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Green Brick Partners, Inc. Reports Record First Quarter 2022 Results
Source: Nasdaq GlobeNewswire / 03 May 2022 16:05:28 America/New_York
Home Closings Revenue of $363.1 Million, Up 68.0%
Record Income Before Income Taxes of $82.6 Million, Up 134.3%
Home Building Gross Margin Up 240 Bps to 27.8%
Lots Owned and Controlled Up 42.5%PLANO, Texas, May 03, 2022 (GLOBE NEWSWIRE) -- Green Brick Partners, Inc. (Nasdaq: GRBK) (“we,” “Green Brick” or the “Company”) today reported record results for its first quarter ended March 31, 2022.
“Thanks to a great team effort, we achieved an annualized Q1 2022 return on equity of 28.8%, with diluted EPS at $1.20 per share which was up 135% from Q1 2021. Even better, we expect home closings revenue and EPS to accelerate into Q2 2022,” said Jim Brickman, CEO and Co-Founder.
Results for the Quarter Ended March 31, 2022:
(Dollars in thousands, except per share data) Three Months Ended March 31, 2022 2021 Change New homes delivered 658 516 27.5 % Total revenues $ 393,616 $ 234,479 67.9 % Total cost of revenues 285,260 175,490 62.6 % Total gross profit $ 108,356 $ 58,989 83.7 % Income before income taxes $ 82,633 $ 35,262 134.3 % Net income attributable to Green Brick Partners, Inc. $ 61,577 $ 25,969 137.1 % Diluted net income attributable to Green Brick Partners, Inc. per common share $ 1.20 $ 0.51 135.3 % Residential units revenue $ 364,661 $ 217,236 67.9 % Average sales price of homes delivered $ 551.8 $ 418.9 31.7 % Homebuilding gross margin percentage 27.8 % 25.4 % 240 bps Selling, general and administrative expenses as a percentage of residential units revenue 9.4 % 13.6 % -420 bps Backlog $ 866,621 $ 995,743 -13.0 % Lots owned and controlled 26,992 18,939 42.5 % Homes under construction 2,516 2,303 9.2 % “Our gross margin reached 27.8% this quarter, up 240 basis points from the prior year and up 160 basis points sequentially from the fourth quarter, as Green Brick has achieved pricing power in our dynamic core markets of Dallas-Ft. Worth and Atlanta,” said Rick Costello, CFO. “In order to capitalize on rising prices and demand, we have paced sales with price increases in excess of rising input costs. When we combine this gross margin performance with a 420 basis point improvement in SG&A leverage, our bottom line results are flourishing. We believe our focus on price over pace will sustain our industry-leading margins and strong financial performance through the remainder of 2022.”
Mr. Brickman continued saying, “Seeing a disconnect between managements’ positive view of the business and our strong operating results versus the contrasting sentiment of some investors and analysts, the Company purchased 1.2 million of its shares during the quarter at an average price of $21.63 for a total investment of $25.8 million. In April 2022, the company purchased an additional 1.2 million shares at an average price of $19.72, bringing total shares repurchased to a total of 2.4 million shares which is 4.8% of shares outstanding as of the beginning of the year. These purchases have combined to fully utilize the $50 million amount previously authorized. In our April 27th Board meeting, the board authorized the purchase of up to $100 million of additional shares. Despite repurchasing shares, our debt to total capital was only 28.8% at the end of Q1.”
The new stock repurchase program authorizes the Company to purchase, from time to time, up to $100 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 new plan has no time deadline and will continue until otherwise modified or terminated by the Company’s board at any time in its sole discretion.
Earnings Conference Call:
We will host our earnings conference call to discuss our first quarter ended March 31, 2022 at 12:00 p.m. Eastern Time on Wednesday, May 4, 2022. The call can be accessed by dialing 877-407-0890 for domestic participants or 201-389-0918 for international participants and should reference meeting number 13729082. Participants may also join the call via webcast at:
https://www.webcast-eqs.com/greenbrick20220504/enThe webcast replay will be available from the Company’s website at greenbrickpartners.com/reporting/ through May 31, 2022. A replay of the call will be available from approximately 3:00 p.m. Eastern Time on May 4th, 2021 through 11:59 p.m. Eastern Time on May 31st, 2022. To access the replay, the domestic dial-in number is 877-660-6853, the international dial-in number is 201-612-7415 and the conference ID code is 13729082.
