Home builder Meritage Homes reported a record second quarter, with over $1 billion worth of new orders.
The dollar value of sales orders generated in the second quarter increased 44 percent over the same period last year. The company’s backlog at June 30, 2005, also reached an all-time high, increasing 83 percent over the June 30, 2004, level, and set a second-quarter record for home closing revenue, with an increase of 51 percent 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 percent from the prior year’s second quarter.”
The company’s dollar value of sales orders increased 72 percent in California, “reflecting a robust housing market as well as a 29 percent increase in the number of actively selling communities,” Meritage announced.
In the Texas market, the company had an 11 percent increase in the dollar value of sales orders for the second quarter compared with second-quarter 2004. “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 percent and a decrease in the number of homes ordered of approximately 8 percent over the prior year’s second quarter,” Meritage reported.
The company entered the Orlando, Fla., market in December 2004, and is establishing a regional office in Tampa.
“Companywide, home closing revenue increased 51 percent for the quarter, including very solid increases of 84 percent in our California division and 68 percent in Arizona,” Hilton said. Home-closing revenue rose 15 percent in Texas over the prior year’s second quarter, the company reported, while closing revenue in the company’s Nevada division declined 19 percent for the quarter as compared to the same period last year.
The average sales price of homes ordered during the second quarter increased 25 percent to approximately $343,100 from approximately $273,900 during the same quarter last year, and average sales prices rose 30 percent in Arizona and 18 percent in California. The number of actively selling communities increased 19 percent to 163 at June 30, 2005, from 137 at June 30, 2004, and increased 17 percent over the 139 communities open at the end of last year, Meritage reported.
In the first half of 2005, home closing revenue increased 41 percent companywide, including increases of 66 percent in California, 63 percent in Arizona and 7 percent in Texas over the first half of 2004, and the dollar value of new orders increased 46 percent. For the same periods, the dollar value of sales orders in California rose 76 percent, and increased 25 percent and 9 percent in Arizona and Texas, respectively. In Nevada, the dollar value of sales orders grew 127 percent 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 billion on over 9,000 home closings,” Meritage reported.
Meritage will hold its second-quarter earnings call at 10 a.m. Thursday, July 28, 2005. To participate in the call, 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 Web site at http://www.meritagehomes.com/. The call may also be accessed through CCBN for two weeks at http://www.fulldisclosure.com/. A replay of the call will be available from 11 a.m. EST, July 28, 2005, through midnight Aug. 4, 2005. The domestic replay telephone number is (800) 642-1687, and the international replay telephone number is (706) 645-9291, passcode 7630526.
Meritage Homes Corp. is one of the nation’s largest single-family home builders, and is traded on the New York Stock Exchange. Meritage has built about 39,000 homes, ranging from entry-level to semi-custom luxury. Meritage operates in six of the top-10 single-family housing markets in the country.
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