Exhibit 99.1
NVR, INC. ANNOUNCES SECOND QUARTER RESULTS
| FOR IMMEDIATE RELEASE | Contact: | Dan Malzahn |
| | Office: | (703) 956-4204 |
July 22, 2010, Reston, VA—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, 2010 of $71,276,000, $11.13 per diluted share. Net income and diluted earnings per share for its second quarter ended June 30, 2010 increased 72% and 64%, respectively, when compared to the 2009 second quarter. Consolidated revenues for the second quarter of 2010 totaled $964,504,000, a 54% increase from $625,431,000 for the comparable 2009 quarter.
For the six months ended June 30, 2010, consolidated revenues were $1,554,718,000, 31% higher than the $1,184,030,000 reported for the same period of 2009. Net income for the six months ended June 30, 2010 was $103,363,000, an increase of 74% when compared to the six months ended June 30, 2009. Diluted earnings per share for the six months ended June 30, 2010 was $16.15, an increase of 64% from $9.85 per diluted share for the comparable period of 2009.
Homebuilding
New orders in the second quarter of 2010 decreased 6% to 2,559 units, when compared to 2,728 units in the second quarter of 2009. The original June 30, 2010 settlement deadline to qualify for the Federal homebuyer tax credit resulted in a surge in settlement activity in the second quarter of 2010. As a result, settlements increased in the second quarter of 2010 to 3,345 units, 63% more than the same period of 2009. Homebuilding revenues for the three months ended June 30, 2010 totaled $946,972,000, 55% higher than the year earlier period. Gross profit margins decreased to 18.5% in the 2010 second quarter compared to 19.3% for the same period in 2009. Income before tax from the homebuilding segment totaled $106,573,000 in the 2010 second quarter, an increase of 70% 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 2010 quarter decreased on a unit basis by 16% to 3,766 units and on a dollar basis by 11% to $1,187,599,000 when compared to the same period last year.
Mortgage Banking
Mortgage closed loan production of $706,551,000 for the three months ended June 30, 2010 was 45% higher than the same period last year. Operating income for the mortgage banking operations during the second quarter of 2010 increased 68% to $11,686,000, when compared to $6,957,000 reported for the same period of 2009.
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 June 30, | | | Six Months Ended June 30, | |
| | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
| Homebuilding: | | | | | | | | | | | | |
| Revenues | | $ | 946,972 | | | $ | 612,488 | | | $ | 1,524,353 | | | $ | 1,160,817 | |
| Other income | | | 2,110 | | | | 1,750 | | | | 4,479 | | | | 4,289 | |
| Cost of sales | | | (771,475 | ) | | | (494,240 | ) | | | (1,242,544 | ) | | | (956,870 | ) |
| Selling, general and administrative | | | (69,137 | ) | | | (54,664 | ) | | | (129,878 | ) | | | (114,358 | ) |
| Operating income | | | 108,470 | | | | 65,334 | | | | 156,410 | | | | 93,878 | |
| Interest expense | | | (1,897 | ) | | | (2,462 | ) | | | (4,068 | ) | | | (5,236 | ) |
| Homebuilding income | | | 106,573 | | | | 62,872 | | | | 152,342 | | | | 88,642 | |
| | | | | | | | | | | | | | | | | |
| Mortgage Banking: | | | | | | | | | | | | | | | | |
| Mortgage banking fees | | | 17,532 | | | | 12,943 | | | | 30,365 | | | | 23,213 | |
| Interest income | | | 1,492 | | | | 611 | | | | 2,248 | | | | 1,195 | |
| Other income | | | 233 | | | | 154 | | | | 399 | | | | 243 | |
| General and administrative | | | (7,275 | ) | | | (6,475 | ) | | | (13,804 | ) | | | (12,233 | ) |
| Interest expense | | | (296 | ) | | | (276 | ) | | | (560 | ) | | | (613 | ) |
| Mortgage banking income | | | 11,686 | | | | 6,957 | | | | 18,648 | | | | 11,805 | |
| | | | | | | | | | | | | | | | | |
| Income before taxes | | | 118,259 | | | | 69,829 | | | | 170,990 | | | | 100,447 | |
| | | | | | | | | | | | | | | | | |
| Income tax expense | | | (46,983 | ) | | | (28,403 | ) | | | (67,627 | ) | | | (41,033 | ) |
| | | | | | | | | | | | | | | | | |
