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NVR, INC. ANNOUNCES THIRD QUARTER RESULTS

RESTON, Va., Oct. 25, 2022 /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, 2022 of $411.4 million, or $118.51 per diluted share.  Net income and diluted earnings per share for the third quarter ended September 30, 2022 increased 24% and 37%, respectively, when compared to 2021 third quarter net income of $332.1 million, or $86.44 per diluted share.  Consolidated revenues for the third quarter of 2022 totaled $2.78 billion, which increased 16% from $2.40 billion in the third quarter of 2021.

For the nine months ended September 30, 2022, consolidated revenues were $7.81 billion, a 16% increase from $6.72 billion reported in 2021. Net income for the nine months ended September 30, 2022 was $1.27 billion, an increase of 41% when compared to net income for the nine months ended September 30, 2021 of $902.1 million. Diluted earnings per share for the nine months ended September 30, 2022 was $358.61, an increase of 55% from $231.75 per diluted share for 2021.

Homebuilding

New orders in the third quarter of 2022 decreased by 15% to 4,421 units, when compared to 5,201 units in the third quarter of 2021. The average sales price of new orders in the third quarter of 2022 was $453,400, an increase of 3% when compared with the third quarter of 2021.  The cancellation rate in the third quarter of 2022 was 15% compared to 9% in the third quarter of 2021.  Settlements in the third quarter of 2022 increased by 5% to 5,949 units, compared to 5,683 units in the third quarter of 2021. The average settlement price in the third quarter of 2022 was $460,500, an increase of 12% from the third quarter of 2021. Our backlog of homes sold but not settled as of September 30, 2022 decreased on a unit basis by 11% to 10,758 units and decreased on a dollar basis by 5% to $5.09 billion when compared to the respective backlog unit and dollar balances as of September 30, 2021.

Homebuilding revenues of $2.74 billion in the third quarter of 2022 increased by 17% compared to homebuilding revenues of $2.34 billion in the third quarter of 2021.  Gross profit margin in the third quarter of 2022 increased to 23.6%, compared to 22.2% in the third quarter of 2021.  Income before tax from the homebuilding segment totaled $520.9 million in the third quarter of 2022, an increase of 32% when compared to the third quarter of 2021.

Mortgage Banking

Mortgage closed loan production in the third quarter of 2022 totaled $1.66 billion, an increase of 2% when compared to the third quarter of 2021.  Income before tax from the mortgage banking segment totaled $17.6 million in the third quarter of 2022, a decrease of 55% when compared to $39.0 million in the third 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 nine months ended September 30, 2022 was 23.6% and 24.3%, respectively, compared to 23.5% and 22.5% for the three and nine months ended September 30, 2021, respectively.  The increase in the effective tax rate for the nine month period in 2022 is primarily attributable to a lower income tax benefit recognized  for excess tax benefits from stock option exercises, which totaled $27.7 million for the nine month period ended September 30, 2022, compared to $37.8 million for the nine month period ended September 30, 2021.

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, 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 September 30,


Nine Months Ended September 30,



2022


2021


2022


2021










Homebuilding:









Revenues


$          2,739,445


$          2,336,615


$          7,658,734


$          6,524,886

Other income


10,211


1,496


15,446


4,714

Cost of sales


(2,092,457)


(1,817,939)


(5,668,549)


(5,117,065)

Selling, general and administrative


(129,416)


(112,226)


(391,358)


(347,051)

Operating income


527,783


407,946


1,614,273


1,065,484

Interest expense


(6,854)


(12,838)


(31,510)


(38,694)

Homebuilding income


520,929


395,108


1,582,763


1,026,790










Mortgage Banking:









Mortgage banking fees


37,455


59,025


155,518


195,798

Interest income


3,437


2,336


8,283


6,577

Other income


1,294


1,022


3,669


2,877

General and administrative


(24,252)


(22,959)


(70,646)


(67,228)

Interest expense


(348)


(405)


(1,115)


(1,216)

Mortgage banking income


17,586


39,019


95,709


136,808










Income before taxes


538,515


434,127


1,678,472


1,163,598

Income tax expense


(127,122)


(102,046)


(407,665)


(261,460)










Net income


$              411,393


$              332,081


$          1,270,807


$              902,138










Basic earnings per share


$                125.97


$                  93.25


$                383.68


$                249.30










Diluted earnings per share


$                118.51


$                  86.44


$                358.61


$                231.75










Basic weighted average shares outstanding


3,266


3,561


3,312


3,619










Diluted weighted average shares outstanding


3,471


3,842


3,544


3,893

 

NVR, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share data)

(unaudited)








September 30, 2022


December 31, 2021

ASSETS





Homebuilding:





Cash and cash equivalents


$              1,748,506


$              2,545,069

Restricted cash


51,239


60,730

Receivables


28,378


18,552

Inventory:





Lots and housing units, covered under sales agreements with customers


1,931,639


1,777,862

Unsold lots and housing units


194,882


127,434

Land under development


15,230


12,147

Building materials and other


28,698


29,923



2,170,449


1,947,366






Contract land deposits, net


521,572


497,139

Property, plant and equipment, net


55,982


56,979

Operating lease right-of-use assets


69,933


59,010

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


41,580


41,580

Other assets


230,255


229,018



4,917,894


5,455,443

Mortgage Banking:





Cash and cash equivalents


18,431


28,398

Restricted cash


2,924


2,519

Mortgage loans held for sale, net


316,094


302,192

Property and equipment, net


3,250


3,658

Operating lease right-of-use assets


14,534


9,758

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


7,347


7,347

Other assets


109,060


25,160



471,640


379,032

Total assets


$              5,389,534


$              5,834,475






 

NVR, Inc.

