SOURCE: Green Brick Partners

August 08, 2016 16:05 ET

Green Brick Partners, Inc. Reports Second Quarter 2016 Results

Second Quarter Basic EPS of $0.14 and Basic Adjusted EPS of $0.22, up 16.7% and 83.3%; Second Quarter Pre-Tax Income of $11.0 Million, up 85.2%; Second Quarter Revenue of $98.9 Million, up 37.4%; Backlog of $140.3 Million, up 37.1%

PLANO, TX--(Marketwired - August 08, 2016) - Green Brick Partners, Inc. (NASDAQ: GRBK) ("we," "Green Brick" or the "Company"), today reported results for its second quarter ended June 30, 2016.

Results for the Second Quarter Ended June 30, 2016:

  • Basic net income attributable to Green Brick per common share ("EPS") for the three months ended June 30, 2016 was $0.14, as compared to $0.12 for the three months ended June 30, 2015. Basic adjusted net income attributable to Green Brick per common share ("Adjusted EPS") for the three months ended June 30, 2016 was $0.22, as compared to $0.12 for the three months ended June 30, 2015. See "Reconciliation of Non-GAAP Financial Measures."
  • For the three months ended June 30, 2016, the Company had: pre-tax income of $11.0 million, an increase of 85.2%, compared to $5.9 million for the three months ended June 30, 2015; gross profit of $23.6 million, an increase of 37.1%, compared to $17.2 million for the three months ended June 30, 2015; and revenue of $98.9 million, an increase of 37.4%, compared to $72.0 million for three months ended June 30, 2015.
  • Builder operations revenue for the three months ended June 30, 2016 was $93.7 million, an increase of 55.3%, compared to $60.4 million for the three months ended June 30, 2015. Land development revenue for the three months ended June 30, 2016 was $5.2 million compared to $11.6 million for the three months ended June 30, 2015. The decrease in land development revenue is due to an increase in lot sales to Green Brick's builders where revenue is not recognized until the house closing.
  • The dollar value of backlog units as of June 30, 2016 was $140.3 million, an increase of 37.1% compared to June 30, 2015. The average sales price of homes in backlog increased $45,894, or 11.2%, to $457,143 for the three months ended June 30, 2016, compared to $411,249 for the three months ended June 30, 2015.
  • Homes under construction increased 26.4% to 660 as of June 30, 2016, compared to 522 as of June 30, 2015.

Results for the Six Months Ended June 30, 2016:

  • Basic EPS for the six months ended June 30, 2016 was $0.20, as compared to $0.25 for the six months ended June 30, 2015. Basic Adjusted EPS for the six months ended June 30, 2016 was $0.32, as compared to $0.25 for the six months ended June 30, 2015. See "Reconciliation of Non-GAAP Financial Measures."
  • For the six months ended June 30, 2016, the Company had: pre-tax income of $15.5 million, an increase of 27.7%, compared to $12.1 million for the six months ended June 30, 2015; gross profit of $39.3 million, an increase of 17.5%, compared to $33.4 million for the six months ended June 30, 2015; and revenue of $168.9 million, an increase of 29.5%, compared to $130.4 million for six months ended June 30, 2015.
  • Builder operations revenue for the six months ended June 30, 2016 was $160.4 million, an increase of 45.7%, compared to $110.0 million for the six months ended June 30, 2015. Land development revenue for the six months ended June 30, 2016 was $8.5 million compared to $20.4 million for the six months ended June 30, 2015. The decrease in land development revenue is due to an increase in lot sales to Green Brick's builders where revenue is not recognized until the house closing.

"Our strong $99 million revenue and 85% increase in pre-tax earnings in the second quarter were the result of Green Brick's and our builders' dedication, hard work and superior long term lot positions. Despite our record closings, our backlog still rose 9% from Q1 2016 and 37% from Q2 2015. Our financial results should continue to improve over the long term. Thank you for your support."

Earnings Conference Call:

We will host our earnings conference call to discuss our second quarter ended June 30, 2016 at 12:00 p.m. Eastern Time on Tuesday, August 9, 2016. 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 53484482. A replay of the call will be available from approximately 3:00 p.m. Eastern Time on August 9, 2016 through 11:59 p.m. Eastern Time on August 16, 2016. 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 53484482.

Reclassifications:

Depreciation of model home furnishings for the three and six months ended June 30, 2015 has been reclassified from depreciation and amortization expense, which is included in other income, net in the consolidated statements of income to cost of residential units to conform to the current year presentation.

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 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.

