Meritage Homes reports third quarter 2024 results
Meritage Homes (NYSE: MTH) reported Q3 2024 results with home closings up 8% year-over-year to 3,942 units, while home closing revenue decreased 2% to $1.6 billion. Net earnings were $196.0 million ($5.34 per diluted share), down 12% from prior year. The company achieved a record 145% backlog conversion rate with entry-level homes representing 93% of closings.
Home closing gross margin was 24.8%, down from 26.7% last year. The company maintained strong liquidity with $831.6 million in cash and a net debt-to-capital ratio of 8.8%. During Q3, Meritage repurchased shares worth $30.0 million and paid $27.1 million in dividends.
Meritage Homes (NYSE: MTH) ha riportato i risultati del terzo trimestre 2024, con le chiusure delle case in aumento dell'8% rispetto all'anno precedente, raggiungendo un totale di 3.942 unità, mentre i ricavi da chiusura case sono diminuiti del 2%, totalizzando 1,6 miliardi di dollari. Gli utili netti sono stati di 196,0 milioni di dollari (5,34 dollari per azione diluita), in calo del 12% rispetto all'anno precedente. L'azienda ha raggiunto un tasso record di conversione dell'ordine del 145%, con le case di entry-level che rappresentano il 93% delle chiusure.
Il margine lordo sulle chiusure delle case è stato del 24,8%, in diminuzione rispetto al 26,7% dell'anno scorso. L'azienda ha mantenuto una solida liquidità con 831,6 milioni di dollari in cassa e un rapporto debito-netto sul capitale dell'8,8%. Durante il terzo trimestre, Meritage ha riacquistato azioni per un valore di 30,0 milioni di dollari e ha pagato 27,1 milioni di dollari in dividendi.
Meritage Homes (NYSE: MTH) reportó los resultados del tercer trimestre de 2024, con cierres de viviendas en aumento del 8% interanual, alcanzando un total de 3,942 unidades, mientras que los ingresos por cierres de viviendas disminuyeron un 2%, totalizando 1.6 mil millones de dólares. Las ganancias netas fueron de 196.0 millones de dólares (5.34 dólares por acción diluida), una disminución del 12% en comparación con el año anterior. La compañía logró una tasa récord de conversión de backlog del 145%, con las viviendas de nivel de entrada representando el 93% de los cierres.
El margen bruto de cierre de viviendas fue del 24.8%, en comparación con el 26.7% del año pasado. La compañía mantuvo una fuerte liquidez con 831.6 millones de dólares en efectivo y un ratio de deuda neta sobre capital del 8.8%. Durante el tercer trimestre, Meritage recompró acciones por un valor de 30.0 millones de dólares y pagó 27.1 millones de dólares en dividendos.
Meritage Homes (NYSE: MTH)가 2024년 3분기 결과를 보고했습니다. 주택 마감은 전년 대비 8% 증가하여 3,942유닛에 달했으며, 주택 마감 수익은 2% 감소하여 16억 달러에 이르렀습니다. 순이익은 1억 9,600만 달러(희석 주당 5.34달러)로, 전년 대비 12% 감소했습니다. 이 회사는 기록적인 145%의 주문 수익 전환율을 달성했으며, 입주 가능한 주택이 마감의 93%를 차지했습니다.
주택 마감 총 마진은 24.8%로, 지난해의 26.7%에서 감소했습니다. 이 회사는 8억 3,160만 달러의 현금을 보유하고 있으며, 순부채 대 자본 비율은 8.8%로 안정적인 유동성을 유지하고 있습니다. 3분기 동안 Meritage는 3천만 달러 규모의 자사주를 매입하고 2천7백10만 달러의 배당금을 지급했습니다.
Meritage Homes (NYSE: MTH) a publié ses résultats pour le troisième trimestre 2024, montrant une augmentation de 8% des ventes de maisons par rapport à l'année précédente, avec un total de 3 942 unités, alors que le chiffre d'affaires des ventes de maisons a diminué de 2% pour atteindre 1,6 milliard de dollars. Le bénéfice net s'est élevé à 196,0 millions de dollars (5,34 dollars par action diluée), en baisse de 12% par rapport à l'année précédente. L'entreprise a atteint un taux record de 145% de conversion de son carnet de commandes, les maisons d'entrée de gamme représentant 93% des ventes.
La marge brute des ventes de maisons était de 24,8%, en baisse par rapport à 26,7% l'année dernière. L'entreprise a maintenu une forte liquidité avec 831,6 millions de dollars en liquidités et un ratio de dette nette sur capital de 8,8%. Au cours du troisième trimestre, Meritage a racheté des actions pour une valeur de 30,0 millions de dollars et a versé 27,1 millions de dollars en dividendes.
