FORM 10-K |
Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
LGI HOMES, INC. (Exact name of registrant as specified in its charter) | ||
Delaware | 46-3088013 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
1450 Lake Robbins Drive, Suite 430, The Woodlands, Texas | 77380 | |
(Address of principal executive offices) | (Zip code) | |
(281) 362-8998 | ||
(Registrant’s Telephone Number, Including Area Code) |
Title of each class Common Stock ($0.01 par value) | Name of each exchange on which registered NASDAQ |
Large accelerated filer x | Accelerated filer o | |
Non-accelerated filer o | Smaller reporting company o | |
(Do not check if a smaller reporting company) | Emerging growth company o | |
Page | ||
Central | Southwest | Southeast | Florida | Northwest | Midwest | |||||
Houston, TX | Phoenix, AZ | Atlanta, GA | Tampa, FL | Seattle, WA | Minneapolis, MN | |||||
Dallas/Ft. Worth, TX | Tucson, AZ | Charlotte, NC/SC | Orlando, FL | Portland, OR | ||||||
San Antonio, TX | Albuquerque, NM | Nashville, TN | Fort Myers, FL | Sacramento, CA | ||||||
Austin, TX | Denver, CO | Raleigh, NC | Jacksonville, FL | |||||||
Oklahoma City, OK | Colorado Springs, CO | Winston-Salem, NC | ||||||||
Las Vegas, NV | Birmingham, AL |
Year Ended December 31, 2017 | As of December 31, 2017 | |||||||||||
Division | Home Closings | Owned (1) | Controlled | Total | ||||||||
Central | 2,613 | 11,811 | 8,173 | 19,984 | ||||||||
Southwest | 942 | 2,184 | 775 | 2,959 | ||||||||
Southeast | 973 | 4,518 | 6,052 | 10,570 | ||||||||
Florida | 1,014 | 1,613 | 2,372 | 3,985 | ||||||||
Northwest | 300 | 643 | 1,253 | 1,896 | ||||||||
Midwest | 3 | 182 | 133 | 315 | ||||||||
Total | 5,845 | 20,951 | 18,758 | 39,709 |
(1) | Of the 20,951 owned lots as of December 31, 2017, 11,722 were raw/under development lots and 9,229 were finished lots. |
Division | Homes in Inventory (1) | Inventory Value (1) | |||||
Central | 1,041 | $ | 134,414 | ||||
Southwest | 565 | 91,672 | |||||
Southeast | 586 | 68,239 | |||||
Florida | 476 | 66,881 | |||||
Northwest | 181 | 34,204 | |||||
Midwest | 64 | 10,644 | |||||
Total | 2,913 | $ | 406,054 |
(1) | Includes homes in progress and completed homes; excludes information centers. |
Name | Age | Position | ||
Eric Lipar | 47 | Chief Executive Officer and Chairman of the Board | ||
Michael Snider | 46 | President and Chief Operating Officer | ||
Charles Merdian | 48 | Chief Financial Officer and Treasurer | ||
Jack Lipar | 49 | Executive Vice President of Acquisitions | ||
Rachel Eaton | 36 | Chief Marketing Officer | ||
Margaret Britton | 55 | Chief Administrative Officer and Secretary |
Eric Lipar. Mr. Lipar is our Chief Executive Officer and serves as Chairman of our Board of Directors. He has served as our Chief Executive Officer since 2009, as a director since June 2013 and as Chairman of the Board since July 2013. Previously, Mr. Lipar served as our President from 2003 until 2009. Mr. Lipar has been in the residential land development business since the mid-1990s and is one of our founders. He has overseen land acquisition, development and the sales of over 22,000 homes since our inception. Mr. Lipar currently serves on the Residential Neighborhood Development Council for the Urban Land Institute and is a Policy Advisor Board Member for the Harvard Joint Center of Housing Studies. |
Michael Snider. Mr. Snider has served as our President since 2009 and our Chief Operating Officer since July 2013. He oversees all aspects of our sales, construction, and product development. Prior to serving as our President, Mr. Snider was Executive Vice President of Homebuilding (2005-2009) and in the role of Homebuilding Manager (2004). Before joining the Company in 2004, Mr. Snider was a Project Manager for Tadian Homes, a homebuilder based in Troy, Michigan. |
Charles Merdian. Mr. Merdian has served as our Chief Financial Officer and Treasurer since 2013, and served as our Secretary from 2013 to 2016. Prior to becoming our Chief Financial Officer in 2010, Mr. Merdian was our Controller from 2004 through 2010. Prior to joining us in 2004, Mr. Merdian served as Accounting and Finance Manager for The Woodlands Operating Company where he specialized in accounting and financial analysis of real estate ventures, focusing primarily on residential and commercial developments. Prior to The Woodlands Operating Company, Mr. Merdian served as an accounting manager working at the Williamson-Dickie Manufacturing Co. and as a senior auditor for Coopers & Lybrand, LLP. Mr. Merdian has worked in residential real estate and homebuilding finance since 1998. Mr. Merdian is a Certified Public Accountant and is a member of the Texas Society of Certified Public Accountants. |
Jack Lipar. Mr. Lipar has served as our Executive Vice President of Acquisitions since March 2013. He previously served as Vice President of Acquisitions from December 2010 through February 2013, and Acquisitions Manager from 2006 to December 2010. Mr. Lipar oversees land acquisitions and development for the Company. Prior to joining us, Mr. Lipar worked at HP Pelzer, an auto parts manufacturing company based in Germany, as the Vice President of Purchasing and Director of Operations. Mr. Lipar was also the General Manager and a member of the Board of Directors at Alliance Interiors, an affiliate of HP Pelzer. Prior to HP Pelzer, Mr. Lipar was a worldwide Purchasing Manager for Cooper Standard, one of the world’s leading manufacturers of automotive parts. |
Rachel Eaton. Ms. Eaton serves as our Chief Marketing Officer and is responsible for the overall growth and direction of our marketing initiatives, brand image, and social media. Prior to becoming our Chief Marketing Officer in June 2013, Ms. Eaton served as our Vice President of Marketing and Administration from May 2012 through May 2013 and Director of Marketing & Special Events from 2007 to May 2012. Ms. Eaton joined the Company in 2003. |
Margaret Britton. Ms. Britton has served as our Chief Administrative Officer since August 2013 and has served as our Secretary since May 2016. She is responsible for various corporate areas, including governance, risk, and compliance matters. From 2008 to 2012, Ms. Britton was a Director at Deloitte Financial Advisory Services, LLP, where she provided advisory services and was a leader in their national environmental consulting practice. She worked as a consultant from 2003 to 2007 and, among other things, assisted two multinational energy companies with the implementation and oversight of their Sarbanes-Oxley Act requirements. Prior to 2002, Ms. Britton was an assurance partner at Arthur Andersen LLP. Ms. Britton is a Certified Public Accountant and a member of the Board of Directors of Archway Insurance LTD, a captive insurance company, and the Girls Scouts of San Jacinto Council. |
• | our cash flow from operations may be insufficient to make required payments of principal of and interest on the debt which is likely to result in acceleration of such indebtedness; |
• | our indebtedness may increase our vulnerability to adverse economic and industry conditions with no assurance that our profitability will increase with higher financing cost; |
• | we may be required to dedicate a portion of our cash flow from operations to payments on our indebtedness, thereby reducing funds available for operations and capital expenditures, future investment opportunities or other purposes; and |
• | the terms of any refinancing may not be as favorable as the terms of the indebtedness being refinanced. |
• | general market conditions; |
• | the market’s perception of our growth potential; |
• | with respect to acquisition and/or development financing, the market’s perception of the value of the land parcels to be acquired and/or developed; |
• | our current debt levels; |
• | our current and expected future earnings; |
• | our cash flow; and |
• | the market price per share of our common stock. |
• | adverse economic changes either nationally or in the markets in which we operate, including, among other things, increases in unemployment, volatility of mortgage interest rates and inflation and decreases in housing prices; |
• | a slowdown in the homebuilding industry; |
• | volatility and uncertainty in the credit markets and broader financial markets; |
• | the cyclical and seasonal nature of our business; |
• | our future operating results and financial condition; |
• | our business operations; |
• | changes in our business and investment strategy; |
• | the success of our operations in recently opened new markets and our ability to expand into additional new markets; |
• | our ability to successfully extend our business model to building homes with higher price points, developing larger communities and producing and selling multi-unit products, townhouses, wholesale products, and acreage home sites; |
• | our ability to develop our projects successfully or within expected timeframes; |
• | our ability to identify potential acquisition targets and close such acquisitions; |
• | our ability to successfully integrate any acquisitions with our existing operations; |
• | availability of land to acquire and our ability to acquire such land on favorable terms or at all; |
• | availability, terms and deployment of capital; |
• | decisions of the lender group of our revolving credit facility; |
• | the occurrence of the specific conversion events that enable early conversion of our 4.25% Convertible Notes due 2019; |
• | decline in the market value of our land portfolio; |
• | disruption in the terms or availability of mortgage financing or increase in the number of foreclosures in our markets; |
• | shortages of or increased prices for labor, land, or raw materials used in land development and housing construction; |
• | delays in land development or home construction resulting from natural disasters, adverse weather conditions or other events outside our control; |
• | uninsured losses in excess of insurance limits; |
• | the cost and availability of insurance and surety bonds; |
• | changes in, liabilities under, or the failure or inability to comply with, governmental laws and regulations; |
• | the timing of receipt of regulatory approvals and the opening of projects; |
• | the degree and nature of our competition; |
• | increases in taxes or government fees; |
• | poor relations with the residents of our projects; |
• | future litigation, arbitration or other claims; |
• | availability of qualified personnel and third-party contractors and subcontractors; |
• | our ability to retain our key personnel; |
• | our leverage and future debt service obligations; |
• | the impact on our business of any future government shutdown; |
• | other risks and uncertainties inherent in our business; and |
• | other factors we discuss under the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” |
High | Low | |||||||
2016 | ||||||||
1st Quarter | $ | 24.33 | $ | 19.49 | ||||
2nd Quarter | $ | 31.94 | $ | 23.44 | ||||
3rd Quarter | $ | 39.46 | $ | 32.20 | ||||
4th Quarter | $ | 36.97 | $ | 28.63 | ||||
2017 | ||||||||
1st Quarter | $ | 33.91 | $ | 27.40 | ||||
2nd Quarter | $ | 40.18 | $ | 29.04 | ||||
3rd Quarter | $ | 48.57 | $ | 39.90 | ||||
4th Quarter | $ | 76.99 | $ | 48.97 |
11/7/2013 | 12/31/2013 | 12/31/2014 | 12/31/2015 | 12/31/2016 | 12/31/2017 | |||||||
LGIH | $100.00 | $137.91 | $115.66 | $188.60 | $222.71 | $581.63 | ||||||
S&P 500 Index | $100.00 | $105.79 | $117.84 | $116.99 | $128.14 | $153.03 | ||||||
S&P Homebuilders Index | $100.00 | $110.54 | $113.33 | $113.54 | $112.50 | $146.99 |
Year Ended December 31, | ||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
(dollars in thousands, except per share data and average home sales price) | ||||||||||||||||||||
Statement of Operations Data: | ||||||||||||||||||||
Revenues: | ||||||||||||||||||||
Home sales revenues | $ | 1,257,960 | $ | 838,320 | $ | 630,236 | $ | 383,268 | $ | 160,067 | ||||||||||
Management and warranty fees | — | — | — | — | 2,729 | |||||||||||||||
Total revenues | 1,257,960 | 838,320 | 630,236 | 383,268 | 162,796 | |||||||||||||||
Expenses: | ||||||||||||||||||||
Cost of sales | 937,540 | 616,707 | 463,304 | 280,481 | 121,326 | |||||||||||||||
Selling expenses | 94,957 | 66,984 | 52,998 | 36,672 | 15,769 | |||||||||||||||
General and administrative | 55,662 | 43,158 | 34,260 | 23,744 | 13,604 | |||||||||||||||
Income from unconsolidated joint ventures | — | — | — | — | (4,287 | ) | ||||||||||||||
Operating income | 169,801 | 111,471 | 79,674 | 42,371 | 16,384 | |||||||||||||||
Interest expense, net | — | — | — | — | 51 | |||||||||||||||
Gain on remeasurement of interests in LGI/GTIS Joint Ventures | — | — | — | — | (6,446 | ) | ||||||||||||||
Other income, net | (1,601 | ) | (2,201 | ) | (606 | ) | (708 | ) | (24 | ) | ||||||||||
Net income before income taxes | 171,402 | 113,672 | 80,280 | 43,079 | 22,803 | |||||||||||||||
Income tax provision | 58,096 | 38,641 | 27,450 | 14,868 | 1,066 | |||||||||||||||
Net income | 113,306 | 75,031 | 52,830 | 28,211 | 21,737 | |||||||||||||||
Loss attributable to non-controlling interests | — | — | — | — | 590 | |||||||||||||||
Net income attributable to owners | $ | 113,306 | $ | 75,031 | $ | 52,830 | $ | 28,211 | $ | 22,327 | ||||||||||
Basic earnings per share (1) | $ | 5.24 | $ | 3.61 | $ | 2.65 | $ | 1.37 | $ | 0.34 | ||||||||||
Diluted earnings per share (1) | $ | 4.73 | $ | 3.41 | $ | 2.44 | $ | 1.33 | $ | 0.34 | ||||||||||
Other Financial and Operating Data: | ||||||||||||||||||||
Active communities at end of year | 78 | 63 | 52 | 39 | 25 | |||||||||||||||
Home closings | 5,845 | 4,163 | 3,404 | 2,356 | 1,062 | |||||||||||||||
Average sales price of homes closed | $ | 215,220 | $ | 201,374 | $ | 185,146 | $ | 162,677 | $ | 150,722 | ||||||||||
Gross margin (2) | $ | 320,420 | $ | 221,613 | $ | 166,932 | $ | 102,787 | $ | 38,741 | ||||||||||
Gross margin % (3) | 25.5 | % | 26.4 | % | 26.5 | % | 26.8 | % | 24.2 | % | ||||||||||
Adjusted gross margin (4) | $ | 338,066 | $ | 232,778 | $ | 175,120 | $ | 108,111 | $ | 43,371 | ||||||||||
Adjusted gross margin % (3)(4) | 26.9 | % | 27.8 | % | 27.8 | % | 28.2 | % | 27.1 | % |
December 31, | ||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 (5) | ||||||||||||||||
Balance Sheet Data: | (in thousands) | |||||||||||||||||||
Cash and cash equivalents | $ | 67,571 | $ | 49,518 | $ | 37,568 | $ | 31,370 | $ | 54,069 | ||||||||||
Real estate inventory | $ | 918,933 | $ | 717,681 | $ | 531,228 | $ | 367,908 | $ | 141,983 | ||||||||||
Goodwill | $ | 12,018 | $ | 12,018 | $ | 12,234 | $ | 12,481 | $ | 12,728 | ||||||||||
Total assets | $ | 1,079,892 | $ | 814,514 | $ | 618,702 | $ | 434,289 | $ | 220,905 | ||||||||||
Notes payable | $ | 475,195 | $ | 400,483 | $ | 304,561 | $ | 212,261 | $ | 35,430 | ||||||||||
Total liabilities | $ | 590,046 | $ | 459,313 | $ | 371,313 | $ | 251,790 | $ | 56,531 | ||||||||||
Total equity | $ | 489,846 | $ | 355,201 | $ | 247,389 | $ | 182,499 | $ | 164,374 |
(1) | Earnings per share is presented for the years ended December 31, 2017, 2016, 2015, 2014 and the period from November 13, 2013 (date of closing of IPO) to December 31, 2013. See Note 8 “Equity” to our consolidated financial statements included in Part II, Item 8 of this Annual Report of this Form 10-K for calculation of earnings per share. |
(2) | Gross margin is home sales revenues less cost of sales. |
(3) | Calculated as a percentage of home sales revenues. |
(4) | Adjusted gross margin is a non-GAAP financial measure used by management as a supplemental measure in evaluating operating performance. We define adjusted gross margin as gross margin less capitalized interest and adjustments resulting from the application of purchase accounting included in the cost of sales. Our management believes this information is useful because it isolates the impact that capitalized interest and purchase accounting adjustments have on gross margin. However, because adjusted gross margin information excludes capitalized interest and purchase accounting adjustment, which have real economic effects and could impact our results, the utility of adjusted gross margin information as a measure of our operating performance may be limited. In addition, other companies may not calculate adjusted gross margin information in the same manner that we do. Accordingly, adjusted gross margin information should be considered only as a supplement to gross margin information as a measure of our performance. Please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Measures” for a reconciliation of adjusted gross margin to gross margin, which is the GAAP financial measure that our management believes to be most directly comparable. |
