DEI Document
DEI Document - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 04, 2015 | |
Entity [Abstract] | ||
Entity Registrant Name | New Home Co Inc. | |
Entity Central Index Key | 1,574,596 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 16,516,546 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Assets | ||
Cash and cash equivalents | $ 35,373 | $ 44,058 |
Restricted cash | 137 | 283 |
Contracts and accounts receivable | 11,084 | 13,164 |
Due from affiliates | 789 | 2,662 |
Real estate inventories | 248,068 | 163,564 |
Investment in unconsolidated joint ventures | 61,791 | 60,564 |
Property and equipment, net of accumulated depreciation | 924 | 984 |
Other assets | 6,044 | 6,679 |
Total assets | 364,210 | 291,958 |
Liabilities and equity | ||
Accounts payable | 24,246 | 16,581 |
Accrued expenses and other liabilities | 7,994 | 11,200 |
Notes payable | 169,174 | 113,751 |
Notes payable to affiliates | 249 | 0 |
Total liabilities | $ 201,663 | $ 141,532 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value, 50,000,000 shares authorized, no shares outstanding | $ 0 | $ 0 |
Common stock, $0.01 par value, 500,000,000 shares authorized, 16,516,546 and 16,448,750, shares issued and outstanding as of September 30, 2015 and December 31, 2014, respectively. | 165 | 164 |
Additional paid-in capital | 145,951 | 143,475 |
Retained earnings | 13,907 | 4,445 |
Total The New Home Company Inc. stockholders' equity | 160,023 | 148,084 |
Noncontrolling interest in subsidiary | 2,524 | 2,342 |
Total equity | 162,547 | 150,426 |
Total liabilities and equity | $ 364,210 | $ 291,958 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 16,516,546 | 16,448,750 |
Common stock, shares outstanding | 16,516,546 | 16,448,750 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenues: | ||||
Home sales | $ 57,878 | $ 8,197 | $ 133,315 | $ 22,855 |
Fee building, including management fees from unconsolidated joint ventures of $3,255, $2,199, $8,356 and $5,524, respectively | 29,099 | 20,408 | 102,158 | 53,817 |
Revenues | 86,977 | 28,605 | 235,473 | 76,672 |
Expenses: | ||||
Cost of homes sales | 49,889 | 6,922 | 115,364 | 18,822 |
Cost of fee building | 27,028 | 19,389 | 96,014 | 51,864 |
Abandoned project costs | 108 | 62 | 551 | 162 |
Selling and marketing | 2,294 | 971 | 4,914 | 2,188 |
General and administrative | 5,105 | 3,149 | 13,078 | 8,028 |
Total expenses | 84,424 | 30,493 | 229,921 | 81,064 |
Equity in net income of unconsolidated joint ventures | 4,056 | 50 | 9,180 | 995 |
Guaranty fee income | 0 | 0 | 0 | 19 |
Other (expense) income, net | (15) | 17 | (292) | 29 |
Income (loss) before taxes | 6,594 | (1,821) | 14,440 | (3,349) |
(Provision) benefit for taxes | (2,249) | 556 | (5,275) | 2,576 |
Net income (loss) | 4,345 | (1,265) | 9,165 | (773) |
Net loss attributable to noncontrolling interests | 99 | 206 | 297 | 240 |
Net income (loss) attributable to The New Home Company Inc. | $ 4,444 | $ (1,059) | $ 9,462 | $ (533) |
Earnings (loss) per share attributable to The New Home Company | ||||
Basic (in dollars per share) | $ 0.27 | $ (0.06) | $ 0.57 | $ (0.03) |
Diluted (in dollars per share) | $ 0.27 | $ (0.06) | $ 0.57 | $ (0.03) |
Weighted average number of shares outstanding | ||||
Basic (in shares) | 16,516,546 | 16,448,750 | 16,507,736 | 15,696,435 |
Diluted (in shares) | 16,733,805 | 16,448,750 | 16,660,673 | 15,696,435 |
Unaudited Condensed Consolidat5
Unaudited Condensed Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Statement [Abstract] | ||||
Management fee revenue, unconsolidated joint ventures | $ 3,255 | $ 2,199 | $ 8,356 | $ 5,524 |
Unaudited Condensed Consolidat6
Unaudited Condensed Consolidated Statement of Equity - 9 months ended Sep. 30, 2015 - USD ($) $ in Thousands | Total | Stockholders' Equity [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Noncontrolling Interest [Member] |
Beginning balance at Dec. 31, 2014 | $ 150,426 | $ 148,084 | $ 164 | $ 143,475 | $ 4,445 | $ 2,342 |
Beginning Balance, Shares at Dec. 31, 2014 | 16,448,750 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | $ 9,165 | 9,462 | 9,462 | (297) | ||
Noncontrolling interest contribution | 1,301 | 1,301 | ||||
Noncontrolling interest distribution | (822) | (822) | ||||
Stock-based compensation expense | 2,725 | 2,725 | 2,725 | |||
Minimum tax withholding paid on behalf of employees for stock awards | (248) | (248) | (248) | |||
Shares issued through stock plans | 0 | 0 | $ (1) | (1) | ||
Shares issued through stock plans | 67,796 | |||||
Ending balance at Sep. 30, 2015 | $ 162,547 | $ 160,023 | $ 165 | $ 145,951 | $ 13,907 | $ 2,524 |
Ending balance, shares at Sep. 30, 2015 | 16,516,546 |
Unaudited Condensed Consolidat7
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Operating activities: | ||
Net income (loss) | $ 9,165 | $ (773) |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Deferred taxes | (4,439) | (1,387) |
Amortization of equity based compensation | 2,725 | 1,807 |
Distributions of earnings from unconsolidated joint ventures | 10,514 | 784 |
Equity in net income of unconsolidated joint ventures | (9,180) | (995) |
Deferred profit from unconsolidated joint ventures | (1,448) | 0 |
Depreciation and amortization | 349 | 245 |
Abandoned project costs | 551 | 162 |
Net changes in operating assets and liabilities: | ||
Restricted cash | 146 | (912) |
Contracts and accounts receivable | 2,080 | (2,448) |
Due from affiliates | 1,873 | 51 |
Real estate inventories | (104,833) | (65,125) |
Other assets | 5,074 | (153) |
Accounts payable | 7,665 | 9,997 |
Accrued expenses and other liabilities | (3,206) | (3,606) |
Net cash used in operating activities | (82,964) | (62,353) |
Investing activities: | ||
Purchases of property and equipment | (289) | (846) |
Contributions to unconsolidated joint ventures | (7,967) | (24,645) |
Distributions of capital from unconsolidated joint ventures | 25,682 | 3,073 |
Net cash provided by (used in) investing activities | 17,426 | (22,418) |
Financing activities: | ||
Net proceeds from issuance of common stock | 0 | 87,800 |
Repurchase of common stock | 0 | (11,988) |
Borrowings from notes payable | 87,504 | 90,949 |
Repayments of notes payable | (29,581) | (31,535) |
Cash distribution to noncontrolling interest in subsidiary | (822) | (52) |
Minimum tax withholding paid on behalf of employees for stock awards | (248) | 0 |
Net cash provided by financing activities | 56,853 | 135,174 |
Net (decrease) increase in cash and cash equivalents | (8,685) | 50,403 |
Cash and cash equivalents – beginning of period | 44,058 | 9,541 |
Cash and cash equivalents – end of period | 35,373 | 59,944 |
Supplemental disclosures of cash flow information | ||
Interest paid, net of amounts capitalized | 0 | 0 |
Income taxes paid | 8,356 | 1,470 |
Supplemental disclosures of non-cash transactions | ||
Purchase of real estate with note payable to land seller | 0 | 17,000 |
Purchase of real estate with notes payable to affiliate | 747 | 0 |
Contribution of real estate to unconsolidated joint ventures | 18,828 | 1,890 |
Contribution of real estate from noncontrolling interest in subsidiary | 1,301 | 751 |
Deductible transaction costs and additional contribution of deferred tax assets from IPO | $ 0 | $ 707 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Summary of Significant Account Policies | Organization and Summary of Significant Accounting Policies Organization The New Home Company Inc. (the “Company”), a Delaware corporation, and its subsidiaries are primarily engaged in all aspects of residential real estate development, including acquiring land and designing, constructing and selling homes located in California. Initial Public Offering The Company completed its initial public offering (“IPO”) on January 30, 2014. In preparation for the IPO, the Company reorganized from a Delaware limited liability company (“LLC”) into a Delaware corporation, issuing 8,636,250 shares of common stock to the former members of the LLC in the Company's formation transactions, and changed its name to The New Home Company Inc. As a result of the IPO, the Company issued and sold 8,984,375 shares of common stock (including 1,171,875 shares sold pursuant to the underwriter's exercise of their option to purchase additional shares from the Company) at the public offering price of $11.00 per share. In accordance with the terms of the IPO, with net proceeds received from the underwriters exercise of their option to purchase additional shares, the Company repurchased 1,171,875 shares of its common stock issued to a member of the LLC in connection with the Company's formation transactions. The Company received proceeds of $75.8 million , net of the underwriting discount, offering expenses and the repurchase of shares. Upon the close of the IPO, the Company had 16,448,750 shares of common stock outstanding. The Company had 16,516,546 shares of common stock outstanding as of September 30, 2015 . Basis of Presentation The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts have been eliminated upon consolidation. The accompanying unaudited condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X and should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014 . The accompanying unaudited condensed financial statements include all adjustments (consisting of normal recurring entries) necessary for the fair presentation of our results for the interim period presented. Results for the interim period are not necessarily indicative of the results to be expected for the full year. Unless the context otherwise requires, the terms “we”, “us”, “our” and “the Company” refer to the Company and its wholly owned subsidiaries, on a consolidated basis. Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the accompanying consolidated financial statements and notes. Accordingly, actual results could differ materially from these estimates. Segment Reporting Accounting Standards Codification (“ASC”) 280, "Segment Reporting" (“ASC 280”) established standards for the manner in which public enterprises report information about operating segments. In accordance with ASC 280, we have determined that our homebuilding division and our fee building division are our operating segments. Corporate is a non-operating segment. Cash and Cash Equivalents and Concentration of Credit Risk We define cash and cash equivalents as cash on hand, demand deposits with financial institutions, and short term liquid investments with a maturity date of less than three months from the date of purchase. The Company’s cash balances exceed federally insurable limits. The Company monitors the cash balances in its operating accounts and adjusts the cash balances as appropriate; however, these cash balances could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. To date, the Company has not experienced a loss or lack of access to cash in its operating accounts. Restricted Cash Restricted cash of $0.1 million and $0.3 million as of September 30, 2015 and December 31, 2014 , respectively, is held in accounts for payments of subcontractor costs incurred in connection with various fee building projects. Real Estate Inventories and Cost of Sales We capitalize pre-acquisition, land, development and other allocated costs, including interest, property taxes and indirect construction costs. Pre-acquisition costs, including non-refundable land deposits, are expensed to abandoned project costs when we determine continuation of the prospective project is not probable. Land, development and other common costs are typically allocated to real estate inventories using a methodology that approximates the relative-sales-value method. Home construction costs per production phase are recorded using the specific identification method. Cost of sales for homes closed includes the allocation of construction costs of each home and all applicable land acquisition, land development and related common costs (both incurred and estimated to be incurred) based upon the relative-sales-value of the home within each project. Changes to estimated total development costs subsequent to initial home closings in a project are generally allocated on a relative-sales-value method to remaining homes in the project. Inventory is stated at cost, unless the carrying amount is determined not to be recoverable, in which case inventory is written down to fair value. We review our real estate assets at each project on a periodic basis or whenever indicators of impairment exist. Real estate assets include projects actively selling and projects under development or held for future development. Indicators of impairment include, but are not limited to, significant decreases in local housing market values and selling prices of comparable homes, significant decreases in gross margins and sales absorption rates, costs significantly in excess of budget, and actual or projected cash flow losses. If there are indicators of impairment, we perform a detailed budget and cash flow review of the applicable real estate inventories to determine whether the estimated remaining undiscounted future cash flows of the project are more or less than the asset’s carrying value. If the undiscounted cash flows are more than the asset’s carrying value, no impairment adjustment is required. However, if the undiscounted cash flows are less than the asset’s carrying value, the asset is deemed impaired and is written down to fair value. When estimating undiscounted cash flows of a project, we make various assumptions, including: (i) expected sales prices and sales incentives to be offered, including the number of homes available, pricing and incentives being offered by us or other builders in other projects, and future sales price adjustments based on market and economic trends; (ii) expected sales pace and cancellation rates based on local housing market conditions, competition and historical trends; (iii) costs expended to date and expected to be incurred including, but not limited to, land and land development costs, home construction costs, interest costs, indirect construction and overhead costs, and selling and marketing costs; (iv) alternative product offerings that may be offered that could have an impact on sales pace, sales price and/or building costs; and (v) alternative uses for the property. Many assumptions are interdependent and a change in one may require a corresponding change to other assumptions. For example, increasing or decreasing sales absorption rates has a direct impact on the estimated per unit sales price of a home, the level of time sensitive costs (such as indirect construction, overhead and carrying costs), and selling and marketing costs (such as model maintenance costs and advertising costs). Depending on the underlying objective of the project, assumptions could have a significant impact on the projected cash flow analysis. For example, if our objective is to preserve operating margins, our cash flow analysis will be different than if the objective is to increase sales. These objectives may vary significantly from project to project and over time. If assets are considered impaired, impairment is determined by the amount the asset’s carrying value exceeds its fair value. Fair value is determined based on estimated future cash flows discounted for inherent risks associated with real estate assets. These discounted cash flows are impacted by expected risk based on estimated land development; construction and delivery timelines; market risk of price erosion; uncertainty of development or construction cost increases; and other risks specific to the asset or market conditions where the asset is located when assessment is made. These factors are specific to each project and may vary among projects. For the three and nine months ended September 30, 2015 and 2014 , no impairment adjustments relating to homebuilding real estate inventories were recorded. Capitalization of Interest We follow the practice of capitalizing interest to real estate inventories during the period of development and to investments in unconsolidated joint ventures, when applicable, in accordance with ASC 835, “Interest” (“ASC 835”). Interest capitalized as a component of cost of real estate inventories is included in cost of home sales as related homes or lots are sold. To the extent interest is capitalized to investment in unconsolidated joint ventures, it is included as a reduction of income from or increase in loss from unconsolidated joint ventures when the related homes or lots are sold to third parties. To the extent our debt exceeds our qualified assets as defined in ASC 835, we expense a portion of the interest incurred by us. Qualified assets represent projects that are actively selling or under development as well as investments in unconsolidated joint ventures accounted for under the equity method until such equity investees begin their principal operations. Revenue Recognition Home Sales and Profit Recognition In accordance with ASC 360, “Property, Plant, and Equipment”, revenues from home sales and other real estate sales are recorded and a profit is recognized when the respective homes are closed. Home sales and other real estate sales are closed when all conditions of escrow are met, including delivery of the home or other real estate asset, title passes, appropriate consideration is received and collection of associated receivables, if any, is reasonably assured. Sales incentives are a reduction of revenues when the respective home is closed. When it is determined that the earnings process is not complete, the sale and the related profit are deferred for recognition in future periods. The profit we record is based on the calculation of cost of sales, which is dependent on our allocation of costs, as described in more detail above in the section entitled “Real Estate Inventories and Cost of Sales.” Fee Building The