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8-K - FORM 8-K - NVR INCv300380_8k.htm

NVR, Inc. Announces Fourth Quarter and Full Year Results

RESTON, Va., Jan. 26, 2012 /PRNewswire/ -- 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, 2011 of $32,392,000, $6.32 per diluted share. Net income decreased 45% and diluted earnings per share decreased 37% for its fourth quarter ended December 31, 2011 when compared to the 2010 fourth quarter. Consolidated revenues for the fourth quarter of 2011 totaled $741,288,000, a 9% decrease from $811,005,000 for the comparable 2010 quarter.

For the year ended December 31, 2011, consolidated revenues were $2,659,149,000, 13% lower than the $3,041,892,000 reported for the same period of 2010. Net income for the year ended December 31, 2011 was $129,420,000, a decrease of 37% when compared to the year ended December 31, 2010. Diluted earnings per share for the year ended December 31, 2011 was $23.01, a decrease of 31% from $33.42 per diluted share for the comparable period of 2010.

Homebuilding

New orders in the fourth quarter of 2011 increased 22% to 2,158 units, when compared to 1,765 units in the fourth quarter of 2010. The cancellation rate in the fourth quarter of 2011 was 14.9% compared to 18.4% in the fourth quarter of 2010 and 15.0% in the third quarter of 2011. Settlements decreased in the fourth quarter of 2011 to 2,391 units, 9% lower than the same period of 2010. The Company's backlog of homes sold but not settled at the end the 2011 increased on a unit basis by 26% to 3,676 units and on a dollar basis by 21% to $1,160,879,000 when compared to the prior year end.

Homebuilding revenues for the three months ended December 31, 2011 totaled $728,808,000, 8% lower than the year earlier period. Gross profit margins decreased to 15.4% in the 2011 fourth quarter compared to 17.6% for the same period in 2010. Gross margins were negatively impacted by continued price pressure. Income before tax from the homebuilding segment totaled $43,939,000 in the 2011 fourth quarter, a decrease of 44% when compared to the fourth quarter of the previous year. Gross profit margins and pre-tax income were negatively impacted by a land deposit impairment charge of $4,445,000 in the fourth quarter of 2011 and $4,915,000 in the fourth quarter of 2010.

New orders for the 2011 fiscal year totaled 9,247 units, down 2% when compared to the 9,415 units reported for 2010. Home settlements for 2011 decreased 15% to 8,487 units when compared to 10,030 units settled in 2010. Homebuilding revenues for 2011 totaled $2,611,195,000, 12% lower than 2010. Gross profit margins decreased to 17.1% in 2011 from 18.2% in 2010. Pre-tax homebuilding income decreased 36% to $184,588,000 for the 2011 fiscal year when compared to 2010.

Mortgage Banking

Mortgage closed loan production of $520,919,000 for the three months ended December 31, 2011 was 13% lower than the same period last year. Operating income for the mortgage banking operations during the fourth quarter of 2011 decreased 17% to $6,506,000, when compared to $7,806,000 reported for the same period of 2010.

Mortgage closed loan production for the 2011 fiscal year decreased 16% to $1,868,472,000. Income before tax from the mortgage banking segment for 2011 decreased 30% to $22,988,000 from the $32,925,000 reported for 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-seven 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)






Three Months Ended December 31,


Twelve Months Ended December 31,





2011


2010


2011


2010

Homebuilding:










Revenues                                        


$        728,808


$        794,470


$     2,611,195


$     2,980,758


Other income


639


1,522


4,301


9,299


Cost of sales


(616,722)


(654,965)


(2,165,625)


(2,438,292)


Selling, general and administrative

(68,571)


(61,982)


(264,266)


(257,394)



Operating income


44,154


79,045


185,605


294,371


Interest expense


(215)


(338)


(1,017)


(4,903)



Homebuilding income


43,939


78,707


184,588


289,468












Mortgage Banking:










Mortgage banking fees


12,480


16,535


47,954


61,134


Interest income


1,913


1,608


5,702


5,411


Other income


145


202


456


767


General and administrative


(7,878)


(10,254)


(30,249)


(33,261)


Interest expense


(154)


(285)


(875)


(1,126)



Mortgage banking income


6,506


7,806


22,988


32,925












Income before taxes


50,445


86,513


207,576


322,393














Income tax expense


(18,053)


(27,815)


(78,156)


(116,388)












