GRBK - Green Brick Partners Inc. Reports First Quarter Results
33.3% INCREASE IN RESIDENTIAL UNITS REVENUE
35.8% INCREASE IN BACKLOG DOLLARS
13.6% EARNINGS PER SHARE INCREASE
PLANO, Texas, May 02, 2019 (GLOBE NEWSWIRE) -- Green Brick Partners, Inc. (Nasdaq: GRBK) (“we,” “Green Brick” or the “Company”) today reported results for its first quarter ended March 31, 2019.
Results for the First Quarter Ended March 31, 2019:
- Basic net income attributable to Green Brick per common share (“EPS”) for the three months ended March 31, 2019 was $0.25, an increase of 13.6%, compared to $0.22 for the three months ended March 31, 2018.
- For the three months ended March 31, 2019, net income attributable to Green Brick was $12.6 million, an increase of 12.5%, compared to $11.2 million for the three months ended March 31, 2018; gross profit was $35.4 million, an increase of 8.4%, compared to $32.6 million for the three months ended March 31, 2018; and total revenue was $168.6 million, an increase of 30.6%, compared to $129.2 million for the three months ended March 31, 2018.
- Residential units revenue for the three months ended March 31, 2019 was $161.6 million, an increase of 33.3%, compared to $121.3 million for the three months ended March 31, 2018. Land and lots revenue for the three months ended March 31, 2019 was $7.0 million, a decrease of 10.9%, compared to $7.9 million for the three months ended March 31, 2018.
- The dollar value of backlog units as of March 31, 2019 was $307.5 million, an increase of 35.8% compared to $226.5 million as of March 31, 2018.
- Average active selling communities increased from 55 communities as of March 31, 2018 to 78 communities as of March 31, 2019, an increase of 41.8%.
- Homes under construction increased 53.9% to 1,170 as of March 31, 2019, compared to 760 as of March 31, 2018.
“I am pleased that we had the best first quarter performance in our company’s history, with a 33.3% increase in home building revenues, record first quarter home closings, and $12.6 million net income attributable to Green Brick, up 12.5% year over year. Though the competitive market pressured margins, our business model demonstrated its strength, as we are growing through a tougher market. We are on track to achieve moderate pre-tax income growth in 2019 while still maintaining one of the most solid balance sheets in the industry. Finally, our newest homebuilder brand, Trophy Signature Homes, is off to a great start and we expect continued momentum into the second half of 2019”, said Jim Brickman, CEO of Green Brick Partners, Inc.
Earnings Conference Call:
We will host our earnings conference call to discuss our first quarter ended March 31, 2019 at 12:00 p.m. Eastern Time on Friday, May 3, 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 2132679. A replay of the call will be available from approximately 3:30 p.m. Eastern Time on May 3, 2019 through 11:59 p.m. Eastern Time on May 10, 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 2132679.
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.
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 readily 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 homebuilding gross margin was 20.8% for the three months ended March 31, 2019. Sales commission expenses represented 4.0% of the residential units revenue for the three months ended March 31, 2019.
