RED BANK, N.J., Dec. 16 /PRNewswire-FirstCall/ -- Hovnanian Enterprises, Inc. , a leading national homebuilder, reported results for its fourth quarter and fiscal year ended October 31, 2008.
Cash and Inventory as of October 31, 2008:
-- Cash flow during the fourth quarter of fiscal 2008 was positive $175.1 million. At October 31, 2008, homebuilding cash was $838.2 million and the balance on the revolving credit facility was zero.
-- The total land position, as of October 31, 2008, decreased by 24,881 lots compared to October 31, 2007, reflecting decreases of 5,241 owned lots and 19,640 optioned lots.
-- As of October 31, 2008, lots controlled under option contracts totaled 16,464 and owned lots totaled 23,439. The total land position of 39,903 lots represents a 67% decline from the peak total land position at April 30, 2006.
-- Started unsold homes and models declined 43%, from 2,822 at October 31, 2007 to 1,596 at October 31, 2008.
Results for the Twelve and Three month Periods ended October 31, 2008:
-- Total revenues were $3.3 billion for fiscal 2008 compared to $4.8 billion in the previous year. Fourth quarter total revenues were $721.4 million, a decrease of 48% from last year's fourth quarter.
-- Deliveries, excluding unconsolidated joint ventures, were 10,577 homes for the full year, a 22% decline from 13,564 home deliveries last year. For the fourth quarter of 2008, deliveries were 2,294 homes, excluding unconsolidated joint ventures, a decrease of 42% from 3,969 home deliveries in the fiscal 2007 fourth quarter.
-- The number of net contracts for fiscal 2008, excluding unconsolidated joint ventures, decreased 41% to 6,546 homes compared with the prior year.
-- The number of net contracts for the fourth quarter of fiscal 2008, excluding unconsolidated joint ventures, declined 56% to 1,225 homes compared with last year's fourth quarter. The fiscal 2007 fourth quarter is a difficult comparison because it includes approximately 1,500 "Deal of the Century" promotion net contracts. Excluding the "Deal of the Century" promotion net contracts from the fourth quarter of fiscal 2007, the number of net contracts for the fourth quarter of 2008 declined 4%.
-- The cancellation rate, excluding unconsolidated joint ventures, for the fourth quarter of fiscal 2008 was 42%, compared with the rate of 40% in the previous year's fourth quarter.
-- Pre-tax land-related charges and intangible impairments during fiscal 2008 were $776.7 million, including land impairments of $596.0 million, write- offs of predevelopment costs and land deposits of $114.1 million, goodwill impairments of $32.7 million and intangible impairments of $2.7 million, as well as $31.2 million representing our equity portion of write-offs and impairment charges and the write down of our investments in certain unconsolidated joint ventures.
-- Pre-tax land-related charges and intangible impairments during the fourth quarter of fiscal 2008 were $319.9 million, including land impairments of $215.6 million, write-offs of predevelopment costs and land deposits of $47.5 million, goodwill impairments of $32.7 million and intangible impairments of $2.7 million, as well as $21.4 million representing our equity portion of write-offs and impairment charges and the write down of our investments in certain unconsolidated joint ventures.
-- Excluding land-related charges and intangible impairments, the pre-tax loss was $391.3 million and $136.6 million, respectively, for the twelve month and three month periods ended October 31, 2008. Including all land-related charges and intangible impairments, the pre-tax loss was $1.2 billion for all of fiscal 2008 and $456.5 million for the fiscal 2008 fourth quarter.
-- The FAS 109 current and deferred tax valuation allowance charge to earnings was $409.6 million for the full year and $169.5 million during the fourth quarter of 2008. The FAS 109 charge was for GAAP purposes only and is a non-cash valuation allowance against the current and deferred tax asset. For tax purposes, the tax deductions associated with the tax assets may be carried forward for 20 years.
-- For the twelve month period ended October 31, 2008, the net loss available to common stockholders was $1.1 billion, or $16.04 per common share, compared to a $637.8 million net loss, or $10.11 per common share, for the same period a year ago.
-- For the fourth quarter of fiscal 2008, the after tax loss available to common stockholders was $450.5 million, or $5.79 per common share, compared with a net loss of $469.3 million, or $7.42 per common share, in the fourth quarter of fiscal 2007.
