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 21, 2014
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:
¨ 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 21, 2014, NVR, Inc. issued a press release reporting its financial results for the first quarter ended March 31, 2014. A copy of this press release is furnished herewith as Exhibit 99.1.
| Item 9.01 | Financial Statements and Exhibits |
| (c) | Exhibits |
| Number | Description |
| 99.1 | Press release dated April 21, 2014. |
| 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: April 21, 2014 | By: | /s/ Daniel D. Malzahn |
| Name:
Daniel D. Malzahn Title: Vice President, Chief Financial Officer and Treasurer | ||
| 3 |
INDEX TO EXHIBITS
| Exhibit Number | Exhibit Description |
| 99.1 | Press release dated April 21, 2014. |
| 4 |
NVR, Inc. Announces First Quarter Results
RESTON, Va., April 21, 2014 /PRNewswire/ -- NVR, Inc. (NYSE: NVR), one of the nation's largest homebuilding and mortgage banking companies, announced net income for its first quarter ended March 31, 2014 of $23,849,000 or $5.16 per diluted share. Net income and diluted earnings per share for its first quarter ended March 31, 2014 decreased 32% and 25%, respectively, when compared to the 2013 first quarter. Consolidated revenues for the first quarter of 2014 totaled $811,310,000, a 5% increase from $770,256,000 for the comparable 2013 quarter. Income tax expense for the quarter was negatively impacted by $6,879,000 due to the reversal of certain previously recognized tax deductions.
Homebuilding
New orders in the first quarter of 2014 decreased 5% to 3,325 units, when compared to 3,510 units in the first quarter of 2013. The cancellation rate in the first quarter of 2014 was 12% compared to 13% in the first quarter of 2013 and 14% in the fourth quarter of 2013. Settlements decreased in the first quarter of 2014 to 2,211 units, 3% lower than the first quarter of 2013. The Company's backlog of homes sold but not settled as of March 31, 2014 decreased on a unit basis by 3% to 6,059 units, but increased on a dollar basis by 4% to $2,270,474,000 when compared to March 31, 2013.
Homebuilding revenues for the three months ended March 31, 2014 totaled $799,187,000, 6% higher than the year earlier period. Gross profit margins increased to 18.0% in the 2014 first quarter compared to 16.9% for the same period in 2013. The increase in selling, general and administrative expenses was primarily due to higher personnel and selling expenses associated with the increase in the number of communities. Income before tax from the homebuilding segment totaled $48,716,000 in the first quarter of 2014, an increase of 11% when compared to the first quarter of 2013.
Mortgage Banking
Mortgage closed loan production of $472,933,000 for the three months ended March 31, 2014 was flat when compared to the first quarter ended March 31, 2013. Operating income for the mortgage banking operations during the first quarter of 2014 decreased 91% to $991,000, when compared to $11,161,000 reported for the first quarter of 2013. Operating income in the first quarter of 2014 was negatively impacted by a more competitive mortgage lending market, resulting in reduced loan profitability. In addition, general and administrative expenses were higher due to increased staffing in response to increased mortgage regulations and expected higher loan volume.
About NVR
NVR, Inc. operates in two business segments: homebuilding and mortgage banking. The homebuilding unit sells and builds homes under the Ryan Homes, NVHomes, Fox Ridge Homes and Heartland Homes trade names, and operates in twenty-seven metropolitan areas in fourteen states and Washington, D.C. For more information about NVR, Inc. and its brands, see www.nvrinc.com, www.ryanhomes.com, www.nvhomes.com, www.foxridgehomes.com and www.heartlandluxuryhomes.com.
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, as amended. 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 comparable terminology. All statements other than of historical facts are forward-looking statements. Forward-looking statements contained in this document may include those regarding market trends, NVR's financial position, business strategy, the outcome of pending litigation, investigations or similar contingencies, projected plans and objectives of management for future operations. 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 the following: 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; increased regulation in the mortgage banking industry; the ability of our mortgage banking subsidiary to sell loans it originates into the secondary market; 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 moratoriums; governmental regulation; fluctuation and volatility of stock and other financial markets; mortgage financing availability; and other factors over which NVR has little or no control. NVR undertakes no obligation to update such forward-looking statements except as required by law.
