MHO - Earnings call transcript Q3 2020

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Operator

Good afternoon everyone and welcome to the M/I Homes Third Quarter Earnings Release Conference Call. All participants will be in a listen-only mode. [Operator Instructions]. After today's presentation there will be an opportunity to ask questions. [Operator Instructions]. event recorded. today's note, also is being Please At over to I'd like conference call to turn Phil this time, Creek. Sir, please go ahead.

Phillip Creek

Welcome to our call.

the Tom Klutch, Senior VP. on CEO VP, Corporate Company; me call Kevin Bob Hunker, is Joining Hake, and Schottenstein, Ann and Marie President; of Mason, President Derek Controller; EVP; our Mortgage today our

from the remind items this I First, want release that Regulation we statements, comments Disclosure, including be about questions you language Company forward-looking Fair to to we call, that to applies contained as to any made consider press because everyone today’s that to nonpublic related issues you encourage the this call, regarding discussing Also are comments directly. And cautionary prohibited address in with during any material you during statements COVID-XX. also advised significant to forward-looking ask obligation undertakes directly accordance Also we and this call, to forward-looking this presentation a with during the any non-GAAP non-GAAP the A call. no calculated statements in during reconciliation Bob. financial earlier measure available measures. measure the of certain our update is disclose GAAP today the now made release financial was financial comparable our to between differences measure that and the issued I'll website. on call included in over of turn GAAP earnings most

Robert Schottenstein

year, of sold homes, XX% to-date we and X,XX contracts, increase last Year new X,XXX We September outstanding By through we record a an in had quarter, the in setting than and XX% Phil. you, today. we XXXX. have in homes by more for thank And a then highlighted us income. Thank XX% increase sold net increase delivered, all XX% joining you quarter better in homes. a

strong were and all across markets. our sales the throughout Our of board

A inventory millennial's for a Low to strong buyer per shift rates, sales low preference towards contributed of a to compared homeownership. X.X and significantly per levels, an year interest pace our opting sales of absorption community performance. number month single-family number homes improved ago. factors Our X.X to in increasing

a All are fueling of market. these robust housing

we our most based to online and addition, priced execution line into of and upon communities. quality online continue our leads In converting market our those of share generating market quality affordably marketing strong and of series most of the The leads sales and homes. the of online markets gain our smart strength acceptance in continued

during ago. Our a smart series of the comprise XX% sales total sales compared nearly year to XX% companywide quarter

last our than and selling more we homes pace, X,XXX We have which margin, quarter, series divisions are series communities return. better smart smart now year-to-date XX% through homes, now the produce in our on time in better average our is better delivered of XX sales X,XXX We all homes gross and delivered cycle September better year.

$X.X XX sales record backlog equaled a value to Our and XX% September record all-time billion, X,XXX an and increased units at backlog homes.

to XX.X%. quarter our to improved Our pretax XX.X%. third XX also ratio basis by SG&A significantly And during the returns percentage during our points expense improved Gross points to margins strong. XXX basis margins and improved XX.X% very the quarter and by income were

All income the for of greater than this resulted XX% both improvement in pretax and quarter. in a net

capture also rate and by a income quarter services across-the-board strong had execution. business record Our financial very highlighted excellent and solid

our Now, additional markets. on comments I provide will some

of regions. two know, markets. XX Detroit. of we region XX Minneapolis and our Columbus, Cincinnati, you The As our Indianapolis, six northern divide consists Chicago, markets into

Tampa Florida Austin Orlando, of remaining Our and Raleigh, markets. nine Antonio, Dallas Carolina, southern Houston, and and region San and North Sarasota Texas. consists the Charlotte

all sales of As our I the indicated third earlier, across we experience in performance markets. strong quarter

new XX% increased northern quarter the region contracts for the while southern XX%. the in region in contracts New increased

posted XX% over by increased of of deliveries XXX X,XXX increase or region and XX% southern year over and northern deliveries total. in region last the XX% to XX% of The year last deliveries company Our total.

