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8-K - FORM 8-K - Meritage Homes CORP | c23506e8vk.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
Contacts: | Brent Anderson (972) 580-6360 (office) Brent.Anderson@meritagehomes.com Nancy Newton (602) 417-0684 (office) (602) 697-7785 (mobile) NNewton@c-k.com |
Meritage Homes Reports 28% Increase in Third Quarter 2011 Sales Orders
Scottsdale, Ariz. (October 27, 2011) Meritage Homes Corporation (NYSE: MTH), a leading
U.S. homebuilder, today announced third quarter results for the period ended September
30, 2011.
Summary Operating Results (unaudited)
(Dollars in thousands, except per share amounts)
(Dollars in thousands, except per share amounts)
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||
2011 | 2010 | %Chg | 2011 | 2010 | %Chg | |||||||||||||||||||
Homes closed (units) |
840 | 848 | -1 | % | 2,374 | 2,863 | -17 | % | ||||||||||||||||
Home closing revenue |
$ | 217,534 | $ | 233,803 | -7 | % | $ | 615,154 | $ | 725,790 | -15 | % | ||||||||||||
Sales orders (units) |
906 | 706 | 28 | % | 2,656 | 2,670 | -1 | % | ||||||||||||||||
Sales order value |
$ | 245,235 | $ | 183,571 | 34 | % | $ | 701,861 | $ | 680,666 | 3 | % | ||||||||||||
Ending backlog (units) |
1,060 | 902 | 18 | % | ||||||||||||||||||||
Ending backlog value |
$ | 288,523 | $ | 242,411 | 19 | % | ||||||||||||||||||
Net (loss)/income
incl. impairments |
$ | (3,235 | ) | $ | 1,219 | n/m | $ | (9,332 | ) | $ | 8,045 | n/m | ||||||||||||
Adjusted pre-tax
(loss)/income*
excl. impairments
and loss on early
extinguishment of
debt |
(2,028 | ) | 1,523 | n/m | (6,471 | ) | 12,995 | n/m | ||||||||||||||||
Diluted EPS
(including
impairments) |
$ | (0.10 | ) | $ | 0.04 | n/m | $ | (0.29 | ) | $ | 0.25 | n/m |
* | See non-GAAP reconciliations of net (loss)/income to adjusted pre-tax (loss)/income on Operating Results statement. |
ADDITIONAL THIRD QUARTER SELECTED RESULTS:
| Total order value up 34% over 2010 on 4% higher average sales prices combined with 28% more orders | |
| Acquired approximately 1,300 lots in 17 well-located communities during the quarter | |
| Total cash and securities of $357M at September 30, 2011 | |
| Net debt to capital ratio of 33.4% at September 30, 2011 | |
| Opened 18 new communities during the quarter and ended with 149 active communities at September 30; first community in Raleigh-Durham division opened in October 2011 |
MANAGEMENT COMMENTS
We achieved strong growth in sales and backlog this quarter compared to 2010, and I
commend our team for helping buyers decide that this is the right time to buy, and demonstrating
the value a new Meritage home offers that you wont find in most homes, said Steven J. Hilton,
chairman and chief executive officer of Meritage Homes. I am encouraged that we maintained healthy
traffic levels despite the recent macroeconomic
concerns, and believe well continue to show year-over-year sales improvement next quarter
with the help of our energy-efficient homes and new community locations.
We were disappointed that we did not remain above break-even for the quarter it has been a
challenge to maintain or improve profitability when the housing market is still bumping along the
bottom, he continued. We are focused on improving our top line while managing our costs and
overhead. We remain confident in the long-term demographics supporting the homebuilding industry,
and believe its just a matter of time before the market improves. We believe Meritage is one of
the best positioned homebuilders to benefit when it does.
NET EARNINGS
Meritage reported a net loss of $3.2 million or ($0.10) per diluted share for the third
quarter of 2011, compared to net income of $1.2 million or $0.04 per diluted share for the third
quarter of 2010. The $4.4 million net change from 2010 to 2011 was primarily due to a 7% decline in
home closing revenue caused by a change in the geographic mix of closings. The revenue decline
resulted in $4.5 million less home closing gross profit in the third quarter of 2011 compared to
the third quarter of 2010, on relatively flat closings. The Company closed 840 homes representing
85% of beginning backlog in the third quarter of 2011, compared to 848 or 81% of beginning backlog
in the third quarter of 2010.
