Meritage Homes reports third quarter 2017 diluted EPS of $1.02, with an 18% increase in pretax earnings driven by higher reve...
October 27 2017 - 7:30AM
Meritage Homes Corporation (NYSE:MTH), a leading U.S. homebuilder,
reported its third quarter results for the period ended
September 30, 2017.
Summary Operating Results
(unaudited) |
(Dollars in thousands, except per share
amounts) |
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2017 |
|
2016 |
|
% Chg |
|
2017 |
|
2016 |
|
% Chg |
Homes closed
(units) |
|
1,969 |
|
|
1,800 |
|
|
9 |
% |
|
5,456 |
|
|
5,238 |
|
|
4 |
% |
Home closing
revenue |
|
$ |
805,008 |
|
|
$ |
735,870 |
|
|
9 |
% |
|
$ |
2,263,405 |
|
|
$ |
2,127,332 |
|
|
6 |
% |
Average sales price -
closings |
|
$ |
409 |
|
|
$ |
409 |
|
|
— |
% |
|
$ |
415 |
|
|
$ |
406 |
|
|
2 |
% |
Home orders
(units) |
|
1,874 |
|
|
1,737 |
|
|
8 |
% |
|
6,162 |
|
|
5,797 |
|
|
6 |
% |
Home order value |
|
$ |
765,027 |
|
|
$ |
715,562 |
|
|
7 |
% |
|
$ |
2,536,448 |
|
|
$ |
2,365,508 |
|
|
7 |
% |
Average sales price -
orders |
|
$ |
408 |
|
|
$ |
412 |
|
|
(1 |
)% |
|
$ |
412 |
|
|
$ |
408 |
|
|
1 |
% |
Ending backlog
(units) |
|
|
|
|
|
|
|
3,333 |
|
|
3,251 |
|
|
3 |
% |
Ending backlog
value |
|
|
|
|
|
|
|
$ |
1,408,801 |
|
|
$ |
1,375,857 |
|
|
2 |
% |
Average sales price -
backlog |
|
|
|
|
|
|
|
$ |
423 |
|
|
$ |
423 |
|
|
— |
% |
Earnings before income
taxes |
|
$ |
63,455 |
|
|
$ |
53,802 |
|
|
18 |
% |
|
$ |
163,429 |
|
|
$ |
141,723 |
|
|
15 |
% |
Net earnings |
|
$ |
42,550 |
|
|
$ |
36,887 |
|
|
15 |
% |
|
$ |
107,702 |
|
|
$ |
97,734 |
|
|
10 |
% |
Diluted EPS |
|
$ |
1.02 |
|
|
$ |
0.88 |
|
|
16 |
% |
|
$ |
2.55 |
|
|
$ |
2.33 |
|
|
9 |
% |
MANAGEMENT COMMENTS
“We are pleased with our results for the third quarter of 2017,
despite the disruptions caused by the hurricanes that hit Houston
and Florida," said Steven J. Hilton, chairman and chief executive
officer of Meritage Homes. "We grew our third quarter orders, home
closings and revenue year-over-year, increased sales productivity
in our East region, and made good progress on our strategic
initiatives to expand earnings by improving our gross margins and
managing overhead expenses for additional leverage. Our home
closing margin improved to 18.1% and our overhead leverage improved
by 80 basis points, helping to drive an 18% increase in pre-tax
earnings and a 16% improvement in diluted earnings per share
compared to last year's third quarter."
Mr. Hilton continued, “Considering the results we’ve achieved in
the first nine months of the year and adjusting for delays due to
weather events, we are modestly reducing our closings and revenue
guidance while maintaining our 2017 earnings expectations due to
our strong third quarter performance. We expect to deliver
approximately 7,600-7,800 homes and closing revenue of $3.15-3.25
billion for the year. On that level of closings and revenue, we are
maintaining our expectations for approximately $235-245 million in
pre-tax earnings with full year 2017 gross margin in line with
2016.”
He concluded, "Demand continues to be healthy across all of our
markets, especially for our entry-level and LiVE.NOW. homes. More
than ever, buyers appreciate that they can get Meritage's quality,
energy efficiency and advanced technology in affordably-priced
homes. As we continue to execute our strategy to serve the growing
population of first-time buyers, we foresee additional growth
opportunities for Meritage."
THIRD QUARTER RESULTS
- Net earnings of $42.6 million ($1.02 per diluted share) for the
third quarter of 2017, compared to prior year net earnings of $36.9
million ($0.88 per diluted share), primarily reflect higher home
closing revenue and gross margins, combined with cost controls and
improved overhead leverage. Earnings before income taxes increased
18% year-over-year.
