Hovnanian Enterprises Reports Fiscal 2013 First Quarter Results

Wed Mar 6, 2013 9:15am EST

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RED BANK, N.J., March 6, 2013 (GLOBE NEWSWIRE) -- Hovnanian Enterprises, Inc. (NYSE:HOV), a
leading national homebuilder, reported results for its first quarter ended January 31, 2013.

RESULTS FOR THREE MONTH PERIOD ENDED JANUARY 31, 2013:

* Total revenues were $358.2 million for the fiscal 2013 first quarter up 32.9% compared with
$269.6 million during the fiscal first quarter of 2012.
 
* Deliveries, including unconsolidated joint ventures, were 1,188 homes for the quarter ended
January 31, 2013, up 17.4% compared with 1,012 homes in the 2012 first quarter.
 
* The dollar value of net contracts, including unconsolidated joint ventures, for the three months
ended January 31, 2013 increased 42.1% to $463.2 million compared with $326.0 million in fiscal
first quarter of the prior year.  The number of net contracts increased 24.6% to 1,344 homes in
the first quarter of 2013 from 1,079 homes in the 2012 first quarter.
 
* Contract backlog, as of January 31, 2013, including unconsolidated joint ventures, was $812.1
million for 2,301 homes, which was an increase of 40.4% and 33.0%, respectively, compared to
January 31, 2012.
 
* Homebuilding gross margin percentage, before interest expense included in cost of sales,
increased to 17.0% for the first quarter of fiscal 2013, compared with 16.5% in the first quarter
of the previous year.
 
* Total SG&A was $49.3 million, or 13.8% of total revenues, for the first quarter ended January
31, 2013 compared to $46.0 million, or 17.1% of total revenues, in last year's fiscal first
quarter.
 
* Consolidated pre-tax land-related charges during the fiscal first quarter of 2013 were $0.7
million compared with $3.3 million in the same period of the prior year.
 
* Total interest expense as a percentage of total revenues declined 320 basis points to 9.6%
during the first quarter of fiscal 2013 compared with 12.8% in the previous year's first quarter.
 
* Adjusted EBITDA increased to $16.5 million for the fiscal 2013 first quarter compared to $2.8
million during the same quarter a year ago.
 
* Excluding land-related charges, expenses associated with the debt exchange offer and gain on
extinguishment of debt, the pre-tax loss for the three months ended January 31, 2013 was $20.1
million compared with a pre-tax loss of $34.3 million during the same quarter a year ago.
 
* Net loss was $11.3 million in the fiscal 2013 first quarter, or $0.08 per common share,
including a $9.7 million federal tax benefit, compared with a net loss of $18.3 million, or $0.17
per common share, in the prior year's fiscal first quarter, which included a net benefit of $20.1
million from gains on extinguishment of debt less expenses associated with a debt exchange offer.
 
* The contract cancellation rate, including unconsolidated joint ventures, for the fiscal 2013
first quarter was 17%, compared with 21% during the first quarter of 2012.
 
* During February of 2013, the dollar value of net contracts and the number of net contracts,
including unconsolidated joint ventures, increased 31.3% and 17.8%, respectively, to $219.1
million compared with $166.9 million and to 622 homes from 528 homes in February of 2012.
 
* The valuation allowance was $943.9 million as of January 31, 2013. The valuation allowance is a
non-cash reserve against the tax assets for GAAP purposes. For tax purposes, the tax deductions
associated with the tax assets may be carried forward for 20 years from the date the deductions
were incurred.

LIQUIDITY AND INVENTORY AS OF JANUARY 31, 2013:

* After spending $111.7 million during the first quarter of 2013 on land and land development,
homebuilding cash was $261.6 million as of January 31, 2013, including $28.8 million of restricted
cash required to collateralize letters of credit.
 
* As of January 31, 2013, the land position, including unconsolidated joint ventures, was 29,705
lots, consisting of 11,055 lots under option and 18,650 owned lots.

