Hovnanian Enterprises, Inc. (NYSE: HOV), a leading national
homebuilder, reported results for its fiscal fourth quarter and
year ended October 31, 2019.
RESULTS FOR THE THREE-MONTH PERIOD AND YEAR ENDED OCTOBER
31, 2019: |
- Total revenues increased 16.1% to
$713.6 million in the fourth quarter of fiscal 2019, compared with
$614.8 million in the fourth quarter of fiscal 2018. For the year
ended October 31, 2019, total revenues increased to $2.02 billion
compared with $1.99 billion in the same period during the prior
fiscal year.
- Homebuilding gross margin
percentage, after cost of sales interest expense and land charges,
was 14.5% for the fourth quarter of fiscal 2019 compared with 16.5%
during the prior year’s fourth quarter. For the year ended October
31, 2019, homebuilding gross margin percentage, after cost of sales
interest expense and land charges, was 14.2% compared with 15.2%
last year.
- Homebuilding gross margin
percentage, before cost of sales interest expense and land charges,
was 18.9% for the fourth quarter of fiscal 2019 compared with 19.2%
in the fourth quarter of fiscal 2018. Sequentially, on the same
basis, gross margin increased 50 basis points from 18.4% in the
third quarter of fiscal 2019. For fiscal 2019, homebuilding gross
margin percentage, before cost of sales interest expense and land
charges, was 18.1% compared with 18.4% in the previous fiscal
year.
- Total SG&A was $53.9 million,
or 7.6% of total revenues, in the fourth quarter of fiscal 2019
compared `with $50.8 million, or 8.3% of total revenues, in the
same quarter one year ago. For fiscal 2019, total SG&A was
$233.1 million, or 11.6% of total revenues, compared with $228.8
million, or 11.5% of total revenues, in the prior fiscal
year.
- Interest incurred (some of which
was expensed and some of which was capitalized) was $43.6 million
for the fourth quarter of fiscal 2019 compared with $39.4 million
in the same quarter one year ago. For the year ended October 31,
2019, interest incurred (some of which was expensed and some of
which was capitalized) was $165.9 million compared with $161.0
million last year.
- Income from unconsolidated joint
ventures was $8.4 million for the quarter ended October 31, 2019
compared with $17.1 million in the fourth quarter of the previous
year. For fiscal 2019, income from unconsolidated joint ventures
was $28.9 million compared with $24.0 million in the same period a
year ago.
- Including a $42.4 million loss on
early extinguishment of debt, loss before income taxes for the
quarter ended October 31, 2019 was $0.6 million compared with
income of $48.1 million during the fourth quarter of fiscal 2018.
For fiscal 2019, the loss before income taxes was $39.7 million
compared with income of $8.1 million during same period of fiscal
2018.
- Income before income taxes
excluding land-related charges, joint venture write-downs and loss
on extinguishment of debt, was $44.5 million during the fourth
quarter of fiscal 2019 compared with income before these items of
$50.9 million in the fourth quarter of fiscal 2018. For fiscal
2019, income before income taxes, excluding land-related charges,
joint venture write-downs and loss on extinguishment of debt, was
$9.9 million compared with income before these items of $20.4
million during all of fiscal 2018.
- Net loss was $1.8 million, or $0.30
per common share, in the fourth quarter of fiscal 2019 compared
with net income of $46.2 million, or $7.75 per common share, during
the same quarter a year ago. For fiscal 2019, net loss was $42.1
million, or $7.06 per common share, compared with net income of
$4.5 million, or $0.73 per common share, in the same period during
fiscal 2018.
- Consolidated contracts per
community increased 15.9% to 9.5 contracts per community for the
fourth quarter of fiscal 2019 compared with 8.2 contracts per
community in the fourth quarter of fiscal 2018. Contracts per
community, including domestic unconsolidated joint ventures(1),
increased 9.6% to 9.1 contracts per community for the quarter ended
October 31, 2019 compared with 8.3 contracts per community,
including domestic unconsolidated joint ventures, in last year’s
fourth quarter.
- The consolidated community count
was 141 as of October 31, 2019. This was a 14.6% year-over-year
increase from 123 communities at the end of the prior year’s fourth
quarter. As of the end of the fourth quarter of fiscal 2019,
community count, including domestic unconsolidated joint ventures,
was 162 communities. This was a 14.1% year-over-year increase
compared with 142 communities at October 31, 2018.
- The number of consolidated
contracts increased 34.0% to 1,345 homes, during the fourth quarter
of fiscal 2019, compared with 1,004 homes during the fourth quarter
of fiscal 2018. The number of contracts, including domestic
unconsolidated joint ventures, for the fourth quarter ended October
31, 2019, increased 25.9% to 1,479 homes from 1,175 homes for the
same quarter last year.
- The number of consolidated
contracts increased 14.3% to 5,340 homes, during the year ended
October 31, 2019, compared with 4,671 homes in the previous fiscal
year. During all of fiscal 2019, the number of contracts, including
domestic unconsolidated joint ventures, was 5,976 homes, an
increase of 7.8% from 5,543 homes during the same period in fiscal
2018.
- For November 2019, consolidated
contracts per community were 2.9 compared with 2.2 for the same
month one year ago. During November 2019, the number of
consolidated contracts increased 41.8% to 404 homes from 285 homes
in November 2018.
- The dollar value of consolidated
contract backlog, as of October 31, 2019, increased 18.0% to $880.1
million compared with $745.6 million as of October 31, 2018. The
dollar value of contract backlog, including domestic unconsolidated
joint ventures, as of October 31, 2019, was $1.04 billion, an
increase of 6.7% compared with $976.3 million as of October 31,
2018.
- Consolidated deliveries were 1,709
homes for the fourth quarter of fiscal 2019, a 16.7% increase
compared with 1,465 homes during the same quarter a year ago. For
the quarter ended October 31, 2019, deliveries, including domestic
unconsolidated joint ventures, increased 6.8% to 1,941 homes
compared with 1,818 homes during the fourth quarter of fiscal
2018.
- Consolidated deliveries were 4,946
homes in all of fiscal 2019, a 2.0% increase compared with 4,847
homes in the same period in fiscal 2018. For the year ended October
31, 2019, deliveries, including domestic unconsolidated joint
ventures, decreased slightly to 5,713 homes compared with 5,758
homes in the same period of the prior fiscal year.
- The contract cancellation rate for
consolidated contracts was 21% for the fourth quarter of fiscal
2019 compared with 23% for the same quarter one year ago. The
contract cancellation rate for contracts including domestic
unconsolidated joint ventures was 22% for both the three months
ended October 31, 2019 and the same quarter in fiscal 2018.
(1)When we refer to
“Domestic Unconsolidated Joint Ventures”, we are excluding results
from our single community unconsolidated joint venture in the
Kingdom of Saudi Arabia (KSA).
