NVR, Inc. Announces Third Quarter Results

RESTON, Va., Oct. 21, 2021 /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, 2021 of $332.1 million, or $86.44 per diluted share.  Net income and diluted earnings per share for the third quarter ended September 30, 2021 increased 29% and 33%, respectively, when compared to 2020 third quarter net income of $256.5 million, or $65.11 per diluted share.  Consolidated revenues for the third quarter of 2021 totaled $2.40 billion, an increase of 20% from $1.99 billion in the third quarter of 2020. 

For the nine months ended September 30, 2021, consolidated revenues were $6.72 billion, a 29% increase from $5.19 billion reported in 2020.  Net income for the nine months ended September 30, 2021 was $902.1 million, an increase of 51% when compared to the nine months ended September 30, 2020.  Diluted earnings per share for the nine months ended September 30, 2021 was $231.75, an increase of 51% from $153.03 per diluted share for 2020.

Homebuilding

New orders in the third quarter of 2021 decreased by 22% to 5,201 units, when compared to 6,681 units in the third quarter of 2020.  The average sales price of new orders in the third quarter of 2021 was $442,000, an increase of 15% when compared with the third quarter of 2020.  The cancellation rate in the third quarter of 2021 was 9% compared to 12% in the third quarter of 2020.  Settlements in the third quarter of 2021 increased by 10% to 5,683 units, compared to 5,180 units in the third quarter of 2020.  Our backlog of homes sold but not settled as of September 30, 2021 was flat on a unit basis at 12,145 units and increased on a dollar basis by 15% to $5.37 billion when compared to the respective backlog unit and dollar balances as of September 30, 2020.

Homebuilding revenues of $2.34 billion in the third quarter of 2021 increased by 22% compared to homebuilding revenues of $1.92 billion in the third quarter of 2020.  Gross profit margin in the third quarter of 2021 increased to 22.2%, compared to 20.0% in the third quarter of 2020.  Income before tax from the homebuilding segment totaled $395.1 million in the third quarter of 2021, an increase of 47% when compared to the third quarter of 2020.

Mortgage Banking

Mortgage closed loan production in the third quarter of 2021 totaled $1.62 billion, an increase of 17% when compared to the third quarter of 2020.  Income before tax from the mortgage banking segment totaled $39.0 million in the third quarter of 2021, a decrease of 25% when compared to $51.8 million in the third quarter of 2020.  This decrease was primarily attributable to a decrease in secondary marketing gains.

Effective Tax Rate

Our effective tax rate for the three and nine months ended September 30, 2021 was 23.5% and 22.5%, respectively, compared to 20.2% and 13.9% for the three and nine months ended September 30, 2020, 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 $9.2 million and $37.8 million for the three and nine months ended September 30, 2021, respectively, and $17.8 million and $80.3 million for the three and nine months ended September 30, 2020, respectively.

Other Matters - COVID-19

The COVID-19 pandemic has had a significant impact on all facets of our business.  Our primary focus as we face this challenge is to do everything we can to ensure the safety and well-being of our employees, customers and trade partners.  In each of our markets, we continue to operate in accordance with the guidelines issued by the Centers for Disease Control and Prevention as well as state and local health department guidelines, which has resulted in significant changes to the way we conduct business. 

Although current demand for new homes is strong, there remains uncertainty regarding the extent and timing of disruption to our business that may result from COVID-19 and related governmental actions.  There is also uncertainty as to the effects of economic relief efforts on the U.S. economy, unemployment, consumer confidence, demand for our homes and the mortgage market, including lending standards and secondary mortgage markets. We are unable to predict the extent to which this will impact our operational and financial performance including the impact of future developments such as the duration and spread of COVID-19, corresponding governmental actions, and the impact of such on our employees, customers and trade partners.

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-three 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: the impact of COVID-19 on the economy; 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.