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 February 23, 2016 announcing its financial results for the three-month period ended January 31, 2016. |
TOLL BROTHERS, INC. | ||||||
Dated: | February 23, 2016 | By: | /s/ Joseph R. Sicree | |||
Joseph R. Sicree Senior Vice President, Chief Accounting Officer |
FOR IMMEDIATE RELEASE | CONTACT: Frederick N. Cooper (215) 938-8312 |
February 23, 2016 | fcooper@tollbrothersinc.com |
• | FY 2016’s first quarter net income was $73.2 million, or $0.40 per share, compared to net income of $81.3 million, or $0.44 per share, in FY 2015’s first quarter. |
• | Pre-tax income was $116.8 million, compared to pre-tax income of $124.0 million in FY 2015’s first quarter. FY 2016’s first quarter results included pre-tax inventory write-downs totaling $1.3 million, compared to $1.1 million in FY 2015’s first quarter. |
• | Revenues of $928.6 million and home building deliveries of 1,063 units rose 9% in dollars and declined 3% in units, compared to FY 2015’s first quarter. The average price of homes delivered was $873,500, compared to $782,300 in FY 2015’s first quarter. |
• | Net signed contracts of $1.09 billion and 1,250 units rose 24% in dollars and 18% in units, compared to FY 2015’s first quarter. The average price of net signed contracts was $869,600, compared to $821,500 in FY 2015’s first quarter. |
• | Backlog of $3.66 billion and 4,251 units rose 34% in dollars and 16% in units, compared to FY 2015’s first-quarter end backlog. The average price of homes in backlog was $861,600, compared to $750,300 at FY 2015’s first-quarter end. |
• | Gross margin, excluding interest and write-downs, was 26.9%, compared to 27.3% in FY 2015’s first quarter. |
• | SG&A leverage (SG&A as a percentage of revenue) was 13.1%, compared to 12.5% in FY 2015’s first quarter. |
• | Income from operations was 10.2% of revenue, compared to 11.4% of revenue in FY 2015’s first quarter. |
• | Other income and Income from unconsolidated entities totaled $22.4 million, compared to $26.9 million in FY 2015’s first quarter. |
• | The Company ended its first quarter with 291 selling communities, compared to 288 at FYE 2015, and 258 at FY 2015’s first-quarter end. |
• | At FY 2016’s first-quarter end, the Company had approximately 43,800 lots owned and optioned, compared to approximately 44,300 at FYE 2015 and approximately 45,300 one year ago. |
• | The Company ended FY 2016 with $336.2 million in cash, compared to $929.0 million of cash and marketable securities at FYE 2015 and $510.9 million in cash and marketable securities at FY 2015’s first-quarter end. At FYE 2016’s first-quarter end, the Company had $926.7 million available under its $1.035 billion 15-bank credit facility, which matures in August 2018. |
• | During the first quarter of FY 2016, the Company repurchased approximately 4.8 million shares of its common stock at an average price of $31.48, for a total purchase price of $150.1 million. Additionally, since the end of its first quarter, the Company has repurchased approximately 933,000 shares of its common stock at an average price of $26.83, for a total purchase price of $25.0 million. |
• | In updating its guidance, the Company now expects to deliver between 5,700 and 6,400 homes in FY 2016 at an average price of $810,000 to $850,000. This compares to 5,525 deliveries in FY 2015 at an average price of $755,000. This translates to projected revenues of between $4.6 billion and $5.4 billion in FY 2016, compared to $4.17 billion in FY 2015. |
• | The Company projects full FY 2016 gross margins, excluding interest and write-downs, of approximately 25.8% to 26.2%, which is consistent with FY 2015. Interest in cost of sales is projected to be approximately 3.1% for FY 2016, compared to 3.4% in FY 2015. |
• | FY 2016’s first-quarter net income was $73.2 million, or $0.40 per share diluted, compared to FY 2015’s first-quarter net income of $81.3 million, or $0.44 per share diluted. |
• | FY 2016’s first-quarter pre-tax income was $116.8 million, compared to FY 2015 first-quarter pre-tax income of $124.0 million. FY 2016’s first-quarter results included pre-tax inventory write-downs totaling $1.3 million ($0.6 million attributable to an operating community and $0.7 million attributable to future communities). FY 2015’s first-quarter results included pre-tax inventory write-downs of $1.1 million ($0.9 million attributable to an operating community and $0.2 million attributable to future communities). |
