MDC - Earnings call transcript Q2 2019

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Operator

Good afternoon, and welcome to M.D.C. Holdings 2019 Second Quarter Conference Call. All participants will be in a listen-only mode. [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions. Instructions]. [Operator this recorded. note is event also being Please

At the Derek conference I would Kimmerle, to turn now like ahead. call go of Reporting. this SEC time, Director Please over to Mr.

Derek Kimmerle

quarter gentlemen, Good you. to XXXX morning, and earnings Thank and call. conference ladies M.D.C. welcome Holdings second

Chief at session Officer. a call limit today available question-and-answer remarks, At our being time all are we in and this mode. the and After question a Bob one prepared participants conduct will will Please for is which Larry Mizel, request that this I themselves time, and be we recorded On Officer; and conference have Martin, listen-only one finishing to with Chairman me replay. note Executive Chief Financial participants follow-up question. that

the visit to website For our mdcholdings.com. how information on replay, please access at

the that noted may and including financial statements Before Securities the flows, operation, should to conference certain within contain related cash statements over Litigation condition, to Private turning of it call, to during meaning of questions MDC's and business, XXXX. responses Act this of those Larry, be Reform the forward-looking call results prospects, made strategies

actual to factors results, involve risks, performance statements unknown the achievements expressed uncertainties results, or be the performance achievements company's statements. and may by These or materially forward-looking and different cause the other known that from implied or

on the measures. actual later XXXX Regulation information non-GAAP are that our performance requires certain the accompany SEC use G company's impact should set our Any Regulation webcast with the required could with that financial G slides. information noted which XX-Q, Form be quarter website factors by will company's SEC is posted also of It that in other second and be These today. the forth filed

opening And now, call for I turn to his over the Mizel remarks. Mr. will

Larry Mizel

insight provide over current and results of trends we and to you for and strategy the discuss XXXX call our us market for company’s second into for today outlook. joining Good some go this our morning, thank quarter as

income in several million selected strong $X.XX second diluted the net repeated. per of of $XX performance month, XXXX, generating earlier released were which turned MDC or this We another in financial results quarter of share.

to Net were by homes new month. pace driven as absorption an per compared orders the X.X year, of community up last XX% quarter per for

result, a to As the level increased unit XX highest backlog years. X% in

our Additionally projects. count community to active quarter XX% XXX end grew

higher exceeded XX% have positioned our margins gross further highlights pre-announcement which we to XX.X% service These results over the year. the investments homebuilding product in several made that our at evidence producing Our years points in affordable strategic coming today we've anticipated future. than as is for last XX great shift and in last basis the are us more

segment. in quarter continues point of in to construction The activity why in a outpace on This was land this segment home focus we demand and order is move the level home strength is seen our supply. the we where acquisition large the due market lower new have our to more we're This market for price down prices to we traditional products. committed in trend expect efforts part this experienced increase given in to continue

other In quarter become or second price the to we future fact the more slated of Seasons acquired of XX% are one lots communities collections. our in affordable

margins. yield buyer have design, is improvement margin to number has market affordable and This a also evidenced segments dynamics the by years. thoughtful a few reasonably priced we’ve and given last segment housing attractive planning to environment gross the we attractive incentives. manage pricing communities Through more careful over the achieved and that created favorable The us and in of appeal solid

select from the at by us our margins higher our Our buyers to capture additional business margin and further enhanced build which model galleries. allows our home have revenues been upgrades order to options

has has positioning the shift decreased mortgage value quarter, product we lift the to metrics. and providing times pricing our our our been slightly in While cycle a in the for results. second benefit This positive proposition market demand more as served favorable affordable more impact construction we our a driving in our third important both believe the us on to improvement in second return decline our the turn recent to quarter. projects homebuyers also it to important year-over-year X% allows A quickly, and were cycle factors which in rates tailwind offer, time

elevated with sold very To nicely profits, and finish our backlog I’m up, a quarter at for ended sets We an pace the year. strong up strong that generated to homes a sum pleased with quarter. the performance this us

by versus addition, additional double-digits platform count year grew for we our a us future. giving growth last in community the In

We while have able in achieve been these one balance maintaining the strongest to successes industry. the of sheets

out healthy dividend consistently shareholders. also a paid have We to our

very excited about In hitting future MDC the at short, we cylinders I believe what I'm on are and holds. all

like to it to for results more at depth mind, quarter. I’d in turn that With over this in our look Bob for

