Toll Brothers, Inc. (NYSE:TOL) (TollBrothers.com), the nation’s
leading builder of luxury homes, today announced results for its
fourth quarter ended October 31, 2024.
FY
2024’s Fourth
Quarter Financial Highlights (Compared to FY
2023’s Fourth Quarter):
- Net income and earnings per share
were $475.4 million and $4.63 per diluted share, compared to net
income of $445.5 million and $4.11 per diluted share in FY 2023’s
fourth quarter.
- Pre-tax income was $621.1 million,
compared to $605.0 million in FY 2023’s fourth quarter.
- Home sales revenues were $3.26
billion, up 10% compared to FY 2023’s fourth quarter; delivered
homes were 3,431, up 25%.
- Net signed contract value was $2.66
billion, up 32% compared to FY 2023’s fourth quarter; contracted
homes were 2,658, up 30%.
- Backlog value was $6.47 billion at
fourth quarter end, down 7% compared to FY 2023’s fourth quarter;
homes in backlog were 5,996, down 9%.
- Home sales gross margin was 26.0%,
compared to FY 2023’s fourth quarter home sales gross margin of
27.5%.
- Adjusted home sales gross margin,
which excludes interest and inventory write-downs, was 27.9%,
compared to FY 2023’s fourth quarter adjusted home sales gross
margin of 29.1%.
- SG&A, as a percentage of home
sales revenues, was 8.3%, compared to 8.2% in FY 2023’s fourth
quarter.
- Income from operations was $611.1
million.
- Other income, income from
unconsolidated entities, and gross margin from land sales and other
was $44.5 million.
- The Company repurchased
approximately 1.3 million shares at an average price of
$150.19 per share for a total purchase price of $200.9
million.
Full FY 2024 Financial
Highlights (Compared to Full FY
2023):
- Net income was $1.57 billion, and
earnings per share were $15.01 diluted, compared to net income of
$1.37 billion and $12.36 per share diluted in FY 2023.
- Net income and earnings per share
included $124.1 million and $1.19, respectively, related to the
sale of a parcel of land to a commercial developer in our second
quarter. Excluding this gain, net income and earnings per share
were $1.45 billion and $13.82 per diluted share in FY 2024.
- Pre-tax income was $2.09 billion,
compared to $1.84 billion in FY 2023.
- Home sales revenues were $10.56
billion, up 7% compared to FY 2023; delivered homes were 10,813, up
13%.
- Net signed contract value was
$10.07 billion, up 27% compared to FY 2023; contracted homes were
10,231, up 27%.
- Home sales gross margin was 26.6%,
compared to FY 2023’s home sales gross margin of 26.9%.
- Adjusted home sales gross margin,
which excludes interest and inventory write-downs, was 28.4%,
compared to FY 2023’s adjusted home sales gross margin of
28.7%.
- SG&A, as a percentage of home
sales revenues, was 9.3%, compared to 9.2% in FY 2023.
- Income from operations was $2.04
billion.
- Other income, income from
unconsolidated entities, and gross margin from land sales and other
was $258.0 million.
- The Company repurchased
approximately 4.9 million shares at an average price of $127.79 per
share for a total purchase price of $627.9 million
Douglas C. Yearley, Jr., chairman and chief
executive officer, stated: “I am very pleased with our fourth
quarter results, which cap the strongest year ever for Toll
Brothers. For the full year, we generated a record $10.6 billion of
home sales revenue, earned $15.01 per diluted share and grew
contracts by 27% in both units and dollars. In the fourth quarter,
we delivered 3,431 homes and generated $3.3 billion in home sales
revenues, up 25% in units and 10% in dollars compared to last
year’s fourth quarter. Our fourth quarter adjusted gross margin was
27.9%, beating guidance by 40 basis points, and our SG&A
expense was 8.3% of home sales revenues, or 30 basis points better
than guidance. Our strong margin performance and better than
projected home sales revenues drove earnings of $4.63 per diluted
share in the quarter, up 13% compared to last year. We also signed
2,658 net contracts at an average price of $1,000,000, up 30% in
units and 32% in dollars compared to last year’s fourth quarter.
Our performance this year and in the fourth quarter demonstrates
the power of our luxury brand, the financial strength of our
buyers, and the success of our strategies of increasing our spec
home production and widening our geographies, price points and
product lines.
“Since the start of our fiscal 2025 six weeks
ago we have seen strong demand, which is encouraging as we approach
the beginning of the spring selling season in mid-January. We are
well positioned with communities in over 60 markets across 24
states featuring the widest offering of luxury homes and serving
the most affluent customers in our industry. Last year, we
increased community count by 10% and are targeting a similar
increase in fiscal 2025. We also owned or controlled approximately
74,700 lots at year end, providing sufficient land for further
growth in fiscal 2026 and beyond.
