MDC - Earnings call transcript Q4 2020

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Operator

Good afternoon and welcome to M.D.C Holdings’ 2020 Fourth Quarter Conference Call. [Operator Instructions] Please note that this event is being recorded. I would like to turn the conference over to Mr. Derek Kimmerle, Director of SEC Reporting.

Derek Kimmerle

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

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

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

measures. to for by turn now, G webcast Any information the expected statements performance call is by Before call, website slides. of noted that over to Litigation business, set which achievements to forth will the those and conference meaning other may be within certain accompany statements statements. or actual that And required his company’s today. is to M.D.C’s turning be or that These, call risks, with related that actual Form use contain cause including Regulation It responses forward-looking different our and the should strategies the uncertainties non-GAAP achievements be the from condition, requires the over SEC XX-K, the remarks. Mizel questions cash company’s the flows certain performance and results, may operation, factors are also materially during forward-looking results made G expressed could prospects of financial financial our Act of David, statements results, the in implied this and and it and Larry filed that SEC be other to company’s impact Private of Securities involve known should or unknown performance factors, opening XXXX Mr. with Regulation Reform the XXXX. the posted noted I to on These information

Larry Mizel

thank Good market the in diluted XX% by of we our a of margin year insight per points quarter you increase as representing and quarter and quarter gross sales today results the basis over new outlook of into year-over-year home and fourth the fourth provide strong sales over XXXX, morning results us the Home fully highlighted expanded $X.XX, the and some company. M.D.C our for fourth the current XXXX. increased XXX XX%. full dynamics XXXX, earnings for joining discuss go delivered XX% home to revenues share for

experience on strategic quarter continue our current financial largest homes the The Adding ever. year our backlog December, community in strength communities’ end and about liquidity potentially our the with robust the $X size achieved We rate is us senior putting Mandarich of our a increased of a of Shortly These Officer, XX-year condition. to a year from I lowest Chief non-investment transactions increased into of to two due additional of our company net successfully as and of to the capital expand for In existing cost will value ever orders activity for strong the our Executive position of XXXX of $XXX focus. billion. The our billion, unsecured notes our resulted presence facility in position increased a position new month. per us homebuilding backlog a to into revolving David million us the gives our allows great in visibility billion order turn of XX% to issuance. backlog value new per sales ones. our dollar operations for pace now and issued across and greatly our demand $X.XX X.X David? we the our position great by X.X%, credit in thereafter, size to strength. over comments improved $X.X and call grade grow President enter of operating coupon new XXXX and results in our we quality markets

David Mandarich

to economy, With for in markets, first we Idaho. strong focus thanks a respect build our strategic more Thanks, respect existing our diverse we recently continue and such Boise the of actively population buyers. presence, the deliver the other a rising a Larry. income of of the to characteristics new many that in a our and local our I’m a on our to Boise and and With to presents on market opportunity end product expect seeking levels signed lot market pleased our in success operations, parts market, are look made company to similar as we country. announce opportunities growing the first XXXX. We of to has in to Boise, by and our deal exhibits expansion establish model. local build-to-order great decision of for the affordable home new M.D.C presence

more places Our margins for position scale allow a California, of focus to strong that goal believe in margin Several Pacific the XXXX, into contributions allow product, those and our presentation. which local established Mountain Northwest We affordability geographic are economics on our our continues places for in for while areas, been build eye has market company. our to and to levels from and our returns great translated better has been our scale, better we operation reached better the strong and to West with Florida on of generate improving affordable positions an towards that tremendous. have has like success like thanks in volume for design personalization response innovative homes the

industry, heightened enter strong while remains demand thanks In and subsides new population demographic positive extremely we Existing new sheer as macroeconomic virus we terms as and now due to continues threat low that do desire which to We mortgage the place also, believe high a a rates our continue and home at at tailwinds of year. see of of live. home pandemic, the that the home levels, to affect broader on landscape factors the an place supply historic around buying remain the ownership, after in occurred shift structural from emphasis greater demand to where a to for result the both pandemic. will a as the run size

