Meritage Homes Reports Results for the Third Quarter of 2013

Meritage Homes Reports Results for the Third Quarter of 2013 
Diluted EPS of $0.99 on 44% Increase in Home Closing Revenue 
SCOTTSDALE, AZ -- (Marketwired) -- 10/23/13 --  Meritage Homes
Corporation (NYSE: MTH), a leading U.S. homebuilder, today announced
its third quarter results for the period ended September 30, 2013. 


 
                                                                            
                   Summary Operating Results (unaudited)                    
              (Dollars in thousands, except per share amounts)              
                                                                            
                          Three Months Ended          Nine Months Ended     
                             September 30               September 30        
                          2013      2012   %Chg     2013       2012    %Chg 
                       --------- --------- ----  ---------- ---------- ---- 
Homes closed (units)       1,418     1,197   18%      3,791      2,998   26%
Home closing revenue   $ 483,147 $ 334,880   44% $1,249,897 $  820,242   52%
Average sales price -                                                       
 closings              $     341 $     280   22% $      330 $      274   20%
Home orders (units)        1,300     1,204    8%      4,484      3,701   21%
Home order value       $ 473,924 $ 366,752   29% $1,567,719 $1,060,910   48%
Average sales price -                                                       
 orders                $     365 $     305   20% $      350 $      287   22%
Ending backlog (units)                                2,190      1,618   35%
Ending backlog value                             $  805,580 $  489,522   65%
Average sales price -                                                       
 backlog                                         $      368 $      303   22%
Net earnings           $  38,191 $   6,784  463% $   78,375 $   10,035  681%
Diluted EPS            $    0.99 $    0.19  421% $     2.05 $     0.30  583%

 
MANAGEMENT COMMENTS 
"We are pleased with the strong operating results we achieved again
this quarter, including our highest level of home closings and
closing revenue in the last five years, and our highest gross margin
in more than seven years, with a 44% increase in home closing revenue
and a 420 basis point improvement in home closing gross margin," said
Steven J. Hilton, chairman and chief executive officer of Meritage
Homes. "We are focused on delivering earnings growth by leveraging
our operating structure in addition to growing our top line. This was
our seventh consecutive quarter in which we increased net earnings
year-over-year. 
"The pace of sales per community slowed somewhat in the third
quarter, reflecting the effects of home price inflation over the past
year and the increase in interest rates we experienced just before
and during the seasonally slower summer months, resulting in an 8%
year-over-year increase in orders," explained Mr. Hilton. "Since the
underlying demand drivers remain solidly positive amidst a shortage
of homes on the market, we are confident that the housing market can
continue to grow for the foreseeable future, though maybe not at the
same rate we enjoyed last year and earlier this year. 
"We strategically expanded into another new market this quarter with
our acquisition of Phillips Builders in the Nashville market, which
we plan to grow significantly over the next several years. We
acquired 500 lots with that acquisition and also contracted for an
additional 3,700 new lots during the quarter to add new communities
and support sales growth," continued Mr. Hilton. "Evidencing our
confidence in the long-term demand for housing, we are continuing to
evaluate additional opportunities to enter new markets while we
expand within our existing markets." 
STRONG EARNINGS GROWTH 


