Exhibit 99.1
mhlogo1linetaga12.jpg
 
 
 
 
 
 
 
 
Contacts:
Brent Anderson, VP Investor Relations
 
 
 
(972) 580-6360 (office)
 
 
 
investors@meritagehomes.com

Meritage Homes reports second quarter 2019 results including a 22% increase in orders, reflecting healthy demand for entry-level homes, along with a 5% increase in closings and diluted EPS of $1.31

SCOTTSDALE, Ariz., July 24, 2019 - Meritage Homes Corporation (NYSE: MTH), a leading U.S. homebuilder, reported second quarter results for the period ended June 30, 2019.

Summary Operating Results (unaudited)
(Dollars in thousands, except per share amounts)
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2019
 
2018
 
% Chg
 
2019
 
2018
 
% Chg
Homes closed (units)
 
2,253

 
2,139

 
5
 %
 
4,018

 
3,864

 
4
 %
Home closing revenue
 
$
863,053

 
$
872,383

 
(1
)%
 
$
1,561,703

 
$
1,600,915

 
(2
)%
Average sales price - closings
 
$
383

 
$
408

 
(6
)%
 
$
389

 
$
414

 
(6
)%
Home orders (units)
 
2,735

 
2,250

 
22
 %
 
5,265

 
4,608

 
14
 %
Home order value
 
$
1,043,995

 
$
917,996

 
14
 %
 
$
2,020,974

 
$
1,880,792

 
7
 %
Average sales price - orders
 
$
382

 
$
408

 
(6
)%
 
$
384

 
$
408

 
(6
)%
Ending backlog (units)
 
 
 
 
 
 
 
3,680

 
3,619

 
2
 %
Ending backlog value
 
 
 
 
 
 
 
$
1,477,007

 
$
1,528,756

 
(3
)%
Average sales price - backlog
 


 


 


 
$
401

 
$
422

 
(5
)%
Earnings before income taxes
 
$
67,674

 
$
71,185

 
(5
)%
 
$
100,044

 
$
120,069

 
(17
)%
Net earnings
 
$
50,828

 
$
53,838

 
(6
)%
 
$
76,240

 
$
97,712

 
(22
)%
Diluted EPS
 
$
1.31

 
$
1.31

 
—
 %
 
$
1.97

 
$
2.37

 
(17
)%




1


MANAGEMENT COMMENTS
“Home buying activity was strong and steady throughout the second quarter of 2019, led by affordable entry-level and move-up homes," said Steven J. Hilton, chairman and chief executive officer of Meritage Homes. “Our second quarter orders increased 22% year-over-year to a total of 2,735, representing a 13-year record high for quarterly order volume, which was mainly driven by a 19% increase in absorptions pace on top of a small increase in average community count. We believe the demand we’ve seen throughout the extended spring selling season reflects sustained positive macroeconomic factors for the housing industry.
“It’s been a little over two years since we began rolling out our strategy to focus on the entry-level and first move-up markets, and streamlining our operations to deliver a stress-free, transparent and easy home buying experience to first-time, first move-up and move-down customer groups. Approximately 90% of our second quarter 2019 orders came from homes purchased by those customers. Most notably, our entry-level LiVE.NOW.® homes made up 52% of our second quarter orders, up from 44% a year ago and 35% two years ago. We’ve seen strong demand for more affordable homes by Millennials and Baby Boomers, or others who are looking for a new, nicely amenitized, energy-efficient home at a great value.
“We have closed over 4,000 homes through the first half of the year, 4% more than we closed in the first six months of 2018, despite starting the year with a backlog that was 15% less than we had the previous year,” Mr. Hilton added. “We are reducing our cycle times with our LiVE.NOW. communities and Studio M, allowing us to convert sales of spec homes into closings more quickly. Two-thirds of our second quarter 2019 closings were from previously started spec homes, up from a little more than half of closings a year ago. Most of those came from our entry-level LiVE.NOW. communities. The higher absorption pace in those communities and our simplified product offerings should drive additional overhead leverage and profitability in the future.”
Mr. Hilton concluded, “We are encouraged by the outlook for interest rates and optimistic that demand for our homes and communities will remain strong. Based on our results in the first half of this year, we are currently projecting 2019 home closings and total home closing revenue of approximately 8,700-9,100 and $3.4-3.6 billion, respectively, for the full year. We are anticipating home closing gross margin to be in the mid-18% range for the year, which we estimate will translate to approximately $5.20-5.50 diluted earnings per share.”


