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NVR, Inc. Announces Third Quarter Results

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

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/nvr-inc-announces-third-quarter-results-300347988.html

SOURCE NVR, Inc.

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