Meritage Homes reports fourth quarter 2021 results including 500 bps increase in home closing gross margin, 33% increase in year-end community count to 259 and 57% increase in diluted EPS over prior year

Rhea-AI Summary

Meritage Homes Corporation (NYSE: MTH) reported record results for Q4 and full year 2021, with home closing revenue reaching $1.5 billion, up 6% year-over-year. Total homes closed for 2021 amounted to 12,801, an 8% increase from the previous year. Net earnings surged 56% to $237.5 million, translating to diluted EPS of $6.25. The company anticipates 14,500-15,500 home closings in 2022, driving projected revenue of $6.1-6.5 billion. Additionally, Meritage is focusing on entry-level markets, reflecting favorable trends among millennials and baby boomers.

Positive

• Net earnings increased 56% to $237.5 million for Q4 2021.
• Diluted EPS rose by 57% to $6.25.
• Total home closing revenue for 2021 reached $5.1 billion, up 14% year-over-year.
• Backlog value increased 39% to $2.5 billion, with 5,679 homes sold but not yet closed.
• Projected home closings for 2022 between 14,500-15,500, generating an expected revenue of $6.1-6.5 billion.

Negative

• Home closings decreased by 6% in Q4 2021 compared to Q4 2020.
• Average absorptions per store declined to 4.5 homes per month from 5.3 in the same period last year.
• Debt-to-capital ratio increased from 10.5% to 15.1% year-over-year.

SCOTTSDALE, Ariz., Jan. 26, 2022 (GLOBE NEWSWIRE) -- Meritage Homes Corporation (NYSE: MTH), a leading U.S. homebuilder, today announced fourth quarter and full year results for the periods ended December 31, 2021.

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

	Three Months Ended December 31,									Twelve Months Ended December 31,
		2021			2020		% Chg				2021			2020		% Chg
Homes closed (units)		3,526			3,744		(6	)%			12,801			11,834		8	%
Home closing revenue	$	1,498,813		$	1,409,160		6	%		$	5,094,873		$	4,464,389		14	%
Average sales price - closings	$	425		$	376		13	%		$	398		$	377		6	%
Home orders (units)		3,367			3,174		6	%			13,808			13,724		1	%
Home order value	$	1,459,060		$	1,216,069		20	%		$	5,796,813		$	5,174,938		12	%
Average sales price - orders	$	433		$	383		13	%		$	420		$	377		11	%
Ending backlog (units)											5,679			4,672		22	%
Ending backlog value										$	2,516,164		$	1,812,547		39	%
Average sales price - backlog										$	443		$	388		14	%
Earnings before income taxes	$	311,497		$	195,365		59	%		$	954,834		$	533,566		79	%
Net earnings	$	237,460		$	152,527		56	%		$	737,444		$	423,475		74	%
Diluted EPS	$	6.25		$	3.97		57	%		$	19.29		$	11.00		75	%

MANAGEMENT COMMENTS

“Our strong fourth quarter results completed an extraordinary 2021 for Meritage Homes, reflecting the demand in the homebuilding market combined with our team’s execution. In the face of prolonged supply chain constraints and a tightening labor market, we achieved our highest fourth quarter of sales orders and our second highest quarterly home closings while accelerating our spec starts,” said Steven J. Hilton, executive chairman of Meritage Homes. "Meritage again broke several financial company records this quarter including our highest quarterly home closing revenue, home closing gross profit and diluted EPS as well as the lowest quarterly SG&A as a percentage of home closing revenue in our company's history."

“The housing market remained strong, benefiting from the ongoing shortage of housing inventory, still-low interest rates and the continued favorable homebuying trends from millennials and baby boomers that drove housing demand in all our markets,” Phillippe Lord, chief executive officer of Meritage Homes, said. “We anticipate that our strategy of focusing on the entry-level and first move-up markets will enable us to continue leveraging these ongoing demographic demand trends.”

Mr. Lord continued, "In the fourth quarter of 2021, quarterly sales orders of 3,367 homes were 6% higher than prior year. Despite metering our orders pace in almost all of our communities to align our sales with production, we achieved our second highest fourth quarter average absorption pace of 4.5 per month across our 248 average communities.”

