M/I Homes reports Q3 net income up to US$8.3M from loss of US$4.7M a year earlier; new contracts up 29% to 757, with number of delivered homes rising 28% to 746
Allison Oesterle
COLUMBUS, Ohio
,
October 25, 2012
(press release)
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M/I Homes, Inc. (NYSE:MHO) announced results for the third quarter and nine months ended September 30, 2012.
• Net income of $8.3 million; diluted earnings per share of $0.42 For the third quarter of 2012, the Company reported net income of $8.3 million, or $0.42 per diluted share, compared to a net loss of $4.7 million, or $0.25 per share for the third quarter of 2011. Net income for the quarter consists primarily of $6.8 million adjusted pre-tax income from operations, a $3.0 million recovery related to a drywall settlement, and $1.3 million of asset impairments. The prior year third quarter loss consisted primarily of a $3.0 million adjusted pre-tax loss from operations and $1.8 million of asset impairments. The Company reported net income of $8.3 million for the first nine months of 2012, or $0.43 per diluted share, compared to a net loss of $30.9 million, or $1.65 per share, for the same period a year ago.
2012 Third Quarter Results:
• Adjusted pre-tax income from operations of $6.8 million
• New contracts increased 29%
• Homes delivered increased 28%
• Backlog units and value increased 41% and 50%, respectively
• Adjusted EBITDA of $20.3 million
• Cash balance of $168.7 million
• Net debt to net capital ratio of 36%
New contracts for 2012's third quarter were 757, up 29% from 2011's third quarter of 587. For the nine months ended September 30, 2012, new contracts increased 25% from 1,876 in 2011 to 2,347. M/I Homes had 128 active communities at September 30, 2012 compared to 120 at September 30, 2011 and 124 at June 30, 2012. The Company's cancellation rate was 18% in the third quarter of 2012 compared to 19% in 2011's third quarter. Homes delivered in 2012's third quarter were 746 compared to 582 in 2011's third quarter. Homes delivered for the nine months ended September 30, 2012 were 1,878 compared to 2011's deliveries of 1,611 – up 17%. Backlog of homes at September 30, 2012 had a sales value of $334 million, with an average sales price of $284,000 and backlog units of 1,179. At September 30, 2011 backlog sales value was $223 million, with an average sales price of $266,000 and backlog units of 838.
Robert H. Schottenstein, Chief Executive Officer and President, commented, “We are pleased with our third quarter results as they represent our best quarterly performance in 5 years, and position us to return to full year profitability. We are making meaningful progress on a number of important fronts as housing conditions throughout most of our markets have improved. Net income improved by more than $13 million for the quarter and by more than $39 million for the first nine months. This was our 6th consecutive quarter of year over year improvement in new contracts as we continue to strengthen our market share in virtually every one of our markets. Our gross margin for the quarter equaled 19.8%, representing a 190 basis point improvement over last year’s third quarter; and we continue to gain operating leverage as our selling, general and administrative expense ratio also improved. We were also pleased with our 28% increase in closings, as well as a 12% year over year improvement in our average closing price.”
Mr. Schottenstein, continued, "With the combination of improving operating conditions and our return to profitability, we took important steps during the quarter to further strengthen our balance sheet by issuing $58 million of convertible debt and raising $42 million of additional equity. We ended the quarter with $169 million of cash, no borrowings under our $140 million homebuilding credit facility, and a 36% net debt to capital ratio. During the quarter, we also announced our decision to expand into the Austin, Texas market. Looking ahead, we believe we are well positioned to continue expanding our community count and growing the Company.”
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 October 2013.
M/I Homes, Inc. is one of the nation's leading builders of single-family homes, having delivered over 82,000 homes. The Company's homes are marketed and sold under the trade names M/I Homes, Showcase Homes, TriStone Homes and Triumph Homes. The Company has homebuilding operations in Columbus and Cincinnati, Ohio; Chicago, Illinois; Indianapolis, Indiana; Tampa and Orlando, Florida; Austin, 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 forwardlooking statements that we make herein and in 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 and various governmental rules and regulations, as more fully discussed in the Risk Factors section in the Company's Annual Report on Form 10-K for the year ended December 31, 2011, 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 in this press release will increase with the passage of time. The Company undertakes 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.
In this press release, we use the following non-GAAP financial measures: adjusted operating gross margin, adjusted operating gross margin percentage, adjusted pre-tax income (loss) from operations, and adjusted EBITDA. For these measures, we have provided reconciliations to the most comparable GAAP measures along with an explanation of the usefulness of the non-GAAP measures. Please see the “Non-GAAP Financial Results /Reconciliations” table below.
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