Green Brick Partners, Inc. (Nasdaq: GRBK) (“we,” “Green Brick” or
the “Company”) today reported record results for its first quarter
ended March 31, 2021.
Jim Brickman, Chief Executive Officer, said, “We
just reported the best first quarter in the history of the Company
where net income attributable to Green Brick over the last twelve
months through March 31, 2021 grew to $123.7 million, a 100%
increase over the prior twelve-month period. Our first quarter net
orders of 1,082 homes and ending backlog of $996 million both
represent all-time records for the Company, up 28% and 45% over Q4
2020 record levels. To meet the unprecedented demand, Green Brick
started a record 2,043 homes in the last six months and ended the
quarter with 2,303 units under construction, a 62% increase from a
year ago. We feel confident that our efforts will produce
heightened earnings beginning next quarter and each successive
quarter this year.”
Results for the Quarter Ended March 31,
2021:
For the three months ended March 31, 2021, our net
new home orders and home starts reflect a record for any quarter
since the Company’s inception. Homes under construction, backlog,
and lots owned and controlled also represent a record as of the end
of any quarter.
(Dollars in thousands, except per share data) |
Three Months Ended March 31, |
|
|
|
2021 |
|
2020 |
|
Increase |
Net new home orders |
1,082 |
|
|
632 |
|
|
71.2 |
% |
New homes delivered |
516 |
|
|
448 |
|
|
15.2 |
% |
|
|
|
|
|
|
Total revenues |
$ |
234,479 |
|
|
$ |
213,267 |
|
|
9.9 |
% |
Total cost of revenues |
175,490 |
|
|
164,298 |
|
|
6.8 |
% |
Total gross profit |
$ |
58,989 |
|
|
$ |
48,969 |
|
|
20.5 |
% |
Net income attributable to Green Brick Partners, Inc. |
$ |
25,969 |
|
|
$ |
15,917 |
|
|
63.2 |
% |
Diluted net income attributable to Green Brick Partners, Inc. per
share |
$ |
0.51 |
|
|
$ |
0.31 |
|
|
64.5 |
% |
|
|
|
|
|
|
Residential units revenue |
$ |
217,236 |
|
|
$ |
191,187 |
|
|
13.6 |
% |
Homebuilding gross margin percentage |
25.4 |
% |
|
23.1 |
% |
|
230 bps |
|
|
|
|
|
|
Backlog |
$ |
995,743 |
|
|
$ |
427,322 |
|
|
133.0 |
% |
Lots owned and controlled |
18,939 |
|
|
8,684 |
|
|
118.1 |
% |
Homes under construction |
2,303 |
|
|
1,418 |
|
|
62.4 |
% |
Average active selling communities |
96 |
|
|
94 |
|
|
2.1 |
% |
Net income attributable to Green Brick Partners, Inc. as a
percentage of the average total Green Brick Partners, Inc.
stockholders’ equity |
15.9 |
% |
|
11.9 |
% |
|
400 bps |
“This rapid uptick in sales and starts has not been
at the cost of our land pipeline,” said Rick Costello, Chief
Financial Officer. “During the quarter, we acquired approximately
5,600 homesites, expanding our total lots owned and controlled by
118% over the past twelve months and 31% in the past
three months alone. This increase was achieved while starting a
record number of homes and maintaining a debt to capital ratio of
26.4%, one of the lowest among the public homebuilders. Our record
starts of 1,039 homes this quarter were despite the severe Texas
snowstorm that impacted construction schedules, leading to the
deferral of approximately 40 home closings into the second quarter.
We believe Green Brick’s capacity to source highly profitable land
without straining our balance sheet will continue to propel our
operating and financial results beyond the bar set this
quarter.”
Green Brick, like every other company in the United
States and the global economy, has been impacted by the
coronavirus, or 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. The significant increase in
new home demand that we have seen since the second half of 2020
has, in turn, led to increased demand for the raw materials,
products and appliances for new homes. Due to the increased demand
for certain materials, we have recently and may continue to
experience price increases, shortages and significant extensions to
our lead time for the delivery of materials such as lumber,
appliances and windows. As construction follows orders, we expect
closings to grow substantially beginning in the second quarter of
2021.
Earnings Conference Call:We will
host our earnings conference call to discuss our first quarter
ended March 31, 2021 at 12:00 p.m. Eastern Time on Wednesday,
May 5, 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
3887441. A replay of the call will be available from approximately
2:45 p.m. Eastern Time on May 5, 2021 through 11:59 p.m.
Eastern Time on May 19, 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 3887441.
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 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.
