CURRENT REPORT |
PURSUANT TO SECTION 13 OR 15(D) |
OF THE SECURITIES EXCHANGE ACT OF 1934 |
M/I HOMES, INC. | ||||||
(Exact name of registrant as specified in its charter) | ||||||
Ohio | 1-12434 | 31-1210837 | ||||
(State or Other Jurisdiction | (Commission | (I.R.S. Employer | ||||
of Incorporation) | File Number) | Identification No.) |
(614) 418-8000 |
(Telephone Number) |
N/A |
(Former name or former address, if changed since last report) |
Exhibit No. | Description of Documents | |
99.1 | Press release dated October 27, 2011. |
By: | /s/ Ann Marie W. Hunker |
Ann Marie W. Hunker | |
Vice President and Corporate Controller | |
(Principal Accounting Officer) |
Exhibit No. | Description of Documents | |
99.1 | Press release dated October 27, 2011. |
• | New contracts increased 20% |
• | Homes delivered increased 13% |
• | Backlog units and value increased 16% and 18% |
• | Adjusted pre-tax loss from operations of $3.0 million |
• | Net loss of $4.7 million |
• | Adjusted EBITDA of $5.0 million |
• | Cash balance of $93.0 million, including $46.8 million of unrestricted cash |
• | Net debt to net capital ratio of 40% |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||
New contracts | 587 | 489 | 1,876 | 1,856 | |||||||||||
Average community count | 118 | 109 | 113 | 107 | |||||||||||
Cancellation rate | 19 | % | 22 | % | 18 | % | 18 | % | |||||||
Backlog units | 838 | 722 | |||||||||||||
Backlog value | $ | 222,738 | $ | 188,304 | |||||||||||
Homes delivered | 582 | 515 | 1,611 | 1,784 | |||||||||||
Average home closing price | $ | 238 | $ | 257 | $ | 235 | $ | 247 | |||||||
Homebuilding revenue: | |||||||||||||||
Housing revenue | $ | 138,597 | $ | 132,003 | $ | 379,161 | $ | 440,516 | |||||||
Land revenue | 155 | — | 1,110 | 86 | |||||||||||
Total homebuilding revenue | $ | 138,752 | $ | 132,003 | $ | 380,271 | $ | 440,602 | |||||||
Financial services revenue | 2,872 | 3,606 | 9,367 | 10,800 | |||||||||||
Total revenue | $ | 141,624 | $ | 135,609 | $ | 389,638 | $ | 451,402 | |||||||
Cost of sales - operations | 116,269 | 111,069 | 322,886 | 374,841 | |||||||||||
Cost of sales - impairment / other | 1,697 | (614 | ) | 18,013 | 9,395 | ||||||||||
Gross margin | 23,658 | 25,154 | 48,739 | 67,166 | |||||||||||
General and administrative expense | 13,896 | 13,148 | 38,064 | 39,601 | |||||||||||
Selling expense | 11,213 | 11,735 | 30,621 | 36,482 | |||||||||||
Operating (loss) profit | (1,451 | ) | 271 | (19,946 | ) | (8,917 | ) | ||||||||
Interest expense | 3,384 | 1,952 | 10,884 | 6,172 | |||||||||||
Loss before income taxes | (4,835 | ) | (1,681 | ) | (30,830 | ) | (15,089 | ) | |||||||
Expense (benefit) for income taxes | (117 | ) | 389 | 71 | 123 | ||||||||||
Net loss | (4,718 | ) | (2,070 | ) | (30,901 | ) | (15,212 | ) | |||||||
Net loss per share | $ | (0.25 | ) | $ | (0.11 | ) | $ | (1.65 | ) | $ | (0.82 | ) | |||
Weighted average shares outstanding: | |||||||||||||||
Basic | 18,728 | 18,523 | 18,685 | 18,523 | |||||||||||
Diluted | 18,728 | 18,523 | 18,685 | 18,523 |
As of | |||||||
September 30, | |||||||
2011 | 2010 | ||||||
Assets: | |||||||
Total cash and cash equivalents(1) | $ | 93,047 | $ | 92,002 | |||
Mortgage loans held for sale | 36,666 | 32,446 | |||||
Inventory: | |||||||
Lots, land and land development | 240,916 | 258,657 | |||||
