M.D.C. Holdings Announces First Quarter 2020 Results And Selected Preliminary April 2020 Results

Datum : 05/05/2020 @ 12h00
Quelle : PR Newswire (US)
Name : M D C Holdings Inc (MDC)
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M.D.C. Holdings Announces First Quarter 2020 Results And Selected Preliminary April 2020 Results

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DENVER, May 5, 2020 /PRNewswire/ -- M.D.C Holdings, Inc. (NYSE: MDC), one of the nation's leading homebuilders, announced results for the quarter ended March 31, 2020. In light of recent market volatility and business disruptions caused by the COVID-19 pandemic, the Company also provided selected preliminary April 2020 results.

2020 First Quarter Highlights and Comparisons to 2019 First Quarter


  • Homebuilding pretax income increased 21% to $49.7 million from $41.1 million
    • Home sale revenues up 8% to $697.1 million from $647.3 million
    • Gross margin from home sales increased 100 basis points to 19.9% from 18.9%
  • Mortgage operations pretax income increased 65% to $8.2 million vs. $5.0 million
  • Other financial services pretax loss of $9.4 million vs. pretax income of $9.6 million
    • Unrealized losses on equity securities of $13.9 million vs. unrealized gains of $4.6 million
  • Net income of $36.8 million, or $0.56 per diluted share, down 9% from $40.6 million or $0.64 per diluted share
    • Effective tax rate of 24.3% vs. 27.1%
  • Dollar value of net new orders up 28% to $1.09 billion from $851.4 million
    • Unit net orders increased 23% to 2,399
  • Dollar value of ending backlog up 31% to $2.17 billion from $1.65 billion
    • Unit backlog increased 32% to 4,653

March 31, 2020 Financial Position Highlights


  • Total liquidity of $1.41 billion
    • Total cash and investments of $452.8 million
    • $959.3 million of availability under homebuilding line of credit ($1.0 billion facility size; maturity of December 2023)
  • No senior note maturities until 2024
  • Quarterly cash dividend of thirty-three cents ($0.33) per share declared on April 1, 2020, up 10% from prior year

2020 April Highlights and Comparison to 2019 April (preliminary and unaudited)


  • Net new home orders decreased 53% to 357 vs. 753
    • Gross new home orders decreased 27% to 662 vs. 906
    • Cancellations as a percentage of homes in beginning backlog of 6.6% vs. 4.3%
  • New home deliveries increased 11% to 523 vs. 470
  • Ending backlog units up 18% to 4,487 from 3,817

Larry A. Mizel, MDC's Chairman and Chief Executive Officer, stated, "In response to the COVID-19 pandemic, we have adapted our business to protect the health and safety of our employees, subcontractors and customers. For example, we are using technology to help drive compliance with social distancing and shelter-in-place requirements by guiding many customers through the homebuilding process using a virtual environment. Our technology has also enabled hundreds of our employees to work from home. For those who cannot work remotely, we have greatly enhanced our cleaning and sanitizing protocols and implemented screening at our sites and offices across the country, and we have modified our business practices as necessary to allow for social distancing. On behalf of our management team, I would like to express sincere gratitude to our dedicated employees and all others who have supported our Company in adjusting to the new reality brought on by COVID-19."

Mr. Mizel continued, "As our results from the first quarter demonstrate, 2020 was off to an excellent start thanks to a robust job market, elevated consumer confidence and low levels of new and existing home inventory.  This positive fundamental backdrop, coupled with our continued shift to more affordable product offerings, resulted in a 21% increase in our homebuilding pretax income for the quarter, as well as solid order and backlog growth. While demand trends deteriorated significantly at the end of March and into April, we believe the long-term outlook for our industry remains positive due to the ongoing demographic shifts taking place in our country and the lack of available housing supply."

Mr. Mizel concluded, "Although the ultimate impact of COVID-19 on the economy is still unclear, MDC is well-positioned to weather the current economic crisis thanks to our seasoned leadership team, our strong balance sheet and our conservative operating model.  With high liquidity, low leverage and limited speculative inventory, our Company is built to succeed through the entirety of the homebuilding cycle.  We believe that this approach, coupled with our industry-leading dividend, will lead to superior risk-adjusted returns for shareholders over time."

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 205,000 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 March 31, 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.

 

M.D.C. HOLDINGS, INC.

