MI HOMES INC
For the period ended Jun 30, 2024. Filed Jul 31, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Jul 31, 2024
MHO$131.60-2.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-04-26.
0000799292-24-000039
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-07-31.
0000799292-24-000070
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 126 previous paragraphs and 143 current paragraphs.
67 unchanged; 49 reworded; 23 added; 10 removed; 0 previous and 4 current paragraphs rearranged.
Tables are not compared: 12 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (23)
Current report
•Revenue increased 9% to $1.11 billion (a second quarter record) and 7% to $2.16 billion (a year-to-date record), respectively;
Current report
•Number of homes delivered increased 12% to 2,224 homes (our second highest level for the second quarter) and increased 10% to 4,382 homes (a year-to-date record), respectively;
Current report
•Gross margins improved 240 basis points to 27.9% (an all-time quarterly record) and 300 basis points to 27.5%, respectively;
Current report
•Income before income taxes increased 25% to $194.1 million (an all-time quarterly record) and 29% to $374.4 million (an all-time year-to-date record), respectively;
Current report
•Income before income taxes as a percentage of revenue increased by 220 basis points to 17.5% (an all-time quarterly record) and 290 basis points to 17.4% (an all-time year-to-date record), respectively;
Current report
•Net income increased 24% to $146.7 million (an all-time quarterly record) and 29% to $284.8 million (an all-time year-to-date record), respectively;
Current report
•New contracts increased 3% to 2,255 from 2,197 and 10% to 4,802 from 4,368 (second highest year-to-date level in Company history), respectively;
Current report
Income before income taxes for the second quarter of 2024 increased 25% from $155.4 million in the second quarter of 2023 to an all-time quarterly record $194.1 million in 2024. We also achieved all-time quarterly record net income of $146.7 million, or $5.12 per diluted share, in 2024's second quarter, compared to net income of $118.0 million, or $4.12 per diluted share, in 2023's second quarter. Our effective tax rate was 24.4% in 2024’s second quarter compared to 24.0% in 2023. Income before income taxes increased from $291.3 million in the first half of 2023 to $374.4 million in the first half of 2024, an all-time year-to-date record. We achieved all-time year-to-date record net income of $284.8 million, or $9.90 per diluted share, during 2024's first half compared to net income of $221.1 million, or $7.77 per diluted share, in the six months ended June 30, 2023. Our effective tax rate was 23.9% in 2024's first half compared to 24.1% in the same period in 2023.
Current report
•continued focus on cycle times;
Current report
Selling, general and administrative expense increased $4.5 million, from $29.6 million for the quarter ended June 30, 2023 to $34.1 million for the quarter ended June 30, 2024 but improved as a percentage of revenue to 7.3% in 2024's second quarter from 7.7% in 2023's second quarter. The increase in selling, general and administrative expense was attributable to a $3.3 million increase in selling expense primarily due to a $3.0 million increase in variable selling expenses resulting from increases in sales commissions produced by the higher number of homes delivered as well as a $0.3 million increase in non-variable selling expense primarily as a result of increased costs associated with our sales offices and models. This increase in selling, general and administrative expense was also attributable to a $1.2 million increase in general and administrative expense, which was primarily related to a $0.7 million increase in compensation-related expenses and $0.5 million increase in land related expenses.
Current report
During the three months ended June 30, 2024, we experienced a 6% increase in new contracts in our Northern region, from 949 in the second quarter of 2023 to 1,002 in the second quarter of 2024. Homes in backlog increased 29% from 1,253 homes at
Current report
June 30, 2023 to 1,618 homes at June 30, 2024. The increases in new contracts and backlog were primarily a result of improved demand compared to prior year. Average sales price in backlog increased to $527,000 at June 30, 2024 compared to $504,000 at June 30, 2023 primarily due to the mix of homes being sold. During the second quarter of 2024, we opened three new communities in our Northern region compared to nine during the second quarter of 2023. The decrease was a result of delays in approvals for entitlements and permits, and longer development timelines, all of which delayed community openings during the period. Our monthly absorption rate in our Northern region improved to 3.5 per community in the second quarter of 2024 compared to 3.1 per community in 2023's second quarter due to increased availability of and demand for inventory homes.
Current report
Selling, general and administrative expense increased $5.3 million from $46.5 million in the second quarter of 2023 to $51.8 million in the second quarter of 2024 and increased as a percentage of revenue to 8.4% from 7.7% in the second quarter of 2023. The increase in selling, general and administrative expense was attributable to a $2.9 million increase in selling expense primarily due to a $0.8 million increase in variable selling expenses resulting from increases in sales commissions produced by the higher number of homes delivered as well as a $2.1 million increase in non-variable selling expense primarily as a result of increased costs associated with our sales offices and models due to our increased community count. This increase in selling, general and administrative expense was also attributable to a $2.4 million increase in general and administrative expense, which was due to a $1.9 million increase in compensation-related expenses, a $0.2 million increase in land-related expenses, and a $0.3 million increase in miscellaneous expenses.
Current report
Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023
Current report
Northern Region. During the first half of 2024, homebuilding revenue in our Northern region increased $106.7 million, from $766.6 million in the first six months of 2023 to $873.3 million in the first six months of 2024. This 14% increase in homebuilding revenue was primarily the result of a 14% increase in the number of homes delivered (214 more units) due to the mix of homes delivered, in addition to a $0.7 million increase in land sale revenue and a slight increase in the average sales price of homes delivered ($1,000 per home delivered). Operating income in our Northern region increased $44.9 million, from $86.0 million during the first half of 2023 to $130.9 million during the six months ended June 30, 2024. The increase in operating income was primarily the result of a $52.8 million increase in our gross margin offset partially by a $7.9 million increase in selling, general and administrative expense. With respect to our homebuilding gross margin, our housing gross margin improved $52.3 million, and our housing gross margin percentage improved 370 basis points from 18.7% in the first six months of 2023 to 22.4% for the same period in 2024, primarily due to the mix of homes being delivered in addition to the increase in the number of homes delivered. Our land sale gross margin improved $0.5 million in the first half of 2024 compared to the same period in 2023 as a result of the mix of lots sold in the current year compared to the prior year.
Current report
Selling, general and administrative expense increased $7.9 million, from $57.0 million for the six months ended June 30, 2023 to $64.9 million for the six months ended June 30, 2024, but remained flat as a percentage of revenue at 7.4% for both periods. The increase in selling, general and administrative expense was attributable to a $6.2 million increase in selling expense, primarily attributable to a $5.5 million increase in variable selling expenses resulting from increases in sales commissions produced by the higher number of homes delivered and an $0.7 million increase in costs associated with our sales offices and models. The increase in selling, general and administrative expense was also attributable to a $1.7 million increase in general and administrative expense, which was primarily related to a $1.0 million increase in compensation-related expenses and $0.7 million increase in other miscellaneous expenses.
Current report
During the six months ended June 30, 2024, we experienced a 22% increase in new contracts in our Northern region, from 1,777 in the six months ended June 30, 2023 to 2,164 in the first half of 2024. Homes in backlog increased 29% from 1,253 at June 30, 2023 to 1,618 homes at June 30, 2024. The increase in new contracts and homes in backlog was primarily due to improved demand. Average sales price in backlog increased to $527,000 at June 30, 2024 compared to $504,000 at June 30, 2023 primarily due to the mix of homes being sold. During the six months ended June 30, 2024, we opened 10 new communities in our Northern region compared to 20 new communities opened during the first half of 2023. The decrease was a result of delays in approvals for entitlements and permits, and longer development timelines, all of which delayed community openings during the period. Our monthly absorption rate in our Northern region improved to 3.7 per community in the six months ended June 30, 2024 from 2.9 per community in the same period in 2023 as a result of increased availability of and demand for inventory homes.
