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Headquartered in Reston, Virginia, NVR, Inc. is one of America’s leading homebuilders.

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NVR, Inc. Announces Third Quarter Results

RESTON, Va., Oct. 18, 2018 /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, 2018 of $195,816,000, or $48.28 per diluted share.  Net income and diluted earnings per share for the third quarter ended September 30, 2018 increased 21% and 27%, respectively, when compared to 2017 third quarter net income of $162,102,000, or $38.02 per diluted share.  Consolidated revenues for the third quarter of 2018 totaled $1,852,407,000, an 11% increase from $1,667,920,000 in the third quarter of 2017.

For the nine months ended September 30, 2018, consolidated revenues were $5,169,126,000, a 15% increase from $4,489,504,000 reported for 2017.  Net income for the nine months ended September 30, 2018 was $565,039,000, an increase of 37% when compared to the nine months ended September 30, 2017.  Diluted earnings per share for the nine months ended September 30, 2018 was $136.53, an increase of 39% from $98.33 per diluted share for 2017.

Net income and diluted earnings per share were favorably impacted by the reduction in the Company's effective tax rate for the three and nine months ended September 30, 2018 to 21.6% and 17.2%, respectively, compared to 33.7% and 29.5% for the three and nine months ended September 30, 2017, respectively.  The reduction in the effective tax rate was primarily due to the enactment of the Tax Cuts and Jobs Act in December 2017, which lowered the Company's federal statutory tax rate from 35% to 21%.  Additionally, the effective tax rate for the three and nine months ended September 30, 2018 was favorably impacted by the recognition of an income tax benefit related to excess tax benefits from stock option exercises totaling $12,585,000 and $58,607,000, respectively.  For the three and nine months ended September 30, 2017, the income tax benefit related to excess tax benefits from stock option exercises totaled $8,357,000 and $44,720,000, respectively.

Homebuilding
New orders in the third quarter of 2018 increased 2% to 4,302 units, when compared to 4,200 units in the third quarter of 2017. The average sales price of new orders in the third quarter of 2018 was $374,000, a decrease of 2% when compared with the third quarter of 2017.  Settlements increased in the third quarter of 2018 to 4,754 units, 14% higher than the third quarter of 2017.  The Company's backlog of homes sold but not settled as of September 30, 2018 increased on a unit basis by 10% to 9,710 units and increased on a dollar basis by 7% to $3,662,037,000 when compared to September 30, 2017.

Homebuilding revenues in the third quarter of 2018 totaled $1,809,345,000, 11% higher than the year earlier period.  Gross profit margin in the third quarter of 2018 decreased to 18.6%, compared to 19.9% in the third quarter of 2017.  Income before tax from the homebuilding segment totaled $224,196,000 in the third quarter of 2018, a decrease of 1% when compared to the third quarter of 2017.  Homebuilding gross profit margin and income before tax were negatively impacted by an impairment charge of approximately $7,400,000 to one of the Company's joint venture investments in the third quarter of 2018.

Mortgage Banking
Mortgage closed loan production in the third quarter of 2018 totaled $1,249,199,000, an increase of 12% when compared to the third quarter of 2017.  Income before tax from the mortgage banking segment totaled $25,514,000 in the third quarter of 2018, an increase of 39% when compared to $18,421,000 in the third quarter of 2017.

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-one 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 September 30,


Nine Months Ended September 30,



2018


2017


2018


2017










Homebuilding:









Revenues


$

1,809,345



$

1,633,726



$

5,049,901



$

4,394,027


Other income


2,840



1,715



6,981



4,264


Cost of sales


(1,472,649)



(1,307,971)



(4,101,392)



(3,552,071)


Selling, general and administrative


(109,372)



(95,606)



(321,436)



(294,610)


Operating income


230,164



231,864



634,054



551,610


Interest expense


(5,968)



(5,821)



(18,022)



(17,040)


Homebuilding income


224,196



226,043



616,032



534,570











Mortgage Banking:









Mortgage banking fees


43,062



34,194



119,225



95,477


Interest income


3,362



1,953



8,370



5,168


Other income


659



583



1,824



1,398


General and administrative


(21,340)



(18,010)



(62,371)



(50,190)


Interest expense


(229)



(299)



(786)



(830)


Mortgage banking income


25,514



18,421



66,262



51,023











Income before taxes


249,710



244,464



682,294



585,593


Income tax expense


(53,894)



(82,362)



(117,255)



(172,691)