Home closing revenue was lower in 2011 due to a 6% decline in average closing prices
year-over-year, mainly attributable to a $15 million decline in closing revenue from California
caused by reduced prices and fewer closings. That decline was only partially offset by higher
closings in Texas, Colorado and Florida, where average prices are typically lower than
Californias.
Average home closing gross margins for the third quarter were 17.5% in 2011 and 18.2% in 2010,
reflecting the impact of price declines from the prior year in most markets. Home closing gross
margins excluding impairments were 17.9% in 2011 and 18.5% in 2010.
Additional spending on marketing efforts designed to improve sales increased total selling,
general and administrative expenses during the third quarter.
Combined with its loss in the first half of the year, Meritage reported a cumulative
year-to-date net loss of $9.3 million or ($0.29) per diluted share in 2011, compared to
year-to-date net income of $8.0 million or $0.25 per diluted share in 2010.
SALES ORDERS
Net sales orders increased 28% over the prior years third quarter, and combined with a
4% increase in average sales price for a 34% increase in total order value over 2010. Meritage
achieved sales order gains in every state except Nevada. Sales more than doubled year over year in
Florida and Colorado, where average sales per community for the quarter were 11.2 and 9.4,
respectively. The Companys average sales per community improved to 6.2 in the third quarter,
compared to 4.7 in the prior year. Meritage had 149 active communities at September 30, 2011
compared to 150 a year earlier. Cancellations remained low at 17% of gross sales in the third
quarter 2011, compared to 24% in 2010.
2
Year-to-date orders were flat year over year, as the increase in third quarter sales offset
lower sales in the first half of 2011 compared to last years sales assisted by the home buyer tax
credit. Total order value
increased 3% due to a higher average sales price in 2011, reflecting a greater proportion of
sales within move-up communities compared to 2010.
Meritage increased the number of homes in backlog by 18% year over year and 7% sequentially
from the second quarter, ending with 1,060 homes valued at $289 million as of September 30, 2011,
compared to 902 homes valued at $242 million as of September 30, 2010.
After starting a new division in the top-ranked housing market of Raleigh-Durham, North
Carolina, during the second quarter of 2011, Meritage opened its first community there in October
and will report its first sales there during the fourth quarter of 2011.
BALANCE SHEET
The Company contracted for approximately 1,300 lots during the third quarter of 2011 and
controls approximately 16,000 total lots, equivalent to a five-year supply based on trailing twelve
months closings.
Meritage ended the quarter with a strong balance sheet including $357 million in cash and cash
equivalents, restricted cash, investments and securities, and a net debt to total capital ratio of
33.4% at September 30, 2011, compared to of 27.1% at September 30, 2010.
CONFERENCE CALL
Management will host a conference call to discuss these results on Thursday, October 27,
2011 at 10:00 a.m. Eastern Time (7:00 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 Companys web site at http://investors.meritagehomes.com. For telephone participants, the
dial-in number is 877-317-6789 and the conference number is 10005091. 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 27, 2011 on the website noted above, or by dialing 877-344-7529, and referencing
conference number 10005091. For more information, visit meritagehomes.com.
