Hovnanian Enterprises Inc 8-K, filed Mar 2, 2021

About this 8-K

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Hovnanian Enterprises Inc (HOV)

8-K 2021-03-02 For: 2021-03-02

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Added on April 10, 2026

Hovnanian Enterprises Inc filed this 8-K on March 2, 2021.

Hovnanian Enterprises, Inc.

January 31, 2021

Statements of consolidated operations

(In thousands, except per share data)

Item 2.02: Financial results
Item 9.01: Financial statements and exhibits

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Title of each class	Trading symbol(s)	Name of each exchange on which registered
Class A Common Stock $0.01 par value per share	HOV	New York Stock Exchange
Preferred Stock Purchase Rights (1)	N/A	New York Stock Exchange
Depositary Shares each representing 1/1,000th of a share of 7.625% Series A Preferred Stock	HOVNP	Nasdaq Global Market

	HOVNANIAN ENTERPRISES, INC.
	(Registrant)

	By:	/s/ Brad G. O’Connor
		Name: Brad G. O’Connor
		Title: Senior Vice President, Treasurer and Chief Accounting Officer


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

	Three Months Ended
	January 31,
	2021	2020
	(Unaudited)
Total revenues	$574,664	$494,056
Costs and expenses (1)	556,995	512,488
Gain on extinguishment of debt	-	9,456
Income from unconsolidated joint ventures	1,916	1,540
Income (loss) before income taxes	19,585	(7,436	)
Income tax provision	626	1,712
Net income (loss)	$18,959	$(9,148	)

Per share data:
Basic:
Net income (loss) per common share	$2.79	$(1.49	)
Weighted average number of common shares outstanding (2)	6,225	6,161
Assuming dilution:
Net income (loss) per common share	$2.75	$(1.49	)
Weighted average number of common shares outstanding (2)	6,303	6,161

Hovnanian Enterprises, Inc.
January 31, 2021
Gross margin
(In thousands)

	Homebuilding Gross Margin
	Three Months Ended
	January 31,
	2021		2020
	(Unaudited)
Sale of homes	$551,365		$479,233
Cost of sales, excluding interest expense and land charges (1)	437,372		396,318
Homebuilding gross margin, before cost of sales interest expense and land charges (2)	113,993		82,915
Cost of sales interest expense, excluding land sales interest expense	16,717		18,136
Homebuilding gross margin, after cost of sales interest expense, before land charges (2)	97,276		64,779
Land charges	1,877		2,828
Homebuilding gross margin	$95,399		$61,951

Homebuilding gross margin percentage	17.3	%	12.9	%
Homebuilding gross margin percentage, before cost of sales interest expense and land charges (2)	20.7	%	17.3	%
Homebuilding gross margin percentage, after cost of sales interest expense, before land charges (2)	17.6	%	13.5	%

	Land Sales Gross Margin
	Three Months Ended
	January 31,
	2021	2020
	(Unaudited)
Land and lot sales	$3,362	$25
Land and lot sales cost of sales, excluding interest and land charges (1)	2,266	37
Land and lot sales gross margin, excluding interest and land charges	1,096	(12	)
Land and lot sales interest	448	-
Land and lot sales gross margin, including interest and excluding land charges	$648	$(12	)

(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 Condensed Consolidated Statements of Operations.

(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.

Hovnanian Enterprises, Inc.
January 31, 2021
Reconciliation of adjusted EBITDA to net income (loss)
(In thousands)

(1) EBIT is a non-GAAP financial measure. The most directly comparable GAAP financial measure is net income (loss). EBIT represents earnings before interest expense and income taxes.

(2) EBITDA is a non-GAAP financial measure. The most directly comparable GAAP financial measure is net income (loss). EBITDA represents earnings before interest expense, income taxes, depreciation and amortization.

(3) Adjusted EBITDA is a non-GAAP financial measure. The most directly comparable GAAP financial measure is net income (loss). Adjusted EBITDA represents earnings before interest expense, income taxes, depreciation, amortization, inventory impairment loss and land option write-offs and gain on extinguishment of debt.

Hovnanian Enterprises, Inc.
January 31, 2021
Interest incurred, expensed and capitalized
(In thousands)

(1) Represents capitalized interest which was included as part of the assets contributed to the joint venture the company entered into during the three months ended January 31, 2020. There was no impact to the Condensed Consolidated Statement of Operations as a result of this transaction.