 
--  Net earnings increased $31.4 million or 463% over 2012 to $38.2
    million ($0.99 per diluted share) in the third quarter of 2013, as
    compared to net earnings of $6.8 million ($0.19 per diluted share) in
    the third quarter of 2012. The increase in 2013 earnings was primarily
    due to higher home closing revenue and gross margins, coupled with
    overhead expense leverage. Prior year results also included an $8.7
    million charge related to litigation surrounding a Nevada joint
    venture. The 2013 results included a tax provision of $18.6 million,
    compared to $0.2 million in the prior year.
--  Home closing revenue increased 44% due to the combination of an 18%
    increase in home closings and a 22% increase in average sales price
    over the prior year period. All regions grew home closings, revenue
    and average prices over the prior year. This was the eighth
    consecutive quarter of year-over-year growth in home closing revenue,
    and the highest level of home closings by Meritage since the fourth
    quarter of 2008.
--  Home closing gross margin increased to 22.8% in the third quarter of
    2013, a year-over-year improvement of 420 basis points compared to
    18.6% in the third quarter of 2012, and a sequential improvement of
    130 basis points compared to a 21.5% home closing gross margin in the
    second quarter of 2013. It is the highest gross margin Meritage has
    produced since the second quarter of 2006. The significant margin
    growth reflects both home price appreciation and effective management
    of construction costs.
--  Commissions and other sales costs in the third quarter improved 80
    basis points on higher closing volumes, decreasing to 6.9% of home
    closing revenue in 2013 from 7.7% in 2012.
--  General and administrative expenses declined to 5.0% of total third
    quarter closing revenue in 2013, from 5.6% in 2012, due to operating
    leverage. The majority of the $5.2 million increase over last year was
    the result of additional hiring and compensation expense.
--  Interest expense decreased to $3.5 million or 0.7% of closing revenue
    in the third quarter of 2013, compared to $5.0 million or 1.5% of
    closing revenue in the third quarter of 2012, as a greater portion of
    interest incurred was capitalized.
--  Pre-tax earnings margin increased 950 basis points to 11.5% in the
    third quarter of 2013, compared to 2.0% in the prior year.

  
CONTINUED ORDER GROWTH 


 
--  Total order value grew 29% over the third quarter of 2012 due to the
    combination of an 8% increase in orders and a 20% increase in the
    average selling price of homes ordered. Total order value and backlog
    grew in each of Meritage's active markets except California, where the
    pace of orders moderated as prices were increased. The average sales
    price on orders of approximately $365,000 was the highest for Meritage
    in more than eight years, reflecting the combination of a greater
    portion of orders in higher-priced communities and states, in addition
    to home price appreciation.
--  Meritage added 14 net new communities during the third quarter of
    2013, including three from the Nashville acquisition, and ended the
    quarter with 179 total active communities, a 17% increase year over
    year from 153 at September 30, 2012.
--  Average orders per active community during the third quarter was 7.6
    in 2013 compared to 7.9 in 2012. The average reflects an increase of
    21% in Texas over the third quarter of 2012, while California, Florida
    and Colorado sold the most homes per average community, at 10.6, 9.1
    and 8.0, respectively.
--  Order cancellation rates remained historically low at 14% for the
    third quarter of 2013 compared to 13% in the third quarter of 2012.
--  Ending backlog value increased 65% over the third quarter of 2012,
    combining a 22% increase in average price with 35% growth of orders in
    backlog. The Carolinas and Colorado grew backlog value by 177% and
    158%, respectively, while Florida and Texas each grew backlog value by
    76% over the prior year.

  
YEAR TO DATE RESULTS 


 
--  Net earnings of $78.4 million for the first nine months of 2013
    included a $3.8 million loss on early extinguishment of debt and a tax
    provision of $33.4 million, compared to net earnings of $10.0 million
    for the first nine months of 2012, which included a $5.8 million loss
    on early extinguishment of debt and a $4.8 million tax benefit, in
    addition to the $8.7 million charge related to the Nevada joint
    venture litigation.
--  Home closings and closing revenue for the first nine months of the
    year increased 26% and 52%, respectively, for 2013 over 2012,
    reflecting a 20% increase in the average sales price of closings.
--  Year-to-date home closing gross margin improved by 330 basis points to
    21.5% for 2013, compared to 18.2% for 2012.
--  Total year-to-date selling, general and administrative expenses
    decreased 200 basis points to 12.3% of total closing revenue in 2013
    compared to 14.3% in 2012, reflecting increased operating leverage.
--  Year-to-date net orders through September 30 increased 21% in 2013
    over 2012, and in combination with a 22% increase in average sales
    price, drove a 48% increase in total order value year over year.

