Toll Brothers Reports FY 2013 3rd Qtr and 9 Month Results

Toll Brothers Reports FY 2013 3rd Qtr and 9 Month Results

HORSHAM, Pa., Aug. 21, 2013 (GLOBE NEWSWIRE) -- Toll Brothers, Inc. (NYSE:TOL)
(www.tollbrothers.com), the nation's leading builder of luxury homes, today
announced results for earnings, revenues, contracts, and backlog for its third
quarter ended July 31, 2013.

Front Exterior EPR

2013 Third Quarter Highlights:

  *In FY 2013's third quarter, net income was $46.6 million, or $0.26 per
    share, compared to $61.6 million, or $0.36 per share in FY 2012's third
    quarter.
  *Net income included a tax expense of $21.7 million, compared to a tax
    benefit of $18.7 million in FY 2012's third quarter.
  *Pre-tax income was $68.3 million, compared to $43.0 million in FY 2012's
    third quarter.
  *Total revenues of $689.2 million and homebuilding deliveries of 1,059
    units rose 24% in dollars and 10% in units, compared to FY 2012's third
    quarter.
  *Net signed contracts of $992.6 million and 1,405 units rose 47% in dollars
    and 26% in units, compared to FY 2012's third quarter.
  *FY 2013's third-quarter cancellation rate was 4.6%, matching the 4.6% in
    FY 2012's third quarter.
  *Backlog of $2.84 billion and 4,001 units rose 75% in dollars and 56% in
    units, compared to FY 2012's third-quarter-end backlog.
  *The average price of homes delivered was $651,000, compared to $577,000 in
    FY 2013's second quarter and $576,000 in FY 2012's third quarter.
    Excluding 16 deliveries at the Touraine, a luxury Upper East Side
    Manhattan high-rise building, the average price of homes delivered in FY
    2013's third quarter was $612,000.
  *Gross margin, excluding interest and write-downs, was 25.1%, compared to
    24.4% in FY 2012's third quarter.
  *SG&A as a percentage of revenue improved to 12.9%, compared to 13.5% in FY
    2012's third quarter.
  *The Company ended FY 2013's third quarter with $1.02 billion of cash and
    marketable securities and $815.4 million available under its then-existing
    $885 million bank credit facility. On August 1, 2013, the Company replaced
    that facility with a new $1.035 billion, 15-bank, five-year credit
    facility. The Company's net-debt-to-capital ratio^(1) at FY 2013's third
    quarter-end was 31.9%.

Douglas C. Yearley, chief executive officer, stated: "Sales volumes and
pricing power both increased this quarter from one year ago, a pattern
consistent with recent quarters. We believe the recovery is real and we are in
the early stages of the rebound. Our average sales contracts per community are
about where they were in 1997-1998, several years into the previous cyclical
recovery. From there, over the next seven years, through August 2005, a period
when mortgage rates averaged between 5.8% and 8.1%, sales contracts per
community continued to increase, eventually peaking at twice that pace.

"We remain focused on growing our company. This quarter our land position grew
to 47,200 lots from 45,200 last quarter and 39,200 one year ago. We expect our
community count – 225 at third quarter-end – to remain stable through the end
of FY 2013 and to grow by 10% to 15% by FYE 2014."

Martin Connor, chief financial officer, stated: "Our gross margin and
operating margin continued to improve with the increase in pricing power and
volume. We expect this to continue in FY 2013's fourth quarter and in FY 2014
as we deliver our backlog. Other income benefited from a $2.7 million gain on
sale of non-strategic land and a strong quarter from Gibraltar Capital and
Asset Management, our distressed loan and acquisition investment subsidiary,
which contributed $4.6 million in pre-tax earnings and $12.4 million of cash
flow.

"Subject to the caveats in our Statement on Forward-Looking Information
included in this release, we offer the following limited guidance:

"We currently estimate that we will deliver between 1,225 and 1,425 homes in
FY 2013's fourth quarter at an average price of between $675,000 and $695,000
per home. This would produce total home sale revenue for FY 2013 of between
$2.46 billion and $2.62 billion and total deliveries of between 3,925 and
4,125 homes. This compares to $1.88 billion and 3,286 homes in FY 2012.

