HOVNANIAN ENTERPRISES, INC. Item 2.02. Results of Operations and Financial Condition.
On
The information in this Current Report on Form 8-K and the Exhibit attached hereto is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
The attached earnings press release contains information about consolidated earnings before interest expense and income taxes ("EBIT") and before depreciation and amortization ("EBITDA") and before inventory impairment loss and land option write-offs and gain on extinguishment of debt ("Adjusted EBITDA"), which are non-GAAP financial measures. The most directly comparable GAAP financial measure is net (loss). A reconciliation for historical periods of EBIT, EBITDA and Adjusted EBITDA to net (loss) is contained in the earnings press release.
The attached earnings press release contains information about homebuilding gross margin, before cost of sales interest expense and land charges, and homebuilding gross margin percentage, before cost of sales interest expense and land charges, which are non-GAAP financial measures. The most directly comparable GAAP financial measures are homebuilding gross margin and homebuilding gross margin percentage, respectively. A reconciliation for historical periods of homebuilding gross margin, before cost of sales interest expense and land charges, and homebuilding gross margin percentage, before cost of sales interest expense and land charges, to homebuilding gross margin and homebuilding gross margin percentage, respectively, is contained in the earnings press release.
The attached earnings press release contains information about (loss) before income taxes excluding land-related charges and gain on extinguishment of debt, which is a non-GAAP financial measure. The most directly comparable GAAP financial measure is (loss) before income taxes. A reconciliation for historical periods of (loss) before income taxes excluding land-related charges and gain on extinguishment of debt to (loss) before income taxes is contained in the earnings press release.
Management believes EBITDA to be relevant and useful information as EBITDA is a
standard measure commonly reported and widely used by analysts, investors and
others to measure and benchmark the Company's financial performance without the
effects of various items the Company does not believe are characteristic of its
ongoing operating performance. EBITDA does not take into account substantial
costs of doing business, such as income taxes and interest expense. While many
in the financial community consider EBITDA to be an important measure of
comparative operating performance, it should be considered in addition to, but
not as a substitute for, (loss) before income taxes, net (loss) and other
measures of financial performance prepared in accordance with accounting
principles generally accepted in
Management believes homebuilding gross margin, before cost of sales interest expense and land charges, enables investors to better understand the Company's operating performance. This measure is also useful internally, helping management to evaluate the Company's operating results on a consolidated basis and relative to other companies in the Company's 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 financial analysis of the Company's 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 levels of debt. Homebuilding gross margin, before cost of sales interest expense and land charges, should be considered in addition to, but not as an alternative to, homebuilding gross margin determined in accordance with GAAP as an indicator of operating performance. Additionally, the Company's calculation of homebuilding gross margin, before cost of sales interest expense and land charges, may be different than the calculation used by other companies, and, therefore, comparability may be affected.
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Management believes (loss) before income taxes excluding land-related charges
and gain on extinguishment of debt to be relevant and useful information because
it provides a better metric of the Company's operating performance. (Loss)
before income taxes excluding land-related charges and gain on extinguishment of
debt should be considered in addition to, but not as a substitute for, (loss)
before income taxes, net (loss) and other measures of financial performance
prepared in accordance with accounting principles generally accepted in
Item 9.01. Financial Statements and Exhibits. (d) Exhibits. Exhibit 99.1 Earnings Press Release-Fiscal First Quarter EndedJanuary 31, 2020 .
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