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hov20201207_8k.htm
false 0000357294 0000357294 2020-12-09 2020-12-09 0000357294 hov:ClassACommonStockCustomMember 2020-12-09 2020-12-09 0000357294 hov:PreferredStockCustomMember 2020-12-09 2020-12-09 0000357294 hov:SeriesAPreferredStock7625CustomMember 2020-12-09 2020-12-09
 
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 9, 2020
 
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.)
 
 90 Matawan Road, Fifth Floor
Matawan, New Jersey 07747

(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))
 
Securities registered pursuant to Section 12(b) of the Act.
 
Title of each class
Trading symbol(s)
Name of each exchange on which registered
Class A Common Stock $0.01 par value per share
HOV
New York Stock Exchange
Preferred Stock Purchase Rights (1)
N/A
New York Stock Exchange
Depositary Shares each representing 1/1,000th of a share of
7.625% Series A Preferred Stock
HOVNP
Nasdaq Global Market
 
(1) Each share of Class A Common Stock includes an associated Preferred Stock Purchase Right. Each Preferred Stock Purchase Right initially represents the right, if such Preferred Stock Purchase Right becomes exercisable, to purchase from the Company one ten-thousandth of a share of its Series B Junior Preferred Stock for each share of Common Stock. The Preferred Stock Purchase Rights currently cannot trade separately from the underlying Common Stock.
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company  ☐ 
 
 If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ☐ 
 
 
 
 
 Item 2.02.            Results of Operations and Financial Condition.
 
On December 9, 2020, 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, 2020. 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 (gain) 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 attached earnings press release contains information about homebuilding gross margin, before cost of sales interest expense and land charges, and homebuilding gross margin percentage, before cost of sales interest expense and land charges, which are non-GAAP financial measures. The most directly comparable GAAP financial measures are homebuilding gross margin and homebuilding gross margin percentage, respectively. A reconciliation for historical periods of homebuilding gross margin, before cost of sales interest expense and land charges, and homebuilding gross margin percentage, before cost of sales interest expense and land charges, to homebuilding gross margin and homebuilding gross margin percentage, respectively, is contained in the earnings press release.
 
The attached earnings press release contains information about adjusted pretax income, which is defined as income before income taxes excluding land-related charges, joint venture write-downs and loss (gain) on extinguishment of debt, which is a non-GAAP financial measure. The most directly comparable GAAP financial measure is income before income taxes. A reconciliation for historical periods of adjusted pretax income to income 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 and benchmark the Company’s financial performance without the effects of various items the Company does not believe are characteristic of its ongoing operating performance. 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) 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, the Company’s calculation of EBITDA may be different than the calculation used by other companies, and, therefore, comparability may be affected.
 
Management believes homebuilding gross margin, before cost of sales interest expense and land charges, enables investors to better understand the Company’s operating performance. This measure is also useful internally, helping management to evaluate the Company’s operating results on a consolidated basis and relative to other companies in the Company’s industry. In particular, the magnitude and volatility of land charges for the Company, and for other homebuilders, have been significant and, as such, have made financial analysis of the Company’s industry more difficult. Homebuilding metrics excluding land charges, as well as interest amortized to cost of sales, and other similar presentations prepared by analysts and other companies are frequently used to assist investors in understanding and comparing the operating characteristics of homebuilding activities by eliminating many of the differences in companies’ respective levels of impairments and levels of debt. Homebuilding gross margin, before cost of sales interest expense and land charges, should be considered in addition to, but not as an alternative to, homebuilding gross margin determined in accordance with GAAP as an indicator of operating performance.
 
 
 
 
Additionally, the Company’s calculation of homebuilding gross margin, before cost of sales interest expense and land charges, may be different than the calculation used by other companies, and, therefore, comparability may be affected. 
 
Management believes adjusted pretax income to be relevant and useful information because it provides a better metric of the Company’s operating performance. Adjusted pretax income 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, the Company’s calculation of adjusted pretax income 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 104       Cover Page Interactive Data File (embedded within the Inline XBRL document)
 
 
 
 
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)
 
 
 
 
By: 
/s/ J. Larry Sorsby                                              
 
  
Name: J. Larry Sorsby
 
  
Title: Executive Vice President and Chief
Financial Officer
 
 
 
Date: December 9, 2020
 
 
ex_216607.htm

Exhibit 99.1

 

 

HOVNANIAN ENTERPRISES, INC.

News Release

 

 

 

Contact:

J. Larry Sorsby

Jeffrey T. O’Keefe
 

Executive Vice President & CFO

Vice President, Investor Relations
 

732-747-7800

732-747-7800
     

 

HOVNANIAN ENTERPRISES REPORTS FISCAL 2020 FOURTH QUARTER AND
FULL YEAR RESULTS

 

Fourth Quarter Gross Margin Increased 290 Basis Points

$95 Million Year-over-Year Improvement in Fiscal 2020 Pretax Income

61% Year-over-Year Increase in Consolidated Backlog Dollars at Year End to $1.42 Billion

Fourth Quarter Consolidated Contracts per Community Improved 74% Year-over-Year

 

 

MATAWAN, NJ, December 9, 2020 – Hovnanian Enterprises, Inc. (NYSE: HOV), a leading national homebuilder, reported results for its fiscal fourth quarter and year ended October 31, 2020.

