EXHIBIT 99.1
FOR IMMEDIATE RELEASE CONTACT: Frederick N. Cooper (215) 938-8312
August 25, 2005 fcooper@tollbrothersinc.com
Joseph R. Sicree (215) 938-8045
jsicree@tollbrothersinc.com
TOLL BROTHERS' RECORD FY 2005 3RD QTR EARNINGS RISE 103% TO $215.5 MILLION
RECORD 3RD QTR EPS INCREASES 92% TO $1.27 PER SHARE
EXPECTS NET INCOME GROWTH OF OVER 80% AND EPS GROWTH OF OVER 75% FOR FYE 2005
RECORD 3RD QTR REVENUES GROW 54% TO $1.56 BILLION
RECORD 3RD QTR-END BACKLOG IS UP 48% TO $6.43 BILLION
RECORD 3RD QTR CONTRACTS INCREASE 19% TO $1.92 BILLION
Horsham, PA, August 25, 2005 -- 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 earnings, revenues,
backlog and contracts for the periods ended July 31, 2005. The Company's
third-quarter net income, revenues and backlog were the highest for any quarter
in its history.
Robert I. Toll, chairman and chief executive officer, stated: "We attribute
these tremendous results to our team's diligence, our strong land position and
the pricing power we enjoy in our affluent markets. While the supply of
buildable lots seems increasingly to be constrained by governmental regulation,
demographics-driven demand continues to grow. These dynamics have put us on
track for our thirteenth consecutive year of record earnings in FY 2005, and, we
believe, assuming continued healthy demand, approximately 20% net income growth
in both FY 2006 and FY 2007.
"In recent weeks, it appears that bubble mania and reports of a strengthening
employment picture with associated interest rate fears have rattled investors.
We believe strong job numbers and an improving economy are positive factors for
the housing industry, in general, and our luxury niche in particular. Mortgage
rates remain low and the projected Fed Funds target of about 4.5% is below its
peak in 1994, 1995, 1996, 1997, 1998, 1999 and 2000, which were all years of
record home sales for Toll Brothers.
"We believe our success is determined more by our brand name and our
well-located communities than by fluctuations in the mortgage market. In the
past decade, there have been several periods of mortgage rate hikes, three years
in which national housing starts dropped, a recession, and a major stock market
decline. None of these have stifled our ability to expand and produce record
results.
"We've watched some markets go from overheated to warm and back to hot. It
appears to us that the basic fundamentals of wealth accumulation, constrained
lot supplies and growing demand should continue to support our business model.
With approximately 79,500 lots under control, we believe we can continue on a
path of growth for many years to come."
*more*
Joel H. Rassman, chief financial officer, stated: "Based on our record third
quarter backlog of 9,490 homes, we now expect to deliver between 2,750 and 2,850
homes (including deliveries from our recent Landstar acquisition) in our fourth
quarter 2005 at an average price of between $675,000 and $685,000. We now expect
net income growth of over 80% (and over 75% earnings per share growth) in FY
2005 compared to FY 2004's record results.
"Based on our backlog, we believe we should deliver between 10,200 and 10,600
homes in FY 2006 at an average price of approximately $665,000, which should
translate into FY 2006 home building revenues in the range of approximately
$6.78 billion to approximately $7.05 billion."
Toll Brothers' financial highlights for the three-month and nine-month periods
ended July 31, 2005 (unaudited):
o The Company's FY 2005 third-quarter net income of $215.5 million, the
highest for any quarter in our history, grew by 103% over FY 2004's
third-quarter net income of $106.0 million, the previous third-quarter
record. FY 2005 third-quarter earnings per share of $1.27, also a
single quarter record, rose 92% over FY 2004's earnings per share of
$0.66.
o FY 2005 third-quarter revenues of $1.56 billion, the highest for any
quarter in the Company's history, increased 54% over FY 2004's
third-quarter revenues of $1.01 billion, the previous third-quarter
record. FY 2005 third-quarter home building revenues of $1.54 billion
(2,310 homes), also the highest for any quarter in the Company's
history, increased 55% over FY 2004's third-quarter home building
revenues of $991.3 million (1,684 homes), the previous third-quarter
record. Revenues from land sales totaled $10.6 million for FY 2005's
third quarter, compared to $12.9 million in FY 2004's third quarter.
o FY 2005 record nine-month revenues of $3.81 billion increased 57%
versus FY 2004's nine-month revenues of $2.43 billion, the previous
nine-month record. FY 2005 record nine-month home building revenues of
$3.75 billion (5,812 homes) increased 57% over FY 2004's nine-month
home building revenues of $2.40 billion (4,232 homes), also the
previous nine-month record. FY 2005 revenues from land sales for the
nine-month period totaled $21.6 million, compared to $20.9 million in
the same period in FY 2004.
o In addition, in the Company's fiscal 2005 third-quarter and nine-month
periods, unconsolidated entities in which the Company had an interest
delivered $25.7 million (57 homes) and $90.5 million (207 homes),
respectively, compared to $12.1 million (30 homes) and $15.5 million
(41 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.