(5) | In November 2013, we completed an initial public offering (the “IPO”) of our common stock. As a result of the reorganization transactions completed in connection with the IPO (the “Reorganization Transactions”), for accounting purposes, our 2013 historical results present the combined assets, liabilities and results of operations of LGI Homes, Inc. since the date of its formation and certain affiliates and their direct and indirect subsidiaries prior to the IPO. For the period subsequent to the IPO, the assets, liabilities and results of operations present the consolidated results of the Company. |
• | Home sales revenues increased 50.1% to $1.3 billion from $838.3 million. |
• | Homes closed increased 40.4% to 5,845 homes from 4,163 homes. |
• | Average sales price of our homes increased $13,846 to $215,220 from $201,374. |
• | Gross margin as a percentage of home sales revenues decreased to 25.5% from 26.4%. |
• | Adjusted gross margin (non-GAAP) as a percentage of home sales revenues decreased to 26.9% from 27.8%. |
• | Net income before income taxes increased 50.8% to $171.4 million from $113.7 million. |
• | Active communities at the end of 2017 increased to 78 from 63. Eleven active communities added during 2017 are outside of our Texas markets, contributing to the further geographic diversification of our business to markets outside of Texas. |
• | Total owned and controlled lots increased 34.8% to 39,709 lots at December 31, 2017 from 29,460 lots at December 31, 2016. |
Year Ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
(dollars in thousands, except per share data and average home sales price) | ||||||||||||
Statement of Income Data: | ||||||||||||
Home sales revenues | $ | 1,257,960 | $ | 838,320 | $ | 630,236 | ||||||
Expenses: | ||||||||||||
Cost of sales | 937,540 | 616,707 | 463,304 | |||||||||
Selling expenses | 94,957 | 66,984 | 52,998 | |||||||||
General and administrative | 55,662 | 43,158 | 34,260 | |||||||||
Operating income | 169,801 | 111,471 | 79,674 | |||||||||
Other income, net | (1,601 | ) | (2,201 | ) | (606 | ) | ||||||
Net income before income taxes | 171,402 | 113,672 | 80,280 | |||||||||
Income tax provision | 58,096 | 38,641 | 27,450 | |||||||||
Net income | $ | 113,306 | $ | 75,031 | $ | 52,830 | ||||||
Basic earnings per share | $ | 5.24 | $ | 3.61 | $ | 2.65 | ||||||
Diluted earnings per share | $ | 4.73 | $ | 3.41 | $ | 2.44 | ||||||
Other Financial and Operating Data: | ||||||||||||
Active communities at end of year | 78 | 63 | 52 | |||||||||
Home closings | 5,845 | 4,163 | 3,404 | |||||||||
Average sales price of homes closed | $ | 215,220 | $ | 201,374 | $ | 185,146 | ||||||
Gross margin (1) | $ | 320,420 | $ | 221,613 | $ | 166,932 | ||||||
Gross margin % (2) | 25.5 | % | 26.4 | % | 26.5 | % | ||||||
Adjusted gross margin (3) | $ | 338,066 | $ | 232,778 | $ | 175,120 | ||||||
Adjusted gross margin % (2)(3) | 26.9 | % | 27.8 | % | 27.8 | % |
(1) | Gross margin is home sales revenues less cost of sales. |
(2) | Calculated as a percentage of home sales revenues. |
(3) | Adjusted gross margin is a non-GAAP financial measure used by management as a supplemental measure in evaluating operating performance. We define adjusted gross margin as gross margin less capitalized interest and adjustments resulting from the application of purchase accounting included in the cost of sales. Our management believes this information is useful because it isolates the impact that capitalized interest and purchase accounting adjustments have on gross margin. However, because adjusted gross margin information excludes capitalized interest and purchase accounting adjustment, which have real economic effects and could impact our results, the utility of adjusted gross margin information as a measure of our operating performance may be limited. In addition, other companies may not calculate adjusted gross margin information in the same manner that we do. Accordingly, adjusted gross margin information should be considered only as a supplement to gross margin information as a measure of our performance. Please see “—Non-GAAP Measures” for a reconciliation of adjusted gross margin to gross margin, which is the GAAP financial measure that our management believes to be most directly comparable. |
Year Ended December 31, | ||||||||||||||||||||||
2017 | 2016 | |||||||||||||||||||||
Revenues | Closings | ASP | Revenues | Closings | ASP | |||||||||||||||||
Central | $ | 532,447 | 2,613 | $ | 203,768 | $ | 429,505 | 2,143 | $ | 200,422 | ||||||||||||
Southwest | 243,037 | 942 | 258,001 | 165,017 | 737 | 223,904 | ||||||||||||||||
Southeast | 183,422 | 973 | 188,512 | 111,651 | 635 | 175,828 | ||||||||||||||||
Florida | 199,733 | 1,014 | 196,975 | 115,276 | 595 | 193,741 | ||||||||||||||||
Northwest | 98,514 | 300 | 328,380 | 16,871 | 53 | 318,321 | ||||||||||||||||
Midwest | 807 | 3 | 269,000 | — | — | — | ||||||||||||||||
Total home sales revenue | $ | 1,257,960 | 5,845 | $ | 215,220 | $ | 838,320 | 4,163 | $ | 201,374 |
At December 31, | |||||
Community count | 2017 | 2016 | |||
Central | 28 | 24 | |||
Southwest | 16 | 15 | |||
Southeast | 17 | 11 | |||
Florida | 11 | 10 | |||
Northwest | 5 | 3 | |||
Midwest | 1 | — | |||
Total community count | 78 | 63 |
Year Ended December 31, | ||||||||||||||||||||||
2016 | 2015 | |||||||||||||||||||||
Revenues | Closings | ASP | Revenues | Closings | ASP | |||||||||||||||||
Central | $ | 429,505 | 2,143 | $ | 200,422 | $ | 350,674 | 1,856 | $ | 188,941 | ||||||||||||
Southwest | 165,017 | 737 | 223,904 | 109,878 | 565 | 194,474 | ||||||||||||||||
Southeast | 111,651 | 635 | 175,828 | 95,949 | 587 | 163,457 | ||||||||||||||||
Florida | 115,276 | 595 | 193,741 | 73,735 | 396 | 186,199 | ||||||||||||||||
Northwest | 16,871 | 53 | 318,321 | — | — | — | ||||||||||||||||
Total home sales revenue | $ | 838,320 | 4,163 | $ | 201,374 | $ | 630,236 | 3,404 | $ | 185,146 |
At December 31, | |||||
Community count | 2016 | 2015 | |||
Central | 24 | 24 | |||
Southwest | 15 | 11 | |||
Southeast | 11 | 10 | |||
Florida | 10 | 7 | |||
Northwest | 3 | — | |||
Total community count | 63 | 52 |
Year Ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
Home sales revenues | $ | 1,257,960 | $ | 838,320 | $ | 630,236 | ||||||
Cost of sales | 937,540 | 616,707 | 463,304 | |||||||||
Gross margin | 320,420 | 221,613 | 166,932 | |||||||||
Capitalized interest charged to cost of sales | 17,400 | 10,680 | 6,057 | |||||||||
Purchase accounting adjustments (a) | 246 | 485 | 2,131 | |||||||||
Adjusted gross margin | $ | 338,066 | $ | 232,778 | $ | 175,120 | ||||||
Gross margin % (b) | 25.5 | % | 26.4 | % | 26.5 | % | ||||||
Adjusted gross margin % (b) | 26.9 | % | 27.8 | % | 27.8 | % |
(a) | Adjustments result from the application of purchase accounting for acquisitions and represent the amount of the fair value step-up adjustments included in cost of sales for real estate inventory sold after the acquisition dates. |
(b) | Calculated as a percentage of home sales revenues. |
Backlog Data | Year Ended December 31, | |||||||||||
2017 (5) | 2016(4) | 2015 | ||||||||||
Net orders (1) | 6,215 | 4,086 | 3,628 | |||||||||
Cancellation rate (2) | 25.4 | % | 24.5 | % | 27.2 | % | ||||||
Ending backlog - homes (3) | 816 | 446 | 523 | |||||||||
Ending backlog - value (3) | $ | 191,831 | $ | 96,940 | $ | 102,593 |
(1) | Net orders are new (gross) orders for the purchase of homes during the period, less cancellations of existing purchase contracts during the period. |
(2) | Cancellation rate for a period is the total number of purchase contracts cancelled during the period divided by the total new (gross) orders for the purchase of homes during the period. |
(3) | Ending backlog consists of homes at the end of the period that are under a purchase contract and have met our preliminary financing criteria but have not yet closed and wholesale contracts for which the required deposit has been made. Ending backlog is valued at the contract amount. |
(4) | 156 units and values related to a bulk sales agreement are not included in the table above. |
(5) | 106 units and values related to bulk sales agreements are not included in the table above. |
Payments due by period (in thousands) | ||||||||||||||||||||
Contractual Obligations | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | |||||||||||||||
Borrowings: | ||||||||||||||||||||
Credit Facility (a) | $ | 400,000 | $ | — | $ | 400,000 | $ | — | $ | — | ||||||||||
Convertible Notes (b) | 85,000 | 85,000 | — | — | — | |||||||||||||||
Inventory related obligations(c) | 12,906 | 356 | 777 | 867 | 10,906 | |||||||||||||||
Interest and fees (d) | 87,068 | 32,224 | 46,490 | 1,269 | 7,085 | |||||||||||||||
Operating leases | 6,501 | 778 | 1,151 | 1,144 | 3,428 | |||||||||||||||
Total | $ | 591,475 | $ | 118,358 | $ | 448,418 | $ | 3,280 | $ | 21,419 |
(a) | Represents borrowings under our $600.0 million revolving credit facility which matures on May 31, 2020. See Note 6 “Notes Payable” to our consolidated financial statements included in Part II Item 8 of this Annual Report on Form 10-K for additional information regarding our long-term debt. |
(b) | Represents $85.0 million aggregate principal amount of our 4.25% Convertible Notes due 2019. The Convertible Notes mature on November 15, 2019. Based on the terms of the Convertible Notes, the holders may elect to convert all or a portion of the Convertible Notes owned during the period January 1, 2018 through March 31, 2018 (inclusive) therefore the Convertible Notes are reflected above with a current maturity date. $15.0 million principal amount of Convertible Notes have been converted in 2018 prior to the filing of this Annual Report on Form 10-K. See Note 6 “Notes Payable” to our consolidated financial statements included in Part II Item 8 of this Annual Report on Form 10-K for additional information regarding our long-term debt. |
(c) | The Company owns lots in certain communities that have Community Development Districts (“CDD”) or similar utility and infrastructure development special assessment programs that allocate a fixed amount of debt service associated with development activities to each lot. Such obligations represent a non-cash cost of the lots. |
(d) | All of the outstanding borrowings under the Credit Facility is at variable rates based on LIBOR, or subject to an interest rate floor. The interest rate for our variable rate indebtedness as of December 31, 2017 was LIBOR plus 3.15%. Fees on the Credit Facility are approximately $0.1 million per year. Interest on our Convertible Notes accrues at a fixed rate of 4.25% per year and is payable semiannually beginning on May 15, 2015 through November 15, 2019 and includes $3.6 million in costs, per year through maturity date. Inventory related obligations for infrastructure development attached to the land are subject to a fixed interest rate generally ranging from 1.33% to 7.13%, typically payable over a 30 year period, and are ultimately assumed by the homebuyer when home sales are closed. |
December 31, | ||||||||
2017 | 2016 | |||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 67,571 | $ | 49,518 | ||||
Accounts receivable | 44,706 | 17,055 | ||||||
Real estate inventory | 918,933 | 717,681 | ||||||
Pre-acquisition costs and deposits | 18,866 | 10,651 | ||||||
Property and equipment, net | 1,674 | 1,960 | ||||||
Other assets | 14,196 | 5,631 | ||||||
Deferred tax assets, net | 1,928 | — | ||||||
Goodwill | 12,018 | 12,018 | ||||||
Total assets | $ | 1,079,892 | $ | 814,514 | ||||
LIABILITIES AND EQUITY | ||||||||
Accounts payable | $ | 12,020 | $ | 12,277 | ||||
Accrued expenses and other liabilities | 102,831 | 46,389 | ||||||
Deferred tax liabilities, net | — | 164 | ||||||
Notes payable | 475,195 | 400,483 | ||||||
Total liabilities | 590,046 | 459,313 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
EQUITY | ||||||||
Common stock, par value $0.01, 250,000,000 shares authorized, 22,845,580 shares issued and 21,845,580 shares outstanding as of December 31, 2017 and 22,311,310 shares issued and 21,311,310 shares outstanding as of December 31, 2016 | 228 | 223 | ||||||
Additional paid-in capital | 229,680 | 208,346 | ||||||
Retained earnings | 276,488 | 163,182 | ||||||
Treasury stock, at cost, 1,000,000 shares | (16,550 | ) | (16,550 | ) | ||||
Total equity | 489,846 | 355,201 | ||||||
Total liabilities and equity | $ | 1,079,892 | $ | 814,514 |
For the Year Ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
Home sales revenues | $ | 1,257,960 | $ | 838,320 | $ | 630,236 | ||||||
Cost of sales | 937,540 | 616,707 | 463,304 | |||||||||
Selling expenses | 94,957 | 66,984 | 52,998 | |||||||||
General and administrative | 55,662 | 43,158 | 34,260 | |||||||||
Operating income | 169,801 | 111,471 | 79,674 | |||||||||
Other income, net | (1,601 | ) | (2,201 | ) | (606 | ) | ||||||
Net income before income taxes | 171,402 | 113,672 | 80,280 | |||||||||
Income tax provision | 58,096 | 38,641 | 27,450 | |||||||||
Net income | $ | 113,306 | $ | 75,031 | $ | 52,830 | ||||||
Earnings per share: | ||||||||||||
Basic | $ | 5.24 | $ | 3.61 | $ | 2.65 | ||||||
Diluted | $ | 4.73 | $ | 3.41 | $ | 2.44 | ||||||
Weighted average shares outstanding: | ||||||||||||
Basic | 21,604,932 | 20,798,333 | 19,939,761 | |||||||||
Diluted | 23,933,122 | 22,024,091 | 21,740,719 |
Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Total Equity | ||||||||||||||||||
Shares | Amount | |||||||||||||||||||||
BALANCE—December 31, 2014 | 20,849,044 | $ | 208 | $ | 163,520 | $ | 35,321 | $ | (16,550 | ) | $ | 182,499 | ||||||||||
Net income | — | — | — | 52,830 | — | 52,830 | ||||||||||||||||
Issuance of shares, net of offering costs | 345,760 | 4 | 9,492 | — | — | 9,496 | ||||||||||||||||
Issuance of restricted stock units in settlement of accrued bonuses | — | — | 238 | — | — | 238 | ||||||||||||||||
Compensation expense for equity awards | — | — | 2,279 | — | — | 2,279 | ||||||||||||||||
Stock issued under employee incentive plans | 75,585 | 1 | 46 | — | — | 47 | ||||||||||||||||
BALANCE—December 31, 2015 | 21,270,389 | $ | 213 | $ | 175,575 | $ | 88,151 | $ | (16,550 | ) | $ | 247,389 | ||||||||||
Net income | — | — | — | 75,031 | — | 75,031 | ||||||||||||||||
Issuance of shares, net of offering costs | 993,554 | 10 | 28,467 | — | — | 28,477 | ||||||||||||||||
Issuance of restricted stock units in settlement of accrued bonuses | — | — | 138 | — | — | 138 | ||||||||||||||||
Compensation expense for equity awards | — | — | 3,396 | — | — | 3,396 | ||||||||||||||||
Stock issued under employee incentive plans | 47,367 | — | 770 | — | — | 770 | ||||||||||||||||
BALANCE—December 31, 2016 | 22,311,310 | $ | 223 | $ | 208,346 | $ | 163,182 | $ | (16,550 | ) | $ | 355,201 | ||||||||||
Net income | — | — | — | 113,306 | — | 113,306 | ||||||||||||||||
Issuance of shares, net of offering costs | 354,620 | 3 | 15,339 | — | — | 15,342 | ||||||||||||||||
Issuance of restricted stock units in settlement of accrued bonuses | — | — | 167 | — | — | 167 | ||||||||||||||||
Compensation expense for equity awards | — | — | 4,188 | — | — | 4,188 | ||||||||||||||||
Stock issued under employee incentive plans | 179,650 | 2 | 1,640 | — | — | 1,642 | ||||||||||||||||
BALANCE—December 31, 2017 | 22,845,580 | $ | 228 | $ | 229,680 | $ | 276,488 | $ | (16,550 | ) | $ | 489,846 |
For the Year Ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net income | $ | 113,306 | $ | 75,031 | $ | 52,830 | ||||||
Adjustments to reconcile net income to net cash used in operating activities: | ||||||||||||
Depreciation and amortization | 791 | 1,089 | 883 | |||||||||
Loss on disposal of assets | 13 | 1 | — | |||||||||
Excess tax benefits from stock based compensation | — | (138 | ) | (47 | ) | |||||||
Compensation expense for equity awards | 4,188 | 3,396 | 2,279 | |||||||||
Deferred income taxes | (2,092 | ) | (2,562 | ) | 42 | |||||||
Changes in assets and liabilities: | ||||||||||||
Accounts receivable | (27,651 | ) | 270 | (9,960 | ) | |||||||
Real estate inventory | (200,609 | ) | (183,884 | ) | (151,707 | ) | ||||||
Pre-acquisition costs and deposits | (8,215 | ) | (3,650 | ) | 2,877 | |||||||
Other assets | (8,643 | ) | 5,472 | (4,795 | ) | |||||||
Accounts payable | (257 | ) | (11,747 | ) | 8,522 | |||||||
Accrued expenses and other liabilities | 60,702 | 8,539 | 9,920 | |||||||||
Net cash used in operating activities | (68,467 | ) | (108,183 | ) | (89,156 | ) | ||||||
Cash flows from investing activities: | ||||||||||||
Purchases of property and equipment | (518 | ) | (722 | ) | (1,117 | ) | ||||||
Net cash used in investing activities | (518 | ) | (722 | ) | (1,117 | ) | ||||||
Cash flows from financing activities: | ||||||||||||
Proceeds from notes payable | 100,000 | 140,000 | 245,382 | |||||||||