  
BALANCE SHEET STRENGTH 


 
--  Cash and cash equivalents, restricted cash and securities at September
    30, 2013 increased to a total of $311.3 million, compared to $295.5
    million at December 31, 2012.
--  Meritage spent approximately $166.7 million on land acquisition and
    development in the third quarter of 2013, and contracted for
    approximately 3,700 new lots in addition to 500 lots added with the
    Phillips Builders acquisition.
--  Total lot supply at September 30, 2013 was approximately 25,000 lots,
    equating to approximately 5.0 years supply based on trailing twelve
    months' closings, compared to approximately 17,800 lots at September
    30, 2012, the equivalent of 4.6 years supply. Approximately 71% of the
    September 30, 2013 lot supply was owned.
--  Of the 29% of lots controlled under option and purchase contracts as
    of September 30, 2013, approximately 1,350 lots were secured through
    land bank arrangements in 2013. The total finished lot purchase price
    of these lots owned by land bankers is approximately $127 million.
    Meritage has the option to purchase these lots over time, which
    reduces the Company's initial cash outlays for these lot positions.
--  Total real estate assets increased to $1.3 billion at September 30,
    2013, compared to $1.0 billion a year ago and $1.1 billion at the
    beginning of 2013.
--  Stockholders' equity increased by 14% or $98.1 million year-to-date in
    2013, ending at $792.3 million as of September 30, 2013, compared to
    $694.2 million at December 31, 2012.
--  Net debt-to-capital ratio remained at 38.1% as of September 30, 2013,
    consistent with December 31, 2012, and the Company had no borrowings
    against its $135 million revolving credit facility.

  
SUMMARY 
"The recovery in the housing market that began last year drove strong
sales growth and price appreciation through the middle of this year,
until buyers reacted to successive price increases and higher
interest rates by pausing their purchasing decisions, thereby
moderating the demand for new homes," explained Steve Hilton. "In
some ways, the slower pace of sales seen in the third quarter is
healthy for the market, allowing subcontractors and suppliers to
catch up before the next spring selling season, and taking some
upward pressure off costs. 
"Meritage is well positioned with highly desirable locations and
distinctive, energy-efficient homes in many of the best housing
markets in the country, which have produced some of the best sales
and earnings strength during the recovery to date," he continued. "We
now control all of the lots we need to satisfy our projected closings
through 2014 and approximately 85% of our projected 2015 closings.
Our growth strategy and operating leverage should enable us to
continue to drive earnings growth throughout this next housing cycle. 
"Based on our reported results year to date and assuming continued
strength in our markets, we have revised our models and are
projecting home closing revenue of approximately $1.8 billion for
2013, with projected earnings per diluted share in the range of
$2.95-$3.05 for the year." 
CONFERENCE CALL
 Management will host a conference call today to
discuss the Company's third quarter results at 10:30 a.m. Eastern
Time (7:30 a.m. Pacific Time). The call will be webcast with an
accompanying slideshow available on the "Investor Relations" page of
the Company's web site at http://investors.meritagehomes.com.
Telephone participants may avoid any delays by pre-registering for
the call using the following link to receive a special dial-in number
and PIN. 
Conference Call registration link: http://dpregister.com/10034963. 
Telephone participants who are unable to pre-register may dial in to
888-317-6016 on the day of the call. International dial-in number is
1-412-317-6016. 
A replay of the call will be available for fifteen days, beginning at
12:30 p.m. ET on October 23, 2013 on the website noted above, or by
dialing 877-344-7529, and referencing conference number 10030804. For
more information, visit meritagehomes.com. 


 
                                                                            
                Meritage Homes Corporation and Subsidiaries                 
                             Operating Results                              
                                (Unaudited)                                 
                   (In thousands, except per share data)                    
                                                                            
