Green Brick Partners, Inc. Reports Record Fourth Quarter 2021 Results

Q4 Record Residential Units Revenue Of $420.1 Million, Up 70.4%
Q4 Income Before Taxes Of $82.6 Million, Up 117.6%
Full Year Income Before Taxes of $257.0 Million, Up 79.9%
Q4 SG&A Expense 8.8%, Improved 350 Bps
Record Lots Owned and Controlled Up, 97.8%

PLANO, Texas, March 01, 2022 (GLOBE NEWSWIRE) — Green Brick Partners, Inc. (NYSE: GRBK) (“we,” “Green Brick” or the “Company”) today reported record results for its fourth quarter ended December 31, 2021.

“Our fourth quarter year-over-year total revenue growth of 78% reflected not just a record quarter for closings, but also a continuation of our dynamic growth which has now seen us grow total revenue by a compounded annual growth rate of 33% over the last two years and 29% over the past 6 years,” said Jim Brickman, CEO and Co-Founder. “During 2021, we continued to invest in our future growth by almost doubling our number of lots owned and controlled. Most recently, this includes our announcement of our expansion into Austin, TX, the 6th largest home starts market in the country. Our investment in lot growth in 2021 was accomplished with low financial leverage and high returns on equity. We have maintained our low debt to capital ratio at 27.7%. And our net income return on average equity was 31.9% for the fourth quarter annualized and 25.9% for the year.”

Results for the Year Ended December 31, 2021:

For the year ended December 31, 2021, our net income attributable to Green Brick per common share (“EPS”), total revenues, residential units revenue, and net income attributable to Green Brick reflect a record for any twelve-month period since the Company’s inception. Lots owned and control also represent a Company record as of the end of any reporting period.

(Dollars in thousands, except per share data) Twelve Months Ended December 31,    
    2021       2020     Change
New homes delivered   2,834       2,208     28.4 %
           
Total revenues $ 1,402,876     $ 976,021     43.7 %
Total cost of revenues   1,040,817       741,417     40.4 %
Total gross profit $ 362,059     $ 234,604     54.3 %
Income before income taxes $ 256,986     $ 142,813     79.9 %
Net income attributable to Green Brick Partners, Inc. $ 190,210     $ 113,693     67.3 %
Diluted net income attributable to Green Brick Partners, Inc. per common share $ 3.72     $ 2.24     66.1 %
           
Residential units revenue $ 1,309,687     $ 930,176     40.8 %
Average sales price of homes delivered $ 460.7     $ 418.4     10.1 %
Homebuilding gross margin percentage   26.4 %     24.2 %   220 bps  
Selling, general and administrative expenses as a percentage of residential units revenue   10.3 %     12.1 %   -180 bps  
           
Backlog $ 869,856     $ 686,861     26.6 %
Lots owned and controlled   28,621       14,468     97.8 %
Homes under construction   2,278       1,780     28.0 %

Results for the Quarter Ended December 31, 2021:

For the quarter ended December 31, 2021, our net income attributable to Green Brick per common share (“EPS”), total revenues, residential units revenue, and net income attributable to Green Brick reflect a record for any quarter since the Company’s inception, as detailed below.

(Dollars in thousands, except per share data) Three Months Ended December 31,    
    2021       2020     Change
New homes delivered   823       585     40.7 %
           
Total revenues $ 452,251     $ 254,100     78.0 %
Total cost of revenues   341,493       190,246     79.5 %
Total gross profit $ 110,758     $ 63,854     73.5 %
Income before income taxes $ 82,589     $ 37,949     117.6 %
Net income attributable to Green Brick Partners, Inc. $ 63,471     $ 29,310     116.6 %
Diluted net income attributable to Green Brick Partners, Inc. per common share $ 1.24     $ 0.58     113.8 %
           