“In fiscal 2024, we generated a return on
beginning equity of 23.1%, driven by our record earnings and strong
cash flows that allowed us to return approximately $720 million of
capital to shareholders. Our healthy balance sheet, low leverage,
and ample liquidity, including significant projected cash flows
from operations in fiscal 2025, should allow us to continue
investing in our business while returning cash to shareholders well
into the future.”
| First
Quarter and FY 2025 Financial Guidance: |
|
|
First Quarter |
|
Full Fiscal Year |
|
Deliveries |
1,900 - 2,100 units |
|
|
11,200 - 11,600 units |
|
| Average
Delivered Price per Home |
$925,000 - $945,000 |
|
|
$945,000 - $965,000 |
|
| Adjusted
Home Sales Gross Margin |
26.25 |
% |
|
27.25 |
% |
|
SG&A, as a Percentage of Home Sales Revenues |
12.7 |
% |
|
9.4% - 9.5 |
% |
|
Period-End Community Count |
410 |
|
|
440 - 450 |
|
| Other
Income, Income from Unconsolidated Entities, and Gross Margin from
Land Sales and Other |
$33 million |
|
|
$110 million |
|
| Tax
Rate |
22.0 |
% |
|
25.5 |
% |
|
|
|
|
|
|
|
| Financial
Highlights for the three months ended October 31, 2024 and 2023
(unaudited): |
|
|
2024 |
|
2023 |
|
Net Income |
$475.4 million, or $4.63 per share diluted |
|
|
$445.5 million, or $4.11 per share diluted |
|
| Pre-Tax
Income |
$621.1 million |
|
|
$605.0 million |
|
| Pre-Tax
Inventory Impairments included in Home Sales Costs of Revenues |
$24.1 million |
|
|
$8.3 million |
|
| Home
Sales Revenues |
$3.26 billion and 3,431 units |
|
|
$2.95 billion and 2,755 units |
|
| Net
Signed Contracts |
$2.66 billion and 2,658 units |
|
|
$2.01 billion and 2,038 units |
|
| Net
Signed Contracts per Community |
6.5 units |
|
|
5.7 units |
|
|
Quarter-End Backlog |
$6.47 billion and 5,996 units |
|
|
$6.95 billion and 6,578 units |
|
| Average
Price per Home in Backlog |
$1,078,700 |
|
|
$1,055,800 |
|
| Home
Sales Gross Margin |
26.0 |
% |
|
27.5 |
% |
| Adjusted
Home Sales Gross Margin |
27.9 |
% |
|
29.1 |
% |
| Interest
Included in Home Sales Cost of Revenues, as a percentage of Home
Sales Revenues |
1.2 |
% |
|
1.4 |
% |
|
SG&A, as a percentage of Home Sales Revenues |
8.3 |
% |
|
8.2 |
% |
| Income
from Operations |
$611.1 million, or 18.3% of total revenues |
|
|
$558.6 million, or 18.5% of total revenues |
|
| Other
Income, Income from Unconsolidated Entities, and Gross Margin from
Land Sales and Other |
$44.5 million |
|
|
$36.0 million |
|
| Pre-Tax
Land and Other Impairments included in Land Sales and Other Costs
of Revenues |
$— million |
|
|
$12.9 million |
|
|
Quarterly Cancellations as a Percentage of Beginning-Quarter
Backlog |
2.5 |
% |
|
3.4 |
% |
|
Quarterly Cancellations as a Percentage of Signed Contracts in
Quarter |
5.9 |
% |
|
10.8 |
% |
|
|
|
|
|
|
|
| Financial
Highlights for the twelve months ended October 31, 2024 and 2023
(unaudited): |
|
|
2024 |
|
2023 |
|
Net Income |
$1.57 billion, or $15.01 per share diluted |
|
|
$1.37 billion, or $12.36 per share diluted |
|
| Pre-Tax
Income |
$2.09 billion |
|
|
$1.84 billion |
|
| Pre-Tax
Inventory Impairments included in Home Sales Costs of Revenues |
$59.4 million |
|
|
$30.7 million |
|
| Home
Sales Revenues |
$10.56 billion and 10,813 units |
|
|
$9.87 billion and 9,597 units |
|
| Net
Signed Contracts |
$10.07 billion and 10,231 units |
|
|
$7.91 billion and 8,077 units |
|
| Home
Sales Gross Margin |
26.6 |
% |
|
26.9 |
% |
| Adjusted
Home Sales Gross Margin |
28.4 |
% |
|
28.7 |
% |
| Interest
Included in Home Sales Cost of Revenues, as a percentage of Home
Sales Revenues |
1.2 |
% |
|
1.4 |
% |
|
SG&A, as a percentage of Home Sales Revenues |
9.3 |
% |
|
9.2 |
% |
| Income
from Operations |
$2.04 billion, or 18.8% of total revenues |
|
|
$1.72 billion, or 17.3% of total revenues |
|
| Other
Income, Income from Unconsolidated Entities, and Gross Margin from
Land Sales and Other |
$258.0 million |
|
|
$93.1 million |
|
| Pre-Tax
Land and Other Impairments included in Land Sales and Other Costs
of Revenues |
$4.4 million |
|
|
$30.6 million |
|
|
|
|
|
|
|
|
Additional Information:
- The Company
ended its FY 2024 fourth quarter with $1.30 billion in cash and
cash equivalents, compared to $1.30 billion at FYE 2023 and $893.4
million at FY 2024’s third quarter end. At FY 2024 fourth quarter
end, the Company also had $1.77 billion available under its $1.96
billion revolving credit facility, which is scheduled to mature in
February 2028.
- On
October 25, 2024, the Company paid its quarterly dividend of
$0.23 per share to shareholders of record at the close of business
on October 11, 2024.
- Stockholders’
equity at FY 2024 fourth quarter end was $7.67 billion, compared to
$6.80 billion at FYE 2023.
- FY 2024’s fourth
quarter-end book value per share was $76.87 per share, compared to
$65.49 at FYE 2023.