GREEN BRICK PARTNERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)Three Months Ended March 31, 2022 2021 Residential units revenue $ 364,661 $ 217,236 Land and lots revenue 28,955 17,243 Total revenues 393,616 234,479 Cost of residential units 263,430 162,072 Cost of land and lots 21,830 13,418 Total cost of revenues 285,260 175,490 Total gross profit 108,356 58,989 Selling, general and administrative expenses (34,265 ) (29,488 ) Equity in income of unconsolidated entities 5,687 3,891 Other income, net 2,855 1,870 Income before income taxes 82,633 35,262 Income tax expense 18,437 7,501 Net income 64,196 27,761 Less: Net income attributable to noncontrolling interests 2,619 1,792 Net income attributable to Green Brick Partners, Inc. $ 61,577 $ 25,969 Net income attributable to Green Brick Partners, Inc. per common share: Basic $ 1.20 $ 0.51 Diluted $ 1.20 $ 0.51 Weighted average common shares used in the calculation of net income attributable to Green Brick Partners, Inc. per common share: Basic 50,586 50,633 Diluted 50,924 50,993 GREEN BRICK PARTNERS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)March 31, 2022 December 31, 2021 ASSETS Cash and cash equivalents $ 66,083 $ 78,696 Restricted cash 14,152 14,858 Receivables 7,050 6,871 Inventory 1,327,509 1,203,743 Investments in unconsolidated entities 58,127 55,616 Right-of-use assets - operating leases 4,215 4,596 Property and equipment, net 2,617 2,812 Earnest money deposits 24,744 26,008 Deferred income tax assets, net 15,741 15,741 Intangible assets, net 516 537 Goodwill 680 680 Other assets 7,223 11,709 Total assets $ 1,528,657 $ 1,421,867 LIABILITIES AND EQUITY Liabilities: Accounts payable $ 56,899 $ 45,682 Accrued expenses 89,558 61,351 Customer and builder deposits 63,618 64,610 Lease liabilities - operating leases 4,415 4,745 Borrowings on lines of credit, net 19,421 (738 ) Senior unsecured notes, net 335,538 335,446 Notes payable 14,668 210 Total liabilities 584,117 511,306 Commitments and contingencies Redeemable noncontrolling interest in equity of consolidated subsidiary 22,179 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 March 31, 2022 and December 31 2021, respectively 47,696 47,696 Common stock, $0.01 par value: 100,000,000 shares authorized; 51,245,206 and 51,151,911 issued and 49,660,230 and 50,759,972 outstanding as of March 31, 2022 and December 31, 2021, respectively 512 512 Treasury stock, at cost, 1,584,976 and 391,939 shares as of March 31, 2022 and December 31, 2021, respectively (28,968 ) (3,167 ) Additional paid-in capital 292,155 289,641 Retained earnings 600,788 539,866 Total Green Brick Partners, Inc. stockholders’ equity 912,183 874,548 Noncontrolling interests 10,178 14,146 Total equity 922,361 888,694 Total liabilities and equity $ 1,528,657 $ 1,421,867 GREEN BRICK PARTNERS, INC.
