Attached files
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| 8-K - HOVNANIAN ENTERPRISES, INC. 8K - HOVNANIAN ENTERPRISES INC | d8k07312011.htm |
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HOVNANIAN ENTERPRISES, INC.
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News Release
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Contact:
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J. Larry Sorsby
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Jeffrey T. O’Keefe
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Executive Vice President & CFO
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Vice President, Investor Relations
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732-747-7800
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732-747-7800
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HOVNANIAN ENTERPRISES REPORTS THIRD QUARTER FISCAL 2011 RESULTS
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RED BANK, NJ, September 7, 2011 – Hovnanian Enterprises, Inc. (NYSE: HOV), a leading national homebuilder, reported results for its third quarter and nine months ended July 31, 2011.
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RESULTS FOR THE THREE AND NINE MONTH PERIODS ENDED JULY 31, 2011:
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·
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Total revenues were $285.6 million for the third quarter of fiscal 2011 compared with $380.6 million in the third quarter of the prior year and $255.1 million for the second quarter of fiscal 2011. During the nine months ended July 31, 2011, total revenues were $793.3 million compared with $1,018.8 million in the first nine months of last year.
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·
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Homebuilding gross margin percentage, before interest expense included in cost of sales, was 15.3% during the third quarter of 2011, compared to 17.1% during the same quarter a year ago and 14.8% for the second quarter of fiscal 2011. For the nine months ended July 31, 2011, homebuilding gross margin percentage, before interest expense included in cost of sales, was 15.6% compared with 16.8% in the same period of the prior year.
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·
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Consolidated pre-tax land-related charges during the fiscal 2011 third quarter were $11.4 million, compared with $49.0 million in last year’s third quarter and $16.9 million for the second quarter of fiscal 2011. For the first nine months of fiscal 2011, consolidated pre-tax land-related charges were $41.9 million compared with $55.1 million during the first nine months of 2010.
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·
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Excluding land-related charges and (loss) gain on extinguishment of debt, the pre-tax loss in the fiscal 2011 third quarter was $42.8 million compared with $36.1 million in the prior year’s third quarter and $55.1 million for the second quarter of fiscal 2011. During the first nine months of fiscal 2011, the pre-tax loss, excluding land-related charges and (loss) gain on extinguishment of debt, was $148.9 million compared with $132.7 million in last year’s first nine months.
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·
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For the fiscal 2011 third quarter, the after-tax net loss was $50.9 million, or $0.47 per common share, compared with $72.9 million, or $0.92 per common share, during the third quarter of 2010 and $72.7 million, or $0.69 per common share, for the second quarter of fiscal 2011. During the nine months ended July 31, 2011, the after-tax net loss was $187.7 million, or $1.92 per common share, compared with net income of $134.7 million, or $1.69 per fully diluted common share in the first nine months of last year, which as a result of tax legislation changes included a federal income tax benefit of $291.3 million.
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·
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Net contracts in the third quarter of 2011, including unconsolidated joint ventures, increased 33% to 1,297 homes compared with the 2010 third quarter and increased 11% compared with the second quarter of fiscal 2011. For the nine months ended July 31, 2011, net contracts, including unconsolidated joint ventures, were 3,313 homes, a 1% decrease from the same period of the prior year.
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·
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Contract backlog, as of July 31, 2011, including unconsolidated joint ventures, was 1,736 homes with a sales value of $570.8 million, which increased 13% and 14%, respectively, compared to July 31, 2010. Compared to the second quarter of fiscal 2011, contract backlog, including unconsolidated joint ventures, increased 12% on a units basis and 11% on a dollar basis in the third quarter of fiscal 2011.
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·
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The contract cancellation rate, excluding unconsolidated joint ventures, for the third quarter ended July 31, 2011 was 18%, compared with 23% in last year’s third quarter and 20% for the second quarter of fiscal 2011.
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·
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At July 31, 2011, there were 202 active selling communities, including unconsolidated joint ventures, compared with 194 active selling communities at July 31, 2010 and 206 active selling communities at April 30, 2011.
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·
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Deliveries, including unconsolidated joint ventures, were 1,112 homes during the third quarter of 2011, compared with 1,396 homes in the same period of the prior year and 967 homes for the second quarter of fiscal 2011. For the nine months ended July 31, 2011, deliveries, including unconsolidated joint ventures, were 2,971 homes compared to 3,722 homes during the same period a year ago.
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·
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The valuation allowance was $858.8 million as of July 31, 2011. The valuation allowance is a non-cash reserve against the tax assets for GAAP purposes. For tax purposes, the tax deductions associated with the tax assets may be carried forward for 20 years from the date the deductions were incurred.
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CASH AND INVENTORY AS OF JULY 31, 2011:
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·
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As of July 31, 2011, homebuilding cash was $334.2 million, including $60.8 million of restricted cash required to collateralize letters of credit compared to $415.2 million, including $67.1 million of restricted cash required to collateralize letters of credit at April 30, 2011.
