2014

NVR, Inc. Announces Third Quarter Results

RESTON, Va., Oct. 18, 2012 /PRNewswire/ -- NVR, Inc. (NYSE: NVR), one of the nation's largest homebuilding and mortgage banking companies, announced net income for its third quarter ended September 30, 2012 of $53,000,000, $10.33 per diluted share.  Net income and diluted earnings per share for its third quarter ended September 30, 2012 increased 22% and 29%, respectively, when compared to the 2011 third quarter.  Consolidated revenues for the third quarter of 2012 totaled $870,637,000, a 23% increase from $707,476,000 for the comparable 2011 quarter.

For the nine months ended September 30, 2012, consolidated revenues were $2,240,912,000, 17% higher than the $1,917,861,000 reported for the same period of 2011.  Net income for the nine months ended September 30, 2012 was $119,961,000, an increase of 24% when compared to the nine months ended September 30, 2011.  Diluted earnings per share for the nine months ended September 30, 2012 was $23.22, an increase of 39% from $16.75 per diluted share for the comparable period of 2011.

Homebuilding

New orders in the third quarter of 2012 increased 15% to 2,558 units when compared to 2,218 units in the third quarter of 2011.  The cancellation rate in the third quarter of 2012 was 16.6% compared to 15.0% in the third quarter of 2011 and 16.3% in the second quarter of 2012.  Settlements increased in the third quarter of 2012 to 2,656 units, 18% higher than the same period in 2011.  The Company's backlog of homes sold but not settled at the end of the 2012 quarter increased on a unit basis by 27% to 4,950 units and on a dollar basis by 38% to $1,674,502,000 when compared to the same period last year.

Homebuilding revenues for the three months ended September 30, 2012 totaled $854,396,000, 23% higher than the year earlier period.  Gross profit margin in the third quarter of 2012 was 17.8% compared to 17.9% in the third quarter of 2011 and 17.3% in the second quarter of 2012.  Income before tax from the homebuilding segment totaled $74,655,000, an increase of 15% when compared to the third quarter of 2011.

Mortgage Banking

Mortgage closed loan production of $594,867,000 for the three months ended September 30, 2012 was 21% higher than the same period last year.  Operating income for the mortgage banking operations during the third quarter of 2012 increased 123% to $9,478,000, when compared to $4,257,000 reported for the same period of 2011.

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 and Fox Ridge Homes trade names, and operates in twenty-seven metropolitan areas in fifteen states.  For more information about NVR, Inc. and its brands, see www.nvrinc.com, www.ryanhomes.com, www.nvhomes.com, and www.foxridgehomes.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
September 30,


Nine Months Ended
September 30,




2012


2011


2012


2011

Homebuilding:









Revenues                                         

$ 854,396


$ 696,980


$ 2,195,881


$ 1,882,387


Other income

599


842


2,045


3,662


Cost of sales

(702,436)


(572,382)


(1,819,243)


(1,548,903)


Selling, general and administrative 

(76,553)


(60,462)


(222,483)


(195,695)



Operating income 

76,006


64,978


156,200


141,451


Interest expense

(1,351)


(293)


(1,579)


(802)



Homebuilding income 

74,655


64,685


154,621


140,649











Mortgage Banking:









Mortgage banking fees

16,241


10,496


45,031


35,474


Interest income

1,025


1,589


3,505


3,789


Other income

161


151


373


311


General and administrative

(7,789)


(7,796)


(24,029)


(22,371)


Interest expense

(160)


(183)


(455)


(721)



Mortgage banking income

9,478


4,257


24,425


16,482











Income before taxes 

84,133


68,942


179,046


157,131













Income tax expense

(31,133)


(25,533)


(59,085)


(60,103)











Net income

$  53,000


$   43,409


$    119,961


$     97,028











Basic earnings per share 

$    10.60


$       8.19


$        23.76


$       17.22











Diluted earnings per share 

$    10.33


$      7.98


$        23.22


$       16.75











Basic weighted average shares
  outstanding 

4,999


5,301


5,049


5,634











Diluted weighted average shares
 outstanding 

5,132


5,437


5,167


5,792












 

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














September 30, 2012


December 31, 2011

ASSETS



(Unaudited)











Homebuilding:






Cash and cash equivalents


$               1,071,999


$                  475,566


Receivables


9,973


6,789


Inventory:







Lots and housing units, covered under








sales agreements with customers


551,059


363,833



Unsold lots and housing units


69,452


82,578



Land under development


71,102


78,045



Manufacturing materials and other 


8,563


8,694






700,176


533,150










Assets related to consolidated variable interest entity

16,210


20,182


Contract land deposits, net


173,404


131,930


Property, plant and equipment, net


27,140


23,243


Reorganization value in excess of amounts







allocable to identifiable assets, net


41,580


41,580


Other assets, net


285,417


268,878






2,325,899


1,501,318









Mortgage Banking:






Cash and cash equivalents


5,544


4,766


Mortgage loans held for sale, net


128,452


252,352


Property and equipment, net


2,173


1,694


Reorganization value in excess of amounts







allocable to identifiable assets, net


7,347


7,347


Other assets


11,311


12,008






154,827


278,167












Total assets


$               2,480,726


$               1,779,485









 

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












September 30, 2012


December 31, 2011

LIABILITIES AND SHAREHOLDERS' EQUITY


(Unaudited)










Homebuilding:






Accounts payable


$                  156,614


$                  125,649


Accrued expenses and other liabilities


226,750


185,423


Liabilities related to consolidated variable interest entity

1,356


1,013


Non-recourse debt related to consolidated variable






interest entity


865


4,983


Customer deposits


94,940


61,223


Senior notes


598,967


-





1,079,492


378,291








Mortgage Banking:






Accounts payable and other liabilities


21,926


26,395





21,926


26,395










Total liabilities


1,101,418


404,686








Commitments and contingencies












Shareholders' equity:






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







authorized; 20,556,198 shares issued as of







both September 30, 2012 and December 31, 2011

206


206


Additional paid-in-capital


1,134,306


1,072,779


Deferred compensation trust – 152,223 and







152,964 shares of NVR, Inc. common







stock as of September 30, 2012 and 







December 31, 2011, respectively


(25,331)


(25,581)


Deferred compensation liability


25,331


25,581


Retained earnings


4,278,453


4,158,492


Less treasury stock at cost – 15,681,381 and







15,578,565 shares at September 30, 2012







and December 31, 2011, respectively


(4,033,657)


(3,856,678)



Total shareholders' equity


1,379,308


1,374,799



    Total liabilities and shareholders' equity


$               2,480,726


$               1,779,485








 

NVR, Inc.
Operating Activity
(dollars in thousands)
(Unaudited)






Three Months Ended
September 30,


Nine Months Ended
September 30,


2012


2011


2012


2011









Homebuilding data:








    New orders (units)








        Mid Atlantic (1)

1,355


1,139


4,339


3,503

        North East (2)

217


179


712


639

        Mid East (3)

576


544


2,051


1,926

        South East (4)

410


356


1,227


1,021

           Total

2,558


2,218


8,329


7,089









    Average new order price

$     334.7


$   306.5


$     325.2


$       301.8









    Settlements (units)








        Mid Atlantic (1)

1,339


1,090


3,620


3,002

        North East (2)

249


191


665


536

        Mid East (3)

682


676


1,739


1,719

        South East (4)

386


298


1,031


839

           Total

2,656


2,255


7,055


6,096









    Average settlement price

$    321.7


$    308.9


$     311.2


$       308.6









    Backlog (units)








        Mid Atlantic (1)





2,692


2,096

        North East (2)





423


335

        Mid East (3)





1,119


937

        South East (4)





716


541

           Total





4,950


3,909









    Average backlog price





$     338.3


$       311.2









    Community count (average)

412


389


401


385

    Lots controlled at end of period





55,500


51,900









Mortgage banking data:








    Loan closings

$594,867


$489,866


$1,563,921


$1,347,553

    Capture rate

86%


88%


87%


89%









Common stock information:








    Shares outstanding at end of
     period





4,874,817


5,013,861

    Number of shares repurchased

276,995


567,788


276,995


979,265

    Aggregate cost of shares
     repurchased

$220,128


$365,743


$   220,128


$   666,628










(1) Virginia, West Virginia, Maryland, Delaware and Washington, D.C.

(2) New Jersey and eastern Pennsylvania

(3) Kentucky, western Pennsylvania, New York, Ohio, Indiana and Illinois

(4) North Carolina, South Carolina, Tennessee and Florida

 

SOURCE NVR, Inc.



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