 

RESULTS FOR the Fourth Quarter and Year ENDED October 31, 2020:

 

 

●

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

 

 

●

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

 

 

●

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

 

 

●

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

 

 

●

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

 

1
 

 

 

●

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

 

 

●

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

 

 

●

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

 

 

●

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

 

 

●

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

 

 

●

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

 

 

●

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

 

 

●

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

 

 

●

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

 

 

●

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

 

2
 

 

 

●

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

 

 

●

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

 

 

●

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

 

 

●

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

 

 

●

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

 

(1)When we refer to “Domestic Unconsolidated Joint Ventures”, we are excluding results from our single community unconsolidated joint venture in the Kingdom of Saudi Arabia (KSA).

 

Liquidity AND Inventory as of October 31, 2020:

 

 

 

●

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

 

 

●

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

 

 

●

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

 

 

●

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

 

Comments from ManAGEMENT:

  

 

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

 

3
 

 

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

 

Webcast Information:

  

 

Hovnanian Enterprises will webcast its fiscal 2020 fourth quarter financial results conference call at 11:00 a.m. E.T. on Wednesday, December 9, 2020. The webcast can be accessed live through the “Investor Relations” section of Hovnanian Enterprises’ website at http://www.khov.com. For those who are not available to listen to the live webcast, an archive of the broadcast will be available under the “Past Events” section of the Investor Relations page on the Hovnanian website at http://www.khov.com. The archive will be available for 12 months.

 

About Hovnanian Enterprises, Inc.:

  

 

Hovnanian Enterprises, Inc., founded in 1959 by Kevork S. Hovnanian, is headquartered in Matawan, New Jersey and, through its subsidiaries, is one of the 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 name K. Hovnanian® Homes. Additionally, the Company’s subsidiaries, as developers of K. Hovnanian’s® Four Seasons communities, make the Company one of the nation’s largest builders of active lifestyle communities.

 

Additional information on Hovnanian Enterprises, Inc. can be accessed through the “Investor Relations” section of the Hovnanian Enterprises’ website at http://www.khov.com. To be added to Hovnanian's investor e-mail list, please send an e-mail to IR@khov.com or sign up at http://www.khov.com.

 

4
 

 

NON-GAAP FINANCIAL MEASURES:

  

 

Consolidated earnings before interest expense and income taxes (“EBIT”) and before depreciation and amortization (“EBITDA”) and before inventory impairment loss and land option write-offs and loss (gain) on extinguishment of debt (“Adjusted EBITDA”) are not U.S. generally accepted accounting principles (GAAP) financial measures. The most directly comparable GAAP financial measure is net income (loss). The reconciliation for historical periods of EBIT, EBITDA and Adjusted EBITDA to net income (loss) is presented in a table attached to this earnings release.

 

Homebuilding gross margin, before cost of sales interest expense and land charges, and homebuilding gross margin percentage, before cost of sales interest expense and land charges, are non-GAAP financial measures. The most directly comparable GAAP financial measures are homebuilding gross margin and homebuilding gross margin percentage, respectively. The reconciliation for historical periods of homebuilding gross margin, before cost of sales interest expense and land charges, and homebuilding gross margin percentage, before cost of sales interest expense and land charges, to homebuilding gross margin and homebuilding gross margin percentage, respectively, is presented in a table attached to this earnings release.

 

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

 

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

 

 

FORWARD-LOOKING STATEMENTS

 

All statements in this press release that are not historical facts should be considered as “Forward-Looking Statements” within the meaning of the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such forward-looking statements include but are not limited to statements related to the 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) the outbreak and spread of COVID-19 and the measures that governments, agencies, law enforcement and/or health authorities implement to address it; (2) changes in general and local economic, industry and business conditions and impacts of a significant homebuilding downturn; (3) adverse weather and other environmental conditions and natural disasters; (4) the seasonality of the Company’s business; (5) the availability and cost of suitable land and improved lots and sufficient liquidity to invest in such land and lots; (6) shortages in, and price fluctuations of, raw materials and labor, including due to changes in trade policies and the imposition of tariffs and duties on homebuilding materials and products and related trade disputes with, and retaliatory

 

5
 

 

measures taken by, other countries; (7) reliance on, and the performance of, subcontractors; (8) regional and local economic factors, including dependency on certain sectors of the economy, and employment levels affecting home prices and sales activity in the markets where the Company builds homes; (9) increases in cancellations of agreements of sale; (10) fluctuations in interest rates and the availability of mortgage financing; (11) changes in tax laws affecting the after-tax costs of owning a home; (12) legal claims brought against us and not resolved in our favor, such as product liability litigation, warranty claims and claims made by mortgage investors; (13) levels of competition; (14) utility shortages and outages or rate fluctuations; (15) information technology failures and data security breaches; (16) negative publicity; (17) high leverage and restrictions on the Company’s operations and activities imposed by the agreements governing the Company’s outstanding indebtedness; (18) availability and terms of financing to the Company; (19) the Company’s sources of liquidity; (20) changes in credit ratings; (21) government regulation, including regulations concerning development of land, the home building, sales and customer financing processes, tax laws and the environment; (22) operations through unconsolidated joint ventures with third parties; (23) significant influence of the Company’s controlling stockholders; (24) availability of net operating loss carryforwards; (25) loss of key management personnel or failure to attract qualified personnel; 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, 2019 and the Company’s Quarterly Reports on Form 10-Q for the quarterly periods during fiscal 2020 and subsequent filings with the Securities and Exchange Commission. Except as otherwise required by applicable securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.