Payments on notes payable | (25,000 | ) | (45,000 | ) | (154,786 | ) | ||||||
Loan issuance costs | (4,375 | ) | (2,684 | ) | (2,238 | ) | ||||||
Proceeds from sale of stock, net of offering expenses | 17,130 | 29,448 | 9,593 | |||||||||
Payment for offering costs | (69 | ) | (204 | ) | (419 | ) | ||||||
Payment for earnout obligation | (648 | ) | (843 | ) | (1,108 | ) | ||||||
Excess tax benefits from equity awards | — | 138 | 47 | |||||||||
Net cash provided by financing activities | 87,038 | 120,855 | 96,471 | |||||||||
Net increase in cash and cash equivalents | 18,053 | 11,950 | 6,198 | |||||||||
Cash and cash equivalents, beginning of year | 49,518 | 37,568 | 31,370 | |||||||||
Cash and cash equivalents, end of year | $ | 67,571 | $ | 49,518 | $ | 37,568 |
December 31, | ||||||||
2017 | 2016 | |||||||
Land, land under development, and finished lots | $ | 494,552 | $ | 477,461 | ||||
Information centers | 18,327 | 13,589 | ||||||
Homes in progress | 191,659 | 94,686 | ||||||
Completed homes | 214,395 | 131,945 | ||||||
Total real estate inventory | $ | 918,933 | $ | 717,681 |
December 31, | ||||||||||
Asset Life | 2017 | 2016 | ||||||||
(years) | ||||||||||
Computer equipment | 2-5 | $ | 1,483 | $ | 1,395 | |||||
Machinery and equipment | 5 | 112 | 117 | |||||||
Furniture and fixtures | 2-5 | 2,987 | 2,629 | |||||||
Leasehold improvements | 5 | 240 | 240 | |||||||
Total property and equipment | 4,822 | 4,381 | ||||||||
Less: Accumulated depreciation | (3,148 | ) | (2,421 | ) | ||||||
Property and equipment, net | $ | 1,674 | $ | 1,960 |
December 31, | ||||||||
2017 | 2016 | |||||||
Inventory related obligations | $ | 12,906 | $ | 16,352 | ||||
Taxes payable | 48,733 | 5,040 | ||||||
Retentions and development payable | 12,025 | 8,506 | ||||||
Accrued compensation, bonuses and benefits | 14,462 | 7,800 | ||||||
Accrued interest | 2,096 | 1,645 | ||||||
Warranty reserve | 2,450 | 1,600 | ||||||
Other | 10,159 | 5,446 | ||||||
Total accrued expenses and other liabilities | $ | 102,831 | $ | 46,389 |
December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
Warranty reserves, beginning of period | $ | 1,600 | $ | 1,325 | $ | 900 | ||||||
Warranty provision | 4,999 | 3,084 | 1,608 | |||||||||
Warranty expenditures | (4,149 | ) | (2,809 | ) | (1,183 | ) | ||||||
Warranty reserves, end of period | $ | 2,450 | $ | 1,600 | $ | 1,325 |
December 31, | ||||||||
2017 | 2016 | |||||||
Notes payable under revolving credit facility ($600.0 million revolving credit facility at December 31, 2017) maturing on May 31, 2020; interest paid monthly at LIBOR plus 3.15%; net of approximately $5.3 million and $2.7 million of debt issuance costs at December 31, 2017 and December 31, 2016, respectively | $ | 394,714 | $ | 322,253 | ||||
4.25% Convertible Notes due November 15, 2019; interest paid semi-annually at 4.25%; net of debt issuance costs of approximately $1.0 million and $1.6 million at December 31, 2017 and December 31, 2016, respectively; and approximately $3.5 million and $5.2 million in unamortized discount at December 31, 2017 and December 31, 2016, respectively | 80,481 | 78,230 | ||||||
Total notes payable | $ | 475,195 | $ | 400,483 |
Amount | ||||
2018 (a) | $ | 85,000 | ||
2019 | — | |||
2020 | 400,000 | |||
2021 | — | |||
2022 | — | |||
Total notes payable | 485,000 | |||
Less: Convertible Notes discount | (3,505 | ) | ||
Less: Debt issuance costs | (6,300 | ) | ||
Net notes payable | $ | 475,195 |
(a) | Represents $85.0 million aggregate principal amount of our Convertible Notes which mature on November 15, 2019. Notices from holders of $15.0 million principal amount of Convertible Notes were delivered to us during the period October 1, 2017 through December 31, 2017 (inclusive). The conversion of the Convertible Notes were settled in January and February 2018 resulting in the issuance of 486,679 shares of our common stock and the payment of $15.0 million for the principal amount of such Convertible Notes. At December 31, 2017, based on the terms of the Convertible Notes, the holders may continue to elect to convert all or a portion of the Convertible Notes owned during the period January 1, 2018 through March 31, 2018 (inclusive), therefore the Convertible Notes are reflected above with a maturity date in 2018. |
Year Ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
Interest incurred | $ | 24,275 | $ | 18,457 | $ | 14,198 | ||||||
Less: Amounts capitalized | (24,275 | ) | (18,457 | ) | (14,198 | ) | ||||||
Interest expense | $ | — | $ | — | $ | — | ||||||
Cash paid for interest | $ | 19,704 | $ | 14,339 | $ | 9,766 |
Year ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
Current: | ||||||||||||
Federal | $ | 55,218 | $ | 37,751 | $ | 24,990 | ||||||
State | 4,970 | 3,452 | 2,419 | |||||||||
Current tax provision | 60,188 | 41,203 | 27,409 | |||||||||
Deferred: | ||||||||||||
Federal | (1,918 | ) | (2,451 | ) | 33 | |||||||
State | (174 | ) | (111 | ) | 8 | |||||||
Deferred tax provision (benefit) | (2,092 | ) | (2,562 | ) | 41 | |||||||
Total income tax provision | $ | 58,096 | $ | 38,641 | $ | 27,450 |
Year Ended December 31, | |||||||||||||||||||||
2017 | 2016 | 2015 | |||||||||||||||||||
Tax at federal statutory rate | $ | 60,008 | 35.0 | % | $ | 39,791 | 35.0 | % | $ | 28,098 | 35.0 | % | |||||||||
State income taxes (net of federal benefit) | 3,060 | 1.8 | 2,143 | 1.9 | 1,568 | 2.0 | |||||||||||||||
Domestic production activity deduction | (5,461 | ) | (3.2 | ) | (3,727 | ) | (3.3 | ) | (2,462 | ) | (3.1 | ) | |||||||||
Non deductible expenses and other | (657 | ) | (0.4 | ) | 435 | 0.4 | 237 | 0.3 | |||||||||||||
Change in tax rates - deferred taxes | 1,146 | 0.7 | (1 | ) | — | 9 | — | ||||||||||||||
Tax at effective rate | $ | 58,096 | 33.9 | % | $ | 38,641 | 34.0 | % | $ | 27,450 | 34.2 | % |
December 31 | ||||||||
2017 | 2016 | |||||||
Deferred tax assets: | ||||||||
Accruals and reserves | $ | 2,756 | $ | 2,422 | ||||
Inventory | 475 | 532 | ||||||
Stock-based compensation | 1,048 | 392 | ||||||
Deferred rent and loan costs | 38 | 105 | ||||||
Total deferred tax assets | 4,317 | 3,451 | ||||||
Deferred tax liabilities: | ||||||||
Discount on Convertible Notes | (801 | ) | (1,897 | ) | ||||
Prepaids | (1,035 | ) | (911 | ) | ||||
Tax depreciation in excess of book depreciation | (177 | ) | (396 | ) | ||||
Goodwill and other assets amortized for tax | (376 | ) | (411 | ) | ||||
Total deferred tax liabilities | $ | (2,389 | ) | $ | (3,615 | ) | ||
Total net deferred tax assets (liabilities) | $ | 1,928 | $ | (164 | ) |
For the Year Ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
Numerator (in thousands): | ||||||||||||
Net income for basic earnings per share | $ | 113,306 | $ | 75,031 | $ | 52,830 | ||||||
Effect of dilutive securities: | ||||||||||||
Interest expense associated with Convertible Notes, net of taxes | — | — | 190 | |||||||||
Numerator for diluted earnings per share | $ | 113,306 | $ | 75,031 | $ | 53,020 | ||||||
Denominator: | ||||||||||||
Basic weighted average shares outstanding | 21,604,932 | 20,798,333 | 19,939,761 | |||||||||
Effect of dilutive securities: | ||||||||||||
Convertible Notes - treasury stock method | 1,975,648 | 1,044,519 | 463,609 | |||||||||
Convertible Notes - if-converted method | — | — | 1,298,871 | |||||||||
Stock-based compensation units | 352,542 | 181,239 | 38,478 | |||||||||
Diluted weighted average shares outstanding | 23,933,122 | 22,024,091 | 21,740,719 | |||||||||
Basic earnings per share | $ | 5.24 | $ | 3.61 | $ | 2.65 | ||||||
Diluted earnings per share | $ | 4.73 | $ | 3.41 | $ | 2.44 | ||||||
Antidilutive non-vested restricted stock units excluded from calculation of diluted earnings per share | 16,473 | 13,613 | 23,201 |
Shares | Weighted Average Grant Date Fair Value | ||||||
Balance at December 31, 2014 | 102,786 | $ | 15.43 | ||||
Granted | 85,184 | $ | 17.40 | ||||
Vested | (75,687 | ) | $ | 16.12 | |||
Forfeited | (4,469 | ) | $ | 15.85 | |||
Balance at December 31, 2015 | 107,814 | $ | 16.48 | ||||
Granted | 62,453 | $ | 23.66 | ||||
Vested | (29,010 | ) | $ | 14.73 | |||
Forfeited | (7,404 | ) | $ | 17.97 | |||
Balance at December 31, 2016 | 133,853 | $ | 20.13 | ||||
Granted | 76,586 | $ | 36.83 | ||||
Vested | (25,803 | ) | $ | 18.45 | |||
Forfeited | (9,536 | ) | $ | 20.48 | |||
Balance at December 31, 2017 | 175,100 | $ | 27.66 |
Period Granted | Performance Period | Target PSUs Outstanding at December 31, 2016 | Target PSUs Granted | Target PSUs Vested | Target PSUs Forfeited | Target PSUs Outstanding at December 31, 2017 | Weighted Average Grant Date Fair Value | ||||||||||||||
2014 | 2014 - 2016 | 59,980 | — | (59,980 | ) | — | — | $ | 17.09 | ||||||||||||
2015 | 2015 - 2017 | 120,971 | — | — | — | 120,971 | $ | 13.34 | |||||||||||||
2016 | 2016 - 2018 | 87,605 | — | — | — | 87,605 | $ | 21.79 | |||||||||||||
2017 | 2017 - 2019 | — | 111,035 | — | — | 111,035 | $ | 31.64 | |||||||||||||
Total | 268,556 | 111,035 | (59,980 | ) | — | 319,611 |
December 31, 2017 | December 31, 2016 | |||||||||||||||||
Fair Value Hierarchy | Carrying Value | Estimated Fair Value (1) | Carrying Value | Estimated Fair Value(1) | ||||||||||||||
Convertible Notes | Level 2 | $ | 80,481 | $ | 81,523 | $ | 78,230 | $ | 79,514 |
(1) | Excludes the fair value of the equity component of the Convertible Notes. See Note 6 within the Convertible Notes section for further details. |
December 31, | ||||||||
2017 | 2016 | |||||||
Land deposits and option payments | $ | 17,761 | $ | 9,954 | ||||
Commitments under the land purchase contracts if the purchases are consummated | $ | 460,714 | $ | 234,198 | ||||
Lots under land purchase contracts | 18,758 | 8,462 |
2018 | $ | 778 | ||
2019 | 596 | |||
2020 | 555 | |||
2021 | 567 | |||
2022 | 577 | |||
Thereafter | 3,428 | |||
Total | $ | 6,501 |
For the Year Ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
Revenues: | ||||||||||||
Central | $ | 532,447 | $ | 429,505 | $ | 350,674 | ||||||
Southwest | 243,037 | 165,017 | 109,878 | |||||||||
Southeast | 183,422 | 111,651 | 95,949 | |||||||||
Florida | 199,733 | 115,276 | 73,735 | |||||||||
Northwest | 98,514 | 16,871 | — | |||||||||
Midwest | 807 | — | — | |||||||||
Total home sales revenues | $ | 1,257,960 | $ | 838,320 | $ | 630,236 | ||||||
Net income (loss) before income taxes: | ||||||||||||
Central | $ | 90,048 | $ | 73,026 | $ | 57,326 | ||||||
Southwest | 28,017 | 13,855 | 10,410 | |||||||||
Southeast | 19,959 | 15,244 | 7,966 | |||||||||
Florida | 25,687 | 14,471 | 7,560 | |||||||||
Northwest | 12,079 | (383 | ) | (521 | ) | |||||||
Midwest | (915 | ) | — | — | ||||||||
Corporate (1) | (3,473 | ) | (2,541 | ) | (2,461 | ) | ||||||
Total net income (loss) before income taxes | $ | 171,402 | $ | 113,672 | $ | 80,280 |
December 31, | |||||||
Assets: | 2017 | 2016 | |||||
Central | $ | 439,833 | $ | 327,983 | |||
Southwest | 175,786 | 149,963 | |||||
Southeast | 155,928 | 110,628 | |||||
Florida | 119,257 | 94,818 | |||||
Northwest | 80,350 | 67,284 | |||||
Midwest | 15,066 | — | |||||
Corporate (1) | 93,672 | 63,838 | |||||
Total assets | $ | 1,079,892 | $ | 814,514 |
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||||
2017 | 2017 | 2017 | 2017 | |||||||||||||
Total home sales revenues | $ | 162,911 | $ | 324,178 | $ | 365,896 | $ | 404,975 | ||||||||
Gross margin | 43,499 | 86,348 | 91,896 | 98,677 | ||||||||||||
Income before income taxes | 16,842 | 48,642 | 50,877 | 55,041 | ||||||||||||
Net income | 11,780 | 32,199 | 33,687 | 35,640 | ||||||||||||
Basic earnings per share | 0.55 | 1.49 | 1.55 | 1.65 | ||||||||||||
Diluted earnings per share | 0.52 | 1.39 | 1.40 | 1.43 |
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||||
2016 | 2016 | 2016 | 2016 | |||||||||||||
Total home sales revenues | $ | 162,463 | $ | 222,723 | $ | 216,304 | $ | 236,830 | ||||||||
Gross margin | 41,369 | 59,095 | 56,821 | 64,328 | ||||||||||||
Income before income taxes | 17,829 | 31,408 | 29,488 | 34,947 | ||||||||||||
Net income | 11,700 | 20,659 | 19,467 | 23,205 | ||||||||||||
Basic earnings per share | 0.58 | 1.01 | 0.92 | 1.09 | ||||||||||||
Diluted earnings per share | 0.57 | 0.96 | 0.86 | 1.01 |
(1) | The following Consolidated Financial Statements as set forth in Item 8 of this report are filed herein. |
Consolidated Financial Statements |
(2) | Financial Statement Schedules |
(3) | Exhibits |
Exhibit No. | Description | |
3.1 | ||
3.2 | ||
4.1 | ||
10.1 | ||
10.2 | ||
10.3 | ||
10.4* | ||
10.5* | ||
21.1* | ||
23.1* | ||
31.1* | ||
31.2* | ||
32.1* | ||
32.2* | ||
101.INS† | XBRL Instance Document. | |
101.SCH† | XBRL Taxonomy Extension Schema Document. | |
101.CAL† | XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.DEF† | XBRL Taxonomy Extension Definition Linkbase Document. | |
101.LAB† | XBRL Taxonomy Extension Label Linkbase Document. | |
101.PRE† | XBRL Taxonomy Extension Presentation Linkbase Document. |
* | Filed herewith. |
† | XBRL information is deemed not filed or a part of a registration statement or Annual Report for purposes of Sections 11 and 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under such sections. |
LGI Homes, Inc. | ||
Date: | February 27, 2018 | /s/ Eric Lipar |
Eric Lipar | ||
Chief Executive Officer and Chairman of the Board |
Signature | Title | Date | ||
/s/ Eric Lipar | Chief Executive Officer and Chairman of the Board | February 27, 2018 | ||
Eric T. Lipar | (Principal Executive Officer) | |||
/s/ Charles Merdian | Chief Financial Officer and Treasurer | February 27, 2018 | ||
Charles Merdian | (Principal Financial and Accounting Officer) | |||
/s/ Ryan Edone | Director | February 27, 2018 | ||
Ryan Edone | ||||
/s/ Duncan Gage | Director | February 27, 2018 | ||
Duncan Gage | ||||
/s/ Bryan Sansbury | Director | February 27, 2018 | ||
Bryan Sansbury | ||||
/s/ Steven Smith | Director | February 27, 2018 | ||
Steven Smith | ||||
/s/ Robert Vaharadian | Director | February 27, 2018 | ||
Robert Vaharadian |
(1) | Registration Statement (Amendment No. 2 to Form S-3 No. 333-205492) of LGI Homes, Inc., |
(2) | Registration Statement (Form S-8 No. 333-217811) pertaining to the Amended and Restated LGI Homes, Inc. 2013 Equity Incentive Plan, and |
(3) | Registration Statement (Form S-8 No. 333-211843) pertaining to the LGI Homes, Inc. 2016 Employee Stock Purchase Plan; |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Annual Report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this Annual Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Annual Report based on such evaluation; and |
d. | Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. |
By: | /s/ Eric Lipar |
Eric Lipar | |
Chief Executive Officer and Chairman of the Board | |
LGI Homes, Inc. |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Annual Report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this Annual Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Annual Report based on such evaluation; and |
d. | Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting. |
By: | /s/ Charles Merdian |
Charles Merdian | |
Chief Financial Officer, Secretary and Treasurer | |
LGI Homes, Inc. |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
February 27, 2018 | /s/ Eric Lipar |
Eric Lipar | |
Chief Executive Officer and Chairman of the Board | |
LGI Homes, Inc. |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
February 27, 2018 | /s/ Charles Merdian |
Charles Merdian | |
Chief Financial Officer, Secretary and Treasurer | |
LGI Homes, Inc. |
Document and Entity Information - USD ($) |
12 Months Ended | ||
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Dec. 31, 2017 |
Feb. 23, 2018 |
Jun. 30, 2017 |
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Document Information [Line Items] | |||
Entity Registrant Name | LGI HOMES, INC. | ||
Entity Central Index Key | 0001580670 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2017 | ||
Document Fiscal Period Focus (Q1,Q2,Q3,FY) | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 22,332,259 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 750,927,154 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Dec. 31, 2017 |
Dec. 31, 2016 |
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Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 22,845,580 | 22,311,310 |
Common stock, shares outstanding | 21,845,580 | 21,311,310 |
Treasury stock, shares | 1,000,000 | 1,000,000 |
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands |
12 Months Ended | ||
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Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
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Income Statement [Abstract] | |||
Home sales revenues | $ 1,257,960 | $ 838,320 | $ 630,236 |
Cost of sales | 937,540 | 616,707 | 463,304 |
