M/I HOMES, INC. 
By COLUMBUS, Ohio, Jan. 29, 2014 /PRNewswire/ -- M/I Homes, Inc. (NYSE:MHO) announced results for its fourth quarter and year ended December 31, 2013.
2013 Fourth-Quarter Results:
-- Pre-tax income of $15.3 million, up 184% from 2012's fourth quarter
-- New contracts increased 18%
-- Homes delivered increased 26%
-- Backlog sales value increased 44%
-- Cash balance of $142.6 million at year-end
-- Net debt to net capital ratio of 39%
2013 Full-Year Results:
-- Pre-tax income of $41.3 million, an increase of 224% from 2012
-- Net income of $151.4 million, including a $112.8 million deferred tax
asset valuation allowance reversal
-- Diluted earnings per share of $5.24 ($1.32 per share excluding the
deferred tax asset valuation allowance reversal)
-- New contracts increased 25%
-- Homes delivered increased 26%
-- Control 19,831 lots, an increase of 40% from December 31, 2012
For the fourth quarter of 2013, the Company reported net income of $14.3 million, or $0.48 per diluted share. This compares to net income of $5.0 million for the fourth quarter of 2012, or $0.23 per diluted share. Net income for the fourth quarter of 2013 includes $1.6 million of pre-tax asset impairment charges and a $1.2 million non-operating benefit from the reversal of a portion of our state deferred tax asset valuation allowance. Net income for the fourth quarter of 2012 also included $1.6 million of pre-tax asset impairment charges. For the year ended December 31, 2013, the Company reported net income of $38.6 million (excluding a non-operating benefit of $112.8 million from the reversal of a majority of our deferred tax asset valuation allowance) or $1.32 per diluted share, compared to $13.3 million, or $0.67 per diluted share for the year ended December 31, 2012.
New contracts for 2013's fourth quarter were 793 - increasing 18% from 2012's fourth quarter of 673. For 2013, new contracts increased 25% from 3,020 in 2012 to 3,787 in 2013. M/I Homes had 157 active communities at December 31, 2013 compared to 131 a year ago - a 20% increase. The Company's cancellation rate was 19% in the fourth quarter of 2013, compared to 21% in 2012's fourth quarter. Homes delivered of 1,120 in 2013's fourth quarter were 26% higher than 2012's 887 homes delivered. Homes delivered for the twelve months ended December 31, 2013 reached their highest level in seven years, increasing 26% to 3,472 from 2012's deliveries of 2,765. The backlog of homes at December 31, 2013 had a total sales value of $408 million, a 44% increase over a year-ago, with backlog units of 1,280 and an average sales price of $319,000. At December 31, 2012, backlog total sales value was $283 million, with backlog units of 965 and an average sales price of $293,000.
Robert H. Schottenstein, Chief Executive Officer and President, commented, "2013 was a very good year for M/I Homes, with pre-tax income increasing over 200%, revenue growing by 36% and new contracts, homes delivered, backlog units, and backlog sales value each improving by over 25% from 2012. While our results were aided by improving housing market conditions, they also reflect our success in strategically shifting and diversifying our geographic footprint. In 2013, we also gained market share in nearly all of our markets as we opened 65 new communities and increased our community count by 20% from a year-ago. With our fourth quarter new contracts up 18%, we ended 2013 with 315 more units in backlog and a 44% increase in backlog sales value than in 2012."
Mr. Schottenstein continued, "We begin 2014 with a strong backlog, a strong balance sheet, and a solid land position - controlling 40% more lots than we did a year ago. We ended 2013 with cash of $143 million, shareholders' equity of $493 million, no borrowings under our $200 million credit facility, and a net debt to net capital ratio of 39%. We remain optimistic about our business and will continue to focus on increasing our profitability and growing our market share."
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 January 2015.
M/I Homes, Inc. is one of the nation's leading builders of single-family homes, having delivered over 86,700 homes. The Company's homes are marketed and sold under the trade names M/I Homes, Showcase Homes, and Triumph Homes. The Company has homebuilding operations in Columbus and Cincinnati, Ohio; Chicago, Illinois; Indianapolis, Indiana; Tampa and Orlando, Florida; Austin, Dallas/Ft 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 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 in the Company's Annual Report on Form 10-K for the year ended December 31, 2012, 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 in this press release will increase with the passage of time. The Company undertakes 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.
In this press release, we use adjusted EBITDA, a non-GAAP financial measure. Please see the "Non-GAAP Financial Results / Reconciliation" table below.
