Meritage Homes Reports Second Quarter 2009 Results
SECOND QUARTER 2009 HIGHLIGHTS: - Generated positive cash flow for the seventh consecutive quarter, ending with $385M cash - Reduced net debt-to-capital ratio to 33% - Reported net loss of $74M for the quarter; generated $13M of adjusted EBITDA* - Reduced general and administrative expenses by 33% from the prior year, excluding the benefit of a one-time legal settlement in the second quarter of 2008 - Increased net orders sequentially from the first quarter, while sales cancellation rate fell to 23% - Decided to terminate unneeded $150M credit facility YEAR TO DATE 2009 SELECTED RESULTS: - Reported net loss of $92M for the first half of 2009; generated $23M of adjusted EBITDA* - Maintained light land supply of 2.7 years of lots (based on ttm closings) with 36% optioned - Retired $24M senior subordinated notes at a 41% discount in exchange for approximately 783,000 shares of common stock
SCOTTSDALE, Ariz., July 27, 2009 (GLOBE NEWSWIRE) --Meritage Homes Corporation (NYSE:MTH), a leading U.S. homebuilder, today announced second quarter results for the period ended June 30, 2009.
Summary Operating Results (unaudited)
(Dollars in millions, except per share amounts)
---------------------------------------------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 %Chg 2009 2008 %Chg
----------------------------------------------------------------------
Homes closed (units) 890 1,388 -36% 1,822 2,716 -33%
Home closing revenue $ 220 $ 374 -41% $ 451 $ 746 -39%
----------------------------------------------------------------------
Sales orders (units) 1,147 1,473 -22% 2,134 3,107 -31%
Sales order value $ 263 $ 387 -32% $ 496 $ 807 -39%
----------------------------------------------------------------------
Ending backlog (units) 1,593 2,679 -41%
Ending backlog value $ 382 $ 731 -48%
----------------------------------------------------------------------
Net loss (including write
-offs) $ (74) $ (23) -214% $ (92) $ (69) -34%
Adjusted pre-tax (loss)/
earnings* (excluding
write-offs) $ (5) $ 5 -209% $ (13) $ (6) -127%
Diluted EPS (including
write-offs) $(2.37) $(0.79) -200% $(2.97) $(2.46) -21%
----------------------------------------------------------------------
* Adjusted EBITDA excludes impairments: See non-GAAP reconciliations
of net loss to adjusted pre-tax loss on "Operating Results"
statement, and adjusted EBITDA on "Non-GAAP Financial Disclosures"
statement.
SECOND QUARTER HIGHLIGHTS
"I am pleased with the improvements we achieved in several key measures this quarter, despite the weaker economy that is evident in our year over year comparisons," said Steven J. Hilton, chairman and chief executive officer of Meritage Homes. "We strengthened our balance sheet by generating $40 million of cash from operations, fortifying our cash position to $385 million at quarter-end and reducing our net debt to capital ratio to 33%. We also believe that we are making progress toward our goal of returning to profitability, as we generated positive EBITDA before impairments for both the quarter and the first half of the year. We achieved a pre-impairment gross margin of 12.3% while keeping our overhead expenses down. And we increased sales from our first to second quarter this year, aided by the lowest cancellation rate we've experienced since the third quarter of 2005."
"We are also seeing positive results from our product repositioning," said Mr. Hilton. "Armed today with a stronger balance sheet and increased liquidity, we have been replacing older communities as they sell out, with new lower-priced lots. As a result, we increased our active communities to 178 during the second quarter. The newer communities represented only about 7% of our second quarter home closing revenue, as many are still in the start-up phases, and we expect them to have a more meaningful impact on our results over time.
He continued, "These communities are designed to compete with increased foreclosures in today's market. We are offering more affordable homes in these communities for the entry-level and first-time move-up buyers, who comprise the largest segment of today's home buying market. Those buyers are responding well to the exceptional values we're offering in our new communities."
SECOND QUARTER OPERATING RESULTS
Net home sales in the second quarter were 22% lower than last year, partially due to a 16% decline in active communities since the second quarter of 2008. However, average sales per community for the second quarter remained nearly flat year over year, at 6.6 in 2009 compared to 6.9 in 2008, while increasing from 5.7 in the first quarter of 2009. Total sales for the second quarter 2009 showed a sequential improvement from the first quarter due to monthly increases in sales from February through May. The second quarter cancellation rate of 23% in 2009 was lower than the 26% rate in the previous quarter and the lowest sales cancellation rate in more than three years.
