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     117  0 Kommentare Toll Brothers Reports FY 2019 4th Quarter Results

    HORSHAM, Pa., Dec. 09, 2019 (GLOBE NEWSWIRE) -- Toll Brothers, Inc. (NYSE:TOL) (www.tollbrothers.com), the nation’s leading builder of luxury homes, today announced results for its fourth quarter and fiscal year ended October 31, 2019.

    FY 2019’s Fourth Quarter Financial Highlights (Compared to FY 2018’s Fourth Quarter):

    • Net income and earnings per share were $202.3 million and $1.41 per share diluted, compared to net income of $311.0 million and $2.08 per share diluted in FY 2018’s fourth quarter.
    • Pre-tax income decreased 31% to $272.6 million, compared to $396.5 million in FY 2018’s fourth quarter.
    • Home sales revenues were $2.29 billion, down 7%; home building deliveries were 2,672, down 1%.
    • Net signed contract value was $1.68 billion, up 12%; contract units were 2,031, up 18%.
    • Backlog value at fourth-quarter end was $5.26 billion, down 5%; units in backlog totaled 6,266, up 3%.
    • Home sales gross margin was 18.8%; Adjusted Home Sales Gross Margin, which excludes interest and inventory write-downs (“Adjusted Home Sales Gross Margin”), was 21.9%.
    • SG&A, as a percentage of home sales revenues, was 9.0%.
    • Income from operations was 9.5% of total revenues.
    • Other income, income from unconsolidated entities, and land sales gross profit was $48.4 million.
    • The Company repurchased approximately 1.85 million shares of its common stock during the quarter at an average price of $35.66 per share for an aggregate purchase price of approximately $66.0 million.

    Full FY 2019 Highlights (Compared to Full FY 2018):

    • Net income and earnings per share were $590.0 million and $4.03 per share diluted, compared to net income of $748.2 million and $4.85 per share diluted, in FY 2018.
    • Pre-tax income decreased 16% to $787.2 million, compared to $933.9 million in FY 2018.
    • Home sales revenues were $7.08 billion, down 1%; home building deliveries were 8,107 units, down 2%.
    • Net signed contract value was $6.71 billion, down 12%; contract units were 8,075, down 5%.
    • Home sales gross margin was 19.8%; Adjusted Home Sales Gross Margin was 23.0%.
    • SG&A, as a percentage of home sales revenues, was 10.4%.
    • Income from operations was 9.4% of total revenues.
    • Other income, income from unconsolidated entities, and land sales gross profit was $120.3 million.
    • The Company repurchased approximately 6.6 million shares at an average price of $35.28 per share for a total purchase price of approximately $233.5 million.

    Financial Guidance:

    • First quarter deliveries of between 1,650 and 1,850 units with an average price of between $800,000 and $820,000.
    • First quarter Adjusted Home Sales Gross Margin of approximately 21.25%, which is projected to be the low point of the fiscal year.
    • First quarter SG&A, as a percentage of home sales revenues, of approximately 13.5%.  First quarter SG&A includes approximately $10 million of G&A expense that is not expected to occur in subsequent quarters of fiscal 2020.
    • First quarter other income, income from unconsolidated entities, and land sales gross profit of approximately $15 million.
    • First quarter tax rate of approximately 26.5%.
    • FYE 2020 community count growth of approximately 10%.

    Douglas C. Yearley, Jr., Toll Brothers’ chairman and chief executive officer, stated: “Fiscal 2019 ended on a strong note.  Building on steady improvement in buyer demand throughout the year, our fourth quarter contracts were up 18% in units and 12% in dollars, and our contracts per-community were up 10% compared to one year ago. Through the first six weeks of fiscal 2020's first quarter, we have seen even stronger demand than the order growth of fiscal 2019’s fourth quarter.  This market improvement should positively impact gross margins over the course of fiscal 2020.

    "We are positioning ourselves for growth as we expand our luxury brand to new price points, product lines, and geographies. Our land position and 10% increase in projected fiscal 2020 community count reflect this strategy, and, we believe, provide the platform for continued growth in coming years.

    "We are focused on improving our capital efficiency in our land acquisition process.  Additionally, in fiscal 2019 we repurchased $234 million of stock, and paid dividends totaling $0.44 per share.  As we begin fiscal 2020, we have over $3 billion of liquidity through cash and undrawn bank credit facilities with no public or bank debt maturities in the next 24 months.

