M.D.C. HOLDINGS, INC. | RICHMOND AMERICAN HOMES | |
HOMEAMERICAN MORTGAGE |
Contacts:
|
Paris G. Reece III | Robert N. Martin | Alison Schuller | |||
Chief Financial Officer | Investor Relations | Corporate Communications | ||||
(303) 804-7706 | (720) 977-3431 | (720) 977-3554 | ||||
greece@mdch.com | bob.martin@mdch.com | alison.schuller@mdch.com |
• | Net loss of $6.4 million; diluted loss per share of $0.14 | ||
• | After-tax asset impairments and project cost write-offs of $60.6 million | ||
• | Cash flow from operations of $413.0 million | ||
• | Ratio of corporate and homebuilding debt to capital, net of cash, of 0.18 | ||
• | Ending unrestricted cash and available borrowing capacity of $1.74 billion | ||
• | Total revenue of $1.34 billion; $1.74 billion in 2005 | ||
• | Closed 3,594 homes at an average selling price of $360,100 | ||
• | Net orders for 1,571 homes valued at $515.0 million |
• | Net income of $214.3 million; diluted earnings per share of $4.66 | ||
• | After-tax asset impairments and project cost write-offs of $87.7 million | ||
• | Cash flow from operations of $371.7 million | ||
• | Total revenue of $4.80 billion; $4.89 billion in 2005 | ||
• | Closed 13,123 homes at an average selling price of $354,400 | ||
• | Net orders for 10,229 homes valued at $3.47 billion | ||
• | Yearend backlog of 3,638 homes valued at $1.30 billion |
Three Months Ended | Year Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
REVENUE |
||||||||||||||||
Home sales revenue |
$ | 1,294,140 | $ | 1,705,525 | $ | 4,650,556 | $ | 4,792,700 | ||||||||
Land sales revenue |
15,799 | 430 | 34,611 | 2,995 | ||||||||||||
Other revenue |
33,474 | 33,659 | 116,575 | 96,894 | ||||||||||||
Total Revenue |
1,343,413 | 1,739,614 | 4,801,742 | 4,892,589 | ||||||||||||
COSTS AND EXPENSES |
||||||||||||||||
Home cost of sales |
1,079,274 | 1,231,797 | 3,619,656 | 3,436,035 | ||||||||||||
Land cost of sales |
15,367 | 365 | 33,491 | 1,861 | ||||||||||||
Asset impairments |
91,252 | — | 112,027 | — | ||||||||||||
Marketing expenses |
36,957 | 32,583 | 128,856 | 106,015 | ||||||||||||
Commission expenses |
44,481 | 45,045 | 151,108 | 130,307 | ||||||||||||
General and administrative expenses |
92,285 | 106,083 | 419,780 | 401,184 | ||||||||||||
Related party expenses |
1,796 | 8,210 | 3,687 | 8,424 | ||||||||||||
Total Costs and Expenses |
1,361,412 | 1,424,083 | 4,468,605 | 4,083,826 | ||||||||||||
Income (loss) before income taxes |
(17,999 | ) | 315,531 | 333,137 | 808,763 | |||||||||||
Benefit from (provision for) income taxes |
11,634 | (118,052 | ) | (118,884 | ) | (303,040 | ) | |||||||||
NET INCOME (LOSS) |
$ | (6,365 | ) | $ | 197,479 | $ | 214,253 | $ | 505,723 | |||||||
EARNINGS (LOSS) PER SHARE |
||||||||||||||||
Basic |
$ | (0.14 | ) | $ | 4.43 | $ | 4.77 | $ | 11.48 | |||||||
Diluted |
$ | (0.14 | ) | $ | 4.29 | $ | 4.66 | $ | 10.99 | |||||||
WEIGHTED-AVERAGE SHARES |
||||||||||||||||
Basic |
