News Column

LGI HOMES, INC. - 10-Q - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

May 15, 2014

For purposes of this Management's Discussion and Analysis of Financial Condition and Results of Operation, references to "we," "our," "us" or similar terms when used in a historical context refer to LGI Homes, Inc. and its subsidiaries. See Note 1 "Organization and Business-Initial Public Offering and Reorganization Transactions" and "Note 2 Acquisition of LGI/GTIS Joint Venture Partners' Interests" to our unaudited consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information regarding the reorganization transactions, the initial public offering and our acquisitions of our joint venture partners' interests in the LGI/GTIS Joint Ventures (the "GTIS Acquisitions"). Business Overview We are one of the nation's fastest growing residential homebuilders in terms of percentage increase of home closings. We are engaged in the design and construction of homes in Texas, Arizona, Florida, Georgia and New Mexico. Our management team has been in the residential land development business since the mid-1990s. In 2003, we commenced homebuilding operations targeting the entry-level market. Since commencing operations in 2003, we have constructed and closed over 6,600 homes and during the three months ended March 31, 2014, we had 485 home closings, compared to 253 home closings, including in the LGI/GTIS Joint Ventures, during the three months ended March 31, 2013. On November 13, 2013, we completed an initial public offering (the "IPO") of 10,350,000 shares of our common stock. For accounting purposes, the assets, liabilities and results of operations prior to the completion of the IPO relate to LGI Homes Group, LLC, LGI Homes Corporate, LLC, LGI Homes II, LLC (formerly LGI Homes, Ltd.), LGI Homes-Sunrise Meadow, LLC (formerly LGI Homes - Sunrise Meadow, Ltd.), LGI Homes-Canyon Crossing (LGI Homes - Canyon Crossing, Ltd.), LLC, LGI Homes-Deer Creek, LLC and their direct and indirect subsidiaries (collectively, our "Predecessor"). Prior to the completion of the IPO, our Predecessor owned a 15% equity interest in and managed the day-to-day operations of the LGI/GTIS Joint Ventures. Concurrent with the IPO, we acquired all of the equity interests in the LGI/GTIS Joint Ventures that we did not own immediately prior to the IPO. In our historical financial statements, our Predecessor's interest in the LGI/GTIS Joint Ventures have been accounted for using the equity method and our Predecessor's share of the LGI/GTIS Joint Ventures' net earnings are included in income from unconsolidated joint ventures. Effective November 13, 2013, we own all of the equity interests in the LGI/GTIS Joint Ventures and we began to account for them on a consolidated basis. For discussion of pro forma financial information for the three months ended March 31, 2013, please see "-Supplemental Management's Discussion and Analysis-Pro Forma Financial Information." Recent Developments On April 28, 2014, the Company entered into a credit agreement with Texas Capital Bank, N.A. and a syndication of lenders (the "Syndicated Credit Agreement") to provide a $135.0 million senior secured revolving credit facility, which can be increased by request of the Company, to $200.0 million, subject to the terms and provisions of the Syndicated Credit Agreement. The new credit facility matures on April 28, 2017. Borrowings under the new credit facility are limited to the borrowing base, which is determined based on the loan value of the pool of collateral in which the lenders have a security interest. Please see "-Liquidity and Capital Resources-Secured Revolving Credit Facility" for a description of the Syndicated Credit Agreement. 20



--------------------------------------------------------------------------------

Table of Contents

In connection with the entry into the Syndicated Credit Agreement, the Company and certain of its subsidiaries terminated that certain Second Amended and Restated Loan Agreement with Texas Capital Bank, National Association, which was entered into in January 2014. Key Results Key financial results as of and for the three months ended March 31, 2014, as compared to the three months ended March 31, 2013, were as follows: Homes closed increased 221.2% to 485 homes from 151 homes with an



increase in the average sales price of our homes of 10.0% to $156,535.

On a pro forma basis, homes closed increased 91.7% to 485 homes from

253 homes with an increase in the average sales price of our homes of

10.8%. Home sales revenues increased 253.5% to $75.9 million from $21.5 million. On a pro forma basis, home sales revenues increased 112.4% from $35.7 million.



Gross margin as a percentage of home sales revenues decreased to 25.7%

from 26.4%. On a pro forma basis, gross margin as a percentage of home sales revenues decreased to 25.7% from 26.6%.



Adjusted gross margin as a percentage of home sales revenues increased

to 27.5% from 26.9%. On a pro forma basis, adjusted gross margin as a percentage of home sales revenues increased to 27.5% from 26.9%. Net income before income taxes increased 183.0% to $7.1 million from $2.5 million. On a pro forma basis, net income before income taxes increased 99.9% to $7.1 million from $3.5 million.



Adjusted EBITDA margin as a percentage of home sales revenues decreased

to 11.3% from 12.1%. On a pro forma basis, adjusted EBITDA margin as a percentage of home sales revenues increased to 11.3% from 10.3%.



Active communities as of March 31, 2014 increased to 28 from 17, on a

pro forma basis. Our expansion with our Florida and Southeast divisions

is reflected in this increase.

Total owned and controlled lots increased 14.3% to 17,028 lots at March 31, 2014 from 14,895 lots at December 31, 2013.

Outlook

We believe there continues to be a significant opportunity to grow our share of sales in our existing markets. Given our familiarity with each of our existing markets and the favorable demographic and economic trends that are forecasted in our markets, we expect to continue to see growth in these markets.



We also believe that we will grow our business by increasing the number of price points in our existing markets. We are seeing opportunities to develop properties with multiple price points and product lines in the same communities.

