Meritage Homes Corporation (NYSE:MTH), a leading U.S. homebuilder,
reported its first quarter results for the period ended
March 31, 2017.
|
Summary Operating Results
(unaudited) |
(Dollars in thousands, except per share
amounts) |
|
|
|
Three Months Ended March 31, |
|
|
2017 |
|
2016 |
|
% Chg |
Homes closed
(units) |
|
1,581 |
|
|
1,488 |
|
|
6 |
% |
Home closing
revenue |
|
$ |
660,617 |
|
|
$ |
595,617 |
|
|
11 |
% |
Average sales price -
closings |
|
$ |
418 |
|
|
$ |
400 |
|
|
4 |
% |
Home orders
(units) |
|
2,135 |
|
|
1,987 |
|
|
7 |
% |
Home order value |
|
$ |
892,703 |
|
|
$ |
804,600 |
|
|
11 |
% |
Average sales price -
orders |
|
$ |
418 |
|
|
$ |
405 |
|
|
3 |
% |
Ending backlog
(units) |
|
3,181 |
|
|
3,191 |
|
|
— |
% |
Ending backlog
value |
|
$ |
1,367,844 |
|
|
$ |
1,346,664 |
|
|
2 |
% |
Average sales price -
backlog |
|
$ |
430 |
|
|
$ |
422 |
|
|
2 |
% |
Earnings before income
taxes |
|
$ |
36,769 |
|
|
$ |
28,885 |
|
|
27 |
% |
Net earnings |
|
$ |
23,572 |
|
|
$ |
20,969 |
|
|
12 |
% |
Diluted EPS |
|
$ |
0.56 |
|
|
$ |
0.50 |
|
|
12 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
MANAGEMENT COMMENTS
“We delivered solid earnings, revenue and order growth for the
first quarter of 2017, and are on track to achieve our projections
for the year,” said Steven J. Hilton, chairman and chief executive
officer of Meritage Homes. “We closed more homes in the first
quarter than we did a year ago, which resulted in an 11% increase
in home closing revenue, despite beginning the year with slightly
fewer orders in backlog than we had entering 2016. We leveraged
that revenue growth by managing overhead expenses to deliver a 27%
year-over-year increase in our earnings before taxes."
Mr. Hilton added, "I am pleased with our performance in the
first quarter and the progress we are making on the strategic
initiatives we have outlined, which are designed to position the
company for further growth and earnings expansion. We grew our
ending community count by 5% while also increasing our sales pace
to generate 7% order growth over last year's first quarter. In
addition, we secured approximately 3,600 new lots for future
growth, ending the quarter with approximately 31,300 total lots --
the most we’ve had since mid-2007. We also completed our new
product library for the East region and began rolling out those
plans in our new communities. We believe customers will find them
very attractive and are expecting to generate better margins with
them as well.
“Strong housing market fundamentals in the U.S. have continued
to drive demand in our markets,” added Mr. Hilton. “We have been
addressing the increasing demand from entry-level and first-time
home buyers by securing more lots and opening communities with
affordable homes designed for those buyers, including our
LiVE.NOW.™ homes, which are available in a growing number of
Meritage communities across the country.
“With a successful first quarter behind us and a positive
outlook for continued strong demand through the spring selling
season, we remain confident in our projections for 2017, including
deliveries of approximately 7,500-7,900 homes and estimated total
closing revenue of $3.1-3.3 billion for the year. Though mindful of
labor and materials cost pressures, we believe we can maintain
gross margins consistent with 2016 while generating a 6-12%
increase in pre-tax earnings through a combination of cost
management and additional operating leverage with our anticipated
revenue growth.”
FIRST QUARTER RESULTS
- Net earnings of $23.6 million ($0.56 per diluted share) for the
first quarter of 2017, compared to prior year net earnings of $21.0
million ($0.50 per diluted share), primarily reflect higher closing
revenue and greater overhead leverage, partially offset by lower
home closing gross margin and a higher effective tax rate. Earnings
before income taxes increased 27% year-over-year.
- First quarter effective tax rate was 36% in 2017, compared to
27% in 2016. The lower rate in 2016 reflected the significant
impact of energy tax credits captured on energy-efficient homes
closed in 2016 and prior periods, which Congress has not yet
extended for 2017, resulting in a higher assumed effective tax rate
this year.
