SCOTTSDALE, Ariz., Jan. 26, 2022 (GLOBE NEWSWIRE) -- Meritage Homes Corporation (NYSE: MTH), a leading U.S. homebuilder, today announced fourth quarter and full year results for the periods ended December 31, 2021.

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

 Three Months Ended December 31, Twelve Months Ended December 31,
  2021  2020 % Chg  2021  2020 % Chg
Homes closed (units) 3,526  3,744 (6)%  12,801  11,834 8%
Home closing revenue$1,498,813 $1,409,160 6% $5,094,873 $4,464,389 14%
Average sales price - closings$425 $376 13% $398 $377 6%
Home orders (units) 3,367  3,174 6%  13,808  13,724 1%
Home order value$1,459,060 $1,216,069 20% $5,796,813 $5,174,938 12%
Average sales price - orders$433 $383 13% $420 $377 11%
Ending backlog (units)       5,679  4,672 22%
Ending backlog value      $2,516,164 $1,812,547 39%
Average sales price - backlog      $443 $388 14%
Earnings before income taxes$311,497 $195,365 59% $954,834 $533,566 79%
Net earnings$237,460 $152,527 56% $737,444 $423,475 74%
Diluted EPS$6.25 $3.97 57% $19.29 $11.00 75%

MANAGEMENT COMMENTS

“Our strong fourth quarter results completed an extraordinary 2021 for Meritage Homes, reflecting the demand in the homebuilding market combined with our team’s execution. In the face of prolonged supply chain constraints and a tightening labor market, we achieved our highest fourth quarter of sales orders and our second highest quarterly home closings while accelerating our spec starts,” said Steven J. Hilton, executive chairman of Meritage Homes. "Meritage again broke several financial company records this quarter including our highest quarterly home closing revenue, home closing gross profit and diluted EPS as well as the lowest quarterly SG&A as a percentage of home closing revenue in our company's history."

“The housing market remained strong, benefiting from the ongoing shortage of housing inventory, still-low interest rates and the continued favorable homebuying trends from millennials and baby boomers that drove housing demand in all our markets,” Phillippe Lord, chief executive officer of Meritage Homes, said. “We anticipate that our strategy of focusing on the entry-level and first move-up markets will enable us to continue leveraging these ongoing demographic demand trends.”

Mr. Lord continued, "In the fourth quarter of 2021, quarterly sales orders of 3,367 homes were 6% higher than prior year. Despite metering our orders pace in almost all of our communities to align our sales with production, we achieved our second highest fourth quarter average absorption pace of 4.5 per month across our 248 average communities.”

"For full year 2021, we delivered 12,801 homes, which was the most in company history and 8% greater than the prior year. On a quarterly basis, we closed 3,526 homes in the current quarter, which was just 6% lower than the fourth quarter of 2020 given labor and supply chain challenges. As a result of favorable pricing power, home closing revenue increased 6% year-over-year to $1.5 billion for the fourth quarter of 2021, which combined with a 29.0% home closing gross margin, led to a 57% year-over-year increase in our diluted EPS from $3.97 to $6.25," Mr. Lord remarked.

“At December 31, 2021, we had 259 active ending communities, a 10% increase sequentially from 236 at September 30, 2021 and a 33% year-over-year increase from 195 at December 31, 2020. We are one step closer to attaining our mid-2022 goal of 300 communities. We are already seeing increased volume from our community count growth and expect to continue to benefit from incremental orders volume and closings in 2022 and beyond,” said Mr. Lord. “During the quarter, $507 million was spent on land acquisition and development and 9,000 net new lots were secured, bringing our total lot supply to over 75,000. We maintained a strong balance sheet and ample liquidity this quarter as reflected in our net debt-to-capital ratio of 15.1%, which positions us well to invest for future growth.”

