Exhibit 99.1
HOVNANIAN ENTERPRISES, INC. | | News Release |
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Contact: | | Kevin C. Hake | | Brian A. Cheripka |
| | Vice President and Treasurer | | Assistant Director of Investor Relations |
| | 732-747-7800 | | 732-747-7800 |
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HOVNANIAN ENTERPRISES REPORTS 25% INCREASE IN THIRD QUARTER EPS; ACHIEVES RECORD FINANCIAL RESULTS AND RAISES FISCAL 2004 EARNINGS PROJECTION
Highlights for the Third Quarter Ended July 31, 2004
• Net earnings reached a record $1.33 per fully diluted share for the third quarter, a 25% increase from $1.06 per fully diluted share in the third quarter of fiscal 2003 and exceeded the Company’s most recent projection for the quarter of $1.25 to $1.30 per fully diluted share.
• The Company earned $1.46 per fully diluted share, excluding $13.7 million in pre-tax charges related to the discontinuation of the Forecast Homes brand name and the extinguishment of debt, an increase of 36% from last year’s third quarter on a comparable basis.
• Total revenues for the third quarter increased 25% to $1.1 billion, and the number of homes delivered in the quarter increased 22% over the prior year’s third quarter.
• The Company achieved record net earnings of $86.7 million for the third quarter, of which 96% were generated from the Company’s organic operations, which excludes earnings from acquisitions closed since the beginning of the third quarter of fiscal 2003.
• Earnings for the trailing twelve months ended July 31, 2004 represent a return on beginning equity (ROE) of 42.0% and an after tax return on beginning capital (ROC) of 23.0%.
• Management is increasing its projection for full year fiscal 2004 earnings to exceed $5.30 per fully diluted share, representing more than a 34% increase from record earnings of $3.93 per fully diluted share in fiscal 2003.
• The dollar value of net contracts for the third quarter grew 34% to $1.3 billion on 4,173 homes, compared to $967 million on 3,498 homes in the third quarter of fiscal 2003.
• Contract backlog as of July 31, 2004 was 8,501 homes, with a sales value of $2.7 billion, up 68% from the sales value of homes in last year’s third quarter backlog.
• Management projects fiscal 2005 earnings to exceed $6.30 per fully diluted share. Management expects quarterly earnings to be more evenly distributed in fiscal 2005, beginning with a strong first quarter.
RED BANK, NJ, September 7, 2004 – Hovnanian Enterprises, Inc. (NYSE: HOV), a leading national homebuilder, reported net income of $86.7 million, or $1.33 per fully diluted share, on $1.1 billion in total revenue for the third quarter ended July 31, 2004. Last year’s third quarter net income was $68.8 million, or $1.06 per fully diluted share, on total revenue of $848.8 million.
The dollar value of net contracts increased 34% in the third quarter to $1.3 billion, including unconsolidated joint ventures, from $967 million in the third quarter of 2003. Deliveries in the third quarter of fiscal 2004 were 3,765 homes, including homes from unconsolidated joint ventures, with an aggregate sales value of $1.1 billion. This compares to 3,075 homes delivered with an aggregate sales value of $832.6 million in the third quarter of fiscal 2003. Contract backlog increased to 8,501 homes, including unconsolidated joint ventures, compared to 5,741 homes in last year’s third quarter.
Consolidated earnings before interest expense, income taxes, depreciation and amortization (“EBITDA”) for the third quarter of fiscal 2004 rose 32% to $178.8 million from $135.0 million in the third quarter of 2003. EBITDA covered the amount of interest incurred in the quarter by 8.3 times, compared to 7.6 times during the same period of fiscal 2003. The Company’s homebuilding gross margin for the most recent three month period was 25.5%, equal to the 25.5% homebuilding gross margin reported in the prior year’s third quarter despite the effects of increases in lumber, concrete and other material costs, and the impact of lower margins from two acquisitions that closed during the interim time period. Total selling, general and administrative expense, including corporate expense, as a percentage of total revenues decreased to 9.0% in the third quarter of 2004, an 80 basis point decline from 9.8% in the third quarter of 2003. Shareholders’ equity grew to $1.05 billion at July 31, 2004 from $970.2 million at the end of the second quarter of fiscal 2004.
For the nine months ended July 31, 2004, revenue reached $2.8 billion, up 28% compared to $2.2 billion for the year earlier period. Net income for the first nine months of fiscal 2004 increased to $214.9 million, or $3.30 per fully diluted share, compared to $166.1 million, or $2.53 per fully diluted share, in 2003. The dollar value of year-to-year net contracts during the nine-month period increased by 51% and the number of home deliveries rose by 28%, including the impact of unconsolidated joint ventures.
