-----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, U6jPrL/RfIjpRbivgJFx9ytgxKMCgER7JNPnJsztud6At29+n+PcthK8jIg9vsDl 3Cgy/fYHFoViipcwjQJLXQ== 0000928385-98-000322.txt : 19980225 0000928385-98-000322.hdr.sgml : 19980225 ACCESSION NUMBER: 0000928385-98-000322 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19980224 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/A SEC ACT: SEC FILE NUMBER: 001-12378 FILM NUMBER: 98548262 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/A 1 AMENDMENT #1 TO THE FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QA (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1997 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 April 16, 1997, there were 11,850,654 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-QA INDEX =====================================================
Page ---- PART I FINANCIAL INFORMATION ------ Item 1. NVR, Inc. Consolidated Financial Statements ------------------------------------------- Consolidated Balance Sheets at March 31, 1997 (unaudited) and December 31, 1996......................................... 4 Consolidated Statements of Income for the Three Months Ended March 31, 1997 (unaudited) and March 31, 1996 (unaudited)................................................ 6 Consolidated Statements of Cash Flows for the Three Months Ended March 31, 1997 (unaudited) and March 31, 1996 (unaudited)................................................ 7 Notes to Consolidated Financial Statements................................ 8 NVR Homes, Inc. Consolidated Financial Statements ------------------------------------------------- Consolidated Balance Sheets at March 31, 1997 (unaudited) and December 31, 1996......................................... 10 Consolidated Statements of Income for the Three Months Ended March 31, 1997 (unaudited) and March 31, 1996 (unaudited)................................................ 11 Consolidated Statements of Cash Flows for the Three Months Ended March 31, 1997 (unaudited) and March 31, 1996 (unaudited)................................................ 12 Notes to Consolidated Financial Statements................................ 13 NVR Financial Services, Inc. Consolidated Financial Statements -------------------------------------------------------------- Consolidated Balance Sheets at March 31, 1997 (unaudited) and December 31, 1996......................................... 14 Consolidated Statements of Income for the Three Months Ended March 31, 1997 (unaudited) and March 31, 1996 (unaudited)................................................ 15 Consolidated Statements of Cash Flows for the Three Months Ended March 31, 1997 (unaudited) and March 31, 1996 (unaudited)................................................ 16 Notes to Consolidated Financial Statements................................ 17 RVN, Inc. Financial Statements ------------------------------ Balance Sheets at March 31, 1997 (unaudited) and December 31, 1996......................................... 18 Statements of Income for the Three Months Ended March 31, 1997 (unaudited) and March 31, 1996 (unaudited)................................................ 18 Statements of Cash Flows for the Three Months Ended March 31, 1997 (unaudited) and March 31, 1996 (unaudited)................................................ 19 Notes to Financial Statements............................................. 20
NVR, INC. FORM 10-QA INDEX-CONTINUED =====================================================
Page ---- Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations............... 21 PART II OTHER INFORMATION ------- Item 6. Exhibits and Reports on Form 8-K.................. 26 Exhibit Index..................................... 27 Signature......................................... 28
3 PART I ------ ITEM 1. - ------- NVR, INC. Consolidated Balance Sheets (dollars in thousands, except share data)
MARCH 31, 1997 DECEMBER 31, 1996 -------------- ----------------- ASSETS (unaudited) HOMEBUILDING: Cash and cash equivalents $ 53,299 $ 71,533 Receivables 5,902 2,927 Inventory: Lots and housing units, covered under sales agreements with customers 127,866 126,456 Unsold lots and housing units 38,013 37,940 Manufacturing materials and other 4,848 7,297 -------- -------- 170,727 171,693 Property, plant and equipment, net 17,734 17,916 Reorganization value in excess of amounts allocable to identifiable assets, net 74,205 75,818 Contract land deposits 36,310 36,383 Other assets 21,131 21,008 -------- -------- 379,308 397,278 -------- -------- FINANCIAL SERVICES: Cash and cash equivalents 3,960 3,247 Mortgage loans held for sale, net 91,510 75,735 Mortgage servicing rights, net 6,266 6,309 Property and equipment, net 738 917 Reorganization value in excess of amounts allocable to identifiable assets, net 12,516 12,788 Other assets 4,535 4,891 -------- -------- 119,525 103,887 -------- -------- TOTAL ASSETS $498,833 $501,165 ======== ========
4 NVR, INC. Consolidated Balance Sheets (dollars in thousands, except share data)
