Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

_________________________________

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of Earliest Event Reported): January 30, 2024

M.D.C. Holdings, Inc.


			(Exact name of registrant as specified in its charter)


Delaware	1-8951	84-0622967
(State or other jurisdiction of incorporation)	(Commission file number)	(I.R.S. employer identification no.)

4350 South Monaco Street, Suite 500, Denver, Colorado 80237


			(Address of principal executive offices) (Zip code)

Registrant’s telephone number, including area code: (303) 773-1100

Not Applicable


			(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $.01 par value

MDC

New York Stock Exchange

6% Senior Notes due January 2043

MDC 43

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On January 30, 2024, M.D.C. Holdings, Inc. issued a press release reporting its results of operations for the fourth quarter and full year ended December 31, 2023. A copy of the press release is furnished as Exhibit 99.1 to this Current Report.

The information in Item 2.02 of this Current Report, including the press release, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act except as expressly set forth by specific reference in such filing.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits


Exhibit Number						Description

99.1						Press Release dated January 30, 2024

104						Cover Page Interactive Data file (formatted in Inline XBRL)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

_________________________________

M.D.C. HOLDINGS, INC.

Dated:

January 30, 2024

By:

/s/ Joseph H. Fretz

Joseph H. Fretz

Vice President, Secretary and Corporate Counsel

Exhibit 99.1

News Release

M.D.C. HOLDINGS ANNOUNCES 2023 FOURTH QUARTER AND FULL YEAR RESULTS

DENVER, COLORADO, Tuesday, January 30, 2024. M.D.C. Holdings, Inc. (NYSE: MDC), announced results for the quarter and full year ended December 31, 2023. As previously announced on January 18, 2024, MDC has entered into a definitive agreement to be acquired by a wholly-owned subsidiary of Sekisui House in an all-cash transaction (the "Merger"). Consummation of the Merger is subject to shareholder approval, regulatory approval and completion of other customary closing conditions.

About MDC

M.D.C. Holdings, Inc. was founded in 1972. MDC's homebuilding subsidiaries, which operate under the name Richmond American Homes, have helped more than 240,000 homebuyers achieve the American Dream since 1977. One of the largest homebuilders in the nation, MDC is committed to quality and value that is reflected in each home its subsidiaries build. The Richmond American companies have operations in Alabama, Arizona, California, Colorado, Florida, Idaho, Maryland, Nevada, New Mexico, Oregon, Pennsylvania, Tennessee, Texas, Utah, Virginia and Washington. Mortgage lending, insurance and title services are offered by the following MDC subsidiaries, respectively: HomeAmerican Mortgage Corporation, American Home Insurance Agency, Inc. and American Home Title and Escrow Company. M.D.C. Holdings, Inc. stock is traded on the New York Stock Exchange under the symbol “MDC.” For more information, visit www.mdcholdings.com.

Forward-Looking Statements

Any statements regarding our business, financial condition, results of operation, cash flows, strategies and prospects, may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of MDC to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among other things, (1) general economic conditions, changes in consumer confidence, inflation or deflation and employment levels; (2) changes in business conditions experienced by MDC, including cancellation rates, net home orders, home gross margins, land and home values and subdivision counts; (3) changes in interest rates, mortgage lending programs and the availability of credit; (4) changes in the market value of MDC’s investments in marketable securities; (5) uncertainty in the mortgage lending industry, including repurchase requirements associated with HomeAmerican Mortgage Corporation’s sale of mortgage loans (6) the relative stability of debt and equity markets; (7) competition; (8) the availability and cost of land and other raw materials used by MDC in its homebuilding operations; (9) the availability and cost of performance bonds and insurance covering risks associated with our business; (10) shortages and the cost of labor; (11) weather related slowdowns and natural disasters; (12) slow growth initiatives; (13) building moratoria; (14) governmental regulation, including orders addressing the COVID-19 pandemic, the interpretation of tax, labor and environmental laws; (15) terrorist acts and other acts of war; (16) changes in energy prices; and (17) other factors over which MDC has little or no control. Additional information about the risks and uncertainties applicable to MDC's business is contained in MDC's Form 10-K for the year ended December 31, 2023, which is scheduled to be filed with the Securities and Exchange Commission today. All forward-looking statements are made as of their date, and the risk that actual results will differ materially from expectations expressed will increase with the passage of time. MDC undertakes no duty to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. However, any further disclosures made on related subjects in our subsequent filings, releases or webcasts should be consulted.

