HOVNANIAN ENTERPRISES INC - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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8-K - FORM 8-K - HOVNANIAN ENTERPRISES INC	hei_8k-090612.htm

Exhibit 99.1

HOVNANIAN ENTERPRISES, INC.

News Release


Contact:	J. Larry Sorsby	Jeffrey T. O’Keefe
	Executive Vice President & CFO	Vice President, Investor Relations
	732-747-7800	732-747-7800

HOVNANIAN ENTERPRISES REPORTS THIRD QUARTER FISCAL 2012 RESULTS

RED BANK, NJ, September 6, 2012 – Hovnanian Enterprises, Inc. (NYSE: HOV), a leading national homebuilder, reported results for its third quarter and nine months ended July 31, 2012.

RESULTS FOR THREE AND NINE MONTH PERIODS ENDED JULY 31, 2012:

Net income was $34.7 million during the fiscal 2012 third quarter, or $0.25 per common share, compared with a net loss of $50.9 million, or $0.47 per common share, in last year’s third quarter. This represents an increase of $85.6 million over last year’s net income during the quarter. Net income in the fiscal 2012 third quarter benefitted from the reversal of $37.0 million of state tax reserves.

·	In the first nine months of fiscal 2012, net income was $18.2 million, or $0.15 per common share, compared with a net loss of $187.7 million, or $1.92 per common share, in the prior year’s first nine months.

·	Total revenues were $387.0 million during the fiscal 2012 third quarter up 35.5% compared with $285.6 million in last year’s third quarter. In the first nine months of fiscal 2012, total revenues were $998.3 million up 25.8% compared with $793.3 million in the prior year’s first nine months.

The dollar value of net contracts, including unconsolidated joint ventures, for the third quarter ended July 31, 2012 increased 31.8% to $507.0 million compared with $384.6 million in the same quarter last year. The number of net contracts increased 18.8% to 1,541 homes from 1,297 homes in the same quarter last year.

For the nine months ended July 31, 2012, the dollar value of net contracts, including unconsolidated joint ventures, increased 43.0% to $1.4 billion compared with $980.7 million in the same period a year ago and the number of net contracts increased 32.7% to 4,395 homes compared with 3,313 homes in the first nine months last year.

Homebuilding gross margin percentage, before interest expense included in cost of sales, was 18.2% for the fiscal 2012 third quarter, compared to 15.3% during the third quarter of 2011 and 17.4% in the second quarter of 2012. For the nine month period ended July 31, 2012, homebuilding gross margin percentage, before interest expense included in cost of sales, was 17.5% compared with 15.6% in the first nine months of 2011.

Total SG&A was $48.1 million or 12.4% of total revenues for the three months ended July 31, 2012 compared to $46.5 million or 16.3% of total revenues in the third quarter of the prior year and 13.9% in the second quarter of 2012. In the first nine months of 2012, total SG&A was $141.6 million or 14.2% of total revenues compared with $153.6 million or 19.4% of total revenues in the same period last year.

Consolidated pre-tax land-related charges for the third quarter of fiscal 2012 were $0.7 million compared with $11.4 million in the third quarter of the prior year. For the nine months ended July 31, 2012, the consolidated pre-tax land-related charges were $7.2 million compared with $41.9 million in last year’s first nine months.

Repurchased $2.0 million of unsecured senior notes for $1.5 million in cash and issued approximately 5.4 million shares of Class A common stock in exchange for $21.0 million of unsecured senior notes during the three months ended July 31, 2012, resulting in a $6.2 million gain on extinguishment of debt.

·	Pre-tax loss during the third quarter of 2012 was $1.8 million compared with $55.6 million in the same period of the prior year. For the nine months ended July 31, 2012, the pre-tax loss was $17.0 million compared with $193.8 million during the first nine months a year ago.

·	The contract cancellation rate, including unconsolidated joint ventures, in the third quarter of 2012 was 21%, compared with 19% during the 2011 third quarter.

·	Contract backlog, as of July 31, 2012, including unconsolidated joint ventures, was 2,452 homes with a sales value of $813.9 million, which was an increase of 41.2% and 42.6%, respectively, compared to July 31, 2011.