Current report
Southern Region. During the six months ended June 30, 2024, homebuilding revenue in our Southern region increased $28.1 million from $1.20 billion in the first half of 2023 to $1.23 billion in the first half of 2024. This 2% increase in homebuilding revenue was the result of a 7% increase in the number of homes delivered (171 more units) due to increased availability of inventory homes and improved construction cycle times on our backlog homes and a $0.7 million increase in land sale revenue, offset partially by a 4% decrease in the average sales price of homes delivered ($22,000 per home delivered) primarily due to the mix of homes delivered. Operating income in our Southern region increased 14% from $207.5 million in the first half of 2023 to $237.6 million during the six months ended June 30, 2024. This increase in operating income was the result of a $39.9 million improvement in our gross margin, offset partially by a $9.8 million increase in selling, general, and administrative expense. With respect to our homebuilding gross margin, our gross margin on homes delivered improved $38.0 million, due primarily to the increase in the number of homes delivered during the period as well as due to the mix of homes delivered, offset partially by the decrease in average sale price of homes delivered. Our housing gross margin percentage improved 260 basis points from 25.1% in the six months ended June 30, 2023 to 27.7% in the same period in 2024 primarily due to mix, offset partially by the decrease in average sales price of homes delivered compared to prior year. Our land sale gross margin improved $1.9 million in the first half of 2024 compared to the same period in 2023 as a result of the mix of lots sold in the current year compared to the prior year.
Current report
Selling, general and administrative expense increased $9.8 million from $91.8 million in the first half of 2023 to $101.6 million in the first half of 2024 and increased as a percentage of revenue to 8.3% compared to 7.7% in 2023’s same period. The increase in selling, general and administrative expense was attributable to a $4.8 million increase in selling expense primarily due to a $2.2 million increase in variable selling expenses resulting from increases in sales commissions produced by the higher number of homes delivered and a $2.6 million increase in non-variable selling expenses primarily related to costs associated with our sales offices and models due to our increased community count. The increase in selling, general and administrative expense was also attributable to a $5.0 million increase in general and administrative expense, which was primarily related to a $3.3 million increase in compensation-related expenses due to our strong financial performance during the period, a $0.9 million increase in land-related expenses, and a $0.8 million increase in other miscellaneous expenses.
Current report
During the six months ended June 30, 2024, we experienced a 2% increase in new contracts in our Southern region, from 2,591 in the six months ended June 30, 2023 to 2,638 in the first half of 2024 primarily due to the increase in our average number of communities compared to prior year. Homes in backlog decreased 20% from 2,255 homes at June 30, 2023 to 1,804 homes at June 30, 2024 due primarily to improved construction cycle times allowing us to deliver homes in backlog at a faster rate compared to last year in addition to increased availability of inventory homes compared to prior year. Average sales price in backlog increased from $509,000 at June 30, 2023 to $538,000 at June 30, 2024 primarily due to the mix of homes delivered. During the six months ended June 30, 2024, we opened 28 communities in our Southern region, compared to opening 14 during the first half of 2023. Our monthly absorption rate in our Southern region declined to 3.8 per community in the first half of 2024 from 4.5 per community in the first half of 2023 as a result of the limited lot supply in the increased number of our communities in closeout status.
Current report
Financial Services. Revenue from our mortgage and title operations increased 14% from $50.5 million in the first half of 2023 to $57.7 million in the first half of 2024 due to higher margins on loans sold during the period compared to 2023's first half, proceeds from the sale of mortgage servicing rights, and a 25% increase in the number of loan originations from 2,539 in the first half of 2023 to 3,174 in the first half of 2024, offset partially by a decrease in the average loan amount from $398,000 in the six months ended June 30, 2023 to $391,000 in the six months ended June 30, 2024.
Current report
Our financial services segment experienced a $4.4 million increase in operating income in the first half of 2024 compared to the same period in 2023, which was primarily due to the increase in revenue discussed above, partially offset by a $2.8 million increase in selling, general and administrative expense compared to the first half of 2023. The increase in selling, general and administrative expense was primarily attributable to a $1.7 million increase in compensation related expenses, a $0.5 million increase in indemnification reserves during the period, and a $0.6 million increase in other miscellaneous expenses.
Current report
Corporate Selling, General and Administrative Expense. Corporate selling, general and administrative expense increased $4.4 million from $37.0 million for the six months ended June 30, 2023 to $41.4 million for the six months ended June 30, 2024, primarily due to a $2.3 million increase in compensation-related expenses, a $0.8 million increase in computer-related costs, a $0.8 million increase in advertising expenses, and a $0.5 million increase in miscellaneous expenses incurred during the period.
Removed paragraphs (10)
Previous report
•Revenue increased 5% to $1.05 billion (a first quarter record)
Previous report
•Number of homes delivered increased 8% to 2,158 homes (a first quarter record);
Previous report
•Income before income taxes increased 33% to $180.2 million (a first quarter record);
Previous report
•Net income increased 34% to $138.1 million (a first quarter record);
Previous report
•New contracts increased 17% to 2,547 from 2,171 (second highest first quarter in Company history);
Previous report
Income before income taxes for the first quarter of 2024 increased 33% from $136.0 million in the first quarter of 2023 to a first quarter record $180.2 million in 2024. We achieved first quarter record net income of $138.1 million, or $4.78 per diluted share, in 2024's first quarter, compared to net income of $103.1 million, or $3.64 per diluted share, in 2023's first quarter. Our effective tax rate was 23.4% in 2024’s first quarter compared to 24.2% in 2023.
Previous report
•improving our construction cycle times;
Previous report
Selling, general and administrative expense increased $3.4 million, from $27.3 million for the quarter ended March 31, 2023 to $30.7 million for the quarter ended March 31, 2024 and increased as a percentage of revenue to 7.5% in 2024's first quarter from 7.1% in 2023's first quarter. The increase in selling, general and administrative expense was attributable to a $2.9 million increase in selling expense primarily due to a $2.6 million increase in variable selling expenses resulting from increases in sales commissions produced by the higher number of homes delivered as well as a $0.3 million increase in non-variable selling expense primarily as a result of increased costs associated with our sales offices and models due to our increase in community count compared to prior year. This increase in selling, general and administrative expense was also attributable to a $0.5 million increase in general and administrative expense, which was primarily related to an increase in compensation-related expenses.
Previous report
During the three months ended March 31, 2024, we experienced a 40% increase in new contracts in our Northern region, from 828 in the first quarter of 2023 to 1,162 in the first quarter of 2024. The increase in new contracts was primarily due to the increase in overall demand compared to prior year. Homes in backlog increased 44% from 1,087 homes at March 31, 2023 to 1,567 homes at March 31, 2024. The increase in backlog was primarily a result of improved demand compared to prior year. Average sales price in backlog increased to $525,000 at March 31, 2024 compared to $515,000 at March 31, 2023 primarily due to the mix of homes being sold. During the first quarter of 2024, we opened seven new communities in our Northern region compared to 11 during the first quarter of 2023. Our monthly absorption rate in our Northern region improved to 3.8 per community in the first quarter of 2024 compared to 2.7 per community in 2023's first quarter due to the increase in new contracts during the quarter, partially offset by a smaller increase in our average communities compared to prior year.
