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Investor Alert

press release

July 26, 2022, 9:00 a.m. EDT

NVR, INC. ANNOUNCES SECOND QUARTER RESULTS

Jul 26, 2022 (PRNewswire via COMTEX) -- PR Newswire

RESTON, Va., July 26, 2022

RESTON, Va., July 26, 2022 /PRNewswire/ -- NVR, Inc. /zigman2/quotes/209548385/composite NVR +2.54% , one of the nation's largest homebuilding and mortgage banking companies, announced net income for its second quarter ended June 30, 2022 of $433.3 million, or $123.65 per diluted share. Net income and diluted earnings per share for the second quarter ended June 30, 2022 increased 35% and 50%, respectively, when compared to 2021 second quarter net income of $321.3 million, or $82.45 per diluted share. Consolidated revenues for the second quarter of 2022 totaled $2.66 billion, which increased 16% from $2.28 billion in the second quarter of 2021.

For the six months ended June 30, 2022, consolidated revenues were $5.04 billion, a 16% increase from $4.33 billion reported in 2021. Net income for the six months ended June 30, 2022 was $859.4 million, an increase of 51% when compared to the six months ended June 30, 2021. Diluted earnings per share for the six months ended June 30, 2022 was $240.05, an increase of 65% from $145.53 per diluted share for 2021.

Homebuilding

New orders in the second quarter of 2022 decreased by 16% to 4,663 units, when compared to 5,521 units in the second quarter of 2021. The average sales price of new orders in the second quarter of 2022 was $471,600, an increase of 7% when compared with the second quarter of 2021. The cancellation rate in the second quarter of 2022 was 14% compared to 8% in the second quarter of 2021. Settlements in the second quarter of 2022 increased by 2% to 5,820 units, compared to 5,685 units in the second quarter of 2021. The average settlement price in the second quarter of 2022 was $448,400, an increase of 15% from the second quarter of 2021. Our backlog of homes sold but not settled as of June 30, 2022 decreased on a unit basis by 3% to 12,286 units and increased on a dollar basis by 8% to $5.82 billion when compared to the respective backlog unit and dollar balances as of June 30, 2021.

Homebuilding revenues of $2.61 billion in the second quarter of 2022 increased by 17% compared to homebuilding revenues of $2.22 billion in the second quarter of 2021. Gross profit margin in the second quarter of 2022 increased to 26.3%, compared to 22.6% in the second quarter of 2021. Gross profit margins were favorably impacted by the aforementioned increase in the average settlement price in the second quarter of 2022. Income before tax from the homebuilding segment totaled $544.9 million in the second quarter of 2022, an increase of 44% when compared to the second quarter of 2021.

Mortgage Banking

Mortgage closed loan production in the second quarter of 2022 totaled $1.65 billion, an increase of 5% when compared to the second quarter of 2021. Income before tax from the mortgage banking segment totaled $29.1 million in the second quarter of 2022, a decrease of 26% when compared to $39.2 million in the second quarter of 2021. This decrease was primarily attributable to a decrease in secondary marketing gains.

Effective Tax Rate

Our effective tax rate for the three and six months ended June 30, 2022 was 24.5% and 24.6%, respectively, compared to 23.0% and 21.9% for the three and six months ended June 30, 2021, respectively. The increase in the effective tax rate in each period is primarily attributable to a lower income tax benefit recognized for excess tax benefits from stock option exercises, which totaled $8.7 million and $17.2 million for the three and six months ended June 30, 2022, respectively, and $11.2 million and $28.6 million for the three and six months ended June 30, 2021, respectively.

