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Headquartered in Reston, Virginia, NVR, Inc. is one of America’s leading homebuilders.

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NVR, Inc. Announces Second Quarter Results

RESTON, Va., July 21, 2016 /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, 2016 of $91,676,000, or $22.01 per diluted share. Net income for its second quarter ended June 30, 2016 decreased 2% when compared to the second quarter of 2015. Diluted earnings per share was flat when compared to the second quarter of 2015. Consolidated revenues for the second quarter of 2016 totaled $1,388,183,000, a 12% increase from $1,243,633,000 for the comparable 2015 quarter.

For the six months ended June 30, 2016, consolidated revenues were $2,532,209,000, 15% higher than the $2,201,382,000 reported for the same period of 2015. Net income for the six months ended June 30, 2016 was $156,979,000, an increase of 19% when compared to the six months ended June 30, 2015. Diluted earnings per share for the six months ended June 30, 2016 was $37.82, an increase of 21% from $31.17 per diluted share for the comparable period of 2015.

Homebuilding

New orders in the second quarter of 2016 increased 14% to 4,324 units, when compared to 3,796 units in the second quarter of 2015. The average sales price of new orders was $383,900, a 1% increase when compared with the average sales price of new orders in the second quarter of 2015. The cancellation rate in the second quarter of 2016 was 13%, compared to 14% in the second quarter of 2015. Settlements increased in the second quarter of 2016 to 3,581 units, 13% higher than the second quarter of 2015. The Company's backlog of homes sold but not settled as of June 30, 2016 increased on a unit basis by 8% to 8,103 units and increased on a dollar basis by 9% to $3,122,534,000 when compared to June 30, 2015.

Homebuilding revenues for the three months ended June 30, 2016 totaled $1,361,741,000, 12% higher than the year earlier period. Gross profit margin decreased to 17.3% in the 2016 second quarter compared to 19.2% for the same period in 2015. Gross profit margin was negatively impacted by a 2% decrease in the average settlement price and higher construction costs in the second quarter of 2016 compared to the same period of 2015. Income before tax from the homebuilding segment totaled $131,528,000 in the second quarter of 2016, a decrease of 4% when compared to the second quarter of 2015.

During the second quarter of 2016, the Company sold the previously disclosed land parcel it had acquired in February 2016 to a developer for an amount which approximated NVR's net investment in the property.  The Company also entered into lot purchase agreements with the developer for the option to purchase a portion of the finished lots expected to be developed from the parcel.

Mortgage Banking

Mortgage closed loan production of $942,407,000 for the three months ended June 30, 2016 increased by 10% when compared to the three months ended June 30, 2015. Operating income for the mortgage banking operations during the second quarter of 2016 was $13,192,000, compared to $11,436,000 reported for the second 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 June 30,



Six Months Ended June 30,




2016



2015



2016



2015


Homebuilding:

















Revenues


$

1,361,741



$

1,221,111



$

2,483,245



$

2,162,649


Other income



753




1,122




1,520




1,847


Cost of sales



(1,126,369)




(986,854)




(2,052,129)




(1,768,522)


Selling, general and administrative



(100,043)




(92,314)




(198,058)




(190,543)


  Operating income



136,082




143,065




234,578




205,431


Interest expense



(4,554)




(5,817)




(9,396)




(11,599)


  Homebuilding income



131,528




137,248




225,182




193,832



















Mortgage Banking:

















Mortgage banking fees



26,442




22,522




48,964




38,733


Interest income



1,437




1,303




3,111




2,381


Other income



409




243




667




348


General and administrative



(14,836)




(12,493)




(29,386)




(23,972)


Interest expense



(260)




(139)




(506)




(275)


  Mortgage banking income



13,192




11,436




22,850




17,215



















Income before taxes



144,720




148,684




248,032




211,047


  Income tax expense



(53,044)




(55,289)




(91,053)




(78,594)



















Net income


$

91,676



$

93,395



$

156,979



$

132,453



















Basic earnings per share


$

23.51



$

22.97



$

40.34



$

32.61



















Diluted earnings per share


$

22.01



$

21.91



$

37.82



$

31.17



















Basic weighted average shares outstanding



3,900




4,066




3,892




4,062



















Diluted weighted average shares outstanding



4,165




4,262




4,151




4,249


 

 