MARCH 31, 1997 DECEMBER 31, 1996 ---------------- ------------------ (unaudited) LIABILITIES AND SHAREHOLDERS' EQUITY HOMEBUILDING: Accounts payable $ 50,346 $ 54,894 Accrued expenses and other liabilities 85,528 85,260 Notes payable 85 86 Other term debt 14,036 14,043 Senior notes 120,000 120,000 -------- -------- 269,995 274,283 -------- -------- FINANCIAL SERVICES: Accounts payable and other liabilities 7,211 7,409 Notes payable 86,955 67,463 -------- -------- 94,166 74,872 -------- -------- Total liabilities 364,161 349,155 -------- -------- COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY: Common stock, $0.01 par value; 60,000,000 shares authorized; 19,934,130 and 19,881,515 shares issued as of March 31, 1997 and December 31, 1996, respectively 199 199 Paid-in-capital 155,810 157,842 Retained earnings 52,861 47,098 Less treasury stock at cost- 7,812,810 and 6,307,108 at March 31, 1997 and December 31, 1996, respectively (74,198) (53,129) -------- -------- Total shareholders' equity 134,672 152,010 -------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $498,833 $501,165 ======== ========
See notes to consolidated financial statements. 5 NVR, INC. Consolidated Statements of Income (dollars in thousands, except per share data) (unaudited)
THREE MONTHS ENDED THREE MONTHS ENDED MARCH 31, 1997 MARCH 31,1996 ------------------- ------------------- HOMEBUILDING: Revenues $ 238,987 $ 200,235 Other income 509 405 Cost of sales (207,469) (173,845) Selling, general and administrative (16,094) (14,049) Amortization of reorganization value in excess of amounts allocable to indentifiable assets (1,613) (1,761) --------- --------- Operating income 14,320 10,985 Interest expense (4,057) (4,160) --------- --------- Homebuilding income 10,263 6,825 --------- --------- FINANCIAL SERVICES: Mortgage banking fees 5,122 5,999 Interest income 1,083 1,163 Other income 53 3 General and administrative (5,029) (5,822) Amortization of reorganization value in excess of amounts allocable to identifiable assets (272) (272) Interest expense (390) (504) --------- --------- Operating income 567 567 --------- --------- TOTAL SEGMENT INCOME 10,830 7,392 Income tax expense (5,067) (3,652) --------- --------- Net income $ 5,763 $ 3,740 ========= ========= EARNINGS PER SHARE $ 0.42 $ 0.24 ========= =========
See notes to consolidated financial statements. 6 NVR, INC. Consolidated Statements of Cash Flows (dollars in thousands) (unaudited)
THREE MONTHS ENDED THREE MONTHS ENDED MARCH 31, 1997 MARCH 31,1996 ------------------- ------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 5,763 $ 3,740 Adjustments to reconcile net income to net cash used by operating activities: Depreciation and amortization 3,286 3,748 Interest accrued and added to bond principal - 346 Mortgage loans closed (297,698) (289,228) Proceeds from sales of mortgage loans 282,630 302,564 Gain on sale of loans (3,092) (3,260) Net change in assets and liabilities: Decrease/(increase) in inventories 966 (19,336) Decrease/(increase) in receivables (2,663) 500 Decrease in accounts payable and accrued expenses (4,634) (5,278) Other, net - (1,650) --------- --------- Net cash used by operating activities (15,442) (7,854) --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sales of mortgage-backed securities 6,910 - Purchase of property, plant and equipment (684) (901) Principal payments on mortgage-backed securities 1,013 5,529 Proceeds from sales of mortgage servicing rights 2,102 5,442 Purchases of mortgage servicing rights - (85) Other, net (712) (2,500) --------- --------- Net cash provided by investing activities 8,629 7,485 --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Decrease in other term debt (57) (52) Redemption of bonds (7,042) (3,622) Net borrowings (repayments) under notes payable 19,492 (6,382) Purchase of treasury stock (23,475) - Other, net 374 89 --------- --------- Net cash used by financing activities (10,708) (9,967) --------- --------- Net decrease in cash (17,521) (10,336) Cash, beginning of the period 74,780 55,567 --------- --------- Cash, end of period $ 57,259 $ 45,231 ========= ========= SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Interest paid during the period $ 1,387 $ 2,443 ========= ========= Income taxes paid, net of refunds $ 161 $ 4,354 ========= =========
See notes to consolidated financial statements. 7 NVR, INC. Notes to Consolidated Financial Statements (dollars in thousands, except per share and 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. 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 three month period ended March 31, 1997 are not necessarily indicative of the results that may be expected for the year ending December 31, 1997. 2. ADOPTION OF NEW ACCOUNTING PRINCIPLES During the quarter ended March 31, 1997, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 125, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. Such adoption did not have a material impact on the Company's financial condition or results of operations. See Management's Discussion and Analysis of Financial Condition and Results of Operations on page 22 for a discussion of SFAS No. 128, Earnings per Share. 3. SHAREHOLDERS' EQUITY A summary of changes in shareholders' equity is presented below:
COMMON PAID-IN RETAINED TREASURY STOCK CAPITAL EARNINGS STOCK ------ --------- -------- ---------- BALANCE, DECEMBER 31, 1996 $199 $157,842 $47,098 $(53,129) Net income - - 5,763 - Option activity - 374 - - Treasury Stock purchases - - - (23,475) Performance share activity - (2,406) - 2,406 ------ -------- ------- -------- BALANCE, MARCH 31, 1997 $199 $155,810 $52,861 $(74,198) ====== ======== ======= ========
