Hovnanian Enterprises (NYSE:HOV), Matawan, N.J. on Thursday before market open reported a net loss was $15.3 million, or $2.56 per common share, in the second quarter of fiscal 2019 compared with a net loss of $9.8 million, or $1.65 per common share, during the same quarter a year earlier. Analyst expectations were for a loss of $1.77 per share. Share of HOV were down almost 10% in mid-afternoon trading Thursday.
For the first six months of fiscal 2019, net loss was $32.7 million, or $5.49 per common share, compared with a net loss of $40.6 million, or $6.85 per common share, in the same period during fiscal 2018.
Total revenues decreased to $440.7 million in the second quarter of fiscal 2019, compared with $502.5 million in the second quarter of fiscal 2018. For the six months ended April 30, 2019, total revenues decreased to $821.3 million compared with $919.7 million in the same period during the prior fiscal year.
Consolidated deliveries were 1,085 homes for the second quarter of fiscal 2019, a 10.7% decrease compared with 1,215 homes during the same quarter a year ago. For the quarter ended April 30, 2019, deliveries, including unconsolidated joint ventures, decreased 10.0% to 1,280 homes compared with 1,423 homes during the second quarter of fiscal 2018.
Consolidated deliveries were 2,052 homes in the first half of fiscal 2019, an 8.4% decrease compared with 2,240 homes in the same period in fiscal 2018. For the six months ended April 30, 2019, deliveries, including unconsolidated joint ventures, decreased 6.4% to 2,399 homes compared with 2,564 homes in the same period of the prior fiscal year.
The contract cancellation rate for both consolidated contracts and contracts including unconsolidated joint ventures were 19% for the three months ended April 30, 2019 compared with 17% for the same quarter in fiscal 2018.
The number of consolidated contracts increased 10.1% to 1,546 homes, during the second quarter of fiscal 2019, compared with 1,404 homes during the second quarter of fiscal 2018. The number of contracts, including unconsolidated joint ventures, for the second quarter ended April 30, 2019, increased 4.0% to 1,775 homes from 1,706 homes for the same quarter last year.
The number of consolidated contracts increased 2.0% to 2,480 homes, during the six-month period ended April 30, 2019, compared with 2,431 homes in the same period of the previous fiscal year. During the first six months of fiscal 2019, the number of contracts, including unconsolidated joint ventures, was 2,843 homes, a decrease of 3.8% from 2,956 homes during the same period in fiscal 2018.
For May 2019, consolidated contracts per community were 3.7 compared with 3.6 for the same month one year ago. During May 2019, the number of consolidated contracts increased 20.2% to 536 homes from 446 homes in May 2018.
The dollar value of consolidated contract backlog, as of April 30, 2019, increased 5.5% to $949.9 million compared with $900.7 million as of April 30, 2018. The dollar value of contract backlog, including unconsolidated joint ventures, as of April 30, 2019, was $1.18 billion, a decrease of 11.9% compared with$1.34 billion as of April 30, 2018.
The consolidated community count was 147 as of April 30, 2019, an 11.4% year-over-year increase from 132 communities at the end of the prior year's second quarter and a 7.3% sequential increase compared with 137 communities at January 31, 2019. As of the end of the second quarter of fiscal 2019, community count, including unconsolidated joint ventures, was 165 communities, a 7.8% increase, both sequentially and year over year, compared with 153 communities at both January 31, 2019 and April 30, 2018.
Home building gross margin percentage, before cost of sales interest expense and land charges, was 16.9% for the second quarter of fiscal 2019 compared with 17.7% in the same quarter one year ago. During the first half of fiscal 2019, home building gross margin percentage, before cost of sales interest expense and land charges, was 17.3% compared with 17.8% in the same period of the previous fiscal year.
For the second quarter of 2019, total SG&A decreased by $1.3 million, or 2.2%, year over year. Total SG&A was $60.3 million, or 13.7% of total revenues, in the second quarter of fiscal 2019 compared with $61.7 million, or 12.3% of total revenues, in the second quarter of fiscal 2018. For the six-month period ended April 30, 2019, total SG&A decreased by $3.3 million, or 2.7%, year over year. For the first six months of fiscal 2019, total SG&A was $120.7 million, or 14.7% of total revenues, compared with $124.1 million, or 13.5% of total revenues, in the same period of the prior fiscal year.
Total liquidity at the end of the of the second quarter of fiscal 2019 was $266.0 million.
In the second quarter of fiscal 2019, approximately 2,500 lots were put under option or acquired in 32 communities, including unconsolidated joint ventures.
As of April 30, 2019, consolidated lots controlled increased by 17.1% to 31,087 year over year from 26,537 lots at April 30, 2018. The consolidated lots under option at the end of the second quarter of fiscal 2019 were 18,602 lots compared with 13,949 optioned lots at the end of last year's second quarter. As of April 30, 2019, the company owned 12,485 lots compared with 12,588 owned lots at the end of the second quarter of fiscal 2018.
"We continue to invest in a housing market that appears to remain on solid economic and demographic footings," stated Ara K. Hovnanian, chairman, president and CEO. "Assuming no adverse changes in current market conditions and excluding land related charges, gains or losses on extinguishment of debt and other non-recurring items, we expect the second half of the year to substantially outperform the first half, resulting in profitability for the full year."
