updated 12/21/2010 4:47:20 PM ET 2010-12-21T21:47:20

RED BANK, N.J., Dec. 21, 2010 (GLOBE NEWSWIRE) -- Hovnanian Enterprises, Inc. (NYSE:HOV), a leading national homebuilder, reported results for its fourth quarter and fiscal year ended October 31, 2010.

Results for the Three and Twelve Month Periods Ended October 31, 2010:

  • Total revenues were $353.0 million for the fourth quarter of fiscal 2010 compared with $437.4 million in the same quarter a year ago. For fiscal 2010, total revenues were $1.4 billion compared with $1.6 billion in the prior year.
     
  • Homebuilding gross margin percentage, before interest expense included in cost of sales, increased year-over-year for the seventh consecutive quarter to 16.9% during the fourth quarter of 2010, compared to 13.2% in last year's fourth quarter. For fiscal 2010, the homebuilding gross margin percentage, before interest expense included in cost of sales, increased year-over-year to 16.8% compared to 9.2% for fiscal 2009.
     
  • Consolidated pre-tax land-related charges for the fourth quarter of fiscal 2010 were $80.6 million, compared with $138.0 million in the fiscal 2009 fourth quarter. 78% of the land-related charges in the fourth quarter were related to five communities. Four of the communities are in New Jersey, two of which where we now intended to sell the remaining land in bulk. For the other community, in Maryland, we decided not to develop and wrote off our investment. For the full year, consolidated pre-tax land related charges totaled $135.7 million compared with $659.5 million in fiscal 2009.
     
  • Excluding land-related charges and gain from extinguishment of debt, the pre-tax loss for the fourth quarter of 2010 was $51.9 million compared with $84.8 million during the same period of the prior year. For the full year, the pre-tax loss excluding land related charges and gain from extinguishment of debt was $184.6 million compared with $379.1 million last year.
     
  • The total pre-tax loss in the fourth quarter of fiscal 2010 was $132.5 million compared to $248.8 million in the fourth quarter of the prior year. For fiscal 2010, the total pre-tax loss was $295.3 million compared with $672.0 million in the previous year.
     
  • For the fourth quarter ended October 31, 2010, the after-tax net loss was $132.1 million, or $1.68 per common share, compared with a net loss of $250.8 million, or $3.21 per common share, in the fourth quarter of fiscal 2009. The after-tax net income for fiscal 2010 was $2.6 million, or $0.03 per fully diluted common share, compared with a net loss of $716.7 million, or $9.16 per common share, in the prior year. As a result of tax legislation changes, the after-tax net income for fiscal 2010 included a federal income tax benefit of $291.3 million.
     
  • Net contracts for the fourth quarter of fiscal 2010, excluding unconsolidated joint ventures, decreased 13% to 1,078 homes compared with last year's fourth quarter. For fiscal 2010, net contracts, excluding unconsolidated joint ventures, decreased 20% to 4,206 compared with 5,227 net contracts in the prior year. 
     
  • At October 31, 2010, there were 192 active selling communities, excluding unconsolidated joint ventures, compared with 179 active selling communities at October 31, 2009. This is the first year-over-year increase in active selling communities in 11 quarters.
     
  • Deliveries, excluding unconsolidated joint ventures, were 1,204 homes for the fourth quarter of fiscal 2010, compared with 1,444 homes in the prior year's fourth quarter. For the year ended October 31, 2010, deliveries, excluding unconsolidated joint ventures, declined 12% to 4,729 compared with 5,362 home deliveries in the prior year.
     
  • The contract cancellation rate, excluding unconsolidated joint ventures, for the fourth quarter of fiscal 2010 was 24%, unchanged versus the fiscal 2009 fourth quarter.
     
  • During the fourth quarter, the tax asset valuation allowance charge to earnings was $64.4 million. The valuation allowance was $811.0 million as of October 31, 2010. 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.

Cash and Inventory as of October 31, 2010:

  • As of October 31, 2010, homebuilding cash was $451.4 million, including restricted cash required to collateralize letters of credit.
     
  • Cash flow during the fourth quarter of fiscal 2010 was negative $35.6 million, after spending approximately $100 million of cash to purchase approximately 1,200 lots and to develop land across the Company.
     
