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

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NVR, Inc. Announces First Quarter Results

RESTON, Va., April 20, 2017 /PRNewswire/ -- NVR, Inc. (NYSE: NVR), one of the nation's largest homebuilding and mortgage banking companies, announced net income for its first quarter ended March 31, 2017 of $102,923,000, or $25.12 per diluted share.  Net income and diluted earnings per share for the first quarter ended March 31, 2017 increased 58% and 59%, respectively, when compared to the 2016 first quarter of $65,303,000, or $15.79 per diluted share.  Consolidated revenues for the first quarter of 2017 totaled $1,277,092,000, a 12% increase from $1,144,026,000 for the comparable 2016 quarter.

Net income and diluted earnings per share were favorably impacted by the reduction in the Company's effective tax rate in the first quarter of 2017 to 22.1% from 36.8% in the first quarter of 2016.  The reduction in the effective tax rate was primarily due to the Company's January 1, 2017 adoption of Accounting Standard Update 2016-09, which resulted in the Company recognizing an income tax benefit of $19,900,000 related to excess tax benefit from stock option exercises in the first quarter of 2017.  In the first quarter of 2016, the excess tax benefit of $6,284,000 was recorded to additional paid-in capital within shareholders' equity on the consolidated balance sheet.  Excluding the impact of the excess tax benefit recognized in the first quarter of 2017, the effective tax rate would have been 37.2%.  Additionally, the excess tax benefit in the first quarter of 2017 favorably impacted diluted earnings per share by $4.86 per share.

Homebuilding

New orders in the first quarter of 2017 increased 7% to 4,424 units, when compared to 4,137 units in the first quarter of 2016. The average sales price of new orders in the first quarter of 2017 was $392,600, an increase of 5% when compared with the first quarter of 2016.  The cancellation rate in the first quarter of 2017 was 16%, compared with 15% in the first quarter of 2016.  Settlements increased in the first quarter of 2017 to 3,256 units, 8% higher than the first quarter of 2016.  The Company's backlog of homes sold but not settled as of March 31, 2017 increased on a unit basis by 9% to 8,052 units and increased on a dollar basis by 13% to $3,193,777,000 when compared to March 31, 2016.

Homebuilding revenues in the first quarter of 2017 totaled $1,247,587,000, 11% higher than the year earlier period.  Gross profit margin in the first quarter of 2017 was 17.8%, compared to 17.5% in the first quarter of 2016.  Income before tax from the homebuilding segment totaled $117,190,000 in the first quarter of 2017, an increase of 25% when compared to the first quarter of 2016.

Mortgage Banking

Mortgage closed loan production in the first quarter of 2017 totaled $843,341,000, an increase of 12% when compared to the first quarter of 2016. Income before tax from the mortgage banking segment for the first quarter of 2017 was $14,971,000, compared to $9,658,000 for the first quarter of 2016.

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-nine 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 March 31,




2017



2016











Homebuilding:









Revenues


$

1,247,587



$

1,121,504


Other income



1,102




767


Cost of sales



(1,026,017)




(925,760)


Selling, general and administrative



(99,904)




(98,015)


Operating income



122,768




98,496


Interest expense



(5,578)




(4,842)


Homebuilding income



117,190




93,654











Mortgage Banking:









Mortgage banking fees



29,505




22,522


Interest income



1,661




1,674


Other income



309




258


General and administrative



(16,246)




(14,550)


Interest expense



(258)




(246)


Mortgage banking income



14,971




9,658











Income before taxes



132,161




103,312


Income tax expense



(29,238)




(38,009)











Net income


$

102,923



$

65,303











Basic earnings per share


$

27.78



$

16.81











Diluted earnings per share


$

25.12



$

15.79











Basic weighted average shares outstanding



3,705




3,884











Diluted weighted average shares outstanding



4,097




4,135



 

 

NVR, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share data)

(Unaudited)






March 31, 2017



December 31, 2016


ASSETS









Homebuilding:









Cash and cash equivalents


$

482,689



$

375,748


Restricted cash



14,857




17,561


Receivables



19,876




18,937


Inventory:









Lots and housing units, covered under sales agreements with customers



1,025,071




883,868


Unsold lots and housing units



129,931




145,065


Land under development



63,684




46,999


Building materials and other



13,748




16,168





1,232,434




1,092,100











Assets related to consolidated variable interest entity



1,248




1,251


Contract land deposits, net



369,703




379,844


Property, plant and equipment, net



45,116




45,915


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



41,580




41,580


Goodwill and finite-lived intangible assets, net



2,254




2,599


Other assets



277,489




257,811





2,487,246




2,233,346











Mortgage Banking:









Cash and cash equivalents



9,862




19,657


Restricted cash



2,122




1,857


Mortgage loans held for sale, net



213,433




351,958


Property and equipment, net



5,434




4,903


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



7,347




7,347


Other assets



16,855




24,875





255,053




410,597


Total assets


$

2,742,299



$

2,643,943











LIABILITIES AND SHAREHOLDERS' EQUITY









Homebuilding:









Accounts payable


$

237,700



$

251,212


Accrued expenses and other liabilities



318,437




336,318


Liabilities related to consolidated variable interest entity



879




882


Customer deposits



148,353




122,236


Senior notes



596,607




596,455





1,301,976




1,307,103


Mortgage Banking:









Accounts payable and other liabilities



32,652




32,399





32,652




32,399


Total liabilities



1,334,628




1,339,502











Commitments and contingencies


















Shareholders' equity:









Common stock, $0.01 par value; 60,000,000 shares authorized; 20,555,330 shares issued as of both March 31, 2017 and December 31, 2016



206




206


Additional paid-in capital



1,570,270




1,515,828


Deferred compensation trust – 108,644 and 108,640 shares of NVR, Inc. common stock as of March 31, 2017 and December 31, 2016, respectively



(17,383)




(17,375)


Deferred compensation liability



17,383




17,375


Retained earnings



5,796,733




5,695,376


Less treasury stock at cost – 16,819,692 and 16,862,327 shares as of March 31, 2017 and December 31, 2016, respectively



(5,959,538)




(5,906,969)


Total shareholders' equity



1,407,671




1,304,441


Total liabilities and shareholders' equity


$

2,742,299



$

2,643,943



 

 

NVR, Inc.

Operating Activity

(dollars in thousands)

(Unaudited)






Three Months Ended March 31,




2017



2016


Homebuilding data:









New orders (units)









Mid Atlantic (1)



2,125




2,029


North East (2)



359




341


Mid East (3)



1,134




1,057


South East (4)



806




710


Total



4,424




4,137











Average new order price


$

392.6



$

375.7











Settlements (units)









Mid Atlantic (1)



1,658




1,455


North East (2)



268




277


Mid East (3)



725




761


South East (4)



605




513


Total



3,256




3,006











Average settlement price


$

383.1



$

369.5











Backlog (units)









Mid Atlantic (1)



4,008




3,711


North East (2)



699




604


Mid East (3)



1,908




1,794


South East (4)



1,437




1,251


Total



8,052




7,360











Average backlog price


$

396.6



$

382.9











Community count (average)



486




478


Lots controlled at end of period



79,100




75,400











Mortgage banking data:









Loan closings


$

843,341



$

753,840


Capture rate



86

%



88

%










Common stock information:









Shares outstanding at end of period



3,735,638




3,894,804


Number of shares repurchased



50,922




56,388


Aggregate cost of shares repurchased


$

85,547



$

87,101




(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-first-quarter-results-300442302.html

SOURCE NVR, Inc.

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