Meritage Homes Corporation · NYSE:MTH
Meritage Homes — Q4 2020 Earnings Presentation
14 slides from Meritage Homes's earnings presentation, Jan 28, 2021
Slide 1: Fourth Quarter 2020 Analyst Conference Call
Fourth Quarter 2020 Analyst Conference Call January 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 statements regarding the health of the housin
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: 2020 Milestones At Meritage Homes
2020 Milestones At Meritage Homes first homebuilder to introduce 100% contactless selling to 8th straight year of recognition, received various Avid MERV-13 advanced air filtration system Diamond, Gold & Benchmark customers Awards across nine divisions nationwide to control & improve indoor air exch
Slide 5: Strong Performance In Both Entry-Level And First Move-Up
Strong Performance In Both Entry-Level And First Move-Up Average community count by Absorptions per month Orders by product product type & Y/Y% type 268 247 200 1,653 2,093 3,174 94% 169 135 87% 13 42% 5.8 45 32 228 762 5.3 53 35% 5.0 Other 778 4.3 104 758 134 1MU 37% Entry Level 2.8 134 2,277 1,146
Slide 6: Broad Strength Everywhere Led By The East Region with 76% Sales Order Growth
Broad Strength Everywhere Led By The East Region with 76% Sales Order Growth STATES & REGIONS Y/Y (%) changes 4Q20 vs 4Q19 Central AZ CA CO West FL GA NC SC TN East (TX) 34.0 18.0 11.0 63.0 60.5 32.5 9.0 20.5 6.0 8.0 76.0 Average Active Communities 0% (25%) (42%) (18%) (20%) (6%) (50%) (13%) (37%) (
Slide 7: Spec Inventory A Core Tenet Of Meritage Operations
Spec Inventory A Core Tenet Of Meritage Operations Home Closings Ending Backlog Units 4Q19 Closings 4Q20 Closings 6000 5,242 4,672 Dirt 5000 4,395 Start, 4000 3,568 Dirt 29% 2,782 Spec Start, Inventory, 3000 39% Spec 61% Inventory, 2000 71% 1000 0 4Q19 1Q20 2Q20 3Q20 4Q20 Average Specs Per Community
Slide 8: 47% Earnings Growth In 4Q20
47% Earnings Growth In 4Q20 ($ Millions 4Q20 HIGHLIGHTS: 4Q20 4Q19 %Chg FY2020 FY2019 %Chg except EPS & ASP) • Record quarterly closing revenue Home closings 3,744 2,830 +32% 11,834 9,267 +28% • Best quarterly closing gross margin ASP (closings) $376K $390K (4%) $377K $389K (3%) since 2006 despite r
Slide 9: Strong Balance Sheet Provides Flexibility
Strong Balance Sheet Provides Flexibility Net Debt-to-Capital Reconciliation ($ Millions) 4Q20 HIGHLIGHTS: (non-GAAP reconciliation) Dec 31, 2020 Dec 31, 2019 Ample liquidity at December 31, 2020 given • $746M of cash Notes payable & other borrowings $1,020 $1,019 • Nothing drawn under $780M credit
Slide 10: Accelerated Land & Development Investment
Accelerated Land & Development Investment Real Assets 4Q20 4Q19 69 69 Land & development spending $506M $245M As of period ended Dec-31: 43 46 34 32 Total lots controlled 55,502 41,399 22 Supply of lots (years) 4.7 4.5 11 11,239 3,822 5,468 6,460 2,858 4,198 8,931 1,222 - Owned 59% 63% 1Q19 2Q19 3Q1
Slide 11: Guidance For FY2021 & 1Q21
Guidance For FY2021 & 1Q21 Projected Community Count • 11,500-12,500 home closings • First half of 2021 to remain +/- 200 FULL • $4.2-4.6 billion home closing revenue communities YEAR • Home closing gross margin 22.0-23.0% • End 2021 with approximately 235-245 2021 • Effective tax rate ~23.0% commun
Slide 12: Positioned For Growth
Positioned For Growth Pace & Price Balance Sheet Accelerated Land Strong Land Strength & Investments Position Flexibility • Achieving strong • Increases in operating • Will spend +$1.5B • Focused on replacing closing revenue growth cash flow and our annually in 2021 and communities as they lowest le
Slide 13: Summary
Summary • Well-positioned with entry-level and first move-up • Entering 2021 with heavy backlog and +2,500 specs completed or under construction • Strategy to grow • Executing at a high level 13
Slide 14: Life. Built. Better.