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·
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After spending approximately $105 million of cash to purchase approximately 1,200 lots and to develop land across the Company, cash flow in the third quarter of fiscal 2011 was negative $76.2 million. Cash flow in the second quarter of fiscal 2011 was negative $88.5 million, after spending approximately $125 million of cash to purchase approximately 1,440 lots and to develop land across the Company. Excluding land and land development spending, cash flow would have been approximately $28.8 million in the third quarter of 2011.
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·
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As of July 31, 2011, the land position, including unconsolidated joint ventures, was 32,058 lots, consisting of 9,960 lots under option and 22,098 owned lots. This compares to the April 30, 2011 land position, including unconsolidated joint ventures, which was 32,546 lots, consisting of 10,542 lots under option and 22,004 owned lots.
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·
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For the fiscal 2011 third quarter, approximately 900 of the lots purchased were within 88 newly identified communities (defined as communities controlled subsequent to January 31, 2009). This compares to approximately 1,170 of the lots purchased were within 84 newly identified communities during the second quarter of fiscal 2011.
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·
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Approximately 1,500 lots were put under option in 38 newly identified communities during the third quarter of fiscal 2011. This compares to approximately 1,650 lots which were put under option in 41 newly identified communities during the second quarter of fiscal 2011.
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COMMENTS FROM MANAGEMENT:
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“The housing market remains challenging primarily due to uncertainty caused by general domestic economic and political concerns, stock market volatility and turbulent international economic conditions, all of which are taking their toll on consumer confidence” commented Ara K. Hovnanian, Chairman of the Board, President and Chief Executive Officer. “Despite this difficult backdrop, our deliveries, revenues, gross margin and cash flow for the third quarter were in line with our expectations. However, we see very few indicators that any recovery in the housing market has begun. As such, we are taking appropriate steps to run our business based on current market conditions, with a focus on maintaining adequate liquidity.”
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WEBCAST INFORMATION:
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Hovnanian Enterprises will webcast its fiscal 2011 third quarter financial results conference call at 11:00 a.m. E.T. on Thursday, September 8, 2011. The webcast can be accessed live through the “Investor Relations” section of Hovnanian Enterprises’ Website at http://www.khov.com. For those who are not available to listen to the live webcast, an archive of the broadcast will be available under the “Audio Archives” section of the Investor Relations page on the Hovnanian Website at http://www.khov.com. The archive will be available for 12 months.
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ABOUT HOVNANIAN ENTERPRISES®, INC.:
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Hovnanian Enterprises, Inc., founded in 1959 by Kevork S. Hovnanian, is headquartered in Red Bank, New Jersey. The Company is one of the nation’s largest homebuilders with operations in Arizona, California, Delaware, Florida, Georgia, Illinois, Maryland, Minnesota, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia and West Virginia. The Company’s homes are marketed and sold under the trade names K. HovnanianÒ HomesÒ, Matzel & Mumford, Brighton Homes, Parkwood Builders, Town & Country Homes and Oster Homes. As the developer of K. Hovnanian’sÒ Four Seasons communities, the Company is also one of the nation’s largest builders of active adult homes.
Additional information on Hovnanian Enterprises, Inc., including a summary investment profile and the Company’s 2010 annual report, can be accessed through the “Investor Relations” section of the Hovnanian Enterprises’ website at http://www.khov.com. To be added to Hovnanian's investor e-mail or fax lists, please send an e-mail to IR@khov.com or sign up at http://www.khov.com.
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NON-GAAP FINANCIAL MEASURES:
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Consolidated earnings before interest expense, income taxes, depreciation and amortization (“EBITDA”) and before inventory impairment loss and land option write-offs and loss (gain) on extinguishment of debt (“Adjusted EBITDA”) are not U.S. generally accepted accounting principles (GAAP) financial measures. The most directly comparable GAAP financial measure is net (loss) income. The reconciliation of net (loss) income to EBITDA and Adjusted EBITDA is presented in a table attached to this earnings release.
Cash flow is a non-GAAP financial measure. The most directly comparable GAAP financial measure is Net Cash provided by (or used in) Operating Activities. The Company uses cash flow to mean the amount of Net Cash provided by (or used in) Operating Activities for the period, as reported on the Consolidated Statement of Cash Flows, excluding changes in mortgage notes receivable at the mortgage company, plus (or minus) the amount of Net Cash provided by (or used in) Investing Activities. For the third quarter of 2011, cash flow was negative $76.2 million, which was derived from $83.3 million from net cash used in operating activities plus the change in mortgage notes receivable of $5.8 million plus $1.3 million of net cash provided by investing activities.
Loss Before Income Taxes Excluding Land-Related Charges and Loss (Gain) on Extinguishment of Debt is a non-GAAP financial measure. The most directly comparable GAAP financial measure is Loss Before Income Taxes. The reconciliation of Loss Before Income Taxes to Loss Before Income Taxes Excluding Land-Related Charges and Loss (Gain) on Extinguishment of Debt is presented in a table attached to this earnings release.
