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

Meritage Homes Corporation
·23 min read

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