COLUMBUS, Ohio, April 26, 2023 /PRNewswire/ -- M/I Homes, Inc. (NYSE: MHO) announced results for the three months ended March 31, 2023 .
2023 First Quarter Highlights:
- Revenue increased 16% to $1.0 billion, a first quarter record
- Pre-tax income increased 11% to $136.0 million, a first quarter record
- Net income increased 12% to a first quarter record $103.1 million ( $3.64 per diluted share) from 2022's $91.8 million ( $3.16 per diluted share)
- Homes delivered increased 10% to 2,007 and average sales price increased 6% to $486,000
- Shareholders' equity reached an all-time record of $2.2 billion, a 28% increase from a year ago, with book value per share of $79
- Return on equity of 26%
- New contracts decreased 14% to 2,171 contracts
- Backlog sales value decreased to $1.7 billion compared to $2.8 billion a year-ago
For the first quarter of 2023, the Company reported pre-tax income of $136.0 million and net income of $103.1 million, or $3.64 per diluted share. This compares to pre-tax income of $122.3 million and net income of $91.8 million, or $3.16 per diluted share, for the first quarter of 2022.
Homes delivered in 2023's first quarter increased 10% to 2,007 homes. This compares to 1,823 homes delivered in 2022's first quarter. New contracts for the first quarter of 2023 decreased 14% over 2022's 2,514 new contracts. Homes in backlog at March 31, 2023 had a total sales value of $1.7 billion, a 38% decrease from a year ago. Backlog units at March 31, 2023 decreased 40% to 3,301 homes, with an average sales price of $522,000 . At March 31, 2022, backlog sales value was $2.8 billion, with backlog units of 5,526 and an average sales price of $505,000 . M/I Homes had 200 communities at March 31, 2023 compared to 176 communities at March 31, 2022 . The Company's cancellation rate was 13% in the first quarter of 2023 and 7% in the first quarter of 2022.
Robert H. Schottenstein, Chief Executive Officer and President, commented, "We had strong first quarter results highlighted by record revenue, record income and a 10% increase in homes delivered. We are particularly pleased with our results given the material change in housing conditions compared to a year ago; notably, significantly higher interest rates, inflationary pressures and persistent uncertainty regarding the general economy. We increased our revenue by 16% to a record $1.0 billion, increased pre-tax income by 11% to $136 million and delivered 2,007 homes. In addition, our results reflect a 50-basis point improvement in our overhead expense ratio."
Mr. Schottenstein continued, "Our financial condition is as strong as it's ever been. We ended the quarter with record shareholders' equity of $2.2 billion, an increase of 28% over last year, book value of $79 per share, cash of $543 million, zero borrowings on our $650 million credit facility, and a homebuilding debt to capital ratio of 24%. Despite the changes in housing conditions over the past year, there remains a strong desire for home ownership, and 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 with our diverse markets and product offerings, a strong balance sheet and low leverage."
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 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 | |||
March 31, | |||
2023 | 2022 | ||
New contracts | 2,171 | 2,514 | |
Average community count | 198 | 176 | |
Cancellation rate | 13 % | 7 % | |
Backlog units | 3,301 | 5,526 | |
Backlog sales value | $ 1,724,550 | $ 2,788,234 | |
Homes delivered | 2,007 | 1,823 | |
Average home closing price | $ 486 | $ 457 | |
Homebuilding revenue: | |||
Housing revenue | $ 974,946 | $ 833,163 | |
Land revenue | 303 | 3,537 | |
Total homebuilding revenue | $ 975,249 | $ 836,700 | |
Financial services revenue | 25,281 | 24,111 | |
Total revenue | $ 1,000,530 | $ 860,811 | |
Cost of sales - operations | 765,904 | 647,702 | |
Gross margin | $ 234,626 | $ 213,109 | |
General and administrative expense | 50,960 | 48,783 | |
Selling expense | 49,080 | 41,421 | |
Operating income | $ 134,586 | $ 122,905 | |
Other income | (7) | (16) | |
Interest (income) expense | (1,389) | 671 | |
Income before income taxes | $ 135,982 | $ 122,250 | |
Provision for income taxes | 32,916 | 30,411 | |
Net income | $ 103,066 | $ 91,839 | |
Earnings per share: | |||
Basic | $ 3.73 | $ 3.23 | |
Diluted | $ 3.64 | $ 3.16 | |
Weighted average shares outstanding: | |||
Basic | 27,602 | 28,424 | |
Diluted | 28,305 | 29,072 | |
