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NVR, Inc. Announces Third Quarter Results

RESTON, Va., Oct. 20, 2011 /PRNewswire via COMTEX/ --

NVR, Inc. (NYSE: NVR), one of the nation's largest homebuilding and mortgage banking companies, announced net income for its third quarter ended September 30, 2011 of $43,409,000, $7.98 per diluted share. Net income decreased 1% and diluted earnings per share increased 9% for its third quarter ended September 30, 2011 when compared to the 2010 third quarter. Consolidated revenues for the third quarter of 2011 totaled $707,476,000, a 5% increase from $676,169,000 for the comparable 2010 quarter.

For the nine months ended September 30, 2011, consolidated revenues were $1,917,861,000, 14% lower than the $2,230,887,000 reported for the same period of 2010. Net income for the nine months ended September 30, 2011 was $97,028,000, a decrease of 34% when compared to the nine months ended September 30, 2010. Diluted earnings per share for the nine months ended September 30, 2011 was $16.75, a decrease of 29% from $23.49 per diluted share for the comparable period of 2010.

Homebuilding

New orders in the third quarter of 2011 increased 3% to 2,218 units, when compared to 2,151 units in the third quarter of 2010. The cancellation rate in the third quarter of 2011 was 15.0% compared to 17.9% in the third quarter of 2010 and 12.5% in the second quarter of 2011. Settlements increased in the third quarter of 2011 to 2,255 units, 6% higher than the same period of 2010. Homebuilding revenues for the three months ended September 30, 2011 totaled $696,980,000, 5% higher than the year earlier period.

Gross profit margins decreased to 17.9% in the 2011 third quarter compared to 18.3% for the same period in 2010. Income before tax from the homebuilding segment totaled $64,685,000 in the 2011 third quarter, an increase of 11% when compared to the third quarter of the previous year. The Company's backlog of homes sold but not settled at the end of the 2011 quarter increased on a unit basis by 3% to 3,909 units and on a dollar basis by 3% to $1,216,642,000 when compared to the same period last year.

Mortgage Banking

Mortgage closed loan production of $489,866,000 for the three months ended September 30, 2011 was 2% lower than the same period last year. Operating income for the mortgage banking operations during the third quarter of 2011 decreased 34% to $4,257,000, when compared to $6,471,000 reported for the same period of 2010.

About NVR

NVR, Inc. operates in two business segments: homebuilding and mortgage banking. The homebuilding unit sells and builds homes under the Ryan Homes, NVHomes, Rymarc Homes and Fox Ridge Homes trade names, and operates in twenty-six metropolitan areas in fifteen states. For more information about NVR, Inc. and its brands, see www.nvrinc.com, www.ryanhomes.com, www.nvhomes.com, www.foxridgehomes.com, and www.rymarc.com.

Some of the statements in this release made by the Company constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. Certain, but not necessarily all, of such forward-looking statements can be identified by the use of forward-looking terminology, such as "believes," "expects," "may," "will," "should" or "anticipates" or the negative thereof or other variations thereof or comparable terminology, or by discussion of strategies, each of which involves risks and uncertainties. All statements other than those of historical facts included herein, including those regarding market trends, NVR's financial position, business strategy, the outcome of pending litigation, projected plans and objectives of management for future operations, are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance of NVR to be materially different from future results, performance or achievements expressed or implied by the forward-looking statements. Such risk factors include, but are not limited to, general economic and business conditions (on both a national and regional level), interest rate changes, access to suitable financing by NVR and by NVR's customers, increased regulation of the mortgage banking industry, competition, the availability and cost of land and other raw materials used by NVR in its homebuilding operations, shortages of labor, weather related slow downs, building moratoria, governmental regulation, the ability of NVR to integrate any acquired business, fluctuation and volatility of stock and other financial markets, mortgage financing availability and other factors over which NVR has little or no control. The Company has no obligation to update such forward-looking statements.

NVR, Inc.

Consolidated Statements of Income

(in thousands, except per share data)

(Unaudited)






Three Months Ended September 30,


Nine Months Ended September 30,





2011


2010


2011


2010

Homebuilding:










Revenues


$ 696,980


$ 661,935


$ 1,882,387


$ 2,186,288


Other income


842


3,298


3,662


7,777


Cost of sales


(572,382)


(540,783)


(1,548,903)


(1,783,327)


Selling, general and administrative


(60,462)


(65,534)


(195,695)


(195,412)



Operating income


64,978


58,916


141,451


215,326


Interest expense


(293)


(497)


(802)


(4,565)



Homebuilding income


64,685


58,419


140,649


210,761












Mortgage Banking:










Mortgage banking fees


10,496


14,234


35,474


44,599


Interest income


1,589


1,555


3,789


3,803


Other income


151


166


311


565


General and administrative


(7,796)


(9,203)


(22,371)


(23,007)


Interest expense


(183)


(281)


(721)


(841)



Mortgage banking income


4,257


6,471


16,482


25,119












Income before taxes


68,942


64,890


157,131


235,880














Income tax expense


(25,533)


(20,946)


(60,103)


(88,573)












