Gross Margin Percentage Improved for Both
Fourth Quarter and Full YearEnded Year with $464
Million of Cash and Cash EquivalentsContracts per
Community Including Unconsolidated Joint Ventures Increased 16% for
the Quarter
Hovnanian Enterprises, Inc. (NYSE:HOV), a leading national
homebuilder, reported results for its fiscal fourth quarter and
year ended October 31, 2017.
“We focused on enhancing our operating results
throughout fiscal 2017 and this is reflected in improvements in our
gross margin percentage and our contracts per community, both of
which increased during the fourth quarter and the full year,”
stated Ara K. Hovnanian, Chairman of the Board, President and Chief
Executive Officer. “We ended fiscal 2017 with $464 million of cash,
which is $219 million in excess of the high end of our target range
and the highest level at a quarter’s end since July 31, 2010. As we
move forward, we remain focused on controlling more lots, further
operational improvements and returning to consistent profitability.
Given our renewed efforts to expand our land position, we believe
we should be well positioned for growing our deliveries, revenues
and profitability in 2019 and beyond.”
“Although we are taking steps to increase our
future community count, our 2017 deliveries and revenues were
impacted by a decrease in our community count, which resulted from
the decisions we made in fiscal 2016 to exit four underperforming
markets, convert a number of wholly owned communities to joint
ventures and temporarily reduce land spend, in order to pay off
$320 million of maturing debt,” concluded Mr. Hovnanian.
RESULTS FOR THE THREE-MONTHS AND YEAR ENDED OCTOBER 31,
2017:
- Total revenues decreased 10.4% to $721.7 million in the fourth
quarter of fiscal 2017, compared with $805.1 million in the fourth
quarter of fiscal 2016. For the fiscal year ended October 31, 2017,
total revenues decreased 10.9% to $2.45 billion compared with $2.75
billion in the prior year.
- Homebuilding revenues for unconsolidated joint ventures
increased 52.6% to $98.1 million in the fourth quarter of fiscal
2017, compared with $64.2 million in the fourth quarter of fiscal
2016. For the fiscal year ended October 31, 2017, homebuilding
revenues for unconsolidated joint ventures increased 120.7% to
$312.2 million compared with $141.4 million in the prior
year.
- Total SG&A was $72.9 million, including a $12.5 million
adjustment to construction defect reserves related to litigation
for two closed communities, or 10.1% of total revenues, for the
fourth quarter ended October 31, 2017 compared with $53.7 million,
or 6.7% of total revenues, in last year’s fourth quarter. Excluding
the $12.5 million adjustment to construction defect reserves, total
SG&A would have been $60.4 million, or 8.4% of total revenues,
for the fiscal 2017 fourth quarter. For fiscal 2017, total SG&A
was $255.7 million, including a $12.5 million adjustment to
construction defect reserves in the fiscal 2017 fourth quarter
related to litigation for two closed communities, or 10.4% of total
revenues, compared with $253.1 million, or 9.2% of total revenues,
in the prior fiscal year. Excluding the $12.5 million adjustment to
construction defect reserves, total SG&A would have been $243.2
million, or 9.9 % of total revenues, for the fiscal year ended
October 31, 2017.
- Interest incurred (some of which was expensed and some of which
was capitalized) was $43.3 million for the fourth quarter of fiscal
2017 compared with $40.3 million in the same quarter one year ago.
For the fiscal year ended October 31, 2017, interest incurred
decreased 4.0% to $160.2 million compared with $166.8 million
during last year.
- Total interest expense was $59.3 million in the fourth quarter
of fiscal 2017, which includes $8.9 million of land and lot sales
interest, compared with $48.2 million in the fourth quarter of
fiscal 2016. Total interest expense increased 1.4% to $185.8
million for all of fiscal 2017 compared with $183.4 million in
fiscal 2016.
- Homebuilding gross margin percentage, after interest expense
and land charges included in cost of sales, was 13.7% for the
fourth quarter of fiscal 2017 compared with 13.0% in the prior
year’s fourth quarter. During all of fiscal 2017, this homebuilding
gross margin percentage was 13.2% compared with 12.2% in the same
period of the previous year.
- Homebuilding gross margin percentage, before interest expense
and land charges included in cost of sales, was 18.2% for the
fourth quarter of fiscal 2017 compared with 17.6% in the prior
year’s fourth quarter. During fiscal 2017, this homebuilding gross
margin percentage was 17.2% compared with 16.9% in the same period
one year ago.
- Income before income taxes for the quarter ended October 31,
2017 was $12.3 million compared to income before income taxes of
$32.1 million during the fourth quarter of 2016. For fiscal 2017,
the loss before income taxes was $45.2 million, which included a
$34.9 million loss on extinguishment of debt, compared to income
before income taxes of $2.4 million during fiscal 2016.
- Income before income taxes, excluding land-related charges and
loss on extinguishment of debt, for the quarter ended October 31,
2017 was $20.8 million compared to $45.8 million during the fourth
quarter of fiscal 2016. For fiscal 2017, income before income
taxes, excluding land-related charges, joint venture write-downs
and loss on extinguishment of debt, was $10.2 million compared to
$39.0 million during fiscal 2016.
- Net income was $11.8 million, or $0.08 per common share, in the
fourth quarter of fiscal 2017 compared with net income of $22.3
million, or $0.14 per common share, during the same quarter a year
ago. For the fiscal year ended October 31, 2017, the net loss was
$332.2 million, or $2.25 per common share, including the $294.0
million increase in the valuation allowance for our deferred tax
assets and a $34.9 million loss on extinguishment of debt, compared
with a net loss of $2.8 million, or $0.02 per common share, in
fiscal 2016.
- Contracts per community, including unconsolidated joint
ventures, increased 16.2% to 8.6 contracts per community for the
quarter ended October 31, 2017 compared with 7.4 contracts,
including unconsolidated joint ventures, per community in last
year’s fourth quarter. Consolidated contracts per community
increased 10.3% to 8.6 contracts per community for the fourth
quarter of fiscal 2017 compared with 7.8 contracts per community in
the fourth quarter of fiscal 2016.
- For November 2017, contracts per community, including
unconsolidated joint ventures, increased 27.3% to 2.8 contracts per
community compared to 2.2 contracts per community for the same
month one year ago. During November 2017, the number of contracts,
including unconsolidated joint ventures, increased 10.8% to 443
homes from 400 homes in November 2016 and the dollar value of
contracts, including unconsolidated joint ventures, increased 5.8%
to $183.9 million in November 2017 compared with $173.8 million for
November 2016.
- As of the end of the fourth quarter of fiscal 2017, community
count, including unconsolidated joint ventures, decreased 16.5% to
157 communities compared with 188 communities at October 31, 2016.
Consolidated community count decreased 22.2% to 130 communities as
of October 31, 2017 from 167 communities at the end of the prior
year’s fourth quarter.
- Despite the significant drop in community count, the number of
contracts, including unconsolidated joint ventures, for the fourth
quarter ended October 31, 2017, decreased 3.2% to 1,344 homes from
1,389 homes for the same quarter last year. The number of
consolidated contracts, during the fourth quarter of fiscal 2017,
decreased 14.4% to 1,112 homes compared with 1,299 homes during the
fourth quarter of 2016.
- During fiscal 2017, the number of contracts, including
unconsolidated joint ventures, was 5,937 homes, a decrease of 6.9%
from 6,380 homes during fiscal 2016. The number of consolidated
contracts, during the year ended October 31, 2017, decreased 14.9%
to 5,196 homes compared with 6,109 homes in the previous year.
- The dollar value of contract backlog, including unconsolidated
joint ventures, as of October 31, 2017, was $1.09 billion, a
decrease of 10.6% compared with $1.22 billion as of October 31,
2016. The dollar value of consolidated contract backlog, as of
October 31, 2017, decreased 24.4% to $808.0 million compared with
$1.07 billion as of October 31, 2016.
