M/I Homes Reports Fourth Quarter and Year-End Results

COLUMBUS, Ohio, Feb. 2, 2017

2016 Fourth-Quarter Results:

• Net income of $20.6 million ($0.67 per diluted share), compared to 2015's $13.3 million ($0.43 per diluted share)
• Pre-tax income increased to $33.7 million from $22.9 million in 2015; 2016 includes $4.0 million of impairment charges and 2015 included $3.6 million of impairment charges and a $7.8 million debt extinguishment charge
• Revenue increased 12% to $523 million
• Homes delivered increased 13%
• New contracts increased 11%
• Backlog sales value increased 20% to $685 million; backlog units up 18%

2016 Full-Year Results:

• Pre-tax income of $91.8 million compared to $86.9 million in 2015
• Pre-tax income increased to $111.2 million from $94.8 million in 2015, exclusive of $19.4 million pre-tax charges for stucco-related repairs in 2016 and a $7.8 million debt extinguishment charge in 2015
• Net income of $56.6 million ($1.84 per diluted share)
• Net income, excluding the stucco-related charge in 2016 and debt extinguishment charge in 2015, increased 21% to $68.6 million or $2.24 per diluted share
• Record revenue of $1.7 billion, 19% better than 2015
• Record homes delivered of 4,482, 15% better than 2015
• Record new contracts of 4,755, 16% better than 2015
• Average home closing price increased 4% to $359,000

For the fourth quarter of 2016, the Company reported net income of $20.6 million, or $0.67 per diluted share. This compares to net income of $13.3 million, or $0.43 per diluted share in 2015.  The fourth quarter of 2015 included a $4.9 million after-tax charge ($0.16 per diluted share) for extinguishment of debt.  For the year ended December 31, 2016, the Company reported net income of $56.6 million or $1.84 per diluted share.  This includes the impact of $12.0 million of after-tax charges ($0.40 per diluted share) for stucco-related repair costs in certain of our Florida communities. Exclusive of these stucco-related charges and the $4.9 million after-tax debt extinguishment charge in 2015, net income increased 21% to $68.6 million compared to $56.6 million in 2015.

New contracts for 2016's fourth quarter reached a fourth quarter record-high of 999, increasing 11% from 2015's fourth quarter of 897.  For 2016, new contracts also reached a record-high of 4,755, a 16% increase over 2015's new contracts of 4,093.  M/I Homes had 178 active communities at December 31, 2016 compared to 175 a year ago. The Company's cancellation rate was 18% in 2016's fourth quarter. Homes delivered of 1,416 in 2016's fourth quarter were 13% higher than 2015's 1,253 homes delivered.  Homes delivered for the twelve months ended December 31, 2016 increased 15% to a record-high 4,482 from 2015's deliveries of 3,883. Homes in backlog increased 18% at December 31, 2016 to 1,804 units, with a sales value of $685 million (a 20% increase over last year), and the average sales price in backlog increased 2% to a record-high of $380,000.  At December 31, 2015, the sales value of the 1,531 homes in backlog was $569 million, with an average sales price of $372,000.

Robert H. Schottenstein, Chief Executive Officer and President, commented, "We are very pleased to report strong results for 2016, our 40^th year in business.  The year was highlighted by record new contracts, record homes delivered, record performance by our mortgage and title business, and a 21% increase in net income, excluding the charges for stucco repair and debt extinguishment.  Revenue increased 19% to a record $1.7 billion and we continued to improve our operating leverage with a 30 basis point reduction in our overhead expense ratio."

Mr. Schottenstein continued, "We are very excited about our business as we reflect on our strong results in 2016 and look for a continued healthy homebuilding environment in 2017. Our financial condition is strong with shareholders' equity of $654 million and homebuilding debt to capital of 43%.  With our strong year-end backlog and our planned new community openings for 2017, we are well positioned to continue our growth and improve profitability."