Meritage Homes reports diluted EPS of $5.58 for 2018, with 14% increase in pre-tax earnings on 11% growth in home closings
Completed previously authorized $100 million share repurchase program
SCOTTSDALE, Ariz., Jan. 30, 2019 (GLOBE NEWSWIRE) -- Meritage Homes Corporation (NYSE: MTH), a leading U.S. homebuilder, today announced fourth quarter and full year results for the periods ended December 31, 2018.
| Summary Operating Results (unaudited) | |||||||||||||||||||||
| (Dollars in thousands, except per share amounts) | |||||||||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||||
| 2018 | 2017 | % Chg | 2018 | 2017 | % Chg | ||||||||||||||||
| Homes closed (units) | 2,505 | 2,253 | 11 | % | 8,531 | 7,709 | 11 | % | |||||||||||||
| Home closing revenue | $ | 996,063 | $ | 923,370 | 8 | % | $ | 3,474,712 | $ | 3,186,775 | 9 | % | |||||||||
| Average sales price - closings | $ | 398 | $ | 410 | (3 | )% | $ | 407 | $ | 413 | (1 | )% | |||||||||
| Home orders (units) | 1,653 | 1,795 | (8 | )% | 8,089 | 7,957 | 2 | % | |||||||||||||
| Home order value | $ | 644,210 | $ | 760,340 | (15 | )% | $ | 3,240,091 | $ | 3,296,788 | (2 | )% | |||||||||
| Average sales price - orders | $ | 390 | $ | 424 | (8 | )% | $ | 401 | $ | 414 | (3 | )% | |||||||||
| Ending backlog (units) | 2,433 | 2,875 | (15 | )% | |||||||||||||||||
| Ending backlog value | $ | 1,015,918 | $ | 1,245,771 | (18 | )% | |||||||||||||||
| Average sales price - backlog | $ | 418 | $ | 433 | (4 | )% | |||||||||||||||
| Earnings before income taxes | $ | 91,776 | $ | 84,090 | 9 | % | $ | 283,254 | $ | 247,519 | 14 | % | |||||||||
| Net earnings | $ | 75,485 | $ | 35,553 | 112 | % | $ | 227,332 | $ | 143,255 | 59 | % | |||||||||
| Diluted EPS | $ | 1.91 | $ | 0.87 | 120 | % | $ | 5.58 | $ | 3.41 | 64 | % | |||||||||
MANAGEMENT COMMENTS
“2018 was a year of growth and transition for Meritage as well as the broader housing market. Our home closings grew 11% for the year and we increased diluted earnings per share by 64% over 2017, with a 60 bps improvement in our home closing gross margin. The strong demand early in the year waned in the later months of 2018 as rising interest rates and home prices caused buyers to delay their home purchasing decisions,” said Steven J. Hilton, chairman and chief executive officer of Meritage Homes. “This was most evident in higher-priced communities, while the demand for affordable entry-level homes continued to outpace the move-up market.
“We made additional progress in aligning our strategy of streamlining and driving efficiency to ultimately better serve our customers, especially the growing number of first-time buyers. Our LiVE.NOW.® communities are targeted at this large and under-served demographic of homebuyers,” explained Mr. Hilton. “The construction and operating efficiencies we’re achieving are allowing us to offer more affordable homes while also generating greater profitability. Our increased home closing gross margin was a primary driver of the 59% growth in net earnings for the year and exceeded our initial expectation for 2018.
He added, "We also strengthened our balance sheet, reducing our net debt-to-capital ratio by almost 500 bps, while returning capital to our investors through the repurchase of $100 million of our outstanding shares.
“As a result of the pause in home buying activity during the latter part of 2018, our orders for the fourth quarter were down 8% from the strong fourth quarter of 2017. Despite the order declines in the second half of the year, our full year orders were up 2% over 2017. Orders for more affordable entry-level homes expanded approximately 25% to 41% of our full year orders for 2018, up from approximately one-third of orders a year ago," he continued. “Markets like California, Denver and Dallas, which had experienced the strongest orders pace and home price appreciation over the last few years, were among those most impacted by reduced affordability and changing buyer preferences, as reflected in our fourth quarter year-over-year order trends, and we are in the process of ramping up our entry-level communities in those markets.
