NVR, Inc. Announces Third Quarter Results

21 Oct, 2013, 08:50 ET from NVR, Inc.

RESTON, Va., Oct. 21, 2013 /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, 2013 of $82,935,000, $17.67 per diluted share.  Net income and diluted earnings per share for its third quarter ended September 30, 2013 increased 56% and 71%, respectively, when compared to the 2012 third quarter.  Consolidated revenues for the third quarter of 2013 totaled $1,188,967,000, a 37% increase from $870,637,000 for the comparable 2012 quarter.

For the nine months ended September 30, 2013, consolidated revenues were $2,969,115,000, 32% higher than the $2,240,912,000 reported for the same period of 2012.  Net income for the nine months ended September 30, 2013 was $168,666,000, an increase of 41% when compared to the nine months ended September 30, 2012.  Diluted earnings per share for the nine months ended September 30, 2013 was $34.13, an increase of 47% from $23.22 per diluted share for the comparable period of 2012.

Homebuilding    

New orders in the third quarter of 2013 decreased 7% to 2,381 units when compared to 2,558 units in the third quarter of 2012.  The cancellation rate in the third quarter of 2013 was 19% compared to 17% in the third quarter of 2012 and 14% in the second quarter of 2013.  Settlements increased in the third quarter of 2013 to 3,342 units, 26% higher than the same period in 2012.  The Company's backlog of homes sold but not settled as of September 30, 2013 increased on a unit basis by 14% to 5,656 units and on a dollar basis by 24% to $2,077,425,000 when compared to September 30, 2012.

Homebuilding revenues for the three months ended September 30, 2013 totaled $1,167,595,000, 37% higher than the year earlier period.  Gross profit margin in the third quarter of 2013 was 17.4% compared to 17.8% in the third quarter of 2012.  Income before tax from the homebuilding segment totaled $119,787,000 in the 2013 third quarter, an increase of 60% when compared to the third quarter of 2012.

Mortgage Banking    

Mortgage closed loan production of $695,930,000 for the three months ended September 30, 2013 was 17% higher than the same period last year.  Operating income for the mortgage banking operations during the third quarter of 2013 increased 25% to $11,803,000, when compared to $9,478,000 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 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), including the possibility of a U.S. Government shutdown or the failure of the U.S. Congress to raise the debt ceiling; 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,

2013

2012

2013

2012

Homebuilding:

Revenues                                         

$        1,167,595

$           854,396

$        2,910,673

$        2,195,881

Other income

1,030

599

3,154

2,045

Cost of sales

(964,416)

(702,436)

(2,422,789)

(1,819,243)

Selling, general and administrative 

(78,897)

(76,553)

(239,430)

(222,483)

Operating income 

125,312

76,006

251,608

156,200

Interest expense

(5,525)

(1,351)

(16,214)

(1,579)

Homebuilding income 

119,787

74,655

235,394

154,621

Mortgage Banking:

Mortgage banking fees

21,372

16,241

58,442

45,031

Interest income

1,396

1,025

3,398

3,505

Other income

218

161

509

373

General and administrative

(11,026)

(7,789)

(30,459)

(24,029)

Interest expense

(157)

(160)

(408)

(455)

Mortgage banking income

11,803

9,478

31,482

24,425

Income before taxes 

131,590

84,133

266,876

179,046

Income tax expense

(48,655)

(31,133)

(98,210)

(59,085)

Net income

$             82,935

$             53,000

$           168,666

$           119,961

Basic earnings per share 

$               18.08

$               10.60

$               35.01

$               23.76

Diluted earnings per share 

$               17.67

$               10.33

$               34.13

$               23.22

Basic weighted average shares outstanding 

4,588

4,999

4,817

5,049

Diluted weighted average shares outstanding 

4,695

5,132

4,942

5,167

 

 

NVR, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share data)

September 30, 2013

December 31, 2012

ASSETS

(Unaudited)

Homebuilding:

Cash and cash equivalents

$                  804,629

$               1,139,103

Receivables

13,137

9,421

Inventory:

