NVR, Inc. Announces Fourth Quarter And Full Year Results

PR Newswire

RESTON, Va., Jan. 27, 2014 /PRNewswire/ -- NVR, Inc. (NVR), one of the nation's largest homebuilding and mortgage banking companies, announced net income for its fourth quarter ended December 31, 2013 of $97,811,000, $21.15 per diluted share.  Net income and diluted earnings per share for its fourth quarter ended December 31, 2013 increased 61% and 77%, respectively, when compared to the 2012 fourth quarter.  Consolidated revenues for the fourth quarter of 2013 totaled $1,242,152,000, a 32% increase from $943,738,000 for the comparable 2012 quarter.

For the year ended December 31, 2013, consolidated revenues were $4,211,267,000, an increase of 32% from the $3,184,650,000 reported for the year ended December 31, 2012.  Net income for the year ended December 31, 2013 was $266,477,000, an increase of 48% when compared to the year ended December 31, 2012.  Diluted earnings per share for the year ended December 31, 2013 was $54.81, an increase of 56% from $35.12 per diluted share for the comparable period of 2012.

Homebuilding

New orders in the fourth quarter of 2013 were 2,631 units, which was flat when compared to 2,625 units in the fourth quarter of 2012.  The cancellation rate in the fourth quarter of 2013 was 14% compared to 15% in the fourth quarter of 2012 and 19% in the third quarter of 2013.  Settlements increased in the fourth quarter of 2013 to 3,342 units, 20% higher than the same period in 2012.  The Company's backlog of homes sold but not settled as of December 31, 2013 was down 1% on a unit basis to 4,945 units but was 7% higher on a dollar basis to $1,845,600,000 when compared to December 31, 2012.

Homebuilding revenues for the three months ended December 31, 2013 totaled $1,223,808,000, 32% higher than the year earlier period.  Gross profit margin in the fourth quarter of 2013 was 18.2% compared to 18.3% in the fourth quarter of 2012 and 17.4% in the third quarter of 2013.  Gross profit margin in the current quarter was negatively impacted by a $15,964,000 expense to increase the warranty accrual for a non-recurring service issue.  This is unrelated to the warranty accrual increase recognized in the second quarter.  Excluding this charge, gross profit margin for the fourth quarter of 2013 was 19.5%.  Income before tax from the homebuilding segment totaled $143,976,000 in the 2013 fourth quarter, an increase of 67% when compared to the fourth quarter of 2012.  The fourth quarter 2013 pre-tax income results also reflect a reversal of approximately $7,450,000 of stock-based compensation expense due to an adjustment to the Company's estimated forfeiture rate based on actual forfeiture experience.

New orders for the 2013 fiscal year increased 8% to 11,800 units, when compared to 10,954 units in fiscal year 2012.  Home settlements in 2013 increased 20% to 11,834 units from 9,843 units settled in 2012.  Homebuilding revenues for 2013 totaled $4,134,481,000, 32% higher than 2012.  Pre-tax homebuilding income for the 2013 fiscal year was $379,370,000, a 57% increase when compared to 2012.

Mortgage Banking

Mortgage closed loan production of $721,926,000 for the three months ended December 31, 2013 was 12% higher than the same period in 2012.  Operating income for the mortgage banking operations during the fourth quarter of 2013 decreased 19% to $7,844,000 when compared to $9,728,000 reported for the same period of 2012.  The decrease in the operating income was attributable to an increase in general and administrative costs resulting from increased headcount in the current year. 

Mortgage closed loan production for the 2013 fiscal year increased 15% to $2,538,072,000.  Income before tax from the mortgage banking segment for 2013 increased 15% to $39,326,000 from $34,153,000 in 2012.

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)












Three Months Ended December 31,


Twelve Months Ended December 31,





2013


2012


2013


2012





(Unaudited)


(Unaudited)



Homebuilding:










Revenues                                         


$     1,223,808


$       925,363


$      4,134,481


$      3,121,244


Other income


808


1,441


3,962


3,486


Cost of sales


(1,001,415)


(756,396)


(3,424,204)


(2,575,639)


Selling, general and administrative 


(73,599)


(78,701)


(313,029)


(301,184)



Operating income 


149,602


91,707


401,210


247,907


Interest expense


(5,626)


(5,404)


(21,840)


(6,983)



Homebuilding income 


143,976


86,303


379,370


240,924












Mortgage Banking:










Mortgage banking fees


18,344


18,375


76,786


63,406


Interest income


1,585


999


4,983


4,504


Other income


187


191


696


564


General and administrative


(12,135)


(9,746)


(42,594)


(33,775)


Interest expense


(137)


(91)


(545)


(546)



Mortgage banking income


7,844


9,728


39,326


34,153












Income before taxes 


151,820


96,031


418,696


275,077














Income tax expense


(54,009)


