M/I Homes, 2014's 14th largest builder on the Builder 100 reported fourth quarter earnings today that produced higher-than-expected home building revenue, but lower-than-expected gross margins, according to J.P. Morgan's Michael Rehaut.
The highlights included:
• Pre-tax income increased 55% to $30.7 million, excluding a $7.8 million charge related to
extinguishment of debt;
• Net income increased to $13.3 million ($0.43 per diluted share; $0.59 per diluted share excluding debt extinguishment);
• Revenue increased 27% to $468.9 million; homes delivered increased 13%;
• Average home closing price increased 12% to $360,000;
• New contracts increased 16%; year-end community count increased 17%;
• Backlog sales value increased 34% to $569 million; backlog units up 25%
Rehaut specifically pointed to strong order growth in his note: "Orders rose 16%, slightly above our 14% estimate. By component, sales pace (absorption) rose 1%, in-line with our estimate, while average community count rose 15%, slightly above our 14% estimate. By region, the Midwest, Southern and Mid-Atlantic regions rose 35%, 10%, and 5%, respectively. Lastly, cancellation rate rose to 18% from 16% last quarter, but fell slightly from last year’s 19%."