Attached files
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| 8-K - 8-K - M/I HOMES, INC. | a8k4thqtr-yearendearnings0.htm |
Exhibit 99.1
M/I Homes Reports
Fourth Quarter and Year-End Results
Columbus, Ohio (January 29, 2014) - M/I Homes, Inc. (NYSE:MHO) announced results for its fourth quarter and year ended December 31, 2013.
2013 Fourth-Quarter Results:
• | Pre-tax income of $15.3 million, up 184% from 2012’s fourth quarter |
• | New contracts increased 18% |
• | Homes delivered increased 26% |
• | Backlog sales value increased 44% |
• | Cash balance of $142.6 million at year-end |
• | Net debt to net capital ratio of 39% |
2013 Full-Year Results:
• | Pre-tax income of $41.3 million, an increase of 224% from 2012 |
• | Net income of $151.4 million, including a $112.8 million deferred tax |
asset valuation allowance reversal
• | Diluted earnings per share of $5.24 ($1.32 per share excluding the |
deferred tax asset valuation allowance reversal)
• | New contracts increased 25% |
• | Homes delivered increased 26% |
• | Control 19,831 lots, an increase of 40% from December 31, 2012 |
For the fourth quarter of 2013, the Company reported net income of $14.3 million, or $0.48 per diluted share. This compares to net income of $5.0 million for the fourth quarter of 2012, or $0.23 per diluted share. Net income for the fourth quarter of 2013 includes $1.6 million of pre-tax asset impairment charges and a $1.2 million non-operating benefit from the reversal of a portion of our state deferred tax asset valuation allowance. Net income for the fourth quarter of 2012 also included $1.6 million of pre-tax asset impairment charges. For the year ended December 31, 2013, the Company reported net income of $38.6 million (excluding a non-operating benefit of $112.8 million from the reversal of a majority of our deferred tax asset valuation allowance) or $1.32 per diluted share, compared to $13.3 million, or $0.67 per diluted share for the year ended December 31, 2012.
New contracts for 2013's fourth quarter were 793 - increasing 18% from 2012's fourth quarter of 673. For 2013, new contracts increased 25% from 3,020 in 2012 to 3,787 in 2013. M/I Homes had 157 active communities at December 31, 2013 compared to 131 a year ago - a 20% increase. The Company's cancellation rate was 19% in the fourth quarter of 2013, compared to 21% in 2012's fourth quarter. Homes delivered of 1,120 in 2013's fourth quarter were 26% higher than 2012’s 887 homes delivered. Homes delivered for the twelve months ended December 31, 2013 reached their highest level in seven years, increasing 26% to 3,472 from 2012’s deliveries of 2,765. The backlog of homes at December 31, 2013 had a total sales value of $408 million, a 44% increase over a year-ago, with backlog units of 1,280 and an
average sales price of $319,000. At December 31, 2012, backlog total sales value was $283 million, with backlog units of 965 and an average sales price of $293,000.
Robert H. Schottenstein, Chief Executive Officer and President, commented, “2013 was a very good year for M/I Homes, with pre-tax income increasing over 200%, revenue growing by 36% and new contracts, homes delivered, backlog units, and backlog sales value each improving by over 25% from 2012. While our results were aided by improving housing market conditions, they also reflect our success in strategically shifting and diversifying our geographic footprint. In 2013, we also gained market share in nearly all of our markets as we opened 65 new communities and increased our community count by 20% from a year-ago. With our fourth quarter new contracts up 18%, we ended 2013 with 315 more units in backlog and a 44% increase in backlog sales value than in 2012.”
Mr. Schottenstein continued, “We begin 2014 with a strong backlog, a strong balance sheet, and a solid land position - controlling 40% more lots than we did a year ago. We ended 2013 with cash of $143 million, shareholders’ equity of $493 million, no borrowings under our $200 million credit facility, and a net debt to net capital ratio of 39%. We remain optimistic about our business and will continue to focus on increasing our profitability and growing our market share.”
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 January 2015.
