Hovnanian Enterprises (HOV) 28 Feb 232023 Q1 Earnings call transcript

Good morning, and thank you for joining us today for Hovnanian Enterprises Fiscal 2023 First Quarter Earnings Conference Call. An archive of the webcast will be available after the completion of the call and run for 12 months. This conference is being recorded for rebroadcast, and all participants are currently in a listen-only mode.

Management will make some opening remarks about the first quarter results and then open the line for questions. The company will also be webcasting a slide presentation, along with the opening comments from management. on page available website the are www.khov.com. at slides the of Investors company's The would follow like log who listeners Those to the on along website. to now should

Vice call I ahead. to turn like Relations. the would Jeff please to O’Keefe, President, go Investor Jeff, over

be conference Jonathan, historical you XXXX. all as of XXXX. All the considered call review in morning's for XX, facts and thank you, ended for January Securities our participating provisions within call statements results Litigation to statements not the first Safe of Thank the Act that should of this are this in Private forward-looking the quarter, Reform which meaning Harbor

Such any implied by factors company or of statements uncertainties or the and cause future achievements and be expressed statements. forward-looking or and risks materially different achievements results, that to involve performance from other actual known unknown the may results, performance,

to, goals its Such for not are to limited forward-looking to respect related with company's include, statements financial financial expectations periods. statements the future but results and

believe we intentions, suggested and reasonable, expectations are statements no plans, that be can intentions or give forward-looking such will achieved. expectations that we such by or assurance reflected plans, in our Although,

adversely speak quantify. made, Therefore, statements subject actual results future or forward-looking those of nature, a differ they uncertainties statements as from and and variety are forward-looking result risks, factors. to of their By or results, date difficult of are are predict to the of guarantees as are not only performance and assumptions a materially that could

MD&A for October the fiscal Factors factors Securities Form with particularly Commission. and and Annual statement the uncertainties detail entitled, and filings Such the entitled Risk XX, the in XX-K in Harbor Analysis, other subsequent on and our in Discussion Exchange ended described Safe and Report and year XXXX risks portion of are Management's sections

future events, laws, result Except forward-looking changed any to information, no other any as of statements, update a whether as or applicable required obligation undertake reason. by or new otherwise we security publicly revise circumstances,

President today and Officer Ara O’Connor, and Vice President Vice Senior and CFO; Hovnanian, Sorsby, Executive Accounting me Joining Brad Chief are Chairman, and Treasurer. CEO; Larry President,

turn I'll call over Ara. now the to

going our environment. I'm follow more usual and will on results, me quarter housing Sorsby, details up Larry the comment Jeff. we'll to our current CFO and to I'll with Thanks, it review open Q&A. first as also

revenues On million and compare gross million Slide of quarter X, adjusted we million, first and to of within of income adjusted Total guidance. were results range. pre-tax guidance our XX.X% $XXX of our $XX EBITDA our all margin $XX adjusted

is above ratio SG&A our slightly guidance. Our

increases impacted significant mortgage year-over-year High the uncertainty, XXXX. and inflation, rates economic throughout adversely second in of short housing half demand calendar

can X, the you see on XXXX. this X% fiscal upper led in XXXX revenues of left-hand compared to in to in starting the As a quarter first slide corner, decline

is our been no traditionally has exception. and this quarter first year Our certainly quarter, slowest

on call. our However, because expect year, new remainder above strength and our specific of average recent next we gross financial the the backlog, both some home and backlog, guidance pace on toward more of give and end of in of sales for contracts we'll the improvements margins the performance the quarter better in

to clearing enhance to of XX.X% portion our that our affordability basis this lumber. XX.X% gross market positive increase year can last construction impact Moving quarter point by concessions prices, incentives the first partially offset gross impacted last margin including year. and were adversely home XXX adjusted of our compared upper the costs, This compared homes in slide, year. right-hand margins and the you lower was the define was see to To by a of

show SG&A slide portion compared lower In to left-hand last that last million can XX.X% compared you slide, was million of portion lower adjusted result a $XX our year. right-hand that EBITDA year. XX.X% the as we see to year Primarily revenues, was the the of $XX this declining of on the

was pre-tax portion adjusted left-hand in X, that $XX see compared million Slide the can our you On of the million year. $XX quarter last income to

