Exhibit 99.1
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Contacts:
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Arizona:
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Texas:
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New
York:
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Larry Seay
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Jane Hays
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Chris Tofalli
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CFO & Vice
President-Finance
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Vice President-Corp.
Develop.
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Broadgate Consultants
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(480) 609-3330
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(972) 543-8123
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(212) 232-2222
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Meritage
Announces 4th Quarter and Full-Year Records
for Closings, Orders and Backlog – Raises Earnings Guidance
• FULL YEAR 2004 SALES ORDERS UP 59%
FROM 2003 TO $2.6 BILLION
• FULL YEAR 2004 HOME CLOSING REVENUE UP 38% FROM 2003 TO $2.0 BILLION
•
YEAR-END
2004 BACKLOG UP 86% FROM YEAR-END 2003 TO $1.3 BILLION
•
2004
DILUTED EPS GUIDANCE RAISED BY $0.45 TO $9.50 TO $9.75
(BEFORE STOCK SPLIT(1))
Dallas
and Scottsdale, Arizona (January 6, 2005) – Meritage Homes Corporation (NYSE:
MTH) today announced fourth quarter and full-year records for
homebuilding revenue, home closings and order backlog.
Summary
Operating Results
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For the Three Months Ended December 31,
(unaudited)
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As of and for the Year Ended December 31,
(unaudited)
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$ Millions
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Homes
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$ Millions
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Homes
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2004
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2003
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%
Chg
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2004
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2003
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%
Chg
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2004
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2003
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%
Chg
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2004
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2003
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%
Chg
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Homes ordered
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$
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670
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$
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343
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95
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%
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2,055
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1,147
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79
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%
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$
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2,605
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$
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1,635
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59
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%
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9,007
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6,152
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46
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%
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Homes closed
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$
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698
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$
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472
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48
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%
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2,394
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1,784
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34
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%
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$
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2,016
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$
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1,462
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38
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%
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7,254
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5,642
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29
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%
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Order backlog
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$
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1,321
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$
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711
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86
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%
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4,408
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2,580
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71
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%
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(1) Diluted EPS
amounts are reported on a pre-split basis.
On January 7, 2005, the Company will issue a stock dividend to holders
of record as of December 28, 2004. After
the stock split, the 2004 EPS guidance will be adjusted to $4.75 to $4.88. All previously reported per share amounts
will also be retroactively adjusted.
1
“Meritage generated $2.0 billion in home closing
revenue for 2004, marking its 17th consecutive year of record
revenue and home closings,” said John R. Landon, Meritage Co-Chairman and
Co-CEO. “This exceeded our most recent
guidance of $1.9 billion and represents a 38% increase over last year, which
was primarily driven by a 29% increase over 2003 in the number of homes closed
to 7,254. The number of homes ordered
for the year was up 46% in 2004 to 9,007, while the dollar value of homes ordered
was up 59% to approximately $2.6 billion.
The year ended on a very strong note, with the number of homes closed
and revenue ahead 34% and 48%, respectively, in the
fourth quarter as compared to last year’s fourth quarter and the number of
homes ordered and dollar value ahead 79% and 95%, respectively. This resulted in an increase in the number of
homes sold but not yet closed, up 71% over year-end 2003 and the related dollar
value up 86% at $1.3 billion at December 31, 2004.”
“The growth in home closing revenue for all of 2004
was led by increases of 88% and 41% in California and Arizona, respectively,”
said Steven J. Hilton, Meritage Co-Chairman and Co-CEO. “In Texas, closing revenue for the full year
2004 rose a solid 18% over 2003. In
Nevada, last year we sold out of several communities earlier than anticipated,
resulting in a 10% decline in home closing revenue in 2004. We anticipate that our Nevada revenues will
rebound significantly in the second half of 2005 as our replacement communities
opened for sales in the latter part of 2004.
In addition, closings from new communities that opened for sales earlier
in 2004 led to a 39% increase in revenue in Nevada in the fourth quarter,
complementing increases of 122% in California, 35% in Arizona and 23% in Texas.”
“Order demand was robust throughout 2004, particularly
in our California and Arizona divisions, where the dollar value of home orders
increased 119% and 74%, respectively, for all of 2004 as compared to 2003,”
said Mr. Landon. “In a very competitive
Texas market, we achieved a 25% year-over-year increase in the dollar value of
home orders, and are pleased that we have continued to grow our business there.”
“During the fourth quarter of 2004, demand for our
homes was very strong in all of our markets.
Overall, the dollar value of home orders advanced 95% compared to the
fourth quarter of 2003,” said Mr. Hilton.
“In California and Arizona, where the housing markets are very healthy
in general, the dollar value of new home orders increased 137% and 84%,
respectively, while in Texas, we are very pleased to report the dollar value of
home orders increased 57%. In Nevada,
where we opened four new communities during the fourth quarter of 2004, the
dollar value of home orders increased 110% in the fourth quarter 2004 as
compared to the same period a year ago.”
“We also are excited about how well our three active
adult communities in Arizona are performing,” said Mr. Landon. “These master-planned communities are now
fully operational, and during 2004, we closed 513 homes and took orders for 786
homes, or 9% of the company total. Based
on these solid sales numbers, we anticipate that 2005 will be a very good year
for our active adult operations. In
addition, we are looking forward to generating sales in 2005 in our two new
growth markets, Denver and Orlando.”
