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 27, 2004
NVR, Inc.
(Exact name of registrant as specified in its charter)
| Virginia | 1-12378 | 54-1394360 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (I.R.S. Employer Identification Number) |
7601 Lewinsville Road, Suite 300, McLean, Virginia 22102
(Address of principal executive offices) (Zip code)
Registrant’s telephone number, including area code: 703-761-2000
(Former name or former address, if changed since last report)
Item 7(c). Exhibits
| Exhibit Number |
Exhibit Description | |
| 99.1 | Press release issued January 27, 2004 |
Item 12. Results of Operations and Financial Condition.
On January 27, 2004, NVR, Inc. issued a press release reporting its financial results for the quarter and year ended December 31, 2003. A copy of this press release is attached hereto as Exhibit 99.1.
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 27, 2004 | By: | \s\ Paul C. Saville | ||||||
| Name: | Paul C. Saville | |||||||
| Title: | Executive Vice President, Chief Financial Officer and Treasurer | |||||||
3
INDEX TO EXHIBITS
| Exhibit |
Exhibit Description |
Page | ||
| 99.1 | Press release issued January 27, 2004 |
5 |
4
Exhibit 99.1
NVR FOURTH QUARTER EARNINGS PER SHARE UP 67%
| FOR IMMEDIATE RELEASE |
Contact: | Paul Columbus | ||||
| Office: | 703-761-2414 |
January 27, 2004, McLean, VA—NVR, Inc. (AMEX: NVR), one of the nation’s largest homebuilding and mortgage banking companies, today announced that diluted earnings per share for its fourth quarter ended December 31, 2003 increased 67% and net income increased 61% when compared to the 2002 fourth quarter. Net income for the 2003 quarter was $127,490,000, $14.91 per diluted share, compared to net income of $78,947,000, $8.91 per diluted share, for the same period of 2002. Consolidated revenues for the last three months of 2003 totaled $1,114,717,000, a 41% increase from $788,345,000 for the comparable 2002 quarter.
Net income for the 2003 fiscal year was $419,791,000, $48.39 per diluted share, compared to net income of $331,470,000, $36.05 per diluted share for 2002, a 27% increase in net income and a 34% increase in earnings per share. Consolidated revenues for 2003 totaled $3,687,172,000, an 18% increase from the $3,136,274,000 for 2002.
Homebuilding
New orders for the fourth quarter of 2003 increased 1% to 3,072 units, when compared to 3,042 units for the fourth quarter of 2002. Settlements increased in the fourth quarter of 2003 to 3,502 units, 24% more than the same period of 2002. Income before tax from the homebuilding segment totaled $196,654,000, an increase of 68% when compared to the fourth quarter of the previous year. Gross profit margins improved to 24.0% in the 2003 fourth quarter compared to 23.2% for the same period in 2002.
New orders for 2003 totaled 12,583 units, a 3% increase over the 12,167 units reported for 2002. Home settlements for 2003 increased 6% to 12,050 units when compared to 11,368 units closed in 2002. Pre-tax homebuilding income rose to $638,418,000 for the 2003 fiscal year, an increase of 30% over the prior year. The number of homes in backlog at the end of 2003, 6,890 units, was 8% higher than the 6,357 units in backlog at the end of 2002. The dollar volume in backlog increased 18% to $2,323,703,000 at December 31, 2003, when compared to the same time last year. Gross profit margins increased to 24.7% in 2003 from 23.7% in 2002.
Mortgage Banking
Operating income contributed by the mortgage banking operations during the fourth quarter of 2003 increased 27% to $14,894,000, when compared to $11,688,000 reported for the same period of 2002. Mortgage production of $650,676,000 for the three months ended December 31, 2003 was 16% higher than the same period last year.
Operating income from the mortgage banking segment improved for the 2003 fiscal year to $57,754,000, a 24% increase from the $46,615,000 reported for 2002. At the same time, mortgage production increased 10% to $2,369,867,000.
Outlook
The Company expects net income for the first quarter of 2004 to increase approximately 3% over the first quarter of 2003. If housing activity remains at current levels during 2004, the Company expects net income for the full year to exceed 2003 results by approximately 15%.