On the $XX see million, our can year's from first million slide, net that XXXX the in a tax income income was energy-efficient for credits of right-hand compared you quarter which million quarter. net the $X home in first to portion $XX of benefit included last

to Turning Slide X.

but portion are contracts that left-hand the down can of quarter On significantly see quarter year the to you compared level first the a first we the fiscal community before achieved COVID. of ago, for the are per close to in slide, XXXX

is much a number, monthly picture. low positive the a Although, show more quarterly trend contracts

XXX right, community, contracts the show XXXX. fiscal in on Here build-for-rent per monthly excluding we contracts including and

impact I'm low focus positive going our continued to with the per November’s trend of February contracts. community per contracts increased in which above build-for-rent demand ended to of positive excluding quarter per the in This From monthly December X.X community, X.X point we in X.X the February and community on contracts surge COVID before pace with occurred. X.X, XXXX through January. the is XX, increasing to and contracts the

well days but positive strong to give wanted we season. in certainly We spring the you remaining selling for this transparency. still February, bodes believe trend We up-to-the-moment sales a have two

our home Given over the the month. recent raised prices communities we in around increase the in approximately modestly last of demand, one-third country

uncertain mortgage despite were week have the we additional this past climbed one environment, months. the sales in market. to into this week, Last week rates almost our had best insight sales in X%, Just

graph, sales built on our BFR for see and As rent you sales can booster of little homes further. a our the

three Similar quarter many contracts per what fourth slide now out we the and segments. by it's reported, what segments. the that this clear we lower in than segment in Northeast for reported periods or XX'XX, similar have And West our homebuilding community to of X, on contracts of break our community Southeast to were our per quarter first geographic

we show community contracts On the for several years. XX, per past slide annual

same the before pandemic. XX.X%, we bar for see can on is year XXXX right the to contracts. it contracts of XXXX, of improving far shows the the or contracts for results, the adjusted contract had on contracts of below base the seasonally the slide You level portion and that XX.X%, build-for-rent The to-date left. excluding the excluding full community community retreated XX year full per of far At still February per the annualized preliminary shown BFR normalized

us including closer the BFR of sales with pace, Our pace normalized gets to a result XX.X%.

Turning to XX. slide

XX.X appears community. You in our February improvement. results month-by-month September contract an adjusted per per seasonally can to-date see progression at we in the rapid pace Since dramatic a decline shown started of September, month troughed and that our and every Clearly, with the community. preliminary annualized coming has contracts May with improvement it XX.X%.

you of percentage cancellation rate as the XX% our contracts a first normal during above to of turn XX, still can cancellation slide you was see our rates. gross If quarter

the improvement sequentially fourth XX% in rate we an quarter. However, showed the it is from

XX% results XXXX. back and rates to The rates turn XX% a you XX, improved cancellation preliminary average monthly down our here each are basis, gross peak rates at then. February to to beginning cancellation have you cancellation in in monthly been greatly. steadily If can October month On coming slide have that see similar typical of the down February seemed of trend the since to

website visits continue activity our XX. to be Another show positive website strong. slide is trend daily on several over years our the past We

the is we have indicator think said future past, As in leading this a we of demand.

the graph dark website community bottom of the line per daily XXXX the surge. show fiscal fiscal new visits near is high The blue and had visits. for representing the with line the XXXX Both we Here, year years website the pre-COVID in XXXX. green demand these time COVID line year extremely grey during homes visits fiscal of recent is during elevated of website

daily 'XX with year shown fiscal a added visits we've XX, per yellow slide line. bright On community,

website the The several past better recent levels in months. we than website translated closer to higher our surge. normal of encouraging has during activities levels and levels Over high experienced. been high the of that This COVID visits are the visits to website the months, pre-COVID experienced much levels contracts continuation we past have few the clearly of

