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NVR, Inc. Announces Second Quarter Results

RESTON, Va., July 21, 2021 /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, 2021 of $321.3 million, or $82.45 per diluted share.  Net income and diluted earnings per share for the second quarter ended June 30, 2021 increased 96% and 94%, respectively, when compared to 2020 second quarter net income of $164.1 million, or $42.50 per diluted share.  Consolidated revenues for the second quarter of 2021 totaled $2.28 billion, an increase of 41% from $1.62 billion in the second quarter of 2020. 

For the six months ended June 30, 2021, consolidated revenues were $4.33 billion, a 35% increase from $3.20 billion reported in 2020. Net income for the six months ended June 30, 2021 was $570.1 million, an increase of 68% when compared to the six months ended June 30, 2020. Diluted earnings per share for the six months ended June 30, 2021 was $145.53, an increase of 66% from $87.56 per diluted share for 2020.

Homebuilding

New orders in the second quarter of 2021 decreased by 6% to 5,521 units, when compared to 5,901 units in the second quarter of 2020. The average sales price of new orders in the second quarter of 2021 was $440,200, an increase of 20% when compared with the second quarter of 2020.  The cancellation rate in the second quarter of 2021 was 8% compared to 16% in the second quarter of 2020.  Settlements in the second quarter of 2021 increased by 32% to 5,685 units, compared to 4,296 units in the second quarter of 2020. Our backlog of homes sold but not settled as of June 30, 2021 increased on a unit basis by 19% to 12,627 units and increased on a dollar basis by 35% to $5.41 billion when compared to the respective backlog unit and dollar balances as of June 30, 2020.

Homebuilding revenues of $2.22 billion in the second quarter of 2021 increased by 40% compared to homebuilding revenues of $1.59 billion in the second quarter of 2020.  Gross profit margin in the second quarter of 2021 increased to 22.6%, compared to 19.2% in the second quarter of 2020.  Income before tax from the homebuilding segment totaled $378.3 million in the second quarter of 2021, an increase of 94% when compared to the second quarter of 2020.

Mortgage Banking

Mortgage closed loan production in the second quarter of 2021 totaled $1.57 billion, an increase of 37% when compared to the second quarter of 2020.  Income before tax from the mortgage banking segment totaled $39.2 million in the second quarter of 2021, an increase of 161% when compared to $15.0 million in the second quarter of 2020.  This increase was primarily attributable to increased mortgage volume in the second quarter of 2021, coupled with income in the second quarter of 2020 being adversely impacted by disruptions in the mortgage markets related to the COVID-19 pandemic, which resulted in a reduction in fair value of mortgage servicing rights.

Effective Tax Rate

Our effective tax rate for the three and six months ended June 30, 2021 was 23.0% and 21.9%, respectively, compared to 21.8% and 8.5% for the three and six months ended June 30, 2020, respectively. The effective tax rates in each period were favorably impacted by the recognition of an income tax benefit related to excess tax benefits from stock option exercises totaling $11.2 million and $28.6 million for the three and six months ended June 30, 2021, respectively, and $6.9 million and $62.5 million for the three and six months ended June 30, 2020, respectively.

Other Matters - COVID-19

The COVID-19 pandemic has had a significant impact on all facets of our business.  Our primary focus as we face this challenge is to do everything we can to ensure the safety and well-being of our employees, customers and trade partners.  In each of our markets, we continue to operate in accordance with the guidelines issued by the Centers for Disease Control and Prevention as well as state and local health department guidelines, which has resulted in significant changes to the way we conduct business. 

Although current demand for new homes is strong, there remains uncertainty regarding the extent and timing of disruption to our business that may result from COVID-19 and related governmental actions.  There is also uncertainty as to the effects of economic relief efforts on the U.S. economy, unemployment, consumer confidence, demand for our homes and the mortgage market, including lending standards and secondary mortgage markets. We are unable to predict the extent to which this will impact our operational and financial performance including the impact of future developments such as the duration and spread of COVID-19, corresponding governmental actions, and the impact of such on our employees, customers and trade partners.