FORWARD-LOOKING STATEMENTS
All statements in this press release that are not historical facts should be considered as “forward-looking statements”. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks, uncertainties and other factors include, but are not limited to, (1) changes in general and local economic and industry and business conditions and impacts of the sustained homebuilding downturn, (2) adverse weather and other environmental conditions and natural disasters, (3) changes in market conditions and seasonality of the Company’s business, (4) changes in home prices and sales activity in the markets where the Company builds homes, (5) government regulation, including regulations concerning development of land, the home building, sales and customer financing processes, tax laws, and the environment, (6) fluctuations in interest rates and the availability of mortgage financing, (7) shortages in, and price fluctuations of, raw materials and labor, (8) the availability and cost of suitable land and improved lots, (9) levels of competition, (10) availability of financing to the Company, (11) utility shortages and outages or rate fluctuations, (12) levels of indebtedness and restrictions on the Company’s operations and activities imposed by the agreements governing the Company’s outstanding indebtedness, (13) the Company's sources of liquidity, (14) changes in credit ratings, (15) availability of net operating loss carryforwards, (16) operations through joint ventures with third parties, (17) product liability litigation and warranty claims, (18) successful identification and integration of acquisitions, (19) significant influence of the Company’s controlling stockholders, (20) geopolitical risks, terrorist acts and other acts of war, and (21) other factors described in detail in the Company’s Annual Report on Form 10-K/A for the year ended October 31, 2010 and the Company’s quarterly reports on Form 10-Q for the quarters ended January 31, 2011 and July 31, 2011, respectively. Except as otherwise required by applicable securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.
(Financial Tables Follow)
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Hovnanian Enterprises, Inc.
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|||||||||||
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July 31, 2011
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Statements of Consolidated Operations
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(Dollars in Thousands, Except Per Share Data)
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Three Months Ended
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Nine Months Ended
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July 31,
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July 31,
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2011
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2010
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2011
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2010
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(Unaudited)
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(Unaudited)
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Total Revenues
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$285,618
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$380,600
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$793,282
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$1,018,830
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Costs and Expenses (a)
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337,547
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464,827
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977,588
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1,205,814
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(Loss) Gain on Extinguishment of Debt
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(1,391)
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5,256
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(3,035)
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25,047
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Loss from Unconsolidated Joint Ventures
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(2,255)
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(871)
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(6,479)
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(853)
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Loss Before Income Taxes
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(55,575)
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(79,842)
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(193,820)
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(162,790)
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Income Tax Benefit
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(4,645)
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(6,988)
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(6,081)
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(297,491)
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Net (Loss) Income
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$(50,930)
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$(72,854)
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$(187,739)
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$134,701
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Per Share Data:
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Basic:
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(Loss) Income Per Common Share
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$(0.47)
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$(0.92)
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$(1.92)
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$1.71
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Weighted Average Number of
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Common Shares Outstanding (b)
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108,721
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78,763
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97,648
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78,662
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Assuming Dilution:
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(Loss) Income Per Common Share
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$(0.47)
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$(0.92)
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$(1.92)
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$1.69
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Weighted Average Number of
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Common Shares Outstanding (b)
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108,721
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78,763
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97,648
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79,873
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(a) Includes inventory impairment loss and land option write-offs.
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(b) For periods with a net loss, basic shares are used in accordance with GAAP rules.
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Hovnanian Enterprises, Inc.
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July 31, 2011
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Reconciliation of Loss Before Income Taxes to Loss Before Income Taxes
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Excluding Land-Related Charges and Loss (Gain) on Extinguishment of Debt
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(Dollars in Thousands)
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Three Months Ended
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Nine Months Ended
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July 31,
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July 31,
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2011
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2010
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2011
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2010
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(Unaudited)
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(Unaudited)
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Loss Before Income Taxes
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$(55,575)
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$(79,842)
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$(193,820)
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$(162,790)
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Inventory Impairment Loss and Land Option Write-Offs
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11,426
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48,959
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41,876
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55,111
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Loss (Gain) on Extinguishment of Debt
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1,391
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(5,256)
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3,035
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(25,047)
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Loss Before Income Taxes Excluding
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Land-Related Charges and Loss (Gain) on Extinguishment of Debt (a)
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$(42,758)
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$(36,139)
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$(148,909)
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$(132,726)
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(a) Loss Before Income Taxes Excluding Land-Related Charges and Loss (Gain) on Extinguishment of Debt is a non-GAAP Financial measure. The most directly comparable GAAP financial measure is Loss Before Income Taxes.
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Hovnanian Enterprises, Inc.
