MDC(US:MDC)2022-02-01 19:19Financial Performance - Home sale revenues for 2021 reached $5.10 billion, a 36% increase from $3.77 billion in 2020[110] - Gross profit for 2021 was $1.18 billion, with a gross margin of 23.1%, up from 20.8% in 2020[110] - The company reported a net income of $573.7 million for 2021, a 56% increase compared to $367.6 million in 2020[116] - Homebuilding pretax income for 2021 was $659.7 million, a 74% increase from $378.5 million in 2020, driven by improved pricing and operating leverage[118] - Total pretax income reached $751,694 thousand in 2021, a 64.2% increase from $457,512 thousand in 2020[293] - Basic earnings per share for 2021 was $8.13, compared to $5.33 in 2020, marking a 52.5% increase[228] - Basic earnings per share (EPS) for 2021 was $8.13, up 52.9% from $5.33 in 2020, while diluted EPS was $7.83, an increase of 51.5% from $5.17 in 2020[296] Sales and Deliveries - For the year ended December 31, 2021, total new home deliveries increased to 9,982 homes, up 22% from 8,158 homes in 2020[122] - The average selling price of homes delivered rose to $511.2 thousand, reflecting an 11% increase from $461.6 thousand in 2020[122] - The average selling price of new home orders increased by 11% year-over-year, contributing to an 11% increase in the dollar value of net new home orders[117] - The West segment delivered 5,732 homes with an average selling price of $517.2 thousand, a 30% increase in homes delivered and an 8% increase in average price from 2020[122] - The Mountain segment saw a 9% increase in homes delivered to 2,770, with an average selling price of $565.8 thousand, up 11% from the previous year[122] - The East segment delivered 1,480 homes, with a 22% increase in homes delivered and a 28% increase in average selling price to $385.5 thousand[122] Backlog and Inventory - The backlog at December 31, 2021, was 7,640 homes valued at $4.30 billion, representing a 15% increase in units and a 32% increase in dollar value from the previous year[114] - Total owned and optioned lots increased by 29% to 38,080 lots as of December 31, 2021, supporting future growth[148] - Homes completed or under construction rose by 31% year-over-year, with sold homes under construction increasing by 33%[147] - Total inventories reached $3,760,851 thousand, up 32.7% from $2,832,230 thousand in 2020[226] Financial Services - Financial services pretax income reached a record $92.0 million in 2021, a 16% increase from $79.0 million in 2020[110] - Financial services revenues grew by $16.4 million, or 12%, driven by a $10.5 million increase in the other financial services segment[149] - Total financial services revenues rose to $152,212 thousand in 2021, compared to $135,832 thousand in 2020, marking a 12.5% increase[293] - Mortgage loan originations increased by 10% to 6,247 loans, with principal amount rising by 23% to $2.62 billion[153] Expenses and Liabilities - Total selling, general and administrative expenses increased to $493.993 million, a rise of 22.5% from $403.218 million in 2020[133] - The company recorded an income tax provision of $178.0 million for 2021, resulting in an effective tax rate of 23.7%[154] - Total liabilities increased to $2,366,382 thousand, a rise of 35.6% from $1,745,008 thousand in 2020[226] - The company reported a loss on retirement of debt of $23,571,000 in 2021, with no such loss reported in 2020[234] Cash Flow and Liquidity - The company ended the year with total liquidity of $1.75 billion, lowering the debt to capital ratio to 36.5%[115] - Net cash used in operating activities was $208.0 million, compared to $23.1 million in the prior year, driven by increased housing inventory and land purchases[178] - Cash used to increase land and land under development was $497.4 million for the year ended December 31, 2021, significantly up from $15.0 million in the prior year, reflecting the acquisition of 15,435 lots[178] - Net cash provided by financing activities was $335.2 million for the year ended December 31, 2021, primarily due to proceeds from the issuance of senior notes totaling $694.7 million[180] Market Conditions and Risks - The average sale-to-close cycle time increased to approximately 36 weeks, up five weeks year-over-year due to supply chain disruptions and labor shortages[122] - The cancellation rate decreased from 19% in 2020 to 17% in 2021, with notable reductions in the East and Mountain regions[143] - The company assesses inventory impairment by comparing estimated future cash flows to carrying value, with significant reliance on Level 3 inputs such as future home sale revenues and construction costs[185] Stockholder Information - Dividends paid increased from $1.29 per share in 2020 to $1.67 per share in 2021, alongside an 8% stock dividend distribution[175] - The company’s dividend payments for 2021 were $118,529,000, compared to $89,008,000 in 2020, representing a 33.2% increase[234] Debt and Financing - The company accelerated the retirement of $250 million in senior notes with a 5.500% interest rate, originally due in January 2024, during the year ended December 31, 2021[162] - The Revolving Credit Facility was amended to increase the aggregate commitment from $1.0 billion to $1.2 billion, with a potential increase to $1.7 billion upon request[166] - As of December 31, 2021, the company had $10.0 million in borrowings and $40.1 million in letters of credit outstanding under the Revolving Credit Facility, leaving a remaining borrowing capacity of $1.15 billion[170]