Delaware | 001-09186 | 23-2416878 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
250 Gibraltar Road, Horsham, PA | 19044 | |||
(Address of Principal Executive Offices) | (Zip Code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
99.1* | Press release of Toll Brothers, Inc. dated May 23, 2012 announcing its financial results for the six-month and three-month periods ended April 30, 2012. |
TOLL BROTHERS, INC. | ||||||
Dated: | May 23, 2012 | By: | Joseph R. Sicree | |||
Joseph R. Sicree | ||||||
Senior Vice President, | ||||||
Chief Accounting Officer |
FOR IMMEDIATE RELEASE | CONTACT: Frederick N. Cooper (215) 938-8312 |
May 23, 2012 | fcooper@tollbrothersinc.com |
Joseph R. Sicree (215) 938-8045 | |
jsicree@tollbrothersinc.com |
▪ | FY 2012's second-quarter net income was $16.9 million, or $0.10 per share, compared to FY 2011's second-quarter net loss of $20.8 million, or $0.12 per share. FY 2012's second-quarter net income included $2.0 million of pre-tax inventory write-downs and a $1.6 million recovery of prior joint venture impairments. In FY 2011, second-quarter pre-tax inventory write-downs and joint venture impairments totaled $32.5 million including $19.6 million of joint venture impairments. |
▪ | FY 2012's second-quarter pre-tax income was $15.6 million, compared to FY 2011's second-quarter pre-tax loss of $31.5 million. |
▪ | Excluding write-downs and joint venture impairments and recoveries, FY 2012's second-quarter pre-tax income was $16.1 million, compared to FY 2011's second-quarter pre-tax income of $1.0 million. |
▪ | FY 2012's six-month net income was $14.1 million, or $0.08 per share, compared to FY 2011's six-month net loss of $17.4 million, or $0.10 per share. |
▪ | FY 2012's six-month net income included $10.1 million of pre-tax inventory write-downs and a $1.6 million recovery of prior joint venture impairments: $9.0 million of the inventory write-downs was attributable to operating communities, $0.9 million to land owned for future communities, and $0.2 million to land controlled for future communities. In FY 2011, six-month pre-tax write-downs totaled $57.6 million including $39.6 million in joint venture impairments. |
▪ | FY 2012's six-month pre-tax income was $9.2 million, compared to FY 2011's six-month pre-tax loss of $48.5 million. |
▪ | Excluding write-downs and joint venture recoveries, FY 2012's six-month pre-tax income was $17.8 million, compared to pre-tax income of $9.1 million for FY 2011's six-month period, excluding write-downs and joint venture impairments. |
▪ | The Company recorded a FY 2012 second-quarter tax benefit of $1.2 million and a six-month tax benefit of $4.8 million, compared to a $10.7 million tax benefit in FY 2011's second quarter and a $31.2 million tax benefit in FY 2011's six-month period. |
▪ | FY 2012's second-quarter total revenues of $373.7 million and 671 units increased 17% in dollars and 14% in units from FY 2011's second-quarter total revenues of $319.7 million and 591 units. |
▪ | FY 2012's second-quarter gross margin, excluding interest and write-downs, improved to 23.2% from 23.0% in FY 2011's second quarter. |
▪ | Interest included in cost of sales decreased to 4.7% of revenues in FY 2012's second quarter from 5.4% of revenues in FY 2011's second quarter, as delivering inventory was held for shorter periods. |
▪ | FY 2012's six-month total revenues of $695.6 million and 1,235 units rose 6% in both dollars and units, compared to FY 2011's same period totals of $653.8 million and 1,161 units. |
▪ | The Company signed gross contracts of $773.0 million and 1,322 units in FY 2012's second quarter, an increase of 48% in dollars and 44% in units, compared to $521.1 million and 915 gross contracts signed in FY 2011's second quarter. |
▪ | The Company signed 2,017 gross contracts totaling $1.24 billion in FY 2012's first six months, an increase of 35% and 47%, respectively, in units and dollars, compared to the 1,496 gross contracts totaling $847.0 million signed in FY 2011's six-month period. |
▪ | The average price per unit of gross contracts signed in FY 2012's second quarter was approximately $585,000, compared to approximately $677,000 in FY 2012's first quarter and $570,000 in FY 2011's second quarter. |
