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

Meritage Homes reports third quarter 2019 results including a 24% increase in orders, 19.8% home closing gross margin and 35% increase in diluted EPS

SCOTTSDALE, Ariz., October 22, 2019 - Meritage Homes Corporation (NYSE: MTH), a leading U.S. homebuilder, reported third quarter results for the period ended September 30, 2019.

Summary Operating Results (unaudited)
(Dollars in thousands, except per share amounts)
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2019
 
2018
 
% Chg
 
2019
 
2018
 
% Chg
Homes closed (units)
 
2,419

 
2,162

 
12
 %
 
6,437

 
6,026

 
7
 %
Home closing revenue
 
$
939,185

 
$
877,734

 
7
 %
 
$
2,500,888

 
$
2,478,649

 
1
 %
Average sales price - closings
 
$
388

 
$
406

 
(4
)%
 
$
389

 
$
411

 
(6
)%
Home orders (units)
 
2,258

 
1,828

 
24
 %
 
7,523

 
6,436

 
17
 %
Home order value
 
$
858,395

 
$
715,089

 
20
 %
 
$
2,879,369

 
$
2,595,881

 
11
 %
Average sales price - orders
 
$
380

 
$
391

 
(3
)%
 
$
383

 
$
403

 
(5
)%
Ending backlog (units)
 
 
 
 
 
 
 
3,519

 
3,285

 
7
 %
Ending backlog value
 
 
 
 
 
 
 
$
1,397,033

 
$
1,367,006

 
2
 %
Average sales price - backlog
 


 


 


 
$
397

 
$
416

 
(5
)%
Earnings before income taxes
 
$
92,366

 
$
71,409

 
29
 %
 
$
192,410

 
$
191,478

 
—
 %
Net earnings
 
$
69,809

 
$
54,135

 
29
 %
 
$
146,049

 
$
151,847

 
(4
)%
Diluted EPS
 
$
1.79

 
$
1.33

 
35
 %
 
$
3.76

 
$
3.69

 
2
 %




1


MANAGEMENT COMMENTS
“Our results for the third quarter demonstrated continued strong demand for our homes, as well as the impact of operating efficiencies that are enabling us to improve our margins while selling homes at affordable prices," said Steven J. Hilton, chairman and chief executive officer of Meritage Homes. “Our total orders for new homes increased 24% year-over-year in the third quarter, as a result of higher absorptions on slightly lower community count.
“We’re clearly in the sweet spot of the market with our LiVE.NOW.® homes for value-conscious buyers,” he explained. “Those homes are selling at a significantly higher pace than move-up homes and made up 54% of our third quarter orders, compared to 43% a year ago.
“In addition to our success with LiVE.NOW. in the entry-level market, our first move-up business is also doing well. We have nearly completed the roll-out of our new Studio M design centers, which have been very well received by our move-up buyers," he continued. “The new studios are benefiting both our margins and overhead leverage by providing additional revenue at a reduced cost due to streamlining and simplifying our operations. The combination of revenue growth and improved operating margin drove a 29% increase in our net earnings for the third quarter.”
Mr. Hilton concluded, “We are confident in our strategy and execution, and are encouraged by healthy employment levels in the U.S., growing household incomes and low interest rates, which are allowing more people to own their own homes. Based on our results in the first three quarters of 2019, we are projecting 8,900-9,100 total home closings for the year, generating approximately $3.5 billion of total home closing revenue with home closing gross margin in the mid to high-18's percent range for the year, which should translate to approximately $5.50-5.70 in diluted earnings per share.”

THIRD QUARTER RESULTS
•
Total orders for the third quarter of 2019 increased 24% year-over-year, driven by a 27% year-over-year increase in absorptions, primarily due to higher demand for Meritage’s entry-level priced LiVE.NOW. product. Absorptions were up 29% in the West, 26% in the Central and 23% in the East region, demonstrating broad strength across all regions. As a result of the Company's strategic product shift, average sales price (ASP) on orders was 3% lower year-over-year.