 

6
 

 

Hovnanian Enterprises, Inc.

  

October 31, 2020

  

Statements of consolidated operations

  

(In thousands, except per share data)

  
   

Three Months Ended

    

Year Ended

  
   

October 31,

    

October 31,

  
   

2020

    

2019

    

2020

    

2019

  
   

(Unaudited)

    

(Unaudited)

  

Total revenues

   $683,358     $713,590     $2,343,901     $2,016,916  

Costs and expenses (1)

   644,060     680,116     2,318,400     2,043,080  

(Loss) gain on extinguishment of debt

   -     (42,436 )   13,337     (42,436 )

Income from unconsolidated joint ventures

   3,146     8,376     16,565     28,932  

Income (loss) before income taxes

   42,444     (586 )   55,403     (39,668 )

Income tax provision

   1,810     1,221     4,475     2,449  

Net income (loss)

   $40,634     $(1,807 )   $50,928     $(42,117 )
                         

Per share data:

                        

Basic:

                        

Net income (loss) per common share

   $5.97     $(0.30 )   $7.48     $(7.06 )

Weighted average number of common shares outstanding (2)

   6,221     5,982     6,189     5,968  

Assuming dilution:

                        

Net income (loss) per common share

   $5.54     $(0.30 )   $7.03     $(7.06 )

Weighted average number of common shares outstanding (2)

   6,699     5,982     6,584     5,968  

 

(1) Includes inventory impairment loss and land option write-offs.

  

(2) For periods with a net (loss), basic shares are used in accordance with GAAP rules.

  

 

 

Hovnanian Enterprises, Inc.

  

October 31, 2020

  

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

  

(In thousands)

  
   

Three Months Ended

    

Year Ended

  
   

October 31,

    

October 31,

  
   

2020

    

2019

    

2020

    

2019

  
   

(Unaudited)

    

(Unaudited)

  

Income (loss) before income taxes

   $42,444     $(586 )   $55,403     $(39,668 )

Inventory impairment loss and land option write-offs

   2,611     2,687     8,813     6,288  

Unconsolidated joint venture investment write-downs

   -     -     -     854  

Loss (gain) on extinguishment of debt

   -     42,436     (13,337 )   42,436  

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

   $45,055     $44,537     $50,879     $9,910  

 

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

  

 

7
 

 

Hovnanian Enterprises, Inc.

  

October 31, 2020

  

Gross margin

  

(In thousands)

  

 

   

Homebuilding Gross Margin

    

Homebuilding Gross Margin

  
   

Three Months Ended

    

Year Ended

  
   

October 31,

    

October 31,

  
   

2020

    

2019

    

2020

    

2019

  
   

(Unaudited)

    

(Unaudited)

  

Sale of homes

   $643,516     $692,146     $2,252,029     $1,949,682  

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

   513,416     561,284     1,837,332     1,596,237  

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

   130,100     130,862     414,697     353,445  

Cost of sales interest expense, excluding land sales interest expense

   15,707     27,556     74,174     70,520  

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

   114,393     103,306     340,523     282,925  

Land charges

   2,611     2,687     8,813     6,288  

Homebuilding gross margin

   $111,782     $100,619     $331,710     $276,637  
                         

Homebuilding gross margin percentage

   17.4 %   14.5 %   14.7 %   14.2 %

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

   20.2 %   18.9 %   18.4 %   18.1 %

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

   17.8 %   14.9 %   15.1 %   14.5 %

 

   

Land Sales Gross Margin

    

Land Sales Gross Margin

  
   

Three Months Ended

    

Year Ended

  
   

October 31,

    

October 31,

  
   

2020

    

2019

    

2020

    

2019

  
   

(Unaudited)

    

(Unaudited)

  

Land and lot sales

   $16,805     $1,161     $16,905     $9,211  

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

   10,993     1,150     11,154     8,540  

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

   5,812     11     5,751     671  

Land and lot sales interest

   84     -     156     205  

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

   $5,728     $11     $5,595     $466  

 

(1) Does not include cost associated with walking away from land options or inventory impairment losses which are recorded as Inventory impairment loss and land option write-offs in the Consolidated Statements of Operations.

 

  

(2) Homebuilding gross margin, before cost of sales interest expense and land charges, and homebuilding gross margin percentage, before cost of sales interest expense and land charges, are non-GAAP financial measures. The most directly comparable GAAP financial measures are homebuilding gross margin and homebuilding gross margin percentage, respectively.

  

 

8
 

 

Hovnanian Enterprises, Inc.

