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Hovnanian Enterprises Reports Fiscal 2015 Third Quarter Results

RED BANK, N.J., Sept. 9, 2015 (GLOBE NEWSWIRE) -- Hovnanian Enterprises, Inc. (NYSE:HOV), a leading national homebuilder, reported results for its fiscal third quarter and nine months ended July 31, 2015.

RESULTS FOR THE THREE AND NINE MONTH PERIODS ENDED JULY 31, 2015:

  • Total revenues were $540.6 million in the third quarter of fiscal 2015, a decrease of 1.9% compared with $551.0 million in the third quarter of fiscal 2014. For the nine months ended July 31, 2015, total revenues increased 7.4% to $1.46 billion compared with $1.36 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 17.8% for the third quarter ended July 31, 2015, compared with 21.3% in last year's third quarter, and was 16.1% for the second quarter of fiscal 2015. During the first nine months of fiscal 2015, homebuilding gross margin percentage, before interest expense and land charges included in cost of sales, was 17.4% compared with 20.2% in the same period of the previous year.
  • Net loss was $7.7 million, or $0.05 per common share, for the third quarter of fiscal 2015, compared with net income $17.1 million, or $0.11 per common share, in the third quarter of the previous year. For the nine months ended July 31, 2015, the net loss was $41.6 million, or $0.28 per common share, compared with a net loss of $15.3 million, or $0.10 per common share, in the first nine months of fiscal 2014.
  • The pre-tax loss, excluding land-related charges and loss on extinguishment of debt, in the third quarter of fiscal 2015 was $8.9 million compared with net income of $16.1 million in the prior year's third quarter. For the first nine months of fiscal 2015, the pre-tax loss, excluding land-related charges and loss on extinguishment of debt, was $51.5 million compared with a loss of $12.7 million during the first nine months of fiscal 2014.
  • The dollar value of consolidated net contracts increased 19.7% to $619.4 million for the three months ended July 31, 2015 compared with $517.3 million during the same quarter a year ago. The dollar value of net contracts, including unconsolidated joint ventures, during the third quarter of fiscal 2015 increased 27.9% to $694.6 million compared with $542.9 million in last year's third quarter.
  • In the third quarter of fiscal 2015, the number of consolidated net contracts increased 13.0% to 1,533 homes compared with 1,357 homes in the prior year's third quarter. The number of net contracts, including unconsolidated joint ventures, increased 16.4% to 1,658 homes for the third quarter of fiscal 2015 from 1,424 homes during the third quarter of fiscal 2014.
  • The dollar value of consolidated net contracts increased 14.3% to $1.82 billion for the first nine months of fiscal 2015 compared with $1.59 billion in the first nine months of the previous year. The dollar value of net contracts, including unconsolidated joint ventures, for the nine months ended July 31, 2015 increased 15.6% to $1.97 billion compared with $1.70 billion in the first nine months of fiscal 2014.
  • For the nine months ended July 31, 2015, the number of consolidated net contracts increased 9.2% to 4,648 homes compared with 4,258 homes in the first nine months of the prior year. The number of net contracts, including unconsolidated joint ventures, increased 8.5% to 4,918 homes for the nine months ended July 31, 2015 from 4,533 homes in the first nine months of last year.
  • Consolidated net contracts per active selling community increased 7.2% to 7.4 net contracts per active selling community for the quarter ended July 31, 2015 compared with 6.9 net contracts per active selling community in the third quarter of fiscal 2014. Net contracts, including unconsolidated joint ventures, per active selling community increased 11.6% to 7.7 net contracts per active selling community for the quarter ended July 31, 2015 compared with 6.9 net contracts, including unconsolidated joint ventures, per active selling community in the third quarter of fiscal 2014.
  • As of July 31, 2015, the dollar value of consolidated contract backlog increased 23.3% to $1.26 billion compared with $1.03 billion as of July 31, 2014. The dollar value of contract backlog, as of July 31, 2015, including unconsolidated joint ventures, was $1.37 billion, an increase of 23.5% compared with $1.11 billion as of July 31, 2014.
  • As of July 31, 2015, the number of homes in consolidated contract backlog increased 15.1% to 3,097 homes compared with 2,690 homes as of the end of the third quarter of fiscal 2014. The number of homes in contract backlog, as of July 31, 2015, including unconsolidated joint ventures, increased 12.7% to 3,275 homes compared with 2,907 homes as of July 31, 2014.
  • Consolidated deliveries were 1,408 homes in the third quarter of fiscal 2015, a 3.8% decrease compared with 1,464 homes in the third quarter of fiscal 2014. For the three months ended July 31, 2015, deliveries, including unconsolidated joint ventures, decreased 4.8% to 1,475 homes compared with 1,549 homes in the third quarter of the prior year.
  • For the nine months ended July 31, 2015, consolidated deliveries were 3,780 homes, a 1.2% increase compared with 3,735 homes in the first nine months of last year. During the first nine months of fiscal 2015, deliveries, including unconsolidated joint ventures, decreased 0.8% to 3,984 homes compared with 4,018 homes in the same period of the previous year.
  • As of July 31, 2015, consolidated active selling communities increased 5.1% to 206 communities compared with 196 communities at July 31, 2014.
  • Total interest expense as a percentage of total revenues was 7.2% during the third quarter of fiscal 2015 compared with 6.5% in the same period of the previous year. For the nine months ended July 31, 2015, total interest expense as a percentage of total revenues was unchanged at 7.6% compared with the same period a year ago.
  • Total SG&A was $67.9 million, or 12.6% of total revenues, during the third quarter of fiscal 2015 compared with $67.0 million, or 12.2% of total revenues, in last year's third quarter. Total SG&A was $201.5 million, or 13.8% of total revenues, for the first nine months of fiscal 2015 compared with $189.8 million, or 13.9% of total revenues, in the first nine months of the prior year.
  • The contract cancellation rate, including unconsolidated joint ventures, for the third quarter of fiscal 2015 was 20%, compared with 22% in the third quarter of fiscal 2014.
  • The valuation allowance was $642.1 million as of July 31, 2015. 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.
  • During August 2015, the dollar value of consolidated net contracts increased 15.3% to $217.3 million compared with $188.4 million for August of 2014 and the number of consolidated net contracts increased 15.4% to 531 homes from 460 homes in August 2014.

