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): July 19, 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 dated July 19, 2004 |
Item 12. Results of Operations and Financial Condition.
On July 19, 2004, NVR, Inc. issued a press release reporting its financial results for the quarter ended June 30, 2004. A copy of this press release is furnished hereto as Exhibit 99.1.
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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: July 19, 2004 |
By: |
/s/ Paul C. Saville | ||
| Name: |
Paul C. Saville | |||
| Title: |
Executive Vice President, Chief Financial Officer and Treasurer | |||
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INDEX TO EXHIBITS
| Exhibit |
Exhibit Description | |
| 99.1 | Press release dated July 19, 2004 |
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Exhibit 99.1
NVR, INC. ANNOUNCES A 36% INCREASE IN EARNINGS PER SHARE FOR THE SECOND QUARTER OF 2004
| FOR IMMEDIATE RELEASE |
CONTACT: Dan Malzahn | |
| OFFICE: 703-761-2137 |
July 19, 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 second quarter ended June 30, 2004 exceeded the 2003 second quarter by 36% and net income increased 22%. Net income for the 2004 second quarter was $115,970,000, $14.82 per diluted share, compared to net income of $95,092,000, $10.90 per diluted share, for the same period of 2003. Total revenues increased 18% to $1,003,282,000 for the quarter when compared to $848,501,000 for the same period of 2003. The Company reported that new orders decreased 3% to 4,001 units for the second quarter of 2004 when compared to the second quarter of 2003. Backlog at the end of the period increased 6% to 8,490 units when compared to the same time last year. The dollar value of the backlog units totaled $3,064,726,000 at the end of the June 2004 quarter, a 20% increase from a year earlier.
Homebuilding revenues for the three months ended June 30, 2004, totaled $984,833,000, 19% higher than the year earlier period. Income before tax from the homebuilding segment totaled $182,157,000, an increase of 28% when compared to the second quarter of the previous year. Gross profit margins improved to 25.3% for the second quarter of 2004 when compared to 24.8% for the same quarter of 2003.
The Company reported that closed loan production from its mortgage banking segment increased 8% during the June 2004 quarter when compared to the second quarter of 2003. Operating income for the 2004 second quarter decreased to $11,127,000, a 21% decrease from the same period of 2003. This decrease is primarily attributed to a shift away from fixed rate mortgages to adjustable rate and brokered mortgages, both of which are generally less profitable than fixed rate mortgages.
For the six months ended June 30, 2004, total revenues were $1,881,843,000, 18% higher than the $1,592,075,000 reported for the same period of 2003. Net income for the six months ended June 30, 2004 was $216,587,000, an increase of 18% when compared to the six months ended June 30, 2003. Earnings per diluted share for the six months ended June 30, 2004 was $27.38, an increase of 30% from $20.99 per diluted share for the comparable period of 2003. The Company also stated that during the first six months of 2004 it had repurchased approximately 552,000 shares of its common stock.
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 1993, 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, 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, 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 and other factors over which NVR has little or no control. The Company has no obligation to update such forward-looking statements.
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NVR, Inc.
Condensed Consolidated Statements of Income
(in thousands, except per share data)
(unaudited)
| Three Months Ended June 30, |
||||||||
| 2004 |
2003 |
|||||||
| Homebuilding: |
||||||||
| Revenues |
$ | 984,833 | $ | 828,563 | ||||
| Other income |
681 | 592 | ||||||
| Cost of sales |
(735,978 | ) | (623,210 | ) | ||||
| Selling, general and administrative |
(64,341 | ) | (60,440 | ) | ||||
| Operating income |
185,195 | 145,505 | ||||||
| Interest expense |
(3,038 | ) | (3,725 | ) | ||||
| Homebuilding income |
182,157 | 141,780 | ||||||
| Mortgage Banking: |
||||||||
| Mortgage banking fees |
16,543 | 17,883 | ||||||
| Interest income |
949 | 1,203 | ||||||
| Other income |
276 | 260 | ||||||
| General and administrative |
(6,270 | ) | (4,859 | ) | ||||
| Interest expense |
(371 | ) | (378 | ) | ||||
| Mortgage banking income |
11,127 | 14,109 | ||||||
| Income before taxes |
193,284 | 155,889 | ||||||
| Income tax expense |
(77,314 | ) | (60,797 | ) | ||||
| Net income |
$ | 115,970 | $ | 95,092 | ||||
| Basic earnings per share |
$ | 17.91 | $ | 13.35 | ||||
| Diluted earnings per share |
$ | 14.82 | $ | 10.90 | ||||
| Basic average shares outstanding |
6,475 | 7,124 | ||||||
| Diluted average shares outstanding |
7,825 | 8,725 | ||||||
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NVR, Inc.