back like I’d to turn Larry. Now, it to

Larry Mizel

modified they liquid members I of to for sizable of economy year the industry housing more about In to be but in about brought bright We the for position. I’m annual of the David. you, new XXXX as position and how XXXX net performed. team a responded and a few margin a our operational summary, company, contributed not be profile which to income Thank the our both increase innovative strong to our The challenging in efforts the capped year the the direction optimistic considerable procedures, proud year. all M.D.C experienced protocols, back could in business in changes safety required XXXX. to of coordinated all of rebound provided remarkable heightened These our techniques XX% emerged and thanks to our compared strong and with challenges country practice economy, of of in has our culminating as year. the pandemic strength, quarter a fourth we of by one and and our backlog our the sales spots XXXX enters the our of half in

going I extend be Our have I true conditions, market thank and gratitude model believe more of to Directors detail of support. focus company, XXXX sub-contractors ideally business our in will to making and be sincere for and With product my for an outlook. for this incredibly of build-to-order like I over to affordable turn our the the would I to like their behalf the forward. spite leadership Board and for successful in like our results situated to Bob challenges employees more that, proven we our would the year would current call to On immense faced. and

Bob Martin

another good $XX.X XX% million quarter prior and income operations million. XXXX ended the or everyone. from morning from homebuilding increased to Larry quarter as Thanks, We our pre-tax with $XXX.X strong year

higher from profits our As Larry by driven revenues, increased billion. which gross mentioned, To increase lesser mostly benefited $X.XX sale homebuilding by home extent, margins. to this also improved XX% was a

services or $XX financial million benefit to continues which volume business, the million. mortgage pre-tax our by income generated XX% increased to homebuilding increased $XX.X driven operations. The Our our increase from was by

business has further profit from Our rate mortgage improvements margin capture loans in on and benefited originated. year-over-year

per XX% $XXX.X to result, or quarter $X.XX share fourth overall million income of for a XXXX. the diluted increased net As

due quarter credits from credits estimated an efficient benefit received. rate for decreased to The amount primarily in to from due XX.X% quarter. in be was energy energy Our fourth decrease tax the tax XXXX in increase home XX.X% XXXX of to the a fourth larger rate federal the tax to

excluding of and would For XXXX, policy. roughly XX%, for tax any any rate I effective discrete estimate items, not or an changes rates in potential accounting tax

increased as to homes conversion quarter delivered Backlog of result an Turning fourth significantly XXXX number the considerable for increase to a driven was X,XXX, of were start in selling the homes, we year-over-year XX% in backlog end. of the which the had X% in as increased X% lower of increase homes and X, part by the quarter. Slide a delivered of quarter year-over-year most price backlog to than the net we average of of closed $XXX,XXX XXXX, about the affordable of orders in more back quarter The the year of half collections. units during remained to our during

fourth be for result the XXXX X,XXX experiencing result in XXXX units. We in of are first first XXXX orders are markets a the will increase to reach anticipating quarter delays pandemic. conversion strong a X,XXX certain and than to home the deliveries as the quarter lower degree, of of between and, The we as a backlog corresponding the of construction during year-over-year quarter

XX%, We sales margin a We price by and impacted deliveries, of $XXX,XXX first by price price driven segments deliveries on our in deliveries the months. communities nearly by over our Gross points the latter build-to-order basis gross of to the for quarter in experienced XXXX. quarter gross Home the each increases lumber the be best XXX XXXX our be XX improved to of selling $XXX,XXX. across home from margin margin both XXXX over home home will all and for implemented experienced half which expect negatively of is decade. increases sales in past year-over-year improved average between across first spec

no the first higher quarter As expected adjustments. be the sales margin gross home points be result, XXXX assuming warranty would basis the a than to still approximately prior year. for for XXX no XX.X% impairments and is This

currently will for our estimate XX.X% of Additionally, that remainder QX. expect from the gross the improve year margin we for

