EX-99.1 2 exhibit9914thqtr2022earnin.htm EX-99.1 4TH QUARTER EARNINGS PRESS RELEASE 02-01-2023 Document

Exhibit 99.1

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

Columbus, Ohio (February 1, 2023) - M/I Homes, Inc. (NYSE:MHO) announced results for its fourth quarter and year ended December 31, 2022.

2022 Fourth Quarter Results:
•Homes delivered increased 3% to 2,384, an all-time quarterly record
•Revenue increased 16% to an all-time quarterly record of $1.2 billion
•Pre-tax income increased 16% to $164.2 million, a fourth quarter record
•Net income increased 15% to $130.4 million ($4.65 per diluted share)
compared to $113.4 million ($3.83 per diluted share) in 2021
•Results include $18.4 million of impairments ($13.9 million after tax or $0.50 per diluted share)
•New contracts were 985 compared to 1,744 in 2021’s fourth quarter, a 44% decrease
•Backlog sales value of $1.7 billion versus $2.4 billion last year

2022 Full Year Results:
•Homes delivered of 8,366 compared to 8,638 in 2021, a 3% decrease
•Record revenue of $4.1 billion, an increase of 10% over last year
•Record pre-tax income of $635.2 million, a 25% increase compared to $509.1 million in 2021
•Net income increased 24% to a record $490.7 million ($17.24 per diluted share) compared to $396.9
million in 2021 ($13.28 per diluted share)
•New contracts were 6,668 compared to 2021’s 9,084, a 27% decrease
•Shareholders’ equity reached an all-time record of $2.1 billion, a 28% increase from a year ago, with book value per share of $75
•Return on equity of 27%
•Homebuilding debt to capital ratio of 25% compared to 30% at December 31, 2021

For the fourth quarter of 2022, the Company reported record net income of $130.4 million, or $4.65 per diluted share, compared to net income of $113.4 million, or $3.83 per diluted share, for the fourth quarter of 2021. Net income for the fourth quarter of 2022 included $13.9 million of after-tax charges ($0.50 per diluted share) for impairments of land-related assets and deposit write-offs. For the year ended December 31, 2022, the Company reported net income of $490.7 million, or $17.24 per diluted share, compared to net income of $396.9 million, or $13.28 per diluted share in 2021. Net income for the year ended December 31, 2022 included $13.9 million of after-tax charges ($0.50 per diluted share) for impairments of land-related assets and deposit write-offs. Net income in 2021 included a $7.0 million after-tax loss on early extinguishment of debt ($0.23 per diluted share).



Homes delivered in 2022’s fourth quarter reached an all-time quarterly record of 2,384, increasing 3% compared to 2,316 deliveries in 2021’s fourth quarter. Homes delivered for the twelve months ended December 31, 2022 decreased 3% to 8,366 from 2021’s deliveries of 8,638. New contracts for 2022’s fourth quarter decreased 44% to 985 from 1,744 new contracts in 2021’s fourth quarter. For 2022, new contracts were 6,668, declining 27% from 2021’s 9,084 new contracts. Homes in backlog decreased 35% at December 31, 2022 to 3,137 units, with a sales value of $1.7 billion, a 28% decrease from last year, and the average sales price in backlog increased 11% to $541,000. At December 31, 2021, the sales value of the 4,835 homes in backlog was $2.4 billion, with an average sales price of $490,000. M/I Homes had 196 active communities at December 31, 2022 compared to 175 a year ago. The Company’s cancellation rate was 30% in 2022’s fourth quarter and 10% for the prior year’s fourth quarter.

Robert H. Schottenstein, Chief Executive Officer and President, commented, “We are pleased to announce our fourth quarter and full year financial results, highlighted by record revenue, income, and very strong returns. We increased our revenue by 10% to a record $4.1 billion, increased pre-tax income by 25% to $635 million, and improved our operating margin by 160 basis points to 15.4%. Our gross margins, exclusive of 2022 impairments, improved by 140 basis points over last year to 25.7%, our overhead expense ratio improved by 60 basis points to 9.8%, and our return on equity continued to be strong at 27%. These results drove record diluted earnings per share of $17.24, a 30% increase over 2021 and produced year-end book value of $75 per share.”