45,073 | 44,605 | 44,952 | 44,046 | ||||||||||||
Diluted |
46,097 | 46,068 | 45,971 | 46,036 | ||||||||||||
DIVIDENDS DECLARED PER SHARE |
$ | 0.25 | $ | 0.25 | $ | 1.00 | $ | 0.76 | ||||||||
December 31, | December 31, | |||||||
2006 | 2005 | |||||||
ASSETS |
||||||||
Cash and cash equivalents |
$ | 507,947 | $ | 214,531 | ||||
Restricted cash |
2,641 | 6,742 | ||||||
Home sales and other accounts receivable |
143,936 | 158,808 | ||||||
Mortgage loans held in inventory |
212,903 | 237,376 | ||||||
Inventories, net |
||||||||
Housing completed or under construction |
1,178,671 | 1,320,106 | ||||||
Land and land under development |
1,575,158 | 1,677,948 | ||||||
Property and equipment, net |
44,606 | 49,119 | ||||||
Deferred income taxes |
124,880 | 54,319 | ||||||
Prepaid expenses and other assets, net |
119,133 | 140,901 | ||||||
Total Assets |
$ | 3,909,875 | $ | 3,859,850 | ||||
LIABILITIES |
||||||||
Accounts payable |
$ | 171,005 | $ | 201,747 | ||||
Accrued liabilities |
419,654 | 442,409 | ||||||
Income taxes payable |
28,485 | 102,656 | ||||||
Related party liabilities |
1,700 | 8,100 | ||||||
Homebuilding line of credit |
— | — | ||||||
Mortgage line of credit |
130,467 | 156,532 | ||||||
Senior notes, net |
996,682 | 996,297 | ||||||
Total Liabilities |
1,747,993 | 1,907,741 | ||||||
COMMITMENTS AND CONTINGENCIES |
— | — | ||||||
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;
45,179,000 and 45,165,000 issued and outstanding, respectively, at
December 31, 2006 and 44,642,000 and 44,630,000 issued
and outstanding, respectively, at December 31, 2005 |
452 | 447 | ||||||
Additional paid-in capital |
760,831 | 719,813 | ||||||
Retained earnings |
1,402,261 | 1,232,971 | ||||||
Accumulated other comprehensive loss |
(1,003 | ) | (622 | ) | ||||
Less treasury stock, at cost; 14,000 and 12,000 shares, respectively, at
December 31, 2006 and December 31, 2005 |
(659 | ) | (500 | ) | ||||
Total Stockholders’ Equity |
2,161,882 | 1,952,109 | ||||||
Total Liabilities and Stockholders’ Equity |
$ | 3,909,875 | $ | 3,859,850 | ||||
Three Months Ended | Year Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
REVENUE |
||||||||||||||||
West |
$ | 809,332 | $ | 1,098,986 | $ | 2,871,040 | $ | 2,833,398 | ||||||||
Mountain |
211,382 | 230,514 | 730,489 | 834,270 | ||||||||||||
East |
183,743 | 261,912 | 628,508 | 732,132 | ||||||||||||
Other Homebuilding |
119,329 | 120,362 | 493,628 | 413,628 | ||||||||||||
Total Homebuilding |
1,323,786 | 1,711,774 | 4,723,665 | 4,813,428 | ||||||||||||
Financial Services and Other |
29,086 | 31,021 | 103,243 | 87,849 | ||||||||||||
Corporate |
1,113 | 28 | 1,788 | 1,487 | ||||||||||||
Intercompany Adjustments |
(10,572 | ) | (3,209 | ) | (26,954 | ) | (10,175 | ) | ||||||||
Consolidated |
$ | 1,343,413 | $ | 1,739,614 | $ | 4,801,742 | $ | 4,892,589 | ||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
||||||||||||||||
West |