Selling expenses | 94,957 | 66,984 | 52,998 |
General and administrative | 55,662 | 43,158 | 34,260 |
Operating income | 169,801 | 111,471 | 79,674 |
Other income, net | (1,601) | (2,201) | (606) |
Net income before income taxes | 171,402 | 113,672 | 80,280 |
Income tax provision | 58,096 | 38,641 | 27,450 |
Net income | $ 113,306 | $ 75,031 | $ 52,830 |
Earnings per share: | |||
Basic earnings per share (in dollars per share) | $ 5.24 | $ 3.61 | $ 2.65 |
Earnings Per Share, Diluted | $ 4.73 | $ 3.41 | $ 2.44 |
Weighted average shares outstanding: | |||
Basic (in shares) | 21,604,932 | 20,798,333 | 19,939,761 |
Diluted (in shares) | 23,933,122 | 22,024,091 | 21,740,719 |
Organization and Business |
12 Months Ended |
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Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | ORGANIZATION AND BUSINESS Organization and Description of the Business LGI Homes, Inc. a Delaware corporation (the “Company”, “us,” “we,” or “our,”), was organized on July 9, 2013 as a holding company for the purposes of facilitating the initial public offering (the “IPO”) of its common stock in November 2013. Headquartered in the Woodlands, Texas, we engage in the design, construction and sale of homes in Texas, Arizona, Florida, Georgia, New Mexico, Colorado, North Carolina, South Carolina, Washington, Tennessee, and Minnesota. |
Summary of Significant Accounting Policies |
12 Months Ended |
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Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) and include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates, and these differences could have a significant impact on the financial statements. The significant accounting estimates include real estate inventory and cost of sales, impairment of real estate inventory and property and equipment, goodwill, warranty reserves, the fair value of the convertible debt, loss contingencies, incentive compensation expense, and income taxes. Cash and Cash Equivalents and Concentration of Credit Risk Cash and cash equivalents are defined as cash on hand, demand deposits with financial institutions, and short-term liquid investments with an initial maturity date of less than three months. Our cash in demand deposit accounts may exceed federally insured limits and could be negatively impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. To date, we have experienced no loss or diminished access to cash in our demand deposit accounts. Accounts Receivable Accounts receivable consist primarily of proceeds due from title companies for sales closed prior to period end and are generally collected within a few days from closing. Real Estate Inventory Inventory consists of land, land under development, finished lots, information centers, homes in progress, and completed homes. Inventory is stated at cost unless the carrying amount is determined not to be recoverable, in which case the affected inventory is written down to fair value. Land, development and other project costs, including interest and property taxes incurred during development and home construction and net of expected reimbursements of development costs, are capitalized to real estate inventory. Land development and other common costs that benefit the entire community, including field construction supervision and related direct overhead, are allocated to individual lots or homes, as appropriate. The costs of lots are transferred to homes in progress when home construction begins. Home construction costs and related carrying charges are allocated to the cost of individual homes using the specific identification method. Costs that are not specifically identifiable to a home are allocated on a pro rata basis, which we believe approximates the costs that would be determined using an allocation method based on relative sales values since the individual lots or homes within a community are similar in value. Inventory costs for completed homes are expensed to cost of sales as homes are closed. Changes to estimated total development costs subsequent to initial home closings in a community are generally allocated to the remaining unsold lots and homes in the community on a pro rata basis. The life cycle of a community generally ranges from two to five years, commencing with the acquisition of land, continuing through the land development phase, and concluding with the construction and sale of homes. A constructed home is used as the community information center during the life of the community and then sold. Actual individual community lives will vary based on the size of the community, the sales absorption rate, and whether the property was purchased as raw land or finished lots. In accordance with the ASC Topic 360, Property, Plant, and Equipment, real estate inventory is evaluated for indicators of impairment by each community during each reporting period. In conducting its review for indicators of impairment on a community level, management evaluates, among other things, the margins on homes that have been closed, communities with slow moving inventory, projected margins on future home sales over the life of the community, and the estimated fair value of the land. For individual communities with indicators of impairment, additional analysis is performed to estimate the community’s undiscounted future cash flows. If the estimated undiscounted future cash flows are greater than the carrying value of the community group of assets, no impairment adjustment is required. If the undiscounted cash flows are less than the community’s carrying value, the asset group is impaired and is written down to its fair value. We estimate the fair value of communities using a discounted cash flow model. As of December 31, 2017 and 2016, the real estate inventory is stated at cost; there were no inventory impairment charges recorded during the years ended December 31, 2017, 2016 and 2015. Capitalized Interest Interest and other financing costs are capitalized as cost of inventory during community development and home construction activities, in accordance with ASC Topic 835, Interest and expensed in cost of sales as homes in the community are closed. To the extent the debt exceeds qualified assets, a portion of the interest incurred is expensed. Pre-Acquisition Costs and Deposits Amounts paid for land options, deposits on land purchase contracts, and other pre-acquisition costs are capitalized and classified as deposits to purchase. Upon execution of the purchase, these deposits are applied to the acquisition price of the land and recorded as a cost component of the land in real estate inventory. To the extent that any deposits are nonrefundable and the associated land acquisition process is terminated or no longer determined probable, the deposit and related pre-acquisition costs are charged to other income, net. Management reviews the likelihood of the acquisition of contracted lots in conjunction with its periodic real estate impairment analysis. Under ASC Topic 810, Consolidation (“ASC 810”), a nonrefundable deposit paid to an entity is deemed to be a variable interest that will absorb some or all of the entity’s expected losses if they occur. Non-refundable land purchase and lot option deposits generally represent our maximum exposure 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 close. Such costs are classified as preacquisition costs, which we would have to absorb should the option not be exercised. Therefore, whenever we enter into a land option or purchase contract with an entity and make a nonrefundable deposit, we may have a variable interest in a variable interest entity (“VIE”). In accordance with ASC 810, we perform ongoing reassessments of whether we are the primary beneficiary of a VIE and would consolidate the VIE if we are deemed to be the primary beneficiary. As of December 31, 2017 and 2016, we were not deemed to be the primary beneficiary for any VIEs associated with non-refundable land deposits. Deferred Loan Costs Deferred loan costs represent debt issuance costs related to a recognized debt liability and are presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. Other Assets Other assets consist primarily of prepaid insurance, security deposits, and prepaid expenses. Our prepaid expenses were $7.5 million and $3.0 million as of December 31, 2017 and 2016, respectively. Property and Equipment Property, equipment and leasehold improvements are stated at cost, less accumulated depreciation. Depreciation expense is recorded in general and administrative expenses. Upon sale or retirement, the costs and related accumulated depreciation are eliminated from the respective accounts and any resulting gain or loss is included in other income, net. Depreciation is generally computed using the straight-line method over the estimated useful lives of the assets, ranging from two to five years for property and equipment. Leasehold improvements are depreciated over the shorter of the asset life or the term of the lease. Maintenance and repair costs are expensed as incurred. Impairments of long-lived assets are determined periodically when indicators of impairment are present. If such indicators are present, the determination of the amount of impairment is based on judgments as to the future undiscounted operating cash flows to be generated from these assets throughout the remaining estimated useful lives. If these undiscounted cash flows are less than the carrying amount of the related asset, impairment is recognized for the excess of the carrying value over its fair value. There were no impairments of property, equipment and leasehold improvements recorded during the years ended December 31, 2017, 2016 and 2015. Goodwill and Intangible Assets The excess of the purchase price of a business acquisition over the net fair value of assets acquired and liabilities assumed is capitalized as goodwill in accordance with ASC Topic 805, Business Combinations. Goodwill and intangible assets that do not have finite lives are not amortized, but are assessed for impairment at least annually or more frequently if certain impairment indicators are present. The $12.0 million of goodwill is related to the reorganization transactions completed in connection with the initial public offering of our common stock in November 2013. In applying the goodwill impairment test, we have the option to perform a qualitative test (also known as “Step 0”) or a two-step quantitative test (consisting of “Step 1” and “Step 2”). Under the Step 0 test, we first assess qualitative factors to determine whether it is more likely than not that the fair value of the reporting units is less than their carrying value. Qualitative factors may include, but are not limited to, economic conditions, industry and market considerations, cost factors, overall financial performance of the reporting unit and other entity and reporting unit specific events. If after assessing these qualitative factors, we determine it is “more-likely-than-not” that the fair value of the reporting unit is less than the carrying value, then performing the two-step quantitative test is necessary. During 2017, we performed a Step 0 analysis and determined that it is not “more likely than not” that the fair values of the reporting units were less than their carrying amounts. During 2016 and 2015, we performed the two-step quantitative impairment test. No goodwill impairment charges were recorded in 2017, 2016 and 2015. Warranty Reserves Future direct warranty costs are accrued and charged to cost of sales in the period when the related home is closed. Our warranty liability is based upon historical warranty cost experience and is adjusted as appropriate to reflect qualitative risks associated with the types of homes built, the geographic areas in which they are built, and potential impacts of our continued expansion. Warranty reserves are reviewed quarterly to assess the reasonableness and adequacy and adjusted, as needed, to reflect changes in trends and historical data as information becomes available. Customer Deposits Customer deposits are received upon signing a purchase contract and are generally $1,000 or less. Deposits are generally refundable if the customer is unable to obtain financing. Forfeited buyer deposits related to home sales are recognized in other income in the period in which it is determined that the buyer will not complete the purchase of the property and the deposit is nonrefundable to the buyer. Home Sales In accordance with ASC Topic 360—20, Real Estate Sales, revenues from home sales are recorded at the time each home sale is closed, title and possession are transferred to the buyer, and we have no significant continuing involvement with the home. Home sales proceeds are generally received from the title company within a few days after closing. Home sales are reported net of sales discounts and incentives granted to home buyers, which are primarily seller-paid closing costs. Cost of Sales As discussed under Real Estate Inventory above, cost of sales for homes closed include the construction costs of each home and allocable land acquisition and land development costs, capitalized interest, and other related common costs (both incurred and estimated to be incurred). Selling and Commission Costs Sales commissions are paid and expensed based on homes closed. Other selling costs are expensed in the period incurred. Advertising Costs Advertising and direct mail costs are expensed as incurred. Advertising and direct mail costs were $15.2 million, $11.3 million and $9.3 million for the years ended December 31, 2017, 2016, and 2015, respectively. Income Taxes We are a taxable entity subject to federal and state taxes. We utilize the liability method of accounting for income taxes. Under the liability method, deferred tax assets and liabilities are recognized using enacted tax rates for the effect of temporary differences between the book and tax bases of recorded assets and liabilities. Changes in tax rate are recognized in the year of enactment. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion or all of the net deferred tax assets will not be realized. Our ability to realize deferred tax assets is assessed throughout the year and a valuation allowance is established, if required. We recognize the impact of a tax position only if it is more likely than not to be sustained upon examination based on the technical merits of the position. We recognize potential interest and penalties related to uncertain tax positions in income tax expense. We file income tax returns in the U.S. federal jurisdiction and in various states and we do not have any unrecognized tax benefits. We are not presently under exam for income tax by any taxing jurisdiction, and no longer remain subject to exam for years before 2014 (2013 for Texas). Earnings Per Share Basic earnings per share is based on the weighted average number of shares of common stock outstanding. Diluted earnings per share is based on the weighted average number of shares of common stock and dilutive securities outstanding. Diluted earnings per share gives effect to all dilutive potential shares outstanding during the period using the treasury stock method and for our 4.25% Convertible Notes due 2019 (the “Convertible Notes”) using the if-converted method through April 30, 2015. On April 30, 2015, our stockholders approved the flexible settlement provisions of the Convertible Notes at our 2015 Annual Meeting of Stockholders which allows us to settle the conversion of the Convertible Notes using any combination of cash and shares of our common stock. Therefore, subsequent to April 30, 2015, the treasury stock method is used to calculate the dilutive effect of the Convertible Notes. Diluted earnings per share excludes all dilutive potential shares of common stock if their effect is antidilutive. Stock-Based Compensation Compensation costs for non-performance-based restricted stock awards are measured using the closing price of our common stock on the date of grant and are expensed on a straight-line basis over the requisite service period of the award. Compensation costs for performance-based restricted stock awards contain a market condition. These costs are measured using the derived grant date fair value, based on a third party valuation analysis, but are expensed in accordance with ASC 718-10-25-20, Compensation - Stock Compensation, which requires an assessment of probability of attainment of the performance target. Once the performance target outcome is determined to be probable, the cumulative expense is adjusted, as needed, to recognize compensation expense on a straight-line basis over the award’s requisite service period. Recently Adopted Accounting Standards Effective January 1, 2017, we adopted the Financial Accounting Standards Board (the “FASB”) Accounting Standards Update (“ASU”) No. 2016-09, “Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”), which includes multiple amendments intended to simplify aspects of share-based payment accounting and how they are presented in the financial statements. Under previous guidance, excess tax benefits and deficiencies from stock-based compensation arrangements were recorded in equity when the awards vested or were settled. ASU 2016-09 requires prospective recognition of excess tax benefits and deficiencies in the statement of operations, resulting in $1.0 million impact to the recognition of excess tax benefits for the year ended December 31, 2017. In addition, under ASU 2016-09, excess income tax benefits from stock-based compensation arrangements are classified as cash flow from operations, rather than as cash flow from financing activities. We have elected to apply the cash flow classification guidance of ASU 2016-09 prospectively, resulting in $1.0 million impact to operating cash flow for the year ended December 31, 2017. In recording share-based compensation expense, ASU 2016-09 allows companies to make a policy election as to whether they will include an estimate of awards expected to be forfeited or whether they will account for forfeitures as they occur. We have elected to continue to account for forfeitures as they occur, as forfeitures have historically been immaterial. Recently Issued Accounting Pronouncements In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash” (“ ASU 2016-18”), which provides guidance on the presentation of restricted cash or restricted cash equivalents in the statement of cash flows by requiring it be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows, thereby reducing previous diversity in practice. This amendment will be effective for us in our fiscal year beginning January 1, 2018. We do not expect the adoption of ASU 2016-18 will have a material effect on our consolidated statement of cash flows or disclosures. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments,” (“ASU 2016-15”), which addresses specific classification issues and is intended to reduce diversity in current practice regarding the manner in which certain cash receipts and cash payments are presented and classified in the cash flow statement. ASU 2016-15 will be effective for annual reporting periods beginning after December 15, 2017, and early adoption is permitted. We do not expect the adoption of ASU 2016-15 will have a material effect on our consolidated financial statements and disclosures. In February 2016, the FASB issued ASU No. 2016-02, “Leases,” (“ASU 2016-02”), which amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets. Topic 842 “Leases,” will be effective for annual reporting periods beginning after December 15, 2018, and early adoption is permitted. ASU 2016-02 requires a modified retrospective transition approach. As part of our assessment work-to-date, we have formed an implementation work team and we are currently evaluating the impact that the adoption of ASU 2016-02 will have on our consolidated financial statements and disclosures. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”), which provides guidance for revenue recognition. ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets and supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition,” and most industry-specific guidance. This ASU also supersedes some cost guidance included in Subtopic 605-35, “Revenue Recognition-Construction-Type and Production-Type Contracts.” ASU 2014-09’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which a company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under today’s guidance, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 and related FASB updates are effective for us beginning January 1, 2018 and, at that time, we expect to adopt the new standard under the modified retrospective approach. We have completed our evaluation on the impact that the adoption of ASU 2014-09 will have on our consolidated financial statements and concluded that the overall impact is not material to our consolidated financial statements. |
Real Estate Inventory |
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Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate Inventory | REAL ESTATE INVENTORY Our real estate inventory consists of the following (in thousands):
Interest and financing costs incurred under our debt obligations, as more fully discussed in Note 6, are capitalized to qualifying real estate projects under development and homes under construction. |
Property and Equipment |
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Property and Equipment | PROPERTY AND EQUIPMENT Property and equipment consist of the following (in thousands):
Depreciation expense incurred for the years ended December 31, 2017, 2016 and 2015 was $0.8 million, $0.9 million and $0.6 million, respectively. |
Accrued Expenses and Other Liabilities |
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Accrued Expenses and Other Liabilities | ACCRUED EXPENSES AND OTHER LIABILITIES Accrued and other liabilities consist of the following (in thousands):
Inventory Related Obligations We own lots in certain communities in Arizona, California, Florida, and Texas that have Community Development Districts (“CDD”) or similar utility and infrastructure development special assessment programs that allocate a fixed amount of debt service associated with development activities to each lot. This obligation for infrastructure development is attached to the land, is typically payable over a 30 year period, and is ultimately assumed by the homebuyer when home sales are closed. Such obligations represent a non-cash cost of the lots. At December 31, 2017 and 2016, we had CDD and other utility development obligations of approximately $12.9 million and $16.4 million, respectively. Estimated Warranty Reserve We typically provide homebuyers with a one-year warranty on the house and a ten-year limited warranty for major defects in structural elements such as framing components and foundation systems. Changes to our warranty accrual are as follows (in thousands):
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Notes Payable |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes Payable | NOTES PAYABLE Revolving Credit Agreement In May 2016, we entered into an Amended and Restated Credit Agreement (the “2016 Credit Agreement”) which provided for a revolving credit facility up to $400.0 million. On May 25, 2017, we entered into that certain Second Amended and Restated Credit Agreement (the “Credit Agreement”) with several financial institutions, and Wells Fargo Bank, National Association, as administrative agent. The Credit Agreement has substantially similar terms, provisions and participating lenders as the 2016 Credit Agreement but provides for a $600.0 million revolving credit facility, which can be increased by our request up to $650.0 million, subject to the terms and conditions of the Credit Agreement. The Credit Agreement matures on May 31, 2020. Prior to each annual anniversary of the Credit Agreement, we may request a one-year extension of the maturity date. The Credit Agreement is guaranteed by each of our subsidiaries that have gross assets equal to or greater than $0.5 million. Prior to nonperformance of certain financial covenants under the Credit Agreement, the revolving credit facility is unsecured. As of December 31, 2017, the borrowing base under the Credit Agreement was $568.0 million, of which borrowings of $400.0 million were outstanding, $6.7 million represented letter of credit assurances, and $161.3 million was available to borrow. Interest is paid monthly on borrowings under the Credit Agreement at LIBOR plus 3.15%. The Credit Agreement applicable margin for LIBOR loans ranges from 3.00% to 3.50% based on our leverage ratio. At December 31, 2017, LIBOR was 1.49%. The Credit Agreement contains various financial covenants, including a tangible net worth ratio, a leverage ratio, a minimum liquidity amount, and an EBITDA to interest expense ratio. The Credit Agreement contains various covenants that, among other restrictions, limit the amount of our additional debt and our ability to make certain investments. At December 31, 2017, we were in compliance with all of the covenants contained in the Credit Agreement. Convertible Notes We issued $85.0 million aggregate principal amount of our 4.25% Convertible Notes due 2019 (the “Convertible Notes”) in November 2014. The Convertible Notes mature on November 15, 2019. Interest on the Convertible Notes is payable semiannually in May and November at a rate of 4.25%. Prior to May 15, 2019, the Convertible Notes are convertible only upon satisfaction of any of the specified conversion events. On or after May 15, 2019, the holders of the Convertible Notes can convert their Convertible Notes at any time at their option. Upon the election of a holder of Convertible Notes to convert their Convertible Notes, we may settle the conversion of the Convertible Notes using any combination of cash and shares of our common stock. It is our intent and belief that we have the ability, to settle in cash the conversion of any Convertible Notes that the holders elect to convert. The initial conversion rate of the Convertible Notes is 46.4792 shares of our common stock for each $1,000 principal amount of Convertible Notes, which represents an initial conversion price of approximately $21.52 per share of our common stock. The conversion rate is subject to adjustments upon the occurrence of certain specified events. During the fourth quarter of 2017, the Convertible Notes were convertible because the closing sale price of our common stock was greater than 130% of the $21.52 conversion price on at least 20 trading days during the 30 trading day period ending on September 30, 2017. As a result, the holders of the Convertible Notes could elect to convert some or all of their Convertible Notes in accordance with the terms and provisions of the indenture governing the Convertible Notes during the conversion period of October 1, 2017 through December 31, 2017 (inclusive). During the fourth quarter of 2017, we received notice from holders of $15.0 million principal amount of the Convertible Notes to convert their Convertible Notes. The conversion of such Convertible Notes were settled in January and February 2018 resulting in the issuance of 486,679 shares of our common stock, and the payment of $15.0 million for the principal amount of such Convertible Notes. During the first quarter of 2018, the Convertible Notes continue to be convertible. As of the date of the filing of this Annual Report on Form 10-K, no other conversion notices have been received by us. When the Convertible Notes were issued, the fair value of $76.5 million were recorded to notes payable. $5.5 million of the remaining proceeds was recorded to additional paid in capital to reflect the equity component and the remaining $3.0 million were recorded as a deferred tax liability. The carrying amount of the Convertible Notes is being accreted to face value over the term to maturity. Notes payable consist of the following (in thousands):
As of December 31, 2017, the annual aggregate maturities of our notes payable during each of the next five fiscal years are as follows (in thousands):
Capitalized Interest Interest activity, including other financing costs, for notes payable for the periods presented is as follows (in thousands):
Included in interest incurred was amortization of deferred financing costs for notes payable and amortization of Convertible Notes discount of $4.1 million, $3.6 million, and $3.9 million for the years ended December 31, 2017, 2016, and 2015 respectively. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | INCOME TAXES All Company operations are domestic. The provision for income taxes consisted of the following (in thousands):
Income taxes paid were $16.8 million, $42.4 million and $23.7 million for the years ended December 31, 2017, 2016 and 2015, respectively. A reconciliation of the provision for income taxes and the amount computed by applying the statutory federal income tax rate of 35% to income before provision for income taxes for the years ended December 31, 2017, 2016 and 2015 (in thousands):
The components of net deferred tax assets and liabilities at December 31, 2017 and 2016, are as follows (in thousands):
The Company has not recorded any accruals related to uncertain tax positions as of December 31, 2017 and 2016, respectively. We file U.S. and state income tax returns in jurisdictions with varying statutes of limitations. The statute of limitations with regards to our federal income tax filings is three years. The statute of limitations for our state tax jurisdictions is three to four years depending on the jurisdiction. On December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act (the “Act”), reducing the U.S. federal corporate income tax rate for tax years beginning after December 31, 2017, among other changes. Under ASC 740, Income Taxes (“ASC 740”), the effects of new legislation are recognized in the period that includes the date of enactment. As a result, our deferred taxes are now measured at the new corporate tax rate of 21%. The effect of this change impacts our effective tax rate. The estimated impact on 2017 was to reduce the value of our deferred tax assets by approximately $1.1 million and has been reflected in our effective tax rate reconciliation.The disclosed impact is our most reasonable estimate at this time based on our understanding of the Act as it applies to our business and may change as more information becomes available. The SEC staff issued Staff Accounting Bulletin 118, which provides guidance on accounting for the tax effects of the Act for which the accounting under ASC 740 is incomplete. To the extent that a company’s accounting for certain income tax effects of the Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before enactment of the Act. As of December 31, 2017, we have completed the majority of our accounting for the tax effects of the Act. However, as there is some uncertainty around the grandfathering provisions related to performance-based executive compensation, we have estimated a provisional amount for deferred tax assets related to performance-based executive compensation. In addition, we also re-measured the applicable deferred tax assets and liabilities based on the rates at which they are expected to reverse. However, we are still analyzing certain aspects of the Act and refining our calculations, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. |
Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity | EQUITY We are authorized to issue 250,000,000 shares of common stock, par value $0.01 per share, and 5,000,000 shares of preferred stock, par value $0.01 per share. As of December 31, 2017 and 2016, no shares of preferred stock were issued or outstanding. At December 31, 2016, we had 22,311,310 shares of common stock issued and 21,311,310 shares of common stock outstanding, including 1,000,000 treasury shares of our common stock purchased November 21, 2014 at $16.55 per share. At December 31, 2017, we had 22,845,580 shares of common stock issued and 21,845,580 shares of common stock outstanding. Shelf Registration Statement and ATM Offering Programs We filed a shelf registration statement on Form S-3 (the “Registration Statement”) to offer and sell from time to time various securities with a maximum offering price of $300.0 million. The Registration Statement was declared effective in August 2015. Under the Registration Statement, we established an at the market common stock offering program in September 2015 (the “2015 ATM Program”) and September 2016 (the “2016 ATM Program”) with Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, JMP Securities LLC and Builder Advisor Group, LLC, as sales agents to sell up to $30.0 million and $25.0 million, respectively, of our common stock. We issued and sold 743,554 and 345,760 shares of our common stock under the 2015 ATM Program, and received net proceeds of approximately $19.8 million and $9.6 million during 2016 and 2015, respectively. We issued and sold 354,620 and 250,000 shares of our common stock under the 2016 ATM Program, and received net proceeds of approximately $15.5 million and $9.0 million during 2017 and 2016, respectively. Earnings Per Share The following table sets forth the computation of basic and diluted earnings per share for the years ended December 31, 2017, 2016, and 2015.