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. All statements other than of historical facts included herein, including those regarding market trends, the Company’s financial position, business strategy, projected plans and objectives of management for future operations, mortgage banking operating income, new order trends, home settlement activity, average home prices, gross profit margins and other profitability measures, net income and earnings per share 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 the Company 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 conditions (on both a national and regional level), interest rate changes, access to suitable financing, competition, the availability and cost of land and other raw materials used by the Company in its homebuilding operations, shortages of labor, weather related slow downs, building moratoria, governmental regulation, the ability of the Company to integrate any acquired business, certain conditions in financial markets and other factors over which the Company has little or no control. The Company has no obligation to update such forward-looking statements.
NVR, Inc.
Consolidated Statements of Income
(in thousands, except per share data)
| Three Months Ended December 31, 2003 |
Three Months Ended December 31, 2002 |
|||||||
| Homebuilding: |
||||||||
| Revenues |
$ | 1,092,131 | $ | 768,735 | ||||
| Other income |
863 | 628 | ||||||
| Cost of sales |
(829,707 | ) | (590,441 | ) | ||||
| Selling, general and administrative |
(63,565 | ) | (58,253 | ) | ||||
| Operating income |
199,722 | 120,669 | ||||||
| Interest expense |
(3,068 | ) | (3,343 | ) | ||||
| Homebuilding income |
196,654 | 117,326 | ||||||
| Mortgage Banking: |
||||||||
| Mortgage banking fees |
20,164 | 17,264 | ||||||
| Interest income |
1,238 | 1,522 | ||||||
| Other income |
321 | 196 | ||||||
| General and administrative |
(6,627 | ) | (6,832 | ) | ||||
| Interest expense |
(202 | ) | (462 | ) | ||||
| Operating income |
14,894 | 11,688 | ||||||
| Total segment income |
211,548 | 129,014 | ||||||
| Income tax expense |
(84,058 | ) | (50,067 | ) | ||||
| Net income |
$ | 127,490 | $ | 78,947 | ||||
| Basic earnings per share: |
$ | 18.28 | $ | 11.17 | ||||
| Diluted earnings per share: |
$ | 14.91 | $ | 8.91 | ||||
| Basic average shares outstanding: |
6,973 | 7,069 | ||||||
| Diluted average shares outstanding: |
8,551 | 8,857 | ||||||
NVR, Inc.
Consolidated Statements of Income
(in thousands, except per share data)
| Year Ended December 31, 2003 |
Year Ended December 31, 2002 |
|||||||
| Homebuilding: |
||||||||
| Revenues |
$ | 3,600,917 | $ | 3,060,671 | ||||
| Other income |
3,385 | 3,307 | ||||||
| Cost of sales |
(2,711,861 | ) | (2,335,369 | ) | ||||
| Selling, general and administrative |
(231,966 | ) | (226,207 | ) | ||||
| Operating income |
660,475 | 502,402 | ||||||
| Loss from extinguishment of 8% Senior Notes due 2005 |
(8,503 | ) | — | |||||
| Interest expense |
(13,554 | ) | (12,994 | ) | ||||
| Homebuilding income |
638,418 | 489,408 | ||||||
| Mortgage Banking: |
||||||||
| Mortgage banking fees |
76,647 | 65,454 | ||||||
| Interest income |
5,198 | 6,184 | ||||||
| Other income |
1,025 | 658 | ||||||
| General and administrative |
(23,823 | ) | (23,811 | ) | ||||
| Interest expense |
(1,293 | ) | (1,870 | ) | ||||
| Operating income |
57,754 | 46,615 | ||||||
| Total segment income |
696,172 | 536,023 | ||||||
| Income tax expense |
(276,381 | ) | (204,553 | ) | ||||
| Net income |
$ | 419,791 | $ | 331,470 | ||||
| Basic earnings per share: |
$ | 59.28 | $ | 45.54 | ||||
| Diluted earnings per share: |
$ | 48.39 | $ | 36.05 | ||||
| Basic average shares outstanding: |
7,082 | 7,278 | ||||||
| Diluted average shares outstanding: |
8,674 | 9,194 | ||||||
NVR, Inc.