• | FY 2016’s first-quarter total revenues of $928.6 million and 1,063 units increased 9% in dollars and declined 3% in units, compared to FY 2015’s first-quarter total revenues of $853.5 million and 1,091 units. |
• | The Company’s FY 2016 first-quarter net signed contracts of $1.09 billion and 1,250 units, increased 24% in dollars and 18% in units, compared to FY 2015’s first-quarter net signed contracts of $873.2 million and 1,063 units. |
• | On a per-community basis, FY 2016’s first-quarter net signed contracts was 4.34 units per community, compared to first quarter totals of 4.09 in FY 2015, 3.95 in FY 2014, 4.34 in FY 2013, and 2.86 in FY 2012. |
• | In FY 2016, first-quarter-end backlog of $3.66 billion and 4,251 units increased 34% in dollars and 16% in units, compared to FY 2015’s first-quarter-end backlog of $2.74 billion and 3,651 units. |
• | Excluding write-downs and interest, FY 2016’s first-quarter gross margin was 26.9%, compared to 27.3% in FY 2015’s first quarter. FY 2016’s first-quarter gross margin, including write-downs and interest, was 23.3% versus 23.8% in FY 2015’s first quarter. |
• | Interest included in cost of sales was 3.4% of revenue in FY 2016’s first quarter, compared to 3.3% in FY 2015’s first quarter. |
• | SG&A as a percentage of revenue was 13.1%, compared to 12.5% in FY 2015’s first quarter. |
• | Income from operations of $94.5 million represented 10.2% of revenues in FY 2016’s first quarter, compared to $97.1 million and 11.4% of revenues in FY 2015’s first quarter. |
• | Other income and Income from unconsolidated entities in FY 2016’s first quarter totaled $22.4 million, compared to $26.9 million in FY 2015’s same quarter, which included an $8.1 million gain from the sale of home security accounts to a third party by the Company’s wholly-owned Westminster Security Company. |
• | FY 2016’s first-quarter cancellation rate (current-quarter cancellations divided by current-quarter signed contracts) was 7.5%, of which approximately 1.4% was attributable to Porter Ranch, compared to 5.6% in FY 2015’s first quarter. As a percentage of beginning-quarter backlog, FY 2016’s first-quarter cancellation rate was 2.5%, compared to 1.7% in FY 2015’s first quarter |
• | In FY 2016’s first quarter, unconsolidated entities in which the Company had an interest delivered 19 units totaling $16.0 million of homes, compared to 27 units totaling $19.3 million of homes in the first quarter of FY 2015. The Company recorded its share of the results from these entities’ operations in “Income from Unconsolidated Entities” on the Company’s Statements of Operations. |
• | In FY 2016’s first quarter, unconsolidated entities in which the Company had an interest signed 30 contracts for $47.7 million, compared to 20 contracts for $30.7 million in FY 2015’s first quarter. |
• | At January 31, 2016, unconsolidated entities in which the Company had an interest had a backlog of $498.2 million and 197 units, compared to $295.8 million and 128 units at January 31, 2015. |
• | The Company ended its FY 2016 first quarter with $336.2 million in cash, compared to $929.0 million in cash and marketable securities at FYE 2015, and $510.9 million in cash and marketable securities at FY 2015’s first-quarter end. At FY 2016’s first-quarter end, the Company had $926.7 million available under its $1.035 billion, 15-bank credit facility, which matures in August 2018. |
• | During the first quarter of FY 2016, the Company repurchased approximately 4.8 million shares of its common stock at an average price of $31.48 for a total purchase price of $150.1 million. Additionally, since the end of its first quarter, the Company repurchased approximately 933,000 shares of its common stock at an average price of $26.83 for a total purchase price of $25.0 million. |
• | The Company’s Stockholders’ Equity at FY 2016’s first-quarter end increased 5% to $4.15 billion, compared to $3.96 billion at FY 2015’s first-quarter end. |
• | The Company ended its FY 2016 first quarter with a net debt-to-capital ratio(1) of 41.7%, compared to 39.5% at FYE 2015 and 41. 4% at FY 2015’s first-quarter end. |