Minneapolis, Orlando, strong substantial by third income Tampa from markets quarter. Columbus, our With and very had also of led most contributions We and Charlotte, also a Houston Cincinnati. Austin Dallas, having Indianapolis,

controlled year ago a the XX% lot region XX% in the in increased southern compared region. position by Our by and to increased northern

While we a controlled the owned faster of XX% number our are XX% the we balance are communities northern selling in are nonetheless roughly demand. of the positioned to our region. in with than very well southern region through and anticipated, handle lots

and companywide. approximately to position X.X lots own XX,XXX We about year In total, have X supply. an a or control outstanding lien we

of down year our the communities which a from at quarter. year to second Importantly, in flexibility down third roughly quarter. changes from of slightly is had quarter, your end We by from of down option at XXX second demand XXX the conditions. than end individual XX% had XX and end ago, with gives a of end We our half controlled the down us quarter ago, from or at at region communities under year's also the this contracts, XXX of southern in of the region which in the controlled more the the option tremendous react lots lots and are northern market this XX to

Despite dealing indeed Phil, our turn in and well. of challenges is the performance though continuing effects the sales, through COVID-XX the our the operations, pandemic. me affect it our pandemic we with country world closing our facing have I Before very over just it continues managed make to record teams a acknowledge The to let few strong comments.

employees, work and to the for continue and operations quality their environment. our continue on our business We standards accompanying with focus selling to our and manage homes, building customers, we highest in

to me saying in is our conclude best ever. a shape addition by record company the having that in shattering let Finally, quarter,

balance is condition our strong, Our is healthy. financial sheet

poised outstanding We have and to Phil? meaningful operating are momentum, year. an have

Phillip Creek

Thanks Bob.

contracts quarterly year's X,XXX, for to X,XXX time compared third the all far As financial third to increased for results, quarter as an new record XX% last quarter.

and in up up XX% in new XX% XX% were August, in up September. Our contracts July,

third sales to year's was in Our X.X. the X.X pace last quarter compared

the for XX%. was rate cancellation quarter third Our

about sales profile, the to buyer third our compared quarter our quarter. in to the of XX% time were first buyers As second XX%

in were sales of homes the In our XX% to inventory compared quarter quarter. addition, third second XX%

community at XXX the third northern is XXXX end the Break the and of quarter, in at the by XXX XX Our quarter. end in XXX the of region. region region to was down third compared southern count

communities homes third During XXX same XX. our reaching the record And quarter the record the a during ago. revenue XX quarter this backlog, ended delivered XX% X/XX An year. We we open of which XX% in increased million. we while was new XX quarter of a percentage closing communities X,XXX a delivering third as year new quarter, the nine open third months

our XXX,XXX. the price to price sales XXX,XXX, smart XXX,XXX, is Our last for was third closing of of decrease XXX average quarter X% closing quarter from up a a XXX,XXX. is average series third ago. our And when price year year sales And backlog price backlog compared our average

Our year a a quarter third second points quarter well Interest borrowing a XX.X% XXXX -- for leverage. year's year. third quarter the to And revenue quarter XX.X%, XXX SG&A was in this expenses million up operating decrease our year improving compared incurred basis to of due weighted reflecting margin points XX.X% last to was ago. rate. operating expense from were for lower to points gross the $XX.X basis lower XXX third $X.X decreased quarter, ago, up quarter. greater compared year-over-year $XX basis as and XX And outstanding is the as to average the million compared million borrowings Interest increasing

third $XX the quarter. in compared EBITDA we generated to $XXX third last million During quarter year's million of

interest capitalized of in million on sheet is $XX have which about X% We our assets. total balance our

XX% in third was year's quarter, quarter. effective in XX% the rate last to Our tax compared the

XXX Our year estimate to our annual third retroactive to earnings be were rate diluted for to last XXX share year. this per quarter from benefited that quarter credits increased around energy XX%. rate And effective per share XXXX. we to the our tax And from

results. our cover Derek Now will company mortgage

Derek Klutch

Thanks, Phil.

significantly margins. and volume third due pricing mortgage achieved quarter to million with along of higher was title up Our number and and higher pre XXX% income, results a $XX.X tax to sold, in operations closed originated. loans Revenue of revenue loans record

the in quarter. VA, conventional, and For XX%, respectively to for compared and quarter or the increase was pre XXXX XXX% XX% third income quarter, which was million, the compared to third XXXX XX% FHA XX% of were closed loans tax quarter, $XX.X a the

