RESTON, Va., Oct. 19, 2017 /PRNewswire/ -- NVR, Inc.
(NYSE: NVR), one of the nation's largest homebuilding and
mortgage banking companies, announced net income for its third
quarter ended September 30, 2017 of $162,102,000, or $38.02 per diluted share. Net income and
diluted earnings per share for the third quarter ended
September 30, 2017 increased 38% and 34%, respectively, when
compared to the 2016 third quarter net income of $117,392,000, or $28.46 per diluted share. Consolidated
revenues for the third quarter of 2017 totaled $1,667,920,000, an 8% increase from $1,537,569,000 in the third quarter of 2016.
For the nine months ended September 30, 2017, consolidated
revenues were $4,489,504,000, a 10%
increase from $4,069,778,000 reported
for the same period of 2016. Net income for the nine months
ended September 30, 2017 was $412,902,000, an increase of 50% when compared to
the nine months ended September 30, 2016. Diluted
earnings per share for the nine months ended September 30,
2017 was $98.33, an increase of 48%
from $66.24 per diluted share for the
comparable period of 2016.
Homebuilding
New orders in the third quarter of 2017 increased 21% to 4,200
units, when compared to 3,477 units in the third quarter of 2016.
The average sales price of new orders in the third quarter of 2017
was $382,800, a decrease of 3% when
compared with the third quarter of 2016. The decrease in the
average sales price of new orders is primarily attributable to a
shift in new orders to lower priced markets and lower priced
products. Settlements increased in the third quarter of 2017
to 4,158 units, 6% higher than the third quarter of 2016. The
Company's backlog of homes sold but not settled as of
September 30, 2017 increased on a unit basis by 16% to 8,855
units and increased on a dollar basis by 15% to $3,418,710,000 when compared to
September 30, 2016.
Homebuilding revenues in the third quarter of 2017 totaled
$1,633,726,000, 8% higher than the
year earlier period. Gross profit margin in the third quarter
of 2017 increased to 19.9%, compared to 17.6% in the third 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 $226,043,000 in the third
quarter of 2017, an increase of 35% when compared to the third
quarter of 2016.
Mortgage Banking
Mortgage closed loan production in the third quarter of 2017
totaled $1,115,494,000, an increase
of 6% when compared to the third quarter of 2016. Income before tax
from the mortgage banking segment totaled $18,421,000 in the third quarter of 2017, an
increase of 6% when compared to the third 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 nine months ended September 30, 2017 to 33.7%
and 29.5%, respectively, compared to 36.5% and 36.6% for the three
and nine months ended September 30, 2016, respectively.
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 $8,357,000 and $44,720,000 related to excess tax benefits from
stock option exercises during the three and nine months ended
September 30, 2017, respectively. For the three and nine
months ended September 30, 2016, the excess tax benefits of
$2,271,000 and $10,949,000, 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 nine months
ended September 30, 2017, the effective tax rate would have
been 37.1% for both periods. Additionally, the excess tax
benefits recognized during the three and nine months ended
September 30, 2017 favorably impacted diluted earnings per
share by $1.96 and $10.65 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
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Homebuilding:
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
1,633,726
|
|
|
$
|
1,507,451
|
|
|
$
|
4,394,027
|
|
|
$
|
3,990,696
|
|
Other
income
|
|
1,715
|
|
|
703
|
|
|
4,264
|
|
|
2,223
|
|
Cost of
sales
|
|
(1,307,971)
|
|
|
(1,242,292)
|
|
|
(3,552,071)
|
|
|
(3,294,421)
|
|
Selling, general and
administrative
|
|
(95,606)
|
|
|
(92,867)
|
|
|
(294,610)
|
|
|
(290,925)
|
|
Operating
income
|
|
231,864
|
|
|
172,995
|
|
|
551,610
|
|
|
407,573
|
|
Interest
expense
|
|
(5,821)
|
|
|
(5,338)
|
|
|
(17,040)
|
|
|
(14,734)
|
|
Homebuilding
income
|
|
226,043
|
|
|
167,657
|
|
|
534,570
|
|
|
392,839
|
|
|
|
|
|
|
|
|
|
|
Mortgage
Banking:
|
|
|
|
|
|
|
|
|
Mortgage banking
fees
|
|
34,194
|
|
|
30,118
|
|
|
95,477
|
|
|
79,082
|
|
Interest
income
|
|
1,953
|
|
|
2,000
|
|
|
5,168
|
|
|
5,111
|
|
Other
income
|
|
583
|
|
|
473
|
|
|
1,398
|
|
|
1,140
|
|
General and
administrative
|
|
(18,010)
|
|
|
(14,959)
|
|
|
(50,190)
|
|
|
(44,345)
|
|
Interest
expense
|
|
(299)
|
|
|
(286)
|
|
|
(830)
|
|
|
(792)
|
|
Mortgage banking
income
|
|
18,421
|
|
|
17,346
|
|
|
51,023
|
|
|
40,196
|
|
|
|
|
|
|
|
|
|
|
Income before
taxes
|
|
244,464
|
|
|
185,003
|
|
|
585,593
|
|
|
433,035
|
|
Income tax
expense
|
|
(82,362)
|
|
|
(67,611)
|
|
|
(172,691)
|
|
|
(158,664)
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
162,102
|
|
|
$
|
117,392
|
|
|
$
|
412,902
|
|
|
$
|
274,371
|
|
|
|
|
|
|
|
|
|
|
Basic earnings
per share
|
|
$
|
43.26
|
|
|
$
|
30.43
|
|
|
$
|
110.60
|
|
|
$
|
70.70
|
|
|
|
|
|
|
|
|
|
|
Diluted
earnings per share
|
|
$
|
38.02
|
|
|
$
|
28.46
|
|
|
$
|
98.33
|
|
|
$
|
66.24
|
|
|
|
|
|
|
|
|
|
|
Basic weighted
average shares outstanding
|
|
3,747
|
|
|
3,858
|
|
|
3,733
|
|
|
3,881
|
|
|
|
|
|
|
|
|
|
|
Diluted
weighted average shares outstanding
|
|
4,263
|
|
|
4,125
|
|
|
4,199
|
|
|
4,142
|
|
NVR,
Inc.
