Hovnanian Enterprises Inc.
12/09/2021 | Press release | Distributed by Public on 12/09/2021 08:55
HOVNANIAN ENTERPRISES REPORTS FISCAL 2021 FOURTH QUARTER AND FULL YEAR RESULTS - Form 8-K
HOVNANIAN ENTERPRISES REPORTS FISCAL 2021 FOURTH QUARTER AND
FULL YEAR RESULTS
$190 Million Pretax Profit in Fiscal 2021 a 243% Increase Over the Prior Year
82% Year-over-Year Increase in Fourth Quarter Pretax Profit
Gross Margin Percentage Increased 390 Basis Points Year-over-Year for Full Year
Consolidated Backlog Dollars Increased to $1.64 Billion
Community Count Increased to 140 up 17% Sequentially From the Third Quarter
MATAWAN, NJ, December 9, 2021 - Hovnanian Enterprises, Inc. (NYSE: HOV), a leading national homebuilder, reported results for its fiscal fourth quarter and year ended October 31, 2021.
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RESULTS FOR THE FOURTH QUARTER AND YEAR ENDED OCTOBER 31, 2021: |
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Total revenues increased 19.2% to $814.3 million in the fourth quarter of fiscal 2021, compared with $683.4 million in the same quarter of the prior year. For the year ended October 31, 2021, total revenues increased 18.7% to $2.78 billion compared with $2.34 billion in the prior fiscal year. |
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Homebuilding gross margin percentage, after cost of sales interest expense and land charges, increased 200 basis points to 19.4% for the three months ended October 31, 2021 compared with 17.4% during the same period a year ago. During fiscal 2021, homebuilding gross margin percentage, after cost of sales interest expense and land charges, was 18.6%, up 390 basis points, compared with 14.7% in the prior fiscal year. |
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Homebuilding gross margin percentage, before cost of sales interest expense and land charges, increased 260 basis points to 22.8% during the fiscal 2021 fourth quarter compared with 20.2% in last year's fourth quarter. For the year ended October 31, 2021, homebuilding gross margin percentage, before cost of sales interest expense and land charges, was 21.8%, up 340 basis points, compared with 18.4% in the previous fiscal year. |
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Total SG&A was $70.0 million, or 8.6% of total revenues, in the fiscal 2021 fourth quarter compared with $65.6 million, or 9.6% of total revenues, in the previous year's fourth quarter. During fiscal 2021, total SG&A was $276.6 million, or 9.9% of total revenues, compared with $241.8 million, or 10.3% of total revenues, in the prior fiscal year. |
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Total interest expense as a percent of total revenues improved by 120 basis points to 4.7% for the fourth quarter of fiscal 2021 compared with 5.9% during the fourth quarter of fiscal 2020. For the year ended October 31, 2021, total interest expense as a percent of total revenues improved by 180 basis points to 5.8% compared with 7.6% during the same period last year. |
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Income before income taxes for the fourth quarter of fiscal 2021 was $77.4 million, up 82.5%, compared with $42.4 million in the fourth quarter of the prior fiscal year. For fiscal 2021, income before income taxes increased 242.7% to $189.9 million compared with $55.4 million during fiscal 2020. |
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Net income was $52.5 million, or $7.41 per diluted common share, for the three months ended October 31, 2021 compared with net income of $40.6 million, or $5.54 per diluted common share, in the fourth quarter of the previous fiscal year. For fiscal 2021, net income, including the $468.6 million benefit from the valuation allowance reduction, was $607.8 million, or $85.86 per diluted common share, compared with $50.9 million, or $7.03 per diluted common share, in fiscal 2020. |
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EBITDA increased 38.6% to $117.2 million for the fourth quarter of fiscal 2021 compared with $84.5 million in the same quarter of the prior year. For fiscal 2021, EBITDA was $357.0 million, a 49.5% increase, compared with $238.8 million in fiscal 2020. |
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After the unprecedented and unsustainable COVID-19 surge in home demand during last year's fourth quarter, contracts per community returned to a more normalized sales pace in the fourth quarter of 2021. Consolidated contracts per community decreased to 10.2 contracts per community for the fourth quarter ended October 31, 2021 compared to 16.5 contracts per community in last year's fourth quarter but increased compared with 9.5 contracts per community in the fourth quarter of 2019. Contracts per community, including domesticunconsolidated joint ventures(1), decreased to 9.9 contracts per community for the fourth quarter of fiscal 2021 compared with 15.9 contracts per community for the fourth quarter of fiscal 2020, but increased compared to 9.1 contracts per community for the fiscal 2019 fourth quarter. |
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As of the end of fiscal 2021, community count, including domestic unconsolidated joint ventures, increased to 140 communities, compared with 135 communities at October 31, 2020. Consolidated community count was 124 as of October 31, 2021, compared with 116 communities at the end of the previous year's fourth quarter. |
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Consolidated contract dollars decreased in the fourth quarter of fiscal 2021 to $660.4 million (1,263 homes) compared with $828.9 million (1,918 homes) in the same quarter last year but increased 27.5% compared to $517.8 million (1,345 homes) in the fourth quarter of fiscal 2019. Contract dollars, including domestic unconsolidated joint ventures, for the three months ended October 31, 2021 decreased 22.3% to $749.5 million (1,389 homes) compared with $964.8 million (2,143 homes) in the fourth quarter of fiscal 2020 but increased 25.3% compared to $597.9 million (1,479 homes) in the fourth quarter of fiscal 2019. |
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For the year ended October 31, 2021, consolidated contract dollars increased 2.6% to $2.89 billion (6,023 homes) compared with $2.81 billion (6,953 homes) in the prior year. Contract dollars, including domestic unconsolidated joint ventures, for fiscal 2021 increased 1.5% to $3.30 billion (6,687 homes) compared with $3.25 billion (7,692 homes) in fiscal 2020. |
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The dollar value of November 2021 consolidated contracts increased 10.5% to $239.7 million (467 homes) compared with $217.0 million (493 homes) in November last year and increased 50.2% compared to $159.6 million (404 homes) in November 2019. |
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The dollar value of consolidated contract backlog, as of October 31, 2021, increased 15.4% to $1.64 billion compared with $1.42 billion as of October 31, 2020. The dollar value of contract backlog, including domestic unconsolidated joint ventures, as of October 31, 2021, increased 17.2% to $1.88 billion compared with $1.60 billion as of October 31, 2020. |
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Consolidated deliveries increased 8.3% to 1,703 homes in the fiscal 2021 fourth quarter compared with 1,572 homes in the previous year's fourth quarter. For the fiscal 2021 fourth quarter, deliveries, including domestic unconsolidated joint ventures, increased 6.0% to 1,839 homes compared with 1,735 homes during the fourth quarter of fiscal 2020. |
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For fiscal 2021, consolidated deliveries increased 9.1% to 6,204 homes compared with 5,686 homes in the previous year. For fiscal 2021, deliveries, including domestic unconsolidated joint ventures, increased 5.9% to 6,793 homes compared with 6,414 homes during fiscal 2020. |
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The contract cancellation rate for consolidated contracts was 15% for the fourth quarter ended October 31, 2021 compared with 18% in the fiscal 2020 fourth quarter. The contract cancellation rate for contracts including domestic unconsolidated joint ventures was 14% for the fourth quarter of fiscal 2021 compared with 17% in the fourth quarter of the prior year. |
(1)When we refer to "Domestic Unconsolidated Joint Ventures", we are excluding results from our single community unconsolidated joint venture in the Kingdom of Saudi Arabia (KSA).
