Meritage Homes Reports Results for the Fourth Quarter and Full Year 2013
Fourth Quarter EPS of $1.19 Reflects 47% Increase in Home Closing Revenue and 12% Pre-Tax Margin; Full Year Home Closing Revenue Increases 51% and Total Order Value Increases 40% Over 2012
SCOTTSDALE, AZ -- (Marketwired) -- 02/05/14 -- Meritage Homes Corporation (NYSE: MTH), a leading U.S. homebuilder, today announced fourth quarter results for the period ended December 31, 2013.
Summary Operating Results (unaudited)
(Dollars in thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
2013 2012 %Chg 2013 2012 %Chg
--------- --------- ------ ---------- ---------- ------
Homes closed (units) 1,468 1,240 18% 5,259 4,238 24%
Home closing revenue $ 533,492 $ 364,118 47% $1,783,389 $1,184,360 51%
Average sales price
- closings $ 363 $ 294 24% $ 339 $ 279 21%
Home orders (units) 1,131 1,094 3% 5,615 4,795 17%
Home order value $ 414,584 $ 353,862 17% $1,982,303 $1,414,772 40%
Average sales price
- orders $ 367 $ 323 13% $ 353 $ 295 20%
Ending backlog
(units) 1,853 1,472 26%
Ending backlog value $ 686,672 $ 479,266 43%
Average sales price
- backlog $ 371 $ 326 14%
Net earnings $ 46,089 $ 95,128 (52)% $ 124,464 $ 105,163 18%
Diluted EPS $ 1.19 $ 2.49 (52)% $ 3.25 $ 3.00 8%
MANAGEMENT COMMENTS
"2013 was another year of strong revenue growth and earnings acceleration for Meritage Homes, and the fourth quarter was our eleventh consecutive quarter of year-over-year growth in orders," said Steven J. Hilton, chairman and chief executive officer of Meritage Homes. "Our orders and closing volumes grew due to strong demand and a 19% increase in our active communities open at year-end. In addition, rising home prices pushed our total order value and closing revenue to their highest levels in more than five years. Price appreciation also contributed to our home closing gross margins expanding to 22.0% for the year and 23.2% in the fourth quarter.
"With those margin gains, we produced an 80% increase in full year home closing gross profit and grew our annual pre-tax earnings by a multiple of six times on a 51% increase in home closing revenue in 2013," he explained. "Our growth was less evident in our net earnings and earnings per share, as our 2012 annual results included a $76.3 million net tax benefit, while 2013 results included a provision for tax expense of $53.2 million."
Mr. Hilton continued, "The homebuilding market strengthened in 2013 as jobs, improved buyer confidence and a shortage of homes for sale drove housing starts higher," continued Mr. Hilton. "We believe market conditions remain positive for continued growth in 2014 and beyond. Based on our positive outlook, we invested approximately $565 million during the year in land and development, and contracted for approximately 11,200 new lots in great locations at attractive prices, ending the year with about 25,700 total lots under control. We raised approximately $280 million during 2013 through the issuance of senior unsecured notes and completed a $110 million stock offering in January 2014 to further solidify our balance sheet and fund additional growth.
"We closed 2013 with significantly higher backlog, total assets and stockholders' equity than we had at the end of 2012, and believe we have sufficient liquidity to grow as the housing market continues to improve," concluded Mr. Hilton. "At this time, we expect to grow our community count to 210-220 by the end of 2014."
FOURTH QUARTER RESULTS
- Net earnings of $46.1 million ($1.19 per diluted share) were net of a $19.8 million provision for income taxes, while prior year net earnings of $95.1 million ($2.49 per diluted share) included a $71.5 million net tax benefit primarily due to the reversal of a majority of our deferred tax asset valuation allowances.
- Home closing revenue increased 47% due to an 18% increase in home closings combined with a 24% increase in average price over the prior year period. The strongest growth was in the expanded East Region (Florida, the Carolinas and Tennessee), which grew closings and home closing revenue by 58% and 116%, respectively, compared to 31% growth in home closing revenue in both the West and Central Regions.
