Record 4th Qtr Home Bldg Revenues Rise 62% to $1.4 Billion
Record 4th Qtr-End Backlog Increases 68% to $4.4 Billion
Record FY 2004 Home Bldg Revenues Grow 41% to $3.8 Billion
Record FY 2004 Contracts Are Up 62% to $5.6 Billion
HUNTINGDON VALLEY, Pa., Nov. 9, 2004 (PRIMEZONE) -- Toll Brothers, Inc., (NYSE:TOL) (www.tollbrothers.com), the nation's leading builder of luxury homes, today reported record fourth-quarter and fiscal-year-end results for contracts, backlog and home building revenues for the period ended October 31, 2004. The value of the company's fourth-quarter revenues and backlog were the highest for any quarter in its history.
These results are preliminary and unaudited. The Company will announce final totals when it releases fourth-quarter earnings results on December 9, 2004.
Robert I. Toll, chairman and chief executive officer, stated: "As long as the population continues to rise and affluent households continue to grow much faster than the population in general, and as long as government keeps making it difficult to entitle building lots, demand for luxury homes will continue to exceed supply.
"We completed fiscal 2004 with record fourth-quarter contracts and a backlog in place that is already 115% of FY 2004's revenues. Based on those results, we have revised upward our estimate of FY 2005 deliveries to between 7,800 and 8,100 homes at an average price of between $620,000 and $630,000: we believe this will translate into net income growth of at least 30%. With a record 220 communities at FYE 2004, projected to reach about 240 by FYE 2005, we believe we'll achieve at least 20% net income growth in FY 2006.
"Since going public in 1986, we have increased net income, revenues, contracts, backlog and shareholders' equity at a compound average annual rate of over 20%. We believe our success is attributable to our continued focus on the luxury market. We offer luxury buyers the ability to individually customize their homes using thousands of permutations of structural and designer options. We offer them great value because we pre-design and pre-budget these options, enabling us to take advantage of high-volume purchasing and production. We diversify opportunistically into new geographic areas. We secure attractive land positions in lot-constrained affluent markets. And we continue to introduce new product lines to broaden our market. Building on our well-established brand in move-up, empty-nester, active-adult and resort-style master planned communities, we are now introducing urban mid- and high-rise condominium product and high-density suburban offerings.
"According to two recent major studies, demand for new homes is projected to expand in the next ten years; yet increasingly complex approval processes are constraining the supply of buildable lots. With affluent households -- those earning $100,000 or more -- growing six times faster than the population in general, we believe demand for luxury homes will accelerate. We now own or control approximately 60,000 home sites, a five-to-six-year supply based on our current pace of growth. We believe this positions us to prosper in the coming years from the growing imbalance between demand and supply."
Toll Brothers' preliminary financial highlights for the three-month and twelve-month periods ended October 31, 2004 (unaudited):
-- The Company's FY 2004 fourth-quarter contracts of approximately
$1.5 billion (2,248 homes), grew by 51% over FY 2003's fourth-
quarter contracts of $1.02 billion (1,749 homes), the previous
fourth-quarter record. In addition, in fourth quarter 2004,
unconsolidated entities in which the Company had an interest
signed contracts of approximately $41.3 million (91 homes).
-- FY 2004's full fiscal-year contracts of approximately $5.6
billion (8,684 homes), the highest total in the Company's
history, grew by 62% over FY 2003's year-end total of $3.48
billion (6,132 homes), the previous record. In addition, in
the twelve-month FY 2004 period, unconsolidated entities in
which the Company had an interest signed contracts of
approximately $123.5 million (289 homes).
-- FY 2004 fourth-quarter-end backlog of approximately $4.4 billion
(6,709 homes), the highest in the Company's history, increased
68% over FY 2003's record fourth-quarter-end backlog of $2.63
billion (4,652 homes), the previous fourth-quarter record. In
addition, at the end of fiscal 2004, unconsolidated entities in
which the Company had an interest had a backlog of approximately
$75.8 million (174 homes).
-- FY 2004 fourth-quarter home building revenues of approximately
$1.4 billion (2,395 homes), the highest quarter in the Company's
history, increased 62% over FY 2003's fourth-quarter home
building revenues of $893.7 million (1,578 homes), the previous
fourth-quarter record. Revenues from land sales totaled
approximately $1.7 million for FY 2004's fourth quarter,
compared to $6.4 million in FY 2003's.
-- FY 2004 twelve-month home building revenues of approximately
$3.8 billion (6,627 homes) increased 41% over FY 2003's
twelve-month home building revenues of $2.73 billion (4,911
homes), the previous record. FY 2004 revenues from land sales
for the twelve-month period totaled approximately $22.6
million compared to $27.4 million in the same period in FY 2003.
-- In addition, in the Company's fiscal 2004 fourth-quarter and
twelve-month periods, unconsolidated entities in which the
Company had an interest delivered approximately $36.9 million
(89 homes) and $52.4 million (130 homes), respectively,
compared to $3.7 million (12 homes) and $12.0 million (38
homes), respectively, in the same periods of fiscal 2003.
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.
-- In FY 2004's third quarter, the Company entered into a new
$1.05 billion revolving credit facility with 23 banks which
expires in July 2009. In connection with this transaction,
the Company incurred a pre-tax expense of $481,000 due to
unamortized costs associated with replacing its prior $575
million facility.
-- In second quarter 2004, the Company's early retirement of $170
million of senior subordinated notes due in 2009 resulted in a
FY 2004 second-quarter expense of $0.06 per share after tax.
