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): October
19, 2007
NVR,
Inc.
(Exact
name of registrant as specified in its charter)
|
Virginia
|
1-12378
|
54-1394360
|
|
(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
|
|
(Address
of principal executive
offices)
|
(Zip
Code)
|
Registrant’s
telephone number, including area code: 703-956-4000
_______________________________________________________
(Former
name or former address, if changed since last report)
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:
o
Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule
14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant
to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
o
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
October 19, 2007, NVR, Inc. issued a press release reporting its financial
results for the quarter and year to date periods ended September 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 | ||
|
99.1
|
Press
release dated October 19, 2007.
|
2
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: October 19, 2007 | By: /s/
Dennis M. Seremet
Name:
Dennis M. Seremet
Title:
Vice President and Chief
Financial Officer
|
3
INDEX
TO EXHIBITS
|
Exhibit
Number
|
Exhibit Description | ||
|
99.1
|
Press
release dated October 19, 2007.
|
||
4
Ex
-
99.1
NVR,
INC. ANNOUNCES THIRD QUARTER RESULTS
| FOR IMMEDIATE RELEASE |
Contact: Dan
Malzahn
Office:
(703)
956-4204
|
RESTON,
Va., Oct. 19 /PRNewswire-FirstCall/ --
NVR, Inc. (Amex: NVR), one
of
the nation's largest homebuilding and mortgage banking companies, announced
that
diluted earnings per share for its third quarter ended September 30, 2007
decreased 22% and net income decreased 30% when compared to the 2006 third
quarter. Net income for the 2007 third quarter was $91,113,000, $15.26
per
diluted share, compared to net income of $129,333,000, $19.63 per diluted
share,
for the same period of 2006. The third quarter results were negatively
impacted
by land deposit impairments of approximately $96,500,000. These impairments
lowered gross margins by 760 basis points and reduced diluted EPS by $9.88.
Consolidated revenues for the third quarter of 2007 totaled $1,292,088,000,
a
17% decrease from $1,553,411,000 for the comparable 2006 quarter. Due to
the
continued earnings decline resulting from the deterioration in market conditions
and our expectation that market conditions will not improve in the near
term,
the Company determined that it is improbable that it will achieve the
performance metric related to approximately 411,000 outstanding stock options.
This determination resulted in the reversal of approximately $31,500,000
($3.05
per diluted share) of pre-tax stock-based compensation costs recognized
prior to
the 2007 third quarter.
For
the
nine months ended September 30, 2007, consolidated revenues were $3,701,945,000,
18% lower than the $4,506,994,000 reported for the same period of 2006. Net
income for the nine months ended September 30, 2007 was $266,681,000, a decrease
of 41% when compared to the nine months ended September 30, 2006. Earnings
per
diluted share for the nine months ended September 30, 2007 was $42.25, a
decrease of 37% from $67.23 per diluted share for the comparable period of
2006.
Homebuilding
New
orders in the third quarter of 2007 increased 12% to 2,660 units, when
compared
to 2,378 units in the third quarter of 2006. The Company attributed this
year
over year new order growth, in part, to a weak 2006 third quarter. New
order
activity slowed significantly in August and September due to tightening
in the
credit markets. The average new order price in the third quarter of 2007
decreased 9% to $330,100 when compared to $362,500 in the third quarter
of 2006.
The cancellation rate in the quarter ended September 30, 2007 was 27% compared
to 27% in the third quarter of 2006 and 16% in the second quarter of 2007.
The
Washington, D.C. cancellation rate in the quarter was 44% compared to 39%
in the
third quarter of 2006 and 21% in the second quarter of 2007.
Settlements
decreased in the third quarter of 2007 to 3,476 units, 10% less than
the same
period of 2006. Homebuilding revenues for the three months ended September
30,
2007 totaled $1,270,471,000, 17% lower than the year earlier period.
