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FORM 10-Q
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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Commission File Number 001-36283
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Delaware
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27-0560089
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(State or other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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Not Applicable
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(Former name, former address and former fiscal year, if changed since last report)
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Large accelerated filer
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¨
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Non-accelerated filer (Do not check if smaller reporting company)
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¨
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Accelerated filer
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ý
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Smaller reporting company
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¨
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Page
Number
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PART I Financial Information
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Part II Other Information
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 1.
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Financial Statements
|
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June 30,
|
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December 31,
|
||||
|
2016
|
|
2015
|
||||
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(Dollars in thousands, except per share amounts)
|
||||||
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(Unaudited)
|
|
|
||||
Assets
|
|
|
|
||||
Cash and cash equivalents
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$
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29,811
|
|
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$
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45,874
|
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Restricted cash
|
877
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|
|
380
|
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||
Contracts and accounts receivable
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14,932
|
|
|
23,960
|
|
||
Due from affiliates
|
845
|
|
|
979
|
|
||
Real estate inventories
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403,378
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|
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209,918
|
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||
Investment in unconsolidated joint ventures
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47,353
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60,572
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Other assets
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10,773
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9,587
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Total assets
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$
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507,969
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$
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351,270
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||||
Liabilities and equity
|
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||||
Accounts payable
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$
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30,660
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|
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$
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26,371
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Accrued expenses and other liabilities
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10,786
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|
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19,827
|
|
||
Due to affiliates
|
54
|
|
|
293
|
|
||
Unsecured revolving credit facility
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238,924
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74,924
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Other notes payable
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4,000
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8,158
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Total liabilities
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284,424
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129,573
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||
Commitments and contingencies (Note 10)
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||||
Equity:
|
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||||
Stockholders' equity:
|
|
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|
||||
Preferred stock, $0.01 par value, 50,000,000 shares authorized, no shares outstanding
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—
|
|
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—
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|
||
Common stock, $0.01 par value, 500,000,000 shares authorized, 20,711,952 and 20,543,130, shares issued and outstanding as of June 30, 2016 and December 31, 2015, respectively
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207
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|
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205
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||
Additional paid-in capital
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195,433
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194,437
|
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Retained earnings
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27,828
|
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26,133
|
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Total The New Home Company Inc. stockholders' equity
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223,468
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220,775
|
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Noncontrolling interest in subsidiary
|
77
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|
|
922
|
|
||
Total equity
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223,545
|
|
|
221,697
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||
Total liabilities and equity
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$
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507,969
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$
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351,270
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Three Months Ended June 30,
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Six Months Ended June 30,
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||||||||||||
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2016
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2015
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2016
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2015
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||||||||
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(Dollars in thousands, except per share amounts)
|
||||||||||||||
Revenues:
|
|
|
|
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|
||||||||
Home sales
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$
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78,836
|
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$
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19,202
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|
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$
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121,139
|
|