- The Company
ended its FY 2024’s fourth quarter with a debt-to-capital ratio of
27.0%, compared to 27.6% at FY 2024’s third quarter end and 29.6%
at FYE 2023. The Company ended FY 2024’s fourth quarter with a net
debt-to-capital ratio(1) of 15.3%, compared to 19.6% at FY 2024’s
third quarter end, and 17.7% at FYE 2023.
- The Company
ended FY 2024’s fourth quarter with approximately 74,700 lots owned
and optioned, compared to 72,700 one quarter earlier, and 70,700
one year earlier. Approximately 45% or 34,000, of these lots were
owned, of which approximately 19,400 lots, including those in
backlog, were substantially improved.
- In the fourth
quarter of FY 2024, the Company spent approximately $258.6 million
on land to purchase approximately 1,910 lots.
- The Company
ended FY 2024’s fourth quarter with 408 selling communities,
compared to 404 at FY 2024’s third quarter end and 370 at FY 2023’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,
investors.TollBrothers.com, a conference call hosted by chairman
and chief executive officer Douglas C. Yearley, Jr. at 8:30 a.m.
(ET) Tuesday, December 10, 2024, to discuss these results and its
outlook for the first quarter and FY 2025. 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.
ABOUT TOLL BROTHERSToll
Brothers, Inc., a Fortune 500 Company, is the nation’s leading
builder of luxury homes. The Company was founded 57 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 first-time, move-up, empty-nester, active-adult, and
second-home buyers, as well as urban and suburban renters. Toll
Brothers builds in over 60 markets in 24 states: Arizona,
California, Colorado, Connecticut, Delaware, Florida, Georgia,
Idaho, Indiana, Maryland, Massachusetts, Michigan, Nevada, New
Jersey, New York, North Carolina, Oregon, Pennsylvania, South
Carolina, Tennessee, Texas, Utah, Virginia, and Washington, as well
as in the District of Columbia. The Company operates its own
architectural, engineering, mortgage, title, land development,
insurance, smart home technology, and landscape subsidiaries. The
Company also develops master-planned and golf course communities as
well as operates its own lumber distribution, house component
assembly, and manufacturing operations.
In 2024, Toll Brothers marked 10 years in a row
being named to the Fortune World’s Most Admired Companies™ list and
the Company’s Chairman and CEO Douglas C. Yearley, Jr. was named
one of 25 Top CEOs by Barron’s magazine. Toll Brothers has also
been named Builder of the Year by Builder magazine and is the first
two-time recipient of Builder of the Year from Professional Builder
magazine. For more information visit 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).
From Fortune, ©2024 Fortune Media IP Limited.
All rights reserved. Used under license.
FORWARD-LOOKING STATEMENTS
Information presented herein for the fourth
quarter ended October 31, 2024 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 the Private
Securities Litigation Reform Act of 1995. 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,” “likely,”
“will,” and other words or phrases of similar meaning. Such
statements may include, but are not limited to, information and
statements regarding: expectations regarding inflation and interest
rates; the markets in which we operate or may operate; our
strategic priorities; our land acquisition, land development and
capital allocation priorities; market conditions; demand for our
homes; our build-to-order and spec home strategy; anticipated
operating results and guidance; home deliveries; financial
resources and condition; changes in revenues; changes in
profitability; changes in margins; changes in accounting treatment;
cost of revenues, including expected labor and material costs;
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; our
ability to acquire or dispose of land and pursue real estate
opportunities; our ability to gain approvals and open new
communities; our ability to market, construct and sell homes and
properties; our ability to deliver homes from backlog; our ability
to secure materials and subcontractors; our ability to produce the
liquidity and capital necessary to conduct normal business
operations or to expand and take advantage of opportunities; and
the outcome of legal proceedings, investigations, and claims.
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. This can occur as a result of
incorrect assumptions or as a consequence of known or unknown risks
and uncertainties. The major risks and uncertainties – and
assumptions that are made – that affect our business and may cause
actual results to differ from these forward-looking statements
include, but are not limited to:
- the effect of
general economic conditions, including employment rates, housing
starts, inflation rates, interest and mortgage rates, availability
of financing for home mortgages and strength of the U.S.
dollar;
- market demand
for our products, which is related to the strength of the various
U.S. business segments and U.S. and international economic
conditions;
- the availability
of desirable and reasonably priced land and our ability to control,
purchase, hold and develop such land;
- access to
adequate capital on acceptable terms;
- geographic
concentration of our operations;
- levels of
competition;
- the price and
availability of lumber, other raw materials, home components and
labor;
- the effect of
U.S. trade policies, including the imposition of tariffs and duties
on home building products and retaliatory measures taken by other
countries;
- the effects of
weather and the risk of loss from earthquakes, volcanoes, fires,
floods, droughts, windstorms, hurricanes, pest infestations and
other natural disasters, and the risk of delays, reduced consumer
demand, unavailability of insurance, and shortages and price
increases in labor or materials associated with such natural
disasters;
- risks arising
from acts of war, terrorism or outbreaks of contagious diseases,
such as Covid-19;
- federal and
state tax policies;
- transportation
costs;
- the effect of
land use, environment and other governmental laws and
regulations;
- legal
proceedings or disputes and the adequacy of reserves;
- risks relating
to any unforeseen changes to or effects on liabilities, future
capital expenditures, revenues, expenses, earnings, indebtedness,
financial condition, losses and future prospects;
- the effect of
potential loss of key management personnel;
- changes in
accounting principles;
- risks related to
unauthorized access to our computer systems, theft of our and our
homebuyers’ confidential information or other forms of
cyber-attack; and
- other factors
described in “Risk Factors” included in our Annual Report on Form
10-K for the year ended October 31, 2023 and in subsequent filings
we make with the Securities and Exchange Commission (“SEC”).
