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 28, 2009
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))
|
1
|
Item
2.02
|
Results
of Operations and Financial
Condition
|
On January 29, 2009, NVR, Inc. (“NVR”)
issued a press release reporting its financial results for the quarter and year
to date periods ended December 31, 2008. A copy of this press release
is furnished herewith as Exhibit 99.1.
|
Item
5.02
|
Departure
of Directors or Principal Officers; Election of Directors; Appointment of
Principal Officers; Compensatory Arrangements of Certain
Officers.
|
Effective
February 4, 2009, Dwight C. Schar, NVR’s Executive Chairman, will relinquish the
title of Executive Officer of NVR, but will continue to serve as the Chairman of
the Board. Mr. Schar’s revised role continues the leadership
transition that separated the roles of Chairman and CEO to strengthen the
operating and governance structure of NVR. This change in executive
officer status was announced in the press release attached as Exhibit 99.1
hereto.
Item
9.01 Financial
Statements and Exhibits
|
(c)
Exhibits
|
||
|
Number
|
Description
|
|
|
99.1
|
Press
release dated January 29,
2009.
|
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, 2009
|
By:
|
/s/ Robert W.
Henley
|
|
Name:
|
Robert
W. Henley
|
|
|
Title:
|
Vice
President and
Controller
|
3
INDEX
TO EXHIBITS
|
Exhibit Number
|
Exhibit Description
|
|
|
99.1
|
Press
release dated January 29,
2009.
|
4
Exhibit
99.1
NVR,
INC. ANNOUNCES FULL YEAR AND FOURTH QUARTER RESULTS
|
FOR
IMMEDIATE RELEASE
|
Contact:
|
Dan
Malzahn
|
|
Office:
|
(703)
956-4204
|
January 29, 2009, Reston, VA—NVR,
Inc. (NYSE: NVR), one of the nation’s largest homebuilding and mortgage
banking companies, announced a net loss of $30,457,000 and diluted loss per
share of $5.54 for its fourth quarter ended December 31, 2008 compared to net
income of $67,274,000 and diluted earnings per share of $11.72 for the same
period of 2007. The fourth quarter 2008 results were negatively
impacted by asset impairments of approximately $121,500,000 compared to
$98,000,000 in the fourth quarter of 2007. These impairments lowered
fourth quarter 2008 net income by approximately $74,000,000 and lowered fourth
quarter 2007 net income by approximately $60,000,000. Consolidated revenues for
the fourth quarter of 2008 totaled $910,174,000, a 36% decrease from
$1,427,397,000 for the comparable 2007 quarter.
For the
year ended December 31, 2008, consolidated revenues were $3,693,039,000, 28%
lower than the $5,129,342,000 reported for the same period of
2007. Net income for the year ended December 31, 2008 was
$100,892,000, a decrease of 70% when compared to the year ended December 31,
2007. Diluted earnings per share for the year ended December 31, 2008
was $17.04, a decrease of 69% from $54.14 per diluted share for the comparable
period of 2007.
Homebuilding
New
orders in the fourth quarter of 2008 decreased 30% to 1,357 units, when compared
to 1,948 units in the fourth quarter of 2007. The cancellation rate
in the quarter ended December 31, 2008 was 30% compared to 32% in the fourth
quarter of 2007 and 24% in the third quarter of 2008. Settlements
decreased in the fourth quarter of 2008 to 2,776 units, 28% less than the same
period of 2007.
Homebuilding
revenues for the quarter ended December 31, 2008 totaled $899,535,000, 36% lower
than the year earlier period. Gross profit margins were 2.6% in the
2008 fourth quarter compared to 12.9% for the same period in
2007. Gross profit margins in the 2008 quarter were impacted by land
deposit impairments of approximately $109,800,000, compared to approximately
$98,000,000 in the year ago period. Gross profit margins excluding
these land deposit impairments were 14.8% in the 2008 fourth quarter compared to
19.9% for the same period in 2007. Loss before tax from the
homebuilding segment totaled $56,978,000 in the 2008 fourth quarter compared to
income before tax of $92,681,000 in the 2007 fourth quarter. The
homebuilding results for the 2008 fourth quarter included goodwill impairments
of $11,686,000 and approximately $11,000,000 of expenses related to employee
severance and office closure costs as the Company continues to down-size its
operations in response to market conditions. Operating unit activity
and financial performance continue to be negatively impacted by high levels of
new and existing home inventories, affordability issues, a tight lending
environment and low homebuyer confidence.