- The third quarter effective tax rate was 33% in 2017, compared
to 31% in 2016. The lower rate in 2016 reflected the impact of
energy tax credits captured on energy-efficient homes closed in
2016 and prior periods, which Congress has not extended for 2017,
resulting in a higher projected effective tax rate this year.
- Home closing revenue increased 9% over the prior year on higher
closing volume. Despite increases in market prices of homes over
2016, average closing prices remained constant with the third
quarter of 2016, as a higher percentage of home closings were
lower-priced entry-level homes, consistent with the Company’s
strategic focus. Both the West and Central regions delivered 19%
year-over-year increases in home closing revenue, reflecting strong
growth in Arizona and Texas. A 12% decline in East region home
closing revenue reflected 14% fewer closings due to fewer orders
during the first half of 2017 than 2016, as well as delays due to
Hurricane Irma.
- Home closing gross margins increased to 18.1% for the third
quarter of 2017, compared to 17.8% in the third quarter of 2016 and
17.7% in the second quarter of 2017. The margin improvement
reflects higher margins in Texas and the West Region as well as
improved leverage of construction overhead expenses overall.
- Selling, general and administrative expenses totaled 10.9% of
home closing revenue, an 80 bps improvement from 11.7% in the third
quarter of 2016, reflecting successful cost controls and greater
overhead leverage.
- Total orders for the third quarter increased 8% year-over-year
due to strong demand in Texas and improved sales execution in the
East region. Orders increased 22% over the third quarter of 2016 in
Texas, primarily due to a 26% increase in average active
communities over the prior year. Total orders increased 13% in the
East, primarily due to a 12% increase in absorptions (orders per
average active community) during the quarter. Three of the five
states in the region produced 20% or greater order growth over the
third quarter of 2016, reflecting positive acceptance of new
products in new communities, as well as better sales execution. A
7% decrease in average active communities in the West region
resulted in a 6% decline in third-quarter orders for the
region.
- Total active community count was 250 at September 30, 2017,
compared to 237 communities open at September 30, 2016, which
translated to a 6% year-over-year increase in average active
communities for the third quarter.
- Average sales prices on closings and orders were consistent
with the prior year, as general home price appreciation in many
markets offset the growing percentage of entry-level homes relative
to move-up.
YEAR TO DATE RESULTS
- Net earnings increased to $107.7 million for the first three
quarters of 2017, compared to $97.7 million for the first three
quarters of 2016, with a 15% increase in pretax earnings.
- Earnings growth year-to-date was primarily driven by a 6%
increase in home closing revenue, resulting from a 4% increase in
home closings and a 2% increase in average closing prices over
2016.
- Higher home closing revenue led to a $21.8 million increase in
home closing gross profit to $393.8 million in the first three
quarters of 2017, compared to $372.1 million in the first three
quarters of 2016, as home closing gross margins were relatively
consistent in both years.
- Total commissions and selling expenses improved by 30 basis
points to 7.0% of year-to-date 2017 home closing revenue from 7.3%
in 2016. In addition, total general and administrative expenses
also declined 30 basis points to 4.0% of home closing revenue in
the first three quarters of 2017, compared to 4.3% in 2016,
resulting in a total improvement of 60 basis points in year-to-date
selling, general and administrative expenses.
- The effective tax rate for the first three quarters of 2017 was
34%, compared to 31% for the first three quarters of 2016, due to
the expiration of energy tax credits that reduced the rate in 2016,
but were unavailable in 2017.
BALANCE SHEET
- Cash and cash equivalents at September 30, 2017, totaled $115.2
million, compared to $131.7 million at December 31, 2016, primarily
reflecting the use of cash to fund the purchase and development of
lots, as well as additional homes under construction, to meet
Meritage's growth targets. Proceeds from the issuance of $300
million in new senior notes in June 2017 were used to repay
borrowings under the Company’s revolving credit facility and to
retire all $126.5 million of the Company's 1.875% convertible
senior notes.
- A total of $285.6 million was invested in land and development
during the third quarter of 2017 to meet current demand and
position the company for future growth. Total spending on land and
development year-to-date was $771.1 million in 2017, compared to
$667.2 million through the third quarter of 2016.
