HORSHAM, Pa., Feb. 20, 2013 (GLOBE NEWSWIRE) -- Toll Brothers, Inc. (NYSE:TOL) (www.tollbrothers.com), the nation's leading builder of luxury homes, today announced results for its first quarter ended January 31, 2013.
First Quarter Financial Highlights:
Douglas C. Yearley, Jr., Toll Brothers' chief executive officer, stated: "Demand has increased. With our first quarter contracts up 49%, and contracts for the first three weeks of our second quarter up 40% versus comparable periods in FY 2012, it appears that momentum is building.
"We are continuing to gain market share and see little competition from local private builders. As the Spring selling season kicks off, we are also enjoying increasing pricing power due to the release of pent-up demand colliding with limited supply in the affluent markets where we operate.
"In FY 2013's first quarter, we invested over $330 million in what we believe are very well-located land deals spread across many of our most profitable markets. While many of these new deals will not open for sale until FY 2014 or later, we are projecting to open approximately 70 new communities in the second, third and fourth quarters of FY 2013. Adjusting for communities which we expect will sell out in the next three quarters, we project ending FY 2013 with between 225 and 255 selling communities. With our current land holdings, our new land deals, recent price increases and planned high-rise deliveries, we are optimistic about community count growth and increasing profitability in FY 2014 and beyond.
"We are developing other income streams to supplement our expanding home building operations. Building on our land acquisition/development, and construction expertise and our nationally recognized brand, we have assembled a pipeline of sites we control for new rental apartment projects totaling approximately 4,000 units. We also control sites for two high-quality student housing projects totaling approximately 890 units (3,095 beds). These projects, which are located in the metro Boston to Washington, DC corridor and which we expect to develop in partnership structures over the next several years, should start generating income beginning in FY 2015. They will augment the approximately 1,500 apartment units we've developed and currently operate and own in partnership structures.
"Gibraltar Capital and Asset Management LLC, our wholly owned subsidiary formed to acquire and work out distressed real estate and loans, generated pre-tax profits of $2.1 million this quarter. In addition, Gibraltar has invested $33 million in four separate loan and loan portfolio acquisitions since the start of FY 2013."
Martin P. Connor, Toll Brothers' chief financial officer, stated: "The pace of our sales accelerated throughout FY 2012, so our backlog at fiscal-year-end 2012 was weighted to homes to be delivered in the latter part of FY 2013. Therefore, we see accelerating deliveries throughout FY 2013. With 2,796 homes in backlog, up 57% from one year ago, and with production increasing, we now expect to deliver between 3,750 and 4,300 homes in FY 2013 at an average price of between $595,000 and $630,000.
"As demand increased in the second half of FY 2012, we began, and continue, to raise prices. Those price increases should benefit our income statement and our gross margins in the second half of FY 2013 and beyond.
"Gross margins in the first quarter of FY 2013, excluding interest and impairments, were 20 basis points better than FY 2012's same period but 120 basis points weaker than FY 2012's fourth quarter margins. The reduction from the fourth quarter was primarily due to fewer deliveries of high margin high-rise units in FY 2013's first quarter, as we discussed on our FYE 2012 earnings conference call."
Robert I. Toll, executive chairman, stated: "After seven years of trepidation, buyers are reentering the housing market and household formations are increasing. With low inventories of houses for sale and a limited supply of approved lots, home prices are rising. Buyers who need to sell one home to move to the next one are more willing and able to make the move. These factors plus record-low interest rates are boosting the housing market's recovery. As housing continues to recover and home prices rise, personal and bank balance sheets get stronger, which should spur additional economic activity and more housing demand."
Toll Brothers' financial highlights for the first quarter ended January 31, 2013 (unaudited):
(1) Net debt-to-capital is calculated as total debt minus mortgage warehouse loans minus cash and marketable securities, divided by total debt minus mortgage warehouse loans minus cash and marketable securities plus stockholders' equity.
Toll Brothers will be broadcasting live via the Investor Relations section of its website, www.tollbrothers.com, a conference call hosted by CEO Douglas C. Yearley, Jr. at 2:00 p.m. (EST) today, February 20, 2013, to discuss these results and its outlook for FY 2013. To access the call, enter the Toll Brothers website, 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 online replay which will follow. Podcast (iTunes required) and MP3 format replays will be available approximately 48 hours after the conference call via the "Conference Calls" section of the Investor Relations portion of the Toll Brothers website.
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 under the symbol "TOL." The Company serves move-up, empty-nester, active-adult, and second-home buyers and operates in 19 states: Arizona, California, Colorado, Connecticut, Delaware, Florida, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New York, North Carolina, Pennsylvania, Texas, Virginia, and Washington.
Toll Brothers builds an array of luxury residential communities, principally on land it develops and improves: single-family detached and attached home communities, master planned resort-style golf communities, and urban low-, mid- and high-rise communities. The Company operates its own architectural, engineering, mortgage, title, land development and land sale, golf course development and management, home security, and landscape subsidiaries. The Company also operates its own lumber distribution, house component assembly, and manufacturing operations. The Company acquires and develops commercial properties through Toll Commercial and its affiliate, Toll Brothers Realty Trust, and purchases distressed loan and real estate asset portfolios through its wholly owned subsidiary, Gibraltar Capital and Asset Management.
