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): January
29, 2008
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
January 29, 2008, NVR, Inc. issued a press release reporting its financial
results for the quarter and year to date periods ended December 31, 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 January 29, 2008.
|
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: January 29, 2008 | By: /s/ Dennis M. Seremet | |
|
Name: Dennis M. Seremet |
||
| Title: Senior Vice President and | ||
|
Chief
Financial Officer
|
||
3
INDEX
TO EXHIBITS
| Exhibit Number |
Exhibit
Description
|
| 99.1 | Press release dated January 29, 2008. |
4
Exhibit
99.1
NVR,
INC. ANNOUNCES FOURTH QUARTER RESULTS
| FOR IMMEDIATE RELEASE | Contact: | Dan Malzahn |
| Office: | (703) 956-4204 |
January
29, 2008, Reston, VA—NVR, Inc. (NYSE: NVR),
one of
the nation’s largest homebuilding and mortgage banking companies, announced that
diluted earnings per share for its fourth quarter ended December 31, 2007
decreased 44% and net income decreased 50% when compared to the 2006 fourth
quarter. Net income for the 2007 fourth quarter was $67,274,000, $11.72 per
diluted share, compared to net income of $135,167,000, $20.86 per diluted share,
for the same period of 2006. The fourth quarter 2007 results were negatively
impacted by land deposit impairments of approximately $97,000,000. These
impairments lowered gross margins by 690 basis points and reduced diluted
earnings per share by $10.32. Consolidated revenues for the last three months
of
2007 totaled $1,427,397,000, a 12% decrease from $1,627,130,000 for the
comparable 2006 quarter.
Net
income for the 2007 fiscal year was $333,955,000, $54.14 per diluted share,
compared to net income of $587,412,000, $88.05 per diluted share for 2006,
a 43%
decrease in net income and a 39% decrease in diluted earnings per share. The
full year results were negatively impacted by land deposit impairments of
approximately $261,800,000. These impairments lowered gross margins by 519
basis
points and reduced diluted earnings per share by $25.91. Consolidated revenues
for 2007 totaled $5,129,342,000, a 16% decrease from the $6,134,124,000 for
2006.
Homebuilding
New
orders for the fourth quarter of 2007 decreased 35% to 1,948 units, when
compared to 3,002 units for the fourth quarter of 2006. New order activity
slowed as the quarter progressed and activity has remained weak during January.
The cancellation rate in the fourth quarter of 2007 was 32% compared to 20%
in
the fourth quarter of 2006 and 27% in the third quarter of 2007. The
cancellation rate in the Washington, D.C. market was 46% in the quarter compared
to 34% in the fourth quarter of 2006 and 44% in the third quarter of 2007.
These
elevated cancellation levels are largely due to the instability in the mortgage
lending market, including the tightening of mortgage underwriting standards.
The
average sales price of new orders in the fourth quarter of 2007 declined by
13%
from the fourth quarter of 2006. The average new order price declined in all
regions but was primarily due to a 17% decline in the Mid-Atlantic region.
These
sizable declines in new order units and prices will continue to have a
significant negative impact on revenues and gross margins in the coming
quarters.
Settlements
decreased in the fourth quarter of 2007 to 3,874 units, 3% less than the same
period of 2006. Homebuilding revenues for the three months ended December 31,
2007 totaled $1,405,466,000, 12% lower than the year earlier period. Pre-tax
homebuilding income totaled $92,681,000, a decrease of 54% when compared to
the
fourth quarter of the previous year. Gross profit margins decreased to 12.9%
in
the 2007 fourth 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 price declines in most of our markets.
New
orders for 2007 totaled 12,270 units, a 7% decrease when compared to the 13,217
units reported for 2006. Home settlements for 2007 decreased 11% to 13,513
units
when compared to 15,139 units closed in 2006. Homebuilding revenues for 2007
totaled $5,048,187,000, 16% lower than 2006. Pre-tax homebuilding income
decreased to $485,576,000 for the 2007 fiscal year, a decrease of 46% from
the
prior year. Gross profit margins decreased to 16.3% in 2007 from 22.1% in 2006.