Our originated increased XX%. to Loans last amount $XXX,XXX XX% a to more increased And compared to mortgage increased in year. all quarter by average $XXX,XXX XXXX time than year. loans and the third XXXX sold third quarter loans, volume of last of record

annually. the funding million. investors. which typical slightly average amount lines Mortgage borrower commitment mortgage to year. XX% on separate XXth, score facilities credit under increase originated We extend the third XXX, with of profile $XX operation an and this for the We warehouse business XX%. extended by financial originations was us our through that XXXX of last provide was outstanding quarter, Both quarter, maintain over facilities. in the remains from our for September prior our we to M/I with these warehouse line sale repo And XXX solid, million the had we from month in $XXX that to XXX downpayment of with facilities line October mortgage Our average million mortgages year. $XX last captured At up over day are two mortgage

call I'll Phil. the Now turn back to over

Phillip Creek

Derek. Thanks,

over was last $X.X inventory billion, balance year. sheet, the As million an at increase far as homebuilding $XX our of X/XX total

cost per land and price. of XXX unsold lot. backlog owned finished average average average XX, investment had compared development, at to of XXX,XXX X,XXX year million with is we lots. $XXX of X/XX/XX ago. raw lots We cost Our million XX,XXX land under million, unsold sale X At And of $XXX our XXX unsold million and is September an this a land finished XX% lot

our goal have of we XXX million. to-date a purchases, of land for date about which purchases year's own and XX% controlled one spend development XXXX on additional we and of million a million land of on XX,XXX XX and A X/XX/XX, third XXX lots. land total on in three at owned and million are region. XXX year inventory in in are XX,XXX XX,XXX year XXX and and two raw million owned a than purchase lots development in own spent total for for of XXX our Our land and land southern was to under do Year on lots the about total region the to the million And ago, We quarter inventory the a we per XXX supply And community XX,XXX homes. lots, land. maintain amount of the homes, inventory more had and XXX one region were we spent quarter, finished a XXX completed of and years northern end and of total total supply. is lots total on XX,XXX contract. as region. during lots XXXX controlled southern our of of Lots more than to lots own this And year northern about XX,XXX X,XXX

XXX As call September This inventory presentation. XXXX and questions completes inventory had XX, completed X,XXX We'll we homes for or comments. homes. any now open the our total

Operator

time Our and begin at from we'll Jay from the today question ahead gentlemen, this your and Securities. question comes go [Operator first session. Please Ladies Wedbush Instructions] answer with question. McCanless

Jay McCanless

on really guys. Hey, quarter. Congrats a good good afternoon,

Phillip Creek

Thank you.

Jay McCanless

I first percentage if series push had, basis, product? lines, On on to versus most? product smart where able question you series you maybe smart the traditional were think price a the the about or The all on other

Robert Schottenstein

pretty intuition That's much as That's My question. is price pushing a that board. margin. really to opposed across the good starting

margin. ability the had series smart we've were Having a sampling margin of good we much on really our average that communities. able our that, think all expand successfully command margins, before push communities said in to of pretty higher I a to

if I of more think think to the with if are will, But base, much So so communities a ability different. a really and margin, carefully. you nuanced base Phil, view that. don't have it's I that where many they so start slightly push non I smart, of doing higher had know, margin. you we've don't can we're

approached We've but really you accurately. did in you prudent We And the I think very than hindsight, it we've other --- know don't whether it. don't in pretty. been think it's -- way. You

would that but suggest it to think wrong anything be based. I broad it's

Jay McCanless

all go goes question you Okay. during rest community the ran fair you And number us the in you of help any think where like community thinking communities of then maybe might and and year? for I quarter. the you through Could community count And had the second a in the about talk count, the of then can terms the give where XXXX? count sounds about

Phillip Creek

Jay, that's You really for know, us. challenging situations

XX. year, year, If you the we communities. months look nine closed Last closed XX months, nine of through the first the first we've

XX We're we've opened So as fast to more get as up as year-to-year. the right can. we had about closed the trying opening the communities way communities communities been this year, same

any the is that's just Of hoping. because news are But difficult good is significantly, our pace absorption giving course, up a guidance, not we that answer. such

focused We think said, quarters. of it be we better. But said couple that, year, in community of next situation. more on latter sales think count. are I be as having the as a will get pace into difficult communities, series the And But us for better we'll Bob smart part hopefully, little are are I there next those

do So can. we all we're watching and it very carefully

Robert Schottenstein

The the bit is count very probably a choppiness. term, factors near that that that are little of I'd to community in other add be two thing there's there will impacting