Meritage Homes (NYSE: MTH) hat die Ergebnisse für das dritte Quartal 2024 veröffentlicht, wobei die Hausabschlüsse im Jahresvergleich um 8% auf 3.942 Einheiten gestiegen sind, während die Einnahmen aus den Hausabschlüssen um 2% auf 1,6 Milliarden Dollar gesunken sind. Der Nettogewinn betrug 196,0 Millionen Dollar (5,34 Dollar pro verwässerter Aktie), was einem Rückgang von 12% im Vergleich zum Vorjahr entspricht. Das Unternehmen erzielte eine Rekord-Konvertierungsrate von 145% im Auftragsbestand, wobei Einfamilienhäuser 93% der Abschlüsse ausmachten.
Die Bruttomarge für Hausabschlüsse lag bei 24,8%, was einem Rückgang gegenüber 26,7% im Vorjahr entspricht. Das Unternehmen hatte eine starke Liquidität mit 831,6 Millionen Dollar in bar und einem Netto-Schulden-zu-Kapital-Verhältnis von 8,8%. Im dritten Quartal kaufte Meritage Aktien im Wert von 30,0 Millionen Dollar zurück und zahlte 27,1 Millionen Dollar an Dividenden aus.
- 8% increase in home closing volume to 3,942 units
- Record 145% backlog conversion rate
- Strong liquidity position with $831.6 million cash
- Low net debt-to-capital ratio of 8.8%
- 15% increase in YTD home closing volume
- 2% decrease in Q3 home closing revenue to $1.6 billion
- 12% decline in Q3 net earnings to $196 million
- 190 basis points decline in home closing gross margin to 24.8%
- 37% decrease in ending backlog units
- 40% decrease in ending backlog value
Insights
The Q3 2024 results show mixed performance for Meritage Homes. While home closings increased
Key concerns include declining margins, with home closing gross margin dropping 190 basis points to
The company's focus on capital allocation through land investments (
The housing market dynamics are reflected in MTH's performance metrics. The
The company's strategy aligns with current market conditions, focusing on affordable housing where demand remains more resilient. The expansion of controlled lots to 74,800 (up from 60,700 year-over-year) positions MTH for future growth, though higher lot costs are impacting margins. The guidance for Q4 suggests cautious optimism with expected gross margins of
SCOTTSDALE, Ariz., Oct. 29, 2024 (GLOBE NEWSWIRE) -- Meritage Homes Corporation (NYSE: MTH), the fifth-largest U.S. homebuilder, reported third quarter results for the period ended September 30, 2024.
Summary Operating Results (unaudited) (Dollars in thousands, except per share amounts) | |||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2024 | 2023 | % Chg | 2024 | 2023 | % Chg | ||||||||||||||||||
Homes closed (units) | 3,942 | 3,638 | 8 | % | 11,567 | 10,025 | 15 | % | |||||||||||||||
Home closing revenue | $ | 1,585,784 | $ | 1,610,317 | (2 | )% | $ | 4,745,618 | $ | 4,415,261 | 7 | % | |||||||||||
Average sales price — closings | $ | 402 | $ | 443 | (9 | )% | $ | 410 | $ | 440 | (7 | )% | |||||||||||
Home orders (units) | 3,512 | 3,474 | 1 | % | 11,302 | 10,301 | 10 | % | |||||||||||||||
Home order value | $ | 1,425,610 | $ | 1,495,542 | (5 | )% | $ | 4,630,261 | $ | 4,477,148 | 3 | % | |||||||||||
Average sales price — orders | $ | 406 | $ | 430 | (6 | )% | $ | 410 | $ | 435 | (6 | )% | |||||||||||
Ending backlog (units) | 2,284 | 3,608 | (37 | )% | |||||||||||||||||||
Ending backlog value | $ | 931,656 | $ | 1,558,637 | (40 | )% | |||||||||||||||||
Average sales price — backlog | $ | 408 | $ | 432 | (6 | )% | |||||||||||||||||
Earnings before income taxes | $ | 249,932 | $ | 285,734 | (13 | )% | $ | 781,308 | $ | 690,561 | 13 | % | |||||||||||
Net earnings | $ | 195,966 | $ | 221,760 | (12 | )% | $ | 613,537 | $ | 539,897 | 14 | % | |||||||||||
Diluted EPS | $ | 5.34 | $ | 5.98 | (11 | )% | $ | 16.72 | $ | 14.55 | 15 | % | |||||||||||
MANAGEMENT COMMENTS
"Our solid third quarter 2024 results reflected the pivot in our strategy to affordable, quick-turning move-in ready homes, which generated
"With nearly
“Our capital allocation in the third quarter of 2024 continued to focus on both investing in growth and returning cash to shareholders. Our land acquisition and development spend totaled
THIRD QUARTER RESULTS
- Orders of 3,512 homes for the third quarter of 2024 slightly increased
1% year-over-year with both average community count and average absorption pace relatively consistent across the third quarter periods in 2024 and 2023. Third quarter 2024 average sales price ("ASP") on orders of$406,000 was down6% from the third quarter of 2023 due to product and geographic mix shift as well as increased financing incentive costs. Entry-level represented92% of third quarter 2024 sales orders, compared to88% in the prior year.