Consolidated Statements of Operations and Comprehensive Income

(Unaudited)



Three Months Ended


March 31,


2020


2019


(Dollars in thousands, except per share amounts)

Homebuilding:






Home sale revenues

$

697,085


$

647,278

Home cost of sales


(558,647)



(524,552)

Inventory impairments


-



(610)

Total cost of sales


(558,647)



(525,162)

Gross profit


138,438



122,116

Selling, general and administrative expenses


(89,321)



(82,261)

Interest and other income


1,889



2,391

Other expense


(1,337)



(1,191)

Homebuilding pretax income


49,669



41,055







Financial Services:






Revenues


21,886



17,404

Expenses


(10,929)



(8,957)

Other income (expense), net


(12,064)



6,104

Financial services pretax income (loss)


(1,107)



14,551







Income before income taxes


48,562



55,606

Provision for income taxes


(11,802)



(15,056)

Net income

$

36,760


$

40,550







Comprehensive income

$

36,760


$

40,550







Earnings per share:






Basic

$

0.58


$

0.66

Diluted

$

0.56


$

0.64







Weighted average common shares outstanding:






Basic


62,491,238



60,939,364

Diluted


64,931,225



62,708,334







Dividends declared per share

$

0.33


$

0.30

 

M.D.C. HOLDINGS, INC.

Consolidated Balance Sheets

(Unaudited)



March 31,


December 31,


2020


2019

ASSETS

(Dollars in thousands, except

per share amounts)


Homebuilding:






Cash and cash equivalents

$

386,704


$

424,186

Restricted cash


15,762



14,279

Trade and other receivables


69,301



65,829

Inventories:






Housing completed or under construction


1,215,214



1,036,191

Land and land under development


1,301,433



1,330,384

Total inventories


2,516,647



2,366,575

Property and equipment, net


62,316



60,414

Deferred tax asset, net


20,660



21,768

Prepaid and other assets


78,002



78,358

Total homebuilding assets


3,149,392



3,031,409

Financial Services:






Cash and cash equivalents


22,159



35,747

Marketable securities


43,985



56,747

Mortgage loans held-for-sale, net


133,921



197,021

Other assets


24,255



17,432

Total financial services assets


224,320



306,947

      Total Assets

$

3,373,712


$

3,338,356

LIABILITIES AND EQUITY






Homebuilding:






Accounts payable

$

97,980


$

87,364

Accrued and other liabilities


233,034



245,940

Revolving credit facility


15,000



15,000

Senior notes, net


1,036,900



989,422

Total homebuilding liabilities


1,382,914



1,337,726

Financial Services:






Accounts payable and accrued liabilities


70,977



68,529

Mortgage repurchase facility


108,744



149,616

Total financial services liabilities


179,721



218,145

      Total Liabilities


1,562,635



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; 63,052,495 and 62,574,961 issued and outstanding at March 31, 2020 and December 31, 2019, respectively


631



626

Additional paid-in-capital


1,361,362



1,348,733

Retained earnings


449,084



433,126

Total Stockholders' Equity


1,811,077



1,782,485

Total Liabilities and Stockholders' Equity

$

3,373,712


$

3,338,356

 

M.D.C. HOLDINGS, INC.

Consolidated Statement of Cash Flows

(Unaudited)



Three Months Ended


March 31,


2020


2019



(Dollars in thousands)

Operating Activities:






Net income

$

36,760


$

40,550

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






Stock-based compensation expense


4,440



4,251

Depreciation and amortization


5,152



4,878

Inventory impairments


-



610

Net (gain) loss on marketable equity securities


13,268



(4,840)

Deferred income tax expense


1,131



2,696

Net changes in assets and liabilities:






      Trade and other receivables


(1,611)



(13,771)

      Mortgage loans held-for-sale, net


63,100



38,401

      Housing completed or under construction


(178,873)



2,137

      Land and land under development


29,051



(18,496)

      Prepaid and other assets


(8,460)



1,085

      Accounts payable and accrued liabilities


(1,131)



(3,153)

Net cash provided by (used in) operating activities


(37,173)



54,348







Investing Activities:






Purchases of marketable securities


(9,782)



(4,785)

Sales of marketable securities


9,276



4,737

Purchases of property and equipment


(6,512)



(6,386)

Net cash used in investing activities


(7,018)



(6,434)







Financing Activities:






Payments on mortgage repurchase facility, net


(40,872)



(31,959)

Repayment of senior notes


(250,000)



-

Proceeds from issuance of senior notes


298,050



-

Dividend payments


(20,768)



(17,115)

Issuance of shares under stock-based compensation programs, net


8,194



7,087

Net cash used in financing activities


(5,396)



(41,987)







Net increase (decrease) in cash, cash equivalents and restricted cash


(49,587)



5,927

Cash, cash equivalents and restricted cash:






      Beginning of period


474,212



470,139

      End of period

$

424,625


$

476,066







Reconciliation of cash, cash equivalents and restricted cash:






