RESTON, Va., April 21, 2011 /PRNewswire/ -- NVR, Inc. (NYSE: NVR), one of the nation's largest homebuilding and mortgage banking companies, announced net income for its first quarter ended March 31, 2011 of $15,174,000, $2.52 per diluted share. Net income and diluted earnings per share for its first quarter ended March 31, 2011 decreased 53% and 50%, respectively, when compared to the 2010 first quarter. Consolidated revenues for the first three months of 2011 totaled $514,504,000, a 13% decrease from $590,214,000 for the comparable 2010 quarter.
Homebuilding
New orders in the first quarter of 2011 decreased 18% to 2,403 units, when compared to 2,940 units in the first quarter of 2010. The cancellation rate in the first quarter of 2011 was 12% compared to 9% in the first quarter of 2010 and 18% in the fourth quarter of 2010. Settlements decreased in the first quarter of 2011 to 1,634 units, 15% lower than the same period of 2010. The Company's backlog of homes sold but not settled at the end of the 2011 quarter decreased on a unit basis by 19% to 3,685 units from the same period last year. On a dollar basis, backlog declined to $1,166,721,000, a decrease of 13% when compared to the same period last year.
Homebuilding revenues for the three months ended March 31, 2011 totaled $502,744,000, 13% lower than the year earlier period. Gross profit margins were 16.9% in the 2011 first quarter compared to 18.4% for the same period in 2010. Income before tax from the homebuilding segment totaled $18,872,000, a decrease of 59% when compared to the first quarter of the previous year.
Mortgage Banking
Mortgage closed loan production of $353,571,000 for the three months ended March 31, 2011 was 15% lower than the same period last year. Income before tax for the mortgage banking operations during the first quarter of 2011 decreased 14% to $5,963,000, when compared to $6,962,000 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)
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| Three Months Ended March 31, | |
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| 2011 |
| 2010 | |
Homebuilding: |
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| |
| Revenues | $ 502,744 |
| $ 577,381 | |
| Other income | 1,458 |
| 2,369 | |
| Cost of sales | (417,920) |
| (471,069) | |
| Selling, general and administrative | (67,188) |
| (60,741) | |
|
| Operating income | 19,094 |
| 47,940 | |
| Interest expense | (222) |
| (2,171) | |
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| Homebuilding income | 18,872 |
| 45,769 | |
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Mortgage Banking: |
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| Mortgage banking fees | 11,760 |
| 12,833 | |
| Interest income | 1,115 |
| 756 | |
| Other income | 39 |
| 166 | |
| General and administrative | (6,677) |
| (6,529) | |
| Interest expense | (274) |
| (264) | |
|
| Mortgage banking income | 5,963 |
| 6,962 | |
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Income before taxes | 24,835 |
| 52,731 | |
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| Income tax expense | (9,661) |
| (20,644) | |
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Net income | $ 15,174 |
| $ 32,087 | |
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Basic earnings per share | $ 2.61 |
| $ 5.29 | |
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Diluted earnings per share | $ 2.52 |
| $ 5.01 | |
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Basic average shares outstanding | 5,823 |
| 6,066 | |
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Diluted average shares outstanding | 6,020 |
| 6,399 | |
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NVR, Inc. Consolidated Balance Sheets (in thousands, except share and per share data)
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| March 31, 2011 |
| December 31, 2010 | |
ASSETS |
| (unaudited) |
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Homebuilding: |
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| Cash and cash equivalents |
| $ 1,217,670 |
| $ 1,190,731 | |
| Receivables |
| 7,378 |
| 6,948 | |
| Inventory: |
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| Lots and housing units, covered under |
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| |
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| sales agreements with customers |
| 349,096 |
| 275,272 | |
|
| Unsold lots and housing units |
| 60,172 |
| 70,542 | |
|
| Land under development |
| 77,075 |
| 78,058 | |
|
| Manufacturing materials and other |
| 5,901 |
| 7,457 | |
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|
| 492,244 |
| 431,329 | |
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| Assets related to consolidated variable interest entity | 22,801 |
| 22,371 | |
| Contract land deposits, net |
| 116,753 |
| 100,786 | |
| Property, plant and equipment, net |
| 18,963 |
| 19,523 | |
| Reorganization value in excess of amounts |
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| allocable to identifiable assets, net |
| 41,580 |
| 41,580 | |
| Other assets, net |
| 232,072 |
| 243,005 | |
|
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| 2,149,461 |
| 2,056,273 | |
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Mortgage Banking: |
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| Cash and cash equivalents |
| 2,555 |
| 2,661 | |
| Mortgage loans held for sale, net |
| 105,611 |
| 177,244 | |
| Property and equipment, net |
| 887 |
| 950 | |
| Reorganization value in excess of amounts |
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| |
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| allocable to identifiable assets, net |
| 7,347 |
| 7,347 | |
| Other assets |
| 9,867 |
| 15,586 | |
|
|
|
|