Previous report
Selling, general and administrative expense increased $4.5 million from $45.2 million in the first quarter of 2023 to $49.7 million in the first quarter of 2024 and increased as a percentage of revenue to 8.1% from 7.6% in the first quarter of 2023. The increase in selling, general and administrative expense was attributable to a $2.0 million increase in selling expense primarily due to a $1.3 million increase in variable selling expenses resulting from increases in sales commissions produced by the higher number of homes delivered as well as a $0.7 million increase in non-variable selling expense primarily as a result of increased costs associated with our sales offices and models due to our increased community count. This increase in selling, general and administrative expense was also attributable to a $2.5 million increase in general and administrative expense, which was due to a $1.4 million increase in compensation-related expenses, a $0.8 million increase in land-related expenses, and a $0.3 million increase in professional fees.
Reworded paragraphs (49)
Previous wording
M/I Homes, Inc. and subsidiaries (the “Company” or “we”) is one of the nation’s leading builders of single-family homes having sold over 153,900 homes since commencing homebuilding activities in 1976. The Company’s homes are marketed and sold primarily under the M/I Homes brand. The Company has homebuilding operations in Columbus and Cincinnati, Ohio; Indianapolis, Indiana; Chicago, Illinois; Minneapolis/St. Paul, Minnesota; Detroit, Michigan; Ft. Myers/Naples, Tampa, Sarasota and Orlando, Florida; Austin, Dallas/Fort Worth, Houston and San Antonio, Texas; Charlotte and Raleigh, North Carolina; and Nashville, Tennessee.
Current wording
M/I Homes, Inc. and subsidiaries (the “Company” or “we”) is one of the nation’s leading builders of single-family homes having sold over 156,200 homes since commencing homebuilding activities in 1976. The Company’s homes are marketed and sold primarily under the M/I Homes brand. The Company has homebuilding operations in Columbus and Cincinnati, Ohio; Indianapolis, Indiana; Chicago, Illinois; Minneapolis/St. Paul, Minnesota; Detroit, Michigan; Ft. Myers/Naples, Tampa, Sarasota and Orlando, Florida; Austin, Dallas/Fort Worth, Houston and San Antonio, Texas; Charlotte and Raleigh, North Carolina; and Nashville, Tennessee.
Previous wording
For the quarter ended March 31, 2024, we achieved first quarter record levels of homes delivered and revenue, while also improving our gross margin by 360 basis points to 27% when compared to 2023’s first quarter, leading us to first quarter records in income before income taxes, net income and diluted earnings per share. In addition, while not a record, our new contracts for the first quarter of 2024 increased 17% compared to the first quarter of 2023 as we experienced improvements in homebuyer demand as a result of the limited supply of resale and new home inventory and potential homebuyers adjusting to the interest rate environment compared to the hesitation that appeared to exist in 2023’s first quarter. We also had strong cash flow and liquidity and ended the quarter with low leverage.
Current wording
We generated strong results during the first half of 2024. For the quarter ended June 30, 2024, we achieved all-time quarterly records in gross margin, income before income taxes, net income and diluted earnings per share and a second quarter record for revenue. In addition, our homes delivered increased 12% and our new contracts for the second quarter of 2024 increased 3% compared to the second quarter of 2023. Our performance reflects favorable demographic trends and rising household formations, which led to improvements in homebuyer demand, despite elevated and volatile mortgage interest rates that continued to challenge housing affordability. Homebuyers continued to demonstrate a strong desire for homeownership in an environment that was also impacted by an undersupply of new and resale homes. We also had strong cash flow and ended the quarter with ample liquidity and low leverage.
Previous wording
We achieved the following results during the first quarter of 2024 in comparison to the first quarter of 2023:
Current wording
We achieved the following results during the second quarter and first half of 2024 in comparison to the second quarter and first half of 2023:
Previous wording
•Shareholders’ equity of $2.64 billion (a record high for the Company);
Current wording
•Shareholders’ equity of $2.74 billion (a record high);
Previous wording
•Book value per common share increased to a record high $95 per share; and
Current wording
•Book value per common share increased to a record high $100 per share; and
Previous wording
•Homebuilding debt to capital ratio was 21%.
Current wording
•Homebuilding debt to capital ratio was 20%.
Previous wording
In addition to the results described above, our financial services operations also achieved strong income before income taxes for the first quarter of 2024, benefiting from higher margins and an increase in loans originated.
Current wording
In addition to the results described above, our financial services operations also achieved all-time record quarterly revenues and strong income before income taxes for the first half of 2024, benefiting from higher margins and an increase in loans originated.
Previous wording
Our company-wide absorption pace of sales per community for the first quarter of 2024 improved to 3.9 per month compared to 3.7 per month for the prior year’s first quarter as a result of the 17% increase in the number of new contracts during the quarter compared to prior year, partially offset by a smaller 9% increase in our average community count to 216 for the first quarter of 2024 from 198 for the first quarter of 2023. We plan to open additional new communities during 2024 and increase our average community count by approximately 10% from 2023.
Current wording
Our company-wide absorption pace of sales per community for the second quarter of 2024 declined slightly to 3.5 per month compared to 3.7 per month for the prior year’s second quarter as a result of the limited lot supply in the increased number of our communities in closeout status. We plan to open additional new communities during 2024 and increase our average community count by approximately 5% from 2023.
Previous wording
During the quarter ended March 31, 2024, we achieved record first quarter total revenue of $1.05 billion, of which $1.02 billion was from homes delivered, $3.2 million was from land sales and $27.0 million was from our financial services operations. Revenue from homes delivered increased 4% in 2024's first quarter compared to the same period in 2023 driven primarily by an 8% increase in the number of homes delivered (151 units), offset partially by a 3% decrease in the average sales price of homes delivered ($15,000 per home delivered). Revenue from land sales increased $2.9 million from the first quarter of 2023 due to more land sales in the current year compared to the prior year. Revenue from our financial services segment increased 7% to $27.0 million in the first quarter of 2024 as a result of higher margins on and an increase in loans sold during the period compared to the first quarter of 2023, partially offset by a decrease in the average loan amount.
Current wording
During the quarter ended June 30, 2024, we achieved record second quarter total revenue of $1.11 billion, of which $1.07 billion was from homes delivered, $7.0 million was from land sales and $30.8 million was from our financial services operations. Revenue from homes delivered increased 9% in 2024's second quarter compared to the same period in 2023 driven primarily by a 12% increase in the number of homes delivered (234 units), offset partially by a 2% decrease in the average sales price of homes delivered ($11,000 per home delivered). Revenue from land sales decreased $1.6 million from the second quarter of 2023 due to fewer land sales in the current year compared to the prior year. Revenue from our financial services segment increased 22% to an all-time quarterly record $30.8 million in the second quarter of 2024 as a result of higher margins on and an increase in loans sold during the period compared to the second quarter of 2023, partially offset by a decrease in the average loan amount. For the first half of 2024, we recorded year-to-date record total revenue of $2.16 billion, of which $2.09 billion was from homes delivered, $10.2 million was from land sales and $57.7 million was from our financial services operations. Revenue from homes delivered increased 7% in the first half of 2024 compared to the same period in 2023 driven primarily by a 10% increase in the number of homes delivered (385 units), partially offset by a 2% decrease in the average sales price of homes delivered ($12,000 per home delivered). Revenue from land sales increased $1.4 million from the six months ended June 30, 2023 due to increased land sales in 2024's first six months compared to the prior year. Revenue from our financial services segment increased 14% to $57.7 million in the first half of 2024 as a result of higher margins on loans sold during the period compared to the first half of 2023 and an increase in loans sold during the period, partially offset by a decrease in the average loan amount compared to the first half of 2023.
