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Press release from GlobeNewswire (a Nasdaq OMX company)

Hovnanian Enterprises Reports Fiscal 2013 Third Quarter Results

Monday, September 09, 2013

Hovnanian Enterprises Reports Fiscal 2013 Third Quarter Results

06:15 EDT Monday, September 09, 2013

RED BANK, N.J., Sept. 9, 2013 (GLOBE NEWSWIRE) -- Hovnanian Enterprises, Inc. (NYSE:HOV), a leading national homebuilder, reported results for its third quarter and nine months ended July 31, 2013.

RESULTS FOR THE THREE AND NINE MONTH PERIODS ENDED JULY 31, 2013:

  • Total revenues were $478.4 million for the third quarter of fiscal 2013 up 23.6% compared with $387.0 million in the third quarter of the prior year. For the nine months ended July 31, 2013, total revenues increased 26.2% to $1.26 billion compared with $998.3 million in last year's first nine months.
     
  • Homebuilding gross margin percentage, before interest expense and land charges included in cost of sales, increased 210 basis points to 20.3% during the third quarter of 2013 compared with 18.2% in the same period of the prior year, and was up 140 basis points compared to the 18.9% reported for the second quarter of 2013.
     
  • For the nine months ended July 31, 2013, homebuilding gross margin percentage, before interest expense and land charges included in cost of sales, was 18.9% compared with 17.5% during the same period a year ago.
     
  • Pre-tax income during the fiscal 2013 third quarter was $11.0 million, excluding land-related charges and gain on extinguishment of debt, compared with a pre-tax loss of $7.4 million in last year's third quarter.
     
  • In the first nine months of fiscal 2013, the pre-tax loss, excluding land-related charges, expenses associated with the debt exchange offer and gain on extinguishment of debt, was $8.2 million compared with a pre-tax loss of $63.1 million in the prior year's first nine months.
     
  • Net income was $8.5 million, or $0.06 per common share, during the third quarter of 2013, compared with $34.7 million, which included a $36.5 million income tax benefit and $6.2 million gain on extinguishment of debt, or $0.25 per common share, in the third quarter of fiscal 2012.
     
  • For the nine months ended July 31, 2013, the net loss was $1.5 million, or $0.01 per common share, compared with net income of $18.2 million, which included a $35.3 million income tax benefit and $58.0 million gain on extinguishment of debt, or $0.15 per common share, in the first nine months of fiscal 2012.
     
  • Deliveries, including unconsolidated joint ventures, were 1,502 homes for the fiscal 2013 third quarter, up 8.3% compared with 1,387 homes during the third quarter of 2012. For the nine months ended July 31, 2013, deliveries, including unconsolidated joint ventures, were 4,114 homes compared with 3,606 homes in the first nine months of 2012, an increase of 14.1%.
     
  • The dollar value of net contracts, including unconsolidated joint ventures, for the three months ended July 31, 2013 increased 7.9% to $546.9 million compared with $507.0 million in the third quarter of the prior year. The number of net contracts increased 1.8% to 1,568 homes in the third quarter of 2013 from 1,541 homes in the 2012 third quarter.
     
  • The dollar value of net contracts, including unconsolidated joint ventures, for the first nine months of fiscal 2013 increased 21.6% to $1.71 billion compared with $1.40 billion in first nine months of the prior year. The number of net contracts increased 10.6% to 4,862 homes for the nine months ended July 31, 2013 from 4,395 homes in the first nine months last year.
     
  • Contract backlog, as of July 31, 2013, including unconsolidated joint ventures, was $1.03 billion for 2,893 homes, which was an increase of 26.8% and 18.0%, respectively, compared to July 31, 2012.
     
  • Total SG&A was $56.4 million, or 11.8% of total revenues, during the fiscal 2013 third quarter compared to $48.1 million, or 12.4% of total revenues, in last year's third quarter. In the first nine months of fiscal 2013, total SG&A was $157.2 million, or 12.5% of total revenues, compared with $141.6 million or 14.2% of total revenues in first nine months of the prior year.
     