Condensed Consolidated Statements of Income
(in thousands, except per share data)
(unaudited)
| Six Months Ended June 30, |
||||||||
| _ | 2004 |
2003 |
||||||
| Homebuilding: |
||||||||
| Revenues |
$ | 1,845,518 | $ | 1,551,938 | ||||
| Other income |
1,327 | 1,524 | ||||||
| Cost of sales |
(1,378,989 | ) | (1,162,647 | ) | ||||
| Selling, general and administrative |
(122,823 | ) | (111,399 | ) | ||||
| Operating income |
345,033 | 279,416 | ||||||
| Interest expense |
(5,953 | ) | (7,061 | ) | ||||
| Homebuilding income |
339,080 | 272,355 | ||||||
| Mortgage Banking: |
||||||||
| Mortgage banking fees |
32,651 | 35,639 | ||||||
| Interest income |
1,902 | 2,567 | ||||||
| Other income |
445 | 407 | ||||||
| General and administrative |
(12,482 | ) | (10,327 | ) | ||||
| Interest expense |
(617 | ) | (809 | ) | ||||
| Mortgage banking income |
21,899 | 27,477 | ||||||
| Income before taxes |
360,979 | 299,832 | ||||||
| Income tax expense |
(144,392 | ) | (116,934 | ) | ||||
| Net income |
$ | 216,587 | $ | 182,898 | ||||
| Basic earnings per share |
$ | 33.15 | $ | 25.76 | ||||
| Diluted earnings per share |
$ | 27.38 | $ | 20.99 | ||||
| Basic average shares outstanding |
6,533 | 7,101 | ||||||
| Diluted average shares outstanding |
7,911 | 8,713 | ||||||
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NVR, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except per share and share data)
| June 30, 2004 |
December 31, 2003 | |||||
| (unaudited) | ||||||
| ASSETS |
||||||
| Homebuilding: |
||||||
| Cash and cash equivalents |
$ | 137,977 | $ | 228,589 | ||
| Receivables |
22,795 | 9,550 | ||||
| Inventory: |
||||||
| Lots and housing units, covered under sales agreements with customers |
621,491 | 480,492 | ||||
| Unsold lots and housing units |
22,576 | 32,888 | ||||
| Manufacturing materials and other |
6,639 | 10,393 | ||||
| 650,706 | 523,773 | |||||
| Assets not owned, consolidated per FIN 46 |
65,232 | 12,807 | ||||
| Property, plant and equipment, net |
23,885 | 24,531 | ||||
| Reorganization value in excess of amounts allocable to identifiable assets, net |
41,580 | 41,580 | ||||
| Goodwill, net |
6,379 | 6,379 | ||||
| Contract land deposits |
305,916 | 284,432 | ||||
| Other assets |
111,115 | 117,575 | ||||
| 1,365,585 | 1,249,216 | |||||
| Mortgage Banking: |
||||||
| Cash and cash equivalents |
4,874 | 3,630 | ||||
| Mortgage loans held for sale, net |
113,652 | 96,772 | ||||
| Mortgage servicing rights, net |
170 | 181 | ||||
| Property and equipment, net |
1,021 | 875 | ||||
| Reorganization value in excess of amounts allocable to identifiable assets, net |
7,347 | 7,347 | ||||
| Other assets |
2,832 | 5,084 | ||||
| 129,896 | 113,889 | |||||
| Total assets |
$ | 1,495,481 | $ | 1,363,105 | ||
(Continued)
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NVR, Inc.
Condensed Consolidated Balance Sheets (Continued)
(in thousands, except per share and share data)
| June 30, 2004 |
December 31, 2003 |
|||||||
| (unaudited) | ||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
| Homebuilding: |
||||||||
| Accounts payable |
$ | 195,880 | $ | 185,913 | ||||
| Accrued expenses and other liabilities |
225,204 | 243,223 | ||||||
| Liabilities related to assets not owned, consolidated per FIN 46 |
41,353 | 12,071 | ||||||
| Customer deposits |
213,800 | 157,005 | ||||||
| Other term debt |
4,317 | 4,519 | ||||||
| Senior notes |
200,000 | 200,000 | ||||||
| 880,554 | 802,731 | |||||||
| Mortgage Banking: |
||||||||
| Accounts payable and other liabilities |
11,926 | 12,166 | ||||||
| Notes payable |
91,573 | 53,340 | ||||||
| 103,499 | 65,506 | |||||||
| Total liabilities |
984,053 | 868,237 | ||||||
| Commitments and contingencies |
||||||||
| Shareholders’ equity: |
||||||||
| Common stock, $0.01 par value; 60,000,000 shares authorized; 20,597,709 shares issued as of June 30, 2004 and December 31, 2003, respectively |
206 | 206 | ||||||
| Additional paid-in-capital |
364,122 | 335,346 | ||||||
| Deferred compensation trust – 492,118 and 510,118 shares as of June 30, 2004 and December 31, 2003, respectively, of NVR, Inc. common stock |
(63,877 | ) | (64,725 | ) | ||||
| Deferred compensation liability |
63,877 | 64,725 | ||||||
| Retained earnings |
1,604,452 | 1,387,865 | ||||||
| Less treasury stock at cost – 14,217,769 and 13,870,368 shares at June 30, 2004 and December 31, 2003, respectively |
(1,457,352 | ) | (1,228,549 | ) | ||||
| Total shareholders’ equity |
511,428 | 494,868 | ||||||
| Total liabilities and shareholders’ equity |
$ | 1,495,481 | $ | 1,363,105 | ||||
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NVR, Inc.
