EX-99 2 a3q12023ex99earningsrelease.htm EX-99 Document

Exhibit 99
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GREEN BRICK PARTNERS, INC. REPORTS RECORD FIRST QUARTER 2023 RESULTS

RECORD $1.37 EARNINGS PER SHARE FOR ANY FIRST QUARTER
RECORD $449.4 MILLION HOME CLOSINGS REVENUE FOR ANY FIRST QUARTER
RECORD $630.9 MILLION NEW HOME ORDERS FOR ANY QUARTER, UP 75.3%
DEBT TO TOTAL CAPITAL OF 23.8%; NET DEBT TO TOTAL CAPITAL OF 13.3%

PLANO, Texas, May 3, 2023 — Green Brick Partners, Inc. (NYSE: GRBK) (“we,” “Green Brick” or the “Company”) today reported record results for its first quarter ended March 31, 2023.

“We are pleased to report that Green Brick kicked off 2023 with the best first quarter results in our history. We delivered 761 homes which was a record for any first quarter. Home closings revenue increased 24% year-over-year to $449 million. We were able to sustain a high homebuilding gross margin of 27.6%, which was one of the highest among public homebuilders in the first quarter and is up 140 bps sequentially,” said Jim Brickman, CEO and Co-Founder. “As a result, our earnings per diluted share grew 14% to $1.37 for the quarter.”

“More importantly, sales momentum during the first quarter was exceptionally strong. Despite a stormy housing environment, net sales accelerated across all our builder brands and were up 78% year-over-year and 152% sequentially to 1,067 homes, the second highest quarter in company history. Not only did we see strong demand in move-in ready homes, but we also experienced a resurgence of orders for build jobs and demand for homes in early construction stages. Our quarterly absorption rate surged to its highest level ever of 13.3 homes per active selling community. Furthermore, our cancellation rate improved significantly by 14 percentage points from last quarter to 6.2%, the lowest among public homebuilders. As a result, our backlog increased 49% sequentially to $551 million, and spec percentage of units under construction decreased to a more desirable level of 59%. Due to the strength in our sales pace, we reduced incentives in some communities, selectively raised prices and started metering sales in a few communities. We believe our presence in infill locations will continue to differentiate us from the industry and allow us to generate superior results,” continued Mr. Brickman.

Rick Costello, CFO, added, “We believe that we are well positioned to take market share with a strong balance sheet and ample high quality lots in infill locations. As of March 31, 2023, our debt to total capital ratio decreased 500 bps year-over-year to 23.8% while net debt to total capital ratio was down even further to 13.3%. During the first quarter, we returned $15.4 million back to shareholders through our existing stock repurchase program. In April, the Board approved a new stock repurchase program with an additional $100 million authorization, bringing our total repurchase authorization to $133 million. We will continue to evaluate and allocate our capital efficiently to maximize long-term shareholder return.”

Results for the Quarter Ended March 31, 2023:
For the quarter ended March 31, 2023, our new homes delivered, total revenues, net income attributable to Green Brick, and earnings per share reflect records for any first quarter since the Company’s inception, as detailed below.

(Dollars in thousands, except per share data)Three Months Ended March 31,
20232022Increase
New homes delivered761 658 15.7 %
Total revenues$452,061 $393,616 14.8 %
Total cost of revenues327,455 285,260 14.8 %
Total gross profit$124,606 $108,356 15.0 %
Income before income taxes$87,172 $82,633 5.5 %
Net income attributable to Green Brick Partners, Inc.$64,180 $61,577 4.2 %
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Diluted net income attributable to Green Brick Partners, Inc. per common share$1.37 $1.20 14.2 %
Residential units revenue$450,362 $364,661 23.5 %
Average sales price of homes delivered$590.6 $551.8 7.0 %
Homebuilding gross margin percentage27.6 %27.8 %-20 bps
Backlog$550,593 $866,621 (36.5)%
Homes under construction1,759 2,516 (30.1)%

2023 Share Repurchase Program
On April 27, 2023, the Board of Directors (the “Board”) approved a new stock repurchase program (the “2023 Repurchase Plan”) that authorizes the Company to purchase, from time to time, up to an additional $100.0 million of our outstanding common stock upon completion of our prior stock repurchase program, through open market repurchases in compliance with Rule 10b-18 under the Exchange Act and/or in privately negotiated transactions at management’s discretion based on market and business conditions, applicable legal requirements and other factors. Shares repurchased will be retired. The 2023 Repurchase Plan has no time deadline and will continue until otherwise modified or terminated by the Board at any time in its sole discretion.

