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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended April 30, 2024

OR

Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission file number 1-8551

Hovnanian Enterprises, Inc. (Exact Name of Registrant as Specified in Its Charter)

Delaware (State or Other Jurisdiction of Incorporation or Organization)

22-1851059 (I.R.S. Employer Identification No.)

90 Matawan Road, 5th Floor, Matawan, NJ 07747 (Address of Principal Executive Offices)

732-747-7800 (Registrant’s Telephone Number, Including Area Code)

N/A (Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Class A Common Stock, $0.01 par value per share

HOV

New York Stock Exchange

Preferred Stock Purchase Rights(1)

N/A

New York Stock Exchange

Depositary Shares each representing 1/1,000th of a share of 7.625% Series A Preferred Stock

HOVNP

The Nasdaq Stock Market LLC

(1) Each share of Common Stock includes an associated Preferred Stock Purchase Right. Each Preferred Stock Purchase Right initially represents the right, if such Preferred Stock Purchase Right becomes exercisable, to purchase from the Company one ten-thousandth of a share of its Series B Junior Preferred Stock for each share of Common Stock. The Preferred Stock Purchase Rights currently cannot trade separately from the underlying Common Stock.

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☐

Accelerated Filer

Nonaccelerated Filer ☐

Smaller Reporting Company

Emerging Growth Company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. 5,316,323 shares of Class A Common Stock and 676,175 shares of Class B Common Stock were outstanding as of May 28, 2024.

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

(In thousands, except per share data)

(Unaudited)

April 30,

October 31,

2024

2023

ASSETS

Homebuilding:

Cash and cash equivalents

$ 181,966 $ 434,119

Restricted cash and cash equivalents

8,370 8,431

Inventories:

Sold and unsold homes and lots under development

1,135,232 998,841

Land and land options held for future development or sale

138,641 125,587

Consolidated inventory not owned

143,185 224,758

Total inventories

1,417,058 1,349,186

Investments in and advances to unconsolidated joint ventures

150,674 97,886

Receivables, deposits and notes, net

24,975 27,982

Property and equipment, net

39,593 33,946

Prepaid expenses and other assets

72,747 69,886

Total homebuilding

1,895,383 2,021,436

Financial services

142,559 168,671

Deferred tax assets, net

279,704 302,833

Total assets

$ 2,317,646 $ 2,492,940

LIABILITIES AND EQUITY

Homebuilding:

Nonrecourse mortgages secured by inventory, net of debt issuance costs

$ 85,557 $ 91,539

Accounts payable and other liabilities

379,367 415,480

Customers’ deposits

45,619 51,419

Liabilities from inventory not owned, net of debt issuance costs

86,618 124,254

Senior notes and credit facilities (net of discounts, premiums and debt issuance costs)

932,957 1,051,491

Accrued interest

18,220 26,926

Total homebuilding

1,548,338 1,761,109

Financial services

122,262 148,181

Income taxes payable

- 1,861

Total liabilities

1,670,600 1,911,151

Equity:

Hovnanian Enterprises, Inc. stockholders' equity:

Preferred stock, $0.01 par value - authorized 100,000 shares; issued and outstanding 5,600 shares with a liquidation preference of $140,000 at April 30, 2024 and October 31, 2023

135,299 135,299

Common stock, Class A, $0.01 par value - authorized 16,000,000 shares; issued 6,288,200 shares at April 30, 2024 and 6,247,308 shares at October 31, 2023

63 62

Common stock, Class B, $0.01 par value (convertible to Class A at time of sale) - authorized 2,400,000 shares; issued 736,593 shares at April 30, 2024 and 776,750 shares at October 31, 2023

7 8

Paid in capital - common stock

747,001 735,946

Accumulated deficit

(87,795 ) (157,197 )

Treasury stock - at cost – 1,007,426 shares of Class A common stock at April 30, 2024 and 901,379 shares at October 31, 2023; 27,669 shares of Class B common stock at April 30, 2024 and October 31, 2023

(147,529 ) (132,382 )

Total Hovnanian Enterprises, Inc. stockholders’ equity

647,046 581,736

Noncontrolling interest in consolidated joint ventures

- 53

Total equity

647,046 581,789

Total liabilities and equity

$ 2,317,646 $ 2,492,940

See notes to condensed consolidated financial statements (unaudited).

HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

(In thousands, except per share data)

(Unaudited)

Three Months Ended April 30,

Six Months Ended April 30,

2024

2023

2024

2023

Revenues:









Homebuilding:









Sale of homes

$ 686,929 $ 670,708
$ 1,260,565

$ 1,170,353

Land sales and other revenues

4,284 18,750

9,576


22,307

Total homebuilding

691,213 689,458

1,270,141


1,192,660

Financial services

17,167 14,203

32,435


26,367

Total revenues

708,380 703,661

1,302,576


1,219,027








Expenses:









Homebuilding:









Cost of sales, excluding interest

531,502 540,622

980,715


931,662

Cost of sales interest

21,543 21,425

41,441


36,447

Inventory impairments and land option write-offs

237 137

539


614

Total cost of sales

553,282 562,184

1,022,695


968,723

Selling, general and administrative

46,489 50,456

95,426


98,374

Total homebuilding expenses

599,771 612,640

1,118,121


1,067,097








Financial services

12,023 10,152

23,494


19,205

Corporate general and administrative

32,517 25,079

69,650


50,569

Other interest

8,969 14,501

19,420


29,594

Other (income) expenses, net

(3,128 ) 574

(2,577 )

960

Total expenses

650,152 662,946

1,228,108


1,167,425

Gain on extinguishment of debt, net

- -

1,371


-

Income from unconsolidated joint ventures

11,164 5,408

26,116


12,568

Income before income taxes

69,392 46,123

101,955


64,170

State and federal income tax provision:









State

5,231 1,083

7,437


3,294

Federal

13,325 10,894

19,778


8,014

Total income taxes

18,556 11,977

27,215


11,308

Net income

50,836 34,146

74,740


52,862

Less: preferred stock dividends

2,669 2,669

5,338


5,338

Net income available to common stockholders

$ 48,167 $ 31,477
$ 69,402

$ 47,524








Per share data:









Basic:









Net income per common share

$ 7.12 $ 4.68
$ 10.22

$ 7.05

Weighted-average number of common shares outstanding

6,457 6,166

6,477


6,176

Assuming dilution:









Net income per common share

$ 6.66 $ 4.47
$ 9.57

$ 6.74

Weighted-average number of common shares outstanding

6,902 6,462

6,920


6,463


See notes to condensed consolidated financial statements (unaudited).


HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

THREE AND SIX MONTH PERIODS ENDED APRIL 30, 2024

(In thousands, except share data)

(Unaudited)

   

A Common Stock

   

B Common Stock

   

Preferred Stock

                                         
   

Shares

           

Shares

           

Shares

                                                 
   

Issued and

           

Issued and

           

Issued and

           

Paid-In

   

Accumulated

   

Treasury

   

Noncontrolling

         
   

Outstanding

   

Amount

   

Outstanding

   

Amount

   

Outstanding

   

Amount

   

Capital

   

Deficit

   

Stock

   

Interest

   

Total

 
                                                                                       

Balance, October 31, 2023

    5,345,929     $ 62       749,081     $ 8       5,600     $ 135,299     $ 735,946     $ (157,197 )   $ (132,382 )   $ 53     $ 581,789  

                                                                                       

Stock options, amortization and issuances

    615                                     46                         46  
                                                                                         

Preferred dividend declared ($476.56 per share)

                                                            (2,669 )                     (2,669 )
                                                                                         

Restricted stock amortization, issuances and forfeitures

                                                4,071                               4,071  
                                                                                         
Conversion of Class B to Class A common stock 

16




(16 )





























-















































Changes in noncontrolling interest in consolidated joint ventures

                                                                          (53     (53
                                                                                         

Net income

                                                            23,904                       23,904  
                                                                                         

Balance, January 31, 2024

    5,346,560     $ 62       749,065     $ 8       5,600     $ 135,299     $ 740,063     $ (135,962 )   $ (132,382 )   $ -     $ 607,088  
                                                                                         
Stock options, amortization and issuances

120






















(4 )













(4 )













































Preferred dividend declared ($476.56 per share)





























(2,669 )









(2,669 )













































Restricted stock amortization, issuances and forfeitures

























6,942














6,942













































Conversion of Class B to Class A common stock

40,141


1


(40,141 )

(1 )

























-













































Share repurchases

(106,047 )





























(15,147 )





(15,147 )













































Net income





























50,836










50,836













































Balance, April 30, 2024

5,280,774

$ 63


708,924

$ 7


5,600

$ 135,299

$ 747,001

$ (87,795 )
$ (147,529 )
$ -

$ 647,046













































See notes to condensed consolidated financial statements (unaudited). 


HOVNANIAN ENTERPRISES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

THREE AND SIX MONTH PERIODS ENDED APRIL 30, 2023

(In thousands, except share data)

(Unaudited)

 

   

A Common Stock

   

B Common Stock

   

Preferred Stock

                                         
   

Shares

           

Shares

           

Shares

                                                 
   

Issued and

           

Issued and

           

Issued and

           

Paid-In

   

Accumulated

   

Treasury

   

Noncontrolling

         
   

Outstanding

   

Amount

   

Outstanding

   

Amount

   

Outstanding

   

Amount

   

Capital

   

Deficit

   

Stock

   

Interest

   

Total

 
                                                                                         

Balance, October 31, 2022

    5,376,985     $ 62       705,705     $ 7       5,600     $ 135,299     $ 727,663     $ (352,413 )   $ (127,582 )   $ 15     $ 383,051  
                                                                                         

Stock options, amortization and issuances

    209                                               8                               8  
                                                                                         

Preferred dividend declared ($476.56 per share)