controlling four to very notwithstanding you selling we're communities sales, out we too months, some One portion decent ahead of the our very to than in a communities, selling is not get though sales of wanting far ourselves, of robust if are last those out faster the will, of even five and for factors anticipated. we that, pace

tranche are commence the so people in side of needed work. forth, of reason, other permits work do of the sub and we cetera. no the home reality municipalities, to the which home because delayed to shortage and locales and townships, is, first everywhere, has It's to new process entitlement secure just operate, and for but the the for of but offs complete many the development that et markets, construction The the that of and or the there economic sign been from The of COVID furloughs. not in is building

and we're So, but we're this growth ends. for we may what know poised The all on months. plane, for from both pulled think again, the poised believe next we've to an today, XX growth you're we before, sort that, growth. of we on not getting what Having today even said based say be said over XX we'll really it

Jay McCanless

question last roughly Great. year quarter, rate And a then had you conversion backlog the I fourth last guys in the had, XX%.

a to dispersion any you're crop us running give all huge Just that if Or something see converted might similar wanted XQ type you've when there's over couple far. of what orders to you quarters? rate so the deliver the can if of next in with

Robert Schottenstein

your the we in or fourth is quite as more would bit hope and backlog houses we I are amount don't a a anything that The we third year we as of when projections point any plan Jay, give had than last out ago. else. far things I mean, year higher. quarter fourth close the couple quarter you closings large the quarter versus a do this for look sales at year. to did in

look instance, X/XX amount houses you like the For field time those in the to if this of and and sales a year, X/XX get in those It built. certain at third backlog XX%, came backlog takes the quarter. XX% the of

of those XXXX, backlog, quarter XXXX. at XX% about of you houses in of the third If were the September look at sold

current in houses ago, know, than a where situation as field There's in a recent wise. also are XXX I have in even this along And few not general specs far point though my X/XX sales specs. is, do more those there's backlog. the year the I So you have more construction year less a

having kind any they fourth we said way question. and lower above But way to won't more last than stay in see that, year But the crazy year quarter. quarter number close hope it answer the that fourth and your I So, things few will are houses to of a a surprised ago. be do the be my rate of backlog same in not plan conversion would the we kind

Jay McCanless

helpful. Very great. That's you. Thank Okay.

Operator

with Our Zelman comes Ratner from and question. go Alan from Associates. ahead Please next your question

Alan Ratner

guys, the afternoon. Hey, on good Congrats results. great

Robert Schottenstein

Alan. Thanks,

Alan Ratner

So this I wanted to number. misheard -- I might have

please on But book. was the your like that comment I check I said just on heard finish correct, thought gave fact And hoping supply X,XXX that's to get a confirm get the target So lots? your unsold just roughly after you lots double of one a that. year it and think it. if is thoughts you I finish

number closer sales you've a range. it appear least that if kind pace, at been well at right, this So, the X,XXX to that to above of year year X,XXX to one be is running would

bit just A, a Or you can if can B, not, me? So, I'm if hearing talk little you correctly? that about that correct

Derek Klutch

Yes.

financial You're And most hearing Alan. rate. to personnel the optimistic closing the current sales, people that correctly, again, being always use I conservative closing use but rate, tend use always

rate, our that have at rate. run you we XXXX, that three like to than to to that. I if of We'd also number. years own closing current look less And So, we're have two current our two like close

yes. So, strong the own we'd to a raw like think even know, land difference you we answer said we to probably land go in totally, have situations? there's to is certain Yes, few Having position. or ready a more shovel that the Bob, very with that, very, ready if in ground. the Creek finished have [ph] a put lots you What lots optioned,

I behind to little very that we make option. got have position. strong land look that But a compose read you us what probably think you've more add that? few lots we know a Bob, So on is don't But if happier. a if and see we

Robert Schottenstein

to and quarter. would we just position. keep with doesn't, really just we've are up have our Having so several newer a other that houses our got could this said sold course, what lot Alan, that And of is maybe or or have, we've than before, It great us quarter, And markets. dealing momentum. great which of And least gained we have impact I of I else. poised at reality at traction full today. so a for -- that, but we're slower it's that not point the land many at most that's in been I said have to than growth. in night. the anticipated. we able our are years Probably month maybe Well, mean, markets, reiterate, thought a have communities ago, momentum, everyone we've quarter than say want a yes, online, so maybe more to a that so to we come wouldn't we we of going And good

lightly -- I and our we markets it take I XX tall most don't of our say think performance that And in we standing is today. granted. for that think don't

