M/I Homes Reports 2023 Second Quarter Results
- New contracts increased by 21% and revenue reached $1.0 billion, indicating a strong performance in the second quarter.
- Shareholders' equity reached a record of $2.3 billion, showing financial strength and stability.
- The company remains optimistic about the future and believes the industry will continue to benefit from strong fundamentals.
- Delivered homes decreased by 7%, which may be a cause for concern about the company's ability to meet demand.
- Pre-tax and net income declined by 15% and 14% respectively, compared to the previous year, which could impact investor confidence.
- Backlog units and sales value showed a significant decrease from the previous year, indicating potential challenges in the housing market.
2023 Second Quarter Highlights:
- New contracts increased
21% to 2,197 contracts - Delivered 1,990 homes, down
7% from 2022's 2,133 homes delivered - Revenue of
$1.0 billion 3% from 2022's second quarter record level - Pre-tax income of
$155.4 million 15% from 2022's record of$182.2 million - Net income of
$118.0 million $4.12 14% from 2022's record of$136.8 million - Shareholders' equity reached a record of
$2.3 billion 26% increase from a year ago, with book value per share of$83 - Return on equity of
23%
For the second quarter of 2023, the Company reported pre-tax income of
Homes delivered in 2023's second quarter decreased
Robert H. Schottenstein, Chief Executive Officer and President, commented, "We had a very strong second quarter. Despite higher interest rates and uncertain economic conditions, we were very pleased with our new contracts, homes delivered, margins and income. New contracts improved by
Mr. Schottenstein continued, "Our financial condition remains strong. We ended the quarter with record shareholders' equity of
The Company will broadcast live its earnings conference call today at 10:30 A.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 2024.
M/I Homes, Inc. is one of the nation's leading homebuilders of single-family homes. The Company has homebuilding operations in
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, 2022, 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 | Six Months Ended | ||||||
June 30, | June 30, | ||||||
2023 | 2022 | 2023 | 2022 | ||||
New contracts | 2,197 | 1,820 | 4,368 | 4,334 | |||
Average community count | 198 | 172 | 197 | 173 | |||
Cancellation rate | 10 % | 11 % | 12 % | 9 % | |||
Backlog units | 3,508 | 5,213 | 3,508 | 5,213 | |||
Backlog sales value | $ 1,777,657 | $ 2,706,586 | $ 1,777,657 | $ 2,706,586 | |||
Homes delivered | 1,990 | 2,133 | 3,997 | 3,956 | |||
Average home closing price | $ 493 | $ 477 | $ 489 | $ 468 | |||
Homebuilding revenue: | |||||||
Housing revenue | $ 980,198 | $ 1,017,906 | $ 1,955,144 | $ 1,851,069 | |||
Land revenue | 8,549 | 3,374 | 8,852 | 6,911 | |||
Total homebuilding revenue | $ 988,747 | $ 1,021,280 | $ 1,963,996 | $ 1,857,980 | |||
Financial services revenue | 25,266 | 19,374 | 50,547 | 43,485 | |||
Total revenue | $ 1,014,013 | $ 1,040,654 | $ 2,014,543 | $ 1,901,465 | |||
Cost of sales - operations | 755,829 | 756,367 | 1,521,733 | 1,404,069 | |||
Gross margin | $ 258,184 | $ 284,287 | $ 492,810 | $ 497,396 | |||
General and administrative expense | 55,654 | 55,216 | 106,614 | 103,999 | |||
Selling expense | 51,871 | 46,206 | 100,951 | 87,627 | |||
Operating income | $ 150,659 | $ 182,865 | $ 285,245 | $ 305,770 | |||
Other income | (28) | (1) | (35) | (17) | |||
Interest (income) expense - net | (4,670) | 693 | (6,059) | 1,364 | |||
Income before income taxes | $ 155,357 | $ 182,173 | $ 291,339 | $ 304,423 | |||
Provision for income taxes | 37,356 | 45,335 | 70,272 | 75,746 | |||
Net income | $ 118,001 | $ 136,838 | $ 221,067 | $ 228,677 | |||
Earnings per share: | |||||||
Basic | $ 4.25 | $ 4.88 | $ 7.98 | $ 8.10 | |||
Diluted | $ 4.12 | $ 4.79 | $ 7.77 | $ 7.93 | |||
Weighted average shares outstanding: | |||||||
Basic | 27,792 | 28,041 | 27,698 | 28,231 | |||
Diluted | 28,624 | 28,590 | 28,469 | 28,826 | |||
M/I Homes, Inc. and Subsidiaries Summary Balance Sheet and Other Information (unaudited) (Dollars in thousands, except per share amounts) | |||
As of | |||
June 30, | |||
2023 | 2022 | ||
Assets: | |||
Total cash, cash equivalents and restricted cash (1) | $ 668,287 | $ 188,755 | |
Mortgage loans held for sale | 190,845 | 194,450 | |
Inventory: | |||
Lots, land and land development | 1,296,486 | 1,136,380 | |
Land held for sale | 15,183 | 10,524 | |
