[MERITAGE CORPORATION LOGO]
[PRESS RELEASE GRAPHIC]
Contacts: ARIZONA: TEXAS: NEW YORK:
Larry Seay Jane Hays Chris Tofalli
CFO & Vice President-Finance Vice President-Corp. Broadgate Consultants
(480) 609-3330 Develop. (212) 232-2222
(972) 612-8085
MERITAGE CORPORATION
COMPLETES ADD-ON OFFERING OF SENIOR NOTES
DALLAS AND SCOTTSDALE, ARIZONA (FEBRUARY 25, 2003) - MERITAGE CORPORATION
(NYSE: MTH) today announced that it completed on February 21, 2003 an add-on
offering of $50 million in aggregate principal amount of its 9.75% senior notes
due June 1, 2011. The notes were issued at a price of 103.25% of their face
amount to yield 9.054%. The Company intends to use the net proceeds from the
offering for general corporate purposes, which will include the paydown of the
Company's senior credit facility. These notes were issued under an add-on
provision of the indenture that governs the 9.75% senior notes due 2011 issued
by Meritage on May 31, 2001. Collectively, they constitute a single series of
notes with those notes, bringing the aggregate principal amount outstanding of
the 9.75% senior notes due 2011 to $205 million. In connection with the
offering, the Company has agreed to file an exchange offer registration
statement under the Securities Act of 1933, as amended (the "Securities Act"),
in order to exchange the unregistered notes for substantially identical
registered notes. Following the exchange offer, the notes issued on February 21,
2003 will be identical to and trade with the 9.75% senior notes due 2011 issued
by Meritage on May 30, 2001.
The notes have been issued only to qualified institutional buyers in the
United States under Rule 144A under the Securities Act and certain investors
outside of the United States under Regulation S under the Securities Act. The
issuance of the notes has not been registered under the Securities Act or any
state securities laws and the notes may not be offered or sold in the United
States absent registration or an applicable exemption from the registration
requirements of the Securities Act and applicable state
securities laws. This press release does not constitute an offer to sell or the
solicitation of an offer to buy the notes or any other securities.
ABOUT MERITAGE CORPORATION
Meritage Corporation designs, builds and sells distinctive single-family
homes ranging from entry-level to semi-custom luxury. Meritage operates in the
Phoenix and Tucson, Arizona markets under the Monterey Homes, Hancock
Communities and Meritage Homes brand names, in the Dallas/Ft. Worth, Austin and
Houston, Texas markets as Legacy Homes and Hammonds Homes, and in the East San
Francisco Bay and Sacramento, California markets as Meritage Homes. In addition,
Meritage is now active in the Las Vegas, Nevada market. The Meritage web site is
located at: www.meritagehomes.com.
This press release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Such statements include
statements concerning future Company actions and their expected results. Such
statements are based upon the current beliefs and expectations of our management
and are subject to significant risks and uncertainties. Actual results may
differ from those set forth in the forward-looking statements.
With respect to the sale of the senior notes, these risks and
uncertainties include: our level of indebtedness, which has increased upon
closing of the offering; the senior notes are unsecured and are effectively
subordinated to our secured indebtedness; the indenture for the senior notes
imposes significant operating and financial restrictions on us, which may
prevent us for capitalizing on business opportunities and taking some corporate
actions; and there are restrictions on transfers of the notes.
In addition, our business is subject to a number of risks and
uncertainties including: the strength and competitive pricing environment of the
single-family housing market; changes in the availability and pricing of
residential mortgages; changes in the availability and pricing of real estate in
the markets in which we operate; consumer confidence, which can be impacted by
economic and other factors, such as terrorism, war, or threats thereof and
changes in the stock markets; demand for and acceptance of our homes; our
ability to continue to acquire additional land or options to acquire additional
land on acceptable terms; the success of planned marketing and promotional
campaigns; our ability to expand pre-tax margins; the success of our program to
integrate existing operations with our planned new operations or those of past
or future acquisitions; our ability to raise additional capital when and if
needed; our success in locating and negotiating favorably with possible
acquisition candidates; recent legislative or other initiatives that seek to
restrain growth in new housing construction or similar measures; the economic
impact of foreign hostilities or military action; general economic slow downs;
and other factors identified in documents filed by us with the Securities and
Exchange Commission, including those set forth in our Form 10-K Report for the
year ended December 31, 2001 under the captions "Market for the Registrant's
Common Stock and Related Stockholder Matters - Factors That May Affect Future
Stock Performance" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Factors That May Affect Our Future Results
and Financial Condition" and in Exhibit 99.4 of our Form 10-Q for the quarter
ended September 30, 2002. As a result of these and other factors, the Company's
stock and note prices may fluctuate dramatically.