NVR, Inc. Announces Third Quarter Results
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RESTON, Va., Oct. 21 /PRNewswire-FirstCall/ -- 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, 2009 of $72,127,000, $11.59 per diluted share. Net income and diluted earnings per share for its third quarter ended September 30, 2009 increased 97% and 89%, respectively, compared to the 2008 third quarter. Consolidated revenues for the third quarter of 2009 totaled $814,016,000, a 13% decrease from $939,211,000 for the comparable 2008 quarter.
For the nine months ended September 30, 2009, consolidated revenues were $1,998,046,000, 28% lower than the $2,782,865,000 reported for the same period of 2008. Net income for the nine months ended September 30, 2009 was $131,541,000, compared to $131,349,000 for the nine months ended September 30, 2008. Diluted earnings per share for the nine months ended September 30, 2009 was $21.57, a decrease of 3% from $22.21 per diluted share for the comparable period of 2008.
Homebuilding
New orders in the third quarter of 2009 increased 13% to 2,255 units, compared to 2,002 units in the third quarter of 2008. The cancellation rate in the quarter ended September 30, 2009 was 14% compared to 24% in the third quarter of 2008 and 14% in the second quarter of 2009. Settlements decreased in the third quarter of 2009 to 2,671 units, 3% less than the same period of 2008. The Company's backlog of homes sold but not settled at the end of the 2009 quarter decreased on a unit basis by 11% to 4,081 units and on a dollar basis by 19% to $1,210,447,000 as compared to the same period last year.
Homebuilding revenues for the three months ended September 30, 2009 totaled $792,510,000, 15% lower than the year earlier period. Gross profit margins increased to 19.7% in the 2009 third quarter compared to 13.2% for the same period in 2008. The third quarter 2008 gross profit margin results were negatively impacted by a $42,839,000 land deposit impairment charge. Income before tax from homebuilding operations totaled $98,626,000 in the 2009 third quarter, an increase of 74% compared to the third quarter of the previous year.
Mortgage Banking
Mortgage closed loan production of $603,317,000 for the three months ended September 30, 2009 was 1% lower than the same period last year. Operating income for the mortgage banking operations during the third quarter of 2009 increased to $14,814,000, compared to $4,072,000 reported for the same period of 2008. Operating income in the current quarter was favorably impacted by an increase in unrealized income from the fair value measurement of locked loan commitments, forward mortgage-backed securities sales and closed loans held for sale, and by a decrease in incentives given to borrowers.
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, 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)
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------------------------
2009 2008 2009 2008
---- ---- ---- ----
Homebuilding:
Revenues $792,510 $928,265 $1,953,327 $2,739,167
Other income 2,222 4,256 6,511 14,356
Cost of sales (636,642) (805,931) (1,593,512) (2,305,231)
Selling, general and
administrative (56,662) (66,796) (171,020) (240,833)
------- ------- -------- --------
Operating income 101,428 59,794 195,306 207,459
Interest expense (2,802) (3,259) (8,038) (9,730)
------ ------ ------ ------
Homebuilding income 98,626 56,535 187,268 197,729
------ ------ ------- -------
Mortgage Banking:
Mortgage banking fees 21,506 10,946 44,719 43,698
Interest income 887 929 2,082 2,608
Other income 215 188 458 531
General and
administrative (7,486) (7,761) (19,719) (23,823)
Interest expense (308) (230) (921) (544)
---- ---- ---- ----
Mortgage banking
income 14,814 4,072 26,619 22,470
------ ----- ------ ------
Income before taxes 113,440 60,607 213,887 220,199
Income tax expense (41,313) (24,056) (82,346) (88,850)
------- ------- ------- -------
Net income $72,127 $36,551 $131,541 $131,349
======= ======= ======== ========
Basic earnings per
share $12.29 $6.72 $22.83 $24.60
====== ===== ====== ======
Diluted earnings per
share $11.59 $6.12 $21.57 $22.21
====== ===== ====== ======
Basic average shares
outstanding 5,866 5,438 5,762 5,340
===== ===== ===== =====
Diluted average
shares outstanding 6,223 5,968 6,098 5,915
===== ===== ===== =====
NVR, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share data)
September 30, December 31,
2009 2008
------------- -------------
(unaudited)
ASSETS
Homebuilding:
Cash and cash equivalents $1,114,581 $1,146,426
Marketable securities 259,406 -
Receivables 9,015 11,594
Inventory:
Lots and housing units,
covered under sales agreements
with customers 415,104 335,238
Unsold lots and housing units 59,370 57,639
Manufacturing materials and other 4,365 7,693
----- -----
478,839 400,570
Contract land deposits, net 32,326 29,073
Consolidated assets not owned 57,461 114,930
Property, plant and equipment, net 20,624 25,658
Reorganization value in excess of
Amounts allocable to identifiable
assets, net 41,580 41,580
Other assets, net 231,968 242,626
------- -------
2,245,800 2,012,457
--------- ---------
Mortgage Banking:
Cash and cash equivalents 1,090 1,217
Mortgage loans held for sale, net 110,095 72,488
Property and equipment, net 544 759
Reorganization value in excess of
Amounts allocable to identifiable
assets, net 7,347 7,347
Other assets 9,904 8,968
----- -----
128,980 90,779
------- ------
Total assets $2,374,780 $2,103,236
========== ==========
NVR, Inc.