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,
2013 2012 2013 2012
---- ---- ---- ----
New contracts 793 673 3,787 3,020
Average community
count 152 130 142 125
Cancellation rate 19% 21% 16% 17%
Backlog units 1,280 965
Backlog value $408,017 $282,540
Homes delivered 1,120 887 3,472 2,765
--------------- ----- --- ----- -----
Average home closing
price $292 $273 $286 $264
-------------------- ---- ---- ---- ----
Homebuilding revenue:
Housing revenue $326,702 $242,373 $992,078 $728,772
Land revenue 3,409 905 16,165 9,877
------------ ----- --- ------ -----
Total homebuilding
revenue $330,111 $243,278 $1,008,243 $738,649
------------------ -------- -------- ---------- --------
Financial services
revenue 6,196 7,633 28,539 23,256
------------------ ----- ----- ------ ------
Total revenue $336,307 $250,911 $1,036,782 $761,905
------------- -------- -------- ---------- --------
Cost of sales -
operations 267,709 201,647 824,508 613,540
Cost of sales -
impairment 1,568 1,626 5,805 3,502
Cost of sales - other - - - (3,000)
--------------------- --- --- --- ------
Gross margin 67,030 47,638 206,469 147,863
General and
administrative
expense 27,105 20,328 79,494 62,627
Selling expense 20,899 17,923 68,282 56,406
--------------- ------ ------ ------ ------
Operating income 19,026 9,387 58,693 28,830
Income from
unconsolidated joint
ventures (28) - (306) -
Interest expense 3,752 4,005 15,938 16,071
Loss on early
extinguishment of
debt - - 1,726 -
------------------ --- --- ----- ---
Income before income
taxes 15,302 5,382 41,335 12,759
(Benefit) provision
for income taxes 1,041 367 (110,088) (588)
Net income $14,261 $5,015 $151,423 $13,347
---------- ------- ------ -------- -------
Excess of fair value over book value of
preferred shares
redeemed - - 2,190 -
Preferred dividends 1,218 - 3,656 -
------------------- ----- --- ----- ---
Net income to commons
shareholders $13,043 $5,015 $145,577 $13,347
--------------------- ------- ------ -------- -------
Earnings per share:
Basic $0.54 $0.23 $6.11 $0.68
Diluted $0.48 $0.23 $5.24 $0.67
------- ----- ----- ----- -----
Weighted average shares outstanding:
Basic 24,358 21,545 23,822 19,651
Diluted 29,783 21,961 28,763 19,891
------- ------ ------ ------ ------
M/I Homes, Inc. and Subsidiaries
Summary Balance Sheet and Other Information (unaudited)
(Dollars in thousands, except per share amounts)
As of
December 31,
2013 2012
---- ----
Assets:
Total cash and
cash
equivalents(1) $142,627 $154,178
Mortgage loans
held for sale 81,810 71,121
Inventory:
Lots, land and
land
development 323,673 257,397
Land held for
sale 8,059 8,442
Homes under
construction 305,499 221,432
Other inventory 53,703 69,546
--------------- ------ ------
Total Inventory $690,934 $556,817
--------------- -------- --------
Property and
equipment -
net 10,536 10,439
Investments in
unconsolidated
joint ventures 35,266 11,732
Deferred income
taxes, net of
valuation
allowance(2) 110,911 -
Other assets 38,092 27,013
------------ ------ ------
Total Assets $1,110,176 $831,300
============ ========== ========
Liabilities:
Debt - Homebuilding Operations:
Senior notes $228,070 $227,670
Convertible
senior
subordinated
notes due 2017 57,500 57,500
Convertible
senior
subordinated
notes due 2018 86,250 -
Notes payable -
other 7,790 11,105
--------------- ----- ------
Total Debt -
Homebuilding
Operations $379,610 $296,275
------------- -------- --------
Notes payable
bank -
financial
services
operations 80,029 67,957
------------- ------ ------
Total Debt $459,639 $364,232
---------- -------- --------
Accounts
payable 70,226 47,690
Other
liabilities 87,508 83,950
------------ ------ ------
Total
Liabilities $617,373 $495,872
------------ -------- --------
Shareholders'
Equity 492,803 335,428
------------- ------- -------
Total
Liabilities
and
Shareholders'
Equity $1,110,176 $831,300
============== ========== ========
Book value per
common share $18.18 $10.86
Net debt/net
capital
ratio(3) 39% 39%
------------ --- ---
(1) 2013 and 2012 amounts include
$13.9 million and $8.7 million of
restricted cash and cash held in
escrow, respectively.
(2) 2013 and 2012 amounts include
gross deferred tax assets of
$120.2 million and $135.7
million, respectively, net of
valuation allowances of $9.3
million and $135.7 million,
respectively.