- For the quarter ended October 31, 2017, deliveries, including
unconsolidated joint ventures, decreased 9.4% to 1,787 homes
compared with 1,972 homes during the fourth quarter of fiscal 2016.
Consolidated deliveries were 1,604 homes for the fourth quarter of
fiscal 2017, a 14.2% decrease compared with 1,870 homes during the
same quarter a year ago.
- For the year ended October 31, 2017, deliveries, including
unconsolidated joint ventures, decreased 8.4% to 6,149, homes
compared with 6,712 homes in the prior fiscal year. Consolidated
deliveries were 5,602 homes in fiscal 2017, a 13.3% decrease
compared with 6,464 homes in fiscal 2016.
- The consolidated contract cancellation rate for the three
months ended October 31, 2017 was 22%, compared with 20% in the
fourth quarter of the prior year. The contract cancellation rate,
including unconsolidated joint ventures, was 22% in the fourth
quarter of fiscal 2017 compared with 21% in the fourth quarter of
fiscal 2016.
- The valuation allowance was $918.2 million as of October 31,
2017. 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.
LIQUIDITY AND INVENTORY AS OF OCTOBER 31,
2017:
- Total liquidity at the end of the fourth quarter of fiscal 2017
was $473.8 million, which includes $463.7 million of cash and cash
equivalents.
- For the year ended October 31, 2017, net new option lots
increased by 5,565 lots to 6,597 lots compared with 1,032 lots for
all of fiscal 2016. Total lots purchased were 5,825 lots in fiscal
2017 compared with 5,123 lots in the previous year.
- In the fourth quarter of fiscal 2017, approximately 3,100 lots
were put under option or acquired in 35 communities, including
unconsolidated joint ventures.
- Subsequent to the end of the fiscal year, paid off $56.0
million principal amount of debt that matured on December 1,
2017.
WEBCAST INFORMATION:
Hovnanian Enterprises will webcast its fiscal
2017 fourth quarter financial results conference call at 11:00 a.m.
E.T. on Thursday, December 21, 2017. 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 “Past Events” 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, New Jersey, 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. Hovnanian® Homes,
Brighton Homes® and Parkwood Builders. As the developer of K.
Hovnanian’s® Four Seasons communities, the Company is also one of
the nation’s largest builders of active lifestyle communities.
Additional information on Hovnanian Enterprises,
Inc., including a summary investment profile and the Company’s
2016 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
list, 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 and 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 for
historical periods of EBIT, EBITDA and Adjusted EBITDA to net
income (loss) is presented in a table attached to this earnings
release.
Homebuilding gross margin, before costs
of sales interest expense and land charges, and homebuilding gross
margin percentage, before costs of sales interest expense and land
charges, are non-GAAP financial measures. The most directly
comparable GAAP financial measures are homebuilding gross margin
and homebuilding gross margin percentage, respectively. The
reconciliation for historical periods of homebuilding gross margin,
before costs of sales interest expense and land charges, and
homebuilding gross margin percentage, before costs of sales
interest expense and land charges, to homebuilding gross margin and
homebuilding gross margin percentage, respectively, is presented in
a table attached to this earnings release.
Income Before Income Taxes Excluding
Land-Related Charges, Joint Venture Write-Downs and Loss on
Extinguishment of Debt is a non-GAAP financial
measure. The most directly comparable GAAP financial measure is
Income (Loss) Before Income Taxes. The reconciliation for
historical periods of Income Before Income Taxes Excluding
Land-Related Charges, Joint Venture Write-Downs and Loss on
Extinguishment of Debt to Income (Loss)
Before Income Taxes is presented in a table attached to
this earnings release.
Total liquidity is comprised of $463.7
million of cash and cash equivalents, $1.7 million of restricted
cash required to collateralize letters of credit and $8.4 million
of availability under the unsecured revolving credit facility as of
October 31, 2017.
FORWARD-LOOKING STATEMENTS
All statements in this press release
that are not historical facts should be considered as
“Forward-Looking Statements” within the meaning of the “Safe
Harbor” provisions of the Private Securities Litigation Reform Act
of 1995. 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
forward-looking statements include but are not limited to
statements related to the Company’s goals and expectations with
respect to its financial results for future financial periods.
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. By their nature, forward-looking
statements: (i) speak only as of the date they are made, (ii) are
not guarantees of future performance or results and (iii) are
subject to risks, uncertainties and assumptions that are difficult
to predict or quantify. Therefore, actual results could differ
materially and adversely from those forward-looking statements as a
result of a variety of factors. Such risks, uncertainties and other
factors include, but are not limited to, (1) changes in general and
local economic, industry and business conditions and impacts of a
sustained homebuilding downturn; (2) adverse weather and other
environmental conditions and natural disasters; (3) levels of
indebtedness and restrictions on the Company’s operations and
activities imposed by the agreements governing the Company’s
outstanding indebtedness; (4) the Company's sources of liquidity;
(5) changes in credit ratings; (6) changes in market conditions and
seasonality of the Company’s business; (7) the availability and
cost of suitable land and improved lots; (8) shortages in, and
price fluctuations of, raw materials and labor; (9) regional and
local economic factors, including dependency on certain sectors of
the economy, and employment levels affecting home prices and sales
activity in the markets where the Company builds homes; (10)
fluctuations in interest rates and the availability of mortgage
financing; (11) changes in tax laws affecting the after-tax costs