  • Total interest expense as a percentage of total revenues declined 250 basis points to 7.5% in the third quarter of 2013 compared with 10.0% in the 2012 third quarter. For the nine months ended July 31, 2013, total interest expense as a percentage of total revenues declined 310 basis points to 8.2% compared with 11.3% in the first nine months of the prior year.
     
  • Adjusted EBITDA increased to $48.6 million for the third quarter of fiscal 2013 compared to $33.9 million in the third quarter of the prior year. For the nine months ended July 31, 2013, Adjusted EBITDA was $102.2 million compared with $57.2 million in last year's first nine months.
     
  • The contract cancellation rate, including unconsolidated joint ventures, during the third quarter of 2013 was 18%, compared with 21% in the same period of the prior year.
     
  • The valuation allowance was $941.1 million as of July 31, 2013. 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.

LIQUIDITY AND INVENTORY AS OF JULY 31, 2013:

  • During the third quarter of 2013, $147.7 million was spent on land and land development compared with an average quarterly land and land development spend of $115.0 million for each of the first two quarters of fiscal 2013. Homebuilding cash was $226.7 million as of July 31, 2013, including $5.2 million of restricted cash required to collateralize letters of credit.
     
  • As of July 31, 2013, the land position, including unconsolidated joint ventures, was 32,523 lots, consisting of 14,224 lots under option and 18,299 owned lots, compared with a total of 29,089 lots as of July 31, 2012.

COMMENTS FROM MANAGEMENT:

"We were pleased that we were able to raise home prices, grow revenues and increase our gross margin during the third quarter of fiscal 2013," stated Ara K. Hovnanian, Chairman of the Board, President and Chief Executive Officer. "Our emphasis on raising home prices combined with concerns over rising mortgage rates and weakened consumer confidence dampened our home sales during July and August of 2013. We believe we are in a period where consumers are adjusting to current home prices and mortgage rates and remain confident that the combination of pent-up housing demand and the positive long-term demographic trends for housing will drive increased demand for new homes going forward. We continue to project profitability for the full fiscal 2013 year and strong results for our fourth quarter, excluding any expenses related to early retirement of debt," concluded Mr. Hovnanian.

"We ended the third quarter of fiscal 2013 with $227 million of homebuilding cash," said J. Larry Sorsby, Executive Vice President and Chief Financial Officer. "During the third quarter, we increased our liquidity beyond the cash we have on hand with the addition of a $75 million revolving credit facility, providing us with increased financial flexibility. This additional liquidity will allow us to invest in even more new land parcels and increase further our participation in the housing industry's recovery," concluded Mr. Sorsby. 

WEBCAST INFORMATION:

Hovnanian Enterprises will webcast its fiscal 2013 third quarter financial results conference call at 11:00 a.m. E.T. on Monday, September 9, 2013. 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 "Audio Archives" 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, Parkwood Builders, Town & Country Homes and Oster Homes. 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 2012 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 or fax lists, 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, expenses associated with debt exchange offer and 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 of EBIT, EBITDA and Adjusted EBITDA to net income (loss) is presented in a table attached to this earnings release.

Income (Loss) Before Income Taxes Excluding Land-Related Charges, Expenses Associated with the Debt Exchange Offer and 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 of Income (Loss) Before Income Taxes Excluding Land-Related Charges, Expenses Associated with the Debt Exchange Offer and Gain on Extinguishment of Debt to Income ( 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." 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) changes in market conditions and seasonality of the Company's business, (4) changes in home prices and sales activity in the markets where the Company builds homes, (5) government regulation, including regulations concerning development of land, the home building, sales and customer financing processes, tax laws, and the environment, (6) fluctuations in interest rates and the availability of mortgage financing, (7) shortages in, and price fluctuations of, raw materials and labor, (8) the availability and cost of suitable land and improved lots, (9) levels of competition, (10) availability of financing to the Company, (11) utility shortages and outages or rate fluctuations, (12) levels of indebtedness and restrictions on the Company's operations and activities imposed by the agreements governing the Company's outstanding indebtedness, (13) the Company's sources of liquidity, (14) changes in credit ratings, (15) availability of net operating loss carryforwards, (16) operations through joint ventures with third parties, (17) product liability litigation, warranty claims and claims by mortgage investors, (18) successful identification and integration of acquisitions, (19) significant influence of the Company's controlling stockholders, (20) changes in tax laws affecting the after-tax costs of owning a home, (21) geopolitical risks, terrorist acts and other acts of war, and (22) other factors described in detail in the Company's Annual Report on Form 10-K for the year ended October 31, 2012. Except as otherwise required by applicable securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.