COMMENTS FROM MANAGEMENT:

"Provided there are no adverse changes in current market conditions, we anticipate our deliveries,
revenues and gross margin will increase in fiscal 2013 compared with fiscal 2012 with the greatest
improvement in these metrics expected to occur during the second half of the fiscal year," said
Ara K. Hovnanian, Chairman of the Board, President and Chief Executive Officer. "In addition, we
are optimistic that the recent increases in net contracts we have reported will continue and could
lead to our best spring selling season in years. Given the size of our contract backlog, the
average gross margin on homes currently in contract backlog and assuming that market conditions
remain stable, we are pleased to project our return to profitability for fiscal 2013.  It has been
a long and difficult cycle, but we finally see the benefits of the many steps we have taken to
prepare ourselves for this inevitable market upturn."

WEBCAST INFORMATION:

Hovnanian Enterprises will webcast its fiscal 2013 first quarter financial results conference call
at 11:00 a.m. E.T. on Wednesday, March 6, 2013. The webcast can be accessed live through the
"Investor Relations" section of Hovnanian Enterprises' Website at

http://www.khov.com
http://www.globenewswire.com/newsroom/ctr?d=10024014&l=7&u=http%3A%2F%2Fwww.khov.com

. For those who are not available to listen to the live webcast, an archive of the broadcast will
be available under the "Audio Archives" section of the Investor Relations page on the Hovnanian
Website at

http://www.khov.com
http://www.globenewswire.com/newsroom/ctr?d=10024014&l=7&u=http%3A%2F%2Fwww.khov.com

. The archive will be available for 12 months.

ABOUT HOVNANIAN ENTERPRISES®, INC.:

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

Additional information on Hovnanian Enterprises, Inc., including a summary investment profile and
the Company's 2012 annual report, can be accessed through the "Investor Relations" section of the
Hovnanian Enterprises' website 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,
expenses associated with debt exchange offer and gain on extinguishment of debt ("Adjusted
EBITDA") are not U.S. generally accepted accounting principles (GAAP) financial measures. The most
directly comparable GAAP financial measure is net loss. The reconciliation of EBIT, EBITDA and
Adjusted EBITDA to net loss is presented in a table attached to this earnings release.

Loss Before Income Taxes Excluding Land-Related Charges, Expenses Associated with the Debt
Exchange Offer and Gain on Extinguishment of Debt is a non-GAAP financial measure. The most
directly comparable GAAP financial measure is Loss Before Income Taxes. The reconciliation of Loss
Before Income Taxes Excluding Land-Related Charges, Expenses Associated with the Debt Exchange
Offer and Gain on Extinguishment of Debt to Loss Before Income Taxes is presented in a table
attached to this earnings release.

FORWARD-LOOKING STATEMENTS

All statements in this press release that are not historical facts should be considered as
"forward-looking statements." Such statements involve known and unknown risks, uncertainties and
other factors that may cause actual results, performance or achievements of the Company to be
materially different from any future results, performance or achievements expressed or implied by
the forward-looking statements. Although we believe that our plans, intentions and expectations
reflected in, or suggested by, such forward looking statements are reasonable, we can give no
assurance that such plans, intentions, or expectations will be achieved. Such risks, uncertainties
and other factors include, but are not limited to, (1) changes in general and local economic and
industry and business conditions and impacts of the sustained homebuilding downturn, (2) adverse
weather and other environmental conditions and natural disasters, (3) changes in market conditions
and seasonality of the Company's business, (4) changes in home prices and sales activity in the
markets where the Company builds homes, (5) government regulation, including regulations
concerning development of land, the home building, sales and customer financing processes, tax
laws, and the environment, (6) fluctuations in interest rates and the availability of mortgage
financing, (7) shortages in, and price fluctuations of, raw materials and labor, (8) the
availability and cost of suitable land and improved lots, (9) levels of competition, (10)
availability of financing to the Company, (11) utility shortages and outages or rate fluctuations,
(12) levels of indebtedness and restrictions on the Company's operations and activities imposed by
the agreements governing the Company's outstanding indebtedness, (13) the Company's sources of
liquidity, (14) changes in credit ratings, (15) availability of net operating loss carryforwards,
(16) operations through joint ventures with third parties, (17) product liability litigation,
warranty claims and claims by mortgage investors, (18) successful identification and integration
of acquisitions, (19) significant influence of the Company's controlling stockholders, (20)
changes in tax laws affecting the after-tax costs of owning a home, (21) geopolitical risks,
terrorist acts and other acts of war, and (22) other factors described in detail in the Company's
Annual Report on Form 10-K for the year ended October 31, 2012. Except as otherwise required by
applicable securities laws, we undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future events, changed
circumstances or any other reason.

