HORSHAM, PA -- Toll Brothers, Inc., the nation's leading builder of luxury homes, reported fourth-quarter net income of $15.0 million, compared to FY 2010's fourth-quarter net income of $50.5 million. The homebuilder said fourth-quarter revenues totaled $427.8 million, and the company delivered 757 homes, compared with 2010 4Q sales of $402.6 million and 700 units delivered.
Douglas C. Yearley, Jr., Toll Brothers' chief executive officer, stated: "Against a backdrop of U.S. government gridlock and persistently high unemployment rates at home, political and economic crises around the globe, and dramatic volatility in the capital markets, we produced our second consecutive quarter of pre-tax profitability and our sixth consecutive quarter of pre-tax, pre-impairment profitability. Our pre-impairment home building gross margin improved nearly 250 basis points in FY 2011 compared to FY 2010. Although U.S. housing starts remain down 60 percent from historical norms, we produced solid improvement in most key metrics in FY 2011.
"Our strong balance sheet gives us the financial flexibility to invest for the future. During FY 2011, we spent approximately $281 million on land for our core traditional and urban new home business, purchasing approximately 3,400 lots and optioning another 5,800: this resulted in a net increase to 37,500 lots owned and controlled at FYE 2011 versus 34,700 at FYE 2010. Nearly 60% of our lots are concentrated in the land-constrained metro Washington DC to metro Boston corridor, which enjoys lower unemployment and greater affluence than many other regions. Recently, we announced our entry into the Seattle market through the acquisition of CamWest LLC, which added approximately 1,300 lots owned and 200 under option to our land position. During FY 2012, including Seattle, we project growing our community count by between 9% and 19% and reaching FYE 2012 with between 235 and 255 selling communities.
"The urban metro New York City market remains a bright light for us. In FY 2011, we opened for sale three new buildings under our "Toll Brothers City Living" brand. We launched 1450 Washington Avenue, the fourth building in our successful Hudson Tea project at the northern tip of Hoboken, New Jersey. In Manhattan, we opened The Touraine on the Upper East Side at 65th Street and Lexington Avenue, a small boutique building with an average projected sales price of $5 million per unit. On the Brooklyn waterfront, we opened 205 Water Street in the DUMBO neighborhood. Before opening for sale, The Touraine and 205 Water each had lists of over 3,000 potential customers who had expressed interest. In total, in the urban metro New York City market, we have completed 13 buildings of approximately 2,550 units, approximately 2,430 of which have been sold; we are in construction on three buildings of 245 units; and have eight more buildings of approximately 1,600 units in planning.
Martin P. Connor, Toll Brothers' chief financial officer, stated: "In this challenging environment, we are encouraged by our improving margins and continued string of modest profitability. We have enjoyed margin improvement in each of the past four quarters compared to the prior year's same periods.
"Based on our FYE 2011 backlog and our current community count, we currently estimate that we will deliver between 2,400 and 3,200 homes in FY 2012 at an average price of between $550,000 and $575,000 per home."