Sales and Revenue Performance - Housing revenues for the year ended October 31, 2024, totaled $2.875 billion with 5,348 homes delivered, resulting in an average sales price of $537,675[57]. - The dollar value of net sales contracts for fiscal 2024 was $2.8 billion, an increase of 10.1% from $2.5 billion in fiscal 2023, with the number of homes contracted rising 11.6% to 5,186[58]. - The company ended fiscal 2024 with 130 active selling communities, up from 113 in the previous year, with an average of 119 active selling communities[59]. - The backlog of signed contracts at October 31, 2024, was 2,052 homes valued at $1.2 billion, a decrease of 6.6% from 2,196 homes valued at $1.3 billion in 2023[62]. - The Northeast region generated $1,007,596,000 in housing revenues from 1,646 homes delivered, with an average sales price of $612,148[57]. - The Southeast region reported housing revenues of $447,804,000 from 878 homes delivered, averaging $510,027 per home[57]. - The West region achieved $1,420,088,000 in housing revenues with 2,824 homes delivered, averaging $502,864[57]. - Unconsolidated joint ventures contributed $539,028,000 in housing revenues from 853 homes delivered, with an average sales price of $631,920[57]. Land and Development Strategy - The company has a risk-averse land acquisition strategy, aiming to limit financial exposure through minimum cash investments and takedown options[41]. - The company increased its lot count, community count, and spending on land and land development during fiscal 2024[37]. - As of October 31, 2024, the company has 240 properties under option, totaling 28,228 developable home sites valued at $2.23 billion[66]. - Controlled land as of October 31, 2024, includes 29,549 total home sites, with a combined book value of $262,105 thousand[66]. - The company has incurred $125 million in option fees and deposits for properties under option as of October 31, 2024[66]. Operational Efficiency - The company has improved construction cycle times by approximately 30 days since the beginning of fiscal 2023, but still experiences increased cycle times of 30-45 days over pre-pandemic averages[49]. - The company maintains efficient operations by utilizing standardized materials and has reduced construction costs by consolidating vendors and executing national purchasing contracts[49]. - Labor and material shortages that arose during the COVID-19 pandemic have improved, with lumber prices decreasing in the second half of fiscal 2022 and into fiscal 2024[67]. - The company has reduced construction and administrative costs by consolidating vendors and executing national purchasing contracts, improving efficiency in operations[67]. Financial Management - The company repurchased $113.5 million, $245.0 million, and $100.0 million in aggregate principal of senior secured notes in fiscal years 2024, 2023, and 2022 respectively[37]. - In fiscal 2024, the company completed a debt exchange resulting in a $75.3 million principal reduction of senior notes and term loans, including a cash payment of $31.5 million[37]. - The company is focused on achieving high returns on invested capital, evaluating new communities based on internal rate of return requirements[40]. Workforce and Diversity - As of October 31, 2024, the company employed 1,878 full-time associates, with 1,211 involved in homebuilding operations[25]. - The company has a diverse associate base, with 27.3% non-white associates and 43.6% of associates being women as of October 31, 2024[28]. - The company is committed to diversity and inclusion, with 27.3% of associates being non-white and 43.6% being women as of October 31, 2024[28]. - The company has a strategy to engage associates through quarterly Town Halls and new communication channels like "Lunch & Learns" and "Coffee Chats"[31]. - The company has a repository of over 500 training modules/courses to facilitate associates' personal and professional growth[34]. Market Trends and Future Outlook - The company anticipates increasingly stringent regulatory requirements that could impact development timelines and costs in the future[73]. - The company anticipates that the majority of its backlog at October 31, 2024, will be completed and closed within the next six to nine months[62]. - The company shifted focus to increasing the availability of quick-move-in homes to provide customers with more certainty on mortgage payments[36]. - The company has increased its inventory of QMI homes as part of its current business strategy since fiscal 2022[48].
Hovnanian Enterprises Inc(HOVNP) - 2024 Q4 - Annual Report