Deliveries, including unconsolidated joint ventures, were 1,387 homes for the third quarter of fiscal 2012, up 24.7% compared with 1,112 homes in the third quarter of the prior year. During the nine months ended July 31, 2012, deliveries, including unconsolidated joint ventures, were 3,606 homes compared with 2,971 homes in the first nine months of last year, an increase of 21.4%.

·	The dollar value of net contracts and the number of net contracts, including unconsolidated joint ventures, for the month of August increased 48.7% and 26.0% respectively to $166.8 million compared with $112.2 million and to 484 homes from 384 homes in the same month last year.

·	The valuation allowance was $909.1 million as of July 31, 2012. 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.

CASH AND INVENTORY AS OF JULY 31, 2012:

During the third quarter of 2012, we entered into a land banking arrangement with GSO Capital Partners LP (“GSO”), the credit arm of The Blackstone Group, for total acquisition and committed future development costs of up to $125 million. Under this arrangement, we sold 620 of our previously owned lots to GSO for $37.1 million in net cash proceeds with GSO agreeing to fund the remaining development costs, and we have the option to purchase back these finished lots on a quarterly takedown basis.

·	To complete the $125 million land banking arrangement with GSO, we have already identified and GSO is currently evaluating additional land parcels totaling approximately $60 million in acquisition and development costs.

After spending $117.6 million during the third quarter of 2012 on land and land development and $1.5 million to repurchase debt, homebuilding cash increased $23.1 million from the second quarter to $252.1 million, as of July 31, 2012, including $32.8 million of restricted cash required to collateralize letters of credit.

·	As of July 31, 2012, the land position, including unconsolidated joint ventures, was 29,089 lots, consisting of 10,597 lots under option and 18,492 owned lots.

COMMENTS FROM MANAGEMENT:

“Despite a continuing weak United States economy, the dollar amount of our net contracts reflected strong year-over-year increases of 43% and 32% for our first nine months and the third quarter of fiscal 2012, respectively, as compared to the same periods in fiscal 2011. Unlike the past few years, the market for new homes has been resilient through both the spring selling season and throughout the summer months this year. We believe the housing market’s recent overall strength and our significantly improved sales pace this year indicates that the market for new homes has bounced off the bottom and is already in a period of gradual recovery. Additionally, we are encouraged with the progress we made in our operating metrics, particularly with the 290 basis point year-over-year improvement in our gross margin and the 390 basis point reduction in total SG&A as a percentage of total revenues during the third quarter,” commented Ara K. Hovnanian, Chairman of the Board, President and Chief Executive Officer.

“Since the end of fiscal 2008, we have reduced our total indebtedness by $1.1 billion, including a $23 million reduction during our third quarter of fiscal 2012 and a $169 million reduction year to date. Increasing our third quarter homebuilding cash balance to $252 million while investing $118 million in land and land development, demonstrated that we can maintain our liquidity while simultaneously buying land for future growth. As our operating results improve further, we will continue to opportunistically take steps to better position our balance sheet,” concluded Mr. Hovnanian.

WEBCAST INFORMATION:

Hovnanian Enterprises will webcast its fiscal 2012 third quarter financial results conference call at 11:00 a.m. E.T. on Thursday, September 6, 2012. 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.

ABOUT HOVNANIAN ENTERPRISES®, INC.:

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, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia, Washington, D.C. 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 2011 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.

NON-GAAP FINANCIAL MEASURES:

Consolidated earnings before interest expense and income taxes (“EBIT”) and before depreciation and amortization (“EBITDA”) and before inventory impairment loss and land option write-offs, expenses associated with debt exchange offer and (gain) loss 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 income (loss). The reconciliation of EBIT, EBITDA and Adjusted EBITDA to net income (loss) is presented in a table attached to this earnings release.

