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Hovnanian Enterprises Reports Fiscal 2020 Fourth Quarter and Full Year Results

Fourth Quarter Gross Margin I ncreased 290 B asis P oints
$ 9 5 Mil lion Year-over-Year Improvement in Fiscal 2020 Pretax Income
61% Year-over-Year Increase in Consolidated Backlog Dollars at Year End to $1.42 Billion
Fourth Quarter Consolidated Contracts per Community Improved 74% Year-over-Year

MATAWAN, N.J., Dec. 09, 2020 (GLOBE NEWSWIRE) -- Hovnanian Enterprises, Inc. (NYSE: HOV), a leading national homebuilder, reported results for its fiscal fourth quarter and year ended October 31, 2020.

RESULTS FOR THE FOURTH QUARTER AND YEAR ENDED OCTOBER 31, 2020:

  • Total revenues were $683.4 million in the fourth quarter of fiscal 2020, compared with $713.6 million, a decrease of 4.2%, in the same period of the prior year. For the year ended October 31, 2020, total revenues increased 16.2% to $2.34 billion compared with $2.02 billion in the prior fiscal year.

  • Homebuilding gross margin percentage, after cost of sales interest expense and land charges, increased 290 basis points to 17.4% for the three months ended October 31, 2020 compared with 14.5% during the same period a year ago. During fiscal 2020, homebuilding gross margin percentage, after cost of sales interest expense and land charges, was 14.7% compared with 14.2% last year.

  • Homebuilding gross margin percentage, before cost of sales interest expense and land charges, increased 130 basis points to 20.2% during the fiscal 2020 fourth quarter compared with 18.9% in last years fourth quarter. For the year ended October 31, 2020, homebuilding gross margin percentage, before cost of sales interest expense and land charges, was 18.4% compared with 18.1% in the prior year.

  • Total SG&A was $65.6 million, or 9.6% of total revenues, in the fiscal 2020 fourth quarter compared with $53.9 million, or 7.6% of total revenues, in the previous years fourth quarter. During fiscal 2020, total SG&A was $241.8 million, or 10.3% of total revenues, compared with $233.1 million, or 11.6% of total revenues, in the prior fiscal year.

  • Total interest expense was $40.6 million for the fourth quarter of fiscal 2020 compared with $50.3 million during the fourth quarter of fiscal 2019. For the year ended October 31, 2020, total interest expense was $178.1 million compared with $160.8 million last year.

  • Income from unconsolidated joint ventures was $3.1 million for the fourth quarter ended October 31, 2020 compared with $8.4 million in the fiscal 2019 fourth quarter. For fiscal 2020, income from unconsolidated joint ventures was $16.6 million compared with $28.9 million a year ago.

  • Income before income taxes for the fourth quarter of fiscal 2020 was $42.4 million compared with a loss of $0.6 million in the fourth quarter of the prior fiscal year. For fiscal 2020, income before income taxes was $55.4 million compared with a loss of $39.7 million during fiscal 2019.

  • Adjusted pretax income, which is income before income taxes excluding land-related charges, joint venture write-downs and gain or loss on extinguishment of debt, was $45.1 million in the fourth quarter of fiscal 2020 compared with income before these items of $44.5 million in the fiscal 2019 fourth quarter. For the year ended October 31, 2020, adjusted pretax income was $50.9 million compared with income before these items of $9.9 million during fiscal 2019.

  • Net income was $40.6 million, or $5.54 per diluted common share, for the three months ended October 31, 2020 compared with a net loss of $1.8 million, or $0.30 per common share, in the fourth quarter of the previous fiscal year. For fiscal 2020, net income was $50.9 million, or $7.03 per diluted common share, compared with a net loss of $42.1 million, or $7.06 per common share, in fiscal 2019.

  • EBITDA increased 65.9% to $84.5 million for the fourth quarter of fiscal 2020 compared with $50.9 million in the same quarter of the prior year. For fiscal 2020, EBITDA increased 90.6% to $238.8 million compared with $125.3 million in fiscal 2019.

  • Financial services income before income taxes was $12.1 million for the fourth quarter of fiscal 2020, up 34.1% compared with $9.0 million in the fourth quarter of fiscal 2019. For fiscal 2020, financial services income before income taxes was $32.1 million, up 82.1% compared with $17.6 million one year ago.

  • Consolidated contracts per community increased 73.7% to 16.5 contracts per community for the fourth quarter ended October 31, 2020 compared with 9.5 contracts per community in last years fourth quarter. Contracts per community, including domestic unconsolidated joint ventures (1) , increased 74.7% to 15.9 for the fourth quarter of fiscal 2020 compared with 9.1 for the fourth quarter of fiscal 2019.

  • The number of consolidated contracts increased 42.6% to 1,918 homes during the fiscal 2020 fourth quarter, compared with 1,345 homes in last years fourth quarter. The number of contracts, including domestic unconsolidated joint ventures, for the three months ended October 31, 2020, increased 44.9% to 2,143 homes from 1,479 homes during the same quarter a year ago.

  • For fiscal 2020, the number of consolidated contracts increased 30.2% to 6,953 homes compared with 5,340 homes in fiscal 2019. The number of contracts, including domestic unconsolidated joint ventures, for the year ended October 31, 2020, increased 28.7% to 7,692 homes from 5,976 homes a year ago.

  • As of the end of the fourth quarter of fiscal 2020, community count, including domestic unconsolidated joint ventures, was 135 communities, compared with 162 communities at October 31, 2019. Consolidated community count was 116 as of October 31, 2020, compared with 141 communities at the end of the previous years fourth quarter. The decline was primarily a result of selling out of communities at a faster than anticipated pace, 15 delayed community openings and contributing four consolidated communities to unconsolidated joint ventures earlier this year.

