EX-99.1 2 exhibit991earningspressrel.htm EX-99.1 PRESS RELEASE 3RD QTR. 10-25-2023 Document

Exhibit 99.1
milogoa42.jpg


M/I Homes Reports
2023 Third Quarter Results

Columbus, Ohio (October 25, 2023) - M/I Homes, Inc. (NYSE:MHO) announced results for the three and nine months ended September 30, 2023.

2023 Third Quarter Highlights:
•New contracts increased 50% to 2,021 contracts
•Delivered 2,096 homes, up 3% from 2022’s 2,026 homes delivered
•Record third quarter revenue of $1.0 billion, up 3% from 2022’s third quarter
•Pre-tax income increased 7% to $178.0 million, a third quarter record
•All-time quarterly record net income of $139.0 million ($4.82 per diluted share), up 6% from 2022’s $131.6 million
•Shareholders’ equity reached a record of $2.4 billion, a 25% increase from a year ago, with book value per share of $87
•Return on equity of 23%

For the third quarter of 2023, the Company reported pre-tax income of $178.0 million and net income of $139.0 million, or $4.82 per diluted share. This compares to pre-tax income of $166.6 million and net income of $131.6 million, or $4.67 per diluted share, for the third quarter of 2022. For the nine months ended September 30, 2023, net income decreased slightly to $360.1 million, or $12.58 per diluted share, compared to $360.3 million, or $12.59 per diluted share, for the same period of 2022.

Homes delivered in 2023's third quarter increased 3% to 2,096 homes. This compares to 2,026 homes delivered in 2022’s third quarter. Homes delivered for the nine months ended September 30, 2023 increased 2% to 6,093 from 2022’s deliveries of 5,982. New contracts for the third quarter of 2023 increased 50% to 2,021 new contracts compared to 1,349 in 2022. For the first nine months of 2023, new contracts increased 12% to 6,389 compared to 5,683 in 2022. Homes in backlog at September 30, 2023 had a total sales value of $1.8 billion, a 28% decrease from a year ago. Backlog units at September 30, 2023 decreased 24% to 3,433 homes, with an average sales price of $510,000. At September 30, 2022, backlog sales value was $2.4 billion, with backlog units of 4,536 and an average sales price of $533,000. M/I Homes had 204 communities at September 30, 2023 compared to 178 communities at September 30, 2022. The Company's cancellation rate was 10% in the third quarter of 2023 compared to 17% in the third quarter of 2022.

Robert H. Schottenstein, Chief Executive Officer and President, commented, “We had a very strong third quarter, highlighted by record revenue, record income, a 50% increase in new contracts and very strong returns. We increased revenue by 3% to a record $1.0 billion, increased pre-tax income by 7% to a record $178.0 million, generated 27% gross margins and 17% pre-tax income margins. These results produced a solid 23% return on equity.”

Mr. Schottenstein continued, “Our financial condition is strong. We ended the quarter with record shareholders’ equity of $2.4 billion, an increase of 25% from a year ago, book value of $87 per share, cash of $736 million, zero


borrowings on our $650 million credit facility, and a homebuilding debt to capital ratio of 22%. Given our performance through three quarters of this year, along with the strength of our balance sheet, low debt levels, diverse product offerings and well-located communities, we are positioned to have a very strong 2023.”

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 October 2024.

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, Fort Myers/Naples 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, 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.


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,
2023202220232022
New contracts2,021 1,349 6,389 5,683 
Average community count200 173 199 174 
Cancellation rate10 %17 %11 %11 %
Backlog units3,433 4,536 3,433 4,536 
Backlog sales value$1,751,442 $2,419,291 $1,751,442 $2,419,291 
Homes delivered2,096 2,026 6,093 5,982 
Average home closing price$481 $487 $486 $474 
Homebuilding revenue:
   Housing revenue$1,008,356 $986,843 $2,963,500 $2,837,912 
   Land revenue14,424 5,986 23,276 12,897 
Total homebuilding revenue$1,022,780 $992,829 $2,986,776 $2,850,809 
Financial services revenue23,591 20,099 74,138 63,584 
Total revenue$1,046,371 $1,012,928 $3,060,914 $2,914,393 
Cost of sales - operations764,638 741,013 2,286,371 2,145,082 
Gross margin$281,733 $271,915 $774,543 $769,311 
General and administrative expense55,867 58,247 162,481 162,246 
Selling expense53,735 46,373 154,686 134,000 
Operating income$172,131 $167,295 $457,376 $473,065 
Other income1 — (34)(17)
Interest (income) expense - net
(5,834)701 (11,893)2,065 
Income before income taxes$177,964 $166,594 $469,303 $471,017 
Provision for income taxes38,948 35,004 109,220 110,750 
Net income$139,016 $131,590 $360,083 $360,267 
Earnings per share:
Basic$4.98 $4.76 $12.97 $12.86 
Diluted$4.82 $4.67 $12.58 $12.59 
Weighted average shares outstanding:
Basic27,909 27,618 27,769 28,025 
Diluted28,837 28,185 28,631 28,610 


