Meritage Homes Corporation · NYSE:MTH
Meritage Homes — Q1 2022 Earnings Presentation
12 slides from Meritage Homes's earnings presentation, Apr 27, 2022
Slide 1: First Quarter 2022 Analyst Conference Call
FIRST QUARTER 2022 ANALYST CONFERENCE CALL APRIL 28, 2022
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; projected 2022 home closings, home closing revenue, home
Slide 3: Speakers
SPEAKERS Steven J. Hilton – Executive Chairman Phillippe Lord – Chief Executive Officer Hilla Sferruzza – EVP & Chief Financial Officer Emily Tadano – VP Investor Relations 3
Slide 4: Recent Events
RECENT EVENTS Purchased fixed interest Announced expansion of rate locks for eligible business operations into floating-rate mortgages in Salt Lake City our backlog to close 2H22 Kicked off our tree Announced the hire of planting program to Malissia Clinton as support urban tree Meritage’s new gener
Slide 5: Expanded Orders Units Through Community Count Growth
EXPANDED ORDERS UNITS THROUGH COMMUNITY COUNT GROWTH Average community count by Orders by product type Absorptions per month product type & Y/Y% 243 199 264 5 3,102 3,458 3,874 35% 48 10 176 138 9% 28 5.8 46 5.5 -15% -16% 604 44 684 5.0 -14% 1,020 4.9 Other 4.5 96 87% 1MU Entry Level 213 3,222 145 2
Slide 6: Growth in Average Community Count Drove Order Volume in All Regions
GROWTH IN AVERAGE COMMUNITY COUNT DROVE ORDER VOLUME IN ALL REGIONS STATES & REGIONS Y/Y (%) changes 1Q22 vs 1Q21 Central AZ CA CO West FL GA NC SC TN East (TX) 39.5 22.5 17.5 79.5 74.0 41.0 15.0 27.5 13.5 13.0 110.0 Average Active Communities 20% 29% 52% 28% 21% 34% 58% 22% 125% 73% 45% Entry-level
Slide 7: Grew Specs & Specs per Community Despite Continuing Supply & Labor Challenges
GREW SPECS & SPECS PER COMMUNITY DESPITE CONTINUING SUPPLY & LABOR CHALLENGES Home Closings Ending Backlog Units 1Q21 Closings 1Q22 Closings 6,695 7000 5,838 5,679 6000 5,240 5,509 5000 Dirt Start, 20% Dirt Start, 29% 4000 3000 Spec Inventory, 71% Spec Inventory, 2000 80% 1000 0 1Q21 2Q21 3Q21 4Q21
Slide 8: 1Q22 Is Another Quarter of Records
1Q22 IS ANOTHER QUARTER OF RECORDS 1Q22 HIGHLIGHTS: ($ Millions 1Q22 1Q21 %Chg • Multiple company records set in 1Q22 except EPS & ASP) • Highest quarterly sales order volume Home closings 2,858 2,890 (1)% • Second highest first quarter of home closings ASP (closings) $436K $374K +17% • Highest quar
Slide 9: Strong Balance Sheet Provides Flexibility
STRONG BALANCE SHEET PROVIDES FLEXIBILITY Net Debt-to-Capital Reconciliation ($ Millions) Ample liquidity at March 31, 2022: • $520M of cash (non-GAAP reconciliation) Mar 31, 2022 Dec 31, 2021 • Nothing drawn under $780M credit facility Notes payable & other $1,165 $1,160 • Continued low net debt to
Slide 10: Land & Development Investment
LAND & DEVELOPMENT INVESTMENT Real Estate Assets 1Q22 1Q21 Active Ending Community Count 275 268 259 Land & development 265 $371M $370M 255 spending 245 235 226 236 225 215 203 As of period ended Mar-31: 205 195 195 185 175 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 Total lots controlled 75,176 58,085 Ending Act
Slide 11: Guidance
GUIDANCE • 14,500-15,500 home closings • $6.5-6.9 billion home closing revenue FULL • Home closing gross margin in the low 28% range YEAR 2022 • Effective tax rate of approximately 25.0% • Diluted EPS $26.30-27.90 • Community count growth of 15-20% • 3,000-3,200 home closings • $1.3-1.4 billion home
Slide 12: Well Positioned in a Rising Rate Environment
WELL POSITIONED IN A RISING RATE ENVIRONMENT Focus on entry-level & first move-up Community count increase and accelerated starts Simplified process through pre-started inventory Healthy land position and prudent land playbook Flexible balance sheet 12