M/I Homes, Inc. is one of the nation's leading builders of single-family homes, having delivered over 86,700 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, Dallas/Ft 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 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. 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 | Twelve Months Ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
New contracts | 793 | 673 | 3,787 | 3,020 | |||||||||||
Average community count | 152 | 130 | 142 | 125 | |||||||||||
Cancellation rate | 19 | % | 21 | % | 16 | % | 17 | % | |||||||
Backlog units | 1,280 | 965 | |||||||||||||
Backlog value | $ | 408,017 | $ | 282,540 | |||||||||||
Homes delivered | 1,120 | 887 | 3,472 | 2,765 | |||||||||||
Average home closing price | $ | 292 | $ | 273 | $ | 286 | $ | 264 | |||||||
Homebuilding revenue: | |||||||||||||||
Housing revenue | $ | 326,702 | $ | 242,373 | $ | 992,078 | $ | 728,772 | |||||||
Land revenue | 3,409 | 905 | 16,165 | 9,877 | |||||||||||
Total homebuilding revenue | $ | 330,111 | $ | 243,278 | $ | 1,008,243 | $ | 738,649 | |||||||
Financial services revenue | 6,196 | 7,633 | 28,539 | 23,256 | |||||||||||
Total revenue | $ | 336,307 | $ | 250,911 | $ | 1,036,782 | $ | 761,905 | |||||||
Cost of sales - operations | 267,709 | 201,647 | 824,508 | 613,540 | |||||||||||
Cost of sales - impairment | 1,568 | 1,626 | 5,805 | 3,502 | |||||||||||
Cost of sales - other | — | — | — | (3,000 | ) | ||||||||||
Gross margin | 67,030 | 47,638 | 206,469 | 147,863 | |||||||||||
General and administrative expense | 27,105 | 20,328 | 79,494 | 62,627 | |||||||||||
Selling expense | 20,899 | 17,923 | 68,282 | 56,406 | |||||||||||
Operating income | 19,026 | 9,387 | 58,693 | 28,830 | |||||||||||
Income from unconsolidated joint ventures | (28 | ) | — | (306 | ) | — | |||||||||
Interest expense | 3,752 | 4,005 | 15,938 | 16,071 | |||||||||||
Loss on early extinguishment of debt | — | — | 1,726 | — | |||||||||||
Income before income taxes | 15,302 | 5,382 | 41,335 | 12,759 | |||||||||||
(Benefit) provision for income taxes | 1,041 | 367 | (110,088 | ) | (588 | ) | |||||||||
Net income | $ | 14,261 | $ | 5,015 | $ | 151,423 | $ | 13,347 | |||||||
Excess of fair value over book value of | |||||||||||||||
preferred shares redeemed | — | — | 2,190 | — | |||||||||||
Preferred dividends | 1,218 | — | 3,656 | — | |||||||||||
Net income to commons shareholders | $ | 13,043 | $ | 5,015 | $ | 145,577 | $ | 13,347 | |||||||
Earnings per share: | |||||||||||||||
Basic | $ | 0.54 | $ | 0.23 | $ | 6.11 | $ | 0.68 | |||||||
Diluted | $ | 0.48 | $ | 0.23 | $ | 5.24 | $ | 0.67 | |||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 24,358 | 21,545 | 23,822 | 19,651 | |||||||||||
Diluted | 29,783 | 21,961 | 28,763 | 19,891 | |||||||||||
M/I Homes, Inc. and Subsidiaries
Summary Balance Sheet and Other Information (unaudited)
(Dollars in thousands, except per share amounts)
As of | |||||||
December 31, | |||||||
2013 | 2012 | ||||||
Assets: | |||||||
Total cash and cash equivalents(1) | $ | 142,627 | $ | 154,178 | |||
Mortgage loans held for sale | 81,810 | 71,121 | |||||