Loss Before Income Taxes Excluding Land-Related Charges, Expenses Associated with Debt Exchange Offer and (Gain) Loss 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 Excluding Land-Related Charges, Expenses Associated with Debt Exchange Offer and (Gain) Loss on Extinguishment of Debt to Loss Before Income Taxes 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. Although we believe that our plans, intentions and expectations reflected in, or suggested by, such forward looking statements are reasonable, we can give no assurance that such plans, intentions, or expectations will be achieved. 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, warranty claims and claims by mortgage investors, (18) successful identification and integration of acquisitions, (19) significant influence of the Company’s controlling stockholders, (20) changes in tax laws affecting the after-tax costs of owning a home, (21) geopolitical risks, terrorist acts and other acts of war, and (22) other factors described in detail in the Company’s Annual Report on Form 10-K for the year ended October 31, 2011 and the Company’s Quarterly Report on Form 10-Q for the quarterly period ended April 30, 2012. 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)

Hovnanian Enterprises, Inc.
July 31, 2012
Statements of Consolidated Operations
(Dollars in Thousands, Except Per Share Data)
	Three Months Ended						Nine Months Ended
	July 31,						July 31,
	2012			2011			2012			2011
	(Unaudited)						(Unaudited)
Total Revenues		$387,011			$285,618			$998,309			$793,282
Costs and Expenses (a)		395,910			337,547			1,075,640			977,588
Gain (Loss) on Extinguishment of Debt		6,230			(1,391	)		57,966			(3,035	)
Gain (Loss) from Unconsolidated Joint Ventures		852			(2,255	)		2,324			(6,479	)
Loss Before Income Taxes		(1,817	)		(55,575	)		(17,041	)		(193,820	)
Income Tax Benefit		(36,493	)		(4,645	)		(35,254	)		(6,081	)
Net Income (Loss)		$34,676			$(50,930	)		$18,213			$(187,739	)

Per Share Data:
Basic:
Income (Loss) Per Common Share		$0.25			$(0.47	)		$0.15			$(1.92	)
Weighted Average Number of
Common Shares Outstanding (b)		138,472			108,721			121,357			97,648
Assuming Dilution:
Income (Loss) Per Common Share		$0.25			$(0.47	)		$0.15			$(1.92	)
Weighted Average Number of
Common Shares Outstanding (b)		138,552			108,721			121,380			97,648

(a) Includes inventory impairment loss and land option write-offs.

(b) For periods with a net loss, basic shares are used in accordance with GAAP rules.

Hovnanian Enterprises, Inc.
July 31, 2012
Reconciliation of Loss Before Income Taxes Excluding Land-Related
Charges, Expenses Associated with the Debt Exchange Offer and
(Gain) Loss on Extinguishment of Debt to Loss Before Income Taxes
(Dollars in Thousands)
	Three Months Ended					Nine Months Ended
	July 31,					July 31,
		2012		2011			2012		2011
	(Unaudited)					(Unaudited)
Loss Before Income Taxes		$(1,817	)	$(55,575	)		$(17,041	)	$(193,820	)
Inventory Impairment Loss and Land Option Write-Offs		689		11,426			7,230		41,876
Expenses Associated with the Debt Exchange Offer		-		-			4,683		-
(Gain) Loss on Extinguishment of Debt		(6,230	)	1,391			(57,966	)	3,035
Loss Before Income Taxes Excluding
Land-Related Charges, Expenses Associated with the Debt Exchange Offer and (Gain) Loss on Extinguishment of Debt (a)		$(7,358	)	$(42,758	)		$(63,094	)	$(148,909	)

(a) Loss Before Income Taxes Excluding Land-Related Charges, Expenses Associated with the Debt Exchange Offer, and (Gain) Loss on Extinguishment of Debt is a non-GAAP Financial measure. The most directly comparable GAAP financial measure is Loss Before Income Taxes.

Hovnanian Enterprises, Inc.
July 31, 2012
Gross Margin
(Dollars in Thousands)
	Homebuilding Gross Margin						Homebuilding Gross Margin
	Three Months Ended						Nine Months Ended
	July 31,						July 31,
	2012			2011			2012			2011
	(Unaudited)						(Unaudited)
Sale of Homes		$371,481			$276,479			$936,305			$759,338
Cost of Sales, Excluding Interest (a)		303,760			234,129			772,368			640,507
Homebuilding Gross Margin, Excluding Interest		67,721			42,350			163,937			118,831
Homebuilding Cost of Sales Interest		14,178			14,222			34,829			41,671
Homebuilding Gross Margin, Including Interest		$53,543			$28,128			$129,108			$77,160

Gross Margin Percentage, Excluding Interest		18.2	%		15.3	%		17.5	%		15.6	%
Gross Margin Percentage, Including Interest		14.4	%		10.2	%		13.8	%		10.2	%

	Land Sales Gross Margin			Land Sales Gross Margin
	Three Months Ended			Nine Months Ended
	July 31,			July 31,
		2012	2011		2012	2011
	(Unaudited)			(Unaudited)
Land Sales		$1,823	$174		$28,737	$8,217
Cost of Sales, Excluding Interest (a)		1,418	127		21,800	5,642
Land Sales Gross Margin, Excluding Interest		405	47		6,937	2,575
Land Sales Interest		120	-		5,262	2,133
Land Sales Gross Margin, Including Interest		$285	$47		$1,675	$442


(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.

