-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, O6o4AfdbudqN8E0dZ7JVVk6F6EuZHKcVyMT0++/JXGbZWODWv3dV/nMA4qDz8FUV CmzwQBW2gisO6c5K8tMhjA== 0000950116-05-002872.txt : 20050825 0000950116-05-002872.hdr.sgml : 20050825 20050825112027 ACCESSION NUMBER: 0000950116-05-002872 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20050825 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050825 DATE AS OF CHANGE: 20050825 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TOLL BROTHERS INC CENTRAL INDEX KEY: 0000794170 STANDARD INDUSTRIAL CLASSIFICATION: OPERATIVE BUILDERS [1531] IRS NUMBER: 232416878 STATE OF INCORPORATION: DE FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09186 FILM NUMBER: 051047689 BUSINESS ADDRESS: STREET 1: 250 GIBRALTAR ROAD CITY: HORSHAM STATE: PA ZIP: 19044 BUSINESS PHONE: 2159388000 MAIL ADDRESS: STREET 1: 250 GIBRALTAR ROAD CITY: HORSHAM STATE: PA ZIP: 19044 8-K 1 eight-k.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): August 25, 2005 ------------------------------- Toll Brothers, Inc. - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Charter) Delaware 001-09186 23-2416878 - -------------------------------------------------------------------------------- (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 250 Gibraltar Road, Horsham, PA 19044 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (215) 938-8000 ----------------------------- (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On August 25, 2005, Toll Brothers, Inc. issued a press release which contained Toll Brothers, Inc.'s results of operations for its nine-month and three-month periods ended July 31, 2005 and 2004, a copy of which release is attached hereto as Exhibit 99.1 to this report. The information hereunder shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into a filing under the Securities Act of 1933, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. ITEM 7.01. REGULATION FD DISCLOSURE On August 25, 2005, Toll Brothers, Inc. will host a conference call for investors to discuss the results of operations for its nine-month and three-month periods ended July 31, 2005, and to discuss the expected results of operations for the quarter ending October 31, 2005 and for the fiscal year ending October 31, 2005. The Company will also give an overview of its expectations for fiscal 2006. A summary of the guidance to be given for its expected results of operations for the quarter and fiscal year ending October 31, 2005 is attached hereto as Exhibit 99.2 to this report. The information hereunder shall not be deemed to be "filed" for the purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into a filing under the Securities Act of 1933, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS (c). Exhibits. The following Exhibits are furnished as part of this Current Report on Form 8-K: Exhibit No. Item - -------- ---- 99.1* Press release of Toll Brothers, Inc. dated August 25, 2005 announcing its financial results for the nine-month and three-month periods ended July 31, 2005 and 2004. 99.2* Outline of guidance to be given by Toll Brothers, Inc. on its conference call of August 25, 2005 related to the expected results of operations for the quarter ending October 31, 2005 and for the fiscal year ending October 31, 2005. * Filed electronically herewith. 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. TOLL BROTHERS, INC. Dated: August 25, 2005 By: Joseph R. Sicree ---------------------- Joseph R. Sicree Vice President, Chief Accounting Officer 3 EX-99 2 ex99-1.txt EXHIBIT 99.1 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 ======= ======= ======== ========
### EX-99 3 ex99-2.txt EXHIBIT 99.2 EXHIBIT 99.2 FINANCIAL GUIDANCE In our third quarter 2005 Earnings Conference Call to be held at 2:00 P.M. (EDT) on August 25, 2005, we will provide the following guidance regarding our expected results of operations for our fourth quarter and fiscal year ending October 31, 2005 and an overview of fiscal 2006 expectations. These forecasts are subject to many risks, uncertainties and assumptions and may vary significantly from the actual results, as further noted below. Information with respect to quarterly data is subject to even greater fluctuation and risk. We undertake no obligation to publicly update the information provided due to changes in economic conditions, future events or otherwise. However, any further disclosures made on related subjects in our subsequent filings, releases or presentations should be consulted. We suggest that you listen to the conference call in its entirety. The conference call in its entirety can be heard via the Investor Relations portion of our website, www.tollbrothers.com, until approximately October 31, 2005. For ease of reference, we have included the actual results for each of the four fiscal quarters and for the full fiscal year of 2004 and for the quarters ended January 31, 2005, April 30, 2005 and July 31, 2005. The columns designated as "Low" and "High" represents the low and high ends of the ranges of the estimated unit deliveries, average price, home building gross margins as a percentage of home building revenues and selling, general and administrative expenses ("SG&A") as a percentage of total revenues expected for fiscal 2005. We expect that the results of operations will be somewhere in between the low end and the high end of the ranges provided. UNIT DELIVERIES OF HOMES AND THE AVERAGE DELIVERED PRICES in fiscal 2005 are expected to be:
Unit Deliveries ------------------------------------------------------------- 2005 Estimated 2004 2005 ------------------------------ Actual Actual Low High -------------- -------------- -------------- -------------- Quarter ended January 31 1,085 1,590 Quarter ended April 30 1,463 1,912 Quarter ended July 31 1,684 2,310 Quarter ended October 31 2,395 2,750 2,850 Year 6,627 8,562 8,662
