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.

SOURCE NVR, Inc.