RESTON, Va., Jan. 27, 2011 /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, 2010 of $58,698,000, $9.96 per diluted share. Net income was 3% lower than the net income reported for the 2009 fourth quarter. Diluted earnings per share was 4% higher than the year ago fourth quarter. Consolidated revenues for the fourth quarter of 2010 totaled $811,005,000, a 9% increase from $745,802,000 for the comparable 2009 quarter.
For the year ended December 31, 2010, consolidated revenues were $3,041,892,000, 11% higher than the $2,743,848,000 reported for the year ended December 31, 2009. Net income for the year ended December 31, 2010 was $206,005,000, compared to $192,180,000 for the year ended December 31, 2009. Diluted earnings per share for the year ended December 31, 2010 was $33.42, an increase of 7% from $31.26 per diluted share for the comparable period of 2009.
Homebuilding
New orders in the fourth quarter of 2010 decreased 12% to 1,765 units, compared to 2,000 units in the fourth quarter of 2009. The cancellation rate in the quarter ended December 31, 2010 was 18% compared to 15% in the fourth quarter of 2009 and 18% in the third quarter of 2010. Settlements increased in the fourth quarter of 2010 to 2,639 units, 3% more than the same period of 2009. The Company's backlog of homes sold but not settled at the end of 2010 decreased on a unit basis by 17% to 2,916 units and on a dollar basis by 11% to $958,287,000 as compared to the prior year end.
Homebuilding revenues for the quarter ended December 31, 2010 totaled $794,470,000, 9% higher than the year earlier period. Gross profit margins decreased to 17.6% in the 2010 fourth quarter compared to 18.9% for the same period in 2009. Income before tax from homebuilding operations totaled $78,707,000 in the 2010 fourth quarter, compared to $75,815,000 in the fourth quarter of the previous year. The fourth quarter 2010 gross profit margin results and pre-tax income were negatively impacted by a $4,915,000 land deposit impairment charge. The fourth quarter 2010 pre-tax income results also reflect a reversal of $7,000,000 of stock-based compensation expense to adjust the actual forfeiture experience from estimates made.
New orders for the 2010 fiscal year totaled 9,415 units and were flat compared to the 9,409 units reported for 2009. Home settlements for 2010 increased 11% to 10,030 units when compared to 9,042 units settled in 2009. Homebuilding revenues for 2010 totaled $2,980,758,000, 11% higher than 2009. Gross profit margins decreased to 18.2% in 2010 from 18.5% in 2009. Pre-tax homebuilding income increased to $289,468,000 for the 2010 fiscal year, an increase of 10% from the prior year. Gross profit margins and pre-tax income were negatively impacted in 2010 by a $4,264,000 land deposit impairment charge.
Mortgage Banking
Mortgage closed loan production of $597,949,000 for the three months ended December 31, 2010 was 10% higher than the same period last year. Income before tax for the mortgage banking operations during the fourth quarter of 2010 decreased to $7,806,000, compared to $8,712,000 reported for the same period of 2009. Pre-tax income in the current quarter was negatively impacted by a provision for loan losses of $4,200,000.
Mortgage closed loan production for the 2010 fiscal year increased 8% to $2,219,946,000. Income before tax from the mortgage banking segment for 2010 decreased 7% to $32,925,000 from the $35,331,000 reported for 2009. The full year 2010 pre-tax income results were negatively impacted by a $6,200,000 provision for loan losses.