Comments from Management
“We are extremely pleased to report record revenues, earnings, deliveries and backlog for the third quarter,” said Ara K. Hovnanian, President and Chief Executive Officer of the Company. “Our 26% growth in earnings and 34% increase in the dollar value of our quarterly net contracts demonstrate the healthy demand for our new homes and the underlying strength of our business. We continue to produce some of the highest returns in the industry and create exceptional value for our shareholders, achieving a 42% return on equity and 23% return on capital over the most recent twelve month period. Our robust financial performance is primarily due to continuing market share gains and our diversified product offerings, in addition to the underlying strength of housing demand driven by household formation,” he said. “While we have achieved industry leading growth for the past three years, we have also successfully implemented strategies designed to improve our profitability, maximize the efficiency of our homebuilding operations and develop a stronger market presence for our Company,” Mr. Hovnanian said.
“Current market conditions remain solid, particularly in the heavily regulated markets along the East and West coast, where housing demand continues to exceed the available supply,” Mr. Hovnanian said. “Looking ahead, we are well positioned to meet our growth objectives as our controlled land position of roughly 92,000 lots, more than a six year supply, provides a tremendous competitive advantage and excellent forward earnings visibility,” Mr. Hovnanian continued. “Additionally, as the economy continues to improve, we expect demand for new homes in our markets to remain strong, driven in part by accelerating job growth, on top of the underlying fundamental demand for housing. We are confident that the upward trends in the economy, combined with our ability to leverage our size and reduce costs, will more than offset any impact of rising mortgage rates,” he stated.
“Given the strength of our contract backlog, we are well positioned to achieve record financial results in fiscal 2004 and to continue our pattern of growth into fiscal 2005. We are increasing our projection for fiscal 2004 to exceed $5.30 per fully diluted share,” Mr. Hovnanian stated. “This upwardly revised earnings projection represents more than a 34% increase from last year’s record earnings of $3.93 per fully diluted share. Fiscal 2004 revenue is expected to grow more than 28% to over $4.1 billion on deliveries of more than 14,700 homes. Assuming economic conditions remain stable, we are projecting that our fiscal 2005 earnings will increase by nearly 20%, to exceed $6.30 per fully diluted share,” he concluded.
“During the quarter we also significantly strengthened our balance sheet by increasing the size of our unsecured revolving credit facility to $900 million from $590 million, and extending the maturity through July 2008,” said J. Larry Sorsby, Executive Vice President and Chief Financial Officer. “The expansion of our credit facility improves our overall liquidity and provides additional flexibility in our capital structure to fund ongoing operations and meet our targeted growth objectives. We deployed capital during the quarter to fund our seasonally high summer backlog of homes under construction and to purchase new land parcels which position us for continued growth in revenues and profits. Despite this investment of capital, our ratio of net recourse debt-to-capitalization at July 31, 2004 was 51.3%, and we anticipate that the Company’s average net recourse debt-to-capitalization ratio for fiscal 2004 will be at or below 50%, in line with our target,” Mr. Sorsby continued.
“As previously announced, charges associated with changing our Forecast Homes brand name in California to K. Hovnanian Homes, and a charge for the extinguishment of debt, will have a combined impact of $0.20 on earnings per fully diluted share in the third and fourth quarters of fiscal 2004. Excluding these charges, our earnings would have been $1.46 per fully diluted share for the third quarter, or $0.13 higher than reported. Our projected earnings for fiscal 2004 would exceed $5.50 per fully diluted share, excluding these additional charges, which would represent roughly a 40% increase from our earnings per fully diluted share for fiscal 2003,” Mr. Sorsby concluded.
In Closing
“We are very proud of the continued strength in our financial performance and we are pleased with our recent sales activity. The efforts of our talented group of associates in executing our business strategies have helped our Company achieve earnings growth and return on invested capital that rank near the top of the housing industry,” commented Mr. Hovnanian. “We remain well positioned to achieve our objectives for growth and return on capital for the remainder of fiscal 2004 and into fiscal 2005,” he concluded.
Hovnanian Enterprises will webcast its third quarter earnings conference call at 11:00 a.m. E.D.T. this morning, September 7, 2004, hosted by Ara K. Hovnanian, President and Chief Executive Officer of the Company. The webcast can be accessed live through the “Investor Relations’” section of Hovnanian Enterprises’ Web site 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 “Webcast” section of the Investor News page on the Hovnanian Web site at http://www.khov.com. The archive will be available for 12 months.
