NVR, Inc. Announces Second Quarter Results

                  NVR, Inc. Announces Second Quarter Results  PR Newswire  RESTON, Va., July 21, 2014  RESTON, Va., July 21, 2014 /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, 2014 of $68,178,000,or $15.17 per diluted share. Net income and diluted earnings per share for its second quarter ended June 30, 2014 increased 34% and 50%, respectively, when compared to the 2013 second quarter. Consolidated revenues for the second quarter of 2014 totaled $1,102,054,000, a 9% increase from $1,009,892,000 for the comparable 2013 quarter.  For the six months ended June 30, 2014, consolidated revenues were $1,913,364,000, 7% higher than the $1,780,148,000 reported for the same period of 2013. Net income for the six months ended June 30, 2014 was $92,027,000, an increase of 7% when compared to the six months ended June 30, 2013. Diluted earnings per share for the six months ended June 30, 2014 was $20.19, an increase of 19% from $16.92 per diluted share for the comparable period of 2013.  Homebuilding  New orders in the second quarter of 2014 increased 4% to 3,415 units when compared to 3,278 units in the second quarter of 2013. The cancellation rate in the second quarter of 2014 was 13% compared to 14% in the second quarter of 2013 and 12% in the first quarter of 2014. Settlements increased in the second quarter of 2014 to 2,943 units, 2% higher than the same period in 2013. The Company's backlog of homes sold but not settled as of June 30, 2014 decreased on a unit basis by 1% to 6,531 units, but increased on a dollar basis by 3% to $2,443,238,000 when compared to June 30, 2013.  Homebuilding revenues for the three months ended June 30, 2014 totaled $1,084,080,000, 9% higher than the year earlier period. Gross profit margin in the second quarter of 2014 was 18.6% compared to 15.9% in the second quarter of 2013. Gross profit margin in the second quarter of 2013 was negatively impacted by a previously disclosed service related accrual which reduced gross profit margin by 157 basis points of revenue. Income before tax from the homebuilding segment totaled $102,578,000 in the 2014 second quarter, an increase of 43% when compared to the second quarter of 2013.  Mortgage Banking  Mortgage closed loan production of $675,625,000 for the three months ended June 30, 2014 was 5% higher than the same period last year. Operating income for the mortgage banking operations during the second quarter of 2014 decreased 27% to $6,246,000, when compared to $8,518,000 reported for the same period of 2013.  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 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     Six Months Ended June                                                    June 30,               30,                                                    2014        2013       2014         2013 Homebuilding:  Revenues $          $        $          $                                                     1,084,080  992,210    1,883,267    1,743,078  Other income                                      452         1,098      1,449        2,124  Cost of sales                                     (882,778)   (834,288)  (1,537,930)  (1,458,373)  Selling, general and administrative              (93,583)    (82,120)   (184,215)    (160,533)                Operating income                   108,171     76,900     162,571      126,296  Interest expense                                  (5,593)     (5,237)    (11,277)     (10,689)                Homebuilding income                102,578     71,663     151,294      115,607 Mortgage Banking:  Mortgage banking fees                             17,974      17,682     30,097       37,070  Interest income                                   825         1,047      2,009        2,002  Other income                                      194         178        253          291  General and administrative                        (12,617)    (10,252)   (24,882)     (19,433)  Interest expense                                  (130)       (137)      (240)        (251)                Mortgage banking income             6,246       8,518      7,237        19,679 Income before taxes                               108,824     80,181     158,531      135,286                Income tax expense                  (40,646)    (29,491)   (66,504)     (49,555) Net income                                         $       $       $        $                                                        68,178      50,690     92,027      85,731 Basic earnings per share                          $       $      $       $                                                          15.68     10.37      20.88       17.38 Diluted earnings per share                        $       $      $       $                                                          15.17     10.11      20.19       16.92 Basic weighted average shares outstanding         4,349       4,889      4,408        4,934 Diluted weighted average shares outstanding       4,495       5,013      4,557        5,067  NVR, Inc. Consolidated Balance Sheets (in thousands, except share and per share data)                                           June 30, 2014      December 31, 2013 ASSETS                                    (Unaudited) Homebuilding:  Cash and cash equivalents                $          $                                                   538,940           844,274  Receivables                              15,196             9,529  Inventory:       Lots and housing units, covered       under              sales agreements with        788,848            568,831              customers       Unsold lots and housing units       