"For full year 2021, we delivered 12,801 homes, which was the most in company history and 8% greater than the prior year. On a quarterly basis, we closed 3,526 homes in the current quarter, which was just 6% lower than the fourth quarter of 2020 given labor and supply chain challenges. As a result of favorable pricing power, home closing revenue increased 6% year-over-year to $1.5 billion for the fourth quarter of 2021, which combined with a 29.0% home closing gross margin, led to a 57% year-over-year increase in our diluted EPS from $3.97 to $6.25," Mr. Lord remarked.

“At December 31, 2021, we had 259 active ending communities, a 10% increase sequentially from 236 at September 30, 2021 and a 33% year-over-year increase from 195 at December 31, 2020. We are one step closer to attaining our mid-2022 goal of 300 communities. We are already seeing increased volume from our community count growth and expect to continue to benefit from incremental orders volume and closings in 2022 and beyond,” said Mr. Lord. “During the quarter, $507 million was spent on land acquisition and development and 9,000 net new lots were secured, bringing our total lot supply to over 75,000. We maintained a strong balance sheet and ample liquidity this quarter as reflected in our net debt-to-capital ratio of 15.1%, which positions us well to invest for future growth.”

Mr. Lord concluded, “2021 was a record year of sales orders and home closings. Given our heavy backlog of nearly 5,700 sold homes and our growing community count, we are projecting 14,500-15,500 home closings for the full year 2022, which we anticipate will generate $6.1-6.5 billion in home closing revenue. Home closing gross margin is projected to be around 27.75%. With a projected effective tax rate of 25%, we expect diluted EPS to be in the range of $23.15-24.65 for 2022.”

FOURTH QUARTER RESULTS

• Orders of 3,367 homes for the fourth quarter of 2021 were 6% higher year-over-year, driven by a 24% increase in average active community count, which was partially offset by a decrease in average absorptions per store to 4.5 per month from our highest fourth quarter average absorption pace of 5.3 per month in the fourth quarter of 2020. Entry-level represented 82% of fourth quarter 2021 sales orders, compared to 72% in the same quarter of 2020. Average sales price ("ASP") on orders in the fourth quarter of 2021 exceeded $430,000.
• The 6% increase in home closing revenue to $1.5 billion for the quarter reflected a 13% increase in ASP on closings due to strong market demand even as we shifted our product mix toward entry-level homes. This was partially offset by a 6% decline in home closing volume year-over-year.
• Home closing gross margin improved 500 bps to 29.0% in the fourth quarter of 2021 from 24.0% in the prior year. Higher ASP more than offset high commodity costs.
• Land sale impairments totaled $2.0 million in the current quarter's total gross profit compared to $20.3 million in the fourth quarter of 2020. In both years, the charges stem from the disposition of assets that no longer fit our strategy.
• Selling, general and administrative ("SG&A") expenses as a percentage of fourth quarter 2021 home closing revenue of 8.5% improved 80 bps from 9.3% in the fourth quarter of 2020, due to continued leverage of fixed costs on higher home closing revenue, lower broker commissions and the benefits of technology on our sales and marketing efforts.
• One-time items comprised of payments to our general counsel who retired in December 2021 and a change in the Company's retirement vesting eligibility for equity awards totaled $5.0 million and were included in SG&A expenses in the fourth quarter of 2021.
• The fourth quarter effective income tax rate was 23.8% in 2021 compared to 21.9% in the prior year. Eligible energy tax credits on qualifying energy-efficient homes closed under the Taxpayer Certainty and Disaster Tax Relief Act ("2019 Taxpayer Act") enacted in December 2019 reduced the rate in both years.
• Fourth quarter 2021 pre-tax margin of 20.7% was 690 bps higher than 13.8% in the fourth quarter of 2020. Net earnings were $237.5 million ($6.25 per diluted share) for this quarter, compared to $152.5 million ($3.97 per diluted share) for the same quarter in the prior year. The 57% increase in diluted EPS reflected pricing power, expanded gross margin and improved overhead leverage combined with a lower outstanding share count in the current quarter.

