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Jan. 29, 2020, 4:31 p.m. EST

Meritage Homes reports fourth quarter 2019 results including a 27% increase in orders, 80 bps increase in home closing gross margin and 39% increase in diluted EPS

SCOTTSDALE, Ariz., Jan 29, 2020 (GLOBE NEWSWIRE via COMTEX) -- SCOTTSDALE, Ariz., Jan. 29, 2020 (GLOBE NEWSWIRE) -- Meritage Homes Corporation /zigman2/quotes/209069331/composite MTH -2.48% , a leading U.S. homebuilder, today announced fourth quarter and full year results for the periods ended December 31, 2019.

Summary Operating Results (unaudited)
(Dollars in thousands, except per share amounts)

Three Months Ended December 31, Twelve Months Ended December 31,
2019 2018 % Chg 2019 2018 % Chg
Homes closed (units) 2,830 2,505 13 % 9,267 8,531 9 %
Home closing revenue $ 1,103,741 $ 996,063 11 % $ 3,604,629 $ 3,474,712 4 %
Average sales price - closings $ 390 $ 398 (2 )% $ 389 $ 407 (4 )%
Home orders (units) 2,093 1,653 27 % 9,616 8,089 19 %
Home order value $ 804,133 $ 644,210 25 % $ 3,683,502 $ 3,240,091 14 %
Average sales price - orders $ 384 $ 390 (1 )% $ 383 $ 401 (4 )%
Ending backlog (units) 2,782 2,433 14 %
Ending backlog value $ 1,098,158 $ 1,015,918 8 %
Average sales price - backlog $ 395 $ 418 (5 )%
Earnings before income taxes $ 110,535 $ 91,776 20 % $ 302,945 $ 283,254 7 %
Net earnings $ 103,614 $ 75,485 37 % $ 249,663 $ 227,332 10 %
Diluted EPS $ 2.65 $ 1.91 39 % $ 6.42 $ 5.58 15 %

MANAGEMENT COMMENTS"We delivered another quarter of strong results in the fourth quarter, capping off a solid performance for the full year 2019. The housing market remained strong through a traditionally quiet quarter, and with our strategic shift to entry-level fully implemented, Meritage was well positioned to capitalize on healthy demand, growing our sales volume, improving profitability and strengthening our balance sheet, while also positioning the company for long-term growth," said Steven J. Hilton, chairman and chief executive officer of Meritage Homes. "Our fourth quarter results continued the momentum we had achieved over the prior three quarters, producing the strongest quarterly year-over-year growth in orders all year; the highest home closing gross margin, which was very close to our underwriting target; the most efficient overhead leverage; and nearly a 40% increase in diluted earnings per share.

"Our total orders for new homes increased 27% in the fourth quarter year-over-year, driven by a 37% increase in absorptions and benefiting from our strategic focus on delivering more affordable homes. Home closing revenue was up 11% and our home closing gross margin improved 80 bps due to the efficiencies we're realizing from streamlining and simplifying our operations," he continued. "Total SG&A expenses as a percentage of home closing revenue were 50 bps lower year-over-year and our net earnings increased 37% with the benefit of energy tax credits recognized retroactively for two years after their renewal and extension in December of 2019. We used positive cash flow from operations to retire $300 million of debt, reducing our net debt to capital ratio to 26.2%, while also securing more than 6,800 additional lots in the fourth quarter for future growth and ending the year with $319 million in cash.

"Our LiVE.NOW.(R) homes for value-conscious buyers and our innovative approach to interior personalization with our Studio M(R) Design Collections for first move-up buyers are delivering what home buyers want, while also providing efficiencies for Meritage that translate to improved profitability," Mr. Hilton explained. "Absorptions in our LiVE.NOW. communities are significantly out-pacing traditional move-up communities, with equal or better margins."

He concluded, "Based on our expectation that economic drivers remain positive for housing demand, and our ability to deliver homes that provide great value at lower price points for the broadest sectors of homebuyers, we feel we are well positioned to drive future growth and success. We secured more than 18,000 new lots in 2019, compared to approximately 10,000 in 2018, greatly expanding our pipeline for community count growth and positioning us to deliver strong volume growth as those communities are opened and begin selling over the next 4-6 quarters. We believe we can grow earnings faster than our top-line growth in 2020, leveraging the operating improvements we've made over the past few years while continuing to expand and refine them. For the full year 2020, we are projecting 9,700-10,200 total home closings and ASP's between $360-370,000, with home closing gross margin in the mid-19's percent and a tax rate of approximately 22%."