"As we continue the transition to more entry-level communities for the Millennial generation, as well as Baby Boomers looking to move down into a new home, we believe we’re well positioned to address what is expected to be the strongest part of the market for the next decade," concluded Mr. Hilton. “While the near-term outlook is less clear, we’re confident in the longer-term opportunities, considering the underlying drivers for housing demand remain strong. Economic and job growth, household formations, higher incomes and strong consumer confidence, combined with relatively low inventories of homes for sale and the prospect of interest rates stabilizing, should continue to drive demand. We expect to share our projections for the full year 2019 next quarter after we assess market conditions with the benefit of the spring selling season.”
FOURTH QUARTER RESULTS
- Pre-tax earnings increased 9% over the prior year to $91.8 million for the fourth quarter of 2018, from $84.1 million in the fourth quarter of 2017. Pre-tax earnings growth primarily reflects higher home closing revenue and gross margins. Fourth quarter net earnings were $75.5 million ($1.91 per diluted share) in 2018, compared to $35.6 million ($0.87 per diluted share) in 2017. The 120% increase in diluted EPS reflects the benefit of an effective tax rate of 18% in 2018, compared to 58% in the fourth quarter of 2017, which included a $19.7 million charge resulting from a revaluation of the Company's deferred tax asset based on lower corporate tax rates enacted in 2017 and effective in 2018, as well as a 1.5 million reduction in diluted share count primarily due to the repurchase of shares in the fourth quarter of 2018.
- Home closing revenue increased 8% over the prior year on 11% higher closing volume. Average closing prices for homes were 3% lower in the fourth quarter of 2018, reflecting a mix shift toward more entry-level homes. Fourth quarter closings grew year-over-year in all states but California, where a 21% decline in closings resulted from lower absorptions and fewer communities on average in the fourth quarter of 2018 compared to 2017.
- Home closing gross margin increased to 19.0% for the fourth quarter of 2018, its highest level since 2015, and compared to 18.2% in the fourth quarter of 2017. The improved margins reflect efficiencies in operations and cost controls within an inflationary environment.
- Land closing gross profit of $2.9 million in the fourth quarter of 2017 benefited the prior year's net earnings, while 2018 land closings included $2.2 million of impairments, resulting in a net loss of $825,000.
- Selling, general and administrative expenses totaled 10.6% of home closing revenue compared to 10.4% in the fourth quarter of 2017. Additional marketing costs and sales commissions were incurred in an effort to stimulate orders in the fourth quarter of 2018, which combined with lower than expected closings and resulted in a loss of leverage of overhead expenses.
- Total orders for the fourth quarter were 8% lower than 2017, which benefited from a rebound in Florida and Houston orders following the hurricanes during the third quarter of 2017. Those events contributed to an unusually strong fourth quarter of 2017 with 20% orders growth and an 18% increase in absorptions over 2016. Traffic levels and gross sales in the fourth quarter of 2018 were on par or better than the previous year, though cancellations increased to 21% of orders from 16% in the prior year, reflecting heightened caution among buyers due to uncertain market conditions. This was especially pronounced in California and Colorado, where absorptions came down to near the company average in 2018, compared to their highly elevated levels in 2017.
YEAR TO DATE RESULTS
- Pre-tax earnings increased 14% for the year to $283.3 million in 2018, from $247.5 million in 2017, primarily reflecting higher home closing revenue and home closing gross margin, similar to fourth quarter comparisons.
- Net earnings of $227.3 million ($5.58 per diluted share) for the year 2018 compared to $143.3 million ($3.41 per diluted share) in 2017, also reflected the benefit of a 20% effective tax rate in 2018 compared to 42% in 2017, and a 1.5 million reduction in diluted shares for the year.
