Toll Brothers Inc TOL
Q2 2010 Earnings Call Transcript
Operator: Good afternoon. My name is Lyn and I will be your conference operator today. At this time, I would like to welcome everyone to the Toll Brothers’ Second Quarter 2010 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator Instructions). Thank you.
I would now like to turn the call over to Mr. Robert Toll to begin.
Robert I. Toll - Chairman and CEO: Thanks, Lyn. Welcome everybody and thank you for joining us. With me today are Doug Yearley, Executive Vice President and soon to be CEO, yahoo; Joel Rassman, Chief Financial Officer; Marty Connor, Assistant CFO; Fred Cooper, Senior Vice President of Finance and Investor Relations; Joe Sicree, Chief Accounting Officer; Kira McCarron, Chief Marketing Officer; Mike Snyder, Chief Planning Officer; Don Salmon, President of TBI Mortgage Co.; and Greg Ziegler, Vice President of Finance, who really is the one who knows what’s going on.
If I gave each one of them a hammer and an assignment, we would probably make some progress here.
Before I begin, I ask you to read the statement on forward-looking information in today’s release and on our website. I caution you that many statements during this call are based on assumptions about the economy, world events in housing and financial markets, and many other factors beyond our control that could significantly affect future results.
Those listening on the web can email questions to rtoll@tollbrothersinc.com. Since our detailed release has been out since early this morning and is posted on our website, I will just hit certain highlights. Joel will review the numbers in more detail.
Today we reported a fiscal year 2010 second quarter net loss of $40.4 million or $0.24 per share diluted compared to fiscal year ’09 second quarter net loss of $83.2 million or $0.52 per share diluted.
Fiscal year ’10 second quarter results included pre-tax write-downs totaling $42.3 million compared to ‘09’s pre-tax write-down totaling $119.6 million. Excluding write-downs fiscal year ’10 second quarter pre-tax loss was $9.5 million compared to a pre-tax loss of $2.3 million in fiscal year ’09. Fiscal year ’10 second quarter revenues and homebuilding deliveries declined 22% in dollars and 16% in units versus fiscal year ’09’s. Fiscal year ’10 second quarter net signed contracts rose 56% in dollars and 41% in units versus ‘09’s, even though we had 21% fewer communities. On a per community basis, ’10 second quarter net signed contracts of 4.32 units per community exceeded ‘09’s by 85%. They also exceeded fiscal year ‘08’s by 46%. However, they were still well below our historical second quarter average dating back to 1990 of 8.05 units per community. Our contract cancellation rate, current quarter cancellations divided by current quarter gross signed contracts, was 5.3% in second quarter ’01 versus 21.7% in ’09. After three consecutive quarters under 7%, it appears to us that our cancellation rates have returned to historic norms.
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