                            Three Months Ended         Nine Months Ended    
                               September 30              September 30       
                             2013         2012         2013         2012    
                         -----------  -----------  -----------  ----------- 
Homebuilding:                                                               
  Home closing revenue   $   483,147  $   334,880  $ 1,249,897  $   820,242 
  Land closing revenue         8,933        7,763       28,568        8,846 
                         -----------  -----------  -----------  ----------- 
    Total closing                                                           
     revenue                 492,080      342,643    1,278,465      829,088 
                         -----------  -----------  -----------  ----------- 
  Cost of home closings     (372,772)    (272,726)    (981,557)    (671,029)
  Cost of land closings       (6,126)      (7,493)     (24,139)      (8,833)
                         -----------  -----------  -----------  ----------- 
    Total cost of                                                           
     closings               (378,898)    (280,219)  (1,005,696)    (679,862)
                         -----------  -----------  -----------  ----------- 
  Home closing gross                                                        
   profit                    110,375       62,154      268,340      149,213 
  Land closing gross                                                        
   profit                      2,807          270        4,429           13 
                         -----------  -----------  -----------  ----------- 
    Total closing gross                                                     
     profit                  113,182       62,424      272,769      149,226 
                         -----------  -----------  -----------  ----------- 
Financial Services:                                                         
  Revenue                      1,684          253        3,960          253 
  Expense                       (901)        (317)      (2,229)        (484)
  Earnings from                                                             
   financial services                                                       
   unconsolidated                                                           
   entities and other,                                                      
   net                         3,511        3,049        9,784        6,974 
                         -----------  -----------  -----------  ----------- 
    Financial services                                                      
     profit                    4,294        2,985       11,515        6,743 
                         -----------  -----------  -----------  ----------- 
Commissions and other                                                       
 sales costs                 (33,467)     (25,855)     (90,526)     (67,950)
General and                                                                 
 administrative expenses     (24,412)     (19,209)     (66,587)     (50,446)
Earnings/(loss) from                                                        
 other unconsolidated                                                       
 entities, net                    46          (74)        (229)        (348)
Interest expense              (3,462)      (5,009)     (13,113)     (18,718)
Other income/(expense),                                                     
 net                             605       (8,276)       1,760       (7,481)
Loss on early                                                               
 extinguishment of debt            -            -       (3,796)      (5,772)
                         -----------  -----------  -----------  ----------- 
Earnings before income                                                      
 taxes                        56,786        6,986      111,793        5,254 
(Provision for)/benefit                                                     
 from income taxes           (18,595)        (202)     (33,418)       4,781 
                         -----------  -----------  -----------  ----------- 
Net earnings             $    38,191  $     6,784  $    78,375  $    10,035 
                         ===========  ===========  ===========  =========== 
                                                                            
Earnings per share:                                                         
Basic                                                                       
      Earnings per share $      1.05  $      0.19  $      2.17  $      0.30 
      Weighted average                                                      
       shares                                                               
       outstanding            36,226       35,216       36,060       33,541 
Diluted                                                                     
      Earnings per share $      0.99  $      0.19  $      2.05  $      0.30 
      Weighted average                                                      
       shares                                                               
       outstanding            38,865       35,761       38,771       34,010 
                                                                            
                                                                            
                 Meritage Homes Corporation and Subsidiaries                
                         Consolidated Balance Sheets                        
                               (In thousands)                               
                                 (unaudited)                                
                                                                            
                                                 September 30,  December 31,
                                                      2013          2012    
                                                 ------------- -------------
Assets:                                                                     
  Cash and cash equivalents                      $     177,584 $     170,457
  Investments and securities                            92,846        86,074
  Restricted cash                                       40,904        38,938
  Other receivables                                     35,711        20,290
  Real estate (1)                                    1,345,214     1,113,187
  Real estate not owned                                    481             -
  Deposits on real estate under option or                                   
   contract                                             34,911        14,351
  Investments in unconsolidated entities                10,662        12,085
  Property and equipment, net                           18,690        15,718
  Deferred tax asset                                    80,390        77,974
  Prepaid expenses and other assets                     36,693        26,488
                                                 ------------- -------------
    Total assets                                 $   1,874,086 $   1,575,562
                                                 ============= =============
Liabilities:                                                                
  Accounts payable                               $      76,647 $      49,801
  Accrued liabilities                                  178,247        96,377
  Home sale deposits                                    28,183        12,377
  Liabilities related to real estate not owned             346             -
  Senior, senior subordinated, convertible                                  
   senior notes and other borrowings                   798,337       722,797
                                                 ------------- -------------
      Total liabilities                              1,081,760       881,352
                                                 ------------- -------------
Stockholders' Equity:                                                       
  Preferred stock, par value $0.01                           -             -
  Common stock, par value $0.01                            362           356
  Additional paid-in capital                           409,984       390,249
  Retained earnings                                    381,980       303,605
                                                 ------------- -------------
      Total stockholders' equity                       792,326       694,210
                                                 ------------- -------------
    Total liabilities and stockholders' equity   $   1,874,086 $   1,575,562
                                                 ============= =============
(1)Real estate -Allocated costs:                                            
  Homes under contract under construction        $     316,508 $     192,948
  Unsold homes, completed and under construction       123,602       107,466
  Model homes                                           78,017        62,411
  Finished home sites and home sites under                                  
   development                                         721,492       634,106
  Land held for development                             53,053        56,118
  Land held for sale                                    19,630        21,650
  Communities in mothball status                        32,912        38,488
                                                 ------------- -------------
      Total real estate                          $   1,345,214 $   1,113,187
                                                 ============= =============
                                                                            
