Hovnanian Enterprises Receives Continued Listing Standard Notice From NYSE and Announces Reverse Stock Split Proposal
January 11 2019 - 5:00PM
Hovnanian Enterprises, Inc. (NYSE: HOV) (“Hovnanian” or the
“Company”), a leading national homebuilder, announced today that it
will be requesting shareholder approval at its annual meeting on
March 19, 2019 for amendments to its restated certificate of
incorporation that will enable the Company to conduct a reverse
stock split. The details of the proposed reverse stock split are
provided in the Company’s preliminary proxy statement filed with
the Securities and Exchange Commission (“SEC”) on January 11, 2019.
Hovnanian is proposing the reverse stock split
primarily in order to address the minimum average closing price
criteria set forth in the New York Stock Exchange’s (“NYSE”) Listed
Company Manual. On January 9, 2019, Hovnanian received
written notification from the NYSE that the average closing price
of Hovnanian’s Class A common stock over the consecutive 30
trading-day period ended January 7, 2019 was $0.98, which is below
the $1.00 minimum average closing price required by the NYSE’s
continued listing standard.
Hovnanian has a period of six months from the
date of the NYSE notification to regain compliance. At any
time during the six-month cure period, Hovnanian can regain
compliance if, on the last trading day of any calendar month during
the cure period, the Company’s Class A common stock has a closing
share price of at least $1.00 per share and an average closing
share price of at least $1.00 per share over the 30 trading-day
period ending on the last trading day of that month. During
this six-month period, Hovnanian’s shares will continue to be
listed and traded on the NYSE, subject to Hovnanian’s compliance
with other NYSE continued listing requirements. Hovnanian
will notify the NYSE that it intends to cure the minimum average
closing price deficiency during this six-month period.
The NYSE notification does not relate to or
affect any of the NYSE’s other continued listing criteria, the
ongoing business operations of Hovnanian, compliance with its debt
instruments or its reporting requirements under the rules and
regulations of the SEC.
About Hovnanian
Enterprises®, Inc.:
Hovnanian Enterprises, Inc., founded in 1959 by
Kevork S. Hovnanian, is headquartered in Matawan, New Jersey and,
through its subsidiaries, 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 and Brighton Homes®.
Additionally, the Company’s subsidiaries, as developers of K.
Hovnanian’s® Four Seasons communities, make the Company one of
the nation’s largest builders of active lifestyle communities.
Additional information on Hovnanian Enterprises,
Inc. 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.
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
significant homebuilding downturn; (2) adverse weather and other
environmental conditions and natural disasters; (3) high leverage
and restrictions on the Company’s operations and activities imposed
by the agreements governing the Company’s outstanding indebtedness;
(4) availability and terms of financing to the Company; (5) the
Company’s sources of liquidity; (6) changes in credit ratings; (7)
the seasonality of the Company’s business; (8) the availability and
cost of suitable land and improved lots and sufficient liquidity to
invest in such land and lots; (9) shortages in, and price
fluctuations of, raw materials and labor; (10) reliance on, and the
performance of, subcontractors; (11) 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; (12) fluctuations in
interest rates and the availability of mortgage financing; (13)
increases in cancellations of agreements of sale; (14)
changes in tax laws affecting the after-tax costs of owning a home;
(15) operations through unconsolidated joint ventures with third
parties; (16) government regulation, including regulations
concerning development of land, the home building, sales and
customer financing processes, tax laws and the environment; (17)
legal claims brought against us and not resolved in our favor, such
as product liability litigation, warranty claims and claims made by
mortgage investors; (18) levels of competition; (19) successful
identification and integration of acquisitions; (20) significant
influence of the Company’s controlling stockholders; (21)
availability of net operating loss carryforwards; (22) utility
shortages and outages or rate fluctuations; (23) geopolitical
risks, terrorist acts and other acts of war; (24) loss of key
management personnel or failure to attract qualified personnel;
(25) information technology failures and data security breaches;
(26) negative publicity; and (27) 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, 2018 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.
Important Additional Information for
Stockholders
In connection with the proposed reverse
stock split, Hovnanian is filing with the SEC a proxy
statement, the definitive version of which will be sent to the
shareholders of Hovnanian. Shareholders are urged to
read the proxy statement (including any amendments or supplements)
and other documents filed with the SEC carefully in their entirety
when they become available because they will
contain important information.
Shareholders will be able to
obtain free copies of the proxy statement (when available) and
other documents filed with the SEC on the SEC’s web site at
www.sec.gov. Free copies of the proxy statement
(when available) and other documents filed with the SEC also
can be obtained by directing a request to our Investor Relations
department at 1-800-815-9680.
Hovnanian and its directors and executive
officers may be deemed to be participants in the solicitation of
proxies in respect of the proposed reverse stock split. Additional
information regarding the interests of those persons may be
obtained by reading the definitive proxy statement when it becomes
available.
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Contact: |
J. Larry Sorsby |
Jeffrey T. O’Keefe |
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Executive Vice
President & CFO |
Vice President,
Investor Relations |
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732-747-7800 |
732-747-7800 |
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