SCOTTSDALE, Ariz., May 09, 2024 (GLOBE NEWSWIRE) -- Meritage Homes Corporation (NYSE:MTH, "Meritage" or the "Company"))), the fifth-largest homebuilder in the U.S., today announced that it has completed its offering and sale of $575 million aggregate principal amount of 1.75% Convertible Senior Notes due 2028. This amount includes the exercise in full by the initial purchasers of their option to purchase up to an additional $75 million aggregate principal amount of notes. The offering was made to persons re ...

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SCOTTSDALE, Ariz., May 06, 2024 (GLOBE NEWSWIRE) -- Meritage Homes Corporation (NYSE:MTH, "Meritage" or the "Company"))), the fifth-largest homebuilder in the U.S., today announced that it has commenced an offering of $500 million aggregate principal amount of its Convertible Senior Notes due 2028 (the "notes"), subject to market and other conditions. The Company also expects to grant the initial purchasers of the notes a 13-day option to purchase up to $75 million of aggregate principal amount of additiona ...

SCOTTSDALE, Ariz., May 01, 2024 (GLOBE NEWSWIRE) -- Meritage Homes Corporation (NYSE: MTH, “Meritage” or the “Company”), the fifth-largest homebuilder in the U.S., today announced that it will host a two-part series of investor day webcast calls with Phillippe Lord, chief executive officer of Meritage Homes, and Hilla Sferruzza, chief financial officer of Meritage Homes. Each call will be different and distinct in its coverage of key strategic topics for the Company, including the introduction to a new busi ...

SCOTTSDALE, Ariz., May 01, 2024 (GLOBE NEWSWIRE) -- Meritage Homes Corporation (NYSE: MTH, “Meritage” or the “Company”), the fifth-largest homebuilder in the U.S., today announced that it will host a two-part series of investor day webcast calls with Phillippe Lord, chief executive officer of Meritage Homes, and Hilla Sferruzza, chief financial officer of Meritage Homes. Each call will be different and distinct in its coverage of key strategic topics for the Company, including the introduction to a new busi ...

Momentum investors typically don't time the market or "buy low and sell high." In other words, they avoid betting on cheap stocks and waiting long for them to recover. Instead, they believe that "buying high and selling higher" is the way to make far more money in lesser time.Everyone likes betting on fast-moving trending stocks, but it isn't easy to determine the right entry point. These stocks often lose momentum when their future growth potential fails to justify their swelled-up valuation. In that phase ...