Income
before tax from the homebuilding segment totaled $129,000,000 in the
2007 third
quarter, a decrease of 34% when compared to the third quarter of the
previous
year. Gross profit margins decreased to 14.4% in the 2007 third quarter
compared
to 19.0% for the same period in 2006. The decline in gross profit margins
is due
to the previously mentioned land deposit impairments and continued pricing
pressures. The Company's backlog of homes sold but not settled at the
end of the
2007 quarter decreased on a unit basis by 4% to 7,071 units and 14% on
a dollar
basis to $2,695,591,000 when compared to the same period last year.
Mortgage
Banking
Mortgage
closed loan production of $793,749,000 for the three months ended September
30,
2007 was 20% lower than the same period last year. Operating income
for the
mortgage banking operations during the third quarter of 2007 decreased
3% to
$16,814,000, when compared to $17,291,000 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, the outcome of pending litigation, 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
by NVR and
NVR's customers, 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.
2
NVR,
Inc.
Consolidated
Statements of Income
(in
thousands, except per share data)
(Unaudited)
|
Three
Months Ended September 30,
|
Nine
Months Ended September 30,
|
||||||||||||
|
2007
|
|
2006
|
|
2007
|
|
2006
|
|||||||
|
Homebuilding:
|
|||||||||||||
|
Revenues
|
$
|
1,270,471
|
$
|
1,528,964
|
$
|
3,642,721
|
$
|
4,435,503
|
|||||
|
Other
income
|
4,209
|
3,238
|
16,425
|
8,248
|
|||||||||
|
Cost
of
sales
|
(1,087,399
|
)
|
(1,238,671
|
)
|
(3,002,746
|
)
|
(3,403,893
|
)
|
|||||
|
Selling,
general
and administrative
|
(54,906
|
)
|
(95,574
|
)
|
(253,510
|
)
|
(329,131
|
)
|
|||||
|
Operating
income
|
132,375
|
197,957
|
402,890
|
710,727
|
|||||||||
|
Interest
expense
|
(3,375
|
)
|
(3,141
|
)
|
(9,995
|
)
|
(14,773
|
)
|
|||||
|
Homebuilding
income
|
129,000
|
194,816
|
392,895
|
695,954
|
|||||||||
|
Mortgage
Banking:
|
|||||||||||||
|
Mortgage
banking
fees
|
21,617
|
24,447
|
59,224
|
71,491
|
|||||||||
|
Interest
income
|
1,078
|
1,986
|
3,415
|
5,236
|
|||||||||
|
Other
income
|
320
|
403
|
780
|
1,017
|
|||||||||
|
General
and
administrative
|
(6,001
|
)
|
(8,847
|
)
|
(24,278
|
)
|
(27,867
|
)
|
|||||
|
Interest
expense
|
(200
|
)
|
(698
|
)
|
(513
|
)
|
(2,619
|
)
|
|||||
|
Mortgage
banking income
|
16,814
|
17,291
|
38,628
|
47,258
|
|||||||||
|
Income
before taxes
|
145,814
|
212,107
|
431,523
|
743,212
|
|||||||||
|
Income
tax expense
|
(54,701
|
)
|
(82,774
|
)
|
(164,842
|
)
|
(290,967
|
)
|
|||||
|
Net
income
|
$
|
91,113
|
$
|
129,333
|
$
|
266,681
|
$
|
452,245
|
|||||
|
Basic
earnings per share
|
$
|
17.25
|
$
|
22.59
|
$
|
48.35
|
$
|
79.60
|
|||||
|
Diluted
earnings per share
|
$
|
15.26
|
$
|
19.63
|
$
|
42.25
|
$
|
67.23
|
|||||
|
Basic
average shares outstanding
|
5,283
|
5,725
|
5,516
|
5,682
|
|||||||||
|
Diluted
average shares outstanding
|
5,969
|
6,588
|
6,312
|
6,727
|
|||||||||
3
NVR,
Inc.
