NVR, Inc. Announces Fourth Quarter and Full Year Results

Jan 26, 2016, 09:00 ET from NVR, Inc.

RESTON, Va., Jan. 26, 2016 /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, 2015 of $134,004,000, or $31.92 per diluted share.  Net income and diluted earnings per share for the fourth quarter ended December 31, 2015 increased 35% and 37%, respectively, when compared to the 2014 fourth quarter. Consolidated revenues for the fourth quarter of 2015 totaled $1,555,275,000, a 17% increase from $1,328,038,000 for the comparable 2014 quarter.

For the year ended December 31, 2015, consolidated revenues were $5,159,008,000, 16% higher than the $4,444,568,000 reported for the same period of 2014.  Net income for the year ended December 31, 2015 was $382,927,000, an increase of 36% when compared to the year ended December 31, 2014.  Diluted earnings per share for the year ended December 31, 2015 was $89.99, an increase of 42% from $63.50 per diluted share for the comparable period of 2014.

Homebuilding

New orders in the fourth quarter of 2015 increased 14% to 3,100 units, when compared to 2,713 units in the fourth quarter of 2014. The average sales price of new orders in the fourth quarter of 2015 was $383,300, a decrease of 1% when compared with the fourth quarter of 2014.  The cancellation rate in the fourth quarter of 2015 was 16%, compared with 18% in the fourth quarter of 2014.  Settlements increased in the fourth quarter of 2015 to 4,010 units, 16% higher than the fourth quarter of 2014.  The Company's backlog of homes sold but not settled as of December 31, 2015 increased on a unit basis by 14% to 6,229 units and increased on a dollar basis by 13% to $2,375,182,000 when compared to December 31, 2014.

Homebuilding revenues for the three months ended December 31, 2015 totaled $1,528,084,000, 17% higher than the year earlier period.  Gross profit margin in the fourth quarter of 2015 was 18.9%, compared to 18.1% in the fourth quarter of 2014.  Income before tax from the homebuilding segment totaled $192,623,000 in the fourth quarter of 2015, an increase of 38% when compared to the fourth quarter of 2014.

New orders for the year ended December 31, 2015 increased 14% to 14,080 units, when compared to 12,389 units in 2014.  Home settlements increased 12% year over year to 13,326 units in 2015 from 11,859 units settled in 2014.  Homebuilding revenues for the year ended December 31, 2015 totaled $5,065,200,000, which is 16% higher than 2014.  Gross profit margin for the year ended December 31, 2015 was 18.7%, compared to 18.4% in 2014.  Income before tax for the homebuilding segment for the year ended December 31, 2015 was $555,329,000, a 30% increase when compared to 2014.

Mortgage Banking

Mortgage closed loan production for the three months ended December 31, 2015 totaled $1,042,440,000, an increase of 18% when compared to the three months ended December 31, 2014. Operating income for the mortgage banking operations during the fourth quarter of 2015 was $14,546,000, compared to $11,145,000 reported for the fourth quarter of 2014. 

Mortgage closed loan production for the year ended December 31, 2015 increased 23% to $3,492,342,000.  Income before tax from the mortgage banking segment for the year ended December 31, 2015 increased to $47,883,000 from $25,662,000 in 2014.

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, Fox Ridge Homes and Heartland Homes trade names, and operates in twenty-eight metropolitan areas in fourteen states and Washington, D.C.  For more information about NVR, Inc. and its brands, see www.nvrinc.com, www.ryanhomes.com, www.nvhomes.com, www.foxridgehomes.com and www.heartlandluxuryhomes.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 comparable terminology.  All statements other than of historical facts are forward-looking statements.  Forward-looking statements contained in this document may 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)





Three Months Ended December 31,



Twelve Months Ended December 31,




2015



2014



2015



2014




(Unaudited)



(Unaudited)



(Unaudited)






Homebuilding:

















Revenues


$

1,528,084



$

1,306,632



$

5,065,200



$

4,375,059


Other income



466




499




2,956




2,853


Cost of sales



(1,238,588)




(1,070,601)




(4,118,782)




(3,568,586)


Selling, general and administrative



(91,920)




(90,755)




(371,127)




(358,851)


Operating income



198,042




145,775




578,247




450,475


Interest expense



(5,419)




(5,696)




(22,918)




(22,591)


Homebuilding income



192,623




140,079




555,329




427,884



















Mortgage Banking:

















Mortgage banking fees



27,191




21,406




93,808




69,509


Interest income



2,132




1,558




6,485




4,940


Other income



402




285




1,113




778


General and administrative



(14,994)




(11,952)




(52,882)




(49,016)


Interest expense



(185)




(152)




(641)




(549)


Mortgage banking income



14,546




11,145




47,883




25,662



















Income before taxes



207,169




151,224




603,212




453,546


Income tax expense



(73,165)




(51,773)




(220,285)




(171,916)



















