ThitareeSarmkasat Welcome to another installment of our Preferreds Market Weekly Review, where we discuss preferred stock and baby bond market activity from both the bottom-up, highlighting individual news and events, as well as the top-down, providing an overview of the broader market. We also try to add some historical context as well as relevant themes that look to be driving markets or that investors ought to be mindful of. This update covers the period through the first week of March. Be sure to ch ...

Table of Contents ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended January 31, 2024 OR ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Commission file number 1-8551 FORM 10-Q Hovnanian Enterprises, Inc. (Exact Name of Registrant as Specified in Its Charter) (Mark One) Delaware (State or Other Jurisdiction of Incorporation o ...

Key PointsSmall- and micro-cap stocks are more volatile, presenting opportunities and risks.Hovnanian's stock price surge is cited as an example of volatility working in investors' favor.Emphasis on the importance of thorough research before investing in micro-cap stocks.5 stocks we like better than Eastman ChemicalWhen it comes to investing in micro-cap stocks, it can sometimes be a real challenge to distinguish the potential winners from those that might not offer much near-term upside. However, a great w ...

Net Contracts per Community Increased 48% Year-Over-YearIncome Before Income Taxes Increased 80% Year-Over-Year$230 Million was the Highest Quarterly Land and Land Development Spend in 57 Quarters15% Year-Over-Year Growth in Total Revenues MATAWAN, N.J., Feb. 22, 2024 (GLOBE NEWSWIRE) -- Hovnanian Enterprises, Inc. (NYSE:HOV), a leading national homebuilder, reported results for its fiscal first quarter ended January 31, 2024. RESULTS FOR THE THREE-MONTHS ENDED JANUARY 31, 2024: Total revenues increased 15. ...

Exhibit 99.1 HOVNANIAN ENTERPRISES, INC. News Release Contact: Brad G. O'Connor Jeffrey T. O'Keefe Chief Financial Officer & Treasurer Vice President, Investor Relations 732-747-7800 732-747-7800 HOVNANIAN ENTERPRISES REPORTS FISCAL 2024 FIRST QUARTER RESULTS Net Contracts per Community Increased 48% Year-Over-Year Income Before Income Taxes Increased 80% Year-Over-Year $230 Million was the Highest Quarterly Land and Land Development Spend in 57 Quarters 15% Year-Over-Year Growth in Total Revenues MATAWAN, ...

MATAWAN, N.J., Feb. 08, 2024 (GLOBE NEWSWIRE) -- Hovnanian Enterprises, Inc. (NYSE:HOV), a leading national homebuilder, will release financial results for the first quarter ended January 31, 2024, the morning of Thursday, February 22, 2024. The Company will webcast its first quarter earnings conference call at 11:00 a.m. (ET) on Thursday, February 22, 2024. The conference call and accompanying slide presentation will be webcast live through the "Investor Relations" section of Hovnanian Enterprises' website ...

MATAWAN, N.J., Feb. 08, 2024 (GLOBE NEWSWIRE) -- Hovnanian Enterprises, Inc. (NYSE: HOV), a leading national homebuilder, will release financial results for the first quarter ended January 31, 2024, the morning of Thursday, February 22, 2024. The Company will webcast its first quarter earnings conference call at 11:00 a.m. (ET) on Thursday, February 22, 2024. The conference call and accompanying slide presentation will be webcast live through the “Investor Relations” section of Hovnanian Enterprises’ websit ...

STUART, Fla., Jan. 15, 2024 (GLOBE NEWSWIRE) -- K. Hovnanian Homes introduces Salerno Reserve, a new community of single-family homes in Stuart. Salerno Reserve offers LOOKS: a designer-curated collection of beautiful interiors. Buyers can choose between Loft, Farmhouse, Classic or Elements LOOKS, and enjoy cohesive style without the stress. "By whittling down an overwhelming number of design choices, we've been able to focus on making our 'LOOKS' stand out," said Alexander Hovnanian, Executive Vice Preside ...