Consolidated Balance
Sheets
(in thousands, except
share and per share data)
(unaudited)
|
|
|
|
|
|
|
|
September 30,
2017
|
|
December 31,
2016
|
ASSETS
|
|
|
|
|
Homebuilding:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
611,094
|
|
|
$
|
375,748
|
|
Restricted
cash
|
|
13,797
|
|
|
17,561
|
|
Receivables
|
|
20,448
|
|
|
18,937
|
|
Inventory:
|
|
|
|
|
Lots and housing
units, covered under sales agreements with customers
|
|
1,187,508
|
|
|
883,868
|
|
Unsold lots and
housing units
|
|
158,049
|
|
|
145,065
|
|
Land under
development
|
|
19,182
|
|
|
46,999
|
|
Building materials
and other
|
|
11,820
|
|
|
16,168
|
|
|
|
1,376,559
|
|
|
1,092,100
|
|
Assets related to
consolidated variable interest entity
|
|
1,222
|
|
|
1,251
|
|
Contract land
deposits, net
|
|
365,142
|
|
|
379,844
|
|
Property, plant and
equipment, net
|
|
43,822
|
|
|
45,915
|
|
Reorganization value
in excess of amounts allocable to identifiable assets,
net
|
|
41,580
|
|
|
41,580
|
|
Goodwill and
finite-lived intangible assets, net
|
|
1,563
|
|
|
2,599
|
|
Other
assets
|
|
266,572
|
|
|
257,811
|
|
|
|
2,741,799
|
|
|
2,233,346
|
|
Mortgage
Banking:
|
|
|
|
|
Cash and cash
equivalents
|
|
15,790
|
|
|
19,657
|
|
Restricted
cash
|
|
2,075
|
|
|
1,857
|
|
Mortgage loans held
for sale, net
|
|
258,554
|
|
|
351,958
|
|
Property and
equipment, net
|
|
6,308
|
|
|
4,903
|
|
Reorganization value
in excess of amounts allocable to identifiable assets,
net
|
|
7,347
|
|
|
7,347
|
|
Other
assets
|
|
17,638
|
|
|
24,875
|
|
|
|
307,712
|
|
|
410,597
|
|
Total
assets
|
|
$
|
3,049,511
|
|
|
$
|
2,643,943
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Homebuilding:
|
|
|
|
|
Accounts
payable
|
|
$
|
267,039
|
|
|
$
|
251,212
|
|
Accrued expenses and
other liabilities
|
|
337,932
|
|
|
336,318
|
|
Liabilities related
to consolidated variable interest entity
|
|
853
|
|
|
882
|
|
Customer
deposits
|
|
162,285
|
|
|
122,236
|
|
Senior
notes
|
|
596,913
|
|
|
596,455
|
|
|
|
1,365,022
|
|
|
1,307,103
|
|
Mortgage
Banking:
|
|
|
|
|
Accounts payable and
other liabilities
|
|
33,813
|
|
|
32,399
|
|
|
|
33,813
|
|
|
32,399
|
|
Total
liabilities
|
|
1,398,835
|
|
|
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 September 30, 2017 and December 31, 2016
|
|
206
|
|
|
206
|
|
Additional paid-in
capital
|
|
1,626,112
|
|
|
1,515,828
|
|
Deferred compensation
trust – 108,638 and 108,640 shares of NVR, Inc. common stock as of
September 30, 2017 and December 31, 2016, respectively
|
|
(17,376)
|
|
|
(17,375)
|
|
Deferred compensation
liability
|
|
17,376
|
|
|
17,375
|
|
Retained
earnings
|
|
6,107,321
|
|
|
5,695,376
|
|
Less treasury stock
at cost – 16,819,467 and 16,862,327 shares as of September 30, 2017
and December 31, 2016, respectively
|
|
(6,082,963)
|
|
|
(5,906,969)
|
|
Total
shareholders' equity
|
|
1,650,676
|
|
|
1,304,441
|
|
Total liabilities
and shareholders' equity
|
|
$
|
3,049,511
|
|
|
$
|
2,643,943
|
|
NVR,
Inc.
