Toll Brothers Inc. -- one of a select few home builders -- has been added to the S&P MidCap 400 Index, a market-value weighted index. Generally, companies chosen for the Index have market values of between $1 billion and $4 billion. The goal of the index is to choose stable companies that will keep turnover rates low.
Joel H. Rassman, Toll's executive vice president and CFO, is proud of the company's "continuous efforts to balance steady growth with prudent financial management." And Fred Cooper, Toll Brothers' vice president of finance, added: "It's always nice to move up. We've produced 20 percent compound average annual growth in revenues and earning since going public in 1986."
The announcement capped a string of year-end accomplishments in 2002. Toll Brothers reported its 10th consecutive year of record earnings, 11th consecutive year of record revenues, and 12th consecutive year of record contracts. Toll expects another record year in 2003, with plans to deliver 5,000 homes and revenue of at least $2.6 billion. "Our backlog is $1.8 billion, so, basically, our record revenues for 2003 are already in the bag and there's not a tremendous amount of uncertainty. From a Wall Street perspective, it's nice to be where we are," said Cooper.
Looking even further in the future, Toll expects to close 6,000 homes in 2004 and generate at least $3 billion in revenue. "We're rapidly expanding our active adult product as well as our golf course, country club, and resort community product," said Cooper. "Based on demographics, which include affluent baby boomers, we're planing to grow our move-up and empty nester product line and we look forward to the future."
Changing Lennar's outlook from stable to positive, Moody's Investor Service upgraded the Miami, Fla.-based home builder's senior implied rating, issuer rating, and the rating on the company's term loan and senior notes from Ba1 to Baa3. Lennar received an upgrade from Ba3 to Ba2 on its senior subordinated debt. Moody's cited Lennar's improving financial results and a strong liquidity position as reasons behind the upgrade. Changing the rating is expected to reduce the company's cost of debt capital.
Industry Movers and Shakers
Centex Construction Products Inc. (CXP) has announced that Laurence E. Hirsch will take on the role of president and CEO. The current president and CEO, Richard D. Jones Jr., has decided to retire, effective March 31. Since 1994, Mr. Hirsch served as chairman of CXP. He also is chairman and CEO of CXP's majority owner, Centex Corp.
Fla.-based Seagate Homes has named Judy Collins as its director of marketing. Collins is a veteran of the residential and commercial real estate industry with more than 22 years of sales and marketing experience. Collins previously served as director of marketing for Beazer Homes USA.
Daniel Flynn has been named director of land acquisition for the South Coast division of John Laing Homes. His initial focus will be on pursuing infill acquisitions in central and north Orange County. Previously, Flynn worked at Western Pacific Housing, a California-based home builder.
MBK Homes Ltd., the home building branch of MBK Real Estate Ltd., has tapped Karen Hoover as director of purchasing. Previously, Hoover served as director of purchasing for The Olson Company. In related news, MBK Real Estate Ltd. has promoted Paul Simon to vice president of information systems. Simon joined MBK in 1996. He had worked with public accounting firm Kenneth Leventhal amp; Company.
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Recognizing professional builders and developers who help make dreams of homeownership a reality, Sears, Roebuck and Co. has announced the creation of the Sears American Dream-Maker Awards. Sears will award $50,000 to the winning contractors and home builders whose donations of time, talent, and in-kind services from Oct. 1, 2002 through Sept. 30, 2003 have helped increase homeownership.
"Through this awards program ... we are honoring home builders that help bring the American dream home," said Lyle Heidemann, executive vice president and general manager of Sears, Roebuck and Co. A total of five awards, one in each category, will be given in 2003. The categories are:
- Builders with revenues of more than $1B
- Builders with revenues between $400M and $999M
- Builders with revenues between $100M and $399M
- Builders with revenues of less than $100M
- Professional contractors/builders of a minority-owned business
Each winner will receive a donation of $10,000 in the recipient's name to the housing-related organization of choice. For more information, visit www.contractsales.sears.com.
An institutional investor of residential development projects has announced a financial commitment to the tune of $33.5 million. San-Francisco-based Hearthstone has agreed to help fund two developments of single-family homes in the greater Houston area.
The investment firm has committed to $25 million for Royal Oaks Chateaus by David Powers Homes at Royal Oaks. The gated country club (valued at $32 million) consists of 71 luxury homes ranging in price from $369,000 to $449,000. The additional $8.5 million will go toward Northridge Park West by Kimball Hill Homes at Northridge Park. The development (valued at $12 million) consists of 86 single-family detached homes ranging in price from $105,000 to $158,000.
Jim Griffin, senior vice president of Hearthstone's eastern operations, said: "... this region [Houston] presently boasts more than a year's supply of vacant approved lots ... Hearthstone remains bullish about the Houston region's housing market despite downturns in other industries."
Learn more about markets featured in this article: Los Angeles, CA.