M/I HOMES, INC. COLUMBUS, Ohio, July 23, 2015 /PRNewswire/ -- M/I Homes, Inc. (NYSE: MHO) announced results for the second quarter and six months ended June 30, 2015.
2015 Second Quarter Highlights:
-- Pre-tax income of $21.9 million - a 43% increase over 2014's second
quarter
-- Revenue increased 15% to $323 million; average closing price increased
11%
-- Gross margin of 21.8%, up 60 basis points from 2014's second quarter
-- Net income of $13.4 million ($0.43 per diluted share)
-- New contracts increased 8%; homes delivered increased 3%
-- Backlog sales value increased 20%
For the second quarter of 2015, the Company reported net income of $13.4 million, or $0.43 per diluted share. This compares to net income of $9.6 million, or $0.31 per diluted share, for the second quarter of 2014 excluding the reversal of $4.0 million of the Company's state deferred tax asset valuation allowance. For the six months ended June 30, 2015, the Company reported net income of $22.9 million, or $0.74 per diluted share, compared to net income of $16.9 million, or $0.54 per diluted share, in the same period of 2014, excluding the reversal of $9.3 million of the Company's state deferred tax asset valuation allowance.
Homes delivered in 2015's second quarter were 919 compared to 894 deliveries in 2014's second quarter - a 3% increase. Homes delivered for the six months ended June 30, 2015 were 1,636 compared to 2014's deliveries of 1,631. New contracts for 2015's second quarter were 1,100, an increase of 8% from 2014's second quarter. For the first six months of 2015, new contracts increased 11% from 1,998 in 2014 to 2,208 in 2015. M/I Homes had 155 active communities at June 30, 2015 compared to 145 at June 30, 2014 and 150 at December 31, 2014. The Company's cancellation rate was 14% in the second quarter of 2015 compared to 15% in 2014's second quarter. Homes in backlog increased 9% at June 30, 2015 to 1,794 units, with a sales value of $657 million (a 20% increase over last year's second quarter), and an average sales price increase of 10% to a record high of $366,000. At June 30, 2014, the sales value of homes in backlog was $546 million, with an average sales price of $332,000 and backlog units of 1,647.
Robert H. Schottenstein, Chief Executive Officer and President, commented, "We had another strong quarter highlighted by a 43% increase in pre-tax income, an 8% increase in new contracts, and a 20% increase in our backlog sales value. Several factors contributed to our improved profitability, including an 11% increase in our average closing price, a 60 basis point improvement in our gross margin, and better operating leverage reflected in a 90 basis point decline in our overhead expense ratio. Our backlog sales value of $657 million includes a backlog average sales price of $366,000 - a record high for our Company."
Mr. Schottenstein continued, "We were pleased to open 28 new communities in the first half of 2015 and are on track to increase our community count by 15% in 2015. Looking ahead, with the strength of our backlog and planned new community openings, we are poised to have a very solid 2015. We remain focused on improving profitability, growing our market share, and investing in attractive land opportunities."
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 July 2016.
