EX-99.1
NVR, Inc. Announces First Quarter Results
RESTON, Va. April 20 /PRNewswire-FirstCall/ -- NVR, Inc. (Amex: NVR), one
of the nation's largest homebuilding and mortgage banking companies, announced
that diluted earnings per share for its first quarter ended March 31, 2007
decreased 33% and net income decreased 36% when compared to the 2006 first
quarter. Net income for the 2007 first quarter was $84,821,000, $12.96 per
diluted share, compared to net income of $132,560,000, $19.48 per diluted share,
for the same period of 2006. Consolidated revenues for the first three months of
2007 totaled $1,093,189,000, a 9% decrease from $1,204,655,000 for the
comparable 2006 quarter.
Homebuilding
New orders in the first quarter of 2007 increased 8% to 3,917 units, when
compared to 3,633 units in the first quarter of 2006. New orders in the Mid
Atlantic and Mid East regions increased 18% and 11%, respectively, when compared
to the first quarter of 2006. The Mid Atlantic region experienced an improvement
in market conditions at the start of the quarter, however, market conditions
slowed noticeably as the quarter progressed. The cancellation rate in the first
quarter of 2007 was 16% compared to 17% in the first quarter of 2006 and 20% in
the fourth quarter of 2006. The Washington DC cancellation rate in the quarter
was 22% compared to 26% in the first quarter of 2006 and 34% in the fourth
quarter of 2006.
Settlements decreased in the first quarter of 2007 to 2,700 units, 10%
less than the same period of 2006. Homebuilding revenues for the three months
ended March 31, 2007 totaled $1,075,110,000, 9% lower than the year earlier
period. Income before tax from the homebuilding segment totaled $127,937,000, a
decrease of 38% when compared to the first quarter of the previous year. Gross
profit margins decreased to 20.6% in the 2007 first quarter compared to 27.3%
for the same period in 2006. The decline in gross profit margins was due to
continued pricing pressure in many of our markets. Land deposit impairments of
approximately $12,000,000 negatively impacted gross profit margins by 114 basis
points in the current quarter. The Company's backlog of homes sold but not
settled at the end of the 2007 quarter decreased on a unit basis by 15% to 7,605
units from the same period last year. On a dollar basis, backlog dropped to
$3,018,921,000, a decline of 23% when compared to the same period last year.
Mortgage Banking
Mortgage closed loan production of $715,039,000 for the three months ended
March 31, 2007 was 3% lower than the same period last year. Sub-prime loans
accounted for approximately 7% of our mortgage closed loan volume in the current
quarter compared to 6% for the first quarter of 2006. Operating income for the
mortgage banking operations during the first quarter of 2007 decreased 19% to
$10,095,000, when compared to $12,481,000 reported for the same period of 2006.
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, 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, 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 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
March 31,
2007 2006
Homebuilding:
Revenues $ 1,075,110 $ 1,183,742
Other income 6,965 2,376
Cost of sales (853,410) (861,039)
Selling, general and administrative (97,406) (114,006)
Operating income 131,259 211,073
Interest expense (3,322) (5,527)
Homebuilding income 127,937 205,546
Mortgage Banking:
Mortgage banking fees 18,079 20,913
Interest income 1,307 1,459
Other income 184 231
General and administrative (9,323) (9,168)
Interest expense (152) (954)
Mortgage banking income 10,095 12,481
Income before taxes 138,032 218,027
Income tax expense (53,211) (85,467)
Net income $ 84,821 $ 132,560
Basic earnings per share $ 14.98 $ 23.69
Diluted earnings per share $ 12.96 $ 19.48
Basic average shares outstanding 5,663 5,596
Diluted average shares outstanding 6,545 6,805
NVR, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share data)
March 31, December 31,
2007 2006
(unaudited)
ASSETS
Homebuilding:
Cash and cash equivalents $ 555,317 $ 551,738
Receivables 12,179 12,213
Inventory:
Lots and housing units, covered
under sales agreements with customers 741,543 667,100
Unsold lots and housing units 53,712 58,248
Manufacturing materials and other 7,105 8,268
802,360 733,616
Contract land deposits, net 387,490 402,170
Assets not owned, consolidated
per FIN 46R 279,736 276,419
Property, plant and equipment, net 37,526 40,430
Reorganization value in excess of amounts
allocable to identifiable assets, net 41,580 41,580
Goodwill and other indefinite and definite
life intangibles, net 11,905 11,936
Other assets 222,270 207,468
2,350,363 2,277,570
Mortgage Banking:
Cash and cash equivalents 1,925 4,381
Mortgage loans held for sale, net 101,548 178,444
Property and equipment, net 1,083 1,168
Reorganization value in excess of amounts
allocable to identifiable assets, net 7,347 7,347
Other assets 5,681 4,898
117,584 196,238
Total assets $2,467,947 $2,473,808
NVR, Inc.