                                                                            
Supplemental Information and Non-GAAP Financial Disclosures (In thousands - 
                                 unaudited):                                
                                                                            
                             Three Months Ended         Nine Months Ended   
                                September 30              September 30      
                             2013          2012         2013        2012    
                        -------------  ------------  ----------  ---------- 
Depreciation and                                                            
 amortization           $       2,511  $      2,299  $    7,169  $    5,913 
                        =============  ============  ==========  ========== 
                                                                            
Summary of Capitalized                                                      
 Interest:                                                                  
Capitalized interest,                                                       
 beginning of period    $      26,294  $     17,836  $   21,600  $   14,810 
Interest incurred              12,508        11,654      37,876      33,819 
Interest expensed              (3,462)       (5,009)    (13,113)    (18,718)
Interest amortized to                                                       
 cost of home, land                                                         
 closings and                                                               
 impairments                   (6,342)       (4,296)    (17,365)     (9,726)
                        -------------  ------------  ----------  ---------- 
Capitalized interest,                                                       
 end of period          $      28,998  $     20,185  $   28,998  $   20,185 
                        =============  ============  ==========  ========== 
                                                                            
                        September 30,  December 31,                         
                             2013          2012                             
                        -------------  ------------                         
Notes payable and other                                                     
 borrowings             $     798,337  $    722,797                         
  Less: cash and cash                                                       
   equivalents,                                                             
   restricted cash, and                                                     
   investments and                                                          
   securities                (311,334)     (295,469)                        
                        -------------  ------------                         
Net debt                      487,003       427,328                         
Stockholders' equity          792,326       694,210                         
                        -------------  ------------                         
Total capital           $   1,279,329  $  1,121,538                         
                        =============  ============                         
Net debt-to-capital              38.1%         38.1%                        
                                                                            
                                                                            
                Meritage Homes Corporation and Subsidiaries                 
                   Consolidated Statements of Cash Flows                    
                         (In thousands) (unaudited)                         
                                                                            
