EX-99.1 2 exhibit991.htm EXHIBIT Exhibit 99.1


Exhibit 99.1

 
 
 
 
 
FOR IMMEDIATE RELEASE
 
 
 
 
Contacts:
Brent Anderson, VP Investor Relations
 
 
 
 
(972) 580-6360 (office)
 
 
 
 
Brent.Anderson@meritagehomes.com
Meritage Homes Reports Strong Third Quarter 2012 Results
Diluted EPS of $0.19; Revenue increases 58%; Orders up 33%; Backlog value up 70%

SCOTTSDALE, Ariz., October 25, 2012 (GLOBE NEWSWIRE) – Meritage Homes Corporation (NYSE: MTH), a leading U.S. homebuilder, today announced third quarter results for the period ended September 30, 2012.
Summary Operating Results (unaudited)
(Dollars in thousands, except per share amounts)
 
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2012
 
2011
 
%Chg
 
2012
 
2011
 
%Chg
Homes closed (units)
 
1,197

 
840

 
43
%
 
2,998

 
2,374

 
26
%
Home closing revenue
 
$
334,880

 
$
217,534

 
54
%
 
$
820,242

 
$
615,154

 
33
%
Average sales price - closings
 
$
280

 
$
259

 
8
%
 
$
274

 
$
259

 
6
%
Home orders (units)
 
1,204

 
906

 
33
%
 
3,701

 
2,656

 
39
%
Home order value
 
$
366,752

 
$
245,235

 
50
%
 
$
1,060,910

 
$
701,861

 
51
%
Average sales price - orders
 
$
305

 
$
271

 
13
%
 
$
287

 
$
264

 
9
%
Ending backlog (units)
 
 
 
 
 
 
 
1,618

 
1,060

 
53
%
Ending backlog value
 
 
 
 
 
 
 
$
489,522

 
$
288,523

 
70
%
Average sales price - backlog
 
 
 
 
 
 
 
$
303

 
$
272

 
11
%
Net income/(loss)
 
$
6,784

 
$
(3,235
)
 
n/m

 
$
10,035

 
$
(9,332
)
 
n/m

Diluted EPS
 
$
0.19

 
$
(0.10
)
 
n/m

 
$
0.30

 
$
(0.29
)
 
n/m

Management comments
“Our results for the third quarter improved across the board, reflecting the benefits of our superior community locations, fresh new product designs and industry-leading energy efficiency. We reported strong year over year increases in home closings, revenue, margins and earnings, as well as home orders, backlog and lot count,” said Steven J. Hilton, chairman and chief executive officer of Meritage Homes. “We generated net income of $6.8 million, or $0.19 per diluted share, in the third quarter of 2012, which was negatively impacted by a charge of $8.7 million, or $0.24 per diluted share, for a reserve related to ongoing litigation over one former joint venture project in the Las Vegas area, which is likely to remain unresolved for the foreseeable future. These results reflect a significant improvement over the third quarter of 2011, when we reported a net loss of $3.2 million, or ($0.10) per diluted share.