(Financial Tables Follow)

         
         
Hovnanian Enterprises, Inc.        
July 31, 2013        
Statements of Consolidated Operations        
(Dollars in Thousands, Except Per Share Data)        
  Three Months Ended
July 31,
Nine Months Ended
July 31,
  2013 2012 2013 2012
  (Unaudited) (Unaudited)
Total Revenues $478,357 $387,011 $1,259,566 $998,309
Costs and Expenses (a) 471,659 395,910 1,278,051 1,075,640
Gain on Extinguishment of Debt  --  6,230  --  57,966
Income from Unconsolidated Joint Ventures 3,690 852 6,806 2,324
Income (Loss) Before Income Taxes 10,388 (1,817) (11,679) (17,041)
Income Tax Provision (Benefit) 1,922 (36,493) (10,155) (35,254)
Net Income (Loss) $8,466 $34,676  $(1,524) $18,213
         
Per Share Data:        
Basic:        
Income (Loss) Per Common Share  $0.06 $0.25  $(0.01) $0.15
Weighted Average Number of Common Shares Outstanding (b) 146,056 138,472 144,840 121,357
Assuming Dilution:        
Income (Loss) Per Common Share  $0.06 $0.25  $(0.01) $0.15
Weighted Average Number of Common Shares Outstanding (b) 162,823 138,552 144,840 121,380
         
(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.        
July 31, 2013        
Reconciliation of Income (Loss) Before Income Taxes Excluding Land-Related
Charges, Expenses Associated with the Debt Exchange Offer and 
Gain on Extinguishment of Debt to Income (Loss) Before Income Taxes
(Dollars in Thousands)
  Three Months Ended
July 31,
Nine Months Ended
July 31,
  2013 2012 2013 2012
  (Unaudited) (Unaudited)
Income (Loss) Before Income Taxes $10,388  $(1,817)  $(11,679)  $(17,041)
Inventory Impairment Loss and Land Option Write-Offs 623 689 3,479 7,230
Expenses Associated with the Debt Exchange Offer  --  --   --  4,683
Gain on Extinguishment of Debt  --  (6,230)  --  (57,966)
Income (Loss) Before Income Taxes Excluding Land-Related Charges, Expenses Associated with the Debt Exchange Offer and Gain on Extinguishment of Debt (a) $11,011  $(7,358)  $(8,200)  $(63,094)
         
(a) Income (Loss) Before Income Taxes Excluding Land-Related Charges, Expenses Associated with the Debt Exchange Offer and 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.        
July 31, 2013        
Gross Margin        
(Dollars in Thousands)        
  Homebuilding Gross Margin
Three Months Ended
July 31,
Homebuilding Gross Margin
Nine Months Ended
July 31,
  2013 2012 2013 2012
  (Unaudited) (Unaudited)
Sale of Homes $462,376 $371,481 $1,206,233 $936,305
Cost of Sales, Excluding Interest (a) 368,617 303,760 978,309 772,368
Homebuilding Gross Margin, Excluding Interest 93,759 67,721 227,924 163,937
Homebuilding Cost of Sales Interest 13,702 14,178 35,089 34,829
Homebuilding Gross Margin, Including Interest $80,057 $53,543 $192,835 $129,108
         
Gross Margin Percentage, Excluding Interest 20.3% 18.2% 18.9% 17.5%
Gross Margin Percentage, Including Interest 17.3% 14.4% 16.0% 13.8%
         