Mr. Lord concluded, “2021 was a record year of sales orders and home closings. Given our heavy backlog of nearly 5,700 sold homes and our growing community count, we are projecting 14,500-15,500 home closings for the full year 2022, which we anticipate will generate $6.1-6.5 billion in home closing revenue. Home closing gross margin is projected to be around 27.75%. With a projected effective tax rate of 25%, we expect diluted EPS to be in the range of $23.15-24.65 for 2022.”

FOURTH QUARTER RESULTS

  • Orders of 3,367 homes for the fourth quarter of 2021 were 6% higher year-over-year, driven by a 24% increase in average active community count, which was partially offset by a decrease in average absorptions per store to 4.5 per month from our highest fourth quarter average absorption pace of 5.3 per month in the fourth quarter of 2020. Entry-level represented 82% of fourth quarter 2021 sales orders, compared to 72% in the same quarter of 2020. Average sales price ("ASP") on orders in the fourth quarter of 2021 exceeded $430,000.
  • The 6% increase in home closing revenue to $1.5 billion for the quarter reflected a 13% increase in ASP on closings due to strong market demand even as we shifted our product mix toward entry-level homes. This was partially offset by a 6% decline in home closing volume year-over-year.
  • Home closing gross margin improved 500 bps to 29.0% in the fourth quarter of 2021 from 24.0% in the prior year. Higher ASP more than offset high commodity costs.
  • Land sale impairments totaled $2.0 million in the current quarter's total gross profit compared to $20.3 million in the fourth quarter of 2020. In both years, the charges stem from the disposition of assets that no longer fit our strategy.
  • Selling, general and administrative ("SG&A") expenses as a percentage of fourth quarter 2021 home closing revenue of 8.5% improved 80 bps from 9.3% in the fourth quarter of 2020, due to continued leverage of fixed costs on higher home closing revenue, lower broker commissions and the benefits of technology on our sales and marketing efforts.
  • One-time items comprised of payments to our general counsel who retired in December 2021 and a change in the Company's retirement vesting eligibility for equity awards totaled $5.0 million and were included in SG&A expenses in the fourth quarter of 2021.
  • The fourth quarter effective income tax rate was 23.8% in 2021 compared to 21.9% in the prior year. Eligible energy tax credits on qualifying energy-efficient homes closed under the Taxpayer Certainty and Disaster Tax Relief Act ("2019 Taxpayer Act") enacted in December 2019 reduced the rate in both years.
  • Fourth quarter 2021 pre-tax margin of 20.7% was 690 bps higher than 13.8% in the fourth quarter of 2020. Net earnings were $237.5 million ($6.25 per diluted share) for this quarter, compared to $152.5 million ($3.97 per diluted share) for the same quarter in the prior year. The 57% increase in diluted EPS reflected pricing power, expanded gross margin and improved overhead leverage combined with a lower outstanding share count in the current quarter.

FULL YEAR RESULTS

  • Total sales orders of 13,808 homes for the full year 2021 were in line with full year 2020, as were average community count of 224 and average absorption pace of 5.1 per month for the full year 2021. For the current year, entry-level represented 81% of sales orders, compared to 68% for 2020.
  • Home closing revenue for the full year 2021 increased 14% year-over-year to $5.1 billion due to 8% improved home closing volume and 6% higher ASP resulting from the favorable pricing environment.
  • Home closing gross margin improved 580 bps to 27.8% for the full year 2021, compared to 22.0% in 2020, reflecting the benefits of higher ASP and better leveraging of fixed costs.
  • Total impairments were $2.1 million in the current year compared to $24.9 million in 2020, with each year relating to the disposition of assets that no longer fit our strategy.
  • SG&A expenses as a percentage of home closing revenue improved 80 bps to 9.2% in 2021 from 10.0% in 2020 as a result of greater leverage of overhead expenses on higher home closing revenue as well as sales and marketing efficiencies gained from digital innovations.
  • Loss on early extinguishment of debt charges of $18.2 million was recognized in 2021 in connection with the early redemption of our 7.00% senior notes due 2022.
  • The effective tax rate for the full year 2021 was 22.8%, compared to 20.6% in 2020. The effective tax rate in both periods benefited from tax credits earned for qualifying energy-efficient homes under the 2019 Taxpayer Act.
  • The pre-tax margin for the current year of 18.6% was 670 bps higher than 11.9% for 2020. Net earnings totaled $737.4 million ($19.29 per diluted share) for full year 2021, compared to $423.5 million ($11.00 per diluted share) in 2020. The 74% year-over-year increase in net earnings (75% for diluted EPS) reflects pricing power, expanded gross margin and greater overhead leverage in the current year.

