Meritage Homes Corp. (MTH, Financial) filed Quarterly Report for the period ended 2009-06-30.
Meritage Homes Corp. is one of the nation\'s largest single-family homebuilders. Meritage Homes Corp. has a market cap of $687.1 million; its shares were traded at around $21.93 with and P/S ratio of 0.4.
To appeal to our target customers in the first-time and first-time move-up demographic, we are also planning to temporarily increase our spec starts to ensure we have a sufficient supply of completed homes for buyers looking for an immediate move-in. Approximately half of our sales during the second quarter of 2009 were from spec sales, which contributed to the decline in our unsold inventory to $78.7 million, or 491 homes, at June 30, 2009, as compared to $158.4 million at December 31, 2008, comprised of 768 homes.
Total home closing revenue was $220.4 and $451.4 million for the three and six months ended June 30, 2009, respectively, decreasing 41.1% and 39.5% from the same periods last year. Net loss for the first quarter and first half of 2009 increased $50.1 and $23.2 million to a loss of $73.6 and $92.0 million. The quarter-over-quarter decline is primarily due to impairments, with $66.6 million (pre-tax) of real estate-related impairments recorded in the first quarter of 2009 as compared to $39.0 million in the same period of 2008. The second quarter impairments in 2009 are primarily comprised of a $55.4 million write-off related to the abandonment of our last significant optioned project. The project, a 1,200 lot parcel in North Phoenix, was no longer projected to generate profits sufficient to justify the additional investment needed to move forward with its purchase. The six-month net loss decline is primarily due to the $36.2 million tax benefit recorded during 2008. As we fully reserved our deferred tax assets in the third quarter of 2008, no tax benefits are reflected in our 2009 results, although we will be able to use our $162.1 million deferred tax asset to offset an estimated $450 million of future taxable income.
At June 30, 2009, our backlog of $382.3 million reflects a decrease of 47.7% or $349.2 million when compared to the backlog at June 30, 2008 but improved $43.1 million from our March 31, 2009 balance of $339.2 million due to our increased sequential sales, as previously discussed. The year-over-year decreases are due to the declines in demand, compounded by increased price concessions and incentives, as the average sales price in backlog decreased from $273,000 at June 30, 2008 to $240,000 at June 30, 2009. In the second quarter of 2009, our cancellation rate on sales orders improved to 23% of gross orders as compared to 29% in the same period a year ago.
Read the The complete ReportMTH is in the portfolios of Bill Miller of Legg Mason Value Trust, Charles Brandes of Brandes Investment.
Meritage Homes Corp. is one of the nation\'s largest single-family homebuilders. Meritage Homes Corp. has a market cap of $687.1 million; its shares were traded at around $21.93 with and P/S ratio of 0.4.
Highlight of Business Operations:
During the first half of 2009, we continued to focus on our goals to generate positive cash flow and strengthen our balance sheet. We have had positive cash flows from operations for the past seven quarters, including the collection of $107.7 million in income tax refunds in the first half of 2009, and we grew our cash balance to a Company record of $385.3 million at June 30, 2009. We believe this liquidity provides us with flexibility given the current difficult market conditions but also allows us to take advantage of unique opportunities to purchase deeply-discounted lots in select markets in which we have a short supply of buildable lots.To appeal to our target customers in the first-time and first-time move-up demographic, we are also planning to temporarily increase our spec starts to ensure we have a sufficient supply of completed homes for buyers looking for an immediate move-in. Approximately half of our sales during the second quarter of 2009 were from spec sales, which contributed to the decline in our unsold inventory to $78.7 million, or 491 homes, at June 30, 2009, as compared to $158.4 million at December 31, 2008, comprised of 768 homes.
Total home closing revenue was $220.4 and $451.4 million for the three and six months ended June 30, 2009, respectively, decreasing 41.1% and 39.5% from the same periods last year. Net loss for the first quarter and first half of 2009 increased $50.1 and $23.2 million to a loss of $73.6 and $92.0 million. The quarter-over-quarter decline is primarily due to impairments, with $66.6 million (pre-tax) of real estate-related impairments recorded in the first quarter of 2009 as compared to $39.0 million in the same period of 2008. The second quarter impairments in 2009 are primarily comprised of a $55.4 million write-off related to the abandonment of our last significant optioned project. The project, a 1,200 lot parcel in North Phoenix, was no longer projected to generate profits sufficient to justify the additional investment needed to move forward with its purchase. The six-month net loss decline is primarily due to the $36.2 million tax benefit recorded during 2008. As we fully reserved our deferred tax assets in the third quarter of 2008, no tax benefits are reflected in our 2009 results, although we will be able to use our $162.1 million deferred tax asset to offset an estimated $450 million of future taxable income.
At June 30, 2009, our backlog of $382.3 million reflects a decrease of 47.7% or $349.2 million when compared to the backlog at June 30, 2008 but improved $43.1 million from our March 31, 2009 balance of $339.2 million due to our increased sequential sales, as previously discussed. The year-over-year decreases are due to the declines in demand, compounded by increased price concessions and incentives, as the average sales price in backlog decreased from $273,000 at June 30, 2008 to $240,000 at June 30, 2009. In the second quarter of 2009, our cancellation rate on sales orders improved to 23% of gross orders as compared to 29% in the same period a year ago.
Read the The complete ReportMTH is in the portfolios of Bill Miller of Legg Mason Value Trust, Charles Brandes of Brandes Investment.