Earnings Conference Call:
We will host our earnings conference call to discuss our first quarter ended March 31, 2023 at 12:00 p.m. Eastern Time on Thursday, May 4, 2023. 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/946654214

A telephone replay of the call will be available through June 3, 2023. 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.

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GREEN BRICK PARTNERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)

Three Months Ended March 31,
20232022
Residential units revenue$450,362 $364,661 
Land and lots revenue1,699 28,955 
Total revenues452,061 393,616 
Cost of residential units326,124 263,430 
Cost of land and lots1,331 21,830 
Total cost of revenues327,455 285,260 
Total gross profit124,606 108,356 
Selling, general and administrative expenses(45,945)(34,265)
Equity in income of unconsolidated entities4,221 5,687 
Other income, net4,290 2,855 
Income before income taxes87,172 82,633 
Income tax expense19,031 18,437 
Net income68,141 64,196 
Less: Net income attributable to noncontrolling interests3,961 2,619 
Net income attributable to Green Brick Partners, Inc.$64,180 $61,577 
Net income attributable to Green Brick Partners, Inc. per common share:
Basic$1.38 $1.20 
Diluted$1.37 $1.20 
Weighted average common shares used in the calculation of net income attributable to Green Brick Partners, Inc. per common share:
Basic45,945 50,586 
Diluted46,351 50,924 

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GREEN BRICK PARTNERS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
March 31, 2023December 31, 2022
ASSETS
Cash and cash equivalents$177,271 $76,588 
Restricted cash18,416 16,682 
Receivables7,256 5,288 
Inventory1,373,014 1,422,680 
Investments in unconsolidated entities77,059 74,224 
Right-of-use assets - operating leases3,076 3,458 
Property and equipment, net3,913 2,919 
Earnest money deposits19,530 23,910 
Deferred income tax assets, net16,448 16,448 
Intangible assets, net429 452 
Goodwill680 680 
Other assets9,364 12,346 
Total assets$1,706,456 $1,655,675 
LIABILITIES AND EQUITY
Liabilities:
Accounts payable$52,862 $51,804 
Accrued expenses108,492 91,281 
Customer and builder deposits36,948 29,112 
Lease liabilities - operating leases3,187 3,582 
Borrowings on lines of credit, net(2,453)17,395 
Senior unsecured notes, net335,920 335,825 
Notes payable14,607 14,622 
Total liabilities549,563 543,621 
Commitments and contingencies
Redeemable noncontrolling interest in equity of consolidated subsidiary30,291 29,239 
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 March 31, 2023 and December 31, 2022, respectively47,696 47,696 
Common stock, $0.01 par value: 100,000,000 shares authorized; 46,211,430 issued and 45,743,555 outstanding as of March 31, 2023 and 46,032,930 issued and outstanding as of December 31, 2022, respectively462 460 
Treasury stock, at cost: 467,875 shares as of March 31, 2023 and none as of December 31, 2022(15,351)— 
Additional paid-in capital263,545 259,410 
Retained earnings817,802 754,341 
Total Green Brick Partners, Inc. stockholders’ equity1,114,154 1,061,907 
Noncontrolling interests12,448 20,908 
Total equity1,126,602 1,082,815 
Total liabilities and equity$1,706,456 $1,655,675 

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GREEN BRICK PARTNERS, INC.
SUPPLEMENTAL INFORMATION
(Unaudited)

Residential Units Revenue and New Homes Delivered (dollars in thousands)Three Months Ended March 31,
20232022Change%
Home closings revenue$449,430 $363,063 $86,367 23.8 %
Mechanic’s lien contracts revenue932 1,598 (666)(41.7)%
Residential units revenue$450,362 $364,661 $85,701 23.5 %
New homes delivered761 658 103 15.7 %
Average sales price of homes delivered$590.6 $551.8 $38.8 7.0 %

