Attached files
| file | filename |
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| 8-K - 8-K - M/I HOMES, INC. | a8kfirstquarterearnings3-3.htm |
Exhibit 99.1
M/I Homes Reports
First Quarter Results
Columbus, Ohio (April 25, 2013) - M/I Homes, Inc. (NYSE:MHO) announced results for the first quarter ended March 31, 2013.
2013 First Quarter Results:
• | Net income of $4.6 million |
• | Diluted earnings per share of $0.11 |
• | New contracts increased 37% |
• | Homes delivered increased 24% |
• | Backlog units and value increased 48% and 60%, respectively |
• | Cash balance of $273 million |
• | Net debt to net capital ratio of 38% |
For the first quarter, the Company reported net income of $4.6 million and net income to common shareholders of $2.4 million, or $0.11 per diluted share, compared to a net loss of $3.2 million, or $0.17 per share during the first quarter of 2012. The current quarter net income to common shareholders consists primarily of pre-tax income of $5.8 million (exclusive of $0.9 million of impairment charges), partially offset by a $2.2 million non-cash fair value equity adjustment related to the previously announced redemption of 2,000 of our outstanding preferred shares which was completed on April 10, 2013.
New contracts for the first quarter were 1,047 - a 37% increase over the 764 recorded in 2012's first quarter. Homes delivered in the first quarter were 627, an increase of 24% from the 507 reported for the same period of 2012. Backlog of homes at March 31, 2013 had a sales value of $401 million, with an average sales price of $290,000 and backlog units of 1,385. At March 31, 2012 backlog sales value was $251 million, with an average sales price of $269,000 and backlog units of 933. M/I Homes had 135 active communities at March 31, 2013 compared to 122 at March 31, 2012 and 131 at December 31, 2012. The Company's cancellation rate was 15% in the first quarter of 2013 compared to 14% in 2012's first quarter.
Robert H. Schottenstein, Chief Executive Officer and President, commented, “We are very pleased with our first quarter results - achieving our fourth consecutive quarter of net income and fourth consecutive quarter of at least 30% improvement in our new contracts. In addition, we ended the quarter with a strong backlog value of $401 million, representing a 60% improvement over last year. Our gross margin of 20.1% and our selling, general and administrative expense leverage of 15.3% both improved by over 200 basis points from last year's first quarter and our operating margin of 4.8% is the highest level we have achieved since 2006.”
Mr. Schottenstein continued, “Our financial condition remains strong. With the combination of improved operating conditions, our profitability and our plans for new community openings and future growth, we took important steps during the quarter to further strengthen our balance sheet by issuing $86 million of convertible debt and raising $55
million of equity while also announcing the redemption of half of our preferred stock. We ended the quarter with $273 million of cash, had no outstanding borrowings under our $140 million credit facility, and a 38% net debt to net capital ratio. With housing conditions continuing to improve, we are optimistic about our business and look for continued growth.”
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 2014.
M/I Homes, Inc. is one of the nation's leading builders of single-family homes, having delivered over 83,500 homes. The Company's homes are marketed and sold under the trade names M/I Homes, Showcase 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 forward-looking 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, 2012, 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 adjusted EBITDA, a non-GAAP financial measure. For this measure, we have provided reconciliation to the most comparable GAAP measures along with an explanation of the usefulness of the non-GAAP measure. Please see the “Non-GAAP Financial Results / Reconciliation” table below.
Contact M/I Homes, Inc.
