Meritage Homes Corporation (NYSE: MTH) on Monday reported preliminary and unaudited home orders, closings and backlog for the first quarter of 2020.
First quarter orders were up 23% year over year. Order cancellation rates were flat at 13% for the first quarter in both years, with an increase in March cancellations to 16% in 2020 over 12% in 2019 due to weakening business conditions in the latter half of March associated with the spread of the COVID-19 pandemic across the U.S. The company said it is unclear how long these adverse conditions will persist or how they will impact future results.
| Preliminary Net Orders (unaudited) | 2020 | 2019 | Y/Y | |
| January | 1,019 | 738 | 38 | % |
| February | 1,126 | 748 | 51 | % |
| March | 957 | 1,044 | -8 | % |
| Total 1st Quarter | 3,102 | 2,530 | 23 | % |
Home closings totaled 2,316 for the first quarter of 2020, up 31% compared to 1,765 for the first quarter of 2019.
Ending backlog totaled 3,568 units as of March 31, 2020, a 12% increase over the 3,198 orders in backlog at March 31, 2019.
Total liquidity including cash and investments plus available borrowing capacity under the company’s existing credit facility was approximately $1.0 billion as of March 31, 2020.
“We are closely monitoring updates from the Centers for Disease Control and Prevention, along with guidance from local and U.S. government and public health agencies, and continually adapting our operations and business to safeguard our employees, customers and work environments,” said Steven J. Hilton, chairman and CEO of Meritage Homes. “At the same time, we’re doing everything we can to continue selling, building and delivering homes by leveraging our existing digital platform and tools, or finding creative ways to interact with our customers and other stakeholders.”
He continued, “Most of our communities across the country remain open, with the exception of a few counties in California, due to recognition of the essential nature of housing construction by most states, counties and municipal governments. We are seeing customers by appointment only, so traffic levels declined but our conversion rates increased in the first quarter. Buyers are utilizing our virtual home buying tools to find, tour, finance and purchase a home without the need for in-person meetings. We offer 24/7 mortgage pre-approvals, home search tools and virtual design through our website, enabling interested buyers to perform their own research or connect directly with one of our sales consultants, set up a virtual tour, speak to a mortgage professional, electronically sign a contract and even pay their earnest money deposit using a debit or credit card — all from the safety of their current home.”
As previously announced, Meritage Homes plans to release the company’s first quarter 2020 results on Tuesday, April 28, 2020 after the market closes
