Exhibit 99.1
(PRESS RELEASE LOGO)
meritage homes reports third quarter 2010 results
significant year-over-year margin improvement drives positive earnings for the third
consecutive quarter, with eps of $0.04
third quarter 2010 selected results (comparisons to third quarter 2009):
 
Generated positive pre-tax income despite lower closing volumes, as a result of margin improvements
 
 
Average closing price increased 21%, resulting in 1% higher closing revenue on 16% fewer closings, with an average of 12% fewer actively selling communities
 
 
Improved home closing gross margin to 18.2% from 10.0% in the prior year (18.5% vs 14.5%, excluding impairments)
 
 
Opened 16 new communities for sales on recently acquired lots, including several state-of-the-art extreme energy-efficient communities in Arizona
year to date 2010 selected results:
 
Reported positive earnings for three consecutive quarters, with total net income of $8M for the first nine months of 2010, compared to a net loss of $110M for the first three quarters of 2009
 
 
Reduced net debt/capital ratio to 27% from 35% in the prior year
 
 
Issued $200M of 7.15% senior notes due in 2020 and retired $195M of notes due in 2014 and 2015
Scottsdale, Ariz. (October 27, 2010) – Meritage Homes Corporation (NYSE: MTH), a leading U.S. homebuilder, today announced third quarter results for the period ended September 30, 2010.
Summary Operating Results (unaudited)
(Dollars in thousands, except per share amounts)
                                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2010     2009     %Chg     2010     2009     %Chg  
Homes closed (units)
    848       1,015       -16 %     2,863       2,837       1 %
Home closing revenue
  $ 233,803     $ 231,816       1 %   $ 725,790     $ 683,208       6 %
Sales orders (units)
    706       1,098       -36 %     2,670       3,232       -17 %
Sales order value
  $ 183,571     $ 254,347       -28 %   $ 680,666     $ 749,963       -9 %
Ending backlog (units)
                            902       1,676       -46 %
Ending backlog value
                          $ 242,411     $ 404,786       -40 %
Net income/(loss) – incl. impairments
  $ 1,219     $ (17,785 )     n/a     $ 8,045     $ (109,742 )     n/a  
Adjusted pre-tax income/(loss)* —excl. impairments and (loss)/gain on early extinguishment of debt
    1,523       (4,393 )     n/a       12,995       (26,879 )     n/a  
Diluted EPS (including impairments)
  $ 0.04     $ (0.56 )     n/a     $ 0.25     $ (3.52 )     n/a  
     
*  
See non-GAAP reconciliations of net income/(loss) to adjusted pre-tax income/(loss) on “Operating Results” statement.

 

 


 