Contact: Derek R. Kimmerle

Vice President and Chief Accounting Officer

1-866-424-3395

IR@mdch.com

M.D.C. HOLDINGS, INC.

Consolidated Statements of Operations and Comprehensive Income

(Unaudited)


	Three Months Ended December 31,				Year Ended December 31,
	2023		2022		2023		2022

	(Dollars in thousands, except per share amounts)
Homebuilding:
Home sale revenues	$	1,309,760	$	1,487,279	$	4,520,296	$	5,586,264
Home cost of sales	(1,062,125)		(1,170,989)		(3,684,487)		(4,214,379)
Inventory impairments	(2,200)		(92,800)		(29,700)		(121,875)
Total cost of sales	(1,064,325)		(1,263,789)		(3,714,187)		(4,336,254)
Gross profit	245,435		223,490		806,109		1,250,010
Selling, general and administrative expenses	(126,862)		(131,797)		(429,894)		(536,395)
Interest and other income	21,755		7,046		73,567		10,843
Other income (expense), net	(637)		(4,258)		350		(32,991)
Homebuilding pretax income	139,691		94,481		450,132		691,467

Financial Services:
Revenues	36,696		32,262		122,570		131,723
Expenses	(16,712)		(16,887)		(62,942)		(71,327)
Other income (expense), net	4,603		3,364		16,345		7,991
Financial services pretax income	24,587		18,739		75,973		68,387

Income before income taxes	164,278		113,220		526,105		759,854
Provision for income taxes	(44,771)		(33,444)		(125,100)		(197,715)
Net income	$	119,507	$	79,776	$	401,005	$	562,139

Other comprehensive income net of tax:
Unrealized gain related to available-for-sale debt securities	$	(40)	$	—	$	51	$	—
Other comprehensive income	(40)		—		51		—
Comprehensive income	$	119,467	$	79,776	$	401,056	$	562,139

Earnings per share:
Basic	$	1.60	$	1.11	$	5.42	$	7.87
Diluted	$	1.56	$	1.08	$	5.29	$	7.67

Weighted average common shares outstanding:
Basic	74,216,586		71,646,237		73,505,508		71,035,558
Diluted	76,126,163		73,179,135		75,357,965		72,943,844

Dividends declared per share	$	0.55	$	0.50	$	2.10	$	2.00

M.D.C. HOLDINGS, INC.

Consolidated Balance Sheets

(Unaudited)


	December 31, 2023		December 31, 2022

	(Dollars in thousands, except per share amounts)
ASSETS
Homebuilding:
Cash and cash equivalents	$	1,475,964	$	696,075
Restricted cash	4,094		3,143
Marketable securities	—		443,712
Trade and other receivables	119,004		116,364
Inventories:
Housing completed or under construction	1,881,268		1,722,061
Land and land under development	1,419,778		1,793,718
Total inventories	3,301,046		3,515,779
Property and equipment, net	82,218		63,730
Deferred tax assets, net	38,830		49,252
Prepaids and other assets	76,036		70,007
Total homebuilding assets	5,097,192		4,958,062
Financial Services:
Cash and cash equivalents	162,839		17,877
Marketable securities	78,250		117,388
Mortgage loans held-for-sale, net	258,212		229,513
Other assets	34,592		40,432
Total financial services assets	533,893		405,210
Total Assets	$	5,631,085	$	5,363,272
LIABILITIES AND EQUITY
Homebuilding:
Accounts payable	$	114,852	$	109,218
Accrued and other liabilities	326,478		383,406
Revolving credit facility	10,000		10,000
Senior notes, net	1,483,404		1,482,576
Total homebuilding liabilities	1,934,734		1,985,200
Financial Services:
Accounts payable and accrued liabilities	113,485		110,536
Mortgage repurchase facility	204,981		175,752
Total financial services liabilities	318,466		286,288
Total Liabilities	2,253,200		2,271,488
Stockholders' Equity
Preferred stock, $0.01 par value; 25,000,000 shares authorized; none issued or outstanding	—		—
Common stock, $0.01 par value; 250,000,000 shares authorized; 74,661,479 and 72,585,596 issued and outstanding at December 31, 2023 and December 31, 2022, respectively	747		726
Additional paid-in-capital	1,824,434		1,784,173
Retained earnings	1,552,653		1,306,885
Accumulated other comprehensive income	51		—
Total Stockholders' Equity	3,377,885		3,091,784
Total Liabilities and Stockholders' Equity	$	5,631,085	$	5,363,272