2


SECOND QUARTER RESULTS
•
Total orders for the second quarter of 2019 increased 22% year-over-year, driven by a 19% increase in absorption pace over the prior year’s second quarter. West, Central and East region orders grew 31%, 8% and 26%, respectively, with broad strength across nearly all of the company’s markets. Partially offsetting the increase in orders was a 6% decrease in average sales price (ASP) due to a higher percentage of lower-priced entry-level homes. As a result, the total value of second quarter orders increased 14% over 2018.
•
Home closing revenue decreased 1% on a 5% increase in home closing volume offset by a 6% decrease in ASP over the second quarter of 2018. The lower ASP primarily reflected the company’s on-going strategic shift toward more affordable entry-level and first move-up homes at lower price points. The reduction in ASP from the mix shift toward lower-priced homes was most evident in the West region, where home closing revenue was down 15% year-over-year on a 9% reduction in ASP, coupled with 6% fewer home closings. Lower closing volume in the West was entirely attributable to Meritage's California operations, where demand has softened over the last year. East region home closing revenue was up 4% on an 11% increase in closings offset by a 7% decline in ASP. The Central region's second quarter 2019 closing volume and revenue increased 11% and 12%, respectively.
•
Home closing gross profit was flat compared to the prior year's second quarter, despite lower home closing revenue, as home closing gross margin improved slightly to 18.4% from 18.3%.
•
Net earnings of $50.8 million ($1.31 per diluted share) for the second quarter of 2019, compared to $53.8 million ($1.31 per diluted share) for the second quarter of 2018. Additional interest expense in 2019 accounted for most of the $3.5 million decrease in pre-tax earnings, in addition to a $1.1 million year-over-year increase in land closing gross loss from one impairment in 2019 due to exiting a move-up community that was no longer aligned with the company's strategy.
•
Selling, general and administrative expenses (SG&A) were 11.0% of second quarter 2019 home closing revenue, compared to 10.9% in the second quarter of 2018, despite elevated brokerage commission costs.
•
Interest expense increased $3.2 million year-over-year, primarily due to less interest capitalizable to assets under development as construction cycles have shortened and turnover of entry-level inventory has increased.


3


YEAR TO DATE RESULTS
•
Net earnings were $76.2 million for the first half of 2019, a 22% decrease from $97.7 million for the first half of 2018, due to lower home closing revenue and corresponding gross profit, higher interest expense in 2019, a positive legal settlement in 2018 and a higher tax rate in 2019.
•
Home closings for the first half of the year increased 4% over 2018 while average prices on closings decreased 6% from the previous year, resulting in a 2% decline in home closing revenue.
•
Home closing gross profit decreased 3% to $275.6 million in the first half of 2019 compared to $283.8 million in the first half of 2018, primarily due to targeted incentives in the first quarter of 2019 and reduced leverage of our construction overhead expenses on lower home closing revenue. Despite the impacts of those items, home closing gross margin was just slightly lower at 17.6% in the first half of 2019 compared to 17.7% in the first half of 2018.
•
SG&A expenses increased 1% year-over-year, due to higher brokerage commissions, severance expenses and accelerated equity compensation expense into the first quarter of 2019 due to changes in tax rules. Total SG&A was 11.6% of year-to-date 2019 home closing revenue, compared to 11.2% in the same period of 2018.
•
Interest expense increased $7.1 million year-over-year, primarily due to less interest capitalized to assets under development on faster construction cycles and turnover of entry-level inventory.
•
Other income decreased by $3.7 million in 2019 primarily due to a $4.8 million favorable legal settlement in the first quarter of 2018 related to a previous joint venture in Nevada.
•
The effective tax rate for the first half of 2019 was 24%, compared to 19% for the first half of 2018, due to $6.3 million of energy tax credits recorded in the first quarter of 2018 for homes closed in 2017 that qualified for the credits.