1


“We've been in the early stages of a recovery in the homebuilding industry since the beginning of this year, and Meritage has reported 39% growth in total orders over 2011 during that time, with September being our eleventh consecutive month of year-over-year increases in orders,” he continued. “We believe the improving homebuilding industry could serve as a catalyst to help our national economy grow. We have raised additional capital over the past two quarters to take advantage of anticipated opportunities for growth, and have been deploying that capital to acquire more lots and open new communities. At this time, we expect to close between 4,100-4,300 homes in 2012.”
Third quarter 2012 operating results compared to 2011
•
Net income increased $10.0 million over 2011 to $6.8 million ($0.19 per diluted share) in the third quarter of 2012, compared to a $3.2 million loss in the prior year. The 2012 results included a previously announced $8.7 million charge to increase reserves related to pending litigation surrounding the Nevada joint venture known as South Edge, as explained in an 8-K filed on September 6, 2012, and $417,000 of impairments, compared to impairments of $1.0 million in the prior year.
•
Home closing revenue increased 54% due to a 43% increase in home closings and an 8% increase in average price over the prior year period.
◦Total closings of 1,197 homes for the third quarter was the highest quarterly total since the second quarter of 2010.
◦California and Arizona achieved the highest increases in closing revenue, at 209% and 79%, respectively, compared to the third quarter of 2011.
•
Home orders increased 33% and combined with a 13% increase in average selling price for a 50% increase in total order value over the third quarter of 2011.
◦Total active communities increased to 153 at September 30, 2012, compared to 149 at September 30, 2011.
◦Average orders per community during the quarter increased 27% over the prior year to 7.9, compared to 6.2 in 2011. Excluding operations in Nevada that are winding down, the states with the highest orders per community were California, at 12.7; Colorado, at 11.0; and Florida, at 10.1. The greatest accelerations in orders per community over 2011 were in California and Arizona.
◦Cancellation rate decreased to 13% in the third quarter of 2012, compared to 17% in the third quarter of 2011, below our historical average cancellation rate in the 20-25% range.
◦Ending backlog of orders was up 53% over the prior year, and the total value of orders in backlog was up 70%, aided by an 11% increase in average price per home
•
Home closing gross margin increased to 18.6% in the third quarter of 2012 compared to 17.5% in the third quarter of 2011. Margins increased due to sales price increases and construction overhead leverage, partially offset by increases in various cost components.
•
Commissions and selling expenses decreased by 140 basis points from the prior year, to 7.7% of home closing revenue in the third quarter of 2012, compared to 9.1% of home closing revenue in the third quarter of 2011, as higher closing revenue resulted in greater leverage of the fixed components within selling costs.

2


•
General and administrative expenses for the third quarter of 2012 decreased by 200 basis points to 5.6% of total revenue in 2012, compared to 7.6% of total revenue in 2011.
•
Interest expense decreased to $5.0 million or 1.5% of revenue in the third quarter of 2012, despite additional debt issued during the quarter, compared to $7.5 million or 3.5% of revenue in the third quarter of 2011. A greater portion of interest incurred was capitalized to assets under development, and interest expense leverage improved with increased revenue.
•
Pre-tax margin increased 340 basis points to 2.0% in the third quarter of 2012, despite the litigation-related charge which reduced pre-tax margin by 250 basis points, as compared to a (1.4%) pre-tax margin in the third quarter of 2011.
Year to date 2012 operating results compared to 2011
•
Net income of $10.0 million for the first nine months of 2012 included a $5.8 million loss on early extinguishment of debt and $1.6 million of impairments, in addition to the $8.7 million charge related to litigation surrounding the South Edge joint venture, and a $4.8 million net tax benefit primarily due to the reversal of most of a valuation allowance previously recorded against the company's deferred state tax asset in Florida. By comparison, the $9.3 million loss in the third quarter of 2011 included $2.3 million of impairments and a tax provision of $560,000.
•
Pre-tax income increased $14.0 million to $5.2 million in the first nine months of 2012, from a pre-tax loss of $8.8 million in the first nine months of 2011. Adjusted pre-tax income excluding the loss on extinguishment of debt, impairments and the charge related to the South Edge litigation was $21.3 million for the first nine months of 2012, compared to an adjusted pre-tax loss of $6.5 million, excluding impairments, for the same period in 2011.
•
Home closings and closing revenue increased 26% and 33%, respectively, for the first nine months of 2012 as compared to 2011.
•
Year-to-date home closing gross margins improved by 60 basis points to 18.2% for the first nine months of 2012, compared to 17.6% for 2011.
•
Year-to-date net orders through September 30, 2012 increased 39% in 2012 over 2011, and combined with a 9% increase in average sales prices to result in total order value increasing 51% year over year.
Balance sheet items
•
Cash and cash equivalents, restricted cash and securities at September 30, 2012, totaled $386.9 million, compared to $333.2 million at December 31, 2011 and $357.2 million at September 30, 2011.
•
Net increase in cash and cash equivalents, restricted cash and securities of $182.2 million during the third quarter of 2012 resulted from increased closings and net proceeds from capital transactions, partially offset by land spending and increases in real estate assets.
◦Raised approximately $87.1 million in net proceeds from an equity offering of 2.65 million common shares in July of 2012.
◦Raised approximately $122.3 million in net proceeds from the issuance of $126.5 million aggregate principle amount of 1.875% convertible senior notes due 2032, in September of 2012, with a 47.5% conversion premium.

