Operating Results Consistent with
GuidanceContracts per Community Increased 11.9%
Offsetting the Impact of Community Count Decline
Hovnanian Enterprises, Inc. (NYSE:HOV), a leading national
homebuilder, reported results for its fiscal third quarter and nine
months ended July 31, 2017.
“We continued to see strength in the underlying
housing market and the 11.9% increase in our contracts per
community during the third quarter of 2017 compared to last year’s
third quarter reflected this trend,” stated Ara K. Hovnanian,
Chairman of the Board, President and Chief Executive Officer.
“While deliveries and revenues were lower than last year as a
result of a decreased community count, the strong sales and our
backlog as of July 31, 2017 should lead to a profitable fourth
quarter.”
“Near the end of the third quarter, we
successfully refinanced and extended the maturities of our secured
debt that was scheduled to come due in the fall of 2018 and 2020
with $440 million of secured debt with maturities in July 2022 and
$400 million of secured debt with maturities in July 2024. The
refinancing, which has tremendous long term benefits, resulted in a
$42 million loss on early extinguishment of debt. When added to
prior period results, this created a three-year cumulative loss,
which led to a $294 million non-cash increase in the valuation
allowance for our deferred tax assets. Our third quarter operating
results were consistent with our prior guidance.”
“Fortunately, less than ten homes within two of
our 45 Houston communities experienced flood damage from Hurricane
Harvey. The storm damage and construction delays caused by the
storm will reduce our fourth quarter deliveries. In spite of
the temporary impact from Hurricane Harvey, the long-term
prospects for the Houston market remain strong.”
“As we move forward with the benefit of longer
term financing, we remain focused on reloading our land position
and returning to consistent profitability. While this has been a
long and arduous recovery, we are confident that we can
successfully deploy our strategies and remain on track for long
term success in the future,” concluded Mr. Hovnanian.
RESULTS FOR THE THREE-MONTH AND
NINE-MONTH PERIODS ENDED JULY 31, 2017:
- Primarily as a result of a 19.0% decline in community count and
a conversion of 17 communities to joint ventures since the third
quarter of fiscal 2016, total revenues decreased 17.4% to $592.0
million in the third quarter of fiscal 2017, compared with $716.9
million in the third quarter of fiscal 2016. For the nine months
ended July 31, 2017, total revenues decreased 11.2% to $1.73
billion compared with $1.95 billion in the first nine months of the
prior year.
- Homebuilding revenues for unconsolidated joint ventures
increased 101.0% to $62.6 million in the third quarter of fiscal
2017, compared with $31.1 million in the third quarter of fiscal
2016. For the nine months ended July 31, 2017, homebuilding
revenues for unconsolidated joint ventures increased 177.4% to
$214.1 million compared with $77.2 million in the first nine months
of the prior year.
- For the third quarter of 2017, total SG&A decreased by $5.4
million, or 8.0%, year over year. Total SG&A was $61.2 million,
or 10.3% of total revenues, for the third quarter ended July 31,
2017 compared with $66.6 million, or 9.3% of total revenues, in
last year’s third quarter. For the first nine months of 2017, total
SG&A decreased by $16.5 million, or 8.3%, year over year. Total
SG&A decreased to $182.8 million, or 10.6% of total revenues,
for the first nine months of fiscal 2017 compared with $199.4
million, or 10.2% of total revenues, in the first nine months of
the prior fiscal year.
- Interest incurred (some of which was expensed and some of which
was capitalized) decreased by 3.0% to $39.1 million for the third
quarter of fiscal 2017 compared with $40.3 million in the same
quarter one year ago. For the nine months ended July 31, 2017,
interest incurred decreased 7.5% to $116.9 million compared with
$126.5 million during the same nine-month period last
year.
- Total interest expense decreased 16.7% to $42.9 million in the
third quarter of fiscal 2017 compared with $51.6 million in the
third quarter of fiscal 2016. Total interest expense decreased 6.4%
to $126.5 million for the first nine months of fiscal 2017 compared
with $135.2 million in the first nine months of fiscal
2016.
- Homebuilding gross margin percentage, after interest expense
and land charges included in cost of sales, was 12.8% for the third
quarter of fiscal 2017 compared with 13.1% in the prior year’s
third quarter. During the first nine months of fiscal 2017, this
homebuilding gross margin percentage was 12.9% compared with 11.9%
in the same period of the previous year.
- Homebuilding gross margin percentage, before interest expense
and land charges included in cost of sales, was 16.8% for the third
quarter of fiscal 2017 compared with 16.9% in the prior year’s
third quarter. During the first nine months of fiscal 2017, this
homebuilding gross margin percentage was 16.8% compared with 16.5%
in the same period one year ago.
- Loss before income taxes for the quarter ended July 31, 2017
was $50.2 million, which included a $42.3 million loss on
extinguishment of debt, compared to income before income taxes of
$1.1 million during the third quarter of 2016. For the first nine
months of fiscal 2017, the loss before income taxes was $57.5
million, which included a $34.9 million loss on extinguishment of
debt, compared to a loss before income taxes of $29.7 million
during the first nine months of fiscal 2016.
- Loss before income taxes, excluding land-related charges and
loss on extinguishment of debt, for the quarter ended July 31, 2017
was $3.7 million compared to a profit of $2.7 million during the
third quarter of 2016. For the first nine months of fiscal 2017,
the loss before income taxes, excluding land-related charges and
loss on extinguishment of debt, was $13.4 million compared to a
loss of $6.8 million during the first nine months of fiscal
2016.
- The loss on extinguishment of debt of $42.3 million during the
third quarter ended July 31, 2017 created a three-year cumulative
loss, which resulted in a $294.0 million non-cash increase in the
valuation allowance for our deferred tax assets.
- Total income taxes for the third quarter and nine months ended
July 31, 2017 were $287.0 million and $286.5 million, respectively,
primarily as a result of the $294.0 million non-cash increase in
the valuation allowance for our deferred tax assets.
- Net loss was $337.2 million, or $2.28 per common share, in the
third quarter of fiscal 2017, including the $294.0 million increase
in the valuation allowance for our deferred tax assets, compared
with a net loss of $0.5 million, or $0.00 per common share, during
the same quarter a year ago. For the nine months ended July 31,
2017, the net loss was $344.0 million, or $2.33 per common share,
including the $294.0 million increase in the valuation allowance
for our deferred tax assets, compared with a net loss of $25.1
million, or $0.17 per common share, in the first nine months of
fiscal 2016.
- Consolidated contracts per community increased 11.9% to 9.4
contracts per community for the third quarter of fiscal 2017
compared with 8.4 contracts per community in the third quarter of
fiscal 2016. Contracts per community, including unconsolidated
joint ventures, increased 15.0% to 9.2 contracts per community for
the quarter ended July 31, 2017 compared with 8.0 contracts,
including unconsolidated joint ventures, per community in last
year’s third quarter.
- For August 2017, consolidated contracts per community increased
to 3.0 contracts per community compared to 2.5 contracts per
community for the same month one year ago. During August 2017 and
August 2016, the number of consolidated contracts was 423 homes and
the dollar value of contracts decreased 5.7% to $160.3 million in
August 2017 compared with $170.0 million for August
2016.
- For August 2017, contracts per community, including
unconsolidated joint ventures, increased to 3.0 contracts per
community compared to 2.3 contracts per community for the same
month one year ago. During August 2017, the number of contracts,
including unconsolidated joint ventures, increased 10.8% to 492
homes from 444 homes in August 2016 and the dollar value of
contracts, including unconsolidated joint ventures, increased 12.6%
to $203.5 million in August 2017 compared with $180.8 million for
August 2016.