    "October housing starts were at the highest level since July of 2007, while the months’ supply of homes on the market remains constrained.  Consumer confidence is healthy, household formations are strong, and interest rates and unemployment remain low.  With this positive environment as a backdrop, we are excited by our prospects for fiscal 2020."

    Toll Brothers’ Financial Highlights for the three months ended October 31, 2019 (unaudited):

    • FY 2019’s fourth quarter net income was $202.3 million, or $1.41 per share diluted, compared to FY 2018’s fourth quarter net income of $311.0 million, or $2.08 per share diluted.

    • FY 2019’s fourth quarter pre-tax income was $272.6 million, compared to FY 2018’s fourth quarter pre-tax income of $396.5 million.

    • FY 2019’s fourth quarter results included pre-tax inventory impairments totaling $10.7 million, compared to FY 2018’s fourth quarter pre-tax inventory impairments of $6.4 million.

    • FY 2019’s fourth quarter home sales revenues were $2.29 billion and 2,672 units, compared to FY 2018’s fourth quarter totals of $2.46 billion and 2,710 units.

    • FY 2019's fourth quarter net signed contracts were $1.68 billion and 2,031 units, compared to FY 2018’s fourth quarter net contracts of $1.50 billion and 1,715 units.

    • FY 2019's fourth quarter net signed contracts on a per-community basis were 6.1 units, compared to fourth quarter net signed contracts on a per-community basis of 5.6 units in FY 2018, 6.3 units in FY 2017, 5.8 in FY 2016 and 5.2 in FY 2015.

    • In FY 2019, fourth quarter-end backlog was $5.26 billion and 6,266 units, compared to FY 2018’s fourth quarter-end backlog of $5.52 billion and 6,105 units. The average price of homes in backlog was $839,000, compared to $904,600 at FY 2018’s fourth quarter end.

    • FY 2019’s fourth quarter home sales gross margin was 18.8%, compared to FY 2018’s fourth quarter home sales gross margin of 21.4%.

    • FY 2019’s fourth quarter Adjusted Home Sales Gross Margin was 21.9%, compared to FY 2018’s fourth quarter Adjusted Home Sales Gross Margin of 24.1%.

    • FY 2019’s fourth quarter interest included in cost of sales was 2.6% of revenue, compared to 2.5% in FY 2018’s fourth quarter.

    • FY 2019’s fourth quarter SG&A, as a percentage of home sales revenues, was 9.0%, compared to 7.6% in FY 2018’s fourth quarter.

    • FY 2019’s fourth quarter income from operations of $224.9 million represented 9.5% of total revenues, compared to FY 2018’s fourth quarter of $338.4 million and 13.8% of revenues.

    • FY 2019's fourth quarter other income, income from unconsolidated entities, and land sales gross profit totaled $48.4 million, compared to FY 2018’s fourth quarter of $58.0 million.

    • FY 2019’s fourth-quarter cancellation rate (current quarter cancellations divided by current quarter signed contracts) was 8.9%, compared to FY 2018’s fourth quarter cancellation rate of 9.3%.

    • FY 2019's fourth-quarter cancellation rate as a percentage of beginning quarter backlog was 2.9%, compared to FY 2018’s fourth quarter cancellation rate as a percentage of beginning quarter backlog 2.5%.

    Toll Brothers' Financial Highlights for Full FY 2019 (Compared to Full FY 2018):

    • FY 2019’s net income was $590.0 million, or $4.03 per share diluted, compared to FY 2018’s net income of $748.2 million, or $4.85 per share diluted.

    • FY 2019’s pre-tax income was $787.2 million, compared to FY 2018’s pre-tax income of $933.9 million.

    • FY 2019’s pre-tax income results included pre-tax inventory write-downs totaling $42.4 million.  FY 2018’s pre-tax income results included pre-tax inventory write-downs of $35.2 million.

    • FY 2019’s home sales revenues of $7.08 billion and 8,107 units decreased 1% in dollars and 2% in units, compared to FY 2018’s totals of $7.14 billion and 8,265 units.

    • FY 2019's net signed contracts of $6.71 billion and 8,075 units were down 12% in dollars and 5% in units, compared to net signed contracts of $7.60 billion and 8,519 units in FY 2018.

