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home / news releases / MTH - Meritage Homes reports second quarter 2022 results including the achievement of its 300 community goal a 55% increase in diluted EPS and a 430 bps increase in home closing gross margin over prior year

MTH - Meritage Homes reports second quarter 2022 results including the achievement of its 300 community goal a 55% increase in diluted EPS and a 430 bps increase in home closing gross margin over prior year

Meritage Homes Corporation

SCOTTSDALE, Ariz., July 27, 2022 (GLOBE NEWSWIRE) -- Meritage Homes Corporation (NYSE: MTH), a leading U.S. homebuilder, reported second quarter results for the period ended June 30, 2022.


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

Three Months Ended June 30,
Six Months Ended June 30,
2022
2021
% Chg
2022
2021
% Chg
Homes closed (units)
3,221
3,273
(2
)%
6,079
6,163
(1
)%
Home closing revenue
$
1,408,947
$
1,264,643
11
%
$
2,654,403
$
2,344,625
13
%
Average sales price - closings
$
437
$
386
13
%
$
437
$
380
15
%
Home orders (units)
3,767
3,542
6
%
7,641
7,000
9
%
Home order value
$
1,809,870
$
1,499,672
21
%
$
3,577,580
$
2,848,802
26
%
Average sales price - orders
$
480
$
423
13
%
$
468
$
407
15
%
Ending backlog (units)
7,241
5,509
31
%
Ending backlog value
$
3,438,853
$
2,317,534
48
%
Average sales price - backlog
$
475
$
421
13
%
Earnings before income taxes
$
331,695
$
215,651
54
%
$
617,578
$
381,628
62
%
Net earnings
$
250,084
$
167,389
49
%
$
467,338
$
299,232
56
%
Diluted EPS
$
6.77
$
4.36
55
%
$
12.55
$
7.80
61
%

MANAGEMENT COMMENTS

“We proudly achieved our long-term goal of 300 communities this quarter, ending June 2022 with 303 communities. This milestone reflects the high level of execution and dedication of our Meritage team amidst longstanding supply chain constraints and delays stemming from COVID-19, and we believe, will position us to expand our market share from incremental order and closing volume,” said Steven J. Hilton, executive chairman of Meritage Homes. “Our agile operating model led to strong second quarter 2022 results, including our highest second quarter sales order volume in company history, a 430 bps year-over-year quarterly home closing gross margin expansion to 31.6% and $1.4 billion in quarterly home closing revenue.”

“We believe that the ongoing low supply of housing inventory and favorable demographics continue to reflect positive factors for housing demand. However, we acknowledge the market is softening from unprecedented demand levels of the last two years, as rapidly increasing mortgage rates in a short amount of time are challenging affordability and buyer psychology. In addition to concerns about the general economy, greater difficulty to qualify for a mortgage and the return of regular seasonality, we are seeing a high preference for quick move-in inventory that can close in 90 days or less, which is primarily found in the existing home market today. We believe this desire for readily available product is exacerbating cancellations and the slowing in new home demand, and will continue to do so for another quarter or two, until our newly-started spec inventory is also available for a quick move-in,” said Phillippe Lord, chief executive officer of Meritage Homes.

“In the second quarter of 2022, we lifted sales order metering in most of our communities. Quarterly sales orders of 3,767 homes were 6% higher than prior year due to our 33% year-over-year increase in average community count. Despite some slowing demand, our second quarter 2022 average absorption pace was 4.4 per month, which was down from 5.5 per month in the second quarter of 2021 yet higher than our expected normalized average pace of 3-4 sales orders per month,” Mr. Lord continued.

“Our closings of 3,221 homes this quarter were just 52 shy of our highest second quarter of home closings, which occurred in 2021,” Mr. Lord remarked. “Our second quarter 2022 home closing revenue of $1.4 billion was 11% greater than last year, which combined with our record home closing gross margin and SG&A leverage of 8.3%, led to a 55% year-over-year increase in our diluted EPS from $4.36 to $6.77 this quarter.”

