RESTON, 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.
Homebuilding
New 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 Banking
Mortgage 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 NVR
NVR, 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 Twelve Months Ended December 31, December 31, ------------------- -------------------- 2011 2010 2011 2010 ---- ---- ---- ---- Homebuilding: Revenues $728,808 $794,470 $2,611,195 $2,980,758 Other income 639 1,522 4,301 9,299 Cost 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 44,154 79,045 185,605 294,371 Interest expense (215) (338) (1,017) (4,903) ---- ---- ------ ------ Homebuilding income 43,939 78,707 184,588 289,468 Mortgage Banking: Mortgage banking fees 12,480 16,535 47,954 61,134 Interest income 1,913 1,608 5,702 5,411 Other income 145 202 456 767 General and administrative (7,878) (10,254) (30,249) (33,261) Interest expense (154) (285) (875) (1,126) ---- ---- ---- ------ Mortgage banking income 6,506 7,806 22,988 32,925 ----- ----- ------ ------ Income before taxes 50,445 86,513 207,576 322,393 Income tax expense (18,053) (27,815) (78,156) (116,388) ------- ------- ------- -------- Net income $32,392 $58,698 $129,420 $206,005 ======= ======= ======== ======== Basic earnings per share $6.51 $10.41 $23.66 $34.96 ===== ====== ====== ====== Diluted earnings per share $6.32 $9.96 $23.01 $33.42 ===== ===== ====== ====== Basic average shares outstanding 4,979 5,641 5,469 5,893 ===== ===== ===== ===== Diluted average shares outstanding 5,126 5,892 5,624 6,165 ===== ===== ===== =====
NVR, Inc. Consolidated Balance Sheets (in thousands, except share and per share data) December 31, December 31, 2011 2010 ------------- ------------- ASSETS Homebuilding: Cash and cash equivalents $475,566 $1,190,731 Receivables 6,789 6,948 Inventory: Lots and housing units, covered under sales agreements with customers 363,833 275,272 Unsold lots and housing units 82,578 70,542 Land under development 78,045 78,058 Manufacturing materials and other 8,694 7,457 ----- ----- 533,150 431,329 Assets related to consolidated variable interest entity 20,182 22,371 Contract land deposits, net 131,930 100,786 Property, plant and equipment, net 23,243 19,523 Reorganization value in excess of amounts allocable to identifiable assets, net 41,580 41,580 Other assets, net 268,878 243,005 ------- ------- 1,501,318 2,056,273 --------- --------- Mortgage Banking: Cash and cash equivalents 4,766 2,661 Mortgage loans held for sale, net 252,352 177,244 Property and equipment, net 1,694 950 Reorganization value in excess of amounts allocable to identifiable assets, net 7,347 7,347 Other assets 12,008 15,586 ------ ------ 278,167 203,788 ------- ------- Total assets $1,779,485 $2,260,061 ========== ==========
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NVR, Inc. Consolidated Balance Sheets (Continued) (in thousands, except share and per share data) December 31, December 31, 2011 2010 ------------- ------------- LIABILITIES AND SHAREHOLDERS' EQUITY Homebuilding: Accounts payable $125,649 $115,578 Accrued expenses and other liabilities 183,810 237,052 Liabilities related to consolidated variable interest entity 1,013 500 Non-recourse debt related to consolidated variable interest entity 4,983 7,592 Customer deposits 61,223 53,705 Other term debt 1,613 1,751 ----- ----- 378,291 416,178 ------- ------- Mortgage Banking: Accounts payable and other liabilities 26,395 13,171 Note payable - 90,338 --- ------ 26,395 103,509 ------ ------- Total liabilities 404,686 519,687 ------- ------- Commitments and contingencies Shareholders' equity: Common stock, $0.01 par value; 60,000,000 shares authorized; 20,556,198 and 20,557,913 shares issued as of December 31, 2011 and December 31, 2010, respectively 206 206 Additional paid-in-capital 1,072,779 951,234 Deferred compensation trust - 152,964 and 158,894 shares of NVR, Inc. common stock as of December 31, 2011 and December 31, 2010, respectively (25,581) (27,582) Deferred compensation liability 25,581 27,582 Retained earnings 4,158,492 4,029,072 Less treasury stock at cost - 15,578,565 and 14,894,357 shares at December 31, 2011 and December 31, 2010, respectively (3,856,678) (3,240,138) ---------- ---------- Total shareholders' equity 1,374,799 1,740,374 --------- --------- Total liabilities and shareholders' equity $1,779,485 $2,260,061 ========== ==========
NVR, Inc. Operating Activity (dollars in thousands) (unaudited) Three Months Ended December Twelve Months Ended 31, December 31, ---------------------------- -------------------- 2011 2010 2011 2010 ---- ---- ---- ---- Homebuilding data: New orders (units) Mid Atlantic (1) 1,113 888 4,616 4,775 North East (2) 233 177 872 827 Mid East (3) 486 469 2,412 2,656 South East (4) 326 231 1,347 1,157 Total 2,158 1,765 9,247 9,415 ===== ===== ===== ===== Average new order price $311.7 $321.7 $304.1 $304.0 Settlements (units) Mid Atlantic (1) 1,236 1,387 4,238 5,043 North East (2) 192 196 728 920 Mid East (3) 616 774 2,335 2,886 South East (4) 347 282 1,186 1,181 Total 2,391 2,639 8,487 10,030 ===== ===== ===== ====== Average settlement price $304.6 $301.0 $307.5 $297.1 Backlog (units) Mid Atlantic (1) 1,973 1,595 North East (2) 376 232 Mid East (3) 807 730 South East (4) 520 359 Total 3,676 2,916 ===== ===== Average backlog price $315.8 $328.6 Community count (average) 381 379 384 371 Lots controlled at end of period 53,000 52,300 Mortgage banking data: Loan closings $520,919 $597,949 $1,868,472 $2,219,946 Capture rate 88% 91% 88% 90% Common stock information: Shares outstanding at end of period 4,977,633 5,663,556 Number of shares repurchased 38,323 63,516 1,017,588 644,562 Aggregate 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 Florida
SOURCE NVR, Inc.