                                                        Nine Months Ended   
                                                          September 30      
                                                        2013        2012    
                                                     ----------  ---------- 
Cash flows from operating activities:                                       
  Net earnings                                       $   78,375  $   10,035 
  Adjustments to reconcile net earnings to net cash                         
   used in operating activities:                                            
    Depreciation and amortization                         7,169       5,913 
    Stock-based compensation                              7,040       6,095 
    Loss on early extinguishment of debt                  3,796       5,772 
    Excess income tax benefit from stock-based                              
     awards                                              (1,733)          - 
    Equity in earnings from unconsolidated entities      (9,555)     (6,626)
    Deferred tax asset valuation benefit                 (4,614)     (7,709)
    Distribution of earnings from unconsolidated                            
     entities                                            10,796       6,118 
    Other                                                 3,071       1,976 
  Changes in assets and liabilities:                                        
    Increase in real estate                            (221,668)   (190,509)
    (Increase)/decrease in deposits on real estate                          
     under option or contract                           (20,425)      2,192 
    Increase in receivables and prepaid expenses and                        
     other assets                                       (14,224)     (1,882)
    Increase in accounts payable and accrued                                
     liabilities                                        106,862      31,204 
    Increase in home sale deposits                       15,584       5,169 
                                                     ----------  ---------- 
    Net cash used in operating activities               (39,526)   (132,252)
                                                     ----------  ---------- 
Cash flows from investing activities:                                       
  Purchases of property and equipment                    (9,717)     (7,139)
  Maturities of investments and securities              132,900     190,701 
  Payments to purchase investments and securities      (139,672)   (109,798)
  Other                                                 (20,334)     (3,020)
                                                     ----------  ---------- 
    Net cash (used in)/provided by investing                                
     activities                                         (36,823)     70,744 
                                                     ----------  ---------- 
Cash flows from financing activities:                                       
  Repayments of senior and senior subordinated notes   (102,822)   (315,080)
  Proceeds from issuance of senior notes                175,000     426,500 
  Proceeds from sale of common stock, net                     -      87,125 
  Other                                                  11,298      (5,600)
                                                     ----------  ---------- 
    Net cash provided by financing activities            83,476     192,945 
                                                     ----------  ---------- 
Net increase in cash and cash equivalents                 7,127     131,437 
Beginning cash and cash equivalents                     170,457     173,612 
                                                     ----------  ---------- 
Ending cash and cash equivalents (2)                 $  177,584  $  305,049 
                                                     ==========  ========== 

 
(2) Ending cash and cash equivalents as of September 30, 2013 and
September 30, 2012 excludes investments and securities and restricted
cash totaling $134 million and $82 million, respectively. 


 
                                                                            
                 Meritage Homes Corporation and Subsidiaries                
                               Operating Data                               
                           (Dollars in thousands)                           
                                 (unaudited)                                
                                                                            
                                               Three Months Ended           
                                    September 30, 2013   September 30, 2012 
                                   -------------------- --------------------
                                     Homes     Value      Homes     Value   
                                   -------- ----------- -------- -----------
Homes Closed:                                                               
  Arizona                               301 $    96,562      243 $    59,519
  California                            259     113,954      244      88,748
  Colorado                              104      43,033       83      27,639
  Nevada                                  1         245       22       4,113
                                   -------- ----------- -------- -----------
  West Region                           665     253,794      592     180,019
                                   -------- ----------- -------- -----------
  Texas                                 509     136,249      434     104,041
                                   -------- ----------- -------- -----------
  Central Region                        509     136,249      434     104,041
                                   -------- ----------- -------- -----------
  Carolinas                              62      24,361       40      14,459
  Florida                               176      66,464      131      36,361
  Tennessee                               6       2,279        -           -
                                   -------- ----------- -------- -----------
  East Region                           244      93,104      171      50,820
                                   -------- ----------- -------- -----------
  Total                               1,418 $   483,147    1,197 $   334,880
                                   ======== =========== ======== ===========
Homes Ordered:                                                              
  Arizona                               234 $    80,748      229 $    70,315
  California                            165      84,741      248      94,974
  Colorado                               96      44,178       88      28,925
  Nevada                                  -           -       22       4,384
                                   -------- ----------- -------- -----------
  West Region                           495     209,667      587     198,598
                                   -------- ----------- -------- -----------
  Texas                                 545     157,868      425     106,116
                                   -------- ----------- -------- -----------
  Central Region                        545     157,868      425     106,116
                                   -------- ----------- -------- -----------
  Carolinas                              72      28,971       36      12,709
  Florida                               177      74,312      156      49,329
  Tennessee                              11       3,106        -           -
                                   -------- ----------- -------- -----------
  East Region                           260     106,389      192      62,038
                                   -------- ----------- -------- -----------
  Total                               1,300 $   473,924    1,204 $   366,752
                                   ======== =========== ======== ===========
                                                                            
