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 December 4, 2012 announcing its financial results for the twelve-month and three-month periods ended October 31, 2012. |
TOLL BROTHERS, INC. | ||||||
Dated: | December 4, 2012 | By: | Joseph R. Sicree | |||
Joseph R. Sicree | ||||||
Senior Vice President, | ||||||
Chief Accounting Officer |
FOR IMMEDIATE RELEASE | CONTACT: Frederick N. Cooper (215) 938-8312 |
December 4, 2012 | fcooper@tollbrothersinc.com |
Joseph R. Sicree (215) 938-8045 | |
jsicree@tollbrothersinc.com |
• | FY 2012's fourth quarter net income was $411.4 million, or $2.35 per share, compared to $15.0 million, or $0.09 per share in FY 2011's fourth quarter. Included in FY 2012's fourth quarter was a net tax benefit of $350.7 million, which included the reversal of $400.0 million of the Company's deferred tax asset valuation reserves against its deferred tax asset, offset by a tax provision of $49.3 million. |
• | Net income also included pre-tax inventory write-downs of $1.5 million and $0.7 million of cash recoveries of prior joint venture write-offs, compared to pre-tax inventory write-downs of $18.2 million and a $0.4 million pre-tax loss from early repurchase of debt in FY 2011's fourth quarter. |
• | Pre-tax income was $60.7 million, compared to $15.3 million in FY 2011's fourth quarter. |
• | Revenues of $632.8 million and homebuilding deliveries of 1,088 units rose 48% in dollars and 44% in units, compared to FY 2011's fourth quarter. |
• | Net signed contracts of $684.1 million and 1,098 units rose 75% in dollars and 70% in units, compared to FY 2011's fourth quarter. On a per-community basis, FY 2012's fourth-quarter net signed contracts of 4.86 units per community were the highest for any fourth quarter since FY 2005. |
• | Backlog of $1.67 billion and 2,569 units rose 70% in dollars and 54% in units, compared to FY 2011's fourth-quarter-end backlog. |
• | The Company's cancellation rate (current-quarter cancellations divided by current-quarter signed contracts) was 4.6%, compared to 7.9% in FY 2011's fourth quarter. |
• | The average price of homes delivered was $582,000, compared to $576,000 in FY 2012's third quarter and $565,000 in FY 2011's fourth quarter. |
• | Gross margin, excluding interest and write-downs, was 24.6%, compared to 24.2% in FY 2011's fourth quarter. |
• | SG&A as a percentage of revenue improved to 11.8%, compared to 16.0% in FY 2011's fourth quarter due primarily to higher revenues and an insurance reserve reversal of $8.0 million. |
• | The Company ended FY 2012 with 224 selling communities, compared to 226 at FY 2012's third-quarter end, and 215 at FYE 2011. At FYE 2012 the Company had approximately 40,400 lots owned and optioned, compared to approximately 39,200 at FY 2012's third-quarter end and approximately 37,500 one year ago. |
• | FY 2012 net income was $487.1 million, or $2.86 per share diluted, compared to FY 2011's net income of $39.8 million, or $0.24 per share diluted. Included in FY 2012's full year net income was a net tax benefit of $374.2 million, which included the reversal of $400.0 million of the Company's deferred tax asset valuation reserves against its deferred tax asset, offset by a tax provision of $25.8 million. |
• | Net income included pre-tax inventory write-downs of $14.7 million and $2.3 million of cash recoveries of prior joint venture write-offs, compared to pre-tax inventory write-downs of $92.7 million and a $3.8 million pre-tax loss from early repurchase of debt in FY 2011. FY 2011 net income also included a net tax benefit of $69.2 million. |
• | Pre-tax income was $112.9 million, compared to a pre-tax loss of $29.4 million in FY 2011. |
• | Revenues of $1.88 billion and homebuilding deliveries of 3,286 units rose 28% in dollars and 26% in units, compared to FY 2011. |
• | Net signed contracts of $2.56 billion and 4,159 units rose 59% in dollars and 49% in units, compared to FY 2011. On a per-community basis, FY 2012's net signed contracts of 18.2 units per community were the highest for any fiscal year since FY 2006. |