FOURTH QUARTER RESULTS

  • Total orders for the fourth quarter of 2019 increased 27% year-over-year, driven by a 37% year-over-year increase in absorptions, largely due to strong demand for Meritage's entry-level priced LiVE.NOW. homes. Higher absorptions offset an 8% year-over-year decline in average community count for the fourth quarter, resulting from early close-outs of communities in 2019. Absorptions were up 38% in the West region, 46% in the Central and 29% in the East region, demonstrating broad strength across Meritage's markets. As a result of the Company's strategic product shift to lower-priced homes, fourth quarter average sales price (ASP) on orders and ending backlog were down 1% and 5%, respectively, compared to 2018.

  • The 11% increase in home closing revenue for the quarter reflected a 13% increase in home closing volume, partially offset by a 2% reduction in ASP due to the Company's strategic shift toward more affordable homes. Both West and East regions' home closing revenues were up 19% year-over-year, while Central region home closing revenue was 8% lower in 2019 than 2018, primarily due to fewer active communities open in the fourth quarter of 2019.

  • Home closing gross margin improved 80 bps to 19.8% from 19.0% a year ago, contributing to a 16% increase in total home closing gross profit over the prior year's fourth quarter. Fourth quarter 2019 gross margin was reduced by $3.1 million of inventory write-downs. Excluding real estate write-downs in both years ($0.9 million in 2018), home closing gross margins were 20.1% for the fourth quarter of 2019 and 19.1% for the fourth quarter of 2018.

  • Earnings from financial services unconsolidated were $3.7 million lower in the fourth quarter of 2019 compared to 2018 due to a change in the structure of customer incentives offered by the Company's mortgage joint venture. The benefits from those incentives are now captured as part of home closing revenue rather than financial services earnings.

  • Selling, general and administrative expenses (SG&A) totaled 10.1% of fourth quarter 2019 home closing revenue, a 50 bps reduction compared to 10.6% in the fourth quarter of 2018.

  • Fourth quarter 2019 also included a $5.6 million loss on early extinguishment of debt related to the early redemption of $300 million notes due 2020.

  • Fourth quarter 2019 pre-tax earnings margin increased 60 bps to 9.7% compared to 9.1% in 2018, reflecting increases in home closing gross margins and improved overhead leverage.

  • Income taxes were reduced by approximately $20 million from energy tax credits on qualified homes closed in 2018 and 2019 pursuant to the retroactive renewal and extension of such tax credits through 2020, which was approved by Congress in December 2019.

  • Net earnings increased 37% to $103.6 million ($2.65 per diluted share) for the fourth quarter of 2019, compared to $75.5 million ($1.91 per diluted share) for the fourth quarter of 2018, also benefiting from retroactive energy tax credits recorded in 2019.

FULL YEAR RESULTS

  • Total orders for the full year 2019 increased 19% year-over-year, as absorptions increased to 37.3 for the year (approximately 3.1 per month) in 2019, over 31.4 (approximately 2.6 per month) for 2018. The 19% increase in absorptions was primarily driven by the shift toward more entry-level communities, which sell at a higher pace. At year-end 2019, entry-level communities made up 47% of total communities, compared to 33% at the end of 2018.

  • Home closings for the full year were up 9% over 2018, while ASP on closings was 4% lower than the previous year due to the shift toward more affordable homes, resulting in a net 4% increase in total home closing revenue for the year.

  • Home closing gross margin increased to 18.9% for the full year 2019 compared to 18.2% in 2018, which drove an 8% increase in total home closing gross profit for the full year of 2019. Excluding real estate write-downs in both years ($3.2 million in 2019 and $2.2 million in 2018), home closing gross margin was 19.0% in 2019 and 18.3% in 2018.

  • SG&A expenses as a percentage of home closing revenue for the full year were flat at 10.9% in both 2019 and 2018, as leverage and operating efficiencies in 2019 were partially offset by costs associated with the start-up and operation of our Studio M design studios, in addition to severance expenses and accelerated equity compensation expense taken in the first quarter of 2019 as a result of changes in tax rules.

