SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED April 30, 1997
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO
Commission file number 1-9186
TOLL BROTHERS, INC.
(Exact name of registrant as specified in its charter)
Delaware 23-2416878
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3103 Philmont Avenue, Huntingdon Valley, Pennsylvania 19006
(Address of principal executive offices) (Zip Code)
(215) 938-8000
(Registrant's telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
Common Stock, $.01 par value: 34,196,473 shares as of June 3, 1997
<PAGE>
TOLL BROTHERS, INC. AND SUBSIDIARIES
INDEX
Page
PART I. Financial Information No.
ITEM 1. Financial Statements
Condensed Consolidated Balance Sheets (Unaudited) 1
as of April 30, 1997 and October 31, 1996
Condensed Consolidated Statements of Income (Unaudited) 2
For the Six Months and Three Months Ended
April 30, 1997 and 1996
Condensed Consolidated Statements of Cash Flows 3
(Unaudited)For the Six Months Ended
April 30, 1997 and 1996
Notes to Condensed Consolidated Financial Statements 4
(Unaudited)
ITEM 2. Management's Discussion and Analysis of 7
Financial Condition and Results of Operations
PART II. Other Information 10
SIGNATURES 11
Certain information included herein and in other statements, reports and S.E.C.
filings is foward-looking within the meaning of the Private Securities
Litigation Reform Act of 1995 related to subject matter such as national
and local economic conditions, the effect of governmental regulation on
the Company, the competitive environment in which the Company operates,
changes in interest rates, home prices, availability and cost of land for
future growth, availability of working capital, the availability and cost of
labor and materials and the levels of spending for selling, general and
administrative costs. Such forward looking information involves important
risks and uncertainties that could significantly affect expected
results. These risks and uncertainties are addressed in this and other SEC
filings. <PAGE>
TOLL BROTHERS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
April 30, October 31,
1997 1996
-------- -----------
ASSETS
<S> <C> <C>
Cash and cash equivalents $ 42,606 $ 22,891
Residential inventories 843,433 772,471
Property, construction and office
equipment 15,164 12,948
Receivables, prepaid expenses and
other assets 25,564 26,783
Mortgage notes receivable 2,676 2,833
--------- --------
$929,443 $837,926
========= ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Loans payable $ 183,353 $132,109
Subordinated notes 219,924 208,415
Customer deposits on sales
contracts 51,403 43,387
Accounts payable 37,633 42,423
Accrued expenses 60,535 58,211
Collateralized mortgage
obligations payable 2,664 2,816
Income taxes payable 31,111 35,888
-------- --------
Total liabilities 586,623 523,249
-------- --------
Shareholders' equity:
Preferred stock
Common stock 342 339
Additional paid-in capital 47,230 43,018
Retained earnings 295,248 271,320
-------- --------
Total shareholders' equity 342,820 314,677
-------- --------
$929,443 $837,926
======== ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TOLL BROTHERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands except per share data)
(Unaudited)
Six months Three months
ended April 30 ended April 30
-------------- --------------
1997 1996 1997 1996
---- ---- ---- ----
Revenues:
<S> <C> <C> <C> <C>
Housing sales $409,950 $286,622 $208,513 $145,208
Interest and other 1,776 956 693 300
-------- -------- -------- --------
411,726 287,578 209,206 145,508
-------- -------- -------- --------
Costs and expenses:
Land and housing construction 317,980 219,895 162,599 110,773
Selling, general &
administrative 38,893 32,473 20,073 17,241
Interest 12,742 9,242 6,605 4,741
-------- -------- -------- --------
369,615 261,610 189,277 132,755
-------- -------- -------- --------
Income before income taxes
and extraordinary loss 42,111 25,968 19,929 12,753
Income taxes 15,411 9,722 7,326 4,775
-------- -------- -------- --------
Income before extraordinary loss 26,700 16,246 12,603 7,978
Extraordinary loss from
extinguishment of debt,
net of income taxes of $1,659 2,772
Net income $ 23,928 $ 16,246 $ 12,603 $ 7,978
======== ======== ======== =======
Earnings per share:
Primary
Income before extraordinary
loss $ .77 $ .47 $ .36 $ .23
Extraordinary loss from
extinguishment of debt .08
-------- -------- -------- --------
Net Income $ .69 $ .47 $ .36 $ .23