- The
2% year-over-year decrease in home closing revenue in the third quarter of 2024 to$1.6 billion was the result of8% higher home closing volume offset by a9% decrease in ASP on closings due to product and geographic mix. Third quarter 2024 closing ASP reflected higher utilization of financing incentives compared to prior year, although the per-home financing incentive cost was lower. Entry-level represented93% of third quarter 2024 home closings, compared to86% in the prior year.
- Home closing gross margin of
24.8% decreased 190 bps in the third quarter of 2024 from26.7% in the prior year due to higher lot costs, increased utilization of financing incentives and less leverage of fixed costs on lower home closing revenue, which were partially offset by cost savings and shorter construction cycle times.
- The financial services profit of
$3.1 million included$3.0 million in write-offs related to rate lock unwind costs in the third quarter of 2024. The financial services profit of$5.7 million in the third quarter of 2023 had no similar write-offs.
- Selling, general and administrative expenses ("SG&A") as a percentage of third quarter 2024 home closing revenue of
9.9% improved from10.1% in the third quarter of 2023, due primarily to lower performance-based compensation costs.
- In the third quarter of 2023, we recognized a loss on early extinguishment of debt of
$0.9 million in connection with the$150.0 million partial redemption of our6.00% senior notes due 2025 (the "2025 Notes"). There were no such redemptions in the third quarter of 2024.
- The third quarter effective income tax rate was
21.6% in 2024 compared to22.4% in 2023. The Company's tax rates in both periods benefited from earned eligible energy tax credits on qualifying homes under the Inflation Reduction Act ("IRA").
- Net earnings were
$196.0 million ($5.34 per diluted share) for the third quarter of 2024, a12% decrease from$221.8 million ($5.98 per diluted share) for the third quarter of 2023, mainly resulting from lower home closing revenue and gross profit.
YEAR TO DATE RESULTS
- Total sales orders for the first nine months of 2024 increased
10% over the prior year, driven entirely by a10% increase in average absorption pace compared to the first nine months of 2023.
- Home closing revenue increased
7% in the first nine months of 2024 to$4.7 billion , reflecting a15% increase in home closing volume that was partially offset by a7% decrease in ASP on closings due to product and geographic mix. ASP on closings for the first nine months of 2024 reflected greater utilization of financing incentives compared to prior year, although the per-home financing incentive cost was lower.
- Home closing gross margin improved 80 bps to
25.5% in the first nine months of 2024 from24.7% in the prior year, primarily resulting from lower direct costs, greater leverage of fixed costs on higher home closing revenue and shorter construction cycle times, which were partially offset by higher lot cost.
- The financial services profit of
$7.2 million included$10.9 million in write-offs related to rate lock unwind costs in the first nine months of 2024. This compared to financial services profit of$6.1 million in the first nine months of 2023 that had$9.8 million in similar write-offs.
- SG&A expenses of
9.8% of home closing revenue improved from10.0% in the prior year due to greater leverage on higher home closing revenue and lower performance-based compensation costs.
- In the first nine months of 2024, other income, net totaled
$31.2 million , compared to$35.0 million in the prior year, mainly as a result of less interest income earned on a lower cash balance.
- In the first nine months of 2024, we recognized a loss on early extinguishment of debt of
$0.6 million in connection with the$250.0 million redemption of the 2025 Notes. In the first nine months of 2023, we recognized a loss on early extinguishment of debt of$0.9 million in connection with the$150.0 million partial redemption of the 2025 Notes.
- The effective tax rate for the first nine months of 2024 and 2023 was
21.5% and21.8% , respectively. The Company's tax rates in both periods benefited from earned eligible energy tax credits on qualifying homes under the IRA.
- Net earnings were
$613.5 million ($16.72 per diluted share) for the first nine months of 2024, a14% increase from$539.9 million ($14.55 per diluted share) for the first nine months of 2023, primarily reflecting higher home closing revenue and gross profit, as well as lower SG&A as a percentage of home closing revenue.
