EX-99.1 2 exhibit991earningspressrel.htm EX-99.1 Document

Exhibit 99.1
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M/I Homes Reports
2022 Third Quarter Results

Columbus, Ohio (October 26, 2022) - M/I Homes, Inc. (NYSE:MHO) announced results for the three and nine months ended September 30, 2022.

2022 Third Quarter Highlights:
•Revenue increased 12% to $1.0 billion, a third quarter record
•Pre-tax income increased 43% to $167 million, a third quarter record
•Net income increased 45% to a third quarter record $132 million ($4.67 per diluted share) from
2021’s $91 million ($3.03 per diluted share)
•Homes delivered decreased 1% to 2,026 and average sales price increased 13% to $487,000
•New contracts of 1,349, down 31% with average community count down 2% and a cancellation rate of 17%
•Backlog units decreased 16% to 4,536
•Backlog sales value decreased 5% to $2.4 billion, with average sales price in backlog at an all-time
record $533,000
•Shareholders’ equity reached an all-time record of $1.9 billion, a 25% increase from a year ago,
with book value per share of $71
•Homebuilding debt to capital ratio of 26% compared to 31% at September 30, 2021
•Return on equity of 27%

For the third quarter of 2022, pre-tax income increased 43% to a record $166.6 million and third quarter net income increased 45% to a record $131.6 million, or $4.67 per diluted share. This compares to pre-tax income of $116.2 million and net income of $91.0 million, or $3.03 per diluted share, for the third quarter of 2021. The third quarter of 2021 includes a $9.1 million pre-tax loss on early extinguishment of debt, or $0.24 per diluted share. For the nine months ended September 30, 2022, net income increased 27% to $360.3 million, or $12.59 per diluted share, compared to $283.5 million, or $9.46 per diluted share, for the same period of 2021.

Homes delivered in 2022’s third quarter decreased 1% to 2,026, compared to 2,045 homes delivered in 2021’s third quarter. Homes delivered for the nine months ended September 30, 2022 decreased 5% to 5,982 from 6,322 deliveries in the first nine months of 2021. New contracts for the third quarter of 2022 were 1,349, a 31% decrease from 1,964 new contracts in 2021. For the first nine months of 2022, new contracts decreased 23% to 5,683 compared to 7,340 in the first nine months of 2021. Homes in backlog at September 30, 2022 had a total sales value of $2.4 billion, a 5% decrease from a year ago. Backlog units at September 30, 2022 decreased 16% to 4,536 homes, with an all-time record average sales price of $533,000. At September 30, 2021, backlog sales value was $2.5 billion, with backlog units of 5,407 and an average sales price of $471,000. M/I Homes had 178 communities at September 30, 2022 compared to 176 communities at September 30, 2021.

Robert H. Schottenstein, Chief Executive Officer and President, commented, “We are pleased to announce record financial results for the third quarter of 2022, highlighted by record revenue, income, and earnings per share. Our


margins during the quarter were very strong with gross margins of 26.8% (up 230 basis points from a year ago) and operating margins at 16.5% (up 270 basis points from a year ago). Our overhead leverage improved 40 basis points to 10.3%. Our homes delivered declined 1% from a year ago due to delayed closings in our Florida markets caused by Hurricane Ian.”

Mr. Schottenstein continued, “New contracts for the quarter declined 31%, reflecting the significant decline in homebuyer demand that began earlier this year due to the well documented impact of higher mortgage interest rates. Notwithstanding this decline, our financial condition is very strong. We ended the quarter with record shareholders’ equity of $1.9 billion, an increase of 25% over last year, book value of $71 per share, cash of $68 million, zero borrowings on our $550 million credit facility, and a homebuilding debt to capital of 26%.”

Mr. Schottenstein concluded, “There is much uncertainty concerning the general economy, and it is unclear when demand for new homes will improve. However, we believe, over the long term, that housing markets will benefit from strong fundamentals, including favorable demographic trends and an undersupply of housing. We are well positioned to manage through these changing and uncertain times given the strength of our balance sheet, low debt levels, diverse product offerings and well-located communities.”

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 October 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.


Contact M/I Homes, Inc.
Ann Marie W. Hunker, Vice President, Chief Accounting Officer and Controller, (614) 418-8225
Mark Kirkendall, Vice President, Treasurer, (614) 418-8021



M/I Homes, Inc. and Subsidiaries
Summary Statement of Income (unaudited)
(Dollars and shares in thousands, except per share amounts)

