Meritage Homes Reports Results for the Fourth Quarter and Full Year 2013

Meritage Homes Reports Results for the Fourth Quarter and Full Year 2013 
Fourth Quarter EPS of $1.19 Reflects 47% Increase in Home Closing
Revenue and 12% Pre-Tax Margin; Full Year Home Closing Revenue
Increases 51% and Total Order Value Increases 40% Over 2012 
SCOTTSDALE, AZ -- (Marketwired) -- 02/05/14 --  Meritage Homes
Corporation (NYSE: MTH), a leading U.S. homebuilder, today announced
fourth quarter results for the period ended December 31, 2013. 


 
                                                                            
                   Summary Operating Results (unaudited)                    
              (Dollars in thousands, except per share amounts)              
                                                                            
                         Three Months Ended         Twelve Months Ended     
                            December 31,                December 31,        
                        2013      2012    %Chg     2013       2012     %Chg 
                     --------- --------- ------ ---------- ---------- ------
Homes closed (units)     1,468     1,240    18%      5,259      4,238    24%
Home closing revenue $ 533,492 $ 364,118    47% $1,783,389 $1,184,360    51%
Average sales price                                                         
 - closings          $     363 $     294    24% $      339 $      279    21%
Home orders (units)      1,131     1,094     3%      5,615      4,795    17%
Home order value     $ 414,584 $ 353,862    17% $1,982,303 $1,414,772    40%
Average sales price                                                         
 - orders            $     367 $     323    13% $      353 $      295    20%
Ending backlog                                                              
 (units)                                             1,853      1,472    26%
Ending backlog value                            $  686,672 $  479,266    43%
Average sales price                                                         
 - backlog                                      $      371 $      326    14%
Net earnings         $  46,089 $  95,128  (52)% $  124,464 $  105,163    18%
Diluted EPS          $    1.19 $    2.49  (52)% $     3.25 $     3.00     8%

 
MANAGEMENT COMMENTS  
"2013 was another year of strong revenue growth and earnings
acceleration for Meritage Homes, and the fourth quarter was our
eleventh consecutive quarter of year-over-year growth in orders,"
said Steven J. Hilton, chairman and chief executive officer of
Meritage Homes. "Our orders and closing volumes grew due to strong
demand and a 19% increase in our active communities open at year-end.
In addition, rising home prices pushed our total order value and
closing revenue to their highest levels in more than five years.
Price appreciation also contributed to our home closing gross margins
expanding to 22.0% for the year and 23.2% in the fourth quarter. 
"With those margin gains, we produced an 80% increase in full year
home closing gross profit and grew our annual pre-tax earnings by a
multiple of six times on a 51% increase in home closing revenue in
2013," he explained. "Our growth was less evident in our net earnings
and earnings per share, as our 2012 annual results included a $76.3
million net tax benefit, while 2013 results included a provision for
tax expense of $53.2 million." 
Mr. Hilton continued, "The homebuilding market strengthened in 2013
as jobs, improved buyer confidence and a shortage of homes for sale
drove housing starts higher," continued Mr. Hilton. "We believe
market conditions remain positive for continued growth in 2014 and
beyond. Based on our positive outlook, we invested approximately $565
million during the year in land and development, and contracted for
approximately 11,200 new lots in great locations at attractive
prices, ending the year with about 25,700 total lots under control.
We raised approximately $280 million during 2013 through the issuance
of senior unsecured notes and completed a $110 million stock offering
in January 2014 to further solidify our balance sheet and fund
additional growth.  
"We closed 2013 with significantly higher backlog, total assets and
stockholders' equity than we had at the end of 2012, and believe we
have sufficient liquidity to grow as the housing market continues to
improve," concluded Mr. Hilton. "At this time, we expect to grow our
community count to 210-220 by the end of 2014." 
FOURTH QUARTER RESULTS 


