Hovnanian Enterprises, Inc. (NYSE: HOV), a leading national
homebuilder, today announced revised guidance for the fourth
quarter and full year ended October 31, 2021. The Company is
providing this information in advance of meetings with investors at
an upcoming investor conference.
“We are not immune to the same supply chain
delays that our peers have mentioned recently, which have been even
more pronounced in the month since our last quarterly conference
call,” stated Ara K. Hovnanian, Chairman of the Board, President
and Chief Executive Officer. “As such, given these supply chain
uncertainties and delays, we are revising our guidance for the
fourth quarter and full year. Even with these changes, we expect
year-over-year improvements in pretax profitability for the full
year to exceed 200%.”
For the fourth quarter of fiscal 2021, total
revenues are expected to be between $780 million and $830 million,
adjusted pretax income is expected to be between $45 million and
$60 million and adjusted EBITDA is expected to be between $85
million and $100 million.
For all of fiscal 2021, total revenues are
expected to be between $2.75 billion and $2.80 billion, adjusted
pretax income to be between $160 million and $175 million and
adjusted EBITDA to be between $330 million and $345 million.
“As we look forward, we believe that today’s
more rational, healthy contract pace, which has higher home prices
and gross margins, along with an increase in community count,
should lead to further growth in both total revenues and adjusted
pretax income in fiscal 2022. We currently expect to begin fiscal
2022 with a strong first quarter compared to the first quarter of
fiscal 2021,” concluded Mr. Hovnanian.
About Hovnanian Enterprises,
Inc.Hovnanian Enterprises, Inc., founded in 1959 by Kevork
S. Hovnanian, is headquartered in Matawan, New Jersey and, through
its subsidiaries, is one of the nation’s largest homebuilders with
operations in Arizona, California, Delaware, Florida, Georgia,
Illinois, Maryland, New Jersey, Ohio, Pennsylvania, South Carolina,
Texas, Virginia, Washington, D.C. and West Virginia. The Company’s
homes are marketed and sold under the trade name K. Hovnanian®
Homes. Additionally, the Company’s subsidiaries, as developers of
K. Hovnanian’s Four Seasons® communities, make the Company one of
the nation’s largest builders of active lifestyle communities.
Additional information on Hovnanian Enterprises,
Inc. can be accessed through the “Investor Relations” section of
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.
STATEMENT ABOUT
GUIDANCE:Financial guidance for both the fourth quarter
and full year for fiscal 2021 assumes no adverse changes in current
market conditions, including further deterioration in the supply
chain, and excludes further impact to SG&A expenses from
phantom stock expense related solely to stock price movements from
the closing price of $104.39 at July 30, 2021. Every $4 increase or
decrease in the Company’s common stock price from the end of the
third quarter of fiscal 2021 results in an approximate $1 million
increase or decrease, respectively, of phantom stock expense.
NON-GAAP FINANCIAL MEASURES:The
Company cannot provide a reconciliation between its non-GAAP
projections and the most directly comparable GAAP measures without
unreasonable efforts because it is unable to predict with
reasonable certainty the ultimate outcome of certain significant
items required for the reconciliation. These items include, but are
not limited to, land-related charges, inventory impairment loss and
land option write-offs and loss (gain) on extinguishment of debt.
These items are uncertain, depend on various factors and could have
a material impact on GAAP reported results.
FORWARD-LOOKING STATEMENTS
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
forward-looking statements include but are not limited to
statements related to the Company’s goals and expectations with
respect to its financial results for future financial periods.
Although we believe that our plans, intentions and expectations
reflected in, or suggested by, such forward-looking statements are
reasonable, we can give no assurance that such plans, intentions or
expectations will be achieved. By their nature, forward-looking
statements: (i) speak only as of the date they are made, (ii) are
not guarantees of future performance or results and (iii) are
subject to risks, uncertainties and assumptions that are difficult
to predict or quantify. Therefore, actual results could differ
materially and adversely from those forward-looking statements as a
result of a variety of factors. Such risks, uncertainties and other
factors include, but are not limited to, (1) the outbreak and
spread of COVID-19 and the measures that governments, agencies, law
enforcement and/or health authorities implement to address it; (2)
changes in general and local economic, industry and business
conditions and impacts of a significant homebuilding downturn; (3)
adverse weather and other environmental conditions and natural
disasters; (4) the seasonality of the Company’s business; (5) the
availability and cost of suitable land and improved lots and
sufficient liquidity to invest in such land and lots; (6) shortages
in, and price fluctuations of, raw materials and labor, including
due to changes in trade policies and the imposition of tariffs and
duties on homebuilding materials and products and related trade
disputes with, and retaliatory measures taken by, other countries;
(7) reliance on, and the performance of, subcontractors; (8)
regional and local economic factors, including dependency on
certain sectors of the economy, and employment levels affecting
home prices and sales activity in the markets where the Company
builds homes; (9) increases in cancellations of agreements of sale;
(10) fluctuations in interest rates and the availability of
mortgage financing; (11) changes in tax laws affecting the
after-tax costs of owning a home; (12) legal claims brought against
us and not resolved in our favor, such as product liability
litigation, warranty claims and claims made by mortgage investors;
(13) levels of competition; (14) utility shortages and outages or
rate fluctuations; (15) information technology failures and data
security breaches; (16) negative publicity; (17) high leverage and
restrictions on the Company’s operations and activities imposed by
the agreements governing the Company’s outstanding indebtedness;
(18) availability and terms of financing to the Company; (19) the
Company’s sources of liquidity; (20) changes in credit ratings;
(21) government regulation, including regulations concerning
development of land, the home building, sales and customer
financing processes, tax laws and the environment; (22) operations
through unconsolidated joint ventures with third parties; (23)
significant influence of the Company’s controlling stockholders;
(24) availability of net operating loss carryforwards; (25) loss of
key management personnel or failure to attract qualified personnel;
and (26) certain risks, uncertainties and other factors described
in detail in the Company’s Annual Report on Form 10-K for the
fiscal year ended October 31, 2020 and the Company’s Quarterly
Reports on Form 10-Q for the quarterly periods during fiscal 2021
and subsequent filings with the Securities and Exchange Commission.
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.
Contact: |
J. Larry
Sorsby |
Jeffrey T.
O’Keefe |
|
Executive Vice President & CFO |
Vice President of Investor Relations |
|
732-747-7800 |
732-747-7800 |
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