Record 2nd Qtr EPS Increases 126% to $2.01 Per Share
Record 2nd Qtr Contracts Grow 38% to $2.20 Billion
Record 2nd Qtr Revenues Rise 52% to $1.25 Billion
Record 2nd Qtr-End Backlog Increases 57% to $5.87 Billion
HORSHAM, Pa., May 26, 2005 (PRIMEZONE) -- Toll Brothers, Inc., (NYSE:TOL) (www.tollbrothers.com), the nation's leading builder of luxury homes, today reported record second-quarter and six-month results for earnings, contracts, revenues and backlog for the period ended April 30, 2005. The value of the company's second-quarter contracts and backlog were the highest for any quarter in its history.
Robert I. Toll, chairman and chief executive officer, stated: "We owe our excellent results to the tremendous perseverance and intensity of our associates. No one in our industry has a harder working, more dedicated team!
"With increasing numbers of communities in lot-constrained markets, our growing brand name and our broadening diversity of luxury new home product lines, we continue to produce record results.
"We expect to end fiscal 2005 with approximately 240 selling communities compared to 220 at FYE 2004. We believe our expertise in securing land and opening communities in highly-regulated, upscale markets gives us a competitive advantage, both today and in the future. We now control approximately 68,000 home sites, compared to 58,000 one year ago. These sites, which are in communities currently open for sale or wending their way through the approval process, represent a five-to-six year supply based on our historic pace of growth."
Joel H. Rassman, chief financial officer, stated: "Our record earnings, contracts and backlog reflect the strong demand and accompanying pricing power we have enjoyed over the past twelve months. Based on these results and our record $5.87 billion backlog of homes under contract, we are increasing our earnings expectations for FY 2005. We now believe net income will grow approximately 70% in FY 2005 compared to FY 2004. Based on our backlog and expected community growth, even with this increased projection, we still believe net income will rise approximately 20% in FY 2006 over FY 2005."
Toll Brothers' financial highlights for the three-month and six-month periods ended April 30, 2005 (unaudited):
-- The Company's FY 2005 second-quarter net income of $170.1
million grew 135% versus FY 2004 second-quarter net income
of $72.4 million. Second-quarter earnings of $2.01 per share
diluted increased 126% compared to second-quarter 2004's
earnings of $0.89 per share diluted, the previous second-quarter
record.
-- FY 2005 six-month net income of $280.3 million grew 129%
versus FY 2004 six-month net income of $122.5 million. Six-month
earnings of $3.34 per share diluted rose 121% versus FY 2004's
same period earnings of $1.51 per share diluted.
-- FY 2005 second-quarter contracts of $2.20 billion (3,181
homes), grew 38% over FY 2004's second-quarter contracts of
$1.60 billion (2,595 homes), the previous second-quarter
record. In addition, in second quarter 2005, unconsolidated
entities in which the Company had an interest signed contracts
of $85.2 million (123 homes).
-- FY 2005's six-month contracts of $3.65 billion (5,354 homes),
grew 46% over FY 2004's total of $2.50 billion (4,107 homes),
the previous six-month record. In addition, in the six-month FY
2005 period, unconsolidated entities in which the Company had an
interest signed contracts of $100.7 million (159 homes).
-- FY 2005 second quarter-end backlog of $5.87 billion (8,561
homes), the highest in the Company's history, increased 57% over
FY 2004's second-quarter-end backlog of $3.73 billion (6,211
homes), the previous second-quarter record. In addition, at the
end of second quarter 2005, unconsolidated entities in which the
Company had an interest had a backlog of $111.7 million (183
homes).
-- FY 2005 second-quarter revenues of $1.25 billion increased 52%
versus FY 2004's second-quarter revenues of $819.5 million. In FY
2005, second-quarter home building revenues of $1.23 billion
(1,912 homes), increased 51% over FY 2004's second-quarter home
building revenues of $814.3 million (1,463 homes), the previous
second-quarter record. Revenues from land sales totaled $9.8
million for FY 2005's second quarter, compared to $2.0 million
in the second quarter of FY 2004.
