Exhibit 99.1
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| M.D.C. HOLDINGS, INC. |
News Release
M.D.C. HOLDINGS ANNOUNCES 2016 THIRD QUARTER RESULTS
DENVER, COLORADO, Tuesday, November 1, 2016. M.D.C. Holdings, Inc. (NYSE: MDC) announced results for the quarter ended September 30, 2016.
2016Third Quarter Highlights and Comparisons to 2015Third Quarter
| | ● | Net income up 78% to $26.4 million, or $0.54 per share from $14.8 million or $0.30 per share |
| | ● | Home sale revenues up 27% to $575.7 million from $454.7 million |
| | o | Average sales price up 6% to $445,300 |
| | o | Homes delivered up 20% to 1,293 |
| | ● | Selling, general and administrative expenses as a percentage of home sale revenues improved 180 basis points from 12.6% to 10.8% |
| | ● | Dollar value of net new orders up 17% to $570.3 million from $489.0 million |
| | o | Net new orders up 17% to 1,296 |
| | ● | Ending backlog dollar value up 37% to $1.61 billion from $1.18 billion |
| | o | Ending backlog units up 33% to 3,448 |
| | ● | Industry-leading dividend payment continued at $0.25 per share |
Larry A. Mizel, MDC’s Chairman and Chief Executive Officer, stated, “We are very pleased with our 2016 third quarter results, as our net income increased by 78% year-over-year. Even though our cycle times continued to increase during the quarter based on limited subcontractor availability in many markets, we still increased our home sale revenues by 27% over the prior year, resulting in better leverage of our overhead costs and higher return on equity than a year ago.”
Mr. Mizel concluded, “The 2016 third quarter was our tenth consecutive quarter of year-over-year growth in net new orders, and we achieved our highest third quarter average monthly sales absorption pace in over a decade. Our order results included an increased contribution from our new, more affordable collection of home plans, which are still in the early stages of rollout. With a simpler design, these new plans should ultimately have a positive impact on our overall construction cycle times, which remain a key focus area for the Company as we close out the year.”
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M.D.C. HOLDINGS, INC. |
Homebuilding
Home sale revenues for the 2016 third quarter increased 27% to $575.7 million, primarily driven by a 20% increase in deliveries, which was mostly the result of a 35% year-over-year increase of our homes in beginning backlog, coupled with a 6% increase in average selling price of homes closed. The increase in average selling price was primarily the result of a mix shift to higher-priced submarkets and, to a lesser extent, price increases implemented in the prior year.
For the 2016 third quarter, our gross margin from home sales declined 90 basis points to 15.5% from the same period in 2015 primarily due to increased land and construction costs in certain of our markets and warranty adjustments totaling $1.8 million that resulted from higher than expected warranty related spending. Gross margin for the 2016 third quarter included $4.7 million of inventory impairments, compared with $4.4 million for the same quarter in the prior year.
Selling, general and administrative (“SG&A”) expenses for the 2016 third quarter were $61.9 million, up $4.5 million from $57.4 million for the same period in 2015. Our SG&A expenses as a percentage of home sale revenue (“SG&A rate”) improved by 180 basis points to 10.8% for the 2016 third quarter from 12.6% in the 2015 third quarter. This decrease in our SG&A rate was primarily the result of a 27% increase in home sale revenues.
The dollar value of net new orders for the 2016 third quarter increased 17% year-over-year to $570.3 million. The improvement was the result of a 17% increase in the number of homes sold, driven primarily by our monthly sales absorption rate being up 15% year-over-year. Our average selling price of net new orders was flat from the same period in the prior year, as price increases were offset by a shift in mix to lower price communities, in part related to the introduction of our more affordable product earlier this year.
Our backlog value at the end of the 2016 third quarter was up 37% year-over-year to $1.61 billion. The improvement was due mostly to a 33% increase in the number of units in backlog, which is primarily the result of (1) an increase in net new order activity over the last twelve months for most of our markets, (2) a higher percentage of our backlog coming from build-to-order sales, which are generally in backlog for a longer period of time and, (3) limited subcontractor availability, which has extended our cycle times in most of our larger markets.
Financial Services
Income before taxes for our financial services operations for the 2016 third quarter was $10.4 million, a $2.1 million increase from $8.3 million in the 2015 third quarter. This improvement was primarily the result of (1) year-over-year increases in the dollar value of loans locked, originated, and sold, and (2) higher gains on loans locked and sold.
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M.D.C. HOLDINGS, INC. |
About MDC
Since 1972, MDC's subsidiary companies have built and financed the American dream for more than 185,000 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 Diego, Orange County, San Francisco Bay Area, Sacramento, Washington D.C., Baltimore, Orlando, Jacksonville, 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.
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M.D.C. HOLDINGS, INC. |
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 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 changes in consumer confidence, inflation or deflation and employment levels; (2) changes in business conditions experienced by MDC, including cancellation rates, net home orders, home gross margins, land and home values and subdivision counts; (3) changes in interest rates, mortgage lending programs and the availability of credit; (4) changes in the market value of MDC’s investments in marketable securities; (5) uncertainty in the mortgage lending industry, including repurchase requirements associated with HomeAmerican Mortgage Corporation’s sale of mortgage loans (6) the relative stability of debt and equity markets; (7) competition; (8) the availability and cost of land and other raw materials used by MDC in its homebuilding operations; (9) the availability and cost of performance bonds and insurance covering risks associated with our business; (10) shortages and the cost of labor; (11) weather related slowdowns and natural disasters; (12) slow growth initiatives; (13) building moratoria; (14) governmental regulation, including 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 September 30, 2016, 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: Kevin McCarty
Vice President of Finance and Corporate Controller
1-866-424-3395 / (720) 977-3395
IR@mdch.com
M.D.C. HOLDINGS, INC.