Second quarter total order value was down 32% year over year, due to fewer homes sold and a decline in average sales price to approximately $230,000 in 2009, compared to $263,000 in 2008. The lower average price reflected reductions in construction costs that enabled the Company to reduce home prices at all levels, as well as a higher ratio of entry-level homes sold. Approximately 68% of second quarter 2009 sales were to entry level and first time move-up buyers, compared to approximately 61% in the prior year.
Meritage's second quarter home closing revenue declined 41% year over year, due to 36% fewer homes closed and an 8% lower average closing price of $248,000 in the second quarter of 2009, compared to $269,000 in the second quarter of 2008. While closing revenue declined in all states but Colorado, Texas was down less than others, at 28% lower than a year ago.
Despite price reductions, Meritage maintained gross margins by introducing more efficient home designs, realizing construction efficiencies and negotiating better terms with its subcontractors. Second quarter 2009 total gross margin was 12.3% before impairments, compared to 12.0% in the prior quarter and 13.8% in the second quarter of 2008. Including impairments, gross margin was -17.7% in the second quarter of 2009, compared to 7.5% and 4.4% in the prior quarter and prior year, respectively.
Total general and administrative expenses were $14 million for the second quarter of 2009. Excluding the benefit of a one-time legal settlement of $10 million that reduced G&A expense in the second quarter of 2008, second quarter G&A expenses this year were down 33% from last year.
Meritage reported a net loss for the second quarter 2009 of $74 million or $2.37 per share, compared to a net loss of $23 million or $0.79 per share in the second quarter 2008. The second quarter net losses included $67 million of pre-tax real estate-related impairment charges in 2009, compared to $39 million of similar charges in 2008. Before those impairment charges, the pre-tax loss from operations was $5 million in the second quarter of 2009, compared with a pre-tax profit of $5 million in the second quarter of 2008. The 2009 results also include a $7 million gain on early extinguishment of debt in the second quarter of 2009, whereas 2008 results benefited from the one-time legal settlement.
Mr. Hilton explained, "We recorded a $55 million impairment charge in the current quarter related to the termination of our largest purchase agreement for about 1,200 lots in north Phoenix. This was the last large option contract we had remaining. After much analysis and discussion, we determined that our expected returns from that project did not support its continued development at this time. Aside from that one project, our total impairments were $12 million in the second quarter, most of which was in Las Vegas, one of the most challenged housing markets in the country," said Mr. Hilton. "We now have only $16 million of option deposits and $14 million of investments in joint ventures remaining on our balance sheet. These balances represent lots and land predominantly located in Texas, where we remain profitable and have recorded significantly fewer impairments. Because the total value of our remaining option deposits and JV investments is only $30 million, we believe our risk of significant additional impairments is limited. Even if the market were to deteriorate further, we would expect any impairments of our owned assets to be small and in line with any decline in the market."
YEAR TO DATE RESULTS
Meritage reported a net loss for the first half 2009 of $92 million or $2.97 per share, compared to a net loss of $69 million or $2.46 per share in the first half 2008. The net loss in the first half of 2009 included no tax benefit, while the loss in 2008 was partially offset by a $36 million tax benefit. Since the third quarter of 2008, the Company has fully reserved its tax assets, which totaled $162 million as of June 30, 2009. These off-balance sheet assets are available to offset federal income tax liability on an estimated $450 million of future taxable income.
Year to date net losses included $77 million of pre-tax real estate-related impairment charges in 2009, compared to $99 million of similar charges in 2008. Before these charges, the pre-tax loss from operations was $13 million in the first half of 2009, compared with a pre-tax loss of $6 million in the first half of 2008. These results also included a $9 million gain on early extinguishment of debt in the first half of 2009 other income, as well as the benefit of a $10 million legal settlement in 2008.
REAL ESTATE ASSETS
The Company held 491 unsold homes in inventory at the end of the second quarter 2009, an average of 2.8 specs per community, and lower than its inventory of 725 unsold homes or 3.4 per community in the prior year. Though Meritage remains primarily a build-to-order homebuilder, the Company increased its level of spec homes started in 2009 to capture buyers wanting to move into a home quickly. Approximately half of Meritage's 2009 second quarter sales were from specs, causing total spec inventories to remain low.
