updated 6/7/2011 4:46:28 PM ET 2011-06-07T20:46:28

RED BANK, N.J., June 7, 2011 (GLOBE NEWSWIRE) -- Hovnanian Enterprises, Inc. (NYSE:HOV), a leading national homebuilder, reported results for its second quarter and six months ended April 30, 2011.

RESULTS FOR THE THREE AND SIX MONTH PERIODS ENDED APRIL 30, 2011:    

  • Total revenues were $255.1 million for the second quarter ended April 30, 2011 compared with $318.6 million in last year's second quarter. During the first six months of fiscal 2011, total revenues were $507.7 million compared with $638.2 million in the same period of the prior year.
  • Homebuilding gross margin percentage, before interest expense included in cost of sales, was 14.8% for the three months ended April 30, 2011, compared to 17.3% during the same quarter a year ago. For the six month period ended April 30, 2011, homebuilding gross margin percentage, before interest expense included in cost of sales, was 15.8% compared with 16.6% in the year earlier period.
  • Consolidated pre-tax land-related charges in the fiscal 2011 second quarter were $16.9 million, compared with $1.2 million in the prior year's second quarter. For the first half of fiscal 2011, consolidated pre-tax land-related charges were $30.5 million compared with $6.2 million during the first half of 2010.
  • Excluding land-related charges and (loss) gain on extinguishment of debt, the pre-tax loss for the quarter ended April 30, 2011 was $55.1 million compared with $44.0 million in the second quarter of 2010. During the first six months of fiscal 2011, the pre-tax loss, excluding land-related charges and (loss) gain on extinguishment of debt, was $106.2 million compared with $96.6 million in last year's first half.
  • For the second quarter of fiscal 2011, the after-tax net loss was $72.7 million, or $0.69 per common share, compared with $28.6 million, or $0.36 per common share, in the second quarter of the prior year. During the six months ended April 30, 2011, the after-tax net loss was $136.8 million, or $1.49 per common share, compared with net income of $207.6 million, or $2.60 per fully diluted common share in the first half of last year, which as a result of tax legislation changes included a federal income tax benefit of $291.3 million.
  • Net contracts during the second quarter of 2011, including unconsolidated joint ventures, decreased 17% to 1,166 homes compared with the same period of the prior year. For the six months ended April 30, 2011, net contracts, including unconsolidated joint ventures, were 2,016 homes, a 15% decrease from the same period a year ago.
  • Contract backlog, as of April 30, 2011, including unconsolidated joint ventures, was 1,551 homes with a sales value of $513.3 million, a decrease of 21% and 17%, respectively, compared to April 30, 2010. Compared to the first quarter of fiscal 2011, contract backlog, including unconsolidated joint ventures, increased 15% on a units basis and 18% on a dollar basis in the second quarter of fiscal 2011.
  • The contract cancellation rate, excluding unconsolidated joint ventures, in the fiscal 2011 second quarter was 20%, compared with 17% in the prior year's second quarter.
  • At April 30, 2011, there were 206 active selling communities, including unconsolidated joint ventures, compared with 188 active selling communities at April 30, 2010.
  • Deliveries, including unconsolidated joint ventures, were 967 homes for the fiscal 2011 second quarter, compared with 1,197 homes during the second quarter of fiscal 2010. For the first half of the year ended April 30, 2011, deliveries, including unconsolidated joint ventures, were 1,859 homes compared to 2,326 homes in the first six months of 2010.
  • The valuation allowance was $840.6 million as of April 30, 2011. 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 APRIL 30, 2011:    

  • As of April 30, 2011, homebuilding cash was $415.2 million, including restricted cash required to collateralize letters of credit.
  • Cash flow in the second quarter of fiscal 2011 was negative $88.5 million, after spending approximately $125 million of cash to purchase approximately 1,440 lots and to develop land across the Company.
  • As of April 30, 2011, the land position, including unconsolidated joint ventures, was 32,546 lots, consisting of 10,542 lots under option and 22,004 owned lots.
  • For the fiscal 2011 second quarter, approximately 1,170 of the lots purchased were within 84 newly identified communities (defined as communities controlled subsequent to January 31, 2009).
  • Approximately 1,650 lots were put under option in 41 newly identified communities during the second quarter of fiscal 2011.

