Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K


CURRENT REPORT
Pursuant to Section 13 or 15(d) of Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 26, 2023

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.)

4131 Worth Avenue, Suite 500 Columbus, OH 43219

(Address of principal executive offices) (Zip Code)

(614) 418-8000

(Telephone Number)


N/A
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a.12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares, par value $.01	MHO	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

SECTION 2 FINANCIAL INFORMATION

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On July 26, 2023, M/I Homes, Inc. (the “Company”) issued a press release reporting financial results for the three- and six-months ended June 30, 2023. A copy of this press release, including information concerning forward-looking statements and factors that may affect our future results, is attached hereto as Exhibit 99.1.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits.


Exhibit No.						Description of Exhibit

99.1						Press release dated July 26, 2023.

104						Cover Page Interactive Data File (embedded within the Inline XBRL document).*

*Submitted electronically with this Report in accordance with the provisions of Regulation S-T.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: July 26, 2023

M/I Homes, Inc.


By:			/s/ Ann Marie W. Hunker
			Ann Marie W. Hunker
			VP, Chief Accounting Officer and Controller

Exhibit 99.1

M/I Homes Reports

2023 Second Quarter Results

Columbus, Ohio (July 26, 2023) - M/I Homes, Inc. (NYSE:MHO) announced results for the three and six months ended June 30, 2023.

2023 Second Quarter Highlights:

•New contracts increased 21% to 2,197 contracts

•Delivered 1,990 homes, down 7% from 2022’s 2,133 homes delivered

•Revenue of $1.0 billion, down 3% from 2022’s second quarter record level

•Pre-tax income of $155.4 million, down 15% from 2022’s record of $182.2 million

•Net income of $118.0 million ($4.12 per diluted share), down 14% from 2022’s record of $136.8 million

•Shareholders’ equity reached a record of $2.3 billion, a 26% increase from a year ago, with book value per share of $83

•Return on equity of 23%

For the second quarter of 2023, the Company reported pre-tax income of $155.4 million and net income of $118.0 million, or $4.12 per diluted share. This compares to pre-tax income of $182.2 million and net income of $136.8 million, or $4.79 per diluted share, for the second quarter of 2022. For the six months ended June 30, 2023, net income decreased 3% to $221.1 million, or $7.77 per diluted share, compared to $228.7 million, or $7.93 per diluted share, for the same period of 2022.

Homes delivered in 2023’s second quarter decreased 7% to 1,990 homes. This compares to 2,133 homes delivered in 2022’s second quarter. Homes delivered for the six months ended June 30, 2023 increased 1% to 3,997 from 2022’s deliveries of 3,956. New contracts for the second quarter of 2023 increased 21% to 2,197 new contracts. For the first six months of 2023, new contracts increased 1% to 4,368 compared to 4,334 in 2022. Homes in backlog at June 30, 2023 had a total sales value of $1.8 billion, a 34% decrease from a year ago. Backlog units at June 30, 2023 decreased 33% to 3,508 homes, with an average sales price of $507,000. At June 30, 2022, backlog sales value was $2.7 billion, with backlog units of 5,213 and an average sales price of $519,000. M/I Homes had 195 communities at June 30, 2023 compared to 168 communities at June 30, 2022. The Company's cancellation rate was 10% in the second quarter of 2023 compared to 11% in the second quarter of 2022.

Robert H. Schottenstein, Chief Executive Officer and President, commented, “We had a very strong second quarter. Despite higher interest rates and uncertain economic conditions, we were very pleased with our new contracts, homes delivered, margins and income. New contracts improved by 21% over last year; we delivered 1,990 homes and continued to improve our construction cycle time; gross margins were considerably better than expected at 26%; and pre-tax income of $155 million, though down from last year’s record level, represented 15.3% of revenue. These results produced a very solid 23% return on equity. Our book value per share is now $83, an increase of 26% versus a year ago.”

