NVR, INC. 
RESTON, Va., Oct. 20, 2015 /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, 2015 of $116,470,000, or $27.11 per diluted share. Net income and diluted earnings per share for the third quarter ended September 30, 2015 increased 29% and 31%, respectively, when compared to the 2014 third quarter. Consolidated revenues for the third quarter of 2015 totaled $1,402,351,000, a 17% increase from $1,203,166,000 for the comparable 2014 quarter.
For the nine months ended September 30, 2015, consolidated revenues were $3,603,733,000, 16% higher than the $3,116,530,000 reported for the same period of 2014. Net income for the nine months ended September 30, 2015 was $248,923,000, an increase of 37% when compared to the nine months ended September 30, 2014. Diluted earnings per share for the nine months ended September 30, 2015 was $58.32, an increase of 44% from $40.59 per diluted share for the comparable period of 2014.
Homebuilding
New orders in the third quarter of 2015 increased 11% to 3,258 units, when compared to 2,936 units in the third quarter of 2014. The average sales price of new orders in the third quarter of 2015 was $378,900, an increase of 1% when compared with the third quarter of 2014. Settlements increased in the third quarter of 2015 to 3,607 units, 11% higher than the third quarter of 2014. The Company's backlog of homes sold but not settled as of September 30, 2015 increased 15% on both a unit and dollar basis to 7,139 units and $2,716,947,000 when compared to September 30, 2014.
Homebuilding revenues for the three months ended September 30, 2015 totaled $1,374,467,000, 16% higher than the year earlier period. Gross profit margin was 19.1% in the 2015 third quarter, which was flat when compared to the same period in 2014. Income before tax from the homebuilding segment totaled $168,874,000 in the third quarter of 2015, an increase of 24% when compared to the third quarter of 2014.
Mortgage Banking
Mortgage closed loan production of $951,872,000 for the three months ended September 30, 2015 increased by 19% when compared to the three months ended September 30, 2014. Operating income for the mortgage banking operations during the third quarter of 2015 was $16,122,000, compared to $7,280,000 reported for the third quarter of 2014. Operating income was favorably impacted by 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 September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
2015 2014 2015 2014
---- ---- ---- ----
Homebuilding:
Revenues $1,374,467 $1,185,160 $3,537,116 $3,068,427
Other income 643 905 2,490 2,354
Cost of sales (1,111,672) (960,055) (2,880,194) (2,497,985)
Selling, general and administrative (88,664) (83,881) (279,207) (268,096)
------- ------- -------- --------
Operating income 174,774 142,129 380,205 304,700
Interest expense (5,900) (5,618) (17,499) (16,895)
------ ------ ------- -------
Homebuilding income 168,874 136,511 362,706 287,805
------- ------- ------- -------
Mortgage Banking:
Mortgage banking fees 27,884 18,006 66,617 48,103
Interest income 1,972 1,373 4,353 3,382
Other income 363 240 711 493
General and administrative (13,916) (12,182) (37,888) (37,064)
Interest expense (181) (157) (456) (397)
---- ---- ---- ----
Mortgage banking income 16,122 7,280 33,337 14,517
------ ----- ------ ------
Income before taxes 184,996 143,791 396,043 302,322
Income tax expense (68,526) (53,639) (147,120) (120,143)
------- ------- -------- --------
Net income $116,470 $90,152 $248,923 $182,179
======== ======= ======== ========
Basic earnings per share $28.75 $21.49 $61.34 $42.01
====== ====== ====== ======
Diluted earnings per share $27.11 $20.70 $58.32 $40.59
====== ====== ====== ======
Basic weighted average shares outstanding 4,050 4,196 4,058 4,336
===== ===== ===== =====
Diluted weighted average shares outstanding 4,296 4,354 4,268 4,489
===== ===== ===== =====