New
orders for 2008 totaled 8,760 units, a 29% decrease when compared to the 12,270
units reported for 2007. Home settlements for 2008 decreased 21% to
10,741 units when compared to 13,513 units closed in
2007. Homebuilding revenues
for 2008 totaled $3,638,702,000, 28% lower than 2007. Gross profit
margins decreased to 12.6% in 2008 from 16.3% in 2007. Pre-tax
homebuilding income decreased to $140,751,000 for the 2008 fiscal year, a
decrease of 71% from the prior year. The number of homes in backlog
at the end of 2008 was 3,164 units, 39% lower than the 5,145 units in backlog at
the end of 2007. The dollar volume in backlog decreased 48% to
$1,002,795,000 at December 31, 2008, when compared to the same time last
year.
Mortgage
Banking
Mortgage
closed loan production of $623,623,000 for the quarter ended December 31, 2008
was 28% lower than the same period last year. Operating income for
the mortgage banking operations during the fourth quarter of 2008 decreased 72%
to $4,234,000, when compared to $15,301,000 reported for the same period of
2007. Operating income in the current quarter was negatively impacted by a
$2,984,000 decrease in unrealized income from the fair value measurements
required under SFAS No. 157, Fair Value Measurement, and more competitive
mortgage pricing.
Mortgage
production for the 2008 full year decreased 27% to
$2,351,341,000. Pre-tax income from the mortgage banking segment
decreased for the 2008 fiscal year to $26,704,000, a 50% decrease from the
$53,929,000 reported for 2007.
Other
News
The
Company also reported that effective February 4, 2009, Mr. Dwight C. Schar, the
Company’s Executive Chairman, will relinquish the title of Executive Officer but
will continue to serve as Chairman of the Board. Mr. Schar’s revised
role continues the leadership transition that separated the roles of Chairman
and CEO to strengthen the operating and governance structure of the
Company.
The
Company repurchased $36,680,000 of the Company’s 5% Senior Notes due 2010 on the
open market.
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 Operations
(in
thousands, except per share data)
|
Three Months Ended December 31,
|
Twelve Months Ended December 31,
|
|||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||
|
Homebuilding:
|
||||||||||||||||
|
Revenues
|
$ | 899,535 | $ | 1,405,466 | $ | 3,638,702 | $ | 5,048,187 | ||||||||
|
Other
income
|
2,030 | 4,693 | 16,386 | 21,118 | ||||||||||||
|
Cost
of sales
|
(875,779 | ) | (1,224,313 | ) | (3,181,010 | ) | (4,227,059 | ) | ||||||||
|
Selling,
general and administrative
|
(67,906 | ) | (90,010 | ) | (308,739 | ) | (343,520 | ) | ||||||||
|
Operating
(loss) income
|
(42,120 | ) | 95,836 | 165,339 | 498,726 | |||||||||||
