Meritage Homes Reports Results for the Second Quarter of 2013

21% Growth in Orders, 55% Increase in Home Closing Revenue, 21.5% Home Closing Gross Margin and Diluted EPS of $0.74

SCOTTSDALE, AZ -- (Marketwired) -- 07/24/13 -- Meritage Homes Corporation (NYSE: MTH), a leading U.S. homebuilder, today announced second quarter results for the period ended June 30, 2013.


                   Summary Operating Results (unaudited)
              (Dollars in thousands, except per share amounts)


                     Three Months Ended June 30,  Six Months Ended June 30,
                         2013      2012    %Chg     2013       2012    %Chg
                      --------- --------- -----  ---------- --------- -----

Homes closed (units)      1,321     1,042    27%      2,373     1,801    32%
Home closing revenue  $ 436,040 $ 281,340    55% $  766,750 $ 485,362    58%
Average sales price -
 closings             $     330 $     270    22% $      323 $     269    20%
Home orders (units)       1,637     1,353    21%      3,184     2,497    28%
Home order value      $ 573,392 $ 385,829    49% $1,093,795 $ 694,158    58%
Average sales price -
 orders               $     350 $     285    23% $      344 $     278    24%
Ending backlog
 (units)                                              2,283     1,611    42%
Ending backlog value                             $  806,311 $ 457,650    76%
Average sales price -
 backlog                                         $      353 $     284    24%
Net earnings          $  28,143 $   8,005   252% $   40,184 $   3,251 1,136%
Diluted EPS           $    0.74 $    0.24   208% $     1.06 $    0.10   960%

MANAGEMENT COMMENTS

"The second quarter of 2013 was another quarter of strong growth, with continued significant improvements across our operating metrics," said Steven J. Hilton, chairman and chief executive officer of Meritage Homes. "This was our ninth consecutive quarter of positive year-over-year growth in orders and our seventh consecutive quarter of growth in closing revenue year over year.

"More importantly, our earnings continued to grow at a much higher rate than our revenue. Our gross margin on home closings increased to 21.5%, and our additional operating leverage drove year-over-year net earnings growth of 252% on a 55% increase in home closing revenue.

"Despite the recent rise in interest rates and home prices, affordability remains excellent and demand for new homes continues to be strong in our markets, as evidenced by our pace of orders increasing over last quarter's pace and well above the second quarter of 2012," Mr. Hilton explained.

"In a competitive land market, I am also pleased with our ability to acquire new lot positions for additional growth. We increased our total lot supply by more than 1,500 lots during the quarter, putting more than 3,500 new lots under control, which was the second highest number of lots we have acquired over the last six quarters. We continue to seek new opportunities to expand our footprint while also allocating capital to grow within our existing markets."

STRONG GROWTH

  • Total order value in the second quarter increased 49% year over year due to a 23% increase in average price and a 21% increase in total orders. Total order value and backlog grew in every state except Nevada, where the company has now ceased operations. The average sales price of approximately $350,000 on orders was the highest for Meritage in more than eight years, reflecting the combination of a greater portion of orders in higher-priced communities in addition to home price appreciation.
  • Ending backlog value increased 76% over the second quarter of 2012, combining a 24% increase in average sales price with 42% growth in units. Colorado, the Carolinas and Florida led with growth in backlog value of 164%, 127% and 99%, respectively, over the prior year. Meritage's expansion into Charlotte early last year accounted for some of the growth in the Carolinas.
  • Orders per average community increased to 9.8 for the second quarter of 2013 from 9.0 in the second quarter of 2012 and 9.5 in the first quarter of 2013.
  • Meritage ended the quarter with 165 active communities, up from 151 at June 30, 2012.
  • Order cancellation rate fell to 11% in the second quarter of 2013, compared to 13% in the prior year.