Consolidated Balance Sheets (Continued)
(in thousands, except share and per share data)
March 31, December 31,
2007 2006
(unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
Homebuilding:
Accounts payable $ 235,180 $ 273,936
Accrued expenses and other liabilities 239,548 265,223
Liabilities related to assets not owned,
consolidated per FIN 46R 252,509 244,805
Customer deposits 190,721 165,354
Other term debt 3,018 3,080
Senior notes 200,000 200,000
1,120,976 1,152,398
Mortgage Banking:
Accounts payable and other liabilities 12,781 15,784
Notes payable 79,062 153,552
91,843 169,336
Total liabilities 1,212,819 1,321,734
Commitments and contingencies
Shareholders' equity:
Common stock, $0.01 par value; 60,000,000
shares authorized; 20,592,640 shares issued
for both March 31, 2007 and December 31, 2006 206 206
Additional paid-in capital 640,443 585,438
Deferred compensation trust - 516,217 and
547,911 shares of NVR, Inc. common stock for
March 31, 2007 and December 31, 2006,
respectively (75,656) (80,491)
Deferred compensation liability 75,656 80,491
Retained earnings 3,280,861 3,196,040
Less treasury stock at cost - 14,920,656 and
15,075,113 shares for March 31, 2007 and
December 31, 2006, respectively (2,666,382) (2,629,610)
Total shareholders' equity 1,255,128 1,152,074
Total liabilities and shareholders'
equity $ 2,467,947 $ 2,473,808
NVR, Inc.
Operating Activity
(unaudited)
(dollars in thousands)
Three Months Ended
March 31,
2007 2006
Homebuilding data:
New orders (units)
Mid Atlantic (1) 1,921 1,634
North East (2) 417 451
Mid East (3) 1,030 928
South East (4) 549 620
Total 3,917 3,633
Average new order price $ 372.3 $ 387.6
Settlements (units)
Mid Atlantic (1) 1,352 1,575
North East (2) 249 302
Mid East (3) 572 612
South East (4) 527 497
Total 2,700 2,986
Average settlement price $ 397.6 $ 395.9
Backlog (units)
Mid Atlantic (1) 4,234 5,033
North East (2) 708 933
Mid East (3) 1,732 1,917
South East (4) 931 1,074
Total 7,605 8,957
Average backlog price $ 397.0 $ 435.6
Community count (average) 527 578
Lots controlled at end of period 86,000 105,000
Mortgage banking data:
Loan closings $ 715,039 $ 736,782
Capture rate 86% 83%
Common stock information:
Shares outstanding at end of period 5,671,984 5,681,189
Weighted average basic shares outstanding 5,663,000 5,596,000
Weighted average diluted shares outstanding 6,545,000 6,805,000
Number of shares repurchased 126,000 161,856
Aggregate cost of shares repurchased $ 86,351 $ 120,817
(1) Virginia, West Virginia, Maryland, and Delaware
(2) New Jersey and eastern Pennsylvania
(3) Kentucky, Michigan, New York, Ohio and western Pennsylvania
(4) North Carolina, South Carolina and Tennessee
SOURCE NVR, Inc.
- -0- 04/20/2007
/CONTACT: Dan Malzahn, +1-703-956-4204, for NVR, Inc. /
/Web site: http://www.nvrinc.com /
(NVR)