-- FY 2005 six-month revenues of $2.25 billion increased 59% versus
FY 2004's six-month revenues of $1.42 billion, the previous six-
month record. FY 2005 six-month home building revenues of $2.22
billion (3,502 homes) increased 58% over FY 2004's six-month home
building revenues of $1.40 billion (2,548 homes), the previous
six-month record. FY 2005 revenues from land sales for the six-
month period totaled $11.0 million compared to $8.0 million in
the same period in FY 2004.
-- In addition, in the Company's fiscal 2005 second-quarter and
six-month periods, unconsolidated entities in which the Company
had an interest delivered $38.4 million (87 homes) and $64.9
million (150 homes), respectively, compared to $1.9 million (6
homes) and $3.4 million (11 homes), respectively, in the same
periods of fiscal 2004. The Company's share of the profits from
the delivery of these homes is included in 'Equity Earnings in
Unconsolidated Entities' on the Company's Income Statement.
-- Toll Brothers' second quarter and six-month 2004 results
included a $0.06 per share after-tax expense due to early
retirement of $170 million of 8 1/8% senior subordinated notes
due 2009. No such comparable charge was incurred in the second-
quarter or six-month periods in FY 2005.
-- In Toll Brothers' third quarter 2005, the Company anticipates
it will incur an after-tax expense of approximately $0.03 per
share diluted related to the expected early retirement of all of
its $100 million of 8% Senior Subordinated Notes due 2009 and its
$222.5 million bank term loan due July 2005.
Toll Brothers will be broadcasting live via the Investor Relations section of its website, www.tollbrothers.com, a conference call hosted by chairman and chief executive officer Robert I. Toll at 2:00 p.m. (EDT) today, May 26, 2005, to discuss these results and our outlook for the remainder of fiscal 2005. Prior to this conference call, the company intends to file a Form 8-K with the Securities and Exchange Commission containing its guidance for expected results of operations for Fiscal 2005 which will be discussed on the call. To access the call, enter the Toll Brothers website, then click on the Investor Relations page, and select "Conference Calls". Participants are encouraged to log on at least fifteen minutes prior to the start of the presentation to register and download any necessary software. The call can be heard live with an on-line replay which will follow and continue through July 31, 2005.
Toll Brothers, Inc. is the nation's leading builder of luxury homes. The Company began business in 1967 and became a public company in 1986. Its common stock is listed on the New York Stock Exchange and the Pacific Exchange under the symbol "TOL". The Company serves move-up, empty-nester, active-adult and second-home home buyers and operates in 20 states: Arizona, California, Colorado, Connecticut, Delaware, Florida, Illinois, Massachusetts, Maryland, Michigan, Nevada, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Texas, and Virginia.
Toll Brothers builds luxury single-family detached and attached home communities, master planned luxury residential resort-style golf communities and urban low, mid- and high-rise communities, principally on land it develops and improves. The Company operates its own architectural, engineering, mortgage, title, land development and land sale, golf course development and management, home security, landscape, cable T.V. and broadband Internet delivery subsidiaries. The Company also operates its own lumber distribution, and house component assembly and manufacturing operations.
Toll Brothers is the only publicly traded national home building company to have won all three of the industry's highest honors: America's Best Builder from the National Association of Home Builders, the National Housing Quality Award and Builder of the Year. For more information visit www.tollbrothers.com.
Certain information included herein and in other Company reports, SEC filings, statements and presentations is forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements concerning anticipated operating results, financial resources, changes in revenues, changes in profitability, interest expense, growth and expansion, anticipated income from joint ventures and the Toll Brothers Realty Trusts Group, the ability to acquire land, the ability to secure governmental approvals and the ability to open new communities, the ability to sell homes and properties, the ability to deliver homes from backlog, the average delivered price of homes, the ability to secure materials and subcontractors, the ability to maintain the liquidity and capital necessary to expand and take advantage of future opportunities, and stock market valuations. Such forward-looking information involves important risks and uncertainties that could significantly affect actual results and cause them to differ materially from expectations expressed herein and in other Company reports, SEC filings, statements and presentations. These risks and uncertainties include local, regional and national economic conditions, the demand for homes, domestic and international political events, uncertainties created by terrorist attacks, the effects of governmental regulation, the competitive environment in which the Company operates, fluctuations in interest rates, changes in home prices, the availability and cost of land for future growth, the availability of capital, uncertainties and fluctuations in capital and securities markets, changes in tax laws and their interpretation, legal proceedings, the availability of adequate insurance at reasonable cost, the ability of customers to finance the purchase of homes, the availability and cost of labor and materials, and weather conditions.
