EX-99.1 2 v072149_ex99-1.txt EX-99.1 NVR, Inc. Announces First Quarter Results RESTON, Va. April 20 /PRNewswire-FirstCall/ -- NVR, Inc. (Amex: NVR), one of the nation's largest homebuilding and mortgage banking companies, announced that diluted earnings per share for its first quarter ended March 31, 2007 decreased 33% and net income decreased 36% when compared to the 2006 first quarter. Net income for the 2007 first quarter was $84,821,000, $12.96 per diluted share, compared to net income of $132,560,000, $19.48 per diluted share, for the same period of 2006. Consolidated revenues for the first three months of 2007 totaled $1,093,189,000, a 9% decrease from $1,204,655,000 for the comparable 2006 quarter. Homebuilding New orders in the first quarter of 2007 increased 8% to 3,917 units, when compared to 3,633 units in the first quarter of 2006. New orders in the Mid Atlantic and Mid East regions increased 18% and 11%, respectively, when compared to the first quarter of 2006. The Mid Atlantic region experienced an improvement in market conditions at the start of the quarter, however, market conditions slowed noticeably as the quarter progressed. The cancellation rate in the first quarter of 2007 was 16% compared to 17% in the first quarter of 2006 and 20% in the fourth quarter of 2006. The Washington DC cancellation rate in the quarter was 22% compared to 26% in the first quarter of 2006 and 34% in the fourth quarter of 2006. Settlements decreased in the first quarter of 2007 to 2,700 units, 10% less than the same period of 2006. Homebuilding revenues for the three months ended March 31, 2007 totaled $1,075,110,000, 9% lower than the year earlier period. Income before tax from the homebuilding segment totaled $127,937,000, a decrease of 38% when compared to the first quarter of the previous year. Gross profit margins decreased to 20.6% in the 2007 first quarter compared to 27.3% for the same period in 2006. The decline in gross profit margins was due to continued pricing pressure in many of our markets. Land deposit impairments of approximately $12,000,000 negatively impacted gross profit margins by 114 basis points in the current quarter. The Company's backlog of homes sold but not settled at the end of the 2007 quarter decreased on a unit basis by 15% to 7,605 units from the same period last year. On a dollar basis, backlog dropped to $3,018,921,000, a decline of 23% when compared to the same period last year. Mortgage Banking Mortgage closed loan production of $715,039,000 for the three months ended March 31, 2007 was 3% lower than the same period last year. Sub-prime loans accounted for approximately 7% of our mortgage closed loan volume in the current quarter compared to 6% for the first quarter of 2006. Operating income for the mortgage banking operations during the first quarter of 2007 decreased 19% to $10,095,000, when compared to $12,481,000 reported for the same period of 2006. 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, 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, 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 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 March 31, 2007 2006 Homebuilding: Revenues $ 1,075,110 $ 1,183,742 Other income 6,965 2,376 Cost of sales (853,410) (861,039) Selling, general and administrative (97,406) (114,006) Operating income 131,259 211,073 Interest expense (3,322) (5,527) Homebuilding income 127,937 205,546 Mortgage Banking: Mortgage banking fees 18,079 20,913 Interest income 1,307 1,459 Other income 184 231 General and administrative (9,323) (9,168) Interest expense (152) (954) Mortgage banking income 10,095 12,481 Income before taxes 138,032 218,027 Income tax expense (53,211) (85,467) Net income $ 84,821 $ 132,560 Basic earnings per share $ 14.98 $ 23.69 Diluted earnings per share $ 12.96 $ 19.48 Basic average shares outstanding 5,663 5,596 Diluted average shares outstanding 6,545 