COLUMBUS, Ohio, Feb. 7 /PRNewswire-FirstCall/ --
M/I Homes, Inc. (NYSE:MHO) announced results for its fourth quarter and year ended December 31, 2007.
For the quarter, the Company reported a net loss of $68.5 million compared to a net loss of $11.0 million in 2006. Included in the quarter are pre-tax charges totaling $112.3 million ($4.90 per share), which includes land-related impairment and abandonment charges of $104.9 million, joint venture investment write-offs of $4.3 million and $3.1 million of severance costs. By comparison, the fourth quarter of 2006 included $73.1 million ($3.26 per share) of similar charges. For the year, the Company reported a net loss before preferred dividends of $128.1 million ($135.4 million after preferred dividends or $9.69 per share) compared to net income of $38.9 million in 2006. Included in the year ended December 31, 2007 are pre-tax charges totaling $221.5 million ($9.74 per common share) which includes land-related impairment and abandonment charges of $197.8 million, joint venture investment write-offs of $13.1 million, $5.2 million for the write-off of intangibles and $5.4 million of severance costs. 2006's fiscal year included $85.8 million ($3.81 per share) of similar charges. The Company's net loss for the fourth quarter of 2007 and the year then ended includes a net loss from discontinued operations of $26.1 million ($1.86 per share) and $35.6 million ($2.55 per share), respectively, as a result of the Company's previously announced decision to exit the West Palm Beach market. The information presented in the tables of this press release reflect the West Palm Beach results as discontinued operations and the previous year has been restated to be consistent with the current year presentation.
New contracts of 2,513 for the twelve months ended December 31, 2007 were 11% below 2006's 2,825. New contracts for 2007's fourth quarter were 322 compared to 353 in 2006. Homes delivered for the twelve months ended December 31, 2007 were 3,288 compared to 2006's deliveries of 4,109. The sales value of homes in backlog at December 31, 2007 was $233 million, with backlog units of 748 and an average sales price of $312,000. The backlog of homes at December 31, 2006 had a sales value of $533 million, with backlog units of 1,523 and an average sales price of $350,000. Homes delivered in 2007's fourth quarter were 1,042, decreasing 24% from 2006's 1,363. M/I Homes had 146 active communities at December 31, 2007 compared to 163 at December 31, 2006 and 159 at the end of 2007's third quarter.
Robert H. Schottenstein, Chief Executive Officer and President, commented, "Though 2007 was a difficult year for our industry, we made significant strides in improving our financial condition and strengthening our balance sheet. We generated over $200 million of cash from operations and successfully reduced our homebuilding bank borrowings from $410 million at the beginning of 2007 to $115 million at year end. We improved our capital structure with the issuance of $100 million of preferred stock during the first quarter of 2007 and reduced our net debt to capital ratio from 44% to 33%. We also took dramatic steps to reduce our expense levels and were pleased to reduce our owned lot count by 30% during the year. We were also pleased to report that we were profitable during every quarter of 2007 before the impairment and other charges noted above."
Mr. Schottenstein, continued, "As we begin 2008, market conditions are challenging and are likely to remain so throughout the year. We will continue to employ a predominantly defensive operating strategy as we strive to further reduce our expense levels and strengthen our balance sheet. In that regard, we are projecting that our homebuilding bank debt will be reduced to zero by the end of 2008. With net worth in excess of $580 million and minimal off balance sheet exposure, we believe M/I is well positioned to manage through the current cycle. In the meantime, we will remain focused on the key operational aspects of our business - premier locations, building quality homes and taking care of our customers."
The Company will broadcast live its earnings conference call today at 4:00 p.m. EST. To hear the call, 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." The call, along with any applicable reconciliation of non- GAAP financial measures, will continue to be available on our website through February 2009.
M/I Homes, Inc. is one of the nation's leading builders of single-family homes, having delivered over 71,000 homes. The Company's homes are marketed and sold under the trade names M/I Homes and Showcase Homes. The Company has homebuilding operations in Columbus and Cincinnati, Ohio; Chicago, Illinois; Indianapolis, Indiana; Tampa and Orlando, Florida; 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 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 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 in the Company's Annual Report on Form 10-K for the year ended December 31, 2006. 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 in this Press Release will increase with the passage of time. The Company undertakes 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.