▪ | The Company's FY 2012 second-quarter net contracts of $754.7 million and 1,290 units rose by 51% and 47%, respectively, compared to FY 2011's second-quarter net contracts of $500.9 million and 879 units. |
▪ | On a per-community basis, FY 2012's second-quarter net signed contracts were 5.61 units per community, compared to second quarter totals of 4.35 in FY 2011, 4.32 units in FY 2010 and 2.33 units in FY 2009. FY 2012's second quarter total was the highest for any second quarter since FY 2006: However, it was still approximately 19% below the Company's 10-year historical second-quarter average per community of 6.92 units. |
▪ | The Company's FY 2012 six-month net contracts of $1.20 billion and 1,942 units increased by 48% and 36%, respectively, compared to net contracts of $808.1 million and 1,427 units in FY 2011's six-month period. |
▪ | The average price per unit of net contracts signed in FY 2012's second quarter was approximately $585,000, compared to approximately $682,000 in FY 2012's first quarter and $570,000 in FY 2011's second quarter. FY 2012's first quarter contracts were positively impacted by 16 contracts signed at an average price of $4.1 million at The Touraine, the Company's 22-unit boutique condominium building under construction on Manhattan's Upper East Side. Excluding the Touraine, the average price of net signed contracts in FY 2012's second quarter was down 2% sequentially, compared to $596,000 in FY 2012's first quarter. |
▪ | In FY 2012, second-quarter cancellations totaled 32. This compared to 43 in FY 2012's first quarter, and 55, 57, 36, and 33, respectively, in FY 2011's fourth, third, second and first quarters. |
▪ | FY 2012's second-quarter cancellation rate (current-quarter cancellations divided by current-quarter signed contracts) was 2.4%. This compared to 6.2% in FY 2012's first quarter, and 7.9%, 7.4%, 3.9%, and 5.7%, respectively, in FY 2011's fourth, third, second and first quarters. As a percentage of beginning-quarter backlog, FY 2012's second-quarter cancellation rate was 1.8%. This compared to 2.6% in FY 2012's first quarter, and 3.1%, 3.2%, 2.4% and 2.3%, respectively, in FY 2011's fourth, third, second and first quarters. |
▪ | In FY 2012, second-quarter-end backlog of $1.5 billion and 2,403 units increased 49% in dollars and 37% in units from FY 2011's second-quarter-end backlog of $1.0 billion and 1,760 units. |
▪ | The average price of FY 2012's second-quarter-end backlog units was $624,000, compared to $572,000 at FY 2011's second-quarter end. The average price of FY 2012's second-quarter end backlog was nearly identical to the average price of FY 2012's first-quarter end backlog of $626,000. |
▪ | In FY 2012's second quarter, unconsolidated entities in which the Company had an interest delivered $24.0 million of homes, compared to $52.3 million in the second quarter of FY 2011. In FY 2012's first six months, unconsolidated entities in which the Company had an interest delivered $47.5 million of homes, compared to $131.3 million in the same six-month period of FY 2011. The Company recorded its share of the results from these entities' operations in “Income (Loss) from Unconsolidated Entities” on the Company's Statement of Operations. |
▪ | In FY 2012's second quarter, unconsolidated entities in which the Company had an interest signed agreements for $38.2 million of homes, compared to $75.5 million in the second quarter of FY 2011. In FY 2012's first six months, unconsolidated entities in which the Company had an interest signed agreements for $59.7 million of homes, compared to $99.7 million in the same six-month period of FY 2011. |
▪ | In FY 2012's second quarter and first six months, the Company's Gibraltar Capital and Asset Management subsidiary reported pre-tax income of $5.2 million and $6.9 million respectively, compared to FY 2011's second quarter and first six month results of $0.9 million and $1.1 million. |
▪ | The Company ended its FY 2012 second quarter with $927 million in cash and marketable securities, compared to $719 million at 2012's first-quarter end and $1.25 billion at FY 2011's second-quarter end. The increase in cash between FY 2012's first and second quarters reflected the Company's issuance of $300 million of senior notes due in FY 2022, offset, in part, by the Company's use of $124 million for the purchase of land. At FY 2012's second-quarter end, it had $819 million available under its $885 million 12-bank credit facility, which matures in October 2014. |
