NVR, INC. RESTON, Va., July 21, 2014 /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, 2014 of $68,178,000,or $15.17 per diluted share. Net income and diluted earnings per share for its second quarter ended June 30, 2014 increased 34% and 50%, respectively, when compared to the 2013 second quarter. Consolidated revenues for the second quarter of 2014 totaled $1,102,054,000, a 9% increase from $1,009,892,000 for the comparable 2013 quarter.
For the six months ended June 30, 2014, consolidated revenues were $1,913,364,000, 7% higher than the $1,780,148,000 reported for the same period of 2013. Net income for the six months ended June 30, 2014 was $92,027,000, an increase of 7% when compared to the six months ended June 30, 2013. Diluted earnings per share for the six months ended June 30, 2014 was $20.19, an increase of 19% from $16.92 per diluted share for the comparable period of 2013.
Homebuilding
New orders in the second quarter of 2014 increased 4% to 3,415 units when compared to 3,278 units in the second quarter of 2013. The cancellation rate in the second quarter of 2014 was 13% compared to 14% in the second quarter of 2013 and 12% in the first quarter of 2014. Settlements increased in the second quarter of 2014 to 2,943 units, 2% higher than the same period in 2013. The Company's backlog of homes sold but not settled as of June 30, 2014 decreased on a unit basis by 1% to 6,531 units, but increased on a dollar basis by 3% to $2,443,238,000 when compared to June 30, 2013.
Homebuilding revenues for the three months ended June 30, 2014 totaled $1,084,080,000, 9% higher than the year earlier period. Gross profit margin in the second quarter of 2014 was 18.6% compared to 15.9% in the second quarter of 2013. Gross profit margin in the second quarter of 2013 was negatively impacted by a previously disclosed service related accrual which reduced gross profit margin by 157 basis points of revenue. Income before tax from the homebuilding segment totaled $102,578,000 in the 2014 second quarter, an increase of 43% when compared to the second quarter of 2013.
Mortgage Banking
Mortgage closed loan production of $675,625,000 for the three months ended June 30, 2014 was 5% higher than the same period last year. Operating income for the mortgage banking operations during the second quarter of 2014 decreased 27% to $6,246,000, when compared to $8,518,000 reported for the same period of 2013.
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 June 30, Six Months Ended June 30,
--------------------------- -------------------------
2014 2013 2014 2013
---- ---- ---- ----
Homebuilding:
Revenues $1,084,080 $992,210 $1,883,267 $1,743,078
Other income 452 1,098 1,449 2,124
Cost of sales (882,778) (834,288) (1,537,930) (1,458,373)
Selling, general and
administrative (93,583) (82,120) (184,215) (160,533)
--------------
Operating income 108,171 76,900 162,571 126,296
Interest expense (5,593) (5,237) (11,277) (10,689)
--------------
Homebuilding income 102,578 71,663 151,294 115,607
------- ------ ------- -------
Mortgage Banking:
Mortgage banking fees 17,974 17,682 30,097 37,070
Interest income 825 1,047 2,009 2,002
Other income 194 178 253 291
General and administrative (12,617) (10,252) (24,882) (19,433)
Interest expense (130) (137) (240) (251)
--------------
Mortgage banking income 6,246 8,518 7,237 19,679
----- ----- ----- ------
Income before taxes 108,824 80,181 158,531 135,286
Income tax expense (40,646) (29,491) (66,504) (49,555)
------- ------- ------- -------
Net income $68,178 $50,690 $92,027 $85,731
======= ======= ======= =======
Basic earnings per share $15.68 $10.37 $20.88 $17.38
====== ====== ====== ======
Diluted earnings per share $15.17 $10.11 $20.19 $16.92
====== ====== ====== ======
Basic weighted average shares outstanding 4,349 4,889 4,408 4,934
===== ===== ===== =====
