EX-99.1 2 mho-20150331xexh991.htm EXHIBIT 99.1 PRESS RELEASE MHO-2015.03.31-Exh 99.1


Exhibit 99.1



M/I Homes Reports
First Quarter Results


Columbus, Ohio (April 23, 2015) - M/I Homes, Inc. (NYSE:MHO) announced results for the first quarter ended March 31, 2015.

2015 First Quarter Highlights:
•
Pre-tax income of $15.7 million - a 26% increase over 2014’s first quarter
•
Revenue increased 12% to $263 million; average closing price increased 9%
•
Gross margin of 21.7%, up 170 basis points from 2014’s fourth quarter
•
Net income of $9.6 million ($0.31 per diluted share)
•
New contracts increased 13%; homes delivered declined 3%
•
Backlog sales value increased 16%
•
Net debt to net capital ratio of 48%

For the first quarter of 2015, the Company reported net income of $9.6 million, or $0.31 per diluted share. This compares to $7.3 million or $0.23 per diluted share during the first quarter of 2014, excluding a $5.3 million benefit in 2014 for the reversal of a portion of our state deferred tax asset valuation allowance.

New contracts for the first quarter were 1,108, a 13% increase from the 982 recorded in 2014's first quarter. Homes delivered in the first quarter were 717, a decrease of 3% from the 737 reported for the same period of 2014. The backlog of homes at March 31, 2015 had a total sales value of $577 million, a 16% increase over a year-ago, with backlog units of 1,613 and an average sales price of $358,000. At March 31, 2014 backlog sales value was $496 million, with backlog units of 1,525 and an average sales price of $326,000. M/I Homes had 153 active communities at March 31, 2015 compared to 158 at March 31, 2014 and 150 at December 31, 2014. The Company's cancellation rate was 13% in the first quarter of 2015 compared to 16% in 2014's first quarter.

Robert H. Schottenstein, Chief Executive Officer and President, commented, “We are pleased with our first quarter results highlighted by a 26% increase in pre-tax income, a 16% increase in backlog sales value and a 13% increase in new contracts. A number of factors contributed to our improved profitability including a 12% increase in revenue, gross margin of 21.7% (170 basis points better than 2014's fourth quarter), and a 50 basis point improvement in our overhead expense ratio compared to last year’s first quarter. From a sales standpoint, we were particularly pleased to increase our new contracts by 13% given that our community count was slightly lower than a year ago. We are on track to open approximately 70 new communities this year and to increase our year end community count by 15%.”

Mr. Schottenstein continued, “Our financial condition is strong, with shareholders’ equity of $554 million and net debt to net capital of 48%. Looking ahead, with the strength of our backlog and planned new community openings, we are poised to have a very solid 2015. We remain focused on increasing profitability, growing our market share, and investing in attractive land opportunities.”





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 2016.

M/I Homes, Inc. is one of the nation’s leading builders of single-family homes, having delivered over 91,100 homes. The Company’s homes are marketed and sold under the trade names M/I Homes and Showcase Collection (exclusively by M/I Homes). The Company has homebuilding operations in Columbus and Cincinnati, Ohio; Indianapolis, Indiana; Chicago, Illinois; Tampa and Orlando, Florida; Austin, Dallas/Fort 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 any 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 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, 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 herein will increase with the passage of time. We undertake 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.

Contact M/I Homes, Inc.
Kevin C. Hake, Senior Vice President, Treasurer, (614) 418-8227
Ann Marie W. Hunker, Vice President, Controller, (614) 418-8225









M/I Homes, Inc. and Subsidiaries
Summary Statement of Income (Unaudited)
(Dollars in thousands, except per share amounts)

 
Three Months Ended
 
March 31,
 
2015
 
2014
New contracts
1,108

 
982

Average community count
152

 
158

Cancellation rate
13
%
 
16
%
Backlog units
1,613

 
1,525

Backlog value
$
576,753

 
$
496,428

Homes delivered
717

 
737

Average home closing price
$
325

 
$
299

 
 
 
 
Homebuilding revenue:
 
 
 
   Housing revenue
$
233,000

 
$
220,710

   Land revenue
22,061

 
6,266

Total homebuilding revenue
$
255,061

 
$
226,976

 
 
 
 
Financial services revenue
8,098

 
7,865

Total revenue
$
263,159

 
$
234,841

 
 
 
 
Cost of sales - operations
206,183

 
183,964

Gross margin
56,976

 
50,877

General and administrative expense
19,334

 
18,315

Selling expense
17,686

 
15,969

Operating income
19,956

 
16,593

Equity in income of unconsolidated joint ventures
(198
)
 
(62
)
Interest expense
4,462

 
4,170

Income before income taxes
15,692

 
12,485

Provision (benefit) for income taxes
6,124

 
(147
)
Net income
$
9,568

 
$
12,632

Preferred dividends
$
1,219

 
$
1,219

Net income to common shareholders
$
8,349

 
$
11,413

 
 
 
 
Earnings per share:
 
 
 
Basic
$
0.34

 
$
0.47

Diluted
$
0.31

 
$
0.41

 
 
 
 
Weighted average shares outstanding:
 
 
 
Basic
24,514

 
24,417

Diluted
29,975

 
29,870





M/I Homes, Inc. and Subsidiaries
Summary Balance Sheet and Other Information (unaudited)
(Dollars in thousands, except per share amounts)

