RESTON, Va., Oct. 18, 2019 /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, 2019 of $223,787,000, or $56.11 per diluted share. Net income and diluted
earnings per share for the third quarter ended September 30, 2019 increased 14% and 16%,
respectively, when compared to 2018 third quarter net income of
$195,816,000, or $48.28 per diluted share. Consolidated revenues
for the third quarter of 2019 totaled $1,911,264,000, a 3% increase from $1,852,407,000 in the third quarter of 2018.
For the nine months ended September 30,
2019, consolidated revenues were $5,398,469,000, a 4% increase from $5,169,126,000 reported for 2018. Net income for
the nine months ended September 30,
2019 was $622,402,000, an
increase of 10% when compared to the nine months ended September 30, 2018. Diluted earnings per share
for the nine months ended September 30,
2019 was $156.61, an increase
of 15% from $136.53 per diluted share
for 2018.
The Company's effective tax rate for the three and nine months
ended September 30, 2019 decreased to
16.2% and 14.8%, respectively, compared to 21.6% and 17.2% for the
three and nine months ended September 30,
2018, respectively. The effective tax rate was favorably
impacted by an increase in the income tax benefit recognized
related to excess tax benefits from stock option exercises totaling
$27,604,000 and $86,809,000 for three and nine months ended
September 30, 2019, respectively,
compared to $12,585,000 and
$58,607,000, for the three and nine
months ended September 30, 2018,
respectively.
Homebuilding
New orders in the third quarter of
2019 increased by 11% to 4,766 units, when compared to 4,302 units
in the third quarter of 2018. The average sales price of new orders
in the third quarter of 2019 was $369,200, a decrease of 1% when compared with the
third quarter of 2018. Settlements increased in the third quarter
of 2019 to 5,124 units, which was 8% higher than the third quarter
of 2018. The Company's backlog of homes sold but not settled as of
September 30, 2019 decreased on a
unit basis by 6% to 9,172 units and decreased on a dollar basis by
7% to $3,402,933,000 when compared to
September 30, 2018.
Homebuilding revenues of $1,873,331,000 in the third quarter of 2019
increased 4% compared to the third quarter of 2018. Gross profit
margin in the third quarter of 2019 increased to 19.0%, compared to
18.6% in the third quarter of 2018. Income before tax from the
homebuilding segment totaled $245,774,000 in the third quarter of 2019, an
increase of 10% when compared to the third quarter of 2018.
Mortgage Banking
Mortgage closed loan
production in the third quarter of 2019 totaled $1,373,946,000, an increase of 10% when compared
to the third quarter of 2018. Income before tax from the mortgage
banking segment totaled $21,400,000
in the third quarter of 2019, a decrease of 16% when compared to
$25,514,000 in the third quarter of
2018. The decrease in income before tax is primarily due to a 12%
decrease in mortgage banking fees, resulting from the timing of
loan sales and a decrease in the fair value measurement
adjustment.
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: 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,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
Homebuilding:
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
1,873,331
|
|
$
|
1,809,345
|
|
$
|
5,273,985
|
|
$
|
5,049,901
|
Other
income
|
|
6,696
|
|
2,840
|
|
18,266
|
|
6,981
|
Cost of
sales
|
|
(1,518,276)
|
|
(1,472,649)
|
|
(4,282,470)
|
|
(4,101,392)
|
Selling, general and
administrative
|
|
(109,969)
|
|
(109,372)
|
|
(337,913)
|
|
(321,436)
|
Operating
income
|
|
251,782
|
|
230,164
|
|
671,868
|
|
634,054
|
Interest
expense
|
|
(6,008)
|
|
(5,968)
|
|
(18,034)
|
|
(18,022)
|
Homebuilding
income
|
|
245,774
|
|
224,196
|
|
653,834
|
|
616,032
|
|
|
|
|
|
|
|
|
|
Mortgage
Banking:
|
|
|
|
|
|
|
|
|
Mortgage banking
fees
|
|
37,933
|
|
43,062
|
|
124,484
|
|
119,225
|
Interest
income
|
|
3,340
|
|
3,362
|
|
8,910
|
|
8,370
|
Other
income
|
|
819
|
|
659
|
|
2,039
|
|
1,824
|
General and
administrative
|
|
(20,407)
|
|
(21,340)
|
|
(57,999)
|
|
(62,371)
|
Interest
expense
|
|
(285)
|
|
(229)
|
|
(775)
|
|
(786)
|
Mortgage banking
income
|
|
21,400
|
|
25,514
|
|
76,659
|
|
66,262
|
|
|
|
|
|
|
|
|
|
Income before
taxes
|
|
267,174
|
|
249,710
|
|
730,493
|
|
682,294
|
Income tax
expense
|
|
(43,387)
|
|
(53,894)
|
|
(108,091)
|
|
(117,255)
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
223,787
|
|
$
|
195,816
|
|
$
|
622,402
|
|
$
|
565,039
|
|
|
|
|
|
|
|
|
|
Basic earnings
per share
|
|
$
|
60.94
|
|
$
|
54.21
|
|
$
|
171.43
|
|
$
|
155.22
|
|
|
|
|
|
|
|
|
|
Diluted
earnings per share
|
|
$
|
56.11
|
|
$
|
48.28
|
|
$
|
156.61
|
|
$
|
136.53
|
|
|
|
|
|
|
|
|
|
Basic weighted
average shares outstanding
|
|
3,672
|
|
3,612
|
|
3,631
|
|
3,640
|
|
|
|
|
|
|
|
|
|
Diluted
weighted average shares outstanding
|
|
3,988
|
|
4,056
|
|
3,974
|
|
4,139
|
NVR,
Inc.
