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Share Name | Share Symbol | Market | Type |
---|---|---|---|
LGI Homes Inc | NASDAQ:LGIH | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-1.67 | -1.60% | 102.81 | 99.25 | 147.62 | 105.48 | 102.56 | 104.90 | 90,692 | 22:30:00 |
|
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)
|
||
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Delaware
|
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46-3088013
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(State or other jurisdiction of incorporation or organization)
|
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(I.R.S. Employer Identification No.)
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|
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1450 Lake Robbins Drive, Suite 430, The Woodlands, Texas
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77380
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(Address of principal executive offices)
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|
(Zip code)
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(281) 362-8998
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||
(Registrant’s Telephone Number, Including Area Code)
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Title of each class
Common Stock ($0.01 par value)
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Name of each exchange on which registered
NASDAQ
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Large accelerated filer
x
|
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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(Do not check if a smaller reporting company)
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Emerging growth company
o
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Page
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Central
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Southwest
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Southeast
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Florida
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Northwest
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Midwest
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Houston, TX
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Phoenix, AZ
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Atlanta, GA
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Tampa, FL
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Seattle, WA
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Minneapolis, MN
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Dallas/Ft. Worth, TX
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Tucson, AZ
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Charlotte, NC/SC
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Orlando, FL
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Portland, OR
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San Antonio, TX
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Albuquerque, NM
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Nashville, TN
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Fort Myers, FL
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Sacramento, CA
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Austin, TX
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Denver, CO
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Raleigh, NC
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Jacksonville, FL
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Oklahoma City, OK
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Colorado Springs, CO
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Winston-Salem, NC
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Las Vegas, NV
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Birmingham, AL
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Year Ended December 31, 2017
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As of December 31, 2017
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||||||||
Division
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Home Closings
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|
Owned
(1)
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Controlled
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Total
|
||||
Central
|
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2,613
|
|
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11,811
|
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8,173
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|
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19,984
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Southwest
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|
942
|
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2,184
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|
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775
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2,959
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Southeast
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973
|
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4,518
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6,052
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10,570
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Florida
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1,014
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|
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1,613
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2,372
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|
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3,985
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Northwest
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300
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|
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643
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1,253
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1,896
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Midwest
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3
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182
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133
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315
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Total
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5,845
|
|
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20,951
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18,758
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39,709
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(1)
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Of the
20,951
owned lots as of
December 31, 2017
,
11,722
were raw/under development lots and
9,229
were finished lots.
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Division
|
|
Homes in Inventory
(1)
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Inventory Value
(1)
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|||
Central
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1,041
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$
|
134,414
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Southwest
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|
565
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91,672
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Southeast
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586
|
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68,239
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Florida
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476
|
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66,881
|
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Northwest
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181
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34,204
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Midwest
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64
|
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10,644
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|
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Total
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2,913
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|
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$
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406,054
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(1)
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Includes homes in progress and completed homes; excludes information centers.
|
Name
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Age
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|
Position
|
Eric Lipar
|
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47
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Chief Executive Officer and Chairman of the Board
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Michael Snider
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46
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President and Chief Operating Officer
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Charles Merdian
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48
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Chief Financial Officer and Treasurer
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Jack Lipar
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49
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Executive Vice President of Acquisitions
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Rachel Eaton
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36
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Chief Marketing Officer
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Margaret Britton
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55
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Chief Administrative Officer and Secretary
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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.
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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.
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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.
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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.
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•
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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;
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•
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our indebtedness may increase our vulnerability to adverse economic and industry conditions with no assurance that our profitability will increase with higher financing cost;
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•
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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
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•
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the terms of any refinancing may not be as favorable as the terms of the indebtedness being refinanced.
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•
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general market conditions;
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•
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the market’s perception of our growth potential;
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•
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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;
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•
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our current debt levels;
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•
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our current and expected future earnings;
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•
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our cash flow; and
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•
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the market price per share of our common stock.
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•
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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;
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•
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a slowdown in the homebuilding industry;
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•
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volatility and uncertainty in the credit markets and broader financial markets;
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•
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the cyclical and seasonal nature of our business;
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•
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our future operating results and financial condition;
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•
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our business operations;
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•
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changes in our business and investment strategy;
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•
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the success of our operations in recently opened new markets and our ability to expand into additional new markets;
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•
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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;
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•
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our ability to develop our projects successfully or within expected timeframes;
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•
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our ability to identify potential acquisition targets and close such acquisitions;
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•
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our ability to successfully integrate any acquisitions with our existing operations;
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•
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availability of land to acquire and our ability to acquire such land on favorable terms or at all;
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•
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availability, terms and deployment of capital;
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•
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decisions of the lender group of our revolving credit facility;
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•
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the occurrence of the specific conversion events that enable early conversion of our 4.25% Convertible Notes due 2019;
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•
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decline in the market value of our land portfolio;
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•
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disruption in the terms or availability of mortgage financing or increase in the number of foreclosures in our markets;
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•
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shortages of or increased prices for labor, land, or raw materials used in land development and housing construction;
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•
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delays in land development or home construction resulting from natural disasters, adverse weather conditions or other events outside our control;
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•
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uninsured losses in excess of insurance limits;
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•
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the cost and availability of insurance and surety bonds;
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•
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changes in, liabilities under, or the failure or inability to comply with, governmental laws and regulations;
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•
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the timing of receipt of regulatory approvals and the opening of projects;
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•
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the degree and nature of our competition;
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•
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increases in taxes or government fees;
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•
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poor relations with the residents of our projects;
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•
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future litigation, arbitration or other claims;
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•
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availability of qualified personnel and third-party contractors and subcontractors;
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•
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our ability to retain our key personnel;
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•
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our leverage and future debt service obligations;
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•
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the impact on our business of any future government shutdown;
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•
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other risks and uncertainties inherent in our business; and
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•
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other factors we discuss under the section entitled “
Management’s Discussion and Analysis of Financial Condition and Results of Operations
.”
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High
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Low
|
||||
2016
|
|
|
|
|
||||
1st Quarter
|
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$
|
24.33
|
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$
|
19.49
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2nd Quarter
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$
|
31.94
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|
|
$
|
23.44
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3rd Quarter
|
|
$
|
39.46
|
|
|
$
|
32.20
|
|
4th Quarter
|
|
$
|
36.97
|
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$
|
28.63
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|
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.
|
|
|
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
|
|
|
|
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 Year LGI Homes Chart |
1 Month LGI Homes Chart |
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