COLUMBUS, OH -- M/I Homes, Inc. announced a profit of $125.3 million in third quarter. Excluding the reversal of $111.6 million of our deferred tax asset valuation allowance, the Company's net income totaled $13.8 million. This compares to net income of $8.3 million for the third quarter of 2012, which included a $3.0 million recovery related to a drywall settlement.
Homes delivered in 2013's third quarter were 937 compared to 746 in 2012's third quarter - up 26%. Homes delivered for the nine months ended September 30, 2013 increased 25% to 2,352 compared to 2012's nine month deliveries of 1,878. New contracts for 2013's third quarter were 869, up 15% from 2012's third quarter of 757. For the first nine months of 2013, new contracts increased 28% from 2,347 in 2012 to 2,994 in 2013. M/I Homes had 147 active communities at September 30, 2013 compared to 128 at September 30, 2012. The Company's cancellation rate was 17% in the third quarter of 2013 compared to 18% in 2012's third quarter. Backlog of homes at September 30, 2013 had a sales value of $488 million (a 46% increase over last year's third quarter), with an average sales price of $304,000 and backlog units of 1,607. At September 30, 2012 backlog sales value was $334 million, with an average sales price of $284,000 and backlog units of 1,179.
Robert H. Schottenstein, Chief Executive Officer and President, commented, "We are very pleased with our third quarter results highlighted by (i) 32% growth in revenue; (ii) 26% improvement in homes delivered; (iii) pre-tax income of $13.8 million - a 63% increase over last year's third quarter; and (iv) a 15% increase in new contracts. Our results reflect strong performances on many fronts - our backlog value is now up 46% compared to a year ago, and our gross margin for the quarter improved to 20.0%, a 30 basis point increase from the second quarter of 2013. Additionally, we continue to improve our operating leverage with our selling, general and administrative expenses for the quarter declining to 13.2% of revenue, our lowest quarterly level since the fourth quarter of 2007. Our third quarter results also included the benefit of reversing a majority of our deferred tax asset valuation allowance, further strengthening our balance sheet. During the quarter, we continued to position our Company for further growth and geographic diversification, increasing our community count to 147 at September 30, 2013 - a 15% increase over 2012's level."
Mr. Schottenstein continued, "Our financial condition is strong, with cash of $158 million, shareholder's equity of $480 million, net debt to net capital at 37%, and no outstanding borrowings under our credit facility. We are poised to have a very solid 2013 as we remain focused on increasing our profitability, growing our market share, expanding our community count, and investing in attractive land opportunities."