    • FY 2019's income from operations of $680.8 million represented 9.4% of total revenues in FY 2019, compared to $786.2 million and 11.0% of revenues in FY 2018.

    • FY 2019's other income, income from unconsolidated entities, and land sales gross profit totaled $120.3 million, compared to $147.7 million in FY 2018.

    Additional Financial Information:

    • During the fourth quarter of FY 2019, the Company entered into a five-year $1.905 billion senior unsecured revolving credit facility maturing in November 2024 to replace the Company's existing $1.295 billion revolving credit facility, which was scheduled to mature in May 2021.  The Company also extended the maturity of its existing $800 million senior unsecured term loan facility from November 2023 to November 2024. In addition, in September 2019, the Company issued $400 million of 3.800% senior notes due November 1, 2029 and, in October 2019, redeemed its $250 million of 6.750% senior notes due November 1, 2019.

    • The Company ended FY 2019 with $1.29 billion in cash and cash equivalents, compared to $836.3 million at FY 2019’s third-quarter end, and $1.18 billion at FYE 2018. At FYE 2019, the Company also had $1.73 billion available under its $1.905 billion bank revolving credit facility.

    • During the fourth quarter of FY 2019, the Company repurchased approximately 1.85 million shares at an average price per share of $35.66, for an aggregate purchase price of approximately $66.0 million.

    • In FY 2019, the Company repurchased approximately 6.6 million shares of its common stock at an average price of $35.28, for a total purchase price of approximately $233.5 million.

    • On October 25, 2019, the Company paid its quarterly dividend of $0.11 per share to shareholders of record at the close of business on October 11, 2019.

    • FYE 2019 Stockholders' Equity was $5.07 billion, compared to $4.76 billion at FYE 2018.

    • FY 2019's fourth-quarter end book value per share was $35.99 per share, compared to $32.57 at FY 2018’s fourth-quarter end.

    • The Company ended its FY 2019 fourth quarter with a debt-to-capital ratio of 43.6%, compared to 43.2% at FY 2019’s third-quarter end and 43.7% at FY 2018’s fourth-quarter end.  The Company ended FY 2019’s fourth quarter with a net debt-to-capital ratio (1) of 32.9%, compared to 35.9% at FY 2019’s third-quarter end, and 33.2% at FY 2018’s fourth-quarter end.

    • The Company ended FY 2019’s fourth quarter with approximately 59,200 lots owned and optioned, compared to 57,400 one quarter earlier, and 53,400 one year earlier. Approximately 36,600 of these lots were owned, of which approximately 16,800 lots, including those in backlog, were substantially improved.

    • In the fourth quarter of FY 2019, the Company spent approximately $358.7 million on land to purchase approximately 4,509 lots.

    • The Company ended FY 2019’s fourth quarter with 333 selling communities, compared to 322 at FY 2019’s third-quarter end and 315 at FY 2018’s fourth-quarter end.

      (1) See “Reconciliation of Non-GAAP Measures” below for more information on the calculation of the Company’s net debt-to-capital ratio.

    Toll Brothers will be broadcasting live via the Investor Relations section of its website, www.tollbrothers.com, a conference call hosted by Chairman & CEO Douglas C. Yearley, Jr. at 11:00 a.m. (EST) Tuesday, December 10, 2019, to discuss these results and its outlook for the first quarter of FY 2020. To access the call, enter the Toll Brothers website, click on the Investor Relations page, and select "Events & Presentations.” 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.

    Toll Brothers, Inc., A FORTUNE 500 Company, is the nation's leading builder of luxury homes. The Company began business over fifty years ago 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, as well as urban and suburban renters. It operates in 23 states: Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Maryland, Massachusetts, Michigan, Nevada, New Jersey, New York, North Carolina, Oregon, Pennsylvania, South Carolina, Texas, Utah, Virginia, and Washington, as well as in the District of Columbia.