NVR, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share data)
September 30, 2015 December 31, 2014
------------------ -----------------
(Unaudited)
ASSETS
Homebuilding:
Cash and cash equivalents $375,886 $514,780
Receivables 9,850 10,021
Inventory:
Lots and housing units, covered under
sales agreements with customers 987,933 690,955
Unsold lots and housing units 110,589 131,938
Land under development 53,203 33,689
Building materials and other 9,730 12,904
----- ------
1,161,455 869,486
Assets related to consolidated variable interest entity 1,799 3,590
Contract land deposits, net 318,588 294,676
Property, plant and equipment, net 44,911 46,242
Reorganization value in excess of amounts
allocable to identifiable assets, net 41,580 41,580
Goodwill and finite-lived intangible assets, net 4,327 5,364
Other assets 305,918 302,280
------- -------
2,264,314 2,088,019
--------- ---------
Mortgage Banking:
Cash and cash equivalents 10,407 30,158
Mortgage loans held for sale, net 260,074 205,664
Property and equipment, net 5,502 6,189
Reorganization value in excess of amounts
allocable to identifiable assets, net 7,347 7,347
Other assets 23,038 13,958
------ ------
306,368 263,316
------- -------
Total assets $2,570,682 $2,351,335
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Homebuilding:
Accounts payable $260,941 $204,622
Accrued expenses and other liabilities 301,594 289,058
Liabilities related to consolidated variable interest entity 1,619 1,618
Non-recourse debt related to consolidated
variable interest entity - 64
Customer deposits 132,072 106,755
Senior notes 599,237 599,166
------- -------
1,295,463 1,201,283
--------- ---------
Mortgage Banking:
Accounts payable and other liabilities 34,729 25,797
------ ------
34,729 25,797
------ ------
Total liabilities 1,330,192 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 September 30, 2015 and December 31, 2014 206 206
Additional paid-in capital 1,420,214 1,325,495
Deferred compensation trust - 108,614 shares of
NVR, Inc. common stock as of both
September 30, 2015 and December 31, 2014 (17,333) (17,333)
Deferred compensation liability 17,333 17,333
Retained earnings 5,136,110 4,887,187
Less treasury stock at cost - 16,573,224 and
16,506,229 shares at September 30, 2015 and
December 31, 2014, respectively (5,316,040) (5,088,633)
---------- ----------
Total shareholders' equity 1,240,490 1,124,255
--------- ---------
Total liabilities and shareholders' equity $2,570,682 $2,351,335
========== ==========
NVR, Inc.
Operating Activity
(dollars in thousands)
(Unaudited)
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
2015 2014 2015 2014
---- ---- ---- ----
Homebuilding data:
New orders (units)
Mid Atlantic (1) 1,662 1,504 5,520 4,930
North East (2) 304 310 936 896
Mid East (3) 730 653 2,686 2,369
South East (4) 562 469 1,838 1,481
--- --- ----- -----
Total 3,258 2,936 10,980 9,676
===== ===== ====== =====
Average new order price $378.9 $375.5 $377.4 $370.3
Settlements (units)
Mid Atlantic (1) 1,795 1,650 4,770 4,321
North East (2) 337 276 899 780
Mid East (3) 915 827 2,171 2,012
South East (4) 560 483 1,476 1,277
--- --- ----- -----
Total 3,607 3,236 9,316 8,390
===== ===== ===== =====
Average settlement price $380.4 $366.2 $379.2 $365.6
Backlog (units)
Mid Atlantic (1) 3,696 3,319
North East (2) 625 611
Mid East (3) 1,665 1,389
South East (4) 1,153 912
----- ---
Total 7,139 6,231
===== =====
Average backlog price $380.6 $378.9
Community count (average) 469 493 473 489
Lots controlled at end of period 73,000 68,500
Mortgage banking data:
Loan closings $951,872 $803,125 $2,449,902 $1,951,682
Capture rate 88% 86% 88% 83%
Common stock information:
Shares outstanding at end of period 3,982,106 4,166,661
Number of shares repurchased 128,097 53,988 183,128 371,727
Aggregate cost of shares repurchased $194,161 $61,989 $263,446 $409,436
(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.