Robert Martin

and you, morning, Thank good Larry, everyone.

were our in year-over-year the in from an administrative increase even Homebuilding down of tell $XX.X for expectations income. our to homebuilding only $XX.X pre-tax pre-tax as the and consolidated in offset XXXX second though Larry's forth quarter an at exceeded to decrease quarter, million can general was comments, gross interest selling, QX income the second for costs income decreased you year-over-year million. increase mostly profit results X% other start and set by by As quarter and the the the slightly

XXXX. by of on quarter decreases in $X.X quarter the the to on related to servicing rights year-over-year million decrease same of the decrease in was servicing income of securities pre-tax services Financial mostly the in period the in of loans. prior XX% mortgage conventional net income second year-over-year the of services gains XXXX, These for by well as income pre-tax $X.X those the million. to offset year in equity sale decreased million were partially million as compared gains recognized $XX.X second to $X.X financial The due

for decreased quarter the XX% income share. or million by $X.XX XXXX diluted $XX.X per to second Net

the Our to The provided tax year, XXXX XX% we this last increase us benefit rate second above XX.X% not XX.X% to energy quarter. XX.X% The primarily had during a rate to additional to year. range on last which attributable XXXX for options that quarter. for quarter credits, year-over-year provided exercised call, our tax but mostly the XX% increased during from stock expense the was second estimated was the to tax due were

second revenues X% to home for sale of price the to the selling million, Our delivered. average due were year-over-year quarter in $XXX.X X% homes decrease down XXXX

top rate range discussed ago. expected than XX%, our conversion backlog achieved end at for year a that previous we the QX was Our which of and on higher call the XX% was the

in were which of The improvement was in aided higher by mix part better cycle a affordable to due backlog conversion product. more times, achieved

offerings, lines For from our product the second quarter characterize more closings our XXXX, affordable product we compared XX% of as ago. a came XX% year to as of

for closings. that it sold region a the conversion closed issue Backlog in by last the year-over-year been year has quarter. and during quarter were ISOs in of was product issue in Furthermore, homes by helped we increase negatively year, impact but the resolved, number spec current North the Colorado involving did not impacted defect since times also cycle

pushed the in hand, delays of a due market, XXXX. backlog West to the number Nevada that of negatively conversion was On our the of in utility impacted closings second segment current company by out our other quarter year

unlikely continued in XX% to third we in in This The anticipate due for strong Looking coming the quarter, a of in potential experienced rate targeting we Also between in the a quarter the from third achieved forward X% XXXX. conversion from XXXX XX% of quarter. XXXX. the rate range our average backlog to we to backlog, XX% the decrease most affordable is second sales to primarily end but our more as are throughout product a the largely and are price to mix quarter the third percentage increase quarter, these XXXX homes selling in closings including result lines. backlog conversion QX compared we XX% the QX conversion close is lower rate a are

the closing spike in for number Nevada. QX. is earlier to of closings temporary from mentioned Nevada units expect coming affordable more of we result the percentage delays date Geographically I QX which a in expected the of the This from shifted

our an expect of subdivisions low also unusually QX. number from expensive in more Southern closings We California during

as However, price somewhat should Southern our closings Nevada shifts the rebound of typical mix and QX a to level. more average California in selling back

points a $X.X Our gross of interest sales to as of amount warranty in margin This revenues. adjustment decrease was in million from up sales by the XX.X%. driven homes positive percent a and XX was increase a capitalized sales home basis cost year-over-year

XX.X%. of added at although end mentioned below margin Our gross quarter slightly closings, helps points warranty XX gross margin quarter the quarter gross gross than which million healthy, I that backlog the margin adjustment backlog of positive XXXX is lower and basis at second level the closings. why margin $X.X second explain the slightly remained Note for the just

remember impacted impairments, factors. increases, changes, always, other be or reserve by period cost price gross we actually and that the As future could margin realize in the incentive level cancellations, adjustments

increase the Our $X.X significant increase second The additional second marketing and active count. million year-over-year caused increase million open was quarter. advertise XXXX mostly subdivision by to total staff costs dollar up from to due in incurred SG&A expense $X.X XXXX expenses a quarter the was for our in