LIQUIDITY AND INVENTORY AS OF JULY 31, 2015:

  • During the third quarter of fiscal 2015, land and land development spending was $130.0 million. For the nine months ended July 31, 2015, land and land development spending was $464.4 million.
  • Total liquidity at the end of the third quarter of fiscal 2015 was $258.4 million compared with $231.7 million at July 31, 2014. Total liquidity at July 31, 2015 included $207.3 million of homebuilding cash and cash equivalents, $2.6 million of restricted cash required to collateralize letters of credit and $48.5 million of availability under the unsecured revolving credit facility.
  • As of July 31, 2015, the land position, including unconsolidated joint ventures, was 37,442 lots, consisting of 16,370 lots under option and 21,072 owned lots, compared with a total of 37,706 lots as of July 31, 2014.
  • During the third quarter of fiscal 2015, approximately 2,800 lots, including unconsolidated joint ventures, were put under option or acquired in 53 communities.

FINANCIAL GUIDANCE:

  • Assuming no changes in current market conditions, total revenues for the fourth quarter of fiscal 2015 are expected to be approximately $745 million and pretax profit excluding land related charges, gains or losses on extinguishment of debt and other non-recurring items such as legal settlements are expected to be approximately $22 million.
  • Assuming no changes in current market conditions, total revenues for all of fiscal 2016 are expected to be between $2.7 billion and $3.1 billion and pretax profit excluding land related charges, gains or losses on extinguishment of debt and other non-recurring items such as legal settlements are expected to be between $40 million and $100 million for all of fiscal 2016.

COMMENTS FROM MANAGEMENT:

"While we are disappointed with the loss for the third quarter, it was within the guidance we gave on our second quarter conference call," stated Ara K. Hovnanian, Chairman of the Board, President and Chief Executive Officer. "During the third quarter the dollar value of our contract backlog increased 23% year-over-year, while the dollar value of our net contracts increased 20% compared to last year's third quarter, and we also had a 170 basis point sequential improvement in our quarterly gross margin. Furthermore, assuming no changes in market conditions, we are on track for solid profitability during the fourth quarter of fiscal 2015 and are well positioned for a breakout year from the perspective of deliveries and revenues which should lead to profitability in fiscal 2016, " concluded Mr. Hovnanian.

WEBCAST INFORMATION:

Hovnanian Enterprises will webcast its fiscal 2015 third quarter financial results conference call at 11:00 a.m. E.T. on Wednesday, September 9, 2015. The webcast can be accessed live through the "Investor Relations" section of Hovnanian Enterprises' website at http://www.khov.com. For those who are not available to listen to the live webcast, an archive of the broadcast will be available under the "Past Events" section of the Investor Relations page on the Hovnanian website at http://www.khov.com. The archive will be available for 12 months.

ABOUT HOVNANIAN ENTERPRISES®, INC.:

Hovnanian Enterprises, Inc., founded in 1959 by Kevork S. Hovnanian, is headquartered in Red Bank, New Jersey. The Company is one of the nation's largest homebuilders with operations in Arizona, California, Delaware, Florida, Georgia, Illinois, Maryland, 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 2014 annual report, can be accessed through the "Investor Relations" section of the Hovnanian Enterprises' website at http://www.khov.com. To be added to Hovnanian's investor e-mail list, please send an e-mail to IR@khov.com or sign up at http://www.khov.com.