  Land Sales Gross Margin
Three Months Ended
July 31,
Land Sales Gross Margin
Nine Months Ended
July 31,
  2013 2012 2013 2012
  (Unaudited) (Unaudited)
Land Sales $1,940 $1,823 $15,218 $28,737
Cost of Sales, Excluding Interest (a) 1,847 1,418 14,053 21,800
Land Sales Gross Margin, Excluding Interest 93 405 1,165 6,937
Land Sales Interest 55 120 222 5,262
Land Sales Gross Margin, Including Interest $38 $285 $943 $1,675
         
(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.         
July 31, 2013        
Reconciliation of Adjusted EBITDA to Net Income (Loss)         
(Dollars in Thousands)         
  Three Months Ended
July 31,
Nine Months Ended
July 31,
  2013 2012 2013 2012
  (Unaudited) (Unaudited)
Net Income (Loss)  $8,466 $34,676  $(1,524) $18,213
Income Tax Provision (Benefit)  1,922 (36,493) (10,155) (35,254)
Interest Expense  35,706 38,888 103,892 112,732
EBIT (a) 46,094 37,071 92,213 95,691
Depreciation  938 1,494 3,782 4,711
Amortization of Debt Costs  907 912 2,718 2,808
EBITDA (b) 47,939 39,477 98,713 103,210
Inventory Impairment Loss and Land Option Write-offs 623 689 3,479 7,230
Expenses Associated with Debt Exchange Offer   --   --   --  4,683
Gain on Extinguishment of Debt   --  (6,230)  --  (57,966)
Adjusted EBITDA (c) $48,562 $33,936 $102,192 $57,157
         
Interest Incurred  $33,195 $39,477 $97,813 $110,315
         
Adjusted EBITDA to Interest Incurred  1.46 0.86 1.04 0.52
         
         
(a) 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.
(b) 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. 
(c) 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, expenses associated with debt exchange offer, and gain on extinguishment of debt.
         
         
Hovnanian Enterprises, Inc.        
July 31, 2013        
Interest Incurred, Expensed and Capitalized        
(Dollars in Thousands)        
  Three Months Ended
July 31,
Nine Months Ended
July 31,
  2013 2012 2013 2012
  (Unaudited) (Unaudited)
Interest Capitalized at Beginning of Period $112,488 $118,435 $116,056 $121,441
Plus Interest Incurred 33,195 39,477 97,813 110,315
Less Interest Expensed 35,706 38,888 103,892 112,732
Interest Capitalized at End of Period (a) $109,977 $119,024 $109,977 $119,024
         
(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)
     
  July 31,
2013
October 31,
2012
  (Unaudited) (1)
ASSETS    
     
Homebuilding:    
Cash $221,500 $258,323
Restricted cash and cash equivalents 11,085 41,732
Inventories:    
Sold and unsold homes and lots under development 755,496 671,851
Land and land options held for future development or sale 252,847 218,996
Consolidated inventory not owned  109,665 90,619
Total inventories 1,118,008 981,466
Investments in and advances to unconsolidated joint ventures 54,346 61,083
Receivables, deposits, and notes – net 47,542 61,794
Property, plant, and equipment – net 46,906 48,524
Prepaid expenses and other assets 59,981 66,694
Total homebuilding 1,559,368 1,519,616
     
Financial services:    
Cash 5,758 14,909
Restricted cash and cash equivalents 12,935 22,470
Mortgage loans held for sale at fair value 84,026 117,024
Other assets 2,039 10,231
Total financial services 104,758 164,634
Total assets $1,664,126 $1,684,250
     
(1) Derived from the audited balance sheet as of October 31, 2012.
     
