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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): April 18, 2008
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 (I.R.S. Employer
incorporation or organization) File 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 April 18, 2008, NVR, Inc. issued a press release reporting its
financial results for the first quarter ended March 31, 2008. 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 April 18, 2008.
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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: April 21, 2008 By: /s/ Dennis M. Seremet
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Name: Dennis M. Seremet
Title: Senior 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 April 18, 2008.
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Exhibit 99.1
NVR, INC. ANNOUNCES FIRST QUARTER RESULTS
FOR IMMEDIATE RELEASE Contact: Dan Malzahn
Office: (703) 956-4204
RESTON, Va., April 18 /PRNewswire-FirstCall/ -- NVR, Inc. (NYSE: NVR), one of
the nation's largest homebuilding and mortgage banking companies, announced net
income for the 2008 first quarter of $43,466,000, $7.42 per diluted share,
compared to net income of $84,821,000, $12.96 per diluted share, for the same
period of 2007. Diluted earnings per share and net income for the first quarter
ended March 31, 2008 were 43% and 49% respectively, below the 2007 first
quarter. Consolidated revenues for the first three months of 2008 totaled
$887,931,000, a 19% decline from $1,093,189,000 for the comparable 2007 quarter.
At the end of the first quarter of 2008, cash was $767,000,000 and the
homebuilding debt to capital ratio was 14%.
Homebuilding
New orders in the first quarter of 2008 decreased 30% to 2,731 units, when
compared to 3,917 units in the first quarter of 2007. The cancellation rate in
the first quarter of 2008 was 22% compared to 16% in the first quarter of 2007
and 32% in the fourth quarter of 2007. The cancellation rate in the Washington,
D.C. market was 30% in the quarter compared to 22% in the first quarter of 2007
and 46% in the fourth quarter of 2007. The average sales price of new orders in
the first quarter of 2008 declined by 14% from the first quarter of 2007. The
average new order price declined in all regions but was primarily due to an 18%
decline in the Mid-Atlantic region.
Settlements decreased in the first quarter of 2008 to 2,465 units, 9% less than
the same period of 2007. Homebuilding revenues for the three months ended March
31, 2008 totaled $869,869,000, 19% lower than the year earlier period. Income
before tax from the homebuilding segment totaled $61,932,000, a decrease of 52%
when compared to the first quarter of the previous year. Gross profit margins
decreased to 16.4% in the 2008 first quarter compared to 20.6% for the same
period in 2007. The decline in gross profit margins was due to continued pricing
pressure in most of our markets. Land deposit impairments of approximately
$6,600,000 negatively impacted gross profit margins by 76 basis points in the
current quarter. The Company's backlog of homes sold but not settled at the end
of the 2008 quarter decreased on a unit basis by 29% to 5,411 units from the
same period last year. On a dollar basis, backlog dropped to $1,915,519,000, a
decline of 37% when compared to the same period last year.
Mortgage Banking
Mortgage closed loan production of $523,538,000 for the three months ended March
31, 2008 was 27% lower than the same period last year. Operating income for the
mortgage banking operations during the first quarter of 2008 increased 11% to
$11,243,000, when compared to $10,095,000 reported for the same period of 2007.
Implementation of SFAS No. 157, Fair Value Measurements, positively impacted
operating income by $6,000,000 in the quarter primarily from including servicing
values in the fair value measurement on locked loan commitments, which were
partially offset by more aggressive mortgage pricing to the homebuyer.
Page 1 of 6
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.
Page 2 of 6
NVR, Inc.
