Note 17 - Supplemental Guarantor Information

3 Months Ended

Mar. 31, 2020

Notes to Financial Statements

Supplemental Guarantor Information [Text Block]

17. Supplemental Guarantor Information

The Company's Notes are guaranteed, on an unsecured basis, jointly and severally, by all of the Company's 100% owned subsidiaries (collectively, the "Guarantors"). The guarantees are full and unconditional. The Indenture governing the Notes provides that the guarantees of a Guarantor will be automatically and unconditionally released and discharged: (1) upon any sale, transfer, exchange or other disposition (by merger, consolidation or otherwise) of all of the equity interests of such Guarantor after which the applicable Guarantor is no longer a "Restricted Subsidiary" (as defined in the Indenture), which sale, transfer, exchange or other disposition is made in compliance with applicable provisions of the Indenture; (2) upon the proper designation of such Guarantor as an "Unrestricted Subsidiary" (as defined in the Indenture), in accordance with the Indenture; (3) upon request of the Company and certification in an officers’ certificate provided to the trustee that the applicable Guarantor has become an "Immaterial Subsidiary" (as defined in the indenture), so long as such Guarantor would not otherwise be required to provide a guarantee pursuant to the Indenture; provided that, if immediately after giving effect to such release the consolidated tangible assets of all Immaterial Subsidiaries that are not Guarantors would exceed 5.0% of consolidated tangible assets, no such release shall occur, (4) if the Company exercises its legal defeasance option or covenant defeasance option under the Indenture or if the obligations of the Company and the Guarantors are discharged in compliance with applicable provisions of the Indenture, upon such exercise or discharge; (5) unless a default has occurred and is continuing, upon the release or discharge of such Guarantor from its guarantee of any indebtedness for borrowed money of the Company and the Guarantors so long as such Guarantor would not then otherwise be required to provide a guarantee pursuant to the Indenture; or (6) upon the full satisfaction of the Company’s obligations under the Indenture; provided that in each case if such Guarantor has incurred any indebtedness in reliance on its status as a Guarantor in compliance with applicable provisions of the Indenture, such Guarantor’s obligations under such indebtedness, as the case may be, so incurred are satisfied in full and discharged or are otherwise permitted to be incurred by a Restricted Subsidiary (other than a Guarantor) in compliance with applicable provisions of the Indenture. The Company has determined that separate, full financial statements of the Guarantors would not be material to investors and, accordingly, supplemental financial information for the guarantors is presented.

SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEETS

	March 31, 2020
	NWHM		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Consolidated NWHM
	(Dollars in thousands)
Assets
Cash and cash equivalents	$	69,603	$	18,085	$	175	$	—		$	87,863
Restricted cash		—		424		—		—			424
Contracts and accounts receivable		11		16,514		—		(888	)		15,637
Intercompany receivables		262,949		—		—		(262,949	)		—
Due from affiliates		—		108		—		—			108
Real estate inventories		—		398,973		—		—			398,973
Investment in and advances to unconsolidated joint ventures		—		29,237		—		—			29,237
Investment in subsidiaries		171,369		—		—		(171,369	)		—
Deferred tax asset, net		16,060		529		—		—			16,589
Other assets		20,324		10,754		27		—			31,105
Total assets	$	540,316	$	474,624	$	202	$	(435,206	)	$	579,936
Liabilities and equity
Accounts payable	$	47	$	20,991	$	—	$	—		$	21,038
Accrued expenses and other liabilities		17,566		19,368		26		(877	)		36,083
Intercompany payables		—		262,949		—		(262,949	)		—
Due to affiliates		—		11		—		(11	)		—
Senior notes, net		300,479		—		—		—			300,479
Total liabilities		318,092		303,319		26		(263,837	)		357,600
Total stockholders' equity		222,224		171,305		64		(171,369	)		222,224
Non-controlling interest in subsidiary		—		—		112		—			112
Total equity		222,224		171,305		176		(171,369	)		222,336
Total liabilities and equity	$	540,316	$	474,624	$	202	$	(435,206	)	$	579,936