Consolidated Statements of Operations and Comprehensive Income
| | | Three Months Ended | | | Nine Months Ended | |
| | | September 30, | | | September 30, | |
| | | 2016 | | | 2015 | | | 2016 | | | 2015 | |
| | | (Dollars in thousands, except per share amounts) | |
| | | (Unaudited) | |
Homebuilding: | | | | | | | | | | | | | | | | |
Home sale revenues | | $ | 575,722 | | | $ | 454,740 | | | $ | 1,541,337 | | | $ | 1,293,457 | |
Land sale revenues | | | 2,290 | | | | 906 | | | | 4,930 | | | | 1,816 | |
Total home and land sale revenues | | | 578,012 | | | | 455,646 | | | | 1,546,267 | | | | 1,295,273 | |
Home cost of sales | | | (481,511 | ) | | | (375,948 | ) | | | (1,287,373 | ) | | | (1,079,609 | ) |
Land cost of sales | | | (2,318 | ) | | | (819 | ) | | | (4,197 | ) | | | (1,944 | ) |
Inventory impairments | | | (4,700 | ) | | | (4,351 | ) | | | (6,300 | ) | | | (4,701 | ) |
Total cost of sales | | | (488,529 | ) | | | (381,118 | ) | | | (1,297,870 | ) | | | (1,086,254 | ) |
Gross margin | | | 89,483 | | | | 74,528 | | | | 248,397 | | | | 209,019 | |
Selling, general and administrative expenses | | | (61,904 | ) | | | (57,444 | ) | | | (182,621 | ) | | | (162,757 | ) |
Interest and other income | | | 1,869 | | | | 838 | | | | 5,358 | | | | 5,412 | |
Other expense | | | (1,558 | ) | | | (350 | ) | | | (2,463 | ) | | | (2,539 | ) |
Other-than-temporary impairment of marketable securities | | | (215 | ) | | | (2,176 | ) | | | (934 | ) | | | (2,176 | ) |
Homebuilding pretax income | | | 27,675 | | | | 15,396 | | | | 67,737 | | | | 46,959 | |
| | | | | | | | | | | | | | | | | |
Financial Services: | | | | | | | | | | | | | | | | |
Revenues | | | 17,408 | | | | 12,841 | | | | 44,248 | | | | 34,852 | |
Expenses | | | (7,955 | ) | | | (5,464 | ) | | | (21,739 | ) | | | (15,830 | ) |
Interest and other income | | | 1,035 | | | | 885 | | | | 2,648 | | | | 2,885 | |
Other-than-temporary impairment of marketable securities | | | (111 | ) | | | - | | | | (111 | ) | | | - | |
Financial services pretax income | | | 10,377 | | | | 8,262 | | | | 25,046 | | | | 21,907 | |
| | | | | | | | | | | | | | | | | |
Income before income taxes | | | 38,052 | | | | 23,658 | | | | 92,783 | | | | 68,866 | |
Provision for income taxes | | | (11,693 | ) | | | (8,880 | ) | | | (29,948 | ) | | | (25,670 | ) |
Net income | | $ | 26,359 | | | $ | 14,778 | | | $ | 62,835 | | | $ | 43,196 | |
| | | | | | | | | | | | | | | | | |
Other comprehensive income (loss) related to available for sale securities, net of tax | | | 1,028 | | | | (226 | ) | | | 3,871 | | | | 722 | |
Comprehensive income | | $ | 27,387 | | | $ | 14,552 | | | $ | 66,706 | | | $ | 43,918 | |
| | | | | | | | | | | | | | | | | |
Earnings per share: | | | | | | | | | | | | | | | | |
Basic | | $ | 0.54 | | | $ | 0.30 | | | $ | 1.28 | | | $ | 0.88 | |
Diluted | | $ | 0.54 | | | $ | 0.30 | | | $ | 1.28 | | | $ | 0.88 | |
| | | | | | | | | | | | | | | | | |
Weighted average common shares outstanding | | | | | | | | | | | | | | | | |
Basic | | | 48,854,412 | | | | 48,785,973 | | | | 48,844,613 | | | | 48,756,265 | |
Diluted | | | 49,009,949 | | | | 49,070,291 | | | | 48,855,014 | | | | 48,982,975 | |
| | | | | | | | | | | | | | | | | |
Dividends declared per share | | $ | 0.25 | | | $ | 0.25 | | | $ | 0.75 | | | $ | 0.75 | |
M.D.C. HOLDINGS, INC.