We intend to expand into new markets where we identify opportunities to build homes and develop communities that meet our profit and return objectives. We recently entered the Denver, Colorado market and we have signed an acquisition agreement related to property in the Charlotte, North Carolina market. In addition, we will continue to analyze other potential markets as we continue our efforts to expand into new geographical markets. 21



--------------------------------------------------------------------------------

Table of Contents

Results of Operations

The following table sets forth our results of operations for the periods indicated: Three Months Ended March 31, 2014 2013 (dollars in thousands, except per share data and average home sales price) Statement of Income Data: Revenues: Home sales $ 75,919$ 21,479 Management and warranty fees - 481 Total revenues $ 75,919$ 21,960 Expenses: Cost of sales 56,389 15,817 Selling expenses 7,362 2,248 General and administrative 5,105 1,759 Income from unconsolidated joint ventures - (292 ) Operating income $ 7,063$ 2,428 Interest expense, net - (4 ) Other income, net 4 73 Net income before income taxes $ 7,067$ 2,497 Income tax provision (2,473 ) (47 ) Net income $ 4,594$ 2,450 (Income) loss attributable to non-controlling interests - - Net income attributable to owners $ 4,594$ 2,450 Basic earnings per share $ 0.22 Diluted earnings per share $ 0.22 Other Financial and Operating Data: Active communities at end of period 28 10 Home closings 485 151



Average sales price of homes closed (in whole dollars) $ 156,535

$ 142,243 Gross margin (1) $ 19,530$ 5,662 Gross margin % (2) 25.7 % 26.4 % Adjusted gross margin (3) $ 20,898$ 5,773 Adjusted gross margin % (2)(3) 27.5 % 26.9 % Adjusted EBITDA (4) $ 8,575$ 2,603 Adjusted EBITDA margin % (2)(4) 11.3 % 12.1 %



(1) Gross margin is home sales revenues less cost of sales.

(2) Calculated as a percentage of home sales revenues.

(3) Adjusted gross margin is a non-GAAP financial measure used by management as

a supplemental measure in evaluating operating performance. We define

adjusted gross margin as gross margin less capitalized interest and

adjustments resulting from the application of purchase accounting in

connection with the GTIS Acquisitions included in the cost of sales. Our

management believes this information is useful because it isolates the

impact that capitalized interest and purchase accounting adjustments have

on gross margin. However, because adjusted gross margin information

excludes capitalized interest and purchase accounting adjustment, which

have real economic effects and could impact our results, the utility of

adjusted gross margin information as a measure of our operating performance

may be limited. In addition, other companies may not calculate adjusted

gross margin information in the same manner that we do. Accordingly,

adjusted gross margin information should be considered only as a supplement

to gross margin information as a measure of our performance. Please see

"-Non-GAAP Measures-Adjusted Gross Margin" for a reconciliation of adjusted

gross margin to gross margin, which is the GAAP financial measure that our

management believes to be most directly comparable. 22



--------------------------------------------------------------------------------

Table of Contents

(4) Adjusted EBITDA is a non-GAAP financial measure used by management as a supplemental measure in evaluating operating performance. We define



adjusted EBITDA as net income before (i) interest expense, (ii) income

taxes, (iii) depreciation and amortization, (iv) capitalized interest

charged to the cost of sales, (v) other income, net and (vi) adjustments

resulting from the application of purchase accounting in connection with the GTIS Acquisitions. Our management believes that the presentation of adjusted EBITDA provides useful information to investors regarding our



results of operations because it assists both investors and management in

analyzing and benchmarking the performance and value of our business.

Adjusted EBITDA provides an indicator of general economic performance that

is not affected by fluctuations in interest rates or effective tax rates,

levels of depreciation or amortization and items considered to be

non-recurring. Accordingly, our management believes that this measurement

is useful for comparing general operating performance from period to period. Other companies may define adjusted EBITDA differently and, as a result, our measure of adjusted EBITDA may not be directly comparable to adjusted EBITDA of other companies. Although we use adjusted EBITDA as a financial measure to assess the performance of our business, the use of adjusted EBITDA is limited because it does not include certain costs, such



as interest and taxes, necessary to operate our business. Adjusted EBITDA

should be considered in addition to, and not as a substitute for, net

income in accordance with GAAP as a measure of performance. Our

presentation of adjusted EBITDA should not be construed as an indication

that our future results will be unaffected by unusual or nonrecurring

items. Our adjusted EBITDA is limited as an analytical tool, and you should

not consider it in isolation or as a substitute for analysis of our results

as reported under GAAP. Please see "-Non-GAAP Measures-Adjusted EBITDA" for

a reconciliation of adjusted EBITDA to net income, which is the GAAP financial measure that our management believes to be most directly comparable. Three Months Ended March 31, 2014 Compared to Three Months Ended March 31, 2013 Homes Sales. Our home sales revenues and closings by division for the three months ended March 31, 2014 and 2013 were as follows (dollars in thousands): Three Months Ended March 31, 2014 2013 Revenues Closings Revenues Closings Texas $ 53,730 345 $ 18,593 132 Southwest 9,633 60 2,886 19 Florida 7,589 47 - - Southeast 4,967 33 - - Total home sales $ 75,919 485 $ 21,479 151 Home sales revenues for the three months ended March 31, 2014 were $75.9 million, an increase of $54.4 million, or 253.5%, from $21.5 million for the three months ended March 31, 2013. The increase in home sales revenues is primarily due to a 221.2% increase in homes closed and an increase in the average selling price per home during the three months ended March 31, 2014 as compared to the three months ended March 31, 2013. The average selling price per home closed during the three months ended March 31, 2014 was $156,535, an increase of $14,292, or 10.0%, from the average selling price per home of $142,243 for the three months ended March 31, 2013. Management and Warranty Fees. Management and warranty fees were $0.5 million for the three months ended March 31, 2013. Management and warranty fees were received from the LGI/GTIS Joint Ventures through November 2013 when the joint ventures were acquired. Total home closings on a combined basis for the LGI/GTIS Joint Ventures were 102 for the three months ended March 31, 2013. There were no management and warranty fees for the three months ended March 31, 2014 as the LGI/GTIS Joint Ventures have been consolidated since the GTIS Acquisitions. Cost of Sales and Gross Margin (home sales revenues less cost of sales). Cost of sales increased for the three months ended March 31, 2014 to $56.4 million, an increase of $40.6 million, or 256.5%, from $15.8 million for the three months ended March 31, 2013. This increase is primarily due to a 221.2% increase in homes closed during the first quarter of 2014 as compared to the first quarter of 2013. In addition, costs of sales for the three months ended March 31, 2014, include $1.1 million related to the fair value step-up adjustment for real estate inventory acquired from the LGI/GTIS Joint Ventures and sold in the first three months ended March 31, 2014. Gross margin for the three months ended March 31, 2014 was $19.5 million, an increase of $13.9 million, or 244.9%, from $5.7 million for the three months ended March 31, 2013. Gross margin as a percentage of home sales revenues was 25.7% for the three months ended March 31, 2014 and 26.4% for the three months ended March 31, 2013. The decrease in gross margin as a percentage of home sales revenues reflects the impacts of the step-up adjustment plus increased construction costs and higher developed lot costs for the first quarter of 2014 as compared to the first quarter of 2013; these construction and developed lot costs were partially offset by higher average homes sales prices. 23



