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
21, 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
October 21, 2008, NVR, Inc. issued a press release reporting its financial
results for the quarter and year to date periods ended September 30, 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 |
| 99.1 |
Press
release dated October 21,
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: October 21, 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 October 21, 2008.
|
4
Exhibit
99.1
NVR,
INC. ANNOUNCES THIRD QUARTER RESULTS
| FOR IMMEDIATE RELEASE | Contact: | Dan Malzahn |
| Office: | (703) 956-4204 | |
October
21, 2008, Reston, VA—NVR, Inc. (NYSE: NVR),
one of
the nation’s largest homebuilding and mortgage banking companies, announced that
diluted earnings per share and net income for its third quarter ended September
30, 2008 decreased 60% when compared to the 2007 third quarter. Net income
for
the 2008 third quarter was $36,551,000, $6.12 per diluted share, compared to
net
income of $91,113,000, $15.26 per diluted share, for the same period of 2007.
Consolidated revenues for the third quarter of 2008 totaled $939,211,000, a
27%
decrease from $1,292,088,000 for the comparable 2007 quarter.
For
the
nine months ended September 30, 2008, consolidated revenues were $2,782,865,000,
25% lower than the $3,701,945,000 reported for the same period of 2007. Net
income for the nine months ended September 30, 2008 was $131,349,000, a decrease
of 51% when compared to the nine months ended September 30, 2007. Diluted
earnings per share for the nine months ended September 30, 2008 was $22.21,
a
decrease of 47% from $42.25 per diluted share for the comparable period of
2007.
Homebuilding
New
orders in the third quarter of 2008 decreased 25% to 2,002 units, when compared
to 2,660 units in the third quarter of 2007. The cancellation rate in the
quarter ended September 30, 2008 was 24% compared to 27% in the third quarter
of
2007 and 19% in the second quarter of 2008. Settlements decreased in the
third
quarter of 2008 to 2,750 units, 21% less than the same period of 2007. The
Company’s backlog of homes sold but not settled at the end of the 2008 quarter
decreased on a unit basis by 35% to 4,583 units and 44% on a dollar basis
to
$1,499,830,000 when compared to the same period last year.
Homebuilding
revenues for the three months ended September 30, 2008 totaled $928,265,000,
27%
lower than the year earlier period. Gross profit margins decreased to 13.2%
in
the 2008 third quarter compared to 14.4% for the same period in 2007. Gross
profit margins were impacted by land deposit impairments of approximately
$43,000,000, 461 basis points of revenue, in the 2008 third quarter, and
approximately $97,000,000, 760 basis points of revenue, in the year ago period.
Gross profit margins excluding the land deposit impairments were 17.8% in
the
2008 third quarter compared to 22.0% for the same period in 2007. Income
before
tax from the homebuilding segment totaled $56,535,000 in the 2008 third quarter,
a decrease of 56% when compared to the third quarter of the previous year.
Operating unit activity and financial performance are being negatively impacted
by high levels of new and existing home inventories, affordability issues,
a
tight mortgage lending environment and declining homebuyer confidence.
Mortgage
Banking
Mortgage
closed loan production of $610,313,000 for the three months ended September
30,
2008 was 23% lower than the same period last year. Operating income for the
mortgage banking operations during the third quarter of 2008 decreased 76%
to
$4,072,000, when compared to $16,814,000 reported for the same period of
2007.
Operating income in the current quarter was negatively impacted by a $4,100,000
decrease in unrealized income from the fair value measurements required under
SFAS No. 157, Fair Value Measurement, and more competitive mortgage pricing.
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, 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.
2
NVR,
Inc.
