EX-99 2 a3q32022ex99earningsrelease.htm EX-99 Document

Exhibit 99
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GREEN BRICK PARTNERS, INC. REPORTS THIRD QUARTER 2022 RESULTS

DILUTED EPS OF $1.57, UP 65.3%
NET INCOME ATTRIBUTABLE TO GREEN BRICK PARTNERS OF $73.5 MILLION, UP 51.6%
RECORD HOME BUILDING GROSS MARGIN UP 550 BPS TO 32.4%
TOTAL REVENUES OF $407.9 MILLION, UP 19.2%


PLANO, Texas, November 2, 2022 — Green Brick Partners, Inc. (NYSE: GRBK) (“we,” “Green Brick” or the “Company”) today reported results for its third quarter ended September 30, 2022.

“Green Brick delivered third quarter results that were a record for any third quarter with EPS of $1.57, total revenues of $407.9 million, residential units revenue of $396.7 million, and net income attributable to Green Brick of $73.5 million. We also reported a homebuilding gross margin of 32.4% which is a record for any quarter, and we believe this may be the highest among public builders,” said Jim Brickman, CEO and Co-Founder. “These results reflect our continued focus on operational efficiency as we meet a more challenging market going forward.”

“Most of our land and lots are in DFW and Atlanta, two of the best larger markets in the country. Our basis is generally lower than our peers, based on our conservative underwriting and our self-developing most of our lots,” continued Mr. Brickman. “Most of our communities are in more supply-constrained infill and other desirable locations. These are all critical factors for our industry leading 32.4% gross margins. Therefore, it should not be surprising that we currently have no communities on a watch list, meaning we have no indicators of impairment as of September 30, 2022. ”

“Our strong balance sheet with a 28.0% debt-to-total capital ratio and record gross margins gives Green Brick more flexibility than most peers to effectively manage pace versus price decisions going forward. We view the current challenges as a potential opportunity to increase market share,” said Mr. Brickman. “Depending on market conditions, as many peers pull back, we expect to have the opportunity to increase our count of ending active selling communities from September 30, 2022 by 20% to 30% over the next four to five quarters. These new communities with a favorable land/lot basis provide the optionality of pricing aggressively without the overhang of protecting backlog. We believe these new communities will generate favorable sales per community at more traditional gross margins.”

Results for the Quarter Ended September 30, 2022:
(Dollars in thousands, except per share data)Three Months Ended September 30,
20222021Change
New homes delivered650 738 (11.9)%
Total revenues$407,944 $342,340 19.2 %
Total cost of revenues274,625 251,004 9.4 %
Total gross profit$133,319 $91,336 46.0 %
Income before income taxes$97,596 $65,158 49.8 %
Net income attributable to Green Brick Partners, Inc.$73,520 $48,507 51.6 %
Diluted net income attributable to Green Brick Partners, Inc. per common share$1.57 $0.95 65.3 %
Residential units revenue$396,749 $338,900 17.1 %
Average sales price of homes delivered$607.3 $458.1 32.6 %
Homebuilding gross margin percentage32.4 %26.9 %550 bps
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Backlog$564,026 $1,017,220 $(453,194)
Homes under construction2,276 2,555 (10.9)%

Results for the Nine Months Ended September 30, 2022:
For the nine months ended September 30, 2022, our net income attributable to Green Brick per diluted common share reflects a record through the first three quarters of any year since the Company’s inception, as detailed below.
(Dollars in thousands, except per share data)Nine Months Ended September 30,
20222021Change
New homes delivered2,189 2,011 8.9 %
Total revenues$1,326,704 $950,625 39.6 %
Total cost of revenues916,133 699,324 31.0 %
Total gross profit$410,571 $251,301 63.4 %
Income before income taxes$318,511 $174,397 82.6 %
Net income attributable to Green Brick Partners, Inc.$236,353 $126,739 86.5 %
Diluted net income attributable to Green Brick Partners, Inc. per common share$4.82 $2.48 94.4 %
Residential units revenue$1,273,925 $889,636 43.2 %
Average sales price of homes delivered$579.4 $440.8 31.4 %
Homebuilding gross margin percentage31.1 %26.5 %460 bps
Selling, general and administrative expenses as a percentage of residential units revenue9.4 %10.9 %-150 bps

Earnings Conference Call:
We will host our earnings conference call to discuss our third quarter ended September 30, 2022 at 12:00 p.m. Eastern Time on Thursday, November 3rd, 2022. The call can be accessed by dialing 1-888-660-6353 for domestic participants or 1-929-203-2106 for international participants and should reference meeting number 3162560. Participants may also join the call via webcast at: https://events.q4inc.com/attendee/570044635

A telephone replay of the call will be available through December 3rd, 2022. To access the telephone replay, the domestic dial-in number is 1-800-770-2030, the international dial-in number is 1-647-362-9199 and the access code is 3162560, or by using the link at investors.greenbrickpartners.com.

