UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 8, 2016
HOVNANIAN ENTERPRISES, INC.
(Exact Name of Registrant as Specified in its Charter)
|
Delaware (State or Other Jurisdiction of Incorporation) |
1-8551 (Commission File Number) |
22-1851059 (IRS Employer Identification No.) |
110 West Front Street
P.O. Box 500
Red Bank, New Jersey 07701
(Address of Principal Executive Offices) (Zip Code)
(732) 747-7800
(Registrant’s telephone number, including area code)
Not Applicable
(Former Name or Former Address, if Changed Since
Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition.
On December 8, 2016, Hovnanian Enterprises, Inc. (the “Company”) issued a press release announcing its preliminary financial results for the fiscal fourth quarter and fiscal year ended October 31, 2016. A copy of the press release is attached as Exhibit 99.1.
The information in this Current Report on Form 8-K and the Exhibit attached hereto is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
The attached earnings press release contains information about 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”), which are non-GAAP financial measures. The most directly comparable GAAP financial measure is net income (loss). A reconciliation for historical periods of EBIT, EBITDA and Adjusted EBITDA to net income (loss) is contained in the earnings press release. The earnings press release contains information about Income (Loss) Before Income Taxes Excluding Land-Related Charges and Loss on Extinguishment of Debt which is a non-GAAP financial measure. The most directly comparable GAAP financial measure is Income (Loss) Before Income Taxes. A reconciliation for historical periods of Income (Loss) Before Income Taxes Excluding Land-Related Charges and Loss on Extinguishment of Debt to Income (Loss) Before Income Taxes is contained in the earnings press release.
Management believes EBITDA to be relevant and useful information as EBITDA is a standard measure commonly reported and widely used by analysts, investors and others to measure our financial performance and our ability to service our debt obligations. EBITDA is also one of several metrics used by our management to measure the cash generated from our operations. EBITDA does not take into account substantial costs of doing business, such as income taxes and interest expense. While many in the financial community consider EBITDA to be an important measure of comparative operating performance, it should be considered in addition to, but not as a substitute for, income (loss) before income taxes, net income (loss), cash flow (used in) provided by operating activities and other measures of financial performance and liquidity prepared in accordance with accounting principles generally accepted in the United States that are presented on the financial statements included in the Company’s reports filed with the Securities and Exchange Commission. Additionally, our calculation of EBITDA may be different than the calculation used by other companies, and, therefore, comparability may be affected.
Management believes Income (Loss) Before Income Taxes Excluding Land-Related Charges and Loss on Extinguishment of Debt to be relevant and useful information because it provides a better metric of the Company’s operating performance. Income (Loss) Before Income Taxes Excluding Land-Related Charges and Loss on Extinguishment of Debt should be considered in addition to, but not as a substitute for, income (loss) before income taxes, net income (loss) and other measures of financial performance prepared in accordance with accounting principles generally accepted in the United States that are presented on the financial statements included in the Company’s reports filed with the Securities and Exchange Commission. Additionally, our calculation of Income (Loss) Before Income Taxes Excluding Land-Related Charges and Loss on Extinguishment of Debt may be different than the calculation used by other companies, and, therefore, comparability may be affected.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit 99.1 Earnings Press Release–Fiscal Fourth Quarter and Fiscal Year Ended October 31, 2016.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| HOVNANIAN ENTERPRISES, INC. | ||
| (Registrant) | ||
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By: |
/s/ J. Larry Sorsby | |
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Name: J. Larry Sorsby | |
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Title: Executive Vice President and Chief Financial Officer | |
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Date: December 8, 2016
INDEX TO EXHIBITS
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Exhibit Number |
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Exhibit |
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Exhibit 99.1 |
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Earnings Press Release–Fiscal Fourth Quarter and Fiscal Year Ended October 31, 2016. |
Exhibit 99.1
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HOVNANIAN ENTERPRISES, INC. |
News Release |
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Contact: |
J. Larry Sorsby |
Jeffrey T. O’Keefe |
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Executive Vice President & CFO |
Vice President, Investor Relations | |
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732-747-7800 |
732-747-7800 | |
HOVNANIAN ENTERPRISES REPORTS fiscal 2016 Results
Reports 28% Growth in Total Revenues for All of Fiscal 2016
Reports Pretax Income for Fourth Quarter and Full Year
RED BANK, NJ, December 8, 2016 – Hovnanian Enterprises, Inc. (NYSE: HOV), a leading national homebuilder, reported results for its fiscal fourth quarter and year ended October 31, 2016.
RESULTS FOR the ThrEE and TWELVE month PERIODs ENDED October 31, 2016:
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Total revenues were $805.1 million in the fourth quarter of fiscal 2016, an increase of 16.1% compared with $693.2 million in the fourth quarter of fiscal 2015. For the year ended October 31, 2016, total revenues increased 28.1% to $2.75 billion compared with $2.15 billion in the prior year. |
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Total SG&A was $53.7 million, or 6.7% of total revenues, during the fourth quarter of fiscal 2016 compared with $49.4 million, or 7.1% of total revenues, in last year’s fourth quarter. Total SG&A was $253.1 million, or 9.2% of total revenues, for all of fiscal 2016 compared with $250.9 million, or 11.7% of total revenues, in the prior fiscal year. |
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Total interest expense as a percentage of total revenues was 6.0% during the fourth quarter of fiscal 2016 compared with 5.9% for the fourth quarter of fiscal 2015. For the twelve months ended October 31, 2016, total interest expense as a percentage of total revenues declined 30 basis points to 6.7% compared with 7.0% during the same period a year ago. |
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Homebuilding gross margin percentage, before interest expense and land charges included in cost of sales, was 17.6% for the fourth quarter ended October 31, 2016 compared with 18.0% for the fourth quarter of fiscal 2015. During all of fiscal 2016, homebuilding gross margin percentage, before interest expense and land charges included in cost of sales, was 16.9% compared with 17.6% in the same period of the previous year. |
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Income before income taxes in the fourth quarter of fiscal 2016 was $32.1 million compared with $37.4 million in the prior year’s fourth quarter. For all twelve months of fiscal 2016, income before income taxes was $2.4 million compared with a loss before income taxes of $21.8 million during all of fiscal 2015. |
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Income before income taxes, excluding land-related charges and loss on extinguishment of debt, in the fourth quarter of fiscal 2016 was $45.8 million compared with $41.8 million in the prior year’s fourth quarter. For fiscal 2016, income before income taxes, excluding land-related charges and loss on extinguishment of debt, was $39.0 million compared with a loss before income taxes, excluding land-related charges, of $9.7 million during fiscal 2015. |
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Net income was $22.3 million, or $0.14 per common share, for the fourth quarter of fiscal 2016, compared with $25.5 million, or $0.17 per common share, in the fourth quarter of the previous year. For the fiscal year ended October 31, 2016, the net loss was $2.8 million, or $0.02 per common share, compared with a net loss of $16.1 million, or $0.11 per common share, in all of fiscal 2015. |
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For the fourth quarter of fiscal 2016, Adjusted EBITDA increased 13.6% to $96.4 million compared with $84.9 million during the fourth quarter of 2015. For all of fiscal 2016, Adjusted EBITDA increased 53.5% to $231.2 million compared with $150.6 million during all of fiscal 2015. |