 
--  Net earnings of $46.1 million ($1.19 per diluted share) were net of a
    $19.8 million provision for income taxes, while prior year net
    earnings of $95.1 million ($2.49 per diluted share) included a $71.5
    million net tax benefit primarily due to the reversal of a majority of
    our deferred tax asset valuation allowances.
--  Home closing revenue increased 47% due to an 18% increase in home
    closings combined with a 24% increase in average price over the prior
    year period. The strongest growth was in the expanded East Region
    (Florida, the Carolinas and Tennessee), which grew closings and home
    closing revenue by 58% and 116%, respectively, compared to 31% growth
    in home closing revenue in both the West and Central Regions.
--  The total value of homes ordered increased 17%, primarily due to a 13%
    increase in average selling price combined with a 3% increase in order
    volume. Average sales price for the fourth quarter increased to
    $367,000 from $323,000 in 2012. The fourth quarter of 2013 was
    Meritage's eleventh consecutive quarter of year-over-year growth in
    home orders, and monthly sales improved sequentially every month
    throughout the quarter, before including the Company's new Tennessee
    division, which added 26 orders in the fourth quarter of 2013.
--  An average of 6.2 orders per community during the fourth quarter 2013
    was the second highest fourth quarter in the last eight years,
    exceeded only by 2012's 7.0 average orders per community. California
    and Colorado sold the highest number of homes per average community.
--  Cancellation rates increased to 15% in the fourth quarter of 2013,
    compared to 13% in the fourth quarter of 2012, but still remained well
    below historical rates for the Company.
--  Ending backlog of orders was up 26% over the prior year, and the total
    value of orders in backlog was up 43%, aided by a 14% increase in the
    average sales price per home.
--  Home closing gross profit increased 80% over the prior year, and home
    closing gross margin increased by 430 basis points to 23.2% in the
    fourth quarter of 2013 compared to 18.9% in the fourth quarter of
    2012. Increased margins reflected the Company's success in managing
    smaller increases in its cost of sales relative to rising home prices.
--  Commissions and selling expenses decreased by 60 basis points from the
    prior year, to 6.8% of home closing revenue in the fourth quarter of
    2013, compared to 7.4% of home closing revenue in the fourth quarter
    of 2012, as higher closing revenue resulted in greater leverage of the
    fixed components within selling costs.
--  General and administrative expenses for the fourth quarter of 2013
    decreased by 30 basis points to 4.6% of total closing revenue in 2013,
    compared to 4.9% of total closing revenue in 2012, despite increasing
    by $7.2 million over the prior year, primarily due to hiring of
    additional employees and higher compensation expense.
--  Interest expense decreased to $2.0 million or 0.4% of closing revenue
    in the fourth quarter of 2013, compared to $5.5 million or 1.5% of
    closing revenue in the fourth quarter of 2012, as more interest was
    capitalized to assets under development.
--  Earnings before income taxes increased 179% to $65.9 million from
    $23.6 million in the fourth quarters of 2013 and 2012, respectively.
    Pretax margin for the fourth quarter increased 570 basis points to
    12.2% in 2013 compared to 6.5% in 2012.

  
FULL YEAR RESULTS 


 
--  Net income of $124.5 million for the full year of 2013 included a
    $53.2 provision for income taxes and a $3.8 million loss on early
    extinguishment of debt, compared to 2012's net income of $105.2
    million, which included a net tax benefit of $76.3 million and a $5.8
    million loss on early extinguishment of debt.
--  Home closings and closing revenue increased 24% and 51%, respectively,
    for 2013 as compared to 2012.
--  2013 home closing gross margins improved by 360 basis points to 22.0%
    compared to 18.4% for 2012.
--  Net orders for the year increased 17% in 2013 over 2012, and total
    order value increased 40% year over year, aided by a 20% increase in
    average sales prices.
--  The total value of orders in backlog at year-end 2013 was 43% higher
    than the prior year's ending backlog.