of owning a home; (12) operations through joint ventures with third
parties; (13) government regulation, including regulations
concerning development of land, the home building, sales and
customer financing processes, tax laws and the environment; (14)
product liability litigation, warranty claims and claims made by
mortgage investors; (15) levels of competition; (16) availability
and terms of financing to the Company; (17) successful
identification and integration of acquisitions; (18) significant
influence of the Company’s controlling stockholders; (19)
availability of net operating loss carryforwards; (20) utility
shortages and outages or rate fluctuations; (21) geopolitical
risks, terrorist acts and other acts of war; (22) increases in
cancellations of agreements of sale; (23) loss of key management
personnel or failure to attract qualified personnel; (24)
information technology failures and data security breaches; (25)
legal claims brought against us and not resolved in our favor; and
(26) certain risks, uncertainties and other factors described in
detail in the Company’s Annual Report on Form 10-K for the fiscal
year ended October 31, 2016 and subsequent filings with the
Securities and Exchange Commission. 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. |
|
|
|
|
|
|
|
October 31,
2017 |
|
|
|
|
|
|
|
Statements of
Consolidated Operations |
|
|
|
|
|
|
|
(Dollars in Thousands,
Except Per Share Data) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
Twelve Months Ended |
|
|
|
|
October 31, |
|
October 31, |
|
|
|
|
|
2017 |
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
Total
Revenues |
$721,686 |
|
$805,069 |
|
|
$2,451,665 |
|
|
$2,752,247 |
|
Costs and
Expenses (a) |
|
712,443 |
|
|
770,609 |
|
|
|
2,455,008 |
|
|
|
2,742,265 |
|
Loss on
Extinguishment of Debt |
|
- |
|
|
(3,200 |
) |
|
|
(34,854 |
) |
|
|
(3,200 |
) |
Income
(Loss) from Unconsolidated Joint Ventures |
|
3,062 |
|
|
881 |
|
|
|
(7,047 |
) |
|
|
(4,346 |
) |
Income
(Loss) Before Income Taxes |
|
12,305 |
|
|
32,141 |
|
|
|
(45,244 |
) |
|
|
2,436 |
|
Income Tax
Provision |
|
464 |
|
|
9,852 |
|
|
|
286,949 |
|
|
|
5,255 |
|
Net Income
(Loss) |
$11,841 |
|
$22,289 |
|
|
$(332,193 |
) |
|
$(2,819 |
) |
|
|
|
|
|
|
|
|
|
|
|
Per Share
Data: |
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
|
|
Income
(Loss) Per Common Share |
$0.08 |
|
$0.14 |
|
|
$(2.25 |
) |
|
$(0.02 |
) |
|
Weighted
Average Number of |
|
|
|
|
|
|
|
|
|
Common
Shares Outstanding (b) |
|
147,905 |
|
|
147,521 |
|
|
|
147,703 |
|
|
|
147,451 |
|
Assuming
Dilution: |
|
|
|
|
|
|
|
|
Income
(Loss) Per Common Share |
$0.08 |
|
$0.14 |
|
|
$(2.25 |
) |
|
$(0.02 |
) |
|
Weighted
Average Number of |
|
|
|
|
|
|
|
|
|
Common
Shares Outstanding (b) |
|
160,548 |
|
|
160,590 |
|
|
|
147,703 |
|
|
|
147,451 |
|
|
|
|
|
|
|
|
|
|
|
|
(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. |
|
|
|
|
|
|
|
October 31, 2017 |
|
|
|
|
|
|
|
Reconciliation of Income Before Income Taxes Excluding Land-Related
Charges, Joint Venture Write-Downs and Loss on Extinguishment of
Debt to Income (Loss) Before Income Taxes |
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
Thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
|
|
|
October 31, |
|
October 31, |
|
|
|
|
|
2017 |
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
Income
(Loss) Before Income Taxes |
$12,305 |
|
$32,141 |
|
|
$(45,244 |
) |
|
$2,436 |
|
Inventory
Impairment Loss and Land Option Write-Offs |
|
8,479 |
|
|
10,438 |
|
|
|
17,813 |
|
|
|
33,353 |
|
Unconsolidated Joint Venture Investment Write Downs |
|
- |
|
|
- |
|
|
|
2,763 |
|
|
|
- |
|
Loss on
Extinguishment of Debt |
|
- |
|
|
(3,200 |
) |
|
|
(34,854 |
) |
|
|
(3,200 |
) |
Income
Before Income Taxes Excluding Land-Related Charges, Joint Venture
Write-Downs and Loss on Extinguishment of Debt (a) |
$20,784 |
|
$45,779 |
|
|
$10,186 |
|
|
$38,989 |
|
|
|
|
|
|
|
|
|
|
|
|
(a) Income
Before Income Taxes Excluding Land-Related Charges, Joint Venture
Write-Downs and Loss on Extinguishment of Debt is a non-GAAP
financial measure. The most directly comparable GAAP financial
measure is Income (Loss) Before Income Taxes. |
|
|
|
|
|
|
|
|
|
|
Hovnanian
Enterprises, Inc. |
|
|
|
|
|
|
|
|
October 31,
2017 |
|
|
|
|
|
|
|
|
Gross Margin |
|
|
|
|
|
|
|
|
(Dollars in
Thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Homebuilding Gross Margin |
Homebuilding Gross Margin |
|
|
Three Months Ended |
|
Twelve Months Ended |
|
|
October 31, |
|
October 31, |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
(Unaudited) |
|
(Unaudited) |
Sale of Homes |
|
$666,783 |
|
|
$777,472 |
|
|
$2,340,033 |
|
|
$2,600,790 |
|
Cost of Sales,
Excluding Interest Expense (a) |
|
|
545,150 |
|
|
|
640,580 |
|
|
|
1,937,116 |
|
|
|
2,162,284 |
|
Homebuilding Gross Margin, Before Cost of Sales Interest Expense
and Land Charges (b) |
|
121,633 |
|
|
|
136,892 |
|
|
|
402,917 |
|
|
|
438,506 |
|
Cost of
Sales Interest Expense, Excluding Land Sales Interest Expense |
|
21,618 |
|
|
|
25,302 |
|
|
|
76,902 |
|
|
|
86,593 |
|
Homebuilding Gross Margin, After Cost of Sales Interest Expense,
Before Land Charges (b) |
|
100,015 |
|
|
|
111,590 |
|
|
|
326,015 |
|
|
|
351,913 |
|
Land Charges |
|
|
8,479 |
|
|
|
10,438 |
|
|
|
17,813 |
|
|
|
33,353 |
|
Homebuilding Gross
Margin |
|
$91,536 |
|
|
$101,152 |
|
|
$308,202 |
|
|
$318,560 |
|
|
|
|
|
|
|
|
|
|
Gross Margin
Percentage |
|
|
13.7 |
% |
|
|
13.0 |
% |
|
|
13.2 |
% |
|
|
12.2 |
% |
Gross
Margin Percentage, Before Cost of Sales Interest Expense and Land
Charges (b) |
|
18.2 |
% |
|
|
17.6 |
% |
|
|
17.2 |
% |
|
|
16.9 |
% |
Gross
Margin Percentage, After Cost of Sales Interest Expense, Before
Land Charges (b) |
|
15.0 |
% |
|
|
14.4 |
% |
|
|
13.9 |
% |
|
|
13.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
Land Sales Gross Margin |
Land Sales Gross Margin |
|
|
Three Months Ended |
|
Twelve Months Ended |
|
|
October 31, |
|
October 31, |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
(Unaudited) |
|
(Unaudited) |
Land and Lot Sales |
|
$37,099 |
|
|
$5,990 |
|
|
$48,596 |
|
|
$76,041 |
|
Cost of Sales,
Excluding Interest and Land Charges (a) |
|
|
17,301 |
|
|
|
5,898 |
|
|
|
24,688 |
|
|
|
68,173 |
|
Land and