| 126,267 |
| 203,788 | |
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| Total assets |
| $ 2,275,728 |
| $ 2,260,061 | |
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NVR, Inc. Consolidated Balance Sheets (Continued) (in thousands, except share and per share data)
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| March 31, 2011 |
| December 31, 2010 | |
LIABILITIES AND SHAREHOLDERS' EQUITY |
| (unaudited) |
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Homebuilding: |
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| Accounts payable |
| $ 115,977 |
| $ 115,578 | |
| Accrued expenses and other liabilities |
| 172,608 |
| 237,052 | |
| Liabilities related to consolidated variable interest entity |
| 995 |
| 500 | |
| Non-recourse debt related to consolidated variable |
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| |
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| interest entity |
| 7,587 |
| 7,592 | |
| Customer deposits |
| 62,894 |
| 53,705 | |
| Other term debt |
| 1,714 |
| 1,751 | |
|
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| 361,775 |
| 416,178 | |
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Mortgage Banking: |
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| Accounts payable and other liabilities |
| 20,405 |
| 13,171 | |
| Note payable |
| 75,347 |
| 90,338 | |
|
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|
| 95,752 |
| 103,509 | |
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| Total liabilities |
| 457,527 |
| 519,687 | |
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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 shares |
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| authorized; 20,556,198 and 20,557,913 shares |
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| issued as of March 31, 2011 and December 31, |
| 206 |
| 206 | |
|
| 2010, respectively |
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| Additional paid-in-capital |
| 1,014,017 |
| 951,234 | |
| Deferred compensation trust – 152,964 and |
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| 158,894 shares of NVR, Inc. common |
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| stock as of March 31, 2011 and December |
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| |
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| 31, 2010, respectively |
| (25,582) |
| (27,582) | |
| Deferred compensation liability |
| 25,582 |
| 27,582 | |
| Retained earnings |
| 4,044,246 |
| 4,029,072 | |
| Less treasury stock at cost – 14,688,939 and |
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| 14,894,357 shares at March 31, 2011 |
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| and December 31, 2010, respectively |
| (3,240,268) |
| (3,240,138) | |
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| Total shareholders’ equity |
| 1,818,201 |
| 1,740,374 | |
|
| Total liabilities and shareholders’ equity |
| $ 2,275,728 |
| $ 2,260,061 | |
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NVR, Inc. Operating Activity (unaudited) (dollars in thousands)
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| Three Months Ended March 31, | |
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| 2011 |
| 2010 | |
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Homebuilding data: |
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| New orders (units) |
|
|
| |
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| Mid Atlantic (1) | 1,145 |
| 1,391 | |
|
| North East (2) | 252 |
| 260 | |
|
| Mid East (3) | 691 |
| 879 | |
|
| South East (4) | 315 |
| 410 | |
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| Total | 2,403 |
| 2,940 | |
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| |
| Average new order price | $ 295.8 |
| $ 286.7 | |
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| Settlements (units) |
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|
| |
|
| Mid Atlantic (1) | 836 |
| 935 | |
|
| North East (2) | 128 |
| 220 | |
|
| Mid East (3) | 431 |
| 565 | |
|
| South East (4) | 239 |
| 199 | |
|
| Total | 1,634 |
| 1,919 | |
|
|
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|
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| Average settlement price | $ 307.6 |
| $ 300.8 | |
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| Backlog (units) |
|
|
| |
|
| Mid Atlantic (1) | 1,904 |
| 2,319 | |
|
| North East (2) | 356 |
| 365 | |
|
| Mid East (3) | 990 |
| 1,274 | |
|
| South East (4) | 435 |
| 594 | |
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| Total | 3,685 |
| 4,552 | |
|
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| Average backlog price | $ 316.6 |
| $ 294.8 | |
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| |
| Community count (average) | 379 |
| 358 | |
| Lots controlled at end of period | 52,900 |
| 48,100 | |
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Mortgage banking data: |
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| |
| Loan closings | $ 353,571 |
| $ 418,042 | |
| Capture rate | 87% |
| 90% | |
|
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Common stock information: |
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| |
| Shares outstanding at end of period | 5,867,259 |
| 6,149,335 | |
| Number of shares repurchased | 85,460 |
| - | |
| Aggregate cost of shares repurchased | $ 63,408 |
| $ - | |
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(1) Virginia, West Virginia, Maryland and Delaware (2) Eastern Pennsylvania and New Jersey (3) Western Pennsylvania, Kentucky, New York, Ohio and Indiana (4) North Carolina, South Carolina, Tennessee and Florida | |
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CONTACT: Dan Malzahn, Office: +1-703-956-4204
