Green Brick Partners, Inc. Reports Record Second Quarter 2021 Results

Plano, Texas, UNITED STATES


Record Total Revenues of $373.8 Million, Up 60.5%
Record Income Before Income Taxes of $74.0 Million, Up 104.4%
Backlog of $974.3 Million, Up 118.2%
Home Building Gross Margin Up 360 bps
Record Lots Owned and Controlled Up 132.7%

PLANO, Texas, Aug. 03, 2021 (GLOBE NEWSWIRE) -- Green Brick Partners, Inc. (Nasdaq: GRBK) (“we,” “Green Brick” or the “Company”) today reported record results for its second quarter ended June 30, 2021.

“With our all-time record results achieved this quarter, Green Brick’s annualized Q2 2021 return on equity hit a new high at 30.2%. Thanks to a great team effort, we provided our investors some of the best returns in the industry. Even better, we expect these returns to accelerate,” said Jim Brickman, CEO and Co-Founder. “Our total revenues were $1.1 billion on a trailing twelve months basis. From Q1 to Q2, we increased home building revenues by 54% and our EPS doubled. We continue to be confident that our revenues and earnings will continue to grow sequentially each quarter this year.”

“Our core focus on land development and our dominant presence and reputation in our markets has resulted in a 133% increase in our lots owned and controlled from a year prior. Our superior capacity to source new land has allowed us to grow our units under construction an astounding 95% as compared to June 30, 2020 and provides a ready supply of new housing to meet current demand.”

Results for the Quarter Ended June 30, 2021:

For the quarter ended June 30, 2021, our net new home deliveries, residential units revenue, and net income per share 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 June 30,  
 2021 2020 Increase
New homes delivered757  553  36.9%
      
Total revenues$373,806  $232,833  60.5%
Total cost of revenues272,830  178,938  52.5%
Total gross profit$100,976  $53,895  87.4%
Income before income taxes$73,977  $36,185  104.4%
Net income attributable to Green Brick Partners, Inc.$52,263  $33,647  55.3%
Diluted net income attributable to Green Brick Partners, Inc. per share$1.02  $0.66  54.5%
      
Residential units revenue$333,500  $228,667  45.8%
Homebuilding gross margin percentage26.8% 23.2% 360 bps
      
Backlog$974,349  $446,573  118.2%
Lots owned and controlled21,351  9,176  132.7%
Homes under construction2,486  1,273  95.3%
Net income attributable to Green Brick Partners, Inc. as a percentage of the average total Green Brick Partners, Inc. stockholders’ equity30.2% 24.1% 610 bps
        
        

“Our gross margin reached 26.8% this quarter, up 360 basis points from the prior year and up 140 basis points from the first quarter, as Green Brick has achieved pricing power in our core markets of Dallas-Ft. Worth and Atlanta,” said Rick Costello, CFO. “In order to capitalize on rising prices and demand, we have paced sales with price increases in excess of rising input costs. We believe this focus on price over pace will sustain our industry-leading margins and strong financial performance through the remainder of 2021.”

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 since the second half of 2020 has, in turn, led to increased demand for the raw materials, products and appliances for new homes. Due to the increased demand for certain materials, we have and may continue to experience price increases, shortages and significant extensions to our lead time for the delivery of materials such as lumber, appliances and windows.

Earnings Conference Call:
We will host our earnings conference call to discuss our second quarter ended June 30, 2021 at 12:00 p.m. Eastern Time on Wednesday, August 4, 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 13721299. Participants may also join the call via webcast at: greenbrickpartners.com/reporting/.

The webcast replay will be available from the Company’s website at greenbrickpartners.com/reporting/ through September 30th, 2021. A replay of the call will be available from approximately 3:00 p.m. Eastern Time on August 4th, 2021 through 11:59 p.m. Eastern Time on September 1st, 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 13721299.

