The 2019 Fourth Quarter investor presentation accompanying this release can be found here.

RECORD BASIC EPS OF $0.32 PER SHARE, UP 23.1%
RECORD 111.5% INCREASE IN NEW HOME ORDERS
RECORD RESIDENTIAL UNITS REVENUE AND GROSS PROFIT
RECORD BACKLOG $346.8 MILLION
25.0% ENDING COMMUNITY GROWTH YEAR OVER YEAR

PLANO, Texas, March 03, 2020 (GLOBE NEWSWIRE) — Green Brick Partners, Inc. (Nasdaq: GRBK) (“we,” “Green Brick” or the “Company”) today reported results for its fourth quarter and year ended December 31, 2019.

Results for the Fourth Quarter Ended December 31, 2019:

  • For the quarter ended December 31, 2019, basic net income attributable to Green Brick per common share (“EPS”), total revenue, residential units revenue, gross profit, and homes under construction all reflect a record for any quarter, as detailed below.
  • EPS for the three months ended December 31, 2019 was $0.32, a 23.1% increase compared to the quarterly earnings of $0.26 for the three months ended December 31, 2018.
  • For the three months ended December 31, 2019, total revenue was $230.1 million, an increase of 24.3% compared to $185.1 million for the three months ended December 31, 2018; gross profit was $48.7 million, an increase of 11.1% compared to $43.8 million for the three months ended December 31, 2018; and net income attributable to Green Brick was $15.9 million, an increase of 19.2% compared to $13.4 million for the three months ended December 31, 2018.
  • Residential units revenue for the three months ended December 31, 2019 was $223.3 million, an increase of 29.8% compared to $172.0 million for the three months ended December 31, 2018. Land and lots revenue for the three months ended December 31, 2019 was $6.9 million, a decrease of 47.8% compared to $13.1 million for the three months ended December 31, 2018.
  • The dollar value of backlog units as of December 31, 2019 was $346.8 million, an increase of 31.2% compared to $264.3 million as of December 31, 2018.
  • Average active selling communities increased from 76 communities for the quarter ended December 31, 2018 to 90 communities for the quarter ended December 31, 2019, an increase of 18.4%.
  • Homes under construction increased to 1,297 as of December 31, 2019, a 15.1% increase compared to 1,127 as of December 31, 2018.

Results for the Twelve Months Ended December 31, 2019:

  • EPS for the twelve months ended December 31, 2019 was $1.16, an increase of 13.7% compared to $1.02 for the twelve months ended December 31, 2018.
  • For the twelve months ended December 31, 2019, total revenue was $791.7 million, an increase of 26.9% compared to $623.6 million for the twelve months ended December 31, 2018; gross profit was $169.1 million, an increase of 9.6%, compared to $154.2 million for the twelve months ended December 31, 2018; and net income attributable to Green Brick was $58.7 million, an increase of 13.6% compared to $51.6 million for the twelve months ended December 31, 2018.
  • Residential units revenue for the twelve months ended December 31, 2019 was $759.8 million, a record for any twelve-month period and an increase of 31.3% compared to $578.9 million for the twelve months ended December 31, 2018. Land and lots revenue for the twelve months ended December 31, 2019 was $31.8 million, a decrease of 28.9% compared to $44.8 million for the twelve months ended December 31, 2018.

“Our future continues to be bright as we ended 2019 with yet another record-breaking quarter. We are exceedingly proud to report record highs in total revenues, gross profit, EPS, and the number of net new home orders in our history. We surpassed our goal of active selling communities as of year end as ending selling communities grew by 27% over just the past two quarters. Combined with our Q4 absorption rate increase of 78% year over year, we sold more homes than ever with net new home orders more than doubling with a year over year increase of 111%,” said Jim Brickman, CEO of Green Brick Partners, Inc.

“Entering 2020 with such a strong foundation of excellence has placed us in a position primed for continued success, including the largest backlog to date. We continue to approach Green Brick’s future with enthusiasm and optimism but also conservative financial leverage. We look forward to improving upon the record-setting results we saw this past quarter and 2019.”

Earnings Conference Call:

We will host our earnings conference call to discuss our fourth quarter ended December 31, 2019 at 12:00 p.m. Eastern Time on Wednesday, March 4, 2020. 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 2798239. A replay of the call will be available from approximately 3:30 p.m. Eastern Time on March 4, 2020 through 11:59 p.m. Eastern Time on March 11, 2020. 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 2798239.

Reconciliation of 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 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.

In addition, this press release contains our debt to total capitalization ratio which is calculated as the sum of borrowings on lines of credit and the senior unsecured notes, net of debt issuance costs, divided by the total Green Brick Partners, Inc. stockholders’ equity.

Reclassifications:
Beginning in the first quarter of 2019, the Company reclassified its sales commission expenses from cost of residential units to selling, general and administrative expense in the consolidated statements of income in order to be more comparable with a majority of its peers. There was no impact to net income from the reclassification in any period. Following this reclassification, the Company’s adjusted homebuilding gross margin was 22.7% and 22.4% for the three and twelve months ended December 31, 2019, respectively. Sales commission expenses represented 4.5% and 4.2% of the residential units revenue for the three and twelve months ended December 31, 2019, respectively.