the an increase the fourth expense the tax XXXX increased fees and million million SG&A a $XX.X expenses the sale and in by $X.X of performance-based line related selling during in General during expenses million stock-based the $X.X commission recognized quarter, quarter energy to and Board expense and in for during period. administrative approved charitable home quarter. quarter. dollar marketing increase The was XX% total increased our to marketing due consulting Our fourth contribution from in the awards, to compensation due variable increase expenses revenues increased to that with related XXXX credits Directors

in first in of to just estimate as fourth the increase what fourth our the our quarter. a quarter prepare we recognized for slight million, in increased which headcount to due $XX quarter Looking alone, approximately primarily administrative is growth the general to to continue In headcount. currently we increase This expense a saw XXXX. XXXX, and from is be forward increase we X% we

results will call the or orders backlog. amounts I the surrounding for for now may a first such for of our from net various differ home changes new a the estimate and over as actual quarter our accruals. timing reasons, to Woolsey always, Staci of turn in As variety discussion

Staci Woolsey

everyone. and Bob Thanks, good morning

of both as the months. experienced XX well XX% Demand during The our more look pace XX% by quarter. by of price orders perspective a driven our broad-based and in unit rate in increased average of The increased to over billion a each increased in our and product to absorption traditional We price from year-over-year as types. year-over-year by increases Let’s Slide X. by take affordable was increases $X.XX a value our driven selling implemented past X.X. geographical increase XX%, XX% dollar both net on year-over-year, significant orders orders at net product absorption our net and monthly the markets,

and quarter Our the strong month each net were fourth remained new orders the through prior above well of year.

were cancellation strong also In addition, year. significantly our lower the Sales also prior than through and last rates remained year. are above January

quarter. of XXXX in the fourth jump in that expect occurred comparing the first typical XXXX seasonal the fourth However, we to high do of to the not see due sales the to quarter when orders unseasonably quarter

selling Moving a with of The as discussed, we for in year-over-year which the year-end our value up was on Larry average we the dollar mentioned, result estimated of Slide backlog sales homes over highest slightly with to X% months, on to strong price more backlog in on billion, XX, our $X.XX sales price XX% shift a as quarter increased just an backlog ended focus backlog ever. California. of and, value was affordable These offset our by in a decreased to factors incentives implemented communities in plan. to mix due mix homes XX lower-priced strategic past were home the increases shift consistent our our ongoing and

at of backlog of This compared reached the status XXXX. will our December the quarter for had XX, of in wrap construction of Bob the XX% to conversion turn As remarks than prepared in over the Bob first fourth the noted, previously of to result in quarter. will frame XXXX of now I call backlog of homes lower as be up homes back of first to largely our XX, homes for year-end. XXXX stage backlog December is at construction quarter the just XX% XXXX. the Only backlog

Bob Martin

XXXX ended from We end of XXXX. up active Staci. XXX Thanks, the with subdivisions, XXX X% at

the delays an as new community count Naturally, for reasons, of increase during company. of $XXX to growth land active We least the prior communities from target in and continued opening of on and lots confidence increase on $XXX For targeting pandemic. to close-outs variety land quarter, XX% million. X,XXX differ reflecting this XXXX year, due subdivision land XXXX, may are conditions the year-over-year. a subdivision for $XXX total timing million our and spent acquired a during active making We our the focus end XX% impact from acquisition our million such we of the development market on our the currently spend at period, actual our

result approval to at recent continued higher X% believe a XXXX, reaching year total supply the lot the our with of lot mark. was lot As combined that acquisitions, XX,XXX supply, We land lot this our the end end of nearly to to ever. years activity, afforded our challenges, meet acquisition targets presented and us with one provides XXXX resilience housing of XXXX. market platform us growth a the many the our while summary, the solid opportunity deliver In for strongest of than

focus times. and to prove unprecedented model build-to-order these affordability Our successful continue on during

homebuilding current to XXXX, strength the forward has be ongoing we stronger of year value believe for dollar From potential To to strategic and in Looking and even XXXX we gross it our between XXXX. remain on well is of the end, and an XX,XXX our growing expand as operating based focused continuing on margin, XX,XXX current deliveries demand. that a the backlog our target as margin in perspective, units. our operations home to

