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CST: 20/07/2019 13:54:01   

Green Brick Partners, Inc. Reports Record Annual Revenues and Earnings With Total Annual and Quarterly Revenue Growth of 36.1% and 34.7%

137 Days ago

PLANO, Texas, March 04, 2019 (GLOBE NEWSWIRE) -- Green Brick Partners, Inc. (Nasdaq: GRBK) (“we,” “Green Brick” or the “Company”) today reported results for its fourth quarter and year ended December 31, 2018.

Results for the Fourth Quarter Ended December 31, 2018:

  • Basic net income attributable to Green Brick per common share (“EPS”) for the three months ended December 31, 2018 was $0.26, an increase of 262.5%, compared to $(0.16) for the three months ended December 31, 2017. Basic adjusted pre-tax income attributable to Green Brick per common share (“Adjusted EPS”) for the three months ended December 31, 2018 was $0.34, unchanged compared to $0.34 for the three months ended December 31, 2017. See “Reconciliation of Non-GAAP Financial Measures.”

  • For the three months ended December 31, 2018, adjusted pre-tax income attributable to Green Brick was $17.1 million, a decrease of 0.3%, compared to $17.2 million for the three months ended December 31, 2017; gross profit was $37.0 million, an increase of 27.6%, compared to $29.0 million for the three months ended December 31, 2017; and total revenue was $185.1 million, an increase of 34.7%, compared to $137.4 million for the three months ended December 31, 2017.

  • Residential units revenue for the three months ended December 31, 2018 was $172.0 million, an increase of 27.9%, compared to $134.5 million for the three months ended December 31, 2017. Land and lots revenue for the three months ended December 31, 2018 was $13.1 million, an increase of 350.4%, compared to $2.9 million for the three months ended December 31, 2017.

  • The dollar value of backlog units as of December 31, 2018 was $264.3 million, an increase of 74.5% compared to $151.5 million as of December 31, 2017.

  • Homes under construction increased 53.1% to 1,127 as of December 31, 2018, compared to 736 as of December 31, 2017.

Results for the Year Ended December 31, 2018:

  • EPS for the year ended December 31, 2018 was $1.02, an increase of 240.0% compared to $0.30 for the year ended December 31, 2017. Excluding one-time transaction expenses, Adjusted EPS for the year ended December 31, 2018 was $1.37, an increase of 25.7%, compared to $1.09 for the year ended December 31, 2017. See “Reconciliation of Non-GAAP Financial Measures.”

  • For the year ended December 31, 2018, adjusted pre-tax income attributable to Green Brick was $69.4 million, an increase of 28.9%, compared to $53.9 million for the year ended December 31, 2017; gross profit was $130.3 million, an increase of 31.6%, compared to $99.0 million for the year ended December 31, 2017; and total revenue was $623.6 million an increase of 36.1%, compared to $458.3 million for the year ended December 31, 2017.

  • Residential units revenue for the year ended December 31, 2018 was $578.9 million, an increase of 31.7%, compared to $439.5 million for the year ended December 31, 2017. Land and lots revenue for the year ended December 31, 2018 was $44.8 million, an increase of 138.9%, compared to $18.7 million for the year ended December 31, 2017.

“2018 was a record year for our Company with revenues of $623.6 million, adjusted pre-tax income of $69.4 million and earnings per share of $1.02. We accomplished these results with a net debt to total capitalization ratio of 26%, one of the lowest of any public builder. While we and our competition face a cooler outlook in 2019, we are well positioned for growth due to our diverse homebuyer customer mix, prime geographic homebuilding markets and disciplined management”, said Jim Brickman, CEO of Green Brick Partners, Inc.

Earnings Conference Call:

We will host our earnings conference call to discuss our fourth quarter and the year ended December 31, 2018 at 12:00 p.m. Eastern Time on Tuesday, March 5, 2019. 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 6624669. A replay of the call will be available from approximately 3:30 p.m. Eastern Time on March 5, 2019 through 11:59 p.m. Eastern Time on March 12, 2019. 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 6624669.

Reconciliation of 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 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.