Net income


$

134,004



$

99,451



$

382,927



$

281,630



















Basic earnings per share


$

34.23



$

24.22



$

95.21



$

65.83



















Diluted earnings per share


$

31.92



$

23.24



$

89.99



$

63.50



















Basic weighted average shares outstanding



3,915




4,106




4,022




4,278



















Diluted weighted average shares outstanding



4,198




4,279




4,255




4,435


 

 

NVR, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share data)





December 31, 2015



December 31, 2014




(Unaudited)






ASSETS









Homebuilding:









Cash and cash equivalents


$

397,522



$

514,780


Receivables



11,482




10,021


Inventory:









Lots and housing units, covered under sales agreements with customers



785,982




690,955


Unsold lots and housing units



147,832




131,938


Land under development



60,611




33,689


Building materials and other



12,101




12,904





1,006,526




869,486











Assets related to consolidated variable interest entity



1,749




3,590


Contract land deposits, net



343,295




294,676


Property, plant and equipment, net



44,651




46,242


Reorganization value in excess of amounts allocable to identifiable assets, net



41,580




41,580


Goodwill and finite-lived intangible assets, net



3,982




5,364


Other assets



284,794




302,280





2,135,581




2,088,019


Mortgage Banking:









Cash and cash equivalents



26,804




30,158


Mortgage loans held for sale, net



319,553




205,664


Property and equipment, net



5,313




6,189


Reorganization value in excess of amounts allocable to identifiable assets, net



7,347




7,347


Other assets



20,533




13,958





379,550




263,316


Total assets


$

2,515,131



$

2,351,335











LIABILITIES AND SHAREHOLDERS' EQUITY









Homebuilding:









Accounts payable


$

227,437



$

204,622


Accrued expenses and other liabilities



304,922




289,058


Liabilities related to consolidated variable interest entity



1,091




1,618


Non-recourse debt related to consolidated variable interest entity






64


Customer deposits



110,965




106,755


Senior notes



599,260




599,166





1,243,675




1,201,283


Mortgage Banking:









Accounts payable and other liabilities



32,291




25,797





32,291




25,797


Total liabilities



1,275,966




1,227,080











Commitments and contingencies


















Shareholders' equity:









Common stock, $0.01 par value; 60,000,000 shares authorized; 20,555,330









shares issued as of both December 31, 2015 and December 31, 2014


206



206


Additional paid-in capital



1,447,795




1,325,495


Deferred compensation trust – 108,614 shares of NVR, Inc.









common stock as of both December 31, 2015 and December 31, 2014



(17,333)




(17,333)


Deferred compensation liability



17,333




17,333


Retained earnings



5,270,114




4,887,187


Less treasury stock at cost – 16,664,342 and 16,506,229 shares









at December 31, 2015 and December 31, 2014, respectively



(5,478,950)




(5,088,633)


Total shareholders' equity



1,239,165




1,124,255


Total liabilities and shareholders' equity


$

2,515,131



$

2,351,335


 

 

NVR, Inc.

Operating Activity

(dollars in thousands)

(Unaudited)





Three Months Ended December 31,



Twelve Months Ended December 31,




2015



2014



2015



2014


Homebuilding data:

















New orders (units)

















Mid Atlantic (1)



1,550




1,435




7,070




6,365


North East (2)



237




286




1,173




1,182


Mid East (3)



799




594




3,485




2,963


South East (4)



514




398




2,352




1,879


Total



3,100




2,713




14,080




12,389



















Average new order price


$

383.3



$

385.9



$

378.7



$

373.7



















Settlements (units)

















Mid Atlantic (1)



2,109




1,808




6,879




6,129


North East (2)



322




309




1,221




1,089


Mid East (3)



966




833




3,137




2,845


South East (4)



613




519




2,089




1,796


Total



4,010




3,469




13,326




11,859



















Average settlement price


$

381.6



$

375.5



$

379.9



$

368.5



















Backlog (units)

















Mid Atlantic (1)











3,137




2,946


North East (2)











540




588


Mid East (3)











1,498




1,150


South East (4)











1,054




791


Total











6,229




5,475



















Average backlog price










$

381.3



$

384.6



















Community count (average)



467




483




472




488


Lots controlled at end of period











74,500




68,700



















Mortgage banking data:

















Loan closings


$

1,042,440



$

881,930



$

3,492,342



$

2,833,612


Capture rate



88

%



87

%



88

%



84

%


















Common stock information:

















Shares outstanding at end of period











3,890,988




4,049,101


Number of shares repurchased



106,559




135,921




289,687




507,648


Aggregate cost of shares repurchased


$

167,921



$

158,108



$

431,367



$

567,544


 

(1)

Maryland, Virginia, West Virginia, Delaware and Washington, D.C.

(2)

New Jersey and Eastern Pennsylvania

(3)

New York, Ohio, Western Pennsylvania, Indiana and Illinois

(4)

North Carolina, South Carolina, Tennessee and Florida

 

SOURCE NVR, Inc.