Three Months EndedNine Months Ended
September 30,September 30,
2022202120222021
New contracts1,349 1,964 5,683 7,340 
Average community count173 176 174 185 
Cancellation rate17 %8 %11 %7 %
Backlog units4,536 5,407 4,536 5,407 
Backlog sales value$2,419,291 $2,545,964 $2,419,291 $2,545,964 
Homes delivered2,026 2,045 5,982 6,322 
Average home closing price$487 $430 $474 $412 
Homebuilding revenue:
   Housing revenue$986,843 $878,602 $2,837,912 $2,604,387 
   Land revenue5,986 4,922 12,897 10,669 
Total homebuilding revenue$992,829 $883,524 $2,850,809 $2,615,056 
Financial services revenue20,099 20,795 63,584 79,079 
Total revenue$1,012,928 $904,319 $2,914,393 $2,694,135 
Cost of sales - operations741,013 682,565 2,145,082 2,028,822 
Gross margin$271,915 $221,754 $769,311 $665,313 
General and administrative expense58,247 49,420 162,246 143,703 
Selling expense46,373 47,114 134,000 143,379 
Operating income$167,295 $125,220 $473,065 $378,231 
Other loss (income)— 50 (17)(145)
Interest expense (income)701 (74)2,065 1,554 
Loss on early extinguishment of debt— 9,072 — 9,072 
Income before income taxes$166,594 $116,172 $471,017 $367,750 
Provision for income taxes35,004 25,160 110,750 84,265 
Net income$131,590 $91,012 $360,267 $283,485 
Earnings per share:
Basic$4.76 $3.11 $12.86 $9.72 
Diluted$4.67 $3.03 $12.59 $9.46 
Weighted average shares outstanding:
Basic27,618 29,250 28,025 29,179 
Diluted28,185 30,028 28,610 29,966 


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

As of
September 30,
20222021
Assets:
Total cash, cash equivalents and restricted cash (1)
$67,761 $221,157 
Mortgage loans held for sale183,327 215,857 
Inventory:
Lots, land and land development1,230,139 1,022,434 
Land held for sale9,174 3,620 
Homes under construction1,624,831 1,190,921 
Other inventory152,591 136,168 
Total Inventory$3,016,735 $2,353,143 
Property and equipment - net35,217 23,644 
Investments in joint venture arrangements51,700 42,466 
Operating lease right-of-use assets55,388 51,181 
Goodwill16,400 16,400 
Deferred income tax asset10,251 6,183 
Other assets151,134 116,569 
Total Assets$3,587,913 $3,046,600 
Liabilities:
Debt - Homebuilding Operations:
Senior notes due 2028 - net$395,911 $395,137 
Senior notes due 2030 - net296,235 296,002 
 Notes payable - other429 5,537 
Total Debt - Homebuilding Operations$692,575 $696,676 
Notes payable bank - financial services operations189,371 211,281 
Total Debt$881,946 $907,957 
Accounts payable296,326 227,311 
Operating lease liabilities56,199 51,637 
Other liabilities415,669 315,228 
Total Liabilities$1,650,140 $1,502,133 
Shareholders’ Equity1,937,773 1,544,467 
Total Liabilities and Shareholders’ Equity$3,587,913 $3,046,600 
Book value per common share$70.65 $53.08 
Homebuilding debt to capital ratio (2)
26 %31 %
(1)Includes $0.7 million and $0.2 million of restricted cash and cash held in escrow for the quarters ended September 30, 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 EndedNine Months Ended
September 30,September 30,
2022202120222021
Cash used in operating activities$(92,689)$(208,142)$(14,149)$(34,341)
Cash used in investing activities$(7,635)$(19,160)$(19,098)$(31,923)
Cash (used in) provided by financing activities$(20,670)$76,653 $(135,360)$26,611 
Land/lot purchases$74,989 $231,184 $289,604 $473,813 
Land development spending$142,000 $123,564 $349,240 $281,184 
Land sale revenue$5,986 $4,922 $12,897 $10,669 
Land sale gross profit$1,350 $1,345 $2,908 $2,521 
Financial services pre-tax income$7,883 $9,935 $29,605 $47,604 



M/I Homes, Inc. and Subsidiaries
Non-GAAP Financial Results (1)
(Dollars in thousands)
Three Months EndedNine Months Ended
September 30,September 30,
2022202120222021
Net income$131,590 $91,012 $360,267 $283,485 
Add:
Provision for income taxes35,004 25,160 110,750 84,265 
Interest income(1,062)(1,005)(2,369)(1,273)
Interest amortized to cost of sales6,683 8,212 21,546 25,855 
Depreciation and amortization4,350 4,303 12,824 12,537 
Non-cash charges2,764 3,834 6,613 8,077 
Adjusted EBITDA$179,329 $131,516 $509,631 $412,946 

(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 EndedNine Months Ended
September 30,September 30,
%%
Region20222021Change20222021Change
Northern466 772 (40)%2,378 2,962 (20)%
Southern883 1,192 (26)%3,305 4,378 (25)%
Total1,349 1,964 (31)%5,683 7,340 (23)%


HOMES DELIVERED
Three Months EndedNine Months Ended
September 30,September 30,
%%
Region20222021Change20222021Change
Northern850 876 (3)%2,610 2,638 (1)%
Southern1,176 1,169 1 %3,372 3,684 (8)%
Total2,026 2,045 (1)%5,982 6,322 (5)%


BACKLOG
September 30, 2022September 30, 2021
DollarsAverageDollarsAverage
RegionUnits(millions)Sales PriceUnits(millions)Sales Price
Northern1,658 $856 $517,000 2,139 $1,015 $475,000 
Southern2,878 $1,563 $543,000 3,268 $1,531 $468,000 
Total4,536 $2,419 $533,000 5,407 $2,546 $471,000 


LAND POSITION SUMMARY
September 30, 2022September 30, 2021
LotsLots UnderLotsLots Under
RegionOwnedContractTotalOwnedContractTotal
Northern7,713 8,111 15,824 7,353 7,078 14,431 
Southern17,204 13,044 30,248 15,311 13,253 28,564 
Total24,917 21,155 46,072 22,664 20,331 42,995