6,805 NVR, Inc. Consolidated Balance Sheets (in thousands, except share and per share data) March 31, December 31, 2007 2006 (unaudited) ASSETS Homebuilding: Cash and cash equivalents $ 555,317 $ 551,738 Receivables 12,179 12,213 Inventory: Lots and housing units, covered under sales agreements with customers 741,543 667,100 Unsold lots and housing units 53,712 58,248 Manufacturing materials and other 7,105 8,268 802,360 733,616 Contract land deposits, net 387,490 402,170 Assets not owned, consolidated per FIN 46R 279,736 276,419 Property, plant and equipment, net 37,526 40,430 Reorganization value in excess of amounts allocable to identifiable assets, net 41,580 41,580 Goodwill and other indefinite and definite life intangibles, net 11,905 11,936 Other assets 222,270 207,468 2,350,363 2,277,570 Mortgage Banking: Cash and cash equivalents 1,925 4,381 Mortgage loans held for sale, net 101,548 178,444 Property and equipment, net 1,083 1,168 Reorganization value in excess of amounts allocable to identifiable assets, net 7,347 7,347 Other assets 5,681 4,898 117,584 196,238 Total assets $2,467,947 $2,473,808 NVR, Inc. Consolidated Balance Sheets (Continued) (in thousands, except share and per share data) March 31, December 31, 2007 2006 (unaudited) LIABILITIES AND SHAREHOLDERS' EQUITY Homebuilding: Accounts payable $ 235,180 $ 273,936 Accrued expenses and other liabilities 239,548 265,223 Liabilities related to assets not owned, consolidated per FIN 46R 252,509 244,805 Customer deposits 190,721 165,354 Other term debt 3,018 3,080 Senior notes 200,000 200,000 1,120,976 1,152,398 Mortgage Banking: Accounts payable and other liabilities 12,781 15,784 Notes payable 79,062 153,552 91,843 169,336 Total liabilities 1,212,819 1,321,734 Commitments and contingencies Shareholders' equity: Common stock, $0.01 par value; 60,000,000 shares authorized; 20,592,640 shares issued for both March 31, 2007 and December 31, 2006 206 206 Additional paid-in capital 640,443 585,438 Deferred compensation trust - 516,217 and 547,911 shares of NVR, Inc. common stock for March 31, 2007 and December 31, 2006, respectively (75,656) (80,491) Deferred compensation liability 75,656 80,491 Retained earnings 3,280,861 3,196,040 Less treasury stock at cost - 14,920,656 and 15,075,113 shares for March 31, 2007 and December 31, 2006, respectively (2,666,382) (2,629,610) Total shareholders' equity 1,255,128 1,152,074 Total liabilities and shareholders' equity $ 2,467,947 $ 2,473,808 NVR, Inc. Operating Activity (unaudited) (dollars in thousands) Three Months Ended March 31, 2007 2006 Homebuilding data: New orders (units) Mid Atlantic (1) 1,921 1,634 North East (2) 417 451 Mid East (3) 1,030 928 South East (4) 549 620 Total 3,917 3,633 Average new order price $ 372.3 $ 387.6 Settlements (units) Mid Atlantic (1) 1,352 1,575 North East (2) 249 302 Mid East (3) 572 612 South East (4) 527 497 Total 2,700 2,986 Average settlement price $ 397.6 $ 395.9 Backlog (units) Mid Atlantic (1) 4,234 5,033 North East (2) 708 933 Mid East (3) 1,732 1,917 South East (4) 931 1,074 Total 7,605 8,957 Average backlog price $ 397.0 $ 435.6 Community count (average) 527 578 Lots controlled at end of period 86,000 105,000 Mortgage banking data: Loan closings $ 715,039 $ 736,782 Capture rate 86% 83% Common stock information: Shares outstanding at end of period 5,671,984 5,681,189 Weighted average basic shares outstanding 5,663,000 5,596,000 Weighted average diluted shares outstanding 6,545,000 6,805,000 Number of shares repurchased 126,000 161,856 Aggregate cost of shares repurchased $ 86,351 $ 120,817 (1) Virginia, West Virginia, Maryland, and Delaware (2) New Jersey and eastern Pennsylvania (3) Kentucky, Michigan, New York, Ohio and western Pennsylvania (4) North Carolina, South Carolina and Tennessee SOURCE NVR, Inc. -0- 04/20/2007 /CONTACT: Dan Malzahn, +1-703-956-4204, for NVR, Inc. / /Web site: http://www.nvrinc.com / (NVR)