CURRENT REPORT |
PURSUANT TO SECTION 13 OR 15(D) |
OF THE SECURITIES EXCHANGE ACT OF 1934 |
M/I HOMES, INC. | ||||||
(Exact name of registrant as specified in its charter) | ||||||
Ohio | 1-12434 | 31-1210837 | ||||
(State or Other Jurisdiction | (Commission | (I.R.S. Employer | ||||
of Incorporation) | File Number) | Identification No.) |
(614) 418-8000 |
(Telephone Number) |
N/A |
(Former name or former address, if changed since last report) |
Exhibit No. | Description of Documents | |
99.1 | Press release dated February 2, 2017. |
By: | /s/ Ann Marie W. Hunker |
Ann Marie W. Hunker | |
Vice President and Corporate Controller | |
(Principal Accounting Officer) |
Exhibit No. | Description of Documents | |
99.1 | Press release dated February 2, 2017. |
• | Net income of $20.6 million ($0.67 per diluted share), compared to 2015’s |
• | Pre-tax income increased to $33.7 million from $22.9 million in 2015; 2016 |
• | Revenue increased 12% to $523 million |
• | Homes delivered increased 13% |
• | New contracts increased 11% |
• | Backlog sales value increased 20% to $685 million; backlog units up 18% |
• | Pre-tax income of $91.8 million compared to $86.9 million in 2015 |
• | Pre-tax income increased to $111.2 million from $94.8 million in 2015, exclusive |
• | Net income of $56.6 million ($1.84 per diluted share) |
• | Net income, excluding the stucco-related charge in 2016 and debt extinguishment |
• | Record revenue of $1.7 billion, 19% better than 2015 |
• | Record homes delivered of 4,482, 15% better than 2015 |
• | Record new contracts of 4,755, 16% better than 2015 |
• | Average home closing price increased 4% to $359,000 |
Three Months Ended | Twelve Months Ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
New contracts | 999 | 897 | 4,755 | 4,093 | |||||||||||
Average community count | 176 | 171 | 176 | 160 | |||||||||||
Cancellation rate | 18 | % | 18 | % | 14 | % | 15 | % | |||||||
Backlog units | 1,804 | 1,531 | |||||||||||||
Backlog sales value | $ | 685,457 | $ | 569,424 | |||||||||||
Homes delivered | 1,416 | 1,253 | 4,482 | 3,883 | |||||||||||
Average home closing price | $ | 356 | $ | 360 | $ | 359 | $ | 346 | |||||||
Homebuilding revenue: | |||||||||||||||
Housing revenue | $ | 504,795 | $ | 450,461 | $ | 1,610,496 | $ | 1,342,135 | |||||||
Land revenue | 7,004 | 8,795 | 38,820 | 40,285 | |||||||||||
Total homebuilding revenue | $ | 511,799 | $ | 459,256 | $ | 1,649,316 | $ | 1,382,420 | |||||||
Financial services revenue | 11,447 | 9,667 | 42,011 | 35,975 | |||||||||||
Total revenue | $ | 523,246 | $ | 468,923 | $ | 1,691,327 | $ | 1,418,395 | |||||||
Cost of sales - operations | 414,668 | 370,469 | 1,338,774 | 1,114,663 | |||||||||||
Cost of sales - impairment | 3,992 | 3,638 | 3,992 | 3,638 | |||||||||||
Cost of sales - stucco related charges | — | — | 19,409 | — | |||||||||||
Gross margin | 104,586 | 94,816 | 329,152 | 300,094 | |||||||||||
General and administrative expense | 33,351 | 28,518 | 111,600 | 93,208 | |||||||||||
Selling expense | 33,347 | 30,201 | 108,809 | 95,092 | |||||||||||
Operating income | 37,888 | 36,097 | 108,743 | 111,794 | |||||||||||
Equity in income from joint venture arrangements | (227 | ) | (250 | ) | (640 | ) | (498 | ) | |||||||
Interest expense | 4,438 | 5,651 | 17,598 | 17,521 | |||||||||||
Loss on early extinguishment of debt | — | 7,842 | — | 7,842 | |||||||||||
Income before income taxes | 33,677 | 22,854 | 91,785 | 86,929 | |||||||||||
Provision for income taxes | 13,115 | 9,579 | 35,176 | 35,166 | |||||||||||
Net income | $ | 20,562 | $ | 13,275 | $ | 56,609 | $ | 51,763 | |||||||
Preferred dividends | 1,219 | 1,219 | 4,875 | 4,875 | |||||||||||
Net income to common shareholders | $ | 19,343 | $ | 12,056 | $ | 51,734 | $ | 46,888 | |||||||
Earnings per share: | |||||||||||||||
Basic | $ | 0.78 | $ | 0.49 | $ | 2.10 | $ | 1.91 | |||||||
