PLANO, Texas, March 4, 2019 — Green Brick Partners, Inc. (Nasdaq: GRBK) (“we,” “Green Brick” or the “Company”) today reported results for its fourth quarter and year ended December 31, 2018.

Results for the Fourth Quarter Ended December 31, 2018:

  • Basic net income attributable to Green Brick per common share (“EPS”) for the three months ended December 31, 2018 was $0.26, an increase of 262.5%, compared to $(0.16) for the three months ended December 31, 2017. Basic adjusted pre-tax income attributable to Green Brick per common share (“Adjusted EPS”) for the three months ended December 31, 2018 was $0.34, unchanged compared to $0.34 for the three months ended December 31, 2017. See “Reconciliation of Non-GAAP Financial Measures.”

 

  • For the three months ended December 31, 2018, adjusted pre-tax income attributable to Green Brick was $17.1 million, a decrease of 0.3%, compared to $17.2 million for the three months ended December 31, 2017; gross profit was $37.0 million, an increase of 27.6%, compared to $29.0 million for the three months ended December 31, 2017; and total revenue was $185.1 million, an increase of 34.7%, compared to $137.4 million for the three months ended December 31, 2017.

 

  • Residential units revenue for the three months ended December 31, 2018 was $172.0 million, an increase of 27.9%, compared to $134.5 million for the three months ended December 31, 2017. Land and lots revenue for the three months ended December 31, 2018 was $13.1 million, an increase of 350.4%, compared to $2.9 million for the three months ended December 31, 2017.

 

  • The dollar value of backlog units as of December 31, 2018 was $264.3 million, an increase of 74.5% compared to $151.5 million as of December 31, 2017.

 

  • Homes under construction increased 53.1% to 1,127 as of December 31, 2018, compared to 736 as of December 31, 2017.

 

Results for the Year Ended December 31, 2018:

  • EPS for the year ended December 31, 2018 was $1.02, an increase of 240.0% compared to $0.30 for the year ended December 31, 2017. Excluding one-time transaction expenses, Adjusted EPS for the year ended December 31, 2018 was $1.37, an increase of 25.7%, compared to $1.09 for the year ended December 31, 2017. See “Reconciliation of Non-GAAP Financial Measures.”

 

  • For the year ended December 31, 2018, adjusted pre-tax income attributable to Green Brick was $69.4 million, an increase of 28.9%, compared to $53.9 million for the year ended December 31, 2017; gross profit was $130.3 million, an increase of 31.6%, compared to $99.0 million for the year ended December 31, 2017; and total revenue was $623.6 million an increase of 36.1%, compared to $458.3 million for the year ended December 31, 2017.

 

  • Residential units revenue for the year ended December 31, 2018 was $578.9 million, an increase of 31.7%, compared to $439.5 million for the year ended December 31, 2017. Land and lots revenue for the year ended December 31, 2018 was $44.8 million, an increase of 138.9%, compared to $18.7 million for the year ended December 31, 2017.

 

“2018 was a record year for our Company with revenues of $623.6 million, adjusted pre-tax income of $69.4 million and earnings per share of $1.02. We accomplished these results with a net debt to total capitalization ratio of 26%, one of the lowest of any public builder. While we and our competition face a cooler outlook in 2019, we are well positioned for growth due to our diverse homebuyer customer mix, prime geographic homebuilding markets and disciplined management”, said Jim Brickman, CEO of Green Brick Partners, Inc.

Earnings Conference Call:

We will host our earnings conference call to discuss our fourth quarter and the year ended December 31, 2018 at 12:00 p.m. Eastern Time on Tuesday, March 5, 2019. The call can be accessed by dialing 800-374-0137 for domestic participants or 904-685-8013 for international participants. Participants should reference conference ID code 6624669. A replay of the call will be available from approximately 3:30 p.m. Eastern Time on March 5, 2019 through 11:59 p.m. Eastern Time on March 12, 2019. To access the replay, the domestic dial-in number is 855-859-2056, the international dial-in number is 404-537-3406 and the conference ID code is 6624669.