- The total value of homes ordered increased 17%, primarily due to a 13% increase in average selling price combined with a 3% increase in order volume. Average sales price for the fourth quarter increased to $367,000 from $323,000 in 2012. The fourth quarter of 2013 was Meritage's eleventh consecutive quarter of year-over-year growth in home orders, and monthly sales improved sequentially every month throughout the quarter, before including the Company's new Tennessee division, which added 26 orders in the fourth quarter of 2013.
- An average of 6.2 orders per community during the fourth quarter 2013 was the second highest fourth quarter in the last eight years, exceeded only by 2012's 7.0 average orders per community. California and Colorado sold the highest number of homes per average community.
- Cancellation rates increased to 15% in the fourth quarter of 2013, compared to 13% in the fourth quarter of 2012, but still remained well below historical rates for the Company.
- Ending backlog of orders was up 26% over the prior year, and the total value of orders in backlog was up 43%, aided by a 14% increase in the average sales price per home.
- Home closing gross profit increased 80% over the prior year, and home closing gross margin increased by 430 basis points to 23.2% in the fourth quarter of 2013 compared to 18.9% in the fourth quarter of 2012. Increased margins reflected the Company's success in managing smaller increases in its cost of sales relative to rising home prices.
- Commissions and selling expenses decreased by 60 basis points from the prior year, to 6.8% of home closing revenue in the fourth quarter of 2013, compared to 7.4% of home closing revenue in the fourth quarter of 2012, as higher closing revenue resulted in greater leverage of the fixed components within selling costs.
- General and administrative expenses for the fourth quarter of 2013 decreased by 30 basis points to 4.6% of total closing revenue in 2013, compared to 4.9% of total closing revenue in 2012, despite increasing by $7.2 million over the prior year, primarily due to hiring of additional employees and higher compensation expense.
- Interest expense decreased to $2.0 million or 0.4% of closing revenue in the fourth quarter of 2013, compared to $5.5 million or 1.5% of closing revenue in the fourth quarter of 2012, as more interest was capitalized to assets under development.
- Earnings before income taxes increased 179% to $65.9 million from $23.6 million in the fourth quarters of 2013 and 2012, respectively. Pretax margin for the fourth quarter increased 570 basis points to 12.2% in 2013 compared to 6.5% in 2012.
FULL YEAR RESULTS
- Net income of $124.5 million for the full year of 2013 included a $53.2 provision for income taxes and a $3.8 million loss on early extinguishment of debt, compared to 2012's net income of $105.2 million, which included a net tax benefit of $76.3 million and a $5.8 million loss on early extinguishment of debt.
- Home closings and closing revenue increased 24% and 51%, respectively, for 2013 as compared to 2012.
- 2013 home closing gross margins improved by 360 basis points to 22.0% compared to 18.4% for 2012.
- Net orders for the year increased 17% in 2013 over 2012, and total order value increased 40% year over year, aided by a 20% increase in average sales prices.
- The total value of orders in backlog at year-end 2013 was 43% higher than the prior year's ending backlog.
BALANCE SHEET
- Cash and cash equivalents, restricted cash and securities at December 31, 2013, totaled $363.8 million, compared to $295.5 million at December 31, 2012. During 2013, Meritage received approximately $280 million from the sale of $175 million of 4.50% senior notes due 2018 and $100 million of its 7.15% senior notes due 2020 (sold at a premium of $106.699 for a yield of 5.875%). Approximately $100 million of the capital raised was used to fully retire the Company's 7.731% senior subordinated notes due 2017. In January 2014, the company also issued approximately 2.53 million shares of common stock for net proceeds of approximately $110 million.
- Meritage Homes expanded into the Nashville, Tennessee market through the acquisition of Phillips Builders in August 2013, which added approximately 500 lots to Meritage's total lot inventory.