	December 31, 2019
	NWHM		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Consolidated NWHM
	(Dollars in thousands)
Assets
Cash and cash equivalents	$	66,166	$	12,978	$	170	$	—		$	79,314
Restricted cash		—		117		—		—			117
Contracts and accounts receivable		3		16,403		—		(424	)		15,982
Intercompany receivables		258,372		—		—		(258,372	)		—
Due from affiliates		—		238		—		—			238
Real estate inventories		—		433,938		—		—			433,938
Investment in and advances to unconsolidated joint ventures		—		30,217		—		—			30,217
Investment in subsidiaries		198,448		—		—		(198,448	)		—
Deferred tax asset, net		17,003		500		—		—			17,503
Other assets		9,505		16,340		35		—			25,880
Total assets	$	549,497	$	510,731	$	205	$	(457,244	)	$	603,189
Liabilities and equity
Accounts payable	$	68	$	24,973	$	3	$	—		$	25,044
Accrued expenses and other liabilities		11,950		28,999		26		(421	)		40,554
Intercompany payables		—		258,372		—		(258,372	)		—
Due to affiliates		—		3		—		(3	)		—
Senior notes, net		304,832		—		—		—			304,832
Total liabilities		316,850		312,347		29		(258,796	)		370,430
Total stockholders' equity		232,647		198,384		64		(198,448	)		232,647
Non-controlling interest in subsidiary		—		—		112		—			112
Total equity		232,647		198,384		176		(198,448	)		232,759
Total liabilities and equity	$	549,497	$	510,731	$	205	$	(457,244	)	$	603,189

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

	Three Months Ended March 31, 2020
	NWHM			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Consolidating Adjustments		Consolidated NWHM
	(Dollars in thousands)
Revenues:
Home sales	$	—		$	95,659		$	—	$	—	$	95,659
Land sales		—			147			—		—		147
Fee building		—			36,227			—		—		36,227
		—			132,033			—		—		132,033
Cost of Sales:
Home sales		—			84,722			—		—		84,722
Land sales		—			147			—		—		147
Fee building		—			35,497			—		—		35,497
		—			120,366			—		—		120,366
Gross Margin:
Home sales		—			10,937			—		—		10,937
Land sales		—			—			—		—		—
Fee building		—			730			—		—		730
		—			11,667			—		—		11,667
Selling and marketing expenses		—			(7,466	)		—		—		(7,466	)
General and administrative expenses		221			(6,244	)		—		—		(6,023	)
Equity in net loss of unconsolidated joint ventures		—			(1,937	)		—		—		(1,937	)
Equity in net loss of subsidiaries		(10,530	)		—			—		10,530		—
Interest expense		—			(718	)		—		—		(718	)
Project abandonment costs		—			(14,036	)		—		—		(14,036	)
Loss on early extinguishment of debt		(123	)		—			—		—		(123	)
Other income (expense), net		193			30			—		—		223
Pretax loss		(10,239	)		(18,704	)		—		10,530		(18,413	)
Benefit for income taxes		1,763			8,174			—		—		9,937
Net loss		(8,476	)		(10,530	)		—		10,530		(8,476	)
Net loss attributable to non-controlling interest in subsidiary		—			—			—		—		—
Net loss attributable to The New Home Company Inc.	$	(8,476	)	$	(10,530	)	$	—	$	10,530	$	(8,476	)

	Three Months Ended March 31, 2019
	NWHM			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Consolidating Adjustments		Consolidated NWHM
	(Dollars in thousands)
Revenues:
Home sales	$	—		$	99,186		$	—	$	—	$	99,186
Fee building		—			19,662			—		—		19,662
		—			118,848			—		—		118,848
Cost of Sales:
Home sales		—			86,569			—		—		86,569
Fee building		—			19,268			—		—		19,268
		—			105,837			—		—		105,837
Gross Margin:
Home sales		—			12,617			—		—		12,617
Fee building		—			394			—		—		394
		—			13,011			—		—		13,011
Selling and marketing expenses		—			(8,679	)		—		—		(8,679	)
General and administrative expenses		(566	)		(6,825	)		—		—		(7,391	)
Equity in net income of unconsolidated joint ventures		—			184			—		—		184
Equity in net loss of subsidiaries		(1,712	)		—			—		1,712		—
Gain on early extinguishment of debt		417			—			—		—		417
Project abandonment costs		—			(5	)		—		—		(5	)
Other income (expense), net		(62	)		(126	)		—		—		(188	)
Pretax loss		(1,923	)		(2,440	)		—		1,712		(2,651	)
(Provision) benefit for income taxes		(64	)		728			—		—		664
Net loss		(1,987	)		(1,712	)		—		1,712		(1,987	)
Net loss attributable to non-controlling interest in subsidiary		—			—			—		—		—
Net loss attributable to The New Home Company Inc.	$	(1,987	)	$	(1,712	)	$	—	$	1,712	$	(1,987	)