======== ======== ======== ========
Fully-diluted
Income before extraordinary
loss $ .74 $ .46 $ .35 $ .23
Extraordinary loss from
extinguishment of debt .07
-------- -------- -------- --------
Net Income $ .67 $ .46 $ .35 $ .23
======== ======== ======== ========
Weighted average number
of shares
Primary 34,737 34,527 34,793 34,506
Fully-diluted 37,083 36,976 37,138 36,929
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TOLL BROTHERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
Six months
ended April 30
--------------
1997 1996
---- ----
Cash flows from operating activities:
<S> <C> <C>
Net income $23,928 $16,246
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation and amortization 1,886 1,602
Loss from repurchase of subordinated notes 117
Extraordinary loss from extinguishment of debt 4,431
Deferred taxes 2,764 1,761
Net realizable provisions 500
Changes in operating assets and liabilities:
Increase in residential inventories (59,818) (61,735)
Decrease (increase) in receivables, prepaid
expenses and other assets 802 (1,045)
Increase in customer deposits on
sales contracts 8,016 11,191
(Decrease) increase in accounts payable,
accrued expenses and other liabilities (2,466) 1,652
Decrease in current income taxes payable (7,449) (8,946)
-------- --------
Net cash used in operating activities (27,906) (38,657)
Cash flows from investing activities: -------- --------
Purchase of property, construction and office
equipment, net (3,638) (1,707)
Principal repayments of mortgage notes receivable 157 664
-------- --------
Net cash used in investing activities (3,481) (1,043)
-------- --------
Cash flows from financing activities:
Proceeds from loans payable 80,000 67,000
Principal payments of loans payable (40,027) (35,999)
Proceeds from the issuance of
senior subordinated notes 97,500
Repurchase of subordinated notes (90,434) (6,139)
Principal payments of collateralized mortgage
obligations (152) (197)
Proceeds from stock options exercised and employee
stock plan purchases 4,215 4,145
------- --------
Net cash provided by financing activities 51,102 28,810
------- --------
Net increase (decrease) in cash and cash equivalents 19,715 (10,890)
Cash and cash equivalents, beginning of period 22,891 27,772
------- --------
Cash and cash equivalents, end of period $42,606 $16,882
======= ========
Supplemental disclosures of cash flow information
Interest paid, net of capitalized amount $ 2,678 $ 2,675
======= ========
Income taxes paid $18,102 $16,110
======= ========
Supplemental disclosures of non-cash financing activities:
Cost of residential inventories acquired through
seller financing $11,144 $ 1,764
======= ========
Income tax benefit relating to exercise of employee
stock options $ 335 $ 888
======= ========
</TABLE>
See accompanying notes<PAGE>
TOLL BROTHERS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands)
(Unaudited)
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with the rules and regulations of the
Securities and Exchange Commission for interim financial information.
The October 31, 1996 balance sheet amounts and disclosures included
herein have been derived from the October 31, 1996 audited financial
statements of the Registrant. Since the accompanying condensed
consolidated financial statements do not include all the information and
footnotes required by generally accepted accounting principles for
complete financial statements, it is suggested that they be read in
conjunction with the financial statements and notes thereto included in
the Registrant's October 31, 1996 Annual Report on Form 10-K. In the
opinion of management, the accompanying unaudited condensed consolidated
financial statements include all adjustments, which are of a normal
recurring nature, necessary to present fairly the Company's financial
position as of April 30, 1997 and 1996, the results of its operations
for the six months and three months then ended and its cash flows for
the six months then ended. The results of operations for such interim
periods are not necessarily indicative of the results to be expected for
the full year.
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long Lived Assets and for Long-Lived Assets to Be Disposed
Of" ("FASB 121") established standards for the recognition and
measurement of impairment losses on long-lived assets. The Company
adopted FASB 121 as of November 1, 1996. The adoption did not result in
the recognition of an impairment loss.