Residential units revenue $ 420,051     $ 246,437     70.4 %
Average sales price of homes delivered $ 509.3     $ 419.7     21.3 %
Homebuilding gross margin percentage   26.2 %     25.1 %   110 bps  
Selling, general and administrative expenses as a percentage of residential units revenue   8.8 %     12.3 %   – 350 bps  

“By metering sales, we have kept our pipeline of backlog revenues filled while successfully increasing spec inventory. From a low of 28% spec units under construction at the end of the first quarter of 2021, we have increased that percentage to 39%. We believe that increasing our spec levels will lead to more efficient operations, higher margins and returns, and less risk of construction costs,” said Rick Costello, CFO. “Our presence in high job growth markets coupled with credit worthy buyers who can afford larger homes and bigger mortgages allow us to continue to raise prices with new releases of lots. So, selling some houses 2 to 4 months before completion will get a better margin than selling all the houses 7 to 12 months ahead of completion. Our return to a higher level of spec units under construction should position us to continue capturing increased sales prices. Managing this type of flow is a corporate strength and making decisions like this contribute to our superior gross margins and return on capital.”

Green Brick, like every other company in the United States and the global economy, has been impacted by the coronavirus, or COVID-19, pandemic and the impact of governmental actions taken to combat the pandemic. After an initial decline in orders and construction at the onset of the crisis, orders have subsequently achieved all-time highs. The significant increase in new home demand that we have seen and that the industry has experienced since the second half of 2020 has, in turn, led to substantial price increases, but also increased demand for labor and the raw materials, products and appliances for new homes. As a result, we have and expect to continue to experience increases in cost and decreased availability of skilled labor as well as increases, shortages, and significant extensions to our lead time for the delivery of key materials and inputs.

Earnings Conference Call:

We will host our earnings conference call to discuss our fourth quarter ended December 31, 2021 at 12:00 p.m. Eastern Time on Wednesday, March 2, 2022. The call can be accessed by dialing 877-407-0890 for domestic participants or 201-389-0918 for international participants and should reference meeting number 13726490. Participants may also join the call via webcast at: https://www.webcast-eqs.com/greenbrickpartners20220302/en

A replay of the call will be available from approximately 3:00 p.m. Eastern Time on March 2, 2022 through 11:59 p.m. Eastern Time on March 30, 2022. To access the replay, the domestic dial-in number is 877-660-6853, the international dial-in number is 201-612-7415 and the conference ID code is 13726490.

Non-GAAP Financial Measures and Key Financial Metrics:

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 our 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)

    (Unaudited)        
    Three Months Ended December 31,   Twelve Months Ended December 31,
      2021       2020       2021       2020  
Residential units revenue   $ 420,051     $ 246,437     $ 1,309,687     $ 930,176  
Land and lots revenue     32,200       7,663       93,189       45,845  
Total revenues     452,251       254,100       1,402,876       976,021  
Cost of residential units     310,228       184,534       964,364       705,866  
Cost of land and lots     31,265       5,712       76,453       35,551  
Total cost of revenues     341,493       190,246       1,040,817       741,417  
Total gross profit     110,758       63,854       362,059       234,604  
Selling, general and administrative expenses     (37,087 )     (30,416 )     (134,269 )     (112,134 )
Change in fair value of contingent consideration           (158 )           (368 )
Equity in income of unconsolidated entities     5,674       3,616       19,713       16,654  
Other income, net     3,244       1,053       9,483       4,057  
Income before income taxes     82,589       37,949       256,986       142,813  
Income tax expense     15,512       7,659       52,605       25,016  
Net income     67,077       30,290       204,381       117,797  
Less: Net income attributable to noncontrolling interests     3,606       980       14,171       4,104  
Net income attributable to Green Brick Partners, Inc.   $ 63,471     $ 29,310     $ 190,210     $ 113,693  
                 
Net income attributable to Green Brick Partners, Inc. per common share:                
Basic   $ 1.25     $ 0.58     $ 3.75     $ 2.25  
Diluted   $ 1.24     $ 0.58     $ 3.72     $ 2.24  
Weighted average common shares used in the calculation of net income attributable to Green Brick Partners, Inc. per common share:                
Basic     50,732       50,617       50,700       50,568  
Diluted     51,104       50,967       51,060       50,795  

