RED BANK, N.J., June 9, 2015 (GLOBE NEWSWIRE) -- Hovnanian Enterprises, Inc. (NYSE:HOV), a leading national homebuilder, reported results for its fiscal second quarter and six months ended April 30, 2015.
RESULTS FOR THE THREE AND SIX MONTH PERIODS ENDED APRIL 30, 2015:
- Total revenues were $468.9 million in the second quarter of fiscal 2015, an increase of 4.2% compared with $449.9 million in the second quarter of fiscal 2014. For the six months ended April 30, 2015, total revenues increased 12.4% to $914.7 million compared with $814.0 million in the first half of the prior year.
- Homebuilding gross margin percentage, before interest expense and land charges included in cost of sales, was 16.1% for the second quarter ended April 30, 2015, compared with 20.2% in last year's second quarter. During the first six months of fiscal 2015, homebuilding gross margin percentage, before interest expense and land charges included in cost of sales, was 17.1% compared with 19.5% in the same period of the previous year.
- Net loss was $19.6 million, or $0.13 per common share, for the second quarter of fiscal 2015, compared with a net loss of $7.9 million, or $0.05 per common share, in the second quarter of the previous year. For the six months ended April 30, 2015, the net loss was $33.9 million, or $0.23 per common share, compared with a net loss of $32.4 million, or $0.22 per common share, in the first half of fiscal 2014.
- The pre-tax loss, excluding land-related charges and loss on extinguishment of debt, in the second quarter of fiscal 2015 was $25.2 million compared with a loss of $5.6 million in the prior year's second quarter. For the first half of fiscal 2015, the pre-tax loss, excluding land-related charges and loss on extinguishment of debt, was $42.6 million compared with a loss of $28.8 million during the first six months of fiscal 2014.
- Consolidated deliveries were 1,223 homes in the second quarter of fiscal 2015, a 1.0% decrease compared with 1,235 homes in the second quarter of fiscal 2014. For the three months ended April 30, 2015, deliveries, including unconsolidated joint ventures, decreased 3.2% to 1,289 homes compared with 1,331 homes in the second quarter of the prior year.
- For the six months ended April 30, 2015, consolidated deliveries were 2,372 homes, a 4.4% increase compared with 2,271 homes in the first six months of last year. During the first half of fiscal 2015, deliveries, including unconsolidated joint ventures, increased 1.6% to 2,509 homes compared with 2,469 homes in the same period of the previous year.
- As of April 30, 2015, consolidated active selling communities increased 5.6% to 207 communities compared with 196 communities at April 30, 2014.
- The dollar value of consolidated net contracts increased 4.7% to $700.7 million for the three months ended April 30, 2015 compared with $669.3 million during the same quarter a year ago. The dollar value of net contracts, including unconsolidated joint ventures, during the second quarter of fiscal 2015 increased 6.8% to $750.9 million compared with $703.0 million in last year's second quarter.
- In the second quarter of fiscal 2015, the number of consolidated net contracts decreased 0.7% to 1,796 homes compared with 1,809 homes in the prior year's second quarter. The number of net contracts, including unconsolidated joint ventures, decreased 0.7% to 1,894 homes for the second quarter of fiscal 2015 from 1,907 homes during the second quarter of fiscal 2014.
- Consolidated net contracts per active selling community decreased 5.4% to 8.7 net contracts per active selling community for the quarter ended April 30, 2015 compared with 9.2 net contracts per active selling community in the second quarter of fiscal 2014.
- The dollar value of consolidated net contracts increased 11.8% to $1.20 billion for the first six months of fiscal 2015 compared with $1.08 billion in the first half of the previous year. The dollar value of net contracts, including unconsolidated joint ventures, for the six months ended April 30, 2015 increased 9.8% to $1.27 billion compared with $1.16 billion in the first six months of fiscal 2014.
- For the six months ended April 30, 2015, the number of consolidated net contracts increased 7.4% to 3,115 homes compared with 2,901 homes in first half of the prior year. The number of net contracts, including unconsolidated joint ventures, increased 4.9% to 3,260 homes for the six months ended April 30, 2015 from 3,109 homes in the first half of last year.
- As of April 30, 2015, the dollar value of consolidated contract backlog increased 11.9% to $1.17 billion compared with $1.05 billion as of April 30, 2014. The dollar value of contract backlog, as of April 30, 2015, including unconsolidated joint ventures, was $1.23 billion, an increase of 8.6% compared with $1.14 billion as of April 30, 2014.
- As of April 30, 2015, the number of homes in consolidated contract backlog increased 6.3% to 2,972 homes compared with 2,797 homes as of the end of the second quarter of fiscal 2014. Contract backlog, as of April 30, 2015, including unconsolidated joint ventures, increased 2.0% to 3,092 homes compared with 3,032 homes as of April 30, 2014.
- Total interest expense as a percentage of total revenues declined 50 basis points to 7.5% during the second quarter of fiscal 2015 compared with 8.0% in the same period of the previous year. For the six months ended April 30, 2015, total interest expense as a percentage of total revenues declined 60 basis points to 7.8% compared with 8.4% during the same period a year ago.
- Total SG&A was $69.1 million, or 14.7% of total revenues, during the second quarter of fiscal 2015 compared with $62.4 million, or 13.9% of total revenues, in last year's second quarter. Total SG&A was $133.7 million, or 14.6% of total revenues, for the first six months of fiscal 2015 compared with $122.8 million, or 15.1% of total revenues, in the first half of the prior year.
- The contract cancellation rate, including unconsolidated joint ventures, for the second quarter of fiscal 2015 was 17%, consistent with the rate in the second quarter of fiscal 2014.
- The valuation allowance was $642.5 million as of April 30, 2015. The valuation allowance is a non-cash reserve against the tax assets for GAAP purposes. For tax purposes, the tax deductions associated with the tax assets may be carried forward for 20 years from the date the deductions were incurred.
- During May 2015, the dollar value of consolidated net contracts increased 18.6% to $212.8 million compared with $179.5 million for May of 2014 and the number of consolidated net contracts increased 18.6% to 529 homes from 446 homes in May 2014.
