RESTON, Va., July 22, 2020 /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, 2020 of $164,075,000, or $42.50 per diluted share. Net income and
diluted earnings per share for the second quarter ended
June 30, 2020 decreased 22% and 20%, respectively, when
compared to 2019 second quarter net income of $210,209,000, or $53.09 per diluted share. Consolidated
revenues for the second quarter of 2020 totaled $1,620,368,000, which decreased 10% from
$1,800,194,000 in the second quarter
of 2019.
For the six months ended June 30, 2020, consolidated
revenues were $3,202,896,000, an 8%
decrease from $3,487,205,000 reported
for 2019. Net income for the six months ended June 30,
2020 was $339,778,000, a decrease of
15% when compared to the six months ended June 30, 2019.
Diluted earnings per share for the six months ended June 30,
2020 was $87.56, a decrease of 13%
from $100.61 per diluted share for
2019.
Homebuilding
New orders in the second quarter of 2020 increased by 13% to
5,901 units, when compared to 5,239 units in the second quarter of
2019. The average sales price of new orders in the second quarter
of 2020 was $365,400, an increase of
2% when compared with the second quarter of 2019. The
cancellation rate in the second quarter of 2020 increased to 16%
compared to 13% in the second quarter of 2019. Settlements
decreased in the second quarter of 2020 to 4,296 units, which was
9% lower than the second quarter of 2019. Our backlog of
homes sold but not settled as of June 30, 2020 increased on
both a unit and dollar basis by 11% and 14%, respectively, to
10,623 units and $4,009,695,000
compared to the respective backlog unit and dollar balances as of
June 30, 2019.
Homebuilding revenues of $1,588,758,000 in the second quarter of 2020
decreased 10% compared to homebuilding revenues of $1,757,448,000 in the second quarter of
2019. Gross profit margin in the second quarter of 2020
increased to 19.2%, compared to 18.9% in the second quarter of
2019. Income before tax from the homebuilding segment totaled
$194,805,000 in the second quarter of
2020, a decrease of 11% when compared to the second quarter of
2019.
Mortgage Banking
Mortgage closed loan production in the second quarter of 2020
totaled $1,144,428,000, a decrease of
7% when compared to the second quarter of 2019. Income before
tax from the mortgage banking segment totaled $15,026,000 in the second quarter of 2020, a
decrease of 40% when compared to $25,062,000 in the second quarter of 2019.
This decrease is due primarily to the reduction in secondary
marketing gains on the sales of loans as a result of the disruption
in the mortgage market related to the COVID-19 pandemic.
Effective Tax Rate
Our effective tax rate for the three and six months ended
June 30, 2020 was 21.8% and 8.5%, respectively, compared to
14.1% and 14.0% for the three and six months ended June 30,
2019, respectively. The effective tax rate in each period was
favorably impacted by the recognition of an income tax benefit
related to excess tax benefits from stock option exercises totaling
$6,854,000 and $62,509,000 for the three and six months ended
June 30, 2020, respectively, and $30,727,000 and $59,205,000, for the three and six months ended
June 30, 2019.
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 Centers for Disease Control and Prevention as well as
state and local guidelines.
