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Press release from PR Newswire

NVR, Inc. Announces Second Quarter Results

Thursday, July 19, 2012

NVR, Inc. Announces Second Quarter Results09:00 EDT Thursday, July 19, 2012RESTON, Va., July 19, 2012 /PRNewswire/ -- 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, 2012 of $46,838,000, $8.97 per diluted share.  Net income and diluted earnings per share for its second quarter ended June 30, 2012 increased 22% and 38%, respectively, when compared to the 2011 second quarter.  Consolidated revenues for the second quarter of 2012 totaled $769,783,000, an 11% increase from $695,881,000 for the comparable 2011 quarter.  The second quarter 2012 net income reflects a reduction of $6,989,000 of income tax expense due to an adjustment to the Company's provision for unrecognized tax benefits.For the six months ended June 30, 2012, consolidated revenues were $1,370,275,000, 13% higher than the $1,210,385,000 reported for the same period of 2011.  Net income for the six months ended June 30, 2012 was $66,961,000, an increase of 25% when compared to the six months ended June 30, 2011.  Diluted earnings per share for the six months ended June 30, 2012 was $12.90, an increase of 44% from $8.98 per diluted share for the comparable period of 2011. HomebuildingNew orders in the second quarter of 2012 increased 6% to 2,614 units when compared to 2,468 units in the second quarter of 2011.  The cancellation rate in the second quarter of 2012 was 16.3% compared to 12.5% in the second quarter of 2011 and 10.3% in the first quarter of 2012.  Settlements increased in the second quarter of 2012 to 2,475 units, 12% higher than the same period in 2011.  The Company's backlog of homes sold but not settled at the end of the 2012 quarter increased on a unit basis by 28% to 5,048 units and on a dollar basis by 36% to $1,672,622,000 when compared to the same period last year.Homebuilding revenues for the three months ended June 30, 2012 totaled $755,290,000, 11% higher than the year earlier period.  Gross profit margin in the second quarter of 2012 was 17.3% compared to 18.2% in the second quarter of 2011 and 16.1% in the first quarter of 2012.  Income before tax from the homebuilding segment totaled $56,984,000, which remained flat when compared to the second quarter of 2011.Mortgage BankingMortgage closed loan production of $548,871,000 for the three months ended June 30, 2012 was 9% higher than the same period last year.  Operating income for the mortgage banking operations during the second quarter of 2012 increased 11% to $6,971,000, when compared to $6,262,000 reported for the same period of 2011.About NVRNVR, Inc. operates in two business segments:  homebuilding and mortgage banking.  The homebuilding unit sells and builds homes under the Ryan Homes, NVHomes 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, and www.foxridgehomes.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, as amended.  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 comparable terminology.  All statements other than of historical facts are forward-looking statements.  Forward-looking statements contained in this document include those regarding market trends, NVR's financial position, business strategy, the outcome of pending litigation, investigations or similar contingencies, projected plans and objectives of management for future operations.  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 the following: general economic and business conditions (on both a national and regional level); interest rate changes; access to suitable financing by NVR and NVR's customers; increased regulation in the mortgage banking industry; the ability of our mortgage banking subsidiary to sell loans it originates into the secondary market; 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 moratoriums; governmental regulation; fluctuation and volatility of stock and other financial markets; mortgage financing availability; and other factors over which NVR has little or no control.  NVR undertakes no obligation to update such forward-looking statements except as required by law.  