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)
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| Three Months Ended December 31, |
| Twelve Months Ended December 31, | |
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| 2010 |
| 2009 |
| 2010 |
| 2009 | |
Homebuilding: |
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| Revenues |
| $ 794,470 |
| $ 730,140 |
| $ 2,980,758 |
| $ 2,683,467 | |
| Other income |
| 1,522 |
| 2,186 |
| 9,299 |
| 8,697 | |
| Cost of sales |
| (654,965) |
| (592,221) |
| (2,438,292) |
| (2,185,733) | |
| Selling, general and administrative | (61,982) |
| (62,132) |
| (257,394) |
| (233,152) | |
|
| Operating income |
| 79,045 |
| 77,973 |
| 294,371 |
| 273,279 | |
| Interest expense |
| (338) |
| (2,158) |
| (4,903) |
| (10,196) | |
|
| Homebuilding income |
| 78,707 |
| 75,815 |
| 289,468 |
| 263,083 | |
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Mortgage Banking: |
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| Mortgage banking fees |
| 16,535 |
| 15,662 |
| 61,134 |
| 60,381 | |
| Interest income |
| 1,608 |
| 897 |
| 5,411 |
| 2,979 | |
| Other income |
| 202 |
| 171 |
| 767 |
| 629 | |
| General and administrative |
| (10,254) |
| (7,755) |
| (33,261) |
| (27,474) | |
| Interest expense |
| (285) |
| (263) |
| (1,126) |
| (1,184) | |
|
| Mortgage banking income |
| 7,806 |
| 8,712 |
| 32,925 |
| 35,331 | |
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| |
Income before taxes |
| 86,513 |
| 84,527 |
| 322,393 |
| 298,414 | |
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| |
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| Income tax expense |
| (27,815) |
| (23,888) |
| (116,388) |
| (106,234) | |
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Net income |
| $ 58,698 |
| $ 60,639 |
| $ 206,005 |
| $ 192,180 | |
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Basic earnings per share |
| $ 10.41 |
| $ 10.21 |
| $ 34.96 |
| $ 33.10 | |
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Diluted earnings per share |
| $ 9.96 |
| $ 9.61 |
| $ 33.42 |
| $ 31.26 | |
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Basic average shares outstanding |
| 5,641 |
| 5,939 |
| 5,893 |
| 5,807 | |
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Diluted average shares outstanding |
| 5,892 |
| 6,311 |
| 6,165 |
| 6,149 | |
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NVR, Inc. Consolidated Balance Sheets (in thousands, except share and per share data)
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| December 31, 2010 |
| December 31, 2009 | |
ASSETS |
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Homebuilding: |
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| Cash and cash equivalents |
| $ 1,190,731 |
| $ 1,248,689 | |
| Marketable securities |
| - |
| 219,535 | |
| Receivables |
| 6,948 |
| 7,995 | |
| Inventory: |
|
|
|
| |
|
| Lots and housing units, covered under |
|
|
|
| |
|
|
| sales agreements with customers |
| 275,272 |
| 337,523 | |
|
| Unsold lots and housing units |
| 70,542 |
| 73,673 | |
|
| Land under development |
| 78,058 |
| - | |
|
| Manufacturing materials and other |
| 7,457 |
| 7,522 | |
|
|
|
|
| 431,329 |
| 418,718 | |
|
|
|
|
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|
| |
| Assets related to consolidated variable interest entities | 22,371 |
| 70,430 | |
| Contract land deposits, net |
| 100,786 |
| 49,906 | |
| Property, plant and equipment, net |
| 19,523 |
| 20,215 | |
| Reorganization value in excess of amounts |
|
|
|
| |
|
| allocable to identifiable assets, net |
| 41,580 |
| 41,580 | |
| Other assets, net |
| 243,005 |
| 258,659 | |
|
|
|
|
| 2,056,273 |
| 2,335,727 | |
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| |
Mortgage Banking: |
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|
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| |
| Cash and cash equivalents |
| 2,661 |
| 1,461 | |
| Mortgage loans held for sale, net |
| 177,244 |
| 40,097 | |
| Property and equipment, net |
| 950 |
| 446 | |
| Reorganization value in excess of amounts |
|
|
|
| |
|
| allocable to identifiable assets, net |
| 7,347 |
| 7,347 | |
| Other assets |
| 15,586 |
| 10,692 | |
|
|
|
|
| 203,788 |
| 60,043 | |
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| |
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| Total assets |
| $ 2,260,061 |
| $ 2,395,770 | |
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NVR, Inc. Consolidated Balance Sheets (Continued) (in thousands, except share and per share data) | |
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|
| December 31, 2010 |
| December 31, 2009 | |
LIABILITIES AND SHAREHOLDERS' EQUITY |
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Homebuilding: |
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| Accounts payable |
| $ 115,578 |
| $ 120,464 | |
| Accrued expenses and other liabilities |
| 237,052 |
| 221,352 | |
| Liabilities related to consolidated variable interest entities | 500 |
| 65,915 | |
| Non-recourse debt related to consolidated variable |
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| |
|
| interest entities |
| 7,592 |
| - | |
| Customer deposits |
| 53,705 |
| 63,591 | |
| Other term debt |
| 1,751 |
| 2,166 | |
| Senior notes |
| - |
| 133,370 | |
|
|
|
| 416,178 |
| 606,858 | |