Company enters into fee building agreements to provide services whereby it will build homes on behalf of independent third-party property owners. The independent third-party property owner funds all project costs incurred by the Company to build and sell the homes. The Company primarily enters into cost plus fee contracts where it charges independent third-party property owners for all direct and indirect costs plus a negotiated management fee. For these types of contracts, the Company recognizes revenue based on the actual total costs it has expended plus the applicable management fee. The management fee is typically a fixed fee based on a percentage of the cost or home sales revenue of the project depending on the terms of the agreement with the independent third-party property owner. In accordance with ASC 605, “Revenue Recognition” (“ASC 605”), revenues from fee building services are recognized over a cost-to-cost approach in applying the percentage-of-completion method. Under this approach, revenue is earned in proportion to total costs incurred, divided by total costs expected to be incurred. The total estimated cost plus the management fee represents the total contract value. The Company recognizes revenue based on the actual labor and other direct costs incurred, plus the portion of the management fee it has earned to date. In the course of providing its services, the Company routinely subcontracts for services and incurs other direct costs on behalf of its customers. These costs are passed through to customers and, in accordance with industry practice and GAAP, are included in the Company’s revenue and cost of revenue. Under certain agreements, the Company is eligible to receive additional incentive compensation as certain financial thresholds defined in the agreement are achieved. The Company recognizes revenue for any incentive compensation when such financial thresholds are probable of being met and such compensation is deemed to be collectible, generally at the date the amount is communicated to us by the independent third-party property owner. The Company also enters into fee building and management contracts with third parties and its unconsolidated joint ventures where it provides construction supervision services, as well as sales and marketing services, and does not bear financial risks for any services provided. In accordance with ASC 605, revenues from these services are recognized over a proportional performance method or completed performance method. Under this approach, revenue is earned as services are provided in proportion to total services expected to be provided to the customer or on a straight line basis if the pattern of performance cannot be determined while costs are recognized as incurred. Revenue recognition for any portion of the fees earned from these services that are contingent upon a financial threshold or specific event is deferred until the threshold is achieved or the event occurs. The Company’s fee building revenues have historically been concentrated with a small number of customers. For the three and nine months ended September 30, 2015 , one customer comprised 88% and 92% of fee building revenue, respectively. For the three and nine months ended September 30, 2014 , one customer comprised 89% and 85% of fee building revenue, respectively. As of September 30, 2015 and December 31, 2014 , one customer comprised 96% and 98% of contracts and accounts receivables, respectively. Variable Interest Entities The Company accounts for variable interest entities in accordance with ASC 810, “Consolidation” (“ASC 810”). Under ASC 810, a variable interest entity (“VIE”) is created when: (a) the equity investment at risk in the entity is not sufficient to permit the entity to finance its activities without additional subordinated financial support provided by other parties, including the equity holders; (b) the entity’s equity holders as a group either (i) lack the direct or indirect ability to make decisions about the entity, (ii) are not obligated to absorb expected losses of the entity or (iii) do not have the right to receive expected residual returns of the entity; or (c) the entity’s equity holders have voting rights that are not proportionate to their economic interests, and the activities of the entity involve or are conducted on behalf of the equity holder with disproportionately few voting rights. If an entity is deemed to be a VIE pursuant to ASC 810, the enterprise that has both (i) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (ii) the obligation to absorb the expected losses of the entity or right to receive benefits from the entity that could be potentially significant to the VIE is considered the primary beneficiary and must consolidate the VIE. Under ASC 810, a non-refundable deposit paid to an entity may be deemed to be a variable interest that will absorb some or all of the entity’s expected losses if they occur. Our land purchase and lot option deposits generally represent our maximum exposure to the land seller if we elect not to purchase the optioned property. In some instances, we may also expend funds for due diligence, development and construction activities with respect to optioned land prior to takedown. Such costs are classified as real estate inventories, which we would have to write off should we not exercise the option. Therefore, whenever we enter into a land option or purchase contract with an entity and make a non-refundable deposit, a VIE may have been created. As of September 30, 2015 and December 31, 2014 , the Company was not required to consolidate any VIEs. In accordance with ASC 810, we perform ongoing reassessments of whether we are the primary beneficiary of a VIE. Noncontrolling Interest During 2013, the Company entered into a joint venture agreement with a third-party property owner. In accordance with ASC 810, the Company analyzed this arrangement and determined that it was not a variable interest entity; however, the Company determined it was required to consolidate the joint venture as it is the managing member with the powers to direct the major decisions of the entity. As of September 30, 2015 and December 31, 2014 , the third-party investor had made contributions of $2.5 million and $2.3 million , respectively, net of losses and distributions. Investments in Unconsolidated Joint Ventures We first analyze our homebuilding and land development joint ventures to determine if they are variable interest entities under the provisions of ASC 810 (as discussed above) when determining whether the entity should be consolidated. If we conclude that our homebuilding and land development joint ventures are not variable interest entities, then, in accordance with the provisions of ASC 810, limited partnerships or similar entities must be further evaluated under the presumption that the general partner, or the managing member in the case of a limited liability company, is deemed to have a controlling interest and therefore must consolidate the entity unless the limited partners or non-managing members have: (1) the ability, either by a single limited partner or through a simple majority vote, to dissolve or liquidate the entity, or kick-out the managing member/general partner without cause, or (2) substantive participatory rights that are exercised in the ordinary course of business. Under the provisions of ASC 810, we may be required to consolidate certain investments in which we hold a general partner or managing member interest. As of September 30, 2015 and December 31, 2014 , the Company concluded that some of its joint ventures were variable interest entities. The Company concluded that it was not the primary beneficiary of the variable interest entities and accounted for these entities under the equity method of accounting. Investments in our unconsolidated joint ventures are accounted for under the equity method of accounting. Under the equity method, we recognize our proportionate share of earnings and losses generated by the joint venture upon the delivery of lots or homes to third parties. Our proportionate share of intra-entity profits and losses are eliminated until the related asset has been sold by the unconsolidated joint venture to third parties. Our ownership interests in our unconsolidated joint ventures vary, but are generally less than or equal to 50% . The unconsolidated joint ventures accounting policies are generally consistent with those of the Company. We review real estate inventory held by our unconsolidated joint ventures for indicators of impairment, consistent with our real estate inventories. We also review our investments in unconsolidated joint ventures for evidence of other-than-temporary declines in value. To the extent we deem any portion of our investment in unconsolidated joint ventures as not recoverable, we impair our investment accordingly. For the three and nine months ended September 30, 2015 and 2014 , no impairments related to investment in unconsolidated joint ventures were recorded. The Company selectively provides loan-to-value ("LTV") maintenance and completion guaranties for debt held by its unconsolidated joint ventures. Such guaranties facilitated the financing of our joint ventures' development projects and arose in the ordinary course of business. Refer to Note 11 for more information discussing the LTV and completion guaranties. Selling and Marketing Expense Selling and marketing costs incurred to sell real estate projects are capitalized if they are reasonably expected to be recovered from the sale of the project or from incidental operations, and are incurred for tangible assets that are used directly through the selling period to aid in the sale of the project or services that have been performed to obtain regulatory approval of sales. All other selling and marketing costs are expensed in the period incurred. Warranty Accrual We offer warranties on our homes that generally cover various defects in workmanship or materials, or to cover structural construction defects for one-year periods. Estimated future direct warranty costs are accrued and charged to cost of sales in the period when the related homebuilding revenues are recognized. Amounts are accrued based upon the Company’s historical rates. Due to the Company’s limited history related to homebuilding sales, the Company also considers the historical experience of its peers in determining the amount of its warranty accrual. In addition, the Company receives warranty payments from its customers for certain of its fee building projects where it has the contractual risk of construction. These payments are recorded as warranty accruals. Indirect warranty overhead salaries and related costs are charged to the accrual in the period incurred. We assess the adequacy of our warranty accrual on a quarterly basis and adjust the amounts recorded if necessary. Our warranty accrual is included in accrued expenses and other liabilities in the accompanying consolidated balance sheets. Contracts and Accounts Receivable Contracts and accounts receivable primarily represent the fees earned but not collected and reimbursable project costs incurred in connection with fee building agreements. The Company periodically evaluates the collectability of its contracts receivable, and, if it is determined that a receivable might not be fully collectible, an allowance is recorded for the amount deemed uncollectible. This allowance for doubtful accounts is estimated based on management’s evaluation of the contracts involved and the financial condition of its customers. Factors considered in evaluations include, but are not limited to: (i) customer type; (ii) historical contract performance; (iii) historical collection and delinquency trends; (iv) customer credit worthiness; and (v) general economic conditions. As of September 30, 2015 and December 31, 2014 , no allowance was recorded related to contracts and accounts receivable. Property and Equipment Property and equipment are recorded at cost and depreciated using the straight-line method over their estimated useful lives ranging from three to five years. Leasehold improvements are stated at cost and are amortized using the straight-line method over the shorter of either their estimated useful lives or the probable term of the lease. Income Taxes Income taxes are accounted for in accordance with ASC 740, “Income Taxes” (“ASC 740”). As a result of the conversion from an LLC to a taxable entity in connection with the Company's IPO, the Company recognized a cumulative net deferred tax asset of $1.5 million related to the difference between the financial statement basis and tax basis of the assets and liabilities as of January 30, 2014. Subsequent to the conversion, the consolidated provision for, or benefit from, income taxes are calculated using the asset and liability method, under which deferred tax assets and liabilities are recorded based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are evaluated on a quarterly basis to determine if adjustments to the valuation allowance are required. In accordance with ASC 740, we assess whether a valuation allowance should be established based on the consideration of all available evidence using a “more likely than not” standard with respect to whether deferred tax assets will be realized. The ultimate realization of deferred tax assets depends primarily on the generation of future taxable income during the periods in which the differences become deductible. The value of our deferred tax assets will depend on applicable income tax rates. Judgment is required in determining the future tax consequences of events that have been recognized in our consolidated financial statements and/or tax returns. Differences between anticipated and actual outcomes of these future tax consequences could have a material impact on our consolidated financial statements. ASC 740 defines the methodology for recognizing the benefits of uncertain tax return positions as well as guidance regarding the measurement of the resulting tax benefits. These provisions require an enterprise to recognize the financial statement effects of a tax position when it is more likely than not (defined as a likelihood of more than 50%), based on the technical merits, that the position will be sustained upon examination. In addition, these provisions provide guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The evaluation of whether a tax position meets the more-likely-than-not recognition threshold requires a substantial degree of judgment by management based on the individual facts and circumstances. Actual results could differ from estimates. Stock-Based Compensation We account for share-based awards in accordance with ASC 718, “Compensation – Stock Compensation” (“ASC 718”) and ASC 505-50, “Equity – Equity Based Payments to Non-Employees” (“ASC 505-50”). ASC 718 requires that the cost resulting from all share-based payment transactions be recognized in a company's financial statements. ASC 718 requires all entities to apply a fair-value-based measurement method in accounting for share-based payment transactions with employees except for equity instruments held by employee share ownership plans. On June 26, 2015, the Company entered into an agreement that transitioned Joseph Davis' role within the Company from Chief Investment Officer to a non-employee consultant to the Company. Per the agreement, Mr. Davis' outstanding restricted stock units and stock option equity awards will continue to vest in accordance with their original terms. Under ASC 505-50, if an employee becomes a non-employee and continues to vest in an award pursuant to the award's original terms, that award will be treated as an award to a non-employee prospectively, provided the individual is required to continue providing services to the employer (such as consulting services). Based on the terms and conditions of Mr. Davis' consulting agreement noted above, we account for Mr. Davis' share-based awards in accordance with ASC 505-50. ASC 505-50 requires that Mr. Davis' award be accounted for prospectively, such that the fair value of the award will be re-measured at each reporting date until the earlier of (a) the performance commitment date or (b) the date the services required under the transition agreement with Mr. Davis have been completed. ASC 505-50 requires that compensation cost ultimately recognized in the Company's financial statements be the sum of (a) the compensation cost recognized during the period of time the individual was an employee (based on the grant-date fair value) plus (b) the fair value of the award determined on the measurement date determined in accordance ASC 505-50 for the pro-rata portion of the vesting period in which the individual was a non-employee. Recently Issued Accounting Standards The Company qualifies as an “emerging growth company” pursuant to the provisions of the Jumpstart Our Business Startups Act of 2012 (the"JOBS Act"), enacted on April 5, 2012. Section 102 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, for complying with new or revised accounting standards. As previously disclosed, the Company has chosen, irrevocably, to “opt out” of such extended transition period, and as a result, will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”), which supersedes existing accounting literature relating to how and when a company recognizes revenue. Under ASU 2014-09, a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods and services. In August 2015, the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date”, which delayed the effective date of ASU 2014-09 by one year. As a result, for public companies, ASU 2014-09 will be effective for interim and annual reporting periods beginning after December 15, 2017, and is to be applied either with a full retrospective or modified retrospective approach, with early application permitted. We are currently evaluating the impact the adoption will have on our condensed consolidated financial statements and related disclosures. In June 2014, the FASB issued ASU No. 2014-12, “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period” (“ASU 2014-12”), which requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in ASC 718, Compensation - Stock Compensation, as it relates to awards with performance conditions that affect vesting to account for such awards. The amendments in ASU 2014-12 are effective for interim and annual periods beginning after December 15, 2015. Early adoption is permitted. Our adoption of ASU 2014-12 is not expected to have a material effect on our condensed consolidated financial statements and related disclosures. In August 2014, the FASB issued ASU No. 2014-15, “Disclosure of Uncertainties About an Entity's Ability to Continue as a Going Concern” (“ASU 2014-15”), which requires management to perform interim and annual assessments on whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year of the date the financial statements are issued and to provide related disclosures, if required. The amendments in ASU 2014-15 are effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early adoption is permitted. Our adoption of ASU 2014-15 is not expected to have a material effect on our condensed consolidated financial statements and related disclosures. In February 2015, the FASB issued Accounting Standards Update ASU No. 2015-02, “Amendments to the Consolidation Analysis” (“ASU 2015-02”), which changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. The amendments in ASU 2015-02 are effective for interim and annual periods beginning after December 15, 2015. Early adoption is permitted. The Company is in the process of evaluating the effects of ASU 2015-02 on its condensed consolidated financial statements and related disclosures. In April 2015, the FASB issued Accounting Standards Update ASU No. 2015-03, “Simplifying the Presentation of Debt Issuance Costs” (“ASU 2015-03”), which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that d |
