RESTON, Va., Jan. 28, 2020 /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, 2019 of $256,137,000, or $64.41 per diluted share.  Net income and diluted earnings per share for the fourth quarter ended December 31, 2019 both increased by 10% when compared to 2018 fourth quarter net income of $232,158,000, or $58.57 per diluted share.  Consolidated revenues for the fourth quarter of 2019 totaled $1,990,195,000, which decreased slightly from $1,994,548,000 in the fourth quarter of 2018.

For the year ended December 31, 2019, consolidated revenues were $7,388,664,000, a 3% increase from $7,163,674,000 reported for 2018.  Net income for the year ended December 31, 2019 was $878,539,000, an increase of 10% when compared to the year ended December 31, 2018.  Diluted earnings per share for the year ended December 31, 2019 was $221.13, an increase of 14% from $194.80 per diluted share for 2018. 

The Company's effective tax rate for the three and twelve months ended December 31, 2019 decreased to 13.3% and 14.4%, respectively, compared to 16.3% and 16.9% for the three and twelve months ended December 31, 2018, respectively. The effective tax rates for the 2019 fourth quarter and full year were favorably impacted by the retroactive reinstatement of certain expired energy tax credits under The Further Consolidated Appropriations Act, which resulted in the Company recognizing a tax benefit of approximately $15,100,000 in the fourth quarter of 2019 related to homes settled in 2018 and 2019.  Additionally, the effective tax rate in each period was favorably impacted by the recognition of an income tax benefit related to excess tax benefits from stock option exercises totaling $14,657,000 and $101,466,000 for three and twelve months ended December 31, 2019, respectively, and $18,870,000 and $77,478,000, for the three and twelve months ended December 31, 2018, respectively.

Homebuilding

New orders in the fourth quarter of 2019 increased by 14% to 4,392 units, when compared to 3,841 units in the fourth quarter of 2018. The average sales price of new orders in the fourth quarter of 2019 was $381,100, an increase of 1% when compared with the fourth quarter of 2018.  Settlements increased in the fourth quarter of 2019 to 5,331 units, which was 3% higher than the fourth quarter of 2018.  The Company's backlog of homes sold but not settled as of December 31, 2019 decreased on a unit basis by 2% to 8,233 units and decreased on a dollar basis by 1% to $3,130,282,000 when compared to December 31, 2018.

Homebuilding revenues of $1,946,859,000 in the fourth quarter of 2019 decreased slightly compared to homebuilding revenues of $1,954,403,000 in the fourth quarter of 2018.  Gross profit margin in the fourth quarter of 2019 increased to 19.5%, compared to 18.6% in the fourth quarter of 2018.  Income before tax from the homebuilding segment totaled $270,045,000 in the fourth quarter of 2019, an increase of 6% when compared to the fourth quarter of 2018.

New orders for the year ended December 31, 2019 increased by 7% to 19,536 units, when compared to 18,281 units in 2018. Settlements increased 7% year over year to 19,668 units in 2019 from 18,447 units in 2018. Homebuilding revenues for the year ended December 31, 2019 totaled $7,220,844,000, which was 3% higher than 2018. Gross profit margin for the year ended December 31, 2019 was 19.0%, compared to 18.7% in 2018.  Income before tax for the homebuilding segment for the year ended December 31, 2019 was $923,879,000, a 6% increase when compared to 2018.

Mortgage Banking

Mortgage closed loan production in the fourth quarter of 2019 totaled $1,418,742,000, an increase of 5% when compared to the fourth quarter of 2018.  Income before tax from the mortgage banking segment totaled $25,257,000 in the fourth quarter of 2019, an increase of 13% when compared to $22,364,000 in the fourth quarter of 2018.

Mortgage closed loan production for the year ended December 31, 2019 increased 7% to $5,164,725,000. Income before tax from the mortgage banking segment for the year ended December 31, 2019 increased 15% to $101,916,000 from $88,626,000 in 2018.

