Exhibit 99.1
MERITAGE [LOGO] CORPORATION
LISTED ON THE NEW YORK STOCK EXCHANGE - MTH
- --------------------------------------------------------------------------------
PRESS RELEASE
A DYNAMIC GROWTH COMPANY IN THE HOME BUILDING SECTOR
Contacts: ARIZONA: TEXAS: NEW YORK:
Larry Seay Jane Hays Chris Tofalli
CFO & Vice President-Finance Vice President-Corp. Develop. Broadgate Consultants
(480) 609-3330 (972) 612-8085 (212) 232-2222
MERITAGE ANNOUNCES RECORD 1ST QUARTER 2003
NEW ORDERS, CLOSINGS AND BACKLOG
* 1,582 NEW HOMES ORDERED IN Q1 - UP 36% FROM 2002
* 1,136 HOMES CLOSED IN Q1 - UP 50% FROM 2002
* 2,516 HOMES IN BACKLOG AT MARCH 31, 2003 - UP 26% FROM 2002
DALLAS AND SCOTTSDALE, ARIZONA (APRIL 9, 2003) - MERITAGE CORPORATION
(NYSE: MTH) today announced record levels of new orders, closings and backlog
for the first quarter of 2003.
SUMMARY OPERATING RESULTS
As of and for the Quarter Ended March 31
(unaudited)
-------------------------------------------------------
$ Millions Homes
-------------------------- --------------------------
2003 2002 % Change 2003 2002 % Change
------ ------ -------- ------ ------ --------
Homes ordered $412.8 $293.1 41% 1,582 1,160 36%
Homes closed $283.3 $169.7 67% 1,136 758 50%
Order backlog $667.2 $498.3 34% 2,516 2,004 26%
John Landon, Meritage Co-Chairman and Chief Executive Officer said, "We
completed the quarter with the Company's all-time highest backlog and first
quarter records for homes closed and sales contracts written. This year also
marks the first time in our history we closed over 1,000 homes in the first
quarter of the year. We believe these results provide a solid foundation for us
to reach our goal of $1.3 to $1.4 billion in home sales revenue in the year
2003."
"The dollar value of orders increased 41% in the quarter overall, and even
excluding the recent Hammonds and Perma-Bilt acquisitions, orders in 2003 rose
9% in dollars on a steady number of home orders. We are very pleased with this
performance, particularly in light of the current economic uncertainty and the
conflict in Iraq", continued Landon.
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MERITAGE REPORTS RECORD 1ST QUARTER / 2
Meritage received 1,582 new home orders in the three months ended March 31,
2003, a 36% increase from the 1,160 orders received in the same period a year
ago. The dollar value of new homes ordered for the three months ended March 31,
2003 was $412.8 million, an increase of 41% compared to $293.1 million in the
same quarter of last year.
Meritage closed 1,136 homes in the first quarter of 2003, an increase of
50% over the 758 closings recorded in the same quarter in 2002. First quarter
2003 home sales revenue was $283.3 million, 67% greater than the $169.7 million
recorded in the year-ago quarter.
Backlog of 2,516 homes at March 31, 2003 was up 26% from the 2,004 homes
reported at March 31 of last year. The dollar value of backlog rose 34% to
$667.2 million from $498.3 million a year ago.
The number of communities open for sales at March 31, 2003 was 125, down
three from December 31, 2002, but up from 77 at March 31, 2002. The increase
above March 31, 2002 primarily reflects the addition of the Hammonds and
Perma-Bilt communities, which were actively selling in 38 and five communities,
respectively, at quarter-end.
Steve Hilton, Co-Chairman and Chief Executive Officer said, "Order growth
for the quarter was led by the Houston Division, where the number of new orders
increased 76% over the same period in 2002, before including results from our
Hammonds operation. Home orders in Dallas/Ft. Worth and Austin were up
significantly as a result of the Hammonds acquisition. Even excluding the
contribution from Hammonds, orders in Dallas/Ft. Worth increased 4% while the
number of homes ordered in Austin decreased 7%, resulting in a 14% net increase
in organic Texas orders for the first quarter of 2003. Orders in Arizona have
nearly returned to year-earlier levels as new communities in our Hancock
Division have opened, replacing those that sold out earlier than anticipated in
the third and fourth quarters of last year. These orders have increased the
number of homes in backlog at quarter-end in Arizona by 42% over December 31,
2002. We anticipate that as we move through 2003, our Arizona results will
continue to improve in comparison to the same periods in 2002. The number of
homes ordered in Northern California during the first quarter was down 22% from
the same quarter last year, reflecting a 31% decrease in the number of selling
communities from thirteen in last year's first quarter to nine in the current
quarter. We anticipate opening a net of eight new communities for sales in
Northern California over the next three quarters and we believe that our sales
rates there should increase correspondingly."
