EX-99 3 exh99-1.txt EXHIBIT 99.1 -------------------------------------------------------------------------------- [GRAPHIC OMITTED][GRAPHIC OMITTED] -------------------------------------------------------------------------------- FOR IMMEDIATE RELEASE CONTACT: Frederick N. Cooper (215) 938-8312 August 26, 2003 fcooper@tollbrothersinc.com Joseph R. Sicree (215) 938-8045 jsicree@tollbrothersinc.com TOLL BROTHERS' RECORD 3RD QTR EPS OF $0.90 IS UP 29% VS 2002 ------------------------------------------------------------ 3RD QTR CONTRACTS RISE 35% VS 2002 TO SET NEW SINGLE QTR RECORD --------------------------------------------------------------- ALL-TIME RECORD BACKLOG AT 3RD QTR-END GROWS 31% ------------------------------------------------ RECORD 3RD QTR REVENUES INCREASE 19% ------------------------------------ Huntingdon Valley, PA, August 26, 2003 -- 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, contracts and backlog for the periods ended July 31, 2003. The Company's third quarter contracts and backlog were the highest for any quarter in the Company's history and net income and revenues set third quarter records. Robert I. Toll, chairman and chief executive officer, stated: "Thanks to the tremendous efforts of the Toll Brothers team, we are on pace for record results in 2003 and, it appears, for the next several years to come." "We very much appreciate the support of our shareholders, who have persevered through war, a weak economy and persistent predictions of a housing bubble. We believe that the luxury new home market will continue to strengthen, given reports of an improving economy and the strength of current demand. For fifteen of the past sixteen weeks, our reservation deposits have set "same-store" highs dating back fifteen years and the sixteenth week was the second highest total. This strong demand should yield record results in 2004." "In the third quarter we increased by more than 3,500 the lots we now control raising our total to approximately 46,500 home sites. In fiscal 2004 we project a rise of approximately 20% in our new home deliveries and we plan to increase our selling communities from 185 today to approximately 205. With our expanding lot supply, we believe we are positioned for significant growth through at least 2006." "In order to support this anticipated growth, the Company raised an additional $86.4 million through a secondary stock offering of 3 million shares on August 13, 2003 (after the third quarter-end). This offering strengthens our equity base and makes it easier for us to increase our debt while maintaining our investment grade ratings: We plan to use the proceeds to take advantage of additional growth opportunities." Toll Brothers' financial highlights for the period ended July 31, 2003 (unaudited): o Record third quarter 2003 earnings of $0.90 per share diluted rose 29% versus third quarter 2002's earnings of $0.70 per share diluted. Record third quarter 2003 net income of $68.2 million increased 27% versus third quarter 2002's net income of $53.5 million. *more* o Record nine-month 2003 earnings of $2.23 per share diluted grew 12% versus 2002's record nine-month earnings of $1.99 per share diluted. Record nine-month 2003 net income of $166.4 million grew 11% versus 2002's record nine-month net income of $150.5 million. o Nine-month 2003 net income included a pre-tax expense in the first quarter of 2003 of $3.9 million (or $0.033 per share diluted after tax) due to early retirement of debt. The first quarter and first nine months of 2002 included no such charge. According to SFAS No. 145, an accounting standard issued in 2002, beginning in the Company's 2003 fiscal year, such charges, which previously would have been accounted for as an extraordinary expense, must now be included as an expense from continuing operations. o Record third quarter 2003 revenues of $693.7 million increased 