- Real estate assets increased by $292.1 million for the year 2012, ending at $1.4 billion at December 31, 2013, compared to $1.1 billion at December 31, 2012. Approximately 61% of the increase was in finished home sites (lots) and home sites under development, as Meritage acquired and developed lots for new communities in growing markets.
- Meritage ended the quarter with approximately 25,700 total lots under control, of which 74% were owned and 26% controlled under option and purchase contracts, compared to approximately 20,800 total lots at December 31, 2012. Based on its trailing twelve months' closings, Meritage controlled a 4.9 year supply of lots at the end of 2013.
- Net debt-to-capital ratio at December 31, 2013 was 39.1%, compared to 38.1% at December 31, 2012. Giving effect to the January equity offering, Meritage's pro forma net debt-to-capital ratio would have been 31.2%.
- The Company increased the borrowing capacity under its revolving credit facility to $200 million from $135 million during the fourth quarter, providing additional liquidity for working capital and growth, while also eliminating all restrictions on cash previously required under its letters of credit facilities.
CONFERENCE CALL
Management will host a conference call today to discuss the Company's results at 10:30 a.m. Eastern Time (7:30 a.m. Pacific Time). 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/10038596.
Telephone participants who are unable to pre-register may dial in to 888-317-6016 on the day of the call. International dial-in number is 1-412-317-6016.
A replay of the call will be available for fifteen days, beginning at 12:30 p.m. ET on February 5, 2014 on the website noted above, or by dialing 877-344-7529, and referencing conference number 10038596. For more information, visit meritagehomes.com.
Meritage Homes Corporation and Subsidiaries
Operating Results
(Unaudited)
(In thousands, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
2013 2012 2013 2012
----------- ----------- ----------- -----------
Homebuilding:
Home closing revenue $ 533,492 $ 364,118 $ 1,783,389 $ 1,184,360
Land closing revenue 2,702 468 31,270 9,314
----------- ----------- ----------- -----------
Total closing
revenue 536,194 364,586 1,814,659 1,193,674
----------- ----------- ----------- -----------
Cost of home closings (409,918) (295,355) (1,391,475) (966,384)
Cost of land closings (2,627) (258) (26,766) (9,091)
----------- ----------- ----------- -----------
Total cost of
closings (412,545) (295,613) (1,418,241) (975,475)
----------- ----------- ----------- -----------
Home closing gross
profit 123,574 68,763 391,914 217,976
Land closing gross
profit 75 210 4,504 223
----------- ----------- ----------- -----------
Total closing gross
profit 123,649 68,973 396,418 218,199
----------- ----------- ----------- -----------
Financial Services:
Revenue 2,077 526 6,037 779
Expense (1,037) (497) (3,266) (981)
Earnings from
financial services
unconsolidated
entities and other,
net 3,399 3,483 13,183 10,457
----------- ----------- ----------- -----------
Financial services
profit 4,439 3,512 15,954 10,255
----------- ----------- ----------- -----------
Commissions and other
sales costs (36,190) (26,883) (126,716) (94,833)
General and
administrative expenses (24,923) (17,739) (91,510) (68,185)
Earnings/(loss) from
other unconsolidated
entities, net (149) 124 (378) (224)
Interest expense (1,979) (5,526) (15,092) (24,244)
Other income/(loss), net 1,032 1,139 2,792 (6,342)
Loss on early
extinguishment of debt -- -- (3,796) (5,772)
----------- ----------- ----------- -----------
Earnings before income
taxes 65,879 23,600 177,672 28,854
(Provision for)/benefit
from income taxes (19,790) 71,528 (53,208) 76,309
----------- ----------- ----------- -----------
Net earnings $ 46,089 $ 95,128 $ 124,464 $ 105,163
=========== =========== =========== ===========
Earnings per share:
Basic
