Exhibit 99.1
M/I Homes Reports
2020 First Quarter Results
Columbus, Ohio (April 29, 2020) - M/I Homes, Inc. (NYSE:MHO) announced results for the three months ended March 31, 2020.
2020 First Quarter Highlights:
| |
| • | Homes delivered increased 26% to a first quarter record of 1,495 homes |
| |
| • | Revenue increased 20% to a first quarter record of $577.6 million |
| |
| • | Pre-tax income increased 76% to $41.4 million, a first quarter record |
| |
| • | Record first quarter net income of $31.7 million ($1.09 per diluted share), a 79% increase |
compared to $17.7 million ($0.63 per diluted share) in 2019
| |
| • | New contracts increased 27% to 2,089 contracts, an all-time quarterly record |
| |
| • | Backlog units increased 23% to 3,265, a first quarter record |
| |
| • | Backlog sales value reached $1.3 billion, an all-time quarterly record |
| |
| • | Homebuilding debt to capital of 39% compared to 47% at March 31, 2019 |
| |
| • | Shareholders’ equity reached an all-time record of $1.04 billion, a 19% increase from a year ago, |
with book value per share of $36
For the first quarter of 2020, the Company reported pre-tax income of $41.4 million and net income of $31.7 million, or $1.09 per diluted share. This compares to pre-tax income of $23.5 million and net income of $17.7 million, or $0.63 per diluted share, for the first quarter of 2019. Pre-tax income in the first quarter of 2019 included $0.4 million of acquisition-related expense.
Homes delivered in 2020’s first quarter increased 26% to a first quarter record of 1,495. This compares to 1,186 homes delivered in 2019’s first quarter. New contracts for the first quarter of 2020 were an all-time quarterly record 2,089, a 27% increase over 2019’s 1,644 new contracts. Homes in backlog at March 31, 2020 had a total sales value of $1.3 billion, a 22% increase from a year ago and an all-time quarterly record. Backlog units at March 31, 2020 increased 23% to a first quarter record 3,265 homes, with an average sales price of $399,000. At March 31, 2019, backlog sales value was $1.07 billion, with backlog units of 2,652 and an average sales price of $403,000. M/I Homes had 223 active communities at March 31, 2020, an increase of 4% over our 214 communities at March 31, 2019. The Company's cancellation rate was 11% in the first quarter of 2020 compared to 12% in the first quarter of 2019.
Robert H. Schottenstein, Chief Executive Officer and President, commented, “We are pleased to announce record setting first quarter results - highlighted by record first quarter net income of $31.7 million, a 79% increase over 2019’s first quarter, along with all-time quarterly records in both new contracts and backlog sales value. Revenues, pre-tax income, homes delivered, and backlog units each improved by over 20% when compared to 2019’s first quarter and were also first quarter records for our Company. Gross margin improved to 20.2%, 90 basis points better than 2019’s first quarter and our overhead expense ratio improved 70 basis points to 12.2%. Our diluted earnings per share improved 73% from 2019’s first quarter, and we ended the quarter with shareholders’ equity of $1.04 billion and a homebuilding debt to capital ratio of 39%.”
Mr. Schottenstein continued, “The world is in the midst of an unprecedented battle with the COVID-19 pandemic; our primary concern continues to be the health and well-being of our employees, our trade partners, our customers, the communities in which we do business and all of those impacted by this highly contagious virus. In most of the markets in which we operate, housing construction and mortgage services have been deemed essential businesses and we’re doing everything we can to safely continue selling, building and delivering our homes. We have adapted our operations and business to safeguard our various work environments, while closely monitoring updates and guidelines from the CDC and other state and local government and public health agencies.”
Mr. Schottenstein concluded, “The pandemic first began impacting our results in the second half of March. New contracts in the last of half of March were 50% below prior year levels. New contracts during the first three weeks of April have improved and are 35% below the comparable period in 2019. We are reviewing all aspects of our operations and adjusting our business as needed. We entered 2020 in the best financial condition in company history. With our experienced leadership team, record quarter-end backlog, and nearly $450 million of available liquidity, we are confident that we will navigate through this very challenging environment.”
