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.