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

As of
September 30,
20232022
Assets:
Total cash, cash equivalents and restricted cash (1)
$736,252 $67,761 
Mortgage loans held for sale207,181 183,327 
Inventory:
Lots, land and land development1,355,622 1,230,139 
Land held for sale6,881 9,174 
Homes under construction1,218,256 1,624,831 
Other inventory159,769 152,591 
Total Inventory$2,740,528 $3,016,735 
Property and equipment - net36,015 35,217 
Investments in joint venture arrangements44,866 51,700 
Operating lease right-of-use assets58,304 55,388 
Goodwill16,400 16,400 
Deferred income tax asset18,019 10,251 
Other assets145,803 151,134 
Total Assets$4,003,368 $3,587,913 
Liabilities:
Debt - Homebuilding Operations:
Senior notes due 2028 - net$396,685 $395,911 
Senior notes due 2030 - net296,739 296,235 
 Notes payable - other— 429 
Total Debt - Homebuilding Operations$693,424 $692,575 
Notes payable bank - financial services operations200,619 189,371 
Total Debt$894,043 $881,946 
Accounts payable250,937 296,326 
Operating lease liabilities59,433 56,199 
Other liabilities373,243 415,669 
Total Liabilities$1,577,656 $1,650,140 
Shareholders’ Equity2,425,712 1,937,773 
Total Liabilities and Shareholders’ Equity$4,003,368 $3,587,913 
Book value per common share$87.10 $70.65 
Homebuilding debt to capital ratio (2)
22 %26 %
(1)Includes $0.2 million and $0.7 million of restricted cash and cash held in escrow for the quarters ended September 30, 2023 and 2022, 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,
2023202220232022
Cash provided by (used in) operating activities
$79,541 $(92,689)$497,230 $(14,149)
Cash used in investing activities
$(11,330)$(7,635)$(14,132)$(19,098)
Cash used in financing activities$(246)$(20,670)$(58,388)$(135,360)
Land/lot purchases$105,860 $74,989 $247,574 $289,604 
Land development spending$151,222 $142,000 $352,555 $349,240 
Land sale revenue$14,424 $5,986 $23,276 $12,897 
Land sale gross profit$2,115 $1,350 $3,004 $2,908 
Financial services pre-tax income$9,878 $7,883 $33,678 $29,605 



M/I Homes, Inc. and Subsidiaries
Non-GAAP Financial Results (1)
(Dollars in thousands)
Three Months EndedNine Months Ended
September 30,September 30,
2023202220232022
Net income$139,016 $131,590 $360,083 $360,267 
Add:
Provision for income taxes38,948 35,004 109,220 110,750 
Interest income - net
(8,469)(1,062)(19,122)(2,369)
Interest amortized to cost of sales8,778 6,683 25,602 21,546 
Depreciation and amortization4,227 4,350 12,890 12,824 
Non-cash charges2,682 2,764 7,006 6,613 
Adjusted EBITDA$185,182 $179,329 $495,679 $509,631 

(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,
%%
Region20232022Change20232022Change
Northern885 466 90 %2,662 2,378 12 %
Southern1,136 883 29 %3,727 3,305 13 %
Total2,021 1,349 50 %6,389 5,683 12 %


HOMES DELIVERED
Three Months EndedNine Months Ended
September 30,September 30,
%%
Region20232022Change20232022Change
Northern741 850 (13)%2,321 2,610 (11)%
Southern1,355 1,176 15 %3,772 3,372 12 %
Total2,096 2,026 3 %6,093 5,982 2 %


BACKLOG
September 30, 2023September 30, 2022
DollarsAverageDollarsAverage
RegionUnits(millions)Sales PriceUnits(millions)Sales Price
Northern1,397 $727 $521,000 1,658 $856 $517,000 
Southern2,036 $1,024 $503,000 2,878 $1,563 $543,000 
Total3,433 $1,751 $510,000 4,536 $2,419 $533,000 


LAND POSITION SUMMARY
September 30, 2023September 30, 2022
LotsLots UnderLotsLots Under
RegionOwnedContractTotalOwnedContractTotal
Northern7,341 8,385 15,726 7,713 8,111 15,824 
Southern15,835 13,267 29,102 17,204 13,044 30,248 
Total23,176 21,652 44,828 24,917 21,155 46,072