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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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Emerging growth company
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ý
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Page
Number
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PART I Financial Information
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Item 1.
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||
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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
|
|
March 31,
|
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December 31,
|
||||
|
2018
|
|
2017
|
||||
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(Unaudited)
|
|
|
||||
Assets
|
|
|
|
||||
Cash and cash equivalents
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$
|
91,061
|
|
|
$
|
123,546
|
|
Restricted cash
|
561
|
|
|
424
|
|
||
Contracts and accounts receivable
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17,400
|
|
|
23,224
|
|
||
Due from affiliates
|
528
|
|
|
1,060
|
|
||
Real estate inventories
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459,388
|
|
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416,143
|
|
||
Investment in and advances to unconsolidated joint ventures
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57,874
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55,824
|
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||
Other assets
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21,282
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24,291
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Total assets
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$
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648,094
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$
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644,512
|
|
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||||
Liabilities and equity
|
|
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||||
Accounts payable
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$
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33,589
|
|
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$
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23,722
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|
Accrued expenses and other liabilities
|
35,524
|
|
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38,054
|
|
||
Unsecured revolving credit facility
|
—
|
|
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—
|
|
||
Senior notes, net
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319,029
|
|
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318,656
|
|
||
Total liabilities
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388,142
|
|
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380,432
|
|
||
Commitments and contingencies (Note 11)
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|
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|
||||
Equity:
|
|
|
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||||
Stockholders' equity:
|
|
|
|
||||
Preferred stock, $0.01 par value, 50,000,000 shares authorized, no shares outstanding
|
—
|
|
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—
|
|
||
Common stock, $0.01 par value, 500,000,000 shares authorized, 21,007,902 and 20,876,837, shares issued and outstanding as of March 31, 2018 and December 31, 2017, respectively
|
210
|
|
|
209
|
|
||
Additional paid-in capital
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199,361
|
|
|
199,474
|
|
||
Retained earnings
|
60,302
|
|
|
64,307
|
|
||
Total stockholders' equity
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259,873
|
|
|
263,990
|
|
||
Non-controlling interest in subsidiary
|
79
|
|
|
90
|
|
||
Total equity
|
259,952
|
|
|
264,080
|
|
||
Total liabilities and equity
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$
|
648,094
|
|
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$
|
644,512
|
|
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Three Months Ended March 31,
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||||||
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2018
|
|
2017
|
||||
Revenues:
|
|
|
|
||||
Home sales
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$
|
79,437
|
|
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$
|
69,406
|
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Fee building, including management fees from unconsolidated joint ventures of $980 and $1,214, respectively
|
43,794
|
|
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55,617
|
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||
|
123,231
|
|
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125,023
|
|
||
Cost of Sales:
|
|
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|
||||
Home sales
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69,694
|
|
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60,065
|
|
||
Fee building
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42,699
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|
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53,926
|
|
||
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112,393
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113,991
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|
||||
Gross Margin:
|
|
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||||
Home sales
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9,743
|
|
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9,341
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||
Fee building
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1,095
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|
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1,691
|
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||
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10,838
|
|
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11,032
|
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||
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||||
Selling and marketing expenses
|
(6,639
|
)
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|
(5,001
|
)
|
||
General and administrative expenses
|
(6,019
|
)
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(5,090
|
)
|
||
Equity in net income of unconsolidated joint ventures
|
335
|
|
|
306
|
|
||
Other income (expense), net
|
(26
|
)
|
|
113
|
|
||
Pretax income (loss)
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(1,511
|
)
|
|
1,360
|
|
||
(Provision) benefit for income taxes
|
860
|
|
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(524
|
)
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||
Net income (loss)
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(651
|
)
|
|
836
|
|
||
Net loss attributable to non-controlling interest
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11
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10
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|
||
Net income (loss) attributable to The New Home Company Inc.
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$
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(640
|
)
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$
|
846
|
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||||
Earnings (loss) per share attributable to The New Home Company Inc.:
|
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|
||||
Basic
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$
|
(0.03
|
)
|
|
$
|
0.04
|
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Diluted
|
$
|
(0.03
|
)
|
|
$
|
0.04
|
|
Weighted average shares outstanding:
|
|
|
|
||||
Basic
|
20,924,753
|
|
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20,767,464
|
|
||
Diluted
|
20,924,753
|
|
|
20,899,263
|
|
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Stockholders’ Equity
|
|
Non-controlling Interest in Subsidiary
|
|
Total Equity
|
|||||||||||||||||||||
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Number of Shares of
Common
Stock
|
|
Common Stock
|
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Additional
Paid-in
Capital
|
|
Retained Earnings
|
|
Total
Stockholders’
Equity
|
|
|
|||||||||||||||
Balance at December 31, 2016
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20,712,166
|
|
|
$
|
207
|
|
|
$
|
197,161
|
|
|
$
|
47,155
|
|
|
$
|
244,523
|
|
|
$
|
101
|
|
|
$
|
244,624
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
846
|
|
|
846
|
|
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(10
|
)
|
|
836
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
611
|
|
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—
|
|
|
611
|
|
|
—
|
|
|
611
|
|
||||||
Shares net settled with the Company to satisfy employee personal income tax liabilities resulting from share based compensation plans
|
(53,613
|
)
|
|
—
|
|
|
(565
|
)
|
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—
|
|
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(565
|
)
|
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—
|
|
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(565
|
)
|
||||||
Shares issued through stock plans
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204,846
|
|
|
2
|
|
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(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Balance at March 31, 2017
|
20,863,399
|
|
|
$
|
209
|
|
|
$
|
197,205
|
|
|
$
|
48,001
|
|
|
$
|
245,415
|
|
|
$
|
91
|
|
|
$
|
245,506
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at December 31, 2017
|
20,876,837
|
|
|
$
|
209
|
|
|
$
|
199,474
|
|
|
$
|
64,307
|
|
|
$
|
263,990
|
|
|
$
|
90
|
|
|
$
|
264,080
|
|
Adoption of ASC 606 (see Note 1)
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,365
|
)
|
|
(3,365
|
)
|
|
—
|
|
|
(3,365
|
)
|
||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(640
|
)
|
|
(640
|
)
|
|
(11
|
)
|
|
(651
|
)
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
842
|
|
|
—
|
|
|
842
|
|
|
—
|
|
|
842
|
|
||||||
Shares net settled with the Company to satisfy employee personal income tax liabilities resulting from share based compensation plans
|
(83,816
|
)
|
|
—
|
|
|
(954
|
)
|
|
—
|
|
|
(954
|
)
|
|
—
|
|
|
(954
|
)
|
||||||
Shares issued through stock plans
|
214,881
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Balance at March 31, 2018
|
21,007,902
|
|
|
$
|
210
|
|
|
$
|
199,361
|
|
|
$
|
60,302
|
|
|
$
|
259,873
|
|
|
$
|
79
|
|
|
$
|
259,952
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
(651
|
)
|
|
$
|
836
|
|
Adjustments to reconcile net income (loss) to net cash used in operating activities:
|
|
|
|
||||
Deferred taxes
|
(1,481
|
)
|
|
(54
|
)
|
||
Amortization of equity based compensation
|
842
|
|
|
611
|
|
||
Distributions of earnings from unconsolidated joint ventures
|
715
|
|
|
1,588
|
|
||
Abandoned project costs
|
35
|
|
|
34
|
|
||
Equity in net income of unconsolidated joint ventures
|
(335
|
)
|
|
(306
|
)
|
||
Deferred profit from unconsolidated joint ventures
|
136
|
|
|
148
|
|
||
Depreciation and amortization
|
1,022
|
|
|
123
|
|
||
Net changes in operating assets and liabilities:
|
|
|
|
||||
Contracts and accounts receivable
|
5,824
|
|
|
2,151
|
|
||
Due from affiliates
|
485
|
|
|
799
|
|
||
Real estate inventories
|
(37,529
|
)
|
|
(36,077
|
)
|
||
Other assets
|
87
|
|
|
(3,669
|
)
|
||
Accounts payable
|
9,867
|
|
|
4,988
|
|
||
Accrued expenses and other liabilities
|
(8,459
|
)
|
|
(10,979
|
)
|
||
Net cash used in operating activities
|
(29,442
|
)
|
|
(39,807
|
)
|
||
Investing activities:
|
|
|
|
||||
Purchases of property and equipment
|
(72
|
)
|
|
(50
|
)
|
||
Contributions and advances to unconsolidated joint ventures
|
(4,273
|
)
|
|
(3,796
|
)
|
||
Distributions of capital and repayment of advances from unconsolidated joint ventures
|
2,264
|
|
|
24
|
|
||
Interest collected on advances to unconsolidated joint ventures
|
129
|
|
|
—
|
|
||
Net cash used in investing activities
|
(1,952
|
)
|
|
(3,822
|
)
|
||
Financing activities:
|
|
|
|
||||
Borrowings from credit facility
|
—
|
|
|
72,000
|
|
||
Repayments of credit facility
|
—
|
|
|
(190,000
|
)
|
||
Proceeds from senior notes
|
—
|
|
|
247,402
|
|
||
Payment of debt issuance costs
|
—
|
|
|
(5,967
|
)
|
||
Tax withholding paid on behalf of employees for stock awards
|
(954
|
)
|
|
(565
|
)
|
||
Net cash (used in) provided by financing activities
|
(954
|
)
|
|
122,870
|
|
||
Net (decrease) increase in cash, cash equivalents and restricted cash
|
(32,348
|
)
|
|
79,241
|
|
||
Cash, cash equivalents and restricted cash – beginning of period
|
123,970
|
|
|
31,081
|
|
||
Cash, cash equivalents and restricted cash – end of period
|
$
|
91,622
|
|
|
$
|
110,322
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
Cash and cash equivalents
|
$
|
91,061
|
|
|
$
|
110,113
|
|
Restricted cash
|
561
|
|
|
209
|
|
||
Total cash, cash equivalents, and restricted cash shown in the statements of cash flows
|
$
|
91,622
|
|
|
$
|
110,322
|
|
•
|
Participating rights - provide the non-controlling equity holders the ability to direct significant financial and operational decision made in the ordinary course of business that most significantly influence the entity's economic performance.
|
•
|
Kick-out rights - allow the non-controlling equity holders to remove the general partner or managing member without cause.
