Press Release

M/I Homes Reports 2021 Second Quarter Results and $100 million Share Repurchase Authorization

Company Release - 7/28/2021 8:30 AM ET

COLUMBUS, Ohio, July 28, 2021 /PRNewswire/ -- M/I Homes, Inc. (NYSE:MHO) announced results for the three and six months ended June 30, 2021, and a $100 million share repurchase authorization.

2021 Second Quarter Highlights:

  • New contracts were 2,267, a second quarter record
  • Backlog units increased 49% to 5,488, an all-time record
  • Backlog sales value reached $2.5 billion, an all-time record
  • Homes delivered increased 23% to 2,258, an all-time quarterly record
  • Revenue increased 35% to $961.0 million, an all-time quarterly record
  • Pre-tax income increased 97% to $141.3 million, an all-time quarterly record
  • Net income of $107.6 million ($3.58 per diluted share), a 97% increase compared to $54.5 million ($1.89 per diluted share) in 2020
  • Shareholders' equity reached an all-time record of $1.5 billion, a 34% increase from a year ago, with book value per share of $50
  • Homebuilding debt to capital of 31% compared to 37% at June 30, 2020
  • Return on equity improved to 27%

For the second quarter, pre-tax income increased 97% to a record $141.3 million and net income increased 97% to $107.6 million, or $3.58 per diluted share.  This compares to pre-tax income of $71.7 million and net income of $54.5 million, or $1.89 per diluted share, for the second quarter of 2020.  For the six months ended June 30, 2021, net income increased 123% to $192.5 million, or $6.43 per diluted share, compared to $86.3 million, or $2.98 per diluted share, for the same period of 2020.

Homes delivered in 2021's second quarter increased 23% to 2,258.  This compares to 1,835 homes delivered in 2020's second quarter.  Homes delivered for the six months ended June 30, 2021 increased 28% to 4,277 from 2020's deliveries of 3,330.  New contracts for the second quarter of 2021 were 2,267 compared to 2,261 in 2020.  For the first six months of 2021, new contracts increased 24% to 5,376 compared to 4,350 in 2020.  Homes in backlog at June 30, 2021 had a total sales value of $2.5 billion, a 71% increase from a year ago.  Backlog units at June 30, 2021 increased 49% to 5,488 homes, with an average sales price of $454,000.  At June 30, 2020, backlog sales value was $1.5 billion, with backlog units of 3,691 and an average sales price of $396,000.  M/I Homes had 175 active communities at June 30, 2021 compared to 220 communities at June 30, 2020.  The Company's cancellation rate was 7% in the second quarter of 2021 compared to 14% in the second quarter of 2020.

The Company also announced that its Board of Directors has approved a $100 million share repurchase authorization, replacing its existing $50 million share repurchase authorization.  From August 14, 2018 through July 27, 2021, the Company repurchased approximately 1.4 million shares for an aggregate purchase price of  $32.8 million.

Robert H. Schottenstein, Chief Executive Officer and President, commented, "We had a record-setting second quarter highlighted by a 97% increase in net income, a 23% increase in homes delivered, a 35% increase in revenue, and a return on equity of 27%.  Our gross margins were very strong, improving 320 basis points over last year to 25.1% and our overhead expense ratio improved by 110 basis points to 10.4%.  As a result, our pre-tax income percentage improved to 14.7% from 10.0% in last year's second quarter.  We set all-time quarterly records in backlog units and sales value, with sales value rising to $2.5 billion – a 71% increase from a year-ago.  Demand for new homes continues to be very strong.  Despite our community count being down throughout the quarter, and significantly limiting sales in the majority of our communities, we were pleased to set a record for second quarter new contracts selling 2,267 homes.

Mr. Schottenstein continued, "We ended the quarter with record-high shareholders' equity of $1.5 billion, an increase of 34% from 2020's second quarter, book value of $50 per share, cash of $372 million, no borrowings on our $550 million credit facility, and a homebuilding debt to capital ratio of 31%. During the quarter, we also extended the maturity of our credit facility to July 2025 and raised our commitment amount to $550 million.  In addition, our Board of Directors approved a new share repurchase authorization under which the Company may purchase up to $100 million of our common shares.  This share repurchase authorization reflects the strength of our business and our commitment to creating long-term shareholder value.  We have significant operating momentum and are poised to continue delivering strong results."

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 July 2022.

M/I Homes, Inc. is one of the nation's leading builders of single-family homes, having sold over 133,000 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, the impact of the COVID-19 pandemic, 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


Six Months Ended


June 30,


June 30,


2021


2020


2021


2020

New contracts

2,267



2,261



5,376



4,350


Average community count

181



222



188



223


Cancellation rate

7

%


14

%


7

%


13

%

Backlog units

5,488



3,691



5,488



3,691


Backlog sales value

$

2,489,926



$

1,460,076



$

2,489,926



$

1,460,076


Homes delivered

2,258



1,835



4,277



3,330


Average home closing price

$

411



$

379



$

404



$

377










Homebuilding revenue:








   Housing revenue

$

927,506



$

694,700



$

1,725,785



$

1,254,149


   Land revenue

4,899



446



5,747



5,133


Total homebuilding revenue

$

932,405



$

695,146



$

1,731,532



$

1,259,282










Financial services revenue

28,635



19,048



58,284



32,515


Total revenue

$

961,040



$

714,194



$

1,789,816



$

1,291,797










Cost of sales - operations

719,672



557,791



1,346,257



1,018,715


Gross margin

$

241,368



$

156,403



$

443,559



$

273,082


General and administrative expense

49,078



41,037



94,283



74,884


Selling expense

50,576



41,127



96,265



77,955


Operating income

$

141,714



$

74,239



$

253,011



$

120,243


Equity in income from joint venture arrangements

(35)