[Part I. Financial Information](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Q1 2024 unaudited financials show total assets at **$6.49 billion**, net earnings at **$186.0 million**, and operating cash flow at **$81.9 million** Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Total Assets** | **$6,489,305** | **$6,353,134** | | Cash and cash equivalents | $905,298 | $921,227 | | Real estate | $4,914,512 | $4,721,291 | | **Total Liabilities** | **$1,768,732** | **$1,741,234** | | Senior notes, net | $994,966 | $994,689 | | **Total Stockholders' Equity** | **$4,720,573** | **$4,611,900** | Consolidated Income Statement Highlights (in thousands, except per share) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Total closing revenue | $1,468,401 | $1,279,308 | | Total closing gross profit | $377,965 | $283,901 | | **Net earnings** | **$186,016** | **$131,301** | | Diluted EPS | $5.06 | $3.54 | Consolidated Statement of Cash Flows Highlights (in thousands) | Cash Flow Activity | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $81,930 | $124,472 | | Net cash used in investing activities | ($7,765) | ($8,728) | | Net cash used in financing activities | ($90,094) | ($20,095) | | **Net (decrease)/increase in cash** | **($15,929)** | **$95,649** | [Notes to Unaudited Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Notes detail accounting policies, real estate assets, debt, and segment performance, confirming debt compliance and no significant accounting changes - The company designs and builds single-family homes in ten states across three regions (West, Central, East) and operates a financial services segment offering title, mortgage, and insurance services[18](index=18&type=chunk) Real Estate Inventory Composition (in thousands) | Category | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Homes under contract under construction | $858,943 | $704,206 | | Unsold homes, completed and under construction | $1,304,633 | $1,260,855 | | Model homes | $118,958 | $118,252 | | Finished home sites and sites under development | $2,631,978 | $2,637,978 | | **Total** | **$4,914,512** | **$4,721,291** | Lots Under Option or Contract (as of March 31, 2024) | Contract Type | Number of Lots | Purchase Price (in thousands) | | :--- | :--- | :--- | | Committed (non-refundable deposits) | 20,653 | $1,042,376 | | Uncommitted (refundable deposits) | 34,722 | $1,513,780 | | **Total** | **55,375** | **$2,556,156** | Segment Revenue and Operating Income (in thousands) | Segment | Q1 2024 Revenue | Q1 2024 Operating Income | | :--- | :--- | :--- | | West | $515,632 | $71,264 | | Central | $427,565 | $73,103 | | East | $525,204 | $94,277 | | **Total Homebuilding** | **$1,468,401** | **$238,644** | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reported strong Q1 2024 new home demand, record orders, **16.2%** revenue growth to **$1.5 billion**, and improved gross margin to **25.8%** [Overview and Outlook](index=22&type=section&id=Overview%20and%20Outlook) Q1 2024 housing demand was strong across demographics, with the company's spec building strategy improving affordability and production efficiency - Strong demand for new homes in Q1 2024 was driven by demographic life events (Millennials, Gen Z, Baby Boomers) and a shortage of existing housing supply[88](index=88&type=chunk) - The company's spec building strategy provides quick move-in inventory, which is a highly desirable characteristic for its customers[88](index=88&type=chunk) - Supply chain disruptions have eased, leading to significant year-over-year improvements in production costs and cycle times in Q1 2024 compared to Q1 2023[89](index=89&type=chunk) [Home Closing Revenue, Home Orders and Order Backlog](index=24&type=section&id=Home%20Closing%20Revenue%2C%20Home%20Orders%20and%20Order%20Backlog) Q1 2024 home closing revenue rose **16.2%** to **$1.47 billion**, with record **3,991** orders, and backlog decreased **22.7%** Home Closing Revenue Performance (Q1 2024 vs Q1 2023) | Metric | Q1 2024 | Q1 2023 | % Change | | :--- | :--- | :--- | :--- | | Dollars (thousands) | $1,466,096 | $1,261,923 | 16.2% | | Homes closed | 3,507 | 2,897 | 21.1% | | Average sales price (thousands) | $418.0 | $435.6 | (4.0)% | Home Orders Performance (Q1 2024 vs Q1 2023) | Metric | Q1 2024 | Q1 2023 | % Change | | :--- | :--- | :--- | :--- | | Dollars (thousands) | $1,631,195 | $1,506,893 | 8.2% | | Homes ordered | 3,991 | 3,487 | 14.5% | | Average sales price (thousands) | $408.7 | $432.1 | (5.4)% | - The cancellation rate improved significantly to **8%** in Q1 2024 from **15%** in Q1 2023, indicating strong buyer sentiment[91](index=91&type=chunk)[99](index=99&type=chunk) [Operating Results](index=26&type=section&id=Operating%20Results) Q1 2024 home closing gross margin improved **340 bps** to **25.8%** across all regions, with financial services reporting a **$0.7 million** loss Home Closing Gross Profit by Region (Q1 2024 vs Q1 2023) | Region | Q1 2024 Margin | Q1 2023 Margin | Basis Point Change | | :--- | :--- | :--- | :--- | | **Total** | **25.8%** | **22.4%** | **+340 bps** | | West | 22.3% | 17.8% | +450 bps | | Central | 27.3% | 24.9% | +240 bps | | East | 28.0% | 24.5% | +350 bps | - The financial services segment reported a loss of **$0.7 million** in Q1 2024, compared to a **$2.9 million** profit in Q1 2023, primarily due to a **$5.8 million** charge for unused prepaid interest rate forward commitments[113](index=113&type=chunk) SG&A Expenses as a Percentage of Home Closing Revenue | Expense Category | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Commissions and other sales costs | 6.9% | 6.6% | | General and administrative expenses | 3.5% | 3.8% | [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$905.3 million** cash and **$765.3 million** credit availability, a **17.5%** debt-to-capital ratio - Primary uses of cash include land acquisition, home construction, operating expenses, share repurchases, and dividends. The company expects to meet short-term liquidity needs through cash on hand and operating cash flows[119](index=119&type=chunk)[121](index=121&type=chunk) Key Leverage Ratios | Ratio | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Debt-to-capital | 17.5% | 17.9% | | Net debt-to-capital | 2.0% | 1.9% | - In Q1 2024, the company paid **$27.2 million** in dividends (**$0.75** per share) and repurchased **$55.9 million** of its shares[131](index=131&type=chunk)[135](index=135&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate sensitivity, with **$1.0 billion** in fixed-rate debt mitigating some long-term exposure - The company's operations are sensitive to interest rates, as increases can adversely affect housing demand and the ability of homebuyers to secure financing[142](index=142&type=chunk) - The company's fixed-rate debt consists primarily of **$1.0 billion** in senior notes, which limits the impact of interest rate changes on existing long-term debt[141](index=141&type=chunk) - The company does not utilize derivative interest rate swap financial instruments for trading or speculative purposes[142](index=142&type=chunk) [Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2024, with no material changes to internal controls - Based on an evaluation as of March 31, 2024, the CEO and CFO concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level[143](index=143&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, these controls[145](index=145&type=chunk) [Part II. Other Information](index=34&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine legal proceedings, with management believing pending matters will not materially impact financial condition - The company is involved in routine legal and regulatory proceedings, such as construction defect claims, which are considered incidental to its business[82](index=82&type=chunk) - Management believes that no pending legal or warranty matters as of March 31, 2024, would have a material adverse impact, and reserves are deemed sufficient[82](index=82&type=chunk) [Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported from the Annual Report on Form 10-K for the year ended December 31, 2023 - There have been no material changes in the company's risk factors from those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2023[148](index=148&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **362,419** shares in Q1 2024, with **$129.1 million** remaining available under its authorized stock repurchase program Issuer Purchases of Equity Securities (Q1 2024) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Jan 2024 | 35,250 | $168.30 | | Feb 2024 | 327,169 | $152.83 | | Mar 2024 | 0 | N/A | | **Total** | **362,419** | **N/A** | - As of March 31, 2024, **$129.1 million** was still available for share repurchases under the authorized program[149](index=149&type=chunk) [Other Information](index=34&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q1 2024 - No director or officer adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" during the first quarter of 2024[151](index=151&type=chunk) [Exhibits](index=35&type=section&id=Item%206.%20Exhibits) This section lists all Form 10-Q exhibits, including CEO/CFO certifications and financial statements in Inline XBRL format - The report includes CEO and CFO certifications under Rule 13a-14(a)/15d-14(a) and Section 1350[152](index=152&type=chunk) - Financial statements and notes were formatted in Inline XBRL (Extensible Business Reporting Language) as part of the filing[152](index=152&type=chunk)