LIQUIDITY AND INVENTORY AS OF APRIL 30, 2015:
- During the second quarter of fiscal 2015, land and land development spending was $108.1 million. For the six months ended April 30, 2015, land and land development spending was $334.4 million.
- Total liquidity at the end of the second quarter of fiscal 2015 was $312.1 million compared with $298.3 million at April 30, 2014. Total liquidity at April 30, 2015 included $256.9 million of homebuilding cash and cash equivalents, $2.6 million of restricted cash required to collateralize letters of credit and $52.6 million of availability under the unsecured revolving credit facility.
- As of April 30, 2015, the land position, including unconsolidated joint ventures, was 37,140 lots, consisting of 15,773 lots under option and 21,367 owned lots, compared with a total of 37,787 lots as of April 30, 2014.
- During the second quarter of fiscal 2015, approximately 2,100 lots, including unconsolidated joint ventures, were put under option or acquired in 46 communities.
COMMENTS FROM MANAGEMENT:
"As we discussed on our first quarter conference call, we expected our second quarter gross margin to be adversely affected by incentives and concessions on started unsold homes. However, the impact was greater than we anticipated and we are disappointed with our second quarter results," stated Ara K. Hovnanian, Chairman of the Board, President and Chief Executive Officer. "Based on the higher gross margin in our April 30th backlog we are confident that our gross margin for the third and fourth quarters of fiscal 2015 will show sequential increases. While we still feel good about our ability to grow the top line during fiscal 2015 and still expect to generate a solid profit during the fourth quarter, we do not expect it to be sufficient to offset earlier quarterly losses."
"We control enough land today to further grow our community count and remain focused on improving the operating results of some of our weaker divisions. As a result, assuming no changes in current market conditions, we expect fiscal 2016 to be a breakout year for deliveries and revenues, which should lead to a substantial increase in profitability as compared to recent years," concluded Mr. Hovnanian.
WEBCAST INFORMATION:
Hovnanian Enterprises will webcast its fiscal 2015 second quarter financial results conference call at 11:00 a.m. E.T. on Tuesday, June 9, 2015. The webcast can be accessed live through the "Investor Relations" section of Hovnanian Enterprises' website at http://www.khov.com. For those who are not available to listen to the live webcast, an archive of the broadcast will be available under the "Past Events" section of the Investor Relations page on the Hovnanian website at http://www.khov.com. The archive will be available for 12 months.
ABOUT HOVNANIAN ENTERPRISES®, INC.:
Hovnanian Enterprises, Inc., founded in 1959 by Kevork S. Hovnanian, is headquartered in Red Bank, New Jersey. The Company is one of the nation's largest homebuilders with operations in Arizona, California, Delaware, Florida, Georgia, Illinois, Maryland, Minnesota, New Jersey, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia, Washington, D.C. and West Virginia. The Company's homes are marketed and sold under the trade names K. Hovnanian® Homes®, Brighton Homes® and Parkwood Builders. As the developer of K. Hovnanian's® Four Seasons communities, the Company is also one of the nation's largest builders of active adult homes.
Additional information on Hovnanian Enterprises, Inc., including a summary investment profile and the Company's 2014 annual report, can be accessed through the "Investor Relations" section of the Hovnanian Enterprises' website at http://www.khov.com. To be added to Hovnanian's investor e-mail list, please send an e-mail to IR@khov.com or sign up at http://www.khov.com.
NON-GAAP FINANCIAL MEASURES:
Consolidated earnings before interest expense and income taxes ("EBIT") and before depreciation and amortization ("EBITDA") and before inventory impairment loss and land option write-offs and loss on extinguishment of debt ("Adjusted EBITDA") are not U.S. generally accepted accounting principles (GAAP) financial measures. The most directly comparable GAAP financial measure is net loss. The reconciliation of EBIT, EBITDA and Adjusted EBITDA to net loss is presented in a table attached to this earnings release.
Loss Before Income Taxes Excluding Land-Related Charges and Loss on Extinguishment of Debt is a non-GAAP financial measure. The most directly comparable GAAP financial measure is Loss Before Income Taxes. The reconciliation of Loss Before Income Taxes Excluding Land-Related Charges and Loss on Extinguishment of Debt to Loss Before Income Taxes is presented in a table attached to this earnings release.