In accordance with ASC 260-10, Earnings Per Share, we calculated the dilutive effect of the Convertible Notes using the “if-converted” method through April 30, 2015. The interest expense related to the Convertible Notes through April 30, 2015 was included in cost of sales. On April 30, 2015, our stockholders approved the flexible settlement provisions of the Convertible Notes which allows us to settle the conversion of the Convertible Notes using any combination of cash and shares of our common stock. Therefore, subsequent to April 30, 2015, the treasury stock method is used to calculate the dilutive effect of the Convertible Notes, since we have the intent and ability to settle the principal amount of the outstanding Convertible Notes in cash. Under the treasury stock method, the Convertible Notes have a dilutive impact on diluted earnings per share to the extent that the average market price of our common stock for a reporting period exceeds the conversion price of $21.52 per share. During the years ended December 31, 2017 and 2016, the average market price of our common stock exceeded the conversion price of $21.52 per share, therefore the calculation of diluted earnings per share for the years ended December 31, 2017 and 2016 includes the effect of approximately 2.0 million and 1.0 million shares, respectively, of our common stock related to the conversion spread of the Convertible Notes. |
Stock-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | STOCK-BASED COMPENSATION Non-performance Based Restricted Stock Units A total of 3,000,000 shares of our common stock have been reserved for issuance under the LGI Homes, Inc. Amended and Restated 2013 Equity Incentive Plan (the “2013 Incentive Plan”). The 2013 Incentive Plan was approved by our stockholders at our 2017 Annual Meeting of Stockholders in May 2017. There were 175,100 restricted stock units (RSUs) outstanding at December 31, 2017, issued at a $0.00 exercise price. The following table summarizes the activity of our time-vested restricted stock units (“RSUs”):
In 2017, we issued 27,764 RSUs to senior management for the time based portion of our 2017 long-term incentive compensation program and 18,366 RSUs for 2016 bonuses to managers under the Annual Bonus Plan, which generally cliff vest on the third anniversary of the grant date. In March 2016, we issued 21,905 RSUs to senior management for the time based portion of our 2016 long-term incentive compensation program and 22,059 RSUs for 2015 bonuses to certain officers and managers under the Annual Bonus Plan, which vest over three years. In March 2015, we issued 56,611 RSUs for 2014 bonuses to certain officers and managers under the Annual Bonus Plan, which vest over three years. In addition, during the years ended December 31, 2017, 2016 and 2015, we issued 30,456, 18,489 and 28,573 RSUs, respectively, to certain employees, executives and non-employee directors which vest over periods ranging from one to three years. Under the terms of the grant award agreements, all of the RSUs may only be settled in shares of our common stock. We recognized $1.3 million, $0.8 million, and $0.5 million of stock-based compensation expense related to outstanding RSUs grants for the years ended December 31, 2017, 2016 and 2015, respectively. At December 31, 2017, we had unrecognized compensation cost of $2.9 million related to unvested RSUs, which is expected to be recognized over a weighted average period of 2.1 years. Performance Based Restricted Stock Units The Compensation Committee of our Board of Directors has granted awards of Performance-Based RSUs (“PSUs”) under the Amended and Restated LGI Homes, Inc. 2013 Incentive Plan to certain members of senior management based on three-year performance cycles. At December 31, 2017, there were 319,611 performance-based restricted stock units (“PSUs”) outstanding that have been granted to certain members of management at a $0.00 exercise price. The PSUs provide for shares of our common stock to be issued based on the attainment of certain performance metrics over the applicable three-year periods. The number of shares of our common stock that may be issued to the recipients for the PSUs range from 0% to 200% of the target amount depending on actual results as compared to the target performance metrics. The terms of the PSUs provide that the payouts will be capped at 100% of the target number of PSUs granted if absolute total stockholder return is negative during the performance period, regardless of EPS performance; this market condition applies for amounts recorded above target. The compensation expense associated with the grants of PSU is determined using the derived grant date fair value, based on a third-party valuation analysis, and expensed over the applicable period. The PSUs vest upon the determination date for the actual results at the end of the three-year period and require that the recipients continue to be employed by us through the determination date. The PSUs can only be settled in shares of our common stock.
At December 31, 2017, management estimates that the recipients will receive approximately153.8%, 200%, and 200%, of the 2017, 2016, and 2015 target number of PSUs, respectively, at the end of the applicable three-year performance cycle based on projected performance compared to the target performance metrics. We recognized $2.9 million, $2.6 million, and $1.8 million of total stock-based compensation expense related to outstanding PSUs grants for the years ended December 31, 2017, 2016 and 2015, respectively. At December 31, 2017, we had unrecognized compensation cost of $4.8 million, based on the target amount, related to unvested PSUs, which is expected to be recognized over a weighted average period of 1.2 years. Employee Stock Purchase Plan In 2016, we adopted the LGI Homes, Inc. Employee Stock Purchase Plan (the “ESPP”). The ESPP provides for employees to make quarterly elections for payroll withholdings to purchase shares of our common stock at a 15% discount from the closing price of our common stock on the purchase date, which is the last business day of each calendar quarter. During the years ended December 31, 2017 and 2016, we issued 33,887 and 19,398 shares of our common stock to the ESPP participants. We received net proceeds of approximately $1.6 million and $0.6 million related to the ESPP for 2017 and 2016, respectively. We recognized $0.2 million and $0.1 million in stock compensation expense related to the ESPP for 2017 and 2016, respectively. The ESPP contributions are not refundable (other than in the case of termination of employment) and, therefore, the shares purchasable with the amounts withheld are included in weighted-average shares outstanding for both basic and diluted earnings per share. The maximum aggregate number of shares of our common stock which may be issued pursuant to the ESPP is 500,000 shares, and as of December 31, 2017, 446,715 shares of our common stock remain available for issuance under the ESPP. |
Fair Value Disclosure |
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Fair Value Disclosures | FAIR VALUE DISCLOSURES ASC Topic 820, Fair Value Measurements (“ASC 820”), defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date” within an entity’s principal market, if any. The principal market is the market in which the reporting entity would sell the asset or transfer the liability with the greatest volume and level of activity, regardless of whether it is the market in which the entity will ultimately transact for a particular asset or liability or if a different market is potentially more advantageous. Accordingly, this exit price concept may result in a fair value that differs from the transaction price or market price of the asset or liability. ASC 820 provides a framework for measuring fair value under GAAP, expands disclosures about fair value measurements, and establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of the fair value hierarchy are summarized as follows: Level 1 - Fair value is based on quoted prices in active markets for identical assets or liabilities. Level 2 - Fair value is determined using significant observable inputs, generally either quoted prices in active markets for similar assets or liabilities, or quoted prices in markets that are not active. Level 3 - Fair value is determined using one or more significant inputs that are unobservable in active markets at the measurement date, such as a pricing model, discounted cash flow, or similar technique. We utilize fair value measurements to account for certain items and account balances within our consolidated financial statements. Fair value measurements may also be utilized on a nonrecurring basis, such as for the impairment of long-lived assets. The fair value of financial instruments, including cash and cash equivalents and accounts receivable and accounts payable, approximate their carrying amounts due to the short term nature of these instruments. As of December 31, 2017, the revolving credit facility’s carrying value approximates market value since it has a floating interest rate, which increases or decreases with market interest rates and our leverage ratio. In order to determine the fair value of the Convertible Notes listed below, the future contractual cash flows are discounted at our estimate of current market rates of interest, which were determined based upon the average interest rates of similar convertible notes within the homebuilding industry (Level 2 measurement). The following table below shows the level and measurement of liabilities at December 31, 2017 and 2016 (in thousands):
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Related Party Transactions |
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Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS Magnolia Reserve We have a land purchase contract to purchase 106 finished lots in Montgomery County, Texas from an affiliate of a family member of our chief executive officer for a total base purchase price of approximately $8.0 million. The lots are being purchased in takedowns of at least 21 lots during successive six-month periods, subject to 5% annual price escalation and certain price protection terms. We purchased 42 lots under this land purchase contract during 2017 and 2016 for $3.4 million (escalated price) and $3.2 million, respectively. As of December 31, 2017, we have 22 finished lots remaining under the land purchase contract, for a total base purchase price of approximately $1.6 million. We have a $100,000 non-refundable deposit at December 31, 2017 related to this land purchase contract. Consulting Fees We had a three-year consulting agreement with a family member of our chief executive officer for $100,000 per year payable on a monthly basis, which was set to expire in November 2016. The agreement was terminated in June 2016 by mutual agreement of the parties. Consulting fees were $83,333 and $100,000 for the years ended December 31, 2016 and 2015, respectively. Home Sales to Affiliates In 2017, we sold three homes to an affiliate of one of our directors for approximately $0.7 million. In 2016, we sold two homes to an affiliate of one of our directors for approximately $0.5 million. Land Purchases from Affiliates As of December 31, 2017, we have two land purchase contracts for a total of 194 finished lots in Florida from affiliates of one of our directors for a total base purchase price of approximately $6.8 million. The lots will be purchased in takedowns, subject to annual price escalation ranging from 3% to 6% per annum and may provide for additional payments to the seller at the time of sale to the homebuyer. We have a $0.7 million non-refundable deposit at December 31, 2017 related to these contracts. |
Retirement Benefits |
12 Months Ended |
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Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Retirement Benefits Disclosure | RETIREMENT BENEFITS Our employees are eligible to participate in a 401(k) savings plan. Employees are eligible to participate after completing ninety days of service and having attained the age of 21. Salary deferrals are allowed in amounts up to 100% of an eligible employee’s salary, not to exceed the maximum allowed by law. A discretionary match may be made by us of up to 100% of the first 4% of an eligible employee’s deferral, not to exceed $3,000. For each of the years ended December 31, 2017, 2016 and 2015, our matching contributions were $1.8 million, $0.8 million and $0.5 million, respectively. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Contingencies In the ordinary course of doing business, we are subject to claims or proceedings from time to time relating to the purchase, development, and sale of real estate and homes and other aspects of our homebuilding operations. Management believes that these claims include usual obligations incurred by real estate developers and residential home builders in the normal course of business. In the opinion of management, these matters will not have a material effect on our consolidated financial position, results of operations or cash flows. We have provided unsecured environmental indemnities to certain lenders and other counterparties. In each case, we have performed due diligence on the potential environmental risks including obtaining an independent environmental review from outside environmental consultants. These indemnities obligate us to reimburse the guaranteed parties for damages related to environmental matters. There is no term or damage limitation on these indemnities; however, if an environmental matter arises, we may have recourse against other previous owners. In the ordinary course of doing business, we are subject to regulatory proceedings from time to time related to environmental and other matters. In the opinion of management, these matters will not have a material effect on our consolidated financial position, results of operations, or cash flows. Land Deposits We have land purchase contracts, generally through cash deposits, for the right to purchase land or lots at a future point in time with predetermined terms. We do not have title to the property and obligations with respect to the land purchase contracts which are generally limited to the forfeiture of the related nonrefundable cash deposits. The following is a summary of our land purchase deposits included in pre-acquisition costs and deposits (in thousands, except for lot count):
As of December 31, 2017 and 2016, approximately $8.4 million and $2.9 million of the land deposits are related to purchase contracts to deliver finished lots that are refundable under certain circumstances and secured by mortgages, letters of credit, or guaranteed by the seller or its affiliates. Leasing Arrangements We lease office facilities and certain equipment under non-cancellable operating lease agreements. Rent escalation provisions are accounted for using the straight-line method. Rent expense includes common area maintenance costs. Rent expense totaled $1.0 million, $0.8 million and $0.8 million for the years ended December 31, 2017, 2016 and 2015, respectively. Future minimum lease payments under non-cancellable operating lease agreements are as follows at December 31, 2017 (in thousands):
Bonding and Letters of Credit We have outstanding letters of credit and performance and surety bonds totaling $49.7 million (including $6.7 million under our revolving credit facility) and $29.8 million at December 31, 2017 and 2016, respectively, related to our obligations for site improvements at various projects. Management does not believe that draws upon the letters of credit, surety bonds, or financial guarantees if any, will have a material effect on our consolidated financial position, results of operations, or cash flows. |
Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | SEGMENT INFORMATION Beginning in the fourth quarter of 2017, we changed our reportable segment to Central, Southwest, Southeast, Florida, Northwest, and Midwest. These segments reflect the way the Company evaluates its business performance and manages its operations. Prior year information has been restated for corresponding items of our segment information. We operate one principal homebuilding business which is organized and reports by division. We have six operating segments at December 31, 2017: our Central, Southwest, Southeast, Florida, Northwest, and Midwest divisions. The Central division is our largest division and it comprised approximately 42.3%, 51.2% and 55.6% of total home sales revenues for the years ended December 31, 2017, 2016 and 2015, respectively. In accordance with ASC Topic 280, Segment Reporting, operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision-makers (“CODMs”) in deciding how to allocate resources and in assessing performance. The CODMs primarily evaluate performance based on the number of homes closed, gross margin and average sales price. The operating segments qualify as our six reporting segments. In determining the most appropriate reportable segments, we consider operating segments economic and other characteristics, including home floor plans, average selling prices, gross margin percentage, geographical proximity, production construction processes, suppliers, subcontractors, regulatory environments, customer type, and underlying demand and supply. Each operating segment follows the same accounting policies and is managed by our management team. We have no inter-segment sales, as all sales are to external customers. Operating results for each segment may not be indicative of the results for such segment had it been an independent, stand-alone entity for the periods presented. Financial information relating to our reportable segments was as follows (in thousands):
(1) Balance consists primarily of general and administration unallocated costs for various shared service functions, as well as our warranty reserve. Actual warranty expenses are reflected within the reportable segments.
