M/I Homes, Inc. (MHO) Q4 2023 Earnings Conference Call January 31, 2024 10:30 AM ET

Company Participants

Phillip Creek - Executive Vice President and Chief Financial Officer

Bob Schottenstein - Chief Executive Officer and President

Derek Klutch - President of Mortgage Company

Conference Call Participants

Alan Ratner - Zelman & Associates

Jay McCanless - Wedbush Securities

Operator

Good morning, ladies and gentlemen, and welcome to the M/I Homes' Fourth Quarter and Year-End Earnings Conference Call. At this time, all lines are in listen-only mode. Following the presentation we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this call is being recorded on Wednesday, January 31, 2024.

I would now like to turn over the conference to Phil Creek. Please go ahead.

Phillip Creek

Thank you for joining us. Joining me on the call today is Bob Schottenstein, our CEO and President; and Derek Klutch, the President of our Mortgage Company.

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 non-public items with you directly. And as to forward-looking statements, 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. Also be advised that the company undertakes no obligation to update any forward-looking statements made during this call.

With that, I'll turn the call over to Bob.

Bob Schottenstein

Thanks, Phil. Good morning, and thank you for joining our call as we highlight our fourth quarter and full-year 2023 results. We had an outstanding year in 2023, one of the best in our 47-year history. We are particularly pleased with our results given the significant headwinds the housing industry faced as we entered 2023, as well as a rising interest rate environment throughout most of the year, together with inflationary pressures and general uncertainty within the economy.

For the year, we had very strong income and returns. Pre-tax income equaled $607 million, with a pre-tax return of 15%. Gross margins for the year came in at 25.3%, the same as last year. We were pleased to see our gross margins hold steady notwithstanding the choppy market conditions and rising rates. Return on equity was a very solid 20.2%. Strength of our communities and product offerings, along with our selective and very targeted use of below-market financing incentives contributed to our strong fourth quarter and full-year sales performance. In the fourth quarter, we sold 1,588 homes, a 61% increase over last year, with significantly better per-community absorptions.