NVR, INC. 
RESTON, Va., Oct. 20, 2014 /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, 2014 of $90,152,000, or $20.70 per diluted share. Net income and diluted earnings per share for its third quarter ended September 30, 2014 increased 9% and 17%, respectively, when compared to the 2013 third quarter. Consolidated revenues for the third quarter of 2014 totaled $1,203,166,000, a 1% increase from $1,188,967,000 for the comparable 2013 quarter.
For the nine months ended September 30, 2014, consolidated revenues were $3,116,530,000, 5% higher than the $2,969,115,000 reported for the same period of 2013. Net income for the nine months ended September 30, 2014 was $182,179,000, an increase of 8% when compared to the nine months ended September 30, 2013. Diluted earnings per share for the nine months ended September 30, 2014 was $40.59, an increase of 19% from $34.13 per diluted share for the comparable period of 2013.
Homebuilding
New orders in the third quarter of 2014 increased 23% to 2,936 units when compared to 2,381 units in the third quarter of 2013. The cancellation rate in the third quarter of 2014 was 16% compared to 19% in the third quarter of 2013 and 13% in the second quarter of 2014. Settlements in the third quarter of 2014 decreased 3% to 3,236 units when compared to the same period in 2013. The Company's backlog of homes sold but not settled as of September 30, 2014 increased on a unit basis by 10% to 6,231 units, and increased on a dollar basis by 14% to $2,360,730,000 when compared to September 30, 2013.
Homebuilding revenues for the three months ended September 30, 2014 totaled $1,185,160,000, 2% higher than the year earlier period. Gross profit margin in the third quarter of 2014 was 19.0% compared to 17.4% in the third quarter of 2013. Income before tax from the homebuilding segment totaled $136,511,000 in the 2014 third quarter, an increase of 14% when compared to the third quarter of 2013.
Mortgage Banking
Mortgage closed loan production of $803,125,000 for the three months ended September 30, 2014 was 15% higher than the same period last year. Operating income for the mortgage banking operations during the third quarter of 2014 decreased 38% to $7,280,000, when compared to $11,803,000 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 September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
2014 2013 2014 2013
---- ---- ---- ----
Homebuilding:
Revenues $1,185,160 $1,167,595 $3,068,427 $2,910,673
Other income 905 1,030 2,354 3,154
Cost of sales (960,055) (964,416) (2,497,985) (2,422,789)
Selling, general and administrative (83,881) (78,897) (268,096) (239,430)
----------------
Operating income 142,129 125,312 304,700 251,608
Interest expense (5,618) (5,525) (16,895) (16,214)
----------------
Homebuilding income 136,511 119,787 287,805 235,394
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Mortgage Banking:
Mortgage banking fees 18,006 21,372 48,103 58,442
Interest income 1,373 1,396 3,382 3,398
Other income 240 218 493 509
General and administrative (12,182) (11,026) (37,064) (30,459)
Interest expense (157) (157) (397) (408)
----------------
Mortgage banking income 7,280 11,803 14,517 31,482
----- ------ ------ ------
Income before taxes 143,791 131,590 302,322 266,876
Income tax expense (53,639) (48,655) (120,143) (98,210)
------- ------- -------- -------
Net income $90,152 $82,935 $182,179 $168,666
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Basic earnings per share $21.49 $18.08 $42.01 $35.01
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Diluted earnings per share $20.70 $17.67 $40.59 $34.13
====== ====== ====== ======
Basic weighted average shares outstanding 4,196 4,588 4,336 4,817
===== ===== ===== =====
Diluted weighted average shares outstanding 4,354 4,695 4,489 4,942
===== ===== ===== =====
NVR, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share data)
September 30, 2014 December 31, 2013
------------------ -----------------
ASSETS (Unaudited)
Homebuilding:
Cash and cash equivalents $455,387 $844,274
Receivables 11,465 9,529
Inventory:
Lots and housing units, covered under
sales agreements with customers 837,626 568,831
Unsold lots and housing units 108,879 117,467
Land under development 55,668 41,328
Building materials and other 11,560 10,939
1,013,733 738,565
Assets related to consolidated variable
interest entity 6,232 7,268
Contract land deposits, net 283,579 236,885
Property, plant and equipment, net 46,365 32,599
Reorganization value in excess of amounts
allocable to identifiable assets, net 41,580 41,580
Goodwill and finite-lived intangible
assets, net 5,710 6,747
Other assets 316,189 307,933
2,180,240 2,225,380
--------- ---------
Mortgage Banking:
Cash and cash equivalents 8,308 21,311
Mortgage loans held for sale, net 198,597 210,641
Property and equipment, net 6,459 4,699
Reorganization value in excess of amounts
allocable to identifiable assets, net 7,347 7,347
Other assets 12,125 16,770
232,836 260,768
------- -------
Total assets $2,413,076 $2,486,148
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Homebuilding:
Accounts payable $227,936 $181,687
Accrued expenses and other liabilities 289,696 316,227
Liabilities related to consolidated variable
interest entity 2,320 1,646
Non-recourse debt related to consolidated
variable
interest entity 661 3,365
Customer deposits 119,423 101,022
Senior notes 599,143 599,075
1,239,179 1,203,022
--------- ---------
Mortgage Banking:
Accounts payable and other liabilities 22,503 21,774
22,503 21,774
------ ------
Total liabilities 1,261,682 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 September 30, 2014 and December 31, 2013 206 206
Additional paid-in-capital 1,299,533 1,212,050
Deferred compensation trust - 108,614 and
109,256 shares of NVR, Inc. common stock as of
September 30, 2014 and December 31, 2013, respectively (17,333) (17,741)
Deferred compensation liability 17,333 17,741
Retained earnings 4,787,736 4,605,557
Less treasury stock at cost - 16,388,669 and
16,121,605 shares at September 30, 2014
and December 31, 2013, respectively (4,936,081) (4,556,461)
---------- ----------
Total shareholders' equity 1,151,394 1,261,352
--------- ---------
Total liabilities and shareholders' equity $2,413,076 $2,486,148
========== ==========
NVR, Inc.
Operating Activity
(dollars in thousands)
(Unaudited)
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
2014 2013 2014 2013
---- ---- ---- ----
Homebuilding data:
New orders (units)
Mid Atlantic (1) 1,504 1,224 4,930 4,611
North East (2) 310 265 896 832
Mid East (3) 653 543 2,369 2,325
South East (4) 469 349 1,481 1,401
Total 2,936 2,381 9,676 9,169
===== ===== ===== =====
Average new order price $375.5 $367.9 $370.3 $355.9
Settlements (units)
Mid Atlantic (1) 1,650 1,700 4,321 4,331
North East (2) 276 264 780 714
Mid East (3) 827 890 2,012 2,205
South East (4) 483 488 1,277 1,242
Total 3,236 3,342 8,390 8,492
===== ===== ===== =====
Average settlement price $366.2 $349.2 $365.6 $342.7
Backlog (units)
Mid Atlantic (1) 3,319 2,963
North East (2) 611 551
Mid East (3) 1,389 1,272
South East (4) 912 870
Total 6,231 5,656
===== =====
Average backlog price $378.9 $367.3
Community count (average) 493 453 489 447
Lots controlled at end of
period 68,500 61,500
Mortgage banking data:
Loan closings $803,125 $695,930 $1,951,682 $1,816,146
Capture rate 86% 79% 83% 82%
Common stock information:
Shares outstanding at end of
period 4,166,661 4,546,902
Number of shares repurchased 53,988 154,696 371,727 454,782
Aggregate cost of shares
repurchased $61,989 $140,830 $409,436 $435,809
(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.
