GREEN BRICK PARTNERS, INC. REPORTS RECORD THIRD QUARTER 2021 RESULTS 

RECORD HOME CLOSINGS REVENUES OF $338.9 MILLION, UP 28.4%
INCOME BEFORE TAXES OF $65.2 MILLION, UP 41.9%
RECORD BACKLOG OF $1,017.2 MILLION, UP 83.9%
HOME BUILDING GROSS MARGIN UP 210 BPS
RECORD LOTS OWNED AND CONTROLLED UP 101.8%

PLANO, Texas, November 2, 2021 — Green Brick Partners, Inc. (Nasdaq: GRBK) (“we,” “Green Brick” or the “Company”) today reported record results for its third quarter ended September 30, 2021.

“Our third quarter income of $48.5 million was a record for any third quarter,” said Jim Brickman, CEO and Co-Founder. “The average sales price of a home in our backlog is up 20.8% over the prior year and 7.2% over Q2 2021. Despite rising input costs, we believe that our focus on price over pace will continue to sustain our industry-leading margins and strong financial performance.”

“After we saw the huge upward shift in demand in June 2020, our land teams did a fantastic job of quickly pivoting to acquire well located land. As a result, during the last twelve months our lot position grew over 100% to 24,354 owned and controlled lots. With our record $1 billion backlog, leading margins, and superior lot position, Green Brick is extremely well positioned to grow our business in 2022 and beyond. At the end of the third quarter, we now have a record 863 spec homes, up nearly 50% year-over-year, included in our record 2,555 homes under construction. Most of our homes under construction should convert to closings over the next three quarters. The sale and closing of the increased number of spec homes will allow us to capture the most current price increases and to maximize profitability.”

Results for the Quarter Ended September 30, 2021:

For the quarter ended September 30, 2021, our residential units revenue and backlog reflect a record for any quarter since the Company’s inception. Homes under construction and lots owned and controlled also represent a Company record as of the end of any quarter.

(Dollars in thousands, except per share data)

Three Months Ended September 30,

 

 

 

2021

 

2020

 

Increase

New homes delivered

738 

 

 

622 

 

 

18.6 

%

 

 

 

 

 

 

Total revenues

$

342,340 

 

 

$

275,821 

 

 

24.1 

%

Total cost of revenues

251,004 

 

 

207,935 

 

 

20.7 

%

Total gross profit

$

91,336 

 

 

$

67,886 

 

 

34.5 

%

Income before income taxes

$

65,158 

 

 

$

45,923 

 

 

41.9 

%

Net income attributable to Green Brick Partners, Inc.

$

48,507 

 

 

$

34,819 

 

 

39.3 

%

Diluted net income attributable to Green Brick Partners, Inc. per share

$

0.95 

 

 

$

0.68 

 

 

39.7 

%

 

 

 

 

 

 

Residential units revenue

$

338,900 

 

 

$

263,885 

 

 

28.4 

%

Homebuilding gross margin percentage

26.9 

%

 

24.8 

%

 

210 bps

 

 

 

 

 

 

Backlog

$

1,017,220 

 

 

$

553,058 

 

 

83.9 

%

Lots owned and controlled

24,354 

 

 

12,066 

 

 

101.8 

%

Homes under construction

2,555 

 

 

1,361 

 

 

87.7 

%

 

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 third quarter ended September 30, 2021 at 12:00 p.m. Eastern Time on Wednesday, November 3, 2021. 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 13724238. Participants may also join the call via webcast at: greenbrickpartners.com/reporting/. 

A replay of the call will be available from approximately 3:00 p.m. Eastern Time on November 3, 2021 through 11:59 p.m. Eastern Time on December 1, 2021. 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 13724238.

