Meritage Homes reports record third quarter 2020 orders 71% higher than prior year; 56% increase in net earnings with 21% revenue growth and 21.5% gross margin

Rhea-AI Summary

Meritage Homes Corporation (NYSE: MTH) reported significant growth in its third quarter results for 2020, with home closing revenue reaching $1.13 billion, a 21% increase year-over-year. Homes closed surged by 24% to 3,004, while home orders jumped 71% to 3,851 units. Net earnings climbed 56% to $109.1 million, resulting in a diluted EPS of $2.84, up 59%. The company also announced projections for total home closings between 11,200-11,500 for the year, with expected revenue of up to $4.4 billion. Meritage's strategy of focusing on affordable homes contributed to its success.

Positive

• Net earnings increased by 56% to $109.1 million.
• Total closing revenue rose by 21% to $1.13 billion.
• Homes closed increased 24% year-over-year to 3,004.
• Record total sales orders of 3,851, a 71% year-over-year increase.
• Projected total home closings of 11,200-11,500 for the year.
• Diluted EPS increased by 59% to $2.84.

Negative

• Average sales price for closings decreased by 3% to $377.

SCOTTSDALE, Ariz., Oct. 21, 2020 (GLOBE NEWSWIRE) -- Meritage Homes Corporation (NYSE: MTH), a leading U.S. homebuilder, reported third quarter results for the period ended September 30, 2020.

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

		Three Months Ended September 30,											Nine Months Ended September 30,
		2020				2019				% Chg			2020				2019				% Chg
Homes closed (units)		3,004				2,419				24	%		8,090				6,437				26	%
Home closing revenue		$	1,133,221			$	939,185			21	%		$	3,055,229			$	2,500,888			22	%
Average sales price - closings		$	377			$	388			(3	)%		$	378			$	389			(3	)%
Home orders (units)		3,851				2,258				71	%		10,550				7,523				40	%
Home order value		$	1,488,480			$	858,395			73	%		$	3,958,870			$	2,879,369			37	%
Average sales price - orders		$	387			$	380			2	%		$	375			$	383			(2	)%
Ending backlog (units)													5,242				3,519				49	%
Ending backlog value													$	2,004,981			$	1,397,033			44	%
Average sales price - backlog													$	382			$	397			(4	)%
Earnings before income taxes		$	135,506			$	92,366			47	%		$	338,201			$	192,410			76	%
Net earnings		$	109,118			$	69,809			56	%		$	270,948			$	146,049			86	%
Diluted EPS		$	2.84			$	1.79			59	%		$	7.04			$	3.76			87	%

MANAGEMENT COMMENTS

"Our third quarter of 2020 results continued to outperform and reflect the current strength in the homebuilding market. Meritage had many remarkable achievements this past quarter: We delivered our highest quarterly sales orders, our strongest absorptions since 2005, record quarterly home closing revenue, and our best quarterly gross margin since 2014 - while also achieving our lowest net debt to capital in our company's history,” said Steven J. Hilton, chairman and chief executive officer of Meritage Homes. “These strong results are the combination of existing favorable market factors including historically-low mortgage interest rates and increased demand for healthier, safer homes, and Meritage's strategy of focusing on affordable entry-level and first move-up homes that allowed us to capitalize on that demand.

“Our sales orders of 3,851 homes this quarter were 71% more than the third quarter of 2019 and surpassed our previous quarterly record set in the second quarter of 2020. Over just the first nine months of this year, we sold a total of 10,550 homes - well over the full year 2019 sales volume. We also closed 24% more homes than we did in the same quarter of the prior year. Home closing revenue increased 21% year-over-year to $1.1 billion for the third quarter of 2020, which combined with a 21.5% home closing gross margin to drive a 56% increase in our net earnings compared to the third quarter of 2019."

He continued, "To meet the surge in demand we are experiencing, we are investing significantly for additional growth. We spent nearly $300 million on land acquisition and development and put a record near 9,000 new lots under control this quarter, bringing the total lot supply to nearly 48,000 lots, as we increase our market share in our existing geographies and push toward our 300 community count goal by early to mid 2022."