Statement of Financial Accounting Standards No. 123 "Accounting for
Stock-Based Compensation" ("FASB 123") establishes a fair value based
method of accounting for stock-based compensation plans, including stock
options. FASB 123 allows the Company to continue accounting for stock
option plans under Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" ("APB 25"), but requires it
to provide proforma net income and earnings per share information "as
if" the new fair value approach had been adopted. These proforma
disclosures will be presented in the Registrant's financial statements
to be contained in the 1997 Annual Report to Shareholders. Because the
Company intends to continue accounting for its stock option plans under
APB 25, there is no impact on the Company's consolidated financial
statements resulting from implementation of FASB 123.
Statement of Financial Accounting Standards No. 128, "Earnings per
Share" ("FASB 128") requires the calculation and dual presentation of
Basic and Diluted earnings per share ("EPS") and is effective for
financial statements issued for periods ending after December 15, 1997;
earlier application of FASB 128 is not permitted. Had FASB 128 been
adopted, Basic EPS before extraordinary loss would have been $.78 and
$.48 for the six months ended April 30, 1997 and 1996, respectively and
$.37 and $.24 for the three months ended April 30, 1997 and 1996,
respectively. Diluted EPS before extraordinary loss would have been
$.74 and $.46 for the six months ended April 30, 1997 and 1996,
respectively and $.35 and $.23 for the three months ended April 30, 1997
and 1996, respectively.
<PAGE>
2. Residential Inventories
Residential inventories consisted of the following:
<TABLE>
<CAPTION>
April 30, October 31,
1997 1996
--------- -----------
<S> <C> <C>
Land and land development costs $191,801 $204,527
Construction in progress 566,933 491,552
Sample homes 43,287 40,017
Land deposits and costs of future
development 19,714 16,243
Loan assets acquired for future
development 3,563 4,106
Deferred marketing and financing
costs 18,135 16,026
-------- --------
$843,433 $772,471
======== ========
</TABLE>
Construction in progress includes the cost of homes under construction,
land and land development and carrying costs of lots that have been
substantially improved.
The Company capitalizes certain interest costs to inventories during the
development and construction period. Capitalized interest is charged to
interest expense when the related inventories are closed. Interest
incurred, capitalized and expensed is summarized as follows:
<TABLE>
<CAPTION>
Six months Three months
ended April 30 ended April 30
-------------- --------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Interest capitalized,
beginning of period $46,191 $43,142 $49,198 $44,849
Interest incurred 17,993 12,967 8,768 6,640
Interest expensed (12,742) (9,242) (6,605) (4,741)
Write off to cost of sales (83) (231) (2) (112)
-------- -------- -------- --------
Interest capitalized,
end of period $51,359 $46,636 $51,359 $46,636
======== ======== ======== ========
</TABLE>
3. Loans Payable and Subordinated Debt
In November 1996, the Company issued $100 million of 8 3/4% Senior
Subordinated Notes due 2006.
In March 1997, the Company borrowed $50,000,000 from two banks for a
period of five years at a 7.72% fixed rate of interest.
In March 1997, the Company redeemed all of its 10 1/2% Senior
Subordinated Notes due 2002 ($87,800,000 principal amount) at 103%. See
Note 4 - Extraordinary Loss From Extinguishment of Debt.
4. Extraordinary Loss From Extinguishment of Debt
In January 1997, the Company called for redemption on March 15, 1997
all of its outstanding 10 1/2% Senior Subordinated Notes due 2002 at
103% of principal amount plus accrued interest. The redemption resulted
in an extraordinary loss in the first quarter of fiscal 1997 of
$2,772,000, net of $1,659,000 of income taxes. The loss represents the
redemption premium and the write-off of unamortized deferred issuance
costs. The redemption and related financing referred to in Note 3 will
result in the reduction of the Company's interest incurred of
approximately $2 million annually.
5. Stock Repurchase Program
In April 1997, the Company announced that its Board of Directors
authorized the repurchase of up to 3,000,000 shares of its Common Stock,
par value $.01, from time to time, in open market transactions or
otherwise, for the purpose of providing shares for its various employee
benefit plans. As of April 30, 1997, the Company had not repurchased any
shares.
