Company: HOVVB
Filing Date: 2025-05-20
Form Type: 8-K
Source: 0001753926-25-000870
Chunk: 1

Company: HOVNANIAN ENTERPRISES INC
Filing Date: 2025-05-20
Form: 8-K
Item: Item 2.02
Chunk 1
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 adjusted income before income taxes to
income before income taxes is contained in the earnings press release.

The attached earnings press release
contains information about total
inventories excluding liabilities from inventory not owned, net of debt
issuance costs and interest capitalized and including investments in and
advances to unconsolidated joint ventures (“ Adjusted Investment”), which is a
non-GAAP financial measure. The most
directly comparable GAAP financial measure is total inventories. A reconciliation for historical periods of
Adjusted Investment to total inventories is contained in the earnings press
release.

The attached earnings press release
contains information about the ratio of Adjusted EBIT return on investment (“ Adjusted
EBIT ROI”), which is the ratio of
Adjusted EBIT for the trailing twelve-months, to the average Adjusted Investment
for the prior five fiscal quarters and

Management believes EBIT, Adjusted EBITDA
and EBITDA to be relevant and useful information as EBIT, Adjusted EBITDA and EBITDA
are standard measures commonly reported and widely used by analysts, investors
and others to measure and benchmark the Company’s financial performance without
the effects of various items the Company does not believe are characteristic of
its ongoing operating performance. EBIT, Adjusted EBITDA and EBITDA do not take
into account substantial costs of doing business, such as income taxes and
interest expense. While many in the financial community consider EBIT, Adjusted
EBITDA and EBITDA to be an important measure of comparative operating
performance, it should be considered in addition to, but not as a substitute
for, income before income taxes, net income and other measures of financial
performance prepared in accordance with accounting principles generally
accepted in the United States that are presented on the financial statements
included in the Company’s reports filed with the Securities and Exchange
Commission. Additionally, the Company’s calculation of EBIT, Adjusted EBITDA
and EBITDA may be different than the calculation used by other companies, and,
therefore, comparability may be affected.

Management believes homebuilding gross
margin, before cost of sales interest expense and land charges, enables
investors to better understand the Company’s operating performance. This
measure is also useful internally, helping management to evaluate the Company’s
operating results on a consolidated basis and relative to other companies in
the Company’s industry. In particular, the magnitude and volatility of land
charges for the Company, and for other