Consolidated Balance Sheets
| | | September 30, | | | December 31, | |
| | | 2016 | | | 2015 | |
ASSETS | | (Dollars in thousands, except | |
| | | per share amounts) | |
Homebuilding: | | (Unaudited) | | | | | |
Cash and cash equivalents | | $ | 129,278 | | | $ | 144,342 | |
Marketable securities | | | 57,116 | | | | 92,387 | |
Restricted cash | | | 4,621 | | | | 3,750 | |
Trade and other receivables | | | 43,082 | | | | 23,314 | |
Inventories: | | | | | | | | |
Housing completed or under construction | | | 976,372 | | | | 747,036 | |
Land and land under development | | | 870,733 | | | | 1,016,926 | |
Total inventories | | | 1,847,105 | | | | 1,763,962 | |
Property and equipment, net | | | 28,749 | | | | 28,226 | |
Deferred tax asset, net | | | 85,128 | | | | 99,107 | |
Metropolitan district bond securities (related party) | | | 29,132 | | | | 25,911 | |
Prepaid and other assets | | | 66,195 | | | | 65,394 | |
Total homebuilding assets | | | 2,290,406 | | | | 2,246,393 | |
Financial Services: | | | | | | | | |
Cash and cash equivalents | | | 34,180 | | | | 36,646 | |
Marketable securities | | | 22,105 | | | | 11,307 | |
Mortgage loans held-for-sale, net | | | 117,989 | | | | 115,670 | |
Other assets | | | 9,590 | | | | 5,883 | |
Total financial services assets | | | 183,864 | | | | 169,506 | |
Total Assets | | $ | 2,474,270 | | | $ | 2,415,899 | |
LIABILITIES AND EQUITY | | | | | | | | |
Homebuilding: | | | | | | | | |
Accounts payable | | $ | 54,117 | | | $ | 40,472 | |
Accrued liabilities | | | 122,227 | | | | 122,886 | |
Revolving credit facility | | | 15,000 | | | | 15,000 | |
Senior notes, net | | | 841,359 | | | | 840,524 | |
Total homebuilding liabilities | | | 1,032,703 | | | | 1,018,882 | |
Financial Services: | | | | | | | | |
Accounts payable and accrued liabilities | | | 56,934 | | | | 52,114 | |
Mortgage repurchase facility | | | 92,011 | | | | 88,611 | |
Total financial services liabilities | | | 148,945 | | | | 140,725 | |
Total Liabilities | | | 1,181,648 | | | | 1,159,607 | |
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; 49,033,981 and 48,888,424 issued and outstanding at September 30, 2016 and December 31, 2015, respectively | | | 490 | | | | 489 | |
Additional paid-in-capital | | | 922,132 | | | | 915,746 | |
Retained earnings | | | 350,414 | | | | 324,342 | |
Accumulated other comprehensive income | | | 19,586 | | | | 15,715 | |
Total Stockholders' Equity | | | 1,292,622 | | | | 1,256,292 | |
Total Liabilities and Stockholders' Equity | | $ | 2,474,270 | | | $ | 2,415,899 | |
M.D.C. HOLDINGS, INC.
Consolidated Statement of Cash Flows
| | | Three Months Ended | | | Nine Months Ended | |
| | | September 30, | | | September 30, | |
| | | 2016 | | | 2015 | | | 2016 | | | 2015 | |
| | | (Dollars in thousands) | |
| | | (Unaudited) | |
Operating Activities: | | | | | | | | | | | | | | | | |
Net income | | $ | 26,359 | | | $ | 14,778 | | | $ | 62,835 | | | $ | 43,196 | |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | | | | | | | | | | | | | | | | |
Stock-based compensation expense | | | 473 | | | | 3,998 | | | | 6,636 | | | | 6,589 | |
Depreciation and amortization | | | 1,335 | | | | 992 | | | | 3,702 | | | | 3,084 | |
Inventory impairments | | | 4,700 | | | | 4,351 | | | | 6,300 | | | | 4,701 | |
Other-than-temporary impairment of marketable securities | | | 326 | | | | 2,176 | | | | 1,045 | | | | 2,176 | |
Loss (gain) on sale of marketable securities | | | (649 | ) | | | 588 | | | | (911 | ) | | | 126 | |
Amortization of discount / premiums on marketable debt securities, net | | | - | | | | - | | | | - | | | | 100 | |
Deferred income tax expense | | | 3,484 | | | | 8,515 | | | | 11,357 | | | | 24,782 | |
Net changes in assets and liabilities: | | | | | | | | | | | | | | | | |
Restricted cash | | | (675 | ) | | | 144 | | | | (871 | ) | | | (1,984 | ) |