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" provision 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. 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. 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 the sustained homebuilding downturn; (2) adverse weather and other environmental conditions and natural disasters; (3) levels of indebtedness and restrictions on the Company's operations and activities imposed by the agreements governing the Company's outstanding indebtedness; (4) the Company's sources of liquidity; (5) changes in credit ratings; (6) changes in market conditions and seasonality of the Company's business; (7) the availability and cost of suitable land and improved lots; (8) shortages in, and price fluctuations of, raw materials and labor; (9) regional and local economic factors, including dependency on certain sectors of the economy, and employment levels affecting home prices and sales activity in the markets where the Company builds homes; (10) fluctuations in interest rates and the availability of mortgage financing; (11) changes in tax laws affecting the after-tax costs of owning a home; (12) operations through joint ventures with third parties; (13) government regulation, including regulations concerning development of land, the home building, sales and customer financing processes, tax laws and the environment; (14) product liability litigation, warranty claims and claims made by mortgage investors; (15) levels of competition; (16) availability of financing to the Company; (17) successful identification and integration of acquisitions; (18) significant influence of the Company's controlling stockholders; (19) availability of net operating loss carryforwards; (20) utility shortages and outages or rate fluctuations; (21) geopolitical risks, terrorist acts and other acts of war; and (22) 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, 2014 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. | ||||
| April 30, 2015 | ||||
| Statements of Consolidated Operations | ||||
| (Dollars in Thousands, Except Per Share Data) | ||||
| Three Months Ended | Six Months Ended | |||
| April 30, | April 30, | |||
| 2015 | 2014 | 2015 | 2014 | |
| (Unaudited) | (Unaudited) | |||
| Total Revenues | $468,949 | $449,929 | $914,663 | $813,977 |
| Costs and Expenses (a) | 499,896 | 457,139 | 966,742 | 847,648 |
| Loss on Extinguishment of Debt | -- | (1,155) | -- | (1,155) |
| Income from Unconsolidated Joint Ventures | 1,466 | 1,067 | 2,918 | 3,638 |
| Loss Before Income Taxes | (29,481) | (7,298) | (49,161) | (31,188) |
| Income Tax (Benefit) Provision | (9,922) | 604 | (15,226) | 1,237 |
| Net Loss | $(19,559) | $(7,902) | $(33,935) | $(32,425) |
| Per Share Data: | ||||
| Basic: | ||||
| Loss Per Common Share | $(0.13) | $(0.05) | $(0.23) | $(0.22) |
| Weighted Average Number of | ||||
| Common Shares Outstanding (b) | 146,946 | 146,325 | 146,762 | 146,151 |
| Assuming Dilution: | ||||
| Loss Per Common Share | $(0.13) | $(0.05) | $(0.23) | $(0.22) |
| Weighted Average Number of | ||||
| Common Shares Outstanding (b) | 146,946 | 146,325 | 146,762 | 146,151 |
| (a) Includes inventory impairment loss and land option write-offs. | ||||
| (b) For periods with a net loss, basic shares are used in accordance with GAAP rules. | ||||
| Hovnanian Enterprises, Inc. | ||||
| April 30, 2015 | ||||
| Reconciliation of Loss Before Income Taxes Excluding Land-Related Charges | ||||
| and Loss on Extinguishment of Debt to Loss Before Income Taxes | ||||
| (Dollars in Thousands) | ||||
| Three Months Ended | Six Months Ended | |||
| April 30, | April 30, | |||
| 2015 | 2014 | 2015 | 2014 | |
| (Unaudited) | (Unaudited) | |||
| Loss Before Income Taxes | $(29,481) | $(7,298) | $(49,161) | $(31,188) |
| Inventory Impairment Loss and Land Option Write-Offs | 4,311 | 522 | 6,541 | 1,186 |
| Loss on Extinguishment of Debt | -- | 1,155 | -- | 1,155 |
| Loss Before Income Taxes Excluding Land-Related Charges and Loss on Extinguishment of Debt (a) | $(25,170) | $(5,621) | $(42,620) | $(28,847) |
| (a) Loss Before Income Taxes Excluding Land-Related Charges and Loss on Extinguishment of Debt is a non-GAAP Financial measure. The most directly comparable GAAP financial measure is Loss Before Income Taxes. | ||||
| Hovnanian Enterprises, Inc. | ||||
| April 30, 2015 | ||||
| Gross Margin | ||||
| (Dollars in Thousands) | ||||
| Homebuilding Gross Margin | Homebuilding Gross Margin | |||
| Three Months Ended | Six Months Ended | |||
| April 30, | April 30, | |||
| 2015 | 2014 | 2015 | 2014 | |
| (Unaudited) | (Unaudited) | |||
| Sale of Homes | $455,172 | $438,302 | $888,643 | $793,483 |
| Cost of Sales, Excluding Interest and Land Charges (a) | 381,870 | 349,867 | 736,249 | 638,392 |
| Homebuilding Gross Margin, Excluding Interest and Land Charges | 73,302 | 88,435 | 152,394 | 155,091 |
| Homebuilding Cost of Sales Interest | 11,993 | 12,024 | 23,292 | 21,490 |
