Apr. 30--M/I Homes today reported its first-quarter sales were the best in a year and a half, largely on the strength of its Midwest operations.

Despite the new home contracts, central Ohio's largest homebuilder lost $28.1 million, or $2.01 per share, in the first quarter, compared with a loss of $22.2 million, or $1.58 per share, in the first quarter of 2008.

The company said $11.9 million of the loss came from its continued home-building operations. The company also reported a $4 million loss related to problems with defective Chinese drywall, which M/I used in some of its Florida homes, and an $11 million loss on land sales.

M/I said buyers signed 667 contracts for new homes in the first quarter, up from 554 contracts in the first quarter of 2008 -- its strongest performance in six quarters.

The company reported its biggest jump in the Midwest, where contracts for new homes rose 45 percent over the first quarter of last year.

"We're quite pleased with our first-quarter results," said CEO Robert H. Schottenstein. "We're showing improvements in a number of very key areas, beginning with a 20 percent increase in sales."

"We had particularly strong sales in Columbus and Cincinnati, and our new Chicago market is starting to do pretty well for us as well," Schottenstein said.

M/I's Florida operations continued to slip, as that state's housing industry shows little sign of recovery.

The number of M/I buyers canceling home orders also declined slightly.

Revenue continued to drop significantly, from $156 million during the first quarter of 2008 to $96 million in this quarter. The company compensated by cutting expenses and improving its efficiencies, Schottenstein said.

M/I's employment has dropped from about 1,300 workers to about 500 today, he said.

"Clearly the lion's share of expense cutting is behind us," he said. "We think our organization now is right-sized for the level of business we're doing."

M/I's stock rose about 12 percent this morning on the earnings news.

jweiker@dispatch.com

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