- Home closing revenue increased 11% on a 6% increase in home
closings coupled with a 4% increase in average closing price over
the first quarter of 2016. All regions delivered year-over-year
increases in home closing revenue, led by 15% growth in the West
region (California, Colorado and Arizona), followed by 9% in the
Central region (Texas) and 6% in the East region (Florida, Georgia,
the Carolinas and Tennessee).
- Land closing gross profit of $2.5 million, primarily from the
sale of one parcel in southern California, also contributed to the
year-over-year increase in first quarter net earnings.
- Home closing gross margin was in line with management's
expectations at 16.2% for the first quarter of 2017, compared to
17.4% in the first quarter of 2016. The lower margin reflects
increases in land and construction costs, approximately $2.0
million of asset impairments and write-offs, as well as front-end
loaded costs associated with opening new communities that are
expected to begin generating revenue in the latter half of
2017.
- Selling, general and administrative expenses were 11.8% of home
closing revenue, an improvement of 90 bps from 12.7% in the first
quarter of 2016, reflecting successful cost controls and greater
leverage of expenses on higher closing volumes and revenue.
- Total orders for the first quarter increased 7% year-over-year,
primarily due to an 8% increase in absorption pace (orders per
average number of active communities) of 8.6 in 2017 compared to
8.0 in 2016. Strong order growth of 25% and 17% respectively in the
West and Central regions offset a 19% decline in the East
region. The decline in the East region reflected fewer
average actively selling communities in the first quarter of 2017
than the previous year, as well as the opening of communities late
in the quarter, which only minimally contributed to first quarter
2017 orders.
- A total of 26 new communities were opened during the quarter,
approximately half of which opened and recorded their first sale in
the final weeks of the quarter. Total active community count
increased 5% to 256 at March 31, 2017, from 243 at March 31,
2016.
- In addition to the 7% increase in orders, a 3% increase in
average sales price (ASP) drove an 11% increase in the total value
of orders. The increase in order value was led by robust growth in
Arizona (+48%), California (+28%) and Texas (+17%), markets where
Meritage has opened a large number of communities designed for
entry-level and first-time buyers, which have been selling at a
higher pace than traditional move-up communities. As a result of
the beginning of a shift in those markets to entry level product,
ASPs for the first quarter of 2017 were 5% lower in Arizona and 1%
lower in Texas, compared to the first quarter of 2016.
BALANCE SHEET
- Cash and cash equivalents at March 31, 2017, totaled $85.7
million, compared to $131.7 million at December 31, 2016, primarily
reflecting $207 million in land and development spending to meet
growing demand and position the company for future growth.
- Real estate assets increased by $90.8 million during the first
quarter, ending at $2.51 billion at March 31, 2017, compared to
$2.42 billion at December 31, 2016. Approximately $73 million of
the increase was for homes under construction or completed, with
finished home sites or land under development accounting for most
of the remainder of the increase.
- Meritage ended the first quarter of 2017 with approximately
31,300 total lots owned or under control, compared to approximately
28,400 total lots at March 31, 2016. Approximately two-thirds of
the 3,600 newly controlled lots added during the first quarter were
in communities planned for entry-level or first-time buyers.
- Net debt-to-capital ratio at March 31, 2017 was 42.8%, compared
to 41.2% at December 31, 2016, reflecting the increased investment
of cash into homes and land under development, while remaining well
within management’s target range for this key ratio.
CONFERENCE CALL
Management will host a conference call today to discuss the
Company's results at 10:00 a.m. Eastern Time (7:00 a.m. in
Arizona). The call will be webcast with an accompanying slideshow
available on the "Investor Relations" page of the Company's web
site at http://investors.meritagehomes.com. Telephone participants
may avoid any delays by pre-registering for the call using the
following link to receive a special dial-in number and PIN.
Conference Call registration link:
http://dpregister.com/10104520.
Telephone participants who are unable to pre-register may dial
in to 866-226-4948 on the day of the call. International dial-in
number is 1-412-902-4125 or 1-855-669-9657 for Canada.
