M/I Homes, Columbus, Ohio (NYSE:MHO) on Monday reported a net loss of $2.1 million (-$0.11 per share) for the third quarter ended Sept. 30 as home building revenue fell 11.2% to $132 million on fewer closings. The loss, which included impairments of $1.9 million offset by a $2.4 million recovery related to Chinese drywall, compared to a net loss of $21.1 million (-$1.14 per share) during last year's third quarter.

Analysts were expecting a loss of 21 cents per share. Shares of M/I were up as much as 7.1% before settling back to a gain of 3.75% to $11.06 at market close Monday.

Closings fell 23% to 515 during the quarter, but the average closing price increased 14.7% to $257,000. New orders fell 21% from last year's quarter to 489. The cancellation rate crept up to 22% from 20% at the same time last year. Community count was 108, up from 105 at the close of last year's quarter but down one from 109 at the close of the second quarter of 2010.

Backlog at quarter's end was down 31.8% to 722 with a sales value of $188 million, down 28.5%. The average sales price or homes in backlog, however, increased to $261,000.

The company has 9,657 lots owned or under option (7,808 and 1,849respectively) at quarter's end, up slightly from 9,250 (7,300 and 1,950) at the same time last year.

The company reported an operating gross margin of 18.1%. SG&A fell to$24.9 million from $26 million in the prior year quarter.

The company ended the quarter with $92 million in cash, down from $102.8 million at the close of last year'sh, and home building debt of $205.5 million, flat with the same time last year. M/I's net debt-to-capital ratio was 30%.

"Housing conditions continued to be challenging during our third quarter,"said Robert H. Schottenstein, president and CEO. "Despite these conditions and our decline in volume, we were pleased that our third quarter operating gross margin of 18.1% reached its highest level in three years, and improved by more than 200 basis points from the second quarter¹s 16.0 %. Our selling, general and administrative expenses declined compared to the prior year quarter and our net loss improved to $2 million from a loss of $21 million a year ago. We also achieved our fifth consecutive quarter of positive EBITDA."

Learn more about markets featured in this article: Columbus, OH.