Toll Brothers Reports FY 2021 3rd Quarter Results

Toll Brothers, Inc., the nation’s leading builder of luxury homes, today announced results for its third quarter ended July 31, 2021.

FY 2021’s Third Quarter Financial Highlights (Compared to FY 2020’s Third Quarter):

-Net income and earnings per share were $234.9 million and $1.87 per share diluted, compared to net income of $114.8 million and $0.90 per share diluted in FY 2020’s third quarter.

-Pre-tax income was $303.4 million, compared to $151.9 million in FY 2020’s third quarter.

-Home sales revenues were $2.23 billion, up 37% compared to FY 2020’s third quarter; delivered homes were 2,597, up 28%.

-Net signed contract value was $2.98 billion, up 35% compared to FY 2020’s third quarter; contracted homes were 3,154, up 11%. Net signed contracts, in both dollars and units, were third quarter records.

-Backlog value was $9.44 billion at third quarter end, up 55% compared to FY 2020’s third quarter; homes in backlog were 10,661, up 47%. Quarter-end backlog, in both dollars and units, were all-time records.

-Home sales gross margin was 22.7%, compared to FY 2020’s third quarter home sales gross margin of 21.0%.

-Adjusted home sales gross margin, which excludes interest and inventory write-downs, was 25.6%, compared to FY 2020’s third quarter adjusted home sales gross margin of 23.9%.

-SG&A, as a percentage of home sales revenues, was 10.5%, compared to 11.9% in FY 2020’s third quarter.

-Income from operations was $276.7 million.

-Other income, income from unconsolidated entities, and gross margin from land sales and other was $29.1 million.

Douglas C. Yearley, Jr., chairman and chief executive officer, stated: “We are very pleased with our third quarter performance. Home sales revenues were up 37%,and pre-tax income and earnings per share more than doubled compared to one year ago. We are benefiting from our strategy of broadening our product lines, price points and geographies as we continue to grow our business, drive price, expand margins and improve our capital efficiency.

“Demand continues to be very strong. Net signed contracts were up 35% in dollars to approximately $3 billion compared to the prior year period. The housing market is being driven by many strong fundamentals, including low mortgage rates, favorable millennial-driven demographics, a decade of pent-up demand, low new home supply, and a tight resale market. We expect strong and sustainable demand for our homes in the years to come.

“Our deep land position provides a solid foundation for growth, with 340 communities projected by FYE 2021 and an additional 10% community count growth in fiscal 2022. Our record backlog, our focus on capital and operating efficiency, and the continued strength of the housing market give us confidence that our full FY 2022 margins will significantly exceed the strong margins we project for our FY 2021 fourth quarter and that our return on beginning equity will exceed 20% in FY 2022 and beyond.”

Additional Information

-The Company ended its FY 2021 third quarter with approximately $946 million in cash and cash equivalents, compared to $1.37 billion at FYE 2020 and $715 million at FY 2021’s second quarter end. At FY 2021 third quarter end, the Company also had $1.79 billion available under its $1.905 billion bank revolving credit facility, substantially all of which is scheduled to mature in November 2025.

-On July 23, 2021, the Company paid its quarterly dividend of $0.17 per share to shareholders of record at the close of business on July 9, 2021.

-Stockholders’ Equity at FY 2021 third quarter end was $5.03 billion, compared to $4.88 billion at FYE 2020.

-FY 2021’s third quarter-end book value per share was $41.34 per share, compared to $38.53 at FYE 2020.

-The Company ended its FY 2021 third quarter with a debt-to-capital ratio of 41.6%, compared to 42.2% at FY 2021’s second quarter end and 44.8% at FYE 2020. The Company ended FY 2021’s third quarter with a net debt-to-capital ratio(1) of 33.1%, compared to 35.6% at FY 2021’s second quarter end, and 33.3% at FYE 2020.

-The Company ended FY 2021’s third quarter with approximately 79,500 lots owned and optioned, compared to 74,500 one quarter earlier, and 61,400 one year earlier. Approximately 47% or 37,500, of these lots were owned, of which approximately 17,800 lots, including those in backlog, were substantially improved.

-In the third quarter of FY 2021, the Company spent approximately $200.9 million on land to purchase approximately 2,138 lots.

-The Company ended FY 2021’s third quarter with 314 selling communities, compared to 320 at FY 2021’s second quarter end and 323 at FY 2020’s third quarter end.

-The Company repurchased approximately 1.7 million shares of its common stock during the quarter at an average price of $57.66 per share for an aggregate purchase price of approximately $95.4 million. In the nine months ended July 31, 2021, the Company repurchased approximately 5.7 million shares of its common stock at an average price of $48.37 per share for an aggregate purchase price of approximately $275.1 million.

-On August, 24, 2021, the Company announced a strategic partnership with Equity Residential to selectively acquire and develop sites for new rental apartment communities in metro Boston, MA; Atlanta, GA; Austin, TX; Denver, CO; Orange County/San Diego, CA; Seattle, WA, and Dallas-Fort Worth, TX.

For the complete press release, click here.

Contact:

Frederick N. Cooper – Media Contact – fcooper@tollbrothers.com – (215) 938-8312

Source: Toll Brothers, Inc.