2


•
Net earnings was $69.8 million ($1.79 per diluted share) for the third quarter of 2019, compared to $54.1 million ($1.33 per diluted share) for the third quarter of 2018. The 35% increase in diluted EPS reflected the combination of increases in home closing revenue, gross margins and greater overhead leverage, in addition to a 4% reduction in diluted shares after share repurchases in the fourth quarter of 2018 and first quarter of 2019. Third quarter 2019 pre-tax earnings increased 180 bps to 9.8% compared to 8.0% in 2018.
•
The 7% increase in home closing revenue for the quarter reflected a 12% increase in home closing volume, which was partially offset by a 4% reduction in ASP due to the shift in product mix, compared to the third quarter of 2018. The East region led with home closing revenue up 15% year-over-year, followed by a 9% increase in the Central region, while closing revenue in the West was flat.
•
Home closing gross margin improved 170 bps to 19.8% from 18.1% a year ago, contributing to a 17% increase in total home closing gross profit over the prior year's third quarter. Third quarter 2018 gross margin was reduced by 30 bps due to a $2.6 million impairment from exiting a move-up community that was no longer aligned with the company's strategy.
•
Selling, general and administrative expenses (SG&A) totaled 10.7% of third quarter 2019 home closing revenue, compared to 11.0% in the third quarter of 2018.
•
Interest expense increased $1.0 million year-over-year, as less interest was capitalizable to assets under development due to shortened construction cycles and higher inventory turnover.

YEAR TO DATE RESULTS
•
Net earnings for the first nine months of 2019 was $146.0 million, compared to $151.8 million in 2018. Increases in home closing revenue and gross margin year-to-date in 2019 were offset by higher interest expense and lower other income than the prior year, which benefited from a favorable legal settlement, as well as a lower effective tax rate in 2018.
•
Home closings for the first nine months of the year were up 7% over 2018, while average prices on closings were down 6% from the previous year due to the product mix shift toward more affordable homes, resulting in a 1% increase in total home closing revenue.
•
Home closing gross margin increased to 18.5% for the first three-quarters of 2019 over 17.8% in the same period last year, driving a 4% increase in total home closing gross profit for the first nine months of 2019.
•
SG&A expenses as a percentage of home closing revenue year-to-date were 11.3% in 2019, compared to 11.1% in 2018, reflecting higher brokerage commissions, severance expenses and equity compensation expense accelerated into the first quarter of 2019 as a result of changes in tax rules.

3


•
Interest expense increased $8.1 million year-over-year, primarily due to less interest capitalized to assets under development from faster construction cycle times.
•
Other income (net) decreased by $4.1 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 nine months of 2019 was 24%, compared to 21% for the first nine months 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 September 30, 2019 totaled $454.8 million, compared to $311.5 million at December 31, 2018, reflecting positive cash flow from operations. Real estate assets grew $111.3 million year-to-date to approximately $2.9 billion at September 30, 2019 to support further growth.
•
Meritage ended the third quarter of 2019 with 37,300 total lots owned or under control, compared to approximately 34,400 total lots at September 30, 2018. Approximately 81% of the lots added year-to-date 2019 were in LiVE.NOW. communities for entry-level homes.
•
Debt-to-capital ratios decreased to 41.1% at September 30, 2019 from 43.2% at December 31, 2018, with further improvement year-to-date in the net debt-to-capital ratio of 31.3% from 36.7% at year-end 2018.


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 Wednesday, October 23. 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/10134822.
Telephone participants who are unable to pre-register may dial into 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.

4


A replay of the call will be available beginning at approximately 12:00 p.m. ET on October 23 and extending through November 6, 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 10134822.



5



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

 
 
 
Three Months Ended September 30,
 
 
2019
 
2018
 
Change $
 
Change %
Homebuilding:
 
 
 
 
 
 
 
 
Home closing revenue
$
939,185

 
$
877,734

 
$
61,451

 
7
 %
 
Land closing revenue
1,695

 
6,847

 
(5,152
)
 
(75
)%
 
Total closing revenue
940,880

 
884,581

 
56,299

 
6
 %
 
Cost of home closings
(753,068
)
 
(719,142
)
 
33,926

 
5
 %
 
Cost of land closings
(1,721
)
 
(6,922
)
 
(5,201
)
 
(75
)%
 
Total cost of closings
(754,789
)
 
(726,064
)
 
28,725

 
4
 %
 
Home closing gross profit
186,117

 
158,592

 
27,525

 
17
 %
 
Land closing gross loss
(26
)
 
(75
)
 
49

 
65
 %
 
Total closing gross profit
186,091

 
158,517

 
27,574

 
17
 %
Financial Services:
 
 
 
 
 
 
 
 
Revenue
4,317

 
3,832

 
485

 
13
 %
 
Expense
(1,725
)
 