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands, except per share amounts)
|
||||||
Numerator:
|
|
|
|
||||
Net income (loss) attributable to The New Home Company Inc.
|
$
|
(640
|
)
|
|
$
|
846
|
|
|
|
|
|
||||
Denominator:
|
|
|
|
||||
Basic weighted-average shares outstanding
|
20,924,753
|
|
|
20,767,464
|
|
||
Effect of dilutive shares:
|
|
|
|
||||
Stock options and unvested restricted stock units
|
—
|
|
|
131,799
|
|
||
Diluted weighted-average shares outstanding
|
20,924,753
|
|
|
20,899,263
|
|
||
|
|
|
|
||||
Basic earnings (loss) per share attributable to The New Home Company Inc.
|
$
|
(0.03
|
)
|
|
$
|
0.04
|
|
Diluted earnings (loss) per share attributable to The New Home Company Inc.
|
$
|
(0.03
|
)
|
|
$
|
0.04
|
|
|
|
|
|
||||
Antidilutive stock options and unvested restricted stock units not included in diluted earnings per share
|
1,371,973
|
|
|
846,018
|
|
|
March 31,
|
|
December 31,
|
||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
Contracts receivable:
|
|
|
|
||||
Costs incurred on fee building projects
|
$
|
42,699
|
|
|
$
|
184,827
|
|
Estimated earnings
|
1,095
|
|
|
5,497
|
|
||
|
43,794
|
|
|
190,324
|
|
||
Less: amounts collected during the period
|
(28,958
|
)
|
|
(178,704
|
)
|
||
Contracts receivable
|
$
|
14,836
|
|
|
$
|
11,620
|
|
|
|
|
|
||||
Contracts receivable:
|
|
|
|
||||
Billed
|
$
|
—
|
|
|
$
|
—
|
|
Unbilled
|
14,836
|
|
|
11,620
|
|
||
|
14,836
|
|
|
11,620
|
|
||
Accounts receivable:
|
|
|
|
||||
Escrow receivables
|
2,514
|
|
|
11,554
|
|
||
Other receivables
|
50
|
|
|
50
|
|
||
Contracts and accounts receivable
|
$
|
17,400
|
|
|
$
|
23,224
|
|
|
March 31,
|
|
December 31,
|
||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
Deposits and pre-acquisition costs
|
$
|
35,861
|
|
|
$
|
35,846
|
|
Land held and land under development
|
41,734
|
|
|
47,757
|
|
||
Homes completed or under construction
|
344,232
|
|
|
302,884
|
|
||
Model homes
|
37,561
|
|
|
29,656
|
|
||
|
$
|
459,388
|
|
|
$
|
416,143
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
Interest incurred
|
$
|
6,716
|
|
|
$
|
2,036
|
|
Interest capitalized to inventory
|
(6,195
|
)
|
|
(1,872
|
)
|
||
Interest capitalized to investment in unconsolidated joint ventures
|
(521
|
)
|
|
(164
|
)
|
||
Interest expensed
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||||
Capitalized interest in beginning inventory
|
$
|
16,453
|
|
|
$
|
6,342
|
|
Interest capitalized as a cost of inventory
|
6,195
|
|
|
1,872
|
|
||
Previously capitalized interest included in cost of sales
|
(2,764
|
)
|
|
(1,551
|
)
|
||
Capitalized interest in ending inventory
|
19,884
|
|
|
6,663
|
|
||
|
|
|
|
||||
Capitalized interest in beginning investment in unconsolidated joint ventures
|
1,472
|
|
|
—
|
|
||
Interest capitalized to investment in unconsolidated joint ventures
|
521
|
|
|
164
|
|
||
Previously capitalized interest included in equity in net income of unconsolidated joint ventures
|
(31
|
)
|
|
—
|
|
||
Capitalized interest in ending investment in unconsolidated joint ventures
|
1,962
|
|
|
164
|
|
||
Total capitalized interest in ending inventory and investments in unconsolidated joint ventures
|
$
|
21,846
|
|
|
$
|
6,827
|
|
|
|
|
|
||||
Capitalized interest as a percentage of inventory
|
4.3
|
%
|
|
2.1
|
%
|
||
Interest included in cost of sales as a percentage of home sales revenue
|
3.4
|
%
|
|
2.2
|
%
|
||
|
|
|
|
||||
Capitalized interest as a percentage of investment in and advances to unconsolidated joint ventures
|
3.4
|
%
|
|
0.3
|
%
|
|
March 31,
|
|
December 31,
|
||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
Cash and cash equivalents
|
$
|
32,073
|
|
|
$
|
30,017
|
|
Restricted cash
|
15,047
|
|
|
15,041
|
|
||
Real estate inventories
|
420,031
|
|
|
396,850
|
|
||
Other assets
|
757
|
|
|
3,942
|
|
||
Total assets
|
$
|
467,908
|
|
|
$
|
445,850
|
|
|
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
39,159
|
|
|
$
|
34,959
|
|
Notes payable
|
80,847
|
|
|
78,341
|
|
||
Total liabilities
|
120,006
|
|
|
113,300
|
|
||
The New Home Company's equity
|
52,946
|
|
|
50,523
|
|
||
Other partners' equity
|
294,956
|
|
|
282,027
|
|
||
Total equity
|
347,902
|
|
|
332,550
|
|
||
Total liabilities and equity
|
$
|
467,908
|
|
|
$
|
445,850
|
|
Debt-to-capitalization ratio
|
18.9
|
%
|
|
19.1
|
%
|
||
Debt-to-equity ratio
|
23.2
|
%
|
|
23.6
|
%
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
Revenues
|
$
|
32,013
|
|
|
$
|
26,620
|
|
Cost of sales and expenses
|
31,209
|
|
|
27,484
|
|
||
Net income (loss) of unconsolidated joint ventures
|
$
|
804
|
|
|
$
|
(864
|
)
|
Equity in net income of unconsolidated joint ventures reflected in the accompanying condensed consolidated statements of operations
|
$
|
335
|
|
|
$
|
306
|
|
|
March 31,
|
|
December 31,
|
||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
|
|
|
|
||||
Property, equipment and capitalized selling and marketing costs, net
(1)(2)
|
$
|
8,220
|
|
|
$
|
603
|
|
Deferred tax asset, net
|
7,798
|
|
|
6,317
|
|
||
Prepaid expenses
|
4,062
|
|
|
4,937
|
|
||
Warranty insurance receivable
(3)
|
1,202
|
|
|
1,202
|
|
||
Capitalized selling and marketing costs
(1)(4)
|
—
|
|
|
11,232
|
|
||
|
$
|
21,282
|
|
|
$
|
24,291
|
|
|
|
(1)
|
Under the adoption of the requirements of ASC 606 on January 1, 2018, certain selling and marketing costs that were previously capitalized under former accounting guidance were written off. For the current year, remaining selling and marketing costs and those incurred during the 2018 first quarter that are permitted to be capitalized under ASC 340 are included in the line item "Property, equipment and capitalized selling and marketing costs, net." Under the modified retrospective adoption approach, the December 31, 2017 balance has not been restated. For more information on this subject, please refer to Note 1 to the condensed consolidated financial statements.
|
(2)
|
The Company amortized
$0.9 million
of capitalized selling and marketing costs to selling and marketing expenses during the three months ended March 31, 2018.
|
(3)
|
Of the
$1.2 million
amount for December 2017, approximately
$0.6 million
related to 2016 estimated warranty insurance recoveries. For further discussion, please see Note 8 to our condensed consolidated financial statements.
|
(4)
|
The Company amortized
$1.1 million
of capitalized selling and marketing costs to selling and marketing expenses during the
three
months ended March 31, 2017.
|
|
March 31,
|
|
December 31,
|
||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
Warranty accrual
(1)
|
$
|
6,998
|
|
|
$
|
6,859
|
|
Accrued compensation and benefits
|
3,129
|
|
|
9,164
|
|
||
Accrued interest
|
12,146
|
|
|
6,217
|
|
||
Completion reserve
|
2,293
|
|
|
5,792
|
|
||
Income taxes payable
|
5,682
|
|
|
6,368
|
|
||
Deferred profit from unconsolidated joint ventures
|
—
|
|
|
136
|
|
||
Other accrued expenses
|
5,276
|
|
|
3,518
|
|
||
|
$
|
35,524
|
|
|
$
|
38,054
|
|
(1)
|
Included in the amount at December 31, 2017 is approximately
$1.2 million
of additional warranty liabilities estimated to be covered by our insurance policies that were adjusted to present the warranty reserves and related estimated warranty insurance receivable on a gross basis at December 31, 2017. Of this amount, approximately
$0.6 million
related to 2016 estimated warranty insurance recoveries.
