Hovnanian Expects Writedowns as Sales Slide

Red Bank, NJ, May 5, 2008--Hovnanian Enterprises Inc. said Monday it expects second-quarter charges of $225 million to $275 million for land impairments and write-offs, due to ongoing sales and pricing declines.

The homebuilder is among many still fighting the continued housing slowdown. However, Hovnanian said it had positive cash flow in the second quarter, one quarter earlier than estimated, and now sees 2008 positive cash flow of $300 million, three times its prior forecast.

House deliveries for the period ended April 30 fell 21 percent to 2,494 homes, excluding deliveries from unconsolidated joint ventures.

Second-quarter net contracts plunged 29 percent to 2,226 homes, excluding joint ventures.

However, cancellation rates improved to 29 percent of gross contracts compared with 32 percent in the prior year.