Toll Revenues Slide, CEO Sees Glimmer of Hope

Horsham, PA, May 20, 2009--Luxury homebuilder Toll Brothers, Inc. reported that preliminary second quarter home building revenues of approximately $398.3 million (648 units) was down 51% on 47% fewer homes.

The firm's backlog of approximately $944.3 million (1,581 units), was down 55% and net signed contracts of approximately $298.3 million (582 units), were down 40% compared to a year ago.

For the six months ended April 30, 2009, home building revenues of approximately $807.3 million (1,313 units) declined 51% in dollars and 46% in units and net signed contracts of approximately $426.2 million (848 units) declined 51% in dollars and 46% in units, compared to FY 2008's six-month results.

To lower costs, Toll said it will continue to decrease its community count by reducing the number of lots it controls and mothballing some sites in expectation of reviving them when market conditions improve.

"Despite a weak economic and employment landscape, which was reflected in fiscal 2009's second-quarter contracts, we have a few reasons for cautious optimism," said CEO Robert Toll.

"The most encouraging is our recent deposit activity. Beginning with the week ended March 22, our per-community (same-store) deposits have exceeded FY 2008's same-store deposits in seven of the past nine weeks.

"Although the housing industry clearly is not yet out of the woods, we believe the U.S. Government's forceful intervention in the capital markets has begun to restore some confidence that the financial system is on the road to stabilization. We believe many upscale-home buyers have postponed their buying decision over the past three years due to weak consumer confidence and concerns about the economy; a renewal of confidence is the key to releasing this pent-up demand. With interest rates at an historic low, home price affordability at an historic high and consumer confidence starting to improve, we believe that more buyers are beginning to enter the housing market."