I'll we that provide current we close they certainty our what begin construction. been taking that consider the pivot would call, a to we market. day on conference temporary On can see our consumers address move to steps quickly. we are have talked that to home QMIs, We have more closing. as QMI on to now about update be homes seeking we To you with, in continue last begin at to them, quick payments be in customers more order with call mortgage the their our or homes a several

on higher QMI X.X during can rise, the significant QMIs that the to you gone consciously If After is to and QMIs of we of we've of 'XX per than community demand, see to but per community in before surge average, COVID 'XX. quarter This slide discussed we historical last demand. just the the there in surge a of first turn in from shortage the X.X are quarter. XX, are you end the level QMI third of the our COVID levels had quarter similar in

Consumer our a of say, had about increase. all our year, quite to QMI sales even Since we historically, versus would the QMIs QMI about more XX% beginning sales in seen stronger. of of our XX% venture available certainly fiscal demand we've the strong. communities, increase for sales remains that been to XX% representing our have I'd if

few with per construction. and discussed target homes QMIs beginning Our a few quarter a temporary we QMI remains through homes just as last seven approximately community construction partly

get homes The excessive difficult homes match to for up competition this current continuing homes. new to at homes QMIs make pace, it an we Recent sales these other certain to don't for think we start we're selling that Furthermore, homes we completion. seven will existing and made sales per level unsold before start new sale. to community, with have our plan Once that schedules level. the on are then we focus of keep approach

slide million the than number of the less the at is of over level lower currently The sale sales. for On of helps on certainly stands homes country existing which our is show homes homes. for XXX,XXX are historical homes, XX, existing half sale X average, that we that

to is Another fiscal of impactful After monitor on became incentives community-by-community have year competitors' concessions respect use contracts. concessions. more our ended, aggressive with closely 'XX use we concessions taken our our and of on and a We we step basis. with incentives new

Our indicates worked that market we and improving steps walked through, that just trend homes. sell the you found per clearing to price these in contracts I right community,

for what for prices needs paying rates, incentive mortgage not continue so choice There's a we as on test. incentives for consumers discounts on such permanent to or meet their discounting choices, customers select a offer would below-market on offering one-size-fits-all or upgrades paying a consumers, offer temporary, closing options to all or costs, QMIs. We home typically

are highest after increasing selling Even of today margin home challenging range, XX%. the historical of for we on above are the margin percent of the gross new general, reserved more sites slightly average community. in our levels our challenging XXs average remain our more homes In use our low incentives the in that incentives, adjusted

generally open our we higher When or One be we're market-driven for than concessions despite rather homebuilders incentives high and continue matter, of and prices new other communities. lower concessions lower lumber margins base new today, is starting with using incentives costs. on that that use to large reason communities,

Additionally, achieve our we could who our costs against efforts in savings providers thus held starts. construction each our been We and other see lowering home. a purchasing far, friendly lower future where costs successful material we with seek partners hit and per divisions the our trade our most for blips spoke have competition to to

[ph] down the from housing housing taking slowed of has into the phase after COVID account Even hot rebound, recent the surge. red the industry

and partners industry are of increased construction trade some successfully increases. back surge. We during the costs Our the COVID slowing today our those

the slowing. Now market that is

part as to beyond, of latter XXXX begin The should homes benefits impact the are blips we and positively of that starting now. margins we purchasing our deliver the just the in

and reviewing are an basis decisions plan sure that are obviously we're our the taking continue light conditions. shortly. finalize on of steps appropriate changing we a situation, to This needs market reassess we in make we'll and Additionally, in to our to is division-by-division staffing evolving actions

Sorsby, Larry Officer. Financial turn now to our it over I'll Chief

Ara. start I'm going Slide to XX. Thanks, with

communities communities companies our down XXX of see ability sale for continued that are can slowing sale. have these company to utility communities. If the not been we with number higher. open present and would ended new for open problems for open Utility to even delays, quarter You our

fiscal Even count long community land pre-COVID schedules, with development We are the our levels. recent during will pace community achieve it XXXX. our continued sales in that grow we grow project growth. and makes we processes to count trying slower Ironically, entitlement count more to challenging our community to increase