| Homebuilding Gross Margin, Including Interest and Excluding Land Charges | $61,309 | $76,411 | $129,102 | $133,601 |
| Gross Margin Percentage, Excluding Interest and Land Charges | 16.1% | 20.2% | 17.1% | 19.5% |
| Gross Margin Percentage, Including Interest and Excluding Land Charges | 13.5% | 17.4% | 14.5% | 16.8% |
| Land Sales Gross Margin | Land Sales Gross Margin | |||
| Three Months Ended | Six Months Ended | |||
| April 30, | April 30, | |||
| 2015 | 2014 | 2015 | 2014 | |
| (Unaudited) | (Unaudited) | |||
| Land and Lot Sales | $336 | $1,499 | $850 | $1,929 |
| Cost of Sales, Excluding Interest and Land Charges (a) | 269 | 566 | 702 | 928 |
| Land and Lot Sales Gross Margin, Excluding Interest and Land Charges | 67 | 933 | 148 | 1,001 |
| Land and Lot Sales Interest | 20 | 383 | 39 | 407 |
| Land and Lot Sales Gross Margin, Including Interest and Excluding Land Charges | $47 | $550 | $109 | $594 |
| (a) Does not include cost associated with walking away from land options or inventory impairment losses which are recorded as Inventory impairment loss and land option write-offs in the Condensed Consolidated Statements of Operations. | ||||
| Hovnanian Enterprises, Inc. | ||||
| April 30, 2015 | ||||
| Reconciliation of Adjusted EBITDA to Net Loss | ||||
| (Dollars in Thousands) | ||||
| Three Months Ended | Six Months Ended | |||
| April 30, | April 30, | |||
| 2015 | 2014 | 2015 | 2014 | |
| (Unaudited) | (Unaudited) | |||
| Net Loss | $(19,559) | $(7,902) | $(33,935) | $(32,425) |
| Income Tax (Benefit) Provision | (9,922) | 604 | (15,226) | 1,237 |
| Interest Expense | 35,043 | 35,879 | 71,432 | 68,702 |
| EBIT (a) | 5,562 | 28,581 | 22,271 | 37,514 |
| Depreciation | 870 | 853 | 1,719 | 1,706 |
| Amortization of Debt Costs | 1,489 | 1,103 | 2,961 | 2,158 |
| EBITDA (b) | 7,921 | 30,537 | 26,951 | 41,378 |
| Inventory Impairment Loss and Land Option Write-offs | 4,311 | 522 | 6,541 | 1,186 |
| Loss on Extinguishment of Debt | -- | 1,155 | -- | 1,155 |
| Adjusted EBITDA (c) | $12,232 | $32,214 | $33,492 | $43,719 |
| Interest Incurred | $40,703 | $36,782 | $82,175 | $71,601 |
| Adjusted EBITDA to Interest Incurred | 0.30 | 0.88 | 0.41 | 0.61 |
| (a) EBIT is a non-GAAP financial measure. The most directly comparable GAAP financial measure is net loss. EBIT represents earnings before interest expense and income taxes. | ||||
| (b) EBITDA is a non-GAAP financial measure. The most directly comparable GAAP financial measure is net loss. EBITDA represents earnings before interest expense, income taxes, depreciation and amortization. | ||||
| (c) Adjusted EBITDA is a non-GAAP financial measure. The most directly comparable GAAP financial measure is net loss. Adjusted EBITDA represents earnings before interest expense, income taxes, depreciation, amortization, inventory impairment loss and land option write-offs and loss on extinguishment of debt. | ||||
| Hovnanian Enterprises, Inc. | ||||
| April 30, 2015 | ||||
| Interest Incurred, Expensed and Capitalized | ||||
| (Dollars in Thousands) | ||||
| Three Months Ended | Six Months Ended | |||
| April 30, | April 30, | |||
| 2015 | 2014 | 2015 | 2014 | |
| (Unaudited) | (Unaudited) | |||
| Interest Capitalized at Beginning of Period | $114,241 | $107,089 | $109,158 | $105,093 |
| Plus Interest Incurred | 40,703 | 36,782 | 82,175 | 71,601 |
| Less Interest Expensed | 35,043 | 35,879 | 71,432 | 68,702 |
| Interest Capitalized at End of Period (a) | $119,901 | $107,992 | $119,901 | $107,992 |
| (a) 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) | ||
|
April 30, 2015 |
October 31, 2014 |
|
| (Unaudited) | (1) | |
| ASSETS | ||
| Homebuilding: | ||
| Cash and cash equivalents | $256,866 | $255,117 |
| Restricted cash and cash equivalents | 9,623 | 13,086 |
| Inventories: | ||
| Sold and unsold homes and lots under development | 1,227,692 | 961,994 |
| Land and land options held for future development or sale | 210,259 | 273,463 |
| Consolidated inventory not owned: | ||
| Specific performance options | 1,734 | 3,479 |
| Other options | 99,072 | 105,374 |
| Total consolidated inventory not owned | 100,806 | 108,853 |
| Total inventories | 1,538,757 | 1,344,310 |
| Investments in and advances to unconsolidated joint ventures | 70,550 | 63,883 |
| Receivables, deposits and notes, net | 85,810 | 92,546 |
| Property, plant and equipment, net | 46,414 | 46,744 |
| Prepaid expenses and other assets | 81,085 | 69,358 |
| Total homebuilding | 2,089,105 | 1,885,044 |
| Financial services: | ||
| Cash and cash equivalents | 4,706 | 6,781 |
| Restricted cash and cash equivalents | 13,980 | 16,236 |
| Mortgage loans held for sale at fair value | 106,452 | 95,338 |
| Other assets | 2,163 | 1,988 |
| Total financial services | 127,301 | 120,343 |
| Income taxes receivable – including net deferred tax benefits | 300,588 | 284,543 |
| Total assets | $2,516,994 | $2,289,930 |
