Hovnanian Enterprise reported a $72.7 million loss as revenue fell in latest fiscal quarter. The deficit was worse than Wall Street analysts had anticipated, according to a Bloomberg News report in the New York Times.
The Red Bank-headquartered national homebuilding company reported that revenue fell 20 percent, to $255.1 million, from $318.6 million a year earlier, in the quarter ended April 30. Net orders dropped 17 percent.
Here’s a statement from a company press release:
“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.