• Revenue: $4.5 billion for the full year, a 12% increase over 2023.
• Homes Delivered: 9,055 homes, a 12% increase from 2023.
• Gross Margin: 26.6% for the year, 130 basis points better than 2023; 24.6% in Q4, down 50 basis points year-over-year.
• Pretax Income: $734 million for the year, a 21% increase over 2023.
• Return on Equity: 21% for the year.
• Community Count: 220 at year-end, a 7% increase over 2023.
• New Contracts: Increased 4% in the Southern region and 12% in the Northern region for the year.
• Cash Balance: $822 million at year-end.
• Debt-to-Capital Ratio: 19%, down from 22% a year ago.
• Earnings Per Share: $19.71 for the year, a 22% increase from $16.21 in 2023.
• EBITDA: $767 million for the year.
• Effective Tax Rate: 23% for 2024.
• Mortgage and Title Operations Revenue: $116.2 million for the year.
• Average Closing Price: $490,000 in Q4, a 4% increase from last year.
• SG&A Expenses: Increased by 16% in Q4, but declined 80 basis points as a percentage of revenue.
• Land Spend: $1.1 billion in 2024, up from $850 million last year.

• Warning! GuruFocus has detected 4 Warning Signs with BLFY.

Release Date: January 29, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• M/I Homes Inc (NYSE:MHO) achieved record homes delivered, revenue, and income in 2024, with a 12% increase in homes delivered and revenue compared to 2023.
• The company reported a strong pretax margin improvement to 16.3% from 15.1% in the previous year, resulting in record pretax income of $734 million.
• M/I Homes Inc (NYSE:MHO) ended the year with a robust financial position, including $2.9 billion in equity and zero borrowings under its $650 million unsecured revolving credit facility.
• The company has a strong land position, owning and controlling over 52,000 single-family lots, equating to about a 5.5-year supply.
• M/I Homes Inc (NYSE:MHO) reported a 29% increase in earnings per diluted share for the fourth quarter, reaching $4.71 per share compared to $3.66 per share in the previous year's fourth quarter.

Negative Points

• Demand became choppier and more challenging in several markets during the fourth quarter, leading to a deceleration in sales.
• The cost of mortgage rate buydowns increased, impacting the fourth quarter gross margin, which decreased by 50 basis points year-over-year and 250 basis points sequentially.
• Nearly 50% of buyers are now using rate buydowns, indicating a reliance on incentives to drive sales.
• The Tampa market in Florida is experiencing more challenges compared to other regions, with a noticeable softening in demand.
• The company anticipates some compression in gross margins in 2025 compared to 2024 due to ongoing market conditions and the use of rate buydowns.

Q & A Highlights

Q: Can you discuss the trends you're seeing in Texas and Florida, particularly regarding incentives and inventory levels? A: We feel better about Texas than Florida. Tampa is more challenging than Orlando and Sarasota. Dallas and Houston are strong, with Austin improving. We are using rate buy downs across all markets, which is a significant part of our strategy.

Q: Given the choppiness in demand, are you altering your spec strategy? A: We plan to maintain our current pace and grow community count. Our spec strategy has increased slightly over the years and is crucial for our business. We aim to keep it consistent, with some variations across markets.

Q: Can you provide clarity on the margin pullback due to rate buy downs? A: The cost of rate buy downs impacts margins, with about 50% of sales using them in Q4. Margins are expected to remain around 24-25%, which is still strong. The market's uncertainty makes it hard to predict exact future margins.

Q: How are you addressing the challenges in the Tampa market, especially after the hurricane? A: Tampa has slowed down, possibly due to the hurricane, but we are taking steps to address it. We remain bullish on Tampa's long-term prospects and are confident in our team and land position there.

Q: What are your thoughts on labor availability and potential impacts from new immigration rules? A: Currently, we do not have a labor problem, but there is uncertainty. We are seeing more subcontractors available, particularly in land development, but the situation varies by market.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.