M.D.C. Holdings Announces 2015 Second Quarter Results

Aug 04, 2015, 06:00 ET from M.D.C. Holdings, Inc.

DENVER, Aug. 4, 2015 /PRNewswire/ -- M.D.C. Holdings, Inc. (NYSE: MDC) announced results for the quarter ended June 30, 2015.

2015 Second Quarter Highlights and Comparisons to 2014 Second Quarter

  • Ending backlog dollar value of $1.13 billion, up 48%
    • Ending backlog units of 2,558, up 36%
  • Dollar value of net new orders of $629.7 million, up 16%
    • Net new orders of 1,481, up 4%
  • Home sale revenues of $461.7 million, up 7% from $430.7 million
    • Average sales price up $38,000 per home, or 10%, to $410,000
    • Homes delivered down 3% from 1,158 to 1,126 
  • Gross margin from home sales of 16.6% vs. 17.1%
    • Up 120 basis points from the 2015 first quarter
  • Interest and other income of $2.7 million, down $1.9 million from $4.6 million
  • Net income of $20.0 million, or $0.41 per share, vs. $21.5 million, or $0.44 per share
    • Pretax income of $31.9 million vs. $34.0 million

Larry A. Mizel, MDC's Chairman and Chief Executive Officer, stated, "During the 2015 second quarter, we began to realize the benefit of our effort to reduce speculative inventory levels as our gross margin percentage was up 120 basis points sequentially, resulting primarily from the improved mix and margins on the speculative homes we closed. Additionally, at the end of the quarter, our speculative inventory levels remained relatively low, down per active community by 39% year-over-year."

Mr. Mizel continued, "Major macroeconomic factors such as employment levels, consumer confidence and interest rates provided a more positive environment for the homebuilding industry in the 2015 second quarter. Against that backdrop, we successfully maintained a 2015 second quarter sales pace that was consistent with the same quarter from a year ago, even after implementing price increases in a majority of our subdivisions since the beginning of the year."

Mr. Mizel concluded, "We experienced a decline in our active subdivision count during the 2015 second quarter, driven mostly by higher than expected demand resulting in the close out of communities earlier than expected and delays in opening new communities in certain markets. However, we expect our active subdivision count to rebound as new subdivisions come online during the back half of the year.  With our backlog dollar value over $1.1 billion and overall liquidity of $840 million, we believe we are well prepared for to close out 2015 strongly and position the Company for continued growth in 2016."

Homebuilding

Home sale revenues for the 2015 second quarter increased 7% to $461.7 million, compared to $430.7 million for the prior year period. The increase in revenue was driven by a 10% increase in average selling price, mostly due to a mix shift to higher-priced submarkets, but was partially offset by a 3% decrease in the number of homes closed.

Gross margin from home sales for the 2015 second quarter was 16.6%, down from 17.1% for the year earlier period, but up sequentially by 120 basis points from 15.4% for the 2015 first quarter. The 50 basis point year-over-year decline was driven by higher land and construction costs, partially offset by a 70 basis point improvement in our interest in cost of sales as a percent of home sale revenues. The sequential improvement was the result of (1) a higher percentage of our total deliveries coming from dirt starts, which typically have higher gross margins and (2) an increase in the gross margin for our speculative deliveries, due to decreased incentives offered on the sale of these units. Gross margin from home sales excluding inventory impairments and interest in cost of sales was 19.7%* for the 2015 second quarter versus 21.1%* for the year earlier period and 18.8%* for the 2015 first quarter.

SG&A expenses for the 2015 second quarter were $54.8 million, while our SG&A rate was 11.9%. For the same period in 2014, our SG&A expenses were $49.8 million, while our SG&A rate was 11.6%. The 30 basis point increase in our SG&A rate was driven primarily by $2.5 million in higher net legal expenses as our current quarter had $1.4 million of net legal expenses compared to $1.1 million in net legal recoveries during the 2014 second quarter.

For the three months ended June 30, 2015, our interest and other income decreased $1.9 million, due primarily to a lower average marketable securities balance.