 
GREEN BRICK PARTNERS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
         
    Three Months Ended December 31,   Years Ended December 31,
    2019   2018   2019   2018
Residential units revenue   $ 223,270     $ 171,990     $ 759,830     $ 578,893  
Land and lots revenue   6,852     13,130     31,830     44,754  
Total revenues   230,122     185,120     791,660     623,647  
Cost of residential units   176,221     130,380     597,884     433,279  
Cost of land and lots   5,191     10,911     24,694     36,166  
Total cost of revenues   181,412     141,291     622,578     469,445  
Total gross profit   48,710     43,829     169,082     154,202  
Selling, general and administrative expense   27,555     22,912     98,659     80,702  
Change in fair value of contingent consideration   3,157     1,693     4,906     1,693  
Equity in income of unconsolidated entities   2,244     725     9,809     7,259  
Other income, net   2,340     774     9,003     2,605  
Income before income taxes   22,582     20,723     84,329     81,671  
Income tax expense   5,034     3,795     20,027     17,136  
Net income   17,548     16,928     64,302     64,535  
Less: Net income attributable to noncontrolling interests   1,628     3,574     5,646     12,912  
Net income attributable to Green Brick Partners, Inc.   $ 15,920     $ 13,354     $ 58,656     $ 51,623  
                 
Net income attributable to Green Brick Partners, Inc. per common share:                
Basic   $ 0.32     $ 0.26     $ 1.16     $ 1.02  
Diluted   $ 0.31     $ 0.26     $ 1.16     $ 1.02  
Weighted average common shares used in the calculation of net income attributable to Green Brick Partners, Inc. per common share:                
Basic   50,429     50,678     50,530     50,652  
Diluted   50,619     50,723     50,636     50,751  
                         
 
GREEN BRICK PARTNERS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
       
  December 31, 2019   December 31, 2018
ASSETS
Cash $ 33,269     $ 38,315  
Restricted cash 4,416     3,440  
Receivables 4,720     4,842  
Inventory 753,567     668,961  
Investments in unconsolidated entities 30,294     20,269  
Right-of-use assets – operating leases 3,462      
Property and equipment, net 4,309     4,690  
Earnest money deposits 14,686     16,793  
Deferred income tax assets, net 15,262     16,499  
Intangible assets, net 707     856  
Goodwill 680     680  
Other assets 10,167     8,681  
Total assets $ 875,539     $ 784,026  
LIABILITIES AND EQUITY
Liabilities:      
Accounts payable $ 30,044     $ 26,091  
Accrued expenses 24,656     29,201  
Customer and builder deposits 23,954     31,978  
Lease liabilities – operating leases 3,564      
Borrowings on lines of credit, net 164,642     200,386  
Senior unsecured notes, net 73,406      
Contingent consideration 5,267     2,207  
Total liabilities 325,533     289,863  
Commitments and contingencies      
Redeemable noncontrolling interest in equity of consolidated subsidiary 13,611     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 stock, $0.01 par value: 100,000,000 shares authorized; 50,879,949 and 50,719,884 issued and 50,488,010 and 50,583,128 outstanding as of December 31, 2019 and December 31, 2018, respectively 509     507  
Treasury stock, at cost, 391,939 and 136,756 shares as of December 31, 2019 and December 31, 2018, respectively (3,167 )   (981 )
Additional paid-in capital 290,799     291,299  
Retained earnings 235,027     177,526  
Total Green Brick Partners, Inc. stockholders’ equity 523,168     468,351  
Noncontrolling interests 13,227     17,281  
Total equity 536,395     485,632  
Total liabilities and equity $ 875,539     $ 784,026  
               
               

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,
       
  2019   2018   Change   %   2019   2018   Change   %
Home closings revenue   $ 223,270     $ 169,534     $ 53,736     31.7 %   $ 752,273     $ 571,177     $ 181,096     31.7 %
Mechanic’s lien contracts revenue       2,456     (2,456 )   (100.0 )%   7,557     7,716     (159 )   (2.1 )%
Residential units revenue   $ 223,270     $ 171,990     $ 51,280     29.8 %   $ 759,830     $ 578,893     $ 180,937     31.3 %
New homes delivered   514     382     132     34.6 %   1,719     1,287     432     33.6 %
Average sales price of homes delivered   $ 434.4     $ 443.8     $ (9.4 )   (2.1 )%   $ 437.6     $ 443.8     $ (6.2 )   (1.4 )%

 

Land and Lots Revenue
(dollars in thousands)
  Three Months Ended
December 31,
      Twelve Months Ended
December 31,
       
