COLUMBUS, Ohio, Jan. 31, 2024 /PRNewswire/ -- M/I Homes, Inc. (NYSE: MHO) announced results for its fourth quarter and year ended December 31, 2023.
2023 Fourth Quarter Results:
2023 Full Year Results:
For the fourth quarter of 2023, the Company reported net income of $105.3 million, or $3.66 per diluted share, compared to net income of $130.4 million, or $4.65 per diluted share, for the fourth quarter of 2022. For the year ended December 31, 2023, the Company reported net income of $465.4 million, or $16.21 per diluted share, compared to net income of $490.7 million, or $17.24 per diluted share in 2022.
Homes delivered in 2023's fourth quarter reached 2,019, a 15% decrease compared to 2,384 deliveries in 2022's fourth quarter. Homes delivered for the twelve months ended December 31, 2023 declined 3% to 8,112 from 2022's deliveries of 8,366. New contracts for 2023's fourth quarter increased 61% to 1,588 from 985 new contracts in 2022's fourth quarter. For 2023, new contracts were 7,977, a 20% increase from 2022's 6,668 new contracts. Homes in backlog decreased 4% at December 31, 2023 to 3,002 units, with a sales value of $1.6 billion, a 7% decrease from last year, and the average sales price in backlog decreased 3% to $525,000. At December 31, 2022, the sales value of the 3,137 homes in backlog was $1.7 billion, with an average sales price of $541,000. M/I Homes had 213 active communities at December 31, 2023 compared to 196 a year ago. The Company's cancellation rate was 13% in 2023's fourth quarter compared to 30% for the prior year's fourth quarter.
Robert H. Schottenstein, Chief Executive Officer and President, commented, "2023 was a very strong year for our Company highlighted by earning $607 million of pretax income, representing 15% of revenue with gross margins of 25.3%. Revenue reached $4 billion, new contracts increased 20% to 7,977 homes and our return on equity was a very solid 20.2%. We are particularly pleased with these results given the significant headwinds the housing industry faced entering 2023, including higher interest rates, inflationary pressures, and uncertainty in the general economy."
Mr. Schottenstein continued, "We are in excellent financial condition. We ended the year with record shareholders' equity of $2.5 billion, cash of $733 million, zero borrowings under our $650 million credit facility, and a homebuilding debt to capital ratio of 22%. And, our year-end book value was a record $91 per share. We believe our industry will continue to benefit from strong fundamentals, including favorable demographic trends and an undersupply of housing. Looking ahead, we are well positioned to continue delivering strong results given the strength of our balance sheet, our diverse product offerings, and our well-located communities."
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 January 2025.
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
Twelve Months Ended
December 31,
2023
2022
New contracts
1,588
985
7,977
6,668
Average community count
209
187
202
179
Cancellation rate
13 %
30 %
11 %
14 %
Backlog units
3,002
3,137
Backlog sales value
$ 1,575,643
$ 1,698,169
Homes delivered
2,019
2,384
8,112
8,366
Average home closing price
$ 471
$ 492
$ 483
$ 479
Homebuilding revenue:
Housing revenue
$ 950,872
$ 1,172,515
$ 3,914,372
$ 4,010,427
Land revenue
2,025
21,874
25,301
34,771
Total homebuilding revenue
$ 952,897
$ 1,194,389
$ 3,939,673
$ 4,045,198
Financial services revenue
19,691
22,611
93,829
86,195
Total revenue
$ 972,588
$ 1,217,000
$ 4,033,502
$ 4,131,393
Cost of sales - operations
728,202
942,469
3,014,573
3,087,551
Gross margin
$ 244,386
$ 274,531
$ 1,018,929
