SYS-CON MEDIA Authors: Mat Mathews, PR.com Newswire, David Smith, Tim Crawford, Kevin Benedict

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M.D.C. Holdings Announces 2013 Third Quarter Results

DENVER, Oct. 29, 2013 /PRNewswire/ -- M.D.C. Holdings, Inc. (NYSE: MDC) announced results for the quarter ended September 30, 2013.

2013 Third Quarter Highlights and Comparisons to 2012 Third Quarter

  • Net income of $36.3 million, or $0.73 per diluted share vs. net income of $20.1 million, or $0.41 per diluted share
  • Pretax income of $34.9 million, up 79% from $19.5 million
    • Homebuilding pretax income of $26.7 million vs. $10.2 million
    • Pretax operating margin of 7.8%, up 200 basis points from 5.8%
  • Home sale revenues of $433.7 million, up 35%
    • Homes delivered of 1,257, up 21%
    • Average selling price of $345,000, up 12%
    • Gross margin from home sales of 18.1% vs. 15.5%, up 260 basis points
  • SG&A expenses as a percentage of home sale revenues of 13.3% vs. 14.0%, a 70 basis point improvement
  • Monthly net home order absorption pace of 2.3 homes per active community, up 14%
    • Net new orders of 924 homes, down 8%; dollar value up 2% to $325.5 million
  • Backlog dollar value of $676.8 million, up 1%
    • Backlog units of 1,762, down 12%
  • Acquired 2,117 lots in 55 communities, including 31 new communities
    • Total land acquisition spend of $162.0 million
  • Cash and investments of $797.5 million at September 30, 2013

Larry A. Mizel, MDC's Chairman and Chief Executive Officer, stated, "I am pleased to announce we earned a third quarter profit of $0.73 per diluted share, our seventh consecutive quarterly operating profit, with net income improving by $16.1 million over the prior year and our pretax operating margin increasing by 200 basis points year-over-year. These improvements were again driven by the performance of our homebuilding business, on the strength of both volume and gross margin gains."

Mr. Mizel continued, "The recent increase in mortgage interest rates from historically low levels, combined with economic uncertainty created by the government shutdown, debt ceiling debates, and the potential for tapering of federal stimulus, has temporarily dampened housing demand. In spite of these factors, we increased the pace of our new home sales during the 2013 third quarter as our monthly absorption rate increased by 14% year-over-year to 2.3 net new home orders per active community. Our active community count decreased both year-over-year and sequentially due to the selling out of communities quicker than anticipated and delays encountered with various municipalities, all of which contributed to lower net new orders for the quarter. However, based on our land acquisition activity over the past year, we are confident that our active community count will start growing again before the spring selling season."

Mr. Mizel concluded, "We continue to believe that a solid housing recovery is ongoing, supported by attractive affordability levels and a low inventory of available-for-sale housing. Our confidence in the market is evidenced by our continued land acquisition activity in the 2013 third quarter, as we purchased approximately 2,100 lots and ended the quarter with more than 15,800 lots owned and controlled, an increase of 52% year-over-year. We believe that this lot supply can provide us the opportunity to drive meaningful gains in both closings volume and profitability for 2014. At the same time, we have balanced our land acquisition efforts with continued discipline in our approach to managing our balance sheet, ending the quarter with nearly $800 million in cash and investments, maintaining an industry leading net leverage ratio, and adhering to a conservative land supply strategy. We believe this approach is valuable for our Company, not only in providing us the liquidity we need to drive growth and take advantage of market opportunities, but also in protecting us in the event that the housing market experiences more volatility."

Homebuilding

Home sale revenues for the 2013 third quarter increased 35% to $433.7 million compared to $320.6 million for the prior year period.  The increase in revenues resulted from a 21% increase in homes delivered to 1,257 homes as compared to 1,039 in the prior year and a 12% increase in our average selling price to $345,000. The increase in average selling price was largely due to price appreciation and lower incentives in many of our markets.

Gross margin from home sales for the 2013 third quarter increased to 18.1% from 15.5% for the year-earlier period. The increase was attributable to our continued focus on increasing pricing and decreasing incentives as its markets improved since the start of 2012. On a sequential basis, our 2013 third quarter gross margin from home sales was flat as compared to 18.1% for the 2013 second quarter. Excluding inventory impairments, warranty accrual adjustments and previously capitalized interest in cost of sales, adjusted gross margin from home sales was 21.8%* for the 2013 third quarter, compared to 18.2%* for the 2012 third quarter and 21.3%* for the 2013 second quarter.