On July 1, 2015, the Company completed an underwritten public offering of 17,000,000 shares of its common stock at a price to the public of $10.00 per share and granted to the underwriters a 30-day option to purchase up to an aggregate of 841,500 additional shares of common stock to cover over-allotments (the "Equity Offering"). On July 23, 2015, the underwriters exercised the option and purchased 444,897 additional shares. Due to the effects of the Equity Offering, the weighted average shares outstanding for the three and six months ended June 30, 2015 is not indicative of the Company's future weighted average shares outstanding.

  
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,  
   2016     2015     2016     2015  
Sale of residential units $93,732    $60,369    $160,360    $110,030  
Sale of land and lots  5,204     11,618     8,534     20,409  
 Total revenues  98,936     71,987     168,894     130,439  
Cost of residential units  71,999     46,204     123,928     82,168  
Cost of land and lots  3,373     8,600     5,713     14,878  
 Total cost of sales  75,372     54,804     129,641     97,046  
 Total gross profit  23,564     17,183     39,253     33,393  
Salary expense  (6,745 )   (4,647 )   (12,919 )   (9,509 )
Selling, general and administrative expense  (4,426 )   (3,376 )   (8,458 )   (6,315 )
 Operating profit  12,393     9,160     17,876     17,569  
Interest expense  -     -     -     (281 )
Depreciation and amortization expense  (65 )   (265 )   (121 )   (342 )
Interest on direct financing leases income  -     -     -     13  
Other income, net  1,320     275     1,836     606  
 Income before provision for income taxes  13,648     9,170     19,591     17,565  
Income tax provision  4,230     2,166     5,683     4,373  
Net income  9,418     7,004     13,908     13,192  
Less: net income attributable to noncontrolling interests  2,675     3,216     4,071     5,386  
Net income attributable to Green Brick Partners, Inc. $6,743    $3,788    $9,837    $7,806  
                        
Net income attributable to Green Brick Partners, Inc. per common share:                       
 Basic $0.14    $0.12    $0.20    $0.25  
 Diluted $0.14    $0.12    $0.20    $0.25  
Weighted average common shares used in the calculation of net income attributable to Green Brick Partners, Inc. per common share:                       
 Basic  48,894     31,346     48,852     31,346  
 Diluted  48,894     31,353     48,852     31,350  
                 
  
GREEN BRICK PARTNERS, INC. 
SUPPLEMENTAL INFORMATION 
(Unaudited) 
   Three Months Ended
 June 30,
 Increase (Decrease)   Six Months Ended
 June 30,
 Increase (Decrease)  
New Homes Delivered and Home Sales Revenue  2016  2015  Change   %   2016  2015  Change   %  
New homes delivered   212   162   50   30.9 %  373   307   66   21.5 %
Home sales revenue ($ in thousands)  $93,732  $60,369  $33,363   55.3 % $160,360  $110,030  $50,330   45.7 %
Average sales price of home delivered  $442,132  $372,648  $69,484   18.6 % $429,920  $358,404  $71,516   20.0 %
    Three Months Ended
 June 30,
  Increase (Decrease)    Six Months Ended
 June 30,
  Increase (Decrease)  
Land and Lots Sales Revenue   2016   2015   Change     %  2016   2015   Change     %
Land and lots sold   39   113   (74 ) (65.5 )%  67   185   (118 ) (63.8 )%
Land and lots sales revenue ($ in thousands)  $5,204  $11,618  $(6,414 ) (55.2 )% $8,534  $20,409  $(11,875 ) (58.2 )%
Average sales price of land and lots sold  $133,419  $102,817  $30,602   29.8 % $127,369  $110,319  $17,050   15.5 %
    Three Months Ended
 June 30,
  Increase (Decrease)    Six Months Ended
 June 30,
  Increase (Decrease)  
New Home Orders & Backlog   2016   2015   Change     %  2016   2015   Change     %
Net new home orders   239   169   70   41.4 %  479   347   132   38.0 %
Average selling communities   46   39   7   17.9 %  46   37   9   24.3 %
Selling communities at end of period   48   43   5   11.6 %  48   43   5   11.6 %
Backlog ($ in thousands)                   $140,343  $102,401  $37,942   37.1 %
Backlog (units)                    307   249   58   23.3 %
Average sales price of backlog                   $457,143  $411,249  $45,894   11.2 %
                           

The following table calculates the non-GAAP measure of Adjusted EPS for the three and six months ended June 30, 2016 and June 30, 2015 and reconciles these amounts to net income attributable to Green Brick, as reported and prepared in accordance with GAAP. Adjusted EPS for the three and six months ended June 30, 2016 and June 30, 2015 means pre-tax income for the period presented divided by the weighted average number of common shares outstanding for the three and six months ended June 30, 2016. Pre-tax income represents net income attributable to Green Brick for the period excluding provision for income taxes attributable to Green Brick.

