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Wed. 27 Apr 2022, 8:30am ET Benzinga Earnings, Press Releases, Real Estate

COLUMBUS, Ohio, April 27, 2022 /PRNewswire/ -- M/I Homes, Inc. (NYSE:MHO) announced results for the three months ended March 31, 2022.

2022 First Quarter Highlights:

  • Revenue increased 4% to $860.8 million, a first quarter record
  • Pre-tax income increased 11% to $122.3 million, a first quarter record
  • Net income, a first quarter record, increased 8% to $91.8 million ($3.16 per diluted share) from 2021's $84.9 million ($2.85 per diluted share)
  • Homes delivered decreased 10% to 1,823 and average sales price increased 16% to $457,000
  • New contracts decreased 19% to 2,514 contracts
  • Backlog units increased 1% to 5,526, an all-time quarterly record
  • Backlog sales value increased 17% to $2.8 billion, an all-time quarterly record

For the first quarter of 2022, the Company reported pre-tax income of $122.3 million and net income of $91.8 million, or $3.16 per diluted share.  This compares to pre-tax income of $110.3 million and net income of $84.9 million, or $2.85 per diluted share, for the first quarter of 2021.

Homes delivered in 2022's first quarter decreased 10% to 1,823 homes.  This compares to 2,019 homes delivered in 2021's first quarter.  New contracts for the first quarter of 2022 decreased 19% over 2021's 3,109 new contracts.  Homes in backlog at March 31, 2022 had a total sales value of $2.8 billion, a 17% increase from a year ago and an all-time quarterly record. Backlog units at March 31, 2022 increased 1% to an all-time quarterly record 5,526 homes, with an average sales price of $505,000.  At March 31, 2021, backlog sales value was $2.4 billion, with backlog units of 5,479 and an average sales price of $433,000.  M/I Homes had 176 active communities at March 31, 2022 compared to 187 communities at March 31, 2021.  The Company's cancellation rate was 7% in both the first quarter of 2022 and 2021.

Robert H. Schottenstein, Chief Executive Officer and President, commented, "We had strong first quarter results highlighted by record levels of revenue, income and quarter-end backlog.  Our revenue increased 4% to $861 million, pre-tax income and diluted earnings per share each improved 11% to $122 million and $3.16 per share.  We achieved these record first quarter results due to a 16% increase in our average closing price, a 40 basis point improvement in our gross margin to 24.8% and a 50 basis point improvement in our overhead expense ratio. Our return on equity remained strong at 26%. We are particularly pleased with these results given the unprecedented labor challenges and supply chain issues that impacted our deliveries.  In addition, despite a 6% decline in community count and limiting sales in most of our communities, we achieved record backlog units and backlog sales value, with sales value improving 17% from a year ago."

Mr. Schottenstein continued, "We ended the quarter with record shareholders' equity of $1.7 billion, an increase of 26% from 2021, book value per share of $60, cash of $219 million, no borrowings on our $550 million credit facility and a homebuilding debt to capital ratio of 29%.  During the quarter, we also repurchased $15 million of our common shares. Demand for new homes remains strong despite the increase in interest rates.  Looking ahead, given our record backlog and strong backlog margins, along with a record number of new community openings planned this year, we are positioned to achieve another year of strong results in 2022."

The Company will broadcast live its earnings conference call today at 4:00 p.m. Eastern Time.  To listen to the call live, log on to the M/I Homes' website at mihomes.com, click on the "Investors" section of the site, and select "Listen to the Conference Call."  A replay of the call will continue to be available on our website through April 2023.

M/I Homes, Inc. is one of the nation's leading homebuilders of single-family homes.  The Company has homebuilding operations in Columbus and Cincinnati, Ohio; Indianapolis, Indiana; Chicago, Illinois; Minneapolis/St. Paul, Minnesota; Detroit, Michigan; Tampa, Sarasota and Orlando, Florida; Austin, Dallas/Fort Worth, Houston and San Antonio, Texas; Charlotte and Raleigh, North Carolina and Nashville, Tennessee.

Certain statements in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Words such as "expects," "anticipates," "targets," "envisions", "goals," "projects," "intends," "plans," "believes," "seeks," "estimates," variations of such words and similar expressions are intended to identify such forward-looking statements.  These statements involve a number of risks and uncertainties.  Any forward-looking statements that we make herein and in any future reports and statements are not guarantees of future performance, and actual results may differ materially from those in such forward-looking statements as a result of various factors, including, without limitation, factors relating to the economic environment, interest rates, availability of resources, competition, market concentration, land development activities, construction defects, product liability and warranty claims and various governmental rules and regulations, as more fully discussed in the "Risk Factors" section of the Company's Annual Report on Form 10-K for the year ended December 31, 2021, as the same may be updated from time to time in our subsequent filings with the Securities and Exchange Commission.  All forward-looking statements made in this press release are made as of the date hereof, and the risk that actual results will differ materially from expectations expressed herein will increase with the passage of time.  We undertake no duty to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.  However, any further disclosures made on related subjects in our subsequent filings, releases or presentations should be consulted.