year-over-year from compensation decreased we in expense administrative Relative I by These general and QX. were amount and likely XXXX decreases decrease headcount. stock-based general our million offset to higher QX and I slightly partially recognized experienced of the $X.X by exceeded increase expense resulting decreases temporary the million believe average XXXX, million. the our due in expense this salaries expense and and benefits decreased contrast, in general In to during bonus $XX.X expect $X.X second quarter. administrative QX administrative by that as is an

in general for we expense timing administrative recognize factors. other will various and and However, of accruals the the and amount on ultimately magnitude depend QX

quarter increased by affordable demand XX% our that price. in net orders lines net remained which of attributable the compared The a XX% X% a dollar was more our year-over-year XX% net driven new -- Seasons success second was orders selling for the to to offset continued decrease collection our XXXX net slightly orders during a The unit quarter. accounting value by second increase in product strong new for in $XXX.X to the XX% largely increase accounted XX% orders of of our of million XXXX alone The XX% year for ago. or average

lines prominence increased product affordable orders. most year-over-year price net decrease our in average our of of contributed of The our markets more across the the to

average we Additionally, mix Florida, our net shift our lowest to selling has price. of which saw the orders a in

Mountain our Our monthly since our by second XXXX. absorption quarter which and XX% increase increase segments. XXXX absorption rate the East pace from a quarter of X.X was This was was second driven

segment West experienced in highest year-over-year our While it rate absorption decrease continues have the rate, absolute its a small overall.

estimated year-over-year. second We by XXXX that average benefited down net highest in a subdivisions. in its level $X.XX year-over-year of homes in quarter decrease further since an for X% driven backlog value of an number was in offset of a price mostly unit by ended our the the in to orders lower increase This from homes selling average backlog which billion, with Our was sales backlog quarter homes XX% increase active was XXXX.

subdivision East XX% an with Oregon, end year quarter and none the both West a in number to West in increased second the segments year year-over-year. newest the saw experiencing We subdivisions ago. flat Active was active finished largest Mountain XXX XXX were quarter, communities three increase. active segment with a the compared segment subdivisions our from with at count the market of the XXXX ago. up Active

on only at at communities This soon the a XXXX number any strong quarters QX has the graph first to Looking greater Nonetheless, to we have with possibility that track to the end where of two already be inactive on progress QX to June quarters larger of active we XXth, growth the in count of of of of number be year. prior difference. or smaller on of exceeded subdivision by a the two increase be the in whereas year. soon the XX% will are increases the end we from saw the made, end communities started based right, count the from than three the indicates community we the

the X,XXX that’s roughly lots development quarter, second million $XX For of the $XXX in with lots homes. XX% lots lots more second acquired about an costs. million were for XX% were finished additional spent and Approximately the on we intended our for quarter acquired affordable XXXX

acquisition as spring than in XXXX land following selling first activities to re-accelerate second of was we began first spend our XXXX, quarter notably to land the quarter our quarter. acquisition the season higher start the positive

the we third continue this have strength demand the level of to expect seen. quarter, given We into

to pleased end the the control a is from homebuilding end than debt-to-capital second total of commitment only the down demonstrating are of and second year we started with balance maintaining to we higher our lots strong at the our a quarter. modestly balance Net now, again For number ago that see of XXXX points where at the quarter, we rising, quarter the XXX firm was basis sheet. clearly XX.X% of

significant Furthermore, to second continued year-over-year to billion, $X.XX fund our end us XX% the the XXXX resources growth. liquidity was with up quarter to providing

positive revised Our principles. company to a made outlook is progress we we us way To the improving that our in debt with that recognizing our & significant MDC's end, our pleased Poor's to on company ratings and that we're during rating and important the are run grade investment growing metrics. have quarter, in we credit our believe consistent Standard

call a operator will I to now that, With session. turn question-and-answer back the the for

Operator

[Operator instructions].

today Our question. of question from with John first ahead Lovallo Please comes your go from America. Bank

Unidentified Analyst

is And to XX.X% that start saying just I as of guys about for of the it wanted increase this that XQ kind with the margin the margin. actually you my looking And historically be have for question. warranty XX.X% Cochran] I at slightly roughly seen sequentially. John. excluding are [Spencer XQ. would on that would Thanks I lower I well. Hi, understanding gross guess guess we’ve for understand gross

call to So gap I bridge else kind Thanks. the anything anything there, to else there help out of is guess there?