BALANCE SHEET & LIQUIDITY
- Cash and cash equivalents at September 30, 2024 totaled
$831.6 million , compared to$921.2 million at December 31, 2023.
- Land acquisition and development spend totaled
$659.4 million for the third quarter of 2024, compared to$537.2 million for the third quarter of 2023.
- Approximately 74,800 lots were owned or controlled as of September 30, 2024, compared to approximately 60,700 total lots as of September 30, 2023. Nearly 7,800 net new lots were added in the third quarter of 2024, representing an estimated 48 future communities.
- Third quarter 2024 ending community count was 278 compared to 287 at June 30, 2024 and 272 at September 30, 2023.
- Debt-to-capital and net debt-to-capital ratios were
20.7% and8.8% , respectively, at September 30, 2024, which compared to17.9% and1.9% , respectively, at December 31, 2023.
- The Company declared and paid quarterly cash dividends of
$0.75 per share totaling$27.1 million in the third quarter of 2024, up from$0.27 per share totaling$9.8 million in the third quarter of 2023. Year-to-date dividends paid were$81.6 million and$29.7 million in 2024 and 2023, respectively.
- During the third quarter of 2024, the Company repurchased 151,220 shares of stock, or
0.4% of shares outstanding at the beginning of the quarter, for$30.0 million . For the first nine months of 2024, the Company repurchased 513,639 shares of stock, or1.4% of shares outstanding at the beginning of the year, for a total of$85.9 million . As of September 30, 2024,$99.1 million remained available to repurchase under the authorized share repurchase program.
GUIDANCE
The Company is providing the following guidance for the fourth quarter of 2024, based on year to date results and current market conditions:
Fourth Quarter 2024 | |
Home closing volume | 3,750-3,950 units |
Home closing revenue | |
Home closing gross margin | 22.5 |
Effective tax rate | Approximately |
Diluted EPS | |
CONFERENCE CALL
Management will host a conference call to discuss its third quarter 2024 results at 8:00 a.m. Pacific Time (11:00 a.m. Eastern Time) on Wednesday, October 30, 2024. To listen, please go to Meritage's Investor Relations page for the live webcast or dial in to 1-877-407-6951 US toll free or 1-412-902-0046. A replay will be available on the Investor Relations page.
* The Company's return on equity is calculated as net income for the trailing twelve months divided by average total stockholders' equity for the trailing five quarters. The Company's book value per share is calculated as total stockholders' equity as of the last day of the period divided by the shares outstanding as of the last day of the period.
Meritage Homes Corporation and Subsidiaries Consolidated Income Statements (In thousands, except per share data) (Unaudited) | |||||||||||||||
Three Months Ended September 30, | |||||||||||||||
2024 | 2023 | Change $ | Change % | ||||||||||||
Homebuilding: | |||||||||||||||
Home closing revenue | $ | 1,585,784 | $ | 1,610,317 | $ | (24,533 | ) | (2 | )% | ||||||
Land closing revenue | 2,665 | 2,783 | (118 | ) | (4 | )% | |||||||||
Total closing revenue | 1,588,449 | 1,613,100 | (24,651 | ) | (2 | )% | |||||||||
Cost of home closings | (1,193,219 | ) | (1,180,742 | ) | 12,477 | 1 | % | ||||||||
Cost of land closings | (1,985 | ) | (2,535 | ) | (550 | ) | (22 | )% | |||||||
Total cost of closings | (1,195,204 | ) | (1,183,277 | ) | 11,927 | 1 | % | ||||||||
Home closing gross profit | 392,565 | 429,575 | (37,010 | ) | (9 | )% | |||||||||
Land closing gross profit | 680 | 248 | 432 | 174 | % | ||||||||||
Total closing gross profit | 393,245 | 429,823 | (36,578 | ) | (9 | )% | |||||||||
Financial Services: | |||||||||||||||
Revenue | 8,070 | 6,109 | 1,961 | 32 | % | ||||||||||
Expense | (3,706 | ) | (2,871 | ) | 835 | 29 | % | ||||||||
(Loss)/earnings from financial services unconsolidated entities and other, net | (1,263 | ) | 2,462 | (3,725 | ) | (151 | )% | ||||||||
Financial services profit | 3,101 | 5,700 | (2,599 | ) | (46 | )% | |||||||||