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July 31, 2011
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Gross Margin
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(Dollars in Thousands)
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Homebuilding Gross Margin
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Homebuilding Gross Margin
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Three Months Ended
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Nine Months Ended
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July 31,
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July 31,
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2011
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2010
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2011
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2010
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(Unaudited)
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(Unaudited)
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Sale of Homes
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$276,479
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$368,077
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$759,338
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$987,923
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Cost of Sales, Excluding Interest (a)
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234,129
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305,054
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640,507
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821,776
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Homebuilding Gross Margin, Excluding Interest
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42,350
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63,023
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118,831
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166,147
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Homebuilding Cost of Sales Interest
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14,222
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20,918
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41,671
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59,290
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Homebuilding Gross Margin, Including Interest
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$28,128
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$42,105
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$77,160
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$106,857
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Gross Margin Percentage, Excluding Interest
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15.3%
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17.1%
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15.6%
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16.8%
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Gross Margin Percentage, Including Interest
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10.2%
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11.4%
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10.2%
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10.8%
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Land Sales Gross Margin
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Land Sales Gross Margin
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Three Months Ended
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Nine Months Ended
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July 31,
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July 31,
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2011
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2010
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2011
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2010
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(Unaudited)
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(Unaudited)
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Land Sales
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$174
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$2,786
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$8,217
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$3,821
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Cost of Sales, Excluding Interest (a)
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127
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1,000
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5,642
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1,020
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Land Sales Gross Margin, Excluding Interest
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47
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1,786
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2,575
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2,801
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Land Sales Interest
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-
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1,266
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2,133
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1,487
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Land Sales Gross Margin, Including Interest
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$47
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$520
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$442
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$1,314
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(a) Does not include cost associated with walking away from land options or inventory impairment losses which are recorded as Inventory impairment loss and land option write-offs in the Condensed Consolidated Statements of Operations.
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Hovnanian Enterprises, Inc.
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July 31, 2011
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Reconciliation of Adjusted EBITDA to Net (Loss) Income
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|||||||
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(Dollars in Thousands)
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Three Months Ended
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Nine Months Ended
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July 31,
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July 31,
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2011
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2010
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2011
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2010
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(Unaudited)
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(Unaudited)
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Net (Loss) Income
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$(50,930)
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$(72,854)
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$(187,739)
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$134,701
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|||
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Income Tax Benefit
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(4,645)
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(6,988)
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(6,081)
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(297,491)
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|||
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Interest Expense
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39,429
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44,855
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117,883
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132,411
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|||
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EBIT (a)
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(16,146)
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(34,987)
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(75,937)
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(30,379)
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|||
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Depreciation
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2,602
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2,632
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7,167
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9,089
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Amortization of Debt Costs
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1,080
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845
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2,937
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2,466
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EBITDA (b)
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(12,464)
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(31,510)
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(65,833)
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(18,824)
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Inventory Impairment Loss and Land Option Write-offs
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11,426
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48,959
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41,876
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55,111
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|||
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Loss (Gain) on Extinguishment of Debt
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1,391
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(5,256)
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3,035
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(25,047)
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|||
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Adjusted EBITDA (c)
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$353
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$12,193
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$(20,922)
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$11,240
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|||
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Interest Incurred
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$40,051
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$38,107
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$117,773
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$116,449
|
|||
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Adjusted EBITDA to Interest Incurred
|
0.01
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0.32
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(0.18)
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0.10
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(a)EBIT is a non-GAAP financial measure. The most directly comparable GAAP financial measure is net (loss) income. EBIT represents earnings before interest expense and income taxes.
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(b)EBITDA is a non-GAAP financial measure. The most directly comparable GAAP financial measure is net (loss) income. EBITDA represents earnings before interest expense, income taxes, depreciation and amortization.
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|||||||
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(c)Adjusted EBITDA is a non-GAAP financial measure. The most directly comparable GAAP financial measure is net (loss) income. Adjusted EBITDA represents earnings before interest expense, income taxes, depreciation, amortization, inventory impairment loss and land option write-offs, and loss (gain) on extinguishment of debt.
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Hovnanian Enterprises, Inc.
|
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July 31, 2011
|
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Interest Incurred, Expensed and Capitalized
|
|||||||
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(Dollars in Thousands)
|
|||||||
|
Three Months Ended
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Nine Months Ended
|
||||||
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July 31,
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July 31,
|
||||||
|
2011
|
2010
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2011
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2010
|
||||
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(Unaudited)
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(Unaudited)
|
||||||
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Interest Capitalized at Beginning of Period
|
$135,556
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$155,126
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$136,288
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$164,340
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|||
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Plus Interest Incurred
|
40,051
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38,107
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117,773
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116,449
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|||
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Less Interest Expensed
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39,429
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44,855
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117,883
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132,411
|
|||
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Interest Capitalized at End of Period (a)
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$136,178
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$148,378
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$136,178
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$148,378
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(a)The Company incurred significant inventory impairments in recent years, which are determined based on total inventory including capitalized interest. However, the capitalized interest amounts are shown gross before allocating any portion of impairments to capitalized interest.