- As of the end of the third quarter of fiscal 2017, community
count, including unconsolidated joint ventures, decreased 13.5% to
167 communities compared with 193 communities at July 31, 2016.
Consolidated community count decreased 19.0% to 141 communities as
of July 31, 2017 from 174 communities at the end of the prior
year’s third quarter.
- For the third quarter ended July 31, 2017, the number of
contracts, including unconsolidated joint ventures, decreased 0.3%
to 1,533 homes from 1,537 homes for the same quarter last year. The
number of consolidated contracts, during the third quarter of
fiscal 2017, decreased 10.0% to 1,321 homes compared with 1,467
homes during the third quarter of 2016.
- During the first nine months of fiscal 2017, the number of
contracts, including unconsolidated joint ventures, was 4,593
homes, a decrease of 8.0% from 4,991 homes during the first nine
months of fiscal 2016. The number of consolidated contracts, during
the nine-month period ended July 31, 2017, decreased 15.1% to 4,084
homes compared with 4,810 homes in the same period of the previous
year.
- The dollar value of contract backlog, including unconsolidated
joint ventures, as of July 31, 2017, was $1.29 billion, a decrease
of 12.9% compared with $1.48 billion as of July 31, 2016. The
dollar value of consolidated contract backlog, as of July 31, 2017,
decreased 20.4% to $1.04 billion compared with $1.31 billion as of
July 31, 2016.
- For the quarter ended July 31, 2017, deliveries, including
unconsolidated joint ventures, decreased 9.8% to 1,467 homes
compared with 1,627 homes during the third quarter of fiscal 2016.
Consolidated deliveries were 1,350 homes for the third quarter of
fiscal 2017, a 14.2% decrease compared with 1,574 homes during the
same quarter a year ago.
- For the nine months ended July 31, 2017, deliveries, including
unconsolidated joint ventures, decreased 8.0% to 4,362, homes
compared with 4,740 homes in the first nine months of the prior
year. Consolidated deliveries were 3,998 homes in the first nine
months of fiscal 2017, a 13.0% decrease compared with 4,594 homes
in the same period in fiscal 2016.
- The consolidated contract cancellation rate for the three
months ended July 31, 2017 decreased to 19%, compared with 21% in
the third quarter of the prior year. The contract cancellation
rate, including unconsolidated joint ventures, was 20% in the third
quarter of fiscal 2017 compared with 22% in the third quarter of
fiscal 2016.
- The valuation allowance was $922.0 million as of July 31, 2017,
after a non-cash increase of $294.0 million during the third
quarter of fiscal 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 JULY
31, 2017:
- Total liquidity at the end of the third quarter of fiscal 2017
was $288.2 million.
- During the third quarter of fiscal 2017, land and land
development spending was $149.8 million compared with $132.3
million in last year’s third quarter and up from the 2017 second
quarter’s spend of $99.7 million. For the nine months ended July
31, 2017, land and land development spending was $439.9 million
compared with $435.6 million for the same period one year
ago.
- The total land position, including unconsolidated joint
ventures, was 31,143 lots, consisting of 14,467 lots under option
and 16,676 owned lots, as of July 31, 2017, compared with a total
of 32,125 lots as of July 31, 2016.
- In the third quarter of fiscal 2017, approximately 2,700 lots
were put under option or acquired in 34 communities, including
unconsolidated joint ventures.
WEBCAST INFORMATION:
Hovnanian Enterprises will webcast its fiscal
2017 third quarter financial results conference call at 11:00 a.m.
E.T. on Thursday, September 7, 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 loss. The reconciliation for
historical periods of EBIT, EBITDA and Adjusted EBITDA to net 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.
(Loss) Income Before Income Taxes
Excluding Land-Related Charges and Loss on Extinguishment of
Debt is a non-GAAP financial measure. The most
directly comparable GAAP financial measure is (Loss) Income Before
Income Taxes. The reconciliation for historical periods of (Loss)
Income Before Income Taxes Excluding Land-Related Charges and Loss
on Extinguishment of Debt to (Loss)
Income Before Income Taxes is presented in a table
attached to this earnings release.
Total liquidity is comprised of $278.5
million of cash and cash equivalents, $1.7 million of restricted
cash required to collateralize letters of credit and $8.0 million
of availability under the unsecured revolving credit facility as of
July 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)
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|
|
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Hovnanian Enterprises, Inc. |
|
|
|
|
|
|
|
July 31, 2017 |
|
|
|
|
|
|
|
Statements
of Consolidated Operations |
|
|
|
|
|
|
|
(Dollars in
Thousands, Except Per Share Data) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
|
July 31, |
|
July 31, |
|
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
Total
Revenues |
$ |
592,035 |
|
|
$ |
716,850 |
|
|
$ |
1,729,979 |
|
|
$ |
1,947,178 |
|
Costs and
Expenses (a) |
|
596,069 |
|
|
|
713,356 |
|
|
|
1,742,565 |
|
|
|
1,971,656 |
|
Loss on
Extinguishment of Debt |
|
(42,258 |
) |
|
|
- |
|
|
|
(34,854 |
) |
|
|
- |
|
Loss from
Unconsolidated Joint Ventures |
|
(3,881 |
) |
|
|
(2,401 |
) |
|
|
(10,109 |
) |
|
|
(5,227 |
) |
(Loss)
Income Before Income Taxes |
|
(50,173 |
) |
|
|
1,093 |
|
|
|
(57,549 |
) |
|
|
(29,705 |
) |
Income Tax