BALANCE SHEET
•
Cash and cash equivalents at June 30, 2019 totaled $407.4 million, compared to $311.5 million at December 31, 2018, due to positive cash flow from operations. Real estate assets remained consistent at $2.7 billion.
•
Meritage ended the second quarter of 2019 with approximately 34,700 total lots owned or under control, compared to approximately 33,700 total lots at June 30, 2018. Approximately 75% of the lots added during the second quarter of 2019 were in communities planned for entry-level product.
•
Debt-to-capital ratios were 42.1% at June 30, 2019 and 43.2% at December 31, 2018, with net debt-to-capital ratios of 33.4% and 36.7%, respectively.

4



CONFERENCE CALL
Management will host a conference call to discuss the results at 7:30 a.m. Arizona Time (10:30 a.m. Eastern Time) on Thursday, July 25. 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 can avoid 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/10132560.
Telephone participants who are unable to pre-register may dial in to 1-866-226-4948 US toll free on the day of the call. International dial-in number is 1-412-902-4125 or 1-855-669-9657 toll free for Canada.
A replay of the call will be available beginning at approximately 12:00 p.m. ET on July 25 and extending through August 8, 2019, on the website noted above or by dialing 1-877-344-7529 US toll free, 1-412-317-0088 for international or 1-855-669-9658 toll free for Canada, and referencing conference number 10132560.



5



Meritage Homes Corporation and Subsidiaries
Consolidated Income Statements
(In thousands, except per share data)
(Unaudited)

 
 
 
Three Months Ended June 30,
 
 
2019
 
2018
 
Change $
 
Change %
Homebuilding:
 
 
 
 
 
 
 
 
Home closing revenue
$
863,053

 
$
872,383

 
$
(9,330
)
 
(1
)%
 
Land closing revenue
1,557

 
5,112

 
(3,555
)
 
(70
)%
 
Total closing revenue
864,610

 
877,495

 
(12,885
)
 
(1
)%
 
Cost of home closings
(703,935
)
 
(712,868
)
 
(8,933
)
 
(1
)%
 
Cost of land closings
(3,299
)
 
(5,799
)
 
(2,500
)
 
(43
)%
 
Total cost of closings
(707,234
)
 
(718,667
)
 
(11,433
)
 
(2
)%
 
Home closing gross profit
159,118

 
159,515

 
(397
)
 
—
 %
 
Land closing gross loss
(1,742
)
 
(687
)
 
(1,055
)
 
(154
)%
 
Total closing gross profit
157,376

 
158,828

 
(1,452
)
 
(1
)%
Financial Services:
 
 
 
 
 
 
 
 
Revenue
4,160

 
3,870

 
290

 
7
 %
 
Expense
(1,720
)
 
(1,693
)
 
27

 
2
 %
 
Earnings from financial services unconsolidated entities and other, net
3,591

 
3,474

 
117

 
3
 %
 
Financial services profit
6,031

 
5,651

 
380

 
7
 %
Commissions and other sales costs
(60,125
)
 
(60,823
)
 
(698
)
 
(1
)%
General and administrative expenses
(34,779
)
 
(34,205
)
 
574

 
2
 %
Interest expense
(3,197
)
 
(44
)
 
3,153

 
n/m

Other income, net
2,368

 
1,778

 
590

 
33
 %
Earnings before income taxes
67,674

 
71,185

 
(3,511
)
 
(5
)%
Provision for income taxes
(16,846
)
 
(17,347
)
 
(501
)
 
(3
)%
Net earnings
$
50,828

 
$
53,838

 
$
(3,010
)
 
(6
)%
 
 
 
 
 
 
 
 
Earnings per common share:
 
 
 
 
 
 
 
 
Basic
 
 
 
 
Change $ or shares
 
Change %
 
Earnings per common share
$
1.33

 
$
1.32

 
$
0.01

 
1
 %
 
Weighted average shares outstanding
38,266

 
40,647

 
(2,381
)
 
(6
)%
 
Diluted
 
 
 
 
 
 
 
 
Earnings per common share
$
1.31

 
$
1.31

 
$
—

 
—
 %
 
Weighted average shares outstanding
38,889

 
41,164

 
(2,275
)
 
(6
)%


6


 
 
Six Months Ended June 30,
 
 
2019
 
2018
 
Change $
 
Change %
Homebuilding:
 
 
 
 
 
 
 
 
Home closing revenue
$
1,561,703

 
$
1,600,915

 
$
(39,212
)
 
(2
)%
 
Land closing revenue
11,052

 
19,144

 
(8,092
)
 