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HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands Except Share Amounts)
|
|
July 31,
2011
|
October 31,
2010
|
||
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ASSETS
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(Unaudited)
|
(1)
|
|
|
Homebuilding:
|
|||
|
Cash and cash equivalents
|
$273,443
|
$359,124
|
|
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Restricted cash
|
79,069
|
108,983
|
|
|
Inventories:
|
|||
|
Sold and unsold homes and lots under development
|
714,984
|
591,729
|
|
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Land and land options held for future
|
|||
|
development or sale
|
307,427
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348,474
|
|
|
Consolidated inventory not owned:
|
|||
|
Specific performance options
|
2,619
|
21,065
|
|
|
Variable interest entities
|
-
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32,710
|
|
|
Other options
|
-
|
7,962
|
|
|
Total consolidated inventory not owned
|
2,619
|
61,737
|
|
|
Total inventories
|
1,025,030
|
1,001,940
|
|
|
Investments in and advances to unconsolidated
|
|||
|
joint ventures
|
62,493
|
38,000
|
|
|
Receivables, deposits, and notes
|
48,783
|
61,023
|
|
|
Property, plant, and equipment – net
|
55,531
|
62,767
|
|
|
Prepaid expenses and other assets
|
84,725
|
83,928
|
|
|
Total homebuilding
|
1,629,074
|
1,715,765
|
|
|
Financial services:
|
|||
|
Cash and cash equivalents
|
8,942
|
8,056
|
|
|
Restricted cash
|
4,214
|
4,022
|
|
|
Mortgage loans held for sale
|
53,198
|
86,326
|
|
|
Other assets
|
2,332
|
3,391
|
|
|
Total financial services
|
68,686
|
101,795
|
|
|
Total assets
|
$1,697,760
|
$1,817,560
|
(1) Derived from the audited balance sheet as of October 31, 2010.
|
HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands Except Share Amounts)
|
|
July 31, 2011
|
October 31, 2010
|
||
|
LIABILITIES AND EQUITY
|
(Unaudited)
|
(1)
|
|
|
Homebuilding:
|
|||
|
Nonrecourse land mortgages
|
$23,583
|
$4,313
|
|
|
Accounts payable and other liabilities
|
280,672
|
319,749
|
|
|
Customers’ deposits
|
15,490
|
9,520
|
|
|
Nonrecourse mortgages secured by operating properties
|
19,981
|
20,657
|
|
|
Liabilities from inventory not owned
|
2,619
|
53,249
|
|
|
Total homebuilding
|
342,345
|
407,488
|
|
|
Financial services:
|
|||
|
Accounts payable and other liabilities
|
14,076
|
16,142
|
|
|
Mortgage warehouse line of credit
|
41,659
|
73,643
|
|
|
Total financial services
|
55,735
|
89,785
|
|
|
Notes payable:
|
|||
|
Senior secured notes
|
786,214
|
784,592
|
|
|
Senior notes
|
827,696
|
711,585
|
|
|
Senior subordinated notes
|
-
|
120,170
|
|
|
TEU senior subordinated amortizing notes
|
14,450
|
-
|
|
|
Accrued interest
|
34,896
|
23,968
|
|
|
Total notes payable
|
1,663,256
|
1,640,315
|
|
|
Income taxes payable
|
35,782
|
17,910
|
|
|
Total liabilities
|
2,097,118
|
2,155,498
|
|
|
Equity:
|
|||
|
Hovnanian Enterprises, Inc. stockholders’ equity deficit:
|
|||
|
Preferred stock, $.01 par value - authorized 100,000 shares;
|
|||
|
Issued 5,600 shares with a liquidation preference of $140,000
|
|||
|
at July 31, 2011 and at October 31, 2010
|
135,299
|
135,299
|
|
|
Common stock, Class A, $.01 par value – authorized
|
|||
|
200,000,000 shares; issued 91,587,374 shares at July 31, 2011
|
|||
|
and 74,809,683 shares at October 31, 2010 (including 11,694,720
|
|||
|
shares at July 31, 2011 and October 31, 2010 held in Treasury)
|
915
|
748
|
|
|
Common stock, Class B, $.01 par value (convertible
|
|||
|
to Class A at time of sale) – authorized 30,000,000 shares;
|
|||
|
Issued 15,253,512 shares at July 31, 2011 and 15,256,543
|
|||
|
shares at October 31, 2010 (including 691,748 shares at
|
|||
|
July 31, 2011 and October 31, 2010 held in Treasury)
|
153
|
153
|
|
|
Paid in capital - common stock
|
590,592
|
463,908
|
|
|
Accumulated deficit
|
(1,011,158)
|
(823,419)
|
|
|
Treasury stock - at cost
|
(115,257)
|
(115,257)
|
|
|
Total Hovnanian Enterprises, Inc. stockholders’ equity deficit
|
(399,456)
|
(338,568)
|
|
|
Noncontrolling interest in consolidated joint ventures
|
98
|
630
|
|
|
Total equity deficit
|
(399,358)
|
(337,938)
|
|
|
Total liabilities and equity
|
$1,697,760
|
$1,817,560
|
(1) Derived from the audited balance sheet as of October 31, 2010.