SG&A expenses as a percentage of home sales revenues decreased by 70 basis points to 13.3% for the 2013 third quarter versus 14.0% for the same period in 2012. The improvement was the result of operating leverage created by a year-over-year increase in home sale revenues, which outpaced a year-over-year increase in our absolute level of SG&A expenses, and was slightly offset by a year-over-year increase in legal expenses driven by various significant legal recoveries in the 2012 third quarter which did not recur in the 2013 third quarter.

Net new orders for the 2013 third quarter decreased 8% to 924 homes, compared to 1,008 homes during the same period in 2012, largely due to a 19% decrease in our average active community count.  However, our monthly sales absorption rate for the 2013 third quarter rose 14% to 2.3 per community, compared to 2.0 per community for the 2012 third quarter. Our cancellation rate for the 2013 third quarter was 26% versus 27% in the prior year third quarter.

We ended the 2013 third quarter with 1,762 homes in backlog, with an estimated sales value of $676.8 million, compared with a backlog of 1,997 homes with an estimated sales value of $667.0 million at September 30, 2012.

At September 30, 2013, we had 134 active subdivisions, down 19% from September 30, 2012.  As a result of the significant increase in our land acquisition activity in the fourth quarter of 2012 and the first nine months of 2013, our lots owned and under option increased by 52% year-over-year to over 15,800 lots. 

Financial Services

Income before taxes from our financial services operations for the 2013 third quarter was $8.2 million, compared to $9.3 million for the 2012 third quarter.  The decrease in pretax income primarily reflected a $1.5 million decrease in pretax income for our mortgage operations to $5.9 million in the 2013 third quarter, compared to $7.4 million in the 2012 third quarter, despite higher loan volumes.  The decrease in our mortgage profitability was mostly driven by lower per unit origination income and gains on loans locked and sold compared to a year ago resulting primarily from a more competitive mortgage market and higher interest rates. Additionally, our mortgage operations experienced increases in overhead and loan loss reserve expenses.

About MDC

Since 1972, MDC's subsidiary companies have built and financed the American dream for more than 175,000 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, Orlando, South Florida 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, 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 the Company's investments in marketable securities; (5) uncertainty in the mortgage lending 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 September 30, 2013, 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.

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

 

M.D.C. HOLDINGS, INC.

Consolidated Statements of Operations and Comprehensive Income














Three Months Ended


Nine Months Ended


September 30,


September 30,


2013


2012


2013


2012


(Dollars in thousands, except per share amounts)


(Unaudited)

Homebuilding:












Home sale revenues

$

433,693


$

320,647


$

1,165,768


$

761,857

Land sale revenues


25



15



1,832



3,420

Total home and land sale revenues


433,718



320,662



1,167,600



765,277

Home cost of sales


(354,889)



(271,067)



(956,892)



(649,941)

Land cost of sales


(35)



(2)



(1,470)



(3,210)

Inventory impairments


(350)



-



(350)



-

Total cost of sales


(355,274)



(271,069)



(958,712)



(653,151)

Gross margin


78,444



49,593



208,888



112,126

Selling, general and administrative expenses


(57,753)



(44,788)



(157,862)



(118,135)

Interest income


6,460



5,365



21,146



16,651

Interest expense


-



-



(1,726)



(808)

Other income (expense)


(488)



16



853



592

Homebuilding pretax income


26,663



10,186



71,299



10,426













Financial Services:












Revenues


14,282



13,668



40,672



31,974

Expenses


(6,921)



(5,155)



(19,144)



(13,459)

Interest and other income


885



785



2,680



2,323

Financial services pretax income


8,246



9,298



24,208



20,838













Income before income taxes


34,909



19,484



95,507



31,264

Benefit from income taxes


1,342



642



188,169



1,765

Net income

$

36,251


$

20,126


$

283,676


$

33,029













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


1,960



5,095



2,500



10,945

Comprehensive income

$

38,211


$

25,221


$

286,176


$

43,974













Earnings per share:












Basic

$

0.73


$

0.41


$

5.76


$

0.69

Diluted

$

0.73


$

0.41


$

5.71


$

0.68













Weighted average common shares outstanding












Basic


48,492,588



47,761,307



48,438,154



47,499,429

Diluted


48,767,834



47,940,038



48,867,055



47,610,195













Dividends declared per share

$

-


$

0.25


$

-


$

0.75

 

M.D.C. HOLDINGS, INC.

