| UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 |
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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 18, 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) |
(IRS Employer Identification No.) |
| 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) |
Check the appropriate box below if the Form 8-K filing 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 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition
On October 18, 2004, NVR, Inc. issued a press release reporting its financial results for the quarter and year-to-date periods ended September 30, 2004. 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 18, 2004. |
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 18, 2004 |
By: |
/s/ Paul C. Saville | ||
| Name: |
Paul C. Saville | |||
| Title: |
Executive Vice President and Chief Financial Officer | |||
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INDEX TO EXHIBITS
| Exhibit Number |
Exhibit Description | |
| 99.1 | Press release dated October 18, 2004. |
4
Exhibit 99.1
NVR, INC. ANNOUNCES A 52% INCREASE IN EARNINGS PER SHARE AND A 9% INCREASE IN NEW ORDERS FOR THE THIRD QUARTER OF 2004
| FOR IMMEDIATE RELEASE | CONTACT: Dan Malzahn | |
| OFFICE: 703-761-2137 |
October 18, 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 third quarter ended September 30, 2004 exceeded the 2003 third quarter by 52% and net income increased 35%. Net income for the 2004 third quarter was $147,679,000, $19.04 per diluted share, compared to net income of $109,403,000, $12.55 per diluted share, for the same period of 2003. Total revenues increased 19% to $1,168,550,000 for the quarter when compared to $980,380,000 for the same period of 2003. In addition, the Company reported that new orders for the quarter ended September 2004 increased by 9% when compared to the third quarter of 2003. Backlog at the end of the period increased 6% to 7,775 units when compared to the same time last year. The dollar value of the backlog units totaled $2,939,665,000 at the end of the September 2004 quarter, a 22% increase from a year earlier.
Homebuilding revenues for the three months ended September 30, 2004 totaled $1,146,271,000, 20% higher than the year earlier period. Income before tax from the homebuilding segment totaled $231,344,000, an increase of 37% when compared to the third quarter of the previous year. Gross profit margins improved to 26.0% for the third quarter of 2004 when compared to 24.8% for the same quarter of 2003. The margin improvement primarily resulted from the ability to raise prices in certain markets that more than off-set rising land and material costs.
The Company reported that closed loan production from the mortgage banking segment increased 18% during the September 2004 quarter when compared to the third quarter of 2003. Pre-tax income for the 2004 third quarter decreased to $14,787,000, 4% lower than 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 nine months ended September 30, 2004, total revenues for NVR, Inc. were $3,050,393,000, 19% higher than the $2,572,455,000 reported for the same period of 2003. Net income for the nine months ended September 30, 2004 was $364,266,000, $46.36 per diluted share, compared to $292,301,000, $33.53 per diluted share, for the comparable period of 2003, increases of 25% and 38%, respectively.
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Looking forward, the Company anticipates full year 2004 net income to be ahead of the prior year by approximately 22% to 24%. In addition, the Company reported that during the first nine months of 2004 it repurchased approximately 615,000 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.
2
NVR, Inc.
Condensed Consolidated Statements of Income
(in thousands, except per share data)
(unaudited)
| Three Months Ended September 30, |
||||||||
| 2004 |
2003 |
|||||||
| Homebuilding: |
||||||||
| Revenues |
$ | 1,146,271 | $ | 956,848 | ||||
| Other income |
675 | 998 | ||||||
| Cost of sales |
(848,195 | ) | (719,507 | ) | ||||
| Selling, general and administrative |
(64,482 | ) | (57,002 | ) | ||||
| Operating income |
234,269 | 181,337 | ||||||
| Loss from extinguishment of 8% Senior Notes due 2005 |
— | (8,503 | ) | |||||
| Interest expense |
(2,925 | ) | (3,425 | ) | ||||
| Homebuilding income |
231,344 | 169,409 | ||||||
| Mortgage Banking: |
||||||||
| Mortgage banking fees |
20,248 | 20,844 | ||||||
| Interest income |
1,035 | 1,393 | ||||||
| Other income |
321 | 297 | ||||||
| General and administrative |
(6,555 | ) | (6,869 | ) | ||||
| Interest expense |
(262 | ) | (282 | ) | ||||
| Mortgage banking income |
14,787 | 15,383 | ||||||
| Income before taxes |
246,131 | 184,792 | ||||||
| Income tax expense |
(98,452 | ) | (75,389 | ) | ||||
| Net income |
$ | 147,679 | $ | 109,403 | ||||
| Basic earnings per share |
$ | 23.16 | $ | 15.30 | ||||
| Diluted earnings per share |
$ | 19.04 | $ | 12.55 | ||||
| Basic average shares outstanding |
6,377 | 7,151 | ||||||
| Diluted average shares outstanding |
7,758 | 8,716 | ||||||
3
NVR, Inc.
