NVR, Inc. Announces First Quarter Results

RESTON, Va., April 19, 2018 /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, 2018 of $166,049,000, or $39.34 per diluted share.  Net income and diluted earnings per share for the first quarter ended March 31, 2018 increased 61% and 57%, respectively, when compared to 2017 first quarter net income of $102,923,000, or $25.12 per diluted share.  Consolidated revenues for the first quarter of 2018 totaled $1,529,414,000, a 20% increase from $1,277,092,000 in the first quarter of 2017.

Net income and diluted earnings per share were favorably impacted by the reduction in the Company's effective tax rate in the first quarter of 2018 to 13.1% from 22.1% in the first quarter of 2017.  The reduction in the effective tax rate was primarily due to the following items:

• 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%, and
  
  
• The retroactive reinstatement of certain expired energy tax credits under the Bipartisan Budget Act of 2018, which resulted in the Company recognizing a tax benefit of approximately $6,200,000 related to homes settled in 2017.

Additionally, the effective tax rate in both the first quarter of 2018 and 2017 was favorably impacted by the recognition of an income tax benefit related to excess tax benefits from stock option exercises totaling $19,567,000 and $19,900,000, respectively.

Homebuilding

New orders in the first quarter of 2018 increased 17% to 5,174 units, when compared to 4,424 units in the first quarter of 2017. The average sales price of new orders in the first quarter of 2018 was $378,200, a decrease of 4% when compared with the first quarter of 2017.  The decrease in the average sales price of new orders is primarily attributable to a shift in new orders to lower priced markets and lower priced products.  Settlements increased in the first quarter of 2018 to 3,896 units, 20% higher than the first quarter of 2017.  The Company's backlog of homes sold but not settled as of March 31, 2018 increased on a unit basis by 22% to 9,809 units and increased on a dollar basis by 17% to $3,744,523,000 when compared to March 31, 2017.

Homebuilding revenues in the first quarter of 2018 totaled $1,490,093,000, 19% higher than the year earlier period.  Gross profit margin in the first quarter of 2018 increased to 18.7%, compared to 17.8% in the first quarter of 2017.  Income before tax from the homebuilding segment totaled $168,570,000 in the first quarter of 2018, an increase of 44% when compared to the first quarter of 2017.

Mortgage Banking

Mortgage closed loan production in the first quarter of 2018 totaled $1,009,673,000, an increase of 20% when compared to the first quarter of 2017.  Income before tax from the mortgage banking segment totaled $22,428,000 in the first quarter of 2018, an increase of 50% when compared to $14,971,000 in the first 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.

SOURCE NVR, Inc.