Cover page
Cover page - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 09, 2022 | Jun. 30, 2021 | |
Entity Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-38545 | ||
Entity Registrant Name | LANDSEA HOMES CORPORATION | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 82-2196021 | ||
Entity Address, Address Line Two | Suite 300 | ||
Entity Address, Address Line One | 660 Newport Center Drive | ||
Entity Address, City or Town | Newport Beach | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92660 | ||
City Area Code | 949 | ||
Local Phone Number | 345-8080 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 91.6 | ||
Entity Common Stock, Shares Outstanding | 46,436,185 | ||
Entity Central Index Key | 0001721386 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Common Stock | NASDAQ - ALL MARKETS | |||
Entity Information [Line Items] | |||
Title of 12(b) Security | Common Stock, par value $0.0001 per share | ||
Trading Symbol | LSEA | ||
Security Exchange Name | NASDAQ | ||
Warrant | NASDAQ - ALL MARKETS | |||
Entity Information [Line Items] | |||
Title of 12(b) Security | Warrants exercisable for Common Stock | ||
Trading Symbol | LSEAW | ||
Security Exchange Name | NASDAQ |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Firm ID | 238 |
Auditor Name | PricewaterhouseCoopers LLP |
Auditor Location | Los Angeles, California |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Assets | ||
Cash and cash equivalents | $ 342,810 | $ 105,778 |
Cash held in escrow | 4,079 | 11,618 |
Restricted cash | 443 | 4,270 |
Real estate inventories (including related party interest of $7,509 and $18,721, respectively) | 844,792 | 687,819 |
Due from affiliates | 4,465 | 2,663 |
Investment in and advances to unconsolidated joint ventures (including related party interest of $70 and $1,320, respectively) | 470 | 21,342 |
Goodwill | 24,457 | 20,705 |
Other assets (including right-of-use assets with a related party of $2,010 and $0, respectively) | 43,998 | 41,569 |
Total assets | 1,265,514 | 895,764 |
Liabilities | ||
Accounts payable | 73,734 | 36,243 |
Accrued expenses and other liabilities (including lease liabilities with a related party of $2,010 and $0, respectively) | 97,724 | 62,869 |
Due to affiliates | 2,357 | 2,357 |
Warrant liability | 9,185 | 0 |
Notes and other debts payable, net | 461,117 | 264,809 |
Total liabilities | 644,117 | 366,278 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.0001 par value, 50,000,000 shares authorized, none issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | 0 | 0 |
Common stock, $0.0001 par value, 500,000,000 shares authorized, 46,281,091 and 32,557,303 issued and outstanding as of December 31, 2021 and December 31, 2020 | 5 | 3 |
Additional paid-in capital | 535,345 | 496,171 |
Retained earnings | 84,797 | 32,011 |
Total stockholders' equity | 620,147 | 528,185 |
Noncontrolling interests | 1,250 | 1,301 |
Total equity | 621,397 | 529,486 |
Total liabilities and equity | $ 1,265,514 | $ 895,764 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Real estate inventories | $ 844,792 | $ 687,819 |
Investment in and advances to unconsolidated joint ventures | 470 | 21,342 |
Other assets | 43,998 | 41,569 |
Accrued expenses and other liabilities | $ 97,724 | $ 62,869 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized shares (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, issued shares (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | |
Common stock, par value (in dollars per share) | $ 0.0001 | |
Common stock, shares authorized (in shares) | 500,000,000 | |
Common stock, shares issued (in shares) | 46,281,091 | 32,557,303 |
Common stock, shares outstanding (in shares) | 46,281,091 | 32,557,303 |
Affiliated Entity | ||
Real estate inventories | $ 7,509 | $ 18,721 |
Investment in and advances to unconsolidated joint ventures | 70 | 1,320 |
Other assets | 2,010 | 0 |
Accrued expenses and other liabilities | $ 2,010 | $ 0 |
Consolidated Statement of Opera
Consolidated Statement of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue | $ 1,023,304 | $ 734,608 | $ 630,988 |
Cost of sales | 840,706 | 639,737 | 531,529 |
Inventory impairments | 0 | 3,413 | 0 |
Gross margin | 182,598 | 94,871 | 99,459 |
Sales and marketing expenses | 52,840 | 48,100 | 26,522 |
General and administrative expenses | 70,266 | 42,598 | 34,884 |
Total operating expenses | 123,106 | 90,698 | 61,406 |
Income from operations | 59,492 | 4,173 | 38,053 |
Other income (expense), net | 3,886 | 80 | (1,602) |
Equity in net income (loss) of unconsolidated joint ventures (including related party interest of $1,250, $1,146, and $1,908, respectively) | 1,262 | (16,418) | (7,901) |
Gain on remeasurement of warrant liability | 2,090 | 0 | 0 |
Pretax income (loss) | 66,730 | (12,165) | 28,550 |
Provision (benefit) for income taxes | 13,995 | (3,081) | 6,159 |
Net income (loss) | 52,735 | (9,084) | 22,391 |
Net (loss) income attributable to noncontrolling interests | (51) | (133) | 5,191 |
Net income (loss) attributable to Landsea Homes Corporation | $ 52,786 | $ (8,951) | $ 17,200 |
Earnings (loss) per share: | |||
Basic (in dollars per share) | $ 1.14 | $ (0.27) | $ 0.53 |
Diluted (in dollars per share) | $ 1.14 | $ (0.27) | $ 0.53 |
Weighted average shares outstanding: | |||
Basic (in shares) | 45,198,722 | 32,557,303 | 32,557,303 |
Diluted (in shares) | 45,250,718 | 32,557,303 | 32,557,303 |
Home Sales | |||
Revenue | $ 936,400 | $ 734,608 | $ 568,872 |
Cost of sales and expenses | 772,575 | 636,324 | 478,054 |
Gross margin | 163,825 | 94,871 | 90,818 |
Lot Sales and other | |||
Revenue | 86,904 | 0 | 62,116 |
Cost of sales and expenses | 68,131 | 0 | 53,475 |
Gross margin | $ 18,773 | $ 0 | $ 8,641 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Cumulative Effect, Period of Adoption, Adjusted Balance | Common Stock | Common StockCumulative Effect, Period of Adoption, Adjustment | Common StockCumulative Effect, Period of Adoption, Adjusted Balance | Additional paid-in capital | Additional paid-in capitalCumulative Effect, Period of Adoption, Adjustment | Additional paid-in capitalCumulative Effect, Period of Adoption, Adjusted Balance | Retained earnings (deficit) | Retained earnings (deficit)Cumulative Effect, Period of Adoption, Adjusted Balance | Noncontrolling Interests | Noncontrolling InterestsCumulative Effect, Period of Adoption, Adjusted Balance |
Beginning Balance (in shares) at Dec. 31, 2018 | 1,000 | 32,556,303 | 32,557,303 | ||||||||||
Beginning balance at Dec. 31, 2018 | $ 545,156 | $ 0 | $ 545,156 | $ 0 | $ 3 | $ 3 | $ 508,823 | $ (3) | $ 508,820 | $ 23,762 | $ 23,762 | $ 12,571 | $ 12,571 |
Increase (Decrease) in Shareholders' Equity | |||||||||||||
Contributions from noncontrolling interests | 130 | 130 | |||||||||||
Net transfers to parent | 15,693 | 15,693 | |||||||||||
Net (loss) income of unconsolidated joint ventures | 22,391 | 17,200 | 5,191 | ||||||||||
Ending Balance (in shares) at Dec. 31, 2019 | 32,557,303 | ||||||||||||
Ending balance at Dec. 31, 2019 | 583,370 | $ 3 | 524,513 | 40,962 | 17,892 | ||||||||
Increase (Decrease) in Shareholders' Equity | |||||||||||||
Contributions from noncontrolling interests | 198 | 198 | |||||||||||
Net transfers to parent | (29,584) | (28,342) | (1,242) | ||||||||||
Distributions to noncontrolling interests | (15,414) | (15,414) | |||||||||||
Net (loss) income of unconsolidated joint ventures | $ (9,084) | (8,951) | (133) | ||||||||||
Ending Balance (in shares) at Dec. 31, 2020 | 32,557,303 | 32,557,303 | |||||||||||
Ending balance at Dec. 31, 2020 | $ 529,486 | $ 3 | 496,171 | 32,011 | 1,301 | ||||||||
Increase (Decrease) in Shareholders' Equity | |||||||||||||
Recapitalization transaction, net of fees and deferred taxes (in shares) | 13,673,722 | ||||||||||||
Recapitalization transaction, net of fees and deferred taxes | 33,368 | $ 2 | 33,366 | ||||||||||
Vesting of restricted stock units (in shares) | 50,066 | ||||||||||||
Stock-based compensation expense | 5,808 | 5,808 | |||||||||||
Net (loss) income of unconsolidated joint ventures | $ 52,735 | 52,786 | (51) | ||||||||||
Ending Balance (in shares) at Dec. 31, 2021 | 46,281,091 | 46,281,091 | |||||||||||
Ending balance at Dec. 31, 2021 | $ 621,397 | $ 5 | $ 535,345 | $ 84,797 | $ 1,250 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities: | |||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | $ 52,735 | $ (9,084) | $ 22,391 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 5,393 | 3,580 | 2,960 |
Gain on remeasurement of warrant liability | (2,090) | 0 | 0 |
Stock-based compensation expense | 5,808 | 0 | 0 |
Gain on forgiveness of PPP loans | (4,266) | 0 | 0 |
Inventory impairments | 0 | 3,413 | 0 |
Abandoned project costs | 555 | 380 | 696 |
Distributions of earnings from unconsolidated joint ventures | 0 | 0 | 3,561 |
Equity in net (earnings) loss of unconsolidated joint ventures | (1,262) | 16,418 | 7,901 |
Deferred taxes | (2,826) | (5,024) | (1,345) |
Changes in operating assets and liabilities: | |||
Cash held in escrow | 7,539 | (2,782) | (7,132) |
Real estate inventories | (59,655) | (19,895) | 94,382 |
Due from affiliates | (1,802) | (174) | 1,445 |
Notes receivable from lot sales | 0 | 0 | 17,450 |
Other assets | (6,045) | (756) | (3,605) |
Accounts payable | 35,850 | 15,744 | (20,601) |
Accrued expenses and other liabilities | 3,466 | 10,779 | (11,908) |
Due to affiliates | 0 | 1,010 | (153) |
Net cash provided by operating activities | 33,400 | 13,609 | 106,042 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (3,176) | (1,794) | (5,585) |
Distributions of capital from unconsolidated joint ventures | 22,134 | 5,196 | 1,681 |
Repayments of advances from unconsolidated joint ventures | 0 | 0 | 5,000 |
Payments for business acquisition, net of cash acquired | (44,537) | (128,528) | (23,562) |
Net cash used in investing activities | (25,579) | (125,126) | (22,466) |
Cash flows from financing activities: | |||
Borrowings from notes and other debts payable | 910,487 | 600,391 | 276,559 |
Repayments of notes and other debts payable | (737,683) | (505,942) | (296,203) |
Proceeds from merger, net of fees and other costs | 64,434 | 0 | 0 |
Repayment of convertible note | (1,500) | 0 | 0 |
Repayments of land bank financing | 0 | 0 | (41,667) |
Contributions from noncontrolling interests | 0 | 198 | 130 |
Distributions to noncontrolling interests | 0 | (15,414) | 0 |
Deferred offering costs paid | (1,832) | (7,466) | 0 |
Debt issuance costs paid | (8,522) | (5,532) | (1,299) |
Cash (distributed to) provided by parent, net | 0 | (1,048) | 15,693 |
Net cash provided by (used in) financing activities | 225,384 | 65,187 | (46,787) |
Net increase (decrease) in cash, cash equivalents, and restricted cash | 233,205 | (46,330) | 36,789 |
Cash, cash equivalents, and restricted cash at beginning of year | 110,048 | 156,378 | 119,589 |
Cash, cash equivalents, and restricted cash at end of year | $ 343,253 | $ 110,048 | $ 156,378 |
Consolidated Statement of Ope_2
Consolidated Statement of Operations - Parenthetical - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue | $ 1,023,304 | $ 734,608 | $ 630,988 |
Diluted (in dollars per share) | $ 1.14 | $ (0.27) | $ 0.53 |
Diluted (in shares) | 45,250,718 | 32,557,303 | 32,557,303 |
Equity in net income from unconsolidated joint ventures | $ 1,262 | $ (16,418) | $ (7,901) |
Affiliated Entity | |||
Equity in net income from unconsolidated joint ventures | 1,250 | 1,146 | 1,908 |
Home Sales | |||
Revenue | 936,400 | 734,608 | 568,872 |
Cost of sales and expenses | 772,575 | 636,324 | 478,054 |
Home Sales | Affiliated Entity | |||
Revenue | 10,751 | 0 | 0 |
Capitalized related party interest | 11,670 | 14,110 | 15,526 |
Cost of sales and expenses | 8,770 | 0 | 0 |
Lot Sales and other | |||
Revenue | 86,904 | 0 | 62,116 |
Cost of sales and expenses | 68,131 | 0 | 53,475 |
Lot Sales and other | Affiliated Entity | |||
Revenue | 3,226 | 0 | 0 |
Capitalized related party interest | 0 | 0 | 120 |
Cost of sales and expenses | $ 2,966 | $ 0 | $ 0 |
Company
Company | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Company | Company Landsea Homes Corporation (“LHC” or the “Company”), a majority owned subsidiary of Landsea Holdings Corporation (“Landsea Holdings”), together with its subsidiaries, is engaged in the acquisition, development, and sale of homes and lots in Arizona, California, Florida, New Jersey, New York, and Texas. The Company's operations are organized into the following five reportable segments: Arizona, California, Florida, Metro New York and Texas. On August 31, 2020, LHC and its parent, Landsea Holdings, entered into an Agreement and Plan of Merger (the “Merger Agreement”) with LF Capital Acquisition Corp. (“LF Capital”) and LFCA Merger Sub, Inc. (the “Merger Sub”), a direct, wholly-owned subsidiary of LF Capital. The Merger Agreement provided for, among other things, the merger of Merger Sub with and into Landsea Homes Incorporated ("LHI"), previously a wholly-owned subsidiary of Landsea Holdings, with LHI continuing as the surviving corporation (the "Merger"). On January 7, 2021 (the "Closing Date"), the Merger was consummated pursuant to the Merger Agreement (the "Closing"). The name of the surviving company, LF Capital Acquisition Corp., was changed at that time to Landsea Homes Corporation. Subject to the terms of the Merger Agreement, Landsea Holdings received $343.8 million of stock consideration, consisting of 32.6 million newly issued shares of LF Capital Acquisition Corp.’s publicly-traded Class A common stock. The shares were valued at $10.56 per share for purposes of determining the aggregate number of shares payable to Landsea Holdings (the “Stock Consideration”). Upon Closing, Level Field Capital, LLC (the “Sponsor”) held 1.0 million shares that are subject to surrender and forfeiture for no consideration in the event the common stock does not reach certain thresholds during the twenty-four month period following the closing of the Merger (“Earnout Shares”). The Sponsor transferred 0.5 million Earnout Shares to Landsea Holdings. Additionally, the Sponsor forfeited 2.3 million private placement warrants and transferred 2.2 million private placement warrants to Landsea Holdings (such private placement warrants, each exercisable to purchase one share of Common Stock at an exercise price of $11.50 per share, are referred to as the “Private Placement Warrants”, and together with the public warrants they are referred to as the "Warrants"). In connection with the Merger, the Company received $64.4 million from the Merger after payments of $28.7 million related to the public warrant amendment and $7.5 million in transaction expenses incurred. The Company incurred direct and incremental costs of approximately $16.7 million related to the equity issuance, consisting primarily of investment banking, legal, accounting and other professional fees, which were recorded to additional paid-in capital as a reduction of proceeds. The Company recorded $2.7 million in general and administrative expenses in 2021 related to the accelerated vesting of the phantom awards. The Company paid cash of $2.9 million for the phantom stock awards and issued 0.2 million shares with an issuance date value of $1.9 million at the time of the Merger. The Merger was accounted for as a reverse recapitalization. Under this method of accounting, LF Capital is treated as the “acquired” company for financial reporting purposes. This determination was primarily based on the current stockholder of LHC, Landsea Holdings, having a relative majority of the voting power of the combined entity, the operations of LHI prior to the Merger comprising the only ongoing operations of the combined entity, and senior management of LHI comprising the senior management of the combined entity. Accordingly, for accounting purposes, the financial statements of the combined entity represent a continuation of the financial statements of LHI with the acquisition being treated as the equivalent of LHI issuing stock for the net assets of LF Capital, accompanied by a recapitalization. The net assets of LHI are stated at historical cost, with no goodwill or other intangible assets recorded. The shares and net income (loss) per share available to holders of the LHI’s common stock, prior to the Merger, have been retroactively restated as shares reflecting the exchange ratio established in the Merger Agreement. We recorded an incremental $1.7 million to additional paid-in capital as part of our recapitalization transaction related to tax deductible transaction costs which required a detailed analysis that was finalized during the quarter ended December 31, 2021. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation and Consolidation —The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and include the accounts of the Company and all of its wholly owned, majority owned, and controlled subsidiaries, which are referred to as the Company, unless context requires otherwise. Non-controlling interest represents the proportionate equity interests in consolidated entities that are not wholly owned by the Company. All intercompany transactions and balances have been eliminated in consolidation. Prior to the Merger, the Company was historically funded as part of Landsea Holdings' treasury program. Cash and cash equivalents were primarily centrally managed through bank accounts legally owned by Landsea Holdings. Accordingly, cash and cash equivalents held by Landsea Holdings at the corporate level were not attributed to the Company for any of the periods presented prior to the merger. Only cash amounts legally owned by entities consolidated by the Company are reflected in the consolidated balance sheets. Transfers of cash, both to and from Landsea Holdings' treasury program, were reflected as a component of additional paid-in capital in the consolidated balance sheets and as a financing activity on the accompanying consolidated statements of cash flows. As the functional departments that made up the Company were not held by a single legal entity, balances between the Company and Landsea Holdings that were not historically cash settled were included in additional paid-in capital. Landsea Holdings holds a series of notes payable to affiliated entities of its parent. The cash Landsea Holdings received from this debt was partially utilized to fund operations of the Company. Related party interest incurred by Landsea Holdings (the "Related Party Interest") was historically pushed down to the Company and reflected on the consolidated balance sheets of the Company, primarily in real estate inventories, and on the consolidated statements of operations in cost of sales. Refer to Note 5 - Capitalized Interest for further detail. As the Company did not guarantee the notes payable nor have any obligations to repay the notes payable, and as the notes payable will not be assigned to the Company, the notes payable do not represent a liability of the Company and accordingly have not been reflected in the consolidated balance sheets. Additionally, in connection with the Merger, LHC is precluded from repaying Landsea Holdings' notes payable to the affiliated entities of its parent. Therefore, as of January 7, 2021, the Related Party Interest is no longer pushed down to LHC. During the periods presented in the consolidated financial statements prior to the Merger, the Company was included in the consolidated U.S. federal, and certain state and local, income tax returns filed by Landsea Holdings, where applicable. Income tax expense and other income tax related information contained in these consolidated financial statements are presented on a separate return basis as if the Company had filed its own tax returns. Additionally, certain tax attributes such as net operating losses or credit carryforwards are presented on a separate return basis, and accordingly, may differ in the future. In jurisdictions where the Company has been included in the tax returns filed by Landsea Holdings, any income tax payables or receivables resulting from the related income tax provisions have been reflected in the consolidated balance sheets and the effect of the push down is reflected within additional paid-in capital. Management of the Company believes that the assumptions underlying the consolidated financial statements reasonably reflect the utilization of services provided, or benefits received by the Company during the periods presented. Nevertheless, the consolidated financial statements may not be indicative of the Company’s future performance and therefore periods prior to the Merger do not necessarily reflect the results of operations, financial position, or cash flows of the Company if it had been an independent entity during those periods. Use of Estimates —The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ materially from these estimates. Cash and Cash Equivalents —The Company defines cash and cash equivalents as demand deposits with financial institutions and short-term liquid investments with a maturity date of less than three months from the date of purchase. Cash Held in Escrow— Cash held in escrow consists of proceeds from home closings held in escrow for the Company's benefit, typically for less than five days. Restricted Cash —Restricted cash consists of cash, cash equivalents, and