RESTON, Va., Oct 21, 2008 /PRNewswire-FirstCall via COMTEX/ ----NVR, Inc. (NYSE: NVR), one of the nation's largest homebuilding and mortgage banking companies, announced that diluted earnings per share and net income for its third quarter ended September 30, 2008 decreased 60% when compared to the 2007 third quarter. Net income for the 2008 third quarter was $36,551,000, $6.12 per diluted share, compared to net income of $91,113,000, $15.26 per diluted share, for the same period of 2007. Consolidated revenues for the third quarter of 2008 totaled $939,211,000, a 27% decrease from $1,292,088,000 for the comparable 2007 quarter.

For the nine months ended September 30, 2008, consolidated revenues were $2,782,865,000, 25% lower than the $3,701,945,000 reported for the same period of 2007. Net income for the nine months ended September 30, 2008 was $131,349,000, a decrease of 51% when compared to the nine months ended September 30, 2007. Diluted earnings per share for the nine months ended September 30, 2008 was $22.21, a decrease of 47% from $42.25 per diluted share for the comparable period of 2007.

Homebuilding

New orders in the third quarter of 2008 decreased 25% to 2,002 units, when compared to 2,660 units in the third quarter of 2007. The cancellation rate in the quarter ended September 30, 2008 was 24% compared to 27% in the third quarter of 2007 and 19% in the second quarter of 2008. Settlements decreased in the third quarter of 2008 to 2,750 units, 21% less than the same period of 2007. The Company's backlog of homes sold but not settled at the end of the 2008 quarter decreased on a unit basis by 35% to 4,583 units and 44% on a dollar basis to $1,499,830,000 when compared to the same period last year.

Homebuilding revenues for the three months ended September 30, 2008 totaled $928,265,000, 27% lower than the year earlier period. Gross profit margins decreased to 13.2% in the 2008 third quarter compared to 14.4% for the same period in 2007. Gross profit margins were impacted by land deposit impairments of approximately $43,000,000, 461 basis points of revenue, in the 2008 third quarter, and approximately $97,000,000, 760 basis points of revenue, in the year ago period. Gross profit margins excluding the land deposit impairments were 17.8% in the 2008 third quarter compared to 22.0% for the same period in 2007. Income before tax from the homebuilding segment totaled $56,535,000 in the 2008 third quarter, a decrease of 56% when compared to the third quarter of the previous year. Operating unit activity and financial performance are being negatively impacted by high levels of new and existing home inventories, affordability issues, a tight mortgage lending environment and declining homebuyer confidence.

Mortgage Banking

Mortgage closed loan production of $610,313,000 for the three months ended September 30, 2008 was 23% lower than the same period last year. Operating income for the mortgage banking operations during the third quarter of 2008 decreased 76% to $4,072,000, when compared to $16,814,000 reported for the same period of 2007. Operating income in the current quarter was negatively impacted by a $4,100,000 decrease in unrealized income from the fair value measurements required under SFAS No. 157, Fair Value Measurement, and more competitive mortgage pricing.

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 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,
   2008         2007         2008         2007
   
   Homebuilding:
   Revenues              $928,265   $1,270,471   $2,739,167   $3,642,721
   Other income             4,256        4,209       14,356       16,425
   Cost of sales         (805,931)  (1,087,399)  (2,305,231)  (3,002,746)
   Selling, general and
   administrative        (66,796)     (54,906)    (240,833)    (253,510)
   Operating income      59,794      132,375      207,459      402,890
   Interest expense        (3,259)      (3,375)      (9,730)      (9,995)
   Homebuilding income   56,535      129,000      197,729      392,895
   
   Mortgage Banking:
   Mortgage banking fees   10,946       21,617       43,698       59,224
   Interest income            929        1,078        2,608        3,415
   Other income               188          320          531          780
   General and
   administrative         (7,761)      (6,001)     (23,823)     (24,278)
   Interest expense          (230)        (200)        (544)        (513)
   Mortgage banking income  4,072       16,814       22,470       38,628
   
   Income before taxes       60,607      145,814      220,199      431,523
   
   Income tax expense     (24,056)     (54,701)     (88,850)    (164,842)
   
   Net income               $36,551      $91,113     $131,349     $266,681
   
   
   Basic earnings per share   $6.72       $17.25       $24.60       $48.35
   
   Diluted earnings per
   share                     $6.12       $15.26       $22.21       $42.25
   
   Basic average shares
   outstanding               5,438        5,283        5,340        5,516
   
   Diluted average shares
   outstanding               5,968        5,969        5,915        6,312
   
   
   NVR, Inc.
   Consolidated Balance Sheets
   (in thousands, except share and per share data)
   