Mr. Hilton concluded, "Based on our performance through the first three quarters of 2020 and confidence in our ability to deliver our backlog, we are projecting 11,200-11,500 total home closings for approximately $4.2-4.4 billion total home closing revenue and home closing gross margin of 21.0-21.5% for the full year 2020. We expect that to translate into approximately $10.25-10.50 diluted earnings per share, a year-over-year increase of more than 60%."

THIRD QUARTER RESULTS

• The record total sales orders for the third quarter of 2020 reflected an increase of 71% year-over-year, driven by a 94% increase in absorption pace over the prior year’s third quarter with high demand for Meritage's entry-level LiVE.NOW^® product. Entry-level represented almost 70% of third quarter 2020 orders, compared to 54% in the same quarter in 2019. Absorptions doubled in Texas to six per month, compared to three per month in the third quarter last year, even with a 14% decline in average active communities. Absorptions were up 88% in the West region and 87% in the East region year-over-year, with significant increases across all states led by California's 137% increase.

• A 21% year-over-year increase in home closing revenue to a record $1.1 billion for the quarter ended September 30, 2020 reflected a 24% increase in home closing volume partially offset by a 3% reduction in average sales price ("ASP"), which was primarily due to the shift in product mix toward entry-level as compared to 2019.

• Home closing gross margin improved 170 bps to 21.5% from 19.8% a year ago. The additional closing volume and efficiencies gained from streamlined operations more than offset record high lumber prices and contributed to a 31% increase in total home closing gross profit over the prior year's third quarter.

• Selling, general and administrative expenses ("SG&A") were 10.1% of third quarter 2020 home closing revenue, a 70 bps improvement over 10.8% in the third quarter of 2019 due to greater leverage of fixed expenses on higher home closing revenue, as well as cost savings from technology enhancements, particularly as related to the Company's sales and marketing efforts.

• The third quarter effective income tax rate decreased to 19.5% in 2020 compared to 24.4% in 2019 primarily due to eligible energy tax credits on qualifying energy-efficient homes closed in 2020 that were not available in 2019, under the Taxpayer Certainty and Disaster Tax Relief Act enacted in December 2019.

• Third quarter 2020 pre-tax margin increased 210 bps to 11.9%, compared to 9.8% in the third quarter of 2019. Net earnings were $109.1 million ($2.84 per diluted share) for the third quarter of 2020, a 56% increase over $69.8 million ($1.79 per diluted share) reported for the third quarter of 2019. Strong earnings growth reflected the increases in home closing revenue, gross margins and improved overhead leverage, which combined with the reduction in diluted shares after the repurchase of one million shares in the first quarter of 2020, led to a 59% year-over-year improvement in earnings per diluted share.

YEAR TO DATE RESULTS

• Total orders for the first nine months of 2020 increased 40% year-over-year, driven by a 58% increase in absorptions on an 11% lower average community count, compared to the first nine months of 2019.

• Home closings of 8,090 for the first nine months of 2020 increased 26% year-over-year with a 3% reduction in ASP on closings due to the product mix shift toward Meritage's entry-level product, resulting in a 22% year-over-year increase in home closing revenue to $3.1 billion.

• Home closing gross margin increased 250 bps to 21.0% for the first nine months of 2020, compared to 18.5% in the same period of 2019, reflecting a 39% increase in total home closing gross profit for the first nine months of 2020.

• SG&A expenses as a percentage of home closing revenue improved to 10.3% in the first nine months of 2020, compared to 11.2% in the first nine months of 2019, reflecting greater leverage of overhead expenses on higher home closing revenue, as well as technology and cost savings initiatives implemented at the start of the COVID-19 pandemic.

• Interest expense decreased $6.2 million year-over-year, primarily due to lower debt balances reflecting the early redemption in December 2019 of $300 million senior notes that were due in early 2020.

• The effective tax rate for the first nine months of 2020 was 19.9%, compared to 24.1% for the same period in 2019, primarily due to approximately $10 million in year-to-date 2020 estimated energy tax credits.

• The pre-tax margin for the first nine months of 2020 increased 340 bps to 11.0%, compared to 7.6% for the first nine months of 2019. Year-to-date 2020 net earnings were $270.9 million ($7.04 per diluted share), an 86% increase over $146.0 million ($3.76 per diluted share) for year-to-date 2019, reflecting increases in home closing revenue and gross margin, combined with lower SG&A expenses and a lower effective tax rate in 2020, which combined with the reduction in diluted shares after the repurchase of one million shares in the first quarter of 2020, led to an 87% year-over-year improvement in earnings per diluted share.