Business and Risk Factors [Business Overview](index=5&type=section&id=Item%201%20Business) Hovnanian is a major US homebuilder operating in 13 states, focusing on QMI homes and a risk-averse land strategy - The company operates through two main divisions: homebuilding and financial services. The homebuilding operations are divided into three reportable segments: Northeast, Southeast, and West[12](index=12&type=chunk) - In **fiscal 2023**, the company offered homes with base prices ranging from **$135,000** to **$1,770,000**, with an average sales price of **$539,000**[13](index=13&type=chunk) - The company employs a **risk-averse land acquisition strategy**, preferring to use land options to control lots, which limits financial exposure. In **fiscal 2023**, the company walked away from **3,838** lots under option, resulting in a pre-tax charge of **$1.5 million**[44](index=44&type=chunk)[54](index=54&type=chunk) - In response to rising interest rates, the company shifted its focus to increasing the availability of **quick-move-in (QMI) homes** and executed "**Build-For-Rent agreements**" to supplement sales volume in **fiscal 2023**[38](index=38&type=chunk) FY 2023 Housing Deliveries and Revenue by Segment (Consolidated) | Segment | Housing Revenues (in thousands USD) | Homes Delivered | Average Sales Price | | :--- | :--- | :--- | :--- | | Northeast | **$933,156** | **1,618** | **$576,734** | | Southeast | **$419,656** | **776** | **$540,794** | | West | **$1,277,645** | **2,484** | **$514,350** | | **Consolidated Total** | **$2,630,457** | **4,878** | **$539,249** | - As of **October 31, 2023**, the company employed **1,715** full-time associates. The workforce is diverse, with **25.6%** being non-white and **44.3%** being women[27](index=27&type=chunk)[30](index=30&type=chunk) [Risk Factors](index=17&type=section&id=Item%201A%20Risk%20Factors) The company faces significant cyclical homebuilding risks, high leverage, and potential NOL limitations - The homebuilding industry is highly cyclical and significantly affected by changes in economic conditions, including interest rates, employment levels, and consumer confidence, which can impact profitability and liquidity[83](index=83&type=chunk)[84](index=84&type=chunk) - Substantial increases in interest rates, as seen in **fiscal 2022** and **2023**, can impair home affordability, lower demand, and reduce the company's ability to realize its sales backlog[91](index=91&type=chunk) - The company has a **significant amount of debt** (**$1.07 billion** as of **Oct 31, 2023**, excluding certain items), which could limit future financing, require substantial cash flow for debt service, and place it at a competitive disadvantage[127](index=127&type=chunk)[132](index=132&type=chunk)[133](index=133&type=chunk) - **Restrictive covenants** in debt instruments limit the company's ability to, among other things, incur more debt, pay dividends, repurchase stock, and make certain investments. Failure to comply could lead to default[139](index=139&type=chunk)[140](index=140&type=chunk) - The company has a federal **net operating loss (NOL) carryforward** of **$688.3 million**. An "**ownership change**" as defined by Section 382 of the Internal Revenue Code could substantially limit the ability to utilize these NOLs[155](index=155&type=chunk)[156](index=156&type=chunk)[157](index=157&type=chunk) - The company's operations are concentrated in Arizona, California, Florida, New Jersey, Texas, and Virginia, making it vulnerable to regional economic downturns or events in these specific markets[106](index=106&type=chunk)[107](index=107&type=chunk) Financial Information [Market for Common Equity and Share Repurchases](index=38&type=section&id=Item%205%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Hovnanian's Class A common stock trades on NYSE; no public market for Class B or recent equity repurchases - The Class A Common Stock is traded on the New York Stock Exchange under the symbol "HOV"[169](index=169&type=chunk) - The company reported no issuer purchases of its equity securities during the period[171](index=171&type=chunk) [Management's