- A 9% increase in home closing revenue over 2017 was due to an 11% increase in home closing volume, partially offset by a 1% decrease in average closing price, due to an intentional shift toward more entry-level communities with higher absorptions.
- A 60 bps improvement in home closing gross margin – 18.2% in 2018 compared to 17.6% in 2017 -- combined with the 9% increase in home closing revenue, drove a 12% increase in home closing gross profit and the 14% increase in pre-tax earnings.
- Total selling, general and administrative expenses were relatively flat at 10.9% and 10.8% of home closing revenue in 2018 and 2017, respectively.
- Total orders for the year increased 2% over 2017, with a 2% decline in total orders value, reflecting a 3% reduction in ASP (average sales price) for the year, as the overall mix shifted more towards lower-priced entry-level homes.
BALANCE SHEET
- Cash and cash equivalents at December 31, 2018, totaled $311.5 million, compared to $170.7 million at December 31, 2017. The increase was primarily due to a $209 million reduction in total land and development spending in 2018, primarily due to lower average lot cost of new entry-level lots and constrained spending in the second half of the year, partially offset by $100 million of share repurchases.
- A total of $195 million was invested in land and development during the fourth quarter of 2018 to meet expected demand and maintain an adequate supply of lots. Total spending on land and development for the full year 2018 was $812 million, compared to $1.02 billion in 2017.
- Meritage ended 2018 with approximately 34,600 total lots owned or under control, in line with approximately 34,300 total lots at December 31, 2017, translating to 4.1 and 4.5 years supply, respectively, based on trailing twelve months closings. Management targets maintaining a 4-5 year supply of lots. Approximately 69% of total controlled lots were owned and 85% of newly controlled lots in 2018 are intended for entry-level communities.
- The Company repurchased and retired approximately 2.58 million shares (approximately 6.4% of outstanding common stock at the beginning of the year) for $100 million during 2018, completing the full amount previously authorized by the Company’s Board of Directors.
- Debt-to-capital and net debt-to-capital ratios of 43.2% and 36.7%, respectively at December 31, 2018, were reduced from 44.9% and 41.4%, respectively at December 31, 2017, strengthening the Company's balance sheet and providing greater flexibility to respond to dynamic market conditions.
CONFERENCE CALL
Management will host a conference call to discuss the results at 8:00 a.m. Arizona Time (10:00 a.m. Eastern Time) on Thursday, January 31. 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 pre-registering for the call using the following link to receive a special dial-in number and PIN.
Conference Call registration link: http://dpregister.com/10127573
Telephone participants who are unable to pre-register may dial in to 1-866-226-4948 on the day of the call. International dial-in number is 1-412-902-4125 or 1-855-669-9657 for Canada.
A replay of the call will be available beginning at approximately 12:00 p.m. ET on January 31 and extending through February 14, 2019, on the website noted above or by dialing 1-877-344-7529, 1-412-317-0088 for international or 1-855-669-9658 for Canada, and referencing conference number 10127573.
