NVR, Inc. Announces Third Quarter Results

Oct 21, 2010, 09:00 ET from NVR, Inc.

RESTON, Va., Oct. 21 /PRNewswire-FirstCall/ -- 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, 2010 of $43,944,000, $7.31 per diluted share.  Net income and diluted earnings per share for its third quarter ended September 30, 2010 decreased 39% and 37%, respectively, compared to the 2009 third quarter.  Consolidated revenues for the third quarter of 2010 totaled $676,169,000, a 17% decrease from $814,016,000 for the comparable 2009 quarter.

For the nine months ended September 30, 2010, consolidated revenues were $2,230,887,000, 12% higher than the $1,998,046,000 reported for the same period of 2009.  Net income for the nine months ended September 30, 2010 was $147,307,000, an increase of 12% when compared to the nine months ended September 30, 2009.  Diluted earnings per share for the nine months ended September 30, 2010 was $23.49, an increase of 9% from $21.57 per diluted share for the comparable period of 2009.

Homebuilding

New orders in the third quarter of 2010 decreased 5% to 2,151 units, when compared to 2,255 units in the third quarter of 2009.  The cancellation rate in the quarter ended September 30, 2010 was 18% compared to 14% in the third quarter of 2009 and 12% in the second quarter of 2010.  Settlements decreased in the third quarter of 2010 to 2,127 units, 20% less than the same period of 2009.  The Company's backlog of homes sold but not settled at the end of the 2010 quarter decreased on a unit basis by 7% to 3,790 units and on a dollar basis by 2% to $1,184,488,000 when compared to the same period last year.

Homebuilding revenues for the three months ended September 30, 2010 totaled $661,935,000, 16% lower than the year earlier period.  Gross profit margins decreased to 18.3% in the 2010 third quarter compared to 19.7% for the same period in 2009.  Income before tax from the homebuilding segment totaled $58,419,000 in the 2010 third quarter, a decrease of 41% when compared to the third quarter of the previous year.

New orders for the nine months ended September 30, 2010 totaled 7,650, a 3% increase when compared to the 7,409 units reported for the same period of 2009.  Settlements for the nine months ended September 30, 2010 increased 14% to 7,391 units when compared to the same period of 2009.  Homebuilding revenues totaled $2,186,288,000 for the nine months ended September 30, 2010, 12% higher than the same period of 2009.  Homebuilding segment income for the nine months ended September 30, 2010 was $210,761,000, a 13% increase from the nine months ended September 30, 2009.  

Mortgage Banking

Mortgage closed loan production of $497,404,000 for the three months ended September 30, 2010 was 18% lower than the same period last year.  Operating income for the mortgage banking operations during the third quarter of 2010 decreased 56% to $6,471,000, when compared to $14,814,000 reported for the same period of 2009.

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-five metropolitan areas in fourteen 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, 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,

2010

2009

2010

2009

Homebuilding:

Revenues

$          661,935

$          792,510

$      2,186,288

$      1,953,327

Other income

3,298

2,222

7,777

6,511

Cost of sales

(540,783)

(636,642)

(1,783,327)

(1,593,512)

Selling, general and administrative

(65,534)

(56,662)

(195,412)

(171,020)

Operating income

58,916

101,428

215,326

195,306

Interest expense

(497)

(2,802)

(4,565)

(8,038)

Homebuilding income

58,419

98,626

210,761

187,268

Mortgage Banking:

Mortgage banking fees

14,234

21,506

44,599

44,719

Interest income

1,555

887

3,803

2,082

Other income

166

215

565

458

General and administrative

(9,203)

(7,486)

(23,007)

(19,719)

Interest expense

(281)

(308)

(841)

(921)

Mortgage banking income

6,471

14,814

25,119

26,619

Income before taxes

64,890

113,440

235,880

213,887

Income tax expense

(20,946)

(41,313)

(88,573)

(82,346)

Net income

$            43,944

$            72,127

$         147,307

$         131,541

Basic earnings per share

$                7.65

$              12.29

$             24.64

$             22.83

Diluted earnings per share

$                7.31

$              11.59

$             23.49

$             21.57

Basic average shares outstanding

5,748

5,866

5,978

5,762

Diluted average shares outstanding

6,011

6,223

6,271

6,098

NVR, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share data)

September 30, 2010

December 31, 2009

ASSETS

(unaudited)

Homebuilding:

Cash and cash equivalents

$               1,053,166

$              1,248,689

Marketable securities

25,000

219,535

Receivables

10,714

7,995

Inventory:

Lots and housing units, covered under

sales agreements with customers

411,045

337,523

Unsold lots and housing units

72,972

73,673

Land under development

72,856

-

Manufacturing materials and other

5,441

7,522

562,314

418,718

Assets related to consolidated variable interest entities

22,771

70,430

Contract land deposits, net

91,005

49,906

Property, plant and equipment, net

18,859

20,215

Reorganization value in excess of amounts

allocable to identifiable assets, net

41,580

41,580

Other assets, net

235,154

258,659

2,060,563

2,335,727

Mortgage Banking:

Cash and cash equivalents

2,303

1,461

Mortgage loans held for sale, net

170,601

40,097

Property and equipment, net

741

446

Reorganization value in excess of amounts

allocable to identifiable assets, net

7,347

7,347

Other assets

8,264

10,692

189,256

60,043

Total assets

$               2,249,819

$              2,395,770

NVR, Inc.

Consolidated Balance Sheets (Continued)

(in thousands, except share and per share data)

September 30, 2010

December 31, 2009

LIABILITIES AND SHAREHOLDERS' EQUITY

(unaudited)

Homebuilding:

Accounts payable

$                   145,268

$                  120,464

Accrued expenses and other liabilities

215,507

221,352

Liabilities related to consolidated variable

interest entities

-

65,915

Non-recourse debt related to consolidated variable

interest entities

7,944

-

Customer deposits

70,462

63,591

Other term debt

1,895

2,166

Senior notes

-

133,370

441,076

606,858

Mortgage Banking:

Accounts payable and other liabilities

22,824

19,306

Note payable

99,241

12,344

122,065

31,650

Total liabilities

563,141

638,508

Commitments and contingencies

Shareholders' equity:

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

shares authorized; 20,559,671 shares issued as of

both September 30, 2010 and December 31, 2009

206

206

Additional paid-in-capital

937,623

830,531

Deferred compensation trust – 158,894 and

265,278 shares of NVR, Inc. common stock as

of September 30, 2010 and December 31, 2009,

respectively

(27,582)

(40,799)

Deferred compensation liability

27,582

40,799

Retained earnings

3,970,374

3,823,067

Less treasury stock at cost – 14,928,791 and

14,609,560 shares at September 30, 2010 and

December 31, 2009, respectively

(3,221,525)

(2,896,542)

Total shareholders’ equity

1,686,678

1,757,262

   Total liabilities and shareholders’ equity

$                2,249,819

$               2,395,770

NVR, Inc.

Operating Activity

(unaudited)

(dollars in thousands)

Three Months Ended September 30,

Nine Months Ended September 30,

2010

2009

2010

2009

Homebuilding data:

New orders (units)

Mid Atlantic (1)

1,193

1,199

3,887

3,823

North East (2)

171

222

650

703

Mid East (3)

559

560

2,187

2,007

South East (4)

228

274

926

876

  Total

2,151

2,255

7,650

7,409

Average new order price

$              306.3

$              297.1

$            299.9

$            291.3

Settlements (units)

Mid Atlantic (1)

1,049

1,388

3,656

3,373

North East (2)

222

260

724

641

Mid East (3)

625

722

2,112

1,668

South East (4)

231

301

899

810

  Total

2,127

2,671

7,391

6,492

Average settlement price

$              311.1

$              296.3

$            295.7

$            300.4

Backlog (units)

Mid Atlantic (1)

2,094

2,226

North East (2)

251

365

Mid East (3)

1,035

1,070

South East (4)

410

420

  Total

3,790

4,081

Average backlog price

$            312.5

$            296.6

Community count (average)

374

354

368

356

Lots controlled at end of period

51,600

43,700

Mortgage banking data:

Loan closings

$          497,404

$          603,317

$     1,621,997

$     1,518,229

Capture rate

91%

91%

90%

91%

Common stock information:

Shares outstanding at end of period

5,630,880

5,926,721

Number of shares repurchased

319,073

-

581,046

-

Aggregate cost of shares repurchased

$          201,209

-

$        377,293

-

(1) Virginia, West Virginia, Maryland and Delaware

(2) New Jersey and eastern Pennsylvania

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

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

SOURCE NVR, Inc.



RELATED LINKS

http://www.nvrinc.com