About NVR

NVR, Inc. operates in two business segments:  homebuilding and mortgage banking.  The homebuilding segment sells and builds homes under the Ryan Homes, NVHomes and Heartland Homes trade names, and operates in thirty-three 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: the impact of COVID-19 on the economy; 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 June 30,


Six Months Ended June 30,



2021


2020


2021


2020










Homebuilding:









Revenues


$

2,224,560



$

1,588,758



$

4,188,271



$

3,144,465


Other income


1,632



2,408



3,218



7,744


Cost of sales


(1,721,673)



(1,284,493)



(3,299,126)



(2,579,236)


Selling, general and administrative


(113,406)



(102,702)



(234,825)



(212,869)


Operating income


391,113



203,971



657,538



360,104


Interest expense


(12,850)



(9,166)



(25,856)



(15,380)


Homebuilding income


378,263



194,805



631,682



344,724











Mortgage Banking:









Mortgage banking fees


59,038



31,610



136,773



58,431


Interest income


2,209



1,854



4,241



4,323


Other income


988



679



1,855



1,328


General and administrative


(22,613)



(18,758)



(44,269)



(36,969)


Interest expense


(420)



(359)



(811)



(631)


Mortgage banking income


39,202



15,026



97,789



26,482











Income before taxes


417,465



209,831



729,471



371,206


Income tax (expense) benefit


(96,170)



(45,756)



(159,414)



(31,428)











Net income


$

321,295



$

164,075



$

570,057



$

339,778











Basic earnings per share


$

88.69



$

44.56



$

156.27



$

92.52











Diluted earnings per share


$

82.45



$

42.50



$

145.53



$

87.56











Basic weighted average shares outstanding


3,623



3,682



3,648



3,673











Diluted weighted average shares outstanding


3,897



3,861



3,917



3,881


 

NVR, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share data)

(unaudited)








June 30, 2021


December 31, 2020

ASSETS





Homebuilding:





Cash and cash equivalents


$

2,597,565



$

2,714,720


Restricted cash


42,543



28,912


Receivables


24,484



18,299


Inventory:





Lots and housing units, covered under sales agreements with customers


1,792,293



1,484,936


Unsold lots and housing units


131,668



123,197


Land under development


7,794



62,790


Building materials and other


41,618



38,159




1,973,373



1,709,082







Contract land deposits, net


425,301



387,628


Property, plant and equipment, net


54,379



57,786


Operating lease right-of-use assets


61,740



53,110


Reorganization value in excess of amounts allocable to identifiable assets, net


41,580



41,580


Other assets


215,168



203,399




5,436,133



5,214,516


Mortgage Banking:





Cash and cash equivalents


20,757



63,547


Restricted cash


3,688



2,334


Mortgage loans held for sale, net


344,680



449,760


Property and equipment, net


4,236



4,544


Operating lease right-of-use assets


11,627



12,439


Reorganization value in excess of amounts allocable to identifiable assets, net


7,347



7,347


Other assets


25,968



22,654




418,303



562,625


Total assets


$

5,854,436



$

5,777,141







 

NVR, Inc.

Consolidated Balance Sheets (Continued)

(in thousands, except share and per share data)

(unaudited)








June 30, 2021


December 31, 2020

LIABILITIES AND SHAREHOLDERS' EQUITY





Homebuilding:





Accounts payable


$

380,957



$

339,867


Accrued expenses and other liabilities


419,454



440,671


Customer deposits


365,443



240,758


Operating lease liabilities


67,413



59,357


Senior notes


1,516,830



1,517,395




2,750,097



2,598,048


Mortgage Banking:





Accounts payable and other liabilities


49,605



62,720


Operating lease liabilities


12,446



13,299




62,051



76,019


Total liabilities


2,812,148



2,674,067







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, 2021 and December 31, 2020