 

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.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2021

 

2020

 

2021

 

2020

Residential units revenue

 

$

338,900 

 

 

$

263,885 

 

 

$

889,636 

 

 

$

683,739 

 

Land and lots revenue

 

3,440 

 

 

11,936 

 

 

60,989 

 

 

38,182 

 

Total revenues

 

342,340 

 

 

275,821 

 

 

950,625 

 

 

721,921 

 

Cost of residential units

 

247,899 

 

 

198,422 

 

 

654,136 

 

 

521,332 

 

Cost of land and lots

 

3,105 

 

 

9,513 

 

 

45,188 

 

 

29,839 

 

Total cost of revenues

 

251,004 

 

 

207,935 

 

 

699,324 

 

 

551,171 

 

Total gross profit

 

91,336 

 

 

67,886 

 

 

251,301 

 

 

170,750 

 

Selling, general and administrative expenses

 

(33,709)

 

 

(29,177)

 

 

(97,182)

 

 

(81,718)

 

Change in fair value of contingent consideration

 

— 

 

 

(210)

 

 

— 

 

 

(210)

 

Equity in income of unconsolidated entities

 

5,555 

 

 

5,299 

 

 

14,039 

 

 

13,038 

 

Other income, net

 

1,976 

 

 

2,125 

 

 

6,239 

 

 

3,004 

 

Income before income taxes

 

65,158 

 

 

45,923 

 

 

174,397 

 

 

104,864 

 

Income tax expense

 

13,898 

 

 

9,969 

 

 

37,093 

 

 

17,357 

 

Net income

 

51,260 

 

 

35,954 

 

 

137,304 

 

 

87,507 

 

Less: Net income attributable to noncontrolling interests

 

2,753 

 

 

1,135 

 

 

10,565 

 

 

3,124 

 

Net income attributable to Green Brick Partners, Inc.

 

$

48,507 

 

 

$

34,819 

 

 

$

126,739 

 

 

$

84,383 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

Basic

 

$

0.96 

 

 

$

0.69 

 

 

$

2.50 

 

 

$

1.67 

 

Diluted

 

$

0.95 

 

 

$

0.68 

 

 

$

2.48 

 

 

$

1.66 

 

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 

 

 

50,689 

 

 

50,552 

 

Diluted

 

51,079 

 

 

50,876 

 

 

51,046 

 

 

50,739 

 

 

GREEN BRICK PARTNERS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)

 

September 30, 2021

 

December 31, 2020

ASSETS

Cash and cash equivalents

$

21,561 

 

 

$

19,479 

 

Restricted cash

31,442 

 

 

14,156 

 

Receivables

7,029 

 

 

5,224 

 

Inventory

1,170,297 

 

 

844,635 

 

Investments in unconsolidated entities

52,735 

 

 

46,443 

 

Right-of-use assets – operating leases

5,023 

 

 

2,538 

 

Property and equipment, net

3,172 

 

 

3,595 

 

Earnest money deposits

26,403 

 

 

22,242 

 

Deferred income tax assets, net

15,376 

 

 

15,376 

 

Intangible assets, net

558 

 

 

622 

 

Goodwill

680 

 

 

680 

 

Other assets

13,040 

 

 

13,857 

 

Total assets

$

1,347,316 

 

 

$

988,847 

 

LIABILITIES AND EQUITY

Liabilities:

 

 

 

Accounts payable

$

48,314 

 

 

$

24,521 

 

Accrued expenses

64,567 

 

 

40,416 

 

Customer and builder deposits

70,079 

 

 

38,131 

 

Lease liabilities – operating leases

5,053 

 

 

2,591 

 

Borrowings on lines of credit, net

122,717 

 

 

106,687 

 

Senior unsecured notes, net

235,737 

 

 

111,056 

 

Notes payable

222 

 

 

2,125 

 

Contingent consideration

— 

 

 

368 

 

Total liabilities

546,689 

 

 

325,895 

 

Commitments and contingencies

 

 

 

Redeemable noncontrolling interest in equity of consolidated subsidiary

17,406 

 

 

13,543 

 

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; 51,151,911 and 51,053,858 issued and 50,759,972 and 50,661,919 outstanding as of September 30, 2021 and December 31, 2020, respectively

511 

 

 

511 

 

Treasury stock, at cost, 391,939 shares

(3,167)

 

 

(3,167)

 

Additional paid-in capital

293,050 

 

 

293,242 

 

Retained earnings

476,395 

 

 

349,656 

 

Total Green Brick Partners, Inc. stockholders’ equity

766,789 

 

 

640,242 

 

Noncontrolling interests

16,432 

 

 

9,167 

 

Total equity

783,221 

 

 

649,409 

 

Total liabilities and equity

$

1,347,316 

 

 

$

988,847 

 

 

GREEN BRICK PARTNERS, INC.