BALANCE SHEET

• Cash and cash equivalents at September 30, 2020 totaled $610.0 million, compared to $319.5 million at December 31, 2019, reflecting positive cash flow from operations of $373.1 million. Real estate assets at September 30, 2020 held relatively steady to December 31, 2019 as an increase in sold inventory resulted in a decrease in spec inventory.

• Nearly 16,000 new lots were put under control in the first nine months of 2020, with over 55% coming from the third quarter of 2020 alone. The Company has been actively securing new lots following a short-lived dip in March and April due to COVID-19-related shutdowns. A total of nearly 48,000 lots were owned or controlled as of September 30, 2020, compared to approximately 37,000 total lots at September 30, 2019.

• Debt-to-capital and net debt-to-capital ratios were 31.7% and 15.7%, respectively, at September 30, 2020, down from 34.0% and 26.2%, respectively, at December 31, 2019.
  

CONFERENCE CALL
Management will host a conference call to discuss the results at 8:00 a.m. Arizona Time (11:00 a.m. Eastern Time) on Thursday, October 22. The call will be webcast live with an accompanying slideshow, both of which will be available on the "Investor Relations" page of the Company's web site at https://investors.meritagehomes.com. For those unable to participate via the webcast, telephone participants can dial in to 1-800-437-2398 US toll free on the day of the call. The international dial-in number is 1-929-477-0577.

A replay of the call will be available beginning at approximately 10:00 a.m. Arizona Time (1:00 p.m. Eastern Time) on October 22 and extending through November 5, 2020, on the website noted above or by dialing 1-800-437-2398 US toll free, 1-929-477-0577 for international and referencing conference number 1805364.

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

	Three Months Ended September 30,
	2020				2019				Change $				Change %
Homebuilding:
Home closing revenue	$	1,133,221			$	939,185			$	194,036			21	%
Land closing revenue	4,870				1,695				3,175				187	%
Total closing revenue	1,138,091				940,880				197,211				21	%
Cost of home closings	(889,654		)		(753,068		)		136,586				18	%
Cost of land closings	(4,360		)		(1,721		)		2,639				153	%
Total cost of closings	(894,014		)		(754,789		)		139,225				18	%
Home closing gross profit	243,567				186,117				57,450				31	%
Land closing gross profit/(loss)	510				(26		)		536				N/M
Total closing gross profit	244,077				186,091				57,986				31	%
Financial Services:
Revenue	4,939				4,317				622				14	%
Expense	(2,026		)		(1,725		)		301				17	%
Earnings from financial services unconsolidated entities and other, net	1,402				2,990				(1,588		)		(53	)%
Financial services profit	4,315				5,582				(1,267		)		(23	)%
Commissions and other sales costs	(73,282		)		(63,450		)		9,832				15	%
General and administrative expenses	(40,737		)		(37,191		)		3,546				10	%
Interest expense	(55		)		(1,068		)		(1,013		)		(95	)%
Other income, net	1,188				2,402				(1,214		)		(51	)%
Earnings before income taxes	135,506				92,366				43,140				47	%
Provision for income taxes	(26,388		)		(22,557		)		3,831				17	%
Net earnings	$	109,118			$	69,809			$	39,309			56	%
Earnings per common share:
Basic									Change $ or shares				Change %
Earnings per common share	$	2.90			$	1.82			$	1.08			59	%
Weighted average shares outstanding	37,607				38,296				(689		)		(2	)%
Diluted
Earnings per common share	$	2.84			$	1.79			$	1.05			59	%
Weighted average shares outstanding	38,405				39,079				(674		)		(2	)%