REFINANCED OR EXCHANGED OVER $800 MILLION OF DEBT AND
EXTENDED MATURITIES: |
- The Company issued $350.0 million
of 7.75% Senior Secured 1.125 Lien Notes due 2026 in part for cash
and in part in exchange for, and cash payments made in connection
with, the exchange of $221.0 million of existing 10% Senior Secured
Notes due 2022 and $114.0 million of existing 10.5% Senior Secured
Notes due 2024 and exchanged $99.6 million of existing 10.5% Senior
Secured Notes due 2024 for $103.1 million of 11.25% Senior Secured
1.5 Lien Notes due 2026.
- The Company also issued $282.3
million of 10.5% Senior Secured 1.25 Lien Notes due 2026, the net
proceeds of which, together with cash on hand, were used to
refinance its 9.5% Senior Secured Notes due 2020, 2.0% Senior
Secured Notes due 2021, and 5.0% Senior Secured Notes due
2021.
- Additionally, the Company entered
into a $125.0 million 7.75% secured first lien revolver maturing in
December 2022 to replace its prior 10.0% secured first lien
revolver, which had revolving commitments terminating in December
2019.
LIQUIDITY AND INVENTORY AS OF OCTOBER 31,
2019: |
- Total liquidity at the end of the
of the fourth quarter of fiscal 2019 was $275.9 million, which is
above the $245 million upper end of our target range.
- In the fourth quarter of fiscal
2019, approximately 2,400 lots were put under option or acquired in
35 communities, including unconsolidated joint ventures.
- As of October 31, 2019,
consolidated lots controlled totaled 29,378; which, based on
trailing twelve-month deliveries, equaled a 5.9 years supply.
COMMENTS FROM MANAGEMENT: |
“The fourth quarter was illustrative of our
efforts towards achieving our growth strategy. We experienced solid
double-digit percentage gains in deliveries, total revenues,
community count, contracts, backlog and contracts per community,”
stated Ara K. Hovnanian, Chairman of the Board, President and Chief
Executive Officer. “Our adjusted pretax profit of $45 million for
the quarter beat consensus estimates and made us profitable on this
basis for the full year. Our increased level of revenues and the
resultant lower SG&A expense ratio for the fourth quarter
demonstrate the benefits of leveraging our SG&A expenses with
higher revenues. We are encouraged by the current housing
environment and economic backdrop which we believe should allow us
to execute on our objectives.”
J. Larry Sorsby, Chief Financial Officer and
Executive Vice President commented, “During the fourth quarter, we
took steps to significantly improve our capital structure and
better position the Company to execute on our growth strategy. We
successfully exchanged or refinanced over $800 million of debt. We
eliminated all maturities until 2022 and pushed out over 50% of the
debt maturing in 2022 and 2024. Additionally, we simplified the
capital structure by creating a single collateral pool for all
secured debt holders. The long-term benefits of extending our debt
maturities far outweighed the short-term impact of the $42 million
charge for the early extinguishment of debt. At the end of the
fourth quarter, we had $276 million of liquidity, which enables us
to continue to invest in new land to further our community count,
revenues and profitability growth in the future.”
Hovnanian Enterprises will webcast its fiscal
2019 fourth quarter financial results conference call at 11:00 a.m.
E.T. on Thursday, December 5, 2019. 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 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 name K. Hovnanian® 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.
|
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) income. The reconciliation for
historical periods of EBIT, EBITDA and Adjusted EBITDA to net
(loss) income is presented in a table attached to this earnings
release.
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. The
reconciliation for historical periods of 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, 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 (loss) income 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 (loss) income
before income taxes is presented in a table attached to this
earnings release.
Total liquidity is comprised of $131.0
million of cash and cash equivalents, $19.9 million of restricted
cash required to collateralize letters of credit and $125.0 million
of availability under the senior secured revolving credit facility
as of October 31, 2019.
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 including due to changes
in trade policies, such as the imposition of tariffs and duties on
homebuilding materials and products, and related trade disputes
with and retaliatory measures taken by other countries; (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)
increases in cancellations of agreements of sale; (13) fluctuations
in interest rates and the availability of mortgage financing; (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.
(Financial Tables Follow)
|
Hovnanian
Enterprises, Inc. |
October
31, 2019 |
Statements of
consolidated operations |
(In thousands,
except per share data) |
|
|
|
Three Months Ended |
|
Year Ended |
|
|
|
October 31, |
|
October 31, |
|
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
Total
revenues |
$713,590 |
|
|
$614,811 |
|
|
$2,016,916 |
|
|
$1,991,233 |
|
Costs and expenses
(1) |
|
680,116 |
|
|
|
581,998 |
|
|
|
2,043,080 |
|
|
|
1,999,584 |
|
Loss on
extinguishment of debt |
