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SMALL BUSINESS
Hovnanian Enterprises Reports Third Quarter Fiscal 2009 Results
RED BANK, N.J., Sept. 2 /PRNewswire-FirstCall/ -- Hovnanian Enterprises, Inc. (NYSE: HOV), a leading national homebuilder, reported results for its third quarter and nine months ended July 31, 2009.
RESULTS FOR THE THREE AND NINE MONTH PERIODS ENDED JULY 31, 2009:
- Total revenues were $387.1 million for the three months ended July 31, 2009 compared with $716.5 million in the third quarter of the prior year. For the first nine months of fiscal 2009, total revenues were $1.2 billion compared with $2.6 billion for the nine month period in the previous year.
- For the third quarter of fiscal 2009, the after-tax net loss was $168.9 million, or $2.16 per common share, compared with a net loss of $202.5 million, or $2.67 per common share, in the same period last year. For the first nine months of fiscal 2009, the after-tax net loss was $465.9 million, or $5.96 per common share, compared with a net loss of $674.1 million, or $9.98 per common share, in the same period in the prior year.
- Pre-tax land-related charges during the third quarter of fiscal 2009 were $105.7 million, including land impairments of $94.6 million, write-offs of predevelopment costs and land deposits of $6.5 million and $4.6 million representing the write down of our investments in certain unconsolidated joint ventures.
- The number of net contracts for the third quarter of fiscal 2009, excluding unconsolidated joint ventures, declined 9% to 1,442 homes compared with the prior year's third quarter. For the nine month period ended July 31, 2009, the number of net contracts, excluding unconsolidated joint ventures, was 3,989 homes, a 25% decline, compared with the first nine months a year ago.
- At July 31, 2009, there were 198 active selling communities, excluding unconsolidated joint ventures, a decline of 156 active communities, or 44%, from the end of the third quarter of fiscal 2008.
- Net contracts per active selling community increased 62% from 4.5 in last year's third quarter to 7.3 net contracts per active selling community in the third quarter of fiscal 2009.
- Deliveries, excluding unconsolidated joint ventures, were 1,322 homes for the 2009 third quarter, a 39% decline from 2,185 homes in last year's third quarter. For the first nine months of 2009, deliveries, excluding unconsolidated joint ventures, declined 53% to 3,918 homes compared with 8,283 home deliveries in the same period for the prior year.
- During the third quarter of fiscal 2009, the Company reduced its debt by approximately $119.2 million through cash tender offers for its unsecured senior and senior subordinated notes for which the Company expended approximately $80.5 million. As a result, a $37.0 million gain on extinguishment of debt net of costs was recorded during the third quarter of fiscal 2009.
- The contract cancellation rate, excluding unconsolidated joint ventures, for the third quarter of fiscal 2009 was 23%, compared with the contract cancellation rate of 32% in the third quarter of fiscal 2009.
- The pre-tax loss was $148.0 million for the 2009 third quarter and $423.2 million for the first nine months of fiscal 2009. Excluding land-related charges and the gain from extinguishment of debt, the pre-tax loss was $79.3 million and $294.3 million, respectively, for the three month and nine month periods ended July 31, 2009.
- The FAS 109 current and deferred tax valuation allowance charge to earnings was $76.7 million during the third quarter of 2009 and $198.3 million year to date and as of July 31, 2009, the total valuation allowance is $873.8 million. This FAS 109 charge is a non-cash valuation allowance 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.
CASH AND INVENTORY AS OF JULY 31, 2009:
- At July 31, 2009, homebuilding cash was $545.6 million and the balance on the revolving credit facility was zero. Cash flow during the third quarter of fiscal 2009, excluding approximately $80.5 million expended on the tender offers and $100.0 million to pay down the balance on the revolving credit facility, was negative $48.5 million.
- The total land position, as of July 31, 2009, decreased by 13,746 lots, or 29%, compared to July 31, 2008, reflecting decreases of 4,023 owned lots and 9,723 optioned lots.
- As of July 31, 2009, lots controlled under option contracts totaled 13,395 and owned lots totaled 19,541. The total land position of 32,936 lots represents a 73% decline from the peak total land position at April 30, 2006.
- Started unsold homes, excluding models, declined 42%, to 793 at July 31, 2009 compared to 1,365 at July 31, 2008.
OTHER KEY OPERATING DATA:
- Contract backlog, as of July 31, 2009, excluding unconsolidated joint ventures, was 1,978 homes with a sales value of $614.2 million, a decrease of 34% compared to July 31, 2008.
