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| 8-K - FORM 8-K - NVR INC | v229180_8k.htm |
NVR, Inc. Announces Second Quarter Results
RESTON, Va., July 21, 2011 /PRNewswire/ -- NVR, Inc. (NYSE: NVR), one of the nation's largest homebuilding and mortgage banking companies, announced net income for its second quarter ended June 30, 2011 of $38,445,000, $6.48 per diluted share. Net income and diluted earnings per share for its second quarter ended June 30, 2011 decreased 46% and 42%, respectively, when compared to the 2010 second quarter. Consolidated revenues for the second quarter of 2011 totaled $695,881,000, a 28% decrease from $964,504,000 for the comparable 2010 quarter.
For the six months ended June 30, 2011, consolidated revenues were $1,210,385,000, 22% lower than the $1,554,718,000 reported for the same period of 2010. Net income for the six months ended June 30, 2011 was $53,619,000, a decrease of 48% when compared to the six months ended June 30, 2010. Diluted earnings per share for the six months ended June 30, 2011 was $8.98, a decrease of 44% from $16.15 per diluted share for the comparable period of 2010.
Homebuilding
New orders in the second quarter of 2011 decreased 4% to 2,468 units, when compared to 2,559 units in the second quarter of 2010. The cancellation rate in the second quarter of 2011 was 12.5% compared to 12.0% in the second quarter of 2010 and 12.3% in the first quarter of 2011. Settlements decreased in the second quarter of 2011 to 2,207 units, 34% lower than the same period of 2010. Homebuilding revenues for the three months ended June 30, 2011 totaled $682,663,000, 28% lower than the year earlier period. The original June 30, 2010 settlement deadline to qualify for the Federal homebuyer tax credit resulted in a surge in settlement activity in the year ago second quarter.
Gross profit margins decreased to 18.2% in the 2011 second quarter compared to 18.5% for the same period in 2010. Income before tax from the homebuilding segment totaled $57,092,000 in the 2011 second quarter, a decrease of 46% when compared to the second 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 5% to 3,946 units and on a dollar basis by 4% to $1,233,269,000 when compared to the same period last year.
Mortgage Banking
Mortgage closed loan production of $504,116,000 for the three months ended June 30, 2011 was 29% lower than the same period last year. Operating income for the mortgage banking operations during the second quarter of 2011 decreased 46% to $6,262,000, when compared to $11,686,000 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-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, 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 June 30, | Six Months Ended June 30, | |||||||||
2011 | 2010 | 2011 | 2010 | |||||||
Homebuilding: | ||||||||||
Revenues | $ 682,663 | $ 946,972 | $ 1,185,407 | $ 1,524,353 | ||||||
Other income | 1,362 | 2,110 | 2,820 | 4,479 | ||||||
Cost of sales | (558,601) | (771,475) | (976,521) | (1,242,544) | ||||||
Selling, general and administrative | (68,045) | (69,137) | (135,233) | (129,878) | ||||||
Operating income | 57,379 | 108,470 | 76,473 | 156,410 | ||||||
Interest expense | (287) | (1,897) | (509) | (4,068) | ||||||
Homebuilding income | 57,092 | 106,573 | 75,964 | 152,342 | ||||||
Mortgage Banking: | ||||||||||
Mortgage banking fees | 13,218 | 17,532 | 24,978 | 30,365 | ||||||
Interest income | 1,085 | 1,492 | 2,200 | 2,248 | ||||||
Other income | 121 | 233 | 160 | 399 | ||||||
General and administrative | (7,898) | (7,275) | (14,575) | (13,804) | ||||||
Interest expense | (264) | (296) | (538) | (560) | ||||||
Mortgage banking income | 6,262 | 11,686 | 12,225 | 18,648 | ||||||
Income before taxes | 63,354 | 118,259 | 88,189 | 170,990 | ||||||
Income tax expense | (24,909) | (46,983) | (34,570) | (67,627) | ||||||
Net income | $ 38,445 | $ 71,276 | $ 53,619 | $ 103,363 | ||||||
Basic earnings per share | $ 6.65 | $ 11.64 | $ 9.24 | $ 16.96 | ||||||
Diluted earnings per share | $ 6.48 | $ 11.13 | $ 8.98 | $ 16.15 | ||||||
Basic average shares outstanding | 5,785 | 6,123 | 5,804 | 6,095 | ||||||
Diluted average shares outstanding | 5,929 | 6,405 | 5,974 | 6,402 | ||||||
NVR, Inc. Consolidated Balance Sheets (in thousands, except share and per share data) | |||||||
June 30, 2011 | December 31, 2010 | ||||||
ASSETS | (unaudited) | ||||||
Homebuilding: | |||||||
Cash and cash equivalents | $ 927,370 | $ 1,190,731 | |||||
Receivables | 7,871 | 6,948 | |||||
Inventory: | |||||||