- Meritage ended the third quarter of 2017 with approximately
33,300 total lots owned or under control, compared to approximately
28,800 total lots at September 30, 2016, as the Company secured
more than 2,400 new lots during the quarter. Approximately half of
those additions were in Texas to meet continued strong demand, and
approximately 70% of the newly controlled lots added during the
quarter were for entry-level communities.
- Debt-to-capital and net debt-to-capital ratios at September 30,
2017, were 45.9% and 43.6%, compared to 44.2% and 41.2%,
respectively, at December 31, 2016, reflect the increased
investment of cash into homes and land under development, while
remaining well within management’s target range for this key
ratio.
CONFERENCE CALL
Management will host a conference call at 11:00 a.m. Eastern
Time (8:00 a.m. in Arizona) today to discuss the Company's results.
The call will be webcast with an accompanying slideshow available
on the "Investor Relations" page of the Company's website at
http://investors.meritagehomes.com. Telephone participants may
avoid any 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/10112737.
Telephone participants who are unable to pre-register may dial
in on 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 1:00 p.m. ET on October 27 and extending through
November 15, 2017, on the website noted above or by dialing
877-344-7529, 1-412-317-0088 for international or 1-855-669-9658
for Canada, and referencing conference number 10112737.
|
Meritage Homes Corporation and
Subsidiaries |
|
Consolidated Income Statements |
|
(In thousands, except per share
data) |
|
(Unaudited) |
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Homebuilding: |
|
|
|
|
|
|
|
|
Home closing
revenue |
$ |
805,008 |
|
|
$ |
735,870 |
|
|
$ |
2,263,405 |
|
|
$ |
2,127,332 |
|
|
Land closing
revenue |
589 |
|
|
16,987 |
|
|
16,942 |
|
|
21,187 |
|
|
Total
closing revenue |
805,597 |
|
|
752,857 |
|
|
2,280,347 |
|
|
2,148,519 |
|
|
Cost of home
closings |
(659,350 |
) |
|
(604,891 |
) |
|
(1,869,569 |
) |
|
(1,755,260 |
) |
|
Cost of land
closings |
(1,646 |
) |
|
(16,092 |
) |
|
(15,504 |
) |
|
(19,485 |
) |
|
Total
cost of closings |
(660,996 |
) |
|
(620,983 |
) |
|
(1,885,073 |
) |
|
(1,774,745 |
) |
|
Home closing gross
profit |
145,658 |
|
|
130,979 |
|
|
393,836 |
|
|
372,072 |
|
|
Land closing gross
(loss)/profit |
(1,057 |
) |
|
895 |
|
|
1,438 |
|
|
1,702 |
|
|
Total
closing gross profit |
144,601 |
|
|
131,874 |
|
|
395,274 |
|
|
373,774 |
|
Financial Services: |
|
|
|
|
|
|
|
|
Revenue |
3,549 |
|
|
3,139 |
|
|
10,142 |
|
|
9,115 |
|
|
Expense |
(1,524 |
) |
|
(1,398 |
) |
|
(4,454 |
) |
|
(4,152 |
) |
|
Earnings from financial
services unconsolidated entities and other, net |
3,489 |
|
|
4,215 |
|
|
9,673 |
|
|
10,802 |
|
|
Financial
services profit |
5,514 |
|
|
5,956 |
|
|
15,361 |
|
|
15,765 |
|
Commissions
and other sales costs |
(55,845 |
) |
|
(52,478 |
) |
|
(158,866 |
) |
|
(155,034 |
) |
General and
administrative expenses |
(31,636 |
) |
|
(33,258 |
) |
|
(90,849 |
) |
|
(91,774 |
) |
(Loss)/earnings from other unconsolidated entities, net |
(91 |