In the first quarter of FY 2003, the early retirement of $100
million of senior subordinated notes due in 2006 resulted in
a $0.03 per share after tax expense. In FY 2003's fourth
quarter, the early retirement of $100 million of senior
subordinated notes due in 2007 resulted in a $0.03 per share
after tax expense. The cumulative effect of the retirement of
these notes resulted in a twelve-month expense of approximately
$0.06 per share after tax in both FY 2003 and FY 2004.
-- On its August 25, 2004 conference call, the Company had stated
that it expected its fourth-quarter selling, general and
administrative expenses ("SG&A") as a percentage of total
revenues would be 10 to 20 basis points higher than the
percentage in fourth-quarter 2003. The Company now expects
that for the fourth quarter of fiscal 2004, SG&A will be lower
as a percentage of total revenues than in 2003's fiscal fourth
quarter by at least 50 basis points.
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. (EST) today, November 9, 2004, to discuss these results and our outlook for fiscal 2005. 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 December 8, 2004.
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 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.
PERIOD ENDED October 31*:
UNITS $ (MILL)
4th Qtr. 4th Qtr. 4th Qtr. 4th Qtr.
CLOSINGS 2004 2003 2004 2003
--------------------------- ----- ----- ------- -------
Northeast 361 244 193.8 142.5
(CT,MA,NH,NJ,NY,RI)
Mid-Atlantic 843 580 462.6 288.6
(DE,MD,PA,VA)
Mid-West (IL,MI,OH) 171 136 100.1 76.1
Southeast (FL,NC,SC,TN) 254 177 123.4 92.1
Southwest (AZ,CO,NV,TX) 358 205 213.9 110.4
West Coast (CA) 408 236 350.3 184.0
----------------------------- ----- ----- ------- -------
Total consolidated entities 2,395 1,578 1,441.1 893.7
Unconsolidated entities 89 12 36.9 3.7
----------------------------- ----- ----- ------- -------
Total 2,484 1,590 1,481.0 897.4
===== ===== ======= =======
CONTRACTS
Northeast 338 323 197.3 178.3
(CT,MA,NH,NJ,NY,RI)
Mid-Atlantic 783 607 514.3 314.9
(DE,MD,PA,VA)
Mid-West (IL,MI,OH) 159 98 105.3 53.0
Southeast (FL,NC,SC,TN) 284 163 165.3 80.2
Southwest (AZ,CO,NV,TX) 431 301 288.9 165.7
West Coast (CA) 253 257 261.1 225.0
----------------------------- ----- ----- ------- -------
Total consolidated entities 2,248 1,749 1,532.2 1,017.1
Unconsolidated entities 91 8 41.3 2.6
----------------------------- ----- ----- ------- -------
Total 2,339 1,757 1,573.5 1,019.7
===== ===== ======= =======
BACKLOG
Northeast 1,028 932 599.5 519.4
(CT,MA,NH,NJ,NY,RI)
Mid-Atlantic 2,245 1,674 1,372.4 837.1
(DE,MD,PA,VA)
Mid-West (IL,MI,OH) 446 294 284.3 163.2
Southeast (FL,NC,SC,TN) 726 411 463.5 218.3
Southwest (AZ,CO,NV,TX) 1,351 709 849.7 396.8
West Coast (CA) 913 632 864.5 497.1
----------------------------- ----- ----- ------- -------
Total consolidated entities 6,709 4,652 4,433.9 2,631.9
Unconsolidated entities 174 15 75.8 4.7
----------------------------- ----- ----- ------- -------
Total 6,883 4,667 4,509.7 2,636.6
===== ===== ======= =======
*Note: Results are preliminary (unaudited).
PERIOD ENDED October 31*:
UNITS $ (MILL)
FYE FYE FYE FYE
CLOSINGS 2004 2003 2004 2003
--------------------------- ----- ----- ------- -------
Northeast 1,016 755 573.0 450.3
(CT,MA,NH,NJ,NY,RI)
Mid-Atlantic 2,398 1,793 1,252.5 882.0
(DE,MD,PA,VA)
Mid-West (IL,MI,OH) 478 405 274.0 219.4
Southeast (FL,NC,SC,TN) 772 653 366.4 311.3
Southwest (AZ,CO,NV,TX) 902 717 527.9 378.2
West Coast (CA) 1,061 588 845.5 489.8
--------------------------- ----- ----- ------- -------
Total consolidated entities 6,627 4,911 3,839.3 2,731.0
Unconsolidated entities 130 38 52.4 12.0
--------------------------- ----- ----- ------- -------
Total 6,757 4,949 3,891.7 2,743.0
===== ===== ======= =======
CONTRACTS
Northeast 1,112 1,027 653.1 584.9
(CT,MA,NH,NJ,NY,RI)
Mid-Atlantic 2,969 2,333 1,787.7 1,171.8
(DE,MD,PA,VA)
Mid-West (IL,MI,OH) 630 433 395.2 237.5
Southeast (FL,NC,SC,TN) 1,087 591 611.6 296.9
Southwest (AZ,CO,NV,TX) 1,544 890 980.7 506.5
West Coast (CA) 1,342 858 1,213.0 678.4
----- ----- ------- -------
Total consolidated entities 8,684 6,132 5,641.3 3,476.0
Unconsolidated entities 289 29 123.5 9.2
--------------------------- ----- ----- ------- -------
Total 8,973 6,161 5,764.8 3,485.2
===== ===== ======= =======