A replay of the call will be available until May 11, 2017,
beginning at approximately 12:00 p.m. ET on April 27 on the website
noted above, or by dialing 877-344-7529, 1-412-317-0088 for
international or 1-855-669-9658 for Canada, and referencing
conference number 10104520.
|
|
|
Meritage Homes Corporation and
Subsidiaries |
|
Consolidated Income Statements |
|
(In thousands, except per share
data) |
|
(Unaudited) |
|
|
|
|
Three Months Ended March 31, |
|
|
2017 |
|
2016 |
Homebuilding: |
|
|
|
|
Home closing
revenue |
$ |
660,617 |
|
|
$ |
595,617 |
|
|
Land closing
revenue |
12,155 |
|
|
2,149 |
|
|
Total
closing revenue |
672,772 |
|
|
597,766 |
|
|
Cost of home
closings |
(553,349 |
) |
|
(492,270 |
) |
|
Cost of land
closings |
(9,660 |
) |
|
(1,700 |
) |
|
Total
cost of closings |
(563,009 |
) |
|
(493,970 |
) |
|
Home closing gross
profit |
107,268 |
|
|
103,347 |
|
|
Land closing gross
profit |
2,495 |
|
|
449 |
|
|
Total
closing gross profit |
109,763 |
|
|
103,796 |
|
Financial Services: |
|
|
|
|
Revenue |
2,944 |
|
|
2,500 |
|
|
Expense |
(1,379 |
) |
|
(1,246 |
) |
|
Earnings from financial
services unconsolidated entities and other, net |
2,725 |
|
|
2,792 |
|
|
Financial
services profit |
4,290 |
|
|
4,046 |
|
Commissions
and other sales costs |
(48,320 |
) |
|
(46,177 |
) |
General and
administrative expenses |
(29,622 |
) |
|
(29,618 |
) |
Earnings/(loss) from other unconsolidated entities, net |
373 |
|
|
(157 |
) |
Interest
expense |
(825 |
) |
|
(3,288 |
) |
Other
income, net |
1,110 |
|
|
283 |
|
Earnings
before income taxes |
36,769 |
|
|
28,885 |
|
Provision
for income taxes |
(13,197 |
) |
|
(7,916 |
) |
Net
earnings |
$ |
23,572 |
|
|
$ |
20,969 |
|
|
|
|
|
Earnings per share: |
|
|
|
|
Basic |
|
|
|
|
Earnings
per share |
$ |
0.59 |
|
|
$ |
0.53 |
|
|
Weighted
average shares outstanding |
40,178 |
|
|
39,839 |
|
|
Diluted |
|
|
|
|
Earnings
per share |
$ |
0.56 |
|
|
$ |
0.50 |
|
|
Weighted
average shares outstanding |
42,808 |
|
|
42,363 |
|
|
Meritage Homes Corporation and
Subsidiaries |
Consolidated Balance Sheets |
(In thousands) |
(Unaudited) |
|
|
|
March 31, 2017 |
|
December 31, 2016 |
Assets: |
|
|
|
|
Cash and
cash equivalents |
|
$ |
85,689 |
|
|
$ |
131,702 |
|
Other
receivables |
|
86,232 |
|
|
70,355 |
|
Real
estate (1) |
|
2,512,853 |
|
|
2,422,063 |
|
Real
estate not owned |
|
9,987 |
|
|
— |
|
Deposits
on real estate under option or contract |
|
78,526 |
|
|
85,556 |
|
Investments in unconsolidated entities |
|
16,928 |
|
|
17,097 |
|
Property
and equipment, net |
|
32,700 |
|
|
33,202 |
|
Deferred
tax asset |
|
53,883 |
|
|
53,320 |
|
Prepaids,
other assets and goodwill |
|
79,749 |
|
|
75,396 |
|
Total assets |
|
$ |
2,956,547 |
|
|
$ |
2,888,691 |
|
Liabilities: |
|
|
|
|
Accounts
payable |
|
$ |
136,804 |
|
|
$ |
140,682 |
|
Accrued
liabilities |
|
158,666 |
|
|
170,852 |
|
Home sale
deposits |
|
32,797 |
|
|
28,348 |
|
Liabilities related to real estate not owned |
|