• | Gross margin, excluding interest and write-downs, was 24.0%, compared to 23.3% for FY 2011. |
• | SG&A as a percentage of revenue improved to 15.3% compared to 17.7% for FY 2011. |
▪ | FY 2012's fourth-quarter net income was $411.4 million, or $2.35 per share diluted, compared to FY 2011's fourth-quarter net income of $15.0 million, or $0.09 per share diluted. |
▪ | FY 2012's fourth quarter included a net tax benefit of $350.7 million, which included the reversal of $400.0 million of the Company's deferred tax asset valuation reserves against its deferred tax asset, offset by a tax provision of $49.3 million. This compared to a $0.2 million tax provision in FY 2011's fourth quarter. |
▪ | FY 2012's fourth-quarter pre-tax income was $60.7 million, compared to FY 2011's fourth-quarter pre-tax income of $15.3 million. FY 2012's fourth-quarter results included pre-tax write-downs of $1.5 million: $1.4 million of the write-downs was attributable to operating communities and $0.3 million to owned land for future communities, offset, in part, by recoveries of previously recognized write-downs of $0.2 million and by |
▪ | Excluding inventory write-downs and cash recoveries of prior joint venture write-offs, FY 2012's fourth-quarter pre-tax income was $61.6 million, compared to pre-tax income of $33.9 million in FY 2011's fourth quarter, excluding write-downs and debt retirement charges. |
▪ | FY 2012's fourth-quarter gross margin improved to 20.1% from 15.3% in FY 2011's fourth quarter. Excluding write-downs and interest, FY 2012's fourth-quarter gross margin improved to 24.6% from 24.2% in FY 2011's fourth quarter. For FY 2012, gross margin, excluding interest and write-downs, was 24.0%, compared to 23.3% for FY 2011. |
▪ | FY 2012's net income was $487.1 million, or $2.86 per share diluted, compared to FY 2011's net income of $39.8 million, or $0.24 per share diluted. |
▪ | FY 2012 included a net tax benefit of $374.2 million, which included the reversal of $400.0 million of the Company's deferred tax asset valuation reserves against its deferred tax asset, offset by a tax provision of $25.8 million. This compared to a $69.2 million net tax benefit in FY 2011. |
▪ | FY 2012's pre-tax income was $112.9 million, compared to FY 2011's pre-tax loss of $29.4 million. FY 2012's results included pre-tax write-downs of $14.7 million: $13.1 million of the write-downs was attributable to operating communities, $1.2 million to owned land for future communities and $0.5 million to land controlled for future communities, offset, in part, by $2.3 million of cash recoveries of prior joint venture write-offs. FY 2011's results included pre-tax write-downs totaling $92.7 million and pre-tax charges of $3.8 million due to early retirement of debt. |
▪ | Excluding write-downs and cash recoveries of prior joint venture write-offs, FY 2012's pre-tax income was $125.4 million, compared to pre-tax income of $67.2 million for FY 2011. |
▪ | Interest included in cost of sales was 4.3% of revenues in FY 2012's fourth quarter, compared to 4.7% of revenues in FY 2012's third quarter, and down from 5.0% in FY 2011's fourth quarter. |
▪ | FY 2012's fourth-quarter revenues and home building deliveries of $632.8 million and 1,088 units increased 48% in dollars and 44% in units, compared to FY 2011's fourth-quarter results of $427.8 million and 757 units. The average price of homes delivered was $582,000, compared to $576,000 in FY 2012's third quarter and $565,000 in FY 2011's fourth quarter. |
• | For FY 2012, home building revenues of $1.88 billion and 3,286 units increased 28% in dollars and 26% in units, compared to FY 2011's results of $1.48 billion and 2,611 units. |
▪ | In FY 2012's fourth quarter, unconsolidated entities in which the Company had an interest delivered $13.6 million of homes, compared to $34.8 million in the fourth quarter of FY 2011. In FY 2012, unconsolidated entities in which the Company had an interest delivered $89.9 million of homes, compared to $233.4 million in 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. |
