Fri, Apr 25, 2:14 PM (27 days ago)
**M/I Homes, Inc. (MHO) Q1 2025 Financial Performance Summary** **Financial Health & Performance:** - **Revenue:** $976.1 million, down 7% YoY due to an 8% decrease in homes delivered, partially offset by a 1% increase in average sales price. - **Net Income:** $111.2 million, a 19% decrease YoY, reflecting lower gross margins and increased operating expenses. - **Earnings per Share (EPS):** $3.98 diluted, down from $4.78 in Q1 2024. - **Gross Margin:** 25.9%, a 120 basis points decrease YoY, impacted by sales incentives and interest rate buydowns. - **Cash Flow:** $64.9 million from operating activities, down from $115.8 million in Q1 2024, primarily due to higher inventory purchases and changes in working capital. **Segment Performance:** - **Northern Homebuilding:** Revenue increased slightly to $410.4 million, with a 2.5% increase in operating income. - **Southern Homebuilding:** Revenue decreased by 13% to $534.2 million, with a 37.4% decrease in operating income. - **Financial Services:** Revenue increased by 17% to $31.5 million, with a $3.6 million increase in operating income. **Operational Metrics:** - **New Contracts:** 2,292, a 10% decrease YoY. - **Homes Delivered:** 1,976, an 8% decrease YoY. - **Average Sales Price:** $476,000, a 1% increase YoY. - **Backlog:** 2,847 homes, with an average sales price of $548,000. **Liquidity & Capital Resources:** - **Cash Position:** $776.4 million, a $45.3 million decrease from Q4 2024. - **Debt:** $928.0 million in notes payable, with $228.0 million payable within 12 months. - **Credit Facilities:** $580.6 million available under the Credit Facility, with no borrowings outstanding. **Outlook & Uncertainties:** - **Market Conditions:** Challenging macroeconomic environment with elevated mortgage rates and geopolitical uncertainties. - **Strategic Focus:** Emphasis on sales incentives, land spend management, construction cycle times, and maintaining a strong balance sheet. - **Future Operations:** Expect continued soft market conditions, with a focus on controlling overhead and managing land investments. **Future Operations Impact:** - **Land Investments:** $146.0 million in land acquisitions and $101.6 million in land development in Q1 2025. - **Community Development:** 27 new communities opened, with plans to increase the average community count by about 5% in 2025. - **Share Repurchase:** $50.1 million spent on share repurchases in Q1 2025, with $199.9 million remaining under the 2025 Share Repurchase Program. **Trends & Uncertainties:** - **Economic Factors:** Inflation and interest rates continue to impact housing affordability and consumer confidence. - **Market Risks:** Exposure to interest rate fluctuations through borrowings and mortgage loan origination services. - **Strategic Adaptations:** Focus on interest rate buydowns and other incentives to spur demand amidst challenging market conditions. **Conclusion:** M/I Homes, Inc. navigated a challenging Q1 2025, facing macroeconomic headwinds and market uncertainties. The company's strategic focus on managing land investments, controlling overhead, and offering sales incentives aims to mitigate these challenges. Despite the current soft market conditions, M/I Homes remains optimistic about its long-term prospects, leveraging its strong balance sheet and liquidity to manage through uncertain times.