NVR, INC. ANNOUNCES THIRD QUARTER RESULTS

NVR, INC. ANNOUNCES THIRD QUARTER RESULTS

PR Newswire

RESTON, Va., Oct. 24, 2023 /PRNewswire/ -- NVR, Inc. (NYSE: NVR), one of the nation's largest homebuilding and mortgage banking companies, announced net income for its third quarter ended September 30, 2023 of $433.2 million, or $125.26 per diluted share.  Net income and diluted earnings per share for the third quarter ended September 30, 2023 increased 5% and 6%, respectively, when compared to 2022 third quarter net income of $411.4 million, or $118.51 per diluted share.  Consolidated revenues for the third quarter of 2023 totaled $2.57 billion, which decreased 7% from $2.78 billion in the third quarter of 2022. 

For the nine months ended September 30, 2023, consolidated revenues were $7.09 billion, a 9% decrease from $7.81 billion reported in 2022. Net income for the nine months ended September 30, 2023 was $1.18 billion, a decrease of 7% when compared to net income for the nine months ended September 30, 2022 of $1.27 billion. Diluted earnings per share for the nine months ended September 30, 2023 was $341.97, a decrease of 5% from $358.61 per diluted share for 2022.

Homebuilding

New orders in the third quarter of 2023 increased by 7% to 4,746 units, when compared to 4,421 units in the third quarter of 2022. The average sales price of new orders in the third quarter of 2023 was $456,100, an increase of 1% when compared with the third quarter of 2022.  The cancellation rate in the third quarter of 2023 was 14% compared to 15% in the third quarter of 2022.  Settlements in the third quarter of 2023 decreased by 6% to 5,606 units, compared to 5,949 units in the third quarter of 2022. The average settlement price in the third quarter of 2023 was $448,000, a decrease of 3% when compared with the third quarter of 2022. Our backlog of homes sold but not settled as of September 30, 2023 decreased on a unit basis by 4% to 10,371 units and decreased on a dollar basis by 6% to $4.80 billion when compared to the respective backlog unit and dollar balances as of September 30, 2022.

Homebuilding revenues of $2.51 billion in the third quarter of 2023 decreased by 8% compared to homebuilding revenues of $2.74 billion in the third quarter of 2022.  Gross profit margin in the third quarter of 2023 increased to 24.3%, compared to 23.6% in the third quarter of 2022.  Income before tax from the homebuilding segment totaled $500.8 million in the third quarter of 2023, a decrease of 4% when compared to the third quarter of 2022.

Mortgage Banking

Mortgage closed loan production in the third quarter of 2023 totaled $1.62 billion, a decrease of 2% when compared to the third quarter of 2022.  Income before tax from the mortgage banking segment totaled $38.5 million in the third quarter of 2023, an increase of 119% when compared to $17.6 million in the third quarter of 2022.  This increase was primarily attributable to an increase in secondary marketing gains on sales of loans.

Effective Tax Rate

Our effective tax rate for the three and nine months ended September 30, 2023 was 19.7% and 18.2%, respectively, compared to 23.6% and 24.3% for the three and nine months ended September 30, 2022, respectively.  The decrease in the effective tax rate in each period is primarily attributable to a higher income tax benefit recognized for excess tax benefits from stock option exercises, which totaled $31.9 million and $111.0 million for the three and nine months ended September 30, 2023, respectively, and $10.6 million and $27.7 million for the three and nine months ended September 30, 2022, 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-five metropolitan areas in fifteen 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 and financial results, 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; the economic impact of a major epidemic or pandemic; 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 September 30,


Nine Months Ended September 30,



2023


2022


2023


2022










Homebuilding:









Revenues


$          2,512,409


$          2,739,445


$          6,927,511


$          7,658,734

Other income


39,914


10,211


107,119


15,446

Cost of sales


(1,902,174)


(2,092,457)


(5,238,230)


(5,668,549)

Selling, general and administrative


(142,715)


(129,416)


(434,876)


(391,358)

Operating income


507,434


527,783


1,361,524


1,614,273

Interest expense


(6,628)


(6,854)


(20,257)


(31,510)

Homebuilding income


500,806


520,929


1,341,267


1,582,763










Mortgage Banking:









Mortgage banking fees


56,616


37,455


158,121


155,518

Interest income


5,067


3,437


11,908


8,283

Other income


1,169


1,294


3,260


3,669

General and administrative


(24,050)


(24,252)


(69,538)


(70,646)

Interest expense


(268)


(348)


(692)


(1,115)

Mortgage banking income


38,534


17,586


103,059


95,709










Income before taxes


539,340


538,515


1,444,326


1,678,472

Income tax expense


(106,183)


(127,122)


(262,790)


(407,665)










Net income


$              433,157


$              411,393


$          1,181,536


$          1,270,807










Basic earnings per share


$                132.92


$                125.97


$                363.14


$                383.68










Diluted earnings per share


$                125.26


$                118.51


$                341.97


$                358.61










Basic weighted average shares outstanding


3,259


3,266


3,254


3,312










Diluted weighted average shares outstanding


3,458


3,471


3,455


3,544

 

NVR, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share data)

(unaudited)








September 30, 2023


December 31, 2022

ASSETS





Homebuilding:





Cash and cash equivalents


$              2,876,606


$              2,503,424

Restricted cash


48,979


48,455

Receivables


33,878


20,842

Inventory:





Lots and housing units, covered under sales agreements with customers


1,723,838


1,554,955

Unsold lots and housing units


220,901


181,952

Land under development


41,238


27,100

Building materials and other


17,796


24,268



2,003,773


1,788,275






Contract land deposits, net


530,170


496,080

Property, plant and equipment, net


58,743


57,950

Operating lease right-of-use assets


72,358


71,081

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


41,580


41,580

Other assets


233,768


219,483



5,899,855


5,247,170

Mortgage Banking:





Cash and cash equivalents


32,310


19,415

Restricted cash


12,099


2,974

Mortgage loans held for sale, net


325,792


316,806

Property and equipment, net


6,182


3,559

Operating lease right-of-use assets


24,595


16,011

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


7,347


7,347

Other assets


64,083


47,691



472,408


413,803

Total assets


$              6,372,263


$              5,660,973






 

NVR, Inc.