▪ | The Company signed gross contracts of $715.4 million and 1,151 units in FY 2012's fourth quarter, an increase of 70% and 65%, respectively, compared to $421.4 million and 699 gross contracts signed in FY 2011's fourth quarter. The Company signed gross contracts of $2.67 billion and 4,341 units in FY 2012, an increase of 56% in dollars and 46% in units, compared to the $1.71 billion and 2,965 gross contracts signed in FY 2011. |
▪ | FY 2012's fourth-quarter net signed contracts of $684.1 million and 1,098 rose 75% in dollars and 70% in units, compared to FY 2011's fourth-quarter net signed contracts of $390.0 million and 644 units. The Company's FY 2012 net contracts of $2.56 billion and 4,159 units increased by 59% and 49%, respectively, compared to net contracts of $1.60 billion and 2,784 units in FY 2011. |
▪ | On a per-community basis, FY 2012's fourth-quarter net signed contracts of 4.86 units per community were 60% greater than FY 2011's fourth-quarter total of 3.04; 65% greater than FY 2010's fourth-quarter total of 2.94 units; 37% greater than FY 2009's fourth-quarter total of 3.56 units; and 161% greater than FY 2008's fourth-quarter total of 1.86; however, they were still below the Company's historical fourth-quarter average, dating back to 1990, of 5.82 units per community. On a per-community basis, FY 2012's net signed contracts of 18.2 units per community were the highest for any fiscal year since FY 2006. |
▪ | The average price per unit of net contracts signed in FY 2012's fourth quarter was $623,000, compared to $603,000 in FY 2012's third quarter and $606,000 in FY 2011's fourth quarter. |
▪ | FY 2012's fourth-quarter cancellation rate (current-quarter cancellations divided by current-quarter signed contracts) was 4.6%, compared to 7.9% in FY 2011's fourth quarter. As a percentage of beginning-quarter backlog, FY 2012's fourth-quarter cancellation rate was 2.1%, compared to 3.1% in FY 2011's fourth quarter. |
▪ | The Company ended FY 2012 with a backlog of approximately $1.67 billion and 2,569 units, which increased 70% in dollars and 54% in units, compared to FY 2011's year-end backlog of $981.1 million and 1,667 units. |
• | In FY 2012's fourth quarter, SG&A as a percentage of revenue improved to 11.8%, compared to 16.0% in FY 2011's fourth quarter, due primarily to higher revenues and an insurance reserve reversal of $8.0 million. For FY 2012, SG&A as a percentage of revenue improved to 15.3% compared to 17.7% for FY 2011. |
▪ | At October 31, 2012, unconsolidated entities in which the Company had an interest had a backlog of $27.2 million, compared to $21.0 million at October 31, 2011. In FY 2012's fourth quarter and twelve-month periods, such unconsolidated entities produced $16.4 million and $96.1 million of contracts, respectively, compared to $29.6 million and $163.1 million, respectively, in the previous year. |
▪ | The Company ended FY 2012 with $1.22 billion of cash and marketable securities, compared to $877.4 million at FY 2012's third-quarter end and $1.14 billion at FYE 2011. The Company used $92.0 million on land purchases in FY 2012's fourth quarter. At FYE 2012, the Company also had $814.9 million available under its $885 million 12-bank credit facility, which matures in October 2014. |
▪ | The Company's Stockholders' Equity at FYE 2012 was $3.12 billion, compared to $2.59 billion at FYE 2011. |
▪ | The Company ended FY 2012 with a net-debt-to-capital ratio(1) of 23.6%, compared to 27.5% at FY 2012's third-quarter end and 15.0% at FYE 2011. |
▪ | The Company ended FY 2012 with approximately 40,400 lots owned and optioned, compared to 39,200 one quarter earlier, 37,500 one year earlier, and 91,200 at its peak at FY 2006's second-quarter end. This is exclusive of approximately 800 lots the Company expects to buy from its Baker Ranch joint venture, the operating terms of which were finalized shortly after the quarter ended. At FYE 2012, approximately 31,300 of the 40,400 lots were owned, of which approximately 12,700 lots, including those in backlog, were substantially improved. |