NVR, Inc. Consolidated Statements of Income (in thousands, except per share data) (Unaudited) | |||||
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| Three Months Ended March 31, | ||
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| 2014 |
| 2013 |
Homebuilding: |
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| Revenues | $ 799,187 |
| $ 750,868 | |
|
| Other income | 997 |
| 1,026 | |
|
| Cost of sales | (655,152) |
| (624,085) | |
|
| Selling, general and administrative | (90,632) |
| (78,413) | |
|
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| Operating income | 54,400 |
| 49,396 |
|
| Interest expense | (5,684) |
| (5,452) | |
|
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| Homebuilding income | 48,716 |
| 43,944 |
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Mortgage Banking: |
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| Mortgage banking fees | 12,123 |
| 19,388 | |
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| Interest income | 1,184 |
| 955 | |
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| Other income | 59 |
| 113 | |
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| General and administrative | (12,265) |
| (9,181) | |
|
| Interest expense | (110) |
| (114) | |
|
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| Mortgage banking income | 991 |
| 11,161 |
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Income before taxes | 49,707 |
| 55,105 | ||
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| Income tax expense | (25,858) |
| (20,064) |
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Net income | $ 23,849 |
| $ 35,041 | ||
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Basic earnings per share | $ 5.34 |
| $ 7.04 | ||
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Diluted earnings per share | $ 5.16 |
| $ 6.84 | ||
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Basic weighted average shares outstanding | 4,467 |
| 4,979 | ||
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Diluted weighted average shares outstanding | 4,620 |
| 5,122 | ||
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NVR, Inc. Consolidated Balance Sheets (in thousands, except share and per share data) | |||||||
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| March 31, 2014 |
| December 31, 2013 |
ASSETS |
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| (Unaudited) |
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Homebuilding: |
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| Cash and cash equivalents |
| $ 874,062 |
| $ 844,274 | ||
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| Receivables |
| 10,055 |
| 9,529 | ||
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| Inventory: |
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| Lots and housing units, covered under |
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| sales agreements with customers |
| 687,080 |
| 568,831 |
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| Unsold lots and housing units |
| 98,478 |
| 117,467 | |
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| Land under development |
| 46,083 |
| 41,328 | |
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| Building materials and other |
| 10,357 |
| 10,939 | |
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| 841,998 |
| 738,565 |
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| Assets related to consolidated variable interest entity | 6,588 |
| 7,268 | |||
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| Contract land deposits, net |
| 246,204 |
| 236,885 | ||
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| Property, plant and equipment, net |
| 34,321 |
| 32,599 | ||
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| Reorganization value in excess of amounts |
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| allocable to identifiable assets, net |
| 41,580 |
| 41,580 | |
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| Goodwill and finite-lived intangible assets, net |
| 6,401 |
| 6,747 | ||
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| Other assets |
| 311,684 |
| 307,933 | ||
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| 2,372,893 |
| 2,225,380 |
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Mortgage Banking: |
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| Cash and cash equivalents |
| 4,477 |
| 21,311 | ||
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| Mortgage loans held for sale, net |
| 123,833 |
| 210,641 | ||
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| Property and equipment, net |
| 4,999 |
| 4,699 | ||
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| Reorganization value in excess of amounts |
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| allocable to identifiable assets, net |
| 7,347 |
| 7,347 | |
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| Other assets |
| 11,204 |
| 16,770 | ||
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| 151,860 |
| 260,768 |
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| Total assets |
| $ 2,524,753 |
| $ 2,486,148 |
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LIABILITIES AND SHAREHOLDERS' EQUITY |
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Homebuilding: |
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| Accounts payable |
| $ 186,459 |
| $ 181,687 | |
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| Accrued expenses and other liabilities |
| 271,875 |
| 316,227 | |
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| Liabilities related to consolidated variable interest entity | 1,689 |
| 1,646 | ||
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| Non-recourse debt related to consolidated variable |
