Record 1st Qtr Net Income Grew 10% to $50.1 Million vs FY 2003 Record 1st Qtr EPS Rose 2% to $0.62 per Share Diluted Record 1st Qtr Revenues Increased 5% to $598 Million Record 1st Qtr Contracts Grew 54% to $904 Million Record 1st Qtr-End Backlog Rose 56% to $2.95 Billion
HUNTINGDON VALLEY, Pa., Feb. 26, 2004 (PRIMEZONE) -- Toll Brothers, Inc. (NYSE:TOL) (www.tollbrothers.com), the nation's leading builder of luxury homes, today reported record first quarter results for net income, revenues, contracts and backlog for the period ended January 31, 2004.
Robert I. Toll, chairman and chief executive officer, stated: "The strong demand we've enjoyed for the past several months has continued unabated in February. Over the past four, eight and twelve-week periods, non-binding reservation deposits and traffic, the leading indicators for revenues nine to twelve months out, have been up more than 50% gross and 35% on a `same store' (per community) basis compared to the same period one year ago. Although, for comparison, last year's deposits and traffic in February were tempered by the buildup to war in Iraq, this year's numbers are the strongest on average per community for any February going back to 1987.
"Since most of 2004's remaining deliveries are already in our backlog, we believe that fiscal 2004 will be another record year with net income growth of at least 20%. With lead times of up to twelve months on deliveries at many of our communities, we are now signing contracts for homes to be delivered into the second quarter of fiscal 2005. With this backlog and our supply of 51,000 home sites, which represents a five to six year supply at our current pace of growth, we project continued strong, sustainable growth over the next several years.
"As previously reported, while the severe winter weather apparently has not slowed demand, it has slowed production and delayed closings. The frozen ground has also delayed the start of new home foundations in the Northeast, Mid-Atlantic and Midwest regions. Therefore, we are lowering the top end of our projected range of fiscal 2004 deliveries by 100 homes -- to 6,200 -- while holding at 5,900 homes the low end of our projected range. This range represents an increase of between 20% and 26% compared to fiscal 2003's record deliveries of 4,911 homes. Since we sign contracts for our homes, then build and deliver them, those homes scheduled for delivery that don't close in one quarter will be delivered in the next quarter. These are revenues postponed, not revenues lost."
Toll Brothers' financial highlights for the period ended January 31, 2004 (unaudited):
- First quarter 2004 net income of $50.1 million ($0.62 per share diluted) grew 10% versus 2003's record first quarter net income of $45.4 million ($0.61 per share diluted).
- First quarter 2004 revenues of $597.9 million grew 5% versus 2003's record first quarter revenues of $570.3 million. First quarter 2004 home building revenues of $589.61 million (1,085 homes) increased 6% versus 2003's record first quarter home building revenues of $557.9 million (1,036 homes). Revenues from land sales totaled $6.0 million for first quarter 2004 compared to $9.4 million in first quarter 2003.
- First quarter 2004 contracts of $904.4 million (1,517 homes) grew by 54% versus 2003's record first quarter contracts of $586.2 million (1,066 homes).
- The Company's FY 2004 first quarter-end backlog of $2.95 billion (5,094 homes), the highest for any quarter in its history, increased 56% versus FY 2003's record first quarter-end backlog of $1.89 billion (3,387 homes).
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 4:00 p.m. (EST) today, February 26, 2004, to discuss these results and our outlook for fiscal 2004. 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 April 30, 2004.
As it has previously, the Company plans to file an 8-K detailing the guidance on future results it intends to present on this conference call, which will be posted on its 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 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 21 states: Arizona, California, Colorado, Connecticut, Delaware, Florida, Illinois, Massachusetts, Maryland, Michigan, Nevada, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Texas, and Virginia.