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Adjusted EBITDA to interest incurred was 2.39x for fourth quarter of fiscal 2016 compared with 2.01x for the same quarter last year. For the twelve-month period ended October 31, 2016, Adjusted EBITDA to interest incurred was 1.39x compared with 0.91x for the same period one year ago. |
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Consolidated net contracts per active selling community increased 11.4% to 7.8 net contracts per active selling community for the fourth quarter of fiscal 2016 compared with 7.0 net contracts per active selling community in the fourth quarter of fiscal 2015. Net contracts per active selling community, including unconsolidated joint ventures, increased 4.2% to 7.4 net contracts per active selling community for the quarter ended October 31, 2016 compared with 7.1 net contracts, including unconsolidated joint ventures, per active selling community in the fourth quarter of fiscal 2015. |
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Consolidated active selling communities decreased 23.7% from 219 communities at the end of the prior year’s fourth quarter to 167 communities as of October 31, 2016, which was impacted by the sale of ten communities in Minneapolis and Raleigh and the conversion of four consolidated communities into unconsolidated joint venture communities. As of the end of the fourth quarter of fiscal 2016, active selling communities, including unconsolidated joint ventures, decreased 17.9% to 188 communities compared with 229 communities at October 31, 2015. |
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The dollar value of consolidated net contracts decreased 14.5% to $534.3 million for the three months ended October 31, 2016 compared with $624.9 million during the same quarter a year ago. The dollar value of net contracts, including unconsolidated joint ventures, during the fourth quarter of fiscal 2016 decreased 14.9% to $582.7 million compared with $684.3 million in last year’s fourth quarter. |
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The dollar value of consolidated net contracts increased 2.6% to $2.51 billion for all of fiscal 2016 compared with $2.45 billion in the previous fiscal year. The dollar value of net contracts, including unconsolidated joint ventures, for the twelve months ended October 31, 2016 increased 0.9% to $2.67 billion compared with $2.65 billion in fiscal 2015. |
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The number of consolidated net contracts, during the fourth quarter of fiscal 2016, decreased 15.4% to 1,299 homes compared with 1,535 homes in the prior year’s fourth quarter. In the fourth quarter of fiscal 2016, the number of net contracts, including unconsolidated joint ventures, decreased 14.7% to 1,389 homes from 1,629 homes during the fourth quarter of fiscal 2015. |
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The number of consolidated net contracts, during the twelve-month period ended October 31, 2016, decreased 1.2% to 6,109 homes compared with 6,183 homes in the same period of the previous year. During all of fiscal 2016, the number of net contracts, including unconsolidated joint ventures, was 6,380 homes, a decrease of 2.6% from 6,547 homes during fiscal 2015. |
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As of October 31, 2016, the dollar value of contract backlog, including unconsolidated joint ventures, was $1.22 billion, a decrease of 9.4% compared with $1.35 billion as of October 31, 2015. The dollar value of consolidated contract backlog, as of October 31, 2016, decreased 12.1% to $1.07 billion compared with $1.22 billion as of October 31, 2015. |
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As of October 31, 2016, the number of homes in contract backlog, including unconsolidated joint ventures, decreased 14.9% to 2,649 homes compared with 3,112 homes as of October 31, 2015. The number of homes in consolidated contract backlog, as of October 31, 2016, decreased 17.5% to 2,398 homes compared with 2,905 homes as of the end of the fourth quarter of fiscal 2015. |
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Consolidated deliveries were 1,870 homes in the fourth quarter of fiscal 2016, an 8.3% increase compared with 1,727 homes in the fourth quarter of fiscal 2015. For the three months ended October 31, 2016, deliveries, including unconsolidated joint ventures, increased 10.0% to 1,972 homes compared with 1,792 homes in the fourth quarter of the prior year. |
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Consolidated deliveries were 6,464 homes for all of fiscal 2016, a 17.4% increase compared with 5,507 homes in the same period of fiscal 2015. For the twelve months ended October 31, 2016, deliveries, including unconsolidated joint ventures, increased 16.2% to 6,712 homes compared with 5,776 homes in the twelve months of the prior fiscal year. |
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The contract cancellation rate, including unconsolidated joint ventures, for the fourth quarter of fiscal 2016 was 21%, compared with 20% in the fourth quarter of fiscal 2015. |
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The valuation allowance was $627.9 million as of October 31, 2016. 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 October 31, 2016:
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After paying off $320.0 million of debt that matured in October 2015, January 2016 and May 2016, total liquidity at the end of the fourth quarter of fiscal 2016 was $346.6 million. |
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During the fourth quarter of fiscal 2016, land and land development spending was $131.4 million compared with $192.1 million in last year’s fourth quarter. For the year ended October 31, 2016, land and land development spending was $567.0 million compared to $656.5 million in the prior fiscal year. |
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As of October 31, 2016, the land position, including unconsolidated joint ventures, was 31,281 lots, consisting of 14,165 lots under option and 17,116 owned lots, compared with a total of 37,659 lots as of October 31, 2015. |
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During the fourth quarter of fiscal 2016, approximately 2,100 lots, including unconsolidated joint ventures, were put under option or acquired in 37 communities. |
COMMENTS FROM MANAGEMENT:
“For fiscal 2016, we grew revenues by 28%, reduced our SG&A ratio by 250 basis points, paid off $260 million of public debt at maturity and returned to profitability. Nonetheless, fiscal 2016 was a very challenging year,” stated Ara K. Hovnanian, Chairman of the Board, President and Chief Executive Officer. “The debt markets remained closed to companies with our credit ratings and we needed to raise funds to pay off $260 million of maturing public debt. This led to our decision to enhance our liquidity by increasing our use of land bank financings and joint ventures, as well as exiting four underperforming markets. This adversely affected our ability to invest as aggressively in new land parcels as previously planned. However, we ended the year with a liquidity position of $347 million, allowing us to once again actively seek land investment opportunities, which should ultimately result in community count growth and, assuming no change in market conditions, higher levels of profitability in the future,” concluded Mr. Hovnanian.
Webcast Information:
Hovnanian Enterprises will webcast its fiscal 2016 fourth quarter financial results conference call at 11:00 a.m. E.T. on Thursday, December 8, 2016. 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, New Jersey, Ohio, Pennsylvania, South Carolina, Texas, Virginia, Washington, D.C. and West Virginia. The Company’s homes are marketed and sold under the trade 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 lifestyle communities.
Additional information on Hovnanian Enterprises, Inc., including a summary investment profile and the Company’s 2015 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 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.
Income (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 Income (Loss) Before Income Taxes. The reconciliation for historical periods of Income (Loss) Before Income Taxes Excluding Land-Related Charges and Loss on Extinguishment of Debt to Income (Loss) Before Income Taxes is presented in a table attached to this earnings release.
Total liquidity is comprised of $339.8 million of cash and cash equivalents, $1.7 million of restricted cash required to collateralize letters of credit and $5.1 million of availability under the unsecured revolving credit facility as of October 31, 2016.