$ | (38,688 | ) | $ | 226,081 | $ | 235,954 | $ | 611,603 | |||||||
Mountain |
18,307 | 20,852 | 43,490 | 70,348 | ||||||||||||
East |
19,015 | 80,844 | 104,706 | 203,853 | ||||||||||||
Other Homebuilding |
(12,946 | ) | 5,439 | (12,709 | ) | 6,538 | ||||||||||
Total Homebuilding |
(14,312 | ) | 333,216 | 371,441 | 892,342 | |||||||||||
Financial Services and Other |
10,025 | 16,067 | 45,186 | 34,964 | ||||||||||||
Corporate |
(13,712 | ) | (33,752 | ) | (83,490 | ) | (118,543 | ) | ||||||||
Consolidated |
$ | (17,999 | ) | $ | 315,531 | $ | 333,137 | $ | 808,763 | |||||||
ASSET IMPAIRMENTS |
||||||||||||||||
West |
$ | 75,561 | $ | — | $ | 90,802 | $ | — | ||||||||
Mountain |
1,265 | — | 1,891 | — | ||||||||||||
East |
6,879 | — | 8,236 | — | ||||||||||||
Other Homebuilding |
7,547 | — | 11,098 | — | ||||||||||||
Total Homebuilding |
$ | 91,252 | $ | — | $ | 112,027 | $ | — | ||||||||
December 31, | December 31, | |||||||
2006 | 2005 | |||||||
TOTAL ASSETS |
||||||||
West |
$ | 1,869,442 | $ | 2,092,833 | ||||
Mountain |
535,554 | 469,572 | ||||||
East |
333,902 | 362,292 | ||||||
Other Homebuilding |
266,326 | 358,958 | ||||||
Total Homebuilding |
3,005,224 | 3,283,655 | ||||||
Financial Services and Other |
246,734 | 277,455 | ||||||
Corporate |
657,917 | 298,740 | ||||||
Consolidated |
$ | 3,909,875 | $ | 3,859,850 | ||||
Three Months Ended | Year Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
SELECTED OPERATING DATA |
||||||||||||||||
General and Administrative Expenses |
||||||||||||||||
Homebuilding Operations |
$ | 60,309 | $ | 65,562 | $ | 280,129 | $ | 236,695 | ||||||||
Financial Services and Other Operations |
19,019 | 14,951 | 58,059 | 52,883 | ||||||||||||
Corporate |
12,957 | 25,570 | 81,592 | 111,606 | ||||||||||||
Total |
$ | 92,285 | $ | 106,083 | $ | 419,780 | $ | 401,184 | ||||||||
SG&A as a Percent of Home Sales Revenues |
||||||||||||||||
Homebuilding Operations |
11.0 | % | 8.4 | % | 12.0 | % | 9.9 | % | ||||||||
Corporate |
1.1 | % | 2.0 | % | 1.8 | % | 2.5 | % | ||||||||
Total Homebuilding and Corporate |
12.1 | % | 10.4 | % | 13.9 | % | 12.4 | % | ||||||||
Depreciation and Amortization |
$ | 17,493 | $ | 19,907 | $ | 59,030 | $ | 54,425 | ||||||||
Home Gross Margins1 |
16.6 | % | 27.8 | % | 22.2 | % | 28.3 | % | ||||||||
Cash Provided by (Used in) Operating Activities |
$ | 413,013 | $ | 132,107 | $ | 371,670 | $ | (424,929 | ) | |||||||
Cash Used in Investing Activities |
$ | (2,997 | ) | $ | (4,771 | ) | $ | (10,221 | ) | $ | (22,889 | ) | ||||
Cash Provided by (Used in) Financing Activities |
$ | (34,913 | ) | $ | (32,575 | ) | $ | (68,033 | ) | $ | 261,390 | |||||
Ending Unrestricted Cash and Available Borrowing Capacity |
$ | 1,736,054 | $ | 1,245,540 | N/A | N/A | ||||||||||
Ending Book Value Per Share2 |
$ | 47.87 | $ | 43.74 | N/A | N/A | ||||||||||
After-Tax Return on Average Capital3 |
6.6 | % | 19.2 | % | N/A | N/A | ||||||||||
After-Tax Return on Average Assets3 |