|
Interest
expense
|
(3,172 | ) | (3,155 | ) | (12,902 | ) | (13,150 | ) | ||||||||
|
Goodwill
and intangible asset impairment
|
(11,686 | ) | - | (11,686 | ) | - | ||||||||||
|
Homebuilding
(loss) income
|
(56,978 | ) | 92,681 | 140,751 | 485,576 | |||||||||||
|
Mortgage
Banking:
|
||||||||||||||||
|
Mortgage
banking fees
|
10,639 | 21,931 | 54,337 | 81,155 | ||||||||||||
|
Interest
income
|
1,347 | 1,485 | 3,955 | 4,900 | ||||||||||||
|
Other
income
|
214 | 280 | 745 | 1,060 | ||||||||||||
|
General
and administrative
|
(7,756 | ) | (8,227 | ) | (31,579 | ) | (32,505 | ) | ||||||||
|
Interest
expense
|
(210 | ) | (168 | ) | (754 | ) | (681 | ) | ||||||||
|
Mortgage
banking income
|
4,234 | 15,301 | 26,704 | 53,929 | ||||||||||||
|
(Loss)
income before taxes
|
(52,744 | ) | 107,982 | 167,455 | 539,505 | |||||||||||
|
Income
tax benefit (expense)
|
22,287 | (40,708 | ) | (66,563 | ) | (205,550 | ) | |||||||||
|
Net
(loss) income
|
$ | (30,457 | ) | $ | 67,274 | $ | 100,892 | $ | 333,955 | |||||||
|
Basic
(loss) earnings per share
|
$ | (5.54 | ) | $ | 13.10 | $ | 18.76 | $ | 61.61 | |||||||
|
Diluted
(loss) earnings per share
|
$ | (5.54 | ) | $ | 11.72 | $ | 17.04 | $ | 54.14 | |||||||
|
Basic
average shares outstanding
|
5,497 | 5,136 | 5,379 | 5,420 | ||||||||||||
|
Diluted
average shares outstanding
|
5,497 | 5,741 | 5,920 | 6,168 | ||||||||||||
3
NVR,
Inc.
Consolidated
Balance Sheets
(in
thousands, except share and per share data)
|
December 31, 2008
|
December 31, 2007
|
|||||||
|
ASSETS
|
||||||||
|
Homebuilding:
|
||||||||
|
Cash
and cash equivalents
|
$ | 1,146,426 | $ | 660,709 | ||||
|
Receivables
|
11,594 | 10,855 | ||||||
|
Inventory:
|
||||||||
|
Lots
and housing units, covered under sales agreements with
customers
|
335,238 | 573,895 | ||||||
|
Unsold
lots and housing units
|
57,639 | 105,838 | ||||||
|
Manufacturing
materials and other
|
7,693 | 9,121 | ||||||
| 400,570 | 688,854 | |||||||
|
Contract
land deposits, net
|
29,073 | 188,528 | ||||||
|
Assets
not owned, consolidated per FIN 46R
|
114,930 | 180,206 | ||||||
|
Property,
plant and equipment, net
|
25,658 | 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
|
- | 11,782 | ||||||
|
Other
assets
|
242,626 | 252,461 | ||||||
| 2,012,457 | 2,067,886 | |||||||
|
Mortgage
Banking:
|
||||||||
|
Cash
and cash equivalents
|
1,217 | 3,500 | ||||||
|
Mortgage
loans held for sale, net
|
72,488 | 107,338 | ||||||
|
Property
and equipment, net
|
759 | 881 | ||||||
|
Reorganization
value in excess of amounts allocable to identifiable assets,
net
|
7,347 | 7,347 | ||||||
|
Other
assets
|
8,968 | 7,464 | ||||||
| 90,779 | 126,530 | |||||||
|
Total
assets
|
$ | 2,103,236 | $ | 2,194,416 | ||||
(Continued)
4
NVR,
Inc.