Many of the factors mentioned above or in other
reports or public statements made by us 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.
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.
For a further discussion of factors that we
believe could cause actual results to differ materially from
expected and historical results, 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 filed with the SEC and in
subsequent reports filed with the SEC. 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.
|
TOLL BROTHERS, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS(Amounts in thousands) |
| |
| |
October 31,2024 |
|
October 31,2023 |
| |
(Unaudited) |
|
|
| ASSETS |
|
|
|
|
Cash and cash equivalents |
$ |
1,303,039 |
|
|
$ |
1,300,068 |
|
| Inventory |
|
9,712,925 |
|
|
|
9,057,578 |
|
| Property, construction and
office equipment - net |
|
453,007 |
|
|
|
323,990 |
|
| Receivables, prepaid expenses
and other assets |
|
590,611 |
|
|
|
691,256 |
|
| Mortgage loans held for
sale |
|
191,242 |
|
|
|
110,555 |
|
| Customer deposits held in
escrow |
|
109,691 |
|
|
|
84,530 |
|
| Investments in unconsolidated
entities |
|
1,007,417 |
|
|
|
959,041 |
|
| |
$ |
13,367,932 |
|
|
$ |
12,527,018 |
|
| |
|
|
|
| LIABILITIES AND EQUITY |
|
|
|
| Liabilities: |
|
|
|
|
Loans payable |
$ |
1,085,817 |
|
|
$ |
1,164,224 |
|
|
Senior notes |
|
1,597,102 |
|
|
|
1,596,185 |
|
|
Mortgage company loan facility |
|
150,000 |
|
|
|
100,058 |
|
|
Customer deposits |
|
488,690 |
|
|
|
540,718 |
|
|
Accounts payable |
|
492,213 |
|
|
|
597,582 |
|
|
Accrued expenses |
|
1,752,848 |
|
|
|
1,548,781 |
|
|
Income taxes payable |
|
114,547 |
|
|
|
166,268 |
|
|
Total liabilities |
|
5,681,217 |
|
|
|
5,713,816 |
|
| |
|
|
|
| Equity: |
|
|
|
|
Stockholders’ Equity |
|
|
|
|
Common stock, 112,937 shares issued at October 31, 2024 and October
31, 2023 |
|
1,129 |
|
|
|
1,129 |
|
|
Additional paid-in capital |
|
694,713 |
|
|
|
698,548 |
|
|
Retained earnings |
|
8,153,356 |
|
|
|
6,675,719 |
|
|
Treasury stock, at cost — 13,149 and 9,146 shares at October 31,
2024 and October 31, 2023, respectively |
|
(1,209,547 |
) |
|
|
(619,150 |
) |
|
Accumulated other comprehensive income |
|
31,277 |
|
|
|
40,910 |
|
|
Total stockholders’ equity |
|
7,670,928 |
|
|
|
6,797,156 |
|
|
Noncontrolling interest |
|
15,787 |
|
|
|
16,046 |
|
|
Total equity |
|
7,686,715 |
|
|
|
6,813,202 |
|
| |
$ |
13,367,932 |
|
|
$ |
12,527,018 |
|
| |
|
|
|
|
|
|
|
|
TOLL BROTHERS, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(Amounts in thousands, except per share
data and percentages)(Unaudited) |
| |
| |
Three Months Ended October 31, |
|
Twelve Months Ended October 31, |
| |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| |
$ |
% |
|
$ |
% |
|
$ |
% |
|
$ |
% |
| Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Home sales |
$ |
3,260,004 |
|
|
|
$ |
2,951,904 |
|
|
|
$ |
10,563,332 |
|
|
|
$ |
9,866,026 |
|
|
|
Land sales and other |
|
73,458 |
|
|
|
|
68,243 |
|
|
|
|
283,408 |
|
|
|
|
128,911 |
|
|
| |
|
3,333,462 |
|
|
|
|
3,020,147 |
|
|
|
|
10,846,740 |
|
|
|
|
9,994,937 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Cost of revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Home sales |
|
2,413,680 |
|
74.0 |
% |
|
|
2,141,529 |
|
72.5 |
% |
|
|
7,753,351 |
|
73.4 |
% |
|
|
7,207,279 |
|
73.1 |
% |
|
Land sales and other |
|
38,993 |
|
53.1 |
% |
|
|
78,594 |
|
115.2 |
% |
|
|
70,911 |
|
25.0 |
% |
|
|
153,457 |
|
119.0 |
% |
| |
|
2,452,673 |
|
|
|
|
2,220,123 |
|
|
|
|
7,824,262 |
|
|
|
|
7,360,736 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Gross margin - home sales |
|
846,324 |
|
26.0 |
% |
|
|
810,375 |
|
27.5 |
% |
|
|
2,809,981 |
|
26.6 |
% |
|
|
2,658,747 |
|
26.9 |
% |
| Gross margin - land sales and
other |
|
34,465 |
|
46.9 |
% |
|
|
(10,351 |
) |
(15.2 |
)% |
|
|
212,497 |
|
75.0 |
% |
|
|
(24,546 |
) |
(19.0 |
)% |
| |
|
|
|
|
|
|
|
|
|
|
|
| Selling, general and
administrative expenses |
|
269,734 |
|
8.3 |
% |
|
|
241,408 |
|
8.2 |
% |
|
|
982,291 |
|