Other Matters

On January 24, 2020, Jeff Martchek, President of Homebuilding Operations, provided notice of his intention to retire.  Mr. Martchek has been employed by NVR since 1988.  Mr. Martchek's retirement will be effective in the second quarter of 2020 upon the orderly transition of his duties.

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)




Three Months Ended December 31,


Twelve Months Ended December 31,



2019


2018


2019


2018



(Unaudited)


(Unaudited)


(Unaudited)



Homebuilding:









Revenues


$

1,946,859



$

1,954,403



$

7,220,844



$

7,004,304


Other income


6,513



4,858



24,779



11,839


Cost of sales


(1,567,392)



(1,590,735)



(5,849,862)



(5,692,127)


Selling, general and administrative


(109,634)



(107,438)



(447,547)



(428,874)


Operating income


276,346



261,088



948,214



895,142


Interest expense


(6,301)



(6,014)



(24,335)



(24,036)


Homebuilding income


270,045



255,074



923,879



871,106











Mortgage Banking:









Mortgage banking fees


43,336



40,145



167,820



159,370


Interest income


3,232



3,223



12,142



11,593


Other income


818



722



2,857



2,546


General and administrative


(21,859)



(21,467)



(79,858)



(83,838)


Interest expense


(270)



(259)



(1,045)



(1,045)


Mortgage banking income


25,257



22,364



101,916



88,626











Income before taxes


295,302



277,438



1,025,795



959,732


Income tax expense


(39,165)



(45,280)



(147,256)



(162,535)











Net income


$

256,137



$

232,158



$

878,539



$

797,197











Basic earnings per share


$

69.78



$

64.46



$

241.31



$

219.58











Diluted earnings per share


$

64.41



$

58.57



$

221.13



$

194.80











Basic weighted average shares outstanding


3,671



3,601



3,641



3,631











Diluted weighted average shares outstanding


3,977



3,964



3,973



4,092


 

NVR, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share data)









December 31, 2019


December 31, 2018

ASSETS


(Unaudited)



Homebuilding:





Cash and cash equivalents


$

1,110,892



$

688,783


Restricted cash


17,943



16,982


Receivables


18,278



18,641


Inventory:





Lots and housing units, covered under sales agreements with customers


1,075,420



1,076,904


Unsold lots and housing units


184,352



115,631


Land under development


69,196



38,857


Building materials and other


18,320



21,718




1,347,288



1,253,110







Contract land deposits, net


413,851



396,177


Property, plant and equipment, net


52,260



42,234


Operating lease right-of-use assets


63,825




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


41,580



41,580


Deferred tax asset, net


115,731



112,333


Other assets


60,413



71,671




3,242,061



2,641,511


Mortgage Banking:





Cash and cash equivalents


29,412



23,092


Restricted cash


2,276



3,071


Mortgage loans held for sale, net


492,125



458,324


Property and equipment, net


5,828



6,510


Operating lease right-of-use assets


13,345




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


7,347



7,347


Other assets


17,421



26,078




567,754



524,422


Total assets


$

3,809,815



$

3,165,933







 

NVR, Inc.

Consolidated Balance Sheets (Continued)

(in thousands, except share and per share data)









December 31, 2019


December 31, 2018

LIABILITIES AND SHAREHOLDERS' EQUITY


(Unaudited)



Homebuilding:





Accounts payable


$

262,987



$

244,496


Accrued expenses and other liabilities


346,035



332,871


Customer deposits


131,886



138,246


Operating lease liabilities


71,095




Senior notes


598,301



597,681




1,410,304



1,313,294


Mortgage Banking:





Accounts payable and other liabilities


43,985



44,077


Operating lease liabilities


14,282






58,267



44,077


Total liabilities


1,468,571



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 December 31, 2019 and December 31, 2018


206



206


Additional paid-in capital


2,055,407



1,820,223


Deferred compensation trust – 107,295 and 107,340 shares of NVR, Inc.
common stock as of December 31, 2019 and December 31, 2018, respectively


(16,912)



(16,937)


Deferred compensation liability


16,912



16,937


Retained earnings


7,909,872



7,031,333


Less treasury stock at cost – 16,922,558 and 16,977,499 shares as of December
31, 2019 and December 31, 2018, respectively


(7,624,241)



(7,043,200)


Total shareholders' equity


2,341,244



1,808,562


Total liabilities and shareholders' equity


$

3,809,815



$

3,165,933







 

NVR, Inc.