- Homebuilding gross margin, before interest expense included in cost of sales, increased for the third consecutive quarter to 9.1% for the third quarter of 2009, compared to 8.5% in the fiscal 2008 third quarter and 8.3% in the 2009 second quarter.
- Pre-tax income from Financial Services was $2.6 million in the third quarter of fiscal 2009 and $6.7 million for the first nine months of fiscal 2009.
- During the third quarter of fiscal 2009, home deliveries through unconsolidated joint ventures were 69 homes, compared with 168 homes in the third quarter of the prior year. During the first nine months of fiscal 2009, home deliveries through unconsolidated joint ventures were 215 homes compared with 519 homes during the same period a year ago.
COMMENTS FROM MANAGEMENT:
"The trend of improved contracts per active selling community continued for the third consecutive quarter, with the most significant year-over-year increase of 62% occurring in our third quarter," commented Ara K. Hovnanian, President and Chief Executive Officer. "This progress in sales pace has come despite additional job losses, another dip in consumer confidence and rising mortgage rates."
"Recent data from the S&P/Case-Shiller Index and the National Association of Realtors suggests that stabilizing trends are emerging in the price for existing homes," continued Mr. Hovnanian. "Additionally, our contract cancellation rate during the third quarter was 23%, which is back to more normalized levels and implies that homebuyers entering contracts today are more realistic about the current housing situation. Home ownership affordability continues to be very appealing, particularly for entry-level buyers, which comprised 37% of the applications our mortgage company received during the third quarter."
"We continue to focus on maximizing liquidity and reducing our debt levels," stated J. Larry Sorsby, Chief Financial Officer. "Through debt tender offers, we successfully reduced debt by an additional $119 million during the third quarter. Since the beginning of our fiscal year, we have reduced our outstanding debt and future annual interest payments by approximately $740 million and $50 million, respectively. We further reduced our near-term maturities through these recent actions and now have only $11 million in face value that comes due in January 2010, with another $113 million that matures in April 2012. Our cash position of $546 million reflects $81 million used for the debt tender offers and $100 million used to pay off the balance on our revolving credit facility. As we look forward, our debt covenants will limit our ability to repurchase more debt."
"While we are encouraged by some of these developing positive trends, stiff headwinds remain - most notably, the expiration of the $8,000 federal tax credit and the $10,000 state tax credit in California for homebuyers, the likelihood of higher mortgage rates, persistently high levels of unemployment and the potential threat of foreclosures that could further increase the supply of existing homes. Accordingly, we continue to make all of our decisions with cash flow as the main guiding principal. We remain steadfast in our approach to take the necessary steps to manage our company through this downturn and ensure we are in the best possible position to take advantage of opportunities that will present themselves as our homebuilding markets inevitably recover," concluded Mr. Hovnanian.
WEBCAST INFORMATION:
Hovnanian Enterprises will webcast its fiscal 2009 third quarter financial results conference call at 11:00 a.m. E.T. on Thursday, September 3, 2009. The webcast can be accessed live through the "Investor Relations" section of Hovnanian Enterprises' Website at http://www.khov.com. For those who are not available to listen to the live webcast, an archive of the broadcast will be available under the "Audio Archives" section of the Investor Relations page on the Hovnanian Website at http://www.khov.com. The archive will be available for 12 months.
ABOUT HOVNANIAN ENTERPRISES:
Hovnanian Enterprises, Inc., founded in 1959 by Kevork S. Hovnanian, Chairman, 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, Kentucky, Maryland, Minnesota, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia and West Virginia. The Company's homes are marketed and sold under the trade names K. Hovnanian Homes, Matzel & Mumford, Brighton Homes, Parkwood Builders, Town & Country Homes, Oster Homes, First Home Builders of Florida and CraftBuilt Homes. As the developer of K. Hovnanian's Four Seasons communities, the Company is also one of the nation's largest builders of active adult homes.
Additional information on Hovnanian Enterprises, Inc., including a summary investment profile and the Company's 2008 annual report, can be accessed through the "Investor Relations" section of the Hovnanian Enterprises' website at http://www.khov.com. To be added to Hovnanian's investor e-mail or fax lists, please send an e-mail to IR@khov.com or sign up at http://www.khov.com.