FORWARD-LOOKING STATEMENTS
All statements in this press release that are not historical facts should be considered as “Forward-Looking Statements” within the meaning of the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such forward-looking statements include but are not limited to statements related to the Company’s goals and expectations with respect to its financial results for future financial periods. Although we believe that our plans, intentions and expectations reflected in, or suggested by, such forward-looking statements are reasonable, we can give no assurance that such plans, intentions or expectations will be achieved. By their nature, forward-looking statements: (i) speak only as of the date they are made, (ii) are not guarantees of future performance or results and (iii) are subject to risks, uncertainties and assumptions that are difficult to predict or quantify. Therefore, actual results could differ materially and adversely from those forward-looking statements as a result of a variety of factors. Such risks, uncertainties and other factors include, but are not limited to, (1) changes in general and local economic, industry and business conditions and impacts of 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 and terms 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; (22) increases in cancellations of agreements of sale; (23) loss of key management personnel or failure to attract qualified personnel; (24) information technology failures and data security breaches; (25) legal claims brought against us and not resolved in our favor; and (26) 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, 2015 and subsequent filings with the Securities and Exchange Commission. Except as otherwise required by applicable securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.
(Financial Tables Follow)
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Hovnanian Enterprises, Inc. |
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October 31, 2016 |
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Statements of Consolidated Operations |
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(Dollars in Thousands, Except Per Share Data) |
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Three Months Ended |
Twelve Months Ended |
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October 31, |
October 31, |
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2016 |
2015 |
2016 |
2015 |
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(Unaudited) |
(Unaudited) |
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Total Revenues |
$805,069 | $693,204 | $2,752,247 | $2,148,480 | ||||||||
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Costs and Expenses (a) |
770,609 | 657,506 | 2,742,265 | 2,174,414 | ||||||||
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Loss on Extinguishment of Debt |
(3,200 | ) | - | (3,200 | ) | - | ||||||
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Income (Loss) from Unconsolidated Joint Ventures |
881 | 1,699 | (4,346 | ) | 4,169 | |||||||
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Income (Loss) Before Income Taxes |
32,141 | 37,397 | 2,436 | (21,765 | ) | |||||||
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Income Tax Provision (Benefit) |
9,852 | 11,878 | 5,255 | (5,665 | ) | |||||||
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Net Income (Loss) |
$22,289 | $25,519 | $(2,819 | ) | $(16,100 | ) | ||||||
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Per Share Data: |
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Basic: |
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Income (Loss) Per Common Share |
$0.14 | $0.17 | $(0.02 | ) | $(0.11 | ) | ||||||
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Weighted Average Number of Common Shares Outstanding (b) |
147,521 | 147,057 | 147,451 | 146,899 | ||||||||
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Assuming Dilution: |
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Income (Loss) Per Common Share |
$0.14 | $0.16 | $(0.02 | ) | $(0.11 | ) | ||||||
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Weighted Average Number of Common Shares Outstanding (b) |
160,590 | 160,299 | 147,451 | 146,899 | ||||||||
(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.
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Hovnanian Enterprises, Inc. | ||||||||||
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October 31, 2016 | ||||||||||
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Reconciliation of Income (Loss) Before Income Taxes Excluding Land-Related Charges and Loss on Extinguishment of Debt to Income (Loss) Before Income Taxes | ||||||||||
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(Dollars in Thousands) |
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Three Months Ended |
Twelve Months Ended |
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October 31, |
October 31, |
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2016 |
2015 |
2016 |
2015 |
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(Unaudited) |
(Unaudited) |
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Income (Loss) Before Income Taxes |
$32,141 | $37,397 | $2,436 | $(21,765 | ) | |||||||
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Inventory Impairment Loss and Land Option Write-Offs |
10,438 | 4,426 | 33,353 | 12,044 | ||||||||
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Loss on Extinguishment of Debt |
3,200 | - | 3,200 | - | ||||||||
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Income (Loss) Before Income Taxes Excluding Land-Related Charges and Loss on Extinguishment of Debt (a) |
$45,779 | $41,823 | $38,989 | $(9,721 | ) | |||||||
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(a) Income (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 Income (Loss) Before Income Taxes. |
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Hovnanian Enterprises, Inc. |
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October 31, 2016 |
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Gross Margin |
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(Dollars in Thousands) |
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Homebuilding Gross Margin |
Homebuilding Gross Margin |
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Three Months Ended |
Twelve Months Ended |
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October 31, |
October 31, |
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2016 |
2015 |
2016 |
2015 |
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(Unaudited) |
(Unaudited) |
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Sale of Homes |
$777,472 | $673,330 | $2,600,790 | $2,088,129 | ||||||||
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Cost of Sales, Excluding Interest and Land Charges (a) |
640,580 | 552,462 | 2,162,284 | 1,721,336 | ||||||||
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Homebuilding Gross Margin, Excluding Interest and Land Charges |
136,892 | 120,868 | 438,506 | 366,793 | ||||||||
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Homebuilding Cost of Sales Interest |
25,302 | 19,959 | 86,593 | 59,574 | ||||||||
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Homebuilding Gross Margin, Including Interest and Excluding Land Charges |
$111,590 | $100,909 | $351,913 | $307,219 | ||||||||
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Gross Margin Percentage, Excluding Interest and Land Charges |
17.6 | % | 18.0 | % | 16.9 | % | 17.6 | % | ||||
