News Release
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NVR, Inc. Announces Third Quarter Results
For the nine months ended
Homebuilding
New orders in the third quarter of 2020 increased by 40% to 6,681 units, when compared to 4,766 units in the third quarter of 2019. New orders have been favorably impacted by robust demand attributable to historically low mortgage interest rates and lower resale inventory levels. The average sales price of new orders in the third quarter of 2020 was
Homebuilding revenues of
Mortgage Banking
Mortgage closed loan production in the third quarter of 2020 totaled
Effective Tax Rate
Our effective tax rate for the three and nine months ended
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. We are currently able to operate in all of the markets we serve. In each of our markets, we continue to operate in accordance with the safety guidelines issued by the
There is 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
About NVR
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.
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Consolidated Statements of Income |
||||||||||||||||
(in thousands, except per share data) |
||||||||||||||||
(unaudited) |
||||||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||||
2020 |
2019 |
2020 |
2019 |
|||||||||||||
Homebuilding: |
||||||||||||||||
Revenues |
$ |
1,920,751 |
$ |
1,873,331 |
$ |
5,065,216 |
$ |
5,273,985 |
||||||||
Other income |
1,988 |
6,696 |
9,732 |
18,266 |
||||||||||||
Cost of sales |
(1,536,044) |
(1,518,276) |
(4,115,280) |
(4,282,470) |
||||||||||||
Selling, general and administrative |
(105,741) |
(109,969) |
(318,610) |
(337,913) |
||||||||||||
Operating income |
280,954 |
251,782 |
641,058 |
671,868 |
||||||||||||
Interest expense |
(11,309) |
(6,008) |
(26,689) |
(18,034) |
||||||||||||
Homebuilding income |
269,645 |
245,774 |
614,369 |
653,834 |
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Mortgage Banking: |
||||||||||||||||
Mortgage banking fees |
69,261 |
37,933 |
127,692 |
124,484 |
||||||||||||
Interest income |
2,222 |
3,340 |
6,545 |
8,910 |
||||||||||||
Other income |
887 |
819 |
2,215 |
2,039 |
||||||||||||
General and administrative |
(20,180) |
(20,407) |
(57,149) |
(57,999) |
||||||||||||
Interest expense |
(378) |
(285) |
(1,009) |
(775) |
||||||||||||
Mortgage banking income |
51,812 |
21,400 |
78,294 |
76,659 |
||||||||||||
Income before taxes |
321,457 |
267,174 |
692,663 |
730,493 |
||||||||||||
Income tax expense |
(64,991) |
(43,387) |
(96,419) |
(108,091) |
||||||||||||
Net income |
$ |
256,466 |
$ |
223,787 |
$ |
596,244 |
$ |
622,402 |
||||||||
Basic earnings per share |
$ |
69.19 |
$ |
60.94 |
$ |
161.85 |
$ |
171.43 |
||||||||
Diluted earnings per share |
$ |
65.11 |
$ |
56.11 |
$ |
153.03 |
$ |
156.61 |
||||||||
Basic weighted average shares outstanding |
3,706 |
3,672 |
3,684 |
3,631 |
||||||||||||
Diluted weighted average shares outstanding |
3,939 |
3,988 |
3,896 |
3,974 |
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Consolidated Balance Sheets |
||||||||
(in thousands, except share and per share data) |
||||||||
(unaudited) |
||||||||
|
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ASSETS |
||||||||
Homebuilding: |
||||||||
Cash and cash equivalents |
$ |
2,539,460 |
$ |
1,110,892 |
||||
Restricted cash |
28,026 |
17,943 |
||||||
Receivables |
21,461 |
18,278 |
