http://www.morningstar.com/earnings/39168019-toll-brothers-inc-tol-q2-2012.aspx

Toll Brothers Inc TOL
Q2 2012 Earnings Call Transcript

Transcript Call Date 05/23/2012

Operator: Good afternoon. My name is Don and I will be your conference operator today. At this time, I would like to welcome everyone to the Toll Brothers Second Quarter 2012 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session.

Thank you. Mr. Douglas Yearley, you may begin your conference sir.

Douglas C. Yearley, Jr. - CEO: Thank you, Don. Welcome everyone and thank you for joining us. I'm Doug Yearley, CEO. With me today are Bob Toll, Executive Chairman; Marty Connor, Chief Financial Officer; Fred Cooper, Senior VP of Finance, International Development and Investor Relations; Joe Sicree, Chief Accounting Officer; Kira Sterling, Chief Marketing Officer; Mike Snyder, Chief Planning Officer; Don Salmon, President of TBI Mortgage Company; and Greg Ziegler, Senior VP, Treasury.

Before I begin, I ask you to read the statement on forward-looking information in today's release and on our website. I caution you that many statements on this call are based on assumptions about the economy, world events, housing and financial markets, and many other factors beyond our control that could significantly affect future results. Those listening on the web can e-mail questions to rtoll@tollbrothersinc.com.

As has become our regular practice, we are going to limit our prepared remarks to provide more time for Q&A. Since our detailed release has been out since early this morning and is posted on our website, I'm sure most have read it, so I won't re-read it to you.

Today, we reported fiscal year 2012 second quarter net income of $16.9 million or $0.10 per share. Our second quarter included a $1.2 million net tax benefit, $2 million of pretax inventory write-downs and a $1.6 million recovery of prior joint venture impairments. Our second quarter revenues and home building deliveries of $373.7 million and 671 units rose 17% in dollars and 14% in units versus 2011.

Our second quarter net signed contracts of $754.7 million and 1,290 units rose 51% in dollars and 47% in units versus fiscal year 2011. The average price per contract was $585,000. We singed 5.61 units per community this quarter, the highest for any second quarter since fiscal year 2006.

Our second quarter-end backlog of $1.5 billion or 2,403 units increased 49% in dollars and 37% in units compared to fiscal year 2011. The average price of units in backlog was $624,000. This number was outsized due to the condo units in backlog, averaging $3.7 million from The Touraine, which is under construction on Manhattan's Upper East Side.

We ended the second quarter with 230 selling communities compared to 203 at fiscal year 2011 second quarter-end. We now expect to end fiscal year 2012 with between 230 and 245 selling communities, a slight decrease from our previous range of guidance. This is due to do the faster sell-out of certain communities than previously projected.

We ended fiscal year 2012 second quarter with approximately 39,500 lots owned and optioned, compared to approximately 35,900 one year ago. At second quarter-end, we had over $1.7 billion of liquidity. We had $927 million of cash and marketable securities as well as – $819 million available under our $885 million 12-bank credit facility, which matures in October 2014.

Read our Earnings Call Transcript disclaimer.
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