UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission file number 1-12378
NVR, Inc.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Virginia 54-1394360
- ------------------------------- -----------------------------
(State or other jurisdiction of (IRS employer identification
incorporation or organization) number)
7601 Lewinsville Road, Suite 300
McLean, Virginia 22102
(703) 761-2000
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(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
(Not Applicable)
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(Former name, former address, and former fiscal year
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No_____
____
As of July 18, 1996 there were 14,259,358 total shares of common stock
outstanding.
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13, or 15 (d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes X No ___
_____
NVR, INC.
FORM 10-Q
INDEX
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Page
PART I FINANCIAL INFORMATION
- ------
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets at June 30, 1996 (unaudited)
and December 31, 1995............................................ 3
Consolidated Statements of Operations for the
Three Months Ended June 30, 1996 (unaudited)
and June 30, 1995 (unaudited) and the
Six Months Ended June 30, 1996 (unaudited)
and June 30, 1995 (unaudited).................................... 5
Consolidated Statements of Cash Flows for the Six
Months Ended June 30, 1996 (unaudited) and
June 30, 1995 (unaudited)........................................ 6
Notes to Consolidated Financial Statements....................... 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.............................. 9
PART II OTHER INFORMATION
- -------
Item 4. Submission of Matters to a Vote of Security Holders............. 14
Item 6. Exhibits and Reports on Form 8-K................................. 14
Signature........................................................ 15
2
PART I
------
ITEM 1.
- -------
NVR, INC.
Consolidated Balance Sheets
(dollars in thousands, except share data)
ASSETS JUNE 30, 1996 DECEMBER 31, 1995
------------- -----------------
(UNAUDITED)
HOMEBUILDING:
Cash and cash equivalents $ 41,920 $ 51,911
Receivables 10,516 7,894
Inventory:
Lots and housing units, covered under
sales agreements with customers 153,770 116,140
Unsold lots and housing units 24,811 33,399
Manufacturing materials and other 6,709 5,174
--------- ---------
185,290 154,713
Property, plant and equipment, net 17,415 16,882
Reorganization value in excess of amounts
allocable to identifiable assets, net 86,345 89,867
Other assets 48,117 47,308
--------- ---------
389,603 368,575
--------- ---------
FINANCIAL SERVICES:
Cash and cash equivalents 5,249 3,656
Mortgage loans held for sale, net 105,144 96,311
Mortgage servicing rights, net 17,342 18,017
Property and equipment, net 1,277 1,708
Reorganization value in excess of amounts
allocable to identifiable assets, net 13,332 13,877
Other assets 5,219 10,452
--------- ---------
147,563 144,021
--------- ---------
LIMITED-PURPOSE FINANCING SUBSIDIARIES:
Mortgage-backed securities, net 66,086 94,403
Funds held by trustee 3,908 2,534
Other assets 3,482 4,338
--------- ---------
73,476 101,275
--------- ---------
TOTAL ASSETS $ 610,642 $ 613,871
========= =========
See notes to consolidated financial statements.
3
NVR, INC.
Consolidated Balance Sheets
(dollars in thousands, except share data)
JUNE 30, 1996 DECEMBER 31, 1995
------------- -----------------
(UNAUDITED)
LIABILITIES AND SHAREHOLDERS'
EQUITY
HOMEBUILDING:
Accounts payable $ 54,486 $ 49,679
Accrued expenses and other liabilities 88,492 88,943
Notes payable 1,090 93
Other term debt 14,041 14,025
Senior notes 120,000 120,000
--------- ---------
278,109 272,740
--------- ---------
FINANCIAL SERVICES:
Accounts payable and other liabilities 5,850 7,501
Notes payable 103,061 87,177
--------- ---------
108,911 94,678
--------- ---------
LIMITED-PURPOSE FINANCING SUBSIDIARIES:
Accrued expenses and other liabilities 1,781 1,724
Bonds payable 71,613 98,549
--------- ---------
73,394 100,273
--------- ---------
Total liabilities 460,414 467,691
--------- ---------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock, $0.01 par value; 60,000,000
shares authorized; 18,397,545 and 18,384,083
shares issued as of June 30, 1996 and
December 31, 1995, respectively 184 184
Additional paid-in-capital 142,451 144,072
Retained earnings 34,136 21,626
Less treasury stock at cost -3,796,787
and 3,170,721 shares at June 30, 1996
and December 31, 1995 respectively (26,543) (19,702)
--------- ---------
Total shareholders' equity 150,228 146,180
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $ 610,642 $ 613,871
========= =========
See notes to consolidated financial statements.