certificates of deposit held as collateral related to development obligations or held in escrow by the Company's loan service providers on behalf of the lenders and disbursed in accordance with agreements between the transacting parties. Real Estate Inventories and Cost of Sales —Real estate inventories include actively selling projects as well as projects under development or held for future development. Inventories are stated at cost, unless the carrying amount is determined not to be recoverable, in which case inventory is written down to its fair value. The Company capitalizes pre-acquisition costs, land deposits, land, development, and other allocated costs, including interest, property taxes, and indirect construction costs to real estate inventories. Pre-acquisition costs, including non-refundable land deposits, are removed from inventory and expensed to other (expense) income, net, if the Company determines continuation of the prospective project is not probable. Land, development, and other common costs are typically allocated to real estate inventories using a methodology that approximates the relative-sales-value method. If the relative-sales-value-method is impracticable, costs are allocated based on area methods, such as square footage or lot size, or other value methods as appropriate under the circumstances. Home construction costs per production phase are recorded using the specific identification method. Cost of sales for homes closed includes construction costs of each home, an allocation of applicable land acquisition, land development, and related common costs, plus an estimate of any applicable costs required to complete the home or common area development. Changes in estimated development and common costs are allocated prospectively to remaining homes in a project. The Company reviews real estate inventories on a periodic basis or whenever indicators of impairment exist. If there are indicators of impairment, the Company performs a detailed budget and cash flow review of the applicable real estate inventories to determine whether the estimated undiscounted future cash flows of the project are more or less than the asset’s carrying value. If the estimated undiscounted future cash flows are more than the asset’s carrying value, no impairment adjustment is required. However, if the estimated undiscounted future cash flows are less than the asset’s carrying value, the asset is written down to fair value and impairment charges are recorded to cost of sales. We generally determine the estimated fair value of each community by using a discounted cash flow approach based on the estimated future cash flows at discount rates that reflect the risk of the community being evaluated. When estimating future cash flows of a project, the Company makes various assumptions including, estimated future housing revenues, sales absorption rates, land development, construction and related carrying costs, and direct selling and marketing costs. The discounted cash flow approach can be impacted significantly by our estimates of future cash flows and the applicable discount rate, which are Level 3 inputs. The key assumptions used in inventory valuation are subject to a variety of external factors and are inherently uncertain. Accordingly, actual results could differ from valuation estimates. See Note 4 - Real Estate Inventories for additional information. Capitalization of Interest —The Company follows the practice of capitalizing interest to real estate inventories during the period of development and to investments in unconsolidated joint ventures, when applicable, in accordance with Accounting Standards Codification ("ASC") Topic 835, Interest . Interest capitalized as a component of real estate inventories is included in cost of sales as related homes or lots are sold. To the extent interest is capitalized to investment in unconsolidated joint ventures, it is included as a reduction to income from unconsolidated joint ventures when the related homes or lots are sold to third parties. To the extent the Company's debt exceeds its qualified assets as defined in ASC 835, the Company would expense a portion of the interest incurred. Qualified assets represent projects that are under development as well as investments in unconsolidated joint ventures accounted for under the equity method until such equity method investees begin their principal operations. Business Combinations —Acquisitions are accounted for in accordance with ASC 805, “Business Combinations.” In connection with the recent acquisitions of Vintage Estate Homes ("Vintage"), Garrett Walker Homes ("Garrett Walker"), and Pinnacle West Homes Holding Corp. ("Pinnacle West"), management determined in each case that the Company obtained control of a business including inputs, processes, and outputs in exchange for cash consideration. All material assets and liabilities were measured and recognized at fair value as of the date of the acquisition. Any excess of the purchase price over the estimated fair values of the identifiable net assets acquired is recorded as goodwill. Significant judgment is often required in estimating the fair value of assets acquired, particularly intangible assets. The fair value of acquired inventories largely depends on the stage of production of the acquired land and work in process inventory. For acquired land inventory, we typically utilize, with the assistance of a third party appraiser, a forecasted cash flow approach for the development, marketing, and sale of communities acquired. Significant assumptions included in our estimates include future per lot development costs, construction and overhead costs, mix of products sold in each community, as well as average sales price. For work in process inventories, we estimate the fair value based upon the stage of production of each unit and a gross margin that we believe a market participant would require to complete the remaining development and requisite selling efforts. Refer to Note 3 - Business Combinations for further information regarding the purchase price allocation and related acquisition accounting. Investment in and Advances to Unconsolidated Joint Ventures— The Company uses the equity method to account for investments in joint ventures that qualify as variable interest entities ("VIEs") where the Company is not the primary beneficiary and other entities that it does not control but has the ability to exercise significant influence over the operating and financial policies of the investee. The Company also uses the equity method when it functions as the managing member or general partner and its venture partner has substantive participating rights or where the Company can be replaced by its venture partner as managing member without cause. As of December 31, 2021 and 2020, the Company concluded that some of its joint ventures were VIEs. The Company concluded that it was not the primary beneficiary of the variable interest entities and, accordingly, accounted for these entities under the equity method of accounting. Under the equity method, the Company recognizes its proportionate share of earnings and losses generated by the joint venture upon the delivery of lots or homes to third parties. The Company classifies cash distributions received from equity method investees using the cumulative earnings approach. Under the cumulative earnings approach, distributions received are considered returns on investment and shall be classified as cash inflows from operating activities unless the cumulative distributions received less distributions received in prior periods exceed cumulative equity in earnings. When such an excess occurs, the current-period distribution up to this excess is considered a return of investment and shall be classified as cash inflows from investing activities. The Company's ownership interests in its unconsolidated joint ventures vary but are generally less than or equal to 51%. The accounting policies of the Company's joint ventures are consistent with those of the Company. The Company also reviews its investments in and advances to unconsolidated joint ventures for evidence of other-than-temporary declines in value. To the extent the Company deems any portion of its investment in and advances to unconsolidated joint ventures as not recoverable, the Company would impair its investment accordingly. For the years ended December 31, 2021 and 2020, no impairments related to investment in and advances to unconsolidated joint ventures were recorded. Variable Interest Entities —The Company accounts for variable interest entities in accordance with ASC 810, Consolidation . Under ASC 810, a VIE is created when: (a) the equity investment at risk in the entity is not sufficient to permit the entity to finance its activities without additional subordinated financial support provided by other parties, including the equity holders; (b) the entity’s equity holders as a group either (i) lack the direct or indirect ability to make decisions about the entity, (ii) are not obligated to absorb expected losses of the entity or (iii) do not have the right to receive expected residual returns of the entity; or (c) the entity’s equity holders have voting rights that are not proportionate to their economic interests, and the activities of the entity involve or are conducted on behalf of the equity holder with disproportionately few voting rights. If an entity is deemed to be a VIE pursuant to ASC 810, the enterprise that has both (i) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (ii) the obligation to absorb the expected losses of the entity or right to receive benefits from the entity that could be potentially significant to the VIE is considered the primary beneficiary and must consolidate the VIE. Under ASC 810, a non-refundable deposit paid to an entity may be deemed to be a variable interest that will absorb some or all of the entity’s expected losses if they occur. The Company's land purchase and lot option deposits generally represent its maximum exposure to the land seller if it elects not to purchase the optioned property. Therefore, whenever the Company enters into a land option or purchase contract with an entity and makes a non-refundable deposit, a VIE may have been created. As of December 31, 2021 and 2020, the Company was not required to consolidate any VIEs. In accordance with ASC 810, the Company performs ongoing reassessments of whether it is the primary beneficiary of a VIE. Goodwill— 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. Goodwill and any other intangible assets that do not have finite lives are not amortized, but rather assessed for impairment at least annually. The Company performs an annual impairment test during the fourth quarter or whenever impairment indicators are present using a two-step process to assess whether or not goodwill should be impaired. The first step is a qualitative assessment that analyzes current economic indicators associated with a particular reporting unit. If the qualitative assessment indicates a stable or improved fair value, no further testing is required. If a qualitative assessment indicates that a significant decline to fair value of a reporting unit is more likely than not, or, at our election, we will proceed to the second step where we calculate the fair value of a reporting unit based on discounted future cash flows. If this step indicates that the carrying value of a reporting unit is in excess of its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. There was no goodwill impairment recorded during the years ended December 31, 2021, and 2020. Property and Equipment —Property and equipment are recorded at cost and depreciated to general and administrative expense using the straight-line method over their estimated useful lives, typically ranging from two Capitalized Selling and Marketing Costs —In accordance with ASC 606, Revenue from Contracts with Customers , and ASC 340, Other Assets and Deferred Cost, costs incurred for tangible assets directly used in the sales process such as the Company's sales offices, and model landscaping and furnishings are capitalized to property and equipment which is included in other assets in the accompanying consolidated balance sheets. These costs are amortized to selling and marketing expenses generally over the estimated life of the selling community. For the years ended December 31, 2021, 2020, and 2019 the Company incurred amortization expense of $2.0 million, $1.6 million, and $1.9 million, respectively. All other selling and marketing costs, such as commissions and advertising, are expensed as incurred. Advertising and marketing costs of $3.2 million, $2.4 million, and $2.5 million for the years ended December 31, 2021, 2020, and 2019, respectively, are included in sales and marketing expenses on the consolidated statements of operations. Warranty Accrual —We provide home purchasers with limited warranties against certain building defects and we have certain obligations related to those post-construction warranties for closed homes. The specific terms and conditions of these limited warranties vary depending upon the markets in which we do business, but generally we provide all of our home buyers with a limited warranty as to workmanship and mechanical equipment and also provide many of our home buyers with a limited 10-year warranty as to structural integrity. Estimated future direct warranty costs are accrued and charged to cost of sales in the period when the related homebuilding revenues are recognized. Amounts are accrued based upon the Company's historical rates of warranty claims. Historical experience of the Company’s peers is also considered due to the Company's limited internal history of homebuilding sales. The adequacy of the warranty accrual is assessed on a quarterly basis to reflect changes in trends as information becomes available and the amounts recorded are adjusted if necessary. The warranty accrual is included in accrued expenses and other liabilities in the accompanying consolidated balance sheets and adjustments to are recorded through cost of sales. Warrant Liability —We account for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) ASC 480, and ASC 815. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are recorded as liabilities at their initial fair value on the date of issuance or assumption and remeasured to fair value at each balance sheet date thereafter. The Company’s outstanding Private Placement Warrants are presented on the consolidated balance sheets as a liability recorded at fair value with subsequent changes in fair value recognized in the consolidated statement of operations at each reporting date as a gain (loss) on remeasurement of the warrant liability. The fair value of the Private Placement Warrants is estimated using a Black-Scholes option pricing model which includes assumptions used in the model that are subjective and require significant judgment, including implied volatility, which is a Level 3 input. Each Private Placement Warrant is exercisable at $11.50 into one share of common stock. The Warrants will expire five years after the completion of the Merger or earlier upon redemption or liquidation. Refer to Note 16 - Stockholders' Equity for additional information on the Warrants. The fair value of the Private Placement Warrants is discussed further in Note 14 - Fair Value . Home Sales Revenue— Home sales revenue is recognized when the Company's performance obligations within the underlying sales contracts are fulfilled. The Company considers its obligations fulfilled when closing conditions are complete, title has transferred to the homebuyer, and collection of the purchase price is reasonably assured. Sales incentives are recorded as a reduction of revenue when the respective home is closed. When it is determined that the earnings process is not complete, the related revenue is deferred for recognition in future periods. Lot Sales and Other Revenue— Revenues from lot sales and other revenue are recorded and a profit is recognized when performance obligations are satisfied, which includes transferring a promised good or service to a customer. Lot sales and other revenue is recognized when all conditions of escrow are met, including delivery of the real estate asset in the agreed-upon condition, passage of title, receipt of appropriate consideration, and collection of associated receivables, if any, is probable, and other applicable criteria are met. Based upon the terms of the agreement, when it is determined that the performance obligation is not satisfied, the sale and the related profit are deferred for recognition in future periods. Under the terms of certain lot sale and other contracts, the Company is obligated to perform certain development activities after the close of escrow. Due to this continuing involvement, the Company recognizes lot sales and other revenue under the percentage-of-completion method, whereby revenue is recognized in proportion to total costs incurred divided by total costs expected to be incurred. As of December 31, 2021, the Company had $4.0 million deferred revenue from lot sales and other revenue. The Company recognizes these amounts as development progresses and the related performance obligations are completed. As of December 31, 2021, the Company had contract assets of $6.1 million from lot sales and other contracts. The contract asset balance represents cash to be received for work already performed on lot sale and other contracts. The amount of the transaction price for lot sales and other contracts allocated to performance obligations that were unsatisfied, or partially unsatisfied, as of December 31, 2021 was $63.9 million. As of December 31, 2020, the Company had no deferred revenue or contract assets. There was no outstanding amount related to unsatisfied performance obligations as of December 31, 2020. Income Taxes— The Company records income taxes in accordance with ASC 740, Income Taxes , whereby deferred tax assets and liabilities are recognized based on the differences in the book and tax bases of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates that are expected to apply in the years that the differences are expected to reverse. The Company adjusts deferred tax assets and liabilities for the effects of changes in tax laws and rates in the period of enactment. Tax credits are recognized through our effective tax rate calculation assuming that we will be able to realize the full benefit of the credits. Each year the Company assesses its deferred tax asset to determine whether all or any portion of the asset is more likely than not (defined as a likelihood of more than 50%) unrealizable under ASC 740. The Company is required to establish a valuation allowance for any portion of the tax asset determined to be more likely than not unrealizable. The ultimate realization of deferred tax assets depends primarily on the generation of future taxable income during the periods in which the differences become deductible. Judgment is required in determining the future tax consequences of events that have been recognized in the Company's consolidated financial statements and/or tax returns. Differences between anticipated and actual outcomes of these future tax consequences could have a material impact on the Company's consolidated financial statements. Stock-Based Compensation Expense —In accordance with ASC 718, Compensation—Stock Compensation , stock-based compensation expense for all share-based payment awards is based on the grant date fair value. We recognize expense for share-based payment awards with only service-based vesting conditions on a straight-line basis over the requisite service period of the award. Expense associated with awards that include a performance-based vesting condition is not recognized until it is determined that it is probable the performance-based conditions will be met. When achievement of a performance-based condition is probable, a catch-up of expense will be recorded as if the award had been vesting on a straight-line basis from the award date. The award will continue to be expensed on a straight-line basis, adjusted for probability, until the award vests or expires as worthless. Recent Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application for fiscal years beginning after December 15, 2020. The Company adopted the amendments in this update on January 1, 2021. The adoption did not have a material impact on the Company's consolidated financial statements. In January 2020, the FASB issued ASU 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivative and Hedging (Topic 815) . ASU 2020-01 clarifies the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. The standard is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years, with early adoption permitted. The Company adopted the amendments in this update on January 1, 2021. The adoption did not have a material impact on the Company's consolidated financial statements. In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) , which provides clarity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. Particularly, the update states that an entity should treat a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange as an exchange of the original instrument for a new