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LIQUIDITY AND INVENTORY AS OF OCTOBER 31, 2021: |
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During the fourth quarter of fiscal 2021, land and land development spending was $167.1 million. For fiscal 2021, land and land development spending was $698.3 million, an increase of 11.9% compared with $624.2 million one year ago. |
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Total liquidity at October 31, 2021 was $380.9 million, after early retirement of $181 million of senior secured notes in fiscal 2021, well above our targeted liquidity range of $170 million to $245 million. |
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In the fourth quarter of fiscal 2021, approximately 3,400 lots were put under option or acquired in 29 consolidated communities. |
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As of October 31, 2021, the total controlled consolidated lots increased 18.5% to 30,874 compared with 26,049 lots at the end of the previous year. Based on trailing twelve-month deliveries, the current position equaled a 5.0 years' supply. |
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FINANCIAL GUIDANCE(2): |
Financial guidance below assumes no adverse changes in current market conditions, including further deterioration in the supply chain, and excludes further impact to SG&A expenses from phantom stock expense related solely to stock price movements from the closing price of $84.26 at October 29, 2021.
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For the first quarter of fiscal 2022, total revenues are expected to be between $640 million and $670 million, gross margin, before cost of sales interest expense and land charges, is expected to be between 20.5% and 22.0% and adjusted pretax income is expected to be between $30 million and $35 million. |
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For the second quarter of fiscal 2022, total revenues are expected to be between $700 million and $750 million, gross margin, before cost of sales interest expense and land charges, is expected to be between 23.0% and 25.0% and adjusted pretax income is expected to be between $60 million and $75 million. |
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For all of fiscal 2022, total revenues are expected to be between $2.80 billion and $3.00 billion, gross margin, before cost of sales interest expense and land charges, is expected to be between 23.5% and 25.5%, adjusted pretax income is expected to be between $260 million and $310 million, adjusted EBITDA is expected to be between $410 million and $460 million and fully diluted earnings per share is expected to be between $26.50 and $32.00. At the midpoint of our guidance, we anticipate our shareholders equity to increase by approximately 105% by October 31, 2022. |
(2)The Company cannot provide a reconciliation between its non-GAAP projections and the most directly comparable GAAP measures without unreasonable efforts because it is unable to predict with reasonable certainty the ultimate outcome of certain significant items required for the reconciliation. These items include, but are not limited to, land-related charges, inventory impairment loss and land option write-offs and loss (gain) on extinguishment of debt. These items are uncertain, depend on various factors and could have a material impact on GAAP reported results.
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COMMENTS FROM MANAGEMENT: |
"Supply chain issues have plagued the housing industry, which caused us to conservatively revise our year end guidance down during the fourth quarter," stated Ara K. Hovnanian, Chairman of the Board, President and Chief Executive Officer. "However, our associates rose to the occasion and worked diligently to mitigate supply chain obstacles and deliver quality homes without some of the excess costs we thought might be necessary to complete the homes. Those extraordinary efforts allowed us to achieve operating results for the fourth quarter exceeding the upper end of our original guidance for adjusted gross margin, adjusted pretax income and adjusted EBITDA. Given the solid level of sales per community, an increase in our community count and higher gross margin on current sales and homes in backlog, we are anticipating significant growth in profitability in fiscal 2022 beginning with a strong first quarter."
"Our strong results during fiscal 2021 resulted in our key credit metrics improving substantially. We lowered our total debt to adjusted EBITDA ratio to 3.8 times at the end of fiscal 2021 compared with 6.7 times at the end of the previous year. Additionally, our adjusted EBITDA to interest incurred ratio increased to 2.3 times for fiscal 2021 compared with 1.3 times for fiscal 2020. We expect to continue our trend of improving our key credit metrics in future periods and are pleased to announce our Board of Directors approved reinstating a $2.7 million dividend payment on our preferred stock payable in January 2022," said J. Larry Sorsby, Executive Vice President and Chief Financial Officer.
Mr. Hovnanian continued, "Our pretax income increased substantially to almost $200 million in fiscal 2021. Additionally, we generated significant amounts of cash in fiscal 2021, allowing us to payoff $181 million of our secured bonds ahead of maturity and we still ended the year with $381 million of liquidity, well above the upper end of our liquidity target of $245 million. After increasing equity substantially in fiscal 2021, we expect to achieve diluted earnings per share of between $26.50 and $32.00 for the full fiscal 2022 year and expect to more than double our shareholders equity by fiscal year end. Given that we are entering fiscal 2022 with over half of our revenue guidance in backlog, combined with our strong sales pace and gross margins, we look forward to an extraordinarily strong new year," concluded Mr. Hovnanian.
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WEBCAST INFORMATION: |
Hovnanian Enterprises will webcast its fiscal 2021 fourth quarter financial results conference call at 11:00 a.m. E.T. on Thursday, December 9, 2021. 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.
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ABOUT HOVNANIAN ENTERPRISES, INC.: |
Hovnanian Enterprises, Inc., founded in 1959 by Kevork S. Hovnanian, is headquartered in Matawan, New Jersey and, through its subsidiaries, is one of the nation's largest homebuilders with operations in Arizona, California, Delaware, Florida, Georgia, Illinois, Maryland, New Jersey, Ohio, Pennsylvania, South Carolina, Texas, Virginia, Washington, D.C. and West Virginia. The Company's homes are marketed and sold under the trade name K. Hovnanian® Homes. Additionally, the Company's subsidiaries, as developers of K. Hovnanian's® Four Seasons communities, make the Company one of the nation's largest builders of active lifestyle communities.
Additional information on Hovnanian Enterprises, Inc. can be accessed through the "Investor Relations" section of the Hovnanian Enterprises' website at http://www.khov.com. To be added to Hovnanian's investor e-mail list, please send an e-mail to [email protected] or sign up at http://www.khov.com.
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NON-GAAP FINANCIAL MEASURES: |
Consolidated earnings before interest expense and income taxes ("EBIT") and before depreciation and amortization ("EBITDA") and before inventory impairment loss and land option write-offs and loss (gain) on extinguishment of debt ("Adjusted EBITDA") are not U.S. generally accepted accounting principles (GAAP) financial measures. The most directly comparable GAAP financial measure is net income. The reconciliation for historical periods of EBIT, EBITDA and Adjusted EBITDA to net income is presented in a table attached to this earnings release.
Homebuilding gross margin, before cost of sales interest expense and land charges, and homebuilding gross margin percentage, before cost of sales interest expense and land charges, are non-GAAP financial measures. The most directly comparable GAAP financial measures are homebuilding gross margin and homebuilding gross margin percentage, respectively. The reconciliation for historical periods of homebuilding gross margin, before cost of sales interest expense and land charges, and homebuilding gross margin percentage, before cost of sales interest expense and land charges, to homebuilding gross margin and homebuilding gross margin percentage, respectively, is presented in a table attached to this earnings release.
Adjusted pretax income, which is defined as income before income taxes excluding land-related charges and loss (gain) on extinguishment of debt is a non-GAAP financial measure. The most directly comparable GAAP financial measure is income before income taxes. The reconciliation for historical periods of adjusted pretax income to income before income taxes is presented in a table attached to this earnings release.
Total liquidity is comprised of $246.0 million of cash and cash equivalents, $9.9 million of restricted cash required to collateralize letters of credit and $125.0 million availability under the senior secured revolving credit facility as of October 31, 2021.