"We have seen an increase in land acquisition activity in our markets in just the last few months," Mr. Hilton explained. "During the first half of 2009, we entered into purchase and option contracts for approximately 550 new lots priced at deeply discounted values. We continue to actively monitor the pipeline of available lots and are evaluating lot acquisition opportunities as they arise. We expect to reinvest in other new high-quality, low-cost lots over the next few quarters, where we believe we can achieve a more normal profit margin."
At June 30, 2009, Meritage's total lot supply was 12,986, including 8,374 owned lots, or about 2.7 years total supply based on trailing twelve months closings. By comparison, the Company's total lot supply was 21,902, or 3.1 years supply at June 30, 2008, with 9,532 of those lots owned. The reduction from the first quarter's total lot count of 15,069 mainly reflects the abandonment of optioned lots in north Phoenix and Las Vegas, as well as lots utilized for new home starts.
STOCK EXCHANGED FOR DEBT
During the current quarter, Meritage retired $18 million principal amount of its 7.731% senior subordinated notes due 2017, issuing approximately 533,000 shares of common stock in exchange for those notes. This resulted in a $7 million gain on the early extinguishment of debt, included as a component of other income.
In the first six months of 2009, the Company retired a total of $24 million of these notes in exchange for 783,000 shares of Meritage common stock with an implied discount of 41% to the face value of the notes retired, saving approximately two million dollars of future interest cost per year. Meritage may continue to retire additional notes in the future, based on market conditions.
TERMINATING CREDIT FACILITY
"We are planning to terminate our existing credit facility during the third quarter, as we do not anticipate needing it before it expires in May of 2011. We expect to enter into one or more new credit commitments with a total capacity of approximately $40-50 million, to replace approximately $22 million in letters of credit supported by the existing facility. Terminating our current facility will save approximately two million dollars in fees over the remaining term of the agreement, but will result in a third quarter expense of approximately one million dollars to write-off capitalized origination fees," said Larry W. Seay, executive vice president and chief financial officer for Meritage Homes. "While we are currently in compliance with all of our covenants, we'll no longer be subject to the covenants and related restrictions imposed by the current credit facility after it is terminated.
"Based on our preliminary discussions with the rating agencies, we do not anticipate that this termination will cause any negative actions regarding our corporate bond ratings."
SUMMARY
"We've strengthened our balance sheet over the last few of years by reducing our inventories and debt, generating cash, building liquidity and reducing our cost structure as homebuilding activity slowed. Many home builders and land developers have gone out of business, and the industry is consolidating. Lots once owned by these companies are coming back onto the market at greatly reduced prices, and we believe Meritage is well-positioned to take advantage of those opportunities," said Mr. Hilton.
"We believe that homebuilders like Meritage with low levels of high-priced legacy lots, combined with adequate cash to purchase new lower-priced lots, will have a strategic advantage as housing demand recovers and home sales increase. That strategic advantage should translate to a quicker return to profitability, in turn benefiting our shareholders. Our goal is to return to profitability sometime during 2010."
Management will host a conference call to discuss these results on July 28, 2009 at 11:00 a.m. Eastern Time (8:00 a.m. Pacific Time.) The call will be webcast by Business-to-Investor, Inc. (B2i), with an accompanying slideshow available on the "Investor Relations" page of the Company's web site at http://investors.meritagehomes.com. For telephone participants, the dial-in number is 888-241-0558 with a passcode of "Meritage." Participants are encouraged to dial in five minutes before the call begins. A replay of the call will be available after approximately 12:30 p.m. ET, July 28, 2009 on the website noted above, or by dialing 800-365-8354, and referencing passcode 16423939.
