NVR, Inc. Announces Third Quarter Results

RESTON, Va., Oct. 18, 2019 /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, 2019 of $223,787,000, or $56.11 per diluted share. Net income and diluted earnings per share for the third quarter ended September 30, 2019 increased 14% and 16%, respectively, when compared to 2018 third quarter net income of $195,816,000, or $48.28 per diluted share. Consolidated revenues for the third quarter of 2019 totaled $1,911,264,000, a 3% increase from $1,852,407,000 in the third quarter of 2018.

For the nine months ended September 30, 2019, consolidated revenues were $5,398,469,000, a 4% increase from $5,169,126,000 reported for 2018. Net income for the nine months ended September 30, 2019 was $622,402,000, an increase of 10% when compared to the nine months ended September 30, 2018. Diluted earnings per share for the nine months ended September 30, 2019 was $156.61, an increase of 15% from $136.53 per diluted share for 2018.

The Company's effective tax rate for the three and nine months ended September 30, 2019 decreased to 16.2% and 14.8%, respectively, compared to 21.6% and 17.2% for the three and nine months ended September 30, 2018, respectively. The effective tax rate was favorably impacted by an increase in the income tax benefit recognized related to excess tax benefits from stock option exercises totaling $27,604,000 and $86,809,000 for three and nine months ended September 30, 2019, respectively, compared to $12,585,000 and $58,607,000, for the three and nine months ended September 30, 2018, respectively.

Homebuilding
New orders in the third quarter of 2019 increased by 11% to 4,766 units, when compared to 4,302 units in the third quarter of 2018. The average sales price of new orders in the third quarter of 2019 was $369,200, a decrease of 1% when compared with the third quarter of 2018. Settlements increased in the third quarter of 2019 to 5,124 units, which was 8% higher than the third quarter of 2018. The Company's backlog of homes sold but not settled as of September 30, 2019 decreased on a unit basis by 6% to 9,172 units and decreased on a dollar basis by 7% to $3,402,933,000 when compared to September 30, 2018.

Homebuilding revenues of $1,873,331,000 in the third quarter of 2019 increased 4% compared to the third quarter of 2018. Gross profit margin in the third quarter of 2019 increased to 19.0%, compared to 18.6% in the third quarter of 2018. Income before tax from the homebuilding segment totaled $245,774,000 in the third quarter of 2019, an increase of 10% when compared to the third quarter of 2018.

Mortgage Banking
Mortgage closed loan production in the third quarter of 2019 totaled $1,373,946,000, an increase of 10% when compared to the third quarter of 2018. Income before tax from the mortgage banking segment totaled $21,400,000 in the third quarter of 2019, a decrease of 16% when compared to $25,514,000 in the third quarter of 2018. The decrease in income before tax is primarily due to a 12% decrease in mortgage banking fees, resulting from the timing of loan sales and a decrease in the fair value measurement adjustment.

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-two 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.