	Nine Months Ended September 30,
	2020				2019				Change $				Change %
Homebuilding:
Home closing revenue	$	3,055,229			$	2,500,888			$	554,341			22	%
Land closing revenue	16,954				12,747				4,207				33	%
Total closing revenue	3,072,183				2,513,635				558,548				22	%
Cost of home closings	(2,412,606		)		(2,039,191		)		373,415				18	%
Cost of land closings	(17,509		)		(14,149		)		3,360				24	%
Total cost of closings	(2,430,115		)		(2,053,340		)		376,775				18	%
Home closing gross profit	642,623				461,697				180,926				39	%
Land closing gross loss	(555		)		(1,402		)		847				60	%
Total closing gross profit	642,068				460,295				181,773				39	%
Financial Services:
Revenue	13,329				11,705				1,624				14	%
Expense	(5,519		)		(4,949		)		570				12	%
Earnings from financial services unconsolidated entities and other, net	3,132				9,559				(6,427		)		(67	)%
Financial services profit	10,942				16,315				(5,373		)		(33	)%
Commissions and other sales costs	(204,863		)		(176,130		)		28,733				16	%
General and administrative expenses	(111,083		)		(105,536		)		5,547				5	%
Interest expense	(2,176		)		(8,350		)		(6,174		)		(74	)%
Other income, net	3,313				5,816				(2,503		)		(43	)%
Earnings before income taxes	338,201				192,410				145,791				76	%
Provision for income taxes	(67,253		)		(46,361		)		20,892				45	%
Net earnings	$	270,948			$	146,049			$	124,899			86	%
Earnings per common share:
Basic									Change $ or shares				Change %
Earnings per common share	$	7.17			$	3.83			$	3.34			87	%
Weighted average shares outstanding	37,763				38,119				(356		)		(1	)%
Diluted
Earnings per common share	$	7.04			$	3.76			$	3.28			87	%
Weighted average shares outstanding	38,491				38,841				(350		)		(1	)%

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

		September 30, 2020				December 31, 2019
Assets:
Cash and cash equivalents		$	609,979			$	319,466
Other receivables		96,702				88,492
Real estate (1)		2,741,016				2,744,361
Deposits on real estate under option or contract		62,967				50,901
Investments in unconsolidated entities		3,819				4,443
Property and equipment, net		42,730				50,606
Deferred tax asset		28,425				25,917
Prepaids, other assets and goodwill		101,680				114,063
Total assets		$	3,687,318			$	3,398,249
Liabilities:
Accounts payable		$	167,788			$	155,024
Accrued liabilities		274,371				226,008
Home sale deposits		25,509				24,246
Loans payable and other borrowings		23,031				22,876
Senior notes, net		996,770				996,105
Total liabilities		1,487,469				1,424,259
Stockholders' Equity:
Preferred stock		—				—
Common stock		377				382
Additional paid-in capital		460,268				505,352
Retained earnings		1,739,204				1,468,256
Total stockholders’ equity		2,199,849				1,973,990
Total liabilities and stockholders’ equity		$	3,687,318			$	3,398,249
(1) Real estate – Allocated costs:
Homes under contract under construction		$	967,222			$	564,762
Unsold homes, completed and under construction		395,151				686,948
Model homes		86,933				121,340
Finished home sites and home sites under development		1,291,710				1,371,311
Total real estate		$	2,741,016			$	2,744,361

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

	Three Months Ended September 30,								Nine Months Ended September 30,
	2020				2019				2020				2019
Depreciation and amortization	$	7,945			$	7,172			$	22,496			$	19,553
Summary of Capitalized Interest:
Capitalized interest, beginning of period	$	72,882			$	88,307			$	82,014			$	88,454
Interest incurred	16,103				21,319				50,188				64,227
Interest expensed	(55		)		(1,068		)		(2,176		)		(8,350		)
Interest amortized to cost of home and land closings	(21,380		)		(20,363		)		(62,476		)		(56,136		)
Capitalized interest, end of period	$	67,550			$	88,195			$	67,550			$	88,195
	September 30, 2020				December 31, 2019
Notes payable and other borrowings	$	1,019,801			$	1,018,981
Stockholders' equity	2,199,849				1,973,990
Total capital	$	3,219,650			$	2,992,971
Debt-to-capital	31.7		%		34.0		%
Notes payable and other borrowings	$	1,019,801			$	1,018,981
Less: cash and cash equivalents	(609,979		)		(319,466		)
Net debt	$	409,822			$	699,515
Stockholders’ equity	2,199,849				1,973,990
Total net capital	$	2,609,671			$	2,673,505
Net debt-to-capital	15.7		%		26.2		%