“During the quarter, we spent $422 million on land acquisition and development and at June 30, 2022, lot supply totaled about 71,000,” said Mr. Lord. “With our healthy balance sheet and ample liquidity, we believe we have flexibility for evolving market conditions. Our net debt-to-capital was 20.6% at June 30, 2022.”

Mr. Lord concluded, “Due to the lack of visibility into the market at this time, we are not providing full year 2022 guidance.”

SECOND QUARTER RESULTS

  • The total sales orders of 3,767 for the second quarter of 2022 reflect an increase of 6% year-over-year, driven by a 33% increase in average communities that was offset by a 20% decrease in average absorption pace from 5.5 to 4.4 per month. The lower absorption pace reflects both seasonality and slowing market demand. Entry-level represented 86% of second quarter 2022 orders, compared to 81% in the same quarter in 2021. Average sales price ("ASP") on orders surpassed $480,000 in the second quarter of 2022, which was an increase of 13% over the second quarter of 2021.
  • The 11% year-over-year increase in home closing revenue to $1.4 billion for the second quarter of 2022 was due to a 13% increase in ASPs on closings even as we continued our shift of product mix toward entry-level homes. This was partially offset by 2% lower home closing volume.
  • The 430 bps improvement in second quarter 2022 home closing gross margin to 31.6% from 27.3% a year ago mainly resulted from higher ASPs on closings that were also better leveraging lower cost of land for entry-level homes and other fixed construction costs—all of which more than offset higher commodity costs.
  • Selling, general and administrative expenses ("SG&A") were 8.3% of second quarter 2022 home closing revenue, a 100 bps improvement over 9.3% in the prior year. This improvement was due to greater leverage of fixed expenses on higher home closing revenue as well as lower commissions expense and the benefits of technology in our sales and marketing efforts.
  • In the second quarter of 2021, we recognized a loss on early extinguishment of debt of $18.2 million in connection with the early redemption in April 2021 of our 7.00% senior notes due 2022 ("2022 Notes").  There were no such transactions in the second quarter of 2022.
  • The second quarter effective income tax rate was 24.6% in 2022 compared to 22.4% in 2021. The higher rate in 2022 reflects the expiration of the 2019 Taxpayer Certainty and Disaster Tax Relief Act, under which we earned eligible energy tax credits on qualifying homes closed in 2021.
  • Second quarter 2022 pre-tax margin increased 660 bps to 23.4%, compared to 16.8% in the second quarter of 2021. Net earnings were $250.1 million ($6.77 per diluted share) for the second quarter of 2022, a 49% increase over $167.4 million ($4.36 per diluted share) for the second quarter of 2021. Strong earnings growth reflected pricing power, expanded gross margin and improved overhead leverage, which combined with a lower outstanding share count in the current quarter, led to a 55% year-over-year improvement in earnings per diluted share.

YEAR TO DATE RESULTS

  • Total sales orders for the first half of 2022 increased 9% over the prior year, driven by a 33% increase in average community count, partially offset by an 18% decrease in average absorption pace compared to the first half of 2021.
  • Home closing revenue increased 13% in the first half of 2022 to $2.7 billion due to a 15% increase in ASPs on closings given the favorable pricing environment on relatively flat home closing volume.
  • The 490 bps improvement for home closing gross margin in the first half of 2022 to 31.0% from 26.1% was primarily due to higher ASPs on closings resulting from favorable pricing and better leveraging of fixed costs on higher home closing revenue.
  • SG&A expenses improved 110 bps year-over-year to 8.4% of home closing revenue, compared to 9.5% in the first half of 2021, due to improved leverage of overhead expenses on higher home closing revenue as well as sales and marketing efficiencies gained from digital innovations.
  • In the first half of 2021, we recognized a loss on early extinguishment of debt of $18.2 million in connection with the early redemption in April 2021 of the 2022 Notes. There were no such transactions in the first half of 2022.
  • The effective tax rate for the first half of 2022 was 24.3%, compared to 21.6% for the first half of 2021. The higher rate in 2022 reflects the expiration of the tax credits available under the 2019 Taxpayer Certainty and Disaster Tax Relief Act.
  • Net earnings were $467.3 million ($12.55 per diluted share) for the first half of 2022, a 56% increase over $299.2 million ($7.80 per diluted share) for the first half of 2021, primarily reflecting pricing power, expanded gross margin and greater overhead leverage in 2022, as well as a lower outstanding share count in the first half of 2022.