  • For November 2020, consolidated contracts per community increased 48.3% to 4.3 compared with 2.9 for the same month one year ago. During November 2020, the number of consolidated contracts increased 22.0% to 493 homes from 404 homes in November 2019.

  • The dollar value of consolidated contract backlog, as of October 31, 2020, increased 61.3% to $1.42 billion compared with $880.1 million as of October 31, 2019. The dollar value of contract backlog, including domestic unconsolidated joint ventures, as of October 31, 2020, increased 54.0% to $1.60 billion compared with $1.04 billion as of October 31, 2019.

  • Consolidated deliveries were 1,572 homes in the fiscal 2020 fourth quarter compared with 1,709 homes in the previous years fourth quarter. For the fiscal 2020 fourth quarter, deliveries, including domestic unconsolidated joint ventures, were 1,735 homes compared with 1,941 homes during the fourth quarter of fiscal 2019.

  • For fiscal 2020, consolidated deliveries increased 15.0% to 5,686 homes compared with 4,946 homes in the previous year. For fiscal 2020, deliveries, including domestic unconsolidated joint ventures, increased 12.3% to 6,414 homes compared with 5,713 homes during fiscal 2019.

  • The contract cancellation rate for consolidated contracts was 18% for the fourth quarter ended October 31, 2020 compared with 21% in the fiscal 2019 fourth quarter. The contract cancellation rate for contracts including domestic unconsolidated joint ventures was 17% for the fourth quarter of fiscal 2020 compared with 22% in the fourth quarter of the prior year.

(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).

LIQUIDITY AND INVENTORY AS OF OCTOBER 31, 20 20 :

  • During the fourth quarter of fiscal 2020, land and land development spending was $229.3 million, an increase compared with $162.8 million in last years fourth quarter. For the year ended October 31, 2020, land and land development spending was $624.2 million compared with $562.8 million one year ago.

  • Total liquidity at the end of the fourth quarter of fiscal 2020 was $399.1 million, significantly above our targeted liquidity range of $170 million to $245 million.

  • In the fourth quarter of fiscal 2020, 2,400 lots were put under option or acquired in 28 consolidated communities.

  • As of October 31, 2020, consolidated lots controlled totaled 26,049, which, based on trailing twelve-month deliveries, equaled a 4.6 years supply.

COMMENTS FROM MANAGEMENT:

We are pleased with our results for the fourth quarter of fiscal 2020. Our total revenues, gross margin percentage, adjusted EBITDA and adjusted pretax income exceeded the guidance that we gave on our third quarter conference call, stated Ara K. Hovnanian, Chairman of the Board, President and Chief Executive Officer. Demand for new homes remains strong due to historically low interest rates, a limited supply of existing homes, favorable demographic trends and strong consumer demand. Starting in June, we pivoted to increasing home prices, consciously trading off a slightly lower sales pace for improved margins, said Mr. Hovnanian.

Looking back on the full year results, the $55 million of pretax income for fiscal 2020 was the highest level of full year profitability we achieved since fiscal 2006. Given our $1.4 billion consolidated contract backlog, more than 60% ahead of last year, we expect that fiscal 2021 will be a year when we can grow our revenues to between $2.5 and $2.7 billion, achieve more operating efficiencies and further improve our profitability, stated Mr. Hovnanian. We currently control all the lots needed to meet our growth expectations in fiscal 2021. Furthermore, we control almost 90% of the lots needed to meet our delivery objectives for fiscal 2022. After ending the year with $399 million of liquidity, significantly above our targeted range, our land acquisition teams remain busy securing additional land parcels to achieve our home delivery goals for fiscal 2022 and beyond, concluded Mr. Hovnanian.

WEBCAST INFORMATION:

Hovnanian Enterprises will webcast its fiscal 2020 fourth quarter financial results conference call at 11:00 a.m. E.T. on Wednesday, December 9, 2020. 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 nations 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 Companys homes are marketed and sold under the trade name K. Hovnanian ®  Homes. Additionally, the Companys subsidiaries, as developers of K. Hovnanians ®  Four Seasons communities, make the Company one of the nations 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 (gain) on extinguishment of debt (Adjusted EBITDA) are not U.S. generally accepted accounting principles (GAAP) financial measures. The most directly comparable GAAP financial measure is net income (loss). The reconciliation for historical periods of EBIT, EBITDA and Adjusted EBITDA to net income (loss) is presented in a table attached to this earnings release.

Homebuilding gross margin, before 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.

Adjusted pretax income, which is defined as income before income taxes excluding land-related charges, joint venture write-downs and loss (gain) on extinguishment of debt is a non-GAAP financial measure. The most directly comparable GAAP financial measure is income (loss) before income taxes. The reconciliation for historical periods of adjusted pretax income to income (loss) before income taxes is presented in a table attached to this earnings release.

Total liquidity is comprised of $262.5 million of cash and cash equivalents, $11.6 million of restricted cash required to collateralize letters of credit and $125.0 million availability under the senior secured revolving credit facility as of October 31, 2020.