Consolidated Balance Sheets (Continued)
(in thousands, except share and per share data)
September 30, December 31,
2009 2008
------------- ------------
(unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
Homebuilding:
Accounts payable $150,304 $137,285
Accrued expenses and
other liabilities 198,106 194,869
Liabilities related to
consolidated assets not
owned 52,896 109,439
Customer deposits 66,819 59,623
Other term debt 2,294 2,530
Senior notes 133,370 163,320
------- -------
603,789 667,066
------- -------
Mortgage Banking:
Accounts payable and
other liabilities 23,797 17,842
Notes payable 75,607 44,539
------ ------
99,404 62,381
------ ------
Total liabilities 703,193 729,447
------- -------
Commitments and contingencies
Shareholders' equity:
Common stock, $0.01 par
value; 60,000,000
shares authorized;
20,559,671 and
20,561,187
shares issued for
September 30, 2009 and
December 31, 2008,
respectively 206 206
Additional paid-in
capital 810,132 722,265
Deferred compensation
trust - 265,278 and
514,470 shares of NVR,
Inc. common stock for
September 30, 2009 and
December 31, 2008,
respectively (40,799) (74,978)
Deferred compensation
liability 40,799 74,978
Retained earnings 3,762,428 3,630,887
Less treasury stock at
cost - 14,632,950 and
15,028,335 shares for
September 30, 2009 and
December 31, 2008,
respectively (2,901,179) (2,979,569)
---------- ----------
Total shareholders'
equity 1,671,587 1,373,789
--------- ---------
Total liabilities and
shareholders' equity $2,374,780 $2,103,236
========== ==========
NVR, Inc.
Operating Activity
(unaudited)
(dollars in thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------------------------------
2009 2008 2009 2008
---- ---- ---- ----
Homebuilding data:
New orders (units):
Mid Atlantic (1) 1,199 965 3,823 3,598
North East (2) 222 205 703 725
Mid East (3) 560 577 2,007 2,020
South East (4) 274 255 876 1,060
--- --- --- -----
Total 2,255 2,002 7,409 7,403
===== ===== ===== =====
Average new order price $297.1 $302.9 $291.3 $314.1
Settlements (units):
Mid Atlantic (1) 1,388 1,266 3,373 3,851
North East (2) 260 264 641 813
Mid East (3) 722 756 1,668 2,012
South East (4) 301 464 810 1,289
--- --- --- -----
Total 2,671 2,750 6,492 7,965
===== ===== ===== =====
Average settlement price $296.3 $337.1 $300.4 $343.5
Backlog (units):
Mid Atlantic (1) 2,226 2,473
North East (2) 365 417
Mid East (3) 1,070 1,121
South East (4) 420 572
--- ---
Total 4,081 4,583
===== =====
Average backlog price $296.6 $327.3
Community count (average) 354 426 356 437
Lots controlled at end of
period 43,700 58,300
Mortgage banking data:
Loan closings $603,317 $610,313 $1,518,229 $1,727,718
Capture rate 91% 86% 91% 84%
Common stock information:
Shares outstanding at end
of period 5,926,721 5,452,247
(1) Virginia, West Virginia, Maryland and Delaware
(2) Eastern Pennsylvania and New Jersey
(3) Western Pennsylvania, Kentucky, New York and Ohio
(4) North Carolina, South Carolina, Florida and Tennessee
SOURCE NVR, Inc.
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