"Expansion in new markets remains an important part of our growth strategy
and we are pleased to report that we began sales activity in San Antonio during
March 2003 and expect the formal opening of our first community there later this
spring. We are happy with the initial sales activity in that community and
anticipate opening two additional communities there later in the year," said
John Landon.
"We continue to see a high level of prospective home buyers visiting our
model homes in all of our markets. We are working through the temporary
community timing issues that impeded our sales momentum to some extent in
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MERITAGE REPORTS RECORD 1ST QUARTER / 3
Phoenix and Northern California, and anticipate 2003 will be another great year
for Meritage," said Hilton.
ABOUT MERITAGE CORPORATION
Meritage Corporation designs, builds and sells distinctive single-family
homes ranging from entry-level to semi-custom luxury and has built approximately
22,000 homes in its 18 year history. The Company was recently included in THE
BLOOMBERG 100 "HOT STOCK", compiled by BLOOMBERG PERSONAL FINANCE MAGAZINE in
their February 2003 issue. In addition, the Company has been ranked by FORBES
magazine as #4 of its "200 Best Small Companies in America", and has appeared
twice on FORTUNE'S list of the "Fastest Growing Companies in America." Meritage
operates in the Phoenix and Tucson, Arizona markets under the Monterey Homes,
Hancock Communities and Meritage Homes brand names, in the Dallas/Ft. Worth,
Austin, Houston and San Antonio, Texas markets as Legacy Homes, Hammonds Homes
and Monterey Homes, and in the East San Francisco Bay and Sacramento, California
markets as Meritage Homes. In addition, effective with our October 2002
acquisition of Perma-Bilt Homes, Meritage is now active in the Las Vegas, Nevada
market. The Meritage web site is located at: www.meritagehomes.com.
MERITAGE CORPORATION AND SUBSIDIARIES
OPERATING DATA
($ IN THOUSANDS)
AS OF AND FOR THE
QUARTER ENDED MARCH 31
-----------------------------------------
2003 2002
------------------- -------------------
HOMES $ HOMES $
-------- -------- -------- --------
HOMES ORDERED:
Texas * 791 161,054 472 85,984
Arizona 447 123,651 456 116,603
California 180 89,774 232 90,495
Nevada ** 164 38,302 n/a n/a
-------- -------- -------- --------
Total 1,582 412,781 1,160 293,082
======== ======== ======== ========
HOMES CLOSED:
Texas * 606 121,422 363 62,042
Arizona 250 67,124 285 64,726
California 158 67,303 110 42,963
Nevada ** 122 27,480 n/a n/a
-------- -------- -------- --------
Total 1,136 283,329 758 169,731
======== ======== ======== ========
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MERITAGE REPORTS RECORD 1ST QUARTER / 4
AS OF AND FOR THE
QUARTER ENDED MARCH 31
-----------------------------------------
2003 2002
------------------- -------------------
HOMES $ HOMES $
-------- -------- -------- --------
ORDER BACKLOG:
Texas 1,270 258,531 802 139,593
Arizona 663 200,683 947 257,863
California 355 159,399 255 100,846
Nevada ** 228 48,605 n/a n/a
-------- -------- -------- --------
Total 2,516 667,218 2,004 498,302
======== ======== ======== ========
* 2003 amounts include 251 ($54,748) homes ordered, 220 ($46,849) homes
closed and 417 ($90,019) homes in backlog from Hammonds Homes.