Robert Martin

think out. really to is Hey, there Spencer. anything don’t I else call

demand given overall has where environment helpful think a incentives pricing to margin picture. I been great it’s and it’s which for the is

So characterization is your I one. good think a

Unidentified Analyst

revenue. as And to -- excuse on was relatively basis then with why there on to basis a it call another so was a like maybe regards in anything dollar XX despite to there else Is quarter-over-quarter SG&A, flat me, good? it million out

Robert Martin

comp, there is it for into think reasons come different various be comp. play, bonus could accruals stock lot be that I of a could

then So piece, think is maybe in the G&A to experienced XX.X, what I’m which I probably as we our run that point rate be communities. look the more year-over-year year-over-year, part, because continue varies marketing we're QX, obviously looking closer think commissions forward little probably biggest even to into directly pretty and piece probably I revenue if will up is have whereas that we communities with at the new up the and QX, be opening above we was

Operator

with from comes ahead from Please question. Kim question next Stephen Our Evercore ISI. go your

Stephen Kim

or understand by I some wanted turnover expect made imply about certainly you deliveries nice pick to the I in rate was or to in would actually My turnover wondering could XQ significant the XQ, and into a you guidance seem we in potentially I that a up you specifically the XQ the in pretty on XQ. start XQ lower your little rate comments give see talked initiatives lots is bit rate but about margin from off in a on didn’t that. question line XQ for then talked moving asking then cadence way are cylinders. and that the with then SG&A? if you lot what if since effect of and the certainly that of strategic the At SG&A of consistent all all had your things on about your changed year, firing gross with knock other you about come could is secondly have XX% Day Investor on you first

a you XQ how may role And hit characterize to in XX% and not whether SG&A wondering would that or allowing so you play it?

Robert Martin

thought strength very valid. We another happen. towards Set heavily weighting was your for what right. so QX there to QX say in way think But potential that's to going closings the is have QX, that are course risk be think and we weighted the in we've recently towards sales you’re of a QX. specifically points seen much you when given I and I Yes, didn’t on

close have know significantly keeping down does that that, the We there. that rate So, QX some But much QX. I drive on a volume would certainly with caution very again, there risk in is eye in it. potential up SG&A that we're a to

guess other is get the sometimes XX% front, own your speaking, thing think as by the us, you note we I a generally to about that SG&A good target So, as success. punished for much

from revenue the G&A. example, a better amounts stock-based more standpoint, we levels do of elevated For reach and that have we contribute to certain comp heavily

simply So, bit rate little therefore successful G&A along higher we're have is and with because some reason why the others that of compensation a seen in it. the accruals we come be

Stephen Kim

long-term I you you said, of for that being those I assumptions gave about XX% planning just share-based That it. sort you right? right, making you’re imagine within on when contemplate it, talk things, SG&A, comp mean Got when

Robert Martin

some not To level but maximum example, the level. for necessarily,

Stephen Kim

Sure.

land shift should spend from forward been we time as could getting give point had expecting you your us see in to new land But could to a handle give spend the wanted to in numbers Okay, then some relates the question context the you actual land to buy it great. acquisition spend. like then have us strategic be starting development it generally you've into a initiative, and been be spend Could next move this fruit generally some decline a be And lot as you land obviously if for little appropriate just percentage land of what of products? your in that to lot you the for been might revenues. a undergoing go yielded of sort less the strategy seems as on where down put has quarter? And whether for we of and make us,

Robert Martin

Yes.

all, the spend give So, land number quarter. this I for guess did first a we of

million numbers same had those costs. million, too A a $XX and of to bit. $XXX acquisition in so of I of year far ago of up In QX and was this expect what top total. So, continue from were that off little year. $XXX development on year million do $XXX about $XX last million about it to we QX we million had pick it was

unreasonable don't QX. to ago land it's year be think our think a So, I could we that in spend was actually above what

on one. So, stay tuned I think that

about much all occur in are as we already to market. considering the looking And long as in buying to still be we going continue we've very what demand, think seen strong thinking we're subdivisions see I grow our markets. to

Operator

Our with go from Wells Truman next ahead your Patterson from Fargo. question. question Please comes

Truman Patterson

see guys entry Previously, I you your quarter, the guys to out a Cityscapes you think second have Seasons your bought XX% wanted kind if more product. you target affordable to updated target. have Just guys product. of the lots for the before and your of In XX% level XX% broken

guys have at all? you if seeing Just updated that

Robert Martin

Urban I think Collection. affordable XX% for Seasons, XX% think include is to overall would offerings clarify our Cityscapes, just so more our range, Landmarks, I that to the

the range that’s were So targeting.

been land recent Our acquisition at has XX%.

if little for as most So could than recent quarter. a in been bit that. being anything orders the see I higher recently it’s Most XX%

that would would think I above slightly So anything be that.

