FORT WASHINGTON, Pa., May 21, 2024 (GLOBE NEWSWIRE) -- Toll Brothers, Inc. (NYSE:TOL) (TollBrothers.com), the nation's leading builder of luxury homes, today announced results for its second quarter ended April 30, 2024. FY 2024's Second Quarter Financial Highlights (Compared to FY 2023's Second Quarter): Net income and earnings per share were $481.6 million and $4.55 per diluted share, compared to net income of $320.2 million and $2.85 per diluted share in FY 2023's second quarter. Net income and earnings per share included $124.1 million and $1.17, respectively, related to the sale of a parcel of land to a commercial developer. Excluding these gains, net income and earnings per share were $357.5 million and $3.38 per diluted share in FY 2024's second quarter. Pre-tax income was $649.8 million, compared to $430.6 million in FY 2023's second quarter. Home sales revenues were $2.65 billion, up 6% compared to FY 2023's second quarter; delivered homes were 2,641, also up 6%. Net signed contract value was $2.94 billion, up 29% compared to FY 2023's second quarter; contracted homes were 3,041, up 30%. Backlog value was $7.38 billion at second quarter end, down 12% compared to FY 2023's second quarter; homes in backlog were 7,093, down 6%. Home sales gross margin was 25.8%, compared to FY 2023's second quarter home sales gross margin of 26.4%. Adjusted home sales gross margin, which excludes interest and inventory write-downs, was 28.2%, compared to FY 2023's second quarter adjusted home sales gross margin of 28.3%. SG&A, as a percentage of home sales revenues, was 9.0%, compared to 9.1% in FY 2023's second quarter. Income from operations was $623.5 million. Other income, income from unconsolidated entities, and gross margin from land sales and other was $203.7 million, which includes $175.2 million from the land sale referred to above. Douglas C. Yearley, Jr., chairman and chief executive officer, stated: "We are very pleased with our second quarter results. We delivered 2,641 homes at an average price of $1.0 million, generating home sales revenues of $2.65 billion, a 6% increase compared to last year's second quarter. Our adjusted gross margin was 28.2%, 60 basis points better than guidance, and our SG&A expense, as a percentage of home sales revenues was 9.0%, 70 basis points better than guidance. These strong home building results, together with a previously disclosed $175 million pre-tax land sale gain, contributed to record second quarter earnings of $4.55 per diluted share, up 60% compared to last year. In addition, we signed 3,041 net contracts for $2.9 billion in the quarter, up 30% in units and 29% in dollars compared to the second quarter of 2023. Based on these outstanding results, and with continued solid demand as we start our third quarter, we are increasing our full year revenue and earnings guidance. We now expect to earn approximately $14.00 per diluted share in fiscal 2024 with a return on beginning equity of approximately 22%. "Demand for new homes continues to be driven by a resilient economy, favorable demographics and a lack of supply that reflects both the chronic underproduction of housing in the U.S. and the historically low levels of resale inventory caused by the lock-in effect of higher rates. Our strategy of widening our price points to include more affordable luxury homes and increasing our supply of spec homes has helped us grow market share. It also enables us to reduce cycle times, improve inventory turns and leverage our fixed costs, driving revenue growth and higher operating margins. With these strategies firmly in place and producing results, and with our more capital efficient land strategy, we are confident that we can continue to generate attractive returns well into the future. "We have a healthy balance sheet with low net debt and ample liquidity, and we continue to generate significant operating cash flows. In the second quarter, we repurchased $181 million of common stock and increased our quarterly dividend by 10%. Our solid financial position, more efficient operations and strong cash flow generation should allow us to continue investing in growth while also returning cash to stockholders." Third Quarter and FY 2024 Financial Guidance:   Third Quarter   Full Fiscal Year 2024 Deliveries 2,750 to 2,850 units   10,400 to 10,800 units Average Delivered Price per Home $950,000 - $960,000   $960,000 - $970,000 Adjusted Home Sales Gross Margin 27.7%   28.0% SG&A, as a Percentage of Home Sales Revenues 9.2%   9.6% Period-End Community Count 400   410 Other Income, Income from Unconsolidated Entities, and Gross Margin from Land Sales and Other $—   $260 million Tax Rate 26.0%   25.5% Financial Highlights for the three months ended April 30, 2024 and 2023 (unaudited):   2024   2023 Net Income $481.6 million, or $4.55 per share diluted   $320.2 million, or $2.85 per share diluted Pre-Tax Income $649.8 million   $430.6 million Pre-Tax Inventory Impairments included in Home Sales Costs of Revenues $28.4 million   $11.1 million Home Sales Revenues $2.65 billion and 2,641 units   $2.49 billion and 2,492 units Net Signed Contracts $2.94 billion and 3,041 units   $2.28 billion and 2,333 units Net Signed Contracts per Community 8.0 units   7.0 units Quarter-End Backlog $7.38 billion and 7,093 units   $8.38 billion and 7,574 units Average Price per Home in Backlog $1,040,200   $1,105,900 Home Sales Gross Margin 25.8%   26.4% Adjusted Home Sales Gross Margin 28.2%   28.3% Interest Included in Home Sales Cost of Revenues, as a percentage of Home Sales Revenues 1.3%   1.5% SG&A, as a percentage of Home Sales Revenues 9.0%   9.1% Income from Operations $623.5 million, or 22.0% of total revenues   $425.7 million, or 17.0% of total revenues Other Income, Income from Unconsolidated Entities, and Gross Margin from Land Sales and Other $203.7 million   $0.9 million Pre-Tax Land and Other Impairments included in Land Sales and Other Costs of Revenues $0.6 million   $4.7 million Quarterly Cancellations as a Percentage of Beginning-Quarter Backlog 2.8%   3.9% Quarterly Cancellations as a Percentage of Signed Contracts in Quarter 5.7%   11.5% Financial Highlights for the six months ended April 30, 2024 and 2023 (unaudited):   2024   2023 Net Income $721.2 million, or $6.80 per share diluted   $511.7 million, or $4.56 per share diluted Pre-Tax Income $960.9 million   $684.4 million Pre-Tax Inventory Impairments included in Home Sales Costs of Revenues $29.9 million   $19.1 million Home Sales Revenues $4.58 billion and 4,568 units   $4.24 billion and 4,318 units Net Signed Contracts $5.01 billion and 5,083 units   $3.73 billion and 3,794 units Home Sales Gross Margin 26.6%   26.1% Adjusted Home Sales Gross Margin 28.5%   28.0% Interest Included in Home Sales Cost of Revenues, as a percentage of Home Sales Revenues 1.3%   1.5% SG&A, as a percentage of Home Sales Revenues 10.2%   10.4% Income from Operations $931.9 million, or 19.5% of total revenues   $651.0 million, or 15.2% of total revenues Other Income, Income from Unconsolidated Entities, and Gross Margin from Land Sales and Other $212.3 million   $17.7 million Pre-Tax Land and Other Impairments included in Land Sales and Other Costs of Revenues $0.6 million   $17.7 million         Additional Information: The Company ended its FY 2024 second quarter with approximately $1.03 billion in cash and cash equivalents, compared to $1.30 billion at FYE 2023 and $754.8 million at FY 2024's first quarter end. At FY 2024 second quarter end, the Company also had $1.7 billion available under its $1.9 billion revolving credit facility, which is scheduled to mature in February 2028. On March 12, 2024, the Company announced a 10% increase in its quarterly cash dividend from $0.21 to $0.23 per share. On April 19, 2024, the Company paid its quarterly dividend of $0.23 per share to shareholders of record at the close of business on April 5, 2024. Stockholders' Equity at FY 2024 second quarter end was $7.31 billion, compared to $6.80 billion at FYE 2023. FY 2024's second quarter-end book value per share was $70.98 per share, compared to $65.49 at FYE 2023. The Company ended its FY 2024's second quarter with a debt-to-capital ratio of 28.0%, compared to 28.0% at FY 2024's first quarter end and 29.6% at FYE 2023. The Company ended FY 2024's second quarter with a net debt-to-capital ratio(1) of 18.7%, compared to 21.4% at FY 2024's first quarter end, and 17.7% at FYE 2023. The Company ended FY 2024's second quarter with approximately 71,800 lots owned and optioned, compared to 70,400 one quarter earlier, and 71,300 one year earlier. Approximately 52% or 37,000, of these lots were owned, of which approximately 18,500 lots, including those in backlog, were substantially improved. In the second quarter of FY 2024, the Company spent approximately $472.0 million on land to purchase approximately 3,470 lots. The Company ended FY 2024's second quarter with 386 selling communities, compared to 377 at FY 2024's first quarter end and 350 at FY 2023's second quarter end. The Company repurchased approximately 1.5 million shares at an average price of $120.60 per share for a total purchase price of approximately $181.2 million. (1)   See "Reconciliation of Non-GAAP Measures" below for more information on the calculation of the Company's net debt-to-capital ratio. Toll Brothers will be broadcasting live via the Investor Relations section of its website, investors.TollBrothers.com, a conference call hosted by chairman and chief executive officer Douglas C. Yearley, Jr. at 8:30 a.m. (ET) Wednesday, May 22, 2024, to discuss these results and its outlook for the third quarter and FY 2024. To access the call, enter the Toll Brothers website, click on