SUPPLEMENTAL INFORMATION

(Unaudited)

Residential Units Revenue and New Homes Delivered

(dollars in thousands)

 

Three Months Ended September 30,

 

 

 

 

 

Nine Months Ended September 30,

 

 

 

 

 

2021

 

2020

 

Change

 

%

 

2021

 

2020

 

Change

 

%

Home closings revenue

 

$

338,075 

 

 

$

262,319 

 

 

$

75,756 

 

 

28.9%

 

$

886,488 

 

 

$

678,352 

 

 

$

208,136 

 

 

30.7 

%

Mechanic’s lien contracts revenue

 

825 

 

 

1,566 

 

 

(741)

 

 

(47.3)%

 

3,148 

 

 

5,387 

 

 

(2,239)

 

 

(41.6)

%

Residential units revenue

 

$

338,900 

 

 

$

263,885 

 

 

$

75,015 

 

 

28.4%

 

$

889,636 

 

 

$

683,739 

 

 

$

205,897 

 

 

30.1 

%

New homes delivered

 

738 

 

 

622 

 

 

116 

 

 

18.6%

 

2,011 

 

 

1,623 

 

 

388 

 

 

23.9 

%

Average sales price of homes delivered

 

$

458.1 

 

 

$

421.7 

 

 

$

36.4 

 

 

8.6%

 

$

440.8 

 

 

$

418.0 

 

 

$

22.8 

 

 

5.5 

%

 

Land and Lots Revenue

(dollars in thousands)

 

Three Months Ended September 30,

 

 

 

 

 

Nine Months Ended September 30,

 

 

 

 

 

2021

 

2020

 

Change

 

%

 

2021

 

2020

 

Change

 

%

Lots revenue

 

$

2,126 

 

 

$

11,936 

 

 

$

(9,810)

 

 

(82.2)%

 

$

15,184 

 

 

$

37,798 

 

 

$

(22,614)

 

 

(59.8)

%

Land revenue

 

1,314 

 

 

— 

 

 

1,314 

 

 

100.0%

 

45,805 

 

 

384 

 

 

45,421 

 

 

11,828.4 

%

Land and lots revenue

 

$

3,440 

 

 

$

11,936 

 

 

$

(8,496)

 

 

(71.2)%

 

$

60,989 

 

 

$

38,182 

 

 

$

22,807 

 

 

59.7 

%

Lots closed

 

31

 

138

 

(107)

 

 

(77.5)%

 

173 

 

 

302 

 

 

(129)

 

 

(42.7)

%

Average sales price of lots closed

 

$

68.6 

 

 

$

86.5 

 

 

$

(17.9)

 

 

(20.7)%

 

$

87.8 

 

 

$

125.2 

 

 

$

(37.4)

 

 

(29.9)

%

 

New Home Orders and Backlog

(dollars in thousands)

 

Three Months Ended September 30,

 

 

 

 

 

Nine Months Ended September 30,

 

 

 

 

 

2021

 

2020

 

Change

 

%

 

2021

 

2020

 

Change

 

%

Net new home orders

 

689 

 

 

823 

 

 

(134)

 

 

(16.3)%

 

2,375 

 

 

2,037 

 

 

338 

 

 

16.6 

%

Cancellation rate

 

6.9 

%

 

11.7 

%

 

(4.8)

%

 

(41.0)%

 

6.7 

%

 

14.7 

%

 

(8.0)

%

 

(54.4)

%

Absorption rate per average active selling community per quarter

 

8.2 

 

 

8.7 

 

 

(0.5)

 

 

(5.7)%

 

8.8 

 

 

6.9 

 

 

1.9 

 

 

27.5 

%

Average active selling communities

 

84 

 

 

95 

 

 

(11)

 

 

(11.6)%

 

90 

 

 

98 

 

 

(8)

 

 

(8.2)

%

Active selling communities at end of period

 