Operating
Activity
(dollars in
thousands)
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Homebuilding
data:
|
|
|
|
|
|
|
|
|
New orders
(units)
|
|
|
|
|
|
|
|
|
Mid Atlantic
(1)
|
|
2,113
|
|
|
1,817
|
|
|
6,501
|
|
|
6,088
|
|
North East
(2)
|
|
346
|
|
|
305
|
|
|
1,066
|
|
|
960
|
|
Mid East
(3)
|
|
939
|
|
|
769
|
|
|
3,218
|
|
|
2,829
|
|
South East
(4)
|
|
802
|
|
|
586
|
|
|
2,517
|
|
|
2,061
|
|
Total
|
|
4,200
|
|
|
3,477
|
|
|
13,302
|
|
|
11,938
|
|
|
|
|
|
|
|
|
|
|
Average new order
price
|
|
$
|
382.8
|
|
|
$
|
392.8
|
|
|
$
|
384.0
|
|
|
$
|
383.6
|
|
|
|
|
|
|
|
|
|
|
Settlements
(units)
|
|
|
|
|
|
|
|
|
Mid Atlantic
(1)
|
|
2,048
|
|
|
1,984
|
|
|
5,682
|
|
|
5,201
|
|
North East
(2)
|
|
333
|
|
|
330
|
|
|
930
|
|
|
896
|
|
Mid East
(3)
|
|
1,021
|
|
|
1,013
|
|
|
2,693
|
|
|
2,708
|
|
South East
(4)
|
|
756
|
|
|
595
|
|
|
2,026
|
|
|
1,704
|
|
Total
|
|
4,158
|
|
|
3,922
|
|
|
11,331
|
|
|
10,509
|
|
|
|
|
|
|
|
|
|
|
Average settlement
price
|
|
$
|
392.9
|
|
|
$
|
384.1
|
|
|
$
|
387.7
|
|
|
$
|
378.0
|
|
|
|
|
|
|
|
|
|
|
Backlog
(units)
|
|
|
|
|
|
|
|
|
Mid Atlantic
(1)
|
|
|
|
|
|
4,360
|
|
|
4,024
|
|
North East
(2)
|
|
|
|
|
|
744
|
|
|
604
|
|
Mid East
(3)
|
|
|
|
|
|
2,024
|
|
|
1,619
|
|
South East
(4)
|
|
|
|
|
|
1,727
|
|
|
1,411
|
|
Total
|
|
|
|
|
|
8,855
|
|
|
7,658
|
|
|
|
|
|
|
|
|
|
|
Average backlog
price
|
|
|
|
|
|
$
|
386.1
|
|
|
$
|
389.4
|
|
|
|
|
|
|
|
|
|
|
New order
cancellation rate
|
|
13
|
%
|
|
18
|
%
|
|
14
|
%
|
|
15
|
%
|
Community count
(average)
|
|
479
|
|
|
484
|
|
|
485
|
|
|
482
|
|
Lots controlled at
end of period
|
|
|
|
|
|
84,000
|
|
|
77,300
|
|
|
|
|
|
|
|
|
|
|
Mortgage banking
data:
|
|
|
|
|
|
|
|
|
Loan
closings
|
|
$
|
1,115,494
|
|
|
$
|
1,055,163
|
|
|
$
|
3,000,448
|
|
|
$
|
2,751,410
|
|
Capture
rate
|
|
88
|
%
|
|
88
|
%
|
|
87
|
%
|
|
88
|
%
|
|
|
|
|
|
|
|
|
|
Common stock
information:
|
|
|
|
|
|
|
|
|
Shares outstanding at
end of period
|
|
|
|
|
|
3,735,863
|
|
|
3,789,295
|
|
Number of shares
repurchased
|
|
26,630
|
|
|
116,318
|
|
|
110,392
|
|
|
178,306
|
|
Aggregate cost of
shares repurchased
|
|
$
|
70,693
|
|
|
$
|
195,235
|
|
|
$
|
230,199
|
|
|
$
|
291,743
|
|
(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-third-quarter-results-300539456.html
SOURCE NVR, Inc.