Understood. They also said income between 40m and 100m FY16. Which has since been cut to 25m - 50m. ..But lets assume 2017 all quarters are profitable. They would need to make a large amount of money in 2018 to pay off the 2019 maturities.
My assumption is HOV is carrying forward the 2B NOLs until after the 2017 debt maturities are paid off. With $400 million in 2019 and $797 million in 2020 coming due, they must make money within that year and half (end of 2017 and 2018) to pay off the approx. 1B in maturities. Will HOV even have enough cash to payoff $121 million in January 2017? or$86 million in December 2017?
I agree. With revenue up 40% I still don't understand how they lost money. What contributed to the loss this quarter even though revenue was 40%?
Understood. And perhaps "stupid" was the wrong word to describe their performance. Incompetent is accurate. Since top management and Ara hold thousand of shares, I could only assume they would prefer the company and stock price to improve, which in return would line their pockets even more. If management salaries is one highly visible item that could be reduced to improve the company, why don't any of the analysis during the conference calls address this issue?
I understand your comment, however if it were that easy, is It safe to assume management is purposely missing the numbers or simply that stupid?
Each of the last few quarterly conference calls sound the same - Not happy with the previous quarter results, but happy with the direction of the company. We are doing everything we can to maximize profitability etc....The cut in fiscal year income hurts. Management seems to come up short every quarter.
“While our revenue grew 40% and Adjusted EBITDA increased over 220%, as we
said last quarter, we remain focused on deleveraging our balance sheet and
maximizing our profitability rather than on additional growth,” stated Ara
K. Hovnanian, Chairman of the Board, President and Chief Executive Officer.
“Along with increasing our land and land development spend during the second
quarter to $187 million, we have taken the steps we outlined in March to
increase our cash position and paid off the $87 million principal amount of
debt that matured on May 15, 2016. Since October 15, 2015, we have paid off
$320 million of debt. More importantly, we continue to believe that we will
have the liquidity to pay off the remaining debt maturities through the end of
2017. We are certain that we are taking the correct steps that will best
position our company for future success. While it is discouraging to report a
loss for the first half of fiscal 2016, it is nevertheless a significantly
reduced loss, and we anticipate our profitability in the second half of the
year will more than offset this loss.”
Total revenues were $654.7 million in the second quarter of fiscal 2016, an
increase of 39.6% compared with $468.9 million in the second quarter of fiscal
2015. For the six months ended April 30, 2016, total revenues increased 34.5%
to $1.23 billion compared with $914.7 million in the first half of the prior
Lets not forget Ara repeatedly stated 2016 was going to be a "Break Out Year" (perhaps all he means is be profitable). What ever that means to him, we shall see.