(42
)%
 
Total closing revenue
1,572,755

 
1,620,059

 
(47,304
)
 
(3
)%
 
Cost of home closings
(1,286,123
)
 
(1,317,070
)
 
(30,947
)
 
(2
)%
 
Cost of land closings
(12,428
)
 
(21,041
)
 
(8,613
)
 
(41
)%
 
Total cost of closings
(1,298,551
)
 
(1,338,111
)
 
(39,560
)
 
(3
)%
 
Home closing gross profit
275,580

 
283,845

 
(8,265
)
 
(3
)%
 
Land closing gross loss
(1,376
)
 
(1,897
)
 
521

 
27
 %
 
Total closing gross profit
274,204

 
281,948

 
(7,744
)
 
(3
)%
Financial Services:
 
 
 
 
 
 
 
 
Revenue
7,388

 
6,918

 
470

 
7
 %
 
Expense
(3,224
)
 
(3,177
)
 
47

 
1
 %
 
Earnings from financial services unconsolidated entities and other, net
6,569

 
6,130

 
439

 
7
 %
 
Financial services profit
10,733

 
9,871

 
862

 
9
 %
Commissions and other sales costs
(112,680
)
 
(113,575
)
 
(895
)
 
(1
)%
General and administrative expenses
(68,345
)
 
(65,098
)
 
3,247

 
5
 %
Interest expense
(7,282
)
 
(180
)
 
7,102

 
n/m

Other income, net
3,414

 
7,103

 
(3,689
)
 
(52
)%
Earnings before income taxes
100,044

 
120,069

 
(20,025
)
 
(17
)%
Provision for income taxes
(23,804
)
 
(22,357
)
 
1,447

 
6
 %
Net earnings
$
76,240

 
$
97,712

 
$
(21,472
)
 
(22
)%
 
 
 
 
 
 
 
 
Earnings per common share:
 
 
 
 
 
 
 
 
Basic
 
 
 
 
Change $ or shares
 
Change %
 
Earnings per common share
$
2.00

 
$
2.41

 
$
(0.41
)
 
(17
)%
 
Weighted average shares outstanding
38,136

 
40,568

 
(2,432
)
 
(6
)%
 
Diluted
 
 
 
 
 
 
 
 
Earnings per common share
$
1.97

 
$
2.37

 
$
(0.40
)
 
(17
)%
 
Weighted average shares outstanding
38,789

 
41,193

 
(2,404
)
 
(6
)%




7



Meritage Homes Corporation and Subsidiaries
Consolidated Balance Sheets
(In thousands)
(Unaudited)
 
 
 
June 30, 2019
 
December 31, 2018
Assets:
 
 
 
 
Cash and cash equivalents
 
$
407,427

 
$
311,466

Other receivables
 
82,057

 
77,285

Real estate (1)
 
2,735,883

 
2,742,621

Deposits on real estate under option or contract
 
46,320

 
51,410

Investments in unconsolidated entities
 
7,555

 
17,480

Property and equipment, net
 
54,157

 
54,596

Deferred tax asset
 
25,170

 
26,465

Prepaids, other assets and goodwill
 
108,307

 
84,156

Total assets
 
$
3,466,876

 
$
3,365,479

Liabilities:
 
 
 
 
Accounts payable
 
$
141,194

 
$
128,169

Accrued liabilities
 
187,411

 
177,862

Home sale deposits
 
32,249

 
28,636

Loans payable and other borrowings
 
12,224

 
14,773

Senior notes, net
 
1,295,698

 
1,295,284

Total liabilities
 
1,668,776

 
1,644,724

Stockholders' Equity:
 
 
 
 
Preferred stock
 
—

 
—

Common stock
 
383

 
381

Additional paid-in capital
 
502,884

 
501,781

Retained earnings
 
1,294,833

 
1,218,593

Total stockholders’ equity
 
1,798,100

 
1,720,755

Total liabilities and stockholders’ equity
 
$
3,466,876

 
$
3,365,479


(1) Real estate – Allocated costs:
 
 
 
 
Homes under contract under construction
 
$
705,157

 
$
480,143

Unsold homes, completed and under construction
 
557,675

 
644,717

Model homes
 
133,983

 
146,327

Finished home sites and home sites under development
 
1,339,068

 
1,471,434

Total real estate
 
$
2,735,883

 
$
2,742,621






8


Supplemental Information and Non-GAAP Financial Disclosures (Dollars in thousands – unaudited):
 
