ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Green Brick Partners, Inc. |
Delaware | 20-5952523 | |
(State or other jurisdiction of incorporation) | (IRS Employer Identification Number) | |
2805 Dallas Pkwy, Ste 400 Plano, Texas 75093 | (469) 573-6755 | |
(Address of principal executive offices, including Zip Code) | (Registrant’s telephone number, including area code) |
FINANCIAL INFORMATION | |||
Item 1. | |||
Item 2. | |||
Item 3. | |||
Item 4. | |||
OTHER INFORMATION | |||
Item 1. | |||
Item1A. | |||
Item 2. | |||
Item 6. | |||
March 31, 2016 | December 31, 2015 | ||||||
Assets | |||||||
Cash and cash equivalents | $ | 24,457 | $ | 21,207 | |||
Restricted cash | 955 | 94 | |||||
Accounts receivable | 4,126 | 3,314 | |||||
Inventory | 376,050 | 344,132 | |||||
Property and equipment, net | 753 | 802 | |||||
Earnest money deposits | 14,852 | 17,845 | |||||
Deferred income tax assets, net | 79,234 | 80,663 | |||||
Other assets | 5,101 | 5,819 | |||||
Total assets | $ | 505,528 | $ | 473,876 | |||
Liabilities and stockholders' equity | |||||||
Accounts payable | $ | 16,815 | $ | 13,530 | |||
Accrued expenses | 7,241 | 5,719 | |||||
Customer and builder deposits | 9,071 | 6,938 | |||||
Obligations related to land not owned under option agreements | 17,595 | 18,176 | |||||
Borrowings on lines of credit | 67,500 | 47,500 | |||||
Notes payable | 9,988 | 10,158 | |||||
Total liabilities | 128,210 | 102,021 | |||||
Commitments and contingencies (Note 11) | — | — | |||||
Stockholders’ equity | |||||||
Green Brick Partners, Inc. stockholders’ equity | |||||||
Common shares, $0.01 par value: 100,000,000 shares authorized; 48,833,323 issued and outstanding | 488 | 488 | |||||
Additional paid-in capital | 272,112 | 271,867 | |||||
Retained earnings | 90,271 | 87,177 | |||||
Total Green Brick Partners, Inc. stockholders’ equity | 362,871 | 359,532 | |||||
Noncontrolling interests | 14,447 | 12,323 | |||||
Total stockholders’ equity | 377,318 | 371,855 | |||||
Total liabilities and stockholders’ equity | $ | 505,528 | $ | 473,876 |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Sale of residential units | $ | 66,628 | $ | 49,661 | |||
Sale of land and lots | 3,330 | 8,791 | |||||
Total revenues | 69,958 | 58,452 | |||||
Cost of residential units | 51,929 | 35,964 | |||||
Cost of land and lots | 2,340 | 6,278 | |||||
Total cost of sales | 54,269 | 42,242 | |||||
Total gross profit | 15,689 | 16,210 | |||||
Salary expense | (6,174 | ) | (4,862 | ) | |||
Selling, general and administrative expense | (4,032 | ) | (2,939 | ) | |||
Operating profit | 5,483 | 8,409 | |||||
Interest expense | — | (281 | ) | ||||
Depreciation and amortization expense | (56 | ) | (77 | ) | |||
Interest on direct financing leases income | — | 13 | |||||
Other income, net | 516 | 331 | |||||
Income before provision for income taxes | 5,943 | 8,395 | |||||
Income tax provision | 1,453 | 2,207 | |||||
Net income | 4,490 | 6,188 | |||||
Less: net income attributable to noncontrolling interests | 1,396 | 2,170 | |||||
Net income attributable to Green Brick Partners, Inc. | $ | 3,094 | $ | 4,018 | |||
Net income attributable to Green Brick Partners, Inc. per common share: | |||||||
Basic | $0.06 | $0.13 | |||||
Diluted | $0.06 | $0.13 | |||||
Weighted average common shares used in the calculation of net income attributable to Green Brick Partners, Inc. per common share: | |||||||
Basic | 48,814 | 31,346 | |||||
Diluted | 48,814 | 31,346 |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 4,490 | $ | 6,188 | |||
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | |||||||
Depreciation and amortization expense | 56 | 77 | |||||
Share-based compensation | 245 | 83 | |||||
Deferred income taxes, net | 1,429 | 2,001 | |||||
Changes in operating assets and liabilities | |||||||
Increase in restricted cash | (861 | ) | (1 | ) | |||
Increase in accounts receivable | (812 | ) | (177 | ) | |||
Increase in inventory | (32,499 | ) | (15,429 | ) | |||
Decrease (increase) in earnest money deposits | 2,993 | (1,858 | ) | ||||
Decrease (increase) in other assets | 718 | (61 | ) | ||||
Increase (decrease) in accounts payable | 3,285 | (2,222 | ) | ||||
Increase in accrued expenses | 1,522 | 1,084 | |||||
Increase in customer and builder deposits | 2,133 | 255 | |||||
Net cash used in operating activities | (17,301 | ) | (10,060 | ) | |||
Cash flows from investing activities | |||||||
Proceeds from sale of investment in direct financing leases | — | 2,768 | |||||
Acquisition of property and equipment | (7 | ) | (211 | ) | |||
Net cash (used in) provided by investing activities | (7 | ) | 2,557 | ||||
Cash flows from financing activities | |||||||
Borrowings from lines of credit | 30,000 | 7,000 | |||||
Proceeds from notes payable | — | 1,009 | |||||
Repayments of lines of credit | (10,000 | ) | (1,561 | ) | |||
Repayments of notes payable | (170 | ) | (2,410 | ) | |||
Contributions from noncontrolling interests | 2,228 | 45 | |||||
Distributions to noncontrolling interests | (1,500 | ) | (300 | ) | |||
Net cash provided by financing activities | 20,558 | 3,783 | |||||
Net increase (decrease) in cash and cash equivalents | 3,250 | (3,720 | ) | ||||
Cash and cash equivalents at beginning of period | 21,207 | 22,651 | |||||
Cash and cash equivalents at end of period | $ | 24,457 | $ | 18,931 | |||
Supplemental disclosure of cash flow information: | |||||||
Cash paid for interest, net of capitalized interest | $ | — | $ | 453 | |||
Cash paid for taxes | $ | 160 | $ | 273 | |||
Supplemental disclosure of noncash investing and financing activities: | |||||||
Decrease in land not owned under option agreements | $ | 1,032 | $ | 473 | |||
Out-of-period equity adjustment | $ | — | $ | 1,933 |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Basic net income attributable to Green Brick Partners, Inc. per share | |||||||
Net income attributable to Green Brick Partners, Inc. —basic | $ | 3,094 | $ | 4,018 | |||
Weighted-average number of shares outstanding —basic | 48,814 | 31,346 | |||||
Basic net income attributable to Green Brick Partners, Inc. per share | $ | 0.06 | $ | 0.13 | |||
Diluted net income attributable to Green Brick Partners, Inc. per share | |||||||
Net income attributable to Green Brick Partners, Inc. —diluted | $ | 3,094 | $ | 4,018 | |||
Weighted-average number of shares used to compute basic net income attributable to Green Brick Partners, Inc. | 48,814 | 31,346 | |||||
Dilutive effect of stock options and restricted stock awards | — | — | |||||
Weighted-average number of shares outstanding —diluted | 48,814 | 31,346 | |||||
Diluted net income attributable to Green Brick Partners, Inc. per share | $ | 0.06 | $ | 0.13 |
Three Months Ended March 31, | |||||
2016 | 2015 | ||||
Antidilutive options to purchase common stock and restricted stock awards | 296 | 158 |
March 31, 2016 | December 31, 2015 | ||||||
Completed home inventory and residential lots held for sale | $ | 112,567 | $ | 85,342 | |||
Work in process | 242,428 | 236,383 | |||||
Undeveloped land | 5,873 | 6,193 | |||||
Land not owned under option agreements | 15,182 | 16,214 | |||||
Total Inventory | $ | 376,050 | $ | 344,132 |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Interest capitalized at beginning of period | $ | 9,085 | $ | 3,713 | |||
Interest incurred | 708 | 3,800 | |||||
Interest charged to cost of sales | (1,002 | ) | (14 | ) | |||
Interest charged to interest expense | — | (281 | ) | ||||
Interest capitalized at end of period | $ | 8,791 | $ | 7,218 |
March 31, 2016 | December 31, 2015 | ||||||
Promissory note to Inwood National Bank (“Inwood”): | |||||||
Revolving credit facility(1) | 27,500 | 17,500 | |||||
Unsecured revolving credit facility(2) | 40,000 | 30,000 | |||||
Total lines of credit | $ | 67,500 | $ | 47,500 |
(1) | On July 30, 2015, the Company replaced its John's Creek credit facility with a new revolving credit facility with Inwood, which provides for up to $50.0 million and is secured by land owned in John’s Creek, Georgia, Allen, Texas, and Carrollton, Texas. The maturity date for the new revolving credit facility is July 30, 2017. The costs associated with the new revolving credit facility of $0.4 million were deferred and are included in other assets in our consolidated balance sheets. The Company is amortizing these debt issuance costs to interest expense over the term of the new revolving credit facility using the straight line method. Amounts outstanding under the new revolving credit facility is secured by mortgages on real property and security interests in certain personal property (to the extent that such personal property is connected with the use and enjoyment of the real property) that is owned by certain of the Company's subsidiaries, including land owned in John’s Creek, Georgia, Allen, Texas, and Carrollton, Texas. The amounts outstanding under the new revolving credit facility are also guaranteed by certain of the Company's subsidiaries. |
(2) | On December 15, 2015, the Company entered into a credit agreement with the lenders named therein, and Citibank, N.A., as administrative agent, providing for a senior, unsecured revolving credit facility with aggregate lending commitments of up to $40.0 million (“Unsecured Revolving Credit Facility”). Subject to certain terms and conditions, the Company may, at its option, prior to the termination date, increase the amount of the revolving credit facility up to a maximum aggregate amount of $75.0 million. Commitments under the Unsecured Revolving Credit Facility will be available until the period ending December 14, 2018, which period may be extended for additional one year periods, subject to the consent of the lenders and the satisfaction of certain other terms and conditions. Citibank, N.A. and Credit Suisse AG, Cayman Islands Branch have initially committed to provide $25.0 million and $15.0 million, respectively. |
March 31, 2016 | December 31, 2015 | ||||||
Note payable to unrelated third party: | |||||||
Briar Ridge Investments, LTD(1) | $ | 9,000 | $ | 9,000 | |||
Lyons Equities, Inc. Trustee(2) | 988 | 988 | |||||
Subordinated Lot Notes(3) | — | 170 | |||||
Total notes payable | $ | 9,988 | $ | 10,158 |
(1) | On December 13, 2013, a subsidiary of JBGL signed a promissory note for $9.0 million maturing at December 13, 2017, bearing interest at 6.0% per annum and collateralized by land purchased in Allen, Texas. Accrued interest at March 31, 2016 was $0. |
(2) | On May 22, 2015, a subsidiary of JBGL signed a promissory note for $1.0 million maturing on May 22, 2016, bearing interest at 3.5% per annum collateralized by land located in Allen, Texas. Management plans to payoff the note on the maturity date. |
