Exhibit 99.1
|
Contacts:
|
|
Arizona:
|
|
Texas:
|
|
New York:
|
|
|
|
Larry Seay
|
|
Jane Hays
|
|
Chris Tofalli
|
|
|
|
Executive VP and CFO
|
|
Vice President-Corp. Develop.
|
|
Broadgate Consultants
|
|
|
|
(480) 609-3330
|
|
(972) 543-8123
|
|
(212) 232-2222
|
MERITAGE HOMES
CORPORATION INCREASES
DILUTED EPS BY
85% OVER 3RD QTR 2004
ALL-TIME QUARTERLY RECORDS
• 97% INCREASE IN NET EARNINGS OVER 3RD QTR 2004 TO $70
MILLION
• 85% RISE IN DILUTED EPS OVER 3RD QTR 2004 TO $2.40
• 51% INCREASE IN DOLLAR VALUE OF HOME ORDERS OVER 3RD QTR
2004 TO $971 MILLION
• 85% RISE IN DOLLAR VALUE OF ORDER BACKLOG OVER SEPT 30, 2004 TO $2.5
BILLION
Dallas
and Scottsdale, Arizona (October 25, 2005) – Meritage Homes Corporation
(NYSE: MTH) today announced all-time quarterly records for net
earnings, diluted earnings per share, the dollar value of home orders and the
dollar value of order backlog.
SUMMARY OPERATING RESULTS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE
AMOUNTS)
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|
|
|
|
2005
|
|
2004
|
|
%
Change
|
|
2005 *
|
|
2004
|
|
%
Change
|
|
|
Home closing revenue
|
|
$
|
753,505
|
|
$
|
462,711
|
|
63
|
%
|
$
|
1,956,235
|
|
$
|
1,317,488
|
|
48
|
%
|
|
Net earnings
|
|
$
|
70,253
|
|
$
|
35,600
|
|
97
|
%
|
$
|
153,688
|
|
$
|
87,156
|
|
76
|
%
|
|
Diluted EPS
|
|
$
|
2.40
|
|
$
|
1.30
|
|
85
|
%
|
$
|
5.35
|
|
$
|
3.14
|
|
70
|
%
|
* Includes a first quarter bond
refinancing charge related to repurchasing $276.8 million of our 9.75% senior
notes due 2011. The funds to repurchase
these bonds came from our new $350.0 million 6.25% senior notes due 2015. This bond refinancing charge reduced pre-tax
earnings by $31.3 million, reduced net earnings by $19.5 million and reduced
diluted EPS by $0.69. Excluding this
one-time charge, net earnings for the first nine months of 2005 would have
increased 99% to $173.2 million and diluted EPS would have risen 92% to $6.04.
“For the third quarter of 2005 we again delivered
excellent results to our stockholders,” said John R. Landon, Meritage
Co-Chairman and CEO. “Among other all-time
quarterly records, net earnings reached $70 million, nearly double that of the
third quarter 2004, diluted EPS rose 85% to $2.40 and after-tax return on
equity rose to 33.6%. Our 3rd
quarter performance affirms our belief that we are offering the right product
at the right price and in the right locations, and that we are successfully
managing the geographic expansion of our business by leveraging the competitive
advantages available to public builders.”
Reflecting strong sales orders from prior quarters, the
Company’s home closing revenue increased 63% to $754 million in the third
quarter of this year as compared to the same quarter a year ago, while the
number of homes closed rose 38% to 2,310 homes.
Some home closings were delayed at quarter-end in Houston due to
Hurricane Rita. In addition, Meritage experienced
postponements in Las Vegas in receiving electric hookups, which has pushed some
closings from the third quarter to the fourth quarter. For the first nine months of this year, home
closing revenue increased 48% over the same period a year earlier to $1.96
billion, nearly equaling the 2004 full-year home closing revenue of $2.02
billion. The number of homes closed rose
27% for the same period to 6,192 homes.
The average price of homes closed during the third quarter increased 18%
to approximately $326,000, primarily the result of increased deliveries in Las
Vegas and Florida, where the average price of homes closed exceeds the company
average.
“Overall, we took orders for 2,929 homes during the
third quarter, up 33% from the same quarter last year,” added Steven J. Hilton,
Meritage Co-Chairman and CEO. “In
addition, the dollar value of orders rose 51% for the same periods to $971 million. Our Texas division had a particularly strong
quarter with a 75% increase in the dollar value of orders reflecting increased
job growth and the expansion of our product line to focus not only on move-up
homes but also entry-level and semi-custom luxury.”