19% versus 2002's third quarter revenues of $580.7 million. Record third quarter home building revenues of $678.5 million (1,188 homes) rose 20% versus third quarter 2002 home building revenues of $565.4 million (1,093 homes). o Record nine-month revenues of $1.87 billion grew 15% versus 2002's record nine-month revenues of $1.62 billion. Record nine-month home building revenues of $1.84 billion (3,333 homes) grew 16% versus 2002's record total of $1.59 billion (3,158 homes). o Revenues from land sales totaled $7.6 million and $21.0 million for the third quarter and nine-month periods respectively compared to $12.5 million and $26.5 million respectively in 2002. o Record third quarter contracts of $952.7 million (1,671 homes), the highest for any quarter in the Company's history, grew by 35% versus 2002's previous third quarter record of $704.2 million (1,274 homes). Record nine-month contracts of $2.47 billion (4,404 homes) rose 18% compared to 2002's nine-month record of $2.09 billion (3,908 homes). o The Company's record third quarter-end backlog of $2.49 billion (4,411 homes) increased 31% versus the 2002 record third quarter total of $1.90 billion (3,441 homes). 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 26, 2003, to discuss these results and our outlook for fiscal 2003 and beyond. 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 November 1, 2003. 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 21 states: Arizona, California, Colorado, Connecticut, Delaware, Florida, Illinois, Massachusetts, Maryland, Michigan, Nevada, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Texas, and Virginia. *more* Toll Brothers builds luxury single-family and attached home communities and master-planned luxury multi-product residential golf course 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 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. 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, construction defect and home warranty claims and 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, 2003 2002 --------------------- ------------------- (Unaudited) ASSETS Cash and cash equivalents $ 155,683 $ 102,337 Inventory 2,965,669 2,551,061 Property, construction and office equipment, net 39,926 38,496 Receivables, prepaid expenses and other assets 81,722 93,310 Mortgage loans receivable 101,608 63,949 Customer deposits held in escrow 27,103 23,019 Investments in and advances to unconsolidated entities 30,622 23,193 --------------------- ------------------- $ 3,402,333 $ 2,895,365 ===================== =================== LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Loans payable $ 282,694 $ 253,194 Senior notes 298,182 - Senior subordinated notes 719,973 819,663 Mortgage company warehouse loan 94,647 48,996 Customer deposits 167,185 134,707 Accounts payable 133,117 126,391 Accrued expenses 310,376 281,275 Income taxes payable 107,852 101,630 --------------------- ------------------- Total liabilities 2,114,026 1,765,856 ===================== =================== Stockholders' equity: Preferred stock, none issued Common stock 740 740 Additional paid-in capital 101,443 102,600 Retained earnings 1,268,237 1,101,799 Treasury stock (82,113) (75,630) --------------------- ------------------- Total stockholders' equity 1,288,307 1,129,509 --------------------- ------------------- $ 3,402,333 $ 2,895,365 ===================== ===================