 

Reconciliation of Non-GAAP Financial Measures:

In this press release, we utilize certain financial measures that are non-GAAP financial measures as defined by the Securities and Exchange Commission. We present these measures because we believe they and similar measures are useful to management and investors in evaluating the Company’s operating performance and financing structure. We also believe these measures facilitate the comparison of our operating performance and financing structure with other companies in our industry. Because these measures are not calculated in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), they may not be comparable to other similarly titled measures of other companies and should not be considered in isolation or as a substitute for, or superior to, financial measures prepared in accordance with GAAP.

GREEN BRICK PARTNERS, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

Years Ended December 31,

 

 

2018

 

2017

 

2018

 

2017

 

 

(unaudited)

 

(unaudited)

 

 

Residential units revenue

 

$

171,990

 

 

$

134,509

 

 

$

578,893

 

 

$

439,520

 

Land and lots revenue

 

13,130

 

 

2,915

 

 

44,754

 

 

18,730

 

Total revenues

 

185,120

 

 

137,424

 

 

623,647

 

 

458,250

 

Cost of residential units

 

137,221

 

 

105,877

 

 

457,151

 

 

345,360

 

Cost of land and lots

 

10,911

 

 

2,550

 

 

36,166

 

 

13,856

 

Total cost of revenues

 

148,132

 

 

108,427

 

 

493,317

 

 

359,216

 

Total gross profit

 

36,988

 

 

28,997

 

 

130,330

 

 

99,034

 

Selling, general and administrative expense

 

16,071

 

 

10,284

 

 

56,830

 

 

39,016

 

Change in fair value of contingent consideration

 

1,693

 

 

 

 

1,693

 

 

 

Operating profit

 

19,224

 

 

18,713

 

 

71,807

 

 

60,018

 

Equity in income of unconsolidated entities

 

725

 

 

1,778

 

 

7,259

 

 

2,746

 

Other income, net

 

774

 

 

526

 

 

2,605

 

 

1,473

 

Income before income taxes

 

20,723

 

 

21,017

 

 

81,671

 

 

64,237

 

Income tax expense

 

3,795

 

 

25,396

 

 

17,136

 

 

39,031

 

Net income (loss)

 

16,928

 

 

(4,379

)

 

64,535

 

 

25,206

 

Less: Net income attributable to noncontrolling interests

 

3,574

 

 

3,816

 

 

12,912

 

 

10,236

 

Net income (loss) attributable to Green Brick Partners, Inc.

 

$

13,354

 

 

$

(8,195

)

 

$

51,623

 

 

$

14,970

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to Green Brick Partners, Inc. per common share:

 

 

 

 

 

 

 

 

Basic

 

$

0.26

 

 

$

(0.16

)

 

$

1.02

 

 

$

0.30

 

Diluted

 

$

0.26

 

 

$

(0.16

)

 

$

1.02

 

 

$

0.30

 

Weighted average common shares used in the calculation of net income attributable to Green Brick Partners, Inc. per common share:

 

 

 

 

 

 

 

 

Basic

 

50,678

 

 

50,555

 

 

50,652

 

 

49,597

 

Diluted

 

50,723

 

 

50,681

 

 

50,751

 

 

49,683

 

 

GREEN BRICK PARTNERS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

 

 

As of December 31,

 

2018

 

2017

 

(unaudited)

 

 

ASSETS

Cash

$

38,315

 

 

$

36,684

 

Restricted cash

3,440

 

 

3,605

 

Receivables

4,842

 

 

1,605

 

Inventory

668,961

 

 

496,054

 

Investment in unconsolidated entities

20,269

 

 

16,878

 

Property and equipment, net

4,690

 

 

804

 

Earnest money deposits

16,793

 

 

18,393

 

Deferred income tax assets, net

16,499

 

 

31,211

 

Intangible assets, net

856

 

 

 

Goodwill

680

 

 

 

Other assets

8,681

 

 

5,769

 

Total assets

$

784,026

 

 

$

611,003

 

LIABILITIES AND EQUITY

Accounts payable

$

26,091

 

 

$

22,354

 

Accrued expenses

29,201

 

 

18,465

 

Customer and builder deposits

31,978

 

 

21,447

 

Borrowings on lines of credit, net

200,386

 

 

105,773

 

Notes payable

 

 

9,926

 

Contingent consideration

2,207

 

 

 

Total liabilities

289,863

 

 

177,965

 

Commitments and contingencies

 

 

 

Redeemable noncontrolling interest in equity of consolidated subsidiary

8,531

 