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Gross Margin Percentage, Including Interest and Excluding Land Charges |
14.4 | % | 15.0 | % | 13.5 | % | 14.7 | % | ||||
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Land Sales Gross Margin |
Land Sales Gross Margin |
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Three Months Ended |
Twelve Months Ended |
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October 31, |
October 31, |
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2016 |
2015 |
2016 |
2015 |
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(Unaudited) |
(Unaudited) |
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Land and Lot Sales |
$5,990 | $- | $76,041 | $850 | ||||||||
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Cost of Sales, Excluding Interest and Land Charges (a) |
5,898 | - | 68,173 | 702 | ||||||||
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Land and Lot Sales Gross Margin, Excluding Interest and Land Charges |
92 | - | 7,868 | 148 | ||||||||
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Land and Lot Sales Interest |
396 | - | 5,798 | 39 | ||||||||
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Land and Lot Sales Gross Margin, Including Interest and Excluding Land Charges |
$(304 | ) | $- | $2,070 | $109 | |||||||
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(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 Consolidated Statements of Operations. |
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Hovnanian Enterprises, Inc. |
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October 31, 2016 |
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Reconciliation of Adjusted EBITDA to Net Income (Loss) |
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(Dollars in Thousands) |
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Three Months Ended |
Twelve Months Ended |
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October 31, |
October 31, |
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2016 |
2015 |
2016 |
2015 |
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(Unaudited) |
(Unaudited) |
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Net Income (Loss) |
$22,289 | $25,519 | $(2,819 | ) | $(16,100 | ) | ||||||
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Income Tax Provision (Benefit) |
9,852 | 11,878 | 5,255 | (5,665 | ) | |||||||
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Interest Expense |
48,197 | 41,200 | 183,358 | 151,448 | ||||||||
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EBIT (a) |
80,338 | 78,597 | 185,794 | 129,683 | ||||||||
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Depreciation |
957 | 835 | 3,565 | 3,388 | ||||||||
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Amortization of Debt Costs |
1,446 | 1,008 | 5,261 | 5,459 | ||||||||
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EBITDA (b) |
82,741 | 80,440 | 194,620 | 138,530 | ||||||||
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Inventory Impairment Loss and Land Option Write-offs |
10,438 | 4,426 | 33,353 | 12,044 | ||||||||
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Loss on Extinguishment of Debt |
3,200 | - | 3,200 | - | ||||||||
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Adjusted EBITDA (c) |
$96,379 | $84,866 | $231,173 | $150,574 | ||||||||
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Interest Incurred |
$40,341 | $42,157 | $166,824 | $166,188 | ||||||||
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Adjusted EBITDA to Interest Incurred |
2.39 | 2.01 | 1.39 | 0.91 | ||||||||
|
(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 and loss on extinguishment of debt. |
|
Hovnanian Enterprises, Inc. |
|
October 31, 2016 |
|
Interest Incurred, Expensed and Capitalized |
|
(Dollars in Thousands) |
|
Three Months Ended |
Twelve Months Ended |
|||||||||||
|
October 31, |
October 31, |
|||||||||||
|
2016 |
2015 |
2016 |
2015 |
|||||||||
|
(Unaudited) |
(Unaudited) |
|||||||||||
|
Interest Capitalized at Beginning of Period |
$104,544 | $122,941 | $123,898 | $109,158 | ||||||||
|
Plus Interest Incurred |
40,341 | 42,157 | 166,824 | 166,188 | ||||||||
|
Less Interest Expensed (a) |
48,197 | 41,200 | 183,358 | 151,448 | ||||||||
|
Less Interest Contributed to Unconsolidated Joint Venture (a) |
- | - | 10,676 | - | ||||||||
|
Interest Capitalized at End of Period (b) |
$96,688 | $123,898 | $96,688 | $123,898 | ||||||||
|
(a) Represents capitalized interest which was included as part of the assets contributed to the joint venture the Company entered into in November 2015. There was no impact to the Consolidated Statement of Operations as a result of this transaction. | ||||||||
|
(b) Capitalized interest amounts are shown gross before allocating any portion of impairments to capitalized interest. |
HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands)
|
October 31, 2016 |
October 31, 2015 |
|||||
|
(Unaudited) |
(1) | |||||
|
ASSETS |
||||||
|
Homebuilding: |
||||||
|
Cash and cash equivalents |
$339,773 | $245,398 | ||||
|
Restricted cash and cash equivalents |
3,914 | 7,299 | ||||
|
Inventories: |
||||||
|
Sold and unsold homes and lots under development |
899,082 | 1,307,850 | ||||
|
Land and land options held for future development or sale |
175,301 | 214,503 | ||||
|
Consolidated inventory not owned |
208,701 | 122,225 | ||||
|
Total inventories |
1,283,084 | 1,644,578 | ||||
|
Investments in and advances to unconsolidated joint ventures |
100,502 | 61,209 | ||||
|
Receivables, deposits and notes, net |
49,726 | 70,349 | ||||
|
Property, plant and equipment, net |
50,332 | 45,534 | ||||
|
Prepaid expenses and other assets |
71,246 | 77,671 | ||||
|
Total homebuilding |
1,898,577 | 2,152,038 | ||||
|
Financial services: |
||||||
|
Cash and cash equivalents |
6,992 | 8,347 | ||||
|
Restricted cash and cash equivalents |
19,034 | 19,223 | ||||
|
Mortgage loans held for sale at fair value |
165,083 | 130,320 | ||||
|
Other assets |
6,121 | 2,091 | ||||
|
Total financial services |
197,230 | 159,981 | ||||
|
Income taxes receivable – including net deferred tax benefits |
283,633 | 290,279 | ||||
|
Total assets |
$2,379,440 | $2,602,298 |
(1) Derived from the audited balance sheet as of October 31, 2015
HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands Except Share and Per Share Amounts)
|
October 31, 2016 |
October 31, 2015 |
|||||
|
(Unaudited) |
(1) | |||||
|
LIABILITIES AND EQUITY |
||||||
|
Homebuilding: |
||||||
|
Nonrecourse mortgages secured by inventory |
$83,470 | $143,863 | ||||
|
Accounts payable and other liabilities |
369,228 | 348,516 | ||||
|
Customers’ deposits |
37,429 | 44,218 | ||||
|
Nonrecourse mortgages secured by operating properties |
14,312 | 15,511 | ||||
|
Liabilities from inventory not owned |
153,151 | 105,856 | ||||
|
Total homebuilding |
657,590 | 657,964 | ||||
|
Financial services: |
||||||
|
Accounts payable and other liabilities |
26,857 | 27,908 | ||||
|
Mortgage warehouse lines of credit |
145,588 | 108,875 | ||||
|
Total financial services |
172,445 | 136,783 | ||||
|
Notes payable: |
||||||
|
Revolving credit agreement |
52,000 | 47,000 | ||||
|
Senior secured term loan |
75,000 | - | ||||
|
Senior secured notes, net of discount |
1,054,333 | 981,346 | ||||
|
Senior notes, net of discount |
400,000 | 780,319 | ||||
|
Senior amortizing notes |
6,316 | 12,811 | ||||
|
Senior exchangeable notes |
57,841 | 73,771 | ||||
|
Accrued interest |
32,425 | 40,388 | ||||
|
Total notes payable |
1,677,915 | 1,935,635 | ||||
|
Total liabilities |
2,507,950 | 2,730,382 | ||||
|