During the quarter ended March 31, 1997, the Company repurchased approximately 1,678,000 shares of its common stock at an aggregate purchase price of $23,475. Approximately 172,000 of those shares were reissued from the treasury during February 1997 in satisfaction of an employee benefit liability accrued at December 31, 1996. The average cost basis for the shares reissued from the treasury 8 NVR, INC. Notes to Consolidated Financial Statements (dollars in thousands, except per share and share data) was $13.97 per share. Subsequent to March 31, 1997, the Company repurchased an additional 272,600 shares at an aggregate purchase price of $4,058. In addition, 56,112 options were exercised during the first quarter of 1997, with NVR realizing approximately $374 in aggregate equity proceeds. 4. DEBT During the quarter ended March 31, 1997, NVR Mortgage Finance, Inc. ("NVR Finance") entered into an additional annually renewable, uncommitted gestation mortgage-backed security repurchase agreement (the "Repo Facility"). The maximum amount available under the Repo Facility is $45,000, bringing NVR's total available borrowings under all such similar agreements to $145,000. Amounts outstanding under the Repo Facility accrue interest at various rates tied to the federal funds rate, depending on the type of collateral and are collateralized by gestation mortgage-backed securities. The covenants under the Repo Facility are consistent with NVR Finance's mortgage warehouse credit facility. 9 NVR HOMES, INC. Consolidated Balance Sheets (dollars in thousands, except share data)
MARCH 31, 1997 DECEMBER 31, 1996 --------------- ----------------- ASSETS (unaudited) Cash and cash equivalents $ 53,274 $ 71,471 Receivables 6,408 3,247 Inventory: Lots and housing units, covered under sales agreements with customers 127,866 126,456 Unsold lots and housing units 38,013 37,940 Manufacturing materials and other 4,848 7,297 -------- -------- 170,727 171,693 Property, plant and equipment, net 10,192 10,272 Reorganization value in excess of amounts allocable to identifiable assets, net 74,205 75,818 Contract land deposits 36,310 36,383 Other assets 18,029 18,058 -------- -------- TOTAL ASSETS $369,145 $386,942 ======== ======== LIABILITIES AND SHAREHOLDER'S EQUITY Accounts payable $ 49,663 $ 54,325 Accrued expenses and other liabilities 54,633 75,451 Advances from affiliates, net 112,603 107,896 Other term debt 5,803 5,859 -------- -------- TOTAL LIABILITIES 222,702 243,531 SHAREHOLDER'S EQUITY: Common stock, $0.01 par value; 100 shares authorized; 100 shares issued and outstanding - - Additional paid-in capital 94,688 94,688 Retained earnings 51,755 48,723 -------- -------- Total shareholder's equity 146,443 143,411 -------- -------- TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $369,145 $386,942 ======== ========
See notes to consolidated financial statements. 10 NVR HOMES, INC. Consolidated Statements of Income (dollars in thousands) (unaudited)
THREE MONTHS THREE MONTHS ENDED ENDED MARCH 31, 1997 MARCH 31, 1996 --------------- --------------- REVENUES: Homebuilding revenues $238,987 $200,235 Other income 509 399 -------- -------- Total revenues 239,496 200,634 EXPENSES: Cost of sales 207,469 173,845 Interest expense-external 333 428 Interest expense-affiliates 3,669 3,669 Selling, general and administrative 20,357 13,971 Amortization of reorganization value in excess of amounts allocable to identifiable assets/goodwill 1,613 1,761 -------- -------- Total expenses 233,441 193,674 Income before income tax expense 6,055 6,960 Income tax expense (3,023) (3,383) -------- -------- NET INCOME $ 3,032 $ 3,577 ======== ========
See notes to the consolidated financial statements. 11 NVR HOMES, INC. Consolidated Statements of Cash Flows (dollars in thousands) (unaudited)
THREE MONTHS THREE MONTHS ENDED ENDED MARCH 31, 1997 MARCH 31, 1996 --------------- --------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 3,032 $ 3,577 Adjustments to reconcile net income to net cash used by operating activities: Depreciation and amortization 2,325 2,451 Net change in assets and liabilities: Decrease (increase) in inventories 966 (19,336) Increase in receivables (3,161) (40) Decrease in accounts payable and accrued liabilities (25,480) (15,232) Other, net 63 (1,575) -------- -------- Net cash used by operating activities (22,255) (30,155) -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, plant & equipment (594) (1,036) Proceeds from sale of property, plant & equipment 1 21 -------- -------- Net cash used by investing activities (593) (1,015) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Increase in advances from affiliates 4,707 21,480 Principal repayments of term debt (56) (52) -------- -------- Net cash provided by financing activities 4,651 21,428 -------- -------- Net decrease in cash (18,197) (9,742) Cash, beginning of the period 71,471 51,911 -------- -------- Cash, end of period $ 53,274 $ 42,169 ======== ======== SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Interest paid during the period $ 3,955 $ 3,969 ======== ======== Taxes paid during the period (net of refunds) $ 17,023 $ 15,135 ======== ========