|
(42,436 |
) |
|
|
(1,830 |
) |
|
|
(42,436 |
) |
|
|
(7,536 |
) |
Income from
unconsolidated joint ventures |
|
8,376 |
|
|
|
17,134 |
|
|
|
28,932 |
|
|
|
24,033 |
|
(Loss) income
before income taxes |
|
(586 |
) |
|
|
48,117 |
|
|
|
(39,668 |
) |
|
|
8,146 |
|
Income tax
provision |
|
1,221 |
|
|
|
1,939 |
|
|
|
2,449 |
|
|
|
3,626 |
|
Net (loss)
income |
$(1,807 |
) |
|
$46,178 |
|
|
$(42,117 |
) |
|
$4,520 |
|
|
|
|
|
|
|
|
|
|
|
Per share
data: |
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
|
Net (loss) income
per common share |
$(0.30 |
) |
|
$7.75 |
|
|
$(7.06 |
) |
|
$0.73 |
|
|
Weighted average
number of |
|
|
|
|
|
|
|
|
|
common shares outstanding
(2) |
|
5,982 |
|
|
|
5,957 |
|
|
|
5,968 |
|
|
|
5,941 |
|
Assuming
dilution: |
|
|
|
|
|
|
|
|
Net (loss) income
per common share |
$(0.30 |
) |
|
$7.34 |
|
|
$(7.06 |
) |
|
$0.72 |
|
|
Weighted average
number of |
|
|
|
|
|
|
|
|
|
common shares outstanding
(2) |
|
5,982 |
|
|
|
6,077 |
|
|
|
5,968 |
|
|
|
6,072 |
|
|
|
|
|
|
|
|
|
|
|
(1)
Includes inventory impairment loss and land option write-offs. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) For
periods with a net (loss), basic shares are used in accordance with
GAAP rules. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hovnanian
Enterprises, Inc. |
October
31, 2019 |
Reconciliation of
income before income taxes excluding land-related charges, joint
venture write-downs and loss on extinguishment of debt to (loss)
income before income taxes |
(In
thousands) |
|
|
|
Three Months Ended |
|
Year Ended |
|
|
|
October 31, |
|
October 31, |
|
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
(Loss) income
before income taxes |
$(586 |
) |
|
$48,117 |
|
|
$(39,668 |
) |
|
$8,146 |
|
Inventory
impairment loss and land option write-offs |
|
2,687 |
|
|
|
318 |
|
|
|
6,288 |
|
|
|
3,501 |
|
Unconsolidated
joint venture investment write-downs |
|
- |
|
|
|
601 |
|
|
|
854 |
|
|
|
1,261 |
|
Loss on
extinguishment of debt |
|
42,436 |
|
|
|
1,830 |
|
|
|
42,436 |
|
|
|
7,536 |
|
Income before
income taxes excluding land-related charges, joint venture
write-downs and loss on extinguishment of debt (1) |
$44,537 |
|
|
$50,866 |
|
|
$9,910 |
|
|
$20,444 |
|
|
|
|
|
|
|
|
|
|
|
(1) 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 (loss) income before income taxes. |
|
|
Hovnanian
Enterprises, Inc. |
October
31, 2019 |
Gross margin |
(In
thousands) |
|
|
Homebuilding Gross Margin |
|
Homebuilding Gross Margin |
|
HomebuildingGross Margin |
|
|
Three Months Ended |
|
Year Ended |
|
Three MonthsEnded |
|
|
October 31, |
|
October 31, |
|
July 31, (3) |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
Sale of homes |
|
$692,146 |
|
|
$593,675 |
|
|
$1,949,682 |
|
|
$1,906,228 |
|
|
$467,849 |
|
Cost of sales, excluding
interest expense and land charges (1) |
|
|
561,284 |
|
|
|
479,762 |
|
|
|
1,596,237 |
|
|
|
1,555,894 |
|
|
|
381,906 |
|
Homebuilding gross margin,
before cost of sales interest expense and land charges (2) |
|
|
130,862 |
|
|
|
113,913 |
|
|
|
353,445 |
|
|
|
350,334 |
|
|
|
85,943 |
|
Cost of sales interest
expense, excluding land sales interest expense |
|
|
27,556 |
|
|
|
15,563 |
|
|
|
70,520 |
|
|
|
56,588 |
|
|
|
18,824 |
|
Homebuilding gross margin,
after cost of sales interest expense, before land charges (2) |
|
|
103,306 |
|
|
|
98,350 |
|
|
|
282,925 |
|
|
|
293,746 |
|
|
|
67,119 |
|
Land charges |
|
|
2,687 |
|
|
|
318 |
|
|
|
6,288 |
|
|
|
3,501 |
|
|
|
1,435 |
|
Homebuilding gross margin |
|
$100,619 |
|
|
$98,032 |
|
|
$276,637 |
|
|
$290,245 |
|
|
$65,684 |
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin percentage |
|
|
14.5 |
% |
|
|
16.5 |
% |
|
|
14.2 |
% |
|
|
15.2 |
% |
|
|
14.0 |
% |
Gross margin percentage,
before cost of sales interest expense and land charges (2) |
|
|
18.9 |
% |
|
|
19.2 |
% |
|
|
18.1 |
% |
|
|
18.4 |
% |
|
|
18.4 |
% |
Gross margin percentage, after
cost of sales interest expense, before land charges (2) |
|
|
14.9 |
% |
|
|
16.6 |
% |
|
|
14.5 |
% |
|
|
15.4 |
% |
|
|
14.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Land Sales Gross Margin |
|
Land Sales Gross Margin |
|
|
|
|
Three Months Ended |
|
Year Ended |
|
|
|
|
October 31, |
|
October 31, |
|
|
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
|
|
Land and lot sales |
|
$1,161 |
|
|
$3,772 |
|
|
$9,211 |
|
|
$24,277 |
|
|
|
Land and lot sales cost of
sales, excluding interest and land charges (1) |
|
|
1,150 |
|
|
|
2,951 |
|
|
|
8,540 |
|
|
|
10,661 |
|
|
|
Land and lot sales gross
margin, excluding interest and land charges |
|
|
11 |
|
|
|
821 |
|
|
|
671 |
|
|
|
13,616 |
|
|
|
Land and lot sales
interest |
|
|
- |
|
|
|
42 |
|
|
|
205 |
|
|
|
4,097 |
|
|
|
Land and lot sales gross
margin, including interest and excluding land charges |
|
$11 |
|
|
$779 |
|
|
$466 |
|
|
$9,519 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) 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. |
|
(2) 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. |
|
(3) Third quarter
gross margin reconciliation is included because it is referenced in
the “Results for the Three-Month Period and Year Ended October 31,
2019” section of the press release. |
|
|
Hovnanian
Enterprises, Inc. |
October
31, 2019 |
Reconciliation of
adjusted EBITDA to net (loss) income |
(In
thousands) |
|
Three Months Ended |
|
Year Ended |
|
October 31, |
|
October 31, |
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