NON-GAAP FINANCIAL MEASURES:
Consolidated earnings before interest expense, income taxes, depreciation and amortization ("EBITDA") and before inventory impairment loss and land option write-offs and gain on extinguishment of debt ("Adjusted EBITDA") are not U.S. generally accepted accounting principles (GAAP) financial measures. The most directly comparable GAAP financial measure is net income (loss). The reconciliation of EBITDA and Adjusted EBITDA to net loss is presented in a table attached to this earnings release.
Cash flow is a non-GAAP financial measure. The most directly comparable GAAP financial measure is Net Cash provided by (or used in) Operating Activities. The Company uses cash flow to mean the amount of Net Cash provided by (or used in) Operating Activities for the period, as reported on the Consolidated Statement of Cash Flows, excluding changes in mortgage notes receivable at the mortgage company, plus (or minus) the amount of Net Cash provided by (or used in) Investing Activities. For the third quarter of 2009, cash flow was negative $48.5 million, which was derived from $49.5 million from net cash used in operating activities plus the change in mortgage notes receivable of $1.0 million with no change in cash from investing activities.
Loss Before Income Taxes Excluding Land-Related Charges, Intangible Impairments and Gain on Extinguishment of Debt is a non-GAAP financial measure. The most directly comparable GAAP financial measure is Loss Before Income Taxes. The reconciliation of Loss Before Income Taxes Excluding Land-Related Charges, Intangible Impairments and Gain on Extinguishment of Debt to Loss Before Income Taxes is presented in a table attached to this earnings release.
Note: 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 risks, uncertainties and other factors include, but are not limited to, (1) changes in general and local economic and industry and business conditions, (2) adverse weather conditions and natural disasters, (3) changes in market conditions and seasonality of the Company's business, (4) changes in home prices and sales activity in the markets where the Company builds homes, (5) government regulation, including regulations concerning development of land, the home building, sales and customer financing processes, and the environment, (6) fluctuations in interest rates and the availability of mortgage financing, (7) shortages in, and price fluctuations of, raw materials and labor, (8) the availability and cost of suitable land and improved lots, (9) levels of competition, (10) availability of financing to the Company, (11) utility shortages and outages or rate fluctuations, (12) levels of indebtedness and restrictions on the Company's operations and activities imposed by the agreements governing the Company's outstanding indebtedness, (13) operations through joint ventures with third parties, (14) product liability litigation and warranty claims, (15) successful identification and integration of acquisitions, (16) significant influence of the Company's controlling stockholders, (17) geopolitical risks, terrorist acts and other acts of war and (18) other factors described in detail in the Company's Form 10-K for the year ended October 31, 2008 and in the Company's Form 10-Q for the quarter ended April 30, 2009.
(Financial Tables Follow)
Hovnanian Enterprises, Inc.
July 31, 2009
Statements of Consolidated Operations
(Dollars in Thousands, Except Per Share)
Three Months Ended Nine Months Ended
July 31, July 31,
-------- --------
2009 2008 2009 2008
---- ---- ---- ----
(Unaudited) (Unaudited)
Total Revenues $387,114 $716,541 $1,158,897 $2,586,681
Costs and Expenses (a) 566,622 914,974 1,971,695 3,288,910
Gain on Extinguishment of Debt 37,016 - 427,804 -
Loss from Unconsolidated Joint
Ventures (5,537) (920) (38,220) (9,356)
------ ---- ------- ------
Loss Before Income Taxes (148,029) (199,353) (423,214) (711,585)
Income Tax Provision (Benefit) 20,883 3,124 42,729 (37,454)
------ ----- ------ ------
Net Loss $(168,912) $(202,477) $(465,943) $(674,131)
========= ========= ========= =========
Per Share Data:
Basic and Assuming Dilution:
Loss Per Common Share $(2.16) $(2.67) $(5.96) $(9.98)
Weighted Average Number of
Common Shares Outstanding (b) 78,065 75,723 78,208 67,574
(a) Includes inventory impairment loss and land option write-offs.
(b) For periods with a net loss, basic shares are used in accordance
with GAAP rules.
Hovnanian Enterprises, Inc.
