NVR, Inc. Announces Fourth Quarter And Full Year Results
NVR, Inc. reported a net income of $305 million, or $76.93 per diluted share, for Q4 2020, marking a 19% increase from Q4 2019. Consolidated revenues rose 18% to $2.34 billion. For the full year 2020, revenues reached $7.54 billion, a 2% increase, with net income at $901 million, up 3%. New home orders surged 25% in Q4, totaling 5,485 units, while the backlog increased by 40% to 11,549 units. Mortgage banking income before tax jumped 145% to $61.78 million in Q4, driven by higher closed loan volume.
- Q4 2020 net income increased by 19% to $305 million.
- Consolidated revenues rose by 18% in Q4 2020, totaling $2.34 billion.
- New orders increased by 25% in Q4 2020, totaling 5,485 units.
- Backlog of homes sold but not settled rose by 40% to 11,549 units.
- Mortgage banking income before tax surged by 145% to $61.78 million in Q4 2020.
- Effective tax rate increased to 20.9% in Q4 2020 from 13.3% in Q4 2019.
- Uncertainty regarding the impact of COVID-19 on business operations and financial performance.
RESTON, Va., Jan. 28, 2021 /PRNewswire/ -- NVR, Inc. (NYSE: NVR), one of the nation's largest homebuilding and mortgage banking companies, announced net income for its fourth quarter ended December 31, 2020 of
For the year ended December 31, 2020, consolidated revenues were
Homebuilding
New orders in the fourth quarter of 2020 increased by
Homebuilding revenues of
New orders for the year ended December 31, 2020 increased by
Mortgage Banking
Mortgage closed loan production in the fourth quarter of 2020 totaled
Mortgage closed loan production for the year ended December 31, 2020 increased
Effective Tax Rate
The Company's effective tax rate for the three and twelve months ended December 31, 2020 increased to
Additionally, the effective tax rate in each period in 2020 and 2019 was favorably impacted by the recognition of an income tax benefit related to excess tax benefits from stock option exercises totaling
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 continues to be 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) | ||||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||
Homebuilding: | ||||||||||||||||
Revenues | $ | 2,263,673 | $ | 1,946,859 | $ | 7,328,889 | $ | 7,220,844 | ||||||||
Other income | 7,206 | 6,513 | 16,938 | 24,779 | ||||||||||||
Cost of sales | (1,822,121) | (1,567,392) | (5,937,401) | (5,849,862) | ||||||||||||
Selling, general and administrative | (112,398) | (109,634) | (431,008) | (447,547) | ||||||||||||
Operating income | 336,360 | 276,346 | 977,418 | 948,214 | ||||||||||||
Interest expense | (12,769) | (6,301) | (39,458) | (24,335) | ||||||||||||
Homebuilding income | 323,591 | 270,045 | 937,960 | 923,879 | ||||||||||||
Mortgage Banking: | ||||||||||||||||
Mortgage banking fees | 80,342 | 43,336 | 208,034 | 167,820 | ||||||||||||
Interest income | 2,385 | 3,232 | 8,930 | 12,142 | ||||||||||||
Other income | 1,034 | 818 | 3,249 | 2,857 | ||||||||||||
General and administrative | (21,577) | (21,859) | (78,726) | (79,858) | ||||||||||||
Interest expense | (405) | (270) | (1,414) | (1,045) | ||||||||||||
Mortgage banking income | 61,779 | 25,257 | 140,073 | 101,916 | ||||||||||||
Income before taxes | 385,370 | 295,302 | 1,078,033 | 1,025,795 | ||||||||||||
Income tax expense | (80,366) | (39,165) | (176,785) | (147,256) | ||||||||||||
Net income | $ | 305,004 | $ | 256,137 | $ | 901,248 | $ | 878,539 | ||||||||