BALANCE SHEET

  • Cash and cash equivalents at December 31, 2021 totaled $618.3 million, compared to $745.6 million at December 31, 2020, reflecting increased investments in real estate and development and share repurchases. Real estate assets increased from $2.8 billion at December 31, 2020 to $3.7 billion at December 31, 2021.
  • More than 75,000 total lots were owned or under control at December 31, 2021, compared to about 55,500 total lots at December 31, 2020. 9,000 net new lots were added in the fourth quarter of 2021, representing an estimated 45 net future communities, of which 93% are entry-level communities.
  • Debt-to-capital and net debt-to-capital ratios were 27.6% and 15.1%, respectively at December 31, 2021, compared with 30.3% and 10.5%, respectively at December 31, 2020.
  • During the full year 2021, the Company repurchased 639,346 shares of stock for $61.0 million, of which 243,885 shares of stock totaling $24.0 million were repurchased during the fourth quarter of 2021. $153.4 million remains available to repurchase under our authorized share repurchase program as of December 31, 2021.
  • On December 17, 2021, Meritage entered into an amendment to its $780 million unsecured revolving credit facility, which extends the maturity date to December 2026.

CONFERENCE CALL

Management will host a conference call to discuss its fourth quarter results at 8:00 a.m. Mountain Standard Time (10:00 a.m. Eastern Standard Time) on Thursday, January 27, 2022. The call will be webcast live with an accompanying slideshow available on the "Investor Relations" page of the Company's website at https://investors.meritagehomes.com. Telephone participants will be able to join by dialing in to 1-877-407-6951 US toll free or 1-412-902-0046 on the day of the call.

A replay of the call will be available via webcast beginning at approximately 11:00 a.m. Mountain Standard Time (1:00 p.m. Eastern Standard Time) on January 27, 2022 and extending through February 10, 2022, at https://investors.meritagehomes.com.


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

  Three Months Ended December 31,
   2021   2020  Change $ Change %
Homebuilding:       
 Home closing revenue$1,498,813  $1,409,160  $89,653  6%
 Land closing revenue 12   777   (765) (98)%
 Total closing revenue 1,498,825   1,409,937   88,888  6%
 Cost of home closings (1,064,068)  (1,071,375)  7,307  (1)%
 Cost of land closings (2,074)  (21,016)  18,942  (90)%
 Total cost of closings (1,066,142)  (1,092,391)  26,249  (2)%
 Home closing gross profit 434,745   337,785   96,960  29%
 Land closing gross loss (2,062)  (20,239)  18,177  (90)%
 Total closing gross profit 432,683   317,546   115,137  36%
Financial Services:       
 Revenue 5,583   5,768   (185) (3)%
 Expense (2,336)  (2,278)  (58) 3%
 Earnings from financial services unconsolidated entities and other, net 2,188   1,956   232  12%
 Financial services profit 5,435   5,446   (11) —%
Commissions and other sales costs (74,818)  (83,038)  8,220  (10)%
General and administrative expenses (53,152)  (47,937)  (5,215) 11%
Interest expense (72)  (1)  (71) N/M 
Other income, net 1,421   3,349   (1,928) (58)%
Earnings before income taxes 311,497   195,365   116,132  59%
Provision for income taxes (74,037)  (42,838)  (31,199) 73%
Net earnings$237,460  $152,527  $84,933  56%
        