The dollar value of net new orders for the 2015 second quarter increased 16% to $629.7 million from $544.8 million for the same period in 2014. The improvement was primarily driven by an 11% increase in average selling price, and to a lesser extent, a 4% increase in the number of net new orders. The increase in average selling price was primarily a result of price increases implemented in many of our markets combined with a shift in mix to higher priced communities, while the increase in the number of net new orders was driven by a slight increase in our average active subdivisions. Our cancellation rate for the 2015 second quarter was nearly unchanged from a year ago at 19% compared to 18% for the same period in the prior year.

Our backlog value at the end of the 2015 second quarter was up 48% year-over-year to $1.1 billion. The increase was driven primarily by a 36% increase in units in backlog, due primarily to a 16% year-over-year improvement in net new order activity over the past six months and a higher percentage of our units in backlog coming from dirt sales, coupled with a 9% increase in the average selling price of homes in backlog.

Financial Services

Income before taxes from our financial services operations for the 2015 second quarter was $8.3 million, an increase of $1.7 million from $6.6 million for the 2014 second quarter. The improvement was primarily due to a $1.5 million adjustment to our financial services segment to reduce insurance reserves as the result of a decline in insurance claim payment severity and frequency relative to prior period estimates.

About MDC

Since 1972, MDC's subsidiary companies have built and financed the American dream for more than 180,000 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.

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 June 30, 2015, 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.

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

 

M.D.C. HOLDINGS, INC.

Consolidated Statements of Operations and Comprehensive Income

Three Months Ended

Six Months Ended

June 30,

June 30,

2015

2014

2015

2014

(Dollars in thousands, except per share amounts)

(Unaudited)

Homebuilding:

Home sale revenues

$

461,708

$

430,743

$

838,717

$

749,277

Land sale revenues

-

518

910

518

Total home and land sale revenues

461,708

431,261

839,627

749,795

Home cost of sales

(385,019)

(356,175)

(703,661)

(615,653)

Land cost of sales

-

(522)

(1,125)

(522)

Inventory impairments

-

(850)

(350)

(850)

Total cost of sales

(385,019)

(357,547)

(705,136)

(617,025)

Gross margin

76,689

73,714

134,491

132,770

Selling, general and administrative expenses

(54,781)

(49,798)

(105,313)

(98,140)

Interest and other income

2,720

4,613

4,574

18,162

Interest expense

-

-

-

(685)

Other expense

(1,055)

(1,080)

(2,189)

(1,693)

Loss on early extinguishment of debt

-

-

-

(9,412)

Homebuilding pretax income

23,573

27,449

31,563

41,002

Financial Services:

Revenues

11,420

11,491

22,011

20,714

Expenses

(4,207)

(5,615)

(10,366)

(10,539)

Interest and other income

1,096

701

2,000

1,489

Financial services pretax income

8,309

6,577

13,645

11,664

Income before income taxes

31,882

34,026

45,208

52,666

Provision for income taxes

(11,884)

(12,484)

(16,790)

(19,620)

Net income

$

19,998

$

21,542

$

28,418

$

33,046

Other comprehensive income (loss) related to available for sale

securities, net of tax

(360)

2,327

948

(1,719)

Comprehensive income

$

19,638

$

23,869

$

29,366

$

31,327

Earnings per share:

Basic

$

0.41

$

0.44

$

0.58

$

0.68

Diluted

$

0.41

$

0.44

$

0.58

$

0.67

Weighted average common shares outstanding

Basic

48,768,021

48,640,979

48,741,476

48,613,521

Diluted

49,005,037

48,852,696

48,954,059

48,842,527

Dividends declared per share

$

0.25

$

0.25

$

0.50

$

0.50

 

M.D.C. HOLDINGS, INC.

