-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NFP3FQq4dfo/PuWyI8mmyWBMjfApQVj1TImEUZX+dtsWk7K7+uZ/9aSgSWw0V7de 8ahMooKBmvnZVWCPtkV/LQ== 0000912057-96-015406.txt : 19960726 0000912057-96-015406.hdr.sgml : 19960726 ACCESSION NUMBER: 0000912057-96-015406 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960725 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: NVR INC CENTRAL INDEX KEY: 0000906163 STANDARD INDUSTRIAL CLASSIFICATION: OPERATIVE BUILDERS [1531] IRS NUMBER: 541394360 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-12378 FILM NUMBER: 96598793 BUSINESS ADDRESS: STREET 1: 7601 LEWISVILLE RD STREET 2: STE 300 CITY: MCLEAN STATE: VA ZIP: 22102 BUSINESS PHONE: 7037612000 MAIL ADDRESS: STREET 1: 7601 LEWINSVILLE RD CITY: MCLEAN STATE: VA ZIP: 22102 10-Q 1 10-Q 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 - ------------------------------------------------------------------------------- (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) (Not Applicable) - ------------------------------------------------------------------------------- (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 - ------------------------------------------------------------------------------- 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 EX-11 2 EXHIBIT 11 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 ======== ======== ======== ========
EX-27.1 3 EXHIBIT 27.1 (FDS)
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM NVR, INC.'S CONSOLIDATED FINANCIAL STATEMENTS INCLUDED IN FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 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.
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