COLUMBUS, Ohio, Oct. 25, 2023 /PRNewswire/ -- M/I Homes, Inc. (NYSE:MHO) announced results for the three and nine months ended September 30, 2023.
2023 Third Quarter Highlights:
For the third quarter of 2023, the Company reported pre-tax income of $178.0 million and net income of $139.0 million, or $4.82 per diluted share. This compares to pre-tax income of $166.6 million and net income of $131.6 million, or $4.67 per diluted share, for the third quarter of 2022. For the nine months ended September 30, 2023, net income decreased slightly to $360.1 million, or $12.58 per diluted share, compared to $360.3 million, or $12.59 per diluted share, for the same period of 2022.
Homes delivered in 2023's third quarter increased 3% to 2,096 homes. This compares to 2,026 homes delivered in 2022's third quarter. Homes delivered for the nine months ended September 30, 2023 increased 2% to 6,093 from 2022's deliveries of 5,982. New contracts for the third quarter of 2023 increased 50% to 2,021 new contracts compared to 1,349 in 2022. For the first nine months of 2023, new contracts increased 12% to 6,389 compared to 5,683 in 2022. Homes in backlog at September 30, 2023 had a total sales value of $1.8 billion, a 28% decrease from a year ago. Backlog units at September 30, 2023 decreased 24% to 3,433 homes, with an average sales price of $510,000. At September 30, 2022, backlog sales value was $2.4 billion, with backlog units of 4,536 and an average sales price of $533,000. M/I Homes had 204 communities at September 30, 2023 compared to 178 communities at September 30, 2022. The Company's cancellation rate was 10% in the third quarter of 2023 compared to 17% in the third quarter of 2022.
Robert H. Schottenstein, Chief Executive Officer and President, commented, "We had a very strong third quarter, highlighted by record revenue, record income, a 50% increase in new contracts and very strong returns. We increased revenue by 3% to a record $1.0 billion, increased pre-tax income by 7% to a record $178.0 million, generated 27% gross margins and 17% pre-tax income margins. These results produced a solid 23% return on equity."
Mr. Schottenstein continued, "Our financial condition is strong. We ended the quarter with record shareholders' equity of $2.4 billion, an increase of 25% from a year ago, book value of $87 per share, cash of $736 million, zero borrowings on our $650 million credit facility, and a homebuilding debt to capital ratio of 22%. Given our performance through three quarters of this year, along with the strength of our balance sheet, low debt levels, diverse product offerings and well-located communities, we are positioned to have a very strong 2023."
The Company will broadcast live its earnings conference call today at 10:30 A.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 October 2024.
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, Fort Myers/Naples 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, 2022, 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
Nine Months Ended
September 30,
2023
2022
New contracts
2,021
1,349
6,389
5,683
Average community count
200
173
199
174
Cancellation rate
10 %
17 %
11 %
Backlog units
3,433
4,536
Backlog sales value
$ 1,751,442
$ 2,419,291
Homes delivered
2,096
2,026
6,093
5,982
Average home closing price
$ 481
$ 487
$ 486
$ 474
Homebuilding revenue:
Housing revenue
$ 1,008,356
$ 986,843
$ 2,963,500
$ 2,837,912
Land revenue
14,424
5,986
23,276
12,897
Total homebuilding revenue
$ 1,022,780
$ 992,829
$ 2,986,776
$ 2,850,809
Financial services revenue
23,591
20,099
74,138
63,584
Total revenue
$ 1,046,371
$ 1,012,928
$ 3,060,914
$ 2,914,393
Cost of sales - operations
764,638
741,013
2,286,371
2,145,082
Gross margin