“In addition to solid increases in revenue, closings
and orders, our earnings and margins expanded in both the third quarter and
first nine months of 2005 versus the same periods in 2004,” said Mr. Landon. “Our margin expansion was the result of increases
in sales prices driven by strong demand, coupled with the effective management
of construction and land costs and the leveraging of SG&A expenses. For the third quarter 2005, our home closing gross
margin increased 311 basis points over the third quarter 2004 to 23.6% while our
pre-tax margin advanced 298 basis points to 14.9%. For the first nine months of this year, our home
closing gross margin rose 352 basis points to 23.0% and our pre-tax margin
increased 204 basis points to 12.6%,” added Mr. Hilton. “Excluding the one-time bond refinancing
charge in the first quarter of this year, our pre-tax margin for the first nine
months of 2005 would have risen 364 basis points to 14.1%.”
“We are happy to report that we closed our first homes
in Orlando under the Meritage Homes brand just 10 months after our entry into
that market through a start-up operation,” added Mr. Hilton.
2
“Following our
acquisition of Greater Homes in September, we closed our first homes in Orlando
under the Greater Homes name. We are
pleased with our current operations in Orlando and Ft. Myers/Naples, Florida
and feel very positive about the future of our operations in Florida.”
“The Company’s balance sheet remains in excellent
position to fund our anticipated growth,” said Mr. Landon. The net debt-to-capital ratio* improved to 45%
at September 30, 2005, as compared to 52% at September 30, 2004, typically
a seasonal high point in leverage for the year.
For the third quarter of 2005, EBITDA* increased 86% over the third
quarter of 2004 to $127 million. For the
twelve months ending September 30, 2005, EBITDA rose 65% to $385 million,
resulting in an interest coverage ratio* of 9.1 times as compared to 6.7 times
for the comparable period a year earlier.
For the twelve months ending September 30, 2005, the Company’s
debt-to-EBITDA ratio* was 1.7 times, an improvement from 2.2 times a year
ago. At September 30, 2005,
Meritage had $151 million outstanding on its $400 million bank credit facility
and had the availability to borrow an additional $168 million after considering
$81 million in outstanding letters of credit.
(*A definition and discussion of Meritage’s use of non-GAAP measures are
included with the summary financial information at the end of this release).
“Our robust earnings thus far this year have led to strong
returns to our stockholders,” said Mr. Hilton. “For the four quarters ended September 30,
2005, our after-tax return on average equity was 33.6%, up from 27.7% a year
ago, and our after-tax return on average assets was 13.8%, up from 11.2% for
the same period a year earlier.”
“At September 30, 2005 we were actively selling
homes in 174 communities, an increase of 29% over September 30, 2004 and
25% over December 31, 2004,” said Mr. Hilton. “We are targeting an increase to
approximately 180 communities by year-end.
To support this community growth, at the end of the third quarter 2005,
we had approximately 54,675 lots under control, of which approximately 91% were
controlled through purchase and option contracts. The number of lots we controlled at September 30,
2005 represents about a 5.5-year supply based on anticipated 2005 closings.”
“Looking ahead, order backlog reached a record $2.5
billion at September 30, 2005, up 85% over the same date in 2004 and the
number of homes in backlog at the end of the third quarter 2005 increased 59%
to 7,536 homes, also an all-time record,” added Mr. Landon. “While we are aware of investor concerns
about demand trends, Meritage increased the dollar value of our home orders in
the third quarter by 51% to $971 million, and the number of homes ordered
advanced 33% to 2,929. We are
reaffirming our 2006 guidance of $3.8 to $3.9 billion in revenue and $11.25 to
$11.50 in diluted EPS. This guidance
would result in a 27% to 30% increase in revenue and an approximate 35%
increase in diluted EPS over our 2005 guidance.
Included in this guidance is our expectation that interest rates will
rise somewhat and that price appreciation in some of our more robust markets will
moderate.”
“With our all-time record backlog, our strong third
quarter order momentum, and our expanded community and lot positions, we are
confident that we will achieve our previously announced 2005
3
revenue guidance of
approximately $3.00 billion, which would be a 47% increase over $2.04 billion
in 2004. We are also reiterating our
2005 diluted EPS guidance of $8.25 to $8.50, up 64% to 69% over 2004. Excluding a one-time bond refinancing charge
of $0.69 per share incurred during the first quarter of 2005, current year
diluted EPS guidance would be $8.94 to $9.19, which would be 78% to 83% higher
than 2004. We also anticipate our fourth
quarter diluted EPS to approximate $2.88 to $3.13, an increase of 53% to 66%
over the prior year’s fourth quarter,” concluded Mr. Hilton.