Other Key Operating Data:
-- Contract backlog, as of October 31, 2008, excluding unconsolidated joint ventures, was 1,907 homes with a sales value of $646.2 million, a decrease of 68% compared to October 31, 2007.
-- At October 31, 2008, there were 284 active selling communities, excluding unconsolidated joint ventures, a decline of 147 active communities, or 34%, from October 31, 2007.
-- Homebuilding gross margin, before interest expense included in cost of sales, was 6.7% in fiscal 2008 and 4.7% for the fourth quarter of 2008, compared to 15.1% and 10.9%, respectively, in the same periods last year.
-- Pretax income from Financial Services declined 40% compared to the previous year to $16.7 million for fiscal 2008 and declined 49% compared to the same period last year to $3.6 million in the fourth quarter of fiscal 2008.
-- For all of fiscal 2008, deliveries through unconsolidated joint ventures were 704 homes, compared with 1,364 homes during fiscal 2007. During the fourth quarter of fiscal 2008, home deliveries through unconsolidated joint ventures were 185 homes, compared with 471 homes in the fourth quarter of fiscal 2007.
Comments From Management:
"Since mid-September, the housing market has deteriorated in lock-step with the widening financial crisis and declines in broader economic conditions," commented Ara K. Hovnanian, President and Chief Executive Officer of the Company. "Despite the headwinds we faced, we ended the year with $838 million in cash, slightly above the guidance we gave earlier in the fall before conditions worsened. During the first quarter of fiscal 2009, we reduced our debt by $42 million through an exchange offer in which $71 million of existing unsecured notes were exchanged for $29 million of new secured notes maturing in 2017. We will continue to explore additional debt exchanges, purchases and other opportunistic transactions to reduce our debt. As we look forward, our primary focus remains on cash flow, even at the expense of lower margins," stated Mr. Hovnanian.
"After three years of an unprecedented housing downturn and the deteriorating state of the U.S. economy, we along with other public and private homebuilders, the National Association of Homebuilders, the Business Roundtable and the National Association of Manufacturers, among others, are seeking a housing stimulus package from the Federal Government to assist buyers of both existing and new homes. The housing industry typically leads the U.S. economy into and out of recessions. It is important that a housing stimulus package is passed in order for a turnaround to occur in housing and the U.S. economy overall. More information about the coalition and its initiatives can be found at http://www.fixhousingfirst.com/," concluded Mr. Hovnanian.
Webcast Information:
Hovnanian Enterprises will webcast its fiscal 2008 fourth quarter financial results conference call at 11:00 a.m. E.T. on Wednesday, December 17, 2008. The webcast can be accessed live through the "Investor Relations" section of Hovnanian Enterprises' Web site 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 Web site 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(R) Homes(R), Matzel & Mumford, Brighton Homes, Parkwood Builders, Cambridge Homes, Town & Country Homes, Oster Homes, First Home Builders of Florida and CraftBuilt Homes. As the developer of K. Hovnanian's(R) 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 2007 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
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 ("Adjusted EBITDA") are not U.S. generally accepted accounting principle (GAAP) financial measures. The most directly comparable GAAP financial measure is net income (loss). The reconciliation of EBITDA and Adjusted EBITDA to net income (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 fourth quarter of 2008, cash flow was $175.1 million of net cash provided by operating activities excluding the change in mortgage notes receivable ($174.7 million from cash flow provided by operating activities less the change in mortgage notes receivable of $0.4 million) plus $0.8 million of net cash provided by investing activities. For the full 2008 fiscal year, cash flow was $368.5 million of net cash provided by operating activities excluding the change in mortgage notes receivable ($462.1 million from cash flow provided by operating activities less the change in mortgage notes receivable of $92.0 million) less $1.6 million of net cash used in investing activities.
(Loss) Income Before Income Taxes Excluding Land Related Charges and Intangible Impairments is a non-GAAP financial measure. The most directly comparable GAAP financial measure is Loss Before Income Taxes. The reconciliation of (Loss) Income Before Income Taxes Excluding Land Related Charges and Intangible Impairments 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 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, 2007 and Form 10Q per the quarter ended July 31, 2008.