OPERATING LEVERAGE

  • Net earnings for the second quarter increased 252% year over year to $28.1 million or $0.74 per diluted share in 2013, compared to $8.0 million or $0.24 per diluted share in 2012, primarily due to higher home closing revenue and gross margins, coupled with overhead expense leverage.
  • Home closing revenue increased 55% year over year due to a 22% increase in average price on top of a 27% increase in total homes closed in the second quarter. Every state grew over the prior year in closings, revenue and average prices.
  • Home closing gross margin increased to 21.5% in the second quarter of 2013, a year-over-year improvement of 300 bps compared to 18.5% in the second quarter of 2012, and a sequential improvement of 200 bps compared to 19.5% in the first quarter of 2013. The significant margin growth reflects both home price appreciation and the effects of improved management of direct costs.
  • Commissions and other sales costs in the second quarter improved 100 bps due to operating leverage, decreasing as a percentage of home closing revenue to 7.2% in 2013 from 8.2% in 2012.
  • General and administrative expenses also improved 90 bps due to operating leverage, declining to 5.0% of second quarter revenue in 2013, from 5.9% in 2012. The majority of the $5.9 million increase over last year was the result of additional hiring and compensation expense.
  • Interest expense improved 120 bps, declining to 1.0% of second quarter revenue in 2013 compared to 2.2% in 2012, as more interest was capitalized to additional land under development and homes under construction.
  • Second quarter pre-tax margin increased 750 bps to 8.5% in 2013 from 1.0% in 2012, or $38.5 million in 2013 pre-tax income compared to $2.8 million in 2012.

YEAR-TO-DATE RESULTS

  • Net earnings of $40.2 million for the first half of 2013 included a $3.8 million loss on early extinguishment of debt and a tax provision of $14.8 million, compared to net earnings of $3.3 million for the first half of 2012, which included a $5.8 million loss on early extinguishment of debt and a $5.0 million tax benefit.
  • Home closings and closing revenue for the first half of the year increased 32% and 58%, respectively, for 2013 over 2012, reflecting the combination of a greater portion of sales in higher-priced communities in addition to home price appreciation.
  • Year-to-date home closing gross margin improved by 270 basis points to 20.6% for 2013, compared to 17.9% for 2012, as a result of home price appreciation and improved management of direct costs.
  • Total selling, general and administrative expenses decreased 250 basis points as a percentage of revenue to 12.6% in the first half of 2013 compared to 15.1% in 2012, reflecting operating leverage.
  • Net orders for the first half of the year increased 28% in 2013 over 2012, and combined with a 24% increase in average sales prices, resulting in total order value increasing 58% year over year.

BALANCE SHEET STRENGTH

  • Meritage replenished its land pipeline by spending approximately $156 million on land acquisition and development in the second quarter of 2013, and added approximately 3,500 new lots under contract during the quarter.
  • Total lot supply at the end of the quarter was approximately 22,600, compared to approximately 17,600 a year earlier. Based on trailing twelve months closings, the June 30, 2013 balance represents a 4.7 year supply of lots.
  • The company ended the second quarter of 2013 with $353 million in cash and cash equivalents, restricted cash and securities, an increase of $148 million over the June 30, 2012 total of $205 million. Net debt to total capital ratio decreased to 37.2% at June 30, 2013, from 44.1% at June 30, 2012 and 38.1% at December 31, 2012, despite a $75.4 million increase in debt this year.

SUMMARY

"Most housing metrics have been moving in a positive direction over the last year, albeit from historically depressed levels. As the U.S. economy improves and creates jobs, demand for new homes should remain strong, especially in light of the shortage of used homes listed for sale," said Mr. Hilton. "Nearly every major housing market is experiencing price appreciation, which is good for both existing homeowners and homebuilders, and is helping to drive our revenue growth well in excess of our growth in orders and closings. Buyers may conclude that they missed the absolute bottom of the market in terms of prices and interest rates, but they also recognize that both are still a bargain in terms of the amount of house you can buy at a given income level.

"Assuming continued growth in the market due to those factors, and based on our better than expected second quarter performance and subsequently revised projections, we are projecting home closing revenue of approximately $1.7-1.8 billion for 2013, resulting in projected earnings per diluted share in the range of $2.65-$2.85 for the year."

CONFERENCE CALL

Management will host a conference call today to discuss the Company's second quarter 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 Pre-registration link: http://services.choruscall.com/DiamondPassRegistration/register?confirmationNumber=10030804&linkSecurityString=259fe32118.

Telephone participants who are unable to pre-register may dial in to 888-317-6016 on the day of the call.

A replay of the call will be available for fifteen days, beginning at 12:30 p.m. ET on July 24, 2013 on the website noted above, or by dialing 877-344-7529, and referencing conference number 10030804. For more information, visit meritagehomes.com.