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
Beginning warranty accrual for homebuilding projects
|
$
|
6,634
|
|
|
$
|
4,608
|
|
Warranty provision for homebuilding projects
|
516
|
|
|
271
|
|
||
Warranty payments for homebuilding projects
|
(375
|
)
|
|
(201
|
)
|
||
Ending warranty accrual for homebuilding projects
|
6,775
|
|
|
4,678
|
|
||
|
|
|
|
||||
Beginning warranty accrual for fee building projects
|
225
|
|
|
323
|
|
||
Warranty provision for fee building projects
|
—
|
|
|
—
|
|
||
Warranty efforts for fee building projects
|
(2
|
)
|
|
—
|
|
||
Ending warranty accrual for fee building projects
|
223
|
|
|
323
|
|
||
Total ending warranty accrual
|
$
|
6,998
|
|
|
$
|
5,001
|
|
|
March 31,
|
|
December 31,
|
||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
7.25% Senior Notes due 2022, net
|
$
|
319,029
|
|
|
$
|
318,656
|
|
Unsecured revolving credit facility
|
—
|
|
|
—
|
|
||
Total Notes Payable
|
$
|
319,029
|
|
|
$
|
318,656
|
|
•
|
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
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
||||||||
|
(dollars in thousands)
|
||||||||||||||
7.25% Senior Notes due 2022, net
(1)
|
$
|
319,029
|
|
|
$
|
334,750
|
|
|
$
|
318,656
|
|
|
$
|
336,375
|
|
|
|
|
Three Months Ended March 31,
|
||||||||||||
|
2018
|
|
2017
|
||||||||||
|
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
|
826,498
|
|
|
$
|
11.00
|
|
|
835,786
|
|
|
$
|
11.00
|
|
Granted
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Exercised
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Forfeited
|
(5,028
|
)
|
|
$
|
11.00
|
|
|
—
|
|
|
$
|
—
|
|
Outstanding, end of period
|
821,470
|
|
|
$
|
11.00
|
|
|
835,786
|
|
|
$
|
11.00
|
|
Exercisable, end of period
|
821,470
|
|
|
$
|
11.00
|
|
|
835,786
|
|
|
$
|
11.00
|
|
|
Three Months Ended March 31,
|
||||||||||||
|
2018
|
|
2017
|
||||||||||
|
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
|
562,082
|
|
|
$
|
10.72
|
|
|
474,989
|
|
|
$
|
10.66
|
|
Granted
|
131,412
|
|
|
$
|
11.68
|
|
|
293,223
|
|
|
$
|
10.67
|
|
Vested
|
(214,881
|
)
|
|
$
|
10.69
|
|
|
(204,846
|
)
|
|
$
|
10.60
|
|
Forfeited
|
—
|
|
|
$
|
—
|
|
|
(3,102
|
)
|
|
$
|
11.11
|
|
Outstanding, end of period
|
478,613
|
|
|
$
|
11.00
|
|
|
560,264
|
|
|
$
|
10.68
|
|
|
Three Months Ended March 31,
|
|||||
|
2018
|
|||||
|
Number of Shares
|
|
Weighted-Average Grant-Date Fair Value per Share
|
|||
Performance Share Unit Activity
|
|
|
|
|||
Outstanding, beginning of period
|
—
|
|
|
$
|
—
|
|
Granted (at target)
|
125,422
|
|
|
$
|
11.68
|
|
Vested
|
—
|
|
|
$
|
—
|
|
Forfeited
|
—
|
|
|
$
|
—
|
|
Outstanding, end of period (at target)
|
125,422
|
|
|
$
|
11.68
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
Expense related to:
|
|
|
|
||||
Stock options
|
$
|
—
|
|
|
$
|
11
|
|
Restricted stock units
|
764
|
|
|
600
|
|
||
Performance share units
|
78
|
|
|
—
|
|
||
|
$
|
842
|
|
|
$
|
611
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
Revenues:
|
|
|
|
||||
Homebuilding
|
$
|
79,437
|
|
|
$
|
69,406
|
|
Fee building, including management fees
|
43,794
|
|
|
55,617
|
|
||
Total
|
$
|
123,231
|
|
|
$
|
125,023
|
|
|
|
|
|
||||
Pretax income (loss):
|
|
|
|
||||
Homebuilding
|
$
|
(2,606
|
)
|
|
$
|
(331
|
)
|
Fee building, including management fees
|
1,095
|
|
|
1,691
|
|
||
Total
|
$
|
(1,511
|
)
|
|
$
|
1,360
|
|
|
March 31,
|
|
December 31,
|
||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
Assets:
|
|
|
|
||||
Homebuilding
|
$
|
631,716
|
|
|
$
|
631,087
|
|
Fee building
|
16,378
|
|
|
13,425
|
|
||
Total
|
$
|
648,094
|
|
|
$
|
644,512
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
Supplemental disclosures of cash flow information
|
|
|
|
||||
Interest paid, net of amounts capitalized
|
$
|
—
|
|
|
$
|
—
|
|
Income taxes paid
|
$
|
—
|
|
|
$
|
8,100
|
|
Supplemental disclosures of non-cash transactions
|
|
|
|
||||
Contribution of real estate to unconsolidated joint ventures
|
$
|
—
|
|
|
$
|
1,013
|
|
|
March 31, 2018
|
||||||||||||||||||
|
NWHM Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments
|
|
Consolidated NWHM
|
||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
48,873
|
|
|
$
|
42,006
|
|
|
$
|
182
|
|
|
$
|
—
|
|
|
$
|
91,061
|
|
Restricted cash
|
—
|
|
|
561
|
|
|
—
|
|
|
—
|
|
|
561
|
|
|||||
Contracts and accounts receivable
|
10
|
|
|
19,036
|
|
|
—
|
|
|
(1,646
|
)
|
|
17,400
|
|
|||||
Intercompany receivables
|
147,518
|
|
|
—
|
|
|
—
|
|
|
(147,518
|
)
|
|
—
|
|
|||||
Due from affiliates
|
—
|
|
|
528
|
|
|
—
|
|
|
—
|
|
|
528
|
|
|||||
Real estate inventories
|
—
|
|
|
459,388
|
|
|
—
|
|
|
—
|
|
|
459,388
|
|
|||||
Investment in and advances to unconsolidated joint ventures
|
—
|
|
|
57,874
|
|
|
—
|
|
|
—
|
|
|
57,874
|
|
|||||
Investment in subsidiaries
|
387,970
|
|
|
—
|
|
|
—
|
|
|
(387,970
|
)
|
|
—
|
|
|||||
Other assets
|
10,298
|
|
|
10,984
|
|
|
|
|
|
|
21,282
|
|
|||||||
Total assets
|
$
|
594,669
|
|
|
$
|
590,377
|
|
|
$
|
182
|
|
|
$
|
(537,134
|
)
|
|
$
|
648,094
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities and equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
55
|
|
|
$
|
33,534
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
33,589
|
|
Accrued expenses and other liabilities
|
15,712
|
|
|
21,345
|
|
|
103
|
|
|
(1,636
|
)
|
|
35,524
|
|
|||||
Intercompany payables
|
—
|
|
|
147,518
|
|
|
—
|
|
|
(147,518
|
)
|
|
—
|
|
|||||
Due to affiliates
|
—
|
|
|
10
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|||||
Senior notes, net
|
319,029
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
319,029
|
|
|||||
Total liabilities
|
334,796
|
|
|
202,407
|
|
|
103
|
|
|
(149,164
|
)
|
|
388,142
|
|
|||||
Stockholders' equity
|
259,873
|
|
|
387,970
|
|
|
—
|
|
|
(387,970
|
)
|
|
259,873
|
|
|||||
Non-controlling interest in subsidiary
|
—
|
|
|
—
|
|
|
79
|
|
|
—
|
|
|
79
|
|
|||||
Total equity
|
259,873
|
|
|
387,970
|
|
|
79
|
|
|
(387,970
|
)
|
|
259,952
|
|
|||||
Total liabilities and equity
|
$
|
594,669
|
|
|
$
|
590,377
|