|
HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands Except Per Share Data)
(Unaudited)
|
|
Three Months Ended July 31,
|
Nine Months Ended July 31,
|
||||||
|
2011
|
2010
|
2011
|
2010
|
||||
|
Revenues:
|
|||||||
|
Homebuilding:
|
|||||||
|
Sale of homes
|
$276,479
|
$368,077
|
$759,338
|
$987,923
|
|||
|
Land sales and other revenues
|
1,289
|
3,770
|
13,695
|
7,489
|
|||
|
Total homebuilding
|
277,768
|
371,847
|
773,033
|
995,412
|
|||
|
Financial services
|
7,850
|
8,753
|
20,249
|
23,418
|
|||
|
Total revenues
|
285,618
|
380,600
|
793,282
|
1,018,830
|
|||
|
Expenses:
|
|||||||
|
Homebuilding:
|
|||||||
|
Cost of sales, excluding interest
|
234,256
|
306,054
|
646,149
|
822,796
|
|||
|
Cost of sales interest
|
14,222
|
22,184
|
43,804
|
60,777
|
|||
|
Inventory impairment loss and land option
|
|||||||
|
write-offs
|
11,426
|
48,959
|
41,876
|
55,111
|
|||
|
Total cost of sales
|
259,904
|
377,197
|
731,829
|
938,684
|
|||
|
Selling, general and administrative
|
34,900
|
42,184
|
114,944
|
127,615
|
|||
|
Total homebuilding expenses
|
294,804
|
419,381
|
846,773
|
1,066,299
|
|||
|
Financial services
|
5,547
|
6,168
|
16,194
|
17,194
|
|||
|
Corporate general and administrative
|
11,648
|
14,816
|
38,609
|
45,232
|
|||
|
Other interest
|
25,207
|
22,671
|
74,079
|
71,634
|
|||
|
Other operations
|
341
|
1,791
|
1,933
|
5,455
|
|||
|
Total expenses
|
337,547
|
464,827
|
977,588
|
1,205,814
|
|||
|
(Loss) gain on extinguishment of debt
|
(1,391)
|
5,256
|
(3,035)
|
25,047
|
|||
|
Loss from unconsolidated joint ventures
|
(2,255)
|
(871)
|
(6,479)
|
(853)
|
|||
|
Loss before income taxes
|
(55,575)
|
(79,842)
|
(193,820)
|
(162,790)
|
|||
|
State and federal income tax benefit:
|
|||||||
|
State
|
(4,642)
|
(6,988)
|
(4,349)
|
(6,160)
|
|||
|
Federal
|
(3)
|
-
|
(1,732)
|
(291,331)
|
|||
|
Total income taxes
|
(4,645)
|
(6,988)
|
(6,081)
|
(297,491)
|
|||
|
Net (loss) income
|
$(50,930)
|
$(72,854)
|
$(187,739)
|
$134,701
|
|||
|
Per share data:
|
|||||||
|
Basic:
|
|||||||
|
(Loss) income per common share
|
$(0.47)
|
$(0.92)
|
$(1.92)
|
$1.71
|
|||
|
Weighted-average number of common
|
|||||||
|
shares outstanding
|
108,721
|
78,763
|
97,648
|
78,662
|
|||
|
Assuming dilution:
|
|||||||
|
(Loss) income per common share
|
$(0.47)
|
$(0.92)
|
$(1.92)
|
$1.69
|
|||
|
Weighted-average number of common
|
|||||||
|
shares outstanding
|
108,721
|
78,763
|
97,648
|
79,873
|
|||
|
HOVNANIAN ENTERPRISES, INC.
|
||||||||||||
|
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE)
|
||||||||||||
|
(UNAUDITED)
|
Communities Under Development
|
|||||||||||
|
Three Months - 7/31/2011
|
||||||||||||
|
Net Contracts(1)
|
Deliveries
|
|||||||||||
|
Three Months Ended
|
Three Months Ended
|
Contract Backlog
|
||||||||||
|
July 31,
|
July 31,
|
July 31,
|
||||||||||
|
2011
|
2010
|
% Change
|
2011
|
2010
|
% Change
|
2011
|
2010
|
% Change
|
||||
|
Northeast
|
||||||||||||
|
Home
|
134
|
105
|
27.6%
|
99
|
221
|
(55.2)%
|
284
|
300
|
(5.3)%
|
|||
|
Dollars
