Hovnanian Enterprises Reports Fiscal 2014 Third Quarter Results

RED BANK, N.J., Sept. 4, 2014 (GLOBE NEWSWIRE) -- Hovnanian Enterprises, Inc. (NYSE:HOV), a leading national homebuilder, reported results for its fiscal third quarter and nine months ended July 31, 2014.

RESULTS FOR THE THREE AND NINE MONTH PERIODS ENDED JULY 31, 2014:

  • Total revenues were $551.0 million in the third quarter of fiscal 2014, an increase of 15.2% compared with $478.4 million during the fiscal 2013 third quarter. For the first nine months of fiscal 2014, total revenues increased 7.9% to $1.36 billion compared with $1.26 billion in the first nine months of the prior year.
  • Homebuilding gross margin percentage, before interest expense and land charges included in cost of sales, was 21.3% for the third quarter ended July 31, 2014, up 100 basis points compared with 20.3% in last year's third quarter. During the first three quarters of fiscal 2014, homebuilding gross margin percentage, before interest expense and land charges included in cost of sales, was 20.2%, up 130 basis points compared with 18.9% in the same period of the prior year.
  • Pre-tax income during the fiscal 2014 third quarter was $15.4 million compared with pre-tax income of $10.4 million in last year's third quarter. During the nine months ended July 31, 2014, the pre-tax loss was $15.8 million compared with a pre-tax loss of $11.7 million during the same period a year ago.
  • Net income was $17.1 million, or $0.11 per common share, in the fiscal 2014 third quarter, compared with net income of $8.5 million, or $0.06 per common share in the prior year's third quarter. For the first nine months of fiscal 2014, the net loss was $15.3 million, or $0.10 per common share, which included $0.5 million of federal and state tax benefits, compared with a net loss of $1.5 million, or $0.01 per common share, which included $10.2 million of federal and state tax benefits, during the first nine months of fiscal 2013.
  • Deliveries, including unconsolidated joint ventures, were 1,549 homes for the third quarter ended July 31, 2014, a 3.1% increase compared with 1,502 homes in the fiscal 2013 third quarter. For the nine months ended July 31, 2014, deliveries, including unconsolidated joint ventures, were 4,018 homes compared with 4,114 homes in the first nine months of the prior year.
  • As of July 31, 2014, consolidated active selling communities increased 5.4% to 196 communities compared with 186 communities at July 31, 2013.
  • The dollar value of consolidated net contracts increased 4.6% to $517.3 million in the third quarter of fiscal 2014 compared with $494.6 million in the fiscal 2013 third quarter. The dollar value of net contracts, including unconsolidated joint ventures, for the third quarter of fiscal 2014 decreased 0.7% to $542.9 million compared with $546.9 million in the third quarter of the prior year.
  • For the third quarter ended July 31, 2014, the number of consolidated net contracts decreased 6.3% to 1,357 homes compared with 1,448 homes in last year's third quarter. The number of net contracts, including unconsolidated joint ventures, decreased 9.2% to 1,424 homes during the third quarter of fiscal 2014 from 1,568 homes in the same period of the prior year.
  • For the nine months ended July 31, 2014, the dollar value of consolidated net contracts increased 8.4% to $1.59 billion compared with $1.47 billion in the first nine months of fiscal 2013. The dollar value of net contracts, including unconsolidated joint ventures, for the nine months ended July 31, 2014 was $1.70 billion compared with $1.71 billion in the first nine months of the prior year.
  • In the first nine months of fiscal 2014, the number of consolidated net contracts decreased 1.8% to 4,258 homes from 4,338 homes in the first nine months of fiscal 2013. The number of net contracts, including unconsolidated joint ventures, decreased 6.8% to 4,533 homes for the first nine months of fiscal 2014 from 4,862 homes in the first nine months of the prior year.
  • As of July 31, 2014, the dollar value of consolidated contract backlog increased 14.3% to $1.03 billion compared with $897.2 million at July 31, 2013. The dollar value of contract backlog, as of July 31, 2014, including unconsolidated joint ventures, was $1.11 billion, an increase of 7.8%, compared with $1.03 billion as of July 31, 2013.
  • As of July 31, 2014, the number of homes in consolidated contract backlog increased 4.7% to 2,690 homes compared with 2,569 homes as of the end of the third quarter of fiscal 2013. Contract backlog, as of July 31, 2014, including unconsolidated joint ventures, increased to 2,907 homes compared with 2,893 homes as of July 31, 2013.
  • Total interest expense as a percentage of total revenues declined 100 basis points to 6.5% for the third quarter ended July 31, 2014 compared with 7.5% in last year's third quarter. For the first nine months of fiscal 2014, total interest expense as a percentage of total revenues declined 60 basis points to 7.6% compared with 8.2% during the same period a year ago.
  • Total SG&A was $67.0 million, or 12.2% of total revenues, during the fiscal 2014 third quarter compared to $56.4 million, or 11.8% of total revenues, in last year's third quarter. Total SG&A was $189.8 million, or 13.9% of total revenues, in the first nine months of fiscal 2014 compared to $157.2 million, or 12.5% of total revenues, in the prior year's first nine months.
  • Adjusted EBITDA increased to $53.8 million for fiscal 2014 third quarter compared to $48.6 million during the third quarter of fiscal 2013. Adjusted EBITDA decreased to $97.5 million for the nine months ended July 31, 2014 compared to $102.2 million in the first nine months of fiscal 2013.
  • The contract cancellation rate, including unconsolidated joint ventures, for the three months ended July 31, 2014 was 22%, compared with 18% in the third quarter of the prior year.
  • During August of 2014, the dollar value of net contracts and the number of net contracts, including unconsolidated joint ventures, increased 21.1% and 11.5%, respectively, to $193.6 million compared with $159.9 million and to 483 homes from 433 homes in August 2013.

