Toll Brothers Narrows Loss But Sees Grim 2009

Horsham, PA, Dec. 4, 2008-- Luxury homebuilder Toll Brothers Inc. reported a fourth quarter net loss of $78.8 million, or $0.49 per share, which included pre-tax write-downs totaling $175.9 million.

Last year the firm reported a net loss of $81.8 million, or $0.52 per share, which included pre-tax write-downs totaling $314.9 million.

For the full fiscal year ended Oct. 31, Toll had a net loss of $297.8 million, or $1.88 per share diluted, which included pre-tax write-downs totaling $848.9 million, compared to net income of $35.7 million, or $0.22 per share last year.

Excluding write-downs, fourth quarter earnings were $38.5 million, or $0.23 per share, compared to $118.2 million, or $0.72 per share in 2007.

Excluding write-downs, full year earnings were $232.0 million, or $1.41 per share diluted, compared to $464.6 million, or $2.83 per share a year ago.

"Obviously there are enormous challenges in our industry," said CEO Robert Toll.

"But we believe the financial strength of our organization will put us in a good position to take advantage of opportunities -- both in the near-term and when the economy recovers -- that we expect will arise from the industry's current distress."

Fourth quarter total revenues were $698.9 million, compared $1.17 billion last year. Full year total revenues were $3.16 billion, compared $4.65 billion last year.

At the end of the quarter, contracts totaled $266.7 million, down from $365.3 million a year ago.

"On the national level, new single-family housing starts have sunk to the lowest level since October 1981," Toll said.

Although builders have essentially eliminated spec production, the supply of unsold inventory still stands near record levels as new and existing home sales remain mired near historic lows while foreclosures add to available inventory."

Joel H. Rassman, chief financial officer, said he expects that revenues in 2009 will be significantly below those 2008.