) |
|
440 |
|
|
852 |
|
|
856 |
|
Interest
expense |
(1,116 |
) |
|
(167 |
) |
|
(3,561 |
) |
|
(5,127 |
) |
Other
income, net |
2,028 |
|
|
1,435 |
|
|
5,218 |
|
|
3,263 |
|
Earnings
before income taxes |
63,455 |
|
|
53,802 |
|
|
163,429 |
|
|
141,723 |
|
Provision
for income taxes |
(20,905 |
) |
|
(16,915 |
) |
|
(55,727 |
) |
|
(43,989 |
) |
Net
earnings |
$ |
42,550 |
|
|
$ |
36,887 |
|
|
$ |
107,702 |
|
|
$ |
97,734 |
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
|
|
Earnings
per share |
$ |
1.06 |
|
|
$ |
0.92 |
|
|
$ |
2.67 |
|
|
$ |
2.45 |
|
|
Weighted
average shares outstanding |
40,323 |
|
|
40,022 |
|
|
40,273 |
|
|
39,958 |
|
|
Diluted |
|
|
|
|
|
|
|
|
Earnings
per share |
$ |
1.02 |
|
|
$ |
0.88 |
|
|
$ |
2.55 |
|
|
$ |
2.33 |
|
|
Weighted
average shares outstanding |
42,011 |
|
|
42,608 |
|
|
42,585 |
|
|
42,541 |
|
Meritage Homes Corporation and
Subsidiaries |
Consolidated Balance Sheets |
(In thousands) |
(Unaudited) |
|
|
|
September 30, 2017 |
|
December 31, 2016 |
Assets: |
|
|
|
|
Cash and
cash equivalents |
|
$ |
115,167 |
|
|
$ |
131,702 |
|
Other
receivables |
|
78,933 |
|
|
70,355 |
|
Real
estate (1) |
|
2,762,269 |
|
|
2,422,063 |
|
Real
estate not owned |
|
39,793 |
|
|
— |
|
Deposits
on real estate under option or contract |
|
67,547 |
|
|
85,556 |
|
Investments in unconsolidated entities |
|
16,378 |
|
|
17,097 |
|
Property
and equipment, net |
|
32,080 |
|
|
33,202 |
|
Deferred
tax asset |
|
56,870 |
|
|
53,320 |
|
Prepaids,
other assets and goodwill |
|
83,121 |
|
|
75,396 |
|
Total
assets |
|
$ |
3,252,158 |
|
|
$ |
2,888,691 |
|
Liabilities: |
|
|
|
|
Accounts
payable |
|
$ |
140,492 |
|
|
$ |
140,682 |
|
Accrued
liabilities |
|
193,102 |
|
|
170,852 |
|
Home sale
deposits |
|
39,446 |
|
|
28,348 |
|
Liabilities related to real estate not owned |
|
35,768 |
|
|
— |
|
Loans
payable and other borrowings |
|
38,082 |
|
|
32,195 |
|
Senior
and convertible senior notes, net |
|
1,266,160 |
|
|
1,095,119 |
|
Total
liabilities |
|
1,713,050 |
|
|
1,467,196 |
|
Stockholders'
Equity: |
|
|
|
|
Preferred
stock |
|
— |
|
|
— |
|
Common
stock |
|
403 |
|
|
400 |
|
Additional paid-in capital |
|
582,414 |
|
|
572,506 |
|
Retained
earnings |
|
956,291 |
|
|
848,589 |
|
Total
stockholders’ equity |
|
1,539,108 |
|
|
1,421,495 |
|
Total
liabilities and stockholders’ equity |
|
$ |
3,252,158 |
|
|
$ |
2,888,691 |
|
(1) Real estate
– Allocated costs: |
|
|
|
|
Homes
under contract under construction |
|
$ |
677,456 |
|
|
$ |
508,927 |
|
Unsold
homes, completed and under construction |
|
484,701 |
|
|
431,725 |
|
Model
homes |
|
140,326 |
|
|
147,406 |
|
Finished
home sites and home sites under development |
|
1,459,786 |
|
|
1,334,005 |
|
Total
real estate |
|
$ |
2,762,269 |
|
|
$ |
2,422,063 |
|
Supplemental Information and Non-GAAP
Financial Disclosures (Dollars in thousands –
unaudited): |
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Depreciation and
amortization |
$ |
4,199 |
|
|
$ |
3,870 |
|
|
$ |
12,071 |
|
|
$ |
11,470 |
|
|
|
|
|
|
|
|
|
Summary of
Capitalized Interest: |
|
|
|
|
|
|
|
Capitalized interest,
beginning of period |
$ |
72,327 |
|
|
$ |
64,682 |