|
|
$
|
182
|
|
|
$
|
(537,134
|
)
|
|
$
|
648,094
|
|
|
December 31, 2017
|
||||||||||||||||||
|
NWHM Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments
|
|
Consolidated NWHM
|
||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
99,586
|
|
|
$
|
23,772
|
|
|
$
|
188
|
|
|
$
|
—
|
|
|
$
|
123,546
|
|
Restricted cash
|
—
|
|
|
424
|
|
|
—
|
|
|
—
|
|
|
424
|
|
|||||
Contracts and accounts receivable
|
10
|
|
|
24,238
|
|
|
—
|
|
|
(1,024
|
)
|
|
23,224
|
|
|||||
Intercompany receivables
|
129,414
|
|
|
—
|
|
|
—
|
|
|
(129,414
|
)
|
|
—
|
|
|||||
Due from affiliates
|
—
|
|
|
1,060
|
|
|
—
|
|
|
—
|
|
|
1,060
|
|
|||||
Real estate inventories
|
—
|
|
|
416,143
|
|
|
—
|
|
|
—
|
|
|
416,143
|
|
|||||
Investment in and advances to unconsolidated joint ventures
|
—
|
|
|
55,824
|
|
|
—
|
|
|
—
|
|
|
55,824
|
|
|||||
Investment in subsidiaries
|
356,443
|
|
|
—
|
|
|
—
|
|
|
(356,443
|
)
|
|
—
|
|
|||||
Other assets
|
8,464
|
|
|
15,827
|
|
|
—
|
|
|
—
|
|
|
24,291
|
|
|||||
Total assets
|
$
|
593,917
|
|
|
$
|
537,288
|
|
|
$
|
188
|
|
|
$
|
(486,881
|
)
|
|
$
|
644,512
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities and equity
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
237
|
|
|
$
|
23,479
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
23,722
|
|
Accrued expenses and other liabilities
|
11,034
|
|
|
27,954
|
|
|
80
|
|
|
(1,014
|
)
|
|
38,054
|
|
|||||
Intercompany payables
|
—
|
|
|
129,414
|
|
|
—
|
|
|
(129,414
|
)
|
|
—
|
|
|||||
Due to affiliates
|
—
|
|
|
10
|
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|||||
Senior notes, net
|
318,656
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
318,656
|
|
|||||
Total liabilities
|
329,927
|
|
|
180,857
|
|
|
86
|
|
|
(130,438
|
)
|
|
380,432
|
|
|||||
Stockholders' equity
|
263,990
|
|
|
356,431
|
|
|
12
|
|
|
(356,443
|
)
|
|
263,990
|
|
|||||
Non-controlling interest in subsidiary
|
—
|
|
|
—
|
|
|
90
|
|
|
—
|
|
|
90
|
|
|||||
Total equity
|
263,990
|
|
|
356,431
|
|
|
$
|
102
|
|
|
(356,443
|
)
|
|
264,080
|
|
||||
Total liabilities and equity
|
$
|
593,917
|
|
|
$
|
537,288
|
|
|
$
|
188
|
|
|
$
|
(486,881
|
)
|
|
$
|
644,512
|
|
|
Three Months Ended March 31, 2018
|
||||||||||||||||||
|
NWHM Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments
|
|
Consolidated NWHM
|
||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Home sales
|
$
|
—
|
|
|
$
|
79,437
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
79,437
|
|
Fee building
|
—
|
|
|
43,794
|
|
|
—
|
|
|
—
|
|
|
43,794
|
|
|||||
|
—
|
|
|
123,231
|
|
|
—
|
|
|
—
|
|
|
123,231
|
|
|||||
Cost of Sales:
|
|
|
|
|
|
|
|
|
|
||||||||||
Home sales
|
—
|
|
|
69,670
|
|
|
24
|
|
|
—
|
|
|
69,694
|
|
|||||
Fee building
|
—
|
|
|
42,699
|
|
|
—
|
|
|
—
|
|
|
42,699
|
|
|||||
|
—
|
|
|
112,369
|
|
|
24
|
|
|
—
|
|
|
112,393
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross Margin:
|
|
|
|
|
|
|
|
|
|
||||||||||
Home sales
|
—
|
|
|
9,767
|
|
|
(24
|
)
|
|
—
|
|
|
9,743
|
|
|||||
Fee building
|
—
|
|
|
1,095
|
|
|
—
|
|
|
—
|
|
|
1,095
|
|
|||||
|
—
|
|
|
10,862
|
|
|
(24
|
)
|
|
—
|
|
|
10,838
|
|
|||||
Selling and marketing expenses
|
—
|
|
|
(6,639
|
)
|
|
—
|
|
|
—
|
|
|
(6,639
|
)
|
|||||
General and administrative expenses
|
(1,106
|
)
|
|
(4,913
|
)
|
|
—
|
|
|
—
|
|
|
(6,019
|
)
|
|||||
Equity in net income of unconsolidated joint ventures
|
—
|
|
|
335
|
|
|
—
|
|
|
—
|
|
|
335
|
|
|||||
Equity in net loss of subsidiaries
|
(118
|
)
|
|
—
|
|
|
—
|
|
|
118
|
|
|
—
|
|
|||||
Other income (expense), net
|
111
|
|
|
(137
|
)
|
|
—
|
|
|
—
|
|
|
(26
|
)
|
|||||
Pretax income (loss)
|
(1,113
|
)
|
|
(492
|
)
|
|
(24
|
)
|
|
118
|
|
|
(1,511
|
)
|
|||||
(Provision) benefit for income taxes
|
473
|
|
|
387
|
|
|
—
|
|
|
—
|
|
|
860
|
|
|||||
Net income (loss)
|
(640
|
)
|
|
(105
|
)
|
|
(24
|
)
|
|
118
|
|
|
(651
|
)
|
|||||
Net loss attributable to non-controlling interest in subsidiary
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
11
|
|
|||||
Net income (loss) attributable to The New Home Company Inc.
|
$
|
(640
|
)
|
|
$
|
(105
|
)
|
|
$
|
(13
|
)
|
|
$
|
118
|
|
|
$
|
(640
|
)
|
|
Three Months Ended March 31, 2017
|
||||||||||||||||||
|
NWHM Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments
|
|
Consolidated NWHM
|
||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Home sales
|
$
|
—
|
|
|
$
|
69,406
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
69,406
|
|
Fee building
|
—
|
|
|
55,617
|
|
|
—
|
|
|
—
|
|
|
55,617
|
|
|||||
|
—
|
|
|
125,023
|
|
|
—
|
|
|
—
|
|
|
125,023
|
|
|||||
Cost of Sales:
|
|
|
|
|
|
|
|
|
|
||||||||||
Home sales
|
—
|
|
|
60,034
|
|
|
31
|
|
|
—
|
|
|
60,065
|
|
|||||
Fee building
|
490
|
|
|
53,436
|
|
|
—
|
|
|
—
|
|
|
53,926
|
|
|||||
|
490
|
|
|
113,470
|
|
|
31
|
|
|
—
|
|
|
113,991
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross Margin:
|
|
|
|
|
|
|
|
|
|
||||||||||
Home sales
|
—
|
|
|
9,372
|
|
|
(31
|
)
|
|
—
|
|
|
9,341
|
|
|||||
Fee building
|
(490
|
)
|
|
2,181
|
|
|
—
|
|
|
—
|
|
|
1,691
|
|
|||||
|
(490
|
)
|
|
11,553
|
|
|
(31
|
)
|
|
—
|
|
|
11,032
|
|
|||||
Selling and marketing expenses
|
—
|
|
|
(5,001
|
)
|
|
—
|
|
|
—
|
|
|
(5,001
|
)
|
|||||
General and administrative expenses
|
(779
|
)
|
|
(4,311
|
)
|
|
—
|
|
|
—
|
|
|
(5,090
|
)
|
|||||
Equity in net income of unconsolidated joint ventures
|
—
|
|
|
306
|
|
|
—
|
|
|
—
|
|
|
306
|
|
|||||
Equity in net income of subsidiaries
|
1,672
|
|
|
—
|
|
|
—
|
|
|
(1,672
|
)
|
|
—
|
|
|||||
Other income (expense), net
|
18
|
|
|
95
|
|
|
—
|
|
|
—
|
|
|
113
|
|
|||||
Pretax income (loss)
|
421
|
|
|
2,642
|
|
|
(31
|
)
|
|
(1,672
|
)
|
|
1,360
|
|
|||||
(Provision) benefit for income taxes
|
425
|
|
|
(949
|
)
|
|
—
|
|
|
—
|
|
|
(524
|
)
|
|||||
Net income (loss)
|
846
|
|
|
1,693
|
|
|
(31
|
)
|
|
(1,672
|
)
|
|
836
|
|
|||||
Net loss attributable to non-controlling interest in subsidiary
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
|||||
Net income (loss) attributable to The New Home Company Inc.
