M/I Homes, Inc. (NYSE:MHO) Q2 2020 Earnings Conference Call - Final Transcript

Jul 29, 2020 • 04:00 pm ET


M/I Homes, Inc. (NYSE:MHO) Q2 2020 Earnings Conference Call - Final Transcript


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Good afternoon. My name is Heather, and I'll be your conference operator today. At this time, I would like to welcome everyone to the M/I Homes, Inc. Second Quarter Earnings Conference Call. [Operator Instructions]

I'd now like to turn today's call over to our host, Mr. Phil Creek, you may begin.

Phillip G. Creek

Thank you very much. Joining me on the call today is Bob Schottenstein, our CEO and President; Tom Mason, EVP; Derek Klutch, President of our Mortgage Company; Ann Marie Hunker, VP, Corporate Controller; and Kevin Hake, Senior VP. First, to address Regulation Fair Disclosure, we encourage you to ask any questions regarding issues that you consider material during this call because we are prohibited from discussing significant nonpublic items with you directly. And as to forward-looking statements, I want to remind everyone that the cautionary language about forward-looking statements contained in today's press release also applies to any comments made during this call, including comments related to COVID-19.

Also be advised that the company undertakes no obligation to update any forward-looking statements made during this call. Also during this call, we disclose certain non-GAAP financial measures. A presentation of the most directly comparable financial measure calculated in accordance with GAAP and a reconciliation of the differences between the non-GAAP financial measure and the GAAP measure was included in our earnings release issued earlier today that is available on our website. With that, I'll turn the call over to Bob.

Robert H. Schottenstein

Thank you, Phil, and thank you for joining us today on our call. The second quarter was a record-setting quarter for M/I Homes. In fact, it was the best quarter in company history, with record set in virtually every important financial metric. We are excited to share our strong results with you. As everyone knows, the first half of 2020 has been a time of significant economic and social instability in our country and throughout the world, precipitated in large part by an unprecedented, almost unimaginable health crisis. We began the quarter in a highly defensive operating mode, proceeding with extreme caution and concern, doing our best to react to the challenging and complex conditions while adapting our operations to safeguard and protect, as much as possible, our employees, our customers and our work environment, all the while, at the same time, continuing to try to sell and build quality homes.

The last half of March and early April saw a precipitous decline in our business, with new contracts declining significantly. Housing conditions, both for us and other builders then began to improve in the last half of April. That improvement materially accelerated for us as our business rebounded significantly in May and June to record-setting levels. Specifically, for the quarter, April new contracts were down 26% year-over-year. May was our best sales month ever at the time, with new contracts up 39% year-over-year. Only to then be quickly surpassed by our record-setting June sales, with new contracts up 79% year-over-year. We ended the quarter selling a record 2,261 homes, 31%