Hovnanian Enterprises, Inc. October 31, 2008 Statements of Consolidated Operations (Dollars in Thousands, Except Per Share) Three Months Ended Twelve Months Ended October 31, October 31, ---------------------- ----------------------- 2008 2007 2008 2007 --------- ---------- ---------- ---------- (Unaudited) (Unaudited) Total Revenues $721,430 $1,391,869 $3,308,111 $4,798,921 Costs and Expenses(a) 1,150,649 1,779,351 4,439,559 5,417,664 Loss from Unconsolidated Joint Ventures (27,244) (25,289) (36,600) (28,223) --------- ---------- ---------- ---------- Loss Before Income Taxes (456,463) (412,771) (1,168,048) (646,966) Income Tax (Benefit) Provision (6,004) 53,822 (43,458) (19,847) --------- ---------- ---------- ---------- Net Loss (450,459) (466,593) (1,124,590) (627,119) --------- ---------- ---------- ---------- Less: Preferred Stock Dividends - 2,668 - 10,674 --------- ---------- ---------- ---------- Net Loss Available to Common Stockholders $(450,459) $(469,261) $(1,124,590) $(637,793) ========= ========== ========== ========== Per Share Data: Basic: Loss Per Common Share $(5.79) $(7.42) $(16.04) $(10.11) Weighted Average Number of Common Shares Outstanding 77,747 63,207 70,131 63,079 Assuming Dilution: Loss Per Common Share $(5.79) $(7.42) $(16.04) $(10.11) Weighted Average Number of Common Shares Outstanding (b) 77,747 63,207 70,131 63,079 (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. October 31, 2008 Reconciliation of (Loss) Income Before Income Taxes Excluding Land-Related Charges and Intangible Impairments to Loss Before Income Taxes (Dollars in Thousands) Three Months Ended Twelve Months Ended October 31, October 31, --------------------- ----------------------- 2008 2007 2008 2007 --------- ---------- ----------- ---------- (Unaudited) (Unaudited) Loss Before Income Taxes $(456,463) $(412,771) $(1,168,048) $(646,966) Inventory Impairment Loss and Land Option Write-Offs 263,159 273,353 710,120 457,773 Goodwill and Definite Life Intangible Impairments 35,363 77,556 35,363 135,206 Unconsolidated Joint Venture Investment, Intangible and Land-Related Charges 21,365 31,800 31,242 33,100 --------- ---------- ----------- ---------- (Loss) Income Before Income Taxes Excluding Land-Related Charges and Intangible Impairments $(136,576) $(30,062) $(391,323) $(20,887) ========= ========== =========== ========== Hovnanian Enterprises, Inc. October 31, 2008 Gross Margin (Dollars in Thousands) Homebuilding Gross Homebuilding Gross Margin Margin Three Months Ended Twelve Months Ended October 31, October 31, --------------------- ----------------------- 2008 2007 2008 2007 -------- ---------- ---------- ---------- (Unaudited) (Unaudited) Sale of Homes $677,661 $1,308,219 $3,177,853 $4,581,375 Cost of Sales, Excluding Interest(a) 645,690 1,165,509 2,965,886 3,890,474 -------- ---------- ---------- ---------- Homebuilding Gross Margin, Excluding Interest 31,971 142,710 211,967 690,901 Homebuilding Cost of Sales Interest 41,192 45,598 136,439 130,825 -------- ---------- ---------- ---------- Homebuilding Gross Margin, Including Interest $(9,221) $97,112 $75,528 $560,076 ======== ========== ========== ========== Gross Margin Percentage, Excluding Interest 4.7% 10.9% 6.7% 15.1% Gross Margin Percentage, Including Interest (1.4%) 7.4% 2.4% 12.2% Land Sales Gross Margin Land Sales Gross Margin Three Months Ended Twelve Months Ended October 31, October 31, --------------------- ----------------------- 2008 2007 2008 2007 -------- ---------- ---------- ---------- (Unaudited) (Unaudited) Land Sales $26,333 $42,107 $57,776 $107,955 Cost of Sales, Excluding Interest(a) 19,270 36,094 45,016 87,179 -------- ---------- ---------- ---------- Land Sales Gross Margin, Excluding Interest 7,063 6,013 12,760 20,776 Land Sales Interest 6,136 