M/I Homes, Columbus, Ohio (NYSE:MHO) on Wednesday before market open reported a net loss of $4.8 million (-$0.26 per share) for the quarter ended June 30, compared to a net loss of $19.9 million (-$1.26 per share) during the second quarter of 2009. The loss included $6.5 million of asset impairments.
The loss missed analyst estimates of a loss of $0.14 per share. M/I shares were trading down 4.3% at $10.08 early in the session Wednesday.
Total revenue was up 69% to $196.4 million and home building revenues were up 71% as home closings increased 61% to 790 and the average closing price rose 6.5% to $245,000.
New orders fell 21% to 602, and the cancellation rate remained flat with last year's quarter at 16%.
Backlog at quarter's end was 748 homes worth an aggregate $200 million, down from 1,106 homes with a value of $260 million at the same time last year. The average sales price of homes in backlog rose 13.6% to $267,000.
The Company had 109 active communities at quarter's end compared to 106 at June 30, 2009 and 109 at the close of the last quarter. The company controlled 9,561 lots at the end of the quarter, 7,672 owned and 1,889 under contract, compared to 9,150, 7,732 owned and 1,418 under contract, at the end of the prior-year quarter.
Robert H. Schottenstein, CEO and president of M/I, addressed the falloff in new orders in his statement accompanying the earnings report. "We experienced a noticeable decline in our sales activity for May and June, resulting in a 21% decline in sales for the quarter," he said. "Prior to this quarter, we had posted six consecutive quarters of positive year-over-year sales comparisons. In addition to the expiration of the tax credit, we believe the reduction in sales is a reflection of the challenging and uncertain macro economic conditions, marked by weak consumer demand and lack of meaningful job growth."
Gross margin was $25 million, about 12.7% of revenue, compared to $7 million, or about 6.8%, in the prior year quarter. SG&A as a percentage of revenue fell to 14.1% ($27.7 million) from 22.4% ($26 million) in last year's second quarter.
M/I ended the quarter with $129 million of cash, no outstanding borrowings under its $140 million homebuilding credit facility, and a 26% net debt to capital ratio, flat with the same time last year. The company was carrying $205.6 million in long-term debt on its home building balance sheet and another $34 million in its financial services unit at quarter's end.
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