PR Newswire | Apr 28, 2021 08:31AM EDT

04/28 07:30 CDT

M/I Homes Reports 2021 First Quarter Results COLUMBUS, Ohio, April 28, 2021

COLUMBUS, Ohio, April 28, 2021 /PRNewswire/ -- M/I Homes, Inc. (NYSE:MHO) announced results for the three months ended March 31, 2021.

2021 First Quarter Highlights:

* New contracts increased 49% to 3,109 contracts, an all-time quarterly record * Backlog units increased 68% to 5,479, an all-time quarterly record * Backlog sales value reached $2.4 billion, an all-time quarterly record * Homes delivered increased 35% to 2,019, a first quarter record * Revenue increased 43% to $828.8 million, a first quarter record * Pre-tax income increased 167% to $110.3 million, an all-time quarterly record * First quarter net income of $84.9 million ($2.85 per diluted share), a 167% increase compared to $31.7 million ($1.09 per diluted share) in 2020 * Shareholders' equity reached an all-time record of $1.4 billion, a 30% increase from a year ago, with book value per share of $46 * Homebuilding debt to capital of 32% compared to 39% at March 31, 2021

For the first quarter of 2021, the Company reported pre-tax income of $110.3 million and net income of $84.9 million, or $2.85 per diluted share. This compares to pre-tax income of $41.4 million and net income of $31.7 million, or $1.09 per diluted share, for the first quarter of 2020.

Homes delivered in 2021's first quarter increased 35% to a first quarter record of 2,019. This compares to 1,495 homes delivered in 2020's first quarter. New contracts for the first quarter of 2021 were an all-time quarterly record 3,109, a 49% increase over 2020's 2,089 new contracts. Homes in backlog at March 31, 2021 had a total sales value of $2.4 billion, an 82% increase from a year ago and an all-time quarterly record. Backlog units at March 31, 2021 increased 68% to an all-time quarterly record 5,479 homes, with an average sales price of $433,000. At March 31, 2020, backlog sales value was $1.3 billion, with backlog units of 3,265 and an average sales price of $399,000. M/I Homes had 187 active communities at March 31, 2021 compared to 223 communities at March 31, 2020. The Company's cancellation rate was 7% in the first quarter of 2021 compared to 11% in the first quarter of 2020.

Robert H. Schottenstein, Chief Executive Officer and President, commented, "We had an outstanding record-setting first quarter, highlighted by a 49% increase in new contracts, a 35% increase in homes delivered and a 167% increase in pre-tax income. All of our homebuilding operations had a very strong quarter and our financial service business produced record results. Our gross margins improved by 420 basis points over last year, and our overhead expense ratio improved by 120 basis points. As a result, our first quarter pre-tax income percentage improved to 13.3% from 7.2% last year, and we achieved a 25% return on equity."

Mr. Schottenstein continued, "We ended the quarter with a record backlog of $2.4 billion, 82% better than last year, record shareholders' equity of $1.4 billion, an increase of 30% from 2020's first quarter, book value of $46 per share, cash of $293 million, no borrowings on our $500 million credit facility and a homebuilding debt to capital ratio of 32%. We have tremendous momentum and are very well positioned to have another outstanding year."

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 2022.

M/I Homes, Inc. is one of the nation's leading builders of single-family homes, having sold over 130,800 homes. The Company's homes are marketed and sold primarily under the M/I Homes Brand. 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; and Charlotte and Raleigh, North Carolina.

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 our Annual Report on Form 10-K for the year ended December 31, 2020, 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,

2021 2020

New contracts 3,109 2,089

Average community count 195 224

Cancellation rate 7 %11 %

Backlog units 5,479 3,265

Backlog sales value $2,373,828 $1,301,326

Homes delivered 2,019 1,495

Average home closing price $395 $374



Homebuilding revenue:

Housing revenue $798,279 $559,449

Land revenue 848 4,687

Total homebuilding revenue $799,127 $564,136



Financial services revenue 29,649 13,467

Total revenue $828,776 $577,603



Cost of sales - operations 626,585 460,924

Gross margin $202,191 $116,679

General and administrative expense 45,205 33,847

Selling expense 45,689 36,828

Operating income $111,297 $46,004

Equity in income from joint venture arrangements(160) (52)

