COLUMBUS, Ohio, Feb. 2, 2022 /PRNewswire/ -- M/I Homes, Inc. (NYSE:MHO) announced results for its fourth quarter and year ended December 31, 2021.
2021 Fourth Quarter Results:
2021 Full Year Results:
For the fourth quarter of 2021, the Company reported record net income of $113.4 million, or $3.83 per diluted share. This compares to net income of $80.1 million, or $2.71 per diluted share, for the fourth quarter of 2020. Net income in the fourth quarter of 2020 included $6.4 million of after-tax impairment charges ($0.22 per diluted share).
For the year ended December 31, 2021, the Company reported net income of $396.9 million, or $13.28 per diluted share, compared to net income of $239.9 million, or $8.23 per diluted share, in 2020. Net income in 2021 included a $7.0 million after-tax loss on early extinguishment of debt ($0.23 per diluted share) while net income in 2020 included $6.4 million of after-tax impairment charges ($0.22 per diluted share).
Homes delivered in 2021's fourth quarter reached an all-time quarterly record of 2,316, increasing 3% compared to 2,242 deliveries in 2020's fourth quarter. Homes delivered for the twelve months ended December 31, 2021 increased 12% to a record 8,638 from 2020's deliveries of 7,709. New contracts for 2021's fourth quarter decreased 18% to 1,744 from 2,128 new contracts in 2020's fourth quarter. For 2021, new contracts were 9,084, declining 4% from 2020's 9,427 new contracts. Homes in backlog increased 10% at December 31, 2021 to 4,835 units, with an all-time record sales value of $2.4 billion, a 29% increase over last year, and the average sales price in backlog increased 17% to $490,000. At December 31, 2020, the sales value of the 4,389 homes in backlog was $1.8 billion, with an average sales price of $419,000. M/I Homes had 175 active communities at December 31, 2021 compared to 202 a year ago. The Company's cancellation rate was 10% in 2021's fourth quarter and 8% for the year.
Robert H. Schottenstein, Chief Executive Officer and President, commented, "2021 was another banner year for M/I Homes, highlighted by record levels of revenue, homes delivered, income, and year-end backlog. Our revenue increased 23% to $3.7 billion, pre-tax income improved 64% to $509 million and net income and diluted earnings per share both improved over 60% from 2020 levels, resulting in a strong return on equity of 27.4%. Our 2021 results reflect a 210 basis point improvement in our gross margins to 24.3%, a 130 basis point improvement in our overhead expense ratio and record earnings in our financial services operations. We are particularly pleased with these results given the unprecedented labor and material supply chain issues we experienced throughout the year. In addition, despite a 13% decline in community count and limiting sales in a majority of our communities, we achieved record year-end backlog units and backlog sales value, increasing 10% and 29%, over 2020."
Mr. Schottenstein continued "We ended the year with record shareholders' equity of $1.6 billion, an increase of 29% from 2020 and book value per share of $57. Our year-end cash balance was $236 million, with no borrowings on our $550 million credit facility and a homebuilding debt to capital ratio of 30%. During the year, we also repurchased $52 million of our common shares. Though the supply chain and construction challenges are likely to persist, we are well positioned to continue growing our business as we begin the year with a strong balance sheet, record backlog, solid housing demand and plans to open a record number of new communities."
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 February 2023.
M/I Homes, Inc. is one of the nation's leading builders of single-family homes, having sold over 136,700 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; 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, the impact of COVID-19, 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, 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
Twelve Months Ended
December 31,
2021
2020
New contracts
1,744
2,128
9,084
9,427
Average community count
176
205
183
215
Cancellation rate
10%
8%
11%
Backlog units
4,835
4,389
Backlog sales value
$ 2,366,873
$ 1,836,907
Homes delivered
2,316
2,242
8,638
7,709
Average home closing price
$ 443
$ 389
$ 420
$ 381
Homebuilding revenue:
Housing revenue
$ 1,026,082
$ 872,814
$ 3,630,469
$ 2,939,962
Land revenue
2,721
8,061
13,390
19,170
Total homebuilding revenue
$ 1,028,803
$ 880,875
$ 3,643,859
$ 2,959,132
Financial services revenue
22,949
25,552
102,028
87,013
Total revenue
$ 1,051,752
$ 906,427
$ 3,745,887
$ 3,046,145
Cost of sales - operations
808,150
689,245
2,836,972
2,361,367
Cost of sales - impairment
—
8,435
Gross margin
$ 243,602
$ 208,747
$ 908,915
$ 676,343
General and administrative expense
48,306
53,784
192,009
177,547
Selling expense
55,231
52,041
198,610
179,535
Operating income
$ 140,065
$ 102,922
$ 518,296
$ 319,261
Other income
(1,901)
(159)
(2,046)
(466)
Interest expense
602
1,230
2,156
9,684
Loss on early extinguishment of debt
9,072