Meritage will hold its third quarter earnings call on
Wednesday, October 26, 2005, at 11 a.m. EDT. 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 12 p.m. EDT October 26, 2005, through
midnight November 2, 2005. The
domestic replay telephone number is 800-642-1687, and the international replay
telephone number is 706-645-9291. The
passcode for the replay is 1202695.
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. Meritage is ranked
as one of Fortune’s Fastest
Growing Companies in America, its fifth appearance on this list in seven
years. Additionally, Fortune 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. 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.
4
MERITAGE HOMES CORPORATION AND SUBSIDIARIES
OPERATING RESULTS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
|
|
2005
|
|
2004
|
|
2005
|
|
2004
|
|
|
Operating Results
|
|
|
|
|
|
|
|
|
|
|
Home closing revenue
|
|
$
|
753,505
|
|
$
|
462,711
|
|
$
|
1,956,235
|
|
$
|
1,317,488
|
|
|
Land closing revenue
|
|
1,945
|
|
20,037
|
|
3,954
|
|
22,697
|
|
|
|
|
755,450
|
|
482,748
|
|
1,960,189
|
|
1,340,185
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home closing gross profit
|
|
178,011
|
|
94,885
|
|
450,039
|
|
256,755
|
|
|
Land closing gross profit
|
|
57
|
|
7,160
|
|
528
|
|
8,089
|
|
|
|
|
178,068
|
|
102,045
|
|
450,567
|
|
264,844
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commissions and other sales costs
|
|
(39,635
|
)
|
(28,077
|
)
|
(106,975
|
)
|
(79,906
|
)
|
|
General and administrative expenses
|
|
(31,894
|
)
|
(19,822
|
)
|
(82,529
|
)
|
(52,672
|
)
|
|
Other income, net
|
|
5,963
|
|
3,366
|
|
16,433
|
|
8,535
|
|
|
Loss on extinguishment of debt
|
|
—
|
|
—
|
|
(31,477
|
)
|
—
|
|
|
Earnings before provision for income taxes
|
|
112,502
|
|
57,512
|
|
246,019
|
|
140,801
|
|
|
Provision for income taxes
|
|
(42,249
|
)
|
(21,912
|
)
|
(92,331
|
)
|
(53,645
|
)
|
|
Net earnings
|
|
$
|
70,253
|
|
$
|
35,600
|
|
$
|
153,688
|
|
$
|
87,156
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
|
|
$
|
2.57
|
|
$
|
1.38
|
|
$
|
5.72
|
|
$
|
3.33
|
|
|
Weighted average shares outstanding
|
|
27,311
|
|
25,788
|
|
26,880
|
|
26,182
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
|
|
$
|
2.40
|
|
$
|
1.30
|
|
$
|
5.35
|
|
$
|
3.14
|
|
|
Weighted average shares outstanding
|
|
29,217
|
|
27,288
|
|
28,748
|
|
27,740
|
|
5
MERITAGE HOMES CORPORATION AND SUBSIDIARIES
NON-GAAP FINANCIAL DISCLOSURES
(UNAUDITED)
(DOLLARS IN THOUSANDS)
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
Trailing Twelve Months
Ended September 30,
|
|
|
|
|
2005
|
|
2004
|
|
2005
|
|
2004
|
|
2005
|
|
2004
|
|
|
EBITDA Reconciliation:(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
|
$
|
70,253
|
|
$
|
35,600
|
|
$
|
153,688
|
|
$
|
87,156
|
|
$
|
205,500
|
|
$
|
118,722
|
|
|
Provision for income taxes
|
|
42,249
|
|
21,912
|
|
92,331
|
|
53,645
|
|
124,476
|
|
73,155
|
|
|
Interest amortized to cost of sales
|
|
9,513
|
|
7,482
|
|
27,025
|
|
21,381
|
|
37,871
|
|
29,156
|
|
|
Depreciation and amortization
|
|
4,729
|
|
3,205
|
|
12,752
|
|
8,969
|
|
17,016
|
|
11,773
|
|
|
EBITDA
|
|
$
|
126,744
|
|
$
|
68,199
|
|
$
|
285,796
|
|
$
|
171,151
|
|
$
|
384,863
|
|
$
|
232,806
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest coverage ratio:(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
|
|
|
|
|
|
|
|
$
|
384,863
|
|
$
|
232,806
|
|
|
Interest incurred
|
|
|
|
|
|
|
|
|
|
$
|
42,335
|
|
$
|
34,876
|
|
|
Interest coverage ratio
|
|
|
|
|
|
|
|
|
|
9.1 times
|
|
6.7 times