Diluted | $ | 0.67 | $ | 0.43 | $ | 1.84 | $ | 1.68 | |||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 24,671 | 24,649 | 24,666 | 24,575 | |||||||||||
Diluted | 30,166 | 30,107 | 30,116 | 30,047 |
As of | |||||||
December 31, | |||||||
2016 | 2015 | ||||||
Assets: | |||||||
Total cash, cash equivalents and restricted cash | $ | 34,441 | $ | 13,101 | |||
Mortgage loans held for sale | 154,020 | 127,001 | |||||
Inventory: | |||||||
Lots, land and land development | 602,528 | 584,542 | |||||
Land held for sale | 12,155 | 12,630 | |||||
Homes under construction | 494,664 | 420,206 | |||||
Other inventory | 106,587 | 94,664 | |||||
Total Inventory | $ | 1,215,934 | $ | 1,112,042 | |||
Property and equipment - net | 22,299 | 12,897 | |||||
Investments in joint venture arrangements | 28,016 | 36,967 | |||||
Deferred income taxes, net of valuation allowance | 30,875 | 67,404 | |||||
Other assets | 62,926 | 46,142 | |||||
Total Assets | $ | 1,548,511 | $ | 1,415,554 | |||
Liabilities: | |||||||
Debt - Homebuilding Operations: | |||||||
Senior notes due 2021 - net | $ | 295,677 | $ | 294,727 | |||
Convertible senior subordinated notes due 2017 - net | 57,093 | 56,518 | |||||
Convertible senior subordinated notes due 2018 - net | 85,423 | 84,714 | |||||
Notes payable - homebuilding | 40,300 | 43,800 | |||||
Notes payable - other | 6,415 | 8,441 | |||||
Total Debt - Homebuilding Operations | $ | 484,908 | $ | 488,200 | |||
Notes payable bank - financial services operations | 152,895 | 123,648 | |||||
Total Debt | $ | 637,803 | $ | 611,848 | |||
Accounts payable | 103,212 | 86,878 | |||||
Other liabilities | 153,322 | 120,262 | |||||
Total Liabilities | $ | 894,337 | $ | 818,988 | |||
Shareholders' Equity | 654,174 | 596,566 | |||||
Total Liabilities and Shareholders' Equity | $ | 1,548,511 | $ | 1,415,554 | |||
Book value per common share | $ | 24.48 | $ | 22.17 | |||
Homebuilding debt / capital ratio(1) | 43 | % | 45 | % |
(1) | The ratio of homebuilding debt to capital is calculated as the carrying value of our homebuilding debt outstanding divided by the sum of the carrying value of our homebuilding debt outstanding plus shareholders’ equity. |
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Adjusted EBITDA(1) | $ | 51,995 | $ | 43,595 | $ | 148,397 | $ | 140,818 | ||||||||
Cash provided (used in) by operating activities | $ | 7,695 | $ | 13,096 | (2) | $ | 34,197 | $ | (82,365 | ) | (2) | |||||
Cash used in investing activities | $ | (9,966 | ) | $ | (31,817 | ) | (2) | $ | (31,645 | ) | $ | (41,480 | ) | (2) | ||
Cash provided by financing activities | $ | 13,404 | $ | 3,696 | $ | 18,788 | $ | 114,460 | ||||||||
Land/lot purchases | $ | 80,648 | $ | 55,251 | $ | 227,646 | $ | 232,707 | ||||||||
Land development spending | $ | 58,441 | $ | 59,655 | $ | 180,204 | $ | 205,069 | ||||||||
Land sale revenue | $ | 7,004 | $ | 8,795 | $ | 38,820 | $ | 40,285 | ||||||||
Land sale gross profit | $ | 1,039 | $ | 297 | $ | 4,134 | $ | 6,661 | ||||||||
Financial services pre-tax income | $ | 5,014 | $ | 5,129 | $ | 21,150 | $ | 19,416 |
(1) | See “Non-GAAP Financial Results” table below. |
(2) | During 2016, we elected to early-adopt Accounting Standards Update 2016-18, Statement of Cash Flows: Restricted Cash. Certain amounts above have been adjusted to apply the new method retrospectively. |
Three Months Ended | Twelve Months Ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income | $ | 20,562 | $ | 13,275 | $ | 56,609 | $ | 51,763 | |||||||
Add: | |||||||||||||||
Provision for income taxes | 13,115 | 9,579 | 35,176 | 35,166 | |||||||||||
Interest expense, net of interest income | 3,755 | 5,036 | 15,286 | 15,532 | |||||||||||
Interest amortized to cost of sales | 5,275 | 5,329 | 18,413 | 16,966 | |||||||||||
Depreciation and amortization | 3,464 | 2,986 | 13,606 | 10,928 | |||||||||||
Non-cash charges | 5,824 | 7,390 | 9,307 | 10,463 | |||||||||||