*more*
o The Company's record FY 2005 third-quarter contracts of $1.92 billion
(2,746 homes), grew by 19% over FY 2004's third-quarter contracts of
$1.61 billion (2,329 homes), the previous third-quarter record. In
addition, in third quarter 2005, unconsolidated entities in which the
Company had an interest signed contracts of $63.4 million (111 homes).
o FY 2005's record nine-month contracts of $5.56 billion (8,100 homes),
grew by 35% over FY 2004's total of $4.11 billion (6,436 homes), the
previous nine-month record. In addition, in the nine-month FY 2005
period, unconsolidated entities in which the Company had an interest
signed contracts of $164.1 million (270 homes).
o FY 2005 third-quarter-end backlog of $6.43 billion (9,490 homes), the
highest for any quarter in the Company's history, increased 48% over FY
2004's third-quarter-end backlog of $4.35 billion (6,856 homes), the
previous third-quarter record. In addition, at the end of FY 2005's
third quarter, unconsolidated entities in which the Company had an
interest had a backlog of $149.4 million (237 homes).
o In FY 2005's third quarter, the Company redeemed all of its $100
million of Toll Corp. 8% Senior Subordinated Notes due 2009 and repaid
all of its $222.5 million First Huntingdon Finance Corp. Bank Term Loan
Facility due 2005. The redemption and repayment resulted in an
after-tax charge for the Company's third-quarter and nine-month periods
of $0.01 per share (diluted). In FY 2004, the Company's nine-month
results included an after-tax charge of $0.03 per share (diluted) due
to early retirement of $170 million of 8 1/8% senior subordinated notes
due 2009 and the write-off of unamortized debt issuance costs related
to the replacement of Toll Brothers' $575 million revolving credit
facility with a $1.2 billion revolving credit facility of longer term
and lower pricing.
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 25,
2005, to discuss these results and our outlook for 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 and Fiscal 2006, 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 October 31, 2005.
*more*
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,
Minnesota, Nevada, New Jersey, New York, North Carolina, 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, a FORTUNE 500 Company, 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 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)
July 31, October 31,
2005 2004
------------- --------------
ASSETS (Unaudited)
Cash and cash equivalents $ 505,947 $ 465,834
Marketable securities 115,029
Inventory 4,840,115 3,878,260
Property, construction and office equipment, net 72,735 52,429
Receivables, prepaid expenses and other assets 166,858 146,212
Mortgage loans receivable 82,929 99,914
Customer deposits held in escrow 86,721 53,929
Investments in and advances to
unconsolidated entities 126,566 93,971
------------ ---------------
$5,881,871 $4,905,578
============ ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Loans payable $ 152,655 $ 340,380
Senior notes 1,139,743 845,665
Senior subordinated notes 350,000 450,000
Mortgage company warehouse loan 72,149 92,053
Customer deposits 438,184 291,424
Accounts payable 261,244 181,972
Accrued expenses 767,510 574,202
Income taxes payable 173,708 209,895
------------ ---------------
Total liabilities 3,355,193 2,985,591
------------ ---------------
Stockholders' equity:
Preferred stock, none issued
Common stock 1,563 770
Additional paid-in capital 260,178 200,938
Retained earnings 2,265,808 1,770,730
Unearned compensation (760)
Treasury stock (111) (52,451)
------------ ---------------
Total stockholders'equity 2,526,678 1,919,987
------------ ---------------
$5,881,871 $4,905,578
============ ===============
*more*
TOLL BROTHERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
Nine months ended Three months ended
July 31, July 31,
-------------------------------------- ------------------------------------
2005 2004 2005 2004
-------------------------------------- ------------------------------------
Revenues:
Home sales $3,751,594 $2,395,150 $1,536,499 $ 991,264
Land sales 21,608 20,938 10,583 12,940
Equity earnings in
unconsolidated entities 9,539 6,945 4,231 5,551
Interest and other 26,575 7,483 10,583 3,364
-------------------------------------- -------------------------------------
3,809,316 2,430,516 1,561,896 1,013,119
-------------------------------------- -------------------------------------
Costs and expenses:
Home sales 2,539,885 1,716,535 1,023,743 709,484
Land sales 15,707 14,315 9,612 7,509
Selling, general and
administrative expenses 349,706 270,155 126,283 103,608
Interest 85,532 59,970 35,594 24,216
Expenses related to early
retirement of debt 4,056 8,229 4,056 481
-------------------------------------- -------------------------------------
2,994,886 2,069,204 1,199,288 845,298
-------------------------------------- -------------------------------------
Income before income taxes 814,430 361,312 362,608 167,821
Income taxes 318,572 132,775 147,076 61,806
-------------------------------------- -------------------------------------
Net income $ 495,858 $ 228,537 $ 215,532 $ 106,015
====================================== =====================================
Earnings per share:
Basic $ 3.22 $ 1.54 $ 1.39 $ .71
Diluted $ 2.94 $ 1.41 $ 1.27 $ .66
Weighted average number of shares:
Basic 153,851 148,398 155,274 148,705
Diluted 168,426 162,110 169,843 161,840
Additional information:
Interest incurred $ 87,069 $ 85,137 $ 28,921 $ 28,632
Depreciation and
amortization $ 17,206 $ 11,231 $ 6,327 $ 3,895
*more*
THREE MONTHS ENDED JULY 31, UNITS $ (MILL)
3RD QTR. 3RD QTR. 3RD QTR. 3RD QTR.