  • As of October 31, 2010, the consolidated land position was 32,055 lots, consisting of 14,379 lots under option and 17,676 owned lots.
     
  • During the fourth quarter, approximately 960 of the lots purchased were within 73 newly identified communities (defined as communities controlled subsequent to January 31, 2009).
     
  • Approximately 3,300 lots were put under option in 37 newly identified communities during the fourth quarter. 
     
  • In fiscal 2010, approximately 10,800 lots were purchased or optioned within 169 communities identified during fiscal 2010.

Other Key Operating Data:

  • Contract backlog, as of October 31, 2010, excluding unconsolidated joint ventures, was 1,249 homes with a sales value of $370.8 million, a decrease of 30% and 34%, respectively, compared to October 31, 2009.
     
  • During the fourth quarter of fiscal 2010, home deliveries through unconsolidated joint ventures were 83 homes, compared with 82 homes in the fiscal 2009 fourth quarter. For fiscal 2010, 280 homes were delivered through unconsolidated joint ventures, compared with 297 homes in the prior year.

Comments from Management

"In spite of strong long-term demographics, the current housing market remains quite challenging. The combination of a lackluster job market and high foreclosure activity is clearly having a dampening effect on the housing market. The only silver lining is that we continue to find land acquisition opportunities which we believe will yield appropriate returns at today's home prices and sales paces," commented Ara K. Hovnanian, Chairman of the Board, President and Chief Executive Officer. "Even without a general housing recovery, we are optimistic that as the percentage of deliveries from newly identified communities increases, our overall performance should continue to improve."

Webcast Information:

Hovnanian Enterprises will webcast its fiscal 2010 fourth quarter financial results conference call at 11:00 a.m. E.T. on Wednesday, December 22, 2010. 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 "Audio Archives" section of the Investor Relations page on the Hovnanian Website at http://www.khov.com. The archive will be available for 12 months.

About Hovnanian Enterprises®, Inc.:

Hovnanian Enterprises, Inc., founded in 1959 by Kevork S. Hovnanian, is headquartered in Red Bank, New Jersey. The Company is one of the nation's largest homebuilders with operations in Arizona, California, Delaware, Florida, Georgia, Illinois, Kentucky, Maryland, Minnesota, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia and West Virginia. The Company's homes are marketed and sold under the trade names K. Hovnanian® 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 2009 annual report, can be accessed through the "Investor Relations" section of the Hovnanian Enterprises' website at http://www.khov.com . To be added to Hovnanian's investor e-mail or fax lists, please send an e-mail to IR@khov.com or sign up at http://www.khov.com .

The Hovnanian Enterprises, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7499

Non-GAAP Financial Measures:

Consolidated earnings before interest expense, income taxes, depreciation and amortization ("EBITDA") and before inventory impairment loss and land option write-offs 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 (loss) income. The reconciliation of EBITDA and Adjusted EBITDA to net (loss) income is presented in a table attached to this earnings release.

Cash flow is a non-GAAP financial measure. The most directly comparable GAAP financial measure is Net Cash provided by (or used in) Operating Activities. The Company uses cash flow to mean the amount of Net Cash provided by (or used in) Operating Activities for the period, as reported on the Consolidated Statement of Cash Flows, excluding changes in mortgage notes receivable at the mortgage company, plus (or minus) the amount of Net Cash provided by (or used in) Investing Activities. For the fourth quarter of 2010, cash flow was negative $35.6 million, which was derived from $59.4 million from net cash used in operating activities plus the change in mortgage notes receivable of $23.7 million plus $0.1 million of net cash provided by investing activities.

Loss 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 Loss Before Income Taxes. The reconciliation of Loss Before Income Taxes Excluding Land-Related Charges and Loss (Gain) on Extinguishment of Debt to Loss Before Income Taxes is presented in a table attached to this earnings release.