(Financial Tables Follow)

 Hovnanian Enterprises, Inc.                                                                                                                                                                                         
 January 31, 2013                                                                                                                                                                                                    
 Statements of Consolidated Operations                                                                                                                                                                               
 (Dollars in Thousands, Except Per Share Data)                                                                                                                                                                       
                                                                                                                                                                                             Three Months Ended       
                                                                                                                                                                                             January 31,              
                                                                                                                                                                                             2013        2012        
                                                                                                                                                                                             (Unaudited)              
 Total Revenues                                                                                                                                                                              $358,211    $269,599    
 Costs and Expenses (a)                                                                                                                                                                      381,302     311,836     
 Gain on Extinguishment of Debt                                                                                                                                                              --          24,698      
 Income (Loss) from Unconsolidated Joint Ventures                                                                                                                                            2,289       (23)        
 Loss Before Income Taxes                                                                                                                                                                    (20,802)    (17,562)    
 Income Tax (Benefit) Provision                                                                                                                                                              (9,494)     703         
 Net Loss                                                                                                                                                                                    $(11,308)   $(18,265)   
                                                                                                                                                                                                                     
 Per Share Data:                                                                                                                                                                                                     
 Basic:                                                                                                                                                                                                              
 Loss Per Common Share                                                                                                                                                                       $(0.08)     $(0.17)     
 Weighted Average Number of Common Shares Outstanding (b)                                                                                                                                    141,725     108,735     
 Assuming Dilution:                                                                                                                                                                                                  
 Loss Per Common Share                                                                                                                                                                       $(0.08)     $(0.17)     
 Weighted Average Number of Common Shares Outstanding (b)                                                                                                                                    141,725     108,735     
                                                                                                                                                                                                                     
 (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.                                                                                                                                                                                         
 January 31, 2013                                                                                                                                                                                                    
 Reconciliation of Loss Before Income Taxes Excluding Land-Related Charges, Expenses Associated with the Debt Exchange Offer and Gain on Extinguishment of Debt to Loss Before Income Taxes                          
 (Dollars in Thousands)                                                                                                                                                                                              
                                                                                                                                                                                             Three Months Ended       
                                                                                                                                                                                             January 31,              
                                                                                                                                                                                             2013        2012        
                                                                                                                                                                                             (Unaudited)              
 Loss Before Income Taxes                                                                                                                                                                    $(20,802)   $(17,562)   
 Inventory Impairment Loss and Land Option Write-Offs                                                                                                                                        665         3,325       
 Expenses Associated with the Debt Exchange Offer                                                                                                                                            --          4,594       
 Gain on Extinguishment of Debt                                                                                                                                                              --          (24,698)    
 Loss Before Income Taxes Excluding Land-Related Charges, Expenses Associated with the Debt Exchange Offer and Gain on Extinguishment of Debt (a)                                            $(20,137)   $(34,341)   
                                                                                                                                                                                                                     
 (a) Loss Before Income Taxes Excluding Land-Related Charges, Expenses Associated with the Debt Exchange Offer and Gain on Extinguishment of Debt is a non-GAAP financial measure. The most directly comparable GAAP financial measure is Loss Before Income Taxes. 