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 2021.
M/I Homes, Inc. is one of the nation’s leading builders of single-family homes, having sold over 120,300 homes. The Company’s homes are marketed and sold primarily under the trade names M/I Homes and Showcase Collection (exclusively by M/I Homes), and are also currently sold under the name Hans Hagen Homes in the Minneapolis/St. Paul, Minnesota market. 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 (including the impact of COVID-19), interest rates, availability of resources, competition, market concentration, land development activities, integration of acquisitions, 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, 2019, 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.
Kevin C. Hake, Senior Vice President, Treasurer, (614) 418-8227
Ann Marie W. Hunker, Vice President, Controller, (614) 418-8225
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, |
| | 2020 | | 2019 |
| New contracts | 2,089 |
| | 1,644 |
|
| Average community count | 224 |
| | 212 |
|
| Cancellation rate | 11 | % | | 12 | % |
| Backlog units | 3,265 |
| | 2,652 |
|
| Backlog sales value | $ | 1,301,326 |
| | $ | 1,070,074 |
|
| Homes delivered | 1,495 |
| | 1,186 |
|
| Average home closing price | $ | 374 |
| | $ | 393 |
|
| | | | |
| Homebuilding revenue: | | | |
| Housing revenue | $ | 559,449 |
| | $ | 466,308 |
|
| Land revenue | 4,687 |
| | 3,018 |
|
| Total homebuilding revenue | $ | 564,136 |
| | $ | 469,326 |
|
| | | | |
| Financial services revenue | 13,467 |
| | 11,783 |
|
| Total revenue | $ | 577,603 |
| | $ | 481,109 |
|
| | | | |
| Cost of sales - operations | 460,924 |
| | 388,039 |
|
| Cost of sales - purchase accounting adjustments | — |
| | 428 |
|
| Gross margin | $ | 116,679 |
| | $ | 92,642 |
|
| General and administrative expense | 33,847 |
| | 30,699 |
|
| Selling expense | 36,828 |
| | 31,551 |
|
| Operating income | $ | 46,004 |
| | $ | 30,392 |
|
| Equity in (income) loss from joint venture arrangements | (52 | ) | | 121 |
|
| Interest expense | 4,700 |
| | 6,792 |
|
| Income before income taxes | $ | 41,356 |
| | $ | 23,479 |
|
| Provision for income taxes | 9,610 |
| | 5,756 |
|
| Net income | $ | 31,746 |
| | $ | 17,723 |
|
| | | | |
| Earnings per share: | | | |
| Basic | $ | 1.11 |
| | $ | 0.64 |
|
| Diluted | $ | 1.09 |
| | $ | 0.63 |
|
| | | | |
| Weighted average shares outstanding: | | | |
| Basic | 28,478 |
| | 27,498 |
|
| Diluted | 29,009 |
| | 27,970 |
|
M/I Homes, Inc. and Subsidiaries
Summary Balance Sheet and Other Information (unaudited)
(Dollars in thousands, except per share amounts)
|
| | | | | | | |
| | As of |
| | March 31, |
| | 2020 | | 2019 |
| Assets: | | | |
Total cash, cash equivalents and restricted cash(1) | $ | 21,184 |
| | $ | 41,931 |
|
| Mortgage loans held for sale | 156,208 |
| | 119,665 |
|
| Inventory: | | | |
| Lots, land and land development | 837,686 |
| | 807,324 |
|
| Land held for sale | 1,164 |
| | 8,732 |
|
| Homes under construction | 829,230 |