Note: All statements in this Press Release that are not historical facts should be considered as "forward-looking statements" within the meaning of the "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 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, and the environment, (6) fluctuations in interest rates and the availability of mortgage financing, (7) shortages in, and price fluctuations of, raw materials and labor, (8) the availability and cost of suitable land and improved lots, (9) levels of competition, (10) availability of financing to the Company, (11) utility shortages and outages or rate fluctuations, (12) levels of indebtedness and restrictions on the Company's operations and activities imposed by the agreements governing the Company's outstanding indebtedness, (13) operations through joint ventures with third parties, (14) product liability litigation and warranty claims, (15) successful identification and integration of acquisitions, (16) significant influence of the Company's controlling stockholders, (17) geopolitical risks, terrorist acts and other acts of war, (18) the Company's sources of liquidity, (19) changes in credit ratings, (20) availability of net operating loss carryforwards and (21) other factors described in detail in the Company's Form 10-K for the year ended October 31, 2009.

Hovnanian Enterprises, Inc.
October 31, 2010
Statements of Consolidated Operations
(Dollars in Thousands, Except Per Share Data)
         
  Three Months Ended Twelve Months Ended
  October 31, October 31,
  2010 2009 2010 2009
  (Unaudited) (Unaudited)
Total Revenues $353,012 $437,393 $1,371,842 $1,596,290
Costs and Expenses (a) 487,313 660,758 1,693,127 2,632,453
(Loss) Gain on Extinguishment of Debt  --  (17,619) 25,047 410,185
Income (Loss) from Unconsolidated Joint Ventures 1,809 (7,821) 956 (46,041)
Loss Before Income Taxes (132,492) (248,805) (295,282) (672,019)
Income Tax (Benefit) Provision  (379) 1,964 (297,870) 44,693
Net (Loss) Income $(132,113) $(250,769) $2,588 $(716,712)
         
Per Share Data:        
Basic:        
(Loss) Income Per Common Share  $(1.68) $(3.21) $0.03 $(9.16)
Weighted Average Number of Common Shares Outstanding (b) 78,779 78,067 78,691 78,238
Assuming Dilution:        
(Loss) Income Per Common Share  $(1.68) $(3.21) $0.03 $(9.16)
Weighted Average Number of Common Shares Outstanding (b) 78,779 78,067 79,683 78,238
         
(a) Includes inventory impairment loss and land option write-offs.
(b) For periods with a net loss, basic shares are used in accordance with GAAP rules.
         
 
Hovnanian Enterprises, Inc.
October 31, 2010
         
Reconciliation of Loss Before Income Taxes Excluding Land-Related        
Charges and Loss (Gain) on Extinguishment of Debt to Loss Before Income Taxes        
(Dollars in Thousands)        
  Three Months Ended Twelve Months Ended
  October 31, October 31,
  2010 2009 2010 2009
  (Unaudited) (Unaudited)
Loss Before Income Taxes $(132,492) $(248,805) $(295,282) $(672,019)
Inventory Impairment Loss and Land Option Write-Offs 80,588 137,970 135,699 659,475
Unconsolidated Joint Venture Investment and Land-Related Charges  --  8,414  --  43,611
Loss (Gain) on Extinguishment of Debt  --  17,619 (25,047) (410,185)
Loss Before Income Taxes Excluding Land-Related Charges and Loss (Gain) on Extinguishment of Debt(a) $(51,904) $(84,802) $(184,630) $(379,118)
         
(a) Loss 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 Loss Before Income Taxes.
         
Hovnanian Enterprises, Inc.        
October 31, 2010        
Gross Margin        
(Dollars in Thousands)        
  Homebuilding Gross Margin Homebuilding Gross Margin
  Three Months Ended Twelve Months Ended
  October 31, October 31,
  2010 2009 2010 2009
  (Unaudited) (Unaudited)
     
Sale of Homes $339,576 $414,578 $1,327,499 $1,522,469
Cost of Sales, Excluding Interest (a)  282,096  359,738  1,103,872  1,382,234
Homebuilding Gross Margin, Excluding Interest 57,480 54,840 223,627  140,235
Homebuilding Cost of Sales Interest 19,805 29,580 79,095 97,332
Homebuilding Gross Margin, Including Interest $37,675 $25,260 $144,532 $42,903
         