                                                                            
                                               Nine Months Ended            
                                    September 30, 2013   September 30, 2012 
                                   -------------------- --------------------
                                     Homes     Value      Homes     Value   
                                   -------- ----------- -------- -----------
Homes Closed:                                                               
  Arizona                               744 $   233,447      593 $   153,190
  California                            784     329,414      489     172,575
  Colorado                              298     112,238      227      75,816
  Nevada                                 38       8,900       39       7,402
                                   -------- ----------- -------- -----------
  West Region                         1,864     683,999    1,348     408,983
                                   -------- ----------- -------- -----------
  Texas                               1,312     343,924    1,190     277,436
                                   -------- ----------- -------- -----------
  Central Region                      1,312     343,924    1,190     277,436
                                   -------- ----------- -------- -----------
  Carolinas                             153      57,849       84      30,513
  Florida                               456     161,846      376     103,310
  Tennessee                               6       2,279        -           -
                                   -------- ----------- -------- -----------
  East Region                           615     221,974      460     133,823
                                   -------- ----------- -------- -----------
  Total                               3,791 $ 1,249,897    2,998 $   820,242
                                   ======== =========== ======== ===========
Homes Ordered:                                                              
  Arizona                               886 $   284,139      738 $   200,258
  California                            730     331,933      714     258,053
  Colorado                              358     154,251      266      88,012
  Nevada                                 24       5,795       61      11,455
                                   -------- ----------- -------- -----------
  West Region                         1,998     776,118    1,779     557,778
                                   -------- ----------- -------- -----------
  Texas                               1,689     472,507    1,370     332,007
                                   -------- ----------- -------- -----------
  Central Region                      1,689     472,507    1,370     332,007
                                   -------- ----------- -------- -----------
  Carolinas                             218      87,461      109      38,841
  Florida                               568     228,527      443     132,284
  Tennessee                              11       3,106        -           -
                                   -------- ----------- -------- -----------
  East Region                           797     319,094      552     171,125
                                   -------- ----------- -------- -----------
  Total                               4,484 $ 1,567,719    3,701 $ 1,060,910
                                   ======== =========== ======== ===========
                                                                            
Order Backlog:                                                              
  Arizona                               391 $   131,508      303 $    92,300
  California                            261     127,107      307     113,126
  Colorado                              202      92,102      109      35,689
  Nevada                                  -           -       27       5,129
                                   -------- ----------- -------- -----------
  West Region                           854     350,717      746     246,244
                                   -------- ----------- -------- -----------
  Texas                                 877     260,900      576     148,065
                                   -------- ----------- -------- -----------
  Central Region                        877     260,900      576     148,065
                                   -------- ----------- -------- -----------
  Carolinas                             114      46,953       49      16,944
  Florida                               315     137,691      247      78,269
  Tennessee                              30       9,319        -           -
                                   -------- ----------- -------- -----------
  East Region                           459     193,963      296      95,213
                                   -------- ----------- -------- -----------
  Total                               2,190 $   805,580    1,618 $   489,522
                                   ======== =========== ======== ===========
                                                                            
                                                                            
                 Meritage Homes Corporation and Subsidiaries                
                               Operating Data                               
                                 (unaudited)                                
                                                                            
                                                    Three Months Ended      
                                             -------------------------------
                                              September 30,   September 30, 
                                                   2013            2012     
                                             --------------- ---------------
                                               Beg.    End     Beg.    End  
                                             ------- ------- ------- -------
Active Communities:                                                         
  Arizona                                         36      39      32      34
  California                                      13      18      20      19
  Colorado                                        12      12       8       8
  Nevada                                           -       -       2       2
                                             ------- ------- ------- -------
  West Region                                     61      69      62      63
                                             ------- ------- ------- -------
  Texas                                           71      73      68      68
                                             ------- ------- ------- -------
  Central Region                                  71      73      68      68
                                             ------- ------- ------- -------
  Carolinas                                       13      15       5       7
  Florida                                         20      19      16      15
  Tennessee                                        -       3       -       -
                                             ------- ------- ------- -------
  East Region                                     33      37      21      22
                                             ------- ------- ------- -------
  Total                                          165     179     151     153
                                             ======= ======= ======= =======
                                                                            