(2) Capitalized interest amounts are shown gross before allocating any portion of impairments to capitalized interest.

	January 31,		October 31,
	2021		2020
	(Unaudited)		(1)
ASSETS
Homebuilding:
Cash and cash equivalents	$172,098		$262,489
Restricted cash and cash equivalents	12,628		14,731
Inventories:
Sold and unsold homes and lots under development	1,011,893		921,594
Land and land options held for future development or sale	103,276		91,957
Consolidated inventory not owned	165,980		182,224
Total inventories	1,281,149		1,195,775
Investments in and advances to unconsolidated joint ventures	93,509		103,164
Receivables, deposits and notes, net	41,240		33,686
Property, plant and equipment, net	17,812		18,185
Prepaid expenses and other assets	60,667		58,705
Total homebuilding	1,679,103		1,686,735

Financial services	171,596		140,607
Total assets	$1,850,699		$1,827,342

LIABILITIES AND EQUITY
Homebuilding:
Nonrecourse mortgages secured by inventory, net of debt issuance costs	$127,264		$135,122
Accounts payable and other liabilities	328,806		359,274
Customers’ deposits	57,261		48,286
Liabilities from inventory not owned, net of debt issuance costs	119,432		131,204
Senior notes and credit facilities (net of discounts, premiums and debt issuance costs)	1,430,213		1,431,110
Accrued Interest	50,041		35,563
Total homebuilding	2,113,017		2,140,559

Financial services	149,628		119,045
Income taxes payable	4,389		3,832
Total liabilities	2,267,034		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 January 31, 2021 and October 31, 2020	135,299		135,299
Common stock, Class A, $0.01 par value - authorized 16,000,000 shares; issued 5,997,562 shares at January 31, 2021 and 5,990,310 shares at October 31, 2020	60		60
Common stock, Class B, $0.01 par value (convertible to Class A at time of sale) - authorized 2,400,000 shares; issued 652,211 shares at January 31, 2021 and 649,886 shares at October 31, 2020	7		7
Paid in capital - common stock	718,832		718,110
Accumulated deficit	(1,156,086	)	(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 January 31, 2021 and October 31, 2020	(115,360	)	(115,360	)
Total Hovnanian Enterprises, Inc. stockholders’ equity deficit	(417,248	)	(436,929	)
Noncontrolling interest in consolidated joint ventures	913		835
Total equity deficit	(416,335	)	(436,094	)
Total liabilities and equity	$1,850,699		$1,827,342

	Three Months Ended January 31,
	2021	2020
Revenues:
Homebuilding:
Sale of homes	$551,365	$479,233
Land sales and other revenues	3,802	809
Total homebuilding	555,167	480,042
Financial services	19,497	14,014
Total revenues	574,664	494,056

Expenses:
Homebuilding:
Cost of sales, excluding interest	439,638	396,355
Cost of sales interest	17,165	18,136
Inventory impairment loss and land option write-offs	1,877	2,828
Total cost of sales	458,680	417,319
Selling, general and administrative	40,225	40,674
Total homebuilding expenses	498,905	457,993

Financial services	10,354	9,554
Corporate general and administrative	23,483	19,744
Other interest	23,975	25,003
Other operations	278	194
Total expenses	556,995	512,488
Gain on extinguishment of debt	-	9,456
Income from unconsolidated joint ventures	1,916	1,540
Income (loss) before income taxes	19,585	(7,436	)
State and federal income tax provision:
State	626	1,712
Federal	-	-
Total income taxes	626	1,712
Net income (loss)	$18,959	$(9,148	)

Per share data:
Basic:
Net income (loss) per common share	$2.79	$(1.49	)
Weighted-average number of common shares outstanding	6,225	6,161
Assuming dilution:
Net income (loss) per common share	$2.75	$(1.49	)
Weighted-average number of common shares outstanding	6,303	6,161

HOVNANIAN ENTERPRISES, INC.
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE)
(SEGMENT DATA EXCLUDES UNCONSOLIDATED JOINT VENTURES)
(UNAUDITED)