RECENT NET CONTRACT RESULTS:           

  • For the month of May 2011, net contracts, including unconsolidated joint ventures, were 501 homes compared with 390 homes last year and 392 homes during April 2011, an increase of 28% over both periods.
  • Net contracts per community for the month of May 2011, including unconsolidated joint ventures, increased to 2.4 compared with 2.0 in the prior year and 1.9 in April 2011, an increase of 20% and 26%, respectively.

COMMENTS FROM MANAGEMENT:      

"On a per community basis, our net contracts, including unconsolidated joint ventures, held steady at 1.9 contracts per community per month throughout the quarter, but were still well below the elevated levels of a year ago that benefited from the federal homebuyer tax credit," commented Ara K. Hovnanian, Chairman of the Board, President and Chief Executive Officer. "While the spring selling season has been disappointing, there were a couple of bright spots, including a 28% year-over-year increase in net contracts in May, an increase in our community count during the second quarter and a sequential increase in backlog at April 30, 2011."

"Importantly, we took additional steps throughout the second quarter to better position our balance sheet and now have only $70 million of debt that matures through the end of fiscal 2014. At the same time, we continue to find appealing land opportunities that meet our investment thresholds. Getting these new communities up and running will allow us to grow our top line and better leverage our general, administrative and interest expenses, moving us ever closer down the path to profitability. Based on our backlog, current sales paces and prices and new community openings, we believe our loss will be less in the next two quarters and that cash flow will improve. We remain confident that we have the liquidity to weather the remainder of this downturn, and will continue to position ourselves in preparation for the inevitable housing recovery," concluded Mr. Hovnanian.

WEBCAST INFORMATION:          

Hovnanian Enterprises will webcast its fiscal 2011 second quarter financial results conference call at 11:00 a.m. E.T. on Wednesday, June 8, 2011. 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 2010 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 net (loss) income to EBITDA and Adjusted EBITDA 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 second quarter of 2011, cash flow was negative $88.5 million, which was derived from $98.4 million from net cash used in operating activities plus the change in mortgage notes receivable of $9.7 million plus $0.2 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 to Loss Before Income Taxes Excluding Land-Related Charges and Loss (Gain) on Extinguishment of Debt 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. 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 and warranty claims, (18) successful identification and integration of acquisitions, (19) significant influence of the Company's controlling stockholders, (20) geopolitical risks, terrorist acts and other acts of war, and (21) other factors described in detail in the Company's Annual Report on Form 10-K/A for the year ended October 31, 2010 and the Company's quarterly reports on Form 10-Q for the quarters ended January 31, 2011 and April 30, 2011, respectively. 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.
April 30, 2011
Statements of Consolidated Operations
(Dollars in Thousands, Except Per Share Data)
  Three Months Ended

April 30,
Six Months Ended

April 30,
  2011 2010 2011 2010
  (Unaudited) (Unaudited)
Total Revenues $ 255,097 $ 318,585 $ 507,664 $ 638,230
Costs and Expenses (a) 323,903 364,173 640,041 740,987
(Loss) Gain on Extinguishment of Debt (1,644) 17,217 (1,644) 19,791
(Loss) Income from Unconsolidated Joint Ventures (3,232) 391 (4,224) 18
Loss Before Income Taxes (73,682) (27,980) (138,245) (82,948)
Income Tax (Provision) Benefit (1,015) 654 (1,436) (290,503)
Net (Loss) Income  $ (72,667)  $ (28,634)  $ (136,809) $ 207,555
         