Consolidated Balance Sheets










September 30,


December 31,



2013


2012

ASSETS


(Dollars in thousands, except



per share amounts)

Homebuilding:


(Unaudited)




Cash and cash equivalents


$

149,580


$

129,535

Marketable securities



578,441



519,465

Restricted cash



2,186



1,859

Trade and other receivables



29,488



28,163

Inventories:







Housing completed or under construction



634,159



512,949

Land and land under development



699,974



489,572

Total inventories



1,334,133



1,002,521

Property and equipment, net



31,608



33,125

Deferred tax asset, net of valuation allowance of $25,046 and $248,306







at September 30, 2013 and December 31, 2012, respectively



184,986



-

Metropolitan district bond securities (related party)



14,167



5,818

Other assets



50,937



38,959

Total homebuilding assets



2,375,526



1,759,445

Financial Services:







Cash and cash equivalents



47,706



30,560

Marketable securities



21,816



32,473

Mortgage loans held-for-sale, net



74,340



119,953

Other assets



8,693



3,010

Total financial services assets



152,555



185,996

      Total Assets


$

2,528,081


$

1,945,441








LIABILITIES AND EQUITY







Homebuilding:







Accounts payable


$

20,030


$

73,055

Accrued liabilities



135,434



118,456

Senior notes, net



1,095,421



744,842

Total homebuilding liabilities



1,250,885



936,353








Financial Services:







Accounts payable and accrued liabilities



57,852



51,864

Mortgage repurchase facility



38,912



76,327

Total financial services liabilities



96,764



128,191

      Total Liabilities



1,347,649



1,064,544








Stockholders' Equity







Preferred stock, $0.01 par value; 25,000,000 shares authorized; none issued







or outstanding



-



-

Common stock, $0.01 par value; 250,000,000 shares authorized;







48,874,476 and 48,698,757 issued and outstanding at September 30, 2013







and December 31, 2012, respectively



489



487

Additional paid-in-capital



910,218



896,861

Retained earnings (accumulated deficit)



262,387



(21,289)

Accumulated other comprehensive income



7,338



4,838

Total Stockholders' Equity



1,180,432



880,897

Total Liabilities and Stockholders' Equity


$

2,528,081


$

1,945,441

 

M.D.C. HOLDINGS, INC.

Consolidated Statements of Cash Flows














Three Months Ended


Nine Months Ended


September 30, 2013


September 30, 2013


2013


2012


2013


2012


(Dollars in thousands)


(Unaudited)

Operating Activities:












Net income

$

36,251


$

20,126


$

283,676


$

33,029

Adjustments to reconcile net income to net cash












used in operating activities:












Stock-based compensation expense


3,026



4,907



8,240



12,628

Depreciation and amortization


888



1,052



2,960



3,708

Inventory impairments and write-offs of land option deposits


1,125



103



1,624



414

Amortization of discount (premiums) on marketable debt securities


(607)



430



816



279

Deferred income tax benefit


(2,014)



-



(189,657)



-

Net changes in assets and liabilities:












Restricted cash


493



176



(327)



(1,417)

Trade and other receivables


6,967



4,660



(1,599)



(13,685)

Mortgage loans held-for-sale


18,123



(20,961)



45,613



(8,313)

Housing completed or under construction


(65,078)



(66,607)



(121,165)



(202,994)

Land and land under development


(71,709)



21,358



(210,218)



112,406

Other assets


(6,924)



(4,509)



(15,307)



(553)

Accounts payable and accrued liabilities


(158)



4,400



(30,516)



14,043

Net cash used in operating activities


(79,617)



(34,865)



(225,860)



(50,455)













Investing Activities:












Purchases of marketable securities


(57,792)



(104,379)



(369,887)



(397,167)

Maturities of marketable securities


45,477



-



132,492



106,000

Sales of marketable securities


50,016



59,355



187,083



285,056

Purchases of property and equipment


(280)