Financial Data and Key Metrics Changes - Meritage Homes reported home closing revenue of $1.5 billion for Q1 2024, reflecting a 21% increase in home closing volume year-over-year, partially offset by a 4% decrease in average selling price (ASP) [20][37] - The company achieved a gross margin of 25.8%, an increase of 340 basis points from 22.4% in the prior year [21][37] - Book value per share increased by 17% year-over-year to $129.98, with a return on equity of 18% [8] Business Line Data and Key Metrics Changes - Entry-level homes accounted for over 90% of total order volume, with an ASP of $409,000, down 5% from the prior year [13] - The company had approximately 6,000 spec homes in inventory as of March 31, 2024, up 54% from about 3,900 specs a year earlier [46] - 93% of home closings in Q1 2024 came from previously started inventory, up from 87% in the prior year [17] Market Data and Key Metrics Changes - The West region had an average absorption pace of 4.8 net sales per month, compared to 4.5 last year, with significant sales momentum regained in Arizona and Colorado [15] - The Central region, particularly Texas, had the highest regional average absorption pace of 5.2 sales per month, driven by economic growth [44] - The East region experienced a year-over-year growth in average absorption pace from 3.8 to 4.7 net sales per month [45] Company Strategy and Development Direction - The company is focused on increasing its community count and expects to end 2024 with mid to high-single digit growth, with greater projected growth in 2025 [14] - Meritage is implementing a move-in ready strategy to satisfy homebuyers' desire for quick closing times, which has helped improve market share [8][11] - The company plans to utilize off-balance sheet financing to control more land and increase its supply of lots beyond what its balance sheet can absorb [28][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the current market conditions and anticipates continued strong demand for affordable housing, particularly from millennials and Gen Z [7][8] - The company expects ASP for the rest of the year to remain consistent, with potential reductions from geographic mix and new entry-level communities [50] - Management noted that the effective income tax rate for Q1 2024 was 20.5%, benefiting from energy tax credits [79] Other Important Information - Meritage received the President's Volunteer Service Award for its commitment to community service, packaging nearly 260,000 meals to fight childhood hunger [9] - The company has a formal share repurchase plan with a minimum buyback commitment of $15 million each quarter, and it repurchased an additional $41 million in Q1 2024 [27] Q&A Session Summary Question: What is the outlook for gross margins given the current market conditions? - Management indicated that while incentives remain elevated, they expect to maintain lower costs for rate locks due to quicker sales and closings [68][69] Question: How does the company view its backlog turnover ratio? - Management believes the current backlog turnover ratio of over 100% will be the new normal, supported by stable cycle times and production capacity [86] Question: What is the company's strategy regarding land acquisition? - Management confirmed that the timing of land deals is currently favorable, and they are on track to meet their land acquisition targets for 2025 and beyond [92][94] Question: Can you elaborate on the average buyer profile? - The average buyer has a FICO score near 740, with debt-to-income ratios around 41-42, indicating a stable buyer profile [55][140] Question: What are the expectations for ASP in the coming quarters? - Management stated that ASP guidance is influenced by the land being purchased, with a focus on producing more affordable homes while still taking pricing when the market allows [101][102]