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 Companys 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) t he outbreak and spread of COVID-19 and the measures that governments, agencies, law enforcement and/ or health authorities implement to address it ; (2 ) changes in general and local economic, industry and business conditions and impacts of a significant homebuilding downturn; ( 3 ) adverse weather and other environmental conditions and natural disasters; ( 4 ) the seasonality of the Companys business; ( 5 ) the availability and cost of suitable land and improved lots and sufficient liquidity to invest in such land and lots; ( 6 ) shortages in, and price fluctuations of, raw materials and labor , including due to changes in trade policies and the imposition of tariffs and duties on homebuilding materials and products and related trade disputes with , and retaliatory measures taken by , other countries; ( 7 ) reliance on, and the performance of, subcontractors; ( 8 ) 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; ( 9 ) increases in cancellations of agreements of sale; ( 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 ) legal claims brought against us and not resolved in our favor, such as product liability litigation, warranty claims and claims made by mortgage investors; ( 13 ) levels of competition; ( 14 ) utility shortages and outages or rate fluctuations; ( 15 ) information technology failures and data security breaches; ( 16 ) negative publicity; (17) high leverage and restrictions on the Companys operations and activities imposed by the agreements governing the Companys outstanding indebtedness; (18) availability and terms of financing to the Company; (19) the Companys sources of liquidity; (20) changes in credit ratings; (21) government regulation, including regulations concerning development of land, the home building, sales and customer financing processes, tax laws and the environment; (22) operations through unconsolidated joint ventures with third parties; (23) significant influence of the Companys controlling stockholders; (24) availability of net operating loss carryforwards; (25) loss of key management personnel or failure to attract qualified personnel; and (2 6 ) certain risks, uncertainties and other factors described in detail in the Companys Annual Report on Form 10-K for the fiscal year ended October 31, 2019 and the Companys Quarterly Reports on Form 10-Q for the quarterly periods during fiscal 2020 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.

Hovnanian Enterprises, Inc.

October 31, 2020

Statements of consolidated operations

(In thousands, except per share data)

 

 

 

 

Three Months Ended

 

Year Ended

 

 

 

 

October 31,

 

October 31,

 

 

 

 

 

2020

 

 

 

2019

 

 

 

2020

 

 

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

(Unaudited)

Total revenues

$683,358

 

 

$713,590

 

 

$2,343,901

 

 

$2,016,916

 

Costs and expenses (1)

 

644,060

 

 

 

680,116

 

 

 

2,318,400

 

 

 

2,043,080

 

(Loss) gain on extinguishment of debt

 

-

 

 

 

(42,436

)

 

 

13,337

 

 

 

(42,436

)

Income from unconsolidated joint ventures

 

3,146

 

 

 

8,376

 

 

 

16,565

 

 

 

28,932

 

Income (loss) before income taxes

 

42,444

 

 

 

(586

)

 

 

55,403

 

 

 

(39,668

)

Income tax provision

 

1,810

 

 

 

1,221

 

 

 

4,475

 

 

 

2,449

 

Net income (loss)

$40,634

 

 

$(1,807

)

 

$50,928

 

 

$(42,117

)

 

Per share data:

 

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

 

 

 

Net income (loss) per common share

$5.97

 

 

$(0.30

)

 

$7.48

 

 

$(7.06

)

 

Weighted average number of

 

 

 

 

 

 

 

 

 

common shares outstanding (2)

 

6,221

 

 

 

5,982

 

 

 

6,189

 

 

 

5,968

 

Assuming dilution:

 

 

 

 

 

 

 

 

Net income (loss) per common share

$5.54

 

 

$(0.30

)

 

$7.03

 

 

$(7.06

)

 

Weighted average number of

 

 

 

 

 

 

 

 

 

common shares outstanding (2)

 

6,699

 

 

 

5,982

 

 

 

6,584

 

 

 

5,968

 

 

 

 

 

 

 

 

 

 

 

 

(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, 2020

Reconciliation of income before income taxes excluding land-related charges, joint venture write-downs and loss (gain) on extinguishment of debt to income (loss) before income taxes

(In thousands)

 

 

 

 

Three Months Ended

 

Year Ended

 

 

 

 

October 31,

 

October 31,

 

 

 

 

 

2020

 

 

 

2019

 

 

 

2020

 

 

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

(Unaudited)

Income (loss) before income taxes

$42,444

 

 

$(586

)

 

$55,403

 

 

$(39,668

)

Inventory impairment loss and land option write-offs

 

2,611

 

 

 

2,687

 

 

 

8,813

 

 

 

6,288

 

Unconsolidated joint venture investment write-downs

 

-

 

 

 

-

 

 

 

-

 

 

 

854

 

Loss (gain) on extinguishment of debt

 

-

 

 

 

42,436

 

 

 

(13,337

)

 

 

42,436

 

Income before income taxes excluding land-related charges, joint venture write-downs and loss (gain) on extinguishment of debt (1)

$45,055

 

 

$44,537

 

 

$50,879

 

 

$9,910

 

 

(1) Income before income taxes excluding land-related charges, joint venture write-downs and loss (gain) on extinguishment of debt is a non-GAAP financial measure. The most directly comparable GAAP financial measure is income (loss) before income taxes.

 

Hovnanian Enterprises, Inc.

 

October 31, 2020

 

Gross margin

 

(In thousands)

 

 

 

Homebuilding Gross Margin

 

Homebuilding Gross Margin

 

 

Three Months Ended

 

Year Ended

 

 

October 31,

 

October 31,

 

 

 

2020

 

 

 

2019

 

 

 

2020

 

 

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

(Unaudited)

Sale of homes

 

$643,516

 

 

$692,146

 

 

$2,252,029

 

 

$1,949,682

 

Cost of sales, excluding interest expense and land charges (1)

 

 

513,416

 

 

 

561,284

 

 

 

1,837,332

 

 

 

1,596,237

 

Homebuilding gross margin, before cost of sales interest expense and land charges (2)

 

 

130,100

 

 

 

130,862

 

 

 

414,697

 

 

 

353,445

 

Cost of sales interest expense, excluding land sales interest expense

 

 

15,707

 

 

 

27,556

 

 

 

74,174

 

 

 

70,520

 

Homebuilding gross margin, after cost of sales interest expense, before land charges (2)

 

 

114,393

 

 

 

103,306

 

 

 

340,523

 

 

 

282,925

 

Land charges

 

 

2,611

 

 

 

2,687

 

 

 

8,813

 

 

 

6,288

 

Homebuilding gross margin

 