Per Share Data:        
Basic:        
(Loss) Income Per Common Share   $ (0.69)  $ (0.36)  $ (1.49) $ 2.64
Weighted Average Number of Common Shares Outstanding (b) 105,894 78,668 92,020 78,610
Assuming Dilution:        
(Loss) Income Per Common Share   $ (0.69)  $ (0.36)  $ (1.49) $ 2.60
Weighted Average Number of Common Shares Outstanding (b) 105,894 78,668 92,020 79,794
         
(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.
April 30, 2011
Reconciliation of Loss Before Income Taxes to Loss Before Income Taxes
Excluding Land-Related Charges and Loss (Gain) on Extinguishment of Debt 
(Dollars in Thousands)
  Three Months Ended

April 30,
Six Months Ended

April 30,
  2011 2010 2011 2010
  (Unaudited) (Unaudited)
Loss Before Income Taxes  $ (73,682)  $ (27,980)  $ (138,245)  $ (82,948)
Inventory Impairment Loss and Land Option Write-Offs 16,925 1,186 30,450 6,152
Loss (Gain) on Extinguishment of Debt 1,644 (17,217) 1,644 (19,791)
Loss Before Income Taxes Excluding Land-Related Charges and Loss (Gain) on Extinguishment of Debt (a)  $ (55,113)  $ (44,011)  $ (106,151)  $ (96,587)
         
(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.
April 30, 2011
Gross Margin
(Dollars in Thousands)
  Homebuilding Gross Margin

Three Months Ended

April 30,
Homebuilding Gross Margin

Six Months Ended

April 30,
  2011 2010 2011 2010
  (Unaudited) (Unaudited)
Sale of Homes $ 246,974 $ 310,493 $ 482,859 $ 619,846
Cost of Sales, Excluding Interest (a) 210,463 256,913 406,377 516,721
Homebuilding Gross Margin, Excluding Interest 36,511 53,580 76,482 103,125
Homebuilding Cost of Sales Interest 13,956 18,524 27,449 38,372
Homebuilding Gross Margin, Including Interest $ 22,555 $ 35,056 $ 49,033 $ 64,753
         
Gross Margin Percentage, Excluding Interest 14.8% 17.3% 15.8% 16.6%
Gross Margin Percentage, Including Interest 9.1% 11.3% 10.2% 10.4%
         
  Land Sales Gross Margin

Three Months Ended

April 30,
Land Sales Gross Margin

Six Months Ended

April 30,
  2011 2010 2011 2010
  (Unaudited) (Unaudited)
Land Sales  --  $ 335 $ 8,043 $ 1,035
Cost of Sales, Excluding Interest (a)  --  13 5,516 21
Land Sales Gross Margin, Excluding Interest  --  322 2,527 1,014
Land Sales Interest  --  221 2,133 221
Land Sales Gross Margin, Including Interest  --  $ 101 $ 394 $ 793
         
(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. 
April 30, 2011
Reconciliation of Adjusted EBITDA to Net (Loss) Income 
(Dollars in Thousands) 
  Three Months Ended

April 30,
Six Months Ended

April 30,
  2011 2010 2011 2010
  (Unaudited) (Unaudited)
 Net (Loss) Income   $ (72,667)  $ (28,634)  $ (136,809) $ 207,555
 Income Tax (Provision) Benefit  (1,015) 654 (1,436) (290,503)
 Interest Expense  38,843 42,101 78,454 87,556
 EBIT (a) (34,839) 14,121 (59,791) 4,608
 Depreciation  2,246 3,071 4,565 6,457
 Amortization of Debt Costs  1,012 815 1,857 1,621
 EBITDA (b) (31,581) 18,007 (53,369) 12,686
 Inventory Impairment Loss and Land Option Write-offs  16,925 1,186 30,450 6,152
 Loss (Gain) on Extinguishment of Debt  1,644 (17,217) 1,644 (19,791)
 Adjusted EBITDA (c)  $ (13,012) $ 1,976  $ (21,275)  $ (953)
         