"We intend to give preliminary guidance for FY 2014 when we announce fourth
quarter results in December 2013."

Robert I. Toll, executive chairman, stated: "The University of Michigan
consumer sentiment survey, though down slightly from last month's six-year
high, is up significantly from one year ago, as is the Conference Board's
similar survey. Inventory levels are still tight in almost all of our markets
and housing remains very affordable. Unemployment trends are slowly improving
and demand, based on household formations, is compelling, especially given the
still very-low volume of industry home production.

"We closed on a new $1.035 billion five-year bank credit facility on August 1,
2013 with 15 U.S. and international banks. That, combined with our $1.02
billion of cash and marketable securities at third quarter-end, will help
position us to continue to grow the Company in the coming years."

Financial results for the third-quarter and nine-months ended July 31, 2013
(unaudited):

  *FY 2013's third-quarter net income was $46.6 million, or $0.26 per share,
    compared to FY 2012's third-quarter net income of $61.6 million, or $0.36
    per share.
    
  *FY 2013's third-quarter pre-tax income was $68.3 million, compared to FY
    2012's third-quarter pre-tax income of $43.0 million.FY 2013's
    third-quarter net income included pre-tax inventory write-downs of $0.2
    million and a tax expense of $21.7 million. FY 2012's third-quarter
    included pre-tax write-downs of $3.1 million and a tax benefit of $18.7
    million.
    
  *FY 2013's nine-month net income was $75.7 million, or $0.43 per share,
    compared to FY 2012's nine-month net income of $75.7 million, or $0.45 per
    share. FY 2013's nine-month net income included pre-tax inventory
    write-downs of $2.0 million: $1.1 million of the inventory write-downs was
    attributable to operating communities and $0.8 million to land controlled
    for future communities, and a tax expense of $41.8 million. FY 2012's
    first nine months included pre-tax write-downs of $13.2 million, a $1.6
    million recovery of previously incurred charges related to a joint venture
    and a tax benefit of $23.5 million.
    
  *FY 2013's nine-month pre-tax income was $117.5 million, compared to FY
    2012's nine-month pre-tax income of $52.2 million. Excluding write-downs
    and recoveries, FY 2013's nine-month pre-tax income was $119.5 million,
    compared to $63.8 million for FY 2012's nine-month period.
    
  *FY 2013's third-quarter total revenues of $689.2 million and 1,059 units
    increased 24% in dollars and 10% in units from FY 2012's third-quarter
    total revenues of $554.3 million and 963 units.
    
  *FY 2013's third-quarter gross margin, excluding interest and write-downs,
    improved to 25.1% from 24.4% in FY 2012's third quarter.
    
  *Interest included in cost of sales decreased to 4.2% of revenues in FY
    2013's third quarter from 4.7% of revenues in FY 2012's third quarter.
    
  *FY 2013's nine-month total revenues of $1.63 billion and 2,699 units
    increased 30% in dollars and 23% in units, compared to FY 2012's
    nine-month period totals of $1.25 billion and 2,198 units.
    
  *In FY 2013's third quarter, the Company's net signed contracts totaled
    $992.6 million and 1,405 units, an increase of 47% in dollars and 26% in
    units compared to FY 2012's third-quarter net signed contracts of $674.4
    million and 1,119 units. The average price per unit of net contracts
    signed in FY 2013's third quarter was $706,000, compared to $678,000 in FY
    2013's second quarter and $603,000 in FY 2012's third quarter.
    
  *The Company's FY 2013 nine-month net signed contracts of $2.80 billion and
    4,131 units increased 49% in dollars and 35% units, compared to net signed
    contracts of $1.87 billion and 3,061 units in FY 2012's nine-month period.
    
