KB Home announced that an internal probe launched in August determined that the actual measurement dates certain stock option grants likely differ from the recorded grant dates. As a result, additional non-cash charges for stock-based compensation relating to these grants may need to be recorded.
The homebuilder cautioned that the internal review is not yet complete, so it has not yet determined the total amount or the materiality of additional non-cash charges. The company also said it has not yet determined the impact of any related tax consequences. Even so, the KB will delay filing its third quarter report for the period ended August 31 beyond the five-day extension period that is permitted.
Officials acknowledged that by not filing on time, it may result in a default under the indentures governing its senior and senior subordinated notes and its credit agreements. However, the company assured investors that it expects to receive extensions to deliver third quarter financial statements to the banks under its credit agreements.
