Exhibit 99.1
press release
A DYNAMIC GROWTH COMPANY IN THE HOME BUILDING SECTOR
|
Contacts:
|
|
Arizona:
|
|
Texas:
|
|
New York:
|
|
|
|
Larry Seay
|
|
Jane Hays
|
|
Chris Tofalli
|
|
|
|
Vice President-CFO
|
|
Vice President-Corp. Develop.
|
|
Broadgate Consultants
|
|
|
|
(480) 609-3330
|
|
(972) 543-8123
|
|
(212) 232-2222
|
Meritage Homes Reports Record $1
Billion
in Home Orders for 2nd Quarter
• HIGHEST
EVER SALES ORDERS AND BACKLOG
• 44% RISE IN DOLLAR VALUE OF HOMES ORDERED OVER 2ND
QTR 2004
• 83% INCREASE IN DOLLAR VALUE OF
BACKLOG OVER 2ND QTR 2004
• SECOND QUARTER RECORD
• 51% INCREASE IN HOME CLOSING REVENUE OVER 2ND
QTR 2004
• DILUTED EPS EXPECTED TO APPROXIMATELY DOUBLE
OVER 2ND QTR 2004
Dallas and Scottsdale, Arizona (July 11,
2005) – Meritage Homes Corporation (NYSE: MTH) today
announced all-time quarterly records for sales orders and order backlog, and a
second-quarter record for home closing revenue.
Summary
Operating Results
|
|
|
For the Three Months Ended June 30,
|
|
As of and For the Six Months Ended June 30,
|
|
|
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
$ Millions
|
|
Homes
|
|
$ Millions
|
|
Homes
|
|
|
|
|
2005
|
|
2004
|
|
%
Chg
|
|
2005
|
|
2004
|
|
%
Chg
|
|
2005
|
|
2004
|
|
% Chg
|
|
2005
|
|
2004
|
|
%
Chg
|
|
|
Homes
ordered
|
|
$
|
1,006
|
|
$
|
700
|
|
44
|
%
|
2,931
|
|
2,556
|
|
15
|
%
|
$
|
1,887
|
|
$
|
1,292
|
|
46
|
%
|
5,570
|
|
4,749
|
|
17
|
%
|
|
Homes
closed
|
|
$
|
652
|
|
$
|
431
|
|
51
|
%
|
2,095
|
|
1,620
|
|
29
|
%
|
$
|
1,203
|
|
$
|
855
|
|
41
|
%
|
3,882
|
|
3,189
|
|
22
|
%
|
|
Order
backlog
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,135
|
|
$
|
1,169
|
|
83
|
%
|
6,463
|
|
4,215
|
|
53
|
%
|
“We are pleased to
announce another record-setting quarter for Meritage, with over $1 billion in
new orders taken,” stated John R. Landon, Meritage Co-Chairman and Chief
Executive Officer. “The dollar value of
sales orders generated in this year’s second quarter reached its highest level
in Company history for any quarter, increasing 44% over the same period last
year. Our backlog at June 30, 2005
also reached an all-time high, increasing 83% over the June 30, 2004 level,
and we set a second-quarter record for home closing revenue, with an increase
of 51% over last year’s second quarter.”
“Demand for our homes remains very strong,” said
Steven J. Hilton, Meritage Co-Chairman and Chief Executive Officer. “Notably,
order value in our Nevada division was up 150% from the prior year’s second
quarter, being driven by a very healthy Nevada housing market and the fact that
our number of actively selling communities has doubled over June 30, 2004. The dollar value of sales orders increased 72%
in California, reflecting a robust housing market as well as a 29% increase in the
number of actively selling communities.
In the very competitive Texas market, we are pleased with a
second-quarter 11% increase in the dollar value of sales orders over the same
period last year. In many of our markets,
particularly in Arizona, we have limited the number of lots released for sale
and increased prices in several of our communities in order to better manage
our backlog and margins. In Arizona,
this resulted in an increase in the dollar value of sales orders of 20% and a
decrease in the number of homes ordered of approximately 8% over the prior year’s
second quarter.”
“We are also excited about the sales order activity
during the quarter in our newest divisions,” said Mr. Landon. “We entered the very robust Orlando, Florida
market in December of 2004 and are already producing sales orders in our
first community there. Florida is one of
the country’s strongest housing markets, and we believe that Florida offers
Meritage an exceptional opportunity for growth.