Lot Sales Gross Margin, Excluding Interest and Land Charges |
|
19,798 |
|
|
|
92 |
|
|
|
23,908 |
|
|
|
7,868 |
|
Land and Lot Sales
Interest |
|
|
8,888 |
|
|
|
396 |
|
|
|
11,634 |
|
|
|
5,798 |
|
Land and
Lot Sales Gross Margin, Including Interest and Excluding Land
Charges |
$10,910 |
|
|
$(304 |
) |
|
$12,274 |
|
|
$2,070 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 Consolidated
Statements of Operations. |
(b)
Homebuilding Gross Margin, Before Cost of Sales Interest Expense
and Land Charges, and Homebuilding Gross Margin Percentage, before
Cost of Sales Interest Expense and Land Charges, are non-GAAP
financial measures. The most directly comparable GAAP financial
measures are Homebuilding Gross Margin and Homebuilding Gross
Margin Percentage, respectively. |
|
|
|
|
|
|
|
|
|
Hovnanian
Enterprises, Inc. |
|
|
|
|
|
|
|
October 31,
2017 |
|
|
|
|
|
|
|
Reconciliation of Adjusted EBITDA to Net Income (Loss) |
(Dollars in
Thousands) |
|
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
October 31, |
|
October 31, |
|
|
2017 |
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
(Unaudited) |
|
|
Net Income (Loss) |
$11,841 |
|
$22,289 |
|
|
$(332,193 |
) |
|
$(2,819 |
) |
Income Tax
Provision |
|
464 |
|
|
9,852 |
|
|
|
286,949 |
|
|
|
5,255 |
|
Interest Expense |
|
59,327 |
|
|
48,197 |
|
|
|
185,840 |
|
|
|
183,358 |
|
EBIT (a) |
|
71,632 |
|
|
80,338 |
|
|
|
140,596 |
|
|
|
185,794 |
|
Depreciation |
|
1,037 |
|
|
957 |
|
|
|
4,249 |
|
|
|
3,565 |
|
Amortization of Debt
Costs |
|
- |
|
|
1,446 |
|
|
|
1,632 |
|
|
|
5,261 |
|
EBITDA (b) |
|
72,669 |
|
|
82,741 |
|
|
|
146,477 |
|
|
|
194,620 |
|
Inventory Impairment
Loss and Land Option Write-offs |
|
8,479 |
|
|
10,438 |
|
|
|
17,813 |
|
|
|
33,353 |
|
Loss on Extinguishment
of Debt |
|
- |
|
|
(3,200 |
) |
|
|
(34,854 |
) |
|
|
(3,200 |
) |
Adjusted EBITDA
(c) |
$81,148 |
|
$96,379 |
|
|
$199,144 |
|
|
$231,173 |
|
|
|
|
|
|
|
|
|
Interest Incurred |
$43,259 |
|
$40,341 |
|
|
$160,203 |
|
|
$166,824 |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA to
Interest Incurred |
|
1.88 |
|
|
2.39 |
|
|
|
1.24 |
|
|
|
1.39 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 and loss on extinguishment of debt. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hovnanian
Enterprises, Inc. |
|
|
|
|
|
|
|
October 31,
2017 |
|
|
|
|
|
|
|
Interest Incurred,
Expensed and Capitalized |
|
|
|
|
|
|
|
(Dollars in
Thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
October 31, |
|
October 31, |
|
|
2017 |
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
(Unaudited) |
|
(Unaudited) |
Interest Capitalized at
Beginning of Period |
$87,119 |
|
$104,544 |
|
|
$96,688 |
|
|
$123,898 |
|
Plus Interest
Incurred |
|
43,259 |
|
|
40,341 |
|
|
|
160,203 |
|
|
|
166,824 |
|
Less Interest Expensed
(a) |
|
59,327 |
|
|
48,197 |
|
|
|
185,840 |
|
|
|
183,358 |
|
Less Interest
Contributed to Unconsolidated Joint Venture (a) |
|
- |
|
|
- |
|
|
|
- |
|
|
|
10,676 |
|
Interest Capitalized at
End of Period (b) |
$71,051 |
|
$96,688 |
|
|
$71,051 |
|
|
$96,688 |
|
|
|
|
|
|
|
|
|
(a)
Represents capitalized interest which was included as part of the
assets contributed to the joint venture the Company entered into in
November 2015. There was no impact to the Consolidated Statement of
Operations as a result of this transaction. |
(b)
Capitalized interest amounts are shown gross before allocating any
portion of impairments to capitalized interest. |
|
|
HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
(In Thousands) |
|
|
|
October 31, 2017 |
|
|
October 31, 2016 |
|
|
(Unaudited) |
|
|
|
(1) |
|
ASSETS |
|
|
|
|
|
Homebuilding: |
|
|
|
|
|
Cash and cash
equivalents |
|
$463,697 |
|
|
$339,773 |
|
Restricted cash and
cash equivalents |
|
|
2,077 |
|
|
|
3,914 |
|
Inventories: |
|
|
|
|
|
Sold and
unsold homes and lots under development |
|
|
744,119 |
|
|
|
899,082 |
|
Land and
land options held for future development or sale |
|
|
140,924 |
|
|
|
175,301 |
|
Consolidated inventory not owned |
|
|
124,784 |
|
|
|
208,701 |
|
Total
inventories |
|
|
1,009,827 |
|
|
|
1,283,084 |
|
Investments in and
advances to unconsolidated joint ventures |
|
|
115,090 |
|
|
|
100,502 |
|
Receivables, deposits
and notes, net |
|
|
58,149 |
|
|
|
49,726 |
|
Property, plant and
equipment, net |
|
|
52,919 |
|
|
|
50,332 |
|
Prepaid expenses and
other assets |
|
|
37,026 |
|
|
|
46,762 |
|
Total
homebuilding |
|
|
1,738,785 |
|
|
|
1,874,093 |
|
Financial services cash
and cash equivalents |
|
|
5,623 |
|
|
|
6,992 |
|
Financial services
other assets |
|
|
156,490 |
|
|
|
190,238 |
|
Income taxes receivable
– including net deferred tax benefits |
|
|
- |
|
|
|
283,633 |
|
Total assets |
|
$1,900,898 |
|
|
$2,354,956 |
|
LIABILITIES AND
EQUITY |
|
|
|
|
|
Homebuilding: |
|
|
|
|
|
Nonrecourse mortgages secured by inventory, net of debt issuance
costs |
|
$64,512 |
|
|
$82,115 |
|
Accounts
payable and other liabilities |
|
|
335,057 |
|
|
|
369,228 |
|
Customers’ deposits |
|
|
33,772 |
|
|
|
37,429 |
|
Nonrecourse mortgages secured by operating properties |
|
|
13,012 |
|
|
|
14,312 |
|
Liabilities from inventory not owned, net of debt issuance
costs |
|
|
91,101 |
|
|
|
150,179 |
|
Revolving
credit facility |
|
|
52,000 |
|
|
|
52,000 |
|
Notes
payable and term loan, net of discount and debt issuance costs |
|
|
1,627,674 |
|
|
|
1,605,758 |
|
Total
homebuilding |
|
|
2,217,128 |
|
|
|
2,311,021 |
|
Financial services |
|
|
141,914 |
|
|
|
172,445 |
|
Income taxes
payable |
|
|
2,227 |
|
|
|
- |
|
Total liabilities |
|
|
2,361,269 |
|
|
|
2,483,466 |
|
Stockholders' equity
deficit: |
|
|
|
|
|
Preferred
stock, $0.01 par value - authorized 100,000 shares; issued and
outstanding 5,600 shares with a liquidation preference of $140,000
at October 31, 2017 and 2016 |
|
|
135,299 |
|
|
|
135,299 |
|
Common
stock, Class A, $0.01 par value - authorized 400,000,000 shares;
issued 144,046,073 shares at October 31, 2017 and 143,806,775
shares at October 31, 2016 |
|
|
1,440 |
|
|
|
1,438 |
|
Common
stock, Class B, $0.01 par value (convertible to Class A at time of
sale) - authorized 60,000,000 shares; issued 15,999,355 shares at
October 31, 2017 and 15,942,809 shares at October 31, 2016 |
|
|
160 |
|
|
|
159 |
|
Paid in
capital - common stock |
|
|
706,466 |
|