 
As of
 
March 31,
 
2015
 
2014
Assets:
 
 
 
Total cash and cash equivalents(1)
$
36,098

 
$
100,911

Mortgage loans held for sale
79,180

 
55,750

Inventory:
 
 
 
Lots, land and land development
470,317

 
337,137

Land held for sale
4,374

 
3,623

Homes under construction
403,965

 
325,439

Other inventory
80,414

 
57,428

Total Inventory
$
959,070

 
$
723,627

 
 
 
 
Property and equipment - net
11,081

 
10,506

Investments in unconsolidated joint ventures
29,449

 
44,847

Deferred income taxes, net of valuation allowance
88,748

 
111,214

Other assets
47,138

 
38,048

Total Assets
$
1,250,764

 
$
1,084,903

 
 
 
 
Liabilities:
 
 
 
Debt - Homebuilding Operations:
 
 
 
Senior notes
$
228,569

 
$
228,169

Convertible senior subordinated notes due 2017
57,500

 
57,500

 Convertible senior subordinated notes due 2018
86,250

 
86,250

 Notes payable bank - homebuilding
90,000

 
—

Notes payable - other
8,876

 
7,757

Total Debt - Homebuilding Operations
$
471,195

 
$
379,676

 
 
 
 
Notes payable bank - financial services operations
71,723

 
51,532

Total Debt
$
542,918

 
$
431,208

 
 
 
 
Accounts payable
69,452

 
71,376

Other liabilities
84,781

 
75,728

Total Liabilities
$
697,151

 
$
578,312

 
 
 
 
Shareholders' Equity
553,613

 
506,591

Total Liabilities and Shareholders' Equity
$
1,250,764

 
$
1,084,903

 
 
 
 
Book value per common share
$
20.54

 
$
18.66

Net debt/net capital ratio(2)
48
%
 
39
%
(1)
2015 and 2014 amounts include $6.1 million and $11.6 million of restricted cash and cash held in escrow, respectively.
(2)
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,
 
2015
 
2014
Adjusted EBITDA(1)
$
26,769

 
$
22,176

 
 
 
 
Cash flow used in operating activities
$
(29,276
)
 
$
(2,103
)
Cash used in investing activities
$
(845
)
 
$
(8,879
)
Cash provided by (used in) financing activities
$
44,544

 
$
(28,383
)
 
 
 
 
Land/lot purchases
$
51,200

 
$
53,003

Land development spending
$
37,681

 
$
17,530

Land gross margin
$
5,241

 
$
1,321

 
 
 
 
Financial services pre-tax income
$
4,993

 
$
4,711

(1)
See "Non-GAAP Financial Results / Reconciliation" table below.


M/I Homes, Inc. and Subsidiaries
Non-GAAP Financial Results / Reconciliation
(Dollars in thousands)
 
Three Months Ended
 
March 31,
 
2015
 
2014
Net income
$
9,568

 
$
12,632

Add:
 
 
 
Provision (benefit) for income taxes
6,124

 
(147
)
Interest expense net of interest income
4,103

 
3,777

Interest amortized to cost of sales
3,539

 
3,108

Depreciation and amortization
2,306

 
1,912

Non-cash charges
1,129

 
894

Adjusted EBITDA
$
26,769

 
$
22,176








M/I Homes, Inc. and Subsidiaries
Selected Supplemental Financial and Operating Data

NEW CONTRACTS
 
Three Months Ended
 
March 31,
 
 
 
 
 
%
Region
2015
 
2014
 
Change
Midwest
420

 
374

 
12
%
Southern
414

 
336

 
23
%
Mid-Atlantic
274

 
272

 
1
%
Total
1,108

 
982

 
13
%

HOMES DELIVERED
 
Three Months Ended
 
March 31,
 
 
 
 
 
%
Region
2015
 
2014
 
Change
Midwest
248

 
259

 
(4
)%
Southern
275

 
275

 
—
 %
Mid-Atlantic
194

 
203

 
(4
)%
Total
717

 
737

 
(3
)%

BACKLOG
 
March 31, 2015
 
March 31, 2014
 
 
 
Dollars
 
Average
 
 
 
Dollars
 
Average
Region
Units
 
(millions)
 
Sales Price
 
Units
 
(millions)
 
Sales Price
Midwest
677

 
$
242

 
$
357,000

 
660

 
$
209

 
$
317,000

Southern
589

 
$
211

 
$
358,000

 
510

 
$
169

 
$
331,000

Mid-Atlantic
347

 
$
124

 
$
358,000

 
355

 
$
118

 
$
334,000

Total
1,613

 
$
577

 
$
358,000

 
1,525

 
$
496

 
$
326,000


LAND POSITION SUMMARY
 
March 31, 2015
 
 
March 31, 2014
 
Lots
Lots Under
 
 
 
Lots
Lots Under
 
Region
Owned
Contract
Total
 
 
Owned
Contract
Total
Midwest
3,386

2,272

5,658

 
 
3,532

2,609

6,141

Southern
4,917

3,845

8,762

 
 
4,823

4,306

9,129

Mid-Atlantic
2,633

2,397

5,030

 
 
2,287

3,408

5,695

Total
10,936

8,514

19,450

 
 
10,642

10,323

20,965