Computation of Earnings (Loss)
Computation of Earnings (Loss) Per Share | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Computation of (Loss) Earnings Per Share | Computation of Earnings (Loss) Per Share Basic and diluted earnings per share for the nine months ended September 30, 2014 give effect to the conversion of the Company’s members’ equity into common stock on January 30, 2014 as though the conversion had occurred as of the beginning of the reporting period or the original date of issuance, if later. The number of shares converted was based on the actual IPO price of $11.00 per share. The following table sets forth the components used in the computation of basic and diluted earnings (loss) per share for the three and nine months ended September 30, 2015 and 2014 : Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (Dollars in thousands, except per share amounts) Numerator: Net income (loss) attributable to The New Home Company Inc. $ 4,444 $ (1,059 ) $ 9,462 $ (533 ) Denominator: Basic weighted-average shares outstanding 16,516,546 16,448,750 16,507,736 15,696,435 Effect of dilutive shares: Stock options and unvested restricted stock units 217,259 — 152,937 — Diluted weighted-average shares outstanding 16,733,805 16,448,750 16,660,673 15,696,435 Basic earnings (loss) per share attributable to The New Home Company Inc. $ 0.27 $ (0.06 ) $ 0.57 $ (0.03 ) Diluted earnings (loss) per share attributable to The New Home Company Inc. $ 0.27 $ (0.06 ) $ 0.57 $ (0.03 ) Antidilutive stock options and unvested restricted stock units not included in diluted earnings (loss) per share 14,318 922,882 5,087 811,777 Pro Forma Net Loss and Loss per Share The pro forma amounts reflect the income tax provision as if the Company was a taxable corporation as of the beginning of the period, and assume the Company filed a consolidated tax return for the periods presented. For the three and nine months ended September 30, 2014 , the pro forma tax provision assumes the Company's taxable income for the year would have included pretax income earned between January 1, 2014 and January 30, 2014, prior to the conversion to a taxable corporation. In addition, a net deferred income tax asset of $1.4 million was recognized as a result of the conversion to a taxable entity during the first quarter of 2014. However, the pro forma results exclude the effect of the conversion adjustment because of its nonrecurring nature. Basic and diluted earnings (loss) per share and pro forma basic and diluted loss per share give effect to the conversion of the Company's members' equity into common stock on January 30, 2014 as though the conversion had occurred as of the beginning of the reporting period or the original date of issuance, if later. See Note 2. Three Months Ended Nine Months Ended (Dollars in thousands, except per share amounts) Loss before taxes $ (1,821 ) $ (3,349 ) Pro forma income tax benefit to reflect the conversion to a C Corporation 655 1,232 Pro forma net loss (1,166 ) (2,117 ) Net loss attributable to noncontrolling interests 206 240 Pro forma net loss attributable to The New Home Company Inc. $ (960 ) $ (1,877 ) Pro forma basic loss per share attributable to The New Home Company Inc. $ (0.06 ) $ (0.12 ) Pro forma diluted loss per share attributable to The New Home Company Inc. $ (0.06 ) $ (0.12 ) |
Contracts and Accounts Receivab
Contracts and Accounts Receivable | 9 Months Ended |
Sep. 30, 2015 | |
Receivables [Abstract] | |
Contracts and Accounts Receivable | Contracts and Accounts Receivable Contracts and accounts receivable consist of the following: September 30, December 31, 2015 2014 (Dollars in thousands) Contracts receivable: Costs incurred on fee building projects $ 96,014 $ 89,056 Estimated earnings 6,144 4,506 102,158 93,562 Less: amounts collected during the period (91,532 ) (80,404 ) Contracts receivable $ 10,626 $ 13,158 Contracts receivable: Billed $ — $ 2 Unbilled 10,626 13,156 10,626 13,158 Accounts receivable: Escrow receivables 458 — Other receivables — 6 Contracts and accounts receivable $ 11,084 $ 13,164 Billed contracts receivable represent amounts billed to customers that have yet to be collected. Unbilled contracts receivable represents the contract revenue recognized but not yet billable pursuant to contract terms or administratively not invoiced. All unbilled receivables as of September 30, 2015 and December 31, 2014 are expected to be billed and collected within 90 days. Accounts payable at September 30, 2015 and December 31, 2014 includes $9.9 million and $11.9 million , respectively, related to costs incurred under the Company’s fee building contracts. |
Real Estate Inventories and Cap
Real Estate Inventories and Capitalized Interest | 9 Months Ended |
Sep. 30, 2015 | |
Real Estate [Abstract] | |
Real Estate Inventories and Capitalized Interest | Real Estate Inventories and Capitalized Interest Real estate inventories are summarized as follows: September 30, December 31, 2015 2014 (Dollars in thousands) Deposits and pre-acquisition costs $ 10,857 $ 9,349 Land held and land under development 57,480 48,990 Homes completed or under construction 139,797 87,072 Model homes 39,934 18,153 $ 248,068 $ 163,564 All of our deposits and pre-acquisition costs are non-refundable, except for $0.4 million and $0 as of September 30, 2015 and December 31, 2014 , respectively. Model homes, homes completed, and homes under construction include all costs associated with home construction, including land, development, indirects, permits, materials and labor. Land held and land under development includes costs incurred during site development such as land, development, indirects, and permits. Interest is capitalized to inventory during development and other qualifying activities. Interest capitalized as a cost of inventory is included in cost of sales as related homes are closed. For the three and nine months ended September 30, 2015 and 2014 interest incurred, capitalized and expensed was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (Dollars in thousands) Interest incurred $ 1,369 $ 534 $ 3,295 $ 1,079 Interest capitalized (1,369 ) (534 ) (3,295 ) (1,079 ) Interest expensed $ — $ — $ — $ — Capitalized interest in beginning inventory $ 3,510 $ 1,495 $ 2,328 $ 1,003 Interest capitalized as a cost of inventory 1,369 534 3,295 1,079 Contributions to unconsolidated joint ventures — — (264 ) — Interest previously capitalized as cost of inventory, included in cost of sales (396 ) (65 ) (876 ) (118 ) Interest previously capitalized as cost of inventory, included in other expense $ (39 ) $ — $ (39 ) $ — Capitalized interest in ending inventory $ 4,444 $ 1,964 $ 4,444 $ 1,964 |
Unconsolidated Joint Ventures
Unconsolidated Joint Ventures | 9 Months Ended |
Sep. 30, 2015 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Unconsolidated Joint Ventures | Unconsolidated Joint Ventures As of September 30, 2015 and December 31, 2014 , the Company had ownership interests in 13 and 12 , respectively, unconsolidated joint ventures with ownership percentages that generally range from 5% to 50% . The condensed combined balance sheets for our unconsolidated joint ventures accounted for under the equity method are as follows: September 30, December 31, 2015 2014 (Dollars in thousands) Cash and cash equivalents $ 39,333 $ 45,037 Restricted cash 11,613 14,981 Real estate inventories 473,313 459,770 Other assets 6,575 1,822 Total assets $ 530,834 $ 521,610 Accounts payable and accrued liabilities $ 60,053 $ 52,601 Notes payable 103,654 87,994 Total liabilities 163,707 140,595 The Company's equity 61,791 60,564 Other partners' equity 305,336 320,451 Total equity 367,127 381,015 Total liabilities and equity $ 530,834 $ 521,610 The condensed combined statements of operations for our unconsolidated joint ventures accounted for under the equity method are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (Dollars in thousands) Revenues $ 115,370 $ 35,720 $ 254,780 $ 88,166 Cost of sales 87,645 29,326 196,928 69,490 Gross margin 27,725 6,394 57,852 18,676 Operating expenses 6,819 3,970 18,542 11,114 Net income of unconsolidated joint ventures $ 20,906 $ 2,424 $ 39,310 $ 7,562 Equity in net income of unconsolidated joint ventures reflected in the accompanying consolidated statements of operations $ 4,056 $ 50 $ 9,180 $ 995 The Company has entered into agreements with its unconsolidated joint ventures to provide management services related to the underlying projects (collectively referred to as the “Management Agreements”). Pursuant to the Management Agreements, the Company receives a management fee based on each project’s revenues from its unconsolidated joint ventures. For the three and nine months ended September 30, 2015 and 2014 , the Company earned $3.3 million , $8.4 million , $2.2 million and $5.5 million , respectively, in management fees, which have been recorded as fee building revenues in the accompanying condensed consolidated statements of operations. On June 29, 2015, the Company formed a new unconsolidated joint venture and received capital credit in excess of our contributed land basis. As a result, the Company recognized $1.6 million in equity in net income of unconsolidated joint ventures and deferred $0.4 million in profit from unconsolidated joint ventures related to this transaction. |
Other Assets
Other Assets | 9 Months Ended |
Sep. 30, 2015 | |
Other Assets [Abstract] | |
Other Assets | Other Assets Other assets consist of the following: September 30, December 31, 2015 2014 (Dollars in thousands) Deferred tax asset $ 4,439 $ 5,841 Prepaid income taxes 553 — Prepaid loan fees — 307 Prepaid expenses 825 500 Other assets 227 31 $ 6,044 $ 6,679 |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 9 Months Ended |
Sep. 30, 2015 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Liabilities | Accrued Expenses and Other Liabilities Accrued expenses and other liabilities consist of the following: September 30, December 31, 2015 2014 (Dollars in thousands) Warranty accrual $ 2,762 $ 1,578 Accrued compensation and benefits 3,568 4,680 Accrued interest 470 268 Completion reserve 328 219 Accrued professional fees 204 414 Income taxes payable — 3,930 Deferred profit from unconsolidated joint ventures 437 — Other accrued expenses 225 111 $ 7,994 $ 11,200 Completion reserves relate to liabilities for completed subcontractor work on closed homes for which invoices have not been remitted as of the balance sheet date. Changes in our warranty accrual are detailed in the table set forth below: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (Dollars in thousands) Beginning warranty accrual for homebuilding projects $ 1,902 $ 916 $ 1,277 $ 810 Warranty provision for homebuilding projects 579 82 1,333 229 Warranty payments for homebuilding projects (59 ) (31 ) (188 ) (72 ) Ending warranty accrual for homebuilding projects 2,422 967 2,422 967 Beginning warranty accrual for fee building projects 297 257 301 264 Warranty provision for fee building projects 57 — 57 — Warranty efforts for fee building projects (14 ) (8 ) (18 ) (15 ) Ending warranty accrual for fee building projects 340 249 340 249 Total ending warranty accrual $ 2,762 $ 1,216 $ 2,762 $ 1,216 |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Notes Payable | Notes Payable Notes payable consisted of the following: September 30, December 31, 2015 2014 (Dollars in thousands) Senior unsecured revolving credit facility $ 159,924 $ 100,474 Note payable with land seller 7,000 9,500 Construction loans 2,250 3,777 $ 169,174 $ 113,751 Notes payable to affiliate $ 249 $ — On June 26, 2014, the Company entered into a senior unsecured revolving credit facility (the "Credit Facility") with a bank to borrow up to $125.0 million , limited by borrowing base provisions and financial covenants. Any outstanding principal is due upon maturity, which was June 26, 2017, with the potential for a one-year extension of the term of the loan, subject to specified conditions and the payment of an extension fee. On May 7, 2015, the Company entered into a modification agreement to increase the total lending commitments under the Credit Facility from $125.0 million to $175.0 million . The maturity date was extended to April 30, 2018, with the potential for a one-year extension of the term of the loan, subject to specified conditions and the payment of an extension fee. The Company may repay advances at any time without premium or penalty. Interest is payable monthly and is charged at a rate of 1-month LIBOR plus a margin ranging from 2.25% to 3.00% depending on the Company’s leverage ratio as calculated at the end of each fiscal quarter. As of September 30, 2015 , the availability under the facility was $15.1 million and the interest rate was 2.94% . In connection with the agreement, the Company is required to maintain certain financial covenants as defined in the Credit Facility, including (i) a minimum tangible net worth; (ii) leverage ratios; (iii) a minimum liquidity covenant; and (iv) a minimum fixed charge coverage ratio based on EBITDA to interest incurred. As of September 30, 2015 , the Company was in compliance with all financial covenants. In 2012, the Company entered into a $9.5 million term loan with a land seller, secured by real estate, which bears interest at 7.0% per annum. During February 2015, we made a principal payment of $2.5 million and extended the maturity date of the note. The note matures on the earlier of (i) 10 days following entitlement approval, or (ii) February 15, 2016 and requires certain mandatory pay downs totaling $1.0 million based on the occurrence of certain project-related events. Interest is payable monthly and the remaining principal is due at maturity. In May 2014, the Company entered into two construction loans with a bank related to model and production homes for a specific project. The loans are secured by real estate and bear interest at the bank's prime rate plus 2.0% , or 5.25% at September 30, 2015 . The total commitment under the construction loans is $8.6 million . As of September 30, 2015 , the Company had $6.4 million available to borrow under the construction loans subject to certain funding criteria. The loans mature on November 27, 2016. Interest is payable monthly with all unpaid principal and interest due at maturity. In January 2015, the Company entered into two notes, secured by real estate, with one of its unconsolidated joint ventures for a total of $0.7 million related to the purchase of finished lots. There is no stated interest rate associated with the notes. Repayment of the notes shall be made in three equal installments. In April, the company paid the first and second installments on both notes for a total pay down of $0.5 million . The third installment will be payable on the sooner of the achievement of specified project development milestones or on January 7, 2020. |
Fair Value Disclosures