BALANCE SHEET

  • Cash and cash equivalents at June 30, 2022 totaled $272.1 million, compared to $618.3 million at December 31, 2021, primarily as a result of investments in real estate and share repurchases. Real estate assets increased from $3.7 billion at December 31, 2021 to $4.5 billion at June 30, 2022.
  • A total of approximately 71,000 lots were owned or controlled as of June 30, 2022, compared to approximately 63,000 total lots at June 30, 2021. We added over 900 net new lots in the second quarter of 2022, representing an estimated 12 future communities, all of which are for entry-level homes.
  • Debt-to-capital and net debt-to-capital ratios were 25.3% and 20.6%, respectively, at June 30, 2022, which compared to 27.6% and 15.1%, respectively, at December 31, 2021.
  • The Company repurchased 1,166,040 shares of stock for a total of $109.3 million during the first half of 2022, of which 128,073 shares totaling $10.0 million were repurchased during the second quarter of 2022. As of June 30, 2022, $244.1 million remained available to repurchase under our authorized share repurchase program.

CONFERENCE CALL

Management will host a conference call to discuss its second quarter results at 8:00 a.m. Pacific Daylight Time (11:00 a.m. Eastern Daylight Time) on Thursday, July 28, 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. Pacific Daylight Time (2:00 p.m. Eastern Daylight Time) on July 28, 2022 and extending through August 11, 2022, at https://investors.meritagehomes.com.


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

Three Months Ended June 30,
2022
2021
Change $
Change %
Homebuilding:
Home closing revenue
$
1,408,947
$
1,264,643
$
144,304
11
%
Land closing revenue
3,434
12,956
(9,522
)
(73
)%
Total closing revenue
1,412,381
1,277,599
134,782
11
%
Cost of home closings
(964,208
)
(919,342
)
(44,866
)
5
%
Cost of land closings
(2,784
)
(13,288
)
10,504
(79
)%
Total cost of closings
(966,992
)
(932,630
)
(34,362
)
4
%
Home closing gross profit
444,739
345,301
99,438
29
%
Land closing gross profit/(loss)
650
(332
)
982
(296
)%
Total closing gross profit
445,389
344,969
100,420
29
%
Financial Services:
Revenue
5,139
5,665
(526
)
(9
)%
Expense
(2,581
)
(2,367
)
(214
)
9
%
Earnings from financial services unconsolidated entities and other, net
1,521
1,317
204
15
%
Financial services profit
4,079
4,615
(536
)
(12
)%
Commissions and other sales costs
(69,383
)
(73,889
)
4,506
(6
)%
General and administrative expenses
(47,932
)
(43,156
)
(4,776
)
11
%
Interest expense
—
(77
)
77
(100
)%
Other (expense)/income, net
(458
)
1,377
(1,835
)
(133
)%
Loss on early extinguishment of debt
—
(18,188
)
18,188
(100
)%
Earnings before income taxes
331,695
215,651
116,044
54
%
Provision for income taxes
(81,611
)
(48,262
)
(33,349
)
69
%
Net earnings
$
250,084
$
167,389
$
82,695
49
%
Earnings per common share:
Basic
Change $ or
shares
Change %
Earnings per common share
$
6.82
$
4.43
$
2.39
54
%
Weighted average shares outstanding
36,647
37,818
(1,171
)
(3
)%
Diluted
Earnings per common share
$
6.77
$
4.36
$
2.41
55
%
Weighted average shares outstanding
36,962
38,377
(1,415
)
(4
)%