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

		Nine Months Ended September 30,
		2020				2019
Cash flows from operating activities:
Net earnings		$	270,948			$	146,049
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		22,496				19,553
Stock-based compensation		15,724				15,719
Equity in earnings from unconsolidated entities		(2,821		)		(8,934		)
Distribution of earnings from unconsolidated entities		2,449				11,261
Other		1,881				3,902
Changes in assets and liabilities:
Decrease/(increase) in real estate		9,080				(110,295		)
(Increase)/decrease in deposits on real estate under option or contract		(12,910		)		5,773
Decrease/(increase) in other receivables, prepaids and other assets		4,933				(3,108		)
Increase in accounts payable and accrued liabilities		60,039				84,632
Increase in home sale deposits		1,263				2,808
Net cash provided by operating activities		373,082				167,360
Cash flows from investing activities:
Investments in unconsolidated entities		(4		)		(1,112		)
Distributions of capital from unconsolidated entities		1,000				7,250
Purchases of property and equipment		(14,771		)		(18,376		)
Proceeds from sales of property and equipment		528				267
Maturities/sales of investments and securities		632				675
Payments to purchase investments and securities		(632		)		(675		)
Net cash used in investing activities		(13,247		)		(11,971		)
Cash flows from financing activities:
Repayment of loans payable and other borrowings		(8,509		)		(3,086		)
Repurchase of shares		(60,813		)		(8,957		)
Net cash used in financing activities		(69,322		)		(12,043		)
Net increase in cash and cash equivalents		290,513				143,346
Beginning cash and cash equivalents		319,466				311,466
Ending cash and cash equivalents		$	609,979			$	454,812

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

		Three Months Ended September 30,
		2020							2019
		Homes			Value				Homes			Value
Homes Closed:
Arizona		429			$	143,630			440			$	144,920
California		332			202,460				200			135,555
Colorado		183			88,199				169			85,674
West Region		944			434,289				809			366,149
Texas		1,059			349,907				810			278,744
Central Region		1,059			349,907				810			278,744
Florida		339			124,836				302			118,804
Georgia		178			62,921				139			46,984
North Carolina		295			98,322				206			77,696
South Carolina		78			25,502				75			23,768
Tennessee		111			37,444				78			27,040
East Region		1,001			349,025				800			294,292
Total		3,004			$	1,133,221			2,419			$	939,185
Homes Ordered:
Arizona		709			$	240,151			482			$	159,778
California		510			319,680				198			124,201
Colorado		188			88,972				156			74,498
West Region		1,407			648,803				836			358,477
Texas		1,183			395,453				649			217,648
Central Region		1,183			395,453				649			217,648
Florida		491			179,607				293			111,471
Georgia		172			62,541				138			47,527
North Carolina		386			132,988				188			69,017
South Carolina		90			28,140				55			17,520
Tennessee		122			40,948				99			36,735
East Region		1,261			444,224				773			282,270
Total		3,851			$	1,488,480			2,258			$	858,395

		Nine Months Ended September 30,
		2020							2019
		Homes			Value				Homes			Value
Homes Closed:
Arizona		1,315			$	437,233			1,126			$	368,762
California		787			487,605				464			304,846
Colorado		553			268,970				507			264,479
West Region		2,655			1,193,808				2,097			938,087
Texas		2,747			901,791				2,176			760,189
Central Region		2,747			901,791				2,176			760,189
Florida		942			357,233				809			321,364
Georgia		459			163,617				380			132,440
North Carolina		805			276,477				558			204,866
South Carolina		229			73,113				202			66,513
Tennessee		253			89,190				215			77,429
East Region		2,688			959,630				2,164			802,612
Total		8,090			$	3,055,229			6,437			$	2,500,888
Homes Ordered:
Arizona		2,016			$	654,579			1,521			$	493,391
California		1,250			769,251				572			368,194
Colorado		540			258,268				580			290,060
West Region		3,806			1,682,098				2,673			1,151,645
Texas		3,457			1,130,943				2,346			799,293
Central Region		3,457			1,130,943				2,346			799,293
Florida		1,198			435,411				925			369,503
Georgia		518			182,958				431			149,731
North Carolina		999			340,626				658			241,573
South Carolina		272			85,316				205			65,540
Tennessee		300			101,518				285			102,084
East Region		3,287			1,145,829				2,504			928,431
Total		10,550			$	3,958,870			7,523			$	2,879,369
Order Backlog:
Arizona		1,212			$	404,044			738			$	258,341
California		608			373,949				199			129,880
Colorado		183			87,047				258			129,167
West Region		2,003			865,040				1,195			517,388
Texas		1,758			602,709				1,151			413,229
Central Region		1,758			602,709				1,151			413,229
Florida		627			242,419				488			213,427
Georgia		192			69,204				174			63,730
North Carolina		413			143,741				277			104,162
South Carolina		114			36,723				92			31,474
Tennessee		135			45,145				142			53,623
East Region		1,481			537,232				1,173			466,416
Total		5,242			$	2,004,981			3,519			$	1,397,033

