Homex First Quarter 2008 Results

Homex, Delivering Rock Solid Revenue Growth Again

CULIACAN, Mexico, April 23 /PRNewswire-FirstCall/ -- Desarrolladora Homex, S.A.B. de C.V. ("Homex" or "the Company") [NYSE: HXM, BMV: HOMEX] today announced results for the first quarter ended March 31, 2008(1).

New Mexican Accounting Reporting Standard for 2008:

Since companies in Mexico no longer follow inflation accounting (Bulletin B-10), 1Q08 figures are presented without inflation adjustment; while 1Q07 figures are presented with inflation adjustment through December 31, 2007. Therefore, the results of the two quarterly periods are not directly comparable.

Additionally, under the new accounting Bulletin D-6, the Company is now required to capitalize interest expense, that it previously expensed on a current basis.

Highlights
-- Total revenues in the 2008 first quarter increased 18.6% to
Ps.3.5 billion (US$325 million) from Ps.2.9 billion (US$274 million) in
the year-ago period.
-- Earnings before interest, taxes, depreciation and amortization (EBITDA)
adjusted for other income, during the quarter was Ps.840.2 million
(US$79 million), a 19.7% increase from the Ps.702.2 million
(US$66 million) reported in the first quarter of 2007.
-- Adjusted EBITDA margin increased 21 basis points to 24.1% in the first
quarter of 2008 from 23.9% adjusted EBITDA margin reported in the first
quarter of 2007.
-- Net income increased 7.9% in the first quarter of 2008 to
Ps.504.3 million (US$47 million) from Ps.467.2 million (US$44 million)
in the first quarter of 2007. Earnings per share for the recent period
were Ps.1.51 compared to Ps.1.39 in the comparable quarter of 2007.
-- Overall working capital cycle (inventory days plus account receivable
days minus payables) improved to 320 days in the first quarter of 2008
from the 331 days recorded in the first quarter of 2007.

"Homex started the year on the right foot by delivering solid 21.8% revenue growth in nominal terms, which demonstrates our company's leadership and ability to gain market share by replicating our business model across Mexico. Our strong financial performance also shows that the fundamentals in the mortgage industry in Mexico remain strong despite the turbulent times in the United States housing market," said Gerardo de Nicolas, Homex's Chief Executive Officer. "We remain confident that 2008 will be another great year for Homex, and that we will outpace industry revenue growth and gain additional operational efficiencies."

FINANCIAL AND OPERATING HIGHLIGHTS
(in thousands of pesos except per share data)

1Q'08 (a) 1Q'07 % Chg.
Volume (Homes) 10,651 9,761 9.1%
Revenues $3,481,367 $2,935,261 18.6%
Gross profit $1,095,393 $934,091 17.3%
Operating income $702,363 $641,919 9.4%
Net Interest Expense $27,487 $80,887 -66.0%
Net Income $504,326 $467,249 7.9%
EBITDA (b) $845,040 $855,540 -1.2%
Adjusted EBITDA (c) $840,271 $702,259 19.7%
Gross Margin 31.5% 31.8%
Operating Margin 20.2% 21.9%
EBITDA Margin 24.3% 29.1%
Adjusted EBITDA margin (c) 24.1% 23.9%
Earnings per share 1.51 1.39
Earnings per ADR presented in US (d) 0.84 0.78
Weighted avge. shares outstanding
(MM) 334.9 335.9
Accounts receivable (as a % of
sales) 47.0% 39.5%
Accounts receivable (days) period- end 169 142
Inventory turnover (days) period- end 368 383
Inventory (w/o land) turnover
(days) period-end 98 80

(a) As a result of the elimination of inflation accounting in Mexico
effective December 31, 2007, the results of the first quarter of 2007 and
2008 are not directly comparable.
(b) EBITDA is defined as net income plus depreciation and amortization,
net comprehensive financing cost, income tax expense, employee statutory
profit sharing expense and capitalized interest. Please see Financial
Results / EBITDA that includes a table that sets forth a reconciliation
of net income to EBITDA for the first quarter 2008 and 2007.
(c) Adjusted EBITDA; EBITDA without other income
(d) US$ values estimated using an exchange rate Ps.10.70 per US$1.00.
Common share/ADR ratio: 6:1

Detailed Financial Reports

The Company produces a detailed earnings report that provides information regarding Operating and Financial results. This detailed information is considered part of this earnings announcement and is available in full with this earnings release via the Company's website at http://www.homex.com.mx/ri/index.htm, through email distribution or the Company's filings with the SEC and the CNBV.

