M/I Homes Reports Second Quarter Results

COLUMBUS, Ohio, July 31 /PRNewswire-FirstCall/ -- M/I Homes, Inc. (NYSE:
MHO) announced results for the second quarter and six months ended June 30,
2008.
The Company reported a net loss in the quarter of $94.1 million, or $6.72
per share. This net loss is composed of: (i) a $58.0 million ($4.14 per
share) after-tax, non-cash valuation allowance against deferred tax assets,
(ii) pre-tax charges totaling $39.9 million ($1.77 per share) for land-related
charges of $28.4 million and joint venture investment write-offs of $11.5
million; and (iii) a pre-tax loss from operations of $13.5 million. In 2007's
second quarter, the Company reported a net loss of $42.6 million, or $3.05 per
share.
The Company reported a net loss of $116.3 million for the first half of
2008, or $8.30 per share, compared to a net loss of $40.4 million, or loss per
share of $2.89, in the same period a year ago. During the first half of 2008,
the Company recorded $62.2 million of pre-tax impairments charges and the
$58.0 million deferred tax valuation allowance. This compares to pre-tax
charges in the first half of 2007 of $74.3 million. As a result of the 2008
year-to-date net loss, the Company will discontinue paying cash dividends on
its common and preferred shares.
The Company delivered 478 homes in the second quarter compared to 755 in
same period of 2007, a decrease of 37%. Homes delivered for the six months
ended June 30, 2008 decreased 35% to 952 from 1,459 in 2007. New contracts
for 2008's second quarter were 530, down 23% from 2007's second quarter of
688. For the first six months, 2008's new contracts declined 34% to 1,084
from 1,630 in 2007. The Company had 138 active communities at June 30, 2008
compared to 161 at June 30, 2007. The sales value of backlog of homes at June
30, 2008 was $254 million with backlog units of 880 and an average sales price
of $289,000. The backlog of homes at June 30, 2007 had a sales value of $554
million, with backlog units of 1,694 and an average sales price of $327,000.
Robert H. Schottenstein, Chief Executive Officer and President, commented,
"Market conditions remain difficult for the homebuilding industry. Demand is
weak, consumer confidence is low and margins remain under pressure. We
continue to make meaningful progress on reducing our debt, inventory and
expense levels. During the second quarter, our homebuilding borrowings were
further reduced to $10 million, and we lowered our owned lots by over 1,000.
At quarter's end, our stockholders' equity stands at $466 million, with our
debt to capital ratio at 31%."
Mr. Schottenstein continued, "We anticipate that challenging conditions
will continue for the balance of 2008 and, in all likelihood, through much of
2009. Recent federal legislation in support of housing is clearly a positive,
although it is by no means a silver bullet. We will continue to work toward
strengthening our balance sheet and position M/I for future opportunities that
we expect to occur once housing conditions begin to improve."
The Company will broadcast its earnings conference call today at 4:00 p.m.
Eastern Time. To hear the call, log on to the M/I Homes' website at
mihomes.com, click on the "Investors" section of the site, and select "Listen
to the Conference Call." The call, along with any applicable reconciliation
of non-GAAP financial measures, will continue to be available on our website
through July 2009.
M/I Homes, Inc. is one of the nation's leading builders of single-family
homes, having delivered over 72,000 homes. The Company's homes are marketed
and sold under the trade names M/I Homes and Showcase Homes. The Company has
homebuilding operations in Columbus and Cincinnati, Ohio; Chicago, Illinois;
Indianapolis, Indiana; Tampa and Orlando, Florida; Charlotte and Raleigh,
North Carolina; and the Virginia and Maryland suburbs of Washington, D.C.
Certain statements in this Press Release are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
Words such as "expects," "anticipates," "targets," "goals," "projects,"
"intends," "plans," "believes," "seeks," "estimates," variations of such words
and similar expressions are intended to identify such forward-looking
statements. These statements involve a number of risks and uncertainties.
Any forward-looking statements that we make herein and in future reports and
statements are not guarantees of future performance, and actual results may
differ materially from those in such forward-looking statements as a result of
various factors relating to the economic environment, interest rates,
availability of resources, competition, market concentration, land development
activities and various governmental rules and regulations, as more fully
discussed in the Risk Factors section in the Company's Annual Report on Form
10-K for the year ended December 31, 2007, as updated in the Company's
periodic filings on Form 10-Q. All forward-looking statements made in this
Press Release are made as of the date hereof, and the risk that actual results
will differ materially from expectations expressed in this Press Release will
increase with the passage of time. The Company undertakes no duty to publicly
update any forward-looking statements, whether as a result of new information,
future events or otherwise. However, any further disclosures made on related
subjects in our subsequent filings, releases or presentations should be
consulted.