4
NVR, INC.
Consolidated Statements of Operations
(dollars in thousands, except per share data)
(unaudited)
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
--------------------------- -------------------------
1996 1995 1996 1995
---------- ---------- ---------- ----------
HOMEBUILDING:
Revenues $ 283,532 $ 207,322 $ 483,767 $ 351,391
Other income 120 261 525 977
Cost of sales (245,357) (177,514) (419,202) (302,860)
Selling, general and administrative (16,116) (13,047) (30,165) (25,077)
Amortization of reorganization value
in excess of amounts allocable to
identifiable assets (1,761) (1,761) (3,522) (3,522)
---------- ---------- ---------- ----------
Operating income 20,418 15,261 31,403 20,909
Interest expense (4,240) (4,243) (8,400) (8,504)
---------- ---------- ---------- ----------
Homebuilding income 16,178 11,018 23,003 12,405
---------- ---------- ---------- ----------
FINANCIAL SERVICES:
Mortgage banking fees 6,819 4,949 12,818 9,651
Interest income 1,241 1,074 2,404 1,783
General and administrative (6,108) (5,230) (11,930) (10,181)
Amortization of reorganization value
in excess of amounts allocable to
identifiable assets (272) (272) (544) (544)
Interest expense (525) (435) (1,029) (599)
---------- ---------- ---------- ----------
Operating income 1,155 86 1,719 110
LIMITED-PURPOSE FINANCING SUBSIDIARIES:
Operating income (loss) (2) 10 1 22
---------- ---------- ---------- ----------
TOTAL SEGMENT INCOME 17,331 11,114 24,723 12,537
Income tax expense (8,561) (6,018) (12,213) (6,788)
---------- ---------- ---------- ----------
Income before extraordinary gain 8,770 5,096 12,510 5,749
Extraordinary gain: (net of tax expense
of $(115) and $(645) for the three and six
months ended June 30, 1995, respectively) - 165 - 927
---------- ---------- ---------- ----------
NET INCOME $ 8,770 $ 5,261 $ 12,510 $ 6,676
========== ========== ========== ==========
EARNINGS PER SHARE:
Income before extraordinary gain $ 0.54 $ 0.33 $ 0.77 $ 0.37
Extraordinary gain - 0.01 - 0.06
---------- ---------- ---------- ----------
Earnings per share $ 0.54 $ 0.34 $ 0.77 $ 0.43
========== ========== ========== ==========
See notes to consolidated financial statements.
5
NVR, INC.
Consolidated Statements of Cash Flows
(dollars in thousands, except share data)
(unaudited)
SIX MONTHS ENDED JUNE 30,
-------------------------
1996 1995
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 12,510 $ 6,676
Adjustments to reconcile net income to
net cash used by operating activities:
Extraordinary (gain) - extinguishment of debt (1,572)
Depreciation and amortization 7,368 7,016
Interest accrued and added to bond principal 395 1,343
Mortgage loans closed (611,023) (400,336)
Proceeds from sales of mortgage loans 603,937 366,234
Gain (loss) on sale of mortgage servicing rights - (1,999)
Gain on sale of loans (7,119) (2,050)
Net change in assets and liabilities:
Increase in inventories (30,577) (57,206)
Decrease (increase) in receivables (1,971) 1,660
(Decrease) increase in accounts payable and
accrued expenses 2,879 (1,126)
Other, net (1,053) (2,623)
--------- ---------
Net cash used by operating activities (24,654) (83,983)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Decrease in marketable securities - 5,000
Decrease (increase)in funds held by trustee (1,374) 377
Proceeds from sales of mortgage-backed securities 17,814 1,069
Purchase of property, plant and equipment (2,026) (2,032)
Principal payments on mortgage-backed securities 11,569 6,880
Proceeds from sales of mortgage servicing rights 8,150 5,057
Purchases of mortgage servicing rights (112) (9,729)
Other, net 1,483 (325)
--------- ---------
Net cash provided by investing activities 35,504 6,297
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Redemption of bonds (27,562) (8,953)
Net borrowings under notes payable 16,776 65,357
Purchases of treasury stock (8,551) (871)
Repurchase of Senior Notes - (12,962)
Other 89 (42)
--------- ---------
Net cash provided (used) by financing activities (19,248) 42,529
Net decrease in cash (8,398) (35,157)
Cash, beginning of the period 55,567 71,476
--------- ---------
Cash, end of period $ 47,169 $ 36,319
========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid during the period $ 12,324 $ 12,393
========= =========
Income taxes paid, net of refunds $ 12,112 $ 7,033
========= =========
See notes to consolidated financial statements.