Consolidated Statements of Income
(in thousands, except per share data)
(Unaudited)
Three Months Ended March 31,
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2008 2007
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Homebuilding:
Revenues $ 869,869 $ 1,075,110
Other income 6,399 6,965
Cost of sales (726,931) (853,410)
Selling, general and administrative (84,166) (97,406)
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Operating income 65,171 131,259
Interest expense (3,239) (3,322)
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Homebuilding income 61,932 127,937
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Mortgage Banking:
Mortgage banking fees 18,062 18,079
Interest income 810 1,307
Other income 159 184
General and administrative (7,654) (9,323)
Interest expense (134) (152)
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Mortgage banking income 11,243 10,095
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Income before taxes 73,175 138,032
Income tax expense (29,709) (53,211)
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Net income $ 43,466 $ 84,821
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Basic earnings per share $ 8.32 $ 14.98
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Diluted earnings per share $ 7.42 $ 12.96
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Basic average shares outstanding 5,224 5,663
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Diluted average shares outstanding 5,859 6,545
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Page 3 of 6
NVR, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share data)
March 31, December 31,
2008 2007
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(unaudited)
ASSETS
Homebuilding:
Cash and cash equivalents $ 766,597 $ 660,709
Receivables 8,622 10,855
Inventory:
Lots and housing units, covered under
sales agreements with customers 556,195 573,895
Unsold lots and housing units 69,760 105,838
Manufacturing materials and other 5,122 9,121
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631,077 688,854
Contract land deposits, net 175,106 188,528
Assets not owned, consolidated
per FIN 46R 162,371 180,206
Property, plant and equipment, net 31,170 32,911
Reorganization value in excess of amounts
allocable to identifiable assets, net 41,580 41,580
Goodwill and other indefinite and definite
life intangibles, net 11,748 11,782
Other assets 267,590 252,461
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2,095,861 2,067,886
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Mortgage Banking:
Cash and cash equivalents 1,061 3,500
Mortgage loans held for sale, net 92,115 107,338
Property and equipment, net 800 881
Reorganization value in excess of amounts
allocable to identifiable assets, net 7,347 7,347
Other assets 12,392 7,464
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113,715 126,530
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Total assets $ 2,209,576 $ 2,194,416
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(Continued)
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NVR, Inc.
Consolidated Balance Sheets (Continued)
(in thousands, except share and per share data)
March 31, December 31,
2008 2007
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(unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
Homebuilding:
Accounts payable $ 175,107 $ 219,048
Accrued expenses and other liabilities 254,140 251,475
Liabilities related to assets not owned,
consolidated per FIN 46R 150,325 164,369
Customer deposits 116,993 125,315
Other term debt 2,774 2,820
Senior notes 200,000 200,000
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899,339 963,027
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Mortgage Banking:
Accounts payable and other liabilities 17,631 18,551
Notes payable 68,228 83,463
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85,859 102,014
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Total liabilities 985,198 1,065,041
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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 March 31, 2008 and
December 31, 2007 206 206
Additional paid-in capital 687,913 663,631
Deferred compensation trust - 516,106 and
516,085 shares of NVR, Inc. common stock
for March 31, 2008 and December 31, 2007,
respectively (75,638) (75,636)
Deferred compensation liability 75,638 75,636
Retained earnings 3,573,461 3,529,995
Less treasury stock at cost - 15,318,151
and 15,455,086 shares for March 31,
2008 and December 31, 2007, respectively (3,037,202) (3,064,457)
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Total shareholders' equity 1,224,378 1,129,375
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Total liabilities and shareholders'
equity $ 2,209,576 $ 2,194,416
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Page 5 of 6
NVR, Inc.
Operating Activity
(unaudited)
(dollars in thousands)
Three Months Ended March 31,
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2008 2007
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Homebuilding data:
New orders (units)
Mid Atlantic (1) 1,292 1,921
North East (2) 280 417
Mid East (3) 717 1,030
South East (4) 442 549
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Total 2,731 3,917
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Average new order price $ 320.0 $ 372.3
Settlements (units)
Mid Atlantic (1) 1,241 1,352
North East (2) 245 249
Mid East (3) 617 572
South East (4) 362 527
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Total 2,465 2,700
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Average settlement price $ 352.6 $ 397.6
Backlog (units)
Mid Atlantic (1) 2,777 4,234
North East (2) 540 708
Mid East (3) 1,213 1,732
South East (4) 881 931
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Total 5,411 7,605
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Average backlog price $ 354.0 $ 397.0
Community count (average) 442 527
Lots controlled at end of period 64,000 86,000
Mortgage banking data:
Loan closings $ 523,538 $ 715,039
Capture rate 82% 86%
Common stock information:
Shares outstanding at end of period 5,274,489 5,671,984
Weighted average basic shares outstanding 5,224,000 5,663,000
Weighted average diluted shares
outstanding 5,859,000 6,545,000
Number of shares repurchased -- 126,000
Aggregate cost of shares repurchased -- $ 86,351
(1) Virginia, West Virginia, Maryland, and Delaware
(2) Eastern Pennsylvania and New Jersey
(3) Western Pennsylvania, Kentucky, New York and Ohio
(4) North Carolina, South Carolina and Tennessee
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