9.3 |
% |
|
|
909,446 |
|
9.2 |
% |
| Income from operations |
|
611,055 |
|
|
|
|
558,616 |
|
|
|
|
2,040,187 |
|
|
|
|
1,724,755 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Other: |
|
|
|
|
|
|
|
|
|
|
|
| (Loss) income from
unconsolidated entities |
|
(10,044 |
) |
|
|
|
29,285 |
|
|
|
|
(23,843 |
) |
|
|
|
50,098 |
|
|
| Other income - net |
|
20,062 |
|
|
|
|
17,065 |
|
|
|
|
69,296 |
|
|
|
|
67,518 |
|
|
| Income before income
taxes |
|
621,073 |
|
|
|
|
604,966 |
|
|
|
|
2,085,640 |
|
|
|
|
1,842,371 |
|
|
| Income tax provision |
|
145,664 |
|
|
|
|
159,430 |
|
|
|
|
514,445 |
|
|
|
|
470,300 |
|
|
| Net income |
$ |
475,409 |
|
|
|
$ |
445,536 |
|
|
|
$ |
1,571,195 |
|
|
|
$ |
1,372,071 |
|
|
| Per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings |
$ |
4.67 |
|
|
|
$ |
4.15 |
|
|
|
$ |
15.16 |
|
|
|
$ |
12.47 |
|
|
|
Diluted earnings |
$ |
4.63 |
|
|
|
$ |
4.11 |
|
|
|
$ |
15.01 |
|
|
|
$ |
12.36 |
|
|
|
Cash dividend declared |
$ |
0.23 |
|
|
|
$ |
0.21 |
|
|
|
$ |
0.90 |
|
|
|
$ |
0.83 |
|
|
| Weighted-average number of
shares: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
101,716 |
|
|
|
|
107,465 |
|
|
|
|
103,653 |
|
|
|
|
110,020 |
|
|
|
Diluted |
|
102,676 |
|
|
|
|
108,388 |
|
|
|
|
104,690 |
|
|
|
|
111,008 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Effective tax rate |
|
23.5 |
% |
|
|
|
26.4 |
% |
|
|
|
24.7 |
% |
|
|
|
25.5 |
% |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOLL BROTHERS, INC. AND
SUBSIDIARIESSUPPLEMENTAL
DATA(Amounts in
thousands)(unaudited) |
| |
| |
Three Months Ended October 31, |
|
Twelve Months Ended October 31, |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| Inventory impairments and
write-offs included in home sales cost of revenues: |
|
|
|
|
|
|
|
|
Pre-development costs and option write offs |
$ |
2,158 |
|
|
$ |
1,369 |
|
|
$ |
6,676 |
|
|
$ |
10,712 |
|
|
Land owned for future communities |
|
— |
|
|
|
799 |
|
|
|
— |
|
|
|
1,493 |
|
|
Land owned for operating communities |
|
21,925 |
|
|
|
6,101 |
|
|
|
52,765 |
|
|
|
18,501 |
|
| |
$ |
24,083 |
|
|
$ |
8,269 |
|
|
$ |
59,441 |
|
|
$ |
30,706 |
|
| |
|
|
|
|
|
|
|
| Land and other impairments
included in land sales and other cost of revenues |
$ |
— |
|
|
$ |
12,860 |
|
|
$ |
4,400 |
|
|
$ |
30,560 |
|
| |
|
|
|
|
|
|
|
| Joint venture impairments
included in (loss) income from unconsolidated entities |
$ |
6,600 |
|
|
$ |
— |
|
|
$ |
6,600 |
|
|
$ |
— |
|
| |
|
|
|
|
|
|
|
| Depreciation and
amortization |
$ |
25,773 |
|
|
$ |
22,224 |
|
|
$ |
81,201 |
|
|
$ |
76,473 |
|
| Interest incurred |
$ |
23,724 |
|
|
$ |
27,907 |
|
|
$ |
108,269 |
|
|
$ |
122,288 |
|
| Interest expense: |
|
|
|
|
|
|
|
|
Charged to home sales cost of revenues |
$ |
37,841 |
|
|
$ |
39,768 |
|
|
$ |
128,962 |
|
|
$ |
139,410 |
|
|
Charged to land sales and other cost of revenues |
|
1,321 |
|
|
|
4,701 |
|
|
|
3,142 |
|
|
|
10,787 |
|
| |
$ |
39,162 |
|
|
$ |
44,469 |
|
|
$ |
132,104 |
|
|
$ |
150,197 |
|
| |
|
|
|
|
|
|
|
| Home sites controlled: |
|
|
|
|
October 31,2024 |
|
October 31,2023 |
|
Owned |
|
|
|
|
|
33,964 |
|
|
|
35,916 |
|
|
Optioned |
|
|
|
|
|
40,755 |
|
|
|
34,748 |
|
| |
|
|
|
|
|
74,719 |
|
|
|
70,664 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
Inventory at October 31, 2024 and October 31, 2023
consisted of the following (amounts in thousands):
| |
October 31,2024 |
|
October 31,2023 |
|
Land deposits and costs of future communities |
$ |
620,040 |
|
|
$ |
549,035 |
|
| Land and land development
costs |
|
2,532,221 |
|
|
|
2,631,147 |
|
| Land and land development
costs associated with homes under construction |
|
3,617,266 |
|
|
|
2,916,334 |
|
| Total land and land
development costs |
|
6,769,527 |
|
|
|
6,096,516 |
|
| |
|
|
|
| Homes under construction |
|
2,458,541 |
|
|
|
2,515,484 |
|
| Model homes (1) |
|
484,857 |
|
|
|
445,578 |
|
| |
$ |
9,712,925 |
|
|
$ |
9,057,578 |
|
| |
|
|
|
|
|
|
|
(1) Includes the allocated land and land
development costs associated with each of our model homes in
operation.