FULL YEAR RESULTS

• Total sales orders of 13,808 homes for the full year 2021 were in line with full year 2020, as were average community count of 224 and average absorption pace of 5.1 per month for the full year 2021. For the current year, entry-level represented 81% of sales orders, compared to 68% for 2020.
• Home closing revenue for the full year 2021 increased 14% year-over-year to $5.1 billion due to 8% improved home closing volume and 6% higher ASP resulting from the favorable pricing environment.
• Home closing gross margin improved 580 bps to 27.8% for the full year 2021, compared to 22.0% in 2020, reflecting the benefits of higher ASP and better leveraging of fixed costs.
• Total impairments were $2.1 million in the current year compared to $24.9 million in 2020, with each year relating to the disposition of assets that no longer fit our strategy.
• SG&A expenses as a percentage of home closing revenue improved 80 bps to 9.2% in 2021 from 10.0% in 2020 as a result of greater leverage of overhead expenses on higher home closing revenue as well as sales and marketing efficiencies gained from digital innovations.
• Loss on early extinguishment of debt charges of $18.2 million was recognized in 2021 in connection with the early redemption of our 7.00% senior notes due 2022.
• The effective tax rate for the full year 2021 was 22.8%, compared to 20.6% in 2020. The effective tax rate in both periods benefited from tax credits earned for qualifying energy-efficient homes under the 2019 Taxpayer Act.
• The pre-tax margin for the current year of 18.6% was 670 bps higher than 11.9% for 2020. Net earnings totaled $737.4 million ($19.29 per diluted share) for full year 2021, compared to $423.5 million ($11.00 per diluted share) in 2020. The 74% year-over-year increase in net earnings (75% for diluted EPS) reflects pricing power, expanded gross margin and greater overhead leverage in the current year.

BALANCE SHEET

• Cash and cash equivalents at December 31, 2021 totaled $618.3 million, compared to $745.6 million at December 31, 2020, reflecting increased investments in real estate and development and share repurchases. Real estate assets increased from $2.8 billion at December 31, 2020 to $3.7 billion at December 31, 2021.
• More than 75,000 total lots were owned or under control at December 31, 2021, compared to about 55,500 total lots at December 31, 2020. 9,000 net new lots were added in the fourth quarter of 2021, representing an estimated 45 net future communities, of which 93% are entry-level communities.
• Debt-to-capital and net debt-to-capital ratios were 27.6% and 15.1%, respectively at December 31, 2021, compared with 30.3% and 10.5%, respectively at December 31, 2020.
• During the full year 2021, the Company repurchased 639,346 shares of stock for $61.0 million, of which 243,885 shares of stock totaling $24.0 million were repurchased during the fourth quarter of 2021. $153.4 million remains available to repurchase under our authorized share repurchase program as of December 31, 2021.
• On December 17, 2021, Meritage entered into an amendment to its $780 million unsecured revolving credit facility, which extends the maturity date to December 2026.
  

CONFERENCE CALL

Management will host a conference call to discuss its fourth quarter results at 8:00 a.m. Mountain Standard Time (10:00 a.m. Eastern Standard Time) on Thursday, January 27, 2022. The call will be webcast live with an accompanying slideshow available on the "Investor Relations" page of the Company's website at https://investors.meritagehomes.com. Telephone participants will be able to join by dialing in to 1-877-407-6951 US toll free or 1-412-902-0046 on the day of the call.

A replay of the call will be available via webcast beginning at approximately 11:00 a.m. Mountain Standard Time (1:00 p.m. Eastern Standard Time) on January 27, 2022 and extending through February 10, 2022, at https://investors.meritagehomes.com.

