MDC(US:MDC)2023-01-31 18:51Financial Performance - Home sale revenues for 2022 reached $5.59 billion, a 9% increase from $5.10 billion in 2021[107] - Net income for 2022 was $562.1 million, or $7.67 per diluted share, representing a 2% decrease compared to $573.7 million, or $7.83 per diluted share, in 2021[113] - Homebuilding pretax income increased by $31.8 million, or 5%, to $691.5 million in 2022, driven by a 9% increase in home sale revenues[115] - The effective tax rate increased to 26.0% in 2022 from 23.7% in the prior year, impacting net income[113] - Total financial services revenues fell by 13% to $131.7 million in 2022, down from $152.2 million in 2021[145] - Basic Earnings Per Common Share for 2022 was $7.87, a decrease of 3.2% from $8.13 in 2021[291] - Diluted Earnings Per Common Share for 2022 was $7.67, down from $7.83 in 2021, reflecting a slight decline[291] - Net income attributable to common stockholders for 2022 was $559,396, compared to $570,680 in 2021, indicating a decrease of 2.3%[291] Cash Flow and Liquidity - The company ended 2022 with total cash and cash equivalents of $1.28 billion and total liquidity of $2.43 billion[111] - The company generated cash flow from operating activities of $905.6 million in 2022, a significant improvement from a cash outflow of $207.99 million in 2021[107] - For the year ended December 31, 2022, net cash provided by operating activities was $905.6 million, a significant increase from net cash used of $208.0 million in the prior year[172] - Cash used to increase land and land under development decreased to $95.4 million in 2022 from $502.8 million in 2021, driven by the acquisition of 4,377 lots compared to 15,435 lots in the prior year[172] - Net cash used in investing activities was $585.9 million for the year ended December 31, 2022, compared to $27.7 million in the prior year, primarily due to $656.8 million used for the purchase of marketable securities[173] - Net cash used in financing activities was $206.1 million in 2022, a decrease from net cash provided of $335.2 million in the prior year, largely due to the absence of proceeds from the issuance of senior notes[174] Inventory and Deliveries - For the year ended December 31, 2022, total new home deliveries decreased to 9,710 homes, down 3% from 9,982 homes in 2021[119] - The total number of unsold homes completed increased by 1,484% to 396 homes, while homes under construction rose by 241% to 1,063 homes[143] - The total inventories as of December 31, 2022, were approximately $3.516 billion, down from $3.761 billion in 2021, reflecting a decrease of 6.5%[221] - Total inventory impairments for the year ended December 31, 2022, amounted to $121.9 million, significantly higher than $1.6 million in 2021[128] - The average selling price of homes delivered increased to $575.3 thousand in 2022, a 12% increase from $511.2 thousand in 2021[119] Operational Challenges - The company experienced a cancellation rate above historical averages in the second half of 2022, prompting adjustments in pricing and incentives[109] - The cancellation rate increased to 25% in Q4 2022, up from 9% in Q4 2021, indicating a significant rise in cancellations as a percentage of homes in beginning backlog[141] - The company experienced extended construction cycle times due to permitting delays, supply chain disruptions, and labor shortages, impacting new home deliveries[121] Expenses and Costs - General and administrative expenses increased to $292.3 million in 2022, a rise of 18.8% from $246.0 million in 2021[130] - Marketing expenses slightly decreased to $103.3 million in 2022, down from $104.4 million in 2021[131] - Commissions expenses decreased to $140.7 million in 2022, compared to $143.5 million in 2021, reflecting changes in commission structure[131] - Inventory impairments totaled $121.9 million in 2022, contributing to a decrease in gross margin from home sales[115] - Gross margin from home sales decreased by 70 basis points year-over-year, from 23.1% in 2021 to 22.4% in 2022, primarily due to $121.9 million in inventory impairments[126] Assets and Liabilities - The company’s total assets increased to $5.363 billion in 2022, up from $4.964 billion in 2021, marking a growth of 8.0%[226] - The company’s total liabilities decreased to $2.271 billion in 2022 from $2.366 billion in 2021, a reduction of 4.0%[226] - The company had outstanding senior notes totaling $1.5 billion as of December 31, 2022, with future interest payments totaling $1.3 billion[154] Dividends and Shareholder Returns - The company paid dividends of $2.00 per share in 2022, an increase from $1.67 per share in 2021[169] - The company made dividend payments of $142,417 in 2022, compared to $118,529 in 2021, reflecting a 20.1% increase[234] - The company did not repurchase any shares of its common stock under the repurchase program during the year ended December 31, 2022[170] Mortgage and Financing - The average FICO score improved by 1% to 744 in 2022, compared to 740 in 2021[148] - The average combined loan-to-value (LTV) ratio was 81% in 2022, a decrease of 3% from 84% in 2021[148] - Total loan originations decreased by 6% to $5,876 million in 2022 from $6,247 million in 2021, while principal increased by 5% to $2,746,903 million[148] - The company has a total capacity of $300 million under the Mortgage Repurchase Facility as of December 31, 2022[165] - The company utilizes forward sales of mortgage-backed securities to hedge against interest rate fluctuations, with changes in fair value recorded in revenues[267]