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M/I Homes Reports 2025 Second Quarter Results

1. M/I Homes reported record revenue of $1.2 billion in Q2 2025. 2. New contracts decreased 8% to 2,078; backlog sales value dropped 22%. 3. Net income fell to $121 million; earnings per share decreased to $4.42. 4. Company maintains strong balance sheet with $800 million in cash. 5. Cancellation rate rose to 13% from 10% in Q2 2024.

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FAQ

Why Bearish?

The decrease in new contracts and rise in cancellation rates suggest weakening demand, which historically leads to lower future earnings for homebuilders, as seen in previous market downturns.

How important is it?

Results indicate it's a challenging period for MHO, directly affecting stock performance due to declining financial metrics.

Why Short Term?

Current market trends suggest immediate negative impacts, as reduced new contracts could manifest in Q3 results, akin to previous cyclical low demand phases.

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, /PRNewswire/ -- M/I Homes, Inc. (NYSE:MHO) announced results for the three and six months ended June 30, 2025. 2025 Second Quarter Highlights: Record second quarter revenue and homes delivered Revenue increased 5% to $1.2 billion Homes delivered increased 6% to 2,348 Pre-tax income decreased 18% to $160 million, 14% of revenue Net income of $121 million ($4.42 per diluted share) versus $147 million ($5.12 per diluted share) Shareholders' equity reached a record $3.1 billion, a 12% increase from a year ago, book value per share of $117 New contracts were 2,078, compared to 2,255 in last year's second quarter, an 8% decrease Repurchased $50 million of common stock Return on equity of 17% The Company reported pre-tax income of $160.1 million and net income of $121.2 million ($4.42 per diluted share) for the second quarter of 2025. This compares to pre-tax income of $194.1 million and net income of $146.7 million, or $5.12 per diluted share, for the second quarter of 2024. For the six months ended June 30, 2025, the Company reported pre-tax income of $306.2 million and net income of $232.5 million, or $8.40 per diluted share, compared to $374.4 million and $284.8 million, or $9.90 per diluted share, for the same period of 2024, respectively. Homes delivered in 2025's second quarter increased 6% to 2,348 homes, a second quarter record. This compares to 2,224 homes delivered in 2024's second quarter. Homes delivered for the six months ended June 30, 2025 decreased 1% to 4,324 from deliveries of 4,382 for the six months ended June 30, 2024. New contracts were 2,078 for the second quarter of 2025, an 8% decrease compared to 2,255 in last year's second quarter. For the first half of 2025, new contracts were 4,370, a 9% decrease compared to 4,802 in the first half of 2024. Homes in backlog at June 30, 2025 had a total sales value of $1.43 billion, a 22% decrease from a year ago. Backlog units at June 30, 2025 decreased 25% to 2,577 homes, with an average sales price of $553,000. At June 30, 2024, backlog sales value was $1.82 billion, with backlog units of 3,422 and an average sales price of $533,000. M/I Homes had a record 234 communities at June 30, 2025 compared to 211 communities at June 30, 2024. The Company's cancellation rate was 13% in the second quarter of 2025 compared to 10% in the second quarter of 2024. Robert H. Schottenstein, Chief Executive Officer and President, commented, "We delivered solid second quarter results, despite continued challenging market conditions. Our results are highlighted by new second quarter records in revenue and homes delivered, strong gross margins of 25%, 14% pre-tax income and 17% return on equity." Mr. Schottenstein added, "Although market conditions remain choppy and challenging, we are confident in the underlying fundamentals of the housing industry and our ability to navigate through this uncertain environment. Our balance sheet remains very strong, with zero borrowings under our $650 million unsecured credit facility, a cash position of $800 million, homebuilding debt-to-capital of 18%, and a net debt-to-capital ratio of negative 3%. We continue to strategically invest in our operations and are on track to grow our average community count by approximately 5% this year." The Company will broadcast live its earnings conference call today at 10:30 A.M. Eastern Time. To listen to the call live, log on to the M/I Homes' website at mihomes.com, click on the "Investors" section