    Toll Brothers builds an array of luxury residential single-family detached, attached home, master planned resort-style golf, and urban low-, mid-, and high-rise communities, principally on land it develops and improves. The Company acquires and develops rental apartment and commercial properties through Toll Brothers Apartment Living, Toll Brothers Campus Living, and the affiliated Toll Brothers Realty Trust, and develops urban low-, mid-, and high-rise for-sale condominiums through Toll Brothers City Living. The Company operates its own architectural, engineering, mortgage, title, land development and land sale, golf course development and management, and landscape subsidiaries.  Toll Brothers also operates its own security company, TBI Smart Home Solutions, which also provides homeowners with home automation and a full range of technology solutions. The Company also operates its own lumber distribution, house component assembly, and manufacturing operations. Through its Gibraltar Real Estate Capital joint venture, the Company provides builders and developers with land banking, non-recourse debt and equity capital.

    In 2019, Toll Brothers was named World’s Most Admired Home Building Company in Fortune magazine’s survey of the World’s Most Admired Companies, the fifth year in a row it has been so honored. Toll Brothers has won numerous other awards, including Builder of the Year from both Professional Builder magazine and Builder magazine, the first two-time recipient from Builder magazine. For more information, visit www.tollbrothers.com.

    Toll Brothers discloses information about its business and financial performance and other matters, and provides links to its securities filings, notices of investor events, and earnings and other news releases, on the Investor Relations section of its website (investors.tollbrothers.com).

    Forward-Looking Statements

    Information presented herein for the fourth quarter ended October 31, 2019 is subject to finalization of the Company's regulatory filings, related financial and accounting reporting procedures and external auditor procedures.

    This release contains or may contain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act.  One can identify these statements by the fact that they do not relate to matters of a strictly historical or factual nature and generally discuss or relate to future events.  These statements contain words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “may,” “can,” “could,” “might,” “should” and other words or phrases of similar meaning. Such statements may include, but are not limited to, information related to market conditions; demand for our homes; anticipated operating results; home deliveries; financial resources and condition; changes in revenues; changes in profitability; changes in margins; changes in accounting treatment; cost of revenues; selling, general and administrative expenses; interest expense; inventory write-downs; home warranty and construction defect claims; unrecognized tax benefits; anticipated tax refunds; sales paces and prices; effects of home buyer cancellations; growth and expansion; joint ventures in which we are involved; anticipated results from our investments in unconsolidated entities; the ability to acquire land and pursue real estate opportunities; the ability to gain approvals and open new communities; the ability to sell homes and properties; the ability to deliver homes from backlog; the ability to secure materials and subcontractors; the ability to produce the liquidity and capital necessary to expand and take advantage of opportunities; and legal proceedings, investigations and claims.

    Any or all of the forward-looking statements included in our reports or public statements made by us are not guarantees of future performance and may turn out to be inaccurate. This can occur as a result of incorrect assumptions or as a consequence of known or unknown risks and uncertainties.  Many factors mentioned in our reports or public statements made by us, such as market conditions, government regulation, and the competitive environment, will be important in determining our future performance.  Consequently, actual results may differ materially from those that might be anticipated from our forward-looking statements.

    The factors that could cause actual results to differ from those expressed or implied by our forward-looking statements include, among others: demand fluctuations in the housing industry; adverse changes in economic conditions in markets where we conduct our operations and where prospective purchasers of our homes live; increases in cancellations of existing agreements of sale; the competitive environment in which we operate; changes in interest rates or our credit ratings; the availability of capital; uncertainties in the capital and securities markets; the ability of customers to obtain financing for the purchase of homes; the availability and cost of land for future growth; the ability of the participants in various joint ventures to honor their commitments; effects of governmental legislation and regulation; effects of increased taxes or governmental fees; weather conditions; the availability and cost of labor and building and construction materials; the cost of raw materials; the outcome of various product liability claims, litigation and warranty claims; the effect of the loss of key management personnel; changes in tax laws and their interpretation; construction delays; and the seasonal nature of our business.  For a more detailed discussion of these factors, see the risk factors in the information under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our most recent periodic reports filed on Forms 10-K and 10-Q with the SEC.

    From time to time, forward-looking statements also are included in our periodic reports on Forms 10-K, 10-Q and 8-K, in press releases, in presentations, on our website and in other materials released to the public.

    This discussion is provided as permitted by the Private Securities Litigation Reform Act of 1995, and all of our forward-looking statements are expressly qualified in their entirety by the cautionary statements contained or referenced in this section.