Mr. Schottenstein continued, “Our financial condition is excellent. We ended the year with record shareholders’ equity reaching $2.1 billion, cash of $312 million, zero borrowings under our $650 million credit facility, and a homebuilding debt to capital of 25%. The rapid rise in interest rates over the past 9 months has materially impacted demand. On the other hand, favorable homebuyer demographics and a prolonged undersupply of available homes give us confidence in the housing market’s long-term outlook. Though current conditions remain challenging, we feel very good about our position given the strength of our balance sheet, our low debt levels, our diverse product offerings and our well-located 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 2024.

M/I Homes, Inc. is one of the nation’s leading homebuilders of single-family homes. The Company has homebuilding operations in Columbus and Cincinnati, Ohio; Indianapolis, Indiana; Chicago, Illinois; Minneapolis/St. Paul, Minnesota; Detroit, Michigan; Tampa, Sarasota, Fort Myers/Naples 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, 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, 2021, 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,
2022202120222021
New contracts985 1,744 6,668 9,084 
Average community count187 176 179 183 
Cancellation rate30 %10 %14 %8 %
Backlog units3,137 4,835 3,137 4,835 
Backlog sales value$1,698,169 $2,366,873 $1,698,169 $2,366,873 
Homes delivered2,384 2,316 8,366 8,638 
Average home closing price$492 $443 $479 $420 
Homebuilding revenue:
   Housing revenue$1,172,515 $1,026,082 $4,010,427 $3,630,469 
   Land revenue21,874 2,721 34,771 13,390 
Total homebuilding revenue$1,194,389 $1,028,803 $4,045,198 $3,643,859 
   Financial services revenue22,611 22,949 86,195 102,028 
Total revenue$1,217,000 $1,051,752 $4,131,393 $3,745,887 
Cost of sales - operations924,117 808,150 3,069,199 2,836,972 
Cost of sales - impairment18,352 — 18,352 — 
Gross margin$274,531 $243,602 $1,043,842 $908,915 
General and administrative expense52,565 48,306 214,811 192,009 
Selling expense57,580 55,231 191,580 198,610 
Operating income$164,386 $140,065 $637,451 $518,296 
Other loss (income)11 (1,901)(6)(2,046)
Interest expense185 602 2,250 2,156 
Loss on early extinguishment of debt— — — 9,072 
Income before income taxes$164,190 $141,364 $635,207 $509,114 
Provision for income taxes 33,795 27,981 144,545 112,246 
Net income$130,395 $113,383 $490,662 $396,868 
Earnings per share:
Basic$4.75 $3.93 $17.60 $13.64 
Diluted$4.65 $3.83 $17.24 $13.28 
Weighted average shares outstanding:
Basic27,435 28,833 27,876 29,092 
Diluted28,017 29,612 28,463 29,880 



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

As of
December 31,
20222021
Assets:
Total cash, cash equivalents and restricted cash$311,542 $236,368 
Mortgage loans held for sale242,539 275,655 
Inventory:
Lots, land and land development1,294,779 1,125,738 
Land held for sale3,331 4,312 
Homes under construction1,366,804 1,187,341 
Other inventory163,688 135,043 
Total Inventory$2,828,602 $2,452,434 
Property and equipment - net37,446 37,648 
Operating lease right-of-use assets60,416 50,950 
Goodwill16,400 16,400 
Investments in joint venture arrangements51,554 57,121 
Deferred income tax asset18,019 10,251 
Other assets148,405 103,026 
Total Assets$3,714,923 $3,239,853 
Liabilities:
Debt - Homebuilding Operations:
Senior notes due 2028 - net396,105 395,331 
Senior notes due 2030 - net296,361 295,937 
Notes payable - other— 4,549 
Total Debt - Homebuilding Operations$692,466 $695,817 
Notes payable bank - financial services operations245,741 266,160 
Total Debt$938,207 $961,977 
Accounts payable228,597 244,505 
Operating lease liabilities61,310 51,497 
Other liabilities416,084 357,690 
Total Liabilities$1,644,198 $1,615,669 
Shareholders’ Equity2,070,725 1,624,184 
Total Liabilities and Shareholders’ Equity$3,714,923 $3,239,853 
Book value per common share$75.46 $56.99 
Homebuilding debt / capital ratio(1)
25 %30 %