M.D.C. HOLDINGS, INC.

Consolidated Statement of Cash Flows

(Unaudited)


	Three Months Ended December 31,				Year Ended December 31,
	2023		2022		2023		2022

	(Dollars in thousands)
Operating Activities:
Net income	$	119,507	$	79,776	$	401,005	$	562,139
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Stock-based compensation expense	9,110		10,637		23,468		60,985
Depreciation and amortization	7,683		7,088		25,553		27,751
Inventory impairments	2,200		92,800		29,700		121,875
Project abandonment costs	918		4,371		(45)		33,129

Amortization of discount of marketable debt securities	(4,809)		(3,208)		(29,673)		(4,290)

Deferred income tax expense	7,800		(27,130)		10,408		(31,310)
Net changes in assets and liabilities:
Trade and other receivables	(22,993)		(2,463)		21,986		(21,784)
Mortgage loans held-for-sale, net	(93,958)		(38,680)		(28,699)		53,016
Housing completed or under construction	39,035		505,348		(163,877)		186,265
Land and land under development	(106,658)		(75,662)		349,783		(95,402)
Prepaids and other assets	(789)		39,786		(3,886)		31,736
Accounts payable and accrued liabilities	(18,565)		(30,970)		(74,093)		(18,464)
Net cash provided by (used in) operating activities	(61,519)		561,693		561,630		905,646

Investing Activities:
Purchases of marketable securities	(77,979)		(365,684)		(1,166,412)		(656,810)
Maturities of marketable securities	430,000		100,000		1,679,000		100,000

Purchases of property and equipment	(28,265)		(7,646)		(43,145)		(29,075)
Net cash provided by (used in) investing activities	323,756		(273,330)		469,443		(585,885)

Financing Activities:
Advances on mortgage repurchase facility, net	59,511		(20,462)		29,229		(80,548)


Dividend payments	(41,065)		(35,632)		(155,237)		(142,417)
Payments of deferred debt issuance costs	(36)		—		(36)		—
Issuance of shares under stock-based compensation programs, net	(39)		28,385		20,773		16,840
Net cash provided by (used in) financing activities	18,371		(27,709)		(105,271)		(206,125)

Net increase in cash, cash equivalents and restricted cash	280,608		260,654		925,802		113,636
Cash, cash equivalents and restricted cash:
Beginning of period	1,362,289		456,441		717,095		603,459
End of period	$	1,642,897	$	717,095	$	1,642,897	$	717,095

Reconciliation of cash, cash equivalents and restricted cash:
Homebuilding:
Cash and cash equivalents	$	1,475,964	$	696,075	$	1,475,964	$	696,075
Restricted cash	4,094		3,143		4,094		3,143
Financial Services:
Cash and cash equivalents	162,839		17,877		162,839		17,877
Total cash, cash equivalents and restricted cash	$	1,642,897	$	717,095	$	1,642,897	$	717,095

New Home Deliveries


	Three Months Ended December 31,
	2023					2022					% Change
	Homes	Home Sale Revenues		Average Price		Homes	Home Sale Revenues		Average Price		Homes		Home Sale Revenues		Average Price

	(Dollars in thousands)
West	1,397	$	778,410	$	557.2	1,308	$	756,109	$	578.1	7	%	3	%	(4)	%
Mountain	561	336,220		599.3		756	492,850		651.9		(26)	%	(32)	%	(8)	%
East	442	195,130		441.5		490	238,320		486.4		(10)	%	(18)	%	(9)	%
Total	2,400	$	1,309,760	$	545.7	2,554	$	1,487,279	$	582.3	(6)	%	(12)	%	(6)	%