3


◦Cash spent on land and development during the third quarter of 2012 totaled $114.1 million, including the purchase of 2,129 lots.
◦Total real estate assets of $1.0 billion at September 30, 2012, compared to $815.4 million at December 31, 2011 and $798.1 million one year ago.
•
Ended the quarter with 17,842 total lots under control, of which 85% were owned, compared to 17,586 at June 30, 2012 and 16,049 at September 30, 2011, a net increase of approximately 1,800 lots over the prior year.
•
Put in place a $125 million credit facility for additional liquidity to finance growth. Nothing was drawn on the facility through September 30, 2012.
•
Net debt-to-capital ratio at September 30, 2012 was 36.0%, compared to 33.4% at September 30, 2011.


Conference call
Management will host a conference call today to discuss the Company's results at 10:30 a.m. Eastern Time (7:30 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 Company's web site at http://investors.meritagehomes.com. For telephone participants, the dial-in number is 877-317-6789 and the conference number is 10019347. Participants are encouraged to dial in five minutes before the call begins. A replay of the call will be available for fifteen days, beginning at 12:00 p.m. ET on October 25, 2012 on the website noted above, or by dialing 877-344-7529, and referencing conference number 10019347. For more information, visit 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,
 
 
2012
 
2011
 
2012
 
2011
Operating results
 
 
 
 
 
 
 
 
Home closing revenue
 
$
334,880

 
$
217,534

 
$
820,242

 
$
615,154

Land closing revenue
 
7,763

 
—

 
8,846

 
100

Total closing revenue
 
342,643

 
217,534

 
829,088

 
615,254

Home closing gross profit
 
62,154

 
38,070

 
149,213

 
108,037

Land closing gross profit/(loss)
 
270

 
(127
)
 
13

 
(118
)
Total closing gross profit
 
62,424

 
37,943

 
149,226

 
107,919

Commissions and other sales costs
 
(25,855
)
 
(19,708
)
 
(67,950
)
 
(53,876
)
General and administrative expenses
 
(19,209
)
 
(16,466
)
 
(50,446
)
 
(46,582
)
Interest expense
 
(5,009
)
 
(7,517
)
 
(18,718
)
 
(23,036
)
Loss on extinguishment of debt
 
—

 
—

 
(5,772
)
 
—

Other (expense)/income, net (1)
 
(5,365
)
 
2,673

 
(1,086
)
 
6,803

Income/(loss) before income taxes
 
6,986

 
(3,075
)
 
5,254

 
(8,772
)
(Provision for)/benefit from income taxes
 
(202
)
 
(160
)
 
4,781

 
(560
)
Net income/(loss)
 
$
6,784

 
$
(3,235
)
 
$
10,035

 
$
(9,332
)
Income/(loss) per share
 
 
 
 
 
 
 
 
Basic:
 
 
 
 
 
 
 
 
Income/(loss) per share
 
$
0.19

 
$
(0.10
)
 
$
0.30

 
$
(0.29
)
Weighted average shares outstanding
 
35,216

 
32,417

 
33,541

 
32,358

Diluted:
 
 
 
 
 
 
 
 
Income/(loss) per share
 
$
0.19

 
$
(0.10
)
 
$
0.30

 
$
(0.29
)
Weighted average shares outstanding
 
35,761

 
32,417

 
34,010

 
32,358

Non-GAAP Reconciliations:
 
 
 
 
 
 
 
 
Home closing gross profit
 
$
62,154

 
$
38,070

 
$
149,213

 
$
108,037

Add: Real estate-related impairments
 
417

 
920

 
904

 
2,174

Adjusted home closing gross profit
 
$
62,571

 
$
38,990

 
$
150,117

 
$
110,211

Income/(loss) before income taxes
 
$
6,986

 
$
(3,075
)
 
$
5,254

 
$
(8,772
)
Add Real estate-related impairments:
 
 
 
 
 
 
 
 
Terminated lot options and land sales
 
263

 
225

 
1,015

 
227

Impaired Projects
 
154

 
822

 
558

 
2,074

Litigation reserve related to South Edge
 
8,720

 
—

 
8,720

 
—

Loss on early extinguishment of debt
 
—

 
—

 
5,772

 
—

Adjusted income/(loss) before income taxes
 
$
16,123

 
$
(2,028
)
 
$
21,319

 
$
(6,471
)

(1) 2012 other (expense)/income, net includes an $8.7 million charge to increase reserves related to ongoing and unresolved litigation associated with the joint venture project known as South Edge in the Las Vegas area, as explained in an 8-K on September 6, 2012.







