Columbus, Ohio (July 26, 2023) - M/I Homes, Inc. (NYSE:MHO) announced results for the three and six months ended June 30, 2023.
2023 Second Quarter Highlights:
•New contracts increased 21% to 2,197 contracts
•Delivered 1,990 homes, down 7% from 2022’s 2,133 homes delivered
•Revenue of $1.0 billion, down 3% from 2022’s second quarter record level
•Pre-tax income of $155.4 million, down 15% from 2022’s record of $182.2 million
•Net income of $118.0 million ($4.12 per diluted share), down 14% from 2022’s record of $136.8 million
•Shareholders’ equity reached a record of $2.3 billion, a 26% increase from a year ago, with book value per share of $83
•Return on equity of 23%
For the second quarter of 2023, the Company reported pre-tax income of $155.4 million and net income of $118.0 million, or $4.12 per diluted share. This compares to pre-tax income of $182.2 million and net income of $136.8 million, or $4.79 per diluted share, for the second quarter of 2022. For the six months ended June 30, 2023, net income decreased 3% to $221.1 million, or $7.77 per diluted share, compared to $228.7 million, or $7.93 per diluted share, for the same period of 2022.
Homes delivered in 2023’s second quarter decreased 7% to 1,990 homes. This compares to 2,133 homes delivered in 2022’s second quarter. Homes delivered for the six months ended June 30, 2023 increased 1% to 3,997 from 2022’s deliveries of 3,956. New contracts for the second quarter of 2023 increased 21% to 2,197 new contracts. For the first six months of 2023, new contracts increased 1% to 4,368 compared to 4,334 in 2022. Homes in backlog at June 30, 2023 had a total sales value of $1.8 billion, a 34% decrease from a year ago. Backlog units at June 30, 2023 decreased 33% to 3,508 homes, with an average sales price of $507,000. At June 30, 2022, backlog sales value was $2.7 billion, with backlog units of 5,213 and an average sales price of $519,000. M/I Homes had 195 communities at June 30, 2023 compared to 168 communities at June 30, 2022. The Company's cancellation rate was 10% in the second quarter of 2023 compared to 11% in the second quarter of 2022.
Robert H. Schottenstein, Chief Executive Officer and President, commented, “We had a very strong second quarter. Despite higher interest rates and uncertain economic conditions, we were very pleased with our new contracts, homes delivered, margins and income. New contracts improved by 21% over last year; we delivered 1,990 homes and continued to improve our construction cycle time; gross margins were considerably better than expected at 26%; and pre-tax income of $155 million, though down from last year’s record level, represented 15.3% of revenue. These results produced a very solid 23% return on equity. Our book value per share is now $83, an increase of 26% versus a year ago.”
Mr. Schottenstein continued, “Our financial condition remains strong. We ended the quarter with record shareholders’ equity of $2.3 billion and available liquidity in excess of $1 billion. 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.”
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 July 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.
Contact M/I Homes, Inc.
