EXHIBIT 99.1
FOR IMMEDIATE RELEASE CONTACT: Frederick N. Cooper (215) 938-8312
August 5, 2004 fcooper@tollbrothersinc.com
Joseph R. Sicree (215) 938-8045
jsicree@tollbrothersinc.com
TOLL BROTHERS' RECORD 3RD QTR 2004 CONTRACTS RISE 69% VS 2003 TO $1.6 BILLION
RECORD 3RD QTR-END BACKLOG GROWS 75% TO $4.3 BILLION
RECORD 3RD QTR HOME BLDG REVENUES RISE 46% TO $991 MILLION
Huntingdon Valley, PA, August 5, 2004 -- Toll Brothers, Inc., (NYSE:TOL)
(www.tollbrothers.com), the nation's leading builder of luxury homes, today
reported record third-quarter and nine-month results for contracts, backlog and
home building revenues for the period ended July 31, 2004. The value of the
company's revenues, contracts and backlog were the highest for any quarter in
its history. In addition to the results above, unconsolidated joint ventures in
which the Company had an interest signed contracts of approximately $79 million
in the third quarter of FY 2004.
These results are preliminary. The Company will announce final totals when it
releases third quarter earnings results on August 25, 2004.
Robert I. Toll, chairman and chief executive officer, stated: "Our growth in
contracts certainly demonstrates the consistent strength of demand for luxury
new homes. This is particularly impressive considering the challenging
year-over-year comparisons we faced: Our third quarter contracts were up 69%
over 2003's record third quarter, which were up 35% over 2002's.
"Our traffic and non-binding reservation deposits, which presage contracts, have
remained very strong. In eleven of the thirteen weeks in this third quarter, our
'per community' (same store) deposits were either the highest or second highest
since 1987, our first full year as a public company. This trend, coupled with
our 17% increase in selling communities from one year ago, makes us optimistic
that we can produce record results and net income growth of at least 20% in FY
2005. And assuming continuing strong demand, we believe that 20% growth should
be achievable in FY 2006 as well.
"The increase in the average price of homes under contract and in our backlog
reflects, in part, the pricing power we enjoy in the affluent markets where we
operate, which are generally characterized by constrained lot supplies and
increasing demand. Based on our current backlog, we are increasing the range of
projected fourth-quarter 2004 deliveries to between 2,075 and 2,175 homes, and
the average delivered price to between $580,000 and $590,000 per home.
"The initial benefits of our expansion into the urban high-rise market are
evidenced by the approximately $78 million of new contracts signed this quarter
by the joint venture we are managing at The Sky Club in Hoboken, New Jersey.
These contracts reflect the strong demand on the northern New Jersey Gold Coast
for high-rise condominiums. With construction near completion, of the 326 total
condominiums in The Sky Club's two 17-story buildings, 22 condos had been
delivered and 164 were in backlog at our third quarter end, with more than 100
additional units under non-binding agreements. We expect nearly all of the
deliveries of Sky Club's condos will occur in our fourth-quarter of FY 2004 and
the first half of FY 2005. Our share of the profits from these deliveries will
be reported on our income statement under 'Equity Earnings in Unconsolidated
Entities'.
*more*
"Two recent studies project that demand for new homes should continue to grow
over the next ten years. This is based on increased population estimates from
the U.S. Census Bureau, strong immigration trends, growing demand for new second
homes and the need for replacement of obsolete housing units. Harvard
University's Joint Center for Housing Studies predicts demand for single-family
and multi-family units combined will require production of at least 18.5 to 19.5
million units from 2005 to 2015 and notes that demand could be even higher.
"A study by The Homeownership Alliance, which includes the chief economists from
Fannie Mae, Freddie Mac, the National Association of Home Builders, the National
Association of Realtors and the Independent Community Bankers of America,
projects demand from 2004 to 2013 will create the need for 'average production
of 1.85 to 2.17 million new housing units per year.' The report notes that `even
the lower end of this range is above the production levels of recent decades'
and predicts that single-family homes will account for about 72% of total new
housing units.
