NVR, INC. RESTON, Va., Oct. 20, 2016 /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, 2016 of $117,392,000, or $28.46 per diluted share. Net income and diluted earnings per share for the third quarter ended September 30, 2016 increased by 1% and 5%, respectively, when compared to the third quarter of 2015. Consolidated revenues for the third quarter of 2016 totaled $1,537,569,000, a 10% increase from $1,402,351,000 for the comparable 2015 quarter.
For the nine months ended September 30, 2016, consolidated revenues were $4,069,778,000, 13% higher than the $3,603,733,000 reported for the same period of 2015. Net income for the nine months ended September 30, 2016 was $274,371,000, an increase of 10% when compared to the nine months ended September 30, 2015. Diluted earnings per share for the nine months ended September 30, 2016 was $66.24, an increase of 14% from $58.32 per diluted share for the comparable period of 2015.
Homebuilding
New orders in the third quarter of 2016 increased 7% to 3,477 units, when compared to 3,258 units in the third quarter of 2015. The average sales price of new orders was $392,800, a 4% increase when compared with the average sales price of new orders in the third quarter of 2015. The cancellation rate in the third quarter of 2016 was 18%, compared to 17% in the third quarter of 2015. Settlements increased in the third quarter of 2016 to 3,922 units, 9% higher than the third quarter of 2015. The Company's backlog of homes sold but not settled as of September 30, 2016 increased on a unit basis by 7% to 7,658 units and increased on a dollar basis by 10% to $2,981,894,000 when compared to September 30, 2015.
Homebuilding revenues for the three months ended September 30, 2016 totaled $1,507,451,000, 10% higher than the year earlier period. Gross profit margin decreased to 17.6% in the 2016 third quarter compared to 19.1% for the same period in 2015. Income before tax from the homebuilding segment totaled $167,657,000 in the third quarter of 2016, a 1% decrease compared to the third quarter of 2015.
Mortgage Banking
Mortgage closed loan production of $1,055,163,000 for the third quarter ended September 30, 2016 increased by 11% when compared to the third quarter ended September 30, 2015. Operating income for the mortgage banking operations during the third quarter of 2016 increased 8% to $17,346,000, compared to $16,122,000 reported for the third quarter of 2015.
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 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 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,
-------------------------------- -------------------------------
2016 2015 2016 2015
---- ---- ---- ----
Homebuilding:
Revenues $1,507,451 $1,374,467 $3,990,696 $3,537,116
Other income 703 643 2,223 2,490
Cost of sales (1,242,292) (1,111,672) (3,294,421) (2,880,194)
Selling, general and administrative (92,867) (88,664) (290,925) (279,207)
------- ------- -------- --------
Operating income 172,995 174,774 407,573 380,205
Interest expense (5,338) (5,900) (14,734) (17,499)
------ ------ ------- -------
Homebuilding income 167,657 168,874 392,839 362,706
------- ------- ------- -------
Mortgage Banking:
Mortgage banking fees 30,118 27,884 79,082 66,617
Interest income 2,000 1,972 5,111 4,353
Other income 473 363 1,140 711
General and administrative (14,959) (13,916) (44,345) (37,888)
Interest expense (286) (181) (792) (456)
---- ---- ---- ----
Mortgage banking income 17,346 16,122 40,196 33,337
------ ------ ------ ------
Income before taxes 185,003 184,996 433,035 396,043
Income tax expense (67,611) (68,526) (158,664) (147,120)
------- ------- -------- --------
Net income $117,392 $116,470 $274,371 $248,923
======== ======== ======== ========
Basic earnings per share $30.43 $28.75 $70.70 $61.34
====== ====== ====== ======
Diluted earnings per share $28.46 $27.11 $66.24 $58.32
====== ====== ====== ======
Basic weighted average shares outstanding 3,858 4,050 3,881 4,058
===== ===== ===== =====