|
$
|
846
|
|
|
$
|
1,693
|
|
|
$
|
(21
|
)
|
|
$
|
(1,672
|
)
|
|
$
|
846
|
|
|
Three Months Ended March 31, 2018
|
||||||||||||||||||
|
NWHM Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments
|
|
Consolidated NWHM
|
||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||
Net cash used in operating activities
|
$
|
(14,743
|
)
|
|
$
|
(14,693
|
)
|
|
$
|
(6
|
)
|
|
$
|
—
|
|
|
$
|
(29,442
|
)
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of property and equipment
|
(6
|
)
|
|
(66
|
)
|
|
—
|
|
|
—
|
|
|
(72
|
)
|
|||||
Contributions and advances to unconsolidated joint ventures
|
|
|
|
(4,273
|
)
|
|
|
|
|
|
(4,273
|
)
|
|||||||
Contributions to subsidiaries from corporate
|
(56,185
|
)
|
|
|
|
|
|
56,185
|
|
|
—
|
|
|||||||
Distributions of capital from subsidiaries
|
21,175
|
|
|
|
|
|
|
(21,175
|
)
|
|
—
|
|
|||||||
Distributions of capital and repayment of advances from unconsolidated joint ventures
|
—
|
|
|
2,264
|
|
|
|
|
|
|
2,264
|
|
|||||||
Interest collected on advances to unconsolidated joint ventures
|
|
|
|
$
|
129
|
|
|
|
|
|
|
|
|
$
|
129
|
|
|||
Net cash used in investing activities
|
$
|
(35,016
|
)
|
|
$
|
(1,946
|
)
|
|
$
|
—
|
|
|
$
|
35,010
|
|
|
$
|
(1,952
|
)
|
Financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Contributions to subsidiaries from corporate
|
—
|
|
|
56,185
|
|
|
|
|
|
(56,185
|
)
|
|
—
|
|
|||||
Distributions to corporate from subsidiaries
|
|
|
(21,175
|
)
|
|
|
|
|
21,175
|
|
|
—
|
|
||||||
Tax withholding paid on behalf of employees for stock awards
|
(954
|
)
|
|
|
|
|
|
|
|
|
(954
|
)
|
|||||||
Net cash (used in) provided by financing activities
|
$
|
(954
|
)
|
|
$
|
35,010
|
|
|
$
|
—
|
|
|
$
|
(35,010
|
)
|
|
$
|
(954
|
)
|
Net increase (decrease) in cash, cash equivalents and restricted cash
|
(50,713
|
)
|
|
18,371
|
|
|
(6
|
)
|
|
—
|
|
|
(32,348
|
)
|
|||||
Cash, cash equivalents and restricted cash – beginning of period
|
99,586
|
|
|
24,196
|
|
|
188
|
|
|
—
|
|
|
123,970
|
|
|||||
Cash, cash equivalents and restricted cash – end of period
|
$
|
48,873
|
|
|
$
|
42,567
|
|
|
$
|
182
|
|
|
$
|
—
|
|
|
$
|
91,622
|
|
|
Three Months Ended March 31, 2017
|
||||||||||||||||||
|
NWHM Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments
|
|
Consolidated NWHM
|
||||||||||
|
(Dollars in thousands)
|
||||||||||||||||||
Net cash (used in) provided by operating activities
|
$
|
(16,972
|
)
|
|
$
|
(22,652
|
)
|
|
$
|
(35
|
)
|
|
$
|
(148
|
)
|
|
$
|
(39,807
|
)
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of property and equipment
|
(24
|
)
|
|
(26
|
)
|
|
—
|
|
|
—
|
|
|
(50
|
)
|
|||||
Contributions and advances to unconsolidated joint ventures
|
—
|
|
|
(3,796
|
)
|
|
—
|
|
|
—
|
|
|
(3,796
|
)
|
|||||
Contributions to subsidiaries from corporate
|
(57,100
|
)
|
|
—
|
|
|
—
|
|
|
57,100
|
|
|
—
|
|
|||||
Distributions of capital from subsidiaries
|
3,152
|
|
|
—
|
|
|
—
|
|
|
(3,152
|
)
|
|
—
|
|
|||||
Distributions of capital and repayment of advances from unconsolidated joint ventures
|
—
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|||||
Net cash (used in) provided by investing activities
|
$
|
(53,972
|
)
|
|
$
|
(3,798
|
)
|
|
$
|
—
|
|
|
$
|
53,948
|
|
|
$
|
(3,822
|
)
|
Financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Borrowings from credit facility
|
72,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
72,000
|
|
|||||
Repayments of credit facility
|
(190,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(190,000
|
)
|
|||||
Proceeds from senior notes
|
247,402
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
247,402
|
|
|||||
Payment of debt issuance costs
|
(5,967
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,967
|
)
|
|||||
Contributions to subsidiaries from corporate
|
—
|
|
|
57,100
|
|
|
—
|
|
|
(57,100
|
)
|
|
—
|
|
|||||
Distributions to corporate from subsidiaries
|
—
|
|
|
(3,300
|
)
|
|
—
|
|
|
3,300
|
|
|
—
|
|
|||||
Tax withholding paid on behalf of employees for stock awards
|
(565
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(565
|
)
|
|||||
Net cash provided by (used in) financing activities
|
$
|
122,870
|
|
|
$
|
53,800
|
|
|
$
|
—
|
|
|
$
|
(53,800
|
)
|
|
$
|
122,870
|
|
Net increase (decrease) in cash, cash equivalents and restricted cash
|
51,926
|
|
|
27,350
|
|
|
(35
|
)
|
|
—
|
|
|
79,241
|
|
|||||
Cash, cash equivalents and restricted cash – beginning of period
|
16,385
|
|
|
14,427
|
|
|
269
|
|
|
—
|
|
|
31,081
|
|
|||||
Cash, cash equivalents and restricted cash – end of period
|
$
|
68,311
|
|
|
$
|
41,777
|
|
|
$
|
234
|
|
|
$
|
—
|
|
|
$
|
110,322
|
|
Item 2
.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Risks related to our business, including among other things:
|
◦
|
our geographic concentration primarily in California;
|
◦
|
the cyclical nature of the homebuilding industry which is affected by general economic real estate and other business conditions;
|
◦
|
availability of land to acquire and our ability to acquire such land on favorable terms or at all;
|
◦
|
shortages of or increased prices for labor, land or raw materials used in housing construction;
|
◦
|
availability and skill of subcontractors at reasonable rates;
|
◦
|
employment-related liabilities with respect to our contractors' employees;
|
◦
|
the illiquid nature of real estate investments;
|
◦
|
the degree and nature of our competition;
|
◦
|
delays in the development of communities;
|
◦
|
increases in our cancellation rate;
|
◦
|
a large proportion of our fee building revenue being dependent upon one customer;
|
◦
|
construction defect product liability and warranty claims, including the cost and availability of insurance;
|
◦
|
increased costs, delays in land development or home construction and reduced consumer demand resulting from adverse weather conditions or other events outside our control;
|
◦
|
increased cost and reduced consumer demand resulting from power, water and other natural resource shortages or price increases;
|
◦
|
because of the seasonal nature of our business, our quarterly operating results fluctuate;
|
◦
|
we may be unable to obtain suitable bonding for the development of our housing projects;
|
◦
|
inflation could adversely affect our business and financial results;
|
◦
|
a major health and safety incident relating to our business could be costly in terms of potential liabilities and reputational damage;
|
◦
|
negative publicity or poor relations with the residents of our communities could negatively impact sales, which could cause our revenues or results of operations to decline;
|
◦
|
information systems interruption or breach in security;
|
◦
|
we may incur a variety of costs to engage in future growth or expansion of our operations or acquisitions of businesses, and the anticipated benefits may never be realized;
|
◦
|
a reduction in our sales absorption levels may force us to incur and absorb additional community-level costs;
|
◦
|
future terrorist attacks against the United States or increased domestic or international instability could have an adverse effect on our operations;
|
•
|
Risks related to laws and regulations, including among other things:
|
◦
|
mortgage financing, as well as our customer’s ability to obtain such financing, interest rate increases or changes in federal lending programs;
|
◦
|
changes in tax laws can increase the after tax cost of owning a home, and further tax law changes or government fees could adversely affect demand for the homes we build, increase our costs, or negatively affect our operating results;
|
◦
|
new and existing laws and regulations, including environmental laws and regulations, or other governmental actions may increase our expenses, limit the number of homes that we can build or delay the completion of our projects;
|
◦
|
legislation relating to energy and climate change could increase our costs to construct homes;
|
•
|
Risks related to financing and indebtedness, including among other things:
|
◦
|
difficulty in obtaining sufficient capital could prevent us from acquiring land for our developments or increase costs and delays in the completion of our development projects;
|
◦
|
our level of indebtedness may adversely affect our financial position and prevent us from fulfilling our debt obligations, and we may incur additional debt in the future;
|
◦
|
the significant amount and illiquid nature of our joint venture partnerships, in which we have less than a controlling interest;
|
◦
|
a breach of the covenants under the Indenture or any of the other agreements governing our indebtedness could result in an event of default under the Indenture or other such agreements;
|
◦
|
potential future downgrades of our credit ratings could adversely affect our access to capital and could otherwise have a material adverse effect on us;
|
◦
|
interest expense on debt we incur may limit our cash available to fund our growth strategies;
|
◦
|
we may be unable to repurchase the Notes upon a change of control as required by the Indenture;
|
•
|
Risks related to our organization and structure, including among other things:
|
◦
|
our dependence on our key personnel;
|
◦
|
our charter and bylaws could prevent a third party from acquiring us or limit the price that investors might be willing to pay for shares of our common stock;
|
◦
|
the obligations associated with being a public company require significant resources and management attention;
|
◦
|
our status as an emerging growth company with a limited operating history;
|
•
|
Risks related to ownership of our common stock, including among other things:
|
◦
|
the price of our common stock is subject to volatility and our trading volume is relatively low;
|
◦
|
if securities or industry analysts do not publish, or cease publishing, research or reports about us, our business or our market, or if they change their recommendations regarding our common stock adversely, our stock price and trading volume could decline;
|
◦
|
we do not intend to pay dividends on our common stock for the foreseeable future;
|
◦
|
certain stockholders have rights to cause our Company to undertake securities offerings;
|
◦
|
our senior notes rank senior to our common stock upon bankruptcy or liquidation;
|
◦
|
certain large stockholders own a significant percentage of our shares and exert significant influence over us.
