RESTON, Va., April 21, 2014 /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, 2014 of $23,849,000 or $5.16 per diluted share. Net income and diluted earnings per share for its first quarter ended March 31, 2014 decreased 32% and 25%, respectively, when compared to the 2013 first quarter. Consolidated revenues for the first quarter of 2014 totaled $811,310,000, a 5% increase from $770,256,000 for the comparable 2013 quarter. Income tax expense for the quarter was negatively impacted by $6,879,000 due to the reversal of certain previously recognized tax deductions.
Homebuilding
New orders in the first quarter of 2014 decreased 5% to 3,325 units, when compared to 3,510 units in the first quarter of 2013. The cancellation rate in the first quarter of 2014 was 12% compared to 13% in the first quarter of 2013 and 14% in the fourth quarter of 2013. Settlements decreased in the first quarter of 2014 to 2,211 units, 3% lower than the first quarter of 2013. The Company's backlog of homes sold but not settled as of March 31, 2014 decreased on a unit basis by 3% to 6,059 units, but increased on a dollar basis by 4% to $2,270,474,000 when compared to March 31, 2013.
Homebuilding revenues for the three months ended March 31, 2014 totaled $799,187,000, 6% higher than the year earlier period. Gross profit margins increased to 18.0% in the 2014 first quarter compared to 16.9% for the same period in 2013. The increase in selling, general and administrative expenses was primarily due to higher personnel and selling expenses associated with the increase in the number of communities. Income before tax from the homebuilding segment totaled $48,716,000 in the first quarter of 2014, an increase of 11% when compared to the first quarter of 2013.
Mortgage Banking
Mortgage closed loan production of $472,933,000 for the three months ended March 31, 2014 was flat when compared to the first quarter ended March 31, 2013. Operating income for the mortgage banking operations during the first quarter of 2014 decreased 91% to $991,000, when compared to $11,161,000 reported for the first quarter of 2013. Operating income in the first quarter of 2014 was negatively impacted by a more competitive mortgage lending market, resulting in reduced loan profitability. In addition, general and administrative expenses were higher due to increased staffing in response to increased mortgage regulations and expected higher loan volume.
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 March 31, ------------- 2014 2013 ---- ---- Homebuilding: Revenues $799,187 $750,868 Other income 997 1,026 Cost of sales (655,152) (624,085) Selling, general and administrative (90,632) (78,413) ------- ------- Operating income 54,400 49,396 Interest expense (5,684) (5,452) ------ ------ Homebuilding income 48,716 43,944 ------ ------ Mortgage Banking: Mortgage banking fees 12,123 19,388 Interest income 1,184 955 Other income 59 113 General and administrative (12,265) (9,181) Interest expense (110) (114) ---- ---- Mortgage banking income 991 11,161 --- ------ Income before taxes 49,707 55,105 Income tax expense (25,858) (20,064) ------- ------- Net income $23,849 $35,041 ======= ======= Basic earnings per share $5.34 $7.04 ===== ===== Diluted earnings per share $5.16 $6.84 ===== ===== Basic weighted average shares outstanding 4,467 4,979 ===== ===== Diluted weighted average shares outstanding 4,620 5,122 ===== =====
NVR, Inc. Consolidated Balance Sheets (in thousands, except share and per share data) March 31, 2014 December 31, 2013 -------------- ----------------- ASSETS (Unaudited) Homebuilding: Cash and cash equivalents $874,062 $844,274 Receivables 10,055 9,529 Inventory: Lots and housing units, covered under sales agreements with customers 687,080 568,831 Unsold lots and housing units 98,478 117,467 Land under development 46,083 41,328 Building materials and other 10,357 10,939 ------ ------ 841,998 738,565 Assets related to consolidated variable interest entity 6,588 7,268 Contract land deposits, net 246,204 236,885 Property, plant and equipment, net 34,321 32,599 Reorganization value in excess of amounts allocable to identifiable assets, net 41,580 41,580 Goodwill and finite- lived intangible assets, net 6,401 6,747 Other assets 311,684 307,933 2,372,893 2,225,380 --------- --------- Mortgage Banking: Cash and cash equivalents 4,477 21,311 Mortgage loans held for sale, net 123,833 210,641 Property and equipment, net 4,999 4,699 Reorganization value in excess of amounts allocable to identifiable assets, net 7,347 7,347 Other assets 11,204 16,770 151,860 260,768 ------- ------- Total assets $2,524,753 $2,486,148 ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY Homebuilding: Accounts payable $186,459 $181,687 Accrued expenses and other liabilities 271,875 316,227 Liabilities related to consolidated variable interest entity 1,689 1,646 Non-recourse debt related to consolidated variable interest entity 2,153 3,365 Customer deposits 119,101 101,022 Senior notes 599,098 599,075 1,180,375 1,203,022 --------- --------- Mortgage Banking: Accounts payable and other liabilities 18,296 21,774 18,296 21,774 ------ ------ Total liabilities 1,198,671 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 March 31, 2014 and December 31, 2013 206 206 Additional paid-in- capital 1,259,410 1,212,050 Deferred compensation trust - 109,256 shares of NVR, Inc. common stock as of both March 31, 2014 and December 31, 2013 (17,741) (17,741) Deferred compensation liability 17,741 17,741 Retained earnings 4,629,406 4,605,557 Less treasury stock at cost - 16,061,912 and 16,121,605 shares at March 31, 2014 and December 31, 2013, respectively (4,562,940) (4,556,461) --------- --------- Total shareholders' equity 1,326,082 1,261,352 --------- --------- Total liabilities and shareholders' equity $2,524,753 $2,486,148 ========== ==========
NVR, Inc. Operating Activity (dollars in thousands) (Unaudited) Three Months Ended March 31, ---------------- 2014 2013 ---- ---- Homebuilding data: New orders (units) Mid Atlantic (1) 1,675 1,716 North East (2) 298 293 Mid East (3) 891 949 South East (4) 461 552 Total 3,325 3,510 ===== ===== Average new order price $368.1 $343.0 Settlements (units) Mid Atlantic (1) 1,124 1,138 North East (2) 233 191 Mid East (3) 478 593 South East (4) 376 350 Total 2,211 2,272 ===== ===== Average settlement price $361.4 $330.4 Backlog (units) Mid Atlantic (1) 3,261 3,261 North East (2) 560 535 Mid East (3) 1,445 1,508 South East (4) 793 913 Total 6,059 6,217 ===== ===== Average backlog price $374.7 $350.6 Community count (average) 481 435 Lots controlled at end of period 65,800 59,700 Mortgage banking data: Loan closings $472,933 $473,766 Capture rate 78% 84% Common stock information: Shares outstanding at end of period 4,493,418 4,996,884 Number of shares repurchased 32,377 - Aggregate cost of shares repurchased $32,578 $ -
(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.