 

 

Equity

 

 

 

Green Brick Partners, Inc. stockholders’ equity

 

 

 

Preferred stock, $0.01 par value: 5,000,000 shares authorized; none issued and outstanding

 

 

 

Common shares, $0.01 par value: 100,000,000 shares authorized; 50,719,884 and 50,598,901 issued as of December 31, 2018 and 2017, respectively; 50,583,128 and 50,598,901 outstanding as of December 31, 2018 and 2017, respectively

507

 

 

506

 

Treasury stock at cost, 136,756 shares

(981

)

 

 

Additional paid-in capital

291,299

 

 

289,938

 

Retained earnings

177,526

 

 

125,903

 

Total Green Brick Partners, Inc. stockholders’ equity

468,351

 

 

416,347

 

Noncontrolling interests

17,281

 

 

16,691

 

Total equity

485,632

 

 

433,038

 

Total liabilities and equity

$

784,026

 

 

$

611,003

 

 

GREEN BRICK PARTNERS, INC.

SUPPLEMENTAL INFORMATION

(Unaudited)

 

Residential Units Sales Revenue and New Homes Delivered

 

Three Months Ended December 31,

 

 

 

Years Ended December 31,

 

 

 

2018

 

2017

 

Change

 

%

 

2018

 

2017

 

Change

 

%

Home closings revenue (dollars in thousands)

 

$

169,534

 

 

$

133,465

 

 

$

36,069

 

 

27.0

%

 

$

571,177

 

 

$

435,644

 

 

$

135,533

 

 

31.1

%

Mechanic’s lien contracts revenue (dollars in thousands)

 

2,456

 

 

1,044

 

 

1,412

 

 

135.2

%

 

7,716

 

 

3,876

 

 

3,840

 

 

99.1

%

Residential units revenue (dollars in thousands)

 

$

171,990

 

 

$

134,509

 

 

$

37,481

 

 

27.9

%

 

$

578,893

 

 

$

439,520

 

 

$

139,373

 

 

31.7

%

New homes delivered

 

382

 

 

292

 

 

90

 

 

30.8

%

 

1,287

 

 

990

 

 

297

 

 

30.0

%

Average sales price of homes delivered

 

$

443,806

 

 

$

457,072

 

 

$

(13,266

)

 

(2.9

)%

 

$

443,805

 

 

$

440,044

 

 

$

3,761

 

 

0.9

%

 

Land and Lots Sales Revenue

 

Three Months Ended December 31,

 

 

 

Years Ended December 31,

 

 

 

2018

 

2017

 

Change

 

%

 

2018

 

2017

 

Change

 

%

Lots revenue (dollars in thousands)

 

$

10,780

 

 

$

2,915

 

 

$

7,865

 

 

269.8

%

 

$

35,074

 

 

$

17,859

 

 

$

17,215

 

 

96.4

%

Land revenue (dollars in thousands)

 

2,350

 

 

 

 

2,350

 

 

%

 

9,680

 

 

871

 

 

8,809

 

 

1,011.4

%

Land and lots revenue (dollars in thousands)

 

$

13,130

 

 

$

2,915

 

 

$

10,215

 

 

350.4

%

 

$

44,754

 

 

$

18,730

 

 

$

26,024

 

 

138.9

%

Lots closed

 

76

 

 

25

 

 

51

 

 

204.0

%

 

239

 

 

143

 

 

96

 

 

67.1

%

Average sales price of lots closed

 

$

141,842

 

 

$

116,600

 

 

$

25,242

 

 

21.6

%

 

$

146,753

 

 

$

124,888

 

 

$

21,865

 

 

17.5

%

 

New Home Orders and Backlog

 

Three Months Ended December 31,

 

 

 

Years Ended December 31,

 

 

 

2018

 

2017

 

Change

 

%

 

2018

 

2017

 

Change

 

%

Net new home orders

 

279

 

 

265

 

 

14

 

 

5.3

%

 

1,397

 

1,063

 

 

334

 

 

31.4

%

Number of cancellations

 

79

 

 

51

 

 

28

 

 

54.9

%

 

245

 

 

188

 

 

57

 

 

30.3

%

Cancellation rate

 

22.1

%

 

16.1

%

 

6.0

%

 

37.3

%

 

14.9

%

 