Mr. Schottenstein continued, “Our financial condition remains strong. We ended the quarter with record shareholders’ equity of $2.3 billion and available liquidity in excess of $1 billion. We believe our industry will continue to benefit from strong fundamentals, including favorable demographic trends and an undersupply of housing. Looking ahead, we are well positioned to continue delivering strong results.”

The Company will broadcast live its earnings conference call today at 10:30 A.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 July 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, 2022, 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 Ended						Six Months Ended
	June 30,						June 30,
	2023			2022			2023			2022
New contracts	2,197			1,820			4,368			4,334
Average community count	198			172			197			173
Cancellation rate	10		%	11		%	12		%	9		%
Backlog units	3,508			5,213			3,508			5,213
Backlog sales value	$	1,777,657		$	2,706,586		$	1,777,657		$	2,706,586
Homes delivered	1,990			2,133			3,997			3,956
Average home closing price	$	493		$	477		$	489		$	468

Homebuilding revenue:
Housing revenue	$	980,198		$	1,017,906		$	1,955,144		$	1,851,069
Land revenue	8,549			3,374			8,852			6,911
Total homebuilding revenue	$	988,747		$	1,021,280		$	1,963,996		$	1,857,980

Financial services revenue	25,266			19,374			50,547			43,485
Total revenue	$	1,014,013		$	1,040,654		$	2,014,543		$	1,901,465

Cost of sales - operations	755,829			756,367			1,521,733			1,404,069



Gross margin	$	258,184		$	284,287		$	492,810		$	497,396
General and administrative expense	55,654			55,216			106,614			103,999
Selling expense	51,871			46,206			100,951			87,627
Operating income	$	150,659		$	182,865		$	285,245		$	305,770

Other income	(28)			(1)			(35)			(17)
Interest (income) expense - net	(4,670)			693			(6,059)			1,364

Income before income taxes	$	155,357		$	182,173		$	291,339		$	304,423
Provision for income taxes	37,356			45,335			70,272			75,746
Net income	$	118,001		$	136,838		$	221,067		$	228,677




Earnings per share:
Basic	$	4.25		$	4.88		$	7.98		$	8.10
Diluted	$	4.12		$	4.79		$	7.77		$	7.93

Weighted average shares outstanding:
Basic	27,792			28,041			27,698			28,231
Diluted	28,624			28,590			28,469			28,826

M/I Homes, Inc. and Subsidiaries

Summary Balance Sheet and Other Information (unaudited)

(Dollars in thousands, except per share amounts)


	As of
	June 30,
	2023			2022
Assets:
Total cash, cash equivalents and restricted cash (1)	$	668,287		$	188,755
Mortgage loans held for sale	190,845			194,450
Inventory:
Lots, land and land development	1,296,486			1,136,380
Land held for sale	15,183			10,524
Homes under construction	1,207,759			1,514,965
Other inventory	167,586			154,396
Total Inventory	$	2,687,014		$	2,816,265

Property and equipment - net	35,495			36,150
Investments in joint venture arrangements	41,988			55,625
Operating lease right-of-use assets	58,404			52,328
Goodwill	16,400			16,400
Deferred income tax asset	18,019			10,251
Other assets	145,297			123,100
Total Assets	$	3,861,749		$	3,493,324

Liabilities:
Debt - Homebuilding Operations:


Senior notes due 2028 - net	$	396,492		$	395,718
Senior notes due 2030 - net	296,613			296,109



Notes payable - other	—			1,001
Total Debt - Homebuilding Operations	$	693,105		$	692,828


Notes payable bank - financial services operations	186,396			194,602
Total Debt	$	879,501		$	887,430

Accounts payable	264,656			329,384
Operating lease liabilities	59,461			53,058
Other liabilities	359,672			405,185
Total Liabilities	$	1,563,290		$	1,675,057

Shareholders’ Equity	2,298,459			1,818,267
Total Liabilities and Shareholders’ Equity	$	3,861,749		$	3,493,324

Book value per common share	$	82.73		$	65.50
Homebuilding debt to capital ratio (2)	23		%	28		%

(1)Includes $0.9 million and $1.2 million of restricted cash and cash held in escrow for the quarters ended June 30, 2023 and 2022, respectively.

