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)) |
Exhibit | ||
No. | Item | |
99.1* | Press release of Toll Brothers, Inc. dated August 24, 2011
announcing its financial results for the nine-month and three-month
period ended July 31, 2011. |
* | Filed electronically herewith. |
2
TOLL BROTHERS, INC. |
||||
Dated: August 24, 2011 | By: | Joseph R. Sicree | ||
Joseph R. Sicree | ||||
Senior Vice President, Chief Accounting Officer |
3
FOR IMMEDIATE RELEASE | CONTACT: Frederick N. Cooper (215) 938-8312 | |
August 24, 2011 | fcooper@tollbrothersinc.com | |
Joseph R. Sicree (215) 938-8045 | ||
jsicree@tollbrothersinc.com |
| FY 2011s third-quarter net income was $42.1 million, or $0.25 per share, compared to FY
2010s third-quarter net income of $27.3 million, or $0.16 per share. FY 2011s third-quarter
net income included pretax write-downs of $20.2 million: $16.8 million attributable to
inventory (primarily for land owned for future communities), and a $3.4 million charge
attributable to the purchase of $45.1 million of our Senior Notes. In FY 2010, third-quarter
pretax write-downs and charges for early debt repurchases totaled $13.2 million. |
| FY 2011s third-quarter pretax income was $3.9 million, compared to FY 2010s third-quarter
pretax income of $0.8 million. |
| Excluding write-downs, FY 2011s third-quarter pretax income was $24.1 million, compared to
FY 2010s third-quarter pretax income of $14.0 million. |
| FY 2011s nine-month net income was $24.8 million, or $0.15 per share, compared to FY
2010s nine-month net loss of $53.9 million, or $0.33 per share. |
| FY 2011s nine-month net income included pretax write-downs of $77.9 million: $16.4 million
of the write-downs was attributable to operating communities, $16.0 million related to land
controlled for future development, $2.5 million related to land controlled for future
communities, $39.6 million was attributable to joint ventures, and $3.4 million was for
charges attributable to the early repurchase of $45.1 million of our Senior Notes. In FY 2010,
nine-month pretax write-downs and debt retirement charges totaled $88.9 million. |
| FY 2011s nine-month pretax loss was $44.6 million, compared to FY 2010s nine-month pretax
loss of $107.7 million. |
| Excluding write-downs and debt repurchase charges, FY 2011s nine-month pretax income was
$33.2 million, compared to a pretax loss of $18.8 million for FY 2010s nine-month period,
excluding write-downs and debt repurchase charges. |
| The Company recorded FY 2011 and FY 2010 third-quarter tax benefits of $38.2 million and
$26.5 million, respectively. For FY 2011s and FY 2010s nine-month periods, the Company
recorded tax benefits of $69.4 million and $53.9 million, respectively. |
| FY 2011s third-quarter total revenues of $394.3 million and 693 units decreased 13% in
dollars and 14% in units from FY 2010s third-quarter total revenues of $454.2 million and 803
units. |
| FY 2011s third-quarter gross margin, excluding interest and write-downs, improved to 23.4%
from 22.1% in FY 2010s third quarter. |
| Interest included in cost of sales was 5.3% in FY 2011s third quarter, down from 5.4% in FY
2011s second quarter and up slightly from 5.1% of revenues in FY 2010s third quarter. There
was no directly expensed interest in FY 2011s third quarter. |
| FY 2011s nine-month total revenues of $1.05 billion and 1,854 units declined 4% in dollars
and 5% in units, compared to FY 2010s nine-month period totals of $1.09 billion and 1,942
units. |
| In FY 2011s third quarter, unconsolidated entities in which the Company had an interest
delivered $67.3 million of homes, compared to $29.5 million in the third quarter of FY 2010.