The Company has updated its summary projection for the fiscal year ending October 31, 2004. The summary projection is available on the Company Projection page of the “Investor Relations” section of the Company’s website at http://www.khov.com.
Hovnanian Enterprises, Inc., founded in 1959 by Kevork S. Hovnanian, Chairman, is headquartered in Red Bank, New Jersey. The Company is one of the nation’s largest homebuilders with operations in Arizona, California, Florida, Maryland, Michigan, 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™, Washington Homes, Goodman Homes, Matzel & Mumford, Diamond Homes, Westminster Homes, Fortis Homes, Forecast Homes, Parkside Homes, Brighton Homes, Parkwood Builders, Great Western Homes and Windward 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 2003 annual report, can be accessed through the Investors page of the Hovnanian Web site 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.
Non-GAAP Financial Measures:
EBITDA is not a generally accepted accounting principle (GAAP) financial measure. The most directly comparable GAAP financial measure is net income. The reconciliation of EBITDA to net income 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 Private Securities Litigation 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 business conditions, (2) weather conditions, (3) changes in market conditions, (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 homebuilding process 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) geopolitical risks, terrorist acts and other acts of war and (13) other factors described in detail in the Company’s Form 10-K for the year ended October 31, 2003.
(Financial Tables Follow)
Hovnanian Enterprises, Inc.
July 31, 2004
Statements of Consolidated Income
(Dollars in Thousands, Except Per Share)
| | Three Months Ended,
July 31, | | Nine Months Ended,
July 31, | |
| | 2004 | | 2003 | | 2004 | | 2003 | |
| | (Unaudited) | |
Total Revenues | | $ | 1,063,688 | | $ | 848,817 | | $ | 2,757,711 | | $ | 2,156,269 | |
Costs and Expenses | | 923,672 | | 739,009 | | 2,412,843 | | 1,890,897 | |
Income Before Income Taxes | | 140,016 | | 109,808 | | 344,868 | | 265,372 | |
Provision for Taxes | | 53,278 | | 41,006 | | 129,947 | | 99,241 | |
Net Income | | $ | 86,738 | | $ | 68,802 | | $ | 214,921 | | $ | 166,131 | |
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Per Share Data: | | | | | | | | | |
Basic: | | | | | | | | | |
Income per common share | | $ | 1.40 | | $ | 1.12 | | $ | 3.47 | | $ | 2.68 | |
Weighted Average Number of Common Shares Outstanding | | 62,001 | | 61,260 | | 61,887 | | 62,088 | |
Assuming Dilution: | | | | | | | | | |
Income per common share | | $ | 1.33 | | $ | 1.06 | | $ | 3.30 | | $ | 2.53 | |
Weighted Average Number of Common Shares Outstanding | | 65,115 | | 65,086 | | 65,158 | | 65,612 | |
Hovnanian Enterprises, Inc.
July 31, 2004
Homebuilding Gross Margin
(Dollars in Thousands)
| | Homebuilding Gross Margin
Three Months Ended
July 31, | | Homebuilding Gross Margin
Nine Months Ended
July 31, | |
| | 2004 | | 2003 | | 2004 | | 2003 | |
| | (Unaudited) | |
Sale of Homes | | $ | 1,044,610 | | $ | 830,734 | | $ | 2,702,826 | | $ | 2,104,788 | |
Cost of Sales | | 778,121 | | 618,650 | | 2,014,799 | | 1,572,306 | |
Homebuilding Gross Margin | | $ | 266,489 | | $ | 212,084 | | $ | 688,027 | | $ | 532,482 | |
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Gross Margin Percentage | | 25.5 | % | 25.5 | % | 25.5 | % | 25.3 | % |
| | Land Sales Gross Margin
Three Months Ended
July 31, | | Land Sales Gross Margin
Nine Months Ended
July 31, | |
| | 2004 | | 2003 | | 2004 | | 2003 | |
| | (Unaudited) | |
Land and Lot Sales | | $ | 230 | | $ | 3,314 | | $ | 1,815 | | $ | 13,064 | |
Cost of Sales | | 95 | | 3,247 | | 1,458 | | 9,988 | |
Land and Lot Gross Margin | | $ | 135 | | $ | 67 | | $ | 357 | | $ | 3,076 | |
Hovnanian Enterprises, Inc.