| | 760,756 |
|
| Other inventory | 154,451 |
| | 153,976 |
|
| Total Inventory | $ | 1,822,531 |
| | $ | 1,730,788 |
|
| | | | |
| Property and equipment - net | 21,046 |
| | 28,392 |
|
| Investments in joint venture arrangements | 40,306 |
| | 40,736 |
|
| Operating lease right-of-use assets | 20,075 |
| | 20,603 |
|
| Goodwill | 16,400 |
| | 16,400 |
|
| Deferred income tax asset | 9,540 |
| | 13,146 |
|
| Other assets | 91,673 |
| | 60,117 |
|
| Total Assets | $ | 2,198,963 |
| | $ | 2,071,778 |
|
| | | | |
| Liabilities: | | | |
| Debt - Homebuilding Operations: | | | |
| Senior notes due 2021 - net | $ | — |
| | $ | 298,160 |
|
| Senior notes due 2025 - net | 247,222 |
| | 246,702 |
|
| Senior notes due 2028 - net | 393,989 |
| | — |
|
| Notes payable - homebuilding | 6,900 |
| | 218,800 |
|
| Notes payable - other | 7,546 |
| | 5,937 |
|
| Total Debt - Homebuilding Operations | $ | 655,657 |
| | $ | 769,599 |
|
| | | | |
| Notes payable bank - financial services operations | 145,055 |
| | 104,026 |
|
| Total Debt | $ | 800,712 |
| | $ | 873,625 |
|
| | | | |
| Accounts payable | 150,256 |
| | 132,935 |
|
| Operating lease liabilities | 20,075 |
| | 20,603 |
|
| Other liabilities | 190,239 |
| | 173,153 |
|
| Total Liabilities | $ | 1,161,282 |
| | $ | 1,200,316 |
|
| | | | |
| Shareholders’ Equity | 1,037,681 |
| | 871,462 |
|
| Total Liabilities and Shareholders’ Equity | $ | 2,198,963 |
| | $ | 2,071,778 |
|
| | | | |
| Book value per common share | $ | 36.38 |
| | $ | 31.61 |
|
Homebuilding debt / capital ratio(2) | 39 | % | | 47 | % |
| |
| (1) | Includes $0.5 million and $1.1 million of restricted cash and cash held in escrow for the quarters ended March 31, 2020 and 2019, 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 Ended |
| | March 31, |
| | 2020 | | 2019 |
| Cash used in operating activities | $ | (24,227 | ) | | $ | (22,633 | ) |
| Cash used in investing activities | $ | (6,546 | ) | | $ | (6,501 | ) |
| Cash provided by financing activities | $ | 45,874 |
| | $ | 49,536 |
|
| | | | |
| Land/lot purchases | $ | 75,694 |
| | $ | 80,424 |
|
| Land development spending | $ | 61,998 |
| | $ | 54,365 |
|
| Land sale revenue | $ | 4,687 |
| | $ | 3,018 |
|
| Land sale gross profit | $ | 69 |
| | $ | 55 |
|
| | | | |
| Financial services pre-tax income | $ | 5,631 |
| | $ | 4,952 |
|
M/I Homes, Inc. and Subsidiaries
Non-GAAP Financial Results (1)
(Dollars in thousands)
|
| | | | | | | |
| | Three Months Ended |
| | March 31, |
| | 2020 | | 2019 |
| Net income | $ | 31,746 |
| | $ | 17,723 |
|
| Add: | | | |
| Provision for income taxes | 9,610 |
| | 5,756 |
|
| Interest expense net of interest income | 3,888 |
| | 5,938 |
|
| Interest amortized to cost of sales | 6,570 |
| | 5,393 |
|
| Depreciation and amortization | 4,224 |
| | 3,817 |
|
| Non-cash charges | 2,923 |
| | 912 |
|
| Adjusted EBITDA | $ | 58,961 |
| | $ | 39,539 |
|
M/I Homes, Inc. and Subsidiaries
Non-GAAP Reconciliation (1)
