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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 20, 2007
NVR, Inc.
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(Exact name of registrant as specified in its
charter)
Virginia 1-12378 54-1394360
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(State or other jurisdiction of (Commission File (I.R.S. Employer
incorporation or organization) Number) Identification No.)
11700 Plaza America Drive, Suite 500, Reston, Virginia 20190
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 703-956-4000
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(Former name or former address, if changed since last report)
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Check the appropriate box below if the Form 8-K is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.133-4(c))
Item 2.02 Results of Operations and Financial Condition
On July 20, 2007, NVR, Inc. issued a press release reporting its financial
results for the quarter and year to date periods ended June 30, 2007. A copy of
this press release is furnished hereto as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
Number Description
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99.1 Press release dated July 20, 2007.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NVR, Inc.
Date: July 20, 2007 By: /s/ Dennis M. Seremet
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Name: Dennis M. Seremet
Title: Vice President and
Chief Financial Officer
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INDEX TO EXHIBITS
Exhibit Number Exhibit Description
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99.1 Press release dated July 20, 2007.
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EX-99.1
NVR, INC. ANNOUNCES SECOND QUARTER RESULTS
FOR IMMEDIATE RELEASE Contact: Dan Malzahn
Office: (703) 956-4204
July 20, 2007, Reston, VA--NVR, Inc. (AMEX: NVR), one of the nation's largest
homebuilding and mortgage banking companies, announced that diluted earnings per
share for its second quarter ended June 30, 2007 decreased 50% and net income
decreased 52% when compared to the 2006 second quarter. Net income for the 2007
second quarter was $90,747,000, $14.14 per diluted share, compared to net income
of $190,352,000, $28.08 per diluted share, for the same period of 2006.
Consolidated revenues for the second quarter of 2007 totaled $1,316,668,000, a
25% decrease from $1,748,928,000 for the comparable 2006 quarter.
Homebuilding
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New orders in the second quarter of 2007 decreased 11% to 3,745 units, when
compared to 4,204 units in the second quarter of 2006. New order units and gross
profit margins continue to be negatively impacted by high levels of new and
existing home inventories, affordability issues and declining homebuyer
confidence. The cancellation rate in the quarter ended June 30, 2007 was 16%
compared to 13% in the second quarter of 2006 and 16% in the first quarter of
2007. The Washington, D.C. cancellation rate in the quarter was 21% compared to
21% in the second quarter of 2006 and 22% in the first quarter of 2007.
Settlements decreased in the second quarter of 2007 to 3,463 units, 19% less
than the same period of 2006. Homebuilding revenues for the three months ended
June 30, 2007 totaled $1,297,140,000, 25% lower than the year earlier period.
Income before tax from the homebuilding segment totaled $135,958,000 in the 2007
second quarter, a decrease of 54% when compared to the second quarter of the
previous year. Gross profit margins decreased to 18.1% in the 2007 second
quarter compared to 24.3% for the same period in 2006. The decline in gross
profit margins was due to continued pricing pressure in many of our markets and
land deposit impairments of approximately $55,000,000. These impairments lowered
gross margins by 424 basis points and reduced diluted earnings per share by
approximately $5.20 for the 2007 quarter. The Company's backlog of homes sold
but not settled at the end of the 2007 quarter decreased on a unit basis by 11%
to 7,887 units and 19% on a dollar basis to $3,085,939,000 when compared to the
same period last year.
For the six months ended June 30, 2007, consolidated revenues were
$2,409,857,000, 18% lower than the $2,953,583,000 reported for the same period
of 2006. Net income for the six months ended June 30, 2007 was $175,568,000, a
decrease of 46% when compared to the six months ended June 30, 2006. Earnings
per diluted share for the six months ended June 30, 2007 was $27.11, a decrease
of 43% from $47.54 per diluted share for the comparable period of 2006.
Mortgage Banking
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Mortgage closed loan production of $849,430,000 for the three months ended June
30, 2007 was 24% lower than the same period last year. Sub-prime loans accounted
for approximately 6% of our captured mortgage closed loan volume in the current
quarter compared to 5% for the second quarter of 2006. Operating income for the
mortgage banking operations during the second quarter of 2007 decreased 33% to
$11,719,000, when compared to $17,486,000 reported for the same period of 2006.
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. 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 variations
thereof or comparable terminology, or by discussion of strategies, each of which
involves risks and uncertainties. All statements other than those of historical
facts included herein, including those regarding market trends, NVR's financial
position, business strategy, projected plans and objectives of management for
future operations, are forward-looking statements. 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,
general economic and business conditions (on both a national and regional
level), interest rate changes, access to suitable financing, 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 moratoria, governmental regulation, the ability of NVR to integrate any
acquired business, fluctuation and volatility of stock and other financial
markets and other factors over which NVR has little or no control. The Company
has no obligation to update such forward-looking statements.
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NVR, Inc.