(3) | Subsidiaries of the Company purchased lots under various agreements from unrelated third parties. The sellers of these lots had subordinated a percentage of the lot purchase price to various construction loans of subsidiaries of the Company’s construction loans. Notes were signed in relation to the subordination bearing interest at between 8.0% and 14.0%, collateralized by liens on the homes built on each lot. The sellers released their lien upon payment of principle plus accrued interest at the closing of each individual home to a third party buyer. The subordinated lot notes were paid off as of March 31, 2016. |
Common Stock | Additional Paid-in Capital | Retained Earnings | Total Green Brick Partners, Inc. Stockholders’ Equity | Noncontrolling Interests | Total Stockholders’ Equity | |||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||
Balance at December 31, 2014 | 31,346,084 | $ | 313 | $ | 101,626 | $ | 69,919 | $ | 171,858 | $ | 9,739 | $ | 181,597 | |||||||||||||
Share-based compensation | — | — | 83 | — | 83 | — | 83 | |||||||||||||||||||
Contributions | — | — | — | — | — | 45 | 45 | |||||||||||||||||||
Distributions | — | — | — | — | — | (300 | ) | (300 | ) | |||||||||||||||||
Out of period adjustment | — | — | — | 1,933 | 1,933 | — | 1,933 | |||||||||||||||||||
Net income | — | — | — | 4,018 | 4,018 | 2,170 | 6,188 | |||||||||||||||||||
Balance at March 31, 2015 | 31,346,084 | $ | 313 | $ | 101,709 | $ | 75,870 | $ | 177,892 | $ | 11,654 | $ | 189,546 | |||||||||||||
Balance at December 31, 2015 | 48,833,323 | $ | 488 | $ | 271,867 | $ | 87,177 | $ | 359,532 | $ | 12,323 | $ | 371,855 | |||||||||||||
Share-based compensation | — | — | 245 | — | 245 | — | 245 | |||||||||||||||||||
Contributions | — | — | — | — | — | 2,228 | 2,228 | |||||||||||||||||||
Distributions | — | — | — | — | — | (1,500 | ) | (1,500 | ) | |||||||||||||||||
Net income | — | — | — | 3,094 | 3,094 | 1,396 | 4,490 | |||||||||||||||||||
Balance at March 31, 2016 | 48,833,323 | $ | 488 | $ | 272,112 | $ | 90,271 | $ | 362,871 | $ | 14,447 | $ | 377,318 |
Number of Shares (in thousands) | Weighted Average Grant Date Fair Value per Share | |||||
Nonvested, December 31, 2015 | 23 | $ | 8.73 | |||
Granted | — | $ | — | |||
Vested | — | $ | — | |||
Forfeited | — | $ | — | |||
Nonvested, March 31, 2016 | 23 | $ | 8.73 |
Number of Shares (in thousands) | Weighted Average Exercise Price per Share | Weighted Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in thousands) | |||||||||
Options outstanding, December 31, 2015 | 500 | $ | 7.49 | |||||||||
Granted | — | — | ||||||||||
Exercised | — | — | ||||||||||
Forfeited | — | — | ||||||||||
Options outstanding, March 31, 2016 | 500 | $ | 7.49 | 8.62 | $ | 50 | ||||||
Options exercisable, March 31, 2016 | 100 | $ | 7.49 | 8.62 | $ | 10 |
Number of Shares (in thousands) | Weighted Average Per Share Grant Date Fair Value | |||||
Unvested, December 31, 2015 | 400 | $ | 2.88 | |||
Granted | — | $ | — | |||
Vested | — | $ | — | |||
Forfeited | — | $ | — | |||
Unvested, March 31, 2016 | 400 | $ | 2.88 |
Three Months Ended March 31, | |||||||
(in thousands) | 2016 | 2015 | |||||
Revenues: | |||||||
Builder Operations | |||||||
Texas | $ | 33,581 | $ | 29,088 | |||
Georgia | 33,047 | 20,573 | |||||
Land Development | 3,330 | 8,791 | |||||
$ | 69,958 | $ | 58,452 | ||||
Gross profit: | |||||||
Builder Operations | |||||||
Texas | $ | 8,761 | $ | 7,721 | |||
Georgia | 5,938 | 5,976 | |||||
Land Development | 990 | 2,513 | |||||
$ | 15,689 | $ | 16,210 | ||||
March 31, 2016 | December 31, 2015 | ||||||
Inventory: | |||||||
Builder Operations | |||||||
Texas | $ | 71,513 | $ | 60,768 | |||
Georgia | 179,492 | 158,623 | |||||
Land Development | 125,045 | 124,741 | |||||
$ | 376,050 | $ | 344,132 |
• | cyclicality in the homebuilding industry and adverse changes in general economic conditions; |
• | fluctuations and cycles in value of, and demand for, real estate investments; |
• | significant inflation or deflation; |
• | the unavailability of subcontractors; |
• | labor and raw material shortages and price fluctuations; |
• | the failure to recruit, retain and develop highly skilled and competent employees; |
• | an inability to acquire undeveloped land, partially-finished developed lots and finished lots suitable for residential homebuilding at reasonable prices; |
• | an inability to develop communities successfully or within expected timeframes; |
• | an inability to sell properties in response to changing economic, financial and investment conditions; |
• | risks related to participating in the homebuilding business through controlled homebuilding subsidiaries; |
• | risks relating to buy-sell provisions in the operating agreements governing two builder subsidiaries; |
• | risks related to geographic concentration; |
• | risks related to government regulation; |
• | the interpretation of or changes to tax, labor and environmental laws; |
• | the timing of receipt of regulatory approvals and of the opening of projects; |
• | fluctuations in the market value of land, building lots and housing inventories; |
• | volatility of mortgage interest rates; |
• | the unavailability of mortgage financing; |
• | the number of foreclosures in our markets; |
• | interest rate increases or adverse changes in federal lending programs; |
• | increases in unemployment or underemployment; |
• | any limitation on, or reduction or elimination of, tax benefits associated with owning a home; |
• | the occurrence of severe weather or natural disasters; |
• | high cancellation rates; |
• | competition in the homebuilding, land development and financial services industries; |
• | 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; |
• | risks related to environmental laws and regulations; |
• | 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; |
• | the seasonality of the homebuilding industry; |
• | utility and resource shortages or rate fluctuations; |
• | the failure of employees or other representatives to comply with applicable regulations and guidelines; |
• | future litigation, arbitration or other claims; |
• | uninsured losses or losses in excess of insurance limits; |
• | cost and availability of insurance and surety bonds; |
• | volatility and uncertainty in the credit markets and broader financial markets; |
• | availability, terms and deployment of capital including with respect to the timing and size of share repurchases, acquisitions, joint ventures and other strategic actions; |
• | 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 including those described Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015. |
Our Controlled Builders | Year Formed | Market | Products Offered | Prices Ranges | ||||
The Providence Group of Georgia L.L.C. (“TPG”) | 2011 | Atlanta | Townhomes | $260,000 to $590,000 | ||||
Single family | $315,000 to $1.4 million | |||||||
Luxury homes | $770,000 to $3.0 million | |||||||
CB JENI Homes DFW LLC (“CB JENI”) | 2012 | Dallas | Townhomes | $210,000 to $390,000 | ||||
Single family | $280,000 to $700,000 | |||||||
Centre Living Homes, LLC (“Centre Living”) | 2012 | Dallas | Townhomes | $500,000 to more than $1 million | ||||
Contractor on luxury homes | Up to $2.5 million | |||||||
Southgate Homes DFW LLC (“Southgate”) | 2013 | Dallas | Luxury homes | $600,000 and above |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
(in thousands, except per share data) | |||||||
Sale of residential units | $ | 66,628 | $ | 49,661 | |||
Sale of land and lots | 3,330 | 8,791 | |||||
Total revenues | 69,958 | 58,452 | |||||
Cost of residential units | 51,929 | 35,964 | |||||
Cost of land and lots | 2,340 | 6,278 | |||||
Total cost of sales | 54,269 | 42,242 | |||||
Total gross profit | 15,689 | 16,210 | |||||
Salary expense | (6,174 | ) | (4,862 | ) | |||
Selling, general and administrative expense | (4,032 | ) | (2,939 | ) | |||
Operating profit | 5,483 | 8,409 | |||||
Interest expense | — | (281 | ) | ||||
Other income, net | 460 | 267 | |||||
Income before provision for income taxes | 5,943 | 8,395 | |||||
Income tax provision | 1,453 | 2,207 | |||||
Net income | 4,490 | 6,188 | |||||
Less: net income attributable to noncontrolling interests | 1,396 | 2,170 | |||||
Net income attributable to Green Brick Partners, Inc. | $ | 3,094 | $ | 4,018 | |||
Net income attributable to Green Brick Partners, Inc. per common share: | |||||||
Basic | $0.06 | $0.13 | |||||
Diluted | $0.06 | $0.13 | |||||
Weighted average common shares used in the calculation of net income attributable to Green Brick Partners, Inc. per common share: | |||||||
Basic | 48,814 | 31,346 | |||||
Diluted | 48,814 | 31,346 |
Three Months Ended March 31, | Increase (Decrease) | |||||||||||||
New Home Orders & Backlog | 2016 | 2015 | Change | % | ||||||||||
Net new home orders | 240 | 186 | 54 | 29.0% | ||||||||||
Number of cancellations | 27 | 26 | 1 | 3.8% | ||||||||||
Cancellation rate | 10.1 | % | 12.3 | % | (2.2 | )% | (17.9)% | |||||||
Average selling communities | 44 | 36 | 8 | 22.2% | ||||||||||
Selling communities at end of period | 44 | 37 | 7 | 18.9% | ||||||||||
Backlog ($ in thousands) | $ | 129,190 | $ | 92,754 | $ | 36,436 | 39.3% | |||||||
Backlog (units) | 280 | 242 | 38 | 15.7% | ||||||||||
Average sales price of backlog | $ | 461,393 | $ | 383,281 | $ | 78,112 | 20.4% |
Three Months Ended March 31, | Increase (Decrease) | |||||||||||||
New Homes Delivered and Home Sales Revenue | 2016 | 2015 | Change | % | ||||||||||
New homes delivered | 161 | 145 | 16 | 11.0% | ||||||||||
Home sales revenue ($ in thousands) | $ | 66,628 | $ | 49,661 | $ | 16,967 | 34.2% | |||||||
Average sales price of home delivered | $ | 413,839 | $ | 342,490 | $ | 71,349 | 20.8% |
Three Months Ended March 31, | ||||||||||||||
Homebuilding ($ in thousands) | 2016 | % | 2015 | % | ||||||||||
Home sales revenue | $ | 66,628 | 100.0 | % | $ | 49,661 | 100.0 | % | ||||||
Cost of home sales | $ | 51,929 | 77.9 | % | $ | 35,964 | 72.4 | % | ||||||
Homebuilding gross margin | $ | 14,699 | 22.1 | % | $ | 13,697 | 27.6 | % |
($ in thousands) | Three Months Ended March 31, | As Percentage of Related Revenue | ||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||
Land development | $ | 55 | $ | 324 | 1.7 | % | 3.7 | % | ||||||
Builder operations | $ | 6,119 | $ | 4,538 | 9.2 | % | 9.1 | % |
($ in thousands) | Three Months Ended March 31, | As Percentage of Related Revenue | ||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||
Land development | $ | 227 | $ | 260 | 6.8 | % | 3.0 | % | ||||||
Builder operations | $ | 3,805 | $ | 2,679 | 5.7 | % | 5.4 | % |
March 31, 2016 | December 31, 2015 | ||||
Lots Owned(1) | |||||
Texas | 2,533 | 2,659 | |||