  • Interest expense increased $7.6 million year-over-year, primarily due to less interest capitalizable to assets under development in 2019, reflecting shortened construction cycle times and faster inventory turnover.

  • Other income (net) decreased by $1.6 million in 2019 primarily due to 2018 including a $4.8 million favorable legal settlement related to a previous joint venture in Nevada.

  • Net earnings of $249.7 million ($6.42 per diluted share) increased 10% (15% for diluted EPS) for the full year of 2019, compared to $227.3 million ($5.58 per diluted share) in 2018. Increases in home closing revenue and gross margin year-to-date in 2019 were partially offset by higher interest expense and the $5.6 million charge for early extinguishment of debt in the fourth quarter of 2019, resulting in a net 7% increase in earnings before income taxes. The effective tax rate for the full year 2019 was 18%, compared to 20% in 2018, reflecting the benefit of the retroactive energy tax credits renewed in 2019. Full year diluted EPS also increased due to a 5% reduction in weighted average shares outstanding, as compared to 2018, resulting from share repurchases in late 2018 and early 2019.

BALANCE SHEET

  • Cash and cash equivalents at December 31, 2019 totaled $319.5 million, compared to $311.5 million at December 31, 2018.

  • Positive cash flow from operations was used for the early redemption in December 2019 of $300 million of 7.15% senior notes due in 2020.

  • Total real estate assets was relatively flat at approximately $2.7 billion at December 31, 2019, as homes under construction increased to provide additional entry-level spec inventory for sale and quick move-in, consistent with the Company's strategy, and were offset by declines in land inventory, which is expected to be replenished with additional newly-contracted lots.

  • Meritage ended the fourth quarter of 2019 with approximately 41,400 total lots owned or under control, compared to approximately 34,600 total lots at December 31, 2018, with over 6,800 lots added for approximately 46 new communities in the fourth quarter of 2019 alone. Approximately 85% of the lots added during 2019 were in LiVE.NOW. communities for entry-level homes.

  • Debt-to-capital ratios decreased to 34.0% at December 31, 2019 from 43.2% at December 31, 2018, and net debt-to-capital ratio declined to 26.2% at year-end 2019 from 36.7% at year-end 2018.

CONFERENCE CALL
Management will host a conference call to discuss the results at 7:30 a.m. Arizona Time (9:30 a.m. Eastern Time) on Thursday, January 30. The call will be webcast with an accompanying slideshow available on the "Investor Relations" page of the Company's web site at http://investors.meritagehomes.com . Telephone participants can avoid delays by preregistering for the call using the following link to receive a special dial-in number and PIN.

Conference Call registration link: http://dpregister.com/10137933 .

Telephone participants who are unable to preregister may dial into 1-866-226-4948 US toll free on the day of the call. International dial-in number is 1-412-902-4125 or 1-855-669-9657 toll free for Canada.

A replay of the call will be available beginning at approximately 12:00 p.m. ET on January 30 and extending through February 13, 2020, on the website noted above or by dialing 1-877-344-7529 US toll free, 1-412-317-0088 for international or 1-855-669-9658 toll free for Canada, and referencing conference number 10137933.

Contacts: Brent Anderson, VP Investor Relations
(972) 580-6360 (office)
investors@meritagehomes.com

Meritage Homes Corporation and Subsidiaries
Consolidated Income Statements
(Unaudited)
(In thousands, except per share data)