    Forward-looking statements speak only as of the date they are made.  We undertake 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)

      October 31,
     2019
      October 31,
     2018
      (Unaudited)    
    ASSETS      
    Cash and cash equivalents $ 1,286,014     $ 1,182,195  
    Inventory 7,873,048     7,598,219  
    Property, construction and office equipment, net 273,412     193,281  
    Receivables, prepaid expenses and other assets 715,441     550,778  
    Mortgage loans held for sale 218,777     170,731  
    Customer deposits held in escrow 74,403     117,573  
    Investments in unconsolidated entities 366,252     431,813  
    Income taxes receivable 20,791      
      $ 10,828,138     $ 10,244,590  
           
    LIABILITIES AND EQUITY      
    Liabilities:      
    Loans payable $ 1,111,449     $ 686,801  
    Senior notes 2,659,898     2,861,375  
    Mortgage company loan facility 150,000     150,000  
    Customer deposits 385,596     410,864  
    Accounts payable 348,599     362,098  
    Accrued expenses 950,932     973,581  
    Income taxes payable 102,971     30,959  
    Total liabilities 5,709,445     5,475,678  
           
    Equity:      
    Stockholders’ Equity      
    Common stock 1,529     1,779  
    Additional paid-in capital 726,879     727,053  
    Retained earnings 4,774,422     5,161,551  
    Treasury stock, at cost (425,183 )   (1,130,878 )
    Accumulated other comprehensive (loss) income (5,831 )   694  
    Total stockholders' equity 5,071,816     4,760,199  
    Noncontrolling interest 46,877     8,713  
    Total equity 5,118,693     4,768,912  
      $ 10,828,138     $ 10,244,590  


    TOLL BROTHERS, INC. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    (Amounts in thousands, except per share data and percentages)
    (Unaudited)

      Twelve Months Ended
    October 31,
      Three Months Ended
    October 31,
      2019   2018   2019   2018
      $ %   $ %   $ %   $ %
    Revenues:                      
    Home sales $ 7,080,379       $ 7,143,258       $ 2,292,044       $ 2,455,238    
    Land sales (1) 143,587             86,956          
      7,223,966       7,143,258       2,379,000       2,455,238    
                           
    Cost of revenues:                      
    Home sales 5,678,914   80.2 %   5,673,007   79.4 %   1,860,567   81.2 %   1,930,751   78.6 %
    Land sales (1) 129,704   90.3 %           86,298   99.2 %        
      5,808,618         5,673,007         1,946,865         1,930,751      
                                   
    Gross margin - home sales 1,401,465   19.8 %   1,470,251   20.6 %   431,477   18.8 %   524,487   21.4 %
    Gross margin - land sales (1) 13,883   9.7 %           658   0.8 %        
                                   
    Selling, general and administrative expenses $ 734,548   10.4 %   $ 684,035   9.6 %   $ 207,230   9.0 %   $ 186,045   7.6 %
    Income from operations 680,800   9.4 %   786,216   11.0 %   224,905   9.5 %   338,442   13.8 %
                           
    Other:                      
    Income from unconsolidated entities 24,868       85,240       7,109       31,327    
    Other income - net 81,502       62,460       40,635       26,704    
    Income before income taxes 787,170       933,916       272,649       396,473    
    Income tax provision 197,163       185,765       70,334       85,497    
    Net income $ 590,007       $ 748,151       $ 202,315       $ 310,976    
    Per share:                      
    Basic earnings $ 4.07       $ 4.92       $ 1.43       $ 2.10    
    Diluted earnings $ 4.03       $ 4.85       $ 1.41       $ 2.08    
    Cash dividend declared $ 0.44       $ 0.41       $ 0.11       $ 0.11    
    Weighted-average number of shares:                      
    Basic 145,008       151,984       141,909       148,066    
    Diluted 146,501       154,201       143,567       149,603    
                           
    Effective tax rate 25.0 %     19.9 %     25.8 %     21.6 %  

    (1)   On November 1, 2018, we adopted Accounting Standard Update No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”).  Upon adoption, land sale activity is presented as part of income from operations where previously it was included in "Other income - net."  Prior periods are not restated.  During the year ended October 31, 2018, we recognized land sales revenues and land sales cost of revenues of $134.3 million and $128.0 million, respectively.  During the three months ended October 31, 2018, we recognized land sales revenues and land sales cost of revenues of $78.2 million and $76.0 million, respectively.