6
NVR, INC.
Notes to Consolidated Financial Statements
(dollars in thousands, except share data)
1. BASIS OF PRESENTATION
The accompanying unaudited, consolidated financial statements include the
accounts of NVR, Inc. ("NVR" or the "Company") and its subsidiaries.
Intercompany accounts and transactions have been eliminated in consolidation.
The statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Regulation S-X. Accordingly, they do not include
all of the information and footnotes required by generally accepted accounting
principles for complete financial statements. Because the accompanying
condensed financial statements do not include all of the information and
footnotes required by generally accepted accounting principles, they should be
read in conjunction with the financial statements and notes thereto included in
the Company's 1995 Annual Report on Form 10-K. In the opinion of management,
all adjustments (consisting only of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
six month period ended June 30, 1996 are not necessarily indicative of the
results that may be expected for the year ending December 31, 1996.
2. ADOPTION OF NEW ACCOUNTING PRINCIPLE
During the quarter ended March 31, 1996, the Company adopted Statement of
Financial Accounting Standards ("SFAS") No. 121, ACCOUNTING FOR THE IMPAIRMENT
OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS TO BE DISPOSED OF. SFAS No. 121
requires that long-lived assets and certain identifiable intangibles be reviewed
for impairment whenever events or changes in circumstances based on future
expected cash flows indicate that the carrying amount may not be recoverable.
Such adoption did not have a material impact on the Company's financial
condition or results of operations.
3. SHAREHOLDERS' EQUITY
A summary of changes in Shareholders' equity is presented below:
ADDITIONAL
COMMON PAID-IN RETAINED TREASURY
STOCK CAPITAL EARNINGS STOCK
------ ---------- -------- --------
BALANCE, DECEMBER 31, 1995 $ 184 $ 144,072 $ 21,626 $ (19,702)
Net income - - 12,510 -
Option activity - 85 - -
Warrant activity - 4 - -
Purchases of treasury stock - - - (8,551)
Performance share activity - (1,710) - 1,710
------ ---------- -------- ---------
BALANCE, JUNE 30, 1996 $ 184 $ 142,451 $ 34,136 $ (26,543)
====== ========= ======== =========
During the second quarter of 1996, the Company repurchased 800,000 shares
of its common stock at an aggregate purchase price of $8,551. The repurchase was
made under the previously announced 2,163,000 share equity repurchase program.
Subsequent to June 30, 1996, the Company repurchased an additional 341,400
shares at an aggregate purchase price of $3,638 under the same program.
7
NVR, INC.
Notes to Consolidated Financial Statements
(dollars in thousands, except share data)
4. DEBT
In May 1996, the Company amended and restated its working capital revolving
credit facility (the "Facility") for a three year term expiring on May 31, 1999
under an agreement with a syndicate of financial institutions. The Facility
provides for borrowings up to $60,000. The amended Facility resulted in a more
favorable borrowing rate and a reduction in certain fees. The other terms and
conditions are substantially the same as those under the facility in effect at
December 31, 1995.
