Meritage Homes Reports Third Quarter 2010 Results

THIRD QUARTER 2010 SELECTED RESULTS (COMPARISONS TO THIRD QUARTER 2009):

• Generated positive pre-tax income despite lower closing volumes, as a result of margin improvements
• Average closing price increased 21%, resulting in 1% higher closing revenue on 16% fewer closings, with an average of 12% fewer actively selling communities
• Improved home closing gross margin to 18.2% from 10.0% in the prior year (18.5% vs 14.5%, excluding impairments)
• Opened 16 new communities for sales on recently acquired lots, including several state-of-the-art extreme energy-efficient communities in Arizona

YEAR TO DATE 2010 SELECTED RESULTS:

• Reported positive earnings for three consecutive quarters, with total net income of $8M for the first nine months of 2010, compared to a net loss of $110M for the first three quarters of 2009
• Reduced net debt/capital ratio to 27% from 35% in the prior year
• Issued $200M of 7.15% senior notes due in 2020 and retired $195M of notes due in 2014 and 2015

SCOTTSDALE, Ariz., Oct. 27, 2010 (GLOBE NEWSWIRE) -- Meritage Homes Corporation (NYSE:MTH), a leading U.S. homebuilder, today announced third quarter results for the period ended September 30, 2010.

Summary Operating Results (unaudited)
(Dollars in thousands, except per share amounts)
	Three Months Ended  September 30,			Nine Months Ended September 30,
	2010	2009	%Chg	2010	2009	%Chg
Homes closed (units)	848	1,015	-16%	2,863	2,837	1%
Home closing revenue	$ 233,803	$ 231,816	1%	$ 725,790	$ 683,208	6%
Sales orders (units)	706	1,098	-36%	2,670	3,232	-17%
Sales order value	$ 183,571	$ 254,347	-28%	$ 680,666	$ 749,963	-9%
Ending backlog (units)				902	1,676	-46%
Ending backlog value				$ 242,411	$ 404,786	-40%
Net income/(loss) – incl. impairments	$ 1,219	$ (17,785)	n/a	$ 8,045	$ (109,742)	n/a
Adjusted pre-tax income/(loss)* ---excl. impairments and (loss)/gain on early extinguishment of debt	1,523	(4,393)	n/a	12,995	(26,879)	n/a
Diluted EPS (including impairments)	$ 0.04	$ (0.56)	n/a	$ 0.25	$ (3.52)	n/a
* S ee non-GAAP reconciliations of net income/(loss) to adjusted pre-tax income/(loss) on "Operating Results" statement.

THIRD QUARTER HOME CLOSINGS, REVENUE AND INCOME

Meritage continued to be profitable for the third consecutive quarter of 2010, reporting net income of $1.2 million or $0.04 per diluted share, compared to a net loss of $17.8 million or $0.56 per share in 2009. The results included pre-tax charges for real estate-related impairments of $0.8 million in 2010, compared to $13.2 million of such impairments in 2009. Excluding the effects of impairments in both years, Meritage's pre-tax income for the quarter was $1.5 million in 2010, compared with a pre-tax loss of $4.4 million in 2009.