|
|
$ |
68,196 |
|
|
$ |
61,202 |
|
Interest incurred |
21,024 |
|
|
17,372 |
|
|
58,199 |
|
|
52,644 |
|
Interest expensed |
(1,116 |
) |
|
(167 |
) |
|
(3,561 |
) |
|
(5,127 |
) |
Interest amortized to
cost of home and land closings |
(15,462 |
) |
|
(14,256 |
) |
|
(46,061 |
) |
|
(41,088 |
) |
Capitalized interest,
end of period |
$ |
76,773 |
|
|
$ |
67,631 |
|
|
$ |
76,773 |
|
|
$ |
67,631 |
|
|
|
|
|
|
|
|
|
|
September 30, 2017 |
|
December 31, 2016 |
|
|
|
|
Notes payable and other
borrowings |
$ |
1,304,242 |
|
|
$ |
1,127,314 |
|
|
|
|
|
Stockholders'
equity |
1,539,108 |
|
|
1,421,495 |
|
|
|
|
|
Total capital |
2,843,350 |
|
|
2,548,809 |
|
|
|
|
|
Debt-to-capital |
45.9 |
% |
|
44.2 |
% |
|
|
|
|
Notes payable and other
borrowings |
$ |
1,304,242 |
|
|
$ |
1,127,314 |
|
|
|
|
|
Less:
cash and cash equivalents |
$ |
(115,167 |
) |
|
$ |
(131,702 |
) |
|
|
|
|
Net debt |
1,189,075 |
|
|
995,612 |
|
|
|
|
|
Stockholders’
equity |
1,539,108 |
|
|
1,421,495 |
|
|
|
|
|
Total net capital |
$ |
2,728,183 |
|
|
$ |
2,417,107 |
|
|
|
|
|
Net
debt-to-capital |
43.6 |
% |
|
41.2 |
% |
|
|
|
|
Meritage Homes Corporation and
Subsidiaries |
Consolidated Statements of Cash
Flows |
(In thousands) |
(Unaudited) |
|
|
|
Nine Months Ended September 30, |
|
|
2017 |
|
2016 |
Cash flows from
operating activities: |
|
|
|
|
Net
earnings |
|
$ |
107,702 |
|
|
$ |
97,734 |
|
Adjustments to reconcile net earnings to net cash used in operating
activities: |
|
|
|
|
Depreciation and amortization |
|
12,071 |
|
|
11,470 |
|
Stock-based compensation |
|
9,898 |
|
|
11,042 |
|
Excess
income tax provision from stock-based awards |
|
— |
|
|
540 |
|
Equity in
earnings from unconsolidated entities |
|
(10,525 |
) |
|
(11,658 |
) |
Distribution of earnings from unconsolidated entities |
|
10,410 |
|
|
11,439 |
|
Other |
|
1,265 |
|
|
4,942 |
|
Changes
in assets and liabilities: |
|
|
|
|
Increase
in real estate |
|
(336,069 |
) |
|
(318,490 |
) |
Decrease/(increase) in deposits on real estate under option or
contract |
|
13,633 |
|
|
(3,160 |
) |
Increase
in other receivables, prepaids and other assets |
|
(15,207 |
) |
|
(14,201 |
) |
Increase
in accounts payable and accrued liabilities |
|
21,298 |
|
|
61,206 |
|
Increase
in home sale deposits |
|
11,098 |
|
|
791 |
|
Net cash
used in operating activities |
|
(174,426 |
) |
|
(148,345 |
) |
Cash flows from
investing activities: |
|
|
|
|
Investments in unconsolidated entities |
|
(404 |
) |
|
(242 |
) |
Distributions of capital from unconsolidated entities |
|
1,250 |
|
|
— |
|
Purchases
of property and equipment |
|
(12,038 |
) |
|
(12,256 |
) |
Proceeds
from sales of property and equipment |
|
251 |
|
|
144 |
|
Maturities/sales of investments and securities |
|
1,297 |
|
|
645 |
|
Payments
to purchase investments and securities |
|
(1,297 |
) |
|
(645 |
) |
Net cash
used in investing activities |
|
(10,941 |
) |
|
(12,354 |
) |
Cash flows from
financing activities: |
|
|
|
|
Proceeds
from Credit Facility, net |
|
10,000 |
|
|
25,000 |
|
Repayment
of loans payable and other borrowings |
|
(10,491 |
) |
|
(18,286 |
) |
Repurchase of convertible senior notes |