FORWARD-LOOKING STATEMENTS
All statements in this press release that are not historical facts should be considered as "Forward-Looking Statements" within the meaning of the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such forward-looking statements include but are not limited to statements related to the Company's goals and expectations with respect to its financial results for future financial periods. Although we believe that our plans, intentions and expectations reflected in, or suggested by, such forward-looking statements are reasonable, we can give no assurance that such plans, intentions or expectations will be achieved. By their nature, forward-looking statements: (i) speak only as of the date they are made, (ii) are not guarantees of future performance or results and (iii) are subject to risks, uncertainties and assumptions that are difficult to predict or quantify. Therefore, actual results could differ materially and adversely from those forward-looking statements as a result of a variety of factors. Such risks, uncertainties and other factors include, but are not limited to, (1) changes in general and local economic, industry and business conditions and impacts of a significant homebuilding downturn; (2) shortages in, and price fluctuations of, raw materials and labor, including due to changes in trade policies, including the imposition of tariffs and duties on homebuilding materials and products and related trade disputes with and retaliatory measures taken by other countries; (3) the outbreak and spread of COVID-19 and the measures that governments, agencies, law enforcement and/or health authorities implement to address it; (4) adverse weather and other environmental conditions and natural disasters; (5) the seasonality of the Company's business; (6) the availability and cost of suitable land and improved lots and sufficient liquidity to invest in such land and lots; (7) reliance on, and the performance of, subcontractors; (8) regional and local economic factors, including dependency on certain sectors of the economy, and employment levels affecting home prices and sales activity in the markets where the Company builds homes; (9) increases in cancellations of agreements of sale; (10) fluctuations in interest rates and the availability of mortgage financing; (11) changes in tax laws affecting the after-tax costs of owning a home; (12) legal claims brought against us and not resolved in our favor, such as product liability litigation, warranty claims and claims made by mortgage investors; (13) levels of competition; (14) utility shortages and outages or rate fluctuations; (15) information technology failures and data security breaches; (16) negative publicity; (17) high leverage and restrictions on the Company's operations and activities imposed by the agreements governing the Company's outstanding indebtedness; (18) availability and terms of financing to the Company; (19) the Company's sources of liquidity; (20) changes in credit ratings; (21) government regulation, including regulations concerning development of land, the home building, sales and customer financing processes, tax laws and the environment; (22) operations through unconsolidated joint ventures with third parties; (23) significant influence of the Company's controlling stockholders; (24) availability of net operating loss carryforwards; (25) loss of key management personnel or failure to attract qualified personnel; and (26) certain risks, uncertainties and other factors described in detail in the Company's Annual Report on Form 10-K for the fiscal year ended October 31, 2020 and the Company's Quarterly Reports on Form 10-Q for the quarterly periods during fiscal 2021 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.
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Hovnanian Enterprises, Inc. |
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October 31, 2021 |
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Statements of consolidated operations |
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(In thousands, except per share data) |
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Three Months Ended |
Year Ended |
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October 31, |
October 31, |
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2021 |
2020 |
2021 |
2020 |
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(Unaudited) |
(Unaudited) |
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Total revenues |
$ | 814,348 | $ | 683,358 | $ | 2,782,857 | $ | 2,343,901 | ||||||||
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Costs and expenses (1) |
732,742 | 644,060 | 2,598,097 | 2,318,400 | ||||||||||||
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(Loss) gain on extinguishment of debt |
(3,442 | ) | - | (3,748 | ) | 13,337 | ||||||||||
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(Loss) income from unconsolidated joint ventures |
(719 | ) | 3,146 | 8,849 | 16,565 | |||||||||||
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Income before income taxes |
77,445 | 42,444 | 189,861 | 55,403 | ||||||||||||
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Income tax provision (benefit) |
24,965 | 1,810 | (417,956 | ) | 4,475 | |||||||||||
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Net income |
$ | 52,480 | $ | 40,634 | $ | 607,817 | $ | 50,928 | ||||||||
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Per share data: |
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Basic: |
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Net income per common share |
$ | 7.53 | $ | 5.97 | $ | 87.50 | $ | 7.48 | ||||||||
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Weighted average number of common shares outstanding |
6,360 | 6,221 | 6,287 | 6,189 | ||||||||||||
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Assuming dilution: |
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Net income per common share |
$ | 7.41 | $ | 5.54 | $ | 85.86 | $ | 7.03 | ||||||||
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Weighted average number of common shares outstanding |
6,467 | 6,699 | 6,395 | 6,584 |
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(1) Includes inventory impairment loss and land option write-offs. |
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Hovnanian Enterprises, Inc. |
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October 31, 2021 |
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Reconciliation of income before income taxes excluding land-related charges and loss (gain) on extinguishment of debt to income before income taxes |
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(In thousands) |
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Three Months Ended |
Year Ended |
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October 31, |
October 31, |