Provision (Benefit) |
|
287,036 |
|
|
|
1,567 |
|
|
|
286,485 |
|
|
|
(4,597 |
) |
Net
Loss |
$ |
(337,209 |
) |
|
$ |
(474 |
) |
|
$ |
(344,034 |
) |
|
$ |
(25,108 |
) |
|
|
|
|
|
|
|
|
|
|
|
Per Share
Data: |
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
|
|
Loss Per
Common Share |
$ |
(2.28 |
) |
|
$ |
(0.00 |
) |
|
$ |
(2.33 |
) |
|
$ |
(0.17 |
) |
|
Weighted
Average Number of |
|
|
|
|
|
|
|
|
|
Common
Shares Outstanding (b) |
|
147,748 |
|
|
|
147,412 |
|
|
|
147,628 |
|
|
|
147,383 |
|
Assuming
Dilution: |
|
|
|
|
|
|
|
|
Loss Per
Common Share |
$ |
(2.28 |
) |
|
$ |
(0.00 |
) |
|
$ |
(2.33 |
) |
|
$ |
(0.17 |
) |
|
Weighted
Average Number of |
|
|
|
|
|
|
|
|
|
Common
Shares Outstanding (b) |
|
147,748 |
|
|
|
147,412 |
|
|
|
147,628 |
|
|
|
147,383 |
|
|
|
|
|
|
|
|
|
|
|
|
(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. |
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|
|
Hovnanian Enterprises, Inc. |
|
|
|
|
|
|
|
July 31, 2017 |
|
|
|
|
|
|
|
Reconciliation of (Loss) Income Before Income Taxes Excluding
Land-Related Charges and Loss on Extinguishment of Debt to (Loss)
Income Before Income Taxes |
(Dollars in Thousands) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
|
July 31, |
|
July 31, |
|
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
(Loss)
Income Before Income Taxes |
$ |
(50,173 |
) |
|
$ |
1,093 |
|
|
$ |
(57,549 |
) |
|
$ |
(29,705 |
) |
Inventory
Impairment Loss and Land Option Write-Offs |
|
4,197 |
|
|
|
1,565 |
|
|
|
9,334 |
|
|
|
22,915 |
|
Loss on
Extinguishment of Debt |
|
42,258 |
|
|
|
- |
|
|
|
34,854 |
|
|
|
- |
|
(Loss)
Income Before Income Taxes Excluding Land-Related |
|
|
|
|
|
|
|
Charges and Loss on Extinguishment of Debt (a) |
$ |
(3,718 |
) |
|
$ |
2,658 |
|
|
$ |
(13,361 |
) |
|
$ |
(6,790 |
) |
|
|
|
|
|
|
|
|
|
|
|
(a) (Loss) Income Before Income Taxes Excluding Land-Related
Charges and Loss on Extinguishment of Debt is a non-GAAP financial
measure. The most directly comparable GAAP financial measure is
(Loss) Income Before Income Taxes. |
|
|
|
|
|
|
|
|
Hovnanian
Enterprises, Inc. |
|
|
|
|
|
|
|
July 31,
2017 |
|
|
|
|
|
|
|
Gross Margin |
|
|
|
|
|
|
|
(Dollars in
Thousands) |
|
|
|
|
|
|
|
|
Homebuilding Gross Margin |
|
Homebuilding Gross Margin |
|
Three Months Ended |
|
Nine Months Ended |
|
July 31, |
|
July 31, |
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
(Unaudited) |
|
(Unaudited) |
Sale of Homes |
$ |
574,282 |
|
|
$ |
640,386 |
|
|
$ |
1,673,250 |
|
|
$ |
1,823,318 |
|
Cost of Sales,
Excluding Interest Expense (a) |
|
478,069 |
|
|
|
532,116 |
|
|
|
1,391,966 |
|
|
|
1,521,704 |
|
Homebuilding Gross
Margin, Before Cost of Sales Interest Expense |
|
|
|
|
|
|
|
and Land
Charges (b) |
|
96,213 |
|
|
|
108,270 |
|
|
|
281,284 |
|
|
|
301,614 |
|
Cost of Sales Interest
Expense, Excluding Land Sales |
|
|
|
|
|
|
|
Interest
Expense |
|
18,397 |
|
|
|
23,108 |
|
|
|
55,284 |
|
|
|
61,291 |
|
Homebuilding Gross
Margin, After Cost of Sales Interest Expense, |
|
|
|
|
|
|
|
Before
Land Charges (b) |
|
77,816 |
|
|
|
85,162 |
|
|
|
226,000 |
|
|
|
240,323 |
|
Land Charges |
|
4,197 |
|
|
|
1,565 |
|
|
|
9,334 |
|
|
|
22,915 |
|
Homebuilding Gross
Margin |
$ |
73,619 |
|
|
$ |
83,597 |
|
|
$ |
216,666 |
|
|
$ |
217,408 |
|
|
|
|
|
|
|
|
|
Gross Margin
Percentage |
|
12.8 |
% |
|
|
13.1 |
% |
|
|
12.9 |
% |
|
|
11.9 |
% |
Gross Margin
Percentage, Before Cost of Sales Interest Expense |
|
|
|
|
|
|
|
and Land
Charges (b) |
|
16.8 |
% |
|
|
16.9 |
% |
|
|
16.8 |
% |
|
|
16.5 |
% |
Gross Margin
Percentage, After Cost of Sales Interest Expense, |
|
|
|
|
|
|
|
Before
Land Charges (b) |
|
13.6 |
% |
|
|
13.3 |
% |
|
|
13.5 |
% |
|
|
13.2 |
% |
|
|
|
|
|
|
|
|
|
Land Sales Gross Margin |
|
Land Sales Gross Margin |
|
Three Months Ended |
|
Nine Months Ended |
|
July 31, |
|
July 31, |
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
(Unaudited) |
|
(Unaudited) |
Land and Lot Sales |
$ |
1,785 |
|
|
$ |
58,897 |
|
|
$ |
11,497 |
|
|
$ |
70,051 |
|
Cost of Sales,
Excluding Interest and Land Charges (a) |
|
817 |
|
|
|
51,667 |
|
|
|
7,387 |
|
|
|
62,275 |
|
Land and Lot Sales
Gross Margin, Excluding Interest and |
|
|
|
|
|
|
|
Land
Charges |
|
968 |
|
|
|
7,230 |
|
|
|
4,110 |
|
|
|
7,776 |
|
Land and Lot Sales
Interest |
|
974 |
|
|
|
5,298 |
|
|
|
2,746 |
|
|
|
5,402 |
|
Land and Lot Sales
Gross Margin, Including Interest and |
|
|
|
|
|
|
|
Excluding
Land Charges |
$ |
(6 |
) |
|
$ |
1,932 |
|
|
$ |
1,364 |
|
|
$ |
2,374 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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. |
(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. |
|
|
|
|
|
|
|
July 31,
2017 |
|
|
|
|
|
|
|
Reconciliation of
Adjusted EBITDA to Net Loss |
|
|
|
|
|
|
|
(Dollars in
Thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
July 31, |
|
July 31, |
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
(Unaudited) |
|
(Unaudited) |
Net Loss |
$ |
(337,209 |
) |
|
$ |
(474 |
) |
|
$ |
(344,034 |
) |
|
$ |
(25,108 |
) |
Income Tax Provision
(Benefit) |
|
287,036 |
|
|
|
1,567 |
|
|
|
286,485 |
|
|
|
(4,597 |
) |
Interest Expense |
|
42,930 |
|
|
|
51,565 |
|
|
|
126,513 |
|
|
|
135,161 |
|
EBIT (a) |
|
(7,243 |
) |
|
|
52,658 |
|
|
|
68,964 |
|
|
|
105,456 |
|
Depreciation |
|
1,129 |
|
|
|
879 |
|
|
|
3,212 |
|
|
|
2,608 |
|
Amortization of Debt
Costs |
|
- |
|
|
|
1,205 |
|
|
|
1,632 |
|
|
|
3,815 |
|
EBITDA (b) |
|
(6,114 |
) |
|
|
54,742 |
|
|
|
73,808 |
|
|
|
111,879 |
|
Inventory Impairment
Loss and Land Option Write-offs |
|
4,197 |
|
|
|
1,565 |
|
|
|