|
|
706,137 |
|
Accumulated deficit |
|
|
(1,188,376 |
) |
|
|
(856,183 |
) |
Treasury
stock - at cost – 11,760,763 shares of Class A common stock and
691,748 shares of Class B common stock at October 31, 2017 and
2016 |
|
|
(115,360 |
) |
|
|
(115,360 |
) |
Total
stockholders' equity deficit |
|
|
(460,371 |
) |
|
|
(128,510 |
) |
Total liabilities and
equity |
|
$1,900,898 |
|
|
$2,354,956 |
|
|
|
|
|
|
|
|
(1) Derived
from the audited balance sheet as of October 31, 2016 |
|
|
HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF OPERATIONS |
(In Thousands Except Per Share Data) |
(Unaudited) |
|
|
Three Months Ended October 31, |
|
Twelve Months Ended October 31, |
|
|
2017 |
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
Revenues: |
|
|
|
|
|
|
|
Homebuilding: |
|
|
|
|
|
|
|
Sale of homes |
$666,783 |
|
$777,472 |
|
|
$2,340,033 |
|
|
$2,600,790 |
|
Land sales and other revenues |
|
38,496 |
|
|
6,694 |
|
|
|
52,889 |
|
|
|
78,840 |
|
|
|
|
|
|
|
|
|
Total homebuilding |
|
705,279 |
|
|
784,166 |
|
|
|
2,392,922 |
|
|
|
2,679,630 |
|
Financial services |
|
16,407 |
|
|
20,903 |
|
|
|
58,743 |
|
|
|
72,617 |
|
|
|
|
|
|
|
|
|
Total revenues |
|
721,686 |
|
|
805,069 |
|
|
|
2,451,665 |
|
|
|
2,752,247 |
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
Homebuilding: |
|
|
|
|
|
|
|
Cost of sales, excluding interest |
|
562,451 |
|
|
646,478 |
|
|
|
1,961,804 |
|
|
|
2,230,457 |
|
Cost of sales interest |
|
30,506 |
|
|
25,698 |
|
|
|
88,536 |
|
|
|
92,391 |
|
Inventory impairment loss and land option write-offs |
|
8,479 |
|
|
10,438 |
|
|
|
17,813 |
|
|
|
33,353 |
|
|
|
|
|
|
|
|
|
Total cost of sales |
|
601,436 |
|
|
682,614 |
|
|
|
2,068,153 |
|
|
|
2,356,201 |
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
60,928 |
|
|
37,378 |
|
|
|
196,320 |
|
|
|
192,938 |
|
|
|
|
|
|
|
|
|
Total homebuilding
expenses |
|
662,364 |
|
|
719,992 |
|
|
|
2,264,473 |
|
|
|
2,549,139 |
|
|
|
|
|
|
|
|
|
Financial services |
|
9,264 |
|
|
10,395 |
|
|
|
32,346 |
|
|
|
37,144 |
|
|
|
|
|
|
|
|
|
Corporate general and administrative |
|
11,942 |
|
|
16,337 |
|
|
|
59,367 |
|
|
|
60,141 |
|
|
|
|
|
|
|
|
|
Other interest |
|
28,821 |
|
|
22,499 |
|
|
|
97,304 |
|
|
|
90,967 |
|
|
|
|
|
|
|
|
|
Other operations |
|
52 |
|
|
1,386 |
|
|
|
1,518 |
|
|
|
4,874 |
|
|
|
|
|
|
|
|
|
Total
expenses |
|
712,443 |
|
|
770,609 |
|
|
|
2,455,008 |
|
|
|
2,742,265 |
|
|
|
|
|
|
|
|
|
Loss on extinguishment
of debt |
|
- |
|
|
(3,200 |
) |
|
|
(34,854 |
) |
|
|
(3,200 |
) |
|
|
|
|
|
|
|
|
Income (loss) from
unconsolidated joint ventures |
|
3,062 |
|
|
881 |
|
|
|
(7,047 |
) |
|
|
(4,346 |
) |
|
|
|
|
|
|
|
|
Income (loss)
before income taxes |
|
12,305 |
|
|
32,141 |
|
|
|
(45,244 |
) |
|
|
2,436 |
|
|
|
|
|
|
|
|
|
State and federal income tax provision
(benefit): |
|
|
|
|
|
|
|
State |
|
464 |
|
|
(2,538 |
) |
|
|
11,261 |
|
|
|
2,457 |
|
Federal |
|
- |
|
|
12,390 |
|
|
|
275,688 |
|
|
|
2,798 |
|
|
|
|
|
|
|
|
|
Total income
taxes |
|
464 |
|
|
9,852 |
|
|
|
286,949 |
|
|
|
5,255 |
|
|
|
|
|
|
|
|
|
Net income (loss) |
$11,841 |
|
$22,289 |
|
|
$(332,193 |
) |
|
$(2,819 |
) |
|
|
|
|
|
|
|
|
Per share data: |
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
Income (loss)
per common share |
$0.08 |
|
$0.14 |
|
|
$(2.25 |
) |
|
$(0.02 |
) |
Weighted-average number of common |
|
|
|
|
|
|
|
shares outstanding |
|
147,905 |
|
|
147,521 |
|
|
|
147,703 |
|
|
|
147,451 |
|
|
|
|
|
|
|
|
|
Assuming dilution: |
|
|
|
|
|
|
|
Income (loss)
per common share |
$0.08 |
|
$0.14 |
|
|
$(2.25 |
) |
|
$(0.02 |
) |
Weighted-average number of common |
|
|
|
|
|
|
|
shares outstanding |
|
160,548 |
|
|
160,590 |
|
|
|
147,703 |
|
|
|
147,451 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HOVNANIAN ENTERPRISES, INC. |
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE) |
(SEGMENT DATA EXCLUDES UNCONSOLIDATED JOINT
VENTURES) |
(UNAUDITED) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months - October 31, 2017 |
|
|
|
|
|
Contracts (1) |
Deliveries |
Contract |
|
|
Three Months Ended |
Three Months Ended |
Backlog |
|
|
Oct 31, |
Oct 31, |
Oct 31, |
|
|
|
2017 |
|
2016 |
% Change |
|
2017 |
|
2016 |
% Change |
|
2017 |
|
2016 |
% Change |
Northeast |
|
|
|
|
|
|
|
|
|
|
(NJ, PA) |
Home |
|
44 |
|
106 |
(58.5 |
)% |
|
62 |
|
162 |
(61.7 |
)% |
|
98 |
|
204 |
(52.0 |
)% |
|
Dollars |
$24,407 |
$50,179 |
(51.4 |
)% |
$27,913 |
$81,467 |
(65.7 |
)% |
$51,778 |
$99,512 |
(48.0 |
)% |
|
Avg.
Price |
$554,708 |
$473,383 |
17.2 |
% |
$450,208 |
$502,884 |
(10.5 |
)% |
$528,349 |
$487,803 |
8.3 |
% |
Mid-Atlantic |
|
|
|
|
|
|
|
|
|
|
(DE, MD, VA, WV) |
Home |
|
146 |
|
196 |
(25.5 |
)% |
|
256 |
|
332 |
(22.9 |
)% |
|
309 |
|
430 |
(28.1 |
)% |
|
Dollars |
$77,112 |
$99,179 |
(22.2 |
)% |
$149,881 |
$162,902 |
(8.0 |
)% |
$185,123 |
$248,974 |
(25.6 |
)% |
|
Avg.
Price |
$528,168 |
$506,012 |
4.4 |
% |
$585,473 |
$490,668 |
19.3 |
% |
$599,104 |
$579,009 |
3.5 |
% |
Midwest (2) |
|
|
|
|
|
|
|
|
|
|
(IL, MN, OH) |
Home |
|
137 |
|
125 |
9.6 |
% |
|
229 |
|
215 |
6.5 |
% |
|
382 |
|
374 |
2.1 |
% |
|
Dollars |
$38,139 |
$38,339 |
(0.5 |
)% |
$72,944 |
$62,193 |
17.3 |
% |
$98,969 |
$104,527 |
(5.3 |
)% |
|
Avg.
Price |
$278,383 |
$306,712 |
(9.2 |
)% |
$318,533 |
$289,271 |
10.1 |
% |
$259,082 |
$279,485 |
(7.3 |
)% |
Southeast (3) |
|
|
|
|
|
|
|
|
|
|
(FL, GA, NC, SC) |
Home |
|
146 |
|
141 |
3.5 |
% |
|
183 |
|
164 |
11.6 |
% |
|
285 |
|
332 |
(14.2 |
)% |
|
Dollars |
$56,354 |
$53,372 |
5.6 |
% |
$78,267 |
$67,690 |
15.6 |
% |
$120,382 |
$145,171 |
(17.1 |
)% |
|
Avg.
Price |
$385,986 |
$378,522 |
2.0 |
% |
$427,691 |
$412,744 |
3.6 |
% |
$422,394 |
$437,261 |
(3.4 |
)% |
Southwest |
|
|
|
|
|
|
|
|
|
|
(AZ, TX) |
Home |
|
425 |
|
551 |
(22.9 |
)% |
|
606 |
|
796 |
(23.9 |
)% |
|
509 |
|
763 |
(33.3 |
)% |
|
Dollars |
$142,926 |
$190,426 |
(24.9 |
)% |
$209,223 |
$298,689 |
(30.0 |
)% |
$177,818 |
$285,644 |
(37.7 |
)% |
|
Avg.
Price |
$336,298 |
$345,601 |
(2.7 |
)% |
$345,252 |
$375,237 |
(8.0 |
)% |
$349,347 |
$374,370 |
(6.7 |
)% |
West |
|
|
|
|
|
|
|
|
|
|
(CA) |
Home |
|
214 |
|
180 |
18.9 |
% |
|
268 |
|
201 |
33.3 |
% |
|
400 |
|
295 |
35.6 |
% |
|
Dollars |
$91,048 |
$102,819 |
(11.4 |
)% |
$128,555 |
$104,531 |
23.0 |
% |
$173,963 |
$185,274 |
(6.1 |
)% |
|
Avg.