Hovnanian Enterprises, Inc.
July 31, 2012
Reconciliation of Adjusted EBITDA to Net Income (Loss)
(Dollars in Thousands)
	Three Months Ended						Nine Months Ended
	July 31,						July 31,
	2012			2011			2012			2011
	(Unaudited)						(Unaudited)
Net Income (Loss)		$34,676			$(50,930	)		$18,213			$(187,739	)
Income Tax Benefit		(36,493	)		(4,645	)		(35,254	)		(6,081	)
Interest Expense		38,888			39,429			112,732			117,883
EBIT (a)		37,071			(16,146	)		95,691			(75,937	)
Depreciation		1,494			2,602			4,711			7,167
Amortization of Debt Costs		912			1,080			2,808			2,937
EBITDA (b)		39,477			(12,464	)		103,210			(65,833	)
Inventory Impairment Loss and Land Option Write-offs		689			11,426			7,230			41,876
Expenses Associated with Debt Exchange Offer		-			-			4,683			-
(Gain) Loss on Extinguishment of Debt		(6,230	)		1,391			(57,966	)		3,035
Adjusted EBITDA (c)		$33,936			$353			$57,157			$(20,922	)

Interest Incurred		$39,477			$40,051			$110,315			$117,773

Adjusted EBITDA to Interest Incurred		0.86			0.01			0.52			(0.18	)

(a) EBIT is a non-GAAP financial measure. The most directly comparable GAAP financial measure is net income (loss). EBIT represents earnings before interest expense and income taxes.

(b) EBITDA is a non-GAAP financial measure. The most directly comparable GAAP financial measure is net income (loss). EBITDA represents earnings before interest expense, income taxes, depreciation and amortization.

(c) Adjusted EBITDA is a non-GAAP financial measure. The most directly comparable GAAP financial measure is net income (loss). Adjusted EBITDA represents earnings before interest expense, income taxes, depreciation, amortization, inventory impairment loss and land option write-offs, expenses associated with debt exchange offer, and (gain) loss on extinguishment of debt.

Hovnanian Enterprises, Inc.
July 31, 2012
Interest Incurred, Expensed and Capitalized
(Dollars in Thousands)
	Three Months Ended			Nine Months Ended
	July 31,			July 31,
		2012	2011		2012	2011
	(Unaudited)			(Unaudited)
Interest Capitalized at Beginning of Period		$118,435	$135,556		$121,441	$136,288
Plus Interest Incurred		39,477	40,051		110,315	117,773
Less Interest Expensed		38,888	39,429		112,732	117,883
Interest Capitalized at End of Period (a)		$119,024	$136,178		$119,024	$136,178

(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 on a gross basis before allocating any portion of impairments to capitalized interest.

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands)

	July 31, 2012		October 31, 2011
	(Unaudited)			(1)
ASSETS

Homebuilding:
Cash and cash equivalents	$	219,326	$	244,356

Restricted cash		48,143		73,539

Inventories:
Sold and unsold homes and lots under development		708,343		720,149

Land and land options held for future development or sale		213,482		245,529

Consolidated inventory not owned:
Specific performance options		-		2,434
Other options		82,203		-

Total consolidated inventory not owned		82,203		2,434

Total inventories		1,004,028		968,112

Investments in and advances to unconsolidated joint ventures		59,680		57,826

Receivables, deposits, and notes		61,142		52,277

Property, plant, and equipment – net		49,674		53,266

Prepaid expenses and other assets		65,222		67,698

Total homebuilding		1,507,215		1,517,074

Financial services:
Cash and cash equivalents		14,644		6,384
Restricted cash		9,020		4,079
Mortgage loans held for sale		91,353		72,172
Other assets		2,611		2,471

Total financial services		117,628		85,106

Total assets	$	1,624,843	$	1,602,180

(1) Derived from the audited balance sheet as of October 31, 2011.