     
HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands Except Share and Per Share Amounts)
     
  July 31, 2013 October 31, 2012
  (Unaudited) (1)
LIABILITIES AND EQUITY    
     
Homebuilding:    
Nonrecourse mortgages $55,286 $38,302
Accounts payable and other liabilities 289,496 296,510
Customers' deposits 37,922 23,846
Nonrecourse mortgages secured by operating properties 18,000 18,775
Liabilities from inventory not owned 94,484 77,791
Total homebuilding 495,188 455,224
     
Financial services:    
Accounts payable and other liabilities 23,690 37,609
Mortgage warehouse lines of credit 57,452 107,485
Total financial services 81,142 145,094
     
Notes payable:    
Senior secured notes 978,295 977,369
Senior notes 459,145 458,736
Senior amortizing notes 20,857 23,149
Senior exchangeable notes 65,772 76,851
TEU senior subordinated amortizing notes 3,181 6,091
Accrued interest 25,002 20,199
Total notes payable 1,552,252 1,562,395
Income taxes payable 2,748 6,882
Total liabilities 2,131,330 2,169,595
     
Equity:    
Hovnanian Enterprises, Inc. stockholders' equity deficit:    
Preferred stock, $.01 par value - authorized 100,000 shares; issued 5,600 shares with a liquidation preference of $140,000 at July 31, 2013 and at October 31, 2012 135,299 135,299
Common stock, Class A, $.01 par value – authorized 400,000,000 shares; issued 136,305,223 shares at July 31, 2013 and 130,055,304 shares at October 31, 2012 (including 11,760,763 shares at July 31, 2013 and October 31, 2012 held in Treasury) 1,363 1,300
Common stock, Class B, $.01 par value (convertible to Class A at time of sale) – authorized 60,000,000 shares; issued 15,348,615 shares at July 31, 2013 and 15,350,101 shares at October 31, 2012 (including 691,748 shares at July 31, 2013 and October 31, 2012 held in Treasury) 153 154
Paid in capital - common stock 688,145 668,735
Accumulated deficit (1,177,227) (1,175,703)
Treasury stock - at cost (115,360) (115,360)
Total Hovnanian Enterprises, Inc. stockholders' equity deficit (467,627) (485,575)
Noncontrolling interest in consolidated joint ventures 423 230
Total equity deficit (467,204) (485,345)
Total liabilities and equity $1,664,126 $1,684,250
     
(1) Derived from the audited balance sheet as of October 31, 2012.
         
         
HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands Except Per Share Data)
(Unaudited)
         
  Three Months Ended
July 31,
Nine Months Ended
July 31,
  2013 2012 2013 2012
Revenues:        
Homebuilding:        
Sale of homes $462,376 $371,481 $1,206,233 $936,305
Land sales and other revenues 3,103 4,743 18,114 36,014
Total homebuilding 465,479 376,224 1,224,347 972,319
Financial services 12,878 10,787 35,219 25,990
Total revenues 478,357 387,011 1,259,566 998,309
         
Expenses:        
Homebuilding:        
Cost of sales, excluding interest 370,464 305,178 992,362 794,168
Cost of sales interest 13,757 14,298 35,311 40,091
Inventory impairment loss and land option write-offs 623 689 3,479 7,230
Total cost of sales 384,844 320,165 1,031,152 841,489
Selling, general and administrative 42,331 36,230 116,904 104,609
Total homebuilding expenses 427,175 356,395 1,148,056 946,098
         
Financial services 6,640 6,111 21,205 16,651
Corporate general and administrative 14,056 11,913 40,284 36,961
Other interest 21,949 24,590 68,581 72,641
Other operations 1,839 (3,099) (75) 3,289
Total expenses 471,659 395,910 1,278,051 1,075,640
Gain on extinguishment of debt -- 6,230 -- 57,966
Income from unconsolidated joint ventures 3,690 852 6,806 2,324
Income (loss) before income taxes 10,388 (1,817) (11,679) (17,041)
State and federal income tax provision (benefit):        
State 1,922 (36,563) (277) (35,461)
Federal -- 70 (9,878) 207
Total income taxes 1,922 (36,493) (10,155) (35,254)
Net income (loss) $8,466 $34,676  $(1,524) $18,213
Per share data:        
Basic:        
Income (loss) per common share $0.06 $0.25  $(0.01) $0.15
Weighted-average number of common shares outstanding 146,056 138,472 144,840 121,357
Assuming dilution:        
Income (loss) per common share $0.06 $0.25  $(0.01) $0.15
Weighted-average number of common shares outstanding 162,823 138,552 144,840 121,380
                   