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2021 |
2020 |
2021 |
2020 |
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(Unaudited) |
(Unaudited) |
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Income before income taxes |
$ | 77,445 | $ | 42,444 | $ | 189,861 | $ | 55,403 | ||||||||
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Inventory impairment loss and land option write-offs |
363 | 2,611 | 3,630 | 8,813 | ||||||||||||
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Loss (gain) on extinguishment of debt |
3,442 | - | 3,748 | (13,337 | ) | |||||||||||
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Income before income taxes excluding land-related charges and loss (gain) on extinguishment of debt (1) |
$ | 81,250 | $ | 45,055 | $ | 197,239 | $ | 50,879 |
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(1) Income before income taxes excluding land-related charges and loss (gain) on extinguishment of debt is a non-GAAP financial measure. The most directly comparable GAAP financial measure is income before income taxes. |
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Hovnanian Enterprises, Inc. |
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October 31, 2021 |
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Gross margin |
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(In thousands) |
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Homebuilding Gross Margin |
Homebuilding Gross Margin |
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Three Months Ended |
Year Ended |
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October 31, |
October 31, |
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2021 |
2020 |
2021 |
2020 |
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(Unaudited) |
(Unaudited) |
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Sale of homes |
$ | 779,551 | $ | 643,516 | $ | 2,673,710 | $ | 2,252,029 | ||||||||
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Cost of sales, excluding interest expense and land charges (1) |
602,097 | 513,416 | 2,091,016 | 1,837,332 | ||||||||||||
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Homebuilding gross margin, before cost of sales interest expense and land charges (2) |
177,454 | 130,100 | 582,694 | 414,697 | ||||||||||||
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Cost of sales interest expense, excluding land sales interest expense |
25,939 | 15,707 | 82,181 | 74,174 | ||||||||||||
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Homebuilding gross margin, after cost of sales interest expense, before land charges (2) |
151,515 | 114,393 | 500,513 | 340,523 | ||||||||||||
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Land charges |
363 | 2,611 | 3,630 | 8,813 | ||||||||||||
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Homebuilding gross margin |
$ | 151,152 | $ | 111,782 | $ | 496,883 | $ | 331,710 | ||||||||
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Homebuilding Gross margin percentage |
19.4 | % | 17.4 | % | 18.6 | % | 14.7 | % | ||||||||
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Homebuilding Gross margin percentage, before cost of sales interest expense and land charges (2) |
22.8 | % | 20.2 | % | 21.8 | % | 18.4 | % | ||||||||
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Homebuilding Gross margin percentage, after cost of sales interest expense, before land charges (2) |
19.4 | % | 17.8 | % | 18.7 | % | 15.1 | % |
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Land Sales Gross Margin |
Land Sales Gross Margin |
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Three Months Ended |
Year Ended |
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October 31, |
October 31, |
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2021 |
2020 |
2021 |
2020 |
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(Unaudited) |
(Unaudited) |
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Land and lot sales |
$ | 13,634 | $ | 16,805 | $ | 25,364 | $ | 16,905 | ||||||||
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Land and lot sales cost of sales, excluding interest and land charges (1) |
10,059 | 10,993 | 19,180 | 11,154 | ||||||||||||
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Land and lot sales gross margin, excluding interest and land charges |
3,575 | 5,812 | 6,184 | 5,751 | ||||||||||||
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Land and lot sales interest |
31 | 84 | 1,919 | 156 | ||||||||||||
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Land and lot sales gross margin, including interest and excluding land charges |
$ | 3,544 | $ | 5,728 | $ | 4,265 | $ | 5,595 |
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(1) Does not include cost associated with walking away from land options or inventory impairment losses which are recorded as Inventory impairment loss and land option write-offs in the Consolidated Statements of Operations. |
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(2) Homebuilding gross margin, before cost of sales interest expense and land charges, and homebuilding gross margin percentage, before cost of sales interest expense and land charges, are non-GAAP financial measures. The most directly comparable GAAP financial measures are homebuilding gross margin and homebuilding gross margin percentage, respectively. |
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Hovnanian Enterprises, Inc. |
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October 31, 2021 |
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Reconciliation of adjusted EBITDA to net income |
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(In thousands) |
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Three Months Ended |
Year Ended |
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October 31, |
October 31, |
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2021 |
2020 |
2021 |
2020 |
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(Unaudited) |
(Unaudited) |
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Net income |
$ | 52,480 | $ | 40,634 | $ | 607,817 | $ | 50,928 | ||||||||
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Income tax provision (benefit) |
24,965 | 1,810 | (417,956 | ) | 4,475 | |||||||||||
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Interest expense |
38,520 | 40,648 | 161,816 | 178,131 | ||||||||||||
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EBIT (1) |
115,965 | 83,092 | 351,677 | 233,534 | ||||||||||||
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Depreciation and amortization |
1,189 | 1,407 | 5,280 | 5,304 | ||||||||||||
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EBITDA (2) |
117,154 | 84,499 | 356,957 | 238,838 | ||||||||||||
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Inventory impairment loss and land option write-offs |