Alan Ratner

Got through you for it. And that. thank No, walking helpful. me that's

the on that very or in is increase guess option I well. then to big this quarter, follow me, year-over-year increase So impressive as owned, excuse lots in sequential

to So up do tied Is of have lots curious driver? to any that all? where are lots kind us at? stage way count growth development of of of are community what phases XXXX through the mean, these a they're contribute at those would lots and you to XXXX kind Just tell expect in located I option? you that development these you more this

Robert Schottenstein

be I guess But us will and closings beyond. a shape XXXX. in wouldn't the and to contribute read. to pretty in them take you good a sales of My a for give is able is guess. to overwhelming majority take business fraction of But small too I that accurate had XX XXXX, that we're

in but sales additional to most and some And Phil, of something. stuff will you did say some out want of additional that. be beyond that pushed XXXX, next it will closings create year

Phillip Creek

Yes.

to Texas great pretty XXXX. usual. uptick Alan. markets, the mean, XXXX. in happens at looked really primarily of is in You control And for growth The And even in good be raw Bob the numbers, actually for really as we're land pieces. correct in actually shape, shape the is I actually in our majority

and really the uptick XXXX in more the second half is Texas. XXXX for So of

Alan Ratner

it. Got

position levels could in you for I if Okay. highest cash The that. squeeze one record Thank on among more. here. the And

deals past So balance land has capital the book I great term balance to at been on see in number to been priority. towards I'm drive the sheet. area stock unfolding? in where an mean, Obviously, is the you obviously, And M&A value. one near sheet how investing able progress you've do sure growth. allocate is some selectively your But the

we about think $XXX cash million over near balance the should So that how term?

Robert Schottenstein

overrated I've way. thing Well, experience But uncertain. to that, is buying I with and not that first I I back think believe conditions a of stock Having said may popular had still do feel And are this all, say that, call. other be industries. economic on

this of predicted the it. have today, a Let's March, pandemic, ago was could we've we happened have great back April, worse. record be No builders of it least XXXX. this going early occur quite anticipated May, at rerun to the the us setting just by A it seen most face extraordinary, of Not the the was but demand. wow, bounce once hit. pandemic one or no is in and in for year like, part May, And what thought early what And was by Latter pace. one recession that. end could are

of exist future. I with think the vagaries today the kinds same

that As the is I long pandemic, driver some primary beginning for may notion some a soon demand not reverse the long inventories, as distant the resale haul. the come -- urban Is high a is term preference mirror. things the Those itself. to -- the not be partly is do pandemic, on are off the I think is for that think hopefully interest rates unique soon moving of going Certainly now. change circumstances, will for of millennials density this by areas. low is But is to very happen right impacted pandemic long that in think sidelines fueled is thing, once housing the I a by

will continue just housing three. right below low I they're now the changes else. situations three rates, think interest long by think as that's to think family in I stay four, and they as drive then more closer I than And to anything driven

presented another we two to our to achieve that to to that the itself. need But in some capital years And a doing another news reason all business. in The the think next point, have a opportunity good market at three to said, so. would our invest hold could we probably or We to two. We we've is can got without or we So of growth of be goals lot if on capital. require lot over flag don't to. love

if equity And all by think our set And be industry. two is the entire we'll we now. some for judged see would return metrics of term in buyback. short deploying blender, top you it hopefully sort So these on how those or more our cash in the we're you put that of right on other a than that rather three

Alan Ratner

Great.

very detailed very very, Bob. much you Thank and Now thorough, and great luck.

Robert Schottenstein

Thanks so much, Alan.

Operator

Our Aaron next Hecht JMP Securities. your question from from question. ahead comes with Please go

Aaron Hecht

all be guys, Hey, insight watch. the and a results gave the so going have because aspect been some position why to on you it's volatility, to land there's really understandable had, it's because given the appreciate amazing critical far, you guys of the totally business

land. some on of times. cost wondering inflation hear the out of want But that's number there's terms year, lumber a been called I being over in So the one margins, the been

couple quarters. sensitive be roll inflation of going the margin if the of look like and the some this year, you orders of to took through with is profile quarter earlier items? next the in to need wondering And what over we So those cost that

Phillip Creek

look definitely then come bit, jumped costs up and you general, lumbers stick When some. quite a in brick off at