Consolidated Balance Sheets

June 30,

December 31,

2015

2014

ASSETS

(Dollars in thousands, except

per share amounts)

Homebuilding:

(Unaudited)

Cash and cash equivalents

$

148,226

$

122,642

Marketable securities

123,105

140,878

Restricted cash

4,944

2,816

Trade and other receivables

27,120

28,555

Inventories:

Housing completed or under construction

774,069

732,692

Land and land under development

898,398

935,268

Total inventories

1,672,467

1,667,960

Property and equipment, net

29,101

30,491

Deferred tax asset, net

123,519

140,486

Metropolitan district bond securities (related party)

22,259

18,203

Prepaid and other assets

68,702

67,996

Total homebuilding assets

2,219,443

2,220,027

Financial Services:

Cash and cash equivalents

32,062

31,183

Marketable securities

14,438

15,262

Mortgage loans held-for-sale, net

79,728

88,392

Other assets

6,265

3,574

Total financial services assets

132,493

138,411

      Total Assets

$

2,351,936

$

2,358,438

LIABILITIES AND EQUITY

Homebuilding:

Accounts payable

$

33,956

$

35,445

Accrued liabilities

116,034

115,117

Revolving credit facility

15,000

15,000

Senior notes, net

846,752

846,450

Total homebuilding liabilities

1,011,742

1,012,012

Financial Services:

Accounts payable and accrued liabilities

53,969

57,268

Mortgage repurchase facility

50,000

60,822

Total financial services liabilities

103,969

118,090

      Total Liabilities

1,115,711

1,130,102

Stockholders' Equity

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

-

-

Common stock, $0.01 par value; 250,000,000 shares authorized; 48,885,411 and 48,831,639 issued and outstanding at June 30, 2015 and December 31, 2014, respectively

 

489

 

488

Additional paid-in-capital

912,921

909,974

Retained earnings

311,412

307,419

Accumulated other comprehensive income

11,403

10,455

Total Stockholders' Equity

1,236,225

1,228,336

Total Liabilities and Stockholders' Equity

$

2,351,936

$

2,358,438

 

M.D.C. HOLDINGS, INC.

Consolidated Statement of Cash Flows

Three Months Ended

Six Months Ended

June 30,

June 30,

2015

2014

2015

2014

(Dollars in thousands)

(Unaudited)

Operating Activities:

Net income

$

19,998

$

21,542

$

28,418

$

33,046

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

operating activities:

Loss on early extinguishment of debt

-

-

-

9,412

Stock-based compensation expense

1,716

1,258

2,591

2,550

Depreciation and amortization

1,009

999

2,092

1,933

Inventory impairments

-

-

350

-

Gain on sale of marketable securities

(473)

549

(462)

(6,356)

Amortization of discount / premiums on marketable debt securities, net

41

512

100

422

Deferred income tax expense (benefit)

11,554

12,451

16,267

19,554

Net changes in assets and liabilities:

      Restricted cash

(684)

(683)

(2,128)

7

      Trade and other receivables

5,849

302

(292)

(8,409)

      Mortgage loans held-for-sale

(15,020)

6,423

8,664

34,201

      Housing completed or under construction

(45,756)

(47,178)

(41,474)

(122,368)

      Land and land under development

38,193

972

36,919

(62,746)

      Prepaid expenses and other assets

(3,607)

(2,734)

(3,118)

(9,615)

      Accounts payable and accrued liabilities

16,263

30,468

(3,418)

12,097

Net cash provided by (used in) operating activities

29,083

24,881

44,509

(96,272)

Investing Activities:

Purchases of marketable securities

(14,195)

(25,992)

(34,679)

(382,279)

Maturities of marketable securities

-

26,065

1,510

159,789

Sales of marketable securities

37,203

20,414

50,179

306,769

Purchases of property and equipment

(81)

(809)

(421)

(1,354)

Net cash provided by investing activities

22,927

19,678

16,589

82,925

Financing Activities:

Payments on mortgage repurchase facility, net

9,963

(7,142)

(10,822)

(30,876)

Proceeds from issuance of senior notes

-

-

-

248,375

Repayment of senior notes

-

-

-

(259,118)

Advances on revolving credit facility

-

10,000

-

10,000

Dividend payments

(12,212)

(12,205)

(24,425)

(24,412)

Proceeds from exercise of stock options

612

-

612

71

Net cash used in financing activities

(1,637)

(9,347)

(34,635)

(55,960)

Net increase (decrease) in cash and cash equivalents

50,373

35,212

26,463

(69,307)

Cash and cash equivalents:

      Beginning of period

129,915

94,819

153,825

199,338

      End of period

$

180,288

$

130,031

$

180,288

$

130,031

 

M.D.C. HOLDINGS, INC.