8,489 |
|
|
— |
|
Loans
payable and other borrowings |
|
75,820 |
|
|
32,195 |
|
Senior
and convertible senior notes, net |
|
1,095,606 |
|
|
1,095,119 |
|
Total liabilities |
|
1,508,182 |
|
|
1,467,196 |
|
Stockholders'
Equity: |
|
|
|
|
Preferred
stock |
|
— |
|
|
— |
|
Common
stock |
|
403 |
|
|
400 |
|
Additional paid-in capital |
|
575,801 |
|
|
572,506 |
|
Retained
earnings |
|
872,161 |
|
|
848,589 |
|
Total stockholders’ equity |
|
1,448,365 |
|
|
1,421,495 |
|
Total liabilities and stockholders’ equity |
|
$ |
2,956,547 |
|
|
$ |
2,888,691 |
|
(1) Real
estate – Allocated costs: |
|
|
|
|
Homes
under contract under construction |
|
$ |
617,790 |
|
|
$ |
508,927 |
|
Unsold
homes, completed and under construction |
|
395,841 |
|
|
431,725 |
|
Model
homes |
|
149,872 |
|
|
147,406 |
|
Finished
home sites and home sites under development |
|
1,349,350 |
|
|
1,334,005 |
|
Total real estate |
|
$ |
2,512,853 |
|
|
$ |
2,422,063 |
|
Supplemental Information and Non-GAAP Financial
Disclosures (Dollars in thousands – unaudited): |
|
|
Three Months Ended March 31, |
|
2017 |
|
2016 |
Depreciation and
amortization |
$ |
3,670 |
|
|
$ |
3,402 |
|
|
|
|
|
Summary of
Capitalized Interest: |
|
|
|
Capitalized interest,
beginning of period |
$ |
68,196 |
|
|
$ |
61,202 |
|
Interest incurred |
17,895 |
|
|
17,559 |
|
Interest expensed |
(825 |
) |
|
(3,288 |
) |
Interest amortized to
cost of home and land closings |
(14,381 |
) |
|
(11,347 |
) |
Capitalized interest,
end of period |
$ |
70,885 |
|
|
$ |
64,126 |
|
|
|
|
|
|
March 31, 2017 |
|
December 31, 2016 |
Notes payable and other
borrowings |
$ |
1,171,426 |
|
|
$ |
1,127,314 |
|
Stockholders'
equity |
1,448,365 |
|
|
1,421,495 |
|
Total capital |
2,619,791 |
|
|
2,548,809 |
|
Debt-to-capital |
44.7 |
% |
|
44.2 |
% |
Notes payable and other
borrowings |
$ |
1,171,426 |
|
|
$ |
1,127,314 |
|
Less:
cash and cash equivalents |
$ |
(85,689 |
) |
|
$ |
(131,702 |
) |
Net debt |
1,085,737 |
|
|
995,612 |
|
Stockholders’
equity |
1,448,365 |
|
|
1,421,495 |
|
Total net capital |
$ |
2,534,102 |
|
|
$ |
2,417,107 |
|
Net
debt-to-capital |
42.8 |
% |
|
41.2 |
% |
|
|
|
|
|
|
|
Meritage Homes Corporation and
Subsidiaries |
Consolidated Statements of Cash
Flows |
(In thousands) |
(Unaudited) |
|
|
|
Three Months Ended March 31, |
|
|
2017 |
|
2016 |
Cash flows from
operating activities: |
|
|
|
|
Net
earnings |
|
$ |
23,572 |
|
|
$ |
20,969 |
|
Adjustments to reconcile net earnings to net cash used in operating
activities: |
|
|
|
|
Depreciation and amortization |
|
3,670 |
|
|
3,402 |
|
Stock-based compensation |
|
3,295 |
|
|
4,758 |
|
Excess
income tax provision from stock-based awards |
|
— |
|
|
516 |
|
Equity in
earnings from unconsolidated entities |
|
(3,098 |
) |
|
(2,635 |
) |
Distribution of earnings from unconsolidated entities |
|
3,280 |
|
|
3,477 |
|
Other |
|
(18 |
) |
|
1,048 |
|
Changes
in assets and liabilities: |
|
|
|
|
Increase
in real estate |
|
(89,222 |
) |
|