NON-GAAP FINANCIAL MEASURES:

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

(Loss) Income 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 (Loss) Income Before Income Taxes. The reconciliation of (Loss) Income Before Income Taxes Excluding Land-Related Charges and Loss on Extinguishment of Debt to (Loss) Income 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" within the meaning of the "Safe Harbor" provision 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 the current or future periods, including total revenues and adjusted pre-tax profit. Although we believe that our plans, intentions and expectations reflected in, or suggested by, such forward looking statements are reasonable, we can give no assurance that such plans, intentions, or expectations will be achieved. By their nature, forward-looking statements: (i) speak only as of the date they are made, (ii) are not guarantees of future performance or results and (iii) are subject to risks, uncertainties and assumptions that are difficult to predict or quantify. Therefore, actual results could differ materially and adversely from those forward looking statements as a result of a variety of factors. Such risks, uncertainties and other factors include, but are not limited to, (1) changes in general and local economic, industry and business conditions and impacts of the sustained homebuilding downturn; (2) adverse weather and other environmental conditions and natural disasters; (3) levels of indebtedness and restrictions on the Company's operations and activities imposed by the agreements governing the Company's outstanding indebtedness; (4) the Company's sources of liquidity; (5) changes in credit ratings; (6) changes in market conditions and seasonality of the Company's business; (7) the availability and cost of suitable land and improved lots; (8) shortages in, and price fluctuations of, raw materials and labor; (9) regional and local economic factors, including dependency on certain sectors of the economy, and employment levels affecting home prices and sales activity in the markets where the Company builds homes; (10) fluctuations in interest rates and the availability of mortgage financing; (11) changes in tax laws affecting the after-tax costs of owning a home; (12) operations through joint ventures with third parties; (13) government regulation, including regulations concerning development of land, the home building, sales and customer financing processes, tax laws and the environment; (14) product liability litigation, warranty claims and claims made by mortgage investors; (15) levels of competition; (16) availability and terms of financing to the Company; (17) successful identification and integration of acquisitions; (18) significant influence of the Company's controlling stockholders; (19) availability of net operating loss carryforwards; (20) utility shortages and outages or rate fluctuations; (21) geopolitical risks, terrorist acts and other acts of war; and (22) 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, 2014 and subsequent filings with the Securities and Exchange Commission. Except as otherwise required by applicable securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.

(Financial Tables Follow)

