Toll Brothers Reports FY 2021 2nd Quarter Results

Toll Brothers, Inc. (TollBrothers.com), the nation’s leading builder of luxury homes, announced results for its second quarter ended April 30, 2021.

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

–Net income and earnings per share were $127.9 million and $1.01 per share diluted, compared to net income of $75.7 million and $0.59 per share diluted in FY 2020’s second quarter.

–Pre-tax income was $169.8 million, compared to $102.1 million in FY 2020’s second quarter. Pre-tax income in the second quarter of FY 2021 includes a charge of $34.2 million for the early retirement of debt.

–Home sales revenues were a second quarter record $1.84 billion, up 21% compared to FY 2020’s second quarter; delivered homes were 2,271, up 18%.

–Net signed contract value was $3.05 billion, up 97% compared to FY 2020’s second quarter; contracted homes were 3,487, up 85%. Net signed contracts, in both dollars and units, were all-time records.

–Backlog value was $8.69 billion at second quarter end, up 58% compared to FY 2020’s second quarter; homes in backlog were 10,104, up 57%. Quarter-end backlog, in both dollars and units, were all-time records.

–Home sales gross margin was 21.9%, compared to FY 2020’s second quarter home sales gross margin of 19.5%.

–Adjusted home sales gross margin, which excludes interest and inventory write-downs, was 24.4%, compared to FY 2020’s second quarter adjusted home sales gross margin of 22.9%.

–SG&A, as a percentage of home sales revenues, was 11.9%, compared to 13.8% in FY 2020’s second quarter.

–Income from operations was $184.4 million.

–Other income, income from unconsolidated entities, and gross margin from land sales and other was $21.5 million.

–In March 2021, the Company announced an increase of its quarterly cash dividend to $0.17 per share, or a rate of $0.68 per share on an annualized basis, representing a 54.5% increase from the prior quarterly cash dividend of $0.11 per share.

Douglas C. Yearley, Jr., chairman and chief executive officer, stated: “Our business continues to operate at a very high level. With strong demand and constrained industry-wide supply, we have continued to raise prices in excess of cost increases while setting all-time records for contracts and backlog in both units and dollars, and exceeding our guidance on nearly every metric.

“These exceptional results reflect the strategic expansion of our product lines and geographies, as well as structural changes we have made in how we operate to focus on driving sustainable increases in profit margins and return on equity. Based on the land we currently control, we are projecting community count growth to 340 communities at fiscal year end, with an additional 10% growth in fiscal 2022.

“We are encouraged by the continued strength of the housing market, which is supported by a long-term supply-demand imbalance, favorable demographics, especially the drive to home ownership among millennials, low mortgage rates, and the greater overall appreciation for one’s home that has emerged out of the pandemic. These market conditions, which we expect to continue into the foreseeable future, play to our strengths of creating luxury communities in desirable locations, offering a broad range of price points, and providing our home buyers the ability to personalize their homes.

“Based on the strength of our outlook for the remainder of this year and beyond, we are raising our fiscal year 2021 guidance on nearly all key metrics. We expect continued margin improvement through the second half of fiscal 2021 as well as in 2022, and we project return on beginning equity in excess of 20% in fiscal 2022.”

Additional Financial Information

–The Company ended its FY 2021 second quarter with approximately $715 million in cash and cash equivalents, compared to $1.37 billion at FYE 2020 and $950 million at FY 2021’s first quarter end. At FY 2021 second quarter end, the Company also had $1.790 billion available under its $1.905 billion bank revolving credit facility, substantially all of which is scheduled to mature in November 2025.

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

–Stockholders’ Equity at FY 2021 second quarter end was $4.91 billion, compared to $4.88 billion at FYE 2020.

–FY 2021’s second quarter end book value per share was $39.82 per share, compared to $38.53 at FYE 2020.

–The Company ended its FY 2021 second quarter with a debt-to-capital ratio of 42.2%, compared to 43.8% at FY 2021’s first quarter end and 44.8% at FYE 2020. The Company ended FY 2021’s second quarter with a net debt-to-capital ratio⁽¹⁾ of 35.6%, compared to 35.8% at FY 2021’s first quarter end, and 33.3% at FYE 2020.

–The Company ended FY 2021’s second quarter with approximately 74,500 lots owned and optioned, compared to 67,700 one quarter earlier, and 62,100 one year earlier. Approximately 51%, or 38,000, of these lots were owned, of which approximately 18,000 lots, including those in backlog, were substantially improved.

–In the second quarter of FY 2021, the Company spent approximately $205.8 million on land to purchase approximately 2,053 lots.

–The Company ended FY 2021’s second quarter with 320 selling communities, compared to 309 at FY 2021’s first quarter end and 326 at FY 2020’s second quarter end.

–In March 2021, the Company redeemed all $250 million of its outstanding 5.625% senior notes due 2024. The Company incurred a pre-tax charge of approximately $34.2 million in the second quarter for the early retirement of debt.

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 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 first-time, move-up, empty-nester, active-adult, and second-home buyers, as well as urban and suburban renters. Toll Brothers builds 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.

2021 marks the 10th year Toll Brothers has been named to FORTUNE magazine’s World’s Most Admired Companies® list. Toll Brothers has been honored as Builder of the Year by Builder magazine and is the first two-time recipient of Builder of the Year by 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.