Price |
$425,457 |
$571,218 |
(25.5 |
)% |
$479,683 |
$520,055 |
(7.8 |
)% |
$434,906 |
$628,047 |
(30.8 |
)% |
Consolidated Segment Total |
|
|
|
|
|
|
|
|
|
|
|
Home |
|
1,112 |
|
1,299 |
(14.4 |
)% |
|
1,604 |
|
1,870 |
(14.2 |
)% |
|
1,983 |
|
2,398 |
(17.3 |
)% |
|
Dollars |
$429,986 |
$534,314 |
(19.5 |
)% |
$666,783 |
$777,472 |
(14.2 |
)% |
$808,033 |
$1,069,102 |
(24.4 |
)% |
|
Avg.
Price |
$386,678 |
$411,327 |
(6.0 |
)% |
$415,700 |
$415,761 |
(0.0 |
)% |
$407,480 |
$445,831 |
(8.6 |
)% |
Unconsolidated Joint Ventures (4) |
|
|
|
|
|
|
|
|
|
|
|
Home |
|
232 |
|
90 |
157.8 |
% |
|
183 |
|
102 |
79.4 |
% |
|
454 |
|
251 |
80.9 |
% |
|
Dollars |
$136,884 |
$48,394 |
182.9 |
% |
$97,590 |
$64,099 |
52.2 |
% |
$283,528 |
$152,430 |
86.0 |
% |
|
Avg.
Price |
$590,017 |
$537,706 |
9.7 |
% |
$533,275 |
$628,417 |
(15.1 |
)% |
$624,510 |
$607,292 |
2.8 |
% |
Grand Total |
|
|
|
|
|
|
|
|
|
|
|
Home |
|
1,344 |
|
1,389 |
(3.2 |
)% |
|
1,787 |
|
1,972 |
(9.4 |
)% |
|
2,437 |
|
2,649 |
(8.0 |
)% |
|
Dollars |
$566,870 |
$582,708 |
(2.7 |
)% |
$764,373 |
$841,571 |
(9.2 |
)% |
$1,091,561 |
$1,221,532 |
(10.6 |
)% |
|
Avg.
Price |
$421,778 |
$419,516 |
0.5 |
% |
$427,741 |
$426,760 |
0.2 |
% |
$447,912 |
$461,130 |
(2.9 |
)% |
|
|
|
|
|
|
|
|
|
|
|
DELIVERIES INCLUDE EXTRAS |
|
|
|
|
|
|
|
|
|
|
Notes: |
|
|
|
|
|
|
|
|
|
|
(1)
Contracts are defined as new contracts signed during the period for
the purchase of homes, less cancellations of prior contracts. (2)
Contract backlog as of October 31, 2016 reflects the reduction of
64 homes and $24.1 million, related to the sale of our land
portfolio in Minneapolis, MN.(3) Contract backlog as of October 31,
2016 reflects the reduction of 67 homes and $33.7 million, related
to the sale of our land portfolio in Raleigh, NC.(4) Represents
home deliveries, home revenues and average prices for our
unconsolidated homebuilding joint ventures for the period. We
provide this data as a supplement to our consolidated results as an
indicator of the volume managed in our unconsolidated homebuilding
joint ventures. Our proportionate share of the income or loss
of unconsolidated homebuilding and land development joint ventures
is reflected as a separate line item in our consolidated financial
statements under “Income (loss) from unconsolidated joint
ventures”. |
|
|
|
|
|
|
|
|
|
|
|
HOVNANIAN ENTERPRISES, INC. |
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE) |
(SEGMENT DATA EXCLUDES UNCONSOLIDATED JOINT
VENTURES) |
(UNAUDITED) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months - October 31, 2017 |
|
|
|
|
|
Contracts (1) |
Deliveries |
Contract |
|
|
Twelve Months Ended |
Twelve Months Ended |
Backlog |
|
|
Oct 31, |
Oct 31, |
Oct 31, |
|
|
|
2017 |
|
2016 |
% Change |
|
2017 |
|
2016 |
% Change |
|
2017 |
|
2016 |
% Change |
Northeast |
|
|
|
|
|
|
|
|
|
|
(NJ, PA) |
Home |
|
245 |
|
468 |
(47.6 |
)% |
|
351 |
|
557 |
(37.0 |
)% |
|
98 |
|
204 |
(52.0 |
)% |
|
Dollars |
$119,018 |
$226,635 |
(47.5 |
)% |
$166,752 |
$274,126 |
(39.2 |
)% |
$51,778 |
$99,512 |
(48.0 |
)% |
|
Avg.
Price |
$485,789 |
$484,261 |
0.3 |
% |
$475,077 |
$492,147 |
(3.5 |
)% |
$528,349 |
$487,803 |
8.3 |
% |
Mid-Atlantic |
|
|
|
|
|
|
|
|
|
|
(DE, MD, VA, WV) |
Home |
|
735 |
|
949 |
(22.6 |
)% |
|
856 |
|
960 |
(10.8 |
)% |
|
309 |
|
430 |
(28.1 |
)% |
|
Dollars |
$399,420 |
$467,782 |
(14.6 |
)% |
$463,271 |
$457,906 |
1.2 |
% |
$185,123 |
$248,974 |
(25.6 |
)% |
|
Avg.
Price |
$543,429 |
$492,920 |
10.2 |
% |
$541,205 |
$476,985 |
13.5 |
% |
$599,104 |
$579,009 |
3.5 |
% |
Midwest (2) |
|
|
|
|
|
|
|
|
|
|
(IL, MN, OH) |
Home |
|
648 |
|
724 |
(10.5 |
)% |
|
640 |
|
921 |
(30.5 |
)% |
|
382 |
|
374 |
2.1 |
% |
|
Dollars |
$193,451 |
$229,671 |
(15.8 |
)% |
$199,009 |
$287,469 |
(30.8 |
)% |
$98,969 |
$104,527 |
(5.3 |
)% |
|
Avg.
Price |
$298,535 |
$317,225 |
(5.9 |
)% |
$310,951 |
$312,127 |
(0.4 |
)% |
$259,082 |
$279,485 |
(7.3 |
)% |
Southeast (3) |
|
|
|
|
|
|
|
|
|
|
(FL, GA, NC, SC) |
Home |
|
567 |
|
701 |
(19.1 |
)% |
|
614 |
|
581 |
5.7 |
% |
|
285 |
|
332 |
(14.2 |
)% |
|
Dollars |
$232,278 |
$287,538 |
(19.2 |
)% |
$257,066 |
$214,585 |
19.8 |
% |
$120,382 |
$145,171 |
(17.1 |
)% |
|
Avg.
Price |
$409,662 |
$410,183 |
(0.1 |
)% |
$418,675 |
$369,339 |
13.4 |
% |
$422,394 |
$437,261 |
(3.4 |
)% |
Southwest |
|
|
|
|
|
|
|
|
|
|
(AZ, TX) |
Home |
|
2,103 |
|
2,480 |
(15.2 |
)% |
|
2,357 |
|
2,750 |
(14.3 |
)% |
|
509 |
|
763 |
(33.3 |
)% |
|
Dollars |
$718,595 |
$887,341 |
(19.0 |
)% |
$826,422 |
$1,024,410 |
(19.3 |
)% |
$177,818 |
$285,644 |
(37.7 |
)% |
|
Avg.
Price |
$341,700 |
$357,799 |
(4.5 |
)% |
$350,624 |
$372,512 |
(5.9 |
)% |
$349,347 |
$374,370 |
(6.7 |
)% |
West |
|
|
|
|
|
|
|
|
|
|
(CA) |
Home |
|
898 |
|
787 |
14.1 |
% |
|
784 |
|
695 |
12.8 |
% |
|
400 |
|
295 |
35.6 |
% |
|
Dollars |
$421,335 |
$420,681 |
0.2 |
% |
$427,513 |
$342,294 |
24.9 |
% |
$173,963 |
$185,274 |
(6.1 |
)% |
|
Avg.