(116,035 |
) |
Decrease/(increase) in deposits on real estate under option or
contract |
|
5,532 |
|
|
(4,046 |
) |
Increase
in other receivables, prepaids and other assets |
|
(20,162 |
) |
|
(168 |
) |
(Decrease)/increase in accounts payable and accrued
liabilities |
|
(16,064 |
) |
|
455 |
|
Increase
in home sale deposits |
|
4,449 |
|
|
6,442 |
|
Net cash
used in operating activities |
|
(84,766 |
) |
|
(81,817 |
) |
Cash flows from
investing activities: |
|
|
|
|
Investments in unconsolidated entities |
|
(10 |
) |
|
(63 |
) |
Purchases
of property and equipment |
|
(3,238 |
) |
|
(3,940 |
) |
Proceeds
from sales of property and equipment |
|
49 |
|
|
35 |
|
Maturities/sales of investments and securities |
|
1,226 |
|
|
645 |
|
Payments
to purchase investments and securities |
|
(1,226 |
) |
|
(645 |
) |
Net cash
used in investing activities |
|
(3,199 |
) |
|
(3,968 |
) |
Cash flows from
financing activities: |
|
|
|
|
Proceeds
from Credit Facility, net |
|
45,000 |
|
|
— |
|
Repayment
of loans payable and other borrowings |
|
(3,048 |
) |
|
(3,893 |
) |
Excess
income tax provision from stock-based awards |
|
— |
|
|
(516 |
) |
Proceeds
from stock option exercises |
|
— |
|
|
161 |
|
Net cash
provided by/(used in) by financing activities |
|
41,952 |
|
|
(4,248 |
) |
Net decrease in
cash and cash equivalents |
|
(46,013 |
) |
|
(90,033 |
) |
Beginning cash
and cash equivalents |
|
131,702 |
|
|
262,208 |
|
Ending cash and
cash equivalents |
|
$ |
85,689 |
|
|
$ |
172,175 |
|
|
Meritage Homes Corporation and
Subsidiaries |
Operating Data |
(Dollars in thousands) |
(Unaudited) |
|
|
|
Three Months Ended March 31, |
|
|
2017 |
|
2016 |
|
|
Homes |
|
Value |
|
Homes |
|
Value |
Homes
Closed: |
|
|
|
|
|
|
|
|
Arizona |
|
296 |
|
|
$ |
100,550 |
|
|
217 |
|
|
$ |
74,999 |
|
California |
|
210 |
|
|
132,094 |
|
|
207 |
|
|
120,720 |
|
Colorado |
|
128 |
|
|
67,360 |
|
|
138 |
|
|
65,327 |
|
West Region |
|
634 |
|
|
300,004 |
|
|
562 |
|
|
261,046 |
|
Texas |
|
495 |
|
|
174,709 |
|
|
465 |
|
|
159,971 |
|
Central Region |
|
495 |
|
|
174,709 |
|
|
465 |
|
|
159,971 |
|
Florida |
|
146 |
|
|
65,574 |
|
|
156 |
|
|
63,322 |
|
Georgia |
|
55 |
|
|
20,475 |
|
|
65 |
|
|
22,014 |
|
North
Carolina |
|
131 |
|
|
56,907 |
|
|
118 |
|
|
50,377 |
|
South
Carolina |
|
73 |
|
|
26,055 |
|
|
67 |
|
|
21,171 |
|
Tennessee |
|
47 |
|
|
16,893 |
|
|
55 |
|
|
17,716 |
|
East Region |
|
452 |
|
|
185,904 |
|
|
461 |
|
|
174,600 |
|
Total |
|
1,581 |
|
|
$ |
660,617 |
|
|
1,488 |
|
|
$ |
595,617 |
|
Homes
Ordered: |
|
|
|
|
|
|
|
|
Arizona |
|
403 |
|
|
$ |
133,832 |
|
|
259 |
|
|
$ |
90,180 |
|
California |
|
328 |
|
|
193,758 |
|
|
270 |
|
|
151,012 |
|
Colorado |
|
143 |
|
|
82,095 |
|
|
169 |
|
|
86,626 |
|
West Region |
|
874 |
|
|
409,685 |
|
|
698 |
|
|
327,818 |
|
Texas |
|
693 |
|
|
251,773 |
|
|
591 |
|
|
216,065 |
|
Central Region |
|
693 |
|
|
251,773 |
|
|
591 |
|
|
216,065 |
|
Florida |
|
239 |
|
|
101,560 |
|
|
227 |
|
|