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands Except Share Amounts)

	July 31, 2012			October 31, 2011
	(Unaudited)				(1)
LIABILITIES AND EQUITY

Homebuilding:
Nonrecourse land mortgages	$	44,586		$	26,121
Accounts payable and other liabilities		299,011			303,633
Customers’ deposits		25,143			16,670
Nonrecourse mortgages secured by operating properties		19,024			19,748
Liabilities from inventory not owned		69,797			2,434

Total homebuilding		457,561			368,606

Financial services:
Accounts payable and other liabilities		21,696			14,517
Mortgage warehouse line of credit		78,208			49,729

Total financial services		99,904			64,246

Notes payable:
Senior secured notes		967,871			786,585
Senior notes		458,607			802,862
TEU senior subordinated amortizing notes		7,004			13,323
Accrued interest		31,405			21,331

Total notes payable		1,464,887			1,624,101

Income taxes payable		6,692			41,829

Total liabilities		2,029,044			2,098,782

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, 2012 and at October 31, 2011		135,299			135,299
Common stock, Class A, $.01 par value – authorized 200,000,000 shares; issued 129,385,707 shares at July 31, 2012 and 92,141,492 shares at October 31, 2011 (including 11,760,763 and 11,694,720 shares at July 31, 2012 and October 31, 2011, respectively, held in Treasury)		1,294			921
Common stock, Class B, $.01 par value (convertible to Class A at time of sale) authorized 30,000,000 shares; issued 15,351,601 shares at July 31, 2012 and 15,252,212 shares at October 31, 2011 (including 691,748 shares at July 31, 2012 and October 31, 2011 held in Treasury)		154			153
Paid in capital - common stock		665,443			591,696
Accumulated deficit		(1,091,293	)		(1,109,506	)
Treasury stock - at cost		(115,360	)		(115,257	)

Total Hovnanian Enterprises, Inc. stockholders’ equity deficit		(404,463	)		(496,694	)

Noncontrolling interest in consolidated joint ventures		262			92

Total equity deficit		(404,201	)		(496,602	)

Total liabilities and equity	$	1,624,843		$	1,602,180

(1) Derived from the audited balance sheet as of October 31, 2011.

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,
	2012			2011			2012			2011
Revenues:
Homebuilding:
Sale of homes	$	371,481		$	276,479		$	936,305		$	759,338
Land sales and other revenues		4,743			1,289			36,014			13,695
Total homebuilding		376,224			277,768			972,319			773,033
Financial services		10,787			7,850			25,990			20,249
Total revenues		387,011			285,618			998,309			793,282

Expenses:
Homebuilding:
Cost of sales, excluding interest		305,178			234,256			794,168			646,149
Cost of sales interest		14,298			14,222			40,091			43,804
Inventory impairment loss and land option write-offs		689			11,426			7,230			41,876
Total cost of sales		320,165			259,904			841,489			731,829
Selling, general and administrative		36,230			34,900			104,609			114,944
Total homebuilding expenses		356,395			294,804			946,098			846,773
Financial services		6,111			5,547			16,651			16,194
Corporate general and administrative		11,913			11,648			36,961			38,609
Other interest		24,590			25,207			72,641			74,079
Other operations (income) expense		(3,099	)		341			3,289			1,933
Total expenses		395,910			337,547			1,075,640			977,588
Gain (loss) on extinguishment of debt		6,230			(1,391	)		57,966			(3,035	)
Income (loss) from unconsolidated joint ventures		852			(2,255	)		2,324			(6,479	)
(Loss) before income taxes		(1,817	)		(55,575	)		(17,041	)		(193,820	)
State and federal income tax (benefit) provision:
State		(36,563	)		(4,642	)		(35,461	)		(4,349	)
Federal		70			(3	)		207			(1,732	)
Total income taxes		(36,493	)		(4,645	)		(35,254	)		(6,081	)
Net income (loss)	$	34,676		$	(50,930	)	$	18,213		$	(187,739	)

Per share data:
Basic:
Income (loss) per common share	$	0.25		$	(0.47	)	$	0.15		$	(1.92	)
Weighted-average number of common shares outstanding		138,472			108,721			121,357			97,648
Assuming dilution:
Income (loss) per common share	$	0.25		$	(0.47	)	$	0.15		$	(1.92	)
Weighted-average number of common shares outstanding		138,552			108,721			121,380			97,648

HOVNANIAN ENTERPRISES, INC.

