NVR, INC. ANNOUNCES SECOND QUARTER RESULTS

RESTON, Va., July 25, 2023 /PRNewswire/ -- NVR, Inc. (NYSE: NVR), one of the nation's largest homebuilding and mortgage banking companies, announced net income for its second quarter ended June 30, 2023 of $404.0 million, or $116.54 per diluted share. Net income and diluted earnings per share for the second quarter ended June 30, 2023 decreased 7% and 6%, respectively, when compared to 2022 second quarter net income of $433.3 million, or $123.65 per diluted share. Consolidated revenues for the second quarter of 2023 totaled $2.34 billion, which decreased 12% from $2.66 billion in the second quarter of 2022.

For the six months ended June 30, 2023, consolidated revenues were $4.52 billion, a 10% decrease from $5.04 billion reported in 2022. Net income for the six months ended June 30, 2023 was $748.4 million, a decrease of 13% when compared to net income for the six months ended June 30, 2022 of $859.4 million. Diluted earnings per share for the six months ended June 30, 2023 was $216.52, a decrease of 10% from $240.05 per diluted share for 2022.

Homebuilding

New orders in the second quarter of 2023 increased by 27% to 5,905 units, when compared to 4,663 units in the second quarter of 2022. The average sales price of new orders in the second quarter of 2023 was $447,300, a decrease of 5% when compared with the second quarter of 2022. The cancellation rate in the second quarter of 2023 was 11% compared to 14% in the second quarter of 2022. Settlements in the second quarter of 2023 decreased by 13% to 5,085 units, compared to 5,820 units in the second quarter of 2022. The average settlement price in the second quarter of 2023 was $449,000, which was flat compared with the second quarter of 2022. Our backlog of homes sold but not settled as of June 30, 2023 decreased on a unit basis by 9% to 11,231 units and decreased on a dollar basis by 12% to $5.15 billion when compared to the respective backlog unit and dollar balances as of June 30, 2022.

Homebuilding revenues of $2.28 billion in the second quarter of 2023 decreased by 13% compared to homebuilding revenues of $2.61 billion in the second quarter of 2022. Gross profit margin in the second quarter of 2023 decreased to 24.3%, compared to 26.3% in the second quarter of 2022. Income before tax from the homebuilding segment totaled $434.7 million in the second quarter of 2023, a decrease of 20% when compared to the second quarter of 2022.

Mortgage Banking

Mortgage closed loan production in the second quarter of 2023 totaled $1.38 billion, a decrease of 16% when compared to the second quarter of 2022. Income before tax from the mortgage banking segment totaled $36.5 million in the second quarter of 2023, an increase of 25% when compared to $29.1 million in the second quarter of 2022. This increase was primarily attributable to an increase in secondary marketing gains on sales of loans.

Effective Tax Rate

Our effective tax rate for the three and six months ended June 30, 2023 was 14.3% and 17.3%, respectively, compared to 24.5% and 24.6% for the three and six months ended June 30, 2022, respectively. The decrease in the effective tax rate in each period is primarily attributable to a higher income tax benefit recognized for excess tax benefits from stock option exercises, which totaled $55.9 million and $79.2 million for the three and six months ended June 30, 2023, respectively, and $8.7 million and $17.2 million for the three and six months ended June 30, 2022, 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: 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; the economic impact of a major epidemic or pandemic; 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.