Note 17 - Supplemental Guarantor Information

6 Months Ended

Jun. 30, 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

	June 30, 2020
	NWHM		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating Adjustments			Consolidated NWHM
	(Dollars in thousands)
Assets
Cash and cash equivalents	$	39,871	$	45,543	$	174	$	—		$	85,588
Restricted cash		—		144		—		—			144
Contracts and accounts receivable		4		7,525		—		(417	)		7,112
Intercompany receivables		259,822		—		—		(259,822	)		—
Due from affiliates		1		139		—		—			140
Real estate inventories		—		370,949		—		—			370,949
Investment in and advances to unconsolidated joint ventures		—		12,931		—		—			12,931
Investment in subsidiaries		150,811		—		—		(150,811	)		—
Deferred tax asset, net		15,237		629		—		—			15,866
Other assets		37,820		11,017		27		—			48,864
Total assets	$	503,566	$	448,877	$	201	$	(411,050	)	$	541,594
Liabilities and equity
Accounts payable	$	127	$	15,985	$	—	$	—		$	16,112
Accrued expenses and other liabilities		11,349		22,318		26		(413	)		33,280
Intercompany payables		—		259,822		—		(259,822	)		—
Due to affiliates		—		4		—		(4	)		—
Senior notes, net		295,124		—		—		—			295,124
Total liabilities		306,600		298,129		26		(260,239	)		344,516
Total stockholders' equity		196,966		150,748		63		(150,811	)		196,966
Non-controlling interest in subsidiary		—		—		112		—			112
Total equity		196,966		150,748		175		(150,811	)		197,078
Total liabilities and equity	$	503,566	$	448,877	$	201	$	(411,050	)	$	541,594

	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 June 30, 2020
	NWHM			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Consolidating Adjustments		Consolidated NWHM
	(Dollars in thousands)
Revenues:
Home sales	$	—		$	77,757		$	—	$	—	$	77,757
Land sales		—			10			—		—		10
Fee building		—			21,193			—		—		21,193
		—			98,960			—		—		98,960
Cost of Sales:
Home sales		—			66,216			—		—		66,216
Home sales impairments		—			19,000			—		—		19,000
Land sales		—			10			—		—		10
Fee building		—			20,985			—		—		20,985
		—			106,211			—		—		106,211
Gross Margin:
Home sales		—			(7,459	)		—		—		(7,459	)
Land sales		—			—			—		—		—
Fee building		—			208			—		—		208
		—			(7,251	)		—		—		(7,251	)
Selling and marketing expenses		—			(6,386	)		—		—		(6,386	)
General and administrative expenses		(960	)		(5,932	)		—		—		(6,892	)
Equity in net loss of unconsolidated joint ventures		—			(19,962	)		—		—		(19,962	)
Equity in net loss of subsidiaries		(25,858	)		—			—		25,858		—
Interest expense		—			(1,271	)		—		—		(1,271	)
Project abandonment costs		—			(94	)		—		—		(94	)
Gain on early extinguishment of debt		702			—			—		—		702
Other income (expense), net		(38	)		(30	)		—		—		(68	)
Pretax loss		(26,154	)		(40,926	)		—		25,858		(41,222	)
Benefit for income taxes		1,861			15,068			—		—		16,929
Net loss		(24,293	)		(25,858	)		—		25,858		(24,293	)
Net loss attributable to non-controlling interest in subsidiary		—			—			—		—		—
Net loss attributable to The New Home Company Inc.	$	(24,293	)	$	(25,858	)	$	—	$	25,858	$	(24,293	)