| Net income | | $ | 71,276 | | | $ | 41,426 | | | $ | 103,363 | | | $ | 59,414 | |
| | | | | | | | | | | | | | | | | |
| Basic earnings per share | | $ | 11.64 | | | $ | 7.17 | | | $ | 16.96 | | | $ | 10.41 | |
| | | | | | | | | | | | | | | | | |
| Diluted earnings per share | | $ | 11.13 | | | $ | 6.79 | | | $ | 16.15 | | | $ | 9.85 | |
| | | | | | | | | | | | | | | | | |
| Basic average shares outstanding | | | 6,123 | | | | 5,777 | | | | 6,095 | | | | 5,710 | |
| | | | | | | | | | | | | | | | | |
| Diluted average shares outstanding | | | 6,405 | | | | 6,101 | | | | 6,402 | | | | 6,032 | |
NVR, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share data)
| | | June 30, 2010 | | | December 31, 2009 | |
| | | (unaudited) | | | | |
| ASSETS | | | | | | |
| | | | | | | |
| Homebuilding: | | | | | | |
| Cash and cash equivalents | | $ | 1,089,399 | | | $ | 1,248,689 | |
| Marketable securities | | | 175,000 | | | | 219,535 | |
| Receivables | | | 15,011 | | | | 7,995 | |
| Inventory: | | | | | | | | |
| Lots and housing units, covered under sales agreements with customers | | | 340,577 | | | | 337,523 | |
| Unsold lots and housing units | | | 55,871 | | | | 73,673 | |
| Land under development | | | 17,000 | | | | - | |
| Manufacturing materials and other | | | 7,253 | | | | 7,522 | |
| | | | 420,701 | | | | 418,718 | |
| | | | | | | | | |
| Assets related to consolidated variable interest entities | | | 22,980 | | | | 70,430 | |
| Contract land deposits, net | | | 71,389 | | | | 49,906 | |
| Property, plant and equipment, net | | | 19,075 | | | | 20,215 | |
| Reorganization value in excess of amounts allocable to identifiable assets, net | | | 41,580 | | | | 41,580 | |
| Other assets, net | | | 240,394 | | | | 258,659 | |
| | | | 2,095,529 | | | | 2,335,727 | |
| | | | | | | | | |
| Mortgage Banking: | | | | | | | | |
| Cash and cash equivalents | | | 1,483 | | | | 1,461 | |
| Mortgage loans held for sale, net | | | 244,313 | | | | 40,097 | |
| Property and equipment, net | | | 821 | | | | 446 | |
| Reorganization value in excess of amounts allocable to identifiable assets, net | | | 7,347 | | | | 7,347 | |
| Other assets | | | 9,942 | | | | 10,692 | |
| | | | 263,906 | | | | 60,043 | |
| | | | | | | | | |
| Total assets | | $ | 2,359,435 | | | $ | 2,395,770 | |
(Continued)
NVR, Inc.
Consolidated Balance Sheets (Continued)
(in thousands, except share and per share data)
| | | June 30, 2010 | | | December 31, 2009 | |
| | | (unaudited) | | | | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | |
| | | | | | | |
| Homebuilding: | | | | | | |
| Accounts payable | | $ | 161,708 | | | $ | 120,464 | |
| Accrued expenses and other liabilities | | | 207,281 | | | | 221,352 | |
| Liabilities related to consolidated variable interest entities | | | - | | | | 65,915 | |
| Customer deposits | | | 69,344 | | | | 63,591 | |
| Other term debt | | | 1,999 | | | | 2,166 | |
| Senior notes | | | - | | | | 133,370 | |
| | | | 440,332 | | | | 606,858 | |
| | | | | | | | | |
| Mortgage Banking: | | | | | | | | |
| Accounts payable and other liabilities | | | 24,612 | | | | 19,306 | |
| Note payable | | | 79,025 | | | | 12,344 | |
| | | | 103,637 | | | | 31,650 | |
| | | | | | | | | |
| Total liabilities | | | 543,969 | | | | 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 June 30, 2010 and December 31, 2009 | | | 206 | | | | 206 | |
| Additional paid-in-capital | | | 914,585 | | | | 830,531 | |
| Deferred compensation trust – 158,894 and 265,278 shares of NVR, Inc. common stock as of June 30, 2010 and December 31, 2009, respectively | | | (27,582 | ) | | | (40,799 | ) |
| Deferred compensation liability | | | 27,582 | | | | 40,799 | |
| Retained earnings | | | 3,926,430 | | | | 3,823,067 | |
| Less treasury stock at cost – 14,635,123 and 14,609,560 shares at June 30, 2010 and December 31, 2009, respectively | | | (3,025,755 | ) | | | (2,896,542 | ) |
| Total shareholders’ equity | | | 1,815,466 | | | | 1,757,262 | |
| Total liabilities and shareholders’ equity | | $ | 2,359,435 | | | $ | 2,395,770 | |
NVR, Inc.