(1,659
)
 
66

 
4
 %
 
Earnings from financial services unconsolidated entities and other, net
2,990

 
4,148

 
(1,158
)
 
(28
)%
 
Financial services profit
5,582

 
6,321

 
(739
)
 
(12
)%
Commissions and other sales costs
(63,450
)
 
(60,282
)
 
3,168

 
5
 %
General and administrative expenses
(37,191
)
 
(35,906
)
 
1,285

 
4
 %
Interest expense
(1,068
)
 
(53
)
 
1,015

 
n/m

Other income, net
2,402

 
2,812

 
(410
)
 
(15
)%
Earnings before income taxes
92,366

 
71,409

 
20,957

 
29
 %
Provision for income taxes
(22,557
)
 
(17,274
)
 
5,283

 
31
 %
Net earnings
$
69,809

 
$
54,135

 
$
15,674

 
29
 %
 
 
 
 
 
 
 
 
Earnings per common share:
 
 
 
 
 
 
 
 
Basic
 
 
 
 
Change $ or shares
 
Change %
 
Earnings per common share
$
1.82

 
$
1.34

 
$
0.48

 
36
 %
 
Weighted average shares outstanding
38,296

 
40,283

 
(1,987
)
 
(5
)%
 
Diluted
 
 
 
 
 
 
 
 
Earnings per common share
$
1.79

 
$
1.33

 
$
0.46

 
35
 %
 
Weighted average shares outstanding
39,079

 
40,855

 
(1,776
)
 
(4
)%







6



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


 
 
Nine Months Ended September 30,
 
 
2019
 
2018
 
Change $
 
Change %
Homebuilding:
 
 
 
 
 
 
 
 
Home closing revenue
$
2,500,888

 
$
2,478,649

 
$
22,239

 
1
 %
 
Land closing revenue
12,747

 
25,991

 
(13,244
)
 
(51
)%
 
Total closing revenue
2,513,635

 
2,504,640

 
8,995

 
—
 %
 
Cost of home closings
(2,039,191
)
 
(2,036,212
)
 
2,979

 
—
 %
 
Cost of land closings
(14,149
)
 
(27,963
)
 
(13,814
)
 
(49
)%
 
Total cost of closings
(2,053,340
)
 
(2,064,175
)
 
(10,835
)
 
(1
)%
 
Home closing gross profit
461,697

 
442,437

 
19,260

 
4
 %
 
Land closing gross loss
(1,402
)
 
(1,972
)
 
570

 
29
 %
 
Total closing gross profit
460,295

 
440,465

 
19,830

 
5
 %
Financial Services:
 
 
 
 
 
 
 
 
Revenue
11,705

 
10,750

 
955

 
9
 %
 
Expense
(4,949
)
 
(4,836
)
 
113

 
2
 %
 
Earnings from financial services unconsolidated entities and other, net
9,559

 
10,278

 
(719
)
 
(7
)%
 
Financial services profit
16,315

 
16,192

 
123

 
1
 %
Commissions and other sales costs
(176,130
)
 
(173,857
)
 
2,273

 
1
 %
General and administrative expenses
(105,536
)
 
(101,004
)
 
4,532

 
4
 %
Interest expense
(8,350
)
 
(233
)
 
8,117

 
n/m

Other income, net
5,816

 
9,915

 
(4,099
)
 
(41
)%
Earnings before income taxes
192,410

 
191,478

 
932

 
—
 %
Provision for income taxes
(46,361
)
 
(39,631
)
 
6,730

 
17
 %
Net earnings
$
146,049

 
$
151,847

 
$
(5,798
)
 
(4
)%
 
 
 
 
 
 
 
 
Earnings per common share:
 
 
 
 
 
 
 
 
Basic
 
 
 
 
Change $ or shares
 
Change %
 
Earnings per common share
$
3.83

 
$
3.75

 
$
0.08

 
2
 %
 
Weighted average shares outstanding
38,119

 
40,472

 
(2,353
)
 
(6
)%
 
Diluted
 
 
 
 
 
 
 
 
Earnings per common share
$
3.76

 
$
3.69

 
$
0.07

 
2
 %
 
Weighted average shares outstanding
38,841

 
41,100

 
(2,259
)
 
(5
)%




7



Meritage Homes Corporation and Subsidiaries
Consolidated Balance Sheets
(In thousands)
(Unaudited)
 
 
 