                Meritage Homes Corporation and Subsidiaries
                             Operating Results
                                (Unaudited)
                   (In thousands, except per share data)


                                  Three Months Ended     Six Months Ended
                                       June 30,              June 30,
                                    2013       2012       2013       2012
                                 ---------  ---------  ---------  ---------
Homebuilding:
  Home closing revenue           $ 436,040  $ 281,340  $ 766,750  $ 485,362
  Land closing revenue              13,910        755     19,635      1,083
                                 ---------  ---------  ---------  ---------
    Total closing revenue          449,950    282,095    786,385    486,445
                                 ---------  ---------  ---------  ---------
  Cost of home closings           (342,435)  (229,394)  (608,785)  (398,303)
  Cost of land closings            (12,463)    (1,135)   (18,013)    (1,340)
                                 ---------  ---------  ---------  ---------
    Total cost of closings        (354,898)  (230,529)  (626,798)  (399,643)
                                 ---------  ---------  ---------  ---------
  Home closing gross profit         93,605     51,946    157,965     87,059
  Land closing gross
   profit/(loss)                     1,447       (380)     1,622       (257)
                                 ---------  ---------  ---------  ---------
    Total closing gross profit      95,052     51,566    159,587     86,802
                                 ---------  ---------  ---------  ---------
Financial Services:
  Revenue                            1,434          -      2,276          -
  Expense                             (755)      (142)    (1,328)      (167)
  Earnings from financial
   services unconsolidated
   entities and other, net           3,486      2,319      6,273      3,925
                                 ---------  ---------  ---------  ---------
    Financial services profit        4,165      2,177      7,221      3,758
                                 ---------  ---------  ---------  ---------
Commissions and other sales
 costs                             (31,180)   (23,118)   (57,059)   (42,095)
General and administrative
 expenses                          (22,451)   (16,516)   (42,175)   (31,237)
Loss from other unconsolidated
 entities, net                        (120)       (91)      (275)      (274)
Interest expense                    (4,523)    (6,338)    (9,651)   (13,709)
Other income, net                      685        934      1,155        795
Loss on early extinguishment of
 debt                               (3,096)    (5,772)    (3,796)    (5,772)
                                 ---------  ---------  ---------  ---------
Earnings/(loss) before income
 taxes                              38,532      2,842     55,007     (1,732)
(Provision for)/benefit from
 income taxes                      (10,389)     5,163    (14,823)     4,983
                                 ---------  ---------  ---------  ---------
Net earnings                     $  28,143  $   8,005  $  40,184  $   3,251
                                 =========  =========  =========  =========

Earnings per share:
  Basic
      Earnings per share         $    0.78  $    0.24  $    1.12  $    0.10
      Weighted average shares
       outstanding                  36,151     32,755     35,976     32,694
  Diluted
      Earnings per share         $    0.74  $    0.24  $    1.06  $    0.10
      Weighted average shares
       outstanding                  38,758     33,104     38,662     33,086


                 Meritage Homes Corporation and Subsidiaries
                         Consolidated Balance Sheets
                               (In thousands)
                                 (unaudited)


                                                     June 30,   December 31,
                                                       2013         2012
                                                   ------------ ------------
Assets:
  Cash and cash equivalents                        $    218,019 $    170,457
  Investments and securities                             91,988       86,074
  Restricted cash                                        43,265       38,938
  Other receivables                                      30,246       20,290
  Real estate (1)                                     1,227,229    1,113,187
  Deposits on real estate under option or contract       21,712       14,351
  Investments in unconsolidated entities                 10,698       12,085
  Property and equipment, net                            17,013       15,718
  Deferred tax asset                                     77,279       77,974
  Prepaid expenses and other assets                      30,028       26,488
                                                   ------------ ------------
    Total assets                                   $  1,767,477 $  1,575,562
                                                   ============ ============
Liabilities:
  Accounts payable                                 $     68,662 $     49,801
  Accrued liabilities                                   124,353       96,377
  Home sale deposits                                     25,566       12,377
  Senior, senior subordinated, convertible senior
   notes and other borrowings                           798,215      722,797
                                                   ------------ ------------
      Total liabilities                               1,016,796      881,352
                                                   ------------ ------------
Stockholders' Equity:
  Preferred stock, par value $0.01.                           -            -
  Common stock, par value $0.01.                            362          356
  Additional paid-in capital                            406,530      390,249
  Retained earnings                                     343,789      303,605
                                                   ------------ ------------
      Total stockholders' equity                        750,681      694,210
                                                   ------------ ------------
    Total liabilities and stockholders' equity     $  1,767,477 $  1,575,562
                                                   ============ ============
(1) Real estate -Allocated costs:
  Homes under contract under construction          $    304,159 $    192,948
  Unsold homes, completed and under construction         96,076      107,466
  Model homes                                            70,596       62,411
  Finished home sites and home sites under
   development                                          644,315      634,106
  Land held for development                              57,650       56,118
  Land held for sale                                     15,104       21,650
  Communities in mothball status                         39,329       38,488
                                                   ------------ ------------
      Total real estate                            $  1,227,229 $  1,113,187
                                                   ============ ============