Inventory: | |||||||
Lots, land and land development | 323,673 | 257,397 | |||||
Land held for sale | 8,059 | 8,442 | |||||
Homes under construction | 305,499 | 221,432 | |||||
Other inventory | 53,703 | 69,546 | |||||
Total Inventory | $ | 690,934 | $ | 556,817 | |||
Property and equipment - net | 10,536 | 10,439 | |||||
Investments in unconsolidated joint ventures | 35,266 | 11,732 | |||||
Deferred income taxes, net of valuation allowance(2) | 110,911 | — | |||||
Other assets | 38,092 | 27,013 | |||||
Total Assets | $ | 1,110,176 | $ | 831,300 | |||
Liabilities: | |||||||
Debt - Homebuilding Operations: | |||||||
Senior notes | $ | 228,070 | $ | 227,670 | |||
Convertible senior subordinated notes due 2017 | 57,500 | 57,500 | |||||
Convertible senior subordinated notes due 2018 | 86,250 | — | |||||
Notes payable - other | 7,790 | 11,105 | |||||
Total Debt - Homebuilding Operations | $ | 379,610 | $ | 296,275 | |||
Note payable bank - financial services operations | 80,029 | 67,957 | |||||
Total Debt | $ | 459,639 | $ | 364,232 | |||
Accounts payable | 70,226 | 47,690 | |||||
Other liabilities | 87,508 | 83,950 | |||||
Total Liabilities | $ | 617,373 | $ | 495,872 | |||
Shareholders' Equity | 492,803 | 335,428 | |||||
Total Liabilities and Shareholders' Equity | $ | 1,110,176 | $ | 831,300 | |||
Book value per common share | $ | 18.18 | $ | 10.86 | |||
Net debt/net capital ratio(3) | 39 | % | 39 | % | |||
(1) | 2013 and 2012 amounts include $13.9 million and $8.7 million of restricted cash and cash held in escrow, respectively. |
(2) | 2013 and 2012 amounts include gross deferred tax assets of $120.2 million and $135.7 million, respectively, net of valuation allowances of $9.3 million and $135.7 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 | Twelve Months Ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Adjusted EBITDA(1) | $ | 26,537 | $ | 18,215 | $ | 89,204 | $ | 55,966 | |||||||
Cash used in operating activities | $ | (33,538 | ) | $ | (30,674 | ) | $ | (73,974 | ) | $ | (46,995 | ) | |||
Cash provided by (used in) investing activities | $ | (2,652 | ) | $ | (555 | ) | $ | (35,554 | ) | $ | 25,322 | ||||
Cash provided by financing activities | $ | 22,440 | $ | 16,962 | $ | 92,755 | $ | 107,378 | |||||||
Land/lot purchases | $ | 60,138 | $ | 58,083 | $ | 216,841 | $ | 138,735 | |||||||
Land development spending | $ | 39,306 | $ | 19,229 | $ | 106,762 | $ | 56,389 | |||||||
Financial services pre-tax income | $ | 1,980 | $ | 3,503 | $ | 14,416 | $ | 11,015 | |||||||
Deferred tax expense | $ | 6,357 | $ | 1,355 | $ | 15,547 | $ | 5,076 | |||||||
Deferred tax asset valuation benefit | $ | (5,622 | ) | $ | (1,355 | ) | $ | (126,458 | ) | $ | (5,076 | ) | |||
(1) | See “Non-GAAP Financial Results / Reconciliations” table below. |
Impairment and Abandonments by Region
(Dollars in thousands)
Three Months Ended | Twelve Months Ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
Impairment by Region: | 2013 | 2012 | 2013 | 2012 | |||||||||||
Midwest | $ | 1,568 | $ | 1,626 | $ | 5,805 | $ | 3,502 | |||||||
Southern | — | — | — | — | |||||||||||