instrument. The standard is effective for fiscal years beginning after December 15, 2021, with early adoption permitted. The adoption is not expected to have a material impact on the Company's consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, which requires application of ASC 606, Revenue from Contracts with Customers , to recognize and measure contract assets and liabilities from contracts with customers acquired in a business combination. ASU 2021-08 creates an exception to the general recognition and measurement principle in ASC 805 and will result in recognition of contract assets and contract liabilities consistent with those recorded by the acquiree immediately before the acquisition date. The standard is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The adoption is not expected to have a material impact on the Company's consolidated financial statements. In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance , to increase the transparency of government assistance including the disclosure of (1) the types of assistance, (2) an entity’s accounting for the assistance, and (3) the effect of the assistance on an entity’s financial statements. The standard is effective for fiscal years beginning after December 15, 2021, with early adoption permitted. The Company early adopted this update for presentation of its consolidated financial statements as of December 31, 2021. The adoption did not have a material impact on the Company's consolidated financial statements. |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2021 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations On May 4, 2021, the Company acquired 100% of Mercedes Premier Homes, LLC (also known as Vintage Estate Homes, LLC, or “Vintage”), a Florida- and Texas-based homebuilder, for an aggregate cash purchase price of $54.6 million. In addition, we assumed $32.1 million of debt and paid down $3.8 million of debt in connection with the acquisition. The total assets of Vintage included approximately 20 development projects (unaudited) and 1,800 lots (unaudited) in various stages of development. In accordance with ASC 805, Business Combinations , the assets acquired and liabilities assumed from our acquisitions of Vintage, Garrett Walker, and Pinnacle West were measured and recognized at fair value as of the date of the acquisitions to reflect the purchase price paid. Acquired inventories consist of land, land deposits, and work in process inventories. For acquired land and land options, the Company typically utilizes, with the assistance of a third party appraiser, a sales comparison approach. For work in process inventories, the Company estimates the fair value based upon the stage of production of each unit and a gross margin that management believes a market participant would require to complete the remaining development and requisite selling efforts. On the acquisition date, the stage of production for each lot ranged from recently started lots to fully completed homes. The intangible asset acquired relates to the Vintage trade name, which is estimated to have a fair value of $1.6 million and is being amortized over one year. Goodwill represents the excess of the purchase price over the fair value of assets acquired and liabilities assumed and relates primarily to the assembled workforce. Goodwill of $3.8 million was recorded on the consolidated balance sheets as a result of this transaction and is deductible for tax purposes over 15 years. The acquired goodwill is included in the Florida reporting segment in Note 13, Segment Reporting . The Company incurred transaction related costs of $0.9 million related to the Vintage acquisition during the year ended December 31, 2021. The Company's results of operations include homebuilding revenues from the Vintage acquisition of $125.4 million during the year ended December 31, 2021. The accompanying consolidated statement of operations before tax also includes a loss of $0.9 million, during the year ended December 31, 2021, inclusive of purchase price accounting and an allocation of corporate general and administrative expenses. The following is a summary of the allocation of the purchase price based on the fair value of assets acquired and liabilities assumed (dollars in thousands) . Assets Acquired Cash $ 10,063 Real estate inventories 93,699 Goodwill 3,752 Trade name 1,550 Other assets 3,956 Total assets $ 113,020 Liabilities Assumed Accounts payable $ 1,641 Accrued expenses 24,660 Notes payable 32,119 Total liabilities 58,420 Net assets acquired $ 54,600 On January 15, 2020, the Company acquired 100% of the membership interest of Garrett Walker for cash consideration of approximately $133.4 million. Garrett Walker is a residential homebuilder located in Phoenix, Arizona focused on building entry-level, single-family detached homes in the Northwest Valley and Phoenix metropolitan. The total assets included approximately 20 development projects (unaudited) and 1,750 lots (unaudited) in various stages of development. The intangible asset acquired relates to the Garrett Walker trade name, which is estimated to have a fair value of $1.6 million and is being amortized over three years. Goodwill of $15.4 million was recorded on the consolidated balance sheets as a result of this transaction and is expected to be deductible for tax purposes over 15 years. The acquired goodwill is included in the Arizona reporting segment. The Company incurred transaction costs of $0.7 million related to the Garrett Walker acquisition during the year ended December 31, 2020. The following is a summary of the allocation of the purchase price based on the fair value of assets acquired and liabilities assumed (dollars in thousands) . Assets Acquired Cash $ 2,905 Real estate inventories 119,466 Goodwill 15,392 Trade name 1,600 Other assets 532 Total assets $ 139,895 Liabilities Assumed Accounts payable $ 5,425 Accrued expenses 1,037 Total liabilities 6,462 Net assets acquired $ 133,433 On June 20, 2019, the Company acquired 100% of the stock of Pinnacle West for cash consideration of $25.8 million. Pinnacle West is a residential homebuilder located in Phoenix, Arizona and was comprised of 15 projects (unaudited) in various stages of development at the time of acquisition. Goodwill of $5.3 million was recorded on the consolidated balance sheets and is expected to be deductible for tax purposes over 15 years. The acquired goodwill is included in the Arizona reporting segment. The Company incurred transaction costs of $1.1 million related to the Pinnacle West acquisition during the year ended December 31, 2019. The following is a summary of the allocation of the purchase price based on the fair value of assets acquired and liabilities assumed (dollars in thousands) . Assets Cash $ 2,208 Real estate inventories 39,584 Goodwill 5,315 Other assets 60 Total assets $ 47,167 Liabilities Accounts payable $ 2,626 Notes payable 16,228 Accrued expenses and other liabilities 2,543 Total liabilities 21,397 Net assets acquired $ 25,770 Unaudited Pro Forma Financial Information Unaudited pro forma revenue and net income (loss) for the years ended December 31, 2021, 2020, and 2019 give effect to the results of the acquisitions of Vintage, Garrett Walker, and Pinnacle West as though the respective acquisition dates were as of January 1, 2020, January 1, 2019, and January 1, 2018 the beginning of the year preceding the respective acquistions. Unaudited pro forma net income (loss) adjusts the operating results of the stated acquisitions to reflect the additional costs that would have been recorded assuming the fair value adjustments had been applied as of the beginning of the year preceding the year of acquisition, including the tax-effected amortization of the acquired trade names and transaction related costs. Year Ended December 31, 2021 2020 2019 (dollars in thousands) Revenue $ 1,078,715 $ 894,177 $ 799,559 Pretax income (loss) $ 76,747 $ (19,183) $ 35,336 (Provision) benefit for income taxes (16,095) 4,858 (7,625) Net income (loss) $ 60,652 $ (14,325) $ 27,711 |
Real Estate Inventories
Real Estate Inventories | 12 Months Ended |
Dec. 31, 2021 | |
Real Estate Inventories [Abstract] | |
Real Estate Inventories | Real Estate Inventories Real estate inventories are summarized as follows: December 31, 2021 2020 (dollars in thousands) Deposits and pre-acquisition costs $ 65,724 $ 34,102 Land held and land under development 243,310 221,055 Homes completed or under construction 526,950 395,926 Model homes 8,808 36,736 Total real estate inventory $ 844,792 $ 687,819 Deposits and pre-acquisition costs include land deposits and other due diligence costs related to potential land acquisitions. Land held and land under development includes costs incurred during site development such as development, indirect costs, and permits. Homes completed or under construction and model homes include all costs associated with home construction, including land, development, indirect costs, permits, materials and labor. In accordance with ASC 360, inventory is stated at cost, unless the carrying amount is determined not to be recoverable, in which case inventory is written down to its fair value. The Company reviews each real estate asset at the community-level, on a quarterly basis or whenever indicators of impairment exist. We generally determine the estimated fair value of each community by using a discounted cash flow approach based on the estimated future cash flows at discount rates that reflect the risk of the community being evaluated. The discounted cash flow approach can be impacted significantly by our estimates of future home sales revenue, home construction costs, and the applicable discount rate, all of which are Level 3 inputs. For the year ended December 31, 2021 the Company did not recognize any real estate inventory impairments. For the year ended December 31, 2020 the Company recognized inventory impairments of $3.4 million related to two communities in the California segment. In both instances, the Company determined that additional incentives were required to sell the remaining homes at estimated aggregate sales prices below the communities previous carrying values. The fair values for the communities impaired were calculated using discounted cash flow models using discount rates ranging from 7%-10%. |
Capitalized Interest
Capitalized Interest | 12 Months Ended |
Dec. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Capitalized Interest | Capitalized Interest Interest is capitalized to real estate inventories and investment in unconsolidated joint ventures during development and other qualifying activities. Interest capitalized as a cost of real estate inventories is included in cost of sales as related inventories are delivered. Interest capitalized to investments in unconsolidated joint ventures is relieved to equity in net income (loss) of unconsolidated joint ventures as related joint venture homes close. For the periods reported, interest incurred, capitalized, and expensed was as follows: Year Ended December 31, 2021 2020 2019 (dollars in thousands) Related party interest incurred or pushed down $ 457 $ 10,112 $ 11,115 Other interest incurred 26,750 21,425 24,906 Total interest incurred 27,207 31,537 36,021 Related party interest capitalized 457 10,112 11,115 Other interest capitalized 26,750 21,410 24,906 Total interest capitalized 27,207 31,522 36,021 Previously capitalized related party interest included in cost of sales $ 11,670 $ 14,110 $ 15,646 Previously capitalized other interest included in cost of sales 21,839 23,816 24,747 Related party interest relieved to equity in net income (loss) of unconsolidated joint ventures 1,250 1,146 1,908 Other interest relieved to equity in net income (loss) from unconsolidated joint ventures 17 16 26 Other interest expensed 32 15 — Total interest expense included in pretax income (loss) $ 34,808 $ 39,103 $ 42,327 |
Investment in and Advances to U
Investment in and Advances to Unconsolidated Joint Ventures | 12 Months Ended |
Dec. 31, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in and Advances to Unconsolidated Joint Ventures | Investment in and Advances to Unconsolidated Joint VenturesAs of December 31, 2021 and 2020, the Company had two unconsolidated joint ventures with ownership interests of 51% and 25% in LS-NJ Port Imperial JV LLC and LS-Boston Point LLC, respectively, and concluded that these joint ventures were VIEs. The Company concluded that it was not the primary beneficiary of the variable interest entities and, accordingly, accounted for these entities under the equity method of accounting. The Company's maximum exposure to loss is limited to the investment in the unconsolidated joint venture amounts included on the consolidated balance sheets. The condensed combined balance sheets for the Company's unconsolidated joint ventures accounted for under the equity method are as follows: December 31, 2021 2020 (dollars in thousands) Cash and cash equivalents $ 2,275 $ 2,740 Restricted cash — 4,870 Real estate inventories 2,515 41,214 Other assets 122 123 Total assets $ 4,912 $ 48,947 Accounts payable $ 21 $ 188 Accrued expenses and other liabilities 3,465 3,928 Due to affiliates 787 5,735 Total liabilities 4,273 9,851 Members' capital 639 39,096 Total liabilities and members' capital $ 4,912 $ 48,947 The condensed combined statements of operations for the Company's unconsolidated joint ventures accounted for under the equity method are as follows: Year Ended December 31, 2021 2020 2019 (dollars in thousands) Revenues $ 50,067 $ 37,403 $ 54,633 Cost of sales and expenses (45,123) (40,230) (62,145) Impairment of real estate inventories — (27,094) (5,800) Equity in net income from unconsolidated joint ventures — — 1,087 Net (loss) income of unconsolidated joint ventures $ 4,944 $ (29,921) $ (12,225) Equity in net (loss) income from investment in unconsolidated joint ventures (1) $ 1,262 $ (16,418) $ (7,901) (1) The equity in net (loss) income of unconsolidated joint ventures consists of the allocation of the Company's proportionate share of income or loss from the unconsolidated joint ventures of $2.5 million income, $15.2 million loss, and $5.9 million loss as well as $1.3 million, $1.2 million, and $2.0 million of expense related to capitalized interest and other costs for the years ended December 31, 2021, 2020, and 2019, respectively. For the years ended December 31, 2020 and 2019, one of the Company's unconsolidated joint ventures recorded impairment charges of $27.1 million and $5.8 million, respectively, related to slowing absorption and weaker pricing than expected. Based on the Company's ownership percentage of 51%, $13.8 million and $3.0 million of the impairment charges are reflected in the equity in net income (loss) of unconsolidated joint ventures line item in the Company's consolidated statements of operations. For the year ended December 31, 2021, the unconsolidated joint ventures did not recognize any real estate inventory impairments. |
Other Assets
Other Assets | 12 Months Ended |
Dec. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | Other Assets Other assets consist of the following: December 31, 2021 2020 (dollars in thousands) Deferred tax asset, net $ 7,270 $ 13,248 Property and equipment, net (1) 6,601 6,386 Right-of-use asset 12,593 5,973 Contract assets 6,133 — Deferred offering costs — 7,617 Prepaid income taxes 645 1,003 Intangible asset, net 910 1,046 Prepaid expenses 5,309 3,029 Other 4,537 3,267 Total other assets $ 43,998 $ 41,569 (1) Property and equipment is net of $11.8 million and $8.1 million accumulated depreciation, respectively. |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 12 Months Ended |
Dec. 31, 2021 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Liabilities | Accrued Expenses and Other Liabilities Accrued expenses and other liabilities consist of the following: December 31, 2021 2020 (dollars in thousands) Land development and home construction accrual $ 22,082 $ 25,910 Warranty accrual 15,692 11,730 Accrued compensation and benefits 14,913 10,966 Lease liabilities 13,190 6,396 Sales tax payable 2,885 1,867 Income tax payable 12,079 1,355 Interest payable 2,494 1,134 Deferred revenue 3,969 — Homebuyer deposits 7,825 17 Other deposits and liabilities 2,595 3,494 Total accrued expenses and other liabilities $ 97,724 $ 62,869 Changes in the Company's warranty accrual are detailed in the table below: December 31, 2021 2020 (dollars in thousands) Beginning warranty accrual $ 11,730 $ 8,693 Warranty provision 6,013 3,843 Warranty payments (2,051) (806) Ending warranty accrual $ 15,692 $ 11,730 |
Notes and Other Debts Payable,
Notes and Other Debts Payable, net | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Notes and Other Debts Payable, net | Notes and Other Debts Payable, net Amounts outstanding under Notes and other debts payable, net consist of the following: December 31, 2021 2020 (dollars in thousands) Construction loans $ 82,617 $ 67,757 Line of credit facilities 390,300 199,358 Loans payable — 5,144 Notes and other debts payable 472,917 272,259 Debt issuance costs (11,800) (7,450) Notes and other debts payable, net $ 461,117 $ 264,809 On October 6, 2021, the Company entered into a line of credit agreement (the "Credit Agreement"). The Credit Agreement provides for a senior unsecured borrowing of up to $585 million as of December 31, 2021. The Company may increase the borrowing amount up to $850 million, under certain conditions. Borrowings under the Credit Agreement bear interest at LIBOR plus 3.25% or Prime Rate plus 2.75%. The interest rate includes a floor of 3.75%. As of December 31, 2021, the interest rate on the loan was 3.75%. The Credit Agreement matures in October 2024. Concurrently with the entry into the Credit Agreement, the Company paid off the previous lines of credit and all but one of its construction loans. The remaining construction loan has a variable interest rate of LIBOR plus 6.50% with a floor of 8.25%. As of December 31, 2021, the interest rate on the loan was 8.25%. The construction loan matures in September 2022. On April 15, 2020, Landsea Holdings entered into a Paycheck Protection Program (“PPP”) Note evidencing an unsecured loan in the amount of $4.3 million made to the Company under the PPP. The PPP was established under the Coronavirus Aid, Relief, and Economic Security Act and is administered by the U.S. Small Business Association. The proceeds from the PPP Note were restricted to only being used for payroll costs (including benefits), interest on mortgage obligations, rent, utilities and interest on certain other debt obligations. The proceeds from the PPP Note were used in the operation of the Company and therefore the debt was included in the consolidated balance sheets of the Company. We fully utilized the proceeds from this loan to satisfy certain payroll and benefit obligations and applied for relief of the full amount of the loan under the PPP. In June 2021, the PPP loan was forgiven and the liability removed from the Company's consolidated balance sheets. The forgiveness was recorded as a gain on debt forgiveness and is included in other income (expense), net in the consolidated statements of operations of the Company. The Company's loans have certain financial covenants, such as requirements for the Company to maintain a minimum liquidity balance, minimum tangible net worth, and leverage and interest coverage ratios. The Company's loans are collateralized by the assets of the Company and contain various representations, warranties, and covenants that are customary for these types of agreements. As of December 31, 2021, the Company was in compliance with all financial loan agreement covenants. The aggregate maturities of the principal balances of the notes and other debts payable during the five years subsequent to December 31, 2021 are as follows (dollars in thousands) : 2022 $ 82,617 2023 — 2024 390,300 Thereafter — $ 472,917 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal —The Company is subject to various legal and regulatory actions that arise from time to time and may be subject to similar or other claims in the future. In addition, the Company is currently involved in various other legal actions and proceedings. The Company is currently unable to estimate the likelihood of an unfavorable result in any such proceeding that could have a material adverse effect on our results of operations, financial position, or liquidity. The Company’s insurance companies agreed in the fourth quarter of 2021 to fund $14.9 million to cover the Company's portion of a settlement resolving litigation involving a wrongful death caused by a former employee. The insurers have reserved the right to later seek recovery for some or all of the amounts paid in connection with the settlement of the case. While the insurance companies have not notified the Company that they will assert such a claim, they may do so in the future. At this time the Company is not able to estimate the amount of any such claim. Performance Obligations —In the ordinary course of business, and as part of the entitlement and development process, the Company's subsidiaries are required to provide performance bonds to assure completion of certain public facilities. The Company had $94.7 million and $78.0 million of performance bonds outstanding at December 31, 2021 and 2020, respectively. Land Purchase Contracts —The Company enters into land purchase contracts to acquire land for the construction of homes. Under these contracts, the Company will fund a stated deposit in consideration for the right, but not the obligation, to purchase land at a future point in time with predetermined terms. Under the terms of some of the purchase contracts, the deposits are not refundable in the event the Company elects to terminate the contract. Land purchase contract deposits and capitalized pre-acquisition costs are expensed when the Company believes it is probable that it will not acquire the property under contract and will not be able to recover those costs through other means. As of December 31, 2021, the Company had total deposits of $63.6 million, of which none are refundable, related to contracts to purchase land and lots with a total remaining purchase price of approximately $399.1 million, net of deposits. The majority of land and lots under contract are currently expected to be purchased within the next four years. Operating Leases —The Company has various operating leases, most of which relate to office facilities and model homes. Maturities of lease liabilities under the noncancelable operating leases in effect at December 31, 2021 were as follows (dollars in thousands) : 2022 $ 4,628 2023 3,499 2024 2,363 2025 1,534 2026 1,241 Thereafter 996 Total lease payments 14,261 Less: Discount (1,071) Present value of lease liabilities $ 13,190 During the year ended December 31, 2021 the Company sold model homes and immediately leased these models back for up to two years. The Company recognized homes sales revenue and lot sales and other revenue of $35.0 million and $3.2 million, respectively, during the year ended December 31, 2021. Corresponding home cost of sales and lot and other cost of sales of $26.1 million and $3.0 million, respectively, were also recognized during the same period. All of the leases from the sale-leasebacks are accounted for as operating leases, and are now reflected as part of the Company’s right-of-use assets and lease liabilities in the accompanying consolidated balance sheets. Certain of these sales were to a related party, refer to Note 11 - Related Party Transactions for further detail. Operating lease expense for the years ended December 31, 2021, 2020, and 2019 was $1.9 million, $2.0 million, and $1.8 million, respectively, and is included in general and administrative expense on the consolidated statements of operations. The Company primarily enters into operating leases for the right to use office space, model homes, and computer and office equipment, which have lease terms that generally range from 1 to 7 years and often include one or more options to renew. The weighted average remaining lease term as of December 31, 2021 and 2020 was 4.1 years and 4.4 years, respectively. Renewal terms are included in the lease term when it is reasonably certain the option will be exercised. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Following the Merger, the Company continues to pay for certain costs on behalf of its former parent and current majority shareholder as the two companies' respective processes are separated. The Company records a due from affiliate balance for all such payments. As of December 31, 2021 and 2020, the Company had a net balance due from affiliates of $2.1 million and $0.3 million, respectively, related to these payments. In July 2021, the Company entered into a landbank agreement for a project in its California segment with a related party. The Company will make regular payments to the related party based on an annualized rate of 7% of the undeveloped land costs while the land is developed and will purchase the lots at a predetermined price of $28.9 million at the Company's discretion. The total amount of interest payments made during 2021 was $0.4 million. No payments have been made to purchase developed lots from the related party during the year ended December 31, 2021. The Company sold model homes to a related party for total consideration of $15.2 million in December 2021. From this transaction, the Company recognized homes sales revenue and lot sales and other revenue of $10.8 million and $3.2 million, respectively, during the year ended December 31, 2021. Corresponding home cost of sales and lot and other cost of sales of $8.8 million and $3.0 million, respectively, were also recognized during the same period. As part of this transaction, the Company leased these models back and had right-of-use asset and lease liability balances of $2.0 million and $2.0 million, respectively, as of December 31, 2021 related to the model home sales. On June 30, 2020, the Company transferred its interest in a consolidated real estate joint venture that was previously included in the Metro New York segment to Landsea Holdings. The interest was removed from the consolidated financial statements of the Company on a prospective basis. The real estate joint venture had net assets at the date of transfer of $28.9 million and a noncontrolling interest of $1.2 million as follows (dollars in thousands) : Assets Transferred Cash $ 338 Real estate inventories 49,705 Other assets 174 Total assets $ 50,217 Liabilities Transferred Accounts payable $ 1,416 Construction loan 17,825 Accrued expenses and other liabilities 2,102 Total liabilities 21,343 Net assets transferred 28,874 Noncontrolling interest transferred $ 1,242 In connection with the Merger, we transferred a deferred tax asset ("DTA") to Landsea Holdings, our majority shareholder, of $12.1 million. The DTA represented the deferred tax on interest expensed through cost of sales from a related party loan that remained with Landsea Holdings after the Merger. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company historically reported income taxes on the consolidated income tax returns of Landsea Holdings since it has historically been a wholly owned subsidiary of Landsea Holdings. Subsequent to the Merger, the Company will file standalone income tax returns. The income tax provision and related balances in these consolidated financial statements have been calculated as if the Company filed a separate tax return for all periods and was operating as a separate business from Landsea Holdings. Under this method, the Company determines its income tax provision as if the Company filed a separate income tax return. The Company does not have tax sharing agreements with the other members within the consolidated Landsea Holdings group. Therefore, cash tax payments and items of current and deferred taxes may not be reflective of the Company's actual tax balances. The (benefit) provision for income taxes are as follows: Year Ended December 31, 2021 2020 2019 (dollars in thousands) Current: Federal $ 11,507 $ 833 $ 4,766 State 5,314 1,104 2,505 Current tax provision 16,821 1,937 7,271 Deferred: Federal (2,425) (3,602) (705) State (401) (1,416) (407) Deferred tax benefit (2,826) (5,018) (1,112) Total income tax (benefit) provision, net $ 13,995 $ (3,081) $ 6,159 The provision for income taxes varies from the U.S. federal statutory rate. The following reconciliation shows the significant differences in the tax at statutory and effective rates: Year Ended December 31, 2021 2020 2019 Federal income tax expense 21.0 % 21.0 % 21.0 % State income tax expense, net of federal tax effect 5.6 5.7 6.9 Permanent differences (0.6) (0.3) 0.1 162(m) limitation (1.3) — — PPP loan 1.8 — — Energy efficient home credit (6.2) 5.6 (5.4) Return to provision adjustment 0.4 (3.5) (1.2) Rate change 0.1 (3.2) 0.2 Change of valuation allowance 0.2 — — Effective tax rate 21.0 % 25.3 % 21.6 % The difference between the statutory tax rate and the effective tax rate for the year ended December 31, 2021 is primarily related to state income taxes, net of federal income tax benefits, offset by the energy efficient home credit. The difference between the statutory tax rate and the effective tax rate for the year ended December 31, 2020 is primarily related to state income taxes net of federal income tax benefits, a limitation related to section 162(m), the forgiveness of the PPP loan, and the energy efficient home credit. The energy efficient home credit is an increase to our income tax benefit in 2020 compared to a decrease to our income tax expense in 2021 and 2019. The difference between the statutory tax rate and the effective tax rate for the year ended December 31, 2019 is primarily related to state income taxes net of federal income tax benefits, partially offset by the energy efficient home credit. At December 31, 2021 and 2020, the Company did not have any gross uncertain tax positions or unrecognized tax benefits, and did not require an accrual for interest or penalties. The Company files income tax returns in the U.S. federal jurisdiction and in the states of Arizona, California, Massachusetts, New Jersey, New York, and Pennsylvania and will start filing in Florida and Texas for tax year 2021. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The tax effects of significant temporary differences that give rise to the deferred tax assets, net of deferred tax liabilities, are as follows: December 31, 2021 2020 (dollars in thousands) Deferred tax assets Accrued expenses $ 3,764 $ 15,208 Lease liability 3,479 1,748 Allowance, reserves, and other 1,118 225 Net operating loss and credit carryforward 87 25 Stock compensation 905 — UNICAP 1,677 — Goodwill and intangibles 606 — Basis difference in investments 108 — Deferred tax asset 11,744 17,206 Less: Valuation allowance (128) — Deferred tax asset, net 11,616 17,206 Deferred tax liabilities Right-of-use asset (3,321) (1,635) Basis difference in fixed assets and intangible assets (1,025) (1,457) Basis difference in investments — (866) Deferred tax liability (4,346) (3,958) Net deferred tax asset $ 7,270 $ 13,248 Based on the Company’s policy on deferred tax valuation allowances as discussed in Note 2, Summary of Significant Accounting Policies and its analysis of positive and negative evidence, management believed that there was enough evidence, including current year income and projections of future taxable income, for the Company to conclude that it was more likely than not that it would realize all of its deferred tax assets as of December 31, 2021 except for certain deferred tax assets related to one of the Company's consolidated joint ventures. At December 31, 2021, the Company had $0.3 million federal NOL carryforwards, and various state NOL carryforwards totaling $0.4 million. The federal NOLs may be carried forward indefinitely. The state NOLs may be carried forward up to 20 years to offset future taxable income and begin to expire in 2035. The statute of limitations is three years for federal income tax purposes and four years for state income tax purposes. The Company's federal and state tax returns from 2013 and forward are open for examination under statute due to losses claimed in those periods utilized in 2018 and 2017. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") was signed into law. The CARES Act, among other things, includes certain income tax provisions for individuals and corporations; however, these benefits do not impact the Company's current tax provision. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting The Company is engaged in the acquisition, development, and sale of homes and lots in multiple states across the country. The Company is managed by geographic location and each of the five geographic regions targets a wide range of buyer profiles including: first time, move-up, and luxury homebuyers. Management of the five geographic regions report to the Company's chief operating decision makers (“CODMs”), the Chief Executive Officer and Chief Operating Officer of the Company. The CODMs review the results of operations, including total revenue and pretax income (loss) to assess profitability and to allocate resources. Accordingly, the Company has presented its operations as the following five reportable segments: • Arizona • California • Florida • Metro New York • Texas The Company has also identified the Corporate operations as a non-operating segment, as it serves to support the homebuilding operations through functional departments such as executive, finance, treasury, human resources, accounting and legal. The majority of the corporate personnel and resources are primarily dedicated to activities relating to the operations and are allocated based on each segment's respective percentage of assets, revenue, and dedicated personnel. The following table summarizes total revenue and pretax income (loss) by segment: Year Ended December 31, 2021 2020 2019 (dollars in thousands) Revenue Arizona $ 340,767 $ 320,691 $ 40,024 California 557,182 413,917 590,964 Florida 93,632 — — Metro New York (1) — — — Texas $ 31,723 $ — $ — Total $ 1,023,304 $ 734,608 $ 630,988 Pretax income (loss) Arizona $ 25,681 $ 9,325 $ (3,927) California 61,073 10,131 53,019 Florida (492) — — Metro New York (1) (2,154) (19,764) (13,225) Texas (439) — — Corporate (16,939) (11,857) (7,317) Total $ 66,730 $ (12,165) $ 28,550 (1) The Metro New York reportable segment does not currently generate any revenue. Included in pretax income (loss) is $1.3 million of income, $16.4 million loss, and $7.9 million loss from unconsolidated joint ventures for the years ended December 31, 2021, 2020 and 2019, respectively. The following table summarizes total assets by segment: December 31, 2021 2020 (dollars in thousands) Assets Arizona $ 360,598 $ 268,141 California 400,292 409,705 Florida 102,158 — Metro New York 124,962 120,168 Texas 35,984 — Corporate 241,520 97,750 Total $ 1,265,514 $ 895,764 Included in the Corporate segment assets is cash and cash equivalents of $218.4 million and $53.6 million as of December 31, 2021 and 2020, respectively. As of December 31, 2021, goodwill of $20.7 million and $3.8 million was allocated to the Arizona and Florida segments, respectively. As of December 31, 2020 $20.7 million was allocated to the Arizona segment. |
Fair Value
Fair Value | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value ASC 820 defines fair value as the price that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and requires assets and liabilities carried at fair value to be classified and disclosed in the following three categories: Level 1 — Quoted prices for identical instruments in active markets. Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are inactive; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets at measurement date. Level 3 — Valuations derived from techniques where one or more significant inputs or significant value drivers are unobservable in active markets at measurement date. The following table presents carrying values and estimated fair values of financial instruments: December 31, 2021 December 31, 2020 Hierarchy Carrying Fair Value Carrying Fair Value (dollars in thousands) Liabilities: Construction loans (1) Level 2 $ 82,617 $ 82,617 $ 67,757 $ 67,757 Revolving credit facility (1) Level 2 $ 390,300 $ 390,300 $ 199,358 $ 199,358 Loans payable (2) Level 2 $ — $ — $ 5,144 $ 5,144 Warrant liability Level 3 $ 9,185 $ 9,185 $ — $ — (1) Carrying amount approximates fair value due to the variable interest rate terms of these loans. Carrying value excludes any associated deferred loan costs. (2) Carrying amount approximates fair value due to recent issuances of debt having similar characteristics, including interest rate. Carrying value excludes any associated deferred loan costs. The carrying values of restricted cash, receivables, deposits, and other assets as well as accounts payable and accrued liabilities approximate the fair value for these financial instruments based upon an evaluation of the underlying characteristics, market data and because of the short period of time between origination of the instruments and their expected realization. The fair value of cash and cash equivalents is classified in Level 1 of the fair value hierarchy. Non-financial assets such as real estate inventories are measured at fair value on a nonrecurring basis using a discounted cash flow approach with Level 3 inputs within the fair value hierarchy. This measurement is performed when events and circumstances indicate the asset's carrying value is not fully recoverable. During the year ended December 31, 2021, we determined that none of our real estate inventories required impairment. In 2020, we determined that real estate inventories with a carrying value of $33.0 million within two communities in our California segment were not expected to be fully recoverable. Accordingly, we recognized impairment charges of an aggregate $3.4 million to reflect the estimated fair value of the communities of $29.6 million. The Private Placement Warrants are measured at fair value on a recurring basis using a Black-Scholes option pricing model. The significant unobservable input as of December 31, 2021 was the volatility rate implied from the public warrants, which are exchanged on an open market, of 45.5%. The following table reconciles the beginning and ending balances for the Level 3 recurring fair value measurements during the periods presented: December 31, 2021 2020 (dollars in thousands) Warrant liability Beginning balance (1) $ 11,275 $ — Changes in fair value (2,090) — Ending balance $ 9,185 $ — (1) The beginning balance for the year ended December 31, 2021 represents the balance as of January 7, 2021, the Closing Date of the Merger. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation During 2018, Landsea Holdings created a long-term incentive compensation program designed to align the interests of Landsea Holdings, the Company, and its executives by enabling key employees to participate in the Company’s future growth through the issuance of phantom equity awards. Landsea Holdings’ phantom equity awards issued on or after January 1, 2018 were accounted for pursuant to ASC 710, Compensation, as the value was not based on the shares of comparable public entities or other equity, but was based on the book value of Landsea Holdings' equity. Landsea Holdings measured the value of phantom equity awards on a quarterly basis using the intrinsic value method and pushed down the expense to the Company as the employees participating in the long-term incentive compensation program primarily benefit the Company. In connection with the Merger all of the phantom equity awards vested and were either paid out in cash or were converted to stock of LHC and the program was terminated. The Company recorded $2.7 million in general and administrative expenses in the year ended December 31, 2021 related to the accelerated vesting of the phantom awards. The Company paid cash of $2.9 million for the phantom stock awards and granted 0.2 million shares with a grant date value of $1.9 million at the time of the Merger. The Company adopted the Landsea Homes Corporation 2020 Stock Incentive Plan (the "Plan") which provides for the grant of options, stock appreciation rights, restricted stock units ("RSUs"), and restricted stock, any of which may be performance-based, as determined by the Company's Compensation Committee. The Company reserved a total of 6.0 million shares of our common stock for issuance under the Plan. As of December 31, 2021, approximately 5.1 million shares of common stock remained available for issuance under the Plan. The Company granted long term performance share unit awards (“PSUs”) to certain executives under the Plan. The PSUs are earned based upon the Company’s performance over three years, measured by adjusted earnings per share ("EPS") over fiscal years 2021, 2022 and 2023 (the "Performance Periods"). Each award is conditioned upon the Company achieving adjusted EPS targets over the Performance Periods. Target awards of 100% will be earned if the Company’s adjusted EPS meets set thresholds in each of the Performance Periods ("Target Goals"). If adjusted EPS is below or above the target thresholds by defined amounts, an award may still be earned in a range between 50%-200% of the Target Goals. The following table presents a summary of the Company’s nonvested PSUs and RSUs as of December 31, 2021 and changes during the year then ended: Year Ended December 31, 2021 2020 2019 Awards Weighted Average Grant Date Fair Value Awards Weighted Average Grant Date Fair Value Awards Weighted Average Grant Date Fair Value (in thousands, except fair value amounts) Outstanding, beginning of the year — $ — — $ — — $ — Granted 886 9.45 — — — — Vested (118) 9.55 — — — — Forfeited — — — — — — Outstanding, end of the year 768 $ 9.43 — $ — — $ — Most awards vest ratably over three years; however, some have been granted with different vesting schedules. The Company records actual forfeitures related to unvested awards upon employee terminations. Stock-based compensation expense related to our RSUs and PSUs of $5.8 million during the year ended December 31, 2021 is included in general and administrative expenses on our consolidated statements of operations. The Company did not grant any RSUs or PSUs and did not recognize any stock-based compensation expense during the years ended December 31, 2020 and 2019. A summary of our outstanding RSUs and PSUs, assuming current estimated level of performance achievement, are as follows: December 31, 2021 (in thousands, except years) Unvested units 768 Remaining cost on unvested units $ 5,102 Remaining vesting period 3.21 years Stock-based compensation expense associated with the outstanding RSUs and PSUs is measured using the grant date fair value. The expense associated with the RSUs also incorporates the estimated achievement of the established performance criteria at the end of each reporting period until the performance period ends. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders' Equity The Company’s authorized capital stock consists of 500.0 million shares of common stock with a par value of $0.0001 per share, and 50.0 million shares of preferred stock with a par value of $0.0001 per share. As of December 31, 2021, there were 46.3 million shares of common stock issued and outstanding, and no shares of preferred stock outstanding. On January 7, 2021, the Merger was consummated pursuant to the Merger Agreement. Prior to the Merger, LF Capital was authorized to issue, and had outstanding, two classes of common shares, Class A and Class B. Upon the consummation of the Merger, all issued and outstanding shares of Class B common stock converted to shares of Class A. Public stockholders were offered the opportunity to redeem, upon closing of the Merger, shares of Class A common stock for cash. All outstanding shares of common stock are validly issued, fully paid and nonassessable. Following the Merger, the Company's equity was retroactively adjusted to reflect the 32.6 million shares of common stock issued to Landsea Holdings. As of December 31, 2021 there were 21,025,000 outstanding Warrants, consisting of 15,525,000 public warrants and 5,500,000 Private Placement Warrants. At the time of the Merger, the Warrant Agreement was amended so that each public warrant is exercisable at $1.15 into one tenth share of common stock. As part of the amendment, each holder of the public warrants received $1.85 for a total of $28.7 million paid by the Company upon closing of the Merger. Each Private Placement Warrant is exercisable at $11.50 into one share of common stock. The Warrants will expire five years after the completion of the Merger or earlier upon redemption or liquidation. The Private Placement Warrants are identical to the public warrants, except for the rate of exchange upon exercise. Additionally, the Private Placement Warrants will be non-redeemable as long as they are held by the initial purchasers or such purchasers’ permitted transferees. If the Private Placement Warrants are held by someone other than the initial stockholders or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the public warrants, except that they will retain their rate of exchange as one-for-one. The Company may call the public warrants for redemption (except with respect to the Private Placement Warrants): • in whole and not in part; • at a price of $0.01 per warrant; • upon a minimum of 30 days’ prior written notice of redemption; and • if, and only if, the last reported closing price of the shares equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders. If the Company calls the public warrants for redemption, management will have the option to require all holders that wish to exercise the public warrants to do so on a “cashless basis,” as described in the Warrant Agreement. The exercise price and number of common shares issuable upon exercise of the Warrants may be adjusted in certain circumstances including in the event of a share dividend, or recapitalization, reorganization, merger or consolidation. However, the Warrants will not be adjusted for issuance of common shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Warrants' shares. Accordingly, the Warrants may expire worthless. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following table sets forth the computation of basic and diluted EPS for the years ended December 31, 2021, 2020, and 2019: Year Ended December 31, 2021 2020 2019 (in thousands, except share and per share amounts) Numerator Net income (loss) attributable to Landsea Homes Corporation $ 52,786 $ (8,951) $ 17,200 Less: undistributed earnings allocated to participating shares (1,161) — — Net income (loss) attributable to common stockholders $ 51,625 $ (8,951) $ 17,200 Denominator Weighted average common shares outstanding - basic 46,193,166 32,557,303 32,557,303 Adjustment for weighted average participating shares outstanding (994,444) — — Adjusted weighted average common shares outstanding under two class method - basic 45,198,722 32,557,303 32,557,303 Dilutive effect of warrants — — — Dilutive effect of share-based awards 51,996 — — Adjusted weighted average common shares outstanding under two class method - diluted 45,250,718 32,557,303 32,557,303 Earnings per share Basic $ 1.14 $ (0.27) $ 0.53 Diluted $ 1.14 $ (0.27) $ 0.53 Warrants are excluded from the calculation of diluted EPS as they are antidilutive. We excluded 7.1 million common stock unit equivalents from our diluted EPS during the year ended December 31, 2021. |
Supplemental Disclosures of Cas
Supplemental Disclosures of Cash Flow Information | 12 Months Ended |
Dec. 31, 2021 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Disclosures of Cash Flow Information | Supplemental Disclosures of Cash Flow Information The following table presents certain supplemental cash flow information: Year Ended December 31, 2021 2020 2019 (dollars in thousands) Supplemental disclosures of cash flow information Interest paid, net of amounts capitalized $ 32 $ 15 $ — Income taxes paid $ 7,575 $ 7,309 $ 14,152 Supplemental disclosures of non-cash investing and financing activities Transfer of deferred tax asset to Landsea Holdings $ 11,785 $ — $ — Conversion of deferred offering costs to additional paid-in-capital $ 9,229 $ — $ — Amortization of deferred financing costs capitalized to real estate inventories $ 4,173 $ 3,753 $ 3,524 Right-of-use assets obtained in exchange for operating lease liabilities for new or modified operating leases $ 6,688 $ 1,053 $ 3,208 Distribution of real estate joint venture to Landsea Holdings, net of cash provided $ — $ 27,294 $ — Business acquisition holdback $ — $ 2,000 $ — Amortization of prepaid interest $ — $ — $ 2,994 Cash, cash equivalents, and restricted cash reconciliation Cash and cash equivalents $ 342,810 $ 105,778 $ 154,043 Restricted cash 443 4,270 2,335 Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows $ 343,253 $ 110,048 $ 156,378 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsOn January 18, 2022, the Company acquired 100% of Hanover Family Builders, LLC ("Hanover"), a Florida-based homebuilder for an aggregate cash purchase price of $179.2 million. Concurrently with the closing of the acquisition, the Company repaid all $69.3 million in principal of Hanover’s outstanding indebtedness. The Company funded the acquisition, including the repayment of Hanover’s indebtedness from a combination of cash on hand and borrowings under the Company’s existing revolving credit facility. The total assets of Hanover include approximately 20 active communities (unaudited) and 3,800 lots owned and controlled (unaudited). The determination of the purchase accounting is in process as of the date of these consolidated financial statements. |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of Presentation and Consolidation—The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and include the accounts of the Company and all of its wholly owned, majority owned, and controlled subsidiaries, which are referred to as the Company, unless context requires otherwise. Non-controlling interest represents the proportionate equity interests in consolidated entities that are not wholly owned by the Company. |
Principles of Consolidation | All intercompany transactions and balances have been eliminated in consolidation. Prior to the Merger, the Company was historically funded as part of Landsea Holdings' treasury program. Cash and cash equivalents were primarily centrally managed through bank accounts legally owned by Landsea Holdings. Accordingly, cash and cash equivalents held by Landsea Holdings at the corporate level were not attributed to the Company for any of the periods presented prior to the merger. Only cash amounts legally owned by entities consolidated by the Company are reflected in the consolidated balance sheets. Transfers of cash, both to and from Landsea Holdings' treasury program, were reflected as a component of additional paid-in capital in the consolidated balance sheets and as a financing activity on the accompanying consolidated statements of cash flows. As the functional departments that made up the Company were not held by a single legal entity, balances between the Company and Landsea Holdings that were not historically cash settled were included in additional paid-in capital. Landsea Holdings holds a series of notes payable to affiliated entities of its parent. The cash Landsea Holdings received from this debt was partially utilized to fund operations of the Company. Related party interest incurred by Landsea Holdings (the "Related Party Interest") was historically pushed down to the Company and reflected on the consolidated balance sheets of the Company, primarily in real estate inventories, and on the consolidated statements of operations in cost of sales. Refer to Note 5 - Capitalized Interest for further detail. As the Company did not guarantee the notes payable nor have any obligations to repay the notes payable, and as the notes payable will not be assigned to the Company, the notes payable do not represent a liability of the Company and accordingly have not been reflected in the consolidated balance sheets. Additionally, in connection with the Merger, LHC is precluded from repaying Landsea Holdings' notes payable to the affiliated entities of its parent. Therefore, as of January 7, 2021, the Related Party Interest is no longer pushed down to LHC. During the periods presented in the consolidated financial statements prior to the Merger, the Company was included in the consolidated U.S. federal, and certain state and local, income tax returns filed by Landsea Holdings, where applicable. Income tax expense and other income tax related information contained in these consolidated financial statements are presented on a separate return basis as if the Company had filed its own tax returns. Additionally, certain tax attributes such as net operating losses or credit carryforwards are presented on a separate return basis, and accordingly, may differ in the future. In jurisdictions where the Company has been included in the tax returns filed by Landsea Holdings, any income tax payables or receivables resulting from the related income tax provisions have been reflected in the consolidated balance sheets and the effect of the push down is reflected within additional paid-in capital. Management of the Company believes that the assumptions underlying the consolidated financial statements reasonably reflect the utilization of services provided, or benefits received by the Company during the periods presented. Nevertheless, the consolidated financial statements may not be indicative of the Company’s future performance and therefore periods prior to the Merger do not necessarily reflect the results of operations, financial position, or cash flows of the Company if it had been an independent entity during those periods. |
Use of Estimates | Use of Estimates —The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ materially from these estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents—The Company defines cash and cash equivalents as demand deposits with financial institutions and short-term liquid investments with a maturity date of less than three months from the date of purchase. |
Cash Held in Escrow | Cash Held in Escrow— Cash held in escrow consists of proceeds from home closings held in escrow for the Company's benefit, typically for less than five days. |
Restricted Cash | Restricted Cash—Restricted cash consists of cash, cash equivalents, and certificates of deposit held as collateral related to development obligations or held in escrow by the Company's loan service providers on behalf of the lenders and disbursed in accordance with agreements between the transacting parties. |
Real Estate Inventories and Cost of Sales | Real Estate Inventories and Cost of Sales —Real estate inventories include actively selling projects as well as projects under development or held for future development. Inventories are stated at cost, unless the carrying amount is determined not to be recoverable, in which case inventory is written down to its fair value. The Company capitalizes pre-acquisition costs, land deposits, land, development, and other allocated costs, including interest, property taxes, and indirect construction costs to real estate inventories. Pre-acquisition costs, including non-refundable land deposits, are removed from inventory and expensed to other (expense) income, net, if the Company determines continuation of the prospective project is not probable. Land, development, and other common costs are typically allocated to real estate inventories using a methodology that approximates the relative-sales-value method. If the relative-sales-value-method is impracticable, costs are allocated based on area methods, such as square footage or lot size, or other value methods as appropriate under the circumstances. Home construction costs per production phase are recorded using the specific identification method. Cost of sales for homes closed includes construction costs of each home, an allocation of applicable land acquisition, land development, and related common costs, plus an estimate of any applicable costs required to complete the home or common area development. Changes in estimated development and common costs are allocated prospectively to remaining homes in a project. The Company reviews real estate inventories on a periodic basis or whenever indicators of impairment exist. If there are indicators of impairment, the Company performs a detailed budget and cash flow review of the applicable real estate inventories to determine whether the estimated undiscounted future cash flows of the project are more or less than the asset’s carrying value. If the estimated undiscounted future cash flows are more than the asset’s carrying value, no impairment adjustment is required. However, if the estimated undiscounted future cash flows are less than the asset’s carrying value, the asset is written down to fair value and impairment charges are recorded to cost of sales. We generally determine the estimated fair value of each community by using a discounted cash flow approach based on the estimated future cash flows at discount rates that reflect the risk of the community being evaluated. When estimating future cash flows of a project, the Company makes various assumptions including, estimated future housing revenues, sales absorption rates, land development, construction and related carrying costs, and direct selling and marketing costs. The discounted cash flow approach can be impacted significantly by our estimates of future cash flows and the applicable discount rate, which are Level 3 inputs. The key assumptions used in inventory valuation are subject to a variety of external factors and are inherently uncertain. Accordingly, actual results could differ from valuation estimates. See Note 4 - Real Estate Inventories for additional information. |
Capitalization of Interest | Capitalization of Interest —The Company follows the practice of capitalizing interest to real estate inventories during the period of development and to investments in unconsolidated joint ventures, when applicable, in accordance with Accounting Standards Codification ("ASC") Topic 835, Interest |
Business Combinations | Business Combinations —Acquisitions are accounted for in accordance with ASC 805, “Business Combinations.” In connection with the recent acquisitions of Vintage Estate Homes ("Vintage"), Garrett Walker Homes ("Garrett Walker"), and Pinnacle West Homes Holding Corp. ("Pinnacle West"), management determined in each case that the Company obtained control of a business including inputs, processes, and outputs in exchange for cash consideration. All material assets and liabilities were measured and recognized at fair value as of the date of the acquisition. Any excess of the purchase price over the estimated fair values of the identifiable net assets acquired is recorded as goodwill. Significant judgment is often required in estimating the fair value of assets acquired, particularly intangible assets. The fair value of acquired inventories largely depends on the stage of production of the acquired land and work in process inventory. For acquired land inventory, we typically utilize, with the assistance of a third party appraiser, a forecasted cash flow approach for the development, marketing, and sale of communities acquired. Significant assumptions included in our estimates include future per lot development costs, construction and overhead costs, mix of products sold in each community, as well as average sales price. For work in process inventories, we estimate the fair value based upon the stage of production of each unit and a gross margin that we believe a market participant would require to complete the remaining development and requisite selling efforts. Refer to Note 3 - Business Combinations for further information regarding the purchase price allocation and related acquisition accounting. |
Investment in and Advances to Unconsolidated Joint Ventures | Investment in and Advances to Unconsolidated Joint Ventures— The Company uses the equity method to account for investments in joint ventures that qualify as variable interest entities ("VIEs") where the Company is not the primary beneficiary and other entities that it does not control but has the ability to exercise significant influence over the operating and financial policies of the investee. The Company also uses the equity method when it functions as the managing member or general partner and its venture partner has substantive participating rights or where the Company can be replaced by its venture partner as managing member without cause. As of December 31, 2021 and 2020, the Company concluded that some of its joint ventures were VIEs. The Company concluded that it was not the primary beneficiary of the variable interest entities and, accordingly, accounted for these entities under the equity method of accounting. Under the equity method, the Company recognizes its proportionate share of earnings and losses generated by the joint venture upon the delivery of lots or homes to third parties. The Company classifies cash distributions received from equity method investees using the cumulative earnings approach. Under the cumulative earnings approach, distributions received are considered returns on investment and shall be classified as cash inflows from operating activities unless the cumulative distributions received less distributions received in prior periods exceed cumulative equity in earnings. When such an excess occurs, the current-period distribution up to this excess is considered a return of investment and shall be classified as cash inflows from investing activities. The Company's ownership interests in its unconsolidated joint ventures vary but are generally less than or equal to 51%. The accounting policies of the Company's joint ventures are consistent with those of the Company. |
Variable Interest Entities | Variable Interest Entities —The Company accounts for variable interest entities in accordance with ASC 810, Consolidation . Under ASC 810, a VIE is created when: (a) the equity investment at risk in the entity is not sufficient to permit the entity to finance its activities without additional subordinated financial support provided by other parties, including the equity holders; (b) the entity’s equity holders as a group either (i) lack the direct or indirect ability to make decisions about the entity, (ii) are not obligated to absorb expected losses of the entity or (iii) do not have the right to receive expected residual returns of the entity; or (c) the entity’s equity holders have voting rights that are not proportionate to their economic interests, and the activities of the entity involve or are conducted on behalf of the equity holder with disproportionately few voting rights. If an entity is deemed to be a VIE pursuant to ASC 810, the enterprise that has both (i) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (ii) the obligation to absorb the expected losses of the entity or right to receive benefits from the entity that could be potentially significant to the VIE is considered the primary beneficiary and must consolidate the VIE. Under ASC 810, a non-refundable deposit paid to an entity may be deemed to be a variable interest that will absorb some or all of the entity’s expected losses if they occur. The Company's land purchase and lot option deposits generally represent its maximum exposure to the land seller if it elects not to purchase the optioned property. Therefore, whenever the Company enters into a land option or purchase contract with an entity and makes a non-refundable deposit, a VIE may have been created. |