About out come openings sell place means pace and previously will our from Southeast the While growth, the West. XX% XXXX and faster improved revenue segments community anticipated. leads than we of XX% our still will of it Northeast fiscal in take to communities also expected

the in segments, turns it As a Southeast recent is out, Northeast better trends and that and margin given our sales fortuitous ratio.

in increase mortgage most acquisitions. summer, we rapid the new last suspended land During rates

As a we result, the of lots. XX, fiscal that in show quarter our second XXXX on lot Slide count at peaked XX,XXX

of During XX,XXX the quarter lots. each lot ended quarters, decreased count XXXX we first with of fiscal subsequent and our the

Given are once pace, land parcels our teams again meet our pursuing recent increase our sales underwriting land in new standards. actively that

using home to underwriting in self-adjust pace construction of prices, rate return, market By a sales conditions. current internal our current standards underwrite XX-plus and current percent the cost automatically to changes

land is It averse owned our option to only and over our the of while our As decreased declined focus have with lots since XX% on that time stated time highlight second land we quarter through very XX% by position is our position strategy fiscal same contracts. risk controlling primarily the time by again, important option period. XXXX, land

also XX% of total the out to stronger Northeast segments point I West. want our XX% lots in in that versus and Southeast are our

been increase inventory to return options our with have deliberately the reduce well risk of on land. as to associated our our as and investments owned land We use increasing turnover

in XX, XXXX. XXXX option from Slide a to This first our strongly a of On of by in specific fiscal land XX% we to has of the gives strategy, make renegotiate quarter lots terms. and continue flexibility first and the to in and owned fiscal show of XX% quarter our controlled percentage market been focus increased us of lots price A declining progress. low risk we land percentage mitigates

and On controlled Slide XX% were to the November prior housing our the which XX, lots vintage us XXXX. X, of position of land were strong today's November of were was under majority underwritten contract still land total recently vast provides lots we at show than XXXX, lower returns. to XX,XXX The position. while our home and in delivering market, our and concessions margins incentives prices increase those with XXXX. before of flexibility and more controlled put XX% X, controlled total XXXX XX%

to increase all our our mitigate land XXXX fiscal controlled controlled turnover Keeping was or land of risk virtually XXXX and and in fiscal all with our owned of vintage strategy earlier. by inventory further was virtually and options XXXX land

at the we X% share million the our repurchase If average from our over shares undervalued two price of we of how spent was, Given stock $XX.XX quarters. past $XX may price repurchasing our approximately shares in outstanding an future. declines stock current levels, additional

high $XXX to Turning million XX. quarter of the liquidity $XXX above with land of than the liquidity, first $XXX slide spend range. more targeted in our ended After of end our million we million quarter,

now highest we land Turning our slide peers, XX. that controlled options. to you third Compared see via the percentage have to of

enhance our land use risk. to inventory We capital reduce turns, to and continue to options whenever returns higher achieve possible on

for shorter With year X.X a supply and supply of XX. is us having We a owned second-lowest supply with in year our risk Turning along owned have lots owned supply, lots, years we strong of market. way stable option less land lots housing good the of lots to a a supply slide reduce to of show peers.

or slide our earlier both were see which XXXX was and total fiscal supply five-and-a-half-year prices position owned. On land, options lower. only lots. when also owned option is that is XX% controlled controlled XX% can in XX, of we have XX% home of of and by you controlled land

continue increase improve our the in turnover and are options have to overall turns of continue key now to slide High years. of opportunities use peers, rate. to and second our We to XX. we turns inventory component future land our believe a to our inventory highest we inventory strategy. further Compared have Turning returns to inventory on

of million Furthermore, we to ladder now amended have this until the quarter. Turning retired date the end After at the extend maturing XXXX. debt we fiscal XX, credit slide, last that, of fiscal slide maturity XX. quarter, any don't of first $XXX year's to first we June of maturity XXXX. quarter our fourth debt. XXXX, our On debt the to Since end facility in show we revolving the

and we remain to changing to debt debt retirement strengthen summer, conditions We preserving to plans. market sheet initiatives near-term to balance temporarily committed liquidity Due our conditions last paused improvement. focus our reduction revisit our market once sustained and shifted our intend show