--------------------------------------------------------------------------------

Table of Contents

Selling Expenses. Selling expenses as a percentage of home sales revenues were 9.7% and 10.5% for the three months ended March 31, 2014 and 2013, respectively. The decrease of selling expenses as a percentage of home sales revenues was primarily due to increased internet marketing and lower costs incurred for direct mail. Selling expenses for the three months ended March 31, 2014 were $7.4 million, an increase of $5.1 million, or 227.5%, from $2.2 million for the three months ended March 31, 2013. Sales commissions increased to $2.7 million from $0.8 million and advertising and direct mail costs increased to $1.7 million from $0.5 million for the three months ended March 31, 2014 as compared to the three months ended March 31, 2013, respectively. These increases are primarily due to a 221.2% increase in homes closed during the first quarter of 2014 as compared to the first quarter of 2013 and the increase in the number of active communities for the first quarter of 2014 as compared to the first quarter of 2013. General and Administrative. General and administrative expenses as a percentage of home sales revenues were 6.7% and 8.2% for the three months ended March 31, 2014 and 2013, respectively. General and administrative expenses for the three months ended March 31, 2014 were $5.1 million, an increase of $3.3 million, or 190.3%, from $1.8 million for the three months ended March 31, 2013. The increase in general and administrative expenses is partially due to the higher number of home closings and active communities in the first quarter of 2014 as compared to the first quarter of 2013. As a result of the increased number of active communities, we hired more employees and acquired additional office space. In addition, approximately $1.2 million of the $3.3 million increase during the first quarter of 2014 was attributable to accounting and professional fees and expenses incurred. Income from unconsolidated joint ventures. Our share of income from the LGI/GTIS Joint Ventures for the three months ended March 31, 2013 was $0.3 million. We acquired our joint venture partners' interests in the LGI/GTIS Joint Ventures on November 13, 2013. Operating Income and Net Income. Operating income for the three months ended March 31, 2014 was $7.1 million, an increase of $4.6 million, or 190.8%, from $2.4 million for the three months ended March 31, 2013. Net income for the three months ended March 31, 2014 was $4.6 million, an increase of $2.1 million, or 87.5%, from $2.5 million for the three months ended March 31, 2013. The increases are primarily attributed to a 221.2% increase in homes closed during the first quarter of 2014 as compared to the first quarter of 2013, net of the impacts of the step-up adjustment and increased expenses associated with new communities and additional professional service fees and expenses.



Supplemental Management's Discussion and Analysis

Pro Forma Financial Information

The following pro forma statement of operations has been developed by applying pro forma adjustments to our statements of operations for the three months ended March 31, 2013 included elsewhere in this Quarterly Report and the combined financial statements of the LGI/GTIS Joint Ventures. The pro forma statement of operations for the three months ended March 31, 2013 gives effect to the GTIS Acquisitions as if they had occurred on January 1, 2012. The pro forma adjustments are based upon available information and certain assumptions that we believe are reasonable under the circumstances. The pro forma financial data is presented for informational purposes only. The pro forma financial data does not purport to represent what our results of operations would have been had the GTIS Acquisitions actually occurred on the date indicated and does not purport to project our results of operations for any future period. The pro forma financial statements should be read in conjunction with the information contained in other sections of this Quarterly Report including our historical financial statements and related notes thereto, and other sections of this "Management's Discussion and Analysis of Financial Condition and Results of Operations" appearing elsewhere in this Quarterly Report. All pro forma adjustments and their underlying assumptions are described more fully in the notes to our pro forma statements of operations. The pro forma financial information has been prepared to give effect to the GTIS Acquisitions in accordance with ASC Topic 805, "Business Combinations." A fair value step-up adjustment of approximately $7.4 million was recorded to the real estate inventory in connection with the GTIS Acquisitions. The pro forma adjustments do not reflect cost of sales related to the step-up adjustment since the step-up does not have a continuing impact on the Company's results of operations due to the short-term impact on our financial performance. 24



--------------------------------------------------------------------------------

Table of Contents Unaudited Pro Forma Statement of Operations for the Three Months Ended March 31, 2013 LGI/GTIS Joint LGI Homes, Inc. Pro LGI Homes, Inc. Ventures (1) Adjustments Forma (In thousands) Revenues: Home sales $ 21,479$ 14,257 $ - $ 35,736 Management and warranty fees 481 - (481 ) (c) - Total revenues 21,960 14,257 (481 ) 35,736 Cost of sales 15,817 10,449 (44 ) (c) 26,222 Selling expenses 2,248 1,621 - 3,869 General and administrative 1,759 839 (394 ) (b)(c) 2,204 Income from unconsolidated LGI/GTIS Joint Ventures (292 ) - 292 (a) - Operating income 2,428 1,348 (335 ) 3,441 Interest expense (4 ) - - (4 ) Other income, net 73 25 - 98 Net income before income taxes 2,497 1,373 (335 ) 3,535 Income tax provision (47 ) (27 ) - (74 ) Net income 2,450 1,346 (335 ) 3,461 Income attributable to non-controlling interests - - - - Net income attributable to owners $ 2,450 $ 1,346$ (335 )$ 3,461



(1) This column is a combination of the unaudited financial statements of

LGI-GTIS Holdings, LLC, LGI-GTIS Holdings II, LLC, LGI-GTIS Holdings III, LLC

and LGI-GTIS Holdings IV, LLC, for the three months ended March 31, 2013.

Notes to Unaudited Pro Forma Statement of Operations for the Three Months Ended March 31, 2013

(a) Eliminates our Predecessor's equity in the income of the LGI/GTIS Joint Ventures.