|
(126,691 |
) |
|
— |
|
Proceeds
from issuance of senior notes |
|
300,000 |
|
|
— |
|
Payment
of debt issuance costs |
|
(3,986 |
) |
|
— |
|
Excess
income tax provision from stock-based awards |
|
— |
|
|
(540 |
) |
Proceeds
from stock option exercises |
|
— |
|
|
232 |
|
Net cash
provided by financing activities |
|
168,832 |
|
|
6,406 |
|
Net decrease in
cash and cash equivalents |
|
(16,535 |
) |
|
(154,293 |
) |
Beginning cash
and cash equivalents |
|
131,702 |
|
|
262,208 |
|
Ending cash and
cash equivalents |
|
$ |
115,167 |
|
|
$ |
107,915 |
|
Meritage Homes Corporation and
Subsidiaries |
Operating Data |
(Dollars in thousands) |
(Unaudited) |
|
|
|
Three Months Ended September 30, |
|
|
2017 |
|
2016 |
|
|
Homes |
|
Value |
|
Homes |
|
Value |
Homes
Closed: |
|
|
|
|
|
|
|
|
Arizona |
|
424 |
|
|
$ |
141,249 |
|
|
253 |
|
|
$ |
89,092 |
|
California |
|
261 |
|
|
154,731 |
|
|
251 |
|
|
142,056 |
|
Colorado |
|
135 |
|
|
77,728 |
|
|
167 |
|
|
84,114 |
|
West Region |
|
820 |
|
|
373,708 |
|
|
671 |
|
|
315,262 |
|
Texas |
|
647 |
|
|
236,759 |
|
|
542 |
|
|
199,499 |
|
Central Region |
|
647 |
|
|
236,759 |
|
|
542 |
|
|
199,499 |
|
Florida |
|
185 |
|
|
77,652 |
|
|
206 |
|
|
85,647 |
|
Georgia |
|
95 |
|
|
29,019 |
|
|
83 |
|
|
27,477 |
|
North
Carolina |
|
107 |
|
|
48,129 |
|
|
177 |
|
|
71,641 |
|
South
Carolina |
|
74 |
|
|
25,164 |
|
|
76 |
|
|
22,658 |
|
Tennessee |
|
41 |
|
|
14,577 |
|
|
45 |
|
|
13,686 |
|
East Region |
|
502 |
|
|
194,541 |
|
|
587 |
|
|
221,109 |
|
Total |
|
1,969 |
|
|
$ |
805,008 |
|
|
1,800 |
|
|
$ |
735,870 |
|
Homes
Ordered: |
|
|
|
|
|
|
|
|
Arizona |
|
348 |
|
|
$ |
116,757 |
|
|
345 |
|
|
$ |
116,815 |
|
California |
|
200 |
|
|
124,339 |
|
|
216 |
|
|
125,920 |
|
Colorado |
|
92 |
|
|
55,459 |
|
|
121 |
|
|
66,213 |
|
West Region |
|
640 |
|
|
296,555 |
|
|
682 |
|
|
308,948 |
|
Texas |
|
593 |
|
|
213,241 |
|
|
488 |
|
|
178,934 |
|
Central Region |
|
593 |
|
|
213,241 |
|
|
488 |
|
|
178,934 |
|
Florida |
|
269 |
|
|
120,243 |
|
|
208 |
|
|
95,946 |
|
Georgia |
|
102 |
|
|
33,039 |
|
|
85 |
|
|
28,841 |
|
North
Carolina |
|
147 |
|
|
59,976 |
|
|
149 |
|
|
61,537 |
|
South
Carolina |
|
86 |
|
|
28,449 |
|
|
71 |
|
|
22,434 |
|
Tennessee |
|
37 |
|
|
13,524 |
|
|
54 |
|
|
18,922 |
|
East Region |
|
641 |
|
|
255,231 |
|
|
567 |
|
|
227,680 |
|
Total |
|
1,874 |
|
|
$ |
765,027 |
|
|
1,737 |
|
|
$ |
715,562 |
|
|
|
Nine Months Ended September 30, |
|
|
2017 |
|
2016 |
|
|
Homes |
|
Value |
|
Homes |
|
Value |
Homes
Closed: |
|
|
|
|
|
|
|
|
Arizona |
|
1,139 |
|
|
$ |
382,814 |
|
|
749 |
|
|
$ |
258,139 |
|
California |
|
702 |
|
|
427,095 |
|
|
738 |
|
|
418,834 |
|
Colorado |
|
417 |
|
|
233,377 |
|
|
474 |
|
|
231,913 |
|
West Region |
|
2,258 |
|
|
1,043,286 |
|
|
1,961 |
|
|
908,886 |
|
Texas |
|
1,752 |
|
|
637,147 |
|
|
1,563 |
|
|
566,377 |
|
Central Region |
|
1,752 |
|
|
637,147 |
|
|
1,563 |
|
|
566,377 |
|
Florida |
|
518 |
|
|
225,674 |
|
|
619 |
|
|
252,311 |
|
Georgia |
|
223 |
|
|
74,860 |
|
|
229 |
|
|
76,874 |
|
North
Carolina |
|
370 |
|
|
164,596 |
|
|
474 |
|
|
198,525 |
|
South
Carolina |
|
217 |
|
|
75,085 |
|
|
231 |
|
|
