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Press release from PR Newswire

NVR, Inc. Announces Second Quarter Results

Monday, July 22, 2013

NVR, Inc. Announces Second Quarter Results

08:50 EDT Monday, July 22, 2013

RESTON, Va., July 22, 2013 /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, 2013 of $50,690,000, $10.11 per diluted share.  Net income and diluted earnings per share for its second quarter ended June 30, 2013 increased 8% and 13%, respectively, when compared to the 2012 second quarter.  Consolidated revenues for the second quarter of 2013 totaled $1,009,892,000, a 31% increase from $769,783,000 for the comparable 2012 quarter.

For the six months ended June 30, 2013, consolidated revenues were $1,780,148,000, 30% higher than the $1,370,275,000 reported for the same period of 2012.  Net income for the six months ended June 30, 2013 was $85,731,000, an increase of 28% when compared to the six months ended June 30, 2012.  Diluted earnings per share for the six months ended June 30, 2013 was $16.92, an increase of 31% from $12.90 per diluted share for the comparable period of 2012.

Homebuilding

New orders in the second quarter of 2013 increased 25% to 3,278 units when compared to 2,614 units in the second quarter of 2012.  The cancellation rate in the second quarter of 2013 was 13.8% compared to 16.3% in the second quarter of 2012 and 13.2% in the first quarter of 2013.  Settlements increased in the second quarter of 2013 to 2,878 units, 16% higher than the same period in 2012.  The Company's backlog of homes sold but not settled as of June 30, 2013 increased on a unit basis by 31% to 6,617 units and on a dollar basis by 42% to $2,372,757,000 when compared to June 30, 2012.

Homebuilding revenues for the three months ended June 30, 2013 totaled $992,210,000, 31% higher than the year earlier period.  Gross profit margin in the second quarter of 2013 was 15.9% compared to 17.3% in the second quarter of 2012 and 16.9% in the first quarter of 2013.  Gross profit margin in the current quarter was negatively impacted by an approximate $15,600,000 charge, or 157 basis points of revenue, to establish a reserve related to remediation of primarily water infiltration issues in a single completed community.  The water infiltration issues were the result of a design issue with several products developed for and built in that specific community.  These products were not built in any other community.  Excluding this charge, gross profit margin for the second quarter of 2013 was 17.5%.  Income before tax from the homebuilding segment totaled $71,663,000 in the 2013 second quarter, an increase of 26% when compared to the second quarter of 2012.

Mortgage Banking

Mortgage closed loan production of $646,450,000 for the three months ended June 30, 2013 was 18% higher than the same period last year.  Operating income for the mortgage banking operations during the second quarter of 2013 increased 22% to $8,518,000, when compared to $6,971,000 reported for the same period of 2012.

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 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,

2013

2012

2013

2012

Homebuilding:

Revenues                                         

$    992,210

$     755,290

$     1,743,078

$   1,341,485

Other income

1,098

538

2,124

1,446

Cost of sales

(834,288)

(624,978)

(1,458,373)

(1,116,807)

Selling, general and administrative 

(82,120)

(73,754)

(160,533)

(145,930)

Operating income 

76,900

57,096

126,296

80,194

Interest expense

(5,237)

(112)

(10,689)

(228)

Homebuilding income 

71,663

56,984

115,607

79,966

Mortgage Banking:

Mortgage banking fees

17,682

14,493

37,070

28,790

Interest income

1,047

815

2,002

2,480

Other income

178

136

291

212

General and administrative

(10,252)

(8,327)

(19,433)

(16,240)

Interest expense

(137)

(146)

(251)

(295)

Mortgage banking income

8,518

6,971

19,679

14,947

Income before taxes 

80,181

63,955

135,286

94,913

Income tax expense

(29,491)

(17,117)

(49,555)

(27,952)

Net income

$      50,690

$       46,838

$          85,731

$        66,961

Basic earnings per share 

$        10.37

$           9.17

$            17.38

$          13.19

Diluted earnings per share 

$        10.11

$           8.97

$            16.92

$          12.90

Basic weighted average shares outstanding 

4,889

5,106

4,934

5,075

Diluted weighted average shares outstanding 

5,013

5,221

5,067

5,191

 

 

 

NVR, Inc. Consolidated Balance Sheets (in thousands, except share and per share data)

June 30, 2013

December 31, 2012

ASSETS

(Unaudited)

Homebuilding:

Cash and cash equivalents

$                  773,289

$               1,139,103

Receivables

14,822

9,421

Inventory:

Lots and housing units, covered under

sales agreements with customers

766,178

515,498

Unsold lots and housing units

72,704

81,932

Land under development

87,570

68,336

Manufacturing materials and other 

13,828

12,365

940,280

678,131

Assets related to consolidated variable interest entity

10,209

15,626

Contract land deposits, net

207,729

191,538

Property, plant and equipment, net

29,108

27,016

Reorganization value in excess of amounts

allocable to identifiable assets, net

41,580

41,580

Goodwill and finite-lived intangible assets, net

8,294

9,219

Other assets, net

290,970

270,636

2,316,281

2,382,270

Mortgage Banking:

Cash and cash equivalents

3,976

13,498

Mortgage loans held for sale, net

176,285

188,929

Property and equipment, net

3,593

2,465

Reorganization value in excess of amounts

allocable to identifiable assets, net

7,347

7,347

Other assets

23,685

10,333

214,886

222,572

Total assets

$               2,531,167

$               2,604,842

 

 

 

NVR, Inc.

Consolidated Balance Sheets (Continued)

(in thousands, except share and per share data)

June 30, 2013

December 31, 2012

LIABILITIES AND SHAREHOLDERS' EQUITY

(Unaudited)

Homebuilding:

Accounts payable

$                  196,628

$                  163,446

Accrued expenses and other liabilities

247,965

234,804

Liabilities related to consolidated variable interest entity

2,300

2,180

Non-recourse debt related to consolidated variable

interest entity

1,604

4,574

Customer deposits

137,765

99,687

Senior notes

599,031

598,988

1,185,293

1,103,679

Mortgage Banking:

Accounts payable and other liabilities

25,595

20,686

25,595

20,686

Total liabilities

1,210,888

1,124,365

Commitments and contingencies

Shareholders' equity:

Common stock, $0.01 par value; 60,000,000 shares

authorized; 20,555,330 and 20,556,198 shares 

issued as of June 30, 2013 and December 31, 2012

206

206

Additional paid-in-capital

1,196,385

1,169,699

Deferred compensation trust ? 109,256 and

152,223 shares of NVR, Inc. common

stock as of June 30, 2013 and 

December 31, 2012, respectively

(17,741)

(25,331)

Deferred compensation liability

17,741

25,331

Retained earnings

4,424,811

4,339,080

Less treasury stock at cost ? 15,855,338 and

15,642,068 shares at June 30, 2013

and December 31, 2012, respectively

(4,301,123)

(4,028,508)

Total shareholders' equity

1,320,279

1,480,477

    Total liabilities and shareholders' equity

$               2,531,167

$               2,604,842

 

 

 

NVR, Inc.

Operating Activity

(dollars in thousands)

(Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2013

2012

2013

2012

Homebuilding data:

New orders (units)

Mid Atlantic (1)

1,671

1,321

3,387

2,984

North East (2)

274

236

567

495

Mid East (3)

833

677

1,782

1,475

South East (4)

500

380

1,052

817

   Total

3,278

2,614

6,788

5,771

Average new order price

$            361.1

$            330.5

$            351.8

$            321.1

Settlements (units)

Mid Atlantic (1)

1,493

1,275

2,631

2,281

North East (2)

259

247

450

416

Mid East (3)

722

609

1,315

1,057

South East (4)

404

344

754

645

   Total

2,878

2,475

5,150

4,399

Average settlement price

$            344.7

$            305.1

$            338.4

$            304.9

Backlog (units)

Mid Atlantic (1)

3,439

2,676

North East (2)

550

455

Mid East (3)

1,619

1,225

South East (4)

1,009

692

   Total

6,617

5,048

Average backlog price

$            358.6

$            331.3

Community count (average)

452

403

444

395

Lots controlled at end of period

61,200

55,000

Mortgage banking data:

Loan closings

$        646,450

$        548,871

$     1,120,216

$        969,055

Capture rate

85%

88%

84%

88%

Common stock information:

Shares outstanding at end of period

4,699,992

5,138,099

Number of shares repurchased

300,086

-

300,086

-

Aggregate cost of shares repurchased

$        294,979

$                    -

$        294,979

$                    -

(1) Virginia, West Virginia, Maryland, 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, Florida and Tennessee

 

SOURCE NVR, Inc.

For further information: Curt McKay, Office: (703) 956-4058

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