Meritage Homes Corp. has a market cap of $553.1 million; its shares were traded at around $17.24 with and P/S ratio of 0.6. MTH is in the portfolios of Steven Cohen of SAC Capital Advisors, Jim Simons of Renaissance Technologies LLC, Arnold Schneider of Schneider Capital Management, George Soros of Soros Fund Management LLC.
Highlight of Business Operations:Total home closing revenue was $291.4 million and $492.0 million for the three and six months ended June 30, 2010, respectively, increasing 32.2% and 9.0% from the same periods last year. We generated net income of $4.2 million and $6.8 million for the three- and six-month periods ended June 30, 2010 as compared to loss of $(73.6) and $(92.0) million for the same periods in 2009. The quarter-over-quarter improvement in home closing revenue reflects a 35.6% increase in closing units primarily due to the increased sales relating to the home-buyer tax credit and increased absorptions from our new communities, while the net income improvements both quarter- and year-to-date are the result of fewer real-estate-related impairments recorded, with only $304,000 (pre-tax) in the second quarter of 2010 as compared to $66.6 million in the same period in 2009 and $846,000 versus $77.1 million year-to-date 2010 and 2009, respectively. Our 2010 results also include $3.5 million of losses from early extinguishment of debt, while the three- and six-month periods ending June 30, 2009 include $6.6 million and $9.4 million of gains from early extinguishment of debt, respectively.
At June 30, 2010, our backlog of $292.6 million reflects a decrease of 23.4% or $89.6 million when compared to the backlog at June 30, 2009 and a $62.8 million or a 17.7% decrease from our March 31, 2010 balance of $355.4 million. We believe the decline is mainly due to the expiration of the federal homebuyer tax credit program, which negatively impacted sales volume in May and June and accelerated closings in the second quarter of 2010 to meet the initial closing deadline. Our sales were further impacted by a decrease of average actively selling communities by 14.7% for the quarter ended June 30, 2010 compared to June 30, 2009. In the second quarter of 2010, our cancellation rate on sales orders improved to 20.4% of gross orders as compared to 23.0% in the same period a year ago slightly below our historical rate of mid 20s.
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