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Inventory: |
||||||||
Lots and housing units, covered under sales agreements with customers |
1,541,587 |
1,075,420 |
||||||
Unsold lots and housing units |
124,371 |
184,352 |
||||||
Land under development |
63,608 |
69,196 |
||||||
Building materials and other |
33,620 |
18,320 |
||||||
1,763,186 |
1,347,288 |
|||||||
Contract land deposits, net |
377,105 |
413,851 |
||||||
Property, plant and equipment, net |
58,570 |
52,260 |
||||||
Operating lease right-of-use assets |
54,964 |
63,825 |
||||||
Reorganization value in excess of amounts allocable to identifiable assets, net |
41,580 |
41,580 |
||||||
Other assets |
204,343 |
176,144 |
||||||
5,088,695 |
3,242,061 |
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Mortgage Banking: |
||||||||
Cash and cash equivalents |
21,546 |
29,412 |
||||||
Restricted cash |
3,172 |
2,276 |
||||||
Mortgage loans held for sale, net |
340,927 |
492,125 |
||||||
Property and equipment, net |
4,896 |
5,828 |
||||||
Operating lease right-of-use assets |
13,376 |
13,345 |
||||||
Reorganization value in excess of amounts allocable to identifiable assets, net |
7,347 |
7,347 |
||||||
Other assets |
19,961 |
17,421 |
||||||
411,225 |
567,754 |
|||||||
Total assets |
$ |
5,499,920 |
$ |
3,809,815 |
||||
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Consolidated Balance Sheets (Continued) |
||||||||
(in thousands, except share and per share data) |
||||||||
(unaudited) |
||||||||
|
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LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||||
Homebuilding: |
||||||||
Accounts payable |
$ |
342,412 |
$ |
262,987 |
||||
Accrued expenses and other liabilities |
387,757 |
346,035 |
||||||
Customer deposits |
211,122 |
131,886 |
||||||
Operating lease liabilities |
61,382 |
71,095 |
||||||
Senior notes |
1,517,982 |
598,301 |
||||||
2,520,655 |
1,410,304 |
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Mortgage Banking: |
||||||||
Accounts payable and other liabilities |
45,906 |
43,985 |
||||||
Operating lease liabilities |
14,366 |
14,282 |
||||||
60,272 |
58,267 |
|||||||
Total liabilities |
2,580,927 |
1,468,571 |
||||||
Commitments and contingencies |
||||||||
Shareholders' equity: |
||||||||
Common stock, |
206 |
206 |
||||||
Additional paid-in capital |
2,188,207 |
2,055,407 |
||||||
Deferred compensation trust – 106,697 and 107,295 shares of |
(16,710) |
(16,912) |
||||||
Deferred compensation liability |
16,710 |
16,912 |
||||||
Retained earnings |
8,506,116 |
7,909,872 |
||||||
Less treasury stock at cost – 16,836,943 and 16,922,558 shares as of |
(7,775,536) |
(7,624,241) |
||||||
Total shareholders' equity |
2,918,993 |
2,341,244 |
||||||
Total liabilities and shareholders' equity |
$ |
5,499,920 |
$ |
3,809,815 |
||||
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Operating Activity |
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(dollars in thousands) |
||||||||||||||||||||||||||
(unaudited) |
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Three Months Ended |
Nine Months Ended |
|||||||||||||||||||||||||
2020 |
2019 |
2020 |
2019 |
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Units |
Average |
Units |
Average |
Units |
Average |
Units |
Average |
|||||||||||||||||||
New orders, net of cancellations: |
||||||||||||||||||||||||||
Mid |
2,592 |
$ |
455.5 |
2,086 |
$ |
427.7 |
7,034 |
$ |
447.4 |