  • The valuation allowance was $933.3 million as of July 31, 2014. The valuation allowance is a non-cash reserve against the tax assets for GAAP purposes. For tax purposes, the tax deductions associated with the tax assets may be carried forward for 20 years from the date the deductions were incurred.

LIQUIDITY AND INVENTORY AS OF JULY 31, 2014:

  • During the third quarter of fiscal 2014, $137.5 million was spent on land and land development. For the nine months ended July 31, 2014, the dollar amount spent on land and land development was $424.5 million.
  • Total liquidity at the end of the fiscal 2014 third quarter was $231.7 million compared to $278.9 million at July 31, 2013. Total liquidity at July 31, 2014 included $176.6 million of homebuilding cash, $5.6 million of restricted cash required to collateralize letters of credit and $49.5 million of availability under the unsecured revolving credit facility.
  • As of July 31, 2014, the land position, including unconsolidated joint ventures, was 37,706 lots, consisting of 17,620 lots under option and 20,086 owned lots, an increase of 5,183 lots compared with a total of 32,523 lots as of July 31, 2013.
  • During the third quarter of fiscal 2014, approximately 2,900 lots were put under option or acquired in 53 communities.

COMMENTS FROM MANAGEMENT:

"We were pleased with the strength of our gross margins and our revenue growth during the third quarter of fiscal 2014," stated Ara K. Hovnanian, Chairman of the Board, President and Chief Executive Officer. "Assuming no change in current market conditions, we expect to be profitable for the full fiscal 2014 year. We believe the housing industry remains in the early stages of a recovery. We anticipate generating revenue growth from continued investments in new communities. This will allow us to leverage our SG&A and interest costs, which we expect will result in higher levels of profitability in future years," concluded Mr. Hovnanian.

WEBCAST INFORMATION:

Hovnanian Enterprises will webcast its fiscal 2014 third quarter financial results conference call at 11:00 a.m. E.T. on Thursday, September 4, 2014. The webcast can be accessed live through the "Investor Relations" section of Hovnanian Enterprises' Website at http://www.khov.com. For those who are not available to listen to the live webcast, an archive of the broadcast will be available under the "Audio Archives" section of the Investor Relations page on the Hovnanian Website at http://www.khov.com. The archive will be available for 12 months.

ABOUT HOVNANIAN ENTERPRISES®, INC.:

Hovnanian Enterprises, Inc., founded in 1959 by Kevork S. Hovnanian, is headquartered in Red Bank, New Jersey. The Company is one of the nation's largest homebuilders with operations in Arizona, California, Delaware, Florida, Georgia, Illinois, Maryland, Minnesota, New Jersey, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia, Washington, D.C. and West Virginia. The Company's homes are marketed and sold under the trade names K. Hovnanian® Homes®, Brighton Homes® and Parkwood Builders. As the developer of K. Hovnanian's® Four Seasons communities, the Company is also one of the nation's largest builders of active adult homes.

Additional information on Hovnanian Enterprises, Inc., including a summary investment profile and the Company's 2013 annual report, can be accessed through the "Investor Relations" section of the Hovnanian Enterprises' website at http://www.khov.com. To be added to Hovnanian's investor e-mail or fax lists, please send an e-mail to IR@khov.com or sign up at http://www.khov.com.

NON-GAAP FINANCIAL MEASURES:

Consolidated earnings before interest expense and income taxes ("EBIT") and before depreciation and amortization ("EBITDA") and before inventory impairment loss and land option write-offs 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 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 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.

