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): October 18, 2005
NVR, Inc.
(Exact name of registrant as specified in its charter)
| Virginia | 1-12378 | 54-1394360 | ||
| (State or other jurisdiction of incorporation or organization) |
(Commission File Number) | (I.R.S. Employer 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 October 18, 2005, NVR, Inc. issued a press release reporting its financial results for the quarter and year-to-date periods ended September 30, 2005. 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, 2005. |
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 19, 2005 | By: | /s/ Dennis M. Seremet | ||
| Name: | Dennis M. Seremet | |||
| Title: | Vice President and Chief Financial Officer | |||
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INDEX TO EXHIBITS
| Exhibit Number |
Exhibit Description | |
| 99.1 | Press release dated October 18, 2005. |
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Exhibit 99.1
NVR, INC. ANNOUNCES A 28% INCREASE IN EARNINGS PER SHARE FOR THE THIRD QUARTER OF 2005
| FOR IMMEDIATE RELEASE |
CONTACT: Dan Malzahn | |
| OFFICE: 703-956-4204 |
October 18, 2005 — Reston, 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, 2005 exceeded the 2004 third quarter by 28%. Net income for the 2005 third quarter was $189,443,000, $24.33 per diluted share, compared to net income of $147,679,000, $19.04 per diluted share, for the same period of 2004. Consolidated revenues increased 18% to $1,373,022,000 for the quarter when compared to $1,166,519,000 for the same period of 2004. The Company reported that new orders increased 7% to 2,897 units for the third quarter of 2005 when compared to the third quarter of 2004. New orders increased in each region, except Washington, D.C., which was negatively impacted by generally weaker market conditions. Backlog at the end of the period increased 14% to 8,875 units when compared to the same time last year. The dollar value of the backlog units totaled $3,831,608,000 at the end of the September 2005 quarter, a 30% increase from a year earlier.
Homebuilding revenues for the three months ended September 30, 2005, totaled $1,350,465,000, 18% higher than the year earlier period. Income before tax from the homebuilding segment totaled $291,721,000, an increase of 26% when compared to the third quarter of the previous year. Gross profit margins improved to 28.1% for the third quarter of 2005 compared to 26.0% for the same quarter of 2004. The margin improvement primarily resulted from the ability to raise prices in certain markets that more than offset rising material and land costs.
The Company reported that closed loan production from its mortgage banking segment increased 17% in the third quarter of 2005 when compared to the third quarter of 2004. The mortgage segment’s operating income for the 2005 third quarter increased to $16,250,000, a 10% increase from the same period of 2004.
For the nine months ended September 30, 2005, consolidated revenues were $3,604,143,000, 18% higher than the $3,044,688,000 reported for the same period of 2004. Net income for the nine months ended September 30, 2005 was $475,022,000, an increase of 30% when compared to the nine months ended September 30, 2004. Earnings per diluted share for the nine months ended September 30, 2005 was $59.87, an increase of 29% from the $46.36 per diluted share reported for the comparable period of 2004.
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The Company has increased its full year 2005 guidance to 30% growth in net income when compared to 2004. The Company also stated that during the first nine months of 2005 it had repurchased approximately 643,000 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 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, 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.