| (1) Derived from the audited balance sheet as of October 31, 2014. | ||
| HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES | ||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| (In Thousands Except Share and Per Share Amounts) | ||
|
April 30, 2015 |
October 31, 2014 |
|
| (Unaudited) | (1) | |
| LIABILITIES AND EQUITY | ||
| Homebuilding: | ||
| Nonrecourse mortgages | $118,904 | $103,908 |
| Accounts payable and other liabilities | 342,762 | 370,876 |
| Customers' deposits | 41,431 | 34,969 |
| Nonrecourse mortgages secured by operating properties | 16,076 | 16,619 |
| Liabilities from inventory not owned | 91,040 | 92,381 |
| Total homebuilding | 610,213 | 618,753 |
| Financial services: | ||
| Accounts payable and other liabilities | 21,831 | 22,278 |
| Mortgage warehouse lines of credit | 82,966 | 76,919 |
| Total financial services | 104,797 | 99,197 |
| Notes payable: | ||
| Senior secured notes, net of discount | 980,629 | 979,935 |
| Senior notes, net of discount | 840,851 | 590,472 |
| Senior amortizing notes | 14,987 | 17,049 |
| Senior exchangeable notes | 71,913 | 70,101 |
| Accrued interest | 39,938 | 32,222 |
| Total notes payable | 1,948,318 | 1,689,779 |
| Total liabilities | 2,663,328 | 2,407,729 |
| 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 April 30, 2015 and at October 31, 2014 | 135,299 | 135,299 |
| Common stock, Class A, $0.01 par value – authorized 400,000,000 shares; issued 143,196,407 shares at April 30, 2015 and 142,836,563 shares at October 31, 2014 (including 11,760,763 shares at April 30, 2015 and October 31, 2014 held in Treasury) | 1,432 | 1,428 |
| Common stock, Class B, $0.01 par value (convertible to Class A at time of sale) – authorized 60,000,000 shares; issued 15,675,467 shares at April 30, 2015 and 15,497,543 shares at October 31, 2014 (including 691,748 shares at April 30, 2015 and October 31, 2014 held in Treasury) | 157 | 155 |
| Paid in capital – common stock | 703,337 | 697,943 |
| Accumulated deficit | (871,199) | (837,264) |
| Treasury stock – at cost | (115,360) | (115,360) |
| Total stockholders' equity deficit | (146,334) | (117,799) |
| Total liabilities and equity | $2,516,994 | $2,289,930 |
| (1) Derived from the audited balance sheet as of October 31, 2014. | ||
| HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES | ||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| (In Thousands Except Per Share Data) | ||||
| (Unaudited) | ||||
| Three Months Ended April 30, | Six Months Ended April 30, | |||
| 2015 | 2014 | 2015 | 2014 | |
| Revenues: | ||||
| Homebuilding: | ||||
| Sale of homes | $455,172 | $438,302 | $888,643 | $793,483 |
| Land sales and other revenues | 1,320 | 2,215 | 2,441 | 2,988 |
| Total homebuilding | 456,492 | 440,517 | 891,084 | 796,471 |
| Financial services | 12,457 | 9,412 | 23,579 | 17,506 |
| Total revenues | 468,949 | 449,929 | 914,663 | 813,977 |
| Expenses: | ||||
| Homebuilding: | ||||
| Cost of sales, excluding interest | 382,139 | 350,433 | 736,951 | 639,320 |
| Cost of sales interest | 12,013 | 12,407 | 23,331 | 21,897 |
| Inventory impairment loss and land option write-offs | 4,311 | 522 | 6,541 | 1,186 |
| Total cost of sales | 398,463 | 363,362 | 766,823 | 662,403 |
| Selling, general and administrative | 52,614 | 47,806 | 100,260 | 91,768 |
| Total homebuilding expenses | 451,077 | 411,168 | 867,083 | 754,171 |
| Financial services | 7,508 | 6,707 | 14,825 | 13,379 |
| Corporate general and administrative | 16,493 | 14,641 | 33,401 | 31,033 |
| Other interest | 23,030 | 23,472 | 48,101 | 46,805 |
| Other operations | 1,788 | 1,151 | 3,332 | 2,260 |
| Total expenses | 499,896 | 457,139 | 966,742 | 847,648 |
| Loss on extinguishment of debt | -- | (1,155) | -- | (1,155) |
| Income from unconsolidated joint ventures | 1,466 | 1,067 | 2,918 | 3,638 |
| Loss before income taxes | (29,481) | (7,298) | (49,161) | (31,188) |
| State and federal income tax (benefit) provision: | ||||
| State | (414) | 604 | 2,718 | 1,237 |
| Federal | (9,508) | -- | (17,944) | -- |
| Total income taxes | (9,922) | 604 | (15,226) | 1,237 |
| Net loss | $(19,559) | $(7,902) | $(33,935) | $(32,425) |
| Per share data: | ||||
| Basic: | ||||
| Loss per common share | $(0.13) | $(0.05) | $(0.23) | $(0.22) |
| Weighted-average number of common shares outstanding | 146,946 | 146,325 | 146,762 | 146,151 |
| Assuming dilution: | ||||
| Loss per common share | $(0.13) | $(0.05) | $(0.23) | $(0.22) |
| Weighted-average number of common shares outstanding | 146,946 | 146,325 | 146,762 | 146,151 |
| HOVNANIAN ENTERPRISES, INC. | ||||||||||
| (DOLLARS IN THOUSANDS EXCEPT AVG. PRICE) | ||||||||||
| (SEGMENT DATA EXCLUDES UNCONSOLIDATED JOINT VENTURES) | ||||||||||
| (UNAUDITED) | ||||||||||
| Communities Under Development | ||||||||||
| Three Months – April 30, 2015 | ||||||||||
| Net Contracts | Deliveries | Contract | ||||||||
