MDC(US:MDC)2024-01-30 21:26Homebuilding Performance - Homebuilding net orders increased by 42% in 2023 compared to the prior year, driven by improved consumer confidence and stabilized mortgage rates [147]. - Home sale revenues for 2023 were $4.52 billion, a 19% decrease from $5.59 billion in 2022, with a gross margin decline of 460 basis points to 17.8% [145][151]. - Homebuilding pretax income decreased by 35% to $450 million, primarily due to lower home sale revenues and gross margin declines [154]. - For the year ended December 31, 2023, total new home deliveries decreased by 15% to 8,228 homes compared to 9,710 homes in 2022 [1]. - The average selling price of homes delivered decreased by 5% to $549.4 thousand in 2023 from $575.3 thousand in 2022 [1]. - The average selling price of homes in the West segment decreased by 8% to $544.4 thousand in 2023, while the Mountain and East segments saw decreases of 22% and 26%, respectively [1]. - The company experienced a shift in closing mix towards more affordable products, impacting the average selling price negatively [160]. - For the year ended December 31, 2023, the total number of homes sold increased to 7,144, with a total dollar value of $3.98 billion, reflecting a 42% increase in net new orders compared to 5,044 homes sold in 2022 [174]. - The backlog at December 31, 2023, consisted of 1,890 homes valued at $1.16 billion, representing decreases of 36% in number and 34% in value from the previous year [179]. - The total unsold started homes increased to 3,048, a 109% rise from 1,459 in 2022, while sold homes under construction or completed decreased by 34% to 1,812 [180]. Financial Performance - The company reported a net income of $401 million, or $5.29 per diluted share, representing a 29% decrease from $562 million, or $7.67 per diluted share, in the previous year [151]. - Total cash and cash equivalents and marketable securities at year-end 2023 were $1.72 billion, with total liquidity of $2.77 billion and a debt-to-capital ratio of 30.7% [148]. - The financial services segment saw a pretax income increase of 11% to $76 million, attributed to reduced salary expenses and increased interest income [152]. - General and administrative expenses decreased by 30% to $203.9 million in 2023 from $292.3 million in 2022, attributed to lower stock-based compensation and reduced headcount [170]. - The company recorded an income tax provision of $125.1 million for 2023, with an effective tax rate of 23.8%, down from 26.0% in 2022 [2]. - The company paid dividends of $2.10 per share in 2023, an increase from $2.00 per share in 2022 [5]. - For the year ended December 31, 2023, net cash provided by operating activities was $561.6 million, a decrease from $905.6 million in the prior year, primarily driven by a decline in net income from $562.1 million to $401.0 million [209]. - The company recorded a net cash used in financing activities of $105,271 in 2023, an improvement from $206,125 in 2022 [268]. Inventory and Assets - Total homebuilding assets increased by 3% to $5.1 billion, with notable increases in the East segment due to more housing completed and under construction [156]. - The company’s total inventories as of December 31, 2023, were approximately $3.3 billion, down from $3.52 billion in 2022 [260]. - Total inventory impairments for the year ended December 31, 2023, were $29.7 million, significantly lower than $121.9 million in 2022 [168]. - The total carrying amount of senior notes as of December 31, 2023, was $1.48 billion, compared to $1.12 billion in 2022, indicating an increase of approximately 32.7% [339]. - As of December 31, 2023, the company reported total assets of approximately $5.63 billion, an increase from $5.36 billion in 2022 [260]. Market and Strategic Developments - A proposed merger is expected to close in the first half of 2024, pending stockholder and regulatory approvals [150]. - The company entered into a merger agreement on January 17, 2024, with SH Residential Holdings, LLC, indicating a strategic move for market expansion [272]. - The number of active subdivisions increased slightly to 226 in 2023, up from 225 in 2022, with a notable increase in the West segment [174]. - The company has not identified any variable interest entities (VIEs) for consolidation as of December 31, 2023 [288]. Mortgage and Financing Activities - Total loan originations decreased by 8% to 5,430 loans in 2023, with principal amounting to $2,448,426, down 11% from 2022 [1]. - The mix of mortgage loan origination shifted, with FHA loans increasing to 26%, a 13% rise, while conventional loans decreased to 55%, down 11% [1]. - The average interest rate for fixed-rate mortgage loans held for sale was 5.96% as of December 31, 2023 [242]. - HomeAmerican had $205.0 million in mortgage loans obligated for repurchase under the Mortgage Repurchase Facility as of December 31, 2023 [6]. - HomeAmerican's mortgage loans in process with interest rate lock commitments not yet closed totaled $229.2 million, with $227.9 million not yet committed to a mortgage purchaser [237].