874 9,522 1,132 -------- ---------- ---------- ---------- Land Sales Gross Margin, Including Interest $927 $5,139 $3,238 $19,644 ======== ========== ========== ========== (a) Does not include cost associated with walking away from land options or inventory impairment losses which are recorded as Inventory impairment loss and land option write-offs in the Consolidated Statements of Operations. Hovnanian Enterprises, Inc. October 31, 2008 Reconciliation of Adjusted EBITDA to Net Loss (Dollars in Thousands) Three Months Ended Twelve Months Ended October 31, October 31, ---------------------- ------------------------ 2008 2007 2008 2007 --------- --------- ----------- --------- (Unaudited) (Unaudited) Net Loss $(450,459) $(466,593) $(1,124,590) $(627,119) Income Tax (Benefit) Provision (6,004) 53,822 (43,458) (19,847) Interest Expense 66,046 47,223 176,336 141,754 --------- --------- ----------- --------- EBIT(a) (390,417) (365,548) (991,712) (505,212) Depreciation 4,823 4,754 18,426 18,283 Amortization of Debt Costs 1,643 503 3,963 2,576 Amortization and Impairment of Intangibles and Goodwill 35,363 83,700 36,883 162,124 --------- --------- ----------- --------- EBITDA(b) (348,588) (276,591) (932,440) (322,229) Inventory Impairment Loss and Land Option Write-offs 263,159 273,353 710,120 457,773 --------- --------- ----------- --------- Adjusted EBITDA(c) $(85,429) $(3,238) $(222,320) $135,544 ========= ========= =========== ========= Interest Incurred $53,411 $46,262 $190,801 $194,547 Adjusted EBITDA to Interest Incurred (1.60) (0.07) (1.17) 0.70 (a) EBIT is a non-GAAP financial measure. The 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 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 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. Hovnanian Enterprises, Inc. October 31, 2008 Interest Incurred, Expensed and Capitalized (Dollars in Thousands) Three Months Ended Twelve Months Ended October 31, October 31, -------------------- -------------------- 2008 2007 2008 2007 -------- -------- -------- -------- (Unaudited) (Unaudited) Interest Capitalized at Beginning of Period $182,742 $156,603 $155,642 $102,849 Plus Interest Incurred 53,411 46,262 190,801 194,547 Less Interest Expensed 66,046 47,223 176,336 141,754 -------- -------- -------- -------- Interest Capitalized at End of Period (a) $170,107 $155,642 $170,107 $155,642 ======== ======== ======== ======== (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 the impairments to capitalized interest. HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In Thousands Except Share Amounts) October 31, 2008 October 31, 2007 ASSETS Homebuilding: Cash and cash equivalents $838,207 $12,275 ---------- ---------- Restricted cash 4,324 6,594 ---------- ---------- Inventories-at the lower of cost or fair value: Sold and unsold homes and lots under development 1,342,584 2,792,436 ---------- ---------- Land and land options held for future development or sale 644,067 446,135 ---------- ---------- Consolidated inventory not owned: Specific performance options 10,610 12,123 ---------- ---------- Variable interest entities 77,022 139,914 ---------- ---------- Other options 84,799 127,726 ---------- ---------- Total consolidated inventory not owned 172,431 279,763 ---------- ---------- Total inventories 2,159,082 3,518,334 ---------- ---------- Investments in and advances to unconsolidated joint ventures 71,097 176,365 ---------- ---------- Receivables, deposits, and notes 78,766 109,856 ---------- ---------- Property, plant, and equipment-net 92,817 106,792 ---------- ---------- Prepaid expenses and other assets 156,595 174,032 ---------- ---------- Goodwill - 32,658 ---------- ---------- Definite life intangibles - 4,224 ---------- ---------- Total homebuilding 3,400,888 