Meritage Homes Corporation and Subsidiaries
Operating Results
(Unaudited)
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008
--------- --------- --------- ---------
Operating results
Home closing revenue $ 220,414 $ 373,923 $ 451,392 $ 745,579
Land closing revenue 1,125 1,375 1,285 3,148
--------- --------- --------- ---------
Total closing revenue 221,539 375,298 452,677 748,727
Home closing gross (loss)/
profit (39,084) 23,268 (21,734) 24,349
Land closing gross loss (141) (6,652) (169) (6,566)
--------- --------- --------- ---------
Total closing gross
(loss)/profit $ (39,225) $ 16,616 $ (21,903) $ 17,783
Commissions and other
sales costs (18,098) (33,669) (37,243) (67,434)
General and administrative
expenses(1) (13,775) (10,453) (27,644) (31,746)
Interest expense (11,332) (5,538) (19,662) (11,199)
Other income/(loss),
net(2) 10,536 (1,116) 16,289 (12,348)
--------- --------- --------- ---------
Loss before income taxes (71,894) (34,160) (90,163) (104,944)
(Provision)/benefit for
income taxes (1,708) 10,692 (1,794) 36,171
--------- --------- --------- ---------
Net loss $ (73,602) $ (23,468) $ (91,957) $ (68,773)
========= ========= ========= =========
Loss per share
Basic and Diluted:
Loss per share $ (2.37) $ (0.79) $ (2.97) $ (2.46)
Weighted average shares
outstanding 31,055 29,594 30,933 27,953
Non-GAAP Reconciliations:
Total closing gross
(loss)/profit $ (39,225) $ 16,616 $ (21,903) $ 17,783
Add: Real estate-related
impairments
Terminated lot options
and land sales 61,480 10,968 62,714 25,597
Impaired projects 4,900 24,174 14,134 53,894
--------- --------- --------- ---------
Adjusted closing gross
profit $ 27,155 $ 51,758 $ 54,945 $ 97,274
========= ========= ========= =========
Loss before income taxes $ (71,894) $ (34,160) $ (90,163) $(104,944)
Add: Real estate-related
and joint venture (JV)
impairments
Terminated lot options
and land sales 61,480 10,968 62,714 25,597
Impaired projects 4,900 24,174 14,134 53,894
JV impairments 219 3,873 219 19,689
--------- --------- --------- ---------
Adjusted (loss)/income
before income taxes $ (5,295) $ 4,855 $ (13,096) $ (5,764)
========= ========= ========= =========
(1) General and administrative expenses in 2008 reflect a $10.2
million reduction related to a successful legal settlement.
(2) Other income is net of the Joint Venture (JV) impairments shown
in the "Non-GAAP reconciliations" section above. 2009 amounts
include a gain on early extinguishment of debt of $7 million in
the second quarter and $9 million in the first half of the year.
Meritage Homes Corporation and Subsidiaries
Non-GAAP Financial Disclosures
(In thousands)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008
-------- -------- -------- --------
EBITDA reconciliation:(1)
Net loss $(73,602) $(23,468) $(91,957) $(68,773)
Provision/(benefit) for
income taxes 1,708 (10,692) 1,794 (36,171)
Interest amortized to cost
of sales and interest
expense 16,557 13,007 31,549 27,768
Depreciation and
amortization 2,120 3,216 4,545 6,564
-------- -------- -------- --------
EBITDA $(53,217) $(17,937) $(54,069) $(70,612)
Add back:
Real estate-related
impairments 66,599 39,015 77,067 99,180
Fixed asset impairments -- -- -- --
Goodwill and intangible
asset impairments -- -- -- --
-------- -------- -------- --------
Adjusted EBITDA $ 13,382 $ 21,078 $ 22,998 $ 28,568
======== ======== ======== ========
As of and for the Twelve
Months Ended June 30,
2009 2008
----------- -----------
EBITDA reconciliation: (1)
Net loss $ (315,119) $ (316,164)
Provision/(benefit) for
income taxes 53,934 (178,676)
Interest amortized to cost of
sales and interest expense 63,399 58,862
Depreciation and
amortization 13,650 15,338
----------- -----------
EBITDA $ (184,136) $ (420,640)
Add back:
Real estate-related impairments 241,327 400,459
Fixed asset impairments -- 3,124
Goodwill and intangible
asset impairments 1,133 102,538
----------- -----------
Adjusted EBITDA $ 58,324 $ 85,481
=========== ===========
Interest coverage ratio:(2)
Adjusted EBITDA $ 58,324 $ 85,481
Interest incurred 49,798 56,004
Interest coverage ratio 1.2 1.5
Net debt-to-capital:(3)
Notes payable and other
borrowings $ 604,926 $ 634,976
Less: cash and cash
equivalents (385,305) (115,153)
----------- -----------
Net debt 219,621 519,823
Stockholders' equity 454,495 746,794
----------- -----------
Capital $ 674,116 $ 1,266,617
Net debt-to-capital 32.6% 41.0%
(1) EBITDA and adjusted EBITDA are non-GAAP financial measures
representing net earnings /(loss) before interest amortized to
cost of sales and interest expense, income taxes, depreciation
and amortization, with write-offs and non-cash impairment charges
also excluded from adjusted EBITDA. A non-GAAP financial measure
is a numerical measure of a company's historical or future
financial performance, financial position or cash flows that
excludes amounts, or is subject to adjustments that have the
effect of excluding amounts, that are included in the most
directly comparable measure calculated and presented in
accordance with GAAP in the statement of operations, balance
sheet, or statement of cash flows (or equivalent statements) of
the Company; or includes amounts, or is subject to adjustments
that have the effect of including amounts, that are excluded from
the most directly comparable measure so calculated and presented.