(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE)

(UNAUDITED)

		Communities Under Development Three Months - July 31, 2012
			Net Contracts Three Months Ending Jul 31,				Deliveries Three Months Ending Jul 31,				Contract Backlog Jul 31,
			2012	2011	% Change		2012	2011	% Change		2012	2011	% Change
Northeast
(includes unconsolidated	Home		160	182	(12.1	)%	206	157	31.2	%	322	380	(15.3	)%
joint ventures)	Dollars		$82,295	$81,525	0.9	%	$104,403	$74,598	40.0	%	$155,056	$173,073	(10.4	)%
	Avg. Price		$514,341	$447,940	14.8	%	$506,811	$475,146	6.7	%	$481,540	$455,455	5.7	%
Mid-Atlantic
(includes unconsolidated	Home		189	190	(0.5	)%	223	157	42.0	%	438	336	30.4	%
joint ventures)	Dollars		$82,805	$76,603	8.1	%	$92,484	$60,205	53.6	%	$189,875	$138,187	37.4	%
	Avg. Price		$438,124	$403,174	8.7	%	$414,726	$383,471	8.2	%	$433,505	$411,271	5.4	%
Midwest
(includes unconsolidated	Home		208	136	52.9	%	160	110	45.5	%	538	322	67.1	%
joint ventures)	Dollars		$53,425	$29,953	78.4	%	$36,688	$24,169	51.8	%	$123,274	$65,938	87.0	%
	Avg. Price		$256,853	$220,243	16.6	%	$229,294	$219,718	4.4	%	$229,133	$204,776	11.9	%
Southeast
(includes unconsolidated	Home		175	148	18.2	%	121	83	45.8	%	310	191	62.3	%
joint ventures)	Dollars		$45,783	$36,360	25.9	%	$30,305	$20,751	46.0	%	$80,384	$49,489	62.4	%
	Avg. Price		$261,615	$245,676	6.5	%	$250,455	$250,012	0.2	%	$259,304	$259,105	0.1	%
Southwest
(includes unconsolidated	Home		614	482	27.4	%	529	461	14.8	%	635	396	60.4	%
joint ventures)	Dollars		$166,120	$113,370	46.5	%	$139,407	$107,861	29.2	%	$180,660	$107,686	67.8	%
	Avg. Price		$270,553	$235,207	15.0	%	$263,529	$233,972	12.6	%	$284,505	$271,934	4.6	%
West
(includes unconsolidated	Home		195	159	22.6	%	148	144	2.8	%	209	111	88.3	%
joint ventures)	Dollars		$76,522	$46,761	63.6	%	$57,498	$46,504	23.6	%	$84,677	$36,436	132.4	%
	Avg. Price		$392,421	$294,093	33.4	%	$388,500	$322,944	20.3	%	$405,150	$328,252	23.4	%
Grand Total
(includes unconsolidated	Home		1,541	1,297	18.8	%	1,387	1,112	24.7	%	2,452	1,736	41.2	%
joint ventures)	Dollars		$506,950	$384,572	31.8	%	$460,785	$334,088	37.9	%	$813,926	$570,809	42.6	%
	Avg. Price		$328,974	$296,509	10.9	%	$332,217	$300,439	10.6	%	$331,944	$328,807	1.0	%
Consolidated Total
(excludes unconsolidated	Home		1,382	1,169	18.2	%	1,212	993	22.1	%	2,132	1,469	45.1	%
joint ventures)	Dollars		$423,396	$332,307	27.4	%	$371,481	$276,479	34.4	%	$674,159	$467,571	44.2	%
	Avg. Price		$306,365	$284,266	7.8	%	$306,502	$278,428	10.1	%	$316,210	$318,292	(0.7	)%
Unconsolidated
Joint Ventures	Home		159	128	24.2	%	175	119	47.1	%	320	267	19.9	%
	Dollars		$83,554	$52,265	59.9	%	$89,304	$57,609	55.0	%	$139,767	$103,238	35.4	%
	Avg. Price		$525,494	$408,320	28.7	%	$510,309	$484,109	5.4	%	$436,770	$386,659	13.0	%