July 31, 2004
Reconciliation of EBITDA to Net Income
(Dollars in Thousands)
| | Three Months Ended
July 31, | | Nine Months Ended
July 31, | |
| | 2004 | | 2003 | | 2004 | | 2003 | |
| | (Unaudited) | |
Net Income | | $ | 86,738 | | $ | 68,802 | | $ | 214,921 | | $ | 166,131 | |
Income Taxes | | 53,278 | | 41,006 | | 129,947 | | 99,241 | |
Interest expense | | 17,725 | | 17,204 | | 53,764 | | 44,308 | |
EBIT(1) | | $ | 157,741 | | $ | 127,012 | | $ | 398,632 | | $ | 309,680 | |
Depreciation | | 1,603 | | 1,721 | | 4,606 | | 4,946 | |
Amortization Debt Fees | | 8,955 | | 1,977 | | 10,720 | | 2,614 | |
Amortization of Intangibles | | 9,716 | | 3,159 | | 19,115 | | 5,465 | |
Other Amortization | | 792 | | 1,177 | | 2,625 | | 3,500 | |
EBITDA(2) | | $ | 178,807 | | $ | 135,046 | | $ | 435,698 | | $ | 326,205 | |
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INTEREST INCURRED | | $ | 21,426 | | $ | 17,807 | | $ | 65,217 | | $ | 48,232 | |
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EBITDA TO INTEREST INCURRED | | 8.3 | | 7.6 | | 6.7 | | 6.8 | |
(1) EBIT is a non-GAAP financial measure. The most directly comparable GAAP financial measure is net income. EBIT represents earnings before interest expense and income taxes.
(2) EBITDA is a non-GAAP financial measure. The most directly comparable GAAP financial measure is net income. EBITDA represents earnings before interest expense, income taxes, depreciation and amortization.
Hovnanian Enterprises, Inc.
July 31, 2004
Interest Incurred, Expensed and Capitalized
(Dollars is Thousands)
| | Three Months Ended
July 31, | | Nine Months Ended
July 31, | |
| | 2004 | | 2003 | | 2004 | | 2003 | |
| | (Unaudited) | |
Interest Capitalized at Beginning of Period | | $ | 32,585 | | $ | 25,480 | | $ | 24,833 | | $ | 22,159 | |
Plus Interest Incurred | | 21,426 | | 17,807 | | 65,217 | | 48,232 | |
Less Interest Expensed | | 17,725 | | 17,204 | | 53,764 | | 44,308 | |
Interest Capitalized at End of Period | | $ | 36,286 | | $ | 26,083 | | $ | 36,286 | | $ | 26,083 | |
Hovnanian Enterprises, Inc.
July 31, 2004
Summary Financial Projection
(Dollars in Millions, except per share or where noted)
(Unaudited)
| | Fiscal Year
10/31/2001 | | Fiscal Year
10/31/2002 | | Fiscal Year
10/31/2003 | | Trailing
12 Mos.
7/31/2004 | | | Projection
Fiscal Year
10/31/2004* | |
| | | | | | | | | | | | |
Total Revenues ($ Billion) | | $ | 1.7 | | $ | 2.6 | | $ | 3.2 | | $ | 3.8 | | > | $ | 4.1 | |
Income Before Income Taxes | | $ | 106.4 | | $ | 225.7 | | $ | 411.5 | | $ | 491.0 | | > | $ | 565.0 | |
Pre-tax Margin | | 6.1 | % | 8.8 | % | 12.9 | % | 12.9 | % | > | 13.5 | % |
Net Income | | $ | 63.7 | | $ | 137.7 | | $ | 257.4 | | $ | 306.2 | | > | $ | 350.0 | |
Earnings Per Share (fully diluted) | | $ | 1.15 | | $ | 2.14 | | $ | 3.93 | | $ | 4.72 | | > | $ | 5.30 | |
* 2004 Projection is based on three quarters of actual data and one quarter of projected results.
HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
ASSETS | | July 31,
2004 | | October 31,
2003 | |
| | (unaudited) | | | |
Homebuilding: | | | | | |
Cash and cash equivalents | | $ | 6,667 | | $ | 121,913 | |
Inventories - At the lower of cost or fair value: | | | | | |
Sold and unsold homes and lots under development | | 1,785,771 | | 1,184,907 | |
Land and land options held for future development or sale | | 357,092 | | 270,502 | |
Consolidated Inventory Not Owned: | | | | | |
Specific performance options | | 23,076 | | 56,082 | |
Variable interest entities | | 198,634 | | 100,327 | |
Other options | | 32,811 | | 48,226 | |
Total Consolidated Inventory Not Owned | | 254,521 | | 204,635 | |
Total Inventories | | 2,397,384 | | 1,660,044 | |
| | | | | |
Receivables, deposits, and notes | | 49,614 | | 42,506 | |
| | | | | |
Property, plant, and equipment - net | | 37,647 | | 26,263 | |
| | | | | |
Prepaid expenses and other assets | | 146,174 | | 106,525 | |
| | | | | |
Goodwill and indefinite life intangibles | | 32,658 | | 82,658 | |
| | | | | |
Definite life intangibles | | 122,062 | | 56,978 | |
Total Homebuilding | | 2,792,206 | | 2,096,887 | |
| | | | | |
Financial Services: | | | | | |
Cash and cash equivalents | | 12,317 | | 6,308 | |
Mortgage loans held for sale | | 150,782 | | 224,052 | |
Other assets | | 3,047 | | 3,945 | |
Total Financial Services | | 166,146 | | 234,305 | |
| | | | | |
Income Taxes Receivable - Including deferred tax benefits | | 21,903 | | 1,179 | |
Total Assets | | $ | 2,980,255 | | $ | 2,332,371 | |
HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
LIABILITIES AND STOCKHOLDERS’ EQUITY | | July 31,
2004 | | October 31,
2003 | |
| | (unaudited) | | | |
Homebuilding: | | | | | |
Nonrecourse land mortgages | | $ | 23,066 | | $ | 43,795 | |
Accounts payable and other liabilities | | 290,686 | | 230,696 | |
Customers’ deposits | | 92,383 | | 58,376 | |
Liabilities from inventory not owned | | 49,824 | | 94,780 | |
Total Homebuilding | | 455,959 | | 427,647 | |
| | | | | |
Financial Services: | | | | | |
Accounts payable and other liabilities | | 5,583 | | 5,917 | |
Mortgage warehouse line of credit | | 144,853 | | 166,711 | |
Total Financial Services | | 150,436 | | 172,628 | |
| | | | | |
Notes Payable: | | | | | |
Revolving and term credit agreements | | 215,000 | | 115,000 | |
Senior notes | | 602,589 | | 387,166 | |
Senior subordinated notes | | 300,000 | | 300,000 | |
Accrued interest | | 14,546 | | 15,675 | |
Total Notes Payable | | 1,132,135 | | 817,841 | |
Total Liabilities | | 1,738,530 | | 1,418,116 | |
| | | | | |
Minority interest from inventory not owned | | 179,255 | | 90,252 | |
| | | | | |
Minority interest from consolidated joint ventures | | 8,731 | | 4,291 | |
| | | | | |
Stockholders’ Equity: | | | | | |
Preferred Stock,$.01 par value-authorized 100,000 shares; none issued | | | | | |
Common Stock,Class A,$.01 par value-authorized 200,000,000 shares; issued 56,768,461 shares at July 31, 2004 and 56,036,116 shares at October 31, 2003 (including 10,395,656 shares at July 31, 2004 and 10,780,436 shares at October 31, 2003 held in Treasury) | | 567 | | 560 | |
Common Stock,Class B,$.01 par value (convertible to Class A at time of sale) authorized 30,000,000 shares; issued 15,379,780 shares at July 31, 2004 and 15,537,016 shares at October 31, 2003 (including 691,748 shares at July 31, 2004 and October 31, 2003 held in Treasury) | | 154 | | 155 | |
Paid in Capital | | 184,260 | | 163,355 | |