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

		Three Months Ended December 31,
			2021				2020			Change $				Change %
Homebuilding:
	Home closing revenue	$	1,498,813			$	1,409,160			$	89,653			6	%
	Land closing revenue		12				777				(765	)		(98	)%
	Total closing revenue		1,498,825				1,409,937				88,888			6	%
	Cost of home closings		(1,064,068	)			(1,071,375	)			7,307			(1	)%
	Cost of land closings		(2,074	)			(21,016	)			18,942			(90	)%
	Total cost of closings		(1,066,142	)			(1,092,391	)			26,249			(2	)%
	Home closing gross profit		434,745				337,785				96,960			29	%
	Land closing gross loss		(2,062	)			(20,239	)			18,177			(90	)%
	Total closing gross profit		432,683				317,546				115,137			36	%
Financial Services:
	Revenue		5,583				5,768				(185	)		(3	)%
	Expense		(2,336	)			(2,278	)			(58	)		3	%
	Earnings from financial services unconsolidated entities and other, net		2,188				1,956				232			12	%
	Financial services profit		5,435				5,446				(11	)		—	%
Commissions and other sales costs			(74,818	)			(83,038	)			8,220			(10	)%
General and administrative expenses			(53,152	)			(47,937	)			(5,215	)		11	%
Interest expense			(72	)			(1	)			(71	)		N/M
Other income, net			1,421				3,349				(1,928	)		(58	)%
Earnings before income taxes			311,497				195,365				116,132			59	%
Provision for income taxes			(74,037	)			(42,838	)			(31,199	)		73	%
Net earnings		$	237,460			$	152,527			$	84,933			56	%
Earnings per common share:
	Basic									Change $ or shares				Change %
	Earnings per common share	$	6.36			$	4.06			$	2.30			57	%
	Weighted average shares outstanding		37,334				37,582				(248	)		(1	)%
	Diluted
	Earnings per common share	$	6.25			$	3.97			$	2.28			57	%
	Weighted average shares outstanding		37,993				38,412				(419	)		(1	)%

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

		Twelve Months Ended December 31,
			2021				2020			Change $				Change %
Homebuilding:
	Home closing revenue	$	5,094,873			$	4,464,389			$	630,484			14	%
	Land closing revenue		25,237				17,731				7,506			42	%
	Total closing revenue		5,120,110				4,482,120				637,990			14	%
	Cost of home closings		(3,676,496	)			(3,483,981	)			(192,515	)		6	%
	Cost of land closings		(26,320	)			(38,525	)			12,205			(32	)%
	Total cost of closings		(3,702,816	)			(3,522,506	)			(180,310	)		5	%
	Home closing gross profit		1,418,377				980,408				437,969			45	%
	Land closing gross loss		(1,083	)			(20,794	)			19,711			(95	)%
	Total closing gross profit		1,417,294				959,614				457,680			48	%
Financial Services:
	Revenue		21,207				19,097				2,110			11	%
	Expense		(9,182	)			(7,797	)			(1,385	)		18	%
	Earnings from financial services unconsolidated entities and other, net		6,009				5,088				921			18	%
	Financial services profit		18,034				16,388				1,646			10	%
Commissions and other sales costs			(285,403	)			(287,901	)			2,498			(1	)%
General and administrative expenses			(181,449	)			(159,020	)			(22,429	)		14	%
Interest expense			(318	)			(2,177	)			1,859			(85	)%
Other income, net			4,864				6,662				(1,798	)		(27	)%
Loss on early extinguishment of debt			(18,188	)			—				(18,188	)		N/A
Earnings before income taxes			954,834				533,566				421,268			79	%
Provision for income taxes			(217,390	)			(110,091	)			(107,299	)		97	%
Net earnings		$	737,444			$	423,475			$	313,969			74	%
Earnings per common share:
	Basic									Change $ or shares				Change %
	Earnings per common share	$	19.61			$	11.23			$	8.38			75	%
	Weighted average shares outstanding		37,610				37,718				(108	)		—	%
	Diluted
	Earnings per common share	$	19.29			$	11.00			$	8.29			75	%
	Weighted average shares outstanding		38,233				38,484				(251	)		(1	)%

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

		December 31, 2021			December 31, 2020
Assets:
Cash and cash equivalents		$	618,335		$	745,621
Other receivables			147,548			98,573
Real estate (1)			3,734,408			2,778,039
Real estate not owned			8,011			—
Deposits on real estate under option or contract			90,679			59,534
Investments in unconsolidated entities			5,764			4,350
Property and equipment, net			37,340			38,933
Deferred tax assets, net			40,672			36,040
Prepaids, other assets and goodwill			124,776			103,308
Total assets		$	4,807,533		$	3,864,398
Liabilities:
Accounts payable		$	216,009		$	175,250
Accrued liabilities			337,277			296,121
Home sale deposits			42,610			25,074
Liabilities related to real estate not owned			7,210			—
Loans payable and other borrowings			17,552			23,094
Senior notes, net			1,142,486			996,991
Total liabilities			1,763,144			1,516,530
Stockholders' Equity:
Preferred stock			—			—
Common stock			373			375
Additional paid-in capital			414,841			455,762
Retained earnings			2,629,175			1,891,731
Total stockholders’ equity			3,044,389			2,347,868
Total liabilities and stockholders’ equity		$	4,807,533		$	3,864,398
(1) Real estate – Allocated costs:
Homes under contract under construction			1,039,822		$	873,365
Unsold homes, completed and under construction			484,999			357,861
Model homes			81,049			82,502
Finished home sites and home sites under development			2,128,538			1,464,311
Total real estate		$	3,734,408		$	2,778,039