    
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
Depreciation and amortization
$
6,549

 
$
6,742

 
$
12,381

 
$
12,608

 
 
 
 
 
 
 
 
Summary of Capitalized Interest:
 
 
 
 
 
 
 
Capitalized interest, beginning of period
$
89,414

 
$
81,828

 
$
88,454

 
$
78,564

Interest incurred
21,465

 
21,374

 
42,908

 
42,243

Interest expensed
(3,197
)
 
(44
)
 
(7,282
)
 
(180
)
Interest amortized to cost of home and land closings
(19,375
)
 
(18,715
)
 
(35,773
)
 
(36,184
)
Capitalized interest, end of period
$
88,307

 
$
84,443

 
$
88,307

 
$
84,443

 
 
 
 
 
 
 
 
 
June 30, 2019
 
December 31, 2018
 
 
 
 
Notes payable and other borrowings
$
1,307,922

 
$
1,310,057

 
 
 
 
Stockholders' equity
1,798,100

 
1,720,755

 
 
 
 
Total capital
$
3,106,022

 
$
3,030,812

 
 
 
 
Debt-to-capital
42.1
%
 
43.2
%
 
 
 
 
Notes payable and other borrowings
$
1,307,922

 
$
1,310,057

 
 
 
 
Less: cash and cash equivalents
(407,427
)
 
(311,466
)
 
 
 
 
Net debt
$
900,495

 
$
998,591

 
 
 
 
Stockholders’ equity
1,798,100

 
1,720,755

 
 
 
 
Total net capital
$
2,698,595

 
$
2,719,346

 
 
 
 
Net debt-to-capital
33.4
%
 
36.7
%
 
 
 

 



9


Meritage Homes Corporation and Subsidiaries
Consolidated Statements of Cash Flows 
(In thousands)
(Unaudited)
 
 
Six Months Ended June 30,
 
 
2019
 
2018
Cash flows from operating activities:
 
 
 
 
Net earnings
 
$
76,240

 
$
97,712

Adjustments to reconcile net earnings to net cash provided by/(used in) operating activities:
 
 
 
 
Depreciation and amortization
 
12,381

 
12,608

Stock-based compensation
 
10,062

 
8,976

Equity in earnings from unconsolidated entities
 
(5,828
)
 
(5,978
)
Distribution of earnings from unconsolidated entities
 
8,508

 
6,834

Other
 
4,305

 
2,407

Changes in assets and liabilities:
 
 
 
 
Decrease/(increase) in real estate
 
5,439

 
(155,809
)
Decrease in deposits on real estate under option or contract
 
5,096

 
11,093

(Increase)/decrease in other receivables, prepaids and other assets
 
(28
)
 
1,634

(Decrease)/increase in accounts payable and accrued liabilities
 
(6,439
)
 
6,997

Increase in home sale deposits
 
3,613

 
3,071

Net cash provided by/(used in) operating activities
 
113,349

 
(10,455
)
Cash flows from investing activities:
 
 
 
 
Investments in unconsolidated entities
 
(1,112
)
 
(417
)
Distributions of capital from unconsolidated entities
 
7,250

 
—

Purchases of property and equipment
 
(12,132
)
 
(15,726
)
Proceeds from sales of property and equipment
 
192

 
92

Maturities/sales of investments and securities
 
566

 
1,065

Payments to purchase investments and securities
 
(566
)
 
(1,065
)
Net cash used in investing activities
 
(5,802
)
 
(16,051
)
Cash flows from financing activities:
 
 
 
 
Repayment of loans payable and other borrowings
 
(2,629
)
 
(2,499
)
Repayment of senior notes
 
—

 
(175,000
)
Proceeds from issuance of senior notes
 
—

 
206,000

Payment of debt issuance costs
 
—

 
(3,315
)
Repurchase of shares
 
(8,957
)
 
—

Net cash (used in)/provided by financing activities
 
(11,586
)
 
25,186

Net increase/(decrease) in cash and cash equivalents
 
95,961

 
(1,320
)
Beginning cash and cash equivalents
 
311,466

 
170,746

Ending cash and cash equivalents
 
$
407,427

 
$
169,426

 