3
Meritage Homes Corporation and Subsidiaries
Operating Results
(Unaudited)
(In thousands, except per share data)
Operating Results
(Unaudited)
(In thousands, except per share data)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Operating results |
||||||||||||||||
Home closing revenue |
$ | 217,534 | $ | 233,803 | $ | 615,154 | $ | 725,790 | ||||||||
Land closing revenue |
| | 100 | 1,222 | ||||||||||||
Total closing revenue |
217,534 | 233,803 | 615,254 | 727,012 | ||||||||||||
Home closing gross profit |
38,070 | 42,561 | 108,037 | 133,455 | ||||||||||||
Land closing gross (loss)/profit |
(127 | ) | | (118 | ) | 258 | ||||||||||
Total closing gross profit |
37,943 | 42,561 | 107,919 | 133,713 | ||||||||||||
Commissions and other sales costs |
(19,708 | ) | (19,624 | ) | (53,876 | ) | (58,452 | ) | ||||||||
General and administrative expenses |
(16,466 | ) | (15,678 | ) | (46,582 | ) | (47,100 | ) | ||||||||
Interest expense |
(7,517 | ) | (8,425 | ) | (23,036 | ) | (25,273 | ) | ||||||||
Loss on extinguishment of debt |
| | | (3,454 | ) | |||||||||||
Other income, net |
2,673 | 1,897 | 6,803 | 8,469 | ||||||||||||
(Loss)/income before income taxes |
(3,075 | ) | 731 | (8,772 | ) | 7,903 | ||||||||||
(Provision)/benefit for income taxes |
(160 | ) | 488 | (560 | ) | 142 | ||||||||||
Net (loss)/income |
$ | (3,235 | ) | $ | 1,219 | $ | (9,332 | ) | $ | 8,045 | ||||||
(Loss)/income per share |
||||||||||||||||
Basic: |
||||||||||||||||
(Loss)/income per share |
$ | (0.10 | ) | $ | 0.04 | $ | (0.29 | ) | $ | 0.25 | ||||||
Weighted average shares outstanding |
32,417 | 32,095 | 32,358 | 32,038 | ||||||||||||
Diluted: |
||||||||||||||||
(Loss)/income per share |
$ | (0.10 | ) | $ | 0.04 | $ | (0.29 | ) | $ | 0.25 | ||||||
Weighted average shares outstanding |
32,417 | 32,297 | 32,358 | 32,277 | ||||||||||||
Non-GAAP Reconciliations: |
||||||||||||||||
Home closing gross profit |
$ | 38,070 | $ | 42,561 | $ | 108,037 | $ | 133,455 | ||||||||
Add: Real estate-related impairments |
920 | 680 | 2,174 | 1,526 | ||||||||||||
Adjusted home closing gross profit |
$ | 38,990 | $ | 43,241 | $ | 110,211 | $ | 134,981 | ||||||||
(Loss)/income before income taxes |
$ | (3,075 | ) | $ | 731 | $ | (8,772 | ) | $ | 7,903 | ||||||
Add: Real estate-related and joint venture (JV) impairments |
||||||||||||||||
Terminated lot options and land sales |
225 | | 227 | | ||||||||||||
Impaired projects |
822 | 680 | 2,074 | 1,526 | ||||||||||||
JV impairments |
| 112 | | 112 | ||||||||||||
Loss on early extinguishment of debt |
| | | 3,454 | ||||||||||||
Adjusted (loss)/income before income taxes |
$ | (2,028 | ) | $ | 1,523 | $ | (6,471 | ) | $ | 12,995 | ||||||
4
Meritage Homes Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)
(unaudited)
Condensed Consolidated Balance Sheets
(In thousands)
(unaudited)
September 30, 2011 | December 31, 2010 | |||||||
Assets: |
||||||||
Cash and cash equivalents |
$ | 157,104 | $ | 103,953 | ||||
Investments and securities |
188,996 | 299,345 | ||||||
Restricted cash |
11,109 | 9,344 | ||||||
Other receivables |
19,617 | 20,835 | ||||||
Real estate (1) |
798,057 | 738,928 | ||||||
Investments in unconsolidated entities |
10,783 | 10,987 | ||||||
Deposits on real estate under option or contract |
13,318 | 10,359 | ||||||
Other assets |
34,559 | 31,187 | ||||||
Total assets |
$ | 1,233,543 | $ | 1,224,938 | ||||
Liabilities and Equity: |
||||||||
Accounts payable, accrued liabilities,
home sale deposits and other
liabilities |
129,582 | 119,163 | ||||||
Senior notes |
480,377 | 479,905 | ||||||
Senior subordinated notes |
125,875 | 125,875 | ||||||
Total liabilities |
735,834 | 724,943 | ||||||
Total stockholders equity |
497,709 | 499,995 | ||||||
Total liabilities and equity |