Net (loss) income |
$(1,807 |
) |
|
$46,178 |
|
|
$(42,117 |
) |
|
$4,520 |
|
Income tax provision |
|
1,221 |
|
|
|
1,939 |
|
|
|
2,449 |
|
|
|
3,626 |
|
Interest expense |
|
50,299 |
|
|
|
38,824 |
|
|
|
160,781 |
|
|
|
163,982 |
|
EBIT (1) |
|
49,713 |
|
|
|
86,941 |
|
|
|
121,113 |
|
|
|
172,128 |
|
Depreciation and
amortization |
|
1,230 |
|
|
|
836 |
|
|
|
4,172 |
|
|
|
3,156 |
|
EBITDA (2) |
|
50,943 |
|
|
|
87,777 |
|
|
|
125,285 |
|
|
|
175,284 |
|
Inventory impairment loss and
land option write-offs |
|
2,687 |
|
|
|
318 |
|
|
|
6,288 |
|
|
|
3,501 |
|
Loss on extinguishment of
debt |
|
42,436 |
|
|
|
1,830 |
|
|
|
42,436 |
|
|
|
7,536 |
|
Adjusted EBITDA (3) |
$96,066 |
|
|
$89,925 |
|
|
$174,009 |
|
|
$186,321 |
|
|
|
|
|
|
|
|
|
Interest incurred |
$43,566 |
|
|
$39,431 |
|
|
$165,906 |
|
|
$161,048 |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA to interest
incurred |
|
2.21 |
|
|
|
2.28 |
|
|
|
1.05 |
|
|
|
1.16 |
|
|
|
|
|
|
|
|
|
(1) EBIT is
a non-GAAP financial measure. The most directly comparable GAAP
financial measure is net (loss) income. EBIT represents earnings
before interest expense and income taxes. |
|
(2) EBITDA
is a non-GAAP financial measure. The most directly comparable GAAP
financial measure is net (loss) income. EBITDA represents earnings
before interest expense, income taxes, depreciation and
amortization. |
|
(3)
Adjusted EBITDA is a non-GAAP financial measure. The most directly
comparable GAAP financial measure is net (loss) income. Adjusted
EBITDA represents earnings before interest expense, income taxes,
depreciation, amortization, inventory impairment loss and land
option write-offs and loss on extinguishment of debt. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hovnanian
Enterprises, Inc. |
October
31, 2019 |
Interest
incurred, expensed and capitalized |
(In
thousands) |
|
Three Months Ended |
|
Year Ended |
|
October 31, |
|
October 31, |
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
Interest capitalized at
beginning of period |
$77,997 |
|
|
$67,510 |
|
|
$68,117 |
|
|
$71,051 |
|
Plus interest incurred |
|
43,566 |
|
|
|
39,431 |
|
|
|
165,906 |
|
|
|
161,048 |
|
Less interest expensed |
|
50,299 |
|
|
|
38,824 |
|
|
|
160,781 |
|
|
|
163,982 |
|
Less interest contributed to
unconsolidated joint venture (1) |
|
- |
|
|
|
- |
|
|
|
1,978 |
|
|
|
- |
|
Interest capitalized at end of
period (2) |
$71,264 |
|
|
$68,117 |
|
|
$71,264 |
|
|
$68,117 |
|
|
|
|
|
|
|
|
|
(1) Represents
capitalized interest which was included as part of the assets
contributed to the joint venture the company entered into in June
2019. There was no impact to the Consolidated Statement of
Operations as a result of this transaction. |
|
(2) Capitalized
interest amounts are shown gross before allocating any portion of
impairments to capitalized interest. |
|
HOVNANIAN ENTERPRISES, INC. AND
SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(In thousands)
|
|
October 31,2019 |
|
|
October 31,2018 |
|
ASSETS |
|
(Unaudited) |
|
|
(1) |
|
Homebuilding: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$130,976 |
|
|
$187,871 |
|
Restricted cash and cash equivalents |
|
|
20,905 |
|
|
|
12,808 |
|
Inventories: |
|
|
|
|
|
|
Sold and unsold homes and lots under development |
|
|
993,647 |
|
|
|
878,876 |
|
Land and land options held for future development or sale |
|
|
108,565 |
|
|
|
111,368 |
|
Consolidated inventory not owned |
|
|
190,273 |
|
|
|
87,921 |
|
Total inventories |
|
|
1,292,485 |
|
|
|
1,078,165 |
|
Investments in and advances to
unconsolidated joint ventures |
|
|
127,038 |
|
|
|
123,694 |
|
Receivables, deposits and
notes, net |
|
|
44,914 |
|
|
|
35,189 |
|
Property, plant and equipment,
net |
|
|
20,127 |
|
|
|
20,285 |
|
Prepaid expenses and other
assets |
|
|
45,704 |
|
|
|
39,150 |
|
Total homebuilding |
|
|
1,682,149 |
|
|
|
1,497,162 |
|
Financial services |
|
|
199,275 |
|
|
|
164,880 |
|
Total assets |
|
$1,881,424 |
|
|
$1,662,042 |
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
Homebuilding: |
|
|
|
|
|
|
Nonrecourse mortgages secured by inventory, net of debt issuance
costs |
|
$203,585 |
|
|
$95,557 |
|
Accounts payable and other liabilities |
|
|
320,193 |
|
|
|
304,899 |
|
Customers’ deposits |
|
|
35,872 |
|
|
|
30,086 |
|
Liabilities from inventory not owned, net of debt issuance
costs |
|
|
141,033 |
|
|
|
63,387 |
|
Revolving and term loan credit facilities, net of debt issuance
costs |
|
|
201,528 |
|
|
|
201,389 |
|
Notes payable (net of discount, premium and debt issuance costs)
and accrued interest |
|
|
1,297,543 |
|
|
|
1,273,446 |
|
Total homebuilding |
|
|
2,199,754 |
|
|
|
1,968,764 |
|
Financial services |
|
|
169,145 |
|
|
|
143,448 |
|
Income taxes payable |
|
|
2,301 |
|
|
|
3,334 |
|
Total liabilities |
|
|
2,371,200 |
|
|
|
2,115,546 |
|
|
|
|
|
|
|
|
Equity: |
|
|
|
|
|
|
Hovnanian Enterprises, Inc.
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, 2019 and 2018 |
|
|
135,299 |
|
|
|
135,299 |
|
Common stock, Class A, $0.01 par value - authorized 16,000,000
shares; issued 5,973,727 shares at October 31, 2019 and 5,783,858
shares at October 31, 2018 |
|
|
60 |
|
|
|
58 |
|
Common stock, Class B, $0.01 par value (convertible to Class A at
time of sale) - authorized 2,400,000 shares; issued 650,363 shares
at October 31, 2019 and 649,673 shares at October 31, 2018 |
|
|
7 |
|
|
|
6 |
|
Paid in capital - common stock |
|
|
715,504 |
|
|
|
710,349 |
|