Net income


$

195,816



$

162,102



$

565,039



$

412,902











Basic earnings per share


$

54.21



$

43.26



$

155.22



$

110.60











Diluted earnings per share


$

48.28



$

38.02



$

136.53



$

98.33











Basic weighted average shares outstanding


3,612



3,747



3,640



3,733











Diluted weighted average shares outstanding


4,056



4,263



4,139



4,199


 

 

 

NVR, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share data)

(Unaudited)








September 30, 2018


December 31, 2017

ASSETS





Homebuilding:





Cash and cash equivalents


$

598,789



$

645,087


Restricted cash


19,194



19,438


Receivables


26,363



20,026


Inventory:





Lots and housing units, covered under sales agreements with customers


1,263,588



1,046,094


Unsold lots and housing units


102,794



148,620


Land under development


36,064



34,212


Building materials and other


18,624



17,273




1,421,070



1,246,199







Contract land deposits, net


374,350



370,429


Property, plant and equipment, net


42,399



43,191


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


41,580



41,580


Other assets


192,869



198,930




2,716,614



2,584,880


Mortgage Banking:





Cash and cash equivalents


11,081



21,707


Restricted cash


3,151



2,256


Mortgage loans held for sale, net


322,944



352,489


Property and equipment, net


6,763



6,327


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


7,347



7,347


Other assets


21,923



14,273




373,209



404,399


Total assets


$

3,089,823



$

2,989,279







LIABILITIES AND SHAREHOLDERS' EQUITY





Homebuilding:





Accounts payable


$

283,762



$

261,973


Accrued expenses and other liabilities


322,560



341,891


Customer deposits


167,676



150,033


Senior notes


597,527



597,066




1,371,525



1,350,963


Mortgage Banking:





Accounts payable and other liabilities


35,982



32,824




35,982



32,824


Total liabilities


1,407,507



1,383,787







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, 2018 and December 31, 2017


206



206


Additional paid-in capital


1,762,323



1,644,197


Deferred compensation trust – 107,336 and 108,640 shares of NVR, Inc. common stock as

of September 30, 2018 and December 31, 2017, respectively


(16,928)



(17,383)


Deferred compensation liability


16,928



17,383


Retained earnings


6,799,175



6,231,940


Less treasury stock at cost – 16,960,261 and 16,864,324 shares as of September 30, 2018

and December 31, 2017, respectively


(6,879,388)



(6,270,851)


Total shareholders' equity


1,682,316



1,605,492


Total liabilities and shareholders' equity


$

3,089,823



$

2,989,279


 

 

 

NVR, Inc.

Operating Activity

(dollars in thousands)

(Unaudited)








Three Months Ended September 30,


Nine Months Ended September 30,



2018


2017


2018


2017

Homebuilding data:









New orders (units)









Mid Atlantic (1)


2,124


2,113


7,041


6,501

North East (2)


315


346


1,051


1,066

Mid East (3)


962


939


3,400


3,218

South East (4)


901


802


2,948


2,517

Total


4,302


4,200


14,440


13,302










Average new order price


$

374.0


$

382.8


$

376.3


$

384.0










Settlements (units)









Mid Atlantic (1)


2,297


2,048


6,462


5,682

North East (2)


367


333


1,022


930

Mid East (3)


1,164


1,021


3,135


2,693

South East (4)


926


756


2,642


2,026

Total


4,754


4,158


13,261


11,331










Average settlement price


$

380.5


$

392.9


$

380.8


$

387.7










Backlog (units)









Mid Atlantic (1)






4,803


4,360

North East (2)






711


744

Mid East (3)






2,163


2,024

South East (4)






2,033


1,727

Total






9,710


8,855










Average backlog price






$

377.1


$

386.1










New order cancellation rate


16%


13%


14%


14%

Community count (average)


479


479


481


485

Lots controlled at end of period






96,400


84,000










Mortgage banking data:









Loan closings


$

1,249,199


$

1,115,494


$

3,472,976


$

3,000,448

Capture rate


88%


88%


87%


87%










Common stock information:









Shares outstanding at end of period






3,595,069


3,735,863

Number of shares repurchased


63,844


26,630


222,224


110,392

Aggregate cost of shares repurchased


$

173,831


$

70,693


$

657,369


$

230,199


















(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:http://www.prnewswire.com/news-releases/nvr-inc-announces-third-quarter-results-300733274.html

SOURCE NVR, Inc.

Curt McKay, (703) 956-4058, ir@nvrinc.com