About Homex

Desarrolladora Homex, S.A.B. de C.V. [NYSE: HXM, BMV: HOMEX] is a leading, vertically integrated home-development company focused on affordable entry- level and middle-income housing in Mexico. It is one of the most geographically diverse homebuilders in the country. Homex has a leading position in the top four markets in Mexico and is the largest homebuilder in Mexico, based on the number of homes sold, revenues and net income.

For additional corporate information, please visit the Company's web site at: http://www.homex.com.mx/

Desarrolladora Homex, S.A.B. de C.V. quarterly reports and all other written materials may from time to time contain statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors can cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors include economic and political conditions and government policies in Mexico or elsewhere, including changes in housing and mortgage policies, inflation rates, exchange rates, regulatory developments, customer demand and competition. For those statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Discussion of factors that may affect future results is contained in our filings with the Securities and Exchange Commission.

Attached are the unaudited Consolidated Financial Information Data of Desarrolladora Homex, S.A.B. de C.V. for the three-month ended March 31, 2008 and 2007, the Consolidated Statement of Changes in Financial Position for the three-month period ended March 31, 2008 and 2007, and the Consolidated Balance Sheet of Desarrolladora Homex, S.A.B. de C.V.

(1) Unless otherwise noted, all monetary figures are presented in Mexican pesos and in accordance with recently applicable Mexican Financial Reporting Standards (MFRS): "NIF B-10" First Quarter 2008 figures are presented without inflation adjustment; while First Quarter 2007 figures are presented with inflation adjustment through December 31, 2007. The symbols "Ps." and "$" refer to Mexican pesos and "US$" refers to U.S. dollars. U.S. dollar figures are presented only for the convenience of the reader and estimated using an exchange rate Ps.10.70 per US$1.00. First quarter 2008 financial information is unaudited and is subject to adjustment.

HOMEX FIRST QUARTER 2008 RESULTS CONFERENCE CALL

DATE: Thursday, April 24, 2008

TIME: 9:00 AM Central Time (Mexico City)
10:00 AM Eastern Time (New York)

HOSTS: Gerardo de Nicolas, Chief Executive Officer
Alan Castellanos, Vice President of Finance and Planning and
Chief Financial Officer
Carlos J. Moctezuma, Investor Relations Officer

DIAL-IN: International: 913-312-0723
U.S.: 888-656-7429
Passcode: 5542105
Please call 10 minutes prior to start time and request the
Homex call

WEBCAST: http://www.homex.com.mx/ri/index.htm

REPLAY: 719-457-0820, available one hour after the call ends or via
webcast at http://www.homex.com.mx/ri/index.htm

DESARROLLADORA HOMEX CONSOLIDATED BALANCE SHEET COMPARISON OF
MARCH 31, 2008 WITH MARCH 31, 2007
(in thousands of pesos)
Change
Mar-08 Mar-07 08 / 07
ASSETS
CURRENT ASSETS
Cash and cash equivalents 2,366,818 9.5% 1,847,040 9.5% 28.1%
Accounts receivable, net 7,888,899 31.7% 5,332,052 27.4% 48.0%
Inventories 11,858,733 47.7% 9,795,524 50.3% 21.1%
Other current assets 321,218 1.3% 290,076 1.5% 10.7%
Total current
assets 22,435,668 90.2% 17,264,692 88.6% 30.0%

Property and equipment,
net 1,159,692 4.7% 746,756 3.8% 55.3%
Goodwill 732,545 2.9% 732,545 3.8% 0.0%
Other assets 549,109 2.2% 744,930 3.8% -26.3%
TOTAL 24,877,014 100.0% 19,488,923 100.0% 27.6%

LIABILITIES AND
STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable to financial
institutions 6,697 0.0% - 0.0% - Accounts payable 6,981,787 28.1% 4,957,382 25.4% 40.8%
Advances from customers 283,899 1.1% 307,025 1.6% -7.5%
Taxes payable 143,128 0.6% 180,485 0.9% -20.7%
Total current
liabilities 7,415,511 5,444,892 36.2%

Long-term notes payable to
financial institutions 3,965,445 15.9% 3,622,484 18.6% 9.5%
Labor Obligations 85,592 0.3% 52,376 0.3% 63.4%
DEFERRED INCOME TAXES 3,042,107 12.2% 2,365,065 12.1% 28.6%
Total liabilities 14,508,655 58.3% 11,484,817 58.9% 26.3%
STOCKHOLDERS' EQUITY
Common stock 528,009 2.1% 528,504 2.7% -0.1%
Additional paid-in capital 3,180,883 12.8% 3,283,784 16.8% -3.1%
Retained earnings 6,243,350 25.1% 3,916,538 20.1% 59.4%
Excess in restated
stockholders' equity 344,915 1.4% 344,971 1.8% 0.0%
Cumulative initial effect
of deferred income taxes -162,405 -0.7% -157,975 -0.8% 2.8%
Majority
Stockholders'
Equity 10,134,752 40.7% 7,915,822 40.6% 28.0%