                   
HOVNANIAN ENTERPRISES, INC.                  
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE)     Communities Under Development      
(UNAUDITED)    Three Months - July 31, 2013            
    Net Contracts (1) Deliveries Contract
    Three Months Ended Three Months Ended Backlog
    Jul 31, Jul 31, Jul 31,
    2013 2012 % Change 2013 2012 % Change 2013 2012 % Change
Northeast                     
(includes unconsolidated joint ventures) Home 148 160 (7.5)% 186 206 (9.7)% 326 322 1.2%
(NJ, PA) Dollars $74,012 $82,295 (10.1)% $91,663 $104,403 (12.2)% $160,826 $155,056 3.7%
  Avg. Price $500,083 $514,341 (2.8)% $492,813 $506,811 (2.8)% $493,331 $481,540 2.4%
Mid-Atlantic                     
(includes unconsolidated joint ventures) Home 194 189 2.6% 256 223 14.8% 419 438 (4.3)%
(DE, MD, VA, WV) Dollars $96,977 $82,805 17.1% $119,698 $92,484 29.4% $209,207 $189,875 10.2%
  Avg. Price $499,881 $438,124 14.1% $467,569 $414,726 12.7% $499,300 $433,505 15.2%
Midwest                      
(includes unconsolidated joint ventures) Home 258 208 24.0% 184 160 15.0% 691 538 28.4%
(IL, MN, OH) Dollars $64,484 $53,425 20.7% $46,329 $36,688 26.3% $168,220 $123,274 36.5%
  Avg. Price $249,936 $256,853 (2.7)% $251,785 $229,300 9.8% $243,444 $229,133 6.2%
Southeast                     
(includes unconsolidated joint ventures) Home 217 175 24.0% 153 121 26.4% 436 310 40.6%
(FL, GA, NC, SC) Dollars $68,528 $45,783 49.7% $43,310 $30,305 42.9% $132,383 $80,384 64.7%
  Avg. Price $315,799 $261,615 20.7% $283,075 $250,455 13.0% $303,631 $259,304 17.1%
Southwest                     
(includes unconsolidated joint ventures) Home 663 614 8.0% 606 529 14.6% 882 635 38.9%
(AZ, TX) Dollars $195,403 $166,120 17.6% $181,593 $139,407 30.3% $287,719 $180,660 59.3%
  Avg. Price $294,726 $270,553 8.9% $299,658 $263,529 13.7% $326,212 $284,505 14.7%
West                     
(includes unconsolidated joint ventures) Home 88 195 (54.9)% 117 148 (20.9)% 139 209 (33.5)%
(CA) Dollars $47,470 $76,522 (38.0)% $56,474 $57,498 (1.8)% $74,004 $84,677 (12.6)%
  Avg. Price $539,432 $392,421 37.5% $482,685 $388,500 24.2% $532,405 $405,150 31.4%
Grand Total                    
  Home 1,568 1,541 1.8% 1,502 1,387 8.3% 2,893 2,452 18.0%
  Dollars $546,874 $506,950 7.9% $539,067 $460,785 17.0% $1,032,359 $813,926 26.8%
  Avg. Price $348,772 $328,974 6.0% $358,899 $332,217 8.0% $356,847 $331,944 7.5%
Consolidated Total                    
  Home 1,448 1,382 4.8% 1,341 1,212 10.6% 2,569 2,132 20.5%
  Dollars $494,594 $423,396 16.8% $462,376 $371,481 24.5% $897,186 $674,159 33.1%
  Avg. Price $341,571 $306,365 11.5% $344,800 $306,502 12.5% $349,236 $316,210 10.4%
Unconsolidated Joint Ventures                    
  Home 120 159 (24.5)% 161 175 (8.0)% 324 320 1.3%
  Dollars $52,280 $83,554 (37.4)% $76,691 $89,304 (14.1)% $135,173 $139,767 (3.3)%
  Avg. Price $435,667 $525,494 (17.1)% $476,339 $510,309 (6.7)% $417,201 $436,770 (4.5)%
                     