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$
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75,437
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Fee building, including management fees from unconsolidated joint ventures of $2,537, $2,133, $4,712 and $5,101, respectively
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30,028
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26,429
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72,965
|
|
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73,059
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||||
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108,864
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45,631
|
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194,104
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148,496
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|
||||
Expenses:
|
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||||||||
Cost of homes sales
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69,390
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16,598
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106,060
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64,006
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|
||||
Cost of fee building
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28,317
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25,209
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69,231
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68,986
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||||
Selling and marketing
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5,046
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1,939
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8,522
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4,089
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||||
General and administrative
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5,833
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4,313
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11,008
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7,973
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||||
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108,586
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48,059
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194,821
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145,054
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||||
Equity in net income of unconsolidated joint ventures
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3,947
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3,256
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3,940
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5,124
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|
||||
Other expense, net
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(286
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)
|
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(413
|
)
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(395
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)
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(721
|
)
|
||||
Income before income taxes
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3,939
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|
415
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2,828
|
|
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7,845
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|
||||
Provision for income taxes
|
(1,495
|
)
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(140
|
)
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(1,253
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)
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(3,025
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)
|
||||
Net income
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2,444
|
|
|
275
|
|
|
1,575
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4,820
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|
||||
Net loss attributable to noncontrolling interest
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65
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174
|
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|
120
|
|
|
198
|
|
||||
Net income attributable to The New Home Company Inc.
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$
|
2,509
|
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$
|
449
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$
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1,695
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$
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5,018
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||||||||
Earnings per share attributable to The New Home Company Inc.
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|
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||||||||
Basic
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$
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0.12
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$
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0.03
|
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$
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0.08
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$
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0.30
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Diluted
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$
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0.12
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$
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0.03
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$
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0.08
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$
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0.30
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Weighted average shares outstanding:
|
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||||||||
Basic
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20,709,139
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16,516,546
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20,654,998
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16,502,578
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||||
Diluted
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20,760,186
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16,672,649
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20,745,802
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16,623,663
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Stockholders’ Equity
|
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Noncontrolling Interest in Subsidiary
|
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Total Equity
|
|||||||||||||||||||||
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Number of Shares of
Common
Stock
|
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Common Stock
|
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Additional
Paid-in
Capital
|
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Retained Earnings
|
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Total
Stockholders’
Equity
|
|
|
|||||||||||||||
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(Dollars in thousands)
|
|||||||||||||||||||||||||
Balance at December 31, 2015
|
20,543,130
|
|
|
$
|
205
|
|
|
$
|
194,437
|
|
|
$
|
26,133
|
|
|
$
|
220,775
|
|
|
$
|
922
|
|
|
$
|
221,697
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
1,695
|
|
|
1,695
|
|
|
(120
|
)
|
|
1,575
|
|
||||||
Noncontrolling interest distribution
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(725
|
)
|
|
(725
|
)
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
1,742
|
|
|
—
|
|
|
1,742
|
|
|
—
|
|
|
1,742
|
|
||||||