4,141,130 ---------- ---------- Financial services: Cash and cash equivalents 9,849 3,958 ---------- ---------- Restricted cash 4,005 11,572 ---------- ---------- Mortgage loans held for sale or investment 90,729 182,627 ---------- ---------- Other assets 5,025 6,851 ---------- ---------- Total financial services 109,608 205,008 ---------- ---------- Income taxes receivable - including net deferred tax benefits 126,826 194,410 ---------- ---------- Total assets $3,637,322 $4,540,548 ========== ========== HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In Thousands Except Share Amounts) October 31, October 31, 2008 2007 LIABILITIES AND STOCKHOLDERS' EQUITY Homebuilding: Nonrecourse land mortgages $820 $9,430 Accounts payable and other liabilities 420,695 515,422 Customers' deposits 28,676 65,221 Nonrecourse mortgages secured by operating properties 22,302 22,985 Liabilities from inventory not owned 135,077 189,935 --------- --------- Total homebuilding 607,570 802,993 --------- --------- Financial services: Accounts payable and other liabilities 10,559 19,597 Mortgage warehouse line of credit 84,791 171,133 --------- --------- Total financial services 95,350 190,730 --------- --------- Notes payable: Revolving credit agreements - 206,750 Senior secured notes 594,734 - Senior notes 1,511,071 1,510,600 Senior subordinated notes 400,000 400,000 Accrued interest 72,477 43,944 --------- --------- Total notes payable 2,578,282 2,161,294 --------- --------- Total liabilities 3,281,202 3,155,017 --------- --------- Minority interest from inventory not owned 24,880 62,238 --------- --------- Minority interest from consolidated joint ventures 976 1,490 --------- --------- Stockholders' equity: Preferred stock, $.01 par value-authorized 100,000 shares; issued 5,600 shares with a liquidation preference of $140,000, at October 31, 2008 and October 31, 2007 135,299 135,299 Common stock, Class A, $.01 par value-authorized 200,000,000 shares; issued 73,803,879 shares at October 31, 2008; and 59,263,887 shares at October 31, 2007 (including 11,694,720 shares at October 31, 2008 and October 31, 2007 held in Treasury) 738 593 Common stock, Class B, $.01 par value (convertible to Class A at time of sale)-authorized 30,000,000 shares; issued 15,331,494 shares at October 31, 2008; and issued 15,338,840 shares at October 31, 2007 (including 691,748 shares at October 31, 2008 and October 31, 2007 held in Treasury) 153 153 Paid in capital-common stock 418,626 276,998 (Accumulated deficit)/retained earnings (109,295) 1,024,017 Treasury stock-at cost (115,257) (115,257) --------- --------- Total stockholders' equity 330,264 1,321,803 --------- --------- Total liabilities and stockholders' equity $3,637,322 $4,540,548 ========= ========= HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In Thousands Except Share Amounts) Three Months Ended Year Ended October 31, October 31, October 31, October 31, 2008 2007 2008 2007 Revenues: Homebuilding: Sale of homes $677,661 $1,308,219 $3,177,853 $4,581,375 Land sales and other revenues 32,176 64,150 78,039 141,355 ---------- ---------- ---------- ---------- Total homebuilding 709,837 1,372,369 3,255,892 4,722,730 Financial services 11,593 19,500 52,219 76,191 ---------- ---------- ---------- ---------- Total revenues 721,430 1,391,869 3,308,111 4,798,921 ---------- ---------- ---------- ---------- Expenses: Homebuilding: Cost of sales, excluding interest 664,960 1,201,603 3,010,902 3,977,653 Cost of sales interest 47,328 46,472 145,961 131,957 Inventory impairment loss and land option write-offs 263,159 273,353 710,120 457,773 ---------- ---------- ---------- ---------- Total cost of sales 975,447 1,521,428 3,866,983 4,567,383 Selling, general and administrative 89,249 137,558 377,068 539,362 ---------- ---------- ---------- ---------- Total homebuilding expenses 1,064,696 1,658,986 4,244,051 5,106,745 Financial services 8,013 12,444 35,567 48,321 Corporate general and administrative 20,680 21,559 82,846 85,878 Other interest 18,718 751 30,375 9,797 Other operations 3,179 1,911 9,837 4,799 Goodwill and intangible amortization and impairment 35,363 83,700 36,883 162,124 ---------- ---------- ---------- ---------- Total expenses 1,150,649 1,779,351 4,439,559 5,417,664 ---------- ---------- ---------- ---------- Loss from unconsolidated joint ventures (27,244) (25,289) (36,600) (28,223) ---------- ---------- ---------- ---------- Loss before income taxes (456,463) (412,771) (1,168,048) (646,966) ---------- ---------- ---------- ---------- State and federal income tax(benefit)/provision: State (1,940) 6,970 13,760 7,088 Federal (4,064) 46,852 (57,218) (26,935) ---------- ---------- ---------- ---------- Total taxes (6,004) 53,822 (43,458) (19,847) ---------- ---------- ---------- ---------- Net loss (450,459) (466,593) (1,124,590) (627,119) Less: preferred stock dividends - 2,668 - 10,674 ---------- ---------- ---------- ---------- Net loss available to common stockholders $(450,459) $(469,261) $(1,124,590) $(637,793) ========== ========== ========== ========== Per share data: Basic: Loss per common share $(5.79) $(7.42) $(16.04) $(10.11) Weighted average number of common shares outstanding 77,747 63,207 70,131 63,079 Assuming dilution: Loss per common share $(5.79) $(7.42) $(16.04) $(10.11) Weighted average number of common shares outstanding 77,747 63,207 70,131 63,079 HOVNANIAN ENTERPRISES, INC. (DOLLARS IN THOUSANDS EXCEPT AVG. PRICE) (UNAUDITED) Communities Under Development Three Months - 10/31/2008 Net Contracts(1) Deliveries Three Months Ended Three Months Ended October 31, October 31, -------------------------- -------------------------- 2008 2007 % Change 2008 2007 % Change ------------------------------------------------------ Northeast Home 168 554 (69.68%) 404 645 (37.36%) Dollars 66,381 218,424 (69.61%) 181,158 298,039 (39.22%) Avg. Price 395,137 394,268 0.22% 448,411 462,076 (2.96%) Mid-Atlantic Home 157 333 (52.85%) 342 595 (42.52%) Dollars 50,477 119,188 (57.65%) 133,121 258,178 (48.44%) Avg. Price 321,510 357,920 (10.17%) 389,243 433,913 (10.29%) Southeast Home 91 308 (70.45%) 228 594 (61.62%) Dollars 13,314 76,451 (82.59%) 51,979 155,560 (66.59%) Avg. Price 146,308 248,216 (41.06%) 227,978 261,886 (12.95%) Midwest Home 84 355 (76.34%) 267 358 (25.42%) Dollars 18,866 71,678 (73.68%) 57,084 81,138 (29.65%) Avg. Price 224,583 201,910 11.23% 213,798 226,642 (5.67%) West Home 257 480 (46.46%) 369 648 (43.06%) Dollars 66,032 165,023 (59.99%) 100,609 259,634 (61.25%) Avg. Price 256,930 343,798 (25.27%) 272,653 400,670 (31.95%) Southwest Home 468 751 (37.68%) 684 1,129 (39.42%) Dollars 103,626 168,440 (38.48%) 153,710 255,670 (39.88%) Avg. Price 221,425 224,288 (1.28%) 224,722 226,457 (0.77%) Consolidated Total Home 1,225 2,781 (55.95%) 2,294 3,969 (42.20%) Dollars 318,696 819,204 (61.10%) 677,661 1,308,219 (48.20%) Avg. Price 260,161 294,572 (11.68%) 295,406 329,609 (10.38%) Unconsolidated Joint Ventures Home 122 161 (24.22%) 185 471 (60.72%) Dollars 44,770 55,750 (19.70%) 66,217 205,416 (67.76%) Avg. Price 366,959 346,273 5.97% 357,932 436,128 (17.93%) Total Home 1,347 2,942 (54.21%) 2,479 4,440 (44.17%) Dollars 363,466 874,954 (58.46%) 743,878 1,513,635 (50.85%) Avg. Price 269,834 297,401 (9.27%) 300,072 340,909 (11.98%) Contract Backlog October 31, ------------------------------------- 2008 2007 % Change ------------------------------------- Northeast Home 497 975 (49.03%) Dollars 215,604 503,445 (57.17%) Avg. Price 433,811 516,354 (15.99%) Mid-Atlantic Home 385 753 (48.87%) Dollars 165,871 358,778 (53.77%) Avg. Price 