Accumulated deficit |
|
|
(1,225,973 |
) |
|
|
(1,183,856 |
) |
Treasury stock - at cost – 470,430 shares of Class A common stock
and 27,669 shares of Class B common stock at October 31, 2019 and
2018 |
|
|
(115,360 |
) |
|
|
(115,360 |
) |
Total Hovnanian Enterprises, Inc. stockholders’ equity deficit |
|
|
(490,463 |
) |
|
|
(453,504 |
) |
Noncontrolling interest in
consolidated joint ventures |
|
|
687 |
|
|
|
- |
|
Total equity deficit |
|
|
(489,776 |
) |
|
|
(453,504 |
) |
Total liabilities and
equity |
|
$1,881,424 |
|
|
$1,662,042 |
|
(1) Derived from the audited balance sheet as of October 31,
2018
HOVNANIAN ENTERPRISES, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS(In Thousands
Except Per Share Data)(Unaudited)
|
|
Three Months Ended |
|
|
Years Ended |
|
|
|
October 31, |
|
|
October 31, |
|
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Homebuilding: |
|
|
|
|
|
|
|
|
|
|
|
|
Sale of homes |
|
$692,146 |
|
|
$596,675 |
|
|
$1,949,682 |
|
|
$1,906,228 |
|
Land sales and other revenues |
|
|
1,971 |
|
|
|
4,732 |
|
|
|
13,082 |
|
|
|
31,650 |
|
Total homebuilding |
|
|
694,117 |
|
|
|
598,407 |
|
|
|
1,962,764 |
|
|
|
1,937,878 |
|
Financial services |
|
|
19,473 |
|
|
|
16,404 |
|
|
|
54,152 |
|
|
|
53,355 |
|
Total revenues |
|
|
713,590 |
|
|
|
614,811 |
|
|
|
2,016,916 |
|
|
|
1,991,233 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Homebuilding: |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales, excluding interest |
|
|
562,434 |
|
|
|
482,713 |
|
|
|
1,604,777 |
|
|
|
1,566,555 |
|
Cost of sales interest |
|
|
27,556 |
|
|
|
15,605 |
|
|
|
70,725 |
|
|
|
60,685 |
|
Inventory impairment loss and land option write-offs |
|
|
2,687 |
|
|
|
318 |
|
|
|
6,288 |
|
|
|
3,501 |
|
Total cost of sales |
|
|
592,677 |
|
|
|
498,636 |
|
|
|
1,681,790 |
|
|
|
1,630,741 |
|
Selling, general and administrative |
|
|
36,310 |
|
|
|
32,883 |
|
|
|
166,784 |
|
|
|
159,202 |
|
Total homebuilding expenses |
|
|
628,987 |
|
|
|
531,519 |
|
|
|
1,848,574 |
|
|
|
1,789,943 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial services |
|
|
10,446 |
|
|
|
9,003 |
|
|
|
36,525 |
|
|
|
35,128 |
|
Corporate general and administrative |
|
|
17,572 |
|
|
|
17,960 |
|
|
|
66,364 |
|
|
|
69,632 |
|
Other interest |
|
|
22,743 |
|
|
|
23,219 |
|
|
|
90,056 |
|
|
|
103,297 |
|
Other operations |
|
|
368 |
|
|
|
297 |
|
|
|
1,561 |
|
|
|
1,584 |
|
Total expenses |
|
|
680,116 |
|
|
|
581,998 |
|
|
|
2,043,080 |
|
|
|
1,999,584 |
|
Loss on extinguishment of
debt |
|
|
(42,436 |
) |
|
|
(1,830 |
) |
|
|
(42,436 |
) |
|
|
(7,536 |
) |
Income (loss) from
unconsolidated joint ventures |
|
|
8,376 |
|
|
|
17,134 |
|
|
|
28,932 |
|
|
|
24,033 |
|
(Loss) income before income
taxes |
|
|
(586 |
) |
|
|
48,117 |
|
|
|
(39,668 |
) |
|
|
8,146 |
|
State and federal income tax
provision: |
|
|
|
|
|
|
|
|
|
|
|
|
State |
|
|
1,221 |
|
|
|
1,939 |
|
|
|
2,449 |
|
|
|
3,626 |
|
Federal |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Total income taxes |
|
|
1,221 |
|
|
|
1,139 |
|
|
|
2,449 |
|
|
|
3,626 |
|
Net (loss) income |
|
$(1,807 |
) |
|
$46,178 |
|
|
$(42,117 |
) |
|
$4,520 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share data: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per common share |
|
$(0.30 |
) |
|
$7.75 |
|
|
$(7.06 |
) |
|
$0.73 |
|
Weighted-average number of common shares outstanding |
|
|
5,982 |
|
|
|
5,957 |
|
|
|
5,968 |
|
|
|
5,941 |
|
Assuming dilution: |
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per common share |
|
$(0.30 |
) |
|
$7.34 |
|
|
$(7.06 |
) |
|
$0.72 |
|
Weighted-average number of common shares outstanding |
|
|
5,982 |
|
|
|
6,077 |
|
|
|
5,968 |
|
|
|
6,072 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HOVNANIAN ENTERPRISES, INC. |
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE) |
(SEGMENT DATA EXCLUDES UNCONSOLIDATED JOINT
VENTURES) |
(UNAUDITED) |
|
Three Months - October 31,
2019 |
|
|
Contracts (1) |
Deliveries |
Contract |
|
|
Three Months Ended |
Three Months Ended |
Backlog |
|
|
October 31, |
October 31, |
October 31, |
|
|
|
2019 |
|
2018 |
% Change |
|
2019 |
|
2018 |
% Change |
|
2019 |
|
2018 |
% Change |
Northeast |
|
|
|
|
|
|
|
|
|
|
(NJ, PA) |
Home |
|
72 |
|
27 |
166.7% |
|
|
112 |
|
44 |
154.5% |
|
|
152 |
|
51 |
198.0% |
|
|
Dollars |
$37,860 |
$16,044 |
136.0% |
|
$70,650 |
$25,606 |
175.9% |
|
|
86,557 |
|
30,496 |
183.8% |
|
|
Avg. Price |
$525,833 |
$594,222 |
(11.5)% |
|
$630,804 |
$581,955 |
8.4% |
|
$569,454 |
$597,961 |
(4.8)% |
|
Mid-Atlantic |
|
|
|
|
|
|
|
|
|
|
(DE, MD, VA, WV) |
Home |
|
181 |
|
159 |
13.8% |
|
|
240 |
|
187 |
28.3% |
|
|
343 |
|
296 |
15.9% |
|
|
Dollars |
$86,296 |
$84,027 |
2.7% |
|
$135,866 |
$99,493 |
36.6% |
|
$193,387 |
$180,546 |
7.1% |
|
|
Avg. Price |
$476,773 |
$528,472 |
(9.8)% |
|
$566,108 |
$532,048 |
6.4% |
|
$563,810 |
$609,953 |
(7.6)% |
|
Midwest |
|
|
|
|
|
|
|
|
|
|
(IL, OH) |
Home |
|
177 |
|
146 |
21.2% |
|
|
232 |
|
222 |
4.5% |
|
|
450 |
|
394 |
14.2% |
|
|
Dollars |
$54,682 |
$44,167 |
23.8% |
|
$68,714 |
$67,395 |
2.0% |
|
$122,681 |
$107,149 |
14.5% |
|
|
Avg. Price |
$308,938 |
$302,514 |
2.1% |
|
$296,181 |
$303,581 |
(2.4)% |
|
$272,624 |
$271,952 |
0.2% |
|
Southeast |
|
|
|
|
|
|
|
|
|
|
(FL, GA, SC) |
Home |
|
179 |
|
106 |
68.9% |
|
|
193 |
|
185 |
4.3% |
|
|
282 |
|
251 |
12.4% |
|
|
Dollars |
$69,765 |
$41,126 |
69.6% |
|
|
76,414 |
|
72,828 |
4.9% |
|
$121,921 |
$108,137 |
12.7% |