GREEN BRICK PARTNERS, INC.
CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

             
    Three Months Ended December 31,   Years Ended December 31,
      2018       2017       2018       2017  
                 
    (unaudited)   (unaudited)        
Residential units revenue   $ 171,990     $ 134,509     $ 578,893     $ 439,520  
Land and lots revenue   13,130     2,915     44,754     18,730  
Total revenues   185,120     137,424     623,647     458,250  
Cost of residential units   137,221     105,877     457,151     345,360  
Cost of land and lots   10,911     2,550     36,166     13,856  
Total cost of revenues   148,132     108,427     493,317     359,216  
Total gross profit   36,988     28,997     130,330     99,034  
Selling, general and administrative expense   16,071     10,284     56,830     39,016  
Change in fair value of contingent consideration   1,693         1,693      
Operating profit   19,224     18,713     71,807     60,018  
Equity in income of unconsolidated entities   725     1,778     7,259     2,746  
Other income, net   774     526     2,605     1,473  
Income before income taxes   20,723     21,017     81,671     64,237  
Income tax expense   3,795     25,396     17,136     39,031  
Net income (loss)   16,928     (4,379 )   64,535     25,206  
Less: Net income attributable to noncontrolling interests   3,574     3,816     12,912     10,236  
Net income (loss) attributable to Green Brick Partners, Inc.   $ 13,354     $ (8,195 )   $ 51,623     $ 14,970  
                 
Net income (loss) attributable to Green Brick Partners, Inc. per common share:                
Basic   $ 0.26     $ (0.16 )   $ 1.02     $ 0.30  
Diluted   $ 0.26     $ (0.16 )   $ 1.02     $ 0.30  
Weighted average common shares used in the calculation of net income attributable to Green Brick Partners, Inc. per common share:                
Basic   50,678     50,555     50,652     49,597  
Diluted   50,723     50,681     50,751     49,683  

GREEN BRICK PARTNERS, INC.
CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

                As of December 31,
                2018   2017
                  (unaudited)        
ASSETS
Cash $ 38,315     $ 36,684  
Restricted cash 3,440     3,605  
Receivables 4,842     1,605  
Inventory 668,961     496,054  
Investment in unconsolidated entities 20,269     16,878  
Property and equipment, net 4,690     804  
Earnest money deposits 16,793     18,393  
Deferred income tax assets, net 16,499     31,211  
Intangible assets, net 856      
Goodwill 680      
Other assets 8,681     5,769  
Total assets $ 784,026     $ 611,003  
LIABILITIES AND EQUITY                            
Accounts payable $ 26,091     $ 22,354  
Accrued expenses 29,201     18,465  
Customer and builder deposits 31,978     21,447  
Borrowings on lines of credit, net 200,386     105,773  
Notes payable     9,926  
Contingent consideration 2,207      
Total liabilities 289,863     177,965  
Commitments and contingencies      
Redeemable noncontrolling interest in equity of consolidated subsidiary 8,531      
Equity      
Green Brick Partners, Inc. stockholders’ equity      
Preferred stock, $0.01 par value: 5,000,000 shares authorized; none issued and outstanding      
Common shares, $0.01 par value: 100,000,000 shares authorized; 50,719,884 and 50,598,901 issued as of December 31, 2018 and 2017, respectively; 50,583,128 and 50,598,901 outstanding as of December 31, 2018 and 2017, respectively 507     506  
Treasury stock at cost, 136,756 shares (981 )    
Additional paid-in capital 291,299     289,938  
Retained earnings 177,526     125,903  
    Total Green Brick Partners, Inc. stockholders’ equity 468,351     416,347  
Noncontrolling interests 17,281     16,691  
Total equity 485,632     433,038  
Total liabilities and equity $ 784,026     $ 611,003  
               

GREEN BRICK PARTNERS, INC.
SUPPLEMENTAL INFORMATION
(Unaudited)

    Three Months Ended
December 31,
      Years Ended December 31,    
Residential Units Sales Revenue and New Homes Delivered   2018   2017   Change   %   2018   2017   Change   %
Home closings revenue (dollars in thousands)   $ 169,534     $ 133,465     $ 36,069     27.0 %   $ 571,177     $ 435,644     $ 135,533     31.1 %
Mechanic’s lien contracts revenue (dollars in thousands)   2,456     1,044     1,412     135.2 %   7,716     3,876     3,840     99.1 %
Residential units revenue (dollars in thousands)   $ 171,990     $ 134,509     $ 37,481     27.9 %   $ 578,893     $ 439,520     $ 139,373     31.7 %
New homes delivered   382     292     90     30.8 %   1,287     990     297     30.0 %
Average sales price of homes delivered   $ 443,806     $ 457,072     $ (13,266 )   (2.9 )%   $ 443,805     $ 440,044     $ 3,761     0.9 %