Consolidated Statements of Income
(in thousands, except per share data)
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
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2007 2006 2007 2006
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Homebuilding:
Revenues $1,297,140 $1,722,797 $2,372,250 $2,906,539
Other income 5,251 2,634 12,216 5,010
Cost of sales (1,061,937) (1,304,183) (1,915,347) (2,165,222)
Selling, general and administrative (101,198) (119,551) (198,604) (233,557)
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Operating income 139,256 301,697 270,515 512,770
Interest expense (3,298) (6,105) (6,620) (11,632)
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Homebuilding income 135,958 295,592 263,895 501,138
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Mortgage Banking:
Mortgage banking fees 19,528 26,131 37,607 47,044
Interest income 1,030 1,791 2,337 3,250
Other income 276 383 460 614
General and administrative (8,954) (9,852) (18,277) (19,020)
Interest expense (161) (967) (313) (1,921)
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Mortgage banking income 11,719 17,486 21,814 29,967
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Income before taxes 147,677 313,078 285,709 531,105
Income tax expense (56,930) (122,726) (110,141) (208,193)
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Net income $90,747 $190,352 $175,568 $322,912
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Basic earnings per share $16.19 $33.27 $31.16 $57.06
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Diluted earnings per share $14.14 $28.08 $27.11 $47.54
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Basic average shares outstanding 5,606 5,722 5,634 5,659
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Diluted average shares outstanding 6,420 6,779 6,477 6,792
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3
NVR, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share data)
June 30, 2007 December 31, 2006
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(unaudited)
ASSETS
Homebuilding:
Cash and cash equivalents $571,522 $551,738
Receivables 13,474 12,213
Inventory:
Lots and housing units, covered under
sales agreements with customers 830,964 667,100
Unsold lots and housing units 46,839 58,248
Manufacturing materials and other 8,759 8,268
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886,562 733,616
Contract land deposits 327,015 402,170
Assets not owned, consolidated
per FIN 46R 199,246 276,419
Property, plant and equipment, net 35,798 40,430
Reorganization value in excess of amounts
allocable to identifiable assets, net 41,580 41,580
Goodwill and other indefinite and definite
life intangibles, net 11,849 11,936
Other assets 240,305 207,468
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2,327,351 2,277,570
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Mortgage Banking:
Cash and cash equivalents 2,560 4,381
Mortgage loans held for sale, net 158,882 178,444
Property and equipment, net 987 1,168
Reorganization value in excess of amounts
allocable to identifiable assets, net 7,347 7,347
Other assets 6,154 4,898
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175,930 196,238
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Total assets $2,503,281 $2,473,808
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(Continued)
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NVR, Inc.
Consolidated Balance Sheets (Continued)
(in thousands, except share and per share data)
June 30, 2007 December 31, 2006
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(unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
Homebuilding:
Accounts payable $272,688 $273,936
Accrued expenses and other liabilities 230,858 265,223
Liabilities related to assets not owned,
consolidated per FIN 46R 172,054 244,805
Customer deposits 195,165 165,354
Other term debt 2,954 3,080
Senior notes 200,000 200,000
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1,073,719 1,152,398
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Mortgage Banking:
Accounts payable and other liabilities 13,818 15,784
Notes payable 136,124 153,552
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149,942 169,336
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Total liabilities 1,223,661 1,321,734
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Commitments and contingencies
Shareholders' equity:
Common stock, $0.01 par value; 60,000,000
shares authorized; 20,592,640 shares issued
for both June 30, 2007 and December 31, 2006 206 206
Additional paid-in capital 676,003 585,438
Deferred compensation trust - 516,004 and
547,911 shares of NVR, Inc. common stock for
June 30, 2007 and December 31, 2006,
respectively (75,599) (80,491)
Deferred compensation liability 75,599 80,491
Retained earnings 3,371,608 3,196,040
Less treasury stock at cost - 14,984,212 and
15,075,113 shares for June 30, 2007 and
December 31, 2006, respectively (2,768,197) (2,629,610)
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Total shareholders' equity 1,279,620 1,152,074
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Total liabilities and shareholders'
equity $2,503,281 $2,473,808
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NVR, Inc.
Operating Activity
(unaudited)
(dollars in thousands)
Three Months Ended June 30, Six Months Ended June 30,
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2007 2006 2007 2006
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Homebuilding data:
New orders (units)
Mid Atlantic (1) 1,803 1,978 3,724 3,612
North East (2) 345 404 762 855
Mid East (3) 923 1,079 1,953 2,007
South East (4) 674 743 1,223 1,363
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Total 3,745 4,204 7,662 7,837
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Average new order price $363.9 $384.7 $368.2 $386.0
Settlements (units)
Mid Atlantic (1) 1,720 2,145 3,072 3,720
North East (2) 324 454 573 756
Mid East (3) 839 1,028 1,411 1,640
South East (4) 580 670 1,107 1,167
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Total 3,463 4,297 6,163 7,283
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Average settlement price $374.2 $400.3 $384.4 $398.5
Backlog (units)
Mid Atlantic (1) 4,317 4,866
North East (2) 729 883
Mid East (3) 1,816 1,968
South East (4) 1,025 1,147
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Total 7,887 8,864
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Average backlog price $391.3 $428.5
Community count (average) 516 618 522 598
Lots controlled at end of period 85,400 104,000
Mortgage banking data:
Loan closings $849,430 $1,123,461 $1,564,469 $1,860,243
Capture rate 86% 87% 86% 86%
Common stock information:
Shares outstanding at end of period 5,608,428 5,750,939
Weighted average basic shares outstanding 5,606,000 5,722,000 5,634,000 5,659,000
Weighted average diluted shares
outstanding 6,420,000 6,779,000 6,477,000 6,792,000
Number of shares repurchased 179,700 - 305,700 161,856
Aggregate cost of shares repurchased $123,263 - $209,613 $120,817
(1) Virginia, West Virginia, Maryland, and Delaware
(2) New Jersey and eastern Pennsylvania
(3) Kentucky, Michigan, New York, Ohio and western Pennsylvania
(4) North Carolina, South Carolina and Tennessee
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