	Three Months Ended June 30, 2019
	NWHM			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated NWHM
	(Dollars in thousands)
Revenues:
Home sales	$	—		$	140,464		$	—		$	—		$	140,464
Fee building		—			22,285			—			—			22,285
		—			162,749			—			—			162,749
Cost of Sales:
Home sales		—			123,582			(57	)		—			123,525
Fee building		—			21,770			—			—			21,770
		—			145,352			(57	)		—			145,295
Gross Margin:
Home sales		—			16,882			57			—			16,939
Fee building		—			515			—			—			515
		—			17,397			57			—			17,454
Selling and marketing expenses		—			(9,683	)		—			—			(9,683	)
General and administrative expenses		617			(6,458	)		—			—			(5,841	)
Equity in net income of unconsolidated joint ventures		—			185			—			—			185
Equity in net income of subsidiaries		1,087			—			—			(1,087	)		—
Project abandonment costs		—			(14	)		—			—			(14	)
Gain on early extinguishment of debt		552			—			—			—			552
Other income (expense), net		(106	)		18			—			—			(88	)
Pretax income		2,150			1,445			57			(1,087	)		2,565
Provision for income taxes		(578	)		(396	)		—			—			(974	)
Net income		1,572			1,049			57			(1,087	)		1,591
Net income attributable to non-controlling interest in subsidiary		—			—			(19	)		—			(19	)
Net income attributable to The New Home Company Inc.	$	1,572		$	1,049		$	38		$	(1,087	)	$	1,572

	Six Months Ended June 30, 2020
	NWHM			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Consolidating Adjustments		Consolidated NWHM
	(Dollars in thousands)
Revenues:
Home sales	$	—		$	173,416		$	—	$	—	$	173,416
Land sales		—			157			—		—		157
Fee building		—			57,420			—		—		57,420
		—			230,993			—		—		230,993
Cost of Sales:
Home sales		—			150,938			—		—		150,938
Home sales impairments		—			19,000			—		—		19,000
Land sales		—			157			—		—		157
Fee building		—			56,482			—		—		56,482
		—			226,577			—		—		226,577
Gross Margin:
Home sales		—			3,478			—		—		3,478
Land sales		—			—			—		—		—
Fee building		—			938			—		—		938
		—			4,416			—		—		4,416
Selling and marketing expenses		—			(13,852	)		—		—		(13,852	)
General and administrative expenses		(739	)		(12,176	)		—		—		(12,915	)
Equity in net loss of unconsolidated joint ventures		—			(21,899	)		—		—		(21,899	)
Equity in net loss of subsidiaries		(36,388	)		—			—		36,388		—
Interest expense		—			(1,989	)		—		—		(1,989	)
Project abandonment costs		—			(14,130	)		—		—		(14,130	)
Gain on early extinguishment of debt		579			—			—		—		579
Other income (expense), net		155			—			—		—		155
Pretax loss		(36,393	)		(59,630	)		—		36,388		(59,635	)
Benefit for income taxes		3,624			23,242			—		—		26,866
Net loss		(32,769	)		(36,388	)		—		36,388		(32,769	)
Net loss attributable to non-controlling interest in subsidiary		—			—			—		—		—
Net loss attributable to The New Home Company Inc.	$	(32,769	)	$	(36,388	)	$	—	$	36,388	$	(32,769	)

	Six Months Ended June 30, 2019
	NWHM			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments		Consolidated NWHM
	(Dollars in thousands)
Revenues:
Home sales	$	—		$	239,650		$	—		$	—	$	239,650
Fee building		—			41,947			—			—		41,947
		—			281,597			—			—		281,597
Cost of Sales:
Home sales		—			210,151			(57	)		—		210,094
Fee building		—			41,038			—			—		41,038
		—			251,189			(57	)		—		251,132
Gross Margin:
Home sales		—			29,499			57			—		29,556
Fee building		—			909			—			—		909
		—			30,408			57			—		30,465
Selling and marketing expenses		—			(18,362	)		—			—		(18,362	)
General and administrative expenses		51			(13,283	)		—			—		(13,232	)
Equity in net income of unconsolidated joint ventures		—			369			—			—		369
Equity in net loss of subsidiaries		(625	)		—			—			625		—
Project abandonment costs		—			(19	)		—			—		(19	)
Gain on early extinguishment of debt		969			—			—			—		969
Other income (expense), net		(168	)		(108	)		—			—		(276	)
Pretax income (loss)		227			(995	)		57			625		(86	)
(Provision) benefit for income taxes		(642	)		332			—			—		(310	)
Net income (loss)		(415	)		(663	)		57			625		(396	)
Net income attributable to non-controlling interest in subsidiary		—			—			(19	)		—		(19	)
Net income (loss) attributable to The New Home Company Inc.	$	(415	)	$	(663	)	$	38		$	625	$	(415	)