Goodwill | Goodwill—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. Goodwill and any other intangible assets that do not have finite lives are not amortized, but rather assessed for impairment at least annually. The Company performs an annual impairment test during the fourth quarter or whenever impairment indicators are present using a two-step process to assess whether or not goodwill should be impaired. The first step is a qualitative assessment that analyzes current economic indicators associated with a particular reporting unit. If the qualitative assessment indicates a stable or improved fair value, no further testing is required. If a qualitative assessment indicates that a significant decline to fair value of a reporting unit is more likely than not, or, at our election, we will proceed to the second step where we calculate the fair value of a reporting unit based on discounted future cash flows. If this step indicates that the carrying value of a reporting unit is in excess of its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. |
Property and Equipment | Property and Equipment—Property and equipment are recorded at cost and depreciated to general and administrative expense using the straight-line method over their estimated useful lives, typically ranging from two |
Capitalized Selling and Marketing Costs | Capitalized Selling and Marketing Costs —In accordance with ASC 606, Revenue from Contracts with Customers , and ASC 340, Other Assets and Deferred Cost, |
Warranty Accrual | Warranty Accrual —We provide home purchasers with limited warranties against certain building defects and we have certain obligations related to those post-construction warranties for closed homes. The specific terms and conditions of these limited warranties vary depending upon the markets in which we do business, but generally we provide all of our home buyers with a limited warranty as to workmanship and mechanical equipment and also provide many of our home buyers with a limited 10-year warranty as to structural integrity. Estimated future direct warranty costs are accrued and charged to cost of sales in the period when the related homebuilding revenues are recognized. Amounts are accrued based upon the Company's historical rates of warranty claims. Historical experience of the Company’s peers is also considered due to the Company's limited internal history of homebuilding sales. The adequacy of the warranty accrual is assessed on a quarterly basis to reflect changes in trends as information becomes available and the amounts recorded are adjusted if necessary. The warranty accrual is included in accrued expenses and other liabilities in the accompanying consolidated balance sheets and adjustments to are recorded through cost of sales. Warrant Liability —We account for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) ASC 480, and ASC 815. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are recorded as liabilities at their initial fair value on the date of issuance or assumption and remeasured to fair value at each balance sheet date thereafter. The Company’s outstanding Private Placement Warrants are presented on the consolidated balance sheets as a liability recorded at fair value with subsequent changes in fair value recognized in the consolidated statement of operations at each reporting date as a gain (loss) on remeasurement of the warrant liability. The fair value of the Private Placement Warrants is estimated using a Black-Scholes option pricing model which includes assumptions used in the model that are subjective and require significant judgment, including implied volatility, which is a Level 3 input. Each Private Placement Warrant is exercisable at $11.50 into one share of common stock. The Warrants will expire five years after the completion of the Merger or earlier upon redemption or liquidation. Refer to Note 16 - Stockholders' Equity for additional information on the Warrants. The fair value of the Private Placement Warrants is discussed further in Note 14 - Fair Value . |
Revenue Recognition | Home Sales Revenue— Home sales revenue is recognized when the Company's performance obligations within the underlying sales contracts are fulfilled. The Company considers its obligations fulfilled when closing conditions are complete, title has transferred to the homebuyer, and collection of the purchase price is reasonably assured. Sales incentives are recorded as a reduction of revenue when the respective home is closed. When it is determined that the earnings process is not complete, the related revenue is deferred for recognition in future periods. Lot Sales and Other Revenue— Revenues from lot sales and other revenue are recorded and a profit is recognized when performance obligations are satisfied, which includes transferring a promised good or service to a customer. Lot sales and other revenue is recognized when all conditions of escrow are met, including delivery of the real estate asset in the agreed-upon condition, passage of title, receipt of appropriate consideration, and collection of associated receivables, if any, is probable, and other applicable criteria are met. Based upon the terms of the agreement, when it is determined that the performance obligation is not satisfied, the sale and the related profit are deferred for recognition in future periods. Under the terms of certain lot sale and other contracts, the Company is obligated to perform certain development activities after the close of escrow. Due to this continuing involvement, the Company recognizes lot sales and other revenue under the percentage-of-completion method, whereby revenue is recognized in proportion to total costs incurred divided by total costs expected to be incurred. As of December 31, 2021, the Company had $4.0 million deferred revenue from lot sales and other revenue. The Company recognizes these amounts as development progresses and the related performance obligations are completed. As of December 31, 2021, the Company had contract assets of $6.1 million from lot sales and other contracts. The contract asset balance represents cash to be received for work already performed on lot sale and other contracts. The amount of the transaction price for lot sales and other contracts allocated to performance obligations that were unsatisfied, or partially unsatisfied, as of December 31, 2021 was $63.9 million. As of December 31, 2020, the Company had no deferred revenue or contract assets. There was no outstanding amount related to unsatisfied performance obligations as of December 31, 2020. |
Income Taxes | Income Taxes— The Company records income taxes in accordance with ASC 740, Income Taxes , whereby deferred tax assets and liabilities are recognized based on the differences in the book and tax bases of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates that are expected to apply in the years that the differences are expected to reverse. The Company adjusts deferred tax assets and liabilities for the effects of changes in tax laws and rates in the period of enactment. Tax credits are recognized through our effective tax rate calculation assuming that we will be able to realize the full benefit of the credits. |
Share-Based Compensation Expense | Stock-Based Compensation Expense —In accordance with ASC 718, Compensation—Stock Compensation |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application for fiscal years beginning after December 15, 2020. The Company adopted the amendments in this update on January 1, 2021. The adoption did not have a material impact on the Company's consolidated financial statements. In January 2020, the FASB issued ASU 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivative and Hedging (Topic 815) . ASU 2020-01 clarifies the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. The standard is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years, with early adoption permitted. The Company adopted the amendments in this update on January 1, 2021. The adoption did not have a material impact on the Company's consolidated financial statements. In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) , which provides clarity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. Particularly, the update states that an entity should treat a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange as an exchange of the original instrument for a new instrument. The standard is effective for fiscal years beginning after December 15, 2021, with early adoption permitted. The adoption is not expected to have a material impact on the Company's consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, which requires application of ASC 606, Revenue from Contracts with Customers , to recognize and measure contract assets and liabilities from contracts with customers acquired in a business combination. ASU 2021-08 creates an exception to the general recognition and measurement principle in ASC 805 and will result in recognition of contract assets and contract liabilities consistent with those recorded by the acquiree immediately before the acquisition date. The standard is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The adoption is not expected to have a material impact on the Company's consolidated financial statements. In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance , to increase the transparency of government assistance including the disclosure of (1) the types of assistance, (2) an entity’s accounting for the assistance, and (3) the effect of the assistance on an entity’s financial statements. The standard is effective for fiscal years beginning after December 15, 2021, with early adoption permitted. The Company early adopted this update for presentation of its consolidated financial statements as of December 31, 2021. The adoption did not have a material impact on the Company's consolidated financial statements. |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following is a summary of the allocation of the purchase price based on the fair value of assets acquired and liabilities assumed (dollars in thousands) . Assets Acquired Cash $ 10,063 Real estate inventories 93,699 Goodwill 3,752 Trade name 1,550 Other assets 3,956 Total assets $ 113,020 Liabilities Assumed Accounts payable $ 1,641 Accrued expenses 24,660 Notes payable 32,119 Total liabilities 58,420 Net assets acquired $ 54,600 The following is a summary of the allocation of the purchase price based on the fair value of assets acquired and liabilities assumed (dollars in thousands) . Assets Acquired Cash $ 2,905 Real estate inventories 119,466 Goodwill 15,392 Trade name 1,600 Other assets 532 Total assets $ 139,895 Liabilities Assumed Accounts payable $ 5,425 Accrued expenses 1,037 Total liabilities 6,462 Net assets acquired $ 133,433 the allocation of the purchase price based on the fair value of assets acquired and liabilities assumed (dollars in thousands) . Assets Cash $ 2,208 Real estate inventories 39,584 Goodwill 5,315 Other assets 60 Total assets $ 47,167 Liabilities Accounts payable $ 2,626 Notes payable 16,228 Accrued expenses and other liabilities 2,543 Total liabilities 21,397 Net assets acquired $ 25,770 |
Business Acquisition, Pro Forma Information | Year Ended December 31, 2021 2020 2019 (dollars in thousands) Revenue $ 1,078,715 $ 894,177 $ 799,559 Pretax income (loss) $ 76,747 $ (19,183) $ 35,336 (Provision) benefit for income taxes (16,095) 4,858 (7,625) Net income (loss) $ 60,652 $ (14,325) $ 27,711 |
Real Estate Inventories (Tables
Real Estate Inventories (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Real Estate Inventories [Abstract] | |
Schedule of Real Estate Inventories | Real estate inventories are summarized as follows: December 31, 2021 2020 (dollars in thousands) Deposits and pre-acquisition costs $ 65,724 $ 34,102 Land held and land under development 243,310 221,055 Homes completed or under construction 526,950 395,926 Model homes 8,808 36,736 Total real estate inventory $ 844,792 $ 687,819 |
Capitalized Interest (Tables)
Capitalized Interest (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Components Of Interest Costs | For the periods reported, interest incurred, capitalized, and expensed was as follows: Year Ended December 31, 2021 2020 2019 (dollars in thousands) Related party interest incurred or pushed down $ 457 $ 10,112 $ 11,115 Other interest incurred 26,750 21,425 24,906 Total interest incurred 27,207 31,537 36,021 Related party interest capitalized 457 10,112 11,115 Other interest capitalized 26,750 21,410 24,906 Total interest capitalized 27,207 31,522 36,021 Previously capitalized related party interest included in cost of sales $ 11,670 $ 14,110 $ 15,646 Previously capitalized other interest included in cost of sales 21,839 23,816 24,747 Related party interest relieved to equity in net income (loss) of unconsolidated joint ventures 1,250 1,146 1,908 Other interest relieved to equity in net income (loss) from unconsolidated joint ventures 17 16 26 Other interest expensed 32 15 — Total interest expense included in pretax income (loss) $ 34,808 $ 39,103 $ 42,327 |
Investment in and Advances to_2
Investment in and Advances to Unconsolidated Joint Ventures (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | The condensed combined balance sheets for the Company's unconsolidated joint ventures accounted for under the equity method are as follows: December 31, 2021 2020 (dollars in thousands) Cash and cash equivalents $ 2,275 $ 2,740 Restricted cash — 4,870 Real estate inventories 2,515 41,214 Other assets 122 123 Total assets $ 4,912 $ 48,947 Accounts payable $ 21 $ 188 Accrued expenses and other liabilities 3,465 3,928 Due to affiliates 787 5,735 Total liabilities 4,273 9,851 Members' capital 639 39,096 Total liabilities and members' capital $ 4,912 $ 48,947 The condensed combined statements of operations for the Company's unconsolidated joint ventures accounted for under the equity method are as follows: Year Ended December 31, 2021 2020 2019 (dollars in thousands) Revenues $ 50,067 $ 37,403 $ 54,633 Cost of sales and expenses (45,123) (40,230) (62,145) Impairment of real estate inventories — (27,094) (5,800) Equity in net income from unconsolidated joint ventures — — 1,087 Net (loss) income of unconsolidated joint ventures $ 4,944 $ (29,921) $ (12,225) Equity in net (loss) income from investment in unconsolidated joint ventures (1) $ 1,262 $ (16,418) $ (7,901) (1) The equity in net (loss) income of unconsolidated joint ventures consists of the allocation of the Company's proportionate share of income or loss from the unconsolidated joint ventures of $2.5 million income, $15.2 million loss, and $5.9 million loss as well as $1.3 million, $1.2 million, and $2.0 million of expense related to capitalized interest and other costs for the years ended December 31, 2021, 2020, and 2019, respectively. |
Other Assets (Tables)
Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Assets | Other assets consist of the following: December 31, 2021 2020 (dollars in thousands) Deferred tax asset, net $ 7,270 $ 13,248 Property and equipment, net (1) 6,601 6,386 Right-of-use asset 12,593 5,973 Contract assets 6,133 — Deferred offering costs — 7,617 Prepaid income taxes 645 1,003 Intangible asset, net 910 1,046 Prepaid expenses 5,309 3,029 Other 4,537 3,267 Total other assets $ 43,998 $ 41,569 (1) Property and equipment is net of $11.8 million and $8.1 million accumulated depreciation, respectively. |
Accrued Expenses and Other Li_2
Accrued Expenses and Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Liabilities | Accrued expenses and other liabilities consist of the following: December 31, 2021 2020 (dollars in thousands) Land development and home construction accrual $ 22,082 $ 25,910 Warranty accrual 15,692 11,730 Accrued compensation and benefits 14,913 10,966 Lease liabilities 13,190 6,396 Sales tax payable 2,885 1,867 Income tax payable 12,079 1,355 Interest payable 2,494 1,134 Deferred revenue 3,969 — Homebuyer deposits 7,825 17 Other deposits and liabilities 2,595 3,494 Total accrued expenses and other liabilities $ 97,724 $ 62,869 |
Schedule of Product Warranty Liability | Changes in the Company's warranty accrual are detailed in the table below: December 31, 2021 2020 (dollars in thousands) Beginning warranty accrual $ 11,730 $ 8,693 Warranty provision 6,013 3,843 Warranty payments (2,051) (806) Ending warranty accrual $ 15,692 $ 11,730 |
Notes and Other Debts Payable_2
Notes and Other Debts Payable, net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Amounts outstanding under Notes and other debts payable, net consist of the following: December 31, 2021 2020 (dollars in thousands) Construction loans $ 82,617 $ 67,757 Line of credit facilities 390,300 199,358 Loans payable — 5,144 Notes and other debts payable 472,917 272,259 Debt issuance costs (11,800) (7,450) Notes and other debts payable, net $ 461,117 $ 264,809 |
Schedule of Maturities of Long-term Debt | The aggregate maturities of the principal balances of the notes and other debts payable during the five years subsequent to December 31, 2021 are as follows (dollars in thousands) : 2022 $ 82,617 2023 — 2024 390,300 Thereafter — $ 472,917 |
Commitment and Contingencies (T
Commitment and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Operating Lease Maturity Schedule | The Company has various operating leases, most of which relate to office facilities and model homes. Maturities of lease liabilities under the noncancelable operating leases in effect at December 31, 2021 were as follows (dollars in thousands) : 2022 $ 4,628 2023 3,499 2024 2,363 2025 1,534 2026 1,241 Thereafter 996 Total lease payments 14,261 Less: Discount (1,071) Present value of lease liabilities $ 13,190 |
Related Party Disclosures (Tabl
Related Party Disclosures (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Summary of related-party costs incurred by the Company and amounts payable to the Manager | The real estate joint venture had net assets at the date of transfer of $28.9 million and a noncontrolling interest of $1.2 million as follows (dollars in thousands) : Assets Transferred Cash $ 338 Real estate inventories 49,705 Other assets 174 Total assets $ 50,217 Liabilities Transferred Accounts payable $ 1,416 Construction loan 17,825 Accrued expenses and other liabilities 2,102 Total liabilities 21,343 Net assets transferred 28,874 Noncontrolling interest transferred $ 1,242 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income tax expense (benefits) | The (benefit) provision for income taxes are as follows: Year Ended December 31, 2021 2020 2019 (dollars in thousands) Current: Federal $ 11,507 $ 833 $ 4,766 State 5,314 1,104 2,505 Current tax provision 16,821 1,937 7,271 Deferred: Federal (2,425) (3,602) (705) State (401) (1,416) (407) Deferred tax benefit (2,826) (5,018) (1,112) Total income tax (benefit) provision, net $ 13,995 $ (3,081) $ 6,159 |
Schedule of Effective Income Tax Rate Reconciliation | The provision for income taxes varies from the U.S. federal statutory rate. The following reconciliation shows the significant differences in the tax at statutory and effective rates: Year Ended December 31, 2021 2020 2019 Federal income tax expense 21.0 % 21.0 % 21.0 % State income tax expense, net of federal tax effect 5.6 5.7 6.9 Permanent differences (0.6) (0.3) 0.1 162(m) limitation (1.3) — — PPP loan 1.8 — — Energy efficient home credit (6.2) 5.6 (5.4) Return to provision adjustment 0.4 (3.5) (1.2) Rate change 0.1 (3.2) 0.2 Change of valuation allowance 0.2 — — Effective tax rate 21.0 % 25.3 % 21.6 % |
Schedule of Deferred Tax Assets and Liabilities | The tax effects of significant temporary differences that give rise to the deferred tax assets, net of deferred tax liabilities, are as follows: December 31, 2021 2020 (dollars in thousands) Deferred tax assets Accrued expenses $ 3,764 $ 15,208 Lease liability 3,479 1,748 Allowance, reserves, and other 1,118 225 Net operating loss and credit carryforward 87 25 Stock compensation 905 — UNICAP 1,677 — Goodwill and intangibles 606 — Basis difference in investments 108 — Deferred tax asset 11,744 17,206 Less: Valuation allowance (128) — Deferred tax asset, net 11,616 17,206 Deferred tax liabilities Right-of-use asset (3,321) (1,635) Basis difference in fixed assets and intangible assets (1,025) (1,457) Basis difference in investments — (866) Deferred tax liability (4,346) (3,958) Net deferred tax asset $ 7,270 $ 13,248 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following table summarizes total revenue and pretax income (loss) by segment: Year Ended December 31, 2021 2020 2019 (dollars in thousands) Revenue Arizona $ 340,767 $ 320,691 $ 40,024 California 557,182 413,917 590,964 Florida 93,632 — — Metro New York (1) — — — Texas $ 31,723 $ — $ — Total $ 1,023,304 $ 734,608 $ 630,988 Pretax income (loss) Arizona $ 25,681 $ 9,325 $ (3,927) California 61,073 10,131 53,019 Florida (492) — — Metro New York (1) (2,154) (19,764) (13,225) Texas (439) — — Corporate (16,939) (11,857) (7,317) Total $ 66,730 $ (12,165) $ 28,550 (1) The Metro New York reportable segment does not currently generate any revenue. Included in pretax income (loss) is $1.3 million of income, $16.4 million loss, and $7.9 million loss from unconsolidated joint ventures for the years ended December 31, 2021, 2020 and 2019, respectively. |