$ | 1,233,543 | $ | 1,224,938 | ||||
(1) Real estate Allocated costs: |
||||||||
Homes under contract under construction |
$ | 123,347 | $ | 96,844 | ||||
Unsold homes, completed and under construction |
85,346 | 86,869 | ||||||
Model homes |
46,472 | 36,966 | ||||||
Finished home sites and home sites under development |
473,807 | 454,718 | ||||||
Land held for development or sale |
69,085 | 63,531 | ||||||
Total allocated costs |
$ | 798,057 | $ | 738,928 | ||||
Supplemental Information and Non-GAAP Financial Disclosures (in thousands unaudited):
Three Months Ended Sept 30, | Twelve Months Ended Sept 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Interest amortized to cost
of sales and interest
expense |
$ | 9,938 | $ | 11,608 | $ | 40,916 | $ | 48,992 | ||||||||
Depreciation and amortization |
$ | 1,694 | $ | 2,111 | $ | 7,102 | $ | 8,435 | ||||||||
Sept 30, 2011 | Dec 31, 2010 | Sept 30, 2010 | ||||||||||
Notes payable and other
borrowings |
$ | 606,252 | $ | 605,780 | $ | 605,623 | ||||||
Less: cash and cash
equivalents, restricted
cash, and investments and
securities |
(357,209 | ) | (412,642 | ) | (419,843 | ) | ||||||
Net debt |
249,043 | 193,138 | 185,780 | |||||||||
Stockholders equity |
497,709 | 499,995 | 499,302 | |||||||||
Total capital |
$ | 746,752 | $ | 693,133 | $ | 685,082 | ||||||
Net debt-to-capital |
33.4 | % | 27.9 | % | 27.1 | % |
5
Meritage Homes Corporation and Subsidiaries
Condensed Consolidated Statement of Cash Flows
(In thousands)
(unaudited)
Condensed Consolidated Statement of Cash Flows
(In thousands)
(unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net (loss)/income |
$ | (3,235 | ) | $ | 1,219 | $ | (9,332 | ) | $ | 8,045 | ||||||
Loss on early
extinguishment of debt |
| | | 3,454 | ||||||||||||
Real-estate related
impairments |
1,047 | 680 | 2,301 | 1,526 | ||||||||||||
Equity in earnings from
JVs and distributions of
JV earnings, net |
158 | 637 | 678 | 1,404 | ||||||||||||
Increase in real estate
and deposits, net |
(24,153 | ) | (29,301 | ) | (63,846 | ) | (71,921 | ) | ||||||||
Other operating activities |
7,705 | 6,083 | 18,986 | 95,655 | ||||||||||||
Net cash (used
in)/provided by operating
activities |
(18,478 | ) | (20,682 | ) | (51,213 | ) | 38,163 | |||||||||
Cash provided by/(used
in) investing activities |
7,981 | 9,174 | 102,533 | (138,464 | ) | |||||||||||
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 |
33 | 261 | 1,831 | 1,770 | ||||||||||||
Net cash provided by/
(used in) financing
activities |
33 | 163 | 1,831 | (3,706 | ) | |||||||||||
Net (decrease)/increase
in cash and cash
equivalents |
(10,464 | ) | (11,345 | ) | 53,151 | (104,007 | ) | |||||||||
Beginning cash and cash
equivalents |
167,568 | 156,669 | 103,953 | 249,331 | ||||||||||||
Ending cash and cash
equivalents (1) |
$ | 157,104 | $ | 145,324 | $ | 157,104 | $ | 145,324 | ||||||||
(1) | Ending cash and cash equivalents as of September 30 excludes investments and securities and restricted cash totaling $200 million in 2011 and $275 million in 2010. 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 Sheets or in the Statements of Cash Flows. |
6
Meritage Homes Corporation and Subsidiaries
Operating Data
(Dollars in thousands)
(unaudited)
Operating Data
(Dollars in thousands)
(unaudited)
For the Three Months Ended September 30, | ||||||||||||||||
2011 | 2010 | |||||||||||||||
Homes | Value | Homes | Value | |||||||||||||
Homes Closed: |
||||||||||||||||
California |
83 | $ | 28,708 | 112 | $ | 43,803 | ||||||||||
Nevada |
19 | 4,222 | 17 | 3,404 | ||||||||||||
West Region |
102 | 32,930 | 129 | 47,207 | ||||||||||||
Arizona |
137 | 33,314 | 167 | 41,387 | ||||||||||||
Texas |
440 | 102,121 | 425 | 107,663 | ||||||||||||
Colorado |
68 | 21,500 | 39 | 12,608 | ||||||||||||