FORWARD-LOOKING STATEMENTS

All statements in this press release that are not historical facts should be considered as "forward-looking statements." Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Although we believe that our plans, intentions and expectations reflected in, or suggested by, such forward looking statements are reasonable, we can give no assurance that such plans, intentions, or expectations will be achieved. Such risks, uncertainties and other factors include, but are not limited to, (1) changes in general and local economic, industry and business conditions and impacts of the sustained homebuilding downturn; (2) adverse weather and other environmental conditions and natural disasters; (3) changes in market conditions and seasonality of the Company's business; (4) changes in home prices and sales activity in the markets where the Company builds homes; (5) government regulation, including regulations concerning development of land, the home building, sales and customer financing processes, tax laws and the environment; (6) fluctuations in interest rates and the availability of mortgage financing; (7) shortages in, and price fluctuations of, raw materials and labor; (8) the availability and cost of suitable land and improved lots; (9) levels of competition; (10) availability of financing to the Company; (11) utility shortages and outages or rate fluctuations; (12) levels of indebtedness and restrictions on the Company's operations and activities imposed by the agreements governing the Company's outstanding indebtedness; (13) the Company's sources of liquidity; (14) changes in credit ratings; (15) availability of net operating loss carryforwards; (16) operations through joint ventures with third parties; (17) product liability litigation, warranty claims and claims made by mortgage investors; (18) successful identification and integration of acquisitions; (19) significant influence of the Company's controlling stockholders; (20) changes in tax laws affecting the after-tax costs of owning a home; (21) geopolitical risks, terrorist acts and other acts of war; and (22) other factors described in detail in the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2013 and subsequent filings with the Securities and Exchange Commission. Except as otherwise required by applicable securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.

