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NVR, INC. ANNOUNCES FOURTH QUARTER AND FULL YEAR RESULTS

RESTON, Va., Jan. 30, 2024 /PRNewswire/ -- NVR, Inc. (NYSE: NVR), one of the nation's largest homebuilding and mortgage banking companies, announced net income for its fourth quarter ended December 31, 2023 of $410.1 million, or $121.56 per diluted share. Net income and diluted earnings per share for the fourth quarter ended December 31, 2023 decreased 10% and 9%, respectively, when compared to 2022 fourth quarter net income of $454.8 million, or $133.44 per diluted share. Consolidated revenues for the fourth quarter of 2023 totaled $2.43 billion, which decreased 10% from $2.71 billion in the fourth quarter of 2022. 

For the year ended December 31, 2023, consolidated revenues were $9.52 billion, a 10% decrease from $10.53 billion reported in 2022. Net income for the year ended December 31, 2023 was $1.59 billion, a decrease of 8% when compared to net income for the year ended December 31, 2022 of $1.73 billion. Diluted earnings per share for the year ended December 31, 2023 was $463.31, a decrease of 6% from $491.82 per diluted share for 2022.

Homebuilding

New orders in the fourth quarter of 2023 increased by 25% to 5,190 units, when compared to 4,153 units in the fourth quarter of 2022. The average sales price of new orders in the fourth quarter of 2023 was $450,900, a decrease of 2% when compared with the fourth quarter of 2022. The cancellation rate in the fourth quarter of 2023 was 13% compared to 18% in the fourth quarter of 2022. Settlements in the fourth quarter of 2023 decreased by 7% to 5,332 units, compared to 5,749 units in the fourth quarter of 2022. The average settlement price in the fourth quarter of 2023 was $447,600, a decrease of 4% when compared with the fourth quarter of 2022. Our backlog of homes sold but not settled as of December 31, 2023 increased on a unit basis by 12% to 10,229 units and increased on a dollar basis by 10% to $4.76 billion when compared to the respective backlog unit and dollar balances as of December 31, 2022.

Homebuilding revenues of $2.39 billion in the fourth quarter of 2023 decreased by 11% compared to homebuilding revenues of $2.67 billion in the fourth quarter of 2022.  Gross profit margin in the fourth quarter of 2023 decreased to 24.1%, compared to 25.3% in the fourth quarter of 2022. Income before tax from the homebuilding segment totaled $454.3 million in the fourth quarter of 2023, a decrease of 17% when compared to the fourth quarter of 2022.

New orders for the year ended December 31, 2023 increased by 13% to 21,729 units, compared to 19,164 units in 2022.  Settlements for the year ended December 31, 2023 decreased by 9% to 20,662 units, compared to 22,732 units settled in 2022. Homebuilding revenues for the year ended December 31, 2023 totaled $9.31 billion, a 10% decrease from 2022. Gross profit margin for the year ended December 31, 2023 decreased to 24.3%, compared to 25.8% in 2022. Income before tax for the homebuilding segment decreased 16% for the year ended December 31, 2023 to $1.80 billion, compared to $2.13 billion in 2022.

Mortgage Banking

Mortgage closed loan production in the fourth quarter of 2023 totaled $1.50 billion, a decrease of 2% when compared to the fourth quarter of 2022.  Income before tax from the mortgage banking segment totaled $29.7 million in the fourth quarter of 2023, an increase of 12% when compared to $26.4 million in the fourth quarter of 2022. 

Mortgage closed loan production for the year ended December 31, 2023 decreased 9% to $5.74 billion. Income before tax from the mortgage banking segment for the year ended December 31, 2023 increased 9% to $132.8 million from $122.2 million in 2022.

Effective Tax Rate

Our effective tax rate for the three and twelve months ended December 31, 2023 was 15.3% and 17.5%, respectively, compared to 20.9% and 23.4% for the three and twelve months ended December 31, 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 $42.5 million and $153.6 million for the three and twelve months ended December 31, 2023, respectively, and $22.6 million and $50.3 million for the three and twelve months ended December 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-six 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)




Three Months Ended December 31,


Twelve Months Ended December 31,



2023


2022


2023


2022



(unaudited)


(unaudited)


(unaudited)



Homebuilding:









Revenues


$          2,387,094


$          2,668,036


$          9,314,605


$        10,326,770

Other income


40,891


21,592


148,010


37,038

Cost of sales


(1,812,968)


(1,993,722)


(7,051,198)


(7,662,271)

Selling, general and administrative


(154,086)


(140,995)


(588,962)


(532,353)

Operating income


460,931


554,911


1,822,455


2,169,184

Interest expense


(6,618)


(6,630)


(26,875)


(38,140)

Homebuilding income


454,313


548,281


1,795,580


2,131,044










Mortgage Banking:









Mortgage banking fees


45,476


44,146


203,597


199,664

Interest income


4,779


3,570


16,687


11,853

Other income


1,189


1,294


4,449


4,963

General and administrative


(21,537)


(22,300)


(91,075)


(92,946)

Interest expense


(173)


(269)


(865)


(1,384)

Mortgage banking income


29,734


26,441


132,793


122,150










Income before taxes


484,047


574,722


1,928,373


2,253,194

Income tax expense


(73,972)


(119,954)


(336,762)


(527,619)










Net income


$              410,075


$              454,768


$          1,591,611


$          1,725,575










Basic earnings per share


$                128.46


$                141.82


$                491.52


$                525.20










Diluted earnings per share


$                121.56


$                133.44


$                463.31


$                491.82










Basic weighted average shares outstanding


3,192


3,207


3,238


3,286










Diluted weighted average shares outstanding


3,373


3,408


3,435


3,509

 

NVR, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share data)









December 31, 2023


December 31, 2022



(unaudited)



