Company Operations - The company is currently offering homes for sale in 140 communities across 27 markets in 13 states, with an average sales price of $519,000 nationwide in fiscal 2025[12]. - The company employed 1,891 full-time associates as of October 31, 2025, with 1,194 involved in homebuilding operations[25]. - The company ended fiscal 2025 with 140 active selling communities, an increase from 130 in the previous year[58]. - The average number of active selling communities increased to 129 in fiscal 2025 from 119 in fiscal 2024[58]. - The company has a strategic approach to land purchases, focusing on price points that will generate appropriate investment returns while considering current market conditions[34]. - The company has extended its partnership with the Building Talent Foundation for another two years to advance education and training for underrepresented groups in the construction industry[28]. - The company has shifted focus to increasing the availability of quick-move-in homes (QMI homes) to provide customers with more certainty on mortgage payments[35]. - The company has executed "Build-For-Rent" agreements to supplement its existing for-sale business, contributing to increased inventory turnover in fiscal years 2023, 2024, and 2025[35]. Financial Performance - Housing revenues for fiscal 2025 totaled $2,852,908 thousand, with an average sales price of $519,088[56]. - For the year ended October 31, 2025, consolidated housing revenues totaled $2,852.9 million, with 5,496 homes delivered and an average sales price of $519,088[56]. - The backlog at October 31, 2025, included signed contracts for 1,517 homes with sales values aggregating $0.9 billion[61]. - The company originated loans in fiscal 2025, with 20.2% of home buyers paying in cash and 80.0% obtaining mortgages[53]. - The company’s financial services segment provides competitive financing, with 58.7% of loans being conforming conventional loans and 40.3% FHA/VA loans in fiscal 2025[53]. Land and Inventory Management - Controlled land as of October 31, 2025, included 21,970 total home sites, with option prices aggregating $1,386,751 thousand[65]. - As of October 31, 2025, the total controlled land inventory is 21,970 home sites, with a combined book value of $178.447 million[65]. - The company has 20,456 home sites under option, valued at $136.382 million, and 1,514 home sites owned, valued at $42.065 million[65]. - The company walked away from 14,902 lots, resulting in charges to income before income taxes of $18.2 million[44]. - The company typically mothballs certain communities during declining markets, reclassifying inventory on its balance sheets[66]. Cost Management and Efficiency - The company has reduced construction and administrative costs by consolidating vendors and executing national purchasing contracts, improving efficiency in operations[67]. - The company improved cycle times by approximately 30 days since the beginning of fiscal 2023, nearing pre-pandemic averages[48]. - Labor and material shortages that arose during the COVID-19 pandemic have improved, with lumber prices easing as supply chain conditions have stabilized[67]. - The company experienced a significant rise in lumber prices due to supply chain challenges, but conditions have improved, easing price pressures[67]. - Labor and material shortages initially caused by the COVID-19 pandemic have improved, but future shortages remain unpredictable[67]. Regulatory Environment - The company is subject to extensive regulations that can cause delays and increase costs in homebuilding operations, including zoning and environmental laws[70][72]. - The company is subject to extensive regulations that can affect land development and homebuilding, including potential building moratoriums due to insufficient infrastructure[70]. Employee Benefits and Initiatives - The company plans to reinstate the tuition reimbursement benefit effective January 1, 2026, which had been suspended since May 2009[32]. - The company has been actively involved in initiatives to advance education and training for underrepresented groups in the residential construction industry through the Building Talent Foundation[28]. Debt Management - The company repurchased $26.6 million, $113.5 million, and $245.0 million in aggregate principal of senior secured notes in fiscal years 2025, 2024, and 2023, respectively[36]. - In September 2025, the company issued $900.0 million in senior notes, using the proceeds to redeem outstanding senior secured notes and pay off its secured term loan credit facility[36]. - The company completed a debt exchange in May 2024, resulting in a $75.3 million principal reduction of senior notes and term loans, including a cash payment of $31.5 million[36].
Hovnanian Enterprises Inc(HOVNP) - 2025 Q4 - Annual Report