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RESTON, Va., July 21, 2021 /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, 2021 of $321.3 million, or $82.45 per diluted share.  Net income and diluted earnings per share for the second quarter ended June 30, 2021 increased 96% and 94%, respectively, when compared to 2020 second quarter net income of $164.1 million, or $42.50 per diluted share.  Consolidated revenues for the second quarter of 2021 totaled $2.28 billion, an increase of 41% from $1.62 billion in the second quarter of 2020. 

For the six months ended June 30, 2021, consolidated revenues were $4.33 billion, a 35% increase from $3.20 billion reported in 2020. Net income for the six months ended June 30, 2021 was $570.1 million, an increase of 68% when compared to the six months ended June 30, 2020. Diluted earnings per share for the six months ended June 30, 2021 was $145.53, an increase of 66% from $87.56 per diluted share for 2020.

Homebuilding

New orders in the second quarter of 2021 decreased by 6% to 5,521 units, when compared to 5,901 units in the second quarter of 2020. The average sales price of new orders in the second quarter of 2021 was $440,200, an increase of 20% when compared with the second quarter of 2020.  The cancellation rate in the second quarter of 2021 was 8% compared to 16% in the second quarter of 2020.  Settlements in the second quarter of 2021 increased by 32% to 5,685 units, compared to 4,296 units in the second quarter of 2020. Our backlog of homes sold but not settled as of June 30, 2021 increased on a unit basis by 19% to 12,627 units and increased on a dollar basis by 35% to $5.41 billion when compared to the respective backlog unit and dollar balances as of June 30, 2020.

Homebuilding revenues of $2.22 billion in the second quarter of 2021 increased by 40% compared to homebuilding revenues of $1.59 billion in the second quarter of 2020.  Gross profit margin in the second quarter of 2021 increased to 22.6%, compared to 19.2% in the second quarter of 2020.  Income before tax from the homebuilding segment totaled $378.3 million in the second quarter of 2021, an increase of 94% when compared to the second quarter of 2020.

Mortgage Banking

Mortgage closed loan production in the second quarter of 2021 totaled $1.57 billion, an increase of 37% when compared to the second quarter of 2020.  Income before tax from the mortgage banking segment totaled $39.2 million in the second quarter of 2021, an increase of 161% when compared to $15.0 million in the second quarter of 2020.  This increase was primarily attributable to increased mortgage volume in the second quarter of 2021, coupled with income in the second quarter of 2020 being adversely impacted by disruptions in the mortgage markets related to the COVID-19 pandemic, which resulted in a reduction in fair value of mortgage servicing rights.

Effective Tax Rate

Our effective tax rate for the three and six months ended June 30, 2021 was 23.0% and 21.9%, respectively, compared to 21.8% and 8.5% for the three and six months ended June 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 $11.2 million and $28.6 million for the three and six months ended June 30, 2021, respectively, and $6.9 million and $62.5 million for the three and six months ended June 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 June 30,



Six Months Ended June 30,





2021



2020



2021



2020



















Homebuilding:

















Revenues



$

2,224,560





$

1,588,758





$

4,188,271





$

3,144,465



Other income



1,632





2,408





3,218





7,744



Cost of sales



(1,721,673)





(1,284,493)





(3,299,126)





(2,579,236)



Selling, general and administrative



(113,406)





(102,702)





(234,825)





(212,869)



Operating income



391,113





203,971





657,538





360,104



Interest expense



(12,850)





(9,166)





(25,856)





(15,380)



Homebuilding income



378,263





194,805





631,682





344,724





















Mortgage Banking:

















Mortgage banking fees



59,038





31,610





136,773





58,431



Interest income



2,209





1,854





4,241





4,323



Other income



988





679





1,855





1,328



General and administrative



(22,613)





(18,758)





(44,269)





(36,969)



Interest expense



(420)





(359)





(811)





(631)



Mortgage banking income



39,202





15,026





97,789





26,482





















Income before taxes



417,465





209,831





729,471





371,206



Income tax (expense) benefit



(96,170)





(45,756)





(159,414)





(31,428)





















Net income



$

321,295





$

164,075





$

570,057





$

339,778





















Basic earnings per share



$

88.69





$

44.56





$

156.27





$

92.52





















Diluted earnings per share



$

82.45





$

42.50





$

145.53





$

87.56





















Basic weighted average shares outstanding



3,623





3,682





3,648





3,673





















Diluted weighted average shares outstanding



3,897





3,861





3,917





3,881



 

NVR, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share data)

(unaudited)















June 30, 2021



December 31, 2020

ASSETS









Homebuilding:









Cash and cash equivalents



$

2,597,565





$

2,714,720



Restricted cash



42,543





28,912



Receivables



24,484





18,299



Inventory:









Lots and housing units, covered under sales agreements with customers



1,792,293





1,484,936



Unsold lots and housing units



131,668





123,197



Land under development



7,794





62,790



Building materials and other



41,618





38,159







1,973,373





1,709,082













Contract land deposits, net



425,301





387,628



Property, plant and equipment, net



54,379





57,786



Operating lease right-of-use assets



61,740





53,110



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



41,580





41,580



Other assets



215,168





203,399







5,436,133





5,214,516



Mortgage Banking:









Cash and cash equivalents



20,757





63,547



Restricted cash



3,688





2,334



Mortgage loans held for sale, net



344,680





449,760



Property and equipment, net



4,236





4,544



Operating lease right-of-use assets



11,627





12,439



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



7,347





7,347



Other assets



25,968





22,654







418,303





562,625



Total assets



$

5,854,436





$

5,777,141













 

NVR, Inc.