	Year Ended December 31,
	2023					2022					% Change
	Homes	Home Sale Revenues		Average Price		Homes	Home Sale Revenues		Average Price		Homes		Home Sale Revenues		Average Price

	(Dollars in thousands)
West	4,821	$	2,624,373	$	544.4	5,234	$	3,024,056	$	577.8	(8)	%	(13)	%	(6)	%
Mountain	2,028	1,267,586		625.0		2,616	1,689,376		645.8		(22)	%	(25)	%	(3)	%
East	1,379	628,337		455.6		1,860	872,832		469.3		(26)	%	(28)	%	(3)	%
Total	8,228	$	4,520,296	$	549.4	9,710	$	5,586,264	$	575.3	(15)	%	(19)	%	(5)	%

Net New Orders


	Three Months Ended December 31,
	2023						2022						% Change
	Homes	Dollar Value		Average Price 1		Monthly Absorption Rate 2	Homes	Dollar Value		Average Price 1		Monthly Absorption Rate 2	Homes		Dollar Value		Average Price		Monthly Absorption Rate

	(Dollars in thousands)
West	827	$	457,532	$	553.2	1.96	155	$	67,710	$	436.8	0.39	434	%	576	%	27	%	406	%
Mountain	372	219,867		591.0		2.29	(37)	(25,924)		700.6		(0.24)	N/A		N/A		N/A		N/A
East	316	138,770		439.1		2.79	72	32,649		453.5		0.64	339	%	325	%	(3)	%	333	%
Total	1,515	$	816,169	$	538.7	2.17	190	$	74,435	$	391.8	0.29	697	%	996	%	38	%	660	%

1 Gross order average selling price for the three months ended December 31, 2023 decreased approximately 2% year-over-year to $543,000.


	Year Ended December 31,
	2023						2022						% Change
	Homes	Dollar Value		Average Price		Monthly Absorption Rate 2	Homes	Dollar Value		Average Price		Monthly Absorption Rate 2	Homes		Dollar Value		Average Price		Monthly Absorption Rate

	(Dollars in thousands)
West	4,202	$	2,399,987	$	571.2	2.51	2,909	$	1,735,202	$	596.5	2.01	44	%	38	%	(4)	%	25	%
Mountain	1,657	1,004,360		606.1		2.50	1,157	788,734		681.7		1.85	43	%	27	%	(11)	%	35	%
East	1,285	578,427		450.1		2.85	978	489,946		501.0		2.25	31	%	18	%	(10)	%	27	%
Total	7,144	$	3,982,774	$	557.5	2.57	5,044	$	3,013,882	$	597.5	2.02	42	%	32	%	(7)	%	27	%

2 Calculated as total net new orders in period ÷ average active communities during period ÷ number of months in period

Active Subdivisions


					Average Active Subdivisions
	Active Subdivisions				Three Months Ended				Year Ended
	December 31,		%		December 31,		%		December 31,		%
	2023	2022	Change		2023	2022	Change		2023	2022	Change
West	138	134	3	%	141	133	5	%	140	120	17	%
Mountain	53	53	—	%	54	51	6	%	55	52	6	%
East	35	38	(8)	%	38	37	1	%	38	36	6	%
Total	226	225	—	%	233	222	5	%	233	208	12	%

Backlog


	December 31,
	2023					2022					% Change
	Homes	Dollar Value		Average Price		Homes	Dollar Value		Average Price		Homes		Dollar Value		Average Price

	(Dollars in thousands)
West	1,272	$	789,317	$	620.5	1,891	$	1,049,805	$	555.2	(33)	%	(25)	%	12	%
Mountain	344	237,154		689.4		715	515,460		720.9		(52)	%	(54)	%	(4)	%
East	274	130,524		476.4		368	187,629		509.9		(26)	%	(30)	%	(7)	%
Total	1,890	$	1,156,995	$	612.2	2,974	$	1,752,894	$	589.4	(36)	%	(34)	%	4	%

