EX-99.1 2 exhibit9914thqtr2021earnin.htm EX-99.1 Document

Exhibit 99.1

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M/I Homes Reports
Fourth Quarter and Year-End Results


Columbus, Ohio (February 2, 2022) - M/I Homes, Inc. (NYSE:MHO) announced results for its fourth quarter and year ended December 31, 2021.

2021 Fourth Quarter Results:
•Homes delivered increased 3% to 2,316, an all-time quarterly record
•Revenue increased 16% to an all-time quarterly record of $1.1 billion
•Pre-tax income increased 39% to $141.4 million, an all-time quarterly record
•Net income increased 42% to $113.4 million ($3.83 per diluted share)
compared to $80.1 million ($2.71 per diluted share) in 2020
•New contracts were 1,744 compared to 2,128 in 2020’s fourth quarter
•Backlog units increased 10% to 4,835, a fourth quarter record
•Backlog sales value reached $2.4 billion, a fourth quarter record

2021 Full Year Results:
•Record homes delivered of 8,638, a 12% increase
•Record revenue of $3.7 billion, an increase of 23%
•Record pre-tax income of $509.1 million, a 64% increase compared to $310.0 million in 2020
•Net income increased 65% to $396.9 million ($13.28 per diluted share) compared to $239.9
million in 2020 ($8.23 per diluted share)
•New contracts were 9,084, a decrease of 4% when compared to the record level achieved in 2020
•Shareholders’ equity reached an all-time record of $1.6 billion, a 29% increase from a year ago,
with book value per share of $57
•Return on equity of 27.4%
•Homebuilding debt to capital ratio of 30% compared to 34% at December 31, 2020

For the fourth quarter of 2021, the Company reported record net income of $113.4 million, or $3.83 per diluted share. This compares to net income of $80.1 million, or $2.71 per diluted share, for the fourth quarter of 2020. Net income in the fourth quarter of 2020 included $6.4 million of after-tax impairment charges ($0.22 per diluted share).

For the year ended December 31, 2021, the Company reported net income of $396.9 million, or $13.28 per diluted share, compared to net income of $239.9 million, or $8.23 per diluted share, in 2020. Net income in 2021 included a $7.0 million after-tax loss on early extinguishment of debt ($0.23 per diluted share) while net income in 2020 included $6.4 million of after-tax impairment charges ($0.22 per diluted share).



Homes delivered in 2021’s fourth quarter reached an all-time quarterly record of 2,316, increasing 3% compared to 2,242 deliveries in 2020’s fourth quarter. Homes delivered for the twelve months ended December 31, 2021 increased 12% to a record 8,638 from 2020’s deliveries of 7,709. New contracts for 2021’s fourth quarter decreased 18% to 1,744 from 2,128 new contracts in 2020’s fourth quarter. For 2021, new contracts were 9,084, declining 4% from 2020’s 9,427 new contracts. Homes in backlog increased 10% at December 31, 2021 to 4,835 units, with an all-time record sales value of $2.4 billion, a 29% increase over last year, and the average sales price in backlog increased 17% to $490,000. At December 31, 2020, the sales value of the 4,389 homes in backlog was $1.8 billion, with an average sales price of $419,000. M/I Homes had 175 active communities at December 31, 2021 compared to 202 a year ago. The Company’s cancellation rate was 10% in 2021’s fourth quarter and 8% for the year.

Robert H. Schottenstein, Chief Executive Officer and President, commented, “2021 was another banner year for M/I Homes, highlighted by record levels of revenue, homes delivered, income, and year-end backlog. Our revenue increased 23% to $3.7 billion, pre-tax income improved 64% to $509 million and net income and diluted earnings per share both improved over 60% from 2020 levels, resulting in a strong return on equity of 27.4%. Our 2021 results reflect a 210 basis point improvement in our gross margins to 24.3%, a 130 basis point improvement in our overhead expense ratio and record earnings in our financial services operations. We are particularly pleased with these results given the unprecedented labor and material supply chain issues we experienced throughout the year. In addition, despite a 13% decline in community count and limiting sales in a majority of our communities, we achieved record year-end backlog units and backlog sales value, increasing 10% and 29%, over 2020.”

Mr. Schottenstein continued “We ended the year with record shareholders’ equity of $1.6 billion, an increase of 29% from 2020 and book value per share of $57. Our year-end cash balance was $236 million, with no borrowings on our $550 million credit facility and a homebuilding debt to capital ratio of 30%. During the year, we also repurchased $52 million of our common shares. Though the supply chain and construction challenges are likely to persist, we are well positioned to continue growing our business as we begin the year with a strong balance sheet, record backlog, solid housing demand and plans to open a record number of new communities.”

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 February 2023.