  
BALANCE SHEET 


 
--  Cash and cash equivalents, restricted cash and securities at December
    31, 2013, totaled $363.8 million, compared to $295.5 million at
    December 31, 2012. During 2013, Meritage received approximately $280
    million from the sale of $175 million of 4.50% senior notes due 2018
    and $100 million of its 7.15% senior notes due 2020 (sold at a premium
    of $106.699 for a yield of 5.875%). Approximately $100 million of the
    capital raised was used to fully retire the Company's 7.731% senior
    subordinated notes due 2017. In January 2014, the company also issued
    approximately 2.53 million shares of common stock for net proceeds of
    approximately $110 million.
--  Meritage Homes expanded into the Nashville, Tennessee market through
    the acquisition of Phillips Builders in August 2013, which added
    approximately 500 lots to Meritage's total lot inventory.
--  Real estate assets increased by $292.1 million for the year 2012,
    ending at $1.4 billion at December 31, 2013, compared to $1.1 billion
    at December 31, 2012. Approximately 61% of the increase was in
    finished home sites (lots) and home sites under development, as
    Meritage acquired and developed lots for new communities in growing
    markets.
--  Meritage ended the quarter with approximately 25,700 total lots under
    control, of which 74% were owned and 26% controlled under option and
    purchase contracts, compared to approximately 20,800 total lots at
    December 31, 2012. Based on its trailing twelve months' closings,
    Meritage controlled a 4.9 year supply of lots at the end of 2013.
--  Net debt-to-capital ratio at December 31, 2013 was 39.1%, compared to
    38.1% at December 31, 2012. Giving effect to the January equity
    offering, Meritage's pro forma net debt-to-capital ratio would have
    been 31.2%.
--  The Company increased the borrowing capacity under its revolving
    credit facility to $200 million from $135 million during the fourth
    quarter, providing additional liquidity for working capital and
    growth, while also eliminating all restrictions on cash previously
    required under its letters of credit facilities.

  
CONFERENCE CALL  
Management will host a conference call today to discuss the Company's
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/10038596. 
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 February 5, 2014 on the website noted above, or by
dialing 877-344-7529, and referencing conference number 10038596. For
more information, visit meritagehomes.com. 


 
                                                                            
                Meritage Homes Corporation and Subsidiaries                 
                             Operating Results                              
                                (Unaudited)                                 
                   (In thousands, except per share data)                    
                                                                            
                            Three Months Ended        Twelve Months Ended   
                               December 31,              December 31,       
                             2013         2012         2013         2012    
                         -----------  -----------  -----------  ----------- 
Homebuilding:                                                               
  Home closing revenue   $   533,492  $   364,118  $ 1,783,389  $ 1,184,360 
  Land closing revenue         2,702          468       31,270        9,314 
                         -----------  -----------  -----------  ----------- 
    Total closing                                                           
     revenue                 536,194      364,586    1,814,659    1,193,674 
                         -----------  -----------  -----------  ----------- 
  Cost of home closings     (409,918)    (295,355)  (1,391,475)    (966,384)
  Cost of land closings       (2,627)        (258)     (26,766)      (9,091)
                         -----------  -----------  -----------  ----------- 
    Total cost of                                                           
     closings               (412,545)    (295,613)  (1,418,241)    (975,475)
                         -----------  -----------  -----------  ----------- 
  Home closing gross                                                        
   profit                    123,574       68,763      391,914      217,976 
  Land closing gross                                                        
   profit                         75          210        4,504          223 
                         -----------  -----------  -----------  ----------- 
    Total closing gross                                                     
     profit                  123,649       68,973      396,418      218,199 
                         -----------  -----------  -----------  ----------- 
Financial Services:                                                         
  Revenue                      2,077          526        6,037          779 
  Expense                     (1,037)        (497)      (3,266)        (981)
  Earnings from                                                             
   financial services                                                       
   unconsolidated                                                           
   entities and other,                                                      
   net                         3,399        3,483       13,183       10,457 
                         -----------  -----------  -----------  ----------- 
    Financial services                                                      
     profit                    4,439        3,512       15,954       10,255 
                         -----------  -----------  -----------  ----------- 
Commissions and other                                                       
 sales costs                 (36,190)     (26,883)    (126,716)     (94,833)
General and                                                                 
 administrative expenses     (24,923)     (17,739)     (91,510)     (68,185)
Earnings/(loss) from                                                        
 other unconsolidated                                                       
 entities, net                  (149)         124         (378)        (224)
Interest expense              (1,979)      (5,526)     (15,092)     (24,244)
Other income/(loss), net       1,032        1,139        2,792       (6,342)
Loss on early                                                               
 extinguishment of debt           --           --       (3,796)      (5,772)
                         -----------  -----------  -----------  ----------- 
Earnings before income                                                      
 taxes                        65,879       23,600      177,672       28,854 
(Provision for)/benefit                                                     
 from income taxes           (19,790)      71,528      (53,208)      76,309 
                         -----------  -----------  -----------  ----------- 
Net earnings             $    46,089  $    95,128  $   124,464  $   105,163 
                         ===========  ===========  ===========  =========== 
                                                                            
