M/I Homes Reports 2022 First Quarter Results

Rhea-AI Summary

M/I Homes, Inc. (NYSE:MHO) reported a strong first quarter for 2022, achieving record revenue of $860.8 million, up 4% year-over-year. Pre-tax income rose 11% to $122.3 million, and net income increased 8% to $91.8 million, equating to $3.16 per diluted share. Despite a 10% decline in homes delivered (1,823), the average sales price soared 16% to $457,000. Backlog units reached an all-time high of 5,526, with a backlog sales value of $2.8 billion, marking a 17% increase. Management emphasized strong demand for new homes amid labor and supply chain challenges.

Positive

• Record revenue of $860.8 million, a 4% increase year-over-year.
• Pre-tax income rose 11% to $122.3 million, a first quarter record.
• Net income increased 8% to $91.8 million, equating to $3.16 per diluted share.
• Backlog units grew 1% to an all-time high of 5,526, with a backlog sales value of $2.8 billion, a 17% increase.

Negative

• Homes delivered decreased 10% to 1,823 compared to 2021.
• New contracts decreased by 19%, totaling 2,514 contracts.

COLUMBUS, Ohio, April 27, 2022 /PRNewswire/ -- M/I Homes, Inc. (NYSE:MHO) announced results for the three months ended March 31, 2022.

2022 First Quarter Highlights:

• Revenue increased 4% to $860.8 million, a first quarter record
• Pre-tax income increased 11% to $122.3 million, a first quarter record
• Net income, a first quarter record, increased 8% to $91.8 million ($3.16 per diluted share) from 2021's $84.9 million ($2.85 per diluted share)
• Homes delivered decreased 10% to 1,823 and average sales price increased 16% to $457,000
• New contracts decreased 19% to 2,514 contracts
• Backlog units increased 1% to 5,526, an all-time quarterly record
• Backlog sales value increased 17% to $2.8 billion, an all-time quarterly record

For the first quarter of 2022, the Company reported pre-tax income of $122.3 million and net income of $91.8 million, or $3.16 per diluted share.  This compares to pre-tax income of $110.3 million and net income of $84.9 million, or $2.85 per diluted share, for the first quarter of 2021.

Homes delivered in 2022's first quarter decreased 10% to 1,823 homes.  This compares to 2,019 homes delivered in 2021's first quarter.  New contracts for the first quarter of 2022 decreased 19% over 2021's 3,109 new contracts.  Homes in backlog at March 31, 2022 had a total sales value of $2.8 billion, a 17% increase from a year ago and an all-time quarterly record. Backlog units at March 31, 2022 increased 1% to an all-time quarterly record 5,526 homes, with an average sales price of $505,000.  At March 31, 2021, backlog sales value was $2.4 billion, with backlog units of 5,479 and an average sales price of $433,000.  M/I Homes had 176 active communities at March 31, 2022 compared to 187 communities at March 31, 2021.  The Company's cancellation rate was 7% in both the first quarter of 2022 and 2021.

Robert H. Schottenstein, Chief Executive Officer and President, commented, "We had strong first quarter results highlighted by record levels of revenue, income and quarter-end backlog.  Our revenue increased 4% to $861 million, pre-tax income and diluted earnings per share each improved 11% to $122 million and $3.16 per share.  We achieved these record first quarter results due to a 16% increase in our average closing price, a 40 basis point improvement in our gross margin to 24.8% and a 50 basis point improvement in our overhead expense ratio. Our return on equity remained strong at 26%. We are particularly pleased with these results given the unprecedented labor challenges and supply chain issues that impacted our deliveries.  In addition, despite a 6% decline in community count and limiting sales in most of our communities, we achieved record backlog units and backlog sales value, with sales value improving 17% from a year ago."

Mr. Schottenstein continued, "We ended the quarter with record shareholders' equity of $1.7 billion, an increase of 26% from 2021, book value per share of $60, cash of $219 million, no borrowings on our $550 million credit facility and a homebuilding debt to capital ratio of 29%.  During the quarter, we also repurchased $15 million of our common shares. Demand for new homes remains strong despite the increase in interest rates.  Looking ahead, given our record backlog and strong backlog margins, along with a record number of new community openings planned this year, we are positioned to achieve another year of strong results in 2022."

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 2023.

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 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, 2021, 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,
	2022		2021
New contracts	2,514		3,109
Average community count	176		195
Cancellation rate	7%		7%
Backlog units	5,526		5,479
Backlog sales value	$  2,788,234		$  2,373,828
Homes delivered	1,823		2,019
Average home closing price	$            457		$            395
Homebuilding revenue:
Housing revenue	$     833,163		$     798,279
Land revenue	3,537		848
Total homebuilding revenue	$     836,700		$     799,127
Financial services revenue	24,111		29,649
Total revenue	$     860,811		$     828,776
Cost of sales - operations	647,702		626,585
Gross margin	$     213,109		$     202,191
General and administrative expense	48,783		45,205
Selling expense	41,421		45,689
Operating income	$     122,905		$     111,297
Other income	(16)		(160)
Interest expense	671		1,176
Income before income taxes	$     122,250		$     110,281
Provision for income taxes	30,411		25,415
Net income	$       91,839		$       84,866
Earnings per share:
Basic	$           3.23		$           2.92
Diluted	$           3.16		$           2.85
Weighted average shares outstanding:
Basic	28,424		29,015
Diluted	29,072		29,743