 Supplemental Information and Non-GAAP Financial Disclosures (In thousands -
                                 unaudited):


                                 Three Months Ended      Six Months Ended
                                      June 30,               June 30,
                                  2013        2012        2013       2012
                               ----------  ----------  ---------  ---------
Depreciation and amortization  $    2,500  $    1,921  $   4,658  $   3,614
                               ==========  ==========  =========  =========

Summary of Capitalized
 Interest:
Capitalized interest,
 beginning of period           $   24,198  $   15,908  $  21,600  $  14,810
Interest incurred                  12,642      11,318     25,368     22,165
Interest expensed                  (4,523)     (6,338)    (9,651)   (13,709)
Interest amortized to cost of
 home, land closings and
 impairments                       (6,023)     (3,052)   (11,023)    (5,430)
                               ----------  ----------  ---------  ---------
Capitalized interest, end of
 period                        $   26,294  $   17,836  $  26,294  $  17,836
                               ==========  ==========  =========  =========

                                June 30,   December 31,
                                  2013        2012
                               ----------  ----------
Notes payable and other
 borrowings                    $  798,215  $  722,797
  Less: cash and cash
   equivalents, restricted
   cash, and investments and
   securities                    (353,272)   (295,469)
                               ----------  ----------
Net debt                          444,943     427,328
Stockholders' equity              750,681     694,210
                               ----------  ----------
Total capital                  $1,195,624  $1,121,538
                               ==========  ==========
Net debt-to-capital                  37.2%       38.1%


                Meritage Homes Corporation and Subsidiaries
                   Consolidated Statements of Cash Flows
                         (In thousands) (unaudited)
                                                         Six Months Ended
                                                             June 30,
                                                          2013       2012
                                                       ---------  ---------
Cash flows from operating activities:
  Net earnings                                         $  40,184  $   3,251
  Adjustments to reconcile net earnings to net cash
   used in operating activities:
    Depreciation and amortization                          4,658      3,614
    Stock-based compensation                               3,941      3,273
    Loss on early extinguishment of debt                   3,796      5,772
    Excess income tax benefit from stock-based awards     (1,687)         -
    Equity in earnings from unconsolidated entities       (5,998)    (3,651)
    Deferred tax asset valuation benefit                  (3,057)    (7,705)
    Distribution of earnings from unconsolidated
     entities                                              7,236      2,995
    Other                                                  4,022      1,202
  Changes in assets and liabilities:
    Increase in real estate                             (113,992)  (140,662)
    (Increase)/decrease in deposits on real estate
     under option or contract                             (7,361)       424
    (Increase)/decrease in receivables and prepaid
     expenses and other assets                           (13,167)     1,758
    Increase in accounts payable and accrued
     liabilities                                          48,715     20,934
    Increase in home sale deposits                        13,189      3,888
                                                       ---------  ---------
    Net cash used in operating activities                (19,521)  (104,907)
                                                       ---------  ---------
Cash flows from investing activities:
  Investments in unconsolidated entities                    (116)      (405)
  Distributions of capital from unconsolidated
   entities                                                   74          -
  Purchases of property and equipment                     (5,787)    (4,383)
  Proceeds of sales from property and equipment               32        364
  Maturities of investments and securities                71,024    120,201
  Payments to purchase investments and securities        (76,938)   (76,502)
  Increase in restricted cash                             (4,327)    (6,962)
                                                       ---------  ---------
    Net cash (used in)/provided by investing
     activities                                          (16,038)    32,313
                                                       ---------  ---------
Cash flows from financing activities:
  Repayments of senior and senior subordinated notes    (102,822)  (315,080)
  Proceeds from issuance of senior notes                 175,000    300,000
  Debt issuance costs                                     (1,403)    (5,334)
  Excess income tax benefit from stock-based awards        1,687          -
  Non-controlling interest acquisition                      (257)         -
  Proceeds from stock option exercises                    10,916      1,222
                                                       ---------  ---------
    Net cash (used in)/provided by financing
     activities                                           83,121    (19,192)
                                                       ---------  ---------
Net increase/(decrease) in cash and cash equivalents      47,562    (91,786)
Beginning cash and cash equivalents                      170,457    173,612
                                                       ---------  ---------
Ending cash and cash equivalents (2)                   $ 218,019  $  81,826
                                                       =========  =========