| Three Months Ended | Three Months Ended | Backlog | ||||||||
| Apr 30, | Apr 30, | Apr 30, | ||||||||
| 2015 | 2014 | % Change | 2015 | 2014 | % Change | 2015 | 2014 | % Change | ||
| Northeast | ||||||||||
| (NJ, PA) | Home | 140 | 156 | (10.3)% | 70 | 134 | (47.8)% | 227 | 237 | (4.2)% |
| Dollars | $69,717 | $75,485 | (7.6)% | $39,123 | $65,550 | (40.3)% | $110,032 | $113,846 | (3.4)% | |
| Avg. Price | $497,975 | $483,878 | 2.9% | $558,897 | $489,180 | 14.3% | $484,720 | $480,363 | 0.9% | |
| Mid-Atlantic | ||||||||||
| (DE, MD, VA, WV) | Home | 247 | 263 | (6.1)% | 164 | 145 | 13.1% | 474 | 404 | 17.3% |
| Dollars | $116,843 | $119,935 | (2.6)% | $76,102 | $68,431 | 11.2% | $250,862 | $203,218 | 23.4% | |
| Avg. Price | $473,047 | $456,027 | 3.7% | $464,035 | $471,938 | (1.7)% | $529,245 | $503,015 | 5.2% | |
| Midwest | ||||||||||
| (IL, MN, OH) | Home | 311 | 229 | 35.8% | 218 | 167 | 30.5% | 763 | 666 | 14.6% |
| Dollars | $101,807 | $65,242 | 56.0% | $73,214 | $48,624 | 50.6% | $223,759 | $171,987 | 30.1% | |
| Avg. Price | $327,353 | $284,901 | 14.9% | $335,847 | $291,162 | 15.3% | $293,262 | $258,239 | 13.6% | |
| Southeast | ||||||||||
| (FL, GA, NC, SC) | Home | 205 | 183 | 12.0% | 158 | 164 | (3.7)% | 331 | 308 | 7.5% |
| Dollars | $66,824 | $59,467 | 12.4% | $49,255 | $50,792 | (3.0)% | $113,146 | $102,421 | 10.5% | |
| Avg. Price | $325,971 | $324,956 | 0.3% | $311,740 | $309,707 | 0.7% | $341,832 | $332,537 | 2.8% | |
| Southwest | ||||||||||
| (AZ, TX) | Home | 761 | 839 | (9.3)% | 532 | 551 | (3.4)% | 1,060 | 1,027 | 3.2% |
| Dollars | $290,901 | $269,985 | 7.7% | $189,974 | $164,212 | 15.7% | $423,221 | $352,139 | 20.2% | |
| Avg. Price | $382,262 | $321,794 | 18.8% | $357,095 | $298,025 | 19.8% | $399,265 | $342,881 | 16.4% | |
| West | ||||||||||
| (CA) | Home | 132 | 139 | (5.0)% | 81 | 74 | 9.5% | 117 | 155 | (24.5)% |
| Dollars | $54,648 | $79,167 | (31.0)% | $27,504 | $40,693 | (32.4)% | $50,081 | $102,644 | (51.2)% | |
| Avg. Price | $414,000 | $569,545 | (27.3)% | $339,552 | $549,905 | (38.3)% | $428,047 | $662,221 | (35.4)% | |
| Consolidated Total | ||||||||||
| Home | 1,796 | 1,809 | (0.7)% | 1,223 | 1,235 | (1.0)% | 2,972 | 2,797 | 6.3% | |
| Dollars | $700,740 | $669,281 | 4.7% | $455,172 | $438,302 | 3.8% | $1,171,101 | $1,046,255 | 11.9% | |
| Avg. Price | $390,167 | $369,973 | 5.5% | $372,177 | $354,900 | 4.9% | $394,045 | $374,063 | 5.3% | |
| Unconsolidated Joint Ventures | ||||||||||
| Home | 98 | 98 | 0.0% | 66 | 96 | (31.3)% | 120 | 235 | (48.9)% | |
| Dollars | $50,132 | $33,768 | 48.5% | $27,325 | $33,411 | (18.2)% | $62,433 | $89,485 | (30.2)% | |
| Avg. Price | $511,551 | $344,567 | 48.5% | $414,015 | $348,031 | 19.0% | $520,271 | $380,787 | 36.6% | |
| Grand Total | ||||||||||
| Home | 1,894 | 1,907 | (0.7)% | 1,289 | 1,331 | (3.2)% | 3,092 | 3,032 | 2.0% | |
| Dollars | $750,872 | $703,049 | 6.8% | $482,497 | $471,713 | 2.3% | $1,233,534 | $1,135,740 | 8.6% | |
| Avg. Price | $396,448 | $368,668 | 7.5% | $374,319 | $354,405 | 5.6% | $398,944 | $374,584 | 6.5% | |
| DELIVERIES INCLUDE EXTRAS | ||||||||||
| Notes: | ||||||||||
| (1) Net contracts are defined as new contracts signed during the period for the purchase of homes, less cancellations of prior contracts. | ||||||||||
| HOVNANIAN ENTERPRISES, INC. | ||||||||||
| (DOLLARS IN THOUSANDS EXCEPT AVG. PRICE) | ||||||||||
| (SEGMENT DATA EXCLUDES UNCONSOLIDATED JOINT VENTURES) | ||||||||||
| (UNAUDITED) | ||||||||||
| Communities Under Development | ||||||||||
| Six Months - April 30, 2015 | ||||||||||
| Net Contracts | Deliveries | Contract | ||||||||
| Six Months Ended | Six Months Ending | Backlog | ||||||||
| Apr 30, | Apr 30, | Apr 30, | ||||||||
| 2015 | 2014 | % Change | 2015 | 2014 | % Change | 2015 | 2014 | % Change | ||
| Northeast | ||||||||||
| (NJ, PA) | Home | 247 | 257 | (3.9)% | 166 | 240 | (30.8)% | 227 | 237 | (4.2)% |
| Dollars | $126,470 | $127,523 | (0.8)% | $89,764 | $118,683 | (24.4)% | $110,032 | $113,846 | (3.4)% | |
| Avg. Price | $512,024 | $496,200 | 3.2% | $540,748 | $494,512 | 9.3% | $484,720 | $480,363 | 0.9% | |
| Mid-Atlantic | ||||||||||
| (DE, MD, VA, WV) | Home | 458 | 403 | 13.6% | 355 | 270 | 31.5% | 474 | 404 | 17.3% |
| Dollars | $218,952 | $190,832 | 14.7% | $157,013 | $128,781 | 21.9% | $250,862 | $203,218 | 23.4% | |
| Avg. Price | $478,061 | $473,530 | 1.0% | $442,290 | $476,966 | (7.3)% | $529,245 | $503,015 | 5.2% | |
| Midwest | ||||||||||
| (IL, MN, OH) | Home | 519 | 397 | 30.7% | 421 | 336 | 25.3% | 763 | 666 | 14.6% |
| Dollars | $172,788 | $113,633 | 52.1% | $137,624 | $92,363 | 49.0% | $223,759 | $171,987 | 30.1% | |
| Avg. Price | $332,926 | $286,230 | 16.3% | $326,899 | $274,889 | 18.9% | $293,262 | $258,239 | 13.6% | |
| Southeast | ||||||||||
| (FL, GA, NC, SC) | Home | 378 | 295 | 28.1% | 279 | 295 | (5.4)% | 331 | 308 | 7.5% |
