M/I HOMES, INC. COLUMBUS, Ohio, April 23, 2015 /PRNewswire/ -- M/I Homes, Inc. (NYSE: MHO) announced results for the first quarter ended March 31, 2015.
2015 First Quarter Highlights:
-- Pre-tax income of $15.7 million - a 26% increase over 2014's first
quarter
-- Revenue increased 12% to $263 million; average closing price increased
9%
-- Gross margin of 21.7%, up 170 basis points from 2014's fourth quarter
-- Net income of $9.6 million ($0.31 per diluted share)
-- New contracts increased 13%; homes delivered declined 3%
-- Backlog sales value increased 16%
-- Net debt to net capital ratio of 48%
For the first quarter of 2015, the Company reported net income of $9.6 million, or $0.31 per diluted share. This compares to $7.3 million or $0.23 per diluted share during the first quarter of 2014, excluding a $5.3 million benefit in 2014 for the reversal of a portion of our state deferred tax asset valuation allowance.
New contracts for the first quarter were 1,108, a 13% increase from the 982 recorded in 2014's first quarter. Homes delivered in the first quarter were 717, a decrease of 3% from the 737 reported for the same period of 2014. The backlog of homes at March 31, 2015 had a total sales value of $577 million, a 16% increase over a year-ago, with backlog units of 1,613 and an average sales price of $358,000. At March 31, 2014 backlog sales value was $496 million, with backlog units of 1,525 and an average sales price of $326,000. M/I Homes had 153 active communities at March 31, 2015 compared to 158 at March 31, 2014 and 150 at December 31, 2014. The Company's cancellation rate was 13% in the first quarter of 2015 compared to 16% in 2014's first quarter.
Robert H. Schottenstein, Chief Executive Officer and President, commented, "We are pleased with our first quarter results highlighted by a 26% increase in pre-tax income, a 16% increase in backlog sales value and a 13% increase in new contracts. A number of factors contributed to our improved profitability including a 12% increase in revenue, gross margin of 21.7% (170 basis points better than 2014's fourth quarter), and a 50 basis point improvement in our overhead expense ratio compared to last year's first quarter. From a sales standpoint, we were particularly pleased to increase our new contracts by 13% given that our community count was slightly lower than a year ago. We are on track to open approximately 70 new communities this year and to increase our year end community count by 15%."
Mr. Schottenstein continued, "Our financial condition is strong, with shareholders' equity of $554 million and net debt to net capital of 48%. 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 increasing 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 April 2016.
M/I Homes, Inc. is one of the nation's leading builders of single-family homes, having delivered over 91,100 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
March 31,
2015 2014
----
New
contracts 1,108 982
Average
community
count 152 158
Cancellation
rate 13% 16%
Backlog
units 1,613 1,525
Backlog
value $576,753 $496,428
Homes
delivered 717 737
Average
home
closing
price $325 $299
-------- ---- ----
Homebuilding revenue:
Housing
revenue $233,000 $220,710
Land
revenue 22,061 6,266
-------- ------ -----
Total
homebuilding
revenue $255,061 $226,976
Financial
services
revenue 8,098 7,865
--------- ----- -----
Total
revenue $263,159 $234,841
Cost of
sales -
operations 206,183 183,964
----------- ------- -------
Gross
margin 56,976 50,877
General
and
administrative
expense 19,334 18,315
Selling
expense 17,686 15,969
-------- ------ ------
Operating
income 19,956 16,593
Equity in
income
of
unconsolidated
joint
ventures (198) (62)
Interest
expense 4,462 4,170
Income
before
income
taxes 15,692 12,485
Provision
(benefit)
for
income
taxes 6,124 (147)
Net
income $9,568 $12,632
Preferred
dividends $1,219 $1,219
---------- ------
Net
income
to
common
shareholders $8,349 $11,413
------------- ------ -------
Earnings per share:
Basic $0.34 $0.47
Diluted $0.31 $0.41
------- ----- -----
Weighted average shares
outstanding:
Basic 24,514 24,417
Diluted 29,975 29,870
------- ------ ------
M/I Homes, Inc. and Subsidiaries
Summary Balance Sheet and Other Information (unaudited)
(Dollars in thousands, except per share amounts)
As of
March 31,
2015 2014
---- ----
Assets:
Total cash and cash