Retained Earnings | | 920,103 | | 705,182 | |
Deferred Compensation | | (1,295 | ) | | |
Treasury Stock - at cost | | (50,050 | ) | (49,540 | ) |
Total Stockholders’ Equity | | 1,053,739 | | 819,712 | |
Total Liabilities and Stockholders’ Equity | | $ | 2,980,255 | | $ | 2,332,371 | |
HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Thousands Except Per Share Data)
(Unaudited)
| | Three Months Ended
July 31, | | Nine Months Ended
July 31, | |
| | 2004 | | 2003 | | 2004 | | 2003 | |
| | | | | | | | | |
Revenues: | | | | | | | | | |
Homebuilding: | | | | | | | | | |
Sale of homes | | $ | 1,044,610 | | $ | 830,734 | | $ | 2,702,826 | | $ | 2,104,788 | |
Land sales and other revenues | | 5,395 | | 4,441 | | 12,959 | | 16,445 | |
Total Homebuilding | | 1,050,005 | | 835,175 | | 2,715,785 | | 2,121,233 | |
Financial Services | | 13,683 | | 13,642 | | 41,926 | | 35,036 | |
Total Revenues | | 1,063,688 | | 848,817 | | 2,757,711 | | 2,156,269 | |
| | | | | | | | | |
Expenses: | | | | | | | | | |
Homebuilding: | | | | | | | | | |
Cost of sales | | 778,216 | | 621,897 | | 2,016,257 | | 1,582,294 | |
Selling, general and administrative | | 82,905 | | 66,136 | | 235,210 | | 180,035 | |
Inventory impairment loss | | 1,438 | | 149 | | 2,230 | | 1,633 | |
Total Homebuilding | | 862,559 | | 688,182 | | 2,253,697 | | 1,763,962 | |
| | | | | | | | | |
Financial Services | | 8,637 | | 7,635 | | 25,334 | | 19,629 | |
| | | | | | | | | |
Corporate General and Administrative | | 13,011 | | 16,978 | | 42,229 | | 45,026 | |
| | | | | | | | | |
Interest | | 17,725 | | 17,204 | | 53,764 | | 44,308 | |
| | | | | | | | | |
Expenses Related To Extinguishment Of Debt | | 8,663 | | 1,619 | | 9,597 | | 1,619 | |
| | | | | | | | | |
Other Operations | | 3,361 | | 4,232 | | 9,107 | | 10,888 | |
| | | | | | | | | |
Intangible Amortization | | 9,716 | | 3,159 | | 19,115 | | 5,465 | |
Total Expenses | | 923,672 | | 739,009 | | 2,412,843 | | 1,890,897 | |
Income Before Income Taxes | | 140,016 | | 109,808 | | 344,868 | | 265,372 | |
State and Federal Income Taxes: | | | | | | | | | |
State | | 7,761 | | 5,439 | | 20,417 | | 11,874 | |
Federal | | 45,517 | | 35,567 | | 109,530 | | 87,367 | |
Total Taxes | | 53,278 | | 41,006 | | 129,947 | | 99,241 | |
Net Income | | $ | 86,738 | | $ | 68,802 | | $ | 214,921 | | $ | 166,131 | |
Per Share Data: | | | | | | | | | |
Basic: | | | | | | | | | |
Income per common share | | $ | 1.40 | | $ | 1.12 | | $ | 3.47 | | $ | 2.68 | |
Weighted average number of common shares outstanding | | 62,001 | | 61,260 | | 61,887 | | 62,088 | |
Assuming dilution: | | | | | | | | | |
Income per common share | | $ | 1.33 | | $ | 1.06 | | $ | 3.30 | | $ | 2.53 | |
Weighted average number of common shares outstanding | | 65,115 | | 65,086 | | 65,158 | | 65,612 | |
HOVNANIAN ENTERPRISES, INC.
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE)
(Unaudited)
Communities Under Development
Three Months - 7/31/04
| | Net Contracts(1)
Three Months Ended
July 31st | | Deliveries
Three Months Ended
July 31st | | Contract Backlog
July 31st | |
| | 2004 | | 2003 | | % Change | | 2004 | | 2003 | | % Change | | 2004 | | 2003 | | % Change | |
Northeast Region | | | | | | | | | | | | | | | | | | | |
Homes | | 855 | | 889 | | (3.8 | )% | 792 | | 647 | | 22.4 | % | 2,522 | | 2,266 | | 11.3 | % |
Dollars | | 267,692 | | 261,624 | | 2.3 | % | 261,470 | | 210,039 | | 24.5 | % | 768,066 | | 613,884 | | 25.1 | % |
Avg. Price | | 313,089 | | 294,290 | | 6.4 | % | 330,139 | | 324,635 | | 1.7 | % | 304,546 | | 270,911 | | 12.4 | % |