|
|
Avg. Price |
$389,749 |
$387,981 |
0.5% |
|
$395,927 |
$393,665 |
0.6% |
|
$432,344 |
$430,825 |
0.4% |
|
Southwest |
|
|
|
|
|
|
|
|
|
|
(AZ, TX) |
Home |
|
496 |
|
371 |
33.7% |
|
|
621 |
|
554 |
12.1% |
|
|
663 |
|
523 |
26.8% |
|
|
Dollars |
$166,723 |
$123,485 |
35.0% |
|
$213,089 |
$193,000 |
10.4% |
|
$230,898 |
$180,854 |
27.7% |
|
|
Avg. Price |
$336,135 |
$332,844 |
1.0% |
|
$343,138 |
$348,375 |
(1.5)% |
|
$348,261 |
$345,801 |
0.7% |
|
West |
|
|
|
|
|
|
|
|
|
|
(CA) |
Home |
|
240 |
|
195 |
23.1% |
|
|
311 |
|
273 |
13.9% |
|
|
301 |
|
311 |
(3.2)% |
|
|
Dollars |
$102,460 |
$83,933 |
22.1% |
|
$127,413 |
$135,353 |
(5.9)% |
|
$124,700 |
$138,448 |
(9.9)% |
|
|
Avg. Price |
$426,917 |
$430,426 |
(0.8)% |
|
$409,688 |
$495,799 |
(17.4)% |
|
$414,286 |
$445,170 |
(6.9)% |
|
Consolidated Total |
|
|
|
|
|
|
|
|
|
|
|
Home |
|
1,345 |
|
1,004 |
34.0% |
|
|
1,709 |
|
1,465 |
16.7% |
|
|
2,191 |
|
1,826 |
20.0% |
|
|
Dollars |
$517,786 |
$392,782 |
31.8% |
|
$692,146 |
$593,675 |
16.6% |
|
$880,144 |
$745,630 |
18.0% |
|
|
Avg. Price |
$384,971 |
$391,217 |
(1.6)% |
|
$405,001 |
$405,238 |
(0.1)% |
|
$401,709 |
$408,341 |
(1.6)% |
|
Unconsolidated Joint Ventures (2) |
|
|
|
|
|
|
|
|
|
|
(excluding KSA JV) |
Home |
|
134 |
|
171 |
(21.6)% |
|
|
232 |
|
353 |
(34.3)% |
|
|
259 |
|
361 |
(28.3)% |
|
|
Dollars |
$80,126 |
$112,637 |
(28.9)% |
|
$145,098 |
$248,733 |
(41.7)% |
|
$161,807 |
|
230,682 |
(29.9)% |
|
|
Avg. Price |
$597,955 |
$658,696 |
(9.2)% |
|
$625,422 |
$704,626 |
(11.2)% |
|
$624,737 |
$639,008 |
(2.2)% |
|
Grand Total |
|
|
|
|
|
|
|
|
|
|
|
Home |
|
1,479 |
|
1,175 |
25.9% |
|
|
1,941 |
|
1,818 |
6.8% |
|
|
2,450 |
|
2,187 |
12.0% |
|
|
Dollars |
$597,912 |
$505,419 |
18.3% |
|
$837,244 |
$842,408 |
(0.6)% |
|
$1,041,951 |
$976,312 |
6.7% |
|
|
Avg. Price |
$404,268 |
$430,144 |
(6.0)% |
|
$431,347 |
$463,371 |
(6.9)% |
|
$425,286 |
$446,416 |
(4.7)% |
|
|
|
|
|
|
|
|
|
|
|
|
KSA JV Only |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home |
|
71 |
|
4 |
1,675.0% |
|
|
- |
|
11 |
(100.0)% |
|
|
202 |
|
5 |
3,940.0% |
|
|
Dollars |
|
$11,517 |
|
$719 |
1,501.8% |
|
|
$- |
|
$3,055 |
(100.0)% |
|
$32,316 |
$1,000 |
3,131.6% |
|
|
Avg. Price |
|
$162,211 |
|
$179,750 |
(9.8)% |
|
|
$- |
|
$277,725 |
(100.0)% |
|
$159,982 |
$200,000 |
(20.0)% |
|
|
|
|
|
|
|
|
|
|
|
|
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”. |
|
|
HOVNANIAN ENTERPRISES, INC. |
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE) |
(SEGMENT DATA EXCLUDES UNCONSOLIDATED JOINT
VENTURES) |
(UNAUDITED) |
|
Fiscal
Year - October 31, 2019 |
|
|
Contracts (1) |
Deliveries |
Contract |
|
|
Years Ended |
Years Ended |
Backlog |
|
|
October 31, |
October 31, |
October 31, |
|
|
|
2019 |
|
2018 |
% Change |
|
2019 |
|
2018 |
% Change |
|
2019 |
|
2018 |
% Change |
Northeast |
|
|
|
|
|
|
|
|
|
|
(NJ, PA) |
Home |
|
293 |
|
131 |
123.7% |
|
|
192 |
|
178 |
7.9% |
|
|
152 |
|
51 |
198.0% |
|
|
Dollars |
$172,950 |
$74,730 |
131.4% |
|
$116,889 |
$96,012 |
21.7% |
|
$86,557 |
|
30,496 |
183.8% |
|
|
Avg. Price |
$590,273 |
$570,458 |
3.5% |
|
$608,797 |
$539,393 |
12.9% |
|
$569,454 |
$597,961 |
(4.8)% |
|
Mid-Atlantic |
|
|
|
|
|
|
|
|
|
|
(DE, MD, VA, WV) |
Home |
|
728 |
|
640 |
13.8% |
|
|
652 |
|
672 |
(3.0)% |
|
|
343 |
|
296 |
15.9% |
|
|
Dollars |
$385,862 |
|
340,963 |
13.2% |
|
$356,674 |
$354,153 |
0.7% |
|
$193,387 |
$180,546 |
7.1% |
|
|
Avg. Price |
$530,030 |
$532,755 |
(0.5)% |
|
$547,046 |
$527,013 |
3.8% |
|
$563,810 |
$609,953 |
(7.6)% |
|
Midwest |
|
|
|
|
|
|
|
|
|
|
(IL, OH) |
Home |
|
736 |
|
674 |
9.2% |
|
|
680 |
|
662 |
2.7% |
|
|
450 |
|
394 |
14.2% |
|
|
Dollars |
|
219,266 |
$204,487 |
7.2% |
|
$203,734 |
$196,307 |
3.8% |
|
$122,681 |
$107,149 |
14.5% |
|
|
Avg. Price |
$297,916 |
$303,393 |
(1.8)% |
|
$299,609 |
$296,536 |
1.0% |
|
$272,624 |
$271,952 |
0.2% |
|
Southeast |
|
|
|
|
|
|
|
|
|
|
(FL, GA, SC) |
Home |
|
576 |
|
562 |
2.5% |
|
|
545 |
|
596 |
(8.6)% |
|
|
282 |
|
251 |
12.4% |
|
|
Dollars |
$233,645 |
$225,703 |
3.5% |
|
$219,860 |
$237,948 |
(7.6)% |
|
$121,921 |
$108,137 |
12.7% |
|
|
Avg. Price |
$405,634 |
$401,607 |
1.0% |
|
$403,413 |
$399,242 |
1.0% |
|
$432,344 |
$430,825 |
0.4% |
|
Southwest |
|
|
|
|
|
|
|
|
|
|
(AZ, TX) |
Home |
|
2,006 |
|
1,887 |
6.3% |
|
|
1,866 |
|
1,873 |
(0.4)% |
|
|
663 |
|
523 |
26.8% |
|
|
Dollars |
$677,244 |
$640,604 |
5.7% |
|
$627,201 |
$637,568 |
(1.6)% |
|
$230,898 |
$180,854 |
27.7% |
|
|
Avg. Price |
$337,609 |
$339,483 |
(0.6)% |
|
$336,121 |
$340,399 |
(1.3)% |
|
$348,261 |
$345,801 |
0.7% |
|
West |
|
|
|
|
|
|
|
|
|
|
(CA) |
Home |
|
1,001 |
|
777 |
28.8% |
|
|
1,011 |
|
866 |
16.7% |
|
|
301 |
|
311 |
(3.2)% |
|
|
Dollars |
$411,577 |
$348,726 |
18.0% |
|
$425,324 |
$384,240 |
10.7% |
|
$124,700 |
$138,448 |
(9.9)% |
|
|
Avg. Price |
$411,166 |
$448,811 |
(8.4)% |
|
$420,696 |
$443,695 |
(5.2)% |
|
$414,286 |
$445,170 |
(6.9)% |
|
Consolidated Total |
|
|
|
|
|
|
|
|
|
|
|
Home |
|
5,340 |
|
4,671 |
14.3% |
|
|
4,946 |
|
4,847 |
2.0% |
|
|
2,191 |
|
1,826 |
20.0% |
|
|
Dollars |
$2,100,544 |
|
1,835,213 |
14.5% |
|
$1,949,682 |
$1,906,228 |
2.3% |
|
$880,144 |
$745,630 |
18.0% |
|
|
Avg. Price |
$393,360 |
$392,895 |
0.1% |
|
$394,194 |
$393,280 |
0.2% |
|
$401,709 |
$408,341 |
(1.6)% |
|
Unconsolidated Joint Ventures (2) |
|
|
|
|
|
|
|
|
|
|
(excluding KSA JV) |
Home |
|
636 |
|
872 |
(27.1)% |
|
|
767 |
|
911 |
(15.8)% |
|
|
259 |
|
361 |
(28.3)% |
|
|
Dollars |