GREEN BRICK PARTNERS,
INC.CONDENSED CONSOLIDATED STATEMENTS OF
INCOME(In thousands, except per share
data)(Unaudited)
|
Three Months Ended March 31, |
|
2021 |
|
2020 |
Residential units revenue |
$ |
217,236 |
|
|
|
$ |
191,187 |
|
|
Land and lots revenue |
17,243 |
|
|
|
22,080 |
|
|
Total revenues |
234,479 |
|
|
|
213,267 |
|
|
Cost of residential units |
162,072 |
|
|
|
147,187 |
|
|
Cost of land and lots |
13,418 |
|
|
|
17,111 |
|
|
Total cost of revenues |
175,490 |
|
|
|
164,298 |
|
|
Total gross profit |
58,989 |
|
|
|
48,969 |
|
|
Selling, general and administrative expenses |
(29,488 |
) |
|
|
(26,869 |
) |
|
Equity in income of unconsolidated entities |
3,891 |
|
|
|
2,565 |
|
|
Other income (loss), net |
1,870 |
|
|
|
(1,909 |
) |
|
Income before income taxes |
35,262 |
|
|
|
22,756 |
|
|
Income tax expense |
7,501 |
|
|
|
6,040 |
|
|
Net income |
27,761 |
|
|
|
16,716 |
|
|
Less: Net income attributable to noncontrolling interests |
1,792 |
|
|
|
799 |
|
|
Net income attributable to Green Brick Partners, Inc. |
$ |
25,969 |
|
|
|
$ |
15,917 |
|
|
|
|
|
|
Net income attributable to Green Brick Partners, Inc. per common
share: |
|
|
|
Basic |
$ |
0.51 |
|
|
|
$ |
0.32 |
|
|
Diluted |
$ |
0.51 |
|
|
|
$ |
0.31 |
|
|
Weighted average common shares used in the calculation of net
income attributable to Green Brick Partners, Inc. per common
share: |
|
|
|
Basic |
50,633 |
|
|
|
50,454 |
|
|
Diluted |
50,993 |
|
|
|
50,646 |
|
|
GREEN BRICK PARTNERS,
INC.CONDENSED CONSOLIDATED BALANCE
SHEETS(In thousands, except share
data)(Unaudited)
|
March 31, 2021 |
|
December 31, 2020 |
ASSETS |
Cash and cash equivalents |
$ |
28,688 |
|
|
|
$ |
19,479 |
|
|
Restricted cash |
14,750 |
|
|
|
14,156 |
|
|
Receivables |
7,561 |
|
|
|
5,224 |
|
|
Inventory |
920,890 |
|
|
|
844,635 |
|
|
Investments in unconsolidated entities |
48,457 |
|
|
|
46,443 |
|
|
Right-of-use assets - operating leases |
2,257 |
|
|
|
2,538 |
|
|
Property and equipment, net |
3,506 |
|
|
|
3,595 |
|
|
Earnest money deposits |
23,208 |
|
|
|
22,242 |
|
|
Deferred income tax assets, net |
15,376 |
|
|
|
15,376 |
|
|
Intangible assets, net |
601 |
|
|
|
622 |
|
|
Goodwill |
680 |
|
|
|
680 |
|
|
Other assets |
13,942 |
|
|
|
13,857 |
|
|
Total assets |
$ |
1,079,916 |
|
|
|
$ |
988,847 |
|
|
LIABILITIES AND EQUITY |
Liabilities: |
|
|
|
Accounts payable |
$ |
39,000 |
|
|
|
$ |
24,521 |
|
|
Accrued expenses |
50,235 |
|
|
|
40,416 |
|
|
Customer and builder deposits |
56,073 |
|
|
|
38,131 |
|
|
Lease liabilities - operating leases |
2,289 |
|
|
|
2,591 |
|
|
Borrowings on lines of credit, net |
3,809 |
|
|
|
106,687 |
|
|
Senior unsecured notes, net |
235,561 |
|
|
|
111,056 |
|
|
Notes payable |
119 |
|
|
|
2,125 |
|
|
Contingent consideration |
368 |
|
|
|
368 |
|
|
Total liabilities |
387,454 |
|
|
|
325,895 |
|
|
Commitments and contingencies |
|
|
|
Redeemable noncontrolling interest in equity of consolidated
subsidiary |
15,701 |
|
|
|
13,543 |
|
|
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;
51,124,215 and 51,053,858 issued and 50,732,276 and 50,661,919