5




Meritage Homes Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)
(unaudited)
 
 
 
September 30, 2012
 
December 31, 2011
Assets:
 
 
 
 
Cash and cash equivalents
 
$
305,049

 
$
173,612

Investments and securities
 
66,549

 
147,429

Restricted cash
 
15,254

 
12,146

Other receivables
 
16,681

 
14,932

Real estate (2)
 
1,004,825

 
815,425

Deposits on real estate under option or contract
 
12,983

 
15,208

Investments in unconsolidated entities
 
12,008

 
11,088

Other assets
 
47,853

 
31,538

Total assets
 
$
1,481,202

 
$
1,221,378

Liabilities and Equity:
 
 
 
 
Accounts payable, accrued liabilities, home sale deposits and other liabilities
 
$
162,460

 
$
126,057

Senior notes
 
496,350

 
480,534

Convertible senior notes
 
126,500

 
—

Senior subordinated notes
 
99,825

 
125,875

Total liabilities
 
885,135

 
732,466

Total stockholders’ equity
 
596,067

 
488,912

Total liabilities and equity
 
$
1,481,202

 
$
1,221,378

(2) Real estate – Allocated costs:
 
 
 
 
Homes under contract under construction
 
$
205,616

 
$
101,445

Unsold homes, completed and under construction
 
98,354

 
97,246

Model homes
 
55,853

 
49,892

Finished home sites and home sites under development
 
524,842

 
441,242

Land held for development
 
54,981

 
55,143

Land held for sale
 
24,619

 
29,908

Communities in mothball status
 
40,560

 
40,549

Total allocated costs
 
$
1,004,825

 
$
815,425

















6


Supplemental Information and Non-GAAP Financial Disclosures (In thousands – unaudited):
 
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2012
 
2011
 
2012
 
2011
Depreciation and amortization
 
$
2,299

 
$
1,694

 
$
5,913

 
$
5,267

 
 
 
 
 
 
 
 
 
Summary of Capitalized Interest:
 
 
 
 
 
 
 
 
Capitalized interest, beginning of period
 
$
17,836

 
$
13,205

 
$
14,810

 
$
11,679

Interest incurred
 
11,654

 
10,848

 
33,819

 
32,545

Interest expensed
 
(5,009
)
 
(7,517
)
 
(18,718
)
 
(23,036
)
Interest amortized to cost of home, land closings and impairments
 
(4,296
)
 
(2,421
)
 
(9,726
)
 
(7,073
)
Capitalized interest, end of period
 
$
20,185

 
$
14,115

 
$
20,185

 
$
14,115

 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2012
 
December 31, 2011
Notes payable and other borrowings
 
 
 
 
 
$
722,675

 
$
606,409

Less: cash and cash equivalents, restricted cash, and investments and securities
 
 
 
 
 
(386,852
)
 
(333,187
)
Net debt
 
 
 
 
 
335,823

 
273,222

Stockholders’ equity
 
 
 
 
 
596,067

 
488,912

Total capital
 
 
 
 
 
$
931,890

 
$
762,134

Net debt-to-capital
 
 
 
 
 
36.0
%
 
35.8
%
 

7





Meritage Homes Corporation and Subsidiaries
Condensed Consolidated Statement of Cash Flows
(In thousands)
(unaudited)
 
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2012
 
2011
 
2012
 
2011
Operating results
 
 
 
 
 
 
 
 
Net income/(loss)
 
$
6,784

 
$
(3,235
)
 
$
10,035

 
$
(9,332
)
Loss on early extinguishment of debt
 
—

 
—

 
5,772

 
—

Real-estate related impairments
 
417

 
1,047

 
1,573

 
2,301

Deferred tax valuation benefit
 
(4
)
 
—

 
(7,709
)
 
—

Equity in earnings from JVs and distributions of JV earnings—net
 
148

 
158

 
(508
)
 
678

Increase in real estate and deposits, net
 
(48,079
)
 
(24,153
)
 
(188,317
)
 
(63,846
)
Other operating activities
 
13,389

 
7,705

 
46,902

 
18,986

Net cash used in operating activities
 
(27,345
)
 
(18,478
)
 
(132,252
)
 
(51,213
)
Net cash provided by investing activities
 
38,431

 
7,981

 
70,744

 
102,533

Proceeds from issuance of new debt
 
126,500

 
—

 
426,500

 
—

Debt issuance costs
 
(4,166
)
 