Shares net settled with the Company to satisfy employee personal income tax liabilities resulting from share based compensation plans
|
—
|
|
|
—
|
|
|
(647
|
)
|
|
—
|
|
|
(647
|
)
|
|
—
|
|
|
(647
|
)
|
||||||
Tax valuation adjustment from stock-based compensation
|
—
|
|
|
—
|
|
|
(97
|
)
|
|
—
|
|
|
(97
|
)
|
|
—
|
|
|
(97
|
)
|
||||||
Shares issued through stock plans
|
168,822
|
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Balance at June 30, 2016
|
20,711,952
|
|
|
$
|
207
|
|
|
$
|
195,433
|
|
|
$
|
27,828
|
|
|
$
|
223,468
|
|
|
$
|
77
|
|
|
$
|
223,545
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
||||||
|
2016
|
|
2015
|
||||
|
(Dollars in thousands)
|
||||||
Operating activities:
|
|
|
|
||||
Net income
|
$
|
1,575
|
|
|
$
|
4,820
|
|
Adjustments to reconcile net income to net cash used in operating activities:
|
|
|
|
||||
Deferred taxes
|
(27
|
)
|
|
(5,841
|
)
|
||
Amortization of equity based compensation
|
1,742
|
|
|
1,235
|
|
||
Tax valuation adjustment from stock-based compensation
|
97
|
|
|
—
|
|
||
Distributions of earnings from unconsolidated joint ventures
|
1,095
|
|
|
7,452
|
|
||
Equity in net (income) loss of unconsolidated joint ventures
|
(3,940
|
)
|
|
(5,124
|
)
|
||
Deferred profit from unconsolidated joint ventures
|
332
|
|
|
(1,435
|
)
|
||
Depreciation and amortization
|
251
|
|
|
232
|
|
||
Abandoned project costs
|
329
|
|
|
443
|
|
||
Net changes in operating assets and liabilities:
|
|
|
|
||||
Restricted cash
|
104
|
|
|
148
|
|
||
Contracts and accounts receivable
|
9,164
|
|
|
6,016
|
|
||
Due from affiliates
|
88
|
|
|
2,172
|
|
||
Real estate inventories
|
(170,246
|
)
|
|
(103,750
|
)
|
||
Other assets
|
(50
|
)
|
|
4,076
|
|
||
Accounts payable
|
3,737
|
|
|
4,094
|
|
||
Accrued expenses and other liabilities
|
(9,711
|
)
|
|
(4,704
|
)
|
||
Due to affiliates
|
(239
|
)
|
|
—
|
|
||
Net cash used in operating activities
|
(165,699
|
)
|
|
(90,166
|
)
|
||
Investing activities:
|
|
|
|
||||
Purchases of property and equipment
|
(296
|
)
|
|
(238
|
)
|
||
Cash assumed from joint venture at consolidation
|
2,009
|
|
|
—
|
|
||
Contributions to unconsolidated joint ventures
|
(5,656
|
)
|
|
(4,712
|
)
|
||
Distributions of capital from unconsolidated joint ventures
|
7,405
|
|
|
24,806
|
|
||
Net cash provided by investing activities
|
3,462
|
|
|
19,856
|
|
||
Financing activities:
|
|
|
|
||||
Borrowings from credit facility
|
175,000
|
|
|
74,450
|
|
||
Repayments of credit facility
|
(11,000
|
)
|
|
(10,000
|
)
|
||
Borrowings from other notes payable
|
343
|
|
|
1,799
|
|
||
Repayments of other notes payable
|
(15,636
|
)
|
|
(2,517
|
)
|
||
Payment of debt issuance costs
|
(1,064
|
)
|
|
—
|
|
||
Cash distributions to noncontrolling interest in subsidiary
|
(725
|
)
|
|
(822
|
)
|
||
Minimum tax withholding paid on behalf of employees for stock awards
|
(647
|
)
|
|
—
|
|
||
Tax valuation adjustment from stock-based compensation
|
(97
|
)
|
|
—
|
|
||
Net cash provided by financing activities
|
146,174
|
|
|
62,910
|
|
||
Net increase (decrease) in cash and cash equivalents
|
(16,063
|
)
|
|
(7,400
|
)
|
||
Cash and cash equivalents – beginning of period
|
45,874
|
|
|
44,058
|
|
||
Cash and cash equivalents – end of period
|
$
|
29,811
|
|
|
$
|
36,658
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(Dollars in thousands, except per share amounts)
|
||||||||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income attributable to The New Home Company Inc.
|
$
|
2,509
|
|
|
$
|
449
|
|
|
$
|
1,695
|
|
|
$
|
5,018
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
||||||||
Basic weighted-average shares outstanding
|
20,709,139
|
|
|
16,516,546
|
|
|
20,654,998
|
|
|
16,502,578
|
|
||||
Effect of dilutive shares:
|
|
|
|
|
|
|
|
||||||||
Stock options and unvested restricted stock units
|
51,047
|
|
|
156,103
|
|
|
90,804
|
|
|
121,085
|
|
||||
Diluted weighted-average shares outstanding
|
20,760,186
|
|
|
16,672,649
|
|
|
20,745,802
|
|
|
16,623,663
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share attributable to The New Home Company Inc.
|
$
|
0.12
|
|
|
$
|
0.03
|
|
|
$
|
0.08
|
|
|
$
|
0.30
|
|
Diluted earnings per share attributable to The New Home Company Inc.
|
$
|
0.12
|
|
|
$
|
0.03
|
|
|
$
|
0.08
|
|
|
$
|
0.30
|
|
|
|
|
|
|
|
|
|
||||||||
Antidilutive stock options and unvested restricted stock units not included in diluted earnings per share
|
888,953
|
|
|
787
|
|
|
867,272
|
|
|
396
|
|
|
June 30,
|
|
December 31,
|
||||
|
2016
|
|
2015
|
||||
|
(Dollars in thousands)
|
||||||
Contracts receivable:
|
|
|
|
||||
Costs incurred on fee building projects
|
$
|
69,231
|
|
|
$
|
139,677
|
|
Estimated earnings
|
3,734
|
|
|
10,213
|
|
||
|
72,965
|
|
|
149,890
|
|
||
Less: amounts collected during the period
|
(64,076
|
)
|
|
(132,109
|
)
|
||
Contracts receivable
|
$
|
8,889
|
|
|
$
|
17,781
|
|
|
|
|
|
||||
Contracts receivable:
|
|
|
|
||||
Billed
|
$
|
—
|
|
|
$
|
—
|
|
Unbilled
|
8,889
|
|
|
17,781
|
|
||
|
8,889
|
|
|
17,781
|
|
||
Accounts receivable:
|
|
|
|
||||
Escrow receivables
|
5,873
|
|
|
6,179
|
|
||
Other receivables
|
170
|
|
|
—
|
|
||
Contracts and accounts receivable
|
$
|
14,932
|
|
|
$
|
23,960
|
|
|
June 30,
|
|
December 31,
|
||||
|
2016
|
|
2015
|
||||
|
(Dollars in thousands)
|
||||||
Deposits and pre-acquisition costs
|
$
|
36,373
|
|
|
$
|
17,133
|
|
Land held and land under development
|
60,773
|
|
|
57,659
|
|
||
Homes completed or under construction
|
235,492
|
|
|
109,805
|
|
||
Model homes
|
70,740
|
|
|
25,321
|
|
||
|
$
|
403,378
|
|
|
$
|
209,918
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||
Interest incurred
|
$
|
1,689
|
|
|
$
|
1,048
|
|
|
$
|
2,970
|
|
|
$
|
1,926
|
|
Interest capitalized
|
(1,689
|
)
|
|
(1,048
|
)
|
|
(2,970
|
)
|
|
(1,926
|
)
|
||||
Interest expensed
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Capitalized interest in beginning inventory
|
$
|
4,823
|
|
|
$
|
2,847
|
|
|
$
|
4,190
|
|
|
$
|
2,328
|
|
Interest capitalized as a cost of inventory
|
1,689
|
|
|
1,048
|
|
|
2,970
|
|
|
1,926
|
|
||||
Contribution to unconsolidated joint venture
|
—
|
|
|
(264
|
)
|
|
—
|
|
|
(264
|
)
|
||||
Previously capitalized interest included in cost of sales
|
(1,063
|
)
|
|
(121
|
)
|
|
(1,711
|
)
|
|
(480
|
)
|
||||
Capitalized interest in ending inventory
|
$
|
5,449
|
|
|
$
|
3,510
|
|
|
$
|
5,449
|
|
|
$
|
3,510
|
|
|
June 30,
|
|
December 31,
|
||||
|
2016
|
|
2015
|
||||
|
(Dollars in thousands)
|
||||||
Cash and cash equivalents
|
$
|
48,634
|
|
|
$
|
53,936
|
|
Restricted cash
|
12,069
|
|
|
12,279
|
|
||
Real estate inventories
|
399,945
|
|
|
415,730
|
|
||
Other assets
|
936
|
|
|
3,972
|
|
||
Total assets
|
$
|
461,584
|
|
|
$
|
485,917
|
|
|
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
38,539
|
|
|
$
|
57,813
|
|
Notes payable
|
111,541
|
|
|
94,890
|
|
||
Total liabilities
|
150,080
|
|
|
152,703
|
|
||
The New Home Company's equity
|
47,353
|
|
|
60,572
|
|
||
Other partners' equity
|
264,151
|
|
|
272,642
|
|
||
Total equity
|
311,504
|
|
|
333,214
|
|
||
Total liabilities and equity
|
$
|
461,584
|
|
|
$
|
485,917
|
|
Debt-to-capitalization ratio
|
26.4
|
%
|
|
22.2
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||
Revenues
|
$
|
70,104
|
|
|
$
|
58,186
|
|
|
$
|
112,061
|
|
|
$
|
139,410
|
|
Cost of sales
|
53,860
|
|
|
45,486
|
|
|
89,764
|
|
|
109,284
|
|
||||
Gross margin
|
16,244
|
|
|
12,700
|
|
|
22,297
|
|
|
30,126
|
|
||||
Operating expenses
|
6,049
|
|
|
5,063
|
|
|
9,961
|
|
|
11,723
|
|
||||
Net income of unconsolidated joint ventures
|
$
|
10,195
|
|
|
$
|
7,637
|
|
|
$
|
12,336
|
|
|
$
|
18,403
|
|
Equity in net income of unconsolidated joint ventures reflected in the accompanying condensed consolidated statements of operations
|
$
|
3,947
|
|
|
$
|
3,256
|
|
|
$
|
3,940
|
|
|
$
|
5,124
|
|
|
June 30,
|
|
December 31,
|
||||
|
2016
|
|
2015
|
||||
|
(Dollars in thousands)
|
||||||
Deferred tax asset
|
$
|
7,543
|
|
|
$
|
7,516
|
|
Property and equipment, net of accumulated depreciation
