MDC(US:MDC)2024-05-06 18:11Financial Performance - For the three months ended March 31, 2024, the company reported net income of $95.8 million, or $1.25 per diluted share, representing a 19% increase from $80.7 million, or $1.08 per diluted share, in the same period last year[115]. - Homebuilding pretax income increased by 19% year-over-year to $108.6 million, driven by a 30% increase in home sale revenues and a 70 basis point increase in gross margin from home sales[117]. - Gross home sale revenues for the first quarter of 2024 reached $1.325 billion, a 30% increase compared to $1.020 billion in the prior year quarter[120]. - The financial services segment's pretax income decreased by 2% year-over-year to $17.7 million, impacted by increased salary-related expenses[115]. - Financial services revenues grew by 6% to $31.4 million in Q1 2024, driven by a 7% increase in mortgage operations revenue[139]. Market Conditions - Net orders increased by 40% and gross sales increased by 15% in the first quarter of 2024 compared to the prior year quarter, indicating improved market conditions[110]. - The cancellation rate as a percentage of gross sales decreased to 15% in Q1 2024 from 30% in Q1 2023, indicating improved demand[135]. - The West segment saw a 44% increase in home sale revenues, contributing significantly to the overall growth in homebuilding income[118]. Inventory and Construction - The number of homes in backlog decreased by 32% to 1,965 homes with a total value of $1.19 billion as of March 31, 2024, down from $1.66 billion in 2023[136]. - Total unsold started homes increased by 126% to 3,465 as of March 31, 2024, compared to 1,532 in the same period last year[137]. - Homes completed or under construction increased by 29% to 5,903 as of March 31, 2024, compared to 4,585 in the previous year[137]. - Total inventory impairments decreased to $5.9 million in Q1 2024 from $7.8 million in Q1 2023, reflecting a reduction in impaired subdivisions from 3 to 1[125]. Expenses and Cash Flow - General and administrative expenses increased by 55% to $66.3 million in Q1 2024, representing 5.0% of home sale revenues, up from 4.2% in Q1 2023[127]. - Total selling, general and administrative expenses rose to $134.2 million in Q1 2024, accounting for 10.1% of home sale revenues, compared to 9.4% in Q1 2023[127]. - For the three months ended March 31, 2024, net cash provided by operating activities was $177.5 million, down from $426.2 million in the prior year period[171]. - Net cash used in investing activities was $3.0 million, significantly lower than $244.8 million in the prior year, primarily due to no purchases or maturities of marketable securities in 2024[172]. - Net cash used in financing activities decreased to $73.2 million from $93.5 million in the prior year, driven by reduced payments on the mortgage repurchase facility[173]. Debt and Liquidity - The company ended the quarter with total cash and cash equivalents and marketable securities of $1.82 billion, and total liquidity of $2.90 billion, with a debt-to-capital ratio of 30.5%[113]. - As of March 31, 2024, the company had outstanding senior notes totaling $1.50 billion, with future interest payments amounting to $1.22 billion[150]. - The company has a Revolving Credit Facility with a commitment of $1.2 billion, with availability of approximately $1.08 billion as of March 31, 2024[162]. - The Mortgage Repurchase Facility had a total capacity of $200 million, with $198.7 million of mortgage loans obligated for repurchase as of March 31, 2024[164]. Shareholder Returns - Cash dividends paid increased to $0.55 per share for the three months ended March 31, 2024, compared to $0.50 per share in the same period last year[168]. - The company was authorized to repurchase up to 4.0 million shares of common stock but did not repurchase any shares during the three months ended March 31, 2024[169]. Acquisition - On April 19, 2024, the company completed its acquisition by Sekisui House, becoming an indirect, wholly-owned subsidiary[114].