Toll Brothers' Losses Mount as Revenues Fall

Horsham, PA, Sept. 4, 2008--Luxury home builder Toll Brothers reported a third quarter net loss of $29.3 million, or $0.18 per share, compared to net income of $26.5 million, or $0.16 per share a year ago.

Net income fell substantially but write-offs held steady.

This year's figure included pre-tax write-downs of $139.4 million. After-tax write-downs totaled $84.3 million, or $0.53 per share.

Excluding write-downs, this year's third-quarter earnings were $55 million, or $0.35 per share.

Year ago figures included pre-tax write-downs totaling $147.3 million and after-tax write-downs totaled $88.5 million, or $0.54 per share diluted.

Excluding write-downs, last year's third-quarter earnings were $115.0 million, or $0.70 per share.

Toll Brothers had total revenues of $797.7 million, which were 34 percent lower than last year's total revenues of $1.21 billion.

gross contracts of $588.1 million and 1,007 homes were 40 percent and 31 percent lower, respectively, 2007's third-quarter totals of $972.2 million and 1,457 homes. The company had 195 cancellations, the lowest quarterly total in over two years.

Toll ended its third quarter with over $1.5 billion in cash and more than $1.3 billion available under its 33-member bank credit facility, which matures in March 2011.

The company ended its third quarter with 290 selling communities, down from its peak of 325 last year, and it expects to be selling from approximately 275 communities by the end of this year.

"We are now completing the third year of the worst housing market since we started in 1967," said CEO Robert Toll.

"Weak consumer confidence has kept many potential buyers from taking advantage of the current buyers' market. Tightened mortgage lending standards have sidelined others. Single-family housing starts have decreased by approximately 65 percent from their peak in January 2006. Starts now stand at their lowest level since January 1991.

"We believe that most big public builders have sold off most of their spec inventory, which eventually should help stabilize home prices. However, we currently have to contend with foreclosures as the new low-priced competition."