5.5 | % | 15.8 | % | N/A | N/A | ||||||||||
After-Tax Return on Average Equity3 |
10.2 | % | 28.7 | % | N/A | N/A | ||||||||||
Interest in Home Cost of Sales as a Percent
of Home Sales Revenue |
1.1 | % | 0.7 | % | 1.1 | % | 0.7 | % | ||||||||
Corporate and Homebuilding Interest Capitalized |
||||||||||||||||
Interest Capitalized in Inventories at Beginning of Period |
$ | 50,145 | $ | 37,878 | $ | 41,999 | $ | 24,220 | ||||||||
Interest Capitalized During the Period |
14,148 | 15,332 | 58,141 | 51,872 | ||||||||||||
Interest in Home and Land Cost of Sales for the Period |
13,638 | 11,211 | 49,485 | 34,093 | ||||||||||||
Interest Capitalized in Inventories at End of Period |
$ | 50,655 | $ | 41,999 | $ | 50,655 | $ | 41,999 | ||||||||
Interest Capitalized as a Percent of Inventories |
1.8 | % | 1.4 | % | N/A | N/A |
1 | Home sales revenue less home cost of sales (excluding commissions, amortization of deferred marketing and asset impairments) as a percent of home sales revenue. Prior year information has been reclassified to conform with current year presentation. | |
2 | Ending stockholders’ equity divided by ending shares outstanding. | |
3 | Based on last twelve months data. |
December 31, | December 31, | December 31, | ||||||||||
2006 | 2005 | 2004 | ||||||||||
LOTS OWNED AND CONTROLLED |
||||||||||||
Lots Owned |
19,410 | 23,445 | 20,760 | |||||||||
Lots Under Option |
8,097 | 18,819 | 21,164 | |||||||||
Homes Completed or Under Construction |
4,636 | 6,891 | 5,573 | |||||||||
LOTS OWNED BY MARKET |
||||||||||||
(excluding homes completed or under construction) |
||||||||||||
Arizona |
6,368 | 7,385 | 5,657 | |||||||||
California |
2,802 | 3,367 | 2,646 | |||||||||
Colorado |
3,479 | 3,639 | 3,993 | |||||||||
Delaware Valley |
265 | 471 | 312 | |||||||||
Florida |
1,093 | 1,201 | 594 | |||||||||
Illinois |
287 | 430 | 508 | |||||||||
Maryland |
528 | 679 | 650 | |||||||||
Nevada |
2,747 | 4,055 | 3,916 | |||||||||
Texas |
13 | 471 | 642 | |||||||||
Utah |
1,185 | 964 | 862 | |||||||||
Virginia |
643 | 783 | 980 | |||||||||
Total Company |
19,410 | 23,445 | 20,760 | |||||||||
LOTS UNDER OPTION BY MARKET |
||||||||||||
Arizona |
744 | 3,650 | 5,494 | |||||||||
California |
387 | 2,005 | 1,782 | |||||||||
Colorado |
801 | 2,198 | 1,866 | |||||||||
Delaware Valley |
683 | 1,283 | 723 | |||||||||
Florida |
1,800 | 3,202 | 2,980 | |||||||||
Illinois |
— | 186 | 203 | |||||||||
Maryland |
960 | 1,173 | 1,206 | |||||||||
Nevada |
250 | 1,400 | 1,859 | |||||||||
Texas |
— | 80 | 1,694 | |||||||||
Utah |
91 | 418 | 216 | |||||||||
Virginia |
2,381 | 3,224 | 3,141 | |||||||||
Total Company |
8,097 | 18,819 | 21,164 | |||||||||
Non-refundable Option Deposits |
||||||||||||
Cash |
$ | 20,228 | $ | 48,157 | $ | 41,804 | ||||||
Letters of Credit |
14,224 | 23,142 | 22,062 | |||||||||
Total Non-refundable Option Deposits |
$ | 34,452 | $ | 71,299 | $ | 63,866 | ||||||