SUPPLEMENTAL CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Three Months Ended March 31, 2020
	NWHM			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Consolidating Adjustments			Consolidated NWHM
	(Dollars in thousands)
Net cash (used in) provided by operating activities	$	(5,549	)	$	22,978		$	5	$	(133	)	$	17,301
Investing activities:
Purchases of property and equipment		(68	)		(57	)		—		—			(125	)
Contributions and advances to unconsolidated joint ventures		—			(2,057	)		—		—			(2,057	)
Contributions to subsidiaries from corporate		(21,800	)		—			—		21,800			—
Distributions of capital from subsidiaries to corporate		38,217			—			—		(38,217	)		—
Distributions of capital and repayment of advances from unconsolidated joint ventures		—			1,100			—		—			1,100
Net cash provided by (used in) investing activities	$	16,349		$	(1,014	)	$	—	$	(16,417	)	$	(1,082	)
Financing activities:
Repurchase of senior notes		(4,827	)		—			—		—			(4,827	)
Contributions to subsidiaries from corporate		—			21,800			—		(21,800	)		—
Distributions to corporate from subsidiaries		—			(38,350	)		—		38,350			—
Repurchases of common stock		(2,233	)		—			—		—			(2,233	)
Tax withholding paid on behalf of employees for stock awards		(303	)		—			—		—			(303	)
Net cash used in financing activities	$	(7,363	)	$	(16,550	)	$	—	$	16,550		$	(7,363	)
Net increase in cash, cash equivalents and restricted cash		3,437			5,414			5		—			8,856
Cash, cash equivalents and restricted cash – beginning of period		66,166			13,095			170		—			79,431
Cash, cash equivalents and restricted cash – end of period	$	69,603		$	18,509		$	175	$	—		$	88,287

	Three Months Ended March 31, 2019
	NWHM			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated NWHM
	(Dollars in thousands)
Net cash (used in) provided by operating activities	$	(14,259	)	$	2,035		$	(8	)	$	—		$	(12,232	)
Investing activities:
Purchases of property and equipment		—			(5	)		—			—			(5	)
Contributions and advances to unconsolidated joint ventures		—			(1,335	)		—			—			(1,335	)
Contributions to subsidiaries from corporate		(46,000	)		—			—			46,000			—
Distributions of capital from subsidiaries to corporate		39,000			—			—			(39,000	)		—
Distributions of capital and repayment of advances from unconsolidated joint ventures		—			2,562			—			—			2,562
Net cash (used in) provided by investing activities	$	(7,000	)	$	1,222		$	—		$	7,000		$	1,222
Financing activities:
Borrowings from credit facility		30,000			—			—			—			30,000
Repayments of credit facility		(13,500	)		—			—			—			(13,500	)
Repurchase of senior notes		(4,512	)		—			—			—			(4,512	)
Contributions to subsidiaries from corporate		—			46,000			—			(46,000	)		—
Distributions to corporate from subsidiaries		—			(39,000	)		—			39,000			—
Repurchases of common stock		(1,042	)		—			—			—			(1,042	)
Tax withholding paid on behalf of employees for stock awards		(488	)		—			—			—			(488	)
Net cash provided by financing activities	$	10,458		$	7,000		$	—		$	(7,000	)	$	10,458
Net (decrease) increase in cash, cash equivalents and restricted cash		(10,801	)		10,257			(8	)		—			(552	)
Cash, cash equivalents and restricted cash – beginning of period		28,877			13,518			147			—			42,542
Cash, cash equivalents and restricted cash – end of period	$	18,076		$	23,775		$	139		$	—		$	41,990