Hovnanian Enterprises, Inc.
July 31, 2014
Statements of Consolidated Operations
(Dollars in Thousands, Except Per Share Data)
Three Months Ended Nine Months Ended
July 31, July 31,
2014 2013 2014 2013
(Unaudited) (Unaudited)
Total Revenues $551,009 $478,357 $1,364,986 $1,259,566
Costs and Expenses (a) 535,848 471,659 1,383,496 1,278,051
Loss on Extinguishment of Debt -- -- (1,155) --
Income from Unconsolidated Joint Ventures 211 3,690 3,849 6,806
Income (Loss) Before Income Taxes 15,372 10,388 (15,816) (11,679)
Income Tax (Benefit) Provision (1,733) 1,922 (496) (10,155)
Net Income (Loss) $17,105 $8,466 $(15,320) $(1,524)
Per Share Data:
Basic:
Income (Loss) Per Common Share $0.11 $0.06 $(0.10) $(0.01)
Weighted-Average Number of Common Shares Outstanding (b) 146,365 146,056 146,223 144,840
Assuming Dilution:
Income (Loss) Per Common Share $0.11 $0.06 $(0.10) $(0.01)
Weighted-Average Number of Common Shares Outstanding (b) 162,278 162,823 146,223 144,840
(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, 2014
Reconciliation of Income (Loss) Before Income Taxes Excluding Land-Related Charges and
Loss on Extinguishment of Debt to Income (Loss) Before Income Taxes
(Dollars in Thousands)
Three Months Ended Nine Months Ended
July 31, July 31,
2014 2013 2014 2013
(Unaudited) (Unaudited)
Income (Loss) Before Income Taxes $15,372 $10,388 $(15,816) $(11,679)
Inventory Impairment Loss and Land Option Write-Offs 741 623 1,927 3,479
Loss on Extinguishment of Debt -- -- 1,155 --
Income (Loss) Before Income Taxes Excluding Land-Related Charges and Loss on Extinguishment of Debt (a) $16,113 $11,011 $(12,734) $(8,200)
(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.
Hovnanian Enterprises, Inc.
July 31, 2014
Gross Margin
(Dollars in Thousands)
Homebuilding Gross Margin Homebuilding Gross Margin
Three Months Ended Nine Months Ended
July 31, July 31,
2014 2013 2014 2013
(Unaudited) (Unaudited)
Sale of Homes $538,007 $462,376 $1,331,490 $1,206,233
Cost of Sales, Excluding Interest and Land Charges(a) 423,488 368,617 1,061,880 978,309
Homebuilding Gross Margin, Excluding Interest and Land Charges 114,519 93,759 269,610 227,924
Homebuilding Cost of Sales Interest 15,757 13,702 37,247 35,089
Homebuilding Gross Margin, Including Interest and Excluding Land Charges $98,762 $80,057 $232,363 $192,835
Gross Margin Percentage, Excluding Interest and Land Charges 21.3% 20.3% 20.2% 18.9%
Gross Margin Percentage, Including Interest and Excluding Land Charges 18.4% 17.3% 17.5% 16.0%
Land Sales Gross Margin Land Sales Gross Margin
Three Months Ended Nine Months Ended
July 31, July 31,
2014 2013 2014 2013
(Unaudited) (Unaudited)
Land and Lot Sales $968 $1,940 $2,897 $15,218
Cost of Sales, Excluding Interest and Land Charges(a) 657 1,847 1,585 14,053
Land and Lot Sales Gross Margin, Excluding Interest and Land Charges 311 93 1,312 1,165
Land and Lot Sales Interest 70 55 477 222
Land and Lot Sales Gross Margin, Including Interest and Excluding Land Charges $241 $38 $835 $943
(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, 2014
Reconciliation of Adjusted EBITDA to Net Income (Loss)
(Dollars in Thousands)
Three Months Ended Nine Months Ended
July 31, July 31,
2014 2013 2014 2013
(Unaudited) (Unaudited)
Net Income (Loss) $17,105 $8,466 $(15,320) $(1,524)
Income Tax (Benefit) Provision (1,733) 1,922 (496) (10,155)
Interest Expense 35,707 35,706 104,409 103,892
EBIT (a) 51,079 46,094 88,593 92,213
Depreciation 865 938 2,571 3,782
Amortization of Debt Costs 1,082 907 3,240 2,718
EBITDA (b) 53,026 47,939 94,404 98,713
Inventory Impairment Loss and Land Option Write-offs 741 623 1,927 3,479
Loss on Extinguishment of Debt -- -- 1,155 --
Adjusted EBITDA (c) $53,767 $48,562 $97,486 $102,192
Interest Incurred $36,472 $33,195 $108,073 $97,813
Adjusted EBITDA to Interest Incurred 1.47 1.46 0.90 1.04
(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 and inventory impairment loss and land option write-offs, and loss on extinguishment of debt.
Hovnanian Enterprises, Inc.
July 31, 2014
Interest Incurred, Expensed and Capitalized
(Dollars in Thousands)
Three Months Ended Nine Months Ended
July 31, July 31,
2014 2013 2014 2013
(Unaudited) (Unaudited)
Interest Capitalized at Beginning of Period $107,992 $112,488 $105,093 $116,056
Plus Interest Incurred 36,472 33,195 108,073 97,813
Less Interest Expensed 35,707 35,706 104,409 103,892
Interest Capitalized at End of Period (a) $108,757 $109,977 $108,757 $109,977
(a) Capitalized interest amounts are shown gross before allocating any portion of impairments to capitalized interest.
HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
July 31,
2014
October 31,
2013
(Unaudited) (1)
ASSETS
Homebuilding:
Cash $176,639 $319,142
Restricted cash and cash equivalents 12,596 10,286
Inventories:
Sold and unsold homes and lots under development 981,529 752,749
Land and land options held for future development or sale 268,396 225,152
