | 212,127 | 218,145 | |||||||||
| Total Liabilities | 1,632,750 | 1,555,871 | |||||||||
| 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; 63,384,866 and 62,574,961 issued and outstanding at June 30, 2020 and December 31, 2019, respectively | 634 | 626 | |||||||||
| Additional paid-in-capital | 1,359,985 | 1,348,733 | |||||||||
| Retained earnings | 512,566 | 433,126 | |||||||||
| Total Stockholders' Equity | 1,873,185 | 1,782,485 | |||||||||
| Total Liabilities and Stockholders' Equity | $ | 3,505,935 | $ | 3,338,356 | |||||||
5
M.D.C. HOLDINGS, INC.
Consolidated Statement of Cash Flows
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Operating Activities: | |||||||||||||||||||||||
| Net income | $ | 84,396 | $ | 54,593 | $ | 121,156 | $ | 95,143 | |||||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||||||||
| Stock-based compensation expense | 5,488 | 4,132 | 9,928 | 8,383 | |||||||||||||||||||
| Depreciation and amortization | 6,375 | 5,063 | 11,527 | 9,941 | |||||||||||||||||||
| Inventory impairments | — | — | — | 610 | |||||||||||||||||||
| Net (gain) loss on marketable equity securities | (4,983) | (2,327) | 8,285 | (7,167) | |||||||||||||||||||
| Deferred income tax expense | 831 | 5,063 | 1,962 | 7,759 | |||||||||||||||||||
| Net changes in assets and liabilities: | - | ||||||||||||||||||||||
| Trade and other receivables | (21,834) | 13,735 | (23,445) | (36) | |||||||||||||||||||
| Mortgage loans held-for-sale, net | (39,646) | 1,473 | 23,454 | 39,874 | |||||||||||||||||||
| Housing completed or under construction | (54,956) | (120,665) | (233,829) | (118,528) | |||||||||||||||||||
| Land and land under development | 65,867 | 42,934 | 94,918 | 24,438 | |||||||||||||||||||
| Prepaid and other assets | 9,669 | (5,291) | 1,209 | (4,206) | |||||||||||||||||||
| Accounts payable and accrued liabilities | 41,670 | 2,607 | 40,539 | (546) | |||||||||||||||||||
| Net cash provided by operating activities | 92,877 | 1,317 | 55,704 | 55,665 | |||||||||||||||||||
| Investing Activities: | |||||||||||||||||||||||
| Purchases of marketable securities | (1,022) | (331) | (10,804) | (5,116) | |||||||||||||||||||
| Sales of marketable securities | 49,990 | 320 | 59,266 | 5,057 | |||||||||||||||||||
| Purchases of property and equipment | (6,456) | (7,474) | (12,968) | (13,860) | |||||||||||||||||||
| Net cash provided by (used in) investing activities | 42,512 | (7,485) | 35,494 | (13,919) | |||||||||||||||||||
| Financing Activities: | |||||||||||||||||||||||
| Payments on mortgage repurchase facility, net | 33,350 | (1,817) | (7,522) | (33,776) | |||||||||||||||||||
| Payments on homebuilding line of credit, net | (5,000) | — | (5,000) | — | |||||||||||||||||||
| Repayment of senior notes | — | — | (250,000) | — | |||||||||||||||||||
| Proceeds from issuance of senior notes | — | — | 298,050 | — | |||||||||||||||||||
| Dividend payments | (20,914) | (18,521) | (41,682) | (35,636) | |||||||||||||||||||
| Issuance of shares under stock-based compensation programs, net | (6,862) | 10,241 | 1,332 | 17,328 | |||||||||||||||||||
| Net cash provided by (used in) financing activities | 574 | (10,097) | (4,822) | (52,084) | |||||||||||||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | 135,963 | (16,265) | 86,376 | (10,338) | |||||||||||||||||||
| Cash, cash equivalents and restricted cash: | |||||||||||||||||||||||
| Beginning of period | 424,625 | 476,066 | 474,212 | 470,139 | |||||||||||||||||||
| End of period | $ | 560,588 | $ | 459,801 | $ | 560,588 | $ | 459,801 | |||||||||||||||
| Reconciliation of cash, cash equivalents and restricted cash: | |||||||||||||||||||||||
| Homebuilding: | |||||||||||||||||||||||
| Cash and cash equivalents | $ | 482,702 | $ | 390,061 | $ | 482,702 | $ | 390,061 | |||||||||||||||
| Restricted cash | 15,668 | 12,911 | 15,668 | 12,911 | |||||||||||||||||||
| Financial Services: | - | ||||||||||||||||||||||
| Cash and cash equivalents | 62,218 | 56,829 | 62,218 | 56,829 | |||||||||||||||||||
| Total cash, cash equivalents and restricted cash | $ | 560,588 | $ | 459,801 | $ | 560,588 | $ | 459,801 | |||||||||||||||
6
New Home Deliveries