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 June 30, Six Months Ended June 30,
 2021 2020 2021 2020
Residential units revenue$333,500  $228,667  $550,736  $419,854 
Land and lots revenue40,306  4,166  57,549  26,246 
Total revenues373,806  232,833  608,285  446,100 
Cost of residential units244,165  175,723  406,237  322,910 
Cost of land and lots28,665  3,215  42,083  20,326 
Total cost of revenues272,830  178,938  448,320  343,236 
Total gross profit100,976  53,895  159,965  102,864 
Selling, general and administrative expenses(33,985) (25,672) (63,473) (52,541)
Equity in income of unconsolidated entities4,593  5,174  8,484  7,739 
Other income, net2,393  2,788  4,263  879 
Income before income taxes73,977  36,185  109,239  58,941 
Income tax expense15,694  1,348  23,195  7,388 
Net income58,283  34,837  86,044  51,553 
Less: Net income attributable to noncontrolling interests6,020  1,190  7,812  1,989 
Net income attributable to Green Brick Partners, Inc.$52,263  $33,647  $78,232  $49,564 
        
Net income attributable to Green Brick Partners, Inc. per common share:       
Basic$1.03  $0.67  $1.54  $0.98 
Diluted$1.02  $0.66  $1.53  $0.98 
Weighted average common shares used in the calculation of net income attributable to Green Brick Partners, Inc. per common share:       
Basic50,701  50,583  50,667  50,519 
Diluted51,064  50,692  51,029  50,669 
            
            

GREEN BRICK PARTNERS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)

    
 June 30, 2021 December 31, 2020
ASSETS
Cash and cash equivalents$33,517  $19,479 
Restricted cash23,598  14,156 
Receivables7,007  5,224 
Inventory1,106,141  844,635 
Investments in unconsolidated entities50,342  46,443 
Right-of-use assets - operating leases4,528  2,538 
Property and equipment, net3,712  3,595 
Earnest money deposits20,161  22,242 
Deferred income tax assets, net15,376  15,376 
Intangible assets, net580  622 
Goodwill680  680 
Other assets21,494  13,857 
Total assets$1,287,136  $988,847 
LIABILITIES AND EQUITY
Liabilities:   
Accounts payable$45,761  $24,521 
Accrued expenses57,425  40,416 
Customer and builder deposits63,700  38,131 
Lease liabilities - operating leases4,582  2,591 
Borrowings on lines of credit, net130,605  106,687 
Senior unsecured notes, net235,624  111,056 
Notes payable233  2,125 
Contingent consideration  368 
Total liabilities537,930  325,895 
Commitments and contingencies   
Redeemable noncontrolling interest in equity of consolidated subsidiary17,515  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 June 30, 2021 and December 31, 2020, respectively511  511 
Treasury stock, at cost, 391,939 shares(3,167) (3,167)
Additional paid-in capital292,157  293,242 
Retained earnings427,888  349,656 
Total Green Brick Partners, Inc. stockholders’ equity717,389  640,242 
Noncontrolling interests14,302  9,167 
Total equity731,691  649,409 
Total liabilities and equity$1,287,136  $988,847 
        
        

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,    
2021 2020 Change % 2021 2020 Change %
Home closings revenue$332,279 $226,785 $105,494  46.5% $548,413 $416,033 $132,380  31.8 %
Mechanic’s lien contracts revenue1,221 1,882 (661) (35.1)% 2,323 3,821 (1,498) (39.2)%
Residential units revenue$333,500 $228,667 $104,833  45.8% $550,736 $419,854 $130,882  31.2 %
New homes delivered757 553 204  36.9% 1,273 1,001 272  27.2 %
Average sales price of homes delivered$438.9 $410.1 $28.8  7.0% $430.8 $415.6 $15.2  3.7 %
                           


            
Land and Lots Revenue
(dollars in thousands)

Three Months Ended June 30,     Six Months Ended June 30,    
2021 2020 Change % 2021 2020 Change %
Lots revenue$4,615 $4,166 $449  10.8% $13,058 $26,246 $(13,188) (50.2)%
Land revenue35,691  35,691  100% 44,491  44,491  100.0%
Land and lots revenue$40,306 $4,166 $36,140  867.5% $57,549 $26,246 $31,303  119.3 %
Lots closed63 26 37  142.3% 142 164 (22) (13.4)%
Average sales price of lots closed$73.3 $160.2 $(86.9) (54.2)% $92.0 $160.0 $(68.0) (42.5)%
                           
                           


New Home Orders and Backlog
(dollars in thousands)