|
Consolidated Balance
Sheets
|
(in thousands, except
share and per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
September 30,
2019
|
|
December 31,
2018
|
ASSETS
|
|
|
|
|
Homebuilding:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
1,068,172
|
|
$
|
688,783
|
Restricted
cash
|
|
18,337
|
|
16,982
|
Receivables
|
|
29,276
|
|
18,641
|
Inventory:
|
|
|
|
|
Lots and housing
units, covered under sales agreements with customers
|
|
1,236,831
|
|
1,076,904
|
Unsold lots and
housing units
|
|
161,417
|
|
115,631
|
Land under
development
|
|
80,193
|
|
38,857
|
Building materials and
other
|
|
18,008
|
|
21,718
|
|
|
1,496,449
|
|
1,253,110
|
|
|
|
|
|
Contract land
deposits, net
|
|
404,850
|
|
396,177
|
Property, plant and
equipment, net
|
|
50,463
|
|
42,234
|
Operating lease
right-of-use assets
|
|
63,505
|
|
—
|
Reorganization value
in excess of amounts allocable to identifiable assets,
net
|
|
41,580
|
|
41,580
|
Other
assets
|
|
181,234
|
|
184,004
|
|
|
3,353,866
|
|
2,641,511
|
Mortgage
Banking:
|
|
|
|
|
Cash and cash
equivalents
|
|
26,765
|
|
23,092
|
Restricted
cash
|
|
2,493
|
|
3,071
|
Mortgage loans held
for sale, net
|
|
411,223
|
|
458,324
|
Property and
equipment, net
|
|
6,058
|
|
6,510
|
Operating lease
right-of-use assets
|
|
13,857
|
|
—
|
Reorganization value
in excess of amounts allocable to identifiable assets,
net
|
|
7,347
|
|
7,347
|
Other
assets
|
|
21,750
|
|
26,078
|
|
|
489,493
|
|
524,422
|
Total
assets
|
|
$
|
3,843,359
|
|
$
|
3,165,933
|
|
|
|
|
|
NVR,
Inc.
|
Consolidated Balance
Sheets (Continued)
|
(in thousands, except
share and per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
September 30,
2019
|
|
December 31,
2018
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Homebuilding:
|
|
|
|
|
Accounts
payable
|
|
$
|
285,714
|
|
$
|
244,496
|
Accrued expenses and
other liabilities
|
|
319,347
|
|
332,871
|
Customer
deposits
|
|
142,937
|
|
138,246
|
Operating lease
liabilities
|
|
70,864
|
|
—
|
Senior
notes
|
|
598,146
|
|
597,681
|
|
|
1,417,008
|
|
1,313,294
|
Mortgage
Banking:
|
|
|
|
|
Accounts payable and
other liabilities
|
|
40,084
|
|
44,077
|
Operating lease
liabilities
|
|
14,810
|
|
—
|
|
|
54,894
|
|
44,077
|
Total
liabilities
|
|
1,471,902
|
|
1,357,371
|
|
|
|
|
|
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, 2019 and December 31, 2018
|
|
206
|
|
206
|
Additional paid-in
capital
|
|
2,020,180
|
|
1,820,223
|
Deferred compensation
trust – 107,295 and 107,340 shares of NVR, Inc. common stock as of
September 30, 2019 and December 31, 2018, respectively
|
|
(16,912)
|
|
(16,937)
|
Deferred compensation
liability
|
|
16,912
|
|
16,937
|
Retained
earnings
|
|
7,653,735
|
|
7,031,333
|
Less treasury stock at
cost – 16,857,145 and 16,977,499 shares as of September 30, 2019
and December 31, 2018, respectively
|
|
(7,302,664)
|
|
(7,043,200)
|
Total shareholders'
equity
|
|
2,371,457
|
|
1,808,562
|
Total liabilities
and shareholders' equity
|
|
$
|
3,843,359
|
|
$
|
3,165,933
|
|
|
|
|
|
NVR,
Inc.