Six Months Ended June 30,
2022
2021
Change $
Change %
Homebuilding:
Home closing revenue
$
2,654,403
$
2,344,625
$
309,778
13
%
Land closing revenue
44,912
16,755
28,157
168
%
Total closing revenue
2,699,315
2,361,380
337,935
14
%
Cost of home closings
(1,832,015
)
(1,732,669
)
(99,346
)
6
%
Cost of land closings
(33,469
)
(16,540
)
(16,929
)
102
%
Total cost of closings
(1,865,484
)
(1,749,209
)
(116,275
)
7
%
Home closing gross profit
822,388
611,956
210,432
34
%
Land closing gross profit
11,443
215
11,228
5222
%
Total closing gross profit
833,831
612,171
221,660
36
%
Financial Services:
Revenue
9,811
10,416
(605
)
(6
)%
Expense
(5,093
)
(4,538
)
(555
)
12
%
Earnings from financial services unconsolidated entities and other, net
2,695
2,497
198
8
%
Financial services profit
7,413
8,375
(962
)
(11
)%
Commissions and other sales costs
(134,923
)
(141,633
)
6,710
(5
)%
General and administrative expenses
(87,927
)
(81,105
)
(6,822
)
8
%
Interest expense
(41
)
(167
)
126
(75
)%
Other (expense)/income, net
(775
)
2,175
(2,950
)
(136
)%
Loss on early extinguishment of debt
—
(18,188
)
18,188
(100
)%
Earnings before income taxes
617,578
381,628
235,950
62
%
Provision for income taxes
(150,240
)
(82,396
)
(67,844
)
82
%
Net earnings
$
467,338
$
299,232
$
168,106
56
%
Earnings per common share:
Basic
Change $ or s
hares
Change %
Earnings per common share
$
12.69
$
7.93
$
4.76
60
%
Weighted average shares outstanding
36,820
37,731
(911
)
(2
)%
Diluted
Earnings per common share
$
12.55
$
7.80
$
4.75
61
%
Weighted average shares outstanding
37,239
38,357
(1,118
)
(3
)%

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

June 30, 2022
December 31, 2021
Assets:
Cash and cash equivalents
$
272,147
$
618,335
Other receivables
171,408
147,548
Real estate (1)
4,474,062
3,734,408
Real estate not owned
8,011
8,011
Deposits on real estate under option or contract
97,967
90,679
Investments in unconsolidated entities
11,223
5,764
Property and equipment, net
39,030
37,340
Deferred tax asset, net
41,271
40,672
Prepaids, other assets and goodwill
192,604
124,776
Total assets
$
5,307,723
$
4,807,533
Liabilities:
Accounts payable
$
341,717
$
216,009
Accrued liabilities
326,856
337,277
Home sale deposits
60,820
42,610
Liabilities related to real estate not owned
7,210
7,210
Loans payable and other borrowings
15,613
17,552
Senior notes, net
1,143,038
1,142,486
Total liabilities
1,895,254
1,763,144
Stockholders' Equity:
Preferred stock
—
—
Common stock
366
373
Additional paid-in capital
315,590
414,841
Retained earnings
3,096,513
2,629,175
Total stockholders’ equity
3,412,469
3,044,389
Total liabilities and stockholders’ equity
$
5,307,723
$
4,807,533
(1) Real estate – Allocated costs:
Homes under contract under construction
$
1,527,013
$
1,039,822
Unsold homes, completed and under construction
$
748,845
484,999
Model homes
$
89,539
81,049
Finished home sites and home sites under development
$
2,108,665
2,128,538
Total real estate
$
4,474,062
$
3,734,408

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

Three Months Ended June 30,
Six Months Ended June 30,
2022
2021
2022
2021
Depreciation and amortization
$
5,964
$
6,879
$
11,723
$
13,414
Summary of Capitalized Interest:
Capitalized interest, beginning of period
$
59,082
$
57,540
$
56,253
$
58,940
Interest incurred
15,171
16,321
30,384
32,413
Interest expensed
—
(77
)
(41
)
(167
)
Interest amortized to cost of home and land closings
(12,794
)
(17,074
)
(25,137
)
(34,476
)
Capitalized interest, end of period
$
61,459
$
56,710
$
61,459
$
56,710