                                                                            
                                                    Nine Months Ended       
                                             -------------------------------
                                              September 30,   September 30, 
                                                   2013            2012     
                                             --------------- ---------------
                                               Beg.    End     Beg.    End  
                                             ------- ------- ------- -------
Active Communities:                                                         
  Arizona                                         38      39      37      34
  California                                      17      18      20      19
  Colorado                                        12      12      10       8
  Nevada                                           1       -       2       2
                                             ------- ------- ------- -------
  West Region                                     68      69      69      63
  Texas                                           65      73      67      68
                                             ------- ------- ------- -------
  Central Region                                  65      73      67      68
  Carolinas                                        7      15       3       7
  Florida                                         18      19      18      15
  Tennessee                                        -       3       -       -
                                             ------- ------- ------- -------
  East Region                                     25      37      21      22
                                             ------- ------- ------- -------
  Total                                          158     179     157     153
                                             ======= ======= ======= =======

 
About Meritage Homes Corporation
 Meritage Homes is the ninth-largest
public homebuilder in the United States, based on 4,238 homes closed
in 2012. Meritage builds and sells single-family homes for
first-time, move-up, luxury and active adult buyers across the
Western, Southern and Southeastern United States. As of September 30,
2013, the company had 179 actively selling communities in markets
including Sacramento, San Francisco's East Bay, the Central Valley
and Southern California; Houston, Dallas-Ft. Worth, Austin and San
Antonio, Texas; Phoenix/Scottsdale and Tucson, Arizona; Denver,
Colorado; Orlando and Tampa, Florida; Raleigh and Charlotte, North
Carolina and Nashville, Tennessee. 
Meritage has designed and built more than 75,000 homes in its 27-year
history, and has a reputation for its distinctive style, quality
construction, and positive customer experience. Meritage is the
industry leader in energy efficient homebuilding and in 2013,
Meritage received the U.S. Environmental Protection Agency's ENERGY
STAR Partner of the Year for Sustained Excellence Award, for its
innovation and industry leadership in energy efficient homebuilding.
Meritage was the first national homebuilder to be 100 percent ENERGY
STAR(R) qualified in every home it builds, and far exceeds ENERGY
STAR standards today. 
For more information, visit meritagehomes.com. 
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Such
statements include management's expectations for continued growth of
the housing market, plans to enter new markets and expand in its
existing markets, and management's projected home closings, home
closing revenue and earnings per diluted share for 2013.  
Such statements are based upon the current beliefs and expectations
of Company management, and current market conditions, which are
subject to significant risks and uncertainties. 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.  
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. The risks
and uncertainties include but are not limited to the following:
weakness in the homebuilding market resulting from an unexpected
setback in the current economic recovery; the availability of
finished lots and undeveloped land; interest rates and changes in the
availability and pricing of residential mortgages; the availability
and cost of materials and labor; adverse changes in tax laws that
benefit our homebuyers; the ability of our potential buyers to sell
their existing homes; cancellation rates and home prices in our
markets; inflation in the cost of materials used to construct homes;
the adverse effect of slower order absorption rates; potential
write-downs or write-offs of assets, including pre-acquisition costs
and deposits; our potential exposure to natural disasters;
competition; the adverse impacts of cancellations resulting from
small deposits relating to our sales contracts; construction defect
and home warranty claims; our success in prevailing on contested tax
positions; our ability to preserve our deferred tax assets and use
them within the statutory time limits; delays and risks associated
with land development; our ability to obtain performance bonds in
connection with our development work; the liquidity of our joint
ventures and the ability of our joint venture partners to meet their
obligations to us and the joint venture; the loss of key personnel;
changes in or our failure to comply with laws and regulations; our
lack of geographic diversification; fluctuations in quarterly
operating results; our financial leverage and level of indebtedness;
our ability to take certain actions because of restrictions contained
in the indentures for our senior and senior subordinated notes and
our ability to raise additional capital when and if needed; our
credit ratings; successful integration of future acquisitions;
government regulations and legislative or other initiatives that seek
to restrain growth or new housing construction or similar measures;
acts of war; the replication of our "Green" technologies by our
competitors; our exposure to information technology failures and
security breaches; 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, 2012
under the caption "Risk Factors," which can be found on our website.  
Contacts:
Brent Anderson
VP Investor Relations
(972) 580-6360 (office)
Brent.Anderson@meritagehomes.com