▪ | In the fourth quarter of FY 2012, the Company purchased 1,899 lots for approximately $92.0 million, and, for the full fiscal year, purchased 5,877 lots for approximately $456.5 million. |
▪ | The Company expects to end FY 2013 with between 225 and 255 selling communities, compared to its peak of 325 communities at FY 2007's second-quarter end. The Company ended FY 2012 with 224 selling communities, compared to 226 at FY 2012's third-quarter end and 215 at FYE 2011. |
▪ | Based on FYE 2012's backlog and the pace of activity at its communities, the Company currently estimates it will deliver between 3,600 and 4,400 homes in FY 2013. It believes the average delivered price for FY 2013 will be between $595,000 and $630,000 per home. |
• | In FY 2012's fourth quarter and fiscal year, the Company's Gibraltar Capital and Asset Management subsidiary reported a pre-tax loss of $0.4 million and pre-tax income of $7.2 million respectively, compared to FY 2011's fourth quarter and fiscal-year pre-tax income of $1.7 million and $6.9 million, respectively. |
(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. |
October 31, 2012 | October 31, 2011 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 778,824 | $ | 906,340 | |||
Marketable securities | 439,068 | 233,572 | |||||
Restricted cash | 47,276 | 19,760 | |||||
Inventory | 3,761,187 | 3,416,723 | |||||
Property, construction and office equipment, net | 106,214 | 99,712 | |||||
Receivables, prepaid expenses and other assets | 148,315 | 105,576 | |||||
Mortgage loans receivable | 86,386 | 63,175 | |||||
Customer deposits held in escrow | 29,579 | 14,859 | |||||
Investments in and advances to unconsolidated entities | 330,617 | 126,355 | |||||
Investment in non-performing loan portfolios and foreclosed real estate | 95,522 | 69,174 | |||||
Deferred tax assets | 364,125 | ||||||
$ | 6,187,113 | $ | 5,055,246 | ||||
LIABILITIES AND EQUITY | |||||||
Liabilities: | |||||||
Loans payable | $ | 99,817 | $ | 106,556 | |||
Senior notes | 2,080,463 | 1,490,972 | |||||
Mortgage company warehouse loan | 72,664 | 57,409 | |||||
Customer deposits | 142,977 | 83,824 | |||||
Accounts payable | 99,911 | 96,817 | |||||
Accrued expenses | 476,350 | 521,051 | |||||
Income taxes payable | 87,060 | 106,066 | |||||
Total liabilities | 3,059,242 | 2,462,695 | |||||
Equity: | |||||||
Stockholders’ Equity | |||||||
Common stock | 1,687 | 1,687 | |||||
Additional paid-in capital | 404,418 | 400,382 | |||||
Retained earnings | 2,721,397 | 2,234,251 | |||||
Treasury stock, at cost | (983 | ) | (47,065 | ) | |||
Accumulated other comprehensive loss | (4,819 | ) | (2,902 | ) | |||
Total stockholders' equity | 3,121,700 | 2,586,353 | |||||
Noncontrolling interest | 6,171 | 6,198 | |||||
Total equity | 3,127,871 | 2,592,551 | |||||
$ | 6,187,113 | $ | 5,055,246 |
Twelve Months Ended October 31, | Three Months Ended October 31, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Revenues | $ | 1,882,781 | $ | 1,475,881 | $ | 632,826 | $ | 427,785 | |||||||
Cost of revenues | 1,532,095 | 1,260,770 | 505,738 | 362,504 | |||||||||||
Selling, general and administrative expenses | 287,257 | 261,355 | 74,472 | 68,449 | |||||||||||
Interest expense | — | 1,504 | — | — | |||||||||||
1,819,352 | 1,523,629 | 580,210 | 430,953 | ||||||||||||
Income (loss) from operations | 63,429 | (47,748 | ) | 52,616 | (3,168 | ) | |||||||||
Other: | |||||||||||||||
Income (loss) from unconsolidated entities | 23,592 | (1,194 | ) | 4,244 | 9,811 | ||||||||||
Other income - net | 25,921 | 23,403 | 3,889 | 9,047 | |||||||||||
Expenses related to early retirement of debt | (3,827 | ) | (413 | ) | |||||||||||
Income (loss) before income taxes | 112,942 | (29,366 | ) | 60,749 | 15,277 | ||||||||||