430,834 476,465 (9.58%) Southeast Home 163 2,151 (92.42%) Dollars 45,657 614,575 (92.57%) Avg. Price 280,104 285,716 (1.96%) Midwest Home 291 759 (61.66%) Dollars 61,108 153,171 (60.10%) Avg. Price 209,993 201,806 4.06% West Home 151 549 (72.50%) Dollars 57,642 205,716 (71.98%) Avg. Price 381,735 374,710 1.87% Southwest Home 420 751 (44.07%) Dollars 100,305 174,206 (42.42%) Avg. Price 238,819 231,966 2.95% Consolidated Total Home 1,907 5,938 (67.88%) Dollars 646,187 2,009,891 (67.85%) Avg. Price 338,850 338,479 0.11% Unconsolidated Joint Ventures Home 263 427 (38.41%) Dollars 157,167 202,422 (22.36%) Avg. Price 597,593 474,056 26.06% Total Home 2,170 6,365 (65.91%) Dollars 803,354 2,212,313 (63.69%) Avg. Price 370,209 347,575 6.51% 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 Twelve Months - 10/31/2008 Net Contracts(1) Deliveries Twelve Months Ended Twelve Months Ended October 31, October 31, -------------------------- -------------------------- 2008 2007 % Change 2008 2007 % Change ------------------------------------------------------- Northeast Home 934 1,756 (46.8%) 1,412 1,999 (29.4%) Dollars 381,401 802,459 (52.5%) 679,488 935,476 (27.4%) Avg. Price 408,352 456,981 (10.6%) 481,224 467,972 2.8% Mid-Atlantic Home 880 1,545 (43.0%) 1,248 1,926 (35.2%) Dollars 313,405 677,581 (53.8%) 509,009 885,599 (42.5%) Avg. Price 356,142 438,564 (18.8%) 407,860 459,813 (11.3%) Southeast Home 584 1,109 (47.3%) 2,572 2,771 (7.2%) Dollars 132,245 312,070 (57.6%) 624,106 745,240 (16.3%) Avg. Price 226,447 281,397 (19.5%) 242,654 268,943 (9.8%) Midwest Home 497 1,134 (56.2%) 965 1,043 (7.5%) Dollars 106,887 248,744 (57.0%) 209,759 226,804 (7.5%) Avg. Price 215,064 219,351 (2.0%) 217,367 217,453 (0.0%) West Home 1,366 2,067 (33.9%) 1,764 2,182 (19.2%) Dollars 421,292 833,986 (49.5%) 551,978 959,682 (42.5%) Avg. Price 308,413 403,476 (23.6%) 312,913 439,818 (28.9%) Southwest Home 2,285 3,395 (32.7%) 2,616 3,643 (28.2%) Dollars 518,565 758,340 (31.6%) 603,513 828,574 (27.2%) Avg. Price 226,944 223,370 1.6% 230,701 227,443 1.4% Consolidated Total Home 6,546 11,006 (40.5%) 10,577 13,564 (22.0%) Dollars 1,873,795 3,633,180 (48.4%) 3,177,853 4,581,375 (30.6%) Avg. Price 286,251 330,109 (13.3%) 300,449 337,760 (11.0%) Unconsolidated Joint Ventures Home 540 661 (18.3%) 704 1,364 (48.4%) Dollars 221,858 211,797 4.8% 262,605 535,051 (50.9%) Avg. Price 410,848 320,418 28.2% 373,018 392,266 (4.9%) Total Home 7,086 11,667 (39.3%) 11,281 14,928 (24.4%) Dollars 2,095,653 3,844,977 (45.5%) 3,440,458 5,116,426 (32.8%) Avg. Price 295,746 329,560 (10.3%) 304,978 342,740 (11.0%) Contract Backlog October 31, ------------------------------------ 2008 2007 % Change ------------------------------------ Northeast Home 497 975 (49.0%) Dollars 215,604 503,445 (57.2%) Avg. Price 433,811 516,354 (16.0%) Mid-Atlantic Home 385 753 (48.9%) Dollars 165,871 358,778 (53.8%) Avg. Price 430,834 476,465 (9.6%) Southeast Home 163 2,151 (92.4%) Dollars 45,657 614,575 (92.6%) Avg. Price 280,104 285,716 (2.0%) Midwest Home 291 759 (61.7%) Dollars 61,108 153,171 (60.1%) Avg. Price 209,993 201,806 4.1% West Home 151 549 (72.5%) Dollars 57,642 205,716 (72.0%) Avg. Price 381,735 374,710 1.9% Southwest Home 420 751 (44.1%) Dollars 100,305 174,206 (42.4%) Avg. Price 238,819 231,966 3.0% Consolidated Total Home 1,907 5,938 (67.9%) Dollars 646,187 2,009,891 (67.9%) Avg. Price 338,850 338,479 0.1% Unconsolidated Joint Ventures Home 263 427 (38.4%) Dollars 157,167 202,422 (22.4%) Avg. Price 597,593 474,056 26.1% Total Home 2,170 6,365 (65.9%) Dollars 803,354 2,212,313 (63.7%) Avg. Price 370,209 347,575 6.5% DELIVERIES INCLUDE EXTRAS Notes: (1) Net contracts are defined as new contracts signed during the period for the purchase of homes, less cancellations of prior contracts.