(Dollars and shares in thousands, except per share amounts)
|
| | | | | | | |
| | Three Months Ended |
| | March 31, |
| | 2020 | | 2019 |
| Income before income taxes | $ | 41,356 |
| | $ | 23,479 |
|
Add: Purchase accounting adjustments (2) | — |
| | 428 |
|
| Adjusted income before income taxes | $ | 41,356 |
| | $ | 23,907 |
|
| | | | |
| Net income | $ | 31,746 |
| | $ | 17,723 |
|
Add: Purchase accounting adjustments - net of tax (2) | — |
| | 317 |
|
| Adjusted net income | $ | 31,746 |
| | $ | 18,040 |
|
| | | | |
Purchase accounting adjustments - net of tax (2) | $ | — |
| | $ | 317 |
|
| | | | |
| Divided by: Diluted weighted average shares outstanding | 29,009 |
| | 27,970 |
|
| | | | |
Diluted earnings per share related to purchase accounting adjustments (2) | $ | — |
| | $ | 0.01 |
|
| | | | |
| Add: Diluted earnings per share | 1.09 |
| | 0.63 |
|
| | | | |
| Adjusted diluted earnings per share | $ | 1.09 |
| | $ | 0.64 |
|
| |
| (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. |
(2) Represents purchase accounting adjustments related to our acquisition of Pinnacle Homes in Detroit, Michigan on March 1, 2018.
M/I Homes, Inc. and Subsidiaries
Selected Supplemental Financial and Operating Data
|
| | | | | | | | |
NEW CONTRACTS (a) |
| | Three Months Ended |
| | March 31, |
| | | | | | % |
| Region | 2020 | | 2019 | | Change |
| Northern | 853 |
| | 702 |
| | 22 | % |
| Southern | 1,236 |
| | 942 |
| | 31 | % |
| Total | 2,089 |
| | 1,644 |
| | 27 | % |
|
| | | | | | | | |
HOMES DELIVERED (a) |
| | Three Months Ended |
| | March 31, |
| | | | | | % |
| Region | 2020 | | 2019 | | Change |
| Northern | 588 |
| | 474 |
| | 24 | % |
| Southern | 907 |
| | 712 |
| | 27 | % |
| Total | 1,495 |
| | 1,186 |
| | 26 | % |
|
| | | | | | | | | | | | | | | | | | | | | | |
| | BACKLOG (a) |
| | March 31, 2020 | | | March 31, 2019 |
| | | | Dollars | | Average | | | | | Dollars | | Average |
| Region | Units | | (millions) | | Sales Price | | | Units | | (millions) | | Sales Price |
| Northern | 1,408 |
| | $ | 596 |
| | $ | 423,000 |
| | | 1,158 |
| | $ | 498 |
| | $ | 430,000 |
|
| Southern | 1,857 |
| | $ | 705 |
| | $ | 380,000 |
| | | 1,494 |
| | $ | 572 |
| | $ | 383,000 |
|
| Total | 3,265 |
| | $ | 1,301 |
| | $ | 399,000 |
| | | 2,652 |
| | $ | 1,070 |
| | $ | 403,000 |
|
|
| | | | | | | | | | | | | | |
| | LAND POSITION SUMMARY (a) |
| | March 31, 2020 | | | March 31, 2019 |
| | Lots | Lots Under | | | | Lots | Lots Under | |
| Region | Owned | Contract | Total | | | Owned | Contract | Total |
| Northern | 6,852 |
| 6,833 |
| 13,685 |
| | | 5,889 |
| 6,034 |
| 11,923 |
|
| Southern | 7,926 |
| 12,209 |
| 20,135 |
| | | 8,621 |
| 7,435 |
| 16,056 |
|
| Total | 14,778 |
| 19,042 |
| 33,820 |
| | | 14,510 |
| 13,469 |
| 27,979 |
|
| |
| (a) | Beginning in the second quarter of 2019, we changed from three reportable segments to two reportable segments: Northern and Southern. Prior year information has been restated for corresponding items of our segment information. |