Condensed Consolidated Statements of Income
(in thousands, except per share data)
(unaudited)
| Nine Months Ended September 30, |
||||||||
| 2004 |
2003 |
|||||||
| Homebuilding: |
||||||||
| Revenues |
$ | 2,991,789 | $ | 2,508,786 | ||||
| Other income |
2,002 | 2,522 | ||||||
| Cost of sales |
(2,227,184 | ) | (1,882,154 | ) | ||||
| Selling, general and administrative |
(187,305 | ) | (168,401 | ) | ||||
| Operating income |
579,302 | 460,753 | ||||||
| Loss from extinguishment of 8% Senior Notes due 2005 |
— | (8,503 | ) | |||||
| Interest expense |
(8,878 | ) | (10,486 | ) | ||||
| Homebuilding income |
570,424 | 441,764 | ||||||
| Mortgage Banking: |
||||||||
| Mortgage banking fees |
52,899 | 56,483 | ||||||
| Interest income |
2,937 | 3,960 | ||||||
| Other income |
766 | 704 | ||||||
| General and administrative |
(19,037 | ) | (17,196 | ) | ||||
| Interest expense |
(879 | ) | (1,091 | ) | ||||
| Mortgage banking income |
36,686 | 42,860 | ||||||
| Income before taxes |
607,110 | 484,624 | ||||||
| Income tax expense |
(242,844 | ) | (192,323 | ) | ||||
| Net income |
$ | 364,266 | $ | 292,301 | ||||
| Basic earnings per share |
$ | 56.21 | $ | 41.06 | ||||
| Diluted earnings per share |
$ | 46.36 | $ | 33.53 | ||||
| Basic average shares outstanding |
6,481 | 7,118 | ||||||
| Diluted average shares outstanding |
7,858 | 8,718 | ||||||
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NVR, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except per share and share data)
| September 30, 2004 |
December 31, 2003 | |||||
| (unaudited) | ||||||
| ASSETS |
||||||
| Homebuilding: |
||||||
| Cash and cash equivalents |
$ | 256,141 | $ | 228,589 | ||
| Receivables |
16,001 | 9,550 | ||||
| Inventory: |
||||||
| Lots and housing units, covered under sales agreements with customers |
659,103 | 480,492 | ||||
| Unsold lots and housing units |
35,456 | 32,888 | ||||
| Manufacturing materials and other |
11,747 | 10,393 | ||||
| 706,306 | 523,773 | |||||
| Assets not owned, consolidated per FIN 46 |
66,477 | 12,807 | ||||
| Property, plant and equipment, net |
24,435 | 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 |
335,660 | 284,432 | ||||
| Other assets |
109,461 | 117,575 | ||||
| 1,562,440 | 1,249,216 | |||||
| Mortgage Banking: |
||||||
| Cash and cash equivalents |
4,749 | 3,630 | ||||
| Mortgage loans held for sale, net |
127,468 | 96,772 | ||||
| Mortgage servicing rights, net |
147 | 181 | ||||
| Property and equipment, net |
1,041 | 875 | ||||
| Reorganization value in excess of amounts allocable to identifiable assets, net |
7,347 | 7,347 | ||||
| Other assets |
3,252 | 5,084 | ||||
| 144,004 | 113,889 | |||||
| Total assets |
$ | 1,706,444 | $ | 1,363,105 | ||
(Continued)
.
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NVR, Inc.
Condensed Consolidated Balance Sheets (Continued)
(in thousands, except per share and share data)
| September 30, 2004 |
December 31, 2003 |
|||||||
| (unaudited) | ||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
| Homebuilding: |
||||||||
| Accounts payable |
$ | 224,550 | $ | 185,913 | ||||
| Accrued expenses and other liabilities |
257,705 | 243,223 | ||||||
| Liabilities related to assets not owned, consolidated per FIN 46 |
43,453 | 12,071 | ||||||
| Customer deposits |
212,136 | 157,005 | ||||||
| Other term debt |
4,205 | 4,519 | ||||||
| Senior notes |
200,000 | 200,000 | ||||||
| 942,049 | 802,731 | |||||||
| Mortgage Banking: |
||||||||
| Accounts payable and other liabilities |
14,047 | 12,166 | ||||||
| Notes payable |
102,368 | 53,340 | ||||||
| 116,415 | 65,506 | |||||||
| Total liabilities |
1,058,464 | 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 September 30, 2004 and December 31, 2003, respectively |
206 | 206 | ||||||
| Additional paid-in-capital |
375,207 | 335,346 | ||||||
| Deferred compensation trust – 492,118 and 510,118 shares as of September 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 |
1,752,131 | 1,387,865 | ||||||
| Less treasury stock at cost – 14,196,128 and 13,870,368 shares at September 30, 2004 and December 31, 2003, respectively |
(1,479,564 | ) | (1,228,549 | ) | ||||
| Total shareholders’ equity |
647,980 | 494,868 | ||||||
| Total liabilities and shareholders’ equity |
$ | 1,706,444 | $ | 1,363,105 | ||||
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NVR, Inc.
