M I HOMES INC - 10-Q Quarterly Report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2004

or

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-12434

M/I HOMES, INC.

(Exact name of registrant as specified in its charter)

Ohio				31-1210837

(State or Other Jurisdiction				(I.R.S. Employer
of Incorporation or Organization)				Identification No.)

3 Easton Oval, Suite 500, Columbus, Ohio	43219

(Address of Principal Executive Offices)	(Zip Code)

(614) 418-8000

(Telephone Number)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES	X		NO

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

YES	X		NO

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Common stock, par value $.01 per share: 14,083,523 shares

outstanding as of July 30, 2004

M/I HOMES, INC.
FORM 10-Q

TABLE OF CONTENTS

			PAGE
PART I.	FINANCIAL INFORMATION		NUMBER

	Item 1.	M/I Homes, Inc. and Subsidiaries Condensed Consolidated Financial Statements

		Condensed Consolidated Balance Sheets June 30, 2004 (Unaudited) and December 31, 2003	3

		Unaudited Condensed Consolidated Statements of Income for the Three and Six Months Ended June 30, 2004 and 2003	4

		Unaudited Condensed Consolidated Statement of Shareholders’ Equity for the Six Months Ended June 30, 2004	5

		Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2004 and 2003	6

		Notes to Unaudited Condensed Consolidated Financial Statements	7

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13

	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	29

	Item 4.	Controls and Procedures	30

PART II.	OTHER INFORMATION

	Item 1.	Legal Proceedings	30

	Item 2.	Changes in Securities and Use of Proceeds	31

	Item 3.	Defaults Upon Senior Securities	31

	Item 4.	Submission of Matters to a Vote of Security Holders	31

	Item 5.	Other Information	31

	Item 6.	Exhibits and Reports on Form 8-K	31

Signatures			32

Exhibit Index			33


	2

M/I HOMES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

		June 30,			December 31,
		2004			2003
(Dollars in thousands, except par values)		(Unaudited)

ASSETS:

Cash	$	1,497		$	3,209
Cash held in escrow		8,393			9,575
Mortgage loans held for sale		48,723			65,929
Inventories:
Single-family lots, land and land development costs		485,082			365,979
Houses under construction		284,409			211,842
Model homes and furnishings - at cost (less accumulated depreciation: June 30, 2004 - $152;
December 31, 2003 - $121)		1,169			2,345
Community development district infrastrucure		5,410			-
Land purchase deposits		4,845			11,460
Consolidated inventory not owned		4,932			-
Building, office furnishings, transportation and construction equipment – at cost (less accumulated
depreciation: June 30, 2004 - $8,881; December 31, 2003 – $7,608)		33,401			34,225
Investment in unconsolidated joint ventures and limited liability companies		13,713			13,952
Other assets		22,659			28,356

TOTAL ASSETS	$	914,233		$	746,872

LIABILITIES AND SHAREHOLDERS’ EQUITY:

LIABILITIES:
Accounts payable	$	79,289		$	55,131
Accrued compensation		13,071			26,504
Customer deposits		26,049			21,308
Other liabilities		54,113			61,906
Community development district obligation		5,410			-
Obligation for consolidated inventory not owned		4,932			-
Notes payable banks – homebuilding operations		189,000			95,000
Note payable bank - financial services operations		16,900			24,000
Mortgage notes payable		35,432			10,614
Senior subordinated notes		50,000			50,000

TOTAL LIABILITIES		474,196			344,463

Commitments and Contingencies		-			-

SHAREHOLDERS’ EQUITY:
Preferred stock - $.01 par value; authorized 2,000,000 shares; none outstanding		-			-
Common stock - $.01 par value; authorized 38,000,000 shares; issued 17,626,123 shares		176			176
Additional paid-in capital		68,238			67,026
Retained earnings		430,959			387,250
Treasury stock - at cost - 3,503,400 and 3,394,188 shares, respectively
at June 30, 2004 and December 31, 2003		(59,336	)		(52,043	)

TOTAL SHAREHOLDERS’ EQUITY		440,037			402,409

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	914,233		$	746,872

See Notes to Unaudited Condensed Consolidated Financial Statements.


	3

M/I HOMES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2004		2003		2004		2003
(In thousands, except per share amounts)	(Unaudited)				(Unaudited)

Revenue (Note 15)	$	281,197	$	240,904	$	509,861	$	449,616

Costs and expenses:
Land and housing (Note 15)		203,568		178,758		371,140		332,069
General and administrative (Note 15)		17,039		13,497		28,349		24,995
Selling		17,694		16,009		33,361		29,327
Interest (Note 15)		1,769		629		3,592		1,913

Total costs and expenses		240,070		208,893		436,442		388,304

Income before income taxes		41,127		32,011		73,419		61,312

Provision for income taxes		16,246		12,486		29,001		23,913

Net income	$	24,881	$	19,525	$	44,418	$	37,399

Earnings per common share:
Basic	$	1.76	$	1.36	$	3.15	$	2.59
Diluted	$	1.73	$	1.32	$	3.08	$	2.52

Weighted average shares outstanding:
Basic		14,122		14,350		14,094		14,454
Diluted		14,394		14,764		14,414		14,833

Dividends per common share	$	0 .025	$	0.025	$	0.05	$	0.05

See Notes to Unaudited Condensed Consolidated Financial Statements.


	4

M/I HOMES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

Six Months Ended June 30, 2004

(Unaudited)

Common Stock

Additional

Total