NVR, Inc. Announces Second Quarter Results

Jul 21, 2015, 09:00 ET from NVR, Inc.

RESTON, Va., July 21, 2015 /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, 2015 of $93,395,000 or $21.91 per diluted share. Net income and diluted earnings per share for its second quarter ended June 30, 2015 increased 37% and 44%, respectively, when compared to the 2014 second quarter. Consolidated revenues for the second quarter of 2015 totaled $1,243,633,000, a 13% increase from $1,102,054,000 for the comparable 2014 quarter.

For the six months ended June 30, 2015, consolidated revenues were $2,201,382,000, 15% higher than the $1,913,364,000 reported for the same period of 2014.  Net income for the six months ended June 30, 2015 was $132,453,000, an increase of 44% when compared to the six months ended June 30, 2014.  Diluted earnings per share for the six months ended June 30, 2015 was $31.17, an increase of 54% from $20.19 per diluted share for the comparable period of 2014. 

Homebuilding

New orders in the second quarter of 2015 increased 11% to 3,796 units, when compared to 3,415 units in the second quarter of 2014. The average sales price of new orders increased to $378,300, a 3% increase from the second quarter of 2014.  The cancellation rate in the second quarter of 2015 was 14%, compared to 13% in the second quarter of 2014.  Settlements increased in the second quarter of 2015 to 3,175 units, 8% higher than the second quarter of 2014.  The Company's backlog of homes sold but not settled as of June 30, 2015 increased on a unit basis by 15% to 7,488 units and increased on a dollar basis by 17% to $2,854,613,000 when compared to June 30, 2014.

Homebuilding revenues for the three months ended June 30, 2015 totaled $1,221,111,000, 13% higher than the year earlier period. Gross profit margin increased to 19.2% in the 2015 second quarter compared to 18.6% for the same period in 2014.  Income before tax from the homebuilding segment totaled $137,248,000 in the second quarter of 2015, an increase of 34% when compared to the second quarter of 2014.

Mortgage Banking

Mortgage closed loan production of $859,403,000 for the three months ended June 30, 2015 increased by 27% when compared to the three months ended June 30, 2014. Operating income for the mortgage banking operations during the second quarter of 2015 was $11,436,000, compared to $6,246,000 reported for the second quarter of 2014. Operating income in the second quarter of 2015 was favorably impacted by an increase in capture rate to 89%, compared to 82% in the second quarter of 2014, and improved leveraging of general and administrative expenses.

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) (Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2015

2014

2015

2014

Homebuilding:

Revenues

$

1,221,111

$

1,084,080

$

2,162,649

$

1,883,267

Other income

1,122

452

1,847

1,449

Cost of sales

(986,854)

(882,778)

(1,768,522)

(1,537,930)

Selling, general and administrative

(92,314)

(93,583)

(190,543)

(184,215)

  Operating income

143,065

108,171

205,431

162,571

Interest expense

(5,817)

(5,593)

(11,599)

(11,277)

  Homebuilding income

137,248

102,578

193,832

151,294

Mortgage Banking:

Mortgage banking fees

22,522

17,974

38,733

30,097

Interest income

1,303

825

2,381

2,009

Other income

243

194

348

253

General and administrative

(12,493)

(12,617)

(23,972)

(24,882)

Interest expense

(139)

(130)

(275)

(240)

  Mortgage banking income

11,436

6,246

17,215

7,237

Income before taxes

148,684

108,824

211,047

158,531

Income tax expense

(55,289)

(40,646)

(78,594)

(66,504)

Net income

$

93,395

$

68,178

$

132,453

$

92,027

Basic earnings per share

$

22.97

$

15.68

$

32.61

$

20.88

Diluted earnings per share

$

21.91

$

15.17

$

31.17

$

20.19

Basic weighted average shares outstanding

4,066

4,349

4,062

4,408

Diluted weighted average shares outstanding

4,262

4,495

4,249

4,557

 

 