Truman Patterson

just then that. following on And Okay. up

the growth I forward? has rollout the which leverage outsized to product region, affordable going by and and in we most about affordable to guess product? moving see think Any Your Cityscapes regions region the the should how Seasons penetration

Robert Martin

would almost percentage we penetration overall. region highlight again, and market a lesser our markets a if other. other one once I where example, like and have in we're the that’s Colorado because over mean example don’t I XXX% is I know deeper for Seasons for Orlando in

think our continues I company. be a focus overall to for

we that our is finally going doing reduce the number we rate then continue company that up a that’s in not land greater be more from it’s of units affordable would on of affordable that past, standpoint a some lower been majority it’s And segments. the of it’s that do more product looking a what necessarily note acquisition very I that that should to and for rate the we’re us for growth of to growth we're successful for you for move just the expect think expect overall the I of to product. product

of share traditional products So been looking to lose we're more us. that’s other not for

Truman Patterson

could one embedded I your et that to newer sneak communities Could you past once you discuss are product the profile affordable competition land? a recently margin some land opened attractive that year in. Okay, of quarter in cetera ago, where entry-level more relative and heating can't that if the or on in up is find or opened an

Robert Martin

know that say that. I would don’t I

to still one can we're have will losing a I of it. because market been another margin look at profile say market-by-market much different You margin be it's than good because overall. think margin profile for would it us a I don’t market.

point good one. I is think your

have appropriate. therefore making I eye think of have space the more land we there all costs, we are on an to eye price we in be like very and on an that’s that our taking of focused is to increases competition costs. keep something on sure just keep have advantage when we And to

Operator

Our Michael from with ahead question Rehaut Please comes question. go next your from JP Morgan.

Michael Rehaut

question make some I sure the First of want here. details have to just right

that So for XX% roughly SG&A year for is of you're the looking an Bob? right full

Robert Martin

Well, reiterate get guidance, was that’s about take question was we during and just there. target we would I what it when that more about Day, if to talked the Investor the think didn’t

So and Obviously, on conversion happen rate this or significant we I guidance in of XXXX to backlog provided our that. that have official is QX to not. there what not take increase just point in would not get or determined whether a think it seeing will be

Michael Rehaut

Okay.

should quarters words, the to bit expecting in quarter, seen in to percent SG&A conversion first we year-over-year, So, backlog as a continue have the be your little two all be of year? other in higher else as third equal we this given the expected revenue a

Robert Martin

in will QX number to of G&A should guidance that had closer Yes, we number. course, what are, coming million ASP the about $XX.X down. backlog XX% it’s rate I be that XX% G&A our with The of conversion think revenue of depending to assumptions upon just put that in our QX, -- for

QX. where we a in pop relative to it in to QX up going were that's bit So little

Michael Rehaut

X% XQ you you down expect in that to XX% then a And from degree XQ? said is to right? ASP ‘XX Okay. be rebound to the And

Robert Martin

Correct. That's right.

Michael Rehaut

And in back XQ would of, it saw about it all not you Okay. XXX-ish the range give can the type half of that should any fully the of us rebound first to back terms on in that or sense way? year average get in we get

Robert Martin

to of think I is getting because I the affordable more Arizona mixed some remember back Florida being don't those a bit think are decreases mix permanent you in markets and we I it, of would seeing to more a fully of are lot because little And increasingly toward products. orders we like and get more think markets. we'll see shift

going in. don't XXX is tell the because So back all I different to hard of what way coming somewhere to the I those think expect, It's would middle. things in

Michael Rehaut

Right. Right.

more about or Just then for that? XQ should the question. lastly The big rate of picture how full a one question kind and tax think we year, detail

Robert Martin

That that talked that and about XX% to XX% we've excludes discrete items.

by tricky it's the exactly or or think quarters. on always because goes items to discrete of the options the what tell rates definition case that. side I higher not the little timing will something in It's the still can which was where bit the of come a of quarter predict of the So, exercise stock prior good maybe certain overall, through you

So, is XX% using end XX%, the higher the to appropriate. at of most I kind that of think