Consolidated inventory not owned:
Specific performance options 3,900 792
Other options 122,332 100,071
Total consolidated inventory not owned 126,232 100,863
Total inventories 1,376,157 1,078,764
Investments in and advances to unconsolidated joint ventures 62,294 51,438
Receivables, deposits and notes, net 56,232 45,085
Property, plant and equipment, net 45,960 46,211
Prepaid expenses and other assets 65,389 59,351
Total homebuilding 1,795,267 1,610,277
Financial services:
Cash 7,082 10,062
Restricted cash and cash equivalents 13,272 21,557
Mortgage loans held for sale at fair value 76,173 112,953
Other assets 1,934 4,281
Total financial services 98,461 148,853
Total assets $1,893,728 $1,759,130
(1) Derived from the audited balance sheet as of October 31, 2013.
HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands Except Share and Per Share Amounts)
July 31,
2014
October 31,
2013
(Unaudited) (1)
LIABILITIES AND EQUITY
Homebuilding:
Nonrecourse mortgages $98,338 $62,903
Accounts payable and other liabilities 315,779 307,764
Customers' deposits 40,141 30,119
Nonrecourse mortgages secured by operating properties 16,904 17,733
Liabilities from inventory not owned 102,096 87,866
Total homebuilding 573,258 506,385
Financial services:
Accounts payable and other liabilities 23,736 32,874
Mortgage warehouse lines of credit 53,963 91,663
Total financial services 77,699 124,537
Notes payable:
Senior secured notes, net of discount 979,599 978,611
Senior notes, net of discount 590,290 461,210
Senior amortizing notes 17,049 20,857
Senior exchangeable notes 69,215 66,615
TEU senior subordinated amortizing notes -- 2,152
Accrued interest 27,027 28,261
Total notes payable 1,683,180 1,557,706
Income taxes payable 2,711 3,301
Total liabilities 2,336,848 2,191,929
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 July 31, 2014 and at October 31, 2013 135,299 135,299
Common stock, Class A, $0.01 par value – authorized 400,000,000 shares; issued 142,821,363 shares at July 31, 2014 and 136,306,223 shares at October 31, 2013 (including 11,760,763 shares at July 31, 2014 and October 31, 2013 held in Treasury) 1,428 1,363
Common stock, Class B, $0.01 par value (convertible to Class A at time of sale) – authorized 60,000,000 shares; issued 15,497,743 shares at July 31, 2014 and 15,347,615 shares at October 31, 2013 (including 691,748 shares at July 31, 2014 and October 31, 2013 held in Treasury) 155 153
Paid-in capital – common stock 695,086 689,727
Accumulated deficit (1,159,728) (1,144,408)
Treasury stock – at cost (115,360) (115,360)
Total Hovnanian Enterprises, Inc. stockholders' equity deficit (443,120) (433,226)
Noncontrolling interest in consolidated joint ventures -- 427
Total equity deficit (443,120) (432,799)
Total liabilities and equity $1,893,728 $1,759,130
(1) Derived from the audited balance sheet as of October 31, 2013.
HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands Except Per Share Data)
(Unaudited)
Three Months Ended July 31, Nine Months Ended July 31,
2014 2013 2014 2013
Revenues:
Homebuilding:
Sale of homes $538,007 $462,376 $1,331,490 $1,206,233
Land sales and other revenues 1,896 3,103 4,884 18,114
Total homebuilding 539,903 465,479 1,336,374 1,224,347
Financial services 11,106 12,878 28,612 35,219
Total revenues 551,009 478,357 1,364,986 1,259,566
Expenses:
Homebuilding:
Cost of sales, excluding interest 424,145 370,464 1,063,465 992,362
Cost of sales interest 15,827 13,757 37,724 35,311
Inventory impairment loss and land option write-offs 741 623 1,927 3,479
Total cost of sales 440,713 384,844 1,103,116 1,031,152
Selling, general and administrative 51,150 42,331 142,918 116,904
Total homebuilding expenses 491,863 427,175 1,246,034 1,148,056
Financial services 7,212 6,640 20,591 21,205
Corporate general and administrative 15,804 14,056 46,837 40,284
Other interest 19,880 21,949 66,685 68,581
Other operations 1,089 1,839 3,349 (75)
Total expenses 535,848 471,659 1,383,496 1,278,051
Loss on extinguishment of debt -- -- (1,155) --
Income from unconsolidated joint ventures 211 3,690 3,849 6,806
Income (loss) before income taxes 15,372 10,388 (15,816) (11,679)
State and federal income tax (benefit) provision:
State 247 1,922 1,484 (277)
Federal (1,980) -- (1,980) (9,878)
Total income taxes (1,733) 1,922 (496) (10,155)
Net income (loss) $17,105 $8,466 $(15,320) $(1,524)
Per share data:
Basic:
Income (loss) per common share $0.11 $0.06 $(0.10) $(0.01)
Weighted-average number of common shares outstanding 146,365 146,056 146,223 144,840
Assuming dilution:
Income (loss) per common share $0.11 $0.06 $(0.10) $(0.01)
Weighted-average number of common shares outstanding 162,278 162,823 146,223 144,840
HOVNANIAN ENTERPRISES, INC.
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE)
(UNAUDITED) Communities Under Development
Three Months - July 31, 2014
Net Contracts Deliveries Contract
Three Months Ended Three Months Ended Backlog
Jul 31, Jul 31, Jul 31,