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, 2016 and 2015 |
135,299 | 135,299 | ||||
|
Common stock, Class A, $0.01 par value - authorized 400,000,000 shares; issued 143,806,775 shares at October 31, 2016 and 143,292,881 shares at October 31, 2015 (including 11,760,763 shares at October 31, 2016 and 2015 held in Treasury) |
1,438 | 1,433 | ||||
|
Common stock, Class B, $0.01 par value (convertible to Class A at time of sale) - authorized 60,000,000 shares; issued 15,942,809 shares at October 31, 2016 and 15,676,829 shares at October 31, 2015 (including 691,748 shares at October 31, 2016 and 2015 held in Treasury) |
159 | 157 | ||||
|
Paid in capital - common stock |
706,137 | 703,751 | ||||
|
Accumulated deficit |
(856,183 |
) |
(853,364 |
) | ||
|
Treasury stock - at cost |
(115,360 |
) |
(115,360 |
) | ||
|
Total stockholders' equity deficit |
(128,510 |
) |
(128,084 |
) | ||
|
Total liabilities and equity |
$2,379,440 | $2,602,298 |
(1) Derived from the audited balance sheet as of October 31, 2015
HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands Except Per Share Data)
(Unaudited)
|
Three Months Ended October 31, |
Twelve Months Ended October 31, |
|||||||||||
|
2016 |
2015 |
2016 |
2015 |
|||||||||
|
Revenues: |
||||||||||||
|
Homebuilding: |
||||||||||||
|
Sale of homes |
$777,472 | $673,330 | $2,600,790 | $2,088,129 | ||||||||
|
Land sales and other revenues |
6,694 | 1,148 | 78,840 | 3,686 | ||||||||
|
Total homebuilding |
784,166 | 674,478 | 2,679,630 | 2,091,815 | ||||||||
|
Financial services |
20,903 | 18,726 | 72,617 | 56,665 | ||||||||
|
Total revenues |
805,069 | 693,204 | 2,752,247 | 2,148,480 | ||||||||
|
Expenses: |
||||||||||||
|
Homebuilding: |
||||||||||||
|
Cost of sales, excluding interest |
646,478 | 552,462 | 2,230,457 | 1,722,038 | ||||||||
|
Cost of sales interest |
25,698 | 19,959 | 92,391 | 59,613 | ||||||||
|
Inventory impairment loss and land option write-offs |
10,438 | 4,426 | 33,353 | 12,044 | ||||||||
|
Total cost of sales |
682,614 | 576,847 | 2,356,201 | 1,793,695 | ||||||||
|
Selling, general and administrative |
37,378 | 36,145 | 192,938 | 188,403 | ||||||||
|
Total homebuilding expenses |
719,992 | 612,992 | 2,549,139 | 1,982,098 | ||||||||
|
Financial services |
10,395 | 8,903 | 37,144 | 31,972 | ||||||||
|
Corporate general and administrative |
16,337 | 13,231 | 60,141 | 62,506 | ||||||||
|
Other interest |
22,499 | 21,241 | 90,967 | 91,835 | ||||||||
|
Other operations |
1,386 | 1,139 | 4,874 | 6,003 | ||||||||
|
Total expenses |
770,609 | 657,506 | 2,742,265 | 2,174,414 | ||||||||
|
Loss on extinguishment of debt |
(3,200 | ) | - | (3,200 | ) | - | ||||||
|
Income (loss) from unconsolidated joint ventures |
881 | 1,699 | (4,346 | ) | 4,169 | |||||||
|
Income (loss) before income taxes |
32,141 | 37,397 | 2,436 | (21,765 | ) | |||||||
|
State and federal income tax provision (benefit): |
||||||||||||
|
State |
(2,538 | ) | 576 | 2,457 | 4,293 | |||||||
|
Federal |
12,390 | 11,302 | 2,798 | (9,958 | ) | |||||||
|
Total income taxes |
9,852 | 11,878 | 5,255 | (5,665 | ) | |||||||
|
Net income (loss) |
$22,289 | $25,519 | $(2,819 | ) | $(16,100 | ) | ||||||
|
Per share data: |
||||||||||||
|
Basic: |
||||||||||||
|
Income (loss) per common share |
$0.14 | $0.17 | $(0.02 | ) | $(0.11 | ) | ||||||
|
Weighted-average number of common shares outstanding |
147,521 | 147,057 | 147,451 | 146,899 | ||||||||
|
Assuming dilution: |
||||||||||||
|
Income (loss) per common share |
$0.14 | $0.16 | $(0.02 | ) | $(0.11 | ) | ||||||
|
Weighted-average number of common shares outstanding |
160,590 | 160,299 | 147,451 | 146,899 | ||||||||
HOVNANIAN ENTERPRISES, INC.
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE)
(SEGMENT DATA EXCLUDES UNCONSOLIDATED JOINT VENTURES)
| (UNAUDITED) | Communities Under Development | |||||||||
|
Three Months - October 31, 2016 |
||||||||||
|
Net Contracts(1) |
Deliveries |
Contract | ||||||||
|
Three Months Ended |
Three Months Ended |
Backlog | ||||||||
|
Oct 31, |
Oct 31, |
Oct 31, | ||||||||
|
2016 |
2015 |
% Change |
2016 |
2015 |
% Change |
2016 |
2015 |
% Change | ||
|
Northeast |
||||||||||
|
(NJ, PA) |
Home |
106 |
143 |
(25.9)% |
162 |
136 |
19.1% |
204 |
293 |
(30.4)% |
|
Dollars |
$50,179 |
$66,846 |
(24.9)% |
$81,467 |
$63,175 |
29.0% |
$99,512 |
$147,004 |
(32.3)% | |
|
Avg. Price |
$473,383 |
$467,455 |
1.3% |
$502,884 |
$464,522 |
8.3% |
$487,803 |
$501,719 |
(2.8)% | |
|
Mid-Atlantic |
||||||||||
|
(DE, MD, VA, WV) |
Home |
196 |
236 |
(16.9)% |
332 |
256 |
29.7% |
430 |
453 |
(5.1)% |
|
Dollars |
$99,179 |
$114,191 |
(13.1)% |
$162,902 |
$127,233 |
28.0% |
$248,974 |
$239,099 |
4.1% | |
|
Avg. Price |
$506,012 |
$483,860 |
4.6% |
$490,668 |
$497,004 |
(1.3)% |
$579,009 |
$527,812 |
9.7% | |
|
Midwest (2) |
||||||||||
|
(IL, MN, OH) |
Home |
125 |
232 |
(46.1)% |
215 |
284 |
(24.3)% |
374 |
644 |
(41.9)% |
|
Dollars |
$38,339 |
$73,693 |
(48.0)% |
$62,193 |
$91,122 |
(31.7)% |
$104,527 |
$194,290 |
(46.2)% | |
|
Avg. Price |
$306,712 |
$317,640 |
(3.4)% |
$289,271 |
$320,852 |
(9.8)% |
$279,485 |
$301,692 |
(7.4)% | |
|
Southeast (3) |
||||||||||
|
(FL, GA, NC, SC) |
Home |
141 |
168 |
(16.1)% |
164 |
220 |
(25.5)% |
332 |
279 |
19.0% |
|
Dollars |
$53,372 |
$58,382 |
(8.6)% |
$67,690 |
$63,074 |
7.3% |
$145,171 |
$105,935 |
37.0% | |
|
Avg. Price |
$378,522 |
$347,512 |
8.9% |
$412,744 |
$286,698 |
44.0% |
$437,261 |
$379,699 |
15.2% | |
|
Southwest |
||||||||||
|
(AZ, TX) |
Home |
551 |
571 |
(3.5)% |
796 |
686 |
16.0% |
763 |
1,033 |
(26.1)% |
|
Dollars |
$190,426 |
$216,371 |
(12.0)% |
$298,689 |
$262,713 |
13.7% |
$285,644 |
$422,711 |
(32.4)% | |
|
Avg. Price |
$345,601 |
$378,933 |
(8.8)% |
$375,237 |
$382,963 |
(2.0)% |
$374,370 |
$409,207 |
(8.5)% | |
|
West |
||||||||||
|
(CA) |
Home |
180 |
185 |
(2.7)% |
201 |
145 |
38.6% |
295 |
203 |
45.3% |
|
Dollars |
$102,819 |
$95,419 |
7.8% |
$104,531 |
$66,013 |
58.3% |
$185,274 |
$106,886 |
73.3% | |
|
Avg. Price |
$571,218 |
$515,780 |
10.7% |
$520,055 |
$455,262 |
14.2% |
$628,047 |
$526,531 |
19.3% | |
|
Consolidated Total |
||||||||||
|
Home |
1,299 |
1,535 |
(15.4)% |
1,870 |
1,727 |
8.3% |
2,398 |
2,905 |
(17.5)% | |
|
Dollars |
$534,314 |
$624,902 |
(14.5)% |
$777,472 |
$673,330 |
15.5% |
$1,069,102 |
$1,215,925 |
(12.1)% | |
|
Avg. Price |
$411,327 |
$407,102 |
1.0% |
$415,761 |
$389,884 |
6.6% |
$445,831 |
$418,563 |
6.5% | |
|
Unconsolidated Joint Ventures |
||||||||||
|
Home |
90 |
94 |
(4.3)% |
102 |
65 |
56.9% |
251 |
207 |
21.3% | |
|
Dollars |
$48,394 |
$59,441 |
(18.6)% |
$64,099 |
$37,730 |
69.9% |
$152,430 |
$132,082 |
15.4% | |
|
Avg. Price |
$537,706 |
$632,347 |
(15.0)% |
$628,417 |
$580,467 |
8.3% |
$607,292 |
$638,077 |
(4.8)% | |
|
Grand Total |
||||||||||
|
Home |
1,389 |
1,629 |
(14.7)% |
1,972 |
1,792 |
10.0% |
2,649 |
3,112 |
(14.9)% | |
|
Dollars |
$582,708 |
$684,343 |
(14.9)% |
$841,571 |
$711,060 |
18.4% |
$1,221,532 |
$1,348,007 |
(9.4)% | |
|
Avg. Price |
$419,516 |
$420,100 |
(0.1)% |
$426,760 |
$396,797 |
7.6% |
$461,130 |
$433,164 |
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. (2) The Midwest net contracts include 54 homes and $23.0 million in 2015 from Minneapolis, MN. Contract backlog as of October 31, 2016 reflects the reduction of 64 homes and $24.1 million, related to the sale of our land portfolio in Minneapolis, MN. (3) The Southeast net contracts include 29 homes and $12.2 million in 2015 from Raleigh, NC. Contract backlog as of October 31, 2016 reflects the reduction of 67 homes and $33.7 million, related to the sale of our land portfolio in Raleigh, NC. |
HOVNANIAN ENTERPRISES, INC.