Georgia | 1,203 | 991 | |||
Total | 3,736 | 3,650 | |||
Lots Controlled(1)(2) | |||||
Texas | 384 | 326 | |||
Georgia | 552 | 758 | |||
Total | 936 | 1,084 | |||
Total Lots Owned and Controlled(1) | 4,672 | 4,734 |
(1) | The land use assumptions used in the above table may change over time. |
(2) | Lots controlled excludes homes under construction. |
• | Operating activities. Net cash used in operating activities for the three months ended March 31, 2016 was $17.3 million, compared to net cash used of $10.1 million during the three months ended March 31, 2015. The change was primarily attributable to (a) changes in working capital associated with inventory, as inventory increased by 9.3% for the three months ended March 31, 2016 compared to a 5.5% increase in inventory for the three months ended March 31, 2015, partially offset by (b) changes in working capital associated with (i) accounts payable, as accounts payable increased by 24.3% for the three months ended March 31, 2016 compared to a decrease of 16.4% during the three months ended March 31, 2015, (ii) earnest money deposits, as earnest money deposits decreased by 16.8% for the three months ended March 31, 2016 compared to an increase of 27.8% during the three months ended March 31, 2015, and (iii) customer and builder deposits, as customer and builder deposits increased 30.7% for the three months ended March 31, 2016 compared to an increase of 2.6% during the three months ended March 31, 2015. |
• | Investing activities. Net cash used in investing activities for the three months ended March 31, 2016 was $7,000, compared to net cash provided of $2.6 million during the three months ended March 31, 2015. The change was primarily due to a decrease in proceeds from investment in direct financing leases for the three months ended March 31, 2016. |
• | Financing activities. Net cash provided by financing activities for the three months ended March 31, 2016 was $20.6 million, compared to net cash provided of $3.8 million during the three months ended March 31, 2015. The change was primarily due to an increase in line of credit borrowings of $23.0 million, partially offset by an increase in repayments of notes payable and line of credit of $6.2 million during the three months ended March 31, 2016. |
Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1) | Maximum Number of Shares That May Yet Be Purchased Under Plans or Programs(1) | ||||||||||
January 1 - January 31, 2016 | — | $ | — | — | — | ||||||||
February 1 - February 29, 2016 | — | $ | — | — | — | ||||||||
March 1 - March 31, 2016 | — | $ | — | — | 1,000 | ||||||||
Total | — | $ | — | — | 1,000 |
(1) | Our share repurchase program was approved by our Board of Directors in March 2016 and allows us to repurchase up to 1,000,000 shares of our common stock through 2017 or a determination by the Board to discontinue the repurchase program. The share repurchase program does not obligate us to acquire any specific number of shares. |
Number | Description | |
31.1* | Certification of the Company’s Chief Executive Officer Pursuant To Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 7241). | |
31.2* | Certification of the Company’s Chief Financial Officer Pursuant To Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 7241). | |
32.1* | Certification of the Company’s Chief Executive Officer Pursuant To Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350). | |
32.2* | Certification of the Company’s Chief Financial Officer Pursuant To Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350). | |
101.INS* | XBRL Instance Document. | |
101.SCH* | XBRL Taxonomy Extension Schema Document. | |
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document. | |
101.LAB* | XBRL Taxonomy Extension Label Linkbase Document. | |
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document. |
GREEN BRICK PARTNERS, INC. | |
/s/ James R. Brickman | |
By: James R. Brickman | |
Its: Chief Executive Officer | |
/s/ Richard A. Costello | |
By: Richard A. Costello | |
Its: Chief Financial Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Green Brick Partners, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors: |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
By: | /s/ James R. Brickman |
Name: | James R. Brickman |
Title: | Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Green Brick Partners, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors: |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
By: | /s/ Richard A. Costello |
Name: | Richard A. Costello |
Title: | Chief Financial Officer |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By: | /s/ James R. Brickman |
Name: | James R. Brickman |
Title: | Chief Executive Officer |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By: | /s/ Richard A. Costello |
Name: | Richard A. Costello |
Title: | Chief Financial Officer |
Document And Entity Information - shares |
3 Months Ended | |
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Mar. 31, 2016 |
May. 04, 2016 |
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Document And Entity Information [Abstract] | ||
Entity Registrant Name | Green Brick Partners, Inc. | |
Entity Central Index Key | 0001373670 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 48,899,198 |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Mar. 31, 2016 |
Dec. 31, 2015 |
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Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares outstanding (in shares) | 48,833,323 | 48,833,323 |
Basis of Presentation and Significant Accounting Policies |
3 Months Ended |
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Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Significant Accounting Policies | BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES When used in these notes, references to the “Company”, “Green Brick”, “we”, “us” or “our” refer to the combined company, which has been renamed Green Brick Partners, Inc. and its subsidiaries, resulting from the acquisition by BioFuel Energy Corp. and its then consolidated subsidiaries (“BioFuel”) of JBGL Builder Finance LLC and its consolidated subsidiaries and affiliated companies (collectively, “Builder Finance”), and JBGL Capital Companies (“Capital”), a combined group of commonly managed limited liability companies and partnerships (collectively with Builder Finance, “JBGL”) by means of a reverse recapitalization transaction on October 27, 2014. Green Brick Partners, Inc. (formerly named BioFuel Energy Corp.) was incorporated as a Delaware corporation on April 11, 2006, to invest solely in BioFuel Energy, LLC, a limited liability company organized on January 25, 2006, to build and operate ethanol production facilities in the Midwestern United States. On November 22, 2013, the Company disposed of its ethanol plants and all related assets. Following the disposition of these production facilities, we were a public shell company with no substantial operations. On June 10, 2014, the Company entered into a definitive transaction agreement with the owners of JBGL, which provided that we would acquire JBGL for $275 million, payable in cash and shares of our common stock (the “Transaction”). JBGL is a real estate operator involved in the purchase and development of land for residential use, construction lending and home building operations. The Transaction was completed on October 27, 2014 (the “Transaction Date”). Pursuant to the terms of the Transaction, we paid the $275 million purchase price with approximately $191.8 million in cash and the remainder in 11,108,500 shares of our common stock valued at approximately $7.49 per share. The cash portion of the purchase price was primarily funded from the proceeds of a $70.0 million rights offering conducted by the Company (the $70.0 million includes proceeds from purchases of shares of common stock by certain funds and accounts managed by Greenlight Capital, Inc. and its affiliates (“Greenlight”) and Third Point LLC and its affiliates (“Third Point”)) and $150.0 million of debt financing provided by Greenlight pursuant to a loan agreement, with the lenders from time to time party thereto (the “Loan Agreement”), which provided for a five year term loan facility (the “Term Loan Facility”). In 2015, the Loan Agreement was repaid in full. The $70.0 million rights offering included a registered offering by the Company of transferable rights to the public holders of its common stock, as of September 15, 2014 (the “Rights Offering”) to purchase additional shares of common stock. Each right permitted the holder to purchase, at a rights price ultimately equal to $5.00 per share of common stock, 2.2445 shares of common stock. 4,843,384 shares of common stock were purchased in the public Rights Offering for aggregate gross proceeds of approximately $24.2 million. In addition to the Rights Offering, Greenlight and Third Point participated in a private rights offering to purchase additional shares of common stock pursuant to commitment letters. Pursuant to its commitment letter, Third Point agreed to participate in the private rights offering for its full basic subscription privilege in the Rights Offering and to purchase, simultaneously with the consummation of the Rights Offering to the public, all of the available shares not otherwise sold in the Rights Offering following the exercise of all other public holders’ basic subscription privileges. Pursuant to such commitment letters, Greenlight purchased 4,957,618 shares of common stock for aggregate gross proceeds of approximately $24.8 million and Third Point purchased 4,198,998 shares of common stock for aggregate gross proceeds of approximately $21.0 million. At the time the Transaction was completed, BioFuel was a non-operating public shell corporation with nominal operations and assets consisting of cash, deferred tax assets, and nominal other nonoperating assets. As a result of the Transaction the owners and management of JBGL gained effective operating control of the combined company. As of the Transaction Date, BioFuel did not meet the definition of a business for accounting purposes. Accordingly, for financial reporting purposes, the Transaction was deemed to be a capital transaction in substance and recorded as a reverse recapitalization of JBGL whereby JBGL is deemed to be the continuing, surviving entity for accounting purposes, but through reorganization, has deemed to have adopted the capital structure of BioFuel. Because the acquisition was considered a reverse recapitalization for accounting purposes, the combined historical financial statements of JBGL became our historical financial statements and from the completion of the