Michael Rehaut

quarters? For this two last

Robert Martin

of you terms of half it those first and then of quarters, into layer the just in in the year. individual think I

Michael Rehaut

Larry, a of materially weren't just out shown I or the that the market achieving your of take back this three be you breakeven. a have be that the of different to couple why just give more reported smaller level, kind picture, continue Okay. as bigger lagging and a terms -- What or a operating us could feeling strategic scale next of from term and Larry. to seems you two years, just reasons, on just to One profitability. pre-tax over area if East as willingness last or and need need last to over touch a in region When a benefit might for a region? Can I to you that just near in there? if hitting evaluate you not as the in get you that’s looking could, maybe the to question are be perspective you step to segment an to income be in one at medium whether to

Larry Mizel

product for larger the providing the much home there where competitors cases the personalization in stress in cost pretty a doing competitor the deals compete same you I we quickly great that personalization. with growth, builders the our and and has meeting we're fits and personalization doing committing niche at it’s model you and and are incremental because are other opportunity some us the and look industry standard of the kind down we think if that the specifically, affordable growing to we subdivisions and can at same -- look paying large Florida consumers can very nominal with and capital very it are interesting

community a the demand much pleased the But slower underwriting that So very The bit very are sense robust. focused a I with we our very, is on our tight. it. Maryland It’s Virginia, and little robust would in area there. counts very Florida very, very market is say is we’re increasing

most clear As should pretty competitors sometimes the we’ve think you I know the for conservative all shouldn’t now it's buy to inventory built. they for of advocated, sometimes land But be people our many builders decades, over and they land be advocated strategy since and don't. appreciate speculating and country it major

growth The it's product markets and product we in very, in expect we comment, that Bob is and all for know the and affordable. and fine intent growth see exciting as do also. growth I because an markets in very product you growing a desire well is more we serve. received But segments it’s important build growth to made biggest would so we're our and traditional in our all that that say virtually our execution And our that of the

us So, achieving XX, be aspirations think at is get balance the to spectacular, and time, at took opportunity the that that right XX place, to. sheet pretty the with the right with only product the I a we're to years right

Operator

Alan go question. Our ahead next Zelman your with Ratner comes with question Please Associates. & from

Alan Ratner

of double-digits focusing guys lower up What obviously I a drivers is points. because a the little towards on you just we of your of geared to did the was count and to writing and year-over-year on wanted saw trajectory great years lot lot and the there some when ago kind bit back the of growth couple a a And getting tying through on wall now the that's volume accelerating the seeing job price over land of I the your kind the count, there not we're I like year-over-year. the long-term growth now rate your count mean community is that you orders indicators is, we're up slow looks filter might course growth year, that to count, but that a community start XX% lot it if roughly look with slide showed, what flat this sustainable And at seeing the side. forward-looking

quarter drive see or positioning continued is type community my is could do guess your two in is that I is the right price type positioned continued you next beyond of volume re-accelerate necessarily lot or you question portfolio is, like the you of supportive even to same that that look to which strong double-digit the count where now on feel without of when you next growth So count, the need growth years, product, order out point growth you’ve enjoyed the drive do the growth growth? is several that

Robert Martin

do helpful. on quarters, that segment. I thing time year-over-year first of that's under couple But double-digit rate so it's is lot think QX QX, I be year-over-year the that's to growth that think hitting I that driving QX helpful is or done think, up about of getting there the saw is mean the in sheet. and year. affordable the acquiring of we actually the them next and in think also whether indicative a I for a And them came real ultimately absorption good balance for on in I terms that certainly contract deals putting

we both, done, mix think mix of So it’s in be will on our QX. I already what of also part it do adjusting a dependent but do QX and we've what

Alan Ratner

can growth vein, a it on builder was similar there? Are are interplay that it’s the then under year-over-year, side, pressure see backlog and absorptions there’s how meaningfully? puts that higher results any you year. comps XX% I And you've points. such how running to the continue now or that that's extrapolated. to just whether are a it's think thinking the pretty like there in volume focus growth would you lots over Got of price lower half back communities, a always whether about hope And I anything the guess price strong constraints is open there it. are that question that lower order still little helpful. volume a the cause dangerous on back my move But The bit That's that it labor, on when rebuilt up it’s sounds the given expectation on the positive versus easing you you throttle in is,

just margin maybe to price prioritizing given So, about poised on continued seem some for would has the the differently, like that strong rebuilt? backlog But you’re that fact and it surface growth. maybe thinking the your

