RESTON, Va., July 20, 2018
/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,
2018 of $203,174,000, or $49.05 per diluted share. Net income and
diluted earnings per share for the second quarter ended
June 30, 2018 increased 37% and 39%, respectively, when
compared to 2017 second quarter net income of $147,877,000, or $35.19 per diluted share. Consolidated
revenues for the second quarter of 2018 totaled $1,787,305,000, a 16% increase from $1,544,492,000 in the second quarter of 2017.
For the six months ended June 30, 2018, consolidated
revenues were $3,316,719,000, an 18%
increase from $2,821,584,000 reported
for 2017. Net income for the six months ended June 30,
2018 was $369,223,000, an increase of
47% when compared to the six months ended June 30, 2017.
Diluted earnings per share for the six months ended June 30,
2018 was $88.31, an increase of 46%
from $60.36 per diluted share for
2017.
Net income and diluted earnings per share were favorably
impacted by the reduction in the Company's effective tax rate for
the three and six months ended June 30, 2018 to 15.9% and
14.6%, respectively, compared to 29.2% and 26.5% for the three and
six months ended June 30, 2017,
respectively. The reduction in the effective tax rate was
primarily due to the enactment of the Tax Cuts and Jobs Act in
December 2017, which lowered the
Company's federal statutory tax rate from 35% to 21%.
Additionally, the effective tax rate for the three and six months
ended June 30, 2018 was favorably impacted by the recognition
of an income tax benefit related to excess tax benefits from stock
option exercises totaling $26,456,000
and $46,022,000, respectively.
For the three and six months ended June 30,
2017, the income tax benefit related to excess tax benefits
from stock option exercises totaled $16,464,000 and $36,364,000, respectively.
Homebuilding
New orders in the second quarter of 2018 increased 6% to 4,964
units, when compared to 4,678 units in the second quarter of 2017.
The average sales price of new orders in the second quarter of 2018
was $376,300, which was essentially
flat when compared with the second quarter of 2017.
Settlements increased in the second quarter of 2018 to 4,611 units,
18% higher than the second quarter of 2017. The Company's
backlog of homes sold but not settled as of June 30, 2018
increased on a unit basis by 15% to 10,162 units and increased on a
dollar basis by 12% to $3,861,853,000
when compared to June 30, 2017.
Homebuilding revenues in the second quarter of 2018 totaled
$1,750,463,000, 16% higher than the
year earlier period. Gross profit margin in the second
quarter of 2018 decreased to 19.1%, compared to 19.5% in the second
quarter of 2017. Income before tax from the homebuilding
segment totaled $223,266,000 in the
second quarter of 2018, an increase of 17% when compared to the
second quarter of 2017.
Mortgage Banking
Mortgage closed loan production in the second quarter of 2018
totaled $1,214,101,000, an increase
of 17% when compared to the second quarter of 2017. Income
before tax from the mortgage banking segment totaled $18,320,000 in the second quarter of 2018, an
increase of 4% when compared to $17,631,000 in the second quarter of 2017.
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-one 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
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
Homebuilding:
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
1,750,463
|
|
|
$
|
1,512,714
|
|
|
$
|
3,240,556
|
|
|
$
|
2,760,301
|
|
Other
income
|
|
2,164
|
|
|
1,447
|
|
|
4,141
|
|
|
2,549
|
|
Cost of
sales
|
|
(1,416,797)
|
|
|
(1,218,083)
|
|
|
(2,628,743)
|
|
|
(2,244,100)
|
|
Selling, general and
administrative
|
|
(106,517)
|
|
|
(99,100)
|
|
|
(212,064)
|
|
|
(199,004)
|
|
Operating
income
|
|
229,313
|
|
|
196,978
|
|
|
403,890
|
|
|
319,746
|
|
Interest
expense
|
|
(6,047)
|
|
|
(5,641)
|
|
|
(12,054)
|
|
|
(11,219)
|
|
Homebuilding
income
|
|
223,266
|
|
|
191,337
|
|
|