(290)



(1,278)



(958)

Net cash used in investing activities


37,421



(45,314)



(51,590)



(7,069)













Financing Activities:












Payments on mortgage repurchase facility


(60,201)



(47,120)



(195,760)



(137,529)

Advances on mortgage repurchase facility


50,265



61,348



158,345



135,715

Dividend payments


-



(12,056)



-



(36,046)

Proceeds from issuance of senior notes


-



-



346,938



-

Proceeds from exercise of stock options


-



15,680



5,118



15,820

Net cash provided by (used in) financing activities


(9,936)



17,852



314,641



(22,040)













Net increase (decrease) in cash and cash equivalents


(52,132)



(62,327)



37,191



(79,564)

Cash and cash equivalents:












Beginning of period


249,418



326,124



160,095



343,361

End of period

$

197,286


$

263,797


$

197,286


$

263,797

 

M.D.C. HOLDINGS, INC.

Homebuilding Operational Data

New Home Deliveries
























Three Months Ended September 30,


2013


2012


% Change


Homes


Dollar
Value


Average Price


Homes


Dollar
Value


Average Price


Homes


Dollar
Value


Average Price


(Dollars in thousands)

Arizona

173


$

42,029


$

242.9


203


$

44,877


$

221.1


(15%)


(6%)


10%

California

156



57,852



370.8


131



46,580



355.6


19%


24%


4%

Nevada

187



53,017



283.5


178



37,679



211.7


5%


41%


34%

Washington

110



35,558



323.3


63



18,894



299.9


75%


88%


8%

     West

626



188,456



301.0


575



148,030



257.4


9%


27%


17%

Colorado

320



120,402



376.3


229



81,706



356.8


40%


47%


5%

Utah

45



14,565



323.7


53



14,632



276.1


(15%)


(0%)


17%

     Mountain

365



134,967



369.8


282



96,338



341.6


29%


40%


8%

Maryland

100



43,574



435.7


65



29,382



452.0


54%


48%


(4%)

Virginia

90



46,866



520.7


67



34,069



508.5


34%


38%


2%

Florida

76



19,830



260.9


50



12,828



256.6


52%


55%


2%

East

266



110,270



414.5


182



76,279



419.1


46%


45%


(1%)

          Total

1,257


$

433,693


$

345.0


1,039


$

320,647


$

308.6


21%


35%


12%

 


Nine Months Ended September 30,


2013


2012


% Change


Homes


Dollar Value


Average Price


Homes


Dollar Value


Average Price


Homes


Dollar Value


Average Price


(Dollars in thousands)

Arizona

443


$

105,662


$

238.5


418


$

89,920


$

215.1


6%


18%


11%

California

469



168,640



359.6


319



107,768



337.8


47%


56%


6%

Nevada

481



127,612



265.3


439



87,735



199.9


10%


45%


33%

Washington

269



86,034



319.8


166



48,060



289.5


62%


79%


10%

     West

1,662



487,948



293.6


1,342



333,483



248.5


24%


46%


18%

Colorado

933



347,210



372.1


539



192,923



357.9


73%


80%


4%

Utah

171



53,097



310.5


151



41,874



277.3


13%


27%


12%

     Mountain

1,104



400,307



362.6


690



234,797



340.3


60%


70%


7%

Maryland

237



100,685



424.8


156



67,953



435.6


52%


48%


(2%)

Virginia

248



123,335



497.3


196



92,395



471.4


27%


33%


5%

Florida

207



53,493



258.4


133



32,678



245.7


56%


64%


5%

Illinois

-



-



-


2



551



275.5


N/M


N/M


N/M

     East

692



277,513



401.0


487



193,577



397.5


42%


43%


1%

          Total

3,458


$

1,165,768


$

337.1


2,519


$

761,857


$

302.4


37%


53%


11%


 N/M = Not meaningful

                      

M.D.C. HOLDINGS, INC.