$ 281,733
$ 271,915
$ 774,543
$ 769,311
General and administrative expense
55,867
58,247
162,481
162,246
Selling expense
53,735
46,373
154,686
134,000
Operating income
$ 172,131
$ 167,295
$ 457,376
$ 473,065
Other income
1
—
(34)
(17)
Interest (income) expense - net
(5,834)
701
(11,893)
2,065
Income before income taxes
$ 177,964
$ 166,594
$ 469,303
$ 471,017
Provision for income taxes
38,948
35,004
109,220
110,750
Net income
$ 139,016
$ 131,590
$ 360,083
$ 360,267
Earnings per share:
Basic
$ 4.98
$ 4.76
$ 12.97
$ 12.86
Diluted
$ 4.82
$ 4.67
$ 12.58
$ 12.59
Weighted average shares outstanding:
27,909
27,618
27,769
28,025
28,837
28,185
28,631
28,610
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)
$ 736,252
$ 67,761
Mortgage loans held for sale
207,181
183,327
Inventory:
Lots, land and land development
1,355,622
1,230,139
Land held for sale
6,881
9,174
Homes under construction
1,218,256
1,624,831
Other inventory
159,769
152,591
Total Inventory
$ 2,740,528
$ 3,016,735
Property and equipment - net
36,015
35,217
Investments in joint venture arrangements
44,866
51,700
Operating lease right-of-use assets
58,304
55,388
Goodwill
16,400
Deferred income tax asset
18,019
10,251
Other assets
145,803
151,134
Total Assets
$ 4,003,368
$ 3,587,913
Liabilities:
Debt - Homebuilding Operations:
Senior notes due 2028 - net
$ 396,685
$ 395,911
Senior notes due 2030 - net
296,739
296,235
Notes payable - other
429
Total Debt - Homebuilding Operations
$ 693,424
$ 692,575
Notes payable bank - financial services operations
200,619
189,371
Total Debt
$ 894,043
$ 881,946
Accounts payable
250,937
296,326
Operating lease liabilities
59,433
56,199
Other liabilities
373,243
415,669
Total Liabilities
$ 1,577,656
$ 1,650,140
Shareholders' Equity
2,425,712
1,937,773
Total Liabilities and Shareholders' Equity
Book value per common share
$ 87.10
$ 70.65
Homebuilding debt to capital ratio (2)
22 %
26 %
(1)
Includes $0.2 million and $0.7 million of restricted cash and cash held in escrow for the quarters ended September 30, 2023 and 2022, 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.
Selected Supplemental Financial and Operating Data (unaudited)
(Dollars in thousands)
Cash provided by (used in) operating activities
$ 79,541
$ (92,689)
$ 497,230
$ (14,149)
Cash used in investing activities
$ (11,330)
$ (7,635)
$ (14,132)
$ (19,098)
Cash used in financing activities
$ (246)
$ (20,670)
$ (58,388)
$ (135,360)
Land/lot purchases
$ 105,860
$ 74,989
$ 247,574
$ 289,604
Land development spending
$ 151,222
$ 142,000
$ 352,555
$ 349,240
Land sale revenue
$ 14,424
$ 5,986
$ 23,276
$ 12,897
Land sale gross profit
$ 2,115
$ 1,350
$ 3,004
$ 2,908
Financial services pre-tax income
$ 9,878
$ 7,883
$ 33,678
$ 29,605
Non-GAAP Financial Results (1)
Add:
Interest income - net
(8,469)
(1,062)
(19,122)
(2,369)
Interest amortized to cost of sales
8,778
6,683
25,602
21,546
Depreciation and amortization
4,227
4,350
12,890
12,824
Non-cash charges
2,682
2,764
7,006
6,613
Adjusted EBITDA
$ 185,182
$ 179,329
$ 495,679
$ 509,631
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
885
466
90 %
2,662
2,378
12 %
Southern
1,136
883
29 %
3,727
3,305
13 %
Total
50 %
HOMES DELIVERED
741
850
(13) %
2,321
2,610
(11) %
1,355
1,176
15 %
3,772
3,372
3 %
2 %
BACKLOG
September 30, 2023
September 30, 2022
Dollars
Average
Units
(millions)
Sales Price
1,397
$ 727
$ 521,000
1,658
$ 856
$ 517,000
2,036
$ 1,024
$ 503,000
2,878
$ 1,563
$ 543,000
$ 1,751
$ 510,000
$ 2,419
$ 533,000
LAND POSITION SUMMARY
Lots
Lots Under
Owned
Contract
7,341
8,385
15,726
7,713
8,111
15,824
15,835
13,267
29,102
17,204
13,044
30,248
23,176
21,652
44,828
24,917
21,155
46,072
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SOURCE M/I Homes, Inc.