Adjusted EBITDA | $ | 51,995 | $ | 43,595 | $ | 148,397 | $ | 140,818 |
Three Months Ended | Twelve months ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Income before income taxes | $ | 33,677 | $ | 22,854 | $ | 91,785 | $ | 86,929 | |||||||
Add: Loss on early extinguishment of debt | — | 7,842 | — | 7,842 | |||||||||||
Add: Stucco-related charges | — | — | 19,409 | — | |||||||||||
Adjusted income before income taxes | $ | 33,677 | $ | 30,696 | $ | 111,194 | $ | 94,771 | |||||||
Net income | $ | 20,562 | $ | 13,275 | $ | 56,609 | $ | 51,763 | |||||||
Add: Loss on early extinguishment of debt - net of tax | — | 4,862 | — | 4,862 | |||||||||||
Add: Stucco-related charges - net of tax | — | — | 12,034 | — | |||||||||||
Adjusted income before income taxes | $ | 20,562 | $ | 18,137 | $ | 68,643 | $ | 56,625 | |||||||
Stucco-related charges - net of tax | $ | — | $ | — | $ | 12,034 | $ | — | |||||||
Loss on early extinguishment of debt - net of tax | — | 4,862 | — | 4,862 | |||||||||||
Divided by: Diluted weighted average shares outstanding | 30,166 | 30,107 | 30,116 | 30,047 | |||||||||||
Diluted earnings per share related to stucco-related charges | $ | — | $ | — | $ | 0.40 | $ | — | |||||||
Diluted earnings per share related to debt extinguishment charges | $ | — | $ | 0.16 | $ | — | $ | 0.16 | |||||||
Add: Diluted earnings per share | 0.67 | 0.43 | 1.84 | 1.68 | |||||||||||
Adjusted diluted earnings per share | $ | 0.67 | $ | 0.59 | $ | 2.24 | $ | 1.84 |
(3) | We believe these non-GAAP financial measures are relevant and useful to investors in understanding our operations, and may be helpful in comparing us with other companies in the homebuilding industry to the extent they provide similar information. These non-GAAP financial measures should be used to supplement our GAAP results in order to provide a greater understanding of the factors and trends affecting our operations. |
NEW CONTRACTS | |||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
% | % | ||||||||||||||||
Region | 2016 | 2015 | Change | 2016 | 2015 | Change | |||||||||||
Midwest | 366 | 327 | 12 | % | 1,775 | 1,485 | 20 | % | |||||||||
Southern | 378 | 337 | 12 | % | 1,822 | 1,557 | 17 | % | |||||||||
Mid-Atlantic | 255 | 233 | 9 | % | 1,158 | 1,051 | 10 | % | |||||||||
Total | 999 | 897 | 11 | % | 4,755 | 4,093 | 16 | % |
HOMES DELIVERED | |||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
% | % | ||||||||||||||||
Region | 2016 | 2015 | Change | 2016 | 2015 | Change | |||||||||||
Midwest | 527 | 455 | 16 | % | 1,690 | 1,417 | 19 | % | |||||||||
Southern | 550 | 483 | 14 | % | 1,708 | 1,447 | 18 | % | |||||||||
Mid-Atlantic | 339 | 315 | 8 | % | 1,084 | 1,019 | 6 | % | |||||||||
Total | 1,416 | 1,253 | 13 | % | 4,482 | 3,883 | 15 | % |
BACKLOG | |||||||||||||||||||||
December 31, 2016 | December 31, 2015 | ||||||||||||||||||||
Dollars | Average | Dollars | Average | ||||||||||||||||||
Region | Units | (millions) | Sales Price | Units | (millions) | Sales Price | |||||||||||||||
Midwest | 757 | $ | 305 | $ | 403,000 | 672 | $ | 262 | $ | 390,000 | |||||||||||
Southern | 674 | $ | 239 | $ | 355,000 | 560 | $ | 200 | $ | 357,000 | |||||||||||
Mid-Atlantic | 373 | $ | 142 | $ | 380,000 | 299 | $ | 108 | $ | 360,000 | |||||||||||
Total | 1,804 | $ | 685 | $ | 380,000 | 1,531 | $ | 569 | $ | 372,000 |
LAND POSITION SUMMARY | ||||||||||||||
December 31, 2016 | December 31, 2015 | |||||||||||||
Lots | Lots Under | Lots | Lots Under | |||||||||||
Region | Owned | Contract | Total | Owned | Contract | Total | ||||||||
Midwest | 3,747 | 5,527 | 9,274 | 3,921 | 4,220 | 8,141 | ||||||||
Southern | 4,421 | 5,474 | 9,895 | 4,664 | 4,972 | 9,636 | ||||||||
Mid-Atlantic | 2,187 | 1,708 | 3,895 | 2,814 | 1,831 | 4,645 | ||||||||
Total | 10,355 | 12,709 | 23,064 | 11,399 | 11,023 | 22,422 |
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