Earnings per common share:       
 Basic    Change $ or shares Change %
 Earnings per common share$6.36  $4.06  $2.30  57%
 Weighted average shares outstanding 37,334   37,582   (248) (1)%
 Diluted       
 Earnings per common share$6.25  $3.97  $2.28  57%
 Weighted average shares outstanding 37,993   38,412   (419) (1)%


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

  Twelve Months Ended December 31,
   2021   2020  Change $ Change %
Homebuilding:       
 Home closing revenue$5,094,873  $4,464,389  $630,484  14%
 Land closing revenue 25,237   17,731   7,506  42%
 Total closing revenue 5,120,110   4,482,120   637,990  14%
 Cost of home closings (3,676,496)  (3,483,981)  (192,515) 6%
 Cost of land closings (26,320)  (38,525)  12,205  (32)%
 Total cost of closings (3,702,816)  (3,522,506)  (180,310) 5%
 Home closing gross profit 1,418,377   980,408   437,969  45%
 Land closing gross loss (1,083)  (20,794)  19,711  (95)%
 Total closing gross profit 1,417,294   959,614   457,680  48%
Financial Services:       
 Revenue 21,207   19,097   2,110  11%
 Expense (9,182)  (7,797)  (1,385) 18%
 Earnings from financial services unconsolidated entities and other, net 6,009   5,088   921  18%
 Financial services profit 18,034   16,388   1,646  10%
Commissions and other sales costs (285,403)  (287,901)  2,498  (1)%
General and administrative expenses (181,449)  (159,020)  (22,429) 14%
Interest expense (318)  (2,177)  1,859  (85)%
Other income, net 4,864   6,662   (1,798) (27)%
Loss on early extinguishment of debt (18,188)  —   (18,188) N/A 
Earnings before income taxes 954,834   533,566   421,268  79%
Provision for income taxes (217,390)  (110,091)  (107,299) 97%
Net earnings$737,444  $423,475  $313,969  74%
        
Earnings per common share:       
 Basic    Change $ or shares Change %
 Earnings per common share$19.61  $11.23  $8.38  75%
 Weighted average shares outstanding 37,610   37,718   (108) —%
 Diluted       
 Earnings per common share$19.29  $11.00  $8.29  75%
 Weighted average shares outstanding 38,233   38,484   (251) (1)%


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

  December 31, 2021 December 31, 2020
Assets:    
Cash and cash equivalents $618,335 $745,621
Other receivables  147,548  98,573
Real estate (1)  3,734,408  2,778,039
Real estate not owned  8,011  —
Deposits on real estate under option or contract  90,679  59,534
Investments in unconsolidated entities  5,764  4,350
Property and equipment, net  37,340  38,933
Deferred tax assets, net  40,672  36,040
Prepaids, other assets and goodwill  124,776  103,308
Total assets $4,807,533 $3,864,398
Liabilities:    
Accounts payable $216,009 $175,250
Accrued liabilities  337,277  296,121
Home sale deposits  42,610  25,074
Liabilities related to real estate not owned  7,210  —
Loans payable and other borrowings  17,552  23,094
Senior notes, net  1,142,486  996,991
Total liabilities  1,763,144  1,516,530
Stockholders' Equity:    
Preferred stock  —  —
Common stock  373  375
Additional paid-in capital  414,841  455,762
Retained earnings  2,629,175  1,891,731
Total stockholders’ equity  3,044,389  2,347,868
Total liabilities and stockholders’ equity $4,807,533 $3,864,398
(1) Real estate – Allocated costs:    
Homes under contract under construction  1,039,822 $873,365
Unsold homes, completed and under construction  484,999  357,861
Model homes  81,049  82,502
Finished home sites and home sites under development  2,128,538  1,464,311
Total real estate $3,734,408 $2,778,039