Minority interest 233,607 0.9% 88,285 0.5% 164.6%
TOTAL
STOCKHOLDERS'
EQUITY 10,368,359 41.7% 8,004,107 41.1% 29.5%

TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY 24,877,014 100.0% 19,488,923 100.0% 27.6%

DESARROLLADORA HOMEX CONSOLIDATED INCOME STATEMENT COMPARISON OF FIRST
QUARTER 2008 WITH FIRST QUARTER 2007
(in thousands of pesos)
Change
1Q'08 1Q'07 08 / 07
REVENUES
Affordable-entry level
revenue 2,678,057 76.9% 2,227,026 75.9% 20.3%
Middle income housing
revenue 777,360 22.3% 667,418 22.7% 16.5%
Other revenues 25,950 0.7% 40,817 1.4% -36.4%
TOTAL REVENUES 3,481,367 100.0% 2,935,261 100.0% 18.6%
TOTAL COSTS 2,385,974 68.5% 2,001,171 68.2% 19.2%

GROSS PROFIT 1,095,393 31.5% 934,091 31.8% 17.3%
SELLING AND ADMINISTRATIVE
EXPENSES
Selling and Administrative
Expenses 370,267 10.6% 268,679 9.2% 37.8%
Beta Trademark
Amortization 22,763 0.7% 23,492 0.8% -3.1%
TOTAL SELLING AND
ADMINISTRATIVE EXPENSES 393,030 11.3% 292,171 10.0% 34.5%

OPERATING INCOME 702,363 20.2% 641,919 21.9% 9.4%
OTHER INCOME AND EXPENSES 4,769 0.1% 153,281 5.2% -96.9%
NET COMPREHENSIVE FINANCING
COST
Interest expense and
commissions 63,292 1.8% 120,020 4.1% -47.3%
Interest income -35,805 -1.0% -39,134 -1.3% -8.5%
Foreign exchange (gain)
loss -45,395 -1.3% 3,373 0.1% - Monetary position loss - 0.0% 37,149 1.3% - -17,908 -0.5% 121,408 4.1% - INCOME BEFORE INCOME TAX AND
EMPLOYEE STATUTORY PROFIT
SHARING EXPENSE 725,040 20.8% 673,792 23.0% 7.6%

INCOME TAX EXPENSE 200,212 5.8% 202,634 6.9% -1.2%
NET INCOME 524,828 15.1% 471,158 16.1% 11.4%
MAJORITY INTEREST 504,326 14.5% 467,249 15.9% 7.9%
MINORITY INTEREST 20,502 0.6% 3,909 0.1% - NET INCOME 504,326 14.5% 467,249 15.9% 7.9%
Earnings per share 1.51 0.0% 1.39 0.0% 8.3%

EBITDA 845,040 24.3% 855,540 29.1% -1.2%
Adjusted EBITDA 840,271 24.1% 702,259 23.9% 19.7%

Consolidated Statement of Changes in Financial Position
For the three months ended March 31, 2008 and 2007
(in thousands of pesos)

1Q08 1Q07
Net income 504,326 467,249
Non Cash items:
Depreciation 70,340 36,846
Minority Interest 20,502 3,952
Amortization of
Intangibles 22,753 23,492
Labor obligations
Deferred income
taxes 200,212 202,634
818,133 734,174
(Increase)
decrease in:
Trade accounts
receivable (170,505) (106,878)
Inventories
(w/land) (375,620) 54,996
Trade accounts
payable (222,189) (638,344)
Other A&L, net (1) (148,078) (292,915)
Changes in operating
assets and
liabilities (916,392) (983,141)
Operating Cash Flow (98,258) (248,967)

Capex (74,303) (113,883)

Free Cash Flow (172,561) (362,850)
Net Financing
Activities 176,455 (5,184)
Net increase
(decrease) cash and
restricted cash 3,894 (391,526)
Balance at
beginning 2,362,924 2,238,567

Balance at end 2,366,818 1,847,040

(1) Includes adjustment of goodwill and others.

Investor Contacts:
investor.relations@homex.com.mx

Carlos J. Moctezuma
Head of Investor Relations
+5266-7758-5838
cmoctezuma@homex.com.mx

First Call Analyst:
FCMN Contact:

Source: Desarrolladora Homex, S.A.B. de C.V.

CONTACT: Investors, investor.relations@homex.com.mx, or Carlos J.
Moctezuma, Head of Investor Relations, Desarrolladora Homex,
+011-5266-7758-5838, cmoctezuma@homex.com.mx

Web site: http://www.homex.com.mx/

2008-04-23 18:27:25 0343795 PRNEWSWIRE