Supplemental Information and Non-GAAP Financial Disclosures (Dollars in thousands – unaudited):

	Three Months Ended December 31,								Twelve Months Ended December 31,
		2021				2020				2021				2020
Depreciation and amortization	$	6,353			$	8,556			$	26,245			$	31,052
Summary of Capitalized Interest:
Capitalized interest, beginning of period	$	57,293			$	67,550			$	58,940			$	82,014
Interest incurred		15,211				16,101				62,836				66,289
Interest expensed		(72	)			(1	)			(318	)			(2,177	)
Interest amortized to cost of home and land closings		(16,179	)			(24,710	)			(65,205	)			(87,186	)
Capitalized interest, end of period	$	56,253			$	58,940			$	56,253			$	58,940
	December 31, 2021				December 31, 2020
Senior notes, net, loans payable and other borrowings	$	1,160,038			$	1,020,085
Stockholders' equity		3,044,389				2,347,868
Total capital		4,204,427				3,367,953
Debt-to-capital		27.6	%			30.3	%
Senior notes, net, loans payable and other borrowings	$	1,160,038			$	1,020,085
Less: cash and cash equivalents		(618,335	)			(745,621	)
Net debt		541,703				274,464
Stockholders’ equity		3,044,389				2,347,868
Total net capital	$	3,586,092			$	2,622,332
Net debt-to-capital		15.1	%			10.5	%

Meritage Homes Corporation and Subsidiaries
Consolidated Statements of Cash Flows 
(In thousands) (unaudited)

		Twelve Months Ended December 31,
			2021				2020
Cash flows from operating activities:
Net earnings		$	737,444			$	423,475
Adjustments to reconcile net earnings to net cash (used in)/provided by operating activities:
Depreciation and amortization			26,245				31,052
Stock-based compensation			20,069				19,995
Loss on early extinguishment of debt			18,188				—
Equity in earnings from unconsolidated entities			(4,657	)			(4,496	)
Distribution of earnings from unconsolidated entities			4,951				3,594
Other			(2,911	)			14,406
Changes in assets and liabilities:
Increase in real estate			(948,055	)			(40,089	)
Increase in deposits on real estate under option or contract			(31,946	)			(9,477	)
(Increase)/decrease in receivables, prepaids and other assets			(65,114	)			2,130
Increase in accounts payable and accrued liabilities			76,158				88,942
Increase in home sale deposits			17,536				828
Net cash (used in)/provided by operating activities			(152,092	)			530,360
Cash flows from investing activities:
Investments in unconsolidated entities			(1,708	)			(5	)
Distributions of capital from unconsolidated entities			—				1,000
Purchases of property and equipment			(25,664	)			(19,932	)
Proceeds from sales of property and equipment			551				703
Maturities/sales of investments and securities			2,795				2,489
Payments to purchase investments and securities			(2,795	)			(2,489	)
Net cash used in investing activities			(26,821	)			(18,234	)
Cash flows from financing activities:
Repayment of loans payable and other borrowings			(13,589	)			(16,379	)
Repayment of senior notes and senior convertible notes			(317,690	)			—
Proceeds from issuance of senior notes			450,000				—
Payment of debt issuance costs			(6,102	)			—
Repurchase of shares			(60,992	)			(69,592	)
Net cash provided by/(used in) financing activities			51,627				(85,971	)
Net (decrease)/increase in cash and cash equivalents			(127,286	)			426,155
Beginning cash and cash equivalents			745,621				319,466
Ending cash and cash equivalents		$	618,335			$	745,621