We have just hired a very experienced Regional President for Florida,
Larry Comegys, and are now establishing a regional office in Tampa. Our Fort Myers/Naples division, acquired in February as
Colonial Homes, is re-branding under the Meritage name and is exceeding our
expectations for sales orders this year. Meritage now builds coast-to-coast, and the
addition of Florida means that we now operate in the three states with the most
active housing markets.”
“Our greenfield start-up division in Denver also
produced its first sales orders during second-quarter 2005, and we expect to
close homes in both the Denver and Orlando divisions this year,” added Landon.
“Company-wide,
home closing revenue increased 51% for the quarter, including very solid increases
of 84% in our California division and 68% in Arizona,” said Mr. Hilton. “Home closing revenue rose 15% in Texas over
the prior year’s second quarter, an encouraging sign considering the highly
competitive nature of that market. Closing
revenue in our Nevada division declined 19% for the quarter as compared to the
same period last year due to the timing of communities selling out of inventory
in mid-2004 and the opening for sales of new communities later in the year. These new communities are now helping drive
our order strength in Nevada.”
The average sales price of homes ordered during the
second quarter increased 25% to approximately $343,100 from approximately
$273,900 during the same quarter last year, partially the result of the higher
prices of homes ordered in Arizona and California, where average sales prices
rose
2
30% and 18%, respectively. The
number of actively selling communities increased 19% to 163 at June 30,
2005 from 137 at June 30, 2004, and increased 17% over the 139 communities
open at the end of last year.
In the first half of 2005, home closing revenue
increased 41% company-wide, including increases of 66% in California, 63% in
Arizona and 7% in Texas over the first half of 2004, and the dollar value of
new orders increased 46%. For the same
periods, the dollar value of sales orders in California rose 76%, and increased
25% and 9% in Arizona and Texas, respectively.
In Nevada, the dollar value of sales orders grew 127% from the first
half of 2004.
“With our all-time record levels of sales orders and
backlog, we are optimistic that 2005 will be our 18th consecutive
year of record revenue, which we believe will reach approximately $2.9 to $3.0
billion on over 9,000 home closings. We
further anticipate that we will generate diluted EPS of $1.70 to $1.80 for the
second quarter of 2005, an increase of 91% to 102% over the second quarter of
last year,” said Mr. Landon.
Meritage will hold its second quarter earnings call on
Thursday, July 28, 2005, at 10 a.m. EST. To participate in the call, please dial in at
least five minutes before the start time.
The domestic dial-in number for the call is 800-291-3314, and the
international dial-in number is 706-634-0844.
The conference call and presentation can be accessed through the Company’s
website at www.meritagehomes.com. The
call may also be accessed through CCBN for two weeks at
www.fulldisclosure.com. A replay of the
call will be available from 11 a.m. EST July 28, 2005, through
midnight August 4, 2005. The
domestic replay telephone number is 800-642-1687, and the international replay
telephone number is 706-645-9291 (passcode 7630526).
About
Meritage Homes Corporation
Meritage Homes Corporation is one of the nation’s
largest single-family homebuilders, and is traded on the NYSE, symbol:
MTH. The Company appears on Forbes’ “Platinum 400” list as number one
in terms of five-year annualized total return, and is included in the S&P
SmallCap 600 Index. Fortune magazine recently ranked Meritage
747th in its “Fortune 1000” list of America’s largest corporations and included
the Company as a “top pick from 50 great investors” in its Investor’s Guide
2004. Additionally, Meritage is ranked
as one of Fortune’s Fastest
Growing Companies in America, its fourth appearance on this list in six years. The Company has built approximately 39,000
homes, ranging from entry-level to semi-custom luxury. Meritage operates in fast-growing states of
the Southern and Western U.S., including six of the top 10 single-family
housing markets in the country. For more
information about the Company, please visit the Meritage website located at
www.meritagehomes.com.
