HOV's CEO vs. SPF
Imagine how Ara Hovnanian feels about SPF? SPF has about 1/3 the backlog as HOV($442 million vs. $1.3 Billion) and over $3 Billion of debt including JVs(approaching 50% more debt compared to HOV). Spec homes are about the same.
Last year HOV got rid of half their lots and didn't make a dent in debt. Assuming HOV gets rid of the other half of lots this year, at even lower margins(Ara admits he doesn't expect a recovery until the end of the year), this company will not have any lots to build on and over $2 Billion of debt. OUCH!!!
Basically Ara has implied that HOV is going BK in 2008 extrapolating the above to its logical conclusion.
Again, can you imagine how Ara feels about SPF with 1/3 the backlog and 50% more debt? Do you think Ara would be happy with FloridaBuilder for ranking SPF higher than HOV?
WWAT-What would Ara think?