Fair Value Disclosures | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures | Fair Value Disclosures ASC 820, "Fair Value Measurements and Disclosures," defines fair value as the price that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at measurement date and requires assets and liabilities carried at fair value to be classified and disclosed in the following three categories: • 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 Fair Value of Financial Instruments The accompanying consolidated balance sheets include the following financial instruments: cash and cash equivalents, restricted cash, contracts and accounts receivable, due from affiliates, accounts payable, accrued expenses and other liabilities, notes payable and notes payable to affiliate. The Company considers the carrying value of cash and cash equivalents, restricted cash, contracts and accounts receivable, accounts payable, and accrued expenses and other liabilities to approximate the fair value of these financial instruments based on the short duration between origination of the instruments and their expected realization. The fair value of amounts due from affiliates and notes payable to affiliate is not determinable due to the related party nature of such amounts. As of September 30, 2015 and December 31, 2014 , the fair value of the Company's notes payable approximated the carrying value. The Company has determined that its notes payable are classified as Level 3 within the fair value hierarchy. Estimated fair values of the outstanding notes payable at September 30, 2015 and December 31, 2014 were based on cash flow models discounted at market interest rates that considered underlying risks of the debt. Non-Recurring Fair Value Adjustments Nonfinancial assets and liabilities include items such as inventory and long-lived assets that are measured at cost when acquired and adjusted for impairment to fair value, if deemed necessary. During the three and nine months ended September 30, 2015 and 2014 , the Company did not record any fair value adjustments to those nonfinancial assets and liabilities remeasured at fair value on a nonrecurring basis. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company is a defendant in various lawsuits related to its normal course of business. We are also subject to local, state and federal laws and regulations related to land development activities, house construction standards, sales practices, employment practices and environmental protection. As a result, we are subject to periodic examinations or inquiry by agencies administering these laws and regulations. We record a reserve for potential legal claims and regulatory matters when they are probable of occurring and a potential loss is reasonably estimable. We accrue for these matters based on facts and circumstances specific to each matter and revise these estimates when necessary. In view of the inherent difficulty of predicting outcomes of legal claims and related contingencies, we generally cannot predict their ultimate resolution, related timing or eventual loss. If our evaluations indicate loss contingencies that could be material are not probable, but are reasonably possible, we will disclose their nature with an estimate of possible range of losses or a statement that such loss is not reasonably estimable. As of September 30, 2015 and December 31, 2014 , the Company did not have any accruals for asserted or unasserted matters. As an owner and developer of real estate, the Company is subject to various environmental laws of federal, state and local governments. The Company is not aware of any environmental liability that could have a material adverse effect on its financial condition or results of operations. However, changes in applicable environmental laws and regulations, the uses and conditions of real estate in the vicinity of the Company’s real estate and other environmental conditions of which the Company is unaware with respect to the real estate could result in future environmental liabilities. We obtain surety bonds in the normal course of business to ensure completion of certain infrastructure improvements of our projects. As of September 30, 2015 and December 31, 2014 , the Company had outstanding surety bonds totaling $19.2 million and $12.2 million , respectively. The beneficiaries of the bonds are various municipalities and other organizations. In the unlikely event that any such surety bond issued by a third party is called because the required improvements are not completed, the Company could be obligated to reimburse the issuer of the bond. On May 6, 2015, the Company entered into a letter of credit facility agreement that allows the Company and certain affiliated unconsolidated joint ventures to issue up to $5.0 million in letters of credit. The agreement includes an option to increase this amount to $7.5 million , subject to certain conditions. As of September 30, 2015 , the Company and its affiliated joint ventures had $3.6 million in outstanding letters of credit issued under this facility. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions During the three and nine months ended September 30, 2015 and 2014 , the Company incurred construction-related costs on behalf of its unconsolidated joint ventures totaling $2.8 million , $8.6 million , $1.9 million and $5.6 million , respectively. As of September 30, 2015 and December 31, 2014 , $0.6 million and $1.1 million , respectively, are included in due from affiliates in the accompanying condensed consolidated balance sheets. The Company has entered into Management Agreements with its unconsolidated joint ventures to provide management services related to the underlying projects. Pursuant to the Management Agreements, the Company receives a management fee based on each project’s revenues. During the three and nine months ended September 30, 2015 and 2014 , the Company earned $3.3 million , $8.4 million , $2.2 million and $5.5 million , respectively, in management fees, which have been recorded as fee building revenue in the accompanying condensed consolidated statements of operations. As of September 30, 2015 and December 31, 2014 , $0.2 million and $1.6 million , respectively, of management fees are included in due from affiliates in the accompanying condensed consolidated balance sheets. The Company has provided credit enhancements in connection with joint venture borrowings in the form of loan-to-value ("LTV") maintenance guaranties in order to secure performance under the loans and maintain certain LTV ratios. The Company has also entered into agreements with its partners in each of the unconsolidated joint ventures whereby the Company and its partners are apportioned liability under the LTV maintenance guaranties according to their respective capital interest. In addition, the agreements provide the Company, to the extent its partner has an unpaid liability under such credit enhancements, the right to receive distributions from the unconsolidated joint venture that would otherwise be made to the partner. The loans underlying the guaranties comprise acquisition and development loans, construction revolvers and model loans, and the guaranties remain in force until the loans are satisfied. Due to the nature of the loans, the outstanding balance at any given time is subject to a number of factors including the status of site improvements, the mix of horizontal and vertical development underway, the timing of phase build outs, and the period necessary to complete the escrow process for homebuyers. As of September 30, 2015 and December 31, 2014 , $81.5 million and $61.4 million , respectively, was outstanding under the loans and credit enhanced by the Company through LTV maintenance guaranties. Under the terms of the joint venture agreements, the Company's proportionate share of LTV maintenance agreement liabilities was 27.3% and 12.6% , respectively, as of September 30, 2015 and December 31, 2014 . In addition, the Company has provided completion guaranties regarding specific performance for certain projects whereby the Company is required to complete the given project with funds provided by the beneficiary of the guaranty. If there are not adequate funds available under the specific project loans, then the Company would be subject to financial liability under such completion guaranties. Typically, under such terms of the joint venture agreements, the Company has the right to apportion the respective share of any liabilities funded under such completion guaranties to its partners. In connection with providing the loan guaranties, the Company recognized no guaranty fee income during the three and nine months ended September 30, 2015 , no guaranty fee income during the three months ended September 30, 2014 , and $18,927 in guaranty fee income during the nine months ended September 30, 2014 in the accompanying condensed consolidated statements of operations. Berchtold Capital Partners, an entity owned by Mr. Michael Berchtold, one of the Company's non-employee directors, served as an advisor to the Company, providing general advice and guidance in connection with the Company's IPO, as well as assisting with the selection of the members of the Company's board of directors, the selection of and interacting with the Company's compensation consultant and advising the executives and board of managers regarding governance and compensation matters. The Company paid Berchtold Capital Partners $562,500 for these services, including $500,000 upon completion of our IPO. Amounts paid to Berchtold are included in offering expenses and were offset against the proceeds of our IPO. As of September 30, 2015 , the Company had investments in certain unconsolidated joint ventures totaling $20.8 million . Certain members of the Company's board of directors are affiliated with entities that also had an investment in these joint ventures and are owners of more than 10% of the outstanding common stock of the Company. TL Fab LP, an affiliate of Mr. Paul Heeschen, one of the Company's non-employee directors, was engaged by the Company and some of its unconsolidated joint ventures as a trade contractor to provide metal fabrication services. For the three and nine months ended September 30, 2015 , the Company and its unconsolidated joint ventures incurred $0.3 million and $0.7 million , respectively, for these services. The Company and its unconsolidated joint ventures incurred $0.4 million and $0.8 million for these services for the three and nine months ended September 30, 2014, respectively. Of these costs, $0.2 million and $0.1 million was due to TL Fab LP at September 30, 2015 and December 31, 2014, respectively, and included in accounts payable in the accompanying balance sheet. These amounts were capitalized to real estate inventories by the Company and its unconsolidated joint ventures and will be included in cost of home sales at the time of home deliveries. On June 26, 2015 ("Transition Date"), the Company entered into an agreement that transitioned Joseph Davis' role within the Company from Chief Investment Officer to a non-employee consultant to the Company. As of the Transition Date, Mr. Davis ceased being an employee of the Company and became an independent contractor performing consulting services. Per the agreement, Mr. Davis is expected to work approximately, but not more than, 40 consulting hours per month. For his services, he will be compensated $10,000 per month for a term of one year from the Transition Date with the option to extend the agreement one year on each anniversary of the Transition Date, if mutually consented to by the parties. Either party may terminate the agreement at any time for any or no reason. Additionally, Mr. Davis' outstanding restricted stock units and stock option equity awards will continue to vest in accordance with their original terms. For the three and nine months ended September 30, 2015 , the Company paid Mr. Davis $40,000 , excluding reimbursable expenses. Of these costs, no balance was due to Mr. Davis at September 30, 2015 . On June 29, 2015, the Company formed a new unconsolidated joint venture and received capital credit in excess of our contributed land basis. As a result, the Company recognized $1.6 million in equity in net income of unconsolidated joint ventures and deferred $0.4 million in profit from unconsolidated joint ventures related to this transaction. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based Compensation | Stock-Based Compensation On August 18, 2010, the Company granted equity based units to certain members of management valued on the date of grant at $1.9 million with a four year vesting period. Recipients of the equity based units have the right to receive certain distributions, if any, from the Company following return of capital to its equity members. The share based units vested upon completion of the IPO, and the remaining unrecognized compensation expense of $316,667 was recognized during the first quarter of 2014, and is included in general and administrative expense in the accompanying consolidated statement of operations. The 2014 Long-Term Incentive Plan (“2014 Incentive Plan”), was adopted by our board of directors in January 2014. The 2014 Incentive Plan provides for the grant of equity-based awards, including options to purchase shares of common stock, stock appreciation rights, restricted and unrestricted stock awards, restricted stock units and performance awards. The 2014 Incentive Plan will automatically expire on the tenth anniversary of its effective date. Our board of directors may terminate or amend the 2014 Incentive Plan at any time, subject to any requirement of stockholder approval required by applicable law, rule or regulation and provided that the rights of a holder of an outstanding award may not be impaired without the consent of the holder. The number of shares of our common stock that may be issued under the 2014 Incentive Plan is 1,644,875 shares. To the extent that shares of the Company's common stock subject to an outstanding option, stock appreciation right, stock award or performance award granted under the 2014 Incentive Plan or any predecessor plan are not issued or delivered by reason of the expiration, termination, cancellation or forfeiture of such award or the settlement of such award in cash, then such shares of common stock generally shall again be available under the 2014 Incentive Plan. The Company has issued stock option and restricted stock unit awards under the 2014 Incentive Plan. The exercise price of stock-based awards may not be less than the market value of the Company's common stock on the date of grant. The fair value for stock options is established at the date of grant using the Black-Scholes model for time-based vesting awards. The Company's stock option and restricted stock awards typically vest over a one to three year period and expire ten years from the date of grant. A summary of the Company’s common stock option activity as of and for the nine months ended September 30, 2015 is presented below: Options Outstanding Weighted-Average Number of Shares Exercise Price per share Options outstanding at December 31, 2014 846,874 $ 11.00 Options granted — $ — Options forfeited — $ — Options outstanding at September 30, 2015 846,874 $ 11.00 Options exercisable at September 30, 2015 24,717 $ 11.00 A summary of the Company’s restricted stock units as of and for the nine months ended September 30, 2015 is presented below: Restricted Stock Units Outstanding Weighted-Average Grant-Date Number of Shares Fair Value per Share Balance outstanding at December 31, 2014 112,233 $ 11.36 Restricted stock units granted 293,324 $ 14.46 Restricted stock units vested (85,386 ) $ 11.48 Restricted stock units forfeited (384 ) $ 11.00 Balance outstanding at September 30, 2015 319,787 $ 14.17 The expense related to the Company's stock-based compensation programs, included in general and administrative expense in the accompanying consolidated statements of operations, was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (Dollars in thousands) Expense related to: Equity based incentive units $ — $ — $ — $ 317 Stock options 301 319 911 854 Restricted stock units 941 240 1,814 636 $ 1,242 $ 559 $ 2,725 $ 1,807 We used the "simplified method" to establish the expected term of the common stock options granted by the Company. Our restricted stock awards are valued based on the closing price of our common stock on the date of grant. At September 30, 2015 , the amount of unearned stock-based compensation currently estimated to be expensed through 2018 related to unvested common stock options and restricted stock units is $4.4 million , net of estimated forfeitures. The weighted-average period over which the unearned stock-based compensation is expected to be recognized is 1.4 years. If there are any modifications or cancellations of the underlying unvested awards, the Company may be required to accelerate, increase or cancel any remaining unearned stock-based compensation expense. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with ASC 740, which requires an asset and liability approach for measuring deferred taxes based on temporary differences between the financial statements and tax bases of assets and liabilities existing at each balance sheet date using enacted tax rates for the years in which taxes are expected to be paid or recovered. For the three months ended September 30, 2015 , the Company recorded a provision for taxes of $2.2 million . For the three months ended September 30, 2014 , the Company recorded a tax benefit of $0.6 million due to the loss before taxes. The effective tax rate for the three months ended September 30, 2015 and 2014 differs from the 35% statutory tax rate, primarily due to the tax benefit of production activities and return to provision adjustments, partially offset by state income taxes. For the nine months ended September 30, 2015 , the Company recorded a provision for taxes of $5.3 million . The effective tax rate for the nine months ended September 30, 2015 differs from the 35% statutory tax rate due to the tax benefit of production activities and return to provision adjustments, partially offset by state income taxes. The effective tax rate for the nine months ended September 30, 2014 differs from the 35% statutory tax rate due to the recognition of a tax benefit for the cumulative net deferred tax assets resulting from our conversion to a taxable entity. For the nine months ended September 30, 2014 , the Company recorded a tax benefit of $2.6 million primarily due to the differences between the financial statement basis and tax basis of certain assets upon conversion to a taxable entity at the time of our initial public offering, resulting in a net deferred tax asset. Additionally, the effective tax rate was reduced by the exclusion of pre-conversion earnings from taxable income for the three months ended March 31, 2014, and the tax benefit of production activities, partially offset by state income taxes. As discussed in Note 1, for the first 30 calendar days of 2014, the Company was a Delaware LLC which was treated as partnership for income tax purposes and was subject to certain minimal taxes and fees; however, income taxes on taxable income or losses realized by the Company were the obligation of the members. Each quarter we assess our deferred tax asset to determine whether all or any portion of the asset is more likely or not unrealizable under ASC 740. We are required to establish a valuation allowance for any portion of the asset we conclude is more likely or not unrealizable. Our assessment considers, among other things, the nature, frequency and severity of prior cumulative losses, forecasts of future taxable income, the duration of statutory carryforward periods, our utilization experience with operating loss and tax credit carryforwards and the planning alternatives, to the extent these items are applicable. The Company classifies any interest and penalties related to income taxes assessed by jurisdiction as part of income tax expense. The Company has concluded that there were no significant uncertain tax positions requiring recognition in its financial statements, nor has the Company been assessed interest or penalties by any major tax jurisdictions related to any open tax periods. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company’s operations are organized into two reportable segments: homebuilding and fee building. In accordance with ASC 280, in determining the most appropriate reportable segments, we considered similar economic and other characteristics, including product types, average selling prices, gross margins, production processes, suppliers, subcontractors, regulatory environments, land acquisition results, and underlying demand and supply. The reportable segments follow the same accounting policies as our consolidated financial statements described in Note 1. Operational results of each reportable segment are not necessarily indicative of the results that would have been achieved had the reportable segment been an independent, stand-alone entity during the periods presented. Financial information relating to reportable segments was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (Dollars in thousands) Revenues: Homebuilding $ 57,878 $ 8,197 $ 133,315 $ 22,855 Fee building 29,099 20,408 102,158 53,817 Total $ 86,977 $ 28,605 $ 235,473 $ 76,672 Gross margin: Homebuilding $ 7,989 $ 1,275 $ 17,951 $ 4,033 Fee building 2,071 1,019 6,144 1,953 Total $ 10,060 $ 2,294 $ 24,095 $ 5,986 September 30, December 31, 2015 2014 (Dollars in thousands) Assets: Homebuilding $ 352,225 $ 275,611 Fee building 11,985 16,347 Total $ 364,210 $ 291,958 |
Pro Forma Net (Loss) Income and
Pro Forma Net (Loss) Income and (Loss) Earnings per Share | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Pro Forma Net (Loss) Income and (Loss) Earning Per Share | Computation of Earnings (Loss) Per Share Basic and diluted earnings per share for the nine months ended September 30, 2014 give effect to the conversion of the Company’s members’ equity into common stock on January 30, 2014 as though the conversion had occurred as of the beginning of the reporting period or the original date of issuance, if later. The number of shares converted was based on the actual IPO price of $11.00 per share. The following table sets forth the components used in the computation of basic and diluted earnings (loss) per share for the three and nine months ended September 30, 2015 and 2014 : Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (Dollars in thousands, except per share amounts) Numerator: Net income (loss) attributable to The New Home Company Inc. $ 4,444 $ (1,059 ) $ 9,462 $ (533 ) Denominator: Basic weighted-average shares outstanding 16,516,546 16,448,750 16,507,736 15,696,435 Effect of dilutive shares: Stock options and unvested restricted stock units 217,259 — 152,937 — Diluted weighted-average shares outstanding 16,733,805 16,448,750 16,660,673 15,696,435 Basic earnings (loss) per share attributable to The New Home Company Inc. $ 0.27 $ (0.06 ) $ 0.57 $ (0.03 ) Diluted earnings (loss) per share attributable to The New Home Company Inc. $ 0.27 $ (0.06 ) $ 0.57 $ (0.03 ) Antidilutive stock options and unvested restricted stock units not included in diluted earnings (loss) per share 14,318 922,882 5,087 811,777 Pro Forma Net Loss and Loss per Share The pro forma amounts reflect the income tax provision as if the Company was a taxable corporation as of the beginning of the period, and assume the Company filed a consolidated tax return for the periods presented. For the three and nine months ended September 30, 2014 , the pro forma tax provision assumes the Company's taxable income for the year would have included pretax income earned between January 1, 2014 and January 30, 2014, prior to the conversion to a taxable corporation. In addition, a net deferred income tax asset of $1.4 million was recognized as a result of the conversion to a taxable entity during the first quarter of 2014. However, the pro forma results exclude the effect of the conversion adjustment because of its nonrecurring nature. Basic and diluted earnings (loss) per share and pro forma basic and diluted loss per share give effect to the conversion of the Company's members' equity into common stock on January 30, 2014 as though the conversion had occurred as of the beginning of the reporting period or the original date of issuance, if later. See Note 2. Three Months Ended Nine Months Ended (Dollars in thousands, except per share amounts) Loss before taxes $ (1,821 ) $ (3,349 ) Pro forma income tax benefit to reflect the conversion to a C Corporation 655 1,232 Pro forma net loss (1,166 ) (2,117 ) Net loss attributable to noncontrolling interests 206 240 Pro forma net loss attributable to The New Home Company Inc. $ (960 ) $ (1,877 ) Pro forma basic loss per share attributable to The New Home Company Inc. $ (0.06 ) $ (0.12 ) Pro forma diluted loss per share attributable to The New Home Company Inc. $ (0.06 ) $ (0.12 ) |
Organization and Summary of S23
Organization and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts have been eliminated upon consolidation. The accompanying unaudited condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X and should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014 . The accompanying unaudited condensed financial statements include all adjustments (consisting of normal recurring entries) necessary for the fair presentation of our results for the interim period presented. Results for the interim period are not necessarily indicative of the results to be expected for the full year. Unless the context otherwise requires, the terms “we”, “us”, “our” and “the Company” refer to the Company and its wholly owned subsidiaries, on a consolidated basis. |
Use of Estimates | Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the accompanying consolidated financial statements and notes. Accordingly, actual results could differ materially from these estimates. |
Segment Reporting | Segment Reporting Accounting Standards Codification (“ASC”) 280, "Segment Reporting" (“ASC 280”) established standards for the manner in which public enterprises report information about operating segments. In accordance with ASC 280, we have determined that our homebuilding division and our fee building division are our operating segments. Corporate is a non-operating segment. |
Cash and Cash Equivalents and Concentration of Credit Risk | Cash and Cash Equivalents and Concentration of Credit Risk We define cash and cash equivalents as cash on hand, demand deposits with financial institutions, and short term liquid investments with a maturity date of less than three months from the date of purchase. The Company’s cash balances exceed federally insurable limits. The Company monitors the cash balances in its operating accounts and adjusts the cash balances as appropriate; however, these cash balances could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. To date, the Company has not experienced a loss or lack of access to cash in its operating accounts. |
Restricted Cash | Restricted Cash Restricted cash of $0.1 million and $0.3 million as of September 30, 2015 and December 31, 2014 , respectively, is held in accounts for payments of subcontractor costs incurred in connection with various fee building projects. |
Real Estate Inventories and Cost of Sales | Real Estate Inventories and Cost of Sales We capitalize pre-acquisition, land, development and other allocated costs, including interest, property taxes and indirect construction costs. Pre-acquisition costs, including non-refundable land deposits, are expensed to abandoned project costs when we determine continuation of the prospective project is not probable. Land, development and other common costs are typically allocated to real estate inventories using a methodology that approximates the relative-sales-value method. Home construction costs per production phase are recorded using the specific identification method. Cost of sales for homes closed includes the allocation of construction costs of each home and all applicable land acquisition, land development and related common costs (both incurred and estimated to be incurred) based upon the relative-sales-value of the home within each project. Changes to estimated total development costs subsequent to initial home closings in a project are generally allocated on a relative-sales-value method to remaining homes in the project. Inventory is stated at cost, unless the carrying amount is determined not to be recoverable, in which case inventory is written down to fair value. We review our real estate assets at each project on a periodic basis or whenever indicators of impairment exist. Real estate assets include projects actively selling and projects under development or held for future development. Indicators of impairment include, but are not limited to, significant decreases in local housing market values and selling prices of comparable homes, significant decreases in gross margins and sales absorption rates, costs significantly in excess of budget, and actual or projected cash flow losses. If there are indicators of impairment, we perform a detailed budget and cash flow review of the applicable real estate inventories to determine whether the estimated remaining undiscounted future cash flows of the project are more or less than the asset’s carrying value. If the undiscounted cash flows are more than the asset’s carrying value, no impairment adjustment is required. However, if the undiscounted cash flows are less than the asset’s carrying value, the asset is deemed impaired and is written down to fair value. When estimating undiscounted cash flows of a project, we make various assumptions, including: (i) expected sales prices and sales incentives to be offered, including the number of homes available, pricing and incentives being offered by us or other builders in other projects, and future sales price adjustments based on market and economic trends; (ii) expected sales pace and cancellation rates based on local housing market conditions, competition and historical trends; (iii) costs expended to date and expected to be incurred including, but not limited to, land and land development costs, home construction costs, interest costs, indirect construction and overhead costs, and selling and marketing costs; (iv) alternative product offerings that may be offered that could have an impact on sales pace, sales price and/or building costs; and (v) alternative uses for the property. Many assumptions are interdependent and a change in one may require a corresponding change to other assumptions. For example, increasing or decreasing sales absorption rates has a direct impact on the estimated per unit sales price of a home, the level of time sensitive costs (such as indirect construction, overhead and carrying costs), and selling and marketing costs (such as model maintenance costs and advertising costs). Depending on the underlying objective of the project, assumptions could have a significant impact on the projected cash flow analysis. For example, if our objective is to preserve operating margins, our cash flow analysis will be different than if the objective is to increase sales. These objectives may vary significantly from project to project and over time. If assets are considered impaired, impairment is determined by the amount the asset’s carrying value exceeds its fair value. Fair value is determined based on estimated future cash flows discounted for inherent risks associated with real estate assets. These discounted cash flows are impacted by expected risk based on estimated land development; construction and delivery timelines; market risk of price erosion; uncertainty of development or construction cost increases; and other risks specific to the asset or market conditions where the asset is located when assessment is made. These factors are specific to each project and may vary among projects. |
Capitalization of Interest | Capitalization of Interest We follow the practice of capitalizing interest to real estate inventories during the period of development and to investments in unconsolidated joint ventures, when applicable, in accordance with ASC 835, “Interest” (“ASC 835”). Interest capitalized as a component of cost of real estate inventories is included in cost of home sales as related homes or lots are sold. To the extent interest is capitalized to investment in unconsolidated joint ventures, it is included as a reduction of income from or increase in loss from unconsolidated joint ventures when the related homes or lots are sold to third parties. To the extent our debt exceeds our qualified assets as defined in ASC 835, we expense a portion of the interest incurred by us. Qualified assets represent projects that are actively selling or under development as well as investments in unconsolidated joint ventures accounted for under the equity method until such equity investees begin their principal operations. |
Revenue Recognition | Revenue Recognition Home Sales and Profit Recognition In accordance with ASC 360, “Property, Plant, and Equipment”, revenues from home sales and other real estate sales are recorded and a profit is recognized when the respective homes are closed. Home sales and other real estate sales are closed when all conditions of escrow are met, including delivery of the home or other real estate asset, title passes, appropriate consideration is received and collection of associated receivables, if any, is reasonably assured. Sales incentives are a reduction of revenues when the respective home is closed. When it is determined that the earnings process is not complete, the sale and the related profit are deferred for recognition in future periods. The profit we record is based on the calculation of cost of sales, which is dependent on our allocation of costs, as described in more detail above in the section entitled “Real Estate Inventories and Cost of Sales.” Fee Building The Company enters into fee building agreements to provide services whereby it will build homes on behalf of independent third-party property owners. The independent third-party property owner funds all project costs incurred by the Company to build and sell the homes. The Company primarily enters into cost plus fee contracts where it charges independent third-party property owners for all direct and indirect costs plus a negotiated management fee. For these types of contracts, the Company recognizes revenue based on the actual total costs it has expended plus the applicable management fee. The management fee is typically a fixed fee based on a percentage of the cost or home sales revenue of the project depending on the terms of the agreement with the independent third-party property owner. In accordance with ASC 605, “Revenue Recognition” (“ASC 605”), revenues from fee building services are recognized over a cost-to-cost approach in applying the percentage-of-completion method. Under this approach, revenue is earned in proportion to total costs incurred, divided by total costs expected to be incurred. The total estimated cost plus the management fee represents the total contract value. The Company recognizes revenue based on the actual labor and other direct costs incurred, plus the portion of the management fee it has earned to date. In the course of providing its services, the Company routinely subcontracts for services and incurs other direct costs on behalf of its customers. These costs are passed through to customers and, in accordance with industry practice and GAAP, are included in the Company’s revenue and cost of revenue. Under certain agreements, the Company is eligible to receive additional incentive compensation as certain financial thresholds defined in the agreement are achieved. The Company recognizes revenue for any incentive compensation when such financial thresholds are probable of being met and such compensation is deemed to be collectible, generally at the date the amount is communicated to us by the independent third-party property owner. The Company also enters into fee building and management contracts with third parties and its unconsolidated joint ventures where it provides construction supervision services, as well as sales and marketing services, and does not bear financial risks for any services provided. In accordance with ASC 605, revenues from these services are recognized over a proportional performance method or completed performance method. Under this approach, revenue is earned as services are provided in proportion to total services expected to be provided to the customer or on a straight line basis if the pattern of performance cannot be determined while costs are recognized as incurred. Revenue recognition for any portion of the fees earned from these services that are contingent upon a financial threshold or specific event is deferred until the threshold is achieved or the event occurs. |