Homebuilding Operational Data

New Home Deliveries

Three Months Ended June 30,

2015

2014

% Change

Homes

Dollar Value

Average Price

Homes

Dollar Value

Average Price

Homes

Dollar Value

Average Price

(Dollars in thousands)

Arizona

203

$

58,691

$

289.1

184

$

47,413

$

257.7

10%

24%

12%

California

185

89,544

484.0

143

70,898

495.8

29%

26%

(2)%

Nevada

134

46,616

347.9

144

42,782

297.1

(7)%

9%

17%

Washington

59

22,850

387.3

78

28,568

366.3

(24)%

(20)%

6%

West

581

217,701

374.7

549

189,661

345.5

6%

15%

8%

Colorado

317

147,925

466.6

328

132,004

402.5

(3)%

12%

16%

Utah

25

8,968

358.7

44

14,143

321.4

(43)%

(37)%

12%

Mountain

342

156,893

458.8

372

146,147

392.9

(8)%

7%

17%

Maryland

57

25,702

450.9

81

36,351

448.8

(30)%

(29)%

0%

Virginia

60

28,326

472.1

67

35,023

522.7

(10)%

(19)%

(10)%

Florida

86

33,086

384.7

89

23,561

264.7

(3)%

40%

45%

East

203

87,114

429.1

237

94,935

400.6

(14)%

(8)%

7%

Total

1,126

$

461,708

$

410.0

1,158

$

430,743

$

372.0

(3)%

7%

10%

Six Months Ended June 30,

2015

2014

% Change

Homes

Dollar Value

Average Price

Homes

Dollar Value

Average Price

Homes

Dollar Value

Average Price

(Dollars in thousands)

Arizona

353

$

105,577

$

299.1

309

$

80,085

$

259.2

14%

32%

15%

California

325

158,530

487.8

235

111,998

476.6

38%

42%

2%

Nevada

245

87,530

357.3

264

82,719

313.3

(7)%

6%

14%

Washington

115

42,881

372.9

142

51,281

361.1

(19)%

(16)%

3%

West

1,038

394,518

380.1

950

326,083

343.2

9%

21%

11%

Colorado

562

259,863

462.4

576

225,387

391.3

(2)%

15%

18%

Utah

56

20,140

359.6

68

21,705

319.2

(18)%

(7)%

13%

Mountain

618

280,003

453.1

644

247,092

383.7

(4)%

13%

18%

Maryland

113

52,858

467.8

158

73,256

463.6

(28)%

(28)%

1%

Virginia

119

57,446

482.7

124

62,290

502.3

(4)%

(8)%

(4)%

Florida

147

53,892

366.6

155

40,556

261.7

(5)%

33%

40%

East

379

164,196

433.2

437

176,102

403.0

(13)%

(7)%

8%

Total

2,035

$

838,717

$

412.1

2,031

$

749,277

$

368.9

0%

12%

12%

 