| Meritage Homes Corporation and Subsidiaries | ||||||||||||||||
| Consolidated Income Statements | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| (In thousands, except per share data) | ||||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Homebuilding: | ||||||||||||||||
| Home closing revenue | $ | 996,063 | $ | 923,370 | $ | 3,474,712 | $ | 3,186,775 | ||||||||
| Land closing revenue | 12,716 | 23,055 | 38,707 | 39,997 | ||||||||||||
| Total closing revenue | 1,008,779 | 946,425 | 3,513,419 | 3,226,772 | ||||||||||||
| Cost of home closings | (806,550 | ) | (755,067 | ) | (2,842,762 | ) | (2,624,636 | ) | ||||||||
| Cost of land closings | (13,541 | ) | (20,133 | ) | (41,504 | ) | (35,637 | ) | ||||||||
| Total cost of closings | (820,091 | ) | (775,200 | ) | (2,884,266 | ) | (2,660,273 | ) | ||||||||
| Home closing gross profit | 189,513 | 168,303 | 631,950 | 562,139 | ||||||||||||
| Land closing (loss)/gross profit | (825 | ) | 2,922 | (2,797 | ) | 4,360 | ||||||||||
| Total closing gross profit | 188,688 | 171,225 | 629,153 | 566,499 | ||||||||||||
| Financial Services: | ||||||||||||||||
| Revenue | 4,412 | 4,061 | 15,162 | 14,203 | ||||||||||||
| Expense | (1,618 | ) | (1,552 | ) | (6,454 | ) | (6,006 | ) | ||||||||
| Earnings from financial services unconsolidated entities and other, net | 5,058 | 4,185 | 15,336 | 13,858 | ||||||||||||
| Financial services profit | 7,852 | 6,694 | 24,044 | 22,055 | ||||||||||||
| Commissions and other sales costs | (68,040 | ) | (62,781 | ) | (241,897 | ) | (221,647 | ) | ||||||||
| General and administrative expenses | (37,474 | ) | (33,192 | ) | (138,478 | ) | (124,041 | ) | ||||||||
| (Loss)/earnings from other unconsolidated entities, net | (91 | ) | 1,249 | 601 | 2,101 | |||||||||||
| Interest expense | (552 | ) | (292 | ) | (785 | ) | (3,853 | ) | ||||||||
| Other income, net | 1,393 | 1,187 | 10,616 | 6,405 | ||||||||||||
| Earnings before income taxes | 91,776 | 84,090 | 283,254 | 247,519 | ||||||||||||
| Provision for income taxes | (16,291 | ) | (48,537 | ) | (55,922 | ) | (104,264 | ) | ||||||||
| Net earnings | $ | 75,485 | $ | 35,553 | $ | 227,332 | $ | 143,255 | ||||||||
| Earnings per share: | ||||||||||||||||
| Basic | ||||||||||||||||
| Earnings per share | $ | 1.93 | $ | 0.88 | $ | 5.67 | $ | 3.56 | ||||||||
| Weighted average shares outstanding | 39,026 | 40,328 | 40,107 | 40,287 | ||||||||||||
| Diluted | ||||||||||||||||
| Earnings per share | $ | 1.91 | $ | 0.87 | $ | 5.58 | $ | 3.41 | ||||||||
| Weighted average shares outstanding | 39,575 | 41,073 | 40,728 | 42,228 | ||||||||||||
| Meritage Homes Corporation and Subsidiaries | |||||||
| Consolidated Balance Sheets | |||||||
| (In thousands) | |||||||
| (unaudited) | |||||||
| December 31, 2018 | December 31, 2017 | ||||||
| Assets: | |||||||
| Cash and cash equivalents | $ | 311,466 | $ | 170,746 | |||
| Other receivables | 77,285 | 79,317 | |||||
| Real estate (1) | 2,742,621 | 2,731,380 | |||||
| Real estate not owned | — | 38,864 | |||||
| Deposits on real estate under option or contract | 51,410 | 59,945 | |||||
| Investments in unconsolidated entities | 17,480 | 17,068 | |||||
| Property and equipment, net | 54,596 | 33,631 | |||||
| Deferred tax asset | 26,465 | 35,162 | |||||
| Prepaids, other assets and goodwill | 84,156 | 85,145 | |||||