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt to EBITDA ratio:(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes payable and other borrowings
|
|
|
|
|
|
|
|
|
|
$
|
671,782
|
|
$
|
516,727
|
|
|
EBITDA
|
|
|
|
|
|
|
|
|
|
$
|
384,863
|
|
$
|
232,806
|
|
|
Debt to EBITDA ratio
|
|
|
|
|
|
|
|
|
|
1.7 times
|
|
2.2 times
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After-tax stockholder returns: (4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
|
|
|
|
|
|
|
|
|
$
|
205,500
|
|
$
|
118,722
|
|
|
Average assets
|
|
|
|
|
|
|
|
|
|
$
|
1,484,867
|
|
$
|
1,057,835
|
|
|
Average equity
|
|
|
|
|
|
|
|
|
|
$
|
612,410
|
|
$
|
428,954
|
|
|
After-tax return on assets
|
|
|
|
|
|
|
|
|
|
13.8
|
%
|
11.2
|
%
|
|
After-tax return on equity
|
|
|
|
|
|
|
|
|
|
33.6
|
%
|
27.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net debt-to-capital: (5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes payable and other borrowings
|
|
|
|
|
|
|
|
|
|
$
|
671,782
|
|
$
|
516,727
|
|
|
Less: cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
40,185
|
|
19,340
|
|
|
Net debt
|
|
|
|
|
|
|
|
|
|
$
|
631,597
|
|
$
|
497,387
|
|
|
Stockholders’ equity
|
|
|
|
|
|
|
|
|
|
761,922
|
|
468,321
|
|
|
Capital
|
|
|
|
|
|
|
|
|
|
$
|
1,393,519
|
|
$
|
965,708
|
|
|
Net debt-to-capital
|
|
|
|
|
|
|
|
|
|
45.3
|
%
|
51.5
|
%
|
(1) EBITDA represents net earnings before interest
amortized to cost of sales, income taxes, depreciation and amortization. EBITDA is a non-GAAP financial measure. A non-GAAP financial measure is a numerical
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 earnings,
balance sheet, or statement of cash flows (or equivalent statements) of the
issuer; 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 this non-GAAP financial measure 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 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, 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 generally
accepted accounting principles in the United States of America.
6
(2) Interest coverage ratio is calculated as the
trailing four quarters EBITDA divided by the trailing four quarters interest
incurred.
(3) Debt to EBITDA ratio is calculated as notes
payable and other borrowings divided by the trailing four quarters EBITDA.
(4) After-tax return on assets and equity are
calculated as the trailing four quarters net earnings divided by the trailing
four quarters average assets and equity, respectively.
(5) Net debt-to-capital is calculated as notes
payable and other borrowings less cash divided by notes payable and other
borrowings.
MERITAGE
HOMES CORPORATION AND SUBSIDIARIES
BALANCE SHEET DATA
(UNAUDITED)
(DOLLARS IN THOUSANDS)
|
|
|
September 30, 2005
|
|
December 31, 2004
|
|
|
Total assets
|
|
$
|
1,887,637
|
|
$
|
1,265,394
|
|
|
Real estate
|
|
1,409,433
|
|
867,218
|
|
|
Cash and cash
equivalents
|
|
40,185
|
|
47,876
|
|
|
Consolidated real
estate not owned
|
|
2,557
|
|
18,344
|
|
|
Total liabilities and
minority interests
|
|
1,126,715
|
|
742,839
|
|
|
Notes and loans payable
|
|
671,782
|
|
471,415
|
|
|
Liabilities related to
real estate not owned
|
|
2,143
|
|
14,780
|
|
|
Stockholders’ equity
|
|
761,922
|
|
522,555
|
|
|
|
|
|
|
|
|
|
MERITAGE
HOMES CORPORATION AND SUBSIDIARIES
OPERATING
DATA
(UNAUDITED)
(DOLLARS IN THOUSANDS)
|
|
|
For The
Three Months Ended September 30
|
|
As Of And For The
Nine Months Ended September 30
|
|
|
|
|
2005
|
|
2004
|
|
2005
|
|
2004
|
|
|
|
|
Homes
|
|
$
|
|
Homes
|
|
$
|
|
Homes
|
|
$
|
|
Homes
|
|
$
|
|
|
Homes Ordered:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Texas
|
|