$XXX will progress our earnings. pay million billion our cash of will balance This enhance will to Given income in accelerate come tax sheet. flow we deferred $X.X pre-tax to and asset, of taxes on our benefit not significantly approximately improving have future our years federal

of changes increases quarter including our further adverse Our in no chain financial deterioration market cancellation or current for supply the rates. second or conditions, XXXX no inflation rates, mortgage fiscal guidance our assumes in in material

guidance averaging compared four continued times, cycle months. seven to Our pre-COVID for construction our extended to construction months six assumes approximately times cycle of

Further, from the stock it movement our the SG&A excludes the any our our of phantom fiscal impact from stock solely at of expenses end XXXX. price quarter stock first price expense $XX.XX related to

While of quarters, economic of many is current delays potential employment a greater over the increases. we've and risk, mortgage uncertainty of most met in rate recession, given degree utility environment our company exceeded metrics an inflation, guided or there the

economic uncertainty year second show resulting we slide of XXXX. caveats company the in With not in XXXX market, the this and the time. the fiscal backdrop the guidance XX, housing on be quarter will given guidance Additionally, providing our mind, difficult those at fiscal for full

million. between second for revenues $XXX $XXX the be total quarter to expect We million and

of to gross be the range XX% in to We XX.X%. also expect adjusted margins

SG&A XX%. of to between expected be revenue total a is percent as and XX%

and million $XX million. $XX adjusted Our EBITDA between guidance for is

we that into the some expected quarter our million. be Those talked of call, Our assumptions to again. about and assumptions for to XXXX guidance were built fourth On $XX XXXX, our I will between quarter. and still million adjusted $XX is pre-tax now second for quarter first of the income guidance fiscal quarter those the assumptions the apply second for discuss

also SG&A higher of opening than well normal expected over for ratio the anticipate expected increase conditions, as increase wages Despite interest Our advertising additional levels increasing the XXXX year is pressures. communities as prior we a fiscal to is homebuilding as inflationary Due as our our debt, to expense incur during result in over a year. market reasons. of spend we slower to two increase are lower anticipating

First, a interest when a higher results interest when cost. are pace life sales the on of sales conversely, home down, and increases delivered delivered community extends Therefore, community sales lifespan in decreases. the interest home These slower increases costs slows per in average total a sales pace expensed per-delivery interest cost and pace our cost interest our per basis. cost

result, a As sales higher in of the XXXX interest be in per we was expense fiscal home will cost than XXXX. fiscal expect it

January at not increased inventory our increase a five-quarter compared with $XXX cost. million This to Second, a year from interest million owned XXXX, a XX, the corresponding has ago. average $XXX causes of in increase

pressures XXXX. customers order our less expect financial that in to lenders fiscal can qualify services our rates will more offer outside significantly of competitive from one so in during mortgage response be to Lastly, homes, of profitable our lower also and to we business purchase

our measure peers performance of leverage. consolidated most accurate third have slide compared EBIT On XX, show We to without on pure believe regard at to homebuilding that is XX.X%. the the this highest investment return we we

because Even a our a slide recognize may overall the stock XXXX, we group. price-to-earnings higher to that at at to peer homebuilder have still We our calendar traded ratio stock market. group the beginning us trades discount though of stocks discount the of trailing the and the On significant show leverage. trade for our higher group since XX, XX-month

equity, returns top industry-leading improving However, our return sheet, the investment, along our our balance of with on entire EBIT on quartile universe we the undervalued homebuilders. stock of is believe given our most public

progress on at of earnings reporting multiple industry XX% in and at look average we're yesterday's focused periods. balance our the future discount times closing Based our further to stock our sheet price a We trading on forward of to two $XX.XX, PE remain strengthening ratio. price