Earnings per share $ 1.27 $ 2.67 $ 3.45 $ 3.09
Weighted average
shares outstanding 36,240 35,595 36,105 34,057
Diluted
Earnings per share $ 1.19 $ 2.49 $ 3.25 $ 3.00
Weighted average
shares outstanding 38,905 38,308 38,801 35,172
Meritage Homes Corporation and Subsidiaries
Consolidated Balance Sheets
(In thousands)
(unaudited)
December December
31, 2013 31, 2012
---------- ----------
Assets:
Cash and cash equivalents $ 274,136 $ 170,457
Investments and securities 89,687 86,074
Restricted cash -- 38,938
Other receivables 38,983 20,290
Real estate (1) 1,405,299 1,113,187
Real estate not owned 289 --
Deposits on real estate under option or contract 51,595 14,351
Investments in unconsolidated entities 11,638 12,085
Property and equipment, net 22,099 15,718
Deferred tax asset 70,404 77,974
Prepaid, other assets and goodwill 39,231 26,488
---------- ----------
Total assets $2,003,361 $1,575,562
========== ==========
Liabilities:
Accounts payable $ 68,018 $ 49,801
Accrued liabilities 166,611 96,377
Home sale deposits 21,996 12,377
Liabilities related to real estate not owned 289 --
Senior, senior subordinated, convertible senior
notes and other borrowings 905,055 722,797
---------- ----------
Total liabilities 1,161,969 881,352
---------- ----------
Stockholders' Equity:
Preferred stock, par value $0.01 -- --
Common stock, par value $0.01 362 356
Additional paid-in capital 412,961 390,249
Retained earnings 428,069 303,605
---------- ----------
Total stockholders' equity 841,392 694,210
---------- ----------
Total liabilities and stockholders' equity $2,003,361 $1,575,562
========== ==========
(1)Real estate - Allocated costs:
Homes under contract under construction $ 262,633 $ 192,948
Unsold homes, completed and under construction 147,889 107,466
Model homes 81,541 62,411
Finished home sites and home sites under development 813,135 634,106
Land held for development 52,100 56,118
Land held for sale 19,112 21,650
Communities in mothball status 28,889 38,488
---------- ----------
Total real estate $1,405,299 $1,113,187
========== ==========
Supplemental Information and Non-GAAP Financial Disclosures (In thousands -
unaudited):
Three Months Ended Twelve Months Ended
December 31, December 31,
2013 2012 2013 2012
---------- ---------- ---------- ----------
Depreciation and
amortization $ 2,765 $ 2,283 $ 9,934 $ 8,196
========== ========== ========== ==========
Summary of Capitalized
Interest:
Capitalized interest,
beginning of period $ 28,998 $ 20,185 $ 21,600 $ 14,810
Interest incurred 13,276 12,316 51,152 46,135
Interest expensed (1,979) (5,526) (15,092) (24,244)
Interest amortized to cost
of home, land closings and
impairments (7,303) (5,375) (24,668) (15,101)
---------- ---------- ---------- ----------
Capitalized interest, end of
period $ 32,992 $ 21,600 $ 32,992 $ 21,600
========== ========== ========== ==========
Proforma
Dec 31,
2013
(includes
Jan 2014
December December equity
31, 2013 31, 2012 offering)
---------- ---------- ----------
Notes payable and other
borrowings $ 905,055 $ 722,797 $ 905,055
Stockholders' equity 841,392 694,210 951,731
---------- ---------- ----------
Total capital 1,746,447 1,417,007 1,856,786
---------- ---------- ----------
Debt-to-capital 51.8% 51.0% 48.7%
Notes payable and other
borrowings $ 905,055 $ 722,797 $ 905,055
Less: cash and cash
equivalents, restricted
cash, and investments and
securities (363,823) (295,469) (474,162)
---------- ---------- ----------
Net debt 541,232 427,328 430,893
Stockholders' equity 841,392 694,210 951,731
---------- ---------- ----------
Total net capital $1,382,624 $1,121,538 $1,382,624
========== ========== ==========
Net debt-to-capital 39.1% 38.1% 31.2%
Meritage Homes Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(In thousands) (unaudited)
Twelve Months Ended
December 31,
2013 2012
----------- -----------
Cash flows from operating activities:
Net earnings $ 124,464 $ 105,163
Adjustments to reconcile net earnings to net
