M/I Homes said on April 26 that it managed to eke out net income of $2.2 million ($0.16 per diluted share) for the first quarter of 2007 on $224.5 million in revenue, which was down 13.5% from the same period last year.
Included in 2007 first quarter results are after-tax charges totaling $2.1 million, or $0.15 per diluted share, for inventory impairment charges of $0.7 million, deposit and pre-acquisition cost write-offs of $0.6 million and $0.8 million of costs associated with workforce reductions.
New contracts and homes delivered during for the first quarter of 2007 were 942 and 704, respectively, compared to new contracts of 1,137 and homes delivered of 832 for the first quarter of 2006. Backlog of homes at March 31, 2007 had a sales value of $589 million, with an average sales price of $335,000 and backlog units of 1,761. Backlog of homes at March 31, 2006 had a sales value of $1.1 billion, with an average sales price of $346,000 and backlog units were 3,112. M/I Homes had 161 active communities at March 31, 2007 compared to 155 at March 31, 2006.
Robert H. Schottenstein, president and CEO, said, "Our first quarter results reflect the challenging conditions that we continue to face in most of our markets. Our gross margins declined to 21.2% from 27.3% and homes delivered declined 15% from a year ago. In addition, we incurred additional impairment, abandonment and severance charges. There were a number of positives during the quarter new contracts exceeded those written in the entire second half of last year, our cancellation rate declined to 25%, our Mid-Atlantic region experienced a 66% increase in new contracts, and we completed a $100 million preferred stock offering that strengthened our financial condition with shareholders' equity reaching $718 million."
Schottenstein continued, "We continue to estimate that we will deliver approximately 3,000 homes in 2007 and produce diluted earnings per share of $0.50 to $1.00, inclusive of the dilutive impact of our preferred stock issuance."