Land held for sale | — | — | |||||
Homes under construction | 204,338 | 199,129 | |||||
Other inventory | 46,107 | 30,200 | |||||
Total inventory | $ | 491,361 | $ | 487,986 | |||
Property and equipment - net | 14,741 | 17,453 | |||||
Investments in unconsolidated joint ventures | 10,256 | 11,102 | |||||
Income tax receivable | 1,267 | 4,298 | |||||
Other assets(2) | 14,387 | 11,937 | |||||
Total Assets | $ | 661,725 | $ | 657,224 | |||
Liabilities: | |||||||
Debt - Homebuilding Operations: | |||||||
Senior notes | $ | 238,914 | $ | 199,616 | |||
Notes payable - other | 5,857 | 5,932 | |||||
Total Debt - Homebuilding Operations | $ | 244,771 | $ | 205,548 | |||
Note payable bank - financial services operations | 31,658 | 23,773 | |||||
Total Debt | $ | 276,429 | $ | 229,321 | |||
Accounts payable | 45,842 | 53,863 | |||||
Other liabilities | 63,562 | 60,157 | |||||
Total Liabilities | $ | 385,833 | $ | 343,341 | |||
Shareholders' Equity | 275,892 | 313,883 | |||||
Total Liabilities and Shareholders' Equity | $ | 661,725 | $ | 657,224 | |||
Book value per common share | $ | 9.39 | $ | 11.55 | |||
Net debt/net capital ratio(3) | 40 | % | 30 | % |
(1) | 2011 and 2010 amounts include $46.2 million and $48.1 million of restricted cash and cash held in escrow, respectively. |
(2) | 2011 and 2010 amounts include gross deferred tax assets of $139.5 million and $122.8 million, respectively, net of valuation allowances of $139.5 million and $122.8 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. |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||
Adjusted operating gross margin(1) | $ | 25,355 | $ | 24,540 | $ | 66,752 | $ | 76,562 | |||||||
Adjusted operating gross margin %(1) | 17.9 | % | 18.1 | % | 17.1 | % | 17.0 | % | |||||||
Adjusted pre-tax loss from operations(1) | $ | (2,998 | ) | $ | (2,155 | ) | $ | (12,377 | ) | $ | (5,296 | ) | |||
Adjusted EBITDA(1) | $ | 5,021 | $ | 7,189 | $ | 12,642 | $ | 19,963 | |||||||
Cash flow used in operating activities | $ | (16,047 | ) | $ | (24,949 | ) | $ | (24,566 | ) | $ | (42,987 | ) | |||
Cash (used in) provided by investing activities | $ | 18,321 | $ | (2,543 | ) | $ | (10,723 | ) | $ | (18,551 | ) | ||||
Cash (used in) provided by financing activities | $ | (345 | ) | $ | (10,216 | ) | $ | 910 | $ | (4,498 | ) | ||||
Land/lot purchases | $ | 20,160 | $ | 35,873 | $ | 56,616 | $ | 94,017 | |||||||
Land development spending | $ | 13,268 | $ | 15,011 | $ | 33,482 | $ | 29,649 | |||||||
Land/lot sale proceeds | $ | 155 | $ | — | $ | 1,110 | $ | 86 | |||||||
Financial services pre-tax income | $ | 766 | $ | 1,519 | $ | 3,559 | $ | 4,500 | |||||||
Deferred tax asset valuation allowance | $ | 1,345 | $ | 763 | $ | 11,657 | $ | 5,684 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
Impairment by Region: | 2011 | 2010 | 2011 | 2010 | |||||||||||
Midwest | $ | 1,103 | $ | 141 | $ | 11,442 | $ | 3,113 | |||||||
Southern | 594 | 1,545 | 6,554 | 3,717 | |||||||||||
Mid-Atlantic | — | 110 | 17 | 4,376 | |||||||||||
Total | $ | 1,697 | $ | 1,796 | $ | 18,013 | $ | 11,206 | |||||||
Abandonments by Region: | |||||||||||||||
Midwest | $ | 121 | $ | 5 | $ | 143 | $ | 94 | |||||||
Southern | 19 | 94 | 56 | 95 | |||||||||||
Mid-Atlantic | — | 41 | 241 | 208 | |||||||||||
