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Form 8-K M/I HOMES, INC. For: Jul 27

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July 27, 2022 8:38 AM EDT
0000799292false00007992922022-07-272022-07-27

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of Securities Exchange Act of 1934


Date of Report (Date of earliest event reported): July 27, 2022

M/I HOMES, INC.
(Exact name of registrant as specified in its charter)
Ohio1-1243431-1210837
(State or other jurisdiction(Commission(I.R.S. Employer
of incorporation)File Number)Identification No.)

4131 Worth Avenue, Suite 500             Columbus, OH 43219
(Address of principal executive offices)          (Zip Code)

(614) 418-8000
(Telephone Number)
N/A
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a.12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Shares, par value $.01MHONew York Stock Exchange


Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐




SECTION 2    FINANCIAL INFORMATION

ITEM 2.02    RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On July 27, 2022, M/I Homes, Inc. (the “Company”) issued a press release reporting financial results for the three-months ended June 30, 2022. A copy of this press release, including information concerning forward-looking statements and factors that may affect our future results, is attached hereto as Exhibit 99.1.

ITEM 9.01    FINANCIAL STATEMENTS AND EXHIBITS
(d)    Exhibits.
Exhibit No.
Description of Exhibit
99.1
104Cover Page Interactive Data File (embedded within the Inline XBRL document).*

         *Submitted electronically with this Report in accordance with the provisions of Regulation S-T.



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:  July 27, 2022

M/I Homes, Inc.

By:
/s/ Ann Marie W. Hunker
Ann Marie W. Hunker
VP, Chief Accounting Officer and Controller



Exhibit 99.1
milogoa42.jpg


M/I Homes Reports
2022 Second Quarter Results

Columbus, Ohio (July 27, 2022) - M/I Homes, Inc. (NYSE:MHO) announced results for the three and six months ended June 30, 2022.

2022 Second Quarter Highlights:
•Revenue increased 8% to $1.0 billion, a second quarter record
•Pre-tax income increased 29% to $182 million, an all-time quarter record
•Net income, an all-time quarter record, increased 27% to $137 million ($4.79 per diluted share) from
2021’s $108 million ($3.58 per diluted share)
•Homes delivered decreased 6% to 2,133 and average sales price increased 16% to $477,000
•New contracts of 1,820, down 20% with average community count down 8%
•Backlog units decreased 5% to 5,213
•Backlog sales value increased 9% to $2.7 billion, a second quarter record
•Shareholders’ equity reached an all-time record of $1.8 billion, a 24% increase from a year ago,
with book value per share of $66
•Homebuilding debt to capital ratio of 28% compared to 31% at June 30, 2021
•Return on equity improved to 27%

For the second quarter of 2022, the Company reported pre-tax income of $182.2 million and net income of $136.8 million, or $4.79 per diluted share. This compares to pre-tax income of $141.3 million and net income of $107.6 million, or $3.58 per diluted share, for the second quarter of 2021. For the six months ended June 30, 2022, net income increased 19% to $228.7 million, or $7.93 per diluted share, compared to $192.5 million, or $6.43 per diluted share, for the same period of 2021.

Homes delivered in 2022’s second quarter decreased 6% to 2,133 homes. This compares to 2,258 homes delivered in 2021’s second quarter. Homes delivered for the six months ended June 30, 2022 decreased 8% to 3,956 from 2021’s deliveries of 4,277. New contracts for the second quarter of 2022 decreased 20% over 2021’s 2,267 new contracts. For the first six months of 2022, new contracts decreased 19% to 4,334 compared to 5,376 in 2021. Homes in backlog at June 30, 2022 had a total sales value of $2.7 billion, a 9% increase from a year ago. Backlog units at June 30, 2022 decreased 5% to 5,213 homes, with an average sales price of $519,000. At June 30, 2021, backlog sales value was $2.5 billion, with backlog units of 5,488 and an average sales price of $454,000. M/I Homes had 168 communities at June 30, 2022 compared to 175 communities at June 30, 2021. The Company's cancellation rate was 11% in the second quarter of 2022 compared to 7% in the second quarter of 2021.

Robert H. Schottenstein, Chief Executive Officer and President, commented, “At a time of rapidly changing market conditions, we had a very strong quarter highlighted by record quarterly net income of $137 million, 27% better than a year ago, and a 34% increase in earnings per diluted share. These record earnings resulted in our return on equity improving to 27%. Our revenues increased 8% to a second quarter record $1 billion, with gross margins


improving by 220 basis points to 27.3%, and SG&A improving by 70 basis points to 9.7%, all leading to a pretax income margin of 17.5%. Our backlog sales value at June 30 increased 9% to a second quarter record $2.7 billion.”

