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Press release from PR Newswire

NVR, Inc. Announces Third Quarter Results

Thursday, October 18, 2012

NVR, Inc. Announces Third Quarter Results09:00 EDT Thursday, October 18, 2012RESTON, Va., Oct. 18, 2012 /PRNewswire/ -- NVR, Inc. (NYSE: NVR), one of the nation's largest homebuilding and mortgage banking companies, announced net income for its third quarter ended September 30, 2012 of $53,000,000, $10.33 per diluted share.  Net income and diluted earnings per share for its third quarter ended September 30, 2012 increased 22% and 29%, respectively, when compared to the 2011 third quarter.  Consolidated revenues for the third quarter of 2012 totaled $870,637,000, a 23% increase from $707,476,000 for the comparable 2011 quarter.For the nine months ended September 30, 2012, consolidated revenues were $2,240,912,000, 17% higher than the $1,917,861,000 reported for the same period of 2011.  Net income for the nine months ended September 30, 2012 was $119,961,000, an increase of 24% when compared to the nine months ended September 30, 2011.  Diluted earnings per share for the nine months ended September 30, 2012 was $23.22, an increase of 39% from $16.75 per diluted share for the comparable period of 2011. HomebuildingNew orders in the third quarter of 2012 increased 15% to 2,558 units when compared to 2,218 units in the third quarter of 2011.  The cancellation rate in the third quarter of 2012 was 16.6% compared to 15.0% in the third quarter of 2011 and 16.3% in the second quarter of 2012.  Settlements increased in the third quarter of 2012 to 2,656 units, 18% 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 27% to 4,950 units and on a dollar basis by 38% to $1,674,502,000 when compared to the same period last year.Homebuilding revenues for the three months ended September 30, 2012 totaled $854,396,000, 23% higher than the year earlier period.  Gross profit margin in the third quarter of 2012 was 17.8% compared to 17.9% in the third quarter of 2011 and 17.3% in the second quarter of 2012.  Income before tax from the homebuilding segment totaled $74,655,000, an increase of 15% when compared to the third quarter of 2011.Mortgage BankingMortgage closed loan production of $594,867,000 for the three months ended September 30, 2012 was 21% higher than the same period last year.  Operating income for the mortgage banking operations during the third quarter of 2012 increased 123% to $9,478,000, when compared to $4,257,000 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 EndedSeptember 30,Nine Months Ended September 30,2012201120122011Homebuilding:Revenues                                         $ 854,396$ 696,980$ 2,195,881$ 1,882,387Other income5998422,0453,662Cost of sales(702,436)(572,382)(1,819,243)(1,548,903)Selling, general and administrative (76,553)(60,462)(222,483)(195,695)Operating income 76,00664,978156,200141,451Interest expense(1,351)(293)(1,579)(802)Homebuilding income 74,65564,685154,621140,649Mortgage Banking:Mortgage banking fees16,24110,49645,03135,474Interest income1,0251,5893,5053,789Other income161151373311General and administrative(7,789)(7,796)(24,029)(22,371)Interest expense(160)(183)(455)(721)Mortgage banking income9,4784,25724,42516,482Income before taxes 84,13368,942179,046157,131Income tax expense(31,133)(25,533)(59,085)(60,103)Net income$  53,000$   43,409$    119,961$     97,028Basic earnings per share $    10.60$       8.19$        23.76$       17.22Diluted earnings per share $    10.33$      7.98$        23.22$       16.75Basic weighted average shares  outstanding 4,9995,3015,0495,634Diluted weighted average shares outstanding 5,1325,4375,1675,792 NVR, Inc.Consolidated Balance Sheets(in thousands, except share and per share data)September 30, 2012December 31, 2011ASSETS(Unaudited)Homebuilding:Cash and cash equivalents$               1,071,999$                  475,566Receivables9,9736,789Inventory:Lots and housing units, covered undersales agreements with customers551,059363,833Unsold lots and housing units69,45282,578Land under development71,10278,045Manufacturing materials and other 8,5638,694700,176533,150Assets related to consolidated variable interest entity16,21020,182Contract land deposits, net173,404131,930Property, plant and equipment, net27,14023,243Reorganization value in excess of amountsallocable to identifiable assets, net41,58041,580Other assets, net285,417268,8782,325,8991,501,318Mortgage Banking:Cash and cash equivalents5,5444,766Mortgage loans held for sale, net128,452252,352Property and equipment, net2,1731,694Reorganization value in excess of amountsallocable to identifiable assets, net7,3477,347Other assets11,31112,008154,827278,167Total assets$               2,480,726$               1,779,485 NVR, Inc.Consolidated Balance Sheets (Continued)(in thousands, except share and per share data)September 30, 2012December 31, 2011LIABILITIES AND SHAREHOLDERS' EQUITY(Unaudited)Homebuilding:Accounts payable$                  156,614$                  125,649Accrued expenses and other liabilities226,750185,423Liabilities related to consolidated variable interest entity1,3561,013Non-recourse debt related to consolidated variableinterest entity8654,983Customer deposits94,94061,223Senior notes598,967-1,079,492378,291Mortgage Banking:Accounts payable and other liabilities21,92626,39521,92626,395Total liabilities1,101,418404,686Commitments and contingenciesShareholders' equity:Common stock, $0.01 par value; 60,000,000 sharesauthorized; 20,556,198 shares issued as ofboth September 30, 2012 and December 31, 2011206206Additional paid-in-capital1,134,3061,072,779Deferred compensation trust ? 152,223 and152,964 shares of NVR, Inc. commonstock as of September 30, 2012 and December 31, 2011, respectively(25,331)(25,581)Deferred compensation liability25,33125,581Retained earnings4,278,4534,158,492Less treasury stock at cost ? 15,681,381 and15,578,565 shares at September 30, 2012and December 31, 2011, respectively(4,033,657)(3,856,678)Total shareholders' equity1,379,3081,374,799    Total liabilities and shareholders' equity$               2,480,726$               1,779,485 NVR, Inc.Operating Activity(dollars in thousands)(Unaudited)Three Months Ended September 30,Nine Months Ended September 30,2012201120122011Homebuilding data:    New orders (units)        Mid Atlantic (1)1,3551,1394,3393,503        North East (2)217179712639        Mid East (3)5765442,0511,926        South East (4)4103561,2271,021           Total2,5582,2188,3297,089    Average new order price$     334.7$   306.5$     325.2$       301.8    Settlements (units)        Mid Atlantic (1)1,3391,0903,6203,002        North East (2)249191665536        Mid East (3)6826761,7391,719        South East (4)3862981,031839           Total2,6562,2557,0556,096    Average settlement price$    321.7$    308.9$     311.2$       308.6    Backlog (units)        Mid Atlantic (1)2,6922,096        North East (2)423335        Mid East (3)1,119937        South East (4)716541           Total4,9503,909    Average backlog price$     338.3$       311.2    Community count (average)412389401385    Lots controlled at end of period55,50051,900Mortgage banking data:    Loan closings$594,867$489,866$1,563,921$1,347,553    Capture rate86%88%87%89%Common stock information:    Shares outstanding at end of     period4,874,8175,013,861    Number of shares repurchased276,995567,788276,995979,265    Aggregate cost of shares     repurchased$220,128$365,743$   220,128$   666,628(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 Florida SOURCE NVR, Inc.For further information: Dan Malzahn, Office: +1-703-956-4204