Thursday, March 28, 2024

NVR, INC. ANNOUNCES FIRST QUARTER RESULTS

RESTON, Va., April 25, 2023 /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, 2023 of $344.4 million, or $99.89 per diluted share.  Net income and diluted earnings per share for the first quarter ended March 31, 2023 decreased 19% and 14%, respectively, when compared to 2022 first quarter net income of $426.1 million, or $116.56 per diluted share.  Consolidated revenues for the first quarter of 2023 totaled $2.18 billion, which decreased 8% from $2.38 billion in the first quarter of 2022. 

Homebuilding

New orders in the first quarter of 2023 decreased by 1% to 5,888 units, when compared to 5,927 units in the first quarter of 2022. The average sales price of new orders in the first quarter of 2023 was $441,200, a decrease of 5% when compared with the first quarter of 2022.  The cancellation rate in the first quarter of 2023 was 14% compared to 10% in the first quarter of 2022.  Settlements in the first quarter of 2023 decreased by 11% to 4,639 units, compared to 5,214 units in the first quarter of 2022. The average settlement price in the first quarter of 2023 was $459,400, an increase of 4% from the first quarter of 2022. Our backlog of homes sold but not settled as of March 31, 2023 decreased on a unit basis by 23% to 10,411 units and decreased on a dollar basis by 23% to $4.79 billion when compared to the respective backlog unit and dollar balances as of March 31, 2022.

Homebuilding revenues of $2.13 billion in the first quarter of 2023 decreased by 8% compared to homebuilding revenues of $2.31 billion in the first quarter of 2022.  Gross profit margin in the first quarter of 2023 decreased to 24.6%, compared to 28.5% in the first quarter of 2022.  Income before tax from the homebuilding segment totaled $405.8 million in the first quarter of 2023, a decrease of 22% when compared to the first quarter of 2022.

Mortgage Banking

Mortgage closed loan production in the first quarter of 2023 totaled $1.24 billion, a decrease of 17% when compared to the first quarter of 2022.  Income before tax from the mortgage banking segment totaled $28.1 million in the first quarter of 2023, a decrease of 43% when compared to $49.1 million in the first quarter of 2022.  The decrease was primarily attributable to a decrease in secondary marketing gains on loan sales.

Effective Tax Rate

Our effective tax rate for the three months ended March 31, 2023 was 20.6% compared to 24.7% for the three months ended March 31, 2022.  The decrease in the effective tax rate in the first quarter of 2023 is primarily attributable to a higher income tax benefit recognized for excess tax benefits from stock option exercises, which totaled $23.2 million and $8.4 million for the three months ended March 31, 2023 and March 31, 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, 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 March 31,



2023


2022






Homebuilding:





Revenues


$          2,131,333


$          2,309,227

Other income


32,946


1,339

Cost of sales


(1,607,910)


(1,651,365)

Selling, general and administrative


(143,618)


(129,510)

Operating income


412,751


529,691

Interest expense


(7,001)


(12,804)

Homebuilding income


405,750


516,887






Mortgage Banking:





Mortgage banking fees


46,944


69,182

Interest income


3,018


2,074

Other income


989


1,072

General and administrative


(22,634)


(22,908)

Interest expense


(257)


(362)

Mortgage banking income


28,060


49,058






Income before taxes


433,810


565,945

Income tax expense


(89,458)


(139,845)






Net income


$              344,352


$              426,100






Basic earnings per share


$                106.31


$                125.87






Diluted earnings per share


$                  99.89


$                116.56






Basic weighted average shares outstanding


3,239


3,385






Diluted weighted average shares outstanding


3,447


3,656

NVR, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share data)

(unaudited)








March 31, 2023


December 31, 2022

ASSETS





Homebuilding:





Cash and cash equivalents


$              2,786,503


$              2,503,424

Restricted cash


47,995


48,455

Receivables


23,307


20,842

Inventory:





Lots and housing units, covered under sales agreements with customers


1,630,861


1,554,955

Unsold lots and housing units


181,900


181,952

Land under development


28,814


27,100

Building materials and other


23,967


24,268



1,865,542


1,788,275






Contract land deposits, net


501,667


496,080

Property, plant and equipment, net


56,533


57,950

Operating lease right-of-use assets


71,593


71,081

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


41,580


41,580

Other assets


237,032


219,483



5,631,752


5,247,170

Mortgage Banking:





Cash and cash equivalents


14,259


19,415

Restricted cash


9,836


2,974

Mortgage loans held for sale, net


319,248


316,806

Property and equipment, net


3,347


3,559

Operating lease right-of-use assets


21,714


16,011

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


7,347


7,347

Other assets


68,402


47,691



444,153


413,803

Total assets


$              6,075,905


$              5,660,973

NVR, Inc.

