Toll Brothers Reports FY 2022 1st Quarter Results

Toll Brothers, Inc., the nation’s leading builder of luxury homes, today announced results for its first quarter ended January 31, 2022.

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

• Net income and earnings per share were $151.9 million and $1.24 per share diluted, compared to net income of $96.5 million and $0.76 per share diluted in FY 2021’s first quarter.
• Pre-tax income was $200.8 million, compared to $127.4 million in FY 2021’s first quarter.
• Home sales revenues were $1.7 billion, up 20% compared to FY 2021’s first quarter; delivered homes were 1,929, up 9%.
• Net signed contract value was $3.0 billion, up 19% compared to FY 2021’s first quarter; contracted homes were 2,929, up 2%.
• Backlog value was $10.8 billion at first quarter end, up 45% compared to FY 2021’s first quarter; homes in backlog were 11,302, up 27%.
• Home sales gross margin was 23.6%, compared to FY 2021’s first quarter home sales gross margin of 20.5%.
• Adjusted home sales gross margin, which excludes interest and inventory write-downs, was 25.6%, compared to FY 2021’s first quarter adjusted home sales gross margin of 22.9%.
• SG&A, as a percentage of home sales revenues, was 13.4%, compared to 14.9% in FY 2021’s first quarter.
• Income from operations was $175.1 million.
• Other income, income from unconsolidated entities, and gross margin from land sales and other was $29.9 million.
• The Company repurchased approximately 3.0 million shares at an average price of $61.65 per share for a total purchase price of approximately $185.8 million.

Douglas C. Yearley, Jr., chairman and chief executive officer, stated: “Our first quarter results were solid. We signed 2,929 net contracts for approximately $3.0 billion, up 19% in dollars and 2% in units over last year’s extremely strong first quarter, when contracts were up 68% in dollars and 59% in units compared to FY 2020’s first quarter.

“This market is being propelled by strong demographics, the substantial imbalance between the tight supply of homes and continued pent-up demand, growing equity in existing homes, migration trends, and the greater appreciation for home. We believe these long-term tailwinds will continue to support demand for new homes well into the future. With our significant and well-located land holdings and our unique niche in the luxury market, we are well positioned for continued growth.

“Ongoing supply chain disruptions, labor shortages and municipal delays remain a challenge. In our first quarter, these issues were exacerbated as the Omicron wave peaked in January, resulting in fewer deliveries than expected. Despite these challenges, our net income and earnings per share rose 57% and 63%, respectively, on home sales revenue growth of 20% and an increase in our adjusted gross margin of 270 basis points versus one year ago. At the end of our first fiscal quarter, our backlog stood at a record $10.8 billion and 11,302 homes.

“Based on the good visibility that our backlog provides and the continued strength in the market, we are reaffirming all of our full year projections, including 20% growth in home sales revenues, an adjusted gross margin of approximately 27.5%, and a return on beginning equity of approximately 23%. In addition, we continue to expect to grow our community count by 10% by fiscal year end from the 340 communities we were operating at the end of FY 2021.”

Additional Information

• The Company ended its FY 2022 first quarter with approximately $671.4 million in cash and cash equivalents, compared to $1.6 billion at FYE 2021 and $949.7 million at FY 2021’s first quarter end. At FY 2022 first 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 January 21, 2022, the Company paid its quarterly dividend of $0.17 per share to shareholders of record at the close of business on January 7, 2022.
• Stockholders’ Equity at the end of both the first quarter of FY 2022 and FY 2021 was $5.3 billion.
• FY 2022’s first quarter-end book value per share was $44.73 per share, compared to $44.08 at FYE 2021.
• The Company ended its FY 2022 first quarter with a debt-to-capital ratio of 38.1%, compared to 40.2% at FY 2021’s fourth quarter end and 43.8% at FYE 2021’s first quarter end. The Company ended FY 2022’s first quarter with a net debt-to-capital ratio(1) of 31.9%, compared to 25.1% at FY 2021’s fourth quarter end, and 35.8% at FYE 2021’s first quarter end.
• The Company ended FY 2022’s first quarter with approximately 86,500 lots owned and optioned, compared to 80,900 one quarter earlier, and 67,700 one year earlier. Approximately 46% or 39,700, of these lots were owned, of which approximately 17,700 lots, including those in backlog, were substantially improved.
• In the first quarter of FY 2022, the Company spent approximately $415.6 million on land to purchase approximately 6,277 lots.
• The Company ended FY 2022’s first quarter with 325 selling communities, compared to 340 at FY 2021’s fourth quarter end and 309 at FY 2021’s first quarter end.
• The Company repurchased approximately 3.0 million shares of its common stock during the quarter at an average price of $61.65 per share for an aggregate purchase price of approximately $185.8 million.
• On November 15, 2021, the Company repaid all $410 million of outstanding principal amount of its 5.875% senior notes due in February 2022.

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.