(1) Balance consists primarily of cash, pre-acquisition costs, prepaid insurance, security deposits, and prepaid expenses. |
Selected Quarterly Financial Data (Unaudited) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selected Quarterly Financial Data (Unaudited) | SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) Quarterly results are as follows (in thousands, except per share data):
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Subsequent Event |
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Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Event | SUBSEQUENT EVENT During the fourth quarter of 2017, we received notice from holders of $15.0 million principal amount of the Convertible Notes to convert their Convertible Notes. The conversion of such Convertible Notes were settled in January and February 2018 resulting in the issuance of 486,679 shares of our common stock, and the payment of $15.0 million for the principal amount of such Convertible Notes. |
Summary of Significant Accounting Policies (Policies) |
12 Months Ended |
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Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation Policy | Basis of Presentation The consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) and include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates Policy | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates, and these differences could have a significant impact on the financial statements. The significant accounting estimates include real estate inventory and cost of sales, impairment of real estate inventory and property and equipment, goodwill, warranty reserves, the fair value of the convertible debt, loss contingencies, incentive compensation expense, and income taxes. |
Cash and Cash Equivalents and Concentration of Credit Risk Policy | Cash and Cash Equivalents and Concentration of Credit Risk Cash and cash equivalents are defined as cash on hand, demand deposits with financial institutions, and short-term liquid investments with an initial maturity date of less than three months. Our cash in demand deposit accounts may exceed federally insured limits and could be negatively impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. To date, we have experienced no loss or diminished access to cash in our demand deposit accounts. |
Accounts Receivable Policy | Accounts Receivable Accounts receivable consist primarily of proceeds due from title companies for sales closed prior to period end and are generally collected within a few days from closing. |
Real Estate Inventory Policy | Real Estate Inventory Inventory consists of land, land under development, finished lots, information centers, homes in progress, and completed homes. Inventory is stated at cost unless the carrying amount is determined not to be recoverable, in which case the affected inventory is written down to fair value. Land, development and other project costs, including interest and property taxes incurred during development and home construction and net of expected reimbursements of development costs, are capitalized to real estate inventory. Land development and other common costs that benefit the entire community, including field construction supervision and related direct overhead, are allocated to individual lots or homes, as appropriate. The costs of lots are transferred to homes in progress when home construction begins. Home construction costs and related carrying charges are allocated to the cost of individual homes using the specific identification method. Costs that are not specifically identifiable to a home are allocated on a pro rata basis, which we believe approximates the costs that would be determined using an allocation method based on relative sales values since the individual lots or homes within a community are similar in value. Inventory costs for completed homes are expensed to cost of sales as homes are closed. Changes to estimated total development costs subsequent to initial home closings in a community are generally allocated to the remaining unsold lots and homes in the community on a pro rata basis. The life cycle of a community generally ranges from two to five years, commencing with the acquisition of land, continuing through the land development phase, and concluding with the construction and sale of homes. A constructed home is used as the community information center during the life of the community and then sold. Actual individual community lives will vary based on the size of the community, the sales absorption rate, and whether the property was purchased as raw land or finished lots. In accordance with the ASC Topic 360, Property, Plant, and Equipment, real estate inventory is evaluated for indicators of impairment by each community during each reporting period. In conducting its review for indicators of impairment on a community level, management evaluates, among other things, the margins on homes that have been closed, communities with slow moving inventory, projected margins on future home sales over the life of the community, and the estimated fair value of the land. For individual communities with indicators of impairment, additional analysis is performed to estimate the community’s undiscounted future cash flows. If the estimated undiscounted future cash flows are greater than the carrying value of the community group of assets, no impairment adjustment is required. If the undiscounted cash flows are less than the community’s carrying value, the asset group is impaired and is written down to its fair value. We estimate the fair value of communities using a discounted cash flow model. As of December 31, 2017 and 2016, the real estate inventory is stated at cost; there were no inventory impairment charges recorded during the years ended December 31, 2017, 2016 and 2015. |
Capitalized Interest Policy | Capitalized Interest Interest and other financing costs are capitalized as cost of inventory during community development and home construction activities, in accordance with ASC Topic 835, Interest and expensed in cost of sales as homes in the community are closed. To the extent the debt exceeds qualified assets, a portion of the interest incurred is expensed. |
Pre-Acquisition Costs and Deposits Policy | Pre-Acquisition Costs and Deposits Amounts paid for land options, deposits on land purchase contracts, and other pre-acquisition costs are capitalized and classified as deposits to purchase. Upon execution of the purchase, these deposits are applied to the acquisition price of the land and recorded as a cost component of the land in real estate inventory. To the extent that any deposits are nonrefundable and the associated land acquisition process is terminated or no longer determined probable, the deposit and related pre-acquisition costs are charged to other income, net. Management reviews the likelihood of the acquisition of contracted lots in conjunction with its periodic real estate impairment analysis. Under ASC Topic 810, Consolidation (“ASC 810”), a nonrefundable deposit paid to an entity is deemed to be a variable interest that will absorb some or all of the entity’s expected losses if they occur. Non-refundable land purchase and lot option deposits generally represent our maximum exposure 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 close. Such costs are classified as preacquisition costs, which we would have to absorb should the option not be exercised. Therefore, whenever we enter into a land option or purchase contract with an entity and make a nonrefundable deposit, we may have a variable interest in a variable interest entity (“VIE”). In accordance with ASC 810, we perform ongoing reassessments of whether we are the primary beneficiary of a VIE and would consolidate the VIE if we are deemed to be the primary beneficiary. As of December 31, 2017 and 2016, we were not deemed to be the primary beneficiary for any VIEs associated with non-refundable land deposits. |
Deferred Loan Costs Policy | Deferred Loan Costs Deferred loan costs represent debt issuance costs related to a recognized debt liability and are presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. |
Other Assets Policy | Other Assets Other assets consist primarily of prepaid insurance, security deposits, and prepaid expenses. Our prepaid expenses were $7.5 million and $3.0 million as of December 31, 2017 and 2016, respectively. |
Property and Equipment Policy | Property and Equipment Property, equipment and leasehold improvements are stated at cost, less accumulated depreciation. Depreciation expense is recorded in general and administrative expenses. Upon sale or retirement, the costs and related accumulated depreciation are eliminated from the respective accounts and any resulting gain or loss is included in other income, net. Depreciation is generally computed using the straight-line method over the estimated useful lives of the assets, ranging from two to five years for property and equipment. Leasehold improvements are depreciated over the shorter of the asset life or the term of the lease. Maintenance and repair costs are expensed as incurred. Impairments of long-lived assets are determined periodically when indicators of impairment are present. If such indicators are present, the determination of the amount of impairment is based on judgments as to the future undiscounted operating cash flows to be generated from these assets throughout the remaining estimated useful lives. If these undiscounted cash flows are less than the carrying amount of the related asset, impairment is recognized for the excess of the carrying value over its fair value. There were no impairments of property, equipment and leasehold improvements recorded during the years ended December 31, 2017, 2016 and 2015. |
Goodwill and Intangible Assets Policy | Goodwill and Intangible Assets The excess of the purchase price of a business acquisition over the net fair value of assets acquired and liabilities assumed is capitalized as goodwill in accordance with ASC Topic 805, Business Combinations. Goodwill and intangible assets that do not have finite lives are not amortized, but are assessed for impairment at least annually or more frequently if certain impairment indicators are present. The $12.0 million of goodwill is related to the reorganization transactions completed in connection with the initial public offering of our common stock in November 2013. In applying the goodwill impairment test, we have the option to perform a qualitative test (also known as “Step 0”) or a two-step quantitative test (consisting of “Step 1” and “Step 2”). Under the Step 0 test, we first assess qualitative factors to determine whether it is more likely than not that the fair value of the reporting units is less than their carrying value. Qualitative factors may include, but are not limited to, economic conditions, industry and market considerations, cost factors, overall financial performance of the reporting unit and other entity and reporting unit specific events. If after assessing these qualitative factors, we determine it is “more-likely-than-not” that the fair value of the reporting unit is less than the carrying value, then performing the two-step quantitative test is necessary. During 2017, we performed a Step 0 analysis and determined that it is not “more likely than not” that the fair values of the reporting units were less than their carrying amounts. During 2016 and 2015, we performed the two-step quantitative impairment test. No goodwill impairment charges were recorded in 2017, 2016 and 2015. |
Warranty Reserves Policy | Warranty Reserves Future direct warranty costs are accrued and charged to cost of sales in the period when the related home is closed. Our warranty liability is based upon historical warranty cost experience and is adjusted as appropriate to reflect qualitative risks associated with the types of homes built, the geographic areas in which they are built, and potential impacts of our continued expansion. Warranty reserves are reviewed quarterly to assess the reasonableness and adequacy and adjusted, as needed, to reflect changes in trends and historical data as information becomes available. |
Customer Deposits Policy | Customer Deposits Customer deposits are received upon signing a purchase contract and are generally $1,000 or less. Deposits are generally refundable if the customer is unable to obtain financing. Forfeited buyer deposits related to home sales are recognized in other income in the period in which it is determined that the buyer will not complete the purchase of the property and the deposit is nonrefundable to the buyer. |
Home Sales Policy | Home Sales In accordance with ASC Topic 360—20, Real Estate Sales, revenues from home sales are recorded at the time each home sale is closed, title and possession are transferred to the buyer, and we have no significant continuing involvement with the home. Home sales proceeds are generally received from the title company within a few days after closing. Home sales are reported net of sales discounts and incentives granted to home buyers, which are primarily seller-paid closing costs. |
Cost of Sales Policy | Cost of Sales As discussed under Real Estate Inventory above, cost of sales for homes closed include the construction costs of each home and allocable land acquisition and land development costs, capitalized interest, and other related common costs (both incurred and estimated to be incurred). |
Selling and Commission Costs Policy | Selling and Commission Costs Sales commissions are paid and expensed based on homes closed. Other selling costs are expensed in the period incurred. |
Advertising Costs Policy | Advertising Costs Advertising and direct mail costs are expensed as incurred. Advertising and direct mail costs were $15.2 million, $11.3 million and $9.3 million for the years ended December 31, 2017, 2016, and 2015, respectively. |
Income Taxes Policy | Income Taxes We are a taxable entity subject to federal and state taxes. We utilize the liability method of accounting for income taxes. Under the liability method, deferred tax assets and liabilities are recognized using enacted tax rates for the effect of temporary differences between the book and tax bases of recorded assets and liabilities. Changes in tax rate are recognized in the year of enactment. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion or all of the net deferred tax assets will not be realized. Our ability to realize deferred tax assets is assessed throughout the year and a valuation allowance is established, if required. We recognize the impact of a tax position only if it is more likely than not to be sustained upon examination based on the technical merits of the position. We recognize potential interest and penalties related to uncertain tax positions in income tax expense. We file income tax returns in the U.S. federal jurisdiction and in various states and we do not have any unrecognized tax benefits. We are not presently under exam for income tax by any taxing jurisdiction, and no longer remain subject to exam for years before 2014 (2013 for Texas). |
Earnings Per Share Policy | Earnings Per Share Basic earnings per share is based on the weighted average number of shares of common stock outstanding. Diluted earnings per share is based on the weighted average number of shares of common stock and dilutive securities outstanding. Diluted earnings per share gives effect to all dilutive potential shares outstanding during the period using the treasury stock method and for our 4.25% Convertible Notes due 2019 (the “Convertible Notes”) using the if-converted method through April 30, 2015. On April 30, 2015, our stockholders approved the flexible settlement provisions of the Convertible Notes at our 2015 Annual Meeting of Stockholders which allows us to settle the conversion of the Convertible Notes using any combination of cash and shares of our common stock. Therefore, subsequent to April 30, 2015, the treasury stock method is used to calculate the dilutive effect of the Convertible Notes. Diluted earnings per share excludes all dilutive potential shares of common stock if their effect is antidilutive. |
Share-Based Compensation Policy | Stock-Based Compensation Compensation costs for non-performance-based restricted stock awards are measured using the closing price of our common stock on the date of grant and are expensed on a straight-line basis over the requisite service period of the award. Compensation costs for performance-based restricted stock awards contain a market condition. These costs are measured using the derived grant date fair value, based on a third party valuation analysis, but are expensed in accordance with ASC 718-10-25-20, Compensation - Stock Compensation, which requires an assessment of probability of attainment of the performance target. Once the performance target outcome is determined to be probable, the cumulative expense is adjusted, as needed, to recognize compensation expense on a straight-line basis over the award’s requisite service period. |
New Accounting Pronouncements Policy | Recently Adopted Accounting Standards Effective January 1, 2017, we adopted the Financial Accounting Standards Board (the “FASB”) Accounting Standards Update (“ASU”) No. 2016-09, “Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”), which includes multiple amendments intended to simplify aspects of share-based payment accounting and how they are presented in the financial statements. Under previous guidance, excess tax benefits and deficiencies from stock-based compensation arrangements were recorded in equity when the awards vested or were settled. ASU 2016-09 requires prospective recognition of excess tax benefits and deficiencies in the statement of operations, resulting in $1.0 million impact to the recognition of excess tax benefits for the year ended December 31, 2017. In addition, under ASU 2016-09, excess income tax benefits from stock-based compensation arrangements are classified as cash flow from operations, rather than as cash flow from financing activities. We have elected to apply the cash flow classification guidance of ASU 2016-09 prospectively, resulting in $1.0 million impact to operating cash flow for the year ended December 31, 2017. In recording share-based compensation expense, ASU 2016-09 allows companies to make a policy election as to whether they will include an estimate of awards expected to be forfeited or whether they will account for forfeitures as they occur. We have elected to continue to account for forfeitures as they occur, as forfeitures have historically been immaterial. Recently Issued Accounting Pronouncements In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash” (“ ASU 2016-18”), which provides guidance on the presentation of restricted cash or restricted cash equivalents in the statement of cash flows by requiring it be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows, thereby reducing previous diversity in practice. This amendment will be effective for us in our fiscal year beginning January 1, 2018. We do not expect the adoption of ASU 2016-18 will have a material effect on our consolidated statement of cash flows or disclosures. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments,” (“ASU 2016-15”), which addresses specific classification issues and is intended to reduce diversity in current practice regarding the manner in which certain cash receipts and cash payments are presented and classified in the cash flow statement. ASU 2016-15 will be effective for annual reporting periods beginning after December 15, 2017, and early adoption is permitted. We do not expect the adoption of ASU 2016-15 will have a material effect on our consolidated financial statements and disclosures. In February 2016, the FASB issued ASU No. 2016-02, “Leases,” (“ASU 2016-02”), which amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets. Topic 842 “Leases,” will be effective for annual reporting periods beginning after December 15, 2018, and early adoption is permitted. ASU 2016-02 requires a modified retrospective transition approach. As part of our assessment work-to-date, we have formed an implementation work team and we are currently evaluating the impact that the adoption of ASU 2016-02 will have on our consolidated financial statements and disclosures. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”), which provides guidance for revenue recognition. ASU 2014-09 affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets and supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition,” and most industry-specific guidance. This ASU also supersedes some cost guidance included in Subtopic 605-35, “Revenue Recognition-Construction-Type and Production-Type Contracts.” ASU 2014-09’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which a company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under today’s guidance, including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 and related FASB updates are effective for us beginning January 1, 2018 and, at that time, we expect to adopt the new standard under the modified retrospective approach. We have completed our evaluation on the impact that the adoption of ASU 2014-09 will have on our consolidated financial statements and concluded that the overall impact is not material to our consolidated financial statements. |
Real Estate Inventory (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Real Estate Inventory | Our real estate inventory consists of the following (in thousands):
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Property and Equipment (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property and Equipment | Property and equipment consist of the following (in thousands):
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Accrued Expenses and Other Liabilities (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued and Other Current Liabilities | Accrued and other liabilities consist of the following (in thousands):
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Changes in Companies' Warranty Accrual | Changes to our warranty accrual are as follows (in thousands):
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Notes Payable (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Notes Payable | Notes payable consist of the following (in thousands):
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Contractual Obligation, Fiscal Year Maturity Schedule | As of December 31, 2017, the annual aggregate maturities of our notes payable during each of the next five fiscal years are as follows (in thousands):
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Schedule of Interest Activity for Notes Payable | Interest activity, including other financing costs, for notes payable for the periods presented is as follows (in thousands):
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Income Taxes (Tables) |
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income Tax Expense | The provision for income taxes consisted of the following (in thousands):
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Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the provision for income taxes and the amount computed by applying the statutory federal income tax rate of 35% to income before provision for income taxes for the years ended December 31, 2017, 2016 and 2015 (in thousands):
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Schedule of Deferred Tax Assets and Liabilities | The components of net deferred tax assets and liabilities at December 31, 2017 and 2016, are as follows (in thousands):
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Equity (Tables) |
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted earnings per share for the years ended December 31, 2017, 2016, and 2015.
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Stock-Based Compensation (Tables) |
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restricted Stock Unit Activity | The following table summarizes the activity of our time-vested restricted stock units (“RSUs”):
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Schedule of Performance Based Stock Activity |
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Fair Value Disclosure (Tables) |
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Dec. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measures | The following table below shows the level and measurement of liabilities at December 31, 2017 and 2016 (in thousands):
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Commitments and Contingencies (Tables) |
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Dec. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Lots Under Option or Contract | The following is a summary of our land purchase deposits included in pre-acquisition costs and deposits (in thousands, except for lot count):
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Schedule of Future Minimum Rental Payments for Operating Leases | Future minimum lease payments under non-cancellable operating lease agreements are as follows at December 31, 2017 (in thousands):
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Segment Information (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | Financial information relating to our reportable segments was as follows (in thousands):
(1) Balance consists primarily of general and administration unallocated costs for various shared service functions, as well as our warranty reserve. Actual warranty expenses are reflected within the reportable segments.