71,577 |
|
Tennessee |
|
118 |
|
|
42,757 |
|
|
161 |
|
|
52,782 |
|
East Region |
|
1,446 |
|
|
582,972 |
|
|
1,714 |
|
|
652,069 |
|
Total |
|
5,456 |
|
|
$ |
2,263,405 |
|
|
5,238 |
|
|
$ |
2,127,332 |
|
Homes
Ordered: |
|
|
|
|
|
|
|
|
Arizona |
|
1,148 |
|
|
$ |
380,459 |
|
|
935 |
|
|
$ |
322,807 |
|
California |
|
802 |
|
|
480,694 |
|
|
775 |
|
|
442,863 |
|
Colorado |
|
368 |
|
|
214,532 |
|
|
459 |
|
|
237,237 |
|
West Region |
|
2,318 |
|
|
1,075,685 |
|
|
2,169 |
|
|
1,002,907 |
|
Texas |
|
2,000 |
|
|
719,656 |
|
|
1,629 |
|
|
597,947 |
|
Central Region |
|
2,000 |
|
|
719,656 |
|
|
1,629 |
|
|
597,947 |
|
Florida |
|
791 |
|
|
342,754 |
|
|
702 |
|
|
295,453 |
|
Georgia |
|
270 |
|
|
88,306 |
|
|
305 |
|
|
102,392 |
|
North
Carolina |
|
440 |
|
|
187,683 |
|
|
497 |
|
|
205,562 |
|
South
Carolina |
|
224 |
|
|
76,827 |
|
|
296 |
|
|
95,123 |
|
Tennessee |
|
119 |
|
|
45,537 |
|
|
199 |
|
|
66,124 |
|
East Region |
|
1,844 |
|
|
741,107 |
|
|
1,999 |
|
|
764,654 |
|
Total |
|
6,162 |
|
|
$ |
2,536,448 |
|
|
5,797 |
|
|
$ |
2,365,508 |
|
|
|
|
|
|
|
|
|
|
Order
Backlog: |
|
|
|
|
|
|
|
|
Arizona |
|
453 |
|
|
$ |
158,988 |
|
|
503 |
|
|
$ |
182,574 |
|
California |
|
331 |
|
|
207,237 |
|
|
326 |
|
|
208,175 |
|
Colorado |
|
224 |
|
|
135,239 |
|
|
317 |
|
|
167,475 |
|
West Region |
|
1,008 |
|
|
501,464 |
|
|
1,146 |
|
|
558,224 |
|
Texas |
|
1,179 |
|
|
437,243 |
|
|
1,008 |
|
|
381,764 |
|
Central Region |
|
1,179 |
|
|
437,243 |
|
|
1,008 |
|
|
381,764 |
|
Florida |
|
526 |
|
|
233,534 |
|
|
370 |
|
|
161,148 |
|
Georgia |
|
138 |
|
|
46,809 |
|
|
171 |
|
|
58,944 |
|
North
Carolina |
|
263 |
|
|
110,339 |
|
|
283 |
|
|
118,515 |
|
South
Carolina |
|
123 |
|
|
42,378 |
|
|
153 |
|
|
53,657 |
|
Tennessee |
|
96 |
|
|
37,034 |
|
|
120 |
|
|
43,605 |
|
East Region |
|
1,146 |
|
|
470,094 |
|
|
1,097 |
|
|
435,869 |
|
Total |
|
3,333 |
|
|
$ |
1,408,801 |
|
|
3,251 |
|
|
$ |
1,375,857 |
|
Meritage Homes Corporation and
Subsidiaries |
Operating Data |
(Unaudited) |
|
|
|
Three Months Ended September 30, |
|
|
2017 |
|
2016 |
|
|
Ending |
|
Average |
|
Ending |
|
Average |
Active
Communities: |
|
|
|
|
|
|
|
|
Arizona |
|
40 |
|
|
39.5 |
|
|
40 |
|
|
41.5 |
|
California |
|
24 |
|
|
25.0 |
|
|
29 |
|
|
27.0 |
|
Colorado |
|
9 |
|
|
9.5 |
|
|
10 |
|
|
11.0 |
|
West Region |
|
73 |
|
|
74.0 |
|
|
79 |
|
|
79.5 |
|
Texas |
|
93 |
|
|
92.5 |
|
|
74 |
|
|
73.5 |
|
Central Region |
|
93 |
|
|
92.5 |
|
|
74 |
|
|
73.5 |
|
Florida |
|
29 |
|
|
29.5 |
|
|
26 |
|
|
26.0 |
|
Georgia |
|
17 |
|
|
18.0 |
|
|
17 |
|
|
17.0 |
|
North
Carolina |
|
18 |
|
|
19.0 |
|
|
19 |
|
|
20.5 |
|
South
Carolina |
|
14 |
|
|
14.0 |
|
|
15 |
|
|
15.5 |
|
Tennessee |
|
6 |
|
|
6.5 |
|
|
7 |
|
|
7.0 |
|
East Region |
|
84 |
|
|
87.0 |
|
|
84 |
|
|
86.0 |
|
Total |
|
250 |
|
|
253.5 |
|
|
237 |
|
|
239.0 |
|
|
|
Nine Months Ended September 30, |
|
|
2017 |
|
2016 |
|
|
Ending |
|
Average |
|
Ending |
|
Average |
Active
Communities: |
|
|
|
|
|
|
|
|
Arizona |
|
40 |
|
|
41.0 |
|
|
40 |
|
|
40.5 |
|
California |
|
24 |
|
|
26.0 |
|
|
29 |
|
|
26.5 |
|
Colorado |
|
9 |
|
|
9.5 |
|
|
10 |
|
|
13.0 |
|
West Region |
|
