NVR, INC. 
By RESTON, Va., April 21, 2014 /PRNewswire/ -- NVR, Inc. (NYSE: NVR), one of the nation's largest homebuilding and mortgage banking companies, announced net income for its first quarter ended March 31, 2014 of $23,849,000 or $5.16 per diluted share. Net income and diluted earnings per share for its first quarter ended March 31, 2014 decreased 32% and 25%, respectively, when compared to the 2013 first quarter. Consolidated revenues for the first quarter of 2014 totaled $811,310,000, a 5% increase from $770,256,000 for the comparable 2013 quarter. Income tax expense for the quarter was negatively impacted by $6,879,000 due to the reversal of certain previously recognized tax deductions.
Homebuilding
New orders in the first quarter of 2014 decreased 5% to 3,325 units, when compared to 3,510 units in the first quarter of 2013. The cancellation rate in the first quarter of 2014 was 12% compared to 13% in the first quarter of 2013 and 14% in the fourth quarter of 2013. Settlements decreased in the first quarter of 2014 to 2,211 units, 3% lower than the first quarter of 2013. The Company's backlog of homes sold but not settled as of March 31, 2014 decreased on a unit basis by 3% to 6,059 units, but increased on a dollar basis by 4% to $2,270,474,000 when compared to March 31, 2013.
Homebuilding revenues for the three months ended March 31, 2014 totaled $799,187,000, 6% higher than the year earlier period. Gross profit margins increased to 18.0% in the 2014 first quarter compared to 16.9% for the same period in 2013. The increase in selling, general and administrative expenses was primarily due to higher personnel and selling expenses associated with the increase in the number of communities. Income before tax from the homebuilding segment totaled $48,716,000 in the first quarter of 2014, an increase of 11% when compared to the first quarter of 2013.
Mortgage Banking
Mortgage closed loan production of $472,933,000 for the three months ended March 31, 2014 was flat when compared to the first quarter ended March 31, 2013. Operating income for the mortgage banking operations during the first quarter of 2014 decreased 91% to $991,000, when compared to $11,161,000 reported for the first quarter of 2013. Operating income in the first quarter of 2014 was negatively impacted by a more competitive mortgage lending market, resulting in reduced loan profitability. In addition, general and administrative expenses were higher due to increased staffing in response to increased mortgage regulations and expected higher loan volume.
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); 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 March
31,
-------------
2014 2013
---- ----
Homebuilding:
Revenues $799,187 $750,868
Other income 997 1,026
Cost of
sales (655,152) (624,085)
Selling,
general and
administrative (90,632) (78,413)
------- -------
Operating income 54,400 49,396
Interest
expense (5,684) (5,452)
------ ------
Homebuilding income 48,716 43,944
------ ------
Mortgage Banking:
Mortgage
banking
fees 12,123 19,388
Interest
income 1,184 955
Other income 59 113
General and
administrative (12,265) (9,181)
Interest
expense (110) (114)
---- ----
Mortgage banking income 991 11,161
--- ------
Income before taxes 49,707 55,105
Income tax expense (25,858) (20,064)
------- -------
Net income $23,849 $35,041
======= =======
Basic earnings per share $5.34 $7.04
===== =====
Diluted earnings per share $5.16 $6.84
===== =====
Basic weighted average shares outstanding 4,467 4,979
===== =====
Diluted weighted average shares outstanding 4,620 5,122
===== =====
NVR, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share data)
March 31, 2014 December 31, 2013
-------------- -----------------
ASSETS (Unaudited)
Homebuilding:
Cash and cash
equivalents $874,062 $844,274
Receivables 10,055 9,529
Inventory:
Lots and
housing
units,
covered
under
sales agreements with
customers 687,080 568,831
Unsold lots
and
housing
units 98,478 117,467
Land under
development 46,083 41,328
Building
materials
and other 10,357 10,939
------ ------
841,998 738,565
Assets
related to
consolidated
variable
interest
entity 6,588 7,268
Contract land
deposits,
net 246,204 236,885
Property,
plant and
equipment,
net 34,321 32,599
Reorganization
value in
excess of
amounts
allocable
to
identifiable
assets,
net 41,580 41,580
Goodwill and
finite-
lived
intangible
assets, net 6,401 6,747
Other assets 311,684 307,933
2,372,893 2,225,380
--------- ---------
Mortgage Banking:
Cash and cash
equivalents 4,477 21,311
Mortgage
loans held
for sale,
net 123,833 210,641
Property and
equipment,
net 4,999 4,699
Reorganization
value in
excess of
amounts
allocable
to
identifiable
assets,
net 7,347 7,347
Other assets 11,204 16,770
151,860 260,768
------- -------
Total assets $2,524,753 $2,486,148
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Homebuilding:
Accounts
payable $186,459 $181,687
Accrued
expenses and
other
liabilities 271,875 316,227
Liabilities
related to
consolidated
variable
interest
entity 1,689 1,646
Non-recourse
debt related
to
consolidated
variable
interest entity 2,153 3,365
Customer
deposits 119,101 101,022
Senior notes 599,098 599,075
1,180,375 1,203,022
--------- ---------
Mortgage Banking:
Accounts
payable and
other
liabilities 18,296 21,774
18,296 21,774
------ ------
Total liabilities 1,198,671 1,224,796
--------- ---------
Commitments and contingencies
Shareholders' equity:
Common stock,
$0.01 par
value;
60,000,000
shares
authorized; 20,555,330 shares issued
as of
both March 31, 2014 and December 31,
2013 206 206
Additional
paid-in-
capital 1,259,410 1,212,050
Deferred
compensation
trust -
109,256
shares of
NVR, Inc. common stock as of both
March 31, 2014 and December 31, 2013 (17,741) (17,741)
Deferred
compensation
liability 17,741 17,741
Retained
earnings 4,629,406 4,605,557
Less treasury
stock at cost
- 16,061,912
and
16,121,605 shares at March 31, 2014
and December 31, 2013, respectively (4,562,940) (4,556,461)
--------- ---------
Total shareholders' equity 1,326,082 1,261,352
--------- ---------
Total liabilities and shareholders'
equity $2,524,753 $2,486,148
========== ==========
NVR, Inc.
Operating Activity
(dollars in thousands)
(Unaudited)
Three Months
Ended March 31,
----------------
2014 2013
---- ----
Homebuilding data:
New orders (units)
Mid Atlantic (1) 1,675 1,716
North East (2) 298 293
Mid East (3) 891 949
South East (4) 461 552
Total 3,325 3,510
===== =====
Average new
order price $368.1 $343.0
Settlements (units)
Mid Atlantic (1) 1,124 1,138
North East (2) 233 191
Mid East (3) 478 593
South East (4) 376 350
Total 2,211 2,272
===== =====
Average
settlement
price $361.4 $330.4
Backlog (units)
Mid Atlantic (1) 3,261 3,261
North East (2) 560 535
Mid East (3) 1,445 1,508
South East (4) 793 913
Total 6,059 6,217
===== =====
Average
backlog
price $374.7 $350.6
Community
count
(average) 481 435
Lots
controlled
at end of
period 65,800 59,700
Mortgage banking data:
Loan
closings $472,933 $473,766
Capture rate 78% 84%
Common stock information:
Shares
outstanding
at end of
period 4,493,418 4,996,884
Number of
shares
repurchased 32,377 -
Aggregate
cost of
shares
repurchased $32,578 $ -
(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.