Meritage Homes Corporation and Subsidiaries
Operating Data
(Unaudited)

		Three Months Ended September 30,
		2020						2019
		Ending			Average			Ending			Average
Active Communities:
Arizona		35			36.5			37			38.5
California		20			24.0			24			22.0
Colorado		11			12.0			20			20.5
West Region		66			72.5			81			81.0
Texas		58			63.0			74			73.5
Central Region		58			63.0			74			73.5
Florida		34			35.0			36			36.0
Georgia		11			14.0			18			19.5
North Carolina		20			20.5			22			22.5
South Carolina		6			5.5			10			9.5
Tennessee		9			10.0			9			10.0
East Region		80			85.0			95			97.5
Total		204			220.5			250			252.0

		Nine Months Ended September 30,
		2020						2019
		Ending			Average			Ending			Average
Active Communities:
Arizona		35			34.3			37			38.5
California		20			25.3			24			20.5
Colorado		11			13.8			20			20.0
West Region		66			73.4			81			79.0
Texas		58			70.3			74			84.5
Central Region		58			70.3			74			84.5
Florida		34			34.4			36			33.5
Georgia		11			15.3			18			20.0
North Carolina		20			21.6			22			23.5
South Carolina		6			6.8			10			11.0
Tennessee		9			10.3			9			9.5
East Region		80			88.4			95			97.5
Total		204			232.1			250			261.0

About Meritage Homes Corporation
Meritage Homes is the seventh-largest public homebuilder in the United States, based on homes closed in 2019. 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 135,000 homes in its 35-year history, and has a reputation for its distinctive style, quality construction, and award-winning customer experience. Meritage is the industry leader in energy-efficient homebuilding and a seven-year recipient of the U.S. Environmental Protection Agency’s ENERGY STAR® Partner of the Year for Sustained Excellence Award 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 statements regarding health of the housing market and the potential adverse impacts of the COVID-19 pandemic, and projected full year 2020 home closings, home closing revenue, gross margins 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: disruptions to our business by COVID-19, fear of a similar event, and measures implemented by federal, state and local governments or health authorities to address it; the availability and cost of finished lots and undeveloped land; shortages in the availability and cost of labor; the ability of our potential buyers to sell their existing homes; changes in interest rates and the availability and pricing of residential mortgages; our exposure to information technology failures and security breaches; legislation related to tariffs; 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 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; our level of indebtedness; our ability to obtain financing if our credit ratings are downgraded; 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; 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, 2019 and our Form 10-Q for the quarter ended June 30, 2020 under the caption "Risk Factors," which can be found on our website at www.investors.meritagehomes.com.

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

FAQ

What were Meritage Homes' third quarter 2020 earnings results?

Meritage Homes reported net earnings of $109.1 million, a 56% increase year-over-year, with diluted EPS of $2.84, up 59%.

How much home closing revenue did Meritage Homes generate in Q3 2020?

The company generated home closing revenue of $1.13 billion, a 21% year-over-year increase.

What is the outlook for Meritage Homes in 2020?

Meritage Homes projects total home closings between 11,200-11,500 for 2020, with expected revenue of approximately $4.2-4.4 billion.

How many homes did Meritage Homes close in Q3 2020?

Meritage Homes closed 3,004 homes in the third quarter of 2020, a 24% increase compared to Q3 2019.

What were Meritage Homes' total home orders for Q3 2020?

The total home orders for Q3 2020 were 3,851, reflecting a 71% increase year-over-year.