Commissions and other sales costs | (97,898 | ) | (99,122 | ) | (1,224 | ) | (1 | )% | |||||||
General and administrative expenses | (59,198 | ) | (63,091 | ) | (3,893 | ) | (6 | )% | |||||||
Interest expense | — | — | — | — | % | ||||||||||
Other income, net | 10,682 | 13,331 | (2,649 | ) | (20 | )% | |||||||||
Loss on early extinguishment of debt | — | (907 | ) | (907 | ) | n/a | |||||||||
Earnings before income taxes | 249,932 | 285,734 | (35,802 | ) | (13 | )% | |||||||||
Provision for income taxes | (53,966 | ) | (63,974 | ) | (10,008 | ) | (16 | )% | |||||||
Net earnings | $ | 195,966 | $ | 221,760 | $ | (25,794 | ) | (12 | )% | ||||||
Earnings per common share: | |||||||||||||||
Basic | Change $ or shares | Change % | |||||||||||||
Earnings per common share | $ | 5.41 | $ | 6.06 | $ | (0.65 | ) | (11 | )% | ||||||
Weighted average shares outstanding | 36,226 | 36,603 | (377 | ) | (1 | )% | |||||||||
Diluted | |||||||||||||||
Earnings per common share | $ | 5.34 | $ | 5.98 | $ | (0.64 | ) | (11 | )% | ||||||
Weighted average shares outstanding | 36,669 | 37,078 | (409 | ) | (1 | )% | |||||||||
Meritage Homes Corporation and Subsidiaries Consolidated Income Statements (In thousands, except per share data) (Unaudited) | |||||||||||||||
Nine Months Ended September 30, | |||||||||||||||
2024 | 2023 | Change $ | Change % | ||||||||||||
Homebuilding: | |||||||||||||||
Home closing revenue | $ | 4,745,618 | $ | 4,415,261 | $ | 330,357 | 7 | % | |||||||
Land closing revenue | 4,970 | 44,547 | (39,577 | ) | (89 | )% | |||||||||
Total closing revenue | 4,750,588 | 4,459,808 | 290,780 | 7 | % | ||||||||||
Cost of home closings | (3,535,589 | ) | (3,326,245 | ) | 209,344 | 6 | % | ||||||||
Cost of land closings | (4,283 | ) | (42,682 | ) | (38,399 | ) | (90 | )% | |||||||
Total cost of closings | (3,539,872 | ) | (3,368,927 | ) | 170,945 | 5 | % | ||||||||
Home closing gross profit | 1,210,029 | 1,089,016 | 121,013 | 11 | % | ||||||||||
Land closing gross profit | 687 | 1,865 | (1,178 | ) | (63 | )% | |||||||||
Total closing gross profit | 1,210,716 | 1,090,881 | 119,835 | 11 | % | ||||||||||
Financial Services: | |||||||||||||||
Revenue | 22,734 | 18,050 | 4,684 | 26 | % | ||||||||||
Expense | (10,633 | ) | (8,910 | ) | 1,723 | 19 | % | ||||||||
Loss from financial services unconsolidated entities and other, net | (4,853 | ) | (3,074 | ) | 1,779 | 58 | % | ||||||||
Financial services profit | 7,248 | 6,066 | 1,182 | 19 | % | ||||||||||
Commissions and other sales costs | (304,113 | ) | (277,766 | ) | 26,347 | 9 | % | ||||||||
General and administrative expenses | (163,114 | ) | (162,750 | ) | 364 | — | % | ||||||||
Interest expense | — | — | — | — | % | ||||||||||
Other income, net | 31,202 | 35,037 | (3,835 | ) | (11 | )% | |||||||||
Loss on early extinguishment of debt | (631 | ) | (907 | ) | (276 | ) | (30 | )% | |||||||
Earnings before income taxes | 781,308 | 690,561 | 90,747 | 13 | % | ||||||||||
Provision for income taxes | (167,771 | ) | (150,664 | ) | 17,107 | 11 | % | ||||||||
Net earnings | $ | 613,537 | $ | 539,897 | $ | 73,640 | 14 | % | |||||||
Earnings per common share: | |||||||||||||||
Basic | Change $ or shares | Change % | |||||||||||||
Earnings per common share | $ | 16.91 | $ | 14.72 | $ | 2.19 | 15 | % | |||||||
Weighted average shares outstanding | 36,286 | 36,677 | (391 | ) | (1 | )% | |||||||||
Diluted | |||||||||||||||
Earnings per common share | $ | 16.72 | $ | 14.55 | $ | 2.17 | 15 | % | |||||||
Weighted average shares outstanding | 36,701 | 37,109 | (408 | ) | (1 | )% | |||||||||
Meritage Homes Corporation and Subsidiaries Consolidated Balance Sheets (In thousands, except share data) (Unaudited) | |||||||
September 30, 2024 | December 31, 2023 | ||||||
Assets: | |||||||
Cash and cash equivalents | $ | 831,559 | $ | 921,227 | |||
Other receivables | 286,939 | 266,972 | |||||
Real estate (1) | 5,457,103 | 4,721,291 | |||||
Deposits on real estate under option or contract | 207,461 | 111,364 | |||||
Investments in unconsolidated entities | 18,217 | 17,170 | |||||
Property and equipment, net | 47,231 | 48,953 | |||||
