COLUMBUS, Ohio, April 28, 2021 /PRNewswire/ -- M/I Homes, Inc. (NYSE:MHO) announced results for the three months ended March 31, 2021.
2021 First Quarter Highlights:
For the first quarter of 2021, the Company reported pre-tax income of $110.3 million and net income of $84.9 million, or $2.85 per diluted share. This compares to pre-tax income of $41.4 million and net income of $31.7 million, or $1.09 per diluted share, for the first quarter of 2020.
Homes delivered in 2021's first quarter increased 35% to a first quarter record of 2,019. This compares to 1,495 homes delivered in 2020's first quarter. New contracts for the first quarter of 2021 were an all-time quarterly record 3,109, a 49% increase over 2020's 2,089 new contracts. Homes in backlog at March 31, 2021 had a total sales value of $2.4 billion, an 82% increase from a year ago and an all-time quarterly record. Backlog units at March 31, 2021 increased 68% to an all-time quarterly record 5,479 homes, with an average sales price of $433,000. At March 31, 2020, backlog sales value was $1.3 billion, with backlog units of 3,265 and an average sales price of $399,000. M/I Homes had 187 active communities at March 31, 2021 compared to 223 communities at March 31, 2020. The Company's cancellation rate was 7% in the first quarter of 2021 compared to 11% in the first quarter of 2020.
Robert H. Schottenstein, Chief Executive Officer and President, commented, "We had an outstanding record-setting first quarter, highlighted by a 49% increase in new contracts, a 35% increase in homes delivered and a 167% increase in pre-tax income. All of our homebuilding operations had a very strong quarter and our financial service business produced record results. Our gross margins improved by 420 basis points over last year, and our overhead expense ratio improved by 120 basis points. As a result, our first quarter pre-tax income percentage improved to 13.3% from 7.2% last year, and we achieved a 25% return on equity."
Mr. Schottenstein continued, "We ended the quarter with a record backlog of $2.4 billion, 82% better than last year, record shareholders' equity of $1.4 billion, an increase of 30% from 2020's first quarter, book value of $46 per share, cash of $293 million, no borrowings on our $500 million credit facility and a homebuilding debt to capital ratio of 32%. We have tremendous momentum and are very well positioned to have another outstanding year."
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 2022.
M/I Homes, Inc. is one of the nation's leading builders of single-family homes, having sold over 130,800 homes. The Company's homes are marketed and sold primarily under the M/I Homes Brand. 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; and Charlotte and Raleigh, North Carolina.
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 our Annual Report on Form 10-K for the year ended December 31, 2020, 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,
2021
2020
New contracts
3,109
2,089
Average community count
195
224
Cancellation rate
7
%
11
Backlog units
5,479
3,265
Backlog sales value
$
2,373,828
1,301,326
Homes delivered
2,019
1,495
Average home closing price
395
374
Homebuilding revenue:
Housing revenue
798,279
559,449
Land revenue
848
4,687
Total homebuilding revenue
799,127
564,136
Financial services revenue
29,649
13,467
Total revenue
828,776
577,603
Cost of sales - operations
626,585
460,924
Gross margin
202,191
116,679
General and administrative expense
45,205
33,847
Selling expense
45,689
36,828
Operating income
111,297
46,004
Equity in income from joint venture arrangements
(160)
(52)
Interest expense
1,176
4,700
Income before income taxes
110,281
41,356
Provision for income taxes
25,415
9,610
Net income
84,866
31,746
Earnings per share:
Basic
2.92
1.11
Diluted
2.85
1.09
Weighted average shares outstanding:
29,015
28,478
29,743
29,009
Summary Balance Sheet and Other Information (unaudited)
(Dollars in thousands, except per share amounts)
As of
Assets:
Total cash, cash equivalents and restricted cash (1)
292,900
21,184
Mortgage loans held for sale
217,524
156,208
Inventory:
Lots, land and land development
831,837
837,686
Land held for sale
4,085
1,164
Homes under construction
985,227
829,230
Other inventory
139,385
154,451
Total Inventory
1,960,534
1,822,531
Property and equipment - net
24,939
21,046
Investments in joint venture arrangements
33,822
40,306
Operating lease right-of-use assets
51,755
20,075
Goodwill
16,400
Deferred income tax asset
6,183
9,540
Other assets
105,503
91,673
Total Assets
2,709,560
2,198,963
Liabilities:
Debt - Homebuilding Operations:
Senior notes due 2025 - net
247,743
247,222
Senior notes due 2028 - net
394,750
393,989
Notes payable - homebuilding
—
6,900
Notes payable - other
2,544
7,546
Total Debt - Homebuilding Operations
645,037
655,657
Notes payable bank - financial services operations
176,204
145,055
Total Debt
821,241
800,712
Accounts payable
198,216
150,256
Operating lease liabilities
52,029
Other liabilities
284,652
190,239
Total Liabilities
1,356,138
1,161,282
Shareholders' Equity
1,353,422
1,037,681
Total Liabilities and Shareholders' Equity
Book value per common share
46.37
36.38
Homebuilding debt to capital ratio (2)
32
39
(1)
Includes $0.5 million of restricted cash and cash held in escrow for both the quarters ended March 31, 2021 and 2020.
(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.
Selected Supplemental Financial and Operating Data (unaudited)
(Dollars in thousands)
Cash provided by (used in) operating activities
75,168
(24,227)
Cash provided by (used in) investing activities
623
(6,546)
Cash (used in) provided by financing activities
(43,701)
45,874
Land/lot purchases
92,358
75,694
Land development spending
71,195
61,998
Land sale revenue
Land sale gross profit
250
69
Financial services pre-tax income
19,693
5,631
Non-GAAP Financial Results (1)
Add:
Interest expense net of interest income
275
3,888
Interest amortized to cost of sales
8,205
6,570
Depreciation and amortization
4,110
4,224
Non-cash charges
2,102
2,923
Adjusted EBITDA
124,973
58,961
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.
Selected Supplemental Financial and Operating Data
NEW CONTRACTS
Region
% Change
Northern
1,306
853
53
Southern
1,803
1,236
46
Total
49
HOMES DELIVERED
801
588
36
1,218
907
34
35
BACKLOG
March 31, 2021
March 31, 2020
Dollars
Average
Units
(millions)
Sales Price
2,320
1,049
452,000
1,408
596
423,000
3,159
1,325
419,000
1,857
705
380,000
2,374
433,000
1,301
399,000
LAND POSITION SUMMARY
Lots
Lots Under
Owned
Contract
6,242
8,489
14,731
6,852
6,833
13,685
10,522
16,730
27,252
7,926
12,209
20,135
16,764
25,219
41,983
14,778
19,042
33,820
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SOURCE M/I Homes, Inc.