NVR, Inc. Announces Third Quarter Results

Oct 18, 2012, 09:00 ET from NVR, Inc.

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.