In this regard, GAAP refers to generally accepted accounting
principles in the United States. We have provided a
reconciliation of these non-GAAP financial measures to the most
directly comparable GAAP financial measure. EBITDA is presented
here because it is used by management to analyze and compare
Meritage with other homebuilding companies on the basis of
operating performance and we believe it is a financial measure
widely used by investors and analysts in the homebuilding
industry. EBITDA as presented may not be comparable to similarly
titled measures reported by other companies because not all
companies calculate EBITDA in an identical manner and, therefore,
it is not necessarily an accurate means of comparison between
companies. EBITDA is not intended to represent cash flows for the
period or funds available for management's discretionary use nor
has it been presented as an alternative to operating income or as
an indicator of operating performance and it should not be
considered in isolation or as a substitute for measures of
performance prepared in accordance with GAAP. Adjusted EBITDA is
presented because it more closely, although not exactly,
resembles the comparable covenant calculations under our
revolving credit facility and senior and senior subordinated note
indentures.
(2) Interest coverage ratio is calculated as the trailing four
quarters' adjusted EBITDA divided by the trailing four quarters'
interest incurred. This calculation may differ from our interest
coverage ratio as computed for our credit facility covenant due
to additional non-cash reconciling items, such as stock
compensation.
(3) Net debt-to-capital is calculated as notes payable and other
borrowings less cash and cash equivalents, divided by the sum of
notes payable and other borrowings, less cash and cash
equivalents, plus stockholders' equity.
Meritage Homes Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)
(unaudited)
June 30, Dec. 31,
2009 2008
---------- ----------
Assets:
Cash and cash equivalents $ 385,310 $ 205,923
Income tax receivable 2,146 111,508
Other receivables 25,864 31,046
Real estate(1) 710,129 859,305
Investments in unconsolidated entities 14,416 17,288
Deposits on real estate under option or
contract 16,436 51,658
Other assets 46,349 49,521
---------- ----------
Total assets $1,200,650 $1,326,249
========== ==========
Liabilities:
Senior notes $ 479,051 $ 478,968
Senior subordinated notes 125,875 150,000
Revolving credit facility -- --
Accounts payable, accrued liabilities,
home sale deposits and other liabilities 141,229 170,075
---------- ----------
Total liabilities 746,155 799,043
Total stockholders' equity 454,495 527,206
---------- ----------
Total liabilities and equity $1,200,650 $1,326,249
========== ==========
(1)Real estate - Allocated costs:
Homes under contract under construction $ 160,649 $ 170,347
Finished home sites and home sites under
development 375,015 455,048
Unsold homes, completed and under
construction 78,654 158,378
Model homes 40,855 48,608
Land held for development or sale 54,956 26,924
---------- ----------
Total allocated costs $ 710,129 $ 859,305
========== ==========
Meritage Homes Corporation and Subsidiaries
Condensed Consolidated Statement of Cash Flows
(In thousands)
(unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
2009 2008 2009 2008
-------- -------- -------- --------
Operating results
Net loss $(73,602) $(23,468) $(91,957) $(68,773)
Real-estate related
impairments 66,380 35,142 76,848 79,491
Increase in deferred taxes -- (462) -- (9,023)
Equity in earnings/(losses)
from JVs and distributions
of JV earnings, net 649 4,183 1,607 20,979
Decrease in real estate and
deposits, net 32,225 15,101 110,073 81,246
Decrease in income tax
receivable -- 3,113 107,660 77,972
Other operating activities 13,934 (12,976) (26,026) (80,136)
-------- -------- -------- --------
Net cash provided by
operating activities 39,586 20,633 178,205 101,756
Cash used in investing
activities (1,308) (12,611) (1,451) (15,835)
-------- -------- -------- --------
Payments under Credit
Facility -- (1,800) -- (82,000)
Proceeds from issuance of
common stock, net 2,633 82,775 2,633 82,775
Other financing activities -- 16 -- 780
-------- -------- -------- --------
Net cash provided by
financing activities 2,633 80,991 2,633 1,555