     
(In thousands, except per share amounts):  Three Months Ended
 June 30,
 Six Months Ended
 June 30,
2016  2015  2016  2015
Basic Adjusted EPS                
 Net income attributable to Green Brick -basic  $6,743  $3,788  $9,837  $7,806
 Income tax provision attributable to Green Brick  $4,213  $2,127  $5,636  $4,310
 Pre-tax income  $10,956  $5,915  $15,473  $12,116
 Adjusted weighted-average number of shares outstanding -basic   48,894   48,894   48,852   48,852
  Basic Adjusted EPS  $0.22  $0.12  $0.32  $0.25
Diluted Adjusted EPS                
 Net income attributable to Green Brick -diluted  $6,743  $3,788  $9,837  $7,806
 Income tax provision attributable to Green Brick  $4,213  $2,127  $5,636  $4,310
 Pre-tax income  $10,956  $5,915  $15,473  $12,116
 Adjusted weighted-average number of shares outstanding -diluted   48,894   48,894   48,852   48,852
  Diluted Adjusted EPS  $0.22  $0.12  $0.32  $0.25
               

The following table calculates the non-GAAP measure of Adjusted Homebuilding Gross Margin for the three and six months ended June 30, 2016 and June 30, 2015 and reconciles these amounts to homebuilding gross margin, as reported and prepared in accordance with GAAP.

       
(In thousands):  Three Months Ended
 June 30,
 Six Months Ended
 June 30,
2016  2015  2016  2015
Homebuilding gross margin  $21,733  $14,165  $36,432  $27,862
 Add back: capitalized interest charged to cost of sales  $648  $912  $1,625  $926
 Adjusted Homebuilding Gross Margin  $22,381  $15,077  $38,057  $28,788
             

About Green Brick Partners, Inc.:

Green Brick Partners, Inc. (NASDAQ: GRBK) is a uniquely structured company that combines residential land development and homebuilding. The Company acquires and develops land, provides land and construction financing to its controlled builders and participates in the profits of its controlled builders. The Company owns a controlling interest in four homebuilding companies in Dallas, Texas (CB JENI Homes DFW LLC, Normandy Homes (a division of CB JENI), Southgate Homes DFW LLC, and Centre Living Homes, LLC), as well as a leading homebuilder in Atlanta, Georgia (The Providence Group of Georgia, L.L.C.). The Company is engaged in all aspects of the homebuilding process, including land acquisition and the development, entitlements, design, construction, marketing and sales and the creation of brand images at its residential neighborhoods and master planned communities. For more information about Green Brick Partners, Inc.'s homebuilding partners go to www.greenbrickpartners.com/building-partners.html.

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," "could," "would," "predicts," "potential," "continue," "expects," "anticipates," "future," "outlook," "strategy," "positioned," "intends," "plans," "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. Accordingly, all such forward-looking statements involve estimates and assumptions that are subject to risks, uncertainties and other factors that could cause actual results to differ materially from the results expressed in the statements. Among the factors that could cause actual results to differ materially from those projected in the forward-looking statements are the following: general economic conditions, seasonality, cyclicality and competition in the homebuilding industry; demand for real estate investments in the geographic markets in which we operate; significant inflation or deflation; labor and raw material shortages; the failure to recruit, retain and develop highly skilled and competent employees; an inability to acquire land suitable for residential homebuilding at reasonable prices; an inability to develop and sell communities successfully or within expected timeframes; risks related to regulatory approvals and government regulation; the interpretation of or changes to tax, labor and environmental laws and regulations; volatility of mortgage interest rates; the unavailability of mortgage financing; the occurrence of severe weather or natural disasters; risks related to future growth through strategic investments, joint ventures, partnerships and/or acquisitions; the inability to obtain suitable bonding for the development of housing projects; difficulty in obtaining sufficient capital; the occurrence of a major health and safety incident; poor relations with the residents of our communities; information technology failures and data security breaches; product liability claims, litigation and warranty claims; our debt and related service obligations; required accounting changes; an inability to maintain effective internal control over financial reporting; and other risks and uncertainties inherent in our business. Additional factors that could cause actual results to differ from those anticipated 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. Because the factors referred to above could cause actual results or outcomes to differ materially from those expressed or implied in any forward-looking statements made by Green Brick, you should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date of this press release, and Green Brick undertakes no obligation to update any forward-looking statement to reflect events or circumstances after such date.

Attachment Available: http://www.marketwire.com/library/MwGo/2016/8/8/11G109664/Microsoft_PowerPoint_-_Second_Quarter_2016_Investo-2ce37e8c31d9a9a79f169241cbf445e3.pdf

Contact Information

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