Mid-Atlantic | — | — | — | — | |||||||||||
Total | $ | 1,568 | $ | 1,626 | $ | 5,805 | $ | 3,502 | |||||||
Abandonments by Region: | |||||||||||||||
Midwest | $ | — | $ | — | $ | — | $ | 36 | |||||||
Southern | — | — | — | 110 | |||||||||||
Mid-Atlantic | — | — | — | 110 | |||||||||||
Total | $ | — | $ | — | $ | — | $ | 256 | |||||||
M/I Homes, Inc. and Subsidiaries
Non-GAAP Financial Results / Reconciliations
(Dollars in thousands)
Three Months Ended | Twelve Months Ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Net income | $ | 14,261 | $ | 5,015 | $ | 151,423 | $ | 13,347 | |||||||
Add: | |||||||||||||||
(Benefit) provision for income taxes | 1,041 | 367 | (110,088 | ) | (588 | ) | |||||||||
Interest expense, net of interest income | 3,299 | 3,655 | 14,508 | 14,607 | |||||||||||
Interest amortized to cost of sales | 3,880 | 4,236 | 15,175 | 13,366 | |||||||||||
Depreciation and amortization | 1,979 | 2,980 | 8,311 | 9,742 | |||||||||||
Non-cash charges | 2,077 | 1,962 | 9,875 | 5,492 | |||||||||||
Adjusted EBITDA | $ | 26,537 | $ | 18,215 | $ | 89,204 | $ | 55,966 | |||||||
M/I Homes, Inc. and Subsidiaries
Selected Supplemental Financial and Operating Data
NEW CONTRACTS | |||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
% | % | ||||||||||||||||
Region | 2013 | 2012 | Change | 2013 | 2012 | Change | |||||||||||
Midwest | 302 | 231 | 31 | % | 1,364 | 1,144 | 19 | % | |||||||||
Southern | 247 | 259 | (5 | )% | 1,290 | 966 | 34 | % | |||||||||
Mid-Atlantic | 244 | 183 | 33 | % | 1,133 | 910 | 25 | % | |||||||||
Total | 793 | 673 | 18 | % | 3,787 | 3,020 | 25 | % | |||||||||
HOMES DELIVERED | |||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
% | % | ||||||||||||||||
Region | 2013 | 2012 | Change | 2013 | 2012 | Change | |||||||||||
Midwest | 400 | 318 | 26 | % | 1,237 | 1,113 | 11 | % | |||||||||
Southern | 388 | 280 | 39 | % | 1,182 | 823 | 44 | % | |||||||||
Mid-Atlantic | 332 | 289 | 15 | % | 1,053 | 829 | 27 | % | |||||||||
Total | 1,120 | 887 | 26 | % | 3,472 | 2,765 | 26 | % | |||||||||
BACKLOG | |||||||||||||||||||||
December 31, 2013 | December 31, 2012 | ||||||||||||||||||||
Dollars | Average | Dollars | Average | ||||||||||||||||||
Region | Units | (millions) | Sales Price | Units | (millions) | Sales Price | |||||||||||||||
Midwest | 545 | $ | 170 | $ | 311,000 | 418 | $ | 113 | $ | 270,000 | |||||||||||
Southern | 449 | $ | 138 | $ | 307,000 | 341 | $ | 96 | $ | 280,000 | |||||||||||
Mid-Atlantic | 286 | $ | 100 | $ | 351,000 | 206 | $ | 74 | $ | 360,000 | |||||||||||
Total | 1,280 | $ | 408 | $ | 319,000 | 965 | $ | 283 | $ | 293,000 | |||||||||||
LAND POSITION SUMMARY | ||||||||||||||
December 31, 2013 | December 31, 2012 | |||||||||||||
Lots | Lots Under | Lots | Lots Under | |||||||||||
Region | Owned | Contract | Total | Owned | Contract | Total | ||||||||
Midwest | 3,731 | 2,366 | 6,097 | 3,384 | 1,629 | 5,013 | ||||||||
Southern | 4,337 | 4,601 | 8,938 | 2,160 | 2,827 | 4,987 | ||||||||
Mid-Atlantic | 2,031 | 2,765 | 4,796 | 1,874 | 2,329 | 4,203 | ||||||||
Total | 10,099 | 9,732 | 19,831 | 7,418 | 6,785 | 14,203 | ||||||||