  *On a per-community basis, FY 2013's third-quarter net signed contracts of
    6.24 units per community were 28% greater than FY 2012's third-quarter
    total of 4.87; 78% greater than FY 2011's third-quarter total of 3.51
    units; 69% greater than FY 2010's third-quarter total of 3.69 units; and
    75% greater than FY 2009's third-quarter total of 3.56 units. FY 2013's
    third quarter total was the highest third quarter since FY 2005.
    
  *In FY 2013, third-quarter-end backlog of $2.84 billion and 4,001 units
    increased 75% in dollars and 56% in units, compared to FY 2012's
    third-quarter-end backlog of $1.62 billion and 2,559 units.
    
  *The average price of units in FY 2013's third-quarter-end backlog was
    $709,000, compared to $693,000 at FY 2013's second-quarter end and
    $632,000 at FY 2012's third-quarter end.
    
  *In FY 2013's third quarter, SG&A as a percentage of revenue improved to
    12.9%, compared to 13.5% in FY 2012's third quarter.
    
  *FY 2013's third-quarter cancellation rate (current-quarter cancellations
    divided by current-quarter signed contracts) was 4.6%, matching the 4.6%
    in FY 2012's third quarter. As a percentage of beginning-quarter backlog,
    FY 2013's third-quarter cancellation rate was 1.9%, compared to 2.2% in FY
    2012's third quarter.
    
  *In FY 2013's third quarter, unconsolidated entities in which the Company
    had an interest delivered $8.8 million of homes, compared to $28.9 million
    in the third quarter of FY 2012. In FY 2013's first nine months,
    unconsolidated entities in which the Company had an interest delivered
    $28.7 million of homes, compared to $76.3 million in the nine-month period
    of FY 2012. The Company recorded its share of the results from these
    entities' operations in "Income from Unconsolidated Entities" on the
    Company's Statement of Operations.
    
  *In FY 2013's third quarter, unconsolidated entities in which the Company
    had an interest signed contracts for $17.7 million of homes, compared to
    $20.1 million in the third quarter of FY 2012. In FY 2013's first nine
    months, unconsolidated entities in which the Company had an interest
    signed contracts for $39.9 million of homes, compared to $79.7 million in
    the nine-month period of FY 2012.
    
  *At July 31, 2013, unconsolidated entities in which the Company had an
    interest had a backlog of $38.4 million, compared to $24.4 million at July
    31, 2012.
    
  *In FY 2013's third quarter and first nine months, the Company's Gibraltar
    Capital and Asset Management subsidiary reported pre-tax income of $4.6
    million and $8.8 million respectively, compared to FY 2012's third quarter
    and first nine month results of $0.6 million and $7.5 million.
    
  *The Company ended its FY 2013 third quarter with $1.02 billion in cash and
    marketable securities, compared to $936.0 million at 2013's second-quarter
    end and $877.4 million at FY 2012's third-quarter end. At FY 2013's
    third-quarter end, it had $815.4 million available under its then-existing
    $885 million bank credit facility. On August 1, 2013, the Company replaced
    that facility with a new $1.035 billion, 15-bank, five-year credit
    facility.
    
  *The Company repurchased approximately 490,000 shares of stock in FY 2013's
    third quarter for a total price of approximately $15.1 million at an
    average price of $30.87 per share.
    
  *The Company's Stockholders' Equity at FY 2013's third-quarter end was
    $3.22 billion, compared to $3.17 billion at FY 2013's second-quarter end.
    
  *The Company ended FY 2013's third quarter with a net-debt-to-capital
    ratio^(1) of 31.9%, compared to 31.9% at FY 2013's second-quarter end and
    27.5% at FY 2012's third-quarter end.
    
  *The Company ended FY 2013's third quarter with approximately 47,200 lots
    owned and optioned, compared to approximately 45,200 one quarter earlier,
    approximately 39,200 one year earlier, and approximately 91,200 at its
    peak at FY 2006's second-quarter end. At 2013's third-quarter end,
    approximately 33,400 of these lots were owned, of which approximately
    12,400 lots, including those in backlog, were substantially improved.
    