Three Months Ended June 30,     Six Months Ended June 30,    
2021 2020 Change % 2021 2020 Change %
Net new home orders604  582  22   3.8% 1,686  1,214  472   38.9 %
Cancellation rate7.6% 16.9% (9.3)% (55.0)% 6.6% 16.6% (10.0)% (60.2)%
Absorption rate per average active selling community per quarter6.8  6.3  0.5   7.9% 9.1  6.5  2.6   40.0 %
Average active selling communities89  92  (3)  (3.3)% 93  93      %
Active selling communities at end of period87  90  (3)  (3.3)%        
Backlog$974,349  $446,573  $527,776   118.2%        
Backlog (units)1,876  999  877   87.8%        
Average sales price of backlog$519.4  $447.0  $72.4   16.2%        
                        


    
  June 30, 2021 December 31, 2020
Lots owned (1)   
Central14,115  6,823 
Southeast2,212  2,097 
Total lots owned16,327  8,920 
Lots controlled (1)   
Central4,126  4,398 
Southeast898  1,150 
Total lots controlled5,024  5,548 
Total lots owned and controlled (1)21,351  14,468 
Percentage of lots owned76.5% 61.7%


























____________________
(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, 2021 and December 31, 2020.

    
 June 30, 2021 December 31, 2020
Total lots owned16,327   8,920  
Add certain lots included in Total Lots Controlled   
Land under option for future acquisition and development606   740  
Lots under option through unconsolidated development joint ventures1,844   1,838  
Total lots self-developed18,777   11,498  
Self-developed lots as a percentage of total lots owned and controlled87.9 % 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 six months ended June 30, 2021 and 2020 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,
2021 2020 2021 2020
Residential units revenue$333,500   $228,667   $550,736   $419,854  
Less: Mechanic’s lien contracts revenue(1,221)  (1,882)  (2,323)  (3,821) 
Home closings revenue$332,279   $226,785   $548,413   $416,033  
Homebuilding gross margin$89,055   $52,609   $143,959   $96,266  
Homebuilding gross margin percentage26.8 % 23.2 % 26.3 % 23.1 %
        
Homebuilding gross margin89,055   52,609   143,959   96,266  
Add back: Capitalized interest charged to cost of revenues2,533   2,707   4,346   4,888  
Adjusted homebuilding gross margin$91,588   $55,316   $148,305   $101,154  
Adjusted homebuilding gross margin percentage27.6 % 24.4 % 27.0 % 24.3 %
                

The following table presents the pre-tax income for the three and six months ended June 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 June 30, Six Months Ended June 30,
2021 2020 2021 2020
Net income attributable to Green Brick Partners, Inc.$52,263  $33,647  $78,232  $49,564
Income tax expense attributable to Green Brick Partners, Inc.15,693  1,348  23,193  7,386
Pre-tax income attributable to Green Brick Partners, Inc.$67,956  $34,995  $101,425  $56,950
               

The following table presents the non-GAAP measure of net income attributable to Green Brick Partners, Inc. for the three months ended June 30, 2021 and 2020, divided by the average total Green Brick Partners, Inc. stockholder’s equity to calculate our return on average equity. We believe this non-GAAP financial measure is relevant in measuring our profitability in relation to stockholder’s equity and should only be used to supplement Green Brick’s GAAP results.

  
 (Unaudited, in thousands):Three Months Ended June 30,
2021 2020
Net income attributable to Green Brick Partners, Inc.$52,263  $33,647 
Beginning total Green Brick Partners, Inc. stockholders’ equity666,131  542,982 
Ending total Green Brick Partners, Inc. stockholders’ equity717,389  575,759 
Average total Green Brick Partners, Inc. stockholders’ equity$691,760  559,371 
Net income attributable to Green Brick Partners, Inc. as a percentage of the average total Green Brick Partners, Inc. stockholders’ equity30.2% 24.1%
      

About Green Brick Partners, Inc.

Green Brick Partners, Inc. (Nasdaq: GRBK) is a diversified homebuilding and land development company. Green Brick owns five 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 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. Green Brick is engaged in all aspects of the homebuilding process, including land acquisition and development, entitlements, design, construction, marketing, and sales for our residential neighborhoods and master planned communities. For more information about Green Brick Partners Inc.’s homebuilding partners, please visit https://greenbrickpartners.com/team-builders/.

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 strategy for growth, the drivers and acceleration of that growth, and the impact on our results over the remainder of 2021, (ii) our margins and performance through 2021 as compared to the industry, (iii) our ability to capitalize on market opportunities and the impact on our results and (iv) our land and lot acquisition strategy and its impact on our ability to meet market demand. 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 and Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission.



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