Deferred tax asset, net | 51,146 | 47,573 | |||||
Prepaids, other assets and goodwill | 203,796 | 218,584 | |||||
Total assets | $ | 7,103,452 | $ | 6,353,134 | |||
Liabilities: | |||||||
Accounts payable | $ | 287,403 | $ | 271,650 | |||
Accrued liabilities | 439,871 | 424,764 | |||||
Home sale deposits | 32,133 | 36,605 | |||||
Loans payable and other borrowings | 9,306 | 13,526 | |||||
Senior and convertible senior notes, net | 1,304,949 | 994,689 | |||||
Total liabilities | 2,073,662 | 1,741,234 | |||||
Stockholders' Equity: | |||||||
Preferred stock | — | — | |||||
Common stock, par value | 362 | 364 | |||||
Additional paid-in capital | 176,929 | 290,955 | |||||
Retained earnings | 4,852,499 | 4,320,581 | |||||
Total stockholders’ equity | 5,029,790 | 4,611,900 | |||||
Total liabilities and stockholders’ equity | $ | 7,103,452 | $ | 6,353,134 | |||
(1) Real estate – Allocated costs: | |||||||
Homes under contract under construction | $ | 719,430 | $ | 704,206 | |||
Unsold homes, completed and under construction | 1,599,921 | 1,260,855 | |||||
Model homes | 114,079 | 118,252 | |||||
Finished home sites and home sites under development | 3,023,673 | 2,637,978 | |||||
Total real estate | $ | 5,457,103 | $ | 4,721,291 | |||
Meritage Homes Corporation and Subsidiaries Consolidated Statements of Cash Flows (In thousands) (Unaudited) | |||||||
Nine Months Ended September 30, | |||||||
2024 | 2023 | ||||||
Cash flows from operating activities: | |||||||
Net earnings | $ | 613,537 | $ | 539,897 | |||
Adjustments to reconcile net earnings to net cash (used in)/provided by operating activities: | |||||||
Depreciation and amortization | 19,358 | 17,576 | |||||
Stock-based compensation | 19,305 | 16,557 | |||||
Loss on early extinguishment of debt | 631 | 907 | |||||
Equity in earnings from unconsolidated entities | (3,925 | ) | (4,651 | ) | |||
Distribution of earnings from unconsolidated entities | 4,005 | 5,158 | |||||
Other | 15,093 | 1,408 | |||||
Changes in assets and liabilities: | |||||||
Increase in real estate | (723,835 | ) | (137,543 | ) | |||
Increase in deposits on real estate under option or contract | (96,404 | ) | (17,027 | ) | |||
Decrease/(increase) in other receivables, prepaids and other assets | 7,307 | (9,447 | ) | ||||
Increase in accounts payable and accrued liabilities | 21,387 | 37,085 | |||||
(Decrease)/increase in home sale deposits | (4,472 | ) | 10,172 | ||||
Net cash (used in)/provided by operating activities | (128,013 | ) | 460,092 | ||||
Cash flows from investing activities: | |||||||
Investments in unconsolidated entities | (10,442 | ) | (3,859 | ) | |||
Distributions of capital from unconsolidated entities | — | 43 | |||||
Purchases of property and equipment | (21,174 | ) | (31,221 | ) | |||
Proceeds from sales of property and equipment | 179 | 334 | |||||
Maturities/sales of investments and securities | 750 | 750 | |||||
Payments to purchase investments and securities | (750 | ) | (750 | ) | |||
Net cash used in investing activities | (31,437 | ) | (34,703 | ) | |||
Cash flows from financing activities: | |||||||
Repayment of loans payable and other borrowings | (7,850 | ) | (2,616 | ) | |||
Repayment of senior notes | (250,695 | ) | (150,884 | ) | |||
Proceeds from issuance of convertible senior notes | 575,000 | — | |||||
Payment of debt issuance costs | (17,332 | ) | — | ||||
Purchase of capped calls related to issuance of convertible senior notes | (61,790 | ) | — | ||||
Dividends paid | (81,619 | ) | (29,695 | ) | |||
Repurchase of shares | (85,932 | ) | (55,000 | ) | |||
Net cash provided by/(used in) financing activities | 69,782 | (238,195 | ) | ||||
Net (decrease)/increase in cash and cash equivalents | (89,668 | ) | 187,194 | ||||
Beginning cash and cash equivalents | 921,227 | 861,561 | |||||
Ending cash and cash equivalents | $ | 831,559 | $ | 1,048,755 | |||
Meritage Homes Corporation and Subsidiaries
Operating Data
(Dollars in thousands)
(Unaudited)
We aggregate our homebuilding operating segments into reporting segments based on similar long-term economic characteristics and geographical proximity. Our three reportable homebuilding segments are as follows:
- West: Arizona, California, Colorado, and Utah
- Central: Texas
- East: Florida, Georgia, North Carolina, South Carolina, and Tennessee
Three Months Ended September 30, | |||||||||||||||
2024 | 2023 | ||||||||||||||
Homes | Value | Homes | Value | ||||||||||||
Homes Closed: | |||||||||||||||
West Region | 1,220 | $ | 594,509 | 1,172 | $ | 606,833 | |||||||||
Central Region | 1,174 | 416,802 | 1,102 | 452,687 | |||||||||||
East Region | 1,548 | 574,473 | 1,364 | 550,797 | |||||||||||
Total | 3,942 | $ | 1,585,784 | 3,638 | $ | 1,610,317 | |||||||||
Homes Ordered: | |||||||||||||||
West Region | 1,067 | $ | 521,029 | 985 | $ | 521,049 | |||||||||
Central Region | 1,031 | 366,524 | 1,099 | 425,165 | |||||||||||
East Region | 1,414 | 538,057 | 1,390 | 549,328 | |||||||||||
Total | 3,512 | $ | 1,425,610 | 3,474 | $ | 1,495,542 | |||||||||
Nine Months Ended September 30, | |||||||||||||||
2024 | 2023 | ||||||||||||||
Homes | Value | Homes | Value | ||||||||||||
Homes Closed: | |||||||||||||||
West Region | 3,499 | $ | 1,732,978 | 2,954 | $ | 1,543,372 | |||||||||
Central Region | 3,606 | 1,303,547 | 3,244 | 1,334,368 | |||||||||||
East Region | 4,462 | 1,709,093 | 3,827 | 1,537,521 | |||||||||||
Total | 11,567 | $ | 4,745,618 | 10,025 | $ | 4,415,261 | |||||||||
Homes Ordered: | |||||||||||||||
West Region | 3,351 | $ | 1,659,130 | 3,261 | $ | 1,672,310 | |||||||||
Central Region | 3,441 | 1,248,561 | 3,237 | 1,286,063 | |||||||||||
East Region | 4,510 | 1,722,570 | 3,803 | 1,518,775 | |||||||||||
Total | 11,302 | 4,630,261 | 10,301 | 4,477,148 | |||||||||||
Order Backlog: | |||||||||||||||
West Region | 598 | $ | 286,336 | 1,179 | $ | 579,787 | |||||||||
Central Region | 603 | 223,865 | 956 | 370,279 | |||||||||||
East Region | 1,083 | 421,455 | 1,473 | 608,571 | |||||||||||
Total | 2,284 | $ | 931,656 | 3,608 | $ | 1,558,637 | |||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||||||||||
Ending | Average | Ending | Average | Ending | Average | Ending | Average | ||||||||||||||||||||||||
Active Communities: | |||||||||||||||||||||||||||||||
West Region | 86 | 85.5 | 84 | 91.0 | 86 | 83.2 | 84 | 93.1 | |||||||||||||||||||||||
Central Region | 72 | 74.0 | 82 | 82.0 | 72 | 79.2 | 82 | 81.8 | |||||||||||||||||||||||
East Region | 120 | 123.0 | 106 | 108.5 | 120 | 115.7 | 106 | 103.5 | |||||||||||||||||||||||
Total | 278 | 282.5 | 272 | 281.5 | 278 | 278.1 | 272 | 278.4 | |||||||||||||||||||||||
Meritage Homes Corporation and Subsidiaries Supplement and Non-GAAP information (Unaudited) Supplemental Information (Dollars in thousands): | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Depreciation and amortization | $ | 6,546 | $ | 6,380 | $ | 19,358 | $ | 17,576 | |||||||
Summary of Capitalized Interest: | |||||||||||||||
Capitalized interest, beginning of period | $ | 54,327 | $ | 61,078 | $ | 54,516 | $ | 60,169 | |||||||
Interest incurred | 12,752 | 14,740 | 40,004 | 44,914 | |||||||||||
Interest expensed | — | — | — | — | |||||||||||
Interest amortized to cost of home and land closings | (13,348 | ) | (17,342 | ) | (40,789 | ) | (46,607 | ) | |||||||
Capitalized interest, end of period | $ | 53,731 | $ | 58,476 | $ | 53,731 | $ | 58,476 | |||||||
Reconciliation of Non-GAAP Information (Dollars in thousands): | |||||||
Debt-to-Capital Ratios | |||||||
September 30, 2024 | December 31, 2023 | ||||||
Senior and convertible senior notes, net, loans payable and other borrowings | $ | 1,314,255 | $ | 1,008,215 | |||
Stockholders' equity | 5,029,790 | 4,611,900 | |||||
Total capital | $ | 6,344,045 | $ | 5,620,115 | |||
Debt-to-capital | 20.7 | % | 17.9 | % | |||
Senior and convertible senior notes, net, loans payable and other borrowings | $ | 1,314,255 | $ | 1,008,215 | |||
Less: cash and cash equivalents | (831,559 | ) | (921,227 | ) | |||
Net debt | $ | 482,696 | $ | 86,988 | |||
Stockholders’ equity | 5,029,790 | 4,611,900 | |||||
Total net capital | $ | 5,512,486 | $ | 4,698,888 | |||
Net debt-to-capital (1) | 8.8 | % | 1.9 | % |