 Interest Incurred  $ 39,895 $ 38,201 $ 77,722 $ 78,343
         
 Adjusted EBITDA to Interest Incurred  (0.33) 0.05 (0.27) (0.01)
         
         
(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.
April 30, 2011
Interest Incurred, Expensed and Capitalized
(Dollars in Thousands)
  Three Months Ended

April 30,
Six Months Ended

April 30,
  2011 2010 2011 2010
  (Unaudited) (Unaudited)
Interest Capitalized at Beginning of Period $ 134,504 $ 159,026 $ 136,288 $ 164,340
Plus Interest Incurred 39,895 38,201 77,722 78,342
Less Interest Expensed 38,843 42,101 78,454 87,556
Interest Capitalized at End of Period (a) $ 135,556 $ 155,126 $ 135,556 $ 155,126
         
(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 Except Share Amounts)
     
     
  April 30,

2011
October 31,

2010
ASSETS (Unaudited) (1)
     
Homebuilding:    
 Cash and cash equivalents $ 348,119 $ 359,124
     
 Restricted cash 85,346 108,983
     
 Inventories:    
 Sold and unsold homes and lots under development 655,918 591,729
     
 Land and land options held for future development or sale 308,601 348,474
     
 Consolidated inventory not owned:    
 Specific performance options 12,064 21,065
 Variable interest entities -- 32,710
 Other options 1,026 7,962
     
 Total consolidated inventory not owned 13,090 61,737
     
 Total inventories 977,609 1,001,940
     
 Investments in and advances to unconsolidated joint ventures 66,375 38,000
     
 Receivables, deposits, and notes 50,504 61,023
     
 Property, plant, and equipment – net 58,663 62,767
     
 Prepaid expenses and other assets 87,323 83,928
     
 Total homebuilding 1,673,939 1,715,765
     
Financial services:    
 Cash and cash equivalents 5,611 8,056
 Restricted cash 6,621 4,022
 Mortgage loans held for sale 47,372 86,326
 Other assets 3,012 3,391
     
 Total financial services 62,616 101,795
     
Total assets $ 1,736,555 $ 1,817,560
     
(1) Derived from the audited balance sheet as of October 31, 2010.
     
 
HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands Except Share Amounts)
     
     
 

April 30, 

2011
October 31, 

2010
LIABILITIES AND EQUITY (Unaudited) (1)
     
Homebuilding:    
 Nonrecourse land mortgages $ 18,934 $ 4,313
 Accounts payable and other liabilities 277,269 319,749
 Customers' deposits 15,227 9,520
 Nonrecourse mortgages secured by operating properties 20,210 20,657
 Liabilities from inventory not owned 13,090 53,249
     
 Total homebuilding 344,730 407,488
     
Financial services:    
 Accounts payable and other liabilities 16,865 16,142
 Mortgage warehouse line of credit 33,528 73,643
     
 Total financial services 50,393 89,785
     
Notes payable:    
 Senior secured notes 785,372 784,592
 Senior notes 827,460 711,585
 Senior subordinated notes -- 120,170
 TEU senior subordinated amortizing notes 15,615 --
 Accrued interest 22,319 23,968
     
 Total notes payable 1,650,766 1,640,315
     
 Income taxes payable 40,483 17,910
     
Total liabilities 2,086,372 2,155,498
     
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 April 30, 2011 and at October 31, 2010  135,299 135,299
Common stock, Class A, $.01 par value – authorized 200,000,000 shares; issued 91,430,549 shares at April 30, 2011 and 74,809,683 shares at October 31, 2010 (including 11,694,720 shares at April 30, 2011 and October 31, 2010 held in Treasury) 914 748
Common stock, Class B, $.01 par value (convertible to Class A at time of sale) – authorized 30,000,000 shares; issued 15,253,812 shares at April 30, 2011 and 15,256,543 shares at October 31, 2010 (including 691,748 shares at April 30, 2011 and October 31, 2010 held in Treasury) 153 153
Paid in capital - common stock 589,123 463,908
Accumulated deficit (960,228) (823,419)
Treasury stock - at cost (115,257) (115,257)
     
