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HORSHAM, PA-Toll Brothers had another record-setting quarter for the three months ended July 31, a quarter in which its multifamily proportion of overall unit sales approached one fourth of all sales. For the locally based luxury homebuilder, multifamily applies only to condo units and attached townhouses. Total homebuilding revenues reached above $1.5 billion, up 55% over the same quarter a year ago. The backlog increased 48% to more than $6.4 billion, and contracts increased 19% to just over $1.9 billion. “With nine-month revenues running 57% ahead of last year’s record total, Robert I. Toll, chairman and CEO, said during a conference call, “we remain on track with our previous projection of approximately 70% net income growth in fiscal year 2005.”

Asked if sales in any area were slowing, Toll mentioned Vegas, New Jersey and Washington, DC. “Slowing,” he said, “means when we announce six new homes, instead of selling out in hours, it may take a week.” He acknowledged that this prevents increasing prices in these areas. “Phoenix is still red hot,” he added, “where five new sites were gone within an hour. A few weeks later, we release more and raise the price 2% to 3%.”

In discussing the June acquisition of Landstar Homes’ central Florida division in Orlando, Toll said, it included 94 units that were under contract for an average price of about $470,000, “which reduced our average overall home price by about $10,000.” Toll Brothers acquired 493 units from Landstar for $188 million, he said, indicating that the backlog would continue to lower Toll’s average home price. The asset, however, added approximately 2,500 lots to Toll Brothers’ Florida pipeline.

During the most recent quarter, 24% of total company home deliveries were multifamily, up from 17% in the same quarter a year ago. Toll said he expects multifamily unit sales to account for 16% of all 2005 deliveries. “Multifamily product will be about 21% of the total next year, and, based on the pipeline, it will be about 27% of all in 2007.”

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