Central Region |
645 | 156,935 | 631 | 161,658 | ||||||||||||
Florida |
93 | 27,669 | 88 | 24,938 | ||||||||||||
East Region |
93 | 27,669 | 88 | 24,938 | ||||||||||||
Total |
840 | $ | 217,534 | 848 | $ | 233,803 | ||||||||||
Homes Ordered: |
||||||||||||||||
California |
121 | $ | 41,146 | 86 | $ | 29,614 | ||||||||||
Nevada |
10 | 2,182 | 11 | 2,279 | ||||||||||||
West Region |
131 | 43,328 | 97 | 31,893 | ||||||||||||
Arizona |
189 | 52,684 | 156 | 39,214 | ||||||||||||
Texas |
361 | 82,758 | 347 | 82,584 | ||||||||||||
Colorado |
80 | 26,715 | 39 | 12,603 | ||||||||||||
Central Region |
630 | 162,157 | 542 | 134,401 | ||||||||||||
Florida |
145 | 39,750 | 67 | 17,277 | ||||||||||||
East Region |
145 | 39,750 | 67 | 17,277 | ||||||||||||
Total |
906 | $ | 245,235 | 706 | $ | 183,571 | ||||||||||
7
Meritage Homes Corporation and Subsidiaries
Operating Data
(Dollars in thousands)
(unaudited)
Operating Data
(Dollars in thousands)
(unaudited)
For the Nine Months Ended September 30, | ||||||||||||||||
2011 | 2010 | |||||||||||||||
Homes | Value | Homes | Value | |||||||||||||
Homes Closed: |
||||||||||||||||
California |
228 | $ | 77,930 | 323 | $ | 114,498 | ||||||||||
Nevada |
49 | 10,360 | 65 | 12,628 | ||||||||||||
West Region |
277 | 88,290 | 388 | 127,126 | ||||||||||||
Arizona |
418 | 100,230 | 548 | 119,147 | ||||||||||||
Texas |
1,269 | 302,536 | 1,578 | 382,592 | ||||||||||||
Colorado |
175 | 55,757 | 110 | 32,721 | ||||||||||||
Central Region |
1,862 | 458,523 | 2,236 | 534,460 | ||||||||||||
Florida |
235 | 68,341 | 239 | 64,204 | ||||||||||||
East Region |
235 | 68,341 | 239 | 64,204 | ||||||||||||
Total |
2,374 | $ | 615,154 | 2,863 | $ | 725,790 | ||||||||||
Homes Ordered: |
||||||||||||||||
California |
293 | $ | 98,859 | 312 | $ | 108,156 | ||||||||||
Nevada |
51 | 11,072 | 59 | 11,651 | ||||||||||||
West Region |
344 | 109,931 | 371 | 119,807 | ||||||||||||
Arizona |
499 | 128,592 | 560 | 126,743 | ||||||||||||
Texas |
1,252 | 296,886 | 1,375 | 330,582 | ||||||||||||
Colorado |
221 | 71,345 | 118 | 36,903 | ||||||||||||
Central Region |
1,972 | 496,823 | 2,053 | 494,228 | ||||||||||||
Florida |
340 | 95,107 | 246 | 66,631 | ||||||||||||
East Region |
340 | 95,107 | 246 | 66,631 | ||||||||||||
Total |
2,656 | $ | 701,861 | 2,670 | $ | 680,666 | ||||||||||
Order Backlog: |
||||||||||||||||
California |
110 | $ | 36,224 | 78 | $ | 27,980 | ||||||||||
Nevada |
14 | 3,081 | 8 | 1,694 | ||||||||||||
West Region |
124 | 39,305 | 86 | 29,674 | ||||||||||||
Arizona |
206 | 60,342 | 159 | 39,706 | ||||||||||||
Texas |
446 | 105,957 | 512 | 129,554 | ||||||||||||
Colorado |
98 | 32,552 | 47 | 15,638 | ||||||||||||
Central Region |
750 | 198,851 | 718 | 184,898 | ||||||||||||
Florida |
186 | 50,367 | 98 | 27,839 | ||||||||||||
East Region |
186 | 50,367 | 98 | 27,839 | ||||||||||||
Total |
1,060 | $ | 288,523 | 902 | $ | 242,411 | ||||||||||
8
Meritage Homes Corporation and Subsidiaries
Operating Data
(unaudited)
Operating Data
(unaudited)
Third Quarter 2011 | Third Quarter 2010 | |||||||||||||||
Beg. | End | Beg. | End | |||||||||||||
Active Communities: |
||||||||||||||||
California |
18 | 22 | 12 | 13 | ||||||||||||
Nevada |
3 | 3 | 5 | 5 | ||||||||||||
West Region |
21 | 25 | 17 | 18 | ||||||||||||
Arizona |
35 | 37 | 33 | 32 | ||||||||||||
Texas |
68 | 65 | 78 | 82 | ||||||||||||
Colorado |
8 | 9 | 7 | 8 | ||||||||||||
Central Region |
111 | 111 | 118 | 122 | ||||||||||||
Florida |
13 | 13 | 13 | 10 | ||||||||||||
East Region |
13 | 13 | 13 | 10 | ||||||||||||
Total |
145 | 149 | 148 | 150 | ||||||||||||
First Nine Months 2011 | First Nine Months 2010 | |||||||||||||||
Beg. | End | Beg. | End | |||||||||||||
Active Communities: |
||||||||||||||||
California |
14 | 22 | 7 | 13 | ||||||||||||