Total | $ | 140 | $ | 140 | $ | 440 | $ | 397 |
(1) | See “Non-GAAP Financial Results / Reconciliations” table below. |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||
Gross margin | $ | 23,658 | $ | 25,154 | $ | 48,739 | $ | 67,166 | |||||||
Add: Impairments | 1,697 | 1,796 | 18,013 | 11,206 | |||||||||||
Imported drywall charges | — | (2,410 | ) | — | (1,810 | ) | |||||||||
Adjusted operating gross margin | $ | 25,355 | $ | 24,540 | $ | 66,752 | $ | 76,562 | |||||||
Loss before income taxes | $ | (4,835 | ) | $ | (1,681 | ) | $ | (30,830 | ) | $ | (15,089 | ) | |||
Add: Impairments and abandonments | 1,837 | 1,936 | 18,453 | 11,603 | |||||||||||
Imported drywall charges | — | (2,410 | ) | — | (1,810 | ) | |||||||||
Adjusted pre-tax loss from operations | $ | (2,998 | ) | $ | (2,155 | ) | $ | (12,377 | ) | $ | (5,296 | ) | |||
Net loss | $ | (4,718 | ) | $ | (2,070 | ) | $ | (30,901 | ) | $ | (15,212 | ) | |||
Add (subtract): | |||||||||||||||
Income taxes | (117 | ) | 389 | 71 | 123 | ||||||||||
Interest expense net of interest income | 3,124 | 1,631 | 10,137 | 5,261 | |||||||||||
Interest amortized to cost of sales | 2,515 | 2,719 | 7,672 | 9,904 | |||||||||||
Depreciation and amortization | 1,896 | 1,889 | 5,685 | 6,105 | |||||||||||
Non-cash charges | 2,321 | 2,631 | 19,978 | 13,782 | |||||||||||
Adjusted EBITDA | $ | 5,021 | $ | 7,189 | $ | 12,642 | $ | 19,963 |
NEW CONTRACTS | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
% | % | ||||||||||||||||
Region | 2011 | 2010 | Change | 2011 | 2010 | Change | |||||||||||
Midwest | 251 | 248 | 1 | % | 846 | 994 | (15 | )% | |||||||||
Southern | 149 | 93 | 60 | % | 451 | 365 | 24 | % | |||||||||
Mid-Atlantic | 187 | 148 | 26 | % | 579 | 497 | 16 | % | |||||||||
Total | 587 | 489 | 20 | % | 1,876 | 1,856 | 1 | % |
HOMES DELIVERED | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
% | % | ||||||||||||||||
Region | 2011 | 2010 | Change | 2011 | 2010 | Change | |||||||||||
Midwest | 254 | 272 | (7 | )% | 741 | 967 | (23 | )% | |||||||||
Southern | 162 | 79 | 105 | % | 395 | 323 | 22 | % | |||||||||
Mid-Atlantic | 166 | 164 | 1 | % | 475 | 494 | (4 | )% | |||||||||
Total | 582 | 515 | 13 | % | 1,611 | 1,784 | (10 | )% |
BACKLOG | |||||||||||||||||||||
September 30, 2011 | September 30, 2010 | ||||||||||||||||||||
Dollars | Average | Dollars | Average | ||||||||||||||||||
Region | Units | (millions) | Sales Price | Units | (millions) | Sales Price | |||||||||||||||
Midwest | 441 | $ | 112 | $ | 253,000 | 444 | $ | 110 | $ | 248,000 | |||||||||||
Southern | 184 | $ | 42 | $ | 230,000 | 97 | $ | 21 | $ | 221,000 | |||||||||||
Mid-Atlantic | 213 | $ | 69 | $ | 324,000 | 181 | $ | 57 | $ | 315,000 | |||||||||||
Total | 838 | $ | 223 | $ | 266,000 | 722 | $ | 188 | $ | 261,000 |
LAND POSITION SUMMARY | ||||||||||||||
September 30, 2011 | September 30, 2010 | |||||||||||||
Lots | Lots Under | Lots | Lots Under | |||||||||||
Region | Owned | Contract | Total | Owned | Contract | Total | ||||||||
Midwest | 4,006 | 772 | 4,778 | 4,189 | 1,137 | 5,326 | ||||||||
Southern | 1,431 | 1,029 | 2,460 | 1,539 | 223 | 1,762 | ||||||||
Mid-Atlantic | 1,750 | 1,205 | 2,955 | 2,080 | 489 | 2,569 | ||||||||
Total | 7,187 | 3,006 | 10,193 | 7,808 | 1,849 | 9,657 |
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