363 | 2,611 | 3,630 | 8,813 | ||||||||||||
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Loss (gain) on extinguishment of debt |
3,442 | - | 3,748 | (13,337 | ) | |||||||||||
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Adjusted EBITDA (3) |
$ | 120,959 | $ | 87,110 | $ | 364,335 | $ | 234,314 | ||||||||
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Interest incurred |
$ | 33,006 | $ | 41,660 | $ | 155,514 | $ | 176,457 | ||||||||
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Adjusted EBITDA to interest incurred |
3.66 | 2.09 | 2.34 | 1.33 | ||||||||||||
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Nonrecourse mortgages secured by inventory, net of debt issuance costs |
$ | 125,089 | $ | 135,122 | ||||||||||||
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Senior notes and credit facilities (net of discounts, premiums and debt issuance costs) |
1,248,373 | 1,431,110 | ||||||||||||||
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Total debt |
$ | 1,373,462 | $ | 1,566,232 | ||||||||||||
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Total debt to adjusted EBITDA |
3.8 | 6.7 |
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(1) EBIT is a non-GAAP financial measure. The most directly comparable GAAP financial measure is net income. EBIT represents earnings before interest expense and income taxes. |
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(2) EBITDA is a non-GAAP financial measure. The most directly comparable GAAP financial measure is net income. EBITDA represents earnings before interest expense, income taxes, depreciation and amortization. |
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(3) Adjusted EBITDA is a non-GAAP financial measure. The most directly comparable GAAP financial measure is net income. Adjusted EBITDA represents earnings before interest expense, income taxes, depreciation, amortization, inventory impairment loss and land option write-offs and (loss) gain on extinguishment of debt. |
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Hovnanian Enterprises, Inc. |
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October 31, 2021 |
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Interest incurred, expensed and capitalized |
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(In thousands) |
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Three Months Ended |
Year Ended |
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October 31, |
October 31, |
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2021 |
2020 |
2021 |
2020 |
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(Unaudited) |
(Unaudited) |
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Interest capitalized at beginning of period |
$ | 63,673 | $ | 63,998 | $ | 65,010 | $ | 71,264 | ||||||||
|
Plus interest incurred |
33,006 | 41,660 | 155,514 | 176,457 | ||||||||||||
|
Less interest expensed |
38,520 | 40,648 | 161,816 | 178,131 | ||||||||||||
|
Less interest contributed to unconsolidated joint venture (1) |
- | - | 3,667 | 4,580 | ||||||||||||
|
Plus interest acquired from unconsolidated joint venture (2) |
- | - | 3,118 | - | ||||||||||||
|
Interest capitalized at end of period (3) |
$ | 58,159 | $ | 65,010 | $ | 58,159 | $ | 65,010 |
|
(1) Represents capitalized interest which was included as part of the assets contributed to joint ventures the company entered into in April 2021 and December 2019 during the years ended October 31, 2021 and 2020, respectively. There was no impact to the Consolidated Statement of Operations as a result of this transaction. |
|
(2) Represents capitalized interest which was included as part of the assets purchased from a joint venture the company exited out of in June 2021 during the year ended October 31, 2021. There was no impact to the Consolidated Statement of Operations as a result of this transaction. |
|
(3) Capitalized interest amounts are shown gross before allocating any portion of impairments to capitalized interest. |
9
HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
(Unaudited)
|
October 31, |
October 31, |
|||||||
|
2021 |
2020 |
|||||||
|
ASSETS |
||||||||
|
Homebuilding: |
||||||||
|
Cash and cash equivalents |
$ | 245,970 | $ | 262,489 | ||||
|
Restricted cash and cash equivalents |
16,089 | 14,731 | ||||||
|
Inventories: |
||||||||
|
Sold and unsold homes and lots under development |
1,019,541 | 921,594 | ||||||
|
Land and land options held for future development or sale |
135,992 | 91,957 | ||||||
|
Consolidated inventory not owned |
98,727 | 182,224 | ||||||
|
Total inventories |
1,254,260 | 1,195,775 | ||||||
|
Investments in and advances to unconsolidated joint ventures |
60,897 | 103,164 | ||||||
|
Receivables, deposits and notes, net |
39,934 | 33,686 | ||||||
|
Property, plant and equipment, net |
18,736 | 18,185 | ||||||
|
Prepaid expenses and other assets |
56,186 | 58,705 | ||||||
|
Total homebuilding |
1,692,072 | 1,686,735 | ||||||
|
Financial services |
202,758 | 140,607 | ||||||
|
Deferred tax assets, net |
425,678 | - | ||||||
|
Total assets |
$ | 2,320,508 | $ | 1,827,342 | ||||
|
LIABILITIES AND EQUITY |
||||||||
|
Homebuilding: |
||||||||
|
Nonrecourse mortgages secured by inventory, net of debt issuance costs |
$ | 125,089 | $ | 135,122 | ||||
|
Accounts payable and other liabilities |
426,381 | 359,274 | ||||||
|
Customers' deposits |
68,295 | 48,286 | ||||||
|
Liabilities from inventory not owned, net of debt issuance costs |
62,762 | 131,204 | ||||||
|
Senior notes and credit facilities (net of discounts, premiums and debt issuance costs) |
1,248,373 | 1,431,110 | ||||||
|
Accrued Interest |
28,154 | 35,563 | ||||||
|
Total homebuilding |
1,959,054 | 2,140,559 | ||||||
|
Financial services |
182,219 | 119,045 | ||||||
|
Income taxes payable |
3,851 | 3,832 | ||||||
|
Total liabilities |
2,145,124 | 2,263,436 | ||||||
|
Equity: |
||||||||
|
Hovnanian Enterprises, Inc. stockholders' equity deficit: |
||||||||
|
Preferred stock, $0.01 par value - authorized 100,000 shares; issued and outstanding 5,600 shares with a liquidation preference of $140,000 at October 31, 2021 and October 31, 2020 |
135,299 | 135,299 | ||||||
|
Common stock, Class A, $0.01 par value - authorized 16,000,000 shares; issued 6,066,152 shares at October 31, 2021 and 5,990,310 shares at October 31, 2020 |
61 | 60 | ||||||
|
Common stock, Class B, $0.01 par value (convertible to Class A at time of sale) - authorized 2,400,000 shares; issued 686,888 shares at October 31, 2021 and 649,886 shares at October 31, 2020 |
7 | 7 | ||||||
|
Paid in capital - common stock |
722,118 | 718,110 | ||||||
|
Accumulated deficit |
(567,228 |
) |
(1,175,045 |
) |
||||
|
Treasury stock - at cost - 470,430 shares of Class A common stock and 27,669 shares of Class B common stock at October 31, 2021 and October 31, 2020 |
(115,360 |
) |
(115,360 |
) |
||||
|
Total Hovnanian Enterprises, Inc. stockholders' equity (deficit) |