9,334 |
|
|
|
22,915 |
|
Loss on extinguishment
of Debt |
|
42,258 |
|
|
|
- |
|
|
|
34,854 |
|
|
|
- |
|
Adjusted EBITDA
(c) |
$ |
40,341 |
|
|
$ |
56,307 |
|
|
$ |
117,996 |
|
|
$ |
134,794 |
|
|
|
|
|
|
|
|
|
Interest Incurred |
$ |
39,089 |
|
|
$ |
40,300 |
|
|
$ |
116,944 |
|
|
$ |
126,483 |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA to
Interest Incurred |
|
1.03 |
|
|
|
1.40 |
|
|
|
1.01 |
|
|
|
1.07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
EBIT is a non-GAAP financial measure. The most directly comparable
GAAP financial measure is net 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 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 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. |
|
|
|
|
|
|
|
July 31,
2017 |
|
|
|
|
|
|
|
Interest Incurred,
Expensed and Capitalized |
|
|
|
|
|
|
|
(Dollars in
Thousands) |
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
July 31, |
|
July 31, |
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
(Unaudited) |
|
(Unaudited) |
Interest Capitalized at
Beginning of Period |
$ |
90,960 |
|
|
$ |
115,809 |
|
|
$ |
96,688 |
|
|
$ |
123,898 |
|
Plus Interest
Incurred |
|
39,089 |
|
|
|
40,300 |
|
|
|
116,944 |
|
|
|
126,483 |
|
Less Interest Expensed
(a) |
|
42,930 |
|
|
|
51,565 |
|
|
|
126,513 |
|
|
|
135,161 |
|
Less Interest
Contributed to Unconsolidated Joint Venture (a) |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
10,676 |
|
Interest Capitalized at
End of Period (b) |
$ |
87,119 |
|
|
$ |
104,544 |
|
|
$ |
87,119 |
|
|
$ |
104,544 |
|
|
|
|
|
|
|
|
|
(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 Condensed 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 SUBSIDIARIESCONDENSED
CONSOLIDATED BALANCE SHEETS(In Thousands) |
|
|
|
|
|
|
|
|
|
|
July 31,2017 |
|
October 31,2016 |
|
|
|
(Unaudited) |
|
(1) |
|
ASSETS |
|
|
|
|
|
|
|
|
Homebuilding: |
|
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
278,486 |
|
|
$ |
339,773 |
|
Restricted cash and cash equivalents |
|
|
1,955 |
|
|
|
3,914 |
|
Inventories: |
|
|
|
|
|
|
|
|
Sold and
unsold homes and lots under development |
|
|
867,703 |
|
|
|
899,082 |
|
Land and
land options held for future development or sale |
|
|
182,617 |
|
|
|
175,301 |
|
Consolidated inventory not owned |
|
|
138,529 |
|
|
|
208,701 |
|
Total
inventories |
|
|
1,188,849 |
|
|
|
1,283,084 |
|
Investments in and advances to unconsolidated joint ventures |
|
|
108,560 |
|
|
|
100,502 |
|
Receivables, deposits and notes, net |
|
|
38,847 |
|
|
|
49,726 |
|
Property,
plant and equipment, net |
|
|
52,436 |
|
|
|
50,332 |
|
Prepaid
expenses and other assets |
|
|
43,464 |
|
|
|
46,762 |
|
Total
homebuilding |
|
|
1,712,597 |
|
|
|
1,874,093 |
|
|
|
|
|
|
|
|
|
|
Financial services cash
and cash equivalents |
|
|
7,246 |
|
|
|
6,992 |
|
Financial services
other assets |
|
|
102,476 |
|
|
|
190,238 |
|
|
|
|
|
|
|
|
|
|
Income taxes receivable
- including net deferred tax benefits |
|
|
- |
|
|
|
283,633 |
|
Total assets |
|
$ |
1,822,319 |
|
|
$ |
2,354,956 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY |
|
|
|
|
|
|
|
|
Homebuilding: |
|
|
|
|
|
|
|
|
Nonrecourse mortgages secured by inventory, net of debt issuance
costs |
|
$ |
70,818 |
|
|
$ |
82,115 |
|
Accounts
payable and other liabilities |
|
|
331,048 |
|
|
|
369,228 |
|
Customers’ deposits |
|
|
37,853 |
|
|
|
37,429 |
|
Nonrecourse mortgages secured by operating properties |
|
|
13,347 |
|
|
|
14,312 |
|
Liabilities from inventory not owned, net of debt issuance
costs |
|
|
98,507 |
|
|
|
150,179 |
|
Revolving
credit facility |
|
|
52,000 |
|
|
|
52,000 |
|
Notes
payable and term loan, net of discount and debt issuance costs |
|
|
1,598,543 |
|
|
|
1,605,758 |
|
Total
homebuilding |
|
|
2,202,116 |
|
|
|
2,311,021 |
|
|
|
|
|
|
|
|
|
|
Financial services |
|
|
89,569 |
|
|
|
172,445 |
|
|
|
|
|
|
|
|
|
|
Income taxes
payable |
|
|
1,796 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
2,293,481 |
|
|
|
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 July 31, 2017 and at October 31, 2016 |
|
|
135,299 |
|
|
|
135,299 |
|
Common
stock, Class A, $0.01 par value - authorized 400,000,000 shares;
issued 144,046,073 shares at July 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
July 31, 2017 and 15,942,809 shares at October 31, 2016 |
|
|
160 |
|
|
|
159 |
|
Paid in
capital - common stock |
|
|
707,516 |
|
|
|
706,137 |
|
Accumulated deficit |
|
|
(1,200,217 |
) |
|
|
(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 July 31, 2017 and October
31, 2016 |
|
|
(115,360 |
) |
|
|
(115,360 |
) |
Total
stockholders’ equity deficit |
|
|
(471,162 |
) |
|
|
(128,510 |
) |
Total liabilities and
equity |
|
$ |
1,822,319 |
|
|
$ |
2,354,956 |
|
|
(1) Derived
from the audited balance sheet as of October 31, 2016. |
|
|
HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIESCONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS(In Thousands Except Per Share
Data)(Unaudited) |
|
|
|
Three Months Ended July 31, |
|
|
Nine Months Ended July 31, |
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Homebuilding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of
homes |
|
$ |
574,282 |
|
|
$ |
640,386 |
|
|
$ |
1,673,250 |
|
|
$ |
1,823,318 |
|
Land
sales and other revenues |
|
|
2,760 |
|
|
|
59,979 |
|
|
|
14,393 |
|
|
|
72,146 |
|
Total
homebuilding |
|
|
577,042 |
|
|
|
700,365 |
|
|
|
1,687,643 |
|
|
|
1,895,464 |
|
Financial
services |
|
|
14,993 |
|
|
|
16,485 |
|
|
|
42,336 |
|
|
|
51,714 |
|
Total
revenues |
|
|
592,035 |
|
|
|
716,850 |
|
|
|
1,729,979 |
|
|
|