Three Months Ended December 31,
2019 2018 Change $ Change %
Homebuilding:
Home closing revenue $ 1,103,741 $ 996,063 $ 107,678 11 %
Land closing revenue 33,107 12,716 20,391 160 %
Total closing revenue 1,136,848 1,008,779 128,069 13 %
Cost of home closings (884,778 ) (806,550 ) (78,228 ) 10 %
Cost of land closings (32,750 ) (13,541 ) (19,209 ) 142 %
Total cost of closings (917,528 ) (820,091 ) (97,437 ) 12 %
Home closing gross profit 218,963 189,513 29,450 16 %
Land closing gross profit/(loss) 357 (825 ) 1,182 143 %
Total closing gross profit 219,320 188,688 30,632 16 %
Financial Services:
Revenue 4,756 4,412 344 8 %
Expense (1,832 ) (1,618 ) (214 ) 13 %
Earnings from financial services unconsolidated entities and other, net 1,340 5,058 (3,718 ) (74 )%
Financial services profit 4,264 7,852 (3,588 ) (46 )%
Commissions and other sales costs (70,598 ) (68,040 ) (2,558 ) 4 %
General and administrative expenses (40,557 ) (37,474 ) (3,083 ) 8 %
Interest expense (20 ) (552 ) 532 (96 )%
Other income, net 3,761 1,302 2,459 189 %
Loss on early extinguishment of debt (5,635 ) -- (5,635 ) n/a
Earnings before income taxes 110,535 91,776 18,759 20 %
Provision for income taxes (6,921 ) (16,291 ) 9,370 (58 )%
Net earnings $ 103,614 $ 75,485 $ 28,129 37 %
Earnings per common share:
Basic Change $ orshares Change %
Earnings per common share $ 2.71 $ 1.93 $ 0.78 40 %
Weighted average shares outstanding 38,252 39,026 (774 ) (2 )%
Diluted
Earnings per common share $ 2.65 $ 1.91 $ 0.74 39 %
Weighted average shares outstanding 39,137 39,575 (438 ) (1 )%

Meritage Homes Corporation and SubsidiariesConsolidated Income Statements(Unaudited)(In thousands, except per share data)

Twelve Months Ended December 31,
2019 2018 Change $ Change %
Homebuilding:
Home closing revenue $ 3,604,629 $ 3,474,712 $ 129,917 4 %
Land closing revenue 45,854 38,707 7,147 18 %
Total closing revenue 3,650,483 3,513,419 137,064 4 %
Cost of home closings (2,923,969 ) (2,842,762 ) (81,207 ) 3 %
Cost of land closings (46,899 ) (41,504 ) (5,395 ) 13 %
Total cost of closings (2,970,868 ) (2,884,266 ) (86,602 ) 3 %
Home closing gross profit 680,660 631,950 48,710 8 %
Land closing (loss)/gross profit (1,045 ) (2,797 ) 1,752 63 %
Total closing gross profit 679,615 629,153 50,462 8 %
Financial Services:
Revenue 16,461 15,162 1,299 9 %
Expense (6,781 ) (6,454 ) (327 ) 5 %
Earnings from financial services unconsolidated entities and other, net 10,899 15,336 (4,437 ) (29 )%
Financial services profit 20,579 24,044 (3,465 ) (14 )%
Commissions and other sales costs (246,728 ) (241,897 ) (4,831 ) 2 %
General and administrative expenses (146,093 ) (138,478 ) (7,615 ) 5 %
Interest expense (8,370 ) (785 ) (7,585 ) n/m
Other income, net 9,577 11,217 (1,640 ) (15 )%
Loss on early extinguishment of debt (5,635 ) -- (5,635 ) n/a
Earnings before income taxes 302,945 283,254 19,691 7 %
Provision for income taxes (53,282 ) (55,922 ) 2,640 (5 )%
Net earnings $ 249,663 $ 227,332 $ 22,331 10 %
Earnings per common share:
Basic Change $ orshares Change %
Earnings per common share $ 6.55 $ 5.67 $ 0.88 16 %
Weighted average shares outstanding 38,100 40,107 (2,007 ) (5 )%
Diluted
Earnings per common share $ 6.42 $ 5.58 $ 0.84 15 %
Weighted average shares outstanding 38,891 40,728 (1,837 ) (5 )%

Meritage Homes Corporation and Subsidiaries
Consolidated Balance Sheets
(In thousands)
(unaudited)