October 31, 2020

Reconciliation of adjusted EBITDA to net income (loss)

(Dollars in thousands)

 

    Three Months Ended     Year Ended  
   

October 31,

    

October 31,

  
   

2020

    

2019

    

2020

    

2019

  
   

(Unaudited)

    

(Unaudited)

  

Net income (loss)

   $40,634     $(1,807 )   $50,928     $(42,117 )

Income tax provision

   1,810     1,221     4,475     2,449  

Interest expense

   40,648     50,299     178,131     160,781  

EBIT (1)

   83,092     49,713     233,534     121,113  

Depreciation and amortization

   1,407     1,230     5,304     4,172  

EBITDA (2)

   84,499     50,943     238,838     125,285  

Inventory impairment loss and land option write-offs

   2,611     2,687     8,813     6,288  

Loss (gain) on extinguishment of debt

   -     42,436     (13,337 )   42,436  

Adjusted EBITDA (3)

   $87,110     $96,066     $234,314     $174,009  
                         

Interest incurred

   $41,660     $43,566     $176,457     $165,906  
                         

Adjusted EBITDA to interest incurred

   2.09     2.21     1.33     1.05  

 

 

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

 

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

 

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

 

 

Hovnanian Enterprises, Inc.

October 31, 2020

Interest incurred, expensed and capitalized

(In thousands)

 

   

Three Months Ended

    

Year Ended

  
   

October 31,

    

October 31,

  
   

2020

    

2019

    

2020

    

2019

  
   

(Unaudited)

    

(Unaudited)

  

Interest capitalized at beginning of period

   $63,998     $77,997     $71,264     $68,117  

Plus interest incurred

   41,660     43,566     176,457     165,906  

Less interest expensed

   40,648     50,299     178,131     160,781  

Less interest contributed to unconsolidated joint venture (1)

   -     -     4,580     1,978  

Interest capitalized at end of period (2)

   $65,010     $71,264     $65,010     $71,264  

 

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

 

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

 

9
 

 

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands)

 

   

October 31,

    

October 31,

  

(In thousands)

  

2020

    

2019

  

ASSETS

            

Homebuilding:

            

Cash and cash equivalents

   $262,489     $130,976  

Restricted cash and cash equivalents

   14,731     20,905  

Inventories:

            

Sold and unsold homes and lots under development

   921,594     993,647  

Land and land options held for future development or sale

   91,957     108,565  

Consolidated inventory not owned

   182,224     190,273  

Total inventories

   1,195,775     1,292,485  

Investments in and advances to unconsolidated joint ventures

   103,164     127,038  

Receivables, deposits and notes, net

   33,686     44,914  

Property, plant and equipment, net

   18,185     20,127  

Prepaid expenses and other assets

   58,705     45,704  

Total homebuilding

   1,686,735     1,682,149  
             

Financial services

   140,607     199,275  

Total assets

   $1,827,342     $1,881,424  
             

LIABILITIES AND EQUITY

            

Homebuilding:

            

Nonrecourse mortgages secured by inventory, net of debt issuance costs

   $135,122     $203,585  

Accounts payable and other liabilities

   359,274     320,193  

Customers’ deposits

   48,286     35,872  

Liabilities from inventory not owned, net of debt issuance costs

   131,204     141,033  

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

   1,431,110     1,479,990  

Accrued interest

   35,563     19,081  

Total homebuilding

   2,140,559     2,199,754  
             

Financial services

   119,045     169,145  

Income taxes payable

   3,832     2,301  

Total liabilities

   2,263,436     2,371,200  
             

Equity:

            

Hovnanian Enterprises, Inc. stockholders' equity deficit:

            

Preferred stock, $0.01 par value - authorized 100,000 shares; issued and outstanding 5,600 shares with a liquidation preference of $140,000 at October 31, 2020 and 2019

   135,299     135,299  

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

   60     60  

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

   7     7  

Paid in capital - common stock

   718,110     715,504  

Accumulated deficit

   (1,175,045

)

   (1,225,973

)

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

   (115,360

)

   (115,360

)

Total Hovnanian Enterprises, Inc. stockholders’ equity deficit

   (436,929

)

   (490,463

)

Noncontrolling interest in consolidated joint ventures

   835     687  

Total equity deficit

   (436,094

)

   (489,776

)

Total liabilities and equity

   $1,827,342     $1,881,424  

 

10
 

 

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands Except Per Share Data)

(Unaudited)

 

   

Three Months Ended October 31,

    

Year Ended October 31,

  
   

2020

    

2019

    

2020

    

2019

  
                         

Revenues:

                        

Homebuilding:

                        

Sale of homes

   $643,516     $692,146     $2,252,029     $1,949,682  

Land sales and other revenues

   17,350     1,971     19,710     13,082  

Total homebuilding

   660,866     694,117     2,271,739     1,962,764  

Financial services

   22,492     19,473     72,162     54,152  

Total revenues

   683,358     713,590     2,343,901     2,016,916  
                         

Expenses:

                        

Homebuilding:

                        