$111,782

 

 

$100,619

 

 

$331,710

 

 

$276,637

 

 

 

 

 

 

 

 

 

 

Homebuilding gross margin percentage

 

 

17.4

%

 

 

14.5

%

 

 

14.7

%

 

 

14.2

%

Homebuilding gross margin percentage, before cost of sales interest expense and land charges (2)

 

 

20.2

%

 

 

18.9

%

 

 

18.4

%

 

 

18.1

%

Homebuilding gross margin percentage, after cost of sales interest expense, before land charges (2)

 

 

17.8

%

 

 

14.9

%

 

 

15.1

%

 

 

14.5

%

 

 

 

Land Sales Gross Margin

 

Land Sales Gross Margin

 

 

Three Months Ended

 

Year Ended

 

 

October 31,

 

October 31,

 

 

 

2020

 

 

 

2019

 

 

 

2020

 

 

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

(Unaudited)

Land and lot sales

 

$16,805

 

 

$1,161

 

 

$16,905

 

 

$9,211

 

Land and lot sales cost of sales, excluding interest and land charges (1)

 

 

10,993

 

 

 

1,150

 

 

 

11,154

 

 

 

8,540

 

Land and lot sales gross margin, excluding interest and land charges

 

 

5,812

 

 

 

11

 

 

 

5,751

 

 

 

671

 

Land and lot sales interest

 

 

84

 

 

 

-

 

 

 

156

 

 

 

205

 

Land and lot sales gross margin, including interest and excluding land charges

 

$5,728

 

 

$11

 

 

$5,595

 

 

$466

 

 

 

(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.

 

Hovnanian Enterprises, Inc.

October 31, 2020

Reconciliation of adjusted EBITDA to net income (loss)

(Dollars in thousands)

 

Three Months Ended

 

Year Ended

 

October 31,

 

October 31,

 

 

2020

 

 

 

2019

 

 

 

2020

 

 

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

(Unaudited)

Net income (loss)

$40,634

 

 

$(1,807

)

 

$50,928

 

 

$(42,117

)

Income tax provision

 

1,810

 

 

 

1,221

 

 

 

4,475

 

 

 

2,449

 

Interest expense

 

40,648

 

 

 

50,299

 

 

 

178,131

 

 

 

160,781

 

EBIT (1)

 

83,092

 

 

 

49,713

 

 

 

233,534

 

 

 

121,113

 

Depreciation and amortization

 

1,407

 

 

 

1,230

 

 

 

5,304

 

 

 

4,172

 

EBITDA (2)

 

84,499

 

 

 

50,943

 

 

 

238,838

 

 

 

125,285

 

Inventory impairment loss and land option write-offs

 

2,611

 

 

 

2,687

 

 

 

8,813

 

 

 

6,288

 

Loss (gain) on extinguishment of debt

 

-

 

 

 

42,436

 

 

 

(13,337

)

 

 

42,436

 

Adjusted EBITDA (3)

$87,110

 

 

$96,066

 

 

$234,314

 

 

$174,009

 

 

 

 

 

 

 

 

 

Interest incurred

$41,660

 

 

$43,566

 

 

$176,457

 

 

$165,906

 

 

 

 

 

 

 

 

 

Adjusted EBITDA to interest incurred

 

2.09

 

 

 

2.21

 

 

 

1.33

 

 

 

1.05

 

 

(1) EBIT is a non-GAAP financial measure. The most directly comparable GAAP financial measure is net income (loss). EBIT represents earnings before interest expense and income taxes.

 

(2) EBITDA is a non-GAAP financial measure. The most directly comparable GAAP financial measure is net income (loss). EBITDA represents earnings before interest expense, income taxes, depreciation and amortization.

 

(3) Adjusted EBITDA is a non-GAAP financial measure. The most directly comparable GAAP financial measure is net income (loss). Adjusted EBITDA represents earnings before interest expense, income taxes, depreciation, amortization, inventory impairment loss and land option write-offs and loss (gain) on extinguishment of debt.

 

 

Hovnanian Enterprises, Inc.

October 31, 2020

Interest incurred, expensed and capitalized

(In thousands)

 

Three Months Ended

 

Year Ended

 

October 31,

 

October 31,

 

 

2020

 

 

 

2019

 

 

 

2020

 

 

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

(Unaudited)

Interest capitalized at beginning of period

$63,998

 

 

$77,997

 

 

$71,264

 

 

$68,117

 

Plus interest incurred

 

41,660

 

 

 

43,566

 

 

 

176,457

 

 

 

165,906

 

Less interest expensed

 

40,648

 

 

 

50,299

 

 

 

178,131

 

 

 

160,781

 

Less interest contributed to unconsolidated joint venture (1)

 

-

 

 

 

-

 

 

 

4,580

 

 

 

1,978

 

Interest capitalized at end of period (2)

$65,010

 

 

$71,264

 

 

$65,010

 

 

$71,264

 

 

(1) Represents capitalized interest which was included as part of the assets contributed to the joint ventures the Company entered into in December 2019 and June 2019 during the years ended October 31, 2020 and 2019, respectively. There was no impact to the Consolidated Statement of Operations as a result of these transactions.

 

(2) Capitalized interest amounts are shown gross before allocating any portion of impairments to capitalized interest.


HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)

 

October 31,

 

 

October 31,

 

(In thousands)

2020

 

 

2019

 

ASSETS

 

 

 

 

 

 

Homebuilding:

 

 

 

 

 

 

Cash and cash equivalents

$262,489

 

 

 

$130,976

 

Restricted cash and cash equivalents

14,731

 

 

 

20,905

 

Inventories:

 

 

 

 

 

 

Sold and unsold homes and lots under development

921,594

 

 

 

993,647

 

Land and land options held for future development or sale

91,957

 

 

 

108,565

 

Consolidated inventory not owned

182,224

 

 

 

190,273

 

Total inventories

1,195,775

 

 

 

1,292,485

 

Investments in and advances to unconsolidated joint ventures

103,164

 

 

 

127,038

 

Receivables, deposits and notes, net

33,686

 

 

 

44,914

 

Property, plant and equipment, net

18,185

 

 

 

20,127

 

Prepaid expenses and other assets

58,705

 

 

 

45,704

 

Total homebuilding

1,686,735

 

 

 

1,682,149

 

 

 

 

 

 

 

 

Financial services

140,607

 

 

 

199,275

 

Total assets

$1,827,342

 

 

 

$1,881,424

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Homebuilding:

 

 

 

 

 

 

Nonrecourse mortgages secured by inventory, net of debt issuance costs

$135,122

 

 

$203,585

 

Accounts payable and other liabilities

359,274

 

 

 

320,193

 

Customers deposits

48,286

 

 

 

35,872

 

Liabilities from inventory not owned, net of debt issuance costs

131,204

 

 

 

141,033

 

Senior notes and credit facilities (net of discount, premium and debt issuance costs)

1,431,110

 

 

 

1,479,990

 

Accrued interest

35,563

 

 

 

19,081

 

Total homebuilding

2,140,559

 

 

 

2,199,754

 

 

 

 

 

 

 

 

Financial services

119,045

 

 

 

169,145

 

Income taxes payable

3,832

 

 

 

2,301

 

Total liabilities

2,263,436

 

 

 

2,371,200

 

 

 

 

 

 

 

 

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, 2020 and 2019

135,299

 

 

 

135,299

 

Common stock, Class A, $0.01 par value - authorized 16,000,000 shares; issued 5,990,310 shares at October 31, 2020 and 5,973,727 shares at October 31, 2019

60

 

 

 

60

 

Common stock, Class B, $0.01 par value (convertible to Class A at time of sale) - authorized 2,400,000 shares; issued 649,886 shares at October 31, 2020 and 650,363 shares at October 31, 2019

7

 

 

 

7

 

Paid in capital - common stock

718,110

 

 

 

715,504

 

Accumulated deficit

(1,175,045

)

 

 

(1,225,973

)

Treasury stock - at cost 470,430 shares of Class A common stock and 27,669 shares of Class B common stock at October 31, 2020 and 2019

(115,360

)

 

 

(115,360

)

Total Hovnanian Enterprises, Inc. stockholders equity deficit

(436,929

)

 

 

(490,463

)

Noncontrolling interest in consolidated joint ventures

835

 

 

 

687

 

Total equity deficit

(436,094

)

 

 

(489,776

)

Total liabilities and equity

$1,827,342

 

 

 

$1,881,424

 


HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands Except Per Share Data)
(Unaudited)

 

Three Months Ended October 31,

 

 

Year Ended October 31,

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Homebuilding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sale of homes

$643,516

 

 

 

$692,146

 

 

 

$2,252,029

 

 

 

$1,949,682

 

Land sales and other revenues

 

17,350

 

 

 

 

1,971

 

 

 

 

19,710

 

 

 

 

13,082

 

Total homebuilding

 

660,866

 

 

 

 

694,117

 

 

 

 

2,271,739

 

 

 

 

1,962,764

 

Financial services

 

22,492

 

 

 

 

19,473

 

 

 

 

72,162

 

 

 

 

54,152

 

Total revenues

 

683,358

 

 

 

 

713,590

 

 

 

 

2,343,901

 

 

 

 

2,016,916

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Homebuilding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales, excluding interest

 

524,409

 

 

 

 

562,434

 

 

 

 

1,848,486

 

 

 

 

1,604,777

 

Cost of sales interest

 

15,791

 

 

 

 

27,556

 

 

 

 

74,330

 

 

 

 

70,725

 

Inventory impairment loss and land option write-offs

 

2,611

 

 

 

 

2,687

 

 

 

 

8,813

 

 

 

 

6,288

 

Total cost of sales

 

542,811

 

 

 

 

592,677

 

 

 

 

1,931,629

 

 

 

 

1,681,790

 

Selling, general and administrative

 

39,374

 

 

 

 

36,310

 

 

 

 

161,261

 

 

 

 

166,784

 

Total homebuilding expenses

 

582,185

 

 

 

 

628,987

 

 

 

 

2,092,890

 

 

 

 

1,848,574

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial services

 

10,383

 

 

 

 

10,446

 

 

 

 

40,060

 

 

 

 

36,525

 

Corporate general and administrative

 

26,213

 

 

 

 

17,572

 

 

 

 

80,553

 

 

 

 

66,364

 

Other interest

 

24,857

 

 

 

 

22,743

 

 

 

 

103,801

 

 

 

 

90,056

 

Other operations

 

422

 

 

 

 

368

 

 

 

 

1,096

 

 

 

 

1,561

 

Total expenses

 

644,060

 

 

 

 

680,116

 

 

 

 

2,318,400

 

 

 

 

2,043,080

 

(Loss) gain on extinguishment of debt

 

-

 

 

 

 

(42,436

)

 

 

 

13,337

 

 

 

 

(42,436

)

Income from unconsolidated joint ventures

 

3,146

 

 

 

 

8,376

 

 

 

 

16,565

 

 

 

 

28,932

 

Income (loss) before income taxes

 

42,444

 

 

 

 

(586

)

 

 

 

55,403

 

 

 

 

(39,668

)

State and federal income tax provision:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

State

 

1,810

 

 

 

 

1,221

 

 

 

 

4,475

 

 

 

 

2,449

 

Federal

 

-

 

 

 

 

-

 

 

 

 

-

 

 

 

 

-

 

Total income taxes

 

1,810

 

 

 

 

1,221

 

 

 

 

4,475

 

 

 

 

2,449

 

Net income (loss)

$40,634

 

 

 

$(1,807

)

 

 

$50,928

 

 

 

$(42,117

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per share data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per common share

$5.97

 

 

 

$(0.30

)

 

 

$7.48

 

 

 

$(7.06

)

Weighted-average number of common shares outstanding

 

6,221

 

 

 

 

5,982

 

 

 

 

6,189

 

 

 

 

5,968

 

Assuming dilution:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per common share

$5.54

 

 

 

$(0.30

)

 

 

$7.03

 

 

 

$(7.06

)

Weighted-average number of common shares outstanding

 

6,699

 

 

 

 

5,982

 

 

 

 

6,584

 

 

 

 

5,968

 

 

HOVNANIAN ENTERPRISES, INC.