Homes under construction | 1,207,759 | 1,514,965 | |
Other inventory | 167,586 | 154,396 | |
Total Inventory | $ 2,687,014 | $ 2,816,265 | |
Property and equipment - net | 35,495 | 36,150 | |
Investments in joint venture arrangements | 41,988 | 55,625 | |
Operating lease right-of-use assets | 58,404 | 52,328 | |
Goodwill | 16,400 | 16,400 | |
Deferred income tax asset | 18,019 | 10,251 | |
Other assets | 145,297 | 123,100 | |
Total Assets | $ 3,861,749 | $ 3,493,324 | |
Liabilities: | |||
Debt - Homebuilding Operations: | |||
Senior notes due 2028 - net | $ 396,492 | $ 395,718 | |
Senior notes due 2030 - net | 296,613 | 296,109 | |
Notes payable - other | — | 1,001 | |
Total Debt - Homebuilding Operations | $ 693,105 | $ 692,828 | |
Notes payable bank - financial services operations | 186,396 | 194,602 | |
Total Debt | $ 879,501 | $ 887,430 | |
Accounts payable | 264,656 | 329,384 | |
Operating lease liabilities | 59,461 | 53,058 | |
Other liabilities | 359,672 | 405,185 | |
Total Liabilities | $ 1,563,290 | $ 1,675,057 | |
Shareholders' Equity | 2,298,459 | 1,818,267 | |
Total Liabilities and Shareholders' Equity | $ 3,861,749 | $ 3,493,324 | |
Book value per common share | $ 82.73 | $ 65.50 | |
Homebuilding debt to capital ratio (2) | 23 % | 28 % | |
(1) | Includes |
(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 | Six Months Ended | ||||||
June 30, | June 30, | ||||||
2023 | 2022 | 2023 | 2022 | ||||
Cash provided by operating activities | $ 166,190 | $ 9,214 | $ 417,689 | $ 78,540 | |||
Cash provided by (used in) investing activities | $ 1,991 | $ (4,829) | $ (2,802) | $ (11,463) | |||
Cash used in financing activities | $ (42,458) | $ (34,236) | $ (58,142) | $ (114,690) | |||
Land/lot purchases | $ 96,068 | $ 120,667 | $ 141,714 | $ 214,615 | |||
Land development spending | $ 108,914 | $ 106,543 | $ 201,333 | $ 207,240 | |||
Land sale revenue | $ 8,549 | $ 3,374 | $ 8,852 | $ 6,911 | |||
Land sale gross profit | $ 892 | $ 591 | $ 889 | $ 1,558 | |||
Financial services pre-tax income | $ 11,159 | $ 8,667 | $ 23,800 | $ 21,722 | |||
M/I Homes, Inc. and Subsidiaries Non-GAAP Financial Results (1) (Dollars in thousands) | |||||||
Three Months Ended | Six Months Ended | ||||||
June 30, | June 30, | ||||||
2023 | 2022 | 2023 | 2022 | ||||
Net income | $ 118,001 | $ 136,838 | $ 221,067 | $ 228,677 | |||
Add: | |||||||
Provision for income taxes | 37,356 | 45,335 | 70,272 | 75,746 | |||
Interest (income) expense - net | (6,980) | (750) | (10,653) | (1,307) | |||
Interest amortized to cost of sales | 8,734 | 7,536 | 16,824 | 14,863 | |||
Depreciation and amortization | 4,266 | 4,286 | 8,663 | 8,474 | |||
Non-cash charges | 2,301 | 2,018 | 4,324 | 3,849 | |||
Adjusted EBITDA | $ 163,678 | $ 195,263 | $ 310,497 | $ 330,302 | |||
(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 | Six Months Ended | |||||||||||
June 30, | June 30, | |||||||||||
% | % | |||||||||||
Region | 2023 | 2022 | Change | 2023 | 2022 | Change | ||||||
Northern | 949 | 722 | 31 % | 1,777 | 1,912 | (7) % | ||||||
Southern | 1,248 | 1,098 | 14 % | 2,591 | 2,422 | 7 % | ||||||
Total | 2,197 | 1,820 | 21 % | 4,368 | 4,334 | 1 % | ||||||
HOMES DELIVERED | ||||||||||||
Three Months Ended | Six Months Ended | |||||||||||
June 30, | June 30, | |||||||||||
% | % | |||||||||||
Region | 2023 | 2022 | Change | 2023 | 2022 | Change | ||||||
Northern | 783 | 1,000 | (22) % | 1,580 | 1,760 | (10) % | ||||||
Southern | 1,207 | 1,133 | 7 % | 2,417 | 2,196 | 10 % | ||||||
Total | 1,990 | 2,133 | (7) % | 3,997 | 3,956 | 1 % | ||||||
BACKLOG | ||||||||||||
June 30, 2023 | June 30, 2022 | |||||||||||
Dollars | Average | Dollars | Average | |||||||||
Region | Units | (millions) | Sales Price | Units | (millions) | Sales Price | ||||||
Northern | 1,253 | $ 631 | $ 504,000 | 2,042 | $ 1,036 | $ 507,000 | ||||||
Southern | 2,255 | $ 1,147 | $ 509,000 | 3,171 | $ 1,670 | $ 527,000 | ||||||
Total | 3,508 | $ 1,778 | $ 507,000 | 5,213 | $ 2,706 | $ 519,000 | ||||||
LAND POSITION SUMMARY | ||||||||
June 30, 2023 | June 30, 2022 | |||||||
Lots | Lots Under | Lots | Lots Under | |||||
Region | Owned | Contract | Total | Owned | Contract | Total | ||
Northern | 7,545 | 7,199 | 14,744 | 7,601 | 7,764 | 15,365 | ||
Southern | 15,893 | 10,695 | 26,588 | 17,196 | 15,285 | 32,481 | ||
Total | 23,438 | 17,894 | 41,332 | 24,797 | 23,049 | 47,846 | ||
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SOURCE M/I Homes, Inc.
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