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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, 2017 /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, 2017 of $147,877,000, or $35.19 per diluted share.  Net income and diluted earnings per share for the second quarter ended June 30, 2017 increased 61% and 60%, respectively, when compared to the 2016 second quarter net income of $91,676,000, or $22.01 per diluted share.  Consolidated revenues for the second quarter of 2017 totaled $1,544,492,000, an 11% increase from $1,388,183,000 in the second quarter of 2016.

For the six months ended June 30, 2017, consolidated revenues were $2,821,584,000, an 11% increase from $2,532,209,000 reported for the same period of 2016.  Net income for the six months ended June 30, 2017 was $250,800,000, an increase of 60% when compared to the six months ended June 30, 2016.  Diluted earnings per share for the six months ended June 30, 2017 was $60.36, an increase of 60% from $37.82 per diluted share for the comparable period of 2016.

Homebuilding

New orders in the second quarter of 2017 increased 8% to 4,678 units, when compared to 4,324 units in the second quarter of 2016. The average sales price of new orders in the second quarter of 2017 was $377,000, a decrease of 2% when compared with the second quarter of 2016.  The decrease in the average sales price of new orders is primarily attributable to a shift in new orders from higher priced markets to lower priced markets.  Settlements increased in the second quarter of 2017 to 3,917 units, 9% higher than the second quarter of 2016.  The Company's backlog of homes sold but not settled as of June 30, 2017 increased on a unit basis by 9% to 8,813 units and increased on a dollar basis by 10% to $3,444,964,000 when compared to June 30, 2016.

Homebuilding revenues in the second quarter of 2017 totaled $1,512,714,000, 11% higher than the year earlier period.  Gross profit margin in the second quarter of 2017 increased to 19.5%, compared to 17.3% in the second quarter of 2016.  Gross profit margin was favorably impacted by modest improvement in pricing combined with moderating construction costs.  Income before tax from the homebuilding segment totaled $191,337,000 in the second quarter of 2017, an increase of 45% when compared to the second quarter of 2016.

Mortgage Banking

Mortgage closed loan production in the second quarter of 2017 totaled $1,041,613,000, an increase of 11% when compared to the second quarter of 2016. Income before tax from the mortgage banking segment for the second quarter of 2017 was $17,631,000, compared to $13,192,000 for the second quarter of 2016.

Income Taxes

Net income and diluted earnings per share were favorably impacted by the reduction in the Company's effective tax rate for the three and six months ended June 30, 2017 to 29.2% and 26.5%, respectively, compared to 36.7% for both the three and six months ended June 30, 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 $16,464,000 and $36,364,000 related to excess tax benefits from stock option exercises during the three and six months ended June 30, 2017, respectively.  For the three and six months ended June 30, 2016, the excess tax benefits of $2,394,000 and $8,678,000, respectively, were recorded to additional paid-in capital within shareholders' equity on the consolidated balance sheet.  Excluding the impact of the excess tax benefits recognized during the three and six months ended June 30, 2017, the effective tax rate would have been 37.1% for both periods.  Additionally, the excess tax benefits recognized during the three and six months ended June 30, 2017 favorably impacted diluted earnings per share by $3.92 and $8.75 per share, respectively.

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 June 30,



Six Months Ended June 30,




2017



2016



2017



2016



















Homebuilding:

















Revenues


$

1,512,714



$

1,361,741



$

2,760,301



$

2,483,245


Other income



1,447




753




2,549




1,520


Cost of sales



(1,218,083)




(1,126,369)




(2,244,100)




(2,052,129)


Selling, general and administrative



(99,100)




(100,043)




(199,004)




(198,058)


Operating income



196,978




136,082




319,746




234,578


Interest expense



(5,641)




(4,554)




(11,219)




(9,396)


Homebuilding income



191,337




131,528




308,527




225,182



















Mortgage Banking:

















Mortgage banking fees



31,778




26,442




61,283




48,964


Interest income



1,554




1,437




3,215




3,111


Other income



506




409




815




667


General and administrative



(15,934)




(14,836)




(32,180)




(29,386)


Interest expense



(273)




(260)




(531)




(506)


Mortgage banking income



17,631




13,192




32,602




22,850



















Income before taxes



208,968




144,720




341,129




248,032


Income tax expense



(61,091)




(53,044)




(90,329)




(91,053)



















