M/I Homes, Columbus, Ohio, (NYSE:MHO) on Thursday morning reported a net loss of $28.1 million ($-2.01 per share) for the first quarter ended March 31, including a charge of $11.0 million for asset impairments and a $4 million charge related to imported drywall. In comparison, the company lost $22.2 million (-$1.58 per share), including a $6.6 million income tax benefit, in last year's first quarter.
The loss from operations, however, was $11.9 million compared to $18.2 million in the comparable 2008 quarter.
Shares of M/I took off in early trading and were up more than 13% at $15.49 by mid afternoon Thursday as the bulk of the builder group was taking losses and Ryland (NYSE:RYL) was driven down 12.5% to $21.03 after reporting disappointing results after market close on Wednesday. M/I closed at $15.27, up 11.6%; Ryland closed at $20.71, down 13.8%, on nearly triple normal volume. The only other builder stocks to post gains Thursday were D.R. Horton (NYSE:DHI), up half a percent to $13.05, and Orleans (ALT) up four cents to $2.09.
Revenues were off 38.4% to $96.1 million as closings dropped 17% to 394. New orders, however, we up 20% from last year's first quarter to 667, the highest sales results for the past six quarters, the company said. The cancellation rate was 20%, down from 23% in the comparable quarter last year.
Backlog was up slightly, from 828 last year to 839, but the sales value of homes in backlog fell 21.5% to $193 million as the average price fell from $298,000 to $230,000.
The company said it had 119 active communities at quarter's end, down from148 at the same time last year. It's lot count was down 32.9% to 9,385,8,431 owned.
"We are, for the most part, pleased with our first quarter results," said Robert H. Schottenstein, CEO and president, in a prepared statement. "We sold 667 homes during the quarter, a 20% increase over last year, and we achieved this growth in sales despite our community count being down by 20%. "
He added, "For the first time since March 2006, our backlog units are up from the prior year."
M/I ended the quarter with $65.3 million in cash, up sharply from $13.2 million at the close of last year's first quarter, and no borrowings on its revolving credit facility. Additionally, M/I said it has no debt maturing before 2012. The net debt-to-capital ratio at quarter's end was 30%.
SG&A was down 32.5% to $21.1 million. Gross margin, though a negative$2.7 million, improved by 400 basis points from the fourth quarter of last year but still down sharply from $3.4 million in first quarter, 2008.
"We are focused on building on the momentum we have generated during the first quarter and are continuing to adapt our business to the ever-changing environment in which we operate," said Shottenstein. "Our recent announcements regarding the introduction of our new affordably priced 'eco series' homes and our commitment to building 100% Energy Star qualified homes in every one of our markets serve as prime examples of our ability to respond to the needs and wants of today¹s (and tomorrow¹s) homebuyers."
He continued, "Though we are starting to see some signs of improved market conditions, the general economy remains weak and we will therefore, continue to employ the conservative predominantly defensive operating strategy that has served us well during this prolonged downturn."
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