(2) Ending cash and cash equivalents as of June 30, 2013 and December 31,
2012 excludes investments and securities and restricted cash totaling $135
million and $125 million, respectively.


                 Meritage Homes Corporation and Subsidiaries
                               Operating Data
                           (Dollars in thousands)
                                 (unaudited)

                                                Three Months Ended
                                         June 30, 2013       June 30, 2012
                                      ------------------- ------------------
                                        Homes     Value     Homes    Value
                                      -------- ---------- -------- ---------
Homes Closed:
  Arizona                                  251 $   79,736      208 $  54,772
  California                               297    124,818      148    50,521
  Colorado                                 100     37,001       80    26,877
  Nevada                                    21      5,086       11     2,093
                                      -------- ---------- -------- ---------
  West Region                              669    246,641      447   134,263
                                      -------- ---------- -------- ---------
  Texas                                    449    116,970      439   101,744
                                      -------- ---------- -------- ---------
  Central Region                           449    116,970      439   101,744
                                      -------- ---------- -------- ---------
  Carolinas                                 51     19,273       26     9,507
  Florida                                  152     53,156      130    35,826
                                      -------- ---------- -------- ---------
  East Region                              203     72,429      156    45,333
                                      -------- ---------- -------- ---------
  Total                                  1,321 $  436,040    1,042 $ 281,340
                                      ======== ========== ======== =========
Homes Ordered:
  Arizona                                  334 $  105,683      260 $  70,331
  California                               251    113,561      279   100,432
  Colorado                                 121     53,278       87    28,774
  Nevada                                     1        289       31     5,615
                                      -------- ---------- -------- ---------
  West Region                              707    272,811      657   205,152
                                      -------- ---------- -------- ---------
  Texas                                    641    183,509      482   117,028
                                      -------- ---------- -------- ---------
  Central Region                           641    183,509      482   117,028
                                      -------- ---------- -------- ---------
  Carolinas                                 77     31,604       40    14,053
  Florida                                  212     85,468      174    49,596
                                      -------- ---------- -------- ---------
  East Region                              289    117,072      214    63,649
                                      -------- ---------- -------- ---------
  Total                                  1,637 $  573,392    1,353 $ 385,829
                                      ======== ========== ======== =========