Nevada |
4 | 3 | 6 | 5 | ||||||||||||
West Region |
18 | 25 | 13 | 18 | ||||||||||||
Arizona |
32 | 37 | 26 | 32 | ||||||||||||
Texas |
82 | 65 | 98 | 82 | ||||||||||||
Colorado |
9 | 9 | 6 | 8 | ||||||||||||
Central Region |
123 | 111 | 130 | 122 | ||||||||||||
Florida |
10 | 13 | 10 | 10 | ||||||||||||
East Region |
10 | 13 | 10 | 10 | ||||||||||||
Total |
151 | 149 | 153 | 150 | ||||||||||||
ABOUT MERITAGE HOMES CORPORATION
Meritage Homes is one of the top 10 homebuilders in the United States based on homes closed.
Meritage builds a variety of homes across the Southern and Western states to appeal to a wide range
of buyers, including first-time, move-up, luxury and active adults. As of September 30, 2011, the
Company had 149 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 Southern California. Meritage also opened its first communities in
the Raleigh-Durham market during October 2011.
Meritage has designed and built more than 70,000 homes in its 26-year history, and has a
reputation for its distinctive style, quality construction and positive customer experience. In
2010, Meritage launched its new Simply Smart Series of homes and its 99-day guaranteed completion
program in certain communities. Meritage
was the first large national homebuilder to be 100 percent ENERGY STAR® qualified in every
home started since January 1, 2010.
Meritage Homes is listed on the NYSE under the symbol MTH.
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
9
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements include managements belief that the
Company will show year-over-year sales improvement in the fourth quarter; managements confidence
in long-term demographics in the homebuilding industry; that the homebuilding market will improve
and that the Company is well positioned to benefit from such improvement; and that Meritage will
record sales in its North Carolina division in the fourth quarter.
Such statements are based upon preliminary financial and operating data which are subject to
finalization by management and review by Meritages independent registered public accounting firm,
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.
Meritages business is subject to a number of risks and uncertainties. As a result of those
risks and uncertainties, the Companys stock and note prices may fluctuate dramatically. The risks
and uncertainties include but are not limited to the following: 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; inflation in the cost of materials used to construct homes; the adverse effect of
slower sales absorption rates; potential write-downs or write-offs of assets, including
pre-acquisition costs and deposits; our potential exposure to natural disasters; 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 adverse impacts of cancellations resulting from small deposits
relating to our sales contracts; 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; our 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; fluctuations in quarterly operating results; the Companys financial leverage and
level of indebtedness; our ability to take certain actions because of restrictions contained in the
indentures for the Companys senior and senior subordinated notes and our ability to raise
additional capital when and if needed; our credit ratings; successful integration of future
acquisitions; government regulations and legislative or other initiatives that seek to restrain
growth or new housing construction or similar measures; acts of war; the replication of our Green
technologies by our competitors; 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, 2010 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.
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