EXHIBIT 99.1
FOR IMMEDIATE RELEASE CONTACT: Frederick N. Cooper (215) 938-8312
May 26, 2005 fcooper@tollbrothersinc.com
Joseph R. Sicree (215) 938-8045
jsicree@tollbrothersinc.com
TOLL BROTHERS' RECORD FY 2005 2ND QTR NET INCOME RISES 135% TO $170 MILLION
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RECORD 2ND QTR EPS INCREASES 126% TO $2.01 PER SHARE
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RECORD 2ND QTR CONTRACTS GROW 38% TO $2.20 BILLION
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RECORD 2ND QTR REVENUES RISE 52% TO $1.25 BILLION
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RECORD 2ND QTR-END BACKLOG INCREASES 57% TO $5.87 BILLION
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Horsham, PA, May 26, 2005 -- Toll Brothers, Inc., (NYSE:TOL)
(www.tollbrothers.com), the nation's leading builder of luxury homes, today
reported record second-quarter and six-month results for earnings, contracts,
revenues and backlog for the period ended April 30, 2005. The value of the
company's second-quarter contracts and backlog were the highest for any quarter
in its history.
Robert I. Toll, chairman and chief executive officer, stated: "We owe our
excellent results to the tremendous perseverance and intensity of our
associates. No one in our industry has a harder working, more dedicated team!
"With increasing numbers of communities in lot-constrained markets, our growing
brand name and our broadening diversity of luxury new home product lines, we
continue to produce record results.
"We expect to end fiscal 2005 with approximately 240 selling communities
compared to 220 at FYE 2004. We believe our expertise in securing land and
opening communities in highly-regulated, upscale markets gives us a competitive
advantage, both today and in the future. We now control approximately 68,000
home sites, compared to 58,000 one year ago. These sites, which are in
communities currently open for sale or wending their way through the approval
process, represent a five-to-six year supply based on our historic pace of
growth."
Joel H. Rassman, chief financial officer, stated: "Our record earnings,
contracts and backlog reflect the strong demand and accompanying pricing power
we have enjoyed over the past twelve months. Based on these results and our
record $5.87 billion backlog of homes under contract, we are increasing our
earnings expectations for FY 2005. We now believe net income will grow
approximately 70% in FY 2005 compared to FY 2004. Based on our backlog and
expected community growth, even with this increased projection, we still believe
net income will rise approximately 20% in FY 2006 over FY 2005."
*more*
Toll Brothers' financial highlights for the three-month and six-month periods
ended April 30, 2005 (unaudited):
o The Company's FY 2005 second-quarter net income of $170.1 million grew
135% versus FY 2004 second-quarter net income of $72.4 million.
Second-quarter earnings of $2.01 per share diluted increased 126%
compared to second-quarter 2004's earnings of $0.89 per share diluted,
the previous second-quarter record.
o FY 2005 six-month net income of $280.3 million grew 129% versus FY 2004
six-month net income of $122.5 million. Six-month earnings of $3.34 per
share diluted rose 121% versus FY 2004's same period earnings of $1.51
per share diluted.
o FY 2005 second-quarter contracts of $2.20 billion (3,181 homes), grew
38% over FY 2004's second-quarter contracts of $1.60 billion (2,595
homes), the previous second-quarter record. In addition, in second
quarter 2005, unconsolidated entities in which the Company had an
interest signed contracts of $85.2 million (123 homes).
o FY 2005's six-month contracts of $3.65 billion (5,354 homes), grew 46%
over FY 2004's total of $2.50 billion (4,107 homes), the previous
six-month record. In addition, in the six-month FY 2005 period,
unconsolidated entities in which the Company had an interest signed
contracts of $100.7 million (159 homes).
o FY 2005 second quarter-end backlog of $5.87 billion (8,561 homes), the
highest in the Company's history, increased 57% over FY 2004's
second-quarter-end backlog of $3.73 billion (6,211 homes), the previous
second-quarter record. In addition, at the end of second quarter 2005,
unconsolidated entities in which the Company had an interest had a
backlog of $111.7 million (183 homes).
o FY 2005 second-quarter revenues of $1.25 billion increased 52% versus
FY 2004's second-quarter revenues of $819.5 million. In FY 2005,
second-quarter home building revenues of $1.23 billion (1,912 homes),
increased 51% over FY 2004's second-quarter home building revenues of
$814.3 million (1,463 homes), the previous second-quarter record.