June 30, 2022
December 31,
2021
Senior notes, net, loans payable and other borrowings
$
1,158,651
$
1,160,038
Stockholders' equity
3,412,469
3,044,389
Total capital
$
4,571,120
$
4,204,427
Debt-to-capital
25.3
%
27.6
%
Senior notes, net, loans payable and other borrowings
$
1,158,651
$
1,160,038
Less: cash and cash equivalents
(272,147
)
(618,335
)
Net debt
$
886,504
$
541,703
Stockholders’ equity
3,412,469
3,044,389
Total net capital
$
4,298,973
$
3,586,092
Net debt-to-capital
20.6
%
15.1
%

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

Six Months Ended June 30,
2022
2021
Cash flows from operating activities:
Net earnings
$
467,338
$
299,232
Adjustments to reconcile net earnings to net cash used in operating activities:
Depreciation and amortization
11,723
13,414
Stock-based compensation
10,045
8,590
Loss on early extinguishment of debt
—
18,188
Equity in earnings from unconsolidated entities
(2,145
)
(1,807
)
Distribution of earnings from unconsolidated entities
2,339
2,215
Other
(601
)
2,266
Changes in assets and liabilities:
Increase in real estate
(729,450
)
(469,733
)
Increase in deposits on real estate under option or contract
(7,288
)
(14,863
)
Increase in other receivables, prepaids and other assets
(90,419
)
(36,390
)
Increase in accounts payable and accrued liabilities
113,421
26,532
Increase in home sale deposits
18,210
8,884
Net cash used in operating activities
(206,827
)
(143,472
)
Cash flows from investing activities:
Investments in unconsolidated entities
(5,653
)
(1
)
Purchases of property and equipment
(12,852
)
(10,970
)
Proceeds from sales of property and equipment
247
292
Maturities/sales of investments and securities
1,032
2,697
Payments to purchase investments and securities
(1,032
)
(2,697
)
Net cash used in investing activities
(18,258
)
(10,679
)
Cash flows from financing activities:
Repayment of loans payable and other borrowings
(11,800
)
(5,758
)
Repayment of senior notes
—
(317,690
)
Proceeds from issuance of senior notes
—
450,000
Payment of debt issuance costs
—
(6,102
)
Repurchase of shares
(109,303
)
(27,546
)
Net cash (used in)/provided by financing activities
(121,103
)
92,904
Net decrease in cash and cash equivalents
(346,188
)
(61,247
)
Cash and cash equivalents, beginning of period
618,335
745,621
Cash and cash equivalents, end of period
$
272,147
$
684,374

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

Three Months Ended June 30,
2022
2021
Homes
Value
Homes
Value
Homes Closed:
Arizona
542
$
234,902
481
$
165,990
California
256
173,631
318
198,232
Colorado
127
77,545
145
74,987
West Region
925
486,078
944
439,209
Texas
1,048
422,327
1,154
403,838
Central Region
1,048
422,327
1,154
403,838
Florida
437
169,607
443
160,377
Georgia
179
81,227
171
62,477
North Carolina
359
148,860
330
119,838
South Carolina
132
44,365
81
28,209
Tennessee
141
56,483
150
50,695
East Region
1,248
500,542
1,175
421,596
Total
3,221
$
1,408,947
3,273
$
1,264,643
Homes Ordered:
Arizona
560
$
257,162
624
$
256,804
California
355
272,601
344
217,228
Colorado
160
102,464
181
104,134
West Region
1,075
632,227
1,149
578,166
Texas
1,096
491,394
1,101
428,375
Central Region
1,096
491,394
1,101
428,375
Florida
685
283,291
468
176,118
Georgia
225
107,388
193
77,309
North Carolina
391
178,463
390
153,032
South Carolina
144
50,716
88
32,595
Tennessee
151
66,391
153
54,077
East Regions
1,596
686,249
1,292
493,131
Total
3,767
$
1,809,870
3,542
$
1,499,672


