SOURCE: Green Brick Partners Inc.

Green Brick Partners Inc.

August 07, 2017 16:05 ET

Green Brick Partners, Inc. Reports Strong Second Quarter 2017 Results

Second Quarter Basic EPS of $0.16 and Basic Adjusted EPS of $0.25, up 14.3% and 13.6%; Second Quarter Pre-Tax Income of $12.0 million, up 9.9%; Second Quarter Revenue of $105.0 million, up 6.1%; Backlog of $165.2 million, up 17.7%

PLANO, TX--(Marketwired - August 07, 2017) - Green Brick Partners, Inc. (NASDAQ: GRBK) ("we," "Green Brick" or the "Company"), today reported results for its second quarter ended June 30, 2017.

Results for the Second Quarter Ended June 30, 2017:

  • Basic net income attributable to Green Brick per common share ("EPS") for the three months ended June 30, 2017 was $0.16, an increase of 14.3%, compared to $0.14 for the three months ended June 30, 2016. Basic adjusted net income attributable to Green Brick per common share ("Adjusted EPS") for the three months ended June 30, 2017 was $0.25, an increase of 13.6%, compared to $0.22 for the three months ended June 30, 2016. See "Reconciliation of Non-GAAP Financial Measures."
  • For the three months ended June 30, 2017, the Company had: pre-tax income of $12.0 million, an increase of 9.9%, compared to $11.0 million for the three months ended June 30, 2016; gross profit of $22.9 million, an increase of 3.7%, compared to $22.1 million for the three months ended June 30, 2016; and revenue of $105.0 million, an increase of 6.1%, compared to $98.9 million for three months ended June 30, 2016.
  • Builder operations revenue for the three months ended June 30, 2017 was $100.3 million, an increase of 7.1%, compared to $93.7 million for the three months ended June 30, 2016. Land development revenue for the three months ended June 30, 2017 was $4.6 million, a decrease of 11.5%, compared to $5.2 million for the three months ended June 30, 2016.
  • The dollar value of backlog units as of June 30, 2017 was $165.2 million, an increase of 17.7% compared to June 30, 2016. The average sales price of homes in backlog increased $41,812, or 9.1%, to $498,955 for the three months ended June 30, 2017, compared to $457,143 for the three months ended June 30, 2016.
  • Homes under construction increased 8.2% to 714 as of June 30, 2017, compared to 660 as of June 30, 2016.

Results for the Six Months Ended June 30, 2017:

  • Basic EPS for the six months ended June 30, 2017 was $0.28, an increase of 40.0%, compared to $0.20 for the six months ended June 30, 2016. Basic Adjusted EPS for the six months ended June 30, 2017 was $0.45, an increase of 40.6%, compared to $0.32 for the six months ended June 30, 2016. See "Reconciliation of Non-GAAP Financial Measures."
  • For the six months ended June 30, 2017, the Company had: pre-tax income of $22.1 million, an increase of 42.8%, compared to $15.5 million for the six months ended June 30, 2016; gross profit of $44.2 million, an increase of 21.0%, compared to $36.5 million for the six months ended June 30, 2016; and revenue of $204.3 million, an increase of 21.0%, compared to $168.9 million for six months ended June 30, 2016.
  • Builder operations revenue for the six months ended June 30, 2017 was $193.7 million, an increase of 20.8%, compared to $160.4 million for the six months ended June 30, 2016. Land development revenue for the six months ended June 30, 2017 was $10.5 million, an increase of 23.6%, compared to $8.5 million for the six months ended June 30, 2016.

"We had a great second quarter where backlog increased almost 18% from 2016 and more importantly net new home orders increased 13%," said James R. Brickman, Green Brick's Chief Executive Officer. "We currently own or control just under 5,400 home sites, up over 900 lots, from 2016. Our adjusted homebuilding gross margin of 22.4% was among the highest in the industry."

Earnings Conference Call:

We will host our earnings conference call to discuss our second quarter ended June 30, 2017 at 12:00 p.m. Eastern Time on Tuesday, August 8, 2017. 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 58946666. A replay of the call will be available from approximately 3:00 p.m. Eastern Time on August 8, 2017 through 11:59 p.m. Eastern Time on August 15, 2017. 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 58946666.

Change in Classification:

Certain indirect project costs previously classified as salary expense and selling, general and administrative expense have been classified as cost of residential units for the three and six months ended June 30, 2016 to properly present cost of residential units, salary expense, and selling, general and administrative expense.

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.

