HUNTINGDON VALLEY, Pa., Oct. 5, 2004 (PRIMEZONE) -- Toll Brothers, Inc. (NYSE:TOL) (www.tollbrothers.com). In anticipation of an investor site tour to be hosted by company representatives this week in Las Vegas and several scheduled presentations in the coming weeks, Robert I. Toll, chairman and chief executive officer of Toll Brothers, Inc., the nation's leading builder of luxury homes, today commented on the Company's activity through the end of September, 2004 and its outlook for the future.
Robert I. Toll, stated: "Through nine months of fiscal 2004, our record contracts are up 67%, our record backlog is up 75%, our record revenues are up 30%, and our record net income is up 37% over the same period in FY 2003, which was then a record. We expect that 2004's fourth quarter results will be records as well.
"Ten weeks into our fourth quarter, which began August 1, 2004, non-binding reservation deposits, a precursor to contracts and revenues, have been the highest or second highest per-community (same store) in nine of those ten weeks dating back to 1987. With a community count now at a record 215 compared to last year's 186, we are benefiting from more communities as well as strong deposits per community.
"With supply constricted due to governmental regulation and no-growth politics and demand spurred by increasing numbers of affluent households and maturing baby boomers entering their peak earning years, buyer appetite for luxury homes should remain strong for the foreseeable future. Based on the strength of current demand and our record third quarter-end backlog, which affords revenue visibility over the next nine to twelve months, we believe we'll achieve at least 30% net income growth in FY 2005. Since we expect to reach approximately 235 selling communities by FYE 2005, compared to 215 at FYE 2004, we believe that 20% revenue and net income growth should be achieved in FY 2006.
"Recent attention has focused on the Las Vegas market. We noted continued strength in Las Vegas on our earnings call of August 26, 2004, and we continue to enjoy pricing power at our communities today. As discussed then, we believed the market had stabilized in the spring of 2004, as buyers had become more discriminating in the face of rapid price increases earlier in the year. We thought it was positive that the market had stabilized and was in better balance with sales being driven by fundamental demand rather than speculative interest.
"We had protected ourselves against this speculation by instituting, in early 2003, anti-speculation clauses in our sales contracts to discourage this activity in our communities. Further, as in our other markets, we receive non-refundable down payments averaging about 7% of the home purchase price from our buyers when they sign contracts and before we start to build their homes. Therefore, cancellation rates in Las Vegas in 2004 of about 5% have been consistent with Company averages in our other markets over the past several years.
"We project revenues of about $190 million in our Nevada region in FY 2004, which represent about 5% of our total revenues and a 40% increase from FY 2003. We have introduced a diversity of product lines and are enjoying strong demand from both move-up and empty-nester buyers across a variety of price points.
"We believe Las Vegas is a land-constrained market: Demand outweighs supply. This environment was a major reason for us to join with seven other builders in a consortium created to bid on a 1,940 acre parcel in metro Las Vegas being auctioned off by the Nevada Bureau of Land Management in June 2004. The consortium was the winning bidder on the property and, we believe, is making a very attractive land purchase in an established market that has become one of the major residential success stories of the past two decades."
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, 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.