(3) 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 Twelve Months Ended
December 31, December 31,
2013 2012 2013 2012
---- ---- ---- ----
Adjusted
EBITDA(1) $26,537 $18,215 $89,204 $55,966
Cash used in
operating
activities $(33,538) $(30,674) $(73,974) $(46,995)
Cash (used in)
provided by
investing
activities $(2,652) $(555) $(35,554) $25,322
Cash provided by
financing
activities $22,440 $16,962 $92,755 $107,378
Land/lot
purchases $60,138 $58,083 $216,841 $138,735
Land development
spending $39,306 $19,229 $106,762 $56,389
Financial
services pre-
tax income $1,980 $3,503 $14,416 $11,015
Deferred tax
expense $6,357 $1,355 $15,547 $5,076
Deferred tax
asset valuation
benefit $(5,622) $(1,355) $(126,458) $(5,076)
---------------- ------- ------- --------- -------
(1) See "Non-GAAP Financial Results /
Reconciliations" table below.
Impairment and Abandonments by Region
(Dollars in thousands)
Three Months Ended Twelve Months Ended
December 31, December 31,
Impairment by Region: 2013 2012 2013 2012
--------------------- ---- ---- ---- ----
Midwest $1,568 $1,626 $5,805 $3,502
Southern - - - -
Mid-Atlantic - - - -
------------ --- --- --- ---
Total $1,568 $1,626 $5,805 $3,502
===== ====== ====== ====== ======
Abandonments by Region:
Midwest $ - $ - $ - $36
Southern - - - 110
Mid-Atlantic - - - 110
------------ --- --- --- ---
Total $ - $ - $ - $256
===== === === === === === === ====
M/I Homes, Inc. and Subsidiaries
Non-GAAP Financial Results / Reconciliations
(Dollars in thousands)
Three Months Ended Twelve Months Ended
December 31, December 31,
2013 2012 2013 2012
---- ---- ---- ----
Net income $14,261 $5,015 $151,423 $13,347
Add:
(Benefit) provision for income taxes 1,041 367 (110,088) (588)
Interest expense, net of interest
income 3,299 3,655 14,508 14,607
Interest amortized to cost of sales 3,880 4,236 15,175 13,366
Depreciation and amortization 1,979 2,980 8,311 9,742
Non-cash charges 2,077 1,962 9,875 5,492
---------------- ----- ----- ----- -----
Adjusted EBITDA $26,537 $18,215 $89,204 $55,966
=============== ======= ======= ======= =======
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 2013 2012 Change 2013 2012 Change
------ ---- ---- ------ ---- ---- ------
Midwest 302 231 31% 1,364 1,144 19%
Southern 247 259 (5)% 1,290 966 34%
Mid-
Atlantic 244 183 33% 1,133 910 25%
--------- --- --- --- ----- --- ---
Total 793 673 18% 3,787 3,020 25%
===== === === === ===== ===== ===
HOMES DELIVERED
---------------
Three Months Ended Twelve Months Ended
December 31, December 31,
------------ ------------
% %
Region 2013 2012 Change 2013 2012 Change
------ ---- ---- ------ ---- ---- ------
Midwest 400 318 26% 1,237 1,113 11%
Southern 388 280 39% 1,182 823 44%
Mid-
Atlantic 332 289 15% 1,053 829 27%
--------- --- --- --- ----- --- ---
Total 1,120 887 26% 3,472 2,765 26%
===== ===== === === ===== ===== ===
BACKLOG
-------
December 31, 2013 December 31, 2012
----------------- -----------------
Dollars Average Dollars Average
Region Units (millions) Sales Price Units (millions) Sales Price
------ ----- --------- ----------- ----- --------- -----------
Midwest 545 $170 $311,000 418 $113 $270,000
Southern 449 $138 $307,000 341 $96 $280,000
Mid-
Atlantic 286 $100 $351,000 206 $74 $360,000
--------- --- ---- -------- --- --- --------
Total 1,280 $408 $319,000 965 $283 $293,000
===== ===== ==== ======== === ==== ========
LAND POSITION SUMMARY
---------------------
December 31, 2013 December 31, 2012
----------------- -----------------
Lots Lots Under Lots Lots Under
Region Owned Contract Total Owned Contract Total
------ ----- -------- ----- ----- -------- -----
Midwest 3,731 2,366 6,097 3,384 1,629 5,013
Southern 4,337 4,601 8,938 2,160 2,827 4,987
Mid-
Atlantic 2,031 2,765 4,796 1,874 2,329 4,203
--------- ----- ----- ----- ----- ----- -----
Total 10,099 9,732 19,831 7,418 6,785 14,203
===== ====== ===== ====== ===== ===== ======
SOURCE M/I Homes, Inc.