Net income


$ 43,409


$ 43,944


$ 97,028


$ 147,307












Basic earnings per share


$ 8.19


$ 7.65


$ 17.22


$ 24.64












Diluted earnings per share


$ 7.98


$ 7.31


$ 16.75


$ 23.49












Basic average shares outstanding


5,301


5,748


5,634


5,978












Diluted average shares outstanding


5,437


6,011


5,792


6,271


































NVR, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share data)















September 30, 2011


December 31, 2010

ASSETS



(unaudited)











Homebuilding:






Cash and cash equivalents


$ 492,331


$ 1,190,731


Receivables


7,281


6,948


Inventory:







Lots and housing units, covered under








sales agreements with customers


420,680


275,272



Unsold lots and housing units


62,520


70,542



Land under development


91,392


78,058



Manufacturing materials and other


6,621


7,457






581,213


431,329










Assets related to consolidated variable interest entity


21,802


22,371


Contract land deposits, net


127,570


100,786


Property, plant and equipment, net


22,986


19,523


Reorganization value in excess of amounts







allocable to identifiable assets, net


41,580


41,580


Other assets, net


288,495


243,005






1,583,258


2,056,273









Mortgage Banking:






Cash and cash equivalents


4,117


2,661


Mortgage loans held for sale, net


192,203


177,244


Property and equipment, net


1,066


950


Reorganization value in excess of amounts







allocable to identifiable assets, net


7,347


7,347


Other assets


11,625


15,586






216,358


203,788












Total assets


$ 1,799,616


$ 2,260,061









NVR, Inc.

Consolidated Balance Sheets (Continued)

(in thousands, except share and per share data)













September 30, 2011


December 31, 2010

LIABILITIES AND SHAREHOLDERS' EQUITY


(unaudited)










Homebuilding:






Accounts payable


$ 146,837


$ 115,578


Accrued expenses and other liabilities


203,297


237,052


Liabilities related to consolidated variable interest entity


1,052


500


Non-recourse debt related to consolidated variable







interest entity


5,685


7,592


Customer deposits


66,640


53,705


Other term debt


1,666


1,751





425,177


416,178








Mortgage Banking:






Accounts payable and other liabilities


28,420


13,171


Note payable


-


90,338





28,420


103,509










Total liabilities


453,597


519,687








Commitments and contingencies












Shareholders' equity:






Common stock, $0.01 par value; 60,000,000 shares







authorized; 20,556,198 and 20,557,913 shares







issued as of September 30, 2011 and







December 31, 2010, respectively


206


206


Additional paid-in-capital


1,054,234


951,234


Deferred compensation trust - 152,964 and







158,894 shares of NVR, Inc. common







stock as of September 30, 2011 and







December 31, 2010, respectively


(25,582)


(27,582)


Deferred compensation liability


25,582


27,582


Retained earnings


4,126,100


4,029,072


Less treasury stock at cost - 15,542,337 and







14,894,357 shares at September 30, 2011







and December 31, 2010, respectively


(3,834,521)


(3,240,138)



Total shareholders' equity


1,346,019


1,740,374



Total liabilities and shareholders' equity


$ 1,799,616


$ 2,260,061








NVR, Inc.

Operating Activity

(dollars in thousands)

(unaudited)






Three Months Ended September 30,


Nine Months Ended September 30,





2011


2010


2011


2010












Homebuilding data:










New orders (units)











Mid Atlantic (1)


1,139


1,193


3,503


3,887



North East (2)


179


171


639


650



Mid East (3)


544


559


1,926


2,187



South East (4)


356


228


1,021


926



Total


2,218


2,151


7,089


7,650













Average new order price


$ 306.5


$ 306.3


$ 301.8


$ 299.9













Settlements (units)











Mid Atlantic (1)


1,090


1,049


3,002


3,656



North East (2)


191


222


536


724



Mid East (3)


676


625


1,719


2,112



South East (4)


298


231


839


899



Total


2,255


2,127


6,096


7,391













Average settlement price


$ 308.9


$ 311.1


$ 308.6


$ 295.7













Backlog (units)











Mid Atlantic (1)






2,096


2,094



North East (2)






335


251



Mid East (3)






937


1,035



South East (4)






541


410



Total






3,909


3,790













Average backlog price






$ 311.2


$ 312.5













Community count (average)


389


374


385


368


Lots controlled at end of period






51,900


51,600












Mortgage banking data:










Loan closings


$ 489,866


$ 497,404


$ 1,347,553


$ 1,621,997


Capture rate


88%


91%


89%


90%












Common stock information:










Shares outstanding at end of period






5,013,861


5,630,880


Number of shares repurchased


567,788


319,073


979,265


581,046


Aggregate cost of shares repurchased


$ 365,743


$ 201,209


$ 666,628


$ 377,293


(1) Virginia, West Virginia, Maryland and Delaware

(2) New Jersey and eastern Pennsylvania

(3) Kentucky, western Pennsylvania, New York, Ohio, Indiana and Illinois

(4) North Carolina, South Carolina, Tennessee and Florida

SOURCE NVR, Inc.