"We now own or control nearly 60,000 home sites and offer diversified product
lines for move-up, empty-nester and active-adult buyers across a wide range of
luxury home price points and products. With the increasing constraint from
regulation, we expect there will be a shortage of home sites to meet demand in
the next decade, particularly in affluent markets. With our growing land
holdings, we have positioned ourselves accordingly. Based on the demographics of
our niches and our ability to control land in an increasingly lot-constrained
environment, we are excited about our prospects for the future."
Toll Brothers' preliminary financial highlights for the period ended July 31,
2004 (unaudited):
o The Company's FY 2004 third-quarter contracts of approximately $1.6 billion
(2,329 homes) grew by 69% over FY 2003's third-quarter contracts of $951.6
million (1,668 homes), the previous third-quarter record. In addition, in
third-quarter 2004, unconsolidated joint ventures in which the Company had
an interest signed contracts of approximately $79 million (188 homes).
o FY 2004's nine-month contracts of approximately $4.1 billion (6,436 homes),
the highest total in the Company's history, grew by 67% over FY 2003's
nine-month total of $2.46 billion (4,383 homes), the previous record. In
addition, in the nine-month FY 2004 period, unconsolidated joint ventures
in which the Company had an interest signed contracts of approximately $82
million (198 homes).
o FY 2004 third-quarter-end backlog of approximately $4.3 billion (6,856
homes), the highest backlog in the Company's history, increased 75% over FY
2003's record third-quarter-end backlog of $2.48 billion (4,392 homes). In
addition, in third quarter 2004, unconsolidated joint ventures in which the
Company had an interest had a cumulative backlog of approximately $71
million (172 homes).
o FY 2004 third-quarter home building revenues of approximately $991 million
(1,684 homes), the highest quarter in the Company's history, increased 46%
over FY 2003's third-quarter home building revenues of $678.5 million
(1,188 homes), the previous third-quarter record. Revenues from land sales
totaled approximately $12 million for FY 2004's third quarter, compared to
$7.6 million in FY 2003's.
*more*
o FY 2004 nine-month home building revenues of approximately $2.4 billion
(4,232 homes) increased 30% over FY 2003's nine-month home building
revenues of $1.84 billion (3,333 homes), the previous record. FY 2004
revenues from land sales for the nine-month period totaled approximately
$20.2 million compared to $21.0 million in the same period in FY 2003.
o In addition, in the Company's fiscal 2004 third-quarter and nine-month
periods, unconsolidated joint ventures in which the Company had an interest
delivered approximately $12 million (30 homes) and $15 million (41 homes),
respectively, compared to $2.9 million (9 homes) and $8.2 million (26
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.
o 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
approximately $500,000 due to unamortized costs associated with replacing
its prior $575 million facility.
o As previously announced, in second-quarter 2004, the Company's early
retirement of $170 million of senior subordinated debt 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 debt due in 2006 resulted in a $0.03 per share after tax
expense. The cumulative effect of debt retirement resulted in a nine-month
expense of approximately $0.06 per share after tax in FY 2004 and
approximately $0.03 per share after tax in FY 2003.
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. (EDT) today, August 5, 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 August 24, 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,
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.
*more*
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*
PERIOD ENDED JULY 31*:
CLOSINGS
- --------------------------- UNITS $ (MILL)
3RD QTR. 3RD QTR. 3RD QTR. 3RD QTR.
