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home / news releases / MTH - 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

MTH - 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

Meritage Homes Corporation

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



Stock Information
Company Name: Meritage Homes Corporation
Stock Symbol: MTH
Market: NYSE
Website: meritagehomes.com
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