GRBK - Green Brick Partners Inc. Reports Record Second Quarter 2022 Results
RECORD HOME CLOSINGS REVENUE OF $510.5 MILLION, UP 53.6%
RECORD INCOME BEFORE TAXES OF $138.3 MILLION, UP 86.9%
HOME BUILDING GROSS MARGIN UP 550 BPS TO 32.3%
RECORD DILUTED EPS OF $2.08, UP 103.9%
PLANO, Texas, Aug. 03, 2022 (GLOBE NEWSWIRE) -- Green Brick Partners, Inc. (NYSE: GRBK) (“we,” “Green Brick” or the “Company”) today reported record results for its second quarter ended June 30, 2022.
“We are pleased to report another outstanding quarter highlighted by record EPS of $2.08 per diluted share, which was up 73.3% sequentially over the first quarter of 2022 on a 33.4% sequential growth in total revenues. During the second quarter, we delivered a record number of homes and achieved a record high home building gross margin of 32.3%, which was up 450 basis points sequentially,” said Jim Brickman, CEO and Co-Founder. “Year-to-date, we were able to generate annualized returns on equity of 37.4%. Additionally, to further enhance shareholder value, we repurchased another 3.7 million shares of Green Brick common stock for $75.7 million during the second quarter and third quarter through July 29, 2022. Year-to-date through July 29, 2022, we have repurchased a total of $101.5 million of common stock at an average price under $21 per share, representing 9.5% of total shares outstanding as of the end of 2021.”
“We believe that Green Brick is strategically positioned to navigate well within the evolving environment. We operate in some of the best markets in the United States. Within those markets, over 80% of our revenue year-to-date is generated from more supply constrained in-fill submarkets that we believe are more insulated from competition and more resilient during economic downturns,” continued Mr. Brickman. “Additionally, despite purchasing 9.5% of our outstanding shares, we have one of the lowest leverage ratios among our peers with a debt to total capital ratio of 28.9% as of June 30, 2022, where almost all of outstanding debt is fixed interest rate long term with an attractive weighted average interest rate of 3.4%. We believe that we have a superior lot and land position to support future growth that also provides us with the ability to be defensive and offensive in a changing environment. Green Brick has a track record of generating one of the best returns on equity in the homebuilding industry and we will continue to devote efforts to initiatives that are accretive to our shareholders.”
Results for the Quarter Ended June 30, 2022:
For the quarter ended June 30, 2022, 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 June 30, |
| 2022 |
| 2021 |
| Change |
| New homes delivered |
| 881 |
| 757 |
| 16.4 |
| % |
| Total revenues |
| $ |
| 525,144 |
| $ |
| 373,806 |
| 40.5 |
| % |
| Total cost of revenues |
| 356,248 |
| 272,830 |
| 30.6 |
| % |
| Total gross profit |
| $ |
| 168,896 |
| $ |
| 100,976 |
| 67.3 |
| % |
| Income before income taxes |
| $ |
| 138,282 |
| $ |
| 73,977 |
| 86.9 |
| % |
| Net income attributable to Green Brick Partners, Inc. |
| $ |
| 101,256 |
| $ |
| 52,263 |
| 93.7 |
| % |
| Diluted net income attributable to Green Brick Partners, Inc. per common share |
| $ |
| 2.08 |
| $ |
| 1.02 |
| 103.9 |
| % |
| Residential units revenue |
| $ |
| 512,515 |