(b) Reflects amortization of the $0.7 million marketing related intangible asset (i.e., trade name rights) recorded in the GTIS Acquisitions. The trade name rights have an estimated useful life of three years based upon the timing of the majority of the forecasted revenues to be earned over the remaining development cycle of the LGI/GTIS Joint Ventures' communities. Amortization is recorded on a straight-line basis. Pro forma amortization expense was $0.1 million for the three months ended March 31, 2013. (c) Reflects the elimination of $0.5 million of management and warranty fees our Predecessor charged to the LGI/GTIS Joint Ventures during the period pursuant to certain management services agreements. The applicable management services agreements were terminated in connection with the GTIS Acquisitions. The corresponding charges of $0.4 million and $0.04 million were recorded to general and administrative expense and cost of sales, respectively, by the LGI/GTIS Joint Ventures. 25



--------------------------------------------------------------------------------

Table of Contents

Three Months Ended March 31, 2014 Compared to Pro Forma Three Months Ended March 31, 2013 Pro forma Homes Sales. Our home sales revenues and closings by division for the three months ended March 31, 2014 and pro forma home sales revenues and closings by division for the three months ended March 31, 2013 were as follows (dollars in thousands, unless otherwise stated): Three Months Ended March Pro Forma Three Months 31, Ended March 31, 2014 2013 Revenues Closings Revenues Closings Texas $ 53,730 345 $ 31,891 227 Southwest 9,633 60 3,845 26 Florida 7,589 47 - - Southeast 4,967 33 - - Total home sales $ 75,919 485 $ 35,736 253 Other Financial and Operating Data: 2014



2013

Active communities at end of year 28



17

Average sales price of homes closed (in whole dollars) $ 156,535$ 141,247 Gross margin (1) $ 19,530$ 9,514 Gross margin % (2) 25.7 % 26.6 %



(1) Gross margin is home sales revenues less cost of sales.

(2) Calculated as a percentage of home sales revenues.

Home sales revenues for the three months ended March 31, 2014 were $75.9 million, an increase of $40.2 million, or 112.4%, from pro forma home sales revenues of $35.7 million for the three months ended March 31, 2013. The increase in home sales revenues is primarily due to a 91.7% increase in homes closed and an increase in the average home sales price per home during the first quarter of 2014 as compared to the first quarter of 2013. The average home sales price for the first quarter of 2014 was $156,535, an increase of $15,288, or 10.8%, from the pro forma average home sales price of $141,247 for the first quarter of 2013. Pro forma Cost of Sales and Gross Margin (pro forma home sales revenues less pro forma cost of sales). Cost of sales for the three months ended March 31, 2014 was $56.4 million, an increase of $30.2 million, or 115.0%, from pro forma cost of sales of $26.2 million for the three months ended March 31, 2013. This increase is primarily due to a 232-unit, or 91.7%, increase in homes closed for the three months ended March 31, 2014 as compared to the three months ended March 31, 2013. In addition, cost of sales for the three months ended March 31, 2014 includes $1.1 million related to the fair value step-up adjustment for real estate inventory acquired from the LGI/GTIS Joint Ventures and sold in the first quarter of 2014. Gross margin for the first quarter of 2014 was $19.5 million, an increase of $10.0 million, or 105.3%, from pro forma gross margin of $9.5 million for the first quarter of 2013. Gross margin as a percentage of sales was 25.7% for the first quarter of 2014 as compared to 26.6% for the first quarter of 2013. The decrease in gross margin as a percentage of sales reflects the higher average home sales prices partially offset by the impacts of the step-up adjustment plus increased construction costs and higher developed lot costs for the first quarter of 2014 as compared to the first quarter of 2013. Pro forma Selling Expenses. Selling expenses as a percentage of home sales revenues were 9.7% and selling expenses as a percentage of home sales revenues were 10.8% for the three months ended March 31, 2014 and 2013, respectively. The decrease in selling expenses as a percentage of home sales revenues was primarily due to increased internet marketing and lower costs incurred for direct mail. Selling expenses for the first quarter of 2014 were $7.4 million, an increase of $3.5 million, or 90.3%, from pro forma selling expenses of $3.9 million for the first quarter of 2013. This increase is largely due to the higher number of home closings and the growth in active communities for the three months ended March 31, 2014 as compared to the three months ended March 31, 2013 on a pro forma basis. Sales commissions increased to $2.7 million from $1.3 million and advertising and direct mail costs increased to $1.7 million for the three months ended March 31, 2014 from $1.0 million for the three months ended March 31, 2013, on a pro forma basis. 26



--------------------------------------------------------------------------------

Table of Contents

Pro forma General and Administrative. General and administrative expenses as a percentage of home sales revenues were 6.7% and pro forma general and administrative expenses as a percentage of home sales revenues were 6.2% for the three months ended March 31, 2014 and 2013, respectively. General and administrative expenses for the first quarter of 2014 were $5.1 million, an increase of $2.9 million, or 131.7%, from pro forma general and administrative expenses of $2.2 million for the first quarter of 2013. The increase in pro forma general and administrative expenses is partially due to the higher number of home closings and active communities for the first quarter of 2014 as compared to the first quarter of 2013 on a pro forma basis. As a result of the increased number of active communities, we hired more employees and acquired additional office space. In addition, approximately $1.1 million of the $2.9 million increase during the first quarter of 2014 was attributable to accounting and professional fees and expenses. Pro forma Operating Income and Pro forma Net Income. Operating income for the three months ended March 31, 2014 was $7.1 million, an increase of $3.6 million, or 105.2%, from pro forma operating income of $3.4 million for the three months ended March 31, 2013. Net income for the three months ended March 31, 2014 was $4.6 million, an increase of $1.1 million, or 32.7%, from pro forma net income of $3.5 million for the three months ended March 31, 2013. The increase is primarily attributed to a 232-unit increase in homes closed during the first quarter of 2014 as compared to the first quarter of 2013, on a pro forma basis, net of the impacts of the step-up adjustment and increased expenses associated with new communities and additional professional service fees and expenses.



Non-GAAP Measures

In addition to the results reported in accordance with U.S. GAAP, we have provided information in this Quarterly Report on Form 10-Q relating to "Adjusted Gross Margin," and "Adjusted EBITDA."