Diluted weighted average shares
outstanding 4,125 4,296 4,142 4,268
===== ===== ===== =====
NVR, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share data)
(Unaudited)
September 30, 2016 December 31, 2015
------------------ -----------------
ASSETS
Homebuilding:
Cash and cash equivalents $249,728 $397,522
Receivables 13,921 11,482
Inventory:
Lots and housing units, covered under sales
agreements with customers 1,107,919 785,982
Unsold lots and housing units 134,626 147,832
Land under development 62,327 60,611
Building materials and other 11,858 12,101
------ ------
1,316,730 1,006,526
Assets related to consolidated variable interest
entity 1,247 1,749
Contract land deposits, net 377,496 343,295
Property, plant and equipment, net 45,321 44,651
Reorganization value in excess of amounts
allocable to identifiable assets, net 41,580 41,580
Goodwill and finite-lived intangible assets, net 2,945 3,982
Other assets 280,245 281,381
------- -------
2,329,213 2,132,168
--------- ---------
Mortgage Banking:
Cash and cash equivalents 11,490 26,804
Mortgage loans held for sale, net 291,303 319,553
Property and equipment, net 5,085 5,313
Reorganization value in excess of amounts
allocable to identifiable assets, net 7,347 7,347
Other assets 18,778 20,533
------ ------
334,003 379,550
------- -------
Total assets $2,663,216 $2,511,718
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Homebuilding:
Accounts payable $281,530 $227,437
Accrued expenses and other liabilities 309,939 304,922
Liabilities related to consolidated variable
interest entity 877 1,091
Customer deposits 144,697 110,965
Senior notes 596,303 595,847
------- -------
1,333,346 1,240,262
--------- ---------
Mortgage Banking:
Accounts payable and other liabilities 30,731 32,291
------ ------
30,731 32,291
------ ------
Total liabilities 1,364,077 1,272,553
--------- ---------
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, 2016 and December 31, 2015 206 206
Additional paid-in capital 1,499,770 1,447,795
Deferred compensation trust - 108,635 and
108,614 shares of NVR, Inc. common stock as of
September 30, 2016 and December 31, 2015,
respectively (17,367) (17,333)
Deferred compensation liability 17,367 17,333
Retained earnings 5,544,485 5,270,114
Less treasury stock at cost - 16,766,035 and
16,664,342 shares as of September 30, 2016 and
December 31, 2015, respectively (5,745,322) (5,478,950)
---------- ----------
Total shareholders' equity 1,299,139 1,239,165
--------- ---------
Total liabilities and shareholders' equity $2,663,216 $2,511,718
========== ==========
NVR, Inc.
Operating Activity
(dollars in thousands)
(Unaudited)
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
2016 2015 2016 2015
---- ---- ---- ----
Homebuilding data:
New orders (units)
Mid Atlantic (1) 1,817 1,662 6,088 5,520
North East (2) 305 304 960 936
Mid East (3) 769 730 2,829 2,686
South East (4) 586 562 2,061 1,838
--- --- ----- -----
Total 3,477 3,258 11,938 10,980
===== ===== ====== ======
Average new order price $392.8 $378.9 $383.6 $377.4
Settlements (units)
Mid Atlantic (1) 1,984 1,795 5,201 4,770
North East (2) 330 337 896 899
Mid East (3) 1,013 915 2,708 2,171
South East (4) 595 560 1,704 1,476
--- --- ----- -----
Total 3,922 3,607 10,509 9,316
===== ===== ====== =====
Average settlement price $384.1 $380.4 $378.0 $379.2
Backlog (units)
Mid Atlantic (1) 4,024 3,696
North East (2) 604 625
Mid East (3) 1,619 1,665
South East (4) 1,411 1,153
----- -----
Total 7,658 7,139
===== =====
Average backlog price $389.4 $380.6
Community count (average) 484 469 482 473
Lots controlled at end of period 77,300 73,000
Mortgage banking data:
Loan closings $1,055,163 $951,872 $2,751,410 $2,449,902
Capture rate 88% 88% 88% 88%
Common stock information:
Shares outstanding at end of period 3,789,295 3,982,106
Number of shares repurchased 116,318 128,097 178,306 183,128
Aggregate cost of shares repurchased $195,235 $194,161 $291,743 $263,446
(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.