See notes to consolidated financial statements. 12 NVR HOMES, INC. Notes to Consolidated Financial Statements (dollars in thousands) 1. BASIS OF PRESENTATION The accompanying unaudited, consolidated financial statements include the accounts of NVR Homes, Inc. ("Homes" or the "Company") and its subsidiaries. Homes is a wholly owned subsidiary of NVR, Inc. ("NVR"). Homes conducts all of NVR's homebuilding operations. The statements are provided pursuant to Homes' status as a guarantor of NVR's 11% Senior Notes due 2003 (the "Senior Notes"). 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. 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 three month period ended March 31, 1997 are not necessarily indicative of the results that may be expected for the year ending December 31, 1997. 2. ADOPTION OF NEW ACCOUNTING PRINCIPLE During the quarter ended March 31, 1997, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 125, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. Such adoption did not have a material impact on the Company's financial condition or results of operations. 13 NVR FINANCIAL SERVICES, INC. Consolidated Balance Sheets (dollars in thousands, except share data)
MARCH 31, DECEMBER 31, 1997 1996 ---------- ------------- (unaudited) ASSETS FINANCIAL SERVICES: Cash and cash equivalents $ 3,960 $ 3,247 Receivables 3,085 3,596 Mortgage loans held for sale, net 91,510 75,735 Property and equipment, net 738 917 Real estate acquired through foreclosure 660 538 Mortgage servicing rights, net 6,266 6,309 Reorganization value in excess of amount allocable to identifiable assets, net 12,516 12,788 Other assets 780 753 -------- -------- 119,515 103,883 LIMITED-PURPOSE FINANCING SUBSIDIARIES: Mortgage-backed securities, net 30,181 37,294 Funds held by trustee 1,330 557 Receivables 471 548 Other assets 508 840 -------- -------- 32,490 39,239 -------- -------- TOTAL ASSETS $152,005 $143,122 ======== ======== LIABILITIES AND SHAREHOLDER'S EQUITY FINANCIAL SERVICES: Accounts payable $ 5,478 $ 3,480 Accrued expenses and other liabilities 2,345 4,286 Due to affiliates 1,183 1,173 Notes payable 86,955 67,463 -------- -------- 95,961 76,402 LIMITED-PURPOSE FINANCING SUBSIDIARIES: Accrued expenses and other liabilities 999 771 Bonds payable, net 31,481 38,464 -------- -------- 32,480 39,235 -------- -------- TOTAL LIABILITIES 128,441 115,637 COMMITMENTS AND CONTINGENCIES SHAREHOLDER'S EQUITY: Common stock, $1 par value, 1,000 shares authorized; 100 shares issued and outstanding - - Additional paid-in capital 24,685 28,711 Retained deficit (1,121) (1,226) -------- -------- Total shareholder's equity 23,564 27,485 -------- -------- TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $152,005 $143,122 ======== ========
See notes to consolidated financial statements. 14 NVR FINANCIAL SERVICES, INC. Consolidated Statements of Income (dollars in thousands) (unaudited)
THREE MONTHS THREE MONTHS ENDED ENDED MARCH 31, 1997 MARCH 31, 1996 --------------- --------------- FINANCIAL SERVICES: Interest income $ 1,083 $ 1,162 Gain on sales of mortgage loans 3,092 3,260 Servicing fees 715 1,459 Title fees 1,315 1,280 Other, net 50 1 ------- ------- Total revenues 6,255 7,162 ------- ------- Interest expense (390) (504) Interest on advances from affiliates (328) (135) General and administrative (4,872) (5,293) Amortization of mortgage servicing rights (157) (529) Amortization of reorganization value in excess of amounts allocable to identifiable assets (272) (272) ------- ------- Total expenses (6,019) (6,733) ------- ------- Operating income 236 429 LIMITED-PURPOSE FINANCING SUBSIDIARIES: Interest income 596 2,152 Interest expense (545) (2,105) Other, net (48) (44) ------- ------- Operating income 3 3 ------- ------- TOTAL OPERATING INCOME 239 432 Income tax expense (134) (450) ------- ------- NET INCOME (LOSS) $ 105 $ (18) ======= =======
See notes to consolidated financial statements. 15 NVR FINANCIAL SERVICES, INC. Consolidated Statements of Cash Flows (dollars in thousands) (unaudited)
THREE MONTHS THREE MONTHS ENDED ENDED MARCH 31, 1997 MARCH 31, 1996 --------------- --------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 105 $ (18) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Accretion of net discount on mortgage-backed securities (63) (100) Amortization 537 886 Gain on sales of loans (3,092) (3,260) Mortgage loans closed (297,698) (289,228) Proceeds from sales of mortgage loans 282,630 302,564 Interest accrued and added to bond principal - 346 Other, net 586 (2,571) --------- --------- Net cash provided by (used in) operating activities (16,995) 8,619 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: (Increase) decrease in funds held by trustee (773) (2,712) Principal payments on mortgage-backed securities 1,013 5,529 Proceeds from sales of mortgage-backed securities 6,910 - Purchases of office facilities and equipment (25) (60) Proceeds from sales of mortgage servicing rights 2,102 5,442 Purchases of mortgage servicing rights - (85) Other, net 47 191 --------- --------- Net cash provided by investing activities 9,274 8,305 --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Increase (decrease) in notes payable 19,492 (6,382) Redemption of bonds (7,042) (3,622) Return of capital/dividend to parent (4,026) (6,000) Change in due to affiliates 10 (1,514) --------- --------- Net cash provided by (used in) financing activities 8,434 (17,518) --------- --------- Net increase (decrease) in cash 713 (594) Cash, beginning of period 3,247 3,656 --------- --------- Cash, end of period $ 3,960 $ 3,062 ========= ========= SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Interest paid during the period $ 1,167 $ 2,035 ========= ========= Taxes paid during the period, net of refunds $ (79) $ 402 ========= =========
