COLUMBUS, Ohio, April 24, 2019 /PRNewswire/ -- M/I Homes,
Inc. (NYSE: MHO) announced results for the three months ended
March 31, 2019.
2019 First Quarter Highlights:
- Revenue increased 10% to a first quarter record of $481 million
- Homes delivered increased 6% to a first quarter record of 1,186
homes
- Pre-tax income of $23.5 million
compared to $23.9 million in 2018's
first quarter
- Net income of $17.7 million
($0.63 per diluted share) compared to
$18.1 million ($0.60 per diluted share) in 2018
- New contracts decreased 5% to 1,644 contracts
- Backlog sales value decreased 2%, and backlog units decreased
3% to 2,652 homes
For the first quarter of 2019, the Company reported pre-tax
income of $23.5 million and net
income of $17.7 million, or
$0.63 per diluted share. This
compares to pre-tax income of $23.9
million and net income of $18.1
million, or $0.60 per diluted
share, for the first quarter of 2018. Pre-tax income in the
first quarter of 2019 included $0.4
million of acquisition-related expense, compared with
$2.6 million in the first quarter of
2018.
Homes delivered in 2019's first quarter increased 6% to a first
quarter record of 1,186. This compares to 1,122 homes
delivered in 2018's first quarter. New contracts for the
first quarter of 2019 decreased 5% to 1,644 from the all-time
quarterly record of 1,739 contracts achieved in 2018's first
quarter. Homes in backlog at March 31,
2019 had a total sales value of $1.07
billion, a 2% decrease from a year ago, and backlog units
decreased 3% to 2,652, with an average sales price of $403,000. At March
31, 2018, backlog sales value was $1.09 billion, with backlog units of 2,744 and an
average sales price of $398,000. M/I Homes had 214 active
communities at March 31, 2019, an
increase of 4% over our 205 communities at March 31, 2018. The Company's cancellation
rate was 12% in the first quarter of 2019 and 2018.
Robert H. Schottenstein, Chief
Executive Officer and President, commented, "We had solid first
quarter results considering the choppy market conditions
experienced during the latter part of 2018 and leading into
2019. Though our first quarter new contracts declined by 5%,
they represented the second highest quarterly sales in Company
history. In addition, we were very pleased with our 6%
increase in homes delivered to a first quarter record 1,186 homes;
and our revenue increased by 10% to a first quarter record
$481 million. We also continue
to make progress in managing our overhead expense ratio which
declined 30 basis points when compared to 2018's first
quarter."
Mr. Schottenstein continued, "With a lower share count, our
diluted earnings per share improved 5% from 2018's first
quarter. We ended the quarter with shareholders' equity of
$871 million and a homebuilding debt
to capital ratio of 47%. Looking ahead, with our sales
backlog of $1.1 billion, and planned
new community openings, we are positioned to have a solid
2019."
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 April 2020.
M/I Homes, Inc. is one of the nation's leading builders of
single-family homes, having sold over 113,100 homes. The
Company's homes are marketed and sold primarily under the trade
names M/I Homes and Showcase Collection (exclusively by M/I Homes),
and also currently are sold under the name Hans Hagen Homes in the Minneapolis/St. Paul, Minnesota market and
Pinnacle Homes in the Detroit,
Michigan market. 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 the Virginia and Maryland suburbs of Washington, D.C.