acquisition on October 27, 2014, the financial statements have been prepared on a consolidated basis. The assets and liabilities of BioFuel have been brought forward at their book value and no goodwill has been recognized in connection with the Transaction. As a result of the Transaction, Green Brick changed its business direction and is now in the real estate industry. We are a uniquely structured company that combines residential land development and homebuilding. We acquire and develop land, provide land and construction financing to our controlled builders and participate in the profits of our controlled builders. Our core markets are in the high growth U.S. metropolitan areas of Dallas, Texas and Atlanta, Georgia. We are engaged in all aspects of the homebuilding process, including land acquisition and development, entitlements, design, construction, marketing and sales and the creation of brand images at our residential neighborhoods and master planned communities. The consolidated financial statements set forth in this Quarterly Report on Form 10-Q consist of JBGL and BioFuel Energy, LLC. The consolidated financial statements for all periods prior to the reverse recapitalization are the historical financial statements of JBGL, and have been retroactively restated to give effect to the Transaction. Basis of Presentation and Principles of Consolidation The unaudited consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) as set forth in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) and applicable regulations of the Securities and Exchange Commission (“SEC”), but do not include all of the information and footnotes required for complete financial statements. In the opinion of management, the accompanying consolidated financial statements for the periods presented reflect all adjustments, of a normal, recurring nature, necessary to fairly state our financial position, results of operations and cash flows. These consolidated financial statements should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2015, included in our Annual Report on Form 10-K filed with the SEC on March 30, 2016. Our operating results for the three months ended March 31, 2016 are not necessarily indicative of the results that may be expected for any future periods. The consolidated financial statements include the historic accounts of JBGL and are consolidated with Green Brick beginning October 27, 2014. All intercompany balances and transactions have been eliminated in consolidation. Investments in which the Company directly or indirectly has an interest of more than 50 percent and/or is able to exercise control over the operations have been fully consolidated and noncontrolling interests are stated separately in the consolidated financial statements as required under the provisions of FASB ASC 810, Consolidations. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes, including the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. Noncontrolling Interests We own 50% controlling interests in several builders. The financial statements of these builders are consolidated in our consolidated financial statements. The noncontrolling interests attributable to the 50% minority interests not owned by us are included as part of noncontrolling interests on the consolidated balance sheets. Segment Information The Company’s operations are organized into two reportable segments: builder operations and land development. Builder operations consist of two operating segments: Texas and Georgia. In accordance with ASC 280, Segment Reporting, in determining the most appropriate reportable segments, we considered similar economic and other characteristics, geography including product types, production processes, average selling prices, gross profits, suppliers, land acquisition results, and underlying demand and supply. Reclassifications Depreciation of model home furnishings for the three months ended March 31, 2015 has been reclassified from depreciation and amortization expense in the accompanying consolidated statements of income to cost of residential units to conform to the current period presentation. Cash related to refundable customer deposits, which are not held in escrow, has been reclassified from restricted cash in the accompanying consolidated balance sheets as of December 31, 2015 and the accompanying consolidated statements of cash flows for the three months ended March 31, 2015 to cash and cash equivalents to conform to the current period presentation. Out-of-Period Adjustment During the fourth quarter ended December 31, 2015, the Company recorded an out-of-period adjustment associated with a $1.9 million overaccrual of distributions payable recorded during the fourth quarter ended December 31, 2014. As a result, as of December 31, 2014, accrued expenses was overstated and retained earnings was understated by $1.9 million. After evaluating the quantitative and qualitative aspects of the out-of-period adjustment, management has determined that the adjustment is not material to any prior period financial statements. Recent Accounting Pronouncements In May 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The standard will replace most existing revenue recognition guidance in GAAP when it becomes effective. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which delayed the effective date of ASU No. 2014-09 by one year. ASU No. 2014-09 is effective for the Company beginning on January 1, 2018. Early adoption is permitted for reporting periods beginning after December 15, 2016. The standard permits the use of either the full retrospective approach or the modified retrospective approach. The Company has not yet selected a transition method and is currently evaluating the effect that the standard will have on its consolidated financial statements and related disclosures. In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis, which amends the consolidation requirements in ASC 810, primarily related to limited partnerships and VIEs. This standard was effective for the Company beginning on January 1, 2016. The adoption of this standard did not have a material effect on the Company’s consolidated financial statements and related disclosures. In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This standard was effective for the Company beginning on January 1, 2016. In August 2015, the FASB issued ASU No. 2015-15, Interest — Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements — Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting, which clarified that the SEC staff would not object to an entity deferring and presenting debt issuance costs related to a line-of-credit arrangement as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of such arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. As permitted, the Company is deferring and presenting debt issuance costs related to its lines of credit as assets and subsequently amortizing the costs straight line over the term of the lines of credit. In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, as part of its simplification initiative. The standard amends the existing guidance to require that deferred income tax liabilities and assets be classified as noncurrent in a classified balance sheet, and eliminates the prior guidance which required an entity to separate deferred tax liabilities and assets into a current amount and a noncurrent amount in a classified balance sheet. The standard is effective for the Company beginning on January 1, 2017. Early adoption is permitted as of the beginning of an interim or annual period. Additionally, the new guidance may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The Company does not believe that the adoption of this standard will have a material effect on its consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU No. 2016-02, Leases, which requires an entity that leases assets to classify the leases as either finance or operating leases and to record assets and liabilities for the rights and obligations created by long-term leases, regardless of the lease classification. The lease classification will determine whether the lease expense is recognized based on an effective interest rate method or on a straight line basis over the term of the lease. This standard is effective for the Company beginning on January 1, 2019 and must be adopted using a modified retrospective approach. The Company does not believe that the adoption of this standard will have a material effect on its consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which is intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations and whether an entity reports revenue on a gross or net basis. This standard does not change the core principle of the guidance stated in ASU 2014-09. This standard is effective for the Company beginning on January 1, 2018. The Company has not yet selected a transition method and is currently evaluating the effect that this standard will have on its consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which simplifies several aspects related to the accounting for share-based payment transactions, including the accounting for income taxes, statutory tax withholding requirements and classification on the statement of cash flows. This standard is effective for the Company beginning on January 1, 2017. The Company is currently evaluating the effect that this standard will have on its consolidated financial statements and related disclosures. |
Net Income Attributable to Green Brick Partners, Inc. Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Attributable to Green Brick Partners, Inc. Per Share | NET INCOME ATTRIBUTABLE TO GREEN BRICK PARTNERS, INC. PER SHARE The Company's restricted stock awards have the right to receive forfeitable dividends on an equal basis with common stock and therefore are not considered participating securities that must be included in the calculation of net income per share using the two-class method. Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during each period, adjusted for non-vested shares of restricted stock awards during each period. Diluted earnings per share is calculated using the treasury stock method and includes the effect of all dilutive securities, including stock options and restricted stock awards. The computation of basic and diluted net income attributable to Green Brick Partners, Inc. per share using the treasury stock method is as follows (in thousands, except per share amounts):
The following securities that could potentially dilute earnings per share in the future are not included in the determination of diluted net income attributable to Green Brick Partners, Inc. per common share (in thousands):