Previous wording
Total gross margin (total revenue less total land and housing costs) increased $48.7 million in the first quarter of 2024 compared to the first quarter of 2023 as a result of a $47.0 million improvement in the gross margin of our homebuilding operations (housing gross margin and land sales gross margin) and a $1.7 million increase in the gross margin of our financial services operations. With respect to our homebuilding gross margin, our gross margin on homes delivered (housing gross margin) improved $45.7 million and our housing gross margin percentage improved by 360 basis points to 25.1% from 21.5%. The improvement in both gross margin and gross margin percentage primarily resulted from the 8% increase in homes delivered and a decrease in construction costs. Our housing gross margin may fluctuate from quarter to quarter depending on the mix of communities delivering homes due to the variation in margin between different communities. Our gross margin on land sales (land sale gross margin) increased $1.3 million in the first quarter of 2024 compared to the first quarter of 2023 as a result of the mix of lots sold in the current year compared to the prior year. The gross margin of our financial services operations increased $1.7 million in the first quarter of 2024 compared to the first quarter of 2023 as a result of higher margins on and an increased number of loans sold, and an increase in the number of loan originations, offset partially by a decrease in the average loan amount during the first quarter of 2024 compared to the first quarter of 2023.
Current wording
Total gross margin (total revenue less total land and housing costs) increased $51.1 million in the second quarter of 2024 compared to the second quarter of 2023 as a result of a $45.6 million improvement in the gross margin of our homebuilding operations (housing gross margin and land sales gross margin) and a $5.5 million increase in the gross margin of our financial services operations. With respect to our homebuilding gross margin, our gross margin on homes delivered (housing gross margin) improved $44.6 million and our housing gross margin percentage improved by 210 basis points to 25.8% from 23.7%. The improvement in gross margin primarily resulted from the 12% increase in homes delivered, and our improvement in gross margin percentage was primarily due to the mix of homes being delivered. Our housing gross margin may fluctuate from quarter to quarter depending on the mix of communities delivering homes due to the variation in margin between different communities. Our gross margin on land sales (land sale gross margin) increased $1.0 million in the second quarter of 2024 compared to the second quarter of 2023 as a result of the mix of lots sold in the current year compared to the prior year. The gross margin of our financial services operations increased $5.5 million in the second quarter of 2024 compared to the second quarter of 2023 as a result of higher margins on and an increased number of loans sold, and an increase in the number of loan originations, offset partially by a decrease in the average loan amount during the second quarter of 2024 compared to the second quarter of 2023. Total gross margin increased $99.8 million in the first half of 2024 compared to the same period in 2023 as a result of a $92.7 million improvement in the gross margin of our homebuilding operations in addition to a $7.1 million improvement in the gross margin of our financial services operations. With respect to our homebuilding gross margin, our gross margin on homes delivered improved $90.3 million and our housing gross margin percentage improved 290 basis points from 22.6% in prior year’s first half to 25.5% in 2024's first half. These increases are primarily due to the 10% increase in the number of homes delivered primarily due to the mix of homes delivered, offset partially by the 2% decrease in the average sales price of homes delivered. Our gross margin on land sales improved $2.4 million in 2024's first six months compared to the same period in 2023. The gross margin of our financial services operations increased $7.1 million in the first half of 2024 compared to the same period in 2023 as a result of higher margins on, an increased number of loans sold during the first half of 2024 compared to the first half of 2023, and an increase in the number of loan originations, partially offset by a decrease in the average loan amount.
Previous wording
We opened 21 new communities during the first quarter of 2024 and closed 15 communities. We sell a variety of home types in various communities and markets, each of which yields a different gross margin. The timing of the openings of new replacement communities as well as underlying lot costs varies from year to year. The mix of communities delivering homes may cause fluctuations in our new contracts and housing gross margin from year to year.
Current wording
We opened 38 new communities during the first half of 2024 and closed 40 communities. We sell a variety of home types in various communities and markets, each of which yields a different gross margin. The timing of the openings of new replacement communities as well as underlying lot costs varies from year to year. The mix of communities delivering homes may cause fluctuations in our new contracts, absorption pace and housing gross margin from year to year.
Previous wording
For the three months ended March 31, 2024, selling, general and administrative expense increased $10.0 million, and increased as a percentage of revenue from 10.0% in the first quarter of 2023 to 10.5% in the first quarter of 2024. Selling expense increased $4.9 million from 2023's first quarter and increased as a percentage of revenue to 5.2% in 2024's first quarter from 4.9% for the same period in 2023. Variable selling expense for sales commissions contributed $3.9 million to the increase due to the higher number of homes delivered as well as higher co-op rates during the period compared to prior year. Non-variable selling expense increased $1.0 million primarily as a result of increased costs associated with our sales offices and models due to our increase in community count from prior year. General and administrative expense increased $5.1 million compared to the first quarter of 2023 and increased as a percentage of revenue from 5.1% in the first quarter of 2023 to 5.4% in the first quarter of 2024. The increase in general and administrative expense was primarily due to a $2.7 million increase in compensation-related expenses, a $0.7 million increase in land-related expenses, a $0.7 million increase in computer costs, a $0.4 million increase in professional fees, and a $0.6 million increase in miscellaneous expenses.
Current wording
For the three months ended June 30, 2024, selling, general and administrative expense increased $15.0 million, and increased as a percentage of revenue from 10.6% in the second quarter of 2023 to 11.0% in the second quarter of 2024. Selling expense increased $6.6 million from 2023's second quarter and increased as a percentage of revenue to 5.3% in 2024's second quarter from 5.1% for the same period in 2023. Variable selling expense for sales commissions contributed $3.8 million to the increase due to the higher number of homes delivered as well as higher co-op rates during the period compared to prior year. Non-variable selling expense increased $2.8 million primarily as a result of increased costs associated with our sales offices and models due to our increase in community count from prior year. General and administrative expense increased $8.4 million compared to the second quarter of 2023 and increased as a percentage of revenue from 5.5% in the second quarter of 2023 to 5.8% in the second quarter of 2024. The increase in general and administrative expense was primarily due to a $6.7 million increase in compensation-related expenses, a $0.6 million increase in land-related expenses, a $0.6 million increase in computer costs, a $0.3 million increase in advertising expenses, and a $0.2 million increase in miscellaneous expenses. For the six months ended June 30, 2024, selling, general and administrative expense increased $24.9 million, and increased as a percentage of revenue from 10.3% in the six months ended June 30, 2023 to 10.8% in the first six months of 2024. Selling expense increased $11.5 million from the first half of 2023 and increased as a percentage of revenue to 5.2% in 2024's first half from 5.0% for the same period in 2023. Variable selling expense for sales commissions contributed $7.7 million to the increase due to the higher number of homes delivered during the first half of 2024 and higher co-op rates during the period compared to prior year. Non-variable selling expense increased $3.8 million primarily as a result of increased costs associated with our sales offices and models due to our increase in community count from prior year. General and administrative expense increased $13.4 million compared to the first half of 2023 and increased as a percentage of revenue from 5.3% in the six months ended June 30, 2023 to 5.6% in the first six months of 2024. The increase in general and administrative expense was primarily due to a $9.3 million increase in compensation-related expenses, a $1.3 million increase in computer costs, a $1.2 million increase in land-related expenses, a $0.3 million increase in professional fees, and a $1.3 million increase in miscellaneous expenses.