M/I Homes, Inc. and Subsidiaries
Consolidated Statements of Income
(In thousands, except per share amounts)

Three Months Ended Six Months Ended
June 30, June 30,
2008 2007 2008 2007

Revenue: $141,002 $226,448 $297,087 $443,017

Net loss:
Loss from continuing
operations (1) $(91,250) $(35,431) $(111,400) $(33,360)
Loss from discontinued
operations (413) (4,748) (33) (4,589)
Net loss (91,663) (40,179) (111,433) (37,949)
Preferred share dividends 2,438 2,438 4,875 2,438
Net loss to common
shareholders $(94,101) $(42,617) $(116,308) $(40,387)

Loss per share:
Basic and Diluted:
Continuing operations $(6.69) $(2.71) $(8.30) $(2.56)
Discontinued operations (0.03) (0.34) - (0.33)
Total $(6.72) $(3.05) $(8.30) $(2.89)

Weighted average shares
outstanding:
Basic 14,016 13,975 14,012 13,959
Diluted 14,016 13,975 14,012 13,959

(1) For the three and six months ended June 30, 2008, loss from
continuing operations includes a $58.0 million deferred tax asset
valuation allowance.

M/I Homes, Inc. and Subsidiaries
Selected Supplemental Financial and Operating Data
(Dollars in thousands)

Three Months Ended Six Months Ended
June 30, June 30,
2008 2007 2008 2007

Revenue $141,002 $226,448 $297,087 $443,017
Gross margin (21,103) (10,226) (17,693) 35,017
General and administrative
expense 17,133 25,947 34,691 46,688
Selling expense 13,087 18,807 26,813 35,938
Operating loss (51,323) (54,980) (79,197) (47,609)
Other income - - 5,555 -
Interest expense 2,106 2,760 6,545 6,788
Loss from continuing
operations before
income taxes (53,429) (57,740) (80,187) (54,397)
Provision (benefit) for
income taxes 37,821 (22,309) 31,213 (21,037)
Loss from continuing
operations, net of income
taxes (91,250) (35,431) (111,400) (33,360)
Loss from discontinued
operations, net of income
taxes (413) (4,748) (33) (4,589)
Net loss (91,663) (40,179) (111,433) (37,949)
Preferred share dividends 2,438 2,438 4,875 2,438
Net loss to common
shareholders $(94,101) $(42,617) $(116,308) $(40,387)

Revenue:
Housing revenue $126,795 $217,962 $257,731 $424,029
Land revenue 10,870 4,703 23,644 9,069
Other 166 (1,012) 7,131 (228)
Total homebuilding
revenue $137,831 $221,653 $288,506 $432,870

Financial services revenue 3,171 4,795 8,581 10,147
Total revenue $141,002 $226,448 $297,087 $443,017

Land, Lot and Investment in
Unconsolidated Subsidiaries
Impairment by Region:
Midwest $10,455 $7,129 $12,974 $6,889
Florida 22,998 24,437 41,492 24,744
Mid-Atlantic 6,419 26,613 6,513 27,691
Continuing operations $39,872 $58,179 $60,979 $59,324
Discontinued operations - 7,881 - 7,881
Consolidated Total $39,872 $66,060 $60,979 $67,205

Abandonments by Region:

Midwest $1 $- $25 $22
Florida 2 825 133 1,828
Mid-Atlantic 5 16 1,054 46
Continuing operations $8 $841 $1,212 $1,896
Discontinued operations - - - -
Consolidated Total $8 $841 $1,212 $1,896