Gross Margin Percentage, Excluding Interest 16.9% 13.2% 16.8% 9.2%
Gross Margin Percentage, Including Interest 11.1% 6.1% 10.9% 2.8%
         
  Land Sales Gross Margin Land Sales Gross Margin
  Three Months Ended Twelve Months Ended
  October 31, October 31,
  2010 2009 2010 2009
  (Unaudited) (Unaudited)
     
Land Sales $2,999 $12,864 $6,820 $27,250
Cost of Sales, Excluding Interest (a) (843) 8,656  177 15,853
Land Sales Gross Margin, Excluding Interest 3,842  4,208 6,643 11,397
Land Sales Interest  3,858  2,444  5,345  8,482
Land Sales Gross Margin, Including Interest $(16) $1,764 $1,298 $2,915
         
(a) Does not include cost associated with walking away from land options or inventory impairment losses which are recorded as Inventory impairment loss and land option write-offs in the Consolidated Statements of Operations.
 
Hovnanian Enterprises, Inc.
October 31, 2010
Reconciliation of Adjusted EBITDA to Net (Loss) Income
(Dollars in Thousands)
  Three Months Ended Twelve Months Ended
  October 31, October 31,
  2010 2009 2010 2009
  (Unaudited) (Unaudited)
         
Net (Loss) Income  $(132,113) $(250,769) $2,588 $(716,712)
Income Tax (Benefit) Provision  (379) 1,964 (297,870) 44,693
Interest Expense 49,948 59,983 182,359 200,469
EBIT (a) (82,544) (188,822) (112,923) (471,550)
Depreciation 3,487 5,413 12,576 18,527
Amortization of Debt Costs 844 1,117 3,310 5,976
EBITDA (b) (78,213) (182,292) (97,037) (447,047)
Inventory Impairment Loss and Land Option Write-offs 80,588 137,970 135,699 659,475
Loss (Gain) on Extinguishment of Debt --  17,619 (25,047) (410,185)
Adjusted EBITDA (c) $2,375 $(26,703) $13,615 $(197,757)
         
Interest Incurred $37,858 $49,660 $154,307 $194,702
         
Adjusted EBITDA to Interest Incurred 0.06 (0.54) 0.09 (1.02)
         
(a) EBIT is a non-GAAP financial measure. The most directly comparable GAAP financial measure is net (loss) income. EBIT represents earnings before interest expense and income taxes.
(b) EBITDA is a non-GAAP financial measure. The most directly comparable GAAP financial measure is net (loss) income. EBITDA represents earnings before interest expense, income taxes, depreciation and amortization.
(c) Adjusted EBITDA is a non-GAAP financial measure. The most directly comparable GAAP financial measure is net (loss) income. Adjusted EBITDA represents earnings before interest expense, income taxes, depreciation, amortization, inventory impairment loss and land option write-offs, and loss (gain) on extinguishment of debt.
 
Hovnanian Enterprises, Inc.
October 31, 2010
Interest Incurred, Expensed and Capitalized
(Dollars in Thousands)
  Three Months Ended Twelve Months Ended
  October 31, October 31,
  2010 2009 2010 2009
  (Unaudited) (Unaudited)
         
Interest Capitalized at Beginning of Period $148,378 $174,663 $164,340 $170,107
Plus Interest Incurred  37,858  49,660  154,307  194,702
Less Interest Expensed  49,948  59,983  182,359  200,469
Interest Capitalized at End of Period (a) $136,288 $164,340 $136,288 $164,340
         
(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
CONSOLIDATED BALANCE SHEETS
 
 (Dollars in thousands)  October 31, 2010  October 31, 2009
  (Unaudited) (1)
ASSETS    
Homebuilding:    
Cash and cash equivalents $359,124 $419,955
Restricted cash 108,983 152,674
Inventories:    
Sold and unsold homes and lots under development 591,729 631,302
Land and land options held for future development or sale 348,474 372,143
Consolidated inventory not owned:    
Specific performance options 21,065 30,534
Variable interest entities 32,710 45,436
Other options 7,962 30,498
Total consolidated inventory not owned 61,737 106,468
Total inventories 1,001,940 1,109,913
Investments in and advances to unconsolidated joint ventures 38,000 41,260
Receivables, deposits, and notes 61,023 44,418
Property, plant, and equipment – net 62,767 73,918
Prepaid expenses and other assets 83,928 98,159
Total homebuilding 1,715,765 1,940,297
Financial services:    
Cash and cash equivalents 8,056 6,737
Restricted cash 4,022 4,654
Mortgage loans held for sale 85,183 69,546
Other assets 4,534 3,343
Total financial services 101,795 84,280
Total assets $1,817,560 $2,024,577
     
(1) Derived from the audited balance sheet as of October 31, 2009.
 
HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 
 (Dollars in thousands, except share amounts) October 31, 2010 October 31, 2009
  (Unaudited) (1)
LIABILITIES AND EQUITY    
Homebuilding:    
Nonrecourse land mortgages $4,313  $ -- 
Accounts payable and other liabilities 319,749  325,722 
Customers' deposits 9,520  18,811 
Nonrecourse mortgages secured by operating properties 20,657  21,507 
Liabilities from inventory not owned 53,249  96,908 
Total homebuilding 407,488  462,948 
Financial services:    
Accounts payable and other liabilities 16,142  14,507 
Mortgage warehouse line of credit 73,643  55,857 
Total financial services 89,785  70,364 
Notes payable:    
Senior secured notes 784,592  783,148 
Senior notes 711,585  822,312 
Senior subordinated notes 120,170  146,241 
Accrued interest 23,968  26,078 
Total notes payable 1,640,315  1,777,779 
Income taxes payable 17,910  62,354 
Total liabilities 2,155,498  2,373,445 
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 October 31, 2010 and October 31, 2009 135,299  135,299 
Common stock, Class A, $.01 par value - authorized 200,000,000 shares; issued 74,809,683 shares at October 31, 2010 and 74,376,946 shares at October 31, 2009 (including 11,694,720 shares at October 31, 2010 and 2009 held in Treasury) 748  744 
Common stock, Class B, $.01 par value (convertible to Class A at time of sale) - authorized 30,000,000 shares; issued 15,256,543 shares at October 31, 2010 and 15,265,067 shares at October 31, 2009 (including 691,748 shares at October 31, 2010 and 2009 held in Treasury) 153  153 
Paid in capital - common stock 463,908  455,470 
Accumulated deficit (823,419) (826,007)
Treasury stock -at cost (115,257) (115,257)
Total Hovnanian Enterprises, Inc. stockholders' equity deficit (338,568) (349,598)
Non-controlling interest in consolidated joint ventures 630  730 
Total equity deficit (337,938) (348,868)
Total liabilities and equity $1,817,560  $2,024,577 
 
(1) Derived from the audited balance sheet as of October 31, 2009.
 
HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
 
  Fourth Quarter Ended Year Ended
(Dollars in thousands except per share data) October 31,

2010
 October 31, 

2009
 October 31, 

2010
 October 31, 

2009
  (Unaudited) (Unaudited) (1)
Revenues:        
Homebuilding:        
Sale of homes $339,576  $414,578  $1,327,499  $1,522,469 
Land sales and other revenues 4,881  13,540  12,370  38,271 
Total homebuilding 344,457  428,118  1,339,869  1,560,740 
Financial services 8,555  9,275  31,973  35,550 
Total revenues 353,012  437,393  1,371,842  1,596,290 
Expenses:        
Homebuilding:        
Cost of sales, excluding interest 281,253  368,394  1,104,049  1,398,087 
Cost of sales interest 23,663  32,024  84,440  105,814 
Inventory impairment loss and land option write-offs 80,588  137,970  135,699  659,475 
Total cost of sales 385,504  538,388  1,324,188  2,163,376 
Selling, general and administrative 50,716  52,476  178,331  239,606 
Total homebuilding expenses 436,220  590,864  1,502,519  2,402,982 
Financial services 5,880  9,727  23,074  29,295 
Corporate general and administrative(2) 14,668  17,217  59,900  81,980 
Other interest(3) 26,286  27,959  97,919  94,655 
Other operations 4,260  14,991  9,715  23,541 
Total expenses 487,313  660,758  1,693,127  2,632,453 
(Loss) gain on extinguishment of debt --  (17,619) 25,047  410,185 
Income (loss) from unconsolidated joint ventures 1,809  (7,821) 956  (46,041)
Loss before income taxes (132,492) (248,805) (295,282) (672,019)
State and federal income tax (benefit) provision:        
State (376) 1,969  (6,536) 25,287 
Federal (3) (5) (291,334) 19,406 
Total income taxes (379) 1,964  (297,870) 44,693 
Net (loss) income $(132,113) $(250,769) $2,588  $(716,712)
Per share data:        
Basic:        
(Loss) income per common share $(1.68) $(3.21) $0.03  $(9.16)
Weighted average number of common shares outstanding 78,779  78,067  78,691  78,238 
Assuming dilution:        
(Loss) income per common share $(1.68) $(3.21) $0.03  $(9.16)
Weighted average number of common shares outstanding 78,779  78,067  79,683  78,238 
 