(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE)

(SEGMENT DATA EXCLUDES UNCONSOLIDATED JOINT VENTURES)

(UNAUDITED)

 

 

 

Contracts (1)

Deliveries

Contract

 

 

Three Months Ended

Three Months Ended

Backlog

 

 

October 31,

October 31,

October 31,

 

 

 

2020

 

2019

% Change

 

2020

 

2019

% Change

 

2020

 

2019

% Change

Northeast

 

 

 

 

 

 

 

 

 

 

(NJ , PA )

Home

 

95

 

72

31.9%

 

 

78

 

112

(30.4)%

 

 

130

 

152

(14.5)%

 

 

Dollars

$63,326

$37,860

67.3%

 

$42,218

$70,650

(40.2)%

 

$82,111

$86,557

(5.1)%

 

 

Avg. Price

$666,589

$525,833

26.8%

 

$541,256

$630,804

(14.2)%

 

$631,623

$569,454

10.9%

 

Mid-Atlantic

 

 

 

 

 

 

 

 

 

 

(DE, MD, VA, WV)

Home

 

253

 

181

39.8%

 

 

219

 

240

(8.8)%

 

 

557

 

343

62.4%

 

 

Dollars

$135,364

$86,296

56.9%

 

$114,221

$135,866

(15.9)%

 

$291,115

$193,387

50.5%

 

 

Avg. Price

$535,036

$476,773

12.2%

 

$521,557

$566,108

(7.9)%

 

$522,648

$563,810

(7.3)%

 

Midwest

 

 

 

 

 

 

 

 

 

 

(IL, OH)

Home

 

249

 

177

40.7%

 

 

187

 

232

(19.4)%

 

 

596

 

450

32.4%

 

 

Dollars

$79,999

$54,682

46.3%

 

$59,498

$68,714

(13.4)%

 

$169,517

$122,681

38.2%

 

 

Avg. Price

$321,281

$308,938

4.0%

 

$318,171

$296,181

7.4%

 

$284,424

$272,624

4.3%

 

Southeast

 

 

 

 

 

 

 

 

 

 

(FL, GA, SC)

Home

 

163

 

179

(8.9)%

 

 

169

 

193

(12.4)%

 

 

298

 

282

5.7%

 

 

Dollars

$74,765

$69,7657.2% $73,741$76,414(3.5)% $146,971$121,92120.5% Avg. Price$458,681$389,74917.7% $436,337$395,92710.2% $493,191$432,34414.1% Southwest (AZ, TX)Home 712 49643.5% 584 621(6.0)% 1,066 66360.8% Dollars$245,813$166,72347.4% $194,505$213,089(8.7)% $360,225$230,89856.0% Avg. Price$345,243$336,1352.7% $333,057$343,138(2.9)% $337,922$348,261(3.0)% West (CA)Home 446 24085.8% 335 3117.7% 755 301150.8% Dollars$229,656$102,460124.1% $159,332$127,41325.1% $369,887$124,700196.6% Avg. Price$514,924$426,91720.6% $475,618$409,68816.1% $489,917$414,28618.3% Consolidated TotalHome 1,918 1,34542.6% 1,572 1,709(8.0)% 3,402 2,19155.3% Dollars$828,923$517,78660.1% $643,515$692,146(7.0)% $1,419,826$880,14461.3% Avg. Price$432,181$384,97112.3% $409,361$405,0011.1% $417,350$401,7093.9% Unconsolidated Joint Ventures (2) (excluding KSA JV)Home 225 13467.9% 163 232(29.7)% 326 25925.9% Dollars$135,906$80,12669.6% $102,043$145,098(29.7)% $184,524$161,80714.0% Avg. Price$604,027$597,9551.0% $626,031$625,4220.1% $566,025$624,737(9.4)% Grand Total Home 2,143 1,47944.9% 1,735 1,941(10.6)% 3,728 2,45052.2% Dollars$964,829$597,91261.4% $745,558$837,244(11.0)% $1,604,350$1,041,95154.0% Avg. Price$450,224$404,26811.4% $429,716$431,347(0.4)% $430,351$425,2861.2% KSA JV Only Home 326 71359.2% 0 00.0% 1,092 202440.6% Dollars$51,110$11,517343.8% $0$00.0% $171,673$32,316431.2% Avg. Price$156,779$162,211(3.3)% $0$00.0% $157,209$159,982(1.7)% DELIVERIES INCLUDE EXTRASNotes:(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 from unconsolidated joint ventures”.

HOVNANIAN ENTERPRISES, INC.