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, integration of acquisitions, 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, 2018, 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
|
|
March
31,
|
|
2019
|
|
2018
|
New
contracts
|
1,644
|
|
|
1,739
|
|
Average community
count
|
212
|
|
|
197
|
|
Cancellation
rate
|
12
|
%
|
|
12
|
%
|
Backlog
units
|
2,652
|
|
|
2,744
|
|
Backlog sales
value
|
$
|
1,070,074
|
|
|
$
|
1,091,194
|
|
Homes
delivered
|
1,186
|
|
|
1,122
|
|
Average home closing
price
|
$
|
393
|
|
|
$
|
373
|
|
|
|
|
|
Homebuilding
revenue:
|
|
|
|
Housing
revenue
|
$
|
466,308
|
|
|
$
|
418,424
|
|
Land
revenue
|
3,018
|
|
|
4,407
|
|
Total homebuilding
revenue
|
$
|
469,326
|
|
|
$
|
422,831
|
|
|
|
|
|
Financial services
revenue
|
11,783
|
|
|
15,026
|
|
Total
revenue
|
$
|
481,109
|
|
|
$
|
437,857
|
|
|
|
|
|
Cost of sales -
operations
|
388,039
|
|
|
347,806
|
|
Cost of sales -
purchase accounting adjustments
|
428
|
|
|
896
|
|
Gross
margin
|
$
|
92,642
|
|
|
$
|
89,155
|
|
General and
administrative expense
|
30,699
|
|
|
27,951
|
|
Selling
expense
|
31,551
|
|
|
30,063
|
|
Operating
income
|
$
|
30,392
|
|
|
$
|
31,141
|
|
Acquisition and
integration costs
|
—
|
|
|
1,700
|
|
Equity in loss
(income) from joint venture arrangements
|
121
|
|
|
(310)
|
|
Interest
expense
|
6,792
|
|
|
5,878
|
|
Income before income
taxes
|
$
|
23,479
|
|
|
$
|
23,873
|
|
Provision for income
taxes
|
5,756
|
|
|
5,810
|
|
Net income
|
$
|
17,723
|
|
|
$
|
18,063
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
Basic
|
$
|
0.64
|
|
|
$
|
0.64
|
|
Diluted
|
$
|
0.63
|
|
|
$
|
0.60
|
|
|
|
|
|
Weighted average
shares outstanding:
|
|
|
|
Basic
|
27,498
|
|
|
28,124
|
|
Diluted
|
27,970
|
|
|
30,544
|
|
M/I Homes, Inc.
and Subsidiaries
Summary Balance
Sheet and Other Information (unaudited)
(Dollars in
thousands, except per share amounts)
|
|
|
|
As
of
|
|
March
31,
|
|
2019
|
|
2018
|
Assets:
|
|
|
|
Total cash, cash
equivalents and restricted cash(1)
|
$
|
41,931
|
|
|
$
|
53,577
|
|
Mortgage loans held
for sale
|
119,665
|
|
|
110,612
|
|
Inventory:
|
|
|
|
Lots, land and land
development
|
807,324
|
|
|
752,921
|
|
Land held for
sale
|
8,732
|
|
|
3,571
|
|
Homes under
construction
|
760,756
|
|
|
678,122
|
|
Other
inventory
|
153,976
|
|
|
145,730
|
|
Total
Inventory
|
$
|
1,730,788
|
|
|
$
|
1,580,344
|
|
|
|
|
|
Property and
equipment - net
|
28,392
|
|
|
25,872
|
|
Investments in joint
venture arrangements
|
40,736
|
|
|
22,066
|
|
Operating lease
right-of-use assets
|
20,603
|
|
|
—
|
|
Goodwill
|
16,400
|
|
|
16,400
|
|
Deferred income tax
asset
|
13,146
|
|
|
18,104
|
|
Other
assets
|
60,117
|
|
|
67,398
|
|
Total
Assets
|
$
|
2,071,778
|
|
|
$
|
1,894,373
|
|
|
|
|
|
Liabilities:
|
|
|
|
Debt - Homebuilding
Operations:
|
|
|
|
Senior notes due 2021
- net
|
$
|
298,160
|
|
|
$
|
297,056
|
|
Senior notes due 2025
- net
|
246,702
|
|
|
246,181
|
|
Notes payable -
homebuilding
|
218,800
|
|
|
162,300
|
|
Notes payable -
other
|
5,937
|
|
|
10,011
|
|
Total Debt -
Homebuilding Operations
|
$
|
769,599
|
|
|
$
|
715,548
|
|
|
|
|
|
Notes payable bank -
financial services operations
|
104,026
|
|
|
102,711
|
|
Total Debt