M/I Homes, Inc. and Subsidiaries Summary Balance Sheet and Other Information (unaudited) (Dollars in thousands, except per share amounts) | |||
As of | |||
March 31, | |||
2023 | 2022 | ||
Assets: | |||
Total cash, cash equivalents and restricted cash (1) | $ 542,564 | $ 218,606 | |
Mortgage loans held for sale | 226,629 | 200,455 | |
Inventory: | |||
Lots, land and land development | 1,279,673 | 1,116,069 | |
Land held for sale | 17,959 | 8,377 | |
Homes under construction | 1,190,519 | 1,325,672 | |
Other inventory | 169,258 | 132,434 | |
Total Inventory | $ 2,657,409 | $ 2,582,552 | |
Property and equipment - net | 37,419 | 36,776 | |
Investments in joint venture arrangements | 49,031 | 57,309 | |
Operating lease right-of-use assets | 59,787 | 50,907 | |
Goodwill | 16,400 | 16,400 | |
Deferred income tax asset | 18,019 | 10,251 | |
Other assets | 155,112 | 133,255 | |
Total Assets | $ 3,762,370 | $ 3,306,511 | |
Liabilities: | |||
Debt - Homebuilding Operations: | |||
Senior notes due 2028 - net | $ 396,298 | $ 395,524 | |
Senior notes due 2030 - net | 296,487 | 295,983 | |
Notes payable - other | - | 1,871 | |
Total Debt - Homebuilding Operations | $ 692,785 | $ 693,378 | |
Notes payable bank - financial services operations | 223,618 | 203,650 | |
Total Debt | $ 916,403 | $ 897,028 | |
Accounts payable | 208,426 | 281,387 | |
Operating lease liabilities | 60,763 | 51,546 | |
Other liabilities | 393,563 | 372,861 | |
Total Liabilities | $ 1,579,155 | $ 1,602,822 | |
Shareholders' Equity | 2,183,215 | 1,703,689 | |
Total Liabilities and Shareholders' Equity | $ 3,762,370 | $ 3,306,511 | |
Book value per common share | $ 78.77 | $ 60.22 | |
Homebuilding debt to capital ratio (2) | 24 % | 29 % | |
(1) | Includes $1.4 million and $0.9 million of restricted cash and cash held in escrow for the quarters ended March 31, 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 |
M/I Homes, Inc. and Subsidiaries Selected Supplemental Financial and Operating Data (unaudited) (Dollars in thousands) | |||
Three Months Ended | |||
March 31, | |||
2023 | 2022 | ||
Cash provided by operating activities | $ 251,499 | $ 69,326 | |
Cash used in investing activities | $ (4,793) | $ (6,634) | |
Cash used in financing activities | $ (15,684) | $ (80,454) | |
Land/lot purchases | $ 45,646 | $ 93,948 | |
Land development spending | $ 92,419 | $ 100,697 | |
Land sale revenue | $ 303 | $ 3,537 | |
Land sale gross (loss) profit | $ (3) | $ 967 | |
Financial services pre-tax income | $ 12,641 | $ 13,055 | |
M/I Homes, Inc. and Subsidiaries Non-GAAP Financial Results (1) (Dollars in thousands) | |||
Three Months Ended | |||
March 31, | |||
2023 | 2022 | ||
Net income | $ 103,066 | $ 91,839 | |
Add: | |||
Provision for income taxes | 32,916 | 30,411 | |
Interest income | (3,673) | (557) | |
Interest amortized to cost of sales | 8,090 | 7,327 | |
Depreciation and amortization | 4,397 | 4,188 | |
Non-cash charges | 2,023 | 1,831 | |
Adjusted EBITDA | $ 146,819 | $ 135,039 | |
(1) | We believe these non-GAAP financial measures are relevant and useful to investors in understanding our operations and may be helpful in |
M/I Homes, Inc. and Subsidiaries Selected Supplemental Financial and Operating Data | ||||||
NEW CONTRACTS | ||||||
Three Months Ended | ||||||
March 31, | ||||||
% | ||||||
Region | 2023 | 2022 | Change | |||
Northern | 828 | 1,190 | (30) % | |||
Southern | 1,343 | 1,324 | 1 % | |||
Total | 2,171 | 2,514 | (14) % | |||
HOMES DELIVERED | ||||||
Three Months Ended | ||||||
March 31, | ||||||
% | ||||||
Region | 2023 | 2022 | Change | |||
Northern | 797 | 760 | 5 % | |||
Southern | 1,210 | 1,063 | 14 % | |||
Total | 2,007 | 1,823 | 10 % | |||
BACKLOG | ||||||||||||
March 31, 2023 | March 31, 2022 | |||||||||||
Dollars | Average | Dollars | Average | |||||||||
Region | Units | (millions) | Sales Price | Units | (millions) | Sales Price | ||||||
Northern | 1,087 | $ 560 | $ 515,000 | 2,320 | $ 1,145 | $ 494,000 | ||||||
Southern | 2,214 | $ 1,165 | $ 526,000 | 3,206 | $ 1,643 | $ 513,000 | ||||||
Total | 3,301 | $ 1,725 | $ 522,000 | 5,526 | $ 2,788 | $ 505,000 | ||||||
LAND POSITION SUMMARY | ||||||||
March 31, 2023 | March 31, 2022 | |||||||
Lots | Lots Under | Lots | Lots Under | |||||
Region | Owned | Contract | Total | Owned | Contract | Total | ||
Northern | 7,712 | 7,214 | 14,926 | 7,359 | 7,906 | 15,265 | ||
Southern | 16,054 | 9,761 | 25,815 | 16,871 | 13,646 | 30,517 | ||
Total | 23,766 | 16,975 | 40,741 | 24,230 | 21,552 | 45,782 | ||
SOURCE M/I Homes, Inc.
