M.D.C. HOLDINGS REPORTS RESULTS FOR THE THIRD QUARTER
AND FIRST NINE MONTHS OF 1991
DENVER, Nov. 14 /PRNewswire/ -- M.D.C. Holdings Inc. (NYSE and PSE: MDC), national home builder and mortgage banking company, today announced that its net income for the third quarter of 1991 was $.3 million, $.01 per share, as compared to $.8 million, $.04 per share, for the same period in 1990. The results for the third quarter of 1991 included a $5.3 million extraordinary after-tax gain in connection with the transfer of properties in satisfaction of certain non-recourse notes payable. Results of operations for the third quarter of 1990 included an extraordinary after-tax gain of $9.4 million from the Company's repurchase of $31 million principal amount of its senior subordinated and subordinated notes.
Net income for the nine months ended Sept. 30, 1991 decreased to $1.3 million, $.06 per share, as compared to $6.5 million, $.34 per share, during the same period in 1990. Results for the nine months ended Sept. 30, 1991 and 1990 included $8.9 million and $16.1 million, respectively, in extraordinary after-tax gains from the Company's repurchase of $20.85 million and $47.4 million, respectively, principal amount of its notes.
433 sales were recorded during the three months ended Sept. 30, 1991, a 49 percent increase over the 291 sales recorded in the comparable 1990 period. During the nine months ended Sept. 30, 1991, the Company recorded 1,538 sales, up 16 percent from the 1,331 sales recorded during the first nine months of 1990.
MDC closed 473 and 1,287 homes, respectively, during the three and nine months ended Sept. 30, 1991, as compared to 484 and 1,549 closings, respectively, during the comparable periods in 1990. At Sept. 30, 1991, the Company's backlog of residential units sold but not closed increased to 637 units having an approximate sales value of $117.2 million as compared to a backlog of 386 and 598 units, respectively, having an approximate sales value of $69.8 million and $113.9 million, respectively, at Dec. 31, 1990 and Sept. 30, 1990.
Revenues for the three and nine months ended Sept. 30, 1991 were $116.2 and $317.3 million, respectively, as compared to $123.7 and $403.6 million, respectively, during the same periods in 1990. The declines principally were due to the decrease in home closings as well as a reduction in the average selling price per home closed.
During the third quarter of 1991, MDC reduced its operating loss by 42 percent to $5.0 million from an operating loss of $8.7 million during the similar period in 1990. MDC's operating loss totalled $12.9 million and $9.7 million, respectively, during the nine months ended Sept. 30, 1991 and 1990, respectively.
The improvements in MDC's operations during the third quarter of 1991 as compared to the same period in 1990 was due principally to (i) higher management fee income due to increased REIT income earned by Asset Investors Corp., a New York Stock Exchange-listed real estate investment trust which is managed by a subsidiary of the Company; and (ii) decreased selling, general and administrative expenses resulting from the Company's downsizing and restructuring. Operating results for the third quarter of 1991 and 1990 were affected adversely by asset valuation reserves of $9 million and $12 million, respectively. The decline in the Company's operating performance during the first nine months of 1991 as compared to the same period in 1990 resulted primarily from declines in home closings and home gross profit margins.
Spencer I. Browne, President and Chief Operating Officer of MDC, said, "MDC's operations during the three and nine months ended Sept. 30, 1991 continued to be affected adversely by carrying costs associated with the inactive inventories of the Company's Colorado operations as well as weakness in the Virginia, Maryland, California and Arizona home building markets. However, we are optimistic that the continued strengthening of the Colorado market during 1991, improving sales in Virginia and Maryland and the decline in interest rates positively will impact the Company's operating results in future periods."
The Company's net income per share for the three and nine months ended Sept. 30, 1991 was based on 21.4 and 20.9 million, respectively, weighted average shares outstanding as compared to 19.1 million weighted average shares outstanding for both of the same periods in 1990.
M.D.C. HOLDINGS INC.
Summary of Financial Results
Nine Months Ended
Revenues $317,286,000 $403,573,000
Before extraordinary gains $(12,940,000) $ (9,650,000)
Extraordinary gains 14,262,000 16,124,000
Net Income $ 1,322,000 $ 6,474,000
Earnings (Loss) per Share
Before extraordinary gains $ (.62) $ (.51)
Extraordinary gains .68 .85
Net Income $ .06 $ .34
Weighted Average Shares
Outstanding 20,865,000 19,065,000
Three Months Ended
Revenues $116,209,000 $123,677,000
Before extraordinary gains $ (5,012,000) $ (8,691,000)
Extraordinary gains 5,330,000 9,444,000
Net Income $ 318,000 $ 753,000
Earnings (Loss) per Share
Before extraordinary gains $ (.23) $ (.46)
Extraordinary gains .24 .50
Net Income $ .01 $ .04
Weighted Average Shares
Outstanding 21,405,000 19,065,000
The results of operations for the three and nine months ended Sept. 30, 1991 and 1990 reflect extraordinary gains from MDC's repurchase of its senior subordinated and subordinated notes and from certain other debt extinguishments.
/CONTACT: William Kostka of William Kostka Associates, 303-623-8421, for MDC Holdings/
(MDC) CO: MDC Holdings Inc. ST: Colorado IN: SU: ERN SG -- DV003 -- 4320 11/14/91 10:06 EST