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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, ------------------------------------ ---------------------------------- 2003 2002 2003 2002 ------------------------------------ ---------------------------------- Revenues: Housing sales $1,837,386 $1,587,168 $ 678,523 $ 565,355 Land sales 21,027 26,519 7,640 12,478 Equity earnings from unconsolidated entities 700 1,743 555 246 Interest and other 12,764 7,952 6,967 2,628 ------------------------------------ ---------------------------------- 1,871,877 1,623,382 693,685 580,707 ------------------------------------ ---------------------------------- Costs and expenses: Housing sales 1,334,645 1,149,720 492,239 409,657 Land sales 13,462 18,125 2,745 8,947 Selling, general and administrative expenses 206,354 172,866 73,216 61,874 Interest 50,135 45,258 17,630 15,626 Expenses related to early retirement of debt 3,890 - - - ------------------------------------ ---------------------------------- 1,608,486 1,385,969 585,830 496,104 ------------------------------------ ---------------------------------- Income before income taxes 263,391 237,413 107,855 84,603 Income taxes 96,953 86,909 39,696 31,103 ------------------------------------ ---------------------------------- Net income $166,438 $ 150,504 $ 68,159 $53,500 ==================================== ================================== Earnings per share: Basic $ 2.38 $ 2.13 $ 0.98 $ 0.76 Diluted $ 2.23 $ 1.99 $ 0.90 $ 0.70 Weighted average number of shares: Basic 70,038 70,562 69,848 70,835 Diluted 74,481 75,722 75,534 76,685 Additional financial information: Interest incurred $ 76,831 $ 67,551 $ 25,800 $22,309 Depreciation and amortization $ 8,841 $ 8,104 $ 2,913 $ 2,741
*more* PERIOD ENDED JULY 31:
UNITS $ (MILL) 3rd Qtr. 3rd Qtr. 3rd Qtr. 3rd Qtr. CLOSINGS 2003 2002 2003 2002 --------------------------- --------- --------- --------- -------- Northeast 179 214 112.6 114.5 (MA, RI, NH, CT, NY, NJ) Mid-Atlantic 445 429 221.7 203.4 (PA, DE, MD, VA) Mid-West (MI, IL, OH) 103 89 57.1 41.6 Southeast (FL, NC, TN) 131 143 69.3 58.0 Southwest (AZ, TX, NV, CO) 212 142 114.0 77.7 West Coast (CA) 118 76 103.8 70.2 ----- ----- ----- ----- Total 1,188 1,093 678.5 565.4 CONTRACTS (1) --------------------------- Northeast 247 218 141.7 125.5 (MA, RI, NH, CT, NY, NJ) Mid-Atlantic 643 468 322.5 225.4 (PA, DE, MD, VA) Mid-West (MI, IL, OH) 136 111 74.6 58.4 Southeast (FL, NC, SC, TN) 154 164 77.3 82.1 Southwest (AZ, TX, NV, CO) 207 184 119.1 94.3 West Coast (CA) 284 129 217.5 118.5 Total 1,671 1,274 952.7 704.2 BACKLOG (1) --------------------------- Northeast 853 668 483.6 378.9 (MA, RI, NH, CT, NY, NJ) Mid-Atlantic 1,647 1,172 810.8 550.2 (PA, DE, MD, VA) Mid-West (MI, IL, OH) 351 302 192.1 157.1 Southeast (FL, NC, SC, TN) 336 446 202.0 231.1 Southwest (AZ, TX, NV, CO) 613 443 341.6 222.2 West Coast (CA) 611 410 456.0 365.0 Total ----- ----- ------- ------- 4,411 3,441 2,486.1 1,904.5
*more* PERIOD ENDED JULY 31:
UNITS $ (MILL) 9 Months 9 Months 9 Months 9 Months CLOSINGS 2003 2002 2003 2002 ---------------------------- -------- -------- --------- --------- Northeast 511 650 307.8 337.5 (MA, RI, NH, CT, NY, NJ) Mid-Atlantic 1,213 1,110 593.4 517.5 (PA, DE, MD, VA) Mid-West (MI, IL, OH) 269 305 143.4 142.4 Southeast (FL, NC, TN) 476 433 219.2 172.3 Southwest (AZ, TX, NV, CO) 512 389 267.8 209.0 West Coast (CA) 352 271 305.8 208.5 ----- ----- ------- ------- Total 3,333 3,158 1,837.4 1,587.2 CONTRACTS (1) ---------------------------- Northeast 704 667 406.7 385.7 (MA, RI, NH, CT, NY, NJ) Mid-Atlantic 1,726 1,449 856.8 675.5 (PA, DE, MD, VA) Mid-West (MI, IL, OH) 356 313 191.1 159.8 Southeast (FL, NC, SC, TN) 428 551 216.8 252.0 Southwest (AZ, TX, NV, CO) 589 490 340.7 243.7 West Coast (CA) 601 438 453.3 374.9 ----- ----- ------- ------- Total 4,404 3,908 2,465.4 2,091.6
(1)Contracts for the three-month and nine-month periods ended July 31, 2003 included $1.1 million (3 homes) and $6.5 million (21 homes), respectively, from an unconsolidated 50% owned joint venture. Contracts for the three-month and nine-month periods ended July 31, 2002 included $4.2 million (12 homes) and $8.9 million (26 homes), respectively, from this joint venture. Backlog as of July 31, 2003 and 2002 included $5.8 million (19 homes) and $5.4 million (15 homes), respectively, from this joint venture. ###