| Total assets | $ | 3,365,479 | $ | 3,251,258 | |||
| Liabilities: | |||||||
| Accounts payable | $ | 128,169 | $ | 140,516 | |||
| Accrued liabilities | 177,862 | 181,076 | |||||
| Home sale deposits | 28,636 | 34,059 | |||||
| Liabilities related to real estate not owned | — | 34,978 | |||||
| Loans payable and other borrowings | 14,773 | 17,354 | |||||
| Senior notes | 1,295,284 | 1,266,450 | |||||
| Total liabilities | 1,644,724 | 1,674,433 | |||||
| Stockholders' Equity: | |||||||
| Preferred stock | — | — | |||||
| Common stock | 381 | 403 | |||||
| Additional paid-in capital | 501,781 | 584,578 | |||||
| Retained earnings | 1,218,593 | 991,844 | |||||
| Total stockholders’ equity | 1,720,755 | 1,576,825 | |||||
| Total liabilities and stockholders’ equity | $ | 3,365,479 | $ | 3,251,258 | |||
| (1) Real estate – Allocated costs: | |||||||
| Homes under contract under construction | $ | 480,143 | $ | 566,474 | |||
| Unsold homes, completed and under construction | 644,717 | 516,577 | |||||
| Model homes | 146,327 | 142,026 | |||||
| Finished home sites and home sites under development | 1,471,434 | 1,506,303 | |||||
| Total real estate | $ | 2,742,621 | $ | 2,731,380 | |||
| Supplemental Information and Non-GAAP Financial Disclosures (Dollars in thousands – unaudited): | |||||||||||||||
| Three Months EndedDecember 31, | Twelve Months EndedDecember 31, | ||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
| Depreciation and amortization | $ | 7,508 | $ | 4,633 | $ | 26,966 | $ | 16,704 | |||||||
| Summary of Capitalized Interest: | |||||||||||||||
| Capitalized interest, beginning of period | $ | 88,064 | $ | 76,773 | $ | 78,564 | $ | 68,196 | |||||||
| Interest incurred | 21,490 | 20,846 | 85,278 | 79,045 | |||||||||||
| Interest expensed | (552 | ) | (292 | ) | (785 | ) | (3,853 | ) | |||||||
| Interest amortized to cost of home and land closings | (20,548 | ) | (18,763 | ) | (74,603 | ) | (64,824 | ) | |||||||
| Capitalized interest, end of period | $ | 88,454 | $ | 78,564 | $ | 88,454 | $ | 78,564 | |||||||
| December 31, 2018 | December 31, 2017 | ||||||||||||||
| Notes payable and other borrowings | $ | 1,310,057 | $ | 1,283,804 | |||||||||||
| Stockholders' equity | 1,720,755 | 1,576,825 | |||||||||||||
| Total capital | 3,030,812 | 2,860,629 | |||||||||||||
| Debt-to-capital | 43.2 | % | 44.9 | % | |||||||||||
| Notes payable and other borrowings | $ | 1,310,057 | $ | 1,283,804 | |||||||||||
| Less: cash and cash equivalents | (311,466 | ) | (170,746 | ) | |||||||||||
| Net debt | 998,591 | 1,113,058 | |||||||||||||
| Stockholders’ equity | 1,720,755 | 1,576,825 | |||||||||||||
| Total net capital | $ | 2,719,346 | $ | 2,689,883 | |||||||||||
| Net debt-to-capital | 36.7 | % | 41.4 | % | |||||||||||
| Meritage Homes Corporation and Subsidiaries | |||||||
| Consolidated Statements of Cash Flows | |||||||
| (In thousands) (unaudited) | |||||||
| Twelve Months Ended December 31, | |||||||
| 2018 | 2017 | ||||||
| Cash flows from operating activities: | |||||||
| Net earnings | $ | 227,332 | $ | 143,255 | |||
| Adjustments to reconcile net earnings to net cash provided by/(used in) operating activities: | |||||||
| Depreciation and amortization | 26,966 | 16,704 | |||||
| Stock-based compensation | 17,170 | 12,056 | |||||
| Equity in earnings from unconsolidated entities | (16,333 | ) | (15,959 | ) | |||
