Meritage homes 2008 first quarter results

This is taken from a press release by Meritage Homes Corporation:

FIRST QUARTER 2008 HIGHLIGHTS:
– Generated approximately $80M positive cash flow from operations
– Paid down debt by $80M, nearly eliminating outstanding bank debt
– 47% net debt-to-capital ratio; $377M available borrowing capacity at quarter-end
– Reduced inventory of unsold homes by 31% to 768 at quarter-end
– Reduced total lot supply to 24,591 lots, or 3.4 years supply, with 60% optioned
– Backlog increased 13% to 2,594 contracts, from 2,288 at year-end 2007

Despite a slowly recovering market, its not doom and gloom for some home builders despite the reported losses. This is a quote from the press release:

“We made significant progress on our objectives again this quarter, strengthening our balance sheet and improving our liquidity,” said Steven J. Hilton, chairman and CEO of Meritage Homes. “We generated significant positive cash flow, paid off nearly all of our bank debt, reduced our inventory of unsold homes, kept lot purchases below home starts and further reduced our total lot supply. We maintained compliance with all of our debt covenants, and believe we’ve demonstrated disciplined financial management with the tremendous strides we’ve made over the last nine months.”

Clearly Meritage Homes in the market for the long haul. They have several communities in Nevada, the most notable are located in the master planned community of Mountain’s Edge in Las Vegas and Inspirada in Henderson. The Yellowstone community with five neighborhoods and the smaller Summer Trail are still under construction in some areas.  However, Meritage Homes credits the Texas market for their numbers.

In addition to lowering their inventory across the country, Meritage Homes completed an offering of common stock on April 25th of approximately 4.3 million shares. The offering raised an additional $83 million (net commissions). It seems that potential new home buyers could do a lot worse than buying a  new home from Meritage homes. They look like they are planning on being around for a long, long time.

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