<PAGE>
PART I. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, certain income
statement items related to the Company's operations as percentages of total
revenues and certain other data:
<TABLE>
Six months Three months
ended April 30 ended April 30
-------------- --------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues 100.0% 100.0% 100.0% 100.0%
------ ------ ------ ------
Costs and expenses:
Land and housing construction 77.2 76.5 77.7 76.1
Selling, general and
administrative 9.5 11.3 9.6 11.8
Interest 3.1 3.2 3.2 3.3
------ ------ ------ ------
Total costs and expenses 89.8 91.0 90.5 91.2
------ ------ ------ ------
Income before taxes 10.2% 9.0% 9.5% 8.8%
====== ====== ====== ======
</TABLE>
Revenues for the six month and three month periods ended April 30, 1997 were
higher than those of the comparable periods of 1996 by approximately $124.1
million, or 43%, and $63.7 million, or 44%, respectively. The increased
revenues for the 1997 periods were primarily attributable to the increase in
the number and higher average price of the homes delivered during the periods.
The increased number of homes delivered was due to the greater number of
communities from which the Company was delivering homes, the larger backlog
of homes at the beginning of fiscal 1997 as compared to the beginning of
fiscal 1996 and the delays in the 1996 periods caused by the severe winter
weather conditions the Company encountered in many of its markets. The
increase in the average selling price per home delivered in fiscal 1997 was
due to a shift of the location of the homes to more expensive areas, a change
in product mix to larger homes and increases in selling prices.
The value of new sales contracts signed amounted to $528 million (1,314 homes)
and $355 million (872 homes) for the six month and three month periods ended
April 30, 1997, respectively. The value of new contracts signed for the
comparable periods of fiscal 1996 were $447 million (1,237 homes) and $299
million (823 homes), respectively. The increase in new contracts signed in
both periods of 1997 was primarily attributable to an increase in the average
selling price of the houses (due primarily to the location, size and increases
in selling prices), and an increase both in the number of communities in which
the Company was offering homes for sale and in the number of contracts signed
per community.
Orders for new homes are generally the strongest during the Company's second
quarter and consequently the backlog at April 30 is generally at its highest
level in the Company's fiscal year. As of April 30, 1997, the backlog of
homes under contract amounted to $644 million (1,593 homes), approximately 15%
higher than the $561 million (1,509 homes) backlog as of April 30, 1996 and
approximately 22% higher than the $526 million (1,367 homes) backlog as of
October 31, 1996. The increase in backlog at April 30, 1997 is primarily
attributable to the increases in the new contracts signed as previously
discussed.
Land and construction costs as a percentage of revenues increased in the six
month and three month periods ended April 30, 1997 as compared to the same
periods of 1996. The increases were due principally to increased material and
overhead costs and the increased costs in the Company's newer markets
resulting from the relatively less efficient construction in those markets.
The cost increases were partially offset by the lower amount of inventory
writedowns recognized in 1997($1.2 million for the six month period and $.2
million in the three month period) as compared to 1996 ($1.5 million in the
six month period and $.4 million in the three month period).
Selling, general and administrative expenses ("SG&A") in the six month and
three month periods ended April 30, 1997 increased over the comparable periods
of 1996 by $6.4 million or 20% and $2.8 million or 16%, respectively. These
increases were primarily attributable to the higher level of spending due to
the increased number of communities which the Company was operating during the
1997 periods as compared to the same periods of 1996 and the Company's
geographic expansion. SG&A as a percentage of revenues in both 1997 periods
were lower than the comparable 1996 periods due to revenues increasing at a
faster rate than SG&A spending. The Company believes that SG&A, as a
percentage of revenues, will continue to decrease for the full 1997 fiscal
year as compared to the six month and three month periods ended April 30, 1997
due to revenues increasing at a faster pace than SG&A expenses.
Interest expense is determined on a specific home-by-home basis and will vary
depending on many factors including the period of time that the land under the
home was owned, the length of time that the home was under construction, and
the interest rates and the amount of debt carried by the Company in proportion
to the amount of its inventory during those periods. As a percentage of
revenues, interest expense was lower in the six month and three month periods
of 1997 as compared to 1996.