M.D.C. HOLDINGS, INC. Homebuilding Operational Data

Net New Orders

Three Months Ended June 30,

2015

2014

% 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

250

$

70,350

$

281.4

2.35

262

$

74,051

$

282.6

2.65

(5)%

(5)%

(0)%

(11)%

California

283

158,462

559.9

4.44

214

101,695

475.2

4.14

32%

56%

18%

7%

Nevada

150

56,254

375.0

4.55

180

57,456

319.2

3.75

(17)%

(2)%

17%

21%

Washington

109

45,769

419.9

2.79

74

27,960

377.8

2.67

47%

64%

11%

4%

West

792

330,835

417.7

3.27

730

261,162

357.8

3.22

8%

27%

17%

2%

Colorado

410

187,483

457.3

3.23

410

171,001

417.1

3.67

0%

10%

10%

(12)%

Utah

63

22,458

356.5

3.11

55

17,517

318.5

3.06

15%

28%

12%

2%

Mountain

473

209,941

443.8

3.22

465

188,518

405.4

3.58

2%

11%

9%

(10)%

Maryland

61

28,660

469.8

2.14

77

37,877

491.9

1.71

(21)%

(24)%

(4)%

25%

Virginia

43

22,318

519.0

1.74

64

31,305

489.1

2.59

(33)%

(29)%

6%

(33)%

Florida

112

37,938

338.7

2.45

83

25,966

312.8

1.78

35%

46%

8%

38%

East

216

88,916

411.6

2.18

224

95,148

424.8

1.93

(4)%

(7)%

(3)%

13%

Total

1,481

$

629,692

$

425.2

3.03

1,419

$

544,828

$

384.0

3.00

4%

16%

11%

1%

Six Months Ended June 30,

2015

2014

% 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

475

$

132,673

$

279.3

2.22

453

$

127,560

$

281.6

2.50

5%

4%

(1)%

(11)%

California

512

280,992

548.8

4.15

367

178,119

485.3

4.12

40%

58%

13%

1%

Nevada

377

143,669

381.1

4.83

330

102,618

311.0

3.50

14%

40%

23%

38%

Washington

221

91,814

415.4

2.90

166

62,212

374.8

2.69

33%

48%

11%

8%

West

1,585

649,148

409.6

3.22

1,316

470,509

357.5

3.09

20%

38%

15%

4%

Colorado

900

418,453

464.9

3.56

806

333,920

414.3

3.60

12%

25%

12%

(1)%

Utah

129

46,747

362.4

3.27

98

32,219

328.8

2.86

32%

45%

10%

14%

Mountain

1,029

465,200

452.1

3.52

904

366,139

405.0

3.50

14%

27%

12%

1%

Maryland

128

62,276

486.5

2.33

145

69,515

479.4

1.51

(12)%

(10)%

1%

54%

Virginia

115

57,497

500.0

2.10

123

61,485

499.9

2.21

(7)%

(6)%

0%

(5)%

Florida

217

77,374

356.6

2.51

167

52,490

314.3

1.97

30%

47%

13%

27%

East

460

197,147

428.6

2.34

435

183,490

421.8

1.84

6%

7%

2%

27%

Total

3,074

$

1,311,495

$

426.6

3.13

2,655

$

1,020,138

$

384.2

2.88

16%

29%

11%

9%

* 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

Six Months Ended

June 30,

%

June 30,

%

June 30,

%

2015

2014

Change

2015

2014

Change

2015

2014

Change

Arizona

35

34

3%

36

33

9%

36

30

20%

California

20

20

0%

21

17

24%

21

15

40%

Nevada

11

16

(31)%

11

16

(31)%

13

16

(19)%

Washington

13

8

63%

13

9

44%

13

10

30%

West

79

78

1%

81

75

8%

83

71

17%

Colorado

39

36

8%

42

37

14%

42

37

14%

Utah

7

6

17%

7

6

17%

7

6

17%

Mountain

46

42

10%

49

43

14%

49

43

14%

Maryland

9

14

(36)%

10

15

(33)%

9

16

(44)%

Virginia

7

8

(13)%

8

9

(11)%

9

10

(10)%

Florida

15

17

(12)%

15

16

(6)%

14

14

0%

East

31

39

(21)%

33

40

(18)%

32

40

(20)%

Total

156

159

(2)%

163

158

3%

164

154

6%

Backlog

June 30,

2015

2014

% Change

Homes

Dollar Value

Average Price

Homes

Dollar Value

Average Price

Homes

Dollar Value

Average Price

(Dollars in thousands)

Arizona

353

$

102,062

$

289.1

304

$

90,028

$

296.1

16%

13%

(2)%

California

379

217,806

574.7

279

135,197

484.6

36%

61%

19%

Nevada

287

114,305

398.3

206

66,713

323.8

39%

71%

23%

Washington

161

68,564

425.9

70

26,127

373.2

130%

162%

14%

West

1,180

502,737

426.0

859

318,065

370.3

37%

58%

15%

Colorado

917

428,450

467.2

647

278,643

430.7

42%

54%

8%

Utah

113

39,681

351.2

56

18,583

331.8

102%

114%

6%

Mountain

1,030

468,131

454.5

703

297,226

422.8

47%

58%

7%

Maryland

83

42,326

510.0

116

58,674

505.8

(28)%

(28)%

1%

Virginia

86

44,964

522.8

102

49,381

484.1

(16)%

(9)%

8%

Florida

179

71,180

397.7

106

38,120

359.6

69%

87%

11%

East

348

158,470

455.4

324

146,175

451.2

7%

8%

1%

Total

2,558

$

1,129,338

$

441.5

1,886

$

761,466

$

403.7

36%

48%

9%

 

M.D.C. HOLDINGS, INC.