Consolidated
Statements of Income
(in
thousands, except per share data)
(Unaudited)
|
Three
Months Ended September 30,
|
Nine
Months Ended September 30,
|
||||||||||||
|
2008
|
2007
|
2008
|
2007
|
||||||||||
|
Homebuilding:
|
|||||||||||||
|
Revenues
|
$
|
928,265
|
$
|
1,270,471
|
$
|
2,739,167
|
$
|
3,642,721
|
|||||
|
Other
income
|
4,256
|
4,209
|
14,356
|
16,425
|
|||||||||
|
Cost
of sales
|
(805,931
|
)
|
(1,087,399
|
)
|
(2,305,231
|
)
|
(3,002,746
|
)
|
|||||
|
Selling,
general and administrative
|
(66,796
|
)
|
(54,906
|
)
|
(240,833
|
)
|
(253,510
|
)
|
|||||
|
Operating
income
|
59,794
|
132,375
|
207,459
|
402,890
|
|||||||||
|
Interest
expense
|
(3,259
|
)
|
(3,375
|
)
|
(9,730
|
)
|
(9,995
|
)
|
|||||
|
Homebuilding
income
|
56,535
|
129,000
|
197,729
|
392,895
|
|||||||||
|
Mortgage
Banking:
|
|||||||||||||
|
Mortgage
banking fees
|
10,946
|
21,617
|
43,698
|
59,224
|
|||||||||
|
Interest
income
|
929
|
1,078
|
2,608
|
3,415
|
|||||||||
|
Other
income
|
188
|
320
|
531
|
780
|
|||||||||
|
General
and administrative
|
(7,761
|
)
|
(6,001
|
)
|
(23,823
|
)
|
(24,278
|
)
|
|||||
|
Interest
expense
|
(230
|
)
|
(200
|
)
|
(544
|
)
|
(513
|
)
|
|||||
|
Mortgage
banking income
|
4,072
|
16,814
|
22,470
|
38,628
|
|||||||||
|
Income
before taxes
|
60,607
|
145,814
|
220,199
|
431,523
|
|||||||||
|
Income
tax expense
|
(24,056
|
)
|
(54,701
|
)
|
(88,850
|
)
|
(164,842
|
)
|
|||||
|
Net
income
|
$
|
36,551
|
$
|
91,113
|
$
|
131,349
|
$
|
266,681
|
|||||
|
Basic
earnings per share
|
$
|
6.72
|
$
|
17.25
|
$
|
24.60
|
$
|
48.35
|
|||||
|
Diluted
earnings per share
|
$
|
6.12
|
$
|
15.26
|
$
|
22.21
|
$
|
42.25
|
|||||
|
Basic
average shares outstanding
|
5,438
|
5,283
|
5,340
|
5,516
|
|||||||||
|
Diluted
average shares outstanding
|
5,968
|
5,969
|
5,915
|
6,312
|
|||||||||
3
NVR,
Inc.
Consolidated
Balance Sheets
(in
thousands, except share and per share data)
|
September
30, 2008
|
December
31, 2007
|
||||||
|
(unaudited)
|
|||||||
|
ASSETS
|
|||||||
|
Homebuilding:
|
|||||||
|
Cash
and cash equivalents
|
$
|
963,313
|
$
|
660,709
|
|||
|
Receivables
|
10,444
|
10,855
|
|||||
|
Inventory:
|
|||||||
|
Lots
and housing units, covered under
|
|||||||
|
sales
agreements with customers
|
536,895
|
573,895
|
|||||
|
Unsold
lots and housing units
|
67,570
|
105,838
|
|||||
|
Manufacturing
materials and other
|
6,555
|
9,121
|
|||||
|
611,020
|
688,854
|
||||||
|
Contract
land deposits
|
130,575
|
188,528
|
|||||
|
Assets
not owned, consolidated
|
|||||||
|
per
FIN 46R
|
127,074
|
180,206
|
|||||
|
Property,
plant and equipment, net
|
26,834
|
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
|
11,707
|
11,782
|
|||||
|
Other
assets
|
253,785
|
252,461
|
|||||
|
2,176,332
|
2,067,886
|
||||||
|
Mortgage
Banking:
|
|||||||
|
Cash
and cash equivalents
|
1,728
|
3,500
|
|||||
|
Mortgage
loans held for sale, net
|
113,839
|
107,338
|
|||||
|
Property and equipment, net
|
903
|
881
|
|||||
|
Reorganization
value in excess of amounts
|
|||||||
|
allocable
to identifiable assets, net
|
7,347
|
7,347
|
|||||
|
Other
assets
|
8,003
|
7,464
|
|||||
|
131,820
|
126,530
|
||||||
|
Total
assets
|
$
|
2,308,152
|
$
|
2,194,416
|
(Continued)
4
NVR,
Inc.