|
974
|
|
|
929
|
|
||
Prepaid expenses
|
2,248
|
|
|
1,127
|
|
||
Other assets
|
8
|
|
|
15
|
|
||
|
$
|
10,773
|
|
|
$
|
9,587
|
|
|
June 30,
|
|
December 31,
|
||||
|
2016
|
|
2015
|
||||
|
(Dollars in thousands)
|
||||||
Warranty accrual
|
$
|
5,205
|
|
|
$
|
4,181
|
|
Accrued compensation and benefits
|
2,255
|
|
|
5,106
|
|
||
Accrued interest
|
631
|
|
|
453
|
|
||
Income taxes payable
|
5
|
|
|
6,780
|
|
||
Deferred profit from unconsolidated joint ventures
|
1,272
|
|
|
1,603
|
|
||
Other accrued expenses
|
1,418
|
|
|
1,704
|
|
||
|
$
|
10,786
|
|
|
$
|
19,827
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||
Beginning warranty accrual for homebuilding projects
|
$
|
4,057
|
|
|
$
|
1,779
|
|
|
$
|
3,846
|
|
|
$
|
1,277
|
|
Warranty provision for homebuilding projects
|
493
|
|
|
192
|
|
|
805
|
|
|
754
|
|
||||
Warranty assumed from joint venture at consolidation
|
469
|
|
|
—
|
|
|
469
|
|
|
—
|
|
||||
Warranty payments for homebuilding projects
|
(145
|
)
|
|
(69
|
)
|
|
(246
|
)
|
|
(129
|
)
|
||||
Ending warranty accrual for homebuilding projects
|
4,874
|
|
|
1,902
|
|
|
4,874
|
|
|
1,902
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Beginning warranty accrual for fee building projects
|
332
|
|
|
300
|
|
|
335
|
|
|
301
|
|
||||
Warranty provision for fee building projects
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Warranty efforts for fee building projects
|
(1
|
)
|
|
(2
|
)
|
|
(4
|
)
|
|
(3
|
)
|
||||
Ending warranty accrual for fee building projects
|
331
|
|
|
298
|
|
|
331
|
|
|
298
|
|
||||
Total ending warranty accrual
|
$
|
5,205
|
|
|
$
|
2,200
|
|
|
$
|
5,205
|
|
|
$
|
2,200
|
|
|
June 30,
|
|
December 31,
|
||||
|
2016
|
|
2015
|
||||
|
(Dollars in thousands)
|
||||||
Senior unsecured revolving credit facility
|
$
|
238,924
|
|
|
$
|
74,924
|
|
Note payable to land seller
|
4,000
|
|
|
6,000
|
|
||
Construction loans
|
—
|
|
|
2,158
|
|
||
|
$
|
242,924
|
|
|
$
|
83,082
|
|
•
|
Level 1 – Quoted prices for identical instruments in active markets
|
•
|
Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are inactive; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets at measurement date
|
•
|
Level 3 – Valuations derived from techniques where one or more significant inputs or significant value drivers are unobservable in active markets at measurement date
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
||||||||||
|
Number of Shares
|
|
Weighted-Average Exercise Price per Share
|
|
Number of Shares
|
|
Weighted-Average Exercise Price per Share
|
||||||
Outstanding Stock Option Activity
|
|
|
|
|
|
|
|
||||||
Outstanding, beginning of period
|
840,298
|
|
|
$
|
11.00
|
|
|
846,874
|
|
|
$
|
11.00
|
|
Granted
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Exercised
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Forfeited
|
(4,512
|
)
|
|
$
|
11.00
|
|
|
—
|
|
|
$
|
—
|
|
Outstanding, end of period
|
835,786
|
|
|
$
|
11.00
|
|
|
846,874
|
|
|
$
|
11.00
|
|
Exercisable, end of period
|
42,042
|
|
|
$
|
11.00
|
|
|
24,717
|
|
|
$
|
11.00
|
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
||||||||||
|
Number of Shares
|
|
Weighted-Average Grant-Date Fair Value per Share
|
|
Number of Shares
|
|
Weighted-Average Grant-Date Fair Value per Share
|
||||||
Restricted Stock Unit Activity
|
|
|
|
|
|
|
|
||||||
Outstanding, beginning of period
|
308,386
|
|
|
$
|
14.20
|
|
|
112,233
|
|
|
$
|
11.36
|
|
Granted
|
409,509
|
|
|
$
|
10.05
|
|
|
293,324
|
|
|
$
|
14.46
|
|
Vested
|
(231,289
|
)
|
|
$
|
14.22
|
|
|
(85,386
|
)
|
|
$
|
11.48
|
|
Forfeited
|
(3,980
|
)
|
|
$
|
13.68
|
|
|
(384
|
)
|
|
$
|
11.00
|
|
Outstanding, end of period
|
482,626
|
|
|
$
|
10.67
|
|
|
319,787
|
|
|
$
|
14.17
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||
Expense related to:
|
|
|
|
|
|
|
|
||||||||
Stock options
|
185
|
|
|
305
|
|
|
447
|
|
|
610
|
|
||||
Restricted stock units
|
572
|
|
|
676
|
|
|
1,295
|
|
|
873
|
|
||||
|
$
|
757
|
|
|
$
|
981
|
|
|
$
|
1,742
|
|
|
$
|
1,483
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Homebuilding
|
$
|
78,836
|
|
|
$
|
19,202
|
|
|
$
|
121,139
|
|
|
$
|
75,437
|
|
Fee building, including management fees
|
30,028
|
|
|
26,429
|
|
|
72,965
|
|
|
73,059
|
|
||||
Total
|
$
|
108,864
|
|
|
$
|
45,631
|
|
|
$
|
194,104
|
|
|
$
|
148,496
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) before income taxes:
|
|
|
|
|
|
|
|
||||||||
Homebuilding
|
$
|
2,228
|
|
|
$
|
(805
|
)
|
|
$
|
(906
|
)
|
|
$
|
3,772
|
|
Fee building, including management fees
|
1,711
|
|
|
1,220
|
|
|
3,734
|
|
|
4,073
|
|
||||
Total
|
$
|
3,939
|
|
|
$
|
415
|
|
|
$
|
2,828
|
|
|
$
|
7,845
|
|
|
June 30,
|
|
December 31,
|
||||
|
2016
|
|
2015
|
||||
|
(Dollars in thousands)
|
||||||
Assets:
|
|
|
|
||||
Homebuilding
|
$
|
497,529
|
|
|
$
|
331,697
|
|
Fee building
|
10,440
|
|
|
19,573
|
|
||
Total
|
$
|
507,969
|
|
|
$
|
351,270
|
|
|
Six months ended June 30,
|
||||||
|
2016
|
|
2015
|
||||
|
(Dollars in thousands)
|
||||||
Supplemental disclosures of cash flow information
|
|
|
|
||||
Interest paid, net of amounts capitalized
|
$
|
—
|
|
|
$
|
—
|
|
Income taxes paid
|
$
|
8,150
|
|
|
$
|
8,250
|
|
Supplemental disclosures of non-cash transactions
|
|
|
|
||||
Purchase of real estate with notes payable to affiliate
|
$
|
—
|
|
|
$
|
747
|
|
Contribution of real estate to unconsolidated joint ventures
|
$
|
—
|
|
|
$
|
18,828
|
|
Contribution of real estate from noncontrolling interest in subsidiary
|
$
|
—
|
|
|
$
|
601
|
|
Assets assumed from unconsolidated joint ventures
|
$
|
46,811
|
|
|
$
|
—
|
|
Liabilities and equity assumed from unconsolidated joint ventures
|
$
|
47,197
|
|
|
$
|
—
|
|
Item 2
.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
economic changes either nationally or in the markets in which we operate, including declines in employment, volatility of mortgage interest rates and inflation;
|
•
|
a downturn in the homebuilding industry;
|
•
|
volatility and uncertainty in the credit markets and broader financial markets;
|
•
|
our business and investment strategy;
|
•
|
availability of land to acquire and our ability to acquire such land on favorable terms or at all;
|
•
|
our liquidity and availability, terms and deployment of capital;
|
•
|
shortages of or increased prices for labor, land or raw materials used in housing construction;
|
•
|
delays in land development or home construction resulting from adverse weather conditions or other events outside our control;
|
•
|
our customers' ability to obtain mortgage financing;
|
•
|
issues concerning our joint venture partnerships;
|
•
|
the cost and availability of insurance and surety bonds;
|
•
|
changes in, or the failure or inability to comply with, governmental laws and regulations;
|
•
|
the timing of receipt of regulatory approvals and the opening of projects;
|
•
|
the degree and nature of our competition;
|
•
|
our leverage and debt service obligations;
|
•
|
the impact of recent accounting standards;
|
•
|
restrictive covenants relating to our operations in our current or future financing arrangements; and
|
•
|
availability of qualified personnel and our ability to retain our key personnel.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Home sales
|
$
|
78,836
|
|
|
$
|
19,202
|
|
|
$
|
121,139
|
|
|
$
|
75,437
|
|
Fee building, including management fees from unconsolidated joint ventures of $2,537, $2,133, $4,712 and $5,101, respectively
|
30,028
|
|
|
26,429
|
|
|
72,965
|
|
|
73,059
|
|
||||
|
108,864
|
|
|
45,631
|
|
|
194,104
|
|
|
148,496
|
|
||||
Expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of homes sales
|
69,390
|
|
|
16,598
|
|
|
106,060
|
|
|
64,006
|
|
||||
Cost of fee building
|
28,317
|
|
|
25,209
|
|
|
69,231
|
|
|
68,986
|
|
||||
Selling and marketing
|
5,046
|
|
|
1,939
|
|
|
8,522
|
|
|
4,089
|
|
||||
General and administrative
|
5,833
|
|
|
4,313
|
|
|
11,008
|
|
|
7,973
|
|
||||
|
108,586
|
|
|
48,059
|
|
|
194,821
|
|
|
145,054
|
|
||||