See notes to consolidated financial statements. 16 NVR FINANCIAL SERVICES, INC. Notes to Consolidated Financial Statements (dollars in thousands) 1. BASIS OF PRESENTATION The accompanying unaudited, consolidated financial statements include the accounts of NVR Financial Services, Inc. ("NVRFS" or the "Company") and its subsidiaries. NVRFS is a wholly owned subsidiary of NVR, Inc. ("NVR"). NVRFS, through its subsidiaries, conducts all of NVR's mortgage banking operations. The statements are provided pursuant to NVRFS' status as a guarantor of NVR's 11% Senior Notes due 2003 (the "Senior Notes"). 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. 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 three month period ended March 31, 1997 are not necessarily indicative of the results that may be expected for the year ending December 31, 1997. 2. ADOPTION OF NEW ACCOUNTING PRINCIPLE During the quarter ended March 31, 1997, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 125, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. Such adoption did not have a material impact on the Company's financial condition or results of operations. 3. SHAREHOLDER'S EQUITY A summary of changes in shareholder's equity is presented below:
ADDITIONAL COMMON PAID-IN RETAINED TOTAL STOCK CAPITAL (DEFICIT) EQUITY ------ ------- --------- ------ BALANCE, DECEMBER 31, 1996 $ - $28,711 $(1,226) $27,485 Return of capital - (4,026) - (4,026) Net income - - 105 105 ------ ------- ------- ------- BALANCE, MARCH 31, 1997 $ - $24,685 $(1,121) $23,564 ====== ======= ======= =======
4. DEBT During the quarter ended March 31, 1997, NVR Mortgage Finance, Inc. ("NVR Finance"), a wholly owned subsidiary of NVRFS, entered into an additional annually renewable, uncommitted gestation mortgage-backed security repurchase agreement (the "Repo Facility"). The maximum amount available under the Repo Facility is $45,000, bringing NVRFS's total available borrowings under all such similar agreements to $145,000. Amounts outstanding under the Repo Facility accrue interest at various rates tied to the federal funds rate, depending on the type of collateral and are collateralized by gestation mortgage-backed securities. The covenants under the Repo Facility are consistent with NVR Finance's mortgage warehouse credit facility. 17 RVN, INC. Balance Sheets (dollars in thousands, except share data)
MARCH 31, DECEMBER 31, 1997 1996 --------- ------------ (unaudited) ASSETS Cash and cash equivalents $ 25 $ 62 Royalty receivable 1,626 1,441 ------ ------ TOTAL ASSETS $1,651 $1,503 ====== ====== LIABILITIES AND SHAREHOLDER'S EQUITY Accounts payable and accrued expenses $ 569 $ 530 COMMITMENTS AND CONTINGENCIES SHAREHOLDER'S EQUITY: Common stock, $1 par value; 3,000 shares authorized; 1,000 shares issued and outstanding 1 1 Additional paid-in capital 64 64 Retained earnings 1,017 908 ------ ------ Total shareholder's equity 1,082 973 ------ ------ TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $1,651 $1,503 ====== ======
RVN, INC. Statements of Income (dollars in thousands) (unaudited)
THREE THREE MONTHS MONTHS ENDED ENDED MARCH 31, MARCH 31, 1997 1996 ---------- --------- REVENUES: Royalty revenue $ 4,548 $ - Other income 3 - ------- --------- 4,551 - EXPENSES: General and administrative (14) - ------- --------- Income before income tax expense 4,537 - Income tax expense (1,588) - ------- --------- NET INCOME $ 2,949 $ - ======= =========
See notes to financial statements 18 RVN, INC. Statements of Cash Flows (dollars in thousands) (unaudited)
THREE MONTHS THREE MONTHS ENDED ENDED MARCH 31, 1997 MARCH 31, 1996 --------------- -------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 2,949 $ - Adjustments to reconcile net income to net cash provided by operating activities: Increase in royalty receivables (185) - Increase in accounts payable and accrued liabilities 39 - ------- -------- Net cash provided by operating activities 2,803 - ------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Dividend to parent (2,840) - ------- -------- Net cash used by financing activities (2,840) - ------- -------- Net decrease in cash (37) - Cash, beginning of period 62 - ------- -------- Cash, end of period $ 25 $ - ======= ======== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Interest paid during the period $ - $ - ======= ======== Taxes paid during the period, net of refunds $ 1,524 $ - ======= ========
See notes to financial statements. 19 RVN, INC. Notes to Financial Statements (dollars in thousands) 1. BASIS OF PRESENTATION The accompanying unaudited financial statements include the accounts of RVN, Inc. ("RVN" or the "Company"). RVN is a wholly owned subsidiary of NVR, Inc. ("NVR"). The statements are provided pursuant to RVN's status as a guarantor of NVR's 11% Senior Notes due 2003 (the "Senior Notes"). 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. 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 three month period ended March 31, 1997 are not necessarily indicative of the results that may be expected for the year ending December 31, 1997. NVR capitalized RVN on October 1, 1996. As such, there is no financial information to report for the quarter ended March 31, 1996. 2. ADOPTION OF NEW ACCOUNTING PRINCIPLE During the quarter ended March 31, 1997, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 125, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. Such adoption did not have a material impact on the Company's financial condition or results of operations. 3. SHAREHOLDER'S EQUITY A summary of changes in shareholder's equity is presented below:
ADDITIONAL COMMON PAID-IN RETAINED STOCK CAPITAL EARNINGS ------ ------- ----------- BALANCE, DECEMBER 31, 1996 $1 $64 $ 908 Net income - - 2,949 Dividend to parent - - (2,840) ------ ------- ------- BALANCE, MARCH 31, 1997 $1 $64 $ 1,017 ====== ======= =======
20 ITEM 2. - ------- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (dollars in thousands, except per share and share data) FORWARD-LOOKING STATEMENTS Some of the statements in this Form 10-QA, as well as statements made by the Company in periodic press releases, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance of the Company to be materially different from any 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, interest rate changes, competition, the availability and cost of land and other raw materials used by the Company in its homebuilding operations, shortages of labor, weather related slow downs, building moratoria, governmental regulation, the ability of the Company to integrate any acquired business, certain conditions in financial markets and other factors over which the Company has little or no control. NVR, INC. CONSOLIDATED - ---------------------- RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996 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 MARCH 31, 1997 AND 1996 During the first quarter of 1997, homebuilding operations generated revenues of $238,987 compared to revenues of $200,235 in the first quarter of 1996. The change in revenues was due primarily to an 18.8% increase in the number of homes settled from 1,107 units in 1996 to 1,315 units in 1997. The increase in settlements is attributed to the mild winter weather that was experienced in most of the Company's markets in the current year quarter as compared to the prior year quarter. New orders for the 1997 period of 1,445 were comparable to the 1,492 new orders generated in the first quarter ended March 31, 1996. Gross profit margins were 13.2% in each of the quarters ended March 31, 1997 and 1996. SG&A expenses for the first quarter of 1997 increased $2,045 from the first quarter of 1996, but as a percentage of revenues, decreased to 6.7% in 1997 from 7.0% in 1996. The increase in SG&A dollars is due primarily to the increase in revenues noted above. Backlog units and dollars were 2,596 and $496,993, respectively, at March 31, 1997 compared to 2,856 and $519,704, respectively, at March 31, 1996. The decrease in backlog units and dollars is primarily attributable to the 18.8% increase in the number of homes settled in the current quarter as compared to the same 1996 period. 21 The Company believes that earnings before interest, taxes, depreciation and amortization ("EBITDA") provides a meaningful comparison of operating performance of the homebuilding segment 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 HOMEBUILDING EBITDA:
THREE MONTHS ENDED MARCH 31, ------------------------------------------ 1997 1996 --------------------- ----------- Operating income $14,320 $10,985 Depreciation 830 718 Amortization of excess reorganization value 1,613 1,761 ------- ------- HOMEBUILDING EBITDA $16,763 $13,464 ======= ======= % OF HOMEBUILDING REVENUES 7.0% 6.7% ======= =======
Homebuilding EBITDA in the first quarter of 1997 was $3,299 higher than in the first quarter of 1996, and, as a percentage of homebuilding revenues, increased from 6.7% to 7.0%. FINANCIAL SERVICES SEGMENT THREE MONTHS ENDED MARCH 31, 1997 AND 1996 The financial services segment generated operating income of $567 for each of the three months ended March 31, 1997 and 1996. Loan closings were $297,698 and $289,228 during the respective quarters ended March 31, 1997 and 1996, representing an increase of 3%. Mortgage banking fees decreased $877, or 15%, when comparing the respective quarters of March 31, 1997 and 1996. This decrease is attributed to the lower servicing fee income resulting from the decrease in the servicing portfolio. The total servicing portfolio at March 31, 1997 was $570,955 compared with $1,385,580 at March 31, 1996. A summary of mortgage banking fees is noted below:
MORTGAGE BANKING FEES: 1997 1996 ------- ------- Net gain on sale of loans $3,092 $3,260 Servicing 715 1,459 Title services 1,315 1,280 ------ ------ $5,122 $5,999 ====== ======
Subsequent to March 31, 1997, the mortgage banking operations began the sale of its remaining mortgage servicing portfolio. The sale of the remaining mortgage servicing portfolio and the ongoing sale of servicing rights on a flow basis are the result of the concentration of the mortgage banking operations on the primary business of providing mortgage finance and related services to NVR and other homebuyers. PENDING ADOPTION OF NEW ACCOUNTING PRINCIPLE In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 128, Earnings per Share. SFAS No. 128 supersedes APB Opinion No. 15, Earnings per Share ("Opinion No. 15"), and requires the calculation and dual presentation of Basic and Diluted earnings per share ("EPS"), replacing the measures of Primary and Fully- diluted EPS as reported under Opinion No. 15. SFAS No. 128 is effective for financial statements issued for periods ending after December 15, 1997; earlier application is not permitted. Accordingly, EPS for the first quarters of 1997 and 1996 presented on the accompanying statements of income are calculated under the guidance of Opinion No. 15. 22 Under SFAS No. 128, Basic EPS would have been $0.45 and $0.24 per share for the quarters ended March 31, 1997 and 1996, respectively. Diluted EPS would have been $0.42 and $0.23 per share for the same respective quarters. 