Mr. Schottenstein continued, “During the quarter, we began experiencing a moderation in demand due to the unprecedented rapid rise in interest rates and continued inflationary pressures across the economy. Clearly, there is growing uncertainty on a number of fronts and choppy market conditions may persist for some time. Still, our financial condition is very strong. We ended the quarter with record shareholders’ equity of $1.8 billion, an increase of 24% over last year, book value of $66 per share, cash of $189 million, zero borrowings on our $550 million credit facility, and a homebuilding debt to capital ratio of 28%. Additionally, housing fundamentals remain solid with an undersupply of available homes and favorable demographics. Looking ahead, we believe we are well positioned to manage through these changing and uncertain times given the strength of our balance sheet, low debt levels, record backlog sales value, 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 July 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 EndedSix Months Ended
June 30,June 30,
2022202120222021
New contracts1,820 2,267 4,334 5,376 
Average community count172 181 173 188 
Cancellation rate11 %7 %9 %7 %
Backlog units5,213 5,488 5,213 5,488 
Backlog sales value$2,706,586 $2,489,926 $2,706,586 $2,489,926 
Homes delivered2,133 2,258 3,956 4,277 
Average home closing price$477 $411 $468 $404 
Homebuilding revenue:
   Housing revenue$1,017,906 $927,506 $1,851,069 $1,725,785 
   Land revenue3,374 4,899 6,911 5,747 
Total homebuilding revenue$1,021,280 $932,405 $1,857,980 $1,731,532 
Financial services revenue19,374 28,635 43,485 58,284 
Total revenue$1,040,654 $961,040 $1,901,465 $1,789,816 
Cost of sales - operations756,367 719,672 1,404,069 1,346,257 
Gross margin$284,287 $241,368 $497,396 $443,559 
General and administrative expense55,216 49,078 103,999 94,283 
Selling expense46,206 50,576 87,627 96,265 
Operating income$182,865 $141,714 $305,770 $253,011 
Other income(1)(35)(17)(195)
Interest expense693 452 1,364 1,628 
Income before income taxes$182,173 $141,297 $304,423 $251,578 
Provision for income taxes45,335 33,690 75,746 59,105 
Net income$136,838 $107,607 $228,677 $192,473 
Earnings per share:
Basic$4.88 $3.68 $8.10 $6.60 
Diluted$4.79 $3.58 $7.93 $6.43 
Weighted average shares outstanding:
Basic28,041 29,271 28,231 29,144 
Diluted28,590 30,093 28,826 29,935 


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

As of
June 30,
20222021
Assets:
Total cash, cash equivalents and restricted cash (1)
$188,755 $371,806 
Mortgage loans held for sale194,450 172,760 
Inventory:
Lots, land and land development1,136,380 833,665 
Land held for sale10,524 3,840 
Homes under construction1,514,965 1,095,585 
Other inventory154,396 143,379 
Total Inventory$2,816,265 $2,076,469 
Property and equipment - net36,150 23,997 
Investments in joint venture arrangements55,625 32,833 
Operating lease right-of-use assets52,328 52,085 
Goodwill16,400 16,400 
Deferred income tax asset10,251 6,183 
Other assets123,100 108,879 
Total Assets$3,493,324 $2,861,412 
Liabilities:
Debt - Homebuilding Operations:
Senior notes due 2025 - net$— $247,873 
Senior notes due 2028 - net395,718 394,944 
Senior notes due 2030 - net296,109 — 
 Notes payable - other1,001 4,126 
Total Debt - Homebuilding Operations$692,828 $646,943 
Notes payable bank - financial services operations194,602 167,119 
Total Debt$887,430 $814,062 
Accounts payable329,384 221,909 
Operating lease liabilities53,058 52,450 
Other liabilities405,185 306,447 
Total Liabilities$1,675,057 $1,394,868 
Shareholders’ Equity1,818,267 1,466,544 
Total Liabilities and Shareholders’ Equity$3,493,324 $2,861,412 
Book value per common share$65.50 $50.02 
Homebuilding debt to capital ratio (2)
28 %31 %
(1)Includes $1.2 million and $0.5 million of restricted cash and cash held in escrow for the quarters ended June 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 EndedSix Months Ended
June 30,June 30,
2022202120222021
Cash provided by operating activities$9,214 $98,633 $78,540 $173,801 
Cash used in investing activities$(4,829)$(13,386)$(11,463)$(12,763)
Cash used in financing activities$(34,236)$(6,341)$(114,690)$(50,042)
Land/lot purchases$120,667 $150,271 $214,615 $242,629 
Land development spending$106,543 $86,425 $207,240 $157,620 
Land sale revenue$3,374 $4,899 $6,911 $5,747 
Land sale gross profit$591 $926 $1,558 $1,176 
Financial services pre-tax income$8,667 $17,976 $21,722 $37,669 



M/I Homes, Inc. and Subsidiaries
Non-GAAP Financial Results (1)
(Dollars in thousands)
Three Months EndedSix Months Ended
June 30,June 30,
2022202120222021
Net income$136,838 $107,607 $228,677 $192,473 
Add:
Provision for income taxes45,335 33,690 75,746 59,105 
Interest income(750)(543)(1,307)(268)
Interest amortized to cost of sales7,536 9,438 14,863 17,643 
Depreciation and amortization4,286 4,124 8,474 8,234 
Non-cash charges2,018 2,141 3,849 4,243 
Adjusted EBITDA$195,263 $156,457 $330,302 $281,430 

(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 EndedSix Months Ended
June 30,June 30,
%%
Region20222021Change20222021Change
Northern722 884 (18)%1,912 2,190 (13)%
Southern1,098 1,383 (21)%2,422 3,186 (24)%
Total1,820 2,267 (20)%4,334 5,376 (19)%


HOMES DELIVERED
Three Months EndedSix Months Ended
June 30,June 30,
%%
Region20222021Change20222021Change
Northern1,000 961 4 %1,760 1,762 — %
Southern1,133 1,297 (13)%2,196 2,515 (13)%
Total2,133 2,258 (6)%3,956 4,277 (8)%


BACKLOG
June 30, 2022June 30, 2021
DollarsAverageDollarsAverage
RegionUnits(millions)Sales PriceUnits(millions)Sales Price
Northern2,042 $1,036 $507,000 2,243 $1,050 $468,000 
Southern3,171 $1,670 $527,000 3,245 $1,440 $444,000 
Total5,213 $2,706 $519,000 5,488 $2,490 $454,000 


LAND POSITION SUMMARY
June 30, 2022June 30, 2021
LotsLots UnderLotsLots Under
RegionOwnedContractTotalOwnedContractTotal
Northern7,601 7,764 15,365 6,655 8,344 14,999 
Southern17,196 15,285 32,481 11,608 17,433 29,041 
Total24,797 23,049 47,846 18,263 25,777 44,040 



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