Adjusted Gross Margin

Adjusted gross margin is a non-GAAP financial measure used by management as a supplemental measure in evaluating operating performance. We define adjusted gross margin as gross margin less capitalized interest and adjustments resulting from the application of purchase accounting included in the cost of sales. Our management believes this information is useful because it isolates the impact that capitalized interest and purchase accounting adjustments have on gross margin. However, because adjusted gross margin information excludes capitalized interest and purchase accounting adjustment, which have real economic effects and could impact our results, the utility of adjusted gross margin information as a measure of our operating performance may be limited. In addition, other companies may not calculate adjusted gross margin information in the same manner that we do. Accordingly, adjusted gross margin information should be considered only as a supplement to gross margin information as a measure of our performance.



The following table reconciles adjusted gross margin to gross margin, which is the GAAP financial measure that our management believes to be most directly comparable (dollars in thousands):

Pro Forma Three Months Ended Three Months Ended March 31, March 31, 2014 2013 2013 Home sales revenues $ 75,919$ 21,479$ 35,736 Cost of sales 56,389 15,817 26,222 Gross margin 19,530 5,662 9,514 Purchase accounting adjustment (a) 1,091 - - Capitalized interest charged to cost of sales 277 111 111 Adjusted gross margin $ 20,898$ 5,773$ 9,625 Gross margin % (b) 25.7 % 26.4 % 26.6 % Adjusted gross margin % (b) 27.5 % 26.9 % 26.9 %



(a) This adjustment results from the application of purchase accounting in

connection with the GTIS Acquisitions and represents the amount of the fair

value step-up adjustment to real estate inventory sold during the three

months ended March 31, 2014.

(b) Calculated as a percentage of home sales revenues.

27



--------------------------------------------------------------------------------

Table of Contents

Adjusted EBITDA

Adjusted EBITDA is a non-GAAP financial measure used by management as a supplemental measure in evaluating operating performance. We define adjusted EBITDA as net income before (i) interest expense, (ii) income taxes, (iii) depreciation and amortization, (iv) capitalized interest charged to the cost of sales, (v) other income, net and (vi) adjustments resulting from the application of purchase accounting in connection with the GTIS Acquisitions. Our management believes that the presentation of adjusted EBITDA provides useful information to investors regarding our results of operations because it assists both investors and management in analyzing and benchmarking the performance and value of our business. Adjusted EBITDA provides an indicator of general economic performance that is not affected by fluctuations in interest rates or effective tax rates, levels of depreciation or amortization and items considered to be non-recurring. Accordingly, our management believes that this measurement is useful for comparing general operating performance from period to period. Other companies may define adjusted EBITDA differently and, as a result, our measure of adjusted EBITDA may not be directly comparable to adjusted EBITDA of other companies. Although we use adjusted EBITDA as a financial measure to assess the performance of our business, the use of adjusted EBITDA is limited because it does not include certain material costs, such as interest and taxes, necessary to operate our business. Adjusted EBITDA should be considered in addition to, and not as a substitute for, net income in accordance with GAAP as a measure of performance. Our presentation of adjusted EBITDA should not be construed as an indication that our future results will be unaffected by unusual or nonrecurring items. Our adjusted EBITDA is limited as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:



it does not reflect every cash expenditure, future requirements for capital

expenditures or contractual commitments, including for the purchase of land;

it does not reflect the interest expense or the cash requirements necessary

to service interest or principal payments on our debt;



although depreciation and amortization are non-cash charges, the assets

being depreciated and amortized will often have to be replaced or require

improvements in the future, and adjusted EBITDA does not reflect any cash

requirements for such replacements or improvements;

it is not adjusted for all non-cash income or expense items that are

reflected in our statements of cash flows;

it does not reflect the impact of earnings or charges resulting from matters

we consider not to be indicative of our ongoing operations; and other companies in our industry may calculate it differently than we do, limiting its usefulness as a comparative measure. Because of these limitations, our adjusted EBITDA should not be considered a measure of discretionary cash available to us to invest in the growth of our business or as a measure of cash that will be available to us to meet our obligations. We compensate for these limitations by using our adjusted EBITDA along with other comparative tools, together with GAAP measurements, to assist in the evaluation of operating performance. These GAAP measurements include operating income, net income and cash flow data. We have significant uses of cash flows, including capital expenditures, interest payments and other non-recurring charges, which are not reflected in our adjusted EBITDA. Adjusted EBITDA is not intended as an alternative to net income as an indicator of our operating performance, as an alternative to any other measure of performance in conformity with GAAP or as an alternative to cash flows as a measure of liquidity. You should therefore not place undue reliance on our adjusted EBITDA calculated using this measure. Our GAAP-based measures can be found in our unaudited consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. The following table reconciles adjusted EBITDA to net income, which is the GAAP financial measure that our management believes to be most directly comparable (dollars in thousands): 28



--------------------------------------------------------------------------------

Table of Contents Pro Forma Three Months Ended Three Months Ended March 31, March 31, 2014 2013 2013 Net income $ 4,594$ 2,450 $ 3,461 Interest expense - 4 4 Income taxes 2,473 47 74 Depreciation and amortization 144 64 83 Capitalized interest charged to cost of sales 277 111 111 Purchase accounting adjustment (a) 1,091 - 62 Other income, net (4 ) (73 ) (98 ) Adjusted EBITDA $ 8,575$ 2,603 $ 3,697 Adjusted EBITDA margin % (b) 11.3 % 12.1 % 10.3 %



(a) This adjustment results from the application of purchase accounting in

connection with the GTIS Acquisitions and represents the amount of the fair

value step-up adjustment to real estate inventory sold after the GTIS

Acquisitions and amortization expense related to the marketing intangible

asset for all applicable periods presented.

(b) Calculated as a percentage of home sales revenues.

