HORSHAM, Pa., Aug. 21, 2013 (GLOBE NEWSWIRE) -- Toll Brothers, Inc. (NYSE:TOL) (www.tollbrothers.com), the nation's leading builder of luxury homes, today announced results for earnings, revenues, contracts, and backlog for its third quarter ended July 31, 2013.
2013 Third Quarter Highlights:
Douglas C. Yearley, chief executive officer, stated: "Sales volumes and pricing power both increased this quarter from one year ago, a pattern consistent with recent quarters. We believe the recovery is real and we are in the early stages of the rebound. Our average sales contracts per community are about where they were in 1997-1998, several years into the previous cyclical recovery. From there, over the next seven years, through August 2005, a period when mortgage rates averaged between 5.8% and 8.1%, sales contracts per community continued to increase, eventually peaking at twice that pace.
"We remain focused on growing our company. This quarter our land position grew to 47,200 lots from 45,200 last quarter and 39,200 one year ago. We expect our community count – 225 at third quarter-end – to remain stable through the end of FY 2013 and to grow by 10% to 15% by FYE 2014."
Martin Connor, chief financial officer, stated: "Our gross margin and operating margin continued to improve with the increase in pricing power and volume. We expect this to continue in FY 2013's fourth quarter and in FY 2014 as we deliver our backlog. Other income benefited from a $2.7 million gain on sale of non-strategic land and a strong quarter from Gibraltar Capital and Asset Management, our distressed loan and acquisition investment subsidiary, which contributed $4.6 million in pre-tax earnings and $12.4 million of cash flow.
"Subject to the caveats in our Statement on Forward-Looking Information included in this release, we offer the following limited guidance:
"We currently estimate that we will deliver between 1,225 and 1,425 homes in FY 2013's fourth quarter at an average price of between $675,000 and $695,000 per home. This would produce total home sale revenue for FY 2013 of between $2.46 billion and $2.62 billion and total deliveries of between 3,925 and 4,125 homes. This compares to $1.88 billion and 3,286 homes in FY 2012.
"We intend to give preliminary guidance for FY 2014 when we announce fourth quarter results in December 2013."
Robert I. Toll, executive chairman, stated: "The University of Michigan consumer sentiment survey, though down slightly from last month's six-year high, is up significantly from one year ago, as is the Conference Board's similar survey. Inventory levels are still tight in almost all of our markets and housing remains very affordable. Unemployment trends are slowly improving and demand, based on household formations, is compelling, especially given the still very-low volume of industry home production.
"We closed on a new $1.035 billion five-year bank credit facility on August 1, 2013 with 15 U.S. and international banks. That, combined with our $1.02 billion of cash and marketable securities at third quarter-end, will help position us to continue to grow the Company in the coming years."
Financial results for the third-quarter and nine-months ended July 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. (EDT) today, August 21, 2013, to discuss these results and its outlook for the remainder of 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 after the conference call via the "Conference Calls" section of the Investor Relations portion of the Toll Brothers website.
Toll Brothers, Inc., A FORTUNE 1000 Company, 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 third quarter ended July 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) |
||
July 31, 2013 |
October 31, 2012 |
|
(Unaudited) | ||
ASSETS | ||
Cash and cash equivalents | $ 899,341 | $ 778,824 |
Marketable securities | 122,527 | 439,068 |
Restricted cash | 33,416 | 47,276 |
Inventory | 4,515,992 | 3,761,187 |
Property, construction and office equipment, net | 126,360 | 109,971 |
Receivables, prepaid expenses and other assets | 175,976 | 144,558 |
Mortgage loans held for sale | 72,163 | 86,386 |
Customer deposits held in escrow | 48,878 | 29,579 |
Investments in and advances to unconsolidated entities | 356,837 | 330,617 |
Investment in distressed loans | 42,500 | 37,169 |
Investment in foreclosed real estate | 72,912 | 58,353 |
Deferred tax assets, net of valuation allowances | 320,584 | 358,056 |
$ 6,787,486 | $ 6,181,044 | |
LIABILITIES AND EQUITY | ||
Liabilities: | ||
Loans payable | $ 97,679 | $ 99,817 |
Senior notes | 2,425,806 | 2,080,463 |
Mortgage company warehouse loan | 65,654 | 72,664 |
Customer deposits | 231,493 | 142,977 |