Operating Activity

(dollars in thousands)

(unaudited)




















Three Months Ended December 31,


Twelve Months Ended December 31,



2019


2018


2019


2018



Units


Average
Price


Units


Average
Price


Units


Average
Price


Units


Average
Price

New orders, net of cancellations:
















     Mid Atlantic (1)


1,947



$

443.2



1,865



$

429.4



8,799



$

424.4



8,906



$

429.4


     North East (2)


349



$

425.1



245



$

395.7



1,349



$

390.8



1,296



$

400.4


     Mid East (3)


997



$

327.3



914



$

329.3



4,628



$

323.2



4,314



$

328.0


     South East (4)


1,099



$

305.9



817



$

300.8



4,760



$

302.6



3,765



$

297.7


     Total


4,392



$

381.1



3,841



$

376.1



19,536



$

368.4



18,281



$

376.3






































Three Months Ended December 31,


Twelve Months Ended December 31,



2019


2018


2019


2018



Units


Average
Price


Units


Average
Price


Units


Average
Price


Units


Average
Price

Settlements:

















     Mid Atlantic (1)


2,445



$

419.7



2,520



$

430.9



9,335



$

417.9



8,982



$

433.4


     North East (2)


392



$

382.4



393



$

400.9



1,325



$

388.5



1,415



$

410.4


     Mid East (3)


1,239



$

320.0



1,271



$

322.8



4,621



$

324.8



4,406



$

330.4


     South East (4)


1,255



$

298.2



1,002



$

299.8



4,387



$

297.1



3,644



$

294.8


     Total


5,331



$

365.2



5,186



$

376.8



19,668



$

367.1



18,447



$

379.7





















As of December 31, 2019


As of December 31, 2018


Units


 

Average
Price


 

Units



Average
Price

Backlog:














     Mid Atlantic (1)

3,612



$

440.1



4,148



$

423.4


     North East (2)

587



$

408.8



563



$

404.1


     Mid East (3)

1,813



$

332.0



1,806



$

336.2


     South East (4)

2,221



$

314.6



1,848



$

304.1


     Total

8,233



$

380.2



8,365



$

376.9



 


NVR, Inc.

Operating Activity (Continued)

(dollars in thousands)

(unaudited)












Three Months Ended December 31,


Twelve Months Ended December 31,



2019


2018


2019


2018

Average active communities:









     Mid Atlantic (1)


201


223


206


234

     North East (2)


36


34


33


36

     Mid East (3)


143


118


134


119

     South East (4)


107


88


97


88

     Total


487


463


470



477





















Three Months Ended December 31,


Twelve Months Ended December 31,



2019


2018


2019


2018

Homebuilding data:









New order cancellation rate


16

%


17

%


15

%


15

%

Lots controlled at end of period






104,900



99,700











Mortgage banking data:









Loan closings


$

1,418,742



$

1,356,430



$

5,164,725



$

4,829,406


Capture rate


91

%


88

%


90

%


88

%










Common stock information:









Shares outstanding at end of period






3,632,772



3,577,831


Number of shares repurchased


91,286



78,591



220,965



300,815


Aggregate cost of shares repurchased


$

332,875



$

188,765



$

698,417



$

846,134


 



(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:http://www.prnewswire.com/news-releases/nvr-inc-announces-fourth-quarter-and-full-year-results-300994739.html

SOURCE NVR, Inc.

Copyright 2020 PR Newswire

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