Toll Brothers is honored to have won the three most coveted awards in the homebuilding industry: America's Best Builder from the National Association of Home Builders, the National Housing Quality Award and Builder of the Year. Toll Brothers was awarded Builder of the Year for 2012 and is the only two-time recipient. Toll Brothers proudly supports the communities in which it builds; among other philanthropic pursuits, the Company sponsors the Toll Brothers Metropolitan Opera International Radio Network, bringing opera to neighborhoods throughout the world. For more information, visit www.tollbrothers.com.
Information presented herein for the first quarter ended January 31, 2013 is subject to finalization of the Company's regulatory filings, related financial and accounting reporting procedures and external auditor procedures.
Certain information included in this release is forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, information related to: anticipated operating results; anticipated financial performance, resources and condition; selling communities; home deliveries; average home prices; consumer demand and confidence; contract pricing; business and investment opportunities; and market and industry trends.
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, among others: local, regional, national and international economic conditions; fluctuating consumer demand and confidence; interest and unemployment rates; changes in sales conditions, including home prices, in the markets where we build homes; conditions in our newly entered markets and newly acquired operations; the competitive environment in which we operate; the availability and cost of land for future growth; conditions that could result in inventory write-downs or write-downs associated with investments in unconsolidated entities; the ability to recover our deferred tax assets; the availability of capital; uncertainties in the capital and securities markets; liquidity in the credit markets; changes in tax laws and their interpretation; effects of governmental legislation and regulation; the outcome of various legal proceedings; the availability of adequate insurance at reasonable cost; the impact of construction defect, product liability and home warranty claims, including the adequacy of self-insurance accruals, and the applicability and sufficiency of our insurance coverage; the ability of customers to obtain financing for the purchase of homes; the ability of home buyers to sell their existing homes; the ability of the participants in various joint ventures to honor their commitments; the availability and cost of labor and building and construction materials; the cost of raw materials; construction delays; domestic and international political events; and weather conditions. For a more detailed discussion of these factors, see the information under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our most recent annual report on Form 10-K and our subsequent quarterly reports on Form 10-Q filed with the Securities and Exchange Commission.
Any or all of the forward-looking statements included in this release are not guarantees of future performance and may turn out to be inaccurate. Forward-looking statements speak only as of the date they are made. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
|TOLL BROTHERS, INC. AND SUBSIDIARIES|
|CONDENSED CONSOLIDATED BALANCE SHEETS|
|(Amounts in thousands)|
|January 31,||October 31,|
|Cash and cash equivalents||$368,756||$778,824|
|Property, construction and office equipment, net||112,877||106,214|
|Receivables, prepaid expenses and other assets||152,881||148,315|
|Mortgage loans receivable||49,400||86,386|
|Customer deposits held in escrow||31,301||29,579|
|Investments in and advances to unconsolidated entities||321,851||330,617|
|Investment in distressed loans||42,832||37,169|
|Investment in foreclosed real estate||68,764||58,353|
|Deferred tax assets, net of valuation allowances||355,966||358,056|
|LIABILITIES AND EQUITY|
|Mortgage company warehouse loan||43,464||72,664|
|Income taxes payable||83,265||80,991|
|Additional paid-in capital||412,242||404,418|
|Treasury stock, at cost||(38)||(983)|
|Accumulated other comprehensive loss||(4,803)||(4,819)|
|Total stockholders' equity||3,134,922||3,121,700|
|TOLL BROTHERS, INC. AND SUBSIDIARIES|
|CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS|
|(Amounts in thousands, except per share data)|
Three months ended
|Cost of revenues||345,937||271,608|
|Selling, general and administrative expenses||78,047||69,637|
|Income (loss) from operations||617||(19,290)|
|Income from unconsolidated entities||3,083||6,687|
|Other income - net||4,626||6,195|
|Income (loss) before income taxes||8,326||(6,408)|
|Income tax provision (benefit)||3,894||(3,622)|
|Net income (loss)||$4,432||$(2,786)|
|Income (loss) per share:|
|Weighted-average number of shares:|
|TOLL BROTHERS, INC. AND SUBSIDIARIES|
|($ Amounts in thousands)|
Three months ended
|Impairment charges recognized in cost of sales||$709||$8,120|
|Depreciation and amortization||$6,525||$5,229|
|Charged to cost of sales||$19,974||$16,321|
|Charged to other income - net||88|
|Capitalized interest on investments in unconsolidated entities||1,363|
|Home sites controlled:|
|Toll Brothers operates in four geographic segments:|
|North:||Connecticut, Illinois, Massachusetts, Michigan, Minnesota, New Jersey and New York|
|Mid-Atlantic:||Delaware, Maryland, Pennsylvania and Virginia|
|South:||Florida, North Carolina and Texas|
|West:||Arizona, California, Colorado, Nevada, and Washington|
Three Months Ended
Three Months Ended
|HOME BUILDING REVENUES||2013||2012||2013||2012|
|Information related to revenues and contracts of entities in which we have an interest for the three-month periods ended January 31, 2013 and 2012, and for backlog at January 31, 2013 and 2012 is as follows:|
|Three months ended January 31,|
|Backlog at January 31,||36||23||$24.4||$19.0|
Frederick N. Cooper (215) 938-8312 Joseph R. Sicree (215) 938-8045