Lots and housing units, covered under

sales agreements with customers

750,209

515,498

Unsold lots and housing units

97,102

81,932

Land under development

59,409

68,336

Manufacturing materials and other 

10,350

12,365

917,070

678,131

Assets related to consolidated variable interest entity

9,808

15,626

Contract land deposits, net

218,527

191,538

Property, plant and equipment, net

31,622

27,016

Reorganization value in excess of amounts

allocable to identifiable assets, net

41,580

41,580

Goodwill and finite-lived intangible assets, net

7,520

9,219

Other assets, net

287,485

270,636

2,331,378

2,382,270

Mortgage Banking:

Cash and cash equivalents

6,960

13,498

Mortgage loans held for sale, net

153,928

188,929

Property and equipment, net

4,165

2,465

Reorganization value in excess of amounts

allocable to identifiable assets, net

7,347

7,347

Other assets

15,119

10,333

187,519

222,572

Total assets

$               2,518,897

$               2,604,842

 

 

NVR, Inc.

Consolidated Balance Sheets (Continued)

(in thousands, except share and per share data)

September 30, 2013

December 31, 2012

LIABILITIES AND SHAREHOLDERS' EQUITY

(Unaudited)

Homebuilding:

Accounts payable

$                  221,343

$                  163,446

Accrued expenses and other liabilities

270,750

234,804

Liabilities related to consolidated variable interest entity

2,476

2,180

Non-recourse debt related to consolidated variable

interest entity

559

4,574

Customer deposits

122,227

99,687

Senior notes

599,053

598,988

1,216,408

1,103,679

Mortgage Banking:

Accounts payable and other liabilities

27,395

20,686

27,395

20,686

Total liabilities

1,243,803

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 September 30, 2013 and 

December 31, 2012

206

206

Additional paid-in-capital

1,208,653

1,169,699

Deferred compensation trust – 109,256 and

152,223 shares of NVR, Inc. common

stock as of September 30, 2013 and 

December 31, 2012, respectively

(17,741)

(25,331)

Deferred compensation liability

17,741

25,331

Retained earnings

4,507,746

4,339,080

Less treasury stock at cost – 16,008,428 and

15,642,068 shares at September 30, 2013

and December 31, 2012, respectively

(4,441,511)

(4,028,508)

Total shareholders' equity

1,275,094

1,480,477

    Total liabilities and shareholders' equity

$               2,518,897

$               2,604,842

 

 

NVR, Inc.

Operating Activity

(dollars in thousands)

(Unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

2013

2012

2013

2012

Homebuilding data:

New orders (units)

Mid Atlantic (1)

1,224

1,355

4,611

4,339

North East (2)

265

217

832

712

Mid East (3)

543

576

2,325

2,051

South East (4)

349

410

1,401

1,227

   Total

2,381

2,558

9,169

8,329

Average new order price

$               367.9

$               334.7

$               355.9

$               325.2

Settlements (units)

Mid Atlantic (1)

1,700

1,339

4,331

3,620

North East (2)

264

249

714

665

Mid East (3)

890

682

2,205

1,739

South East (4)

488

386

1,242

1,031

   Total

3,342

2,656

8,492

7,055

Average settlement price

$               349.2

$               321.7

$               342.7

$               311.2

Backlog (units)

Mid Atlantic (1)

2,963

2,692

North East (2)

551

423

Mid East (3)

1,272

1,119

South East (4)

870

716

   Total

5,656

4,950

Average backlog price

$               367.3

$               338.3

Community count (average)

453

412

447

401

Lots controlled at end of period

61,500

55,500

Mortgage banking data:

Loan closings

$           695,930

$           594,867

$        1,816,146

$        1,563,921

Capture rate

79%

86%

82%

87%

Common stock information:

Shares outstanding at end of period

4,546,902

4,874,817

Number of shares repurchased

154,696

276,995

454,782

276,995

Aggregate cost of shares repurchased

$           140,830

$           220,128

$           435,809

$           220,128

(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.