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NVR, INC. ANNOUNCES FOURTH QUARTER RESULTS

RESTON, Va., Jan. 31, 2023 /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, 2022 of $454.8 million, or $133.44 per diluted share.  Net income and diluted earnings per share for the fourth quarter ended December 31, 2022 increased 36% and 50%, respectively, when compared to 2021 fourth quarter net income of $334.6 million, or $89.09 per diluted share.  Consolidated revenues for the fourth quarter of 2022 totaled $2.71 billion, which increased 22% from $2.23 billion in the fourth quarter of 2021. 

For the year ended December 31, 2022, consolidated revenues were $10.53 billion, an 18% increase from $8.95 billion reported in 2021. Net income for the year ended December 31, 2022 was $1.73 billion, an increase of 40% when compared to net income for the year ended December 31, 2021 of $1.24 billion. Diluted earnings per share for the year ended December 31, 2022 was $491.82, an increase of 53% from $320.48 per diluted share for 2021.

Homebuilding

New orders in the fourth quarter of 2022 decreased by 27% to 4,153 units, when compared to 5,685 units in the fourth quarter of 2021. The average sales price of new orders in the fourth quarter of 2022 was $459,000, an increase of 1% when compared with the fourth quarter of 2021.  The cancellation rate in the fourth quarter of 2022 was 18% compared to 10% in the fourth quarter of 2021.  Settlements in the fourth quarter of 2022 increased by 13% to 5,749 units, compared to 5,100 units in the fourth quarter of 2021. The average settlement price in the fourth quarter of 2022 was $464,000, an increase of 9% from the fourth quarter of 2021. Our backlog of homes sold but not settled as of December 31, 2022 decreased on a unit basis by 28% to 9,162 units and decreased on a dollar basis by 25% to $4.33 billion when compared to the respective backlog unit and dollar balances as of December 31, 2021.

Homebuilding revenues of $2.67 billion in the fourth quarter of 2022 increased by 23% compared to homebuilding revenues of $2.18 billion in the fourth quarter of 2021.  Gross profit margin in the fourth quarter of 2022 increased to 25.3%, compared to 24.4% in the fourth quarter of 2021.  In the fourth quarter of 2022, gross profit was impacted by contract land deposit impairments of approximately $25.0 million, or 94 basis points as a percentage of revenue.  Income before tax from the homebuilding segment totaled $548.3 million in the fourth quarter of 2022, an increase of 40% when compared to the fourth quarter of 2021.

New orders for the year ended December 31, 2022 decreased by 16% to 19,164 units, compared to 22,721 units in 2021.  Settlements for the year ended December 31, 2022 increased by 6% to 22,732 units, compared to 21,540 units settled in 2021. Homebuilding revenues for the year ended December 31, 2022 totaled $10.33 billion, a 19% increase from 2021. Gross profit margin for the year ended December 31, 2022 increased to 25.8%, compared to 22.3% in 2021.  Income before tax for the homebuilding segment increased 50% for the year ended December 31, 2022 to $2.13 billion, compared to $1.42 billion in 2021.

Mortgage Banking

Mortgage closed loan production in the fourth quarter of 2022 totaled $1.52 billion, an increase of 3% when compared to the fourth quarter of 2021.  Income before tax from the mortgage banking segment totaled $26.4 million in the fourth quarter of 2022, a decrease of 24% when compared to $34.8 million in the fourth quarter of 2021.  This decrease was primarily attributable to a decrease in secondary marketing gains.

Mortgage closed loan production for the year ended December 31, 2022 increased 4% to $6.31 billion. Income before tax from the mortgage banking segment for the year ended December 31, 2022 decreased 29% to $122.2 million from $171.6 million in 2021.

Effective Tax Rate

Our effective tax rate for the three and twelve months ended December 31, 2022 was 20.9% and 23.4%, respectively, compared to 21.6% and 22.2% for the three and twelve months ended December 31, 2021, respectively.  The effective tax rates in each period were favorably impacted by the recognition of an income tax benefit related to excess tax benefits from stock option exercises totaling $22.6 million and $50.3 million for the three and twelve months ended December 31, 2022, respectively, and $10.5 million and $48.4 million for the three and twelve months ended December 31, 2021, 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: 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)

 




Three Months Ended December 31,


Twelve Months Ended December 31,



2022


2021


2022


2021



(unaudited)


(unaudited)


(unaudited)



Homebuilding:









Revenues


$          2,668,036


$          2,176,807


$        10,326,770


$          8,701,693

Other income


21,592


1,845


37,038


6,559

Cost of sales


(1,993,722)


(1,646,050)


(7,662,271)


(6,763,115)

Selling, general and administrative


(140,995)


(127,757)


(532,353)


(474,808)

Operating income


554,911


404,845


2,169,184


1,470,329

Interest expense


(6,630)


(12,836)


(38,140)


(51,530)

Homebuilding income


548,281


392,009


2,131,044


1,418,799










Mortgage Banking:









Mortgage banking fees


44,146


53,534


199,664


249,332

Interest income


3,570


2,148


11,853


8,725

Other income


1,294


876


4,963


3,753

General and administrative


(22,300)


(21,391)


(92,946)


(88,619)

Interest expense


(269)


(371)


(1,384)


(1,587)

Mortgage banking income


26,441


34,796


122,150


171,604










Income before taxes


574,722


426,805


2,253,194


1,590,403

Income tax expense


(119,954)


(92,224)


(527,619)


(353,684)










Net income


$              454,768


$              334,581


$          1,725,575


$          1,236,719










Basic earnings per share


$                141.82


$                  96.47


$                525.20


$                345.37










Diluted earnings per share


$                133.44


$                  89.09


$                491.82


$                320.48










Basic weighted average shares outstanding


3,207


3,468


3,286


3,581










Diluted weighted average shares outstanding


3,408


3,755


3,509


3,859

 