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
Revenues:
|
|
|
|
||||
Home sales
|
$
|
79,437
|
|
|
$
|
69,406
|
|
Fee building, including management fees from unconsolidated joint ventures of $980 and $1,214, respectively
|
43,794
|
|
|
55,617
|
|
||
|
123,231
|
|
|
125,023
|
|
||
Cost of Sales:
|
|
|
|
||||
Home sales
|
69,694
|
|
|
60,065
|
|
||
Fee building
|
42,699
|
|
|
53,926
|
|
||
|
112,393
|
|
|
113,991
|
|
||
Gross Margin:
|
|
|
|
||||
Home sales
|
9,743
|
|
|
9,341
|
|
||
Fee building
|
1,095
|
|
|
1,691
|
|
||
|
10,838
|
|
|
11,032
|
|
||
|
|
|
|
||||
Home sales gross margin
|
12.3
|
%
|
|
13.5
|
%
|
||
Fee building gross margin
|
2.5
|
%
|
|
3.0
|
%
|
||
|
|
|
|
||||
Selling and marketing expenses
|
(6,639
|
)
|
|
(5,001
|
)
|
||
General and administrative expenses
|
(6,019
|
)
|
|
(5,090
|
)
|
||
Equity in net income of unconsolidated joint ventures
|
335
|
|
|
306
|
|
||
Other income (expense), net
|
(26
|
)
|
|
113
|
|
||
Pretax income (loss)
|
(1,511
|
)
|
|
1,360
|
|
||
(Provision) benefit for income taxes
|
860
|
|
|
(524
|
)
|
||
Net income (loss)
|
(651
|
)
|
|
836
|
|
||
Net loss attributable to non-controlling interest
|
11
|
|
|
10
|
|
||
Net income (loss) attributable to The New Home Company Inc.
|
$
|
(640
|
)
|
|
$
|
846
|
|
|
|
|
|
||||
Interest incurred
|
$
|
6,716
|
|
|
$
|
2,036
|
|
Adjusted EBITDA
(1)
|
$
|
3,563
|
|
|
$
|
4,961
|
|
Adjusted EBITDA margin percentage
(1)
|
2.9
|
%
|
|
4.0
|
%
|
||
|
|
|
|
||||
|
LTM
(2)
Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Interest incurred
|
$
|
26,658
|
|
|
$
|
8,239
|
|
Adjusted EBITDA
(1)
|
$
|
48,747
|
|
|
$
|
47,302
|
|
Adjusted EBITDA margin percentage
(1)
|
6.5
|
%
|
|
6.4
|
%
|
||
Ratio of Adjusted EBITDA to total interest incurred
(1)
|
1.8x
|
|
|
5.7x
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Adjusted EBITDA, Adjusted EBITDA margin percentage and ratio of Adjusted EBITDA to total interest incurred are non-GAAP measures. Adjusted EBITDA margin percentage is calculated as a percentage of total revenue. Management believes that Adjusted EBITDA, which is a non-GAAP measure, assists investors in understanding and comparing the operating characteristics of homebuilding activities by eliminating many of the differences in companies' respective capitalization, interest costs, tax position and inventory impairments. Due to the significance of the GAAP components excluded, Adjusted EBITDA should not be considered in isolation or as an alternative to net income, cash flows from operations or any other performance measure prescribed by GAAP. The table below reconciles net income (loss), calculated and presented in accordance with GAAP, to Adjusted EBITDA.
|
|
Three Months Ended
March 31,
|
|
LTM
(2)
Ended
March 31,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(Dollars in thousands)
|
||||||||||||||
Net income (loss)
|
$
|
(651
|
)
|
|
$
|
836
|
|
|
$
|
15,654
|
|
|
$
|
22,631
|
|
Add:
|
|
|
|
|
|
|
|
||||||||
Interest amortized to cost of sales and equity in net income of unconsolidated joint ventures
|
2,795
|
|
|
1,551
|
|
|
12,301
|
|
|
6,234
|
|
||||
Provision (benefit) for income taxes
|
(860
|
)
|
|
524
|
|
|
14,006
|
|
|
13,790
|
|
||||
Depreciation and amortization
|
1,022
|
|
|
123
|
|
|
1,348
|
|
|
509
|
|
||||
Amortization of equity-based compensation
|
842
|
|
|
611
|
|
|
3,034
|
|
|
3,097
|
|
||||
Cash distributions of income from unconsolidated joint ventures
|
715
|
|
|
1,588
|
|
|
715
|
|
|
5,330
|
|
||||
Noncash impairments and abandonments
|
35
|
|
|
34
|
|
|
2,584
|
|
|
3,965
|
|
||||
Less:
|
|
|
|
|
|
|
|
||||||||
Gain from notes payable principal reduction
|
—
|
|
|
—
|
|
|
—
|
|
|
(250
|
)
|
||||
Equity in net income of unconsolidated joint ventures
|
(335
|
)
|
|
(306
|
)
|
|
(895
|
)
|
|
(8,004
|
)
|
||||
Adjusted EBITDA
|
$
|
3,563
|
|
|
$
|
4,961
|
|
|
$
|
48,747
|
|
|
$
|
47,302
|
|
Total Revenue
|
$
|
123,231
|
|
|
$
|
125,023
|
|
|
$
|
749,374
|
|
|
$
|
734,239
|
|
Adjusted EBITDA margin percentage
|
2.9
|
%
|
|
4.0
|
%
|
|
6.5
|
%
|
|
6.4
|
%
|
||||
Interest incurred
|
$
|
6,716
|
|
|
$
|
2,036
|
|
|
$
|
26,658
|
|
|
$
|
8,239
|
|
Ratio of Adjusted LTM
(2)
EBITDA to total interest incurred
|
|
|
|
|
|
1.8x
|
|
|
5.7x
|
|
(2)
|
"LTM" indicates amounts for the trailing 12 months.
|
|
Three Months Ended
March 31, |
|
Increase/(Decrease)
|
||||||||
|
2018
|
|
2017
|
|
Amount
|
|
%
|
||||
|
|
||||||||||
Net new home orders:
|
|
|
|
|
|
|
|
||||
Southern California
|
69
|
|
|
56
|
|
|
13
|
|
|
23
|
%
|
Northern California
|
70
|
|
|
70
|
|
|
—
|
|
|
—
|
%
|
Arizona
|
2
|
|
|
—
|
|
|
2
|
|
|
NA
|
|
Total net new home orders
|
141
|
|
|
126
|
|
|
15
|
|
|
12
|
%
|
|
|
|
|
|
|
|
|
||||
Selling communities at end of period:
|
|
|
|
|
|
|
|
||||
Southern California
|
10
|
|
|
7
|
|
|
3
|
|
|
43
|
%
|
Northern California
|
7
|
|
|
7
|
|
|
—
|
|
|
—
|
%
|
Arizona
|
1
|
|
|
—
|
|
|
1
|
|
|
NA
|
|
Total selling communities
|
18
|
|
|
14
|
|
|
4
|
|
|
29
|
%
|
|
|
|
|
|
|
|
|
||||
Average selling communities
|
17
|
|
|
15
|
|
|
2
|
|
|
13
|
%
|
Monthly sales absorption rate per community
(1)
|
2.8
|
|
|
2.8
|
|
|
—
|
|
|
—
|
%
|
Cancellation rate
|
6
|
%
|
|
7
|
%
|
|
(1
|
)%
|
|
NA
|
|
|
|
As of March 31,
|
|||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
% Change
|
|||||||||||||||||||||||||
|
Homes
|
|
Dollar Value
|
|
Average Price
|
|
Homes
|
|
Dollar Value
|
|
Average Price
|
|
Homes
|
|
Dollar Value
|
|
Average Price
|
|||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||||||||||||
Southern California
|
96
|
|
|
$
|
125,747
|
|
|
$
|
1,310
|
|
|
82
|
|
|
$
|
267,141
|
|
|
$
|
3,258
|
|
|
17
|
%
|
|
(53
|
)%
|
|
(60
|
)%
|
Northern California
|
112
|
|
|
98,124
|
|
|
876
|
|
|
69
|
|
|
46,792
|
|
|
678
|
|
|
62
|
%
|
|
110
|
%
|
|
29
|
%
|
||||
Arizona
|
2
|
|
|
4,248
|
|
|
2,124
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
NA
|
|
|
NA
|
|
|
NA
|
|
||||
Total
|
210
|
|
|
$
|
228,119
|
|
|
$
|
1,086
|
|
|
151
|
|
|
$
|
313,933
|
|
|
$
|
2,079
|
|
|
39
|
%
|
|
(27
|
)%
|
|
(48
|
)%
|
|
March 31,
|
|
Increase/(Decrease)
|
||||||||
|
2018
|
|
2017
|
|
Amount
|
|
%
|
||||
Lots Owned:
|
|
|
|
|
|
|
|
||||
Southern California
|
540
|
|
|
354
|
|
|
186
|
|
|
53
|
%
|
Northern California
|
317
|
|
|
280
|
|
|
37
|
|
|
13
|
%
|
Arizona
|
299
|
|
|
—
|
|
|
299
|
|
|
NA
|
|
Total
|
1,156
|
|
|
634
|
|
|
522
|
|
|
82
|
%
|
Lots Controlled:
(1)
|
|
|
|
|
|
|
|
||||
Southern California
|
433
|
|
|
635
|
|
|
(202
|
)
|
|
(32
|
)%
|
Northern California
|
992
|
|
|
253
|
|
|
739
|
|
|
292
|
%
|
Arizona
|
343
|
|
|
148
|
|
|
195
|
|
|
132
|
%
|
Total
|
1,768
|
|
|
1,036
|
|
|
732
|
|
|
71
|
%
|
Total Lots Owned and Controlled - Wholly Owned
|
2,924
|
|
|
1,670
|
|
|
1,254
|
|
|
75
|
%
|
Fee Building
(2)
|
963
|
|
|
817
|
|
|
146
|
|
|
18
|
%
|
Total Lots Owned and Controlled
|
3,887
|
|
|
2,487
|
|
|
1,400
|
|
|
56
|
%
|
|
(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)
|
Lots owned by third party property owners for which we perform general contracting services.