-------- -------- -------- --------
Net increase in cash 40,911 89,013 179,387 87,476
Beginning cash and cash
equivalents 344,399 26,140 205,923 27,677
-------- -------- -------- --------
Ending cash and cash
equivalents $385,310 $115,153 $385,310 $115,153
======== ======== ======== ========
Meritage Homes Corporation and Subsidiaries
Operating Data
(Dollars in thousands)
(unaudited)
For the Three Months Ended June 30,
2009 2008
------------------- -------------------
Homes Value Homes Value
-------- -------- -------- --------
Homes Closed:
California 64 $ 22,299 152 $ 64,548
Nevada 41 8,221 61 16,242
-------- -------- -------- --------
West Region 105 30,520 213 80,790
Arizona 152 30,786 266 68,432
Texas 552 137,473 789 191,839
Colorado 30 10,196 26 9,197
-------- -------- -------- --------
Central Region 734 178,455 1,081 269,468
Florida 51 11,439 94 23,665
-------- -------- -------- --------
East Region 51 11,439 94 23,665
-------- -------- -------- --------
Total 890 $220,414 1,388 $373,923
======== ======== ======== ========
Homes Ordered:
California 103 $ 31,352 165 $ 65,137
Nevada 40 7,524 67 17,509
-------- -------- -------- --------
West Region 143 38,876 232 82,646
Arizona 241 46,510 285 60,823
Texas 654 147,878 876 218,454
Colorado 46 14,085 29 10,282
-------- -------- -------- --------
Central Region 941 208,473 1,190 289,559
Florida 63 16,144 51 14,599
-------- -------- -------- --------
East Region 63 16,144 51 14,599
-------- -------- -------- --------
Total 1,147 $263,493 1,473 $386,804
======== ======== ======== ========
Meritage Homes Corporation and Subsidiaries
Operating Data
(Dollars in thousands)
(unaudited)
For the Six Months Ended June 30,
2009 2008
------------------- -------------------
Homes Value Homes Value
-------- -------- -------- --------
Homes Closed:
California 156 $ 55,723 325 $134,827
Nevada 79 17,089 134 36,117
-------- -------- -------- --------
West Region 235 72,812 459 170,944
Arizona 350 72,446 475 129,868
Texas 1,068 260,838 1,528 374,611
Colorado 69 22,070 64 21,981
-------- -------- -------- --------
Central Region 1,487 355,354 2,067 526,460
Florida 100 23,226 190 48,175
-------- -------- -------- --------
East Region 100 23,226 190 48,175
-------- -------- -------- --------
Total 1,822 $451,392 2,716 $745,579
======== ======== ======== ========
Homes Ordered:
California 157 $ 53,205 366 $145,145
Nevada 66 12,912 152 39,053
-------- -------- -------- --------
West Region 223 66,117 518 184,198
Arizona 409 78,805 545 120,902
Texas 1,302 296,777 1,801 435,817
Colorado 72 22,568 77 27,550
-------- -------- -------- --------
Central Region 1,783 398,150 2,423 584,269
Florida 128 31,349 166 38,546
-------- -------- -------- --------
East Region 128 31,349 166 38,546
-------- -------- -------- --------
Total 2,134 $495,616 3,107 $807,013
======== ======== ======== ========
Order Backlog:
California 88 $ 31,392 205 $ 91,850
Nevada 12 2,276 82 21,596
-------- -------- -------- --------
West Region 100 33,668 287 113,446
Arizona 249 48,570 460 111,592
Texas 1,121 266,094 1,745 445,557
Colorado 47 13,763 66 23,706
-------- -------- -------- --------
Central Region 1,417 328,427 2,271 580,855
Florida 76 20,160 121 37,118
-------- -------- -------- --------
East Region 76 20,160 121 37,118
-------- -------- -------- --------
Total 1,593 $382,255 2,679 $731,419
======== ======== ======== ========
Meritage Homes Corporation and Subsidiaries
Operating Data
(unaudited)
Second Quarter 2009 Second Quarter 2008
--------------------- ---------------------
Beg. End Beg. End
---------- --------- --------- ---------
Active Communities:
California 9 12 23 17
Nevada 12 12 11 12
---------- --------- --------- ---------
West Region 21 24 34 29
Arizona 28 31 31 31
Texas 107 108 132 136
Colorado 3 4 6 5
---------- --------- --------- ---------
Central Region 138 143 169 172
Florida 11 11 12 12
---------- --------- --------- ---------
East Region 11 11 12 12
---------- --------- --------- ---------
Total 170 178 215 213
========== ========= ========= =========
First Half 2009 First Half 2008
--------------------- --------------------
Beg. End Beg. End
---------- --------- --------- ---------
Active Communities:
California 12 12 27 17
Nevada 12 12 11 12
---------- --------- --------- ---------