| Deferred tax asset revaluation | (2,741 | ) | 19,687 | ||||
| Distribution of earnings from unconsolidated entities | 16,142 | 15,337 | |||||
| Other | 15,847 | 5,849 | |||||
| Changes in assets and liabilities: | |||||||
| Increase in real estate | (19,426 | ) | (301,477 | ) | |||
| Decrease in deposits on real estate under option or contract | 12,444 | 21,355 | |||||
| Decrease/(increase) in receivables, prepaids and other assets | 3,042 | (17,775 | ) | ||||
| (Decrease)/increase in accounts payable and accrued liabilities | (12,820 | ) | 8,125 | ||||
| (Decrease)/increase in home sale deposits | (5,423 | ) | 5,711 | ||||
| Net cash provided by/(used in) operating activities | 262,200 | (87,132 | ) | ||||
| Cash flows from investing activities: | |||||||
| Investments in unconsolidated entities | $ | (808 | ) | $ | (670 | ) | |
| Distributions of capital from unconsolidated entities | 597 | 1,338 | |||||
| Purchases of property and equipment | (33,415 | ) | (18,096 | ) | |||
| Proceeds from sales of property and equipment | 99 | 356 | |||||
| Maturities/sales of investments and securities | 1,181 | 1,402 | |||||
| Payments to purchase investments and securities | (1,181 | ) | (1,402 | ) | |||
| Net cash used in investing activities | (33,527 | ) | (17,072 | ) | |||
| Cash flows from financing activities: | |||||||
| Repayments of Credit Facility, net | $ | — | $ | (15,000 | ) | ||
| Repayment of loans payable and other borrowings | (15,755 | ) | (10,970 | ) | |||
| Repayment of senior notes and senior convertible notes | (175,000 | ) | (126,691 | ) | |||
| Proceeds from issuance of senior notes | 206,000 | 300,000 | |||||
| Payment of debt issuance costs | (3,198 | ) | (4,091 | ) | |||
| Repurchase of shares | (100,000 | ) | — | ||||
| Net cash (used in)/provided by financing activities | (87,953 | ) | 143,248 | ||||
| Net increase in cash and cash equivalents | 140,720 | 39,044 | |||||
| Beginning cash and cash equivalents | 170,746 | 131,702 | |||||
| Ending cash and cash equivalents | $ | 311,466 | $ | 170,746 | |||
| Meritage Homes Corporation and Subsidiaries | |||||||||||||
| Operating Data | |||||||||||||
| (Dollars in thousands) | |||||||||||||
| (unaudited) | |||||||||||||
| Three Months Ended | |||||||||||||
| December 31, 2018 | December 31, 2017 | ||||||||||||
| Homes | Value | Homes | Value | ||||||||||
| Homes Closed: | |||||||||||||
| Arizona | 453 | $ | 141,622 | 396 | $ | 132,596 | |||||||
| California | 206 | 144,179 | 261 | 153,921 | |||||||||
| Colorado | 212 | 111,461 | 154 | 89,941 | |||||||||
| West Region | 871 | 397,262 | 811 | 376,458 | |||||||||
| Texas | 836 | 298,824 | 741 | 267,139 | |||||||||
| Central Region | 836 | 298,824 | 741 | 267,139 | |||||||||
| Florida | 317 | 126,136 | 296 | 127,880 | |||||||||
| Georgia | 152 | 54,732 | 89 | 29,830 | |||||||||
| North Carolina | 166 | 63,078 | 163 | 68,432 | |||||||||
| South Carolina | 98 | 32,011 | 90 | 29,857 | |||||||||
| Tennessee | 65 | 24,020 | 63 | 23,774 | |||||||||
| East Region | 798 | 299,977 | 701 | 279,773 | |||||||||
| Total | 2,505 | $ | 996,063 | 2,253 | $ | 923,370 | |||||||
| Homes Ordered: | |||||||||||||
| Arizona | 300 | $ | 98,290 | 269 | $ | 93,143 | |||||||
| California | 109 | 72,227 | 248 | 169,593 | |||||||||
| Colorado | 116 | 60,398 | 129 | 69,550 | |||||||||