Financial Performance - Home closing revenue increased by 16% year-over-year, reaching $1.466 billion in 1Q24 compared to $1.262 billion in 1Q23[15] - Home closing gross profit increased by 34% year-over-year, reaching $378 million in 1Q24 compared to $282 million in 1Q23[15] - Home closing gross margin improved by 340 bps to 25.8% in 1Q24 from 22.4% in 1Q23[15] - Net earnings increased by 42% year-over-year, reaching $186 million in 1Q24 compared to $131 million in 1Q23[15] - Diluted EPS increased by 43% year-over-year, reaching $5.06 in 1Q24 compared to $3.54 in 1Q23[15] Sales and Orders - Net sales orders increased by 14% year-over-year[6] - Total orders increased by 14% year-over-year, from 3,487 in 1Q23 to 3,991 in 1Q24[6] - ASP on orders decreased by 5% year-over-year to $409K[25] - Home closings increased by 21% to 3,507 units[38] Land and Development - Total lots controlled increased to 66,434 in 1Q24 from 60,942 in 1Q23[41] - The supply of lots is 4.6 years[41] - Capital spend totaled $514 million in 1Q24, with 84% allocated to land spend, 11% to share repurchases, and 5% to cash dividends[40] Community Count and Absorption - Average active communities decreased by 1% year-over-year[25] - Absorption per month increased by 17% year-over-year[25] - Entry-level homes accounted for 90% of the ending community count in 1Q24[6]

Meritage Homes Corporation’s (MTH) stock gained 12.7% in the after-hours trading session on Apr 24 after it reported impressive results for first-quarter 2024. Both earnings and total closing revenues surpassed the Zacks Consensus Estimate and increased on a year-over- year basis. The upside was backed by higher deliveries. Solid execution on its spec building and streamlined strategy helped it achieve yet another record backlog conversion rate of 138% and a return on equity of 18% during the quarter. Earni ...