Phillip G. Creek, Executive Vice President, Chief Financial Officer, (614) 418-8011
Ann Marie W. Hunker, Vice President, Controller, (614) 418-8225
Kevin C. Hake, Senior Vice President, Treasurer (614) 418-8227
M/I Homes, Inc. and Subsidiaries
Summary Operating Results (Unaudited)
(Dollars in thousands, except per share amounts)
Three Months Ended | |||||||
March 31, | |||||||
2013 | 2012 | ||||||
New contracts | 1,047 | 764 | |||||
Average community count | 133 | 122 | |||||
Cancellation rate | 15 | % | 14 | % | |||
Backlog units | 1,385 | 933 | |||||
Backlog value | $ | 401,186 | $ | 251,379 | |||
Homes delivered | 627 | 507 | |||||
Average home closing price | $ | 284 | $ | 249 | |||
Homebuilding revenue: | |||||||
Housing revenue | $ | 177,790 | $ | 126,078 | |||
Land revenue | 4,527 | 731 | |||||
Total homebuilding revenue | $ | 182,317 | $ | 126,809 | |||
Financial services revenue | 8,410 | 4,316 | |||||
Total revenue | $ | 190,727 | $ | 131,125 | |||
Cost of sales - operations | 151,513 | 107,330 | |||||
Cost of sales - impairment | 900 | 95 | |||||
Gross margin | 38,314 | 23,700 | |||||
General and administrative expense | 15,979 | 12,457 | |||||
Selling expense | 13,109 | 11,011 | |||||
Operating income | 9,226 | 232 | |||||
Interest expense | 4,340 | 4,606 | |||||
Income (loss) before income taxes | 4,886 | (4,374 | ) | ||||
Expense (benefit) from income taxes | 299 | (1,188 | ) | ||||
Net income (loss) | $ | 4,587 | $ | (3,186 | ) | ||
Excess of fair value over book value of preferred stock subject to redemption | $ | 2,190 | $ | — | |||
Net income (loss) to common shareholders | $ | 2,397 | $ | (3,186 | ) | ||
Earnings (loss) per share: | |||||||
Basic | $ | 0.11 | $ | (0.17 | ) | ||
Diluted | $ | 0.11 | $ | (0.17 | ) | ||
Weighted average shares outstanding: | |||||||
Basic | 22,273 | 18,772 | |||||
Diluted | 22,688 | 18,772 | |||||
M/I Homes, Inc. and Subsidiaries
Summary Balance Sheet and Other Information (unaudited)
(Dollars in thousands, except per share amounts)
As of | |||||||
March 31, | |||||||
2013 | 2012 | ||||||
Assets: | |||||||
Total cash and cash equivalents(1) | $ | 272,551 | $ | 80,711 | |||
Mortgage loans held for sale | 57,721 | 45,345 | |||||
Inventory: | |||||||
Lots, land and land development | 255,934 | 254,609 | |||||
Land held for sale | 8,591 | 3,243 | |||||
Homes under construction | 245,074 | 185,242 | |||||
Other inventory | 68,041 | 46,964 | |||||
Total inventory | $ | 577,640 | $ | 490,058 | |||
Property and equipment - net | 9,994 | 13,531 | |||||
Investments in unconsolidated joint ventures | 22,275 | 10,716 | |||||
Other assets(2) | 28,471 | 17,372 | |||||
Total Assets | $ | 968,652 | $ | 657,733 | |||
Liabilities: | |||||||
Debt - Homebuilding Operations: | |||||||
Senior notes | $ | 227,770 | $ | 239,118 | |||
Convertible senior subordinated notes due 2017 | 57,500 | — | |||||
Convertible senior subordinated notes due 2018 | 86,250 | — | |||||
Preferred stock - subject to redemption | 50,352 | — | |||||
Notes payable - other | 10,316 | 5,881 | |||||
Total Debt - Homebuilding Operations | $ | 432,188 | $ | 244,999 | |||
Note payable bank - financial services operations | 53,126 | 41,580 | |||||
Total Debt | $ | 485,314 | $ | 286,579 | |||
Accounts payable | 57,071 | 41,068 | |||||
Other liabilities | 81,266 | 59,071 | |||||
Total Liabilities | $ | 623,651 | $ | 386,718 | |||
Shareholders' Equity | 345,001 | 271,015 | |||||
Total Liabilities and Shareholders' Equity | $ | 968,652 | $ | 657,733 | |||
Book value per common share | $ | 12.20 | $ | 9.10 | |||
Net debt/net capital ratio(3) | 38 | % | 43 | % | |||
(1) | 2013 and 2012 amounts include $9.5 million and $13.7 million of restricted cash and cash held in escrow, respectively. |