                                                                              
 Hovnanian Enterprises, Inc.                                                  
 January 31, 2013                                                             
 Gross Margin                                                                 
 (Dollars in Thousands)                                                       
                                                Homebuilding Gross Margin      
                                                Three Months Ended             
                                                January 31,                    
                                                2013           2012           
                                                (Unaudited)                    
 Sale of Homes                                  $334,281       $252,330       
 Cost of Sales, Excluding Interest (a)          277,558        210,573        
 Homebuilding Gross Margin, Excluding Interest  56,723         41,757         
 Homebuilding Cost of Sales Interest            10,160         10,936         
 Homebuilding Gross Margin, Including Interest  $46,563        $30,821        
                                                                              
 Gross Margin Percentage, Excluding Interest    17.0%          16.5%          
 Gross Margin Percentage, Including Interest    13.9%          12.2%          
                                                                              
                                                Land Sales Gross Margin        
                                                Three Months Ended             
                                                January 31,                    
                                                2013           2012           
                                                (Unaudited)                    
 Land Sales                                     $11,827        $8,604         
 Cost of Sales, Excluding Interest (a)          11,197         6,854          
 Land Sales Gross Margin, Excluding Interest    630            1,750          
 Land Sales Interest                            120            1,540          
 Land Sales Gross Margin, Including Interest    $510           $210           
                                                                              
 (a) Does not include cost associated with walking away from land options or inventory impairment losses which are recorded as Inventory impairment loss and land option write-offs in the Condensed Consolidated Statements of Operations. 
                                                                              


 Hovnanian Enterprises, Inc.                                                   
 January 31, 2013                                                              
 Reconciliation of Adjusted EBITDA to Net Loss                                 
 (Dollars in Thousands)                                                        
                                                       Three Months Ended       
                                                       January 31,              
                                                       2013        2012        
                                                       (Unaudited)              
 Net Loss                                              $ (11,308)  $ (18,265)  
 Income Tax (Benefit) Provision                        (9,494)     703         
 Interest Expense                                      34,280      34,471      
 EBIT (a)                                              13,478      16,909      
 Depreciation                                          1,462       1,658       
 Amortization of Debt Costs                            904         963         
 EBITDA (b)                                            15,844      19,530      
 Inventory Impairment Loss and Land Option Write-offs  665         3,325       
 Expenses Associated with Debt Exchange Offer          --          4,594       
 Gain on Extinguishment of Debt                        --          (24,698)    
 Adjusted EBITDA (c)                                   $16,509     $2,751      
                                                                               
 Interest Incurred                                     $32,653     $36,345     
                                                                               
 Adjusted EBITDA to Interest Incurred                  0.51        0.08        
                                                                               
                                                                               
 (a) EBIT is a non-GAAP financial measure. The most directly comparable GAAP financial measure is net loss. EBIT represents earnings before interest expense and income taxes. 
 (b) EBITDA is a non-GAAP financial measure. The most directly comparable GAAP financial measure is net loss. EBITDA represents earnings before interest expense, income taxes, depreciation and amortization. 
 (c) Adjusted EBITDA is a non-GAAP financial measure. The most directly comparable GAAP financial measure is net loss. Adjusted EBITDA represents earnings before interest expense, income taxes, depreciation, amortization, inventory impairment loss and land option write-offs, expenses associated with debt exchange offer, and gain on extinguishment of debt. 
                                                                               
                                                                               
 Hovnanian Enterprises, Inc.                                                   
 January 31, 2013                                                              
 Interest Incurred, Expensed and Capitalized                                   
 (Dollars in Thousands)                                                        
                                                       Three Months Ended       
                                                       January 31,              
                                                       2013        2012        
                                                       (Unaudited)              
 Interest Capitalized at Beginning of Period           $116,056    $121,441    
 Plus Interest Incurred                                32,653      36,345      
 Less Interest Expensed                                34,280      34,471      
 Interest Capitalized at End of Period (a)             $114,429    $123,315    
                                                                               
 (a) The Company incurred significant inventory impairments in recent years, which are determined based on total inventory including capitalized interest. However, the capitalized interest amounts are shown gross before allocating any portion of impairments to capitalized interest. 
                                                                               


 HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES                                               
 CONDENSED CONSOLIDATED BALANCE SHEETS                                                      
 (In Thousands)                                                                             
                                                                                          
                                                                January 31,  October 31,  
                                                                2013         2012         
                                                                (Unaudited)  (1)          
 ASSETS                                                                                   
                                                                                          
