EX-99 2 q42020ex99earningsrelease.htm EX-99 Document

Exhibit 99
greenbrickpartnerslogocopy1.jpg
GREEN BRICK PARTNERS, INC. REPORTS FOURTH QUARTER 2020 RESULTS

QUARTERLY BASIC EARNINGS PER SHARE OF $0.58 VS $0.32, UP 81.3%

FISCAL YEAR 2020 ANNUAL RESULTS REACH ALL-TIME RECORD


PLANO, Texas, March 8, 2021 — Green Brick Partners, Inc. (Nasdaq: GRBK) (“we,” “Green Brick” or the “Company”) today reported results for its fourth quarter and year ended December 31, 2020, which were in line with the preliminary results announced on January 22, 2021.

“Green Brick’s robust growth and financial success reached new highs this year,” said Jim Brickman, Chief Executive Officer. “The Company achieved a record diluted EPS of $2.24, up 93% year over year, representing a 34% compounded annual growth rate from our FY 2015 results. Demand for our homes has been tremendous at all price points and continues to climb with net new orders in January and February 2021 up 80% year over year, well above the 63% year over year increase seen in the last half of 2020.”

“Thanks to our significant investment in land and lots this past year, our lots owned and controlled reached a record 14,468 lots, up 58% from just six months ago. This growth was accomplished despite a record 1,004 construction starts in the fourth quarter of 2020, a 99% increase over the fourth quarter of 2019. With both our construction and lot inventories entering 2021 at record levels, we fully expect to build upon our tremendous progress over this past year and continue our rapid growth trajectory into 2021.”

Results for the Year Ended December 31, 2020:
For the twelve months ended December 31, 2020, basic net income attributable to Green Brick per common share (“EPS”), total revenues, residential units revenue, net income attributable to Green Brick, and backlog reflect a record for any twelve-month period since the Company’s inception, as detailed below.

(Dollars in thousands, except per share data)Twelve Months Ended December 31,
20202019Increase
Net new home orders2,885 1,923 50.0 %
New homes delivered2,208 1,719 28.4 %
Total revenues$976,021 $791,660 23.3 %
Total cost of revenues741,417 622,578 19.1 %
Total gross profit$234,604 $169,082 38.8 %
Net income attributable to Green Brick Partners, Inc.$113,693 $58,656 93.8 %
Basic net income attributable to Green Brick Partners, Inc. per share$2.25 $1.16 94.0 %
Residential units revenue$930,176 $759,830 22.4 %
Homebuilding gross margin percentage24.2 %21.4 %280 bps
Backlog$686,861 $346,828 98.0 %
Lots owned and controlled14,468 8,976 61.2 %
Homes under construction1,780 1,297 37.2 %
Average active selling communities96 86 11.6 %
Net income attributable to Green Brick Partners, Inc. as a percentage of the average total Green Brick Partners, Inc. stockholders’ equity19.5 %11.8 %770 bps

1

Results for the Fourth Quarter Ended December 31, 2020:

Highlights for the three months ended December 31, 2020 included the following:

•EPS for the three months ended December 31, 2020 was $0.58, a 81.3% increase compared to EPS of $0.32 for the three months ended December 31, 2019.

•Net income attributable to Green Brick was $29.3 million, an increase of 84.1% from $15.9 million.

•As compared to the three months ended December 31, 2019, total revenues were $254.1 million, an increase of 10.4% from $230.1 million; and gross profit was $63.9 million, an increase of 31.1% from $48.7 million.

•Residential units revenue was $246.4 million, an increase of 10.4% compared to $223.3 million for the three months ended December 31, 2019. Land and lots revenue was $7.7 million, an increase of 11.8% compared to $6.9 million for the three months ended December 31, 2019.