MTH 3Q10 results/ 2
third quarter home closings, revenue and income
Meritage continued to be profitable for the third consecutive quarter of 2010, reporting net income of $1.2 million or $0.04 per diluted share, compared to a net loss of $17.8 million or $0.56 per share in 2009. The results included pre-tax charges for real estate-related impairments of $0.8 million in 2010, compared to $13.2 million of such impairments in 2009. Excluding the effects of impairments in both years, Meritage’s pre-tax income for the quarter was $1.5 million in 2010, compared with a pre-tax loss of $4.4 million in 2009.
Home closing revenue increased 1% due to a 21% increase in average prices despite 16% fewer home closings. Average closing price for the quarter was $275,700 in 2010, compared to $228,400 in 2009, reflecting shifts in the mix of sales rather than price appreciation. California and Florida made up a greater percentage of 2010 closings than in the prior year, with a smaller percentage in Texas, where house prices are generally lower. Additionally, over the last several quarters, the Company has acquired many well-priced lots in highly desirable in-fill locations, which support a greater mix of move-up communities that command higher prices relative to entry-level communities.
“Over the last few years many builders have moved their product offerings down the price-spectrum, believing there is less opportunity in the move-up market at this time,” said Steven J. Hilton, chairman and chief executive officer of Meritage Homes. “While we also pursued this strategy, recently we have had good success acquiring close-in move-up lots in ‘A’ locations, which other builders may have passed up. Due to our low acquisition price and construction costs, we are currently able to sell homes in those communities at dramatically lower prices than were available just a few years ago, offering tremendous value and opportunity to home buyers.”
Gross profit increased to $42.6 million in 2010 from $22.9 million in 2009, as quarterly margins improved year over year due to system-wide cost reductions and relatively stronger margins achieved in new Meritage communities. Home closing gross margins were 18.2% in 2010 versus 10.0% in 2009, after impairments of $680,000 in 2010 and $10.4 million in 2009. Excluding impairments, adjusted margins were 18.5% compared to 14.5% in the prior year.
“We made continued progress replacing our older communities with newer ones opened on the lots we’ve acquired since the beginning of last year,” said Steven J. Hilton, chairman and chief executive officer of Meritage Homes. “Homes closed in our newer communities generated approximately 600 basis points higher margins in the third quarter than we averaged in our older communities. Approximately 44% of our sales and 31% of our closings in the quarter came from communities we’ve acquired since the beginning of last year.
“The improved margins we’re achieving in our new communities are the result of successes in each of our major initiatives. Our lot costs are lower due to excellent acquisitions based on strategic market research. Our construction costs are lower due to simplified designs, improvements in purchasing and construction efficiencies, which have reduced both material and labor costs. Our homes offer lasting value because they are more energy-efficient. And our new plans allow us to build and deliver homes faster, without sacrificing quality.”

 

 


 

MTH 3Q10 results/ 3
sales
Net home sales in the third quarter were 36% lower than the prior year, partially due to a 12% decline in average active communities, from an average of 170 in the third quarter of 2009 to 149 in the third quarter of 2010. Sluggish sales pace throughout the quarter was reflected in average sales per community falling to 4.7 from 6.1 in the prior quarter and 6.5 in the prior year.
Mr. Hilton explained, “Our sales pace is well short of where we’d like it to be, and represents our greatest opportunity to increase earnings by leveraging our current infrastructure. While home sales have been slow in many areas across the country, we believe Meritage provides differentiated value as compared to other new or used homes in our markets. We offer some of the best new community locations, great value-priced homes in our Simply Smart™ series, a 99-day delivery guarantee in many communities, and 100% of our homes are ENERGY STAR® qualified, which provides significant energy savings to reduce the monthly cost of ownership.”
He continued, “We know that our homes can compete successfully with both used homes and other new homes. Our marketing and sales training is targeted at equipping our sales people with the best tools to help them demonstrate to buyers the many advantages of owning a new Meritage home, over other homes they may be considering.”
additional extreme energy-efficiency communities opened with strong sales
As a leader in advancing energy-efficient homebuilding, Meritage opened its first community of extreme energy-efficient green homes in Gilbert, Arizona, in June this year. The Company opened several similar communities in Arizona during the third quarter.
The communities are the first of their kind built by a production homebuilder, and offer up to 80% energy savings over the average existing home in the U.S. by incorporating the latest energy-efficient technologies, designed into every home at no additional charge to the buyer.
“Collectively, these have been some of our best-selling communities since they opened, selling at a significantly higher average sales pace than our other communities in the first few months after they opened,” said Mr. Hilton. “The way that we’ve designed and marketed these homes is a clear differentiator for Meritage, and one that we believe offers a competitive advantage for us. Additionally, we believe this technology could revolutionize the homebuilding industry by expediting broader adoption of high energy-efficiency in new home construction.”
cash flow and lot supplies
After purchasing approximately 1,600 lots for a total of $65 million during the quarter, Meritage ended the quarter with $419.8 million in total cash and cash equivalents, restricted cash and short-term investments. The Company’s net debt to total capital ratio improved to 27.1% at September 30, 2010, from 35.2% at September 30, 2009.