Equity in net income of unconsolidated joint ventures
|
3,947
|
|
|
3,256
|
|
|
3,940
|
|
|
5,124
|
|
||||
Other expense, net
|
(286
|
)
|
|
(413
|
)
|
|
(395
|
)
|
|
(721
|
)
|
||||
Income before income taxes
|
3,939
|
|
|
415
|
|
|
2,828
|
|
|
7,845
|
|
||||
Provision for income taxes
|
(1,495
|
)
|
|
(140
|
)
|
|
(1,253
|
)
|
|
(3,025
|
)
|
||||
Net income
|
2,444
|
|
|
275
|
|
|
1,575
|
|
|
4,820
|
|
||||
Net loss attributable to noncontrolling interest
|
65
|
|
|
174
|
|
|
120
|
|
|
198
|
|
||||
Net income attributable to The New Home Company Inc.
|
$
|
2,509
|
|
|
$
|
449
|
|
|
$
|
1,695
|
|
|
$
|
5,018
|
|
|
Three Months Ended
June 30, |
|
Increase/(Decrease)
|
|
Six Months Ended
June 30, |
|
Increase/(Decrease)
|
|||||||||||||||||||
|
2016
|
|
2015
|
|
Amount
|
|
%
|
|
2016
|
|
2015
|
|
Amount
|
|
%
|
|||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||||||||
Net new home orders
|
64
|
|
|
40
|
|
|
24
|
|
|
60
|
%
|
|
120
|
|
|
65
|
|
|
55
|
|
|
85
|
%
|
|||
Monthly absorption rate
|
1.9
|
|
|
1.9
|
|
|
—
|
|
|
—
|
%
|
|
1.9
|
|
|
2.0
|
|
|
(0.1
|
)
|
|
(5
|
)%
|
|||
Cancellation rate
|
6
|
%
|
|
5
|
%
|
|
1
|
%
|
|
N/A
|
|
|
13
|
%
|
|
4
|
%
|
|
9
|
%
|
|
N/A
|
|
|||
Selling communities at end of period
|
|
12
|
|
|
8
|
|
|
4
|
|
|
50
|
%
|
||||||||||||||
Backlog (dollar value)
|
|
$
|
278,000
|
|
|
$
|
136,600
|
|
|
$
|
141,400
|
|
|
104
|
%
|
|||||||||||
Backlog (homes)
|
|
125
|
|
|
65
|
|
|
60
|
|
|
92
|
%
|
||||||||||||||
Average sales price of backlog
|
|
$
|
2,224
|
|
|
$
|
2,102
|
|
|
$
|
122
|
|
|
6
|
%
|
|
Three Months Ended
June 30, |
|
Increase/(Decrease)
|
|
Six Months Ended
June 30, |
|
Increase/(Decrease)
|
||||||||||||||||||||||
|
2016
|
|
2015
|
|
Amount
|
|
%
|
|
2016
|
|
2015
|
|
Amount
|
|
%
|
||||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||||||||||
New homes delivered
|
43
|
|
|
12
|
|
|
31
|
|
|
258
|
%
|
|
71
|
|
|
41
|
|
|
30
|
|
|
73
|
%
|
||||||
Home sales revenue
|
$
|
78,836
|
|
|
$
|
19,202
|
|
|
$
|
59,634
|
|
|
311
|
%
|
|
$
|
121,139
|
|
|
$
|
75,437
|
|
|
$
|
45,702
|
|
|
61
|
%
|
Average sales price of homes delivered
|
$
|
1,833
|
|
|
$
|
1,600
|
|
|
$
|
233
|
|
|
15
|
%
|
|
$
|
1,706
|
|
|
$
|
1,840
|
|
|
$
|
(134
|
)
|
|
(7
|
)%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||
|
2016
|
|
%
|
|
2015
|
|
%
|
|
2016
|
|
%
|
|
2015
|
|
%
|
||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||||||||
Home sales revenue
|
$
|
78,836
|
|
|
100.0
|
%
|
|
$
|
19,202
|
|
|
100.0
|
%
|
|
$
|
121,139
|
|
|
100.0
|
%
|
|
$
|
75,437
|
|
|
100.0
|
%
|
Cost of home sales
|
69,390
|
|
|
88.0
|
%
|
|
16,598
|
|
|
86.4
|
%
|
|
106,060
|
|
|
87.6
|
%
|
|
64,006
|
|
|
84.8
|
%
|
||||
Homebuilding gross margin
|
9,446
|
|
|
12.0
|
%
|
|
2,604
|
|
|
13.6
|
%
|
|
15,079
|
|
|
12.4
|
%
|
|
11,431
|
|
|
15.2
|
%
|
||||
Add: Interest in cost of home sales
|
1,063
|
|
|
1.3
|
%
|
|
121
|
|
|
0.6
|
%
|
|
1,711
|
|
|
1.5
|
%
|
|
480
|
|
|
0.6
|
%
|
||||
Adjusted homebuilding gross margin
(1)
|
$
|
10,509
|
|
|
13.3
|
%
|
|
$
|
2,725
|
|
|
14.2
|
%
|
|
$
|
16,790
|
|
|
13.9
|
%
|
|
$
|
11,911
|
|
|
15.8
|
%
|
|
(1)
|
Adjusted homebuilding gross margin is a non-GAAP financial measure. We believe that by adding interest in cost of home sales back to homebuilding gross margin, investors are able to assess the performance of our homebuilding business excluding our interest cost. We believe this information is meaningful as it isolates the impact that leverage has on homebuilding gross margin and permits investors to make better comparisons with our competitors who adjust gross margins in a similar fashion.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||
|
2016
|
|
%
|
|
2015
|
|
%
|
|
2016
|
|
%
|
|
2015
|
|
%
|
||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||||||||
Fee building revenues
|
$
|
30,028
|
|
|
100.0
|
%
|
|
$
|
26,429
|
|
|
100.0
|
%
|
|
$
|
72,965
|
|
|
100.0
|
%
|
|
$
|
73,059
|
|
|
100.0
|
%
|
Cost of fee building
|
28,317
|
|
|
94.3
|
%
|
|
25,209
|
|
|
95.4
|
%
|
|
69,231
|
|
|
94.9
|
%
|
|
68,986
|
|
|
94.4
|
%
|
||||
Fee building gross margin
|
$
|
1,711
|
|
|
5.7
|
%
|
|
$
|
1,220
|
|
|
4.6
|
%
|
|
$
|
3,734
|
|
|
5.1
|
%
|
|
$
|
4,073
|
|
|
5.6
|
%
|
|
Three Months Ended
June 30, |
|
As a Percentage of Home Sales Revenue
|
|
Six Months Ended
June 30, |
|
As a Percentage of Home Sales Revenue
|
||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||||||||
Selling and marketing expenses
|
$
|
5,046
|
|
|
$
|
1,939
|
|
|
6.4
|
%
|
|
10.1
|
%
|
|
$
|
8,522
|
|
|
$
|
4,089
|
|
|
7.0
|
%
|
|
5.4
|
%
|
General and administrative expenses (“G&A”)
|
5,833
|
|
|
4,313
|
|
|
7.4
|
%
|
|
22.5
|
%
|
|
11,008
|
|
|
7,973
|
|
|
9.1
|
%
|
|
10.6
|
%
|
||||
Total selling, marketing and G&A (“SG&A”)
|
$
|
10,879
|
|
|
$
|
6,252
|
|
|
13.8
|
%
|
|
32.6
|
%
|
|
$
|
19,530
|
|
|
$
|
12,062
|
|
|
16.1
|
%
|
|
16.0
|
%
|
|
Three Months Ended
June 30, |
|
|
|
Six Months Ended
June 30, |
|
|
||||||||||||||||||||||
|
|
Increase/(Decrease)
|
|
|
Increase/(Decrease)
|
||||||||||||||||||||||||
|
2016
|
|
2015
|
|
Amount
|
|
%
|
|
2016
|
|
2015
|
|
Amount
|
|
%
|
||||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||||||||||
Unconsolidated Joint Ventures—Homebuilding
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Operational Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net new home orders
|
30
|
|
|
103
|
|
|
(73
|
)
|
|
(71
|
)%
|
|
76
|
|
|
211
|
|
|
(135
|
)
|
|
(64
|
)%
|
||||||
Monthly absorption rate
|
2.5
|
|
|
3.4
|
|
|
(0.9
|
)
|
|
(26
|
)%
|
|
2.5
|
|
|
3.8
|
|
|
(1.3
|
)
|
|
(34
|
)%
|
||||||
Cancellation rate
|
9
|
%
|
|
3
|
%
|
|
6
|
%
|
|
N/A
|
|
|
11
|
%
|
|
5
|
%
|
|
6
|
%
|
|
N/A
|
|
||||||
New homes delivered
|
55
|
|
|
45
|
|
|
10
|
|
|
22
|
%
|
|
100
|
|
|
99
|
|
|
1
|
|
|
1
|
%
|
||||||
Home sales revenue
|
$
|
47,698
|
|
|
$
|
42,601
|
|
|
$
|
5,097
|
|
|
12
|
%
|
|
$
|
85,899
|
|
|
$
|
93,840
|
|
|
$
|
(7,941
|
)
|
|
(8
|
)%
|
Average sales price of homes delivered
|
$
|
867
|
|
|
$
|
947
|
|
|
$
|
(80
|
)
|
|
(8
|
)%
|
|
$
|
859
|
|
|
$
|
948
|
|
|
$
|
(89
|
)
|
|
(9
|
)%
|
Selling communities at end of period
|
|
3
|
|
|
10
|
|
|
(7
|
)
|
|
(70
|
)%
|
|||||||||||||||||
Backlog (dollar value)
|
|
$
|
71,970
|
|
|
$
|
238,309
|
|
|
$
|
(166,339
|
)
|
|
(70
|
)%
|
||||||||||||||
Backlog (homes)
|
|
76
|
|
|
187
|
|
|
(111
|
)
|
|
(59
|
)%
|
|||||||||||||||||
Average sales price of backlog
|
|
$
|
947
|
|
|
$
|
1,274
|
|
|
$
|
(327
|
)
|
|
(26
|
)%
|
|
(1)
|
Adjusted unconsolidated joint ventures homebuilding gross margin is a non-GAAP financial measure. We believe that by adding interest in cost of unconsolidated joint venture home sales back to unconsolidated joint ventures homebuilding gross margin, investors are able to assess the performance of our unconsolidated joint ventures excluding interest cost. We believe this information is meaningful as it isolates the impact that leverage has on unconsolidated joint venture homebuilding gross margin and permits investors to make better comparisons with our competitors who adjust gross margins in a similar fashion.
|
|
Three Months Ended
June 30, |
|
|
|
Six Months Ended June 30,
|
|
|
||||||||||||||||||||||
|
|
Increase/(Decrease)
|
|
|
Increase/(Decrease)
|
||||||||||||||||||||||||
|
2016
|
|
2015
|
|
Amount
|
|
%
|
|
2016
|
|
2015
|
|
Amount
|
|
%
|
||||||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||||||||||||
Unconsolidated Joint Ventures—Land
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Operational Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Land sales revenue
|
$
|
22,406
|
|
|
$
|
15,585
|
|
|
$
|
6,821
|
|
|
44
|
%
|
|
$
|
26,162
|
|
|
$
|
45,570
|
|
|
$
|
(19,408
|
)
|
|
(43
|
)%
|
Backlog (dollar value)
(1)
|
|
$
|
18,988
|
|
|
$
|
45,662
|
|
|
$
|
(26,674
|
)
|
|
(58
|
)%
|
|
(1)
|
Amounts include $4.3 million and $18.1 million of backlog dollar value related to purchase contracts between an unconsolidated joint venture and the Company for the six months ended June 30, 2016 and 2015, respectively.