Homebuilding:






Cash and cash equivalents

$

386,704


$

416,374

Restricted cash


15,762



8,136

Financial Services:






Cash and cash equivalents


22,159



51,556

Total cash, cash equivalents and restricted cash

$

424,625


$

476,066

 

New Home Deliveries




 Three Months Ended March 31, 



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

871


$

405,498


$

465.6


752


$

369,558


$

491.4


16%


10%


(5)%


Mountain

435



222,858



512.3


409



209,192



511.5


6%


7%


0%


East

241



68,729



285.2


197



68,528



347.9


22%


0%


(18)%


Total

1,547


$

697,085


$

450.6


1,358


$

647,278


$

476.6


14%


8%


(5)%

 

Net New Orders



 Three Months Ended March 31, 


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

1,382


$

655,892


$

474.6


5.13


965


$

433,307


$

449.0


3.82


43%


51%


6%


34%

Mountain

693


339,132


489.4


3.54


719


336,932


468.6


3.52


(4)%


1%


4%


1%

East

324



97,723



301.6


3.66


272



81,179



298.5


4.17


19%


20%


1%


(12)%

Total

2,399


$

1,092,747


$

455.5


4.33


1,956


$

851,418


$

435.3


3.75


23%


28%


5%


16%


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

 

Active Subdivisions










Average Active Subdivisions



Active Subdivisions


Three Months Ended



March 31,


%


March 31,


%



2020


2019


Change


2020


2019


Change


West

92


88


5%


90


84


7%


Mountain

64


64


0%


65


69


(6)%


East

29


26


12%


30


22


36%


Total

185


178


4%


185


175


6%

 

Backlog




March 31,



2020


2019


% Change



Homes


Dollar

Value

Average
Price


Homes


Dollar

Value


Average
Price


Homes


Dollar

Value


Average
Price



(Dollars in thousands)


West

2,534


$

1,227,996

$

484.6


1,736


$

830,703


$

478.5


46%


48%


1%


Mountain

1,469



754,155


513.4


1,353



690,623



510.4


9%


9%


1%


East

650



191,972


295.3


445



133,140



299.2


46%


44%


(1)%


Total

4,653


$

2,174,123

$

467.3


3,534


$

1,654,466


$

468.2


32%


31%


(0)%

 

Homes Completed or Under Construction (WIP lots)




March 31,


%



2020


2019


Change


Unsold:







Completed

160


120


33%


Under construction

216


177


22%


Total unsold started homes

376


297


27%


Sold homes under construction or completed

3,259


2,362


38%


Model homes under construction or completed

502


459


9%


Total homes completed or under construction

4,137


3,118


33%

 

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




March 31, 2020


March 31, 2019





Lots Owned


Lots Optioned


Total


Lots Owned


Lots Optioned


Total


Total %
Change


West

9,641


2,393


12,034


7,894


2,462


10,356


16%


Mountain

6,540


4,007


10,547


6,636


2,612


9,248


14%


East

2,410


2,133


4,543


1,989


1,294


3,283


38%


Total

18,591


8,533


27,124


16,519


6,368


22,887


19%

 

Selling, General and Administrative Expenses




Three Months Ended March 31,



2020


2019


Change



(Dollars in thousands)


General and administrative expenses

$

45,089


$

42,572


$

2,517


General and administrative expenses as a percentage of home sale revenues


6.5%



6.6%



(10) bps












Marketing expenses

$

21,446


$

18,296


$

3,150


Marketing expenses as a percentage of home sale revenues


3.1%



2.8%



30 bps












Commissions expenses

$

22,786


$

21,393


$

1,393


Commissions expenses as a percentage of home sale revenues


3.3%



3.3%



0 bps












Total selling, general and administrative expenses

$

89,321


$

82,261


$

7,060


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


12.8%



12.7%



10 bps

 

Capitalized Interest




Three Months Ended



March 31,



2020


2019



(Dollars in thousands)


Homebuilding interest incurred

$

16,534


$

16,031


Less:  Interest capitalized


(16,534)



(16,031)


Homebuilding interest expensed

$

-


$

-









Interest capitalized, beginning of period

$

55,310


$

54,845


Plus: Interest capitalized during period


16,534



16,031


Less: Previously capitalized interest included in home cost of sales


(12,767)



(13,929)


Interest capitalized, end of period

$

59,077


$

56,947

 

Cision View original content:http://www.prnewswire.com/news-releases/mdc-holdings-announces-first-quarter-2020-results-and-selected-preliminary-april-2020-results-301052492.html

SOURCE M.D.C. Holdings, Inc.

Copyright 2020 PR Newswire

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