Income taxes for the six month periods ended April 30, 1997 and 1996 were
provided at effective rates of 36.6% and 37.4%, respectively. For the three
month periods ended April 30, 1997 and 1996, income taxes were provided at
effective rates of 36.8% and 37.4%, respectively. The decrease in the
effective tax rate in the six month and three month periods of 1997 was the
result of non-taxable investment income. The Company does not expect to have
this income in the subsequent quarters of 1997 due to the Company's use of its
available funds to redeem its 10 1/2% Senior Subordinated Notes in March 1997.
EXTRAORDINARY LOSS FROM EXTINGUISHMENT OF DEBT
In January 1997, the Company called for redemption on March 15, 1997 of all of
its outstanding 10 1/2% Senior Subordinated Notes due 2002 at 103% of
principal amount plus accrued interest. The redemption resulted in an
extraordinary loss in the first quarter of fiscal 1997 of $2,772,000, net of
1,659,000 of income taxes. The loss represents the redemption premium and a
write-off of unamortized deferred issuance costs. The redemption and related
refinancing will result in the reduction of the Company's interest costs of
approximately $2 million annually. (See - "Capital Resources and Liquidity"
below).
CAPITAL RESOURCES AND LIQUIDITY
Funding for the Company's residential development activities has been
principally provided by cash flows from operations, unsecured bank borrowings
and the public debt and equity markets.
The Company has a $250 million unsecured revolving credit facility with
fifteen banks which extends through June 2000. The facility reduces by 50% in
June 1999 unless extended as provided for in the agreement. As of April 30,
1997, the Company had $50 million of loans and approximately $22.7 million of
letters of credit outstanding under the facility.
In November 1996, the Company issued $100 million of 8 3/4% Senior
Subordinated Notes due 2006. In addition, in March 1997, the Company borrowed
$50 million from two banks for a five year period at 7.72%. The Company used
a portion of the proceeds from these sources to redeem the $87.8 million
principal amount of its 10 1/2% Senior Subordinated Notes due 2002 in March
1997.
In April 1997, Standard & Poor's Rating Group upgraded the Company's Corporate
Credit Rating to BBB- and the ratings on its approximately $220 million of
senior subordinated notes to BB+.
The Company believes that it will be able to continue to fund its activities
through a combination of operating cash flow and existing sources of credit.
HOUSING DATA
<TABLE>
<CAPTION>
Six Months Three Months
Ended April 30 Ended April 30
----------------- ----------------
1997 1996 1997 1996
---- ---- ---- ----
Period ended April 30:
<S> <C> <C> <C> <C>
# of homes closed 1,088 806 538 415
# of homes contracted 1,314 1,237 872 823
Sales value of homes
contracted (in thous.) $528,126 $447,025 $354,611 $299,132
April 30, Oct.31 April 30, Oct. 31
1997 1996 1996 1995
---- ---- ---- ----
# of homes in backlog 1,593 1,367 1,509 1,078
Sales value of homes in
backlog (in thous.) $644,370 $ 526,194 $561,224 $400,820
</TABLE>
<PAGE>
PART II. Other Information
ITEM 1. Legal Proceedings
None.
ITEM 2. Changes in Securities
None.
ITEM 3. Defaults upon Senior Securities
None.
ITEM 4. Submission of Matters to a Vote of Security Holders
(a) The Company's 1997 Annual Meeting of Shareholders was held on
March 5, 1997.
(b) Not required.
(c) The following proposals were submitted to a vote of shareholders
and were approved by the affirmative vote of a majority of the
shares of common stock of the Company that were present in
person or by proxy, as indicated below.
(i) The approval of the proposed amendment to the Company's Stock
Option Plan and Incentive Stock Plan (1995).
FOR AGAINST ABSTAIN
---------- ---------- ---------
19,900,818 6,380,024 58,777
(ii) The approval of the proposed amendment of the Company's Stock
Option and Incentive Stock Plan (1995).