Consolidated
Balance Sheets (Continued)
(in
thousands, except share and per share data)
|
December 31, 2008
|
December 31, 2007
|
|||||||
|
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
||||||||
|
Homebuilding:
|
||||||||
|
Accounts
payable
|
$ | 137,285 | $ | 219,048 | ||||
|
Accrued
expenses and other liabilities
|
194,869 | 251,475 | ||||||
|
Liabilities
related to assets not owned, consolidated per FIN 46R
|
109,439 | 164,369 | ||||||
|
Customer
deposits
|
59,623 | 125,315 | ||||||
|
Other
term debt
|
2,530 | 2,820 | ||||||
|
Senior
notes
|
163,320 | 200,000 | ||||||
| 667,066 | 963,027 | |||||||
|
Mortgage
Banking:
|
||||||||
|
Accounts
payable and other liabilities
|
17,842 | 18,551 | ||||||
|
Notes
payable
|
44,539 | 83,463 | ||||||
| 62,381 | 102,014 | |||||||
|
Total
liabilities
|
729,447 | 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 December 31, 2008 and 2007
respectively
|
206 | 206 | ||||||
|
Additional
paid-in capital
|
722,265 | 663,631 | ||||||
|
Deferred compensation trust –
514,470 and 516,085 shares of NVR, Inc. common stock for December
31, 2008 and 2007, respectively
|
(74,978 | ) | (75,636 | ) | ||||
|
Deferred
compensation liability
|
74,978 | 75,636 | ||||||
|
Retained
earnings
|
3,630,887 | 3,529,995 | ||||||
|
Less
treasury stock at cost – 15,028,335 and 15,455,086 shares for December 31,
2008 and 2007, respectively
|
(2,979,569 | ) | (3,064,457 | ) | ||||
|
Total
shareholders’ equity
|
1,373,789 | 1,129,375 | ||||||
|
Total
liabilities and shareholders’ equity
|
$ | 2,103,236 | $ | 2,194,416 | ||||
5
NVR,
Inc.
Operating
Activity
(unaudited)
(dollars
in thousands)
|
Three Months Ended December 31,
|
Twelve Months Ended December 31,
|
|||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||
|
Homebuilding
data:
|
||||||||||||||||
|
New
orders (units):
|
||||||||||||||||
|
Mid
Atlantic (1)
|
692 | 910 | 4,290 | 5,695 | ||||||||||||
|
North
East (2)
|
159 | 190 | 884 | 1,212 | ||||||||||||
|
Mid
East (3)
|
360 | 540 | 2,380 | 3,160 | ||||||||||||
|
South
East (4)
|
146 | 308 | 1,206 | 2,203 | ||||||||||||
|
Total
|
1,357 | 1,948 | 8,760 | 12,270 | ||||||||||||
|
Average
new order price
|
$ | 296.0 | $ | 318.4 | $ | 311.3 | $ | 352.0 | ||||||||
|
Settlements
(units):
|
||||||||||||||||
|
Mid
Atlantic (1)
|
1,389 | 1,906 | 5,240 | 6,634 | ||||||||||||
|
North
East (2)
|
273 | 329 | 1,086 | 1,247 | ||||||||||||
|
Mid
East (3)
|
750 | 974 | 2,762 | 3,321 | ||||||||||||
|
South
East (4)
|
364 | 665 | 1,653 | 2,311 | ||||||||||||
|
Total
|
2,776 | 3,874 | 10,741 | 13,513 | ||||||||||||
|
Average
settlement price
|
$ | 323.6 | $ | 362.5 | $ | 338.4 | $ | 373.2 | ||||||||
|
Backlog
(units):
|
||||||||||||||||
|
Mid
Atlantic (1)
|
1,776 | 2,726 | ||||||||||||||
|
North
East (2)
|
303 | 505 | ||||||||||||||
|
Mid
East (3)
|
731 | 1,113 | ||||||||||||||
|
South
East (4)
|
354 | 801 | ||||||||||||||
|
Total
|
3,164 | 5,145 | ||||||||||||||
|
Average
backlog price
|
$ | 316.9 | $ | 371.3 | ||||||||||||
|
Community
count (average)
|
397 | 472 | 427 | 505 | ||||||||||||
|
Lots
controlled at end of year
|
45,000 | 67,600 | ||||||||||||||
|
Mortgage
banking data:
|
||||||||||||||||
|
Loan
closings
|
$ | 623,623 | $ | 867,106 | $ | 2,351,341 | $ | 3,225,324 | ||||||||
|
Capture
rate
|
89 | % | 83 | % | 85 | % | 85 | % | ||||||||
|
Common
stock information:
|
||||||||||||||||
|
Shares
outstanding at end of year
|
5,532,852 | 5,137,554 | ||||||||||||||
|
Number
of shares repurchased
|
- | - | - | 784,788 | ||||||||||||
|
Aggregate
cost of shares repurchased
|
- | - | - | $ | 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