Cost of sales, excluding interest

   524,409     562,434     1,848,486     1,604,777  

Cost of sales interest

   15,791     27,556     74,330     70,725  

Inventory impairment loss and land option write-offs

   2,611     2,687     8,813     6,288  

Total cost of sales

   542,811     592,677     1,931,629     1,681,790  

Selling, general and administrative

   39,374     36,310     161,261     166,784  

Total homebuilding expenses

   582,185     628,987     2,092,890     1,848,574  
                         

Financial services

   10,383     10,446     40,060     36,525  

Corporate general and administrative

   26,213     17,572     80,553     66,364  

Other interest

   24,857     22,743     103,801     90,056  

Other operations

   422     368     1,096     1,561  

Total expenses

   644,060     680,116     2,318,400     2,043,080  

(Loss) gain on extinguishment of debt

   -     (42,436

)

   13,337     (42,436

)

Income from unconsolidated joint ventures

   3,146     8,376     16,565     28,932  

Income (loss) before income taxes

   42,444     (586

)

   55,403     (39,668

)

State and federal income tax provision:

                        

State

   1,810     1,221     4,475     2,449  

Federal

   -     -     -     -  

Total income taxes

   1,810     1,221     4,475     2,449  

Net income (loss)

   $40,634     $(1,807

)

   $50,928     $(42,117

)
                         

Per share data:

                        

Basic:

                        

Net income (loss) per common share

   $5.97     $(0.30

)

   $7.48     $(7.06

)

Weighted-average number of common shares outstanding

   6,221     5,982     6,189     5,968  

Assuming dilution:

                        

Net income (loss) per common share

   $5.54     $(0.30

)

   $7.03     $(7.06

)

Weighted-average number of common shares outstanding

   6,699     5,982     6,584     5,968  

 

11
 

 

HOVNANIAN ENTERPRISES, INC.

(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE)

(SEGMENT DATA EXCLUDES UNCONSOLIDATED JOINT VENTURES)

(UNAUDITED)
   

Contracts (1)

Deliveries

Contract
   

Three Months Ended

Three Months Ended

Backlog
   

October 31,

October 31,

October 31,
   

2020

2019

% Change

2020

2019

% Change

2020

2019

% Change

Northeast

                   

(NJ, PA)

Home

95

72

31.9%

78

112

(30.4)%

130

152

(14.5)%
 

Dollars

$63,326

$37,860

67.3%

$42,218

$70,650

(40.2)%

$82,111

$86,557

(5.1)%
 

Avg. Price

$666,589

$525,833

26.8%

$541,256

$630,804

(14.2)%

$631,623

$569,454

10.9%

Mid-Atlantic

                   

(DE, MD, VA, WV)

Home

253

181

39.8%

219

240

(8.8)%

557

343

62.4%
 

Dollars

$135,364

$86,296

56.9%

$114,221

$135,866

(15.9)%

$291,115

$193,387

50.5%
 

Avg. Price

$535,036

$476,773

12.2%

$521,557

$566,108

(7.9)%

$522,648

$563,810

(7.3)%

Midwest

                   

(IL, OH)

Home

249

177

40.7%

187

232

(19.4)%

596

450

32.4%
 

Dollars

$79,999

$54,682

46.3%

$59,498

$68,714

(13.4)%

$169,517

$122,681

38.2%
 

Avg. Price

$321,281

$308,938

4.0%

$318,171

$296,181

7.4%

$284,424

$272,624

4.3%

Southeast

                   

(FL, GA, SC)

Home

163

179

(8.9)%

169

193

(12.4)%

298

282

5.7%
 

Dollars

$74,765

$69,765

7.2%

$73,741

$76,414

(3.5)%

$146,971

$121,921

20.5%
 

Avg. Price

$458,681

$389,749

17.7%

$436,337

$395,927

10.2%

$493,191

$432,344

14.1%

Southwest

                   

(AZ, TX)

Home

712

496

43.5%

584

621

(6.0)%

1,066

663

60.8%
 

Dollars

$245,813

$166,723

47.4%

$194,505

$213,089

(8.7)%

$360,225

$230,898

56.0%
 

Avg. Price

$345,243

$336,135

2.7%

$333,057

$343,138

(2.9)%

$337,922

$348,261

(3.0)%

West

                   

(CA)

Home

446

240

85.8%

335

311

7.7%

755

301

150.8%
 

Dollars

$229,656

$102,460

124.1%

$159,332

$127,413

25.1%

$369,887

$124,700

196.6%
 

Avg. Price

$514,924

$426,917

20.6%

$475,618

$409,688

16.1%

$489,917

$414,286

18.3%

Consolidated

                    

Total

Home

1,918

1,345

42.6%

1,572

1,709

(8.0)%

3,402

2,191

55.3%
 

Dollars

$828,923

$517,786

60.1%

$643,515

$692,146

(7.0)%

$1,419,826

$880,144

61.3%
 

Avg. Price

$432,181

$384,971

12.3%

$409,361

$405,001

1.1%

$417,350

$401,709

3.9%

Unconsolidated Joint Ventures (2)

                    

(excluding KSA JV)

Home

225

134

67.9%

163

232

(29.7)%

326

259

25.9%
 

Dollars

$135,906

$80,126

69.6%

$102,043

$145,098

(29.7)%

$184,524

$161,807

14.0%
 

Avg. Price

$604,027

$597,955

1.0%

$626,031

$625,422

0.1%

$566,025

$624,737

(9.4)%

Grand Total

                    
 