   September 30,   December 31,
   2008           2007
   (unaudited)            -
   
   ASSETS
   
   Homebuilding:
   Cash and cash equivalents                     $963,313       $660,709
   Receivables                                     10,444         10,855
   Inventory:
   Lots and housing units, covered under
   sales agreements with customers              536,895        573,895
   Unsold lots and housing units                  67,570        105,838
   Manufacturing materials and other               6,555          9,121
   611,020        688,854
   
   Contract land deposits                         130,575        188,528
   Assets not owned, consolidated
   per FIN 46R                                   127,074        180,206
   Property, plant and equipment, net              26,834         32,911
   Reorganization value in excess of amounts
   allocable to identifiable assets, net          41,580         41,580
   Goodwill and other indefinite and definite
   life intangibles, net                          11,707         11,782
   Other assets                                   253,785        252,461
   2,176,332      2,067,886
   
   Mortgage Banking:
   Cash and cash equivalents                        1,728          3,500
   Mortgage loans held for sale, net              113,839        107,338
   Property and equipment, net                        903            881
   Reorganization value in excess of amounts
   allocable to identifiable assets, net           7,347          7,347
   Other assets                                     8,003          7,464
   
   131,820        126,530
   
   Total assets                                $2,308,152     $2,194,416
   
   
   
   September 30,   December 31,
   2008           2007
   (unaudited)          -
   LIABILITIES AND SHAREHOLDERS' EQUITY
   
   Homebuilding:
   Accounts payable                                $181,403       $219,048
   Accrued expenses and other liabilities           235,564        251,475
   Liabilities related to assets not owned,
   consolidated per FIN 46R                        118,323        164,369
   Customer deposits                                 93,117        125,315
   Other term debt                                    2,630          2,820
   Senior notes                                     200,000        200,000
   831,037        963,027
   Mortgage Banking:
   Accounts payable and other liabilities            13,858         18,551
   Notes payable                                     90,782         83,463
   104,640        102,014
   
   Total liabilities                                935,677      1,065,041
   
   Commitments and contingencies
   
   Shareholders' equity:
   Common stock, $0.01 par value; 60,000,000
   shares authorized; 20,561,187 and 20,592,640
   shares issued for September 30, 2008 and
   December 31, 2007, respectively                     206            206
   Additional paid-in capital                       706,560        663,631
   Deferred compensation trust -- 515,950 and
   516,085 shares of NVR, Inc. common stock for
   September 30, 2008 and December 31, 2007,
   respectively                                    (75,495)       (75,636)
   Deferred compensation liability                   75,495         75,636
   Retained earnings                              3,661,344      3,529,995
   Less treasury stock at cost -- 15,108,940 and
   15,455,086 shares for September 30, 2008 and
   December 31, 2007, respectively              (2,995,635)    (3,064,457)
   Total shareholders' equity                     1,372,475      1,129,375
   Total liabilities and shareholders'
   equity                                       $2,308,152     $2,194,416
   
   
   NVR, Inc.
   Operating Activity
   (unaudited)
   (dollars in thousands)
   
   
   Three Months Ended     Nine Months Ended
   September 30,         September 30,
   2008       2007       2008        2007
   
   Homebuilding data:
   New orders (units):
   Mid Atlantic (1)       965      1,061      3,598       4,785
   North East (2)         205        260        725       1,022
   Mid East (3)           577        667      2,020       2,620
   South East (4)         255        672      1,060       1,895
   Total               2,002      2,660      7,403      10,322
   
   Average new order
   price                $302.9     $330.1     $314.1      $358.4
   
   Settlements (units):
   Mid Atlantic (1)     1,266      1,656      3,851       4,728
   North East (2)         264        345        813         918
   Mid East (3)           756        936      2,012       2,347
   South East (4)         464        539      1,289       1,646
   Total               2,750      3,476      7,965       9,639
   
   Average settlement
   price                $337.1     $365.1     $343.5      $377.5
   
   Backlog (units):
   Mid Atlantic (1)                            2,473       3,722
   North East (2)                                417         644
   Mid East (3)                                1,121       1,547
   South East (4)                                572       1,158
   Total                                      4,583       7,071
   
   Average backlog price                        $327.3      $381.2
   
   Community count
   (average)                426        506        437         517
   Lots controlled at
   end of period                               58,300      79,700
   
   Mortgage banking
   data:
   Loan closings      $610,313   $793,749 $1,727,718  $2,358,218
   Capture rate             86%        84%        84%         85%
   
   Common stock
   information:
   Shares outstanding at
   end of period
   5,452,247   5,135,600
   Number of shares
   repurchased              -    479,088          -     784,788
   Aggregate cost of
   shares repurchased       -   $297,859          -    $507,472
   
   (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 and Tennessee
   
   
   

SOURCE NVR, Inc.

http://www.nvrinc.com
   

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