|
|
June 30,
|
|
Increase/(Decrease)
|
||||||||
|
2016
|
|
2015
|
|
Amount
|
|
%
|
||||
Unconsolidated Joint Ventures—Lots Owned and Controlled
|
|
|
|
|
|
|
|
||||
Homebuilding
|
|
|
|
|
|
|
|
||||
Lots owned
|
610
|
|
|
847
|
|
|
(237
|
)
|
|
(28
|
)%
|
Lots controlled
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
NA
|
|
Homebuilding Total
|
610
|
|
|
847
|
|
|
(237
|
)
|
|
(28
|
)%
|
Land Development
|
|
|
|
|
|
|
|
||||
Lots owned
|
2,277
|
|
|
2,420
|
|
|
(143
|
)
|
|
(6
|
)%
|
Lots controlled
(1)
|
235
|
|
|
235
|
|
|
—
|
|
|
—
|
%
|
Land Development Total
|
2,512
|
|
|
2,655
|
|
|
(143
|
)
|
|
(5
|
)%
|
Total
|
3,122
|
|
|
3,502
|
|
|
(380
|
)
|
|
(11
|
)%
|
|
(1)
|
Consists of lots that are under purchase and sale agreements.
|
|
June 30,
|
|
Increase/(Decrease)
|
||||||||
|
2016
|
|
2015
|
|
Amount
|
|
%
|
||||
Lots Owned
|
|
|
|
|
|
|
|
||||
Southern California
|
226
|
|
|
146
|
|
|
80
|
|
|
55
|
%
|
Northern California
|
249
|
|
|
305
|
|
|
(56
|
)
|
|
(18
|
)%
|
Total
|
475
|
|
|
451
|
|
|
24
|
|
|
5
|
%
|
Lots Controlled
(1)
|
|
|
|
|
|
|
|
||||
Southern California
|
631
|
|
|
513
|
|
|
118
|
|
|
23
|
%
|
Northern California
|
379
|
|
|
82
|
|
|
297
|
|
|
362
|
%
|
Fee Building Projects
(2)
|
1,001
|
|
|
1,511
|
|
|
(510
|
)
|
|
(34
|
)%
|
Total
|
2,011
|
|
|
2,106
|
|
|
(95
|
)
|
|
(5
|
)%
|
Total Lots Owned and Controlled
|
2,486
|
|
|
2,557
|
|
|
(71
|
)
|
|
(3
|
)%
|
|
(1)
|
Includes lots that we control under purchase and sale agreements or option agreements subject to customary conditions and have not yet closed. There can be no assurance that such acquisitions will occur.
|
(2)
|
Subject to agreements with property owners.
|
Financial Covenants
|
Actual at June 30,
2016
|
|
Covenant
Requirement at June 30,
2016
|
||||
|
(Dollars in thousands)
|
||||||
Unencumbered Liquid Assets
|
$
|
29,811
|
|
|
$
|
7,000
|
|
EBITDA to Interest Incurred
|
5.9 : 1.0
|
|
|
> 1.5 : 1.0
|
|
||
Tangible Net Worth
|
$
|
223,468
|
|
|
$
|
166,255
|
|
Leverage Ratio
|
50
|
%
|
|
< 65%
|
|
||
Adjusted Leverage Ratio
(1)
|
36
|
%
|
|
< 50%
|
|
|
|
June 30,
|
|
December 31,
|
||||
|
2016
|
|
2015
|
||||
|
(Dollars in thousands)
|
||||||
Notes payable, including unsecured revolving credit facility
|
$
|
242,924
|
|
|
$
|
83,082
|
|
Equity, exclusive of noncontrolling interest
|
223,468
|
|
|
220,775
|
|
||
Total capital
|
$
|
466,392
|
|
|
$
|
303,857
|
|
Ratio of debt-to-capital
(1)
|
52.1
|
%
|
|
27.3
|
%
|
||
|
|
|
|
||||
Notes payable, including unsecured revolving credit facility
|
$
|
242,924
|
|
|
$
|
83,082
|
|
Less: cash, cash equivalents and restricted cash
|
30,688
|
|
|
46,254
|
|
||
Net debt
|
212,236
|
|
|
36,828
|
|
||
Equity, exclusive of noncontrolling interest
|
223,468
|
|
|
220,775
|
|
||
Total capital
|
$
|
435,704
|
|
|
$
|
257,603
|
|
Ratio of net debt-to-capital
(2)
|
48.7
|
%
|
|
14.3
|
%
|
|
(1)
|
The ratio of debt-to-capital is computed as the quotient obtained by dividing notes payable by the sum of total notes payable (including unsecured revolving credit facility) plus equity, exclusive of noncontrolling interest.
|
(2)
|
The ratio of net debt-to-capital is computed as the quotient obtained by dividing net debt (which is notes payable (including unsecured revolving credit facility) less cash to the extent necessary to reduce the debt balance to zero) by total capital, exclusive of noncontrolling interest. The most directly comparable GAAP financial measure is the ratio of debt-to-capital. We believe the ratio of net debt-to-capital is a relevant financial measure for investors to understand the leverage employed in our operations and as an indicator of our ability to obtain financing. We believe that by deducting our cash from our notes payable, we provide a measure of our indebtedness that takes into account our cash liquidity. We believe this provides useful information as the ratio of debt-to-capital does not take into account our liquidity and we believe that the ratio net of cash provides supplemental information by which our financial position may be considered. Investors may also find this to be helpful when comparing our leverage to the leverage of our competitors that present similar information. See the table above reconciling this non-GAAP financial measure to the ratio of debt-to-capital.
|
•
|
Net cash used in operating activities was
$165.7 million
for the
six
months ended
June 30, 2016
versus
$90.2 million
for the
six
months ended
June 30, 2015
. The year-over-year change was primarily a result of an increase in cash outflows for real estate inventories of
$170.2 million
in the 2016 period compared to
$103.8 million
in the 2015 period. The significant investment in real estate inventories in the 2016 period was the result of growth in our community count, increased land spend, and increased construction activity at our wholly owned communities.
|
•
|
Net cash provided by investing activities was
$3.5 million
for the
six
months ended
June 30, 2016
compared to
$19.9 million
for the
six
months ended
June 30, 2015
. For the
six
months ended
June 30, 2016
, our net distributions from unconsolidated joint ventures (excluding distributions of earnings) were
$1.7 million
compared to
$20.1 million
during the
six
months ended
June 30, 2015
and was the primary reason net cash provided by investing activities decreased. The reduction in distributions from unconsolidated joint ventures primarily related to the reduction in revenues and the winding down of certain joint ventures.
|
•
|
Net cash provided by financing activities was
$146.2 million
for the
six
months ended
June 30, 2016
versus
$62.9 million
for the
six
months ended
June 30, 2015
. The change was primarily driven by net borrowings under our revolving credit facility of
$164.0 million
in the 2016 period due to the growth in our community count, increased land spend and construction activity at our wholly owned communities versus
$64.5 million
in the 2015 period.
|
•
|
leveraging our capital base
|
•
|
accessing larger or highly desirable lot positions
|
•
|
expanding our market opportunities
|
•
|
managing financial and market risk associated with land holdings
|
•
|
establishing strategic alliances
|
|
(1)
|
Scheduled maturities of the unconsolidated joint venture debt as of
June 30, 2016
are as follows: $0.9 million matures in 2016, $97.3 million matures in 2017, $8.6 matures in 2018 and $4.7 million matures in 2019.