Trade and other receivables | | | 4,556 | | | | (283 | ) | | | (21,679 | ) | | | (575 | ) |
Mortgage loans held-for-sale | | | 710 | | | | 11,095 | | | | (2,319 | ) | | | 19,759 | |
Housing completed or under construction | | | (42,934 | ) | | | (48,367 | ) | | | (229,739 | ) | | | (89,841 | ) |
Land and land under development | | | 18,430 | | | | (62,724 | ) | | | 141,131 | | | | (25,805 | ) |
Other assets | | | (1,598 | ) | | | (4,954 | ) | | | (4,573 | ) | | | (8,072 | ) |
Accounts payable and accrued liabilities | | | (1,334 | ) | | | (1,304 | ) | | | 18,183 | | | | (4,722 | ) |
Net cash provided by (used in) operating activities | | | 13,183 | | | | (70,995 | ) | | | (8,903 | ) | | | (26,486 | ) |
| | | | | | | | | | | | | | | | | |
Investing Activities: | | | | | | | | | | | | | | | | |
Purchases of marketable securities | | | (12,846 | ) | | | (12,207 | ) | | | (28,272 | ) | | | (46,886 | ) |
Maturities of marketable securities | | | - | | | | - | | | | - | | | | 1,510 | |
Sales of marketable securities | | | 6,108 | | | | 44,731 | | | | 56,873 | | | | 94,910 | |
Purchases of property and equipment | | | (748 | ) | | | (409 | ) | | | (3,865 | ) | | | (830 | ) |
Net cash provided by (used in) investing activities | | | (7,486 | ) | | | 32,115 | | | | 24,736 | | | | 48,704 | |
| | | | | | | | | | | | | | | | | |
Financing Activities: | | | | | | | | | | | | | | | | |
Advances (payments) on mortgage repurchase facility, net | | | (1,286 | ) | | | (6,245 | ) | | | 3,400 | | | | (17,067 | ) |
Dividend payments | | | (12,259 | ) | | | (12,221 | ) | | | (36,763 | ) | | | (36,646 | ) |
Proceeds from exercise of stock options | | | - | | | | 53 | | | | - | | | | 665 | |
Net cash used in financing activities | | | (13,545 | ) | | | (18,413 | ) | | | (33,363 | ) | | | (53,048 | ) |
| | | | | | | | | | | | | | | | | |
Net decrease in cash and cash equivalents | | | (7,848 | ) | | | (57,293 | ) | | | (17,530 | ) | | | (30,830 | ) |
Cash and cash equivalents: | | | | | | | | | | | | | | | | |
Beginning of period | | | 171,306 | | | | 180,288 | | | | 180,988 | | | | 153,825 | |
End of period | | $ | 163,458 | | | $ | 122,995 | | | $ | 163,458 | | | $ | 122,995 | |
M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
New Home Deliveries
| | | Three Months Ended September 30, | |
| | | 2016 | | | 2015 | | | % Change | |
| | | Homes | | | Dollar
Value | | | Average Price | | | Homes | | | Dollar
Value | | | Average Price | | | Homes | | | Dollar
Value | | | Average Price | |
| | | (Dollars in thousands) | |
Arizona | | | 221 | | | $ | 64,314 | | | $ | 291.0 | | | | 190 | | | $ | 54,434 | | | $ | 286.5 | | | | 16 | % | | | 18 | % | | | 2 | % |
California | | | 195 | | | | 125,601 | | | | 644.1 | | | | 161 | | | | 84,877 | | | | 527.2 | | | | 21 | % | | | 48 | % | | | 22 | % |
Nevada | | | 177 | | | | 59,601 | | | | 336.7 | | | | 159 | | | | 60,258 | | | | 379.0 | | | | 11 | % | | | (1 | %) | | | (11 | %) |
Washington | | | 75 | | | | 35,072 | | | | 467.6 | | | | 75 | | | | 30,174 | | | | 402.3 | | | | 0 | % | | | 16 | % | | | 16 | % |
West | | | 668 | | | | 284,588 | | | | 426.0 | | | | 585 | | | | 229,743 | | | | 392.7 | | | | 14 | % | | | 24 | % | | | 8 | % |
Colorado | | | 343 | | | | 169,859 | | | | 495.2 | | | | 281 | | | | 132,916 | | | | 473.0 | | | | 22 | % | | | 28 | % | | | 5 | % |
Utah | | | 55 | | | | 20,728 | | | | 376.9 | | | | 39 | | | | 13,460 | | | | 345.1 | | | | 41 | % | | | 54 | % | | | 9 | % |
Mountain | | | 398 | | | | 190,587 | | | | 478.9 | | | | 320 | | | | 146,376 | | | | 457.4 | | | | 24 | % | | | 30 | % | | | 5 | % |
Maryland | | | 61 | | | | 27,297 | | | | 447.5 | | | | 55 | | | | 26,122 | | | | 474.9 | | | | 11 | % | | | 4 | % | | | (6 | %) |
Virginia | | | 78 | | | | 39,795 | | | | 510.2 | | | | 51 | | | | 25,309 | | | | 496.3 | | | | 53 | % | | | 57 | % | | | 3 | %) |
