Company: HOVVB
Filing Date: 2025-05-30
Form Type: 10-Q
Source: 0001753926-25-000907
Chunk: 11

Company: HOVNANIAN ENTERPRISES INC
Filing Date: 2025-05-30
Form: 10-Q
Item: Part I, Item 2
Chunk 11
---
 measure. This measure should not be considered as an alternative to homebuilding gross margin determined in accordance with U.S. GAAP as an indicator of operating performance.

Management believes this non-GAAP measure enables investors to better understand our operating performance. This measure is also useful internally, helping management evaluate our operating results on a consolidated basis and relative to other companies in our industry. In particular, the magnitude and volatility of land charges for the Company, and for other homebuilders, have been significant and, as such, have made comparable financial analysis of our industry more difficult. Homebuilding metrics excluding land charges, as well as interest amortized to cost of sales, and other similar presentations prepared by analysts and other companies are frequently used to assist investors in understanding and comparing the operating characteristics of homebuilding activities by eliminating many of the differences in companies’ respective levels of impairments and debt.

Three Months Ended 

Six Months Ended

April 30, 

April 30,

 (Dollars in thousands)  

2025 

2024 

2025

2024

 Sale of homes  
 
$
650,314

$
686,929

$
1,297,228

$
1,260,565

 Cost of sales, excluding interest expense and land charges  

537,600

 531,385  

1,066,345

979,833

 Homebuilding gross margin, before cost of sales interest expense and land charges  

112,714

155,544

230,883

280,732

 Cost of sales interest expense, excluding land sales interest expense  

19,938

21,543

38,676

41,441

 Homebuilding gross margin, after cost of sales interest expense, before land charges  

92,776

134,001

192,207

239,291

 Land charges  

3,056

237

4,096

539

 Homebuilding gross margin  
 
$
89,720

$
133,764

$
188,111

$
238,752

 Homebuilding gross margin percentage  

13.8
%

19.5
%

14.5
%

18.9
% 

 Homebuilding gross margin percentage, before cost of sales interest expense and land charges  

17.3
%

22.6
%

17.8
%

22.3
% 

 Homebuilding gross margin percentage, after cost of sales interest expense, before land charges  

14.3
%

19.5
%

14.8
%

19.0
%    

31    

Cost of sales as a