10


Meritage Homes Corporation and Subsidiaries
Operating Data
(Dollars in thousands)
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 30,
 
 
2019
 
2018
 
 
Homes
 
Value
 
Homes
 
Value
Homes Closed:
 
 
 
 
 
 
 
 
Arizona
 
389

 
$
125,388

 
366

 
$
118,272

California
 
132

 
83,454

 
206

 
142,019

Colorado
 
169

 
90,130

 
162

 
89,421

West Region
 
690

 
298,972

 
734

 
349,712

Texas
 
823

 
289,839

 
741

 
259,344

Central Region
 
823

 
289,839

 
741

 
259,344

Florida
 
281

 
111,736

 
252

 
110,467

Georgia
 
122

 
43,317

 
104

 
34,835

North Carolina
 
196

 
70,629

 
195

 
77,075

South Carolina
 
70

 
23,163

 
76

 
26,885

Tennessee
 
71

 
25,397

 
37

 
14,065

East Region
 
740

 
274,242

 
664

 
263,327

Total
 
2,253

 
$
863,053

 
2,139

 
$
872,383

Homes Ordered:
 
 
 
 
 
 
 
 
Arizona
 
582

 
$
188,215

 
416

 
$
135,717

California
 
207

 
135,519

 
190

 
131,699

Colorado
 
220

 
110,314

 
166

 
89,818

West Region
 
1,009

 
434,048

 
772

 
357,234

Texas
 
827

 
275,380

 
766

 
277,556

Central Region
 
827

 
275,380

 
766

 
277,556

Florida
 
331

 
131,958

 
320

 
136,534

Georgia
 
149

 
51,977

 
109

 
41,964

North Carolina
 
240

 
89,571

 
143

 
54,704

South Carolina
 
69

 
22,806

 
88

 
30,652

Tennessee
 
110

 
38,255

 
52

 
19,352

East Region
 
899

 
334,567

 
712

 
283,206

Total
 
2,735

 
$
1,043,995

 
2,250

 
$
917,996


11


 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30,
 
 
2019
 
2018
 
 
Homes
 
Value
 
Homes
 
Value
Homes Closed:
 
 
 
 
 
 
 
 
Arizona
 
686

 
$
223,842

 
641

 
$
209,268

California
 
264

 
169,291

 
437

 
301,410

Colorado
 
338

 
178,805

 
256

 
143,807

West Region
 
1,288

 
571,938

 
1,334

 
654,485

Texas
 
1,366

 
481,445

 
1,283

 
451,089

Central Region
 
1,366

 
481,445

 
1,283

 
451,089

Florida
 
507

 
202,560

 
512

 
223,254

Georgia
 
241

 
85,456

 
177

 
59,808

North Carolina
 
352

 
127,170

 
323

 
127,748

South Carolina
 
127

 
42,745

 
142

 
49,006

Tennessee
 
137

 
50,389

 
93

 
35,525

East Region
 
1,364

 
508,320

 
1,247

 
495,341

Total
 
4,018

 
$
1,561,703

 
3,864

 
$
1,600,915

 
 
 
 
 
 
 
 
 
Homes Ordered:
 
 
 
 
 
 
 
 
Arizona
 
1,039

 
$
333,613

 
875

 
$
288,878

California
 
374

 
243,993

 
409

 
292,097

Colorado
 
424

 
215,562

 
341

 
186,913

West Region
 
1,837

 
793,168

 
1,625

 
767,888

Texas
 
1,697

 
581,645

 
1,575

 
557,059

Central Region
 
1,697

 
581,645

 
1,575

 
557,059

Florida
 
632

 
258,032

 
583

 
249,204

Georgia
 
293

 
102,204

 
257

 
92,834

North Carolina
 
470

 
172,556

 
300

 
116,189

South Carolina
 
150

 
48,020

 
168

 
59,326

Tennessee
 
186

 
65,349

 
100

 
38,292

East Region
 
1,731

 
646,161

 
1,408

 
555,845

Total
 
5,265

 
$
2,020,974

 
4,608

 
$
1,880,792

 
 
 
 
 
 
 
 
 
Order Backlog:
 
 
 
 
 
 
 