Operating Activity
(unaudited)
(dollars in thousands)
| | | Three Months Ended June 30, | | | Six Months Ended June 30, | |
| | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
| | | | | | | | | | | | | |
| Homebuilding data: | | | | | | | | | | | | |
| New orders (units) | | | | | | | | | | | | |
| Mid Atlantic (1) | | | 1,303 | | | | 1,421 | | | | 2,694 | | | | 2,624 | |
| North East (2) | | | 219 | | | | 246 | | | | 479 | | | | 481 | |
| Mid East (3) | | | 749 | | | | 746 | | | | 1,628 | | | | 1,447 | |
| South East (4) | | | 288 | | | | 315 | | | | 698 | | | | 602 | |
| Total | | | 2,559 | | | | 2,728 | | | | 5,499 | | | | 5,154 | |
| | | | | | | | | | | | | | | | | |
| Average new order price | | $ | 309.6 | | | $ | 294.8 | | | $ | 297.4 | | | $ | 288.7 | |
| | | | | | | | | | | | | | | | | |
| Settlements (units) | | | | | | | | | | | | | | | | |
| Mid Atlantic (1) | | | 1,672 | | | | 1,057 | | | | 2,607 | | | | 1,985 | |
| North East (2) | | | 282 | | | | 197 | | | | 502 | | | | 381 | |
| Mid East (3) | | | 922 | | | | 533 | | | | 1,487 | | | | 946 | |
| South East (4) | | | 469 | | | | 261 | | | | 668 | | | | 509 | |
| Total | | | 3,345 | | | | 2,048 | | | | 5,264 | | | | 3,821 | |
| | | | | | | | | | | | | | | | | |
| Average settlement price | | $ | 283.0 | | | $ | 298.6 | | | $ | 289.5 | | | $ | 303.3 | |
| | | | | | | | | | | | | | | | | |
| Backlog (units) | | | | | | | | | | | | | | | | |
| Mid Atlantic (1) | | | | | | | | | | | 1,950 | | | | 2,415 | |
| North East (2) | | | | | | | | | | | 302 | | | | 403 | |
| Mid East (3) | | | | | | | | | | | 1,101 | | | | 1,232 | |
| South East (4) | | | | | | | | | | | 413 | | | | 447 | |
| Total | | | | | | | | | | | 3,766 | | | | 4,497 | |
| | | | | | | | | | | | | | | | | |
| Average backlog price | | | | | | | | | | $ | 315.3 | | | $ | 296.2 | |
| | | | | | | | | | | | | | | | | |
| Community count (average) | | | 373 | | | | 356 | | | | 366 | | | | 357 | |
| Lots controlled at end of period | | | | | | | | | | | 47,500 | | | | 44,300 | |
| | | | | | | | | | | | | | | | | |
| Mortgage banking data: | | | | | | | | | | | | | | | | |
| Loan closings | | $ | 706,551 | | | $ | 487,618 | | | $ | 1,124,593 | | | $ | 914,912 | |
| Capture rate | | | 90 | % | | | 92 | % | | | 90 | % | | | 91 | % |
| | | | | | | | | | | | | | | | | |
| Common stock information: | | | | | | | | | | | | | | | | |
| Shares outstanding at end of period | | | | | | | | | | | 5,924,548 | | | | 5,801,600 | |
| Number of shares repurchased | | | 261,973 | | | | - | | | | 261,973 | | | | - | |
| Aggregate cost of shares repurchased | | $ | 176,084 | | | | - | | | $ | 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 |