Consolidated Balance Sheets
(dollars in thousands, except per share data)
| December 31, | ||||||
| 2003 |
2002 | |||||
| ASSETS |
||||||
| Homebuilding: |
||||||
| Cash and cash equivalents |
$ | 228,589 | $ | 139,796 | ||
| Receivables |
9,550 | 10,807 | ||||
| Inventory: |
||||||
| Lots and housing units, covered under sales agreements with customers |
480,492 | 400,008 | ||||
| Unsold lots and housing units |
32,888 | 25,558 | ||||
| Manufacturing materials and other |
10,393 | 11,108 | ||||
| Inventory not owned, consolidated per FIN 46 |
12,807 | — | ||||
| 536,580 | 436,674 | |||||
| Property, plant and equipment, net |
24,531 | 22,126 | ||||
| Reorganization value in excess of amounts allocable to identifiable assets, net |
41,580 | 41,580 | ||||
| Goodwill, net |
6,379 | 6,379 | ||||
| Contract land deposits |
284,432 | 231,229 | ||||
| Other assets |
117,575 | 110,007 | ||||
| 1,249,216 | 998,598 | |||||
| Mortgage Banking: |
||||||
| Cash and cash equivalents |
3,630 | 3,049 | ||||
| Mortgage loans held for sale, net |
96,772 | 163,410 | ||||
| Mortgage servicing rights, net |
181 | 5,611 | ||||
| Property and equipment, net |
875 | 941 | ||||
| Reorganization value in excess of amounts allocable to identifiable assets, net |
7,347 | 7,347 | ||||
| Other assets |
5,084 | 3,332 | ||||
| 113,889 | 183,690 | |||||
| Total assets |
$ | 1,363,105 | $ | 1,182,288 | ||
(Continued)
NVR, Inc.
Consolidated Balance Sheets (Continued)
(dollars in thousands, except per share data)
| December 31, |
||||||||
| 2003 |
2002 |
|||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
| Homebuilding: |
||||||||
| Accounts payable |
$ | 185,913 | $ | 145,209 | ||||
| Accrued expenses and other liabilities |
243,223 | 240,018 | ||||||
| Liabilities related to inventory not owned, consolidated per FIN 46 |
12,071 | — | ||||||
| Customer deposits |
157,005 | 118,174 | ||||||
| Other term debt |
4,519 | 4,903 | ||||||
| Senior notes |
200,000 | 115,000 | ||||||
| 802,731 | 623,304 | |||||||
| Mortgage Banking: |
||||||||
| Accounts payable and other liabilities |
12,166 | 16,482 | ||||||
| Notes payable |
53,340 | 139,257 | ||||||
| 65,506 | 155,739 | |||||||
| Total liabilities |
868,237 | 779,043 | ||||||
| Commitments and contingencies |
||||||||
| Shareholders’ equity: |
||||||||
| Common stock, $0.01 par value; 60,000,000 shares authorized; 20,597,709 and 20,602,921 shares issued for 2003 and 2002, respectively |
206 | 206 | ||||||
| Additional paid-in-capital |
335,346 | 262,867 | ||||||
| Deferred compensation trust— 510,118 and 428,698 shares of NVR, Inc. common stock at December 31, 2003 and 2002, respectively |
(64,725 | ) | (35,647 | ) | ||||
| Deferred compensation liability |
64,725 | 35,647 | ||||||
| Retained earnings |
1,387,865 | 968,074 | ||||||
| Less treasury stock at cost – 13,870,368 and 13,580,531 shares at December 31, 2003 and 2002, respectively |
(1,228,549 | ) | (827,902 | ) | ||||
| Total shareholders’ equity |
494,868 | 403,245 | ||||||
| Total liabilities and shareholders’ equity |
$ | 1,363,105 | $ | 1,182,288 | ||||
NVR, Inc.
Operating Activity
(unaudited)
| Three Months Ended December 31, |
Year Ended December 31, | |||||||||||
| 2003 |
2002 |
2003 |
2002 | |||||||||
| Homebuilding: |
||||||||||||
| New orders (units) |
3,072 | 3,042 | 12,583 | 12,167 | ||||||||
| New orders ($000’s) |
$ | 1,011,880 | $ | 892,410 | $ | 3,950,413 | $ | 3,501,793 | ||||
| Settlements (units) |
3,502 | 2,819 | 12,050 | 11,368 | ||||||||
| Backlog (units) |
6,890 | 6,357 | ||||||||||
| Backlog ($000’s) |
$ | 2,323,703 | $ | 1,962,115 | ||||||||
| Mortgage Banking: |
||||||||||||
| Mortgage closings ($000’s) |
$ | 650,676 | $ | 558,654 | $ | 2,369,867 | $ | 2,164,017 | ||||
| Common stock information: |
||||||||||||
| Shares outstanding at end of period |
6,727,341 | 7,022,390 | ||||||||||
| Weighted average shares outstanding |
6,973,000 | 7,069,000 | 7,082,000 | 7,278,000 | ||||||||
| Diluted shares outstanding |
8,551,000 | 8,857,000 | 8,674,000 | 9,194,000 | ||||||||