TOLL BROTHERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
April 30, October 31,
2005 2004
----------- -----------
ASSETS (Unaudited)
Cash and cash
equivalents $ 566,668 $ 465,834
Marketable securities 115,029
Inventory 4,299,587 3,878,260
Property, construction
and office equipment,
net 63,649 52,429
Receivables, prepaid
expenses and other
assets 152,009 146,212
Mortgage loans
receivable 78,663 99,914
Customer deposits held
in escrow 76,681 53,929
Investments in and
advances to
unconsolidated
entities 114,196 93,971
----------- -----------
$ 5,351,453 $ 4,905,578
=========== ===========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Liabilities:
Loans payable $ 358,922 $ 340,380
Senior notes 845,914 845,665
Subordinated notes 450,000 450,000
Mortgage company
warehouse loan 69,108 92,053
Customer deposits 389,265 291,424
Accounts payable 202,918 181,972
Accrued expenses 611,340 574,202
Income taxes payable 147,964 209,895
----------- -----------
Total liabilities $ 3,075,431 $ 2,985,591
----------- -----------
Stockholders' equity:
Preferred stock, none
issued
Common stock 776 770
Additional paid-in
capital 251,646 200,938
Retained earnings 2,051,056 1,770,730
Unearned compensation (834)
Treasury stock (26,622) (52,451)
----------- -----------
Total stockholders'
equity 2,276,022 1,919,987
----------- -----------
$ 5,351,453 $ 4,905,578
=========== ===========
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share data)
(Unaudited)
Six months ended Three months ended
April 30, April 30,
----------------------- -----------------------
2005 2004 2005 2004
---------- ---------- ---------- ----------
Revenues:
Home sales $2,215,095 $1,403,886 $1,225,998 $ 814,309
Land sales 11,025 7,998 9,800 2,011
Equity earnings
in
unconsolidated
entities 5,308 1,394 3,373 729
Interest and
other 15,992 4,119 9,109 2,436
---------- ---------- ---------- ----------
2,247,420 1,417,397 1,248,280 819,485
---------- ---------- ---------- ----------
Costs and
expenses:
Home sales 1,516,142 1,007,051 830,649 584,623
Land sales 6,095 6,806 5,316 1,503
Selling, general
and
administrative 223,423 166,547 116,358 89,894
Interest 49,938 35,754 28,126 21,196
Expenses related
to early
retirement of
debt 7,748 7,748
---------- ---------- ---------- ----------
1,795,598 1,223,906 980,449 704,964
---------- ---------- ---------- ----------
Income before
income taxes 451,822 193,491 267,831 114,521
Income taxes 171,496 70,969 97,698 42,083
---------- ---------- ---------- ----------
Net income $ 280,326 $ 122,522 $ 170,133 $ 72,438
========== ========== ========== ==========
Earnings per
share:
Basic $ 3.66 $ 1.65 $ 2.20 $ 0.97
Diluted $ 3.34 $ 1.51 $ 2.01 $ 0.89
Weighted average
number of shares:
Basic 76,570 74,123 77,313 74,406
Diluted 83,859 81,123 84,676 81,426
Additional
information:
Interest incurred $ 58,148 $ 56,505 $ 28,998 $ 28,265
Depreciation and
amortization $ 10,879 $ 7,336 $ 5,678 $ 3,773
THREE MONTHS ENDED APRIL 30, UNITS $ (MILL)
2nd Qtr. 2nd Qtr. 2nd Qtr. 2nd Qtr.