Hovnanian Enterprises, Inc.
July 31, 2015
Statements of Consolidated Operations
(Dollars in Thousands, Except Per Share Data)
Three Months Ended Nine Months Ended
July 31, July 31,
2015 2014 2015 2014
(Unaudited) (Unaudited)
Total Revenues $540,613 $551,009 $1,455,276 $1,364,986
Costs and Expenses (a) 550,166 535,848 1,516,908 1,383,496
Loss on Extinguishment of Debt -- -- -- (1,155)
(Loss) Income from Unconsolidated Joint Ventures (448) 211 2,470 3,849
(Loss) Income Before Income Taxes (10,001) 15,372 (59,162) (15,816)
Income Tax Benefit (2,317) (1,733) (17,543) (496)
Net (Loss) Income $(7,684) $17,105 $(41,619) $(15,320)
Per Share Data:
Basic:
(Loss) Income Per Common Share $(0.05) $0.11 $(0.28) $(0.10)
Weighted Average Number of
Common Shares Outstanding (b) 147,010 146,365 146,846 146,223
Assuming Dilution:
(Loss) Income Per Common Share $(0.05) $0.11 $(0.28) $(0.10)
Weighted Average Number of
Common Shares Outstanding (b) 147,010 162,278 146,846 146,223
(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, 2015
Reconciliation of (Loss) Income Before Income Taxes Excluding Land-Related Charges
and Loss on Extinguishment of Debt to (Loss) Income Before Income Taxes
(Dollars in Thousands)
Three Months Ended Nine Months Ended
July 31, July 31,
2015 2014 2015 2014
(Unaudited) (Unaudited)
(Loss) Income Before Income Taxes $(10,001) $15,372 $(59,162) $(15,816)
Inventory Impairment Loss and Land Option Write-Offs 1,077 741 7,618 1,927
Loss on Extinguishment of Debt -- -- -- 1,155
(Loss) Income Before Income Taxes Excluding Land-Related
Charges and Loss on Extinguishment of Debt (a) $(8,924) $16,113 $(51,544) $(12,734)
(a) (Loss) Income 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 (Loss) Income Before Income Taxes.
Hovnanian Enterprises, Inc.
July 31, 2015
Gross Margin
(Dollars in Thousands)
Homebuilding Gross Margin Homebuilding Gross Margin
Three Months Ended Nine Months Ended
July 31, July 31,
2015 2014 2015 2014
(Unaudited) (Unaudited)
Sale of Homes $526,156 $538,007 $1,414,799 $1,331,490
Cost of Sales, Excluding Interest and Land Charges (a) 432,625 423,488 1,168,874 1,061,880
Homebuilding Gross Margin, Excluding Interest and Land Charges 93,531 114,519 245,925 269,610
Homebuilding Cost of Sales Interest 16,323 15,757 39,615 37,247
Homebuilding Gross Margin, Including Interest and Excluding Land Charges $77,208 $98,762 $206,310 $232,363
Gross Margin Percentage, Excluding Interest and Land Charges 17.8% 21.3% 17.4% 20.2%
Gross Margin Percentage, Including Interest and Excluding Land Charges 14.7% 18.4% 14.6% 17.5%
Land Sales Gross Margin Land Sales Gross Margin
Three Months Ended Nine Months Ended
July 31, July 31,
2015 2014 2015 2014
(Unaudited) (Unaudited)
Land and Lot Sales -- $968 $850 $2,897
Cost of Sales, Excluding Interest and Land Charges (a) -- 657 702 1,585
Land and Lot Sales Gross Margin, Excluding Interest and Land Charges -- 311 148 1,312
Land and Lot Sales Interest -- 70 39 477
Land and Lot Sales Gross Margin, Including Interest and Excluding Land Charges -- $241 $109 $835
(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, 2015
Reconciliation of Adjusted EBITDA to Net (Loss) Income
(Dollars in Thousands)
Three Months Ended Nine Months Ended
July 31, July 31,
2015 2014 2015 2014
(Unaudited) (Unaudited)
Net (Loss) Income $(7,684) $17,105 $(41,619) $(15,320)
Income Tax Benefit (2,317) (1,733) (17,543) (496)
Interest Expense 38,816 35,707 110,248 104,409
EBIT (a) 28,815 51,079 51,086 88,593
Depreciation 835 865 2,553 2,571
Amortization of Debt Costs 1,491 1,082 4,451 3,240
EBITDA (b) 31,141 53,026 58,090 94,404
Inventory Impairment Loss and Land Option Write-offs 1,077 741 7,618 1,927
Loss on Extinguishment of Debt -- -- -- 1,155
Adjusted EBITDA (c) $32,218 $53,767 $65,708 $97,486
Interest Incurred $41,856 $36,472 $124,031 $108,073
Adjusted EBITDA to Interest Incurred 0.77 1.47 0.53 0.90
(a) EBIT is a non-GAAP financial measure. The most directly comparable GAAP financial measure is net (loss) income. 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) income. 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) income. Adjusted EBITDA represents earnings before interest expense, income taxes, depreciation, amortization, inventory impairment loss and land option write-offs and loss on extinguishment of debt.
Hovnanian Enterprises, Inc.
July 31, 2015
Interest Incurred, Expensed and Capitalized
(Dollars in Thousands)
Three Months Ended Nine Months Ended
July 31, July 31,
2015 2014 2015 2014
(Unaudited) (Unaudited)
Interest Capitalized at Beginning of Period $119,901 $107,992 $109,158 $105,093
Plus Interest Incurred 41,856 36,472 124,031 108,073
Less Interest Expensed 38,816 35,707 110,248 104,409
Interest Capitalized at End of Period (a) $122,941 $108,757 $122,941 $108,757
(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,
2015
October 31,
2014
(Unaudited) (1)
ASSETS
Homebuilding:
Cash and cash equivalents $207,302 $255,117
Restricted cash and cash equivalents 9,772 13,086
Inventories:
Sold and unsold homes and lots under development 1,294,033 961,994
Land and land options held for future development or sale 209,101 273,463
Consolidated inventory not owned:
Specific performance options -- 3,479
Other options 109,355 105,374
Total consolidated inventory not owned 109,355 108,853
Total inventories 1,612,489 1,344,310
Investments in and advances to unconsolidated joint ventures 66,535 63,883
Receivables, deposits and notes, net 87,059 92,546
Property, plant and equipment, net 45,839 46,744
Prepaid expenses and other assets 80,468 69,358
Total homebuilding 2,109,464 1,885,044
Financial services:
Cash and cash equivalents 6,635 6,781
Restricted cash and cash equivalents 16,647 16,236
Mortgage loans held for sale at fair value 110,670 95,338
Other assets 2,138 1,988
Total financial services 136,090 120,343
Income taxes receivable – including net deferred tax benefits 303,790 284,543
Total assets $2,549,344 $2,289,930
(1) Derived from the audited balance sheet as of October 31, 2014.