M/I Homes, Inc. is one of the nation’s leading builders of single-family homes, having sold over 136,700 homes. The Company’s homes are marketed and sold primarily under the M/I Homes Brand. The Company has homebuilding operations in Columbus and Cincinnati, Ohio; Indianapolis, Indiana; Chicago, Illinois; Minneapolis/St. Paul, Minnesota; Detroit, Michigan; Tampa, Sarasota and Orlando, Florida; Austin, Dallas/Fort Worth, Houston and San Antonio, Texas; Charlotte and Raleigh, North Carolina and Nashville, Tennessee.

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,” “envisions”, “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, the impact of COVID-19, interest rates, availability of resources, competition, market concentration, land development activities, construction defects, product liability and warranty claims 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, 2020, 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.
Ann Marie W. Hunker, Vice President, Chief Accounting Officer and Controller, (614) 418-8225
Mark Kirkendall, Vice President, Treasurer, (614) 418-8021






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

Three Months EndedTwelve Months Ended
December 31,December 31,
2021202020212020
New contracts1,744 2,128 9,084 9,427 
Average community count176 205 183 215 
Cancellation rate10 %10 %8 %11 %
Backlog units4,835 4,389 4,835 4,389 
Backlog sales value$2,366,873 $1,836,907 $2,366,873 $1,836,907 
Homes delivered2,316 2,242 8,638 7,709 
Average home closing price$443 $389 $420 $381 
Homebuilding revenue:
   Housing revenue$1,026,082 $872,814 $3,630,469 $2,939,962 
   Land revenue2,721 8,061 13,390 19,170 
Total homebuilding revenue$1,028,803 $880,875 $3,643,859 $2,959,132 
   Financial services revenue22,949 25,552 102,028 87,013 
Total revenue$1,051,752 $906,427 $3,745,887 $3,046,145 
Cost of sales - operations808,150 689,245 2,836,972 2,361,367 
Cost of sales - impairment— 8,435 — 8,435 
Gross margin$243,602 $208,747 $908,915 $676,343 
General and administrative expense48,306 53,784 192,009 177,547 
Selling expense55,231 52,041 198,610 179,535 
Operating income$140,065 $102,922 $518,296 $319,261 
Other income(1,901)(159)(2,046)(466)
Interest expense602 1,230 2,156 9,684 
Loss on early extinguishment of debt— — 9,072 — 
Income before income taxes$141,364 $101,851 $509,114 $310,043 
Provision for income taxes 27,981 21,768 112,246 70,169 
Net income$113,383 $80,083 $396,868 $239,874 
Earnings per share:
Basic$3.93 $2.78 $13.64 $8.38 
Diluted$3.83 $2.71 $13.28 $8.23 
Weighted average shares outstanding:
Basic28,833 28,776 29,092 28,610 
Diluted29,612 29,507 29,880 29,152 


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

As of
December 31,
20212020
Assets:
Total cash, cash equivalents and restricted cash$236,368 $260,810 
Mortgage loans held for sale275,655 234,293 
Inventory:
Lots, land and land development1,125,738 868,288 
Land held for sale4,312 4,623 
Homes under construction1,187,341 898,966 
Other inventory135,043 144,731 
Total Inventory$2,452,434 $1,916,608 
Property and equipment - net37,648 26,612 
Operating lease right-of-use assets50,950 52,291 
Goodwill16,400 16,400 
Investments in joint venture arrangements57,121 34,673 
Deferred income tax asset10,251 6,183 
Other assets103,026 95,175 
Total Assets$3,239,853 $2,643,045 
Liabilities:
Debt - Homebuilding Operations:
Senior notes due 2025 - net$— $247,613 
Senior notes due 2028 - net395,331 394,557 
Senior notes due 2030 - net295,937 — 
Notes payable - other4,549 4,072 
Total Debt - Homebuilding Operations$695,817 $646,242 
Notes payable bank - financial services operations266,160 225,634 
Total Debt$961,977 $871,876 
Accounts payable244,505 185,669 
Operating lease liabilities51,497 52,474 
Other liabilities357,690 274,328 
Total Liabilities$1,615,669 $1,384,347 
Shareholders’ Equity1,624,184 1,258,698 
Total Liabilities and Shareholders’ Equity$3,239,853 $2,643,045 
Book value per common share$56.99 $43.68 
Homebuilding debt / capital ratio(1)
30 %34 %

(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.