In FY 2011s first nine months, unconsolidated entities in which the Company had an interest
delivered $198.6 million of homes, compared to $63.3 million in the nine-month period of FY
2010. The Company recorded its share of the results from these entities operations in
(Loss) Income from Unconsolidated Entities on the Companys Statement of Operations. |
| The Company signed gross contracts of $439.2 million and 770 units in FY 2011s third
quarter, an increase of 4% in dollars and 3% in units, compared to $422.5 million and 747
gross contracts signed in FY 2010s third quarter. The Company signed 2,266 gross contracts
totaling $1.29 billion in FY 2011s first nine months, an increase of 4% and 5%, respectively,
compared to the 2,177 gross contracts totaling $1.23 billion signed in FY 2010s nine-month
period. |
| The average price per unit of gross contracts signed in FY 2011s third quarter was
approximately $570,000, compared to approximately $570,000 in FY 2011s second quarter and
$566,000 in FY 2010s third quarter. The average price per unit of net contracts signed in FY
2011s third quarter was approximately $570,000, compared to approximately $570,000 in FY
2011s second quarter and $571,000 in FY 2010s third quarter. |
| The Companys FY 2011 third-quarter net contracts of $406.7 million and 713 units rose by
2% in both dollars and units, compared to FY 2010s third-quarter net contracts of $400.1
million and 701 units. The Companys FY 2011 nine-month net contracts of $1.21 billion and
2,140 units increased by 5% in both dollars and units, compared to net contracts of $1.16
billion and 2,047 units in FY 2010s nine-month period. |
| On a per-community basis, FY 2011s third-quarter net signed contracts of 3.51 units per
community were 5% lower than FY 2010s third-quarter total of 3.69. They were approximately 1%
lower than FY 2009s third-quarter total of 3.56 units and exceeded FY 2008s third-quarter
total of 2.71 units by 30%; however, they were still well below the Companys historical
third-quarter average, dating back to 1990, of 5.98 units per community. |
| In FY 2011s third quarter, unconsolidated entities in which the Company had an interest
signed agreements for $33.9 million of homes, compared to $40.5 million in the third quarter
of FY 2010. In FY 2011s first nine months, unconsolidated entities in which the Company had
an interest signed agreements for $133.6 million of homes, compared to $136.0 million in the
nine-month period of FY 2010. |
| The average price per unit of cancellations in FY 2011s third quarter was approximately
$570,000, compared to approximately $562,000 in FY 2011s second quarter and $488,000 in FY
2010s third quarter. |
| In FY 2011, third-quarter cancellations totaled 57. This compared to 36 in FY 2011s second
quarter, 33 in FY 2011s first quarter, and 54, 46, 46, and 38, respectively, in FY 2010s
fourth, third, second and first quarters. |
| FY 2011s third-quarter cancellation rate (current-quarter cancellations divided by
current-quarter signed contracts) was 7.4%. This compared to 3.9% in FY 2011s second
quarter, 5.7% in FY 2011s first quarter, and 8.8%, 6.2%, 5.3%, and 6.7%, respectively, in FY
2010s fourth, third, second and first quarters. As a percentage of beginning-quarter backlog,
FY 2011s third-quarter cancellation rate was 3.2%. This compared to 2.4% in FY 2011s second
quarter, 2.3% in FY 2011s first quarter, and 3.3%, 2.6%, 3.1% and 2.5%, respectively, in FY
2010s fourth, third, second and first quarters. |
| In FY 2011, third-quarter-end backlog of $1.02 billion and 1,780 units increased 8% in
dollars and 9% in units from FY 2010s third-quarter-end backlog of $939.4 million and 1,636
units. |
| At July 31, 2011, unconsolidated entities in which the Company had an interest had a
backlog of $26.1 million, compared to $109.4 million at July 31, 2010. |
| The Company ended its FY 2011 third quarter with $1.18 billion in cash and marketable
securities, compared to $1.25 billion at 2011s second-quarter end and $1.64 billion at FY
2010s third-quarter end. During FY 2011s third quarter, the Company used approximately $75
million of cash to purchase land. At FY 2011s third-quarter end, it had $777.5 million
available under its $885 million 12-bank credit facility, which matures in October 2014. |