Variable Interest Entities | Variable Interest Entities The Company accounts for variable interest entities in accordance with ASC 810, “Consolidation” (“ASC 810”). Under ASC 810, a variable interest entity (“VIE”) is created when: (a) the equity investment at risk in the entity is not sufficient to permit the entity to finance its activities without additional subordinated financial support provided by other parties, including the equity holders; (b) the entity’s equity holders as a group either (i) lack the direct or indirect ability to make decisions about the entity, (ii) are not obligated to absorb expected losses of the entity or (iii) do not have the right to receive expected residual returns of the entity; or (c) the entity’s equity holders have voting rights that are not proportionate to their economic interests, and the activities of the entity involve or are conducted on behalf of the equity holder with disproportionately few voting rights. If an entity is deemed to be a VIE pursuant to ASC 810, the enterprise that has both (i) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (ii) the obligation to absorb the expected losses of the entity or right to receive benefits from the entity that could be potentially significant to the VIE is considered the primary beneficiary and must consolidate the VIE. Under ASC 810, a non-refundable deposit paid to an entity may be deemed to be a variable interest that will absorb some or all of the entity’s expected losses if they occur. Our land purchase and lot option deposits generally represent our maximum exposure to the land seller if we elect not to purchase the optioned property. In some instances, we may also expend funds for due diligence, development and construction activities with respect to optioned land prior to takedown. Such costs are classified as real estate inventories, which we would have to write off should we not exercise the option. Therefore, whenever we enter into a land option or purchase contract with an entity and make a non-refundable deposit, a VIE may have been created. As of September 30, 2015 and December 31, 2014 , the Company was not required to consolidate any VIEs. In accordance with ASC 810, we perform ongoing reassessments of whether we are the primary beneficiary of a VIE. |
Noncontrolling Interest | Noncontrolling Interest During 2013, the Company entered into a joint venture agreement with a third-party property owner. In accordance with ASC 810, the Company analyzed this arrangement and determined that it was not a variable interest entity; however, the Company determined it was required to consolidate the joint venture as it is the managing member with the powers to direct the major decisions of the entity. |
Investments in Unconsolidated Joint Ventures | Investments in Unconsolidated Joint Ventures We first analyze our homebuilding and land development joint ventures to determine if they are variable interest entities under the provisions of ASC 810 (as discussed above) when determining whether the entity should be consolidated. If we conclude that our homebuilding and land development joint ventures are not variable interest entities, then, in accordance with the provisions of ASC 810, limited partnerships or similar entities must be further evaluated under the presumption that the general partner, or the managing member in the case of a limited liability company, is deemed to have a controlling interest and therefore must consolidate the entity unless the limited partners or non-managing members have: (1) the ability, either by a single limited partner or through a simple majority vote, to dissolve or liquidate the entity, or kick-out the managing member/general partner without cause, or (2) substantive participatory rights that are exercised in the ordinary course of business. Under the provisions of ASC 810, we may be required to consolidate certain investments in which we hold a general partner or managing member interest. As of September 30, 2015 and December 31, 2014 , the Company concluded that some of its joint ventures were variable interest entities. The Company concluded that it was not the primary beneficiary of the variable interest entities and accounted for these entities under the equity method of accounting. Investments in our unconsolidated joint ventures are accounted for under the equity method of accounting. Under the equity method, we recognize our proportionate share of earnings and losses generated by the joint venture upon the delivery of lots or homes to third parties. Our proportionate share of intra-entity profits and losses are eliminated until the related asset has been sold by the unconsolidated joint venture to third parties. Our ownership interests in our unconsolidated joint ventures vary, but are generally less than or equal to 50% . The unconsolidated joint ventures accounting policies are generally consistent with those of the Company. We review real estate inventory held by our unconsolidated joint ventures for indicators of impairment, consistent with our real estate inventories. We also review our investments in unconsolidated joint ventures for evidence of other-than-temporary declines in value. To the extent we deem any portion of our investment in unconsolidated joint ventures as not recoverable, we impair our investment accordingly. For the three and nine months ended September 30, 2015 and 2014 , no impairments related to investment in unconsolidated joint ventures were recorded. The Company selectively provides loan-to-value ("LTV") maintenance and completion guaranties for debt held by its unconsolidated joint ventures. Such guaranties facilitated the financing of our joint ventures' development projects and arose in the ordinary course of business. Refer to Note 11 for more information discussing the LTV and completion guaranties. |
Selling and Marketing Expense | Selling and Marketing Expense Selling and marketing costs incurred to sell real estate projects are capitalized if they are reasonably expected to be recovered from the sale of the project or from incidental operations, and are incurred for tangible assets that are used directly through the selling period to aid in the sale of the project or services that have been performed to obtain regulatory approval of sales. All other selling and marketing costs are expensed in the period incurred. |
Warranty Reserves | Warranty Accrual We offer warranties on our homes that generally cover various defects in workmanship or materials, or to cover structural construction defects for one-year periods. Estimated future direct warranty costs are accrued and charged to cost of sales in the period when the related homebuilding revenues are recognized. Amounts are accrued based upon the Company’s historical rates. Due to the Company’s limited history related to homebuilding sales, the Company also considers the historical experience of its peers in determining the amount of its warranty accrual. In addition, the Company receives warranty payments from its customers for certain of its fee building projects where it has the contractual risk of construction. These payments are recorded as warranty accruals. Indirect warranty overhead salaries and related costs are charged to the accrual in the period incurred. We assess the adequacy of our warranty accrual on a quarterly basis and adjust the amounts recorded if necessary. Our warranty accrual is included in accrued expenses and other liabilities in the accompanying consolidated balance sheets. |
Contracts and Accounts Receivable | Contracts and Accounts Receivable Contracts and accounts receivable primarily represent the fees earned but not collected and reimbursable project costs incurred in connection with fee building agreements. The Company periodically evaluates the collectability of its contracts receivable, and, if it is determined that a receivable might not be fully collectible, an allowance is recorded for the amount deemed uncollectible. This allowance for doubtful accounts is estimated based on management’s evaluation of the contracts involved and the financial condition of its customers. Factors considered in evaluations include, but are not limited to: (i) customer type; (ii) historical contract performance; (iii) historical collection and delinquency trends; (iv) customer credit worthiness; and (v) general economic conditions |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost and depreciated using the straight-line method over their estimated useful lives ranging from three to five years. Leasehold improvements are stated at cost and are amortized using the straight-line method over the shorter of either their estimated useful lives or the probable term of the lease. |
Income Taxes | Income Taxes Income taxes are accounted for in accordance with ASC 740, “Income Taxes” (“ASC 740”). As a result of the conversion from an LLC to a taxable entity in connection with the Company's IPO, the Company recognized a cumulative net deferred tax asset of $1.5 million related to the difference between the financial statement basis and tax basis of the assets and liabilities as of January 30, 2014. Subsequent to the conversion, the consolidated provision for, or benefit from, income taxes are calculated using the asset and liability method, under which deferred tax assets and liabilities are recorded based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are evaluated on a quarterly basis to determine if adjustments to the valuation allowance are required. In accordance with ASC 740, we assess whether a valuation allowance should be established based on the consideration of all available evidence using a “more likely than not” standard with respect to whether deferred tax assets will be realized. The ultimate realization of deferred tax assets depends primarily on the generation of future taxable income during the periods in which the differences become deductible. The value of our deferred tax assets will depend on applicable income tax rates. Judgment is required in determining the future tax consequences of events that have been recognized in our consolidated financial statements and/or tax returns. Differences between anticipated and actual outcomes of these future tax consequences could have a material impact on our consolidated financial statements. ASC 740 defines the methodology for recognizing the benefits of uncertain tax return positions as well as guidance regarding the measurement of the resulting tax benefits. These provisions require an enterprise to recognize the financial statement effects of a tax position when it is more likely than not (defined as a likelihood of more than 50%), based on the technical merits, that the position will be sustained upon examination. In addition, these provisions provide guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The evaluation of whether a tax position meets the more-likely-than-not recognition threshold requires a substantial degree of judgment by management based on the individual facts and circumstances. Actual results could differ from estimates. Each quarter we assess our deferred tax asset to determine whether all or any portion of the asset is more likely or not unrealizable under ASC 740. We are required to establish a valuation allowance for any portion of the asset we conclude is more likely or not unrealizable. Our assessment considers, among other things, the nature, frequency and severity of prior cumulative losses, forecasts of future taxable income, the duration of statutory carryforward periods, our utilization experience with operating loss and tax credit carryforwards and the planning alternatives, to the extent these items are applicable. The Company classifies any interest and penalties related to income taxes assessed by jurisdiction as part of income tax expense. The Company has concluded that there were no significant uncertain tax positions requiring recognition in its financial statements, nor has the Company been assessed interest or penalties by any major tax jurisdictions related to any open tax periods. The Company accounts for income taxes in accordance with ASC 740, which requires an asset and liability approach for measuring deferred taxes based on temporary differences between the financial statements and tax bases of assets and liabilities existing at each balance sheet date using enacted tax rates for the years in which taxes are expected to be paid or recovered. |
Stock-Based Compensation | Stock-Based Compensation We account for share-based awards in accordance with ASC 718, “Compensation – Stock Compensation” (“ASC 718”) and ASC 505-50, “Equity – Equity Based Payments to Non-Employees” (“ASC 505-50”). ASC 718 requires that the cost resulting from all share-based payment transactions be recognized in a company's financial statements. ASC 718 requires all entities to apply a fair-value-based measurement method in accounting for share-based payment transactions with employees except for equity instruments held by employee share ownership plans. On June 26, 2015, the Company entered into an agreement that transitioned Joseph Davis' role within the Company from Chief Investment Officer to a non-employee consultant to the Company. Per the agreement, Mr. Davis' outstanding restricted stock units and stock option equity awards will continue to vest in accordance with their original terms. Under ASC 505-50, if an employee becomes a non-employee and continues to vest in an award pursuant to the award's original terms, that award will be treated as an award to a non-employee prospectively, provided the individual is required to continue providing services to the employer (such as consulting services). Based on the terms and conditions of Mr. Davis' consulting agreement noted above, we account for Mr. Davis' share-based awards in accordance with ASC 505-50. ASC 505-50 requires that Mr. Davis' award be accounted for prospectively, such that the fair value of the award will be re-measured at each reporting date until the earlier of (a) the performance commitment date or (b) the date the services required under the transition agreement with Mr. Davis have been completed. ASC 505-50 requires that compensation cost ultimately recognized in the Company's financial statements be the sum of (a) the compensation cost recognized during the period of time the individual was an employee (based on the grant-date fair value) plus (b) the fair value of the award determined on the measurement date determined in accordance ASC 505-50 for the pro-rata portion of the vesting period in which the individual was a non-employee. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards The Company qualifies as an “emerging growth company” pursuant to the provisions of the Jumpstart Our Business Startups Act of 2012 (the"JOBS Act"), enacted on April 5, 2012. Section 102 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, for complying with new or revised accounting standards. As previously disclosed, the Company has chosen, irrevocably, to “opt out” of such extended transition period, and as a result, will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”), which supersedes existing accounting literature relating to how and when a company recognizes revenue. Under ASU 2014-09, a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods and services. In August 2015, the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date”, which delayed the effective date of ASU 2014-09 by one year. As a result, for public companies, ASU 2014-09 will be effective for interim and annual reporting periods beginning after December 15, 2017, and is to be applied either with a full retrospective or modified retrospective approach, with early application permitted. We are currently evaluating the impact the adoption will have on our condensed consolidated financial statements and related disclosures. In June 2014, the FASB issued ASU No. 2014-12, “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period” (“ASU 2014-12”), which requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in ASC 718, Compensation - Stock Compensation, as it relates to awards with performance conditions that affect vesting to account for such awards. The amendments in ASU 2014-12 are effective for interim and annual periods beginning after December 15, 2015. Early adoption is permitted. Our adoption of ASU 2014-12 is not expected to have a material effect on our condensed consolidated financial statements and related disclosures. In August 2014, the FASB issued ASU No. 2014-15, “Disclosure of Uncertainties About an Entity's Ability to Continue as a Going Concern” (“ASU 2014-15”), which requires management to perform interim and annual assessments on whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year of the date the financial statements are issued and to provide related disclosures, if required. The amendments in ASU 2014-15 are effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early adoption is permitted. Our adoption of ASU 2014-15 is not expected to have a material effect on our condensed consolidated financial statements and related disclosures. In February 2015, the FASB issued Accounting Standards Update ASU No. 2015-02, “Amendments to the Consolidation Analysis” (“ASU 2015-02”), which changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. The amendments in ASU 2015-02 are effective for interim and annual periods beginning after December 15, 2015. Early adoption is permitted. The Company is in the process of evaluating the effects of ASU 2015-02 on its condensed consolidated financial statements and related disclosures. In April 2015, the FASB issued Accounting Standards Update ASU No. 2015-03, “Simplifying the Presentation of Debt Issuance Costs” (“ASU 2015-03”), which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The amendments in ASU 2015-03 are effective for interim and annual periods beginning after December 15, 2015. Early adoption is permitted. The Company is in the process of evaluating the effects of ASU 2015-03 on its condensed consolidated financial statements. Our adoption of ASU 2015-03 is not expected to have a material effect on our condensed consolidated financial statements and related disclosures. In August 2015, the FASB issued ASU No. 2015-15, “Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements – Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting” (“ASU 2015-15”), which clarifies the treatment of debt issuance costs from line-of-credit arrangements after the adoption of ASU 2015-03. In particular, ASU 2015-15 clarifies that the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. Our adoption of ASU 2015-15 is not expected to have a material effect on our condensed consolidated financial statements and related disclosures. |