the Investor Relations page, and select "Events & Presentations." Participants are encouraged to log on at least fifteen minutes prior to the start of the presentation to register and download any necessary software. The call can be heard live with an online replay which will follow. ABOUT TOLL BROTHERS Toll Brothers, Inc., a Fortune 500 Company, is the nation's leading builder of luxury homes. The Company was founded 57 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, insurance, smart home technology, and landscape subsidiaries. The Company also develops master-planned and golf course communities as well as operates its own lumber distribution, house component assembly, and manufacturing operations. In 2024, Toll Brothers marked 10 years in a row being named to the Fortune World's Most Admired Companies™ list. 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). From Fortune, ©2024 Fortune Media IP Limited. All rights reserved. Used under license. FORWARD-LOOKING STATEMENTS Information presented herein for the second quarter ended April 30, 2024 is subject to finalization of the Company's regulatory filings, related financial and accounting reporting procedures and external auditor procedures. This release contains or may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. One can identify these statements by the fact that they do not relate to matters of a strictly historical or factual nature and generally discuss or relate to future events. These statements contain words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "may," "can," "could," "might," "should," "likely," "will," and other words or phrases of similar meaning. Such statements may include, but are not limited to, information and statements regarding: expectations regarding inflation and interest rates; the markets in which we operate or may operate; our strategic priorities; our land acquisition, land development and capital allocation priorities; market conditions; demand for our homes; our build-to-order and spec home strategy; anticipated operating results and guidance; home deliveries; financial resources and condition; changes in revenues; changes in profitability; changes in margins; changes in accounting treatment; cost of revenues, including expected labor and material costs; selling, general, and administrative expenses; interest expense; inventory write-downs; home warranty and construction defect claims; unrecognized tax benefits; anticipated tax refunds; sales paces and prices; effects of home buyer cancellations; growth and expansion; joint ventures in which we are involved; anticipated results from our investments in unconsolidated entities; our ability to acquire or dispose of land and pursue real estate opportunities; our ability to gain approvals and open new communities; our ability to market, construct and sell homes and properties; our ability to deliver homes from backlog; our ability to secure materials and subcontractors; our ability to produce the liquidity and capital necessary to conduct normal business operations or to expand and take advantage of opportunities; and the outcome of legal proceedings, investigations, and claims. Any or all of the forward-looking statements included in this release are not guarantees of future performance and may turn out to be inaccurate. This can occur as a result of incorrect assumptions or as a consequence of known or unknown risks and uncertainties. The major risks and uncertainties – and assumptions that are made – that affect our business and may cause actual results to differ from these forward-looking statements include, but are not limited to: the effect of general economic conditions, including employment rates, housing starts, inflation rates, interest and mortgage rates, availability of financing for home mortgages and strength of the U.S. dollar; market demand for our products, which is related to the strength of the various U.S. business segments and U.S. and international economic conditions; the availability of desirable and reasonably priced land and our ability to control, purchase, hold and develop such land; access to adequate capital on acceptable terms; geographic concentration of our operations; levels of competition; the price and availability of lumber, other raw materials, home components and labor; the effect of U.S. trade policies, including the imposition of tariffs and duties on home building products and retaliatory measures taken by other countries; the effects of weather and the risk of loss from earthquakes, volcanoes, fires, floods, droughts, windstorms, hurricanes, pest infestations and other natural disasters, and the risk of delays, reduced consumer demand, unavailability of insurance, and shortages and price increases in labor or materials associated with such natural disasters; risks arising from acts of