Florida | | | 88 | | | | 33,455 | | | | 380.2 | | | | 69 | | | | 27,190 | | | | 394.1 | | | | 28 | % | | | 23 | % | | | (4 | %) |
East | | | 227 | | | | 100,547 | | | | 442.9 | | | | 175 | | | | 78,621 | | | | 449.3 | | | | 30 | % | | | 28 | % | | | (1 | %) |
Total | | | 1,293 | | | $ | 575,722 | | | $ | 445.3 | | | | 1,080 | | | $ | 454,740 | | | $ | 421.1 | | | | 20 | % | | | 27 | % | | | 6 | % |
| | | Nine Months Ended September 30, | |
| | | 2016 | | | 2015 | | | % Change | |
| | | Homes | | | Dollar
Value | | | Average Price | | | Homes | | | Dollar
Value | | | Average Price | | | Homes | | | Dollar
Value | | | Average Price | |
| | | (Dollars in thousands) | |
Arizona | | | 582 | | | $ | 170,352 | | | $ | 292.7 | | | | 543 | | | $ | 160,011 | | | $ | 294.7 | | | | 7 | % | | | 6 | % | | | (1 | %) |
California | | | 512 | | | | 319,116 | | | | 623.3 | | | | 486 | | | | 243,407 | | | | 500.8 | | | | 5 | % | | | 31 | % | | | 24 | %) |
Nevada | | | 432 | | | | 149,861 | | | | 346.9 | | | | 404 | | | | 147,788 | | | | 365.8 | | | | 7 | % | | | 1 | % | | | (5 | %) |
Washington | | | 234 | | | | 106,665 | | | | 455.8 | | | | 190 | | | | 73,055 | | | | 384.5 | | | | 23 | % | | | 46 | % | | | 19 | % |
West | | | 1,760 | | | | 745,994 | | | | 423.9 | | | | 1,623 | | | | 624,261 | | | | 384.6 | | | | 8 | % | | | 20 | % | | | 10 | % |
Colorado | | | 945 | | | | 463,534 | | | | 490.5 | | | | 843 | | | | 392,779 | | | | 465.9 | | | | 12 | % | | | 18 | % | | | 5 | % |
Utah | | | 145 | | | | 53,238 | | | | 367.2 | | | | 95 | | | | 33,600 | | | | 353.7 | | | | 53 | % | | | 58 | % | | | 4 | % |
Mountain | | | 1,090 | | | | 516,772 | | | | 474.1 | | | | 938 | | | | 426,379 | | | | 454.6 | | | | 16 | % | | | 21 | % | | | 4 | % |
Maryland | | | 178 | | | | 84,742 | | | | 476.1 | | | | 168 | | | | 78,980 | | | | 470.1 | | | | 6 | % | | | 7 | % | | | 1 | % |
Virginia | | | 193 | | | | 98,572 | | | | 510.7 | | | | 170 | | | | 82,755 | | | | 486.8 | | | | 14 | % | | | 19 | % | | | 5 | % |
Florida | | | 251 | | | | 95,257 | | | | 379.5 | | | | 216 | | | | 81,082 | | | | 375.4 | | | | 16 | % | | | 17 | % | | | 1 | % |
East | | | 622 | | | | 278,571 | | | | 447.9 | | | | 554 | | | | 242,817 | | | | 438.3 | | | | 12 | % | | | 15 | % | | | 2 | % |
Total | | | 3,472 | | | $ | 1,541,337 | | | $ | 443.9 | | | | 3,115 | | | $ | 1,293,457 | | | $ | 415.2 | | | | 11 | % | | | 19 | % | | | 7 | % |
M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
Net New Orders
| | | Three Months Ended September 30, | |
| | | 2016 | | | 2015 | | | % 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 | | | 225 | | | $ | 68,611 | | | $ | 304.9 | | | | 2.56 | | | | 214 | | | $ | 60,274 | | | $ | 281.7 | | | | 2.15 | | | | 5 | % | | | 14 | % | | | 8 | % | | | 19 | % |
California | | | 260 | | | | 154,113 | | | | 592.7 | | | | 4.08 | | | | 184 | | | | 118,943 | | | | 646.4 | | | | 3.07 | | | | 41 | % | | | 30 | % | | | (8 | %) | | | 33 | % |
Nevada | | | 175 | | | | 59,068 | | | | 337.5 | | | | 2.75 | | | | 110 | | | | 40,196 | | | | 365.4 | | | | 2.99 | | | | 59 | % | | | 47 | % | | | (8 | %) | | | (8 | %) |
Washington | | | 83 | | | | 38,400 | | | | 462.7 | | | | 2.26 | | | | 93 | | | | 40,260 | | | | 432.9 | | | | 2.25 | | | | (11 | %) | | | (5 | %) | | | 7 | % | | | 0 | % |
West | | | 743 | | | | 320,192 | | | | 430.9 | | | | 2.95 | | | | 601 | | | | 259,673 | | | | 432.1 | | | | 2.53 | | | | 24 | % | | | 23 | % | | | (0 | %) | | | 17 | % |
Colorado | | | 321 | | | | 147,984 | | | | 461.0 | | | | 3.82 | | | | 273 | | | | 129,221 | | | | 473.3 | | | | 2.39 | | | | 18 | % | | | 15 | % | | | (3 | %) | | | 60 | % |
Utah | | | 35 | | | | 14,979 | | | | 428.0 | | | | 1.41 | | | | 48 | | | | 17,282 | | | | 360.0 | | | | 2.21 | | | | (27 | %) | | | (13 | %) | | | 19 | % | | | (36 | %) |