|
(2)
|
Estimated future capital commitment represents our proportionate share of estimated future contributions as of
June 30, 2016
. Actual contributions may differ materially.
|
(3)
|
Certain members of the Company's board of directors are affiliated with entities that have an investment in these joint ventures.
|
(4)
|
The debt associated with this joint venture consists of a land seller note.
|
(5)
|
Land development joint ventures.
|
Project, City
|
Total
Number of
Homes or Lots to
Be Built at
Completion
(1)
|
|
Cumulative
Homes or Lots Delivered as of June 30, 2016 |
|
Lots Owned and Controlled as of
June 30, 2016
(2)
|
|
Backlog at June 30, 2016
(3)
|
|
Homes or Lots Delivered for the Six Months Ended
June 30, 2016
|
|
Sales Range of Homes Delivered or in Backlog
(in 000's)
(4)
|
|||||
Wholly Owned Projects
|
||||||||||||||||
Southern California
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Canyon Oaks, Calabasas
(6)
|
69
|
|
|
—
|
|
|
69
|
|
|
—
|
|
|
—
|
|
|
Not Available
|
Amelia, Irvine
|
110
|
|
|
47
|
|
|
63
|
|
|
5
|
|
|
8
|
|
|
$1,900 - $2,500
|
Trevi, Irvine
|
82
|
|
|
41
|
|
|
41
|
|
|
9
|
|
|
6
|
|
|
$2,400 - $3,300
|
Fiano, Newport Beach
|
39
|
|
|
19
|
|
|
20
|
|
|
20
|
|
|
8
|
|
|
$3,500 - $5,900
|
Twenty Oaks, Thousand Oaks
|
20
|
|
|
1
|
|
|
19
|
|
|
5
|
|
|
1
|
|
|
$1,140 - $1,500
|
Cressa, Portola Springs
|
95
|
|
|
—
|
|
|
95
|
|
|
30
|
|
|
—
|
|
|
$970 - $1,200
|
Sherman Oaks 7, Sherman Oaks
|
7
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
Not Available
|
Oliva, San Juan Capistrano
(7)
|
37
|
|
|
8
|
|
|
29
|
|
|
9
|
|
|
8
|
|
|
$1,680 - $2,400
|
Coral Canyon, Newport Coast
|
28
|
|
|
—
|
|
|
28
|
|
|
3
|
|
|
—
|
|
|
$3,700 - $4,200
|
Coral Crest, Newport Coast
|
27
|
|
|
—
|
|
|
27
|
|
|
8
|
|
|
—
|
|
|
$5,200 - $6,400
|
Great Park, Irvine
|
54
|
|
|
—
|
|
|
54
|
|
|
—
|
|
|
—
|
|
|
Not Available
|
Marywood, Orange
|
40
|
|
|
—
|
|
|
40
|
|
|
—
|
|
|
—
|
|
|
Not Available
|
La Floresta, Brea
|
80
|
|
|
—
|
|
|
80
|
|
|
—
|
|
|
—
|
|
|
Not Available
|
MR2, Rancho Mission Viejo
|
80
|
|
|
—
|
|
|
80
|
|
|
—
|
|
|
—
|
|
|
Not Available
|
MR4, Rancho Mission Viejo
|
72
|
|
|
—
|
|
|
72
|
|
|
—
|
|
|
—
|
|
|
Not Available
|
Civita, San Diego
|
133
|
|
|
—
|
|
|
133
|
|
|
—
|
|
|
—
|
|
|
Not Available
|
Southern California Total
|
973
|
|
|
116
|
|
|
857
|
|
|
89
|
|
|
31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Northern California
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Mission Blvd, Fremont
|
33
|
|
|
—
|
|
|
33
|
|
|
2
|
|
|
—
|
|
|
$840 - $870
|
Woodbury Garden, Lafayette
|
36
|
|
|
35
|
|
|
1
|
|
|
1
|
|
|
9
|
|
|
$1,200 - $2,000
|
Woodbury Terrace, Lafayette
|
20
|
|
|
4
|
|
|
16
|
|
|
—
|
|
|
4
|
|
|
$940 - $1,190
|
Chaparral, El Dorado Hills
|
72
|
|
|
10
|
|
|
62
|
|
|
5
|
|
|
10
|
|
|
$430 - $540
|
The Grove, Granite Bay
|
14
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
$1,300 - $1,400
|
Candela, Sacramento
|
10
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
$280 - $320
|
Cannery Heirloom, Davis
|
72
|
|
|
18
|
|
|
54
|
|
|
13
|
|
|
3
|
|
|
$460 - $600
|
Cannery Sage, Davis
|
73
|
|
|
10
|
|
|
63
|
|
|
15
|
|
|
5
|
|
|
$770 - $1,370
|
Bayto, Santa Clara
(6)
|
33
|
|
|
—
|
|
|
33
|
|
|
—
|
|
|
—
|
|
|
Not Available
|
Shannon Townhomes, Fremont
|
25
|
|
|
—
|
|
|
25
|
|
|
—
|
|
|
—
|
|
|
Not Available
|
Project, City
|
Total
Number of
Homes or Lots to
Be Built at
Completion
(1)
|
|
Cumulative
Homes or Lots Delivered as of June 30, 2016 |
|
Lots Owned and Controlled as of
June 30, 2016
(2)
|
|
Backlog at June 30, 2016
(3)
|
|
Homes or Lots Delivered for the Six Months Ended
June 30, 2016
|
|
Sales Range of Homes Delivered or in Backlog
(in 000's)
(4)
|
|||||
Houret, Milpitas
|
114
|
|
|
—
|
|
|
114
|
|
|
—
|
|
|
—
|
|
|
Not Available
|
University Flats, Davis
|
96
|
|
|
—
|
|
|
96
|
|
|
—
|
|
|
—
|
|
|
Not Available
|
River Islands, Lathrop
|
131
|
|
|
—
|
|
|
131
|
|
|
—
|
|
|
—
|
|
|
Not Available
|
Northern California Total
|
729
|
|
|
101
|
|
|
628
|
|
|
36
|
|
|
40
|
|
|
|
Wholly Owned Projects Total
|
1,702
|
|
|
217
|
|
|
1,485
|
|
|
125
|
|
|
71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Unconsolidated Homebuilding Joint Venture Projects
(5)
|
||||||||||||||||
Southern California
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Aqua, Villa Metro, Valencia
|
95
|
|
|
95
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
$380 - $420
|
Terra, Villa Metro, Valencia
|
99
|
|
|
95
|
|
|
4
|
|
|
4
|
|
|
12
|
|
|
$410 - $490
|
Sol, Villa Metro, Valencia
|
99
|
|
|
97
|
|
|
2
|
|
|
1
|
|
|
11
|
|
|
$420 - $500
|
Cielo, Villa Metro, Valencia
|
22
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
$400 - $500
|
Avanti, Calabasas
(6)
|
72
|
|
|
9
|
|
|
63
|
|
|
9
|
|
|
9
|
|
|
$1,270 - $1,700
|
Meridian, Newport Beach
|
79
|
|
|
79
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
$1,710 - $4,350
|
Oliva, San Juan Capistrano
(7)
|
3
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
$1,830 - $2,230
|
Southern California Total
|
469
|
|
|
400
|
|
|
69
|
|
|
14
|
|
|
39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Northern California
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Row Towns, Orchard Park, San Jose
|
107
|
|
|
75
|
|
|
32
|
|
|
19
|
|
|
27
|
|
|
$840 - $1,140
|
Court Towns, Orchard Park, San Jose
|
60
|
|
|
59
|
|
|
1
|
|
|
1
|
|
|
21
|
|
|
$790 - $960
|
Condo Flats, Orchard Park, San Jose
|
72
|
|
|
42
|
|
|
30
|
|
|
29
|
|
|
13
|
|
|
$800 - $1,140
|
McKinley Village, Sacramento
|
336
|
|
|
—
|
|
|
336
|
|
|
—
|
|
|
—
|
|
|
Not Available
|
Tidelands, San Mateo
(6)
|
76
|
|
|
—
|
|
|
76
|
|
|
13
|
|
|
—
|
|
|
$1,100 - $1,360
|
Northern California Total
|
651
|
|
|
176
|
|
|
475
|
|
|
62
|
|
|
61
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Arizona
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Mountain Shadows, Paradise Valley
|
66
|
|
|
—
|
|
|
66
|
|
|
—
|
|
|
—
|
|
|
Not Available
|
Arizona Total
|
66
|
|
|
—
|
|
|
66
|
|
|
—
|
|
|
—
|
|
|
|
Unconsolidated Homebuilding Joint Venture Projects Total
|
1,186
|
|
|
576
|
|
|
610
|
|
|
76
|
|
|
100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Unconsolidated Land Joint Venture Projects
(5)
|
||||||||||||||||
Southern California
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Bedford Ranch, Corona
(8)
|
1,435
|
|
|
—
|
|
|
1,435
|
|
|
—
|
|
|
—
|
|
|
n/a
|
Southern California Total
|
1,435
|
|
|
—
|
|
|
1,435
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Northern California
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Russell Ranch, Folsom
(8)
|
870
|
|
|
—
|
|
|
870
|
|
|
—
|
|
|
—
|
|
|
n/a
|
Foster Square, Foster City
(8)
|
421
|
|
|
421
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
n/a
|
Cannery Park, Davis
(8)
|
547
|
|
|
340
|
|
|
207
|
|
|
121
|
|
|
63
|
|
|
n/a
|
Northern California Total
|
1,838
|
|
|
761
|
|
|
1,077
|
|
|
121
|
|
|
63
|
|
|
|
Unconsolidated Land Joint Venture Projects Total
|
3,273
|
|
|
761
|
|
|
2,512
|
|
|
121
|
|
|
63
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Fee Building Projects
|
||||||||||||||||
Strada, Orchard Hills, Irvine
|
224
|
|
|
183
|
|
|
41
|
|
|
n/a
|
|
|
78
|
|
|
n/a
|
Laurel, Cypress Village, Irvine
|
120
|
|
|
120
|
|
|
—
|
|
|
n/a
|
|
|
31
|
|
|
n/a
|
Jasmine Ext., Cypress Village, Irvine
|
126
|
|
|
126
|
|
|
—
|
|
|
n/a
|
|
|
80
|
|
|
n/a
|
Corte Bella, Orchard Hills, Irvine
|
118
|
|
|
118
|
|
|
—
|
|
|
n/a
|
|
|
9
|
|
|
n/a
|
Entrata, Orchard Hills, Irvine
|
123
|
|
|
86
|
|
|
37
|
|
|
n/a
|
|
|
38
|
|
|
n/a
|
Project, City
|
Total
Number of
Homes or Lots to
Be Built at
Completion
(1)
|
|
Cumulative
Homes or Lots Delivered as of June 30, 2016 |
|