174,897 | (436,929 |
) |
|||||
|
Noncontrolling interest in consolidated joint ventures |
487 | 835 | ||||||
|
Total equity (deficit) |
175,384 | (436,094 |
) |
|||||
|
Total liabilities and equity |
$ | 2,320,508 | $ | 1,827,342 |
10
HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands Except Per Share Data)
(Unaudited)
|
Three Months Ended October 31, |
Years Ended October 31, |
|||||||||||||||
|
2021 |
2020 |
2021 |
2020 |
|||||||||||||
|
Revenues: |
||||||||||||||||
|
Homebuilding: |
||||||||||||||||
|
Sale of homes |
$ | 779,551 | $ | 643,516 | $ | 2,673,710 | $ | 2,252,029 | ||||||||
|
Land sales and other revenues |
14,175 | 17,350 | 27,455 | 19,710 | ||||||||||||
|
Total homebuilding |
793,726 | 660,866 | 2,701,165 | 2,271,739 | ||||||||||||
|
Financial services |
20,622 | 22,492 | 81,692 | 72,162 | ||||||||||||
|
Total revenues |
814,348 | 683,358 | 2,782,857 | 2,343,901 | ||||||||||||
|
Expenses: |
||||||||||||||||
|
Homebuilding: |
||||||||||||||||
|
Cost of sales, excluding interest |
612,156 | 524,409 | 2,110,196 | 1,848,486 | ||||||||||||
|
Cost of sales interest |
25,970 | 15,791 | 84,100 | 74,330 | ||||||||||||
|
Inventory impairment loss and land option write-offs |
363 | 2,611 | 3,630 | 8,813 | ||||||||||||
|
Total cost of sales |
638,489 | 542,811 | 2,197,926 | 1,931,629 | ||||||||||||
|
Selling, general and administrative |
44,475 | 39,374 | 169,892 | 161,261 | ||||||||||||
|
Total homebuilding expenses |
682,964 | 582,185 | 2,367,818 | 2,092,890 | ||||||||||||
|
Financial services |
11,176 | 10,383 | 44,129 | 40,060 | ||||||||||||
|
Corporate general and administrative |
25,545 | 26,213 | 106,694 | 80,553 | ||||||||||||
|
Other interest |
12,550 | 24,857 | 77,716 | 103,801 | ||||||||||||
|
Other operations |
507 | 422 | 1,740 | 1,096 | ||||||||||||
|
Total expenses |
732,742 | 644,060 | 2,598,097 | 2,318,400 | ||||||||||||
|
(Loss) gain on extinguishment of debt |
(3,442 |
) |
- | (3,748 |
) |
13,337 | ||||||||||
|
(Loss) income from unconsolidated joint ventures |
(719 |
) |
3,146 | 8,849 | 16,565 | |||||||||||
|
Income before income taxes |
77,445 | 42,444 | 189,861 | 55,403 | ||||||||||||
|
State and federal income tax provision (benefit): |
||||||||||||||||
|
State |
6,924 | 1,810 | (82,348 |
) |
4,475 | |||||||||||
|
Federal |
18,041 | - | (335,608 |
) |
- | |||||||||||
|
Total income taxes |
24,965 | 1,810 | (417,956 |
) |
4,475 | |||||||||||
|
Net income |
$ | 52,480 | $ | 40,634 | $ | 607,817 | $ | 50,928 | ||||||||
|
Per share data: |
||||||||||||||||
|
Basic: |
||||||||||||||||
|
Net income per common share |
$ | 7.53 | $ | 5.97 | $ | 87.50 | $ | 7.48 | ||||||||
|
Weighted-average number of common shares outstanding |
6,360 | 6,221 | 6,287 | 6,189 | ||||||||||||
|
Assuming dilution: |
||||||||||||||||
|
Net income per common share |
$ | 7.41 | $ | 5.54 | $ | 85.86 | $ | 7.03 | ||||||||
|
Weighted-average number of common shares outstanding |
6,467 | 6,699 | 6,395 | 6,584 |
11
|
HOVNANIAN ENTERPRISES, INC. |
|
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE) |
|
(SEGMENT DATA EXCLUDES UNCONSOLIDATED JOINT VENTURES) |
|
Contracts (1) |
Deliveries |
Contract |
||||||||
|
Three Months Ended |
Three Months Ended |
Backlog |
||||||||
|
October 31, |
October 31, |
October 31, |
||||||||
|
2021 |
2020 |
% Change |
2021 |
2020 |
% Change |
2021 |
2020 |
% Change |
||
|
Northeast |
||||||||||
|
(NJ, PA) |
Home |
74 |
95 |
(22.1)% |
62 |
78 |
(20.5)% |
172 |
130 |
32.3% |
|
Dollars |
$60,812 |
$63,326 |
(4.0)% |
$45,055 |
$42,218 |
6.7% |
$138,396 |
$82,111 |
68.5% |
|
|
Avg. Price |
$821,784 |
$666,589 |
23.3% |
$726,694 |
$541,256 |
34.3% |
$804,628 |
$631,623 |
27.4% |
|
|
Mid-Atlantic(2) |
||||||||||
|
(DE, MD, VA, WV) |
Home |
190 |
253 |
(24.9)% |
268 |
219 |
22.4% |
508 |
557 |
(8.8)% |
|
Dollars |
$127,625 |
$135,364 |
(5.7)% |
$154,202 |
$114,221 |
35.0% |
$342,189 |
$291,115 |
17.5% |
|
|
Avg. Price |
$671,711 |
$535,036 |
25.5% |
$575,381 |
$521,557 |
10.3% |
$673,600 |
$522,648 |
28.9% |
|
|
Midwest |
||||||||||
|
(IL, OH) |
Home |
154 |
249 |
(38.2)% |
197 |
187 |
5.3% |
605 |
596 |
1.5% |
|
Dollars |
$56,684 |
$79,999 |
(29.1)% |
$67,340 |
$59,498 |
13.2% |
$194,446 |
$169,517 |
14.7% |
|
|
Avg. Price |
$368,078 |
$321,281 |
14.6% |
$341,827 |
$318,171 |
7.4% |
$321,398 |
$284,424 |
13.0% |
|
|
Southeast |
||||||||||
|
(FL, GA, SC) |
Home |
175 |
163 |
7.4% |
194 |
169 |
14.8% |
421 |
298 |
41.3% |
|
Dollars |
$97,285 |
$74,765 |
30.1% |
$87,718 |
$73,741 |
19.0% |
$221,425 |
$146,971 |
50.7% |
|
|
Avg. Price |
$555,914 |
$458,681 |
21.2% |
$452,155 |
$436,337 |
3.6% |
$525,950 |
$493,191 |
6.6% |
|
|
Southwest |
||||||||||
|
(AZ, TX) |
Home |
507 |
712 |
(28.8)% |
723 |
584 |
23.8% |
1,076 |
1,066 |
0.9% |
|
Dollars |
$217,919 |
$245,813 |
(11.3)% |
$282,128 |
$194,505 |
45.0% |
$459,820 |
$360,225 |
27.6% |
|
|
Avg. Price |
$429,821 |
$345,243 |
24.5% |
$390,219 |
$333,057 |
17.2% |
$427,342 |
$337,922 |
26.5% |
|
|
West |
||||||||||
|
(CA) |
Home |
163 |
446 |
(63.5)% |
259 |
335 |
(22.7)% |
465 |
755 |
(38.4)% |
|
Dollars |
$100,067 |
$229,656 |
(56.4)% |
$143,108 |
$159,332 |
(10.2)% |
$282,430 |
$369,887 |
(23.6)% |
|
|
Avg. Price |
$613,908 |
$514,924 |
19.2% |
$552,541 |
$475,618 |
16.2% |
$607,376 |
$489,917 |
24.0% |
|
|
Consolidated Total |
||||||||||
|
Home |
1,263 |
1,918 |
(34.2)% |
1,703 |
1,572 |
8.3% |
3,247 |
3,402 |
(4.6)% |
|
|
Dollars |
$660,392 |
$828,923 |
(20.3)% |
$779,551 |
$643,515 |
21.1% |
$1,638,706 |
$1,419,826 |
15.4% |
|
|
Avg. Price |
$522,876 |
$432,181 |
21.0% |
$457,752 |
$409,361 |
11.8% |
$504,683 |
$417,350 |
20.9% |
|
|
Unconsolidated Joint Ventures (2, 3) |
||||||||||
|
(excluding KSA JV) |
Home |
126 |
225 |
(44.0)% |
136 |
163 |
(16.6)% |
375 |
326 |
15.0% |
|
Dollars |
$89,062 |
$135,906 |
(34.5)% |
$81,351 |
$102,043 |
(20.3)% |
$241,619 |
$184,524 |
30.9% |
|
|
Avg. Price |
$706,841 |
$604,027 |
17.0% |
$598,169 |
$626,031 |
(4.5)% |
$644,317 |
$566,025 |
13.8% |
|
|
Grand Total |
||||||||||
|
Home |
1,389 |
2,143 |
(35.2)% |
1,839 |
1,735 |
6.0% |
3,622 |
3,728 |
(2.8)% |
|
|
Dollars |
$749,454 |
$964,829 |
(22.3)% |
$860,902 |
$745,558 |
15.5% |
$1,880,325 |
$1,604,350 |
17.2% |
|
|
Avg. Price |
$539,564 |
$450,224 |
19.8% |
$468,136 |
$429,716 |
8.9% |
$519,140 |
$430,351 |
20.6% |
|
|
KSA JV Only |
||||||||||
|
Home |
247 |
326 |
(24.2)% |
0 |
0 |
0.0% |
1,913 |
1,092 |
75.2% |
|
|
Dollars |
$38,731 |
$51,110 |
(24.2)% |
$0 |
$0 |
0.0% |
$300,384 |
$171,673 |
75.0% |
|
|
Avg. Price |
$156,806 |
$156,779 |
0.0% |
$0 |
$0 |
0.0% |
$157,022 |
$157,210 |
(0.1)% |
|
DELIVERIES INCLUDE EXTRAS |
|
Notes: |
|
(1) Contracts are defined as new contracts signed during the period for the purchase of homes, less cancellations of prior contracts. |
|