NVR, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share data)









December 31, 2022


December 31, 2021



(unaudited)



ASSETS





Homebuilding:





Cash and cash equivalents


$              2,503,424


$              2,545,069

Restricted cash


48,455


60,730

Receivables


20,842


18,552

Inventory:





Lots and housing units, covered under sales agreements with customers


1,554,955


1,777,862

Unsold lots and housing units


181,952


127,434

Land under development


27,100


12,147

Building materials and other


24,268


29,923



1,788,275


1,947,366






Contract land deposits, net


496,080


497,139

Property, plant and equipment, net


57,950


56,979

Operating lease right-of-use assets


71,081


59,010

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


41,580


41,580

Deferred tax assets, net


143,585


132,894

Other assets


75,898


96,124



5,247,170


5,455,443

Mortgage Banking:





Cash and cash equivalents


19,415


28,398

Restricted cash


2,974


2,519

Mortgage loans held for sale, net


316,806


302,192

Property and equipment, net


3,559


3,658

Operating lease right-of-use assets


16,011


9,758

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


7,347


7,347

Other assets


47,691


25,160



413,803


379,032

Total assets


$              5,660,973


$              5,834,475

 

NVR, Inc.

Consolidated Balance Sheets (Continued)

(in thousands, except share and per share data)









December 31, 2022


December 31, 2021



(unaudited)



LIABILITIES AND SHAREHOLDERS' EQUITY





Homebuilding:





Accounts payable


$                  334,016


$                  336,560

Accrued expenses and other liabilities


437,234


435,860

Customer deposits


313,804


417,463

Operating lease liabilities


75,818


64,128

Senior notes


914,888


1,516,255



2,075,760


2,770,266

Mortgage Banking:





Accounts payable and other liabilities


61,396


51,394

Operating lease liabilities


16,968


10,437



78,364


61,831

Total liabilities


2,154,124


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 December 31, 2022 and December 31, 2021


206


206

Additional paid-in capital


2,600,014


2,378,191

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


(16,710)


(16,710)

Deferred compensation liability


16,710


16,710

Retained earnings


11,773,414


10,047,839

Less treasury stock at cost – 17,336,397 and 17,107,889 shares as of December
31, 2022 and December 31, 2021, respectively


(10,866,785)


(9,423,858)

Total shareholders' equity


3,506,849


3,002,378

Total liabilities and shareholders' equity


$              5,660,973


$              5,834,475

 

NVR, Inc.

Operating Activity

(dollars in thousands)

(unaudited)




















Three Months Ended December 31,


Twelve Months Ended December 31,



2022


2021


2022


2021



Units


Average
Price


Units


Average
Price


Units


Average
Price


Units


Average
Price

New orders, net of cancellations:















Mid Atlantic (1)


1,836


$         525.0


2,344


$         529.3


7,816


$         526.6


8,749


$         522.4

North East (2)


430


$         573.6


448


$         518.6


1,679


$         528.3


1,685


$         497.4

Mid East (3)


741


$         381.8


1,262


$         382.3


4,344


$         400.5


5,567


$         369.3

South East (4)


1,146


$         360.3


1,631


$         386.6


5,325


$         399.4


6,720


$         363.6

Total


4,153


$         459.0


5,685


$         454.9


19,164


$         462.8


22,721


$         436.1





































Three Months Ended December 31,


Twelve Months Ended December 31,



2022


2021


2022


2021



Units


Average
Price


Units


Average
Price


Units


Average
Price


Units


Average
Price

Settlements:

















Mid Atlantic (1)


2,153


$         526.6


1,899


$         517.4


9,042


$         527.1


8,310


$         487.3

North East (2)


456


$         503.4


406


$         490.9


1,763


$         506.3


1,666


$         460.9

Mid East (3)


1,484


$         400.5


1,317


$         368.5


5,518


$         389.1


5,414


$         349.4

South East (4)


1,656


$         428.7


1,478


$         344.7


6,409


$         393.3


6,150


$         323.9

Total


5,749


$         464.0


5,100


$         426.8


22,732


$         454.3


21,540


$         403.9

 



As of December 31,




2022


2021




Units


Average
Price


Units


Average
Price


Backlog:










Mid Atlantic (1)


3,692


$         536.3


4,918


$         534.8


North East (2)


885


$         553.9


969


$         511.5


Mid East (3)


1,853


$         403.2


3,027


$         381.3


South East (4)


2,732


$         405.7


3,816


$         393.7


Total


9,162


$         472.2


12,730


$         454.2


 

NVR, Inc.

Operating Activity (Continued)

(dollars in thousands)

(unaudited)












Three Months Ended December 31,


Twelve Months Ended December 31,



2022


2021


2022


2021

Average active communities:









Mid Atlantic (1)


169


158


160


155

North East (2)


37


37


36


34

Mid East (3)


127


124


126


129

South East (4)


95


99


93


106

Total


428


418


415


424





















Three Months Ended December 31,


Twelve Months Ended December 31,



2022


2021


2022


2021

Homebuilding data:









New order cancellation rate


18.4 %


9.7 %


14.2 %


9.2 %

Lots controlled at end of period






131,900


124,900










Mortgage banking data:









Loan closings


$         1,524,665


$         1,480,080


$       6,313,416


$       6,073,934

Capture rate


80 %


89 %


83 %


89 %










Common stock information:









Shares outstanding at end of period






3,218,933


3,447,441

Number of shares repurchased


28,504


77,443


323,652


322,038

Aggregate cost of shares repurchased


$            116,165


$            385,164


$       1,500,358


$       1,538,019

 

(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-results-301734145.html

SOURCE NVR, Inc.

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