| $ |
| 333,500 |
| 53.7 |
| % |
| Average sales price of homes delivered |
| $ |
| 579.5 |
| $ |
| 438.9 |
| 32.0 |
| % |
| Homebuilding gross margin percentage |
| 32.3 |
| % |
| 26.8 |
| % |
| 550 bps |
| Selling, general and administrative expenses as a percentage of residential units revenue |
| 8.2 |
| % |
| 10.2 |
| % |
| -200 bps |
| Backlog |
| $ |
| 710,199 |
| $ |
| 974,349 |
| $ |
| (264,150 |
| ) |
| Homes under construction |
| 2,436 |
| 2,486 |
| (2.0 |
| )% |
Results for the Six Months Ended June 30, 2022:
| (Dollars in thousands, except per share data) |
| Six Months Ended June 30, |
| 2022 |
| 2021 |
| Change |
| New homes delivered |
| 1,539 |
| 1,273 |
| 20.9 |
| % |
| Total revenues |
| $ |
| 918,760 |
| $ |
| 608,285 |
| 51.0 |
| % |
| Total cost of revenues |
| 641,508 |
| 448,320 |
| 43.1 |
| % |
| Total gross profit |
| $ |
| 277,252 |
| $ |
| 159,965 |
| 73.3 |
| % |
| Income before income taxes |
| $ |
| 220,915 |
| $ |
| 109,239 |
| 102.2 |
| % |
| Net income attributable to Green Brick Partners, Inc. |
| $ |
| 162,833 |
| $ |
| 78,232 |
| 108.1 |
| % |
| Diluted net income attributable to Green Brick Partners, Inc. per common share |
| $ |
| 3.25 |
| $ |
| 1.53 |
| 112.4 |
| % |
| Residential units revenue |
| $ |
| 877,176 |
| $ |
| 550,736 |
| 59.3 |
| % |
| Average sales price of homes delivered |
| $ |
| 567.6 |
| $ |
| 430.8 |
| 31.8 |
| % |
| Homebuilding gross margin percentage |
| 30.5 |
| % |
| 26.3 |
| % |
| 420 bps |
| Selling, general and administrative expenses as a percentage of residential units revenue |
| 8.7 |
| % |
| 11.5 |
| % |
| -280 bps |
Earnings Conference Call:
We will host our earnings conference call to discuss our second quarter ended June 30, 2022 at 12:00 p.m. Eastern Time on Thursday, August 4, 2022. The call can be accessed by dialing 1-888-660-6353 for domestic participants or 1-929-203-2106 for international participants and should reference meeting number 3162560. Participants may also join the call via webcast at: https://events.q4inc.com/attendee/871633067
A telephone replay of the call will be available through September 4, 2022. To access the telephone replay, the domestic dial-in number is 1-800-770-2030, the international dial-in number is 1-647-362-9199 and the access code is 3162560, or by using the link at investors.greenbrickpartners.com.
| GREEN BRICK PARTNERS, INC. CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) (Unaudited) |
| Three Months Ended June 30, |
| Six Months Ended June 30, |
| 2022 |
| 2021 |
| 2022 |
| 2021 |
| Residential units revenue |
| $ |
| 512,515 |
| $ |
| 333,500 |
| $ |
| 877,176 |
| $ |
| 550,736 |
| Land and lots revenue |
| 12,629 |
| 40,306 |
| 41,584 |
| 57,549 |
| Total revenues |
| 525,144 |
| 373,806 |
| 918,760 |
| 608,285 |
| Cost of residential units |
| 347,142 |
| 244,165 |
| 610,572 |
| 406,237 |
| Cost of land and lots |
| 9,106 |
| 28,665 |
| 30,936 |
| 42,083 |
| Total cost of revenues |
| 356,248 |
| 272,830 |
| 641,508 |
| 448,320 |
| Total gross profit |
| 168,896 |
| 100,976 |
| 277,252 |
| 159,965 |
| Selling, general and administrative expenses |
| (41,798 |
| ) |
| (33,985 |
| ) |
| (76,063 |
| ) |
| (63,473 |
| ) |
| Equity in income of unconsolidated entities |
| 8,523 |
| 4,593 |
| 14,210 |
| 8,484 |
| Other income, net |