brief it remarks. closing turn back for I'll to some Ara

the the Thanks the is improvement Larry ROI our with quarter for we a the frustrating, correct have highest the pointing all fiscal penalty with just have peers But a Larry. out in PE our recognize pleased industry our still financial as we performance to high are is financial first economic the and Considering continued sheet lowest and midsize is believe ratio We leverage. of have over environment, that our ratio. EBIT solid third highest XXXX. said, It peers, of as our itself balance performance will time. PE of Larry in there

of We February months are see and and week. right in contracts January, the glad to last December, the traffic pickup through in

year. environment a for of the sales the Assuming financial current continues, better we expect performance the remainder

see in better the season. We're spring XXXX happy the beginning to trends selling of

seem and home uptick traffic contracts accustomed rate mortgage adjusted getting despite and mortgage elevated, weekly visits to remained be and purchase recent in accordingly. expectations Our website environment to appear Consumers higher the rates. a their to have

and the to closely of rate movements monitor continue by the Federal impact Reserve. We'll taken mortgage actions the

long-term that solid today. the More importantly, housing fundamentals market remains the drive

We us in us should industry-leading execute team continue have allow got to this our through right the right plan, achieve to to to management which believe we game and the field we've period returns. associates also the see

and to concludes happy we're it formal comments open That for our up Q&A.

question Instructions] Housing first Barron Our Research Center. of from Alex line [Operator comes from Certainly. the

Your question please.

Thanks. Yes. on morning the quarter. job gentlemen. Good Great

Thank you.

couple I of you to months guess the same wanted up, tripling of seem now just increase inquiry level be guess, the be are new guys to some had about that of I helpful? color or you And to around the sales this to found, buyers year. would momentum, enthusiasm maintain incentives, the just last rates have I back maintaining

and a incentives prices over home -- as home prices, communities our about of actually in to our out, many Alex, pointed of think, we of last net we net surprises, the honestly, third I month. increased

even months. But directions base month. answer. increased prices the prices. home the of of we repeat And the over had in There and lots incentives one are again, last of we've So gives last best I'll net-net, of moved I that week, different you lots after had actually think X%, rates to we or movements weeks

the be so So, adjusting environment. the market current far, to seems rate to

Well, maybe guess, from the what's the very best though high, to high prices with even still to people your home encouraging. more they field – outlook think or able increase… feedback happening? are you to that's Yes. this I and understanding the interest I why as guess be rates is houses. in afford guess Why, or are comfortable Are just seem

There are a number of factors -- Alex.

First, as I normal, fewer normal, somewhere pointed number competition is available sale half are one-third for out, the the for between alternatives and homes less than existing of of us.

So is home -- helpful. less home price adjusting their two, competition Number expectations. are just people their

set when it and demographics they're into the will, Luckily, think were shock have and to back over X.X%, you large people sidelines the very homes comes the is off cautiously to terms current buying a are very net-net, some I some sights be fancy seem to with their now. adjusted be home bit think moving they and finishes, I market. rates little finding definitely solid with market sticker And the the their right footing expectations. seem on if millennials helping the environment, and helping,

guys Can but the I to back the not you hear. Yes. comments, stock, of hear you you you clarify did did I heard sure That's bought correctly or I'm -- great towards if say incorrectly? end

the in amount, and number think forget -- about shares, I We the No. was head my of I our is what back buy did dollar X% outstanding Brad, about

million $XX

last that’s million $XX million. that over right – quarters. And two the was $XX

Yes.

But that's there? the what I'll why Okay. do release, planned? reducing -- All debt, previously are press to you anyway, the had as there it there. allowed missed buyback you to the guys right. so re-read And limit maybe is feel to guys you of preferable I a

leverage made mean, about shares notwithstanding balance just release the We Well, sheet I little the too reduce fact our over saw in it of good was we that think improve it was an to is $XX a just long-term the price, an purchase, the our plan purchased. mentioned irresistible that we I just opportunity. and of our price

back in repurchase if Board authorized to more, made back And but to the drops just marketplace, decide more that as price, are it haven't are We I we be pointed by suspect I authorized to. -- the buy we're monitoring the purchase we'll really but decision. should out, we again, we

somebody Thank of let and you question. Okay. Thank best have a else luck. I'll you.

from our Lederman for line One & comes [Operator Zelman Thank question Jesse next next Associates. question. the of you. Instructions] Our from moment

Your question, please.