(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,
2022202120222021
Cash provided by (used in) operating activities$198,220 $17,518 $184,071 $(16,823)
Cash used in investing activities$(8,282)$(19,799)$(27,380)$(51,722)
Cash provided by (used in) financing activities$53,843 $17,492 $(81,517)$44,103 
Land/lot purchases$51,480 $156,307 $341,084 $630,120 
Land development spending$146,937 $140,640 $496,177 $421,824 
Land sale revenue$21,874 $2,721 $34,771 $13,390 
Land sale gross profit$8,827 $707 $11,735 $3,228 
Financial services pre-tax income$9,655 $10,775 $39,260 $58,379 




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

Three Months EndedTwelve Months Ended
December 31,December 31,
2022202120222021
Net income$130,395 $113,383 $490,662 $396,868 
Add:
Provision for income taxes33,795 27,981 144,545 112,246 
Interest income(2,034)(677)(4,403)(1,950)
Interest amortized to cost of sales8,724 7,974 30,270 33,829 
Depreciation and amortization4,350 4,378 17,174 16,915 
Non-cash charges20,526 2,360 27,139 10,437 
Adjusted EBITDA$195,756 $155,399 $705,387 $568,345 



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,
2022202120222021
Income before income taxes$164,190 $141,364 $635,207 $509,114 
Add: Impairment (2)
18,352 — 18,352 — 
Add: Loss on early extinguishment of debt (3)
— — — 9,072 
Adjusted income before income taxes$182,542 $141,364 $653,559 $518,186 
Net income$130,395 $113,383 $490,662 $396,868 
Add: Impairment - net of tax (2)
13,948 — 13,948 — 
Add: Loss on early extinguishment of debt (3)
— — — 6,985 
Adjusted net income$144,343 $113,383 $504,610 $403,853 
Impairment - net of tax (2)
$13,948 $— $13,948 $— 
Loss on early extinguishment of debt (3)
$— $— $— $6,985 
Divided by: Diluted weighted average shares outstanding28,017 29,612 28,463 29,880 
Diluted earnings per share related to impairment (2)
$0.50 $— $0.50 $— 
Diluted earnings per share related to loss on early extinguishment of debt (3)
— — — 0.23 
Add: Diluted earnings per share4.65 3.83 17.24 13.28 
Adjusted diluted earnings per share$5.15 $3.83 $17.74 $13.51 
(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 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,
%%
Region20222021Change20222021Change
Northern369 705 (48)%2,747 3,667 (25)%
Southern616 1,039 (41)%3,921 5,417 (28)%
Total985 1,744 (44)%6,668 9,084 (27)%

HOMES DELIVERED
Three Months EndedTwelve Months Ended
December 31,December 31,
%%
Region20222021Change20222021Change
Northern971 954 2 %3,581 3,592 — %
Southern1,413 1,362 4 %4,785 5,046 (5)%
Total2,384 2,316 3 %8,366 8,638 (3)%

BACKLOG
December 31, 2022December 31, 2021
DollarsAverageDollarsAverage
RegionUnits(millions)Sales PriceUnits(millions)Sales Price
Northern1,056 $552 $523,000 1,890 $914 $484,000 
Southern2,081 $1,146 $551,000 2,945 $1,453 $493,000 
Total3,137 $1,698 $541,000 4,835 $2,367 $490,000 

LAND POSITION SUMMARY
December 31, 2022December 31, 2021
LotsLots UnderLotsLots Under
RegionOwnedContractTotalOwnedContractTotal
Northern7,972 7,406 15,378 7,729 7,160 14,889 
Southern17,032 9,643 26,675 16,864 12,204 29,068 
Total25,004 17,049 42,053 24,593 19,364 43,957