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Mortgage Banking: |
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| Accounts payable and other liabilities |
| 13,171 |
| 19,306 | |
| Note payable |
| 90,338 |
| 12,344 | |
|
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|
| 103,509 |
| 31,650 | |
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| Total liabilities |
| 519,687 |
| 638,508 | |
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Commitments and contingencies |
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Shareholders' equity: |
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| Common stock, $0.01 par value; 60,000,000 |
|
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| |
|
| shares authorized; 20,557,913 and 20,559,671 |
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| shares issued as of December 31, 2010 and |
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| |
|
| December 31, 2009, respectively |
| 206 |
| 206 | |
| Additional paid-in-capital |
| 951,234 |
| 830,531 | |
| Deferred compensation trust – 158,894 and |
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| |
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| 265,278 shares of NVR, Inc. common stock as |
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| |
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| of December 31, 2010 and December 31, 2009, |
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| |
|
| respectively |
| (27,582) |
| (40,799) | |
| Deferred compensation liability |
| 27,582 |
| 40,799 | |
| Retained earnings |
| 4,029,072 |
| 3,823,067 | |
| Less treasury stock at cost – 14,894,357 and |
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| |
|
| 14,609,560 shares at December 31, 2010 and |
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| |
|
| December 31, 2009, respectively |
| (3,240,138) |
| (2,896,542) | |
|
| Total shareholders’ equity |
| 1,740,374 |
| 1,757,262 | |
|
| Total liabilities and shareholders’ equity |
| $ 2,260,061 |
| $ 2,395,770 | |
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NVR, Inc. Operating Activity (unaudited) (dollars in thousands) | |
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| Three Months Ended December 31, |
| Twelve Months Ended December 31, | |
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|
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| 2010 |
| 2009 |
| 2010 |
| 2009 | |
|
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| |
Homebuilding data: |
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| New orders (units) |
|
|
|
|
|
|
|
| |
|
| Mid Atlantic (1) |
| 888 |
| 986 |
| 4,775 |
| 4,809 | |
|
| North East (2) |
| 177 |
| 201 |
| 827 |
| 904 | |
|
| Mid East (3) |
| 469 |
| 545 |
| 2,656 |
| 2,552 | |
|
| South East (4) |
| 231 |
| 268 |
| 1,157 |
| 1,144 | |
|
| Total |
| 1,765 |
| 2,000 |
| 9,415 |
| 9,409 | |
|
|
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| |
| Average new order price |
| $ 321.7 |
| $ 297.8 |
| $ 304.0 |
| $ 292.7 | |
|
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| Settlements (units) |
|
|
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|
|
|
| |
|
| Mid Atlantic (1) |
| 1,387 |
| 1,349 |
| 5,043 |
| 4,722 | |
|
| North East (2) |
| 196 |
| 241 |
| 920 |
| 882 | |
|
| Mid East (3) |
| 774 |
| 655 |
| 2,886 |
| 2,323 | |
|
| South East (4) |
| 282 |
| 305 |
| 1,181 |
| 1,115 | |
|
| Total |
| 2,639 |
| 2,550 |
| 10,030 |
| 9,042 | |
|
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| |
| Average settlement price |
| $ 301.0 |
| $ 286.2 |
| $ 297.1 |
| $ 296.4 | |
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| Backlog (units) |
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|
| Mid Atlantic (1) |
|
|
|
|
| 1,595 |
| 1,863 | |
|
| North East (2) |
|
|
|
|
| 232 |
| 325 | |
|
| Mid East (3) |
|
|
|
|
| 730 |
| 960 | |
|
| South East (4) |
|
|
|
|
| 359 |
| 383 | |
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| Total |
|
|
|
|
| 2,916 |
| 3,531 | |
|
|
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| Average backlog price |
|
|
|
|
| $ 328.6 |
| $ 304.9 | |
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| |
| Community count (average) |
| 379 |
| 352 |
| 371 |
| 355 | |
| Lots controlled at end of period |
|
|
|
|
| 52,300 |
| 46,300 | |
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Mortgage banking data: |
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|
|
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|
|
|
| |
| Loan closings |
| $ 597,949 |
| $ 542,147 |
| $ 2,219,946 |
| $ 2,060,376 | |
| Capture rate |
| 91% |
| 90% |
| 90% |
| 91% | |
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Common stock information: |
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|
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| Shares outstanding at end of period |
|
|
|
|
| 5,663,556 |
| 5,950,111 | |
| Number of shares repurchased |
| 63,516 |
| - |
| 644,562 |
| - | |
| Aggregate cost of shares repurchased | $ 39,786 |
| - |
| $ 417,079 |
| - | |
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- Virginia, West Virginia, Maryland and Delaware
- New Jersey and eastern Pennsylvania
- Kentucky, western Pennsylvania, New York, Ohio and Indiana
- North Carolina, South Carolina, Tennessee and Florida
CONTACT: Dan Malzahn of NVR, Inc., Office, +1-703-956-4204