| The Companys Stockholders Equity at FY 2011s third-quarter end was $2.61 billion,
compared to $2.55 billion at FY 2011s second-quarter end. The Companys book value per share
at FY 2011s third-quarter end was $15.52. |
| The Company ended FY 2011s third quarter with a net-debt-to-capital ratio(1) of
13.9%, compared to 13.6% at FY 2011s second-quarter end and 11.5% at FY 2010s third-quarter
end. |
| The Company ended FY 2011s third quarter with approximately 36,200 lots owned and
optioned, compared to 35,900 one quarter earlier, 35,800 one year earlier, and 91,200 at its
peak at FY 2006s second-quarter end. At 2011s third-quarter end, approximately 30,500 of
these lots were owned, of which approximately 11,300 lots, including those in backlog, were
substantially improved. |
| The Company ended FY 2011s third quarter with 207 selling communities, compared to 203 at FY
2011s second-quarter end and 190 at FY 2010s third-quarter end. The Company expects to end FY
2011 with between 210 to 220 selling communities, compared to its peak of 325 communities at FY
2007s second-quarter end. |
| Based on FY 2011s third-quarter-end backlog and the pace of activity at its communities,
the Company currently estimates that it will deliver approximately 620 to 820 homes in its
fourth quarter, bringing total deliveries to between 2,475 and 2,675 in FY 2011. It believes
the average delivered price for FY 2011s fourth quarter will be between $555,000 and $570,000
per home. |
(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. |
July 31, | October 31, | |||||||
2011 | 2010 | |||||||
(Unaudited) | ||||||||
ASSETS |
||||||||
Cash and cash equivalents |
$ | 890,067 | $ | 1,039,060 | ||||
Marketable securities |
294,286 | 197,867 | ||||||
Restricted cash |
24,225 | 60,906 | ||||||
Inventory |
3,423,617 | 3,241,725 | ||||||
Property, construction and office
equipment, net |
98,902 | 79,916 | ||||||
Receivables, prepaid expenses and other assets |
96,972 | 97,039 | ||||||
Mortgage loans receivable |
45,320 | 93,644 | ||||||
Customer deposits held in escrow |
16,304 | 21,366 | ||||||
Investments in and advances to unconsolidated
entities and non-performing loan portfolio |
186,917 | 198,442 | ||||||
Income tax refund recoverable |
141,590 | |||||||
Total assets |
$ | 5,076,610 | $ | 5,171,555 | ||||
LIABILITIES AND EQUITY |
||||||||
Liabilities: |
||||||||
Loans payable |
$ | 104,512 | $ | 94,491 | ||||
Senior notes |
1,500,494 | 1,544,110 | ||||||
Mortgage company warehouse loan |
39,905 | 72,367 | ||||||
Customer deposits |
90,184 | 77,156 | ||||||
Accounts payable |
93,622 | 91,738 | ||||||
Accrued expenses |
524,446 | 570,321 | ||||||
Income taxes payable |
105,831 | 162,359 | ||||||
Total liabilities |
2,458,994 | 2,612,542 | ||||||
Equity: |
||||||||
Stockholders Equity |
||||||||
Preferred stock |
| | ||||||
Common stock |
1,686 | 1,664 | ||||||
Additional paid-in capital |
390,778 | 360,006 | ||||||
Retained earnings |
2,219,208 | 2,194,456 | ||||||
Treasury stock, at cost |
(27 | ) | (96 | ) | ||||
Accumulated other
comprehensive loss |
(245 | ) | (577 | ) | ||||
Total stockholders equity |
2,611,400 | 2,555,453 | ||||||
Noncontrolling interest |
6,216 | 3,560 | ||||||
Total equity |
2,617,616 | 2,559,013 | ||||||
$ | 5,076,610 | $ | 5,171,555 | |||||
Nine Months Ended | Three Months Ended | |||||||||||||||
July 31, | July 31, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Revenues |
$ | 1,048,096 | $ | 1,092,171 | $ | 394,305 | $ | 454,202 | ||||||||
Cost of revenues |
898,266 | 1,012,575 | 339,947 | 389,505 | ||||||||||||
Selling, general and
administrative expenses |
192,906 | 193,987 | 64,605 | 67,165 | ||||||||||||
Interest expense |
1,504 | 18,588 | 5,124 | |||||||||||||
1,092,676 | 1,225,150 | 404,552 | 461,794 | |||||||||||||
Loss from operations |
(44,580 | ) | (132,979 | ) | (10,247 | ) | (7,592 | ) | ||||||||
Other: |
||||||||||||||||
(Loss) income
from
unconsolidated
entities and
non-performing
loan portfolio |
(9,817 | ) | 4,817 | 12,055 | 3,171 | |||||||||||
Interest and other |
13,168 | 21,134 | 5,494 | 5,902 | ||||||||||||
Expenses related to
early retirement of
debt |
(3,414 | ) | (692 | ) | (3,414 | ) | (658 | ) | ||||||||
(Loss) income
before income
taxes |
(44,643 | ) | $ | (107,720 | ) | 3,888 | 823 | |||||||||
Income tax benefit |
(69,395 | ) | (53,867 | ) | (38,220 | ) | (26,479 | ) | ||||||||