Toll Brothers operates in the following five
geographic segments, with operations generally located in the
states listed below:
- North: Connecticut,
Delaware, Illinois, Massachusetts, Michigan, New Jersey, New York
and Pennsylvania
- Mid-Atlantic: Georgia, Maryland,
North Carolina, Tennessee and Virginia
- South: Florida, South Carolina and
Texas
- Mountain: Arizona, Colorado, Idaho, Nevada and Utah
- Pacific: California, Oregon and Washington
| |
Three Months Ended October 31, |
| |
Units |
|
$ (Millions) |
|
Average Price Per Unit $ |
|
|
2024 |
|
2023 |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
North |
498 |
|
422 |
|
$ |
501.3 |
|
|
$ |
412.3 |
|
|
$ |
1,006,600 |
|
|
$ |
977,000 |
|
|
Mid-Atlantic |
495 |
|
380 |
|
|
446.0 |
|
|
|
388.2 |
|
|
$ |
901,100 |
|
|
$ |
1,021,500 |
|
|
South |
947 |
|
717 |
|
|
819.9 |
|
|
|
659.9 |
|
|
$ |
865,800 |
|
|
$ |
920,400 |
|
|
Mountain |
1,039 |
|
807 |
|
|
863.5 |
|
|
|
780.3 |
|
|
$ |
831,100 |
|
|
$ |
966,900 |
|
|
Pacific |
452 |
|
429 |
|
|
629.1 |
|
|
|
710.3 |
|
|
$ |
1,391,700 |
|
|
$ |
1,655,700 |
|
|
Home Building |
3,431 |
|
2,755 |
|
|
3,259.8 |
|
|
|
2,951.0 |
|
|
$ |
950,100 |
|
|
$ |
1,071,100 |
|
|
Corporate and other |
|
|
|
|
|
0.2 |
|
|
|
0.9 |
|
|
|
|
|
|
Total home sales |
3,431 |
|
2,755 |
|
|
3,260.0 |
|
|
|
2,951.9 |
|
|
$ |
950,200 |
|
|
$ |
1,071,500 |
|
|
Land sales and other |
|
|
|
|
|
73.5 |
|
|
|
68.2 |
|
|
|
|
|
|
Total Consolidated |
|
|
|
|
$ |
3,333.5 |
|
|
$ |
3,020.1 |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| CONTRACTS |
|
|
|
|
|
|
|
|
|
|
|
|
North |
355 |
|
343 |
|
$ |
371.2 |
|
|
$ |
325.0 |
|
|
$ |
1,045,600 |
|
|
$ |
947,400 |
|
|
Mid-Atlantic |
377 |
|
286 |
|
|
364.1 |
|
|
|
279.5 |
|
|
$ |
965,700 |
|
|
$ |
977,500 |
|
|
South |
777 |
|
590 |
|
|
654.5 |
|
|
|
505.0 |
|
|
$ |
842,400 |
|
|
$ |
856,000 |
|
|
Mountain |
796 |
|
517 |
|
|
683.5 |
|
|
|
438.7 |
|
|
$ |
858,700 |
|
|
$ |
848,600 |
|
|
Pacific |
353 |
|
302 |
|
|
586.0 |
|
|
|
466.5 |
|
|
$ |
1,660,100 |
|
|
$ |
1,544,700 |
|
|
Total Consolidated |
2,658 |
|
2,038 |
|
$ |
2,659.3 |
|
|
$ |
2,014.7 |
|
|
$ |
1,000,500 |
|
|
$ |
988,600 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| BACKLOG |
|
|
|
|
|
|
|
|
|
|
|
|
North |
855 |
|
956 |
|
$ |
937.5 |
|
|
$ |
964.1 |
|
|
$ |
1,096,500 |
|
|
$ |
1,008,500 |
|
|
Mid-Atlantic |
786 |
|
945 |
|
|
824.8 |
|
|
|
953.0 |
|
|
$ |
1,049,400 |
|
|
$ |
1,008,400 |
|
|
South |
2,003 |
|
2,312 |
|
|
1,807.5 |
|
|
|
2,093.4 |
|
|
$ |
902,400 |
|
|
$ |
905,500 |
|
|
Mountain |
1,595 |
|
1,577 |
|
|
1,645.5 |
|
|
|
1,577.7 |
|
|
$ |
1,031,700 |
|
|
$ |
1,000,500 |
|
|
Pacific |
757 |
|
788 |
|
|
1,252.5 |
|
|
|
1,357.1 |
|
|
$ |
1,654,600 |
|
|
$ |
1,722,200 |
|
|
Total Consolidated |
5,996 |
|
6,578 |
|
$ |
6,467.8 |
|
|
$ |
6,945.3 |
|
|
$ |
1,078,700 |
|
|
$ |
1,055,800 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Twelve Months Ended October 31, |
| |
Units |
|
$ (Millions) |
|
Average Price Per Unit $ |
|
|
2024 |
|
2023 |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
North |
1,522 |
|
1,577 |
|
$ |
1,484.3 |
|
|
$ |
1,494.1 |
|
|
$ |
975,200 |
|
|
$ |
947,400 |
|
|
Mid-Atlantic |
1,512 |
|
1,067 |
|
|
1,422.0 |
|
|
|
1,175.3 |
|
|
$ |
940,500 |
|
|
$ |
1,101,500 |
|
|
South |
3,316 |
|
2,597 |
|
|
2,787.4 |
|
|
|
2,204.8 |
|
|
$ |
840,600 |
|
|
$ |