1,947,178 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Homebuilding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales, excluding interest |
|
|
478,886 |
|
|
|
583,783 |
|
|
|
1,399,353 |
|
|
|
1,583,979 |
|
Cost of
sales interest |
|
|
19,371 |
|
|
|
28,406 |
|
|
|
58,030 |
|
|
|
66,693 |
|
Inventory
impairment loss and land option write-offs |
|
|
4,197 |
|
|
|
1,565 |
|
|
|
9,334 |
|
|
|
22,915 |
|
Total
cost of sales |
|
|
502,454 |
|
|
|
613,754 |
|
|
|
1,466,717 |
|
|
|
1,673,587 |
|
Selling,
general and administrative |
|
|
45,517 |
|
|
|
51,685 |
|
|
|
135,392 |
|
|
|
155,560 |
|
Total
homebuilding expenses |
|
|
547,971 |
|
|
|
665,439 |
|
|
|
1,602,109 |
|
|
|
1,829,147 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial
services |
|
|
8,867 |
|
|
|
8,916 |
|
|
|
23,082 |
|
|
|
26,749 |
|
Corporate
general and administrative |
|
|
15,698 |
|
|
|
14,885 |
|
|
|
47,425 |
|
|
|
43,804 |
|
Other
interest |
|
|
23,559 |
|
|
|
23,159 |
|
|
|
68,483 |
|
|
|
68,468 |
|
Other
operations |
|
|
(26 |
) |
|
|
957 |
|
|
|
1,466 |
|
|
|
3,488 |
|
Total
expenses |
|
|
596,069 |
|
|
|
713,356 |
|
|
|
1,742,565 |
|
|
|
1,971,656 |
|
Loss on extinguishment
of debt |
|
|
(42,258 |
) |
|
|
- |
|
|
|
(34,854 |
) |
|
|
- |
|
Loss from
unconsolidated joint ventures |
|
|
(3,881 |
) |
|
|
(2,401 |
) |
|
|
(10,109 |
) |
|
|
(5,227 |
) |
(Loss) income before
income taxes |
|
|
(50,173 |
) |
|
|
1,093 |
|
|
|
(57,549 |
) |
|
|
(29,705 |
) |
State and federal
income tax provision (benefit): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
State |
|
|
8,523 |
|
|
|
1,434 |
|
|
|
10,797 |
|
|
|
4,995 |
|
Federal |
|
|
278,513 |
|
|
|
133 |
|
|
|
275,688 |
|
|
|
(9,592 |
) |
Total
income taxes |
|
|
287,036 |
|
|
|
1,567 |
|
|
|
286,485 |
|
|
|
(4,597 |
) |
Net loss |
|
$ |
(337,209 |
) |
|
$ |
(474 |
) |
|
$ |
(344,034 |
) |
|
$ |
(25,108 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per
common share |
|
$ |
(2.28 |
) |
|
$ |
(0.00 |
) |
|
$ |
(2.33 |
) |
|
$ |
(0.17 |
) |
Weighted-average number of common shares outstanding |
|
|
147,748 |
|
|
|
147,412 |
|
|
|
147,628 |
|
|
|
147,383 |
|
Assuming dilution: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per
common share |
|
$ |
(2.28 |
) |
|
$ |
(0.00 |
) |
|
$ |
(2.33 |
) |
|
$ |
(0.17 |
) |
Weighted-average number of common shares outstanding |
|
|
147,748 |
|
|
|
147,412 |
|
|
|
147,628 |
|
|
|
147,383 |
|
|
HOVNANIAN ENTERPRISES, INC. |
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE) |
(SEGMENT DATA EXCLUDES UNCONSOLIDATED JOINT
VENTURES) |
(UNAUDITED) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months - July 31, 2017 |
|
|
|
|
|
Contracts(1) |
Deliveries |
Contract |
|
|
Three Months Ended |
Three Months Ended |
Backlog |
|
|
Jul 31, |
Jul 31, |
Jul 31, |
|
|
|
2017 |
|
2016 |
% Change |
|
2017 |
|
2016 |
% Change |
|
2017 |
|
2016 |
% Change |
Northeast |
|
|
|
|
|
|
|
|
|
|
(NJ, PA) |
Home |
|
52 |
|
128 |
(59.4 |
)% |
|
86 |
|
136 |
(36.8 |
)% |
|
116 |
|
260 |
(55.4 |
)% |
|
Dollars |
$ |
26,648 |
$ |
61,945 |
(57.0 |
)% |
$ |
40,015 |
$ |
66,308 |
(39.7 |
)% |
$ |
55,284 |
$ |
130,800 |
(57.7 |
)% |
|
Avg.
Price |
$ |
512,462 |
$ |
483,942 |
5.9 |
% |
$ |
465,289 |
$ |
487,558 |
(4.6 |
)% |
$ |
476,586 |
$ |
503,079 |
(5.3 |
)% |
Mid-Atlantic |
|
|
|
|
|
|
|
|
|
|
(DE, MD, VA, WV) |
Home |
|
173 |
|
208 |
(16.8 |
)% |
|
194 |
|
228 |
(14.9 |
)% |
|
419 |
|
566 |
(26.0 |
)% |
|
Dollars |
$ |
97,017 |
$ |
97,338 |
(0.3 |
)% |
$ |
113,111 |
$ |
111,579 |
1.4 |
% |
$ |
257,891 |
$ |
312,698 |
(17.5 |
)% |
|
Avg.
Price |
$ |
560,791 |
$ |
467,969 |
19.8 |
% |
$ |
583,050 |
$ |
489,382 |
19.1 |
% |
$ |
615,493 |
$ |
552,469 |
11.4 |
% |
Midwest(2) (3) |
|
|
|
|
|
|
|
|
|
|
(IL, MN, OH) |
Home |
|
170 |
|
176 |
(3.4 |
)% |
|
127 |
|
193 |
(34.2 |
)% |
|
474 |
|
464 |
2.2 |
% |
|
Dollars |
$ |
48,257 |
$ |
54,318 |
(11.2 |
)% |
$ |
40,620 |
$ |
56,643 |
(28.3 |
)% |
$ |
133,775 |
$ |
128,381 |
4.2 |
% |
|
Avg.
Price |
$ |
283,864 |
$ |
308,625 |
(8.0 |
)% |
$ |
319,839 |
$ |
293,487 |
9.0 |
% |
$ |
282,226 |
$ |
276,683 |
2.0 |
% |
Southeast(4) |
|
|
|
|
|
|
|
|
|
|
(FL, GA, NC, SC) |
Home |
|
172 |
|
142 |
21.1 |
% |
|
166 |
|
145 |
14.5 |
% |
|
322 |
|
355 |
(9.3 |
)% |
|
Dollars |
$ |
73,896 |
$ |
59,242 |
24.7 |
% |
$ |
68,408 |
$ |
56,471 |
21.1 |
% |
$ |
142,296 |
$ |
159,489 |
(10.8 |
)% |
|
Avg.
Price |
$ |
429,632 |
$ |
417,197 |
3.0 |
% |
$ |
412,098 |
$ |
389,458 |
5.8 |
% |
$ |
441,912 |
$ |
449,265 |
(1.6 |
)% |
Southwest |
|
|
|
|
|
|
|
|
|
|
(AZ, TX) |
Home |
|
522 |
|
638 |
(18.2 |
)% |
|
581 |
|
671 |
(13.4 |
)% |
|
690 |
|
1,008 |
(31.5 |
)% |
|
Dollars |
$ |
177,285 |
$ |
225,929 |
(21.5 |
)% |
$ |
209,041 |
$ |
248,228 |
(15.8 |
)% |
$ |
244,114 |
$ |
393,906 |
(38.0 |
)% |
|
Avg.
Price |
$ |
339,625 |
$ |
354,121 |
(4.1 |
)% |
$ |
359,793 |
$ |
369,937 |
(2.7 |
)% |
$ |
353,788 |
$ |
390,780 |
(9.5 |
)% |
West |
|
|
|
|
|
|
|
|
|
|
(CA) |
Home |
|
232 |
|
175 |
32.6 |
% |
|
196 |
|
201 |
(2.5 |
)% |
|
454 |
|
316 |
43.7 |
% |
|
Dollars |
$ |
103,342 |
$ |
99,284 |
4.1 |
% |
$ |
103,087 |
$ |
101,157 |
1.9 |
% |
$ |
211,470 |
$ |
186,986 |
13.1 |
% |
|
Avg.
Price |
$ |
445,439 |
$ |
567,339 |
(21.5 |
)% |
$ |
525,956 |
$ |
503,269 |
4.5 |
% |
$ |
465,792 |
$ |
591,727 |
(21.3 |
)% |
Consolidated Segment Total |
|
|
|
|
|
|
|
|
|
|
|
Home |
|
1,321 |
|
1,467 |
(10.0 |
)% |
|
1,350 |
|
1,574 |
(14.2 |
)% |
|
2,475 |
|
2,969 |
(16.6 |
)% |
|
Dollars |
$ |
526,445 |
$ |
598,056 |
(12.0 |
)% |
$ |
574,282 |
$ |
640,386 |
(10.3 |
)% |
$ |
1,044,830 |
$ |
1,312,260 |
(20.4 |
)% |
|
Avg.
