In This Article:
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Revenue: $3 billion for the year, a 9% increase year-over-year.
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Adjusted Gross Margin: 22% for the year, slightly below the prior year's margin.
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SG&A Ratio: 11.4% for the year.
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Income from Unconsolidated Joint Ventures: $52 million, slightly below guidance.
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Adjusted EBITDA: $456 million for the year, a 7% increase year-over-year.
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Adjusted Pretax Income: $327 million for the year, a 16% increase year-over-year.
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Fourth Quarter Revenue: Just under $1 billion, a 10% increase year-over-year.
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Fourth Quarter Gross Margin: 21.7%, down from the previous year.
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Fourth Quarter Adjusted EBITDA: $159 million.
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Fourth Quarter Adjusted Pretax Income: $126 million.
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Fourth Quarter Contracts: Increased 48% year-over-year.
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Community Count: 147 open for sale communities, a 14% increase from last year.
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Controlled Lots: 41,891 lots, a 32% increase year-over-year.
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Liquidity: $338 million at the end of the fourth quarter.
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First Quarter Fiscal '25 Revenue Guidance: $650 million to $750 million.
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First Quarter Fiscal '25 Adjusted Gross Margin Guidance: 17.5% to 18.5%.
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First Quarter Fiscal '25 SG&A Guidance: 13.5% to 14.5% of total revenue.
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First Quarter Fiscal '25 Adjusted EBITDA Guidance: $55 million to $65 million.
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First Quarter Fiscal '25 Adjusted Pretax Income Guidance: $25 million to $35 million.
Release Date: December 05, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Hovnanian Enterprises Inc (NASDAQ:HOVNP.PFD) reported a 48% year-over-year increase in fourth-quarter contracts, indicating strong demand for their homes.
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The company achieved a 9% increase in total revenues for the fiscal year, reaching over $3 billion.
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Adjusted EBITDA for the year was $456 million, exceeding the high end of the guidance range.
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The company has a significant land-light strategy, with 84% of lots controlled via option, reducing risk and increasing flexibility.
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Hovnanian Enterprises Inc (NASDAQ:HOVNP.PFD) ended the quarter with $338 million in liquidity, above their targeted range, providing financial stability.
Negative Points
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Gross margins decreased year-over-year due to the use of mortgage rate buydowns and other incentives, impacting profitability.
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The company faced delays in deliveries due to hurricanes and utility connection issues, affecting income from joint ventures.
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First-quarter guidance for fiscal 2025 indicates lower gross margins between 17.5% and 18.5%, primarily due to incentives and focus on sales pace.
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SG&A expenses are expected to remain high as a percentage of revenue due to gearing up for community growth.
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The company has not engaged in share buybacks in the fourth quarter, which may be a concern for some investors looking for capital returns.