  *The Company ended FY 2013's third quarter with 225 selling communities,
    compared to 225 at FY 2013's second-quarter end and 226 at FY 2012's
    third-quarter end. The Company expects its community count to remain
    stable through the end of FY 2013 and to grow by 10% to 15% by FYE 2014.
    
  *Based on FY 2012's third-quarter-end backlog and the pace of activity at
    its communities, the Company currently estimates that it will deliver
    between 1,225 and 1,425 homes in its fourth quarter at an average
    delivered price of between $675,000 and $695,000 per home. This would
    produce total home sale revenues for FY 2013 of between $2.46 billion and
    $2.62 billion and total home deliveries for FY 2013 of between 3,925 and
    4,125. This compares to $1.88 billion and 3,286 homes in FY 2012.

  (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.

Toll Brothers will be broadcasting live via the Investor Relations section of
its website, www.tollbrothers.com, a conference call hosted by CEO Douglas C.
Yearley, Jr. at 2:00 p.m. (EDT) today, August 21, 2013, to discuss these
results and its outlook for the remainder of FY 2013. To access the call,
enter the Toll Brothers website, 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 online replay which will follow. Podcast
(iTunes required) and MP3 format replays will be available after the
conference call via the "Conference Calls" section of the Investor Relations
portion of the Toll Brothers website.

Toll Brothers, Inc., A FORTUNE 1000 Company, 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
under the symbol "TOL."The Company serves move-up, empty-nester,
active-adult, and second-home buyers and operates in 19 states: Arizona,
California, Colorado, Connecticut, Delaware, Florida, Illinois, Maryland,
Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New York, North
Carolina, Pennsylvania, Texas, Virginia, and Washington.

Toll Brothers builds an array of luxury residential communities, principally
on land it develops and improves: single-family detached and attached home
communities, master planned resort-style golf communities, and urban low-,
mid- and high-rise communities. The Company operates its own architectural,
engineering, mortgage, title, land development and land sale, golf course
development and management, home security, and landscape subsidiaries. The
Company also operates its own lumber distribution, house component assembly,
and manufacturing operations.The Company acquires and develops commercial
properties through Toll Commercial and its affiliate, Toll Brothers Realty
Trust, and purchases distressed loan and real estate asset portfolios through
its wholly owned subsidiary, Gibraltar Capital and Asset Management.

Toll Brothers, is honored to have won the three most coveted awards in the
homebuilding industry: America's Best Builder from the National Association of
Home Builders, the National Housing Quality Award and Builder of the
Year.Toll Brothers was awarded Builder of the Year for 2012 and is the only
two-time recipient.Toll Brothers proudly supports the communities in which it
builds; among other philanthropic pursuits, the Company sponsors the Toll
Brothers Metropolitan Opera International Radio Network, bringing opera to
neighborhoods throughout the world. For more information, visit
www.tollbrothers.com.

Information presented herein for the third quarter ended July 31, 2013 is
subject to finalization of the Company's regulatory filings, related financial
and accounting reporting procedures and external auditor procedures.

Certain information included in this release is forward-looking within the
meaning of the Private Securities Litigation Reform Act of 1995, including,
but not limited to, information related to: anticipated operating results;
anticipated financial performance, resources and condition; selling
communities; home deliveries; average home prices; consumer demand and
confidence; contract pricing; business and investment opportunities; and
market and industry trends.