Earnings per share:                                                         
  Basic                                                                     
    Earnings per share   $      1.27  $      2.67  $      3.45  $      3.09 
    Weighted average                                                        
     shares outstanding       36,240       35,595       36,105       34,057 
  Diluted                                                                   
    Earnings per share   $      1.19  $      2.49  $      3.25  $      3.00 
    Weighted average                                                        
     shares outstanding       38,905       38,308       38,801       35,172 
                                                                            
                                                                            
                                                                            
                 Meritage Homes Corporation and Subsidiaries                
                         Consolidated Balance Sheets                        
                               (In thousands)                               
                                 (unaudited)                                
                                                                            
                                                        December   December 
                                                        31, 2013   31, 2012 
                                                       ---------- ----------
Assets:                                                                     
  Cash and cash equivalents                            $  274,136 $  170,457
  Investments and securities                               89,687     86,074
  Restricted cash                                              --     38,938
  Other receivables                                        38,983     20,290
  Real estate (1)                                       1,405,299  1,113,187
  Real estate not owned                                       289         --
  Deposits on real estate under option or contract         51,595     14,351
  Investments in unconsolidated entities                   11,638     12,085
  Property and equipment, net                              22,099     15,718
  Deferred tax asset                                       70,404     77,974
  Prepaid, other assets and goodwill                       39,231     26,488
                                                       ---------- ----------
    Total assets                                       $2,003,361 $1,575,562
                                                       ========== ==========
Liabilities:                                                                
  Accounts payable                                     $   68,018 $   49,801
  Accrued liabilities                                     166,611     96,377
  Home sale deposits                                       21,996     12,377
  Liabilities related to real estate not owned                289         --
  Senior, senior subordinated, convertible senior                           
   notes and other borrowings                             905,055    722,797
                                                       ---------- ----------
      Total liabilities                                 1,161,969    881,352
                                                       ---------- ----------
Stockholders' Equity:                                                       
  Preferred stock, par value $0.01                             --         --
  Common stock, par value $0.01                               362        356
  Additional paid-in capital                              412,961    390,249
  Retained earnings                                       428,069    303,605
                                                       ---------- ----------
      Total stockholders' equity                          841,392    694,210
                                                       ---------- ----------
    Total liabilities and stockholders' equity         $2,003,361 $1,575,562
                                                       ========== ==========
(1)Real estate - Allocated costs:                                           
  Homes under contract under construction              $  262,633 $  192,948
  Unsold homes, completed and under construction          147,889    107,466
  Model homes                                              81,541     62,411
  Finished home sites and home sites under development    813,135    634,106
  Land held for development                                52,100     56,118
  Land held for sale                                       19,112     21,650
  Communities in mothball status                           28,889     38,488
                                                       ---------- ----------
      Total real estate                                $1,405,299 $1,113,187
                                                       ========== ==========
                                                                            
                                                                            
                                                                            
Supplemental Information and Non-GAAP Financial Disclosures (In thousands - 
                                 unaudited):                                
                                                                            
                               Three Months Ended      Twelve Months Ended  
                                  December 31,            December 31,      
                                2013        2012        2013        2012    
                             ----------  ----------  ----------  ---------- 
Depreciation and                                                            
 amortization                $    2,765  $    2,283  $    9,934  $    8,196 
                             ==========  ==========  ==========  ========== 
                                                                            
Summary of Capitalized                                                      
 Interest:                                                                  
Capitalized interest,                                                       
 beginning of period         $   28,998  $   20,185  $   21,600  $   14,810 
Interest incurred                13,276      12,316      51,152      46,135 
Interest expensed                (1,979)     (5,526)    (15,092)    (24,244)
Interest amortized to cost                                                  
 of home, land closings and                                                 
 impairments                     (7,303)     (5,375)    (24,668)    (15,101)
                             ----------  ----------  ----------  ---------- 
Capitalized interest, end of                                                
 period                      $   32,992  $   21,600  $   32,992  $   21,600 
                             ==========  ==========  ==========  ========== 
                                                                            