(1) Derived from the audited statements of operations for the year ended October 31, 2009.
(2) Includes expenses related to cancelled stock options of $2.4 million and $14.7 million for the three and twelve months ended October 31, 2009, respectively.
(3) Beginning in the third quarter of fiscal 2008, our assets that qualify for interest capitalization (inventory under development) no longer exceeded our debt and therefore the portion of interest not covered by qualifying assets must be directly expensed.
               
HOVNANIAN ENTERPRISES, INC.
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE)
(UNAUDITED)
               
               
    Communities Under Development
    Three Months - 10/31/2010
    Net Contracts(1) Deliveries
    Three Months Ended Three Months Ended
    October 31, October 31,
    2010 2009 % Change 2010 2009 % Change
Northeast            
  Home 116 215 (46.0)% 180 237 (24.1)%
  Dollars  $ 42,925  $ 96,424 (55.5)%  $ 79,040  $ 102,996 (23.3)%
  Avg. Price  $ 370,043  $ 448,484 (17.5)%  $ 439,111  $ 434,582 1.0%
Mid-Atlantic            
  Home 164 174 (5.7)% 201 206 (2.4)%
  Dollars  $ 64,597  $ 66,375 (2.7)%  $ 73,654  $ 80,773 (8.8)%
  Avg. Price  $ 393,884  $ 381,466 3.3%  $ 366,438  $ 392,102 (6.5)%
Midwest            
  Home 84 94 (10.6)% 148 165 (10.3)%
  Dollars  $ 12,111  $ 18,019 (32.8)%  $ 29,177  $ 36,305 (19.6)%
  Avg. Price  $ 144,179  $ 191,681 (24.8)%  $ 197,142  $ 220,030 (10.4)%
Southeast            
  Home 83 100 (17.0)% 76 96 (20.8)%
  Dollars  $ 18,965  $ 24,377 (22.2)%  $ 17,472  $ 23,032 (24.1)%
  Avg. Price  $ 228,494  $ 243,770 (6.3)%  $ 229,895  $ 239,917 (4.2)%
Southwest            
  Home 498 452 10.2% 451 477 (5.5)%
  Dollars  $ 111,760  $ 97,797 14.3%  $ 103,190  $ 103,109 0.1%
  Avg. Price  $ 224,418  $ 216,365 3.7%  $ 228,803  $ 216,161 5.8%
West            
  Home 133 203 (34.5)% 148 263 (43.7)%
  Dollars  $ 31,571  $ 65,592 (51.9)%  $ 37,043  $ 68,364 (45.8)%
  Avg. Price  $ 237,376  $ 323,113 (26.5)%  $ 250,291  $ 259,941 (3.7)%
Consolidated Total            
  Home 1,078 1,238 (12.9)% 1,204 1,444 (16.6)%
  Dollars  $ 281,929  $ 368,584 (23.5)%  $ 339,576  $ 414,579 (18.1)%
  Avg. Price  $ 261,530  $ 297,725 (12.2)%  $ 282,040  $ 287,105 (1.8)%
Unconsolidated Joint Ventures            
  Home 61 29 110.3% 83 82 1.2%
  Dollars  $ 22,252  $ (8,551) n/m  $ 35,534  $ 40,522 (12.3)%
  Avg. Price  $ 364,787  $ (294,862) n/m  $ 428,120  $ 494,171 (13.4)%
Total            
  Home 1,139 1,267 (10.1)% 1,287 1,526 (15.7)%
  Dollars  $ 304,181  $ 360,033 (15.5)%  $ 375,110  $ 455,101 (17.6)%
  Avg. Price  $ 267,060  $ 284,162 (6.0)%  $ 291,461  $ 298,232 (2.3)%
         