Price |
$469,192 |
$534,539 |
(12.2 |
)% |
$545,297 |
$492,509 |
10.7 |
% |
$434,906 |
$628,047 |
(30.8 |
)% |
Consolidated Segment Total |
|
|
|
|
|
|
|
|
|
|
|
Home |
|
5,196 |
|
6,109 |
(14.9 |
)% |
|
5,602 |
|
6,464 |
(13.3 |
)% |
|
1,983 |
|
2,398 |
(17.3 |
)% |
|
Dollars |
$2,084,097 |
$2,519,648 |
(17.3 |
)% |
$2,340,033 |
$2,600,790 |
(10.0 |
)% |
$808,033 |
$1,069,102 |
(24.4 |
)% |
|
Avg.
Price |
$401,096 |
$412,449 |
(2.8 |
)% |
$417,714 |
$402,350 |
3.8 |
% |
$407,480 |
$445,831 |
(8.6 |
)% |
Unconsolidated Joint Ventures (4) |
|
|
|
|
|
|
|
|
|
|
|
Home |
|
741 |
|
271 |
173.4 |
% |
|
547 |
|
248 |
120.6 |
% |
|
454 |
|
251 |
80.9 |
% |
|
Dollars |
$436,538 |
$154,088 |
183.3 |
% |
$310,573 |
$140,576 |
120.9 |
% |
$283,528 |
$152,430 |
86.0 |
% |
|
Avg.
Price |
$589,120 |
$568,590 |
3.6 |
% |
$567,774 |
$566,836 |
0.2 |
% |
$624,510 |
$607,292 |
2.8 |
% |
Grand Total |
|
|
|
|
|
|
|
|
|
|
|
Home |
|
5,937 |
|
6,380 |
(6.9 |
)% |
|
6,149 |
|
6,712 |
(8.4 |
)% |
|
2,437 |
|
2,649 |
(8.0 |
)% |
|
Dollars |
$2,520,635 |
$2,673,736 |
(5.7 |
)% |
$2,650,606 |
$2,741,366 |
(3.3 |
)% |
$1,091,561 |
$1,221,532 |
(10.6 |
)% |
|
Avg.
Price |
$424,564 |
$419,081 |
1.3 |
% |
$431,063 |
$408,427 |
5.5 |
% |
$447,912 |
$461,130 |
(2.9 |
)% |
|
|
|
|
|
|
|
|
|
|
|
DELIVERIES INCLUDE EXTRAS |
|
|
|
|
|
|
|
|
|
|
Notes: |
|
|
|
|
|
|
|
|
|
|
(1)
Contracts are defined as new contracts signed during the period for
the purchase of homes, less cancellations of prior contracts.(2)
The Midwest net contracts include 65 homes and $27.4 million in
2016 from Minneapolis, MN. Contract backlog as of October 31, 2016
reflects the reduction of 64 homes and $24.1 million, related to
the sale of our land portfolio in Minneapolis, MN.(3) The Southeast
net contracts include 70 homes and $31.6 in 2016 from Raleigh, NC.
Contract backlog as of October 31, 2016 reflects the reduction of
67 homes and $33.7 million, related to the sale of our land
portfolio in Raleigh, NC.(4) Represents home deliveries, home
revenues and average prices for our unconsolidated homebuilding
joint ventures for the period. We provide this data as a
supplement to our consolidated results as an indicator of the
volume managed in our unconsolidated homebuilding joint
ventures. Our proportionate share of the income or loss of
unconsolidated homebuilding and land development joint ventures is
reflected as a separate line item in our consolidated financial
statements under “Income (loss) from unconsolidated joint
ventures”. |
|
|
|
|
|
|
|
|
|
|
|
|
HOVNANIAN ENTERPRISES,
INC. |
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE) |
(SEGMENT DATA UNCONSOLIDATED JOINT VENTURES) |
(UNAUDITED) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months - October 31, 2017 |
|
|
|
|
|
Contracts (1) |
Deliveries |
Contract |
|
|
Three Months Ended |
Three Months Ended |
Backlog |
|
|
Oct 31, |
Oct 31, |
Oct 31, |
|
|
|
2017 |
|
2016 |
% Change |
|
2017 |
|
2016 |
% Change |
|
2017 |
|
2016 |
% Change |
Northeast |
|
|
|
|
|
|
|
|
|
|
(unconsolidated joint ventures) |
Home |
|
105 |
|
10 |
950.0 |
% |
|
41 |
|
7 |
485.7 |
% |
|
217 |
|
27 |
703.7 |
% |
(NJ, PA) |
Dollars |
$70,821 |
$3,994 |
1,673.2 |
% |
$19,498 |
$2,323 |
739.3 |
% |
$156,679 |
$10,263 |
1,426.6 |
% |
|
Avg.
Price |
$674,490 |
$399,400 |
68.9 |
% |
$475,561 |
$331,857 |
43.3 |
% |
$722,027 |
$380,111 |
90.0 |
% |
Mid-Atlantic |
|
|
|
|
|
|
|
|
|
|
(unconsolidated joint ventures) |
Home |
|
12 |
|
12 |
0.0 |
% |
|
20 |
|
16 |
25.0 |
% |
|
30 |
|
40 |
(25.0 |
)% |
(DE, MD, VA, WV) |
Dollars |
$8,282 |
$8,819 |
(6.1 |
)% |
$13,699 |
$8,230 |
66.5 |
% |
$19,721 |
$30,089 |
(34.5 |
)% |
|
Avg.
Price |
$690,167 |
$734,917 |
(6.1 |
)% |
$684,950 |
$514,375 |
33.2 |
% |
$657,365 |
$752,225 |
(12.6 |
)% |
Midwest |
|
|
|
|
|
|
|
|
|
|
(unconsolidated joint ventures) |
Home |
|
9 |
|
1 |
800.0 |
% |
|
17 |
|
3 |
466.7 |
% |
|
27 |
|
12 |
125.0 |
% |
(IL, MN, OH) |
Dollars |
$5,561 |
$404 |
1,276.5 |
% |
$12,286 |
$2,042 |
501.7 |
% |
$18,718 |
$9,589 |
95.2 |
% |
|
Avg.
Price |
$617,889 |
$404,000 |
52.9 |
% |
$722,706 |
$680,667 |
6.2 |
% |
$693,259 |
$799,083 |
(13.2 |
)% |
Southeast |
|
|
|
|
|
|
|
|
|
|
(unconsolidated joint ventures) |
Home |
|
25 |
|
32 |
(21.9 |
)% |
|
49 |
|
2 |
2,350.0 |
% |
|
78 |
|
88 |
(11.4 |
)% |
(FL, GA, NC, SC) |
Dollars |
$9,356 |
$14,383 |
(35.0 |
)% |
$22,243 |
$657 |
3,285.5 |
% |
$36,811 |
$43,722 |
(15.8 |
)% |
|
Avg.
Price |
$374,240 |
$449,469 |
(16.7 |
)% |
$453,937 |
$328,500 |
38.2 |
% |
$471,936 |
$496,841 |
(5.0 |
)% |
Southwest |
|
|
|
|
|
|
|
|
|
|
(unconsolidated joint ventures) |
Home |
|
50 |
|
7 |
614.3 |
% |
|
20 |
|
0 |
0.0 |
% |
|
57 |
|
7 |
714.3 |
% |
(AZ, TX) |
Dollars |
$29,267 |
$4,477 |
553.7 |
% |
$13,835 |
$0 |
0.0 |
% |
$33,252 |
$4,477 |
642.7 |
% |
|
Avg.
Price |
$585,340 |
$639,571 |
(8.5 |
)% |
$691,750 |
$0 |
0.0 |
% |
$583,368 |
$639,571 |
(8.8 |
)% |
West |
|
|
|
|
|
|
|
|
|
|
(unconsolidated joint ventures) |
Home |
|
31 |
|
28 |
10.7 |
% |
|
36 |
|
74 |
(51.4 |
)% |
|
45 |
|
77 |
(41.6 |
)% |
(CA) |
Dollars |
$13,597 |
$16,317 |
(16.7 |
)% |
$16,029 |
$50,847 |
(68.5 |
)% |
$18,347 |
$54,290 |
(66.2 |
)% |
|
Avg.