| West Region | 525 | 230,915 | 646 | 332,286 | |||||||||
| Texas | 591 | 209,787 | 582 | 211,413 | |||||||||
| Central Region | 591 | 209,787 | 582 | 211,413 | |||||||||
| Florida | 190 | 79,632 | 216 | 90,611 | |||||||||
| Georgia | 94 | 32,413 | 102 | 33,407 | |||||||||
| North Carolina | 149 | 55,929 | 143 | 54,672 | |||||||||
| South Carolina | 66 | 20,652 | 66 | 22,911 | |||||||||
| Tennessee | 38 | 14,882 | 40 | 15,040 | |||||||||
| East Region | 537 | 203,508 | 567 | 216,641 | |||||||||
| Total | 1,653 | $ | 644,210 | 1,795 | $ | 760,340 | |||||||
| Meritage Homes Corporation and Subsidiaries | |||||||||||||
| Operating Data | |||||||||||||
| (Dollars in thousands) | |||||||||||||
| (unaudited) | |||||||||||||
| Twelve Months Ended | |||||||||||||
| December 31, 2018 | December 31, 2017 | ||||||||||||
| Homes | Value | Homes | Value | ||||||||||
| Homes Closed: | |||||||||||||
| Arizona | 1,505 | $ | 485,867 | 1,535 | $ | 515,410 | |||||||
| California | 849 | 588,975 | 963 | 581,016 | |||||||||
| Colorado | 628 | 342,984 | 571 | 323,318 | |||||||||
| West Region | 2,982 | 1,417,826 | 3,069 | 1,419,744 | |||||||||
| Texas | 2,840 | 1,006,221 | 2,493 | 904,286 | |||||||||
| Central Region | 2,840 | 1,006,221 | 2,493 | 904,286 | |||||||||
| Florida | 1,078 | 455,292 | 814 | 353,554 | |||||||||
| Georgia | 468 | 161,969 | 312 | 104,690 | |||||||||
| North Carolina | 654 | 254,207 | 533 | 233,028 | |||||||||
| South Carolina | 309 | 104,622 | 307 | 104,942 | |||||||||
| Tennessee | 200 | 74,575 | 181 | 66,531 | |||||||||
| East Region | 2,709 | 1,050,665 | 2,147 | 862,745 | |||||||||
| Total | 8,531 | $ | 3,474,712 | 7,709 | $ | 3,186,775 | |||||||
| Homes Ordered: | |||||||||||||
| Arizona | 1,522 | $ | 499,353 | 1,417 | $ | 473,602 | |||||||
| California | 622 | 432,134 | 1,050 | 650,287 | |||||||||
| Colorado | 614 | 331,389 | 497 | 284,082 | |||||||||
| West Region | 2,758 | 1,262,876 | 2,964 | 1,407,971 | |||||||||
| Texas | 2,801 | 995,473 | 2,582 | 931,069 | |||||||||
| Central Region | 2,801 | 995,473 | 2,582 | 931,069 | |||||||||
| Florida | 1,004 | 422,925 | 1,007 | 433,365 | |||||||||
| Georgia | 440 | 157,706 | 372 | 121,713 | |||||||||
| North Carolina | 588 | 224,552 | 583 | 242,355 | |||||||||
| South Carolina | 299 | 101,426 | 290 | 99,738 | |||||||||
| Tennessee | 199 | 75,133 | 159 | 60,577 | |||||||||
| East Region | 2,530 | 981,742 | 2,411 | 957,748 | |||||||||
| Total | 8,089 | $ | 3,240,091 | 7,957 | $ | 3,296,788 | |||||||
| Order Backlog: | |||||||||||||
| Arizona | 343 | $ | 133,567 | 326 | $ | 119,535 | |||||||
| California | 91 | 66,391 | 318 | 222,909 | |||||||||
| Colorado | 185 | 103,470 | 199 | 114,848 | |||||||||
| West Region | 619 | 303,428 | 843 | 457,292 | |||||||||
| Texas | 981 | 372,826 | 1,020 | 381,517 | |||||||||
| Central Region | 981 | 372,826 | 1,020 | 381,517 | |||||||||
| Florida | 372 | 164,728 | 446 | 196,265 | |||||||||
| Georgia | 123 | 46,344 | 151 | 50,386 | |||||||||
| North Carolina | 177 | 67,316 | 243 | 96,579 | |||||||||
| South Carolina | 89 | 32,333 | 99 | 35,432 | |||||||||
| Tennessee | 72 | 28,943 | 73 | 28,300 | |||||||||
| East Region | 833 | 339,664 | 1,012 | 406,962 | |||||||||
| Total | 2,433 | $ | 1,015,918 | 2,875 | $ | 1,245,771 | |||||||
| Meritage Homes Corporation and Subsidiaries | |||||||||||