Price |
$ |
398,520 |
$ |
407,673 |
(2.2 |
)% |
$ |
425,394 |
$ |
406,853 |
4.6 |
% |
$ |
422,154 |
$ |
441,987 |
(4.5 |
)% |
Unconsolidated Joint Ventures(5) |
|
|
|
|
|
|
|
|
|
|
|
Home |
|
212 |
|
70 |
202.9 |
% |
|
117 |
|
53 |
120.8 |
% |
|
405 |
|
263 |
54.0 |
% |
|
Dollars |
$ |
132,037 |
$ |
35,217 |
274.9 |
% |
$ |
62,127 |
$ |
30,714 |
102.3 |
% |
$ |
244,234 |
$ |
168,135 |
45.3 |
% |
|
Avg.
Price |
$ |
622,812 |
$ |
503,100 |
23.8 |
% |
$ |
531,001 |
$ |
579,511 |
(8.4 |
)% |
$ |
603,046 |
$ |
639,297 |
(5.7 |
)% |
Grand Total |
|
|
|
|
|
|
|
|
|
|
|
Home |
|
1,533 |
|
1,537 |
(0.3 |
)% |
|
1,467 |
|
1,627 |
(9.8 |
)% |
|
2,880 |
|
3,232 |
(10.9 |
)% |
|
Dollars |
$ |
658,482 |
$ |
633,273 |
4.0 |
% |
|
|
|
$ |
1,289,064 |
$ |
1,480,395 |
(12.9 |
)% |
|
Avg.
Price |
$ |
429,538 |
$ |
412,019 |
4.3 |
% |
|
|
|
$ |
447,592 |
$ |
458,043 |
(2.3 |
)% |
|
|
|
|
|
|
|
|
|
|
|
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 contracts include 4 homes and $1.9 million in 2016 from
Minneapolis, MN. Contract backlog as of July 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 excludes 9
homes that were sold as wholly owned and transferred to one of our
joint ventures at the time of the joint venture formation.(4)
Contract backlog as of July 31, 2016 reflects the reduction of 67
homes and $33.7 million, related to the sale of our land portfolio
in Raleigh, NC.(5) 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 “Loss from
unconsolidated joint ventures”. |
|
HOVNANIAN ENTERPRISES, INC. |
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE) |
(SEGMENT DATA EXCLUDES UNCONSOLIDATED JOINT
VENTURES) |
(UNAUDITED) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months - July 31, 2017 |
|
|
|
|
|
Contracts(1) |
Deliveries |
Contract |
|
|
Nine Months Ended |
Nine Months Ended |
Backlog |
|
|
Jul 31, |
Jul 31, |
Jul 31, |
|
|
|
2017 |
|
2016 |
% Change |
|
2017 |
|
2016 |
% Change |
|
2017 |
|
2016 |
% Change |
Northeast |
|
|
|
|
|
|
|
|
|
|
(NJ, PA) |
Home |
|
201 |
|
362 |
(44.5 |
)% |
|
289 |
|
395 |
(26.8 |
)% |
|
116 |
|
260 |
(55.4 |
)% |
|
Dollars |
$ |
94,611 |
$ |
176,456 |
(46.4 |
)% |
$ |
138,839 |
$ |
192,659 |
(27.9 |
)% |
$ |
55,284 |
$ |
130,800 |
(57.7 |
)% |
|
Avg.
Price |
$ |
470,703 |
$ |
487,446 |
(3.4 |
)% |
$ |
480,412 |
$ |
487,743 |
(1.5 |
)% |
$ |
476,586 |
$ |
503,079 |
(5.3 |
)% |
Mid-Atlantic |
|
|
|
|
|
|
|
|
|
|
(DE, MD, VA, WV) |
Home |
|
589 |
|
753 |
(21.8 |
)% |
|
600 |
|
628 |
(4.5 |
)% |
|
419 |
|
566 |
(26.0 |
)% |
|
Dollars |
$ |
322,308 |
$ |
368,603 |
(12.6 |
)% |
$ |
313,390 |
$ |
295,004 |
6.2 |
% |
$ |
257,891 |
$ |
312,698 |
(17.5 |
)% |
|
Avg.
Price |
$ |
547,212 |
$ |
489,512 |
11.8 |
% |
$ |
522,317 |
$ |
469,751 |
11.2 |
% |
$ |
615,493 |
$ |
552,469 |
11.4 |
% |
Midwest(2) (3) |
|
|
|
|
|
|
|
|
|
|
(IL, MN, OH) |
Home |
|
511 |
|
599 |
(14.7 |
)% |
|
411 |
|
706 |
(41.8 |
)% |
|
474 |
|
464 |
2.2 |
% |
|
Dollars |
$ |
155,312 |
$ |
191,332 |
(18.8 |
)% |
$ |
126,065 |
$ |
225,276 |
(44.0 |
)% |
$ |
133,775 |
$ |
128,381 |
4.2 |
% |
|
Avg.
Price |
$ |
303,938 |
$ |
319,419 |
(4.8 |
)% |
$ |
306,727 |
$ |
319,088 |
(3.9 |
)% |
$ |
282,226 |
$ |
276,683 |
2.0 |
% |
Southeast(4) |
|
|
|
|
|
|
|
|
|
|
(FL, GA, NC, SC) |
Home |
|
421 |
|
560 |
(24.8 |
)% |
|
431 |
|
417 |
3.4 |
% |
|
322 |
|
355 |
(9.3 |
)% |
|
Dollars |
$ |
175,924 |
$ |
234,166 |
(24.9 |
)% |
$ |
178,799 |
$ |
146,895 |
21.7 |
% |
$ |
142,296 |
$ |
159,489 |
(10.8 |
)% |
|
Avg.
Price |
$ |
417,873 |
$ |
418,153 |
(0.1 |
)% |
$ |
414,847 |
$ |
352,268 |
17.8 |
% |
$ |
441,912 |
$ |
449,265 |
(1.6 |
)% |
Southwest |
|
|
|
|
|
|
|
|
|
|
(AZ, TX) |
Home |
|
1,678 |
|
1,929 |
(13.0 |
)% |
|
1,751 |
|
1,954 |
(10.4 |
)% |
|
690 |
|
1,008 |
(31.5 |
)% |
|
Dollars |
$ |
575,669 |
$ |
696,915 |
(17.4 |
)% |
$ |
617,199 |
$ |
725,721 |
(15.0 |
)% |
$ |
244,114 |
$ |
393,906 |
(38.0 |
)% |
|
Avg.
Price |
$ |
343,068 |
$ |
361,284 |
(5.0 |
)% |
$ |
352,484 |
$ |
371,403 |
(5.1 |
)% |
$ |
353,788 |
$ |
390,780 |
(9.5 |
)% |
West |
|
|
|
|
|
|
|
|
|
|
(CA) |
Home |
|
684 |
|
607 |
12.7 |
% |
|
516 |
|
494 |
4.5 |
% |
|
454 |
|
316 |
43.7 |
% |
|
Dollars |
$ |
330,287 |
$ |
317,862 |
3.9 |
% |
$ |
298,958 |
$ |
237,763 |
25.7 |
% |
$ |
211,470 |
$ |
186,986 |
13.1 |
% |
|
Avg.
Price |
$ |
482,875 |
$ |
523,662 |
(7.8 |
)% |
$ |
579,376 |
$ |
481,301 |
20.4 |
% |
$ |
465,792 |
$ |
591,727 |
(21.3 |
)% |
Consolidated Segment Total |
|
|
|
|
|
|
|
|
|
|
|
Home |
|
4,084 |
|
4,810 |
(15.1 |
)% |
|
3,998 |
|
4,594 |
(13.0 |
)% |
|
2,475 |
|
2,969 |
(16.6 |
)% |
|
Dollars |
$ |
1,654,111 |
$ |
1,985,334 |
(16.7 |
)% |
$ |
1,673,250 |
$ |
1,823,318 |
(8.2 |
)% |
$ |
1,044,830 |
$ |
1,312,260 |
(20.4 |
)% |
|
Avg.