Discussion and Analysis (MD&A)](index=40&type=section&id=Item%207%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) FY23 saw revenue and net income decline due to high interest rates and lower margins, despite strong liquidity [Overview and Market Conditions](index=41&type=section&id=Overview%20and%20Market%20Conditions) FY23 housing market faced rising interest rates, prompting incentives and QMI homes, which improved demand and liquidity - The company used its increased inventory of **QMI homes** and offered mortgage interest rate buydowns to combat the impact of rising interest rates and provide customers with more certainty on mortgage pricing[183](index=183&type=chunk) - A low supply of existing homes for sale led to increased demand for new homes, allowing the company to increase net prices in approximately **54%** of its communities during **Q4 2023**[184](index=184&type=chunk) - In **FY2023**, the company spent **$679.3 million** on land and development, repurchased **$245.0 million** of senior secured notes, and ended the year with total liquidity of **$564.2 million**[186](index=186&type=chunk) [Results of Operations](index=43&type=section&id=Results%20of%20Operations) FY23 total revenues decreased **5.7%** to **$2.76 billion** due to fewer deliveries and lower gross margins, partially offset by increased JV income Total Revenues Breakdown (FY2023 vs FY2022) | Revenue Source | 2023 (in thousands USD) | 2022 (in thousands USD) | Variance (in thousands USD) | | :--- | :--- | :--- | :--- | | Sale of homes | **$2,630,457** | **$2,840,454** | **$(209,997)** | | Land sales | **$48,217** | **$16,202** | **$32,015** | | Other revenues | **$17,254** | **$4,035** | **$13,219** | | Financial services | **$60,088** | **$61,540** | **$(1,452)** | | **Total Revenues** | **$2,756,016** | **$2,922,231** | **$(166,215)** | Homebuilding Gross Margin Analysis (FY2023 vs FY2022) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Homebuilding gross margin percentage | **19.6%** | **21.5%** | | Homebuilding gross margin %, before interest & land charges | **22.7%** | **25.0%** | - Inventory impairments and land option write-offs decreased significantly to **$1.5 million** in **FY2023** from **$14.1 million** in **FY2022**[209](index=209&type=chunk) - The company recorded a net loss on extinguishment of debt of **$25.6 million** in **FY2023**, primarily from redeeming and refinancing several series of senior secured notes[191](index=191&type=chunk)[231](index=231&type=chunk)[232](index=232&type=chunk) [Homebuilding Operations Analysis](index=48&type=section&id=Homebuilding%20Operations%20Analysis) Homebuilding operations saw increased sales pace but volatile cancellation rates, leading to a **16.4%** backlog value decline to **$1.1 billion** - Net contracts per average active selling community increased to **40.8** in **FY2023** from **39.6** in **FY2022**, indicating a **faster sales pace**[213](index=213&type=chunk) Quarterly Contract Cancellation Rates (as % of Gross Sales) | Quarter | 2023 | 2022 | | :--- | :--- | :--- | | First | **30%** | **14%** | | Second | **18%** | **17%** | | Third | **16%** | **27%** | | Fourth | **25%** | **41%** | Consolidated Contract Backlog (Year-End) | Metric | Oct 31, 2023 | Oct 31, 2022 | | :--- | :--- | :--- | | Total contract backlog (in thousands USD) | **$1,060,614 thousand** | **$1,268,679 thousand** | | Number of homes | **1,824** | **2,186** | [Capital Resources and Liquidity](index=54&type=section&id=Capital%20Resources%20and%20Liquidity) The company maintained **$564.2 million** in liquidity in FY23, driven by debt refinancing and share repurchases - Total liquidity at **October 31, 2023** was **$564.2 million**, comprising **$434.1 million** in homebuilding cash and **$125.0 million** available under its revolving credit facility[242](index=242&type=chunk) - Cash provided by operating activities was **$435.3 million** in **FY2023**, a **significant increase** from **$89.5 million** in **FY2022**[131](index=131&type=chunk)[244](index=244&type=chunk) - In **FY2023**, the company undertook several **debt management