Toll Brothers builds luxury single-family and attached home communities and master-planned luxury multi-product residential golf course 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)
January 31, October 31,
2004 2003
----------- -----------
(Unaudited)
ASSETS
Cash and cash equivalents $ 245,623 $ 425,251
Inventory 3,272,560 3,080,349
Property, construction and
office equipment, net 44,756 43,711
Receivables, prepaid expenses
and other assets 119,631 113,633
Mortgage loans receivable 44,676 57,500
Customer deposits held in escrow 34,653 31,547
Investments in and advances to
unconsolidated entities 64,976 35,400
----------- -----------
$ 3,826,875 $ 3,787,391
=========== ===========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Liabilities:
Loans payable $ 279,933 $ 281,697
Senior notes 546,744 546,669
Senior subordinated notes 620,000 620,000
Mortgage company warehouse loan 37,137 49,939
Customer deposits 197,782 176,710
Accounts payable 143,520 151,730
Accrued expenses 330,529 346,944
Income taxes payable 122,032 137,074
----------- -----------
Total liabilities 2,277,677 2,310,763
----------- -----------
Stockholders' equity:
Common stock 770 770
Additional paid-in capital 202,317 190,596
Retained earnings 1,411,703 1,361,619
Treasury stock (65,592) (76,357)
----------- -----------
Total stockholders' equity 1,549,198 1,476,628
----------- -----------
$ 3,826,875 $ 3,787,391
=========== ===========
TOLL BROTHERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share data)
(Unaudited)
Quarter ended
January 31,
2004 2003
-------- --------
Revenues:
Housing sales $589,577 $557,886
Land sales 5,987 9,434
Equity earnings in unconsolidated
joint ventures 665 253
Interest and other 1,683 2,687
-------- --------
597,912 570,260
-------- --------
Costs and expenses:
Housing sales 422,428 405,172
Land sales 5,303 7,614
Selling, general and administrative
expenses 76,653 65,623
Interest 14,558 16,041
Expenses related to early retirement
of debt -- 3,890
-------- --------
518,942 498,340
-------- --------
Income before income taxes 78,970 71,920
Income taxes 28,886 26,506
-------- --------
Net income $ 50,084 $ 45,414
======== ========
Earnings per share:
Basic $ 0.68 $ 0.65
======== ========
Diluted $ 0.62 $ 0.61
======== ========
Weighted average number of shares:
Basic 73,839 70,407
Diluted 80,819 74,308
Additional information:
Interest incurred $ 28,240 $ 25,782
Depreciation & amortization $ 3,563 $ 3,045
UNITS $ (MILL)
1st Qtr. 1st Qtr.
CLOSINGS 2004 2003 2004 2003
---------------------------------- ----- ----- ------- -------
Northeast (MA, RI, NH, CT, NY, NJ) 183 168 104.6 99.2
Mid-Atlantic (PA, DE, MD, VA) 405 379 201.4 182.5
Midwest (OH, IL, MI) 72 87 40.9 43.5
Southeast (FL, NC, TN) 121 163 53.7 73.3
Southwest (AZ, NV, TX) 149 130 81.8 67.4
West Coast (CA) 155 109 107.2 92.0
----- ----- ------- -------
Total 1,085 1,036 589.6 557.9
CONTRACTS (1)
----------------------------------
Northeast (MA, RI, NH, CT, NY, NJ) 222 141 137.9 88.9
Mid-Atlantic (PA, DE, MD, VA) 527 435 283.8 219.4
Midwest (OH, IL, MI) 125 94 73.3 49.8
Southeast (FL, NC, SC,TN) 174 115 85.4 55.8
Southwest (AZ, NV, TX, CO) 233 178 143.5 96.6
West Coast (CA) 236 103 180.5 75.7
----- ----- ------- -------
Total 1,517 1,066 904.4 586.2
BACKLOG (1)
----------------------------------
Northeast (MA, RI, NH, CT, NY, NJ) 971 633 552.7 374.4
Mid-Atlantic (PA, DE, MD, VA) 1,796 1,190 919.5 584.3
Midwest (OH, IL, MI) 357 288 198.8 156.2
Southeast (FL, NC, SC, TN) 464 336 250.1 186.9
Southwest (AZ, NV, TX, CO) 793 584 458.5 297.8
West Coast (CA) 713 356 570.3 292.2
----- ----- ------- -------
Total 5,094 3,387 2,949.9 1,891.8
(1) Contracts for the three-month period ended January 31, 2004
included $1.6 million (5 homes) from an unconsolidated 50% owned
joint venture. Contracts for the three-month period ended January
31, 2003 included $3.1 million (10 homes) from this joint
venture. Backlog as of January 31, 2004 and 2003 included $4.8
million (15 homes) and $7.8 million (25 homes), respectively,
from this joint venture.