outstanding as of March 31, 2021 and December 31, 2020,
respectively |
511 |
|
|
|
511 |
|
|
Treasury stock, at cost, 391,939 shares |
(3,167 |
) |
|
|
(3,167 |
) |
|
Additional paid-in capital |
293,162 |
|
|
|
293,242 |
|
|
Retained earnings |
375,625 |
|
|
|
349,656 |
|
|
Total Green Brick Partners, Inc. stockholders’ equity |
666,131 |
|
|
|
640,242 |
|
|
Noncontrolling interests |
10,630 |
|
|
|
9,167 |
|
|
Total equity |
676,761 |
|
|
|
649,409 |
|
|
Total liabilities and equity |
$ |
1,079,916 |
|
|
|
$ |
988,847 |
|
|
GREEN BRICK PARTNERS,
INC.SUPPLEMENTAL
INFORMATION(Unaudited)
Residential Units Revenue and New Homes
Delivered(dollars in thousands) |
|
Three Months Ended March 31, |
|
|
|
|
|
2021 |
|
2020 |
|
Change |
|
% |
Home closings revenue |
|
$ |
216,134 |
|
|
$ |
189,248 |
|
|
$ |
26,886 |
|
|
|
14.2 |
|
% |
Mechanic’s lien contracts revenue |
|
1,102 |
|
|
1,939 |
|
|
(837 |
) |
|
|
(43.2 |
) |
% |
Residential units revenue |
|
$ |
217,236 |
|
|
$ |
191,187 |
|
|
$ |
26,049 |
|
|
|
13.6 |
|
% |
New homes delivered |
|
516 |
|
|
448 |
|
|
68 |
|
|
|
15.2 |
|
% |
Average sales price of homes delivered |
|
$ |
418.9 |
|
|
$ |
422.4 |
|
|
$ |
(3.5 |
) |
|
|
(0.8 |
) |
% |
Land and Lots Revenue(dollars in
thousands) |
|
Three Months Ended March 31, |
|
|
|
|
|
2021 |
|
2020 |
|
Change |
|
% |
Lots revenue |
|
$ |
8,443 |
|
|
$ |
22,080 |
|
|
$ |
(13,637 |
) |
|
|
(61.8 |
) |
% |
Land revenue |
|
8,800 |
|
|
— |
|
|
8,800 |
|
|
|
100.0 |
% |
Land and lots revenue |
|
$ |
17,243 |
|
|
$ |
22,080 |
|
|
$ |
(4,837 |
) |
|
|
(21.9 |
) |
% |
Lots closed |
|
79 |
|
|
138 |
|
|
(59 |
) |
|
|
(42.8 |
) |
% |
Average sales price of lots closed |
|
$ |
106.9 |
|
|
$ |
160.0 |
|
|
$ |
(53.1 |
) |
|
|
(33.2 |
) |
% |
New Home Orders and Backlog(dollars in
thousands) |
|
Three Months Ended March 31, |
|
|
|
|
|
2021 |
|
2020 |
|
Change |
|
% |
Net new home orders |
|
1,082 |
|
|
632 |
|
|
450 |
|
|
|
71.2 |
|
% |
Cancellation rate |
|
6.0 |
% |
|
16.5 |
% |
|
(10.5 |
) |
% |
|
(63.6 |
) |
% |
Absorption rate per average active selling community per
quarter |
|
11.3 |
|
|
6.7 |
|
|
4.6 |
|
|
|
68.7 |
|
% |
Average active selling communities |
|
96 |
|
|
94 |
|
|
2 |
|
|
|
2.1 |
|
% |
Active selling communities at end of period |
|
90 |
|
|
93 |
|
|
(3 |
) |
|
|
(3.2 |
) |
% |
Backlog |
|
$ |
995,743 |
|
|
$ |
427,322 |
|
|
$ |
568,421 |
|
|
|
133.0 |
|
% |
Backlog (units) |
|
2,029 |
|
|
970 |
|
|
1,059 |
|
|
|
109.2 |
|
% |
Average sales price of backlog |
|
$ |
490.8 |
|
|
$ |
440.5 |
|
|
$ |
50.3 |
|
|
|
11.4 |
|
% |
|
|
March 31, 2021 |
|
December 31, 2020 |
Lots owned |
|
|
|
|
Central |
|
6,682 |
|
|
6,823 |
|
Southeast |
|
1,883 |
|
|
2,097 |
|
Total lots owned |
|
8,565 |
|
|
8,920 |
|
Lots controlled |
|
|
|
|
Central |
|
9,045 |
|
|
4,398 |
|
Southeast |
|
1,329 |
|
|
1,150 |
|
Total lots controlled |
|
10,374 |
|
|
5,548 |
|
Total lots owned and controlled
(1) |
|
18,939 |
|
|
14,468 |
|
Percentage of lots owned |
|
45.2 |
% |
|
61.7 |
% |
(1) Excludes lots with homes under
construction.