“The strong operating results and financial success this year would not have been possible without access to reliable and cost-effective capital,” said Rick Costello, Chief Financial Officer. “I am pleased to announce Green Brick has issued an additional $125 million in senior unsecured notes as of February 25, 2021. These notes will be due in 2028 at a fixed rate of 3.25%. With this expansion of our working capital, Green Brick has clearly demonstrated its capacity to grow its business with low-cost debt which is priced comparably to that of our low-leveraged large-cap peers, all while maintaining one of the lowest debt to capital ratios in the industry at 25.6%.”

Mr. Costello continued, “During the fourth quarter of 2020 and continuing into March 2021, we have raised home prices more aggressively to further increase margins and attempt to slow down our sales pace. The Company intends for this increase in pricing to lead to lower new order levels, but higher profits, prospectively.”

Green Brick, like every other company in the United States and the global economy, has been impacted by the coronavirus (“COVID-19”) pandemic and the impact of governmental actions taken to combat the pandemic. After an initial decline in orders and construction at the onset of the crisis, orders have subsequently achieved all-time highs due to historically low mortgage interest rates, the participation in home ownership in increasing amounts by the millennial generation, the desire of renters to leave high density living conditions, and the relative strength of the markets in which we operate. It has been difficult to keep up with demand. As construction follows orders, we expect closings to grow substantially beginning in the second quarter of 2021.

More disclosures related to the COVID-19 pandemic can be found in our Annual Report on Form 10-K for the year ended December 31, 2020 that will be filed with the Securities and Exchange Commission.

Share Repurchase Program

The Company also announced that the Board of Directors has authorized a new $50 million stock repurchase plan. This plan authorizes the Company to purchase, from time to time, until March 1, 2023, up to $50 million of our outstanding common stock through open market repurchases in compliance with Rule 10b-18 under the Exchange Act and/or in privately negotiated transactions at management’s discretion based on market and business conditions, applicable legal requirements and other factors. Shares repurchased will be retired. The plan may be modified or terminated by the Company’s Board of Directors at any time in its sole discretion.
2

Earnings Conference Call:
We will host our earnings conference call to discuss our fourth quarter ended December 31, 2020 at 12:00 p.m. Eastern Time on Tuesday, March 9, 2021. The call can be accessed by dialing 800-374-0137 for domestic participants or 904-685-8013 for international participants. Participants should reference conference ID code 5479336. A replay of the call will be available from approximately 2:45 p.m. Eastern Time on March 9, 2021 through 11:59 p.m. Eastern Time on March 23, 2021. To access the replay, the domestic dial-in number is 855-859-2056, the international dial-in number is 404-537-3406 and the conference ID code is 5479336.

Non-GAAP Financial Measures and Key Financial Metrics:
In this press release, we utilize certain financial measures that are non-GAAP financial measures as defined by the Securities and Exchange Commission. We present these measures because we believe they and similar measures are useful to management and investors in evaluating the Company’s operating performance and financing structure. We also believe these measures facilitate the comparison of our operating performance and financing structure with other companies in our industry. Because these measures are not calculated in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), they may not be comparable to other similarly titled measures of other companies and should not be considered in isolation or as a substitute for, or superior to, financial measures prepared in accordance with GAAP.

Reclassifications:
Certain prior period amounts have been reclassified to conform to the current period presentation with no impact to net income in any period.
3

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


(Unaudited)
Three Months Ended December 31,Twelve Months Ended December 31,
2020201920202019
Residential units revenue$246,437 $223,270 $930,176 $759,830 
Land and lots revenue7,663 6,852 45,845 31,830 
Total revenues254,100 230,122 976,021 791,660 
Cost of residential units184,534 176,221 705,866 597,884 
Cost of land and lots5,712 5,191 35,551 24,694 
Total cost of revenues190,246 181,412 741,417 622,578 
Total gross profit63,854 48,710 234,604 169,082 
Selling, general and administrative expenses(30,416)(27,191)(112,134)(97,775)
Change in fair value of contingent consideration(158)(3,157)(368)(4,906)
Equity in income of unconsolidated entities3,616 2,244 16,654 9,809 
Other income, net1,053 1,976 4,057 8,119 
Income before income taxes37,949 22,582 142,813 84,329 
Income tax expense7,659 5,034 25,016 20,027 
Net income30,290 17,548 117,797 64,302 
Less: Net income attributable to noncontrolling interests980 1,628 4,104 5,646 
Net income attributable to Green Brick Partners, Inc.$29,310 $15,920 $113,693 $58,656 
Net income attributable to Green Brick Partners, Inc. per common share:
Basic$0.58 $0.32 $2.25 $1.16 
Diluted$0.58 $0.31 $2.24 $1.16 
Weighted average common shares used in the calculation of net income attributable to Green Brick Partners, Inc. per common share:
Basic50,617 50,429 50,568 50,530 
Diluted50,967 50,619 50,795 50,636 