    Three Months Ended
December 31,
      Years Ended December 31,    
Land and Lots Sales Revenue   2018   2017   Change   %   2018   2017   Change   %
Lots revenue (dollars in thousands)   $ 10,780     $ 2,915     $ 7,865     269.8 %   $ 35,074     $ 17,859     $ 17,215     96.4 %
Land revenue (dollars in thousands)   2,350         2,350     %   9,680     871     8,809     1,011.4 %
Land and lots revenue (dollars in thousands)   $ 13,130     $ 2,915     $ 10,215     350.4 %   $ 44,754     $ 18,730     $ 26,024     138.9 %
Lots closed   76     25     51     204.0 %   239     143     96     67.1 %
Average sales price of lots closed   $ 141,842     $ 116,600     $ 25,242     21.6 %   $ 146,753     $ 124,888     $ 21,865     17.5 %


    Three Months Ended December 31,       Years Ended December 31,    
New Home Orders and Backlog   2018   2017   Change   %   2018   2017   Change   %
Net new home orders   279     265     14     5.3 %   1,397     1,063     334     31.4 %
Number of cancellations   79     51     28     54.9 %   245     188     57     30.3 %
Cancellation rate   22.1 %   16.1 %   6.0 %   37.3 %   14.9 %   15.0 %   (0.1 )%   (0.7 )%
Absorption rate per selling community   3.7     4.7     (1.0 )   (21.3 )%   21.2     19.7     1.5     7.6 %
Average selling communities   76     56     20     35.7 %   66     54     12     22.2 %
Selling communities at end of period   76     55     21     38.2 %                
Backlog (dollars in thousands)   $ 264,275     $ 151,463     $ 112,812     74.5 %                
Backlog (units)   582     310     272     87.7 %                
Average sales price of backlog   $ 454,081     $ 488,590     $ (34,509 )   (7.1 )%                


    Year Ended
December 31, 2018
  December 31, 2018   December 31, 2017
Builder   Average Selling
Communities
  Selling
Communities
  Backlog,
Units
  Backlog, in
thousands
  Selling
Communities
  Backlog,
Units
  Backlog, in
thousands
The Providence Group of Georgia LLC   28   27   146   $ 77,563   30   140   $ 70,309
CB JENI Homes DFW LLC   19   21   170   67,988   16   117   44,067
Centre Living Homes LLC   5   6   14   7,493   4   5   2,239
Southgate Homes DFW LLC   7   8   55   37,873   5   48   34,848
GRBK GHO Homes LLC   7   14   197   73,358      
Total   66   76    582   $ 264,275   55   310   $ 151,463
                                 


    December 31, 2018   December 31, 2017
Lots owned        
Central   4,447     3,196  
Southeast   1,788     1,299  
Total lots owned   6,235     4,495  
Lots controlled        
Central   853     1,390  
Southeast   990     334  
Total lots controlled   1,843     1,724  
Total lots owned and controlled (1)   8,078     6,219  
Percentage of lots owned   77.2 %   72.3 %

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

Reconciliation of Non-GAAP Financial Measures

The following table presents the non-GAAP measure of Adjusted EPS for the three months and years ended December 31, 2018 and 2017 and reconciles these amounts to net income attributable to Green Brick as reported and prepared in accordance with GAAP. Adjusted EPS for the three months and years ended December 31, 2018 and 2017 represents adjusted pre-tax income for the period presented, divided by the weighted average number of common shares outstanding for the three months and years ended December 31, 2018 and 2017, respectively. Adjusted pre-tax income represents net income attributable to Green Brick for the period, excluding income tax expense attributable to Green Brick and one-time transaction expenses related to a public secondary offering of the Company’s shares.

