Jennifer Shubinski

Tue, Jan 13, 2004 (10:50 a.m.)

M.D.C. Holdings Inc. of Denver, which builds under the name Richmond American Homes in Las Vegas, Monday reported strong year-end results, attributing the improvement to an increase in home closings and a greater profit margin.

M.D.C. increased its presence in the Las Vegas area, boosting the number of lots owned to 5,359 (excluding homes under construction) for the year ended Dec. 31, from 4,391 in 2002.

The number of back-logged homes in the Southern Nevada area increased 153 percent to 886 M.D.C. homes waiting to be constructed.

M.D.C. reported a profit of $67 million, or $2.18 per share for the fourth quarter ended Dec. 31, up from $57 million or $1.90 in the year-ago quarter.

Revenue grew 12 percent to $862 million.

Expansions into six new markets in 2003, and continued growth in Salt Lake City and the Dallas/Fort Worth markets that the company entered in 2002, allowed M.D.C. to increase its active subdivision count and its inventory of controlled lots. The expansions, along with low interest rates and strong demand, contributed to a 28 percent increase in home orders, the company reported.

Results also improved because of higher prices and profit margins.

"The strength of our home gross margins this quarter reflects our ability to raise home prices in most of our markets over the last several quarters, along with the success of corporate initiatives aimed at reducing construction costs," Paris G. Reece III, M.D.C's executive vice president and chief financial officer, said in a statement. "We benefited from particularly strong margins in a number of relatively mature subdivisions in California, Las Vegas, Virginia and Maryland."

M.D.C. home orders in Southern Nevada more than doubled to 2,595 for the year ended Dec. 31 up from 1,260 in 2002. The number of homes that closed escrow also increased to 2,059 for the year ended Dec. 31, up from 1,204 for the year ended 2002. M.D.C. ended the year with 17 active local subdivisions at the end of 2003, from 18 active subdivisions at year-end 2002.

The average selling price in Southern Nevada for a new Richmond American Home was $186,300 at year-ended 2003, down slightly from $188,800 in 2002. The average selling price in the fourth quarter was stronger, at $190,100, up from $186,100 in the year-ago quarter.

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