| 2,661 |
| 2,393 |
| 5,516 |
| 4,263 |
| Income before income taxes |
| 138,282 |
| 73,977 |
| 220,915 |
| 109,239 |
| Income tax expense |
| 30,278 |
| 15,694 |
| 48,715 |
| 23,195 |
| Net income |
| 108,004 |
| 58,283 |
| 172,200 |
| 86,044 |
| Less: Net income attributable to noncontrolling interests |
| 6,748 |
| 6,020 |
| 9,367 |
| 7,812 |
| Net income attributable to Green Brick Partners, Inc. |
| $ |
| 101,256 |
| $ |
| 52,263 |
| $ |
| 162,833 |
| $ |
| 78,232 |
| Net income attributable to Green Brick Partners, Inc. per common share: |
| Basic |
| $ |
| 2.09 |
| $ |
| 1.03 |
| $ |
| 3.27 |
| $ |
| 1.54 |
| Diluted |
| $ |
| 2.08 |
| $ |
| 1.02 |
| $ |
| 3.25 |
| $ |
| 1.53 |
| Weighted average common shares used in the calculation of net income attributable to Green Brick Partners, Inc. per common share: |
| Basic |
| 48,046 |
| 50,701 |
| 49,309 |
| 50,667 |
| Diluted |
| 48,384 |
| 51,064 |
| 49,639 |
| 51,029 |
| GREEN BRICK PARTNERS, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except share data) (Unaudited) |
| June 30, 2022 |
| December 31, 2021 |
| ASSETS |
| Cash and cash equivalents |
| $ |
| 66,765 |
| $ |
| 77,166 |
| Restricted cash |
| 22,889 |
| 16,388 |
| Receivables |
| 6,828 |
| 6,871 |
| Inventory |
| 1,369,200 |
| 1,203,743 |
| Investments in unconsolidated entities |
| 64,077 |
| 55,616 |
| Right-of-use assets - operating leases |
| 4,213 |
| 4,596 |
| Property and equipment, net |
| 2,761 |
| 2,812 |
| Earnest money deposits |
| 24,702 |
| 26,008 |
| Deferred income tax assets, net |
| 15,741 |
| 15,741 |
| Intangible assets, net |
| 494 |
| 537 |
| Goodwill |
| 680 |
| 680 |
| Other assets |
| 9,924 |
| 11,709 |
| Total assets |
| $ |
| 1,588,274 |
| $ |
| 1,421,867 |
| LIABILITIES AND EQUITY |
| Liabilities: |
| Accounts payable |
| $ |
| 60,229 |
| $ |
| 45,682 |
| Accrued expenses |
| 95,615 |
| 61,351 |
| Customer and builder deposits |
| 57,624 |
| 64,610 |
| Lease liabilities - operating leases |
| 4,362 |
| 4,745 |
| Borrowings on lines of credit, net |
| 34,662 |
| (738 |
| ) |
| Senior unsecured notes, net |
| 335,633 |
| 335,446 |
| Notes payable |
| 14,653 |
| 210 |
| Total liabilities |
| 602,778 |
| 511,306 |
| Commitments and contingencies |
| Redeemable noncontrolling interest in equity of consolidated subsidiary |
| 22,001 |
| 21,867 |
| Equity: |
| Green Brick Partners, Inc. stockholders’ equity |
| Preferred stock, $0.01 par value: 5,000,000 shares authorized; 2,000 issued and outstanding as of June 30, 2022 and December 31, 2021, respectively |
| 47,696 |
| 47,696 |
| Common stock, $0.01 par value: 100,000,000 shares authorized; 51,275,158 and 51,151,911 issued and 46,471,006 and 50,759,972 outstanding as of June 30, 2022 and December 31, 2021, respectively |
| 513 |
| 512 |
| Treasury stock, at cost, 4,804,152 and 391,939 shares as of June 30, 2022 and December 31, 2021, respectively |
| (95,479 |
| ) |
| (3,167 |
| ) |
| Additional paid-in capital |
| 293,336 |
| 289,641 |
| Retained earnings |
| 701,325 |
| 539,866 |
| Total Green Brick Partners, Inc. stockholders’ equity |
| 947,391 |
| 874,548 |
| Noncontrolling interests |
| 16,104 |
| 14,146 |
| Total equity |
| 963,495 |
| 888,694 |
| Total liabilities and equity |
| $ |
| 1,588,274 |
| $ |
| 1,421,867 |
GREEN BRICK PARTNERS, INC.