    Three Months Ended
December 31,
 
Years Ended December 31,
(Unaudited, in thousands, except per share amounts):     2018     2017       2018     2017
Net income (loss) attributable to Green Brick   $   13,354   $ (8,195 )   $   51,623   $   14,970
Income tax expense attributable to Green Brick     3,754     25,356       16,984     38,896
Transaction expenses               827    
Adjusted pre-tax income attributable to Green Brick   $   17,108   $   17,161     $   69,434   $   53,866
                   
Weighted-average number of shares outstanding - basic     50,678     50,555       50,652     49,597
Basic adjusted EPS   $0.34   $0.34     $1.37   $1.09
                   
Weighted-average number of shares outstanding - diluted     50,723     50,681       50,751     49,683
Diluted adjusted EPS   $0.34   $0.34     $1.37   $1.08
                   

The following table represents the non-GAAP measure of adjusted homebuilding gross margin for the three months and years ended December 31, 2018 and 2017 and reconciles these amounts to homebuilding gross margin, the most directly comparable GAAP measure.

    Three Months Ended
December 31,
 
Years Ended December 31,
(Unaudited, in thousands):   2018   2017   2018   2017
Residential units revenue   $ 171,990     $ 134,509     $ 578,893     $ 439,520  
Less: Mechanic’s lien contracts revenue   (2,456 )   (1,044 )   (7,716 )   (3,876 )
Home closings revenue   $ 169,534     $ 133,465     $ 571,177     $ 435,644  
Homebuilding gross margin   $ 34,104     $ 28,466     $ 120,141     $ 93,579  
Add back: Capitalized interest charged to cost of sales   1,396     754     3,961     2,630  
Adjusted homebuilding gross margin   $ 35,500     $ 29,220     $ 124,102     $ 96,209  
Adjusted homebuilding gross margin percentage   20.9 %   21.9 %   21.7 %   22.1 %

About Green Brick Partners, Inc.:

Green Brick Partners, Inc. (Nasdaq: GRBK) is a diversified homebuilding and land development company. Green Brick owns a controlling interest in five homebuilders in Dallas, Texas (CB JENI Homes, Normandy Homes, Southgate Homes, Centre Living Homes, and Trophy Signature Homes), as well as a homebuilder in Atlanta, Georgia (The Providence Group) and a homebuilder in Port St. Lucie, Florida (GHO Homes). Green Brick also owns a noncontrolling interest in Challenger Homes in Colorado Springs, Colorado and retains interests in related financial services platforms, including Green Brick Title, Providence Group Title, and Green Brick Mortgage. 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’s homebuilding partners, please visit https://greenbrickpartners.com/team-builders/.

Forward-Looking and Cautionary Statements:

Any statements in this press release about Green Brick’s expectations, beliefs, plans, objectives, prospects, financial condition, assumptions or future events or performance that are not historical facts are forward-looking statements.  These statements are often, but not always, made through the use of words or phrases such as “may,” “will,” “should,” “predicts,” “potential,” “expects,” “future,” “positioned,” “believes,” “projects,” “estimates” and similar expressions, as well as statements in the future tense. These statements are based on assumptions that Green Brick has made in light of its experience in the industry as well as its perceptions of historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances, as of the date of this press release. All such forward-looking statements involve estimates and assumptions that are subject to factors that could cause actual results to differ materially from the results expressed in the statements, and you should not place undue reliance on any such forward-looking statements. Among the factors that could cause actual results to differ materially are the following: general economic conditions, seasonality, cyclicality and competition in the homebuilding industry; the failure to recruit, retain and develop highly skilled and competent employees; management and integration of acquisitions; labor and raw material shortages; an inability to acquire land for reasonable prices; an inability to develop and sell communities; government regulation risks; mortgage financing availability and volatility; severe weather or natural disasters; difficulty in obtaining sufficient capital; poor relations with community residents; and our debt and related service obligations. Additional factors that could cause actual results to differ are discussed in the “Risk Factors” and “Management's Discussion and Analysis of Financial Condition and Results of Operations” in the Company's annual and quarterly reports filed with the Securities and Exchange Commission. Green Brick undertakes no obligation to update any forward-looking statement except as required by law.

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

A PDF is available at http://resource.globenewswire.com/Resource/Download/1ebbe032-8b7a-4cd7-bf98-2d8581272eca

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