M/I Homes, Inc. and Subsidiaries
Selected Supplemental Financial and Operating Data
(Dollars in thousands)

Three Months Ended Six Months Ended
June 30, June 30,
2008 2007 2008 2007

EBITDA (1) $(7,086) $15,859 $(556) $31,899
Interest incurred - net of
fee amortization $4,396 $8,522 $9,907 $18,224
Interest amortized to cost of
sales $2,453 $3,640 $5,026 $7,036
Depreciation and amortization $1,921 $1,943 $4,701 $3,868
Non-cash charges $40,813 $72,850 $63,950 $76,026

Cash provided by (used in)
operating activities $10,747 $9,241 $109,499 $62,437
Cash (used in) provided by
investing activities $(3,678) $(3,969) $4,056 $(6,203)
Cash used in financing
activities $(6,571) $(7,159) $(112,948) $(65,402)

Financial services pre-tax
income $1,012 $2,188 $4,349 $4,838

(1) Earnings before interest, taxes, depreciation and amortization
("EBITDA") is defined, in accordance with our credit facility, as
net income, plus interest expense (including interest amortized to
land and housing costs), income taxes, depreciation, amortization and
non-cash charges, minus interest income.

Units:

New contracts:
Continuing operations 530 682 1,084 1,613
Discontinued operations - 6 - 17
Consolidated total 530 688 1,084 1,630
Homes delivered:
Continuing operations 466 738 916 1,424
Discontinued operations 12 17 36 35
Consolidated total 478 755 952 1,459

June 30,
2008 2007
Consolidated Backlog:
Units 880 1,694
Aggregate sales value
(in millions) $254 $554
Average sales price $289,000 $327,000

M/I Homes, Inc. and Subsidiaries
Summary Balance Sheet Information
(Unaudited)

June 30,
2008 2007

Assets:
Cash / cash held in escrow $9,144 $16,013
Mortgage loans held for sale 31,919 32,380
Inventory:
Lots, land and land development 404,992 589,993
Land held for sale 2,739 35,511
Homes under construction 259,851 357,893
Other inventory 31,114 44,825
Total Inventory 698,696 1,028,222

Fixed assets - net 32,216 36,785
Investment in unconsolidated joint ventures 26,011 50,453
Income tax receivable 31,857 -
Deferred income taxes 7,622 65,351
Assets from discontinued operation - 100,781
Other assets 23,091 29,538
Total Assets $860,556 $1,359,523

Liabilities:
Debt - Homebuilding Operations:
Notes payable banks $10,000 $265,000
Notes payable other 16,661 6,826
Senior notes 199,040 198,784
Total Debt - Homebuilding Operations 225,701 470,610

Note payable bank - financial services
operations 29,640 16,000
Total Debt 255,341 486,610

Accounts payable 55,162 80,516
Other liabilities 64,724 85,301
Community development district obligations 12,153 23,750
Obligation for inventory not owned 7,093 7,729
Total Liabilities 394,473 683,906

Stockholders' Equity 466,083 675,617
Total Liabilities and Stockholders' Equity $860,556 $1,359,523

Book value per common share $26.11 $40.98
Homebuilding net debt/capital ratio 31% 40%

M/I Homes, Inc. and Subsidiaries
Selected Supplemental Financial and Operating Data

Land Position Summary

June 30, 2008 June 30, 2007

Lots Lots
Lots Under Lots Under
Owned Contract Total Owned Contract Total

Midwest region 6,012 659 6,671 6,820 504 7,324

Florida region 3,452 251 3,703 7,982 351 8,333

Mid-Atlantic
region 1,842 804 2,646 2,413 1,163 3,576

Continuing
operations 11,306 1,714 13,020 17,215 2,018 19,233

Discontinued
operations - - - 408 - 408

Consolidated
total 11,306 1,714 13,020 17,623 2,018 19,641

SOURCE M/I Homes, Inc.

Phillip G. Creek, Executive Vice President, Chief Financial Officer,
+1-614-418-8011, or Ann Marie W. Hunker, Vice President, Corporate Controller,
+1-614-418-8225, both of M/I Homes, Inc.