Consolidated
Balance Sheets
(in
thousands, except share and per share data)
|
September
30, 2007
|
December
31, 2006
|
||||||
|
(unaudited)
|
|||||||
|
ASSETS
|
|||||||
|
Homebuilding:
|
|||||||
|
Cash
and cash equivalents
|
$
|
314,364
|
$
|
551,738
|
|||
|
Receivables
|
17,666
|
12,213
|
|||||
|
Inventory:
|
|||||||
|
Lots
and housing
units, covered under
|
|||||||
|
sales
agreements with customers
|
878,541
|
667,100
|
|||||
|
Unsold
lots and
housing units
|
93,940
|
58,248
|
|||||
|
Manufacturing
materials and other
|
6,916
|
8,268
|
|||||
|
979,397
|
733,616
|
||||||
|
Contract
land
deposits
|
237,868
|
402,170
|
|||||
|
Assets
not owned, consolidated
|
|||||||
|
per
FIN
46R
|
203,782
|
276,419
|
|||||
|
Property,
plant
and equipment, net
|
34,582
|
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
|
11,816
|
11,936
|
|||||
|
Other
assets
|
252,617
|
207,468
|
|||||
|
2,093,672
|
2,277,570
|
||||||
|
Mortgage
Banking:
|
|||||||
|
Cash
and cash equivalents
|
2,827
|
4,381
|
|||||
|
Mortgage
loans
held for sale, net
|
137,749
|
178,444
|
|||||
|
Property
and
equipment, net
|
941
|
1,168
|
|||||
|
Reorganization
value in excess of amounts
|
|||||||
|
allocable
to
identifiable assets, net
|
7,347
|
7,347
|
|||||
|
Other
assets
|
4,138
|
4,898
|
|||||
|
153,002
|
196,238
|
||||||
|
Total
assets
|
$
|
2,246,674
|
$
|
2,473,808
|
|||
(Continued)
4
NVR,
Inc.
Consolidated
Balance Sheets (Continued)
(in
thousands, except share and per share data)
|
September
30, 2007
|
December
31, 2006
|
||||||
|
(unaudited)
|
|||||||
|
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
|||||||
|
Homebuilding:
|
|||||||
|
Accounts
payable
|
$
|
266,362
|
$
|
273,936
|
|||
|
Accrued
expenses and other liabilities
|
244,534
|
265,223
|
|||||
|
Liabilities
related to assets not owned,
|
|||||||
|
consolidated
per
FIN 46R
|
179,487
|
244,805
|
|||||
|
Customer
deposits
|
174,324
|
165,354
|
|||||
|
Other
term debt
|
2,888
|
3,080
|
|||||
|
Senior
notes
|
200,000
|
200,000
|
|||||
|
1,067,595
|
1,152,398
|
||||||
|
Mortgage
Banking:
|
|||||||
|
Accounts
payable and other liabilities
|
15,354
|
15,784
|
|||||
|
Notes
payable
|
111,647
|
153,552
|
|||||
|
127,001
|
169,336
|
||||||
|
Total
liabilities
|
1,194,596
|
1,321,734
|
|||||
|
Commitments
and
contingencies
|
|||||||
|
Shareholders’
equity:
|
|||||||
|
Common
stock, $0.01 par value; 60,000,000 shares
|
|||||||
|
authorized;
20,592,640 shares issued for both
|
|||||||
|
September
30, 2007
and December 31, 2006
|
206
|
206
|
|||||
|
Additional
paid-in capital
|
653,996
|
585,438
|
|||||
|
Deferred
compensation trust - 516,044 and
|
|||||||
|
547,911
shares of
NVR, Inc. common stock for
|
|||||||
|
September
30, 2007
and December 31, 2006,
|
|||||||
|
respectively
|
(75,616
|
)
|
(80,491
|
)
|
|||
|
Deferred
compensation liability
|
75,616
|
80,491
|
|||||
|
Retained
earnings
|
3,462,721
|
3,196,040
|
|||||
|
Less
treasury stock at cost - 15,457,040 and
|
|||||||
|
15,075,113
shares
for September 30, 2007 and
|
|||||||
|
December
31,
2006, respectively
|
(3,064,845
|
)
|
(2,629,610
|
)
|
|||
|
Total
shareholders’ equity
|
1,052,078
|
1,152,074
|
|||||
|
Total
liabilities and shareholders’
|
|||||||
|
equity
|
$
|
2,246,674
|
$
|
2,473,808
|
|||
5
NVR,
Inc.
