FOR IMMEDIATE RELEASE CONTACT: Frederick N. Cooper (215) 938-8312
December 10, 2003 fcooper@tollbrothersinc.com
Joseph R. Sicree (215) 938-8045
jsicree@tollbrothersinc.com
TOLL BROTHERS' RECORD 4TH QTR 2003 NET INCOME OF $93.4 MILLION GROWS 35%
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RECORD 4TH QTR 2003 EPS OF $1.19 RISES 28%
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RECORD FY 2003 NET INCOME OF $259.8 MILLION AND EPS OF $3.44 EACH GROW 18%
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RECORD 4TH QTR REVENUES OF $903.4 MILLION AND FY REVENUES OF $2.78 BILLION
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RISE 28% AND 19%, RESPECTIVELY
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FY 2003 IS TOLL'S 11TH CONSECUTIVE YEAR OF RECORD EARNINGS
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Huntingdon Valley, PA, December 10, 2003 -- 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 earnings,
revenues, contracts and backlog for the periods ended October 31, 2003. FY 2003
was Toll Brothers' 11th consecutive year of record earnings, its 12th
consecutive year of record revenues and its 13th consecutive year of record
contracts. The Company's fourth quarter earnings, revenues, contracts and
backlog were the highest for any single quarter in its history.
Robert I. Toll, chairman and chief executive officer, stated: "Buyer appetite
for luxury homes remains extremely strong. Tremendous demographics, improving
consumer confidence and lot supply constraints induced by no-growth politics
favor those with the capital and expertise to achieve the necessary approvals to
permit development and construction to begin. We ended fiscal 2003 with a high
of 200 selling communities and expect to reach approximately 225 by FYE 2004. We
now control approximately 48,300 lots, a five to six year supply based on our
current pace of growth, and thus should be able to continue our growth in the
future."
"In fiscal 2003 we strengthened our balance sheet and capital base in
preparation for future expansion. We raised $550 million in the investment grade
senior debt market and retired $200 million of more expensive, shorter-term
debt, thus improving our cash flow and lengthening the average maturity of our
debt outstanding to seven years. We increased shareholders' equity by $347
million, or 31%, to $1.48 billion, including an $86 million equity offering, and
reduced our fiscal year-end leverage ratio (net debt to net capital as
calculated below) to 41%, our lowest level since 1991 when we were one-tenth our
current size. We believe we are in the strongest financial position in our
history."
"To facilitate future growth we increased our land position by 18%. We also
acquired Richard R. Dostie, Inc., the premier homebuilder in the Jacksonville,
Florida market, and the Manhattan Building Company, an innovative developer of
luxury mid- and high-rise condominiums on the affluent northern New Jersey
waterfront, which will enable us to accelerate our expansion in the luxury urban
in-fill market."
"By expanding our presence geographically and by diversifying our product
offerings, we have positioned ourselves to meet the needs of the growing wave of
affluent baby boomers. We expect to produce home building revenues of over $3.3
billion and deliver more than 6,000 homes in FY 2004. With an expanding
community count and lot supply, we believe we are on track for 20% plus growth
in net income in 2004 and similar growth in FY 2005."
*more*
"Such growth would be consistent with our historical performance. Since going
public in 1986 we have produced compound average annual growth in earnings and
revenues of 20%, and increased our community count every year. We have proven we
can grow when interest rates are rising, as we did in 1995, 1997 and 2000. More
recently, nearly three years into the worst employment slump since World War II,
we have proven our ability to grow through a period of economic recession and
global political uncertainty."
"It appears the economy is finally starting to improve. With our seasoned
management team, our land supply, our financial strength and our brand name
reputation, we are very optimistic as we look to the future."
Toll Brothers' financial highlights for the periods ended October 31, 2003:
o Fourth quarter 2003 net income of $93.4 million increased 35% versus fourth
quarter 2002's record net income of $69.4 million. Fourth quarter 2003
earnings of $1.19 per share diluted rose 28% versus 2002's record fourth
quarter of $0.93 per share diluted.
o FY 2003 net income of $259.8 million grew 18% versus FY 2002's record net
income of $219.9 million. FY 2003 earnings of $3.44 per share diluted grew
18% versus FY 2002's record earnings of $2.91 per share diluted.
o Fourth quarter and fiscal year 2003 net income each included a pre-tax
expense due to early retirement of debt. The Company incurred a pre-tax
expense of $3.9 million (or $0.033 per share diluted after tax) in the
first quarter of 2003 and a pre-tax expense of $3.3 million (or $0.026 per
share diluted after tax) in the fourth quarter of 2003. In Fiscal 2002
there were no such expenses.