 

 


 

MTH 3Q10 results/ 4
Meritage controlled approximately 14,500 total lots at September 30, 2010, equivalent to a 3.6-year supply based on trailing twelve months closings. Approximately half of those were acquired since the beginning of 2009, and about a third of Meritage’s total 150 active communities are on recently-acquired lots. The Company already owns or has under contract 29 additional new communities that it plans to open over the next several quarters.
year to date results
For the first nine months of 2010, home closing revenue climbed 6% as home closings increased 1% and average sales prices were 5% higher. Significant closing gains were achieved in California and Florida, where the sales pace was stronger due to a large percentage of new communities in those divisions.
Meritage reported net income of $8.0 million or $0.25 per diluted share for the first nine months of 2010, compared to a net loss of $109.7 million or $3.52 per share in the first nine months of 2009. Year-to-date net income included $1.6 million of pre-tax real estate-related impairment charges and a $3.5 million loss on the early extinguishment of debt in 2010, compared to $90.3 million of impairments and a $9.4 million gain on early extinguishment of debt in 2009. Excluding those items, adjusted pre-tax income was $13.0 million for the first nine months of 2010, compared to a pre-tax loss of $26.9 million for the first nine months of 2009.
The Company’s fully reserved deferred tax assets totaled $88.4 million as of September 30, 2010. These tax assets may be available to offset federal and state income tax liabilities on approximately $230 million of future taxable income.
summary
“We are confident in our strategy and pleased with our accomplishments through this most challenging time for homebuilders,” said Mr. Hilton. “We have a strong balance sheet with a relatively light supply of land, no near-term debt maturities and significant liquidity, which is enabling us to replace communities with lower-priced lots as we close out of older communities. We have reduced our direct costs and are offering a new series of value-priced homes that we can build much faster, to compete more successfully with existing home sales. At the same time, we are achieving higher margins and sales velocity in our new communities. And I can confidently say that we are leading the industry with the most energy-efficient homes available from a production homebuilder today.”
He added, “Given the lower sales levels we’ve experienced in the last couple of quarters and our lack of visibility, we are anticipating lower closing revenue in the fourth quarter. We have taken additional steps to control both our direct and indirect costs, while retaining the organizational talent necessary to advance our strategic initiatives. Even so, it will be challenging to maintain our profitability for the quarter with lower revenues, but we expect to be around break-even, and to meet our goal of being profitable for the full year.
“It is difficult to predict when buyer confidence will return and the market will strengthen, but we are optimistic that we’ll see some improvement in 2011,” Mr. Hilton concluded. “Meritage is well positioned to be a strong competitor in the homebuilding industry, and we believe the successful execution of our strategic initiatives is driving sustainable competitive advantages for Meritage.”

 

 


 

MTH 3Q10 results/ 5
analyst call and webcast
Management will host a conference call to discuss these results on Thursday, October 28, 2010 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 on the “Investor Relations” page of the Company’s web site at http://investors.meritagehomes.com. For telephone participants, the dial-in number is 877-485-3104 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 12:00 p.m. ET, October 28, 2010 on the website noted above, or by dialing 877-660-6853, and referencing account 356, replay ID 358701.
     
Contacts:
  Investor Relations:
 
  Brent Anderson
 
  Vice President-Investor Relations
 
  (972)580-6360

 

 


 

MTH 3Q10 results/ 6
Meritage Homes Corporation and Subsidiaries
Operating Results
(Unaudited)
(In thousands, except per share data)
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2010     2009     2010     2009  
Operating results
                               
Home closing revenue
  $ 233,803     $ 231,816     $ 725,790     $ 683,208  
Land closing revenue
                1,222       1,285  
 
                       
Total closing revenue
    233,803       231,816       727,012       684,493  
 
                               
Home closing gross profit
    42,561       23,183       133,455       1,449  
Land closing gross (loss)/profit
          (281 )     258       (450 )
 