Lots Owned and Controlled as of
June 30, 2016
(2)
|
|
Backlog at June 30, 2016
(3)
|
|
Homes or Lots Delivered for the Six Months Ended
June 30, 2016
|
|
Sales Range of Homes Delivered or in Backlog
(in 000's)
(4)
|
|||||
Terrazza, Orchard Hills, Irvine
|
149
|
|
|
80
|
|
|
69
|
|
|
n/a
|
|
|
37
|
|
|
n/a
|
Vista Scena, Orchard Hills, Irvine
|
195
|
|
|
93
|
|
|
102
|
|
|
n/a
|
|
|
46
|
|
|
n/a
|
Avalon, Eastwood Village, Irvine
|
156
|
|
|
33
|
|
|
123
|
|
|
n/a
|
|
|
33
|
|
|
n/a
|
Belvedere, Eastwood Village, Irvine
|
134
|
|
|
3
|
|
|
131
|
|
|
n/a
|
|
|
3
|
|
|
n/a
|
Helena, Eastwood Village, Irvine
|
142
|
|
|
10
|
|
|
132
|
|
|
n/a
|
|
|
10
|
|
|
n/a
|
Marin, Eastwood Village, Irvine
|
157
|
|
|
18
|
|
|
139
|
|
|
n/a
|
|
|
18
|
|
|
n/a
|
Petaluma, Eastwood Village, Irvine
|
106
|
|
|
24
|
|
|
82
|
|
|
n/a
|
|
|
24
|
|
|
n/a
|
Piedmont, Eastwood Village, Irvine
|
159
|
|
|
14
|
|
|
145
|
|
|
n/a
|
|
|
14
|
|
|
n/a
|
Fee Building Projects Total
|
1,909
|
|
|
908
|
|
|
1,001
|
|
|
|
|
421
|
|
|
|
|
(1)
|
Subject to change and there can be no assurance we will build these homes or develop these lots.
|
(2)
|
Includes lots in backlog as of
June 30, 2016
.
|
(3)
|
Backlog consists of homes or lots under sales contracts that had not closed as of
June 30, 2016
. Delivery of homes or lots in backlog may not occur. Backlog has not been reduced to reflect our historical cancellation rate. Backlog for fee building projects is not included as we are not responsible for sales activities and do not record home sales revenue related to those projects.
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(4)
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Reflects the price for homes already delivered, or that were in backlog as of
June 30, 2016
. The actual prices at which homes are sold in the future may differ. A range is not included for fee building projects because we are not responsible for sales activities, nor our land development projects.
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(5)
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We own economic interests in our unconsolidated joint ventures, which include our capital interests that generally range from
5%
to
35%
plus, in each case, a share of the distributions from the joint ventures in excess of our capital interest if certain minimum returns are achieved. These economic interests vary among our different unconsolidated joint ventures.
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(6)
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This project includes market-rate and below-market rate homes. The below-market rate homes are recognized as an affordable component by certain agencies and jurisdictions. As such, the sales price range for the below-market rate homes has been excluded from the table.
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(7)
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The Company purchased its partner's remaining membership interest in this joint venture in January 2016; following such purchase, this joint venture is a wholly owned project.
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(8)
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This project is anticipated to be a lot sale program, in which we may buy lots from the unconsolidated joint venture and/or sell lots to merchant builders. As such, a sales range is not presented.
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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Item 4.
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Controls and Procedures
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The New Home Company Inc.
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By:
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/s/ H. Lawrence Webb
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H. Lawrence Webb
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Chief Executive Officer
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By:
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/s/ John M. Stephens
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John M. Stephens
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Chief Financial Officer
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Participant:
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Grant Date:
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Number of RSUs:
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Vesting Commencement Date:
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Vesting Schedule:
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[To be specified in individual award agreements]
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(1)
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I have reviewed this quarterly report on Form 10-Q of The New Home Company Inc.;
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(2)
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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(3)
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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(4)
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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(5)
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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July 29, 2016
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/s/ H. Lawrence Webb
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H. Lawrence Webb
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Chief Executive Officer (Principal Executive Officer)
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(1)
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I have reviewed this quarterly report on Form 10-Q of The New Home Company Inc.;
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(2)
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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(3)
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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(4)
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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||
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c.
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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(5)
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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July 29, 2016
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/s/ John M. Stephens
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John M. Stephens
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Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
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1.
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date:
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July 29, 2016
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/s/ H. Lawrence Webb
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H. Lawrence Webb
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Chief Executive Officer (Principal Executive Officer)
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1.
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date:
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July 29, 2016
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/s/ John M. Stephens
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John M. Stephens
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Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
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