Accounts payable | 153,163 | 99,911 |
Accrued expenses | 518,447 | 476,350 |
Income taxes payable | 78,973 | 80,991 |
Total liabilities | 3,571,215 | 3,053,173 |
Equity: | ||
Stockholders' Equity | ||
Common stock | 1,693 | 1,687 |
Additional paid-in capital | 430,191 | 404,418 |
Retained earnings | 2,797,098 | 2,721,397 |
Treasury stock, at cost | (14,218) | (983) |
Accumulated other comprehensive loss | (4,687) | (4,819) |
Total stockholders' equity | 3,210,077 | 3,121,700 |
Noncontrolling interest | 6,194 | 6,171 |
Total equity | 3,216,271 | 3,127,871 |
$ 6,787,486 | $ 6,181,044 |
TOLL BROTHERS, INC. AND SUBSIDIARIES | ||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
(Amount in thousands, except per share data) | ||||
(unaudited) | ||||
Nine Months Ended July 31, |
Three Months Ended July 31, |
|||
2013 | 2012 | 2013 | 2012 | |
Revenues | $ 1,629,765 | $1,249,955 | $ 689,160 | $ 554,319 |
Cost of revenues | 1,311,039 | 1,026,357 | 545,089 | 447,928 |
Selling, general and administrative expenses | 246,467 | 212,785 | 88,870 | 74,892 |
1,557,506 | 1,239,142 | 633,959 | 522,820 | |
Income from operations | 72,259 | 10,813 | 55,201 | 31,499 |
Other: | ||||
Income from unconsolidated entities | 8,844 | 19,348 | 768 | 5,672 |
Other income-net | 36,444 | 22,032 | 12,284 | 5,781 |
Income before income taxes | 117,547 | 52,193 | 68,253 | 42,952 |
Income tax provision (benefit) |
41,846 |
(23,536) |
21,658 |
(18,691) |
Net income | $ 75,701 | $ 75,729 | $ 46,595 | $ 61,643 |
Income per share: | ||||
Basic | $ 0.45 | $ 0.45 | $ 0.28 | $ 0.37 |
Diluted | $ 0.43 | $ 0.45 | $ 0.26 | $ 0.36 |
Weighted-average number of shares: | ||||
Basic | 169,237 | 166,990 | 169,268 | 167,664 |
Diluted | 177,966 | 168,613 | 178,001 | 170,229 |
TOLL BROTHERS, INC. AND SUBSIDIARIES | ||||
SUPPLEMENTAL DATA | ||||
(Amount in thousands) | ||||
(unaudited) | ||||
Nine Months Ended July 31, |
Three Months Ended July 31, |
|||
2013 | 2012 | 2013 | 2012 | |
Impairment charges (recoveries)recognized: | ||||
Cost of sales | $ 1,977 | $ 13,249 | $ 239 | $ 3,120 |
Income from unconsolidated entities | (1,617) | |||
$ 1,977 | $ 11,632 | $ 239 | $ 3,120 | |
Depreciation and amortization | $ 19,137 | $ 16,523 | $ 6,370 | $ 5,825 |
Interest incurred | $ 100,066 | $ 93,027 | $ 36,015 | $ 32,560 |
Interest expense: | ||||
Charged to cost of sales | $ 71,905 | $ 59,823 | $ 28,915 | $ 25,834 |
Charged to other income-net | 2,045 | 1,664 | 824 | 82 |
Capitalized interest on investments in unconsolidated entities | 4,510 | 2,260 | 1,638 | 1,123 |
$ 78,460 | $ 63,747 | $ 31,377 | $ 27,039 | |
Home sites controlled: | ||||
Owned | 33,367 | 31,523 | ||
Optioned | 13,814 | 7,685 | ||
47,181 | 39,208 |
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 July 31, | Three Months Ended July 31, | |||
Units | $ (Millions) | |||
HOME BUILDING REVENUES | 2013 | 2012 | 2013 | 2012 |
North | 241 | 280 | $ 182.8 | $ 177.0 |
Mid-Atlantic | 305 | 290 | 166.3 | 155.6 |
South | 296 | 166 | 195.6 | 97.1 |
West | 217 | 227 | 144.5 | 124.6 |
Total consolidated | 1,059 | 963 | $ 689.2 | $ 554.3 |
CONTRACTS | ||||
North | 335 | 227 | $ 237.9 | $ 148.1 |
Mid-Atlantic | 413 | 337 | 257.2 | 179.8 |
South | 366 | 264 | 252.8 | 160.1 |
West | 291 | 291 | 244.7 | 186.4 |
Total consolidated | 1,405 | 1,119 | $ 992.6 | $ 674.4 |
BACKLOG | ||||
North | 1,089 | 690 | $ 743.4 | $ 459.9 |
Mid-Atlantic | 1,045 | 721 | 653.4 | 419.5 |
South | 1,033 | 672 | 710.5 | 425.2 |
West | 834 | 476 | 727.7 | 314.0 |
Total consolidated | 4,001 | 2,559 | $ 2,835.0 | $ 1,618.6 |
Nine Months Ended July 31, | Nine Months Ended July 31, | |||
Units | $ (Millions) | |||
HOME BUILDING REVENUES | 2013 | 2012 | 2013 | 2012 |
North | 589 | 617 | $ 379.7 | $ 363.8 |
Mid-Atlantic | 823 | 659 | 446.0 | 360.0 |
South | 663 | 444 | 418.3 | 255.9 |
West | 624 | 478 | 385.8 | 270.3 |
Total consolidated | 2,699 | 2,198 | $ 1,629.8 | $ 1,250.0 |
CONTRACTS | ||||
North | 1,023 | 754 | $ 673.9 | $ 516.4 |
Mid-Atlantic | 1,210 | 893 | 713.3 | 490.5 |
South | 947 | 674 | 645.4 | 417.9 |
West | 951 | 740 | 762.4 | 449.0 |
Total consolidated | 4,131 | 3,061 | $ 2,795.0 | $ 1,873.8 |
Unconsolidated entities:
Information related to revenues and contracts of entities in which we have an interest for the three-month and nine-months periods ended July 31, 2013 and 2012 is as follows:
2013 Units |
2012 Units |
2013 $(Mill) |
2012 $(Mill) |
|
Three months ended July 31, | ||||
Revenues | 11 | 29 | $ 8.8 | $ 28.9 |
Contracts | 22 | 22 | $ 17.7 | $ 20.1 |
Nine months ended July 31, | ||||
Revenues | 36 | 82 | $ 28.7 | $ 76.3 |
Contracts | 54 | 89 | $ 39.9 | $ 79.7 |
Backlog at July 31, | 54 | 33 | $ 38.4 | $ 24.4 |