Meritage Homes Corporation · NYSE:MTH
Meritage Homes — Q1 2024 Earnings Presentation
12 slides from Meritage Homes's earnings presentation, Apr 25, 2024
Slide 1: First Quarter 2024 Analyst Conference Call
FIRST QUARTER 2024 ANALYST CONFERENCE CALL APRIL 25, 2024
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, our sales pace, backlog conversion rate, level of spec s
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: 1Q24 Company Milestones
1Q24 Company Milestones Sustainability Philanthropy Strong ROE and TSR for Past 5 Years • 11th time recipient of the EPA’s ENERGY • Received the President’s Volunteer • Enhanced capital allocation strategy with STAR ® Partner of the Year for Service Award – a civil award bestowed systematic share re
Slide 5: Net Sales Orders Increased 14% Year-Over-Year
Net Sales Orders Increased 14% Year-Over-Year Total Orders & Y/Y % Orders by Product Type & Entry-Level % of Total -10% -11% 50% 14% 3,874 3,487 3,991 60% 3,991 48 12 16 457 348 3,487 3,340 3,474 604 2,892 Other 1MU 3,018 3,627 3,222 Entry Level 83% 87% 91% 1Q23 2Q23 3Q23 4Q23 1Q24 1Q22 1Q23 1Q24 Av
Slide 6: Steady Performance Across Our Diversified Geographic Footprint
Steady Performance Across Our Diversified Geographic Footprint West Region Central Region East Region Total Average Active Communities 80.5 84.0 108.0 272.5 Average Active Communities Y/Y(%) (15)% 3% 10% (1)% Entry-level % Average Communities 88% 91% 88% 89% Absorption per month 4.8 5.2 4.7 4.9 Abso
Slide 7: Increasing Our Supply of Move-In Ready Homes is Our Competitive Advantage
Increasing Our Supply of Move-In Ready Homes is Our Competitive Advantage Spec Starts Total Specs & % of Completed Specs 6000 5,991 5,877 5000 4,905 19% 22% 4,096 3,989 3,977 4,142 4,473 3,865 16% 4000 18% 3000 2,462 25% Completed 2000 Under Construction 1000 1Q23 2Q23 3Q23 4Q23 1Q24 1Q23 2Q23 3Q23
Slide 8: 1Q24 Financial Performance
1Q24 Financial Performance ($ Millions 1Q24 1Q23 %Chg except EPS & ASP) 1Q24 Highlights: Home closings 3,507 2,897 21% • Lower ASPs on closings due to product mix shift ASP (closings) $418K $436K (4)% • Home closing gross margin benefited from reduced Home closing revenue $1,466 $1,262 16% utilizati
Slide 9: Accelerated Capital Spend Activities Due To Strong Balance Sheet
Accelerated Capital Spend Activities Due To Strong Balance Sheet Capital Structure – Non-GAAP Reconciliation Capital Allocation Spend ($ Millions) Mar 31, 2024 Dec 31, 2023 1Q24 Breakdown ($ Millions) Notes payable & other borrowings $1,002 $1,008 Stockholders’ equity $4,721 $4,612 Share Repurchases
Slide 10: Momentum in Land & Development Investment
Momentum in Land & Development Investment Lots Detail Land Acquisition and Development ($ Millions) $654 1Q24 1Q23 $537 $307 $430 $409 Total lots controlled 66,434 60,942 $351 $293 Development $310 $256 $268 Acqusition $273 $221 $347 $244 $153 $162 Supply of lots (years) 4.6 4.3 $78 $89 4Q22 1Q23 2Q
Slide 11: Guidance
Guidance Second Quarter 2024 Full Year 2024 Home closings 3,600-3,800 units 14,500-15,000 units Home closing revenue $1.5-1.6 billion $6.0-6.2 billion Home closing gross margin 24.5-25.0% 24.5-25.0% Effective tax rate About 22.5% About 22.5% Diluted earnings per common share $4.70-5.30 $19.20-20.70
Slide 12: Positioned for Growing Market Share
Positioned for Growing Market Share Well-positioned with entry-level and first move-up focus Move-in ready homes strategy Prioritize pace over price Focused on growing community count 12