Three Months Ended | Year Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
HOMES CLOSED (UNITS) |
||||||||||||||||
Arizona |
1,016 | 1,121 | 3,353 | 3,671 | ||||||||||||
California |
536 | 864 | 1,788 | 2,102 | ||||||||||||
Colorado |
309 | 575 | 1,463 | 2,190 | ||||||||||||
Delaware Valley |
78 | 15 | 200 | 33 | ||||||||||||
Florida |
219 | 251 | 921 | 1,083 | ||||||||||||
Illinois |
55 | 46 | 174 | 86 | ||||||||||||
Maryland |
154 | 137 | 444 | 397 | ||||||||||||
Nevada |
647 | 1,165 | 2,756 | 3,016 | ||||||||||||
Texas |
29 | 183 | 395 | 799 | ||||||||||||
Utah |
342 | 264 | 922 | 904 | ||||||||||||
Virginia |
209 | 330 | 707 | 1,026 | ||||||||||||
Total Company |
3,594 | 4,951 | 13,123 | 15,307 | ||||||||||||
AVERAGE SELLING PRICE PER HOME CLOSED |
||||||||||||||||
Arizona |
$ | 273.9 | $ | 255.0 | $ | 294.6 | $ | 227.2 | ||||||||
California |
596.0 | 517.5 | 558.7 | 512.6 | ||||||||||||
Colorado |
332.7 | 288.0 | 308.7 | 286.3 | ||||||||||||
Delaware Valley |
420.1 | 379.4 | 405.7 | 369.6 | ||||||||||||
Florida |
267.7 | 268.2 | 284.8 | 219.9 | ||||||||||||
Illinois |
367.3 | 357.2 | 367.5 | 389.4 | ||||||||||||
Maryland |
528.3 | 528.8 | 558.0 | 482.8 | ||||||||||||
Nevada |
307.6 | 318.2 | 317.5 | 305.8 | ||||||||||||
Texas |
151.0 | 165.7 | 165.9 | 160.6 | ||||||||||||
Utah |
320.8 | 244.4 | 303.3 | 226.4 | ||||||||||||
Virginia |
491.2 | 577.0 | 536.3 | 527.1 | ||||||||||||
Company Average |
$ | 360.1 | $ | 344.5 | $ | 354.4 | $ | 313.1 | ||||||||
ORDERS FOR HOMES, NET (UNITS) |
||||||||||||||||
Arizona |
480 | 587 | 2,758 | 3,627 | ||||||||||||
California |
241 | 323 | 1,450 | 2,060 | ||||||||||||
Colorado |
201 | 348 | 1,139 | 2,075 | ||||||||||||
Delaware Valley |
28 | 35 | 138 | 191 | ||||||||||||
Florida |
(11 | ) | 127 | 519 | 1,044 | |||||||||||
Illinois |
35 | 35 | 117 | 148 | ||||||||||||
Maryland |
60 | 58 | 380 | 423 | ||||||||||||
Nevada |
314 | 505 | 2,048 | 3,293 | ||||||||||||
Texas |
11 | 109 | 169 | 781 | ||||||||||||
Utah |
133 | 212 | 1,049 | 953 | ||||||||||||
Virginia |
79 | 66 | 462 | 739 | ||||||||||||
Total Company |
1,571 | 2,405 | 10,229 | 15,334 | ||||||||||||
Estimated Value of Orders for Homes, net |
$ | 515,000 | $ | 831,000 | $ | 3,467,000 | $ | 5,233,000 | ||||||||
Estimated Average Selling Price of Orders for Homes, net |
$ | 327.8 | $ | 345.5 | $ | 338.9 | $ | 341.3 | ||||||||
Order Cancellation Rate4 |
56.5 | % | 33.8 | % | 43.4 | % | 23.7 | % | ||||||||
4 | Gross number of cancellations received divided by gross number of orders received. |
December 31, | December 31, | December 31, | ||||||||||
2006 | 2005 | 2004 | ||||||||||
BACKLOG (UNITS) |
||||||||||||
Arizona |
1,504 | 2,099 | 2,143 | |||||||||
California |
427 | 765 | 807 | |||||||||
Colorado |
253 | 577 | 692 | |||||||||
Delaware Valley |
119 | 181 | 23 | |||||||||
Florida |
197 | 599 | 638 | |||||||||
Illinois |
23 | 80 | 18 | |||||||||
Maryland |
187 | 251 | 225 | |||||||||
Nevada |
315 | 1,023 | 746 | |||||||||