Ann Marie W. Hunker, Vice President, Chief Accounting Officer and Controller, (614) 418-8225
Mark Kirkendall, Vice President, Treasurer, (614) 418-8021
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,
2023
2022
2023
2022
New contracts
2,197
1,820
4,368
4,334
Average community count
198
172
197
173
Cancellation rate
10
%
11
%
12
%
9
%
Backlog units
3,508
5,213
3,508
5,213
Backlog sales value
$
1,777,657
$
2,706,586
$
1,777,657
$
2,706,586
Homes delivered
1,990
2,133
3,997
3,956
Average home closing price
$
493
$
477
$
489
$
468
Homebuilding revenue:
Housing revenue
$
980,198
$
1,017,906
$
1,955,144
$
1,851,069
Land revenue
8,549
3,374
8,852
6,911
Total homebuilding revenue
$
988,747
$
1,021,280
$
1,963,996
$
1,857,980
Financial services revenue
25,266
19,374
50,547
43,485
Total revenue
$
1,014,013
$
1,040,654
$
2,014,543
$
1,901,465
Cost of sales - operations
755,829
756,367
1,521,733
1,404,069
Gross margin
$
258,184
$
284,287
$
492,810
$
497,396
General and administrative expense
55,654
55,216
106,614
103,999
Selling expense
51,871
46,206
100,951
87,627
Operating income
$
150,659
$
182,865
$
285,245
$
305,770
Other income
(28)
(1)
(35)
(17)
Interest (income) expense - net
(4,670)
693
(6,059)
1,364
Income before income taxes
$
155,357
$
182,173
$
291,339
$
304,423
Provision for income taxes
37,356
45,335
70,272
75,746
Net income
$
118,001
$
136,838
$
221,067
$
228,677
Earnings per share:
Basic
$
4.25
$
4.88
$
7.98
$
8.10
Diluted
$
4.12
$
4.79
$
7.77
$
7.93
Weighted average shares outstanding:
Basic
27,792
28,041
27,698
28,231
Diluted
28,624
28,590
28,469
28,826
M/I Homes, Inc. and Subsidiaries
Summary Balance Sheet and Other Information (unaudited)
(Dollars in thousands, except per share amounts)
As of
June 30,
2023
2022
Assets:
Total cash, cash equivalents and restricted cash (1)
$
668,287
$
188,755
Mortgage loans held for sale
190,845
194,450
Inventory:
Lots, land and land development
1,296,486
1,136,380
Land held for sale
15,183
10,524
Homes under construction
1,207,759
1,514,965
Other inventory
167,586
154,396
Total Inventory
$
2,687,014
$
2,816,265
Property and equipment - net
35,495
36,150
Investments in joint venture arrangements
41,988
55,625
Operating lease right-of-use assets
58,404
52,328
Goodwill
16,400
16,400
Deferred income tax asset
18,019
10,251
Other assets
145,297
123,100
Total Assets
$
3,861,749
$
3,493,324
Liabilities:
Debt - Homebuilding Operations:
Senior notes due 2028 - net
$
396,492
$
395,718
Senior notes due 2030 - net
296,613
296,109
Notes payable - other
—
1,001
Total Debt - Homebuilding Operations
$
693,105
$
692,828
Notes payable bank - financial services operations
186,396
194,602
Total Debt
$
879,501
$
887,430
Accounts payable
264,656
329,384
Operating lease liabilities
59,461
53,058
Other liabilities
359,672
405,185
Total Liabilities
$
1,563,290
$
1,675,057
Shareholders’ Equity
2,298,459
1,818,267
Total Liabilities and Shareholders’ Equity
$
3,861,749
$
3,493,324
Book value per common share
$
82.73
$
65.50
Homebuilding debt to capital ratio (2)
23
%
28
%
(1)Includes $0.9 million and $1.2 million of restricted cash and cash held in escrow for the quarters ended June 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.
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,
2023
2022
2023
2022
Cash provided by operating activities
$
166,190
$
9,214
$
417,689
$
78,540
Cash provided by (used in) investing activities
$
1,991
$
(4,829)
$
(2,802)
$
(11,463)
Cash used in financing activities
$
(42,458)
$
(34,236)
$
(58,142)
$
(114,690)
Land/lot purchases
$
96,068
$
120,667
$
141,714
$
214,615
Land development spending
$
108,914
$
106,543
$
201,333
$
207,240
Land sale revenue
$
8,549
$
3,374
$
8,852
$
6,911
Land sale gross profit
$
892
$
591
$
889
$
1,558
Financial services pre-tax income
$
11,159
$
8,667
$
23,800
$
21,722
M/I Homes, Inc. and Subsidiaries
Non-GAAP Financial Results (1)
(Dollars in thousands)
Three Months Ended
Six Months Ended
June 30,
June 30,
2023
2022
2023
2022
Net income
$
118,001
$
136,838
$
221,067
$
228,677
Add:
Provision for income taxes
37,356
45,335
70,272
75,746
Interest (income) expense - net
(6,980)
(750)
(10,653)
(1,307)
Interest amortized to cost of sales
8,734
7,536
16,824
14,863
Depreciation and amortization
4,266
4,286
8,663
8,474
Non-cash charges
2,301
2,018
4,324
3,849
Adjusted EBITDA
$
163,678
$
195,263
$
310,497
$
330,302
(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