July 31, 2009
Reconciliation of Loss Before Income Taxes Excluding Land-Related
Charges, Intangible Impairments and Gain on Extinguishment of Debt to
Loss Before Income Taxes
(Dollars in Thousands)
Three Months Ended Nine Months Ended
July 31, July 31,
-------- --------
2009 2008 2009 2008
---- ---- ---- ----
(Unaudited) (Unaudited)
Loss Before Income Taxes $(148,029) $(199,353) $(423,214) $(711,585)
Inventory Impairment Loss
and Land Option Write-Offs 101,130 110,933 521,505 446,961
Unconsolidated Joint Venture
Investment, Intangible and
Land-Related Charges 4,646 725 35,197 9,877
Gain on Extinguishment of Debt (37,016) - (427,804) -
------- --- -------- ---
Loss Before Income Taxes
Excluding Land-Related Charges,
Intangible Impairments and
Gain on Extinguishment of
Debt (a) $(79,269) $(87,695) $(294,316) $(254,747)
======== ======== ========= =========
(a) Loss Before Income Taxes Excluding Land-related Charges, Intangible
Impairments and Gain on Extinguishment of Debt is a non-GAAP
Financial measure. The most directly comparable GAAP financial
measure is Loss Before Income Taxes.
Hovnanian Enterprises, Inc.
July 31, 2009
Gross Margin
(Dollars in Thousands)
Homebuilding Homebuilding
Gross Margin Gross Margin
Three Months Ended Nine Months Ended
July 31, July 31,
-------- --------
2009 2008 2009 2008
---- ---- ---- ----
(Unaudited) (Unaudited)
Sale of Homes $367,141 $692,690 $1,107,891 $2,500,192
Cost of Sales, Excluding
Interest (a) 333,887 634,013 1,022,496 2,320,195
------- ------- --------- ---------
Homebuilding Gross Margin,
Excluding Interest 33,254 58,677 85,395 179,997
Homebuilding Cost of
Sales Interest 20,363 34,182 67,752 95,248
------ ------ ------ ------
Homebuilding Gross Margin,
Including Interest $12,891 $24,495 $17,643 $84,749
======= ======= ======= =======
Gross Margin Percentage,
Excluding Interest 9.1% 8.5% 7.7% 7.2%
Gross Margin Percentage,
Including Interest 3.5% 3.5% 1.6% 3.4%
Land Sales Land Sales
Gross Margin Gross Margin
Three Months Ended Nine Months Ended
July 31, July 31,
-------- --------
2009 2008 2009 2008
---- ---- ---- ----
(Unaudited) (Unaudited)
Land Sales $8,488 $4,950 $14,388 $31,443
Cost of Sales, Excluding
Interest (a) 3,982 1,520 7,197 25,747
----- ----- ----- ------
Land Sales Gross Margin,
Excluding Interest 4,506 3,430 7,191 5,696
Land Sales Interest 4,258 1,291 6,038 3,385
----- ----- ----- -----
Land Sales Gross Margin,
Including Interest $248 $2,139 $1,153 $2,311
==== ====== ====== ======
(a) Does not include cost associated with walking away from land options
or inventory impairment losses which are recorded as Inventory
impairment loss and land option write-offs in the Condensed
Consolidated Statements of Operations.
Hovnanian Enterprises, Inc.
July 31, 2009
Reconciliation of Adjusted EBITDA to Net Loss
(Dollars in Thousands)
Three Months Ended Nine Months Ended
July 31, July 31,
-------- --------
2009 2008 2009 2008
---- ---- ---- ----
(Unaudited) (Unaudited)
Net Loss $(168,912) $(202,477) $(465,943) $(674,131)
Income Tax Provision (Benefit) 20,883 3,124 42,729 (37,454)
Interest Expense 48,563 46,128 140,486 110,290
------ ------ ------- -------
EBIT (a) (99,466) (153,225) (282,728) (601,295)
Depreciation 3,828 4,498 13,114 13,603
Amortization of Debt Costs 1,628 1,224 4,859 2,320
Amortization of Intangibles - 293 - 1,520
--- --- --- -----
EBITDA (b) (94,010) (147,210) (264,755) (583,852)
Inventory Impairment Loss and
Land Option Write-offs 101,130 110,933 521,505 446,961
Gain on Extinguishment of Debt (37,016) - (427,804) -
------- --- -------- ---
Adjusted EBITDA (c) $(29,896) $(36,277) $(171,054) $(136,891)
======== ======== ========= =========
Interest Incurred $43,944 $51,268 $145,042 $137,390
Adjusted EBITDA to Interest
Incurred (0.68) (0.71) (1.18) (1.00)
(a) EBIT is a non-GAAP financial measure. The most directly comparable
GAAP financial measure is net loss. EBIT represents earnings before
interest expense and income taxes.
(b) EBITDA is a non-GAAP financial measure. The most directly comparable
GAAP financial measure is net loss. EBITDA represents earnings before
interest expense, income taxes, depreciation and amortization.
