Mr. Mon: Technical Olympic USA (TECHNICAL OLYMPIC USA) is the result of the June 2002 merger of two homebuilders with common ownership. Technical Olympic SA, through a US subsidiary, acquired 80% of Newmark Homes Corp. based in Houston, Texas, in 1999 and 100% of Engle Homes, Inc., based in Boca Raton, Florida, in 2000. Both were formerly NASDAQ-listed companies. As a result of the merger that created TECHNICAL OLYMPIC USA, Technical Olympic SA controls 92% of the stock of TECHNICAL OLYMPIC USA, and 8% is traded on NASDAQ which is primarily owned by institutions. We are a large multi-regional builder. We're a major builder in Florida, where we operate in all of the major markets. In Southeast Florida, we operate from Dade County north to Vero Beach; on the West Coast of Florida, we operate in Naples and Fort Myers; we are probably the largest builder in terms of revenues in Orlando; and we became the third-largest builder in Jacksonville last month through the acquisition of D.S. Ware Homes. In addition, we operate in Northern Virginia in the suburbs around Washington, DC. Additionally, we recently announced the acquisition of Masonry Homes in Maryland to basically flesh out our position in the growing Baltimore/Washington marketplace. We also have a presence in Nashville, Tennesee. In the West, we are a major builder in Texas. We're in Houston, Dallas, San Antonio and Austin ' the result of our heritage from Newmark Homes, which had been based in Houston and has been a major factor in the Texas building marketplace for many years. In addition, we also build homes in Phoenix, Arizona, and in Colorado. We also operate a mortgage company and a title agency, which provides title insurance to homebuyers. On an order-of-magnitude basis, in the last 12 months we generated revenues of about 1.4 billion (excluding the recent acquisitions, obviously) and we sold over 5,000 homes. We were ranked the 12th largest builder in the country in terms of both revenues and closings, according to Builder magazine. Now, those rankings change depending on mergers and the like, and we are not particularly caught up in our specific ranking, but it shows that we are clearly one of the larger players. We are focused on becoming a major player in each market that we choose to be in, and also having sufficient aggregate size to finance our business in the capital markets effectively. Our strategy is designed for growth and greater geographic diversification. There are four elements to our strategy. First, we would like to grow in our current regions, hence the acquisition of D.S. Ware in Jacksonville last month and Masonry Homes in Baltimore this month. We believe we have attractive opportunities to grow in our current markets, both organically and through bolt-on type acquisitions, as we have previously stated, within our existing regions. Our focus remains in our core markets of Florida, Texas, the mid-Atlantic and the Western region. The second part of our strategy is to get a lot better at what we do. We've just merged, so we have meaningful opportunities to identify and transfer best practices across our previously independent companies. We have implemented a series of initiatives that we have termed our 'Performance Improvement Program.' These initiatives include supply-chain management and aggregating our purchasing power, transferring ideas on improved product pricing, updating our technology, reducing our cycle-times and process improvements, among others. We believe that we'll be able to improve our results pretty dramatically in the next several years as a result of these efforts. The third part of our strategy is to grow our financial services businesses. As I indicated earlier, we have a mortgage company and a title service business ' both profitable operations that complement the homebuilding business nicely. We'll be able to grow them just by keeping up with the growth of the operating units. The last part of the strategy is to selectively enter new markets. Our current focus is within specific markets in the mid-Atlantic and Western regions, and we are investigating a number of opportunities. That is, in a nutshell, our business. We believe we have the potential to double the size of our business in the next few years. We're excited about that, and we think it can be accomplished if we stay focused. We're based in Hollywood, Florida. We have about 1,300 associates currently. We operate on a decentralized basis, supported by a very strong set of financial controls. We like to look at our division Presidents as being local people running local businesses. We don't like to push our operators into a box. We are flexible and allow them latitude to adapt to the local market conditions rather than mandating a product that is not developed locally or setting specific pricing. We do, however, approve every single land and lot commitment at corporate. This practice, I believe, creates good discipline and keeps us focused on our current local markets.
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