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| interest entity |
| 2,153 |
| 3,365 |
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| Customer deposits |
| 119,101 |
| 101,022 | |
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| Senior notes |
| 599,098 |
| 599,075 | |
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| 1,180,375 |
| 1,203,022 |
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Mortgage Banking: |
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| Accounts payable and other liabilities |
| 18,296 |
| 21,774 | |
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| 18,296 |
| 21,774 |
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| Total liabilities |
| 1,198,671 |
| 1,224,796 |
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Commitments and contingencies |
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Shareholders' equity: |
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| Common stock, $0.01 par value; 60,000,000 shares |
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| authorized; 20,555,330 shares issued as of |
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| both March 31, 2014 and December 31, 2013 |
| 206 |
| 206 |
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| Additional paid-in-capital |
| 1,259,410 |
| 1,212,050 | |
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| Deferred compensation trust – 109,256 shares of |
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| NVR, Inc. common stock as of both |
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| March 31, 2014 and December 31, 2013 |
| (17,741) |
| (17,741) |
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| Deferred compensation liability |
| 17,741 |
| 17,741 | |
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| Retained earnings |
| 4,629,406 |
| 4,605,557 | |
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| Less treasury stock at cost – 16,061,912 and |
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| 16,121,605 shares at March 31, 2014 |
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| and December 31, 2013, respectively |
| (4,562,940) |
| (4,556,461) |
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| Total shareholders' equity |
| 1,326,082 |
| 1,261,352 |
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| Total liabilities and shareholders' equity |
| $ 2,524,753 |
| $ 2,486,148 |
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NVR, Inc.
(dollars in thousands) (Unaudited) | |||||
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| Three Months Ended March 31, | ||
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| 2014 |
| 2013 |
Homebuilding data: |
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| New orders (units) |
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| Mid Atlantic (1) | 1,675 |
| 1,716 |
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| North East (2) | 298 |
| 293 |
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| Mid East (3) | 891 |
| 949 |
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| South East (4) | 461 |
| 552 |
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| Total | 3,325 |
| 3,510 |
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| Average new order price | $ 368.1 |
| $ 343.0 | |
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| Settlements (units) |
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| Mid Atlantic (1) | 1,124 |
| 1,138 |
|
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| North East (2) | 233 |
| 191 |
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| Mid East (3) | 478 |
| 593 |
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| South East (4) | 376 |
| 350 |
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| Total | 2,211 |
| 2,272 |
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| Average settlement price | $ 361.4 |
| $ 330.4 | |
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| Backlog (units) |
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| Mid Atlantic (1) | 3,261 |
| 3,261 |
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| North East (2) | 560 |
| 535 |
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| Mid East (3) | 1,445 |
| 1,508 |
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| South East (4) | 793 |
| 913 |
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| Total | 6,059 |
| 6,217 |
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| Average backlog price | $ 374.7 |
| $ 350.6 | |
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| Community count (average) | 481 |
| 435 | |
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| Lots controlled at end of period | 65,800 |
| 59,700 | |
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Mortgage banking data: |
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| Loan closings | $ 472,933 |
| $ 473,766 | |
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| Capture rate | 78% |
| 84% | |
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Common stock information: |
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| Shares outstanding at end of period | 4,493,418 |
| 4,996,884 | |
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| Number of shares repurchased | 32,377 |
| - | |
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| Aggregate cost of shares repurchased | $ 32,578 |
| $ - | |
(1) | Maryland, Virginia, West Virginia, Delaware and Washington, D.C. |
(2) | New Jersey and eastern Pennsylvania |
(3) | New York, Ohio, western Pennsylvania, Indiana and Illinois |
(4) | North Carolina, South Carolina, Tennessee and Florida |
CONTACT: Curt McKay, Office: (703) 956-4058