Income before income taxes
$ 141,364
$ 101,851
$ 509,114
$ 310,043
Provision for income taxes
27,981
21,768
112,246
70,169
Net income
$ 113,383
$ 80,083
$ 396,868
$ 239,874
Earnings per share:
Basic
$ 3.93
$ 2.78
$ 13.64
$ 8.38
Diluted
$ 3.83
$ 2.71
$ 13.28
$ 8.23
Weighted average shares outstanding:
28,833
28,776
29,092
28,610
29,612
29,507
29,880
29,152
M/I Homes, Inc. and Subsidiaries Summary Balance Sheet and Other Information (unaudited) (Dollars in thousands, except per share amounts)
As of
Assets:
Total cash, cash equivalents and restricted cash
$ 236,368
$ 260,810
Mortgage loans held for sale
275,655
234,293
Inventory:
Lots, land and land development
1,125,738
868,288
Land held for sale
4,312
4,623
Homes under construction
1,187,341
898,966
Other inventory
135,043
144,731
Total Inventory
$ 2,452,434
$ 1,916,608
Property and equipment - net
37,648
26,612
Operating lease right-of-use assets
50,950
52,291
Goodwill
16,400
Investments in joint venture arrangements
57,121
34,673
Deferred income tax asset
10,251
6,183
Other assets
103,026
95,175
Total Assets
$ 3,239,853
$ 2,643,045
Liabilities:
Debt - Homebuilding Operations:
Senior notes due 2025 - net
$ —
$ 247,613
Senior notes due 2028 - net
395,331
394,557
Senior notes due 2030 - net
295,937
Notes payable - other
4,549
4,072
Total Debt - Homebuilding Operations
$ 695,817
$ 646,242
Notes payable bank - financial services operations
266,160
225,634
Total Debt
$ 961,977
$ 871,876
Accounts payable
244,505
185,669
Operating lease liabilities
51,497
52,474
Other liabilities
357,690
274,328
Total Liabilities
$ 1,615,669
$ 1,384,347
Shareholders' Equity
1,624,184
1,258,698
Total Liabilities and Shareholders' Equity
Book value per common share
$ 56.99
$ 43.68
Homebuilding debt / capital ratio(1)
30%
34%
(1)
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 (Dollars in thousands)
Cash provided by (used in) operating activities
$ 17,518
$ (28,892)
$ (16,823)
$ 168,334
Cash used in investing activities
$ (19,799)
$ (2,543)
$ (51,722)
$ (33,870)
Cash provided by financing activities
$ 17,492
$ 89,733
$ 44,103
$ 120,263
Land/lot purchases
$ 156,307
$ 148,126
$ 630,120
$ 414,950
Land development spending
$ 140,640
$ 95,732
$ 421,824
$ 318,336
Land sale revenue
$ 2,721
$ 8,061
$ 13,390
$ 19,170
Land sale gross profit
$ 707
$ 738
$ 3,228
$ 989
Financial services pre-tax income
$ 10,775
$ 14,821
$ 58,379
$ 50,468
M/I Homes, Inc. and Subsidiaries Non-GAAP Financial Results (1) (Dollars in thousands)
Add:
Interest (income) expense
(677)
333
(1,950)
6,168
Interest amortized to cost of sales
7,974
9,559
33,829
32,686
Depreciation and amortization
4,378
4,564
16,915
17,578
Non-cash charges
2,360
10,313
10,437
16,685
Adjusted EBITDA
$ 155,399
$ 126,620
$ 568,345
$ 383,160
M/I Homes, Inc. and Subsidiaries Non-GAAP Reconciliation (1) (Dollars and shares in thousands, except per share amounts)
Twelve months ended
Add: Impairment (2)
Add: Stucco-related charges (3)
860
Add: Loss on early extinguishment of debt (4)
Adjusted income before income taxes
$ 111,146
$ 518,186
$ 319,338
Add: Impairment - net of tax (2)
6,411
Add: Stucco-related charges - net of tax (3)
654
6,985
Adjusted net income
$ 87,148
$ 403,853
$ 246,939
Impairment - net of tax (2)
$ 6,411
Stucco-related charges - net of tax (3)
$ 654
Loss on early extinguishment of debt (4)
$ 6,985
Divided by: Diluted weighted average shares outstanding
Diluted earnings per share related to impairment (2)
$ 0.22
Diluted earnings per share related to stucco-related charges (3)
0.02
Diluted earnings per share related to loss on early extinguishment of debt (4)
0.23
Add: Diluted earnings per share
3.83
2.71
13.28
8.23
Adjusted diluted earnings per share
$ 2.95
$ 13.51
$ 8.47
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.
(2)
Represents the related charges divided by diluted weighted average shares outstanding during the respective period as presented in the Summary Statement of Income.
(3)
Represents charges for stucco-related repair costs taken in certain of our Florida communities.
(4)
Represents loss on early extinguishment of debt related to the early redemption of our 2025 Senior Notes during the third quarter of 2021, consisting of a $7.1 million prepayment premium due to early redemption and $2.0 million for the write-off of unamortized debt issuance costs.
M/I Homes, Inc. and Subsidiaries Selected Supplemental Financial and Operating Data
NEW CONTRACTS
%
Region
Change
Northern
705
792
(11) %
3,667
3,743
(2) %
Southern
1,039
1,336
(22) %
5,417
5,684
(5) %
Total
(18) %
(4) %
HOMES DELIVERED
954
881
8 %
3,592
3,071
17 %
1,362
1,361
— %
5,046
4,638
9 %
3 %
12 %
BACKLOG
December 31, 2021
December 31, 2020
Dollars
Average
Units
(millions)
Sales Price
1,890
$ 914
$ 484,000
1,815
$ 792
$ 436,000
2,945
$ 1,453
$ 493,000
2,574
$ 1,045
$ 406,000
$ 2,367
$ 490,000
$ 1,837
$ 419,000
LAND POSITION SUMMARY
Lots
Lots Under
Owned
Contract
7,729
7,160
14,889
6,786
7,801
14,587
16,864
12,204
29,068
10,013
14,909
24,922
24,593
19,364
43,957
16,799
22,710
39,509
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SOURCE M/I Homes, Inc.