Previous wording
Housing market conditions improved over the first quarter of 2024 compared to the same period in 2023. However, the housing market remains subject to unpredictability as a result of uncertainty regarding the near-term direction of mortgage interest rates as well as various macroeconomic conditions, including labor and material costs and availability, inflation, and the economic concerns of our potential homebuyers. The extent to which these factors will impact our business is unpredictable. We believe that we are well positioned to manage through these economic conditions with our affordable product offerings, land position and planned new community openings. We remain sensitive to potential changes in market conditions, and continue to focus on controlling overhead leverage, carefully managing our investment in land and land development spending and selectively offering incentives for closing cost assistance or mortgage rate buydowns. Our strong balance sheet and liquidity position should also provide us with flexibility through changing economic conditions. However, we cannot provide any assurances that the strategic business objectives listed below will remain successful, and we may need to adjust elements of our strategy to effectively address evolving market conditions.
Current wording
Housing market conditions improved during the second quarter of 2024 compared to the same period in 2023. However, the housing market remains subject to unpredictability as a result of uncertainty regarding the near-term direction of mortgage interest rates as well as various macroeconomic conditions, including labor and material costs and availability, inflation, and the economic concerns of our potential homebuyers. The extent to which these factors will impact our business is unpredictable. We believe that we are well positioned to manage through these economic conditions with our affordable product offerings, land position and planned new community openings. We remain sensitive to potential changes in market conditions, and continue to focus on controlling overhead leverage, carefully managing our investment in land and land development spending and selectively offering homebuyer concessions, such as mortgage interest rate buydowns, to support homebuyers, drive order activity and minimize cancellations. Our strong balance sheet and ample liquidity should also provide us with flexibility through changing economic conditions. However, we cannot provide any assurances that the strategic business objectives listed below will remain successful, and we may need to adjust elements of our strategy to effectively address evolving market conditions.
Previous wording
During the first three months of 2024, we invested $107.7 million in land acquisitions and $119.4 million in land development compared to $45.6 million and $92.4 million, respectively, during the first three months of 2023. We invested in more land acquisitions in the first quarter of 2024 compared to the first quarter of 2023 in line with the land supply needs of our divisions. In the first quarter of 2024, we invested more in land development than in land acquisitions in order to finish lots needed to start homes and allow us to open new communities. We continue to closely review our land acquisition and land development spending and monitor our ongoing pace of home sales and deliveries, and we will adjust our land and investment spend accordingly.
Current wording
During the first six months of 2024, we invested $226.8 million in land acquisitions and $263.9 million in land development compared to $141.7 million and $201.3 million, respectively, during the first six months of 2023. We invested in more land acquisitions in the first half of 2024 compared to the second quarter of 2023 in line with the land supply needs of our divisions. We continue to closely review our land acquisition and land development spending and monitor our ongoing pace of home sales and deliveries, and we will adjust our land and investment spend accordingly.
Previous wording
We ended the first quarter of 2024 with approximately 47,500 lots under control, which represents an approximately six-year supply of lots based on the past twelve months of homes delivered, including certain lots that we anticipate selling to third parties. This represents a 16% increase from our approximately 40,700 lots under control at the end of last year’s first quarter.
Current wording
We ended the second quarter of 2024 with approximately 49,500 lots under control, which represents an approximately six-year supply of lots based on the past twelve months of homes delivered, including certain lots that we anticipate selling to third parties. This represents a 20% increase from our approximately 41,300 lots under control at the end of last year’s second quarter.
Previous wording
We opened 21 communities and closed 15 communities in the first quarter of 2024, ending the first quarter with 219 active communities, compared to 200 at the end of last year’s first quarter. Although the timing of opening new communities and closing existing communities is subject to substantial variation, we expect to grow our average community count by approximately 10% by the end of 2024.
Current wording
We opened 38 communities and closed 40 communities in the first half of 2024, ending the second quarter with 211 active communities, compared to 195 at the end of last year’s second quarter. Although the timing of opening new communities and closing existing communities is subject to substantial variation, we expect to grow our average community count by approximately 5% by the end of 2024.
Previous wording
The following table shows, by segment: revenue; gross margin; selling, general and administrative expense; operating income (loss); and interest (income) expense - net for the three months ended March 31, 2024 and 2023:
Current wording
The following table shows, by segment: revenue; gross margin; selling, general and administrative expense; operating income (loss); and interest (income) expense - net for the three and six months ended June 30, 2024 and 2023:
Previous wording
The following table presents, by reportable segment, selected operating and financial information as of and for the three months ended March 31, 2024 and 2023:
Current wording
The following table presents, by reportable segment, selected operating and financial information as of and for the three and six months ended June 30, 2024 and 2023:
Previous wording
The composition of our homes delivered, new contracts, net and backlog is constantly changing and may be based on a dissimilar mix of communities between periods as new communities open and existing communities wind down. Further, home types and individual homes within a community can range significantly in price due to differing square footage, option selections, lot sizes and quality and location of lots. These variations may result in a lack of meaningful comparability between homes delivered, new contracts, net and backlog due to the changing mix between periods.
Current wording
The composition of our homes delivered, new contracts, net and backlog is constantly changing and may be based on a dissimilar mix of communities between periods as new communities open and existing communities wind down. Further, home types and individual homes within a community can range significantly in price due to differing square footage, option selections, lot sizes and quality and location of lots. These variations may result in a lack of meaningful comparability between homes delivered, new contracts, net and backlog due to the changing mix of communities between periods.
Previous wording
The following table sets forth the cancellation rates for each of our homebuilding segments for the three months ended March 31, 2024 and 2023:
Current wording
The following table sets forth the cancellation rates for each of our homebuilding segments for the three and six months ended June 30, 2024 and 2023:
Previous wording
Northern Region. During the three months ended March 31, 2024, homebuilding revenue in our Northern region increased $25.8 million, from $382.7 million in the first quarter of 2023 to $408.5 million in the first quarter of 2024. This 7% increase in homebuilding revenue was primarily the result of a 6% increase in the number of homes delivered (46 more units), which was primarily the result of mix, a 1% increase in the average sales price of homes delivered ($3,000 per home delivered), and a $0.9 million increase in land sale revenue. Operating income in our Northern region increased $18.9 million from $39.2 million in the first quarter of 2023 to $58.1 million during the quarter ended March 31, 2024. This increase in operating income was the result of a $22.3 million improvement in our gross margin offset partially by a $3.4 million increase in selling, general and administrative expense. With respect to our homebuilding gross margin, our housing gross margin improved $21.9 million and our housing gross margin percentage improved 430 basis points to 21.7% in the first quarter of 2024 from 17.4% in the prior year’s first quarter. These improvements were primarily due to the increase in the number of homes delivered in addition to the mix of homes being delivered compared to prior year. Our land sale gross margin improved $0.4 million in the first quarter of 2024 compared to the same period in 2023 as a result of the mix of lots sold in the current year compared to the prior year.
Current wording
Northern Region. During the three months ended June 30, 2024, homebuilding revenue in our Northern region increased $80.9 million, from $383.9 million in the second quarter of 2023 to $464.8 million in the second quarter of 2024. This 21% increase in homebuilding revenue was primarily the result of a 21% increase in the number of homes delivered (168 more units), which was primarily the result of the mix of homes being delivered. Operating income in our Northern region increased $25.9 million from $46.9 million in the second quarter of 2023 to $72.8 million during the quarter ended June 30, 2024. This increase in operating income was the result of a $30.5 million improvement in our gross margin offset partially by a $4.5 million increase in selling, general and administrative expense. With respect to our homebuilding gross margin, our housing gross margin improved $30.3 million and our housing gross margin percentage improved 310 basis points to 23.0% in the second quarter of 2024 from 19.9% in the prior year’s second quarter. These improvements were primarily due to the increase in the number of homes delivered in addition to the mix of homes delivered compared to prior year. Our land sale gross margin improved $0.1 million in the second quarter of 2024 compared to the same period in 2023 as a result of the mix of lots sold in the current year compared to the prior year.