M/I Homes, Inc. and Subsidiaries
Consolidated Statements of Income
(In thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
2007 2006 2007 2006
Revenue: $340,460 $442,979 $1,016,460 $1,274,145
Net income:
(Loss) income from
continuing operations $(42,315) $(13,716) $(92,480) $29,297
(Loss) income from
discontinued operations (26,145) 2,747 (35,646) 9,578
Net (loss) income (68,460) (10,969) (128,126) 38,875
Preferred share dividend 2,438 - 7,313 -
Net (loss) income to common
shareholders $(70,898) $(10,969) $(135,439) $38,875
(Loss) earnings per share to
common shareholders:
Basic:
Continuing operations $(3.20) $(0.99) $(7.14) $2.10
Discontinued operations (1.86) 0.20 (2.55) 0.68
Total $(5.06) $(0.79) $(9.69) $2.78
Diluted:
Continuing operations $(3.20) $(0.99) $(7.14) $2.07
Discontinued operations (1.86) 0.20 (2.55) 0.67
Total $(5.06) $(0.79) $(9.69) $2.74
Weighted average shares
outstanding:
Basic 14,000 13,906 13,977 13,970
Diluted 14,000 13,906 13,977 14,168
M/I Homes, Inc. and Subsidiaries
Selected Supplemental Financial and Operating Data
(Dollars in thousands)
Three Months Ended Twelve Months Ended
December 31, December 31,
2007 2006 2007 2006
Revenue $340,460 $442,979 $1,016,460 $1,274,145
Gross margin (20,388) 35,833 35,487 247,719
General and administrative
expense 22,642 27,354 93,049 98,289
Selling expense 22,324 26,554 77,971 88,317
Operating (loss) income (65,354) (18,075) (135,533) 61,113
Interest expense 3,917 5,017 15,343 15,807
(Loss) income from continuing
operations before income
taxes (69,271) (23,092) (150,876) 45,306
(Benefit) provision for income
taxes (26,956) (9,376) (58,396) 16,009
(Loss) income from continuing
operations, net of income
taxes (42,315) (13,716) (92,480) 29,297
(Loss) income from
discontinued operations,
net of income taxes (26,145) 2,747 (35,646) 9,578
Net (loss) income (68,460) (10,969) (128,126) 38,875
Preferred share dividends 2,438 - 7,313 -
Net (loss) income to
common shareholders $(70,898) $(10,969) $(135,439) $38,875
Revenue:
Housing revenue $293,235 $407,246 $939,492 $1,201,334
Land revenue 42,764 30,636 58,330 48,879
Other 355 (2,778) (424) 647
Total homebuilding revenue 336,354 435,104
997,398 1,250,860
Financial services revenue 4,106 7,875 19,062 27,125
Eliminations - - - (3,840)
Total revenue $340,460 $442,979 $1,016,460 $1,274,145
Land, Lot and Investment in
Unconsolidated Subsidiaries
Impairment by Region:
Midwest $785 $19,387 $8,127 $21,307
Florida 44,461 4,619 86,430 4,619
Mid-Atlantic 19,465 41,274 53,820 41,274
Continuing operations $64,711 $65,280 $148,377 $67,200
Discontinued operations 43,042 4,550 58,915 4,550
Consolidated Total $107,753 $69,830 $207,292 $71,750
Abandonments by Region:
Midwest $385 $1,737 $676 $3,713
Florida 12 1,136 1,840 2,630
Mid-Atlantic 1,050 122 1,096 632
Continuing operations $1,447 $2,995 $3,612 $6,975
Discontinued operations - 41 - 41
Consolidated Total $1,447 $3,036 $3,612 $7,016
M/I Homes, Inc. and Subsidiaries
Selected Supplemental Financial and Operating Data
(Dollars in thousands)
Three Months Ended Twelve Months Ended
December 31, December 31,
2007 2006 2007 2006
EBITDA (1) $13,485 $68,617 $54,831 $176,498
Interest incurred - net of
fee amortization $8,167 $12,806 $35,093 $45,204
Interest amortized to cost
of sales $9,787 $6,809 $20,836 $12,971
Depreciation and amortization $2,221 $2,117 $8,527 $6,926
Non-cash charges $109,794 $73,552 $219,127 $81,823
Cash provided by (used in)
operating activities $128,489 $77,997 $202,211 $(104,012)
Cash used in investing
activities $(4,869) $(4,614) $(13,861) $(21,758)
Cash (used in) provided by
financing activities $(124,599) $(64,580) $(198,360) $112,201
Financial services pre-tax
income $1,028 $4,693 $7,881 $15,410
(1) Earnings before interest, taxes, depreciation and amortization
("EBITDA") is defined, in accordance with our credit facility, as net
income, plus interest expense (including interest amortized to land
and housing costs), income taxes, depreciation, amortization and non-
cash charges, minus interest income.
Units:
New contracts:
Continuing operations 293 381 2,452 2,800
Discontinued operations 29 (28) 61 25
Consolidated total 322 353 2,513 2,825
Homes delivered:
Continuing operations 984 1,275 3,173 3,901
Discontinued operations 58 88 115 208
Consolidated total 1,042 1,363 3,288 4,109
December 31,
2007 2006
Consolidated Backlog:
Units 748 1,523
Aggregate sales value
(in millions) $233 $533
Average sales price $312 $350
December 31,
2007 2006
Balance Sheet and Operating
Data:
Unrestricted cash/cash held
in escrow $22,745 $70,454
Homebuilding inventory
Lots, land and land
development costs $489,953 $709,565
Land held for sale 8,523 21,803
Homes under construction 264,912 329,750
Land purchase deposit 4,431 3,735
Other 29,510 27,886
Total homebuilding inventory $797,329 $1,092,739
Total assets $1,117,645 $1,477,079
Homebuilding debt $320,615 $615,599
Shareholders' equity $581,345 $617,052
Book value per common share $34.23 $44.33
Homebuilding net debt/
capital ratio 33% 44%
M/I Homes, Inc. and Subsidiaries
Selected Supplemental Financial and Operating Data
Land Position Summary
December 31, 2007 December 31, 2006
Lots Lots
Lots Under Lots Under
Owned Contract Total Owned Contract Total
Midwest region 6,402 565 6,967 7,433 854 8,287
Florida region 5,304 540 5,844 8,436 1,034 9,470
Mid-Atlantic region 2,044 1,318 3,362 2,935 1,158 4,093
Continuing operations 13,750 2,423 16,173 18,804 3,046 21,850
Discontinued operations - - - 582 - 582
Consolidated total 13,750 2,423 16,173 19,386 3,046 22,432
DATASOURCE: M/I Homes, Inc.
CONTACT: Phillip G. Creek, Senior Vice President and Chief Financial
Officer, +1-614-418-8011, or Ann Marie W. Hunker, Vice President and Corporate
Controller, +1-614-418-8225, , both of M/I Homes,
Inc.
Web site: http://www.mihomes.com/