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE)
(SEGMENT DATA INCLUDES UNCONSOLIDATED JOINT VENTURES)
|
(UNAUDITED) |
Communities Under Development |
|||||||||
|
Three Months - October 31, 2016 |
||||||||||
|
Net Contracts(1) |
Deliveries |
Contract | ||||||||
|
Three Months Ended |
Three Months Ended |
Backlog | ||||||||
|
Oct 31, |
Oct 31, |
Oct 31, | ||||||||
|
2016 |
2015 |
% Change |
2016 |
2015 |
% Change |
2016 |
2015 |
% Change | ||
|
Northeast |
||||||||||
|
(includes unconsolidated joint ventures) |
Home |
116 |
156 |
(25.6)% |
169 |
141 |
19.9% |
231 |
341 |
(32.3)% |
|
(NJ, PA) |
Dollars |
$54,173 |
$73,417 |
(26.2)% |
$83,790 |
$69,345 |
20.8% |
$109,775 |
$168,476 |
(34.8)% |
|
Avg. Price |
$467,009 |
$470,623 |
(0.8)% |
$495,797 |
$491,808 |
0.8% |
$475,215 |
$494,065 |
(3.8)% | |
|
Mid-Atlantic |
||||||||||
|
(includes unconsolidated joint ventures) |
Home |
208 |
244 |
(14.8)% |
348 |
288 |
20.8% |
470 |
467 |
0.6% |
|
(DE, MD, VA, WV) |
Dollars |
$107,998 |
$118,957 |
(9.2)% |
$171,133 |
$145,192 |
17.9% |
$279,063 |
$246,906 |
13.0% |
|
Avg. Price |
$519,220 |
$487,533 |
6.5% |
$491,759 |
$504,141 |
(2.5)% |
$593,751 |
$528,707 |
12.3% | |
|
Midwest (2) |
||||||||||
|
(includes unconsolidated joint ventures) |
Home |
126 |
232 |
(45.7)% |
218 |
284 |
(23.2)% |
386 |
644 |
(40.1)% |
|
(IL, MN, OH) |
Dollars |
$38,744 |
$73,693 |
(47.4)% |
$64,235 |
$91,121 |
(29.5)% |
$114,116 |
$194,290 |
(41.3)% |
|
Avg. Price |
$307,487 |
$317,640 |
(3.2)% |
$294,658 |
$320,850 |
(8.2)% |
$295,638 |
$301,692 |
(2.0)% | |
|
Southeast (3) |
||||||||||
|
(includes unconsolidated joint ventures) |
Home |
173 |
176 |
(1.7)% |
166 |
226 |
(26.5)% |
420 |
288 |
45.8% |
|
(FL, GA, NC, SC) |
Dollars |
$67,754 |
$62,941 |
7.6% |
$68,347 |
$65,449 |
4.4% |
$188,893 |
$110,860 |
70.4% |
|
Avg. Price |
$391,646 |
$357,617 |
9.5% |
$411,729 |
$289,596 |
42.2% |
$449,746 |
$384,930 |
16.8% | |
|
Southwest |
||||||||||
|
(includes unconsolidated joint ventures) |
Home |
558 |
571 |
(2.3)% |
796 |
686 |
16.0% |
770 |
1,033 |
(25.5)% |
|
(AZ, TX) |
Dollars |
$194,903 |
$216,371 |
(9.9)% |
$298,688 |
$262,713 |
13.7% |
$290,121 |
$422,711 |
(31.4)% |
|
Avg. Price |
$349,289 |
$378,932 |
(7.8)% |
$375,237 |
$382,963 |
(2.0)% |
$376,781 |
$409,207 |
(7.9)% | |
|
West |
||||||||||
|
(includes unconsolidated joint ventures) |
Home |
208 |
250 |
(16.8)% |
275 |
167 |
64.7% |
372 |
339 |
9.7% |
|
(CA) |
Dollars |
$119,136 |
$138,964 |
(14.3)% |
$155,378 |
$77,240 |
101.2% |
$239,564 |
$204,764 |
17.0% |
|
Avg. Price |
$572,769 |
$555,857 |
3.0% |
$565,010 |
$462,513 |
22.2% |
$643,990 |
$604,024 |
6.6% | |
|
Grand Total |
||||||||||
|
Home |
1,389 |
1,629 |
(14.7)% |
1,972 |
1,792 |
10.0% |
2,649 |
3,112 |
(14.9)% | |
|
Dollars |
$582,708 |
$684,343 |
(14.9)% |
$841,571 |
$711,060 |
18.4% |
$1,221,532 |
$1,348,007 |
(9.4)% | |
|
Avg. Price |
$419,516 |
$420,100 |
(0.1)% |
$426,760 |
$396,797 |
7.6% |
$461,130 |
$433,164 |
6.5% | |
|
Consolidated Total |
||||||||||
|
Home |
1,299 |
1,535 |
(15.4)% |
1,870 |
1,727 |
8.3% |
2,398 |
2,905 |
(17.5)% | |
|
Dollars |
$534,314 |
$624,902 |
(14.5)% |
$777,472 |
$673,330 |
15.5% |
$1,069,102 |
$1,215,925 |
(12.1)% | |
|
Avg. Price |
$411,327 |
$407,102 |
1.0% |
$415,761 |
$389,884 |
6.6% |
$445,831 |
$418,563 |
6.5% | |
|
Unconsolidated Joint Ventures |
||||||||||
|
Home |
90 |
94 |
(4.3)% |
102 |
65 |
56.9% |
251 |
207 |
21.3% | |
|
Dollars |
$48,394 |
$59,441 |
(18.6)% |
$64,099 |
$37,730 |
69.9% |
$152,430 |
$132,082 |
15.4% | |
|
Avg. Price |
$537,706 |
$632,347 |
(15.0)% |
$628,417 |
$580,467 |
8.3% |
$607,292 |
$638,077 |
(4.8)% |
|
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. (2) The Midwest net contracts include 54 homes and $23.0 million in 2015 from Minneapolis, MN. Contract backlog as of October 31, 2016 reflects the reduction of 64 homes and $24.1 million, related to the sale of our land portfolio in Minneapolis, MN. (3) The Southeast net contracts include 29 homes and $12.2 million in 2015 from Raleigh, NC. Contract backlog as of October 31, 2016 reflects the reduction of 67 homes and $33.7 million, related to the sale of our land portfolio in Raleigh, NC. | |||||||||||
HOVNANIAN ENTERPRISES, INC.