NVR, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share data)

(Unaudited)




June 30, 2016



December 31, 2015


ASSETS









Homebuilding:









  Cash and cash equivalents


$

353,176



$

397,522


  Receivables



17,464




11,482


  Inventory:









Lots and housing units, covered under sales agreements with customers



1,046,334




785,982


Unsold lots and housing units



127,210




147,832


Land under development



58,751




60,611


Building materials and other



15,319




12,101





1,247,614




1,006,526











Assets related to consolidated variable interest entity



1,311




1,749


Contract land deposits, net



375,071




343,295


Property, plant and equipment, net



46,067




44,651


Reorganization value in excess of amounts allocable to identifiable assets, net



41,580




41,580


Goodwill and finite-lived intangible assets, net



3,291




3,982


Other assets



293,818




281,381





2,379,392




2,132,168


Mortgage Banking:









  Cash and cash equivalents



10,026




26,804


  Mortgage loans held for sale, net



275,145




319,553


  Property and equipment, net



5,079




5,313


  Reorganization value in excess of amounts allocable to identifiable assets, net



7,347




7,347


  Other assets



21,435




20,533





319,032




379,550


Total assets


$

2,698,424



$

2,511,718











LIABILITIES AND SHAREHOLDERS' EQUITY









Homebuilding:









  Accounts payable


$

272,768



$

227,437


  Accrued expenses and other liabilities



294,604




304,922


  Liabilities related to consolidated variable interest entity



951




1,091


  Customer deposits



141,746




110,965


  Senior notes



596,151




595,847





1,306,220




1,240,262


Mortgage Banking:









  Accounts payable and other liabilities



34,603




32,291





34,603




32,291


Total liabilities



1,340,823




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 June 30, 2016 and December 31, 2015



206




206


Additional paid-in capital



1,483,064




1,447,795


Deferred compensation trust – 108,628 and 108,614 shares of NVR, Inc.









common stock as of June 30, 2016 and December 31, 2015, respectively



(17,355)




(17,333)


Deferred compensation liability



17,355




17,333


Retained earnings



5,427,093




5,270,114


Less treasury stock at cost – 16,657,701 and 16,664,342 shares









at June 30, 2016 and December 31, 2015, respectively



(5,552,762)




(5,478,950)


Total shareholders' equity



1,357,601




1,239,165


Total liabilities and shareholders' equity


$

2,698,424



$

2,511,718


 

 

NVR, Inc.

Operating Activity

(dollars in thousands)

(Unaudited)




Three Months Ended June 30,



Six Months Ended June 30,




2016



2015



2016



2015


Homebuilding data:

















New orders (units)

















  Mid Atlantic (1)



2,242




1,910




4,271




3,858


  North East (2)



314




295




655




632


  Mid East (3)



1,003




962




2,060




1,956


  South East (4)



765




629




1,475




1,276


Total



4,324




3,796




8,461




7,722



















Average new order price


$

383.9



$

378.3



$

379.9



$

376.8



















Settlements (units)

















  Mid Atlantic (1)



1,762




1,679




3,217




2,975


  North East (2)



289




323




566




562


  Mid East (3)



934




674




1,695




1,256


  South East (4)



596




499




1,109




916


Total



3,581




3,175




6,587




5,709



















Average settlement price


$

378.5



$

384.4



$

374.4



$

378.5



















Backlog (units)

















  Mid Atlantic (1)











4,191




3,829


  North East (2)











629




658


  Mid East (3)











1,863




1,850


  South East (4)











1,420




1,151


Total











8,103




7,488



















Average backlog price










$

385.4



$

381.2



















Community count (average)



483




476




481




475


Lots controlled at end of period











76,300




70,600



















Mortgage banking data:

















  Loan closings


$

942,407



$

859,403



$

1,696,247



$

1,498,029


  Capture rate



88%




89%




88%




88%



















Common stock information:

















  Shares outstanding at end of period











3,897,629




4,069,170


  Number of shares repurchased



5,600




4,705




61,988




55,031


  Aggregate cost of shares repurchased


$

9,407



$

6,186



$

96,508



$

69,285


 

(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

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/nvr-inc-announces-second-quarter-results-300301747.html

SOURCE NVR, Inc.

Investor Relations Contact: Curt McKay, (703) 956-4058, ir@nvrinc.com