The number of homes in backlog at the end of 2007 was 5,145 units, 19% lower
than the 6,388 units in backlog at the end of 2006. The dollar volume in backlog
decreased 27% to $1,910,504,000 at December 31, 2007, when compared to the
same
time last year.
Mortgage
Banking
Mortgage
closed loan production of $867,106,000 for the three months ended December
31,
2007 was 19% lower than the same period last year. Pre-tax income contributed
by
the mortgage banking operations during the fourth quarter of 2007 decreased
14%
to $15,301,000, when compared to $17,875,000 reported for the same period of
2006.
Pre-tax
income from the mortgage banking segment decreased for the 2007 fiscal year
to
$53,929,000, a 17% decrease from the $65,133,000 reported for 2006. Mortgage
production for the year decreased 18% to $3,225,324,000.
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
by 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, mortgage financing availability and other
factors over which NVR has little or no control. The Company has no obligation
to update such forward-looking statements.
NVR,
Inc.
Consolidated
Statements of Income
(amounts
in thousands, except per share data)
|
Three
Months Ended December 31,
|
Twelve
Months Ended December 31,
|
||||||||||||
|
2007
|
2006
|
2007
|
2006
|
||||||||||
|
Homebuilding:
|
|||||||||||||
|
Revenues
|
$
|
1,405,466
|
$
|
1,600,733
|
$
|
5,048,187
|
$
|
6,036,236
|
|||||
|
Other
income
|
4,693
|
5,361
|
21,118
|
13,609
|
|||||||||
|
Cost
of sales
|
(1,224,313
|
)
|
(1,297,372
|
)
|
(4,227,059
|
)
|
(4,701,265
|
)
|
|||||
|
Selling,
general and administrative
|
(90,010
|
)
|
(103,188
|
)
|
(343,520
|
)
|
(432,319
|
)
|
|||||
|
Operating
income
|
95,836
|
205,534
|
498,726
|
916,261
|
|||||||||
|
Interest
expense
|
(3,155
|
)
|
(3,650
|
)
|
(13,150
|
)
|
(18,423
|
)
|
|||||
|
Homebuilding
income
|
92,681
|
201,884
|
485,576
|
897,838
|
|||||||||
|
Mortgage
Banking:
|
|||||||||||||
|
Mortgage
banking fees
|
21,931
|
26,397
|
81,155
|
97,888
|
|||||||||
|
Interest
income
|
1,485
|
2,468
|
4,900
|
7,704
|
|||||||||
|
Other
income
|
280
|
317
|
1,060
|
1,334
|
|||||||||
|
General
and administrative
|
(8,227
|
)
|
(11,121
|
)
|
(32,505
|
)
|
(38,988
|
)
|
|||||
|
Interest
expense
|
(168
|
)
|
(186
|
)
|
(681
|
)
|
(2,805
|
)
|
|||||
|
Mortgage
banking income
|
15,301
|
17,875
|
53,929
|
65,133
|
|||||||||
|
Income
before taxes
|
107,982
|
219,759
|
539,505
|
962,971
|
|||||||||
|
Income
tax expense
|
(40,708
|
)
|
(84,592
|
)
|
(205,550
|
)
|
(375,559
|
)
|
|||||
|
Net
income
|
$
|
67,274
|
$
|
135,167
|
$
|
333,955
|
$
|
587,412
|
|||||
|
Basic
earnings per share
|
$
|
13.10
|
$
|
24.43
|
$
|
61.61
|
$
|
104.08
|
|||||
|
Diluted
earnings per share
|
$
|
11.72
|
$
|
20.86
|
$
|
54.14
|
$
|
88.05
|
|||||
|
Basic
average shares outstanding
|
5,136
|
5,533
|
5,420
|
5,644
|
|||||||||
|
Diluted
average shares outstanding
|
5,741
|
6,481
|
6,168
|
6,672
|
|||||||||
NVR,
Inc.