equivalents(1) $36,098 $100,911
Mortgage loans held
for sale 79,180 55,750
Inventory:
Lots, land and land
development 470,317 337,137
Land held for sale 4,374 3,623
Homes under
construction 403,965 325,439
Other inventory 80,414 57,428
--------------- ------ ------
Total Inventory $959,070 $723,627
Property and
equipment -net 11,081 10,506
Investments in
unconsolidated
joint ventures 29,449 44,847
Deferred income
taxes, net of
valuation allowance 88,748 111,214
Other assets 47,138 38,048
------------ ------ ------
Total Assets $1,250,764 $1,084,903
============ ========== ==========
Liabilities:
Debt - Homebuilding Operations:
Senior notes $228,569 $228,169
Convertible senior
subordinated notes
due 2017 57,500 57,500
Convertible senior
subordinated notes
due 2018 86,250 86,250
Notes payable bank -
homebuilding 90,000 -
Notes payable -
other 8,876 7,757
--------------- ----- -----
Total Debt -
Homebuilding
Operations $471,195 $379,676
Notes payable bank -
financial services
operations 71,723 51,532
-------------------- ------ ------
Total Debt $542,918 $431,208
Accounts payable 69,452 71,376
Other liabilities 84,781 75,728
----------------- ------ ------
Total Liabilities $697,151 $578,312
----------------- -------- --------
Shareholders' Equity 553,613 506,591
-------------------- ------- -------
Total Liabilities
and Shareholders'
Equity $1,250,764 $1,084,903
================== ========== ==========
Book value per
common share $20.54 $18.66
Net debt/net
capital ratio(2) 48% 39%
----------------- --- ---
(1) 2015 and 2014 amounts include $6.1 million and $11.6 million of restricted cash and cash held in escrow, respectively.
(2) 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' equity.
M/I Homes, Inc. and Subsidiaries
Selected Supplemental Financial and Operating Data
(Dollars in thousands)
Three Months Ended
March 31,
2015 2014
---- ----
Adjusted
EBITDA(1) $26,769 $22,176
Cash flow used
in operating
activities $(29,276) $(2,103)
Cash used in
investing
activities $(845) $(8,879)
Cash provided by
(used in)
financing
activities $44,544 $(28,383)
Land/lot
purchases $51,200 $53,003
Land development
spending $37,681 $17,530
Land gross
margin $5,241 $1,321
Financial
services pre-
tax income $4,993 $4,711
-------------- ------ ------
(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
March 31,
2015 2014
---- ----
Net income $9,568 $12,632
Add:
Provision
(benefit) for
income taxes 6,124 (147)
Interest
expense net of
interest
income 4,103 3,777
Interest
amortized to
cost of sales 3,539 3,108
Depreciation
and
amortization 2,306 1,912
Non-cash
charges 1,129 894
-------- ----- ---
Adjusted EBITDA $26,769 $22,176
=============== ======= =======
M/I Homes, Inc. and Subsidiaries
Selected Supplemental Financial and Operating Data
NEW CONTRACTS
-------------
Three Months Ended
March 31,
---------
%
Region 2015 2014 Change
------ ---- ---- ------
Midwest 420 374 12%
Southern 414 336 23%
Mid-Atlantic 274 272 1%
------------ --- --- ---
Total 1,108 982 13%
===== ===== === ===
HOMES DELIVERED
---------------
Three Months Ended
March 31,
---------
%
Region 2015 2014 Change
------ ---- ---- ------
Midwest 248 259 (4)%
Southern 275 275 - %
Mid-Atlantic 194 203 (4)%
------------ --- --- ---
Total 717 737 (3)%
===== === === ===
BACKLOG
-------
March 31, 2015 March 31, 2014
-------------- --------------
Dollars Average Dollars Average
Region Units (millions) Sales Price Units (millions) Sales Price
------ ----- --------- ----------- ----- --------- -----------
Midwest 677 $242 $357,000 660 $209 $317,000
Southern 589 $211 $358,000 510 $169 $331,000
Mid-
Atlantic 347 $124 $358,000 355 $118 $334,000
--------- --- ---- -------- --- ---- --------
Total 1,613 $577 $358,000 1,525 $496 $326,000
===== ===== ==== ======== ===== ==== ========
LAND POSITION SUMMARY
---------------------
March 31, 2015 March 31, 2014
-------------- --------------
Lots Lots Under Lots Lots Under
Region Owned Contract Total Owned Contract Total
------ ----- -------- ----- ----- -------- -----
Midwest 3,386 2,272 5,658 3,532 2,609 6,141
Southern 4,917 3,845 8,762 4,823 4,306 9,129
Mid-
Atlantic 2,633 2,397 5,030 2,287 3,408 5,695
--------- ----- ----- ----- ----- ----- -----
Total 10,936 8,514 19,450 10,642 10,323 20,965
===== ====== ===== ====== ====== ====== ======
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SOURCE M/I Homes, Inc.