                                                       Proforma             
                                                       Dec 31,              
                                                         2013               
                                                      (includes             
                                                       Jan 2014             
                               December    December     equity              
                               31, 2013    31, 2012   offering)             
                             ----------  ----------  ----------             
Notes payable and other                                                     
 borrowings                  $  905,055  $  722,797  $  905,055             
Stockholders' equity            841,392     694,210     951,731             
                             ----------  ----------  ----------             
Total capital                 1,746,447   1,417,007   1,856,786             
                             ----------  ----------  ----------             
Debt-to-capital                    51.8%       51.0%       48.7%            
                                                                            
Notes payable and other                                                     
 borrowings                  $  905,055  $  722,797  $  905,055             
  Less: cash and cash                                                       
   equivalents, restricted                                                  
   cash, and investments and                                                
   securities                  (363,823)   (295,469)   (474,162)            
                             ----------  ----------  ----------             
Net debt                        541,232     427,328     430,893             
Stockholders' equity            841,392     694,210     951,731             
                             ----------  ----------  ----------             
Total net capital            $1,382,624  $1,121,538  $1,382,624             
                             ==========  ==========  ==========             
Net debt-to-capital                39.1%       38.1%       31.2%            
                                                                            
                                                                            
                                                                            

 
                Meritage Homes Corporation and Subsidiaries                 
                   Consolidated Statements of Cash Flows                    
                         (In thousands) (unaudited)                         
                                                                            
                                                      Twelve Months Ended   
                                                         December 31,       
                                                       2013         2012    
                                                   -----------  ----------- 
Cash flows from operating activities:                                       
  Net earnings                                     $   124,464  $   105,163 
  Adjustments to reconcile net earnings to net                              
   cash used in operating activities:                                       
    Depreciation and amortization                        9,934        8,196 
    Stock-based compensation                             9,483        8,319 
    Loss on early extinguishment of debt                 3,796        5,772 
    Equity in earnings from unconsolidated                                  
     entities                                          (12,805)     (10,233)
    Deferred tax asset valuation benefit                (8,666)     (77,974)
    Distribution of earnings from unconsolidated                            
     entities                                           13,013        9,648 
    Other                                               15,851        2,380 
  Changes in assets and liabilities:                                        
    Increase in real estate                           (281,944)    (299,185)
    (Increase)/decrease in deposits on real estate                          
     under option or contract                          (36,974)         824 
    Increase in receivables and prepaid expenses                            
     and other assets                                  (18,429)      (6,301)
    Increase in accounts payable and accrued                                
     liabilities                                        86,604       29,385 
    Increase in home sale deposits                       9,397        3,519 
                                                   -----------  ----------- 
    Net cash used in operating activities              (86,276)    (220,487)
                                                   -----------  ----------- 
Cash flows from investing activities:                                       
  Purchases of property and equipment                  (15,783)     (10,863)
  Maturities of investments and securities             163,012      198,201 
  Payments to purchase investments and securities     (166,619)    (136,823)
  Cash paid for acquisitions                           (18,624)          -- 
  Decrease/(increase) in restricted cash                38,938      (26,792)
  Other                                                    107          121 
                                                   -----------  ----------- 
    Net cash provided by investing activities            1,031       23,844 
                                                   -----------  ----------- 
Cash flows from financing activities:                                       
  Repayments of senior and senior subordinated                              
   notes                                              (102,822)    (315,080)
  Proceeds from issuance of senior notes               281,699      426,500 
  Proceeds from sale of common stock, net                   --       87,113 
  Other                                                 10,047       (5,045)
                                                   -----------  ----------- 
    Net cash provided by financing activities          188,924      193,488 
                                                   -----------  ----------- 
Net increase in cash and cash equivalents              103,679       (3,155)
Beginning cash and cash equivalents                    170,457      173,612 
                                                   -----------  ----------- 
Ending cash and cash equivalents (2)               $   274,136  $   170,457 
                                                   ===========  =========== 
(2) Ending cash and cash equivalents as of December 31, 2013 and December   
31, 2012 excludes investments and securities and restricted cash totaling   
$89.7 million and $125.0 million, respectively.                             
                                                                            