** Amounts are for Perma-Bilt Homes, acquired effective October 1, 2002.
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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
STATEMENTS CONCERNING OUR EXPECTATION OF POSITIVE OPERATING RESULTS IN 2003 AND
BEYOND, OUR ANTICIPATED SALES AND OPERATING RESULTS IN ARIZONA AND CALIFORNIA,
THE NUMBER OF COMMUNITIES WE PLAN TO OPEN IN NORTHERN CALIFORNIA AND SAN
ANTONIO, AND OUR ABILITY TO REACH OUR SALES REVENUE GOAL IN 2003. SUCH
STATEMENTS ARE BASED UPON THE CURRENT BELIEFS AND EXPECTATIONS OF OUR MANAGEMENT
AND ARE SUBJECT TO SIGNIFICANT RISKS AND UNCERTAINTIES. ACTUAL RESULTS MAY
DIFFER FROM THOSE SET FORTH IN THE FORWARD-LOOKING STATEMENTS.
MERITAGE'S BUSINESS IS SUBJECT TO A NUMBER OF RISKS AND UNCERTAINTIES
INCLUDING: THE STRENGTH AND COMPETITIVE PRICING OF THE SINGLE-FAMILY HOUSING
MARKET; DEMAND FOR AN ACCEPTANCE OF OUR HOMES; CHANGES IN THE AVAILABILITY AND
PRICING OF REAL ESTATE IN THE MARKETS IN WHICH WE OPERATE; OUR ABILITY TO
CONTINUE TO ACQUIRE ADDITIONAL LAND OR OPTIONS TO ACQUIRE ADDITIONAL LAND ON
ACCEPTABLE TERMS; GENERAL ECONOMIC SLOW DOWNS; CONSUMER CONFIDENCE, WHICH CAN BE
IMPACTED BY ECONOMIC AND OTHER FACTORS SUCH AS TERRORISM, WAR, OR THREATS
THEREOF AND CHANGES IN STOCK MARKETS; THE IMPACT OF CONSTRUCTION DEFECT AND HOME
WARRANTY CLAIMS; THE COST AND AVAILABILITY OF INSURANCE, INCLUDING THE
AVAILABILITY OF INSURANCE FOR THE PRESENCE OF MOLD; INTEREST RATES AND CHANGES
IN THE AVAILABILITY AND PRICING OF RESIDENTIAL MORTGAGES; OUR LACK OF GEOGRAPHIC
DIVERSIFICATION; OUR LEVEL OF INDEBTEDNESS AND OUR ABILITY TO RAISE ADDITIONAL
CAPITAL WHEN AND IF NEEDED; OUR ABILITY TO TAKE CERTAIN ACTIONS BECAUSE OF
RESTRICTIONS CONTAINED IN THE INDENTURE FOR OUR SENIOR NOTES AND THE AGREEMENT
FOR OUR SENIOR UNSECURED CREDIT FACILITY; LEGISLATIVE OR OTHER INITIATIVES THAT
SEEK TO RESTRAIN GROWTH IN NEW HOUSING CONSTRUCTION OR SIMILAR MEASURES; THE
SUCCESS OF OUR PROGRAM TO INTEGRATE EXISTING OPERATIONS WITH OUR PLANNED NEW
OPERATIONS OR THOSE OF PAST OR FUTURE ACQUISITIONS; OUR SUCCESS IN LOCATING AND
NEGOTIATING FAVORABLY WITH POSSIBLE ACQUISITION CANDIDATES; OUR ABILITY TO
EXPAND PRE-TAX MARGINS; OUR DEPENDENCE ON KEY PERSONNEL AND THE AVAILABILITY OF
SATISFACTORY SUBCONTRACTORS; THE IMPACT OF INFLATION; OUR POTENTIAL EXPOSURE TO
NATURAL DISASTERS; NEW ACCOUNTING POLICIES OR PRINCIPLES OR GOVERNMENTAL OR
STOCK EXCHANGE REGULATIONS THAT COULD AFFECT OUR CORPORATE GOVERNANCE OR
ACCOUNTING METHODS; AND OTHER FACTORS IDENTIFIED IN DOCUMENTS FILED BY US WITH
THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THOSE SET FORTH IN OUR FORM
10-K REPORT FOR THE YEAR ENDED DECEMBER 31, 2002 UNDER THE CAPTIONS "MARKET FOR
THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS - FACTORS THAT MAY
AFFECT FUTURE STOCK PERFORMANCE" AND "MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - FACTORS THAT MAY AFFECT OUR
FUTURE RESULTS AND FINANCIAL CONDITION". AS A RESULT OF THESE AND OTHER FACTORS,
THE COMPANY'S STOCK AND NOTE PRICES MAY FLUCTUATE DRAMATICALLY.
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