NVR, Inc. Announces First Quarter Results

News provided by

Apr 22, 2013, 08:50 ET

RESTON, Va., April 22, 2013 /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, 2013 of $35,041,000, or $6.84 per diluted share. Net income and diluted earnings per share for its first quarter ended March 31, 2013 increased 74% and 75%, respectively, when compared to the 2012 first quarter. Consolidated revenues for the first quarter of 2013 totaled $770,256,000, a 28% increase from $600,492,000 for the comparable 2012 quarter.

Homebuilding

New orders in the first quarter of 2013 increased 11% to 3,510 units, when compared to 3,157 units in the first quarter of 2012. The cancellation rate in the first quarter of 2013 was 13.2% compared to 10.3% in the first quarter of 2012 and 15.3% in the fourth quarter of 2012. Settlements increased in the first quarter of 2013 to 2,272 units, 18% higher than the first quarter of 2012. The Company's backlog of homes sold but not settled as of March 31, 2013 increased on a unit basis by 27% to 6,217 units and on a dollar basis by 39% to $2,179,566,000 when compared to March 31, 2012.

Homebuilding revenues for the three months ended March 31, 2013 totaled $750,868,000, 28% higher than the year earlier period. Gross profit margins increased to 16.9% in the 2013 first quarter compared to 16.1% for the same period in 2012. Income before tax from the homebuilding segment totaled $43,944,000 in the 2013 first quarter, an increase of 91% when compared to the first quarter of 2012.

Mortgage Banking

Mortgage closed loan production of $473,766,000 for the three months ended March 31, 2013 was 13% higher than the same period last year. Operating income for the mortgage banking operations during the first quarter of 2013 increased 40% to $11,161,000, when compared to $7,976,000 reported for the same period of 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 fifteen 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.heartlandcustomhomes.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 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,
			2013	2012
*Homebuilding:*
	Revenues		$ 750,868	$ 586,195
	Other income		1,026	908
	Cost of sales		(624,085)	(491,829)
	Selling, general and administrative		(78,413)	(72,176)
		Operating income	49,396	23,098
	Interest expense		(5,452)	(116)
		Homebuilding income	43,944	22,982

*Mortgage Banking:*
	Mortgage banking fees		19,388	14,297
	Interest income		955	1,665
	Other income		113	76
	General and administrative		(9,181)	(7,913)
	Interest expense		(114)	(149)
		Mortgage banking income	11,161	7,976

*Income before taxes*			55,105	30,958

		Income tax expense	(20,064)	(10,835)

*Net income*			$ 35,041	$ 20,123

*Basic earnings per share*			$ 7.04	$ 3.99

*Diluted earnings per share*			$ 6.84	$ 3.90

*Basic weighted average shares outstanding*			4,979	5,044

*Diluted weighted average shares outstanding*			5,122	5,159

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


				March 31, 2013	December 31, 2012
ASSETS				(Unaudited)

*Homebuilding:*
	Cash and cash equivalents			$ 1,082,792	$ 1,139,103
	Receivables			14,536	9,421
	Inventory:
		Lots and housing units, covered under
			sales agreements with customers	653,799	515,498
		Unsold lots and housing units		79,639	81,932
		Land under development		96,233	68,336
		Manufacturing materials and other		12,179	12,365
				841,850	678,131

	Assets related to consolidated variable interest entity			11,436	15,626
	Contract land deposits, net			193,216	191,538
	Property, plant and equipment, net			27,736	27,016
	Reorganization value in excess of amounts
		allocable to identifiable assets, net		41,580	41,580
	Other assets, net			297,344	279,855
				2,510,490	2,382,270

*Mortgage Banking:*
	Cash and cash equivalents			4,396	13,498
	Mortgage loans held for sale, net			128,050	188,929
	Property and equipment, net			2,833	2,465
	Reorganization value in excess of amounts
		allocable to identifiable assets, net		7,347	7,347
	Other assets			11,939	10,333
				154,565	222,572

			Total assets	$ 2,665,055	$ 2,604,842

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


			March 31, 2013	December 31, 2012
LIABILITIES AND SHAREHOLDERS' EQUITY			(Unaudited)

*Homebuilding:*
	Accounts payable		$ 170,129	$ 163,446
	Accrued expenses and other liabilities		193,004	234,804
	Liabilities related to consolidated variable interest entity		2,175	2,180
	Non-recourse debt related to consolidated variable
		interest entity	2,539	4,574
	Customer deposits		124,862	99,687
	Senior notes		599,010	598,988
			1,091,719	1,103,679

*Mortgage Banking:*
	Accounts payable and other liabilities		21,244	20,686
			21,244	20,686

		Total liabilities	1,112,963	1,124,365

*Commitments and contingencies*

*Shareholders' equity:*
	Common stock, $0.01 par value; 60,000,000 shares
		authorized; 20,556,198 shares issued as of
		both March 31, 2013 and December 31, 2012	206	206
	Additional paid-in-capital		1,184,961	1,169,699
	Deferred compensation trust – 109,623 and
		152,223 shares of NVR, Inc. common
		stock as of March 31, 2013 and
		December 31, 2012, respectively	(17,864)	(25,331)
	Deferred compensation liability		17,864	25,331
	Retained earnings		4,374,121	4,339,080
	Less treasury stock at cost – 15,559,314 and
		15,642,068 shares at March 31, 2013
		and December 31, 2012, respectively	(4,007,196)	(4,028,508)
		Total shareholders' equity	1,552,092	1,480,477
		Total liabilities and shareholders' equity	$ 2,665,055	$ 2,604,842

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

			Three Months Ended March 31,
			2013	2012

*Homebuilding data:*
	New orders (units)
		Mid Atlantic (1)	1,716	1,663
		North East (2)	293	259
		Mid East (3)	949	798
		South East (4)	552	437
		Total	3,510	3,157

	Average new order price		$ 343.0	$ 313.2

	Settlements (units)
		Mid Atlantic (1)	1,138	1,006
		North East (2)	191	169
		Mid East (3)	593	448
		South East (4)	350	301
		Total	2,272	1,924

	Average settlement price		$ 330.4	$ 304.6

	Backlog (units)
		Mid Atlantic (1)	3,261	2,630
		North East (2)	535	466
		Mid East (3)	1,508	1,157
		South East (4)	913	656
		Total	6,217	4,909

	Average backlog price		$ 350.6	$ 318.5

	Community count (average)		435	387
	Lots controlled at end of period		59,700	53,000

*Mortgage banking data:*
	Loan closings		$ 473,766	$ 420,184
	Capture rate		84%	89%

*Common stock information:*
	Shares outstanding at end of period		4,996,884	5,066,030
	Number of shares repurchased		-	-
	Aggregate cost of shares repurchased		$ -	$ -

(1)	Virginia, West Virginia, Maryland, Delaware and Washington, D.C.
(2)	New Jersey and eastern Pennsylvania
(3)	New York, Ohio, western Pennsylvania, Indiana, Illinois and Kentucky
(4)	North Carolina, South Carolina, Florida and Tennessee