Previous wording
Southern Region. During the three month period ended March 31, 2024, homebuilding revenue in our Southern region increased $18.7 million, from $592.5 million in the first quarter of 2023 to $611.2 million in the first quarter of 2024. This 3% increase in homebuilding revenue was the result of a 9% increase in the number of homes delivered (105 more units) due to increased availability of inventory homes, offset partially by a 6% decrease in the average sales price of homes delivered ($27,000 per home delivered), which was primarily due to mix. Operating income in our Southern region increased $20.2 million from $97.6 million in the first quarter of 2023 to $117.8 million during the quarter ended March 31, 2024. This increase in operating income was the result of a $24.7 million improvement in our gross margin, offset partially by a $4.5 million increase in selling, general, and administrative expense. With respect to our homebuilding gross margin, our housing gross margin improved $23.8 million, due primarily to the increase in the number of homes delivered during the period and the mix of homes being delivered compared to prior year, offset partially by the decrease in the average sales price of homes delivered. Our housing gross margin percentage improved from 24.1% in prior year’s first quarter to 27.4% in the first quarter of 2024, primarily due to the mix of homes being delivered, offset partially by the decrease in average sales price of homes delivered compared to prior year. Our land sale gross margin improved $0.9 million in the first quarter of 2024 compared to the first quarter of 2023 as a result of the mix of lots sold in the current year compared to the prior year.
Current wording
Southern Region. During the three month period ended June 30, 2024, homebuilding revenue in our Southern region increased $9.3 million, from $604.9 million in the second quarter of 2023 to $614.2 million in the second quarter of 2024. This 2% increase in homebuilding revenue was the result of a 5% increase in the number of homes delivered (66 more units) due to increased availability of inventory homes, offset partially by a 3% decrease in the average sales price of homes delivered ($17,000 per home delivered), which was primarily due to mix. Operating income in our Southern region increased $9.9 million from $109.9 million in the second quarter of 2023 to $119.8 million during the quarter ended June 30, 2024. This increase in operating income was the result of a $15.1 million improvement in our gross margin, offset partially by a $5.3 million increase in selling, general, and administrative expense. With respect to our homebuilding gross margin, our housing gross margin improved $14.2 million, due primarily to the increase in the number of homes delivered during the period and the mix of homes being delivered compared to prior year, offset partially by the decrease in the average sales price of homes delivered. Our housing gross margin percentage improved from 26.1% in prior year’s second quarter to 27.9% in the second quarter of 2024, primarily due to the mix of homes being delivered. Our land sale gross margin improved $0.9 million in the second quarter of 2024 compared to the second quarter of 2023 as a result of the mix of lots sold in the current year compared to the prior year.
Previous wording
During the three months ended March 31, 2024, we experienced a 3% increase in new contracts in our Southern region, from 1,343 in the first quarter of 2023 to 1,385 in the first quarter of 2024, which was primarily due to our increased community count compared to prior year. Homes in backlog decreased, however, by 18% from 2,214 homes at March 31, 2023 to 1,824 homes at March 31, 2024, primarily as a result of improved construction cycle times allowing us to deliver homes in backlog at a faster rate compared to last year as well as specs sold and closed in the same quarter. Average sales price in backlog increased to $530,000 at March 31, 2024 from $526,000 at March 31, 2023 primarily due to the mix of homes being sold. During the three months ended March 31, 2024, we opened 14 new communities in our Southern region compared to opening eight communities during 2023's first quarter. Our monthly absorption rate in our Southern region declined to 4.0 per community in the first quarter of 2024 compared to 4.6 per community in the first quarter of 2023 as a result of our 18% increase in our average communities compared to prior year, partially offset by a smaller increase in new contracts during the quarter.
Current wording
During the three months ended June 30, 2024, our new contracts increased slightly in our Southern region, from 1,248 in the second quarter of 2023 to 1,253 in the second quarter of 2024, which was primarily due to our increased community count compared to prior year. Homes in backlog decreased, however, by 20% from 2,255 homes at June 30, 2023 to 1,804 homes at June 30, 2024, primarily as a result of improved construction cycle times allowing us to deliver homes in backlog at a faster rate compared to last year and increased availability of inventory homes compared to prior year. Average sales price in backlog increased to $538,000 at June 30, 2024 from $509,000 at June 30, 2023 primarily due to the mix of homes being sold. During the three months ended June 30, 2024, we opened 14 new communities in our Southern region compared to opening six communities during 2023's second quarter. Our monthly absorption rate in our Southern region declined to 3.5 per community in the second quarter of 2024 compared to 4.4 per community in the second quarter of 2023 as a result of the limited lot supply in the increased number of our communities in closeout status.
Previous wording
Financial Services. Revenue from our mortgage and title operations increased 7% to $27.0 million in the first quarter of 2024 from $25.3 million in the first quarter of 2023 due to higher margins on loans sold during the period compared to prior year’s first quarter and a 24% increase in the number of loan originations from 1,258 in 2023's first quarter to 1,556 in the first quarter of 2024, partially offset by a decrease in the average loan amount from $393,000 in the quarter ended March 31, 2023 to $386,000 in the quarter ended March 31, 2024.
Current wording
Financial Services. Revenue from our mortgage and title operations increased 22% to an all-time quarterly record $30.8 million in the second quarter of 2024 from $25.3 million in the second quarter of 2023 due to higher margins on loans sold during the period compared to prior year’s second quarter and a 26% increase in the number of loan originations from 1,281 in 2023's second quarter to 1,618 in the second quarter of 2024, partially offset by a decrease in the average loan amount from $402,000 in the quarter ended June 30, 2023 to $395,000 in the quarter ended June 30, 2024.
Previous wording
Our financial services segment experienced a $0.2 million increase in operating income in the first quarter of 2024 compared to 2023's first quarter, which was primarily due to the increase in revenue discussed above offset, in part, by a $1.5 million increase in selling, general and administrative expense compared to the first quarter of 2023, which was primarily the result of a $0.8 million increase in compensation-related expenses and a $0.7 million increase in other miscellaneous expenses.
Current wording
Our financial services segment experienced a $4.1 million increase in operating income in the second quarter of 2024 compared to 2023's second quarter, which was primarily due to the increase in revenue discussed above offset, in part, by a $1.4 million increase in selling, general and administrative expense compared to the second quarter of 2023, which was primarily the result of an increase in compensation-related expenses.
Previous wording
Capture rate is influenced by financing availability and competition in the mortgage market and can fluctuate from quarter to quarter.
Current wording
At June 30, 2024, M/I Financial provided financing services in all of our markets. Approximately 87% of our homes delivered during the second quarter of 2024 were financed through M/I Financial, compared to 81% in the second quarter of 2023. Capture rate is influenced by financing availability and competition in the mortgage market and can fluctuate from quarter to quarter.
Previous wording
Corporate Selling, General and Administrative Expense. Corporate selling, general and administrative expense increased $0.6 million from $17.2 million for the first quarter of 2023 to $17.8 million for the first quarter of 2024. This increase primarily resulted from an increase in equity compensation-related expenses.
Current wording
Corporate Selling, General and Administrative Expense. Corporate selling, general and administrative expense increased $3.9 million from $19.8 million for the second quarter of 2023 to $23.7 million for the second quarter of 2024. This increase primarily resulted from a $2.2 million increase in compensation-related expenses and a $1.2 million increase in miscellaneous expenses.
