Meritage Homes Corporation · NYSE:MTH
Meritage Homes — Q2 2023 Earnings Presentation
12 slides from Meritage Homes's earnings presentation, Jul 28, 2023
Slide 1: Second Quarter 2023 Analyst Conference Call
SECOND QUARTER 2023 ANALYST CONFERENCE CALL JULY 28, 2023
Slide 2: Safe Harbor
SAFE HARBOR The information included in this presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include expectations about the housing market in general; expectations about our future results, including but not
Slide 3: Speakers
SPEAKERS Steven J. Hilton – Executive Chairman Phillippe Lord – Chief Executive Officer Hilla Sferruzza – EVP & Chief Financial Officer Emily Tadano – VP of Investor Relations and ESG 3
Slide 4: Recent Milestones
RECENT MILESTONES Renewed partnership with Operation Homefront to build and donate a new home to a military family at Crescent Lakes community in Babcock Ranch, Florida, which is the first fully solar-powered town in the US Received a wide range of recognition related to our social and diversity ini
Slide 5: Net Sales Pace Near Our Target of 4 Per Month
NET SALES PACE NEAR OUR TARGET OF 4 PER MONTH Average community count by Orders by product type Absorptions per month product type & Y/Y% -20% 215 286 285 3,542 3,767 3,340 -14% 5 2 23 19 4.4 8 89 -11% 4.2 497 479 49 48 595 3.9 46 Other 87% -46% 2.7 1MU -51% 2.2 Entry Level 3,247 2,842 232 235 2,858
Slide 6: Strong Performance Across Our Diversified Geographic Footprint
STRONG PERFORMANCE ACROSS OUR DIVERSIFIED GEOGRAPHIC FOOTPRINT Y/Y (%) changes 2Q23 vs 2Q22 West Region Central Region East Region 97.0 82.0 105.5 Average Active Communities 3% 6% -7% Entry-level % Average Communities 78% 84% 85% 3.4 4.3 4.1 Absorption per month -11% -9% -13% 990 1,065 1,285 Orders
Slide 7: Increasing Spec Supply Is Our Competitive Advantage
INCREASING SPEC SUPPLY IS OUR COMPETITIVE ADVANTAGE Spec Starts Ending Backlog Units 7,241 6000 7500 5,019 6500 6,064 5000 4,096 5500 4000 4500 3,922 3,772 3,332 2,722 3500 3000 2,462 2,086 2500 2000 1500 500 1000 2Q22 3Q22 4Q22 1Q23 2Q23 -500 2Q22 3Q22 4Q22 1Q23 2Q23 Average Specs Per Community Tot
Slide 8: Strong Performance in 2Q23
STRONG PERFORMANCE IN 2Q23 ($ Millions 2Q23 HIGHLIGHTS: 2Q23 2Q22 %Chg YTD2023 YTD2022 %Chg except EPS & ASP) • Highest second quarter of home closings and home closing revenue Home closings 3,490 3,221 8% 6,387 6,079 5% ASP (closings) $442K $437K 1% $439K $437K 0% • Lower gross margin due to higher
Slide 9: Strong Balance Sheet Provides Flexibility
STRONG BALANCE SHEET PROVIDES FLEXIBILITY Net Debt-to-Capital Reconciliation ($ Millions) Ample liquidity at June 30, 2023: • $1.2B of cash (non-GAAP reconciliation) Jun 30, 2023 Dec 31, 2022 • Nothing drawn on $835M credit facility Notes payable & other borrowings $1,155 $1,151 Capital usage in 2Q2
Slide 10: Land & Development Investment
LAND & DEVELOPMENT INVESTMENT June 30, March 31, June 30, Active Ending Community Count As of period ended 303 2023 2023 2022 305 291 295 275 278 285 268 271 275 265 Total lots controlled 59,683 60,942 71,096 255 245 235 225 215 205 195 185 175 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 Supply of lots (years) 4.
Slide 11: Guidance
GUIDANCE • 13,300-13,800 home closings • $5.85-6.07 billion home closing revenue FY • Home closing gross margin in the low 24% range 2023 • Effective tax rate of around 22.5% • Diluted EPS between $19.12-19.80 • 3,300-3,600 home closings • $1.46-1.60 billion home closing revenue 3Q • Home closing gr
Slide 12: Positioned for Growing Market Share
POSITIONED FOR GROWING MARKET SHARE Focus on spec inventory Prioritizing pace over price Strong execution Disciplined growth Strong balance sheet and ample liquidity 12