cash used in operating activities:
Depreciation and amortization 9,934 8,196
Stock-based compensation 9,483 8,319
Loss on early extinguishment of debt 3,796 5,772
Equity in earnings from unconsolidated
entities (12,805) (10,233)
Deferred tax asset valuation benefit (8,666) (77,974)
Distribution of earnings from unconsolidated
entities 13,013 9,648
Other 15,851 2,380
Changes in assets and liabilities:
Increase in real estate (281,944) (299,185)
(Increase)/decrease in deposits on real estate
under option or contract (36,974) 824
Increase in receivables and prepaid expenses
and other assets (18,429) (6,301)
Increase in accounts payable and accrued
liabilities 86,604 29,385
Increase in home sale deposits 9,397 3,519
----------- -----------
Net cash used in operating activities (86,276) (220,487)
----------- -----------
Cash flows from investing activities:
Purchases of property and equipment (15,783) (10,863)
Maturities of investments and securities 163,012 198,201
Payments to purchase investments and securities (166,619) (136,823)
Cash paid for acquisitions (18,624) --
Decrease/(increase) in restricted cash 38,938 (26,792)
Other 107 121
----------- -----------
Net cash provided by investing activities 1,031 23,844
----------- -----------
Cash flows from financing activities:
Repayments of senior and senior subordinated
notes (102,822) (315,080)
Proceeds from issuance of senior notes 281,699 426,500
Proceeds from sale of common stock, net -- 87,113
Other 10,047 (5,045)
----------- -----------
Net cash provided by financing activities 188,924 193,488
----------- -----------
Net increase in cash and cash equivalents 103,679 (3,155)
Beginning cash and cash equivalents 170,457 173,612
----------- -----------
Ending cash and cash equivalents (2) $ 274,136 $ 170,457
=========== ===========
(2) Ending cash and cash equivalents as of December 31, 2013 and December
31, 2012 excludes investments and securities and restricted cash totaling
$89.7 million and $125.0 million, respectively.
Meritage Homes Corporation and Subsidiaries
Operating Data
(Dollars in thousands)
(unaudited)
Three Months Ended
December 31, 2013 December 31, 2012
----------------------- -----------------------
Homes Value Homes Value
----------- ----------- ----------- -----------
Homes Closed:
Arizona 297 $ 96,408 232 $ 67,910
California 205 98,472 243 91,813
Colorado 107 46,555 65 20,991
Nevada -- -- 22 4,042
----------- ----------- ----------- -----------
West Region 609 241,435 562 184,756
----------- ----------- ----------- -----------
Texas 522 148,853 465 113,206
----------- ----------- ----------- -----------
Central Region 522 148,853 465 113,206
----------- ----------- ----------- -----------
Carolinas 86 35,361 33 11,375
Florida 235 102,220 180 54,781
Tennessee 16 5,623 -- --
----------- ----------- ----------- -----------
East Region 337 143,204 213 66,156
----------- ----------- ----------- -----------
Total 1,468 $ 533,492 1,240 $ 364,118
=========== =========== =========== ===========
Homes Ordered:
Arizona 184 $ 62,139 178 $ 56,426
California 169 78,828 251 103,275
Colorado 107 46,837 98 35,391
Nevada -- -- 9 2,018
----------- ----------- ----------- -----------
West Region 460 187,804 536 197,110
----------- ----------- ----------- -----------
Texas 437 133,608 389 97,458
----------- ----------- ----------- -----------
Central Region 437 133,608 389 97,458
----------- ----------- ----------- -----------
Carolinas 80 31,626 33 11,772
Florida 128 53,801 136 47,522
Tennessee 26 7,745 -- --
----------- ----------- ----------- -----------
East Region 234 93,172 169 59,294
----------- ----------- ----------- -----------
Total 1,131 $ 414,584 1,094 $ 353,862
=========== =========== =========== ===========
Twelve Months Ended
December 31, 2013 December 31, 2012
----------------------- -----------------------
Homes Value Homes Value
----------- ----------- ----------- -----------
Homes Closed:
Arizona 1,041 $ 329,855 825 $ 221,100
California 989 427,886 732 264,388
Colorado 405 158,793 292 96,807
Nevada 38 8,900 61 11,444
----------- ----------- ----------- -----------
West Region 2,473 925,434 1,910 593,739
----------- ----------- ----------- -----------
Texas 1,834 492,777 1,655 390,642
----------- ----------- ----------- -----------
Central Region 1,834 492,777 1,655 390,642
----------- ----------- ----------- -----------
Carolinas 239 93,210 117 41,888
Florida 691 264,066 556 158,091
Tennessee 22 7,902 -- --
----------- ----------- ----------- -----------
East Region 952 365,178 673 199,979
----------- ----------- ----------- -----------
Total 5,259 $ 1,783,389 4,238 $ 1,184,360
=========== =========== =========== ===========
Homes Ordered:
Arizona 1,070 $ 346,278 916 $ 256,684
California 899 410,761 965 361,328
Colorado 465 201,088 364 123,403
Nevada 24 5,795 70 13,473
----------- ----------- ----------- -----------
West Region 2,458 963,922 2,315 754,888
----------- ----------- ----------- -----------
Texas 2,126 606,115 1,759 429,465
----------- ----------- ----------- -----------
Central Region 2,126 606,115 1,759 429,465
----------- ----------- ----------- -----------
Carolinas 298 119,087 142 50,613
Florida 696 282,328 579 179,806
Tennessee 37 10,851 -- --
----------- ----------- ----------- -----------
East Region 1,031 412,266 721 230,419
----------- ----------- ----------- -----------
Total 5,615 $ 1,982,303 4,795 $ 1,414,772
=========== =========== =========== ===========
Order Backlog:
Arizona 278 $ 97,239 249 $ 80,816
California 225 107,463 315 124,588
Colorado 202 92,384 142 50,089
Nevada -- -- 14 3,105
----------- ----------- ----------- -----------
West Region 705 297,086 720 258,598
----------- ----------- ----------- -----------
Texas 792 245,655 500 132,317
----------- ----------- ----------- -----------
Central Region 792 245,655 500 132,317
----------- ----------- ----------- -----------
Carolinas 108 43,218 49 17,341
Florida 208 89,272 203 71,010
Tennessee 40 11,441 -- --
----------- ----------- ----------- -----------
East Region 356 143,931 252 88,351
----------- ----------- ----------- -----------
Total 1,853 $ 686,672 1,472 $ 479,266
=========== =========== =========== ===========
Meritage Homes Corporation and Subsidiaries
Operating Data
(unaudited)
Three Months Ended
December 31, 2013 December 31, 2012
----------------- -----------------
Beg. End Beg. End
-------- -------- -------- --------
Active Communities:
Arizona 39 40 34 38
California 18 22 19 17
Colorado 12 14 8 12
Nevada -- -- 2 1
-------- -------- -------- --------
West Region 69 76 63 68
-------- -------- -------- --------
Texas 73 70 68 65
-------- -------- -------- --------
Central Region 73 70 68 65
-------- -------- -------- --------
Carolinas 15 17 7 7
Florida 19 20 15 18
Tennessee 3 5 -- --
-------- -------- -------- --------
East Region 37 42 22 25
-------- -------- -------- --------
Total 179 188 153 158
======== ======== ======== ========
Twelve Months Ended
------------------------------------
December 31, 2013 December 31, 2012
----------------- -----------------
Beg. End Beg. End
-------- -------- -------- --------
Active Communities:
Arizona 38 40 37 38
California 17 22 20 17
Colorado 12 14 10 12
Nevada 1 -- 2 1
-------- -------- -------- --------
West Region 68 76 69 68
Texas 65 70 67 65
-------- -------- -------- --------
Central Region 65 70 67 65
Carolinas 7 17 3 7
Florida 18 20 18 18
Tennessee -- 5 -- --
-------- -------- -------- --------
East Region 25 42 21 25
-------- -------- -------- --------
Total 158 188 157 158
======== ======== ======== ========
About Meritage Homes Corporation