Consolidated Statements of Income
(in thousands, except per share data)
(unaudited)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2005 |
2004 |
2005 |
2004 |
|||||||||||||
| Homebuilding: |
||||||||||||||||
| Revenues |
$ | 1,350,465 | $ | 1,146,271 | $ | 3,546,965 | $ | 2,991,789 | ||||||||
| Other income |
1,224 | 675 | 4,157 | 2,002 | ||||||||||||
| Cost of sales |
(970,437 | ) | (848,195 | ) | (2,557,268 | ) | (2,227,184 | ) | ||||||||
| Selling, general and administrative |
(86,626 | ) | (64,482 | ) | (243,276 | ) | (187,305 | ) | ||||||||
| Operating income |
294,626 | 234,269 | 750,578 | 579,302 | ||||||||||||
| Interest expense |
(2,905 | ) | (2,925 | ) | (8,835 | ) | (8,878 | ) | ||||||||
| Homebuilding income |
291,721 | 231,344 | 741,743 | 570,424 | ||||||||||||
| Mortgage Banking: |
||||||||||||||||
| Mortgage banking fees |
22,557 | 20,248 | 57,178 | 52,899 | ||||||||||||
| Interest income |
1,492 | 1,035 | 3,276 | 2,937 | ||||||||||||
| Other income |
435 | 321 | 1,022 | 766 | ||||||||||||
| General and administrative |
(7,957 | ) | (6,555 | ) | (22,486 | ) | (19,037 | ) | ||||||||
| Interest expense |
(277 | ) | (262 | ) | (730 | ) | (879 | ) | ||||||||
| Mortgage banking income |
16,250 | 14,787 | 38,260 | 36,686 | ||||||||||||
| Income before taxes |
307,971 | 246,131 | 780,003 | 607,110 | ||||||||||||
| Income tax expense |
(118,528 | ) | (98,452 | ) | (304,981 | ) | (242,844 | ) | ||||||||
| Net income |
$ | 189,443 | $ | 147,679 | $ | 475,022 | $ | 364,266 | ||||||||
| Basic earnings per share |
$ | 30.08 | $ | 23.16 | $ | 73.73 | $ | 56.21 | ||||||||
| Diluted earnings per share |
$ | 24.33 | $ | 19.04 | $ | 59.87 | $ | 46.36 | ||||||||
| Basic average shares outstanding |
6,298 | 6,377 | 6,443 | 6,481 | ||||||||||||
| Diluted average shares outstanding |
7,787 | 7,758 | 7,934 | 7,858 | ||||||||||||
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NVR, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share data)
| September 30, 2005 |
December 31, 2004 | |||||
| (unaudited) | ||||||
| ASSETS |
||||||
| Homebuilding: |
||||||
| Cash and cash equivalents |
$ | 240,340 | $ | 362,458 | ||
| Receivables |
19,212 | 14,020 | ||||
| Inventory: |
||||||
| Lots and housing units, covered under sales agreements with customers |
853,709 | 538,770 | ||||
| Unsold lots and housing units |
53,340 | 40,052 | ||||
| Manufacturing materials and other |
9,532 | 9,718 | ||||
| 916,581 | 588,540 | |||||
| Contract land deposits |
514,272 | 384,959 | ||||
| Assets not owned, consolidated per FIN 46R |
167,184 | 89,924 | ||||
| Property, plant and equipment, net |
25,254 | 25,330 | ||||
| Reorganization value in excess of amounts allocable to identifiable assets, net |
41,580 | 41,580 | ||||
| Goodwill and indefinite life intangibles, net |
10,579 | 6,379 | ||||
| Definite life intangibles, net |
406 | — | ||||
| Other assets |
120,875 | 109,778 | ||||
| 2,056,283 | 1,622,968 | |||||
| Mortgage Banking: |
||||||
| Cash and cash equivalents |
5,426 | 4,907 | ||||
| Mortgage loans held for sale, net |
143,534 | 138,595 | ||||
| Mortgage servicing rights, net |
94 | 126 | ||||
| Property and equipment, net |
903 | 996 | ||||
| Reorganization value in excess of amounts allocable to identifiable assets, net |
7,347 | 7,347 | ||||
| Other assets |
2,527 | 3,028 | ||||
| 159,831 | 154,999 | |||||
| Total assets |
$ | 2,216,114 | $ | 1,777,967 | ||
(Continued)
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NVR, Inc.
Consolidated Balance Sheets (Continued)
(in thousands, except share and per share data)
| September 30, 2005 |
December 31, 2004 |
|||||||
| (unaudited) | ||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
| Homebuilding: |
||||||||
| Accounts payable |
$ | 281,210 | $ | 215,002 | ||||
| Accrued expenses and other liabilities |
274,278 | 234,815 | ||||||
| Customer deposits |
289,152 | 203,835 | ||||||
| Liabilities related to assets not owned, consolidated per FIN 46R |
130,969 | 63,568 | ||||||
| Other term debt |
3,349 | 4,077 | ||||||
| Senior notes |
200,000 | 200,000 | ||||||
| 1,178,958 | 921,297 | |||||||
| Mortgage Banking: |
||||||||
| Accounts payable and other liabilities |
18,058 | 11,949 | ||||||
| Notes payable |
113,699 | 9,726 | ||||||
| 131,757 | 21,675 | |||||||
| Total liabilities |
1,310,715 | 942,972 | ||||||
| Commitments and contingencies |
||||||||
| Shareholders’ equity: |
||||||||
| Common stock, $0.01 par value; 60,000,000 shares authorized; 20,592,640 and 20,597,709 shares issued as of September 30, 2005 and December 31, 2004, respectively |
206 | 206 | ||||||
| Additional paid-in-capital |
474,613 | 406,705 | ||||||
| Deferred compensation trust- 547,697 and 549,029 shares of NVR, Inc. common stock as of September 30, 2005 and December 31, 2004, respectively |
(76,303 | ) | (76,366 | ) | ||||
| Deferred compensation liability |
76,303 | 76,366 | ||||||
| Retained earnings |
2,386,091 | 1,911,069 | ||||||
| Less treasury stock at cost – 14,352,072 and 14,023,631 shares as of September 30, 2005 and December 31, 2004, respectively |
(1,955,511 | ) | (1,482,985 | ) | ||||
| Total shareholders’ equity |
905,399 | 834,995 | ||||||
| Total liabilities and shareholders’ equity |
$ | 2,216,114 | $ | 1,777,967 | ||||
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NVR, Inc.
