Toll Brothers Reports FY 2022 2nd Quarter Results

Toll Brothers, Inc., the nation’s leading builder of luxury homes, today announced results for its second quarter ended April 30, 2022.

FY 2022’s Second Quarter Financial Highlights (Compared to FY 2021’s Second Quarter):

• Net income and earnings per share were $220.6 million and $1.85 per share diluted, compared to net income of $127.9 million and $1.01 per share diluted in FY 2021’s second quarter.
• Pre-tax income was $295.8 million, compared to $169.8 million in FY 2021’s second quarter.
• Home sales revenues were $2.2 billion, up 19% compared to FY 2021’s second quarter; delivered homes were 2,407, up 6%.
• Net signed contract value was $3.1 billion, up 1% compared to FY 2021’s second quarter; contracted homes were 2,874, down 18%.
• Backlog value was $11.7 billion at second quarter end, up 35% compared to FY 2021’s second quarter; homes in backlog were 11,768, up 16%.
• Home sales gross margin was 24.1%, compared to FY 2021’s second quarter home sales gross margin of 21.9%.
• Adjusted home sales gross margin, which excludes interest and inventory write-downs, was 26.1%, compared to FY 2021’s second quarter adjusted home sales gross margin of 24.4%.
• SG&A, as a percentage of home sales revenues, was 11.1%, compared to 11.9% in FY 2021’s second quarter.
• Income from operations was $281.7 million.
• Other income, income from unconsolidated entities, and gross margin from land sales and other was $12.2 million.
• The Company repurchased approximately 2.2 million shares at an average price of $48.30 per share for a total purchase price of approximately $106.5 million.
• On May 17, 2022, the Board of Directors of the Company refreshed the authorization for the Company to repurchase its common stock by up to 20 million shares — or approximately $900 million at the current market price. The repurchase authorization has no expiration date.

Douglas C. Yearley, Jr., chairman and chief executive officer, stated: “We are very pleased with our second quarter performance, as we met or exceeded our guidance on all key metrics. We delivered 2,407 new homes and generated $2.2 billion in home building revenue – both second quarter records. Our earnings per share grew by 83% from one year ago driven by a 170-basis point improvement in adjusted gross margin to 26.1% and an 80-basis point improvement in SG&A as a percentage of revenue. In addition, we met our sales expectations with 2,874 net contracts signed in the quarter – even as we limited sales in approximately 50% of our communities. Net signed contract value, at $3.1 billion, was our highest quarter ever, driving our second quarter-end backlog to a record $11.7 billion and 11,768 homes. Based on the strength of this backlog, we are maintaining our full year projection of 20% revenue growth, a 250-basis point increase in our adjusted gross margin to 27.5%, and a return on beginning equity of approximately 23%.

“While demand is still solid, over the past month it has moderated from the unprecedented pace of the past two years as buyers adapt to higher mortgage rates and other macro-economic conditions. However, the many fundamental drivers of housing demand remain firmly in place. These include favorable demographics, the significant imbalance between the supply and demand for homes, and migration trends. We believe these factors will support a healthy housing market over the long term.

“Our strategy of broadening our product lines, price points and geographies, coupled with our industry-leading luxury brand, positions us well for the current environment. Our attractive land portfolio allows us to be highly selective with new land opportunities and enables us to continue using excess cash flow to reduce debt and return capital to shareholders.”

Additional Information:

• The Company ended its FY 2022 second quarter with approximately $535.0 million in cash and cash equivalents, compared to $1.6 billion at FYE 2021 and $671.4 million at FY 2022’s first quarter end. At FY 2022 second quarter end, the Company also had $1.8 billion available under its $1.9 billion bank revolving credit facility, substantially all of which is scheduled to mature in November 2026.
• On March 8, 2022, the Company announced an 18% increase in its quarterly cash dividend from $0.17 to $0.20 per share. On April 22, 2022, the Company paid its quarterly dividend of $0.20 per share to shareholders of record at the close of business on April 8, 2022.
• Stockholders’ Equity at FY 2022 second quarter end was $5.4 billion, compared to $5.3 billion at FYE 2021.
• FY 2022’s second quarter-end book value per share was $46.51 per share, compared to $44.08 at FYE 2021.
• The Company ended its FY 2022 second quarter with a debt-to-capital ratio of 38.1%, compared to 38.1% at FY 2022’s first quarter end and 40.2% at FYE 2021. The Company ended FY 2022’s second quarter with a net debt-to-capital ratio⁽¹⁾ of 33.1%, compared to 31.9% at FY 2022’s first quarter end, and 25.1% at FYE 2021.
• The Company ended FY 2022’s second quarter with approximately 85,800 lots owned and optioned, compared to 86,500 one quarter earlier, and 74,500 one year earlier. Approximately 47% or 40,700, of these lots were owned, of which approximately 18,300 lots, including those in backlog, were substantially improved.
• In the second quarter of FY 2022, the Company spent approximately $282.9 million on land to purchase approximately 3,276 lots.
• The Company ended FY 2022’s second quarter with 328 selling communities, compared to 325 at FY 2022’s first quarter end and 320 at FY 2021’s second quarter end.
• The Company repurchased approximately 2.2 million shares of its common stock during the quarter at an average price of $48.30 per share for an aggregate purchase price of approximately $106.5 million.

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

For the complete press release, click here.

About Toll Brothers
Toll Brothers, Inc., A FORTUNE 500 Company, is the nation’s leading builder of luxury homes. The Company was founded 55 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, Illinois, 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, golf course development, smart home technology, and landscape subsidiaries. The Company also operates its own lumber distribution, house component assembly, and manufacturing operations.

Toll Brothers was named the World’s Most Admired Homebuilder in FORTUNE magazine’s 2022 survey of the World’s Most Admired Companies®, the seventh year it has been so honored. 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).

Contact:

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

Source: Toll Brothers, Inc.