Home

2,143

1,479

44.9%

1,735

1,941

(10.6)%

3,728

2,450

52.2%
 

Dollars

$964,829

$597,912

61.4%

$745,558

$837,244

(11.0)%

$1,604,350

$1,041,951

54.0%
 

Avg. Price

$450,224

$404,268

11.4%

$429,716

$431,347

(0.4)%

$430,351

$425,286

1.2%
                     

KSA JV Only

                    
 

Home

326

71

359.2%

0

0

0.0%

1,092

202

440.6%
 

Dollars

$51,110

$11,517

343.8%

$0

$0

0.0%

$171,673

$32,316

431.2%
 

Avg. Price

$156,779

$162,211

(3.3)%

$0

$0

0.0%

$157,209

$159,982

(1.7)%
 

DELIVERIES INCLUDE EXTRAS

Notes:

(1) Contracts are defined as new contracts signed during the period for the purchase of homes, less cancellations of prior contracts.

(2) Represents home deliveries, home revenues and average prices for our unconsolidated homebuilding joint ventures for the period. We provide this data as a supplement to our consolidated results as an indicator of the volume managed in our unconsolidated homebuilding joint ventures. Our proportionate share of the income or loss of unconsolidated homebuilding and land development joint ventures is reflected as a separate line item in our consolidated financial statements under “Income from unconsolidated joint ventures”.

 

12
 

 

HOVNANIAN ENTERPRISES, INC.

(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE)

(SEGMENT DATA EXCLUDES UNCONSOLIDATED JOINT VENTURES)

(UNAUDITED)
   

Contracts (1)

Deliveries

Contract
   

Year Ended

Year Ended

Backlog
   

October 31,

October 31,

October 31,
   

2020

2019

% Change

2020

2019

% Change

2020

2019

% Change

Northeast

                   

(NJ, PA)

Home

326

293

11.3%

348

192

81.3%

130

152

(14.5)%
 

Dollars

$171,181

$172,950

(1.0)%

$175,627

$116,889

50.3%

$82,111

$86,557

(5.1)%
 

Avg. Price

$525,095

$590,273

(11.0)%

$504,675

$608,797

(17.1)%

$631,623

$569,454

10.9%

Mid-Atlantic

                   

(DE, MD, VA, WV)

Home

990

728

36.0%

755

652

15.8%

557

343

62.4%
 

Dollars

$510,229

$385,862

32.2%

$402,647

$356,674

12.9%

$291,115

$193,387

50.5%
 

Avg. Price

$515,383

$530,030

(2.8)%

$533,307

$547,046

(2.5)%

$522,648

$563,810

(7.3)%

Midwest

                   

(IL, OH)

Home

873

736

18.6%

727

680

6.9%

596

450

32.4%
 

Dollars

$272,170

$219,266

24.1%

$225,334

$203,734

10.6%

$169,517

$122,681

38.2%
 

Avg. Price

$311,764

$297,916

4.6%

$309,950

$299,609

3.5%

$284,424

$272,624

4.3%

Southeast

                   

(FL, GA, SC)

Home

599

576

4.0%

548

545

0.6%

298

282

5.7%
 

Dollars

$270,277

$233,645

15.7%

$232,333

$219,860

5.7%

$146,971

$121,921

20.5%
 

Avg. Price

$451,214

$405,634

11.2%

$423,965

$403,413

5.1%

$493,191

$432,344

14.1%

Southwest

                   

(AZ, TX)

Home

2,636

2,006

31.4%

2,233

1,866

19.7%

1,066

663

60.8%
 

Dollars

$872,630

$677,244

28.9%

$743,301

$627,201

18.5%

$360,225

$230,898

56.0%
 

Avg. Price

$331,043

$337,609

(1.9)%

$332,871

$336,121

(1.0)%

$337,922

$348,261

(3.0)%

West

                   

(CA)

Home

1,529

1,001

52.7%

1,075

1,011

6.3%

755

301

150.8%
 

Dollars

$717,973

$411,577

74.4%

$472,786

$425,324

11.2%

$369,887

$124,700

196.6%
 

Avg. Price

$469,570

$411,166

14.2%

$439,801

$420,696

4.5%

$489,917

$414,286

18.3%

Consolidated Total

                    
 

Home

6,953

5,340

30.2%

5,686

4,946

15.0%

3,402

2,191

55.3%
 

Dollars

$2,814,460

$2,100,544

34.0%

$2,252,028

$1,949,682

15.5%

$1,419,826

$880,144

61.3%
 

Avg. Price

$404,784

$393,360

2.9%

$396,065

$394,194

0.5%

$417,350

$401,709

3.9%

Unconsolidated Joint Ventures (2)

                    

(excluding KSA JV)

Home

739

636

16.2%

728

767

(5.1)%

326

259

25.9%
 

Dollars

$432,570

$398,476

8.6%

$432,602

$483,697

(10.6)%

$184,524

$161,807

14.0%
 

Avg. Price

$585,345

$626,535

(6.6)%

$594,234

$630,635

(5.8)%

$566,025

$624,737

(9.4)%

Grand Total

                    
 