(3)



(195)



(55)


Interest expense

452



2,515



1,628



7,215


Income before income taxes

$

141,297



$

71,727



$

251,578



$

113,083


Provision for income taxes

33,690



17,219



59,105



26,829


Net income

$

107,607



$

54,508



$

192,473



$

86,254










Earnings per share:








Basic

$

3.68



$

1.91



$

6.60



$

3.03


Diluted

$

3.58



$

1.89



$

6.43



$

2.98










Weighted average shares outstanding:








Basic

29,271



28,531



29,144



28,504


Diluted

30,093



28,836



29,935



28,920


 


M/I Homes, Inc. and Subsidiaries

Summary Balance Sheet and Other Information (unaudited)

(Dollars in thousands, except per share amounts)



As of


June 30,


2021


2020

Assets:




Total cash, cash equivalents and restricted cash (1)

$

371,806



$

94,023


Mortgage loans held for sale

172,760



163,536


Inventory:




Lots, land and land development

833,665



843,649


Land held for sale

3,840



2,385


Homes under construction

1,095,585



834,661


Other inventory

143,379



150,115


Total Inventory

$

2,076,469



$

1,830,810






Property and equipment - net

23,997



21,004


Investments in joint venture arrangements

32,833



45,144


Operating lease right-of-use assets

52,085



51,193


Goodwill

16,400



16,400


Deferred income tax asset

6,183



9,378


Other assets

108,879



96,220


Total Assets

$

2,861,412



$

2,327,708






Liabilities:




Debt - Homebuilding Operations:




Senior notes due 2025 - net

$

247,873



$

247,353


Senior notes due 2028 - net

394,944



394,174


 Notes payable - other

4,126



7,041


Total Debt - Homebuilding Operations

$

646,943



$

648,568






Notes payable bank - financial services operations

167,119



134,184


Total Debt

$

814,062



$

782,752






Accounts payable

221,909



169,088


Operating lease liabilities

52,450



51,193


Other liabilities

306,447



230,270


Total Liabilities

$

1,394,868



$

1,233,303






Shareholders' Equity

1,466,544



1,094,405


Total Liabilities and Shareholders' Equity

$

2,861,412



$

2,327,708






Book value per common share

$

50.02



$

38.34


Homebuilding debt to capital ratio (2)

31

%


37

%



(1)

Includes $0.5 million of restricted cash and cash held in escrow for both the quarters ended June 30, 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.

 

M/I Homes, Inc. and Subsidiaries

Selected Supplemental Financial and Operating Data (unaudited)

(Dollars in thousands)



Three Months Ended


Six Months Ended


June 30,


June 30,


2021


2020


2021


2020

Cash provided by operating activities

$

98,633



$

107,053



$

173,801



$

82,826


Cash used in investing activities

$

(13,386)



$

(14,156)



$

(12,763)



$

(20,702)


Cash (used in) provided by financing activities

$

(6,341)



$

(20,058)



$

(50,042)



$

25,816










Land/lot purchases

$

150,271



$

84,284



$

242,629



$

159,978


Land development spending

$

86,425



$

71,924



$

157,620



$

133,922


Land sale revenue

$

4,899



$

446



$

5,747



$

5,133


Land sale gross profit (loss)

$

926



$

(5)



$

1,176



$

64










Financial services pre-tax income

$

17,976



$

10,837



$

37,669



$

16,468


 

M/I Homes, Inc. and Subsidiaries

Non-GAAP Financial Results (1)

(Dollars in thousands)



Three Months Ended


Six Months Ended


June 30,


June 30,


2021


2020


2021


2020

Net income

$

107,607



$

54,508



$

192,473



$

86,254


Add:








Provision for income taxes

33,690



17,219



59,105



26,829


Interest expense net of interest income

(543)



1,620



(268)



5,508


Interest amortized to cost of sales

9,438



7,754



17,643



14,324


Depreciation and amortization

4,124



4,200



8,234



8,424


Non-cash charges

2,141



1,175



4,243



4,098


Adjusted EBITDA

$

156,457



$

86,476



$

281,430



$

145,437




(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



Six Months Ended


June 30,



June 30,






%







%

Region

2021


2020


 Change



2021


2020


Change

Northern

884



922



(4)

%



2,190



1,775



23

%

Southern

1,383



1,339



3

%



3,186



2,575



24

%

Total

2,267



2,261



%



5,376



4,350



24

%



HOMES DELIVERED


Three Months Ended



Six Months Ended


June 30,



June 30,






%







%

Region

2021


2020


 Change



2021


2020


Change

Northern

961



734



31

%



1,762



1,322



33

%

Southern

1,297



1,101



18

%



2,515



2,008



25

%

Total

2,258



1,835



23

%



4,277



3,330



28

%



BACKLOG


June 30, 2021



June 30, 2020




Dollars


Average





Dollars


Average

Region

Units


(millions)


Sales Price



Units


(millions)


Sales Price

Northern

2,243



$

1,050



$

468,000




1,596



$

668



$

419,000


Southern

3,245



$

1,440



$

444,000




2,095



$

792



$

378,000


Total

5,488



$

2,490



$

454,000




3,691



$

1,460



$

396,000




LAND POSITION SUMMARY


June 30, 2021



June 30, 2020


Lots

Lots Under




Lots

Lots Under


Region

Owned

Contract

Total



Owned

Contract

Total

Northern

6,655


8,344


14,999




6,859


6,222


13,081


Southern

11,608


17,433


29,041




7,921


13,515


21,436


Total

18,263


25,777


44,040




14,780


19,737


34,517


 

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SOURCE M/I Homes, Inc.