 

 

M/I Homes, Inc. and Subsidiaries Summary Balance Sheet and Other Information (unaudited) (Dollars in thousands, except per share amounts)
	As of
	March 31,
	2022		2021
Assets:
Total cash, cash equivalents and restricted cash (1)	$      218,606		$      292,900
Mortgage loans held for sale	200,455		217,524
Inventory:
Lots, land and land development	1,116,069		831,837
Land held for sale	8,377		4,085
Homes under construction	1,325,672		985,227
Other inventory	132,434		139,385
Total Inventory	$   2,582,552		$  1,960,534
Property and equipment - net	36,776		24,939
Investments in joint venture arrangements	57,309		33,822
Operating lease right-of-use assets	50,907		51,755
Goodwill	16,400		16,400
Deferred income tax asset	10,251		6,183
Other assets	133,255		105,503
Total Assets	$    3,306,511		$   2,709,560
Liabilities:
Debt - Homebuilding Operations:
Senior notes due 2025 - net	$                —		$      247,743
Senior notes due 2028 - net	395,524		394,750
Senior notes due 2030 - net	295,983		—
Notes payable - other	1,871		2,544
Total Debt - Homebuilding Operations	$      693,378		$      645,037
Notes payable bank - financial services operations	203,650		176,204
Total Debt	$      897,028		$      821,241
Accounts payable	281,387		198,216
Operating lease liabilities	51,546		52,029
Other liabilities	372,861		284,652
Total Liabilities	$   1,602,822		$   1,356,138
Shareholders' Equity	1,703,689		1,353,422
Total Liabilities and Shareholders' Equity	$   3,306,511		$   2,709,560
Book value per common share	$          60.22		$          46.37
Homebuilding debt to capital ratio (2)	29%		32%

(1)	Includes $0.9 million and $0.5 million of restricted cash and cash held in escrow for the quarters ended March 31, 2022 and 2021, 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 value of our homebuilding debt outstanding plus shareholders' equity.

 

 

M/I Homes, Inc. and Subsidiaries Selected Supplemental Financial and Operating Data (unaudited) (Dollars in thousands)
	Three Months Ended
	March 31,
	2022		2021
Cash provided by operating activities	$         69,326		$          75,168
Cash (used in) provided by investing activities	$          (6,634)		$               623
Cash used in by financing activities	$        (80,454)		$         (43,701)
Land/lot purchases	$          93,948		$          92,358
Land development spending	$        100,697		$          71,195
Land sale revenue	$            3,537		$               848
Land sale gross profit	$               967		$               250
Financial services pre-tax income	$          13,055		$          19,693

 

M/I Homes, Inc. and Subsidiaries Non-GAAP Financial Results (1) (Dollars in thousands)
	Three Months Ended
	March 31,
	2022		2021
Net income	$         91,839		$         84,866
Add:
Provision for income taxes	30,411		25,415
Interest (income) expense-net of interest income	(557)		275
Interest amortized to cost of sales	7,327		8,205
Depreciation and amortization	4,188		4,110
Non-cash charges	1,831		2,102
Adjusted EBITDA	$       135,039		$       124,973

(1)

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
									March 31,
													%
Region											2022	2021	Change
Northern											1,190	1,306	(9) %
Southern											1,324	1,803	(27) %
Total											2,514	3,109	(19) %
		HOMES DELIVERED
									Three Months Ended
									March 31,
													%
Region											2022	2021	Change
Northern											760	801	(5) %
Southern											1,063	1,218	(13) %
Total											1,823	2,019	(10) %
		BACKLOG
		March 31, 2022							March 31, 2021
			Dollars		Average						Dollars		Average
Region		Units	(millions)		Sales Price				Units		(millions)		Sales Price
Northern		2,320	$        1,145		$    494,000				2,320		$        1,049		$   452,000
Southern		3,206	$        1,643		$    513,000				3,159		$        1,325		$   419,000
Total		5,526	$        2,788		$    505,000				5,479		$        2,374		$   433,000
		LAND POSITION SUMMARY
		March 31, 2022								March 31, 2021
		Lots	Lots Under						Lots		Lots Under
Region		Owned	Contract		Total				Owned		Contract		Total
Northern		7,359	7,906		15,265				6,242		8,489		14,731
Southern		16,871	13,646		30,517				10,522		16,730		27,252
Total		24,230	21,552		45,782				16,764		25,219		41,983

 

 

 

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SOURCE M/I Homes, Inc.

FAQ

What were M/I Homes' financial results for Q1 2022?

M/I Homes reported record revenue of $860.8 million, pre-tax income of $122.3 million, and net income of $91.8 million for Q1 2022.

How many homes did M/I Homes deliver in Q1 2022?

In Q1 2022, M/I Homes delivered 1,823 homes, a decrease of 10% compared to the same quarter in 2021.

What is the backlog sales value for M/I Homes as of March 31, 2022?

As of March 31, 2022, M/I Homes reported a backlog sales value of $2.8 billion, which is a 17% increase from the previous year.

How did M/I Homes' average sales price change in Q1 2022?

The average sales price for M/I Homes in Q1 2022 increased by 16% to $457,000.

What challenges did M/I Homes face in the first quarter of 2022?

M/I Homes faced unprecedented labor challenges and supply chain issues that impacted home deliveries.