Hovnanian's liquidity ample enough to survive downturn, participate in rebound, CFO says

By Jennifer Lanning Drey

Savannah, Ga., Oct. 7 - Hovnanian Enterprises Inc. believes it has ample liquidity to take advantage of opportunities at the bottom of the housing cycle as well as pay off its debt maturities as they come due, J. Larry Sorsby, chief financial officer of Hovnanian, said Thursday during an investor presentation.

"We certainly have the liquidity not only to survive, but to participate in a meaningful way in the inevitable rebound," Sorsby said at the Deutsche Bank Leveraged Finance Conference in Phoenix.

Hovnanian had just under $500 million of cash at July 31. The company's next debt maturity is about $100 million maturing in 2012.

During the presentation, Sorsby also said the company is beginning to see opportunities that make sense based on current sales prices and paces.

"We never assume home price appreciation when we're buying land," he noted.

The company is also focused on entering into additional joint ventures that will allow it to leverage its cash with other investors' money in order to help fund more communities, the CFO said.

Sorsby also said that while the homebuilding market remains challenging, there are a number of signs that it is bumping along the bottom.

"It certainly doesn't feel like it did a year ago when we were in free fall, so this is encouraging," he said.

Hovnanian is a Red Bank, N.J., homebuilder.

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