Earnings fall 85 percent at Toll Brothers
Luxury home builder Toll Brothers saw net income fall 85 percent in the third quarter, to $26.5 million from $174.6 million last year.
Total revenue fell 30 percent to $1.21 billion from $1.53 billion in the same period last year.
The company took heavy charges and write-offs in the third quarter because of canceled land option contracts and devaluation of property. The company took after-tax write-downs totaling $88.5 million.
The company’s net home contracts declined 31 percent for the quarter, to $727 million from $1.05 billion last year.
CFO Joel Rassman noted the results were in line with earlier predictions of lower results and inconsistencies due to a volatile housing market.
“Given the numerous uncertainties surrounding sales paces, the mortgage markets, market direction and the potential for and size of future impairments, in the current environment we are not comfortable providing fourth-quarter guidance at this time or confirming any previous guidance,” Rassman said.
Toll Brothers builds luxury homes in 22 states.
Akzo Nobel continues in acquisition bid for ICI
Netherlands-based coatings company Akzo Nobel is growing closer to acquiring Imperial Chemical Industries, the coatings giant known as ICI Paints.
ICI, with a corporate parent based in the United Kingdom, has a large North American presence with brands including Dulux, Glidden and Liquid Nails. The company was number 16 on HCN’s Top 500 list of home channel retailers, following estimated 2006 sales at ICI’s retail stores of $1.8 billion.
Akzo has upped its bid for ICI to about $16 billion (8 billion pounds) and, in recent weeks, has expressed confidence in receiving shareholder backing for the bid. According to Bloomberg, Akzo Nobel spokesman Tim van der Zanden said this week, “We are convinced that we will get the backing of our shareholders at a meeting at the end of October. We have already been on a mini-roadshow.”
Some shareholders reportedly like the new deal, which sets a per-share price that is more than 20 percent higher than ICI’s stock was worth on June 15. But at least one investment firm criticized the proposal — United States-based TPG-Axon, which owns a 3.5 percent stake in Akzo Nobel, reportedly called the deal “overpriced” and said it would lead to lower value for Akzo Nobel’s own stock.
If the acquisition comes to fruition, ICI will sell its U.S. National Starch Unit to Henkel, a German detergent maker.
In June, the U.K. Takeover Panel ordered Akzo Nobel to make a formal bid for ICI. Prior to that, Akzo Nobel made an informal bid of $14.2 billion for the paint giant. In May, ICI announced plans to delist from the New York Stock Exchange in a bid to save about $8 million. ICI sells paint in Europe, the Americas and in the Asia-Pacific region.
Akzo manufactures paints and coatings under the names Crown, Sikken and Schoenox, among others, with operations in 60 countries.
Leonard Green & Partners completes purchase of Container Store
The sale of specialty retailer Container Store to private investment firm Leonard Green & Partners has been completed. Terms of the deal were not disclosed.
According to Container Store, the company’s retail store general managers and about 170 employees in all were extended equity opportunities. Leonard Green & Partners has major investments in several retailers, including Petco and David’s Bridal.
As part of the deal, Container Store will take on a new six-member board of directors, consisting of company CEO Kip Tindell, president Melissa Reiff and chief merchandising officer Sharon Tindell. From Leonard Green & Partners, board members will be vp Jonathan Sokoloff, vp Kristofer Galashan and partner Timothy Flynn.
Container Store has 39 locations in the United States, with future stores planned in Denver and Cherry Hill, N.J.