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)     Communities Under Development      
(UNAUDITED)    Nine Months - July 31, 2013            
    Net Contracts (1) Deliveries Contract
    Nine Months Ended Nine Months Ended Backlog
    Jul 31, Jul 31, Jul 31,
    2013 2012 % Change 2013 2012 % Change 2013 2012 % Change
Northeast                     
(includes unconsolidated joint ventures) Home 497 472 5.3% 465 516 (9.9)% 326 322 1.2%
(NJ, PA) Dollars $254,210 $239,378 6.2% $234,338 $255,705 (8.4)% $160,826 $155,056 3.7%
  Avg. Price $511,490 $507,157 0.9% $503,953 $495,552 1.7% $493,331 $481,540 2.4%
Mid-Atlantic                     
(includes unconsolidated joint ventures) Home 699 625 11.8% 646 557 16.0% 419 438 (4.3)%
(DE, MD, VA, WV) Dollars $335,076 $263,575 27.1% $289,068 $227,540 27.0% $209,207 $189,875 10.2%
  Avg. Price $479,365 $421,720 13.7% $447,474 $408,508 9.5% $499,300 $433,505 15.2%
Midwest                     
(includes unconsolidated joint ventures) Home 730 638 14.4% 538 400 34.5% 691 538 28.4%
(IL, MN, OH) Dollars $186,336 $148,245 25.7% $134,034 $92,140 45.5% $168,220 $123,274 36.5%
  Avg. Price $255,254 $232,360 9.9% $249,134 $230,350 8.2% $243,444 $229,133 6.2%
Southeast                     
(includes unconsolidated joint ventures) Home 590 484 21.9% 437 342 27.8% 436 310 40.6%
(FL, GA, NC, SC) Dollars $175,073 $122,269 43.2% $122,030 $85,326 43.0% $132,383 $80,384 64.7%
  Avg. Price $296,733 $252,622 17.5% $279,245 $249,491 11.9% $303,631 $259,304 17.1%
Southwest                     
(includes unconsolidated joint ventures) Home 2,001 1,667 20.0% 1,625 1,363 19.2% 882 635 38.9%
(AZ, TX) Dollars $590,189 $436,508 35.2% $463,309 $344,844 34.4% $287,719 $180,660 59.3%
  Avg. Price $294,947 $261,852 12.6% $285,113 $253,004 12.7% $326,212 $284,505 14.7%
West                      
(includes unconsolidated joint ventures) Home 345 509 (32.2)% 403 428 (5.8)% 139 209 (33.5)%
(CA) Dollars $165,289 $192,723 (14.2)% $173,258 $149,520 15.9% $74,004 $84,677 (12.6)%
  Avg. Price $479,099 $378,630 26.5% $429,921 $349,346 23.1% $532,405 $405,150 31.4%
Grand Total                    
  Home 4,862 4,395 10.6% 4,114 3,606 14.1% 2,893 2,452 18.0%
  Dollars $1,706,173 $1,402,698 21.6% $1,416,037 $1,155,075 22.6% $1,032,359 $813,926 26.8%
  Avg. Price $350,920 $319,158 10.0% $344,200 $320,320 7.5% $356,847 $331,944 7.5%
Consolidated Total                    
  Home 4,338 3,848 12.7% 3,658 3,144 16.3% 2,569 2,132 20.5%
  Dollars $1,471,102 $1,138,104 29.3% $1,206,233 $936,305 28.8% $897,186 $674,159 33.1%
  Avg. Price $339,120 $295,765 14.7% $329,752 $297,807 10.7% $349,236 $316,210 10.4%
Unconsolidated Joint Ventures                    
  Home 524 547 (4.2)% 456 462 (1.3)% 324 320 1.3%
  Dollars $235,071 $264,594 (11.2)% $209,804 $218,770 (4.1)% $135,173 $139,767 (3.3)%
  Avg. Price $448,607 $483,718 (7.3)% $460,095 $473,528 (2.8)% $417,201 $436,770 (4.5)%
                     
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.      
CONTACT: J. Larry Sorsby
Executive Vice President & CFO
732-747-7800
Jeffrey T. O'Keefe
Vice President, Investor Relations
732-747-7800

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