92,594 |
|
Georgia |
|
69 |
|
|
22,402 |
|
|
105 |
|
|
35,195 |
|
North
Carolina |
|
150 |
|
|
66,332 |
|
|
189 |
|
|
77,081 |
|
South
Carolina |
|
72 |
|
|
25,538 |
|
|
107 |
|
|
34,221 |
|
Tennessee |
|
38 |
|
|
15,413 |
|
|
70 |
|
|
21,626 |
|
East Region |
|
568 |
|
|
231,245 |
|
|
698 |
|
|
260,717 |
|
Total |
|
2,135 |
|
|
$ |
892,703 |
|
|
1,987 |
|
|
$ |
804,600 |
|
|
|
|
|
|
|
|
|
|
Order
Backlog: |
|
|
|
|
|
|
|
|
Arizona |
|
551 |
|
|
$ |
194,625 |
|
|
359 |
|
|
$ |
133,087 |
|
California |
|
349 |
|
|
215,302 |
|
|
352 |
|
|
214,438 |
|
Colorado |
|
288 |
|
|
168,819 |
|
|
363 |
|
|
183,450 |
|
West Region |
|
1,188 |
|
|
578,746 |
|
|
1,074 |
|
|
530,975 |
|
Texas |
|
1,129 |
|
|
431,798 |
|
|
1,068 |
|
|
406,288 |
|
Central Region |
|
1,129 |
|
|
431,798 |
|
|
1,068 |
|
|
406,288 |
|
Florida |
|
346 |
|
|
152,440 |
|
|
358 |
|
|
147,278 |
|
Georgia |
|
105 |
|
|
35,290 |
|
|
135 |
|
|
46,607 |
|
North
Carolina |
|
212 |
|
|
96,677 |
|
|
331 |
|
|
138,182 |
|
South
Carolina |
|
115 |
|
|
40,119 |
|
|
128 |
|
|
43,161 |
|
Tennessee |
|
86 |
|
|
32,774 |
|
|
97 |
|
|
34,173 |
|
East Region |
|
864 |
|
|
357,300 |
|
|
1,049 |
|
|
409,401 |
|
Total |
|
3,181 |
|
|
$ |
1,367,844 |
|
|
3,191 |
|
|
$ |
1,346,664 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Meritage Homes Corporation and
Subsidiaries |
Operating Data |
(Unaudited) |
|
|
|
Three Months Ended March 31, |
|
|
2017 |
|
2016 |
|
|
Ending |
|
Average |
|
Ending |
|
Average |
Active
Communities: |
|
|
|
|
|
|
|
|
Arizona |
|
42 |
|
|
42.0 |
|
|
42 |
|
|
41.5 |
|
California |
|
29 |
|
|
28.5 |
|
|
24 |
|
|
24.0 |
|
Colorado |
|
10 |
|
|
10.0 |
|
|
14 |
|
|
15.0 |
|
West Region |
|
81 |
|
|
80.5 |
|
|
80 |
|
|
80.5 |
|
Texas |
|
85 |
|
|
82.5 |
|
|
70 |
|
|
71.0 |
|
Central Region |
|
85 |
|
|
82.5 |
|
|
70 |
|
|
71.0 |
|
Florida |
|
32 |
|
|
29.5 |
|
|
26 |
|
|
27.0 |
|
Georgia |
|
17 |
|
|
17.0 |
|
|
18 |
|
|
17.5 |
|
North
Carolina |
|
18 |
|
|
17.5 |
|
|
24 |
|
|
25.0 |
|
South
Carolina |
|
15 |
|
|
15.0 |
|
|
16 |
|
|
17.0 |
|
Tennessee |
|
8 |
|
|
7.5 |
|
|
9 |
|
|
9.0 |
|
East Region |
|
90 |
|
|
86.5 |
|
|
93 |
|
|
95.5 |
|
Total |
|
256 |
|
|
249.5 |
|
|
243 |
|
|
247.0 |
|
About Meritage Homes Corporation
Meritage Homes is the eighth-largest public homebuilder in the
United States, based on homes closed in 2016. Meritage Homes builds
and sells single-family homes for entry-level, first-time, move-up,
luxury and active adult buyers across the Western, Southern and
Southeastern United States. Meritage Homes builds in markets
including Sacramento, San Francisco Bay area, southern coastal and
Inland Empire markets in California; Houston, Dallas-Ft. Worth,
Austin and San Antonio, Texas; Phoenix/Scottsdale, Green Valley and
Tucson, Arizona; Denver and Fort Collins, Colorado; Orlando, Tampa
and south Florida; Raleigh and Charlotte, North Carolina;
Greenville-Spartanburg and York County, South Carolina; Nashville,
Tennessee; and Atlanta, Georgia.