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

 Three Months Ended
December 31,		 Twelve Months Ended
December 31,
  2021   2020   2021   2020 
Depreciation and amortization$6,353  $8,556  $26,245  $31,052 
        
Summary of Capitalized Interest:       
Capitalized interest, beginning of period$57,293  $67,550  $58,940  $82,014 
Interest incurred 15,211   16,101   62,836   66,289 
Interest expensed (72)  (1)  (318)  (2,177)
Interest amortized to cost of home and land closings (16,179)  (24,710)  (65,205)  (87,186)
Capitalized interest, end of period$56,253  $58,940  $56,253  $58,940 
        
 December 31,
2021		 December 31,
2020		    
Senior notes, net, loans payable and other borrowings$1,160,038  $1,020,085     
Stockholders' equity 3,044,389   2,347,868     
Total capital 4,204,427   3,367,953     
Debt-to-capital 27.6%  30.3%    
        
Senior notes, net, loans payable and other borrowings$1,160,038  $1,020,085     
Less: cash and cash equivalents (618,335)  (745,621)    
Net debt 541,703   274,464     
Stockholders’ equity 3,044,389   2,347,868     
Total net capital$3,586,092  $2,622,332     
Net debt-to-capital 15.1%  10.5%    


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

  Twelve Months Ended December 31,
   2021   2020 
Cash flows from operating activities:    
Net earnings $737,444  $423,475 
Adjustments to reconcile net earnings to net cash (used in)/provided by operating activities:    
Depreciation and amortization  26,245   31,052 
Stock-based compensation  20,069   19,995 
Loss on early extinguishment of debt  18,188   — 
Equity in earnings from unconsolidated entities  (4,657)  (4,496)
Distribution of earnings from unconsolidated entities  4,951   3,594 
Other  (2,911)  14,406 
Changes in assets and liabilities:    
Increase in real estate  (948,055)  (40,089)
Increase in deposits on real estate under option or contract  (31,946)  (9,477)
(Increase)/decrease in receivables, prepaids and other assets  (65,114)  2,130 
Increase in accounts payable and accrued liabilities  76,158   88,942 
Increase in home sale deposits  17,536   828 
Net cash (used in)/provided by operating activities  (152,092)  530,360 
Cash flows from investing activities:    
Investments in unconsolidated entities  (1,708)  (5)
Distributions of capital from unconsolidated entities  —   1,000 
Purchases of property and equipment  (25,664)  (19,932)
Proceeds from sales of property and equipment  551   703 
Maturities/sales of investments and securities  2,795   2,489 
Payments to purchase investments and securities  (2,795)  (2,489)
Net cash used in investing activities  (26,821)  (18,234)
Cash flows from financing activities:    
Repayment of loans payable and other borrowings  (13,589)  (16,379)
Repayment of senior notes and senior convertible notes  (317,690)  — 
Proceeds from issuance of senior notes  450,000   — 
Payment of debt issuance costs  (6,102)  — 
Repurchase of shares  (60,992)  (69,592)
Net cash provided by/(used in) financing activities  51,627   (85,971)
Net (decrease)/increase in cash and cash equivalents  (127,286)  426,155 
Beginning cash and cash equivalents  745,621   319,466 
Ending cash and cash equivalents $618,335  $745,621 


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

         
  Three Months Ended
  December 31, 2021 December 31, 2020
  Homes Value Homes Value
Homes Closed:        
Arizona 760 $305,296 704 $228,990
California 352  228,774 444  286,744
Colorado 166  96,091 185  85,707
West Region 1,278  630,161 1,333  601,441
Texas 1,036  395,253 1,147  371,870
Central Region 1,036  395,253 1,147  371,870
Florida 417  159,707 524  183,411
Georgia 191  80,262 183  65,960
North Carolina 390  156,721 327  112,299
South Carolina 119  41,626 102  32,256
Tennessee 95  35,083 128  41,923
East Region 1,212  473,399 1,264  435,849
Total 3,526 $1,498,813 3,744 $1,409,160
         