In June 1996, NVR Mortgage Finance, Inc. ("NVR Finance") renewed its
mortgage warehouse facility for one year with more favorable pricing and an
increase in the available borrowing limit to $105,000. The other terms and
conditions are substantially the same as under the previous facility.
During the first quarter of 1996, NVR Finance entered into an annually
renewable, uncommitted gestation mortgage-backed security repurchase agreement
(the "Repo Facility"). The maximum amount available under the Repo Facility is
$50,000, and amounts outstanding thereunder accrue interest at various rates
tied to the federal funds rate, depending on the type of collateral. Borrowings
outstanding under the Repo Facility are collateralized by gestation mortgage-
backed securities. The covenants under the Repo Facility are consistent with
NVR Finance's mortgage warehouse credit facility.
5. STOCK OPTION PLANS
During the second quarter of 1996, the Company's Shareholders approved the
Board of Directors' adoption of the Management Long-Term Stock Option Plan (the
"Stock Option Plan") and the Directors' Long-Term Stock Option Plan (the
"Directors' Plan").
Under the Stock Option Plan, awards of non-qualified stock options
("Options") to purchase 2,000,000 Shares of the Company's common stock
("Shares") may be granted to executive officers and other key management
personnel. Each Option will be granted for a period of ten (10) years from the
date of grant. As of June 30, 1996, 1,564,000 Options have been granted under
the Stock Option Plan at an exercise price of $10.63, which was equal to the
fair market value of the Company's Shares on the date of grant. The Options
granted will vest as to thirty-three and one-third percent (33 1/3 %) of the
underlying Shares on each of December 31, 2000, 2001, and 2002, with vesting
based upon continued employment.
Also as of June 30, 1996, the 192,000 Options authorized under the
Directors' Plan were granted to the Company's outside directors at an exercise
price of $10.25, which was equal to the fair market value of the Company's
Shares on the date of grant. The Options were granted for a ten (10) year
period beginning from the date of grant, and vest as to thirty three and one-
third percent (33 1/3%) of the underlying Shares on each of December 31, 1999,
2000, and 2001.
8
ITEM 2.
- -------
NVR, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(dollars in thousands)
NVR, Inc. ("NVR" or the "Company") is a holding company that operates in
two business segments: homebuilding and financial services. Holding company
general and administrative expenses are fully allocated to the homebuilding and
financial services segments in the information presented below.
HOMEBUILDING SEGMENT
THREE MONTHS ENDED JUNE 30, 1996 AND 1995
During the second quarter of 1996, homebuilding operations generated
revenues of $283,532 compared to revenues of $207,322 in the second quarter of
1995. The change in revenues is primarily due to a 33.9% increase in the number
of homes settled from 1,162 in 1995 to 1,556 in 1996. The increase in
settlements was a direct result of the higher backlog at the beginning of the
1996 quarter as compared to the same 1995 quarter. New orders of 1,801 during
the second quarter of 1996 were substantially the same as the 1,807 new orders
during the same 1995 period.
Gross profit margins in the second quarter of 1996 decreased to 13.5%
compared to 14.4% for the same 1995 quarter. The decrease in gross profit
margins from the prior year quarter was primarily due to additional costs
incurred in the construction of homes as a result of severe winter weather
conditions in NVR's principal markets during the first quarter of 1996, higher
lumber costs and to a lesser extent, more competitive market conditions in
certain of the Company's markets.
SG&A expenses for the second quarter of 1996 increased $3,069 as compared
to the same 1995 period but as a percentage of revenues decreased 0.6%. The
increase in SG&A dollars was primarily due to increased costs that corresponded
to the aforementioned increase in revenues.
Backlog units and dollars were 3,101 and $563,948, respectively, at June
30, 1996 compared to 2,655 and $479,001, respectively, at June 30, 1995. The
increase in backlog units and dollars is due primarily to an 11.9% increase in
new orders over the six month period ended June 30, 1996 compared to the same
1995 period.
