NVR, Inc. Announces First Quarter Results
RESTON, Va., April 22, 2019 /PRNewswire/ -- NVR, Inc. (NYSE: NVR), one of the nation's largest homebuilding and mortgage banking companies, announced net income for its first quarter ended March 31, 2019 of $188,406,000, or $47.64 per diluted share. Net income and diluted earnings per share for the first quarter ended March 31, 2019 increased 13% and 21%, respectively, when compared to 2018 first quarter net income of $166,049,000, or $39.34 per diluted share. Consolidated revenues for the first quarter of 2019 totaled $1,687,011,000, a 10% increase from $1,529,414,000 in the first quarter of 2018.
Homebuilding
New orders in the first quarter of 2019 decreased by 1% to 5,139 units, when compared to 5,174 units in the first quarter of 2018. The average sales price of new orders in the first quarter of 2019 was $367,000, a decrease of 3% when compared with the first quarter of 2018. Settlements increased in the first quarter of 2019 to 4,493 units, which was 15% higher than the first quarter of 2018. The Company's backlog of homes sold but not settled as of March 31, 2019 decreased on a unit basis by 8% to 9,011 units and decreased on a dollar basis by 9% to $3,395,132,000 when compared to March 31, 2018.
Homebuilding revenues in the first quarter of 2019 totaled $1,643,206,000, 10% higher than the year earlier period. Gross profit margin in the first quarter of 2019 decreased to 18.5%, compared to 18.7% in the first quarter of 2018. Income before tax from the homebuilding segment totaled $188,410,000 in the first quarter of 2019, an increase of 12% when compared to the first quarter of 2018.
Mortgage Banking
Mortgage closed loan production in the first quarter of 2019 totaled $1,140,999,000, an increase of 13% when compared to the first quarter of 2018. Income before tax from the mortgage banking segment totaled $30,197,000 in the first quarter of 2019, an increase of 35% when compared to $22,428,000 in the first quarter of 2018.
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)
(Unaudited)
Three Months Ended March 31,
2019 2018
Homebuilding:
Revenues $
1,643,206 $
1,490,093
Other income 5,737 1,977
Cost of sales (1,338,806) (1,211,946)
Selling, general and administrative (115,734) (105,547)
Operating income 194,403 174,577
Interest expense (5,993) (6,007)
Homebuilding income 188,410 168,570
Mortgage Banking:
Mortgage banking fees 43,805 39,321
Interest income 2,833 2,093
Other income 539 524
General and administrative (16,758) (19,235)
Interest expense (222) (275)
Mortgage banking income 30,197 22,428
Income before taxes 218,607 190,998
Income tax expense (30,201) (24,949)
Net income $
188,406 $
166,049
Basic earnings per share $
52.23 $
45.19
Diluted earnings per share $
47.64 $
39.34
Basic weighted average shares outstanding 3,607 3,675
Diluted weighted average shares outstanding 3,955 4,220
NVR, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share data)
(Unaudited)
March 31, 2019 December 31, 2018
ASSETS
Homebuilding:
Cash and cash equivalents $
805,195 $
688,783
Restricted cash 19,609 16,982
Receivables 30,488 18,641
Inventory:
Lots and housing units, covered under sales agreements with customers 1,101,147 1,076,904
Unsold lots and housing units 122,966 115,631
Land under development 37,781 38,857
Building materials and other 19,275 21,718
1,281,169 1,253,110
Contract land deposits, net 389,332 396,177
Property, plant and equipment, net 43,269 42,234
Operating lease right-of-use assets 65,519
Reorganization value in excess of amounts allocable to identifiable assets, net 41,580 41,580
Other assets 192,115 184,004
2,868,276 2,641,511
Mortgage Banking:
Cash and cash equivalents 11,258 23,092
Restricted cash 4,337 3,071
Mortgage loans held for sale, net 422,557 458,324
Property and equipment, net 6,274 6,510
Operating lease right-of-use assets 12,370
Reorganization value in excess of amounts allocable to identifiable assets, net 7,347 7,347
Other assets 30,352 26,078
494,495 524,422
Total assets $
3,362,771 $
3,165,933
NVR, Inc.
Consolidated Balance Sheets (Continued)
(in thousands, except share and per share data)
(Unaudited)
March 31, 2019 December 31, 2018
LIABILITIES AND SHAREHOLDERS' EQUITY
Homebuilding:
Accounts payable $
283,119 $
244,496
Accrued expenses and other liabilities 310,880 332,871
Customer deposits 142,634 138,246
Operating lease liabilities 72,965
Senior notes 597,836 597,681
1,407,434 1,313,294
Mortgage Banking:
Accounts payable and other liabilities 43,327 44,077
Operating lease liabilities 13,234
56,561 44,077
Total liabilities 1,463,995 1,357,371
Commitments and contingencies
Shareholders' equity:
Common stock, $0.01 par value; 60,000,000 shares authorized; 20,555,330 shares 206 206
issued as of both March 31, 2019 and December 31, 2018
Additional paid-in capital 1,899,100 1,820,223
Deferred compensation trust - 107,295 and 107,340 shares of NVR, Inc. common (16,912) (16,937)
stock as of March 31, 2019 and December 31, 2018, respectively
Deferred compensation liability 16,912 16,937
Retained earnings 7,219,739 7,031,333
Less treasury stock at cost - 16,964,581 and 16,977,499 shares as of March 31, (7,220,269) (7,043,200)
2019 and December 31, 2018, respectively
Total shareholders' equity 1,898,776 1,808,562
Total liabilities and shareholders' equity $
3,362,771 $
3,165,933
NVR, Inc.
Operating Activity
(dollars in thousands)
(Unaudited)
Three Months Ended March 31,
2019 2018
Homebuilding data:
New orders (units)
Mid Atlantic (1) 2,444 2,503
North East (2) 313 371
Mid East (3) 1,214 1,296
South East (4) 1,168 1,004
Total 5,139 5,174
Average new order price $
367.0 $
378.2
Settlements (units)
Mid Atlantic (1) 2,143 1,926
North East (2) 303 301
Mid East (3) 1,030 879
South East (4) 1,017 790
Total 4,493 3,896
Average settlement price $
365.7 $
382.4
Backlog (units)
Mid Atlantic (1) 4,449 4,801
North East (2) 573 752
Mid East (3) 1,990 2,315
South East (4) 1,999 1,941
Total 9,011 9,809
Average backlog price $
376.8 $
381.7
New order cancellation rate 14% 14%
Community count (average) 449 485
Lots controlled at end of period 98,300 91,300
Mortgage banking data:
Loan closings $
1,140,999 $
1,009,673
Capture rate 88% 86%
Common stock information:
Shares outstanding at end of period 3,590,749 3,618,744
Number of shares repurchased 81,829 116,268
Aggregate cost of shares
repurchased $
216,499 $
357,242
(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.