Lots and housing units, covered under | |||||||
sales agreements with customers | 390,498 | 275,272 | |||||
Unsold lots and housing units | 58,071 | 70,542 | |||||
Land under development | 78,468 | 78,058 | |||||
Manufacturing materials and other | 8,142 | 7,457 | |||||
535,179 | 431,329 | ||||||
Assets related to consolidated variable interest entity | 23,022 | 22,371 | |||||
Contract land deposits, net | 129,202 | 100,786 | |||||
Property, plant and equipment, net | 23,530 | 19,523 | |||||
Reorganization value in excess of amounts | |||||||
allocable to identifiable assets, net | 41,580 | 41,580 | |||||
Other assets, net | 285,292 | 243,005 | |||||
1,973,046 | 2,056,273 | ||||||
Mortgage Banking: | |||||||
Cash and cash equivalents | 2,075 | 2,661 | |||||
Mortgage loans held for sale, net | 181,525 | 177,244 | |||||
Property and equipment, net | 1,081 | 950 | |||||
Reorganization value in excess of amounts | |||||||
allocable to identifiable assets, net | 7,347 | 7,347 | |||||
Other assets | 10,601 | 15,586 | |||||
202,629 | 203,788 | ||||||
Total assets | $ 2,175,675 | $ 2,260,061 | |||||
NVR, Inc. Consolidated Balance Sheets (Continued) (in thousands, except share and per share data) | ||||||
June 30, 2011 | December 31, 2010 | |||||
LIABILITIES AND SHAREHOLDERS' EQUITY | (unaudited) | |||||
Homebuilding: | ||||||
Accounts payable | $ 148,658 | $ 115,578 | ||||
Accrued expenses and other liabilities | 184,615 | 237,052 | ||||
Liabilities related to consolidated variable interest entity | 1,242 | 500 | ||||
Non-recourse debt related to consolidated variable | ||||||
interest entity | 6,535 | 7,592 | ||||
Customer deposits | 67,593 | 53,705 | ||||
Other term debt | 1,696 | 1,751 | ||||
410,339 | 416,178 | |||||
Mortgage Banking: | ||||||
Accounts payable and other liabilities | 24,891 | 13,171 | ||||
Note payable | 89,649 | 90,338 | ||||
114,540 | 103,509 | |||||
Total liabilities | 524,879 | 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 June 30, 2011 and December 31, | ||||||
2010, respectively | 206 | 206 | ||||
Additional paid-in-capital | 1,037,299 | 951,234 | ||||
Deferred compensation trust – 152,964 and | ||||||
158,894 shares of NVR, Inc. common | ||||||
stock as of June 30, 2011 and December | ||||||
31, 2010, respectively | (25,582) | (27,582) | ||||
Deferred compensation liability | 25,582 | 27,582 | ||||
Retained earnings | 4,082,691 | 4,029,072 | ||||
Less treasury stock at cost – 14,977,205 and | ||||||
14,894,357 shares at June 30, 2011 | ||||||
and December 31, 2010, respectively | (3,469,400) | (3,240,138) | ||||
Total shareholders’ equity | 1,650,796 | 1,740,374 | ||||
Total liabilities and shareholders’ equity | $ 2,175,675 | $ 2,260,061 | ||||
NVR, Inc. Operating Activity (dollars in thousands) (unaudited) | |||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||
Homebuilding data: | |||||||||||
New orders (units) | |||||||||||
Mid Atlantic (1) | 1,219 | 1,303 | 2,364 | 2,694 | |||||||
North East (2) | 208 | 219 | 460 | 479 | |||||||
Mid East (3) | 691 | 749 | 1,382 | 1,628 | |||||||
South East (4) | 350 | 288 | 665 | 698 | |||||||
Total | 2,468 | 2,559 | 4,871 | 5,499 | |||||||
Average new order price | $ 303.5 | $ 309.6 | $ 299.7 | $ 297.4 | |||||||
Settlements (units) | |||||||||||
Mid Atlantic (1) | 1,076 | 1,672 | 1,912 | 2,607 | |||||||
North East (2) | 217 | 282 | 345 | 502 | |||||||
Mid East (3) | 612 | 922 | 1,043 | 1,487 | |||||||
South East (4) | 302 | 469 | 541 | 668 | |||||||
Total | 2,207 | 3,345 | 3,841 | 5,264 | |||||||
Average settlement price | $ 309.2 | $ 283.0 | $ 308.5 | $ 289.5 | |||||||
Backlog (units) | |||||||||||
Mid Atlantic (1) | 2,047 | 1,950 | |||||||||
North East (2) | 347 | 302 | |||||||||
Mid East (3) | 1,069 | 1,101 | |||||||||
South East (4) | 483 | 413 | |||||||||
Total | 3,946 | 3,766 | |||||||||
Average backlog price | $ 312.5 | $ 315.3 | |||||||||
Community count (average) | 386 | 373 | 383 | 366 | |||||||
Lots controlled at end of period | 54,000 | 47,500 | |||||||||
Mortgage banking data: | |||||||||||
Loan closings | $ 504,116 | $ 706,551 | $ 857,687 | $ 1,124,593 | |||||||
Capture rate | 90% | 90% | 89% | 90% | |||||||
Common stock information: | |||||||||||
Shares outstanding at end of period | 5,578,993 | 5,924,548 | |||||||||
Number of shares repurchased | 326,017 | 261,973 | 411,477 | 261,973 | |||||||
Aggregate cost of shares repurchased | $ 237,477 | $ 176,084 | $ 300,885 | $ 176,084 | |||||||
(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 | |||||||||||
CONTACT: Dan Malzahn, +1-703-956-4204