 Homebuilding:                                                                            
 Cash                                                           $232,793     $258,323     
 Restricted cash and cash equivalents                           39,580       41,732       
 Inventories:                                                                             
 Sold and unsold homes and lots under development               689,539      671,851      
 Land and land options held for future development or sale      225,455      218,996      
 Consolidated inventory not owned - other options               90,894       90,619       
 Total inventories                                              1,005,888    981,466      
 Investments in and advances to unconsolidated joint ventures   53,446       61,083       
 Receivables, deposits, and notes                               47,338       61,794       
 Property, plant, and equipment - net                           47,781       48,524       
 Prepaid expenses and other assets                              58,689       66,694       
 Total homebuilding                                             1,485,515    1,519,616    
                                                                                          
 Financial services:                                                                      
 Cash                                                           5,360        14,909       
 Restricted cash and cash equivalents                           11,915       22,470       
 Mortgage loans held for sale                                   72,424       117,024      
 Other assets                                                   2,475        10,231       
 Total financial services                                       92,174       164,634      
 Income taxes receivable - including net deferred tax benefits  2,621        --           
 Total assets                                                   $1,580,310   $1,684,250   
                                                                                          
 (1) Derived from the audited balance sheet as of October 31, 2012.                         
                                                                                          


 HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES                                                                                                                                                                                                                                                                             
 CONDENSED CONSOLIDATED BALANCE SHEETS                                                                                                                                                                                                                                                                                    
 (In Thousands Except Share Amounts)                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                              January 31,  October 31,  
                                                                                                                                                                                                                                                                                              2013         2012         
                                                                                                                                                                                                                                                                                              (Unaudited)  (1)          
 LIABILITIES AND EQUITY                                                                                                                                                                                                                                                                                                 
                                                                                                                                                                                                                                                                                                                        
 Homebuilding:                                                                                                                                                                                                                                                                                                          
 Nonrecourse mortgages                                                                                                                                                                                                                                                                        $44,427      $38,302      
 Accounts payable and other liabilities                                                                                                                                                                                                                                                       261,478      296,510      
 Customers' deposits                                                                                                                                                                                                                                                                          28,895       23,846       
 Nonrecourse mortgages secured by operating properties                                                                                                                                                                                                                                        18,522       18,775       
 Liabilities from inventory not owned                                                                                                                                                                                                                                                         78,213       77,791       
 Total homebuilding                                                                                                                                                                                                                                                                           431,535      455,224      
                                                                                                                                                                                                                                                                                                                        
 Financial services:                                                                                                                                                                                                                                                                                                    
 Accounts payable and other liabilities                                                                                                                                                                                                                                                       20,822       37,609       
 Mortgage warehouse line of credit                                                                                                                                                                                                                                                            52,038       107,485      
 Total financial services                                                                                                                                                                                                                                                                     72,860       145,094      
                                                                                                                                                                                                                                                                                                                        
 Notes payable:                                                                                                                                                                                                                                                                                                         
 Senior secured notes                                                                                                                                                                                                                                                                         977,674      977,369      
 Senior notes                                                                                                                                                                                                                                                                                 458,869      458,736      
 Senior amortizing notes                                                                                                                                                                                                                                                                      23,149       23,149       
 Senior exchangeable notes                                                                                                                                                                                                                                                                    63,887       76,851       
 TEU senior subordinated amortizing notes                                                                                                                                                                                                                                                     5,150        6,091        
 Accrued interest                                                                                                                                                                                                                                                                             28,419       20,199       
 Total notes payable                                                                                                                                                                                                                                                                          1,557,148    1,562,395    
 Income taxes payable                                                                                                                                                                                                                                                                         --           6,882        
 Total liabilities                                                                                                                                                                                                                                                                            2,061,543    2,169,595    
                                                                                                                                                                                                                                                                                                                        