(1) | Net debt-to-capital reflects certain adjustments to the debt-to-capital ratio and is defined as net debt (debt less cash and cash equivalents) divided by total capital (net debt plus stockholders' equity). Net debt-to-capital is considered a non-GAAP financial measure and should be considered in addition to, rather than as a substitute for, the comparable GAAP financial measures. We believe this non-GAAP financial measure is relevant and useful to investors in understanding our operating results and may be helpful in comparing the Company with other companies in the homebuilding industry to the extent they provide similar information. We encourage investors to understand the methods used by other companies in the homebuilding industry to calculate non-GAAP financial measures and any adjustments thereto before comparing to our non-GAAP financial measures. |
About Meritage Homes Corporation
Meritage is the fifth-largest public homebuilder in the United States, based on homes closed in 2023. The Company offers energy-efficient and affordable entry-level and first move-up homes. Operations span across Arizona, California, Colorado, Utah, Texas, Florida, Georgia, North Carolina, South Carolina and Tennessee.
Meritage has delivered over 190,000 homes in its 38-year history, and has a reputation for its distinctive style, quality construction, and award-winning customer experience. The Company is an industry leader in energy-efficient homebuilding, an eleven-time recipient of the U.S. Environmental Protection Agency’s (EPA) ENERGY STAR® Partner of the Year for Sustained Excellence Award and Residential New Construction Market Leader Award, as well as a four-time recipient of the EPA's 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 and our future results including our ability to increase our market share and our fourth quarter 2024 projected home closing volume, home closing revenue, home closing gross margin, effective tax rate and diluted EPS.
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: increases in interest rates or decreases in mortgage availability, and the cost and use of rate locks and buy-downs; inflation in the cost of materials used to develop communities and construct homes; cancellation rates; supply chain and labor constraints; the ability of our potential buyers to sell their existing homes; our ability to acquire and develop lots may be negatively impacted if we are unable to obtain performance and surety bonds; the adverse effect of slow absorption rates; legislation related to tariffs; impairments of our real estate inventory; competition; home warranty and construction defect claims; failures in health and safety performance; fluctuations in quarterly operating results; our level of indebtedness; our exposure to counterparty risk with respect to our capped calls; our ability to obtain financing if our credit ratings are downgraded; our 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 money or option deposits; our limited geographic diversification; shortages in the availability and cost of subcontract labor; the replication of our energy-efficient technologies by our competitors; 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 of our employees and representatives to comply with laws and regulations; our compliance with government regulations; liabilities or restrictions resulting from regulations applicable to our financial services operations; negative publicity that affects our reputation; potential disruptions to our business by an epidemic or pandemic, 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, 2023 and our Form 10-Q for subsequent quarters under the caption "Risk Factors," which can be found on our website at https://investors.meritagehomes.com.
Contacts: | Emily Tadano, VP Investor Relations and ESG |
(480) 515-8979 (office) | |
investors@meritagehomes.com |
FAQ
What was Meritage Homes (MTH) earnings per share in Q3 2024?
How many homes did Meritage Homes (MTH) close in Q3 2024?
What was Meritage Homes (MTH) home closing revenue in Q3 2024?