SUPPLEMENTAL CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six Months Ended June 30, 2020
	NWHM			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Consolidating Adjustments			Consolidated NWHM
	(Dollars in thousands)
Net cash (used in) provided by operating activities	$	(23,225	)	$	45,377		$	4	$	(133	)	$	22,023
Investing activities:
Purchases of property and equipment		(84	)		(59	)		—		—			(143	)
Contributions and advances to unconsolidated joint ventures		—			(3,847	)		—		—			(3,847	)
Contributions to subsidiaries from corporate		(35,690	)		—			—		35,690			—
Distributions of capital from subsidiaries to corporate		46,806			—			—		(46,806	)		—
Distributions of capital and repayment of advances from unconsolidated joint ventures		—			2,370			—		—			2,370
Net cash provided by (used in) investing activities	$	11,032		$	(1,536	)	$	—	$	(11,116	)	$	(1,620	)
Financing activities:
Repurchase of senior notes		(9,825	)		—			—		—			(9,825	)
Contributions to subsidiaries from corporate		—			35,690			—		(35,690	)		—
Distributions to corporate from subsidiaries		—			(46,939	)		—		46,939			—
Proceeds from note payable		7,036			—			—		—			7,036
Repayment of note payable		(7,036	)		—			—		—			(7,036	)
Payment of debt issuance costs		(255	)		—			—		—			(255	)
Repurchases of common stock		(3,718	)		—			—		—			(3,718	)
Tax withholding paid on behalf of employees for stock awards		(304	)		—			—		—			(304	)
Net cash used in financing activities	$	(14,102	)	$	(11,249	)	$	—	$	11,249		$	(14,102	)
Net (decrease) increase in cash, cash equivalents and restricted cash		(26,295	)		32,592			4		—			6,301
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	$	39,871		$	45,687		$	174	$	—		$	85,732

	Six Months Ended June 30, 2019
	NWHM			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Consolidating Adjustments			Consolidated NWHM
	(Dollars in thousands)
Net cash (used in) provided by operating activities	$	(36,110	)	$	54,970		$	32	$	—		$	18,892
Investing activities:
Purchases of property and equipment		(1	)		(7	)		—		—			(8	)
Contributions and advances to unconsolidated joint ventures		—			(4,120	)		—		—			(4,120	)
Contributions to subsidiaries from corporate		(66,575	)		—			—		66,575			—
Distributions of capital from subsidiaries to corporate		91,700			—			—		(91,700	)		—
Distributions of capital and repayment of advances from unconsolidated joint ventures		—			4,928			—		—			4,928
Net cash provided by investing activities	$	25,124		$	801		$	—	$	(25,125	)	$	800
Financing activities:
Borrowings from credit facility		40,000			—			—		—			40,000
Repayments of credit facility		(41,500	)		—			—		—			(41,500	)
Repurchase of senior notes		(10,856	)		—			—		—			(10,856	)
Contributions to subsidiaries from corporate		—			66,575			—		(66,575	)		—
Distributions to corporate from subsidiaries		—			(91,700	)		—		91,700			—
Repurchases of common stock		(1,042	)		—			—		—			(1,042	)
Tax withholding paid on behalf of employees for stock awards		(488	)		—			—		—			(488	)
Net cash used in financing activities	$	(13,886	)	$	(25,125	)	$	—	$	25,125		$	(13,886	)
Net (decrease) increase in cash, cash equivalents and restricted cash		(24,872	)		30,646			32		—			5,806
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	$	4,005		$	44,164		$	179	$	—		$	48,348