• | The Company ended FY 2016’s first quarter with approximately 43,800 lots owned and optioned, compared to 44,300 one quarter earlier, and 45,300 one year earlier. Approximately 35,600 of these 43,800 lots were owned, of which approximately 17,600 lots, including those in backlog, were substantially improved. |
• | In the first quarter of FY 2016, the Company purchased 721 lots for $112.4 million. |
• | The Company ended FY 2016’s first quarter with 291 selling communities, compared to 288 at FYE 2015 and 258 at FY 2015’s first-quarter end. |
• | Based on FY 2016’s first-quarter-end backlog and the pace of activity at its communities, the Company now estimates it will deliver between 5,700 and 6,400 homes in FY 2016, compared to previous guidance of 5,600 to 6,600 units. It now believes the average delivered price for FY 2016 will be between $810,000 and $850,000 per home. This translates to projected revenues of between $4.6 billion and $5.4 billion in FY 2016, compared to $4.17 billion in FY 2015. |
• | In the second quarter of FY 2016, the Company projects delivering approximately 28% of the dollar value of its first-quarter-end backlog at an average price of between $830,000 and $845,000. |
• | The Company projects full FY 2016 gross margins, excluding interest and write-downs, of approximately 25.8% to 26.2%, compared to 25.9% in FY 2015. Interest in cost of sales is projected to be approximately 3.1% for FY 2016, compared to 3.4% in FY 2015. |
• | The Company reaffirms its guidance that SG&A as a percentage of revenue will trend down each quarter and will be approximately 10.1% to 10.3% of revenues for FY 2016, compared to 10.9% of revenues in FY 2015. |
• | For the full FY 2016, the Company is narrowing its guidance for Other income and Income from unconsolidated entities to a range of $105 to $130 million. Approximately 45% of that will occur in the fourth quarter and is associated with New York City joint venture deliveries. |
• | In FY 2016’s first quarter, Gibraltar Capital and Asset Management, the Company’s wholly owned subsidiary that invests in distressed loans and real estate, reported pre-tax income of $2.4 million, compared to $1.0 million of income in FY 2015’s first 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. |
January 31, 2016 | October 31, 2015 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 336,244 | $ | 918,993 | |||
Marketable securities | 10,001 | ||||||
Restricted cash | 29,350 | 16,795 | |||||
Inventory | 7,180,050 | 6,997,516 | |||||
Property, construction and office equipment, net | 134,746 | 136,755 | |||||
Receivables, prepaid expenses and other assets | 293,467 | 284,130 | |||||
Mortgage loans held for sale | 73,145 | 123,175 | |||||
Customer deposits held in escrow | 58,302 | 56,105 | |||||
Investments in unconsolidated entities | 414,864 | 412,860 | |||||
Investments in foreclosed real estate and distressed loans | 48,576 | 51,730 | |||||
Deferred tax assets, net of valuation allowances | 194,693 | 198,455 | |||||
$ | 8,763,437 | $ | 9,206,515 | ||||
LIABILITIES AND EQUITY | |||||||
Liabilities: | |||||||
Loans payable | $ | 615,298 | $ | 1,000,439 | |||
Senior notes | 2,690,889 | 2,689,801 | |||||
Mortgage company loan facility | 63,907 | 100,000 | |||||
Customer deposits | 301,282 | 284,309 | |||||
Accounts payable | 264,452 | 236,953 | |||||
Accrued expenses | 607,077 | 608,066 | |||||
Income taxes payable | 64,567 | 58,868 | |||||
Total liabilities | 4,607,472 | 4,978,436 | |||||
Equity: | |||||||
Stockholders’ Equity | |||||||
Common stock | 1,779 | 1,779 | |||||
Additional paid-in capital | 718,412 | 728,125 | |||||
Retained earnings | 3,668,382 | 3,595,202 | |||||
Treasury stock, at cost | (235,654 | ) | (100,040 | ) | |||
Accumulated other comprehensive loss | (2,770 | ) | (2,509 | ) | |||
Total stockholders' equity | 4,150,149 | 4,222,557 | |||||
Noncontrolling interest | 5,816 | 5,522 | |||||
Total equity | 4,155,965 | 4,228,079 | |||||
$ | 8,763,437 | $ | 9,206,515 |
Three Months Ended January 31, | |||||||
2016 | 2015 | ||||||
Revenues | $ | 928,566 | $ | 853,452 | |||
Cost of revenues | 712,311 | 650,032 | |||||
Selling, general and administrative expenses | 121,796 | 106,314 | |||||
834,107 | 756,346 | ||||||
Income from operations | 94,459 | 97,106 | |||||
Other: | |||||||
Income from unconsolidated entities | 8,638 | 4,901 | |||||
Other income - net | 13,720 | 22,016 | |||||
