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Press release from PR Newswire

NVR, Inc. Announces Fourth Quarter and Full Year Results

Thursday, January 26, 2012

NVR, Inc. Announces Fourth Quarter and Full Year Results08:50 EST Thursday, January 26, 2012RESTON, 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. HomebuildingNew 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 BankingMortgage 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 NVRNVR, 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 31,2011201020112010Homebuilding:Revenues                                         $        728,808$        794,470$     2,611,195$     2,980,758Other income6391,5224,3019,299Cost 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 44,15479,045185,605294,371Interest expense(215)(338)(1,017)(4,903)Homebuilding income 43,93978,707184,588289,468Mortgage Banking:Mortgage banking fees12,48016,53547,95461,134Interest income1,9131,6085,7025,411Other income145202456767General and administrative(7,878)(10,254)(30,249)(33,261)Interest expense(154)(285)(875)(1,126)Mortgage banking income6,5067,80622,98832,925Income before taxes 50,44586,513207,576322,393Income tax expense(18,053)(27,815)(78,156)(116,388)Net income$          32,392$          58,698$        129,420$        206,005Basic earnings per share $              6.51$            10.41$            23.66$            34.96Diluted earnings per share $              6.32$              9.96$            23.01$            33.42Basic average shares outstanding 4,9795,6415,4695,893Diluted average shares outstanding 5,1265,8925,6246,165NVR, Inc.Consolidated Balance Sheets(in thousands, except share and per share data)December 31, 2011December 31, 2010ASSETSHomebuilding:Cash and cash equivalents$                  475,566$               1,190,731Receivables6,7896,948Inventory:Lots and housing units, covered undersales agreements with customers363,833275,272Unsold lots and housing units82,57870,542Land under development78,04578,058Manufacturing materials and other 8,6947,457533,150431,329Assets related to consolidated variable interest entity20,18222,371Contract land deposits, net131,930100,786Property, plant and equipment, net23,24319,523Reorganization value in excess of amountsallocable to identifiable assets, net41,58041,580Other assets, net268,878243,0051,501,3182,056,273Mortgage Banking:Cash and cash equivalents4,7662,661Mortgage loans held for sale, net252,352177,244Property and equipment, net1,694950Reorganization value in excess of amountsallocable to identifiable assets, net7,3477,347Other assets12,00815,586278,167203,788Total assets$               1,779,485$               2,260,061(Continued)NVR, Inc.Consolidated Balance Sheets (Continued)(in thousands, except share and per share data)December 31, 2011December 31, 2010LIABILITIES AND SHAREHOLDERS' EQUITYHomebuilding:Accounts payable$                  125,649$                  115,578Accrued expenses and other liabilities183,810237,052Liabilities related to consolidated variable interest entity1,013500Non-recourse debt related to consolidated variableinterest entity4,9837,592Customer deposits61,22353,705Other term debt1,6131,751378,291416,178Mortgage Banking:Accounts payable and other liabilities26,39513,171Note payable-90,33826,395103,509Total liabilities404,686519,687Commitments and contingenciesShareholders' equity:Common stock, $0.01 par value; 60,000,000 sharesauthorized; 20,556,198 and 20,557,913 shares issued as of December 31, 2011 and December 31, 2010, respectively206206Additional paid-in-capital1,072,779951,234Deferred compensation trust ? 152,964 and158,894 shares of NVR, Inc. commonstock as of December 31, 2011 and December 31, 2010, respectively(25,581)(27,582)Deferred compensation liability25,58127,582Retained earnings4,158,4924,029,072Less treasury stock at cost ? 15,578,565 and14,894,357 shares at December 31, 2011and December 31, 2010, respectively(3,856,678)(3,240,138)Total shareholders? equity1,374,7991,740,374    Total liabilities and shareholders? equity$               1,779,485$               2,260,061NVR, Inc.Operating Activity(dollars in thousands)(unaudited)Three Months Ended December 31,Twelve Months Ended December 31,2011201020112010Homebuilding data:New orders (units)Mid Atlantic (1)1,1138884,6164,775North East (2)233177872827Mid East (3)4864692,4122,656South East (4)3262311,3471,157   Total2,1581,7659,2479,415Average new order price$            311.7$            321.7$            304.1$            304.0Settlements (units)Mid Atlantic (1)1,2361,3874,2385,043North East (2)192196728920Mid East (3)6167742,3352,886South East (4)3472821,1861,181   Total2,3912,6398,48710,030Average settlement price$            304.6$            301.0$            307.5$            297.1Backlog (units)Mid Atlantic (1)1,9731,595North East (2)376232Mid East (3)807730South East (4)520359   Total3,6762,916Average backlog price$            315.8$            328.6Community count (average)381379384371Lots controlled at end of period53,00052,300Mortgage banking data:Loan closings$        520,919$        597,949$     1,868,472$     2,219,946Capture rate88%91%88%90%Common stock information:Shares outstanding at end of period4,977,6335,663,556Number of shares repurchased38,32363,5161,017,588644,562Aggregate 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 FloridaSOURCE NVR, Inc.For further information: Dan Malzahn, +1-703-956-4204