| Dollars | $119,114 | $93,685 | 27.1% | $87,039 | $89,920 | (3.2)% | $113,146 | $102,421 | 10.5% | |
| Avg. Price | $315,118 | $317,576 | (0.8)% | $311,967 | $304,813 | 2.3% | $341,832 | $332,537 | 2.8% | |
| Southwest | ||||||||||
| (AZ, TX) | Home | 1,299 | 1,342 | (3.2)% | 1,009 | 992 | 1.7% | 1,060 | 1,027 | 3.2% |
| Dollars | $484,485 | $428,069 | 13.2% | $356,584 | $292,297 | 22.0% | $423,221 | $352,139 | 20.2% | |
| Avg. Price | $372,968 | $318,978 | 16.9% | $353,403 | $294,655 | 19.9% | $399,265 | $342,881 | 16.4% | |
| West | ||||||||||
| (CA) | Home | 214 | 207 | 3.4% | 142 | 138 | 2.9% | 117 | 155 | (24.5)% |
| Dollars | $82,088 | $123,557 | (33.6)% | $60,619 | $71,439 | (15.1)% | $50,081 | $102,644 | (51.2)% | |
| Avg. Price | $383,591 | $596,892 | (35.7)% | $426,891 | $517,672 | (17.5)% | $428,047 | $662,221 | (35.4)% | |
| Consolidated Total | ||||||||||
| Home | 3,115 | 2,901 | 7.4% | 2,372 | 2,271 | 4.4% | 2,972 | 2,797 | 6.3% | |
| Dollars | $1,203,897 | $1,077,299 | 11.8% | $888,643 | $793,483 | 12.0% | $1,171,101 | $1,046,255 | 11.9% | |
| Avg. Price | $386,484 | $371,354 | 4.1% | $374,639 | $349,398 | 7.2% | $394,045 | $374,063 | 5.3% | |
| Unconsolidated Joint Ventures | ||||||||||
| Home | 145 | 208 | (30.3)% | 137 | 198 | (30.8)% | 120 | 235 | (48.9)% | |
| Dollars | $68,213 | $81,536 | (16.3)% | $54,904 | $77,987 | (29.6)% | $62,433 | $89,485 | (30.2)% | |
| Avg. Price | $470,436 | $391,998 | 20.0% | $400,758 | $393,875 | 1.7% | $520,271 | $380,787 | 36.6% | |
| Grand Total | ||||||||||
| Home | 3,260 | 3,109 | 4.9% | 2,509 | 2,469 | 1.6% | 3,092 | 3,032 | 2.0% | |
| Dollars | $1,272,110 | $1,158,835 | 9.8% | $943,547 | $871,470 | 8.3% | $1,233,534 | $1,135,740 | 8.6% | |
| Avg. Price | $390,218 | $372,735 | 4.7% | $376,065 | $352,965 | 6.5% | $398,944 | $374,584 | 6.5% | |
| DELIVERIES INCLUDE EXTRAS | ||||||||||
| Notes: | ||||||||||
| (1) Net contracts are defined as new contracts signed during the period for the purchase of homes, less cancellations of prior contracts. | ||||||||||
| HOVNANIAN ENTERPRISES, INC. | ||||||||||
| (DOLLARS IN THOUSANDS EXCEPT AVG. PRICE) | ||||||||||
| (SEGMENT DATA INCLUDES UNCONSOLIDATED JOINT VENTURES) | ||||||||||
| (UNAUDITED) | ||||||||||
| Communities Under Development | ||||||||||
| Three Months – April 30, 2015 | ||||||||||
| Net Contracts | Deliveries | Contract | ||||||||
| Three Months Ended | Three Months Ended | Backlog | ||||||||
| Apr 30, | Apr 30, | Apr 30, | ||||||||
| 2015 | 2014 | % Change | 2015 | 2014 | % Change | 2015 | 2014 | % Change | ||
| Northeast | ||||||||||
| (includes unconsolidated joint ventures) | Home | 150 | 167 | (10.2)% | 73 | 147 | (50.3)% | 243 | 261 | (6.9)% |
| (NJ, PA) | Dollars | $72,656 | $75,796 | (4.1)% | $39,885 | $69,985 | (43.0)% | $114,853 | $122,405 | (6.2)% |
| Avg. Price | $484,368 | $453,868 | 6.7% | $546,354 | $476,088 | 14.8% | $472,647 | $468,985 | 0.8% | |
| Mid-Atlantic | ||||||||||
| (includes unconsolidated joint ventures) | Home | 275 | 301 | (8.6)% | 187 | 180 | 3.9% | 512 | 489 | 4.7% |
| (DE, MD, VA, WV) | Dollars | $131,083 | $136,640 | (4.1)% | $88,164 | $82,620 | 6.7% | $272,944 | $244,103 | 11.8% |
| Avg. Price | $476,666 | $453,953 | 5.0% | $471,468 | $459,000 | 2.7% | $533,094 | $499,188 | 6.8% | |
| Midwest | ||||||||||
| (includes unconsolidated joint ventures) | Home | 311 | 247 | 25.9% | 224 | 181 | 23.8% | 763 | 706 | 8.1% |
| (IL, MN, OH) | Dollars | $101,571 | $70,073 | 45.0% | $74,969 | $52,327 | 43.3% | $223,759 | $182,927 | 22.3% |
| Avg. Price | $326,594 | $283,694 | 15.1% | $334,684 | $289,100 | 15.8% | $293,262 | $259,103 | 13.2% | |
| Southeast | ||||||||||
| (includes unconsolidated joint ventures) | Home | 222 | 214 | 3.7% | 178 | 198 | (10.1)% | 353 | 394 | (10.4)% |
| (FL, GA, NC, SC) | Dollars | $74,030 | $71,388 | 3.7% | $57,538 | $61,876 | (7.0)% | $122,444 | $131,522 | (6.9)% |
| Avg. Price | $333,469 | $333,589 | (0.0)% | $323,248 | $312,506 | 3.4% | $346,867 | $333,812 | 3.9% | |
| Southwest | ||||||||||
| (includes unconsolidated joint ventures) | Home | 761 | 839 | (9.3)% | 532 | 551 | (3.4)% | 1,060 | 1,027 | 3.2% |
| (AZ, TX) | Dollars | $290,901 | $269,985 | 7.7% | $189,974 | $164,212 | 15.7% | $423,221 | $352,139 | 20.2% |
| Avg. Price | $382,262 | $321,794 | 18.8% | $357,095 | $298,025 | 19.8% | $399,265 | $342,881 | 16.4% | |
| West | ||||||||||
| (includes unconsolidated joint ventures) | Home | 175 | 139 | 25.9% | 95 | 74 | 28.4% | 161 | 155 | 3.9% |
| (CA) | Dollars | $80,631 | $79,167 | 1.8% | $31,967 | $40,693 | (21.4)% | $76,313 | $102,644 | (25.7)% |
| Avg. Price | $460,750 | $569,545 | (19.1)% | $336,493 | $549,905 | (38.8)% | $473,992 | $662,221 | (28.4)% | |
| Grand Total | ||||||||||
| Home | 1,894 | 1,907 | (0.7)% | 1,289 | 1,331 | (3.2)% | 3,092 | 3,032 | 2.0% | |
| Dollars | $750,872 | $703,049 | 6.8% | $482,497 | $471,713 | 2.3% | $1,233,534 | $1,135,740 | 8.6% | |