ongoing end the that XX% year a liquidity our a These XXXX. employees, remain strategic $X.X note targeting continues footprint roughly anticipation are risks pleased and demand our expanding will of with could enhanced liquidity market. the our balance were to and our monitored of our in per support. of This special this of concludes top of increased for $XXX are a to addition That Board dividend $X.XX to we sheet safety impact will of declared demonstrates that the the our we cash mentioned, as to geographic Even to previously initiatives subcontractors issuance announce and shareholders for we prepared senior continued commitment billion in execution environment, our company exist priority. closely that million stock increase we X% their rewarding Boise strong year, we In further work solid week, growth, and remarks. my share the our our a subdivisions Last grow active Directors and dividend. with with a risk customers be As a January. during the the and at

the questions. We open will up line now for

Operator

Michael ahead. [Operator JPMorgan. from of Instructions] question Please go Rehaut is First

Michael Rehaut

Thanks. healthy congrats and and on out everyone results. Hope Good there. safe everyone the morning, is

builders that past, first show of is but back bit wouldn’t year, years down that increase. The see improvement versus or pace sort still has XQ? similar a first just appreciate you XX% as quarter pace there. estimating remain given which sales the strong believe and seasonal of on right we or sales quarter fourth commentary the are little drill minus order around above amount does But you in traffic, the on you and – reasonable remains now would have type pace far well played many XX% ongoing to years of just what gave seen you prior around of question out I on how January plus for directionally, in color is average We sound sequential sales that going so the trends? XX a January mentioned improvement versus obviously and improvement question, wanted quarter. in expect some trends First etcetera, probably based in around some on to XQ see minus you current XX, January plus

Bob Martin

month This Mike. a in modest I a have Bob. there an prices but done months of assumption and we is the quarter, left lot don’t in of Yes, just of and increase to course. is go increases is unreasonable, in we X are one think

don’t prediction don’t a I there. doing think But you So what unreasonable. put is I are out want to

Michael Rehaut

appreciating and market driven the you the still continues affordable. keep guess, costs. sequential wanted lot increase gross secondly, around At you pricing to I more you put allow continue time, same the Great, outlook the to lumber great. products to that as to want for margin in just decline obviously of a your Thank and forward the believe that I by said you for hit that. I

benefit number a get of roughly continue what would quarter one, to fourth estimate extent two, that sense, and that, continues to you in your prices apples-to-apples and, you went up wanted Just the the throughout if see the for year? the gross positive in quarter margin improve further to price, any get as the first the of the potential XX.X% off to of there is we

Bob Martin

Yes.

Looking at This of did end the subdivisions. XX% X% fourth start the were quarter. we increases closings. and over of [Technical of of not houses about those this were our price Difficulty] have first of quarter, increases average, in the increase just the falling, terms to actually the the from in quarter all, is On is the in of prices, the

part second one And the XX.X%, that’s some then increase for the So yes, it. through remainder from of potential of the of for from see the the part year. we question, an do there

Michael Rehaut

Great, thanks so much.

Bob Martin

Sure. Thanks.

Operator

you. Thank

Lovallo, of Next John Please Bank question ahead. go from America. is

John Lovallo

Thank guys. questions. Hey, taking you for my

of first lot all a demand? been at order could being point on clearly some air the driven you commented start The it’s guess there’s negatively in and getting by raise guys homebuilders partly the have markets But $XXX,XXX, highest cover question I’m that the at impacting ASP about for driving some we prices. one where time, just that is, Are at that on been concerned in mix. we’re you a to I to