SUPPLEMENTAL INFORMATION
(Unaudited)
| Residential Units Revenue and New Homes Delivered (dollars in thousands) |
| Three Months Ended June 30, |
| Six Months Ended June 30, |
| 2022 |
| 2021 |
| Change |
| % |
| 2022 |
| 2021 |
| Change |
| % |
| Home closings revenue |
| $ |
| 510,535 |
| $ |
| 332,279 |
| $ |
| 178,256 |
| 53.6 |
| % |
| $ |
| 873,598 |
| $ |
| 548,413 |
| $ |
| 325,185 |
| 59.3 |
| % |
| Mechanic’s lien contracts revenue |
| 1,980 |
| 1,221 |
| 759 |
| 62.2 |
| % |
| 3,578 |
| 2,323 |
| 1,255 |
| 54.0 |
| % |
| Residential units revenue |
| $ |
| 512,515 |
| $ |
| 333,500 |
| $ |
| 179,015 |
| 53.7 |
| % |
| $ |
| 877,176 |
| $ |
| 550,736 |
| $ |
| 326,440 |
| 59.3 |
| % |
| New homes delivered |
| 881 |
| 757 |
| 124 |
| 16.4 |
| % |
| 1,539 |
| 1,273 |
| 266 |
| 20.9 |
| % |
| Average sales price of homes delivered |
| $ |
| 579.5 |
| $ |
| 438.9 |
| $ |
| 140.6 |
| 32.0 |
| % |
| $ |
| 567.6 |
| $ |
| 430.8 |
| $ |
| 136.8 |
| 31.8 |
| % |
| Land and Lots Revenue (dollars in thousands) |
| Three Months Ended June 30, |
| Six Months Ended June 30, |
| 2022 |
| 2021 |
| Change |
| % |
| 2022 |
| 2021 |
| Change |
| % |
| Lots revenue |
| $ |
| 12,081 |
| $ |
| 4,615 |
| $ |
| 7,466 |
| 161.8 |
| % |
| $ |
| 14,036 |
| $ |
| 13,058 |
| $ |
| 978 |
| 7.5 |
| % |
| Land revenue |
| 548 |
| 35,691 |
| (35,143 |
| ) |
| (98.5 |
| )% |
| 27,548 |
| 44,491 |
| (16,943 |
| ) |
| (38.1 |
| )% |
| Land and lots revenue |
| $ |
| 12,629 |
| $ |
| 40,306 |
| $ |
| (27,677 |
| ) |
| (68.7 |
| )% |
| $ |
| 41,584 |
| $ |
| 57,549 |
| $ |
| (15,965 |
| ) |
| (27.7 |
| )% |
| Lots closed |
| 184 |
| 63 |
| 121 |
| 192.1 |
| % |
| 217 |
| 142 |
| 75 |
| 52.8 |
| % |
| Average sales price of lots closed |
| $ |
| 65.7 |
| $ |
| 73.3 |
| $ |
| (7.6 |
| ) |
| (10.4 |
| )% |
| $ |
| 64.7 |
| $ |
| 92.0 |
| $ |
| (27.3 |
| ) |
| (29.7 |
| )% |
| New Home Orders and Backlog (dollars in thousands) |
| Three Months Ended June 30, |
| Six Months Ended June 30, |
| 2022 |
| 2021 |
| Change |
| % |
| 2022 |
| 2021 |
| Change |
| % |
| Net new home orders |
| 545 |
| 604 |
| (59 |
| ) |
| (9.8 |
| )% |
| 1,146 |
| 1,686 |
| (540 |
| ) |
| (32.0 |
| )% |
| Cancellation rate |
| 11.4 |
| % |
| 7.6 |
| % |
| 3.8 |
| % |
| 50.0 |
| % |
| 9.6 |
| % |
| 6.6 |
| % |
| 3.0 |
| % |
| 45.5 |
| % |
| Absorption rate per average active selling community per quarter |
| 7.1 |
| 6.8 |
| 0.3 |
| 4.4 |
| % |
| 7.5 |
| 9.1 |
| (1.6 |
| ) |
| (17.6 |
| )% |
| Average active selling communities |
| 77 |
| 89 |
| (12 |
| ) |
| (13.5 |
| )% |
| 76 |
| 93 |
| (17 |
| ) |
| (18.3 |
| )% |
| Active selling communities at end of period |
| 78 |
| 87 |
| (9 |
| ) |
| (10.3 |
| )% |
| Backlog |
| $ |
| 710,199 |
| $ |
| 974,349 |
| $ |
| (264,150 |
| ) |
| (27.1 |
| )% |
| Backlog (units) |
| 1,087 |
| 1,876 |
| (789 |
| ) |
| (42.1 |
| )% |
| Average sales price of backlog |
| $ |
| 653.4 |
| $ |
| 519.4 |
| $ |
| 134.0 |
| 25.8 |
| % |
| June 30, 2022 |
| December 31, 2021 |
| Lots owned (1) |
| Central |
| 19,043 |
| 17,767 |
| Southeast |
| 2,742 |
| 2,472 |
| Total lots owned |
| 21,785 |
| 20,239 |
| Lots controlled (1) |
| Central |
| 3,687 |
| 7,321 |
| Southeast |
| 616 |
| 1,061 |
| Total lots controlled |
| 4,303 |
| 8,382 |
| Total lots owned and controlled (1) |
| 26,088 |
| 28,621 |
| Percentage of lots owned |
| 83.5 |
| % |
| 70.7 |
| % |
_________________
(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 June 30, 2022 and December 31, 2021.
| June 30, 2022 |
| December 31, 2021 |
| Total lots owned |
| 21,785 |
| 20,239 |
| Add certain lots included in Total Lots Controlled |
| Land under option for future acquisition and development |
| 289 |
| 3,826 |
| Lots under option through unconsolidated development joint ventures |
| 1,714 |
| 1,816 |
| Total lots self-developed |
| 23,788 |
| 25,881 |
| Self-developed lots as a percentage of total lots owned and controlled |
| 91.2 |
| % |
| 90.4 |
| % |
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 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.