—

 
(9,500
)
 
—

Repayments of senior notes
 
—

 
—

 
(315,080
)
 
—

Proceeds from issuance of common stock, net
 
87,125

 
—

 
87,125

 
—

Proceeds from stock option exercises
 
2,678

 
33

 
3,900

 
1,831

Net cash provided by financing activities
 
212,137

 
33

 
192,945

 
1,831

Net increase/(decrease) in cash
 
223,223

 
(10,464
)
 
131,437

 
53,151

Beginning cash and cash equivalents
 
81,826

 
167,568

 
173,612

 
103,953

Ending cash and cash equivalents (3)
 
$
305,049

 
$
157,104

 
$
305,049

 
$
157,104

 
(3) Ending cash and cash equivalents as of September 30, 2012 and September 30, 2011 excludes investments and securities and restricted cash totaling $82 million and $200 million, respectively.




8


Meritage Homes Corporation and Subsidiaries
Operating Data
(Dollars in thousands)
(unaudited)
 
 
 
Three Months Ended September 30,
 
 
2012
 
2011
 
 
Homes
 
Value
 
Homes
 
Value
Homes Closed:
 
 
 
 
 
 
 
 
California
 
244

 
$
88,748

 
83

 
$
28,708

Nevada
 
22

 
4,113

 
19

 
4,222

West Region
 
266

 
92,861

 
102

 
32,930

Arizona
 
243

 
59,519

 
137

 
33,314

Texas
 
434

 
104,041

 
440

 
102,121

Colorado
 
83

 
27,639

 
68

 
21,500

Central Region
 
760

 
191,199

 
645

 
156,935

North Carolina
 
40

 
14,459

 
—

 
—

Florida
 
131

 
36,361

 
93

 
27,669

East Region
 
171

 
50,820

 
93

 
27,669

Total
 
1,197

 
$
334,880

 
840

 
$
217,534

Homes Ordered:
 
 
 
 
 
 
 
 
California
 
248

 
$
94,974

 
121

 
$
41,146

Nevada
 
22

 
4,384

 
10

 
2,182

West Region
 
270

 
99,358

 
131

 
43,328

Arizona
 
229

 
70,315

 
189

 
52,684

Texas
 
425

 
106,116

 
361

 
82,758

Colorado
 
88

 
28,925

 
80

 
26,715

Central Region
 
742

 
205,356

 
630

 
162,157

North Carolina
 
36

 
12,709

 
—

 
—

Florida
 
156

 
49,329

 
145

 
39,750

East Region
 
192

 
62,038

 
145

 
39,750

Total
 
1,204

 
$
366,752

 
906

 
$
245,235



















9


Meritage Homes Corporation and Subsidiaries
Operating Data
(Dollars in thousands)
(unaudited)
 
 
 
Nine Months Ended September 30,
 
 
2012
 
2011
 
 
Homes
 
Value
 
Homes
 
Value
Homes Closed:
 
 
 
 
 
 
 
 
California
 
489

 
$
172,575

 
228

 
$
77,930

Nevada
 
39

 
7,402

 
49

 
10,360

West Region
 
528

 
179,977

 
277

 
88,290

Arizona
 
593

 
153,190

 
418

 
100,230

Texas
 
1,190

 
277,436

 
1,269

 
302,536

Colorado
 
227

 
75,816

 
175

 
55,757

Central Region
 
2,010

 
506,442

 
1,862

 
458,523

North Carolina
 
84

 
30,513

 
—

 
—

Florida
 
376

 
103,310

 
235

 
68,341

East Region
 
460

 
133,823

 
235

 
68,341

Total
 
2,998

 
$
820,242

 
2,374

 
$
615,154

Homes Ordered:
 
 
 
 
 
 
 
 
California
 
714

 
$
258,053

 
293

 
$
98,859

Nevada
 
61

 
11,455

 
51

 
11,072

West Region
 
775

 
269,508

 
344

 
109,931

Arizona
 
738

 
200,258

 
499

 
128,592

Texas
 
1,370

 
332,007

 
1,252

 
296,886

Colorado
 
266

 
88,012

 
221

 
71,345

Central Region
 
2,374

 
620,277

 
1,972

 
496,823

North Carolina
 
109

 
38,841

 
—

 
—

Florida
 
443

 
132,284

 
340

 
95,107

East Region
 
552

 
171,125

 
340

 
95,107

Total
 
3,701

 
$
1,060,910

 
2,656

 
$
701,861

Order Backlog:
 