 Total Hovnanian Enterprises, Inc. stockholders' equity deficit (349,996) (338,568)
     
 Noncontrolling interest in consolidated joint ventures 179 630
     
 Total equity deficit (349,817) (337,938)
     
Total liabilities and equity $ 1,736,555 $ 1,817,560
     
(1) Derived from the audited balance sheet as of October 31, 2010.
 
 
HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands Except Per Share Data)
(Unaudited)
 
  Three Months Ended April 30, Six Months Ended April 30,
  2011 2010 2011 2010
Revenues:        
 Homebuilding:        
 Sale of homes $ 246,974 $ 310,493 $ 482,859 $ 619,846
 Land sales and other revenues 2,819 1,033 12,407 3,719
         
 Total homebuilding 249,793 311,526 495,266 623,565
 Financial services 5,304 7,059 12,398 14,665
         
 Total revenues 255,097 318,585 507,664 638,230
         
Expenses:        
 Homebuilding:        
Cost of sales, excluding interest 210,463 256,926 411,893 516,742
Cost of sales interest 13,956 18,745 29,582 38,593
Inventory impairment loss and land option write-offs 16,925 1,186 30,450 6,152
         
 Total cost of sales 241,344 276,857 471,925 561,487
         
 Selling, general and administrative 39,837 42,359 80,044 85,431
         
 Total homebuilding expenses 281,181 319,216 551,969 646,918
         
 Financial services 5,177 5,631 10,647 11,026
         
 Corporate general and administrative 11,952 14,203 26,960 30,416
         
 Other interest 24,887 23,356 48,872 48,963
         
 Other operations 706 1,767 1,593 3,664
         
 Total expenses 323,903 364,173 640,041 740,987
         
(Loss) gain on extinguishment of debt (1,644) 17,217 (1,644) 19,791
         
(Loss) income from unconsolidated joint ventures (3,232) 391 (4,224) 18
         
Loss before income taxes (73,682) (27,980) (138,245) (82,948)
         
State and federal income tax (benefit) provision:        
 State (372) 657 293 828
 Federal (643) (3) (1,729) (291,331)
         
 Total income taxes (1,015) 654 (1,436) (290,503)
         
Net (loss) income  $ (72,667)  $ (28,634)  $ (136,809) $ 207,555
         
Per share data:        
Basic:        
 (Loss) income per common share  $ (0.69)  $ (0.36)  $ (1.49) $ 2.64
 Weighted-average number of common shares outstanding 105,894 78,668 92,020 78,610
         
Assuming dilution:        
 (Loss) income per common share  $ (0.69)  $ (0.36)  $ (1.49) $ 2.60
 Weighted-average number of common shares outstanding 105,894 78,668 92,020 79,794
 
 
HOVNANIAN ENTERPRISES, INC.
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE)
(UNAUDITED) Communities Under Development
  Three Months - 4/30/2011
    Net Contracts(1)