Mountain | | | 356 | | | | 162,963 | | | | 457.8 | | | | 3.27 | | | | 321 | | | | 146,503 | | | | 456.4 | | | | 2.36 | | | | 11 | % | | | 11 | % | | | 0 | % | | | 39 | % |
Maryland | | | 50 | | | | 23,125 | | | | 462.5 | | | | 1.42 | | | | 53 | | | | 26,667 | | | | 503.2 | | | | 1.81 | | | | (6 | %) | | | (13 | %) | | | (8 | %) | | | (22 | %) |
Virginia | | | 52 | | | | 27,270 | | | | 524.4 | | | | 2.04 | | | | 48 | | | | 22,812 | | | | 475.3 | | | | 2.21 | | | | 8 | % | | | 20 | % | | | 10 | % | | | (8 | %) |
Florida | | | 95 | | | | 36,711 | | | | 386.4 | | | | 1.74 | | | | 86 | | | | 33,393 | | | | 388.3 | | | | 1.98 | | | | 10 | % | | | 10 | % | | | (0 | %) | | | (12 | %) |
East | | | 197 | | | | 87,106 | | | | 442.2 | | | | 1.71 | | | | 187 | | | | 82,872 | | | | 443.2 | | | | 1.98 | | | | 5 | % | | | 5 | % | | | (0 | %) | | | (14 | %) |
Total | | | 1,296 | | | $ | 570,261 | | | $ | 440.0 | | | | 2.72 | | | | 1,109 | | | $ | 489,048 | | | $ | 441.0 | | | | 2.37 | | | | 17 | % | | | 17 | % | | | (0 | %) | | | 15 | % |
| | | Nine Months Ended September 30, | |
| | | 2016 | | | 2015 | | | % Change | |
| | | Homes | | | Dollar Value | | | Average Price | | | Monthly Absorption Rate * | | | Homes | | | DollarValue | | | Average Price | | | Monthly Absorption Rate * | | | Homes | | | Dollar Value | | | Average Price | | | Monthly Absorption Rate * | |
| | | (Dollars in thousands) | |
Arizona | | | 684 | | | $ | 209,013 | | | $ | 305.6 | | | | 2.52 | | | | 689 | | | $ | 195,546 | | | $ | 283.8 | | | | 2.20 | | | | (1 | %) | | | 7 | % | | | 8 | % | | | 15 | % |
California | | | 797 | | | | 479,030 | | | | 601.0 | | | | 4.36 | | | | 696 | | | | 402,701 | | | | 578.6 | | | | 3.79 | | | | 15 | % | | | 19 | % | | | 4 | % | | | 15 | % |
Nevada | | | 634 | | | | 224,168 | | | | 353.6 | | | | 3.31 | | | | 487 | | | | 185,313 | | | | 380.5 | | | | 4.19 | | | | 30 | % | | | 21 | % | | | (7 | %) | | | (21 | %) |
Washington | | | 325 | | | | 156,962 | | | | 483.0 | | | | 2.82 | | | | 314 | | | | 133,197 | | | | 424.2 | | | | 2.66 | | | | 4 | % | | | 18 | % | | | 14 | % | | | 6 | % |
West | | | 2,440 | | | | 1,069,173 | | | | 438.2 | | | | 3.20 | | | | 2,186 | | | | 916,757 | | | | 419.4 | | | | 2.99 | | | | 12 | % | | | 17 | % | | | 4 | % | | | 7 | % |
Colorado | | | 1,227 | | | | 585,152 | | | | 476.9 | | | | 4.00 | | | | 1,173 | | | | 557,372 | | | | 475.2 | | | | 3.19 | | | | 5 | % | | | 5 | % | | | 0 | % | | | 25 | % |
Utah | | | 178 | | | | 68,199 | | | | 383.1 | | | | 2.47 | | | | 177 | | | | 64,426 | | | | 364.0 | | | | 2.89 | | | | 1 | % | | | 6 | % | | | 5 | % | | | (15 | %) |
Mountain | | | 1,405 | | | | 653,351 | | | | 465.0 | | | | 3.71 | | | | 1,350 | | | | 621,798 | | | | 460.6 | | | | 3.15 | | | | 4 | % | | | 5 | % | | | 1 | % | | | 18 | % |
Maryland | | | 208 | | | | 98,703 | | | | 474.5 | | | | 1.89 | | | | 181 | | | | 89,213 | | | | 492.9 | | | | 2.14 | | | | 15 | % | | | 11 | % | | | (4 | %) | | | (12 | %) |
Virginia | | | 210 | | | | 110,047 | | | | 524.0 | | | | 2.75 | | | | 163 | | | | 80,588 | | | | 494.4 | | | | 2.11 | | | | 29 | % | | | 37 | % | | | 6 | % | | | 30 | % |
Florida | | | 325 | | | | 136,220 | | | | 419.1 | | | | 2.19 | | | | 303 | | | | 112,895 | | | | 372.6 | | | | 2.34 | | | | 7 | % | | | 21 | % | | | 12 | % | | | (6 | %) |
East | | | 743 | | | | 344,970 | | | | 464.3 | | | | 2.22 | | | | 647 | | | | 282,696 | | | | 436.9 | | | | 2.22 | | | | 15 | % | | | 22 | % | | | 6 | % | | | 0 | % |
Total | | | 4,588 | | | $ | 2,067,494 | | | $ | 450.6 | | | | 3.11 | | | | 4,183 | | | $ | 1,821,251 | | | $ | 435.4 | | | | 2.88 | | | | 10 | % | | | 14 | % | | | 3 | % | | | 8 | % |
* Calculated as total net new orders in period ÷ average active communities during period ÷ number of months in period
M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
Active Subdivisions