Price |
$ |
405,022 |
$ |
412,751 |
(1.9 |
)% |
$ |
418,522 |
$ |
396,891 |
5.5 |
% |
$ |
422,154 |
$ |
441,987 |
(4.5 |
)% |
Unconsolidated Joint Ventures(5) |
|
|
|
|
|
|
|
|
|
|
|
Home |
|
509 |
|
181 |
181.2 |
% |
|
364 |
|
146 |
149.3 |
% |
|
405 |
|
263 |
54.0 |
% |
|
Dollars |
$ |
299,654 |
$ |
105,694 |
183.5 |
% |
$ |
212,983 |
$ |
76,477 |
178.5 |
% |
$ |
244,234 |
$ |
168,135 |
45.3 |
% |
|
Avg.
Price |
$ |
588,712 |
$ |
583,945 |
0.8 |
% |
$ |
585,118 |
$ |
523,814 |
11.7 |
% |
$ |
603,046 |
$ |
639,297 |
(5.7 |
)% |
Grand Total |
|
|
|
|
|
|
|
|
|
|
|
Home |
|
4,593 |
|
4,991 |
(8.0 |
)% |
|
4,362 |
|
4,740 |
(8.0 |
)% |
|
2,880 |
|
3,232 |
(10.9 |
)% |
|
Dollars |
$ |
1,953,765 |
$ |
2,091,028 |
(6.6 |
)% |
|
|
|
$ |
1,289,064 |
$ |
1,480,395 |
(12.9 |
)% |
|
Avg.
Price |
$ |
425,379 |
$ |
418,960 |
1.5 |
% |
|
|
|
$ |
447,592 |
$ |
458,043 |
(2.3 |
)% |
|
|
|
|
|
|
|
|
|
|
|
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 contracts include 4 homes and $1.9 million in 2016 from
Minneapolis, MN. Contract backlog as of July 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 excludes 9
homes that were sold as wholly owned and transferred to one of our
joint ventures at the time of the joint venture formation.(4)
Contract backlog as of July 31, 2016 reflects the reduction of 67
homes and $33.7 million, related to the sale of our land portfolio
in Raleigh, NC.(5) 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 “Loss from
unconsolidated joint ventures”. |
|
HOVNANIAN ENTERPRISES, INC. |
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE) |
(SEGMENT DATA UNCONSOLIDATED JOINT VENTURES) |
(UNAUDITED) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months - July 31, 2017 |
|
|
|
|
|
Contracts(1) |
Deliveries |
Contract |
|
|
Three Months Ended |
Three Months Ended |
Backlog |
|
|
Jul 31, |
Jul 31, |
Jul 31, |
|
|
|
2017 |
|
2016 |
% Change |
|
2017 |
|
2016 |
% Change |
|
2017 |
|
2016 |
% Change |
Northeast |
|
|
|
|
|
|
|
|
|
|
(unconsolidated joint ventures) |
Home |
|
105 |
|
2 |
5150.0 |
% |
|
19 |
|
4 |
375.0 |
% |
|
153 |
|
24 |
537.5 |
% |
(NJ, PA) |
Dollars |
$ |
78,516 |
$ |
394 |
19827.1 |
% |
$ |
7,191 |
$ |
1,407 |
411.1 |
% |
$ |
105,356 |
$ |
8,592 |
1126.2 |
% |
|
Avg.
Price |
$ |
747,767 |
$ |
197,000 |
279.6 |
% |
$ |
378,470 |
$ |
351,750 |
7.6 |
% |
$ |
688,602 |
$ |
358,000 |
92.3 |
% |
Mid-Atlantic |
|
|
|
|
|
|
|
|
|
|
(unconsolidated joint ventures) |
Home |
|
13 |
|
18 |
(27.8 |
)% |
|
17 |
|
12 |
41.7 |
% |
|
38 |
|
44 |
(13.6 |
)% |
(DE, MD, VA, WV) |
Dollars |
$ |
6,820 |
$ |
14,158 |
(51.8 |
)% |
$ |
10,933 |
$ |
5,164 |
111.7 |
% |
$ |
25,138 |
$ |
29,499 |
(14.8 |
)% |
|
Avg.
Price |
$ |
524,591 |
$ |
786,556 |
(33.3 |
)% |
$ |
643,118 |
$ |
430,333 |
49.4 |
% |
$ |
661,527 |
$ |
670,432 |
(1.3 |
)% |
Midwest |
|
|
|
|
|
|
|
|
|
|
(unconsolidated joint ventures) |
Home |
|
13 |
|
5 |
160.0 |
% |
|
6 |
|
0 |
0.0 |
% |
|
35 |
|
14 |
150.0 |
% |
(IL, MN, OH) |
Dollars |
$ |
9,281 |
$ |
4,391 |
111.4 |
% |
$ |
4,824 |
$ |
0 |
0.0 |
% |
$ |
25,443 |
$ |
11,227 |
126.6 |
% |
|
Avg.
Price |
$ |
713,893 |
$ |
878,200 |
(18.7 |
)% |
$ |
804,000 |
$ |
0 |
0.0 |
% |
$ |
726,943 |
$ |
801,929 |
(9.4 |
)% |
Southeast |
|
|
|
|
|
|
|
|
|
|
(unconsolidated joint ventures) |
Home |
|
39 |
|
27 |
44.4 |
% |
|
34 |
|
0 |
0.0 |
% |
|
102 |
|
58 |
75.9 |
% |
(FL, GA, NC, SC) |
Dollars |
$ |
17,350 |
$ |
10,874 |
59.6 |
% |
$ |
15,731 |
$ |
0 |
0.0 |
% |
$ |
49,697 |
$ |
29,997 |
65.7 |
% |
|
Avg.
Price |
$ |
444,869 |
$ |
402,741 |
10.5 |
% |
$ |
462,676 |
$ |
0 |
0.0 |
% |
$ |
487,224 |
$ |
517,190 |
(5.8 |
)% |
Southwest |
|
|
|
|
|
|
|
|
|
|
(unconsolidated joint ventures) |
Home |
|
10 |
|
0 |
0.0 |
% |
|
10 |
|
0 |
0.0 |
% |
|
27 |
|
0 |
0.0 |
% |
(AZ, TX) |
Dollars |
$ |
5,831 |
$ |
0 |
0.0 |
% |
$ |
6,925 |
$ |
0 |
0.0 |
% |
$ |
17,821 |
$ |
0 |
0.0 |
% |
|
Avg.
Price |
$ |
583,100 |
$ |
0 |
0.0 |
% |
$ |
692,504 |
$ |
0 |
0.0 |
% |
$ |
660,037 |
$ |
0 |
0.0 |
% |
West |
|
|
|
|
|
|
|
|
|
|
(unconsolidated joint ventures) |
Home |
|
32 |
|
18 |
77.8 |
% |
|
31 |
|
37 |
(16.2 |
)% |
|
50 |
|
123 |
(59.3 |
)% |
(CA) |
Dollars |
$ |
14,239 |
$ |
5,400 |
163.7 |
% |
$ |
16,523 |
$ |
24,144 |
(31.6 |
)% |
$ |
20,779 |
$ |
88,820 |
(76.6 |
)% |
|
Avg.