 

GREEN BRICK PARTNERS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)

  December 31, 2021   December 31, 2020
ASSETS
Cash and cash equivalents $ 78,696     $ 19,479  
Restricted cash   14,858       14,156  
Receivables   6,871       5,224  
Inventory   1,203,743       844,635  
Investments in unconsolidated entities   55,616       46,443  
Right-of-use assets – operating leases   4,596       2,538  
Property and equipment, net   2,812       3,595  
Earnest money deposits   26,008       22,242  
Deferred income tax assets, net   15,741       15,376  
Intangible assets, net   537       622  
Goodwill   680       680  
Other assets   11,709       13,857  
Total assets $ 1,421,867     $ 988,847  
LIABILITIES AND EQUITY
Liabilities:      
Accounts payable $ 45,682     $ 24,521  
Accrued expenses   61,351       40,416  
Customer and builder deposits   64,610       38,131  
Lease liabilities – operating leases   4,745       2,591  
Borrowings on lines of credit, net   (738 )     106,687  
Senior unsecured notes, net   335,446       111,056  
Notes payable   210       2,125  
Contingent consideration         368  
Total liabilities   511,306       325,895  
Commitments and contingencies      
Redeemable noncontrolling interest in equity of consolidated subsidiary   21,867       13,543  
Equity:      
Green Brick Partners, Inc. stockholders’ equity      
Preferred stock, $0.01 par value: 5,000,000 shares authorized; 2,000 and zero issued and outstanding as of December 31, 2021 and 2020, respectively   47,696        
Common stock, $0.01 par value: 100,000,000 shares authorized; 51,151,911 and 51,053,858 issued and 50,759,972 and 50,661,919 outstanding as of December 31, 2021 and 2020, respectively   512       511  
Treasury stock, at cost, 391,939 shares   (3,167 )     (3,167 )
Additional paid-in capital   289,641       293,242  
Retained earnings   539,866       349,656  
Total Green Brick Partners, Inc. stockholders’ equity   874,548       640,242  
Noncontrolling interests   14,146       9,167  
Total equity   888,694       649,409  
Total liabilities and equity $ 1,421,867     $ 988,847  

 

GREEN BRICK PARTNERS, INC.
SUPPLEMENTAL INFORMATION
(Unaudited)

Residential Units Revenue and New Homes Delivered
(dollars in thousands)

  Three Months Ended December 31,           Twelve Months Ended December 31,        
    2021     2020   Change   %     2021     2020   Change   %
Home closings revenue   $ 419,132   $ 245,549   $ 173,583   70.7 %   $ 1,305,620   $ 923,901   $ 381,719     41.3 %
Mechanic’s lien contracts revenue     919     888     31   3.5 %     4,067     6,275     (2,208 )   (35.2 )%
Residential units revenue   $ 420,051   $ 246,437   $ 173,614   70.4 %   $ 1,309,687   $ 930,176   $ 379,511     40.8 %
New homes delivered     823     585     238   40.7 %     2,834     2,208     626     28.4 %
Average sales price of homes delivered   $ 509.3   $ 419.7   $ 89.6   21.3 %   $ 460.7   $ 418.4   $ 42.3     10.1 %

 

Land and Lots Revenue
(dollars in thousands)

  Three Months Ended December 31,           Twelve Months Ended December 31,        
    2021     2020   Change   %     2021     2020   Change   %
Lots revenue   $ 9,682   $ 7,663   $ 2,019     26.3 %   $ 24,866   $ 45,461   $ (20,595 )   (45.3 )%
Land revenue     22,518         22,518     100.0 %     68,323     384     67,939     17,692.4 %
Land and lots revenue   $ 32,200   $ 7,663   $ 24,537     320.2 %   $ 93,189   $ 45,845   $ 47,344     103.3 %
Lots closed     150     73     77     105.5 %     323     375     (52 )   (13.9 )%
Average sales price of lots closed   $ 64.5   $ 105.0   $ (40.5 )   (38.6 )%   $ 77.0   $ 121.2   $ (44.2 )   (36.5 )%