                                                 Six Months Ended
                                         June 30, 2013       June 30, 2012
                                      ------------------- ------------------
                                        Homes     Value     Homes    Value
                                      -------- ---------- -------- ---------
Homes Closed:
  Arizona                                  443 $  136,885      350 $  93,671
  California                               525    215,460      245    83,827
  Colorado                                 194     69,205      144    48,177
  Nevada                                    37      8,655       17     3,289
                                      -------- ---------- -------- ---------
  West Region                            1,199    430,205      756   228,964
                                      -------- ---------- -------- ---------
  Texas                                    803    207,675      756   173,395
                                      -------- ---------- -------- ---------
  Central Region                           803    207,675      756   173,395
                                      -------- ---------- -------- ---------
  Carolinas                                 91     33,488       44    16,054
  Florida                                  280     95,382      245    66,949
                                      -------- ---------- -------- ---------
  East Region                              371    128,870      289    83,003
                                      -------- ---------- -------- ---------
  Total                                  2,373 $  766,750    1,801 $ 485,362
                                      ======== ========== ======== =========
Homes Ordered:
  Arizona                                  652 $  203,391      509 $ 129,943
  California                               565    247,192      466   163,079
  Colorado                                 262    110,073      178    59,087
  Nevada                                    24      5,795       39     7,071
                                      -------- ---------- -------- ---------
  West Region                            1,503    566,451    1,192   359,180
                                      -------- ---------- -------- ---------
  Texas                                  1,144    314,639      945   225,891
                                      -------- ---------- -------- ---------
  Central Region                         1,144    314,639      945   225,891
                                      -------- ---------- -------- ---------
  Carolinas                                146     58,490       73    26,132
  Florida                                  391    154,215      287    82,955
                                      -------- ---------- -------- ---------
  East Region                              537    212,705      360   109,087
                                      -------- ---------- -------- ---------
  Total                                  3,184 $1,093,795    2,497 $ 694,158
                                      ======== ========== ======== =========
Order Backlog:
  Arizona                                  458 $  147,322      317 $  81,504
  California                               355    156,320      303   106,900
  Colorado                                 210     90,957      104    34,403
  Nevada                                     1        245       27     4,858
                                      -------- ---------- -------- ---------
  West Region                            1,024    394,844      751   227,665
                                      -------- ---------- -------- ---------
  Texas                                    841    239,281      585   145,990
                                      -------- ---------- -------- ---------
  Central Region                           841    239,281      585   145,990
                                      -------- ---------- -------- ---------
  Carolinas                                104     42,343       53    18,694
  Florida                                  314    129,843      222    65,301
                                      -------- ---------- -------- ---------
  East Region                              418    172,186      275    83,995
                                      -------- ---------- -------- ---------
  Total                                  2,283 $  806,311    1,611 $ 457,650
                                      ======== ========== ======== =========


                 Meritage Homes Corporation and Subsidiaries
                               Operating Data
                                 (unaudited)

                                                    Three Months Ended
                                             -------------------------------
                                              June 30, 2013   June 30, 2012
                                             --------------- ---------------
                                               Beg.    End     Beg.    End
                                             ------- ------- ------- -------
Active Communities:
  Arizona                                         40      36      32      32
  California                                      15      13      21      20
  Colorado                                        11      12       8       8
  Nevada                                           -       -       2       2
                                             ------- ------- ------- -------
  West Region                                     66      61      63      62
                                             ------- ------- ------- -------
  Texas                                           69      71      67      68
                                             ------- ------- ------- -------
  Central Region                                  69      71      67      68
                                             ------- ------- ------- -------
  Carolinas                                       11      13       4       5
  Florida                                         22      20      16      16
                                             ------- ------- ------- -------
  East Region                                     33      33      20      21
                                             ------- ------- ------- -------
  Total                                          168     165     150     151
                                             ======= ======= ======= =======


                                                     Six Months Ended
                                             -------------------------------
                                              June 30, 2013   June 30, 2012
                                             --------------- ---------------
                                               Beg.    End     Beg.    End
                                             ------- ------- ------- -------
Active Communities:
  Arizona                                         38      36      37      32
  California                                      17      13      20      20
  Colorado                                        12      12      10       8
  Nevada                                           1       -       2       2
                                             ------- ------- ------- -------
  West Region                                     68      61      69      62
  Texas                                           65      71      67      68
                                             ------- ------- ------- -------
  Central Region                                  65      71      67      68
  Carolinas                                        7      13       3       5
  Florida                                         18      20      18      16
                                             ------- ------- ------- -------
  East Region                                     25      33      21      21
                                             ------- ------- ------- -------
  Total                                          158     165     157     151
                                             ======= ======= ======= =======

About Meritage Homes Corporation

Meritage Homes is the ninth-largest public homebuilder in the United States, based on 4,238 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 June 30, 2013, the company had 165 actively selling communities in markets including Sacramento, San Francisco's East Bay, the Central Valley and Southern California; Houston, Dallas-Ft. Worth, Austin and San Antonio, Texas; Phoenix/Scottsdale and Tucson, Arizona; Nevada; Denver, Colorado; Orlando and Tampa, Florida; Raleigh and Charlotte, North Carolina.

Meritage has designed and built more than 75,000 homes in its 27-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 STARĀ® 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 plans to expand the Company's footprint and allocate capital to existing markets, and management's projected home closing revenue and earnings per diluted share for 2013.

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 and senior subordinated 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.