The following table represents the non-GAAP measure of adjusted homebuilding gross margin for the three and six months ended June 30, 2022 and 2021 and reconciles these amounts to homebuilding gross margin, the most directly comparable GAAP measure.
| (Unaudited, in thousands): |
| Three Months Ended June 30, |
| Six Months Ended June 30, |
| 2022 |
| 2021 |
| 2022 |
| 2021 |
| Residential units revenue |
| $ |
| 512,515 |
| $ |
| 333,500 |
| $ |
| 877,176 |
| $ |
| 550,736 |
| Less: Mechanic’s lien contracts revenue |
| (1,980 |
| ) |
| (1,221 |
| ) |
| (3,578 |
| ) |
| (2,323 |
| ) |
| Home closings revenue |
| $ |
| 510,535 |
| $ |
| 332,279 |
| $ |
| 873,598 |
| $ |
| 548,413 |
| Homebuilding gross margin |
| $ |
| 165,106 |
| $ |
| 89,055 |
| $ |
| 266,079 |
| $ |
| 143,959 |
| Homebuilding gross margin percentage |
| 32.3 |
| % |
| 26.8 |
| % |
| 30.5 |
| % |
| 26.3 |
| % |
| Homebuilding gross margin |
| 165,106 |
| 89,055 |
| 266,079 |
| 143,959 |
| Add back: Capitalized interest charged to cost of revenues |
| 4,337 |
| 2,533 |
| 7,198 |
| 4,346 |
| Adjusted homebuilding gross margin |
| $ |
| 169,443 |
| $ |
| 91,588 |
| $ |
| 273,277 |
| $ |
| 148,305 |
| Adjusted homebuilding gross margin percentage |
| 33.2 |
| % |
| 27.6 |
| % |
| 31.3 |
| % |
| 27.0 |
| % |
About Green Brick Partners, Inc.
Green Brick Partners, Inc. is a diversified homebuilding and land development company operating through eight homebuilder brands in major markets in Texas, the Southeast and Colorado. 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 and in our earnings call include statements regarding (i) our position to adapt and succeed in a rapidly changing environment; (ii) our expectations regarding trends in our markets, such as demand for single-family homes, stability of the built-to-rent sector, and buyer quality levels; (iii) the ability to mitigate future inventory buildup, including through reductions in single-family starts; (iv) expected closings of our current backlog, and our ability to manage such closings; (v) our priorities and strategies for growth, the drivers of that growth, and the impact on our future results; (vi) our beliefs regarding first time homebuyer preferences; (vii) our flexibility to capitalize on market opportunities and the impact on our financial and operational performance; (viii) our beliefs that our lot and land positions will support future growth and provide us with advantages on margins and adaptability; (ix) our beliefs that we operate in the most advantageous markets in the U.S. and the resilience of our markets in both stronger and weaker economies; (x) our intention to continue strengthening our financial position; (xi) our beliefs regarding future shifts in labor market pricing power and cycle timing; (xii) our beliefs regarding our position to manage costs and cycle times; and (xiii) our expectation to continue to provide favorable returns on equity to our shareholders. 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) changes in macroeconomic conditions, including increasing interest rates, inflation, and the COVID-19 pandemic that could adversely impact demand for new homes or the ability of potential buyers to qualify; (2) general economic conditions, seasonality, cyclicality and competition in the homebuilding industry; (3) shortages, delays or increased costs of raw materials 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; (4) a shortage of qualified labor; (5) an inability to acquire land in our current and new markets at anticipated prices or difficulty in obtaining land-use entitlements; (6) our inability to successfully execute our strategies, including an inability to grow our operations or expand our Trophy brand; (7) our inability to implement new strategic investments; (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; (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:
Benting Hu
Vice President of Finance
(469) 808-1014
IR@greenbrickpartners.com