$ 1,043,842
General and administrative expense
60,284
52,565
222,765
214,811
Selling expense
54,256
57,580
208,942
191,580
Operating income
$ 129,846
$ 164,386
$ 587,222
$ 637,451
Other loss (income)
1
11
(33)
(6)
Interest (income) expense
(8,129)
185
(20,022)
2,250
Income before income taxes
$ 137,974
$ 164,190
$ 607,277
$ 635,207
Provision for income taxes
32,692
33,795
141,912
144,545
Net income
$ 105,282
$ 130,395
$ 465,365
$ 490,662
Earnings per share:
Basic
$ 3.79
$ 4.75
$ 16.76
$ 17.60
Diluted
$ 3.66
$ 4.65
$ 16.21
$ 17.24
Weighted average shares outstanding:
27,769
27,435
27,876
28,756
28,017
28,716
28,463
Summary Balance Sheet and Other Information (unaudited)
(Dollars in thousands, except per share amounts)
As of
Assets:
Total cash, cash equivalents and restricted cash
$ 732,804
$ 311,542
Mortgage loans held for sale
176,329
242,539
Inventory:
Lots, land and land development
1,446,576
1,294,779
Land held for sale
6,932
3,331
Homes under construction
1,177,101
1,366,804
Other inventory
166,542
163,688
Total Inventory
$ 2,797,151
$ 2,828,602
Property and equipment - net
34,918
37,446
Operating lease right-of-use assets
56,364
60,416
Goodwill
16,400
Investments in joint venture arrangements
44,011
51,554
Deferred income tax asset
16,094
18,019
Other assets
148,369
148,405
Total Assets
$ 4,022,440
$ 3,714,923
Liabilities:
Debt - Homebuilding Operations:
Senior notes due 2028 - net
396,879
396,105
Senior notes due 2030 - net
296,865
296,361
Total Debt - Homebuilding Operations
$ 693,744
$ 692,466
Notes payable bank - financial services operations
165,844
245,741
Total Debt
$ 859,588
$ 938,207
Accounts payable
204,678
228,597
Operating lease liabilities
57,566
61,310
Other liabilities
383,669
416,084
Total Liabilities
$ 1,505,501
$ 1,644,198
Shareholders' Equity
2,516,939
2,070,725
Total Liabilities and Shareholders' Equity
Book value per common share
$ 90.66
$ 75.46
Homebuilding debt / capital ratio(1)
22 %
25 %
(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.
Selected Supplemental Financial and Operating Data
(Dollars in thousands)
Cash provided by operating activities
$ 54,901
$ 198,220
$ 552,131
$ 184,071
Cash used in investing activities
$ (4,500)
$ (8,282)
$ (18,632)
$ (27,380)
Cash (used in) provided by financing activities
$ (53,849)
$ 53,843
$ (112,237)
$ (81,517)
Land/lot purchases
$ 95,930
$ 51,480
$ 343,504
$ 341,084
Land development spending
$ 159,550
$ 146,937
$ 512,105
$ 496,177
Land sale revenue
$ 2,025
$ 21,874
$ 25,301
$ 34,771
Land sale gross profit
$ 356
$ 8,827
$ 3,360
$ 11,735
Financial services pre-tax income
$ 4,676
$ 9,655
$ 38,354
$ 39,260
Non-GAAP Financial Results (1)
Add:
Interest income
(10,908)
(2,034)
(30,030)
(4,403)
Interest amortized to cost of sales
7,724
8,724
33,326
30,270
Depreciation and amortization
4,479
4,350
17,369
17,174
Non-cash charges
13,241
20,526
20,247
27,139
Adjusted EBITDA
$ 152,510
$ 195,756
$ 648,189
$ 705,387
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.
NEW CONTRACTS
%
Region
Change
Northern
699
369
89 %
3,361
2,747
Southern
889
616
44 %
4,616
3,921
18 %
Total
61 %
20 %
HOMES DELIVERED
848
971
(13) %
3,169
3,581
(12) %
1,171
1,413
(17) %
4,943
4,785
3 %
(15) %
(3) %
BACKLOG
December 31, 2023
December 31, 2022
Dollars
Average
Units
(millions)
Sales Price
1,248
$ 663
$ 531,000
1,056
$ 552
$ 523,000
1,754
$ 912
$ 520,000
2,081
$ 1,146
$ 551,000
$ 1,576
$ 525,000
$ 1,698
$ 541,000
LAND POSITION SUMMARY
Lots
Lots Under
Owned
Contract
6,852
8,935
15,787
7,972
7,406
15,378
17,522
12,351
29,873
17,032
9,643
26,675
24,374
21,286
45,660
25,004
17,049
42,053
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SOURCE M/I Homes, Inc.