Southeast Region(2) | | | | | | | | | | | | | | | | | | | |
Homes | | 989 | | 865 | | 14.3 | % | 1,004 | | 689 | | 45.7 | % | 2,558 | | 1,707 | | 49.9 | % |
Dollars | | 293,707 | | 239,817 | | 22.5 | % | 272,395 | | 165,583 | | 64.5 | % | 772,073 | | 497,907 | | 55.1 | % |
Avg. Price | | 296,974 | | 277,245 | | 7.1 | % | 271,310 | | 240,324 | | 12.9 | % | 301,827 | | 291,685 | | 3.5 | % |
Southwest Region(2) | | | | | | | | | | | | | | | | | | | |
Homes | | 998 | | 637 | | 56.7 | % | 1,045 | | 640 | | 63.3 | % | 1,207 | | 642 | | 88.0 | % |
Dollars | | 179,232 | | 125,292 | | 43.1 | % | 181,491 | | 129,907 | | 39.7 | % | 206,540 | | 127,636 | | 61.8 | % |
Avg. Price | | 179,591 | | 196,691 | | (8.7 | )% | 173,676 | | 202,980 | | (14.4 | )% | 171,119 | | 198,810 | | (13.9 | )% |
West Region | | | | | | | | | | | | | | | | | | | |
Homes | | 1,260 | | 1,093 | | 15.3 | % | 897 | | 1,090 | | (17.7 | )% | 1,933 | | 1,103 | | 75.2 | % |
Dollars | | 507,214 | | 336,890 | | 50.6 | % | 329,254 | | 325,205 | | 1.2 | % | 777,598 | | 359,821 | | 116.1 | % |
Avg. Price | | 402,551 | | 308,225 | | 30.6 | % | 367,061 | | 298,353 | | 23.0 | % | 402,275 | | 326,220 | | 23.3 | % |
Consolidated Total | | | | | | | | | | | | | | | | | | | |
Homes | | 4,102 | | 3,484 | | 17.7 | % | 3,738 | | 3,066 | | 21.9 | % | 8,220 | | 5,718 | | 43.8 | % |
Dollars | | 1,247,843 | | 963,623 | | 29.5 | % | 1,044,610 | | 830,734 | | 25.7 | % | 2,524,277 | | 1,599,248 | | 57.8 | % |
Avg. Price | | 304,204 | | 276,585 | | 10.0 | % | 279,457 | | 270,950 | | 3.1 | % | 307,090 | | 279,687 | | 9.8 | % |
Unconsolidated Joint Ventures | | | | | | | | | | | | | | | | | | | |
Homes | | 71 | | 14 | | N/A | | 27 | | 9 | | N/A | | 281 | | 23 | | N/A | |
Dollars | | 43,388 | | 3,160 | | N/A | | 11,611 | | 1,901 | | N/A | | 172,130 | | 4,975 | | N/A | |
Avg. Price | | N/A | | 225,749 | | N/A | | N/A | | 211,171 | | N/A | | N/A | | N/A | | N/A | |
Total | | | | | | | | | | | | | | | | | | | |
Homes | | 4,173 | | 3,498 | | 19.3 | % | 3,765 | | 3,075 | | 22.4 | % | 8,501 | | 5,741 | | 48.1 | % |
Dollars | | 1,291,231 | | 966,783 | | 33.6 | % | 1,056,221 | | 832,635 | | 26.9 | % | 2,696,407 | | 1,604,223 | | 68.1 | % |
Avg. Price | | 309,425 | | 276,382 | | 12.0 | % | 280,537 | | 270,775 | | 3.6 | % | 317,187 | | 279,433 | | 13.5 | % |
DELIVERIES INCLUDE EXTRAS
Notes:
(1) Net contracts is defined as new contracts signed during the period for the purchase of homes, less cancellations of prior contracts.
(2) The number of net contracts and backlog in the Southwest for quarter ended July 31, 2004 includes the effect of the Great Western Homes acquisition which closed in August 2003. The number of net contracts and backlog in the Southeast for the quarter ended July 31, 2004 includes the effect of the Windward Homes acquisition, which closed in November 2003.
HOVNANIAN ENTERPRISES, INC.
(DOLLARS IN THOUSANDS EXCEPT AVG. PRICE)
(Unaudited)
Communities Under Development
Nine Months - 7/31/04
| | Net Contracts(1)
Nine Months Ended
July 31st | | Deliveries
Nine Months Ended
July 31st | | Contract Backlog
July 31st | |
| | 2004 | | 2003 | | % Change | | 2004 | | 2003 | | % Change | | 2004 | | 2003 | | % Change | |
Northeast Region(2) | | | | | | | | | | | | | | | | | | | |
Homes | | 2,405 | | 1,896 | | 26.8 | % | 2,101 | | 1,540 | | 36.4 | % | 2,522 | | 2,266 | | 11.3 | % |
Dollars | | 778,303 | | 582,015 | | 33.7 | % | 661,998 | | 494,957 | | 33.7 | % | 768,066 | | 613,884 | | 25.1 | % |