Net income


$

147,877



$

91,676



$

250,800



$

156,979



















Basic earnings per share


$

39.46



$

23.51



$

67.30



$

40.34



















Diluted earnings per share


$

35.19



$

22.01



$

60.36



$

37.82



















Basic weighted average shares outstanding



3,748




3,900




3,726




3,892



















Diluted weighted average shares outstanding



4,202




4,165




4,155




4,151



 

 

 

NVR, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share data)

(Unaudited)




June 30, 2017



December 31, 2016


ASSETS









Homebuilding:









Cash and cash equivalents


$

518,482



$

375,748


Restricted cash



15,963




17,561


Receivables



22,110




18,937


Inventory:









Lots and housing units, covered under sales agreements with customers



1,155,047




883,868


Unsold lots and housing units



147,195




145,065


Land under development



46,685




46,999


Building materials and other



16,024




16,168





1,364,951




1,092,100











Assets related to consolidated variable interest entity



1,243




1,251


Contract land deposits, net



358,405




379,844


Property, plant and equipment, net



43,995




45,915


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



41,580




41,580


Goodwill and finite-lived intangible assets, net



1,908




2,599


Other assets



265,539




257,811





2,634,176




2,233,346











Mortgage Banking:









Cash and cash equivalents



9,632




19,657


Restricted cash



2,900




1,857


Mortgage loans held for sale, net



241,398




351,958


Property and equipment, net



5,530




4,903


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



7,347




7,347


Other assets



17,104




24,875





283,911




410,597


Total assets


$

2,918,087



$

2,643,943











LIABILITIES AND SHAREHOLDERS' EQUITY









Homebuilding:









Accounts payable


$

271,899



$

251,212


Accrued expenses and other liabilities



317,168




336,318


Liabilities related to consolidated variable interest entity



874




882


Customer deposits



165,684




122,236


Senior notes



596,760




596,455





1,352,385




1,307,103


Mortgage Banking:









Accounts payable and other liabilities



29,925




32,399





29,925




32,399


Total liabilities



1,382,310




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 June 30, 2017 and December 31, 2016



206




206


Additional paid-in capital



1,607,958




1,515,828


Deferred compensation trust – 108,636 and 108,640 shares of NVR, Inc. common stock as of
June 30, 2017 and December 31, 2016, respectively



(17,371)




(17,375)


Deferred compensation liability



17,371




17,375


Retained earnings



5,945,219




5,695,376


Less treasury stock at cost – 16,807,724 and 16,862,327 shares as of June 30, 2017 and
December 31, 2016, respectively



(6,017,606)




(5,906,969)


Total shareholders' equity



1,535,777




1,304,441


Total liabilities and shareholders' equity


$

2,918,087



$

2,643,943



 

 

 

NVR, Inc.

Operating Activity

(dollars in thousands)

(Unaudited)




Three Months Ended June 30,



Six Months Ended June 30,




2017



2016



2017



2016


Homebuilding data:

















New orders (units)

















Mid Atlantic (1)



2,263




2,242




4,388




4,271


North East (2)



361




314




720




655


Mid East (3)



1,145




1,003




2,279




2,060


South East (4)



909




765




1,715




1,475


Total



4,678




4,324




9,102




8,461



















Average new order price


$

377.0



$

383.9



$

384.6



$

379.9



















Settlements (units)

















Mid Atlantic (1)



1,976




1,762




3,634




3,217


North East (2)



329




289




597




566


Mid East (3)



947




934




1,672




1,695


South East (4)



665




596




1,270




1,109


Total



3,917




3,581




7,173




6,587



















Average settlement price


$

386.1



$

378.5



$

384.8



$

374.4



















Backlog (units)

















Mid Atlantic (1)











4,295




4,191


North East (2)











731




629


Mid East (3)











2,106




1,863


South East (4)











1,681




1,420


Total











8,813




8,103



















Average backlog price










$

390.9



$

385.4



















New order cancellation rate



13

%



13

%



14

%



14

%

Community count (average)



491




483




488




481


Lots controlled at end of period











83,700




76,300



















Mortgage banking data:

















Loan closings


$

1,041,613



$

942,407



$

1,884,954



$

1,696,247


Capture rate



88

%



88

%



87

%



88

%


















Common stock information:

















Shares outstanding at end of period











3,747,606




3,897,629


Number of shares repurchased



32,840




5,600




83,762




61,988


Aggregate cost of shares repurchased


$

73,959



$

9,407



$

159,506



$

96,508



















(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

 

View original content:http://www.prnewswire.com/news-releases/nvr-inc-announces-second-quarter-results-300492079.html

SOURCE NVR, Inc.

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