CLOSINGS 2005 2004 2005 2004
- ------------------------------- ---------- ---------- --------- ---------
NORTHEAST
(CT, MA, NH, NJ, NY, RI) 310 256 184.0 149.8
MID-ATLANTIC (DE, MD, PA, VA) 886 616 554.4 314.4
MIDWEST (IL, MI, OH) 178 136 110.7 74.4
SOUTHEAST (FL, NC, SC) 236 205 139.0 97.9
SOUTHWEST (AZ, CO, NV, TX) 361 205 239.2 124.7
WEST COAST (CA) 339 266 309.2 230.1
------- ------- -------- --------
2,310 1,684 1,536.5 991.3
UNCONSOLIDATED ENTITIES 57 30 25.7 12.1
------- ------- -------- --------
2,367 1,714 1,562.2 1,003.4
======= ======= ======== ========
CONTRACTS
- -------------------------------
NORTHEAST
(CT, MA, NH, NJ, NY, RI) 459 270 295.1 155.4
MID-ATLANTIC (DE, MD, PA, VA) 758 748 522.9 473.8
MIDWEST (IL, MI, OH) 149 164 108.4 105.9
SOUTHEAST (FL, NC, SC) 606 361 360.0 229.5
SOUTHWEST (AZ, CO, NV, TX) 544 455 391.6 300.0
WEST COAST (CA) 230 331 238.2 341.6
------- ------- -------- --------
2,746 2,329 1,916.2 1,606.2
UNCONSOLIDATED ENTITIES 111 188 63.4 79.1
------- ------- -------- --------
2,857 2,517 1,979.6 1,685.3
======= ======= ======== ========
BACKLOG
- -------------------------------
NORTHEAST
(CT, MA, NH, NJ, NY, RI) 1,508 1,051 966.5 596.1
MID-ATLANTIC (DE, MD, PA, VA) 2,639 2,305 1,750.8 1,320.6
MIDWEST (IL, MI, OH) 505 458 358.3 279.2
SOUTHEAST (FL, NC, SC) 2,081 696 1,150.1 421.5
SOUTHWEST (AZ, CO, NV, TX) 1,926 1,278 1,315.1 774.7
WEST COAST (CA) 831 1,068 893.0 953.7
------- ------- -------- --------
9,490 6,856 6,433.8 4,345.8
UNCONSOLIDATED ENTITIES 237 172 149.4 71.4
------- ------- -------- --------
9,727 7,028 6,583.2 4,417.2
======= ======= ======== ========
*more*
NINE MONTHS ENDED JULY 31, UNITS $ (MILL)
9 MONTHS 9 MONTHS 9 MONTHS 9 MONTHS
CLOSINGS 2005 2004 2005 2004
- ------------------------------- ---------- ---------- --------- ---------
NORTHEAST
(CT, MA, NH, NJ, NY, RI) 793 655 447.6 379.1
MID-ATLANTIC (DE, MD, PA, VA) 2,308 1,555 1,400.0 789.9
MIDWEST (IL, MI, OH) 414 307 256.8 174.0
SOUTHEAST (FL, NC, SC, TN) 588 518 328.7 243.0
SOUTHWEST (AZ, CO, NV, TX) 914 544 584.0 313.9
WEST COAST (CA) 795 653 734.5 495.3
------- ------- -------- --------
5,812 4,232 3,751.6 2,395.2
UNCONSOLIDATED ENTITIES 207 41 90.5 15.5
------- ------- -------- --------
6,019 4,273 3,842.1 2,410.7
======= ======= ======== ========
CONTRACTS
- -------------------------------
NORTHEAST
(CT, MA, NH, NJ, NY, RI) 1,273 774 814.5 455.8
MID-ATLANTIC (DE, MD, PA, VA) 2,702 2,186 1,778.5 1,273.5
MIDWEST (IL, MI, OH) 473 471 330.8 289.9
SOUTHEAST (FL, NC, SC, TN) 1,450 803 827.7 446.3
SOUTHWEST (AZ, CO, NV, TX) 1,489 1,113 1,049.4 691.8
WEST COAST (CA) 713 1,089 762.9 951.8
------- ------- -------- --------
8,100 6,436 5,563.8 4,109.1
UNCONSOLIDATED ENTITIES 270 198 164.1 82.2
------- ------- -------- --------
8,370 6,634 5,727.9 4,191.3
======= ======= ======== ========
###