Home

7,692

5,976

28.7%

6,414

5,713

12.3%

3,728

2,450

52.2%
 

Dollars

$3,247,030

$2,499,020

29.9%

$2,684,630

$2,433,379

10.3%

$1,604,350

$1,041,951

54.0%
 

Avg. Price

$422,131

$418,176

0.9%

$418,558

$425,937

(1.7)%

$430,351

$425,286

1.2%
                     

KSA JV Only

                    
 

Home

890

204

336.3%

0

7

(100.0)%

1,092

202

440.6%
 

Dollars

$139,356

$32,943

323.0%

$0

$1,627

(100.0)%

$171,673

$32,316

431.2%
 

Avg. Price

$156,580

$161,485

(3.0)%

$0

$232,429

(100.0)%

$157,210

$159,982

(1.7)%
                     

DELIVERIES INCLUDE EXTRAS

Notes:

(1) Contracts are defined as new contracts signed during the period for the purchase of homes, less cancellations of prior contracts.

(2) Represents home deliveries, home revenues and average prices for our unconsolidated homebuilding joint ventures for the period. We provide this data as a supplement to our consolidated results as an indicator of the volume managed in our unconsolidated homebuilding joint ventures. Our proportionate share of the income or loss of unconsolidated homebuilding and land development joint ventures is reflected as a separate line item in our consolidated financial statements under “Income from unconsolidated joint ventures”.

 

13
 

 

HOVNANIAN ENTERPRISES, INC.

(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE)

(SEGMENT DATA UNCONSOLIDATED JOINT VENTURES ONLY)

(UNAUDITED)
   

Contracts (1)

Deliveries

Contract
   

Three Months Ended

Three Months Ended

Backlog
   

October 31,

October 31,

October 31,
   

2020

2019

% Change

2020

2019

% Change

2020

2019

% Change

Northeast

                    

(unconsolidated joint ventures)

Home

16

47

(66.0)%

31

82

(62.2)%

18

76

(76.3)%

(excluding KSA JV)

Dollars

$24,384

$33,054

(26.2)%

$31,421

$62,284

(49.6)%

$24,535

$63,680

(61.5)%

(NJ, PA)

Avg. Price

$1,524,000

$703,277

116.7%

$1,013,581

$759,561

33.4%

$1,363,056

$837,895

62.7%

Mid-Atlantic

                    

(unconsolidated joint ventures)

Home

63

11

472.7%

21

26

(19.2)%

90

21

328.6%

(DE, MD, VA, WV)

Dollars

$33,382

$5,862

469.5%

$10,378

$15,816

(34.4)%

$46,821

$11,121

321.0%
 

Avg. Price

$529,873

$532,909

(0.6)%

$494,190

$608,308

(18.8)%

$520,233

$529,571

(1.8)%

Midwest

                    

(unconsolidated joint ventures)

Home

2

4

(50.0)%

2

3

(33.3)%

0

3

(100.0)%

(IL, OH)

Dollars

$950

$1,800

(47.2)%

$950

$1,400

(32.1)%

$0

$1,285

(100.0)%
 

Avg. Price

$475,000

$450,000

5.6%

$475,000

$466,667

1.8%

$0

$428,333

(100.0)%

Southeast

                    

(unconsolidated joint ventures)

Home

89

31

187.1%

69

60

15.0%

149

88

69.3%

(FL, GA, SC)

Dollars

$49,970

$16,611

200.8%

$36,307

$33,080

9.8%

$78,528

$47,678

64.7%
 

Avg. Price

$561,461

$535,839

4.8%

$526,188

$551,333

(4.6)%

$527,034

$541,795

(2.7)%

Southwest

                    

(unconsolidated joint ventures)

Home

30

30

0.0%

30

40

(25.0)%

46

45

2.2%

(AZ, TX)

Dollars

$18,553

$18,347

1.1%

$19,509

$24,793

(21.3)%

$26,803

$28,318

(5.3)%
 

Avg. Price

$618,433

$611,567

1.1%

$650,300

$619,825

4.9%

$582,674

$629,289

(7.4)%

West

                    

(unconsolidated joint ventures)

Home

25

11

127.3%

10

21

(52.4)%

23

26

(11.5)%

(CA)

Dollars

$8,667

$4,452

94.7%

$3,478

$7,725

(55.0)%

$7,837

$9,725

(19.4)%
 

Avg. Price

$346,680

$404,727

(14.3)%

$347,800

$367,857

(5.5)%

$340,739

$374,038

(8.9)%

Unconsolidated Joint Ventures (2)

                  

(excluding KSA JV)

Home

225

134

67.9%

163

232

(29.7)%

326

259

25.9%
 

Dollars

$135,906

$80,126

69.6%

$102,043

$145,098

(29.7)%

$184,524

$161,807

14.0%
 

Avg. Price

$604,027

$597,955

1.0%

$626,031

$625,422

0.1%

$566,025

$624,737

(9.4)%
                     

KSA JV Only

                    
 

Home

326

71

359.2%

0

0

0.0%

1,092

202

440.6%
 

Dollars

$51,110

$11,517

343.8%

$0

$0

0.0%

$171,673

$32,316

431.2%
 

Avg. Price

$156,779

$162,211

(3.3)%

$0

$0

0.0%

$157,210

$159,982

(1.7)%
 

DELIVERIES INCLUDE EXTRAS

Notes:

(1) Contracts are defined as new contracts signed during the period for the purchase of homes, less cancellations of prior contracts.