▪ | The Company's Stockholders' Equity at FY 2012's second-quarter end increased to $2.63 billion, compared to $2.60 billion at FY 2012's first-quarter end. |
▪ | The Company ended FY 2012's second quarter with a net-debt-to-capital ratio(1) of 26.9%, compared to 25.0% at FY 2012's first-quarter end and 13.6% at FY 2011's second-quarter end. |
▪ | The Company ended FY 2012's second quarter with approximately 39,500 lots owned and optioned compared to 39,700 one quarter earlier, 35,900 one year earlier and 91,200 at its peak at FY 2006's second-quarter end. At 2012's second-quarter end, approximately 32,300 of these lots were owned, of which approximately 12,100 lots, including those in backlog, were substantially improved. |
▪ | The Company ended FY 2012's second quarter with 230 selling communities, compared to 228 at FY 2012's first-quarter end and 203 at FY 2011's second-quarter end. The Company now expects to end FY 2012 with between 230 to 245 selling communities, a slight decrease from its previous range of guidance: This is due to increased sales paces resulting in the sell-out of certain communities more quickly than previous projected. This compares to its peak of 325 communities at FY 2007's second-quarter end. |
▪ | Based on FY 2012's second-quarter-end backlog and the pace of activity at its communities, the Company currently estimates it will deliver between 2,700 and 3,200 homes in FY 2012. It believes the average delivered price for FY 2012's final two quarters will be between $560,000 and $580,000 per home. The Company expects to deliver approximately 10% more homes in FY 2012's fourth quarter than in FY 2012's third quarter. |
(1) | Net debt-to-capital is calculated as total debt minus mortgage warehouse loans minus cash and marketable securities, divided by total debt minus mortgage warehouse loans minus cash and marketable securities plus stockholders' equity. |
April 30, 2012 | October 31, 2011 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 709,038 | $ | 906,340 | |||
Marketable securities | 218,434 | 233,572 | |||||
Restricted cash | 47,398 | 19,760 | |||||
Inventory | 3,767,877 | 3,416,723 | |||||
Property, construction and office equipment, net | 100,724 | 99,712 | |||||
Receivables, prepaid expenses and other assets | 143,857 | 105,576 | |||||
Mortgage loans receivable | 50,527 | 63,175 | |||||
Customer deposits held in escrow | 31,068 | 14,859 | |||||
Investments in and advances to unconsolidated entities | 200,292 | 126,355 | |||||
Investment in non-performing loan portfolios and foreclosed real estate | 95,870 | 69,174 | |||||
$ | 5,365,085 | $ | 5,055,246 | ||||
LIABILITIES AND EQUITY | |||||||
Liabilities: | |||||||
Loans payable | $ | 103,880 | $ | 106,556 | |||
Senior notes | 1,791,942 | 1,490,972 | |||||
Mortgage company warehouse loan | 45,397 | 57,409 | |||||
Customer deposits | 128,921 | 83,824 | |||||
Accounts payable | 106,747 | 96,817 | |||||
Accrued expenses | 457,274 | 521,051 | |||||
Income taxes payable | 99,107 | 106,066 | |||||
Total liabilities | 2,733,268 | 2,462,695 | |||||
Equity: | |||||||
Stockholders’ Equity | |||||||
Common stock | 1,687 | 1,687 | |||||
Additional paid-in capital | 399,382 | 400,382 | |||||
Retained earnings | 2,248,337 | 2,234,251 | |||||
Treasury stock, at cost | (20,395 | ) | (47,065 | ) | |||
Accumulated other comprehensive loss | (3,382 | ) | (2,902 | ) | |||
Total stockholders' equity | 2,625,629 | 2,586,353 | |||||
Noncontrolling interest | 6,188 | 6,198 | |||||
Total equity | 2,631,817 | 2,592,551 | |||||
$ | 5,365,085 | $ | 5,055,246 |
Six Months Ended April 30, | Three Months Ended April 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Revenues | $ | 695,636 | $ | 653,791 | $ | 373,681 | $ | 319,675 | |||||||
Cost of revenues | 578,429 | 558,319 | 306,821 | 276,354 | |||||||||||
Selling, general and administrative | 137,893 | 128,301 | 68,256 | 67,050 | |||||||||||
Interest expense | — | 1,504 | — | 392 | |||||||||||
716,322 | 688,124 | 375,077 | 343,796 | ||||||||||||
Loss from operations | (20,686 | ) | (34,333 | ) | (1,396 | ) | (24,121 | ) | |||||||