Reconciliation of Assets from Segment to Consolidated | The following table summarizes total assets by segment: December 31, 2021 2020 (dollars in thousands) Assets Arizona $ 360,598 $ 268,141 California 400,292 409,705 Florida 102,158 — Metro New York 124,962 120,168 Texas 35,984 — Corporate 241,520 97,750 Total $ 1,265,514 $ 895,764 |
Fair Value Measures and Disclos
Fair Value Measures and Disclosures (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table presents carrying values and estimated fair values of financial instruments: December 31, 2021 December 31, 2020 Hierarchy Carrying Fair Value Carrying Fair Value (dollars in thousands) Liabilities: Construction loans (1) Level 2 $ 82,617 $ 82,617 $ 67,757 $ 67,757 Revolving credit facility (1) Level 2 $ 390,300 $ 390,300 $ 199,358 $ 199,358 Loans payable (2) Level 2 $ — $ — $ 5,144 $ 5,144 Warrant liability Level 3 $ 9,185 $ 9,185 $ — $ — (1) Carrying amount approximates fair value due to the variable interest rate terms of these loans. Carrying value excludes any associated deferred loan costs. (2) Carrying amount approximates fair value due to recent issuances of debt having similar characteristics, including interest rate. Carrying value excludes any associated deferred loan costs. |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following table reconciles the beginning and ending balances for the Level 3 recurring fair value measurements during the periods presented: December 31, 2021 2020 (dollars in thousands) Warrant liability Beginning balance (1) $ 11,275 $ — Changes in fair value (2,090) — Ending balance $ 9,185 $ — (1) The beginning balance for the year ended December 31, 2021 represents the balance as of January 7, 2021, the Closing Date of the Merger. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock Compensation Activity | The following table presents a summary of the Company’s nonvested PSUs and RSUs as of December 31, 2021 and changes during the year then ended: Year Ended December 31, 2021 2020 2019 Awards Weighted Average Grant Date Fair Value Awards Weighted Average Grant Date Fair Value Awards Weighted Average Grant Date Fair Value (in thousands, except fair value amounts) Outstanding, beginning of the year — $ — — $ — — $ — Granted 886 9.45 — — — — Vested (118) 9.55 — — — — Forfeited — — — — — — Outstanding, end of the year 768 $ 9.43 — $ — — $ — |
Share-based Payment Arrangement, Performance Shares, Activity | A summary of our outstanding RSUs and PSUs, assuming current estimated level of performance achievement, are as follows: December 31, 2021 (in thousands, except years) Unvested units 768 Remaining cost on unvested units $ 5,102 Remaining vesting period 3.21 years |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted EPS for the years ended December 31, 2021, 2020, and 2019: Year Ended December 31, 2021 2020 2019 (in thousands, except share and per share amounts) Numerator Net income (loss) attributable to Landsea Homes Corporation $ 52,786 $ (8,951) $ 17,200 Less: undistributed earnings allocated to participating shares (1,161) — — Net income (loss) attributable to common stockholders $ 51,625 $ (8,951) $ 17,200 Denominator Weighted average common shares outstanding - basic 46,193,166 32,557,303 32,557,303 Adjustment for weighted average participating shares outstanding (994,444) — — Adjusted weighted average common shares outstanding under two class method - basic 45,198,722 32,557,303 32,557,303 Dilutive effect of warrants — — — Dilutive effect of share-based awards 51,996 — — Adjusted weighted average common shares outstanding under two class method - diluted 45,250,718 32,557,303 32,557,303 Earnings per share Basic $ 1.14 $ (0.27) $ 0.53 Diluted $ 1.14 $ (0.27) $ 0.53 |
Supplemental Disclosures of C_2
Supplemental Disclosures of Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | The following table presents certain supplemental cash flow information: Year Ended December 31, 2021 2020 2019 (dollars in thousands) Supplemental disclosures of cash flow information Interest paid, net of amounts capitalized $ 32 $ 15 $ — Income taxes paid $ 7,575 $ 7,309 $ 14,152 Supplemental disclosures of non-cash investing and financing activities Transfer of deferred tax asset to Landsea Holdings $ 11,785 $ — $ — Conversion of deferred offering costs to additional paid-in-capital $ 9,229 $ — $ — Amortization of deferred financing costs capitalized to real estate inventories $ 4,173 $ 3,753 $ 3,524 Right-of-use assets obtained in exchange for operating lease liabilities for new or modified operating leases $ 6,688 $ 1,053 $ 3,208 Distribution of real estate joint venture to Landsea Holdings, net of cash provided $ — $ 27,294 $ — Business acquisition holdback $ — $ 2,000 $ — Amortization of prepaid interest $ — $ — $ 2,994 Cash, cash equivalents, and restricted cash reconciliation Cash and cash equivalents $ 342,810 $ 105,778 $ 154,043 Restricted cash 443 4,270 2,335 Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows $ 343,253 $ 110,048 $ 156,378 |
Company (Details)
Company (Details) $ / shares in Units, $ in Thousands | Jan. 07, 2021USD ($)$ / sharesshares | Dec. 31, 2021USD ($)$ / shares | Dec. 31, 2021USD ($)segment$ / sharesshares | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Number of reportable segments | segment | 5 | ||||
Business Acquisition [Line Items] | |||||
Proceeds from merger, net of fees and other costs | $ 64,434 | $ 0 | $ 0 | ||
Recapitalization transaction, net of fees and deferred taxes | 33,368 | ||||
Additional paid-in capital | |||||
Business Acquisition [Line Items] | |||||
Recapitalization transaction, net of fees and deferred taxes | $ 33,366 | ||||
Private Placement Warrants | |||||
Business Acquisition [Line Items] | |||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 11.50 | $ 11.50 | |||
Phantom Awards | |||||
Business Acquisition [Line Items] | |||||
Grants in period (in shares) | shares | 200,000 | ||||
Grant date value at the time of the merger | $ 1,900 | $ 1,900 | |||
General and Administrative Expense | Phantom Awards | |||||
Business Acquisition [Line Items] | |||||
Accelerated vesting cost | $ 2,700 | ||||
Merger Agreement | |||||
Business Acquisition [Line Items] | |||||
Proceeds from merger, net of fees and other costs | $ 64,400 | ||||
Payments for merger related costs | 28,700 | ||||
Transaction expenses incurred | 7,500 | ||||
Direct and incremental costs | 16,700 | ||||
Merger Agreement | Additional paid-in capital | |||||
Business Acquisition [Line Items] | |||||
Recapitalization transaction, net of fees and deferred taxes | $ 1,700 | ||||
Merger Agreement | Phantom Awards | |||||
Business Acquisition [Line Items] | |||||
Cash payments of phantom stock awards | 2,900 | ||||
Grants in period (in shares) | shares | 200,000 | ||||
Grant date value at the time of the merger | $ 1,900 | ||||
Merger Agreement | General and Administrative Expense | Phantom Awards | |||||
Business Acquisition [Line Items] | |||||
Accelerated vesting cost | $ 2,700 | ||||
Merger Agreement | Common Class A | Level Field Capital, LLC | |||||
Business Acquisition [Line Items] | |||||
Equity interests still held (in shares) | shares | 1,000,000 | ||||
Merger Agreement | Common Class A | LF Capital Acquisitions Corps | |||||
Business Acquisition [Line Items] | |||||
Stock consideration, amount | $ 343,800 | ||||
Stock consideration (in shares) | shares | 32,600,000 | ||||
Stock consideration, share price (in dollars per share) | $ / shares | $ 10.56 | ||||
Merger Agreement | Earnout Shares | Landsea Holdings | Level Field Capital, LLC | |||||
Business Acquisition [Line Items] | |||||
Equity interests transferred (in shares) | shares | 500,000 | ||||
Merger Agreement | Private Placement Warrants | Level Field Capital, LLC | |||||
Business Acquisition [Line Items] | |||||
Equity interests forfeited (in shares) | shares | 2,300,000 | ||||
Merger Agreement | Private Placement Warrants | Landsea Holdings | Level Field Capital, LLC | |||||
Business Acquisition [Line Items] | |||||
Equity interests transferred (in shares) | shares | 2,200,000 |
Significant Accounting Polici_2
Significant Accounting Policies - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Equity method investment, impairment charge | $ 0 | $ 0 | |
Impairment of goodwill | 0 | 0 | |
Amortization of capitalized selling and marketing costs | 2,000,000 | 1,600,000 | $ 1,900,000 |
Marketing and advertising Expense | $ 3,200,000 | 2,400,000 | $ 2,500,000 |
Warranty term (in years) | 10 years | ||
Warrants outstanding, term (in years) | 5 years | ||
Deferred revenue | $ 3,969,000 | 0 | |
Deposit contracts, assets | 6,100,000 | ||
Remaining performance obligation, amount | $ 63,900,000 | $ 0 | |
Warrant | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Exercise price of warrants (in dollars per share) | $ 11.50 |
Significant Accounting Polici_3
Significant Accounting Policies - Property and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property plant and equipment | |||
Depreciation | $ 1.7 | $ 1.4 | $ 1.1 |
Minimum | Property, Plant and Equipment | |||
Property plant and equipment | |||
Useful life | 2 years | ||
Maximum | Property, Plant and Equipment | |||
Property plant and equipment | |||
Useful life | 5 years |
Business Combinations - Narrati
Business Combinations - Narrative (Details) $ in Thousands | May 04, 2021USD ($)project | Jan. 15, 2020USD ($)project | Jun. 20, 2019USD ($)project | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) |
Business Acquisition [Line Items] | |||||
Goodwill | $ 24,457 | $ 20,705 | |||
Goodwill | |||||
Business Acquisition [Line Items] | |||||
Useful life | 15 years | ||||
Garret Walker | |||||
Business Acquisition [Line Items] | |||||
Percentage interests acquired | 100.00% | ||||
Cash consideration | $ 133,400 | ||||
Number of projects acquired in acquisition | project | 20 | ||||
Number of lots acquired in acquisition | project | 1,750 | ||||
Goodwill, acquired during period | $ 15,392 | ||||
Garret Walker | Trade Names | |||||
Business Acquisition [Line Items] | |||||
Trade name | $ 1,600 | ||||
Useful life | 3 years | ||||
Garret Walker | Goodwill | |||||
Business Acquisition [Line Items] | |||||
Useful life | 15 years | ||||
Goodwill, acquired during period | $ 15,400 | ||||
Pinnacle West | |||||
Business Acquisition [Line Items] | |||||
Percentage interests acquired | 100.00% | ||||
Cash consideration | $ 25,800 | ||||
Liabilities assumed in acquisition | $ 16,228 | ||||
Number of projects acquired in acquisition | project | 15 | ||||
Transaction related costs | 1,100 | ||||
Goodwill | $ 5,315 | ||||
Pinnacle West | Goodwill | |||||
Business Acquisition [Line Items] | |||||
Useful life | 15 years | ||||
Goodwill, acquired during period | $ 5,300 | ||||
Mercedes Premier Homes, LLC | |||||
Business Acquisition [Line Items] | |||||
Percentage interests acquired | 100.00% | ||||
Cash consideration | $ 54,600 | ||||
Liabilities assumed in acquisition | 32,119 | ||||
Repayments of notes and other debts payable | $ 3,800 | ||||
Number of projects acquired in acquisition | project | 20 | ||||
Number of lots acquired in acquisition | project | 1,800 | ||||
Transaction related costs | 900 | ||||
Goodwill | $ 3,752 | ||||
Revenue of acquiree since acquisition | 125,400 | ||||
Income before tax, inclusive of purchase price accounting | $ (900) | ||||
Mercedes Premier Homes, LLC | Trade Names | |||||
Business Acquisition [Line Items] | |||||
Trade name | $ 1,550 | ||||
Useful life | 1 year | ||||
Garret Walker Homes | |||||
Business Acquisition [Line Items] | |||||
Transaction related costs | $ 700 |
Business Combinations - Net Ass
Business Combinations - Net Assets Acquired (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | May 04, 2021 | Dec. 31, 2020 | Jan. 15, 2020 | Jun. 20, 2019 |
Assets | |||||
Goodwill | $ 24,457 | $ 20,705 | |||
Garret Walker | |||||
Assets | |||||
Cash | $ 2,905 | ||||
Real estate inventories | 119,466 | ||||
Other assets | 532 | ||||
Total assets | 139,895 | ||||
Liabilities | |||||
Accounts payable | 5,425 | ||||
Accrued expenses and other liabilities | 1,037 | ||||
Total liabilities | 6,462 | ||||
Net assets acquired | 133,433 | ||||
Garret Walker | Trade Names | |||||
Assets | |||||
Trade name | $ 1,600 | ||||
Pinnacle West | |||||
Assets | |||||
Cash | $ 2,208 | ||||
Real estate inventories | 39,584 | ||||
Goodwill | 5,315 | ||||
Other assets | 60 | ||||
Total assets | 47,167 | ||||
Liabilities | |||||
Accounts payable | 2,626 | ||||
Notes payable | 16,228 | ||||
Accrued expenses and other liabilities | 2,543 | ||||
Total liabilities | 21,397 | ||||
Net assets acquired | $ 25,770 | ||||
Mercedes Premier Homes, LLC | |||||
Assets | |||||
Cash | $ 10,063 | ||||
Real estate inventories | 93,699 | ||||
Goodwill | 3,752 | ||||
Other assets | 3,956 | ||||
Total assets | 113,020 | ||||
Liabilities | |||||
Accounts payable | 1,641 | ||||
Notes payable | 32,119 | ||||
Accrued expenses and other liabilities | 24,660 | ||||
Total liabilities | 58,420 | ||||
Net assets acquired | 54,600 | ||||
Mercedes Premier Homes, LLC | Trade Names | |||||
Assets | |||||
Trade name | $ 1,550 |
Business Combinations - Pro For
Business Combinations - Pro Forma Financial Information (Details) - Pinnacle West - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Business Acquisition [Line Items] | |||
Revenue | $ 1,078,715 | $ 894,177 | $ 799,559 |
Pretax income (loss) | 76,747 | (19,183) | 35,336 |
(Provision) benefit for income taxes | (16,095) | 4,858 | (7,625) |
Net income (loss) | $ 60,652 | $ (14,325) | $ 27,711 |
Real Estate Inventories (Detail
Real Estate Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Real Estate Inventories [Abstract] | ||
Deposits and pre-acquisition costs | $ 65,724 | $ 34,102 |
Land held and land under development | 243,310 | 221,055 |
Homes completed or under construction | 526,950 | 395,926 |
Model homes | 8,808 | 36,736 |
Total real estate inventory | $ 844,792 | $ 687,819 |
Real Estate Inventories - Narra
Real Estate Inventories - Narrative (Details) $ in Thousands | May 04, 2021USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($)realEstate_Community |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Impairment of real estate inventories | $ 0 | $ 3,400 | |
Goodwill | $ 24,457 | $ 20,705 | |
Mercedes Premier Homes, LLC | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Goodwill | $ 3,752 | ||
Mercedes Premier Homes, LLC | Trade Names | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Trade name | $ 1,550 | ||
Useful life | 1 year | ||
California | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Number of real estate communities | realEstate_Community | 2 | ||
Minimum | Measurement Input, Default Rate | Valuation Technique, Discounted Cash Flow | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Real estate inventory impairments, measurement input | 0.07 | ||
Maximum | Measurement Input, Default Rate | Valuation Technique, Discounted Cash Flow | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Real estate inventory impairments, measurement input | 0.10 |
Capitalized Interest (Details)
Capitalized Interest (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Schedule of Capitalization [Line Items] | |||
Related party interest incurred or pushed down | $ 457 | $ 10,112 | $ 11,115 |
Other interest incurred | 26,750 | 21,425 | 24,906 |
Total interest incurred | 27,207 | 31,537 | 36,021 |
Related party interest capitalized | 457 | 10,112 | 11,115 |
Other interest capitalized | 26,750 | 21,410 | 24,906 |
Total interest capitalized | 27,207 | 31,522 | 36,021 |
Other interest expensed | 32 | 15 | 0 |
Total interest expense included in pretax income (loss) | 34,808 | 39,103 | 42,327 |
Cost of Sales | |||
Schedule of Capitalization [Line Items] | |||
Capitalized related party interest | 11,670 | 14,110 | 15,646 |
Other interest relieved to equity in net income (loss) from unconsolidated joint ventures | 21,839 | 23,816 | 24,747 |
Income (Loss) From Equity Method Investments | |||
Schedule of Capitalization [Line Items] | |||
Capitalized related party interest | 1,250 | 1,146 | 1,908 |
Other interest relieved to equity in net income (loss) from unconsolidated joint ventures | $ 17 | $ 16 | $ 26 |
Investment in and Advances to_3
Investment in and Advances to Unconsolidated Joint Ventures - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2021USD ($)joint_venture | Dec. 31, 2020USD ($)joint_venture | Dec. 31, 2019USD ($) | |
Schedule of Equity Method Investments [Line Items] | |||
Equity method investment, impairment charge | $ 0 | $ 0 | |
LS-NJ Port Imperial JV LLC and LS-Boston Point LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Number of investments | joint_venture | 2 | 2 | |
Asset impairment charges | $ 27,100,000 | $ 5,800,000 | |
LS-Boston Point LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership interest (percent) | 25.00% | 25.00% |
Investment in and Advances to_4
Investment in and Advances to Unconsolidated Joint Ventures - Summarized Financial Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Assets | |||
Cash and cash equivalents | $ 342,810 | $ 105,778 | $ 154,043 |
Restricted cash | 443 | 4,270 | 2,335 |
Real estate inventories | 844,792 | 687,819 | |
Total assets | 1,265,514 | 895,764 | |
Liabilities [Abstract] | |||
Accounts payable | 73,734 | 36,243 | |
Accrued expenses and other liabilities | 97,724 | 62,869 | |
Due to affiliates | 2,357 | 2,357 | |
Total liabilities | 644,117 | 366,278 | |
Equity | |||
Total liabilities and equity | 1,265,514 | 895,764 | |
Income Statement [Abstract] | |||
Revenue | 1,023,304 | 734,608 | 630,988 |
Impairment of real estate inventories | 0 | (3,400) | |
Equity in net income from unconsolidated joint ventures | 1,262 | (16,418) | (7,901) |
Net (loss) income of unconsolidated joint ventures | 52,735 | (9,084) | 22,391 |
LS-NJ Port Imperial JV LLC and LS-Boston Point LLC | |||
Assets | |||
Cash and cash equivalents | 2,275 | 2,740 | |
Restricted cash | 0 | 4,870 | |
Real estate inventories | 2,515 | 41,214 | |
Other assets | 122 | 123 | |
Total assets | 4,912 | 48,947 | |
Liabilities [Abstract] | |||
Accounts payable | 21 | 188 | |
Accrued expenses and other liabilities | 3,465 | 3,928 | |
Due to affiliates | 787 | 5,735 | |
Total liabilities | 4,273 | 9,851 | |
Equity | |||
Members' capital | 639 | 39,096 | |
Total liabilities and equity | 4,912 | 48,947 | |
Income Statement [Abstract] | |||
Revenue | 50,067 | 37,403 | 54,633 |
Cost of sales and expenses | (45,123) | (40,230) | (62,145) |
Impairment of real estate inventories | 0 | (27,094) | (5,800) |
Equity in net income from unconsolidated joint ventures | 0 | 0 | 1,087 |
Net (loss) income of unconsolidated joint ventures | 4,944 | (29,921) | (12,225) |
Equity in net (loss) income from investment in unconsolidated joint ventures | 1,262 | (16,418) | (7,901) |
Unconsolidated joint venture | |||
Income Statement [Abstract] | |||
Equity in net income from unconsolidated joint ventures | 2,500 | (15,200) | (5,900) |
Amortization expense | $ (1,300) | $ (1,200) | $ (2,000) |
Other Assets (Details)
Other Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Total other assets | Total other assets |
Total other assets | ||
Deferred tax asset, net | $ 7,270 | $ 13,248 |
Property and equipment, net(1) | 6,601 | 6,386 |
Right-of-use asset | 12,593 | 5,973 |
Contract assets | 6,133 | 0 |
Deferred offering costs | 0 | 7,617 |
Prepaid income taxes | 645 | 1,003 |
Intangible asset, net | 910 | 1,046 |
Prepaid expenses | 5,309 | 3,029 |
Other | 4,537 | 3,267 |
Total other assets | 43,998 | 41,569 |
Accumulated depreciation | $ 11,800 | $ 8,100 |
Accrued Expenses and Other Li_3
Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | |||
Land development and home construction accrual | $ 22,082 | $ 25,910 | |
Accrued compensation and benefits | $ 14,913 | $ 10,966 | |
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Accounts Payable and Accrued Liabilities [Member] | Accounts Payable and Accrued Liabilities [Member] | |
Warranty accrual | $ 15,692 | $ 11,730 | $ 8,693 |
Lease liabilities | 13,190 | 6,396 | |
Sales tax payable | 2,885 | 1,867 | |
Income tax payable | 12,079 | 1,355 | |
Interest payable | 2,494 | 1,134 | |
Deferred revenue | 3,969 | 0 | |
Homebuyer deposits | 7,825 | 17 | |
Other deposits and liabilities | 2,595 | 3,494 | |
Total accrued expenses and other liabilities | $ 97,724 | $ 62,869 |
Accrued Expenses and Other Li_4
Accrued Expenses and Other Liabilities - Product Warranty Accrual (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Beginning warranty accrual | $ 11,730 | $ 8,693 |
Warranty provision | 6,013 | 3,843 |
Warranty payments | (2,051) | (806) |
Ending warranty accrual | $ 15,692 | $ 11,730 |
Notes and Other Debts Payable_3
Notes and Other Debts Payable, net - Schedule of Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Notes and other debts payable | $ 472,917 | $ 272,259 |
Deferred Costs | (11,800) | (7,450) |
Long-term debt | 461,117 | 264,809 |
Construction Loans | ||
Debt Instrument [Line Items] | ||
Notes and other debts payable | 82,617 | 67,757 |
Line of Credit | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Notes and other debts payable | 390,300 | 199,358 |