2014

2013
%
Change

2014

2013
%
Change

2014

2013
%
Change
Northeast
(NJ, PA) Homes 117 145 (19.3)% 128 154 (16.9)% 226 306 (26.1)%
Dollars $64,356 $69,118 (6.9)% $60,165 $66,447 (9.5)% $118,038 $142,421 (17.1)%
Avg. Price $550,055 $476,679 15.4% $470,041 $431,477 8.9% $522,291 $465,429 12.2%
Mid-Atlantic
(DE, MD, VA, WV) Homes 208 158 31.6% 187 189 (1.1)% 425 310 37.1%
Dollars $91,701 $79,104 15.9% $89,834 $89,123 0.8% $205,087 $158,420 29.5%
Avg. Price $440,870 $500,656 (11.9)% $480,393 $471,548 1.9% $482,558 $511,032 (5.6)%
Midwest
(IL, MN, OH) Homes 219 232 (5.6)% 190 154 23.4% 695 608 14.3%
Dollars $72,287 $57,066 26.7% $55,392 $37,918 46.1% $188,882 $144,221 31.0%
Avg. Price $330,078 $245,973 34.2% $291,534 $246,221 18.4% $271,773 $237,206 14.6%
Southeast
(FL, GA, NC, SC) Homes 132 175 (24.6)% 179 129 38.8% 261 341 (23.5)%
Dollars $39,855 $54,581 (27.0)% $55,403 $35,265 57.1% $86,873 $101,031 (14.0)%
Avg. Price $301,932 $311,893 (3.2)% $309,515 $273,372 13.2% $332,847 $296,280 12.3%
Southwest
(AZ, TX) Homes 593 663 (10.6)% 650 606 7.3% 970 882 10.0%
Dollars $204,460 $195,403 4.6% $200,788 $181,593 10.6% $355,807 $287,719 23.7%
Avg. Price $344,789 $294,726 17.0% $308,905 $299,658 3.1% $366,811 $326,212 12.4%
West
(CA) Homes 88 75 17.3% 130 109 19.3% 113 122 (7.4)%
Dollars $44,686 $39,322 13.6% $76,425 $52,030 46.9% $70,906 $63,374 11.9%
Avg. Price $507,798 $524,294 (3.1)% $587,883 $477,343 23.2% $627,485 $519,459 20.8%
Consolidated Total
Homes 1,357 1,448 (6.3)% 1,464 1,341 9.2% 2,690 2,569 4.7%
Dollars $517,345 $494,594 4.6% $538,007 $462,376 16.4% $1,025,593 $897,186 14.3%
Avg. Price $381,242 $341,571 11.6% $367,491 $344,800 6.6% $381,261 $349,236 9.2%
Unconsolidated Joint Ventures
Homes 67 120 (44.2)% 85 161 (47.2)% 217 324 (33.0)%
Dollars $25,601 $52,280 (51.0)% $27,383 $76,691 (64.3)% $87,702 $135,173 (35.1)%
Avg. Price $382,105 $435,667 (12.3)% $322,153 $476,339 (32.4)% $404,157 $417,201 (3.1)%
Grand Total
Homes 1,424 1,568 (9.2)% 1,549 1,502 3.1% 2,907 2,893 0.5%
Dollars $542,946 $546,874 (0.7)% $565,390 $539,067 4.9% $1,113,295 $1,032,359 7.8%
Avg. Price $381,283 $348,772 9.3% $365,003 $358,899 1.7% $382,970 $356,847 7.3%
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) Segment data excludes unconsolidated joint ventures.
HOVNANIAN ENTERPRISES, INC.
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE)
(UNAUDITED) Communities Under Development
Nine Months - July 31, 2014
Net Contracts Deliveries Contract
Nine Months Ended Nine Months Ended Backlog
Jul 31, Jul 31, Jul 31,
2014 2013 % Change 2014 2013 % Change 2014 2013 % Change
Northeast
(NJ, PA) Homes 374 433 (13.6)% 368 391 (5.9)% 226 306 (26.1)%
Dollars $191,880 $200,786 (4.4)% $178,848 $173,781 2.9% $118,038 $142,421 (17.1)%
Avg. Price $513,048 $463,709 10.6% $486,000 $444,452 9.3% $522,291 $465,429 12.2%
Mid-Atlantic
(DE, MD, VA, WV) Homes 611 485 26.0% 457 441 3.6% 425 310 37.1%
Dollars $282,533 $238,921 18.3% $218,615 $199,275 9.7% $205,087 $158,420 29.5%
Avg. Price $462,411 $492,621 (6.1)% $478,370 $451,871 5.9% $482,558 $511,032 (5.6)%
Midwest
(IL, MN, OH) Homes 616 632 (2.5)% 526 451 16.6% 695 608 14.3%
Dollars $185,920 $157,951 17.7% $147,754 $109,446 35.0% $188,882 $144,221 31.0%
Avg. Price $301,819 $249,922 20.8% $280,902 $242,674 15.8% $271,773 $237,206 14.6%
Southeast
(FL, GA, NC, SC) Homes 427 479 (10.9)% 474 373 27.1% 261 341 (23.5)%
Dollars $133,540 $139,324 (4.2)% $145,323 $100,988 43.9% $86,873 $101,031 (14.0)%
Avg. Price $312,740 $290,864 7.5% $306,589 $270,746 13.2% $332,847 $296,280 12.3%