    Communities Under Development
    Three Months - 10/31/2010
    Contract Backlog
    October 31,
    2010 2009 % Change
Northeast      
  Home 236 457 (48.4)%
  Dollars  $ 94,363  $ 196,262 (51.9)%
  Avg. Price  $ 399,843  $ 429,457 (6.9)%
Mid-Atlantic      
  Home 262 386 (32.1)%
  Dollars  $ 106,589  $ 150,819 (29.3)%
  Avg. Price  $ 406,828  $ 390,723 4.1%
Midwest      
  Home 222 253 (12.3)%
  Dollars  $ 34,188  $ 46,418 (26.3)%
  Avg. Price  $ 154,000  $ 183,470 (16.1)%
Southeast      
  Home 82 135 (39.3)%
  Dollars  $ 20,212  $  35,970 (43.8)%
  Avg. Price  $ 246,488  $ 266,444 (7.5)%
Southwest      
  Home 337 351 (4.0)%
  Dollars  $ 88,123  $ 77,418 13.8%
  Avg. Price  $ 261,493  $ 220,564 18.6%
West      
  Home 110 190 (42.1)%
  Dollars  $ 27,304  $ 52,666 (48.2)%
  Avg. Price  $ 248,218  $ 277,189 (10.5)%
Consolidated Total      
  Home 1,249 1,772 (29.5)%
  Dollars  $ 370,779  $ 559,553 (33.7)%
  Avg. Price  $ 296,861  $ 315,774 (6.0)%
Unconsolidated Joint Ventures      
  Home 145 159 (8.8)%
  Dollars  $ 67,112  $ 88,263 (24.0)%
  Avg. Price  $ 462,841  $ 555,119 (16.6)%
Total      
  Home 1,394 1,931 (27.8)%
  Dollars  $ 437,891  $ 647,816 (32.4)%
  Avg. Price  $ 314,126  $ 335,482 (6.4)%
DELIVERIES INCLUDE EXTRAS
Notes:        
(1) Net contracts are defined as new contracts signed during the period for

the purchase of homes, less cancellations of prior contracts.
           
