Meritage Homes lost $45 million in 2008’s first quarter, but the Scottsdale, Ariz.-based public builder has also made "significant progress" in strengthening its balance sheet, according to earnings information released today and yesterday by the company.

Those moves include reducing Meritage’s unsold inventory by 31 percent, raising $83 million through a recent stock offering, and dramatically lowering its debt from $252 million in 2007’s second quarter to $2 million in 2008’s first quarter. “We have paid off nearly all of our bank debt,” said CEO Steven Hilton during today’s earnings conference call with analysts.

The company also generated $80 million in positive cash flow from operations, closing 1,328 homes for $372 million in revenue last quarter. Compared to last year, that represents a 26 percent drop in closings and a 35 percent slide in revenue.

Meritage executives say they are responding appropriately to reduced demand. The company purchased approximately 900 lots last quarter through option contracts and started 1,135 new homes.

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Alison Rice is a contributing editor to Builder Online.

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