Homebuilding Operational Data

Net New Orders



Three Months Ended September 30,


2013


2012


% Change


Homes


Dollar
Value


Average Price


Monthly
Absorption
Rate *


Homes


Dollar Value


Average Price


Monthly
Absorption
Rate *


Homes


Dollar Value


Average Price


Monthly
Absorption
Rate *


(Dollars in thousands)

Arizona

185


$

49,009


$

264.9


3.11


136


$

30,441


$

223.8


2.96


36%


61%


18%


5%

California

91



37,654



413.8


2.81


173



56,507



326.6


3.15


(47%)


(33%)


27%


(11%)

Nevada

119



39,276



330.1


2.87


131



30,944



236.2


2.50


(9%)


27%


40%


15%

Washington

75



24,596



327.9


2.17


71



21,998



309.8


2.06


6%


12%


6%


5%

     West

470



150,535



320.3


2.81


511



139,890



273.8


2.73


(8%)


8%


17%


3%

Colorado

251



101,385



403.9


2.23


251



84,575



337.0


1.81


0%


20%


20%


23%

Utah

28



8,481



302.9


2.17


66



20,220



306.4


1.33


(58%)


(58%)


(1%)


63%

     Mountain

279



109,866



393.8


2.22


317



104,795



330.6


1.68


(12%)


5%


19%


32%

Maryland

50



23,459



469.2


0.94


39



18,031



462.3


0.72


28%


30%


1%


31%

Virginia

48



22,262



463.8


1.55


88



42,554



483.6


2.29


(45%)


(48%)


(4%)


(32%)

Florida

77



19,363



251.5


2.23


53



12,918



243.7


1.26


45%


50%


3%


77%

     East

175



65,084



371.9


1.48


180



73,503



408.4


1.34


(3%)


(11%)


(9%)


10%

          Total

924


$

325,485


$

352.3


2.25


1,008


$

318,188


$

315.7


1.98


(8%)


2%


12%


14%

 


Nine Months Ended September 30,


2013


2012


% Change


Homes


Dollar Value


Average Price


Monthly Absorption Rate *


Homes


Dollar Value


Average Price


Monthly Absorption Rate *


Homes


Dollar Value


Average Price


Monthly Absorption Rate


(Dollars in thousands)

Arizona

508


$

129,469


$

254.9


3.28


569


$

124,723


$

219.2


3.24


(11%)


4%


16%


1%

California

451



178,424



395.6


4.18


511



175,533



343.5


3.10


(12%)


2%


15%


35%

Nevada

441



134,717



305.5


4.15


522



114,823



220.0


3.07


(16%)


17%


39%


35%

Washington

262



84,668



323.2


2.67


216



64,040



296.5


2.26


21%


32%


9%


18%

     West

1,662



527,278



317.3


3.56


1,818



479,119



263.5


3.00


(9%)


10%


20%


19%

Colorado

1,050



392,728



374.0


3.02


797



276,767



347.3


1.89


32%


42%


8%


60%

Utah

137



43,644



318.6


1.98


203



60,491



298.0


1.28


(33%)


(28%)


7%


55%

     Mountain

1,187



436,372



367.6


2.85


1,000



337,258



337.3


1.73


19%


29%


9%


65%

Maryland

252



115,425



458.0


1.51


235



103,079



438.6


1.45


7%


12%


4%


4%

Virginia

231



115,473



499.9


2.23


276



136,740



495.4


2.16


(16%)


(16%)


1%


3%

Florida

243



62,163



255.8


2.14


142



33,502



235.9


1.07


71%


86%


8%


100%

Illinois

-



-



-


-


2



550



275.0


-


N/M


N/M


N/M


N/M

     East

726



293,061



403.7


1.89


655



273,871



418.1


1.55


11%


7%


(3%)


22%

          Total

3,575


$

1,256,711


$

351.5


2.82


3,473


$

1,090,248


$

313.9


2.16


3%


15%


12%


31%


N/M = Not meaningful

 

M.D.C. HOLDINGS, INC.