Backlog

We sell our homes under standard purchase contracts, which generally require a homebuyer to pay a deposit at the time of signing the purchase contract. The amount of the required deposit is minimal ($1,000 or less). The deposits are refundable if the homebuyer is unable to obtain mortgage financing. We permit our homebuyers to cancel the purchase contract and obtain a refund of their deposit in the event mortgage financing cannot be obtained within a certain period of time, as specified in their purchase contract. Typically our homebuyers provide documentation regarding their ability to obtain mortgage financing within 14 days after the purchase contract is signed. This allows us the opportunity to evaluate whether the homebuyer has the financial resources necessary to purchase the home. If we determine that the homebuyer is not qualified to obtain mortgage financing or is not otherwise financially able to purchase the home, we will terminate the purchase contract. If a purchase contract has not been cancelled or terminated within 14 days after the purchase contract has been signed, then the homebuyer has met the preliminary criteria to obtain mortgage financing. Only purchase contracts that are signed by homebuyers who have met the preliminary criteria to obtain mortgage financing are included in new (gross) orders. Our "backlog" consists of homes that are under a purchase contract that are signed by homebuyers who have met the preliminary criteria to obtain mortgage financing but have not yet closed. Since our business model is based on building move-in ready homes before a purchase contract is signed, the majority of our homes in backlog are complete. Ending backlog represents the number of homes in backlog from the previous period plus the number of net orders (new orders for homes less cancellations) generated during the current period minus the number of homes closed during the current period. Our backlog at any given time will be affected by cancellations and the number of our active communities. Homes in backlog are generally closed within one to two months, although we may experience cancellations of purchase contracts at any time prior to closing. It is important to note that net orders, backlog and cancellation metrics are operational, rather than accounting data, and should be used only as a general gauge to evaluate performance. Backlog may be impacted by customer cancellations for various reasons that are beyond our control, and in light of our minimal required deposit, there is little negative impact to the potential homebuyer from the cancellation of the purchase contract. As of the dates set forth below, our net orders, cancellation rate, and ending backlog homes and value were as follows (dollars in thousands): Three Months Ended March 31, Backlog Data 2014 2013 Net orders (1) 619 212 Cancellation rate (2) 29.5 % 22.9 % Ending backlog - homes (3) 324 128 Ending backlog - value (3) $ 52,646$ 19,372 29



--------------------------------------------------------------------------------

Table of Contents

(1) Net orders are new (gross) orders for the purchase of homes during the period, less cancellations of existing purchase contracts during the period.



(2) Cancellation rate for a period is the total number of purchase contracts

cancelled during the period divided by the total new (gross) orders for the

purchase of homes during the period.

(3) Ending backlog consists of homes at the end of the period that are under a

purchase contract that have met our preliminary financing criteria but have

not yet closed. Ending backlog is valued at the contract amount.

Land Acquisition Policies and Development

We increased our active communities from 25 as of December 31, 2013 to 28 as of March 31, 2014. We also increased our lot inventory from approximately 14,895 owned or controlled lots as of December 31, 2013 to 17,028 owned or controlled lots as of March 31, 2014. The table below shows (i) home closings by division for the three months ended March 31, 2014, and (ii) our owned or controlled lots by division as of March 31, 2014. Three Months Ended March 31, 2014 As of Mach 31, 2014 Division Home Closings Owned (1) Controlled Total Texas 345 6,213 6,591 12,804 Southwest 60 833 286 1,119 Florida 47 413 1,721 2,134 Southeast 33 793 178 971 Total 485 8,252 8,776 17,028 (1) Of the 8,252 owned lots as of March 31, 2014, 4,994 were raw/under development lots and 3,258 were finished lots.



Homes in Inventory

When entering a new community, we build a sufficient number of move-in ready homes to meet our budgets. We base future home starts on closings. As homes are closed, we start more homes to maintain our inventory levels. As of March 31, 2014, we had a total of 266 completed homes and 576 homes in progress in inventory.



Raw Materials

When constructing homes, we use various materials and components. We generally contract for our materials and labor at a fixed price for the anticipated construction period of our homes. This allows us to mitigate the risks associated with increases in building materials and labor costs between the time construction begins on a home and the time it is closed. Typically, the raw materials and most of the components used in our business are readily available in the United States. In addition, the majority of our raw materials is supplied to us by our subcontractors, and is included in the price of our contract with such contractors. Most of the raw materials necessary for our subcontractors are standard items carried by major suppliers. Substantially all of our construction work is done by third party subcontractors, most of whom are non-unionized. We continue to monitor the supply markets to achieve the best prices available. Typically, the price changes that most significantly influence our operations are price increases in commodities and lumber.



Seasonality

In all of our regions, we have historically experienced similar variability in our results of operations and in capital requirements from quarter to quarter due to the seasonal nature of the homebuilding industry. We generally close more homes in our second, third and fourth quarters. Thus, our revenue may fluctuate on a quarterly basis and we may have higher capital requirements in our second, third and fourth quarters in order to maintain our inventory levels. Our revenue and capital requirements are generally similar across our second, third and fourth quarters. 30



--------------------------------------------------------------------------------

Table of Contents

As a result of seasonal activity, our quarterly results of operation and financial position at the end of a particular quarter, especially the first quarter, are not necessarily representative of the results we expect at year end. We expect this seasonal pattern to continue in the long term.

Liquidity and Capital Resources

Overview

As of March 31, 2014, we had $25.7 million of cash and cash equivalents. Cash flows for each of our active communities depend on the status of the development cycle and can differ substantially from reported earnings. Early stages of development or expansion require significant cash outlays for land acquisitions, plats, vertical development, construction of sales offices, general landscaping and other amenities. Because these costs are a component of our inventory and are not recognized in our statement of operations until a home closes, we incur significant cash outflows prior to recognition of revenues. In the later stages of an active community, cash inflows may significantly exceed revenues reported for financial statement purposes, as the costs associated with home and land construction were previously incurred.



Our principal uses of capital are operating expenses, lot development, home construction, land and property purchases, interest costs on our indebtedness and the payment of various liabilities.