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,  
  2017   2016   2017   2016  
Sale of residential units $100,345   $93,732   $193,742   $160,360  
Sale of land and lots  4,606    5,204    10,546    8,534  
 Total revenues  104,951    98,936    204,288    168,894  
Cost of residential units  78,553    73,447    152,314    126,651  
Cost of land and lots  3,472    3,373    7,762    5,713  
 Total cost of sales  82,025    76,820    160,076    132,364  
 Total gross profit  22,926    22,116    44,212    36,530  
Salary expense  (5,332 )  (5,537 )  (10,767 )  (10,631 )
Selling, general and administrative expense  (4,167 )  (4,251 )  (8,445 )  (8,144 )
 Operating profit  13,427    12,328    25,000    17,755  
Other income, net  386    1,320    928    1,836  
 Income before provision for income taxes  13,813    13,648    25,928    19,591  
Income tax provision  4,382    4,230    8,271    5,683  
Net income  9,431    9,418    17,657    13,908  
Less: net income attributable to noncontrolling interests  1,742    2,675    3,771    4,071  
Net income attributable to Green Brick Partners, Inc. $7,689   $6,743   $13,886   $9,837  
                     
Net income attributable to Green Brick Partners, Inc. per common share:                    
 Basic $0.16   $0.14   $0.28   $0.20  
 Diluted $0.16   $0.14   $0.28   $0.20  
Weighted average common shares used in the calculation of net income attributable to Green Brick Partners, Inc. per common share:                    
 Basic  49,047    48,894    49,003    48,852  
 Diluted  49,123    48,894    49,070    48,852  
                 
                 

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  2017  2016  Change   %   2017  2016  Change   %  
New homes delivered   237   212   25   11.8 %  463   373   90   24.1 %
Home sales revenue ($ in thousands)  $100,345  $93,732  $6,613   7.1 % $193,742  $160,360  $33,382   20.8 %
Average sales price of homes delivered  $423,397  $442,132  $(18,735 ) (4.2 )% $418,449  $429,920  $(11,471 ) (2.7 )%
                           
   Three Months Ended
 June 30,
 Increase (Decrease)   Six Months Ended
 June 30,
 Increase (Decrease)  
Land and Lots Sales Revenue  2017  2016  Change   %   2017  2016  Change   %  
Land and lots sold   37   39   (2 ) (5.1 )%  84   67   17   25.4 %
Land and lots sales revenue ($ in thousands)  $4,606  $5,204  $(598 ) (11.5 )% $10,546  $8,534  $2,012   23.6 %
Average sales price of land and lots sold  $124,481  $133,419  $(8,938 ) (6.7 )% $125,547  $127,369  $(1,822 ) (1.4 )%
                           
   Three Months Ended
 June 30,
 Increase (Decrease)   Six Months Ended
 June 30,
 Increase (Decrease)  
New Home Orders & Backlog  2017  2016  Change  %   2017  2016  Change  %  
Net new home orders   270   239   31  13.0 % 557  479  78  16.3 %
Average selling communities   52   46   6  13.0 % 53  46  7  15.2 %
Selling communities at end of period   54   48   6  12.5 % 54  48  6  12.5 %
Backlog ($ in thousands)  $165,154  $140,343  $24,811  17.7 %             
Backlog (units)   331   307   24  7.8 %             
Average sales price of backlog  $498,955  $457,143  $41,812  9.1 %             
                      

The following table calculates the non-GAAP measure of Adjusted EPS for the three and six months ended June 30, 2017 and June 30, 2016 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, 2017 and June 30, 2016 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, 2017 and June 30, 2016, respectively. Pre-tax income represents net income attributable to Green Brick for the period excluding provision for income taxes attributable to Green Brick. Due to our ability to use net operating loss carryforwards to offset future taxable income for U.S. federal income tax purposes, we believe pre-tax income is a useful measure of the Company's ability to service debt and obtain financing.

     
(In thousands, except per share amounts):  Three Months Ended
 June 30,
 Six Months Ended
 June 30,
2017  2016  2017  2016
Basic Adjusted EPS                
 Net income attributable to Green Brick - basic  $7,689  $6,743  $13,886  $9,837
 Income tax provision attributable to Green Brick  $4,349  $4,213  $8,204  $5,636
 Pre-tax income  $12,038  $10,956  $22,090  $15,473
 Adjusted weighted-average number of shares outstanding - basic   49,047   48,894   49,003   48,852
  Basic Adjusted EPS  $0.25  $0.22  $0.45  $0.32
Diluted Adjusted EPS                
 Net income attributable to Green Brick - diluted  $7,689  $6,743  $13,886  $9,837
 Income tax provision attributable to Green Brick  $4,349  $4,213  $8,204  $5,636
 Pre-tax income  $12,038  $10,956  $22,090  $15,473
 Adjusted weighted-average number of shares outstanding - diluted   49,123   48,894   49,070   48,852
  Diluted Adjusted EPS  $0.25  $0.22  $0.45  $0.32
               

The following table calculates the non-GAAP measure of Adjusted Homebuilding Gross Margin for the three and six months ended June 30, 2017 and June 30, 2016 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,
2017  2016  2017  2016
Homebuilding gross margin  $21,792  $20,285  $41,428  $33,709
Add back: capitalized interest charged to cost of sales   698   648  $1,303  $1,625
Adjusted Homebuilding Gross Margin  $22,490  $20,933  $42,731  $35,334
             

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/2017/8/7/11G143786/GRBK_Second_Quarter_2017_Investor_Call_Presentatio-c22e2d6142e09c2badeef314b7bf1de6.pdf

Contact Information

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