Land and Lots Revenue
(dollars in thousands)		Three Months Ended March 31,
20232022Change%
Lots revenue$1,699 $1,955 $(256)(13.1)%
Land revenue— 27,000 (27,000)(100.0)%
Land and lots revenue$1,699 $28,955 $(27,256)(94.1)%
Lots closed1833(15)(45.5)%
Average sales price of lots closed$94.4 $59.2 $35.2 59.5 %

New Home Orders and Backlog
(dollars in thousands)		Three Months Ended March 31,
20232022Change%
Net new home orders1,067 601 466 77.5 %
Revenue from net new home orders$630,928 $359,829 $271,099 75.3 %
Average selling price of net new home orders$591.3 $598.7 (7.4)(1.2)%
Cancellation rate6.2 %8.0 %(1.8)%(22.5)%
Absorption rate per average active selling community per quarter13.3 8.0 5.3 66.3 %
Average active selling communities80 75 5 6.7 %
Active selling communities at end of period79 76 3 3.9 %
Backlog$550,593 $866,621 $(316,028)(36.5)%
Backlog units843 1,423 (580)(40.8)%
Average sales price of backlog$653.1 $609.0 $44.1 7.2 %
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GREEN BRICK PARTNERS, INC.
SUPPLEMENTAL INFORMATION
(Unaudited)

March 31, 2023December 31, 2022
CentralSoutheastTotalCentralSoutheastTotal
Lots owned
Finished lots2,351 1,190 3,541 1,901 998 2,899 
Lots in communities under development9,674 1,362 11,036 10,309 1,698 12,007 
Land held for future development(1)
6,575 — 6,575 6,575 — 6,575 
Total lots owned18,600 2,552 — 21,152 18,785 2,696 21,481 
Lots controlled
Lots under third party option contracts1,865 3 1,868 2,212 6 2,218 
Land under option for future acquisition and development408 18 426 110 18 128 
Lots under option through unconsolidated development joint ventures1,289 402 1,691 1,289 411 1,700 
Total lots controlled3,562 423 3,985 3,611 435 4,046 
Total lots owned and controlled (2)
22,162 2,975 25,137 22,396 3,131 — 25,527 
Percentage of lots owned83.9 %85.8 %84.1 %83.9 %86.1 %84.2 %
(1) Land held for future development consist of raw land parcels where development activities have been postponed due to market conditions or other factors.
(2) Total lots excludes lots with homes under construction.

The following table presents additional information on the lots we owned as of March 31, 2023 and December 31, 2022.
March 31, 2023December 31, 2022
Total lots owned21,152 21,481 
Add certain lots included in Total Lots Controlled
Land under option for future acquisition and development426 128 
Lots under option through unconsolidated development joint ventures1,691 1,700 
Total lots self-developed23,269 23,309 
Self-developed lots as a percentage of total lots owned and controlled92.6 %91.3 %

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.

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The following table represents the non-GAAP measure of adjusted homebuilding gross margin for the three months ended March 31, 2023 and 2022 and reconciles these amounts to homebuilding gross margin, the most directly comparable GAAP measure.
(Unaudited, in thousands):Three Months Ended March 31,
20232022
Residential units revenue$450,362 $364,661 
Less: Mechanic’s lien contracts revenue(932)(1,598)
Home closings revenue$449,430 $363,063 
Homebuilding gross margin$123,915 $100,973 
Homebuilding gross margin percentage27.6 %27.8 %
Homebuilding gross margin123,915 100,973 
Add back: Capitalized interest charged to cost of revenues3,626 2,861 
Adjusted homebuilding gross margin$127,541 $103,834 
Adjusted homebuilding gross margin percentage28.4 %28.6 %

The following table represents the non-GAAP measure of net debt to total capitalization ratio as of March 31, 2023 and reconciles it to the total debt to capitalization ratio, the most directly comparable GAAP measure.
GrossCash and cash equivalentsNet
Total debt, net of debt issuance costs$348,074 $(177,271)$170,803 
Total Green Brick Partners, Inc. stockholders’ equity1,114,154 — 1,114,154 
Total capitalization$1,462,228 $(177,271)$1,284,957 
Debt to total capitalization ratio23.8 %
Net debt to total capitalization ratio13.3 %