GREEN BRICK PARTNERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
| Three Months Ended March 31, |
| 2019 |
| 2018 |
| Residential units revenue |
| $ |
| 161,588 |
| $ |
| 121,264 |
| Land and lots revenue |
| 7,040 |
| 7,899 |
| Total revenues |
| 168,628 |
| 129,163 |
| Cost of residential units |
| 127,828 |
| 89,903 |
| Cost of land and lots |
| 5,434 |
| 6,626 |
| Total cost of revenues |
| 133,262 |
| 96,529 |
| Total gross profit |
| 35,366 |
| 32,634 |
| Selling, general and administrative expense |
| 23,532 |
| 18,129 |
| Change in fair value of contingent consideration |
| 454 |
| — |
| Operating profit |
| 11,380 |
| 14,505 |
| Equity in income of unconsolidated entities |
| 1,846 |
| 1,536 |
| Other income, net |
| 2,093 |
| 570 |
| Income before income taxes |
| 15,319 |
| 16,611 |
| Income tax expense |
| 3,828 |
| 3,372 |
| Net income |
| 11,491 |
| 13,239 |
| Less: Net (loss) income attributable to noncontrolling interests |
| (1,114 |
| ) |
| 2,036 |
| Net income attributable to Green Brick Partners, Inc. |
| $ |
| 12,605 |
| $ |
| 11,203 |
| Net income attributable to Green Brick Partners, Inc. per common share: |
| Basic |
| $ |
| 0.25 |
| $ |
| 0.22 |
| Diluted |
| $ |
| 0.25 |
| $ |
| 0.22 |
| Weighted average common shares used in the calculation of net income attributable to Green Brick Partners, Inc. per common share: |
| Basic |
| 50,563 |
| 50,577 |
| Diluted |
| 50,605 |
| 50,718 |
GREEN BRICK PARTNERS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
| March 31, 2019 |
| December 31, 2018 |
| ASSETS |
| Cash |
| $ |
| 23,873 |
| $ |
| 38,315 |
| Restricted cash |
| 2,741 |
| 3,440 |
| Receivables |
| 2,774 |
| 4,842 |
| Inventory |
| 690,817 |
| 668,961 |
| Investment in unconsolidated entities |
| 21,843 |
| 20,269 |
| Right-of-use assets - operating leases |
| 3,877 |
| — |
| Property and equipment, net |
| 4,464 |
| 4,690 |
| Earnest money deposits |
| 13,474 |
| 16,793 |
| Deferred income tax assets, net |
| 17,454 |
| 16,499 |
| Intangible assets, net |
| 765 |
| 856 |
| Goodwill |
| 680 |
| 680 |
| Other assets |
| 10,258 |
| 8,681 |
| Total assets |
| $ |
| 793,020 |
| $ |
| 784,026 |
| LIABILITIES AND EQUITY |
| Liabilities: |
| Accounts payable |
| $ |
| 21,640 |
| $ |
| 26,091 |
| Accrued expenses |
| 31,914 |
| 29,201 |
| Customer and builder deposits |
| 30,335 |
| 31,978 |
| Lease liabilities - operating leases |
| 3,996 |
| — |
| Borrowings on lines of credit, net |
| 206,522 |
| 200,386 |
| Contingent consideration |
| 2,661 |
| 2,207 |
| Total liabilities |
| 297,068 |
| 289,863 |
| Commitments and contingencies |
| Redeemable noncontrolling interest in equity of consolidated subsidiary |
| 10,295 |
| 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; 50,820,548 and 50,719,884 issued and 50,675,930 and 50,583,128 outstanding as of March 31, 2019 and December 31, 2018, respectively |
| 508 |
| 507 |
| Treasury stock at cost, 144,618 and 136,756 shares as of March 31, 2019 and December 31, 2018, respectively |
| (1,041 |
| ) |
| (981 |
| ) |
| Additional paid-in capital |
| 291,271 |
| 291,299 |
| Retained earnings |
| 190,131 |
| 177,526 |
| Total Green Brick Partners, Inc. stockholders’ equity |
| 480,869 |
| 468,351 |
| Noncontrolling interests |
| 4,788 |
| 17,281 |
| Total equity |
| 485,657 |
| 485,632 |
| Total liabilities and equity |
| $ |
| 793,020 |
| $ |
| 784,026 |
GREEN BRICK PARTNERS, INC.