December 31, 2019 December 31, 2018
Assets:
Cash and cash equivalents $ 319,466 $ 311,466
Other receivables 88,492 77,285
Real estate [(1)] 2,744,361 2,742,621
Deposits on real estate under option or contract 50,901 51,410
Investments in unconsolidated entities 4,443 17,480
Property and equipment, net 50,606 54,596
Deferred tax asset 25,917 26,465
Prepaids, other assets and goodwill 114,063 84,156
Total assets $ 3,398,249 $ 3,365,479
Liabilities:
Accounts payable $ 155,024 $ 128,169
Accrued liabilities 226,008 177,862
Home sale deposits 24,246 28,636
Loans payable and other borrowings 22,876 14,773
Senior notes 996,105 1,295,284
Total liabilities 1,424,259 1,644,724
Stockholders' Equity:
Preferred stock -- --
Common stock 382 381
Additional paid-in capital 505,352 501,781
Retained earnings 1,468,256 1,218,593
Total stockholders' equity 1,973,990 1,720,755
Total liabilities and stockholders' equity $ 3,398,249 $ 3,365,479
[(1)] Real estate - Allocated costs:
Homes under contract under construction $ 564,762 $ 480,143
Unsold homes, completed and under construction 686,948 644,717
Model homes 121,340 146,327
Finished home sites and home sites under development 1,371,311 1,471,434
Total real estate $ 2,744,361 $ 2,742,621

Supplemental Information and Non-GAAP Financial Disclosures (Dollars in thousands - unaudited):

Three Months Ended December 31, Twelve Months Ended December 31,
2019 2018 2019 2018
Depreciation and amortization $ 8,370 $ 7,508 $ 27,923 $ 26,966
Summary of Capitalized Interest:
Capitalized interest, beginning of period $ 88,195 $ 88,064 $ 88,454 $ 78,564
Interest incurred 19,629 21,490 83,856 85,278
Interest expensed (20 ) (552 ) (8,370 ) (785 )
Interest amortized to cost of home and land closings (25,790 ) (20,548 ) (81,926 ) (74,603 )
Capitalized interest, end of period $ 82,014 $ 88,454 $ 82,014 $ 88,454
December 31,2019 December 31,2018
Notes payable and other borrowings $ 1,018,981 $ 1,310,057
Stockholders' equity 1,973,990 1,720,755
Total capital 2,992,971 3,030,812
Debt-to-capital 34.0 % 43.2 %
Notes payable and other borrowings $ 1,018,981 $ 1,310,057
Less: cash and cash equivalents (319,466 ) (311,466 )
Net debt 699,515 998,591
Stockholders' equity 1,973,990 1,720,755
Total net capital $ 2,673,505 $ 2,719,346
Net debt-to-capital 26.2 % 36.7 %


Meritage Homes Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(In thousands) (unaudited)

Twelve Months Ended December 31,
2019 2018
Cash flows from operating activities:
Net earnings $ 249,663 $ 227,332
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization 27,923 26,966
Stock-based compensation 19,607 17,170
Loss on early extinguishment of debt 5,635 --
Equity in earnings from unconsolidated entities (11,945 ) (16,333 )
Deferred tax asset revaluation -- (2,741 )
Distribution of earnings from unconsolidated entities 13,438 16,142
Other 9,273 15,847
Changes in assets and liabilities:
Decrease/(increase) in real estate 3,621 (19,426 )
Decrease in deposits on real estate under option or contract 453 12,444
(Increase)/decrease in receivables, prepaids and other assets (9,112 ) 3,042
Increase/(decrease) in accounts payable and accrued liabilities 42,654 (12,820 )
Decrease in home sale deposits (4,390 ) (5,423 )
Net cash provided by operating activities 346,820 262,200
Cash flows from investing activities:
Investments in unconsolidated entities (1,113 ) (808 )
Distributions of capital from unconsolidated entities 11,550 597
Purchases of property and equipment (24,385 ) (33,415 )
Proceeds from sales of property and equipment 459 99
Maturities/sales of investments and securities 754 1,181
Payments to purchase investments and securities (754 ) (1,181 )
Net cash used in investing activities (13,489 ) (33,527 )
Cash flows from financing activities:
Repayment of loans payable and other borrowings (3,676 ) (15,755 )
Repayment of senior notes and senior convertible notes (305,620 ) (175,000 )
Proceeds from issuance of senior notes -- 206,000
Payment of debt issuance costs -- (3,198 )
Repurchase of shares (16,035 ) (100,000 )
Net cash used in financing activities (325,331 ) (87,953 )
Net increase in cash and cash equivalents 8,000 140,720
Beginning cash and cash equivalents 311,466 170,746
Ending cash and cash equivalents $ 319,466 $ 311,466

Meritage Homes Corporation and Subsidiaries
Operating Data
(Dollars in thousands)
(unaudited)