Bob Martin

I think doing concern what it’s consumer. the increase, always prices a you’re as with

supply case, is the this think so in limited there there. it’s mitigating out factor I that just

moved process the homebuying course being the strong and get homebuilding were of pandemic, the factor I another of that’s was into those for lot those a of been predisposed of groups. I being down of really before pandemic help millennials or to there well. think of even impact buyers But one the all as groups; one those eventually; think consumers things a who us,

pricing. on always keeping So an we’re eye

right see guess, I more well we to make the product, still affordability would product always higher now. moving And, cost so sure cost I good pretty higher areas. of but into markets is parts feel thing innovate do where about the as we from to We’re people with lower areas, add we country, cost trying different is the have completely affordable

I pricing relative to that to basis guess, higher high even a on So not relative that relative to other the appear be, individual though it’s market, markets. might

John Lovallo

it. Got

are of sense. community then is getting in communities your comments. challenges growth know the clearly competitors very have you some delays and mentioned forecasting problems labor that XX% impressive guys Okay, your I a had earlier open. lot that or makes you And count construction plus

we curious, just guess, that the I’m community or as outlook are what So constraints I to move through count year? risks the biggest

Bob Martin

in buying think the lot is subdivisions. Well, market there people I a of who are

been of or opening will stressed, I be subdivisions things year, record them to at get approved. least contract. we we’ve a lot the during under bought the Certainly, think already have have that plots, trying the municipalities

all that the So on certainly on ongoing those It to doing will professionals I be constraint. have and the our the pandemic into impact remains with that then the approving one lot personnel factors we what who situation it. a are demands own seen the and of is think have, sub-contractors that

John Lovallo

thanks Okay, a guys. lot,

Operator

next The of Stephen you. ahead. go question Please Kim is ISI. Thank Evercore from

Stephen Kim

that much, up the got Yes, markets, home on thanks some just data we very good prices XX% results. year-over-year. Yes, guys. suggesting Congratulations think existing the I are from

I I really little So, though. room your growth the really think a strong, there your think certainly sort of, price, relates question your if order guidance, to I go, to and that. impressive, production more side, perhaps anything, My think that suggest is XX% in that while

I once are likely talk sort think I’m color in demand? should flurry is current quarter the forth, the attempt to to and of about your pace Last full-year for in even with of about to is construction right-sized view, try rate. And and – at, gave example, really you’ve I’m adjusted up about and of or there do out to conceptually, year, backlog turnover done of just, range about whether you living that, activity you quickly thinking rate to rates, catch you running getting something were were I’m where return the ‘XX, backlog to of, for would good but kind to you – we that were settle from you’ve can necessarily you And XXXX, or demand ran – in lower your mid-XXs talk kind living that that could of turnover. some is or we I level – just roughly be wanted business year, your and what You the don’t turnover geographic and or we so want say, kind to turnover of stage be turnover that back year. level, a with like about about the I at a for think wondering not something rate mix that you think backlog of XX% in we’d of how that you prevent sort

Bob Martin

Yes, Steve. could It’s mentioned. a variety XXs of that a we good mid-XXs question I and, reasonable have clearly, get factors we’ve that’s again. we’ve into to conversion back had dipped for different to backlog a that quarters That spot now the that on already think, low-XXs,

I of by about think, is with be. back pandemic QX that might brought and think, so builder, that uncertainties timing that It’s of of then, and as now think can’t the convert our profile geographic would in number coming demand that’s really I a the that tell I don’t from right is build-to-order us within we there don’t just, you getting the that. I quarter. is course, prevent something one issue necessarily strongly QX a what there. on when shifted,

Stephen Kim

be obviously. That’s mean, demand-dependent, very Yes, I it’s helpful. absolutely. going to

able capture having so, extra that build-to-order where build-to-order little the I that. And price be a buying really perhaps, more some this fact. question like, and actually had seem done and is of initial options upgrades an maybe second in power we’re your It to your maybe strategy contract. are a model, a would in think, of that that captures, environment, after or tremendous average current The order bit that amount seeing business a to space, because is lot bedroom of of I in relates would interest there in

you what So on design own set upgrade the your correct upgrade you and this positioned your process wrong time. is you manage studio bit and for long design also ask you allows Do talk Do how in-house? has you’re you that. you But design right If that up can to Do and a design focus a about if feel it? I’m an the options studios. I wanted a your of an know me strategy think option, been capture area about a to very for studios better? effectively. I for studio little just outsource to cycle, growth you you