SUPPLEMENTAL INFORMATION
(Unaudited)
| Residential Units Sales Revenue and New Homes Delivered |
| Three Months Ended March 31, |
| 2019 |
| 2018 |
| Change |
| % |
| Home closings revenue (dollars in thousands) |
| $ |
| 159,233 |
| $ |
| 120,366 |
| $ |
| 38,867 |
| 32.3 |
| % |
| Mechanic’s lien contracts revenue (dollars in thousands) |
| 2,355 |
| 898 |
| 1,457 |
| 162.2 |
| % |
| Residential units revenue (dollars in thousands) |
| $ |
| 161,588 |
| $ |
| 121,264 |
| $ |
| 40,324 |
| 33.3 |
| % |
| New homes delivered |
| 368 |
| 267 |
| 101 |
| 37.8 |
| % |
| Average sales price of homes delivered |
| $ |
| 432,698 |
| $ |
| 450,809 |
| $ |
| (18,111 |
| ) |
| (4.0 |
| )% |
| Land and Lots Sales Revenue |
| Three Months Ended March 31, |
| 2019 |
| 2018 |
| Change |
| % |
| Lots revenue (dollars in thousands) |
| $ |
| 7,030 |
| $ |
| 6,749 |
| $ |
| 281 |
| 4.2 |
| % |
| Land revenue (dollars in thousands) |
| 10 |
| 1,150 |
| (1,140 |
| ) |
| (99.1 |
| )% |
| Land and lots revenue (dollars in thousands) |
| $ |
| 7,040 |
| $ |
| 7,899 |
| $ |
| (859 |
| ) |
| (10.9 |
| )% |
| Lots closed |
| 47 |
| 48 |
| (1 |
| ) |
| (2.1 |
| )% |
| Average sales price of lots closed |
| $ |
| 149,574 |
| $ |
| 140,604 |
| $ |
| 8,970 |
| 6.4 |
| % |
| New Home Orders and Backlog |
| Three Months Ended March 31, |
| 2019 |
| 2018 |
| Change |
| % |
| Net new home orders |
| 444 |
| 434 |
| 10 |
| 2.3 |
| % |
| Cancellation rate |
| 15.4 |
| % |
| 10.3 |
| % |
| 5.1 |
| % |
| 49.5 |
| % |
| Absorption rate per active selling community |
| 5.7 |
| 7.9 |
| (2.2 |
| ) |
| (27.8 |
| )% |
| Average active selling communities |
| 78 |
| 55 |
| 23 |
| 41.8 |
| % |
| Active selling communities at end of period |
| 79 |
| 54 |
| 25 |
| 46.3 |
| % |
| Backlog (dollars in thousands) |
| $ |
| 307,548 |
| $ |
| 226,516 |
| $ |
| 81,032 |
| 35.8 |
| % |
| Backlog (units) |
| 658 |
| 477 |
| 181 |
| 37.9 |
| % |
| Average sales price of backlog |
| $ |
| 467,398 |
| $ |
| 474,876 |
| $ |
| (7,478 |
| ) |
| (1.6 |
| )% |
| March 31, 2019 |
| December 31, 2018 |
| Lots owned |
| Central |
| 4,381 |
| 4,447 |
| Southeast |
| 1,805 |
| 1,788 |
| Total lots owned |
| 6,186 |
| 6,235 |
| Lots controlled |
| Central |
| 1,455 |
| 853 |
| Southeast |
| 853 |
| 990 |
| Total lots controlled |
| 2,308 |
| 1,843 |
| Total lots owned and controlled (1) |
| 8,494 |
| 8,078 |
| Percentage of lots owned |
| 72.8 |
| % |
| 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 homebuilding gross margin for the three months ended March 31, 2019 and 2018 and reconciles these amounts to homebuilding gross margin, the most directly comparable GAAP measure.
| Three Months Ended March 31, |
| (Unaudited, in thousands): |
| 2019 |
| 2018 |
| Residential units revenue |
| 161,588 |
| 121,264 |
| Less: Mechanic’s lien contracts revenue |
| (2,355 |
| ) |
| (898 |
| ) |
| Home closings revenue |
| $ |
| 159,233 |
| $ |
| 120,366 |
| Homebuilding gross margin |
| $ |
| 33,150 |
| $ |
| 31,223 |
| Add back: Capitalized interest charged to cost of revenues |
| 1,007 |
| 759 |
| Adjusted homebuilding gross margin |
| $ |
| 34,157 |
| $ |
| 31,982 |
| Adjusted homebuilding gross margin percentage |
| 21.5 |
| % |
| 26.6 |
| % |
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:
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
A PDF is available at http://ml.globenewswire.com/Resource/Download/36ada201-0d8a-49a0-b9cc-d9f92ccd0662