(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE)

(SEGMENT DATA EXCLUDES UNCONSOLIDATED JOINT VENTURES)

(UNAUDITED)

Contracts (1)

Deliveries

Contract

Year Ended

Year Ended

Backlog

October 31,

October 31,

October 31,

2020

2019

% Change

2020

2019

% Change

2020

2019

% Change

Northeast

(NJ, PA)

Home

326

293

11.3%

348

192

81.3%

130

152

(14.5)%

Dollars

$171,181

$172,950

(1.0)%

$175,627

$116,889

50.3%

$82,111

$86,557

(5.1)%

Avg. Price

$525,095

$590,273

(11.0)%

$504,675

$608,797

(17.1)%

$631,623

$569,454

10.9%

Mid-Atlantic

(DE, MD, VA, WV)

Home

990

728

36.0%

755

652

15.8%

557

343

62.4%

Dollars

$510,229

$385,862

32.2%

$402,647

$356,674

12.9%

$291,115

$193,387

50.5%

Avg. Price

$515,383

$530,030

(2.8)%

$533,307

$547,046

(2.5)%

$522,648

$563,810

(7.3)%

Midwest

(IL, OH)

Home

873

736

18.6%

727

680

6.9%

596

450

32.4%

Dollars

$272,170

$219,266

24.1%

$225,334

$203,734

10.6%

$169,517

$122,681

38.2%

Avg. Price

$311,764

$297,916

4.6%

$309,950

$299,609

3.5%

$284,424

$272,624

4.3%

Southeast

(FL, GA, SC)

Home

599

576

4.0%

548

545

0.6%

298

282

5.7%

Dollars

$270,277

$233,645

15.7%

$232,333

$219,860

5.7%

$146,971

$121,921

20.5%

Avg. Price

$451,214

$405,634

11.2%

$423,965

$403,413

5.1%

$493,191

$432,344

14.1%

Southwest

(AZ, TX)

Home

2,636

2,006

31.4%

2,233

1,866

19.7%

1,066

663

60.8%

Dollars

$872,630

$677,244

28.9%

$743,301

$627,201

18.5%

$360,225

$230,898

56.0%

Avg. Price

$331,043

$337,609

(1.9)%

$332,871

$336,121

(1.0)%

$337,922

$348,261

(3.0)%

West

(CA)

Home

1,529

1,001

52.7%

1,075

1,011

6.3%

755

301

150.8%

Dollars

$717,973

$411,577

74.4%

$472,786

$425,324

11.2%

$369,887

$124,700

196.6%

Avg. Price

$469,570

$411,166

14.2%

$439,801

$420,696

4.5%

$489,917

$414,286

18.3%

Consolidated Total

Home

6,953

5,340

30.2%

5,686

4,946

15.0%

3,402

2,191

55.3%

Dollars

$2,814,460

$2,100,544

34.0%

$2,252,028

$1,949,682

15.5%

$1,419,826

$880,144

61.3%

Avg. Price

$404,784

$393,360

2.9%

$396,065

$394,194

0.5%

$417,350

$401,709

3.9%

Unconsolidated Joint Ventures (2)

(excluding KSA JV)

Home

739

636

16.2%

728

767

(5.1)%

326

259

25.9%

Dollars

$432,570

$398,476

8.6%

$432,602

$483,697

(10.6)%

$184,524

$161,807

14.0%

Avg. Price

$585,345

$626,535

(6.6)%

$594,234

$630,635

(5.8)%

$566,025

$624,737

(9.4)%

Grand Total

Home

7,692

5,976

28.7%

6,414

5,713

12.3%

3,728

2,450

52.2%

Dollars

$3,247,030

$2,499,020

29.9%

$2,684,630

$2,433,379

10.3%

$1,604,350

$1,041,951

54.0%

Avg. Price

$422,131

$418,176

0.9%

$418,558

$425,937

(1.7)%

$430,351

$425,286

1.2%

KSA JV Only

Home

890

204

336.3%

0

7

(100.0)%

1,092

202

440.6%

Dollars

$139,356

$32,943

323.0%

$0

$1,627

(100.0)%

$171,673

$32,316

431.2%

Avg. Price

$156,580

$161,485

(3.0)%

$0

$232,429

(100.0)%

$157,210

$159,982

(1.7)%

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 “Income from unconsolidated joint ventures”.

HOVNANIAN ENTERPRISES, INC.

(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE)

(SEGMENT DATA UNCONSOLIDATED JOINT VENTURES ONLY)

(UNAUDITED)

Contracts (1)

Deliveries

Contract

Three Months Ended

Three Months Ended

Backlog

October 31,

October 31,

October 31,

2020

2019

% Change

2020

2019

% Change

2020

2019

% Change

Northeast

(unconsolidated joint ventures)

Home

16

47

(66.0)%

31

82

(62.2)%

18

76

(76.3)%

(excluding KSA JV)

Dollars

$24,384

$33,054

(26.2)%

$31,421

$62,284

(49.6)%

$24,535

$63,680

(61.5)%

(NJ, PA)

Avg. Price

$1,524,000

$703,277

116.7%

$1,013,581

$759,561

33.4%

$1,363,056

$837,895

62.7%

Mid-Atlantic

(unconsolidated joint ventures)

Home

63

11

472.7%

21

26

(19.2)%

90

21

328.6%

(DE, MD, VA, WV)

Dollars

$33,382

$5,862

469.5%

$10,378

$15,816

(34.4)%

$46,821

$11,121

321.0%

Avg. Price

$529,873

$532,909

(0.6)%

$494,190

$608,308

(18.8)%

$520,233

$529,571

(1.8)%

Midwest

(unconsolidated joint ventures)

Home

2

4

(50.0)%

2

3

(33.3)%

0

3

(100.0)%

(IL, OH)

Dollars

$950

$1,800

(47.2)%

$950

$1,400

(32.1)%

$0

$1,285

(100.0)%

Avg. Price

$475,000

$450,000

5.6%

$475,000

$466,667

1.8%

$0

$428,333

(100.0)%

Southeast

(unconsolidated joint ventures)

Home

89

31

187.1%

69

60

15.0%

149

88

69.3%

(FL, GA, SC)