Computation of Earnings (Loss24
Computation of Earnings (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of components used in the computation of basic and diluted earnings per share | The following table sets forth the components used in the computation of basic and diluted earnings (loss) per share for the three and nine months ended September 30, 2015 and 2014 : Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (Dollars in thousands, except per share amounts) Numerator: Net income (loss) attributable to The New Home Company Inc. $ 4,444 $ (1,059 ) $ 9,462 $ (533 ) Denominator: Basic weighted-average shares outstanding 16,516,546 16,448,750 16,507,736 15,696,435 Effect of dilutive shares: Stock options and unvested restricted stock units 217,259 — 152,937 — Diluted weighted-average shares outstanding 16,733,805 16,448,750 16,660,673 15,696,435 Basic earnings (loss) per share attributable to The New Home Company Inc. $ 0.27 $ (0.06 ) $ 0.57 $ (0.03 ) Diluted earnings (loss) per share attributable to The New Home Company Inc. $ 0.27 $ (0.06 ) $ 0.57 $ (0.03 ) Antidilutive stock options and unvested restricted stock units not included in diluted earnings (loss) per share 14,318 922,882 5,087 811,777 Basic and diluted earnings (loss) per share and pro forma basic and diluted loss per share give effect to the conversion of the Company's members' equity into common stock on January 30, 2014 as though the conversion had occurred as of the beginning of the reporting period or the original date of issuance, if later. See Note 2. Three Months Ended Nine Months Ended (Dollars in thousands, except per share amounts) Loss before taxes $ (1,821 ) $ (3,349 ) Pro forma income tax benefit to reflect the conversion to a C Corporation 655 1,232 Pro forma net loss (1,166 ) (2,117 ) Net loss attributable to noncontrolling interests 206 240 Pro forma net loss attributable to The New Home Company Inc. $ (960 ) $ (1,877 ) Pro forma basic loss per share attributable to The New Home Company Inc. $ (0.06 ) $ (0.12 ) Pro forma diluted loss per share attributable to The New Home Company Inc. $ (0.06 ) $ (0.12 ) |
Contracts and Accounts Receiv25
Contracts and Accounts Receivable (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Receivables [Abstract] | |
Schedule of contracts and accounts receivables | Contracts and accounts receivable consist of the following: September 30, December 31, 2015 2014 (Dollars in thousands) Contracts receivable: Costs incurred on fee building projects $ 96,014 $ 89,056 Estimated earnings 6,144 4,506 102,158 93,562 Less: amounts collected during the period (91,532 ) (80,404 ) Contracts receivable $ 10,626 $ 13,158 Contracts receivable: Billed $ — $ 2 Unbilled 10,626 13,156 10,626 13,158 Accounts receivable: Escrow receivables 458 — Other receivables — 6 Contracts and accounts receivable $ 11,084 $ 13,164 |
Real Estate Inventories and C26
Real Estate Inventories and Capitalized Interest (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Real Estate [Abstract] | |
Summary of real estate inventories | Real estate inventories are summarized as follows: September 30, December 31, 2015 2014 (Dollars in thousands) Deposits and pre-acquisition costs $ 10,857 $ 9,349 Land held and land under development 57,480 48,990 Homes completed or under construction 139,797 87,072 Model homes 39,934 18,153 $ 248,068 $ 163,564 |
Summary of interest incurred, capitalized, and expensed | For the three and nine months ended September 30, 2015 and 2014 interest incurred, capitalized and expensed was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (Dollars in thousands) Interest incurred $ 1,369 $ 534 $ 3,295 $ 1,079 Interest capitalized (1,369 ) (534 ) (3,295 ) (1,079 ) Interest expensed $ — $ — $ — $ — Capitalized interest in beginning inventory $ 3,510 $ 1,495 $ 2,328 $ 1,003 Interest capitalized as a cost of inventory 1,369 534 3,295 1,079 Contributions to unconsolidated joint ventures — — (264 ) — Interest previously capitalized as cost of inventory, included in cost of sales (396 ) (65 ) (876 ) (118 ) Interest previously capitalized as cost of inventory, included in other expense $ (39 ) $ — $ (39 ) $ — Capitalized interest in ending inventory $ 4,444 $ 1,964 $ 4,444 $ 1,964 |
Unconsolidated Joint Ventures (
Unconsolidated Joint Ventures (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of summarized financial information of unconsolidated joint ventures | The condensed combined statements of operations for our unconsolidated joint ventures accounted for under the equity method are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (Dollars in thousands) Revenues $ 115,370 $ 35,720 $ 254,780 $ 88,166 Cost of sales 87,645 29,326 196,928 69,490 Gross margin 27,725 6,394 57,852 18,676 Operating expenses 6,819 3,970 18,542 11,114 Net income of unconsolidated joint ventures $ 20,906 $ 2,424 $ 39,310 $ 7,562 Equity in net income of unconsolidated joint ventures reflected in the accompanying consolidated statements of operations $ 4,056 $ 50 $ 9,180 $ 995 The condensed combined balance sheets for our unconsolidated joint ventures accounted for under the equity method are as follows: September 30, December 31, 2015 2014 (Dollars in thousands) Cash and cash equivalents $ 39,333 $ 45,037 Restricted cash 11,613 14,981 Real estate inventories 473,313 459,770 Other assets 6,575 1,822 Total assets $ 530,834 $ 521,610 Accounts payable and accrued liabilities $ 60,053 $ 52,601 Notes payable 103,654 87,994 Total liabilities 163,707 140,595 The Company's equity 61,791 60,564 Other partners' equity 305,336 320,451 Total equity 367,127 381,015 Total liabilities and equity $ 530,834 $ 521,610 |
Other Assets (Tables)
Other Assets (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Other Assets [Abstract] | |
Schedule of other assets | Other assets consist of the following: September 30, December 31, 2015 2014 (Dollars in thousands) Deferred tax asset $ 4,439 $ 5,841 Prepaid income taxes 553 — Prepaid loan fees — 307 Prepaid expenses 825 500 Other assets 227 31 $ 6,044 $ 6,679 |
Accrued Expenses and Other Li29
Accrued Expenses and Other Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Payables and Accruals [Abstract] | |
Schedule of accrued liabilities and other liabilities | Accrued expenses and other liabilities consist of the following: September 30, December 31, 2015 2014 (Dollars in thousands) Warranty accrual $ 2,762 $ 1,578 Accrued compensation and benefits 3,568 4,680 Accrued interest 470 268 Completion reserve 328 219 Accrued professional fees 204 414 Income taxes payable — 3,930 Deferred profit from unconsolidated joint ventures 437 — Other accrued expenses 225 111 $ 7,994 $ 11,200 |
Schedule of changes in warranty accrual | Changes in our warranty accrual are detailed in the table set forth below: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (Dollars in thousands) Beginning warranty accrual for homebuilding projects $ 1,902 $ 916 $ 1,277 $ 810 Warranty provision for homebuilding projects 579 82 1,333 229 Warranty payments for homebuilding projects (59 ) (31 ) (188 ) (72 ) Ending warranty accrual for homebuilding projects 2,422 967 2,422 967 Beginning warranty accrual for fee building projects 297 257 301 264 Warranty provision for fee building projects 57 — 57 — Warranty efforts for fee building projects (14 ) (8 ) (18 ) (15 ) Ending warranty accrual for fee building projects 340 249 340 249 Total ending warranty accrual $ 2,762 $ 1,216 $ 2,762 $ 1,216 |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of notes payable | Notes payable consisted of the following: September 30, December 31, 2015 2014 (Dollars in thousands) Senior unsecured revolving credit facility $ 159,924 $ 100,474 Note payable with land seller 7,000 9,500 Construction loans 2,250 3,777 $ 169,174 $ 113,751 Notes payable to affiliate $ 249 $ — |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of common stock option activity | A summary of the Company’s common stock option activity as of and for the nine months ended September 30, 2015 is presented below: Options Outstanding Weighted-Average Number of Shares Exercise Price per share Options outstanding at December 31, 2014 846,874 $ 11.00 Options granted — $ — Options forfeited — $ — Options outstanding at September 30, 2015 846,874 $ 11.00 Options exercisable at September 30, 2015 24,717 $ 11.00 |
Summary of restricted stock units | A summary of the Company’s restricted stock units as of and for the nine months ended September 30, 2015 is presented below: Restricted Stock Units Outstanding Weighted-Average Grant-Date Number of Shares Fair Value per Share Balance outstanding at December 31, 2014 112,233 $ 11.36 Restricted stock units granted 293,324 $ 14.46 Restricted stock units vested (85,386 ) $ 11.48 Restricted stock units forfeited (384 ) $ 11.00 Balance outstanding at September 30, 2015 319,787 $ 14.17 |
Summary of stock-based compensation expense | The expense related to the Company's stock-based compensation programs, included in general and administrative expense in the accompanying consolidated statements of operations, was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (Dollars in thousands) Expense related to: Equity based incentive units $ — $ — $ — $ 317 Stock options 301 319 911 854 Restricted stock units 941 240 1,814 636 $ 1,242 $ 559 $ 2,725 $ 1,807 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Schedule of financial information related to reportable segments | Financial information relating to reportable segments was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (Dollars in thousands) Revenues: Homebuilding $ 57,878 $ 8,197 $ 133,315 $ 22,855 Fee building 29,099 20,408 102,158 53,817 Total $ 86,977 $ 28,605 $ 235,473 $ 76,672 Gross margin: Homebuilding $ 7,989 $ 1,275 $ 17,951 $ 4,033 Fee building 2,071 1,019 6,144 1,953 Total $ 10,060 $ 2,294 $ 24,095 $ 5,986 September 30, December 31, 2015 2014 (Dollars in thousands) Assets: Homebuilding $ 352,225 $ 275,611 Fee building 11,985 16,347 Total $ 364,210 $ 291,958 |
Pro Forma Net (Loss) Income a33
Pro Forma Net (Loss) Income and (Loss) Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of pro forma net income and earnings per share | The following table sets forth the components used in the computation of basic and diluted earnings (loss) per share for the three and nine months ended September 30, 2015 and 2014 : Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (Dollars in thousands, except per share amounts) Numerator: Net income (loss) attributable to The New Home Company Inc. $ 4,444 $ (1,059 ) $ 9,462 $ (533 ) Denominator: Basic weighted-average shares outstanding 16,516,546 16,448,750 16,507,736 15,696,435 Effect of dilutive shares: Stock options and unvested restricted stock units 217,259 — 152,937 — Diluted weighted-average shares outstanding 16,733,805 16,448,750 16,660,673 15,696,435 Basic earnings (loss) per share attributable to The New Home Company Inc. $ 0.27 $ (0.06 ) $ 0.57 $ (0.03 ) Diluted earnings (loss) per share attributable to The New Home Company Inc. $ 0.27 $ (0.06 ) $ 0.57 $ (0.03 ) Antidilutive stock options and unvested restricted stock units not included in diluted earnings (loss) per share 14,318 922,882 5,087 811,777 Basic and diluted earnings (loss) per share and pro forma basic and diluted loss per share give effect to the conversion of the Company's members' equity into common stock on January 30, 2014 as though the conversion had occurred as of the beginning of the reporting period or the original date of issuance, if later. See Note 2. Three Months Ended Nine Months Ended (Dollars in thousands, except per share amounts) Loss before taxes $ (1,821 ) $ (3,349 ) Pro forma income tax benefit to reflect the conversion to a C Corporation 655 1,232 Pro forma net loss (1,166 ) (2,117 ) Net loss attributable to noncontrolling interests 206 240 Pro forma net loss attributable to The New Home Company Inc. $ (960 ) $ (1,877 ) Pro forma basic loss per share attributable to The New Home Company Inc. $ (0.06 ) $ (0.12 ) Pro forma diluted loss per share attributable to The New Home Company Inc. $ (0.06 ) $ (0.12 ) |
Organization and Summary of S34
Organization and Summary of Significant Accounting Policies - Additional Disclosures (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | Mar. 31, 2014 | Jan. 30, 2014 | |
Impairment of Real Estate | $ 0 | $ 0 | $ 0 | $ 0 | |||
Restricted cash | 137 | 137 | $ 283 | ||||
Noncontrolling interest in subsidiary | 2,524 | 2,524 | 2,342 | ||||
Impairments related to investment in unconsolidated joint ventures | 0 | $ 0 | 0 | $ 0 | |||
Allowance for doubtful contracts and accounts receivable | 0 | 0 | 0 | ||||
Deferred tax asset | $ 4,439 | $ 4,439 | $ 5,841 | $ 1,400 | $ 1,500 | ||
Typical Ownership Threshold [Member] | |||||||
Equity Method Investment, Ownership Percentage | 50.00% | 50.00% |
Organization and Summary of S35
Organization and Summary of Significant Accounting Policies - Initial Public Offering (Details) - USD ($) $ / shares in Units, $ in Millions | Jan. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2015 | Dec. 31, 2014 |
Class of Stock [Line Items] | ||||
Net proceeds from issuance of common stock, net of underwriting discount, offering expenses and repurchase or shares | $ 75.8 | |||
Common stock, shares outstanding | 16,516,546 | 16,448,750 | ||
Common Stock [Member] | ||||
Class of Stock [Line Items] | ||||
Common stock, shares outstanding | 16,448,750 | |||
Common Stock [Member] | IPO [Member] | ||||
Class of Stock [Line Items] | ||||
Conversion of members' equity into common stock, shares | 8,636,250 | |||
Issuance of common stock, net of issuance costs, shares | 8,984,375 | |||
Share Price (in dollars per share) | $ 11 | |||
Repurchase of common stock, shares | 1,171,875 | |||
Common Stock [Member] | Over-Allotment Option [Member] | ||||
Class of Stock [Line Items] | ||||
Issuance of common stock, net of issuance costs, shares | 1,171,875 |
Organization and Summary of S36
Organization and Summary of Significant Accounting Policies - Major Customer Revenue (Details) - Fee Building Segment [Member] - Customer Concentration Risk [Member] - customer | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Sales Revenue [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, number of customers | 1 | 1 | 1 | 1 |
Concentration Risk, Percentage | 88.00% | 89.00% | 92.00% | 85.00% |
Contracts and Accounts Receivable [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, number of customers | 1 | 1 | ||
Concentration Risk, Percentage | 96.00% | 98.00% |
Organization and Summary of S37
Organization and Summary of Significant Accounting Policies - Guarantor Obligations (Details) - Joint Ventures [Member] - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Loans Payable [Member] | ||
Guarantor Obligations [Line Items] | ||
Percent of outstanding loan balance guaranteed | 27.30% | 12.60% |
Financial Guarantee [Member] | ||
Guarantor Obligations [Line Items] | ||
Loans guaranteed, amount outstanding | $ 81.5 | $ 61.4 |
Computation of Earnings (Loss38
Computation of Earnings (Loss) Per Share - Additional Disclosures (Details) | Jan. 30, 2014$ / shares |
IPO [Member] | Common Stock [Member] | |
Class of Stock [Line Items] | |
Share Price (in dollars per share) | $ 11 |
Computation of Earnings (Loss39
Computation of Earnings (Loss) Per Share - Computation of Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Basic earnings (loss) per share attributable to The New Home Company Inc. | $ 0.27 | $ (0.06) | $ 0.57 | $ (0.03) |
Diluted earnings (loss) per share attributable to The New Home Company Inc. | $ 0.27 | $ (0.06) | $ 0.57 | $ (0.03) |
Numerator: | ||||
Net income (loss) attributable to The New Home Company Inc. | $ 4,444 | $ (1,059) | $ 9,462 | $ (533) |
Denominator: | ||||
Basic weighted-average shares outstanding | 16,516,546 | 16,448,750 | 16,507,736 | 15,696,435 |
Stock options and unvested restricted stock units | 217,259 | 0 | 152,937 | 0 |
Diluted weighted-average shares outstanding | 16,733,805 | 16,448,750 | 16,660,673 | 15,696,435 |
Employee Stock Option [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive stock options and unvested restricted stock units not included in diluted earnings (loss) per share | 14,318 | 922,882 | 5,087 | 811,777 |
Contracts and Accounts Receiv40