Operating Activity
(unaudited)
(dollars in thousands)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2005 |
2004 |
2005 |
2004 |
|||||||||||||
| Homebuilding data: |
||||||||||||||||
| New orders (units) |
||||||||||||||||
| Washington (1) |
622 | 766 | 2,881 | 2,907 | ||||||||||||
| Baltimore (2) |
431 | 264 | 1,461 | 1,094 | ||||||||||||
| North (3) |
1,225 | 1,163 | 4,480 | 4,040 | ||||||||||||
| South (4) |
619 | 525 | 2,216 | 1,996 | ||||||||||||
| Total |
2,897 | 2,718 | 11,038 | 10,037 | ||||||||||||
| Average new order price |
$ | 399.3 | $ | 374.3 | $ | 403.8 | $ | 358.5 | ||||||||
| Settlements (units) |
||||||||||||||||
| Washington (1) |
964 | 924 | 2,570 | 2,397 | ||||||||||||
| Baltimore (2) |
388 | 387 | 1,046 | 1,179 | ||||||||||||
| North (3) |
1,491 | 1,450 | 3,889 | 3,855 | ||||||||||||
| South (4) |
733 | 672 | 2,102 | 1,721 | ||||||||||||
| Total |
3,576 | 3,433 | 9,607 | 9,152 | ||||||||||||
| Average settlement price |
$ | 377.5 | $ | 332.9 | $ | 368.5 | $ | 325.9 | ||||||||
| Backlog (units) |
||||||||||||||||
| Washington (1) |
2,864 | 2,774 | ||||||||||||||
| Baltimore (2) |
1,231 | 872 | ||||||||||||||
| North (3) |
3,340 | 2,810 | ||||||||||||||
| South (4) |
1,440 | 1,319 | ||||||||||||||
| Total |
8,875 | 7,775 | ||||||||||||||
| Average backlog price |
$ | 431.7 | $ | 378.1 | ||||||||||||
| Community count (average) |
518 | 440 | 501 | 443 | ||||||||||||
| Lots controlled at end of period |
100,000 | 76,000 | ||||||||||||||
| Mortgage banking data: |
||||||||||||||||
| Loan closings |
$ | 867,864 | $ | 739,834 | $ | 2,340,177 | $ | 1,891,771 | ||||||||
| Capture rate |
85 | % | 85 | % | 87 | % | 84 | % | ||||||||
| Common stock information: |
||||||||||||||||
| Shares outstanding at end of period |
6,240,568 | 6,401,581 | ||||||||||||||
| Weighted average basic shares outstanding |
6,298,000 | 6,377,000 | 6,443,000 | 6,481,000 | ||||||||||||
| Weighted average diluted shares outstanding |
7,787,000 | 7,758,000 | 7,934,000 | 7,858,000 | ||||||||||||
| Number of shares repurchased |
137,000 | 63,570 | 643,150 | 615,189 | ||||||||||||
| Aggregate cost of shares repurchased |
$ | 115,215 | $ | 29,858 | $ | 510,531 | $ | 275,715 | ||||||||
| (1) | Washington, D.C. metropolitan area and adjacent counties in Maryland, Virginia and West Virginia |
| (2) | Baltimore, MD metropolitan area and adjacent counties in Pennsylvania |
| (3) | Delaware, Maryland Eastern Shore, New Jersey, New York, Ohio and Pennsylvania |
| (4) | North Carolina, South Carolina, Tennessee and Richmond, VA |
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