 
Arizona
 
696

 
$
243,449

 
560

 
$
199,508

California
 
201

 
141,196

 
290

 
213,761

Colorado
 
271

 
140,304

 
284

 
158,019

West Region
 
1,168

 
524,949

 
1,134

 
571,288

Texas
 
1,312

 
473,968

 
1,312

 
489,106

Central Region
 
1,312

 
473,968

 
1,312

 
489,106

Florida
 
497

 
220,544

 
517

 
222,653

Georgia
 
175

 
63,158

 
231

 
83,505

North Carolina
 
295

 
112,808

 
220

 
85,273

South Carolina
 
112

 
37,672

 
125

 
45,805

Tennessee
 
121

 
43,908

 
80

 
31,126

East Region
 
1,200

 
478,090

 
1,173

 
468,362

Total
 
3,680

 
$
1,477,007

 
3,619

 
$
1,528,756



12


Meritage Homes Corporation and Subsidiaries
Operating Data
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 30,
 
 
2019
 
2018
 
 
Ending
 
Average
 
Ending
 
Average
Active Communities:
 
 
 
 
 
 
 
 
Arizona
 
40

 
37.0

 
40

 
38.5

California
 
20

 
20.5

 
15

 
15.0

Colorado
 
21

 
22.0

 
19

 
18.0

West Region
 
81

 
79.5

 
74

 
71.5

Texas
 
73

 
78.5

 
90

 
93.5

Central Region
 
73

 
78.5

 
90

 
93.5

Florida
 
36

 
34.0

 
30

 
29.0

Georgia
 
21

 
20.0

 
20

 
20.5

North Carolina
 
23

 
24.0

 
20

 
20.0

South Carolina
 
9

 
10.0

 
11

 
11.5

Tennessee
 
11

 
11.0

 
8

 
7.0

East Region
 
100

 
99.0

 
89

 
88.0

Total
 
254

 
257.0

 
253

 
253.0


 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30,
 
 
2019
 
2018
 
 
Ending
 
Average
 
Ending
 
Average
Active Communities:
 
 
 
 
 
 
 
 
Arizona
 
40

 
40.0

 
40

 
39.0

California
 
20

 
18.5

 
15

 
17.5

Colorado
 
21

 
20.5

 
19

 
15.0

West Region
 
81

 
79.0

 
74

 
71.5

Texas
 
73

 
84.0

 
90

 
91.0

Central Region
 
73

 
84.0

 
90

 
91.0

Florida
 
36

 
33.5

 
30

 
29.0

Georgia
 
21

 
21.5

 
20

 
19.5

North Carolina
 
23

 
24.0

 
20

 
18.5

South Carolina
 
9

 
10.5

 
11

 
12.0

Tennessee
 
11

 
10.5

 
8

 
7.0

East Region
 
100

 
100.0

 
89

 
86.0

Total
 
254

 
263.0

 
253

 
248.5




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About Meritage Homes Corporation
Meritage Homes is the seventh-largest public homebuilder in the United States, based on homes closed in 2018. Meritage offers a variety of homes that are designed with a focus on first-time and first move-up buyers in Arizona, California, Colorado, Texas, Florida, Georgia, North Carolina, South Carolina and Tennessee.
The Company has designed and built over 120,000 homes in its 34-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 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.
The information included in this press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include management's projected home closings, home closing revenue, home closing gross margin and diluted earnings per share.
Such statements are based on 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, except as required by law. 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: changes in interest rates and the availability and pricing of residential mortgages; legislation related to tariffs; the availability and cost of finished lots and undeveloped land; shortages in the availability and cost of labor; the success of strategic initiatives; the ability of our potential buyers to sell their existing homes; inflation in the cost of materials used to develop communities and construct homes; the adverse effect of slow absorption rates; impairments of our real estate inventory; cancellation rates; competition; changes in tax laws that adversely impact us or our homebuyers; 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; home warranty and construction defect claims; failures in health and safety performance; our success in prevailing on contested tax positions; our ability to obtain performance and surety bonds in connection with our development work; the loss of key personnel; failure to comply with laws and regulations; our limited geographic diversification; fluctuations in quarterly operating results;

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our level of indebtedness; our ability to obtain financing if our credit ratings are downgraded; 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 breach; negative publicity that affects our reputation 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, 2018 and our Form 10-Q for the quarter ended March 31, 2019 under the caption "Risk Factors," which can be found on our website at www.investors.meritagehomes.com.


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