Toll Brothers(US:TOL)2024-02-29 16:00Revenue and Sales Performance - Home sales revenue increased to $1,931.8 million in Q1 2024, up from $1,749.4 million in Q1 2023, representing a 10.4% growth[18] - Land sales and other revenue decreased to $16.0 million in Q1 2024 from $30.7 million in Q1 2023, a 47.9% decline[18] - The company recognized $137.2 million in home sales revenues from customer deposits during the three months ended January 31, 2024[29] - Revenues for the three months ended January 31, 2024, were $157.2 million, up from $109.3 million in the same period in 2023[67] - Total home building revenues for the three months ended January 31, 2024 were $1.93 billion, compared to $1.75 billion in the same period in 2023[119] - Total consolidated revenues for the three months ended January 31, 2024 were $1.95 billion, compared to $1.78 billion in the same period in 2023[119] - Home sales revenue increased by 10% to $1.93 billion in the three months ended January 31, 2024, compared to $1.75 billion in the same period in 2023[128] - Net contracts signed increased by 42% in value to $2.06 billion and by 40% in units to 2,042 homes in the three months ended January 31, 2024, compared to $1.45 billion and 1,461 homes in the same period in 2023[127] - The company delivered 1,927 homes at an average price of $1,002,500 in the three months ended January 31, 2024, compared to 1,826 homes at an average price of $958,100 in the same period in 2023[128] - The backlog value decreased by 18% to $7.08 billion (6,693 homes) at January 31, 2024, compared to $8.58 billion (7,733 homes) at January 31, 2023[129] - Total home building revenues for the three months ended January 31, 2024 were $1,932.0 million, a 10% increase from $1,749.8 million in the same period in 2023[175] - The South region saw a 36% increase in revenues to $532.9 million, while the Pacific region had a 12% increase to $409.0 million[175] - The average delivered price for homes increased by 5% to $1,002.6 thousand in the three months ended January 31, 2024, compared to $958.3 thousand in the same period in 2023[175] - Total consolidated net contracts signed increased by 42% to $2,064.8 million in 2024 compared to $1,454.3 million in 2023[176] - South region saw a significant 43% increase in net contracts signed, reaching $469.9 million in 2024[176] - Mountain region experienced an 89% surge in net contracts signed, totaling $498.9 million in 2024[176] - Total consolidated backlog value decreased by 18% to $7,081.1 million in 2024 from $8,584.8 million in 2023[178] - Home sales revenues in the Mid-Atlantic region increased by 40% to $264.1 million in 2024[186] - Units delivered in the Mid-Atlantic region rose by 67% to 277 in 2024[186] - Average delivered price in the Mid-Atlantic region decreased by 16% to $953.6 thousand in 2024[186] - Home sales revenues increased by 36% to $532.9 million in the three-month fiscal 2024 period, with units delivered up 29% to 631[188] - Net contract value jumped 89% to $498.9 million in the three-month fiscal 2024 period, with net contracted units up 81% to 541[191] - Average delivered price rose 22% to $1,669.4 thousand in the three-month fiscal 2024 period, despite an 8% decrease in units delivered to 245[194] Net Income and Profitability - Net income rose to $239.6 million in Q1 2024, compared to $191.5 million in Q1 2023, a 25.1% increase[18] - Basic earnings per share grew to $2.28 in Q1 2024 from $1.72 in Q1 2023, a 32.6% increase[18] - Total comprehensive income reached $235.7 million in Q1 2024, up from $188.1 million in Q1 2023, a 25.3% growth[18] - Income from operations grew to $308.4 million in Q1 2024, compared to $225.3 million in Q1 2023, a 36.9% increase[18] - Net income for the three months ended January 31, 2024, was $239.6 million, compared to $191.5 million in the same period in 2023[23] - Net income for the three months ended January 31, 2024, was $2.9 million, compared to a net loss of $14.5 million in the same period in 2023[67] - Net income for the three months ended January 31, 2024 was $239.56 million, compared to $191.53 million for the same period in 2023[94] - Net income increased by 25% to $239.6 million in the three months ended January 31, 2024, compared to $191.5 million in the same period in 2023[134] - Income before income taxes increased to $311.2 million in fiscal 2024 from $253.8 million in fiscal 2023[145] - Mid-Atlantic region's income before income taxes surged by 116% to $49.5 million in 2024[180] - South region's income before income taxes increased by 88% to $98.4 million in 2024[180] - Total consolidated income before income taxes rose by 23% to $311.2 million in 2024[180] - Income before income taxes surged 88% to $98.4 million in the three-month fiscal 2024 period, driven by higher revenues and lower home sales cost of revenues[188] - Corporate and Other segment's loss before income taxes increased to $53.6 million in the