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-four 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 and related supply chain disruptions; 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,


2022
2021
2022
2021









Homebuilding:







Revenues
$ 2,610,062
$ 2,224,560
$ 4,919,289
$ 4,188,271
Other income
3,896
1,632
5,235
3,218
Cost of sales
(1,924,727)
(1,721,673)
(3,576,092)
(3,299,126)
Selling, general and administrative
(132,432)
(113,406)
(261,942)
(234,825)
Operating income
556,799
391,113
1,086,490
657,538
Interest expense
(11,852)
(12,850)
(24,656)
(25,856)
Homebuilding income
544,947
378,263
1,061,834
631,682









Mortgage Banking:







Mortgage banking fees
48,881
59,038
118,063
136,773
Interest income
2,772
2,209
4,846
4,241
Other income
1,303
988
2,375
1,855
General and administrative
(23,486)
(22,613)
(46,394)
(44,269)
Interest expense
(405)
(420)
(767)
(811)
Mortgage banking income
29,065
39,202
78,123
97,789









Income before taxes
574,012
417,465
1,139,957
729,471
Income tax expense
(140,698)
(96,170)
(280,543)
(159,414)









Net income
$ 433,314
$ 321,295
$ 859,414
$ 570,057









Basic earnings per share
$ 131.84
$ 88.69
$ 257.65
$ 156.27









Diluted earnings per share
$ 123.65
$ 82.45
$ 240.05
$ 145.53









Basic weighted average shares outstanding
3,287
3,623
3,336
3,648









Diluted weighted average shares outstanding
3,504
3,897
3,580
3,917
NVR, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share data)
(unaudited)







June 30, 2022
December 31, 2021
ASSETS



Homebuilding:



Cash and cash equivalents
$ 1,483,445
$ 2,545,069
Restricted cash
60,695
60,730
Receivables
29,007
18,552
Inventory:



Lots and housing units, covered under sales agreements with customers
2,138,456
1,777,862
Unsold lots and housing units
177,372
127,434
Land under development
16,274
12,147
Building materials and other
46,643
29,923


2,378,745
1,947,366





Contract land deposits, net
524,398
497,139
Property, plant and equipment, net
57,397
56,979
Operating lease right-of-use assets
68,323
59,010
Reorganization value in excess of amounts allocable to identifiable assets, net
41,580
41,580
Other assets
233,987
229,018


4,877,577
5,455,443
Mortgage Banking:



Cash and cash equivalents
16,158
28,398
Restricted cash
3,403
2,519
Mortgage loans held for sale, net
335,624
302,192
Property and equipment, net
3,296
3,658
Operating lease right-of-use assets
13,405
9,758
Reorganization value in excess of amounts allocable to identifiable assets, net
7,347
7,347
Other assets
30,889
25,160


410,122
379,032
Total assets
$ 5,287,699
$ 5,834,475





NVR, Inc.
Consolidated Balance Sheets (Continued)
(in thousands, except share and per share data)
(unaudited)







June 30, 2022
December 31, 2021
LIABILITIES AND SHAREHOLDERS' EQUITY



Homebuilding:



Accounts payable
$ 417,771
$ 336,560
Accrued expenses and other liabilities
388,179
435,860
Customer deposits
439,119
417,463
Operating lease liabilities
73,075
64,128
Senior notes
915,801
1,516,255


2,233,945
2,770,266
Mortgage Banking:



Accounts payable and other liabilities
47,868
51,394
Operating lease liabilities
14,220
10,437


62,088
61,831
Total liabilities
2,296,033
2,832,097





Commitments and contingencies








Shareholders' equity:



Common stock, $0.01 par value; 60,000,000 shares authorized; 20,555,330 sharesissued as of both June 30, 2022 and December 31, 2021
206
206
Additional paid-in capital
2,498,123
2,378,191
Deferred compensation trust - 106,697 shares of NVR, Inc. common stock as ofboth June 30, 2022 and December 31, 2021
(16,710)
(16,710)
Deferred compensation liability
16,710
16,710
Retained earnings
10,907,253
10,047,839
Less treasury stock at cost - 17,271,177 and 17,107,889 shares as of June 30,2022 and December 31, 2021, respectively
(10,413,916)
(9,423,858)
Total shareholders' equity
2,991,666
3,002,378
Total liabilities and shareholders' equity
$ 5,287,699
$ 5,834,475