Basic earnings per share | $ | 82.08 | $ | 69.78 | $ | 244.11 | $ | 241.31 | ||||||||
Diluted earnings per share | $ | 76.93 | $ | 64.41 | $ | 230.11 | $ | 221.13 | ||||||||
Basic weighted average shares outstanding | 3,716 | 3,671 | 3,692 | 3,641 | ||||||||||||
Diluted weighted average shares outstanding | 3,965 | 3,977 | 3,917 | 3,973 | ||||||||||||
NVR, Inc. | ||||||||
Consolidated Balance Sheets | ||||||||
(in thousands, except share and per share data) | ||||||||
December 31, 2020 | December 31, 2019 | |||||||
ASSETS | (Unaudited) | |||||||
Homebuilding: | ||||||||
Cash and cash equivalents | $ | 2,714,720 | $ | 1,110,892 | ||||
Restricted cash | 28,912 | 17,943 | ||||||
Receivables | 18,299 | 18,278 | ||||||
Inventory: | ||||||||
Lots and housing units, covered under sales agreements with customers | 1,484,936 | 1,075,420 | ||||||
Unsold lots and housing units | 123,197 | 184,352 | ||||||
Land under development | 62,790 | 69,196 | ||||||
Building materials and other | 38,159 | 18,320 | ||||||
1,709,082 | 1,347,288 | |||||||
Contract land deposits, net | 387,628 | 413,851 | ||||||
Property, plant and equipment, net | 57,786 | 52,260 | ||||||
Operating lease right-of-use assets | 53,110 | 63,825 | ||||||
Reorganization value in excess of amounts allocable to identifiable assets, net | 41,580 | 41,580 | ||||||
Deferred tax asset, net | 132,980 | 115,731 | ||||||
Other assets | 70,419 | 60,413 | ||||||
5,214,516 | 3,242,061 | |||||||
Mortgage Banking: | ||||||||
Cash and cash equivalents | 63,547 | 29,412 | ||||||
Restricted cash | 2,334 | 2,276 | ||||||
Mortgage loans held for sale, net | 449,760 | 492,125 | ||||||
Property and equipment, net | 4,544 | 5,828 | ||||||
Operating lease right-of-use assets | 12,439 | 13,345 | ||||||
Reorganization value in excess of amounts allocable to identifiable assets, net | 7,347 | 7,347 | ||||||
Other assets | 22,654 | 17,421 | ||||||
562,625 | 567,754 | |||||||
Total assets | $ | 5,777,141 | $ | 3,809,815 | ||||
NVR, Inc. | ||||||||
Consolidated Balance Sheets (Continued) | ||||||||
(in thousands, except share and per share data) | ||||||||
December 31, 2020 | December 31, 2019 | |||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | (Unaudited) | |||||||
Homebuilding: | ||||||||
Accounts payable | $ | 339,867 | $ | 262,987 | ||||
Accrued expenses and other liabilities | 440,671 | 346,035 | ||||||
Customer deposits | 240,758 | 131,886 | ||||||
Operating lease liabilities | 59,357 | 71,095 | ||||||
Senior notes | 1,517,395 | 598,301 | ||||||
2,598,048 | 1,410,304 | |||||||
Mortgage Banking: | ||||||||
Accounts payable and other liabilities | 62,720 | 43,985 | ||||||
Operating lease liabilities | 13,299 | 14,282 | ||||||
76,019 | 58,267 | |||||||
Total liabilities | 2,674,067 | 1,468,571 | ||||||
Commitments and contingencies | ||||||||
Shareholders' equity: | ||||||||
Common stock, | 206 | 206 | ||||||
Additional paid-in capital | 2,214,426 | 2,055,407 | ||||||
Deferred compensation trust – 106,697 and 107,295 shares of NVR, Inc. common stock as of December 31, 2020 and December 31, 2019, respectively | (16,710) | (16,912) | ||||||
Deferred compensation liability | 16,710 | 16,912 | ||||||
Retained earnings | 8,811,120 | 7,909,872 | ||||||
Less treasury stock at cost – 16,859,753 and 16,922,558 shares as of December 31, 2020 and December 31, 2019, respectively | (7,922,678) | (7,624,241) | ||||||
Total shareholders' equity | 3,103,074 | 2,341,244 | ||||||
