M/I Homes Reports 2017 First Quarter Results
COLUMBUS, Ohio, April 26, 2017 /PRNewswire/ -- M/I Homes, Inc. (NYSE: MHO) announced results for the three months ended March 31, 2017.
2017 First Quarter Highlights:
- Pre-tax income of $26.3 million compared to $14.7 million in 2016
- Pre-tax income increased 56%, excluding $2.2 million of pre-tax charges for stucco-related repairs in 2016
- Net income of $16.9 million ($0.55 per diluted share)
- Record revenue of $407 million, a 25% increase from 2016
- Record homes delivered of 1,038, an 18% increase from 2016
- New contracts of 1,454, an 11% increase from 2016 and an all-time quarterly record
- Average home closing price increased 6% to $373,000
- Backlog sales value increased 14% to $834 million; backlog units increased 13% to 2,220
For the first quarter of 2017, the Company reported net income of $16.9 million, or $0.55 per diluted share. This compares to net income of $9.2 million, or $0.30 per diluted share, for the first quarter of 2016. The first quarter of 2016 included a $1.3 million after-tax charge for stucco-related repairs in certain of our Florida communities.
New contracts for the first quarter reached an all-time quarterly record of 1,454, increasing 11% from the 1,314 contracts recorded in 2016's first quarter. Homes delivered in 2017's first quarter increased 18% to a first quarter record of 1,038. This compares to 876 homes delivered in 2016's first quarter. Homes in backlog at March 31, 2017 had a total sales value of $834 million, a 14% increase over a year ago, with backlog units of 2,220 and an average sales price of $376,000. At March 31, 2016, backlog sales value was $730 million, with backlog units of 1,969 and an average sales price of $371,000. M/I Homes had 184 active communities at March 31, 2017 compared to 181 at March 31, 2016. The Company's cancellation rate was 14% in the first quarter of 2017 compared to 11% in 2016's first quarter.
Robert H. Schottenstein, Chief Executive Officer and President, commented, "We had a very strong first quarter highlighted by a 56% increase in pre-tax income, a 170 basis point increase in our operating margin, and a number of record-setting achievements. We had record first quarter revenue of $407 million, record first quarter homes delivered of 1,038, and record new contracts of 1,454. Homes delivered were 18% higher than 2016's first quarter and new contracts improved by 11%. In addition, first quarter backlog reached a 10-year high with a sales value of $834 million - 14% better than a year ago. We were very pleased with our gross margin improvement, and our operating margin rose to 7.8%. We also opened a record 24 new communities during the quarter, increasing our community count to 184."
Mr. Schottenstein continued, "We are off to a very good start in 2017. We have a healthy backlog and housing market conditions remain favorable throughout most of our markets. Our financial condition is strong with shareholders' equity of $672 million and homebuilding debt to capital of 45%. We will continue to focus on increasing profitability, growing our market share, and investing in attractive land opportunities."
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 2018.
M/I Homes, Inc. is one of the nation's leading builders of single-family homes, having sold over 101,500 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 also currently operates under the name Hans Hagen Homes in its Minneapolis/St. Paul, Minnesota market. The Company has homebuilding operations in Columbus and Cincinnati, Ohio; Indianapolis, Indiana; Chicago, Illinois; Minneapolis/St. Paul, Minnesota; Tampa, Sarasota and Orlando, Florida; Austin, Dallas/Fort Worth, Houston and San Antonio, Texas; Charlotte and Raleigh, North Carolina; and the Virginia and Maryland suburbs of Washington, D.C.
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," "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 defect, 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, 2016, 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.
|
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, | |||||||
|
2017 |