NVR, Inc.
Operating Activity
(dollars in thousands)
(unaudited)



















Three Months Ended June 30,
Six Months Ended June 30,


2022
2021
2022
2021


Units
Average Price
Units
Average Price
Units
Average Price
Units
Average Price
New orders, net of cancellations:













Mid Atlantic (1)
1,860
$ 535.1
2,090
$ 535.4
4,167
$ 531.8
4,381
$ 518.1
North East (2)
441
$ 503.7
394
$ 499.3
901
$ 513.5
834
$ 486.3
Mid East (3)
1,114
$ 410.5
1,320
$ 375.7
2,648
$ 403.6
3,115
$ 361.1
South East (4)
1,248
$ 420.0
1,717
$ 360.3
2,874
$ 421.6
3,505
$ 348.7
Total
4,663
$ 471.6
5,521
$ 440.2
10,590
$ 468.3
11,835
$ 424.4




































Three Months Ended June 30,
Six Months Ended June 30,


2022
2021
2022
2021


Units
AveragePrice
Units
Average Price
Units
Average Price
Units
AveragePrice
Settlements:















Mid Atlantic (1)
2,292
$ 527.1
2,224
$ 471.4
4,472
$ 525.5
4,234
$ 468.7
North East (2)
472
$ 503.0
433
$ 446.3
820
$ 503.6
805
$ 441.5
Mid East (3)
1,356
$ 384.2
1,404
$ 340.6
2,566
$ 382.8
2,667
$ 338.6
South East (4)
1,700
$ 378.4
1,624
$ 310.7
3,176
$ 369.6
3,051
$ 309.8
Total
5,820
$ 448.4
5,685
$ 391.3
11,034
$ 445.8
10,757
$ 389.3



















As of June 30,


2022
2021


Units
Average Price
Units
Average Price
Backlog:








Mid Atlantic (1)
4,613
$ 541.1
4,626
$ 517.7
North East (2)
1,050
$ 519.3
979
$ 485.7
Mid East (3)
3,109
$ 399.0
3,322
$ 364.8
South East (4)
3,514
$ 438.2
3,700
$ 359.0
Total
12,286
$ 473.9
12,627
$ 428.5










NVR, Inc.
Operating Activity (Continued)
(dollars in thousands)
(unaudited)











Three Months Ended June 30,
Six Months Ended June 30,


2022
2021
2022
2021
Average active communities:







Mid Atlantic (1)
155
153
153
156
North East (2)
38
32
36
33
Mid East (3)
121
126
125
133
South East (4)
92
109
91
110
Total
406
420
405
432




















Three Months Ended June 30,
Six Months Ended June 30,


2022
2021
2022
2021
Homebuilding data:







New order cancellation rate
14.3 %
8.3 %
12.1 %
9.0 %
Lots controlled at end of period




133,200
114,100









Mortgage banking data:







Loan closings
$ 1,647,972
$ 1,565,095
$ 3,132,565
$ 2,977,974
Capture rate
84 %
89 %
85 %
89 %









Common stock information:







Shares outstanding at end of period




3,284,153
3,579,190
Number of shares repurchased
61,078
78,452
207,132
164,975
Aggregate cost of shares repurchased
$ 266,915
$ 376,941
$ 1,015,703
$ 754,366









(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-301592838.html

SOURCE NVR, Inc.

COMTEX_410987326/2454/2022-07-26T09:00:25

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/zigman2/quotes/209548385/composite
US : U.S.: NYSE
$ 4,557.92
+112.97 +2.54%
Volume: 21,909
Nov. 29, 2022 4:00p
P/E Ratio
10.18
Dividend Yield
N/A
Market Cap
$14.21 billion
Rev. per Employee
$1.50M
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