At first glance, the first-quarter results reported by Hovnanian Enterprises Inc. on Wednesday appeared strong. Nearly every metric-- sales, closings, gross margins, SG&A--showed improvement. Yet the stock (NYSE:HOV) plunged, falling nearly 16% to $1.48 in heavy trading.

During a conference call with analysts (webcast here), company executives moved from the obligatory recitation of quarterly results on to a report on the company's debt and its plan to deal with it. According to CEO Ara Hovnanian, the collapse of the oil patch amid a worldwide oil glut has caused the credit markets for companies with 'CCC' ratings, such as HOV, to seize up. That has caused the company to rethink its strategy, announced just last September, to grow its way out of debt. Absent credit facilities, it has now changed that strategy to engaging in land banking while slowing growth, focusing on strengthening the balance sheet and harvesting cash. As part of that strategy, HOV announced it was exiting the Minnesota, Raleigh, Tampa and San Francisco markets, the latter two via selling out of existing inventory.

The company has $150 million in cash, $2 million available through its revolving credit facility, and nearly $300 million in debt repayments due, at three different maturities, by December, 2017. Further out, another $1.2 billion comes due by November of 2020.

Hovnanian debt profile

The previous slide in the analyst presentation dealt with the company's liquidity position:

hovnanian liquidity position