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 agreement to fund its working capital needs, under which no amounts were borrowed during the first quarter of 1997. 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") is currently engaged in discussions to renew its mortgage warehouse facility, which expires in the second quarter of 1997, and expects to have a new agreement in place prior to the original agreement's expiration date. During the quarter ended March 31, 1997, NVR Finance entered into an additional annually renewable, uncommitted gestation mortgage-backed security repurchase agreement (the "Repo Facility"). The maximum amount available under the Repo Facility is $45,000, bringing NVR's total available borrowings under all such similar agreements to $145,000. Amounts outstanding under the Repo Facility accrue interest at various rates tied to the federal funds rate, depending on the type of collateral and are collateralized by gestation mortgage-backed securities. The covenants under the Repo Facility are consistent with NVR Finance's mortgage warehouse credit facility. The Company believes that internally generated cash and borrowings available under credit facilities will be sufficient to satisfy near and long term cash requirements for working capital in both its homebuilding and mortgage banking operations. OTHER ELEMENTS IMPACTING LIQUIDITY During the quarter ended March 31, 1997, the Company repurchased approximately 1,678,000 shares of its common stock at an aggregate purchase price of $23,475. The Company may, from time to time, repurchase additional shares of its common stock, pursuant to repurchase authorizations by the Board of Directors and subject to the restrictions contained within the Company's debt agreements. Subsequent to March 31, 1997, the Company repurchased an additional 272,600 shares at an aggregate purchase price of $4,058. NVR HOMES, INC. CONSOLIDATED - ---------------------------- RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996 NVR Homes, Inc. ("Homes" or the "Company") is a wholly owned subsidiary of NVR, Inc. ("NVR"). Homes conducts all of NVR's homebuilding operations. 23 During the first quarter of 1997, Homes generated revenues of $238,987 compared to revenues of $200,235 in the first quarter of 1996. The change in revenues was due primarily to an 18.8% increase in the number of homes settled from 1,107 units in 1996 to 1,315 units in 1997. The increase in settlements is attributed to the mild winter weather that was experienced in most of the Company's markets in the current year quarter as compared to the prior year quarter. New orders for the 1997 period of 1,445 were comparable to the 1,492 new orders generated in the first quarter ended March 31, 1996. Gross profit margins were 13.2% in each of the quarters ended March 31, 1997 and 1996. SG&A expenses for the first quarter of 1997 increased $6,386 from the first quarter of 1996, and as a percentage of revenues increased to 8.5% in 1997 from 7.0% in 1996. The dollar increase in SG&A is partially due to increased costs that correspond to the aforementioned increase in revenues. Further, beginning on October 1, 1996, Homes incurs royalty expenses for use of the Ryan Homes and NVHomes tradenames based on a percentage of settlement revenues. The tradenames are owned by RVN, Inc., a subsidiary of NVR. During the quarter ended March 31, 1997, Homes incurred royalty expenses totaling $4,548. Backlog units and dollars were 2,596 and $496,993, respectively, at March 31, 1997 compared to 2,856 and $519,704, respectively, at March 31, 1996. The decrease in backlog units and dollars is primarily attributable to the 18.8% increase in the number of homes settled in the current quarter as compared to the same 1996 period. LIQUIDITY AND CAPITAL RESOURCES Homes generally provides for its working capital cash requirements using cash generated from operations and a short-term credit facility. The Company has available a $60,000 Working Capital Revolving Credit agreement to fund its working capital needs, under which no amounts were borrowed during the first quarter of 1997. The Company believes that internally generated cash and borrowings available under credit facilities will be sufficient to satisfy near and long term cash requirements for working capital in its homebuilding operations. NVR FINANCIAL SERVICES, INC. CONSOLIDATED - ----------------------------------------- RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996 NVR Financial Services, Inc. ("NVRFS" or the "Company") is a wholly owned subsidiary of NVR, Inc. ("NVR"). NVRFS, through its subsidiaries, conducts all of NVR's mortgage banking operations. NVRFS generated operating income of $239 and $432 for the three months ended March 31, 1997 and 1996, respectively. Loan closings were $297,698 and $289,228 during the respective quarters ended March 31, 1997 and 1996, representing an increase of 3%. Mortgage banking fees decreased $877, or 15%, when comparing the respective quarters of March 31, 1997 and 1996. This decrease is attributed to the lower servicing fee income resulting from the decrease in the servicing portfolio. The total servicing portfolio at March 31, 1997 was $570,955 compared with $1,385,580 at March 31, 1996. A summary of mortgage banking fees is noted below: 24