Operating Activity
(unaudited)
(dollars in thousands)
| Three Months Ended June 30, | ||||||
| 2004 |
2003 | |||||
| Homebuilding data: |
||||||
| New orders (units) |
||||||
| Washington |
1,174 | 1,195 | ||||
| Baltimore |
475 | 578 | ||||
| North (1) |
1,514 | 1,489 | ||||
| South (2) |
838 | 850 | ||||
| Total |
4,001 | 4,112 | ||||
| Average new order price |
$ | 360.2 | $ | 308.9 | ||
| Settlements (units) |
||||||
| Washington |
774 | 757 | ||||
| Baltimore |
447 | 394 | ||||
| North (1) |
1,217 | 1,096 | ||||
| South (2) |
572 | 606 | ||||
| Total |
3,010 | 2,853 | ||||
| Average settlement price |
$ | 326.0 | $ | 289.3 | ||
| Mortgage banking data: |
||||||
| Loan closings |
$ | 628,598 | $ | 579,657 | ||
| Common stock information: |
||||||
| Weighted average basic shares outstanding |
6,475,000 | 7,124,000 | ||||
| Weighted average diluted shares outstanding |
7,825,000 | 8,725,000 | ||||
| Number of shares repurchased |
294,289 | 6,008 | ||||
| Aggregate cost of shares repurchased |
$ | 131,920 | $ | 2,182 | ||
| (1) | Delaware, New Jersey, New York, Ohio and Pennsylvania |
| (2) | North Carolina, South Carolina, Tennessee and Richmond, VA |
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NVR, Inc.
Operating Activity
(unaudited)
(dollars in thousands)
| Six Months Ended June 30, | ||||||
| 2004 |
2003 | |||||
| Homebuilding data: |
||||||
| New orders (units) |
||||||
| Washington |
2,166 | 1,933 | ||||
| Baltimore |
906 | 979 | ||||
| North (1) |
2,776 | 2,625 | ||||
| South (2) |
1,471 | 1,482 | ||||
| Total |
7,319 | 7,019 | ||||
| Average new order price |
$ | 352.7 | $ | 305.0 | ||
| Settlements (units) |
||||||
| Washington |
1,487 | 1,584 | ||||
| Baltimore |
894 | 758 | ||||
| North (1) |
2,289 | 1,974 | ||||
| South (2) |
1,049 | 1,043 | ||||
| Total |
5,719 | 5,359 | ||||
| Average settlement price |
$ | 321.8 | $ | 288.7 | ||
| Backlog (units) |
||||||
| Washington |
2,962 | 2,583 | ||||
| Baltimore |
1,069 | 1,164 | ||||
| North (1) |
2,993 | 2,846 | ||||
| South (2) |
1,466 | 1,424 | ||||
| Total |
8,490 | 8,017 | ||||
| Average backlog price |
$ | 361.0 | $ | 318.9 | ||
| Mortgage banking data: |
||||||
| Loan closings |
$ | 1,151,937 | $ | 1,094,554 | ||
| Common stock information: |
||||||
| Shares outstanding at end of period |
6,379,940 | 7,235,183 | ||||
| Weighted average basic shares outstanding |
6,533,000 | 7,101,000 | ||||
| Weighted average diluted shares outstanding |
7,911,000 | 8,713,000 | ||||
| Number of shares repurchased |
551,619 | 350,285 | ||||
| Aggregate cost of shares repurchased |
$ | 245,857 | $ | 115,452 | ||
| (1) | Delaware, New Jersey, New York, Ohio and Pennsylvania |
| (2) | North Carolina, South Carolina, Tennessee and Richmond, VA |
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