4

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


December 31, 2020December 31, 2019
ASSETS
Cash and cash equivalents$19,479 $33,269 
Restricted cash14,156 4,416 
Receivables5,224 4,720 
Inventory844,635 753,567 
Investments in unconsolidated entities46,443 30,294 
Right-of-use assets - operating leases2,538 3,462 
Property and equipment, net3,595 4,309 
Earnest money deposits22,242 14,686 
Deferred income tax assets, net15,376 15,262 
Intangible assets, net622 707 
Goodwill680 680 
Other assets13,857 10,167 
Total assets$988,847 $875,539 
LIABILITIES AND EQUITY
Liabilities:
Accounts payable$24,521 $30,044 
Accrued expenses40,416 24,656 
Customer and builder deposits38,131 23,954 
Lease liabilities - operating leases2,591 3,564 
Borrowings on lines of credit, net106,687 164,642 
Senior unsecured notes, net111,056 73,406 
Notes payable2,125 — 
Contingent consideration368 5,267 
Total liabilities325,895 325,533 
Commitments and contingencies
Redeemable noncontrolling interest in equity of consolidated subsidiary13,543 13,611 
Equity:
Green Brick Partners, Inc. stockholders’ equity
Preferred stock, $0.01 par value: 5,000,000 shares authorized; none issued and outstanding— — 
Common stock, $0.01 par value: 100,000,000 shares authorized; 51,053,858 and 50,879,949 issued and 50,661,919 and 50,488,010 outstanding as of December 31, 2020 and December 31, 2019, respectively511 509 
Treasury stock, at cost, 391,939 shares (3,167)(3,167)
Additional paid-in capital293,242 290,799 
Retained earnings349,656 235,027 
Total Green Brick Partners, Inc. stockholders’ equity640,242 523,168 
Noncontrolling interests9,167 13,227 
Total equity649,409 536,395 
Total liabilities and equity$988,847 $875,539 

5

GREEN BRICK PARTNERS, INC.
SUPPLEMENTAL INFORMATION
(Unaudited)

Residential Units Revenue and New Homes Delivered
(dollars in thousands)		Three Months Ended December 31,Twelve Months Ended December 31,
20202019Change%20202019Change%
Home closings revenue$245,549 $223,270 $22,279 10.0 %$923,901 $752,273 $171,628 22.8 %
Mechanic’s lien contracts revenue888 — 888 100%6,275 7,557 (1,282)(17.0)%
Residential units revenue$246,437 $223,270 $23,167 10.4 %$930,176 $759,830 $170,346 22.4 %
New homes delivered585 514 71 13.8 %2,208 1,719 489 28.4 %
Average sales price of homes delivered$419.7 $434.4 $(14.7)(3.4)%$418.4 $437.6 $(19.2)(4.4)%

Land and Lots Revenue
(dollars in thousands)		Three Months Ended December 31,Twelve Months Ended December 31,
20202019Change%20202019Change%
Lots revenue$7,663 $6,852 $811 11.8%$45,461 $31,820 $13,641 42.9 %
Land revenue— — — —%384 10 374 3,740.0 %
Land and lots revenue$7,663 $6,852 $811 11.8%$45,845 $31,830 $14,015 44.0 %
Lots closed734528 62.2%375 211 164 77.7 %
Average sales price of lots closed$105.0 $152.3 $(47.3)(31.1)%$121.2 $150.8 $(29.6)(19.6)%