of the site, and select "Listen to the Conference Call." A replay of the call will remain available on our website through July 2026. M/I Homes, Inc. is one of the nation's leading homebuilders of single-family homes. The Company has homebuilding operations in Columbus and Cincinnati, Ohio; Indianapolis, Indiana; Chicago, Illinois; Minneapolis/St. Paul, Minnesota; Detroit, Michigan; Tampa, Sarasota, Fort Myers/Naples and Orlando, Florida; Austin, Dallas/Fort Worth, Houston and San Antonio, Texas; Charlotte and Raleigh, North Carolina and Nashville, Tennessee. Certain statements in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "expects," "anticipates," "targets," "envisions," "goals," "projects," "intends," "plans," "believes," "seeks," "estimates," variations of such words and similar expressions are intended to identify such forward-looking statements. These statements involve a number of risks and uncertainties. Any forward-looking statements that we make herein and in any future reports and statements are not guarantees of future performance, and actual results may differ materially from those in such forward-looking statements as a result of various factors, including, without limitation, factors relating to the economic environment, interest rates, availability of resources, competition, market concentration, land development activities, construction defects, product liability and warranty claims and various governmental rules and regulations including changes in trade policy affecting business such as new or increased tariffs, as well as the potential impact of retaliatory tariffs and other penalties, as more fully discussed in the "Risk Factors" section of the Company's Annual Report on Form 10-K for the year ended December 31, 2024, as the same may be updated from time to time in our subsequent filings with the Securities and Exchange Commission.  All forward-looking statements made in this press release are made as of the date hereof, and the risk that actual results will differ materially from expectations expressed herein will increase with the passage of time. We undertake no duty to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. However, any further disclosures made on related subjects in our subsequent filings, releases or presentations should be consulted. M/I Homes, Inc. and Subsidiaries Summary Statement of Income (unaudited) (Dollars and shares in thousands, except per share amounts) Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 New contracts 2,078 2,255 4,370 4,802 Average community count 230 215 227 214 Cancellation rate 13 % 10 % 11 % 9 % Backlog units 2,577 3,422 2,577 3,422 Backlog sales value $  1,425,138 $  1,822,686 $  1,425,138 $  1,822,686 Homes delivered 2,348 2,224 4,324 4,382 Average home closing price $            479 $            482 $            477 $            477 Homebuilding revenue:    Housing revenue $  1,124,475 $  1,072,044 $  2,064,506 $  2,088,557    Land revenue 6,667 6,975 11,209 10,203 Total homebuilding revenue $  1,131,142 $  1,079,019 $  2,075,715 $  2,098,760 Financial services revenue 31,450 30,762 62,970 57,724 Total revenue $  1,162,592 $  1,109,781 $  2,138,685 $  2,156,484 Cost of sales - operations 875,973 800,501 1,599,283 1,563,861 Gross margin $    286,619 $    309,280 $    539,402 $    592,623 General and administrative expense 67,247 63,994 126,320 120,078 Selling expense 63,655 58,495 116,441 112,435 Operating income $   155,717 $    186,791 $   296,641 $    360,110 Interest income, net of interest expense (4,377) (7,348) (9,574) (14,268) Income before income taxes $   160,094 $    194,139 $   306,215 $   374,378 Provision for income taxes 38,851 47,393 73,735 89,571 Net income $   121,243 $    146,746 $   232,480 $   284,807 Earnings per share: Basic $         4.52 $         5.26 $         8.59 $       10.18 Diluted $         4.42 $         5.12 $         8.40 $         9.90 Weighted average shares outstanding: Basic 26,836 27,878 27,074 27,965 Diluted 27,406 28,668 27,673 28,777 M/I Homes, Inc. and Subsidiaries Summary Balance Sheet and Other Information (unaudited) (Dollars in thousands, except per share amounts) As of June 30, 2025 2024 Assets: Total cash, cash equivalents and restricted cash (1) $      800,398 $      837,458 Mortgage loans held for sale 280,867 227,254 Inventory: Lots, land and land development 1,683,930 1,467,961 Land held for sale 5,005 4,235 Homes under construction 1,403,582 1,306,650 Other inventory 194,089 159,618 Total Inventory $  3,286,606 $  2,938,464 Property and equipment - net 33,749 36,438 Investments in joint venture arrangements 67,466 46,180 Operating lease right-of-use assets 56,403 56,697 Goodwill 16,400 16,400 Deferred income tax asset 13,451 15,313 Other assets 184,699 165,866 Total Assets $  4,740,039 $  4,340,070 Liabilities: Debt - Homebuilding Operations: Senior notes due 2028 - net $     398,040 $     397,266 Senior notes due 2030 - net 297,621 297,117 Total Debt - Homebuilding Operations $     695,661 $     694,383 Notes payable bank - financial services operations 275,926 222,792 Total Debt $     971,587 $     917,175 Accounts payable 252,476 278,859 Operating lease liabilities 57,997 58,043 Other liabilities 375,843 344,876 Total Liabilities $  1,657,903 $  1,598,953 Shareholders' Equity 3,082,136 2,741,117 Total Liabilities and Shareholders' Equity $  4,740,039 $  4,340,070 Book value per common share $       117.01 $       100.03 Homebuilding debt to capital ratio (2) 18 % 20 % (1) Includes $0.2 million of restricted cash and cash held in escrow for both quarters ended June 30, 2025 and 2024. (2) The ratio of homebuilding debt to capital is calculated as the carrying value of our homebuilding debt outstanding divided by the sum of the carrying value of our homebuilding debt outstanding plus shareholders' equity. M/I Homes, Inc. and Subsidiaries Selected Supplemental Financial and Operating Data (unaudited) (Dollars in thousands) Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 Cash provided by operating activities $         37,755 $          27,511 $       102,642 $       143,283 Cash used in investing activities $        (12,318) $        (10,433) $        (15,246) $        (27,541) Cash used in by financing activities $          (1,417) $        (49,782) $      (108,568) $        (11,088) Land/lot purchases $       101,751 $       119,182 $       247,734 $       226,842 Land development spending $       139,008 $       144,539 $       240,607 $       263,906 Land sale revenue $           6,667 $           6,975 $         11,209 $         10,203 Land sale gross profit $           3,202 $           1,933 $           3,988 $           3,246 Financial services pre-tax income $         14,476 $         14,400 $         30,582 $         26,712 M/I Homes, Inc. and Subsidiaries Non-GAAP Financial Results (1) (Dollars in thousands) Three Months Ended Six Months Ended June 30, June 30, 2025 2024 2025 2024 Net income $       121,243 $       146,746 $       232,480 $       284,807 Add: Provision for income taxes 38,851 47,393 73,735 89,571 Interest income - net (7,726) (10,686) (15,767) (20,453) Interest amortized to cost of sales 8,227 7,938 15,128 16,240 Depreciation and amortization 4,904 4,607 9,681 9,074 Non-cash charges 3,916 3,810 8,116 7,349 Adjusted EBITDA $       169,415 $       199,808 $       323,373 $       386,588 (1) We believe these non-GAAP financial measures are relevant and useful to investors in understanding our operations and may be helpful in comparing us with other companies in the homebuilding industry to the extent they provide similar information. These non-GAAP financial measures should be used to supplement our GAAP results in order to provide a greater understanding of the factors and trends affecting our operations. M/I Homes, Inc. and Subsidiaries Selected Supplemental Financial and Operating Data NEW CONTRACTS Three Months Ended Six Months Ended June 30, June 30, % % Region 2025 2024 Change 2025 2024 Change Northern 873 1,002 (13) % 1,938 2,164 (10) % Southern 1,205 1,253 (4) % 2,432 2,638 (8) % Total 2,078 2,255 (8) % 4,370 4,802 (9) % HOMES DELIVERED Three Months Ended Six Months Ended June 30, June 30, % % Region 2025 2024 Change 2025 2024 Change Northern 967 951 2 % 1,793 1,794 — % Southern 1,381 1,273 8 % 2,531 2,588 (2) % Total 2,348 2,224 6 % 4,324 4,382 (1) % BACKLOG June 30, 2025 June 30, 2024 Dollars Average Dollars Average Region Units (millions) Sales Price Units (millions) Sales Price Northern 1,281 $            721 $    563,000 1,618 $           853 $   527,000 Southern 1,296 $            704 $    543,000 1,804 $           970 $   538,000 Total 2,577 $        1,425 $    553,000 3,422 $        1,823 $   533,000 LAND POSITION SUMMARY June 30, 2025 June 30, 2024 Lots Lots Under Lots Lots Under Region Owned Contract Total Owned Contract Total Northern 7,104 8,710 15,814 6,784 10,250 17,034 Southern 17,403 17,247 34,650 16,520 15,898 32,418 Total 24,507 25,957 50,464 23,304 26,148 49,452 SOURCE M/I Homes, Inc. 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