Robert Martin

have be we are plan, as growing are due always our or not that rate focused we have hitting a take that to sense makes want to growth whether we degree. on think discussion advantage or if year-over-year price to increased already We price to a from reduced if to I incentives. to standpoint

Vegas of bit we of couple there that outside a how the talked be company, that but out. subdivisions there shouldn’t issues little we that quarter not power And we I of with the would active the out have cite. that’s a up there that nothing there constraints is labor out during and about stands don’t hoping know some if really terms is telling mentioned, there or anything favoring you us In that anything whether I that, is

That close the obviously competition continue orders going reported to we're and very keep on we as other that for the pretty know go and have strong we there to potential a to QX watch the said, that well builders increase. as because for resources labor another is through

Alan Ratner

could so Bob. at, And sneak on final shaped that us, getting That’s in. Any that’s where then how up? that July was one share could I one helpful, I you with if thoughts

Robert Martin

July continued think us, over but very seeing it’s not I been strength. that we're has for strong yet

Operator

[Operator instructions].

comes question. Our go James. ahead Horne your with from Buck Please Raymond from next question

Buck Horne

M&A are the you activity consider land would asking maybe more how Arizona this or opportunities of have guys more you do of rapidly? quickly asked add way scale strength you stage operating that -- at the cycle? evaluating been But or different Florida, to how something given slightly you're that have there out build demand some potential of Is you that a just little that think A here bit. about places for questions and in like the that seen

Robert Martin

at Yes, subdivision time. prefer buy to a we one

XXXX. has was what that’s shown. acquisition in The think we I last history our did

look So lasted it’s years anymore we today don’t since out and is opportunities there. if always there I think been past over one. it’s well eight the we see likely than

Buck Horne

the down for the affordable And seems respect, or considered more heavy of inventory But be a maybe is -- operating much things. and entry level to even demand product concept the lot you so on the spec continues same the and Seasons even further the a out points exceed price constrained taking there have to supply construction just that’s maybe your going everyone to lower of saying model? has more in and

Robert Martin

necessarily spec different series. a doing we heavy Not have considered but construction

what even that And successful building, type That’s with than the does have all our in markets affordability X,XXX the Urban already two achieve more several we to say square achieved that fact units production very part of it as it’s Seasons. called response In better been range. has it’s feet now in X,XXX in in agreement. of Collection. initial because been There’s we’ve one

Operator

with Our next question your Please question. McCanless Wedbush. comes go Jay from ahead from

Jay McCanless

items. so already if apologies on late have touched these you jumped I on

and one did improving of first know quarter? The both competitors bit overweight towards couple that buy move you says in find or up of second to over you seeing more But quarters? of that a affordable see move-up. second morning next for first talked more the your move-up are all discussed about And first you demand guys during maybe this little you one, an need What land. I the housing, having anything

Robert Martin

all, Yes. growth rate our part statements see made a move-up decrease our before one Well, tell we see I we just We got maybe you, you we relative of of units. will don't the of slower to to business. want have that as first the on call, of affordable kind it earlier

we're sure So we maintaining want make strong presence a to there.

lower I improvement our the rates certainly in benefits activity, think consumer interest from for as As group well.

the demand So, of increasing is what I we think that segment. could why as making on be improved a well reason part we're that there. we're doing segment the focused maintaining are as share But share in sure affordable in there of

Jay McCanless

Got do be any you pricing it. may terms the then power, inch are up bit? in mean raise may And quarter rates prices percentage a of or/and move to I see you of especially now do during have a considering to where you able communities be opportunities price little

Robert Martin

the I part don't year. is how this come specific have QX yes, to down, see Spring know were percentage the they increased. that first in in half if of and selling Yes. season, back but the communities of did in typically where the I versus do a better We of then many certainly we year. incentives opportunity

better a was positive that think of environment. I So, pricing reflective the is and

Operator

call I'm And showing conference like closing management I'd ladies to back remarks. no to any at the turn over additional questions. point, for gentleman and this

Robert Martin

with look XXXX the everyone again earnings. call you We today speaking we to and of QX joining following the appreciate on our forward report

Operator

that you conclude today's call. gentleman joining for conference presentation. and does Ladies Thank today's

You now may disconnect your lines.

M.D.C. (MDC) 31 Jul 192019 Q2 Earnings call transcript