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands Except Share and Per Share Amounts)

July
31,
2015
October 31,
2014
(Unaudited)
(1)
LIABILITIES AND EQUITY

Homebuilding:
Nonrecourse mortgages $133,380 $103,908
Accounts payable and other liabilities 354,128 370,876
Customers' deposits 47,299 34,969
Nonrecourse mortgages secured by operating properties 15,796 16,619
Liabilities from inventory not owned 98,406 92,381
Total homebuilding 649,009 618,753
Financial services:
Accounts payable and other liabilities 24,996 22,278
Mortgage warehouse lines of credit 88,554 76,919
Total financial services 113,550 99,197
Notes payable:
Senior secured notes, net of discount 980,988 979,935
Senior notes, net of discount 841,056 590,472
Senior amortizing notes 12,811 17,049
Senior exchangeable notes 72,838 70,101
Accrued interest 30,599 32,222
Total notes payable 1,938,292 1,689,779
Total liabilities 2,700,851 2,407,729
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, 2015 and at October 31, 2014 135,299 135,299
Common stock, Class A, $0.01 par value – authorized 400,000,000 shares; issued 143,292,881 shares at July 31, 2015 and 142,836,563 shares at October 31, 2014 (including 11,760,763 shares at July 31, 2015 and October 31, 2014 held in Treasury) 1,433 1,428
Common stock, Class B, $0.01 par value (convertible to Class A at time of sale) – authorized 60,000,000 shares; issued 15,676,847 shares at July 31, 2015 and 15,497,543 shares at October 31, 2014 (including 691,748 shares at July 31, 2015 and October 31, 2014 held in Treasury)
157
155
Paid in capital – common stock 705,847 697,943
Accumulated deficit (878,883) (837,264)
Treasury stock – at cost (115,360) (115,360)
Total stockholders' equity deficit (151,507) (117,799)
Total liabilities and equity $2,549,344 $2,289,930
(1) Derived from the audited balance sheet as of October 31, 2014.
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,
2015 2014 2015 2014
Revenues:

Homebuilding:
Sale of homes $526,156 $538,007 $1,414,799 $1,331,490
Land sales and other revenues 97 1,896 2,538 4,884
Total homebuilding 526,253 539,903 1,417,337 1,336,374
Financial services 14,360 11,106 37,939 28,612
Total revenues 540,613 551,009 1,455,276 1,364,986
Expenses:
Homebuilding:
Cost of sales, excluding interest 432,625 424,145 1,169,576 1,063,465
Cost of sales interest 16,323 15,827 39,654 37,724
Inventory impairment loss and land option write-offs 1,077 741 7,618 1,927
Total cost of sales 450,025 440,713 1,216,848 1,103,116
Selling, general and administrative 51,998 51,150 152,258 142,918
Total homebuilding expenses 502,023 491,863 1,369,106 1,246,034
Financial services 8,244 7,212 23,069 20,591
Corporate general and administrative 15,874 15,804 49,275 46,837
Other interest 22,493 19,880 70,594 66,685
Other operations 1,532 1,089 4,864 3,349
Total expenses 550,166 535,848 1,516,908 1,383,496
Loss on extinguishment of debt -- -- -- (1,155)
(Loss) income from unconsolidated joint ventures (448) 211 2,470 3,849
(Loss) income before income taxes (10,001) 15,372 (59,162) (15,816)
State and federal income tax (benefit) provision:
State 999 247 3,717 1,484
Federal (3,316) (1,980) (21,260) (1,980)
Total income taxes (2,317) (1,733) (17,543) (496)
Net (loss) income $(7,684) $17,105 $(41,619) $(15,320)
Per share data:
Basic:
(Loss) income per common share $(0.05) $0.11 $(0.28) $(0.10)
Weighted-average number of common shares outstanding 147,010 146,365 146,846 146,223
Assuming dilution:
(Loss) income per common share $(0.05) $0.11 $(0.28) $(0.10)
Weighted-average number of common shares outstanding 147,010 162,278 146,846 146,223
HOVNANIAN ENTERPRISES, INC.
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE)
(SEGMENT DATA EXCLUDES UNCONSOLIDATED JOINT VENTURES) Communities Under Development
(UNAUDITED) Three Months - July 31, 2015
Net Contracts Deliveries Contract
Three Months Ended Three Months Ended Backlog
Jul 31, Jul 31, Jul 31,
2015 2014 % Change 2015 2014 % Change 2015 2014 % Change
Northeast
(NJ, PA) Home 137 117 17.1% 78 128 (39.1)% 286 226 26.5%
Dollars $69,410 $64,356 7.9% $36,109 $60,165 (40.0)% $143,333 $118,038 21.4%
Avg. Price $506,642 $550,055 (7.9)% $462,932 $470,041 (1.5)% $501,164 $522,291 (4.0)%
Mid-Atlantic
(DE, MD, VA, WV) Home 242 208 16.3% 243 187 29.9% 473 425 11.3%
Dollars $115,164 $91,701 25.6% $113,886 $89,834 26.8% $252,139 $205,087 22.9%
Avg. Price $475,883 $440,870 7.9% $468,670 $480,393 (2.4)% $533,063 $482,558 10.5%
Midwest
(IL, MN, OH) Home 186 219 (15.1)% 253 190 33.2% 696 695 0.1%
Dollars $70,578 $72,287 (2.4)% $82,618 $55,392 49.2% $211,718 $188,882 12.1%
Avg. Price $379,450 $330,078 15.0% $326,554 $291,534 12.0% $304,193 $271,773 11.9%
Southeast
(FL, GA, NC, SC) Home 176 132 33.3% 176 179 (1.7)% 331 261 26.8%
Dollars $54,776 $39,855 37.4% $57,294 $55,403 3.4% $110,628 $86,873 27.3%
Avg. Price $311,228 $301,932 3.1% $325,534 $309,515 5.2% $334,225 $332,847 0.4%
Southwest
(AZ, TX) Home 656 593 10.6% 568 650 (12.6)% 1,148 970 18.4%
Dollars $248,907 $204,460 21.7% $203,075 $200,788 1.1% $469,054 $355,807 31.8%
Avg. Price $379,432 $344,789 10.0% $357,526 $308,905 15.7% $408,583 $366,811 11.4%
West
(CA) Home 136 88 54.5% 90 130 (30.8)% 163 113 44.2%
Dollars $60,573 $44,686 35.6% $33,174 $76,425 (56.6)% $77,480 $70,906 9.3%
Avg. Price $445,387 $507,798 (12.3)% $368,598 $587,883 (37.3)% $475,339 $627,485 (24.2)%
Consolidated Total
Home 1,533 1,357 13.0% 1,408 1,464 (3.8)% 3,097 2,690 15.1%
Dollars $619,408 $517,345 19.7% $526,156 $538,007 (2.2)% $1,264,352 $1,025,593 23.3%
Avg. Price $404,049 $381,242 6.0% $373,691 $367,491 1.7% $408,251 $381,261 7.1%
Unconsolidated Joint Ventures
Home 125 67 86.6% 67 85 (21.2)% 178 217 (18.0)%
Dollars $75,225 $25,601 193.8% $27,286 $27,383 (0.4)% $110,372 $87,702 25.8%
Avg. Price $601,800 $382,105 57.5% $407,250 $322,153 26.4% $620,066 $404,157 53.4%
Grand Total
Home 1,658 1,424 16.4% 1,475 1,549 (4.8)% 3,275 2,907 12.7%
Dollars $694,633 $542,946 27.9% $553,442 $565,390 (2.1)% $1,374,724 $1,113,295 23.5%