o Fourth quarter 2003 revenues of $903.4 million increased 28% versus 2002's
record fourth quarter revenues of $705.6 million. Fourth quarter home
building revenues of $893.7 million (1,578 homes) rose 29% versus record
fourth quarter 2002 home building revenues of $692.1 million (1,272 homes).
o FY 2003 revenues of $2.78 billion grew 19% versus 2002's record revenues of
$2.33 billion. FY 2003 home building revenues of $2.73 billion (4,911
homes) grew 20% versus FY 2002's record of $2.28 billion (4,430 homes).
o Revenues from land sales totaled $6.4 million and $27.4 million for the
fourth quarter and FY 2003 periods respectively, compared to $9.7 million
and $36.2 million respectively in FY 2002.
o Fourth quarter 2003 contracts of $1.02 billion (1,757 homes) grew by 55%
versus FY 2002's record fourth quarter of $656.6 million (1,205 homes). FY
2003 contracts of $3.49 billion (6,161 homes), rose 27% compared to 2002's
FY record of $2.75 billion (5,113 homes).
o The Company's FY 2003 fourth quarter-end backlog of $2.64 billion (4,667
homes) increased 41% versus FY 2002's record fourth quarter-end of $1.87
billion (3,366 homes).
o The Company ended FY 2003 with leverage of 41%. This ratio is calculated as
net debt (total debt less mortgage warehouse loan and cash) divided by
total net capital (total debt less mortgage warehouse loan and cash plus
equity). The Company's comparable leverage ratio at FYE 2002 was 46%.
*more*
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, December 10,
2003, to discuss these results and our outlook for fiscal 2003 and beyond. 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 January 31, 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 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.
*more*
TOLL BROTHERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
October 31,
----------------------------------------
2003 2002
------------------- ----------------
ASSETS
Cash and cash equivalents $ 425,251 $ 102,337
Inventory 3,080,349 2,551,061
Property, construction and office equipment, net 43,711 38,496
Receivables, prepaid expenses and other assets 113,633 95,503
Mortgage loans receivable 57,500 61,756
Customer deposits held in escrow 31,547 23,019
Investments in and advances to
unconsolidated entities 35,400 23,193
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$3,787,391 $2,895,365
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Loans payable $ 281,697 $ 253,194
Senior notes 546,669
Subordinated notes 620,000 819,663
Mortgage company warehouse loan 49,939 48,996
Customer deposits 176,710 134,707
Accounts payable 151,730 126,391
Accrued expenses 346,944 281,275
Income taxes payable 137,074 101,630
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Total liabilities 2,310,763 1,765,856
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Stockholders' equity
Preferred stock, none issued
Common stock, 77,002 and 74,002 shares issued at
October 31, 2003 and 2002, respectively 770 740
Additional paid-in capital 190,596 102,600
Retained earnings 1,361,619 1,101,799
Treasury stock, at cost - 3,680 shares and
3,785 shares at October 31, 2003 and 2002,
respectively (76,357) (75,630)
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Total stockholders'equity 1,476,628 1,129,509
---------- ----------
$3,787,391 $2,895,365
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*more*
TOLL BROTHERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share data)
Three months ended Twelve months ended
October 31, October 31,
-------------------------------- ----------------------------------
2003 2002 2003 2002
---------------- --------------- ----------------- ----------------
Revenues:
Housing sales $893,658 $692,093 $2,731,044 $2,279,261
Land sales 6,372 9,664 27,399 36,183
Equity earnings from
unconsolidated entities 281 127 981 1,870
Interest and other 3,053 3,706 15,817 11,658