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 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-two 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,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
Homebuilding:
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
1,588,758
|
|
|
$
|
1,757,448
|
|
|
$
|
3,144,465
|
|
|
$
|
3,400,654
|
|
Other
income
|
|
2,408
|
|
|
5,833
|
|
|
7,744
|
|
|
11,570
|
|
Cost of
sales
|
|
(1,284,493)
|
|
|
(1,425,388)
|
|
|
(2,579,236)
|
|
|
(2,764,194)
|
|
Selling, general and
administrative
|
|
(102,702)
|
|
|
(112,210)
|
|
|
(212,869)
|
|
|
(227,944)
|
|
Operating
income
|
|
203,971
|
|
|
225,683
|
|
|
360,104
|
|
|
420,086
|
|
Interest
expense
|
|
(9,166)
|
|
|
(6,033)
|
|
|
(15,380)
|
|
|
(12,026)
|
|
Homebuilding
income
|
|
194,805
|
|
|
219,650
|
|
|
344,724
|
|
|
408,060
|
|
|
|
|
|
|
|
|
|
|
Mortgage
Banking:
|
|
|
|
|
|
|
|
|
Mortgage banking
fees
|
|
31,610
|
|
|
42,746
|
|
|
58,431
|
|
|
86,551
|
|
Interest
income
|
|
1,854
|
|
|
2,737
|
|
|
4,323
|
|
|
5,570
|
|
Other
income
|
|
679
|
|
|
681
|
|
|
1,328
|
|
|
1,220
|
|
General and
administrative
|
|
(18,758)
|
|
|
(20,834)
|
|
|
(36,969)
|
|
|
(37,592)
|
|
Interest
expense
|
|
(359)
|
|
|
(268)
|
|
|
(631)
|
|
|
(490)
|
|
Mortgage banking
income
|
|
15,026
|
|
|
25,062
|
|
|
26,482
|
|
|
55,259
|
|
|
|
|
|
|
|
|
|
|
Income before
taxes
|
|
209,831
|
|
|
244,712
|
|
|
371,206
|
|
|
463,319
|
|
Income tax
expense
|
|
(45,756)
|
|
|
(34,503)
|
|
|
(31,428)
|
|
|
(64,704)
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
164,075
|
|
|
$
|
210,209
|
|
|
$
|
339,778
|
|
|
$
|
398,615
|
|
|
|
|
|
|
|
|
|
|
Basic earnings
per share
|
|
$
|
44.56
|
|
|
$
|
58.20
|
|
|
$
|
92.52
|
|
|
$
|
110.43
|
|
|
|
|
|
|
|
|
|
|
Diluted
earnings per share
|
|
$
|
42.50
|
|
|
$
|
53.09
|
|
|
$
|
87.56
|
|
|
$
|
100.61
|
|
|
|
|
|
|
|
|
|
|
Basic weighted
average shares outstanding
|
|
3,682
|
|
|
3,612
|
|
|
3,673
|
|
|
3,610
|
|
|
|
|
|
|
|
|
|
|
Diluted
weighted average shares outstanding
|
|
3,861
|
|
|
3,959
|
|
|
3,881
|
|
|
3,962
|
|
NVR,
Inc.
|
Consolidated Balance
Sheets
|
(in thousands, except
share and per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
June 30,
2020
|
|
December 31,
2019
|
ASSETS
|
|
|
|
|
Homebuilding:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
1,982,890
|
|
|
$
|
1,110,892
|
|
Restricted
cash
|
|
24,650
|
|
|
17,943
|
|
Receivables
|
|
20,801
|
|
|
18,278
|
|
Inventory:
|
|
|
|
|
Lots and housing
units, covered under sales agreements with customers
|
|
1,340,444
|
|
|
1,075,420
|
|
Unsold lots and
housing units
|
|
172,394
|
|
|
184,352
|
|
Land under
development
|
|
69,323
|
|
|
69,196
|
|
Building materials and
other
|
|
20,379
|
|
|
18,320
|
|
|
|
1,602,540
|
|
|
1,347,288
|
|
|
|
|
|
|
Contract land
deposits, net
|
|
360,978
|
|
|
413,851
|
|
Property, plant and
equipment, net
|
|
50,459
|
|
|
52,260
|
|
Operating lease
right-of-use assets
|
|
57,701
|
|
|
63,825
|
|
Reorganization value
in excess of amounts allocable to identifiable assets,
net
|
|
41,580
|
|
|
41,580
|
|
Other
assets
|
|
196,498
|
|
|
176,144
|
|
|
|
4,338,097
|
|
|
3,242,061
|
|
Mortgage
Banking:
|
|
|
|
|
Cash and cash
equivalents
|
|
17,986
|
|
|
29,412
|
|
Restricted
cash
|
|
2,199
|
|
|
2,276
|
|
Mortgage loans held
for sale, net
|
|
325,208
|
|
|
492,125
|
|
Property and
equipment, net
|
|
5,258
|
|
|
5,828
|
|
Operating lease
right-of-use assets
|
|
14,226
|
|
|
13,345
|
|
Reorganization value
in excess of amounts allocable to identifiable assets,
net
|
|
7,347
|
|
|
7,347
|
|
Other
assets
|
|
19,699
|
|
|
17,421
|
|
|
|
391,923
|
|
|
567,754
|
|
Total
assets
|
|
$
|
4,730,020
|
|
|
$
|
3,809,815
|
|
|
|
|
|
|
NVR,
Inc.