		Contracts (1)			Deliveries			Contract
		Three Months Ended			Three Months Ended			Backlog
		January 31,			January 31,			January 31,
		2021	2020	% Change	2021	2020	% Change	2021	2020	% Change
Northeast
(NJ, PA)	Home	43	63	(31.7)%	53	81	(34.6)%	120	134	(10.4)%
	Dollars	$33,670	$33,003	2.0%	$31,216	$45,264	(31.0)%	$84,566	$74,296	13.8%
	Avg. Price	$783,023	$523,857	49.5%	$588,981	$558,815	5.4%	$704,717	$554,448	27.1%
Mid-Atlantic
(DE, MD, VA, WV)	Home	229	183	25.1%	176	155	13.5%	610	350	74.3%
	Dollars	$144,481	$93,702	54.2%	$92,911	$87,589	6.1%	$342,685	$189,646	80.7%
	Avg. Price	$630,921	$512,033	23.2%	$527,903	$565,090	(6.6)%	$561,779	$541,846	3.7%
Midwest
(IL, OH)	Home	238	187	27.3%	183	159	15.1%	651	478	36.2%
	Dollars	$79,386	$58,276	36.2%	$56,593	$46,392	22.0%	$192,310	$134,566	42.9%
	Avg. Price	$333,555	$311,636	7.0%	$309,251	$291,774	6.0%	$295,407	$281,519	4.9%
Southeast
(FL, GA, SC)	Home	210	155	35.5%	102	97	5.2%	406	305	33.1%
	Dollars	$98,194	$67,158	46.2%	$45,648	$36,680	24.4%	$199,517	$139,505	43.0%
	Avg. Price	$467,590	$433,277	7.9%	$447,529	$378,144	18.3%	$491,421	$457,393	7.4%
Southwest
(AZ, TX)	Home	736	528	39.4%	582	493	18.1%	1,220	698	74.8%
	Dollars	$267,825	$178,433	50.1%	$190,182	$163,703	16.2%	$437,868	$245,627	78.3%
	Avg. Price	$363,893	$337,941	7.7%	$326,773	$332,055	(1.6)%	$358,908	$351,901	2.0%
West
(CA)	Home	322	206	56.3%	289	251	15.1%	788	256	207.8%
	Dollars	$174,114	$90,832	91.7%	$134,815	$99,605	35.3%	$409,186	$115,927	253.0%
	Avg. Price	$540,727	$440,932	22.6%	$466,488	$396,833	17.6%	$519,272	$452,840	14.7%
Consolidated Total
	Home	1,778	1,322	34.5%	1,385	1,236	12.1%	3,795	2,221	70.9%
	Dollars	$797,670	$521,404	53.0%	$551,365	$479,233	15.1%	$1,666,132	$899,567	85.2%
	Avg. Price	$448,633	$394,405	13.7%	$398,097	$387,729	2.7%	$439,033	$405,028	8.4%
Unconsolidated joint ventures (2)
(excluding KSA JV)	Home	184	170	8.2%	119	149	(20.1)%	391	336	16.4%
	Dollars	$101,907	$106,917	(4.7)%	$71,113	$86,349	(17.6)%	$215,318	$205,122	5.0%
	Avg. Price	$553,842	$628,921	(11.9)%	$597,588	$579,523	3.1%	$550,685	$610,482	(9.8)%
Grand Total
	Home	1,962	1,492	31.5%	1,504	1,385	8.6%	4,186	2,557	63.7%
	Dollars	$899,577	$628,321	43.2%	$622,478	$565,582	10.1%	$1,881,450	$1,104,689	70.3%
	Avg. Price	$458,500	$421,127	8.9%	$413,882	$408,362	1.4%	$449,462	$432,025	4.0%

KSA JV Only
	Home	213	95	124.2%	0	0	0.0%	1,305	297	339.4%
	Dollars	$33,373	$14,841	124.9%	$0	$0	0.0%	$205,046	$47,157	334.8%
	Avg. Price	$156,681	$156,220	0.3%	$0	$0	0.0%	$157,123	$158,779	(1.0)%

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) 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”.

HOVNANIAN ENTERPRISES, INC.
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE)
(SEGMENT DATA UNCONSOLIDATED JOINT VENTURES ONLY)
(UNAUDITED)