Meritage Homes is the ninth-largest public homebuilder in the United States, based on homes closed in 2012. Meritage builds and sells single-family homes for first-time, move-up, luxury and active adult buyers across the Western, Southern and Southeastern United States. As of December 31, 2013, the company had 188 actively selling communities in markets including Sacramento, San Francisco's East Bay, the Central Valley and Orange County, California; Houston, Dallas-Ft. Worth, Austin and San Antonio, Texas; Phoenix/Scottsdale, Green Valley and Tucson, Arizona; Denver, Colorado; Orlando and Tampa, Florida; Raleigh and Charlotte, North Carolina; York County, South Carolina and Nashville, Tennessee.
Meritage has designed and built more than 80,000 homes in its 28-year history, and has a reputation for its distinctive style, quality construction, and positive customer experience. Meritage is the industry leader in energy efficient homebuilding and in 2013, Meritage received the U.S. Environmental Protection Agency's ENERGY STAR Partner of the Year for Sustained Excellence Award, for its innovation and industry leadership in energy efficient homebuilding. Meritage was the first national homebuilder to be 100 percent ENERGY STAR® qualified in every home it builds, and far exceeds ENERGY STAR standards today.
For more information, visit meritagehomes.com.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include management's expectations for positive housing market conditions, its plans to grow as the market improves and belief that it has sufficient liquidity to fund additional growth, and its projected community count by the end of 2014.
Such statements are based upon the current beliefs and expectations of Company management, and current market conditions, which are subject to significant risks and uncertainties. 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. The risks and uncertainties include but are not limited to the following: weakness in the homebuilding market resulting from an unexpected setback in the current economic recovery; the availability of finished lots and undeveloped land; interest rates and changes in the availability and pricing of residential mortgages; the availability and cost of materials and labor; adverse changes in tax laws that benefit our homebuyers; the ability of our potential buyers to sell their existing homes; cancellation rates and home prices in our markets; inflation in the cost of materials used to construct homes; the adverse effect of slower order absorption rates; potential write-downs or write-offs of assets, including pre-acquisition costs and deposits; our potential exposure to natural disasters; competition; the adverse impacts of cancellations resulting from small deposits relating to our sales contracts; construction defect and home warranty claims; our success in prevailing on contested tax positions; our ability to preserve our deferred tax assets and use them within the statutory time limits; delays and risks associated with land development; our ability to obtain performance bonds in connection with our development work; the liquidity of our joint ventures and the ability of our joint venture partners to meet their obligations to us and the joint venture; the loss of key personnel; changes in or our failure to comply with laws and regulations; our lack of geographic diversification; fluctuations in quarterly operating results; our financial leverage and level of indebtedness; our ability to take certain actions because of restrictions contained in the indentures for our senior notes and our ability to raise additional capital when and if needed; our credit ratings; successful integration of future acquisitions; government regulations and legislative or other initiatives that seek to restrain growth or new housing construction or similar measures; acts of war; the replication of our "Green" 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, 2012 under the caption "Risk Factors," which can be found on our website.
Contacts: Brent Anderson VP Investor Relations (972) 580-6360 (office) Brent.Anderson@meritagehomes.com
Source: Meritage Homes Corp.
Released February 5, 2014