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 - July 31, 2012
		Net Contracts							Deliveries							Contract
		Nine Months Ending							Nine Months Ending							Backlog
		Jul 31,							Jul 31,							Jul 31,
		2012		2011		% Change			2012		2011		% Change			2012		2011		% Change
Northeast
(includes unconsolidated	Home		472		468		0.9	%		516		399		29.3	%		322		380		(15.3	)%
joint ventures)	Dollars		$239,378		$211,597		13.1	%		$255,705		$188,270		35.8	%		$155,056		$173,073		(10.4	)%
	Avg. Price		$507,157		$452,130		12.2	%		$495,552		$471,855		5.0	%		$481,540		$455,455		5.7	%
Mid-Atlantic
(includes unconsolidated	Home		625		479		30.5	%		557		405		37.5	%		438		336		30.4	%
joint ventures)	Dollars		$263,575		$184,491		42.9	%		$227,540		$153,112		48.6	%		$189,875		$138,187		37.4	%
	Avg. Price		$421,720		$385,159		9.5	%		$408,508		$378,054		8.1	%		$433,505		$411,271		5.4	%
Midwest
(includes unconsolidated	Home		638		361		76.7	%		400		325		23.1	%		538		322		67.1	%
joint ventures)	Dollars		$148,245		$78,832		88.1	%		$92,140		$67,617		36.3	%		$123,274		$65,938		87.0	%
	Avg. Price		$232,360		$218,371		6.4	%		$230,350		$208,052		10.7	%		$229,133		$204,776		11.9	%
Southeast
(includes unconsolidated	Home		484		334		44.9	%		342		231		48.1	%		310		191		62.3	%
joint ventures)	Dollars		$122,269		$81,812		49.5	%		$85,326		$55,544		53.6	%		$80,384		$49,489		62.4	%
	Avg. Price		$252,622		$244,946		3.1	%		$249,491		$240,450		3.8	%		$259,304		$259,105		0.1	%
Southwest
(includes unconsolidated	Home		1,667		1,283		29.9	%		1,363		1,224		11.4	%		635		396		60.4	%
joint ventures)	Dollars		$436,508		$303,166		44.0	%		$344,844		$292,427		17.9	%		$180,660		$107,686		67.8	%
	Avg. Price		$261,852		$236,295		10.8	%		$253,004		$238,911		5.9	%		$284,505		$271,934		4.6	%
West
(includes unconsolidated	Home		509		388		31.2	%		428		387		10.6	%		209		111		88.3	%
joint ventures)	Dollars		$192,723		$120,845		59.5	%		$149,520		$111,802		33.7	%		$84,677		$36,436		132.4	%
	Avg. Price		$378,630		$311,456		21.6	%		$349,346		$288,894		20.9	%		$405,150		$328,252		23.4	%
Grand Total
(includes unconsolidated	Home		4,395		3,313		32.7	%		3,606		2,971		21.4	%		2,452		1,736		41.2	%
joint ventures)	Dollars		$1,402,698		$980,743		43.0	%		$1,155,075		$868,772		33.0	%		$813,926		$570,809		42.6	%
	Avg. Price		$319,158		$296,029		7.8	%		$320,320		$292,417		9.5	%		$331,944		$328,807		1.0	%
Consolidated Total
(excludes unconsolidated	Home		3,848		3,007		28.0	%		3,144		2,737		14.9	%		2,132		1,469		45.1	%
joint ventures)	Dollars		$1,138,104		$851,361		33.7	%		$936,305		$759,338		23.3	%		$674,159		$467,571		44.2	%
	Avg. Price		$295,765		$283,126		4.5	%		$297,807		$277,434		7.3	%		$316,210		$318,292		(0.7	)%
Unconsolidated
Joint Ventures	Home		547		306		78.8	%		462		234		97.4	%		320		267		19.9	%
	Dollars		$264,594		$129,382		104.5	%		$218,770		$109,434		99.9	%		$139,767		$103,238		35.4	%
	Avg. Price		$483,718		$422,817		14.4	%		$473,528		$467,667		1.3	%		$436,770		$386,659		13.0	%
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.

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HOVNANIAN ENTERPRISES INC Reports