David Mandarich

Steve, David. this Hey, you? is How are

Stephen Kim

thanks. Doing well,

David Mandarich

Steve, Gallery. call you’ve our design which Home studios, been Well, to we

we’ve got our about the we and in is galleries just home choice and market, we really and each personalization And – consumers so markets feel good good we so we up and fantastic. build-to-order feel also some in do of real one today’s margins, extra the pick And the absolutely about it. want

staffed home fully We’re of and we’ve every got our one markets. galleries in

So good real about it. we feel

Bob Martin

a variety helps different drive their Gallery at best really home Yes, Gallery at profitability and of I through here should office, National them have and analytics practices. add, the National least, we do consistency a a Home Home some department that helps create

Stephen Kim

guys. Great, much, thanks very

Operator

Thank you.

Zelman Associates. from & Next Ivy ahead. Please question Zelman go is of

Ivy Zelman

guys show mentioned, X% in backyard. to thinking impressive zoning about but our at get growth in that and the the municipalities happening the forward. just terms to of the think on lot the Bob, love hear what’s as around you you we able you’re face. morning, strong going in John as count housing, would just and saying growth the affordable level pointed your the not Good that really restrictions want a and for just about increase the also and forecast perspective, the community I with results, on respect congrats that earlier to out lots, you local of But municipalities we constraints or quarter

understand kind I improving? And you to or you municipalities? they a they build Thanks. they are still affordability work the are are of like with lots? larger on more Can what the you So require doing willing and and you’re finding follow-up. what with side you negotiations that help changing to Are us have

David Mandarich

we’ve Ivy, got the that that have is to be a and country, we you tell not design cities products. master are lot plan and of builder and plus very any any a our familiar think the around of we high in we product David, our have on plan preferred I found cities or that has this push-backs would communities all had product the in feel and communities the municipalities with master a affordable

really we had So have push-backs. no

Ivy Zelman

benefiting that you David. nearly the are of any way XX,XXX what great, and the strength with apples-to-apples to the you think acquiring, the or for when underwriting the to are and and Are to think the finding market inflation, increase you about with, quantify that. that That’s – the about you’re we XX,XXX you’re current you if underwriting are that level, from the acquiring you’re current that Thank lots currently you lot X% had using pricing? you lots absorptions

David Mandarich

Well, Clearly, our business of transactions we absorptions. sales had over the price, of is backlog will But the model with set robust today’s with today’s last in to pricing land our increased increase prices the meet sellers to market. our we’ve that Ivy, that metrics we’ve have period feel and time. underwrite that

Ivy Zelman

thank that. So lastly, you’ve got – you for just David,

the and that despite currently such at out levels? underwriting you’re comfortable a running at base high So you’re sustainable that is being you’re assuming it absorption pace robust those

David Mandarich

is in Ivy, one don’t We of don’t put inflation we the our do, things actually and model. are we

today’s and pricing today’s at price absorptions. we So

Ivy Zelman

Great, thanks. Good luck, guys.

Operator

you. Thank

Barron, Research Housing from go is Alex Please Center. ahead. question Next

Alex Barron

when would stock is, the Thanks. up to the was closings. Yes. the a thought increasing when only two-part can first dividend guess, second land I you already hoping started and job this question Idaho just on I homes quarter. guys at Thanks, the entry. good could would my point? then expand on grades? Boise, And acquired the elaborate you on it’s doing the first process you’ve guys selling or behind start So, versus question; Have show and dividend your you orders

David Mandarich

Alex, land in David. this the I’ll process in just that And acquiring are tell of we is you Boise.

employees in We have Boise.

a We first think our and good year. have the strong get our very expect model we this land we this some started we’ve model to first complex it’s think up. about We in getting and tied for market. build-to-order deliveries of good quarter had and lot feel it’s successes But very

your where pretty And question, feel good part we’re second Bob let I’ll we in So answer. about Boise. the of going