Homes Ordered:        
Arizona 559 $238,663 485 $168,760
California 242  168,688 280  187,431
Colorado 193  112,344 210  103,351
West Region 994  519,695 975  459,542
Texas 1,127  452,712 1,019  341,240
Central Region 1,127  452,712 1,019  341,240
Florida 500  190,426 447  155,555
Georgia 161  70,017 147  54,618
North Carolina 345  140,339 368  131,857
South Carolina 126  42,247 108  36,733
Tennessee 114  43,624 110  36,524
East Region 1,246  486,653 1,180  415,287
Total 3,367 $1,459,060 3,174 $1,216,069


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

  Twelve Months Ended
  December 31, 2021 December 31, 2020
  Homes Value Homes Value
Homes Closed:        
Arizona 2,183 $802,401 2,019 $666,223
California 1,242  776,528 1,231  774,349
Colorado 630  335,490 738  354,677
West Region 4,055  1,914,419 3,988  1,795,249
Texas 4,165  1,500,682 3,894  1,273,661
Central Region 4,165  1,500,682 3,894  1,273,661
Florida 1,663  600,554 1,466  540,644
Georgia 647  249,882 642  229,577
North Carolina 1,390  528,840 1,132  388,776
South Carolina 377  129,367 331  105,369
Tennessee 504  171,129 381  131,113
East Region 4,581  1,679,772 3,952  1,395,479
Total 12,801 $5,094,873 11,834 $4,464,389
         
Homes Ordered:        
Arizona 2,335 $951,730 2,501 $823,339
California 1,191  773,166 1,530  956,681
Colorado 750  429,499 750  361,619
West Region 4,276  2,154,395 4,781  2,141,639
Texas 4,413  1,700,744 4,476  1,472,183
Central Region 4,413  1,700,744 4,476  1,472,183
Florida 1,981  738,132 1,645  590,966
Georgia 694  283,649 665  237,576
North Carolina 1,501  591,193 1,367  472,483
South Carolina 390  132,779 380  122,049
Tennessee 553  195,921 410  138,042
East Region 5,119  1,941,674 4,467  1,561,116
Total 13,808 $5,796,813 13,724 $5,174,938
         
Order Backlog:        
Arizona 1,145 $493,575 993 $343,917
California 393  271,383 444  274,680
Colorado 328  198,832 208  104,709
West Region 1,866  963,790 1,645  723,306
Texas 1,878  772,871 1,630  572,242
Central Region 1,878  772,871 1,630  572,242
Florida 868  352,584 550  214,790
Georgia 203  91,781 156  57,882
North Carolina 565  225,854 454  163,346
South Carolina 133  44,673 120  41,211
Tennessee 166  64,611 117  39,770
East Region 1,935  779,503 1,397  516,999
Total 5,679 $2,516,164 4,672 $1,812,547


Meritage Homes Corporation and Subsidiaries
Operating Data
(unaudited)

         
  Three Months Ended
  December 31, 2021 December 31, 2020
  Ending Average Ending Average
Active Communities:        
Arizona 39 38.5 33 34.0
California 22 20.0 16 18.0
Colorado 17 16.5 11 11.0
West Region 78 75.0 60 63.0
Texas 73 70.5 63 60.5
Central Region 73 70.5 63 60.5
Florida 41 39.5 31 32.5
Georgia 15 13.5 7 9.0
North Carolina 26 26.0 21 20.5
South Carolina 14 12.5 6 6.0
Tennessee 12 10.5 7 8.0
East Region 108 102.0 72 76.0
Total 259 247.5 195 199.5