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

      Twelve Months Ended
    October 31,
      Three Months Ended
    October 31,
      2019   2018   2019   2018
    Impairment charges recognized:              
    Cost of home sales - land owned/controlled for future communities $ 11,285     $ 5,005     $ 4,029     $ 2,385  
    Cost of home sales - operating communities 31,075     30,151     6,695     4,025  
      $ 42,360     $ 35,156     $ 10,724     $ 6,410  
                   
    Depreciation and amortization $ 72,149     $ 25,259     $ 20,726     $ 6,535  
    Interest incurred $ 178,035     $ 165,977     $ 46,205     $ 42,949  
    Interest expense:              
    Charged to home sales cost of sales $ 185,045     $ 190,734     $ 59,183     $ 61,819  
    Charged to land sales cost of sales 1,787         842      
    Charged to other income - net     3,760         1,501  
      $ 186,832     $ 194,494     $ 60,025     $ 63,320  
                   
    Home sites controlled: October 31,
     2019
      October 31,
     2018
           
    Owned 36,567     32,503          
    Optioned 22,663     20,919          
      59,230     53,422          


    Inventory at October 31, 2019 and October 31, 2018 consisted of the following (amounts in thousands):

      October 31,
     2019
      October 31,
     2018
    Land and land development costs $ 2,304,949     $ 1,917,354  
    Construction in progress 4,984,989     4,917,917  
    Sample homes 414,107     493,037  
    Land deposits and costs of future development 169,003     245,114  
    Other     24,797  
      $ 7,873,048     $ 7,598,219  


    Toll Brothers operates in two segments: Traditional Home Building and Urban Infill ("City Living").  Within Traditional Home Building, Toll operates in five geographic segments:

    North:   Connecticut, Illinois, Massachusetts, Michigan, New Jersey and New York
    Mid-Atlantic:   Delaware, Maryland, Pennsylvania and Virginia
    South:   Florida, Georgia, North Carolina, South Carolina and Texas
    West:   Arizona, Colorado, Idaho, Nevada, Oregon, Utah and Washington
    California:   California


      Three Months Ended
    October 31,
      Units   $ (Millions)   Average Price Per Unit $
      2019   2018   2019   2018   2019   2018
    REVENUES                      
    North 473     503     $ 321.0     $ 348.9     $ 678,600     $ 693,700  
    Mid-Atlantic 567     583     363.7     375.2     641,500     643,600  
    South 624     449     433.5     333.9     694,800     743,700  
    West 553     628     398.9     461.5     721,200     734,800  
    California 427     500     746.6     872.6     1,748,500     1,745,100  
    Traditional Home Building 2,644     2,663     2,263.7     2,392.1     856,200     898,300  
    City Living 28     47     28.6     63.1     1,022,500     1,343,600  
    Corporate and other         (0.3 )            
    Total home sales 2,672     2,710     2,292.0     2,455.2     $ 857,800     $ 906,000  
    Land sales         87.0              
    Total consolidated         $ 2,379.0     $ 2,455.2          
                           
    CONTRACTS                      
    North 317     347     $ 222.4     $ 238.4     $ 701,600     $ 687,100  
    Mid-Atlantic 397     383     268.4     255.3     675,900     666,700  
    South 474     319     308.9     242.9     651,700     761,400  
    West 611     418     470.8     313.5     770,600     750,000  
    California 186     226     346.5     410.4     1,862,900     1,815,800  
    Traditional Home Building 1,985     1,693     1,617.0     1,460.5     814,600     862,700  
    City Living 46     22     58.5     38.1     1,271,800     1,732,900  
    Total consolidated 2,031     1,715     $ 1,675.5     $ 1,498.6     $ 825,000     $ 873,800  
                           
    BACKLOG                      
    North 1,076     1,098     $ 757.1     $ 768.5     $ 703,600     $ 699,900  
    Mid-Atlantic 1,159     1,142     785.1     758.8     677,400     664,400  
    South 1,339     1,166     930.0     903.2     694,600     774,600  
    West 1,738     1,400     1,321.2     1,031.1     760,200     736,500  
    California 842     1,133     1,314.1     1,883.3     1,560,700     1,662,200  
    Traditional Home Building 6,154     5,939     5,107.5     5,344.9     829,900     900,000  
    City Living 112     166     149.6     177.6     1,335,600     1,069,700  
    Total consolidated 6,266     6,105     $ 5,257.1     $ 5,522.5     $ 839,000     $ 904,600  