 

 

M/I Homes, Inc. and Subsidiaries

Summary Statement of Income (unaudited)

(Dollars and shares in thousands, except per share amounts)





Three Months Ended



March 31,



2022



2021

New contracts

2,514



3,109

Average community count

176



195

Cancellation rate

7%



7%

Backlog units

5,526



5,479

Backlog sales value

$  2,788,234



$  2,373,828

Homes delivered

1,823



2,019

Average home closing price

$            457



$            395









Homebuilding revenue:







   Housing revenue

$     833,163



$     798,279

   Land revenue

3,537



848

Total homebuilding revenue

$     836,700



$     799,127









Financial services revenue

24,111



29,649

Total revenue

$     860,811



$     828,776









Cost of sales - operations

647,702



626,585

Gross margin

$     213,109



$     202,191

General and administrative expense

48,783



45,205

Selling expense

41,421



45,689

Operating income

$     122,905



$     111,297

Other income

(16)



(160)

Interest expense

671



1,176

Income before income taxes

$     122,250



$     110,281

Provision for income taxes

30,411



25,415

Net income

$       91,839



$       84,866









Earnings per share:







Basic

$           3.23



$           2.92

Diluted

$           3.16



$           2.85









Weighted average shares outstanding:







Basic

28,424



29,015

Diluted

29,072



29,743

 

 

M/I Homes, Inc. and Subsidiaries

Summary Balance Sheet and Other Information (unaudited)

(Dollars in thousands, except per share amounts)





As of



March 31,



2022



2021

Assets:







Total cash, cash equivalents and restricted cash (1)

$      218,606



$      292,900

Mortgage loans held for sale

200,455



217,524

Inventory:







     Lots, land and land development

1,116,069



831,837

     Land held for sale

8,377



4,085

     Homes under construction

1,325,672



985,227

     Other inventory

132,434



139,385

Total Inventory

$   2,582,552



$  1,960,534









Property and equipment - net

36,776



24,939

Investments in joint venture arrangements

57,309



33,822

Operating lease right-of-use assets

50,907



51,755

Goodwill

16,400



16,400

Deferred income tax asset

10,251



6,183

Other assets

133,255



105,503

Total Assets

$    3,306,511



$   2,709,560









Liabilities:







Debt - Homebuilding Operations:







     Senior notes due 2025 - net

$                —



$      247,743

     Senior notes due 2028 - net

395,524



394,750

     Senior notes due 2030 - net

295,983



     Notes payable - other

1,871



2,544

Total Debt - Homebuilding Operations

$      693,378



$      645,037









Notes payable bank - financial services operations

203,650



176,204

Total Debt

$      897,028



$      821,241









Accounts payable

281,387



198,216

Operating lease liabilities

51,546



52,029

Other liabilities

372,861



284,652

Total Liabilities

$   1,602,822



$   1,356,138









Shareholders' Equity

1,703,689



1,353,422

Total Liabilities and Shareholders' Equity

$   3,306,511



$   2,709,560









Book value per common share

$          60.22



$          46.37

Homebuilding debt to capital ratio (2)

29%



32%

(1)

Includes $0.9 million and $0.5 million of restricted cash and cash held in escrow for the quarters ended March 31, 2022 and 2021, respectively.

(2)

The ratio of homebuilding debt to capital is calculated as the carrying value of our homebuilding debt outstanding divided by the sum of the carrying value of our homebuilding debt outstanding plus shareholders' equity.

 

 

M/I Homes, Inc. and Subsidiaries

Selected Supplemental Financial and Operating Data (unaudited)

(Dollars in thousands)





Three Months Ended



March 31,



2022



2021

Cash provided by operating activities

$         69,326



$          75,168

Cash (used in) provided by investing activities

$          (6,634)



$               623

Cash used in by financing activities

$        (80,454)



$         (43,701)









Land/lot purchases

$          93,948



$          92,358

Land development spending

$        100,697



$          71,195

Land sale revenue

$            3,537



$               848

Land sale gross profit

$               967



$               250









Financial services pre-tax income

$          13,055



$          19,693

 

M/I Homes, Inc. and Subsidiaries

Non-GAAP Financial Results (1)

(Dollars in thousands)





Three Months Ended



March 31,



2022



2021

Net income

$         91,839



$         84,866

Add:







     Provision for income taxes

30,411



25,415

     Interest (income) expense-net of interest income

(557)



275

     Interest amortized to cost of sales

7,327



8,205

     Depreciation and amortization

4,188



4,110

     Non-cash charges

1,831



2,102

Adjusted EBITDA

$       135,039



$       124,973

(1)

We believe these non-GAAP financial measures are relevant and useful to investors in understanding our operations and may be helpful in comparing us with other companies in the homebuilding industry to the extent they provide similar information. These non-GAAP financial measures should be used to supplement our GAAP results in order to provide a greater understanding of the factors and trends affecting our operations.

 

 

 

M/I Homes, Inc. and Subsidiaries

Selected Supplemental Financial and Operating Data

























NEW CONTRACTS       











Three Months Ended











March 31,



















%









Region







2022

2021

Change









Northern







1,190

1,306

(9) %









Southern







1,324

1,803

(27) %









Total







2,514

3,109

(19) %























































                                                        HOMES DELIVERED















Three Months Ended











March 31,



















%









Region







2022

2021

Change









Northern







760

801

(5) %









Southern







1,063

1,218

(13) %









Total







1,823

2,019

(10) %





























































                    BACKLOG















March 31, 2022





March 31, 2021















Dollars



Average











Dollars



Average









Region



Units

(millions)



Sales Price







Units



(millions)



Sales Price









Northern



2,320

$        1,145



$    494,000







2,320



$        1,049



$   452,000









Southern



3,206

$        1,643



$    513,000







3,159



$        1,325



$   419,000









Total



5,526

$        2,788



$    505,000







5,479



$        2,374



$   433,000







































LAND POSITION SUMMARY











March 31, 2022







March 31, 2021











Lots

Lots Under











Lots



Lots Under













Region



Owned

Contract



Total







Owned



Contract



Total









Northern



7,359

7,906



15,265







6,242



8,489



14,731









Southern



16,871

13,646



30,517







10,522



16,730



27,252









Total



24,230

21,552



45,782







16,764



25,219



41,983









 

 

 

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SOURCE M/I Homes, Inc.