Meritage Homes Corporation · NYSE:MTH
Meritage Homes — Q1 2021 Earnings Presentation
13 slides from Meritage Homes's earnings presentation, Apr 30, 2021
Slide 1: First Quarter 2021 Analyst Conference Call
First Quarter 2021 Analyst Conference Call April 29, 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: 1Q21 Milestones
1Q21 Milestones New Multispeed HVAC System Standard Centralized Hub For M.Connected HomeTM Automation Suite New On-demand Homeowners’ Insurance Quotes Enhanced DEI Recruitment Efforts Pledging Annual Financial Support to DEI Efforts Again Launched ESG Webpage 4
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 266 243 199 2,530 3,102 3,458 94% 35% 10 176 138 87% 28 321 5.8 5.8 42 42% 684 5.3 44 5.0 1,020 35% Other 96 4.3 1,079 133 1MU Entry Level 145 2,636 1,
Slide 6: Absorption Growth Led by East Region, Up 67%
Absorption Growth Led by East Region, Up 67%. All Regions Reached Entry-Level/First Move-Up Mix Shift STATES & REGIONS Y/Y (%) changes 1Q21 vs 1Q20 Central AZ CA CO West FL GA NC SC TN East (TX) 33.0 17.5 11.5 62.0 61.0 30.5 9.5 22.5 6.0 7.5 76.0 Average Active Communities 3% -34% -26% -16% -21% -9%
Slide 7: Maintaining Spec Strategy Despite Accelerated Orders Pace And Construction Constraints
Maintaining Spec Strategy Despite Accelerated Orders Pace And Construction Constraints Home Closings Ending Backlog Units 1Q20 Closings 1Q21 Closings 6000 5,242 5,240 4,672 Dirt Dirt 5000 4,395 Start, Start, 4000 3,568 31% 29% 3000 Spec Spec Inventory, Inventory, 2000 69% 71% 1000 0 1Q20 2Q20 3Q20 4
Slide 8: 85% Earnings Growth In 1Q21
85% Earnings Growth In 1Q21 ($ Millions 1Q21 HIGHLIGHTS: 1Q21 1Q20 %Chg except EPS & ASP) • Company’s highest first quarter of closings Home closings 2,890 2,316 +25% • Best quarterly home closing gross margin since ASP (closings) $374K $384K (3)% 1Q06 despite rising costs of lumber and other Home c
Slide 9: Strong Balance Sheet Provides Flexibility
Strong Balance Sheet Provides Flexibility Ample liquidity at March 31, 2021 given Net Debt-to-Capital Reconciliation ($ Millions) • $716M of cash (non-GAAP reconciliation) March 31, 2021 Dec 31, 2020 • Nothing drawn under $780M credit facility Notes payable & other borrowings $1,021 $1,020 • Continu
Slide 10: Accelerated Land & Development Investment
Accelerated Land & Development Investment Real Assets 1Q21 1Q20 69 69 Land & development spending $370M $246M 46 As of period ended Mar-31: 43 43 34 32 22 Total lots controlled 58,085 41,501 Supply of lots (years) 4.7 4.2 11 11,239 5,468 3,822 6,460 2,858 4,198 8,931 5,900 1,222 - Owned 60% 63% 1Q19
Slide 11: Guidance For FY2021 & 2Q21
Guidance For FY2021 & 2Q21 Projected Community Count • 11,700-12,700 home closings • 2Q21 to remain around 200 FULL • $4.55-4.85 billion home closing revenue communities YEAR • Home closing gross margin approximately 25.0% • End 2021 up 20% from today’s 2021 • Effective tax rate approximately 23.0%
Slide 12: Positioned For Growth
Positioned For Growth Well-positioned with entry-level & first move- up Prioritizing price while managing spec starts & the corresponding orders pace 100% spec building for entry-level communities Strong balance sheet to support elevated land investment & healthy land position Operationally executin
Slide 13: Life. Built. Better.