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 September 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 shares, par value $.01 per share: 14,093,713 shares

outstanding as of October 29, 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 September 30, 2004 (Unaudited) and December 31, 2003	3

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

		Unaudited Condensed Consolidated Statement of Shareholders' Equity for the Three and Nine Months Ended September 30, 2004 and 2003	5

		Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 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	14

	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.	Unregistered Sales of Equity Securities and Use of Proceeds	30

	Item 3.	Defaults Upon Senior Securities	30

	Item 4.	Submission of Matters to a Vote of Security Holders	30

	Item 5.	Other Information	30

	Item 6.	Exhibits	31

Signatures			32

Exhibit Index			33


	2

M/I HOMES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

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

ASSETS:

Cash	$ 3,866		$ 3,209
Cash held in escrow	10,994		9,575
Mortgage loans held for sale	37,826		65,929
Inventories	819,607		591,626
Building, office furnishings, transportation and construction equipment - at cost (less accumulated
depreciation: September 30, 2004 - $9,339; December 31, 2003 - $7,608)	33,193		34,225
Investment in unconsolidated joint ventures and limited liability companies	14,373		13,952
Other assets	24,926		28,356

TOTAL ASSETS	$944,785		$746,872

LIABILITIES AND SHAREHOLDERS’ EQUITY:

LIABILITIES:
Accounts payable	$ 83,136		$ 55,131
Accrued compensation	19,186		26,504
Customer deposits	26,414		21,308
Other liabilities	57,252		61,906
Community development district obligations	5,293		-
Obligation for consolidated inventory not owned	4,932		-
Notes payable banks - homebuilding operations	236,000		95,000
Note payable bank - financial services operations	15,800		24,000
Mortgage notes payable	35,652		10,614
Senior subordinated notes	-		50,000

TOTAL LIABILITIES	483,665		344,463

Commitments and Contingencies	-		-

SHAREHOLDERS’ EQUITY:
Preferred shares - $.01 par value; authorized 2,000,000 shares; none outstanding	-		-
Common shares - $.01 par value; authorized 38,000,000 shares; issued 17,626,123 shares	176		176
Additional paid-in capital	68,355		67,026
Retained earnings	453,173		387,250
Treasury shares - at cost - 3,532,410 and 3,394,188 shares, respectively
at September 30, 2004 and December 31, 2003	(60,584	)	(52,043	)

TOTAL SHAREHOLDERS’ EQUITY	461,120		402,409

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$944,785		$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		Nine Months Ended
	September 30,		September 30,
	2004	2003	2004	2003
(In thousands, except per share amounts)	(Unaudited)		(Unaudited)

Revenue (Note 16)	$315,496	$268,130	$825,357	$717,746

Costs and expenses:
Land and housing (Note 16)	237,542	202,378	608,682	534,447
General and administrative (Note 16)	17,840	15,457	46,189	40,452
Selling	19,847	17,285	53,208	46,612
Interest (Note 16)	2,965	710	6,557	2,623

Total costs and expenses	278,194	235,830	714,636	624,134

Income before income taxes	37,302	32,300	110,721	93,612

Provision for income taxes	14,735	12,919	43,736	36,832

Net income	$ 22,567	$ 19,381	$ 66,985	$ 56,780

Earnings per common share:
Basic	$ 1.60	$ 1.34	$ 4.75	$ 3.93
Diluted	$ 1.57	$ 1.31	$ 4.65	$ 3.83

Weighted average shares outstanding:
Basic	14,099	14,435	14,096	14,447
Diluted	14,370	14,848	14,412	14,841

Dividends per common share	$ .025	$ .025	$ .075	$ .075

See Notes to Unaudited Condensed Consolidated Financial Statements.


	4

M/I HOMES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

Nine Months Ended September 30, 2004

(Unaudited)

Common Shares

Additional

Total

Paid-In

Retained

Treasury

Shareholders'

(Dollars in thousands, except per share amounts)

Outstanding

Amount

Capital

Earnings

Equity

Balance at December 31, 2003

14,231,935

$176

$67,026

$387,250

$(52,043

)

$402,409

Net income

66,985

Dividends to shareholders, $0.075 per common share