| | | | | | | | | | | | | | | Average Active Subdivisions | | | Average Active Subdivisions | |
| | | Active Subdivisions | | | Three Months Ended | | | Nine Months Ended | |
| | | September 30, | | | % | | | September 30, | | | % | | | September 30, | | | % | |
| | | 2016 | | | 2015 | | | Change | | | 2016 | | | 2015 | | | Change | | | 2016 | | | 2015 | | | Change | |
Arizona | | | 30 | | | | 31 | | | | (3 | %) | | | 29 | | | | 33 | | | | (12 | %) | | | 30 | | | | 35 | | | | (14 | %) |
California | | | 21 | | | | 19 | | | | 11 | % | | | 21 | | | | 20 | | | | 5 | % | | | 20 | | | | 20 | | | | 0 | % |
Nevada | | | 20 | | | | 15 | | | | 33 | % | | | 21 | | | | 12 | | | | 75 | % | | | 21 | | | | 13 | | | | 62 | % |
Washington | | | 14 | | | | 14 | | | | 0 | % | | | 12 | | | | 14 | | | | (14 | %) | | | 13 | | | | 13 | | | | 0 | % |
West | | | 85 | | | | 79 | | | | 8 | % | | | 83 | | | | 79 | | | | 5 | % | | | 84 | | | | 81 | | | | 4 | % |
Colorado | | | 28 | | | | 37 | | | | (24 | %) | | | 28 | | | | 38 | | | | (26 | %) | | | 34 | | | | 41 | | | | (17 | %) |
Utah | | | 9 | | | | 8 | | | | 13 | % | | | 8 | | | | 7 | | | | 14 | % | | | 8 | | | | 7 | | | | 14 | % |
Mountain | | | 37 | | | | 45 | | | | (18 | %) | | | 36 | | | | 45 | | | | (20 | %) | | | 42 | | | | 48 | | | | (13 | %) |
Maryland | | | 11 | | | | 10 | | | | 10 | % | | | 12 | | | | 10 | | | | 20 | % | | | 12 | | | | 9 | | | | 33 | % |
Virginia | | | 8 | | | | 8 | | | | 0 | % | | | 9 | | | | 7 | | | | 29 | % | | | 9 | | | | 9 | | | | 0 | % |
Florida | | | 18 | | | | 15 | | | | 20 | % | | | 18 | | | | 15 | | | | 20 | % | | | 17 | | | | 14 | | | | 21 | % |
East | | | 37 | | | | 33 | | | | 12 | % | | | 39 | | | | 32 | | | | 22 | % | | | 38 | | | | 32 | | | | 19 | % |
Total | | | 159 | | | | 157 | | | | 1 | % | | | 158 | | | | 156 | | | | 1 | % | | | 164 | | | | 161 | | | | 2 | % |
Backlog
| | | September 30, | |
| | | 2016 | | | 2015 | | | % Change | |
| | | Homes | | | Dollar
Value | | | Average Price | | | Homes | | | Dollar
Value | | | Average Price | | | Homes | | | Dollar
Value | | | Average Price | |
| | | (Dollars in thousands) | |
Arizona | | | 423 | | | $ | 132,929 | | | $ | 314.3 | | | | 377 | | | $ | 109,735 | | | $ | 291.1 | | | | 12 | % | | | 21 | % | | | 8 | % |
California | | | 627 | | | | 389,622 | | | | 621.4 | | | | 402 | | | | 253,814 | | | | 631.4 | | | | 56 | % | | | 54 | % | | | (2 | %) |
Nevada | | | 397 | | | | 139,731 | | | | 352.0 | | | | 238 | | | | 94,815 | | | | 398.4 | | | | 67 | % | | | 47 | % | | | (12 | %) |
Washington | | | 270 | | | | 133,367 | | | | 494.0 | | | | 179 | | | | 79,175 | | | | 442.3 | | | | 51 | % | | | 68 | % | | | 12 | % |
West | | | 1,717 | | | | 795,649 | | | | 463.4 | | | | 1,196 | | | | 537,539 | | | | 449.4 | | | | 44 | % | | | 48 | % | | | 3 | % |
Colorado | | | 1,104 | | | | 530,662 | | | | 480.7 | | | | 909 | | | | 434,371 | | | | 477.9 | | | | 21 | % | | | 22 | % | | | 1 | % |
Utah | | | 141 | | | | 53,180 | | | | 377.2 | | | | 122 | | | | 43,551 | | | | 357.0 | | | | 16 | % | | | 22 | % | | | 6 | % |
Mountain | | | 1,245 | | | | 583,842 | | | | 468.9 | | | | 1,031 | | | | 477,922 | | | | 463.6 | | | | 21 | % | | | 22 | % | | | 1 | % |
Maryland | | | 120 | | | | 56,837 | | | | 473.6 | | | | 81 | | | | 42,999 | | | | 530.9 | | | | 48 | % | | | 32 | % | | | (11 | %) |
Virginia | | | 118 | | | | 64,228 | | | | 544.3 | | | | 83 | | | | 42,494 | | | | 512.0 | | | | 42 | % | | | 51 | % | | | 6 | % |
Florida | | | 248 | | | | 111,499 | | | | 449.6 | | | | 196 | | | | 78,900 | | | | 402.6 | | | | 27 | % | | | 41 | % | | | 12 | % |
East | | | 486 | | | | 232,564 | | | | 478.5 | | | | 360 | | | | 164,393 | | | | 456.6 | | | | 35 | % | | | 41 | % | | | 5 | % |
Total | | | 3,448 | | | $ | 1,612,055 | | | $ | 467.5 | | | | 2,587 | | | $ | 1,179,854 | | | $ | 456.1 | | | | 33 | % | | | 37 | % | | | 2 | % |
M.D.C. HOLDINGS, INC.