  Twelve Months Ended
  December 31, 2021 December 31, 2020
  Ending Average Ending Average
Active Communities:        
Arizona 39 36.2 33 34.8
California 22 19.0 16 23.3
Colorado 17 14.6 11 12.0
West Region 78 69.8 60 70.1
Texas 73 65.4 63 66.9
Central Region 73 65.4 63 66.9
Florida 41 34.8 31 33.8
Georgia 15 11.2 7 12.5
North Carolina 26 24.6 21 20.6
South Carolina 14 8.8 6 6.0
Tennessee 12 9.2 7 9.8
East Region 108 88.6 72 82.7
Total 259 223.8 195 219.7

ABOUT MERITAGE HOMES CORPORATION

Meritage Homes is the sixth-largest public homebuilder in the United States, based on homes closed in 2020. The Company offers a variety of homes that are designed with a focus on entry-level and first move-up buyers in Arizona, California, Colorado, Texas, Florida, Georgia, North Carolina, South Carolina and Tennessee.

Meritage Homes has delivered over 150,000 homes in its 36-year history, and has a reputation for its distinctive style, quality construction, and award-winning customer experience. The Company is the industry leader in energy-efficient homebuilding, an eight-time recipient of the U.S. Environmental Protection Agency’s (EPA) ENERGY STAR® Partner of the Year for Sustained Excellence Award since 2013 for innovation and industry leadership in energy efficient homebuilding, and the recipient of the EPA Indoor airPLUS Leader Award.

For more information, visit www.meritagehomes.com.

The information included in this press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include expectations about the housing market in general; projected 2022 home closings, home closing revenue, home closing gross margins, effective tax rate and diluted earnings per share; future community counts; trends in construction costs; and expectations about our future results.

Such statements are based on the current beliefs and expectations of Company management and current market conditions, which are subject to significant uncertainties and fluctuations. Actual results may differ from those set forth in the forward-looking statements. The Company makes no commitment, and disclaims any duty, except as required by law, to update or revise any forward-looking statements to reflect future events or changes in these expectations. Meritage's business is subject to a number of risks and uncertainties. As a result of those risks and uncertainties, the Company's stock and note prices may fluctuate dramatically. These risks and uncertainties include, but are not limited to, the following: changes in interest rates and the availability and pricing of residential mortgages; inflation in the cost of materials used to develop communities and construct homes; supply chain and labor constraints; our ability to obtain performance and surety bonds in connection with our development work; the ability of our potential buyers to sell their existing homes; legislation related to tariffs; the adverse effect of slow absorption rates; impairments of our real estate inventory; cancellation rates; competition; home warranty and construction defect claims; failures in health and safety performance; fluctuations in quarterly operating results; our level of indebtedness; our ability to obtain financing if our credit ratings are downgraded; our potential exposure to and impacts from natural disasters or severe weather conditions; the availability and cost of finished lots and undeveloped land; the success of our strategy to offer and market entry-level and first move-up homes; a change to the feasibility of projects under option or contract that could result in the write-down or write-off of earnest or option deposits; our limited geographic diversification; the replication of our energy-efficient technologies by our competitors; shortages in the availability and cost of subcontract labor; our exposure to information technology failures and security breaches and the impact thereof; the loss of key personnel; changes in tax laws that adversely impact us or our homebuyers; our inability to prevail on contested tax positions; failure to comply with laws and regulations; our compliance with government regulations; negative publicity that affects our reputation; potential disruptions to our business by an epidemic or pandemic (such as COVID-19), and measures that federal, state and local governments and/or health authorities implement to address it; and other factors identified in documents filed by the Company with the Securities and Exchange Commission, including those set forth in our Form 10-K for the year ended December 31, 2020 and our Form 10-Q for the quarter ended September 30, 2021 under the caption "Risk Factors," which can be found on our website at https://investors.meritagehomes.com.

  
Contacts:Emily Tadano, VP Investor Relations
 (480) 515-8979 (office)
 investors@meritagehomes.com