M/I HOMES, INC. COLUMBUS, Ohio, Feb. 2, 2017 /PRNewswire/ -- M/I Homes, Inc. (NYSE:MHO) announced results for its fourth quarter and year ended December 31, 2016 - the Company's 40(th) year in business.
2016 Fourth-Quarter Results:
-- Net income of $20.6 million ($0.67 per diluted share), compared to
2015's $13.3 million ($0.43 per diluted share)
-- Pre-tax income increased to $33.7 million from $22.9 million in 2015;
2016 includes $4.0 million of impairment charges and 2015 included $3.6
million of impairment charges and a $7.8 million debt extinguishment
charge
-- Revenue increased 12% to $523 million
-- Homes delivered increased 13%
-- New contracts increased 11%
-- Backlog sales value increased 20% to $685 million; backlog units up 18%
2016 Full-Year Results:
-- Pre-tax income of $91.8 million compared to $86.9 million in 2015
-- Pre-tax income increased to $111.2 million from $94.8 million in 2015,
exclusive of $19.4 million pre-tax charges for stucco-related repairs in
2016 and a $7.8 million debt extinguishment charge in 2015
-- Net income of $56.6 million ($1.84 per diluted share)
-- Net income, excluding the stucco-related charge in 2016 and debt
extinguishment charge in 2015, increased 21% to $68.6 million or $2.24
per diluted share
-- Record revenue of $1.7 billion, 19% better than 2015
-- Record homes delivered of 4,482, 15% better than 2015
-- Record new contracts of 4,755, 16% better than 2015
-- Average home closing price increased 4% to $359,000
For the fourth quarter of 2016, the Company reported net income of $20.6 million, or $0.67 per diluted share. This compares to net income of $13.3 million, or $0.43 per diluted share in 2015. The fourth quarter of 2015 included a $4.9 million after-tax charge ($0.16 per diluted share) for extinguishment of debt. For the year ended December 31, 2016, the Company reported net income of $56.6 million or $1.84 per diluted share. This includes the impact of $12.0 million of after-tax charges ($0.40 per diluted share) for stucco-related repair costs in certain of our Florida communities. Exclusive of these stucco-related charges and the $4.9 million after-tax debt extinguishment charge in 2015, net income increased 21% to $68.6 million compared to $56.6 million in 2015.
New contracts for 2016's fourth quarter reached a fourth quarter record-high of 999, increasing 11% from 2015's fourth quarter of 897. For 2016, new contracts also reached a record-high of 4,755, a 16% increase over 2015's new contracts of 4,093. M/I Homes had 178 active communities at December 31, 2016 compared to 175 a year ago. The Company's cancellation rate was 18% in 2016's fourth quarter. Homes delivered of 1,416 in 2016's fourth quarter were 13% higher than 2015's 1,253 homes delivered. Homes delivered for the twelve months ended December 31, 2016 increased 15% to a record-high 4,482 from 2015's deliveries of 3,883. Homes in backlog increased 18% at December 31, 2016 to 1,804 units, with a sales value of $685 million (a 20% increase over last year), and the average sales price in backlog increased 2% to a record-high of $380,000. At December 31, 2015, the sales value of the 1,531 homes in backlog was $569 million, with an average sales price of $372,000.
Robert H. Schottenstein, Chief Executive Officer and President, commented, "We are very pleased to report strong results for 2016, our 40(th) year in business. The year was highlighted by record new contracts, record homes delivered, record performance by our mortgage and title business, and a 21% increase in net income, excluding the charges for stucco repair and debt extinguishment. Revenue increased 19% to a record $1.7 billion and we continued to improve our operating leverage with a 30 basis point reduction in our overhead expense ratio."
Mr. Schottenstein continued, "We are very excited about our business as we reflect on our strong results in 2016 and look for a continued healthy homebuilding environment in 2017. Our financial condition is strong with shareholders' equity of $654 million and homebuilding debt to capital of 43%. With our strong year-end backlog and our planned new community openings for 2017, we are well positioned to continue our growth and improve profitability."
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 February 2018.