Consolidated Balance Sheets (Continued)

(in thousands, except share and per share data)

(unaudited)















June 30, 2021



December 31, 2020

LIABILITIES AND SHAREHOLDERS' EQUITY









Homebuilding:









Accounts payable



$

380,957





$

339,867



Accrued expenses and other liabilities



419,454





440,671



Customer deposits



365,443





240,758



Operating lease liabilities



67,413





59,357



Senior notes



1,516,830





1,517,395







2,750,097





2,598,048



Mortgage Banking:









Accounts payable and other liabilities



49,605





62,720



Operating lease liabilities



12,446





13,299







62,051





76,019



Total liabilities



2,812,148





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 June 30, 2021 and December 31, 2020



206





206



Additional paid-in capital



2,314,564





2,214,426



Deferred compensation trust – 106,697 shares of NVR, Inc. common stock as of

both June 30, 2021 and December 31, 2020



(16,710)





(16,710)



Deferred compensation liability



16,710





16,710



Retained earnings



9,381,177





8,811,120



Less treasury stock at cost – 16,976,140 and 16,859,753 shares as of June 30, 2021

and December 31, 2020, respectively



(8,653,659)





(7,922,678)



Total shareholders' equity



3,042,288





3,103,074



Total liabilities and shareholders' equity



$

5,854,436





$

5,777,141













 

NVR, Inc.

Operating Activity

(dollars in thousands)

(unaudited)







































Three Months Ended June 30,



Six Months Ended June 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)



2,090



$

535.4





2,381



$

443.0





4,381





$

518.1





4,442





$

442.6



North East (2)



394



$

499.3





369



$

375.7





834





$

486.3





727





$

378.9



Mid East (3)



1,320



$

375.7





1,536



$

315.6





3,115





$

361.1





2,761





$

320.3



South East (4)



1,717



$

360.3





1,615



$

296.1





3,505





$

348.7





2,986





$

300.5



Total



5,521



$

440.2





5,901



$

365.4





11,835





$

424.4





10,916





$

368.6











































































Three Months Ended June 30,



Six Months Ended June 30,





2021



2020



2021



2020





Units



Average Price



Units



Average Price



Units



Average Price



Units



Average Price

Settlements:

































Mid Atlantic (1)



2,224



$

471.4





1,931



$

434.9





4,234





$

468.7





3,726





$

433.1



North East (2)



433



$

446.3





262



$

374.9





805





$

441.5





543





$

376.3



Mid East (3)



1,404



$

340.6





945



$

317.4





2,667





$

338.6





1,930





$

321.6



South East (4)



1,624



$

310.7





1,158



$

302.9





3,051





$

309.8





2,327





$

303.2



Total



5,685



$

391.3





4,296



$

369.8





10,757





$

389.3





8,526





$

368.8





































 





As of June 30,







2021



2020







Units



Average

Price



Units



Average

Price



Backlog:



















Mid Atlantic (1)



4,626



$

517.7





4,328



$

448.7





North East (2)



979



$

485.7





771



$

403.5





Mid East (3)



3,322



$

364.8





2,644



$

327.5





South East (4)



3,700



$

359.0





2,880



$

309.2





Total



12,627



$

428.5





10,623



$

377.5

























 

NVR, Inc.

Operating Activity (Continued)

(dollars in thousands)

(unaudited)























Three Months Ended June 30,



Six Months Ended June 30,





2021



2020



2021



2020

Average active communities:

















Mid Atlantic (1)



153



188



156



189

North East (2)



32



41



33



40

Mid East (3)



126



141



133



139

South East (4)



109



114



110



111

Total



420



484



432



479









































Three Months Ended June 30,



Six Months Ended June 30,





2021



2020



2021



2020

Homebuilding data:

















New order cancellation rate





8.3

%





15.7

%





9.0

%





18.1

%

Lots controlled at end of period











114,100





102,000





















Mortgage banking data:

















Loan closings



$

1,565,095





$

1,144,428





$

2,977,974





$

2,276,531



Capture rate





89

%





89

%





89

%





90

%



















Common stock information:

















Shares outstanding at end of period











3,579,190





3,689,088



Number of shares repurchased



78,452









164,975





57,611



Aggregate cost of shares repurchased



$

376,941





$





$

754,366





$

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-second-quarter-results-301337985.html

SOURCE NVR, Inc.

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