M/I Homes, Inc. is one of the nation's leading builders of single-family homes, having delivered over 92,000 homes. The Company's homes are marketed and sold under the trade names M/I Homes and Showcase Collection (exclusively by M/I Homes). The Company has homebuilding operations in Columbus and Cincinnati, Ohio; Indianapolis, Indiana; Chicago, Illinois; Tampa 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 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, 2014, 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 in thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2015 2014 2015 2014
---- ---- ----
New contracts 1,100 1,016 2,208 1,998
Average community count 154 152 153 155
Cancellation rate 14% 15% 14% 15%
Backlog units 1,794 1,647
Backlog value $656,935 $546,221
Homes delivered 919 894 1,636 1,631
Average home closing price $340 $306 $333 $303
-------------------------- ---- ---- ---- ----
Homebuilding revenue:
Housing revenue $312,112 $273,374 $545,112 $494,084
Land revenue 1,810 1,764 23,871 8,030
------------ ----- ----- ------ -----
Total homebuilding revenue $313,922 $275,138 $568,983 $502,114
Financial services revenue 8,934 6,470 17,032 14,335
-------------------------- ----- ----- ------ ------
Total revenue $322,856 $281,608 $586,015 $516,449
Cost of sales - operations 252,595 221,217 458,778 405,181
Cost of sales - impairment - 804 - 804
-------------------------- --- --- ---
Gross margin $70,261 $59,587 $127,237 $110,464
General and administrative expense 21,705 21,281 41,039 39,596
Selling expense 22,935 20,251 40,621 36,220
--------------- ------ ------ ------ ------
Operating income $25,621 $18,055 $45,577 $34,648
Equity in (income) loss of unconsolidated joint ventures (14) 22 (212) (40)
Interest expense 3,750 2,730 8,212 6,900
Income before income taxes $21,885 $15,303 $37,577 $27,788
Provision for income taxes 8,535 1,749 14,659 1,602
-------------------------- ----- ----- ------ -----
Net income $13,350 $13,554 $22,918 $26,186
Preferred dividends 1,219 1,219 2,438 2,438
------------------- ----- ----- ----- -----
Net income to common shareholders $12,131 $12,335 $20,480 $23,748
--------------------------------- ------- ------- ------- -------
Earnings per share:
Basic $0.49 $0.50 $0.84 $0.97
Diluted $0.43 $0.44 $0.74 $0.85
------- ----- ----- ----- -----
Weighted average shares outstanding:
Basic 24,531 24,470 24,523 24,444
Diluted 30,023 29,913 30,002 29,891
------- ------ ------ ------ ------
M/I Homes, Inc. and Subsidiaries
Summary Balance Sheet and Other Information (unaudited)
(Dollars in thousands, except per share amounts)
As of
June 30,
2015 2014
---- ----
Assets:
Total
cash
and
cash
equivalents(1) $26,947 $43,719
Mortgage
loans
held
for
sale 75,063 64,782
Inventory:
Lots,
land
and
land
development 486,895 366,945
Land
held
for
sale 5,754 3,450
Homes
under
construction 444,855 384,930
Other
inventory 103,440 60,815
---------- ------- ------
Total
Inventory $1,040,944 $816,140
Property
and
equipment
-
net 11,819 11,283
Investments
in
unconsolidated
joint
ventures 28,357 42,182
Deferred
income
taxes,
net
of
valuation
allowance 81,054 109,558
Other
assets 50,805 39,042
------- ------ ------
Total
Assets $1,314,989 $1,126,706
======= ========== ==========
Liabilities:
Debt -Homebuilding
Operations:
Senior
notes $228,669 $228,269
Convertible
senior
subordinated
notes
due
2017 57,500 57,500
Convertible
senior
subordinated
notes
due
2018 86,250 86,250
Notes
payable
bank
-
homebuilding 105,600 -
Notes
payable
-
other 8,230 7,717
-------- ----- -----
Total
Debt
-
Homebuilding
Operations $486,249 $379,736
Notes
payable
bank
-
financial
services
operations 69,681 61,914
----------- ------ ------
Total
Debt $555,930 $441,650
Accounts
payable 90,643 87,325
Other
liabilities 101,243 77,587
------------ ------- ------
Total
Liabilities $747,816 $606,562
------------ -------- --------
Shareholders'
Equity 567,173 520,144
------------- ------- -------
Total
Liabilities
and
Shareholders'
Equity $1,314,989 $1,126,706
============== ========== ==========
Book
value
per
common
share $21.06 $19.21
Net
debt/
net
capital
ratio(2) 48% 43%
--------- --- ---
(1) 2015 and 2014 amounts include $5.2
million and $10.1 million of
restricted cash and cash held in
escrow, respectively.
Net debt/net capital ratio is
calculated as total debt minus
total cash and cash equivalents,
divided by the sum of total debt
minus total cash and cash
equivalents plus shareholders'
(2) equity.