Homebuilding Operational Data
Homes Completed or Under Construction (WIP lots)
| | | September 30, | | | % | |
| | | 2016 | | | 2015 | | | Change | |
Unsold: | | | | | | | | | | | | |
Completed | | | 81 | | | | 221 | | | | (63 | %) |
Under construction | | | 298 | | | | 403 | | | | (26 | %) |
Total unsold started homes | | | 379 | | | | 624 | | | | (39 | %) |
Sold homes under construction or completed | | | 2,626 | | | | 1,947 | | | | 35 | % |
Model homes | | | 293 | | | | 273 | | | | 7 | % |
Total homes completed or under construction | | | 3,298 | | | | 2,844 | | | | 16 | % |
Lots Owned and Optioned (including homes completed or under construction)
| | | September 30, 2016 | | | September 30, 2015 | | | | | |
| | | Lots Owned | | | Lots Optioned | | | Total | | | Lots Owned | | | Lots Optioned | | | Total | | | Total % Change | |
Arizona | | | 1,515 | | | | 269 | | | | 1,784 | | | | 1,778 | | | | 205 | | | | 1,983 | | | | (10 | %) |
California | | | 1,753 | | | | 75 | | | | 1,828 | | | | 1,726 | | | | 222 | | | | 1,948 | | | | (6 | %) |
Nevada | | | 2,051 | | | | 200 | | | | 2,251 | | | | 1,938 | | | | 439 | | | | 2,377 | | | | (5 | %) |
Washington | | | 853 | | | | - | | | | 853 | | | | 842 | | | | 37 | | | | 879 | | | | (3 | %) |
West | | | 6,172 | | | | 544 | | | | 6,716 | | | | 6,284 | | | | 903 | | | | 7,187 | | | | (7 | %) |
Colorado | | | 4,051 | | | | 1,347 | | | | 5,398 | | | | 4,208 | | | | 1,036 | | | | 5,244 | | | | 3 | % |
Utah | | | 380 | | | | - | | | | 380 | | | | 496 | | | | - | | | | 496 | | | | (23 | %) |
Mountain | | | 4,431 | | | | 1,347 | | | | 5,778 | | | | 4,704 | | | | 1,036 | | | | 5,740 | | | | 1 | % |
Maryland | | | 261 | | | | 143 | | | | 404 | | | | 383 | | | | 304 | | | | 687 | | | | (41 | %) |
Virginia | | | 429 | | | | 15 | | | | 444 | | | | 693 | | | | 163 | | | | 856 | | | | (48 | %) |
Florida | | | 962 | | | | 455 | | | | 1,417 | | | | 1,014 | | | | 293 | | | | 1,307 | | | | 8 | % |
East | | | 1,652 | | | | 613 | | | | 2,265 | | | | 2,090 | | | | 760 | | | | 2,850 | | | | (21 | %) |
Total | | | 12,255 | | | | 2,504 | | | | 14,759 | | | | 13,078 | | | | 2,699 | | | | 15,777 | | | | (6 | %) |
M.D.C. HOLDINGS, INC.
Other Financial Data
Selling, General and Administrative Expense
| | | Three Months Ended September 30, | | | Nine Months Ended September 30, | |
| | | 2016 | | | 2015 | | | Change | | | 2016 | | | 2015 | | | Change | |
| | | (Dollars in thousands) | |
General and administrativeexpenses | | $ | 27,758 | | | $ | 29,694 | | | $ | (1,936 | ) | | $ | 90,638 | | | $ | 81,984 | | | $ | 8,654 | |
General and administrative expenses as a percentage of home sale revenues | | | 4.8 | % | | | 6.5 | % | | (170) bps | | | | 5.9 | % | | | 6.3 | % | | (40) bps | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Marketing expenses | | $ | 15,262 | | | $ | 12,548 | | | $ | 2,714 | | | $ | 41,728 | | | $ | 37,866 | | | $ | 3,862 | |
Marketing expenses as a percentage of home sale revenues | | | 2.7 | % | | | 2.8 | % | | (10) bps | | | | 2.7 | % | | | 2.9 | % | | (20) bps | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Commissions expenses | | $ | 18,884 | | | $ | 15,202 | | | $ | 3,682 | | | $ | 50,255 | | | $ | 42,907 | | | $ | 7,348 | |
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 | | $ | 61,904 | | | $ | 57,444 | | | $ | 4,460 | | | $ | 182,621 | | | $ | 162,757 | | | $ | 19,864 | |
Total selling, general and administrative expenses as a percentage of home sale revenues (SG&A Rate) | | | 10.8 | % | | | 12.6 | % | | (180) bps | | | | 11.8 | % | | | 12.6 | % | | (80) bps | |
Capitalized Interest
| | | Three Months Ended | | | Nine Months Ended | |
| | | September 30, | | | September 30, | |
| | | 2016 | | | 2015 | | | 2016 | | | 2015 | |
| | | (Dollars in thousands) | |
Homebuilding interest incurred | | $ | 13,187 | | | $ | 13,265 | | | $ | 39,511 | | | $ | 39,821 | |
Less: Interest capitalized | | | (13,187 | ) | | | (13,265 | ) | | | (39,511 | ) | | | (39,821 | ) |
Homebuilding interest expensed | | $ | - | | | $ | - | | | $ | - | | | $ | - | |
| | | | | | | | | | | | | | | | | |
Interest capitalized, beginning of period | | $ | 77,150 | | | $ | 78,857 | | | $ | 77,541 | | | $ | 79,231 | |
Plus: Interest capitalized during period | | | 13,187 | | | | 13,265 | | | | 39,511 | | | | 39,821 | |
Less: Previously capitalized interest included in home and land cost of sales | | | (15,922 | ) | | | (12,878 | ) | | | (42,637 | ) | | | (39,808 | ) |
Interest capitalized, end of period | | $ | 74,415 | | | $ | 79,244 | | | $ | 74,415 | | | $ | 79,244 | |
12
