Toll Brothers Loses $96 Million in Quarter

Horsham, PA, February 27, 2008 -- Toll Brothers Inc. lost $96 million or $.61 per share in its fiscal first quarter, which included pre-tax write downs of $245.5 million and $27.8 million.

Excluding the write downs, the luxury homebuilder posted a profit of $57.3 million or $.35 per share.

A year ago, first-quarter net income was $54.3 million, or $0.33 per share, including pre-tax write-downs and a goodwill impairment totaling $105.9 million. Excluding write-downs, last year's first-quarter earnings were $118.9 million or $0.72 per share diluted.

Current first quarter total revenues were $842.9 million, a drop of 23 percent from last year's $1.09 billion. Current backlog was $2.40 billion, 42 percent lower than the previous year.

"The selling season, which we believe starts in mid-January, has been weak for the third year in a row," said CEO Robert Toll.

"We have seen a few glimmers of hope, for example, in the Naples, Florida area and the suburban Washington D.C. market. The improvement in Naples, which was a tremendous market before the downturn, is noteworthy because from March 2006 through late 2007, it seemed as though we couldn't give away a home there. In metro D.C., which was among the first markets to weaken, we have seen the glimmer before and it faded; perhaps this time it won't.

"We continue to conservatively trim our land position and focus on maintaining our strong balance sheet and liquidity. With over $950 million in cash and over $1.2 billion available under our bank credit facility, which matures in March 2011, we believe we are positioned to profit from opportunities that may arise in the current market.

Toll said that continuing talk of a downturn has dampened enthusiasm for purchasing new homes.