Meritage Homes Corporation · NYSE:MTH
Meritage Homes — Q1 2023 Earnings Presentation
12 slides from Meritage Homes's earnings presentation, Apr 27, 2023
Slide 1: First Quarter 2023 Analyst Conference Call
FIRST QUARTER 2023 ANALYST CONFERENCE CALL APRIL 27, 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 Top five builder based on 2022 home closings Recognized as one of the Most Admired Home Builders by Fortune magazine Became a ten-time recipient of the U.S. EPA’s ENERGY STAR® Partner of the Year – Sustained Excellence Award 4
Slide 5: Achieved Net Sales Pace of Over 4 Per Month
ACHIEVED NET SALES PACE OF OVER 4 PER MONTH Average community count by Orders by product type Absorptions per month product type & Y/Y% 199 264 5 275 3 3,458 3,874 48 3,487 12 -16% 10 138 4.9 -20% 46 50 604 457 -14% 684 44 4.4 4.2 Other 87% 1MU -46% 2.7 -51% 3,018 Entry Level 213 222 3,222 2.2 145 2
Slide 6: Strong Performance Across Our Diversified Geographic Footprint
STRONG PERFORMANCE ACROSS OUR DIVERSIFIED GEOGRAPHIC FOOTPRINT STATES & REGIONS Y/Y (%) changes 1Q23 vs 1Q22 Central AZ CA CO West FL GA NC SC TN East (TX) 45.5 32.5 17.0 95.0 81.5 30.5 19.5 29.5 9.5 9.0 98.0 Average Active Communities 15% 44% -3% 19% 10% -26% 30% 7% -30% -31% -11% Entry-level % Ave
Slide 7: Increasing Supply of Late Stage Specs Is Our Competitive Advantage
INCREASING SUPPLY OF LATE STAGE SPECS IS OUR COMPETITIVE ADVANTAGE Spec Starts Ending Backlog Units 7,241 6000 7500 6,695 5,019 6500 6,064 5000 4,020 5500 4000 4500 3,922 3,332 2,722 3500 3000 2,462 2,086 2500 2000 1500 500 1000 1Q22 2Q22 3Q22 4Q22 1Q23 -500 1Q22 2Q22 3Q22 4Q22 1Q23 Average Specs Pe
Slide 8: 1Q23 Financial Performance
1Q23 FINANCIAL PERFORMANCE ($ Millions 1Q23 HIGHLIGHTS: 1Q23 1Q22 %Chg except EPS & ASP) • Highest first quarter of home closings and home closing revenue Home closings 2,897 2,858 1% ASP (closings) $436K $436K - • Lower gross margin due to higher sales incentives and direct costs Home closing reven
Slide 9: Strong Balance Sheet Provides Flexibility
STRONG BALANCE SHEET PROVIDES FLEXIBILITY Net Debt-to-Capital Reconciliation ($ Millions) Ample liquidity at March 31, 2023: • $957M of cash (non-GAAP reconciliation) Mar 31, 2023 Dec 31, 2022 • Nothing drawn on $780M credit facility Notes payable & other borrowings $1,151 $1,151 • Lowest net debt t
Slide 10: Land & Development Investment
LAND & DEVELOPMENT INVESTMENT Active Ending Community Count As of period ended Mar-31: 1Q23 1Q22 303 305 295 275 278 285 268 271 275 259 Total lots controlled 60,942 75,176 265 255 245 235 225 215 205 195 185 175 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 Supply of lots (years) 4.3 5.9 Ending Active Communities
Slide 11: Guidance
GUIDANCE • 2,800-3,100 home closings • $1.22-1.36 billion home closing revenue 2Q • Home closing gross margin of around 22% 2023 • Effective tax rate of around 22% • Diluted EPS between $3.15-3.65 11
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