2016 | ||||||
|
New contracts |
1,454 |
1,314 |
|||||
|
Average community count |
181 |
178 |
|||||
|
Cancellation rate |
14 |
% |
11 |
% | |||
|
Backlog units |
2,220 |
1,969 |
|||||
|
Backlog value |
$ |
834,415 |
$ |
729,950 |
|||
|
Homes delivered |
1,038 |
876 |
|||||
|
Average home closing price |
$ |
373 |
$ |
353 |
|||
|
Homebuilding revenue: |
|||||||
|
Housing revenue |
$ |
387,458 |
$ |
309,247 |
|||
|
Land revenue |
5,215 |
5,070 |
|||||
|
Total homebuilding revenue |
$ |
392,673 |
$ |
314,317 |
|||
|
Financial services revenue |
14,307 |
10,053 |
|||||
|
Total revenue |
$ |
406,980 |
$ |
324,370 |
|||
|
Cost of sales - operations |
320,281 |
258,017 |
|||||
|
Cost of sales - stucco-related charges |
— |
2,155 |
|||||
|
Gross margin |
$ |
86,699 |
$ |
64,198 |
|||
|
General and administrative expense |
27,760 |
22,259 |
|||||
|
Selling expense |
27,283 |
22,266 |
|||||
|
Operating income |
$ |
31,656 |
$ |
19,673 |
|||
|
Equity in income from joint venture arrangements |
(17) |
(307) |
|||||
|
Interest expense |
5,338 |
5,265 |
|||||
|
Income before income taxes |
$ |
26,335 |
$ |
14,715 |
|||
|
Provision for income taxes |
9,452 |
5,526 |
|||||
|
Net income |
$ |
16,883 |
$ |
9,189 |
|||
|
Preferred dividends |
1,219 |
1,219 |
|||||
|
Net income to common shareholders |
$ |
15,664 |
$ |
7,970 |
|||
|
Earnings per share: |
|||||||
|
Basic |
$ |
0.63 |
$ |
0.32 |
|||
|
Diluted |
$ |
0.55 |
$ |
0.30 |
|||
|
Weighted average shares outstanding: |
|||||||
|
Basic |
24,738 |
24,657 |
|||||
|
Diluted |
30,329 |
30,032 |
|||||
|
M/I Homes, Inc. and Subsidiaries | |||||||
|
Summary Balance Sheet and Other Information (unaudited) | |||||||
|
(Dollars in thousands, except per share amounts) | |||||||
|
As of | |||||||
|
March 31, | |||||||
|
2017 |
2016 | ||||||
|
Assets: |
|||||||
|
Total cash, and cash equivalents and restricted cash |
$ |
38,898 |
$ |
34,321 |
|||
|
Mortgage loans held for sale |
113,596 |
94,438 |
|||||
|
Inventory: |
|||||||
|
Lots, land and land development |
616,239 |
596,072 |
|||||
|
Land held for sale |
10,475 |
13,801 |
|||||
|
Homes under construction |
538,758 |
439,328 |
|||||
|
Other inventory |
121,146 |
104,336 |
|||||
|
Total Inventory |
$ |
1,286,618 |
$ |
1,153,537 |
|||
|
Property and equipment - net |
22,338 |
22,740 |
|||||
|
Investments in joint venture arrangements |
24,218 |
25,693 |
|||||
|
Deferred income taxes, net of valuation allowance |
30,449 |
55,860 |
|||||
|
Other assets |
56,148 |
50,123 |
|||||
|
Total Assets |
$ |
1,572,265 |
$ |
1,436,712 |
|||
|
Liabilities: |
|||||||
|
Debt - Homebuilding Operations: |
|||||||
|
Senior notes due 2021 - net |
$ |
295,953 |
$ |
294,904 |
|||
|
Convertible senior subordinated notes due 2017 - net |
57,237 |
56,662 |
|||||
|
Convertible senior subordinated notes due 2018 - net |
85,600 |
84,891 |
|||||
|
Notes payable bank - homebuilding |
110,900 |
114,500 |
|||||
|
Notes payable - other |
7,022 |
8,805 |
|||||
|
Total Debt - Homebuilding Operations |
$ |
556,712 |
$ |
559,762 |
|||
|
Notes payable bank - financial services operations |
106,937 |
87,186 |
|||||
|
Total Debt |
$ |
663,649 |
$ |
646,948 |
|||
|
Accounts payable |
94,403 |
81,594 |
|||||
|
Other liabilities |
142,501 |
103,565 |
|||||
|
Total Liabilities |
$ |
900,553 |
$ |
832,107 |
|||
|
Shareholders' Equity |
671,712 |
604,605 |
|||||
|
Total Liabilities and Shareholders' Equity |
$ |
1,572,265 |
$ |
1,436,712 |
|||
|
Book value per common share |
$ |
25.07 |
$ |
22.48 |
|||
|
Homebuilding debt / capital ratio(1) |
45 |
% |
48 |
% | |||
|
(1) |
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 | ||||||||
|
(Dollars in thousands) | ||||||||
|
Three Months Ended |
||||||||
|
March 31, |
||||||||
|
2017 |
2016 |
|||||||
|
Adjusted EBITDA(1) |
$ |
39,324 |
$ |
27,233 |
||||
|
Cash flow (used in) provided by operating activities |
$ |
(23,275) |
$ |
1,415 |
(2) | |||
|
Cash provided by (used in) investing activities |
$ |
3,206 |
$ |
(13,552) |
(2) | |||
|
Cash provided by financing activities |
$ |
24,526 |
$ |
33,357 |
||||
|
Land/lot purchases |
$ |
81,833 |
$ |
51,973 |
||||
|
Land development spending |
$ |
39,572 |