Price |
$438,613 |
$582,750 |
(24.7 |
)% |
$445,252 |
$687,117 |
(35.2 |
)% |
$407,711 |
$705,067 |
(42.2 |
)% |
Unconsolidated Joint Ventures (2) |
|
|
|
|
|
|
|
|
|
|
|
Home |
|
232 |
|
90 |
157.8 |
% |
|
183 |
|
102 |
79.4 |
% |
|
454 |
|
251 |
80.9 |
% |
|
Dollars |
$136,884 |
$48,394 |
182.9 |
% |
$97,590 |
$64,099 |
52.2 |
% |
$283,528 |
$152,430 |
86.0 |
% |
|
Avg.
Price |
$590,017 |
$537,711 |
9.7 |
% |
$533,275 |
$628,417 |
(15.1 |
)% |
$624,510 |
$607,292 |
2.8 |
% |
|
|
|
|
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DELIVERIES INCLUDE EXTRAS |
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Notes: |
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(1)
Contracts are defined as new contracts signed during the period for
the purchase of homes, less cancellations of prior contracts.(2)
Represents home deliveries, home revenues and average prices for
our unconsolidated homebuilding joint ventures for the
period. We provide this data as a supplement to our
consolidated results as an indicator of the volume managed in our
unconsolidated homebuilding joint ventures. Our proportionate
share of the income or loss of unconsolidated homebuilding and land
development joint ventures is reflected as a separate line item in
our consolidated financial statements under “Income (loss) from
unconsolidated joint ventures”. |
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HOVNANIAN ENTERPRISES,
INC. |
(DOLLARS IN THOUSANDS EXCEPT AVG.
PRICE) |
(SEGMENT DATA UNCONSOLIDATED JOINT
VENTURES) |
(UNAUDITED) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months - October 31, 2017 |
|
|
|
|
|
Contracts (1) |
Deliveries |
Contract |
|
|
Twelve Months Ended |
Twelve Months Ended |
Backlog |
|
|
Oct 31, |
Oct 31, |
Oct 31, |
|
|
|
2017 |
|
2016 |
|
% Change |
|
2017 |
|
2016 |
% Change |
|
2017 |
|
2016 |
% Change |
Northeast |
|
|
|
|
|
|
|
|
|
|
(unconsolidated joint ventures) |
Home |
|
262 |
|
4 |
|
6,450.0 |
% |
|
72 |
|
25 |
188.0 |
% |
|
217 |
|
27 |
703.7 |
% |
(NJ, PA) |
Dollars |
$177,791 |
$(3,585 |
) |
(5,059.3 |
)% |
$31,374 |
$7,625 |
311.5 |
% |
$156,679 |
$10,263 |
1,426.6 |
% |
|
Avg.
Price |
$678,592 |
$(896,250 |
) |
(175.7 |
)% |
$435,748 |
$305,000 |
42.9 |
% |
$722,027 |
$380,111 |
90.0 |
% |
Mid-Atlantic |
|
|
|
|
|
|
|
|
|
|
(unconsolidated joint ventures) |
Home |
|
55 |
|
61 |
|
(9.8 |
)% |
|
65 |
|
47 |
38.3 |
% |
|
30 |
|
40 |
(25.0 |
)% |
(DE, MD, VA, WV) |
Dollars |
$30,866 |
$46,811 |
|
(34.1 |
)% |
$41,233 |
$24,530 |
68.1 |
% |
$19,721 |
$30,089 |
(34.5 |
)% |
|
Avg.
Price |
$561,200 |
$767,393 |
|
(26.9 |
)% |
$634,354 |
$521,889 |
21.5 |
% |
$657,365 |
$752,225 |
(12.6 |
)% |
Midwest |
|
|
|
|
|
|
|
|
|
|
(unconsolidated joint ventures) |
Home |
|
49 |
|
6 |
|
716.7 |
% |
|
34 |
|
3 |
1,033.3 |
% |
|
27 |
|
12 |
125.0 |
% |
(IL, MN, OH) |
Dollars |
$34,833 |
$4,795 |
|
626.4 |
% |
$25,704 |
$2,042 |
1,158.8 |
% |
$18,718 |
$9,589 |
95.2 |
% |
|
Avg.
Price |
$710,882 |
$799,167 |
|
(11.0 |
)% |
$756,004 |
$680,667 |
11.1 |
% |
$693,259 |
$799,083 |
(13.2 |
)% |
Southeast |
|
|
|
|
|
|
|
|
|
|
(unconsolidated joint ventures) |
Home |
|
139 |
|
82 |
|
69.5 |
% |
|
149 |
|
3 |
4,866.7 |
% |
|
78 |
|
88 |
(11.4 |
)% |
(FL, GA, NC, SC) |
Dollars |
$60,451 |
$39,841 |
|
51.7 |
% |
$67,364 |
$1,042 |
6,364.9 |
% |
$36,811 |
$43,722 |
(15.8 |
)% |
|
Avg.
Price |
$434,903 |
$485,868 |
|
(10.5 |
)% |
$452,106 |
$347,355 |
30.2 |
% |
$471,936 |
$496,841 |
(5.0 |
)% |
Southwest |
|
|
|
|
|
|
|
|
|
|
(unconsolidated joint ventures) |
Home |
|
82 |
|
7 |
|
1,071.4 |
% |
|
32 |
|
0 |
0.0 |
% |
|
57 |
|
7 |
714.3 |
% |
(AZ, TX) |
Dollars |
$50,888 |
$4,477 |
|
1,036.7 |
% |
$22,113 |
$0 |
0.0 |
% |
$33,252 |
$4,477 |
642.7 |
% |
|
Avg.
Price |
$620,585 |
$639,571 |
|
(3.0 |
)% |
$691,030 |
$0 |
0.0 |
% |
$583,368 |
$639,571 |
(8.8 |
)% |
West |
|
|
|
|
|
|
|
|
|
|
(unconsolidated joint ventures) |
Home |
|
154 |
|
111 |
|
38.7 |
% |
|
195 |
|
170 |
14.7 |
% |
|
45 |
|
77 |
(41.6 |
)% |
(CA) |
Dollars |
$81,709 |
$61,749 |
|
32.3 |
% |
$122,785 |
$105,337 |
16.6 |
% |
$18,347 |
$54,290 |
(66.2 |
)% |
|
Avg.
Price |
$530,578 |
$556,299 |
|
(4.6 |
)% |
$629,669 |
$619,631 |
1.6 |
% |
$407,711 |
$705,067 |
(42.2 |
)% |
Unconsolidated Joint Ventures (2) |
|
|
|
|
|
|
|
|
|
|
|
Home |
|
741 |
|
271 |
|
173.4 |
% |
|
547 |
|
248 |
120.6 |
% |
|
454 |
|
251 |
80.9 |
% |
|
Dollars |
$436,538 |
$154,088 |
|
183.3 |
% |
$310,573 |
$140,576 |
120.9 |
% |
$283,528 |
$152,430 |
86.0 |
% |
|
Avg.
Price |
$589,120 |
$568,590 |
|
3.6 |
% |
$567,774 |
$566,836 |
0.2 |
% |
$624,510 |
$607,292 |
2.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
DELIVERIES INCLUDE EXTRAS |
|
|
|
|
|
|
|
|
|
|
Notes: |
|
|
|
|
|
|
|
|
|
|
(1)
Contracts are defined as new contracts signed during the period for
the purchase of homes, less cancellations of prior contracts.(2)
Represents home deliveries, home revenues and average prices for
our unconsolidated homebuilding joint ventures for the
period. We provide this data as a supplement to our
consolidated results as an indicator of the volume managed in our
unconsolidated homebuilding joint ventures. Our proportionate
share of the income or loss of unconsolidated homebuilding and land
development joint ventures is reflected as a separate line item in
our consolidated financial statements under “Income (loss) from
unconsolidated joint ventures”. |
|
Contact:J. Larry SorsbyExecutive Vice President & CFO732-747-7800Jeffrey T. O’KeefeVice President, Investor Relations732-747-7800
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