$398,476 |
$549,115 |
(27.4)% |
|
$483,697 |
$584,561 |
(17.3)% |
|
$161,807 |
|
230,682 |
(29.9)% |
|
|
Avg. Price |
$626,535 |
$629,719 |
(0.5)% |
|
$630,635 |
$641,670 |
(1.7)% |
|
$624,737 |
$639,008 |
(2.2)% |
|
Grand Total |
|
|
|
|
|
|
|
|
|
|
|
Home |
|
5,976 |
|
5,543 |
7.8% |
|
|
5,713 |
|
5,758 |
(0.8)% |
|
|
2,450 |
|
2,187 |
12.0% |
|
|
Dollars |
$2,499,020 |
$2,384,328 |
4.8% |
|
$2,433,379 |
$2,490,789 |
(2.3)% |
|
$1,041,951 |
$976,312 |
6.7% |
|
|
Avg. Price |
$418,176 |
$430,151 |
(2.8)% |
|
$425,937 |
$432,579 |
(1.5)% |
|
$425,286 |
$446,416 |
(4.7)% |
|
|
|
|
|
|
|
|
|
|
|
|
KSA JV Only |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home |
|
204 |
|
43 |
374.4% |
|
|
7 |
|
73 |
(90.4)% |
|
|
202 |
|
5 |
3,940.0% |
|
|
Dollars |
$32,943 |
$7,630 |
331.8% |
|
$1,627 |
$15,418 |
(89.4)% |
|
$32,316 |
$1,000 |
3,131.6% |
|
|
Avg. Price |
$161,485 |
$177,442 |
(9.0)% |
|
$232,429 |
$211,205 |
10.0% |
|
$159,982 |
$200,000 |
(20.0)% |
|
|
|
|
|
|
|
|
|
|
|
|
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”. |
|
|
HOVNANIAN ENTERPRISES, INC. |
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE) |
(SEGMENT DATA UNCONSOLIDATED JOINT VENTURES
ONLY) |
(UNAUDITED) |
|
|
Three Months - October 31, 2019 |
|
|
Contracts (1) |
Deliveries |
Contract |
|
|
Three Months Ended |
Three Months Ended |
Backlog |
|
|
October 31, |
October 31, |
October 31, |
|
|
|
2019 |
|
2018 |
% Change |
|
|
2019 |
|
2018 |
% Change |
|
|
2019 |
|
2018 |
% Change |
Northeast |
|
|
|
|
|
|
|
|
|
|
|
|
(unconsolidated joint ventures) |
Home |
|
47 |
|
64 |
(26.6)% |
|
|
82 |
|
165 |
(50.3)% |
|
|
76 |
|
114 |
(33.3)% |
|
(excluding KSA JV) |
Dollars |
$33,054 |
$53,876 |
(38.6)% |
|
$62,284 |
$135,768 |
(54.1)% |
|
$63,680 |
$93,366 |
(31.8)% |
|
(NJ, PA) |
Avg. Price |
$703,277 |
$841,813 |
(16.5)% |
|
$759,561 |
$822,836 |
(7.7)% |
|
$837,895 |
$819,000 |
2.3% |
|
Mid-Atlantic |
|
|
|
|
|
|
|
|
|
|
|
|
(unconsolidated joint ventures) |
Home |
|
11 |
|
13 |
(15.4)% |
|
|
26 |
|
36 |
(27.8)% |
|
|
21 |
|
24 |
(12.5)% |
|
(DE, MD, VA, WV) |
Dollars |
$5,862 |
$9,303 |
(37.0)% |
|
$15,816 |
$30,104 |
(47.5)% |
|
$11,121 |
$18,839 |
(41.0)% |
|
|
Avg. Price |
$532,909 |
$715,615 |
(25.5)% |
|
$608,308 |
$836,222 |
(27.3)% |
|
$529,571 |
$784,958 |
(32.5)% |
|
Midwest |
|
|
|
|
|
|
|
|
|
|
|
|
(unconsolidated joint ventures) |
Home |
|
4 |
|
11 |
(63.6)% |
|
|
3 |
|
21 |
(85.7)% |
|
|
3 |
|
9 |
(66.7)% |
|
(IL, OH) |
Dollars |
$1,800 |
$6,716 |
(73.2)% |
|
$1,400 |
$15,196 |
(90.8)% |
|
$1,285 |
$6,076 |
(78.9)% |
|
|
Avg. Price |
$450,000 |
$610,545 |
(26.3)% |
|
$466,667 |
$723,619 |
(35.5)% |
|
$428,333 |
$675,111 |
(36.6)% |
|
Southeast |
|
|
|
|
|
|
|
|
|
|
|
|
(unconsolidated joint ventures) |
Home |
|
31 |
|
40 |
(22.5)% |
|
|
60 |
|
41 |
46.3% |
|
|
88 |
|
122 |
(27.9)% |
|
(FL, GA, SC) |
Dollars |
$16,611 |
$21,496 |
(22.7)% |
|
$33,080 |
$20,159 |
64.1% |
|
$47,678 |
$63,254 |
(24.6)% |
|
|
Avg. Price |
$535,839 |
$537,400 |
(0.3)% |
|
$551,333 |
$491,683 |
12.1% |
|
$541,795 |
$518,475 |
4.5% |
|
Southwest |
|
|
|
|
|
|
|
|
|
|
|
|
(unconsolidated joint ventures) |
Home |
|
30 |
|
27 |
11.1% |
|
|
40 |
|
59 |
(32.2)% |
|
|
45 |
|
67 |
(32.8)% |
|
(AZ, TX) |
Dollars |
$18,347 |
$15,498 |
18.4% |
|
$24,793 |
$35,882 |
(30.9)% |
|
$28,318 |
$40,465 |
(30.0)% |
|
|
Avg. Price |
$611,567 |
$574,000 |
6.5% |
|
$619,825 |
$608,169 |
1.9% |
|
$629,289 |
$603,955 |
4.2% |
|
West |
|
|
|
|
|
|
|
|
|
|
|
|
(unconsolidated joint ventures) |
Home |
|
11 |
|
16 |
(31.3)% |
|
|
21 |
|
31 |
(32.3)% |
|
|
26 |
|
25 |
4.0% |
|
(CA) |
Dollars |
$4,452 |
$5,748 |
(22.5)% |
|
$7,725 |
$11,624 |
(33.5)% |
|
$9,725 |
$8,682 |
12.0% |
|
|
Avg. Price |
$404,727 |
$359,250 |
12.7% |
|
$367,857 |
$374,968 |
(1.9)% |
|
$374,038 |
$347,280 |
7.7% |
|
Unconsolidated Joint Ventures (2) |
|
|
|
|
|
|
|
|
|
|
|
|
(excluding KSA JV) |
Home |
|
134 |
|
171 |
(21.6)% |
|
|
232 |
|
353 |
(34.3)% |
|
|
259 |
|
361 |
(28.3)% |
|
|
Dollars |
$80,126 |
$112,637 |
(28.9)% |
|
$145,098 |
$248,733 |
(41.7)% |
|
$161,807 |
$230,682 |
(29.9)% |
|
|
Avg. Price |
$597,955 |
$658,696 |
(9.2)% |
|
$625,422 |
$704,626 |
(11.2)% |
|
$624,737 |
$639,008 |
(2.2)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KSA JV Only |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home |
|
71 |
|
4 |
1,675.0% |
|
|
- |
|
11 |
(100.0)% |
|
|
202 |
|
5 |
3,940.0% |
|
|
Dollars |
|
$11,517 |
|
$719 |
1,501.8% |
|
|
$- |
|
$3,055 |
(100.0)% |
|
|
$32,316 |
|
$1,000 |
3,131.6% |
|
|
Avg. Price |
|
$162,211 |
|
$179,750 |
(9.8)% |
|
|
$- |
|
$277,725 |
(100.0)% |
|
|
$159,982 |
|
$200,000 |
(20.0)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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”. |
|
|
HOVNANIAN ENTERPRISES, INC. |
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE) |
(SEGMENT DATA UNCONSOLIDATED JOINT VENTURES
ONLY) |
(UNAUDITED) |
|
|
Fiscal Year - October 31,
2019 |
|
|
Contracts |
Deliveries |
Contract |
|
|
Years Ended |
Years Ended |
Backlog |
|
|
October 31, |
October 31, |
October 31, |
|
|
|
2019 |
|
2018 |
% Change |
|
2019 |
|
2018 |
% Change |
|
2019 |
|
2018 |
% Change |
Northeast |
|
|
|
|
|
|
|
|
|
|
(unconsolidated joint ventures) |
Home |
|
235 |
|
281 |
(16.4)% |
|
|
273 |
|
349 |
(21.8)% |
|
|
76 |
|
114 |
(33.3)% |
|
(excluding KSA JV) |
Dollars |
$183,450 |
$223,559 |
(17.9)% |
|
$213,137 |
$278,085 |
(23.4)% |
|
$63,680 |
$93,366 |
(31.8)% |
|
(NJ, PA) |
Avg.
