NVR, Inc. Announces First Quarter Results

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Apr 19, 2012, 08:49 ET

RESTON, Va., April 19, 2012 /PRNewswire/ -- NVR, Inc. (NYSE: NVR), one of the nation's largest homebuilding and mortgage banking companies, announced net income for its first quarter ended March 31, 2012 of $20,123,000, $3.90 per diluted share. Net income and diluted earnings per share for its first quarter ended March 31, 2012 increased 33% and 55%, respectively, when compared to the 2011 first quarter. Consolidated revenues for the first quarter of 2012 totaled $600,492,000, a 17% increase from $514,504,000 for the comparable 2011 quarter.

Homebuilding
New orders in the first quarter of 2012 increased 31% to 3,157 units, when compared to 2,403 units in the first quarter of 2011. The cancellation rate in the first quarter of 2012 was 10.3% compared to 12.3% in the first quarter of 2011 and 14.9% in the fourth quarter of 2011. Settlements increased in the first quarter of 2012 to 1,924 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 33% to 4,909 units and on a dollar basis by 34% to $1,563,619,000 when compared to the same period last year.

Homebuilding revenues for the three months ended March 31, 2012 totaled $586,195,000, 17% higher than the year earlier period. Gross profit margins decreased to 16.1% in the 2012 first quarter compared to 16.9% for the same period in 2011. Income before tax from the homebuilding segment totaled $22,982,000, an increase of 22% when compared to the first quarter of 2011.

Mortgage Banking
Mortgage closed loan production of $420,184,000 for the three months ended March 31, 2012 was 19% higher than the same period last year. Operating income for the mortgage banking operations during the first quarter of 2012 increased 34% to $7,976,000, when compared to $5,963,000 reported for the same period of 2011.

About NVR
NVR, 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 variations thereof or 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 March 31,
			2012	2011
*Homebuilding:*
	Revenues		$ 586,195	$ 502,744
	Other income		908	1,458
	Cost of sales		(491,829)	(417,920)
	Selling, general and administrative		(72,176)	(67,188)
		Operating income	23,098	19,094
	Interest expense		(116)	(222)
		Homebuilding income	22,982	18,872

*Mortgage Banking:*
	Mortgage banking fees		14,297	11,760
	Interest income		1,665	1,115
	Other income		76	39
	General and administrative		(7,913)	(6,677)
	Interest expense		(149)	(274)
		Mortgage banking income	7,976	5,963

*Income before taxes*			30,958	24,835

		Income tax expense	(10,835)	(9,661)

*Net income*			$ 20,123	$ 15,174

*Basic earnings per share*			$ 3.99	$ 2.61

*Diluted earnings per share*			$ 3.90	$ 2.52

*Basic weighted average shares outstanding*			5,044	5,823

*Diluted weighted average shares outstanding*			5,159	6,020

NVR, Inc. Consolidated Balance Sheets (in thousands, except share and per share data)

				March 31, 2012	December 31, 2011
ASSETS				(Unaudited)

*Homebuilding:*
	Cash and cash equivalents			$ 567,922	$ 475,566
	Receivables			6,028	6,789
	Inventory:
		Lots and housing units, covered under
			sales agreements with customers	468,434	363,833
		Unsold lots and housing units		88,571	82,578
		Land under development		70,225	78,045
		Manufacturing materials and other		8,516	8,694
				635,746	533,150

	Assets related to consolidated variable interest entity			17,546	20,182
	Contract land deposits, net			140,328	131,930
	Property, plant and equipment, net			24,256	23,243
	Reorganization value in excess of amounts
		allocable to identifiable assets, net		41,580	41,580
	Other assets, net			275,664	268,878
				1,709,070	1,501,318

*Mortgage Banking:*
	Cash and cash equivalents			6,461	4,766
	Mortgage loans held for sale, net			113,723	252,352
	Property and equipment, net			1,710	1,694
	Reorganization value in excess of amounts
		allocable to identifiable assets, net		7,347	7,347
	Other assets			12,601	12,008
				141,842	278,167

			Total assets	$ 1,850,912	$ 1,779,485

NVR, Inc. Consolidated Balance Sheets (Continued) (in thousands, except share and per share data)

			March 31, 2012	December 31, 2011
LIABILITIES AND SHAREHOLDERS' EQUITY			(Unaudited)

*Homebuilding:*
	Accounts payable		$ 137,066	$ 125,649
	Accrued expenses and other liabilities		186,024	185,423
	Liabilities related to consolidated variable interest entity		1,128	1,013
	Non-recourse debt related to consolidated variable
		interest entity	2,348	4,983
	Customer deposits		79,374	61,223
			405,940	378,291

*Mortgage Banking:*
	Accounts payable and other liabilities		26,731	26,395
			26,731	26,395

		Total liabilities	432,671	404,686

*Commitments and contingencies*

*Shareholders' equity:*
	Common stock, $0.01 par value; 60,000,000 shares
		authorized; 20,556,198 shares issued as of
		both March 31, 2012 and December 31, 2011	206	206
	Additional paid-in-capital		1,074,215	1,072,779
	Deferred compensation trust – 152,223 and
		152,964 shares of NVR, Inc. common
		stock as of March 31, 2012 and
		December 31, 2011, respectively	(25,331)	(25,581)
	Deferred compensation liability		25,331	25,581
	Retained earnings		4,178,615	4,158,492
	Less treasury stock at cost – 15,490,168 and
		15,578,565 shares at March 31, 2012
		and December 31, 2011, respectively	(3,834,795)	(3,856,678)
		Total shareholders' equity	1,418,241	1,374,799
		Total liabilities and shareholders' equity	$ 1,850,912	$ 1,779,485

NVR, Inc. Operating Activity (dollars in thousands) (Unaudited)

				Three Months Ended March 31,
				2012	2011

	*Homebuilding data:*
		New orders (units)
			Mid Atlantic (1)	1,663	1,145
			North East (2)	259	252
			Mid East (3)	798	691
			South East (4)	437	315
			Total	3,157	2,403

		Average new order price		$ 313.2	$ 295.8

		Settlements (units)
			Mid Atlantic (1)	1,006	836
			North East (2)	169	128
			Mid East (3)	448	431
			South East (4)	301	239
			Total	1,924	1,634

		Average settlement price		$ 304.6	$ 307.6

		Backlog (units)
			Mid Atlantic (1)	2,630	1,904
			North East (2)	466	356
			Mid East (3)	1,157	990
			South East (4)	656	435
			Total	4,909	3,685

		Average backlog price		$ 318.5	$ 316.6

		Community count (average)		387	379
		Lots controlled at end of period		53,000	52,900

	*Mortgage banking data:*
		Loan closings		$ 420,184	$ 353,571
		Capture rate		89%	87%

	*Common stock information:*
		Shares outstanding at end of period		5,066,030	5,867,259
		Number of shares repurchased		-	85,460
		Aggregate cost of shares repurchased		$ -	$ 63,408

(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 Florida