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Toll Brothers Q2 net income jumps to $89.1 million

Staff writer |
Toll Brothers announced results for its second quarter and six months ended April 30, 2016. Q2 net income was $89.1 million, or $0.51 per share diluted.

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This compares to net income of $67.9 million, or $0.37 per share diluted, in FY 2015's second quarter.

Pre-tax income was $140.4 million, compared to pre-tax income of $86.5 million in FY 2015's second quarter. Second quarter FY 2016 included write-downs of $6.4 million, compared to $12.2 million in FY 2015's second quarter.

Revenues of $1.12 billion and home building deliveries of 1,304 units increased 31% in dollars and 9% in units, compared to FY 2015's second quarter. The average price of homes delivered was $855,500, compared to $713,500 in FY 2015's second quarter.

Net signed contracts of $1.65 billion and 1,993 units rose 3% in dollars and 3% in units, compared to FY 2015's second quarter. The average price of net signed contracts was $825,500, compared to $826,300 in FY 2015's second quarter.

Backlog of $4.19 billion and 4,940 units rose 20% in dollars and 13% in units, compared to FY 2015's second-quarter-end backlog. At second-quarter end, the average price of homes in backlog was $848,600, compared to $793,800 at FY 2015's second-quarter end.

Gross margin, excluding interest and write-downs, was 25.7%, compared to 25.3% in FY 2015's second quarter.

SG&A as a percentage of revenue was 11.5%, compared to 12.6% in FY 2015's second quarter.

Income from operations was 10.5% of revenue, compared to 7.8% of revenue in FY 2015's second quarter.

Other income and Income from unconsolidated entities totaled $23.8 million, compared to $20.1 million in FY 20

At FY 2016's second-quarter end, Toll Brothers had approximately 45,400 lots owned and optioned, compared to approximately 43,800 one quarter earlier and 45,000 one year ago.

The Company ended its FY 2016 second quarter with $423.2 million in cash and marketable securities, compared to $336.2 million at 2016's first-quarter end and $542.2 million at FY 2015

's second-quarter end At FY 2016's second-quarter end, Toll Brothers had $840.2 million available under its $1.035 billion credit facility.

On May 19, 2016, Toll Brothers replaced this facility with a new $1.215 billion credit facility that matures in May 2021.

During the second quarter of FY 2016, Toll Brothers repurchased approximately 2.9 million shares of its common stock at an average price of $27.27 per share for a total purchase price of approximately $80.1 million.

Additionally, in its third quarter to-date, Toll Brothers has repurchased approximately 1.8 million shares at an average price of $26.50 for a total purchase price of approximately $47.3 million.

Cumulatively, since the start of its FY 2015 fourth quarter, Toll Brothers has purchased approximately 10.9 million shares at an average price of $29.95 per share for a total purchase price of approximately $327.7 million.

Effective May 23, 2016, the board uthorized the repurchase of 20 million shares of Toll Brothers common stock and terminated the prior share repurchase program.

In updating its guidance, Toll Brothers now expects to deliver between 5,800 and 6,300 homes in FY 2016 at an average price range of $820,000 to $850,000, compared to 5,525 deliveries in FY 2015 at an average price of $755,000. This translates to projected revenues of between $4.76 billion and $5.36 billion in FY 2016, compared to $4.17 billion in FY 2015.

The Company continues to project a full FY 2016 gross margin, excluding interest and write-downs, of between 25.8% and 26.2%. Interest in cost of sales is projected to be approximately 3.2% for FY 2016, compared to 3.4% in FY 2015.


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