Income before income taxes | 116,817 | 124,023 | |||||
Income tax provision | 43,637 | 42,698 | |||||
Net income | $ | 73,180 | $ | 81,325 | |||
Income per share: | |||||||
Basic | $ | 0.42 | $ | 0.46 | |||
Diluted | $ | 0.40 | $ | 0.44 | |||
Weighted-average number of shares: | |||||||
Basic | 174,205 | 176,076 | |||||
Diluted | 182,391 | 184,107 |
Three Months Ended January 31, | |||||||
2016 | 2015 | ||||||
Impairment charges recognized: | |||||||
Cost of sales - land owned/controlled for future communities | $ | 681 | $ | 244 | |||
Cost of sales - operating communities | 600 | 900 | |||||
$ | 1,281 | $ | 1,144 | ||||
Depreciation and amortization | $ | 5,727 | $ | 5,809 | |||
Interest incurred | $ | 40,107 | $ | 40,504 | |||
Interest expense: | |||||||
Charged to cost of sales | $ | 32,023 | $ | 28,377 | |||
Charged to other income - net | 275 | 1,328 | |||||
$ | 32,298 | $ | 29,705 | ||||
Home sites controlled: | |||||||
Owned | 35,639 | 36,142 | |||||
Optioned | 8,180 | 9,158 | |||||
43,819 | 45,300 |
January 31, 2016 | October 31, 2015 | ||||||
Land and land development costs | $ | 2,313,150 | $ | 2,476,008 | |||
Construction in progress | 4,286,082 | 3,977,542 | |||||
Sample homes | 398,247 | 349,481 | |||||
Land deposits and costs of future development | 160,399 | 173,879 | |||||
Other | 22,172 | 20,606 | |||||
$ | 7,180,050 | $ | 6,997,516 |
North: | Connecticut, Illinois, Massachusetts, Michigan, Minnesota, New Jersey and New York |
Mid-Atlantic: | Delaware, Maryland, Pennsylvania and Virginia |
South: | Florida, North Carolina and Texas |
West: | Arizona, Colorado, Nevada, and Washington |
California: | California |
Three Months Ended January 31, | |||||||||||||||||||||
Units | $ (Millions) | Average Price Per Unit $ | |||||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||
HOME BUILDING REVENUES | |||||||||||||||||||||
North | 180 | 210 | $ | 120.8 | $ | 132.4 | $ | 671,200 | $ | 630,600 | |||||||||||
Mid-Atlantic | 279 | 262 | 169.8 | 163.4 | 608,600 | 623,600 | |||||||||||||||
South | 198 | 236 | 146.8 | 161.9 | 741,400 | 685,900 | |||||||||||||||
West | 202 | 180 | 137.3 | 122.4 | 679,500 | 679,700 | |||||||||||||||
California | 159 | 155 | 216.9 | 165.6 | 1,364,200 | 1,068,300 | |||||||||||||||
Traditional Home Building | 1,018 | 1,043 | 791.6 | 745.7 | 777,600 | 714,900 | |||||||||||||||
City Living | 45 | 48 | 137.0 | 107.8 | 3,044,000 | 2,246,200 | |||||||||||||||
Total consolidated | 1,063 | 1,091 | $ | 928.6 | $ | 853.5 | $ | 873,500 | $ | 782,300 | |||||||||||
CONTRACTS | |||||||||||||||||||||
North | 244 | 177 | $ | 172.6 | $ | 110.6 | $ | 707,400 | $ | 625,100 | |||||||||||
Mid-Atlantic | 300 | 224 | 187.1 | 147.7 | 623,600 | 659,500 | |||||||||||||||
South | 210 | 199 | 166.9 | 169.3 | 794,900 | 850,700 | |||||||||||||||
West | 281 | 219 | 200.2 | 148.5 | 712,500 | 678,100 | |||||||||||||||
California | 162 | 225 | 253.0 | 253.4 | 1,561,900 | 1,126,000 | |||||||||||||||
Traditional Home Building | 1,197 | 1,044 | 979.8 | 829.5 | 818,600 | 794,600 | |||||||||||||||
City Living | 53 | 19 | 107.2 | 43.7 | 2,021,500 | 2,301,900 | |||||||||||||||
Total consolidated | 1,250 | 1,063 | $ | 1,087.0 | $ | 873.2 | $ | 869,600 | $ | 821,500 | |||||||||||
BACKLOG | |||||||||||||||||||||
North | 954 | 845 | $ | 671.0 | $ | 542.8 | $ | 703,400 | $ | 642,400 | |||||||||||
Mid-Atlantic | 832 | 792 | 536.2 | 503.9 | 644,500 | 636,200 | |||||||||||||||
South | 836 | 926 | 689.3 | 730.6 | 824,500 | 789,000 | |||||||||||||||
West | 895 | 628 | 636.5 | 418.8 | 711,200 | 666,900 | |||||||||||||||
California | 612 | 345 | 933.9 | 392.3 | 1,526,000 | 1,137,200 | |||||||||||||||
Traditional Home Building | 4,129 | 3,536 | 3,466.9 | 2,588.4 | 839,600 | 732,000 | |||||||||||||||
City Living | 122 | 115 | 195.6 | 151.1 | 1,602,900 | 1,313,700 | |||||||||||||||
Total consolidated | 4,251 | 3,651 | $ | 3,662.5 | $ | 2,739.5 | $ | 861,600 | $ | 750,300 |
Units | $ (Millions) | Average Price Per Unit $ | |||||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||
Three months ended January 31, | |||||||||||||||||||||
Revenues | 19 | 27 | $ | 16.0 | $ | 19.3 | $ | 844,300 | $ | 714,600 | |||||||||||
Contracts | 30 | 20 | $ | 47.7 | $ | 30.7 | $ | 1,588,800 | $ | 1,533,700 | |||||||||||
Backlog at January 31, | 197 | 128 | $ | 498.2 | $ | 295.8 | $ | 2,528,900 | $ | 2,311,200 |