Hi. Thanks results congrats this taking my for questions thus and strong on year. the far

Jesse. Thanks,

your price you quarter or observed know recently market are on I'd of more about depends an two begun have given give the learn ago? prices and are presumably location in a other in kind and the it some so, land and a factors. to capitulate of may But like Have to example adjustments able you you land you've seen land land If versus that what some to market. sellers little lot on land I of peers back the market.

absorptions. first, net a I'd the capitulate weren't XXXX. word. are from months sellers given Well, and lot appropriate home starting pricing big is a Sure. and market pretty about land I'd land to the was for if be many -- ask, big say, realistic six say, just -- a there will, was the you But activity. spread, midyear for there bid of pricing inactive wasn't about and

make improved But that sellers' terms lowered of are has market costs sales bit have more have a we sense. pace a as and improved -- more a bit new seeing as bit, and transactions as homebuilders expectations the in land

in the new numerous in are the cautious, around being we're locations land. we back but country buying market So

percentage some or those That's you helpful. kind you. a two a Are ago, able Thank reset of below on of to land how comment prices maybe far month on have basis?

and across buying board. land of we're that now not we development, land is including It's cost hard. XX%. prices, But there general, just looked many, It's down there if the I the lots, of finished many pace easing in the -- takedowns there can't many are of it's many, at moving are parts, say, before, an a say factors. site I'd

particularly tight. markets Some remain

we that with pattern. but on for find need market right Some to many returns don't to just everyone enough to growth need sellers We adjusted our opportunities expectations, have their the adjust expectations. get back pencil their in every not us

to build number you on improved Makes question move-in I'm how order for just more guess, second demand sense. activities improved, -- it's of -- communities is more Your I February, held sales order relatively your demand homes, is in your product. about In Quick is stable. asking quick how the trending? Move -- for February, But as your for My so your build sales Homes product have during as to activity

presumably, order that mostly you over has in products really been the from product spec or Quick so, increase buyers? an as demand In Move for equal has from increase month focused home high. last Have So your been to build the or demand seen

increase seen migrated used it QMI, and both an to as but XX%. QMIs, shares almost we where overall build to be mentioned, our order We've in to XX%

side, we So the in few to a there's up-tick have build been on the as seen, but pickup well. QMI the more weeks, order of an on especially last

differential build some product. products or versus you're And helpful. pricing could maybe spec and on nuances margin, order you build pricing on seeing versus the your power on color to spec order margin differences any your give That's to if

would be that think as well. helpful I

better incentives, would it take costs. now, or have able down hold I a to we those remains of margins, hold be The and and the builds right to mortgage orders. buy discount have been build on and tend delivery. to to seeing more are the QMIs little the end hopefully, closing QMI margin construction But lower the it up, will seen, say around especially rate other

past, demand trend. increase QMI and just builder the sales reeducating reverse It highest wouldn't demand is not of not we're that to big in I it going an we're we team in increased been process a part the than for yet, reverse. QMI think surprise QMI per trend that in more are I increased the given rather and seeing that of less, QMIs have see think Because given me, our but in demand. It's about for place to we charging fully

again. That's very Thank helpful color. you

back program to for Mr. further to, today's Thank like remarks. program. you. question-and-answer This conclude of does Hovnanian the I'd the session any hand

results key Very of new good. lagging sales, on sales reported terms and gross Thank results in you on-site are very margins was and profitability deliveries and website new we our much. or just traffic. really The

to positive happy very those -- really very in a moving indicators say leading direction. I'm are

improved forward near Thank results you much. look very in giving to quarters. we upcoming the you So

you, participation and does gentlemen This Thank program. the your for conference. ladies in today's conclude

You may disconnect. Good now day.