Homebuilding Operational Data

Active Subdivisions



September 30,


%



2013


2012


Change


Arizona

19


14


36%


California

11


18


(39%)


Nevada

15


16


(6%)


Washington

11


12


(8%)


     West

56


60


(7%)


Colorado

37


45


(18%)


Utah

5


16


(69%)


     Mountain

42


61


(31%)


Maryland

16


17


(6%)


Virginia

9


13


(31%)


Florida

11


15


(27%)


     East

36


45


(20%)


          Total

134


166


(19%)


          Average for quarter ended

137


170


(19%)


          Average for the nine months ended

141


179


(21%)


 

Backlog



September 30,


2013


2012


% Change


Homes


Dollar

Value


Average Price


Homes


Dollar

Value


Average Price


Homes


Dollar

Value


Average Price


(Dollars in thousands)

Arizona

215


$

58,313


$

271.2


279


$

62,902


$

225.5


(23%)


(7%)


20%

California

211



87,963



416.9


310



104,825



338.1


(32%)


(16%)


23%

Nevada

164



57,521



350.7


239



56,902



238.1


(31%)


1%


47%

Washington

72



25,119



348.9


104



33,885



325.8


(31%)


(26%)


7%

     West

662



228,916



345.8


932



258,514



277.4


(29%)


(11%)


25%

Colorado

587



227,335



387.3


491



179,779



366.1


20%


26%


6%

Utah

47



15,387



327.4


120



35,745



297.9


(61%)


(57%)


10%

     Mountain

634



242,722



382.8


611



215,524



352.7


4%


13%


9%

Maryland

198



94,175



475.6


192



80,876



421.2


3%


16%


13%

Virginia

168



84,867



505.2


183



91,993



502.7


(8%)


(8%)


0%

Florida

100



26,081



260.8


79



20,052



253.8


27%


30%


3%

     East

466



205,123



440.2


454



192,921



424.9


3%


6%


4%

          Total

1,762


$

676,761


$

384.1


1,997


$

666,959


$

334.0


(12%)


1%


15%

 

M.D.C. HOLDINGS, INC.

Homebuilding Operational Data


Homes Completed or Under Construction (WIP lots):



September 30,


%



2013


2012


Change


Unsold:







Completed

202


137


47%


Under construction

940


624


51%


Total unsold started homes

1,142


761


50%


Sold homes under construction or completed

1,459


1,463


0%


Model homes

229


229


0%


Total homes completed or under construction

2,830


2,453


15%


 


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



September 30, 2013


September 30, 2012





Lots Owned


Lots Optioned


Total


Lots Owned


Lots Optioned


Total


Total % Change


Arizona

2,888


134


3,022


938


63


1,001


202%


California

1,546


64


1,610


1,065


112


1,177


37%


Nevada

1,514


265


1,779


994


61


1,055


69%


Washington

518


154


672


524


212


736


(9%)


     West

6,466


617


7,083


3,521


448


3,969


78%


Colorado

4,372


1,014


5,386


3,325


433


3,758


43%


Utah

546


-


546


557


13


570


(4%)


     Mountain

4,918


1,014


5,932


3,882


446


4,328


37%


Maryland

522


325


847


584


358


942


(10%)


Virginia

415


294


709


547


103


650


9%


Florida

716


521


1,237


321


95


416


197%


Illinois

-


-


-


123


-


123


N/M


     East

1,653


1,140


2,793


1,575


556


2,131


31%


          Total

13,037


2,771


15,808


8,978


1,450


10,428


52%



N/M = Not meaningful

 

M.D.C. HOLDINGS, INC.

Reconciliation of Non-GAAP Financial Measures


Adjusted Gross Margin from Home Sales


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 September 30,


Nine Months Ended September 30,


Three Months Ended June 30,


2013


Gross Margin %


2012


Gross Margin %


2013


Gross Margin %


2012


Gross Margin %


2013


Gross Margin %



(Dollars in thousands)

Gross Margin

$

78,444


18.1%


$

49,593


15.5%


$

208,888


17.9%


$

112,126


14.7%


$

72,772


18.1%

Less: Land Sales Revenue


(25)





(15)





(1,832)





(3,420)





(1,807)



Add: Land Cost of Sales


35





2





1,470





3,210





1,435



Gross Margin from Home Sales

$

78,454


18.1%


$

49,580


15.5%


$

208,526


17.9%


$

111,916


14.7%


$

72,400


18.1%

Add: Inventory Impairments


350





-





350





-





-



Add: Interest in Cost of Sales


15,567





8,655





38,121





20,654





12,680



Add: Warranty Adjustments


-





-





300





-





-



Adjusted Gross Margin from Home Sales

$

94,371


21.8%


$

58,235


18.2%


$

247,297


21.2%


$

132,570


17.4%


$

85,080


21.3%

SOURCE M.D.C. Holdings, Inc.

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