Avg. Price $418,958 $381,283 9.9% $375,215 $365,003 2.8% $419,763 $382,970 9.6%
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)
(SEGMENT DATA EXCLUDES UNCONSOLIDATED JOINT VENTURES) Communities Under Development
(UNAUDITED) Nine Months - July 31, 2015
Net Contracts Deliveries Contract
Nine Months Ended Nine Months Ended Backlog
Jul 31, Jul 31, Jul 31,
2015 2014 % Change 2015 2014 % Change 2015 2014 % Change
Northeast
(NJ, PA) Home 384 374 2.7% 244 368 (33.7)% 286 226 26.5%
Dollars $195,879 $191,880 2.1% $125,873 $178,848 (29.6)% $143,333 $118,038 21.4%
Avg. Price $510,100 $513,048 (0.6)% $515,872 $486,000 6.1% $501,164 $522,291 (4.0)%
Mid-Atlantic
(DE, MD, VA, WV) Home 700 611 14.6% 598 457 30.9% 473 425 11.3%
Dollars $334,115 $282,533 18.3% $270,899 $218,615 23.9% $252,139 $205,087 22.9%
Avg. Price $477,308 $462,411 3.2% $453,010 $478,370 (5.3)% $533,063 $482,558 10.5%
Midwest
(IL, MN, OH) Home 705 616 14.4% 674 526 28.1% 696 695 0.1%
Dollars $243,366 $185,920 30.9% $220,243 $147,754 49.1% $211,718 $188,882 12.1%
Avg. Price $345,200 $301,819 14.4% $326,769 $280,902 16.3% $304,193 $271,773 11.9%
Southeast
(FL, GA, NC, SC) Home 554 427 29.7% 455 474 (4.0)% 331 261 26.8%
Dollars $173,891 $133,540 30.2% $144,333 $145,323 (0.7)% $110,628 $86,873 27.3%
Avg. Price $313,882 $312,740 0.4% $317,215 $306,589 3.5% $334,225 $332,847 0.4%
Southwest
(AZ, TX) Home 1,955 1,935 1.0% 1,577 1,642 (4.0)% 1,148 970 18.4%
Dollars $733,393 $632,528 15.9% $559,659 $493,087 13.5% $469,054 $355,807 31.8%
Avg. Price $375,137 $326,888 14.8% $354,888 $300,297 18.2% $408,583 $366,811 11.4%
West
(CA) Home 350 295 18.6% 232 268 (13.4)% 163 113 44.2%
Dollars $142,661 $168,243 (15.2)% $93,792 $147,863 (36.6)% $77,480 $70,906 9.3%
Avg. Price $407,603 $570,314 (28.5)% $404,278 $551,729 (26.7)% $475,339 $627,485 (24.2)%
Consolidated Total
Home 4,648 4,258 9.2% 3,780 3,735 1.2% 3,097 2,690 15.1%
Dollars $1,823,305 $1,594,644 14.3% $1,414,799 $1,331,490 6.3% $1,264,352 $1,025,593 23.3%
Avg. Price $392,277 $374,505 4.7% $374,285 $356,490 5.0% $408,251 $381,261 7.1%
Unconsolidated Joint Ventures
Home 270 275 (1.8)% 204 283 (27.9)% 178 217 (18.0)%
Dollars $143,438 $107,137 33.9% $82,190 $105,370 (22.0)% $110,372 $87,702 25.8%
Avg. Price $531,252 $389,588 36.4% $402,891 $372,332 8.2% $620,066 $404,157 53.4%
Grand Total
Home 4,918 4,533 8.5% 3,984 4,018 (0.8)% 3,275 2,907 12.7%
Dollars $1,966,743 $1,701,781 15.6% $1,496,989 $1,436,860 4.2% $1,374,724 $1,113,295 23.5%
Avg. Price $399,907 $375,420 6.5% $375,750 $357,606 5.1% $419,763 $382,970 9.6%
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)
(SEGMENT DATA INCLUDES UNCONSOLIDATED JOINT VENTURES) Communities Under Development
(UNAUDITED) Three Months - July 31, 2015
Net Contracts Deliveries Contract
Three Months Ended Three Months Ended Backlog
Jul 31, Jul 31, Jul 31,
2015 2014 % Change 2015 2014 % Change 2015 2014 % Change
Northeast
(includes unconsolidated joint ventures) Home 163 130 25.4% 80 137 (41.6)% 326 254 28.3%
(NJ, PA) Dollars $86,118 $68,150 26.4% $36,567 $63,293 (42.2)% $164,404 $127,263 29.2%
Avg. Price $528,331 $524,239 0.8% $457,092 $461,993 (1.1)% $504,306 $501,036 0.7%
Mid-Atlantic
(includes unconsolidated joint ventures) Home 259 229 13.1% 260 218 19.3% 511 500 2.2%
(DE, MD, VA, WV) Dollars $123,947 $102,776 20.6% $123,749 $100,227 23.5% $273,140 $246,652 10.7%
Avg. Price $478,559 $448,802 6.6% $475,961 $459,757 3.5% $534,522 $493,304 8.4%
Midwest
(includes unconsolidated joint ventures) Home 189 234 (19.2)% 256 205 24.9% 696 735 (5.3)%
(IL, MN, OH) Dollars $71,492 $76,443 (6.5)% $83,533 $59,682 40.0% $211,718 $199,689 6.0%
Avg. Price $378,265 $326,680 15.8% $326,299 $291,131 12.1% $304,193 $271,686 12.0%
Southeast
(includes unconsolidated joint ventures) Home 186 142 31.0% 201 209 (3.8)% 338 327 3.4%
(FL, GA, NC, SC) Dollars $58,719 $43,822 34.0% $67,796 $64,975 4.3% $113,368 $110,370 2.7%
Avg. Price $315,696 $308,607 2.3% $337,291 $310,884 8.5% $335,408 $337,521 (0.6)%
Southwest