Six Months Ended June 30,
2022
2021
Homes
Value
Homes
Value
Homes Closed:
Arizona
1,000
$
432,997
891
$
303,258
California
531
361,041
595
370,131
Colorado
258
155,464
320
159,250
West Region
1,789
949,502
1,806
832,639
Texas
1,921
770,155
2,117
722,223
Central Region
1,921
770,155
2,117
722,223
Florida
875
337,682
860
301,205
Georgia
306
137,661
317
117,616
North Carolina
656
267,864
629
226,851
South Carolina
253
84,078
166
56,055
Tennessee
279
107,461
268
88,036
East Region
2,369
934,746
2,240
789,763
Total
6,079
$
2,654,403
6,163
$
2,344,625
Homes Ordered:
Arizona
1,110
$
497,169
1,226
$
479,239
California
701
519,944
630
390,619
Colorado
369
228,463
350
193,913
West Region
2,180
1,245,576
2,206
1,063,771
Texas
2,392
1,039,961
2,216
820,343
Central Region
2,392
1,039,961
2,216
820,343
Florida
1,257
510,205
947
355,227
Georgia
445
208,279
357
138,866
North Carolina
764
341,471
809
310,719
South Carolina
298
103,372
164
58,997
Tennessee
305
128,716
301
100,879
East Region
3,069
1,292,043
2,578
964,688
Total
7,641
$
3,577,580
7,000
$
2,848,802
Order Backlog:
Arizona
1,255
$
557,742
1,328
$
520,034
California
563
430,202
479
295,198
Colorado
439
271,827
238
139,437
West Region
2,257
1,259,771
2,045
954,669
Texas
2,349
1,042,689
1,729
670,583
Central Region
2,349
1,042,689
1,729
670,583
Florida
1,250
524,940
637
268,971
Georgia
342
162,204
196
79,207
North Carolina
673
299,352
634
247,292
South Carolina
178
64,015
118
44,175
Tennessee
192
85,882
150
52,637
East Region
2,635
1,136,393
1,735
692,282
Total
7,241
$
3,438,853
5,509
$
2,317,534

Meritage Homes Corporation and Subsidiaries
Operating Data
(Unaudited)

Three Months Ended June 30,
2022
2021
Ending
Average
Ending
Average
Active Communities:
Arizona
56
48.0
38
35.5
California
32
27.5
20
19.5
Colorado
19
18.5
17
14.5
West Region
107
94.0
75
69.5
Texas
80
77.5
64
61.5
Central Region
80
77.5
64
61.5
Florida
41
41.0
34
32.0
Georgia
14
14.5
10
11.0
North Carolina
32
30.5
26
25.0
South Carolina
17
15.0
7
6.5
Tennessee
12
13.0
10
9.0
East Region
116
114.0
87
83.5
Total
303
285.5
226
214.5


Six Months Ended June 30,
2022
2021
Ending
Average
Ending
Average
Active Communities:
Arizona
56
45.0
38
34.6
California
32
25.7
20
18.3
Colorado
19
18.0
17
13.3
West Region
107
88.7
75
66.2
Texas
80
76.1
64
62.0
Central Region
80
76.1
64
62.0
Florida
41
41.0
34
31.6
Georgia
14
14.7
10
9.7
North Carolina
32
29.0
26
23.7
South Carolina
17
14.7
7
6.3
Tennessee
12
12.7
10
8.3
East Region
116
112.1
87
79.6
Total
303
276.9
226
207.8

About Meritage Homes Corporation

Meritage Homes is the seventh-largest public homebuilder in the United States, based on homes closed in 2021. The Company offers a variety of homes that are designed with a focus on entry-level and first move-up buyers. Operations span across Arizona, California, Colorado, Texas, Florida, Georgia, North Carolina, South Carolina, Tennessee and Utah.

Meritage Homes has delivered over 155,000 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 and a nine-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; our spec inventory levels; and expectations about our future results, including our liquidity and market 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, 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; the potential benefits of rate locks; inflation in the cost of materials used to develop communities and construct homes; supply chain and labor constraints; our ability to acquire and develop lots may be negatively impacted if we are unable to obtain performance and surety bonds; 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 money 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 of our employees and representatives to comply with laws and regulations; our compliance with government regulations related to our financial services operations; 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, 2021 and our Form 10-Q for the quarter ended March 31, 2022 under the caption "Risk Factors," which can be found on our website at www.investors.meritagehomes.com.

Contacts:
Emily Tadano, VP of Investor Relations and ESG
(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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