Three Months Ended

April 30,
Deliveries

Three Months Ended

April 30,


Contract Backlog

April 30,
    2011 2010 % Change 2011 2010 % Change 2011 2010 % Change
Northeast                    
  Home 125 146 (14.4)% 82 149 (45.0)% 249 416 (40.1)%
  Dollars $ 57,394 $ 52,208 9.9% $ 36,126 $ 56,955 (36.6)% $ 106,387 $ 175,029 (39.2)%
  Avg. Price $ 459,152 $ 357,589 28.4% $ 440,561 $ 382,248 15.3% $ 427,257 $ 420,745 1.5%
Mid-Atlantic                    
  Home 162 202 (19.8)% 127 176 (27.8)% 274 356 (23.0)%
  Dollars $ 55,874 $ 73,704 (24.2)% $ 46,643 $ 67,634 (31.0)% $ 113,349 $ 137,805 (17.7)%
  Avg. Price $ 344,901 $ 364,871 (5.5)% $ 367,268 $ 384,284 (4.4)% $ 413,682 $ 387,093 6.9%
Midwest                    
  Home 98 149 (34.2)% 89 70 27.1% 215 306 (29.7)%
  Dollars $ 20,521 $ 27,289 (24.8)% $ 17,466 $ 16,029 9.0% $ 38,592 $ 53,609 (28.0)%
  Avg. Price $ 209,398 $ 183,148 14.3% $ 196,247 $ 228,986 (14.3)% $ 179,498 $ 175,193 2.5%
Southeast                    
  Home 98 112 (12.5)% 73 93 (21.5)% 107 132 (18.9)%
  Dollars $ 23,345 $ 25,334 (7.9)% $ 16,684 $ 22,041 (24.3)% $ 27,450 $ 31,767 (13.6)%
  Avg. Price $ 238,214 $ 226,205 5.3% $ 228,548 $ 237,000 (3.6)% $ 256,542 $ 240,659 6.6%
Southwest                    
  Home 444 530 (16.2)% 403 465 (13.3)% 375 393 (4.6)%
  Dollars $ 104,010 $ 114,166 (8.9)% $ 97,339 $ 103,428 (5.9)% $ 99,358 $ 89,512 11.0%
  Avg. Price $ 234,257 $ 215,408 8.8% $ 241,536 $ 222,426 8.6% $ 264,955 $ 227,766 16.3%
West                    
  Home 119 175 (32.0)% 125 165 (24.2)% 73 186 (60.8)%
  Dollars $ 32,423 $ 43,857 (26.1)% $ 32,716 $ 44,406 (26.3)% $ 19,946 $ 46,926 (57.5)%
  Avg. Price $ 272,462 $ 250,611 8.7% $ 261,728 $ 269,127 (2.7)% $ 273,233 $ 252,290 8.3%
Consolidated Total                    
  Home 1,046 1,314 (20.4)% 899 1,118 (19.6)% 1,293 1,789 (27.7)%
  Dollars $ 293,567 $ 336,558 (12.8)% $ 246,974 $ 310,493 (20.5)% $ 405,082 $ 534,648 (24.2)%
  Avg. Price $ 280,657 $ 256,132 9.6% $ 274,721 $ 277,722 (1.1)% $ 313,288 $ 298,853 4.8%
Unconsolidated Joint Ventures                    
  Home 120 85 41.2% 68 79 (13.9)% 258 176 46.6%
  Dollars $ 53,520 $ 33,097 61.7% $ 29,291 $ 33,106 (11.5)% $ 108,207 $ 84,208 28.5%
  Avg. Price $ 446,000 $ 389,376 14.5% $ 430,750 $ 419,063 2.8% $ 419,407 $ 478,455 (12.3)%
Total                    
  Home 1,166 1,399 (16.7)% 967 1,197 (19.2)%  1,551 1,965 (21.1)%
  Dollars $ 347,086 $ 369,655 (6.1)% $ 276,265 $ 343,599 (19.6)% $ 513,289 $ 618,856 (17.1)%
  Avg. Price $ 297,672 $ 264,228 12.7% $ 285,693 $ 287,050 (0.5)% $ 330,941 $ 314,940 5.1%
                     
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
  Six Months - 4/30/2011
    Net Contracts(1)