849,000 |
|
|
Mountain |
2,984 |
|
2,897 |
|
|
2,590.4 |
|
|
|
2,660.7 |
|
|
$ |
868,100 |
|
|
$ |
918,400 |
|
|
Pacific |
1,479 |
|
1,459 |
|
|
2,279.1 |
|
|
|
2,329.4 |
|
|
$ |
1,541,000 |
|
|
$ |
1,596,600 |
|
|
Home Building |
10,813 |
|
9,597 |
|
|
10,563.2 |
|
|
|
9,864.3 |
|
|
$ |
976,900 |
|
|
$ |
1,027,900 |
|
|
Corporate and other |
|
|
|
|
|
0.1 |
|
|
|
1.7 |
|
|
|
|
|
|
Total home sales |
10,813 |
|
9,597 |
|
|
10,563.3 |
|
|
|
9,866.0 |
|
|
$ |
976,900 |
|
|
$ |
1,028,000 |
|
|
Land sales and other |
|
|
|
|
|
283.4 |
|
|
|
128.9 |
|
|
|
|
|
|
Total Consolidated |
|
|
|
|
$ |
10,846.7 |
|
|
$ |
9,994.9 |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| CONTRACTS |
|
|
|
|
|
|
|
|
|
|
|
|
North |
1,421 |
|
1,411 |
|
$ |
1,456.8 |
|
|
$ |
1,336.9 |
|
|
$ |
1,025,200 |
|
|
$ |
947,500 |
|
|
Mid-Atlantic |
1,353 |
|
1,170 |
|
|
1,292.0 |
|
|
|
1,165.5 |
|
|
$ |
954,900 |
|
|
$ |
996,200 |
|
|
South |
3,007 |
|
2,386 |
|
|
2,498.2 |
|
|
|
1,938.3 |
|
|
$ |
830,800 |
|
|
$ |
812,400 |
|
|
Mountain |
3,002 |
|
1,950 |
|
|
2,655.0 |
|
|
|
1,633.1 |
|
|
$ |
884,400 |
|
|
$ |
837,500 |
|
|
Pacific |
1,448 |
|
1,160 |
|
|
2,170.6 |
|
|
|
1,834.0 |
|
|
$ |
1,499,000 |
|
|
$ |
1,581,000 |
|
|
Total Consolidated |
10,231 |
|
8,077 |
|
$ |
10,072.6 |
|
|
$ |
7,907.8 |
|
|
$ |
984,500 |
|
|
$ |
979,100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Due to rounding, amounts may not add.
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, 2024 and 2023, and for backlog at
October 31, 2024 and 2023 is as follows:
| |
Units |
|
$ (Millions) |
|
Average Price Per Unit $ |
|
|
2024 |
|
2023 |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| Three months ended October
31, |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
62 |
|
1 |
|
$ |
71.0 |
|
|
$ |
7.3 |
|
|
$ |
1,145,700 |
|
|
$ |
6,413,200 |
|
|
Contracts |
20 |
|
14 |
|
$ |
27.5 |
|
|
$ |
12.8 |
|
|
$ |
1,372,700 |
|
|
$ |
916,500 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Twelve months ended October
31, |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
238 |
|
9 |
|
$ |
267.6 |
|
|
$ |
38.9 |
|
|
$ |
1,124,400 |
|
|
$ |
4,316,800 |
|
|
Contracts |
101 |
|
77 |
|
$ |
125.0 |
|
|
$ |
101.3 |
|
|
$ |
1,237,800 |
|
|
$ |
1,316,000 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Backlog at October 31, |
12 |
|
149 |
|
$ |
17.4 |
|
|
$ |
160.0 |
|
|
$ |
1,448,800 |
|
|
$ |
1,073,600 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 home
sales gross margin, adjusted net income, adjusted diluted earnings
per share and the Company’s net debt-to-capital ratio.
These four 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 home building
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
home builders 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 home builders
to the extent they provide similar information.
Adjusted Home Sales Gross Margin The following
table reconciles the Company’s home sales gross margin as a
percentage of home sales revenues (calculated in accordance with
GAAP) to the Company’s adjusted home sales gross margin (a non-GAAP
financial measure). Adjusted home sales gross margin is calculated
as (i) home sales gross margin plus interest recognized in home
sales cost of revenues plus inventory write-downs recognized in
home sales cost of revenues divided by (ii) home sales
revenues.