Consolidated Balance Sheets (Continued)

(in thousands, except share and per share data)

(unaudited)








September 30, 2022


December 31, 2021

LIABILITIES AND SHAREHOLDERS' EQUITY





Homebuilding:





Accounts payable


$                  393,941


$                  336,560

Accrued expenses and other liabilities


427,072


435,860

Customer deposits


376,160


417,463

Operating lease liabilities


74,670


64,128

Senior notes


915,346


1,516,255



2,187,189


2,770,266

Mortgage Banking:





Accounts payable and other liabilities


102,101


51,394

Operating lease liabilities


15,405


10,437



117,506


61,831

Total liabilities


2,304,695


2,832,097






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, 2022 and December 31, 2021


206


206

Additional paid-in capital


2,538,812


2,378,191

Deferred compensation trust – 106,697 shares of NVR, Inc. common stock as
of both September 30, 2022 and December 31, 2021


(16,710)


(16,710)

Deferred compensation liability


16,710


16,710

Retained earnings


11,318,646


10,047,839

Less treasury stock at cost – 17,343,353 and 17,107,889 shares as of
September 30, 2022 and December 31, 2021, respectively


(10,772,825)


(9,423,858)

Total shareholders' equity


3,084,839


3,002,378

Total liabilities and shareholders' equity


$              5,389,534


$              5,834,475






 

NVR, Inc.

Operating Activity

(dollars in thousands)

(unaudited)




















Three Months Ended September 30,


Nine Months Ended September 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)


1,813


$         516.2


2,024


$         523.7


5,980


$         527.1


6,405


$         519.8

North East (2)


348


$         510.5


403


$         496.7


1,249


$         512.7


1,237


$         489.7

Mid East (3)


955


$         406.7


1,190


$         376.8


3,603


$         404.4


4,305


$         365.4

South East (4)


1,305


$         385.0


1,584


$         372.9


4,179


$         410.2


5,089


$         356.2

Total


4,421


$         453.4


5,201


$         442.0


15,011


$         463.9


17,036


$         429.8





































Three Months Ended September 30,


Nine Months Ended September 30,



2022


2021


2022


2021



Units


Average Price


Units


Average Price


Units


Average Price


Units


Average Price

Settlements:

















Mid Atlantic (1)


2,417


$         530.6


2,177


$         497.3


6,889


$         527.3


6,411


$         478.4

North East (2)


487


$         513.5


455


$         468.3


1,307


$         507.3


1,260


$         451.2

Mid East (3)


1,468


$         388.3


1,430


$         351.8


4,034


$         384.8


4,097


$         343.2

South East (4)


1,577


$         403.9


1,621


$         331.6


4,753


$         381.0


4,672


$         317.3

Total


5,949


$         460.5


5,683


$         411.1


16,983


$         450.9


16,440


$         396.9


















 



As of September 30,




2022


2021




Units


Average Price


Units


Average Price


Backlog:










Mid Atlantic (1)


4,009


$         536.2


4,473


$         530.3


North East (2)


911


$         519.1


927


$         499.0


Mid East (3)


2,596


$         407.8


3,082


$         375.4


South East (4)


3,242


$         433.5


3,663


$         377.0


Total


10,758


$         472.8


12,145


$         442.4












 

NVR, Inc.

Operating Activity (Continued)

(dollars in thousands)

(unaudited)












Three Months Ended September 30,


Nine Months Ended September 30,



2022


2021


2022


2021

Average active communities:









Mid Atlantic (1)


164


151


157


154

North East (2)


37


34


36


34

Mid East (3)


126


125


126


130

South East (4)


96


104


92


108

Total


423


414


411


426





















Three Months Ended September 30,


Nine Months Ended September 30,



2022


2021


2022


2021

Homebuilding data:









New order cancellation rate


15.0 %


9.2 %


13.0 %


9.1 %

Lots controlled at end of period






131,400


118,600










Mortgage banking data:









Loan closings


$         1,656,187


$         1,615,880


$       4,788,751


$       4,593,854

Capture rate


81 %


88 %


84 %


89 %










Common stock information:









Shares outstanding at end of period






3,211,977


3,512,686

Number of shares repurchased


88,016


79,620


295,148


244,595

Aggregate cost of shares repurchased


$            368,490


$            398,488


$       1,384,193


$       1,152,855



(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

 

Cision
Cision

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SOURCE NVR, Inc.