M/I Homes, Inc. is one of the nation's leading builders of single-family homes, having delivered over 98,800 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 operates under the name Hans Hagen Homes in its Minneapolis/St. Paul, Minnesota market. The Company has homebuilding operations in Columbus and Cincinnati, Ohio; Indianapolis, Indiana; Chicago, Illinois; Minneapolis/St. Paul, Minnesota; 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," "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 defect, 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, 2015, 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 Operating Results (Unaudited)
(Dollars in thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
2016 2015 2016 2015
---- ---- ---- ----
New contracts 999 897 4,755 4,093
Average community
count 176 171 176 160
Cancellation rate 18% 18% 14% 15%
Backlog units 1,804 1,531
Backlog sales value $685,457 $569,424
Homes delivered 1,416 1,253 4,482 3,883
Average home closing
price $356 $360 $359 $346
-------------------- ---- ---- ---- ----
Homebuilding revenue:
Housing revenue $504,795 $450,461 $1,610,496 $1,342,135
Land revenue 7,004 8,795 38,820 40,285
------------ ----- ----- ------ ------
Total homebuilding
revenue $511,799 $459,256 $1,649,316 $1,382,420
Financial services
revenue 11,447 9,667 42,011 35,975
------------------ ------ ----- ------ ------
Total revenue $523,246 $468,923 $1,691,327 $1,418,395
------------- -------- -------- ---------- ----------
Cost of sales -
operations 414,668 370,469 1,338,774 1,114,663
Cost of sales -
impairment 3,992 3,638 3,992 3,638
Cost of sales -
stucco related
charges - - 19,409 -
--------------- --- --- ------ ---
Gross margin 104,586 94,816 329,152 300,094
General and
administrative
expense 33,351 28,518 111,600 93,208
Selling expense 33,347 30,201 108,809 95,092
--------------- ------ ------ ------- ------
Operating income 37,888 36,097 108,743 111,794
Equity in income from
joint venture
arrangements (227) (250) (640) (498)
Interest expense 4,438 5,651 17,598 17,521
Loss on early
extinguishment of
debt - 7,842 - 7,842
------------------ --- ----- --- -----
Income before income
taxes 33,677 22,854 91,785 86,929
Provision for income
taxes 13,115 9,579 35,176 35,166
-------------------- ------ ----- ------ ------
Net income $20,562 $13,275 $56,609 $51,763
Preferred dividends 1,219 1,219 4,875 4,875
------------------- ----- ----- ----- -----
Net income to common
shareholders $19,343 $12,056 $51,734 $46,888
-------------------- ------- ------- ------- -------
Earnings per share:
Basic $0.78 $0.49 $2.10 $1.91
Diluted $0.67 $0.43 $1.84 $1.68
------- ----- ----- ----- -----
Weighted average shares outstanding:
Basic 24,671 24,649 24,666 24,575
Diluted 30,166 30,107 30,116 30,047
------- ------ ------ ------ ------
M/I Homes, Inc. and Subsidiaries
Summary Balance Sheet and Other Information (unaudited)
(Dollars in thousands, except per share amounts)
As of
December 31,
2016 2015
---- ----
Assets:
Total
cash,
cash
equivalents
and
restricted
cash $34,441 $13,101
Mortgage
loans
held for
sale 154,020 127,001
Inventory:
Lots,
land
and
land
development 602,528 584,542
Land
held
for
sale 12,155 12,630
Homes
under
construction 494,664 420,206
Other
inventory 106,587 94,664
---------- ------- ------
Total
Inventory $1,215,934 $1,112,042
---------- ---------- ----------
Property
and
equipment
-net 22,299 12,897
Investments
in
joint
venture
arrangements 28,016 36,967
Deferred
income
taxes,
net of
valuation
allowance 30,875 67,404
Other
assets 62,926 46,142
------- ------ ------
Total
Assets $1,548,511 $1,415,554
======= ========== ==========
Liabilities:
Debt -Homebuilding
Operations:
Senior
notes
due
2021 -
net $295,677 $294,727
Convertible
senior
subordinated
notes
due
2017 -
net 57,093 56,518
Convertible
senior
subordinated
notes
due
2018 -
net 85,423 84,714
Notes
payable
-
homebuilding 40,300 43,800
Notes
payable
-other 6,415 8,441
-------- ----- -----
Total
Debt -
Homebuilding
Operations $484,908 $488,200
Notes
payable
bank -
financial
services
operations 152,895 123,648
----------- ------- -------
Total
Debt $637,803 $611,848
Accounts
payable 103,212 86,878
Other
liabilities 153,322 120,262
------------ ------- -------
Total
Liabilities $894,337 $818,988
------------ -------- --------
Shareholders'
Equity 654,174 596,566
------------- ------- -------
Total
Liabilities
and
Shareholders'
Equity $1,548,511 $1,415,554
============== ========== ==========
Book
value
per
common
share $24.48 $22.17
Homebuilding
debt /
capital
ratio(1) 43% 45%
------------ --- ---
(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.
M/I Homes, Inc. and Subsidiaries
Selected Supplemental Financial and Operating Data
(Dollars in thousands)
Three Months Ended Twelve Months Ended
December 31, December 31,
2016 2015 2016 2015
---- ---- ---- ----
Adjusted
EBITDA(1) $51,995 $43,595 $148,397 $140,818
Cash provided
(used in) by
operating
activities $7,695 $13,096 (2) $34,197 $(82,365) (2)
Cash used in
investing
activities $(9,966) $(31,817) (2) $(31,645) $(41,480) (2)
Cash provided by
financing
activities $13,404 $3,696 $18,788 $114,460
Land/lot
purchases $80,648 $55,251 $227,646 $232,707
Land development
spending $58,441 $59,655 $180,204 $205,069
Land sale revenue $7,004 $8,795 $38,820 $40,285
Land sale gross
profit $1,039 $297 $4,134 $6,661
Financial
services pre-
tax income $5,014 $5,129 $21,150 $19,416
-------------- ------ ------ ------- -------
(1) See "Non-GAAP Financial Results"
table below.