Consolidated
Balance Sheets
(in
thousands, except share and per share data)
|
December
31,
|
|||||||
|
2007
|
2006
|
||||||
|
ASSETS
|
|||||||
|
Homebuilding:
|
|||||||
|
Cash
and cash equivalents
|
$
|
660,709
|
$
|
551,738
|
|||
|
Receivables
|
10,855
|
12,213
|
|||||
|
Inventory:
|
|||||||
|
Lots
and housing units, covered under
|
|||||||
|
sales
agreements with customers
|
573,895
|
667,100
|
|||||
|
Unsold
lots and housing units
|
105,838
|
58,248
|
|||||
|
Manufacturing
materials and other
|
9,121
|
8,268
|
|||||
|
688,854
|
733,616
|
||||||
|
Contract
land deposits, net
|
188,528
|
402,170
|
|||||
|
Assets
not owned, consolidated
|
|||||||
|
per
FIN 46R
|
180,206
|
276,419
|
|||||
|
Property,
plant and equipment, net
|
32,911
|
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
|
11,782
|
11,936
|
|||||
|
Other
assets
|
252,461
|
207,468
|
|||||
|
2,067,886
|
2,277,570
|
||||||
|
Mortgage
Banking:
|
|||||||
|
Cash
and cash equivalents
|
3,500
|
4,381
|
|||||
|
Mortgage
loans held for sale, net
|
107,338
|
178,444
|
|||||
|
Property
and equipment, net
|
881
|
1,168
|
|||||
|
Reorganization
value in excess of amounts
|
|||||||
|
allocable
to identifiable assets, net
|
7,347
|
7,347
|
|||||
|
Other
assets
|
7,464
|
4,898
|
|||||
|
126,530
|
196,238
|
||||||
|
Total
assets
|
$
|
2,194,416
|
$
|
2,473,808
|
|||
NVR,
Inc.
Consolidated
Balance Sheets (Continued)
(in
thousands, except share and per share data)
|
|
|||||||
|
December
31,
|
|||||||
|
2007
|
2006
|
||||||
|
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|||||||
|
Homebuilding:
|
|||||||
|
Accounts
payable
|
$
|
219,048
|
$
|
273,936
|
|||
|
Accrued
expenses and other liabilities
|
251,475
|
265,223
|
|||||
|
Liabilities
related to assets not owned
|
|||||||
|
consolidated
per FIN 46R
|
164,369
|
244,805
|
|||||
|
Customer
deposits
|
125,315
|
165,354
|
|||||
|
Other
term debt
|
2,820
|
3,080
|
|||||
|
Senior
notes
|
200,000
|
200,000
|
|||||
|
963,027
|
1,152,398
|
||||||
|
Mortgage
Banking:
|
|||||||
|
Accounts
payable and other liabilities
|
18,551
|
15,784
|
|||||
|
Notes
payable
|
83,463
|
153,552
|
|||||
|
102,014
|
169,336
|
||||||
|
Total
liabilities
|
1,065,041
|
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 2007 and 2006
|
206
|
206
|
|||||
|
Additional
paid-in-capital
|
663,631
|
585,438
|
|||||
|
Deferred
compensation trust- 516,085
|
|||||||
|
and
547,911 shares of NVR, Inc.
|
|||||||
|
common
stock for 2007
|
|||||||
|
and
2006, respectively
|
(75,636
|
)
|
(80,491
|
)
|
|||
|
Deferred
compensation liability
|
75,636
|
80,491
|
|||||
|
Retained
earnings
|
3,529,995
|
3,196,040
|
|||||
|
Less
treasury stock at cost - 15,455,086
|
|||||||
|
and
15,075,113 shares for
|
|||||||
|
2007
and 2006, respectively
|
(3,064,457
|
)
|
(2,629,610
|
)
|
|||
|
Total
shareholders' equity
|
1,129,375
|
1,152,074
|
|||||
|
Total
liabilities and shareholders'
|
|||||||
|
equity
|
$
|
2,194,416
|
$
|
2,473,808
|
|||
NVR,
Inc.