actions**, including redeeming **$200.0 million** of its **7.75%** Notes, repurchasing **$45.0 million** of its **10.0%** Notes, and refinancing several other notes with new issues due in **2028** and **2029**[231](index=231&type=chunk)[232](index=232&type=chunk)[233](index=233&type=chunk)[234](index=234&type=chunk) - The company repurchased **118,478** shares of its Class A common stock for **$4.8 million** during **fiscal 2023**. As of year-end, **$33.0 million** remained available under the repurchase authorization[263](index=263&type=chunk)[502](index=502&type=chunk) [Inventories and Land Position](index=59&type=section&id=Inventories%20and%20Land%20Position) FY23 saw total inventory decrease by **$86.2 million**, with a strategic increase in QMI homes and stable controlled home sites Total Controlled Home Sites (Consolidated) | Date | Owned | Optioned | Total Home Sites | | :--- | :--- | :--- | :--- | | Oct 31, 2023 | **7,337** | **24,389** | **31,754** | | Oct 31, 2022 | **9,022** | **22,496** | **31,800** | - The number of started or completed unsold homes and models increased to **909** at the end of **FY2023** from **739** at the end of **FY2022**, a **strategic move** to increase the availability of **QMI homes**[274](index=274&type=chunk)[275](index=275&type=chunk) - The company utilizes land banking and model sale-leaseback arrangements, which are accounted for as financings. As of **October 31, 2023**, this "**Consolidated inventory not owned**" totaled **$224.8 million**[270](index=270&type=chunk)[388](index=388&type=chunk) [Market Risk Disclosures](index=68&type=section&id=Item%207A%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Market risk is primarily interest rate-related but limited due to fixed-rate long-term debt and short-term mortgage hedging - The company has **limited exposure** to variable interest rates as substantially all of its long-term debt requires **fixed payments**[302](index=302&type=chunk) Long-Term Debt Maturity Schedule (as of Oct 31, 2023) | Maturity Year (Fiscal) | Principal (in thousands USD) | Weighted-Avg Interest Rate | | :--- | :--- | :--- | | 2026 | **$204,092** | **11.55%** | | 2027 | **$39,551** | **5.00%** | | 2028 | **$306,498** | **8.53%** | | Thereafter | **$520,120** | **10.58%** | | **Total** | **$1,070,261** | **9.97%** | [Controls and Procedures](index=68&type=section&id=Item%209A%20Controls%20and%20Procedures) Management and auditors concluded the company's disclosure controls and internal control over financial reporting were effective - Management concluded that the company's disclosure controls and procedures were **effective** as of **October 31, 2023**[309](index=309&type=chunk) - Deloitte & Touche LLP audited and found the company's internal control over financial reporting to be **effective** as of **October 31, 2023**[313](index=313&type=chunk)[350](index=350&type=chunk) Corporate Governance [Directors, Executive Officers, Compensation, and Related Matters](index=70&type=section&id=Items%2010-14) This section's detailed information is largely incorporated by reference from the company's definitive proxy statement - Information required by Items 10, 11, 12, 13, and 14 is largely incorporated by reference from the company's definitive proxy statement to be filed for its annual meeting on **March 21, 2024**[317](index=317&type=chunk)[325](index=325&type=chunk)[326](index=326&type=chunk)[327](index=327&type=chunk)[328](index=328&type=chunk) - The company has adopted a **Code of Ethics** applicable to all associates and directors, as well as **Corporate Governance Guidelines**, which are available on its website[321](index=321&type=chunk)[322](index=322&type=chunk)[323](index=323&type=chunk) Financial Statements and Notes [Auditor's Report](index=83&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) The auditor issued an unqualified opinion on financial statements and internal controls, identifying warranty and construction defect reserves as a Critical Audit Matter - The auditor issued an **unqualified (clean) opinion** on both the financial statements and the effectiveness of internal control over financial