NVR, Inc. Announces Full Year and Fourth Quarter Results

Jan 27, 2010, 09:00 ET from NVR, Inc.

RESTON, Va., Jan. 27 /PRNewswire-FirstCall/ -- NVR, Inc. (NYSE: NVR), one of the nation's largest homebuilding and mortgage banking companies, announced net income for its fourth quarter ended December 31, 2009 of $60,639,000, $9.61 per diluted share, compared to a net loss of $30,457,000 and diluted loss per share of $5.54 for its prior year fourth quarter.  Consolidated revenues for the fourth quarter of 2009 totaled $745,802,000, an 18% decrease from $910,174,000 for the comparable 2008 quarter.

For the year ended December 31, 2009, consolidated revenues were $2,743,848,000, 26% lower than the $3,693,039,000 reported for the year ended December 31, 2008.  Net income for the year ended December 31, 2009 was $192,180,000, compared to $100,892,000 for the year ended December 31, 2008.  Diluted earnings per share for the year ended December 31, 2009 was $31.26, an increase of 83% from $17.04 per diluted share for the comparable period of 2008.

Homebuilding

New orders in the fourth quarter of 2009 increased 47% to 2,000 units, compared to 1,357 units in the fourth quarter of 2008.  The cancellation rate in the quarter ended December 31, 2009 was 15% compared to 30% in the fourth quarter of 2008 and 14% in the third quarter of 2009.  Settlements decreased in the fourth quarter of 2009 to 2,550 units, 8% less than the same period of 2008.  

Homebuilding revenues for the quarter ended December 31, 2009 totaled $730,140,000, 19% lower than the year earlier period.  Gross profit margins increased to 18.9% in the 2009 fourth quarter compared to 2.6% for the same period in 2008.  Income before tax from homebuilding operations totaled $75,815,000 in the 2009 fourth quarter, compared to a loss of $56,978,000 in the fourth quarter of the previous year.  The fourth quarter 2008 gross profit margin results and pre-tax income were negatively impacted by a $109,800,000 land deposit impairment charge.  The fourth quarter 2008 results were also impacted by goodwill impairment charges of $11,686,000.

New orders for the 2009 fiscal year totaled 9,409 units, a 7% increase when compared to the 8,760 units reported for 2008.  Home settlements for 2009 decreased 16% to 9,042 units when compared to 10,741 units settled in 2008.  Homebuilding revenues for 2009 totaled $2,683,467,000, 26% lower than 2008.  Gross profit margins increased to 18.5% in 2009 from 12.6% in 2008.  Pre-tax homebuilding income increased to $263,083,000 for the 2009 fiscal year, an increase of 87% from the prior year.  Gross profit margins and pre-tax income were negatively impacted in 2008 by a $165,000,000 land deposit impairment charge.  The Company's backlog of homes sold but not settled at the end of 2009 increased on a unit basis by 12% to 3,531 units and on a dollar basis by 7% to $1,076,437,000 as compared to the prior year end.

Mortgage Banking

Mortgage closed loan production of $542,147,000 for the three months ended December 31, 2009 was 13% lower than the same period last year.  Income before tax for the mortgage banking operations during the fourth quarter of 2009 increased to $8,712,000, compared to $4,234,000 reported for the same period of 2008.  Pre-tax income in the current quarter was favorably impacted primarily by a decrease in incentives given to borrowers.

Mortgage closed loan production for the 2009 fiscal year decreased 12% to $2,060,376,000.  Income before tax from the mortgage banking segment for 2009 increased 32% to $35,331,000 from the $26,704,000 reported for 2008.

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, 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 Operations

(in thousands, except per share data)

Three Months Ended December 31,

Twelve Months Ended December 31,

2009

2008

2009

2008

Homebuilding:

  Revenues

$730,140

$899,535

$2,683,467

$3,638,702

  Other income

2,186

2,030

8,697

16,386

  Cost of sales

(592,221)

(875,779)

(2,185,733)

(3,181,010)

  Selling, general and administrative

(62,132)

(67,906)

(233,152)

(308,739)

       Operating income (loss)

77,973

(42,120)

273,279

165,339

  Interest expense

(2,158)

(3,172)

(10,196)

(12,902)

  Goodwill and intangible asset impairment

-

(11,686)

-

(11,686)

       Homebuilding income (loss)

75,815

(56,978)

263,083

140,751

Mortgage Banking:

  Mortgage banking fees

15,662

10,639

60,381

54,337

  Interest income

897

1,347

2,979

3,955

  Other income

171

214

629

745

  General and administrative

(7,755)

(7,756)

(27,474)

(31,579)

  Interest expense

(263)

(210)

(1,184)

(754)

       Mortgage banking income

8,712

4,234

35,331

26,704

Income (loss) before taxes

84,527

(52,744)

298,414

167,455

       Income tax (expense) benefit

(23,888)

22,287

(106,234)

(66,563)

Net income (loss)