Homebuilding Operational Data

Homes Completed or Under Construction (WIP lots)

June 30,

%

2015

2014

Change

Unsold:

Completed

229

419

(45)%

Under construction

459

725

(37)%

Total unsold started homes

688

1,144

(40)%

Sold homes under construction or completed

1,787

1,422

26%

Model homes

281

263

7%

Total homes completed or under construction

2,756

2,829

(3)%

                                                                                                                                                                                                    

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

June 30, 2015

June 30, 2014

Lots Owned

Lots Optioned

Total

Lots Owned

Lots Optioned

Total

Total % Change

Arizona

1,972

40

2,012

2,683

50

2,733

(26)%

California

1,625

55

1,680

1,655

132

1,787

(6)%

Nevada

1,683

420

2,103

1,534

434

1,968

7%

Washington

825

129

954

756

226

982

(3)%

West

6,105

644

6,749

6,628

842

7,470

(10)%

Colorado

3,878

821

4,699

4,439

983

5,422

(13)%

Utah

535

-

535

553

163

716

(25)%

Mountain

4,413

821

5,234

4,992

1,146

6,138

(15)%

Maryland

385

325

710

409

434

843

(16)%

Virginia

588

319

907

569

499

1,068

(15)%

Florida

910

160

1,070

803

384

1,187

(10)%

East

1,883

804

2,687

1,781

1,317

3,098

(13)%

Total

12,401

2,269

14,670

13,401

3,305

16,706

(12)%

 

M.D.C. HOLDINGS, INC. Reconciliations of Non-GAAP Financial Measures

Gross Margin from Home Sales Excluding Interest and Impairments (Unaudited)

Gross Margin from Home Sales Excluding Impairments and Gross Margin from Home Sales Excluding Interest and Impairments are non-GAAP financial measures. We believe this information is meaningful as it isolates the impact that interest and impairments have on our Gross Margin from Home Sales and permits investors to make better comparisons with our competitors, who also break out and adjust gross margins in a similar fashion.

Three Months Ended

June 30, 2015

Gross Margin %

March 31, 2015

Gross Margin %

June 30, 2014

Gross Margin %

(Dollars in thousands)

Gross Margin

$

76,689

16.6%

$

57,802

15.3%

$

73,714

17.1%

Less: Land Sales Revenue

-

(910)

(518)

Add: Land Cost of Sales

-

1,125

522

Gross Margin from Home Sales

76,689

16.6%

58,017

15.4%

73,718

17.1%

Add: Inventory Impairments

-

350

850

Gross Margin from Home Sales Excluding Impairments

76,689

16.6%

58,367

15.5%

74,568

17.3%

Add: Interest in Cost of Sales

14,439

12,491

16,522

Gross Margin from Home Sales Excluding Impairments and Interest in Cost of Sales

 

$

 

91,128

 

19.7%

 

$

 

70,858

 

18.8%

 

$

 

91,090

 

21.1%

Six Months Ended June 30,

June 30, 2015

Gross Margin %

June 30, 2014

Gross Margin %

(Dollars in thousands)

Gross Margin

$

134,491

16.0%

$

132,770

17.7%

Less: Land Sales Revenue

(910)

(518)

Add: Land Cost of Sales

1,125

522

Gross Margin from Home Sales

134,706

16.1%

132,774

17.7%

Add: Inventory Impairments

350

850

Gross Margin from Home Sales Excluding Impairments

135,056

16.1%

133,624

17.8%

Add: Interest in Cost of Sales

26,930

28,246

Gross Margin from Home Sales Excluding Impairments and Interest in Cost of Sales

 

$

 

161,986

 

19.3%

 

$

 

161,870

 

21.6%

 

 

SOURCE M.D.C. Holdings, Inc.



RELATED LINKS

http://www.mdcholdings.com