|
$56,427
|
$43,314
|
30.3%
|
$43,443
|
$91,740
|
(52.6)%
|
$122,290
|
$128,424
|
(4.8)%
|
|||
|
Avg. Price
|
$421,097
|
$412,514
|
2.1%
|
$438,818
|
$415,113
|
5.7%
|
$430,599
|
$428,080
|
0.6%
|
|||
|
Mid-Atlantic
|
||||||||||||
|
Home
|
181
|
137
|
32.1%
|
147
|
194
|
(24.2)%
|
308
|
299
|
3.0%
|
|||
|
Dollars
|
$73,986
|
$50,845
|
45.5%
|
$57,104
|
$72,767
|
(21.5)%
|
$130,215
|
$115,716
|
12.5%
|
|||
|
Avg. Price
|
$408,762
|
$371,131
|
10.1%
|
$388,463
|
$375,088
|
3.6%
|
$422,776
|
$387,010
|
9.2%
|
|||
|
Midwest
|
||||||||||||
|
Home
|
103
|
90
|
14.4%
|
87
|
110
|
(20.9)%
|
231
|
286
|
(19.2)%
|
|||
|
Dollars
|
$21,273
|
$16,526
|
28.7%
|
$17,716
|
$22,650
|
(21.8)%
|
$43,455
|
$48,680
|
(10.7)%
|
|||
|
Avg. Price
|
$206,534
|
$183,622
|
12.5%
|
$203,632
|
$205,909
|
(1.1)%
|
$188,117
|
$170,210
|
10.5%
|
|||
|
Southeast
|
||||||||||||
|
Home
|
122
|
64
|
90.6%
|
75
|
121
|
(38.0)%
|
154
|
75
|
105.3%
|
|||
|
Dollars
|
$28,301
|
$15,264
|
85.4%
|
$17,894
|
$28,522
|
(37.3)%
|
$37,953
|
$18,554
|
104.6%
|
|||
|
Avg. Price
|
$231,975
|
$238,500
|
(2.7)%
|
$238,587
|
$235,719
|
1.2%
|
$246,448
|
$247,387
|
(0.4)%
|
|||
|
Southwest
|
||||||||||||
|
Home
|
482
|
369
|
30.6%
|
461
|
472
|
(2.3)%
|
396
|
290
|
36.6%
|
|||
|
Dollars
|
$113,370
|
$88,360
|
28.3%
|
$107,861
|
$103,065
|
4.7%
|
$107,686
|
$76,721
|
40.4%
|
|||
|
Avg. Price
|
$235,207
|
$239,458
|
(1.8)%
|
$233,972
|
$218,358
|
7.2%
|
$271,934
|
$264,555
|
2.8%
|
|||
|
West
|
||||||||||||
|
Home
|
147
|
137
|
7.3%
|
124
|
198
|
(37.4)%
|
96
|
125
|
(23.2)%
|
|||
|
Dollars
|
$38,950
|
$33,313
|
16.9%
|
$32,461
|
$49,333
|
(34.2)%
|
$25,972
|
$31,374
|
(17.2)%
|
|||
|
Avg. Price
|
$264,966
|
$243,161
|
9.0%
|
$261,782
|
$249,157
|
5.1%
|
$270,542
|
$250,992
|
7.8%
|
|||
|
Consolidated Total
|
||||||||||||
|
Home
|
1,169
|
902
|
29.6%
|
993
|
1,316
|
(24.5)%
|
1,469
|
1,375
|
6.8%
|
|||
|
Dollars
|
$332,307
|
$247,622
|
34.2%
|
$276,479
|
$368,077
|
(24.9)%
|
$467,571
|
$419,469
|
11.5%
|
|||
|
Avg. Price
|
$284,266
|
$274,525
|
3.5%
|
$278,428
|
$279,694
|
(0.5)%
|
$318,292
|
$305,069
|
4.3%
|
|||
|
Unconsolidated Joint Ventures
|
||||||||||||
|
Home
|
128
|
71
|
80.3%
|
119
|
80
|
48.8%
|
267
|
167
|
59.9%
|
|||
|
Dollars
|
$52,265
|
$35,764
|
46.1%
|
$57,609
|
$34,609
|
66.5%
|
$103,238
|
$80,968
|
27.5%
|
|||
|
Avg. Price
|
$408,320
|
$503,718
|
(18.9)%
|
$484,109
|
$432,613
|
11.9%
|
$386,659
|
$484,838
|
(20.2)%
|
|||
|
Total
|
||||||||||||
|
Home
|
1,297
|
973
|
33.3%
|
1,112
|
1,396
|
(20.3)%
|
1,736
|
1,542
|
12.6%
|
|||
|
Dollars
|
$384,572
|
$283,386
|
35.7%
|
$334,088
|
$402,686
|
(17.0)%
|
$570,809
|
$500,437
|
14.1%
|
|||
|
Avg. Price
|
$296,509
|
$291,250
|
1.8%
|
$300,439
|
$288,457
|
4.2%
|
$328,807
|
$324,538
|
1.3%
|
|||
|
DELIVERIES INCLUDE EXTRAS
|
||||||||||||
|
Notes:
|
||||||||||||
|
(1) Net contracts are defined as new contracts signed during the period for the purchase of homes, less cancellations of prior contracts.
|
||||||||||||
|
HOVNANIAN ENTERPRISES, INC.