$60,639

$(30,457)

$192,180

$100,892

Basic earnings (loss) per share

$10.21

$(5.54)

$33.10

$18.76

Diluted earnings (loss) per share

$9.61

$(5.54)

$31.26

$17.04

Basic average shares outstanding

5,939

5,497

5,807

5,379

Diluted average shares outstanding

6,311

5,497

6,149

5,920

NVR, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share data)

December 31, 2009

December 31, 2008

ASSETS

Homebuilding:

   Cash and cash equivalents

$1,248,689

$1,146,426

   Marketable securities

219,535

-

   Receivables

7,995

11,594

   Inventory:

     Lots and housing units, covered under

      sales agreements with customers

337,523

335,238

     Unsold lots and housing units

73,673

57,639

    Manufacturing materials and other

7,522

7,693

418,718

400,570

   Contract land deposits, net

49,906

29,073

   Consolidated assets not owned

70,430

114,930

   Property, plant and equipment, net

20,215

25,658

   Reorganization value in excess of amounts

    allocable to identifiable assets, net

41,580

41,580

   Other assets, net

258,659

242,626

2,335,727

2,012,457

Mortgage Banking:

   Cash and cash equivalents

1,461

1,217

   Mortgage loans held for sale, net

40,097

72,488

   Property and equipment, net

446

759

   Reorganization value in excess of amounts

    allocable to identifiable assets, net

7,347

7,347

   Other assets

10,692

8,968

60,043

90,779

   Total assets

$2,395,770

$2,103,236

(Continued)

NVR, Inc.

Consolidated Balance Sheets (Continued)

(in thousands, except share and per share data)

December 31, 2009

December 31, 2008

LIABILITIES AND SHAREHOLDERS' EQUITY

Homebuilding:

   Accounts payable

$120,464 

$137,285 

   Accrued expenses and other liabilities

221,352 

194,869 

   Liabilities related to consolidated assets not owned

65,915 

109,439 

   Customer deposits

63,591 

59,623 

   Other term debt

2,166 

2,530 

   Senior notes

133,370 

163,320 

606,858 

667,066 

Mortgage Banking:

   Accounts payable and other liabilities

19,306 

17,842 

   Notes payable

12,344 

44,539 

31,650 

62,381 

   Total liabilities

638,508 

729,447 

   Commitments and contingencies

   Shareholders' equity:

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

    shares authorized; 20,559,671 and 20,561,187

    shares issued for December 31, 2009 and

    December 31, 2008, respectively

206 

206 

   Additional paid-in capital

830,531 

722,265 

   Deferred compensation trust – 265,278 and

    514,470 shares of NVR, Inc. common stock for

    December 31, 2009 and December 31, 2008,

    respectively

(40,799)

(74,978)

   Deferred compensation liability

40,799 

74,978 

   Retained earnings

3,823,067 

3,630,887 

   Less treasury stock at cost – 14,609,560 and

    15,028,335 shares for December 31, 2009 and

     December 31, 2008, respectively

(2,896,542)

(2,979,569)

   Total shareholders' equity

1,757,262 

1,373,789 

   Total liabilities and shareholders' equity

$2,395,770 

$2,103,236 

NVR, Inc.

Operating Activity

(unaudited)

(dollars in thousands)

Three Months Ended December 31,

Twelve Months Ended December 31,

2009

2008

2009

2008

Homebuilding data:

   New orders (units):

       Mid Atlantic (1)

986

692

4,809

4,290

       North East (2)

201

159

904

884

       Mid East (3)

545

360

2,552

2,380

       South East (4)

268

146

1,144

1,206

         Total

2,000

1,357

9,409

8,760

   Average new order price

$297.8

$296.0

$292.7

$311.3

   Settlements (units):

       Mid Atlantic (1)

1,349

1,389

4,722

5,240

       North East (2)

241

273

882

1,086

       Mid East (3)

655

750

2,323

2,762

       South East (4)

305

364

1,115

1,653

         Total

2,550

2,776

9,042

10,741

   Average settlement price

$286.2

$323.6

$296.4

$338.4

   Backlog (units):

       Mid Atlantic (1)

1,863

1,776

       North East (2)

325

303

       Mid East (3)

960

731

       South East (4)

383

354

         Total

3,531

3,164

   Average backlog price

$304.9

$316.9

Community count (average)

352

397

355

427

Lots controlled at end of year

46,300

45,000

Mortgage banking data:

   Loan closings

$542,147

$623,623

$2,060,376

$2,351,341

   Capture rate

90%

89%

91%

85%

Common stock information:

Shares outstanding at end of year

5,950,111

5,532,852

(1) Virginia, West Virginia, Maryland and Delaware

(2) Eastern Pennsylvania and New Jersey

(3) Western Pennsylvania, Kentucky, New York, Ohio, and Indiana

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

SOURCE NVR, Inc.



RELATED LINKS

http://www.nvrinc.com