$ |
32,194 |
||||
|
Land sale revenue |
$ |
5,215 |
$ |
5,070 |
||||
|
Land sale gross profit |
$ |
376 |
$ |
729 |
||||
|
Financial services pre-tax income |
$ |
8,562 |
$ |
5,891 |
||||
|
(1) |
See "Non-GAAP Financial Results" table below. |
|
(2) |
During 2016, we elected to early-adopt Accounting Standards Update 2016-18, Statement of Cash Flows: Restricted Cash. Certain amounts above have been adjusted to apply the new method retrospectively. |
|
M/I Homes, Inc. and Subsidiaries | |||||||
|
Non-GAAP Financial Results (3) | |||||||
|
(Dollars in thousands) | |||||||
|
Three Months Ended | |||||||
|
March 31, | |||||||
|
2017 |
2016 | ||||||
|
Net income |
$ |
16,883 |
$ |
9,189 |
|||
|
Add: |
|||||||
|
Provision for income taxes |
9,452 |
5,526 |
|||||
|
Interest expense net of interest income |
4,612 |
4,835 |
|||||
|
Interest amortized to cost of sales |
3,766 |
3,544 |
|||||
|
Depreciation and amortization |
3,583 |
3,223 |
|||||
|
Non-cash charges |
1,028 |
916 |
|||||
|
Adjusted EBITDA |
$ |
39,324 |
$ |
27,233 |
|||
|
M/I Homes, Inc. and Subsidiaries | |||||||
|
Non-GAAP Reconciliation (3) | |||||||
|
(Dollars and shares in thousands, except per share amounts) | |||||||
|
Three Months Ended | |||||||
|
March 31, | |||||||
|
2017 |
2016 | ||||||
|
Total revenue |
$ |
406,980 |
$ |
324,370 |
|||
|
Gross margin |
$ |
86,699 |
$ |
64,198 |
|||
|
Add: Stucco-related charges |
— |
2,155 |
|||||
|
Adjusted gross margin |
$ |
86,699 |
$ |
66,353 |
|||
|
Gross margin percentage |
21.3 |
% |
19.8 |
% | |||
|
Adjusted gross margin percentage |
21.3 |
% |
20.5 |
% | |||
|
Income before income taxes |
$ |
26,335 |
$ |
14,715 |
|||
|
Add: Stucco-related charges |
— |
2,155 |
|||||
|
Adjusted net income before income taxes |
$ |
26,335 |
$ |
16,870 |
|||
|
Net income |
$ |
16,883 |
$ |
9,189 |
|||
|
Add: Stucco-related charges - net of tax |
— |
1,336 |
|||||
|
Adjusted net income |
$ |
16,883 |
$ |
10,525 |
|||
|
Stucco-related charges - net of tax |
$ |
— |
$ |
1,336 |
|||
|
Divided by: Diluted weighted average shares outstanding |
30,329 |
30,032 |
|||||
|
Diluted earnings per share related to stucco-related charges |
$ |
— |
$ |
0.04 |
|||
|
Add: Diluted earnings per share |
0.55 |
0.30 |
|||||
|
Adjusted diluted earnings per share |
$ |
0.55 |
$ |
0.34 |
|||
|
(3) |
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 Ended | ||||||||
|
March 31, | ||||||||
|
% | ||||||||
|
Region |
2017 |
2016 |
Change | |||||
|
Midwest |
556 |
495 |
12 |
% | ||||
|
Southern |
590 |
492 |
20 |
% | ||||
|
Mid-Atlantic |
308 |
327 |
(6) |
% | ||||
|
Total |
1,454 |
1,314 |
11 |
% | ||||
|
HOMES DELIVERED | ||||||||
|
Three Months Ended | ||||||||
|
March 31, | ||||||||
|
% | ||||||||
|
Region |
2017 |
2016 |
Change | |||||
|
Midwest |
379 |
322 |
18 |
% | ||||
|
Southern |
419 |
350 |
20 |
% | ||||
|
Mid-Atlantic |
240 |
204 |
18 |
% | ||||
|
Total |
1,038 |
876 |
18 |
% | ||||
|
BACKLOG | |||||||||||||||||||||
|
March 31, 2017 |
March 31, 2016 | ||||||||||||||||||||
|
Dollars |
Average |
Dollars |
Average | ||||||||||||||||||
|
Region |
Units |
(millions) |
Sales Price |
Units |
(millions) |
Sales Price | |||||||||||||||
|
Midwest |
934 |
$ |
373 |
$ |
400,000 |
845 |
$ |
330 |
$ |
391,000 |
|||||||||||
|
Southern |
845 |
$ |
295 |
$ |
349,000 |
702 |
$ |
247 |
$ |
352,000 |
|||||||||||
|
Mid-Atlantic |
441 |
$ |
166 |
$ |
377,000 |
422 |
$ |
153 |
$ |
361,000 |
|||||||||||
|
Total |
2,220 |
$ |
834 |
$ |
376,000 |
1,969 |
$ |
730 |
$ |
371,000 |
|||||||||||
|
LAND POSITION SUMMARY | ||||||||||||||
|
March 31, 2017 |
March 31, 2016 | |||||||||||||
|
Lots |
Lots Under |
Lots |
Lots Under |
|||||||||||
|
Region |
Owned |
Contract |
Total |
Owned |
Contract |
Total | ||||||||
|
Midwest |
3,591 |
5,779 |
9,370 |
3,488 |
5,003 |
8,491 |
||||||||
|
Southern |
4,859 |
6,211 |
11,070 |
4,630 |
5,132 |
9,762 |
||||||||
|
Mid-Atlantic |
1,952 |
2,028 |
3,980 |
2,750 |
1,259 |
4,009 |
||||||||
|
Total |
10,402 |
14,018 |
24,420 |
10,868 |
11,394 |
22,262 |
||||||||
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/mi-homes-reports-2017-first-quarter-results-300446083.html
SOURCE M/I Homes, Inc.