Other: | |||||||||||||||
Income (loss) from unconsolidated entities | 13,676 | (22,345 | ) | 6,989 | (11,343 | ) | |||||||||
Interest and other | 16,251 | 8,147 | 10,056 | 3,980 | |||||||||||
Income (loss) before income tax benefit | 9,241 | (48,531 | ) | 15,649 | (31,484 | ) | |||||||||
Income tax benefit | (4,845 | ) | (31,175 | ) | (1,223 | ) | (10,711 | ) | |||||||
Net income (loss) | $ | 14,086 | $ | (17,356 | ) | $ | 16,872 | $ | (20,773 | ) | |||||
Income (loss) per share: | |||||||||||||||
Basic | $ | 0.08 | $ | (0.10 | ) | $ | 0.10 | $ | (0.12 | ) | |||||
Diluted | $ | 0.08 | $ | (0.10 | ) | $ | 0.10 | $ | (0.12 | ) | |||||
Weighted average number of shares: | |||||||||||||||
Basic | 166,652 | 166,794 | 166,994 | 166,910 | |||||||||||
Diluted | 167,821 | 166,794 | 168,535 | 166,910 |
Six Months Ended April 30, | Three Months Ended April 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Impairment charges (recoveries) recognized: | |||||||||||||||
Cost of sales | $ | 10,128 | $ | 18,048 | $ | 2,008 | $ | 12,922 | |||||||
Loss from unconsolidated entities | (1,621 | ) | 39,600 | (1,621 | ) | 19,600 | |||||||||
$ | 8,507 | $ | 57,648 | $ | 387 | $ | 32,522 | ||||||||
Depreciation and amortization | $ | 6,238 | $ | 7,403 | $ | 3,387 | $ | 3,659 | |||||||
Interest incurred | $ | 60,468 | $ | 58,434 | $ | 31,568 | $ | 28,718 | |||||||
Interest expense: | |||||||||||||||
Charged to cost of sales | $ | 33,989 | $ | 35,382 | $ | 17,668 | $ | 17,300 | |||||||
Directly charged to statement of operations | 1,504 | 392 | |||||||||||||
Charged to interest and other | 1,582 | 318 | 1,582 | 248 | |||||||||||
Interest reclassified to property, construction and office equipment | 3,000 | ||||||||||||||
Capitalized interest on investments in unconsolidated entities | 1,137 | 1,137 | |||||||||||||
Total | $ | 36,708 | $ | 40,204 | $ | 20,387 | $ | 17,940 | |||||||
Home sites controlled: | |||||||||||||||
Owned | 32,275 | 30,541 | |||||||||||||
Optioned | 7,202 | 5,394 | |||||||||||||
39,477 | 35,935 |
South: | Florida, North Carolina, South Carolina and Texas |
Three Months Ended April 30, | Three Months Ended April 30, | ||||||||||||
Units | $ (Millions) | ||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||
HOME BUILDING REVENUES | |||||||||||||
North | 200 | 167 | $ | 111.1 | $ | 84.6 | |||||||
Mid-Atlantic | 190 | 184 | 103.6 | 99.6 | |||||||||
South | 143 | 124 | 82.4 | 66.5 | |||||||||
West | 138 | 116 | 76.6 | 69.0 | |||||||||
Total consolidated | 671 | 591 | $ | 373.7 | $ | 319.7 | |||||||
CONTRACTS | |||||||||||||
North | 326 | 224 | $ | 189.8 | $ | 125.3 | |||||||
Mid-Atlantic | 374 | 281 | 206.4 | 154.6 | |||||||||
South | 251 | 219 | 161.6 | 128.4 | |||||||||
West | 339 | 155 | 196.9 | 92.6 | |||||||||
Total consolidated | 1,290 | 879 | $ | 754.7 | $ | 500.9 | |||||||
BACKLOG | |||||||||||||
North | 743 | 561 | $ | 488.9 | $ | 291.3 | |||||||
Mid-Atlantic | 674 | 583 | 395.2 | 344.3 | |||||||||
South | 574 | 402 | 362.2 | 228.9 | |||||||||
West | 412 | 214 | 252.2 | 141.9 | |||||||||
Total consolidated | 2,403 | 1,760 | $ | 1,498.5 | $ | 1,006.4 |
Six Months Ended April 30, | Six Months Ended April 30, | ||||||||||||
Units | $ (Millions) | ||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||
HOME BUILDING REVENUES | |||||||||||||
North | 337 | 316 | $ | 186.7 | $ | 167.1 | |||||||
Mid-Atlantic | 369 | 363 | 204.4 | 203.4 | |||||||||
South | 278 | 239 | 158.8 | 128.4 | |||||||||
West | 251 | 243 | 145.7 | 154.9 | |||||||||
Total consolidated | 1,235 | 1,161 | $ | 695.6 | $ | 653.8 | |||||||
CONTRACTS | |||||||||||||
North | 527 | 356 | $ | 368.3 | $ | 199.1 | |||||||
Mid-Atlantic | 556 | 471 | 310.7 | 263.3 | |||||||||
South | 410 | 345 | 257.8 | 197.6 | |||||||||
West | 449 | 255 | 262.6 | 148.1 | |||||||||
Total consolidated | 1,942 | 1,427 | $ | 1,199.4 | $ | 808.1 |
2012 | 2011 | 2012 | 2011 | ||||||||||
Units | Units | $(Mill) | $(Mill) | ||||||||||
Three months ended April 30, | |||||||||||||
Revenues | 25 | 63 | $ | 24.0 | $ | 52.3 | |||||||
Contracts | 42 | 83 | $ | 38.2 | $ | 75.5 | |||||||
Six months ended April 30, | |||||||||||||
Revenues | 53 | 171 | $ | 47.5 | $ | 131.3 | |||||||
Contracts | 67 | 111 | $ | 59.7 | $ | 99.7 | |||||||
Backlog at April 30, | 40 | 66 | $ | 33.2 | $ | 59.6 |