|
$
|
873,625
|
|
|
$
|
818,259
|
|
|
|
|
|
Accounts
payable
|
132,935
|
|
|
118,839
|
|
Operating lease
liabilities
|
20,603
|
|
|
—
|
|
Other
liabilities
|
173,153
|
|
|
170,910
|
|
Total
Liabilities
|
$
|
1,200,316
|
|
|
$
|
1,108,008
|
|
|
|
|
|
Shareholders'
Equity
|
871,462
|
|
|
786,365
|
|
Total Liabilities and
Shareholders' Equity
|
$
|
2,071,778
|
|
|
$
|
1,894,373
|
|
|
|
|
|
Book value per common
share
|
$
|
31.61
|
|
|
$
|
27.52
|
|
Homebuilding debt /
capital ratio(2)
|
47
|
%
|
|
48
|
%
|
|
|
(1)
|
Includes
$1.1 million and $7.7 million of restricted cash and cash held
in escrow for the quarters ended March 31, 2019 and 2018,
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
(Dollars in
thousands)
|
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2019
|
|
2018
|
Cash used in
operating activities
|
$
|
(22,633)
|
|
|
$
|
(32,414)
|
|
Cash used in
investing activities
|
$
|
(6,501)
|
|
|
$
|
(96,448)
|
|
Cash provided by
financing activities
|
$
|
49,536
|
|
|
$
|
30,736
|
|
|
|
|
|
Land/lot
purchases
|
$
|
80,424
|
|
|
$
|
85,045
|
|
Land development
spending
|
$
|
54,365
|
|
|
$
|
41,654
|
|
Land sale
revenue
|
$
|
3,018
|
|
|
$
|
4,407
|
|
Land sale gross
profit
|
$
|
55
|
|
|
$
|
404
|
|
|
|
|
|
Financial services
pre-tax income
|
$
|
4,952
|
|
|
$
|
8,771
|
|
M/I Homes, Inc.
and Subsidiaries
Non-GAAP Financial
Results (1)
(Dollars in
thousands)
|
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2019
|
|
2018
|
Net income
|
$
|
17,723
|
|
|
$
|
18,063
|
|
Add:
|
|
|
|
Provision for income
taxes
|
5,756
|
|
|
5,810
|
|
Interest expense net
of interest income
|
5,938
|
|
|
5,156
|
|
Interest amortized to
cost of sales
|
5,393
|
|
|
4,864
|
|
Depreciation and
amortization
|
3,817
|
|
|
3,649
|
|
Non-cash
charges
|
912
|
|
|
1,039
|
|
Adjusted
EBITDA
|
$
|
39,539
|
|
|
$
|
38,581
|
|
M/I Homes, Inc.
and Subsidiaries
Non-GAAP
Reconciliation (1)
(Dollars and
shares in thousands, except per share amounts)
|
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2019
|
|
2018
|
Income before income
taxes
|
$
|
23,479
|
|
|
$
|
23,873
|
|
Add: Purchase
accounting adjustments (2)
|
428
|
|
|
896
|
|
Add: Acquisition and
integration costs (3)
|
—
|
|
|
1,700
|
|
Adjusted income
before income taxes
|
$
|
23,907
|
|
|
$
|
26,469
|
|
|
|
|
|
Net income
|
$
|
17,723
|
|
|
$
|
18,063
|
|
Add: Purchase
accounting adjustments - net of tax (2)
|
317
|
|
|
663
|
|
Add: Acquisition and
integrations costs - net of tax (3)
|
—
|
|
|
1,258
|
|
Adjusted net
income
|
$
|
18,040
|
|
|
$
|
19,984
|
|
|
|
|
|
Purchase accounting
adjustments - net of tax (2)
|
$
|
317
|
|
|
$
|
663
|
|
Acquisition and
integration costs - net of tax (3)
|
$
|
—
|
|
|
$
|
1,258
|
|
|
|
|
|
Divided by: Diluted
weighted average shares outstanding
|
27,970
|
|
|
30,544
|
|
|
|
|
|
Diluted earnings per
share related to purchase accounting adjustments
(2)
|
$
|
0.01
|
|
|
$
|
0.02
|
|
Diluted earnings per
share related to acquisition and integration costs
(3)
|
$
|
—
|
|
|
$
|
0.04
|
|
|
|
|
|
Add: Diluted earnings
per share
|
0.63
|
|
|
0.60
|
|
Adjusted diluted
earnings per share
|
$
|
0.64
|
|
|
$
|
0.66
|
|
|
|
(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.