FOR AGAINST ABSTAIN
---------- ---------- ---------
18,454,021 7,823,673 61,925
(iii) The approval of Ernst & Young LLP as the Company's
independent auditors for the 1997 fiscal year.
FOR AGAINST ABSTAIN
---------- ---------- ----------
26,282,365 25,130 32,124
ITEM 5. Other Information
None.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 11. Statement Regarding Computation of Per
Share Earnings.
Exhibit 27. Financial Data Schedule
(b) Reports on Form 8-K
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TOLL BROTHERS, INC.
(Registrant)
Date: June 4, 1997 By: /s/ Joel H. Rassman
-------------------- -------------------------
Joel H. Rassman
Senior Vice President,
Treasurer and Chief
Financial Officer
Date: June 4, 1997 By: /s/ Joseph R. Sicree
-------------------- -------------------------
Joseph R. Sicree
Vice President -
Chief Accounting Officer
<TABLE>
<CAPTION>
TOLL BROTHERS, INC. & SUBSIDIARIES EXHIBIT 11
STATEMENT: COMPUTATION OF EARNINGS PER SHARE
Six Months Six Months
ended April 30 ended April 30
-------------- --------------
1997 1996
---- ----
Income before extraordinary loss
<S> <C> <C>
per income statement $26,700,000 $16,246,000
Addback: Interest on convertible
debentures, net of income taxes 756,000 785,000
----------- -----------
Income before extraordinary loss
(Fully-diluted) $27,456,000 $17,031,000
=========== ===========
Per share:
Primary $ 0.77 $ 0.47
Fully-diluted $ 0.74 $ 0.46
PRIMARY SHARES:
Weighted average shares outstanding 34,034,942 33,823,950
Common stock equivalents - stock options 702,525 702,829
------------ -----------
TOTAL 34,737,467 34,526,779
============ ===========
FULLY-DILUTED SHARES:
Weighted average shares outstanding 34,034,942 33,823,950
Common stock equivalents - stock options 702,825 717,702
Shares issuable on conversion of
subordinated debentures 2,344,782 2,434,182
------------ -----------
TOTAL 37,082,549 36,975,834
============ ===========
Three Months Three Months
ended April 30 ended April 30
-------------- --------------
1997 1996
---- ----
Income before extraordinary loss
per income statement $12,603,000 $ 7,978,000
Addback: Interest on convertible
debentures, net of income taxes 378,000 390,000
----------- -----------
Income before extraordinary loss
(Fully diluted) $12,981,000 $ 8,368,000
=========== ===========
Earnings per share:
Primary $ 0.36 $ 0.23
Fully Diluted $ 0.35 $ 0.23
PRIMARY SHARES:
Weighted average shares outstanding 34,124,523 33,899,709
Common stock equivalents - stock options 668,166 606,758
----------- -----------
TOTAL 34,792,689 34,506,467
=========== ===========
FULLY-DILUTED SHARES:
Weighted average shares outstanding 34,124,523 33,899,709
Common stock equivalents - stock options 668,532 606,890
Shares issuable on conversion of
subordinated debentures 2,344,782 2,422,432
----------- -----------
TOTAL 37,137,837 36,929,031
=========== ===========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000794170
<NAME> TOLL BROTHERS, INC.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> APR-30-1997
<CASH> 42,606
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 843,433
<CURRENT-ASSETS> 0
<PP&E> 32,581
<DEPRECIATION> 17,417
<TOTAL-ASSETS> 929,443
<CURRENT-LIABILITIES> 0
<BONDS> 219,924
<COMMON> 342
0
0
<OTHER-SE> 342,478
<TOTAL-LIABILITY-AND-EQUITY> 929,443
<SALES> 409,950
<TOTAL-REVENUES> 411,726
<CGS> 317,980
<TOTAL-COSTS> 356,873
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12,742
<INCOME-PRETAX> 42,111
<INCOME-TAX> 15,411
<INCOME-CONTINUING> 26,700
<DISCONTINUED> 0
<EXTRAORDINARY> 2,772
<CHANGES> 0
<NET-INCOME> 23,928
<EPS-PRIMARY> .69
<EPS-DILUTED> .67
</TABLE>