80 

 

 

100 

 

 

(20)

 

 

(20.0)%

 

 

 

 

 

 

 

 

Backlog

 

$

1,017,220 

 

 

$

553,058 

 

 

$

464,162 

 

 

83.9%

 

 

 

 

 

 

 

 

Backlog (units)

 

1,827 

 

 

1200 

 

 

627 

 

 

52.3%

 

 

 

 

 

 

 

 

Average sales price of backlog

 

$

556.8 

 

 

$

460.9 

 

 

$

95.9 

 

 

20.8%

 

 

 

 

 

 

 

 

 

  

 

September 30, 2021

 

December 31, 2020

Lots owned (1)

 

 

 

 

Central

 

14,917 

 

 

6,823 

 

Southeast

 

2,212 

 

 

2,097 

 

Total lots owned

 

17,129 

 

 

8,920 

 

Lots controlled (1)

 

 

 

 

Central

 

6,440 

 

 

4,398 

 

Southeast

 

785 

 

 

1,150 

 

Total lots controlled

 

7,225 

 

 

5,548 

 

Total lots owned and controlled (1)

 

24,354 

 

 

14,468 

 

Percentage of lots owned

 

70.3 

%

 

61.7 

%

 

 

  • 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 September 30, 2021 and December 31, 2020.

 

September 30, 2021

 

December 31, 2020

Total lots owned

17,129 

 

 

8,920 

 

Add certain lots included in Total Lots Controlled

 

 

 

Land under option for future acquisition and development

2,577 

 

 

740 

 

Lots under option through unconsolidated development joint ventures

1,903 

 

 

1,838 

 

Total lots self-developed

21,609 

 

 

11,498 

 

Self-developed lots as a percentage of total lots owned and controlled

88.7 

%

 

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 nine months ended September 30, 2021 and 2020 and reconciles these amounts to homebuilding gross margin, the most directly comparable GAAP measure.

(Unaudited, in thousands):

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2021

 

2020

 

2021

 

2020

Residential units revenue

 

$

338,900 

 

 

$

263,885 

 

 

$

889,636 

 

 

$

683,739 

 

Less: Mechanic’s lien contracts revenue

 

(825)

 

 

(1,566)

 

 

(3,148)

 

 

(5,387)

 

Home closings revenue

 

$

338,075 

 

 

$

262,319 

 

 

$

886,488 

 

 

$

678,352 

 

Homebuilding gross margin

 

$

90,875 

 

 

$

65,184 

 

 

$

234,834 

 

 

$

161,450 

 

Homebuilding gross margin percentage

 

26.9 

%

 

24.8 

%

 

26.5 

%

 

23.8 

%

 

 

 

 

 

 

 

 

 

Homebuilding gross margin

 

90,875 

 

 

65,184 

 

 

234,834 

 

 

161,450 

 

Add back: Capitalized interest charged to cost of revenues

 

2,569 

 

 

2,914 

 

 

6,915 

 

 

7,802 

 

Adjusted homebuilding gross margin

 

$

93,444 

 

 

$

68,098 

 

 

$

241,749 

 

 

$

169,252 

 

Adjusted homebuilding gross margin percentage

 

27.6 

%

 

26.0 

%

 

27.3 

%

 

25.0 

%

 

The following table presents the pre-tax income for the three and nine months ended September 30, 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 September 30,

 

Nine Months Ended September 30,

 

2021

 

2020

 

2021

 

2020

Net income attributable to Green Brick Partners, Inc.

 

$

48,507 

 

 

$

34,819 

 

 

$

126,739 

 

 

$

84,383 

 

Income tax expense attributable to Green Brick Partners, Inc.

 

13,896 

 

 

9,968 

 

 

37,089 

 

 

17,354 

 

Pre-tax income attributable to Green Brick Partners, Inc.

 

$

62,403 

 

 

$

44,787 

 

 

$

163,828 

 

 

$

101,737 

 

 

About Green Brick Partners, Inc.

Green Brick Partners, Inc. is a diversified homebuilding and land development company. Green Brick owns five subsidiary homebuilders in Dallas, 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 over the remainder of 2021 and 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

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