Hovnanian's Losses Double from Last Year

Red Bank, NJ, March 11, 2008--Hovnanian Enterprises Inc.'s net loss increased in the first quarter to $131 million as the company had $94 million in write-downs because of falling home prices since last summer.

Losses more than doubled from last year's loss of $57.4 million. The company delivered 3,604 homes, up from the 3,266 in the previous quarter. However, revenue fell from $1.14 billion to $1.05 billion.

The write-downs included $74 million in land impairments and $16 million in predevelopment costs.

"Market conditions remain challenging across many of our markets," Chief Executive Ara Hovnanian said. "We continue to focus on reducing our inventories, maximizing cash flow and shrinking our overhead to ensure that we properly manage the difficult market conditions we currently face."

Gross margins have fallen substantially for the family owned company, declining from 18 percent to 6.7 percent, partly the result of 2 percent margins in Florida.

The average price of homes sold in the quarter declined 15 percent from 2007, while home deliveries rose 5.7 percent. However, the number of contracts signed fell 41 percent and the cancellation rate continued its decline to 38 percent.