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE)
(SEGMENT DATA EXCLUDES UNCONSOLIDATED JOINT VENTURES)
|
(UNAUDITED) |
Communities Under Development |
|||||||||
|
Twelve Months - October 31, 2016 |
||||||||||
|
Net Contracts(1) |
Deliveries |
Contract | ||||||||
|
Twelve Months Ended |
Twelve Months Ended |
Backlog | ||||||||
|
Oct 31, |
Oct 31, |
Oct 31, | ||||||||
|
2016 |
2015 |
% Change |
2016 |
2015 |
% Change |
2016 |
2015 |
% Change | ||
|
Northeast |
||||||||||
|
(NJ, PA) |
Home |
468 |
527 |
(11.2)% |
557 |
380 |
46.6% |
204 |
293 |
(30.4)% |
|
Dollars |
$226,635 |
$262,726 |
(13.7)% |
$274,126 |
$189,049 |
45.0% |
$99,512 |
$147,004 |
(32.3)% | |
|
Avg. Price |
$484,261 |
$498,531 |
(2.9)% |
$492,147 |
$497,497 |
(1.1)% |
$487,803 |
$501,719 |
(2.8)% | |
|
Mid-Atlantic |
||||||||||
|
(DE, MD, VA, WV) |
Home |
949 |
936 |
1.4% |
960 |
854 |
12.4% |
430 |
453 |
(5.1)% |
|
Dollars |
$467,782 |
$448,307 |
4.3% |
$457,906 |
$398,132 |
15.0% |
$248,974 |
$239,099 |
4.1% | |
|
Avg. Price |
$492,920 |
$478,961 |
2.9% |
$476,985 |
$466,197 |
2.3% |
$579,009 |
$527,812 |
9.7% | |
|
Midwest (2) |
||||||||||
|
(IL, MN, OH) |
Home |
724 |
937 |
(22.7)% |
921 |
958 |
(3.9)% |
374 |
644 |
(41.9)% |
|
Dollars |
$222,835 |
$317,059 |
(29.7)% |
$287,469 |
$311,364 |
(7.7)% |
$104,527 |
$194,290 |
(46.2)% | |
|
Avg. Price |
$307,784 |
$338,376 |
(9.0)% |
$312,127 |
$325,015 |
(4.0)% |
$279,485 |
$301,692 |
(7.4)% | |
|
Southeast (3) |
||||||||||
|
(FL, GA, NC, SC) |
Home |
701 |
722 |
(2.9)% |
581 |
675 |
(13.9)% |
332 |
279 |
19.0% |
|
Dollars |
$287,538 |
$232,272 |
23.8% |
$214,585 |
$207,407 |
3.5% |
$145,171 |
$105,935 |
37.0% | |
|
Avg. Price |
$410,183 |
$321,706 |
27.5% |
$369,339 |
$307,269 |
20.2% |
$437,261 |
$379,699 |
15.2% | |
|
Southwest |
||||||||||
|
(AZ, TX) |
Home |
2,480 |
2,526 |
(1.8)% |
2,750 |
2,263 |
21.5% |
763 |
1,033 |
(26.1)% |
|
Dollars |
$887,341 |
$949,763 |
(6.6)% |
$1,024,410 |
$822,371 |
24.6% |
$285,644 |
$422,711 |
(32.4)% | |
|
Avg. Price |
$357,799 |
$375,995 |
(4.8)% |
$372,512 |
$363,399 |
2.5% |
$374,370 |
$409,207 |
(8.5)% | |
|
West |
||||||||||
|
(CA) |
Home |
787 |
535 |
47.1% |
695 |
377 |
84.4% |
295 |
203 |
45.3% |
|
Dollars |
$420,681 |
$238,080 |
76.7% |
$342,294 |
$159,806 |
114.2% |
$185,274 |
$106,886 |
73.3% | |
|
Avg. Price |
$534,539 |
$445,010 |
20.1% |
$492,509 |
$423,889 |
16.2% |
$628,047 |
$526,531 |
19.3% | |
|
Consolidated Total |
||||||||||
|
Home |
6,109 |
6,183 |
(1.2)% |
6,464 |
5,507 |
17.4% |
2,398 |
2,905 |
(17.5)% | |
|
Dollars |
$2,512,812 |
$2,448,207 |
2.6% |
$2,600,790 |
$2,088,129 |
24.6% |
$1,069,102 |
$1,215,925 |
(12.1)% | |
|
Avg. Price |
$411,329 |
$395,958 |
3.9% |
$402,350 |
$379,177 |
6.1% |
$445,831 |
$418,563 |
6.5% | |
|
Unconsolidated Joint Ventures |
||||||||||
|
Home |
271 |
364 |
(25.5)% |
248 |
269 |
(7.8)% |
251 |
207 |
21.3% | |
|
Dollars |
$160,924 |
$202,879 |
(20.7)% |
$140,576 |
$119,920 |
17.2% |
$152,430 |
$132,082 |
15.4% | |
|
Avg. Price |
$593,814 |
$557,359 |
6.5% |
$566,836 |
$445,799 |
27.2% |
$607,292 |
$638,077 |
(4.8)% | |
|
Grand Total |
||||||||||
|
Home |
6,380 |
6,547 |
(2.6)% |
6,712 |
5,776 |
16.2% |
2,649 |
3,112 |
(14.9)% | |
|
Dollars |
$2,673,736 |
$2,651,086 |
0.9% |
$2,741,366 |
$2,208,049 |
24.2% |
$1,221,532 |
$1,348,007 |
(9.4)% | |
|
Avg. Price |
$419,081 |
$404,931 |
3.5% |
$408,427 |
$382,280 |
6.8% |
$461,130 |
$433,164 |
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. (2) The Midwest net contracts include 65 homes and $27.4 million and 246 homes and $98.2 million in 2016 and 2015, respectively, from Minneapolis, MN. Contract backlog as of October 31, 2016 reflects the reduction of 64 homes and $24.1 million, related to the sale of our land portfolio in Minneapolis, MN. (3) The Southeast net contracts include 70 homes and $31.6 million and 128 homes and $42.4 million in 2016 and 2015, respectively, from Raleigh, NC. Contract backlog as of October 31, 2016 reflects the reduction of 67 homes and $33.7 million, related to the sale of our land portfolio in Raleigh, NC. |
HOVNANIAN ENTERPRISES, INC.