89,275             117,467       Land under development              63,789             41,328       Building materials and other       10,593             10,939                                           952,505            738,565  Assets related to consolidated variable  6,802              7,268  interest entity  Contract land deposits, net              253,808            236,885  Property, plant and equipment, net       44,252             32,599  Reorganization value in excess of  amounts       allocable to identifiable assets,   41,580             41,580       net  Goodwill and finite-lived intangible     6,055              6,747  assets, net  Other assets                             311,060            307,933                                           2,170,198          2,225,380 Mortgage Banking:  Cash and cash equivalents                12,919             21,311  Mortgage loans held for sale, net        170,470            210,641  Property and equipment, net              6,433              4,699  Reorganization value in excess of  amounts       allocable to identifiable assets,   7,347              7,347       net  Other assets                             14,696             16,770                                           211,865            260,768              Total assets                 $           $                                                 2,382,063          2,486,148      LIABILITIES AND SHAREHOLDERS' EQUITY Homebuilding:  Accounts payable                         $          $                                                   231,633           181,687  Accrued expenses and other liabilities   296,045            316,227  Liabilities related to consolidated      2,277              1,646  variable interest entity  Non-recourse debt related to  consolidated variable       interest entity                     1,258              3,365  Customer deposits                        128,320            101,022  Senior notes                             599,120            599,075                                           1,258,653          1,203,022 Mortgage Banking:  Accounts payable and other liabilities   24,195             21,774                                           24,195             21,774       Total liabilities                   1,282,848          1,224,796 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, 2014 and December     206                206       31, 2013  Additional paid-in-capital               1,277,755          1,212,050  Deferred compensation trust – 109,256  shares of       NVR, Inc. common stock as of       both       June 30, 2014 and December 31,      (17,741)           (17,741)       2013  Deferred compensation liability          17,741             17,741  Retained earnings                        4,697,584          4,605,557  Less treasury stock at cost –  16,342,156 and       16,121,605 shares at June 30,       2014       and December 31, 2013,              (4,876,330)        (4,556,461)       respectively       Total shareholders' equity          1,099,215          1,261,352        Total liabilities and           $           $             shareholders' equity                2,382,063          2,486,148    NVR, Inc. Operating Activity (dollars in thousands) (Unaudited)                         Three Months Ended June  Six Months Ended June 30,                         30,                         2014            2013     2014           2013 Homebuilding data:  New orders (units)       Mid Atlantic (1)  1,751           1,671    3,426          3,387       North East (2)    288             274      586            567       Mid East (3)      825             833      1,716          1,782       South East (4)    551             500      1,012          1,052        Total          3,415           3,278    6,740          6,788  Average new order      $    368.0   $     $    368.0  $    351.8  price                                  361.1  Settlements (units)       Mid Atlantic (1)  1,547           1,493    2,671          2,631       North East (2)    271             259      504            450       Mid East (3)      707             722      1,185          1,315       South East (4)    418             404      794            754        Total          2,943           2,878    5,154          5,150  Average settlement     $    368.2   $     $    365.3  $    338.4  price                                  344.7  Backlog (units)       Mid Atlantic (1)                           3,465          3,439       North East (2)                             577            550       Mid East (3)                               1,563          1,619       South East (4)                             926            1,009        Total                                   6,531          6,617  Average backlog price                           $    374.1  $    358.6  Community count        494             452      487            444  (average)  Lots controlled at end                          67,500         61,200  of period Mortgage banking data:  Loan closings          $  675,625     $       $1,148,557     $1,120,216                                         646,450  Capture rate           82%             85%      80%            84% Common stock information:  Shares outstanding at                           4,213,174      4,699,992  end of period  Number of shares       285,362         300,086  317,739        300,086  repurchased  Aggregate cost of      $  314,870    $       $  347,448    $  294,979  shares repurchased                     294,979  (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      SOURCE NVR, Inc.  Contact: Curt McKay, Office: (703) 956-4058  
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