(includes unconsolidated joint ventures) Home 656 593 10.6% 568 650 (12.6)% 1,148 970 18.4%
(AZ, TX) Dollars $248,908 $204,460 21.7% $203,075 $200,788 1.1% $469,054 $355,807 31.8%
Avg. Price $379,432 $344,789 10.0% $357,526 $308,905 15.7% $408,583 $366,811 11.4%
West
(includes unconsolidated joint ventures) Home 205 96 113.5% 110 130 (15.4)% 256 121 111.6%
(CA) Dollars $105,449 $47,295 123.0% $38,722 $76,425 (49.3)% $143,040 $73,514 94.6%
Avg. Price $514,384 $492,652 4.4% $352,016 $587,883 (40.1)% $558,748 $607,555 (8.0)%
Grand Total
Home 1,658 1,424 16.4% 1,475 1,549 (4.8)% 3,275 2,907 12.7%
Dollars $694,633 $542,946 27.9% $553,442 $565,390 (2.1)% $1,374,724 $1,113,295 23.5%
Avg. Price $418,958 $381,283 9.9% $375,215 $365,003 2.8% $419,763 $382,970 9.6%
Consolidated Total
Home 1,533 1,357 13.0% 1,408 1,464 (3.8)% 3,097 2,690 15.1%
Dollars $619,408 $517,345 19.7% $526,156 $538,007 (2.2)% $1,264,352 $1,025,593 23.3%
Avg. Price $404,049 $381,242 6.0% $373,691 $367,491 1.7% $408,251 $381,261 7.1%
Unconsolidated Joint Ventures
Home 125 67 86.6% 67 85 (21.2)% 178 217 (18.0)%
Dollars $75,225 $25,601 193.8% $27,286 $27,383 (0.4)% $110,372 $87,702 25.8%
Avg. Price $601,800 $382,105 57.5% $407,250 $322,153 26.4% $620,066 $404,157 53.4%
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)
(SEGMENT DATA INCLUDES UNCONSOLIDATED JOINT VENTURES) Communities Under Development
(UNAUDITED) Nine Months - July 31, 2015
Net Contracts Deliveries Contract
Nine Months Ended Nine Months Ended Backlog
Jul 31, Jul 31, Jul 31,
2015 2014 % Change 2015 2014 % Change 2015 2014 % Change
Northeast
(includes unconsolidated joint ventures) Home 421 425 (0.9)% 261 404 (35.4)% 326 254 28.3%
(NJ, PA) Dollars $213,375 $211,316 1.0% $130,551 $195,301 (33.2)% $164,404 $127,263 29.2%
Avg. Price $506,829 $497,214 1.9% $500,197 $483,418 3.5% $504,306 $501,036 0.7%
Mid-Atlantic
(includes unconsolidated joint ventures) Home 762 723 5.4% 657 564 16.5% 511 500 2.2%
(DE, MD, VA, WV) Dollars $366,591 $332,860 10.1% $303,413 $261,597 16.0% $273,140 $246,652 10.7%
Avg. Price $481,092 $460,388 4.5% $461,814 $463,824 (0.4)% $534,522 $493,304 8.4%
Midwest
(includes unconsolidated joint ventures) Home 708 656 7.9% 694 575 20.7% 696 735 (5.3)%
(IL, MN, OH) Dollars $244,297 $196,947 24.0% $225,838 $161,192 40.1% $211,718 $199,689 6.0%
Avg. Price $345,052 $300,225 14.9% $325,416 $280,334 16.1% $304,193 $271,686 12.0%
Southeast
(includes unconsolidated joint ventures) Home 597 490 21.8% 520 556 (6.5)% 338 327 3.4%
(FL, GA, NC, SC) Dollars $191,544 $156,586 22.3% $171,168 $171,950 (0.5)% $113,368 $110,370 2.7%
Avg. Price $320,844 $319,563 0.4% $329,169 $309,262 6.4% $335,408 $337,521 (0.6)%
Southwest
(includes unconsolidated joint ventures) Home 1,955 1,935 1.0% 1,577 1,642 (4.0)% 1,148 970 18.4%
(AZ, TX) Dollars $733,393 $632,528 15.9% $559,659 $493,087 13.5% $469,054 $355,807 31.8%
Avg. Price $375,137 $326,888 14.8% $354,888 $300,297 18.2% $408,583 $366,811 11.4%
West
(includes unconsolidated joint ventures) Home 475 304 56.3% 275 277 (0.7)% 256 121 111.6%
(CA) Dollars $217,543 $171,544 26.8% $106,360 $153,733 (30.8)% $143,040 $73,514 94.6%
Avg. Price $457,985 $564,288 (18.8)% $386,764 $554,993 (30.3)% $558,748 $607,555 (8.0)%
Grand Total
Home 4,918 4,533 8.5% 3,984 4,018 (0.8)% 3,275 2,907 12.7%
Dollars $1,966,743 $1,701,781 15.6% $1,496,989 $1,436,860 4.2% $1,374,724 $1,113,295 23.5%
Avg. Price $399,907 $375,420 6.5% $375,750 $357,606 5.1% $419,763 $382,970 9.6%
Consolidated Total
Home 4,648 4,258 9.2% 3,780 3,735 1.2% 3,097 2,690 15.1%
Dollars $1,823,305 $1,594,644 14.3% $1,414,799 $1,331,490 6.3% $1,264,352 $1,025,593 23.3%
Avg. Price $392,277 $374,505 4.7% $374,285 $356,490 5.0% $408,251 $381,261 7.1%
Unconsolidated Joint Ventures
Home 270 275 (1.8)% 204 283 (27.9)% 178 217 (18.0)%
Dollars $143,438 $107,137 33.9% $82,190 $105,370 (22.0)% $110,372 $87,702 25.8%
Avg. Price $531,252 $389,588 36.4% $402,891 $372,332 8.2% $620,066 $404,157 53.4%
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.

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.