|
(2)
|
Represents purchase
accounting adjustments related to our acquisition of Pinnacle Homes
in Detroit, Michigan on March 1, 2018.
|
(3)
|
Represents costs
which include, but are not limited to, legal fees and expenses,
travel and communication expenses, cost of appraisals, accounting
fees and expenses, and miscellaneous expenses related to our
acquisition of Pinnacle Homes. As these costs are not eligible for
capitalization as initial direct costs, such amounts are expensed
as incurred.
|
M/I Homes, Inc.
and Subsidiaries
Selected
Supplemental Financial and Operating Data
|
|
|
NEW
CONTRACTS
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
%
|
Region
|
|
|
|
|
|
|
|
|
|
2019
|
|
2018
|
|
Change
|
Midwest
|
|
|
|
|
|
|
|
|
|
702
|
|
|
698
|
|
|
1
|
%
|
Southern
|
|
|
|
|
|
|
|
|
|
727
|
|
|
797
|
|
|
(9)
|
%
|
Mid-Atlantic
|
|
|
|
|
|
|
|
|
|
215
|
|
|
244
|
|
|
(12)
|
%
|
Total
|
|
|
|
|
|
|
|
|
|
1,644
|
|
|
1,739
|
|
|
(5)
|
%
|
|
|
HOMES
DELIVERED
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
%
|
Region
|
|
|
|
|
|
|
|
|
|
2019
|
|
2018
|
|
Change
|
Midwest
|
|
|
|
|
|
|
|
|
|
474
|
|
|
411
|
|
|
15
|
%
|
Southern
|
|
|
|
|
|
|
|
|
|
577
|
|
|
541
|
|
|
7
|
%
|
Mid-Atlantic
|
|
|
|
|
|
|
|
|
|
135
|
|
|
170
|
|
|
(21)
|
%
|
Total
|
|
|
|
|
|
|
|
|
|
1,186
|
|
|
1,122
|
|
|
6
|
%
|
|
|
BACKLOG
|
|
March 31,
2019
|
|
March 31,
2018
|
|
|
Dollars
|
Average
|
|
|
Dollars
|
Average
|
Region
|
Units
|
(millions)
|
Sales
Price
|
|
Units
|
(millions)
|
Sales
Price
|
Midwest
|
1,158
|
|
$
|
498
|
|
$
|
430,000
|
|
|
1,228
|
|
$
|
519
|
|
$
|
423,000
|
|
Southern
|
1,176
|
|
$
|
434
|
|
$
|
369,000
|
|
|
1,164
|
|
$
|
425
|
|
$
|
365,000
|
|
Mid-Atlantic
|
318
|
|
$
|
138
|
|
$
|
433,000
|
|
|
352
|
|
$
|
148
|
|
$
|
419,000
|
|
Total
|
2,652
|
|
$
|
1,070
|
|
$
|
403,000
|
|
|
2,744
|
|
$
|
1,091
|
|
$
|
398,000
|
|
|
|
LAND POSITION
SUMMARY
|
|
March 31,
2019
|
|
March 31,
2018
|
|
Lots
|
Lots
Under
|
|
|
Lots
|
Lots
Under
|
|
Region
|
Owned
|
Contract
|
Total
|
|
Owned
|
Contract
|
Total
|
Midwest
|
5,889
|
|
|
6,034
|
|
|
11,923
|
|
|
5,138
|
|
|
7,565
|
|
|
12,703
|
|
Southern
|
6,543
|
|
|
4,965
|
|
|
11,508
|
|
|
6,092
|
|
|
7,526
|
|
|
13,618
|
|
Mid-Atlantic
|
2,078
|
|
|
2,470
|
|
|
4,548
|
|
|
1,668
|
|
|
2,809
|
|
|
4,477
|
|
Total
|
14,510
|
|
|
13,469
|
|
|
27,979
|
|
|
12,898
|
|
|
17,900
|
|
|
30,798
|
|
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multimedia:http://www.prnewswire.com/news-releases/mi-homes-reports-2019-first-quarter-results-300837291.html
SOURCE M/I Homes, Inc.