M.D.C. Holdings, Inc. (NYSE:MDC) Q3 2023 Earnings Conference Call October 26, 2023 12:30 PM ET

Company Participants

Derek Kimmerle - Vice President and Chief Accounting Officer

Larry Mizel - Executive Chairman

David Mandarich - Chief Executive Officer

Bob Martin - Chief Financial Officer

Conference Call Participants

Stephen Kim - Evercore

Andrew Azzi - JPMorgan

Alan Ratner - Zelman & Associates

Truman Patterson - Wolfe Research

Ken Zener - Seaport

Alex Barron - Housing Research Center

Operator

Hello and welcome. Please hold for Mr. Derek Kimmerle, VP and Chief Accounting Officer. Please go ahead.

Derek Kimmerle

Thank you. Good morning, ladies and gentlemen and welcome to M.D.C. Holdings’ 2023 third quarter earnings conference call. On the call with me today, I have Larry Mizel, our Executive Chairman; David Mandarich, Chief Executive Officer; and Bob Martin, Chief Financial Officer. [Operator Instructions] Please note that this conference is being recorded and will be available for replay. For information on how to access the replay, please visit our website at mdcholdings.com.

Before turning the call over to Larry and David, it should be noted that certain statements made during this conference call, including those related to M.D.C.’s business, financial condition, results of operation, cash flows, strategies and prospects and responses to questions may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties and other factors that may cause the company’s actual results, performance or achievements to be materially different from the results, performance or achievements expressed or implied by the forward-looking statements. These and other factors that could impact the company’s actual performance are set forth in the company’s third quarter 2023 Form 10-Q, which is expected to be filed with the SEC today. It should also be noted that SEC Regulation G requires that certain information accompany the use of non-GAAP financial measures. Any information required by Regulation G is posted on our website with our webcast slides.

And now, I will turn the call over to Mr. Mizel for his opening remarks.

Larry Mizel

Thank you for joining us today. As we go over our results for the third quarter of 2023 and provide an update on our company’s outlook, M.D.C. generated strong profitability in the third quarter, posting net income of $107 million or $1.40 per diluted share. We closed 1,968 homes at an average sales price of 552,000, resulting in home sales revenues of $1.1 billion. We expanded our gross margin from home sales by 280 basis points on a sequential basis to 19.2%. We also ended the quarter with $1.8 billion in cash and marketable securities, which gives us financial strength to make significant investments in our business and pay our industry-leading dividend of $2.20 per share on an annualized basis.