206



206


Additional paid-in capital


2,314,564



2,214,426


Deferred compensation trust – 106,697 shares of NVR, Inc. common stock as of
both June 30, 2021 and December 31, 2020


(16,710)



(16,710)


Deferred compensation liability


16,710



16,710


Retained earnings


9,381,177



8,811,120


Less treasury stock at cost – 16,976,140 and 16,859,753 shares as of June 30, 2021
and December 31, 2020, respectively


(8,653,659)



(7,922,678)


Total shareholders' equity


3,042,288



3,103,074


Total liabilities and shareholders' equity


$

5,854,436



$

5,777,141







 

NVR, Inc.

Operating Activity

(dollars in thousands)

(unaudited)




















Three Months Ended June 30,


Six Months Ended June 30,



2021


2020


2021


2020



Units


Average Price


Units


Average Price


Units


Average Price


Units


Average Price

New orders, net of cancellations:















Mid Atlantic (1)


2,090


$

535.4



2,381


$

443.0



4,381



$

518.1



4,442



$

442.6


North East (2)


394


$

499.3



369


$

375.7



834



$

486.3



727



$

378.9


Mid East (3)


1,320


$

375.7



1,536


$

315.6



3,115



$

361.1



2,761



$

320.3


South East (4)


1,717


$

360.3



1,615


$

296.1



3,505



$

348.7



2,986



$

300.5


Total


5,521


$

440.2



5,901


$

365.4



11,835



$

424.4



10,916



$

368.6






































Three Months Ended June 30,


Six Months Ended June 30,



2021


2020


2021


2020



Units


Average Price


Units


Average Price


Units


Average Price


Units


Average Price

Settlements:

















Mid Atlantic (1)


2,224


$

471.4



1,931


$

434.9



4,234



$

468.7



3,726



$

433.1


North East (2)


433


$

446.3



262


$

374.9



805



$

441.5



543



$

376.3


Mid East (3)


1,404


$

340.6



945


$

317.4



2,667



$

338.6



1,930



$

321.6


South East (4)


1,624


$

310.7



1,158


$

302.9



3,051



$

309.8



2,327



$

303.2


Total


5,685


$

391.3



4,296


$

369.8



10,757



$

389.3



8,526



$

368.8



















 



As of June 30,




2021


2020




Units


Average
Price


Units


Average
Price


Backlog:










Mid Atlantic (1)


4,626


$

517.7



4,328


$

448.7



North East (2)


979


$

485.7



771


$

403.5



Mid East (3)


3,322


$

364.8



2,644


$

327.5



South East (4)


3,700


$

359.0



2,880


$

309.2



Total


12,627


$

428.5



10,623


$

377.5













 

NVR, Inc.

Operating Activity (Continued)

(dollars in thousands)

(unaudited)












Three Months Ended June 30,


Six Months Ended June 30,



2021


2020


2021


2020

Average active communities:









Mid Atlantic (1)


153


188


156


189

North East (2)


32


41


33


40

Mid East (3)


126


141


133


139

South East (4)


109


114


110


111

Total


420


484


432


479





















Three Months Ended June 30,


Six Months Ended June 30,



2021


2020


2021


2020

Homebuilding data:









New order cancellation rate



8.3

%



15.7

%



9.0

%



18.1

%

Lots controlled at end of period






114,100



102,000











Mortgage banking data:









Loan closings


$

1,565,095



$

1,144,428



$

2,977,974



$

2,276,531


Capture rate



89

%



89

%



89

%



90

%










Common stock information:









Shares outstanding at end of period






3,579,190



3,689,088


Number of shares repurchased


78,452





164,975



57,611


Aggregate cost of shares repurchased


$

376,941



$



$

754,366



$

216,582





















(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

 

Cision View original content:https://www.prnewswire.com/news-releases/nvr-inc-announces-second-quarter-results-301337985.html

SOURCE NVR, Inc.

Investor Relations Contact: Curt McKay, (703) 956-4058, ir@nvrinc.com