Toll Brothers Inc., based in Horsham, Pa., on Wednesday reported a net loss of $40.8 million ($0.25 per share) for its first quarter ended Jan. 31. The loss compares with an $88.9 million loss in the first quarter of 2009. Analysts were expecting a loss of $0.35 per share.
While the company's revenues declined by 20% in dollars and 10% in number of units compared with FY 2009's first quarter, sales numbers were more encouraging. Net signed contracts were up in dollars by 129% to $292.1 million and 98% in units to 526. Cancellations were down significantly too, to 6.7% from 37.1% in 2009, same quarter.
Even with 26% fewer communities, Toll's sales rate translated to 2.63 units per community, exceeding last year's same quarter total of .99 units by 166%.
Toll Brothers ended FY 2010's first quarter with a net debt-to-capital ratio of 10.8%, compared with 14.5% at FY 2009's first-quarter end. The company ended the period with $1.75 billion of cash and marketable U.S. Treasury securities, compared with $1.53 billion at FY 2009's first-quarter end. Toll also had $1.38 billion available under its $1.89 billion 30-bank credit facility, which matures in March 2011.
"A year ago at this time we feared for the stability of the nation's economic system," Toll president and CEO Robert I. Toll said in the earnings release. "That worry seems to be behind us. The housing market took several years to recover following the downturn of the late 1980s and early 1990s. We expect this recovery to follow a similar pattern. We believe the housing market is still in choppy waters, but the seas are getting calmer."
The market also has enough visibility for Toll to issue guidance for the year. CFO Joel H. Rassman estimates the company will deliver between 2,100 and 2,750 homes in its 2010 fiscal year at an average price of between $540,000 and $560,000 per home.
Toll's stock price was relatively flat on Wednesday morning, down by 0.58%.