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Article Excerpt
Highlights for the Quarter Ended April 30, 2005
* Earnings per share increased 53% to a record $1.62 per fully diluted share for the second quarter of fiscal 2005, compared with $1.06 per fully diluted share in the same period a year ago. Total revenues were $1.2 billion, a 32% increase over last year's second quarter.
* Earnings for the trailing twelve months ended April 30, 2005 represent an after-tax return on beginning equity (ROE) of 42.1% and an after- tax return on beginning capital (ROC) of 22.5%.
* EBITDA increased 48% to $206.2 million in the fiscal 2005 second quarter, covering interest 9.0 times for the quarter, compared with 6.3 times in the prior year's second quarter. At April 30, 2005, the Company's ratio of net recourse debt-to-capitalization was 48.0%.
* The dollar value of net contracts for the second quarter, including unconsolidated joint ventures, increased 25% to $1.9 billion on 5,328 homes, compared to $1.5 billion on 4,911 homes in last year's second quarter.
* Contract backlog as of April 30, 2005, including unconsolidated joint ventures, was 10,986 homes with a sales value of $3.9 billion, up 61% from the dollar value of backlog at April 30, 2004.
* Management is increasing its projection for fiscal 2005 earnings to exceed $7.00 per fully diluted share, an increase of $0.15 over management's previous projection, and representing more than a 31% increase over 2004 earnings per fully diluted share of $5.35.
RED BANK, N.J., May 31 /PRNewswire-FirstCall/ -- Hovnanian Enterprises, Inc. , a leading national homebuilder, reported net income of $106.1 million, or $1.62 per fully diluted share, on $1.2 billion in total revenues for the quarter ended April 30, 2005. Net income in the second quarter of fiscal 2004 was $70.5 million, or $1.06 per fully diluted share, on total revenues of $918.8 million.
Consolidated deliveries in the second quarter of 2005 were 3,748 homes with an aggregate sales value of $1.2 billion, compared with consolidated deliveries of 3,353 homes in the same period last year with an aggregate sales value of $900.9 million. Homebuilding gross margins, after interest expense included in cost of sales, increased 150 basis points to 25.2%, compared with 23.7% on a comparable basis in last year's second quarter. Stockholders' equity grew 41% to $1.4 billion at April 30, 2005 from $970.2 million at the end of the fiscal 2004 second quarter.
Six-Month Performance
For the six-month period ended April 30, 2005, revenues reached $2.3 billion, up 34% compared to $1.7 billion for the year-earlier period. Net income for the first half of fiscal 2005 increased 46% to $187.6 million, or $2.87 per fully diluted share, compared to $128.2 million, or $1.93 per fully diluted share, in the same period a year ago. Compared to the first six months of 2004, the dollar value of net contracts during the same period in fiscal 2005 increased by 21% and the number of home deliveries rose by 18%, including the impact of unconsolidated joint ventures.
Comments from Management
"Our record results during the fiscal 2005 second quarter were fueled by our leading market positions, our increased geographic diversity, continued pricing power in many of our markets, and further market penetration through our broad product offerings, which target a wide variety of homebuyers," said Ara K. Hovnanian, President and Chief Executive Officer of the Company. "The vast majority of our earnings growth in the second quarter was organic, with more than 93% of the increase in earnings coming from our existing operations that have been in place for more than 12 months. The integration of our acquisitions of Cambridge Homes and Town & Country Homes, which occurred during our...
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