 

New Home Orders and Backlog
(dollars in thousands)

  Three Months Ended December 31,           Twelve Months Ended December 31,        
    2021       2020     Change   %   2021     2020     Change   %
Net new home orders     476       848       (372 )   (43.9 )%   2,851     2,885     (34 )   (1.2 )%
Cancellation rate     12.3 %     8.6 %     3.7 %   43.0 %   7.7 %   13.0 %   (5.3 )%   (40.8 )%
Absorption rate per average active selling community per quarter     6.2       8.3       (2.1 )   (25.3 )%   8.2     7.5     0.7     9.3 %
Average active selling communities     77       102       (25 )   (24.5 )%   87     96     (9 )   (9.4 )%
Active selling communities at end of period     74       103       (29 )   (28.2 )%                
Backlog   $ 869,856     $ 686,861     $ 182,995     26.6 %                
Backlog (units)     1,480       1,463       17     1.2 %                
Average sales price of backlog   $ 587.7     $ 469.5     $ 118.2     25.2 %                

 

     December 31, 2021   December 31, 2020
Lots owned (1)          
Central   17,767     6,823  
Southeast   2,472     2,097  
Total lots owned   20,239     8,920  
Lots controlled (1)        
Central   7,321     4,398  
Southeast   1,061     1,150  
Total lots controlled   8,382     5,548  
Total lots owned and controlled (1)   28,621     14,468  
Percentage of lots owned   70.7 %   61.7 %

 

 

(1)   Excludes lots with homes under construction.

GREEN BRICK PARTNERS, INC.
SUPPLEMENTAL INFORMATION
(Unaudited)

The following table presents additional information on the lots we owned as of December 31, 2021 and December 31, 2020.

  December 31, 2021   December 31, 2020
Total lots owned 20,239     8,920  
Add certain lots included in Total Lots Controlled      
Land under option for future acquisition and development 3,826     740  
Lots under option through unconsolidated development joint ventures 1,816     1,838  
Total lots self-developed 25,881     11,498  
Self-developed lots as a percentage of total lots owned and controlled 90.4 %   79.5 %

Reconciliation of Non-GAAP Financial Measures

The following table represents the non-GAAP measure of adjusted homebuilding gross margin for the three and twelve months ended December 31, 2021 and 2020 and reconciles these amounts to homebuilding gross margin, the most directly comparable GAAP measure.

(Unaudited, in thousands):

  Three Months Ended December 31,   Twelve Months Ended December 31,
    2021       2020       2021       2020  
Residential units revenue   $ 420,051     $ 246,437     $ 1,309,687     $ 930,176  
Less: Mechanic’s lien contracts revenue     (919 )     (888 )     (4,067 )     (6,275 )
Home closings revenue   $ 419,132     $ 245,549     $ 1,305,620     $ 923,901  
Homebuilding gross margin   $ 109,671     $ 61,680     $ 344,505     $ 223,130  
Homebuilding gross margin percentage     26.2 %     25.1 %     26.4 %     24.2 %
                 
Homebuilding gross margin     109,671       61,680       344,505       223,130  
Add back: Capitalized interest charged to cost of revenues     3,326       2,380       10,241       10,182  
Adjusted homebuilding gross margin   $ 112,997     $ 64,060     $ 354,746     $ 233,312  
Adjusted homebuilding gross margin percentage     27.0 %     26.1 %     27.2 %     25.3 %

The following table presents the pre-tax income for the three and twelve months ended December 31, 2021 and 2020, which represents net income attributable to Green Brick for the period excluding the provision for income taxes attributable to Green Brick, and reconciles these amounts to net income attributable to Green Brick, the most directly comparable GAAP measure.