Interest expense 1,176 4,700

Income before income taxes $110,281 $41,356

Provision for income taxes 25,415 9,610

Net income $84,866 $31,746



Earnings per share:

Basic $2.92 $1.11

Diluted $2.85 $1.09



Weighted average shares outstanding:

Basic 29,015 28,478

Diluted 29,743 29,009

M/I Homes, Inc. and Subsidiaries Summary Balance Sheet and Other Information (unaudited) (Dollars in thousands, except per share amounts)



As of

March 31,

2021 2020

Assets:

Total cash, cash equivalents and restricted cash ^(1)$292,900 $21,184

Mortgage loans held for sale 217,524 156,208

Inventory:

Lots, land and land development 831,837 837,686

Land held for sale 4,085 1,164

Homes under construction 985,227 829,230

Other inventory 139,385 154,451

Total Inventory $1,960,534 $1,822,531



Property and equipment - net 24,939 21,046

Investments in joint venture arrangements 33,822 40,306

Operating lease right-of-use assets 51,755 20,075

Goodwill 16,400 16,400

Deferred income tax asset 6,183 9,540

Other assets 105,503 91,673

Total Assets $2,709,560 $2,198,963



Liabilities:

Debt - Homebuilding Operations:

Senior notes due 2025 - net $247,743 $247,222

Senior notes due 2028 - net 394,750 393,989

Notes payable - homebuilding - 6,900

Notes payable - other 2,544 7,546

Total Debt - Homebuilding Operations $645,037 $655,657



Notes payable bank - financial services operations 176,204 145,055

Total Debt $821,241 $800,712



Accounts payable 198,216 150,256

Operating lease liabilities 52,029 20,075

Other liabilities 284,652 190,239

Total Liabilities $1,356,138 $1,161,282



Shareholders' Equity 1,353,422 1,037,681

Total Liabilities and Shareholders' Equity $2,709,560 $2,198,963



Book value per common share $46.37 $36.38

Homebuilding debt to capital ratio ^(2) 32 %39 %

(1) Includes $0.5 million of restricted cash and cash held in escrow for both the quarters ended March 31, 2021 and 2020.

The ratio of homebuilding debt to capital is calculated as the carrying(2) 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,

2021 2020

Cash provided by (used in) operating activities$75,168 $(24,227)

Cash provided by (used in) investing activities$623 $(6,546)

Cash (used in) provided by financing activities$(43,701)$45,874



Land/lot purchases $92,358 $75,694

Land development spending $71,195 $61,998

Land sale revenue $848 $4,687

Land sale gross profit $250 $69



Financial services pre-tax income $19,693 $5,631

M/I Homes, Inc. and Subsidiaries Non-GAAP Financial Results ^(1) (Dollars in thousands)



Three Months Ended

March 31,

2021 2020

Net income $84,866 $31,746

Add:

Provision for income taxes 25,415 9,610

Interest expense net of interest income275 3,888

Interest amortized to cost of sales 8,205 6,570

Depreciation and amortization 4,110 4,224

Non-cash charges 2,102 2,923

Adjusted EBITDA $124,973$58,961

We believe these non-GAAP financial measures are relevant and useful to investors in understanding our operations and may be helpful in comparing(1) 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 2021 2020 % Change

Northern 1,306 853 53 %

Southern 1,803 1,236 46 %

Total 3,109 2,089 49 %

HOMES DELIVERED

Three Months Ended

March 31,

Region 2021 2020 % Change

Northern801 588 36 %

Southern1,218907 34 %

Total 2,0191,49535 %

BACKLOG

March 31, 2021 March 31, 2020

Dollars Average Dollars Average

Region Units (millions)Sales PriceUnits (millions)Sales Price

Northern2,320$1,049 $452,000 1,408$596 $423,000

Southern3,159$1,325 $419,000 1,857$705 $380,000

Total 5,479$2,374 $433,000 3,265$1,301 $399,000

LAND POSITION SUMMARY

March 31, 2021 March 31, 2020

Lots Lots Under Lots Lots Under

Region Owned Contract Total Owned Contract Total

Northern6,242 8,489 14,7316,852 6,833 13,685

Southern10,52216,730 27,2527,926 12,209 20,135

Total 16,76425,219 41,98314,77819,042 33,820

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SOURCE M/I Homes, Inc.