M/I Homes, Inc. and Subsidiaries
Selected Supplemental Financial and Operating Data
(Dollars in thousands)

Three Months EndedTwelve Months Ended
December 31,December 31,
2021202020212020
Cash provided by (used in) operating activities$17,518 $(28,892)$(16,823)$168,334 
Cash used in investing activities$(19,799)$(2,543)$(51,722)$(33,870)
Cash provided by financing activities$17,492 $89,733 $44,103 $120,263 
Land/lot purchases$156,307 $148,126 $630,120 $414,950 
Land development spending$140,640 $95,732 $421,824 $318,336 
Land sale revenue$2,721 $8,061 $13,390 $19,170 
Land sale gross profit$707 $738 $3,228 $989 
Financial services pre-tax income$10,775 $14,821 $58,379 $50,468 




M/I Homes, Inc. and Subsidiaries
Non-GAAP Financial Results (1)
(Dollars in thousands)

Three Months EndedTwelve Months Ended
December 31,December 31,
2021202020212020
Net income$113,383 $80,083 $396,868 $239,874 
Add:
Provision for income taxes27,981 21,768 112,246 70,169 
Interest (income) expense(677)333 (1,950)6,168 
Interest amortized to cost of sales7,974 9,559 33,829 32,686 
Depreciation and amortization4,378 4,564 16,915 17,578 
Non-cash charges2,360 10,313 10,437 16,685 
Adjusted EBITDA$155,399 $126,620 $568,345 $383,160 



M/I Homes, Inc. and Subsidiaries
Non-GAAP Reconciliation (1)
(Dollars and shares in thousands, except per share amounts)

Three Months EndedTwelve months ended
December 31,December 31,
2021202020212020
Income before income taxes$141,364 $101,851 $509,114 $310,043 
Add: Impairment (2)
— 8,435 — 8,435 
Add: Stucco-related charges (3)
— 860 — 860 
Add: Loss on early extinguishment of debt (4)
— — 9,072 — 
Adjusted income before income taxes$141,364 $111,146 $518,186 $319,338 
Net income$113,383 $80,083 $396,868 $239,874 
Add: Impairment - net of tax (2)
— 6,411 — 6,411 
Add: Stucco-related charges - net of tax (3)
— 654 — 654 
Add: Loss on early extinguishment of debt (4)
— — 6,985 — 
Adjusted net income$113,383 $87,148 $403,853 $246,939 
Impairment - net of tax (2)
$— $6,411 $— $6,411 
Stucco-related charges - net of tax (3)
$— $654 $— $654 
Loss on early extinguishment of debt (4)
$— $— $6,985 $— 
Divided by: Diluted weighted average shares outstanding29,612 29,507 29,880 29,152 
Diluted earnings per share related to impairment (2)
$— $0.22 $— $0.22 
Diluted earnings per share related to stucco-related charges (3)
— 0.02 — 0.02 
Diluted earnings per share related to loss on early extinguishment of debt (4)
— — 0.23 — 
Add: Diluted earnings per share3.83 2.71 13.28 8.23 
Adjusted diluted earnings per share$3.83 $2.95 $13.51 $8.47 
(1)    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.
(2)    Represents the related charges divided by diluted weighted average shares outstanding during the respective period as presented in the Summary Statement of Income.
(3)    Represents charges for stucco-related repair costs taken in certain of our Florida communities.
(4)    Represents loss on early extinguishment of debt related to the early redemption of our 2025 Senior Notes during the third quarter of 2021, consisting of a $7.1 million prepayment premium due to early redemption and $2.0 million for the write-off of unamortized debt issuance costs.



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

NEW CONTRACTS
Three Months EndedTwelve Months Ended
December 31,December 31,
%%
Region20212020Change20212020Change
Northern705 792 (11)%3,667 3,743 (2)%
Southern1,039 1,336 (22)%5,417 5,684 (5)%
Total1,744 2,128 (18)%9,084 9,427 (4)%

HOMES DELIVERED
Three Months EndedTwelve Months Ended
December 31,December 31,
%%
Region20212020Change20212020Change
Northern954 881 8 %3,592 3,071 17 %
Southern1,362 1,361 — %5,046 4,638 9 %
Total2,316 2,242 3 %8,638 7,709 12 %

BACKLOG
December 31, 2021December 31, 2020
DollarsAverageDollarsAverage
RegionUnits(millions)Sales PriceUnits(millions)Sales Price
Northern1,890 $914 $484,000 1,815 $792 $436,000 
Southern2,945 $1,453 $493,000 2,574 $1,045 $406,000 
Total4,835 $2,367 $490,000 4,389 $1,837 $419,000 

LAND POSITION SUMMARY
December 31, 2021December 31, 2020
LotsLots UnderLotsLots Under
RegionOwnedContractTotalOwnedContractTotal
Northern7,729 7,160 14,889 6,786 7,801 14,587 
Southern16,864 12,204 29,068 10,013 14,909 24,922 
Total24,593 19,364 43,957 16,799 22,710 39,509