Dollars

$49,970

$16,611

200.8%

$36,307

$33,080

9.8%

$78,528

$47,678

64.7%

Avg. Price

$561,461

$535,839

4.8%

$526,188

$551,333

(4.6)%

$527,034

$541,795

(2.7)%

Southwest

(unconsolidated joint ventures)

Home

30

30

0.0%

30

40

(25.0)%

46

45

2.2%

(AZ, TX)

Dollars

$18,553

$18,347

1.1%

$19,509

$24,793

(21.3)%

$26,803

$28,318

(5.3)%

Avg. Price

$618,433

$611,567

1.1%

$650,300

$619,825

4.9%

$582,674

$629,289

(7.4)%

West

(unconsolidated joint ventures)

Home

25

11

127.3%

10

21

(52.4)%

23

26

(11.5)%

(CA)

Dollars

$8,667

$4,452

94.7%

$3,478

$7,725

(55.0)%

$7,837

$9,725

(19.4)%

Avg. Price

$346,680

$404,727

(14.3)%

$347,800

$367,857

(5.5)%

$340,739

$374,038

(8.9)%

Unconsolidated Joint Ventures (2)

(excluding KSA JV)

Home

225

134

67.9%

163

232

(29.7)%

326

259

25.9%

Dollars

$135,906

$80,126

69.6%

$102,043

$145,098

(29.7)%

$184,524

$161,807

14.0%

Avg. Price

$604,027

$597,955

1.0%

$626,031

$625,422

0.1%

$566,025

$624,737

(9.4)%

KSA JV Only

Home

326

71

359.2%

0

0

0.0%

1,092

202

440.6%

Dollars

$51,110

$11,517

343.8%

$0

$0

0.0%

$171,673

$32,316

431.2%

Avg. Price

$156,779

$162,211

(3.3)%

$0

$0

0.0%

$157,210

$159,982

(1.7)%

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 “Income from unconsolidated joint ventures”.

HOVNANIAN ENTERPRISES, INC.

(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE)

(SEGMENT DATA UNCONSOLIDATED JOINT VENTURES ONLY)

(UNAUDITED)

Contracts (1)

Deliveries

Contract

Year Ended

Year Ended

Backlog

October 31,

October 31,

October 31,

2020

2019

% Change

2020

2019

% Change

2020

2019

% Change

Northeast

(unconsolidated joint ventures)

Home

146

235

(37.9)%

204

273

(25.3)%

18

76

(76.3)%

(excluding KSA JV)

Dollars

$128,526

$183,450

(29.9)%

$167,671

$213,137

(21.3)%

$24,535

$63,680

(61.5)%

(NJ, PA)

Avg. Price

$880,315

$780,638

12.8%

$821,917

$780,722

5.3%

$1,363,056

$837,895

62.7%

Mid-Atlantic

(unconsolidated joint ventures)

Home

133

37

259.5%

85

69

23.2%

90

21

328.6%

(DE, MD, VA, WV)

Dollars

$68,605

$25,020

174.2%

$42,759

$49,083

(12.9)%

$46,821

$11,121

321.0%

Avg. Price

$515,827

$676,216

(23.7)%

$503,047

$711,348

(29.3)%

$520,233

$529,571

(1.8)%

Midwest

(unconsolidated joint ventures)

Home

13

16

(18.8)%

16

22

(27.3)%

0

3

(100.0)%

(IL, OH)

Dollars

$6,059

$8,272

(26.8)%

$7,344

$13,063

(43.8)%

$0

$1,285

(100.0)%

Avg. Price

$466,077

$517,000

(9.8)%

$459,000

$593,773

(22.7)%

$0

$428,333

(100.0)%

Southeast

(unconsolidated joint ventures)

Home

274

153

79.1%

248

187

32.6%

149

88

69.3%

(FL, GA, SC)

Dollars

$140,517

$82,141

71.1%

$122,562

$97,718

25.4%

$78,528

$47,678

64.7%

Avg. Price

$512,836

$536,869

(4.5)%

$494,202

$522,556

(5.4)%

$527,034

$541,795

(2.7)%

Southwest

(unconsolidated joint ventures)

Home

106

116

(8.6)%

105

138

(23.9)%

46

45

2.2%

(AZ, TX)

Dollars

$65,700

$70,802

(7.2)%

$67,215

$82,948

(19.0)%

$26,803

$28,318

(5.3)%

Avg. Price

$619,811

$610,362

1.5%

$640,143

$601,072

6.5%

$582,674

$629,289

(7.4)%

West

(unconsolidated joint ventures)

Home

67

79

(15.2)%

70

78

(10.3)%

23

26

(11.5)%

(CA)

Dollars

$23,163

$28,791

(19.5)%

$25,051

$27,748

(9.7)%

$7,837

$9,725

(19.4)%

Avg. Price

$345,716

$364,443

(5.1)%

$357,871

$355,744

0.6%

$340,739

$374,038

(8.9)%

Unconsolidated Joint Ventures (2)

(excluding KSA JV)

Home

739

636

16.2%

728

767

(5.1)%

326

259

25.9%

Dollars

$432,570

$398,476

8.6%

$432,602

$483,697

(10.6)%

$184,524

$161,807

14.0%

Avg. Price

$585,345

$626,535

(6.6)%

$594,234

$630,635

(5.8)%

$566,025

$624,737

(9.4)%

KSA JV Only

Home

890

204

336.3%

0

7

(100.0)%

1,092

202

440.6%

Dollars

$139,356

$32,943

323.0%

$0

$1,627

(100.0)%

$171,673

$32,316

431.2%

Avg. Price

$156,580

$161,485

(3.0)%

$0

$232,429

(100.0)%

$157,210

$159,982

(1.7)%

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 “Income 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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