Six Months Ended

April 30,
Deliveries

Six Months Ended

April 30,


Contract Backlog

April 30,
    2011 2010 % Change 2011 2010 % Change 2011 2010 % Change
Northeast                    
  Home 217 276 (21.4)% 183 317 (42.3)% 249 416 (40.1)%
  Dollars $ 94,829 $ 107,587 (11.9)% $ 79,410 $ 125,669 (36.8)% $ 106,387 $ 175,029 (39.2)%
  Avg. Price $ 437,000 $ 389,808 12.1% $ 433,934 $ 396,432 9.5% $ 427,257 $ 420,745 1.5%
Mid-Atlantic                    
  Home 289 328 (11.9)% 248 358 (30.7)% 274 356 (23.0)%
  Dollars $ 107,888 $ 120,653 (10.6)% $ 92,906 $ 133,710 (30.5)% $ 113,349 $ 137,805 (17.7)%
  Avg. Price $ 373,315 $ 367,845 1.5% $ 374,621 $ 373,492 0.3% $ 413,682 $ 387,093 6.9%
Midwest                    
  Home 163 234 (30.3)% 170 181 (6.1)% 215 306 (29.7)%
  Dollars $ 32,852 $ 43,710 (24.8)% $ 31,500 $ 39,433 (20.1)% $ 38,592 $ 53,609 (28.0)%
  Avg. Price $ 201,546 $ 186,795 7.9% $ 185,294 $ 217,862 (14.9)% $ 179,498 $ 175,193 2.5%
Southeast                    
  Home 166 184 (9.8)% 141 187 (24.6)% 107 132 (18.9)%
  Dollars $ 38,985 $ 42,570 (8.4)% $ 32,188 $ 46,718 (31.1)% $ 27,450 $ 31,767 (13.6)%
  Avg. Price $ 234,849 $ 231,359 1.5% $ 228,284 $ 249,829 (8.6)% $ 256,542 $ 240,659 6.6%
Southwest                    
  Home 801 886 (9.6)% 763 844 (9.6)% 375 393 (4.6)%
  Dollars $ 189,796 $ 193,822 (2.1)% $ 184,566 $ 185,552 (0.5)% $ 99,358 $ 89,512 11.0%
  Avg. Price $ 236,949 $ 218,762 8.3% $ 241,895 $ 219,848 10.0% $ 264,955 $ 227,766 16.3%
West                    
  Home 202 318 (36.5)% 239 322 (25.8)% 73 186 (60.8)%
  Dollars $ 54,705 $ 79,898 (31.5)% $ 62,289 $ 88,764 (29.8)% $ 19,946 $ 46,926 (57.5)%
  Avg. Price $ 270,817 $ 251,252 7.8% $ 260,623 $ 275,665 (5.5)% $ 273,233 $ 252,290 8.3%
Consolidated Total                    
  Home 1,838 2,226 (17.4)% 1,744 2,209 (21.1)% 1,293 1,789 (27.7)%
  Dollars $ 519,055 $ 588,240 (11.8)% $ 482,859 $ 619,846 (22.1)% $ 405,082 $ 534,648 (24.2)%
  Avg. Price $ 282,402 $ 264,259 6.9% $ 276,869 $ 280,600 (1.3)% $ 313,288 $ 298,853 4.8%
Unconsolidated Joint Ventures                    
  Home 178 134 32.8% 115 117 (1.7)% 258 176 46.6%
  Dollars $ 77,116 $ 56,725 35.9% $ 51,825 $ 54,006 (4.0)% $ 108,207 $ 84,208 28.5%
  Avg. Price $ 433,236 $ 423,321 2.3% $ 450,652 $ 461,590 (2.4)% $ 419,407 $ 478,455 (12.3)%
Total                    
  Home 2,016 2,360 (14.6)% 1,859 2,326 (20.1)% 1,551 1,965 (21.1)%
  Dollars $ 596,171 $ 644,965 (7.6)% $ 534,684 $ 673,852 (20.7)% $ 513,289 $ 618,856 (17.1)%
  Avg. Price $ 295,720 $ 273,290 8.2% $ 287,619 $ 289,704 (0.7)% $ 330,941 $ 314,940 5.1%
                     
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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