6,852 |
$ |
419.1 |
||||||||||||||
North East (2) |
542 |
$ |
441.1 |
323 |
$ |
379.0 |
1,269 |
$ |
405.4 |
1,000 |
$ |
378.9 |
||||||||||||||
Mid East (3) |
1,644 |
$ |
335.5 |
1,141 |
$ |
328.6 |
4,405 |
$ |
326.0 |
3,631 |
$ |
322.0 |
||||||||||||||
South East (4) |
1,903 |
$ |
313.0 |
1,216 |
$ |
304.2 |
4,889 |
$ |
305.3 |
3,661 |
$ |
301.6 |
||||||||||||||
Total |
6,681 |
$ |
384.2 |
4,766 |
$ |
369.2 |
17,597 |
$ |
374.5 |
15,144 |
$ |
364.8 |
||||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||||||||||||||
2020 |
2019 |
2020 |
2019 |
|||||||||||||||||||||||
Units |
Average |
Units |
Average |
Units |
Average |
Units |
Average |
|||||||||||||||||||
Settlements: |
||||||||||||||||||||||||||
Mid |
2,172 |
$ |
437.1 |
2,421 |
$ |
418.0 |
5,898 |
$ |
434.6 |
6,890 |
$ |
417.3 |
||||||||||||||
North East (2) |
396 |
$ |
398.9 |
316 |
$ |
381.3 |
939 |
$ |
385.9 |
933 |
$ |
391.0 |
||||||||||||||
Mid East (3) |
1,250 |
$ |
324.0 |
1,255 |
$ |
323.5 |
3,180 |
$ |
322.5 |
3,382 |
$ |
326.5 |
||||||||||||||
South East (4) |
1,362 |
$ |
299.8 |
1,132 |
$ |
295.6 |
3,689 |
$ |
301.9 |
3,132 |
$ |
296.6 |
||||||||||||||
Total |
5,180 |
$ |
370.8 |
5,124 |
$ |
365.5 |
13,706 |
$ |
369.5 |
14,337 |
$ |
367.8 |
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As of |
||||||||||||||||||||||||||
2020 |
2019 |
|||||||||||||||||||||||||
Units |
Average |
Units |
Average |
|||||||||||||||||||||||
Backlog: |
||||||||||||||||||||||||||
Mid |
4,748 |
$ |
457.7 |
4,110 |
$ |
426.4 |
||||||||||||||||||||
North East (2) |
917 |
$ |
427.8 |
630 |
$ |
383.3 |
||||||||||||||||||||
Mid East (3) |
3,038 |
$ |
333.2 |
2,055 |
$ |
327.0 |
||||||||||||||||||||
South East (4) |
3,421 |
$ |
315.1 |
2,377 |
$ |
310.0 |
||||||||||||||||||||
Total |
12,124 |
$ |
384.0 |
9,172 |
$ |
371.0 |
||||||||||||||||||||
|
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Operating Activity (Continued) |
||||||||||||||||
(dollars in thousands) |
||||||||||||||||
(unaudited) |
||||||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||||
2020 |
2019 |
2020 |
2019 |
|||||||||||||
Average active communities: |
||||||||||||||||
Mid |
170 |
201 |
183 |
208 |
||||||||||||
North East (2) |
41 |
34 |
41 |
32 |
||||||||||||
Mid East (3) |
135 |
136 |
138 |
131 |
||||||||||||
South East (4) |
119 |
102 |
113 |
93 |
||||||||||||
Total |
465 |
473 |
475 |
464 |
||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||||
2020 |
2019 |
2020 |
2019 |
|||||||||||||
Homebuilding data: |
||||||||||||||||
New order cancellation rate |
11.8 |
% |
15.7 |
% |
15.8 |
% |
14.3 |
% |
||||||||
Lots controlled at end of period |
103,200 |
102,000 |
||||||||||||||
Mortgage banking data: |
||||||||||||||||
Loan closings |
$ |
1,382,060 |
$ |
1,373,946 |
$ |
3,658,591 |
$ |
3,745,983 |
||||||||
Capture rate |
89 |
% |
90 |
% |
90 |
% |
89 |
% |
||||||||
Common stock information: |
||||||||||||||||
Shares outstanding at end of period |
3,718,387 |
3,698,185 |
||||||||||||||
Number of shares repurchased |
— |
18,024 |
57,611 |
129,679 |
||||||||||||
Aggregate cost of shares repurchased |
$ |
— |
$ |
61,064 |
$ |
216,582 |
$ |
365,542 |
(1) |
|
(2) |
|
(3) |
New |
(4) |
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View original content:http://www.prnewswire.com/news-releases/nvr-inc-announces-third-quarter-results-301155333.html
SOURCE
Investor Relations Contact: Curt McKay, (703) 956-4058, ir@nvrinc.com