MORTGAGE BANKING FEES: 1997 1996 ------- ------- Net gain on sale of loans $3,092 $3,260 Servicing 715 1,459 Title services 1,315 1,280 ------ ------ $5,122 $5,999 ====== ======
The decrease in mortgage banking fees was partially offset by a current period reduction in G&A expenses of $421 as compared to the prior period quarter. The decrease was attributable to the reduction in the servicing portfolio in the third quarter of 1996, resulting in lower servicing administrative expenses in the current period, and to improvement in the efficiency of the mortgage banking operations. Further, expenses related to the amortization of mortgage servicing rights decreased $372 as compared to the prior period also due to the servicing portfolio reduction. Subsequent to March 31, 1997, NVRFS began the sale of its core remaining mortgage servicing portfolio. The sale of the remaining mortgage servicing portfolio and the ongoing sale of servicing rights on a flow basis are the result of the concentration of the mortgage banking operations on the primary business of providing mortgage finance and related services to NVR and other homebuyers. LIQUIDITY AND CAPITAL RESOURCES NVRFS 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") is currently engaged in discussions to renew its mortgage warehouse facility, which expires in the second quarter of 1997, and expects to have a new agreement in place prior to the original agreement's expiration date. During the quarter ended March 31, 1997, NVR Finance entered into an additional annually renewable, uncommitted gestation mortgage-backed security repurchase agreement (the "Repo Facility"). The maximum amount available under the Repo Facility is $45,000, bringing NVRFS's total available borrowings under all such similar agreements to $145,000. Amounts outstanding under the Repo Facility accrue interest at various rates tied to the federal funds rate, depending on the type of collateral and are collateralized by gestation mortgage-backed securities. The covenants under the Repo Facility are consistent with NVR Finance's mortgage warehouse credit facility. The Company believes that internally generated cash and borrowings available under credit facilities will be sufficient to satisfy near and long term cash requirements for working capital in its mortgage banking operations. RVN, INC. - --------- RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996 On October 1, 1996, NVR, Inc. ("NVR") capitalized RVN, Inc. ("RVN"), a Delaware holding company, with $65 in cash and the Ryan Homes and NVHomes tradenames (the "Tradenames"). Under a royalty agreement entered into on October 1, 1996 with NVR Homes, Inc. ("Homes"), NVR's 25 homebuilding subsidiary, RVN earns royalty fees based on a percentage of settlement revenue for allowing Homes to use the Tradenames to market homes. RVN earns 100% of its revenue from Homes. RVN earned royalty revenues of $4,548 during the quarter ended March 31, 1997, and has no significant other income or general and administrative expenses. LIQUIDITY AND CAPITAL RESOURCES RVN provides for its working capital cash requirements using cash generated solely from operations. As shown in RVN's statement of cash flows for the period ended March 31, 1997, cash generated from operations is primarily distributed to NVR. Insofar as Homes' ability to make royalty payments is not impaired, the Company believes that internally generated cash will be sufficient to satisfy its near and long term cash requirements. PART II ------- 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 March 31, 1997. 26 EXHIBIT INDEX EXHIBIT NUMBER DESCRIPTION PAGE - ------ --------------------------------- ---- 11 Computation of Earnings per Share 29 27 Financial Data Schedule 30 27 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. February 24, 1998 NVR, Inc. By: /s/ Paul C. Saville --------------------- Paul C. Saville Senior Vice President Finance and Chief Financial Officer 28 EX-11 2 EXHIBIT 11 EXHIBIT 11 NVR, INC. Computation of Earnings Per Share (amounts in thousands, except per share amounts)
THREE MONTHS ENDED MARCH 31, ---------------------------- 1997 1996 ------------- ------------ 1. Net income $ 5,763 $ 3,740 ======= ======= 2. Average number of shares outstanding 12,688 15,281 3. Shares issuable upon exercise of dilutive options, warrants and subscriptions outstanding during period, based on average market price 927 115 ------- ------- 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 1,143 115 ------- ------- 5. Average number of shares and share equivalents outstanding (2+ 3) 13,615 15,396 ======= ======= 6. Average number of shares outstanding assuming full dilution (2 + 4) 13,831 15,396 ======= ======= 7. Net income per share and share equivalents (1/5) $ 0.42 $0.24 ======= ======= 8. Net income per share assuming full dilution (1/6) $ 0.42 $0.24 ======= =======
29 EX-27 3 EXHIBIT 27
5 This schedule contains Summary Financial Information extracted from NVR Inc.'s consolidated financial statements included in Form 10-Q for the three months ended March 31, 1997 and is qualified in its entirety by reference to such financial statements. 0000906163 NVR, INC. 1,000 U.S. DOLLARS 3-MOS DEC-31-1997 JAN-01-1997 MAR-31-1997 1 57,259 0 5,902 0 170,727 0 18,472 0 498,833 0 120,000 0 0 156,009 (21,337) 498,833 238,987 245,754 207,469 228,592 1,885 0 4,447 10,830 5,067 5,763 0 0 0 5,763 0.42 0.42 Item represents the non-cash amortization of excess reorganization value.
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