      Twelve Months Ended
    October 31,
      Units   $ (Millions)   Average Price Per Unit $
      2019   2018   2019   2018   2019   2018
    REVENUES                      
    North 1,325     1,453     $ 923.3     $ 975.7     $ 696,800     $ 671,500  
    Mid-Atlantic 1,708     1,800     1,112.8     1,141.1     651,500     633,900  
    South 1,725     1,391     1,244.6     1,045.4     721,500     751,500  
    West 1,965     2,130     1,418.0     1,451.4     721,600     681,400  
    California 1,180     1,322     2,129.5     2,208.7     1,804,700     1,670,700  
    Traditional Home Building 7,903     8,096     6,828.2     6,822.3     864,000     842,700  
    City Living 204     169     253.2     321.0     1,241,200     1,899,400  
    Corporate and other         (1.0 )            
    Total home sales 8,107     8,265     7,080.4     7,143.3     $ 873,400     $ 864,300  
    Land sales         143.6              
    Total consolidated         $ 7,224.0     $ 7,143.3          
                           
    CONTRACTS                      
    North 1,303     1,334     $ 910.1     $ 928.1     $ 698,500     $ 695,700  
    Mid-Atlantic 1,725     1,799     1,137.8     1,158.3     659,600     643,900  
    South 1,705     1,502     1,177.3     1,132.7     690,500     754,100  
    West 2,303     2,133     1,705.7     1,510.5     740,600     708,200  
    California 889     1,568     1,555.3     2,596.9     1,749,500     1,656,200  
    Traditional Home Building 7,925     8,336     6,486.2     7,326.5     818,400     878,900  
    City Living 150     183     224.7     277.8     1,498,000     1,518,000  
    Total consolidated 8,075     8,519     $ 6,710.9     $ 7,604.3     $ 831,100     $ 892,600  


    Unconsolidated entities:

    Information related to revenues and contracts of entities in which we have an interest for the three-month and twelve-month periods ended October 31, 2019 and 2018, and for backlog at October 31, 2019 and 2018 is as follows:

      Units   $ (Millions)   Average Price Per Unit $
      2019   2018   2019   2018   2019   2018
    Three months ended October 31,                      
    Revenues 81     27     $ 158.4     $ 44.0     $ 1,955,200     $ 1,631,400  
    Contracts 9     13     $ 32.5     $ 42.6     $ 3,607,700     $ 3,279,700  
                           
    Twelve months ended October 31,                      
    Revenues 186     100     $ 376.0     $ 148.0     $ 2,021,300     $ 1,480,000  
    Contracts 40     156     $ 131.0     $ 301.9     $ 3,274,200     $ 1,935,100  
                           
    Backlog at October 31, 26     172     $ 76.3     $ 321.3     $ 2,935,200     $ 1,868,100  


    RECONCILIATION OF NON-GAAP MEASURES

    This press release contains, and Company management’s discussion of the results presented in this press release may include, information about the Company’s Adjusted Homes Sales Gross Margin and the Company’s net debt-to-capital ratio.

    These two measures are non-GAAP financial measures which are not calculated in accordance with generally accepted accounting principles (“GAAP”). These non-GAAP financial measures should not be considered a substitute for, or superior to, the comparable GAAP financial measures, and may be different from non-GAAP measures used by other companies in the homebuilding business.

    The Company’s management considers these non-GAAP financial measures as we make operating and strategic decisions and evaluate our performance, including against other homebuilders that may use similar non-GAAP financial measures. The Company’s management believes these non-GAAP financial measures are useful to investors in understanding our operations and leverage and may be helpful in comparing the Company to other homebuilders to the extent they provide similar information.

    Adjusted Home Sales Gross Margin
    The following table reconciles the Company’s homes sales gross margin as a percentage of homes sale revenues (calculated in accordance with GAAP) to the Company’s Adjusted Homes Sales Gross Margin (a non-GAAP financial measure).  Adjusted Homes Sales Gross Margin is calculated as (i) homes sales gross margin plus interest recognized in homes sales cost of revenues plus inventory write-downs recognized in home sales cost of revenues divided by (ii) homes sale revenues.