Net income (loss) |
$ | 24,752 | $ | (53,853 | ) | $ | 42,108 | $ | 27,302 | |||||||
Income (loss) per share: |
||||||||||||||||
Basic |
$ | 0.15 | $ | (0.33 | ) | $ | 0.25 | $ | 0.16 | |||||||
Diluted |
$ | 0.15 | $ | (0.33 | ) | $ | 0.25 | $ | 0.16 | |||||||
Weighted-average number
of shares: |
||||||||||||||||
Basic |
167,221 | 165,465 | 168,075 | 165,752 | ||||||||||||
Diluted |
168,666 | 165,465 | 169,338 | 167,658 | ||||||||||||
Nine Months Ended | Three Months Ended | |||||||||||||||
July 31, | July 31, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Impairment charges recognized: |
||||||||||||||||
Cost of revenues |
$ | 34,861 | $ | 88,220 | $ | 16,813 | $ | 12,508 | ||||||||
Loss from unconsolidated
entities and non-performing
loan portfolio |
39,600 | |||||||||||||||
$ | 74,461 | $ | 88,220 | $ | 16,813 | $ | 12,508 | |||||||||
Depreciation and amortization |
$ | 10,660 | $ | 13,569 | $ | 3,257 | $ | 4,512 | ||||||||
Interest incurred |
$ | 86,820 | $ | 87,740 | $ | 28,386 | $ | 28,879 | ||||||||
Interest expense: |
||||||||||||||||
Charged to cost of revenues |
$ | 56,327 | $ | 55,411 | $ | 20,946 | $ | 23,033 | ||||||||
Charged to selling, general
and administrative expense |
1,504 | 18,588 | 5,124 | |||||||||||||
Charged to interest and other |
861 | 1,786 | 543 | 977 | ||||||||||||
$ | 58,692 | $ | 75,785 | $ | 21,489 | $ | 29,134 | |||||||||
Home sites controlled: |
||||||||||||||||
Owned |
30,499 | 29,243 | ||||||||||||||
Optioned |
5,686 | 6,582 | ||||||||||||||
36,185 | 35,825 | |||||||||||||||
North:
|
Connecticut, Illinois, Massachusetts, Michigan, Minnesota, New Jersey and New York | |
Mid-Atlantic:
|
Delaware, Maryland, Pennsylvania, Virginia and West Virginia | |
South:
|
Florida, Georgia, North Carolina, South Carolina and Texas | |
West:
|
Arizona, California, Colorado and Nevada |
Three Months Ended | Three Months Ended | |||||||||||||||
July 31, | July 31, | |||||||||||||||
Units | $ (Millions) | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
HOME BUILDING REVENUES |
||||||||||||||||
North |
197 | 248 | $ | 106.4 | $ | 131.2 | ||||||||||
Mid-Atlantic |
262 | 283 | 147.7 | 156.5 | ||||||||||||
South |
124 | 126 | 69.0 | 70.0 | ||||||||||||
West |
110 | 146 | 71.2 | 96.5 | ||||||||||||
Total consolidated |
693 | 803 | $ | 394.3 | $ | 454.2 | ||||||||||
CONTRACTS |
||||||||||||||||
North |
215 | 220 | $ | 115.1 | $ | 108.5 | ||||||||||
Mid-Atlantic |
203 | 235 | 116.0 | 132.9 | ||||||||||||
South |
190 | 109 | 109.0 | 62.8 | ||||||||||||
West |
105 | 137 | 66.6 | 95.9 | ||||||||||||
Total consolidated |
713 | 701 | $ | 406.7 | $ | 400.1 | ||||||||||
At July 31, | At July 31, | |||||||||||||||
Units | $ (Millions) | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
BACKLOG |
||||||||||||||||
North |
579 | 537 | $ | 300.0 | $ | 264.5 | ||||||||||
Mid-Atlantic |
524 | 508 | 312.6 | 306.0 | ||||||||||||
South |
468 | 334 | 269.0 | 177.5 | ||||||||||||
West |
209 | 257 | 137.3 | 191.4 | ||||||||||||
Total consolidated |
1,780 | 1,636 | $ | 1,018.9 | $ | 939.4 | ||||||||||
Nine Months Ended | Nine Months Ended | |||||||||||||||
July 31, | July 31, | |||||||||||||||
Units | $ (Millions) | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
HOME BUILDING REVENUES |
||||||||||||||||
North |
513 | 575 | $ | 273.6 | $ | 305.7 | ||||||||||
Mid-Atlantic |
625 | 659 | 351.1 | 360.5 | ||||||||||||
South |
363 | 353 | 197.3 | 189.0 | ||||||||||||
West |
353 | 355 | 226.1 | 237.0 | ||||||||||||
Total consolidated |
1,854 | 1,942 | $ | 1,048.1 | $ | 1,092.2 | ||||||||||
CONTRACTS |
||||||||||||||||
North |
571 | 562 | $ | 314.2 | $ | 286.6 | ||||||||||
Mid-Atlantic |
674 | 674 | 379.3 | 372.8 | ||||||||||||
South |
535 | 405 | 306.6 | 218.5 | ||||||||||||
West |
360 | 406 | 214.7 | 278.8 | ||||||||||||
Total consolidated |
2,140 | 2,047 | $ | 1,214.8 | $ | 1,156.7 | ||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Units | Units | $(Mill) | $(Mill) | |||||||||||||
Three months ended July 31, |
||||||||||||||||
Revenues |
71 | 40 | $ | 67.3 | $ | 29.5 | ||||||||||
Contracts |
40 | 57 | $ | 33.9 | $ | 40.5 | ||||||||||
Nine months ended July 31, |
||||||||||||||||
Revenues |
242 | 87 | $ | 198.6 | $ | 63.3 | ||||||||||
Contracts |
151 | 175 | $ | 133.6 | $ | 136.0 | ||||||||||
Backlog at July 31, |
35 | 145 | $ | 26.1 | $ | 109.4 |