(1) Balance consists primarily of cash, pre-acquisition costs, prepaid insurance, security deposits, and prepaid expenses. |
Selected Quarterly Financial Data (Unaudited) (Tables) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Quarterly Financial Information | Quarterly results are as follows (in thousands, except per share data):
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Schedule of Real Estate Inventory (Detail) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Land, land under development, and finished lots | $ 494,552 | $ 477,461 |
Information centers | 18,327 | 13,589 |
Homes in progress | 191,659 | 94,686 |
Completed homes | 214,395 | 131,945 |
Total real estate inventory | $ 918,933 | $ 717,681 |
Accrued Expenses and Other Liabilites (Details) - USD ($) $ in Thousands |
12 Months Ended | |||
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Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
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Payables and Accruals [Abstract] | ||||
Inventory related obligations | $ 12,906 | $ 16,352 | ||
Taxes payable | 48,733 | 5,040 | ||
Retentions and development payable | 12,025 | 8,506 | ||
Accrued compensation, bonuses and benefits | 14,462 | 7,800 | ||
Accrued interest | 2,096 | 1,645 | ||
Warranty reserve | 2,450 | 1,600 | $ 1,325 | $ 900 |
Other | 10,159 | 5,446 | ||
Total accrued expenses and other liabilities | $ 102,831 | $ 46,389 | ||
Inventory Related Obligation Term | 30 years |
Changes in Warranty Reserve (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
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Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
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Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | |||
Warranty reserves, beginning of period | $ 1,600 | $ 1,325 | $ 900 |
Warranty provision | 4,999 | 3,084 | 1,608 |
Warranty expenditures | (4,149) | (2,809) | (1,183) |
Warranty reserves, end of period | $ 2,450 | $ 1,600 | $ 1,325 |
Other Construction Components | |||
Limited Warranty Period | 1 year | ||
Structural Elements | |||
Limited Warranty Period | 10 years |
Notes Payable - Schedule of Notes Payable (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Debt Instrument [Line Items] | ||
Notes payable | $ 475,195 | $ 400,483 |
Debt issuance costs | 6,300 | |
Unamortized discount | 3,505 | |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Notes payable | 394,714 | 322,253 |
Debt issuance costs | 2,747 | 1,530 |
Convertible Debt | ||
Debt Instrument [Line Items] | ||
Notes payable | 80,481 | 78,230 |
Debt issuance costs | 1,560 | 2,101 |
Unamortized discount | $ 5,210 | $ 6,808 |
Notes Payable - Annual Aggregate Maturities of Notes Payable (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Maturities of Long-term Debt [Abstract] | ||
Long-term debt, maturities in next twelve months | $ 85,000 | |
Long-term debt, maturities in year two | 0 | |
Long-term debt, maturities in year three | 400,000 | |
Long-term debt, maturities in year four | 0 | |
Long-term debt, maturities in year five | 0 | |
Long-term debt, gross | 485,000 | |
Unamortized discount | (3,505) | |
Debt issuance costs | (6,300) | |
Notes payable | $ 475,195 | $ 400,483 |
Notes Payable - Capitalized Interest (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Debt Disclosure [Abstract] | |||
Interest incurred | $ 24,275 | $ 18,457 | $ 14,198 |
Less: Amounts capitalized | (24,275) | (18,457) | (14,198) |
Interest expense | 0 | 0 | 0 |
Cash paid for interest | 19,704 | 14,339 | 9,766 |
Amortization of financing costs and discounts | $ 4,100 | $ 3,600 | $ 3,900 |
Income Taxes - Components of Income Tax Expense (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Current: | |||
Federal | $ 55,218 | $ 37,751 | $ 24,990 |
State | 4,970 | 3,452 | 2,419 |
Current tax provision | 60,188 | 41,203 | 27,409 |
Deferred: | |||
Federal | (1,918) | (2,451) | 33 |
State | (174) | (111) | 8 |
Deferred tax provision (benefit) | (2,092) | (2,562) | 41 |
Total income tax provision | 58,096 | 38,641 | 27,450 |
Income taxes paid | $ 16,800 | $ 42,400 | $ 23,700 |
Income Taxes - Effective Income Tax Reconciliation (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Effective Income Tax Rate Reconciliation, Amount [Abstract] | |||
Tax at federal statutory rate | $ 60,008 | $ 39,791 | $ 28,098 |
State income taxes (net of federal benefit) | 3,060 | 2,143 | 1,568 |
Domestic production activity deduction | (5,461) | (3,727) | (2,462) |
Non deductible expenses and other | (657) | 435 | 237 |
Change in tax rates - deferred taxes | 1,146 | (1) | 9 |
Tax at effective rate | $ 58,096 | $ 38,641 | $ 27,450 |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||
Tax at federal statutory rate | 35.00% | 35.00% | 35.00% |
State income taxes (net of federal benefit) | 1.80% | 1.90% | 2.00% |
Domestic production activity deduction | (3.20%) | (3.30%) | (3.10%) |
Non deductible expenses and other | (0.40%) | 0.40% | 0.30% |
Change in tax rates - deferred taxes | 0.70% | 0.00% | 0.00% |
Tax at effective rate | 33.90% | 34.00% | 34.20% |
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Income Tax Disclosure [Abstract] | ||
Tax Cuts And Jobs Act Of 2017 Change In Tax Rate Deferred Tax Asset Income Tax Expense | $ 1,100 | |
Deferred tax assets: | ||
Accruals and reserves | 2,756 | $ 2,422 |
Inventory | 475 | 532 |
Stock-based compensation | 1,048 | 392 |
Deferred rent and loan costs | 38 | 105 |
Total deferred tax assets | 4,317 | 3,451 |
Deferred tax liabilities: | ||
Discount on Convertible Notes | (801) | (1,897) |
Prepaids | (1,035) | (911) |
Tax depreciation in excess of book depreciation | (177) | (396) |
Goodwill and other assets amortized for tax | (376) | (411) |
Total deferred tax liabilities | (2,389) | (3,615) |
Total net deferred tax assets | 1,928 | 0 |
Total net deferred tax liabilities | $ 0 | $ (164) |
Equity (Details) - USD ($) $ / shares in Units, $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Class of Stock [Line Items] | ||||
Common stock, shares authorized | 250,000,000 | 250,000,000 | ||
Common stock, par value | $ 0.01 | $ 0.01 | ||
Preferred stock, shares authorized | 5,000,000 | |||
Preferred stock, par value per share | $ 0.01 | |||
Common stock, shares issued | 22,845,580 | 22,311,310 | ||
Common stock, shares outstanding | 21,845,580 | 21,311,310 | ||
Treasury stock, shares | 1,000,000 | 1,000,000 | ||
Treasury stock purchased, average cost per share | $ 16.55 | |||
Shelf Registration maximum offering price | $ 300.0 | |||
2015 ATM Program | ||||
Class of Stock [Line Items] | ||||
ATM Program maximum authorized amount | 30.0 | |||
Issuance of shares (in shares) | 743,554 | 345,760 | ||
Issuance of shares, net offering costs | $ 19.8 | $ 9.6 | ||
2016 ATM Program | ||||
Class of Stock [Line Items] | ||||
ATM Program maximum authorized amount | $ 25.0 | |||
Issuance of shares (in shares) | 354,620 | 250,000 | ||
Issuance of shares, net offering costs | $ 15.5 | $ 9.0 |
Equity - Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Net income | $ 35,640 | $ 33,687 | $ 32,199 | $ 11,780 | $ 23,205 | $ 19,467 | $ 20,659 | $ 11,700 | $ 113,306 | $ 75,031 | $ 52,830 |
Interest expense associated with Convertible Notes, net of taxes | 0 | 0 | 190 | ||||||||
Numerator for diluted earnings per share | $ 113,306 | $ 75,031 | $ 53,020 | ||||||||
Basic weighted average shares outstanding | 21,604,932 | 20,798,333 | 19,939,761 | ||||||||
Convertible Notes - treasury stock method | 1,975,648 | 1,044,519 | 463,609 | ||||||||
Convertible Notes - if-converted method | 0 | 0 | 1,298,871 | ||||||||
Stock-based compensation units | 352,542 | 181,239 | 38,478 | ||||||||
Diluted weighted average shares outstanding | 23,933,122 | 22,024,091 | 21,740,719 | ||||||||
Basic earnings per share (in dollars per share) | $ 1.65 | $ 1.55 | $ 1.49 | $ 0.55 | $ 1.09 | $ 0.92 | $ 1.01 | $ 0.58 | $ 5.24 | $ 3.61 | $ 2.65 |
Diluted earnings per share (in dollars per share) | 1.43 | $ 1.40 | $ 1.39 | $ 0.52 | $ 1.01 | $ 0.86 | $ 0.96 | $ 0.57 | $ 4.73 | $ 3.41 | $ 2.44 |
Antidilutive non-vested restricted stock units excluded from calculation of diluted earnings per share | 16,473 | 13,613 | 23,201 | ||||||||
Convertible Debt | |||||||||||
Convertible notes, conversion price | $ 21.52 | $ 21.52 |
Employee's Stock Purchase Plan (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Employee Stock Purchase Plan (ESPP) Disclosures [Line Items] | |||
Proceeds from issuance of common stock under ESPP | $ 17,130 | $ 29,448 | $ 9,593 |
Common stock, shares authorized | 250,000,000 | 250,000,000 | |
EmployeeStockPurchasePlan | |||
Employee Stock Purchase Plan (ESPP) Disclosures [Line Items] | |||
ESPP discount on shares of common stock | 15.00% | ||
Issuance of shares (in shares) | 33,887 | 19,398 | |
Proceeds from issuance of common stock under ESPP | $ 1,600 | $ 600 | |
Share-based compensation expense | $ 200 | $ 100 | |
Common stock, shares authorized | 500,000 | ||
Remaining shares available for issuance | 446,715 |
Fair Value Disclosure (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
Nov. 30, 2014 |
---|---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Convertible notes, carrying value | $ 475,195 | $ 400,483 | |
Convertible notes, fair value | 81,523 | 79,514 | |
Convertible Debt | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Convertible notes, carrying value | $ 80,481 | $ 78,230 | |
Convertible notes, fair value | $ 76,500 |
Retirement Benefits (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Retirement Benefits [Abstract] | |||
Minimum service period for employees to be covered under profit sharing plan | 90 days | ||
Employees eligibility age for participating in profit sharing plan | 21 years | ||
Maximum percentage of employees' gross pay eligible | 100.00% | ||
Maximum employer annual contribution percentage per employee | 100.00% | ||
Maximum employer matching contribution percentage of eligible employee contribution | 4.00% | ||
Maximum employer matching contribution amount per employee | $ 3,000 | ||
Employer contribution amount | $ 1,800,000 | $ 800,000 | $ 500,000 |
Commitments and Contingencies - Land Deposits (Detail) $ in Thousands |
Dec. 31, 2017
USD ($)
lot
|
Dec. 31, 2016
USD ($)
lot
|
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Land deposits and option payments | $ 17,761 | $ 9,954 |
Commitments under the land purchase contracts if the purchases are consummated | $ 460,714 | $ 234,198 |
Lots under land purchase contracts | lot | 18,758 | 8,462 |
Refundable land deposits of purchase contracts of finished lots | $ 8,400 | $ 2,900 |
Commitments and Contingencies - Future Minimum Rental Payments for Operating Leases (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
Operating leases, rent expense | $ 1,000 | $ 800 | $ 800 |
2018 | 778 | ||
2019 | 596 | ||
2020 | 555 | ||
2021 | 567 | ||
2022 | 577 | ||
Thereafter | 3,428 | ||
Total | $ 6,501 |
Commitment and Contingencies - Bonding and Letters of Credit (Details) - USD ($) $ in Millions |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Other Commitments [Line Items] | ||
Letters of credit, performance and surety bonds, and other financial guarantees | $ 49.7 | $ 29.8 |
Revolving Credit Facility | ||
Other Commitments [Line Items] | ||
Letters of credit outstanding | $ 6.7 |
Segment Information (Details) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017
USD ($)
|
Sep. 30, 2017
USD ($)
|
Jun. 30, 2017
USD ($)
|
Mar. 31, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
Sep. 30, 2016
USD ($)
|
Jun. 30, 2016
USD ($)
|
Mar. 31, 2016
USD ($)
|
Dec. 31, 2017
USD ($)
Segment
|
Dec. 31, 2016
USD ($)
|
Dec. 31, 2015
USD ($)
|
|
Segment Reporting Information [Line Items] | |||||||||||
Number of reporting segments | Segment | 6 | ||||||||||
Home sales revenues | $ 404,975 | $ 365,896 | $ 324,178 | $ 162,911 | $ 236,830 | $ 216,304 | $ 222,723 | $ 162,463 | $ 1,257,960 | $ 838,320 | $ 630,236 |
Income before income taxes | 55,041 | $ 50,877 | $ 48,642 | $ 16,842 | 34,947 | $ 29,488 | $ 31,408 | $ 17,829 | 171,402 | 113,672 | $ 80,280 |
Assets | 1,079,892 | 814,514 | $ 1,079,892 | $ 814,514 | |||||||
Central Division | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Percentage of operations | 42.30% | 51.20% | 55.60% | ||||||||
Home sales revenues | $ 532,447 | $ 429,505 | $ 350,674 | ||||||||
Income before income taxes | 90,048 | 73,026 | 57,326 | ||||||||
Assets | 439,833 | 327,983 | 439,833 | 327,983 | |||||||
Southwest Division | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Home sales revenues | 243,037 | 165,017 | 109,878 | ||||||||
Income before income taxes | 28,017 | 13,855 | 10,410 | ||||||||
Assets | 175,786 | 149,963 | 175,786 | 149,963 | |||||||
Southeast Division | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Home sales revenues | 183,422 | 111,651 | 95,949 | ||||||||
Income before income taxes | 19,959 | 15,244 | 7,966 | ||||||||
Assets | 155,928 | 110,628 | 155,928 | 110,628 | |||||||
Florida Division | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Home sales revenues | 199,733 | 115,276 | 73,735 | ||||||||
Income before income taxes | 25,687 | 14,471 | 7,560 | ||||||||
Assets | 119,257 | 94,818 | 119,257 | 94,818 | |||||||
Northwest Division | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Home sales revenues | 98,514 | 16,871 | 0 | ||||||||
Income before income taxes | 12,079 | (383) | (521) | ||||||||
Assets | 80,350 | 67,284 | 80,350 | 67,284 | |||||||
Midwest Division | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Home sales revenues | 807 | 0 | 0 | ||||||||
Income before income taxes | (915) | 0 | 0 | ||||||||
Assets | 15,066 | 0 | 15,066 | 0 | |||||||
Corporate | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Income before income taxes | (3,473) | (2,541) | $ (2,461) | ||||||||
Assets | $ 93,672 | $ 63,838 | $ 93,672 | $ 63,838 |
Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Home sales revenues | $ 404,975 | $ 365,896 | $ 324,178 | $ 162,911 | $ 236,830 | $ 216,304 | $ 222,723 | $ 162,463 | $ 1,257,960 | $ 838,320 | $ 630,236 |
Gross margin | 98,677 | 91,896 | 86,348 | 43,499 | 64,328 | 56,821 | 59,095 | 41,369 | |||
Income before income taxes | 55,041 | 50,877 | 48,642 | 16,842 | 34,947 | 29,488 | 31,408 | 17,829 | 171,402 | 113,672 | 80,280 |
Net income | $ 35,640 | $ 33,687 | $ 32,199 | $ 11,780 | $ 23,205 | $ 19,467 | $ 20,659 | $ 11,700 | $ 113,306 | $ 75,031 | $ 52,830 |
Basic earnings per share (in dollars per share) | $ 1.65 | $ 1.55 | $ 1.49 | $ 0.55 | $ 1.09 | $ 0.92 | $ 1.01 | $ 0.58 | $ 5.24 | $ 3.61 | $ 2.65 |
Earnings Per Share, Diluted | $ 1.43 | $ 1.40 | $ 1.39 | $ 0.52 | $ 1.01 | $ 0.86 | $ 0.96 | $ 0.57 | $ 4.73 | $ 3.41 | $ 2.44 |
Subsequent Event (Details) - Convertible Debt - Subsequent Event $ in Millions |
2 Months Ended |
---|---|
Feb. 22, 2018
USD ($)
shares
| |
Subsequent Event [Line Items] | |
Principle amount of Convertible Notes to convert | $ | $ 15.0 |
Shares of common stock issued in conversion of Convertible Notes | shares | 486,679 |
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