The Company believes that earnings before interest, taxes, depreciation and
amortization ("EBITDA") provides a more meaningful comparison of operating
performance of the homebuilding segment than operating income because it
excludes the amortization of certain intangible assets. Although the Company
believes the calculation is helpful in understanding the performance of the
homebuilding segment, EBITDA should not be considered a substitute for net
income or cash flow as indicators of the Company's financial performance or its
ability to generate liquidity.
CALCULATION OF EBITDA:
THREE MONTHS ENDED JUNE 30,
---------------------------
1996 1995
-------- --------
Operating income $ 20,418 $ 15,261
Depreciation 685 526
Amortization of excess reorganization
value 1,761 1,761
-------- --------
HOMEBUILDING EBITDA $ 22,864 $ 17,548
======== ========
% OF HOMEBUILDING REVENUES 8.1% 8.5%
Homebuilding EBITDA in the second quarter of 1996 was $5,316 or 30.3%
higher than in the second quarter of 1995, but as a percentage of revenue
decreased from 8.5% to 8.1%.
9
FINANCIAL SERVICES SEGMENT
THREE MONTHS ENDED JUNE 30, 1996 AND 1995
Operating income from the financial services segment was $1,155 for the
second quarter of 1996 compared to $86 during the same period in 1995. Loan
closings were $321,795 and $253,571 during the respective quarters of 1996 and
1995, representing an increase of 27%. The increase in operating income is
primarily attributable to the higher gain on sale of loans resulting from
increased loan closings during the current period. This result was achieved
despite continued strong price competition and fewer operating branch offices
during the current three month period as compared to the prior year period.
Mortgage banking fees had a net increase of $1,870 when comparing the
second quarter of 1996 to the second quarter of 1995. The increase is
attributed to the higher gain on sale of loans resulting from the increased loan
closings. A summary of mortgage banking fees for the three month period ended
June 30, 1996 and 1995 is noted below:
MORTGAGE BANKING FEES: 1996 1995
------- -------
Net gain on sale of loans $ 3,859 $ 1,320
Servicing 1,348 1,822
Title services 948 704
Gain on sale of servicing rights - 539
Other 664 564
------- -------
$ 6,819 $ 4,949
======= =======
HOMEBUILDING SEGMENT
SIX MONTHS ENDED JUNE 30, 1996 AND 1995
During the first six months of 1996, homebuilding operations generated
revenues of $483,767 compared to revenues of $351,391 in the first six months of
1995. The increase in revenues was primarily due to a 32.4% increase in the
number of homes settled from 2,011 in 1995 to 2,663 in 1996, and to a 4.3%
increase in the average settlement price from $173.3 in 1995 to $180.8 in 1996.
The increase in settlements was a direct result of a higher backlog at the
beginning of 1996 and throughout the first three months of 1996 when compared to
the same 1995 period. New orders increased by 11.9% to 3,293 during the first
six months of 1996 compared with 2,944 during the first six months of 1995.
Gross profit margins decreased to 13.3% in the first six months of 1996
compared to 13.8% in the first six months of 1995. The decrease in gross profit
margins from the prior year was primarily attributable to additional costs
incurred in the construction of homes as a result of severe winter weather
conditions in NVR's principal markets during the first quarter of 1996 and to a
lesser extent, more competitive market conditions in certain of the Company's
markets.
SG&A expenses for 1996 increased $5,088 as compared to the same 1995
period, but as a percentage of revenues decreased 0.9%. The increase in SG&A
dollars was primarily due to increased costs that correspond to the
aforementioned increase in revenues.
10
CALCULATION OF HOMEBUILDING EBITDA:
SIX MONTHS ENDED JUNE 30,
-------------------------
1996 1995
-------- --------
Operating income $ 31,403 $ 20,909
Depreciation 1,403 1,049
Amortization of excess reorganization
value 3,522 3,522
-------- --------
HOMEBUILDING EBITDA $ 36,328 $ 25,480
======== ========
% OF HOMEBUILDING REVENUES 7.5% 7.3%
Homebuilding EBITDA for the first six months of 1996 was $10,848 or 42.6%
higher than the first six months of 1995, and as a percentage of revenues
increased from 7.3% to 7.5%.