                                                                            
                                                                            
                 Meritage Homes Corporation and Subsidiaries                
                               Operating Data                               
                           (Dollars in thousands)                           
                                 (unaudited)                                
                                                                            
                                           Three Months Ended               
                               December 31, 2013        December 31, 2012   
                            -----------------------  -----------------------
                               Homes       Value        Homes       Value   
                            ----------- -----------  ----------- -----------
Homes Closed:                                                               
  Arizona                           297 $    96,408          232 $    67,910
  California                        205      98,472          243      91,813
  Colorado                          107      46,555           65      20,991
  Nevada                             --          --           22       4,042
                            ----------- -----------  ----------- -----------
  West Region                       609     241,435          562     184,756
                            ----------- -----------  ----------- -----------
  Texas                             522     148,853          465     113,206
                            ----------- -----------  ----------- -----------
  Central Region                    522     148,853          465     113,206
                            ----------- -----------  ----------- -----------
  Carolinas                          86      35,361           33      11,375
  Florida                           235     102,220          180      54,781
  Tennessee                          16       5,623           --          --
                            ----------- -----------  ----------- -----------
  East Region                       337     143,204          213      66,156
                            ----------- -----------  ----------- -----------
  Total                           1,468 $   533,492        1,240 $   364,118
                            =========== ===========  =========== ===========
Homes Ordered:                                                              
  Arizona                           184 $    62,139          178 $    56,426
  California                        169      78,828          251     103,275
  Colorado                          107      46,837           98      35,391
  Nevada                             --          --            9       2,018
                            ----------- -----------  ----------- -----------
  West Region                       460     187,804          536     197,110
                            ----------- -----------  ----------- -----------
  Texas                             437     133,608          389      97,458
                            ----------- -----------  ----------- -----------
  Central Region                    437     133,608          389      97,458
                            ----------- -----------  ----------- -----------
  Carolinas                          80      31,626           33      11,772
  Florida                           128      53,801          136      47,522
  Tennessee                          26       7,745           --          --
                            ----------- -----------  ----------- -----------
  East Region                       234      93,172          169      59,294
                            ----------- -----------  ----------- -----------
  Total                           1,131 $   414,584        1,094 $   353,862
                            =========== ===========  =========== ===========
                                                                            
                                                                            
                                                                            
                                           Twelve Months Ended              
                               December 31, 2013        December 31, 2012   
                            -----------------------  -----------------------
                               Homes       Value        Homes       Value   
                            ----------- -----------  ----------- -----------
Homes Closed:                                                               
  Arizona                         1,041 $   329,855          825 $   221,100
  California                        989     427,886          732     264,388
  Colorado                          405     158,793          292      96,807
  Nevada                             38       8,900           61      11,444
                            ----------- -----------  ----------- -----------
  West Region                     2,473     925,434        1,910     593,739
                            ----------- -----------  ----------- -----------
  Texas                           1,834     492,777        1,655     390,642
                            ----------- -----------  ----------- -----------
  Central Region                  1,834     492,777        1,655     390,642
                            ----------- -----------  ----------- -----------
  Carolinas                         239      93,210          117      41,888
  Florida                           691     264,066          556     158,091
  Tennessee                          22       7,902           --          --
                            ----------- -----------  ----------- -----------
  East Region                       952     365,178          673     199,979
                            ----------- -----------  ----------- -----------
  Total                           5,259 $ 1,783,389        4,238 $ 1,184,360
                            =========== ===========  =========== ===========
Homes Ordered:                                                              
  Arizona                         1,070 $   346,278          916 $   256,684
  California                        899     410,761          965     361,328
  Colorado                          465     201,088          364     123,403
  Nevada                             24       5,795           70      13,473
                            ----------- -----------  ----------- -----------
  West Region                     2,458     963,922        2,315     754,888
                            ----------- -----------  ----------- -----------
  Texas                           2,126     606,115        1,759     429,465
                            ----------- -----------  ----------- -----------
  Central Region                  2,126     606,115        1,759     429,465
                            ----------- -----------  ----------- -----------
  Carolinas                         298     119,087          142      50,613
  Florida                           696     282,328          579     179,806
  Tennessee                          37      10,851           --          --
                            ----------- -----------  ----------- -----------
  East Region                     1,031     412,266          721     230,419
                            ----------- -----------  ----------- -----------
  Total                           5,615 $ 1,982,303        4,795 $ 1,414,772
                            =========== ===========  =========== ===========
                                                                            