                       
Total closing gross profit
    42,561       22,902       133,713       999  
 
                               
Commissions and other sales costs
    (19,624 )     (18,382 )     (58,452 )     (55,625 )
General and administrative expenses
    (15,678 )     (14,269 )     (47,100 )     (41,913 )
Interest expense
    (8,425 )     (8,853 )     (25,273 )     (28,515 )
(Loss)/gain on extinguishment of debt
                (3,454 )     9,390  
Other income, net (1)
    1,897       963       8,469       7,862  
 
                       
Income/(loss) before income taxes
    731       (17,639 )     7,903       (107,802 )
Benefit/(provision) for income taxes
    488       (146 )     142       (1,940 )
 
                       
Net income/(loss)
  $ 1,219     $ (17,785 )   $ 8,045     $ (109,742 )
 
                       
 
                               
Income/(loss) per share
                               
Basic:
                               
Income/(loss) per share
  $ 0.04     $ (0.56 )   $ 0.25     $ (3.52 )
Weighted average shares outstanding
    32,095       31,718       32,038       31,197  
Diluted:
                               
Income/(loss) per share
  $ 0.04     $ (0.56 )   $ 0.25     $ (3.52 )
Weighted average shares outstanding
    32,297       31,718       32,277       31,197  
 
                               
Non-GAAP Reconciliations:
                               
Total closing gross profit
  $ 42,561     $ 22,902     $ 133,713     $ 999  
Add: Real estate-related impairments
                             
Terminated lot options and land sales
          3,505             66,219  
Impaired projects
    680       7,130       1,526       21,264  
 
                       
Adjusted closing gross profit
  $ 43,241     $ 33,537     $ 135,239     $ 88,482  
 
                       
 
                               
Income/(loss) before income taxes
  $ 731     $ (17,639 )   $ 7,903     $ (107,802 )
Add: Real estate-related and joint venture (JV) impairments
                               
Terminated lot options and land sales
          3,505             66,219  
Impaired projects
    680       7,130       1,526       21,264  
JV impairments
    112       2,611       112       2,830  
Loss/(gain) on early extinguishment of debt
                3,454       (9,390 )
 
                       
Adjusted income/(loss) before income taxes
  $ 1,523     $ (4,393 )   $ 12,995     $ (26,879 )
 
                       
     
(1)  
Other income includes Joint Venture (JV) income/(loss) and JV impairments, if any.

 

 


 

MTH 3Q10 results/ 7
Meritage Homes Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)
(unaudited)
                 
    September 30, 2010     December 31, 2009  
Assets:
               
Cash and cash equivalents
  $ 145,324     $ 249,331  
Investments and securities
    265,571       125,699  
Restricted cash
    8,948       16,348  
Income tax receivable
          92,509  
Other receivables
    20,782       22,934  
Real estate (1)
    744,808       675,037  
Investments in unconsolidated entities
    11,196       11,882  
Deposits on real estate under option or contract
    10,887       8,636  
Other assets
    33,145       40,291  
 
           
Total assets
  $ 1,240,661     $ 1,242,667  
 
           
 
               
Liabilities and Equity:
               
Accounts payable, accrued liabilities, home sale deposits and other liabilities
  $ 135,736     $ 152,233  
Senior notes
    479,748       479,134  
Senior subordinated notes
    125,875       125,875  
 
           
Total liabilities
    741,359       757,242  
Total stockholders’ equity
    499,302       485,425  
 
           
Total liabilities and equity
  $ 1,240,661     $ 1,242,667  
 
           
 
               
(1) Real estate – Allocated costs:
               
 
               
Homes under contract under construction
  $ 114,363     $ 114,769  
Finished home sites and home sites under development
    431,341       407,592  
Unsold homes, completed and under construction
    101,998       73,442  
Model homes
    39,938       37,601  
Land held for development or sale
    57,168       41,633  
 
           
Total allocated costs
  $ 744,808     $ 675,037  
 
           
Supplemental Information and Non-GAAP Financial Disclosures (in thousands – unaudited):
                                 