 Equity:                                                                                                                                                                                                                                                                                                                
 Hovnanian Enterprises, Inc. stockholders' equity deficit:                                                                                                                                                                                                                                                              
 Preferred stock, $.01 par value - authorized 100,000 shares; issued 5,600 shares with a liquidation preference of $140,000 at January 31, 2013 and at October 31, 2012                                                                                                                       135,299      135,299      
 Common stock, Class A, $.01 par value - authorized 200,000,000 shares; issued 136,239,926 shares  at January 31, 2013 and 130,055,304 shares at October 31, 2012 (including 11,760,763 shares at January 31, 2013 and October 31, 2012 held in Treasury)                                     1,362        1,300        
 Common stock, Class B, $.01 par value (convertible to Class A at time of sale) - authorized 30,000,000 shares; issued 15,349,899 shares at January 31, 2013 and 15,350,101 shares at  October 31, 2012 (including 691,748 shares at January 31, 2013 and October 31, 2012 held in Treasury)  153          154          
 Paid in capital - common stock                                                                                                                                                                                                                                                               684,091      668,735      
 Accumulated deficit                                                                                                                                                                                                                                                                          (1,187,011)  (1,175,703)  
 Treasury stock - at cost                                                                                                                                                                                                                                                                     (115,360)    (115,360)    
 Total Hovnanian Enterprises, Inc. stockholders' equity deficit                                                                                                                                                                                                                               (481,466)    (485,575)    
 Noncontrolling interest in consolidated joint ventures                                                                                                                                                                                                                                       233          230          
 Total equity deficit                                                                                                                                                                                                                                                                         (481,233)    (485,345)    
 Total liabilities and equity                                                                                                                                                                                                                                                                 $1,580,310   $1,684,250   
                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                        
 (1) Derived from the audited balance sheet as of October 31, 2012.                                                                                                                                                                                                                                                       
                                                                                                                                                                                                                                                                                                                          


 HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES                                                
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                                             
 (In Thousands Except Per Share Data)                                                        
 (Unaudited)                                                                                 
                                                                                           
                                                       Three Months Ended January 31,       
                                                       2013              2012              
 Revenues:                                                                                 
 Homebuilding:                                                                             
 Sale of homes                                         $334,281          $252,330          
 Land sales and other revenues                         12,271            10,579            
 Total homebuilding                                    346,552           262,909           
 Financial services                                    11,659            6,690             
 Total revenues                                        358,211           269,599           
                                                                                           
 Expenses:                                                                                 
 Homebuilding:                                                                             
 Cost of sales, excluding interest                     288,755           217,427           
 Cost of sales interest                                10,280            12,476            
 Inventory impairment loss and land option write-offs  665               3,325             
 Total cost of sales                                   299,700           233,228           
 Selling, general and administrative                   36,771            33,254            
 Total homebuilding expenses                           336,471           266,482           
                                                                                           
 Financial services                                    7,428             5,177             
 Corporate general and administrative                  12,503            12,784            
 Other interest                                        24,000            21,995            
 Other operations                                      900               5,398             
 Total expenses                                        381,302           311,836           
 Gain on extinguishment of debt                        --                24,698            
 Income (loss) from unconsolidated joint ventures      2,289             (23)              
 Loss before income taxes                              (20,802)          (17,562)          
 State and federal income tax (benefit) provision:                                         
 State                                                 233               633               
 Federal                                               (9,727)           70                
 Total income taxes                                    (9,494)           703               
 Net loss                                              $(11,308)         $(18,265)         
                                                                                           
 Per share data:                                                                           
 Basic:                                                                                    
 Loss per common share                                 $(0.08)           $(0.17)           
 Weighted-average number of common shares outstanding  141,725           108,735           
 Assuming dilution:                                                                        
 Loss per common share                                 $(0.08)           $(0.17)           
 Weighted-average number of common shares outstanding  141,725           108,735           
                                                                                           