(c) Adjusted EBITDA is a non-GAAP financial measure. The most directly
comparable GAAP financial measure is net loss. Adjusted EBITDA
represents earnings before interest expense, income taxes,
depreciation, amortization, inventory impairment loss and land option
write-offs, and gain on extinguishment of debt.
Hovnanian Enterprises, Inc.
July 31, 2009
Interest Incurred, Expensed and Capitalized
(Dollars in Thousands)
Three Months Ended Nine Months Ended
July 31, July 31,
-------- ---------
2009 2008 2009 2008
---- ---- ---- ----
(Unaudited) (Unaudited)
Interest Capitalized at
Beginning of Period $179,282 $177,602 $170,107 $155,642
Plus Interest Incurred 43,944 51,268 145,042 137,390
Less Interest Expensed 48,563 46,128 140,486 110,290
------ ------ ------- -------
Interest Capitalized at End
of Period (a) $174,663 $182,742 $174,663 $182,742
======== ======== ======== ========
(a) The Company incurred significant inventory impairments in recent
quarters, which are determined based on total inventory including
capitalized interest. However, the capitalized interest amounts are
shown gross before allocating any portion of impairments to
capitalized interest.
HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands Except Share Amounts)
July 31, October 31,
2009 2008
---- ----
ASSETS (unaudited) (1)
Homebuilding:
Cash and cash equivalents $545,591 $838,207
-------- --------
Restricted cash and cash equivalents 19,688 4,324
------ -----
Inventories - at the lower of cost or fair value:
Sold and unsold homes and lots under development 760,781 1,342,584
------- ---------
Land and land options held for future
development or sale 464,980 644,067
------- -------
Consolidated inventory not owned:
Specific performance options 31,554 10,610
Variable interest entities 43,141 77,022
Other options 46,465 84,799
------ ------
Total consolidated inventory not owned 121,160 172,431
------- -------
Total inventories 1,346,921 2,159,082
--------- ---------
Investments in and advances to unconsolidated
joint ventures 35,622 71,097
------ ------
Receivables, deposits, and notes 62,994 78,766
------ ------
Property, plant, and equipment - net 79,595 92,817
------ ------
Prepaid expenses and other assets 123,915 156,595
------- -------
Total homebuilding 2,214,326 3,400,888
--------- ---------
Financial services:
Cash and cash equivalents 5,538 9,849
Restricted cash 2,627 4,005
Mortgage loans held for sale or investment 60,287 90,729
Other assets 2,672 5,025
----- -----
Total financial services 71,124 109,608
------ -------
Income taxes receivable - including net deferred
tax benefits - 126,826
--- -------
Total assets $2,285,450 $3,637,322
========== ==========
(1) Derived from the audited balance sheet as of October 31, 2008.
HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands Except Share Amounts)
July 31, October 31,
2009 2008
---- ----
LIABILITIES AND STOCKHOLDERS' EQUITY (unaudited) (1)
Homebuilding:
Nonrecourse land mortgages $- $820
Accounts payable and other
liabilities 313,883 420,695
Customers' deposits 25,669 28,676
Nonrecourse mortgages secured by
operating properties 21,711 22,302
Liabilities from inventory not owned 80,882 135,077
------ -------
Total homebuilding 442,145 607,570
------- -------
Financial services:
Accounts payable and other
liabilities 8,887 10,559
Mortgage warehouse line of credit 49,820 84,791
------ ------
Total financial services 58,707 95,350
------ ------
Notes payable:
Senior secured notes 624,705 594,734
Senior notes 970,605 1,511,071
Senior subordinated notes 173,495 400,000
Accrued interest 28,977 72,477
------ ------
Total notes payable 1,797,782 2,578,282
Income tax payable 60,428 -
------ ---
Total liabilities 2,359,062 3,281,202
Minority interest related to
inventory not owned 30,183 24,880
------ ------
Minority interest in consolidated
joint ventures 732 976
--- ---
Stockholders' (deficit) equity:
Preferred stock, $.01 par value -
authorized 100,000 shares; issued 5,600
shares at July 31, 2009 and at October 31,
2008 with a liquidation preference of
$140,000 135,299 135,299
Common stock, Class A, $.01 par
value - authorized 200,000,000 shares;
issued 74,344,096 shares at July 31, 2009
and 73,803,879 shares at October 31, 2008
(including 11,694,720 shares at July 31,
2009 and October 31, 2008 held in Treasury) 743 738
Common stock, Class B, $.01 par value
(convertible to Class A at time of sale) -
authorized 30,000,000 shares; issued
15,266,567 shares at July 31, 2009 and
15,331,494 shares at October 31, 2008
(including 691,748 shares at July 31, 2009
and October 31, 2008 held in Treasury) 153 153
Paid in capital - common stock 449,773 418,626
Accumulated deficit (575,238) (109,295)
Treasury stock - at cost (115,257) (115,257)
-------- --------
Total stockholders' (deficit) equity (104,527) 330,264
-------- -------
Total liabilities and stockholders'
(deficit) equity $2,285,450 $3,637,322
========== ==========
(1) Derived from the audited balance sheet as of October 31, 2008.
HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands Except Per Share Data)
(unaudited)
Three Months Ended Nine Months Ended
July 31, July 31,
2009 2008 2009 2008
---- ---- ---- ----
Revenues:
Homebuilding:
Sale of homes $367,141 $692,690 $1,107,891 $2,500,192
Land sales and
other revenues 11,044 9,750 24,731 45,863
------ ----- ------ ------
Total homebuilding 378,185 702,440 1,132,622 2,546,055
Financial services 8,929 14,101 26,275 40,626
----- ------ ------ ------
Total revenues 387,114 716,541 1,158,897 2,586,681
------- ------- --------- ---------
Expenses:
Homebuilding:
Cost of sales, excluding
interest 337,869 635,533 1,029,693 2,345,942
Cost of sales interest 24,621 35,473 73,790 98,633
Inventory impairment
loss and land option
write-offs 101,130 110,933 521,505 446,961
------- ------- ------- -------
Total cost of sales 463,620 781,939 1,624,988 2,891,536
Selling, general and
administrative 55,264 90,004 187,130 287,819
------ ------ ------- -------
Total homebuilding 518,884 871,943 1,812,118 3,179,355
Financial services 6,345 8,234 19,568 27,554
Corporate general and
administrative 15,494 20,481 64,763 62,166
Other interest 23,942 10,655 66,696 11,657
Other operations 1,957 3,368 8,550 6,658
Intangible amortization - 293 - 1,520
--- --- --- -----
Total expenses 566,622 914,974 1,971,695 3,288,910
------- ------- --------- ---------
Gain on extinguishment
of debt 37,016 - 427,804 -
------ --- ------- ---
Loss from unconsolidated
joint ventures (5,537) (920) (38,220) (9,356)
------ ---- ------- ------
Loss before income taxes (148,029) (199,353) (423,214) (711,585)
-------- -------- -------- --------
State and federal income
tax provision (benefit):
State 1,542 1,476 23,318 15,700
Federal 19,341 1,648 19,411 (53,154)
------ ----- ------ -------
Total taxes 20,883 3,124 42,729 (37,454)
------ ----- ------ -------
Net loss $(168,912) $(202,477) $(465,943) $(674,131)
========= ========= ========= =========
Per share data:
Basic and assuming
dilution:
Loss per common share $(2.16) $(2.67) $(5.96) $(9.98)
Weighted average number
of common shares
outstanding 78,065 75,723 78,208 67,574
HOVNANIAN ENTERPRISES, INC.