Average Price ------------------------------------------------------------- 2005 Estimated 2004 2005 ------------------------------ Actual Actual Low High -------------- -------------- -------------- -------------- Quarter ended January 31 $543,389 $622,074 Quarter ended April 30 $556,602 $641,212 Quarter ended July 31 $588,637 $665,151 Quarter ended October 31 $603,048 $675,000 $685,000 Year $579,365 $655,000 $658,500
HOME BUILDING GROSS MARGINS as a percentage of home building revenues in fiscal 2005 are expected to be:
2005 Estimated 2004 2005 ------------------------------- Actual Actual Low High ------------- -------------- -------------- -------------- Quarter ended January 31 28.35% 30.70% Quarter ended April 30 28.21% 32.25% Quarter ended July 31 28.43% 33.37% Quarter ended October 31 28.63% 31.75% 32.00% Year 28.45% 32.10% 32.20%
LAND SALES REVENUES AND GROSS MARGINS for fiscal 2005 are expected to be approximately:
2004 2005 2005 Actual Actual Estimated ---------------- ---------------- ---------------- (In thousands) Revenue - ------------------------------------------------- Quarter ended January 31 $5,987 $1,225 Quarter ended April 30 $2,011 $9,800 Quarter ended July 31 $12,940 $10,583 Quarter ended October 31 $1,553 $10,000 Year $22,491 $31,600
2004 2005 2005 Actual Actual Estimated ---------------- ---------------- ---------------- Gross Margin - ------------------------------------------------- Quarter ended January 31 11.42% 36.41% Quarter ended April 30 25.26% 45.76% Quarter ended July 31 41.97% 9.18% Quarter ended October 31 5.99% 20.00% Year 29.86% 25.00%
INCOME FROM UNCONSOLIDATED ENTITIES for fiscal 2005 is expected to be approximately:
2004 2005 2005 Actual Actual Estimated ---------------- ---------------- ---------------- (In thousands) Quarter ended January 31 $665 $1,935 Quarter ended April 30 $729 $3,373 Quarter ended July 31 $5,551 $4,231 Quarter ended October 31 $8,786 $10,000 Year $15,731 $19,500
OTHER INCOME for fiscal 2005 is expected to be approximately:
2004 2005 2005 Actual Actual Estimated --------------- --------------- ---------------- (In thousands) Quarter ended January 31 $1,683 $6,883 Quarter ended April 30 $2,436 $9,109 Quarter ended July 31 $3,364 $10,583 Quarter ended October 31 $7,937 $9,000 Year $15,420 $35,600
2 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES as a percentage of total revenues in fiscal 2005 are expected to be:
2005 Estimated 2004 2005 ---------------------------------- Actual Actual Low High ---------------- ----------------- --------------- --------------- Quarter ended January 31 12.82% 10.72% Quarter ended April 30 10.97% 9.32% Quarter ended July 31 10.23% 8.09% Quarter ended October 31 7.58% 7.75% 7.50% Year 9.79% 8.70% 8.60%
INTEREST EXPENSE as a percentage of total revenues for fiscal 2005 is expected to be:
2004 2005 2005 Actual Actual Estimated ------------ ------------ ------------ Quarter ended January 31 2.43% 2.18% Quarter ended April 30 2.59% 2.25% Quarter ended July 31 2.39% 2.28% Quarter ended October 31 2.28% 2.30% Year 2.40% 2.25%
In the quarter ended July 31, 2005, the Company redeemed all of its $100 million of 8% Senior Subordinated Notes due 2009 and repaid all of its $222.5 million bank term loan due July 2005. The Company incurred a pre-tax charge of approximately $4.1 million in the quarter ended July 31, 2005. Our effective income tax rate as a percentage of income before taxes for fiscal 2005 is expected to be:
2004 2005 2005 Actual Actual Estimated ------------ ------------ -------------- Quarter ended January 31 36.58% 40.11% Quarter ended April 30 36.75% 36.48% Quarter ended July 31 36.83% 40.56% Quarter ended October 31 36.89% 39.00% Year 36.81% 39.10%
3 In-the-money stock options are included in shares outstanding using the "treasury stock method" for calculating common stock equivalents. Because we will issue shares under our Cash Bonus Program, assumed that our stock price will increase during fiscal 2005, and expect that options will be exercised, we expect that the number of shares used to determine earnings per share will increase in fiscal 2005 as compared to 2004. The shares stated below have been adjusted to reflect a two-for-one stock split distributed in the form of a stock dividend on July 8, 2005. We estimate the share count for determining diluted earnings per share for the quarter ending October 31, 2005 and for the fiscal year ending October 31, 2005 to be:
2004 2005 2005 Actual Actual Estimated --------------- --------------- ------------ (in thousands) Quarter ended January 31 161,637 166,084 Quarter ended April 30 162,853 169,352 Quarter ended July 31 161,841 169,843 Quarter ended October 31 162,998 171,000 Year 162,332 169,100
OVERVIEW OF FISCAL 2006 In fiscal 2006, we expect unit deliveries to be between 10,200 and 10,600 homes and the average delivered price will be approximately $665,000. For the quarter ending January 31, 2006, deliveries are expected to be between 1,900 and 2,100 homes with an average delivered price of approximately $640,000. In addition, we expect net income to grow approximately 20% in fiscal 2006 as compared to fiscal 2005. FORWARD LOOKING STATEMENT 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. 4 -----END PRIVACY-ENHANCED MESSAGE-----