|
Consolidated Balance
Sheets (Continued)
|
(in thousands, except
share and per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
June 30,
2020
|
|
December 31,
2019
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Homebuilding:
|
|
|
|
|
Accounts
payable
|
|
$
|
294,254
|
|
|
$
|
262,987
|
|
Accrued expenses and
other liabilities
|
|
349,113
|
|
|
346,035
|
|
Customer
deposits
|
|
158,016
|
|
|
131,886
|
|
Operating lease
liabilities
|
|
64,540
|
|
|
71,095
|
|
Senior
notes
|
|
1,193,962
|
|
|
598,301
|
|
|
|
2,059,885
|
|
|
1,410,304
|
|
Mortgage
Banking:
|
|
|
|
|
Accounts payable and
other liabilities
|
|
42,500
|
|
|
43,985
|
|
Operating lease
liabilities
|
|
15,223
|
|
|
14,282
|
|
|
|
57,723
|
|
|
58,267
|
|
Total
liabilities
|
|
2,117,608
|
|
|
1,468,571
|
|
|
|
|
|
|
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, 2020 and December 31, 2019
|
|
206
|
|
|
206
|
|
Additional paid-in
capital
|
|
2,151,623
|
|
|
2,055,407
|
|
Deferred compensation
trust – 106,697 and 107,295 shares of NVR, Inc. common stock as of
June 30, 2020 and December 31, 2019, respectively
|
|
(16,710)
|
|
|
(16,912)
|
|
Deferred compensation
liability
|
|
16,710
|
|
|
16,912
|
|
Retained
earnings
|
|
8,249,650
|
|
|
7,909,872
|
|
Less treasury stock at
cost – 16,866,242 and 16,922,558 shares as of June 30, 2020 and
December 31, 2019, respectively
|
|
(7,789,067)
|
|
|
(7,624,241)
|
|
Total shareholders'
equity
|
|
2,612,412
|
|
|
2,341,244
|
|
Total liabilities
and shareholders' equity
|
|
$
|
4,730,020
|
|
|
$
|
3,809,815
|
|
|
|
|
|
|
NVR,
Inc.
|
Operating
Activity
|
(dollars in
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
Units
|
|
Average
Price
|
|
Units
|
|
Average
Price
|
|
Units
|
|
Average
Price
|
|
Units
|
|
Average
Price
|
New orders, net
of cancellations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mid Atlantic
(1)
|
|
2,381
|
|
$
|
443.0
|
|
|
2,322
|
|
$
|
411.3
|
|
|
4,442
|
|
|
$
|
442.6
|
|
|
4,766
|
|
|
$
|
415.3
|
|
North East
(2)
|
|
369
|
|
$
|
375.7
|
|
|
364
|
|
$
|
376.5
|
|
|
727
|
|
|
$
|
378.9
|
|
|
677
|
|
|
$
|
378.8
|
|
Mid East
(3)
|
|
1,536
|
|
$
|
315.6
|
|
|
1,276
|
|
$
|
317.9
|
|
|
2,761
|
|
|
$
|
320.3
|
|
|
2,490
|
|
|
$
|
319.0
|
|
South East
(4)
|
|
1,615
|
|
$
|
296.1
|
|
|
1,277
|
|
$
|
298.4
|
|
|
2,986
|
|
|
$
|
300.5
|
|
|
2,445
|
|
|
$
|
300.3
|
|
Total
|
|
5,901
|
|
$
|
365.4
|
|
|
5,239
|
|
$
|
358.6
|
|
|
10,916
|
|
|
$
|
368.6
|
|
|
10,378
|
|
|
$
|
362.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
Units
|
|
Average
Price
|
|
Units
|
|