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

		Three Months Ended
		December 31, 2021					December 31, 2020
		Homes		Value			Homes		Value
Homes Closed:
Arizona		760		$	305,296		704		$	228,990
California		352			228,774		444			286,744
Colorado		166			96,091		185			85,707
West Region		1,278			630,161		1,333			601,441
Texas		1,036			395,253		1,147			371,870
Central Region		1,036			395,253		1,147			371,870
Florida		417			159,707		524			183,411
Georgia		191			80,262		183			65,960
North Carolina		390			156,721		327			112,299
South Carolina		119			41,626		102			32,256
Tennessee		95			35,083		128			41,923
East Region		1,212			473,399		1,264			435,849
Total		3,526		$	1,498,813		3,744		$	1,409,160
Homes Ordered:
Arizona		559		$	238,663		485		$	168,760
California		242			168,688		280			187,431
Colorado		193			112,344		210			103,351
West Region		994			519,695		975			459,542
Texas		1,127			452,712		1,019			341,240
Central Region		1,127			452,712		1,019			341,240
Florida		500			190,426		447			155,555
Georgia		161			70,017		147			54,618
North Carolina		345			140,339		368			131,857
South Carolina		126			42,247		108			36,733
Tennessee		114			43,624		110			36,524
East Region		1,246			486,653		1,180			415,287
Total		3,367		$	1,459,060		3,174		$	1,216,069

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

		Twelve Months Ended
		December 31, 2021					December 31, 2020
		Homes		Value			Homes		Value
Homes Closed:
Arizona		2,183		$	802,401		2,019		$	666,223
California		1,242			776,528		1,231			774,349
Colorado		630			335,490		738			354,677
West Region		4,055			1,914,419		3,988			1,795,249
Texas		4,165			1,500,682		3,894			1,273,661
Central Region		4,165			1,500,682		3,894			1,273,661
Florida		1,663			600,554		1,466			540,644
Georgia		647			249,882		642			229,577
North Carolina		1,390			528,840		1,132			388,776
South Carolina		377			129,367		331			105,369
Tennessee		504			171,129		381			131,113
East Region		4,581			1,679,772		3,952			1,395,479
Total		12,801		$	5,094,873		11,834		$	4,464,389
Homes Ordered:
Arizona		2,335		$	951,730		2,501		$	823,339
California		1,191			773,166		1,530			956,681
Colorado		750			429,499		750			361,619
West Region		4,276			2,154,395		4,781			2,141,639
Texas		4,413			1,700,744		4,476			1,472,183
Central Region		4,413			1,700,744		4,476			1,472,183
Florida		1,981			738,132		1,645			590,966
Georgia		694			283,649		665			237,576
North Carolina		1,501			591,193		1,367			472,483
South Carolina		390			132,779		380			122,049
Tennessee		553			195,921		410			138,042
East Region		5,119			1,941,674		4,467			1,561,116
Total		13,808		$	5,796,813		13,724		$	5,174,938
Order Backlog:
Arizona		1,145		$	493,575		993		$	343,917
California		393			271,383		444			274,680
Colorado		328			198,832		208			104,709
West Region		1,866			963,790		1,645			723,306
Texas		1,878			772,871		1,630			572,242
Central Region		1,878			772,871		1,630			572,242
Florida		868			352,584		550			214,790
Georgia		203			91,781		156			57,882
North Carolina		565			225,854		454			163,346
South Carolina		133			44,673		120			41,211
Tennessee		166			64,611		117			39,770
East Region		1,935			779,503		1,397			516,999
Total		5,679		$	2,516,164		4,672		$	1,812,547

Meritage Homes Corporation and Subsidiaries
Operating Data
(unaudited)

		Three Months Ended
		December 31, 2021				December 31, 2020
		Ending		Average		Ending		Average
Active Communities:
Arizona		39		38.5		33		34.0
California		22		20.0		16		18.0
Colorado		17		16.5		11		11.0
West Region		78		75.0		60		63.0
Texas		73		70.5		63		60.5
Central Region		73		70.5		63		60.5
Florida		41		39.5		31		32.5
Georgia		15		13.5		7		9.0
North Carolina		26		26.0		21		20.5
South Carolina		14		12.5		6		6.0
Tennessee		12		10.5		7		8.0
East Region		108		102.0		72		76.0
Total		259		247.5		195		199.5