Southwest
(AZ, TX) Homes 1,935 2,001 (3.3)% 1,642 1,625 1.0% 970 882 10.0%
Dollars $632,528 $590,189 7.2% $493,087 $463,309 6.4% $355,807 $287,719 23.7%
Avg. Price $326,888 $294,947 10.8% $300,297 $285,113 5.3% $366,811 $326,212 12.4%
West
(CA) Homes 295 308 (4.2)% 268 377 (28.9)% 113 122 (7.4)%
Dollars $168,243 $143,931 16.9% $147,863 $159,434 (7.3)% $70,906 $63,374 11.9%
Avg. Price $570,314 $467,309 22.0% $551,729 $422,903 30.5% $627,485 $519,459 20.8%
Consolidated Total
Homes 4,258 4,338 (1.8)% 3,735 3,658 2.1% 2,690 2,569 4.7%
Dollars $1,594,644 $1,471,102 8.4% $1,331,490 $1,206,233 10.4% $1,025,593 $897,186 14.3%
Avg. Price $374,505 $339,120 10.4% $356,490 $329,752 8.1% $381,261 $349,236 9.2%
Unconsolidated Joint Ventures
Homes 275 524 (47.5)% 283 456 (37.9)% 217 324 (33.0)%
Dollars $107,137 $235,071 (54.4)% $105,370 $209,804 (49.8)% $87,702 $135,173 (35.1)%
Avg. Price $389,588 $448,607 (13.2)% $372,332 $460,095 (19.1)% $404,157 $417,201 (3.1)%
Grand Total
Homes 4,533 4,862 (6.8)% 4,018 4,114 (2.3)% 2,907 2,893 0.5%
Dollars $1,701,781 $1,706,173 (0.3)% $1,436,860 $1,416,037 1.5% $1,113,295 $1,032,359 7.8%
Avg. Price $375,420 $350,920 7.0% $357,606 $344,200 3.9% $382,970 $356,847 7.3%
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) Segment data excludes unconsolidated joint ventures.
HOVNANIAN ENTERPRISES, INC.
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE)
(UNAUDITED) Communities Under Development
Three Months - July 31, 2014
Net Contracts Deliveries Contract
Three Months Ended Three Months Ended Backlog
Jul 31, Jul 31, Jul 31,
2014 2013 % Change 2014 2013 % Change 2014 2013 % Change
Northeast
(includes unconsolidated joint ventures) Homes 130 148 (12.2)% 137 186 (26.3)% 254 326 (22.1)%
(NJ, PA) Dollars $68,150 $74,012 (7.9)% $63,293 $91,663 (31.0)% $127,263 $160,826 (20.9)%
Avg. Price $524,239 $500,083 4.8% $461,993 $492,813 (6.3)% $501,036 $493,331 1.6%
Mid-Atlantic
(includes unconsolidated joint ventures) Homes 229 194 18.0% 218 256 (14.8)% 500 419 19.3%
(DE, MD, VA, WV) Dollars $102,776 $96,977 6.0% $100,227 $119,698 (16.3)% $246,652 $209,207 17.9%
Avg. Price $448,802 $499,881 (10.2)% $459,757 $467,569 (1.7)% $493,304 $499,300 (1.2)%
Midwest
(includes unconsolidated joint ventures) Homes 234 258 (9.3)% 205 184 11.4% 735 691 6.4%
(IL, MN, OH) Dollars $76,443 $64,484 18.5% $59,682 $46,329 28.8% $199,689 $168,220 18.7%
Avg. Price $326,680 $249,936 30.7% $291,131 $251,785 15.6% $271,686 $243,444 11.6%
Southeast
(includes unconsolidated joint ventures) Homes 142 217 (34.6)% 209 153 36.6% 327 436 (25.0)%
(FL, GA, NC, SC) Dollars $43,822 $68,528 (36.1)% $64,975 $43,310 50.0% $110,370 $132,383 (16.6)%
Avg. Price $308,607 $315,799 (2.3)% $310,884 $283,075 9.8% $337,521 $303,631 11.2%
Southwest
(includes unconsolidated joint ventures) Homes 593 663 (10.6)% 650 606 7.3% 970 882 10.0%
(AZ, TX) Dollars $204,460 $195,403 4.6% $200,788 $181,593 10.6% $355,807 $287,719 23.7%
Avg. Price $344,789 $294,726 17.0% $308,905 $299,658 3.1% $366,811 $326,212 12.4%
West
(includes unconsolidated joint ventures) Homes 96 88 9.1% 130 117 11.1% 121 139 (12.9)%
(CA) Dollars $47,295 $47,470 (0.4)% $76,425 $56,474 35.3% $73,514 $74,004 (0.7)%
Avg. Price $492,652 $539,432 (8.7)% $587,883 $482,685 21.8% $607,555 $532,405 14.1%
Grand Total
Homes 1,424 1,568 (9.2)% 1,549 1,502 3.1% 2,907 2,893 0.5%
Dollars $542,946 $546,874 (0.7)% $565,390 $539,067 4.9% $1,113,295 $1,032,359 7.8%
Avg. Price $381,283 $348,772 9.3% $365,003 $358,899 1.7% $382,970 $356,847 7.3%
