M.D.C. Holdings, Inc. (MDC) Tops Q1 EPS by 9c, Revenues Beat

M.D.C. Holdings, Inc. (NYSE: MDC) reported Q1 EPS of $1.51, $0.09 better than the analyst estimate of $1.42. Revenue for the quarter came in at $1.49 billion versus the consensus estimate of $1.14 billion.

Larry A. Mizel, MDC's Executive Chairman, stated, "MDC delivered another quarter of strong profitability, generating net income of $111 million, or $1.51 per diluted share. Home sale revenues grew 49% year-over-year on a 41% increase in closings and 6% rise in average selling prices. We continue to see heightened demand for our homes, as evidenced by the 34% year-over-year increase to unit orders for the quarter. The only constraint to our sales efforts are ones that we are imposing on ourselves, in an effort to balance orders and pricing to best manage our backlog. These efforts resulted in a 200 basis point expansion to our gross margin from home sales in the quarter to 21.9%. We have also been successful in leveraging our overhead expenses, lowering our SG&A ratio by 180 basis points in the quarter to 11.0%. Given the size of our quarter-ending backlog and the current state of the housing market, we believe MDC is in a great position to deliver excellent results for the full year."

Mr. Mizel continued, "We continue to run our business in a prudent manner by focusing on steady growth in each of our markets while maintaining a strong capital position. This focus was recognized by S&P Global Ratings earlier this month, which upgraded our credit rating to investment grade. We believe this is validation for our long-term approach to the business and the strength of our balance sheet, which we feel benefits both debt and equity investors over time."

David D. Mandarich, MDC's President and Chief Executive Officer stated, "While the entire industry is benefiting from the ongoing imbalance between housing supply and demand, we believe MDC is uniquely positioned to succeed in today's market thanks to our continued focus on more affordable price points and our build-to-order model. There is a real need for additional housing in this country, especially for people looking to buy their first home, and a majority of our communities cater to these buyers. There is also a desire for new home customization among these buyers, which is another benefit that our business model offers. We believe these two trends will be in place for the foreseeable future, giving us a great runway for continued success."

2021 Outlook and Other Selected Information1

• Home deliveries for the 2021 second quarter between 2,500 and 2,700
  • Average selling price for 2021 second quarter unit deliveries of approximately $500,000
  • Gross margin from home sales for the 2021 second quarter of approximately 22.5% (excluding impairments and warranty adjustments)
• Full year 2021 home deliveries between 10,000 and 11,000
• Active subdivision count goal of at least 10% growth during 2021 (from December 31, 2020 to December 31, 2021)
• Lots controlled of 32,023 at March 31, 2021, up 18% year-over-year
• Quarterly cash dividend of forty cents ($0.40) per share declared on April 26, 2021, up 31% year-over-year (after adjusting for 8% stock dividend in March 2021)

For earnings history and earnings-related data on M.D.C. Holdings, Inc. (MDC) click here.

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