    Three Months Ended Sept 30,     Twelve Months Ended Sept 30,  
    2010     2009     2010     2009  
Interest amortized to cost of sales and interest expense
  $ 11,432     $ 12,891     $ 48,283     $ 63,222  
Depreciation and amortization
  $ 2,111     $ 2,002     $ 8,435     $ 12,431  
 
                               
 
          Sept 30, 2010     December 31, 2009     Sept 30, 2009  
Notes payable and other borrowings
          $ 605,623     $ 605,009     $ 604,968  
Less: cash and cash equivalents, restricted cash, and investments and securities
            (419,843 )     (391,378 )     (365,555 )
 
                         
Net debt
            185,780       213,631       239,413  
Stockholders’ equity
            499,302       485,425       440,559  
 
                         
Total capital
          $ 685,082     $ 699,056     $ 679,972  
 
                         
Net debt-to-capital
            27.1 %     30.6 %     35.2 %

 

 


 

MTH 3Q10 results/ 8
Meritage Homes Corporation and Subsidiaries
Condensed Consolidated Statement of Cash Flows
(In thousands)
(unaudited)
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2010     2009     2010     2009  
Operating results
                               
 
                               
Net income/(loss)
  $ 1,219     $ (17,785 )   $ 8,045     $ (109,742 )
Loss/(gain) on early extinguishment of debt
                3,454       (9,390 )
Real-estate related impairments
    680       10,635       1,526       87,483  
Equity in earnings from JVs and distributions of JV earnings, net
    637       2,335       1,404       3,991  
(Increase)/decrease in real estate and deposits, net
    (29,301 )     (15,353 )     (71,921 )     94,720  
Other operating activities
    6,083       (652 )     95,655       90,372  
 
                       
Net cash (used in)/provided by operating activities
    (20,682 )     (20,820 )     38,163       157,434  
 
                       
 
                               
Cash provided by/(used in) investing activities
    9,174       (19,169 )     (138,464 )     (20,669 )
 
                       
 
                               
Proceeds from issuance of new debt
                195,134        
Debt issuance costs
    (98 )           (3,067 )      
Repayments of senior notes
                (197,543 )      
Proceeds from issuance of common stock, net
    261       1,630       1,770       4,263  
 
                       
Net cash provided by/ (used in) financing activities
    163       1,630       (3,706 )     4,263  
 
                       
 
                               
Net (decrease)/increase in cash
    (11,345 )     (38,359 )     (104,007 )     141,028  
Beginning cash and cash equivalents
    156,669       385,310       249,331       205,923  
 
                       
Ending cash and cash equivalents (1)
  $ 145,324     $ 346,951     $ 145,324     $ 346,951  
 
                       
     
(1)  
Ending “cash and cash equivalents” as of September 30, 2010 excludes “investments and securities” and “restricted cash” totaling $274.5 million. Since the fourth quarter of 2009, Meritage has sought to increase yields earned on its excess cash by investing a portion of that cash in government guaranteed investments and securities which have maturities of up to eighteen months. Due to their longer maturity structure, these investments are not classified as “cash and cash equivalents” on our Balance Sheet or in the Statement of Cash Flows.

 

 


 

MTH 3Q10 results/ 9
Meritage Homes Corporation and Subsidiaries
Operating Data
(Dollars in thousands)
(unaudited)
                                 
    For the Three Months Ended September 30,  
    2010     2009  
    Homes     Value     Homes     Value  
Homes Closed:
                               
California
    112     $ 43,803       62     $ 20,319  
Nevada
    17       3,404       33       6,635  
 
                       
West Region
    129       47,207       95       26,954  
 
                               
Arizona
    167       41,387       213       38,617  
Texas
    425       107,663       611       142,697  
Colorado
    39       12,608       36       10,932  
 
                       
Central Region
    631       161,658       860       192,246  
 
                               
Florida
    88       24,938       60       12,616  
 
                       
East Region
    88       24,938       60       12,616  
 
                       
Total
    848     $ 233,803       1,015     $ 231,816  
 
                       
 
