Toll Brothers Fourth Quarter Revenue Off 36%

Horsham, PA, November 8, 2007—Luxury home builder Toll Brothers said it had a sharp drop in the number of new homes sold and in the average price of the homes it was able to sell in the fourth quarter, amid increasing cancelations.

The company said its home building revenue fell 36% to about $1.17 billion during the quarter ended October 31, while backlog totaled about $2.85 billion. Gross signed contracts slid 38% to about $693.7 million.

Average price per unit of gross contracts signed in the quarter fell 3.1% to $646,000, as the company shifts its product mix in the near- term toward multifamily communities, which tend to be lower-priced.

The company ended the quarter with about $895 million in cash and more than $1.2 billion available under its bank credit facility.

"We continue to believe that excess supply created by cancellations, speculative buyers, and overly ambitious builders; customer concerns about selling their existing homes; and a general lack of confidence are the primary impediments to our market's recovery,” said CEO Robert Toll.

“An inability to obtain mortgages does not appear to be a major factor for our buyers, although it may affect our buyers' buyers."