Consolidated
Balance Sheets (continued)
(in
thousands, except share and per share data)
|
September
30, 2008
|
December
31, 2007
|
||||||
|
(unaudited)
|
|||||||
|
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
|||||||
|
Homebuilding:
|
|||||||
|
Accounts
payable
|
$
|
181,403
|
$
|
219,048
|
|||
|
Accrued
expenses and other liabilities
|
235,564
|
251,475
|
|||||
|
Liabilities
related to assets not owned,
|
|||||||
|
consolidated
per FIN 46R
|
118,323
|
164,369
|
|||||
|
Customer
deposits
|
93,117
|
125,315
|
|||||
|
Other
term debt
|
2,630
|
2,820
|
|||||
|
Senior
notes
|
200,000
|
200,000
|
|||||
|
831,037
|
963,027
|
||||||
|
Mortgage
Banking:
|
|||||||
|
Accounts
payable and other liabilities
|
13,858
|
18,551
|
|||||
|
Notes
payable
|
90,782
|
83,463
|
|||||
|
104,640
|
102,014
|
||||||
|
Total
liabilities
|
935,677
|
1,065,041
|
|||||
|
Commitments
and contingencies
|
|||||||
|
Shareholders’
equity:
|
|||||||
|
Common
stock, $0.01 par value; 60,000,000
|
|||||||
|
shares
authorized; 20,561,187 and 20,592,640
|
|||||||
|
shares
issued for September 30, 2008 and
|
|||||||
|
December
31, 2007, respectively
|
206
|
206
|
|||||
|
Additional
paid-in capital
|
706,560
|
663,631
|
|||||
|
Deferred
compensation trust - 515,950 and
|
|||||||
|
516,085
shares of NVR, Inc. common stock for
|
|||||||
|
September
30, 2008 and December 31, 2007,
|
|||||||
|
respectively
|
(75,495
|
)
|
(75,636
|
)
|
|||
|
Deferred
compensation liability
|
75,495
|
75,636
|
|||||
|
Retained
earnings
|
3,661,344
|
3,529,995
|
|||||
|
Less
treasury stock at cost - 15,108,940 and
|
|||||||
|
15,455,086
shares for September 30, 2008 and
|
|||||||
|
December
31, 2007, respectively
|
(2,995,635
|
)
|
(3,064,457
|
)
|
|||
|
Total
shareholders’ equity
|
1,372,475
|
1,129,375
|
|||||
|
Total
liabilities and shareholders’ equity
|
$
|
2,308,152
|
$
|
2,194,416
|
5
NVR,
Inc.
Operating
Activity
(unaudited)
(dollars
in thousands)
|
Three
Months Ended September 30,
|
|
Nine
Months Ended September 30,
|
|
||||||||||
|
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|||||
|
Homebuilding
data:
|
|||||||||||||
|
New
orders (units):
|
|||||||||||||
|
Mid
Atlantic (1)
|
965
|
1,061
|
3,598
|
4,785
|
|||||||||
|
North
East (2)
|
205
|
260
|
725
|
1,022
|
|||||||||
|
Mid
East (3)
|
577
|
667
|
2,020
|
2,620
|
|||||||||
|
South
East (4)
|
255
|
672
|
1,060
|
1,895
|
|||||||||
|
Total
|
2,002
|
2,660
|
7,403
|
10,322
|
|||||||||
|
Average
new order price
|
$
|
302.9
|
$
|
330.1
|
$
|
314.1
|
$
|
358.4
|
|||||
|
Settlements
(units):
|
|||||||||||||
|
Mid
Atlantic (1)
|
1,266
|
1,656
|
3,851
|
4,728
|
|||||||||
|
North
East (2)
|
264
|
345
|
813
|
918
|
|||||||||
|
Mid
East (3)
|
756
|
936
|
2,012
|
2,347
|
|||||||||
|
South
East (4)
|
464
|
539
|
1,289
|
1,646
|
|||||||||
|
Total
|
2,750
|
3,476
|
7,965
|
9,639
|
|||||||||
|
Average
settlement price
|
$
|
337.1
|
$
|
365.1
|
$
|
343.5
|
$
|
377.5
|
|||||
|
Backlog
(units):
|
|||||||||||||
|
Mid
Atlantic (1)
|
2,473
|
3,722
|
|||||||||||
|
North
East (2)
|
417
|
644
|
|||||||||||
|
Mid
East (3)
|
1,121
|
1,547
|
|||||||||||
|
South
East (4)
|
572
|
1,158
|
|||||||||||
|
Total
|
4,583
|
7,071
|
|||||||||||
|
Average
backlog price
|
$
|
327.3
|
$
|
381.2
|
|||||||||
|
Community
count (average)
|
426
|
506
|
437
|
517
|
|||||||||
|
Lots
controlled at end of period
|
58,300
|
79,700
|
|||||||||||
|
Mortgage
banking data:
|
|||||||||||||
|
Loan
closings
|
$
|
610,313
|
$
|
793,749
|
$
|
1,727,718
|
$
|
2,358,218
|
|||||
|
Capture
rate
|
86
|
%
|
84
|
%
|
84
|
%
|
85
|
%
|
|||||
|
Common
stock information:
|
|||||||||||||
|
Shares
outstanding at end of period
|
5,452,247
|
5,135,600
|
|||||||||||
|
Number
of shares repurchased
|
-
|
479,088
|
-
|
784,788
|
|||||||||
|
Aggregate
cost of shares repurchased
|
-
|
$
|
297,859
|
-
|
$
|
507,472
|
|||||||
| (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
|
6