We rely on our ability to finance our operations by generating operating cash flows and, borrowing under our secured revolving credit facility and will consider accessing the debt and equity capital markets as part of our ongoing strategy. We also rely on our ability to obtain performance, payment and completion surety bonds as well as letters of credit to finance our projects. We are actively acquiring and developing lots in our markets to maintain and grow our lot supply and active community count. We expect to continue to expand our business, based on demand for new homes improving further or remaining at current levels, and thus we expect cash outlays for land purchases, land development, home construction and operating expenses to continue to exceed our cash generated by operations in 2014. We believe that we will be able to fund our current and foreseeable liquidity needs for at least the next twelve months with our cash on hand, cash generated from operations, and cash expected to be available from our secured revolving credit facilities, including any future modifications. Secured Revolving Credit Facility On January 30, 2014, certain subsidiaries (the "Borrowers") of the Company entered into a Second Amended and Restated Loan Agreement with Texas Capital Bank, N.A. (the "Amended Credit Agreement"). The Amended Credit Agreement provided for a $50.0 million senior secured revolving credit facility, guaranteed by the Company to purchase and develop land parcels and construct new homes. The new revolving credit facility matured on June 30, 2016. Borrowings under the Amended Credit Agreement were limited to the borrowing base, which was determined based on the loan value of the pool of collateral in which the lender has a security interest. As of March 31, 2014, the borrowing base amounts under the Amended Credit Agreement totaled $50.0 million, of which $48.8 million was outstanding and $1.2 million was available (based on collateral available to borrow).



Interest on amounts borrowed under the Amended Credit Agreement was payable monthly at a rate based on LIBOR, with an interest rate floor at March 31, 2014 of 4.0%. As of March 31, 2014, the interest rate under the Amended Credit Agreement was LIBOR plus 3.0% with a 4% interest rate floor.

The Amended Credit Agreement contained financial covenants including, a leverage ratio, liquidity ratio, and net worth ratio, as well as various other covenants that, among other restrictions, limit the amount of additional debt and related party transactions. As of March 31, 2014, we were in compliance with all financial and non-financial covenants contained in the Amended Credit Agreement. On April 28, 2014, the Company entered into the Syndicated Credit Agreement to provide a $135.0 million senior secured revolving credit facility, which can be increased by request of the Company, to $200.0 million, subject to the terms and provisions of the Syndicated Credit Agreement. The revolving credit facility matures on April 28, 2017. Borrowings under the new credit facility are limited to the borrowing base, which is determined based on the loan value of the pool of collateral in which the lenders have a security interest. The Company may add houses, vacant lots, land and acquisition and development projects to its pool of collateral through April 28, 2015. The loan value of speculative houses, pre-sold houses, model houses, 31



--------------------------------------------------------------------------------

Table of Contents

vacant lots, land and acquisition and development projects is adjusted based on formulas with respect to each of those categories of collateral; the loan value of the collateral decreases based on the amount of time such collateral is in the borrowing base. Subsequent to this date and through April 28, 2016, advances will continue to be made for assets previously included in the pool of collateral as they move into higher funding categories. Speculative homes may remain in the borrowing base for up to 18 months. Vacant lots, land and acquisition and development projects may remain in the borrowing base for up to three years. Interest on amounts borrowed is paid monthly at a rate based on LIBOR or the 3.75% interest rate floor, whichever is greater. The Syndicated Credit Agreement contains various financial covenants including EBITDA to debt service payments ratio, a debt to capitalization ratio, a leverage ratio, liquidity ratio and ratio of value of all land, lots and acquisition and development projects to net worth and a net worth ratio. In addition, the Syndicated Credit Agreement contains various covenants that, among other restrictions, limit the amount of the Company's additional debt.



In connection with the entry into the Syndicated Credit Agreement, the Company and certain of its subsidiaries terminated the Amended Credit Agreement.

Letters of Credit, Surety Bonds and Financial Guarantees

We are often required to provide letters of credit and surety bonds to secure our performance under construction contracts, development agreements and other arrangements. The amount of such obligations outstanding at any time varies in accordance with our pending development activities. In the event any such bonds or letters of credit are drawn upon, we would be obligated to reimburse the issuer of such bonds or letters of credit. Under these letters of credit, surety bonds and financial guarantees, we are committed to perform certain development and construction activities and provide certain guarantees in the normal course of business. Outstanding letters of credit, surety bonds and financial guarantees under these arrangements, totaled $0.6 million as of March 31, 2014. Although significant development and construction activities have been completed related to these site improvements, the letters of credit and surety bonds are not generally released until all development and construction activities are completed. We do not believe that it is probable that any outstanding letters of credit or surety bonds, letters of credit or financial guarantees as of March 31, 2014 will be drawn upon.



Cash Flows

Three Months Ended March 31, 2014 compared to Three Months Ended March 31, 2013

Net cash used in operating activities during the three months ended March 31, 2014 was $41.4 million as compared to $5.0 million during the three months ended March 31, 2013. The $36.4 million increase in net cash used in operating activities was primarily attributable to a $29.0 million net increase in real estate inventory for the three months ended March 31, 2014 as compared to the three months ended March 31, 2013. We made land and finished lot purchases in all of our regions, including Texas, Arizona, Florida, Georgia and New Mexico, with the majority of purchases in Texas. The $9.0 million increase in preacquisition costs and deposits is attributed to approximately $8.7 million of land purchase deposits for finished lots that are refundable under certain circumstances and secured by mortgages on the related property. The net cash used in operating activities for the three months ended March 31, 2014 is partially offset by a $2.1 million increase in net income. Net cash used in investing activities was $0.3 million during the three months ended March 31, 2014 compared to $0.5 million used in investing activities during the three months ended March 31, 2013. The decrease in cash used in investing activities is primarily the result of $0.7 million capital investment in our unconsolidated joint ventures in the three months ended March 31, 2013. Net cash provided by financing activities totaled $13.3 million during the three months ended March 31, 2014 compared to $6.2 million during the three months ended March 31, 2013. The $7.1 million increase in net cash provided by financing activities is primarily due to an $11.3 million increase in net borrowings in the three months ended March 31, 2014 as compared to the three months ended March 31, 2013 partially offset by $5.1 million of contributions received from non-controlling interests in the three months ended March 31, 2013 in connection with the formation of LGI Holdings III, LLC on March 31, 2013. 32