391,836
|
|
|
308,527
|
|
|
|
|
|
|
|
|
|
|
Mortgage
Banking:
|
|
|
|
|
|
|
|
|
Mortgage banking
fees
|
|
36,842
|
|
|
31,778
|
|
|
76,163
|
|
|
61,283
|
|
Interest
income
|
|
2,915
|
|
|
1,554
|
|
|
5,008
|
|
|
3,215
|
|
Other
income
|
|
641
|
|
|
506
|
|
|
1,165
|
|
|
815
|
|
General and
administrative
|
|
(21,796)
|
|
|
(15,934)
|
|
|
(41,031)
|
|
|
(32,180)
|
|
Interest
expense
|
|
(282)
|
|
|
(273)
|
|
|
(557)
|
|
|
(531)
|
|
Mortgage banking
income
|
|
18,320
|
|
|
17,631
|
|
|
40,748
|
|
|
32,602
|
|
|
|
|
|
|
|
|
|
|
Income before
taxes
|
|
241,586
|
|
|
208,968
|
|
|
432,584
|
|
|
341,129
|
|
Income tax
expense
|
|
(38,412)
|
|
|
(61,091)
|
|
|
(63,361)
|
|
|
(90,329)
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
203,174
|
|
|
$
|
147,877
|
|
|
$
|
369,223
|
|
|
$
|
250,800
|
|
|
|
|
|
|
|
|
|
|
Basic earnings
per share
|
|
$
|
55.90
|
|
|
$
|
39.46
|
|
|
$
|
101.03
|
|
|
$
|
67.30
|
|
|
|
|
|
|
|
|
|
|
Diluted
earnings per share
|
|
$
|
49.05
|
|
|
$
|
35.19
|
|
|
$
|
88.31
|
|
|
$
|
60.36
|
|
|
|
|
|
|
|
|
|
|
Basic weighted
average shares outstanding
|
|
3,635
|
|
|
3,748
|
|
|
3,655
|
|
|
3,726
|
|
|
|
|
|
|
|
|
|
|
Diluted
weighted average shares outstanding
|
|
4,142
|
|
|
4,202
|
|
|
4,181
|
|
|
4,155
|
|
NVR,
Inc.
|
Consolidated Balance
Sheets
|
(in thousands, except
share and per share data)
|
(Unaudited)
|
|
|
|
June 30,
2018
|
|
December 31,
2017
|
ASSETS
|
|
|
|
|
Homebuilding:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
417,341
|
|
|
$
|
645,087
|
|
Restricted
cash
|
|
22,130
|
|
|
19,438
|
|
Receivables
|
|
30,179
|
|
|
20,026
|
|
Inventory:
|
|
|
|
|
Lots and housing
units, covered under sales agreements with customers
|
|
1,263,408
|
|
|
1,046,094
|
|
Unsold lots and
housing units
|
|
113,493
|
|
|
148,620
|
|
Land under
development
|
|
35,292
|
|
|
34,212
|
|
Building materials
and other
|
|
21,422
|
|
|
17,273
|
|
|
|
1,433,615
|
|
|
1,246,199
|
|
|
|
|
|
|
Contract land
deposits, net
|
|
361,052
|
|
|
370,429
|
|
Property, plant and
equipment, net
|
|
41,612
|
|
|
43,191
|
|
Reorganization value
in excess of amounts allocable to identifiable assets,
net
|
|
41,580
|
|
|
41,580
|
|
Other
assets
|
|
205,760
|
|
|
198,930
|
|
|
|
2,553,269
|
|
|
2,584,880
|
|
Mortgage
Banking:
|
|
|
|
|
Cash and cash
equivalents
|
|
14,209
|
|
|
21,707
|
|
Restricted
cash
|
|
3,672
|
|
|
2,256
|
|
Mortgage loans held
for sale, net
|
|
399,806
|
|
|
352,489
|
|
Property and
equipment, net
|
|
7,018
|
|
|
6,327
|
|
Reorganization value
in excess of amounts allocable to identifiable assets,
net
|
|
7,347
|
|
|
7,347
|
|
Other
assets
|
|
24,074
|
|
|
14,273
|
|
|
|
456,126
|
|
|
404,399
|
|
Total
assets
|
|
$
|
3,009,395
|
|
|
$
|
2,989,279
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Homebuilding:
|
|
|
|
|
Accounts
payable
|
|
$
|
290,923
|
|
|
$
|
261,973
|
|
Accrued expenses and
other liabilities
|
|
306,452
|
|
|
341,891
|
|
Customer
deposits
|
|
172,033
|
|
|
150,033
|
|
Senior
notes
|
|
597,373
|
|
|
597,066
|
|
|
|
1,366,781
|
|
|
1,350,963
|
|
Mortgage
Banking:
|
|
|
|
|
Accounts payable and
other liabilities
|
|
35,043
|
|
|
32,824
|
|
|
|
35,043
|
|
|
32,824
|
|
Total
liabilities
|
|
1,401,824
|
|
|
1,383,787
|
|
|
|
|
|
|
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, 2018 and December 31, 2017
|
|
206
|
|
|
206
|
|
Additional paid-in
capital
|
|
1,721,696
|
|
|
1,644,197
|
|
Deferred compensation
trust – 107,904 and 108,640 shares of NVR, Inc. common stock as
of June 30, 2018 and December 31, 2017, respectively
|
|
(17,148)
|
|
|
(17,383)
|
|
Deferred compensation
liability
|
|
17,148
|
|
|
17,383
|
|
Retained
earnings
|
|
6,603,359
|
|
|
6,231,940
|
|
Less treasury stock
at cost – 16,926,815 and 16,864,324 shares as of June 30, 2018
and
December 31, 2017, respectively
|
|
(6,717,690)
|
|
|
(6,270,851)
|
|
Total
shareholders' equity
|
|
1,607,571
|
|
|
1,605,492
|
|
Total liabilities
and shareholders' equity
|
|
$
|
3,009,395
|
|
|
$
|
2,989,279
|
|
NVR,
Inc.