FINANCIAL SERVICES SEGMENT
SIX MONTHS ENDED JUNE 30, 1996 AND 1995
Operating income from the financial services segment was $1,719 compared to
$110 during the same period in 1995. Loan closings were $611,023 and $400,336
during the respective first halves of 1996 and 1995, representing an increase of
53%. The increase in operating income is primarily attributable to the higher
gain on sale of loans resulting from increased loan closings during the first
six months of 1996. This result was achieved despite continued strong price
competition and fewer operating branch offices during the current six month
period as compared to the prior year period.
Mortgage banking fees had a net increase of $3,167 when comparing the first
half of 1996 to the first half of 1995. The increase is primarily attributed to
the higher gain on sale of loans resulting from the increased loan closings,
partially offset by a lower gain on sale of mortgage servicing rights. A
summary of mortgage banking fees for the six month period ended June 30, 1996
and 1995 is noted below:
MORTGAGE BANKING FEES: 1996 1995
-------- -------
Net gain on sale of loans $ 7,119 $ 2,050
Servicing 2,807 3,435
Title services 1,677 1,168
Gain on sale of servicing rights - 1,999
Other 1,215 999
-------- -------
$ 12,818 $ 9,651
======== =======
11
OTHER ELEMENTS IMPACTING RESULTS OF OPERATIONS
SUPPLEMENTAL DISCLOSURE OF NET INCOME PER SHARE
The Company is amortizing the reorganization value in excess of amounts
allocable to identifiable assets on a straight-line basis over a fifteen year
period beginning in the fourth quarter of 1993. Because this non-cash expense
significantly impacts net income, the following is presented for additional
analysis. Although the Company believes the calculation is helpful in assessing
the financial results of the Company, it should not be considered a substitute
for earnings per share as presented on the face of the statements of operations
on the accompanying financial statements.
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
--------------------------- -------------------------
1996 1995 1996 1995
------------ ------------ ------------ ------------
WEIGHTED AVERAGE SHARES OUTSTANDING:
Weighted average number of shares
of common stock and common
stock equivalents outstanding 16,373,538 15,364,599 16,148,296 15,395,300
SUPPLEMENTAL INFORMATION:
Reported net income $ 8,770 $ 5,261 $ 12,510 $ 6,676
Plus:
Amortization of reorganization
value in excess of amounts
allocable to identifiable
assets 2,033 2,033 4,066 4,066
Less:
Extraordinary gain - net of taxes - (165) - (927)
------------ ------------ ------------ ------------
Income before extraordinary gain
and amortization of reorganization
value in excess of amounts allocable
to identifiable assets $ 10,803 $ 7,129 $ 16,576 $ 9,815
============ ============ ============ ============
EARNINGS PER SHARE before
extraordinary gain and amortization of
reorganization value in excess of
amounts allocable to identifiable assets $ 0.66 $ 0.46 $ 1.03 $ 0.64
============ ============ ============ ============
12
LIQUIDITY AND CAPITAL RESOURCES
NVR's homebuilding segment generally provides for its working capital cash
requirements using cash generated from operations and a short-term credit
facility. The homebuilding segment has available a $60,000 Working Capital
Revolving Credit facility (the "facility") to fund its working capital needs,
under which $1,000 was outstanding at June 30, 1996.
NVR's financial services segment provides for its mortgage origination and
other operating activities using cash generated from operations as well as
various short-term credit facilities. NVR Mortgage Finance, Inc. ("NVR
Finance") has available a $105,000 mortgage warehouse facility to fund its
mortgage origination activities, under which $93,150 was outstanding at June 30,
1996.
In addition, during the quarter ended March 31, 1996, NVR Finance entered
into an annually renewable, uncommitted gestation mortgage-backed security
repurchase agreement (the "Repo Facility"). The maximum amount available under
the Repo Facility is $50,000, and amounts outstanding thereunder accrue interest
at various rates tied to the federal funds rate, depending on the type of
collateral. Borrowings outstanding under the Repo Facility are collateralized
by gestation mortgage-backed securities. The covenants under the Repo Facility
are consistent with NVR Finance's mortgage warehouse credit facility. There was
$9,911 outstanding under this facility at June 30, 1996.