September 30, 2019
 
December 31, 2018
Assets:
 
 
 
 
Cash and cash equivalents
 
$
454,812

 
$
311,466

Other receivables
 
85,962

 
77,285

Real estate (1)
 
2,853,933

 
2,742,621

Deposits on real estate under option or contract
 
45,643

 
51,410

Investments in unconsolidated entities
 
7,908

 
17,480

Property and equipment, net
 
53,111

 
54,596

Deferred tax asset
 
25,656

 
26,465

Prepaids, other assets and goodwill
 
108,010

 
84,156

Total assets
 
$
3,635,035

 
$
3,365,479

Liabilities:
 
 
 
 
Accounts payable
 
$
180,069

 
$
128,169

Accrued liabilities
 
240,102

 
177,862

Home sale deposits
 
31,444

 
28,636

Loans payable and other borrowings
 
13,992

 
14,773

Senior notes, net
 
1,295,862

 
1,295,284

Total liabilities
 
1,761,469

 
1,644,724

Stockholders' Equity:
 
 
 
 
Preferred stock
 
—

 
—

Common stock
 
383

 
381

Additional paid-in capital
 
508,541

 
501,781

Retained earnings
 
1,364,642

 
1,218,593

Total stockholders’ equity
 
1,873,566

 
1,720,755

Total liabilities and stockholders’ equity
 
$
3,635,035

 
$
3,365,479


(1) Real estate – Allocated costs:
 
 
 
 
Homes under contract under construction
 
$
712,288

 
$
480,143

Unsold homes, completed and under construction
 
661,393

 
644,717

Model homes
 
126,925

 
146,327

Finished home sites and home sites under development
 
1,353,327

 
1,471,434

Total real estate
 
$
2,853,933

 
$
2,742,621






8


Supplemental Information and Non-GAAP Financial Disclosures (Dollars in thousands – unaudited):
 
    
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2019
 
2018
 
2019
 
2018
Depreciation and amortization
$
7,172

 
$
6,850

 
$
19,553

 
$
19,458

 
 
 
 
 
 
 
 
Summary of Capitalized Interest:
 
 
 
 
 
 
 
Capitalized interest, beginning of period
$
88,307

 
$
84,443

 
$
88,454

 
$
78,564

Interest incurred
21,319

 
21,545

 
64,227

 
63,788

Interest expensed
(1,068
)
 
(53
)
 
(8,350
)
 
(233
)
Interest amortized to cost of home and land closings
(20,363
)
 
(17,871
)
 
(56,136
)
 
(54,055
)
Capitalized interest, end of period
$
88,195

 
$
88,064

 
$
88,195

 
$
88,064

 
 
 
 
 
 
 
 
 
September 30, 2019
 
December 31, 2018
 
 
 
 
Notes payable and other borrowings
$
1,309,854

 
$
1,310,057

 
 
 
 
Stockholders' equity
1,873,566

 
1,720,755

 
 
 
 
Total capital
$
3,183,420

 
$
3,030,812

 
 
 
 
Debt-to-capital
41.1
%
 
43.2
%
 
 
 
 
 
 
 
 
 
 
 
 
Notes payable and other borrowings
$
1,309,854

 
$
1,310,057

 
 
 
 
Less: cash and cash equivalents
(454,812
)
 
(311,466
)
 
 
 
 
Net debt
$
855,042

 
$
998,591

 
 
 
 
Stockholders’ equity
1,873,566

 
1,720,755

 
 
 
 
Total net capital
$
2,728,608

 
$
2,719,346

 
 
 
 
Net debt-to-capital
31.3
%
 
36.7
%
 
 
 

 



9


Meritage Homes Corporation and Subsidiaries
Consolidated Statements of Cash Flows 
(In thousands)
(Unaudited)
 
 
Nine Months Ended September 30,
 
 
2019
 
2018
Cash flows from operating activities:
 
 
 
 
Net earnings
 
$
146,049

 
$
151,847

Adjustments to reconcile net earnings to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
19,553

 
19,458

Stock-based compensation
 
15,719

 
13,737

Equity in earnings from unconsolidated entities
 
(8,934
)
 
(11,160
)
Distribution of earnings from unconsolidated entities
 
11,261

 
11,898

Other
 
3,902

 
2,197

Changes in assets and liabilities:
 
 
 
 
(Increase) in real estate
 
(110,295
)
 