Previous wording
Interest Income, net of Interest Expense. The Company earned $6.9 million of interest income - net for the three months ended March 31, 2024 compared to earning $1.4 million of interest income - net for the three months ended March 31, 2023. This increase was primarily due to a higher average cash balance on hand compared to prior year.
Current wording
Interest Income, net of Interest Expense. The Company earned $7.3 million of interest income - net for the three months ended June 30, 2024 compared to earning $4.7 million of interest income - net for the three months ended June 30, 2023. This increase was primarily due to a higher average cash balance on hand compared to prior year.
Previous wording
Income Taxes. Our overall effective tax rate was 23.4% for the three months ended March 31, 2024 and 24.2% for the three months ended March 31, 2023. The decrease in the effective tax rate from the three months ended March 31, 2023 was primarily attributable to an increase in tax benefit from equity compensation in 2024.
Current wording
Income Taxes. Our overall effective tax rate was 24.4% for the three months ended June 30, 2024 and 24.0% for the three months ended June 30, 2023. The increase in the effective tax rate from the three months ended June 30, 2023 was primarily attributable to a $0.7 million decrease in tax benefit from equity compensation in 2024.
Previous wording
At March 31, 2024, M/I Financial provided financing services in all of our markets. Approximately 88% of our homes delivered during the first quarter of 2024 were financed through M/I Financial, compared to 78% in the first quarter of 2023.
Current wording
At June 30, 2024, M/I Financial provided financing services in all of our markets. Approximately 88% of our homes delivered during the first half of 2024 were financed through M/I Financial, compared to 79% during the six months ended June 30, 2023. Capture rate is influenced by financing availability and can fluctuate from quarter to quarter.
Previous wording
At March 31, 2024, we had $870.2 million of cash, cash equivalents and restricted cash, with $869.7 million of this amount comprised of unrestricted cash and cash equivalents, which represents a $137.1 million increase in unrestricted cash and cash equivalents from December 31, 2023. The increase in cash is primarily due to house closings, the timing of land spend compared to prior year as well as a larger beginning of year balance on hand. Our principal uses of cash for the three months ended March 31, 2024 were investment in land and land development, construction of homes, mortgage loan originations, investment in joint ventures, operating expenses, short-term working capital, and debt service requirements, including the repayment of amounts outstanding under our credit facilities, and the repurchase of $25.3 million of our outstanding common shares under our 2021 Share Repurchase Program (as defined below). In order to fund these uses of cash, we used proceeds from home deliveries, the sale of mortgage loans, the sale of mortgage servicing rights, excess cash balances, borrowings under our credit facilities, and other sources of liquidity.
Current wording
At June 30, 2024, we had $837.5 million of cash, cash equivalents and restricted cash, with $837.3 million of this amount comprised of unrestricted cash and cash equivalents, which represents a $104.7 million increase in unrestricted cash and cash equivalents from December 31, 2023. The increase in cash is primarily due to house closings, the timing of land spend compared to prior year as well as a larger beginning of year balance on hand. Our principal uses of cash for the six months ended June 30, 2024 were investment in land and land development, construction of homes, mortgage loan originations, investment in joint ventures, operating expenses, short-term working capital, and debt service requirements, including the repayment of amounts outstanding under our credit facilities, and the repurchase of $75.6 million of our outstanding common shares under both the 2021 and 2024 Share Repurchase Programs (as defined below). In order to fund these uses of cash, we used proceeds from home deliveries, the sale of mortgage loans, the sale of mortgage servicing rights, excess cash balances, borrowings under our MIF Mortgage Repurchase Facility (as defined below), and other sources of liquidity.
Previous wording
As of March 31, 2024, we had outstanding notes payable (consisting primarily of notes payable for our financial services operations, the 2030 Senior Notes and the 2028 Senior Notes) with varying maturities in an aggregate principal amount of $924.3 million, with $224.3 million payable within 12 months. Future interest payments associated with these notes payable totaled $150.5 million as of March 31, 2024, with $31.9 million payable within 12 months.
Current wording
As of June 30, 2024, we had outstanding notes payable (consisting primarily of notes payable for our financial services operations, the 2030 Senior Notes and the 2028 Senior Notes) with varying maturities in an aggregate principal amount of $922.8 million, with $222.8 million payable within 12 months. Future interest payments associated with these notes payable totaled $150.5 million as of June 30, 2024, with $31.9 million payable within 12 months.
Previous wording
As of March 31, 2024, there were no borrowings outstanding and $70.8 million of letters of credit outstanding under our $650 million Credit Facility, leaving $579.2 million available. We expect to continue managing our balance sheet and liquidity carefully in the remainder of 2024 by managing our spending on land acquisition and development and construction of inventory homes, as well as overhead expenditures, relative to our ongoing volume of home deliveries, and we expect to meet our current and anticipated cash requirements in 2024 from cash receipts, excess cash balances and availability under our credit facilities.
Current wording
As of June 30, 2024, there were no borrowings outstanding and $80.1 million of letters of credit outstanding under our $650 million Credit Facility, leaving $569.9 million available. We expect to continue managing our balance sheet and liquidity carefully in the remainder of 2024 by managing our spending on land acquisition and development and construction of inventory homes, as well as overhead expenditures, relative to our ongoing volume of home deliveries, and we expect to meet our current and anticipated cash requirements in 2024 from cash receipts, excess cash balances and availability under our credit facilities.
Previous wording
During the first quarter of 2024, we delivered 2,158 homes, started 2,135 homes, ended the quarter with 4,500 homes under construction compared to 4,300 at the end of last year’s first quarter, and spent $107.7 million on land purchases and $119.4 million on land development.
Current wording
During the first half of 2024, we delivered 4,382 homes, started 4,868 homes, ended the quarter with 5,033 homes under construction compared to 4,506 at the end of last year’s second quarter, and spent $226.8 million on land purchases and $263.9 million on land development.
Previous wording
We are actively acquiring and developing lots in our markets to replenish our lot supply and will continue to monitor market conditions and our pace of home sales and deliveries and adjust our land spending accordingly. Pursuant to our land option agreements, as of March 31, 2024, we had a total of 23,631 lots under contract, with an aggregate purchase price of approximately $1.13 billion, to be acquired during the remainder of 2024 through 2029.
Current wording
We are actively acquiring and developing lots in our markets to replenish our lot supply and will continue to monitor market conditions and our pace of home sales and deliveries and adjust our land spending accordingly. Pursuant to our land option agreements, as of June 30, 2024, we had a total of 26,148 lots under contract, with an aggregate purchase price of approximately $1.34 billion, to be acquired during the remainder of 2024 through 2029.
Previous wording
Operating Cash Flow Activities. During the three-month period ended March 31, 2024, we generated $115.8 million of cash from operating activities, compared to generating $251.5 million of cash from operating activities during the first quarter of 2023. The cash provided by operating activities in the first quarter of 2024 was primarily a result of net income of $138.1 million, $61.6 million of proceeds from the sale of mortgage loans net of mortgage loan originations, a $15.8 million decrease in inventory purchases due to delays and timing of land purchases and an increase of $52.9 million in accounts payable and other liabilities, offset, in part, by a decrease in accrued compensation totaling $40.0 million. The cash provided by operating activities during the first quarter of 2023 was primarily a result of net income of $103.1 million, $19.9 million of proceeds from the sale of mortgage loans net of mortgage loan originations, a $175.3 million decrease in inventory due to decline in demand and an increase of $15.9 million in customer deposits and other liabilities, offset, in part, by an increase in accounts payable and accrued compensation totaling $59.1 million and an increase in other assets of $4.6 million.