Price |
$ |
444,969 |
$ |
300,000 |
48.3 |
% |
$ |
533,000 |
$ |
652,541 |
(18.3 |
)% |
$ |
415,580 |
$ |
722,114 |
(42.4 |
)% |
Unconsolidated Joint Ventures (2) |
|
|
|
|
|
|
|
|
|
|
|
Home |
|
212 |
|
70 |
202.9 |
% |
|
117 |
|
53 |
120.8 |
% |
|
405 |
|
263 |
54.0 |
% |
|
Dollars |
$ |
132,037 |
$ |
35,217 |
274.9 |
% |
$ |
62,127 |
$ |
30,715 |
102.3 |
% |
$ |
244,234 |
$ |
168,135 |
45.3 |
% |
|
Avg.
Price |
$ |
622,812 |
$ |
503,100 |
23.8 |
% |
$ |
531,001 |
$ |
579,528 |
(8.4 |
)% |
$ |
603,046 |
$ |
639,297 |
(5.7 |
)% |
|
|
|
|
|
|
|
|
|
|
|
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 “Loss from
unconsolidated joint ventures”. |
|
HOVNANIAN ENTERPRISES, INC. |
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE) |
(SEGMENT DATA UNCONSOLIDATED JOINT VENTURES) |
(UNAUDITED) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months - July 31, 2017 |
|
|
|
|
Contracts(1) |
Deliveries |
Contract |
|
Nine Months Ended |
Nine Months Ended |
Backlog |
|
Jul 31, |
Jul 31, |
Jul 31, |
|
|
2017 |
|
2016 |
|
% Change |
|
2017 |
|
2016 |
% Change |
|
2017 |
|
2016 |
% Change |
Northeast |
|
|
|
|
|
|
|
|
|
|
(unconsolidated joint ventures) |
Home |
|
157 |
|
-6 |
|
(2716.7 |
)% |
|
31 |
|
18 |
72.2 |
% |
|
153 |
|
24 |
537.5 |
% |
(NJ, PA) |
Dollars |
$ |
106,970 |
($ |
7,579 |
) |
(1511.4 |
)% |
$ |
11,876 |
$ |
5,302 |
124.0 |
% |
$ |
105,356 |
$ |
8,592 |
1126.2 |
% |
|
Avg.
Price |
$ |
681,335 |
$ |
1,263,167 |
|
(46.1 |
)% |
$ |
383,097 |
$ |
294,556 |
30.1 |
% |
$ |
688,602 |
$ |
358,000 |
92.3 |
% |
Mid-Atlantic |
|
|
|
|
|
|
|
|
|
|
(unconsolidated joint ventures) |
Home |
|
43 |
|
49 |
|
(12.2 |
)% |
|
45 |
|
31 |
45.2 |
% |
|
38 |
|
44 |
(13.6 |
)% |
(DE, MD, VA, WV) |
Dollars |
$ |
22,584 |
$ |
37,991 |
|
(40.6 |
)% |
$ |
27,534 |
$ |
16,299 |
68.9 |
% |
$ |
25,138 |
$ |
29,499 |
(14.8 |
)% |
|
Avg.
Price |
$ |
525,204 |
$ |
775,327 |
|
(32.3 |
)% |
$ |
611,867 |
$ |
525,774 |
16.4 |
% |
$ |
661,527 |
$ |
670,432 |
(1.3 |
)% |
Midwest |
|
|
|
|
|
|
|
|
|
|
(unconsolidated joint ventures) |
Home |
|
40 |
|
5 |
|
700.0 |
% |
|
17 |
|
0 |
0.0 |
% |
|
35 |
|
14 |
150.0 |
% |
(IL, MN, OH) |
Dollars |
$ |
29,272 |
$ |
4,391 |
|
566.6 |
% |
$ |
13,418 |
$ |
0 |
0.0 |
% |
$ |
25,443 |
$ |
11,227 |
126.6 |
% |
|
Avg.
Price |
$ |
731,800 |
$ |
878,200 |
|
(16.7 |
)% |
$ |
789,294 |
$ |
0 |
0.0 |
% |
$ |
726,943 |
$ |
801,929 |
(9.4 |
)% |
Southeast |
|
|
|
|
|
|
|
|
|
|
(unconsolidated joint ventures) |
Home |
|
114 |
|
50 |
|
128.0 |
% |
|
100 |
|
1 |
9900.0 |
% |
|
102 |
|
58 |
75.9 |
% |
(FL, GA, NC, SC) |
Dollars |
$ |
51,095 |
$ |
25,458 |
|
100.7 |
% |
$ |
45,121 |
$ |
386 |
11589.4 |
% |
$ |
49,697 |
$ |
29,997 |
65.7 |
% |
|
Avg.
Price |
$ |
448,201 |
$ |
509,160 |
|
(12.0 |
)% |
$ |
451,209 |
$ |
386,000 |
16.9 |
% |
$ |
487,224 |
$ |
517,190 |
(5.8 |
)% |
Southwest |
|
|
|
|
|
|
|
|
|
|
(unconsolidated joint ventures) |
Home |
|
32 |
|
0 |
|
0.0 |
% |
|
12 |
|
0 |
0.0 |
% |
|
27 |
|
0 |
0.0 |
% |
(AZ, TX) |
Dollars |
$ |
21,621 |
$ |
0 |
|
0.0 |
% |
$ |
8,278 |
$ |
0 |
0.0 |
% |
$ |
17,821 |
$ |
0 |
0.0 |
% |
|
Avg.
Price |
$ |
675,656 |
$ |
0 |
|
0.0 |
% |
$ |
689,833 |
$ |
0 |
0.0 |
% |
$ |
660,037 |
$ |
0 |
0.0 |
% |
West |
|
|
|
|
|
|
|
|
|
|
(unconsolidated joint ventures) |
Home |
|
123 |
|
83 |
|
48.2 |
% |
|
159 |
|
96 |
65.6 |
% |
|
50 |
|
123 |
(59.3 |
)% |
(CA) |
Dollars |
$ |
68,112 |
$ |
45,433 |
|
49.9 |
% |
$ |
106,756 |
$ |
54,490 |
95.9 |
% |
$ |
20,779 |
$ |
88,820 |
(76.6 |
)% |
|
Avg.
Price |
$ |
553,754 |
$ |
547,386 |
|
1.2 |
% |
$ |
671,423 |
$ |
567,604 |
18.3 |
% |
$ |
415,580 |
$ |
722,114 |
(42.4 |
)% |
Unconsolidated Joint Ventures (2) |
|
|
|
|
|
|
|
|
|
|
|
Home |
|
509 |
|
181 |
|
181.2 |
% |
|
364 |
|
146 |
149.3 |
% |
|
405 |
|
263 |
54.0 |
% |
|
Dollars |
$ |
299,654 |
$ |
105,694 |
|
183.5 |
% |
$ |
212,983 |
$ |
76,477 |
178.5 |
% |
$ |
244,234 |
$ |
168,135 |
45.3 |
% |
|
Avg.
Price |
$ |
588,712 |
$ |
583,945 |
|
0.8 |
% |
$ |
585,118 |
$ |
523,815 |
11.7 |
% |
$ |
603,046 |
$ |
639,297 |
(5.7 |
)% |
|
|
|
|
|
|
|
|
|
|
|
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 “Loss from
unconsolidated joint ventures”. |
|
Contact:
J. Larry Sorsby
Executive Vice President & CFO
732-747-7800
Jeffrey T. O’Keefe
Vice President, Investor Relations
732-747-7800
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