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE)
(SEGMENT DATA INCLUDES UNCONSOLIDATED JOINT VENTURES)
|
(UNAUDITED) |
Communities Under Development |
|||||||||
|
Twelve Months - October 31, 2016 |
||||||||||
|
Net Contracts(1) |
Deliveries |
Contract | ||||||||
|
Twelve Months Ended |
Twelve Months Ended |
Backlog | ||||||||
|
Oct 31, |
Oct 31, |
Oct 31, | ||||||||
|
2016 |
2015 |
% Change |
2016 |
2015 |
% Change |
2016 |
2015 |
% Change | ||
|
Northeast |
||||||||||
|
(includes unconsolidated joint ventures) |
Home |
472 |
577 |
(18.2)% |
582 |
402 |
44.8% |
231 |
341 |
(32.3)% |
|
(NJ, PA) |
Dollars |
$223,050 |
$286,792 |
(22.2)% |
$281,751 |
$199,896 |
40.9% |
$109,775 |
$168,476 |
(34.8)% |
|
Avg. Price |
$472,563 |
$497,040 |
(4.9)% |
$484,108 |
$497,255 |
(2.6)% |
$475,215 |
$494,065 |
(3.8)% | |
|
Mid-Atlantic |
||||||||||
|
(includes unconsolidated joint ventures) |
Home |
1,010 |
1,006 |
0.4% |
1,007 |
945 |
6.6% |
470 |
467 |
0.6% |
|
(DE, MD, VA, WV) |
Dollars |
$514,592 |
$485,551 |
6.0% |
$482,436 |
$448,605 |
7.5% |
$279,063 |
$246,906 |
13.0% |
|
Avg. Price |
$509,496 |
$482,654 |
5.6% |
$479,081 |
$474,714 |
0.9% |
$593,751 |
$528,707 |
12.3% | |
|
Midwest (2) |
||||||||||
|
(includes unconsolidated joint ventures) |
Home |
730 |
940 |
(22.3)% |
924 |
978 |
(5.5)% |
386 |
644 |
(40.1)% |
|
(IL, MN, OH) |
Dollars |
$234,466 |
$317,989 |
(26.3)% |
$289,511 |
$316,960 |
(8.7)% |
$114,116 |
$194,290 |
(41.3)% |
|
Avg. Price |
$321,186 |
$338,286 |
(5.1)% |
$313,324 |
$324,090 |
(3.3)% |
$295,638 |
$301,692 |
(2.0)% | |
|
Southeast (3) |
||||||||||
|
(includes unconsolidated joint ventures) |
Home |
783 |
773 |
1.3% |
584 |
746 |
(21.7)% |
420 |
288 |
45.8% |
|
(FL, GA, NC, SC) |
Dollars |
$327,378 |
$254,484 |
28.6% |
$215,628 |
$236,617 |
(8.9)% |
$188,893 |
$110,860 |
70.4% |
|
Avg. Price |
$418,108 |
$329,216 |
27.0% |
$369,226 |
$317,181 |
16.4% |
$449,746 |
$384,930 |
16.8% | |
|
Southwest |
||||||||||
|
(includes unconsolidated joint ventures) |
Home |
2,487 |
2,526 |
(1.5)% |
2,750 |
2,263 |
21.5% |
770 |
1,033 |
(25.5)% |
|
(AZ, TX) |
Dollars |
$891,819 |
$949,763 |
(6.1)% |
$1,024,409 |
$822,371 |
24.6% |
$290,121 |
$422,711 |
(31.4)% |
|
Avg. Price |
$358,592 |
$375,995 |
(4.6)% |
$372,512 |
$363,399 |
2.5% |
$376,781 |
$409,207 |
(7.9)% | |
|
West |
||||||||||
|
(includes unconsolidated joint ventures) |
Home |
898 |
725 |
23.9% |
865 |
442 |
95.7% |
372 |
339 |
9.7% |
|
(CA) |
Dollars |
$482,431 |
$356,507 |
35.3% |
$447,631 |
$183,600 |
143.8% |
$239,564 |
$204,764 |
17.0% |
|
Avg. Price |
$537,228 |
$491,734 |
9.3% |
$517,493 |
$415,384 |
24.6% |
$643,990 |
$604,024 |
6.6% | |
|
Grand Total |
||||||||||
|
Home |
6,380 |
6,547 |
(2.6)% |
6,712 |
5,776 |
16.2% |
2,649 |
3,112 |
(14.9)% | |
|
Dollars |
$2,673,736 |
$2,651,086 |
0.9% |
$2,741,366 |
$2,208,049 |
24.2% |
$1,221,532 |
$1,348,007 |
(9.4)% | |
|
Avg. Price |
$419,081 |
$404,931 |
3.5% |
$408,427 |
$382,280 |
6.8% |
$461,130 |
$433,164 |
6.5% | |
|
Consolidated Total |
||||||||||
|
Home |
6,109 |
6,183 |
(1.2)% |
6,464 |
5,507 |
17.4% |
2,398 |
2,905 |
(17.5)% | |
|
Dollars |
$2,512,812 |
$2,448,207 |
2.6% |
$2,600,790 |
$2,088,129 |
24.6% |
$1,069,102 |
$1,215,925 |
(12.1)% | |
|
Avg. Price |
$411,329 |
$395,958 |
3.9% |
$402,350 |
$379,177 |
6.1% |
$445,831 |
$418,563 |
6.5% | |
|
Unconsolidated Joint Ventures |
||||||||||
|
Home |
271 |
364 |
(25.5)% |
248 |
269 |
(7.8)% |
251 |
207 |
21.3% | |
|
Dollars |
$160,924 |
$202,879 |
(20.7)% |
$140,576 |
$119,920 |
17.2% |
$152,430 |
$132,082 |
15.4% | |
|
Avg. Price |
$593,814 |
$557,359 |
6.5% |
$566,836 |
$445,799 |
27.2% |
$607,292 |
$638,077 |
(4.8)% |
|
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. (2) The Midwest net contracts include 65 homes and $27.4 million and 246 homes and $98.2 million in 2016 and 2015, respectively, from Minneapolis, MN. Contract backlog as of October 31, 2016 reflects the reduction of 64 homes and $24.1 million, related to the sale of our land portfolio in Minneapolis, MN. (3) The Southeast net contracts include 70 homes and $31.6 million and 128 homes and $42.4 million in 2016 and 2015, respectively, from Raleigh, NC. Contract backlog as of October 31, 2016 reflects the reduction of 67 homes and $33.7 million, related to the sale of our land portfolio in Raleigh, NC. |
15