(2)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 (unaudited)

(Dollars in thousands)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022


Cash provided by operating activities	$	166,190	$	9,214	$	417,689	$	78,540
Cash provided by (used in) investing activities	$	1,991	$	(4,829)	$	(2,802)	$	(11,463)
Cash used in financing activities	$	(42,458)	$	(34,236)	$	(58,142)	$	(114,690)

Land/lot purchases	$	96,068	$	120,667	$	141,714	$	214,615
Land development spending	$	108,914	$	106,543	$	201,333	$	207,240
Land sale revenue	$	8,549	$	3,374	$	8,852	$	6,911
Land sale gross profit	$	892	$	591	$	889	$	1,558

Financial services pre-tax income	$	11,159	$	8,667	$	23,800	$	21,722

M/I Homes, Inc. and Subsidiaries

Non-GAAP Financial Results (1)

(Dollars in thousands)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Net income	$	118,001	$	136,838	$	221,067	$	228,677
Add:
Provision for income taxes	37,356		45,335		70,272		75,746
Interest (income) expense - net	(6,980)		(750)		(10,653)		(1,307)
Interest amortized to cost of sales	8,734		7,536		16,824		14,863
Depreciation and amortization	4,266		4,286		8,663		8,474
Non-cash charges	2,301		2,018		4,324		3,849
Adjusted EBITDA	$	163,678	$	195,263	$	310,497	$	330,302

(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.

M/I Homes, Inc. and Subsidiaries

Selected Supplemental Financial and Operating Data


	NEW CONTRACTS
	Three Months Ended				Six Months Ended
	June 30,				June 30,
			%				%
Region	2023	2022	Change		2023	2022	Change
Northern	949	722	31	%	1,777	1,912	(7)	%
Southern	1,248	1,098	14	%	2,591	2,422	7	%
Total	2,197	1,820	21	%	4,368	4,334	1	%


	HOMES DELIVERED
	Three Months Ended				Six Months Ended
	June 30,				June 30,
			%				%
Region	2023	2022	Change		2023	2022	Change
Northern	783	1,000	(22)	%	1,580	1,760	(10)	%
Southern	1,207	1,133	7	%	2,417	2,196	10	%
Total	1,990	2,133	(7)	%	3,997	3,956	1	%


	BACKLOG
	June 30, 2023					June 30, 2022
		Dollars		Average			Dollars		Average
Region	Units	(millions)		Sales Price		Units	(millions)		Sales Price
Northern	1,253	$	631	$	504,000	2,042	$	1,036	$	507,000
Southern	2,255	$	1,147	$	509,000	3,171	$	1,670	$	527,000
Total	3,508	$	1,778	$	507,000	5,213	$	2,706	$	519,000


	LAND POSITION SUMMARY
	June 30, 2023			June 30, 2022
	Lots	Lots Under		Lots	Lots Under
Region	Owned	Contract	Total	Owned	Contract	Total
Northern	7,545	7,199	14,744	7,601	7,764	15,365
Southern	15,893	10,695	26,588	17,196	15,285	32,481
Total	23,438	17,894	41,332	24,797	23,049	47,846

Cover Page Cover Page	Jul. 26, 2023
Cover [Abstract]
Document Type	8-K
Document Period End Date	Jul. 26, 2023
Entity Registrant Name	M/I HOMES, INC.
Entity Incorporation, State or Country Code	OH
Entity File Number	1-12434
Entity Tax Identification Number	31-1210837
Entity Address, Address Line One	4131 Worth Avenue
Entity Address, Address Line Two	Suite 500
Entity Address, City or Town	Columbus
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	43219
City Area Code	614
Local Phone Number	418-8000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Shares, par value $.01
Trading Symbol	MHO
Security Exchange Name	NYSE
Entity Emerging Growth Company	false
Entity Central Index Key	0000799292
Amendment Flag	false