reporting[350](index=350&type=chunk) - A **Critical Audit Matter** was identified concerning the estimation of reserves for **warranty costs and construction defects**. This was due to the **high degree of complexity, subjectivity, and judgment** required by management in determining the liability, which necessitated **increased audit effort** and the use of **actuarial specialists**[358](index=358&type=chunk)[359](index=359&type=chunk) [Consolidated Financial Statements](index=85&type=section&id=Consolidated%20Financial%20Statements) FY23 financial highlights include **$2.49 billion** total assets, **$581.8 million** equity, **$2.76 billion** revenues, **$205.9 million** net income, and **$435.3 million** operating cash flow Consolidated Balance Sheet Highlights | (In thousands USD) | Oct 31, 2023 | Oct 31, 2022 | | :--- | :--- | :--- | | Total Inventories | **$1,349,186** | **$1,519,184** | | Total Assets | **$2,492,940** | **$2,562,030** | | Senior notes and credit facilities, net | **$1,051,491** | **$1,146,547** | | Total Liabilities | **$1,911,151** | **$2,178,979** | | Total Equity | **$581,789** | **$383,051** | Consolidated Statement of Operations Highlights | (In thousands USD) | FY 2023 | FY 2022 | FY 2021 | | :--- | :--- | :--- | :--- | | Total Revenues | **$2,756,016** | **$2,922,231** | **$2,782,857** | | Income before income taxes | **$255,951** | **$319,753** | **$189,861** | | Net Income | **$205,891** | **$225,490** | **$607,817** | | Diluted EPS | **$26.88** | **$29.00** | **$85.86** | Consolidated Statement of Cash Flows Highlights | (In thousands USD) | FY 2023 | FY 2022 | FY 2021 | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | **$435,275** | **$89,466** | **$210,213** | | Net cash (used in) provided by investing activities | **$(78,235)** | **$(2,152)** | **$8,996** | | Net cash used in financing activities | **$(261,711)** | **$(16,520)** | **$(217,273)** | [Notes to Financial Statements](index=93&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide critical details on accounting policies, debt, segment performance, NOLs, joint ventures, and litigation matters - **(Note 9)** The company executed a **major refinancing** in **October 2023**, issuing **$225.0 million** of **8.0%** Notes due **2028** and **$430.0 million** of **11.75%** Notes due **2029** to redeem several series of notes maturing in **2026**[455](index=455&type=chunk)[456](index=456&type=chunk) - **(Note 11)** The company has remaining federal **Net Operating Loss (NOL) carryforwards** of **$688.3 million**. A valuation allowance of **$71.9 million** is maintained against certain state NOLs and tax credits that are not expected to be realized[486](index=486&type=chunk)[487](index=487&type=chunk) - **(Note 12)** The company recorded **no inventory impairments** in **FY2023**, compared to **$8.4 million** in **FY2022**. Write-offs for abandoned land options and other costs were **$1.5 million**, down from **$5.7 million** in the prior year[491](index=491&type=chunk)[493](index=493&type=chunk) - **(Note 16)** Warranty and construction defect reserves stood at **$89.6 million** at year-end. In **fiscal 2023**, an additional **$10.1 million** was added to reserves due to an updated assessment of claims history[520](index=520&type=chunk)[522](index=522&type=chunk) - **(Note 18)** The company reached a **settlement** in the Four Seasons at **Great Notch case** in **December 2023**. The settlement amount was not materially different from what had been reserved[530](index=530&type=chunk) - **(Note 20)** The company actively uses **unconsolidated joint ventures**. In **FY2023**, it contributed numerous communities to new and existing JVs, generating significant cash, and also consolidated the assets of other JVs[537](index=537&type=chunk)[538](index=538&type=chunk)[539](index=539&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended July 31, 2023 OR ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission file number 1-8551 Hovnanian Enterprises, Inc. (Exact Name of Registrant as Specified in Its Charter) Delaware (State or Other Jurisdiction of Incorporation or O ...