Diluted weighted average shares outstanding 4,495 5,013 4,557 5,067
===== ===== ===== =====
NVR, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share data)
June 30, 2014 December 31, 2013
------------- -----------------
ASSETS (Unaudited)
Homebuilding:
Cash and cash
equivalents $538,940 $844,274
Receivables 15,196 9,529
Inventory:
Lots and
housing
units,
covered under
sales agreements with
customers 788,848 568,831
Unsold lots
and housing
units 89,275 117,467
Land under
development 63,789 41,328
Building
materials and
other 10,593 10,939
------ ------
952,505 738,565
Assets related to
consolidated
variable interest
entity 6,802 7,268
Contract land
deposits, net 253,808 236,885
Property, plant
and equipment,
net 44,252 32,599
Reorganization
value in excess
of amounts
allocable to
identifiable
assets, net 41,580 41,580
Goodwill and
finite-lived
intangible
assets, net 6,055 6,747
Other assets 311,060 307,933
2,170,198 2,225,380
--------- ---------
Mortgage Banking:
Cash and cash
equivalents 12,919 21,311
Mortgage loans
held for sale,
net 170,470 210,641
Property and
equipment, net 6,433 4,699
Reorganization
value in excess
of amounts
allocable to
identifiable
assets, net 7,347 7,347
Other assets 14,696 16,770
211,865 260,768
------- -------
Total assets $2,382,063 $2,486,148
========== ==========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Homebuilding:
Accounts payable $231,633 $181,687
Accrued expenses
and other
liabilities 296,045 316,227
Liabilities related
to consolidated
variable interest
entity 2,277 1,646
Non-recourse debt
related to
consolidated
variable
interest entity 1,258 3,365
Customer deposits 128,320 101,022
Senior notes 599,120 599,075
1,258,653 1,203,022
--------- ---------
Mortgage Banking:
Accounts payable
and other
liabilities 24,195 21,774
24,195 21,774
------ ------
Total liabilities 1,282,848 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 June 30, 2014 and December 31,
2013 206 206
Additional paid-
in-capital 1,277,755 1,212,050
Deferred
compensation
trust - 109,256
shares of
NVR, Inc. common stock as of both
June 30, 2014 and December 31, 2013 (17,741) (17,741)
Deferred
compensation
liability 17,741 17,741
Retained earnings 4,697,584 4,605,557
Less treasury
stock at cost -
16,342,156 and
16,121,605 shares at June 30, 2014
and December 31, 2013, respectively (4,876,330) (4,556,461)
---------- ----------
Total shareholders' equity 1,099,215 1,261,352
--------- ---------
Total liabilities and shareholders'
equity $2,382,063 $2,486,148
========== ==========
NVR, Inc.
Operating Activity
(dollars in thousands)
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- -------------------------
2014 2013 2014 2013
---- ---- ---- ----
Homebuilding data:
New orders (units)
Mid Atlantic (1) 1,751 1,671 3,426 3,387
North East (2) 288 274 586 567
Mid East (3) 825 833 1,716 1,782
South East (4) 551 500 1,012 1,052
Total 3,415 3,278 6,740 6,788
===== ===== ===== =====
Average new order
price $368.0 $361.1 $368.0 $351.8
Settlements
(units)
Mid Atlantic (1) 1,547 1,493 2,671 2,631
North East (2) 271 259 504 450
Mid East (3) 707 722 1,185 1,315
South East (4) 418 404 794 754
Total 2,943 2,878 5,154 5,150
===== ===== ===== =====
Average settlement
price $368.2 $344.7 $365.3 $338.4
Backlog (units)
Mid Atlantic (1) 3,465 3,439
North East (2) 577 550
Mid East (3) 1,563 1,619
South East (4) 926 1,009
Total 6,531 6,617
===== =====
Average backlog
price $374.1 $358.6
Community count
(average) 494 452 487 444
Lots controlled at
end of period 67,500 61,200
Mortgage banking data:
Loan closings $675,625 $646,450 $1,148,557 $1,120,216
Capture rate 82% 85% 80% 84%
Common stock information:
Shares outstanding
at end of period 4,213,174 4,699,992
Number of shares
repurchased 285,362 300,086 317,739 300,086
Aggregate cost of
shares
repurchased $314,870 $294,979 $347,448 $294,979
(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.
