Company: HOVVB
Filing Date: 2025-02-28
Form Type: 10-Q
Source: 0001753926-25-000367
Chunk: 13

Company: HOVNANIAN ENTERPRISES INC
Filing Date: 2025-02-28
Form: 10-Q
Item: Part I, Item 2
Chunk 13
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 Quarterly Report on Form 10-Q for a further discussion of our unconsolidated joint ventures.

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Homebuilding: Land Sales and Other Revenues

Land sales and other revenues increased $4.5 million for the three months ended January 31, 2025, compared to the same period in the prior year. Revenue associated with land sales can vary significantly due to the mix of land parcels sold. There was one land sale for each of the three months ended January 31, 2025 and 2024. Land sales revenues increased $5.5 million during the three months ended January 31, 2025 compared to the same period in the prior year. Other revenues, which includes interest income, decreased due to lower rates on our cash and cash equivalent accounts during the first quarter of fiscal 2025, partially offsetting the increase in land sales revenues.

Homebuilding: Cost of Sales 

Cost of sales includes expenses for homebuilding and land and lot sales, including inventory impairments and land option write-offs (defined as “land charges” in the tables below). A breakout of such expenses for homebuilding and land and lot sales and the gross margins for each is set forth below.

Homebuilding gross margin, before cost of sales interest expense and land charges, is a non-GAAP financial 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 

January 31, 

 (Dollars in thousands)  

2025 

2024 

 Sale of homes  
 
$
646,914

$
573,636

 Cost of sales, excluding interest expense and land charges  

528,745

 448,448  

 Homebuilding gross margin, before cost