Income tax (benefit) provision | (374,204 | ) | (69,161 | ) | (350,668 | ) | 234 | ||||||||
Net income | $ | 487,146 | $ | 39,795 | $ | 411,417 | $ | 15,043 | |||||||
Income per share: | |||||||||||||||
Basic | $ | 2.91 | $ | 0.24 | $ | 2.44 | $ | 0.09 | |||||||
Diluted | $ | 2.86 | $ | 0.24 | $ | 2.35 | $ | 0.09 | |||||||
Weighted-average number of shares: | |||||||||||||||
Basic | 167,346 | 167,140 | 168,416 | 166,896 | |||||||||||
Diluted | 170,154 | 168,381 | 174,775 | 167,525 |
Twelve Months Ended October 31, | Three Months Ended October 31, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Impairment charges (recoveries) recognized: | |||||||||||||||
Cost of sales | $ | 14,739 | $ | 51,837 | $ | 1,491 | $ | 16,976 | |||||||
Income (loss) from unconsolidated entities | (2,310 | ) | 40,870 | (689 | ) | 1,270 | |||||||||
$ | 12,429 | $ | 92,707 | $ | 802 | $ | 18,246 | ||||||||
Depreciation and amortization | $ | 13,468 | $ | 13,370 | $ | 3,750 | $ | 2,710 | |||||||
Interest incurred | $ | 125,783 | $ | 114,761 | $ | 32,756 | $ | 27,941 | |||||||
Interest expense: | |||||||||||||||
Charged to cost of sales | $ | 87,117 | $ | 77,623 | $ | 27,294 | $ | 21,296 | |||||||
Charged to selling, general and administrative expense | 1,504 | ||||||||||||||
Charged to other income - net | 3,404 | 1,155 | 1,740 | 294 | |||||||||||
Interest reclassified to property, construction and office equipment | 3,000 | ||||||||||||||
Capitalized interest on investments in unconsolidated entities | 3,438 | 1,178 | |||||||||||||
Total | $ | 93,959 | $ | 83,282 | $ | 30,212 | $ | 21,590 | |||||||
Home sites controlled: | |||||||||||||||
Owned | 31,327 | 30,199 | |||||||||||||
Optioned | 9,023 | 7,298 | |||||||||||||
40,350 | 37,497 |
South: | Florida, North Carolina, South Carolina and Texas |
Three Months Ended October 31, | Three Months Ended October 31, | ||||||||||||
Units | $ (Millions) | ||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||
HOME BUILDING REVENUES | |||||||||||||
North | 274 | 205 | $ | 149.9 | $ | 108.0 | |||||||
Mid-Atlantic | 366 | 262 | 204.4 | 148.7 | |||||||||
South | 182 | 159 | 110.8 | 87.7 | |||||||||
West | 266 | 131 | 167.7 | 83.4 | |||||||||
Total consolidated | 1,088 | 757 | $ | 632.8 | $ | 427.8 | |||||||
CONTRACTS | |||||||||||||
North | 239 | 179 | $ | 139.2 | $ | 115.4 | |||||||
Mid-Atlantic | 303 | 225 | 171.1 | 125.0 | |||||||||
South | 259 | 133 | 169.1 | 81.9 | |||||||||
West | 297 | 107 | 204.7 | 67.7 | |||||||||
Total consolidated | 1,098 | 644 | $ | 684.1 | $ | 390.0 | |||||||
BACKLOG | |||||||||||||
North | 655 | 553 | $ | 449.2 | $ | 307.4 | |||||||
Mid-Atlantic | 658 | 487 | 386.2 | 288.9 | |||||||||
South | 749 | 442 | 483.5 | 263.2 | |||||||||
West | 507 | 185 | 351.0 | 121.6 | |||||||||
Total consolidated | 2,569 | 1,667 | $ | 1,669.9 | $ | 981.1 |
Twelve Months Ended October 31, | Twelve Months Ended October 31, | ||||||||||||
Units | $ (Millions) | ||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||
HOME BUILDING REVENUES | |||||||||||||
North | 891 | 718 | $ | 513.7 | $ | 381.6 | |||||||
Mid-Atlantic | 1,025 | 887 | 564.5 | 499.7 | |||||||||
South | 626 | 522 | 366.7 | 285.0 | |||||||||
West | 744 | 484 | 437.9 | 309.6 | |||||||||
Total consolidated | 3,286 | 2,611 | $ | 1,882.8 | $ | 1,475.9 | |||||||
CONTRACTS | |||||||||||||
North | 993 | 750 | $ | 655.6 | $ | 429.6 | |||||||
Mid-Atlantic | 1,196 | 899 | 661.6 | 504.3 | |||||||||
South | 933 | 668 | 587.0 | 388.5 | |||||||||
West | 1,037 | 467 | 653.7 | 282.4 | |||||||||
Total consolidated | 4,159 | 2,784 | $ | 2,557.9 | $ | 1,604.8 |
2012 | 2011 | 2012 | 2011 | ||||||||||
Units | Units | $(Mill) | $(Mill) | ||||||||||
Three months ended October 31, | |||||||||||||
Revenues | 14 | 42 | $ | 13.6 | $ | 34.8 | |||||||
Contracts | 17 | 33 | $ | 16.4 | $ | 29.6 | |||||||
Twelve months ended October 31, | |||||||||||||
Revenues | 96 | 284 | $ | 89.9 | $ | 233.4 | |||||||
Contracts | 106 | 184 | $ | 96.1 | $ | 163.1 | |||||||
Backlog at October 31, | 36 | 26 | $ | 27.2 | $ | 21.0 |