    Adjusted Home Sales Gross Margin Reconciliation
    (Amounts in thousands, except percentages)

        Three Months Ended
    October 31,
      Twelve Months Ended
    October 31,
        2019   2018   2019   2018
    Revenues - homes sales $ 2,292,044     $ 2,455,238     $ 7,080,379     $ 7,143,258  
    Cost of revenues - home sales 1,860,567     1,930,751     5,678,914     5,673,007  
    Home sales gross margin 431,477     524,487     1,401,465     1,470,251  
    Add: Interest recognized in cost of revenues - home sales 59,183     61,819     185,045     190,734  
      Inventory write-downs 10,724     6,410     42,360     35,156  
    Adjusted homes sales gross margin $ 501,384     $ 592,716     $ 1,628,870     $ 1,696,141  
                     
    Homes sales gross margin as a percentage of home sale revenues 18.8 %   21.4 %   19.8 %   20.6 %
                     
    Adjusted Home Sales Gross Margin as a percentage of home sale revenues 21.9 %   24.1 %   23.0 %   23.7 %
                     

    The Company’s management believes Adjusted Home Sales Gross Margin is a useful financial measure to investors because it allows them to evaluate the performance of our homebuilding operations without the often varying effects of capitalized interest costs and inventory impairments. The use of Adjusted Home Sales Gross Margin also assists the Company’s management in assessing the profitability of our homebuilding operations and making strategic decisions regarding community location and product mix.

    Forward-looking Adjusted Homes Sales Gross Margin
    The Company has not provided projected first quarter 2020 homes sales gross margin or a GAAP reconciliation for forward-looking Adjusted Homes Sales Gross Margin because such measure cannot be provided without unreasonable efforts on a forward-looking basis, since inventory write-downs are based on future activity and observation and therefore cannot be projected for the first quarter. The variability of these charges may have a potentially unpredictable, and potentially significant, impact on our first quarter fiscal 2020 homes sales gross margin.

    Net Debt-to-Capital Ratio
    The following table reconciles the Company’s ratio of debt to capital (calculated in accordance with GAAP) to the Company’s net debt-to-capital ratio (a non-GAAP financial measure). The net debt-to-capital ratio is calculated as (i) total debt minus mortgage warehouse loans minus cash and cash equivalents divided by (ii) total debt minus mortgage warehouse loans minus cash and cash equivalents plus stockholders’ equity.

    Net Debt-to-Capital Ratio Reconciliation
    (Amounts in thousands, except percentages)

        October 31, 2019   October 31, 2018   July 31, 2019
    Loans payable $ 1,111,449     $ 686,801     $ 1,089,137  
    Senior notes 2,659,898     2,861,375     2,512,877  
    Mortgage company loan facility 150,000     150,000     150,000  
    Total debt 3,921,347     3,698,176     3,752,014  
    Total stockholders' equity 5,071,816     4,760,199     4,939,085  
    Total capital $ 8,993,163     $ 8,458,375     $ 8,691,099  
    Ratio of debt-to-capital 43.6 %   43.7 %   43.2 %
                 
    Total debt $ 3,921,347     $ 3,698,176     $ 3,752,014  
    Less: Mortgage company loan facility (150,000 )   (150,000 )   (150,000 )
      Cash and cash equivalents (1,286,014 )   (1,182,195 )   (836,258 )
    Total net debt 2,485,333     2,365,981     2,765,756  
    Total stockholders' equity 5,071,816     4,760,199     4,939,085  
    Total net capital $ 7,557,149     $ 7,126,180     $ 7,704,841  
    Net debt-to-capital ratio 32.9 %   33.2 %   35.9 %

    The Company’s management uses the net debt-to-capital ratio as an indicator of its overall leverage and believes it is a useful financial measure to investors in understanding the leverage employed in the Company’s operations.

    CONTACT: Frederick N. Cooper (215) 938-8312
    fcooper@tollbrothers.com 

    A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/3cfe878b-a396-444f ...

     



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    Toll Brothers Reports FY 2019 4th Quarter Results HORSHAM, Pa., Dec. 09, 2019 (GLOBE NEWSWIRE) - Toll Brothers, Inc. (NYSE:TOL) (www.tollbrothers.com), the nation’s leading builder of luxury homes, today announced results for its fourth quarter and fiscal year ended October 31, 2019. FY 2019’s …

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