(35,404)


(152,219)


(94,489)












Net income


$           97,811


$         60,627


$         266,477


$         180,588












Basic earnings per share 


$             21.74


$           12.38


$             56.25


$             36.04












Diluted earnings per share 


$             21.15


$           11.98


$             54.81


$             35.12












Basic weighted average shares outstanding 


4,500


4,897


4,737


5,011












Diluted weighted average shares outstanding 

4,626


5,060


4,862


5,142












 

NVR, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share data)







December 31, 2013


December 31, 2012






(Unaudited)



ASSETS














Homebuilding:






Cash and cash equivalents


$                    844,274


$                 1,139,103


Receivables


9,529


9,421


Inventory:







Lots and housing units, covered under








sales agreements with customers


568,831


515,498



Unsold lots and housing units


117,467


81,932



Land under development


41,328


68,336



Manufacturing materials and other 


10,939


12,365






738,565


678,131










Assets related to consolidated variable interest entity

7,268


15,626


Contract land deposits, net


236,885


191,538


Property, plant and equipment, net


32,599


27,016


Reorganization value in excess of amounts







allocable to identifiable assets, net


41,580


41,580


Goodwill and finite-lived intangible assets, net


6,747


9,219


Other assets


307,933


270,636






2,225,380


2,382,270









Mortgage Banking:






Cash and cash equivalents


21,311


13,498


Mortgage loans held for sale, net


210,641


188,929


Property and equipment, net


4,699


2,465


Reorganization value in excess of amounts







allocable to identifiable assets, net


7,347


7,347


Other assets


16,770


10,333






260,768


222,572











Total assets



$                 2,486,148


$                 2,604,842









LIABILITIES AND SHAREHOLDERS' EQUITY













Homebuilding:






Accounts payable


$                  181,687


$                  163,446


Accrued expenses and other liabilities


316,227


234,804


Liabilities related to consolidated variable interest entity

1,646


2,180


Non-recourse debt related to consolidated variable interest entity








3,365


4,574


Customer deposits


101,022


99,687


Senior notes


599,075


598,988






1,203,022


1,103,679









Mortgage Banking:






Accounts payable and other liabilities


21,774


20,686






21,774


20,686











Total liabilities


1,224,796


1,124,365









Commitments and contingencies













Shareholders' equity:






Common stock, $0.01 par value; 60,000,000 shares







authorized; and 20,555,330 and 20,556,198 







shares issued as of December 31, 2013 and 







December 31, 2012, respectively


206


206


Additional paid-in-capital


1,212,050


1,169,699


Deferred compensation trust – 109,256 and







152,223 shares of NVR, Inc. common







stock as of December 31, 2013 and 







December 31, 2012, respectively


(17,741)


(25,331)


Deferred compensation liability


17,741


25,331


Retained earnings


4,605,557


4,339,080


Less treasury stock at cost – 16,121,605 and







15,642,068 shares at December 31, 2013







and December 31, 2012, respectively


(4,556,461)


(4,028,508)



Total shareholders' equity


1,261,352


1,480,477



    Total liabilities and shareholders' equity

$               2,486,148


$               2,604,842

 

NVR, Inc.
Operating Activity
(dollars in thousands)
(Unaudited)










Three Months Ended December 31,


Twelve Months Ended December 31,




2013


2012


2013


2012

Homebuilding data:









New orders (units)










Mid Atlantic (1)

1,445


1,418


6,056


5,757



North East (2)

243


234


1,075


946



Mid East (3)

578


574


2,903


2,625



South East (4)

365


399


1,766


1,626



   Total

2,631


2,625


11,800


10,954












Average new order price

$            375.7


$            340.2


$            360.4


$            328.8












Settlements (units)










Mid Atlantic (1)

1,698


1,427


6,029


5,047



North East (2)

299


224


1,013


889



Mid East (3)

818


733


3,023


2,472



South East (4)

527


404


1,769


1,435



   Total

3,342


2,788


11,834


9,843












Average settlement price

$            365.3


$            331.9


$            349.1


$            317.1












Backlog (units)










Mid Atlantic (1)





2,710


2,683



North East (2)





495


433



Mid East (3)





1,032


1,152



South East (4)





708


711



   Total





4,945


4,979












Average backlog price





$            373.2


$            346.2












Community count (average)

462


414


451


404


Lots controlled at end of period





64,600


58,500











Mortgage banking data:









Loan closings

$        721,926


$        642,171


$     2,538,072


$     2,206,092


Capture rate

78%


87%


81%


87%











Common stock information:









Shares outstanding at end of period





4,433,725


4,914,130


Number of shares repurchased

126,605


8,500


581,387


285,495


Aggregate cost of shares repurchased

$        118,682


$            7,153


$        554,491


$        227,281



(1)

   Virginia, West Virginia, Maryland, 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

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