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

Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Residential units revenue$396,749 $338,900 $1,273,925 $889,636 
Land and lots revenue11,195 3,440 52,779 60,989 
Total revenues407,944 342,340 1,326,704 950,625 
Cost of residential units268,536 247,899 879,108 654,136 
Cost of land and lots6,089 3,105 37,025 45,188 
Total cost of revenues274,625 251,004 916,133 699,324 
Total gross profit133,319 91,336 410,571 251,301 
Selling, general and administrative expenses(43,251)(33,709)(119,314)(97,182)
Equity in income of unconsolidated entities5,697 5,555 19,907 14,039 
Other income, net1,831 1,976 7,347 6,239 
Income before income taxes97,596 65,158 318,511 174,397 
Income tax expense16,963 13,898 65,678 37,093 
Net income80,633 51,260 252,833 137,304 
Less: Net income attributable to noncontrolling interests7,113 2,753 16,480 10,565 
Net income attributable to Green Brick Partners, Inc.$73,520 $48,507 $236,353 $126,739 
Net income attributable to Green Brick Partners, Inc. per common share:
Basic$1.58 $0.96 $4.86 $2.50 
Diluted$1.57 $0.95 $4.82 $2.48 
Weighted average common shares used in the calculation of net income attributable to Green Brick Partners, Inc. per common share:
Basic46,032 50,732 48,205 50,689 
Diluted46,390 51,079 48,544 51,046 

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

September 30, 2022December 31, 2021
ASSETS
Cash and cash equivalents$48,203 $77,166 
Restricted cash18,739 16,388 
Receivables7,239 6,871 
Inventory1,453,056 1,203,743 
Investments in unconsolidated entities69,250 55,616 
Right-of-use assets - operating leases3,800 4,596 
Property and equipment, net2,894 2,812 
Earnest money deposits25,203 26,008 
Deferred income tax assets, net15,741 15,741 
Intangible assets, net473 537 
Goodwill680 680 
Other assets12,457 11,709 
Total assets$1,657,735 $1,421,867 
LIABILITIES AND EQUITY
Liabilities:
Accounts payable$60,984 $45,682 
Accrued expenses99,425 61,351 
Customer and builder deposits43,622 64,610 
Lease liabilities - operating leases3,972 4,745 
Borrowings on lines of credit, net42,902 (738)
Senior unsecured notes, net335,729 335,446 
Notes payable14,638 210 
Total liabilities601,272 511,306 
Commitments and contingencies
Redeemable noncontrolling interest in equity of consolidated subsidiary25,660 21,867 
Equity:
Green Brick Partners, Inc. stockholders’ equity
Preferred stock, $0.01 par value: 5,000,000 shares authorized; 2,000 issued and outstanding as of September 30, 2022 and December 31, 2021, respectively47,696 47,696 
Common stock, $0.01 par value: 100,000,000 shares authorized; 46,037,649 issued and outstanding as of September 30, 2022 and 51,151,911 and 50,759,972 issued and outstanding as of December 31, 2021, respectively460 512 
Treasury stock, at cost: none as of September 30, 2022 and 391,939 shares as of December 31, 2021— (3,167)
Additional paid-in capital261,570 289,641 
Retained earnings699,514 539,866 
Total Green Brick Partners, Inc. stockholders’ equity1,009,240 874,548 
Noncontrolling interests21,563 14,146 
Total equity1,030,803 888,694 
Total liabilities and equity$1,657,735 $1,421,867 

