Meritage Homes Corporation · NYSE:MTH
Meritage Homes — Q2 2024 Earnings Presentation
13 slides from Meritage Homes's earnings presentation, Jul 25, 2024
Slide 1: Second Quarter 2024 Analyst Conference Call
SECOND QUARTER 2024 ANALYST CONFERENCE CALL JULY 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 and our future results including our ability to increase
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: 2Q24 Milestones
2Q24 Milestones Commitment to Sustainability Commitment to Employees Commitment to Customers • 11th time recipient of the EPA’s ENERGY • Recognized by US News & World Report • Earned the prestigious Avid Cup for a STAR ® Market Leader Award Certified as a 2024-2025 Best Companies to Work third conse
Slide 5: Net Sales Orders Increased 14% Year-Over-Year
Net Sales Orders Increased 14% Year-Over-Year Net Orders & Y/Y % Orders by Product Type & Entry-Level % of Total 14% 14% 3,767 3,340 3,799 -11% 50% 3,991 23 19 18 3,799 282 3,474 60% 497 479 3,340 2,892 Other 1MU 3,499 3,247 2,842 Entry Level 86% 85% 92% 2Q23 3Q23 4Q23 1Q24 2Q24 2Q22 2Q23 2Q24 Avera
Slide 6: Our Diversified Geographic Footprint
Our Diversified Geographic Footprint West Region Central Region East Region Total Average Active Communities 84.0 78.0 119.0 281.0 Average Active Communities Y/Y(%) (13)% (5)% 13% (1)% Entry-level % Average Communities 91% 92% 90% 91% Absorption per month 4.4 4.7 4.4 4.5 Absorption per month Y/Y(%)
Slide 7: Our Available Supply of Quick Turning Move-In Ready Homes Is Our Competitive Advantage
Our Available Supply of Quick Turning Move-In Ready Homes Is Our Competitive Advantage Spec Starts Total Specs & % of Completed Specs 6000 6,511 5,877 5,991 5000 4,319 4,096 3,989 3,977 4,142 22% 26% 4000 4,905 19% 4,473 16% 3000 18% Completed 2000 Under Construction 1000 2Q23 3Q23 4Q23 1Q24 2Q24 2Q
Slide 8: 2Q24 Financial Performance
2Q24 Financial Performance ($ Millions 2Q24 2Q23 %Chg YTD2024 YTD2023 %Chg 2Q24 Highlights: except EPS & ASP) Home closings 4,118 3,490 18% 7,625 6,387 19% • Lower ASPs on closings due to product and geographic mix shift ASP (closings) $411K $442K (7)% $414K $439K (6)% Home closing revenue $1,694 $1
Slide 9: Our Strengthened Balance Sheet
Our Strengthened Balance Sheet • Issued $575 million in new 1.75% convertible debt due in 2028 • Paid down all of the remaining $250 million of our 6% senior notes due 2025 • Refinanced our revolving credit facility to increase facility size to $910 million, extend maturity date from 2028 to 2029, a
Slide 10: 2Q24 Capital Spend Activities
2Q24 Capital Spend Activities Capital Structure – Non-GAAP Reconciliation Capital Allocation Spend ($ Millions) Jun 30, 2024 Dec 31, 2023 2Q24 Breakdown ($ Millions) Notes payable & other borrowings $1,313 $1,008 Cash Dividends 4% Stockholders’ equity $4,883 $4,612 Total capital $6,196 $5,620 $658 m
Slide 11: Momentum in Land & Development Investment
Momentum in Land & Development Investment Lots Detail Land Acquisition and Development ($ Millions) $654 $631 2Q24 2Q23 $537 $307 $430 $316 $409 $310 $293 Total lots controlled 70,822 59,683 $268 $256 $221 $347 $315 $244 $153 $162 $89 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 Supply of lots (years) 4.7 4.1 Deve
Slide 12: Guidance
Guidance Third Quarter 2024 Full Year 2024 Home closings 3,650-3,850 units 14,750-15,500 units Home closing revenue $1.5-1.6 billion $6.1-6.3 billion Home closing gross margin 23.5-24.0% 24.5-25.0% Effective tax rate About 22.5% About 22.5% Diluted earnings per common share $4.60-5.05 $19.80-21.00 1
Slide 13: Positioned for Growing Market Share
Positioned for Growing Market Share Quick turning move-in ready homes strategy Prioritize pace over price Strong balance sheet 13