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Inventory |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory | INVENTORY Inventory consists of land in the process of development, undeveloped land, developed lots, completed homes, raw land scheduled for development, and land not owned under option agreements in Texas and Georgia. Inventory is valued at cost unless the carrying value is determined to be not recoverable in which case the affected inventory is written down to fair value. Cost includes any related pre-acquisition costs that are directly identifiable with a specific property so long as those pre-acquisition costs are recoverable at the sale of the property. A summary of inventory is as follows (in thousands):
The Company capitalizes interest costs incurred to inventory during active development and other qualifying activities. Interest capitalized as cost of inventory is charged to cost of sales as related homes, land and/or lots are closed. Interest incurred on undeveloped land is directly expensed and included in interest expense in our consolidated statements of income. Interest costs incurred, capitalized and expensed were as follows (in thousands):
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | DEBT Lines of Credit Lines of credit outstanding at March 31, 2016 and December 31, 2015 consist of the following (in thousands):
The new revolving credit facility is subject to a borrowing base limitation equal to the sum of 50% of the total value of land and 60% of the total value of lots owned by certain of the Company's subsidiaries, each as determined by an independent appraiser, with the value of land being restricted from being more than 50% of the borrowing base. Outstanding borrowings under the new revolving credit facility bear interest at a floating rate per annum equal to the rate announced by Bank of America, N.A., from time to time, as its “Prime Rate” (the “Index”) with such adjustments to the interest rate being made on the effective date of any change in the Index. Notwithstanding the foregoing, the interest may not, at any time, be less than 4% per annum or more than the lesser amount of 18% and the highest maximum rate allowed by applicable law. Beginning on August 30, 2015 and continuing on the 30th day of each consecutive month thereafter until the revolving credit facility matures on July 30, 2017, the Company must pay interest on the unpaid principal amount. The entire unpaid principal balance and any accrued but unpaid interest is due and payable on the maturity date. On May 3, 2016, the Company amended the new revolving credit facility. The amended revolving credit facility is subject to a borrowing base limitation equal to the sum of 50% of the total value of land and 65% of the total value of lots owned by certain of the Company's subsidiaries, each as determined by an independent appraiser, with the value of land being restricted from being more than 65% of the borrowing base. Beginning on August 1, 2017, a non-usage fee equal to 0.25% of the average unfunded amount of the $50.0 million commitment amount over a trailing 12 month period is due on or before August 1st of each year during the term of the amended revolving credit facility. The maturity date has been extended to May 1, 2019. Under the terms of the new revolving credit facility, the Company is required, among other things, to maintain minimum multiples of net worth in excess of the outstanding new revolving credit facility balance, minimum interest coverage and maximum leverage. The Company was in compliance with these financial covenants under the revolving credit facility as of March 31, 2016.
The costs associated with the Unsecured Revolving Credit Facility of $0.5 million were deferred and are included in other assets in our consolidated balance sheets. The Company is amortizing these debt issuance costs to interest expense over the term of the Unsecured Revolving Credit Facility using the straight line method. The Unsecured Revolving Credit Facility provides for interest rate options on advances at rates equal to either: (x) in the case of base rate advances, the highest of (i) Citibank’s base rate, (ii) the federal funds rate plus 0.5%, and (iii) the one-month LIBOR plus 1.0%, in each case plus 1.5%; or (y) in the case of Eurodollar rate advances, the reserve adjusted LIBOR plus 2.5%. Interest on amounts borrowed under the Unsecured Revolving Credit Facility is payable in arrears quarterly on the last day of each March, June, September and December during such periods. At March 31, 2016, the interest rate on outstanding borrowings under the Credit Facility was 2.9% per annum. The Company will pay the lenders a commitment fee on the amount of the unused commitments on a quarterly basis at a rate per annum equal to 0.45%. Outstanding borrowings under the Unsecured Revolving Credit Facility are subject to, among other things, a borrowing base. The borrowing base limitation is equal to the sum of: 100% of unrestricted cash (in excess of $15.0 million); 85% of the book value of model homes, construction in progress homes, sold completed homes, and speculative homes (subject to certain limitations on the age and number of speculative homes and model homes); 65% of the book value of finished lots and land under development; and 50% of the book value of entitled land (subject to certain limitations on the value of entitled land and land under development as a percentage of the borrowing base). Additionally, under the terms of the Unsecured Revolving Credit Facility, the Company is required, among other things, to maintain compliance with various covenants, including financial covenants relating to a maximum Leverage Ratio, a minimum Interest Coverage Ratio, and a minimum Consolidated Tangible Net Worth, each as defined therein. The Company's compliance with these financial covenants is measured by calculations and metrics that are specifically defined or described by the terms of the Unsecured Revolving Credit Facility. The Company was in compliance with these covenants as of March 31, 2016. Notes Payable Notes payable outstanding at March 31, 2016 and December 31, 2015 consist of the following (in thousands):
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Stockholders' Equity |
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Stockholders' Equity Attributable to Parent [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | STOCKHOLDERS’ EQUITY A summary of changes in stockholders’ equity is presented below (dollars in thousands):
Equity Offering 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. All of the shares were sold by the Company pursuant to an effective shelf registration statement previously filed with the SEC. The Equity Offering resulted in net proceeds to Green Brick of approximately $170.0 million, after deducting underwriting discounts and offering expenses. On July 1, 2015, Green Brick used approximately $154.9 million of the net proceeds from the Equity Offering to repay all of the outstanding principal, interest and a prepayment premium under the Term Loan Facility. Upon repayment, the Term Loan Facility was terminated and all security interests in, and all liens held by Greenlight with respect to, the assets of Green Brick securing the amounts owed under the Term Loan Facility were terminated and released. Green Brick used the remaining net proceeds for working capital and general corporate purposes. |
Share Repurchase Program |
3 Months Ended |
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Mar. 31, 2016 | |
Equity [Abstract] | |
Share Repurchase Program | SHARE REPURCHASE PROGRAM In March 2016, the Company's Board of Directors authorized a share repurchase program of up to 1,000,000 shares of its common stock through 2017. The timing, volume and nature of share repurchases will be at the discretion of management and dependent on market conditions, corporate and regulatory requirements and other factors, and may be suspended or discontinued at any time. The authorized repurchases will be made from time to time in the open market, through block trades or in privately negotiated transactions. No assurance can be given that any particular amount of common stock will be repurchased. All or part of the repurchases may be implemented under a Rule 10b5-1 trading plan, which would allow repurchases under pre-set terms at times when we might otherwise be prevented from doing so under insider trading laws or because of self-imposed blackout periods. This repurchase program may be modified, extended or terminated at the discretion of our Board of Directors at any time. We intend to finance the repurchases with available cash. No shares were repurchased during the three months ended March 31, 2016. |
Share-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation | SHARE-BASED COMPENSATION We measure and account for share-based awards in accordance with ASC Topic 718, “Compensation - Stock Compensation”. Share-based compensation expense associated with stock options with vesting contingent upon the achievement of service conditions is recognized on a straight-line basis, net of estimated forfeitures of unvested stock options, over the requisite service period the awards are expected to vest. We estimate the aggregate intrinsic value of stock options with vesting contingent upon the achievement of service conditions as of the date the award was granted using the Black-Scholes option pricing model. The Black-Scholes option-pricing model requires the use of certain input variables, such as expected volatility, risk-free interest rate and expected award life. Share-Based Award Activity A summary of restricted stock awards activity during the three months ended March 31, 2016 is as follows:
A summary of stock option activity during the three months ended March 31, 2016 is as follows:
A summary of our unvested stock options during the three months ended March 31, 2016 is as follows:
Valuation of Share-Based Awards We utilize the Black-Scholes option pricing model for estimating the grant date fair value of stock options. There were no stock options issued during the three months ended March 31, 2016 and March 31, 2015. Share-Based Compensation Expense Share-based compensation expense was $0.2 million and $0.1 million for the three months ended March 31, 2016 and March 31, 2015, respectively. At March 31, 2016, the estimated total remaining unamortized share-based compensation expense related to unvested restricted stock awards and stock options, net of forfeitures, was $1.0 million which is expected to be recognized over a weighted-average period of 3.2 years. |