Meritage Homes has designed and built over 100,000 homes in its
31-year history, and has a reputation for its distinctive style,
quality construction, and positive customer experience. Meritage
Homes is the industry leader in energy-efficient homebuilding and
has received the U.S. Environmental Protection Agency's ENERGY STAR
Partner of the Year for Sustained Excellence Award every year since
2013 for innovation and industry leadership in energy efficient
homebuilding.
For more information, visit www.meritagehomes.com.
This press release and the accompanying comments during our
analyst call contain forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Such
statements include management's expectations with respect to future
growth and earnings expansion, our strategy and projections with
respect to the entry-level and first-time home buyer market, as
well as our new East region product library, plans for community
count growth in 2017, projected home closings and home closing
revenue, home closing gross margins and pre-tax earnings for the
full year 2017.
Such statements are based upon the current beliefs and
expectations of Company management, and current market conditions,
which are subject to significant uncertainties and fluctuations.
Actual results may differ from those set forth in the
forward-looking statements. The Company makes no commitment, and
disclaims any duty, to update or revise any forward-looking
statements to reflect future events or changes in these
expectations. Meritage's business is subject to a number of risks
and uncertainties. As a result of those risks and uncertainties,
the Company's stock and note prices may fluctuate dramatically.
These risks and uncertainties include, but are not limited to, the
following: the availability and cost of finished lots and
undeveloped land; changes in interest rates and the availability
and pricing of residential mortgages; fluctuations in the
availability and cost of labor; changes in tax laws that adversely
impact us or our homebuyers; changes in economic conditions; the
ability of our potential buyers to sell their existing homes;
cancellation rates; inflation in the cost of materials used to
develop communities and construct homes; impairments of our
real estate inventory; a change to the feasibility of projects
under option or contract that could result in the write-down or
write-off of earnest or option deposits; our potential exposure to
and impacts from natural disasters or severe weather conditions;
competition; construction defect and home warranty claims; failures
in health and safety performance; our success in prevailing on
contested tax positions; our ability to obtain performance bonds in
connection with our development work; the loss of key personnel;
enactment of new laws or regulations or our failure to comply with
laws and regulations; our limited geographic diversification;
fluctuations in quarterly operating results; our level of
indebtedness; our ability to obtain financing; our ability to
successfully integrate acquired companies and achieve anticipated
benefits from these acquisitions; our compliance with government
regulations; the effect of legislative and other governmental
actions, orders, policies or initiatives that impact housing, labor
availability, construction, mortgage availability, our access to
capital, the cost of capital or the economy in general, or other
initiatives that seek to restrain growth of new housing
construction or similar measures; legislation relating to energy
and climate change; the replication of our energy-efficient
technologies by our competitors; our exposure to information
technology failures and security breaches; and other factors
identified in documents filed by the Company with the Securities
and Exchange Commission, including those set forth in our Form 10-K
for the year ended December 31, 2016 under the caption "Risk
Factors," which can be found on our website.
Contacts:
Brent Anderson, VP Investor Relations
(972) 580-6360 (office)
investors@meritagehomes.com
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