Consolidated Balance Sheets (Continued)

(in thousands, except share and per share data)

(unaudited)








September 30, 2023


December 31, 2022

LIABILITIES AND SHAREHOLDERS' EQUITY





Homebuilding:





Accounts payable


$                  373,303


$                  334,016

Accrued expenses and other liabilities


386,299


437,234

Customer deposits


355,311


313,804

Operating lease liabilities


77,639


75,818

Senior notes


913,496


914,888



2,106,048


2,075,760

Mortgage Banking:





Accounts payable and other liabilities


67,333


61,396

Operating lease liabilities


26,299


16,968



93,632


78,364

Total liabilities


2,199,680


2,154,124






Commitments and contingencies










Shareholders' equity:





Common stock, $0.01 par value; 60,000,000 shares authorized; 20,555,330 shares
issued as of both September 30, 2023 and December 31, 2022


206


206

Additional paid-in capital


2,801,027


2,600,014

Deferred compensation trust – 106,697 shares of NVR, Inc. common stock as of
both September 30, 2023 and December 31, 2022


(16,710)


(16,710)

Deferred compensation liability


16,710


16,710

Retained earnings


12,954,950


11,773,414

Less treasury stock at cost – 17,345,353 and 17,336,397 shares as of September
30, 2023 and December 31, 2022, respectively


(11,583,600)


(10,866,785)

Total shareholders' equity


4,172,583


3,506,849

Total liabilities and shareholders' equity


$              6,372,263


$              5,660,973






 

NVR, Inc.

Operating Activity

(dollars in thousands)

(unaudited)




















Three Months Ended September 30,


Nine Months Ended September 30,



2023


2022


2023


2022



Units


Average Price


Units


Average Price


Units


Average Price


Units


Average Price

New orders, net of cancellations:















Mid Atlantic (1)


1,822


$         526.2


1,813


$         516.2


6,405


$         520.2


5,980


$         527.1

North East (2)


448


$         561.3


348


$         510.5


1,353


$         563.7


1,249


$         512.7

Mid East (3)


916


$         407.2


955


$         406.7


3,572


$         392.4


3,603


$         404.4

South East (4)


1,560


$         372.8


1,305


$         385.0


5,209


$         366.3


4,179


$         410.2

Total


4,746


$         456.1


4,421


$         453.4


16,539


$         447.7


15,011


$         463.9





































Three Months Ended September 30,


Nine Months Ended September 30,



2023


2022


2023


2022



Units


Average Price


Units


Average Price


Units


Average Price


Units


Average Price

Settlements:

















Mid Atlantic (1)


2,199


$         521.2


2,417


$         530.6


6,024


$         522.2


6,889


$         527.3

North East (2)


476


$         563.5


487


$         513.5


1,271


$         538.6


1,307


$         507.3

Mid East (3)


1,209


$         387.5


1,468


$         388.3


3,265


$         392.8


4,034


$         384.8

South East (4)


1,722


$         365.2


1,577


$         403.9


4,770


$         380.2


4,753


$         381.0

Total


5,606


$         448.0


5,949


$         460.5


15,330


$         451.8


16,983


$         450.9































As of September 30,









2023


2022









Units


Average Price


Units


Average Price







Backlog:















Mid Atlantic (1)


4,073


$         531.7


4,009


$         536.2







North East (2)


967


$         587.5


911


$         519.1







Mid East (3)


2,160


$         401.1


2,596


$         407.8







South East (4)


3,171


$         379.3


3,242


$         433.5







Total


10,371


$         463.1


10,758


$         472.8

















 

NVR, Inc.

Operating Activity (Continued)

(dollars in thousands)

(unaudited)












Three Months Ended September 30,


Nine Months Ended September 30,



2023


2022


2023


2022

Average active communities:









Mid Atlantic (1)


167


164


166


157

North East (2)


36


37


37


36

Mid East (3)


109


126


111


126

South East (4)


119


96


110


92

Total


431


423


424


411





















Three Months Ended September 30,


Nine Months Ended September 30,



2023


2022


2023


2022

Homebuilding data:









New order cancellation rate


13.6 %


15.0 %


12.7 %


13.0 %

Lots controlled at end of period






133,900


131,400










Mortgage banking data:









Loan closings


$         1,621,599


$         1,656,187


$       4,240,529


$       4,788,751

Capture rate


89 %


81 %


86 %


84 %










Common stock information:









Shares outstanding at end of period






3,209,977


3,211,977

Number of shares repurchased


78,750


88,016


134,751


295,148

Aggregate cost of shares repurchased


$            484,262


$            368,490


$          795,387


$       1,384,193





(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, Florida and Georgia

 

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SOURCE NVR, INC.

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