(2) Represents home deliveries, home revenues and average prices for our unconsolidated homebuilding joint ventures for the period. We provide this data as a supplement to our consolidated results as an indicator of the volume managed in our unconsolidated homebuilding joint ventures. Our proportionate share of the income or loss of unconsolidated homebuilding and land development joint ventures is reflected as a separate line item in our consolidated financial statements under “Income from unconsolidated joint ventures”.

 

14
 

 

HOVNANIAN ENTERPRISES, INC.

(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE)

(SEGMENT DATA UNCONSOLIDATED JOINT VENTURES ONLY)

(UNAUDITED)
   

Contracts (1)

Deliveries

Contract
   

Year Ended

Year Ended

Backlog
   

October 31,

October 31,

October 31,
   

2020

2019

% Change

2020

2019

% Change

2020

2019

% Change

Northeast

                    

(unconsolidated joint ventures)

Home

146

235

(37.9)%

204

273

(25.3)%

18

76

(76.3)%

(excluding KSA JV)

Dollars

$128,526

$183,450

(29.9)%

$167,671

$213,137

(21.3)%

$24,535

$63,680

(61.5)%

(NJ, PA)

Avg. Price

$880,315

$780,638

12.8%

$821,917

$780,722

5.3%

$1,363,056

$837,895

62.7%

Mid-Atlantic

                    

(unconsolidated joint ventures)

Home

133

37

259.5%

85

69

23.2%

90

21

328.6%

(DE, MD, VA, WV)

Dollars

$68,605

$25,020

174.2%

$42,759

$49,083

(12.9)%

$46,821

$11,121

321.0%
 

Avg. Price

$515,827

$676,216

(23.7)%

$503,047

$711,348

(29.3)%

$520,233

$529,571

(1.8)%

Midwest

                    

(unconsolidated joint ventures)

Home

13

16

(18.8)%

16

22

(27.3)%

0

3

(100.0)%

(IL, OH)

Dollars

$6,059

$8,272

(26.8)%

$7,344

$13,063

(43.8)%

$0

$1,285

(100.0)%
 

Avg. Price

$466,077

$517,000

(9.8)%

$459,000

$593,773

(22.7)%

$0

$428,333

(100.0)%

Southeast

                    

(unconsolidated joint ventures)

Home

274

153

79.1%

248

187

32.6%

149

88

69.3%

(FL, GA, SC)

Dollars

$140,517

$82,141

71.1%

$122,562

$97,718

25.4%

$78,528

$47,678

64.7%
 

Avg. Price

$512,836

$536,869

(4.5)%

$494,202

$522,556

(5.4)%

$527,034

$541,795

(2.7)%

Southwest

                    

(unconsolidated joint ventures)

Home

106

116

(8.6)%

105

138

(23.9)%

46

45

2.2%

(AZ, TX)

Dollars

$65,700

$70,802

(7.2)%

$67,215

$82,948

(19.0)%

$26,803

$28,318

(5.3)%
 

Avg. Price

$619,811

$610,362

1.5%

$640,143

$601,072

6.5%

$582,674

$629,289

(7.4)%

West

                    

(unconsolidated joint ventures)

Home

67

79

(15.2)%

70

78

(10.3)%

23

26

(11.5)%

(CA)

Dollars

$23,163

$28,791

(19.5)%

$25,051

$27,748

(9.7)%

$7,837

$9,725

(19.4)%
 

Avg. Price

$345,716

$364,443

(5.1)%

$357,871

$355,744

0.6%

$340,739

$374,038

(8.9)%

Unconsolidated Joint Ventures (2)

                  

(excluding KSA JV)

Home

739

636

16.2%

728

767

(5.1)%

326

259

25.9%
 

Dollars

$432,570

$398,476

8.6%

$432,602

$483,697

(10.6)%

$184,524

$161,807

14.0%
 

Avg. Price

$585,345

$626,535

(6.6)%

$594,234

$630,635

(5.8)%

$566,025

$624,737

(9.4)%
                     

KSA JV Only

                    
 

Home

890

204

336.3%

0

7

(100.0)%

1,092

202

440.6%
 

Dollars

$139,356

$32,943

323.0%

$0

$1,627

(100.0)%

$171,673

$32,316

431.2%
 

Avg. Price

$156,580

$161,485

(3.0)%

$0

$232,429

(100.0)%

$157,210

$159,982

(1.7)%
                     

DELIVERIES INCLUDE EXTRAS

Notes:

(1) Contracts are defined as new contracts signed during the period for the purchase of homes, less cancellations of prior contracts.

(2) Represents home deliveries, home revenues and average prices for our unconsolidated homebuilding joint ventures for the period. We provide this data as a supplement to our consolidated results as an indicator of the volume managed in our unconsolidated homebuilding joint ventures. Our proportionate share of the income or loss of unconsolidated homebuilding and land development joint ventures is reflected as a separate line item in our consolidated financial statements under “Income from unconsolidated joint ventures”.

 

15