--------------------------------------------------------------------------------

Table of Contents

Off-Balance Sheet Arrangements

In the ordinary course of business, we enter into land option contracts in order to procure lots for the construction of our homes. We are subject to customary obligations associated with entering into contracts for the purchase of land and improved lots. These purchase contracts typically require cash deposit and the purchase of properties under these contracts is generally contingent upon satisfaction of certain requirements by the sellers, including obtaining applicable property and development entitlements. We also utilize option contracts with land sellers as a method of acquiring lots and land in staged takedowns, to help us manage the financial and market risk associated with land holdings, and to minimize the use of funds from our corporate financing sources. Option contracts generally require a non-refundable deposit for the right to acquire lots over a specified period of time at pre-determined prices. We generally have the right at our discretion to terminate our obligations under both purchase contracts and option contracts by forfeiting our cash deposit with no further financial obligations to the land seller. As of March 31, 2014, we had $13.4 million of cash deposits pertaining to land option contracts and purchase contracts for 8,776 lots with an aggregate remaining purchase price of $137.9 million. Approximately $8.7 million of the deposits are related to purchase contracts to deliver finished lots and these deposits are refundable under certain circumstances and secured by mortgages on the related property. Our utilization of land option contracts is dependent on, among other things, the availability of land sellers, willing to enter into option takedown arrangements, the availability of capital to financial intermediaries to finance the development of optioned lots, general housing conditions, and local market dynamics. Options may be more difficult to procure from land sellers in strong housing markets and are more prevalent in certain markets.



Inflation

Our business can be adversely impacted by inflation, primarily from higher land, financing, labor, material and construction costs. In addition, inflation can lead to higher mortgage rates, which can significantly affect the affordability of mortgage financing to home buyers. Contractual Obligations There have been no material changes to our contractual obligations appearing in the Contractual Obligations section of Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013 other than the increase to our outstanding debt obligations discussed above.



Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. On an ongoing basis, management evaluates such estimates and judgments and makes adjustments as deemed necessary. Actual results could differ from these estimates using different estimates and assumptions, or if conditions are significantly different in the future. See Note 3 - Summary of Significant Accounting Policies, to our unaudited consolidated financial statements included herein in our Quarterly Report on Form 10-Q for the three months ended March 31, 2014 for additional information about our accounting policies. We believe that there have been no significant changes to our critical accounting policies during the three months ended March 31, 2014 as compared to those disclosed in Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013.



Cautionary Statement about Forward-Looking Statements

From time to time we make statements concerning our expectations, beliefs, plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements that are not historical facts. These statements are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those expressed or implied by these statements. You can generally identify our forward-looking 33



--------------------------------------------------------------------------------

Table of Contents

statements by the words "anticipate," "believe," "continue," "could," "estimate," "expect," "forecast," "goal," "intend," "may," "objective," "plan," "potential," "predict," "projection," "should," "will" or other similar words.

We have based our forward-looking statements on our management's beliefs and assumptions based on information available to our management at the time the statements are made. We caution you that assumptions, beliefs, expectations, intentions and projections about future events may, and often do, vary materially from actual results. Therefore, we cannot assure you that actual results will not differ materially from those expressed or implied by our forward-looking statements.



The following are some of the factors that could cause actual results to differ materially from those expressed or implied in forward-looking statements: adverse economic changes either nationally or in the markets in which we

operate, including increases in unemployment, volatility of mortgage

interest rates and inflation;

a slowdown in the homebuilding industry;

continued volatility and uncertainty in the credit markets and broader

financial markets;

the cyclical and seasonal nature of our business;

our future operating results and financial condition;

our business operations;

changes in our business and investment strategy;

our ability to successfully expand into new markets;

our ability to successfully extend our business model to building homes with

higher price points, developing larger communities and sales of acreage home

sites;

our ability to successfully integrate any acquisitions with our existing

operations;

availability of land to acquire and our ability to acquire such land on

favorable terms or at all;

availability, terms and deployment of capital;

decisions of the syndicated lender group;

decline in the market value of our land portfolio;

continued or increased disruption in the terms or availability of mortgage

financing or the number of foreclosures in our markets;

shortages of or increased prices for labor, land or raw materials used in

housing construction;

delays in land development or home construction resulting from natural

disasters, adverse weather conditions or other events outside our control;

uninsured losses in excess of insurance limits;

the cost and availability of insurance and surety bonds;

changes in, or the failure or inability to comply with, governmental laws

and regulations;

the timing of receipt of regulatory approvals and the opening of projects;

the degree and nature of our competition;

increases in taxes or government fees;

an inability to develop our projects successfully or within expected

timeframes;

the success of our operations in recently opened new markets and our ability

to expand into additional new markets;

poor relations with the residents of our projects;

future litigation, arbitration or other claims;

availability of qualified personnel and third party contractors and our

ability to retain our key personnel;

our leverage and future debt service obligations;

continued volatility and uncertainty in the credit markets and broader

financial markets;

the impact on our business of any future government shutdown similar to the

one that occurred in October 2013;

other risks and uncertainties inherent in our business; and

other factors we discuss under the section entitled "Management's Discussion

and Analysis of Financial Condition and Results of Operations."

You should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement. We expressly disclaim any intent, obligation or undertaking to update or revise any forward-looking statements to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained in this Quarterly Report on Form 10-Q. 34



--------------------------------------------------------------------------------

Table of Contents

Implications of Being an Emerging Growth Company

We are an "emerging growth company," as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. Thus, we are not required to provide more than two years of audited financial statements, selected financial data and related Management's Discussion and Analysis of Financial Condition and Results of Operations in this Annual Report. For as long as we are an emerging growth company, unlike other public companies, we will not be required to: provide an attestation and report from our auditors on



management's

assessment of the effectiveness of our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;



comply with certain new requirements adopted by the PCAOB;

comply with certain new audit rules adopted by the PCAOB



after April

5, 2012, unless the SEC determines otherwise; provide disclosures regarding executive compensation



required of

larger public companies; and obtain stockholder approval of any golden parachute payments not previously approved.



We intend to take advantage of all of these exemptions.

We will cease to be an emerging growth company when any of the following conditions apply:

we have $1.0 billion or more in annual revenues;

at least $700 million in market value of our common stock are held by non-affiliates; we issue more than $1.0 billion of non-convertible debt over a three-year period; or the last day of the fiscal year following the fifth



anniversary of

our initial public offering has passed.



In addition, an emerging growth company can delay its adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we have chosen to "opt out" of such extended transition period, and as a result, we will comply with any new or revised accounting standards on the relevant dates on which non-emerging growth companies must adopt such standards. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.


For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: Edgar Glimpses


Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters