M.D.C. Holdings, Inc. (NYSE: MDC) on Thursday morning announced a net loss for second quarter of $100.7 million (-$2.18 per diluted share), including pre-tax charges of $88.3 million for asset impairments and a $43.4 million increase in deferred tax asset valuation allowance.

Revenue dropped 42.5% to $411.9 million as closings fell 36% to 1,292 and average selling prices fell 13% to $295,700, all compared to last year's second quarter. The gross margin, the company said, was 11.6%.

Orders fell 51% to 959 homes, the net aggregate value of those homes fell 57% to $279,000 and the average selling price of new orders fell 12% to $290,900. The cancellation rate, defined by the company as the number of cancelled contracts during the period expressed as a percentage of total home orders, was 43%.

The company ended the second quarter with a backlog of 1,576 homes with an estimated sales value of $522.0 million, compared with a backlog of 4,134 homes with an estimated sales value of $1.48 billion at June 30, 2007.

M.D.C. ended the quarter with a cash-flow of $91.6 million, case on hand of$1.3 billion, no borrowings on its revolver and roughly $1 billion in long-term debt. It therefore has $2 billion in cash and borrowing capacity should it decide to go shopping.

"During the 2008 second quarter, our national economy continued to face a significant headwind, as evidenced by weakness in many homebuilding and general economic measures and a significant year-over-year decline in our own home order results," said Larry A. Mizel, MDC chairman and CEO. "We remain cautious and defensive in our actions, with our balance sheet remaining a top priority."

He added that during the second quarter, M.D.C. "continued to develop relationships with investors, banks and other homebuilders to identify opportunities to invest the substantial capital available to us."

Paris G. Reece III, MDC's EVP and CFO, pointed out that the company has now impaired approximately 70% of the 11,6000 lots owned at the end of the second quarter. He added, "By selling 1,100 lots during the first half of the year, primarily in our West segment, we not only generated more than $40 million in proceeds, but we triggered related taxable losses of more than $90 million. These tax losses furthered our efforts to maximize the tax refund we expect to receive early next year, which could be as much as $164 million."

Michael Rehaut of J.P. Morgan said in a research note that the results were in line with what he expected. He noted the strong cash position of the company, but also noted the sharp decline in closings and orders. ""We believe this reaffirms today's extremely weak demand environment, which should drive further home price deflation and charges, as well as a continued core operating loss position." He also wrote, "We continue to believe material land impairment charges remain for MDC and the overall industry."