Meritage Homes Corporation · NYSE:MTH
Meritage Homes — Q3 2021 Earnings Presentation
13 slides from Meritage Homes's earnings presentation, Oct 28, 2021
Slide 1: Third Quarter 2021 Analyst Conference Call
Third Quarter 2021 Analyst Conference Call October 28, 2021
Slide 2: Forward-Looking Statements
Forward-Looking Statements The information included in this presentation and the accompanying comments from management 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 gene
Slide 3: Management Representatives
Management Representatives Steven J. Hilton – Executive Chairman Phillippe Lord – CEO Hilla Sferruzza – EVP & Chief Financial Officer Emily Tadano – VP Investor Relations 3
Slide 4: 3Q21 Milestones
3Q21 Milestones • Received 2021 EPA’s Indoor • Launched no-contact, after-hours • Memorialized our human rights airPLUS Leader Award self-guided tours of model policy homes • Expanded digital financial services with on-demand homeowners’ insurance quotes 4
Slide 5: Solid Performance In Both Entry-Level And First Move-Up
Solid Performance In Both Entry-Level And First Move-Up Average community count by Absorptions per month Orders by product product type & Y/Y% type 94% 35% 252 221 231 2,258 3,851 3,441 6 187 217 47 5.8 5.8 34 19 520 46 990 9% 70 853 Other 5.5 112 87% 87% 1MU 5.3 Entry Level 87% 179 42% -15% 2,874 1
Slide 6: Higher Community Count And ASP On Orders Partially Offset Metered Orders Pace
Higher Community Count And ASP On Orders Partially Offset Metered Orders Pace STATES & REGIONS Y/Y (%) changes 3Q21 vs 3Q20 Central AZ CA CO West FL GA NC SC TN East (TX) 38.0 19.0 16.5 73.5 66.0 36.0 11.0 26.0 9.0 9.5 91.5 Average Active Communities 4% -21% 38% 1% 5% 3% -21% 27% 64% -5% 8% Entry-le
Slide 7: Continue To Focus On Specs, But Supply Constraints Limit Starts
Continue To Focus On Specs, But Supply Constraints Limit Starts Home Closings Ending Backlog Units 3Q20 Closings 3Q21 Closings 8000 Dirt Dirt 5,509 5,838 6000 5,242 5,240 Start, Start, 4,672 29% 26% Spec 4000 Spec Inventory, Inventory, 71% 74% 2000 0 3Q20 4Q20 1Q21 2Q21 3Q21 Average Specs Per Commun
Slide 8: 84% Earnings Growth In 3Q21
84% Earnings Growth In 3Q21 ($ Millions 3Q21 HIGHLIGHTS: 3Q21 3Q20 %Chg YTD2021 YTD2020 %Chg except EPS & ASP) • Best third quarter of closings in Home closings 3,112 3,004 +4% 9,275 8,090 +15% Company history ASP (closings) $402K $377K +7% $388K $378K +3% • Company-high home closing gross Home clos
Slide 9: Strong Balance Sheet Provides Flexibility
Strong Balance Sheet Provides Flexibility Net Debt-to-Capital Reconciliation ($ Millions) Ample liquidity at September 30, 2021 given (non-GAAP reconciliation) Sep 30, 2021 Dec 31, 2020 • $562M of cash • Nothing drawn under $780M credit facility Notes payable & other borrowings $1,161 $1,020 • Conti
Slide 10: Accelerated Land & Development Investment
Accelerated Land & Development Investment Real Estate Assets 3Q21 3Q20 69 69 Land & development spending $526M $299M 55 46 As of period ended Sep-30: 43 42 45 Total lots controlled 69,767 47,875 29 22 5,468 Supply of lots (years) 5.4 4.4 11,239 2,858 6,460 4,198 8,931 5,900 9,081 9,838 - Owned 64% 5
Slide 11: Guidance
Guidance • 12,600-12,900 home closings • $5.05-5.15 billion home closing revenue FULL • Home closing gross margin of 27.50-27.75% YEAR • Effective tax rate of approximately 23.0% 2021 • Diluted EPS $18.75-19.40 • End 2021 around 250 communities • Double-digit growth in home closing volume and revenu
Slide 12: Positioned For Growth
Positioned For Growth Well-positioned with entry-level & first move- up Healthy land spend leads to significant community count growth 100% spec building for entry-level communities Strong execution 12
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