Meritage Homes Corporation · NYSE:MTH
Meritage Homes — Q4 2023 Earnings Presentation
12 slides from Meritage Homes's earnings presentation, Feb 1, 2024
Slide 1: Fourth Quarter 2023 Analyst Conference Call
FOURTH QUARTER 2023 ANALYST CONFERENCE CALL FEBRUARY 1, 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: 4Q23 Company Milestones
4Q23 Company Milestones Inclusive Workplace Culture Philanthropy Sustainability • Launched our first three employee • Packed over 250,000 meals for No • Joined Newsweek’s list of America’s resource groups, starting with a focus Child Hungry Greenest Companies for 2024 on multicultural, women and fam
Slide 5: Net Sales Orders Increased 60% Year-Over-Year
Net Sales Orders Increased 60% Year-Over-Year Total Orders & Y/Y % Orders by Product Type & Entry-Level % of Total -10% -11% 50% 3,367 1,808 2,892 3,487 3,474 60% 44 4 8 3,340 187 337 2,892 576 Other -46% 1MU 1,808 2,747 1,617 2,547 Entry Level 82% 89% 88% 4Q22 1Q23 2Q23 3Q23 4Q23 4Q21 4Q22 4Q23 Ave
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 81.0 85.0 105.0 271.0 Average Active Communities Y/Y(%) -17% 10% 8% -1% Entry-level % Average Communities 85% 89% 87% 87% Absorption per month 3.0 4.1 3.5 3.6 Absorp
Slide 7: Increasing Spec Supply is Our Competitive Advantage
Increasing Spec Supply is Our Competitive Advantage Spec Starts Total Specs & % Completed Specs 6000 5,877 4,891 4,905 5000 4,473 19% 4,096 3,989 3,977 15% 16% 3,865 4000 18% 25% Completed 3000 2,462 2,086 Under Construction 2000 1000 4Q22 1Q23 2Q23 3Q23 4Q23 4Q22 1Q23 2Q23 3Q23 4Q23 Average Specs P
Slide 8: 4Q23 Financial Performance
4Q23 Financial Performance ($ Millions 4Q23 4Q22 %Chg FY2023 FY2022 %Chg 4Q23 Highlights: except EPS & ASP) Home closings 3,951 4,540 (13)% 13,976 14,106 (1)% • ASPs on closings impacted by more costly financing ASP (closings) $415K $437K (5)% $433K $440K (2)% incentives and geographic mix Home clos
Slide 9: 4Q23 Balance Sheet & Capital Spend
4Q23 Balance Sheet & Capital Spend Capital Structure – Non-GAAP Reconciliation ($ Millions) Dec 31, 2023 Dec 31, 2022 Notes payable & other borrowings $1,008 $1,151 Stockholders’ equity $4,612 $3,950 Total capital $5,620 $5,100 Debt-to-capital 17.9% 22.6% Less: cash & cash equivalents ($921) ($862)
Slide 10: Momentum in Land Investment
Momentum in Land Investment Lots Detail Active Ending Community Count 305 291 4Q23 4Q22 295 285 275 278 271 272 270 275 265 255 Total lots controlled 64,313 63,182 245 235 225 215 205 195 185 Supply of lots (years) 4.6 4.5 175 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 Net Newly Controlled Lots & Net Contracted
Slide 11: Guidance
Guidance • Home closings of 14,000-15,000 units FY • Home closing revenue of $5.8-6.2 billion 2024 • Home closing gross margin of 23.0-23.5% • Effective tax rate of about 22.5-23.0% • SG&A leverage of approximately 10.0% • Diluted EPS of $16.50-18.10 • Home closings of 3,000-3,200 units 1Q 2024 • Ho
Slide 12: Positioned for Growing Market Share & Maximizing Shareholder Value Creation
Positioned for Growing Market Share & Maximizing Shareholder Value Creation • Spec building strategy • Focus on entry-level homes • Consistent execution track record • Prioritize pace over price • Disciplined growth • Flexible capital allocation strategy • Strong balance sheet and ample liquidity 12