2004 2003 2004 2003
--------- --------- --------- ---------
NORTHEAST 256 179 149.8 112.6
(CT,MA,NH,NJ,NY,RI)
MID-ATLANTIC 616 445 314.4 221.7
(DE,MD,PA,VA)
MID-WEST (IL,MI,OH) 136 103 74.4 57.1
SOUTHEAST (FL,NC,SC,TN) 205 131 97.7 69.3
SOUTHWEST (AZ,CO,NV,TX) 205 212 124.7 114.0
WEST COAST (CA) 266 118 229.6 103.8
----- ----- ------- -----
TOTAL CONSOLIDATED ENTITIES 1,684 1,188 990.6 678.5
UNCONSOLIDATED ENTITIES 30 9 12.1 2.9
----- ----- ------- -----
TOTAL 1,714 1,197 1,002.7 681.4
===== ===== ======= =====
CONTRACTS
- ---------------------------
NORTHEAST 270 247 155.4 141.7
(CT,MA,NH,NJ,NY,RI)
MID-ATLANTIC 748 643 473.8 322.5
(DE,MD,PA,VA)
MID-WEST (IL,MI,OH) 164 133 105.9 73.5
SOUTHEAST (FL,NC,SC,TN) 361 154 229.4 77.3
SOUTHWEST (AZ,CO,NV,TX) 455 207 300.0 119.1
WEST COAST (CA) 331 284 341.0 217.5
----- ----- ------- -----
TOTAL CONSOLIDATED ENTITIES 2,329 1,668 1,605.5 951.6
UNCONSOLIDATED ENTITIES 188 3 79.1 1.1
----- ----- ------- -----
TOTAL 2,517 1,671 1,684.6 952.7
===== ===== ======= =====
BACKLOG
- ---------------------------
NORTHEAST 1,051 853 596.1 483.6
(CT,MA,NH,NJ,NY,RI)
MID-ATLANTIC 2,305 1,647 1,320.6 810.8
(DE,MD,PA,VA)
MID-WEST (IL,MI,OH) 458 332 279.2 186.3
SOUTHEAST (FL,NC,SC,TN) 696 336 421.5 202.0
SOUTHWEST (AZ,CO,NV,TX) 1,278 613 774.7 341.6
WEST COAST (CA) 1,068 611 953.7 456.0
----- ----- ------- -----
TOTAL CONSOLIDATED ENTITIES 6,856 4,392 4,345.8 2,480.3
UNCONSOLIDATED ENTITIES 172 19 71.4 5.8
----- ----- ------- -----
TOTAL 7,028 4,411 4,417.2 2,486.1
===== ===== ======= =======
*Note: Results are preliminary (unaudited).
*more*
PERIOD ENDED JULY 31*:
UNITS $ (MILL)
9 MONTHS 9 MONTHS 9 MONTHS 9 MONTHS
CLOSINGS 2004 2003 2004 2003
- ---------------------------- -------- -------- --------- ---------
NORTHEAST 655 511 379.1 307.8
(CT,MA,NH,NJ,NY,RI)
MID-ATLANTIC 1,555 1,213 789.9 593.4
(DE,MD,PA,VA)
MID-WEST (IL,MI,OH) 307 269 174.0 143.4
SOUTHEAST (FL,NC,SC,TN) 518 476 242.9 219.2
SOUTHWEST (AZ,CO,NV,TX) 544 512 313.9 267.8
WEST COAST (CA) 653 352 494.7 305.8
----- ----- ------- -------
TOTAL CONSOLIDATED ENTITIES 4,232 3,333 2,394.5 1,837.4
UNCONSOLIDATED ENTITIES 41 26 15.5 8.2
----- ----- ------- -------
TOTAL 4,273 3,359 2,410.0 1,845.6
===== ===== ======= =======
CONTRACTS
- ----------------------------
NORTHEAST 774 704 455.8 406.7
(CT,MA,NH,NJ,NY,RI)
MID-ATLANTIC 2,186 1,726 1,273.4 856.8
(DE,MD,PA,VA)
MID-WEST (IL,MI,OH) 471 335 289.9 184.6
SOUTHEAST (FL,NC,SC,TN) 803 428 446.1 216.8
SOUTHWEST (AZ,CO,NV,TX) 1,113 589 691.9 340.7
WEST COAST (CA) 1,089 601 951.3 453.3
----- ----- ------- -------
TOTAL CONSOLIDATED ENTITIES 6,436 4,383 4,108.4 2,458.9
UNCONSOLIDATED ENTITIES 198 21 82.2 6.5
----- ----- ------- -------
TOTAL 6,634 4,404 4,190.6 2,465.4
===== ===== ======= =======
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