three-month fiscal 2024 period, up from $24.5 million in the prior year[196] Expenses and Costs - Selling, general and administrative expenses increased to $230.0 million in Q1 2024 from $211.5 million in Q1 2023, a 8.8% rise[18] - Cost of home sales increased to $1,399.2 million in Q1 2024 from $1,300.9 million in Q1 2023, a 7.6% rise[18] - No impairment charges were recognized in the three-month period ended January 31, 2024, compared to $13.0 million in the same period in 2023[42] - Interest capitalized at the end of the period was $198.29 million, compared to $215.20 million in the previous year[45] - Income tax provisions for the three months ended January 31, 2024 were $71.6 million, compared to $62.3 million for the same period in 2023, with an effective tax rate of 23.0% in 2024 versus 24.5% in 2023[85] - The estimated state income tax rate for fiscal year 2024 is 5.8%, down from 6.2% in fiscal year 2023[86] - Total stock-based compensation expense recognized for the three months ended January 31, 2024 was $18.25 million, with an income tax benefit of $4.21 million[88] - Home sales cost of revenues decreased as a percentage of home sales revenues, with interest expense at 1.2% in fiscal 2024 compared to 1.4% in fiscal 2023, and inventory impairments of $1.5 million in fiscal 2024 versus $8.0 million in fiscal 2023[136] - Land sales and other cost of revenues decreased as a percentage of revenues due to $13.0 million of impairment charges recognized in fiscal 2023, with no similar charges in fiscal 2024[137] - SG&A spending increased by $18.5 million in fiscal 2024, but decreased as a percentage of home sales revenues to 11.9% from 12.1% in fiscal 2023[139] Cash Flow and Financial Position - Net cash used in operating activities for the three months ended January 31, 2024, was $307.0 million, compared to $357.8 million in the same period in 2023[23] - Inventory increased to $9.58 billion as of January 31, 2024, from $9.06 billion as of October 31, 2023[38] - Customer deposits for sold but undelivered homes totaled $534.4 million as of January 31, 2024, compared to $540.7 million as of October 31, 2023[29] - Total equity increased to $7,035.6 million as of January 31, 2024, up from $6,217.0 million as of January 31, 2023, a 13.2% growth[22] - Cash and cash equivalents decreased from $161.3 million in October 2023 to $158.9 million in January 2024[66] - Total assets increased from $5.70 billion in October 2023 to $5.98 billion in January 2024[66] - The company's net investment in unconsolidated entities increased from $959.0 million in October 2023 to $995.8 million in January 2024[66] - The company had $754.8 million in cash and cash equivalents and $1.76 billion available under its $1.905 billion senior unsecured revolving credit facility at January 31, 2024[130] - Cash and cash equivalents were $754.8 million as of January 31, 2024, down from $1.30 billion as of October 31, 2023. Cash used in operating activities for the three-month period ended January 31, 2024 was $307.0 million[162] - Cash used in investing activities for the three-month period ended January 31, 2024 was $59.4 million, primarily related to $58.9 million used to fund investments in unconsolidated entities and $13.6 million used for property and equipment purchases[164] - Cash used in financing activities for the three-month period ended January 31, 2024 was $178.0 million, primarily for $145.6 million in loan payments, $23.3 million in common stock dividends, and $9.3 million related to stock-based benefit plans[165] - Total assets as of January 31, 2024 were $11,577.9 million, including $592.9 million in cash and $9,445.5 million in inventory[171] Land and Development - Land and land development costs increased to $6.39 billion as of January 31, 2024, from $6.10 billion as of October 31, 2023[38] - Homes under construction increased to $2.72 billion as of January 31, 2024, from $2.52 billion as of October 31, 2023[38] - The company determined that 263 land purchase contracts, with an aggregate purchase price of $4.17 billion, were variable interest entities (VIEs) as of January 31, 2024[44] - The company purchased land from unconsolidated entities totaling $26.90 million in Q1 2024, compared to $16.70 million in Q1 2023[54] - Aggregate purchase price for land parcels as of January 31, 2024 was $4.51 billion, compared to $4.22 billion as of October 31, 2023[107] - The company owned or controlled approximately 70,400 home sites at January 31, 2024, compared to 70,700 at October 31, 2023[131] - The company was selling from 377 communities at January 31, 2024, compared to 370 at October 31, 2023 and 328 at January 31, 2023[132] Joint Ventures and Unconsolidated Entities - The company's total investment in unconsolidated entities is $995.81 million, with $558.13 million allocated to Rental Property Joint Ventures[48] - The company's remaining funding commitment to unconsolidated entities is $340.24 million, including $131.60 million related to VIEs[47] - Aggregate loan commitments for joint ventures with debt financing total $4.56 billion, with $3.73 billion allocated to Rental Property Joint Ventures[52] - The company's maximum estimated exposure under repayment and carry cost guarantees is $688.00 million, with $571.70 million related to borrowed debt obligations[58] - The company's investment in unconsolidated joint ventures includes $139.90 million related to 11 VIEs, with a maximum exposure to losses of $373.80 million[47] - The company's consolidated VIEs assets have a carrying value of $93.00 million, with partners' interests at $10.30 million[62] - The company's ownership interest in consolidated Joint Venture VIEs ranges from 82% to 98%[62] - The company's maximum exposure under guarantees does not account for potential recoveries from collateral or partner reimbursements[60] - The company's loss from unconsolidated entities was $9.2 million for the three months ended January 31, 2024, compared to $4.4 million in the same period in 2023[67] - The company recognized a loss from unconsolidated entities of $9.2 million in fiscal 2024, compared to a loss of $4.4 million in fiscal 2023[142] - The company had guaranteed the debt of certain unconsolidated entities with loan commitments aggregating $3.34 billion, with a maximum exposure of $688.0 million related to repayment and carry cost guarantees if the full amount were borrowed. As of January 31, 2024, $1.87 billion had been borrowed, with a maximum exposure of $571.7 million[159] Debt and Financing - The company's senior unsecured term loan facility has an interest rate of 6.21% per annum as of January 31, 2024[72] - The company's revolving credit facility has a committed borrowing capacity of $1.905 billion, with the ability to increase up to $3.00 billion[74] - The company's leverage ratio was approximately 0.32 to 1.00, and tangible net worth was approximately $6.97 billion as of January 31, 2024[75] - The company's mortgage subsidiary, TBMC, executed a new warehousing agreement with an interest rate of 7.10% per annum as of January 31, 2024[80] - The company's 100%-owned subsidiary, Toll Brothers Finance Corp., had issued $1.60 billion in senior notes maturing between November 15, 2025 and November 1, 2029[167] - Total debt obligations at January 31, 2024 were $2,010.6 million for fixed-rate debt and $713.2 million for variable-rate debt, with weighted-average interest rates of 4.66% and 6.28% respectively[200] - Each 1% increase in interest rates would increase interest incurred by approximately $7.1 million per year for the company's variable-rate debt[200] - The company entered into interest rate swap transactions in November 2020 to hedge $400.0 million of its $650.0 million Term Loan Facility, effectively fixing the interest cost at 0.369% plus a spread[200] Shareholder Returns and Stock Repurchases - The company repurchased 1,000 shares at an average price of $88.70 per share during the three months ended January 31, 2024, with a remaining authorization of 20 million shares[90] - Cash dividends declared and paid during the three months ended January 31, 2024 were $0.21 per share, up from $0.20 per share in the same period in 2023[91] - Repurchased shares of common stock during the three-month period ended January 31, 2024[208] Risk Management and Legal - No material changes in internal control over financial reporting during the quarter ended January 31, 2024[204] - Disclosure controls and procedures were effective as of the Evaluation Date[203] - Adequate provision made for resolution of current claims and pending litigation, no material adverse effect expected[206] - No material changes in risk factors as previously disclosed in the 2023 Form 10-K[207] Miscellaneous - In February 2024, the company sold a parcel of land for net cash proceeds of $180.7 million, expected to result in a pre-tax gain of approximately $175.0 million in the three months ending April 30, 2024[31] - The fair value of mortgage loans held for sale as of January 31, 2024 was $73.27 million, down from $110.56 million as of October 31, 2023[96] - The fair value of interest rate swap contracts as of January 31, 2024 was $26.47 million, down from $35.24 million as of October 31, 2023[97] - The estimated fair value of the company's debt as of January 31, 2024 was $2.67 billion, compared to a book value of $2.73 billion[101] - Total other income – net for the three months ended January 31, 2024 was $11.9 million, compared to $32.9 million in the same period in 2023[102] - Income from ancillary businesses for the three months ended January 31, 2024 was $0.8 million, compared to a loss of $2.9 million in the same period in 2023[102] - Revenues from ancillary businesses for the three months ended January 31, 2024 were $32.3 million, compared to $27.9 million in the same period in 2023[103] - The company had agreements