Average
Price
|
|
Units
|
|
Average
Price
|
|
Units
|
|
Average
Price
|
Settlements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mid Atlantic
(1)
|
|
1,931
|
|
$
|
434.9
|
|
|
2,326
|
|
$
|
422.2
|
|
|
3,726
|
|
|
$
|
433.1
|
|
|
4,469
|
|
|
$
|
416.9
|
|
North East
(2)
|
|
262
|
|
$
|
374.9
|
|
|
314
|
|
$
|
387.7
|
|
|
543
|
|
|
$
|
376.3
|
|
|
617
|
|
|
$
|
396.1
|
|
Mid East
(3)
|
|
945
|
|
$
|
317.4
|
|
|
1,097
|
|
$
|
328.0
|
|
|
1,930
|
|
|
$
|
321.6
|
|
|
2,127
|
|
|
$
|
328.3
|
|
South East
(4)
|
|
1,158
|
|
$
|
302.9
|
|
|
983
|
|
$
|
298.8
|
|
|
2,327
|
|
|
$
|
303.2
|
|
|
2,000
|
|
|
$
|
297.2
|
|
Total
|
|
4,296
|
|
$
|
369.8
|
|
|
4,720
|
|
$
|
372.3
|
|
|
8,526
|
|
|
$
|
368.8
|
|
|
9,213
|
|
|
$
|
369.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of June
30,
|
|
|
|
2020
|
|
2019
|
|
|
|
Units
|
|
Average
Price
|
|
Units
|
|
Average
Price
|
|
Backlog:
|
|
|
|
|
|
|
|
|
|
Mid Atlantic
(1)
|
|
4,328
|
|
$
|
448.7
|
|
|
4,445
|
|
$
|
421.2
|
|
|
North East
(2)
|
|
771
|
|
$
|
403.5
|
|
|
623
|
|
$
|
384.4
|
|
|
Mid East
(3)
|
|
2,644
|
|
$
|
327.5
|
|
|
2,169
|
|
$
|
324.2
|
|
|
South East
(4)
|
|
2,880
|
|
$
|
309.2
|
|
|
2,293
|
|
$
|
306.0
|
|
|
Total
|
|
10,623
|
|
$
|
377.5
|
|
|
9,530
|
|
$
|
369.0
|
|
|
|
|
|
|
|
|
|
|
|
|
NVR,
Inc.
|
Operating Activity
(Continued)
|
(dollars in
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Average active
communities:
|
|
|
|
|
|
|
|
|
Mid Atlantic
(1)
|
|
188
|
|
211
|
|
189
|
|
211
|
North East
(2)
|
|
41
|
|
34
|
|
40
|
|
32
|
Mid East
(3)
|
|
141
|
|
131
|
|
139
|
|
128
|
South East
(4)
|
|
114
|
|
94
|
|
111
|
|
89
|
Total
|
|
484
|
|
470
|
|
479
|
|
460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Homebuilding
data:
|
|
|
|
|
|
|
|
|
New order
cancellation rate
|
|
15.7
|
%
|
|
13.1
|
%
|
|
18.1
|
%
|
|
13.6
|
%
|
Lots controlled at
end of period
|
|
|
|
|
|
102,000
|
|
101,400
|
|
|
|
|
|
|
|
|
|
Mortgage banking
data:
|
|
|
|
|
|
|
|
|
Loan
closings
|
|
$
|
1,144,428
|
|
|
$
|
1,231,039
|
|
|
$
|
2,276,531
|
|
|
$
|
2,372,037
|
|
Capture
rate
|
|
89
|
%
|
|
89
|
%
|
|
90
|
%
|
|
89
|
%
|
|
|
|
|
|
|
|
|
|
Common stock
information:
|
|
|
|
|
|
|
|
|
Shares outstanding at
end of period
|
|
|
|
|
|
3,689,088
|
|
|
3,643,596
|
|
Number of shares
repurchased
|
|
—
|
|
|
29,826
|
|
|
57,611
|
|
|
111,655
|
|
Aggregate cost of
shares repurchased
|
|
$
|
—
|
|
|
$
|
87,980
|
|
|
$
|
216,582
|
|
|
$
|
304,479
|
|
|
|
(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-second-quarter-results-301097535.html
SOURCE NVR, Inc.