(2) | 2013 and 2012 amounts include gross deferred tax assets of $134.0 million and $142.0 million, respectively, net of valuation allowances of $134.0 million and $142.0 million, respectively. |
(3) | Net debt/net capital ratio is calculated as total debt minus total cash and cash equivalents, divided by the sum of total debt minus total cash and cash equivalents plus shareholders' equity. |
M/I Homes, Inc. and Subsidiaries
Selected Supplemental Financial and Operating Data
(Dollars in thousands)
Three Months Ended | |||||||
March 31, | |||||||
2013 | 2012 | ||||||
Adjusted EBITDA(1) | $ | 15,963 | $ | 4,929 | |||
Cash flow provided by (used in) operating activities | $ | 8,558 | $ | (7,675 | ) | ||
Cash (used in) provided by investing activities | $ | (12,702 | ) | $ | 27,332 | ||
Cash provided by (used in) financing activities | $ | 121,703 | $ | (12,472 | ) | ||
Land/lot purchases | $ | 44,381 | $ | 30,452 | |||
Land development spending | $ | 15,728 | $ | 9,312 | |||
Land/lot sale proceeds | $ | 4,527 | $ | 731 | |||
Financial services pre-tax income | $ | 5,136 | $ | 2,068 | |||
Deferred tax valuation (benefit) expense | $ | (1,788 | ) | $ | 1,140 | ||
(1) | See "Non-GAAP Financial Results / Reconciliation" table below. |
Impairment and Abandonments by Region
(Dollars in thousands)
Three Months Ended | |||||||
March 31, | |||||||
Impairment by Region: | 2013 | 2012 | |||||
Midwest | $ | 900 | $ | 95 | |||
Southern | — | — | |||||
Mid-Atlantic | — | — | |||||
Total | $ | 900 | $ | 95 | |||
Abandonments by Region: | |||||||
Midwest | $ | — | $ | 2 | |||
Southern | — | 7 | |||||
Mid-Atlantic | — | 22 | |||||
Total | $ | — | $ | 31 | |||
M/I Homes, Inc. and Subsidiaries
Non-GAAP Financial Results / Reconciliations
(Dollars in thousands)
Three Months Ended | |||||||
March 31, | |||||||
2013 | 2012 | ||||||
Net income (loss) | $ | 4,587 | $ | (3,186 | ) | ||
Add: | |||||||
Income tax expense (benefit) | 299 | (1,188 | ) | ||||
Interest expense net of interest income | 4,055 | 4,237 | |||||
Interest amortized to cost of sales | 3,465 | 2,564 | |||||
Depreciation and amortization | 2,138 | 1,942 | |||||
Non-cash charges | 1,419 | 560 | |||||
Adjusted EBITDA | $ | 15,963 | $ | 4,929 | |||
M/I Homes, Inc. and Subsidiaries
Selected Supplemental Financial and Operating Data
NEW CONTRACTS | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
% | ||||||||
Region | 2013 | 2012 | Change | |||||
Midwest | 349 | 340 | 3 | % | ||||
Southern | 378 | 214 | 77 | % | ||||
Mid-Atlantic | 320 | 210 | 52 | % | ||||
Total | 1,047 | 764 | 37 | % | ||||
HOMES DELIVERED | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
% | ||||||||
Region | 2013 | 2012 | Change | |||||
Midwest | 232 | 233 | — | % | ||||
Southern | 191 | 133 | 44 | % | ||||
Mid-Atlantic | 204 | 141 | 45 | % | ||||
Total | 627 | 507 | 24 | % | ||||
BACKLOG | |||||||||||||||||||||
March 31, 2013 | March 31, 2012 | ||||||||||||||||||||
Dollars | Average | Dollars | Average | ||||||||||||||||||
Region | Units | (millions) | Sales Price | Units | (millions) | Sales Price | |||||||||||||||
Midwest | 535 | $ | 144 | $ | 270,000 | 494 | $ | 127 | $ | 257,000 | |||||||||||
Southern | 528 | $ | 148 | $ | 280,000 | 245 | $ | 59 | $ | 242,000 | |||||||||||
Mid-Atlantic | 322 | $ | 109 | $ | 339,000 | 194 | $ | 65 | $ | 336,000 | |||||||||||
Total | 1,385 | $ | 401 | $ | 290,000 | 933 | $ | 251 | $ | 269,000 | |||||||||||
LAND POSITION SUMMARY | ||||||||||||||
March 31, 2013 | March 31, 2012 | |||||||||||||
Lots | Lots Under | Lots | Lots Under | |||||||||||
Region | Owned | Contract | Total | Owned | Contract | Total | ||||||||
Midwest | 3,078 | 2,989 | 6,067 | 3,490 | 1,071 | 4,561 | ||||||||
Southern | 2,693 | 3,800 | 6,493 | 1,402 | 995 | 2,397 | ||||||||
Mid-Atlantic | 1,685 | 2,124 | 3,809 | 2,031 | 1,395 | 3,426 | ||||||||
Total | 7,456 | 8,913 | 16,369 | 6,923 | 3,461 | 10,384 | ||||||||