NVR, Inc.Consolidated Statements of Income(in thousands, except per share data)(Unaudited)Three Months Ended June 30,Six Months Ended June 30,2012201120122011Homebuilding:Revenues                                         $    755,290$     682,663$     1,341,485$   1,185,407Other income5381,3621,4462,820Cost of sales(624,978)(558,601)(1,116,807)(976,521)Selling, general and administrative (73,754)(68,045)(145,930)(135,233)Operating income 57,09657,37980,19476,473Interest expense(112)(287)(228)(509)Homebuilding income 56,98457,09279,96675,964Mortgage Banking:Mortgage banking fees14,49313,21828,79024,978Interest income8151,0852,4802,200Other income136121212160General and administrative(8,327)(7,898)(16,240)(14,575)Interest expense(146)(264)(295)(538)Mortgage banking income6,9716,26214,94712,225Income before taxes 63,95563,35494,91388,189Income tax expense(17,117)(24,909)(27,952)(34,570)Net income$      46,838$       38,445$          66,961$        53,619Basic earnings per share $          9.17$           6.65$            13.19$            9.24Diluted earnings per share $          8.97$           6.48$            12.90$            8.98Basic weighted average shares outstanding 5,1065,7855,0755,804Diluted weighted average shares outstanding 5,2215,9295,1915,974 NVR, Inc.Consolidated Balance Sheets(in thousands, except share and per share data)June 30, 2012December 31, 2011ASSETS(Unaudited)Homebuilding:Cash and cash equivalents$                  587,646$                  475,566Receivables9,6126,789Inventory:Lots and housing units, covered undersales agreements with customers530,577363,833Unsold lots and housing units89,71282,578Land under development70,99378,045Manufacturing materials and other 9,8818,694701,163533,150Assets related to consolidated variable interest entity16,64820,182Contract land deposits, net155,860131,930Property, plant and equipment, net25,11423,243Reorganization value in excess of amountsallocable to identifiable assets, net41,58041,580Other assets, net275,630268,8781,813,2531,501,318Mortgage Banking:Cash and cash equivalents5,0064,766Mortgage loans held for sale, net150,378252,352Property and equipment, net1,9471,694Reorganization value in excess of amountsallocable to identifiable assets, net7,3477,347Other assets13,02912,008177,707278,167Total assets$               1,990,960$               1,779,485 NVR, Inc.Consolidated Balance Sheets (Continued)(in thousands, except share and per share data)June 30, 2012December 31, 2011LIABILITIES AND SHAREHOLDERS' EQUITY(Unaudited)Homebuilding:Accounts payable$                  158,358$                  125,649Accrued expenses and other liabilities190,377185,423Liabilities related to consolidated variable interest entity1,7431,013Non-recourse debt related to consolidated variableinterest entity1,0504,983Customer deposits90,25561,223441,783378,291Mortgage Banking:Accounts payable and other liabilities27,35326,39527,35326,395Total liabilities469,136404,686Commitments and contingenciesShareholders' equity:Common stock, $0.01 par value; 60,000,000 sharesauthorized; 20,556,198 shares issued as ofboth June 30, 2012 and December 31, 2011206206Additional paid-in-capital1,113,1181,072,779Deferred compensation trust ? 152,223 and152,964 shares of NVR, Inc. commonstock as of June 30, 2012 and December 31, 2011, respectively(25,331)(25,581)Deferred compensation liability25,33125,581Retained earnings4,225,4534,158,492Less treasury stock at cost ? 15,418,099 and15,578,565 shares at June 30, 2012and December 31, 2011, respectively(3,816,953)(3,856,678)Total shareholders' equity1,521,8241,374,799    Total liabilities and shareholders' equity$               1,990,960$               1,779,485 NVR, Inc.Operating Activity(dollars in thousands)(Unaudited)Three Months Ended June 30,Six Months Ended June 30,2012201120122011Homebuilding data:New orders (units)Mid Atlantic (1)1,3211,2192,9842,364North East (2)236208495460Mid East (3)6776911,4751,382South East (4)380350817665   Total2,6142,4685,7714,871Average new order price$            330.5$            303.5$            321.1$            299.7Settlements (units)Mid Atlantic (1)1,2751,0762,2811,912North East (2)247217416345Mid East (3)6096121,0571,043South East (4)344302645541   Total2,4752,2074,3993,841Average settlement price$            305.1$            309.2$            304.9$            308.5Backlog (units)Mid Atlantic (1)2,6762,047North East (2)455347Mid East (3)1,2251,069South East (4)692483   Total5,0483,946Average backlog price$            331.3$            312.5Community count (average)403386395383Lots controlled at end of period55,00054,000Mortgage banking data:Loan closings$        548,871$        504,116$        969,055$        857,687Capture rate88%90%88%89%Common stock information:Shares outstanding at end of period5,138,0995,578,993Number of shares repurchased-326,017-411,477Aggregate cost of shares repurchased$                    -$        237,477$                    -$        300,885(1) Virginia, West Virginia, Maryland, Delaware and Washington, D.C.(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, Office, +1-703-956-4204