(2) During 2016, we elected to early-
adopt Accounting Standards Update
2016-18, Statement of Cash Flows:
Restricted Cash. Certain amounts
above have been adjusted to apply
the new method retrospectively.
M/I Homes, Inc. and Subsidiaries
Non-GAAP Financial Results / Reconciliations
(Dollars in thousands)
Three Months Ended Twelve Months Ended
December 31, December 31,
2016 2015 2016 2015
---- ---- ---- ----
Net income $20,562 $13,275 $56,609 $51,763
Add:
Provision for
income taxes 13,115 9,579 35,176 35,166
Interest expense,
net of interest
income 3,755 5,036 15,286 15,532
Interest amortized
to cost of sales 5,275 5,329 18,413 16,966
Depreciation and
amortization 3,464 2,986 13,606 10,928
Non-cash charges 5,824 7,390 9,307 10,463
---------------- ----- ----- ----- ------
Adjusted EBITDA $51,995 $43,595 $148,397 $140,818
=============== ======= ======= ======== ========
M/I Homes, Inc. and Subsidiaries
Non-GAAP Reconciliation (3)
(Dollars and shares in thousands, except per share amounts)
Three Months Ended Twelve months ended
December 31, December 31,
2016 2015 2016 2015
---- ---- ---- ----
Income before income
taxes $33,677 $22,854 $91,785 $86,929
Add: Loss on early
extinguishment of debt - 7,842 - 7,842
Add: Stucco-related
charges - - 19,409 -
--- --- ------ ---
Adjusted income before
income taxes $33,677 $30,696 $111,194 $94,771
====================== ======= ======= ======== =======
Net income $20,562 $13,275 $56,609 $51,763
Add: Loss on early
extinguishment of debt
-net of tax - 4,862 - 4,862
Add: Stucco-related
charges - net of tax - - 12,034 -
--------------------- --- --- ------ ---
Adjusted income before
income taxes $20,562 $18,137 $68,643 $56,625
====================== ======= ======= ======= =======
Stucco-related charges
- net of tax $ - $ - $12,034 $ -
Loss on early
extinguishment of debt
-net of tax - 4,862 - 4,862
Divided by: Diluted
weighted average
shares outstanding 30,166 30,107 30,116 30,047
------------------- ------
Diluted earnings per
share related to
stucco-related
charges $ - $ - $0.40 $ -
Diluted earnings per
share related to debt
extinguishment charges $ - $0.16 $ - $0.16
----------------------- --- --- ----- --- --- -----
Add: Diluted earnings
per share 0.67 0.43 1.84 1.68
--------------------- ---- ---- ---- ----
Adjusted diluted
earnings per share $0.67 $0.59 $2.24 $1.84
=================== ===== ===== ===== =====
(3) 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
NEW CONTRACTS
Three Months Ended Twelve Months Ended
December 31, December 31,
------------ ------------
% %
Region 2016 2015 Change 2016 2015 Change
------ ---- ---- ------ ---- ---- ------
Midwest 366 327 12% 1,775 1,485 20%
Southern 378 337 12% 1,822 1,557 17%
Mid-
Atlantic 255 233 9% 1,158 1,051 10%
--------- --- --- --- ----- ----- ---
Total 999 897 11% 4,755 4,093 16%
===== === === === ===== ===== ===
HOMES DELIVERED
Three Months Ended Twelve Months Ended
December 31, December 31,
------------ ------------
% %
Region 2016 2015 Change 2016 2015 Change
------ ---- ---- ------ ---- ---- ------
Midwest 527 455 16% 1,690 1,417 19%
Southern 550 483 14% 1,708 1,447 18%
Mid-
Atlantic 339 315 8% 1,084 1,019 6%
--------- --- --- --- ----- ----- ---
Total 1,416 1,253 13% 4,482 3,883 15%
===== ===== ===== === ===== ===== ===
BACKLOG
December 31, 2016 December 31, 2015
----------------- -----------------
Dollars Average Dollars Average
Region Units (millions) Sales Price Units (millions) Sales Price
------ ----- --------- ----------- ----- --------- -----------
Midwest 757 $305 $403,000 672 $262 $390,000
Southern 674 $239 $355,000 560 $200 $357,000
Mid-
Atlantic 373 $142 $380,000 299 $108 $360,000
--------- --- ---- -------- --- ---- --------
Total 1,804 $685 $380,000 1,531 $569 $372,000
===== ===== ==== ======== ===== ==== ========
LAND POSITION SUMMARY
December 31, 2016 December 31, 2015
Lots Lots Under Lots Lots Under
Region Owned Contract Total Owned Contract Total
------ ----- -------- ----- ----- -------- -----
Midwest 3,747 5,527 9,274 3,921 4,220 8,141
Southern 4,421 5,474 9,895 4,664 4,972 9,636
Mid-
Atlantic 2,187 1,708 3,895 2,814 1,831 4,645
--------- ----- ----- ----- ----- ----- -----
Total 10,355 12,709 23,064 11,399 11,023 22,422
===== ====== ====== ====== ====== ====== ======
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SOURCE M/I Homes, Inc.