Price |
$780,638 |
$795,584 |
(1.9)% |
|
$780,722 |
$796,805 |
(2.0)% |
|
$837,895 |
$819,000 |
2.3% |
|
Mid-Atlantic |
|
|
|
|
|
|
|
|
|
|
(unconsolidated joint ventures) |
Home |
|
37 |
|
75 |
(50.7)% |
|
|
69 |
|
62 |
11.3% |
|
|
21 |
|
24 |
(12.5)% |
|
(DE, MD, VA, WV) |
Dollars |
$25,020 |
$59,967 |
(58.3)% |
|
$49,083 |
$52,237 |
(6.0)% |
|
$11,121 |
$18,839 |
(41.0)% |
|
|
Avg.
Price |
$676,216 |
$799,560 |
(15.4)% |
|
$711,348 |
$842,532 |
(15.6)% |
|
$529,571 |
$784,958 |
(32.5)% |
|
Midwest |
|
|
|
|
|
|
|
|
|
|
(unconsolidated joint ventures) |
Home |
|
16 |
|
39 |
(59.0)% |
|
|
22 |
|
57 |
(61.4)% |
|
|
3 |
|
9 |
(66.7)% |
|
(IL, OH) |
Dollars |
$8,272 |
$25,807 |
(67.9)% |
|
$13,063 |
$38,449 |
(66.0)% |
|
$1,285 |
$6,076 |
(78.9)% |
|
|
Avg.
Price |
$517,000 |
$661,718 |
(21.9)% |
|
$593,773 |
$674,544 |
(12.0)% |
|
$428,333 |
$675,111 |
(36.6)% |
|
Southeast |
|
|
|
|
|
|
|
|
|
|
(unconsolidated joint ventures) |
Home |
|
153 |
|
203 |
(24.6)% |
|
|
187 |
|
159 |
17.6% |
|
|
88 |
|
122 |
(27.9)% |
|
(FL, GA, SC) |
Dollars |
$82,141 |
$98,904 |
(16.9)% |
|
$97,718 |
$72,460 |
34.9% |
|
$47,678 |
$63,254 |
(24.6)% |
|
|
Avg.
Price |
$536,869 |
$487,212 |
10.2% |
|
$522,556 |
$455,723 |
14.7% |
|
$541,795 |
$518,475 |
4.5% |
|
Southwest |
|
|
|
|
|
|
|
|
|
|
(unconsolidated joint ventures) |
Home |
|
116 |
|
158 |
(26.6)% |
|
|
138 |
|
148 |
(6.8)% |
|
|
45 |
|
67 |
(32.8)% |
|
(AZ, TX) |
Dollars |
$70,802 |
$93,501 |
(24.3)% |
|
$82,948 |
$86,288 |
(3.9)% |
|
$28,318 |
$40,465 |
(30.0)% |
|
|
Avg.
Price |
$610,362 |
$591,778 |
3.1% |
|
$601,072 |
$583,027 |
3.1% |
|
$629,289 |
$603,955 |
4.2% |
|
West |
|
|
|
|
|
|
|
|
|
|
(unconsolidated joint ventures) |
Home |
|
79 |
|
116 |
(31.9)% |
|
|
78 |
|
136 |
(42.6)% |
|
|
26 |
|
25 |
4.0% |
|
(CA) |
Dollars |
$28,791 |
$47,377 |
(39.2)% |
|
$27,748 |
$57,042 |
(51.4)% |
|
$9,725 |
$8,682 |
12.0% |
|
|
Avg.
Price |
$364,443 |
$408,422 |
(10.8)% |
|
$355,744 |
$419,426 |
(15.2)% |
|
$374,038 |
$347,280 |
7.7% |
|
Unconsolidated Joint Ventures (2) |
|
|
|
|
|
|
|
|
|
|
(excluding KSA JV) |
Home |
|
636 |
|
872 |
(27.1)% |
|
|
767 |
|
911 |
(15.8)% |
|
|
259 |
|
361 |
(28.3)% |
|
|
Dollars |
$398,476 |
$549,115 |
(27.4)% |
|
$483,697 |
$584,561 |
(17.3)% |
|
$161,807 |
$230,682 |
(29.9)% |
|
|
Avg.
Price |
$626,535 |
$629,719 |
(0.5)% |
|
$630,635 |
$641,670 |
(1.7)% |
|
$624,737 |
$639,008 |
(2.2)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KSA JV Only |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home |
|
204 |
|
43 |
374.4% |
|
|
7 |
|
73 |
(90.4)% |
|
|
202 |
|
5 |
3,940.0% |
|
|
Dollars |
$32,943 |
|
$7,630 |
331.8% |
|
|
$1,627 |
|
$15,418 |
(89.4)% |
|
|
$32,316 |
|
$1,000 |
3,131.6% |
|
|
Avg.
Price |
$161,485 |
|
$177,442 |
(9.0)% |
|
|
$232,429 |
|
$211,205 |
10.0% |
|
|
$159,982 |
|
$200,000 |
(20.0)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 Sorsby |
Jeffrey T. O’Keefe |
|
Executive Vice President & CFO |
Vice President, Investor Relations |
|
732-747-7800 |
732-747-7800 |
|
|
|
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