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE)
(UNAUDITED)
Communities Under Development
Three Months - 7/31/2009
Net Contracts(1)
Three Months Ended
July 31,
--------
2009 2008 % Change
---- ---- --------
Northeast
Home 202 234 (13.7)%
Dollars $84,093 $90,953 (7.5)%
Avg. Price $416,302 $388,675 7.1%
Mid-Atlantic
Home 237 235 0.9%
Dollars $85,352 $82,437 3.5%
Avg. Price $360,135 $350,796 2.7%
Midwest
Home 128 115 11.3%
Dollars $25,411 $26,261 (3.2)%
Avg. Price $198,523 $228,365 (13.1)%
Southeast
Home 117 141 (17.0)%
Dollars $27,660 $32,364 (14.5)%
Avg. Price $236,410 $229,539 3.0%
Southwest
Home 519 533 (2.6)%
Dollars $109,027 $121,223 (10.1)%
Avg. Price $210,071 $227,437 (7.6)%
West
Home 239 326 (26.7)%
Dollars $55,053 $97,294 (43.4)%
Avg. Price $230,347 $298,445 (22.8)%
Consolidated
Total
Home 1,442 1,584 (9.0)%
Dollars $386,596 $450,532 (14.2)%
Avg. Price $268,097 $284,427 (5.7)%
Unconsolidated
Joint Ventures
Home 60 105 (42.9)%
Dollars $26,672 $43,227 (38.3)%
Avg. Price $444,533 $411,695 8.0%
Total
Home 1,502 1,689 (11.1)%
Dollars $413,268 $493,759 (16.3)%
Avg. Price $275,145 $292,339 (5.9)%
DELIVERIES INCLUDE EXTRAS
Deliveries
Three Months Ended
July 31,
--------
2009 2008 % Change
---- ---- --------
Northeast
Home 201 347 (42.1)%
Dollars $84,761 $169,394 (50.0)%
Avg. Price $421,697 $488,167 (13.6)%
Mid-Atlantic
Home 200 272 (26.5)%
Dollars $75,631 $115,836 (34.7)%
Avg. Price $378,155 $425,868 (11.2)%
Midwest
Home 128 230 (44.3)%
Dollars $29,925 $51,003 (41.3)%
Avg. Price $233,789 $221,752 5.4%
Southeast
Home 95 271 (64.9)%
Dollars $23,152 $69,763 (66.8)%
Avg. Price $243,705 $257,428 (5.3)%
Southwest
Home 500 596 (16.1)%
Dollars $105,518 $141,970 (25.7)%
Avg. Price $211,036 $238,205 (11.4)%
West
Home 198 469 (57.8)%
Dollars $48,154 $144,724 (66.7)%
Avg. Price $243,200 $308,580 (21.2)%
Consolidated
Total
Home 1,322 2,185 (39.5)%
Dollars $367,141 $692,690 (47.0)%
Avg. Price $277,716 $317,021 (12.4)%
Unconsolidated
Joint Ventures
Home 69 168 (58.9)%
Dollars $25,460 $59,807 (57.4)%
Avg. Price $368,986 $355,994 3.6%
Total
Home 1,391 2,353 (40.9)%
Dollars $392,601 $752,497 (47.8)%
Avg. Price $282,243 $319,803 (11.7)%
DELIVERIES INCLUDE EXTRAS
Contract Backlog
July 31,
--------
2009 2008 % Change
---- ---- --------
Northeast
Home 479 733 (34.7)%
Dollars $205,966 $329,914 (37.6)%
Avg. Price $429,992 $450,089 (4.5)%
Mid-Atlantic
Home 418 570 (26.7)%
Dollars $165,218 $247,309 (33.2)%
Avg. Price $395,258 $433,875 (8.9)%
Midwest
Home 324 474 (31.6)%
Dollars $62,645 $95,418 (34.3)%
Avg. Price $193,349 $201,304 (4.0)%
Southeast
Home 131 300 (56.3)%
Dollars $34,600 $84,899 (59.2)%
Avg. Price $264,122 $282,993 (6.7)%
Southwest
Home 376 636 (40.9)%
Dollars $81,238 $146,282 (44.5)%
Avg. Price $216,059 $230,002 (6.1)%
West
Home 250 263 (4.9)%
Dollars $64,557 $91,666 (29.6)%
Avg. Price $258,228 $348,540 (25.9)%
Consolidated
Total
Home 1,978 2,976 (33.5)%
Dollars $614,224 $995,488 (38.3)%
Avg. Price $310,527 $334,505 (7.2)%
Unconsolidated
Joint Ventures
Home 212 326 (35.0)%
Dollars $146,747 $179,937 (18.4)%
Avg. Price $692,203 $551,954 25.4%
Total
Home 2,190 3,302 (33.7)%
Dollars $760,971 $1,175,425 (35.3)%
Avg. Price $347,475 $355,974 (2.4)%
DELIVERIES INCLUDE EXTRAS
Notes:
(1) Net contracts are defined as new contracts signed during the
period for the purchase of homes, less cancellations of prior
contracts.
HOVNANIAN ENTERPRISES, INC.