New Home Orders and Backlog
(dollars in thousands)		Three Months Ended December 31,Twelve Months Ended December 31,
20202019Change%20202019Change%
Net new home orders848 590 258 43.7%2,885 1,923 962 50.0 %
Cancellation rate8.6 %10.6 %(2.0)%(18.9)%13.0 %12.9 %0.1 %0.8 %
Absorption rate per average active selling community per quarter8.3 6.6 1.7 25.8%7.5 5.6 1.9 33.9 %
Average active selling communities102 90 12 13.3%96 86 10 11.6 %
Active selling communities at end of period103 95 8 8.4%
Backlog$686,861$346,828$340,03398.0%
Backlog (units)1,463786 677 86.1%
Average sales price of backlog$469.5 $441.3 $28.2 6.4%

  December 31, 2020December 31, 2019
Lots owned    
Central6,823 4,223 
Southeast2,097 2,196 
Total lots owned8,920 6,419 
Lots controlled (1)    
Central4,398 1,410 
Southeast1,150 1,147 
Total lots controlled5,548 2,557 
Total lots owned and controlled (1)
14,468 8,976 
Percentage of lots owned61.7 %71.5 %

(1)Total lots excludes lots with homes under construction.
6

GREEN BRICK PARTNERS, INC.
SUPPLEMENTAL INFORMATION
(Unaudited)

The following table presents additional information on the lots we owned as of December 31, 2020 and 2019.
December 31, 2020December 31, 2019
Total lots owned8,920 6,419 
Add certain lots included in Total Lots Controlled
Land under option for future acquisition and development740 431 
Lots under option through unconsolidated development joint ventures1,838 552 
Total lots self-developed11,498 7,402 
Self-developed lots as a percentage of total lots owned and controlled79.5 %82.5 %

Reconciliation of Non-GAAP Financial Measures

The following table represents the non-GAAP measure of adjusted homebuilding gross margin for the three and twelve months ended December 31, 2020 and 2019 and reconciles these amounts to homebuilding gross margin, the most directly comparable GAAP measure.

(Unaudited, in thousands):Three Months Ended December 31,Twelve Months Ended December 31,
2020201920202019
Residential units revenue$246,437 $223,270 $930,176 $759,830 
Less: Mechanic’s lien contracts revenue(888)— (6,275)(7,557)
Home closings revenue$245,549 $223,270 $923,901 $752,273 
Homebuilding gross margin$61,680 $48,249 $223,130 $160,952 
Homebuilding gross margin percentage25.1 %21.6 %24.2 %21.4 %
Homebuilding gross margin61,680 48,249 223,130 160,952 
Add back: Capitalized interest charged to cost of revenues2,380 2,333 10,182 7,886 
Adjusted homebuilding gross margin64,060 $50,582 $233,312 $168,838 
Adjusted homebuilding gross margin percentage26.1 %22.7 %25.3 %22.4 %

The following table presents the pre-tax income for the three and twelve months ended December 31, 2020 and 2019, which represents net income attributable to Green Brick for the period excluding the provision for income taxes attributable to Green Brick, and reconciles these amounts to net income attributable to Green Brick, the most directly comparable GAAP measure.

(Unaudited, in thousands):Three Months Ended December 31,Twelve Months Ended December 31,
2020201920202019
Net income attributable to Green Brick Partners, Inc.$29,310 $15,920 $113,693 $58,656 
Income tax expense attributable to Green Brick Partners, Inc.7,656 4,959 25,010 19,712 
Pre-tax income attributable to Green Brick Partners, Inc.$36,966 $20,879 $138,703 $78,368 

7

The following table presents the non-GAAP measure of net income attributable to Green Brick Partners, Inc. for the twelve months ended December 31, 2020 and 2019, divided by the average total Green Brick Partners, Inc. stockholder’s equity to calculate the Company’s return on average equity. The Company believes this non-GAAP financial measure is relevant in measuring the Company’s profitability in relation to stockholder’s equity and should only be used to supplement the Company’s GAAP results.

