Company: HOVVB
Filing Date: 2025-12-22
Form Type: 10-K
Source: 0001753926-25-001938
Chunk: 13

Company: HOVNANIAN ENTERPRISES INC
Filing Date: 2025-12-22
Form: 10-K
Item: Item 1
Chunk 13
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Business Strategies 

In response to changing market conditions, we have taken a disciplined and strategic approach to our new land purchases at price points that we believe will generate appropriate investment returns needed to sustain profitability, while taking into consideration the current market environment of elevated sales concessions. The housing market continues to be driven by positive fundamentals and as a result we increased our community count and continued to invest in land and land development during the year. In addition, we intend to continue to focus on our historic key business strategies, as enumerated below. We believe that these strategies separate us from our competitors in the residential homebuilding industry and the adoption, implementation and adherence to these principles will continue to benefit our business.

As a result of the sharp increase in interest rates that began in fiscal 2022, we have shifted our focus to increasing the availability of quick-move-in homes (“QMI homes”). The rationale behind this shift in focus is that QMI homes provide our customers with more certainty on what their mortgage payments will be at closing. QMI homes also allow us to offer customers mortgage rate buydowns that would be cost prohibitive on homes with a longer time until delivery. QMI homes greatly reduce the complexity of choices for our customers and significantly increase efficiencies for our trades, construction and purchasing teams. Beginning in fiscal 2023, we began executing “Build-For-Rent” agreements to supplement our existing for sale business. The Build-For-Rent sales channel added incremental deliveries during fiscal years 2025, 2024 and 2023, which allowed us to increase inventory turnover.

We remain focused on maintaining adequate liquidity and identifying investment opportunities that make economic sense in light of our current sales prices and sales paces. Our excess liquidity in fiscal years 2025, 2024 and 2023 allowed us to repurchase $26.6 million, $113.5 million and $245.0 million in aggregate principal of senior secured notes, respectively. In May 2024, we completed a debt exchange resulting in a $75.3 million principal reduction of our senior notes and term loans, which included an aggregate cash payment of $31.5 million. In September 2025, we issued $900.0 million in aggregate principal amount of senior notes. The net proceeds therefrom, along with cash on hand, were used to redeem the entire principal amount of our then outstanding senior secured notes and payoff in full our secured term loan credit facility. We also extended the maturity