About Green Brick Partners, Inc.
Green Brick Partners, Inc. is a diversified homebuilding and land development company that operates in Texas, Georgia, and Florida and has a non-controlling interest in a Colorado homebuilder, Challenger Homes, located in Colorado Springs. 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 retains interests in related financial services platforms, including Green Brick Title 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 expectations for improvement of cycle times and the impact of such improvement on future deliveries and results of operations; (ii) our expectations for future unit deliveries, the pace of such deliveries and the factors that impact the pace of future deliveries; (iii) our intention to manage sales, pricing and inventory levels for each of our communities; (iv) our strategic advantages and their impact on our growth and results of operations, as well as our positioning amongst public homebuilders; (v) the benefits of our lot and land positions and locations, as well as their impacts on our results and future growth; (vi) our positioning and flexibility to capitalize on market opportunities and grow our market share as well as the impact on our financial and operational performance; (vii) our strategies to maintain and strengthen our balance sheet, cash flows and margins, and our positioning in the industry; (viii) our performance in a volatile market; (ix) our beliefs that we operate among the most advantageous markets in the U.S., the strengths of
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our markets and the future developments within such markets; (ix) the demand for home ownership in the markets in which we operate and our ability to capitalize on such demand, including through our Trophy Brand products; (x) the impact of higher interest rates on home ownership trends; (xi) the ability and speed to ramp up home construction and land development operations, and react to other market factors; (xii) our expectations related to the improvement and timing of margin performance; (xiii) our beliefs related to the levels of unmet demand in our markets and our ability to capitalize on such demand; (xiv) our expectations regarding future returns on equity and long-term value for our shareholders; (xv) our cadence of closings and starts, as well as lot completions in 2023; (xvi) our expectations regarding our competition and ability to grow our market share; and (xvii) our expectations regarding growth and expansion of our Trophy brand, including the timing on opening its new Austin community. 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) general economic conditions, seasonality, cyclicality and competition in the homebuilding industry; (2) changes in macroeconomic conditions, including increased interest rates and inflation, that could adversely impact demand for new homes or the ability of potential buyers to qualify for acceptable financing; (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) significant periods of inflation or deflation; (5) a shortage of qualified labor; (6) an inability to acquire land in our markets at acceptable prices or difficulty in obtaining land-use entitlements; (7) our inability to successfully execute our strategies, including the successful development of our communities within expected time frames and the growth and expansion of our Trophy brand; (8) a failure to recruit, retain or develop highly skilled and competent employees; (9) the geographic concentration of our operations; (10) government regulation risks; (11) adverse changes in availability or volatility of mortgage financing; (12) severe weather events or natural disasters; (13) difficulty in obtaining sufficient capital to fund our growth; (14) our ability to meet our debt service obligations; (15) a decline in the value of our inventories and resulting write-downs of the carrying value of our real estate assets; (16) our ability to adequately self-insure; and (17) changes in accounting standards that adversely affect our reported earnings or financial condition. With respect to repurchases under the Company’s stock repurchase programs, the amount of shares repurchased, if any, and the timing of such repurchases will depend on, among other things, the market price of the Company’s common stock, prevailing from time to time, the nature of other investment opportunities presented to the Company from time to time, the Company’s cash flows from operations, and general economic conditions; compliance with debt covenants; availability and cost of credit; and changes in interest rates. With respect to repurchases under the Company’s stock repurchase programs, the amount of shares repurchased, if any, and the timing of such repurchases will depend on, among other things, the market price of the Company’s common stock, prevailing from time to time, the nature of other investment opportunities presented to the Company from time to time, the Company’s cash flows from operations, and general economic conditions; compliance with debt covenants; availability and cost of credit; and changes in interest rates.

In addition to the risks mentioned above, declines in sales pace, inability to sufficiently reduce cycle times and other factors which we are unable to predict or control, could prevent us from sustaining quarterly delivery pace expectations. Furthermore, our beliefs related to our ability to sustain and improve margin performance are based upon observations of currently existing market conditions and our expectations of future improvement of cycle times, which could be adversely affected by the risk factors mentioned above as well as changes in market conditions and other risks that are currently unpredictable and may be outside of our control. 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
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