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
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SOURCE NVR, Inc.