-------- -------- ---------- ----------
903,364 705,590 2,775,241 2,328,972
-------- -------- ---------- ----------
Costs and expenses:
Housing sales 642,794 505,611 1,977,439 1,655,331
Land sales 4,413 7,546 17,875 25,671
Selling, general and
administrative expenses 81,983 63,257 288,337 236,123
Interest 23,110 19,271 73,245 64,529
Expenses related to early
retirement of debt 3,302 7,192
-------- -------- ---------- ----------
$755,602 $595,685 $2,364,088 $1,981,654
-------- -------- ---------- ----------
Income before income taxes 147,762 109,905 411,153 347,318
Income taxes 54,380 40,522 151,333 127,431
-------- -------- ---------- ----------
Net income $ 93,382 $ 69,383 $ 259,820 $219,887
======== ======== ========== ==========
Earnings per share:
Basic $1.29 $0.99 $3.68 $3.12
Diluted $1.19 $0.93 $3.44 $2.91
Weighted average number of shares:
Basic 72,564 70,204 70,670 70,472
Diluted 78,722 74,752 75,541 75,480
Additional information:
Interest incurred $ 27,923 $ 22,762 $ 104,754 $ 90,313
Depreciation & amortization $ 3,234 $ 2,391 $ 12,075 $ 10,495
*more*
PERIOD ENDING OCTOBER 31ST:
UNITS $ (MILL)
4TH Qtr 4TH Qtr 4TH Qtr 4TH Qtr
CLOSINGS 2003 2002 2003 2002
- ------------------------------- --------- --------- --------- --------
Northeast
(MA, RI, NH, CT, NY, NJ) 244 236 142.5 127.8
Mid-Atlantic (PA, DE, MD, VA) 580 470 288.6 217.5
Midwest (OH, IL, MI) 136 89 76.1 44.9
Southeast (FL, NC, TN) 177 181 92.1 86.7
Southwest (AZ, CO, NV, TX) 205 124 110.4 61.3
West Coast (CA) 236 172 184.0 153.9
-------- ---------- ---------- --------
Total 1,578 1,272 893.7 692.1
CONTRACTS (1)
- -------------------------------
Northeast
(MA, RI, NH, CT, NY, NJ) 323 228 178.3 133.6
Mid-Atlantic (PA, DE, MD, VA) 607 432 314.9 214.6
Midwest (OH, IL, MI) 106 85 55.6 43.2
Southeast (FL, NC, SC, TN) 163 119 80.2 60.0
Southwest (AZ, CO, NV, TX) 301 217 165.7 107.7
West Coast (CA) 257 124 225.0 97.5
-------- ---------- ---------- --------
Total 1,757 1,205 1,019.7 656.6
BACKLOG (1)
- -------------------------------
Northeast
(MA, RI, NH, CT, NY, NJ) 932 660 519.4 384.7
Mid-Atlantic (PA, DE, MD, VA) 1,674 1,134 837.1 547.3
Midwest (OH, IL, MI) 309 290 167.9 152.7
Southeast (FL, NC, SC, TN) 411 384 218.3 204.5
Southwest (AZ, CO, NV, TX) 709 536 396.8 268.6
West Coast (CA) 632 362 497.1 308.5
-------- ---------- ---------- --------
Total 4,667 3,366 2,636.6 1,866.3
*more*
PERIOD ENDING OCTOBER 31ST:
UNITS $ (MILL)
FYE FYE FYE FYE
CLOSINGS 2003 2002 2003 2002
- ------------------------------- -------- --------- --------- --------
Northeast
(MA, RI, NH, CT, NY, NJ) 755 886 450.3 465.3
Mid-Atlantic (PA, DE, MD, VA) 1,793 1,580 882.0 735.0
Midwest (OH, IL, MI) 405 394 219.4 187.3
Southeast (FL, NC, TN) 653 614 311.3 258.9
Southwest (AZ, CO, NV, TX) 717 513 378.2 270.4
West Coast (CA) 588 443 489.8 362.4
----- ----- ------- -------
Total 4,911 4,430 2,731.0 2,279.3
CONTRACTS (1)
- -------------------------------
Northeast
(MA, RI, NH, CT, NY, NJ) 1,027 895 584.9 519.5
Mid-Atlantic (PA, DE, MD, VA) 2,333 1,881 1,171.8 890.1
Midwest (OH, IL, MI) 462 398 246.7 202.9
Southeast (FL, NC, SC, TN) 591 670 296.9 312.0
Southwest (AZ, CO, NV, TX) 890 707 506.5 351.4
West Coast (CA) 858 562 678.4 472.3
----- ----- ------- -------
Total 6,161 5,113 3,485.2 2,748.2
(1)Contracts for the three-month and twelve-month periods ended October 31, 2003
included $2.6 million (8 homes) and $9.2 million (29 homes), respectively, from
an unconsolidated 50%-owned joint venture. Contracts for the three-month and
twelve-month periods ended October 31, 2002 included $4.9 million (17 homes) and
$13.7 million (43 homes), respectively, from this joint venture. Backlog as of
October 31, 2003 and 2002 included $4.7 million (15 homes) and $7.5 million (24
homes), respectively, from this joint venture.
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