Toll Brothers beginning to deploy cash for selective land purchases

By Jennifer Lanning Drey

Portland, Ore., June 3 - Toll Brothers, Inc. is satisfied with its cash position and is beginning to use some of its cash for distressed land opportunities as offerings improve, Robert Toll, chief executive officer of Toll Brothers, said Wednesday during the company's earnings conference call for the second quarter of fiscal 2009.

"Although we continue to proceed cautiously with our solid capital base, we believe we are well positioned to take advantage of these opportunities," Toll said.

The company ended the second quarter with $1.96 billion of cash. Excluding about $389 million of net proceeds from its April debt issuance, Toll's cash increased by $40 million from the end of the prior quarter.

During the call, Toll said land sellers appear to be more motivated, which is resulting in better quality properties being marketed at more realistic pricing.

In addition to its cash, Toll had $1.34 billion available under its $1.89 billion credit facility at April 30.

As previously reported, Toll used $304 million of its cash in May to redeem all but $50 million of its public debt maturing through 2011.

The company reported second-quarter revenues of $398.3 million, down 51% from the same period in 2008. The net loss was $83.2 million in the second quarter, compared to a net loss of $93.7 million in the prior-year period.

Based in Horsham, Pa., Toll Brothers is a builder of luxury single-family home communities, residential golf communities and urban low-, mid- and high-rise communities.

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