(2) Reflects the reclassification of 14 homes and $7.4 million of contract backlog as of October 31, 2021 from unconsolidated joint ventures to the consolidated Mid-Atlantic segment. This is related to our acquisition of the remaining assets and liabilities from one of our unconsolidated joint ventures which was dissolved during the fourth quarter of fiscal 2021. |
|
(3) Represents home deliveries, home revenues and average prices for our unconsolidated homebuilding joint ventures for the period. We provide this data as a supplement to our consolidated results as an indicator of the volume managed in our unconsolidated homebuilding joint ventures. Our proportionate share of the income or loss of unconsolidated homebuilding and land development joint ventures is reflected as a separate line item in our consolidated financial statements under "Income from unconsolidated joint ventures". |
12
|
HOVNANIAN ENTERPRISES, INC. |
||||||||||
|
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE) |
||||||||||
|
(SEGMENT DATA EXCLUDES UNCONSOLIDATED JOINT VENTURES) |
||||||||||
|
Contracts (1) |
Deliveries |
Contract |
||||||||
|
Year Ended |
Year Ended |
Backlog |
||||||||
|
October 31, |
October 31, |
October 31, |
||||||||
|
2021 |
2020 |
% Change |
2021 |
2020 |
% Change |
2021 |
2020 |
% Change |
||
|
Northeast |
||||||||||
|
(NJ, PA) |
Home |
243 |
326 |
(25.5)% |
201 |
348 |
(42.2)% |
172 |
130 |
32.3% |
|
Dollars |
$196,496 |
$171,181 |
14.8% |
$140,212 |
$175,627 |
(20.2)% |
$138,396 |
$82,111 |
68.5% |
|
|
Avg. Price |
$808,626 |
$525,095 |
54.0% |
$697,572 |
$504,675 |
38.2% |
$804,628 |
$631,623 |
27.4% |
|
|
Mid-Atlantic(2) |
||||||||||
|
(DE, MD, VA, WV) |
Home |
837 |
990 |
(15.5)% |
849 |
755 |
12.5% |
508 |
557 |
(8.8)% |
|
Dollars |
$541,684 |
$510,229 |
6.2% |
$465,432 |
$402,647 |
15.6% |
$342,189 |
$291,115 |
17.5% |
|
|
Avg. Price |
$647,173 |
$515,383 |
25.6% |
$548,212 |
$533,307 |
2.8% |
$673,600 |
$522,648 |
28.9% |
|
|
Midwest |
||||||||||
|
(IL, OH) |
Home |
782 |
873 |
(10.4)% |
773 |
727 |
6.3% |
605 |
596 |
1.5% |
|
Dollars |
$273,459 |
$272,170 |
0.5% |
$248,531 |
$225,334 |
10.3% |
$194,446 |
$169,517 |
14.7% |
|
|
Avg. Price |
$349,692 |
$311,764 |
12.2% |
$321,515 |
$309,950 |
3.7% |
$321,398 |
$284,424 |
13.0% |
|
|
Southeast |
||||||||||
|
(FL, GA, SC) |
Home |
662 |
599 |
10.5% |
602 |
548 |
9.9% |
421 |
298 |
41.3% |
|
Dollars |
$320,485 |
$270,277 |
18.6% |
$276,207 |
$232,333 |
18.9% |
$221,425 |
$146,971 |
50.7% |
|
|
Avg. Price |
$484,118 |
$451,214 |
7.3% |
$458,816 |
$423,965 |
8.2% |
$525,950 |
$493,191 |
6.6% |
|
|
Southwest |
||||||||||
|
(AZ, TX) |
Home |
2,541 |
2,636 |
(3.6)% |
2,531 |
2,233 |
13.3% |
1,076 |
1,066 |
0.9% |
|
Dollars |
$1,001,844 |
$872,630 |
14.8% |
$902,248 |
$743,301 |
21.4% |
$459,820 |
$360,225 |
27.6% |
|
|
Avg. Price |
$394,271 |
$331,043 |
19.1% |
$356,479 |
$332,871 |
7.1% |
$427,342 |
$337,922 |
26.5% |
|
|
West |
||||||||||
|
(CA) |
Home |
958 |
1,529 |
(37.3)% |
1,248 |
1,075 |
16.1% |
465 |
755 |
(38.4)% |
|
Dollars |
$553,624 |
$717,973 |
(22.9)% |
$641,080 |
$472,786 |
35.6% |
$282,430 |
$369,887 |
(23.6)% |
|
|
Avg. Price |
$577,896 |
$469,570 |
23.1% |
$513,686 |
$439,801 |
16.8% |
$607,376 |
$489,917 |
24.0% |
|
|
Consolidated Total |
||||||||||
|
Home |
6,023 |
6,953 |
(13.4)% |
6,204 |
5,686 |
9.1% |
3,247 |
3,402 |
(4.6)% |
|
|
Dollars |
$2,887,592 |
$2,814,460 |
2.6% |
$2,673,710 |
$2,252,028 |
18.7% |
$1,638,706 |
$1,419,826 |
15.4% |
|
|
Avg. Price |
$479,428 |
$404,784 |
18.4% |
$430,966 |
$396,065 |
8.8% |
$504,683 |
$417,350 |
20.9% |
|
|
Unconsolidated Joint Ventures (2, 3) |
||||||||||
|
(excluding KSA JV) |
Home |
664 |
739 |
(10.1)% |
589 |
728 |
(19.1)% |
375 |
326 |
15.0% |
|
Dollars |
$407,886 |
$432,570 |
(5.7)% |
$345,793 |
$432,602 |
(20.1)% |
$241,619 |
$184,524 |
30.9% |
|
|
Avg. Price |
$614,286 |
$585,345 |
4.9% |
$587,085 |
$594,234 |
(1.2)% |
$644,317 |
$566,025 |
13.8% |
|
|
Grand Total |
||||||||||
|
Home |
6,687 |
7,692 |
(13.1)% |
6,793 |
6,414 |
5.9% |
3,622 |
3,728 |
(2.8)% |
|
|
Dollars |
$3,295,478 |
$3,247,030 |
1.5% |
$3,019,503 |
$2,684,630 |
12.5% |
$1,880,325 |
$1,604,350 |
17.2% |
|
|
Avg. Price |
$492,819 |
$422,131 |
16.7% |
$444,502 |
$418,558 |
6.2% |
$519,140 |
$430,351 |
20.6% |
|
|
KSA JV Only |
||||||||||
|
Home |
821 |
890 |
(7.8)% |
0 |
0 |
0.0% |
1,913 |
1,092 |
75.2% |
|
|
Dollars |
$128,711 |
$139,356 |
(7.6)% |
$0 |
$0 |
0.0% |
$300,384 |
$171,673 |
75.0% |
|
|
Avg. Price |
$156,773 |
$156,580 |
0.1% |
$0 |
$0 |
0.0% |
$157,022 |
$157,210 |
(0.1)% |
|
DELIVERIES INCLUDE EXTRAS |
|
Notes: |
|
(1) Contracts are defined as new contracts signed during the period for the purchase of homes, less cancellations of prior contracts. |
|
(2) Reflects the reclassification of 14 homes and $7.4 million of contract backlog as of October 31, 2021 from unconsolidated joint ventures to the consolidated Mid-Atlantic segment. This is related to our acquisition of the remaining assets and liabilities from one of our unconsolidated joint ventures which was dissolved during the fourth quarter of fiscal 2021. |
|
(3) Represents home deliveries, home revenues and average prices for our unconsolidated homebuilding joint ventures for the period. We provide this data as a supplement to our consolidated results as an indicator of the volume managed in our unconsolidated homebuilding joint ventures. Our proportionate share of the income or loss of unconsolidated homebuilding and land development joint ventures is reflected as a separate line item in our consolidated financial statements under "Income from unconsolidated joint ventures". |
13
|
HOVNANIAN ENTERPRISES, INC. |
|
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE) |
|
(SEGMENT DATA UNCONSOLIDATED JOINT VENTURES ONLY) |
|
Contracts (1) |
Deliveries |
Contract |
||||||||
|
Three Months Ended |
Three Months Ended |
Backlog |
||||||||
|
October 31, |
October 31, |
October 31, |
||||||||
|
2021 |
2020 |
% Change |
2021 |
2020 |
% Change |
2021 |
2020 |
% Change |
||
|
Northeast |
||||||||||
|
(unconsolidated joint ventures) |
Home |
14 |
16 |
(12.5)% |
12 |
31 |
(61.3)% |
10 |
18 |
(44.4)% |
|
(excluding KSA JV) |
Dollars |
$15,193 |
$24,384 |
(37.7)% |
$15,503 |
$31,421 |
(50.7)% |
$10,190 |
$24,535 |
(58.5)% |
|
(NJ, PA) |
Avg. Price |
$1,085,214 |
$1,524,000 |
(28.8)% |
$1,291,917 |
$1,013,581 |
27.5% |
$1,019,000 |
$1,363,056 |
(25.2)% |
|
Mid-Atlantic (2) |
||||||||||
|
(unconsolidated joint ventures) |
Home |
50 |
63 |
(20.6)% |
43 |
21 |
104.8% |
116 |
90 |
28.9% |
|
(DE, MD, VA, WV) |
Dollars |
$32,304 |
$33,382 |
(3.2)% |
$25,825 |
$10,378 |
148.8% |
$76,607 |
$46,821 |
63.6% |
|
Avg. Price |
$646,080 |
$529,873 |
21.9% |
$600,581 |
$494,190 |
21.5% |
$660,405 |
$520,233 |
26.9% |
|
|
Midwest |
||||||||||
|
(unconsolidated joint ventures) |
Home |
0 |
2 |
(100.0)% |
0 |
2 |
(100.0)% |
0 |
0 |
0.0% |
|
(IL, OH) |
Dollars |
$0 |
$950 |
(100.0)% |
$0 |
$950 |
(100.0)% |
$0 |
$0 |
0.0% |
|
Avg. Price |
$0 |
$475,000 |
(100.0)% |
$0 |
$475,000 |
(100.0)% |
$0 |