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE)
(UNAUDITED)
Communities Under Development
Nine Months - 7/31/2009
Net Contracts(1)
Nine Months Ended
July 31,
--------
2009 2008 % Change
---- ---- --------
Northeast
Home 568 766 (25.8)%
Dollars $254,091 $315,020 (19.3)%
Avg. Price $447,343 $411,251 8.8%
Mid-Atlantic
Home 615 723 (14.9)%
Dollars $214,819 $262,928 (18.3)%
Avg. Price $349,299 $363,663 (3.9)%
Midwest
Home 388 413 (6.1)%
Dollars $77,745 $88,021 (11.7)%
Avg. Price $200,374 $213,126 (6.0)%
Southeast
Home 361 493 (26.8)%
Dollars $78,796 $118,931 (33.7)%
Avg. Price $218,271 $241,239 (9.5)%
Southwest
Home 1,346 1,817 (25.9)%
Dollars $279,495 $414,939 (32.6)%
Avg. Price $207,649 $228,365 (9.1)%
West
Home 711 1,109 (35.9)%
Dollars $154,777 $355,260 (56.4)%
Avg. Price $217,689 $320,343 (32.0)%
Consolidated
Total
Home 3,989 5,321 (25.0)%
Dollars $1,059,723 $1,555,099 (31.9)%
Avg. Price $265,661 $292,257 (9.1)%
Unconsolidated
Joint Ventures
Home 164 418 (60.8)%
Dollars $65,437 $177,088 (63.0)%
Avg. Price $399,006 $423,658 (5.8)%
Total
Home 4,153 5,739 (27.6)%
Dollars $1,125,160 $1,732,187 (35.0)%
Avg. Price $270,927 $301,827 (10.2)%
DELIVERIES INCLUDE EXTRAS
Deliveries
Nine Months Ended
July 31,
--------
2009 2008 % Change
---- ---- --------
Northeast
Home 586 1,008 (41.9)%
Dollars $254,749 $498,330 (48.9)%
Avg. Price $434,725 $494,375 (12.1)%
Mid-Atlantic
Home 582 906 (35.8)%
Dollars $215,513 $375,888 (42.7)%
Avg. Price $370,297 $414,887 (10.7)%
Midwest
Home 355 698 (49.1)%
Dollars $80,685 $152,675 (47.2)%
Avg. Price $227,282 $218,732 3.9%
Southeast
Home 393 2,344 (83.2)%
Dollars $90,001 $572,127 (84.3)%
Avg. Price $229,010 $244,081 (6.2)%
Southwest
Home 1,390 1,932 (28.1)%
Dollars $305,637 $449,803 (32.1)%
Avg. Price $219,883 $232,817 (5.6)%
West
Home 612 1,395 (56.1)%
Dollars $161,306 $451,369 (64.3)%
Avg. Price $263,571 $323,562 (18.5)%
Consolidated
Total
Home 3,918 8,283 (52.7)%
Dollars $1,107,891 $2,500,192 (55.7)%
Avg. Price $282,769 $301,846 (6.3)%
Unconsolidated
Joint Ventures
Home 215 519 (58.6)%
Dollars $72,494 $196,388 (63.1)%
Avg. Price $337,181 $378,397 (10.9)%
Total
Home 4,133 8,802 (53.0)%
Dollars $1,180,385 $2,696,580 (56.2)%
Avg. Price $285,600 $306,360 (6.8)%
DELIVERIES INCLUDE EXTRAS
Contract Backlog
July 31,
--------
2009 2008 % Change
---- ---- --------
Northeast
Home 479 733 (34.7)%
Dollars $205,966 $329,914 (37.6)%
Avg. Price $429,992 $450,089 (4.5)%
Mid-Atlantic
Home 418 570 (26.7)%
Dollars $165,218 $247,309 (33.2)%
Avg. Price $395,258 $433,875 (8.9)%
Midwest
Home 324 474 (31.6)%
Dollars $62,645 $95,418 (34.3)%
Avg. Price $193,349 $201,304 (4.0)%
Southeast
Home 131 300 (56.3)%
Dollars $34,600 $84,899 (59.2)%
Avg. Price $264,122 $282,993 (6.7)%
Southwest
Home 376 636 (40.9)%
Dollars $81,238 $146,282 (44.5)%
Avg. Price $216,059 $230,002 (6.1)%
West
Home 250 263 (4.9)%
Dollars $64,557 $91,666 (29.6)%
Avg. Price $258,228 $348,540 (25.9)%
Consolidated
Total
Home 1,978 2,976 (33.5)%
Dollars $614,224 $995,488 (38.3)%
Avg. Price $310,527 $334,505 (7.2)%
Unconsolidated
Joint Ventures
Home 212 326 (35.0)%
Dollars $146,747 $179,937 (18.4)%
Avg. Price $692,203 $551,954 25.4%
Total
Home 2,190 3,302 (33.7)%
Dollars $760,971 $1,175,425 (35.3)%
Avg. Price $347,475 $355,974 (2.4)%
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.
SOURCE Hovnanian Enterprises, Inc.