1,318
|
|
304,346
|
|
805
|
|
173,816
|
|
3,358
|
|
760,437
|
|
2,774
|
|
593,729
|
|
|
Arizona
|
|
954
|
|
328,379
|
|
914
|
|
219,349
|
|
2,852
|
|
914,374
|
|
2,777
|
|
689,741
|
|
|
California
|
|
400
|
|
236,709
|
|
391
|
|
215,685
|
|
1,437
|
|
844,942
|
|
1,143
|
|
561,241
|
|
|
Nevada
|
|
165
|
|
66,791
|
|
93
|
|
34,073
|
|
515
|
|
194,435
|
|
258
|
|
90,353
|
|
|
Florida
|
|
61
|
|
23,262
|
|
—
|
|
—
|
|
298
|
|
129,234
|
|
—
|
|
—
|
|
|
Colorado
|
|
31
|
|
11,048
|
|
—
|
|
—
|
|
39
|
|
14,070
|
|
—
|
|
—
|
|
|
Total
|
|
2,929
|
|
970,535
|
|
2,203
|
|
642,923
|
|
8,499
|
|
2,857,492
|
|
6,952
|
|
1,935,064
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Homes Closed:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Texas
|
|
879
|
|
197,926
|
|
700
|
|
152,060
|
|
2,452
|
|
538,110
|
|
2,171
|
|
469,709
|
|
|
Arizona
|
|
765
|
|
213,975
|
|
560
|
|
127,516
|
|
2,109
|
|
562,038
|
|
1,414
|
|
340,983
|
|
|
California
|
|
406
|
|
244,703
|
|
367
|
|
166,819
|
|
1,130
|
|
667,602
|
|
968
|
|
421,529
|
|
|
Nevada
|
|
138
|
|
52,980
|
|
44
|
|
16,316
|
|
292
|
|
109,662
|
|
307
|
|
85,267
|
|
|
Florida
|
|
122
|
|
43,921
|
|
—
|
|
—
|
|
209
|
|
78,823
|
|
—
|
|
—
|
|
|
Total
|
|
2,310
|
|
753,505
|
|
1,671
|
|
462,711
|
|
6,192
|
|
1,956,235
|
|
4,860
|
|
1,317,488
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Order Backlog:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Texas
|
|
|
|
|
|
|
|
|
|
2,391
|
|
535,417
|
|
1,722
|
|
365,439
|
|
|
Arizona
|
|
|
|
|
|
|
|
|
|
2,734
|
|
889,723
|
|
2,195
|
|
587,117
|
|
|
California
|
|
|
|
|
|
|
|
|
|
1,002
|
|
568,611
|
|
655
|
|
338,041
|
|
|
Nevada
|
|
|
|
|
|
|
|
|
|
460
|
|
163,976
|
|
175
|
|
58,724
|
|
|
Florida *
|
|
|
|
|
|
|
|
|
|
910
|
|
327,151
|
|
—
|
|
—
|
|
|
Colorado
|
|
|
|
|
|
|
|
|
|
39
|
|
14,070
|
|
—
|
|
—
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
7,536
|
|
2,498,948
|
|
4,747
|
|
1,349,321
|
|
* As part of our February 2005
acquisition of Colonial Homes of Florida, we purchased order backlog of 367
homes with a value of approximately $130 million, and as part of our September 2005
acquisition of Greater Homes of Orlando, we purchased order backlog of 454
homes with a value of approximately $147 million.
7
|
|
|
3rd Qtr 2005
|
|
3rd Qtr 2004
|
|
|
|
|
Beg.
|
|
End
|
|
Beg.
|
|
End
|
|
|
Active Communities:
|
|
|
|
|
|
|
|
|
|
|
Texas
|
|
98
|
|
101
|
|
87
|
|
89
|
|
|
Arizona
|
|
30
|
|
35
|
|
30
|
|
27
|
|
|
California
|
|
22
|
|
18
|
|
17
|
|
17
|
|
|
Nevada
|
|
6
|
|
6
|
|
3
|
|
2
|
|
|
Florida
|
|
6
|
|
10
|
|
n/a
|
|
n/a
|
|
|
Colorado
|
|
1
|
|
4
|
|
n/a
|
|
n/a
|
|
|
Total
|
|
163
|
|
174
|
|
137
|
|
135
|
|
# # #
This press release contains
forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Such statements include statements concerning
the success of our future operations in Florida; the number of communities we
will be operating in at the end of 2005; our future lot supply; our estimated
revenue and diluted earnings per share in 2005 and 2006; and that we anticipate
that traffic, sales demand and pricing power in some of our more robust markets
will moderate to what we believe are more sustainable levels. 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 and Greater
Homes; 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 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 energy prices or 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 our Form 10-Q
for the quarter ended June 30, 2005.
As a result of these and other factors, the Company’s stock and note
prices may fluctuate dramatically.
#
# #
8