73 |
|
|
76.5 |
|
|
79 |
|
|
80.0 |
|
Texas |
|
93 |
|
|
86.5 |
|
|
74 |
|
|
73.0 |
|
Central Region |
|
93 |
|
|
86.5 |
|
|
74 |
|
|
73.0 |
|
Florida |
|
29 |
|
|
28.0 |
|
|
26 |
|
|
28.5 |
|
Georgia |
|
17 |
|
|
17.0 |
|
|
17 |
|
|
17.0 |
|
North
Carolina |
|
18 |
|
|
17.5 |
|
|
19 |
|
|
22.5 |
|
South
Carolina |
|
14 |
|
|
14.5 |
|
|
15 |
|
|
16.5 |
|
Tennessee |
|
6 |
|
|
6.5 |
|
|
7 |
|
|
8.0 |
|
East Region |
|
84 |
|
|
83.5 |
|
|
84 |
|
|
92.5 |
|
Total |
|
250 |
|
|
246.5 |
|
|
237 |
|
|
245.5 |
|
About Meritage Homes Corporation
Meritage Homes is the eighth-largest public homebuilder in the
United States, based on homes closed in 2016. Meritage Homes builds
and sells single-family homes for first- time, move-up, luxury and
active adult buyers across the Western, Southern and Southeastern
United States. Meritage Homes builds in markets including
Sacramento, San Francisco Bay area, southern coastal and Inland
Empire markets in California; Houston, Dallas-Ft. Worth, Austin and
San Antonio, Texas; Phoenix/Scottsdale, Green Valley and Tucson,
Arizona; Denver, Colorado; Orlando, Tampa and South Florida;
Raleigh and Charlotte, North Carolina; Greenville-Spartanburg and
York County, South Carolina; Nashville, Tennessee; and Atlanta,
Georgia.
Meritage Homes has designed and built over 100,000 homes in its
32-year history and has a reputation for its distinctive style,
quality construction, and positive customer experience. Meritage
Homes 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 projected home closings, home closing revenue, gross
margins and pre-tax earnings for the full year 2017, as well as
expected future growth and earnings expansion opportunities.
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. 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: potential adverse impacts on our Houston and Florida
sales, closings, revenue and costs due to Hurricanes Harvey and
Irma; the availability and cost of finished lots and undeveloped
land; changes in interest rates and the availability and pricing of
residential mortgages; the success of strategic initiatives;
shortages in the availability and cost of labor; changes in tax
laws that adversely impact us or our homebuyers; the ability of our
potential buyers to sell their existing homes; cancellation rates;
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; 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; competition; construction defect and home
warranty claims; failures in health and safety performance; our
success in prevailing on contested tax positions; our ability to
obtain performance bonds in connection with our development work;
the loss of key personnel; enactment of new laws or regulations or
our 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; 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; 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, 2016 and our
subsequent Forms 10-Q, under the caption "Risk Factors," which can
be found on our website.
Contacts: Brent Anderson, VP Investor
Relations (972) 580-6360
(office)investors@meritagehomes.com
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