|
Adjusted Home Sales Gross Margin
Reconciliation(Amounts in thousands, except
percentages) |
| |
| |
|
Three Months Ended October 31, |
|
Twelve Months Ended October 31, |
|
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| Revenues - home
sales |
$ |
3,260,004 |
|
|
$ |
2,951,904 |
|
|
$ |
10,563,332 |
|
|
$ |
9,866,026 |
|
| Cost of revenues -
home sales |
|
2,413,680 |
|
|
|
2,141,529 |
|
|
|
7,753,351 |
|
|
|
7,207,279 |
|
| Home sales gross
margin |
|
846,324 |
|
|
|
810,375 |
|
|
|
2,809,981 |
|
|
|
2,658,747 |
|
|
Add: |
Interest
recognized in cost of revenues - home sales |
|
37,841 |
|
|
|
39,768 |
|
|
|
128,962 |
|
|
|
139,410 |
|
| |
Inventory impairments and
write-offs in cost of revenues - home sales |
|
24,083 |
|
|
|
8,269 |
|
|
|
59,441 |
|
|
|
30,706 |
|
| Adjusted home
sales gross margin |
$ |
908,248 |
|
|
$ |
858,412 |
|
|
$ |
2,998,384 |
|
|
$ |
2,828,863 |
|
| |
|
|
|
|
|
|
|
|
| Home sales gross
margin as a percentage of home sale revenues |
|
26.0 |
% |
|
|
27.5 |
% |
|
|
26.6 |
% |
|
|
26.9 |
% |
| |
|
|
|
|
|
|
|
|
| Adjusted home
sales gross margin as a percentage of home sale revenues |
|
27.9 |
% |
|
|
29.1 |
% |
|
|
28.4 |
% |
|
|
28.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 home
building 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 home building
operations and making strategic decisions regarding community
location and product mix.
Forward-looking Adjusted Home Sales Gross
MarginThe Company has not provided projected first quarter and full
FY 2025 home sales gross margin or a GAAP reconciliation for
forward-looking adjusted home 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 and full FY 2025. The variability of these
charges may have a potentially unpredictable, and potentially
significant, impact on our first quarter and full FY 2025 home
sales gross margin.
Adjusted Net Income and Diluted Earnings Per
Share Reconciliation
The following table reconciles the Company’s net
income and earnings per share (calculated in accordance with GAAP)
to the Company’s adjusted net income and diluted earnings per share
(a non-GAAP financial measure).
|
Adjusted Net Income and Diluted Per Share
Reconciliation(Amounts in thousands, except per
share data) |
| |
| |
|
Three Months Ended October 31, |
|
Twelve Months Ended October 31, |
|
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| Net income |
$ |
475,409 |
|
|
$ |
445,536 |
|
|
$ |
1,571,195 |
|
|
$ |
1,372,071 |
|
| Subtract: |
Net income resulting from the
sale of a parcel of land to a commercial developer |
|
— |
|
|
|
— |
|
|
|
(124,119 |
) |
|
|
— |
|
| Adjusted net
income |
$ |
475,409 |
|
|
$ |
445,536 |
|
|
$ |
1,447,076 |
|
|
$ |
1,372,071 |
|
| |
|
|
|
|
|
|
|
|
| Diluted earnings
per share |
$ |
4.63 |
|
|
$ |
4.11 |
|
|
$ |
15.01 |
|
|
$ |
12.36 |
|
| Subtract: |
Diluted earnings per share
resulting from the sale of a parcel of land to a commercial
developer |
|
— |
|
|
|
— |
|
|
|
(1.19 |
) |
|
|
— |
|
| Adjusted diluted
earnings per share |
$ |
4.63 |
|
|
$ |
4.11 |
|
|
$ |
13.82 |
|
|
$ |
12.36 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Debt-to-Capital RatioThe 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, 2024 |
|
July 31, 2024 |
|
October 31, 2023 |
| Loans payable |
$ |
1,085,817 |
|
|
$ |
1,099,787 |
|
|
$ |
1,164,224 |
|
| Senior notes |
|
1,597,102 |
|
|
|
1,596,873 |
|
|
|
1,596,185 |
|
| Mortgage company
loan facility |
|
150,000 |
|
|
|
125,417 |
|
|
|
100,058 |
|
| Total debt |
|
2,832,919 |
|
|
|
2,822,077 |
|
|
|
2,860,467 |
|
| Total
stockholders’ equity |
|
7,670,928 |
|
|
|
7,414,864 |
|
|
|
6,797,156 |
|
| Total capital |
$ |
10,503,847 |
|
|
$ |
10,236,941 |
|
|
$ |
9,657,623 |
|
| Ratio of
debt-to-capital |
|
27.0 |
% |
|
|
27.6 |
% |
|
|
29.6 |
% |
| |
|
|
|
|
|
|
| Total debt |
$ |
2,832,919 |
|
|
$ |
2,822,077 |
|
|
$ |
2,860,467 |
|
|
Less: |
Mortgage company loan facility |
|
(150,000 |
) |
|
|
(125,417 |
) |
|
|
(100,058 |
) |
| |
Cash and cash equivalents |
|
(1,303,039 |
) |
|
|
(893,422 |
) |
|
|
(1,300,068 |
) |
| Total net
debt |
|
1,379,880 |
|
|
|
1,803,238 |
|
|
|
1,460,341 |
|
| Total
stockholders’ equity |
|
7,670,928 |
|
|
|
7,414,864 |
|
|
|
6,797,156 |
|
| Total net
capital |
$ |
9,050,808 |
|
|
$ |
9,218,102 |
|
|
$ |
8,257,497 |
|
| Net
debt-to-capital ratio |
|
15.2 |
% |
|
|
19.6 |
% |
|
|
17.7 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
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: Gregg Ziegler (215)
478-3820gziegler@tollbrothers.com
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/3a0456db-a1d7-41b3-b790-3e0a1448ad2b
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