The Company believes that internally generated cash and borrowings
available under credit facilities will be sufficient to satisfy near term cash
requirements for working capital in both its homebuilding and mortgage banking
operations.
OTHER ELEMENTS IMPACTING LIQUIDITY
During the second quarter of 1996, the Company repurchased 800,000 shares
of its common stock at an aggregate purchase price of $8,551. The repurchase was
made under the previously announced 2,163,000 share equity repurchase program.
Subsequent to June 30, 1996, the Company repurchased an additional 341,400
shares at an aggregate purchase price of $3,638 under the same program.
13
PART II
-------
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- -------
NVR held its Annual Meeting of Shareholders on May 7, 1996. Four
matters were voted upon at the Annual Meeting:
VOTES WITHHELD AUTHORITY
MATTER FOR TO VOTE
- ---------------------------------------- ---------- ------------------
1. Election of three directors to serve
three year terms:
Dwight C. Schar 13,966,318 381,520
George E. Slye 13,970,905 376,933
Frederick W. Zuckerman 13,968,403 379,435
VOTES VOTES NOT
FOR AGAINST ABSTENTIONS VOTED
---------- --------- ----------- ---------
2. Adoption of the Management
Long-Term Stock Option Plan 8,930,646 2,338,319 608,312 3,488,847
3. Adoption of the Directors
Long-Term Stock Option Plan 9,219,025 2,089,530 618,259 3,439,310
4. Ratification of appointment of KPMG
Peat Marwick LLP as independent
auditors for NVR 13,945,800 367,265 34,773 1,018,286
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. 11. Computation of Earnings per Share.
b. 27. Financial Data Schedule.
c. The Company did not file any reports on Form 8-K during the
quarter ended June 30, 1996.
14
SIGNATURE
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 thereunto duly authorized.
July 25, 1996 NVR, Inc.
By: /s/ Paul C. Saville
---------------------------------
Paul C. Saville
Senior Vice President Finance and
Chief Financial Officer
15
EXHIBIT INDEX
EXHIBIT
NUMBER PAGE
- ------- -------------------------------------------------- ----
11. Computation of Earnings per Share 17
27 Financial Data Schedule 18
EXHIBIT 11
NVR, INC.
Computation of Earnings Per Share
(amounts in thousands, except per share amounts)
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
--------------------------- -------------------------
1996 1995 1996 1995
-------- -------- -------- --------
1. Net income $ 8,770 $ 5,261 $ 12,510 $ 6,676
======== ======== ======== ========
2. Weighted average number of shares
outstanding 15,198 15,365 15,240 15,316
3. Shares issuable upon exercise
of dilutive options, warrants and
subscriptions outstanding during
period, based on average market
price 1,176 - 908 79
-------- -------- -------- --------
4. Shares issuable upon exercise
of dilutive options, warrants and
subscriptions outstanding during
period, based on higher of average
or end of period market price 1,176 - 908 79
-------- -------- -------- --------
5. Weighted average number of shares
and share equivalents outstanding
(2 + 3) 16,374 15,365 16,148 15,395
======== ======== ======== ========
6. Weighted average number of shares
outstanding assuming full dilution
(2 + 4) 16,374 15,365 16,148 15,395
======== ======== ======== ========
7. Net income per share and
share equivalents (1/5) $ 0.54 $ 0.34 $ 0.77 $ 0.43
======== ======== ======== ========
8. Net income per share, assuming
full dilution (1/6) $ 0.54 $ 0.34 $ 0.77 $ 0.43
======== ======== ======== ========
5
1,000
6-MOS
DEC-31-1996
JAN-01-1996
JUN-30-1996
47,169
0
10,516
0
185,290
0
18,692
0
610,642
0
191,613
0
0
184
150,044
610,642
483,767
499,515
419,202
42,095
4,066
0
9,429
24,723
12,213
12,510
0
0
0
12,510
0.77
0.77
ITEM REPRESENTS THE NON-CASH AMORTIZATION OF EXCESS REORGANIZATION VALUE.