  2019   2018   Change   %   2019   2018   Change   %
Lots revenue   $ 6,852     $ 10,780     $ (3,928 )   (36.4 )%   $ 31,820     $ 35,074     $ (3,254 )   (9.3 )%
Land revenue       2,350     (2,350 )   (100.0 )%   10     9,680     (9,670 )   (99.9 )%
Land and lots revenue   $ 6,852     $ 13,130     $ (6,278 )   (47.8 )%   $ 31,830     $ 44,754     $ (12,924 )   (28.9 )%
Lots closed   45     76     (31 )   (40.8 )%   211     239     (28 )   (11.7 )%
Average sales price of lots closed   $ 152.3     $ 141.8     $ 10.5     7.4 %   $ 150.8     $ 146.8     $ 4.0     2.7 %

 

New Home Orders and Backlog
(dollars in thousands)
  Three Months Ended
December 31,
      Twelve Months Ended
December 31,
       
  2019   2018   Change   %   2019   2018   Change   %
Net new home orders     590       279       311       111.5 %     1,923       1,397       526       37.7 %
Cancellation rate   10.6 %   22.1 %   (11.5 )%   (52.0 )%   12.9 %   14.9 %   (2.0 )%   (13.4 )%
Absorption rate per average active selling community per quarter   6.6     3.7     2.9     78.4 %   5.6     5.3     0.3     5.7 %
Average active selling communities   90     76     14     18.4 %   86     66     20     30.3 %
Active selling communities at end of period   95     76     19     25.0 %                
Backlog   $ 346,828     $ 264,275     $ 82,553     31.2 %                
Backlog (units)   786     582     204     35.1 %                
Average sales price of backlog   $ 441.3     $ 454.1     $ (12.8 )   (2.8 )%                

 

    December 31, 2019   December 31, 2018
Lots owned        
Central   4,223     4,447  
Southeast   2,196     1,788  
Total lots owned   6,419     6,235  
Lots controlled        
Central   1,410     853  
Southeast   1,147     990  
Total lots controlled   2,557     1,843  
Total lots owned and controlled (1)   8,976     8,078  
Percentage of lots owned   71.5 %   77.2 %

___________________
(1)Total lots excludes lots with homes under construction.

 

Reconciliation of Non-GAAP Financial Measures

The following table represents the non-GAAP measure of adjusted pre-tax income for the three and twelve months ended December 31, 2019 and 2018, which represents net income attributable to Green Brick for the period, excluding the provision for income taxes attributable to Green Brick and one-time transaction expenses related to a public secondary offering of the Company’s shares in 2018.

    Three Months Ended December 31,   Twelve Months Ended December 31,
(Unaudited, in thousands):   2019   2018   2019   2018
Net income attributable to Green Brick Partners, Inc.   $ 15,920     $ 13,354     $ 58,656     $ 51,623  
Income tax expense attributable to Green Brick Partners, Inc.   4,959     3,754     19,712     16,984  
Transaction expenses               827  
Adjusted pre-tax income attributable to Green Brick Partners, Inc.   $ 20,879     $ 17,108     $ 78,368     $ 69,434  
                                 

The following table represents the non-GAAP measure of adjusted homebuilding gross margin for the three and twelve months ended December 31, 2019 and 2018 and reconciles these amounts to homebuilding gross margin, the most directly comparable GAAP measure.

    Three Months Ended December 31,   Twelve Months Ended December 31,
(Unaudited, in thousands):   2019   2018   2019   2018
Residential units revenue   $ 223,270     $ 171,990     $ 759,830     $ 578,893  
Less: Mechanic’s lien contracts revenue       (2,456 )   (7,557 )   (7,716 )
Home closings revenue   $ 223,270     $ 169,534     $ 752,273     $ 571,177  
Homebuilding gross margin   $ 48,249     $ 40,945     $ 160,952     $ 144,013  
Add back: Capitalized interest charged to cost of revenues   2,333     1,405     7,886     3,987  
Adjusted homebuilding gross margin   $ 50,582     $ 42,350     $ 168,838     $ 148,000  
Adjusted homebuilding gross margin percentage   22.7 %   25.0 %   22.4 %   25.9 %
                         

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 and financial services platforms, please visit https://greenbrickpartners.com/team-builders/.

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,” “forecast,” “intend,” “objective,” “plan,” “predict,” “projection,” “seek,” “strategy,” “target,” “will” or other words of similar meaning. Forward-looking statements in this press release and the earnings call include statements regarding the Company’s (i) strategy for growth, the drivers of that growth, and the impact on the Company’s results, and (ii) expectations regarding community count growth and the timing of that growth. These forward-looking statements involve estimates and assumptions which may be affected by risks and uncertainties in the Company’s 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) adverse impacts from general economic conditions, seasonality, cyclicality and competition in the homebuilding industry; (2) a failure to recruit, retain or develop highly skilled and competent employees; (3) unsuccessful integration or management of acquisitions; (4) shortages of labor or raw materials; (5) an inability to acquire land for reasonable prices; (6) an inability to develop or sell communities; (7) government regulation risks; (8) a lack of availability or volatility of mortgage financing; (9) a severe weather event or natural disasters; (10) difficulty in obtaining sufficient capital; (11) poor relations with community residents; and (12) an increase in our debt levels or related service obligations. For a more detailed discussion of these and other risks and uncertainties applicable to the Company please see the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission.

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

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