Consolidated Total
Homes 1,357 1,448 (6.3)% 1,464 1,341 9.2% 2,690 2,569 4.7%
Dollars $517,345 $494,594 4.6% $538,007 $462,376 16.4% $1,025,593 $897,186 14.3%
Avg. Price $381,242 $341,571 11.6% $367,491 $344,800 6.6% $381,261 $349,236 9.2%
Unconsolidated Joint Ventures
Homes 67 120 (44.2)% 85 161 (47.2)% 217 324 (33.0)%
Dollars $25,601 $52,280 (51.0)% $27,383 $76,691 (64.3)% $87,702 $135,173 (35.1)%
Avg. Price $382,105 $435,667 (12.3)% $322,153 $476,339 (32.4)% $404,157 $417,201 (3.1)%
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 - July 31, 2014
Net Contracts Deliveries Contract
Nine Months Ended Nine Months Ended Backlog
Jul 31, Jul 31, Jul 31,
2014 2013 % Change 2014 2013 % Change 2014 2013 % Change
Northeast
(includes unconsolidated joint ventures) Homes 425 497 (14.5)% 404 465 (13.1)% 254 326 (22.1)%
(NJ, PA) Dollars $211,316 $254,210 (16.9)% $195,301 $234,338 (16.7)% $127,263 $160,826 (20.9)%
Avg. Price $497,214 $511,490 (2.8)% $483,418 $503,953 (4.1)% $501,036 $493,331 1.6%
Mid-Atlantic
(includes unconsolidated joint ventures) Homes 723 699 3.4% 564 646 (12.7)% 500 419 19.3%
(DE, MD, VA, WV) Dollars $332,860 $335,076 (0.7)% $261,597 $289,068 (9.5)% $246,652 $209,207 17.9%
Avg. Price $460,388 $479,365 (4.0)% $463,824 $447,474 3.7% $493,304 $499,300 (1.2)%
Midwest
(includes unconsolidated joint ventures) Homes 656 730 (10.1)% 575 538 6.9% 735 691 6.4%
(IL, MN, OH) Dollars $196,947 $186,336 5.7% $161,192 $134,034 20.3% $199,689 $168,220 18.7%
Avg. Price $300,225 $255,254 17.6% $280,334 $249,134 12.5% $271,686 $243,444 11.6%
Southeast
(includes unconsolidated joint ventures) Homes 490 590 (16.9)% 556 437 27.2% 327 436 (25.0)%
(FL, GA, NC, SC) Dollars $156,586 $175,073 (10.6)% $171,950 $122,030 40.9% $110,370 $132,383 (16.6)%
Avg. Price $319,563 $296,733 7.7% $309,262 $279,245 10.8% $337,521 $303,631 11.2%
Southwest
(includes unconsolidated joint ventures) Homes 1,935 2,001 (3.3)% 1,642 1,625 1.0% 970 882 10.0%
(AZ, TX) Dollars $632,528 $590,189 7.2% $493,087 $463,309 6.4% $355,807 $287,719 23.7%
Avg. Price $326,888 $294,947 10.8% $300,297 $285,113 5.3% $366,811 $326,212 12.4%
West
(includes unconsolidated joint ventures) Homes 304 345 (11.9)% 277 403 (31.3)% 121 139 (12.9)%
(CA) Dollars $171,544 $165,289 3.8% $153,733 $173,258 (11.3)% $73,514 $74,004 (0.7)%
Avg. Price $564,288 $479,099 17.8% $554,993 $429,921 29.1% $607,555 $532,405 14.1%
Grand Total
Homes 4,533 4,862 (6.8)% 4,018 4,114 (2.3)% 2,907 2,893 0.5%
Dollars $1,701,781 $1,706,173 (0.3)% $1,436,860 $1,416,037 1.5% $1,113,295 $1,032,359 7.8%
Avg. Price $375,420 $350,920 7.0% $357,606 $344,200 3.9% $382,970 $356,847 7.3%
Consolidated Total
Homes 4,258 4,338 (1.8)% 3,735 3,658 2.1% 2,690 2,569 4.7%
Dollars $1,594,644 $1,471,102 8.4% $1,331,490 $1,206,233 10.4% $1,025,593 $897,186 14.3%
Avg. Price $374,505 $339,120 10.4% $356,490 $329,752 8.1% $381,261 $349,236 9.2%
Unconsolidated Joint Ventures
Homes 275 524 (47.5)% 283 456 (37.9)% 217 324 (33.0)%
Dollars $107,137 $235,071 (54.4)% $105,370 $209,804 (49.8)% $87,702 $135,173 (35.1)%
Avg. Price $389,588 $448,607 (13.2)% $372,332 $460,095 (19.1)% $404,157 $417,201 (3.1)%
DELIVERIES INCLUDE EXTRAS
Notes:
(1) Net contracts are defined as new contracts signed during the period for the purchase of homes, less cancellations of prior contracts.

CONTACT: J. Larry Sorsby Executive Vice President & CFO 732-747-7800 Jeffrey T. O'Keefe Vice President, Investor Relations 732-747-7800

Source:Hovnanian Enterprises, Inc.