15.0

%

 

(0.1

)%

 

(0.7

)%

Absorption rate per selling community

 

3.7

 

 

4.7

 

 

(1.0

)

 

(21.3

)%

 

21.2

 

 

19.7

 

 

1.5

 

 

7.6

%

Average selling communities

 

76

 

 

56

 

 

20

 

 

35.7

%

 

66

 

 

54

 

 

12

 

 

22.2

%

Selling communities at end of period

 

76

 

 

55

 

 

21

 

 

38.2

%

 

 

 

 

 

 

 

 

Backlog (dollars in thousands)

 

$

264,275

 

 

$

151,463

 

 

$

112,812

 

 

74.5

%

 

 

 

 

 

 

 

 

Backlog (units)

 

582

 

 

310

 

 

272

 

 

87.7

%

 

 

 

 

 

 

 

 

Average sales price of backlog

 

$

454,081

 

 

$

488,590

 

 

$

(34,509

)

 

(7.1

)%

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2018

 

December 31, 2018

 

December 31, 2017

Builder

 

Average Selling Communities

 

Selling Communities

 

Backlog, Units

 

Backlog, in thousands

 

Selling Communities

 

Backlog, Units

 

Backlog, in thousands

The Providence Group of Georgia LLC

 

28

 

 

27

 

 

146

 

 

$

77,563

 

 

30

 

 

140

 

 

$

70,309

 

CB JENI Homes DFW LLC

 

19

 

 

21

 

170

 

67,988

 

 

16

 

 

117

 

 

44,067

 

Centre Living Homes LLC

 

5

 

 

6

 

14

 

7,493

 

 

4

 

 

5

 

 

2,239

 

Southgate Homes DFW LLC

 

7

 

 

8

 

55

 

37,873

 

 

5

 

 

48

 

 

34,848

 

GRBK GHO Homes LLC

 

7

 

 

14

 

197

 

73,358

 

 

 

 

 

 

 

Total

 

66

 

 

76

 

 

582

 

 

$

264,275

 

 

55

 

 

310

 

 

$

151,463

 

 

 

 

December 31, 2018

 

December 31, 2017

Lots owned

 

 

 

 

Central

 

4,447

 

 

3,196

 

Southeast

 

1,788

 

 

1,299

 

Total lots owned

 

6,235

 

 

4,495

 

Lots controlled

 

 

 

 

Central

 

853

 

 

1,390

 

Southeast

 

990

 

 

334

 

Total lots controlled

 

1,843

 

 

1,724

 

Total lots owned and controlled (1)

 

8,078

 

 

6,219

 

Percentage of lots owned

 

77.2

%

 

72.3

%

 

 

  • Total lots excludes lots with homes under construction.

 

Reconciliation of Non-GAAP Financial Measures

 

The following table presents the non-GAAP measure of Adjusted EPS for the three months and years ended December 31, 2018 and 2017 and reconciles these amounts to net income attributable to Green Brick as reported and prepared in accordance with GAAP. Adjusted EPS for the three months and years ended December 31, 2018 and 2017 represents adjusted pre-tax income for the period presented, divided by the weighted average number of common shares outstanding for the three months and years ended December 31, 2018 and 2017, respectively. Adjusted pre-tax income represents net income attributable to Green Brick for the period, excluding income tax expense attributable to Green Brick and one-time transaction expenses related to a public secondary offering of the Company’s shares.

(Unaudited, in thousands, except per share amounts):

 

Three Months Ended December 31,

 

Years Ended December 31,

 

2018

 

2017

 

2018

 

2017

Net income (loss) attributable to Green Brick

 

$

13,354

 

 

$

(8,195

)

 

$

51,623

 

 

$

14,970

 

Income tax expense attributable to Green Brick

 

3,754

 

 

25,356

 

 

16,984

 

 

38,896

 

Transaction expenses

 

 

 

 

 

827

 

 

 

Adjusted pre-tax income attributable to Green Brick

 

$

17,108

 

 

$

17,161

 

 

$

69,434

 

 

$

53,866

 

 

 

 

 

 

 

 

 

 

Weighted-average number of shares outstanding – basic

 

50,678

 

 

50,555

 

 

50,652

 

 

49,597

 

Basic adjusted EPS

 

$0.34

 

$0.34

 

$1.37

 

$1.09

 

 

 

 

 

 

 

 

 

Weighted-average number of shares outstanding – diluted

 

50,723

 

 

50,681

 

 

50,751

 

 

49,683

 

Diluted adjusted EPS

 

$0.34

 

$0.34

 

$1.37

 

$1.08

 

The following table represents the non-GAAP measure of adjusted homebuilding gross margin for the three months and years ended December 31, 2018 and 2017 and reconciles these amounts to homebuilding gross margin, the most directly comparable GAAP measure.