| Three Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2020 | 2019 | % Change | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Homes | Home Sale Revenues | Average Price | Homes | Home Sale Revenues | Average Price | Homes | Home Sale Revenues | Average Price | |||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| West | 1,017 | $ | 490,117 | $ | 481.9 | 785 | $ | 384,530 | $ | 489.8 | 30 | % | 27 | % | (2) | % | |||||||||||||||||||||||||||||||||||||
| Mountain | 608 | 316,666 | 520.8 | 534 | 287,476 | 538.3 | 14 | % | 10 | % | (3) | % | |||||||||||||||||||||||||||||||||||||||||
| East | 275 | 79,975 | 290.8 | 195 | 60,838 | 312.0 | 41 | % | 31 | % | (7) | % | |||||||||||||||||||||||||||||||||||||||||
| Total | 1,900 | $ | 886,758 | $ | 466.7 | 1,514 | $ | 732,844 | $ | 484.0 | 25 | % | 21 | % | (4) | % | |||||||||||||||||||||||||||||||||||||
| Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2020 | 2019 | % Change | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Homes | Home Sale Revenues | Average Price | Homes | Home Sale Revenues | Average Price | Homes | Home Sale Revenues | Average Price | |||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| West | 1,888 | $ | 895,615 | $ | 474.4 | 1,537 | $ | 754,088 | $ | 490.6 | 23 | % | 19 | % | (3) | % | |||||||||||||||||||||||||||||||||||||
| Mountain | 1,043 | 539,524 | 517.3 | 943 | 496,668 | 526.7 | 11 | % | 9 | % | (2) | % | |||||||||||||||||||||||||||||||||||||||||
| East | 516 | 148,704 | 288.2 | 392 | 129,366 | 330.0 | 32 | % | 15 | % | (13) | % | |||||||||||||||||||||||||||||||||||||||||
| Total | 3,447 | $ | 1,583,843 | $ | 459.5 | 2,872 | $ | 1,380,122 | $ | 480.5 | 20 | % | 15 | % | (4) | % | |||||||||||||||||||||||||||||||||||||
Net New Orders
| Three Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2020 | 2019 | % 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) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| West | 1,309 | $ | 574,996 | $ | 439.3 | 4.62 | 1,246 | $ | 550,742 | $ | 442.0 | 4.46 | 5 | % | 4 | % | (1) | % | 4 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Mountain | 758 | 362,228 | 477.9 | 3.99 | 690 | 318,275 | 461.3 | 3.56 | 10 | % | 14 | % | 4 | % | 12 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| East | 323 | 106,436 | 329.5 | 3.53 | 337 | 98,843 | 293.3 | 4.36 | (4) | % | 8 | % | 12 | % | (19) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | 2,390 | $ | 1,043,660 | $ | 436.7 | 4.23 | 2,273 | $ | 967,860 | $ | 425.8 | 4.13 | 5 | % | 8 | % | 3 | % | 2 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2020 | 2019 | % 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) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| West | 2,691 | $ | 1,262,330 | $ | 469.1 | 4.88 | 2,211 | $ | 1,003,236 | $ | 453.7 | 4.15 | 22 | % | 26 | % | 3 | % | 18 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Mountain | 1,451 | 722,197 | 497.7 | 3.76 | 1,409 | 669,523 | 475.2 | 3.53 | 3 | % | 8 | % | 5 | % | 7 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| East | 647 | 206,911 | 319.8 | 3.58 | 609 | 182,141 | 299.1 | 4.33 | 6 | % | 14 | % | 7 | % | (17) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | 4,789 | $ | 2,191,438 | $ | 457.6 | 4.28 | 4,229 | $ | 1,854,900 | $ | 438.6 | 3.94 | 13 | % | 18 | % | 4 | % | 9 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
*Calculated as total net new orders in period ÷ average active communities during period ÷ number of months in period
7
8
Active Subdivisions
| Average Active Subdivisions | Average Active Subdivisions | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Active Subdivisions | Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||
| June 30, | % | June 30, | % | June 30, | % | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2020 | 2019 | Change | 2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||||||||||||||||||||||||||||||||||
| West | 96 | 97 | (1) | % | 95 | 94 | 1 | % | 92 | 89 | 3 | % | |||||||||||||||||||||||||||||||||||||||||
| Mountain | 63 | 65 | (3) | % | 63 | 65 | (3) | % | 64 | 66 | (3) | % | |||||||||||||||||||||||||||||||||||||||||
| East | 33 | 25 | 32 | % | 31 | 26 | 19 | % | 30 | 23 | 30 | % | |||||||||||||||||||||||||||||||||||||||||
| Total | 192 | 187 | 3 | % | 189 | 185 | 2 | % | 186 | 178 | 4 | % | |||||||||||||||||||||||||||||||||||||||||
Backlog