 HOVNANIAN ENTERPRISES, INC.                                                                                                                                         
 (DOLLARS IN THOUSANDS EXCEPT AVG. PRICE)                                                         Communities Under Development                                          
 (UNAUDITED)                                                                                     Three Months - January 31, 2013                                          
                                                           Net Contracts (1)                     Deliveries                               Contract                        
                                                           Three Months Ending                   Three Months Ending                      Backlog                         
                                                           January 31,                           January 31,                              January 31,                     
                                                           2013         2012         % Change  2013         2012         % Change     2013      2012      % Change  
 Northeast                                                                                                                                                          
 (includes unconsolidated joint ventures)  Home            123          109          12.8%     145          126          15.1%        272       349       (22.1)%   
                                           Dollars         $60,751      $50,983      19.2%     $72,361      $59,525      21.6%        $129,344  $158,211  (18.2)%   
 (NJ, PA)                                  Avg. Price      $493,910     $467,737     5.6%      $499,040     $472,418     5.6%         $475,529  $453,325  4.9%      
 Mid-Atlantic                                                                                                                                                       
 (includes unconsolidated joint ventures)  Home            214          168          27.4%     171          145          17.9%        409       393       4.1%      
                                           Dollars         $99,031      $66,226      49.5%     $76,443      $59,041      29.5%        $185,787  $161,242  15.2%     
 (DE, MD, VA, WV)                          Avg. Price      $462,762     $394,203     17.4%     $447,038     $407,181     9.8%         $454,247  $410,284  10.7%     
 Midwest                                                                                                                                                            
 (includes unconsolidated joint ventures)  Home            184          168          9.5%      166          100          66.0%        517       368       40.5%     
                                           Dollars         $48,820      $34,799      40.3%     $40,140      $23,374      71.7%        $124,598  $75,868   64.2%     
 (IL, MN, OH)                              Avg. Price      $265,326     $207,137     28.1%     $241,808     $233,741     3.5%         $241,002  $206,162  16.9%     
 Southeast                                                                                                                                                          
 (includes unconsolidated joint ventures)  Home            142          126          12.7%     125          110          13.6%        300       184       63.0%     
                                           Dollars         $40,999      $30,879      32.8%     $33,886      $27,657      22.5%        $86,452   $46,798   84.7%     
 (FL, GA, NC, SC)                          Avg. Price      $288,723     $245,069     17.8%     $271,090     $251,427     7.8%         $288,175  $254,338  13.3%     
 Southwest                                                                                                                                                          
 (includes unconsolidated joint ventures)  Home            559          398          40.5%     448          388          15.5%        617       341       80.9%     
                                           Dollars         $159,269     $103,860     53.3%     $120,728     $91,153      32.4%        $199,381  $99,650   100.1%    
 (AZ, TX)                                  Avg. Price      $284,918     $260,954     9.2%      $269,483     $234,930     14.7%        $323,146  $292,225  10.6%     
 West                                                                                                                                                               
 (includes unconsolidated joint ventures)  Home            122          110          10.9%     133          143          (7.0)%       186       95        95.8%     
                                           Dollars         $54,294      $39,230      38.4%     $49,716      $43,980      13.0%        $86,551   $36,670   136.0%    
 (CA)                                      Avg. Price      $445,035     $356,632     24.8%     $373,806     $307,552     21.5%        $465,328  $385,995  20.6%     
 Grand Total                                                                                                                                                        
                                           Home            1,344        1,079        24.6%     1,188        1,012        17.4%        2,301     1,730     33.0%     
                                           Dollars         $463,164     $325,977     42.1%     $393,274     $304,730     29.1%        $812,113  $578,439  40.4%     
                                           Avg. Price      $344,616     $302,111     14.1%     $331,039     $301,116     9.9%         $352,939  $334,358  5.6%      
 Consolidated Total                                                                                                                                                 
                                           Home            1,195        940          27.1%     1,062        889          19.5%        2,022     1,438     40.6%     
                                           Dollars         $396,946     $264,765     49.9%     $334,281     $252,330     32.5%        $694,983  $457,369  52.0%     
                                           Avg. Price      $332,172     $281,665     17.9%     $314,765     $283,836     10.9%        $343,710  $318,059  8.1%      
 Unconsolidated Joint Ventures                                                                                                                                      
                                           Home            149          139          7.2%      126          123          2.4%         279       292       (4.5)%    
                                           Dollars         $66,218      $61,212      8.2%      $58,993      $52,400      12.6%        $117,130  $121,070  (3.3)%    
                                           Avg. Price      $444,419     $440,372     0.9%      $468,201     $426,013     9.9%         $419,822  $414,625  1.3%      
                                                                                                                                                                    
 DELIVERIES INCLUDE EXTRAS                                                                                                                                                    
 Notes:                                                                                                                                                             
 (1) Net contracts are defined as new contracts signed during the period for the purchase of homes, less cancellations of prior contracts.                                    


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

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