		Twelve Months Ended
		December 31, 2021				December 31, 2020
		Ending		Average		Ending		Average
Active Communities:
Arizona		39		36.2		33		34.8
California		22		19.0		16		23.3
Colorado		17		14.6		11		12.0
West Region		78		69.8		60		70.1
Texas		73		65.4		63		66.9
Central Region		73		65.4		63		66.9
Florida		41		34.8		31		33.8
Georgia		15		11.2		7		12.5
North Carolina		26		24.6		21		20.6
South Carolina		14		8.8		6		6.0
Tennessee		12		9.2		7		9.8
East Region		108		88.6		72		82.7
Total		259		223.8		195		219.7

ABOUT MERITAGE HOMES CORPORATION

Meritage Homes is the sixth-largest public homebuilder in the United States, based on homes closed in 2020. The Company offers a variety of homes that are designed with a focus on entry-level and first move-up buyers in Arizona, California, Colorado, Texas, Florida, Georgia, North Carolina, South Carolina and Tennessee.

Meritage Homes has delivered over 150,000 homes in its 36-year history, and has a reputation for its distinctive style, quality construction, and award-winning customer experience. The Company is the industry leader in energy-efficient homebuilding, an eight-time recipient of the U.S. Environmental Protection Agency’s (EPA) ENERGY STAR® Partner of the Year for Sustained Excellence Award since 2013 for innovation and industry leadership in energy efficient homebuilding, and the recipient of the EPA Indoor airPLUS Leader Award.

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 expectations about the housing market in general; projected 2022 home closings, home closing revenue, home closing gross margins, effective tax rate and diluted earnings per share; future community counts; trends in construction costs; and expectations about our future results.

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, except as required by law, 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. These risks and uncertainties include, but are not limited to, the following: changes in interest rates and the availability and pricing of residential mortgages; inflation in the cost of materials used to develop communities and construct homes; supply chain and labor constraints; our ability to obtain performance and surety bonds in connection with our development work; the ability of our potential buyers to sell their existing homes; legislation related to tariffs; the adverse effect of slow absorption rates; impairments of our real estate inventory; cancellation rates; competition; home warranty and construction defect claims; failures in health and safety performance; fluctuations in quarterly operating results; our level of indebtedness; our ability to obtain financing if our credit ratings are downgraded; our potential exposure to and impacts from natural disasters or severe weather conditions; the availability and cost of finished lots and undeveloped land; the success of our strategy to offer and market entry-level and first move-up homes; 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 limited geographic diversification; the replication of our energy-efficient technologies by our competitors; shortages in the availability and cost of subcontract labor; our exposure to information technology failures and security breaches and the impact thereof; the loss of key personnel; changes in tax laws that adversely impact us or our homebuyers; our inability to prevail on contested tax positions; failure to comply with laws and regulations; our compliance with government regulations; negative publicity that affects our reputation; potential disruptions to our business by an epidemic or pandemic (such as COVID-19), and measures that federal, state and local governments and/or health authorities implement to address it; 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, 2020 and our Form 10-Q for the quarter ended September 30, 2021 under the caption "Risk Factors," which can be found on our website at https://investors.meritagehomes.com.

Contacts:	Emily Tadano, VP Investor Relations
	(480) 515-8979 (office)
	investors@meritagehomes.com

 

FAQ

What are the key financial results for Meritage Homes (MTH) in Q4 2021?

In Q4 2021, Meritage Homes reported $1.5 billion in home closing revenue, a 6% increase, and a net earnings of $237.5 million, leading to diluted EPS of $6.25.

How many homes did Meritage Homes (MTH) close in 2021?

Meritage Homes closed a total of 12,801 homes in 2021, which is an 8% increase from the previous year.

What is Meritage Homes' (MTH) projected revenue for 2022?

Meritage Homes anticipates generating $6.1 to $6.5 billion in home closing revenue for the full year 2022.

What challenges did Meritage Homes (MTH) face in Q4 2021?

Despite achieving strong results, Meritage Homes experienced a 6% decline in home closings due to ongoing supply chain constraints and a tightening labor market.

What strategy is Meritage Homes (MTH) focusing on for future growth?

Meritage Homes is focusing on entry-level and first move-up markets to leverage demographic demand trends.