Operating
Activity
(unaudited)
(dollars
in thousands)
|
Three
Months Ended December 31,
|
Twelve
Months Ended December 31,
|
||||||||||||
|
2007
|
2006
|
2007
|
2006
|
||||||||||
|
Homebuilding
data:
|
|||||||||||||
|
New
orders (units)
|
|||||||||||||
|
Mid
Atlantic (1)
|
910
|
1,442
|
5,695
|
6,182
|
|||||||||
|
North
East (2)
|
190
|
319
|
1,212
|
1,438
|
|||||||||
|
Mid
East (3)
|
540
|
755
|
3,160
|
3,244
|
|||||||||
|
South
East (4)
|
308
|
486
|
2,203
|
2,353
|
|||||||||
|
Total
|
1,948
|
3,002
|
12,270
|
13,217
|
|||||||||
|
Average
new order price
|
$
|
318.4
|
$
|
366.7
|
$
|
352.0
|
$
|
377.4
|
|||||
|
Settlements
(units)
|
|||||||||||||
|
Mid
Atlantic (1)
|
1,906
|
1,980
|
6,634
|
7,491
|
|||||||||
|
North
East (2)
|
329
|
485
|
1,247
|
1,682
|
|||||||||
|
Mid
East (3)
|
974
|
965
|
3,321
|
3,571
|
|||||||||
|
South
East (4)
|
665
|
572
|
2,311
|
2,395
|
|||||||||
|
Total
|
3,874
|
4,002
|
13,513
|
15,139
|
|||||||||
|
Average
settlement price
|
$
|
362.5
|
$
|
399.5
|
$
|
373.2
|
$
|
398.2
|
|||||
|
Backlog
(units)
|
|||||||||||||
|
Mid
Atlantic (1)
|
2,726
|
3,665
|
|||||||||||
|
North
East (2)
|
505
|
540
|
|||||||||||
|
Mid
East (3)
|
1,113
|
1,274
|
|||||||||||
|
South
East (4)
|
801
|
909
|
|||||||||||
|
Total
|
5,145
|
6,388
|
|||||||||||
|
Average
backlog price
|
$
|
371.3
|
$
|
412.4
|
|||||||||
|
Community
count (average)
|
472
|
551
|
505
|
589
|
|||||||||
|
Lots
controlled at end of year
|
67,600
|
88,500
|
|||||||||||
|
Mortgage
banking data:
|
|||||||||||||
|
Loan
closings
|
$
|
867,106
|
$
|
1,071,286
|
$
|
3,225,324
|
$
|
3,918,206
|
|||||
|
Capture
rate
|
83
|
%
|
87
|
%
|
85
|
%
|
86
|
%
|
|||||
|
Common
stock information:
|
|||||||||||||
|
Shares
outstanding at end of year
|
5,137,554
|
5,517,527
|
|||||||||||
|
Weighted
average basic shares outstanding
|
5,136,000
|
5,533,000
|
5,420,000
|
5,644,000
|
|||||||||
|
Weighted
average diluted shares outstanding
|
5,741,000
|
6,481,000
|
6,168,000
|
6,672,000
|
|||||||||
|
Number
of shares repurchased
|
-
|
192,200
|
784,788
|
481,141
|
|||||||||
|
Aggregate
cost of shares repurchased
|
$
|
0
|
$
|
103,778
|
$
|
507,472
|
$
|
287,064
|
|||||
| (1) |
Virginia,
West Virginia, Maryland, and
Delaware
|
| (2) |
Eastern
Pennsylvania and New Jersey
|
| (3) |
Kentucky,
New York, Ohio and western
Pennsylvania
|
| (4) |
North
Carolina, South Carolina and
Tennessee
|