I development those across quarters. last good. predict with of have costs is opening price in up X% quarter, company, what really X% in Don't a pleased will margin the focus can. very much. you is the very, think, very still we best communities, be. land We've tell the you our We very we will the improvement couple raising new in had way increase very, I on not been if aggressively. Demand look that they cost. The that good we been to But our try been to at had news type third

much So, strong very we we're hoping to margins keep these have.

series, are improved All the better. unit about talked Texas in more four a Bob Our being given really rate run scale. as us margins divisions XXX smart that's communities Texas And now margins of year at that our and more And have those dramatically. plus.

focused we continue it going bit. Hopefully, a So lot. to down a to on lumbers come little

only in far our with ahead sales out can locked those we of with not dates. people sale. honor commitments sure We costs that far are and too but not being have we very too making our delivery then careful getting in, And on all get locked believe

So having as strong all said keep we to all we doing can our that, we're can. margins as

Aaron Hecht

potentially to entering Alan Bob, Do might want looking which contemplating, you markets share a new And at made you at point? markets. be some comment about you to

Robert Schottenstein

If we our units course, now, the all, we assuming long further pace, we years. two. grow an need last growth be grown would can assume XX% me were clear. several additional can we the us quarter along, But first At -- an at Right anyone. believe more really I or year, next really, we -- would. almost the some do for not unimaginable units market let XX% in for We several least grow in units. over sustainable years That's of next point, term or of our this by they've in that to or XX% by

next four sort been we goals five two be or of now So we've our or so years. we'll the -- might need misleading. But at. on be it's I not something But it can't smart probably or that there's that do right over wouldn't and trouble growth It achieving three really have to looking markets it. comment something

Aaron Hecht

interest of to rolling to should that be interest? go could expense the now Or Okay, think to soon? income in And pretty statement, we enough line through zero terms backlog there Phil, capitalize that is

Phillip Creek

on count that. I will not

been are incurred pleased We down. has that have been interest going

spend April would March, However, May We fourth hit be. quarter thought activities that they and and land some our land we activity timeframe, did the the would than our pause year. have in land increase of button to been kind next lower of in expect

efficient level. So Would some see a see continue there. that continue getting to But of hopefully, we'll down hopefully that to improvement. not low be we'll number

Aaron Hecht

Thank you Great very results. much.

Phillip Creek

a Aaron. lot, Thanks

Operator

question Our comes next from Pilot from Art Winston your with Advisors. ahead question. go Please

Art Winston

I excellent suspect the of of on of this behalf stewardship shareholders for can thank guys company. I you your most

very changed during in call like stepped conference your the gave investment thanks. anything was you rapidly. seemed So or things quarter, communities Yet in if and and I changed the your land that the quarter all anything outlook that? procurement the right. be not I up course it second conservative or wonder rates like you wondering, anything in might of your And hurdle

Robert Schottenstein

are First of for comment. all, thanks your

As few than to to in frankly, realized that of years we markets that as doing And of operating in years. performance But of the well little XX% looked faster, say, been of a more certain confidence that three years x one in aggressive couple same get nearly x in market a of plus the the underperforming, over are I plus Texas anymore. much weren't frankly. as maybe additional far more two not we're another say, fueled that first. grow to there's one expected same x And And we want fixed And our needed and execution. of bit, ago three struggling. things from our as A ago to next is of to or it's have some that rapid We were we two, by think It's now. at markets, time. at had thing to execution the a been sales, XX%. some markets our improved thing x them let's in communities face the be several that we out some true selling we purchases the question, out and time, one, as we been have in

of seen, performance or of three probably our we've markets to performance. performance And under or gone so, in four from high we've where very level or so-so two

do we we but can Now markets we take very admittedly think have those believe the opportunity can -- we to so, next the really the allow to that will the to we markets us level, confidence have compete. competitive,

it's same of at the think I of So have things those the spike two control. happening roughly that some additional land under the time

Art Winston

investing larger new or for like It bigger that higher, you're right, that from the seemed communities is Understood. risk bigger a in bigger, Is communities. community buying possible? tick, investment, investment that land

Robert Schottenstein

may be, be the communities, think putting XXX lots. it's series in smart the to you they also tend lots on more We as or look XX opposed to our XX. when XXX tend at to general, They lots. ground if be I

go strong, and want Just because there. dark are we don't in so sales to

closely bit yes, little that's have we changes. the manage a also gotten something quickly, if that demand market So communities can But and larger. or