 
 
 
 
 
 
 
California
 
307

 
$
113,126

 
110

 
$
36,224

Nevada
 
27

 
5,129

 
14

 
3,081

West Region
 
334

 
118,255

 
124

 
39,305

Arizona
 
303

 
92,300

 
206

 
60,342

Texas
 
576

 
148,065

 
446

 
105,957

Colorado
 
109

 
35,689

 
98

 
32,552

Central Region
 
988

 
276,054

 
750

 
198,851

North Carolina
 
49

 
16,944

 
—

 
—

Florida
 
247

 
78,269

 
186

 
50,367

East Region
 
296

 
95,213

 
186

 
50,367

Total
 
1,618

 
$
489,522

 
1,060

 
$
288,523








10


Meritage Homes Corporation and Subsidiaries
Operating Data
(unaudited)
 
 
 
Three Months Ended
 
 
September 30, 2012
 
September 30, 2011
 
 
Beg.
 
End
 
Beg.
 
End
Active Communities:
 
 
 
 
 
 
 
 
California
 
20

 
19

 
18

 
22

Nevada
 
2

 
2

 
3

 
3

West Region
 
22

 
21

 
21

 
25

Arizona
 
32

 
34

 
35

 
37

Texas
 
68

 
68

 
68

 
65

Colorado
 
8

 
8

 
8

 
9

Central Region
 
108

 
110

 
111

 
111

North Carolina
 
5

 
7

 
—

 
—

Florida
 
16

 
15

 
13

 
13

East Region
 
21

 
22

 
13

 
13

Total
 
151

 
153

 
145

 
149

 
 
 
Nine Months Ended
 
 
September 30, 2012
 
September 30, 2011
 
 
Beg.
 
End
 
Beg.
 
End
Active Communities:
 
 
 
 
 
 
 
 
California
 
20

 
19

 
14

 
22

Nevada
 
2

 
2

 
4

 
3

West Region
 
22

 
21

 
18

 
25

Arizona
 
37

 
34

 
32

 
37

Texas
 
67

 
68

 
82

 
65

Colorado
 
10

 
8

 
9

 
9

Central Region
 
114

 
110

 
123

 
111

North Carolina
 
3

 
7

 
—

 
—

Florida
 
18

 
15

 
10

 
13

East Region
 
21

 
22

 
10

 
13

Total
 
157

 
153

 
151

 
149





11


About Meritage Homes Corporation
Meritage Homes is the ninth-largest public homebuilder in the United States based on homes closed in 2011. 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, 2012, the company had 153 actively selling communities in 15 metropolitan areas, including Northern California, East Bay/Central Valley and Southern California, Houston, Dallas/Ft. Worth, Austin, San Antonio, Phoenix/Scottsdale, Tucson, Las Vegas, Denver, Orlando, Tampa and Raleigh-Durham. In 2012, Meritage also announced its entry into the Charlotte market.

Meritage is an industry leader in innovation and energy efficiency. Meritage was the first national homebuilder to be 100 percent ENERGY STAR® qualified in every home it builds, and far exceeds ENERGY STAR standards in most of its communities. Meritage has designed and built more than 75,000 homes in its 27-year history, and has a reputation for its distinctive style, quality construction, and positive customer experience.


For more information, visit meritagehomes.com.
The Meritage Homes Corporation logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=2624
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include those regarding the Company’s expectations for a continued rebound in the homebuilding industry, its projected closings in 2012 and 2013, and its ability to use additional capital to grow, all of which are subject to significant risks and uncertainties. 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.
Meritage’s business is subject to a number of risks and uncertainties. As a result of those risks and uncertainties, the Company’s 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 an unexpected setback in the current economic recovery; 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 order absorption rates; potential write-downs or write-offs of assets, including pre-acquisition costs and deposits; the availability of finished lots and undeveloped land; 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 Company’s financial leverage and level of indebtedness; our ability to take certain actions because of restrictions contained in the indentures for the Company’s 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; our exposure to information technology failures and security breaches; 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, 2011 and most recent 10-Q under the caption “Risk Factors,” which can be found on our website.
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