Net income


$          32,392


$          58,698


$        129,420


$        206,005












Basic earnings per share


$              6.51


$            10.41


$            23.66


$            34.96












Diluted earnings per share


$              6.32


$              9.96


$            23.01


$            33.42












Basic average shares outstanding


4,979


5,641


5,469


5,893












Diluted average shares outstanding


5,126


5,892


5,624


6,165














NVR, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share data)







December 31, 2011


December 31, 2010

ASSETS














Homebuilding:






Cash and cash equivalents


$                  475,566


$               1,190,731


Receivables


6,789


6,948


Inventory:







Lots and housing units, covered under








sales agreements with customers


363,833


275,272



Unsold lots and housing units


82,578


70,542



Land under development


78,045


78,058



Manufacturing materials and other


8,694


7,457






533,150


431,329










Assets related to consolidated variable interest entity

20,182


22,371


Contract land deposits, net


131,930


100,786


Property, plant and equipment, net


23,243


19,523


Reorganization value in excess of amounts







allocable to identifiable assets, net


41,580


41,580


Other assets, net


268,878


243,005






1,501,318


2,056,273









Mortgage Banking:






Cash and cash equivalents


4,766


2,661


Mortgage loans held for sale, net


252,352


177,244


Property and equipment, net


1,694


950


Reorganization value in excess of amounts







allocable to identifiable assets, net


7,347


7,347


Other assets


12,008


15,586






278,167


203,788












Total assets


$               1,779,485


$               2,260,061











(Continued)

NVR, Inc.

Consolidated Balance Sheets (Continued)

(in thousands, except share and per share data)






December 31, 2011


December 31, 2010

LIABILITIES AND SHAREHOLDERS' EQUITY












Homebuilding:






Accounts payable


$                  125,649


$                  115,578


Accrued expenses and other liabilities


183,810


237,052


Liabilities related to consolidated variable interest entity

1,013


500


Non-recourse debt related to consolidated variable






interest entity


4,983


7,592


Customer deposits


61,223


53,705


Other term debt


1,613


1,751





378,291


416,178








Mortgage Banking:






Accounts payable and other liabilities


26,395


13,171


Note payable


-


90,338





26,395


103,509










Total liabilities


404,686


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 December 31, 2011 and







December 31, 2010, respectively


206


206


Additional paid-in-capital


1,072,779


951,234


Deferred compensation trust – 152,964 and







158,894 shares of NVR, Inc. common







stock as of December 31, 2011 and







December 31, 2010, respectively


(25,581)


(27,582)


Deferred compensation liability


25,581


27,582


Retained earnings


4,158,492


4,029,072


Less treasury stock at cost – 15,578,565 and







14,894,357 shares at December 31, 2011







and December 31, 2010, respectively


(3,856,678)


(3,240,138)



Total shareholders’ equity


1,374,799


1,740,374



   Total liabilities and shareholders’ equity


$               1,779,485


$               2,260,061










NVR, Inc.

Operating Activity

(dollars in thousands)

(unaudited)






Three Months Ended December 31,


Twelve Months Ended December 31,





2011


2010


2011


2010












Homebuilding data:










New orders (units)











Mid Atlantic (1)


1,113


888


4,616


4,775



North East (2)


233


177


872


827



Mid East (3)


486


469


2,412


2,656



South East (4)


326


231


1,347


1,157



  Total


2,158


1,765


9,247


9,415













Average new order price


$            311.7


$            321.7


$            304.1


$            304.0













Settlements (units)











Mid Atlantic (1)


1,236


1,387


4,238


5,043



North East (2)


192


196


728


920



Mid East (3)


616


774


2,335


2,886



South East (4)


347


282


1,186


1,181



  Total


2,391


2,639


8,487


10,030













Average settlement price


$            304.6


$            301.0


$            307.5


$            297.1













Backlog (units)











Mid Atlantic (1)






1,973


1,595



North East (2)






376


232



Mid East (3)






807


730



South East (4)






520


359



  Total






3,676


2,916













Average backlog price






$            315.8


$            328.6













Community count (average)


381


379


384


371


Lots controlled at end of period






53,000


52,300












Mortgage banking data:










Loan closings


$        520,919


$        597,949


$     1,868,472


$     2,219,946


Capture rate


88%


91%


88%


90%












Common stock information:










Shares outstanding at end of period






4,977,633


5,663,556


Number of shares repurchased


38,323


63,516


1,017,588


644,562


Aggregate cost of shares repurchased

$          22,674


$          39,786


$        689,302


$        417,079


(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





CONTACT: Dan Malzahn, +1-703-956-4204