|
||||||||||||
|
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE)
|
||||||||||||
|
(UNAUDITED)
|
Communities Under Development
|
|||||||||||
|
Nine Months - 7/31/2011
|
||||||||||||
|
Net Contracts(1)
|
Deliveries
|
|||||||||||
|
Nine Months Ended
|
Nine Months Ended
|
Contract Backlog
|
||||||||||
|
July 31,
|
July 31,
|
July 31,
|
||||||||||
|
2011
|
2010
|
% Change
|
2011
|
2010
|
% Change
|
2011
|
2010
|
% Change
|
||||
|
Northeast
|
||||||||||||
|
Home
|
351
|
381
|
(7.9)%
|
282
|
538
|
(47.6)%
|
284
|
300
|
(5.3)%
|
|||
|
Dollars
|
$151,255
|
$150,901
|
0.2%
|
$122,852
|
$217,409
|
(43.5)%
|
$122,290
|
$128,424
|
(4.8)%
|
|||
|
Avg. Price
|
$430,926
|
$396,066
|
8.8%
|
$435,645
|
$404,106
|
7.8%
|
$430,599
|
$428,080
|
0.6%
|
|||
|
Mid-Atlantic
|
||||||||||||
|
Home
|
470
|
465
|
1.1%
|
395
|
552
|
(28.4)%
|
308
|
299
|
3.0%
|
|||
|
Dollars
|
$181,874
|
$171,498
|
6.1%
|
$150,011
|
$206,477
|
(27.3)%
|
$130,215
|
$115,716
|
12.5%
|
|||
|
Avg. Price
|
$386,966
|
$368,813
|
4.9%
|
$379,775
|
$374,053
|
1.5%
|
$422,776
|
$387,010
|
9.2%
|
|||
|
Midwest
|
||||||||||||
|
Home
|
266
|
324
|
(17.9)%
|
257
|
291
|
(11.7)%
|
231
|
286
|
(19.2)%
|
|||
|
Dollars
|
$54,125
|
$60,235
|
(10.1)%
|
$49,216
|
$62,083
|
(20.7)%
|
$43,455
|
$48,680
|
(10.7)%
|
|||
|
Avg. Price
|
$203,477
|
$185,914
|
9.4%
|
$191,502
|
$213,344
|
(10.2)%
|
$188,117
|
$170,210
|
10.5%
|
|||
|
Southeast
|
||||||||||||
|
Home
|
288
|
248
|
16.1%
|
216
|
308
|
(29.9)%
|
154
|
75
|
105.3%
|
|||
|
Dollars
|
$67,286
|
$57,835
|
16.3%
|
$50,082
|
$75,240
|
(33.4)%
|
$37,953
|
$18,554
|
104.6%
|
|||
|
Avg. Price
|
$233,632
|
$233,202
|
0.2%
|
$231,861
|
$244,286
|
(5.1)%
|
$246,448
|
$247,387
|
(0.4)%
|
|||
|
Southwest
|
||||||||||||
|
Home
|
1,283
|
1,255
|
2.2%
|
1,224
|
1,316
|
(7.0)%
|
396
|
290
|
36.6%
|
|||
|
Dollars
|
$303,166
|
$282,183
|
7.4%
|
$292,427
|
$288,617
|
1.3%
|
$107,686
|
$76,721
|
40.4%
|
|||
|
Avg. Price
|
$236,295
|
$224,847
|
5.1%
|
$238,911
|
$219,314
|
8.9%
|
$271,934
|
$264,555
|
2.8%
|
|||
|
West
|
||||||||||||
|
Home
|
349
|
455
|
(23.3)%
|
363
|
520
|
(30.2)%
|
96
|
125
|
(23.2)%
|
|||
|
Dollars
|
$93,655
|
$113,210
|
(17.3)%
|
$94,750
|
$138,097
|
(31.4)%
|
$25,972
|
$31,374
|
(17.2)%
|
|||
|
Avg. Price
|
$268,352
|
$248,815
|
7.9%
|
$261,019
|
$265,571
|
(1.7)%
|
$270,542
|
$250,992
|
7.8%
|
|||
|
Consolidated Total
|
||||||||||||
|
Home
|
3,007
|
3,128
|
(3.9)%
|
2,737
|
3,525
|
(22.4)%
|
1,469
|
1,375
|
6.8%
|
|||
|
Dollars
|
$851,361
|
$835,862
|
1.9%
|
$759,338
|
$987,923
|
(23.1)%
|
$467,571
|
$419,469
|
11.5%
|
|||
|
Avg. Price
|
$283,126
|
$267,219
|
6.0%
|
$277,434
|
$280,262
|
(1.0)%
|
$318,292
|
$305,069
|
4.3%
|
|||
|
Unconsolidated Joint Ventures
|
||||||||||||
|
Home
|
306
|
205
|
49.3%
|
234
|
197
|
18.8%
|
267
|
167
|
59.9%
|
|||
|
Dollars
|
$129,382
|
$92,489
|
39.9%
|
$109,434
|
$88,615
|
23.5%
|
$103,238
|
$80,968
|
27.5%
|
|||
|
Avg. Price
|
$422,817
|
$451,166
|
(6.3)%
|
$467,667
|
$449,822
|
4.0%
|
$386,659
|
$484,838
|
(20.2)%
|
|||
|
Total
|
||||||||||||
|
Home
|
3,313
|
3,333
|
(0.6)%
|
2,971
|
3,722
|
(20.2)%
|
1,736
|
1,542
|
12.6%
|
|||
|
Dollars
|
$980,743
|
$928,351
|
5.6%
|
$868,772
|
$1,076,538
|
(19.3)%
|
$570,809
|
$500,437
|
14.1%
|
|||
|
Avg. Price
|
$296,029
|
$278,533
|
6.3%
|
$292,417
|
$289,236
|
1.1%
|
$328,807
|
$324,538
|
1.3%
|
|||
|
DELIVERIES INCLUDE EXTRAS
|
||||||||||||
|
Notes:
|
||||||||||||
|
(1) Net contracts are defined as new contracts signed during the period for the purchase of homes, less cancellations of prior contracts.
|
||||||||||||