(Unaudited, in thousands):

 

Three Months Ended December 31,

 

Years Ended December 31,

 

2018

 

2017

 

2018

 

2017

Residential units revenue

 

$

171,990

 

 

$

134,509

 

 

$

578,893

 

 

$

439,520

 

Less: Mechanic’s lien contracts revenue

 

(2,456

)

 

(1,044

)

 

(7,716

)

 

(3,876

)

Home closings revenue

 

$

169,534

 

 

$

133,465

 

 

$

571,177

 

 

$

435,644

 

Homebuilding gross margin

 

$

34,104

 

 

$

28,466

 

 

$

120,141

 

 

$

93,579

 

Add back: Capitalized interest charged to cost of sales

 

1,396

 

 

754

 

 

3,961

 

 

2,630

 

Adjusted homebuilding gross margin

 

$

35,500

 

 

$

29,220

 

 

$

124,102

 

 

$

96,209

 

Adjusted homebuilding gross margin percentage

 

20.9

%

 

21.9

%

 

21.7

%

 

22.1

%

 

Exhibit 99.2 accompanies this release and can be viewed by clicking here.

About Green Brick Partners, Inc.:

Green Brick Partners, Inc. (Nasdaq: GRBK) is a diversified homebuilding and land development company. Green Brick owns a controlling interest in five homebuilders in Dallas, Texas (CB JENI Homes, Normandy Homes, Southgate Homes, Centre Living Homes, and Trophy Signature Homes), as well as a homebuilder in Atlanta, Georgia (The Providence Group) and a homebuilder in Port St. Lucie, Florida (GHO Homes). Green Brick also owns a noncontrolling interest in Challenger Homes in Colorado Springs, Colorado and retains interests in related financial services platforms, including Green Brick Title, Providence Group Title, and Green Brick Mortgage. The Company is engaged in all aspects of the homebuilding process, including land acquisition and development, entitlements, design, construction, marketing, and sales for its residential neighborhoods and master planned communities. For more information about Green Brick’s homebuilding partners, please visit https://greenbrickpartners.com/team-builders/.

 

Forward-Looking and Cautionary Statements:

Any statements in this press release about Green Brick’s expectations, beliefs, plans, objectives, prospects, financial condition, assumptions or future events or performance that are not historical facts are forward-looking statements.  These statements are often, but not always, made through the use of words or phrases such as “may,” “will,” “should,” “predicts,” “potential,” “expects,” “future,” “positioned,” “believes,” “projects,” “estimates” and similar expressions, as well as statements in the future tense. These statements are based on assumptions that Green Brick has made in light of its experience in the industry as well as its perceptions of historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances, as of the date of this press release. All such forward-looking statements involve estimates and assumptions that are subject to factors that could cause actual results to differ materially from the results expressed in the statements, and you should not place undue reliance on any such forward-looking statements. Among the factors that could cause actual results to differ materially are the following: general economic conditions, seasonality, cyclicality and competition in the homebuilding industry; the failure to recruit, retain and develop highly skilled and competent employees; management and integration of acquisitions; labor and raw material shortages; an inability to acquire land for reasonable prices; an inability to develop and sell communities; government regulation risks; mortgage financing availability and volatility; severe weather or natural disasters; difficulty in obtaining sufficient capital; poor relations with community residents; and our debt and related service obligations. Additional factors that could cause actual results to differ are discussed in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s annual and quarterly reports filed with the Securities and Exchange Commission. Green Brick undertakes no obligation to update any forward-looking statement except as required by law.

 

Contact: Richard A. Costello

Chief Financial Officer

(469) 573-6755

2805 North Dallas Parkway, Suite 400 Plano, TX 75093 | © 2017, Green Brick Partners. All Rights Reserved. | Terms and Conditions