|
|
Three Months Ended March 31,
|
|||||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
% Change
|
|||||||||||||||||||||||||
|
Homes
|
|
Dollar Value
|
|
Average Price
|
|
Homes
|
|
Dollar Value
|
|
Average Price
|
|
Homes
|
|
Dollar Value
|
|
Average Price
|
|||||||||||||
|
(Dollars in thousands)
|
|||||||||||||||||||||||||||||
Southern California
|
44
|
|
|
$
|
44,580
|
|
|
$
|
1,013
|
|
|
22
|
|
|
$
|
43,923
|
|
|
$
|
1,997
|
|
|
100
|
%
|
|
1
|
%
|
|
(49
|
)%
|
Northern California
|
40
|
|
|
34,857
|
|
|
871
|
|
|
32
|
|
|
25,483
|
|
|
796
|
|
|
25
|
%
|
|
37
|
%
|
|
9
|
%
|
||||
Total
|
84
|
|
|
$
|
79,437
|
|
|
$
|
946
|
|
|
54
|
|
|
$
|
69,406
|
|
|
$
|
1,285
|
|
|
56
|
%
|
|
14
|
%
|
|
(26
|
)%
|
|
Three Months Ended March 31,
|
||||||||||||
|
2018
|
|
%
|
|
2017
|
|
%
|
||||||
|
(Dollars in thousands)
|
||||||||||||
Home sales revenue
|
$
|
79,437
|
|
|
100.0
|
%
|
|
$
|
69,406
|
|
|
100.0
|
%
|
Cost of home sales
|
69,694
|
|
|
87.7
|
%
|
|
60,065
|
|
|
86.5
|
%
|
||
Homebuilding gross margin
|
9,743
|
|
|
12.3
|
%
|
|
9,341
|
|
|
13.5
|
%
|
||
Add: Interest in cost of home sales
|
2,764
|
|
|
3.4
|
%
|
|
1,551
|
|
|
2.2
|
%
|
||
Adjusted homebuilding gross margin
(1)
|
$
|
12,507
|
|
|
15.7
|
%
|
|
$
|
10,892
|
|
|
15.7
|
%
|
|
(1)
|
Adjusted homebuilding gross margin (or homebuilding gross margin excluding interest in cost of sales) is a non-GAAP financial measure. We believe this information is meaningful as it isolates the impact leverage has on homebuilding gross margin and permits investors to make better comparisons with our competitors who also break out and adjust gross margins in a similar fashion.
|
|
Three Months Ended March 31,
|
||||||||||||
|
2018
|
|
%
|
|
2017
|
|
%
|
||||||
|
(Dollars in thousands)
|
||||||||||||
Fee building revenues
|
$
|
43,794
|
|
|
100.0
|
%
|
|
$
|
55,617
|
|
|
100.0
|
%
|
Cost of fee building
|
42,699
|
|
|
97.5
|
%
|
|
53,926
|
|
|
97.0
|
%
|
||
Fee building gross margin
|
$
|
1,095
|
|
|
2.5
|
%
|
|
$
|
1,691
|
|
|
3.0
|
%
|
|
Three Months Ended
March 31, |
|
As a Percentage of Home Sales Revenue
|
||||||||||
|
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||
|
(Dollars in thousands)
|
||||||||||||
Selling and marketing expenses
|
$
|
6,639
|
|
|
$
|
5,001
|
|
|
8.4
|
%
|
|
7.2
|
%
|
General and administrative expenses ("G&A")
|
6,019
|
|
|
5,090
|
|
|
7.5
|
%
|
|
7.3
|
%
|
||
Total selling, marketing and G&A ("SG&A")
|
$
|
12,658
|
|
|
$
|
10,091
|
|
|
15.9
|
%
|
|
14.5
|
%
|
|
Three Months Ended
March 31, |
|
|
|||||||||||
|
|
Increase/(Decrease)
|
||||||||||||
|
2018
|
|
2017
|
|
Amount
|
|
%
|
|||||||
|
(Dollars in thousands)
|
|||||||||||||
Unconsolidated Joint Ventures - Homebuilding
|
|
|
|
|
|
|
|
|||||||
Operational Data
|
|
|
|
|
|
|
|
|||||||
Net new home orders
|
36
|
|
|
39
|
|
|
(3
|
)
|
|
(8
|
)%
|
|||
New homes delivered
|
32
|
|
|
32
|
|
|
—
|
|
|
—
|
%
|
|||
Average sales price of homes delivered
|
$
|
976
|
|
|
$
|
786
|
|
|
$
|
190
|
|
|
24
|
%
|
|
|
|
|
|
|
|
|
|||||||
Home sales revenue
|
$
|
31,240
|
|
|
$
|
25,146
|
|
|
$
|
6,094
|
|
|
24
|
%
|
Land sales revenue
|
773
|
|
|
1,474
|
|
|
(701
|
)
|
|
(48
|
)%
|
|||
Total revenue
|
$
|
32,013
|
|
|
$
|
26,620
|
|
|
$
|
5,393
|
|
|
20
|
%
|
Net income (loss)
|
$
|
804
|
|
|
$
|
(864
|
)
|
|
$
|
1,668
|
|
|
NA
|
|
|
|
|
|
|
|
|
|
|||||||
Selling communities at end of period
|
7
|
|
|
9
|
|
|
(2
|
)
|
|
(22
|
)%
|
|||
Backlog (dollar value)
|
$
|
67,244
|
|
|
$
|
63,982
|
|
|
$
|
3,262
|
|
|
5
|
%
|
Backlog (homes)
|
84
|
|
|
69
|
|
|
15
|
|
|
22
|
%
|
|||
Average sales price of backlog
|
$
|
801
|
|
|
$
|
927
|
|
|
$
|
(126
|
)
|
|
(14
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Homebuilding lots owned and controlled
|
309
|
|
|
553
|
|
|
(244
|
)
|
|
(44
|
)%
|
|||
Land development lots owned and controlled
|
2,321
|
|
|
2,415
|
|
|
(94
|
)
|
|
(4
|
)%
|
|||
Total lots owned and controlled
|
2,630
|
|
|
2,968
|
|
|
(338
|
)
|
|
(11
|
)%
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Effective tax rate for The New Home Company Inc.:
|
|
|
|
||||
Pretax income (loss)
|
$
|
(1,511
|
)
|
|
$
|
1,360
|
|
(Provision) benefit for income taxes
|
$
|
860
|
|
|
$
|
(524
|
)
|
Effective tax rate
(1)
|
56.9
|
%
|
|
38.5
|
%
|
||
|
|
|
|
||||
Effective tax rate for The New Home Company Inc. before discrete items:
|
|
|
|
||||
(Provision) benefit for income taxes
|
$
|
860
|
|
|
$
|
(524
|
)
|
Adjustment for discrete items
|
(416
|
)
|
|
5
|
|
||
(Provision) benefit for income taxes before discrete items
|
$
|
444
|
|
|
$
|
(519
|
)
|
Effective tax rate for The New Home Company Inc. before discrete items
(1)
|
29.4
|
%
|
|
38.2
|
%
|
|
March 31, 2018
|
|||
Financial Conditions
|
Actual
|
|
Requirement
|
|
|
|
|||
Fixed Charge Coverage Ratio: EBITDA to Consolidated Interest Incurred or;
|
1.8
|
|
|
> 2.0 : 1.0
|
Leverage Ratio: Indebtedness to Tangible Net Worth
|
1.23
|
|
|
< 2.25 : 1.0
|
|
March 31, 2018
|
|
||||||
Financial Covenants
|
Actual
|
|
Covenant
Requirement
|
|
||||
|
(Dollars in thousands)
|
|
||||||
Unencumbered Liquid Assets (Minimum Liquidity Covenant)
|
$
|
91,061
|
|
|
$
|
10,000
|
|
(1)
|
EBITDA to Interest Incurred
(2)
|
1.83
|
|
|
> 1.75 : 1.0
|
|
|
||
Tangible Net Worth
|
$
|
259,873
|
|
|
$
|
187,395
|
|
|
Leverage Ratio
|
48
|
%
|
|
< 65%
|
|
|
||
Adjusted Leverage Ratio
(3)
|
NA
|
|
|
NA
|
|
|
|
(1)
|
So long as the Company is in compliance with the interest coverage test, the minimum unencumbered liquid assets that the Company must maintain as of the quarter end measurement date is $10 million. If the Company is not in compliance with the interest coverage test, the minimum liquidity requirement as of each quarter end measurement date is not less than the trailing 12 month consolidated interest incurred.