ASSETS





Homebuilding:





Cash and cash equivalents


$              3,126,472


$              2,503,424

Restricted cash


41,483


48,455

Receivables


29,000


20,842

Inventory:





Lots and housing units, covered under sales agreements with customers


1,674,686


1,554,955

Unsold lots and housing units


214,666


181,952

Land under development


36,895


27,100

Building materials and other


23,903


24,268



1,950,150


1,788,275






Contract land deposits, net


576,551


496,080

Property, plant and equipment, net


63,716


57,950

Operating lease right-of-use assets


70,384


71,081

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


41,580


41,580

Deferred tax assets, net


148,005


143,585

Other assets


94,746


75,898



6,142,087


5,247,170

Mortgage Banking:





Cash and cash equivalents


36,422


19,415

Restricted cash


11,067


2,974

Mortgage loans held for sale, net


222,560


316,806

Property and equipment, net


6,348


3,559

Operating lease right-of-use assets


23,541


16,011

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


7,347


7,347

Other assets


152,385


47,691



459,670


413,803

Total assets


$              6,601,757


$              5,660,973






 

NVR, Inc.

Consolidated Balance Sheets (Continued)

(in thousands, except share and per share data)









December 31, 2023


December 31, 2022



(unaudited)



LIABILITIES AND SHAREHOLDERS' EQUITY





Homebuilding:





Accounts payable


$                  347,738


$                  334,016

Accrued expenses and other liabilities


413,043


437,234

Customer deposits


334,441


313,804

Operating lease liabilities


75,797


75,818

Senior notes


913,027


914,888



2,084,046


2,075,760

Mortgage Banking:





Accounts payable and other liabilities


127,511


61,396

Operating lease liabilities


25,475


16,968



152,986


78,364

Total liabilities


2,237,032


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 December 31, 2023 and December 31, 2022


206


206

Additional paid-in capital


2,848,528


2,600,014

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


(16,710)


(16,710)

Deferred compensation liability


16,710


16,710

Retained earnings


13,365,025


11,773,414

Less treasury stock at cost – 17,360,454 and 17,336,397 shares as of December
31, 2023 and December 31, 2022, respectively


(11,849,034)


(10,866,785)

Total shareholders' equity


4,364,725


3,506,849

Total liabilities and shareholders' equity


$              6,601,757


$              5,660,973






 

NVR, Inc.

Operating Activity

(dollars in thousands)

(unaudited)




















Three Months Ended December 31,


Twelve Months Ended December 31,



2023


2022


2023


2022



Units


Average
Price


Units


Average
Price


Units


Average
Price


Units


Average
Price

New orders, net of cancellations:















Mid Atlantic (1)


2,029


$         500.9


1,836


$         525.0


8,434


$         515.5


7,816


$         526.6

North East (2)


526


$         597.7


430


$         573.6


1,879


$         573.2


1,679


$         528.3

Mid East (3)


942


$         412.2


741


$         381.8


4,514


$         396.5


4,344


$         400.5

South East (4)


1,693


$         366.9


1,146


$         360.3


6,902


$         366.4


5,325


$         399.4

Total


5,190


$         450.9


4,153


$         459.0


21,729


$         448.4


19,164


$         462.8





































Three Months Ended December 31,


Twelve Months Ended December 31,



2023


2022


2023


2022



Units


Average
Price


Units


Average
Price


Units


Average
Price


Units


Average
Price

Settlements:

















Mid Atlantic (1)


2,008


$         519.5


2,153


$         526.6


8,032


$         521.5


9,042


$         527.1

North East (2)


465


$         567.1


456


$         503.4


1,736


$         546.2


1,763


$         506.3

Mid East (3)


1,126


$         391.3


1,484


$         400.5


4,391


$         392.4


5,518


$         389.1

South East (4)


1,733


$         368.9


1,656


$         428.7


6,503


$         377.2


6,409


$         393.3

Total


5,332


$         447.6


5,749


$         464.0


20,662


$         450.7


22,732


$         454.3


















 



As of December 31,




2023


2022




Units


Average
Price


Units


Average
Price


Backlog:










Mid Atlantic (1)


4,094


$         522.5


3,692


$         536.3


North East (2)


1,028


$         602.0


885


$         553.9


Mid East (3)


1,976


$         412.1


1,853


$         403.2


South East (4)


3,131


$         378.4


2,732


$         405.7


Total


10,229


$         465.0


9,162


$         472.2












 

NVR, Inc.

Operating Activity (Continued)

(dollars in thousands)

(unaudited)












Three Months Ended December 31,


Twelve Months Ended December 31,



2023


2022


2023


2022

Average active communities:









Mid Atlantic (1)


167


169


166


160

North East (2)


36


37


36


36

Mid East (3)


105


127


110


126

South East (4)


130


95


115


93

Total


438


428


427


415





















Three Months Ended December 31,


Twelve Months Ended December 31,



2023


2022


2023


2022

Homebuilding data:









New order cancellation rate


13.0 %


18.4 %


12.8 %


14.2 %

Lots controlled at end of period






141,500


131,900










Mortgage banking data:









Loan closings


$         1,496,003


$         1,524,665


$       5,736,532


$       6,313,416

Capture rate


88 %


80 %


87 %


83 %










Common stock information:









Shares outstanding at end of period






3,194,876


3,218,933

Number of shares repurchased


46,748


28,504


181,499


323,652

Aggregate cost of shares repurchased


$            286,428


$            116,165


$       1,081,815


$       1,500,358



(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 View original content:https://www.prnewswire.com/news-releases/nvr-inc-announces-fourth-quarter-and-full-year-results-302047242.html

SOURCE NVR, INC.

Investor Relations Contact: Curt McKay, (703) 956-4058, ir@nvrinc.com