Meritage Homes Corporation · NYSE:MTH
Meritage Homes — Q3 2023 Earnings Presentation
12 slides from Meritage Homes's earnings presentation, Nov 1, 2023
Slide 1: Third Quarter 2023 Analyst Conference Call
THIRD QUARTER 2023 ANALYST CONFERENCE CALL NOVEMBER 1, 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, 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: Recent Milestones
Recent Milestones Certified Great Place To Work Received the EPA’s 2023 Indoor airPLUS for 3rd consecutive year for building healthy homes Joined Green Builder Media’s 2023 ESG Leaders list Made Arizona’s Most Admired Companies of 2023 list Named one of the 2023 Arizona Business Angels honorees Publ
Slide 5: Net Sales Orders Increased 50% Year-Over-Year
Net Sales Orders Increased 50% Year-Over-Year Total Orders & Y/Y % Orders by Product Type -10% -11% 50% 3,441 2,310 3,474 3,487 3,474 47 9 10 3,340 265 410 -33% 520 Other -46% 1MU 2,310 1,808 2,036 3,054 Entry Level 2,874 84% 88% 88% 3Q21 3Q22 3Q23 Percentage relates to entry-level as a percentage o
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 91.0 82.0 108.5 281.5 Average Active Communities Y/Y(%) -13% 6% 1% -3% Entry-level % Average Communities 75% 71% 94% 85% Absorption per month 3.6 4.5 4.3 4.1 Absorpt
Slide 7: Increasing Spec Supply is Our Competitive Advantage
Increasing Spec Supply is Our Competitive Advantage Spec Starts Total Specs & % Completed Specs 6000 4,891 4,905 4,673 4,473 6% 16% 5000 15% 3,865 4,096 18% 3,989 4000 25% 3000 2,722 Completed 2,462 2,086 Under Construction 2000 1000 3Q22 4Q22 1Q23 2Q23 3Q23 3Q22 4Q22 1Q23 2Q23 3Q23 Average Specs Pe
Slide 8: Strong Financial Performance in 3Q23
Strong Financial Performance in 3Q23 ($ Millions 3Q23 Highlights: 3Q23 3Q22 %Chg YTD2023 YTD2022 %Chg except EPS & ASP) • Highest third quarter of home closings and home closing Home closings 3,638 3,487 4% 10,025 9,566 5% revenue ASP (closings) $443K $450K (2)% $440K $442K (0)% • Home closing gross
Slide 9: Accelerated Capital Spend in 3Q23
Accelerated Capital Spend in 3Q23 ($ Millions) Received second upgrade to BBB- investment grade rating (non-GAAP reconciliation) Sep 30, 2023 Dec 31, 2022 Ample liquidity at Sept. 30, 2023: Notes payable & other $1,005 $1,151 $1.0B of cash borrowings • Stockholders’ equity $4,421 $3,950 • Nothing dr
Slide 10: Momentum in Land Investment
Momentum in Land Investment September June 30, September Active Ending Community Count As of period ended 30, 2023 2023 30, 2022 305 291 295 275 278 285 271 272 275 265 Total lots controlled 60,662 59,683 66,348 255 245 235 225 215 205 195 Supply of lots (years) 4.2 4.1 5.1 185 175 3Q22 4Q22 1Q23 2Q
Slide 11: Guidance
Guidance • Home closings of 3,500-3,700 units 4Q 2023 • Home closing revenue of $1.45-1.53 billion • Home closing gross margin of 25-26% • Effective tax rate of about 23% • Diluted EPS of $4.84-5.43 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