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NVR, Inc. Announces a 45% Increase in Earnings Per Share and 21% New Order Growth for the Second Quarter of 2005
RESTON, Va., July 19, 2005 /PRNewswire-FirstCall via COMTEX/ -- NVR, Inc. (Amex: NVR), one of the nation's largest homebuilding and mortgage banking companies, today announced that diluted earnings per share for its second quarter ended June 30, 2005 exceeded the 2004 second quarter by 45%. Net income for the 2005 second quarter was $167,649,000, $21.42 per diluted share, compared to net income of $115,970,000, $14.82 per diluted share, for the same period of 2004. Consolidated revenues increased 28% to $1,277,689,000 for the quarter when compared to $1,001,376,000 for the same period of 2004. The Company reported that new orders increased 21% to 4,829 units for the second quarter of 2005 when compared to the second quarter of 2004. Backlog at the end of the period increased 13% to 9,554 units when compared to the same time last year. The dollar value of the backlog units totaled $4,021,893,000 at the end of the June 2005 quarter, a 31% increase from a year earlier.
Homebuilding revenues for the three months ended June 30, 2005, totaled $1,257,248,000, 28% higher than the year earlier period. Income before tax from the homebuilding segment totaled $263,597,000, an increase of 45% when compared to the second quarter of the previous year. Gross profit margins improved to 27.8% for the second quarter of 2005 when compared to 25.3% for the same quarter of 2004. The margin improvement primarily resulted from the ability to raise prices in certain markets that more than offset rising material and land costs.
The Company reported that closed loan production from its mortgage banking segment increased 36% during the June 2005 quarter when compared to the second quarter of 2004. Operating income for the 2005 second quarter increased to $13,510,000, a 21% increase from the same period of 2004.
For the six months ended June 30, 2005, consolidated revenues were $2,231,121,000, 19% higher than the $1,878,169,000 reported for the same period of 2004. Net income for the six months ended June 30, 2005 was $285,579,000, an increase of 32% when compared to the six months ended June 30, 2004. Earnings per diluted share for the six months ended June 30, 2005 was $35.68, an increase of 30% from $27.38 per diluted share for the comparable period of 2004.
Because of the favorable backlog position at the beginning of the third quarter the Company has increased its full year 2005 guidance to 20% growth in net income when compared to 2004. The Company also stated that during the first six months of 2005 it had repurchased approximately 506,000 shares of its common stock.
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 1993, 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)
Three Months Ended Three Months Ended
June 30, 2005 June 30, 2004
Homebuilding:
Revenues $ 1,257,248 $ 984,833
Other income 874 681
Cost of sales (907,284) (735,978)
Selling, general and
administrative (84,235) (64,341)
Operating income 266,603 185,195
Interest expense (3,006) (3,038)
Homebuilding income 263,597 182,157
Mortgage Banking:
Mortgage banking fees 20,441 16,543
Interest income 868 949
Other income 372 276
General and administrative (7,893) (6,270)
Interest expense (278) (371)
Mortgage banking income 13,510 11,127
Income before taxes 277,107 193,284
Income tax expense (109,458) (77,314)
Net income $ 167,649 $ 115,970
Basic earnings per share $ 26.31 $ 17.91
Diluted earnings per share $ 21.42 $ 14.82
Basic average shares outstanding 6,372 6,475
Diluted average shares outstanding 7,825 7,825
NVR, Inc.
Consolidated Statements of Income
(in thousands, except per share data)
Six Months Ended Six Months Ended
June 30, 2005 June 30, 2004
Homebuilding:
Revenues $ 2,196,500 $ 1,845,518
Other income 2,933 1,327
Cost of sales (1,586,831) (1,378,989)
Selling, general and
administrative (156,650) (122,823)
Operating income 455,952 345,033
Interest expense (5,930) (5,953)
Homebuilding income 450,022 339,080
Mortgage Banking:
Mortgage banking fees 34,621 32,651
Interest income 1,784 1,902
Other income 587 445
General and administrative (14,529) (12,482)
Interest expense (453) (617)
Mortgage banking income 22,010 21,899
Income before taxes 472,032 360,979
Income tax expense (186,453) (144,392)
Net income $ 285,579 $ 216,587
Basic earnings per share $ 43.84 $ 33.15
Diluted earnings per share $ 35.68 $ 27.38
Basic average shares outstanding 6,515 6,533
Diluted average shares outstanding 8,004 7,911
NVR, Inc.