Contracts and Accounts Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Contracts Receivable: | ||
Costs incurred on fee building projects | $ 96,014 | $ 89,056 |
Estimated earnings | 6,144 | 4,506 |
Contracts receivable, before collections | 102,158 | 93,562 |
Less: amounts collected during the period | (91,532) | (80,404) |
Total contracts receivable | 10,626 | 13,158 |
Billed | 0 | 2 |
Unbilled | 10,626 | 13,156 |
Other receivables | ||
Escrow receivables | 458 | 0 |
Other receivables | 0 | 6 |
Contract and Accounts Receivable | 11,084 | 13,164 |
Accounts payable related to costs incurred under fee building contracts | $ 9,900 | $ 11,900 |
Real Estate Inventories and C41
Real Estate Inventories and Capitalized Interest (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Real Estate [Abstract] | ||
Deposits and pre-acquisition costs | $ 10,857 | $ 9,349 |
Land held and land under development | 57,480 | 48,990 |
Homes completed or under construction | 139,797 | 87,072 |
Model homes | 39,934 | 18,153 |
Real estate inventories | 248,068 | 163,564 |
Deposits and pre-acquisition costs, refundable | $ 350 | $ 0 |
Real Estate Inventories and C42
Real Estate Inventories and Capitalized Interest - Interest Incurred, Capitalized, and Expensed (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Real Estate [Abstract] | ||||
Interest incurred | $ 1,369 | $ 534 | $ 3,295 | $ 1,079 |
Interest capitalized | (1,369) | (534) | (3,295) | (1,079) |
Interest expense | 0 | 0 | 0 | 0 |
Capitalized Interest [Roll Forward] | ||||
Capitalized interest in beginning inventory | 3,510 | 1,495 | 2,328 | 1,003 |
Interest capitalized as a cost of inventory | 1,369 | 534 | 3,295 | 1,079 |
Contributions to unconsolidated joint ventures | 0 | 0 | (264) | 0 |
Inventory previously capitalized as cost of inventory, included in cost of sales | (396) | (65) | (876) | (118) |
Real Estate Inventory, Capitalized Interest Costs, Other Expense | (39) | 0 | (39) | 0 |
Capitalized interest in ending inventory | $ 4,444 | $ 1,964 | $ 4,444 | $ 1,964 |
Unconsolidated Joint Ventures -
Unconsolidated Joint Ventures - Additional Disclosures (Details) $ in Thousands | Jun. 29, 2015USD ($) | Sep. 30, 2015USD ($)investment | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)investment | Sep. 30, 2014USD ($) | Dec. 31, 2014investment |
Schedule of Equity Method Investments [Line Items] | ||||||
Equity Method Investment, Unrealized Intercompany Profit (Loss) Not Eliminated, Amount | $ 400 | |||||
Number of unconsolidated joint ventures with ownership interests | investment | 13 | 13 | 12 | |||
Management fee revenue, unconsolidated joint ventures | $ 3,255 | $ 2,199 | $ 8,356 | $ 5,524 | ||
Equity in net income of unconsolidated joint ventures | $ 1,600 | $ 4,056 | $ 50 | $ 9,180 | $ 995 | |
Minimum [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage | 5.00% | 5.00% | ||||
Maximum [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership percentage | 50.00% | 50.00% |
Unconsolidated Joint Ventures44
Unconsolidated Joint Ventures - Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Equity Method Investments and Joint Ventures [Abstract] | ||
Cash and cash equivalents | $ 39,333 | $ 45,037 |
Restricted cash | 11,613 | 14,981 |
Real estate inventories | 473,313 | 459,770 |
Other assets | 6,575 | 1,822 |
Total assets | 530,834 | 521,610 |
Accounts payable and accrued liabilities | 60,053 | 52,601 |
Notes Payable | 103,654 | 87,994 |
Liabilities | 163,707 | 140,595 |
The Company's equity | 61,791 | 60,564 |
Other partners' equity | 305,336 | 320,451 |
Total equity | 367,127 | 381,015 |
Total liabilities and equity | $ 530,834 | $ 521,610 |
Unconsolidated Joint Ventures45
Unconsolidated Joint Ventures - Income Statement (Details) - USD ($) $ in Thousands | Jun. 29, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 |
Equity Method Investments and Joint Ventures [Abstract] | |||||
Revenues | $ 115,370 | $ 35,720 | $ 254,780 | $ 88,166 | |
Cost of sales | 87,645 | 29,326 | 196,928 | 69,490 | |
Gross margin | 27,725 | 6,394 | 57,852 | 18,676 | |
Operating expenses | 6,819 | 3,970 | 18,542 | 11,114 | |
Net income of unconsolidated joint ventures | 20,906 | 2,424 | 39,310 | 7,562 | |
Equity in net income of unconsolidated joint ventures reflected in the accompanying consolidated statements of operations | $ 1,600 | $ 4,056 | $ 50 | $ 9,180 | $ 995 |
Other Assets (Details)
Other Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Jan. 30, 2014 |
Other Assets [Abstract] | ||||
Deferred tax asset | $ 4,439 | $ 5,841 | $ 1,400 | $ 1,500 |
Prepaid income taxes | 553 | 0 | ||
Prepaid loan fees | 0 | 307 | ||
Prepaid Expense | 825 | 500 | ||
Other assets | 227 | 31 | ||
Total other assets | $ 6,044 | $ 6,679 |
Accrued Expenses and Other Li47
Accrued Expenses and Other Liabilities - Schedule of Accrued Liabilities and Other Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | Jun. 30, 2014 |
Payables and Accruals [Abstract] | |||
Warranty reserve | $ 2,762 | $ 1,578 | $ 1,216 |
Accrued compensation and benefits | 3,568 | 4,680 | |
Accrued interest | 470 | 268 | |
Completion reserve | 328 | 219 | |
Accrued professional fees | 204 | 414 | |
Income taxes payable | 0 | 3,930 | |
Deferred profit from unconsolidated joint ventures | 437 | 0 | |
Other accrued expenses | 225 | 111 | |
Total accrued expenses and other liabilities | $ 7,994 | $ 11,200 |
Accrued Expenses and Other Li48
Accrued Expenses and Other Liabilities - Changes in Warranty Accrual (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||||
Beginning warranty liability | $ 1,216 | $ 1,578 | ||
Ending warranty liability | $ 2,762 | 2,762 | ||
Homebuilding Segment [Member] | ||||
Movement in Standard Product Warranty Accrual [Roll Forward] | ||||
Beginning warranty liability | 1,902 | 916 | 1,277 | $ 810 |
Warranty provision | 579 | 82 | 1,333 | 229 |
Warranty payments | (59) | (31) | (188) | (72) |
Ending warranty liability | 2,422 | 967 | 2,422 | 967 |
Fee Building Segment [Member] | ||||
Movement in Standard Product Warranty Accrual [Roll Forward] | ||||
Beginning warranty liability | 297 | 257 | 301 | 264 |
Warranty provision | 57 | 0 | 57 | 0 |
Warranty payments | (14) | (8) | (18) | (15) |
Ending warranty liability | $ 340 | $ 249 | $ 340 | $ 249 |
Notes Payable - Schedule of Not
Notes Payable - Schedule of Notes Payable (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||
Notes payable | $ 169,174 | $ 113,751 |
Notes payable to affiliates | 249 | 0 |
Notes Payable with Land Sellers [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable | 7,000 | 9,500 |
Construction Loans [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable | 2,250 | 3,777 |
Revolving Credit Facility [Member] | Unsecured Facility [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable | $ 159,924 | $ 100,474 |
Notes Payable - Additional Disc
Notes Payable - Additional Disclosures (Details) $ in Thousands | 9 Months Ended | ||||||
Sep. 30, 2015USD ($) | May. 07, 2015USD ($) | Jan. 07, 2015USD ($)loan | Dec. 31, 2014USD ($) | Jun. 26, 2014USD ($) | May. 31, 2014loan | Dec. 31, 2012USD ($) | |
Debt Instrument [Line Items] | |||||||
Notes payable to affiliates | $ 249 | $ 0 | |||||
Notes Payable with Land Sellers [Member] | 2012 Notes Payable to Land Seller [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Face value of note | $ 9,500 | ||||||
Interest rate | 7.00% | ||||||
Notes Reduction | $ 2,500 | ||||||
Periodic payment | 1,000 | ||||||
Construction Loans [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Total commitment | 8,600 | ||||||
Amount available to borrow under construction loans | $ 6,400 | ||||||
Number of loans | loan | 2 | ||||||
Construction Loans [Member] | Prime Rate [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 2.00% | ||||||
Interest rate at period end | 5.25% | ||||||
Note Payable Related Party [Member] [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Notes Reduction | $ 500 | ||||||
Number of loans | loan | 2 | ||||||
Notes payable to affiliates | $ 700 | ||||||
Revolving Credit Facility [Member] | Unsecured Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 175,000 | $ 125,000 | |||||
Remaining borrowing capacity | $ 15,100 | ||||||
Interest rate at period end | 2.94% | ||||||
Revolving Credit Facility [Member] | Minimum [Member] | Unsecured Facility [Member] | LIBOR [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 2.25% | ||||||
Revolving Credit Facility [Member] | Maximum [Member] | Unsecured Facility [Member] | LIBOR [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 3.00% |
Fair Value Disclosures (Details
Fair Value Disclosures (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Liabilities, Fair Value Adjustment | $ 0 | $ 0 | $ 0 | $ 0 |
Assets, Fair Value Adjustment | $ 0 | $ 0 | $ 0 | $ 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Loss Contingencies [Line Items] | ||
Estimated Litigation Liability | $ 0 | $ 0 |
Letters of Credit Outstanding, Amount | 3.6 | |
Surety Bond [Member] | ||
Loss Contingencies [Line Items] | ||
Outstanding surety bonds | 19.2 | $ 12.2 |
Letter of Credit [Member] | ||
Loss Contingencies [Line Items] | ||
Letter of Credit Facility, Maximum Borrowing Capacity | 5 | |
Optional Facility Increase [Member] | Letter of Credit [Member] | ||
Loss Contingencies [Line Items] | ||
Letter of Credit Facility, Maximum Borrowing Capacity | $ 7.5 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Jun. 29, 2015 | Jan. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 |
Related Party Transaction [Line Items] | |||||||
Due from affiliates | $ 789,000 | $ 789,000 | $ 2,662,000 | ||||
Guaranty fee income | 0 | $ 0 | 0 | $ 19,000 | |||
Investment in unconsolidated joint ventures | 61,791,000 | 61,791,000 | 60,564,000 | ||||
Accounts Payable, Related Parties | 100,000 | ||||||
Equity in net income of unconsolidated joint ventures | $ 1,600,000 | 4,056,000 | 50,000 | 9,180,000 | 995,000 | ||
Equity Method Investment, Unrealized Intercompany Profit (Loss) Not Eliminated, Amount | $ 400,000 | ||||||
Joint Ventures [Member] | Construction-related Costs [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Expenses from transactions with related party | 2,800,000 | 1,900,000 | 8,600,000 | 5,600,000 | |||
Due from affiliates | 600,000 | 600,000 | 1,100,000 | ||||
Joint Ventures [Member] | Management Fees [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Due from affiliates | 200,000 | 200,000 | 1,600,000 | ||||
Revenue from related party | 3,300,000 | 2,200,000 | 8,400,000 | 5,500,000 | |||
Related Party [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Investment in unconsolidated joint ventures | 20,800,000 | 20,800,000 | |||||
TL Fab LP [Member] | Trade Payment [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Transaction amount | 300,000 | $ 400,000 | 700,000 | $ 800,000 | |||
Accounts Payable, Related Parties | 200,000 | 200,000 | 100,000 | ||||
Consultant Davis [Member] | Monthly consulting fee [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Transaction amount | 10,000 | ||||||
Consultant Davis [Member] | Consulting Fee [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Transaction amount | 40,000 | 40,000 | |||||
Accounts Payable, Related Parties | 0 | 0 | |||||
IPO [Member] | Berchtold Capital Partners [Member] | Advisory Fees [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Transaction amount | $ 500,000 | 562,500 | |||||
Financial Guarantee [Member] | Joint Ventures [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Loans guaranteed, amount outstanding | $ 81,500,000 | $ 81,500,000 | $ 61,400,000 | ||||
Loans Payable [Member] | Joint Ventures [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Percent of outstanding loan balance guaranteed | 27.30% | 12.60% | |||||
Minimum [Member] | Joint Ventures [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
The percentage of ownership of common stock entities with investments in Company’s unconsolidated joint ventures hold | 10.00% | 10.00% |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Disclosures (Details) - USD ($) $ in Thousands | Aug. 18, 2010 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 1,242 | $ 559 | $ 2,725 | $ 1,807 | |
Number of shares that may be issued under plan | 1,644,875 | 1,644,875 | |||
Award expiration period | 10 years | ||||
Unearned stock-based compensation expense not yet recognized, recognition period | 1 year 5 months 1 day | ||||
Minimum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 1 year | ||||
Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 3 years | ||||
Equity Based Incentive Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award value on date of grant | $ 1,900 | ||||
Award vesting period | 4 years | ||||
Stock-based compensation expense | $ 0 | $ 0 | $ 0 | $ 317 | |
Stock Options and Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unearned stock-based compensation expense not yet recognized | $ 4,400 | $ 4,400 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Common Stock Option Activity (Details) | 9 Months Ended |
Sep. 30, 2015$ / sharesshares | |
Number of Shares | |
Options outstanding at December 31, 2014 (shares) | 846,874 |
Options granted (shares) | 0 |
Options forfeited (shares) | 0 |
Options outstanding at September 30, 2015 (shares) | 846,874 |
Options exercisable at September 30, 2015 (shares) | 24,717 |
Weighted-Average Exercise Price per share | |
Options outstanding at December 31, 2014 (in dollars per share) | $ / shares | $ 11 |
Options granted (in dollars per share) | $ / shares | 0 |
Options forfeited (in dollars per share) | $ / shares | 0 |
Options outstanding at September 30, 2015 (in dollars per share) | $ / shares | 11 |
Options exercisable at September 30, 2015 (in dollars per share) | $ / shares | $ 11 |
Stock-Based Compensation - Su56
Stock-Based Compensation - Summary of Restricted Stock Units (Details) - Restricted Stock Units | 9 Months Ended |
Sep. 30, 2015$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |
Balance outstanding at December 31, 2014 (shares) | 112,233 |
Restricted stock units granted (shares) | 293,324 |
Restricted stock units vested | (85,386) |
Restricted stock units forfeited (shares) | (384) |
Balance outstanding at September 30, 2015 (shares) | 319,787 |
Weighted-Average Grant-Date Fair Value per Share | |
Balance outstanding at December 31, 2014 (in dollars per share) | $ / shares | $ 11.36 |
Restricted stock units granted (in dollars per share) | $ / shares | 14.46 |
Restricted stock units vested (in dollars per share) | $ / shares | 11.48 |
Restricted stock units forfeited (in dollars per share) | $ / shares | 11 |
Balance outstanding at September 30, 2015 (in dollars per share) | $ / shares | $ 14.17 |
Stock-Based Compensation - Su57
Stock-Based Compensation - Summary of Source of Stock Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 1,242 | $ 559 | $ 2,725 | $ 1,807 |
Equity Based Incentive Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 0 | 0 | 0 | 317 |
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 301 | 319 | 911 | 854 |
Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 941 | $ 240 | $ 1,814 | $ 636 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Tax Disclosure [Abstract] | ||||
(Provision) benefit for income taxes | $ (2,249) | $ 556 | $ (5,275) | $ 2,576 |
Income Taxes Details 2 (Details
Income Taxes Details 2 (Details) | 9 Months Ended |
Sep. 30, 2015 | |
Details 2 [Abstract] | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)segment | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) | |
Segment Reporting Information [Line Items] | |||||
Number of reportable segments | segment | 2 | ||||
Homebuilding | $ 57,878 | $ 8,197 | $ 133,315 | $ 22,855 | |
Fee building | 29,099 | 20,408 | 102,158 | 53,817 | |
Revenues | 86,977 | 28,605 | 235,473 | 76,672 | |
Gross Profit | 10,060 | 2,294 | 24,095 | 5,986 | |
Assets | 364,210 | 364,210 | $ 291,958 | ||
Homebuilding Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Homebuilding | 57,878 | 8,197 | 133,315 | 22,855 | |
Gross Profit | 7,989 | 1,275 | 17,951 | 4,033 | |
Assets | 352,225 | 352,225 | 275,611 | ||
Fee Building Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Fee building | 29,099 | 20,408 | 102,158 | 53,817 | |
Gross Profit | 2,071 | $ 1,019 | 6,144 | $ 1,954 | |
Assets | $ 11,985 | $ 11,985 | $ 16,347 |
Pro Forma Net (Loss) Income a61
Pro Forma Net (Loss) Income and (Loss) Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Earnings per Share, Pro Forma [Line Items] | ||||
(Loss) income before taxes | $ 6,594 | $ (1,821) | $ 14,440 | $ (3,349) |
(Provision) benefit for taxes | (2,249) | 556 | (5,275) | 2,576 |
Net income (loss) | 4,345 | (1,265) | 9,165 | (773) |
Net loss attributable to noncontrolling interests | 99 | 206 | 297 | 240 |
Net income (Loss) attributable to The New Home Company Inc | $ 4,444 | $ (1,059) | $ 9,462 | (533) |
Pro forma basic (loss) earnings per share attributable to The New Home Company Inc. (in dollars per share) | $ (0.06) | |||
Pro forma diluted (loss) earnings per share attributable to The New Home Company Inc. (in dollars per share) | $ (0.06) | |||
Pro Forma | ||||
Earnings per Share, Pro Forma [Line Items] | ||||
(Provision) benefit for taxes | $ 655 | 1,232 | ||
Net income (loss) | (1,166) | (2,117) | ||
Net income (Loss) attributable to The New Home Company Inc | $ (960) | $ (1,877) | ||
Pro forma basic (loss) earnings per share attributable to The New Home Company Inc. (in dollars per share) | $ (0.12) | |||
Pro forma diluted (loss) earnings per share attributable to The New Home Company Inc. (in dollars per share) | $ (0.12) |
Pro Forma Net (Loss) Income a62
Pro Forma Net (Loss) Income and (Loss) Earnings per Share Details 2 (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Jan. 30, 2014 |
Details 2 [Abstract] | ||||
Deferred Tax Assets, Net | $ 4,439 | $ 5,841 | $ 1,400 | $ 1,500 |