Current wording
Operating Cash Flow Activities. During the six-month period ended June 30, 2024, we generated $143.3 million of cash from operating activities, compared to generating $417.7 million of cash from operating activities during the first half of 2023. The cash provided by operating activities in the first half of 2024 was primarily a result of net income of $284.8 million, and an increase of $86.6 million in accounts payable, customer deposits and other liabilities, offset, in part, by a $143.9 million increase in inventory purchases and payments for mortgage loan originations which exceeded the proceeds from the sale of mortgage loans by $54.4 million, and a decrease in accrued compensation totaling $25.4 million. The cash generated in operating activities during the first half of 2023 was primarily a result of net income of $221.1 million, $52.5 million of proceeds from the sale of mortgage loans net of mortgage loan originations, a $157.0 million decrease in inventory purchases due to delays and timing of land purchases and an increase of $36.1 million in accounts payable, offset, in part, by a decrease in accrued compensation and other liabilities totaling $60.2 million.
Previous wording
Investing Cash Flow Activities. During the first quarter of 2024, we used $17.1 million of cash in investing activities, compared to using $4.8 million of cash in investing activities during the first quarter of 2023. The cash used in investing activities in the first quarter of 2024 was primarily a result of a $23.7 million increase in our investment in joint venture arrangements, offset, in part, by $6.9 million of proceeds from the sale of a portion of our mortgage servicing rights. The cash used in investing activities during the first quarter of 2023 was primarily a result of an increase in our investment in joint venture arrangements and purchase of property and equipment.
Current wording
Investing Cash Flow Activities. During the first half of 2024, we used $27.5 million of cash in investing activities, compared to using $2.8 million of cash in investing activities during the first half of 2023. The cash used in investing activities in the first half of 2024 was primarily a result of a $29.0 million increase in our investment in joint venture arrangements and a
Previous wording
Financing Cash Flow Activities. During the three months ended March 31, 2024, we generated $38.7 million of cash in financing activities, compared to using $15.7 million of cash in financing activities during the first three months of 2023. The cash provided by from financing activities in 2024 was primarily due to proceeds from borrowings (net of repayments) under our M/I Financial credit facility of $58.5 million and $5.5 million in proceeds from the exercise of stock options during the first quarter of 2024, offset partially by the repurchase of $25.3 million of our outstanding common shares during the first quarter of 2024. The cash used in financing activities in the first quarter of 2023 was primarily due to repayments of $22.1 million (net of proceeds from borrowings) under our two then-outstanding M/I Financial credit facilities, offset partially by the $6.4 million in proceeds from the exercise of stock options during the first quarter of 2023.
Current wording
Financing Cash Flow Activities. During the six months ended June 30, 2024, we used $11.1 million of cash in financing activities, compared to using $58.1 million of cash in financing activities during the first six months of 2023. The cash used in financing activities in 2024 was primarily due to the repurchase of $75.6 million of our outstanding common shares during the first half of 2024, offset partially by proceeds from borrowings (net of repayments) under our MIF Mortgage Repurchase Facility of $56.9 million and $7.5 million in proceeds from the exercise of stock options during the first half of 2024. The cash used in financing activities in the first half of 2023 was primarily due to repayments of $59.3 million (net of proceeds from borrowings) under our two then-outstanding M/I Financial credit facilities and the repurchase of $15.2 million of our outstanding common shares during the first half of 2023, offset partially by the $16.6 million in proceeds from the exercise of stock options during the first half of 2023.
Previous wording
On July 28, 2021, the Company announced that its Board of Directors authorized a new share repurchase program pursuant to which the Company was permitted to purchase up to $100 million of its outstanding common shares (the “2021 Share Repurchase Program”). On February 17, 2022, the Company announced that its Board of Directors approved a $100 million increase to its 2021 Share Repurchase Program. On November 15, 2023, the Company announced that its Board of Directors approved an additional increase of $100 million, for a total of $300 million authorized for repurchases under the 2021 Share Repurchase Program. During the first quarter of 2024, the Company repurchased 0.2 million outstanding common shares for an aggregate purchase price of $25.3 million under the 2021 Share Repurchase Program which was funded with cash on hand. As of March 31, 2024, the Company is authorized to repurchase an additional $102.5 million of outstanding common shares under the 2021 Share Repurchase Program (see Note 12 to our financial statements for more information).
Current wording
On May 13, 2024, the Company announced that its Board of Directors authorized a new share repurchase program pursuant to which the Company was permitted to purchase up to $250 million of its outstanding common shares (the “2024 Share Repurchase Program”), which replaced the 2021 Share Repurchase Program which had $95 million of remaining availability at the time. During the first half of 2024, the Company repurchased 0.6 million outstanding common shares for an aggregate purchase price of $75.6 million under both the 2021 and the 2024 Share Repurchase Programs which was funded with cash on hand. As of June 30, 2024, the Company is authorized to repurchase an additional $207.1 million of outstanding common shares under the 2024 Share Repurchase Program (see Note 12 to our financial statements for more information).
Previous wording
At March 31, 2024 and December 31, 2023, our ratio of homebuilding debt to capital was 21% and 22%, respectively, calculated as the carrying value of our outstanding homebuilding debt (which consists of borrowings under our Credit Facility, our 2030 Senior Notes and our 2028 Senior Notes) divided by the sum of the carrying value of our outstanding homebuilding debt plus shareholders’ equity. We believe that this ratio provides useful information for understanding our financial position and the leverage employed in our operations, and for comparing us with other homebuilders.
Current wording
At June 30, 2024 and December 31, 2023, our ratio of homebuilding debt to capital was 20% and 22%, respectively, calculated as the carrying value of our outstanding homebuilding debt (which consists of borrowings under our Credit Facility, our 2030 Senior Notes and our 2028 Senior Notes) divided by the sum of the carrying value of our outstanding homebuilding debt plus shareholders’ equity. We believe that this ratio provides useful information for understanding our financial position and the leverage employed in our operations, and for comparing us with other homebuilders.
Showing the first 40 of 49 pairs. Open the source sections for the rest.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
Interest Income, net of Interest Expense. The Company earned $14.3 million of interest income - net for the six months ended June 30, 2024 compared to incurring $6.1 million of interest expense - net for the six months ended June 30, 2023. This was primarily due to a higher average cash balance on hand compared to prior year.
Current report — wording carried from elsewhere
Income Taxes. Our overall effective tax rate was 23.9% for the six months ended June 30, 2024 and 24.1% for the six months ended June 30, 2023. The decrease in the effective rate from the six months ended June 30, 2023 was primarily attributable to a $0.6 million increase in tax benefit from equity compensation in 2024.
Current report — wording carried from elsewhere
$5.8 million increase in property and equipment, offset, in part, by $7.2 million of proceeds from the sale of a portion of our mortgage servicing rights. The cash used in investing activities during the first half of 2023 was primarily a result of a $10.5 million increase in our investment in joint venture arrangements and a $2.1 million increase in property and equipment, offset, in part, by $9.8 million of proceeds from the sale of a portion of our mortgage servicing rights during the second quarter of 2023.
Current report — wording carried from elsewhere
MIF Mortgage Repurchase Facility. The MIF Mortgage Repurchase Facility is used to finance eligible residential mortgage loans originated by M/I Financial. The MIF Mortgage Repurchase Facility provides for a maximum borrowing availability of $300 million (subject to increases and decreases during certain periods). The borrowing availability under the MIF Mortgage