Income Taxes |
3 Months Ended |
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Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES We recorded an income tax provision of $1.5 million and $2.2 million for the three months ended March 31, 2016 and March 31, 2015, respectively. The effective tax rate for the three months ended March 31, 2016 and March 31, 2015 was 24.4% and 26.3%, respectively. The effective tax rate for the three months ended March 31, 2016 and March 31, 2015 is driven by the statutory tax rate benefit related to non-controlled earnings and state income taxes. In accordance with ASC Topic 740, “Income Taxes” (“ASC 740”), the Company assesses the recoverability of deferred tax assets and the need for a valuation allowance on an ongoing basis. In making this assessment, management considers all available positive and negative evidence and available income tax planning to determine whether it is more-likely-than-not that some portion or all of the deferred tax assets will be realized in future periods. This assessment requires significant judgment and estimates involving current and deferred income taxes, tax attributes relating to the interpretation of various tax laws, historical bases of tax attributes associated with certain assets and limitations surrounding the realization of deferred tax assets. As of March 31, 2016, we had deferred tax assets of $79.2 million, which was net of a valuation allowance in the amount of $1.2 million relating to state loss carryforwards. Our deferred tax asset valuation allowance remained unchanged during the three months ended March 31, 2016 from December 31, 2015. As of December 31, 2015, we had $158.9 million of federal net operating loss carryforwards that will expire beginning with the year ending December 31, 2029. We also have approximately $21.6 million of state net operating loss carryforwards that have varying dates of expiration. We believe it is more-likely-than-not that the state loss carryforwards will expire prior to their utilization. As a result, a valuation allowance in the amount of $21.6 million is recorded against the state loss carryforwards in full. At March 31, 2016 and December 31, 2015, the Company had no unrecognized tax benefit. Our policy is to accrue interest and penalties on unrecognized tax benefits and include them in federal income tax expense. |
Related Party Transactions |
3 Months Ended |
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Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS During the three months ended March 31, 2016 and 2015, the Company had related party transactions through the normal course of business. These transactions include the following: On October 27, 2014, in connection with the Transaction, the Company entered into the Loan Agreement, a guaranty and a pledge and security agreement with certain funds and accounts managed by Greenlight, our largest shareholder. Greenlight beneficially owns approximately 49.4% of the voting power of the Company. The Loan Agreement provided for a five year Term Loan Facility in an aggregate principal amount of $150.0 million which funded part of the Transaction. Certain subsidiaries of the Company guaranteed obligations under the Term Loan Facility pursuant to the guaranty. The Term Loan Facility bore interest at 9.0% per annum, payable quarterly, from October 27, 2014 through the first anniversary thereof and 10.0% per annum thereafter. On July 1, 2015 we used approximately $154.9 million of the net proceeds from the Equity Offering to repay all of the outstanding principal, interest and a prepayment premium under the Term Loan Facility. See Note 5 for further discussion of this repayment. In 2012, we formed Centre Living Homes, LLC (“Centre Living”), a builder that focuses on a limited number of homes and luxury townhomes each year in the Dallas, Texas market. Trevor Brickman, the son of Green Brick's Chief Executive Officer, is the President of Centre Living. Effective as of January 1, 2015, Centre Living's operating agreement was amended and restated to the same general terms as with our other builders, such that Green Brick's ownership interest in Centre Living is 50% and Trevor Brickman's ownership interest is 50% for future operations beginning January 1, 2015. Subsequent to this amendment, Green Brick has 51% voting control over the operations of Centre Living. As such, 100% of Centre Living's operations are included within our consolidated financial statements for the three months ended March 31, 2016. The noncontrolling interest attributable to Centre Living was $0.1 million and $0.3 million as of March 31, 2016 and December 31, 2015. In November 2015, the Company purchased 12 lots from an entity affiliated with the president of TPG, one of its controlled builders. The lots are part of a 92-townhome community, Glens at Sugarloaf in Atlanta. No deposits were paid by the Company in contracting for the lots. The total paid for the lots in 2015 was $1.0 million. During March 2016, the Company purchased the remaining 80 townhome lots within the community at a price of $4.8 million from the affiliated entity. During March 2016, the Company purchased undeveloped land for an eventual 83 lot community, Academy Street in Atlanta. Simultaneously, the Company entered into a partnership agreement with an entity affiliated with the president of TPG to develop the community for sale of the lots to TPG. Contributions, voting percentages, and profits will be 80% for the Company and 20% for the affiliated entity. Total capital contributions are estimated at $12.0 million. During March 2016, the Company purchased undeveloped land for an eventual 73-townhome community, Suwanee Station in Atlanta. Simultaneously, the Company entered into a partnership agreement with an entity affiliated with the president of TPG to develop the community for sale of the lots to TPG. Contributions, voting percentages, and profits will be 50% for the Company and 50% for the affiliated entity. Total capital contributions are estimated at $2.0 million. |
Fair Value Measurements |
3 Months Ended |
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Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS Fair Value of Financial Instruments The Company’s financial instruments, none of which are held for trading purposes, include cash and cash equivalents, restricted cash, accounts receivable, notes receivable, investment in direct financing lease, earnest money deposits, other assets, accounts payable, accrued liabilities, customer and builder deposits, obligations related to land not owned under option agreements, borrowings on lines of credit, and notes payable. The Company estimates that due to the short term nature of underlying instruments or the proximity of the underlying transaction to the applicable reporting date that the fair value of all financial instruments does not differ materially from the aggregate carrying values recorded in the consolidated financial statements at March 31, 2016 and December 31, 2015. Per the fair value hierarchy, level 1 financial instruments include: cash and cash equivalents, restricted cash, earnest money deposits, and customer and builder deposits. All other instruments are deemed to be level 3. Fair Value of Nonfinancial Instruments Nonfinancial assets and liabilities include items such as inventory and long lived assets that are measured at cost unless the carrying value is determined to be not recoverable in which case the affected instrument is written down to fair value. During the three months ended March 31, 2016 and the year ended December 31, 2015, the Company did not record any fair value adjustments to those financial and nonfinancial assets and liabilities measured at fair value on a nonrecurring basis. |
Commitments and Contingencies |
3 Months Ended |
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Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Warranties The Company accrues an estimate of its exposure to warranty claims based on both current and historical home sales data and warranty costs incurred. The Company offers homeowners a comprehensive third party warranty on each home. Homes are generally covered by a ten year warranty for qualified and defined structural defects, one year for defects and products used, and two years for electrical, mechanical and plumbing systems. The Company accrues up to $1,500 per home closed for future warranty claims, and evaluates the adequacy of the reserve annually. Warranty accruals are included within accrued expenses in the consolidated balance sheets. Commitments The Company has leases associated with office space in Georgia and Texas which are classified as operating leases. Rent expense under these leases are included in the selling, general and administrative expense in the consolidated statements of income. Legal Matters Lawsuits, claims and proceedings may be instituted or asserted against us in the normal course of business. The Company is also subject to local, state and federal laws and regulations related to land development activities, house construction standards, sales practices, employment practices and environmental protection. As a result, the Company may be subject to periodic examinations or inquiry by agencies administering these laws and regulations. The Company records a reserve for potential legal claims and regulatory matters when they are probable of occurring and a potential loss is reasonably estimable. The Company accrues for these matters based on facts and circumstances specific to each matter and revises these estimates when necessary. In view of the inherent difficulty of predicting outcomes of legal claims and related contingencies, the Company generally cannot predict their ultimate resolution, related timing or eventual loss. If evaluations indicate loss contingencies that could be material are not probable, but are reasonably possible, the Company will disclose their nature with an estimate of possible range of losses or a statement that such loss is not reasonably estimable. The Company has no litigation outstanding as of March 31, 2016. At March 31, 2016 and December 31, 2015, the Company did not have any accruals for asserted or unasserted matters. |
Segment Information |
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Segment Information | SEGMENT INFORMATION Financial information relating to the Company’s reportable segments is as follows. Operational results of each reportable segment are not necessarily indicative of the results that would have been achieved had the reportable segment been an independent, stand-alone entity during the periods presented.