Bob Martin

a cash lot is last in months. there way. a doing mind positive we think of increases I dividend, stock of done benefits different the of have the from terms in Keep couple already over dividend it XX Yes, that Okay.

liquidity, So investors. for cash overall has of dividend but payments, trading, dividend shareholders. stock benefit and us increased had stock increased taxable just more event up flexibility a bit declared future year-over-year, so I dividend current a which benefits is for we volume little some appeal a gives to think of avoids the the It

different we a little the just a just way approaching our as passed of year. things, of slightly of end it lot So

Alex Barron

ask another could have breakout great. entry if your closings year Bob, do Okay, or versus one, what percentage ago? a were I you this of of orders a And quarter level

Bob Martin

or for I closings orders, think I was rather, I it believe, apologize. XX% QX

we We’re in what affordable the, call more the category.

Alex Barron

it. Got

Okay, thanks, job. great and

Operator

go Raymond Buck & is Next James question Instructions] [Operator Horne, ahead. Associates. from Please

Buck Horne

Hey, thanks. Good delays about afternoon. ask markets. bit in I wanted you’re a to that the little mention construction the seeing of

if delays, deliveries What you’re kind cycle Just it’s and these of, affect you for seeing your labor-related are we how outlook about? extension course kind bit more that over And around how context the of widespread materials-related. the can more year? construction does times if talking of little or a add

David Mandarich

start cities it’s process. think, we’re I started is, their it overall, delays sub-contractors But, on But, we’ve we over I’ll pretty has time certain think market. a about we’re ago permits, seeing Two inspection product to good stretched But even personalization. with to we municipalities our where feel from vendors couple we’re overall, some cycle affordable markets, since in I all I’ll Bob. getting inspections and and Bob. turn our think, affordable lot seeing on of we really that and of But, a better had getting clearly, got of market more have experience Buck, with that good and turn out it’s at. though years of a over a a from lot mixed strategy to it certainly to the a

Bob Martin

everything do try started XX it. we that sell can days get roughly our to start think make of I Yes, so monitor within time, we when we we sure

And build about our process, the for and fourth cycle on then so X and So closing, is entire that overall sale was and on permitting to including keeping beyond first a and times inspection we’re close that, this eye foremost. months. from the closings, that, quarter

it this I number could increase could think increase bit at it’s So I it to bit watch think little there? it. a little point, from don’t but continuing huge Yes, a a there. we’re from

Buck Horne

or it’s second And inventory in of you for I some Appreciate But maybe levels build-to-order delivery spec ramp specs Okay, a your how around least, your timelines? help process to the to current specs, as the helpful. there. company that. lean know that’s construction the there into any to a strategy turning is history. quarter, manage model there amount product level the guys time? you benefit intentional ended then trying of I going lowest might far for out number to of just spring ended as the thought the have smooth out here, a Is run deliberately can you that with quick available up of year and to tell, the a is is specs at

David Mandarich

is by Well, and think house. strategy customers saying personalized not to build-to-order any we Buck, specs start that our a our build I everything’s and want will

build Now, some in to But, no is from were strategy had actually than you’ll cans add to less to time you time, that? we’ve overall, have today have our specs. past. to having cans, Bob, something the certainly

Bob Martin

I do No, I backlog think backlog. out just building think we’ve just to is, right. given where And our got plenty that’s the

this more we’re think I comfortable at specs point. not doing So

Buck Horne

Thanks, Congrats. great. Alright, it. Got guys.

Bob Martin

Thank you.

Operator

question-and-answer concludes session. This our

go Mr. Now, Please Bob to to ahead. back conference I’d turn for Martin closing the like remarks. over

Bob Martin

to results. to the again first speaking quarter I’d following everyone look and thank we joining of like release you Alright. with us our forward call for the on today

Operator

The attending presentation. now conference Thank has for concluded. today’s you

You may disconnect. now

M.D.C. (MDC) 2 Feb 212020 Q4 Earnings call transcript