| Avg. Price | $396,448 | $368,668 | 7.5% | $374,319 | $354,405 | 5.6% | $398,944 | $374,584 | 6.5% | |
| Consolidated Total | ||||||||||
| Home | 1,796 | 1,809 | (0.7)% | 1,223 | 1,235 | (1.0)% | 2,972 | 2,797 | 6.3% | |
| Dollars | $700,740 | $669,281 | 4.7% | $455,172 | $438,302 | 3.8% | $1,171,101 | $1,046,255 | 11.9% | |
| Avg. Price | $390,167 | $369,973 | 5.5% | $372,177 | $354,900 | 4.9% | $394,045 | $374,063 | 5.3% | |
| Unconsolidated Joint Ventures | ||||||||||
| Home | 98 | 98 | 0.0% | 66 | 96 | (31.3)% | 120 | 235 | (48.9)% | |
| Dollars | $50,132 | $33,768 | 48.5% | $27,325 | $33,411 | (18.2)% | $62,433 | $89,485 | (30.2)% | |
| Avg. Price | $511,546 | $344,567 | 48.5% | $414,015 | $348,031 | 19.0% | $520,271 | $380,787 | 36.6% | |
| DELIVERIES INCLUDE EXTRAS | ||||||||||
| Notes: | ||||||||||
| (1) Net contracts are defined as new contracts signed during the period for the purchase of homes, less cancellations of prior contracts. | ||||||||||
| HOVNANIAN ENTERPRISES, INC. | ||||||||||
| (DOLLARS IN THOUSANDS EXCEPT AVG. PRICE) | ||||||||||
| (SEGMENT DATA INCLUDES UNCONSOLIDATED JOINT VENTURES) | ||||||||||
| (UNAUDITED) | ||||||||||
| Communities Under Development | ||||||||||
| Six Months – April 30, 2015 | ||||||||||
| Net Contracts | Deliveries | Contract | ||||||||
| Six Months Ended | Six Months Ended | Backlog | ||||||||
| Apr 30, | Apr 30, | Apr 30, | ||||||||
| 2015 | 2014 | % Change | 2015 | 2014 | % Change | 2015 | 2014 | % Change | ||
| Northeast | ||||||||||
| (includes unconsolidated joint ventures) | Home | 258 | 295 | (12.5)% | 181 | 267 | (32.2)% | 243 | 261 | (6.9)% |
| (NJ, PA) | Dollars | $127,257 | $143,165 | (11.1)% | $93,984 | $132,008 | (28.8)% | $114,853 | $122,405 | (6.2)% |
| Avg. Price | $493,244 | $485,305 | 1.6% | $519,249 | $494,411 | 5.0% | $472,647 | $468,985 | 0.8% | |
| Mid-Atlantic | ||||||||||
| (includes unconsolidated joint ventures) | Home | 503 | 494 | 1.8% | 397 | 346 | 14.7% | 512 | 489 | 4.7% |
| (DE, MD, VA, WV) | Dollars | $242,645 | $230,084 | 5.5% | $179,662 | $161,372 | 11.3% | $272,944 | $244,103 | 11.8% |
| Avg. Price | $482,396 | $465,756 | 3.6% | $452,550 | $466,393 | (3.0)% | $533,094 | $499,188 | 6.8% | |
| Midwest | ||||||||||
| (includes unconsolidated joint ventures) | Home | 519 | 422 | 23.0% | 438 | 370 | 18.4% | 763 | 706 | 8.1% |
| (IL, MN, OH) | Dollars | $172,805 | $120,504 | 43.4% | $142,306 | $101,510 | 40.2% | $223,759 | $182,927 | 22.3% |
| Avg. Price | $332,957 | $285,555 | 16.6% | $324,899 | $274,352 | 18.4% | $293,262 | $259,103 | 13.2% | |
| Southeast | ||||||||||
| (includes unconsolidated joint ventures) | Home | 411 | 348 | 18.1% | 319 | 347 | (8.1)% | 353 | 394 | (10.4)% |
| (FL, GA, NC, SC) | Dollars | $132,824 | $112,764 | 17.8% | $103,373 | $106,975 | (3.4)% | $122,444 | $131,522 | (6.9)% |
| Avg. Price | $323,173 | $324,033 | (0.3)% | $324,052 | $308,286 | 5.1% | $346,867 | $333,812 | 3.9% | |
| Southwest | ||||||||||
| (includes unconsolidated joint ventures) | Home | 1,299 | 1,342 | (3.2)% | 1,009 | 992 | 1.7% | 1,060 | 1,027 | 3.2% |
| (AZ, TX) | Dollars | $484,485 | $428,069 | 13.2% | $356,584 | $292,297 | 22.0% | $423,221 | $352,139 | 20.2% |
| Avg. Price | $372,968 | $318,978 | 16.9% | $353,403 | $294,655 | 19.9% | $399,265 | $342,881 | 16.4% | |
| West | ||||||||||
| (includes unconsolidated joint ventures) | Home | 270 | 208 | 29.8% | 165 | 147 | 12.2% | 161 | 155 | 3.9% |
| (CA) | Dollars | $112,094 | $124,249 | (9.8)% | $67,638 | $77,308 | (12.5)% | $76,313 | $102,644 | (25.7)% |
| Avg. Price | $415,163 | $597,351 | (30.5)% | $409,929 | $525,907 | (22.1)% | $473,992 | $662,221 | (28.4)% | |
| Grand Total | ||||||||||
| Home | 3,260 | 3,109 | 4.9% | 2,509 | 2,469 | 1.6% | 3,092 | 3,032 | 2.0% | |
| Dollars | $1,272,110 | $1,158,835 | 9.8% | $943,547 | $871,470 | 8.3% | $1,233,534 | $1,135,740 | 8.6% | |
| Avg. Price | $390,218 | $372,735 | 4.7% | $376,065 | $352,965 | 6.5% | $398,944 | $374,584 | 6.5% | |
| Consolidated Total | ||||||||||
| Home | 3,115 | 2,901 | 7.4% | 2,372 | 2,271 | 4.4% | 2,972 | 2,797 | 6.3% | |
| Dollars | $1,203,897 | $1,077,299 | 11.8% | $888,643 | $793,483 | 12.0% | $1,171,101 | $1,046,255 | 11.9% | |
| Avg. Price | $386,484 | $371,354 | 4.1% | $374,639 | $349,398 | 7.2% | $394,045 | $374,063 | 5.3% | |
| Unconsolidated Joint Ventures | ||||||||||
| Home | 145 | 208 | (30.3)% | 137 | 198 | (30.8)% | 120 | 235 | (48.9)% | |
| Dollars | $68,213 | $81,536 | (16.3)% | $54,904 | $77,987 | (29.6)% | $62,433 | $89,485 | (30.2)% | |
| Avg. Price | $470,436 | $391,998 | 20.0% | $400,758 | $393,875 | 1.7% | $520,271 | $380,787 | 36.6% | |
| DELIVERIES INCLUDE EXTRAS | ||||||||||
| Notes: | ||||||||||
| (1) Net contracts are defined as new contracts signed during the period for the purchase of homes, less cancellations of prior contracts. | ||||||||||