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GREEN BRICK PARTNERS, INC.
SUPPLEMENTAL INFORMATION
(Unaudited)
Residential Units Revenue and New Homes Delivered
(dollars in thousands)		Three Months Ended September 30,Nine Months Ended September 30,
20222021Change%20222021Change%
Home closings revenue$394,731 $338,075 $56,656 16.8%$1,268,329 $886,488 $381,841 43.1 %
Mechanic’s lien contracts revenue2,018 825 1,193 144.6%5,596 3,148 2,448 77.8 %
Residential units revenue$396,749 $338,900 $57,849 17.1%$1,273,925 $889,636 $384,289 43.2 %
New homes delivered650 738 (88)(11.9)%2,189 2,011 178 8.9 %
Average sales price of homes delivered$607.3 $458.1 $149.2 32.6%$579.4 $440.8 $138.6 31.4 %
Land and Lots Revenue
(dollars in thousands)		Three Months Ended September 30,Nine Months Ended September 30,
20222021Change%20222021Change%
Lots revenue$3,991 $2,126 $1,865 87.7%$18,027 $15,184 $2,843 18.7 %
Land revenue7,204 1,314 5,890 448.2%34,752 45,805 (11,053)(24.1)%
Land and lots revenue$11,195 $3,440 $7,755 225.4%$52,779 $60,989 $(8,210)(13.5)%
Lots closed573126 83.9%274 173 101 58.4 %
Average sales price of lots closed$70.0 $68.6 $1.4 2.0%$65.8 $87.8 $(22.0)(25.1)%
New Home Orders and Backlog
(dollars in thousands)		Three Months Ended September 30,Nine Months Ended September 30,
20222021Change%20222021Change%
Net new home orders404 689 (285)(41.4)%1,550 2,375 (825)(34.7)%
Revenue from new net home orders$251,276 $380,945 $(129,669)(34.0)%$962,497 $1,216,845 $(254,348)(20.9)%
Average selling price of net new home orders$622.0 $552.9 $69.1 12.5%$621.0 $512.4 $108.6 21.2%
Cancellation rate17.6 %6.9 %10.7 %155.1%11.8 %6.7 %5.1 %76.1 %
Absorption rate per average active selling community per quarter5.3 8.2 (2.9)(35.4)%6.8 8.8 (2.0)(22.7)%
Average active selling communities76 84 (8)(9.5)%76 90 (14)(15.6)%
Active selling communities at end of period74 80 (6)(7.5)%
Backlog$564,026 $1,017,220 $(453,194)(44.6)%
Backlog (units)841 1,827 (986)(54.0)%
Average sales price of backlog$670.7 $556.8 $113.9 20.5%
  September 30, 2022December 31, 2021
Lots owned (1)
    
Central18,998 17,767 
Southeast2,583 2,472 
Total lots owned21,581 20,239 
Lots controlled (1)
    
Central3,691 7,321 
Southeast618 1,061 
Total lots controlled4,309 8,382 
Total lots owned and controlled (1)
25,890 28,621 
Percentage of lots owned83.4 %70.7 %
(1)Excludes lots with homes under construction.
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GREEN BRICK PARTNERS, INC.
SUPPLEMENTAL INFORMATION
(Unaudited)

The following table presents additional information on the lots we owned as of September 30, 2022 and December 31, 2021.
September 30, 2022December 31, 2021
Total lots owned21,581 20,239 
Add certain lots included in Total Lots Controlled
Land under option for future acquisition and development307 3,826 
Lots under option through unconsolidated development joint ventures1,718 1,816 
Total lots self-developed23,606 25,881 
Self-developed lots as a percentage of total lots owned and controlled91.2 %90.4 %

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

The following table represents the non-GAAP measure of adjusted homebuilding gross margin for the three and nine months ended September 30, 2022 and 2021 and reconciles these amounts to homebuilding gross margin, the most directly comparable GAAP measure.
(Unaudited, in thousands):Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Residential units revenue$396,749 $338,900 $1,273,925 $889,636 
Less: Mechanic’s lien contracts revenue(2,018)(825)(5,596)(3,148)
Home closings revenue$394,731 $338,075 $1,268,329 $886,488 
Homebuilding gross margin$127,861 $90,875 $393,940 $234,834 
Homebuilding gross margin percentage32.4 %26.9 %31.1 %26.5 %
Homebuilding gross margin127,861 90,875 393,940 234,834 
Add back: Capitalized interest charged to cost of revenues3,105 2,569 10,303 6,915 
Adjusted homebuilding gross margin$130,966 $93,444 $404,243 $241,749 
Adjusted homebuilding gross margin percentage33.2 %27.6 %31.9 %27.3 %