(Unaudited, in thousands):

  Three Months Ended December 31,   Twelve Months Ended December 31,
    2021     2020     2021     2020
Net income attributable to Green Brick Partners, Inc.   $ 63,471   $ 29,310   $ 190,210   $ 113,693
Income tax expense attributable to Green Brick Partners, Inc.     15,510     7,656     52,599     25,010
Pre-tax income attributable to Green Brick Partners, Inc.   $ 78,981   $ 36,966   $ 242,809   $ 138,703

About Green Brick Partners, Inc.

Green Brick Partners, Inc. is a diversified homebuilding and land development company operating through eight homebuilder brands in five major markets. Green Brick owns five subsidiary homebuilders in Texas (CB JENI Homes, Normandy Homes, Southgate Homes, Trophy Signature Homes, and a 90% interest in Centre Living Homes), as well as a controlling interest in a homebuilder in Atlanta, Georgia (The Providence Group) and an 80% interest in 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, Green Brick Mortgage, and BHome 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 Partners Inc.’s subsidiary homebuilders, please visit greenbrickpartners.com/homebuilders. 

Forward-Looking and Cautionary Statements:

This press release and our earnings call contain “forward-looking statements” within the meaning of the Private Securities Litigation Act of 1995. These statements concern expectations, beliefs, projections, plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts and typically include the words “anticipate,” “believe,” “consider,” “estimate,” “expect,” “feel,” “intend,” “plan,” “predict,” “seek,” “strategy,” “target,” “will” or other words of similar meaning. Forward-looking statements in this press release include statements regarding (i) our belief that our land position and back-log will position us to grow our business in 2022 and beyond, (ii) our intent to increase the number of spec homes in our portfolio and the impact of that strategy on our ability to capture the most current price increases and to maximize profitability, (iv) impact of increased demand for labor and the raw materials, products and appliances for new homes on our costs, markets and delivery time of our home, (v) our strategy for growth, the drivers and acceleration of that growth, and the impact on our results during 2022, and (vi) our ability to capitalize on market opportunities and the impact on our results. These forward-looking statements reflect our current views about future events and involve estimates and assumptions which may be affected by risks and uncertainties in our business, as well as other external factors, which could cause future results to materially differ from those expressed or implied in any forward-looking statement. These risks include, but are not limited to: (1) continuing impacts from the COVID-19 pandemic; (2) general economic conditions, seasonality, cyclicality and competition in the homebuilding industry; (3) changes in macroeconomic conditions, including interest rates and unemployment rates, that could adversely impact demand for new homes or the ability of potential buyers to qualify; (4) shortages, delays or increased costs of raw materials, especially in light of COVID-19 and increased demand for materials, or increases in other operating costs, including costs related to labor, real estate taxes and insurance, which in each case exceed our ability to increase prices; (5) a shortage of labor; (6) an inability to acquire land in our markets at anticipated prices or difficulty in obtaining land-use entitlements; (7) our inability to successfully execute our strategies, including an inability to grow our operations or expand our Trophy brand; (8) a failure to recruit, retain or develop highly skilled and competent employees; (9) government regulation risks; (10) a lack of availability or volatility of mortgage financing or a rise in interest rates; (11) severe weather events or natural disasters; (12) difficulty in obtaining sufficient capital to fund our growth; (13) our ability to meet our debt service obligations; (14) a decline in the value of our inventories and resulting write-downs of the carrying value of our real estate assets; (15) changes in accounting standards that adversely affect our reported earnings or financial condition. For a more detailed discussion of these and other risks and uncertainties applicable to Green Brick please see our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission.

Contact: Richard A. Costello
Chief Financial Officer
(469) 573-6755

2805 Dallas Parkway, Suite 400 Plano, TX 75093 | © 2022, Green Brick Partners. All Rights Reserved. | Terms & Conditions of Website Use