M/I Homes Reports 2017 Second Quarter Results

COLUMBUS, Ohio, July 26, 2017

2017 Second Quarter Highlights:

• Net income of $17.0 million ($0.55 per diluted share) which includes an $8.5 million pre-tax charge ($0.18 per diluted share) for stucco-related repairs
• Net income, excluding stucco-related charges, increased 27% to $22.4 million or $0.73 per diluted share
• Revenue increased 14% to a second quarter record $457 million
• Homes delivered increased 16% to a second quarter record 1,211
• New contracts increased 3% to 1,400, a record level for the second quarter
• Backlog sales value increased 8% to $909 million; backlog units increased 6% to 2,409

For the second quarter of 2017, the Company reported net income of $17.0 million, or $0.55 per diluted share.  This compares to net income of $15.9 million, or $0.52 per diluted share, for the second quarter of 2016.  The second quarter of 2017 includes an $8.5 million pre-tax charge ($0.18 per diluted share) for additional estimated future stucco-related repair costs in certain of our Florida communities.  The second quarter of 2016 included a charge of $2.8 million for such repairs.  For the six months ended June 30, 2017, the Company reported net income of $33.9 million, or $1.09 per diluted share, compared to net income of $25.1 million, or $0.81 per diluted share, for the same period of 2016.  Year-to-date in 2017 and 2016, the Company incurred $8.5 million of pre-tax charges ($0.18 per diluted share) and $4.9 million ($0.10 per diluted share), respectively, related to stucco-related repair charges. Exclusive of these charges in both periods, year-to-date net income is $39.3 million compared to $28.1 million in 2016's same period, a 40% increase.

Homes delivered in 2017's second quarter were 1,211 compared to 1,042 deliveries in 2016's second quarter - a 16% increase. Homes delivered for the six months ended June 30, 2017 increased 17% to 2,249 from 2016's deliveries of 1,918. New contracts for 2017's second quarter were 1,400, an increase of 3% over 2016's second quarter. For the first six months of 2017, new contracts increased 7% to 2,854 from 2,668 in 2016.  M/I Homes had 187 active communities at June 30, 2017 compared to 174 at June 30, 2016. The Company's cancellation rate was 13% in the second quarter of 2017 and 14% in 2016. Homes in backlog increased 6% at June 30, 2017 to 2,409 units, with a sales value of $909 million (an 8% increase over last year's second quarter), and an average sales price of $377,000. At June 30, 2016, the sales value of homes in backlog was $842 million, with an average sales price of $369,000 and backlog units of 2,281.

Robert H. Schottenstein, Chief Executive Officer and President, commented, "We reported another strong quarter highlighted by record second quarter new contracts, record second quarter homes delivered, and record second quarter revenue.  We also achieved significant improvement in our profitability with our pre-tax operating margin increasing 90 basis points from the first quarter of 2017 and 50 basis points year over year to 7.4%.  Excluding the stucco-related charges, net income improved by 27%."

Mr. Schottenstein continued, "2017 is shaping up to be a very good year for M/I Homes.  We have a strong backlog of $909 million and a growing number of planned new community openings. Housing market conditions are generally favorable throughout most of our markets and our financial condition remains strong with shareholders' equity of $693 million and homebuilding debt to capital of 46% and, as reported last week, we have extended the maturity date of our credit facility by four years and increased our borrowing availability to $475 million, giving us additional flexibility and capital for continued growth. We will continue to focus on increasing profitability, growing our market share, and investing in attractive land opportunities."

The Company will broadcast live its earnings conference call today at 4:00 p.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 continue to be available on our website through July 2018.