$0 |
0.0% |
|
|
Southeast |
||||||||||
|
(unconsolidated joint ventures) |
Home |
45 |
89 |
(49.4)% |
65 |
69 |
(5.8)% |
211 |
149 |
41.6% |
|
(FL, GA, SC) |
Dollars |
$33,563 |
$49,970 |
(32.8)% |
$33,699 |
$36,307 |
(7.2)% |
$137,771 |
$78,528 |
75.4% |
|
Avg. Price |
$745,844 |
$561,461 |
32.8% |
$518,446 |
$526,188 |
(1.5)% |
$652,943 |
$527,034 |
23.9% |
|
|
Southwest |
||||||||||
|
(unconsolidated joint ventures) |
Home |
0 |
30 |
(100.0)% |
0 |
30 |
(100.0)% |
0 |
46 |
(100.0)% |
|
(AZ, TX) |
Dollars |
$0 |
$18,553 |
(100.0)% |
$0 |
$19,509 |
(100.0)% |
$0 |
$26,803 |
(100.0)% |
|
Avg. Price |
$0 |
$618,433 |
(100.0)% |
$0 |
$650,300 |
(100.0)% |
$0 |
$582,674 |
(100.0)% |
|
|
West |
||||||||||
|
(unconsolidated joint ventures) |
Home |
17 |
25 |
(32.0)% |
16 |
10 |
60.0% |
38 |
23 |
65.2% |
|
(CA) |
Dollars |
$8,001 |
$8,667 |
(7.7)% |
$6,324 |
$3,478 |
81.8% |
$17,051 |
$7,837 |
117.6% |
|
Avg. Price |
$470,647 |
$346,680 |
35.8% |
$395,250 |
$347,800 |
13.6% |
$448,711 |
$340,739 |
31.7% |
|
|
Unconsolidated Joint Ventures (2,3) |
||||||||||
|
(excluding KSA JV) |
Home |
126 |
225 |
(44.0)% |
136 |
163 |
(16.6)% |
375 |
326 |
15.0% |
|
Dollars |
$89,061 |
$135,906 |
(34.5)% |
$81,351 |
$102,043 |
(20.3)% |
$241,619 |
$184,524 |
30.9% |
|
|
Avg. Price |
$706,833 |
$604,027 |
17.0% |
$598,169 |
$626,031 |
(4.5)% |
$644,317 |
$566,025 |
13.8% |
|
|
KSA JV Only |
||||||||||
|
Home |
247 |
326 |
(24.2)% |
0 |
0 |
0.0% |
1,913 |
1,092 |
75.2% |
|
|
Dollars |
$38,731 |
$51,110 |
(24.2)% |
$0 |
$0 |
0.0% |
$300,384 |
$171,673 |
75.0% |
|
|
Avg. Price |
$156,806 |
$156,779 |
0.0% |
$0 |
$0 |
0.0% |
$157,022 |
$157,210 |
(0.1)% |
|
DELIVERIES INCLUDE EXTRAS |
|
Notes: |
|
(1) Contracts are defined as new contracts signed during the period for the purchase of homes, less cancellations of prior contracts. |
|
(2) Reflects the reclassification of 14 homes and $7.4 million of contract backlog as of October 31, 2021 from unconsolidated joint ventures to the consolidated Mid-Atlantic segment. This is related to our acquisition of the remaining assets and liabilities from one of our unconsolidated joint ventures which was dissolved during the fourth quarter of fiscal 2021. (3) Represents home deliveries, home revenues and average prices for our unconsolidated homebuilding joint ventures for the period. We provide this data as a supplement to our consolidated results as an indicator of the volume managed in our unconsolidated homebuilding joint ventures. Our proportionate share of the income or loss of unconsolidated homebuilding and land development joint ventures is reflected as a separate line item in our consolidated financial statements under "Income from unconsolidated joint ventures". |
14
|
HOVNANIAN ENTERPRISES, INC. |
||||||||||
|
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE) |
||||||||||
|
(SEGMENT DATA UNCONSOLIDATED JOINT VENTURES ONLY) |
||||||||||
|
Contracts (1) |
Deliveries |
Contract |
||||||||
|
Year Ended |
Year Ended |
Backlog |
||||||||
|
October 31, |
October 31, |
October 31, |
||||||||
|
2021 |
2020 |
% Change |
2021 |
2020 |
% Change |
2021 |
2020 |
% Change |
||
|
Northeast |
||||||||||
|
(unconsolidated joint ventures) |
Home |
51 |
146 |
(65.1)% |
59 |
204 |
(71.1)% |
10 |
18 |
(44.4)% |
|
(excluding KSA JV) |
Dollars |
$64,511 |
$128,526 |
(49.8)% |
$78,856 |
$167,671 |
(53.0)% |
$10,190 |
$24,535 |
(58.5)% |
|
(NJ, PA) |
Avg. Price |
$1,264,922 |
$880,315 |
43.7% |
$1,336,542 |
$821,917 |
62.6% |
$1,019,000 |
$1,363,056 |
(25.2)% |
|
Mid-Atlantic (2) |
||||||||||
|
(unconsolidated joint ventures) |
Home |
140 |
133 |
5.3% |
151 |
85 |
77.6% |
116 |
90 |
28.9% |
|
(DE, MD, VA, WV) |
Dollars |
$87,482 |
$68,605 |
27.5% |
$82,875 |
$42,759 |
93.8% |
$76,607 |
$46,821 |
63.6% |
|
Avg. Price |
$624,871 |
$515,827 |
21.1% |
$548,841 |
$503,047 |
9.1% |
$660,405 |
$520,233 |
26.9% |
|
|
Midwest |
||||||||||
|
(unconsolidated joint ventures) |
Home |
1 |
13 |
(92.3)% |
1 |
16 |
(93.8)% |
0 |
0 |
0.0% |
|
(IL, OH) |
Dollars |
$409 |
$6,059 |
(93.2)% |
$409 |
$7,344 |
(94.4)% |
$0 |
$0 |
0.0% |
|
Avg. Price |
$409,000 |
$466,077 |
(12.2)% |
$409,000 |
$459,000 |
(10.9)% |
$0 |
$0 |
0.0% |
|
|
Southeast |
||||||||||
|
(unconsolidated joint ventures) |
Home |
381 |
274 |
39.1% |
256 |
248 |
3.2% |
211 |
149 |
41.6% |
|
(FL, GA, SC) |
Dollars |
$216,513 |
$140,517 |
54.1% |
$127,093 |
$122,562 |
3.7% |
$137,771 |
$78,528 |
75.4% |
|
Avg. Price |
$568,276 |
$512,836 |
10.8% |
$496,457 |
$494,202 |
0.5% |
$652,943 |
$527,034 |
23.9% |
|
|
Southwest |
||||||||||
|
(unconsolidated joint ventures) |
Home |
4 |
106 |
(96.2)% |
50 |
105 |
(52.4)% |
0 |
46 |
(100.0)% |
|
(AZ, TX) |
Dollars |
$3,127 |
$65,700 |
(95.2)% |
$29,930 |
$67,215 |
(55.5)% |
$0 |
$26,803 |
(100.0)% |
|
Avg. Price |
$781,750 |
$619,811 |
26.1% |
$598,600 |
$640,143 |
(6.5)% |
$0 |
$582,674 |
(100.0)% |
|
|
West |
||||||||||
|
(unconsolidated joint ventures) |
Home |
87 |
67 |
29.9% |
72 |
70 |
2.9% |
38 |
23 |
65.2% |
|
(CA) |
Dollars |
$35,844 |
$23,163 |
54.7% |
$26,630 |
$25,051 |
6.3% |
$17,051 |
$7,837 |
117.6% |
|
Avg. Price |
$412,000 |
$345,716 |
19.2% |
$369,861 |
$357,871 |
3.4% |
$448,711 |
$340,739 |
31.7% |
|
|
Unconsolidated Joint Ventures (2,3) |
||||||||||
|
(excluding KSA JV) |
Home |
664 |
739 |
(10.1)% |
589 |
728 |
(19.1)% |
375 |
326 |
15.0% |
|
Dollars |
$407,886 |
$432,570 |
(5.7)% |
$345,793 |
$432,602 |
(20.1)% |
$241,619 |
$184,524 |
30.9% |
|
|
Avg. Price |
$614,286 |
$585,345 |
4.9% |
$587,085 |
$594,234 |
(1.2)% |
$644,317 |
$566,025 |
13.8% |
|
|
KSA JV Only |
||||||||||
|
Home |
821 |
890 |
(7.8)% |
0 |
0 |
0.0% |
1,913 |
1,092 |
75.2% |
|
|
Dollars |
$128,711 |
$139,356 |
(7.6)% |
$0 |
$0 |
0.0% |
$300,384 |
$171,673 |
75.0% |
|
|
Avg. Price |
$156,773 |
$156,580 |
0.1% |
$0 |
$0 |
0.0% |
$157,022 |
$157,210 |
(0.1)% |
|
DELIVERIES INCLUDE EXTRAS |
|
Notes: |
|
(1) Contracts are defined as new contracts signed during the period for the purchase of homes, less cancellations of prior contracts. |
|
(2) Reflects the reclassification of 14 homes and $7.4 million of contract backlog as of October 31, 2021 from unconsolidated joint ventures to the consolidated Mid-Atlantic segment. This is related to our acquisition of the remaining assets and liabilities from one of our unconsolidated joint ventures which was dissolved during the fourth quarter of fiscal 2021. (3) Represents home deliveries, home revenues and average prices for our unconsolidated homebuilding joint ventures for the period. We provide this data as a supplement to our consolidated results as an indicator of the volume managed in our unconsolidated homebuilding joint ventures. Our proportionate share of the income or loss of unconsolidated homebuilding and land development joint ventures is reflected as a separate line item in our consolidated financial statements under "Income from unconsolidated joint ventures". |
15