|
Operating
Activity
|
(dollars in
thousands)
|
(Unaudited)
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Homebuilding
data:
|
|
|
|
|
|
|
|
|
New orders
(units)
|
|
|
|
|
|
|
|
|
Mid Atlantic
(1)
|
|
2,086
|
|
2,124
|
|
6,852
|
|
7,041
|
North East
(2)
|
|
323
|
|
315
|
|
1,000
|
|
1,051
|
Mid East
(3)
|
|
1,141
|
|
962
|
|
3,631
|
|
3,400
|
South East
(4)
|
|
1,216
|
|
901
|
|
3,661
|
|
2,948
|
Total
|
|
4,766
|
|
4,302
|
|
15,144
|
|
14,440
|
|
|
|
|
|
|
|
|
|
Average new order
price
|
|
$
|
369.2
|
|
$
|
374.0
|
|
$
|
364.8
|
|
$
|
376.3
|
|
|
|
|
|
|
|
|
|
Settlements
(units)
|
|
|
|
|
|
|
|
|
Mid Atlantic
(1)
|
|
2,421
|
|
2,297
|
|
6,890
|
|
6,462
|
North East
(2)
|
|
316
|
|
367
|
|
933
|
|
1,022
|
Mid East
(3)
|
|
1,255
|
|
1,164
|
|
3,382
|
|
3,135
|
South East
(4)
|
|
1,132
|
|
926
|
|
3,132
|
|
2,642
|
Total
|
|
5,124
|
|
4,754
|
|
14,337
|
|
13,261
|
|
|
|
|
|
|
|
|
|
Average settlement
price
|
|
$
|
365.5
|
|
$
|
380.5
|
|
$
|
367.8
|
|
$
|
380.8
|
|
|
|
|
|
|
|
|
|
Backlog
(units)
|
|
|
|
|
|
|
|
|
Mid Atlantic
(1)
|
|
|
|
|
|
4,110
|
|
4,803
|
North East
(2)
|
|
|
|
|
|
630
|
|
711
|
Mid East
(3)
|
|
|
|
|
|
2,055
|
|
2,163
|
South East
(4)
|
|
|
|
|
|
2,377
|
|
2,033
|
Total
|
|
|
|
|
|
9,172
|
|
9,710
|
|
|
|
|
|
|
|
|
|
Average backlog
price
|
|
|
|
|
|
$
|
371.0
|
|
$
|
377.1
|
|
|
|
|
|
|
|
|
|
New order
cancellation rate
|
|
16%
|
|
16%
|
|
14%
|
|
14%
|
Community count
(average)
|
|
473
|
|
479
|
|
464
|
|
481
|
Lots controlled at
end of period
|
|
|
|
|
|
102,000
|
|
96,400
|
|
|
|
|
|
|
|
|
|
Mortgage banking
data:
|
|
|
|
|
|
|
|
|
Loan
closings
|
|
$
|
1,373,946
|
|
$
|
1,249,199
|
|
$
|
3,745,983
|
|
$
|
3,472,976
|
Capture
rate
|
|
90%
|
|
88%
|
|
89%
|
|
87%
|
|
|
|
|
|
|
|
|
|
Common stock
information:
|
|
|
|
|
|
|
|
|
Shares outstanding at
end of period
|
|
|
|
|
|
3,698,185
|
|
3,595,069
|
Number of shares
repurchased
|
|
18,024
|
|
63,844
|
|
129,679
|
|
222,224
|
Aggregate cost of
shares repurchased
|
|
$
|
61,064
|
|
$
|
173,831
|
|
$
|
365,542
|
|
$
|
657,369
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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-300940859.html
SOURCE NVR, Inc.