West Region 24 24 38 29
Arizona 31 31 36 31
Texas 109 108 127 136
Colorado 3 4 6 5
---------- --------- --------- ---------
Central Region 143 143 169 172
Florida 11 11 13 12
---------- --------- --------- ---------
East Region 11 11 13 12
---------- --------- --------- ---------
Total 178 178 220 213
========== ========= ========= =========
About Meritage Homes Corporation
Meritage Homes Corporation (NYSE:MTH) builds primarily single-family homes across the western and southern United States under the Meritage, Monterey and Legacy brands. Meritage has active communities in Houston, Dallas/Ft. Worth, Austin, San Antonio, Phoenix/Scottsdale, Tucson, Las Vegas, the California East Bay/Central Valley and Inland Empire, Denver and Orlando. The Company was ranked by Builder magazine in 2008 as the 10th largest homebuilder in the U.S. and ranked #803 on the 2008 Fortune 1000 list. For more information about the Company, visit www.meritagehomes.com.
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This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include those regarding the outlook for the Company and homebuilding in 2009 and 2010, including its outlook for Texas; strategic actions to lower costs; strategy and intentions to deploy capital to acquire land at attractive prices; strategy and ability to minimize losses, return to profitability and increase margins; intentions to increase spec inventory; potential retirement of debt; expectation to terminate the existing revolving credit facility and enter into new letter of credit commitments; and belief that the Company has little risk of future impairments or real estate related impairment charges. Such statements are based upon preliminary financial and operating data which are subject to finalization by management and review by our independent registered public accountants, as well as 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, including: weakness in the homebuilding market resulting from the current economic downturn; interest rates and changes in the availability and pricing of residential mortgages; the ability of our potential buyers to sell their existing homes; the adverse effect of slower sales absorption rates; housing affordability; fluctuations in demand, competition, sales orders, cancellation rates and home prices in our markets; potential write-downs or write-offs of assets, including pre-acquisition costs and deposits; 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 propensity of homebuyers to cancel purchase orders with us; the availability and cost of insurance; construction defect and home warranty claims; the loss of key personnel; our success in prevailing on contested tax positions; the impact of deferred tax valuation allowances and our ability to preserve our operating loss carryforwards; the availability and cost of materials and labor; changes in the availability and pricing of real estate in the markets in which the Company operates; inflation in the cost of materials used to construct homes; fluctuations in quarterly operating results; the Company's financial leverage and level of indebtedness; our ability to take certain actions because of restrictions contained in the indentures for the Company's senior and senior subordinated notes and the agreement for the unsecured credit facility and our ability to raise additional capital when and if needed; government regulations and legislative or other initiatives that seek to restrain growth or new housing construction or similar measures; successful integration of future acquisitions; consumer confidence, which can be impacted by economic and other factors such as terrorism, war, or threats thereof and changes in energy prices or financial markets; our potential exposure to natural disasters; 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, 2008 under the caption "Risk Factors," as updated in our Quarterly Report on Form 10-Q for the period ended March 31, 2009. As a result of these and other factors, the Company's stock and note prices may fluctuate dramatically.
CONTACT: Meritage Homes Corporation
Investor Relations:
Brent Anderson, Vice President-Investor Relations
(972) 580-6360
Corporate Communications:
Jane Hays, Vice President-Corporate Communications
(972) 580-6353
Released July 27, 2009