Operating
Activity
(unaudited)
(dollars
in thousands)
|
Three
Months Ended
September
30,
|
Nine
Months Ended
September
30,
|
||||||||||||
|
2007
|
2006
|
2007
|
2006
|
||||||||||
|
Homebuilding
data:
|
|||||||||||||
|
New
orders
(units)
|
|||||||||||||
|
Mid
Atlantic (1)
|
1,061
|
1,128
|
4,785
|
4,740
|
|||||||||
|
North
East (2)
|
260
|
264
|
1,022
|
1,119
|
|||||||||
|
Mid
East (3)
|
667
|
482
|
2,620
|
2,489
|
|||||||||
|
South
East (4)
|
672
|
504
|
1,895
|
1,867
|
|||||||||
|
Total
|
2,660
|
2,378
|
10,322
|
10,215
|
|||||||||
|
Average
new order
price
|
$
|
330.1
|
$
|
362.5
|
$
|
358.4
|
$
|
380.6
|
|||||
|
Settlements
(units)
|
|||||||||||||
|
Mid
Atlantic (1)
|
1,656
|
1,791
|
4,728
|
5,511
|
|||||||||
|
North
East (2)
|
345
|
441
|
918
|
1,197
|
|||||||||
|
Mid
East (3)
|
936
|
966
|
2,347
|
2,606
|
|||||||||
|
South
East (4)
|
539
|
656
|
1,646
|
1,823
|
|||||||||
|
Total
|
3,476
|
3,854
|
9,639
|
11,137
|
|||||||||
|
Average
settlement
price
|
$
|
365.1
|
$
|
396.3
|
$
|
377.5
|
$
|
397.7
|
|||||
|
Backlog
(units)
|
|||||||||||||
|
Mid
Atlantic (1)
|
3,722
|
4,203
|
|||||||||||
|
North
East (2)
|
644
|
706
|
|||||||||||
|
Mid
East (3)
|
1,547
|
1,484
|
|||||||||||
|
South
East (4)
|
1,158
|
995
|
|||||||||||
|
Total
|
7,071
|
7,388
|
|||||||||||
|
Average
backlog
price
|
$
|
381.2
|
$
|
424.0
|
|||||||||
|
Community
count
(average)
|
506
|
609
|
517
|
602
|
|||||||||
|
Lots
controlled at
end of period
|
79,700
|
98,000
|
|||||||||||
|
Mortgage
banking data:
|
|||||||||||||
|
Loan
closings
|
$
|
793,749
|
$
|
986,677
|
$
|
2,358,218
|
$
|
2,846,920
|
|||||
|
Capture
rate
|
84
|
%
|
86
|
%
|
85
|
%
|
86
|
%
|
|||||
|
Common
stock information:
|
|||||||||||||
|
Shares
outstanding
at end of period
|
5,135,600
|
5,644,915
|
|||||||||||
|
Weighted
average
basic shares outstanding
|
5,283,000
|
5,725,000
|
5,516,000
|
5,682,000
|
|||||||||
|
Weighted
average
diluted shares outstanding
|
5,969,000
|
6,588,000
|
6,312,000
|
6,727,000
|
|||||||||
|
Number
of shares
repurchased
|
479,088
|
127,085
|
784,788
|
288,941
|
|||||||||
|
Aggregate
cost of
shares repurchased
|
$
|
297,859
|
$
|
62,469
|
$
|
507,472
|
$
|
183,286
|
|||||
| (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
|
6