2
“We believe this year’s record performance is a direct
result of offering the right product at the right price and in the right
location. We now anticipate full year
2004 diluted earnings per share to approximate $9.50 to $9.75, up 39% to 43%
over 2003, representing a $0.45 increase over our previous guidance of $9.05 to
$9.30. This EPS guidance does not
reflect our previously announced 2-for-1 stock split, which is effective January
7, 2005 and is an indication of our strong belief in Meritage’s positive future
results,” added Mr. Hilton. “We will
give additional 2005 guidance in our upcoming earnings press release and
conference call.”
Meritage plans to release its 2004 full year earnings
on Wednesday, January 26, 2005, after market closing. In conjunction with the earnings release, the
Company will hold a conference call on Thursday, January 27, 2005, at 11:00
a.m. EST. To participate in the call,
please dial in at least five minutes before the start time. The domestic dial-in number for the call is
1-800-291-3314, and the international dial-in number is 1-706-634-0844. The conference call and presentation can be
accessed through the Company’s website at www.meritagehomes.com. The call may also be accessed through CCBN
for two weeks at www.fulldisclosure.com.
A replay of the call will be available from 12:00 EST January 27, 2005,
through midnight February 3, 2005. The
domestic replay telephone number is 1-800-642-1687, and the international
replay telephone number is 1-706-645-9291 (refer to Conference ID # 3131856).
About
Meritage Homes Corporation
Meritage Homes Corporation is one of the nation’s
largest single-family homebuilders, and is traded on the NYSE, symbol: MTH. Fortune Magazine recently named Meritage to
its “Fortune 1000” list of America’s largest corporations and included the
Company as a “top pick from 50 great investors” in its Investor’s Guide
2004. Additionally, Meritage is ranked
as one of Fortune’s Fastest Growing Companies in America, its fourth appearance
on this list in six years. The Company
is included in the S&P SmallCap 600 Index and appears on Forbes’ “Platinum
400” list as part of an elite group of only five companies on the list that
have exceeded 50% in five-year annualized total return. In its 18-year history the Company has built
approximately 35,000 homes, ranging from entry-level to semi-custom
luxury. Meritage operates in
fast-growing states of the Southern and Western U.S., including six of the top
ten single-family housing markets in the country. For more information about the Company,
please visit the Meritage web site is located at www.meritagehomes.com.
3
Meritage
Homes Corporation and Subsidiaries
Operating Data - Unaudited
($ in thousands)
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For The
Three Months Ended December 31
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As Of And For The
Year Ended December 31
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2004
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2003
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2004
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2003
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Homes
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$
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Homes
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$
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Homes
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$
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Homes
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$
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Homes Ordered:
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Texas
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744
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158,920
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458
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100,931
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3,518
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752,649
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2,862
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599,850
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Arizona
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713
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195,044
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348
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106,087
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3,490
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884,785
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1,881
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509,913
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California
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439
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260,025
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239
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109,687
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1,582
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821,266
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807
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375,105
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Nevada
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159
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55,788
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102
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26,543
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417
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146,141
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602
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150,120
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Total
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2,055
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669,777
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1,147
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343,248
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9,007
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2,604,841
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6,152
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1,634,988
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Homes Closed:
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Texas
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981
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211,269
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840
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172,079
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3,152
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680,978
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2,828
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577,330
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Arizona
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917
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244,774
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649
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181,626
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2,331
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585,757
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1,515
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415,709
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California
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399
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206,795
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195
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92,963
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1,367
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628,324
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735
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334,677
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Nevada
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97
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35,350
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100
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25,418
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404
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120,617
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564
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134,265
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Total
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2,394
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698,188
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1,784
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472,086
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7,254
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2,015,676
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5,642
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1,461,981
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Order Backlog:
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Texas
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1,485
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313,090
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1,119
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241,419
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Arizona
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1,991
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537,387
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832
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238,359
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California *
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695
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391,271
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405
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177,355
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Nevada
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237
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79,162
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224
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53,638
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Total
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4,408
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1,320,910
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2,580
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710,771
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* In January 2004, our
acquisition of Citation Homes added 75 sold but not closed homes with a sales
value of approximately $21 million to our California backlog.
# # #
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 estimated earnings per share for fiscal 2004, that revenues in our Nevada
division in the second half of fiscal 2005 will be favorable, that our active
adult communities will experience favorable results in fiscal 2005, that we
will generate sales in our new Denver and Orlando markets and that our stock
split is indicative of Meritage’s positive future results. 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 and 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 unavailability 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 indentures 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 any new operations
or those of past or future acquisitions; our success in locating and
negotiating favorably with possible acquisition candidates; our ability to
achieve certain pre-tax margins; our dependence on key personnel and the
availability of satisfactory subcontractors; the impact of inflation; our
potential exposure to natural disasters; the impact of new accounting
principles; and other factors identified in documents filed by us with the
Securities and Exchange Commission, including those set forth in our Form 10-K
for the year ended December 31, 2003 under the caption “Management’s Discussion
and Analysis of Financial Condition and Results of Operations – Factors That
May Affect Our Future Results and Financial Condition” and in Exhibit 99.1 of
Meritage’s Form 10-Q for the quarter ended September 30, 2004. As a result of these and other factors, the
Company’s stock and note prices may fluctuate dramatically.
#
# #
4