                               
Homes Ordered:
                               
California
    86     $ 29,614       130     $ 40,483  
Nevada
    11       2,279       33       6,637  
 
                       
West Region
    97       31,893       163       47,120  
 
                               
Arizona
    156       39,214       212       40,490  
Texas
    347       82,584       597       134,948  
Colorado
    39       12,603       35       10,342  
 
                       
Central Region
    542       134,401       844       185,780  
 
                               
Florida
    67       17,277       91       21,447  
 
                       
East Region
    67       17,277       91       21,447  
 
                       
Total
    706     $ 183,571       1,098     $ 254,347  
 
                       

 

 


 

MTH 3Q10 results/ 10
Meritage Homes Corporation and Subsidiaries
Operating Data
(Dollars in thousands)
(unaudited)
                                 
    For the Nine Months Ended September 30,  
    2010     2009  
    Homes     Value     Homes     Value  
Homes Closed:
                               
 
                               
California
    323     $ 114,498       218     $ 76,042  
 
                               
Nevada
    65       12,628       112       23,724  
 
                       
 
                               
West Region
    388       127,126       330       99,766  
 
                               
Arizona
    548       119,147       563       111,063  
 
                               
Texas
    1,578       382,592       1,679       403,535  
 
                               
Colorado
    110       32,721       105       33,002  
 
                       
 
                               
Central Region
    2,236       534,460       2,347       547,600  
 
                               
Florida
    239       64,204       160       35,842  
 
                       
 
                               
East Region
    239       64,204       160       35,842  
 
                       
 
                               
Total
    2,863     $ 725,790       2,837     $ 683,208  
 
                       
 
                               
Homes Ordered:
                               
 
                               
California
    312     $ 108,156       287     $ 93,688  
Nevada
    59       11,651       99       19,549  
 
                       
 
                               
West Region
    371       119,807       386       113,237  
 
                               
Arizona
    560       126,743       621       119,295  
Texas
    1,375       330,582       1,899       431,725  
Colorado
    118       36,903       107       32,910  
 
                       
 
                               
Central Region
    2,053       494,228       2,627       583,930  
 
                               
Florida
    246       66,631       219       52,796  
 
                       
 
                               
East Region
    246       66,631       219       52,796  
 
                       
 
                               
Total
    2,670     $ 680,666       3,232     $ 749,963  
 
                       
 
                               
Order Backlog:
                               
 
                               
California
    78     $ 27,980       156     $ 51,556  
Nevada
    8       1,694       12       2,278  
 
                       

 

 


 

MTH 3Q10 results/ 11
                                 
    For the Nine Months Ended September 30,  
    2010     2009  
    Homes     Value     Homes     Value  
 
                               
West Region
    86       29,674       168       53,834  
 
                               
Arizona
    159       39,706       248       50,443  
 
                               
Texas
    512       129,554       1,107       258,345  
 
                               
Colorado
    47       15,638       46       13,173  
 
                       
 
                               
Central Region
    718       184,898       1,401       321,961  
 
                               
Florida
    98       27,839       107       28,991  
 
                       
 
                               
East Region
    98       27,839       107       28,991  
 
                       
 
                               
Total
    902     $ 242,411       1,676     $ 404,786  
 
                       

 

 


 

MTH 3Q10 results/ 12
Meritage Homes Corporation and Subsidiaries
Operating Data
(unaudited)
                                 
    Third Quarter 2010     Third Quarter 2009  
    Beg.     End     Beg.     End  
Active Communities:
                               
California
    12       13       12       9  
Nevada
    5       5       12       6  
 
                       
West Region
    17       18       24       15  
 
                               
Arizona
    33       32       31       28  
Texas
    78       82       108       102  
Colorado
    7       8       4       3  
 
                       
Central Region
    118       122       143       133  
 
                               
Florida
    13       10       11       14  
 
                       
East Region
    13       10       11       14  
 
                       
 
                               
Total
    148       150       178       162  
 
                       
                                 