M/I Homes, Inc. and Subsidiaries
Selected Supplemental Financial and Operating Data
(Dollars in thousands)
Three Months Ended Six Months Ended
June 30, June 30,
2015 2014 2015 2014
---- ---- ---- ----
Adjusted EBITDA(1) $32,760 $25,601 $59,529 $47,777
Cash flow used in operating activities $(16,934) $(64,566) $(46,210) $(66,669)
Cash used in investing activities $(3,183) $(328) $(4,028) $(9,207)
Cash provided by (used in) financing activities $11,932 $9,177 $56,476 $(19,206)
Land/lot purchases $43,617 $71,880 $94,817 $124,883
Land development spending $44,546 $34,408 $82,227 $51,938
Land gross margin $218 $442 $5,459 $1,763
Financial services pre-tax income $4,850 $3,072 $9,843 $7,783
--------------------------------- ------ ------ ------ ------
(1) See "Non-GAAP Financial Results /
Reconciliation" table below.
M/I Homes, Inc. and Subsidiaries
Non-GAAP Financial Results / Reconciliation
(Dollars in thousands)
Three Months Ended Six Months Ended
June 30, June 30,
2015 2014 2015 2014
---- ---- ---- ----
Net income $13,350 $13,554 $22,918 $26,186
Add:
Provision for
income taxes 8,535 1,749 14,659 1,602
Interest expense
net of interest
income 3,265 2,352 7,368 6,129
Interest amortized
to cost of sales 3,780 3,843 7,319 6,951
Depreciation and
amortization 2,429 2,037 4,735 3,949
Non-cash charges 1,401 2,066 2,530 2,960
---------------- ----- ----- ----- -----
Adjusted EBITDA $32,760 $25,601 $59,529 $47,777
=============== ======= ======= ======= =======
M/I Homes, Inc. and Subsidiaries
Selected Supplemental Financial and Operating Data
NEW CONTRACTS
-------------
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
% %
Region 2015 2014 Change 2015 2014 Change
------ ---- ---- ------ ---- ---- ------
Midwest 397 394 1% 817 768 6%
Southern 407 363 12% 821 699 17%
Mid-
Atlantic 296 259 14% 570 531 7%
--------- --- --- --- --- --- ---
Total 1,100 1,016 8% 2,208 1,998 11%
===== ===== ===== === ===== ===== ===
HOMES DELIVERED
---------------
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
% %
Region 2015 2014 Change 2015 2014 Change
------ ---- ---- ------ ---- ---- ------
Midwest 351 291 21% 599 550 9%
Southern 312 330 (5)% 587 605 (3)%
Mid-
Atlantic 256 273 (6)% 450 476 (5)%
--------- --- --- --- --- --- ---
Total 919 894 3% 1,636 1,631 - %
===== === === === ===== ===== === ===
BACKLOG
-------
June 30, 2015 June 30, 2014
------------- -------------
Dollars Average Dollars Average
Region Units (millions) Sales Price Units (millions) Sales Price
------ ----- --------- ----------- ----- --------- -----------
Midwest 723 $268 $371,000 763 $247 $324,000
Southern 684 $252 $368,000 543 $182 $336,000
Mid-
Atlantic 387 $137 $355,000 341 $117 $343,000
--------- --- ---- -------- --- ---- --------
Total 1,794 $657 $366,000 1,647 $546 $332,000
===== ===== ==== ======== ===== ==== ========
LAND POSITION SUMMARY
---------------------
June 30, 2015 June 30, 2014
------------- -------------
Lots Lots Under Lots Lots Under
Region Owned Contract Total Owned Contract Total
------ ----- -------- ----- ----- -------- -----
Midwest 3,260 4,186 7,446 3,342 2,688 6,030
Southern 4,596 4,653 9,249 5,003 4,143 9,146
Mid-
Atlantic 2,559 2,484 5,043 2,582 3,233 5,815
--------- ----- ----- ----- ----- ----- -----
Total 10,415 11,323 21,738 10,927 10,064 20,991
===== ====== ====== ====== ====== ====== ======
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SOURCE M/I Homes, Inc.