Three Months Ended
December 31, 2019 December 31, 2018
Homes Value Homes Value
Homes Closed:
Arizona 581 $ 187,670 453 $ 141,622
California 285 181,307 206 144,179
Colorado 204 102,989 212 111,461
West Region 1,070 471,966 871 397,262
Texas 800 273,566 836 298,824
Central Region 800 273,566 836 298,824
Florida 372 147,227 317 126,136
Georgia 147 51,052 152 54,732
North Carolina 265 98,769 166 63,078
South Carolina 70 21,858 98 32,011
Tennessee 106 39,303 65 24,020
East Region 960 358,209 798 299,977
Total 2,830 $ 1,103,741 2,505 $ 996,063
Homes Ordered:
Arizona 354 $ 115,404 300 $ 98,290
California 231 143,573 109 72,227
Colorado 142 71,276 116 60,398
West Region 727 330,253 525 230,915
Texas 697 232,644 591 209,787
Central Region 697 232,644 591 209,787
Florida 255 97,025 190 79,632
Georgia 106 37,004 94 32,413
North Carolina 207 73,999 149 55,929
South Carolina 49 14,785 66 20,652
Tennessee 52 18,423 38 14,882
East Region 669 241,236 537 203,508
Total 2,093 $ 804,133 1,653 $ 644,210

Meritage Homes Corporation and Subsidiaries
Operating Data
(Dollars in thousands)
(unaudited)

Twelve Months Ended
December 31, 2019 December 31, 2018
Homes Value Homes Value
Homes Closed:
Arizona 1,707 $ 556,432 1,505 $ 485,867
California 749 486,153 849 588,975
Colorado 711 367,468 628 342,984
West Region 3,167 1,410,053 2,982 1,417,826
Texas 2,976 1,033,755 2,840 1,006,221
Central Region 2,976 1,033,755 2,840 1,006,221
Florida 1,181 468,591 1,078 455,292
Georgia 527 183,492 468 161,969
North Carolina 823 303,635 654 254,207
South Carolina 272 88,371 309 104,622
Tennessee 321 116,732 200 74,575
East Region 3,124 1,160,821 2,709 1,050,665
Total 9,267 $ 3,604,629 8,531 $ 3,474,712
Homes Ordered:
Arizona 1,875 $ 608,795 1,522 $ 499,353
California 803 511,767 622 432,134
Colorado 722 361,336 614 331,389
West Region 3,400 1,481,898 2,758 1,262,876
Texas 3,043 1,031,937 2,801 995,473
Central Region 3,043 1,031,937 2,801 995,473
Florida 1,180 466,528 1,004 422,925
Georgia 537 186,735 440 157,706
North Carolina 865 315,572 588 224,552
South Carolina 254 80,325 299 101,426
Tennessee 337 120,507 199 75,133
East Region 3,173 1,169,667 2,530 981,742
Total 9,616 $ 3,683,502 8,089 $ 3,240,091
Order Backlog:
Arizona 511 $ 186,194 343 $ 133,567
California 145 92,171 91 66,391
Colorado 196 97,508 185 103,470
West Region 852 375,873 619 303,428
Texas 1,048 372,520 981 372,826
Central Region 1,048 372,520 981 372,826
Florida 371 163,385 372 164,728
Georgia 133 49,742 123 46,344
North Carolina 219 79,446 177 67,316
South Carolina 71 24,427 89 32,333
Tennessee 88 32,765 72 28,943
East Region 882 349,765 833 339,664
Total 2,782 $ 1,098,158 2,433 $ 1,015,918

Meritage Homes Corporation and Subsidiaries
Operating Data
(unaudited)

Three Months Ended
December 31, 2019 December 31, 2018
Ending Average Ending Average
Active Communities:
Arizona 31 34.0 40 42.0
California 24 24.0 17 15.5
Colorado 18 19.0 20 20.0
West Region 73 77.0 77 77.5
Texas 77 75.5 95 93.5
Central Region 77 75.5 95 93.5
Florida 33 34.5 31 30.5
Georgia 18 18.0 22 22.0
North Carolina 25 23.5 25 22.5
South Carolina 9 9.5 12 12.0
Tennessee 9 9.0 10 10.0
East Region 94 94.5 100 97.0
Total 244 247.0 272 268.0