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Subsequent Event |
3 Months Ended |
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Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Event | SUBSEQUENT EVENT On May 3, 2016, the Company amended its Inwood revolving credit facility. The amended revolving credit facility is subject to a borrowing base limitation equal to the sum of 50% of the total value of land and 65% of the total value of lots owned by certain of the Company's subsidiaries, each as determined by an independent appraiser, with the value of land being restricted from being more than 65% of the borrowing base. Beginning on August 1, 2017, a non-usage fee equal to 0.25% of the average unfunded amount of the $50.0 million commitment amount over a trailing 12 month period is due on or before August 1st of each year during the term of the amended revolving credit facility. The maturity date has been extended to May 1, 2019. |
Basis of Presentation and Significant Accounting Policies (Policies) |
3 Months Ended |
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Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The unaudited consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) as set forth in the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) and applicable regulations of the Securities and Exchange Commission (“SEC”), but do not include all of the information and footnotes required for complete financial statements. In the opinion of management, the accompanying consolidated financial statements for the periods presented reflect all adjustments, of a normal, recurring nature, necessary to fairly state our financial position, results of operations and cash flows. These consolidated financial statements should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2015, included in our Annual Report on Form 10-K filed with the SEC on March 30, 2016. Our operating results for the three months ended March 31, 2016 are not necessarily indicative of the results that may be expected for any future periods. The consolidated financial statements include the historic accounts of JBGL and are consolidated with Green Brick beginning October 27, 2014. All intercompany balances and transactions have been eliminated in consolidation. Investments in which the Company directly or indirectly has an interest of more than 50 percent and/or is able to exercise control over the operations have been fully consolidated and noncontrolling interests are stated separately in the consolidated financial statements as required under the provisions of FASB ASC 810, Consolidations. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes, including the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. |
Noncontrolling Interests | Noncontrolling Interests We own 50% controlling interests in several builders. The financial statements of these builders are consolidated in our consolidated financial statements. The noncontrolling interests attributable to the 50% minority interests not owned by us are included as part of noncontrolling interests on the consolidated balance sheets. |
Segment Reporting | Segment Information The Company’s operations are organized into two reportable segments: builder operations and land development. Builder operations consist of two operating segments: Texas and Georgia. In accordance with ASC 280, Segment Reporting, in determining the most appropriate reportable segments, we considered similar economic and other characteristics, geography including product types, production processes, average selling prices, gross profits, suppliers, land acquisition results, and underlying demand and supply. |
Reclassifications | Reclassifications Depreciation of model home furnishings for the three months ended March 31, 2015 has been reclassified from depreciation and amortization expense in the accompanying consolidated statements of income to cost of residential units to conform to the current period presentation. |
Out-of-Period Adjustment | Out-of-Period Adjustment During the fourth quarter ended December 31, 2015, the Company recorded an out-of-period adjustment associated with a $1.9 million overaccrual of distributions payable recorded during the fourth quarter ended December 31, 2014. As a result, as of December 31, 2014, accrued expenses was overstated and retained earnings was understated by $1.9 million. After evaluating the quantitative and qualitative aspects of the out-of-period adjustment, management has determined that the adjustment is not material to any prior period financial statements. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The standard will replace most existing revenue recognition guidance in GAAP when it becomes effective. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which delayed the effective date of ASU No. 2014-09 by one year. ASU No. 2014-09 is effective for the Company beginning on January 1, 2018. Early adoption is permitted for reporting periods beginning after December 15, 2016. The standard permits the use of either the full retrospective approach or the modified retrospective approach. The Company has not yet selected a transition method and is currently evaluating the effect that the standard will have on its consolidated financial statements and related disclosures. In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis, which amends the consolidation requirements in ASC 810, primarily related to limited partnerships and VIEs. This standard was effective for the Company beginning on January 1, 2016. The adoption of this standard did not have a material effect on the Company’s consolidated financial statements and related disclosures. In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This standard was effective for the Company beginning on January 1, 2016. In August 2015, the FASB issued ASU No. 2015-15, Interest — Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements — Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting, which clarified that the SEC staff would not object to an entity deferring and presenting debt issuance costs related to a line-of-credit arrangement as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of such arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. As permitted, the Company is deferring and presenting debt issuance costs related to its lines of credit as assets and subsequently amortizing the costs straight line over the term of the lines of credit. In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, as part of its simplification initiative. The standard amends the existing guidance to require that deferred income tax liabilities and assets be classified as noncurrent in a classified balance sheet, and eliminates the prior guidance which required an entity to separate deferred tax liabilities and assets into a current amount and a noncurrent amount in a classified balance sheet. The standard is effective for the Company beginning on January 1, 2017. Early adoption is permitted as of the beginning of an interim or annual period. Additionally, the new guidance may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The Company does not believe that the adoption of this standard will have a material effect on its consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU No. 2016-02, Leases, which requires an entity that leases assets to classify the leases as either finance or operating leases and to record assets and liabilities for the rights and obligations created by long-term leases, regardless of the lease classification. The lease classification will determine whether the lease expense is recognized based on an effective interest rate method or on a straight line basis over the term of the lease. This standard is effective for the Company beginning on January 1, 2019 and must be adopted using a modified retrospective approach. The Company does not believe that the adoption of this standard will have a material effect on its consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which is intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations and whether an entity reports revenue on a gross or net basis. This standard does not change the core principle of the guidance stated in ASU 2014-09. This standard is effective for the Company beginning on January 1, 2018. The Company has not yet selected a transition method and is currently evaluating the effect that this standard will have on its consolidated financial statements and related disclosures. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which simplifies several aspects related to the accounting for share-based payment transactions, including the accounting for income taxes, statutory tax withholding requirements and classification on the statement of cash flows. This standard is effective for the Company beginning on January 1, 2017. The Company is currently evaluating the effect that this standard will have on its consolidated financial statements and related disclosures. |
Net Income Attributable to Green Brick Partners, Inc. Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The computation of basic and diluted net income attributable to Green Brick Partners, Inc. per share using the treasury stock method is as follows (in thousands, except per share amounts):
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following securities that could potentially dilute earnings per share in the future are not included in the determination of diluted net income attributable to Green Brick Partners, Inc. per common share (in thousands):
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Inventory (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Real Estate Inventory | A summary of inventory is as follows (in thousands):
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Summary of Real Estate Inventory Capitalized Interest Costs | Interest costs incurred, capitalized and expensed were as follows (in thousands):
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Debt (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Lines of Credit Outstanding | Lines of credit outstanding at March 31, 2016 and December 31, 2015 consist of the following (in thousands):
The new revolving credit facility is subject to a borrowing base limitation equal to the sum of 50% of the total value of land and 60% of the total value of lots owned by certain of the Company's subsidiaries, each as determined by an independent appraiser, with the value of land being restricted from being more than 50% of the borrowing base. Outstanding borrowings under the new revolving credit facility bear interest at a floating rate per annum equal to the rate announced by Bank of America, N.A., from time to time, as its “Prime Rate” (the “Index”) with such adjustments to the interest rate being made on the effective date of any change in the Index. Notwithstanding the foregoing, the interest may not, at any time, be less than 4% per annum or more than the lesser amount of 18% and the highest maximum rate allowed by applicable law. Beginning on August 30, 2015 and continuing on the 30th day of each consecutive month thereafter until the revolving credit facility matures on July 30, 2017, the Company must pay interest on the unpaid principal amount. The entire unpaid principal balance and any accrued but unpaid interest is due and payable on the maturity date. On May 3, 2016, the Company amended the new revolving credit facility. The amended revolving credit facility is subject to a borrowing base limitation equal to the sum of 50% of the total value of land and 65% of the total value of lots owned by certain of the Company's subsidiaries, each as determined by an independent appraiser, with the value of land being restricted from being more than 65% of the borrowing base. Beginning on August 1, 2017, a non-usage fee equal to 0.25% of the average unfunded amount of the $50.0 million commitment amount over a trailing 12 month period is due on or before August 1st of each year during the term of the amended revolving credit facility. The maturity date has been extended to May 1, 2019. Under the terms of the new revolving credit facility, the Company is required, among other things, to maintain minimum multiples of net worth in excess of the outstanding new revolving credit facility balance, minimum interest coverage and maximum leverage. The Company was in compliance with these financial covenants under the revolving credit facility as of March 31, 2016.