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

June 30, 2015

December 31, 2014

(Unaudited)

ASSETS

Homebuilding:

Cash and cash equivalents

$

476,493

$

514,780

Receivables

15,987

10,021

    Inventory:

Lots and housing units, covered under

sales agreements with customers

943,970

690,955

Unsold lots and housing units

104,484

131,938

Land under development

25,554

33,689

Building materials and other

11,083

12,904

1,085,091

869,486

Assets related to consolidated variable interest entity

2,902

3,590

Contract land deposits, net

301,848

294,676

Property, plant and equipment, net

45,071

46,242

Reorganization value in excess of amounts

allocable to identifiable assets, net

41,580

41,580

Goodwill and finite-lived intangible assets, net

4,673

5,364

Other assets

303,435

302,280

2,277,080

2,088,019

Mortgage Banking:

Cash and cash equivalents

19,238

30,158

Mortgage loans held for sale, net

265,418

205,664

Property and equipment, net

5,675

6,189

Reorganization value in excess of amounts

7,347

7,347

allocable to identifiable assets, net

Other assets

21,477

13,958

319,155

263,316

Total assets

$

2,596,235

$

2,351,335

LIABILITIES AND SHAREHOLDERS' EQUITY

Homebuilding:

Accounts payable

$

256,521

$

204,622

Accrued expenses and other liabilities

299,553

289,058

Liabilities related to consolidated variable interest entity

1,652

1,618

Non-recourse debt related to consolidated

variable interest entity

64

Customer deposits

138,383

106,755

Senior notes

599,213

599,166

1,295,322

1,201,283

Mortgage Banking:

Accounts payable and other liabilities

26,032

25,797

26,032

25,797

Total liabilities

1,321,354

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 June 30, 2015 and December 31, 2014

206

206

Additional paid-in capital

1,389,725

1,325,495

Deferred compensation trust – 108,614 shares of

NVR, Inc. common stock as of both

June 30, 2015 and December 31, 2014

(17,333)

(17,333)

Deferred compensation liability

17,333

17,333

Retained earnings

5,019,640

4,887,187

Less treasury stock at cost – 16,486,160 and

16,506,229 shares at June 30, 2015 and

December 31, 2014, respectively

(5,134,690)

(5,088,633)

Total shareholders' equity

1,274,881

1,124,255

Total liabilities and shareholders' equity

$

2,596,235

$

2,351,335

 

 

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

Three Months Ended June 30,

Six Months Ended June 30,

2015

2014

2015

2014

Homebuilding data:

New orders (units)

Mid Atlantic (1)

1,910

1,751

3,858

3,426

North East (2)

295

288

632

586

Mid East (3)

962

825

1,956

1,716

South East (4)

629

551

1,276

1,012

Total

3,796

3,415

7,722

6,740

Average new order price

$

378.3

$

368.0

$

376.8

$

368.0

Settlements (units)

Mid Atlantic (1)

1,679

1,547

2,975

2,671

North East (2)

323

271

562

504

Mid East (3)

674

707

1,256

1,185

South East (4)

499

418

916

794

Total

3,175

2,943

5,709

5,154

Average settlement price

$

384.4

$

368.2

$

378.5

$

365.3

Backlog (units)

Mid Atlantic (1)

3,829

3,465

North East (2)

658

577

Mid East (3)

1,850

1,563

South East (4)

1,151

926

Total

7,488

6,531

Average backlog price

$

381.2

$

374.1

Community count (average)

476

494

475

487

Lots controlled at end of period

70,600

67,500

Mortgage banking data:

Loan closings

$

859,403

$

675,625

$

1,498,029

$

1,148,557

Capture rate

89

%

82

%

88

%

80

%

Common stock information:

Shares outstanding at end of period

4,069,170

4,213,174

Number of shares repurchased

4,705

285,362

55,031

317,739

Aggregate cost of shares repurchased

$

6,186

$

314,870

$

69,285

$

347,448

(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.