Avg. Price | | 323,619 | | 306,970 | | 5.4 | % | 315,087 | | 321,401 | | (2.0 | )% | 304,546 | | 270,911 | | 12.4 | % |
Southeast Region(2) | | | | | | | | | | | | | | | | | | | |
Homes | | 3,132 | | 2,400 | | 30.5 | % | 2,778 | | 1,933 | | 43.7 | % | 2,558 | | 1,707 | | 49.9 | % |
Dollars | | 886,696 | | 637,177 | | 39.2 | % | 716,942 | | 479,865 | | 49.4 | % | 772,073 | | 497,907 | | 55.1 | % |
Avg. Price | | 283,109 | | 265,490 | | 6.6 | % | 258,078 | | 248,249 | | 4.0 | % | 301,827 | | 291,685 | | 3.5 | % |
Southwest Region(2) | | | | | | | | | | | | | | | | | | | |
Homes | | 2,871 | | 1,722 | | 66.7 | % | 2,653 | | 1,519 | | 74.7 | % | 1,207 | | 642 | | 88.0 | % |
Dollars | | 503,157 | | 338,197 | | 48.8 | % | 463,869 | | 309,336 | | 50.0 | % | 206,540 | | 127,636 | | 61.8 | % |
Avg. Price | | 175,255 | | 196,398 | | (10.8 | )% | 174,847 | | 203,645 | | (14.1 | )% | 171,119 | | 198,810 | | (13.9 | )% |
West Region | | | | | | | | | | | | | | | | | | | |
Homes | | 3,600 | | 2,994 | | 20.2 | % | 2,460 | | 2,846 | | (13.6 | )% | 1,933 | | 1,103 | | 75.2 | % |
Dollars | | 1,339,917 | | 882,976 | | 51.8 | % | 860,017 | | 819,369 | | 5.0 | % | 777,598 | | 359,821 | | 116.1 | % |
Avg. Price | | 372,199 | | 294,915 | | 26.2 | % | 349,600 | | 287,902 | | 21.4 | % | 402,275 | | 326,220 | | 23.3 | % |
Other | | | | | | | | | | | | | | | | | | | |
Homes | | N/A | | 2 | | N/A | | N/A | | 9 | | N/A | | N/A | | N/A | | N/A | |
Dollars | | N/A | | 313 | | N/A | | N/A | | 1,261 | | N/A | | N/A | | N/A | | N/A | |
Avg. Price | | N/A | | 156,500 | | N/A | | N/A | | 140,111 | | N/A | | N/A | | N/A | | N/A | |
Consolidated Total | | | | | | | | | | | | | | | | | | | |
Homes | | 12,008 | | 9,014 | | 33.2 | % | 9,992 | | 7,847 | | 27.3 | % | 8,220 | | 5,718 | | 43.8 | % |
Dollars | | 3,508,073 | | 2,440,678 | | 43.7 | % | 2,702,826 | | 2,104,788 | | 28.4 | % | 2,524,277 | | 1,599,248 | | 57.8 | % |
Avg. Price | | 292,145 | | 270,765 | | 7.9 | % | 270,499 | | 268,228 | | 0.8 | % | 307,090 | | 279,687 | | 9.8 | % |
Unconsolidated Joint Ventures | | | | | | | | | | | | | | | | | | | |
Homes | | 301 | | 30 | | N/A | | 56 | | 30 | | N/A | | 281 | | 23 | | N/A | |
Dollars | | 179,174 | | 6,409 | | N/A | | 22,921 | | 6,074 | | N/A | | 172,130 | | 4,975 | | N/A | |
Avg. Price | | 595,262 | | 213,625 | | N/A | | 409,309 | | 202,464 | | N/A | | 612,563 | | 216,295 | | N/A | |
Total | | | | | | | | | | | | | | | | | | | |
Homes | | 12,309 | | 9,044 | | 36.1 | % | 10,048 | | 7,877 | | 27.6 | % | 8,501 | | 5,741 | | 48.1 | % |
Dollars | | 3,687,247 | | 2,447,087 | | 50.7 | % | 2,725,747 | | 2,110,862 | | 29.1 | % | 2,696,407 | | 1,604,223 | | 68.1 | % |
Avg. Price | | 299,557 | | 270,576 | | 10.7 | % | 271,273 | | 267,978 | | 1.2 | % | 317,187 | | 279,433 | | 13.5 | % |
DELIVERIES INCLUDE EXTRAS
Notes:
(1) Net contracts is defined as new contracts signed during the period for the purchase of homes, less cancellations of prior contracts.
(2) The number of net contracts and backlog in the Northeast for the nine months ended July 31, 2004 includes the effect of the Summit Homes acquisition, which closed in April 2003. The number of net contracts and backlog in the Southwest for the nine months ended July 31, 2004 includes the effect of the Brighton Homes and Great Western Homes acquisitions, which closed in December 2002 and August 2003, respectively. The number of net contracts and backlog in the Southeast for the nine months ended July 31, 2004 includes the effect of the Windward Homes acquisition, which closed in November 2003.