Twelve Months Ended
December 31, 2019 December 31, 2018
Ending Average Ending Average
Active Communities:
Arizona 31 35.5 40 39.0
California 24 20.5 17 18.5
Colorado 18 19.0 20 15.5
West Region 73 75.0 77 73.0
Texas 77 86.0 95 93.5
Central Region 77 86.0 95 93.5
Florida 33 32.0 31 29.5
Georgia 18 20.0 22 20.5
North Carolina 25 25.0 25 21.0
South Carolina 9 10.5 12 12.5
Tennessee 9 9.5 10 8.0
East Region 94 97.0 100 91.5
Total 244 258.0 272 258.0

ABOUT MERITAGE HOMES CORPORATION

Meritage Homes is the seventh-largest public homebuilder in the United States, based on homes closed in 2018. Meritage offers a variety of homes that are designed with a focus on first-time and first move-up buyers in Arizona, California, Colorado, Texas, Florida, Georgia, North Carolina, South Carolina and Tennessee.

The Company has designed and built over 125,000 homes in its 35-year history, and has a reputation for its distinctive style, quality construction, and positive customer experience. Meritage is the industry leader in energy-efficient homebuilding and has received the U.S. Environmental Protection Agency's ENERGY STAR(R) Partner of the Year for Sustained Excellence Award every year since 2013 for innovation and industry leadership in energy efficient homebuilding.

For more information, visit www.meritagehomes.com .

The information included in this press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include management's projected full year 2020 home closings, home closing revenue, home closing gross margin and tax rate, as well as expectations regarding new community openings, the U.S. economy and housing market.

Such statements are based on the current beliefs and expectations of Company management, and current market conditions, which are subject to significant uncertainties and fluctuations. Actual results may differ from those set forth in the forward-looking statements. The Company makes no commitment, and disclaims any duty, to update or revise any forward-looking statements to reflect future events or changes in these expectations, except as required by law. Meritage's business is subject to a number of risks and uncertainties. As a result of those risks and uncertainties, the Company's stock and note prices may fluctuate dramatically. These risks and uncertainties include, but are not limited to, the following: changes in interest rates and the availability and pricing of residential mortgages; legislation related to tariffs; the availability and cost of finished lots and undeveloped land; shortages in the availability and cost of labor; the success of strategic initiatives; the ability of our potential buyers to sell their existing homes; inflation in the cost of materials used to develop communities and construct homes; the adverse effect of slow absorption rates; impairments of our real estate inventory; cancellation rates; competition; changes in tax laws that adversely impact us or our homebuyers; a change to the feasibility of projects under option or contract that could result in the write-down or write-off of earnest or option deposits; our potential exposure to and impacts from natural disasters or severe weather conditions; home warranty and construction defect claims; failures in health and safety performance; our success in prevailing on contested tax positions; our ability to obtain performance and surety bonds in connection with our development work; the loss of key personnel; failure to comply with laws and regulations; our limited geographic diversification; fluctuations in quarterly operating results; our level of indebtedness; our ability to obtain financing if our credit ratings are downgraded; our ability to successfully integrate acquired companies and achieve anticipated benefits from these acquisitions; our compliance with government regulations, the effect of legislative and other governmental actions, orders, policies or initiatives that impact housing, labor availability, construction, mortgage availability, our access to capital, the cost of capital or the economy in general, or other initiatives that seek to restrain growth of new housing construction or similar measures; legislation relating to energy and climate change; the replication of our energy-efficient technologies by our competitors; our exposure to information technology failures and security breaches; negative publicity that affects our reputation and other factors identified in documents filed by the Company with the Securities and Exchange Commission, including those set forth in our Form 10-K for the year ended December 31, 2018 and our Form 10-Q for the quarter ended September 30, 2019 under the caption "Risk Factors," which can be found on our website at www.investors.meritagehomes.com .

(C) Copyright 2020 GlobeNewswire, Inc. All rights reserved.

/zigman2/quotes/209069331/composite
US : U.S.: NYSE
$ 69.50
-1.77 -2.48%
Volume: 631,985
May 29, 2020 3:59p
P/E Ratio
9.18
Dividend Yield
N/A
Market Cap
$2.61 billion
Rev. per Employee
$4.61M
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