Order Backlog:                                                              
  Arizona                           278 $    97,239          249 $    80,816
  California                        225     107,463          315     124,588
  Colorado                          202      92,384          142      50,089
  Nevada                             --          --           14       3,105
                            ----------- -----------  ----------- -----------
  West Region                       705     297,086          720     258,598
                            ----------- -----------  ----------- -----------
  Texas                             792     245,655          500     132,317
                            ----------- -----------  ----------- -----------
  Central Region                    792     245,655          500     132,317
                            ----------- -----------  ----------- -----------
  Carolinas                         108      43,218           49      17,341
  Florida                           208      89,272          203      71,010
  Tennessee                          40      11,441           --          --
                            ----------- -----------  ----------- -----------
  East Region                       356     143,931          252      88,351
                            ----------- -----------  ----------- -----------
  Total                           1,853 $   686,672        1,472 $   479,266
                            =========== ===========  =========== ===========
                                                                            
                                                                            
                                                                            
                 Meritage Homes Corporation and Subsidiaries                
                               Operating Data                               
                                 (unaudited)                                
                                                                            
                                                 Three Months Ended         
                                        December 31, 2013  December 31, 2012
                                        -----------------  -----------------
                                          Beg.      End      Beg.      End  
                                        -------- --------  -------- --------
Active Communities:                                                         
  Arizona                                     39       40        34       38
  California                                  18       22        19       17
  Colorado                                    12       14         8       12
  Nevada                                      --       --         2        1
                                        -------- --------  -------- --------
  West Region                                 69       76        63       68
                                        -------- --------  -------- --------
  Texas                                       73       70        68       65
                                        -------- --------  -------- --------
  Central Region                              73       70        68       65
                                        -------- --------  -------- --------
  Carolinas                                   15       17         7        7
  Florida                                     19       20        15       18
  Tennessee                                    3        5        --       --
                                        -------- --------  -------- --------
  East Region                                 37       42        22       25
                                        -------- --------  -------- --------
  Total                                      179      188       153      158
                                        ======== ========  ======== ========
                                                                            
                                                 Twelve Months Ended        
                                        ------------------------------------
                                        December 31, 2013  December 31, 2012
                                        -----------------  -----------------
                                          Beg.      End      Beg.      End  
                                        -------- --------  -------- --------
Active Communities:                                                         
  Arizona                                     38       40        37       38
  California                                  17       22        20       17
  Colorado                                    12       14        10       12
  Nevada                                       1       --         2        1
                                        -------- --------  -------- --------
  West Region                                 68       76        69       68
  Texas                                       65       70        67       65
                                        -------- --------  -------- --------
  Central Region                              65       70        67       65
  Carolinas                                    7       17         3        7
  Florida                                     18       20        18       18
  Tennessee                                   --        5        --       --
                                        -------- --------  -------- --------
  East Region                                 25       42        21       25
                                        -------- --------  -------- --------
  Total                                      158      188       157      158
                                        ======== ========  ======== ========

 
About Meritage Homes Corporation  
Meritage Homes is the ninth-largest public homebuilder in the United
States, based on 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 December 31, 2013, the company had 188 actively selling
communities in markets including Sacramento, San Francisco's East
Bay, the Central Valley and Orange County, California; Houston,
Dallas-Ft. Worth, Austin and San Antonio, Texas; Phoenix/Scottsdale,
Green Valley and Tucson, Arizona; Denver, Colorado; Orlando and
Tampa, Florida; Raleigh and Charlotte, North Carolina; York County,
South Carolina and Nashville, Tennessee. 
Meritage has designed and built more than 80,000 homes in its 28-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 positive housing
market conditions, its plans to grow as the market improves and
belief that it has sufficient liquidity to fund additional growth,
and its projected community count by the end of 2014.  
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 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 
 
 
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