(161,816
)
Decrease in deposits on real estate under option or contract
 
5,773

 
10,080

(Increase)/decrease in other receivables, prepaids and other assets
 
(3,108
)
 
1,686

Increase in accounts payable and accrued liabilities
 
84,632

 
35,625

Increase in home sale deposits
 
2,808

 
100

Net cash provided by operating activities
 
167,360

 
73,652

Cash flows from investing activities:
 
 
 
 
Investments in unconsolidated entities
 
(1,112
)
 
(551
)
Distributions of capital from unconsolidated entities
 
7,250

 
597

Purchases of property and equipment
 
(18,376
)
 
(23,754
)
Proceeds from sales of property and equipment
 
267

 
107

Maturities/sales of investments and securities
 
675

 
1,065

Payments to purchase investments and securities
 
(675
)
 
(1,065
)
Net cash used in investing activities
 
(11,971
)
 
(23,601
)
Cash flows from financing activities:
 
 
 
 
Repayment of loans payable and other borrowings
 
(3,086
)
 
(13,484
)
Repayment of senior notes
 
—

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

 
206,000

Payment of debt issuance costs
 
—

 
(3,198
)
Repurchase of shares
 
(8,957
)
 
(29,353
)
Net cash used in financing activities
 
(12,043
)
 
(15,035
)
Net increase in cash and cash equivalents
 
143,346

 
35,016

Beginning cash and cash equivalents
 
311,466

 
170,746

Ending cash and cash equivalents
 
$
454,812

 
$
205,762

 


10


Meritage Homes Corporation and Subsidiaries
Operating Data
(Dollars in thousands)
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30,
 
 
2019
 
2018
 
 
Homes
 
Value
 
Homes
 
Value
Homes Closed:
 
 
 
 
 
 
 
 
Arizona
 
440

 
$
144,920

 
411

 
$
134,977

California
 
200

 
135,555

 
206

 
143,386

Colorado
 
169

 
85,674

 
160

 
87,716

West Region
 
809

 
366,149

 
777

 
366,079

Texas
 
810

 
278,744

 
721

 
256,308

Central Region
 
810

 
278,744

 
721

 
256,308

Florida
 
302

 
118,804

 
249

 
105,902

Georgia
 
139

 
46,984

 
139

 
47,429

North Carolina
 
206

 
77,696

 
165

 
63,381

South Carolina
 
75

 
23,768

 
69

 
23,605

Tennessee
 
78

 
27,040

 
42

 
15,030

East Region
 
800

 
294,292

 
664

 
255,347

Total
 
2,419

 
$
939,185

 
2,162

 
$
877,734

Homes Ordered:
 
 
 
 
 
 
 
 
Arizona
 
482

 
$
159,778

 
347

 
$
112,185

California
 
198

 
124,201

 
104

 
67,810

Colorado
 
156

 
74,498

 
157

 
84,078

West Region
 
836

 
358,477

 
608

 
264,073

Texas
 
649

 
217,648

 
635

 
228,627

Central Region
 
649

 
217,648

 
635

 
228,627

Florida
 
293

 
111,471

 
231

 
94,089

Georgia
 
138

 
47,527

 
89

 
32,459

North Carolina
 
188

 
69,017

 
139

 
52,434

South Carolina
 
55

 
17,520

 
65

 
21,448

Tennessee
 
99

 
36,735

 
61

 
21,959

East Region
 
773

 
282,270

 
585

 
222,389

Total
 
2,258

 
$
858,395

 
1,828

 
$
715,089




















11


Meritage Homes Corporation and Subsidiaries
Operating Data
(Dollars in thousands)
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended September 30,
 
 
2019
 
2018
 
 
Homes
 
Value
 
Homes
 
Value
Homes Closed:
 
 
 
 
 
 
 
 
Arizona
 
1,126

 
$
368,762

 
1,052

 
$
344,245

California
 
464

 
304,846

 
643

 
444,796

Colorado
 
507

 
264,479

 
416

 
231,523

West Region
 
2,097

 
938,087

 
2,111

 
1,020,564

Texas
 
2,176

 
760,189

 
2,004

 
707,397

Central Region
 
2,176

 
760,189

 
2,004

 
707,397

Florida
 
809

 
321,364

 
761

 
329,156

Georgia
 
380

 
132,440

 
316

 
107,237

North Carolina
 
558

 
204,866

 
488

 
191,129

South Carolina
 
202

 
66,513

 
211

 
72,611

Tennessee
 
215

 
77,429

 
135

 
50,555

East Region
 
2,164

 
802,612

 
1,911

 
750,688

Total
 
6,437

 
$
2,500,888

 
6,026

 
$
2,478,649

 
 