Revenues from land sales totaled $9.8 million for FY 2005's second
quarter, compared to $2.0 million in the second quarter of FY 2004.
o FY 2005 six-month revenues of $2.25 billion increased 59% versus FY
2004's six-month revenues of $1.42 billion, the previous six-month
record. FY 2005 six-month home building revenues of $2.22 billion
(3,502 homes) increased 58% over FY 2004's six-month home building
revenues of $1.40 billion (2,548 homes), the previous six-month record.
FY 2005 revenues from land sales for the six-month period totaled $11.0
million compared to $8.0 million in the same period in FY 2004.
*more*
o In addition, in the Company's fiscal 2005 second-quarter and six-month
periods, unconsolidated entities in which the Company had an interest
delivered $38.4 million (87 homes) and $64.9 million (150 homes),
respectively, compared to $1.9 million (6 homes) and $3.4 million (11
homes), respectively, in the same periods of fiscal 2004. 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 Toll Brothers' second quarter and six-month 2004 results included a
$0.06 per share after-tax expense due to early retirement of $170
million of 8 1/8% senior subordinated notes due 2009. No such
comparable charge was incurred in the second-quarter or six-month
periods in FY 2005.
o In Toll Brothers' third quarter 2005, the Company anticipates it will
incur an after-tax expense of approximately $0.03 per share diluted
related to the expected early retirement of all of its $100 million of
8% Senior Subordinated Notes due 2009 and its $222.5 million bank term
loan due July 2005.
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, May 26, 2005,
to discuss these results and our outlook for the remainder of fiscal 2005. Prior
to this conference call, the company intends to file a Form 8-K with the
Securities and Exchange Commission containing its guidance for expected results
of operations for Fiscal 2005 which will be discussed on the call. 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 July 31, 2005.
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 20 states: Arizona, California, Colorado,
Connecticut, Delaware, Florida, Illinois, Massachusetts, Maryland, Michigan,
Nevada, 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.
*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.
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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)
April 30, October 31,
2005 2004
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ASSETS (Unaudited)
Cash and cash equivalents $ 566,668 $ 465,834
Marketable securities 115,029
Inventory 4,299,587 3,878,260
Property, construction and office equipment, net 63,649 52,429
Receivables, prepaid expenses and other assets 152,009 146,212
Mortgage loans receivable 78,663 99,914
Customer deposits held in escrow 76,681 53,929
Investments in and advances to
unconsolidated entities 114,196 93,971
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$ 5,351,453 $ 4,905,578
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LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Loans payable $ 358,922 $ 340,380
Senior notes 845,914 845,665
Subordinated notes 450,000 450,000
Mortgage company warehouse loan 69,108 92,053
Customer deposits 389,265 291,424
Accounts payable 202,918 181,972
Accrued expenses 611,340 574,202
Income taxes payable 147,964 209,895
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Total liabilities 3,075,431 $ 2,985,591
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Stockholders' equity:
Preferred stock, none issued
Common stock 776 770
Additional paid-in capital 251,646 200,938
Retained earnings 2,051,056 1,770,730
Unearned compensation (834)
Treasury stock (26,622) (52,451)
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Total stockholders'equity 2,276,022 1,919,987
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$ 5,351,453 $ 4,905,578
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*more*
TOLL BROTHERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
Six months ended Three months ended
April 30, April 30,
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2005 2004 2005 2004
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Revenues:
Home sales $2,215,095 $1,403,886 $1,225,998 $814,309
Land sales 11,025 7,998 9,800 2,011
Equity earnings
in unconsolidated 5,308 1,394 3,373 729
entities
Interest and other 15,992 4,119 9,109 2,436
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2,247,420 1,417,397 1,248,280 819,485
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Costs and expenses:
Home sales 1,516,142 1,007,051 830,649 584,623
Land sales 6,095 6,806 5,316 1,503
Selling, general and
administrative 223,423 166,547 116,358 89,894
Interest 49,938 35,754 28,126 21,196
Expenses related to early
retirement of debt 7,748 7,748
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1,795,598 1,223,906 980,449 704,964
---------- ---------- ---------- --------
Income before income taxes 451,822 193,491 267,831 114,521
Income taxes 171,496 70,969 97,698 42,083
---------- ---------- ---------- --------
Net income $ 280,326 $ 122,522 $ 170,133 $ 72,438
========== ========== ========== ========
Earnings per share:
Basic $ 3.66 $ 1.65 $ 2.20 $ 0.97
Diluted $ 3.34 $ 1.51 $ 2.01 $ 0.89
Weighted average number of shares:
Basic 76,570 74,123 77,313 74,406
Diluted 83,859 81,123 84,676 81,426
Additional information:
Interest incurred $ 58,148 $ 56,505 $ 28,998 $ 28,265
Depreciation and
amortization $ 10,879 $ 7,336 $ 5,678 $ 3,773
*more*
THREE MONTHS ENDED APRIL 30, UNITS $ (MILL)
2ND QTR. 2ND QTR. 2ND QTR. 2ND QTR.