Total liabilities and shareholders' equity | $ | 5,777,141 | $ | 3,809,815 | ||||
NVR, Inc. | ||||||||||||||||||||||||||||
Operating Activity | ||||||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||
Units | Average | Units | Average | Units | Average | Units | Average | |||||||||||||||||||||
New orders, net of cancellations: | ||||||||||||||||||||||||||||
Mid Atlantic (1) | 2,196 | $ | 474.2 | 1,947 | $ | 443.2 | 9,230 | $ | 453.8 | 8,799 | $ | 424.4 | ||||||||||||||||
North East (2) | 469 | $ | 446.9 | 349 | $ | 425.1 | 1,738 | $ | 416.6 | 1,349 | $ | 390.8 | ||||||||||||||||
Mid East (3) | 1,375 | $ | 346.7 | 997 | $ | 327.3 | 5,780 | $ | 330.9 | 4,628 | $ | 323.2 | ||||||||||||||||
South East (4) | 1,445 | $ | 315.7 | 1,099 | $ | 305.9 | 6,334 | $ | 307.7 | 4,760 | $ | 302.6 | ||||||||||||||||
Total | 5,485 | $ | 398.1 | 4,392 | $ | 381.1 | 23,082 | $ | 380.1 | 19,536 | $ | 368.4 | ||||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||
Units | Average | Units | Average | Units | Average | Units | Average | |||||||||||||||||||||
Settlements: | ||||||||||||||||||||||||||||
Mid Atlantic (1) | 2,465 | $ | 448.3 | 2,445 | $ | 419.7 | 8,363 | $ | 438.6 | 9,335 | $ | 417.9 | ||||||||||||||||
North East (2) | 436 | $ | 404.7 | 392 | $ | 382.4 | 1,375 | $ | 391.8 | 1,325 | $ | 388.5 | ||||||||||||||||
Mid East (3) | 1,539 | $ | 324.2 | 1,239 | $ | 320.0 | 4,719 | $ | 323.1 | 4,621 | $ | 324.8 | ||||||||||||||||
South East (4) | 1,620 | $ | 298.2 | 1,255 | $ | 298.2 | 5,309 | $ | 300.8 | 4,387 | $ | 297.1 | ||||||||||||||||
Total | 6,060 | $ | 373.5 | 5,331 | $ | 365.2 | 19,766 | $ | 370.8 | 19,668 | $ | 367.1 | ||||||||||||||||
As of December 31, 2020 | As of December 31, 2019 | |||||||||||||
Units | Average Price | Units | Average Price | |||||||||||
Backlog: | ||||||||||||||
Mid Atlantic (1) | 4,479 | $ | 470.9 | 3,612 | $ | 440.1 | ||||||||
North East (2) | 950 | $ | 447.8 | 587 | $ | 408.8 | ||||||||
Mid East (3) | 2,874 | $ | 344.5 | 1,813 | $ | 332.0 | ||||||||
South East (4) | 3,246 | $ | 323.7 | 2,221 | $ | 314.6 | ||||||||
Total | 11,549 | $ | 396.2 | 8,233 | $ | 380.2 | ||||||||
NVR, Inc. | ||||||||||||||||
Operating Activity (Continued) | ||||||||||||||||
(dollars in thousands) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Average active communities: | ||||||||||||||||
Mid Atlantic (1) | 162 | 201 | 177 | 206 | ||||||||||||
North East (2) | 38 | 36 | 40 | 33 | ||||||||||||
Mid East (3) | 136 | 143 | 138 | 134 | ||||||||||||
South East (4) | 106 | 107 | 112 | 97 | ||||||||||||
Total | 442 | 487 | 467 | 470 | ||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Homebuilding data: | ||||||||||||||||
New order cancellation rate | 12 | % | 16 | % | 15 | % | 15 | % | ||||||||
Lots controlled at end of period | 105,700 | 104,900 | ||||||||||||||
Mortgage banking data: | ||||||||||||||||
Loan closings | $ | 1,659,219 | $ | 1,418,742 | $ | 5,317,811 | $ | 5,164,725 | ||||||||
Capture rate | 90 | % | 91 | % | 90 | % | 90 | % | ||||||||
Common stock information: | ||||||||||||||||
Shares outstanding at end of period | 3,695,577 | 3,632,772 | ||||||||||||||
Number of shares repurchased | 38,735 | 91,286 | 96,346 | 220,965 | ||||||||||||
Aggregate cost of shares repurchased | $ | 154,496 | $ | 332,875 | $ | 371,078 | $ | 698,417 | ||||||||
(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 |
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SOURCE NVR, Inc.
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