HOVNANIAN ENTERPRISES, INC.
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE)
(UNAUDITED)
    Communities Under Development
    Twelve Months - 10/31/2010
    Net Contracts(1) Deliveries
    Twelve Months Ended Twelve Months Ended
    October 31, October 31,
    2010 2009 % Change 2010 2009 % Change
Northeast            
  Home 497 783 (36.5)% 718 823 (12.8)%
  Dollars  $ 193,826  $ 350,515 (44.7)%  $ 296,449  $ 357,745 (17.1)%
  Avg. Price  $ 389,992  $ 447,656 (12.9)%  $ 412,882  $ 434,684 (5.0)%
Mid-Atlantic            
  Home 629 789 (20.3)% 753 788 (4.4)%
  Dollars  $ 236,095  $ 281,194 (16.0)%  $ 280,132  $ 296,286 (5.5)%
  Avg. Price  $ 375,350  $ 356,393 5.3%  $ 372,021  $ 375,997 (1.1)%
Midwest            
  Home 408 482 (15.4)% 439 520 (15.6)%
  Dollars  $ 72,347  $ 95,764 (24.5)%  $ 91,260  $ 116,990 (22.0)%
  Avg. Price  $ 177,321  $ 198,680 (10.8)%  $ 207,882  $ 224,981 (7.6)%
Southeast            
  Home 331 461 (28.2)% 384 489 (21.5)%
  Dollars  $ 76,799  $ 103,173 (25.6)%  $  92,712  $ 113,034 (18.0)%
  Avg. Price  $ 232,021  $ 223,803 3.7%  $ 241,438  $ 231,153 4.4%
Southwest            
  Home 1,753 1,798 (2.5)% 1,767 1,867 (5.4)%
  Dollars  $ 393,943  $ 377,292 4.4%  $ 391,807  $ 408,746 (4.1)%
  Avg. Price  $ 224,725  $ 209,840 7.1%  $ 221,736  $ 218,932 1.3%
West            
  Home 588 914 (35.7)% 668 875 (23.7)%
  Dollars  $ 144,782  $ 220,369 (34.3)%  $ 175,139  $ 229,668 (23.7)%
  Avg. Price  $ 246,228  $ 241,104 2.1%  $ 262,184  $  262,478 (0.1)%
Consolidated Total            
  Home 4,206 5,227 (19.5)% 4,729 5,362 (11.8)%
  Dollars  $ 1,117,792  $ 1,428,307 (21.7)%  $ 1,327,499  $ 1,522,469 (12.8)%
  Avg. Price  $ 265,761  $ 273,256 (2.7)%  $ 280,715  $ 283,937 (1.1)%
Unconsolidated Joint Ventures            
  Home 266 193 37.8% 280 297 (5.7)%
  Dollars  $ 114,740  $  56,886 101.7%  $ 124,149  $ 113,016 9.9%
  Avg. Price  $ 431,353  $ 294,751 46.3%  $ 443,389  $ 380,525 16.5%
Total            
  Home 4,472 5,420 (17.5)% 5,009 5,659 (11.5)%
  Dollars  $ 1,232,532  $ 1,485,193 (17.0)%  $ 1,451,648  $ 1,635,485 (11.2)%
  Avg. Price  $ 275,611  $ 274,021 0.6%  $ 289,808  $ 289,006 0.3%
     
    Communities Under Development
    Twelve Months - 10/31/2010
    Contract Backlog
    October 31,
    2010 2009 % Change
Northeast      
  Home 236 457 (48.4)%
  Dollars  $ 94,363  $ 196,262 (51.9)%
  Avg. Price  $ 399,843  $ 429,457 (6.9)%
Mid-Atlantic      
  Home 262 386 (32.1)%
  Dollars  $ 106,589  $ 150,819 (29.3)%
  Avg. Price  $ 406,828  $ 390,723 4.1%
Midwest      
  Home 222 253 (12.3)%
  Dollars  $ 34,188  $ 46,418 (26.3)%
  Avg. Price  $ 154,000  $ 183,470 (16.1)%
Southeast      
  Home 82 135 (39.3)%
  Dollars  $ 20,212  $ 35,970 (43.8)%
  Avg. Price  $ 246,488  $ 266,444 (7.5)%
Southwest      
  Home 337 351 (4.0)%
  Dollars  $ 88,123  $ 77,418 13.8%
  Avg. Price  $ 261,493  $ 220,564 18.6%
West      
  Home 110 190 (42.1)%
  Dollars  $ 27,304  $ 52,666 (48.2)%
  Avg. Price  $ 248,218  $ 277,189 (10.5)%
Consolidated Total      
  Home 1,249 1,772 (29.5)%
  Dollars  $ 370,779  $ 559,553 (33.7)%
  Avg. Price  $ 296,861  $ 315,774 (6.0)%
Unconsolidated Joint Ventures      
  Home 145 159 (8.8)%
  Dollars  $ 67,112  $ 88,263 (24.0)%
  Avg. Price  $ 462,841  $ 555,119 (16.6)%
Total      
  Home 1,394 1,931 (27.8)%
  Dollars  $ 437,891  $ 647,816 (32.4)%
  Avg. Price  $ 314,126  $ 335,482 (6.4)%
DELIVERIES INCLUDE EXTRAS
Notes:
(1) Net contracts are defined as new contracts signed during the period for

the purchase of homes, less cancellations of prior contracts.
CONTACT: Hovnanian Enterprises, Inc.
         J. Larry Sorsby, Executive Vice President & CFO
         Jeffrey T. O'Keefe , Vice President of Investor Relations
         732-747-7800

© Copyright 2012, GlobeNewswire, Inc. All Rights Reserved

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