CLOSINGS 2005 2004 2005 2004
- ------------------------------- ---------- ---------- --------- --------
NORTHEAST
(CT, MA, NH, NJ, NY, RI) 254 216 140.3 124.8
MID-ATLANTIC (DE, MD, PA, VA) 759 534 458.7 274.1
MIDWEST (IL, MI, OH) 141 99 89.1 58.6
SOUTHEAST (FL, NC, SC, TN) 197 192 105.4 91.5
SOUTHWEST (AZ, CO, NV, TX) 305 190 188.9 107.4
WEST COAST (CA) 256 232 243.6 157.9
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1,912 1,463 1,226.0 814.3
UNCONSOLIDATED ENTITIES 87 6 38.4 1.9
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1,999 1,469 1,264.4 816.2
========== ========== ========= ========
CONTRACTS
- -------------------------------
NORTHEAST
(CT, MA, NH, NJ, NY, RI) 495 282 318.8 162.5
MID-ATLANTIC (DE, MD, PA, VA) 1,177 911 784.1 515.8
MIDWEST (IL, MI, OH) 212 187 144.4 112.3
SOUTHEAST (FL, NC, SC, TN) 463 268 262.3 131.3
SOUTHWEST (AZ, CO, NV, TX) 579 425 403.5 248.3
WEST COAST (CA) 255 522 291.4 429.8
---------- ---------- --------- --------
3,181 2,595 2,204.5 1,600.0
UNCONSOLIDATED ENTITIES 123 5 85.2 1.6
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3,304 2,600 2,289.7 1,601.6
========== ========== ========= ========
BACKLOG
- -------------------------------
NORTHEAST
(CT, MA, NH, NJ, NY, RI) 1,359 1,037 855.4 590.4
MID-ATLANTIC (DE, MD, PA, VA) 2,767 2,173 1,782.3 1,161.2
MIDWEST (IL, MI, OH) 534 430 360.6 247.7
SOUTHEAST (FL, NC, SC, TN) 1,218 540 741.4 289.9
SOUTHWEST (AZ, CO, NV, TX) 1,743 1,028 1,162.7 599.5
WEST COAST (CA) 940 1,003 964.0 842.2
---------- ---------- --------- --------
8,561 6,211 5,866.4 3,730.9
UNCONSOLIDATED ENTITIES 183 14 111.7 4.5
---------- ---------- --------- --------
8,744 6,225 5,978.1 3,735.4
========== ========== ========= ========
*more*
SIX MONTHS ENDED APRIL 30, UNITS $ (MILL)
6 MONTHS 6 MONTHS 6 MONTHS 6 MONTHS
CLOSINGS 2005 2004 2005 2004
- ------------------------------- ---------- ---------- --------- --------
NORTHEAST
(CT, MA, NH, NJ, NY, RI) 483 399 263.6 229.4
MID-ATLANTIC (DE, MD, PA, VA) 1,422 939 845.6 475.5
MIDWEST (IL, MI, OH) 236 171 146.1 99.6
SOUTHEAST (FL, NC, SC, TN) 352 313 189.7 145.1
SOUTHWEST (AZ, CO, NV, TX) 553 339 344.8 189.2
WEST COAST (CA) 456 387 425.3 265.1
---------- ---------- --------- --------
3,502 2,548 2,215.1 1,403.9
UNCONSOLIDATED ENTITIES 150 11 64.9 3.4
---------- ---------- --------- --------
3,652 2,559 2,280.0 1,407.3
========== ========== ========= ========
CONTRACTS
- -------------------------------
NORTHEAST
(CT, MA, NH, NJ, NY, RI) 814 504 519.5 300.3
MID-ATLANTIC (DE, MD, PA, VA) 1,944 1,438 1,255.5 799.6
MIDWEST (IL, MI, OH) 324 307 222.4 184.0
SOUTHEAST (FL, NC, SC, TN) 844 442 467.7 216.8
SOUTHWEST (AZ, CO, NV, TX) 945 658 657.8 391.8
WEST COAST (CA) 483 758 524.7 610.3
---------- ---------- --------- --------
5,354 4,107 3,647.6 2,502.8
UNCONSOLIDATED ENTITIES 159 10 100.7 3.2
---------- ---------- --------- --------
5,513 4,117 3,748.3 2,506.0
========== ========== ========= ========
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