Consolidated Balance Sheets
(in thousands, except per share and share data)
June 30, 2005 December 31, 2004
(unaudited)
ASSETS
Homebuilding:
Cash and cash equivalents $ 259,804 $ 362,458
Receivables 36,346 14,020
Inventory:
Lots and housing units,
covered under sales
agreements with customers 754,876 538,770
Unsold lots and housing units 42,419 40,052
Manufacturing materials and
other 12,098 9,718
809,393 588,540
Contract land deposits 478,774 384,959
Assets not owned, consolidated
per FIN 46R 163,114 89,924
Property, plant and equipment,
net 25,556 25,330
Reorganization value in excess
of amounts allocable to
identifiable assets, net 41,580 41,580
Goodwill and indefinite life
intangibles, net 10,579 6,379
Definite life intangibles, net 437 -
Other assets 118,876 109,778
1,944,459 1,622,968
Mortgage Banking:
Cash and cash equivalents 5,275 4,907
Mortgage loans held for sale,
net 153,614 138,595
Mortgage servicing rights, net 105 126
Property and equipment, net 925 996
Reorganization value in excess
of amounts allocable to
identifiable assets, net 7,347 7,347
Other assets 2,886 3,028
170,152 154,999
Total assets $ 2,114,611 $ 1,777,967
LIABILITIES AND SHAREHOLDERS' EQUITY
Homebuilding:
Accounts payable $ 240,726 $ 215,002
Accrued expenses and other
liabilities 294,937 234,815
Liabilities related to
assets not owned,
consolidated per FIN 46R 130,360 63,568
Customer deposits 287,813 203,835
Other term debt 3,464 4,077
Senior notes 200,000 200,000
1,157,300 921,297
Mortgage Banking:
Accounts payable and other
liabilities 13,149 11,949
Notes payable 127,772 9,726
140,921 21,675
Total liabilities 1,298,221 942,972
Commitments and contingencies
Shareholders' equity:
Common stock, $0.01 par value;
60,000,000 shares authorized;
20,592,640 and 20,597,709
shares issued as of June 30,
2005 and December 31, 2004,
respectively 206 206
Additional paid-in-capital 464,154 406,705
Deferred compensation trust-
547,697 and 549,029 shares
of NVR, Inc. common stock as
of June 30, 2005 and December
31, 2004, respectively (76,303) (76,366)
Deferred compensation liability 76,303 76,366
Retained earnings 2,196,648 1,911,069
Less treasury stock at cost -
14,247,194 and 14,023,631
shares as of June 30, 2005
and December 31, 2004,
respectively (1,844,618) (1,482,985)
Total shareholders' equity 816,390 834,995
Total liabilities and
shareholders' equity $ 2,114,611 $ 1,777,967
NVR, Inc.
Operating Activity
(unaudited)
(dollars in thousands)
Three Months Ended June 30,
2005 2004
Homebuilding data:
New orders (units)
Washington (1) 1,348 1,160
Baltimore (2) 603 431
North (3) 1,942 1,572
South (4) 936 838
Total 4,829 4,001
Average new order price $408.1 $360.2
Settlements (units)
Washington (1) 977 764
Baltimore (2) 317 400
North (3) 1,379 1,274
South (4) 743 572
Total 3,416 3,010
Average settlement price $366.8 $326.0
Community count (average) 504 438
Mortgage banking data:
Loan closings $857,821 $628,598
Capture rate 88% 84%
Common stock information:
Weighted average basic shares
outstanding 6,372,000 6,475,000
Weighted average diluted
shares outstanding 7,825,000 7,825,000
Number of shares repurchased 190,700 294,289
Aggregate cost of shares
repurchased $146,910 $131,920
(1) Washington, D.C. metropolitan area and adjacent counties in
Maryland, Virginia and West Virginia
(2) Baltimore, MD metropolitan area and adjacent counties in
Pennsylvania
(3) Delaware, Maryland Eastern Shore, New Jersey, New York, Ohio and
Pennsylvania
(4) North Carolina, South Carolina, Tennessee and Richmond, VA
NVR, Inc.
Operating Activity
(unaudited)
(dollars in thousands)
Six Months Ended June 30,
2005 2004
Homebuilding data:
New orders (units)
Washington (1) 2,259 2,141
Baltimore (2) 1,030 830
North (3) 3,255 2,877
South (4) 1,597 1,471
Total 8,141 7,319
Average new order price $405.4 $352.7
Settlements (units)
Washington (1) 1,606 1,473
Baltimore (2) 658 792
North (3) 2,398 2,405
South (4) 1,369 1,049
Total 6,031 5,719
Average settlement price $363.2 $321.8
Backlog (units)
Washington (1) 3,206 2,906
Baltimore (2) 1,188 922
North (3) 3,606 3,196
South (4) 1,554 1,466
Total 9,554 8,490
Average backlog price $421.0 $361.0
Community count (average) 493 444
Lots controlled at end of period 97,000 75,000
Mortgage banking data:
Loan closings $1,472,313 $1,151,937
Capture rate 88% 83%
Common stock information:
Shares outstanding at end of
period 6,345,446 6,379,940
Weighted average basic shares
outstanding 6,515,000 6,533,000
Weighted average diluted
shares outstanding 8,004,000 7,911,000
Number of shares repurchased 506,150 551,619
Aggregate cost of shares
repurchased $395,316 $245,857
(1) Washington, D.C. metropolitan area and adjacent counties in
Maryland, Virginia and West Virginia
(2) Baltimore, MD metropolitan area and adjacent counties in
Pennsylvania
(3) Delaware, Maryland Eastern Shore, New Jersey, New York, Ohio and
Pennsylvania
(4) North Carolina, South Carolina, Tennessee and Richmond, VA
SOURCE NVR, Inc.
Dan Malzahn of NVR, Inc., +1-703-956-4204
http://www.prnewswire.com