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, among others: local, regional, national and international economic
conditions; fluctuating consumer demand and confidence; interest and
unemployment rates; changes in sales conditions, including home prices, in the
markets where we build homes; conditions in our newly entered markets and
newly acquired operations; the competitive environment in which we operate;
the availability and cost of land for future growth; conditions that could
result in inventory write-downs or write-downs associated with investments in
unconsolidated entities; the ability to recover our deferred tax assets; the
availability of capital; uncertainties in the capital and securities markets;
liquidity in the credit markets; changes in tax laws and their interpretation;
effects of governmental legislation and regulation; the outcome of various
legal proceedings; the availability of adequate insurance at reasonable cost;
the impact of construction defect, product liability and home warranty claims,
including the adequacy of self-insurance accruals, and the applicability and
sufficiency of our insurance coverage; the ability of customers to obtain
financing for the purchase of homes; the ability of home buyers to sell their
existing homes; the ability of the participants in various joint ventures to
honor their commitments; the availability and cost of labor and building and
construction materials; the cost of raw materials; construction delays;
domestic and international political events; and weather conditions. For a
more detailed discussion of these factors, see the information under the
captions "Risk Factors" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in our most recent annual report on Form
10-K and our subsequent quarterly reports on Form 10-Q filed with the
Securities and Exchange Commission.

Any or all of the forward-looking statements included in this release are not
guarantees of future performance and may turn out to be inaccurate.
Forward-looking statements speak only as of the date they are made. The
Company undertakes no obligation to publicly update any forward-looking
statements, whether as a result of new information, future events or
otherwise.


TOLL BROTHERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)


                                                      July 31,    October 31,
                                                       2013        2012
                                                      (Unaudited) 
ASSETS                                                            
Cash and cash equivalents                              $899,341   $778,824
Marketable securities                                  122,527    439,068
Restricted cash                                        33,416     47,276
Inventory                                              4,515,992  3,761,187
Property, construction and office equipment, net       126,360     109,971
Receivables, prepaid expenses and other assets         175,976    144,558
Mortgage loans held for sale                           72,163     86,386
Customer deposits held in escrow                       48,878     29,579
Investments in and advances to unconsolidated entities 356,837    330,617
Investment in distressed loans                         42,500     37,169
Investment in foreclosed real estate                   72,912     58,353
Deferred tax assets, net of valuation allowances       320,584    358,056
                                                      $6,787,486 $6,181,044
                                                                 
LIABILITIES AND EQUITY                                            
Liabilities:                                                      
Loans payable                                          $97,679    $99,817
Senior notes                                           2,425,806  2,080,463
Mortgage company warehouse loan                        65,654     72,664
Customer deposits                                      231,493    142,977
Accounts payable                                       153,163    99,911
Accrued expenses                                       518,447    476,350
Income taxes payable                                   78,973     80,991
Total liabilities                                      3,571,215  3,053,173
                                                                 
Equity:                                                           
Stockholders' Equity                                              
Common stock                                           1,693      1,687
Additional paid-in capital                             430,191    404,418
Retained earnings                                      2,797,098  2,721,397
Treasury stock, at cost                                (14,218)   (983)
Accumulated other comprehensive loss                   (4,687)    (4,819)
Total stockholders' equity                             3,210,077  3,121,700
Noncontrolling interest                                6,194      6,171
Total equity                                           3,216,271  3,127,871
                                                      $6,787,486 $6,181,044



TOLL BROTHERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amount in thousands, except per share data)
(unaudited)

                                  Nine Months Ended      Three Months Ended
                                   July 31,               July 31,
                                  2013        2012       2013      2012
                                                                
Revenues                           $ 1,629,765 $1,249,955 $689,160 $554,319
                                                                
Cost of revenues                   1,311,039  1,026,357 545,089  447,928
Selling, general and               246,467    212,785   88,870   74,892
administrative expenses
                                  1,557,506  1,239,142 633,959  522,820
                                                                
Income from operations             72,259   10,813   55,201  31,499
Other:                                                           
Income from unconsolidated         8,844       19,348     768       5,672
entities
Other income-net                   36,444     22,032  12,284   5,781
Income before income taxes         117,547   52,193 68,253  42,952
Income tax provision (benefit)                                   
                                   41,846   (23,536) 21,658 (18,691)
Net income                         $75,701    $75,729   $46,595  $61,643
                                                                
Income per share:                                                
Basic                              $0.45      $0.45     $0.28    $0.37
Diluted                            $0.43      $0.45     $0.26    $0.36
                                                                
Weighted-average number of shares:                               
Basic                              169,237    166,990   169,268  167,664
Diluted                            177,966    168,613   178,001  170,229
                                                                