|
Operating
Activity
|
(dollars in
thousands)
|
(Unaudited)
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Homebuilding
data:
|
|
|
|
|
|
|
|
|
New orders
(units)
|
|
|
|
|
|
|
|
|
Mid Atlantic
(1)
|
|
2,414
|
|
|
2,263
|
|
|
4,917
|
|
|
4,388
|
|
North East
(2)
|
|
365
|
|
|
361
|
|
|
736
|
|
|
720
|
|
Mid East
(3)
|
|
1,142
|
|
|
1,145
|
|
|
2,438
|
|
|
2,279
|
|
South East
(4)
|
|
1,043
|
|
|
909
|
|
|
2,047
|
|
|
1,715
|
|
Total
|
|
4,964
|
|
|
4,678
|
|
|
10,138
|
|
|
9,102
|
|
|
|
|
|
|
|
|
|
|
Average new order
price
|
|
$
|
376.3
|
|
|
$
|
377.0
|
|
|
$
|
377.3
|
|
|
$
|
384.6
|
|
|
|
|
|
|
|
|
|
|
Settlements
(units)
|
|
|
|
|
|
|
|
|
Mid Atlantic
(1)
|
|
2,239
|
|
|
1,976
|
|
|
4,165
|
|
|
3,634
|
|
North East
(2)
|
|
354
|
|
|
329
|
|
|
655
|
|
|
597
|
|
Mid East
(3)
|
|
1,092
|
|
|
947
|
|
|
1,971
|
|
|
1,672
|
|
South East
(4)
|
|
926
|
|
|
665
|
|
|
1,716
|
|
|
1,270
|
|
Total
|
|
4,611
|
|
|
3,917
|
|
|
8,507
|
|
|
7,173
|
|
|
|
|
|
|
|
|
|
|
Average settlement
price
|
|
$
|
379.6
|
|
|
$
|
386.1
|
|
|
$
|
380.9
|
|
|
$
|
384.8
|
|
|
|
|
|
|
|
|
|
|
Backlog
(units)
|
|
|
|
|
|
|
|
|
Mid Atlantic
(1)
|
|
|
|
|
|
4,976
|
|
|
4,295
|
|
North East
(2)
|
|
|
|
|
|
763
|
|
|
731
|
|
Mid East
(3)
|
|
|
|
|
|
2,365
|
|
|
2,106
|
|
South East
(4)
|
|
|
|
|
|
2,058
|
|
|
1,681
|
|
Total
|
|
|
|
|
|
10,162
|
|
|
8,813
|
|
|
|
|
|
|
|
|
|
|
Average backlog
price
|
|
|
|
|
|
$
|
380.0
|
|
|
$
|
390.9
|
|
|
|
|
|
|
|
|
|
|
New order
cancellation rate
|
|
13
|
%
|
|
13
|
%
|
|
13
|
%
|
|
14
|
%
|
Community count
(average)
|
|
480
|
|
|
491
|
|
|
483
|
|
|
488
|
|
Lots controlled at
end of period
|
|
|
|
|
|
94,200
|
|
|
83,700
|
|
|
|
|
|
|
|
|
|
|
Mortgage banking
data:
|
|
|
|
|
|
|
|
|
Loan
closings
|
|
$
|
1,214,101
|
|
|
$
|
1,041,613
|
|
|
$
|
2,223,774
|
|
|
$
|
1,884,954
|
|
Capture
rate
|
|
87
|
%
|
|
88
|
%
|
|
87
|
%
|
|
87
|
%
|
|
|
|
|
|
|
|
|
|
Common stock
information:
|
|
|
|
|
|
|
|
|
Shares outstanding at
end of period
|
|
|
|
|
|
3,628,515
|
|
|
3,747,606
|
|
Number of shares
repurchased
|
|
42,112
|
|
|
32,840
|
|
|
158,380
|
|
|
83,762
|
|
Aggregate cost of
shares repurchased
|
|
$
|
126,296
|
|
|
$
|
73,959
|
|
|
$
|
483,538
|
|
|
$
|
159,506
|
|
(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-300684031.html
SOURCE NVR, Inc.