| Operating Data | |||||||||||
| (unaudited) | |||||||||||
| Three Months Ended | |||||||||||
| December 31, 2018 | December 31, 2017 | ||||||||||
| Ending | Average | Ending | Average | ||||||||
| Active Communities: | |||||||||||
| Arizona | 40 | 42.0 | 38 | 39.0 | |||||||
| California | 17 | 15.5 | 20 | 22.0 | |||||||
| Colorado | 20 | 20.0 | 11 | 10.0 | |||||||
| West Region | 77 | 77.5 | 69 | 71.0 | |||||||
| Texas | 95 | 93.5 | 92 | 92.5 | |||||||
| Central Region | 95 | 93.5 | 92 | 92.5 | |||||||
| Florida | 31 | 30.5 | 28 | 28.5 | |||||||
| Georgia | 22 | 22.0 | 19 | 18.0 | |||||||
| North Carolina | 25 | 22.5 | 17 | 17.5 | |||||||
| South Carolina | 12 | 12.0 | 13 | 13.5 | |||||||
| Tennessee | 10 | 10.0 | 6 | 6.0 | |||||||
| East Region | 100 | 97.0 | 83 | 83.5 | |||||||
| Total | 272 | 268.0 | 244 | 247.0 | |||||||
| Twelve Months Ended | |||||||||||
| December 31, 2018 | December 31, 2017 | ||||||||||
| Ending | Average | Ending | Average | ||||||||
| Active Communities: | |||||||||||
| Arizona | 40 | 39.0 | 38 | 40.0 | |||||||
| California | 17 | 18.5 | 20 | 24.0 | |||||||
| Colorado | 20 | 15.5 | 11 | 10.5 | |||||||
| West Region | 77 | 73.0 | 69 | 74.5 | |||||||
| Texas | 95 | 93.5 | 92 | 86.0 | |||||||
| Central Region | 95 | 93.5 | 92 | 86.0 | |||||||
| Florida | 31 | 29.5 | 28 | 27.5 | |||||||
| Georgia | 22 | 20.5 | 19 | 18.0 | |||||||
| North Carolina | 25 | 21.0 | 17 | 17.0 | |||||||
| South Carolina | 12 | 12.5 | 13 | 14.0 | |||||||
| Tennessee | 10 | 8.0 | 6 | 6.5 | |||||||
| East Region | 100 | 91.5 | 83 | 83.0 | |||||||
| Total | 272 | 258.0 | 244 | 243.5 | |||||||
ABOUT MERITAGE HOMES CORPORATION
Meritage Homes is the seventh-largest public homebuilder in the United States, based on homes closed in 2017. Meritage builds and sells single-family homes for entry-level, move-up, and active adult buyers in markets including California, Texas, Arizona, Colorado, Florida, North Carolina, South Carolina, Tennessee and Georgia.
The Company has designed and built over 120,000 homes in its 33-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® 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 expectations regarding the entry-level market and macroeconomic housing demand drivers.
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: the availability and cost of finished lots and undeveloped land; shortages in the availability and cost of labor; changes in interest rates and the availability and pricing of residential mortgages; changes in tax laws that adversely impact us or our homebuyers; inflation in the cost of materials used to develop communities and construct homes; the success of strategic initiatives; the ability of our potential buyers to sell their existing homes; cancellation rates; the adverse effect of slow absorption rates; slowing in the growth of entry-level home buyers; competition; impairments of our real estate inventory; 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; legislation related to tariffs 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, 2017 and Form 10-Q for the third quarter ended September 30, 2018 under the caption "Risk Factors," which can be found on our website at www.investors.meritagehomes.com.
| Contacts: | Brent Anderson, VP Investor Relations |
| (972) 580-6360 (office) | |
| [email protected] |