    First Nine Months 2010     First Nine Months 2009  
    Beg.     End     Beg.     End  
Active Communities:
                               
California
    7       13       12       9  
Nevada
    6       5       12       6  
 
                       
West Region
    13       18       24       15  
 
                               
Arizona
    26       32       31       28  
Texas
    98       82       109       102  
Colorado
    6       8       3       3  
 
                       
Central Region
    130       122       143       133  
 
                               
Florida
    10       10       11       14  
 
                       
East Region
    10       10       11       14  
 
                       
 
                               
Total
    153       150       178       162  
 
                       
About Meritage Homes Corporation
Meritage Homes Corporation is the 9th largest homebuilder in the U.S. based on homes closed. Meritage offers a variety of homes across the Southern and Western states designed to appeal to a wide range of home buyers, including first-time, move-up, luxury and active adult buyers, with base prices starting from under $100,000. As of September 30, 2010, the Company had 150 actively selling communities in 12 metropolitan areas including Houston, Dallas/Ft. Worth, Austin, San Antonio, Phoenix/Scottsdale, Tucson, Las Vegas, Denver, Orlando, and the East Bay/Central Valley and Inland Empire of California. Meritage Homes and its predecessor companies have delivered more than 65,000 homes since the Company was founded in 1985.
In 2010, Meritage is celebrating its 25th Anniversary, and is the only large national homebuilder to be 100% ENERGY STAR® qualified in every home started in 2010. The Company has launched a new Simply Smart Series™ and a 99-day guaranteed completion program in certain communities. Meritage has designed and built more than 65,000 homes in its 25-year history, and has a reputation for its distinctive style, quality construction and positive customer experience. To find a Meritage community near you, go to www.meritagehomes.com.

 

 


 

MTH 3Q10 results/ 13
Meritage Homes is listed on the NYSE under the symbol MTH.
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 benefits of, and our ability to execute our strategic initiatives including, but not limited to Meritage Forward, our Simply Smart series of homes, our 99-day guarantee and our Meritage Green initiative; the profitability and sales pace of our new communities; that closings and revenue may be lower in the fourth quarter, and that we’ll be around break-even for the quarter, but profitable for the year 2010; our ability to continue to acquire land in favorable locations at favorable prices; our ability to compete successfully with existing homes and other new homes; our ability to retain organizational talent and be a strong competitor in the homebuilding industry; the opportunity for us to increase earnings by leveraging our current overhead infrastructure; the number of communities we expect to open in the next several quarters; and expectations that we’ll see market improvements in 2011. 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; 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; the adverse effect of slower sales absorption rates; 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; competition; the success of our strategies in the current homebuilding market and economic environment; the propensity of homebuyers to cancel purchase orders with us; construction defect and home warranty claims; our success in prevailing on contested tax positions; the impact of deferred tax valuation allowances and our ability to preserve our operating loss carryforwards; fluctuations in housing demand, and the cost and availability of real estate and other matters that are outside of our control; out ability to obtain performance bonds in connection with our development work; the loss of key personnel; our failure to comply with laws and regulations; the availability and cost of materials and labor; our lack of geographic diversification; 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 our ability to raise additional

 

 


 

MTH 3Q10 results/ 14
capital when and if needed; our credit ratings; the impact of future capital raising transactions we may engage in; successful integration of future acquisitions; government regulations and legislative or other initiatives that seek to restrain growth or new housing construction or similar measures; consumer confidence, which can be impacted by economic and other factors such as terrorism, war, or threats thereof and 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, 2009 under the caption “Risk Factors,” and updated in our most recent Quarterly Report on Form 10-Q, all of which can be found on our website. As a result of these and other factors, the Company’s stock and note prices may fluctuate dramatically.
For more information about the Company, visit http://investors.meritagehomes.com
Click here to join our email alert list: http://www.b2i.us/irpass.asp?BzID=1474&to=ea&s=0
The Meritage Homes Corporation logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=2624
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