Sales and Revenue - For the year ended October 31, 2023, consolidated housing revenues totaled $2.63 billion, with 4,878 homes delivered and an average sales price of $539,249[61]. - The dollar value of net sales contracts for fiscal 2023 was $2.51 billion, reflecting a 1.6% increase from $2.47 billion in fiscal 2022, with homes contracted increasing by 3.8% to 4,647[62]. - The backlog of signed contracts decreased by 12.1% to 2,196 homes at October 31, 2023, with sales values aggregating $1.3 billion compared to $1.5 billion in 2022[66]. - The average number of active selling communities increased slightly from 113 in fiscal 2022 to 114 in fiscal 2023, ending with 113 active selling communities[63]. - The Northeast region generated $933,156,000 in housing revenues from 1,618 homes delivered, averaging $576,734 per home[61]. - The Southeast region reported housing revenues of $419,656,000 from 776 homes delivered, with an average sales price of $540,794[61]. - The West region achieved housing revenues of $1,277,645,000 from 2,484 homes delivered, averaging $514,350 per home[61]. - Domestic unconsolidated joint ventures contributed $424,335,000 in housing revenues from 595 homes delivered, with an average sales price of $713,168[61]. Homebuilding Operations - The company is currently offering homes for sale in 113 communities across 27 markets in 13 states, with an average sales price of $539,000 in fiscal 2023[12]. - The company executed "Build-For-Rent" agreements in fiscal 2023, which added incremental sales volume and increased inventory turnover[37]. - The company shifted focus to increasing the availability of quick-move-in homes due to rising interest rates, providing customers with more certainty on mortgage payments[37]. - The company aims to achieve economies of scale by becoming a significant builder in each selected market, differentiating itself from competitors[39]. - The company maintains a risk-averse land acquisition strategy, limiting financial exposure through minimum cash investments and takedown options[43]. - The company is committed to customer satisfaction and quality, recognizing that future success relies on delivering quality homes to satisfied customers[41]. - The company has improved its cycle times but still faces challenges due to material and labor shortages, with expectations for alleviation as home sales slow nationally[51]. - The company has increased its inventory of quick-move-in homes in fiscal 2023 to align with its current business strategy[50]. Workforce and Diversity - As of October 31, 2023, the company employed 1,715 full-time associates, with 1,134 involved in homebuilding operations[26]. - The company has a diverse associate base, with 25.6% non-white associates and 44.3% of associates being women as of October 31, 2023[29]. - 19.0% of the company's associates have been with the company for more than 15 years, with an average tenure of approximately 7.5 years[28]. - The company has formed a Diversity & Inclusion Committee to enhance its initiatives in promoting a diverse and inclusive work environment[30]. - The company has a repository of over 500 training modules to facilitate associates' personal and professional growth[35]. Financial Management - The company repurchased $245.0 million, $100.0 million, and $180.9 million in aggregate principal of senior secured notes in fiscal years 2023, 2022, and 2021, respectively[38]. - The company incurred approximately $79.9 million in option fees and deposits for properties under option, along with an additional $32.1 million in nonrefundable predevelopment costs[70]. - The company walked away from 3,838 lots in fiscal 2023, resulting in a pre-tax income charge of $1.5 million, compared to 5,121 lots and a charge of $5.7 million in fiscal 2022[53]. Market Conditions and Challenges - Labor and material shortages have gradually improved since the COVID-19 pandemic, with lumber prices decreasing in the second half of fiscal 2022 and into fiscal 2023[73]. - The company is subject to extensive regulations that may impact its ability to develop communities, including potential building moratoriums due to insufficient infrastructure[76][79]. - The company is subject to extensive regulations that may affect land development and homebuilding operations, potentially leading to increased costs and delays[76]. - The company experienced a decrease in lumber prices during the second half of fiscal 2022 and into fiscal 2023, following previous supply chain issues[73].
Hovnanian Enterprises Inc(HOVNP) - 2023 Q4 - Annual Report