CLOSINGS 2005 2004 2005 2004
--------------------- ------- ------- ------- -------
Northeast
(CT, MA, NH, NJ, NY,
RI) 254 216 140.3 124.8
Mid-Atlantic (DE, MD,
PA, VA) 759 534 458.7 274.1
Midwest (IL, MI, OH) 141 99 89.1 58.6
Southeast (FL, NC,
SC, TN) 197 192 105.4 91.5
Southwest (AZ, CO,
NV, TX) 305 190 188.9 107.4
West Coast (CA) 256 232 243.6 157.9
------- ------- ------- -------
1,912 1,463 1,226.0 814.3
Unconsolidated
entities 87 6 38.4 1.9
------- ------- ------- -------
1,999 1,469 1,264.4 816.2
======= ======= ======= =======
CONTRACTS
---------------------
Northeast
(CT, MA, NH, NJ, NY,
RI) 495 282 318.8 162.5
Mid-Atlantic (DE, MD,
PA, VA) 1,177 911 784.1 515.8
Midwest (IL, MI, OH) 212 187 144.4 112.3
Southeast (FL, NC,
SC, TN) 463 268 262.3 131.3
Southwest (AZ, CO,
NV, TX) 579 425 403.5 248.3
West Coast (CA) 255 522 291.4 429.8
------- ------- ------- -------
3,181 2,595 2,204.5 1,600.0
Unconsolidated
entities 123 5 85.2 1.6
------- ------- ------- -------
3,304 2,600 2,289.7 1,601.6
======= ======= ======= =======
BACKLOG
---------------------
Northeast
(CT, MA, NH, NJ, NY,
RI) 1,359 1,037 855.4 590.4
Mid-Atlantic (DE, MD,
PA, VA) 2,767 2,173 1,782.3 1,161.2
Midwest (IL, MI, OH) 534 430 360.6 247.7
Southeast (FL, NC,
SC, TN) 1,218 540 741.4 289.9
Southwest (AZ, CO,
NV, TX) 1,743 1,028 1,162.7 599.5
West Coast (CA) 940 1,003 964.0 842.2
------- ------- ------- -------
8,561 6,211 5,866.4 3,730.9
Unconsolidated
entities 183 14 111.7 4.5
------- ------- ------- -------
8,744 6,225 5,978.1 3,735.4
======= ======= ======= =======
SIX MONTHS ENDED APRIL 30, UNITS $ (MILL)
6 Months 6 Months 6 Months 6 Months
CLOSINGS 2005 2004 2005 2004
--------------------- ------- ------- ------- -------
Northeast
(CT, MA, NH, NJ, NY,
RI) 483 399 263.6 229.4
Mid-Atlantic (DE, MD,
PA, VA) 1,422 939 845.6 475.5
Midwest (IL, MI, OH) 236 171 146.1 99.6
Southeast (FL, NC,
SC, TN) 352 313 189.7 145.1
Southwest (AZ, CO,
NV, TX) 553 339 344.8 189.2
West Coast (CA) 456 387 425.3 265.1
------- ------- ------- -------
3,502 2,548 2,215.1 1,403.9
Unconsolidated
entities 150 11 64.9 3.4
3,652 2,559 2,280.0 1,407.3
======= ======= ======= =======
CONTRACTS
---------------------
Northeast
(CT, MA, NH, NJ, NY,
RI) 814 504 519.5 300.3
Mid-Atlantic (DE, MD,
PA, VA) 1,944 1,438 1,255.5 799.6
Midwest (IL, MI, OH) 324 307 222.4 184.0
Southeast (FL, NC,
SC, TN) 844 442 467.7 216.8
Southwest (AZ, CO,
NV, TX) 945 658 657.8 391.8
West Coast (CA) 483 758 524.7 610.3
------- ------- ------- -------
5,354 4,107 3,647.6 2,502.8
Unconsolidated
entities 159 10 100.7 3.2
------- ------- ------- -------
5,513 4,117 3,748.3 2,506.0
======= ======= ======= =======
CONTACT: Toll Brothers, Inc.
Frederick N. Cooper
(215) 938-8312
[email protected]
Joseph R. Sicree
(215) 938-8045
[email protected]