Homes Completed or Under Construction (WIP lots)


	December 31,		%
	2023	2022	Change
Unsold:
Completed	339	396	(14)	%
Under construction	2,709	1,063	155	%
Total unsold started homes	3,048	1,459	109	%
Sold homes under construction or completed	1,812	2,756	(34)	%
Model homes under construction or completed	542	555	(2)	%
Total homes completed or under construction	5,402	4,770	13	%

Lots Owned and Optioned (including homes completed or under construction)


	December 31, 2023			December 31, 2022
	Lots Owned	Lots Optioned	Total	Lots Owned	Lots Optioned	Total	Total % Change
West	9,957	1,186	11,143	12,667	687	13,354	(17)	%
Mountain	5,038	1,088	6,126	5,398	1,561	6,959	(12)	%
East	3,004	2,142	5,146	3,534	1,455	4,989	3	%
Total	17,999	4,416	22,415	21,599	3,703	25,302	(11)	%

Selling, General and Administrative Expenses


	Three Months Ended December 31,								Year Ended December 31,
	2023			2022			Change		2023			2022			Change

	(Dollars in thousands)
General and administrative expenses	$	62,665		$	66,614		$	(3,949)	$	203,878		$	292,349		$	(88,471)
General and administrative expenses as a percentage of home sale revenues	4.8		%	4.5		%	30 bps		4.5		%	5.2		%	-70 bps
Marketing expenses	$	26,199		$	25,308		$	891	$	96,807		$	103,330		$	(6,523)
Marketing expenses as a percentage of home sale revenues	2.0		%	1.7		%	30 bps		2.1		%	1.8		%	30 bps
Commissions expenses	$	37,998		$	39,875		$	(1,877)	$	129,209		$	140,716		$	(11,507)
Commissions expenses as a percentage of home sale revenues	2.9		%	2.7		%	20 bps		2.9		%	2.5		%	40 bps
Total selling, general and administrative expenses	$	126,862		$	131,797		$	(4,935)	$	429,894		$	536,395		$	(106,501)
Total selling, general and administrative expenses as a percentage of home sale revenues	9.7		%	8.9		%	80 bps		9.5		%	9.6		%	-10 bps

Capitalized Interest


	Three Months Ended December 31,				Year Ended December 31,
	2023		2022		2023		2022

	(Dollars in thousands)
Homebuilding interest incurred	$	17,515	$	17,419	$	69,901	$	69,450
Less: Interest capitalized	(17,515)		(17,419)		(69,901)		(69,450)
Homebuilding interest expensed	$	—	$	—	$	—	$	—

Interest capitalized, beginning of period	$	65,428	$	63,583	$	59,921	$	58,054
Plus: Interest capitalized during period	17,515		17,419		69,901		69,450
Less: Previously capitalized interest included in home and land cost of sales	(18,284)		(21,081)		(65,163)		(67,583)
Interest capitalized, end of period	$	64,659	$	59,921	$	64,659	$	59,921

Cover	Jan. 30, 2024
Document Information [Line Items]
Document Type	8-K
Document Period End Date	Jan. 30, 2024
Entity Registrant Name	M.D.C. Holdings, Inc.
Entity Incorporation, State or Country Code	DE
Entity File Number	1-8951
Entity Tax Identification Number	84-0622967
Entity Address, Address Line One	4350 South Monaco Street
Entity Address, Address Line Two	Suite 500
Entity Address, City or Town	Denver
Entity Address, State or Province	CO
Entity Address, Postal Zip Code	80237
City Area Code	303
Local Phone Number	773-1100
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Entity Central Index Key	0000773141
Amendment Flag	false
Common Stock [Member]
Document Information [Line Items]
Title of 12(b) Security	Common Stock, $.01 par value
Trading Symbol	MDC
Security Exchange Name	NYSE
Senior Notes, 6%, Due January 2043 [Member]
Document Information [Line Items]
Title of 12(b) Security	6% Senior Notes due January 2043
Trading Symbol	MDC 43
Security Exchange Name	NYSE