GREEN BRICK PARTNERS,
INC.SUPPLEMENTAL
INFORMATION(Unaudited)
The following table presents additional information
on the lots we owned as of March 31, 2021 and December 31,
2020.
|
March 31, 2021 |
|
December 31, 2020 |
Total lots owned |
8,565 |
|
|
8,920 |
|
Add certain lots included in Total Lots Controlled |
|
|
|
Land under option for future acquisition and development |
5,838 |
|
|
740 |
|
Lots under option through unconsolidated development joint
ventures |
1,838 |
|
|
1,838 |
|
Total lots self-developed |
16,241 |
|
|
11,498 |
|
Self-developed lots as a percentage of total lots owned and
controlled |
85.8 |
% |
|
79.5 |
% |
Reconciliation of Non-GAAP Financial
Measures
The following table represents the non-GAAP measure
of adjusted homebuilding gross margin for three months ended March
31, 2021 and 2020 and reconciles these amounts to homebuilding
gross margin, the most directly comparable GAAP measure.
(Unaudited, in thousands): |
|
Three Months Ended March 31, |
|
2021 |
|
2020 |
Residential units revenue |
|
$ |
217,236 |
|
|
|
$ |
191,187 |
|
|
Less: Mechanic’s lien contracts revenue |
|
(1,102 |
) |
|
|
(1,939 |
) |
|
Home closings revenue |
|
$ |
216,134 |
|
|
|
$ |
189,248 |
|
|
Homebuilding gross margin |
|
$ |
54,904 |
|
|
|
$ |
43,657 |
|
|
Homebuilding gross margin percentage |
|
25.4 |
|
% |
|
23.1 |
|
% |
|
|
|
|
|
Homebuilding gross margin |
|
54,904 |
|
|
|
43,657 |
|
|
Add back: Capitalized interest charged to cost of revenues |
|
1,813 |
|
|
|
2,181 |
|
|
Adjusted homebuilding gross margin |
|
$ |
56,717 |
|
|
|
$ |
45,838 |
|
|
Adjusted homebuilding gross margin percentage |
|
26.2 |
|
% |
|
24.2 |
|
% |
The following table presents the pre-tax income for
the three months ended March 31, 2021 and 2020, 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 March 31, |
|
2021 |
|
2020 |
Net income attributable to Green Brick Partners, Inc. |
|
$ |
25,969 |
|
|
$ |
15,917 |
|
Income tax expense attributable to Green Brick Partners, Inc. |
|
7,500 |
|
|
6,038 |
|
Pre-tax income attributable to Green Brick Partners, Inc. |
|
$ |
33,469 |
|
|
$ |
21,955 |
|
The following table presents the non-GAAP measure
of net income attributable to Green Brick Partners, Inc. for the
three months ended March 31, 2021 and 2020, divided by the average
total Green Brick Partners, Inc. stockholder’s equity to calculate
our return on average equity. We believe this non-GAAP financial
measure is relevant in measuring our profitability in relation to
stockholder’s equity and should only be used to supplement Green
Brick’s GAAP results.
|
|
Three Months Ended March 31, |
(Unaudited, in thousands): |
|
2021 |
|
2020 |
Net income attributable to Green Brick Partners, Inc. |
|
$ |
25,969 |
|
|
$ |
15,917 |
|
Beginning total Green Brick Partners, Inc. stockholders’
equity |
|
640,242 |
|
|
523,168 |
|
Ending total Green Brick Partners, Inc. stockholders’ equity |
|
666,131 |
|
|
$ |
542,982 |
|
Average total Green Brick Partners, Inc. stockholders’ equity |
|
$ |
653,187 |
|
|
$ |
533,075 |
|
Net income attributable to Green Brick Partners, Inc. as a
percentage of the average total Green Brick Partners, Inc.
stockholders’ equity |
|
15.9 |
% |
|
11.9 |
% |
About Green Brick Partners,
Inc.
Green Brick Partners, Inc. (Nasdaq: GRBK) is a
diversified homebuilding and land development company. Green Brick
owns five homebuilders in Dallas, 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 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. Green Brick is engaged in all
aspects of the homebuilding process, including land acquisition and
development, entitlements, design, construction, marketing, and
sales for our residential neighborhoods and master planned
communities. For more information about Green Brick Partners Inc.’s
homebuilding partners, please visit
https://greenbrickpartners.com/team-builders/.
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 include statements regarding (i)
our strategy for growth, the drivers and timing of that growth, and
the impact on our results over the remainder of 2021, (ii) our pace
and ability to grow our operations to scale, our ability to
capitalize on market opportunities and the impact on our results,
(iii) our land and lot acquisition strategy and its ability to grow
our operational and financial results, and (iv) our growth in
closings, and the timing and significance of that growth. 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)
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 potential
buyers to qualify; (4) shortages, delays or increased costs of raw
materials, especially in light of COVID-19 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; (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 grow our operations or 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
Green Brick please see our most recent Annual Report on Form 10-K
and Quarterly Report on Form 10-Q filed with the Securities and
Exchange Commission.
Contact: Richard A. CostelloChief Financial
Officer(469) 573-6755
Green Brick Partners (NASDAQ:GRBK)
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Green Brick Partners (NASDAQ:GRBK)
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