| June 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2020 | 2019 | % Change | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Homes | Dollar Value | Average Price | Homes | Dollar Value | Average Price | Homes | Dollar Value | Average Price | |||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| West | 2,826 | $ | 1,336,251 | $ | 472.8 | 2,197 | $ | 1,016,327 | $ | 462.6 | 29 | % | 31 | % | 2 | % | |||||||||||||||||||||||||||||||||||||
| Mountain | 1,619 | $ | 816,559 | $ | 504.4 | 1,509 | $ | 739,921 | $ | 490.3 | 7 | % | 10 | % | 3 | % | |||||||||||||||||||||||||||||||||||||
| East | 698 | $ | 220,362 | $ | 315.7 | 587 | $ | 173,436 | $ | 295.5 | 19 | % | 27 | % | 7 | % | |||||||||||||||||||||||||||||||||||||
| Total | 5,143 | $ | 2,373,172 | $ | 461.4 | 4,293 | $ | 1,929,684 | $ | 449.5 | 20 | % | 23 | % | 3 | % | |||||||||||||||||||||||||||||||||||||
Homes Completed or Under Construction (WIP lots)
| June 30, | % | ||||||||||||||||
| 2020 | 2019 | Change | |||||||||||||||
| Unsold: | |||||||||||||||||
| Completed | 109 | 96 | 14 | % | |||||||||||||
| Under construction | 191 | 236 | (19) | % | |||||||||||||
| Total unsold started homes | 300 | 332 | (10) | % | |||||||||||||
| Sold homes under construction or completed | 3,573 | 3,023 | 18 | % | |||||||||||||
| Model homes under construction or completed | 502 | 457 | 10 | % | |||||||||||||
| Total homes completed or under construction | 4,375 | 3,812 | 15 | % | |||||||||||||
Lots Owned and Optioned (including homes completed or under construction)
| June 30, 2020 | June 30, 2019 | ||||||||||||||||||||||||||||||||||||||||
| Lots Owned | Lots Optioned | Total | Lots Owned | Lots Optioned | Total | Total % Change | |||||||||||||||||||||||||||||||||||
| West | 9,364 | 2,619 | 11,983 | 8,611 | 2,446 | 11,057 | 8 | % | |||||||||||||||||||||||||||||||||
| Mountain | 6,076 | 2,667 | 8,743 | 6,457 | 2,741 | 9,198 | (5) | % | |||||||||||||||||||||||||||||||||
| East | 2,260 | 2,041 | 4,301 | 2,085 | 1,267 | 3,352 | 28 | % | |||||||||||||||||||||||||||||||||
| Total | 17,700 | 7,327 | 25,027 | 17,153 | 6,454 | 23,607 | 6 | % | |||||||||||||||||||||||||||||||||
9
Selling, General and Administrative Expenses
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
| 2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||||||||
| General and administrative expenses | $ | 40,419 | $ | 39,326 | $ | 1,093 | $ | 85,508 | $ | 81,898 | $ | 3,610 | |||||||||||||||||||||||
General and administrative expenses as a percentage of home sale revenues | 4.6 | % | 5.4 | % | -80 bps | 5.4 | % | 5.9 | % | -50 bps | |||||||||||||||||||||||||
| Marketing expenses | $ | 22,657 | $ | 19,513 | $ | 3,144 | $ | 44,103 | $ | 37,809 | $ | 6,294 | |||||||||||||||||||||||
Marketing expenses as a percentage of home sale revenues | 2.6 | % | 2.7 | % | -10 bps | 2.8 | % | 2.7 | % | 10 bps | |||||||||||||||||||||||||
| Commissions expenses | $ | 29,240 | $ | 23,873 | $ | 5,367 | $ | 52,026 | $ | 45,266 | $ | 6,760 | |||||||||||||||||||||||
Commissions expenses as a percentage of home sale revenues | 3.3 | % | 3.3 | % | 0 bps | 3.3 | % | 3.3 | % | 0 bps | |||||||||||||||||||||||||
| Total selling, general and administrative expenses | $ | 92,316 | $ | 82,712 | $ | 9,604 | $ | 181,637 | $ | 164,973 | $ | 16,664 | |||||||||||||||||||||||
Total selling, general and administrative expenses as a percentage of home sale revenues | 10.4 | % | 11.3 | % | -90 bps | 11.5 | % | 12.0 | % | -50 bps | |||||||||||||||||||||||||
Capitalized Interest
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Homebuilding interest incurred | $ | 15,094 | $ | 15,980 | $ | 31,628 | $ | 32,011 | |||||||||||||||
| Less: Interest capitalized | (15,094) | (15,980) | (31,628) | (32,011) | |||||||||||||||||||
| Homebuilding interest expensed | $ | — | $ | — | $ | — | $ | — | |||||||||||||||
| Interest capitalized, beginning of period | $ | 59,077 | $ | 56,947 | $ | 55,310 | $ | 54,845 | |||||||||||||||
| Plus: Interest capitalized during period | 15,094 | 15,980 | 31,628 | 32,011 | |||||||||||||||||||
| Less: Previously capitalized interest included in home cost of sales | (17,242) | (14,734) | (30,009) | (28,663) | |||||||||||||||||||
| Interest capitalized, end of period | $ | 56,929 | $ | 58,193 | $ | 56,929 | $ | 58,193 | |||||||||||||||
10