Texas |
12 | 238 | 256 | |||||||||
Utah |
465 | 338 | 289 | |||||||||
Virginia |
136 | 381 | 668 | |||||||||
Total Company |
3,638 | 6,532 | 6,505 | |||||||||
Backlog Estimated Sales Value |
$ | 1,300,000 | $ | 2,440,000 | $ | 1,920,000 | ||||||
Estimated Average Selling Price of Homes in Backlog |
$ | 357.3 | $ | 373.5 | $ | 295.2 | ||||||
ACTIVE SUBDIVISIONS |
||||||||||||
Arizona |
67 | 54 | 32 | |||||||||
California |
45 | 34 | 22 | |||||||||
Colorado |
47 | 57 | 53 | |||||||||
Delaware Valley |
8 | 7 | 2 | |||||||||
Florida |
30 | 19 | 18 | |||||||||
Illinois |
6 | 8 | 1 | |||||||||
Maryland |
19 | 11 | 11 | |||||||||
Nevada |
41 | 43 | 31 | |||||||||
Texas |
2 | 21 | 24 | |||||||||
Utah |
22 | 18 | 22 | |||||||||
Virginia |
19 | 20 | 26 | |||||||||
Total Company |
306 | 292 | 242 | |||||||||
Average for Quarter Ended |
299 | 287 | 237 | |||||||||
Three Months Ended | Year Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
NON-GAAP FINANCIAL MEASURES |
||||||||||||||||
Net income and earnings per share, excluding asset impairments
and project cost write-offs |
||||||||||||||||
Asset impairments, before tax |
$ | 91,252 | $ | — | $ | 112,027 | $ | — | ||||||||
Project cost write-offs, before tax |
6,686 | 5,223 | 29,708 | 10,439 | ||||||||||||
Total |
97,938 | 5,223 | 141,735 | 10,439 | ||||||||||||
Income tax affect |
37,314 | 1,990 | 54,001 | 3,977 | ||||||||||||
After-tax asset impairments and project cost write-offs |
$ | 60,624 | $ | 3,233 | $ | 87,734 | $ | 6,462 | ||||||||
Net income (loss), as reported |
(6,365 | ) | 197,479 | 214,253 | 505,723 | |||||||||||
Plus After-tax asset impairments and project cost write-offs |
60,624 | 3,233 | 87,734 | 6,462 | ||||||||||||
Net income, excluding asset impairments and
project cost write-offs |
$ | 54,259 | $ | 200,712 | $ | 301,987 | $ | 512,185 | ||||||||
Weighted average shares (basic) |
45,073 | 44,605 | 44,952 | 44,046 | ||||||||||||
Weighted average shares (diluted) |
46,097 | 46,068 | 45,971 | 46,036 | ||||||||||||
Diluted earnings (loss) per share, as reported |
$ | (0.14 | ) | $ | 4.29 | $ | 4.66 | $ | 10.99 | |||||||
Diluted earnings per share, before asset impairments
and project cost write-offs |
$ | 1.18 | $ | 4.36 | $ | 6.57 | $ | 11.13 | ||||||||
December 31, | December 31, | |||||||
2006 | 2005 | |||||||
Corporate and homebuilding debt-to-capital, net of cash |
||||||||
Total debt |
$ | 1,127,149 | $ | 1,152,829 | ||||
Less mortgage line of credit |
(130,467 | ) | (156,532 | ) | ||||
Total corporate and homebuilding debt |
996,682 | 996,297 | ||||||
Less cash and restricted cash |
(510,588 | ) | (221,273 | ) | ||||
Total corporate and homebuilding debt, net of cash |
486,094 | 775,024 | ||||||
Stockholders’ equity |
2,161,882 | 1,952,109 | ||||||
Total corporate and homebuilding capital, net of cash |
$ | 2,647,976 | $ | 2,727,133 | ||||
Ratio of corporate and homebuilding debt to capital, net of cash |
0.18 | 0.28 |