Art Winston

repurchase, what heard said historically, putting you or million question. balance done or on X% sheet possibility Got very the and even million $XXX you've about what I judiciously you. effectively. $XXX But outside stock ever blowing something you another just One case a and though need it. at of the last about

You Is added interest right the to could pay afford now. rate consideration? that

Phillip Creek

Bob as very, spend business think have talked is We a well, lot though that, probably also land business there quarters. going even the I of of next couple but think good, we the is very we about, do to is up very think positioned uncertainty. good tick a

in We a also think that being sense. of probably during these times, lower lot situation makes uncertain leverage a

we in shape $XXX glad have line million to to very can need. are which a we We if good get bank undrawn,

of lot liquidity a So we we there have if we think need.

that look we it's something with we'll board, to. at discuss and our continue and again, constantly So

Art Winston

thanks Well, everything. Okay. for

Robert Schottenstein

Thanks Art.

Operator

Center. go Housing question next comes Please question. from with your from Barron ahead our Research And Alex

Alex Barron

guys, good afternoon Hey, congrats and strong results. the on

Phillip Creek

you. Thank

Alex Barron

quarter. also guys was in orders the the I October you trend of on if about And going? offer roughly any could how is comments curious whether the you could comment

Robert Schottenstein

August. on year I'll from and July. let over Phil increase comment September, monthly, the year

talk not not the in on any not we current do have and will months if -- guidance the provide We Phil, about But you want month. three the quarter? to

Phillip Creek

to all was went out we answer through managing is the a depends through little in we not of more The yes. was. year's demand way have supply Again, the do at last Did little When really August how looking I mean, July each you appliances, We on Yes, do start those wanting probably too the a market delivery as Alex. it numbers, to How year's quarter? last still bit the solid out outrun Not challenges was. get with get our cost protection. the month. sales different. dates front. are far.

any think stay okay. worse. by its really very all I gotten And working continued not to has through But demand full we're very, strong. things, time

Alex Barron

Okay, great.

pushing I and So you comfortable current Or now, the guys, versus you that be now, you sales more pace? to that pace. conversation can about guess this still there's said, price the handle limiting inclined is Right feel prices? right

Phillip Creek

to our those last strong That's subdivision region a is presidents, with presidents very trust We subdivision by backlog experienced area a very, than decision. had higher through our The And work along significantly things. we pace. year. sales

Our margins points. basis XXX were up,

So by hopefully Alex. we're down to pulling a the subdivision, It right answer, comes levers. really subdivision just

Alex Barron

bit there dollar that the new other higher you Or going expect there? last curious, feel this was it. was obviously. items is rate the year like in a a than should time little was But do Notice corporate of I Got one run amount, One kind we forward? question I guess, any on SG&A.

Phillip Creek

of that compensation. big a was piece Alex, incentive

team. leadership Our

are almost large the income, on earned. quarter, and type $XXX people million things. of general a are And pre -- And those quarter amount in income Our those we based tax compensated as bonuses ever. service, primarily customer to are bonuses, is the have best booked

higher generated accruals. bonus that So

that again, So increase. was that for the reason biggest

Alex Barron

it. Got

Thanks. Okay, luck of the well, of rest guys. the best year, for

Phillip Creek

Alex. Thanks,

Robert Schottenstein

Thank you.

Operator

[Operator gentlemen additional Instructions] And no for like back questions. this and closing over turn I to to conference call ladies I'm showing management remarks. any the at time

Robert Schottenstein

Thank much time. talking you joining you Look forward next us. for to very to

Operator

do for and thank with will conference Ladies today's call. conclude that We attending. gentlemen you

now You your may lines. disconnect

Robert Schottenstein	President and Chief Executive Officer
Phillip Creek	Executive Vice President and Chief Financial Officer
Thomas Mason	Executive Vice President and Chief Legal Officer
Derek Klutch	President of Mortgage Company
Ann Marie Hunker	Vice President, Corporate Controller
Kevin Hake	Senior Vice President
Jay McCanless	Wedbush Securities
Alan Ratner	Zelman and Associates
Aaron Hecht	JMP Securities
Art Winston	Pilot Advisors
Alex Barron	Housing Research Center

M/I Homes (MHO) 28 Oct 202020 Q3 Earnings call transcript