(Unaudited, in thousands):Twelve Months Ended December 31,
20202019
Net income attributable to Green Brick Partners, Inc.$113,693 $58,656 
Beginning total Green Brick Partners, Inc. stockholders’ equity523,168 468,351 
Ending total Green Brick Partners, Inc. stockholders’ equity640,242 $523,168 
Average total Green Brick Partners, Inc. stockholders’ equity$581,705 $495,760 
Net income attributable to Green Brick Partners, Inc. as a percentage of the average total Green Brick Partners, Inc. stockholders’ equity19.5 %11.8 %

About Green Brick Partners, Inc.
Green Brick Partners, Inc. (Nasdaq: GRBK) is a diversified homebuilding and land development company. Green Brick owns four homebuilders in Dallas, Texas (CB JENI Homes, Normandy Homes, Southgate Homes, and Trophy Signature Homes), as well as a controlling interest in homebuilders in Atlanta, Georgia (The Providence Group), Port St. Lucie, Florida (GHO Homes), and Dallas, Texas (Centre Living Homes). Green Brick also owns a noncontrolling interest in Challenger Homes in Colorado Springs, Colorado, and retains interests in related financial services platforms, including Green Brick Title, Green Brick Mortgage, and BHome Mortgage. The Company is engaged in all aspects of the homebuilding process, including land acquisition and development, entitlements, design, construction, marketing, and sales for its residential neighborhoods and master planned communities.

Forward-Looking and Cautionary Statements:
This press release and our earnings call contain “forward-looking statements” within the meaning of the Private Securities Litigation Act of 1995. These statements concern expectations, beliefs, projections, plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts and typically include the words “anticipate,” “believe,” “consider,” “estimate,” “expect,” “forecast,” “intend,” “objective,” “plan,” “predict,” “projection,” “seek,” “strategy,” “target,” “will” or other words of similar meaning. Forward-looking statements in this press release and the earnings call include statements regarding (i) the Company’s strategy for growth, the drivers of that growth, and the impact on the Company’s results, (ii) the Company's growth in closings, and the timing and significance of that growth. These forward-looking statements involve estimates and assumptions which may be affected by risks and uncertainties in the Company’s business, as well as other external factors, which could cause future results to materially differ from those expressed or implied in any forward-looking statement. These risks include, but are not limited to: (1) continuing impacts from the COVID-19 pandemic, (2) general economic conditions, seasonality, cyclicality and competition in the homebuilding industry; (3) changes in macroeconomic conditions, including interest rates and unemployment rates, that could adversely impact demand for new homes or the ability of our buyers to qualify; (4) shortages, delays or increased costs of raw materials, especially in light of COVID-19, or increases in the Company’s other operating costs, including costs related to labor, real estate taxes and insurance, which in each case exceed our ability to increase prices; (5) a shortage of labor, (6) an inability to acquire land in our markets at anticipated prices or difficulty in obtaining land-use entitlements; (7) our inability to successfully execute our strategies, including an inability to expand our Trophy brand; (8) a failure to recruit, retain or develop highly skilled and competent employees; (9) government regulation risks; (10) a lack of availability or volatility of mortgage financing or a rise in interest rates; (11) severe weather events or natural disasters; (12) difficulty in obtaining sufficient capital to fund our growth; (13) our ability to meet our debt service obligations; (14) a decline in the value of our inventories and resulting write-downs of the carrying value of our real estate assets; (15) changes in accounting standards that adversely affect our reported earnings or financial condition. For a more detailed discussion of these and other risks and uncertainties applicable to the Company please see the Company’s most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission.

Contact: Richard A. Costello
Chief Financial Officer
(469) 573-6755
8