3
Meritage Homes Corporation and Subsidiaries
Operating Data - Unaudited
($ in thousands)
|
|
|
For The
|
|
As Of And For The
|
|
|
|
|
Three Months Ended June 30
|
|
Six Months Ended June 30
|
|
|
|
|
2005
|
|
2004
|
|
2005
|
|
2004
|
|
|
|
|
Homes
|
|
$
|
|
Homes
|
|
$
|
|
Homes
|
|
$
|
|
Homes
|
|
$
|
|
|
Homes
Ordered:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Texas
|
|
1,067
|
|
243,387
|
|
1,022
|
|
220,056
|
|
2,040
|
|
455,988
|
|
1,969
|
|
419,913
|
|
|
Arizona
|
|
973
|
|
313,148
|
|
1,056
|
|
262,004
|
|
1,898
|
|
585,997
|
|
1,863
|
|
470,392
|
|
|
California
|
|
563
|
|
320,027
|
|
387
|
|
185,725
|
|
1,037
|
|
608,233
|
|
752
|
|
345,556
|
|
|
Nevada
|
|
221
|
|
80,787
|
|
91
|
|
32,357
|
|
350
|
|
127,643
|
|
165
|
|
56,280
|
|
|
Florida
|
|
99
|
|
45,139
|
|
—
|
|
—
|
|
237
|
|
105,973
|
|
—
|
|
—
|
|
|
Colorado
|
|
8
|
|
3,022
|
|
—
|
|
—
|
|
8
|
|
3,022
|
|
—
|
|
—
|
|
|
Total
|
|
2,931
|
|
1,005,510
|
|
2,556
|
|
700,142
|
|
5,570
|
|
1,886,856
|
|
4,749
|
|
1,292,141
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Homes
Closed:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Texas
|
|
856
|
|
184,126
|
|
741
|
|
160,377
|
|
1,573
|
|
340,081
|
|
1,471
|
|
317,649
|
|
|
Arizona
|
|
745
|
|
194,110
|
|
473
|
|
115,535
|
|
1,344
|
|
348,065
|
|
854
|
|
213,467
|
|
|
California
|
|
379
|
|
228,412
|
|
294
|
|
123,840
|
|
724
|
|
422,899
|
|
601
|
|
254,710
|
|
|
Nevada
|
|
66
|
|
25,534
|
|
112
|
|
31,523
|
|
154
|
|
56,723
|
|
263
|
|
68,951
|
|
|
Florida *
|
|
49
|
|
19,542
|
|
—
|
|
—
|
|
87
|
|
34,903
|
|
—
|
|
—
|
|
|
Total
|
|
2,095
|
|
651,724
|
|
1,620
|
|
431,275
|
|
3,882
|
|
1,202,671
|
|
3,189
|
|
854,777
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Order
Backlog:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Texas
|
|
|
|
|
|
|
|
|
|
1,952
|
|
428,997
|
|
1,617
|
|
343,683
|
|
|
Arizona
|
|
|
|
|
|
|
|
|
|
2,545
|
|
775,319
|
|
1,841
|
|
495,284
|
|
|
California
|
|
|
|
|
|
|
|
|
|
1,008
|
|
576,605
|
|
631
|
|
289,175
|
|
|
Nevada
|
|
|
|
|
|
|
|
|
|
433
|
|
150,123
|
|
126
|
|
40,967
|
|
|
Florida*
|
|
|
|
|
|
|
|
|
|
517
|
|
200,916
|
|
—
|
|
—
|
|
|
Colorado
|
|
|
|
|
|
|
|
|
|
8
|
|
3,022
|
|
—
|
|
—
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
6,463
|
|
2,134,982
|
|
4,215
|
|
1,169,109
|
|
* The number and dollar amount
of homes closed and order backlog include the effect of the Colonial Homes of
Florida acquisition, which closed in February 2005.
#
# #
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 projected revenue and
closings for fiscal 2005, our diluted earnings per share for the second quarter
and the expected timing of home deliveries in our Denver and Orlando markets. 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: interest rates and
changes in the availability and pricing of residential mortgages; our success
in locating and negotiating favorably with possible acquisition candidates; the
success of our program to integrate existing operations with any new operations
or those of past or future acquisitions, including Colonial Homes of Florida;
our dependence on key personnel and the availability of satisfactory
subcontractors; our ability to take certain actions because of restrictions
contained in the indentures for our senior notes and the agreement for our
unsecured credit facility; our lack of geographic diversification; the cost and
availability of insurance, including the unavailability of insurance for the
presence of mold; our potential exposure to natural disasters; the impact of
inflation; the impact of construction defect and home warranty claims; 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 acquire
additional land or options to acquire additional land on acceptable terms,
particularly in our Greenfield start-up markets; 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; our level
of indebtedness and our ability to raise additional capital when and if needed;
legislative or other initiatives that seek to restrain growth or new housing
construction or similar measures 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, 2004 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 March 31, 2005.
As a result of these and other factors, the Company’s stock and note
prices may fluctuate dramatically.
#
# #
4