|
(2)
|
If the test is not met, it will not be considered an event of default so long as the Company maintains cash equal to not less than the trailing 12 month consolidated interest incurred.
|
(3)
|
Adjusted Leverage Ratio is computed as total joint venture debt divided by total joint venture equity. The Adjusted Leverage Ratio requirement ceases to apply as of and after the fiscal quarter in which consolidated tangible net worth is at least $250 million. During any period when the Adjusted Leverage Ratio ceases to apply, consolidated tangible net worth shall be reduced by an adjustment equal to the aggregate amount of investments in and advance to unconsolidated joint ventures that exceed 35% of consolidated tangible net worth as calculated without giving effect to this adjustment (the "Adjustment Amount"). As of September 30, 2017, the Company's consolidated tangible net worth exceeded $250 million and therefore the Adjusted Leverage Ratio ceased to apply. In addition, the Adjustment Amount was considered in the calculation of consolidated tangible net worth.
|
|
March 31,
|
|
December 31,
|
||||
|
2018
|
|
2017
|
||||
|
(Dollars in thousands)
|
||||||
Total debt, net
|
$
|
319,029
|
|
|
$
|
318,656
|
|
Equity, exclusive of non-controlling interest
|
259,873
|
|
|
263,990
|
|
||
Total capital
|
$
|
578,902
|
|
|
$
|
582,646
|
|
Ratio of debt-to-capital
(1)
|
55.1
|
%
|
|
54.7
|
%
|
||
|
|
|
|
||||
Total debt, net
|
$
|
319,029
|
|
|
$
|
318,656
|
|
Less: cash, cash equivalents and restricted cash
|
91,622
|
|
|
123,970
|
|
||
Net debt
|
227,407
|
|
|
194,686
|
|
||
Equity, exclusive of non-controlling interest
|
259,873
|
|
|
263,990
|
|
||
Total capital
|
$
|
487,280
|
|
|
$
|
458,676
|
|
Ratio of net debt-to-capital
(2)
|
46.7
|
%
|
|
42.4
|
%
|
|
(1)
|
The ratio of debt-to-capital is computed as the quotient obtained by dividing total debt, net by total capital (the sum of total debt, net plus equity), exclusive of non-controlling interest.
|
(2)
|
The ratio of net debt-to-capital is computed as the quotient obtained by dividing net debt (which is total debt, net less cash, cash equivalents and restricted cash to the extent necessary to reduce the debt balance to zero) by total capital, exclusive of non-controlling 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 debt, 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
$29.4 million
for the
three
months ended
March 31, 2018
versus
$39.8 million
for the
three
months ended
March 31, 2017
. The year-over-year change was primarily a result of a net increase in cash inflows due to increased accounts receivable collections and the timing of trade payables and prepaid expenses in the 2018 first quarter.
|
•
|
Net cash used in investing activities was
$2.0 million
for the
three
months ended
March 31, 2018
compared to
$3.8 million
for the
three
months ended
March 31, 2017
. The decrease is due to a reduction of net contributions and advances to unconsolidated joint ventures. Net contributions and advances were
$2.0 million
in the 2018 first quarter compared to
$3.8 million
during the
three
months ended
March 31, 2017
. Net contributions were down for the three months ended
March 31, 2018
compared to the same period in 2017 due to the partial repayment of an advance from an unconsolidated joint venture and increased distributions.
|
•
|
Net cash used in financing activities was
$1.0 million
for the
three
months ended
March 31, 2018
versus net cash provided by financing activities of
$122.9 million
for the
three
months ended
March 31, 2017
. The change was primarily due to net proceeds from the issuance of $250 million of our Senior Notes due 2022 in the 2017 first quarter.
|
•
|
leveraging our capital base
|
•
|
accessing larger or desirable lot positions
|
•
|
expanding our market opportunities
|
•
|
managing financial and market risk associated with land holdings
|
•
|
establishing strategic alliances
|
|
(1)
|
The carrying value of the debt is presented net of $0.4 million in unamortized debt issuance costs. Scheduled maturities of the unconsolidated joint venture debt as of
March 31, 2018
are as follows: $39.7 matures in 2018 and $41.5 million matures in 2019. Projects at McKinley Village and Mountain Shadows have multiple debt instruments, some of which do not have LTV maintenance agreements.
|
(2)
|
Represents the Company's equity in unconsolidated joint ventures. Equity does not include $3.0 million in advances to unconsolidated joint ventures and $2.0 million of interest capitalized to certain investments in unconsolidated joint ventures which along with equity, are included in investments in and advances to unconsolidated joint ventures in the accompanying condensed consolidated balance sheets.
|
(3)
|
Estimated future capital commitment represents our proportionate share of estimated future contributions to the respective unconsolidated joint ventures as of
March 31, 2018
. Actual contributions may differ materially.
|
(4)
|
Certain members of the Company's board of directors are affiliated with entities that have an investment in these joint ventures. See Note 12 to the condensed consolidated financial statements.
|
(5)
|
Land development joint venture.
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
•
|
an individual who is a citizen or resident of the United States;
|
•
|
a corporation created or organized under the laws of the United States, any state thereof, or the District of Columbia;
|
•
|
an estate, the income of which is subject to U.S. federal income tax regardless of its source; or
|
•
|
a trust that (1) is subject to the primary supervision of a U.S. court and the control of one or more “United States persons” (within the meaning of Section 7701(a)(30) of the Code), or (2) has a valid election in effect to be treated as a United States person for U.S. federal income tax purposes.
|
Exhibit
Number
|
|
Exhibit Description
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
3.3
|
|
|
|
|
|
4.1
|
|
|
|
|
|
4.2
|
|
|
|
|
|
4.3*
|
|
|
|
|
|
10.1*†
|
|
|
|
|
|
10.2*†
|
|
|
|
|
|
10.3*†
|
|
|
|
|
|
10.4*†
|
|
|
|
|
|
10.5*†
|
|
|
|
|
|
31.1*
|
|
|
|
|
|
31.2*
|
|
|
|
|
|
32.1**
|
|
|
|
|
|
32.2**
|
|
|
|
|
|
101*
|
|
The following materials from The New Home Company Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, formatted in eXtensible Business Reporting Language (XBRL): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statement of Equity, (iv) Condensed Consolidated Statements of Cash Flows, and (v) Notes to Unaudited Condensed Consolidated Financial Statements.
|
*
|
Filed herewith
|
**
|
Furnished herewith. The information in Exhibits 32.1 and 32.2 shall not be deemed "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act (including this Report), unless the Registrant specifically incorporates the foregoing information into those documents by reference.
|
†
|
Management Contract or Compensatory Plan or Arrangement
|
|
|
|
|
|
|
|
|
|
|
|
The New Home Company Inc.
|
||
|
|
|
|
|||
|
|
|
|
By:
|
|
/s/ H. Lawrence Webb
|
|
|
|
|
|
|
H. Lawrence Webb
|
|
|
|
|
|
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ John M. Stephens
|
|
|
|
|
|
|
John M. Stephens
|
|
|
|
|
|
|
Chief Financial Officer
|
By:
|
TNHC LAND COMPANY LLC
|
Its:
|
Chief Financial Officer
|
By:
|
TNHC LAND COMPANY LLC
|
1.
|
The second and third sentences of Section 5.5 of the Plan are hereby deleted and replaced with the following:
|
2.
|
This First Amendment shall be and is hereby incorporated in and forms a part of the Plan.
|
3.
|
Except as expressly provided herein, all terms and provisions of the Plan shall remain in full force and effect.
|
(1)
|
I have reviewed this quarterly report on Form 10-Q of The New Home Company Inc.;
|
(2)
|
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;
|
(3)
|
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;
|
(4)
|
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:
|
|
a.
|
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;
|
|
b.
|
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;
|
|
c.
|
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
|
|
d.
|
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
|
(5)
|
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):
|
|
a.
|
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
|
|
b.
|
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.
|
|
|
|
|
Date:
|
May 3, 2018
|
|
/s/ H. Lawrence Webb
|
|
|
|
H. Lawrence Webb
|
|
|
|
Chief Executive Officer (Principal Executive Officer)
|
(1)
|
I have reviewed this quarterly report on Form 10-Q of The New Home Company Inc.;
|
(2)
|
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;
|
(3)
|
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;
|
(4)
|
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:
|
|
a.
|
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;
|
|
b.
|
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;
|
|
||
|
c.
|
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
|
|
d.
|
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
|
(5)
|
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):
|
|
a.
|
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
|
|
b.
|
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.
|
|
|
|
|
Date:
|
May 3, 2018
|
|
/s/ John M. Stephens
|
|
|
|
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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May 3, 2018
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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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May 3, 2018
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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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