 
 
 
 
 
 
 
Homes Ordered:
 
 
 
 
 
 
 
 
Arizona
 
1,521

 
$
493,391

 
1,222

 
$
401,063

California
 
572

 
368,194

 
513

 
359,907

Colorado
 
580

 
290,060

 
498

 
270,991

West Region
 
2,673

 
1,151,645

 
2,233

 
1,031,961

Texas
 
2,346

 
799,293

 
2,210

 
785,686

Central Region
 
2,346

 
799,293

 
2,210

 
785,686

Florida
 
925

 
369,503

 
814

 
343,293

Georgia
 
431

 
149,731

 
346

 
125,293

North Carolina
 
658

 
241,573

 
439

 
168,623

South Carolina
 
205

 
65,540

 
233

 
80,774

Tennessee
 
285

 
102,084

 
161

 
60,251

East Region
 
2,504

 
928,431

 
1,993

 
778,234

Total
 
7,523

 
$
2,879,369

 
6,436

 
$
2,595,881

 
 
 
 
 
 
 
 
 
Order Backlog:
 
 
 
 
 
 
 
 
Arizona
 
738

 
$
258,341

 
496

 
$
176,843

California
 
199

 
129,880

 
188

 
138,274

Colorado
 
258

 
129,167

 
281

 
154,451

West Region
 
1,195

 
517,388

 
965

 
469,568

Texas
 
1,151

 
413,229

 
1,226

 
461,628

Central Region
 
1,151

 
413,229

 
1,226

 
461,628

Florida
 
488

 
213,427

 
499

 
211,063

Georgia
 
174

 
63,730

 
181

 
68,605

North Carolina
 
277

 
104,162

 
194

 
74,405

South Carolina
 
92

 
31,474

 
121

 
43,678

Tennessee
 
142

 
53,623

 
99

 
38,059

East Region
 
1,173

 
466,416

 
1,094

 
435,810

Total
 
3,519

 
$
1,397,033

 
3,285

 
$
1,367,006



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Meritage Homes Corporation and Subsidiaries
Operating Data
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30,
 
 
2019
 
2018
 
 
Ending
 
Average
 
Ending
 
Average
Active Communities:
 
 
 
 
 
 
 
 
Arizona
 
37

 
38.5

 
44

 
42.0

California
 
24

 
22.0

 
14

 
14.5

Colorado
 
20

 
20.5

 
20

 
19.5

West Region
 
81

 
81.0

 
78

 
76.0

Texas
 
74

 
73.5

 
92

 
91.0

Central Region
 
74

 
73.5

 
92

 
91.0

Florida
 
36

 
36.0

 
30

 
30.0

Georgia
 
18

 
19.5

 
22

 
21.0

North Carolina
 
22

 
22.5

 
20

 
20.0

South Carolina
 
10

 
9.5

 
12

 
11.5

Tennessee
 
9

 
10.0

 
10

 
9.0

East Region
 
95

 
97.5

 
94

 
91.5

Total
 
250

 
252.0

 
264

 
258.5


 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended September 30,
 
 
2019
 
2018
 
 
Ending
 
Average
 
Ending
 
Average
Active Communities:
 
 
 
 
 
 
 
 
Arizona
 
37

 
38.5

 
44

 
41.0

California
 
24

 
20.5

 
14

 
17.0

Colorado
 
20

 
20.0

 
20

 
15.5

West Region
 
81

 
79.0

 
78

 
73.5

Texas
 
74

 
84.5

 
92

 
92.0

Central Region
 
74

 
84.5

 
92

 
92.0

Florida
 
36

 
33.5

 
30

 
29.0

Georgia
 
18

 
20.0

 
22

 
20.5

North Carolina
 
22

 
23.5

 
20

 
18.5

South Carolina
 
10

 
11.0

 
12

 
12.5

Tennessee
 
9

 
9.5

 
10

 
8.0

East Region
 
95

 
97.5

 
94

 
88.5

Total
 
250

 
261.0

 
264

 
254.0




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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 for the full year 2019.
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 breaches; 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 June 30, 2019 under the caption "Risk Factors," which can be found on our website at www.investors.meritagehomes.com.


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