NVR
$4,815.00
NVR
($55.98)
(1.15%)
Earnings Details
3rd Quarter September 2021
Thursday, October 21, 2021 9:00:00 AM
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Summary

NVR (NVR) Recent Earnings

NVR (NVR) reported 3rd Quarter September 2021 earnings of $86.44 per share on revenue of $2.3 billion. The consensus earnings estimate was $94.38 per share on revenue of $2.4 billion. Revenue grew 21.7% on a year-over-year basis.

NVR Inc is engaged in the construction and sale of single-family detached homes, townhomes and condominium buildings. The Company through its subsidiaries also operates in mortgage banking and title services business.

Results
Reported Earnings
$86.44
Earnings Whisper
-
Consensus Estimate
$94.38
Reported Revenue
$2.34 Bil
Revenue Estimate
$2.41 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

NVR, Inc. Announces Third Quarter Results

RESTON, Va., Oct. 21, 2021 /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, 2021 of $332.1 million, or $86.44 per diluted share.  Net income and diluted earnings per share for the third quarter ended September 30, 2021 increased 29% and 33%, respectively, when compared to 2020 third quarter net income of $256.5 million, or $65.11 per diluted share.  Consolidated revenues for the third quarter of 2021 totaled $2.40 billion, an increase of 20% from $1.99 billion in the third quarter of 2020. 

For the nine months ended September 30, 2021, consolidated revenues were $6.72 billion, a 29% increase from $5.19 billion reported in 2020.  Net income for the nine months ended September 30, 2021 was $902.1 million, an increase of 51% when compared to the nine months ended September 30, 2020.  Diluted earnings per share for the nine months ended September 30, 2021 was $231.75, an increase of 51% from $153.03 per diluted share for 2020.

Homebuilding

New orders in the third quarter of 2021 decreased by 22% to 5,201 units, when compared to 6,681 units in the third quarter of 2020.  The average sales price of new orders in the third quarter of 2021 was $442,000, an increase of 15% when compared with the third quarter of 2020.  The cancellation rate in the third quarter of 2021 was 9% compared to 12% in the third quarter of 2020.  Settlements in the third quarter of 2021 increased by 10% to 5,683 units, compared to 5,180 units in the third quarter of 2020.  Our backlog of homes sold but not settled as of September 30, 2021 was flat on a unit basis at 12,145 units and increased on a dollar basis by 15% to $5.37 billion when compared to the respective backlog unit and dollar balances as of September 30, 2020.

Homebuilding revenues of $2.34 billion in the third quarter of 2021 increased by 22% compared to homebuilding revenues of $1.92 billion in the third quarter of 2020.  Gross profit margin in the third quarter of 2021 increased to 22.2%, compared to 20.0% in the third quarter of 2020.  Income before tax from the homebuilding segment totaled $395.1 million in the third quarter of 2021, an increase of 47% when compared to the third quarter of 2020.

Mortgage Banking

Mortgage closed loan production in the third quarter of 2021 totaled $1.62 billion, an increase of 17% when compared to the third quarter of 2020.  Income before tax from the mortgage banking segment totaled $39.0 million in the third quarter of 2021, a decrease of 25% when compared to $51.8 million in the third quarter of 2020.  This decrease was primarily attributable to a decrease in secondary marketing gains.

Effective Tax Rate

Our effective tax rate for the three and nine months ended September 30, 2021 was 23.5% and 22.5%, respectively, compared to 20.2% and 13.9% for the three and nine months ended September 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 $9.2 million and $37.8 million for the three and nine months ended September 30, 2021, respectively, and $17.8 million and $80.3 million for the three and nine months ended September 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 September 30,


Nine Months Ended September 30,



2021


2020


2021


2020










Homebuilding:









Revenues


$

2,336,615



$

1,920,751



$

6,524,886



$

5,065,216


Other income


1,496



1,988



4,714



9,732


Cost of sales


(1,817,939)



(1,536,044)



(5,117,065)



(4,115,280)


Selling, general and administrative


(112,226)



(105,741)



(347,051)



(318,610)


Operating income


407,946



280,954



1,065,484



641,058


Interest expense


(12,838)



(11,309)



(38,694)



(26,689)


Homebuilding income


395,108



269,645



1,026,790



614,369











Mortgage Banking:









Mortgage banking fees


59,025



69,261



195,798



127,692


Interest income


2,336



2,222



6,577



6,545


Other income


1,022



887



2,877



2,215


General and administrative


(22,959)



(20,180)



(67,228)



(57,149)


Interest expense


(405)



(378)



(1,216)



(1,009)


Mortgage banking income


39,019



51,812



136,808



78,294











Income before taxes


434,127



321,457



1,163,598



692,663


Income tax expense


(102,046)



(64,991)



(261,460)



(96,419)











Net income


$

332,081



$

256,466



$

902,138



$

596,244











Basic earnings per share


$

93.25



$

69.19



$

249.30



$

161.85











Diluted earnings per share


$

86.44



$

65.11



$

231.75



$

153.03











Basic weighted average shares outstanding


3,561



3,706



3,619



3,684











Diluted weighted average shares outstanding


3,842



3,939



3,893



3,896


 

NVR, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share data)

(unaudited)








September 30, 2021


December 31, 2020

ASSETS





Homebuilding:





Cash and cash equivalents


$

2,681,110



$

2,714,720


Restricted cash


41,820



28,912


Receivables


22,525



18,299


Inventory:





Lots and housing units, covered under sales agreements with customers


1,697,959



1,484,936


Unsold lots and housing units


130,427



123,197


Land under development


8,151



62,790


Building materials and other


26,988



38,159




1,863,525



1,709,082







Contract land deposits, net


453,255



387,628


Property, plant and equipment, net


55,253



57,786


Operating lease right-of-use assets


60,605



53,110


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


41,580



41,580


Other assets


211,557



203,399




5,431,230



5,214,516


Mortgage Banking:





Cash and cash equivalents


21,999



63,547


Restricted cash


2,860



2,334


Mortgage loans held for sale, net


287,525



449,760


Property and equipment, net


3,948



4,544


Operating lease right-of-use assets


10,747



12,439


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


7,347



7,347


Other assets


23,238



22,654




357,664



562,625


Total assets


$

5,788,894



$

5,777,141







 

NVR, Inc.

Consolidated Balance Sheets (Continued)

(in thousands, except share and per share data)

(unaudited)








September 30, 2021


December 31, 2020

LIABILITIES AND SHAREHOLDERS' EQUITY





Homebuilding:





Accounts payable


$

329,863



$

339,867


Accrued expenses and other liabilities


416,266



440,671


Customer deposits


381,594



240,758


Operating lease liabilities


66,002



59,357


Senior notes


1,516,544



1,517,395




2,710,269



2,598,048


Mortgage Banking:





Accounts payable and other liabilities


50,077



62,720


Operating lease liabilities


11,497



13,299




61,574



76,019


Total liabilities


2,771,843



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 September 30, 2021 and December 31, 2020


206



206


Additional paid-in capital


2,349,000



2,214,426


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


(16,710)



(16,710)


Deferred compensation liability


16,710



16,710


Retained earnings


9,713,258



8,811,120


Less treasury stock at cost – 17,042,644 and 16,859,753 shares as of September 30, 2021 and December 31, 2020, respectively


(9,045,413)



(7,922,678)


Total shareholders' equity


3,017,051



3,103,074


Total liabilities and shareholders' equity


$

5,788,894



$

5,777,141







 

NVR, Inc.

Operating Activity

(dollars in thousands)

(unaudited)




















Three Months Ended September 30,


Nine Months Ended September 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)


2,024


$

523.7



2,592


$

455.5



6,405



$

519.8



7,034



$

447.4


North East (2)


403


$

496.7



542


$

441.1



1,237



$

489.7



1,269



$

405.4


Mid East (3)


1,190


$

376.8



1,644


$

335.5



4,305



$

365.4



4,405



$

326.0


South East (4)


1,584


$

372.9



1,903


$

313.0



5,089



$

356.2



4,889



$

305.3


Total


5,201


$

442.0



6,681


$

384.2



17,036



$

429.8



17,597



$

374.5






































Three Months Ended September 30,


Nine Months Ended September 30,



2021


2020


2021


2020



Units


Average Price


Units


Average Price


Units


Average Price


Units


Average Price

Settlements:

















Mid Atlantic (1)


2,177


$

497.3



2,172


$

437.1



6,411



$

478.4



5,898



$

434.6


North East (2)


455


$

468.3



396


$

398.9



1,260



$

451.2



939



$

385.9


Mid East (3)


1,430


$

351.8



1,250


$

324.0



4,097



$

343.2



3,180



$

322.5


South East (4)


1,621


$

331.6



1,362


$

299.8



4,672



$

317.3



3,689



$

301.9


Total


5,683


$

411.1



5,180


$

370.8



16,440



$

396.9



13,706



$

369.5



















 



As of September 30,




2021


2020




Units


Average Price


Units


Average Price


Backlog:










Mid Atlantic (1)


4,473


$

530.3



4,748


$

457.7



North East (2)


927


$

499.0



917


$

427.8



Mid East (3)


3,082


$

375.4



3,038


$

333.2



South East (4)


3,663


$

377.0



3,421


$

315.1



Total


12,145


$

442.4



12,124


$

384.0













 

NVR, Inc.

Operating Activity (Continued)

(dollars in thousands)

(unaudited)












Three Months Ended September 30,


Nine Months Ended September 30,



2021


2020


2021


2020

Average active communities:









Mid Atlantic (1)


151


170


154


183

North East (2)


34


41


34


41

Mid East (3)


125


135


130


138

South East (4)


104


119


108


113

Total


414


465


426


475





















Three Months Ended September 30,


Nine Months Ended September 30,



2021


2020


2021


2020

Homebuilding data:









New order cancellation rate


9.2

%


11.8

%


9.1

%


15.8

%

Lots controlled at end of period






118,600



103,200











Mortgage banking data:









Loan closings


$

1,615,880


$

1,382,060


$

4,593,854



$

3,658,591


Capture rate


88

%


89

%


89

%


90

%










Common stock information:









Shares outstanding at end of period






3,512,686



3,718,387


Number of shares repurchased


79,620



244,595



57,611


Aggregate cost of shares repurchased


$

398,488


$


$

1,152,855



$

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-third-quarter-results-301405149.html

SOURCE NVR, Inc.