Loans Payable | ||
Debt Instrument [Line Items] | ||
Notes and other debts payable | $ 0 | $ 5,144 |
Notes and Other Debts Payable_4
Notes and Other Debts Payable, net - Narrative (Details) - USD ($) $ in Millions | Oct. 06, 2021 | Apr. 15, 2020 | Dec. 31, 2021 | Dec. 31, 2021 |
Construction Loans | Construction Loan Acquired in Acquisition of Real Estate Inventory | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 6.50% | |||
Effective interest rate at period end | 8.25% | 8.25% | ||
Construction Loans | Minimum | Construction Loan Acquired in Acquisition of Real Estate Inventory | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 8.25% | |||
Line of Credit | Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Current borrowing capacity | $ 585 | |||
Maximum borrowing capacity | $ 850 | |||
Line of Credit | Credit Agreement | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 3.25% | |||
Line of Credit | Credit Agreement | Prime Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 2.75% | |||
Effective interest rate at period end | 3.75% | 3.75% | ||
Line of Credit | Credit Agreement | Minimum | Prime Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 3.75% | |||
Paycheck Protection Program Notes | ||||
Debt Instrument [Line Items] | ||||
Proceeds from PPP loan | $ 4.3 | $ 14.9 |
Notes and Other Debts Payable_5
Notes and Other Debts Payable, net - Maturities of Principal Balances (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Disclosure [Abstract] | ||
2022 | $ 82,617 | |
2023 | 0 | |
2024 | 390,300 | |
Thereafter | 0 | |
Long-term debt | $ 472,917 | $ 272,259 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Thousands | Apr. 15, 2020 | Dec. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Loss Contingencies [Line Items] | |||||
Land purchase contracts, deposits | $ 63,600 | $ 63,600 | |||
Land purchase contracts, refundable amount | 0 | 0 | |||
Land purchase contracts, total remaining purchase price | $ 399,100 | $ 399,100 | |||
Period land purchase contracts are expected to purchased within (in years) | 4 years | ||||
Operating lease expense | $ 1,900 | $ 2,000 | $ 1,800 | ||
Weighted average remaining lease term (in years) | 4 years 1 month 6 days | 4 years 1 month 6 days | 4 years 4 months 24 days | ||
Weighted average rate (percent) | 3.80% | 3.80% | 5.90% | ||
Right-of-use asset | $ 12,593 | $ 12,593 | $ 5,973 | ||
Present value of lease liabilities | 13,190 | 13,190 | 6,396 | ||
Revenue | 1,023,304 | 734,608 | 630,988 | ||
Home Sales | |||||
Loss Contingencies [Line Items] | |||||
Cost of sales and expenses | 772,575 | 636,324 | 478,054 | ||
Revenue | 936,400 | 734,608 | 568,872 | ||
Lot Sales and other | |||||
Loss Contingencies [Line Items] | |||||
Cost of sales and expenses | 68,131 | 0 | 53,475 | ||
Revenue | $ 86,904 | 0 | $ 62,116 | ||
Sale and Lease Back of Model Homes | |||||
Loss Contingencies [Line Items] | |||||
Sale leaseback transaction, lease term (in years) | 2 years | ||||
Sale and Lease Back of Model Homes | Home Sales | |||||
Loss Contingencies [Line Items] | |||||
Cost of sales and expenses | $ 26,100 | ||||
Revenue | 35,000 | ||||
Sale and Lease Back of Model Homes | Lot Sales and other | |||||
Loss Contingencies [Line Items] | |||||
Cost of sales and expenses | 3,000 | ||||
Revenue | $ 3,200 | ||||
Paycheck Protection Program Notes | |||||
Loss Contingencies [Line Items] | |||||
Proceeds from PPP loan | $ 4,300 | $ 14,900 | |||
Minimum | |||||
Loss Contingencies [Line Items] | |||||
Lease term (in years) | 1 year | 1 year | |||
Maximum | |||||
Loss Contingencies [Line Items] | |||||
Lease term (in years) | 7 years | 7 years | |||
Performance Guarantee | |||||
Loss Contingencies [Line Items] | |||||
Performance bonds outstanding | $ 94,700 | $ 94,700 | $ 78,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Maturity Schedule (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Commitments and Contingencies Disclosure [Abstract] | ||
2022 | $ 4,628 | |
2023 | 3,499 | |
2024 | 2,363 | |
2025 | 1,534 | |
2026 | 1,241 | |
Thereafter | 996 | |
Total lease payments | 14,261 | |
Less: Discount | (1,071) | |
Present value of lease liabilities | $ 13,190 | $ 6,396 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Dec. 31, 2021 | Jul. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2021 | Jun. 30, 2020 | |
Related Party Transaction [Line Items] | |||||||
Other assets | $ 43,998 | $ 43,998 | $ 41,569 | ||||
Accrued expenses and other liabilities | 97,724 | 97,724 | 62,869 | ||||
California | |||||||
Related Party Transaction [Line Items] | |||||||
Related party transaction, rate | 7.00% | ||||||
Capitalized related party interest | 400 | ||||||
Developed lots purchased in the period | 0 | ||||||
Predetermined Land Purchase Price | California | |||||||
Related Party Transaction [Line Items] | |||||||
Loan purchased from affiliate | $ 28,900 | ||||||
Equity Method Investee | |||||||
Related Party Transaction [Line Items] | |||||||
Due from related parties | 2,100 | 2,100 | 300 | ||||
LHold | Corporate Joint Venture | |||||||
Related Party Transaction [Line Items] | |||||||
Net assets transferred | $ 28,874 | ||||||
Noncontrolling interest transferred | $ 1,242 | ||||||
Deferred tax assets | $ 12,100 | ||||||
Affiliated Entity | |||||||
Related Party Transaction [Line Items] | |||||||
Revenue from related parties | 15,200 | ||||||
Other assets | 2,010 | 2,010 | 0 | ||||
Accrued expenses and other liabilities | 2,010 | 2,010 | 0 | ||||
Affiliated Entity | Home Sales | |||||||
Related Party Transaction [Line Items] | |||||||
Capitalized related party interest | 11,670 | 14,110 | $ 15,526 | ||||
Revenue from related parties | 10,800 | ||||||
Cost of sales with related party transactions | 8,800 | ||||||
Affiliated Entity | Lot Sales and other | |||||||
Related Party Transaction [Line Items] | |||||||
Capitalized related party interest | $ 0 | $ 0 | $ 120 | ||||
Revenue from related parties | 3,200 | ||||||
Cost of sales with related party transactions | $ 3,000 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Related Party Transactions (Details) - Corporate Joint Venture - LHold $ in Thousands | Jun. 30, 2021USD ($) |
Assets Transferred | |
Cash and cash equivalents | $ 338 |
Real estate inventories | 49,705 |
Other assets | 174 |
Total assets | 50,217 |
Liabilities Transferred | |
Accounts payable | 1,416 |
Construction loan | 17,825 |
Accrued expenses and other liabilities | 2,102 |
Total liabilities | 21,343 |
Net assets transferred | 28,874 |
Noncontrolling interest transferred | $ 1,242 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Current: | |||
Federal | $ 11,507 | $ 833 | $ 4,766 |
State | 5,314 | 1,104 | 2,505 |
Current tax provision | 16,821 | 1,937 | 7,271 |
Deferred: | |||
Federal | (2,425) | (3,602) | (705) |
State | (401) | (1,416) | (407) |
Deferred tax benefit | (2,826) | (5,018) | (1,112) |
Total income tax (benefit) provision, net | $ 13,995 | $ (3,081) | $ 6,159 |
Income Taxes - Effective Income
Income Taxes - Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Federal income tax expense | 21.00% | 21.00% | 21.00% |
State income tax expense, net of federal tax effect | 5.60% | 5.70% | 6.90% |
Permanent differences | (0.60%) | (0.30%) | 0.10% |
162(m) limitation | (1.30%) | 0.00% | 0.00% |
PPP loan | 1.80% | 0.00% | 0.00% |
Energy efficient home credit | (6.20%) | 5.60% | (5.40%) |
Return to provision adjustment | 0.40% | (3.50%) | (1.20%) |
Rate change | 0.10% | (3.20%) | 0.20% |
Change of valuation allowance | 0.20% | 0.00% | 0.00% |
Effective tax rate | 21.00% | 25.30% | 21.60% |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred Tax Assets, Gross [Abstract] | ||
Accrued expenses | $ 3,764 | $ 15,208 |
Lease liability | 3,479 | 1,748 |
Allowance, reserves, and other | 1,118 | 225 |
Net operating loss and credit carryforward | 87 | 25 |
Stock compensation | 905 | 0 |
UNICAP | 1,677 | 0 |
Goodwill and intangibles | 606 | 0 |
Basis difference in investments | 108 | 0 |
Deferred tax asset, net | 11,744 | 17,206 |
Less: Valuation allowance | (128) | 0 |
Deferred tax asset, net | 11,616 | 17,206 |
Deferred Tax Liabilities, Gross [Abstract] | ||
Right-of-use asset | (3,321) | (1,635) |
Basis difference in fixed assets and intangible assets | (1,025) | (1,457) |
Basis difference in investments | 0 | (866) |
Deferred tax liability | (4,346) | (3,958) |
Net deferred tax asset | $ 7,270 | $ 13,248 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) $ in Millions | Dec. 31, 2021USD ($) |
Federal | |
Income Tax Contingency [Line Items] | |
Operating loss carryforwards | $ 0.3 |
State | |
Income Tax Contingency [Line Items] | |
Operating loss carryforwards | $ 0.4 |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021USD ($)segment | Dec. 31, 2020USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of geographic regions | segment | 5 | |
Assets | $ 1,265,514 | $ 895,764 |
Goodwill | 24,457 | 20,705 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Assets | 241,520 | 97,750 |
Cash and Cash Equivalents | Corporate | ||
Segment Reporting Information [Line Items] | ||
Assets | 218,400 | 53,600 |
Arizona | ||
Segment Reporting Information [Line Items] | ||
Goodwill | 20,700 | $ 20,700 |
Florida | ||
Segment Reporting Information [Line Items] | ||
Goodwill | $ 3,800 |
Segment Reporting - Revenue and
Segment Reporting - Revenue and Pretax Income by Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | |||
Revenue | $ 1,023,304 | $ 734,608 | $ 630,988 |
Pretax income (loss) | 66,730 | (12,165) | 28,550 |
LS-NJ Port Imperial JV LLC and LS-Boston Point LLC | |||
Segment Reporting Information [Line Items] | |||
Revenue | 50,067 | 37,403 | 54,633 |
Equity in net (loss) income from investment in unconsolidated joint ventures | 1,262 | (16,418) | (7,901) |
Corporate | |||
Segment Reporting Information [Line Items] | |||
Pretax income (loss) | (16,939) | (11,857) | (7,317) |
Arizona | |||
Segment Reporting Information [Line Items] | |||
Revenue | 340,767 | 320,691 | 40,024 |
Arizona | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Pretax income (loss) | 25,681 | 9,325 | (3,927) |
California | |||
Segment Reporting Information [Line Items] | |||
Revenue | 557,182 | 413,917 | 590,964 |
California | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Pretax income (loss) | 61,073 | 10,131 | 53,019 |
Florida | |||
Segment Reporting Information [Line Items] | |||
Revenue | 93,632 | 0 | 0 |
Florida | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Pretax income (loss) | (492) | 0 | 0 |
Metro New York | |||
Segment Reporting Information [Line Items] | |||
Revenue | 0 | 0 | 0 |
Metro New York | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Pretax income (loss) | (2,154) | (19,764) | (13,225) |
Texas | |||
Segment Reporting Information [Line Items] | |||
Revenue | 31,723 | 0 | 0 |
Texas | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Pretax income (loss) | $ (439) | $ 0 | $ 0 |
Segment Reporting - Assets by S
Segment Reporting - Assets by Segment (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Segment Reporting Information [Line Items] | ||
Total assets | $ 1,265,514 | $ 895,764 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Total assets | 241,520 | 97,750 |
Arizona | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total assets | 360,598 | 268,141 |
California | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total assets | 400,292 | 409,705 |
Florida | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total assets | 102,158 | 0 |
Metro New York | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total assets | 124,962 | 120,168 |
Texas | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total assets | $ 35,984 | $ 0 |
Fair Value (Details)
Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Carrying Value Disclosure | Construction Loans | ||
Liabilities: | ||
Long-term debt | $ 82,617 | $ 67,757 |
Carrying Value Disclosure | Line of Credit | ||
Liabilities: | ||
Long-term debt | 390,300 | 199,358 |
Carrying Value Disclosure | Loans Payable | ||
Liabilities: | ||
Long-term debt | 0 | 5,144 |
Carrying Value Disclosure | Warrant liability | ||
Liabilities: | ||
Long-term debt | 9,185 | 0 |
Fair Value Disclosure | Fair Value, Inputs, Level 2 | Construction Loans | ||
Liabilities: | ||
Long-term debt | 82,617 | 67,757 |
Fair Value Disclosure | Fair Value, Inputs, Level 2 | Line of Credit | ||
Liabilities: | ||
Long-term debt | 390,300 | 199,358 |
Fair Value Disclosure | Fair Value, Inputs, Level 2 | Loans Payable | ||
Liabilities: | ||
Long-term debt | 0 | 5,144 |
Fair Value Disclosure | Fair Value, Inputs, Level 2 | Warrant liability | ||
Liabilities: | ||
Long-term debt | $ 9,185 | $ 0 |
Fair Value - Narrative (Details
Fair Value - Narrative (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($)realEstate_Community | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impairment of real estate inventories | $ 0 | $ 3,400 |
Real estate inventories | 844,792 | 687,819 |
Fair Value, Inputs, Level 3 | Fair Value, Recurring | California | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impairment of real estate inventories | $ 0 | 3,400 |
Real estate inventories | $ 33,000 | |
Number of communities | realEstate_Community | 2 | |
Estimated fair value of the communities | $ 29,600 | |
Measurement Input, Price Volatility | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrants, measurement input | 0.455 |
Fair Value - Schedule of Warran
Fair Value - Schedule of Warrant Liability (Details) - Fair Value, Recurring - Fair Value, Inputs, Level 3 - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Beginning balance | $ 0 | |
Changes in fair value | $ (2,090) | 0 |
Ending balance | $ 9,185 | $ 0 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Phantom Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Cash paid for phantom stock awards | $ 2.9 | ||
Grants in period (in shares) | 200,000 | ||
Grant date value at the time of the merger | $ 1.9 | ||
Phantom Awards | General and Administrative Expense | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Accelerated vesting cost | $ 2.7 | ||
Restricted Stock Units and Performance Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Grants in period (in shares) | 886,000 | 0 | 0 |
Granted (in dollars per share) | $ 9.45 | $ 0 | $ 0 |
Restricted Stock Units (RSUs) | Landsea Homes Corporation 2020 Stock Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized (in shares) | 6,000,000 | ||
Number of shares available for future issuance (in shares) | 5,100,000 | ||
Restricted Stock Units (RSUs) | Landsea Homes Corporation 2020 Stock Incentive Plan | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance range of target goals | 50.00% | ||
Restricted Stock Units (RSUs) | Landsea Homes Corporation 2020 Stock Incentive Plan | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance range of target goals | 200.00% | ||
Restricted Stock Units (RSUs) | General and Administrative Expense | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 5.8 | $ 0 | $ 0 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Compensation Expense (Details) - Restricted Stock Units and Performance Stock Units - $ / shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Awards | |||
Outstanding, beginning of the year (in shares) | 0 | 0 | 0 |
Grants in period (in shares) | 886,000 | 0 | 0 |
Vested (in shares) | (118,000) | 0 | 0 |
Forfeited (in shares) | 0 | 0 | 0 |
Outstanding, End of the year (in shares) | 768,000 | 0 | 0 |
Weighted Average Grant Date Fair Value | |||
Weighted Average Grand Date Fair Value Outstanding, beginning of the year (in dollars per share) | $ 0 | $ 0 | $ 0 |
Granted (in dollars per share) | 9.45 | 0 | 0 |
Vested (in dollars per share) | 9.55 | 0 | 0 |
Forfeited (in dollars per share) | 0 | 0 | 0 |
Weighted Average Grand Date Fair Value Outstanding, End of the year (in dollars per share) | $ 9.43 | $ 0 | $ 0 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Unvested Outstanding RSUs and PSUs (Details) - Restricted Stock Units and Performance Stock Units $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unvested units (in shares) | shares | 768,000 |
Remaining cost on unvested units | $ | $ 5,102 |
Remaining vesting period (in years) | 3 years 2 months 15 days |
Stockholders' Equity (Details)
Stockholders' Equity (Details) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2021USD ($)segment$ / sharesshares | Dec. 31, 2020shares | |
Class of Stock [Line Items] | ||
Common stock, shares authorized (in shares) | 500,000,000 | |
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | |
Preferred stock, authorized shares (in shares) | 50,000,000 | 50,000,000 |
Common stock, shares issued (in shares) | 46,281,091 | 32,557,303 |
Common stock, shares outstanding (in shares) | 46,281,091 | 32,557,303 |
Preferred stock, shares outstanding (in shares) | 0 | |
Warrants outstanding (in shares) | 21,025,000 | |
Warrants outstanding, term (in years) | 5 years | |
Public Warrants | ||
Class of Stock [Line Items] | ||
Warrants outstanding (in shares) | 15,525,000 | |
Exercise price of warrants (in dollars per share) | $ / shares | $ 1.15 | |
Amendment distribution price per per warrant (in dollars per share) | $ / shares | $ 1.85 | |
Total amount paid by company | $ | $ 28.7 | |
Warrants outstanding, term (in years) | 5 years | |
Minimum conversion price, per warrant (in dollars per share) | $ / shares | $ 0.01 | |
Written notice, period | 30 days | |
Stock price trigger (in dollars per share) | $ / shares | $ 18 | |
Threshold trading days | segment | 20 | |
Threshold consecutive trading days | segment | 30 | |
Private Placement Warrants | ||
Class of Stock [Line Items] | ||
Warrants outstanding (in shares) | 5,500,000 | |
Exercise price of warrants (in dollars per share) | $ / shares | $ 11.50 | |
Number of shares per warrant (in shares) | 1 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Numerator | |||
Net income (loss) attributable to Landsea Homes Corporation | $ 52,786 | $ (8,951) | $ 17,200 |
Less: undistributed earnings allocated to participating shares | (1,161) | 0 | 0 |
Net income (loss) attributable to common stockholders | $ 51,625 | $ (8,951) | $ 17,200 |
Denominator | |||
Weighted average common shares outstanding - basic (in shares) | 46,193,166 | 32,557,303 | 32,557,303 |
Adjustment for weighted average participating shares outstanding (in shares) | (994,444) | 0 | 0 |
Basic (in shares) | 45,198,722 | 32,557,303 | 32,557,303 |
Dilutive effect of warrants (in shares) | 0 | 0 | 0 |
Dilutive effect of share-based awards (in shares) | 51,996 | 0 | 0 |
Diluted (in shares) | 45,250,718 | 32,557,303 | 32,557,303 |
Earnings per share | |||
Basic (in dollars per share) | $ 1.14 | $ (0.27) | $ 0.53 |
Diluted (in dollars per share) | $ 1.14 | $ (0.27) | $ 0.53 |
Antidilutive securities excluded from computation of earnings per share, amount | 7,100,000 |
Supplemental Disclosures of C_3
Supplemental Disclosures of Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Supplemental disclosures of cash flow information | ||||
Interest paid, net of amounts capitalized | $ 32 | $ 15 | $ 0 | |
Income taxes paid | 7,575 | 7,309 | 14,152 | |
Supplemental disclosures of non-cash investing and financing activities | ||||
Transfer of deferred tax asset to Landsea Holdings | 11,785 | 0 | 0 | |
Conversion of deferred offering costs to additional paid-in-capital | 9,229 | 0 | 0 | |
Amortization of deferred financing costs capitalized to real estate inventories | 4,173 | 3,753 | 3,524 | |
Right-of-use assets obtained in exchange for operating lease liabilities for new or modified operating leases | 6,688 | 1,053 | 3,208 | |
Distribution of real estate joint venture to Landsea Holdings, net of cash provided | 0 | 27,294 | 0 | |
Business acquisition holdback | 0 | 2,000 | 0 | |
Amortization of prepaid interest | 0 | 0 | 2,994 | |
Cash, cash equivalents, and restricted cash reconciliation | ||||
Cash and cash equivalents | 342,810 | 105,778 | 154,043 | |
Restricted cash | 443 | 4,270 | 2,335 | |
Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows | $ 343,253 | $ 110,048 | $ 156,378 | $ 119,589 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] - Hanover Family Builders, LLC $ in Millions | Jan. 18, 2022USD ($)realEstate_Communitylot |
Subsequent Event [Line Items] | |
Percentage interests acquired | 100.00% |
Cash consideration | $ 179.2 |
Liabilities incurred | $ 69.3 |
Number of active communities acquired | realEstate_Community | 20 |
Number of lots acquired | lot | 3,800 |
Uncategorized Items - lhi-20211
Label | Element | Value |
LS-NJ Port Imperial JV LLC [Member] | ||
Equity Method Investment, Ownership Percentage | us-gaap_EquityMethodInvestmentOwnershipPercentage | 51.00% |
Equity Method Investment, Ownership Percentage | us-gaap_EquityMethodInvestmentOwnershipPercentage | 51.00% |
Equity Method Investment, Other than Temporary Impairment | us-gaap_EquityMethodInvestmentOtherThanTemporaryImpairment | $ 3,000,000 |
Equity Method Investment, Other than Temporary Impairment | us-gaap_EquityMethodInvestmentOtherThanTemporaryImpairment | 13,800,000 |
Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member] | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value | us-gaap_FairValueMeasurementWithUnobservableInputsReconciliationsRecurringBasisLiabilityValue | $ 11,275,000 |