war, terrorism or outbreaks of contagious diseases, such as Covid-19; federal and state tax policies; transportation costs; the effect of land use, environment and other governmental laws and regulations; legal proceedings or disputes and the adequacy of reserves; risks relating to any unforeseen changes to or effects on liabilities, future capital expenditures, revenues, expenses, earnings, indebtedness, financial condition, losses and future prospects; the effect of potential loss of key management personnel; changes in accounting principles; risks related to unauthorized access to our computer systems, theft of our and our homebuyers' confidential information or other forms of cyber-attack; and other factors described in "Risk Factors" included in our Annual Report on Form 10-K for the year ended October 31, 2023 and in subsequent filings we make with the Securities and Exchange Commission ("SEC"). Many of the factors mentioned above or in other reports or public statements made by us will be important in determining our future performance. Consequently, actual results may differ materially from those that might be anticipated from our forward-looking statements. Forward-looking statements speak only as of the date they are made. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise. For a further discussion of factors that we believe could cause actual results to differ materially from expected and historical results, see the information under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our most recent Annual Report on Form 10-K filed with the SEC and in subsequent reports filed with the SEC. This discussion is provided as permitted by the Private Securities Litigation Reform Act of 1995, and all of our forward-looking statements are expressly qualified in their entirety by the cautionary statements contained or referenced in this section.   TOLL BROTHERS, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(Amounts in thousands)     April 30,2024   October 31,2023   (Unaudited)     ASSETS       Cash and cash equivalents $ 1,030,530     $ 1,300,068   Inventory   9,926,939       9,057,578   Property, construction and office equipment - net   321,166       323,990   Receivables, prepaid expenses and other assets   724,399       691,256   Mortgage loans held for sale   136,346       110,555   Customer deposits held in escrow   108,521       84,530   Investments in unconsolidated entities   1,002,458       959,041     $ 13,250,359     $ 12,527,018           LIABILITIES AND EQUITY       Liabilities:       Loans payable $ 1,113,126     $ 1,164,224   Senior notes   1,596,644       1,596,185   Mortgage company loan facility   127,541       100,058   Customer deposits   542,877       540,718   Accounts payable   694,422       597,582   Accrued expenses   1,636,722       1,548,781   Income taxes payable   214,833       166,268   Total liabilities   5,926,165       5,713,816           Equity:       Stockholders' Equity       Common stock, 112,937 shares issued at April 30, 2024 and October 31, 2023   1,129       1,129   Additional paid-in capital   689,259       698,548   Retained earnings   7,350,235       6,675,719   Treasury stock, at cost — 9,974 and 9,146 shares at April 30, 2024 and October 31, 2023, respectively   (772,476 )     (619,150 ) Accumulated other comprehensive income   39,827       40,910   Total stockholders' equity   7,307,974       6,797,156   Noncontrolling interest   16,220       16,046   Total equity   7,324,194       6,813,202     $ 13,250,359     $ 12,527,018     TOLL BROTHERS, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Amounts in thousands, except per share data and percentages)(Unaudited)     Three Months Ended April 30,   Six Months Ended April 30,     2024       2023       2024       2023     $ %   $ %   $ %   $ % Revenues:                       Home sales $ 2,647,020       $ 2,490,098       $ 4,578,856       $ 4,239,520     Land sales and other   190,466         16,881         206,478         47,628         2,837,486         2,506,979         4,785,334         4,287,148                             Cost of revenues:                       Home sales   1,963,283   74.2 %     1,832,878   73.6 %     3,362,509   73.4 %     3,133,801   73.9 % Land sales and other   12,979   6.8 %     20,850   123.5 %     23,140   11.2 %     63,285   132.9 %     1,976,262         1,853,728         3,385,649         3,197,086                             Gross margin - home sales   683,737   25.8 %     657,220   26.4 %     1,216,347   26.6 %     1,105,719   26.1 % Gross margin - land sales and other   177,487   93.2 %     (3,969 ) (23.5 )%     183,338   88.8 %     (15,657 ) (32.9 )%                         Selling, general and administrative expenses   237,698   9.0 %     227,537   9.1 %     467,744   10.2 %     439,034   10.4 % Income from operations   623,526         425,714