The costs associated with the Unsecured Revolving Credit Facility of $0.5 million were deferred and are included in other assets in our consolidated balance sheets. The Company is amortizing these debt issuance costs to interest expense over the term of the Unsecured Revolving Credit Facility using the straight line method. The Unsecured Revolving Credit Facility provides for interest rate options on advances at rates equal to either: (x) in the case of base rate advances, the highest of (i) Citibank’s base rate, (ii) the federal funds rate plus 0.5%, and (iii) the one-month LIBOR plus 1.0%, in each case plus 1.5%; or (y) in the case of Eurodollar rate advances, the reserve adjusted LIBOR plus 2.5%. Interest on amounts borrowed under the Unsecured Revolving Credit Facility is payable in arrears quarterly on the last day of each March, June, September and December during such periods. At March 31, 2016, the interest rate on outstanding borrowings under the Credit Facility was 2.9% per annum. The Company will pay the lenders a commitment fee on the amount of the unused commitments on a quarterly basis at a rate per annum equal to 0.45%. Outstanding borrowings under the Unsecured Revolving Credit Facility are subject to, among other things, a borrowing base. The borrowing base limitation is equal to the sum of: 100% of unrestricted cash (in excess of $15.0 million); 85% of the book value of model homes, construction in progress homes, sold completed homes, and speculative homes (subject to certain limitations on the age and number of speculative homes and model homes); 65% of the book value of finished lots and land under development; and 50% of the book value of entitled land (subject to certain limitations on the value of entitled land and land under development as a percentage of the borrowing base). Additionally, under the terms of the Unsecured Revolving Credit Facility, the Company is required, among other things, to maintain compliance with various covenants, including financial covenants relating to a maximum Leverage Ratio, a minimum Interest Coverage Ratio, and a minimum Consolidated Tangible Net Worth, each as defined therein. The Company's compliance with these financial covenants is measured by calculations and metrics that are specifically defined or described by the terms of the Unsecured Revolving Credit Facility. |
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Notes Payable | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt | Notes payable outstanding at March 31, 2016 and December 31, 2015 consist of the following (in thousands):
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Stockholders' Equity (Tables) |
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Stockholders' Equity Attributable to Parent [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stockholders Equity | A summary of changes in stockholders’ equity is presented below (dollars in thousands):
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Share-Based Compensation (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | A summary of restricted stock awards activity during the three months ended March 31, 2016 is as follows:
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Summary of Stock Option Activity | A summary of stock option activity during the three months ended March 31, 2016 is as follows:
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Summary of Unvested Stock Options Activity | A summary of our unvested stock options during the three months ended March 31, 2016 is as follows:
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Segment Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information |
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Net Income Attributable to Green Brick Partners, Inc. Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Earnings Per Share [Abstract] | ||
Net income attributable to Green Brick Partners, Inc. —basic | $ 3,094 | $ 4,018 |
Weighted-average number of shares outstanding —basic (shares) | 48,814 | 31,346 |
Weighted Average Number Diluted Shares Outstanding Adjustment (shares) | 0 | 0 |
Basic net income attributable to Green Brick Partners, Inc. per share (usd per share) | $ 0.06 | $ 0.13 |
Net income attributable to Green Brick Partners, Inc. —diluted | $ 3,094 | $ 4,018 |
Weighted-average number of shares outstanding —diluted (shares) | 48,814 | 31,346 |
Diluted net income attributable to Green Brick Partners, Inc. per share (usd per share) | $ 0.06 | $ 0.13 |
Antidilutive options to purchase common stock (shares) | 296 | 158 |
Inventory (Details) - USD ($) $ in Thousands |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Completed home inventory and residential lots held for sale | $ 112,567 | $ 85,342 |
Work in process | 242,428 | 236,383 |
Undeveloped land | 5,873 | 6,193 |
Land not owned under option agreements | 15,182 | 16,214 |
Inventory | $ 376,050 | $ 344,132 |
Inventory (Capitalization of Interest) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Real Estate Inventory, Capitalized Interest Costs [Roll Forward] | ||
Interest capitalized at beginning of period | $ 9,085 | $ 3,713 |
Interest incurred | 708 | 3,800 |
Interest charged to cost of sales | (1,002) | (14) |
Interest charged to interest expense | 0 | (281) |
Interest capitalized at end of period | $ 8,791 | $ 7,218 |
Stockholders' Equity (Equity Offering) (Details) - USD ($) $ / shares in Units, $ in Millions |
1 Months Ended | ||
---|---|---|---|
Jul. 30, 2015 |
Jul. 23, 2015 |
Jul. 01, 2015 |
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Equity [Abstract] | |||
Common Stock, Shares, Issued | 17,000,000 | ||
Share Price | $ 10.00 | ||
AdditionalPurchaseOptionPeriod | 30-day | ||
CommonSharesGrantedToUnderwritersToCoverOver-Allotments | 841,500 | ||
CommonSharesSoldPursuantToUnderwritersOption | 444,897 | ||
ProceedsFromIssuanceOfCommonSharesNetOfUnderwritingFeesAndOfferingCosts | $ 170.0 |
Share Repurchase Program (Details) |
3 Months Ended |
---|---|
Mar. 31, 2016
shares
| |
Equity [Abstract] | |
Stock Repurchase Program, Number of Shares Authorized to be Repurchased | 1,000,000 |
Stock Repurchased During Period, Shares | 0 |
Share-Based Compensation (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Granted in period (shares) | 0 | |
Shares granted | 0 | 0 |
Allocated Share-based Compensation Expense | $ 0.2 | $ 0.1 |
Compensation cost not yet recognized | $ 1.0 | |
Period for recognition | 3 years 1 month 26 days |
Share-Based Compensation (Summary of Restricted Stock Awards) (Details) |
3 Months Ended |
---|---|
Mar. 31, 2016
$ / shares
shares
| |
Number of Shares (in thousands) | |
Nonvested, December 31, 2014 (shares) | shares | 23,000 |
Granted (shares) | shares | 0 |
Vested (shares) | shares | 0 |
Forfeited (shares) | shares | 0 |
Nonvested, June 30, 2015 (shares) | shares | 23,000 |
Weighted Average Grant Date Fair Value per Share | |
Nonvested, December 31, 2014 (usd per share) | $ / shares | $ 8.73 |
Granted (usd per share) | $ / shares | 0.00 |
Vested (usd per share) | $ / shares | 0.00 |
Forfeited (usd per share) | $ / shares | 0.00 |
Nonvested, June 30, 2015 (usd per share) | $ / shares | $ 8.73 |
Share-Based Compensation (Summary of Unvested Stock Options Activity) (Details) shares in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2016
$ / shares
shares
| |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward] | |
Unvested, beginning balance (in shares) | shares | 400 |
Granted (in shares) | shares | 0 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | 0 |
Unvested, ending balance (in shares) | shares | 400 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Unvested, beginning balance (in dollars per share) | $ / shares | $ 2.88 |
Granted (in dollars per share) | $ / shares | 0.00 |
Vested (in dollars per share) | $ / shares | 0.00 |
Forfeited (in dollars per share) | $ / shares | 0.00 |
Unvested, ending balance (in dollars per share) | $ / shares | $ 2.88 |
Income Taxes (Narrative) (Details) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
Dec. 31, 2015 |
|
Operating Loss Carryforwards [Line Items] | |||
Income tax provision | $ 1,453,000 | $ 2,207,000 | |
Effective Income Tax Rate Reconciliation, Percent | 24.40% | 26.30% | |
Deferred tax assets | $ 79,200,000 | ||
Valuation allowance for deferred tax assets | 1,200,000 | ||
Uncertain income tax positions | $ 0 | $ 0 | |
Federal | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforward | $ 158,900,000 | ||
Operating loss carryforward, expiration date | Dec. 31, 2029 | ||
State | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforward | $ 21,600,000 | ||
Valuation allowance related to state loss carryforwards | $ 21,600,000 |
Fair Value Measurements (Details) - USD ($) |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2016 |
Dec. 31, 2015 |
|
Fair Value Disclosures [Abstract] | ||
Fair value adjustment to assets | $ 0 | $ 0 |
Fair value adjustment to liabilities | $ 0 | $ 0 |
Commitments and Contingencies (Narrative) (Details) |
3 Months Ended | |
---|---|---|
Mar. 31, 2016
USD ($)
claim
|
Dec. 31, 2015
USD ($)
|
|
Operating Leased Assets [Line Items] | ||
Loss contingency accruals | $ 0 | $ 0 |
Loss Contingency, Pending Claims, Number | claim | 0 | |
Maximum [Member] | ||
Operating Leased Assets [Line Items] | ||
Estimated accrual amount per home closed | $ 1,500 |
Segment Information (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
Dec. 31, 2015 |
|
Segment Reporting Information [Line Items] | |||
Sale of residential units | $ 66,628 | $ 49,661 | |
Sale of land and lots | 3,330 | 8,791 | |
Gross profit | 15,689 | 16,210 | |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Revenues | 69,958 | 58,452 | |
Gross profit | 15,689 | 16,210 | |
Assets | 376,050 | $ 344,132 | |
Operating Segments | Land Development | |||
Segment Reporting Information [Line Items] | |||
Sale of land and lots | 3,330 | 8,791 | |
Gross Profit on Land and Lots | 990 | 2,513 | |
Assets | 125,045 | 124,741 | |
Texas | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Sale of residential units | 33,581 | 29,088 | |
Gross Profit, Home Building | 8,761 | 7,721 | |
Assets | 71,513 | 60,768 | |
Georgia | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Sale of residential units | 33,047 | 20,573 | |
Gross Profit, Home Building | 5,938 | $ 5,976 | |
Assets | $ 179,492 | $ 158,623 |
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