TOLL BROTHERS, INC. AND SUBSIDIARIES
SUPPLEMENTAL DATA
(Amount in thousands)
(unaudited)

                                        Nine Months Ended  Three Months Ended
                                         July 31,           July 31,
                                        2013      2012     2013      2012
                                                                  
Impairment charges                                                 
(recoveries)recognized:
Cost of sales                            $1,977   $13,249 $239     $3,120
Income from unconsolidated entities               (1,617)          
                                        $1,977   $11,632 $239     $3,120
                                                                  
Depreciation and amortization            $19,137  $16,523 $6,370   $5,825
Interest incurred                        $100,066 $93,027 $ 36,015  $32,560
Interest expense:                                                  
Charged to cost of sales                 $71,905  $59,823 $ 28,915  $25,834
Charged to other income-net              2,045  1,664  824   82
Capitalized interest oninvestments in   4,510     2,260    1,638     1,123
unconsolidated entities
                                                                  
                                        $78,460  $63,747 $ 31,377  $27,039
                                                                  
Home sites controlled:                                             
Owned                                    33,367 31,523           
Optioned                                 13,814 7,685            
                                        47,181 39,208           


Toll Brothers operates in four geographic segments:
             
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, California, Colorado, Nevada, and Washington

                                                 
                      Three Months Ended July 31, Three Months EndedJuly 31,
                      Units                       $ (Millions)
HOME BUILDING          2013          2012          2013          2012
REVENUES
                                                             
North                  241          280          $182.8       $177.0
Mid-Atlantic           305          290          166.3        155.6
South                  296          166          195.6        97.1
West                   217          227          144.5        124.6
Total consolidated   1,059        963          $689.2       $554.3
                                                             
CONTRACTS                                                     
                                                             
North                  335          227          $237.9       $148.1
Mid-Atlantic           413          337          257.2        179.8
South                  366          264          252.8        160.1
West                   291          291          244.7        186.4
Total consolidated   1,405        1,119        $992.6       $674.4
                                                             
BACKLOG                                                       
                                                             
North                  1,089         690           $743.4       $459.9
Mid-Atlantic           1,045         721           653.4        419.5
South                  1,033         672           710.5        425.2
West                   834           476           727.7        314.0
Total consolidated     4,001        2,559        $ 2,835.0     $ 1,618.6

                                                
                                                
                      Nine Months Ended July 31, Nine Months EndedJuly 31,
                      Units                      $ (Millions)
HOME BUILDING REVENUES 2013         2012        2013          2012
                                                            
North                  589          617         $379.7       $363.8
Mid-Atlantic           823          659         446.0       360.0
South                  663          444         418.3        255.9
West                   624          478         385.8        270.3
Total consolidated   2,699        2,198       $ 1,629.8     $ 1,250.0
                                                            
CONTRACTS                                                    
                                                            
North                  1,023        754         $673.9       $516.4
Mid-Atlantic           1,210        893         713.3        490.5
South                  947        674         645.4        417.9
West                   951        740         762.4        449.0
Total consolidated   4,131       3,061       $ 2,795.0     $ 1,873.8
                                                            

Unconsolidated entities:

Information related to revenues and contracts of entities in which we have an
interest for the three-month and nine-months periods ended July 31, 2013 and
2012 is as follows:

                           2013  2012  2013    2012
                            Units Units $(Mill) $(Mill)
Three months ended July 31,                  
Revenues                    11    29    $8.8   $28.9
Contracts                   22    22    $17.7  $20.1
                                            
Nine months ended July 31,                   
Revenues                    36   82    $28.7  $76.3
Contracts                   54    89    $39.9  $79.7
                                            
                                            
Backlog at July 31,         54   33    $38.4  $24.4
                                            

CONTACT: Frederick N. Cooper (215) 938-8312
         fcooper@tollbrothersinc.com
         Joseph R. Sicree (215) 938-8045
         jsicree@tollbrothersinc.com

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