About Green Brick Partners, Inc.
Green Brick Partners, Inc. is a diversified homebuilding and land development company that operates in Texas, Georgia, and Florida and has a non-controlling interest in a Colorado homebuilder. Green Brick owns five subsidiary homebuilders in Texas (CB JENI Homes, Normandy Homes, Southgate Homes, Trophy Signature Homes, and a 90% interest in Centre Living Homes), as well as a controlling interest in a homebuilder in Atlanta, Georgia (The Providence Group) and an 80% interest in a homebuilder in Port St. Lucie, Florida (GHO Homes). Green Brick also owns a noncontrolling interest in Challenger Homes in Colorado Springs, Colorado, and retains interests in related financial services platforms, including Green Brick Title and BHome Mortgage. The Company is engaged in all aspects of the homebuilding process, including land acquisition and development, entitlements, design, construction, marketing, and sales for its residential neighborhoods and master-planned communities. For more information about Green Brick Partners Inc.’s subsidiary homebuilders, please visit greenbrickpartners.com/homebuilders.

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Forward-Looking and Cautionary Statements:
This press release and our earnings call contain “forward-looking statements” within the meaning of the Private Securities Litigation Act of 1995. These statements concern expectations, beliefs, projections, plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts and typically include the words “anticipate,” “believe,” “consider,” “estimate,” “expect,” “feel,” “intend,” “plan,” “predict,” “seek,” “strategy,” “target,” “will” or other words of similar meaning. Forward-looking statements in this press release and in our earnings call include statements regarding (i) our position to adapt and succeed in a rapidly changing environment, including our focus on operational efficiency; (ii) our expectations regarding trends in our markets, including future increases in inventory and the peaking of construction costs; (iii) the ability to mitigate future inventory buildup, including reductions in single-family starts; (iv) expected closings of our current backlog, and our ability to manage such closings; (v) our priorities and strategies for growth, the drivers of that growth, and the impact on our future results; (vi) our expectation to sustain our industry-leading margins and debt-to-total capital ratios, as well as the expected impacts of incentives on our margins; (vii) our flexibility to capitalize on market opportunities and grow our market share as well as the impact on our financial and operational performance; (viii) our beliefs that our lot and land positions will support future growth and provide us with advantages on margins and adaptability; (ix) our beliefs that we operate in the most advantageous markets in the U.S. and the resilience of our markets in both stronger and weaker economies; (x) our expectations related to starts in the fourth quarter and into 2023; (xi) our expectations for lot completions and opportunities to increase active selling communities during the remainder of 2022 and into 2023; (xii) our beliefs regarding our position to manage costs, prices and cycle times; and (xiii) our expectation to continue to provide favorable returns on equity to our shareholders. These forward-looking statements reflect our current views about future events and involve estimates and assumptions which may be affected by risks and uncertainties in our business, as well as other external factors, which could cause future results to materially differ from those expressed or implied in any forward-looking statement. These risks include, but are not limited to: (1) changes in macroeconomic conditions, including increasing interest rates, inflation, and the COVID-19 pandemic that could adversely impact demand for new homes or the ability of potential buyers to qualify; (2) general economic conditions, seasonality, cyclicality and competition in the homebuilding industry; (3) shortages, delays or increased costs of raw materials and increased demand for materials, or increases in other operating costs, including costs related to labor, real estate taxes and insurance, which in each case exceed our ability to increase prices; (4) a shortage of qualified labor; (5) an inability to acquire land in our current and new markets at anticipated prices or difficulty in obtaining land- use entitlements; (6) our inability to successfully execute our strategies, including an inability to grow our operations or expand our Trophy brand; (7) our inability to implement new strategic investments; (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; (11) severe weather events or natural disasters; (12) difficulty in obtaining sufficient capital to fund our growth; (13) our ability to meet our debt service obligations; (14) a decline in the value of our inventories and resulting write-downs of the carrying value of our real estate assets; (15) changes in accounting standards that adversely affect our reported earnings or financial condition. For a more detailed discussion of these and other risks and uncertainties applicable to Green Brick please see our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission.


Contact:
Benting Hu
Vice President of Finance
(469) 808-1014
IR@greenbrickpartners.com

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