Consolidated Balance Sheets (Continued)

(in thousands, except share and per share data)

(unaudited)








March 31, 2023


December 31, 2022

LIABILITIES AND SHAREHOLDERS’ EQUITY





Homebuilding:





Accounts payable


$                  353,141


$                  334,016

Accrued expenses and other liabilities


459,335


437,234

Customer deposits


335,230


313,804

Operating lease liabilities


76,547


75,818

Senior notes


914,427


914,888



2,138,680


2,075,760

Mortgage Banking:





Accounts payable and other liabilities


68,969


61,396

Operating lease liabilities


22,910


16,968



91,879


78,364

Total liabilities


2,230,559


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 March 31, 2023 and December 31, 2022


206


206

Additional paid-in capital


2,676,641


2,600,014

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


(16,710)


(16,710)

Deferred compensation liability


16,710


16,710

Retained earnings


12,117,766


11,773,414

Less treasury stock at cost – 17,313,580 and 17,336,397 shares as of March 31, 2023 and December 31, 2022, respectively


(10,949,267)


(10,866,785)

Total shareholders’ equity


3,845,346


3,506,849

Total liabilities and shareholders’ equity


$              6,075,905


$              5,660,973

NVR, Inc.

Operating Activity

(dollars in thousands)

(unaudited)












Three Months Ended March 31,



2023


2022



Units


Average
Price


Units


Average
Price

New orders, net of cancellations:








Mid Atlantic (1)


2,235


$         516.3


2,307


$         529.1

North East (2)


442


$         573.1


460


$         522.9

Mid East (3)


1,317


$         384.2


1,534


$         398.6

South East (4)


1,894


$         361.5


1,626


$         422.8

Total


5,888


$         441.2


5,927


$         465.7





















Three Months Ended March 31,



2023


2022



Units


Average
Price


Units


Average
Price

Settlements:









Mid Atlantic (1)


1,795


$         524.3


2,180


$         523.7

North East (2)


363


$         505.3


348


$         504.5

Mid East (3)


989


$         406.8


1,210


$         381.3

South East (4)


1,492


$         405.1


1,476


$         359.5

Total


4,639


$         459.4


5,214


$         442.9





















As of March 31,



2023


2022



Units


Average
Price


Units


Average
Price

Backlog:









Mid Atlantic (1)


4,132


$         530.6


5,045


$         537.0

North East (2)


964


$         580.8


1,081


$         518.6

Mid East (3)


2,181


$         390.1


3,351


$         389.2

South East (4)


3,134


$         379.3


3,966


$         418.3

Total


10,411


$         460.3


13,443


$         463.7

NVR, Inc.

Operating Activity (Continued)

(dollars in thousands)

(unaudited)








Three Months Ended March 31,



2023


2022

Average active communities:





Mid Atlantic (1)


162


151

North East (2)


37


34

Mid East (3)


113


129

South East (4)


101


90

Total


413


404













Three Months Ended March 31,



2023


2022

Homebuilding data:





New order cancellation rate


14 %


10 %

Lots controlled at end of period


129,900


126,800






Mortgage banking data:





Loan closings


$         1,237,283


$         1,484,593

Capture rate


83 %


86 %






Common stock information:





Shares outstanding at end of period


3,241,750


3,314,835

Number of shares repurchased


21,174


146,054

Aggregate cost of shares repurchased


$            110,048


$            748,789



(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

SOURCE NVR, Inc.

Originally published at https://www.prnewswire.com/news-releases/nvr-inc-announces-first-quarter-results-301806096.html

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