NVR, Inc. Announces Second Quarter Results

RESTON, Va., July 22, 2013 /PRNewswire/ -- NVR, Inc. (NYSE: NVR), one of the nation's largest homebuilding and mortgage banking companies, announced net income for its second quarter ended June 30, 2013 of $50,690,000, $10.11 per diluted share.  Net income and diluted earnings per share for its second quarter ended June 30, 2013 increased 8% and 13%, respectively, when compared to the 2012 second quarter.  Consolidated revenues for the second quarter of 2013 totaled $1,009,892,000, a 31% increase from $769,783,000 for the comparable 2012 quarter.

For the six months ended June 30, 2013, consolidated revenues were $1,780,148,000, 30% higher than the $1,370,275,000 reported for the same period of 2012.  Net income for the six months ended June 30, 2013 was $85,731,000, an increase of 28% when compared to the six months ended June 30, 2012.  Diluted earnings per share for the six months ended June 30, 2013 was $16.92, an increase of 31% from $12.90 per diluted share for the comparable period of 2012.

Homebuilding

New orders in the second quarter of 2013 increased 25% to 3,278 units when compared to 2,614 units in the second quarter of 2012.  The cancellation rate in the second quarter of 2013 was 13.8% compared to 16.3% in the second quarter of 2012 and 13.2% in the first quarter of 2013.  Settlements increased in the second quarter of 2013 to 2,878 units, 16% higher than the same period in 2012.  The Company's backlog of homes sold but not settled as of June 30, 2013 increased on a unit basis by 31% to 6,617 units and on a dollar basis by 42% to $2,372,757,000 when compared to June 30, 2012.

Homebuilding revenues for the three months ended June 30, 2013 totaled $992,210,000, 31% higher than the year earlier period.  Gross profit margin in the second quarter of 2013 was 15.9% compared to 17.3% in the second quarter of 2012 and 16.9% in the first quarter of 2013.  Gross profit margin in the current quarter was negatively impacted by an approximate $15,600,000 charge, or 157 basis points of revenue, to establish a reserve related to remediation of primarily water infiltration issues in a single completed community.  The water infiltration issues were the result of a design issue with several products developed for and built in that specific community.  These products were not built in any other community.  Excluding this charge, gross profit margin for the second quarter of 2013 was 17.5%.  Income before tax from the homebuilding segment totaled $71,663,000 in the 2013 second quarter, an increase of 26% when compared to the second quarter of 2012.

Mortgage Banking

Mortgage closed loan production of $646,450,000 for the three months ended June 30, 2013 was 18% higher than the same period last year.  Operating income for the mortgage banking operations during the second quarter of 2013 increased 22% to $8,518,000, when compared to $6,971,000 reported for the same period of 2012.

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-seven 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 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) 
(Unaudited) 
 





Three Months Ended June 30,


Six Months Ended June 30,




2013


2012


2013


2012

Homebuilding:









Revenues                                         

$    992,210


$     755,290


$     1,743,078


$   1,341,485


Other income

1,098


538


2,124


1,446


Cost of sales

(834,288)


(624,978)


(1,458,373)


(1,116,807)


Selling, general and administrative 

(82,120)


(73,754)


(160,533)


(145,930)



Operating income 

76,900


57,096


126,296


80,194


Interest expense

(5,237)


(112)


(10,689)


(228)



Homebuilding income 

71,663


56,984


115,607


79,966











Mortgage Banking:









Mortgage banking fees

17,682


14,493


37,070


28,790


Interest income

1,047


815


2,002


2,480


Other income

178


136


291


212


General and administrative

(10,252)


(8,327)


(19,433)


(16,240)


Interest expense

(137)


(146)


(251)


(295)



Mortgage banking income

8,518


6,971


19,679


14,947











Income before taxes 

80,181


63,955


135,286


94,913













Income tax expense

(29,491)


(17,117)


(49,555)


(27,952)











Net income

$      50,690


$       46,838


$          85,731


$        66,961











Basic earnings per share 

$        10.37


$           9.17


$            17.38


$          13.19











Diluted earnings per share 

$        10.11


$           8.97


$            16.92


$          12.90











Basic weighted average shares outstanding 

4,889


5,106


4,934


5,075











Diluted weighted average shares outstanding 

5,013


5,221


5,067


5,191











 

 

 

NVR, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share data)














June 30, 2013


December 31, 2012

ASSETS



(Unaudited)











Homebuilding:






Cash and cash equivalents


$                  773,289


$               1,139,103


Receivables


14,822


9,421


Inventory:







Lots and housing units, covered under








sales agreements with customers


766,178


515,498



Unsold lots and housing units


72,704


81,932



Land under development


87,570


68,336



Manufacturing materials and other 


13,828


12,365






940,280


678,131










Assets related to consolidated variable interest entity

10,209


15,626


Contract land deposits, net


207,729


191,538


Property, plant and equipment, net


29,108


27,016


Reorganization value in excess of amounts







allocable to identifiable assets, net


41,580


41,580


Goodwill and finite-lived intangible assets, net


8,294


9,219


Other assets, net


290,970


270,636






2,316,281


2,382,270









Mortgage Banking:






Cash and cash equivalents


3,976


13,498


Mortgage loans held for sale, net


176,285


188,929


Property and equipment, net


3,593


2,465


Reorganization value in excess of amounts







allocable to identifiable assets, net


7,347


7,347


Other assets


23,685


10,333






214,886


222,572












Total assets


$               2,531,167


$               2,604,842









 

 

 

NVR, Inc.

Consolidated Balance Sheets (Continued)

(in thousands, except share and per share data)












June 30, 2013


December 31, 2012

LIABILITIES AND SHAREHOLDERS' EQUITY


(Unaudited)










Homebuilding:






Accounts payable


$                  196,628


$                  163,446


Accrued expenses and other liabilities


247,965


234,804


Liabilities related to consolidated variable interest entity

2,300


2,180


Non-recourse debt related to consolidated variable






interest entity


1,604


4,574


Customer deposits


137,765


99,687


Senior notes


599,031


598,988





1,185,293


1,103,679








Mortgage Banking:






Accounts payable and other liabilities


25,595


20,686





25,595


20,686










Total liabilities


1,210,888


1,124,365








Commitments and contingencies












Shareholders' equity:






Common stock, $0.01 par value; 60,000,000 shares







authorized; 20,555,330 and 20,556,198 shares 







issued as of June 30, 2013 and December 31, 2012

206


206


Additional paid-in-capital


1,196,385


1,169,699


Deferred compensation trust – 109,256 and







152,223 shares of NVR, Inc. common







stock as of June 30, 2013 and 







December 31, 2012, respectively


(17,741)


(25,331)


Deferred compensation liability


17,741


25,331


Retained earnings


4,424,811


4,339,080


Less treasury stock at cost – 15,855,338 and







15,642,068 shares at June 30, 2013







and December 31, 2012, respectively


(4,301,123)


(4,028,508)



Total shareholders' equity


1,320,279


1,480,477



    Total liabilities and shareholders' equity


$               2,531,167


$               2,604,842








 

 

 

NVR, Inc.

Operating Activity

(dollars in thousands)

(Unaudited)






Three Months Ended June 30,


Six Months Ended June 30,





2013


2012


2013


2012












Homebuilding data:










New orders (units)











Mid Atlantic (1)


1,671


1,321


3,387


2,984



North East (2)


274


236


567


495



Mid East (3)


833


677


1,782


1,475



South East (4)


500


380


1,052


817



   Total


3,278


2,614


6,788


5,771













Average new order price


$            361.1


$            330.5


$            351.8


$            321.1













Settlements (units)











Mid Atlantic (1)


1,493


1,275


2,631


2,281



North East (2)


259


247


450


416



Mid East (3)


722


609


1,315


1,057



South East (4)


404


344


754


645



   Total


2,878


2,475


5,150


4,399













Average settlement price


$            344.7


$            305.1


$            338.4


$            304.9













Backlog (units)











Mid Atlantic (1)






3,439


2,676



North East (2)






550


455



Mid East (3)






1,619


1,225



South East (4)






1,009


692



   Total






6,617


5,048













Average backlog price






$            358.6


$            331.3













Community count (average)


452


403


444


395


Lots controlled at end of period






61,200


55,000












Mortgage banking data:










Loan closings


$        646,450


$        548,871


$     1,120,216


$        969,055


Capture rate


85%


88%


84%


88%












Common stock information:










Shares outstanding at end of period






4,699,992


5,138,099


Number of shares repurchased


300,086


-


300,086


-


Aggregate cost of shares repurchased

$        294,979


$                    -


$        294,979


$                    -












(1) Virginia, West Virginia, Maryland, 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, Florida and Tennessee

 

SOURCE NVR, Inc.



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