Operating Activity
(unaudited)
(dollars in thousands)
| Three Months Ended September 30, |
||||||||
| 2004 |
2003 |
|||||||
| Homebuilding data: |
||||||||
| New orders (units) |
||||||||
| Washington |
779 | 639 | ||||||
| Baltimore |
312 | 431 | ||||||
| North (1) |
1,102 | 933 | ||||||
| South (2) |
525 | 489 | ||||||
| Total |
2,718 | 2,492 | ||||||
| Average new order price |
$ | 374.3 | $ | 320.0 | ||||
| Settlements (units) |
||||||||
| Washington |
938 | 821 | ||||||
| Baltimore |
420 | 403 | ||||||
| North (1) |
1,403 | 1,256 | ||||||
| South (2) |
672 | 709 | ||||||
| Total |
3,433 | 3,189 | ||||||
| Average settlement price |
$ | 332.9 | $ | 299.2 | ||||
| Community count (average) |
440 | 424 | ||||||
| Mortgage banking data: |
||||||||
| Loan closings |
$ | 739,834 | $ | 624,637 | ||||
| Capture rate |
85 | % | 82 | % | ||||
| Common stock information: |
||||||||
| Weighted average basic shares outstanding |
6,377,000 | 7,151,000 | ||||||
| Weighted average diluted shares outstanding |
7,758,000 | 8,716,000 | ||||||
| Number of shares repurchased |
63,570 | 293,700 | ||||||
| Aggregate cost of shares repurchased |
$ | 29,858 | $ | 124,812 | ||||
| (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)
| Nine Months Ended September 30, |
||||||||
| 2004 |
2003 |
|||||||
| Homebuilding data: |
||||||||
| New orders (units) |
||||||||
| Washington |
2,945 | 2,572 | ||||||
| Baltimore |
1,218 | 1,410 | ||||||
| North (1) |
3,878 | 3,558 | ||||||
| South (2) |
1,996 | 1,971 | ||||||
| Total |
10,037 | 9,511 | ||||||
| Average new order price |
$ | 358.5 | $ | 309.0 | ||||
| Settlements (units) |
||||||||
| Washington |
2,425 | 2,405 | ||||||
| Baltimore |
1,314 | 1,161 | ||||||
| North (1) |
3,692 | 3,230 | ||||||
| South (2) |
1,721 | 1,752 | ||||||
| Total |
9,152 | 8,548 | ||||||
| Average settlement price |
$ | 325.9 | $ | 292.6 | ||||
| Backlog (units) |
||||||||
| Washington |
2,803 | 2,401 | ||||||
| Baltimore |
961 | 1,192 | ||||||
| North (1) |
2,692 | 2,523 | ||||||
| South (2) |
1,319 | 1,204 | ||||||
| Total |
7,775 | 7,320 | ||||||
| Average backlog price |
$ | 378.1 | $ | 328.0 | ||||
| Lots controlled at end of period |
76,000 | 64,000 | ||||||
| Mortgage banking data: |
||||||||
| Loan closings |
$ | 1,891,771 | $ | 1,719,191 | ||||
| Capture rate |
84 | % | 84 | % | ||||
| Common stock information: |
||||||||
| Shares outstanding at end of period |
6,401,581 | 7,083,297 | ||||||
| Weighted average basic shares outstanding |
6,481,000 | 7,118,000 | ||||||
| Weighted average diluted shares outstanding |
7,858,000 | 8,718,000 | ||||||
| Number of shares repurchased |
615,189 | 643,985 | ||||||
| Aggregate cost of shares repurchased |
$ | 275,715 | $ | 240,264 | ||||
| (1) | Delaware, New Jersey, New York, Ohio and Pennsylvania |
| (2) | North Carolina, South Carolina, Tennessee and Richmond, VA |
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