MDC Holdings, the builder that operates the Richmond American Homes brand, reported a $636.9 million net loss, or $13.94 per share, for the full year in 2007, and a net loss of $281.1 million, or $6.14 per share, for the fourth quarter.
Several other major public builders have also reported quarterly losses in the past week, with Standard Pacific Corp. announcing a $767.3 million net loss for the full year in 2007 and a $449.9 million fourth-quarter net loss; D.R. Horton announcing a $128.8 million net loss; and Toll Brothers announcing a 22 percent year-over-year drop in revenues.
MDC reported an order cancellation rate of 65 percent in the fourth quarter, and a cancellation rate of 48 percent for the full year in 2007. That compares with a cancellation rate of 57 percent in fourth-quarter 2006 and 43 percent for the full year in 2006.
The company had pre-tax charges of $726.6 million for asset impairments and $23.4 million for write-offs of deposits and pre-acquisition costs.
In 2006, MDC had net income of $214.3 million for the full year, or $4.66 per share. The company’s stock price closed regular trading at $44.78 on Monday, up 47 cents compared to the previous day’s closing price.
The company reported $257 million of cash flow from operations, and quarter-end cash of $1 billion with ending cash and available borrowing capacity of $2.25 billion.
Total revenue in the fourth quarter was $784.8 million in 2007, down from $1.34 billion in 2006. The company reported 2,200 homes closed and an average selling price of $325,100 in the fourth quarter, compared with 3,594 home closings in fourth-quarter 2006. The company had net orders for 748 homes with an estimated value of $187 million in fourth-quarter 2007.
For the full year in 2007, the company reported $592.6 million in cash flow from operations, 8,195 homes closed at an average selling price of $337,500, and net orders for 6,504 homes with an estimated value of $2.11 billion.
In its earnings report, Larry A. Mizel, MDC’s chairman and CEO, said the company had a “strong financial position at the end of 2007” and reduced its supply of lots owned by 20 percent in the fourth quarter, “which contributed significantly to the 9,000-lot decrease we achieved during the year.”