SUPPLEMENTAL INFORMATION
(Unaudited)Residential Units Revenue and New Homes Delivered
(dollars in thousands)Three Months Ended March 31, 2022 2021 Change % Home closings revenue $ 363,063 $ 216,134 $ 146,929 68.0 % Mechanic’s lien contracts revenue 1,598 1,102 496 45.0 % Residential units revenue $ 364,661 $ 217,236 $ 147,425 67.9 % New homes delivered 658 516 142 27.5 % Average sales price of homes delivered $ 551.8 $ 418.9 $ 132.9 31.7 % Land and Lots Revenue
(dollars in thousands)Three Months Ended March 31, 2022 2021 Change % Lots revenue $ 1,955 $ 8,443 $ (6,488 ) (76.8 )% Land revenue 27,000 8,800 18,200 206.8 % Land and lots revenue $ 28,955 $ 17,243 $ 11,712 67.9 % Lots closed 33 79 (46 ) (58.2 )% Average sales price of lots closed $ 59.2 $ 106.9 $ (47.7 ) (44.6 )% New Home Orders and Backlog
(dollars in thousands)Three Months Ended March 31, 2022 2021 Change % Net new home orders 601 1,082 (481 ) (44.5 )% Cancellation rate 8.0 % 6.0 % 2.0 % 33.3 % Absorption rate per average active selling community per quarter 8.0 11.3 (3.3 ) (29.2 )% Average active selling communities 75 96 (21 ) (21.9 )% Active selling communities at end of period 76 90 (14 ) (15.6 )% Backlog $ 866,621 $ 995,743 $ (129,122 ) (13.0 )% Backlog (units) 1,423 2,029 (606 ) (29.9 )% Average sales price of backlog $ 609.0 $ 490.8 $ 118.2 24.1 % March 31, 2022 December 31, 2021 Lots owned (1) Central 19,552 17,767 Southeast 2,417 2,472 Total lots owned 21,969 20,239 Lots controlled (1) Central 3,864 7,321 Southeast 1,159 1,061 Total lots controlled 5,023 8,382 Total lots owned and controlled (1) 26,992 28,621 Percentage of lots owned 81.4 % 70.7 % (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, 2022 and December 31, 2021.
March 31, 2022 December 31, 2021 Total lots owned 21,969 20,239 Add certain lots included in Total Lots Controlled Land under option for future acquisition and development 768 3,826 Lots under option through unconsolidated development joint ventures 1,762 1,816 Total lots self-developed 24,499 25,881 Self-developed lots as a percentage of total lots owned and controlled 90.8 % 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 months ended March 31, 2022 and 2021 and reconciles these amounts to homebuilding gross margin, the most directly comparable GAAP measure.
(Unaudited, in thousands): Three Months Ended March 31, 2022 2021 Residential units revenue $ 364,661 $ 217,236 Less: Mechanic’s lien contracts revenue (1,598 ) (1,102 ) Home closings revenue $ 363,063 $ 216,134 Homebuilding gross margin $ 100,973 $ 54,904 Homebuilding gross margin percentage 27.8 % 25.4 % Homebuilding gross margin 100,973 54,904 Add back: Capitalized interest charged to cost of revenues 2,861 1,813 Adjusted homebuilding gross margin $ 103,834 $ 56,717 Adjusted homebuilding gross margin percentage 28.6 % 26.2 % The following table presents the pre-tax income for the three months ended March 31, 2022 and 2021, 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, 2022 2021 Net income attributable to Green Brick Partners, Inc. $ 61,577 $ 25,969 Income tax expense attributable to Green Brick Partners, Inc. 18,435 7,500 Pre-tax income attributable to Green Brick Partners, Inc. $ 80,012 $ 33,469 About Green Brick Partners, Inc.
Green Brick Partners, Inc. is a diversified homebuilding and land development company operating through eight homebuilder brands in major markets in Texas, the Southeast and Colorado. 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, 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. For more information about Green Brick Partners Inc.’s subsidiary homebuilders, please visit greenbrickpartners.com/homebuilders.
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 expectation that our ability to increase price over pace will sustain our industry-leading margins and strong financial performance through the remainder of 2022; (ii) our belief that our land position and backlog will position us to grow our business in 2022 and beyond, (iii) our intent to increase the number of spec homes in our portfolio and the impact of that strategy on our ability to capture the most current price increases and to maximize profitability, (iv) impact of increased demand and inflation for labor and the raw materials, products and appliances for new homes on our costs, markets and delivery time of our home, (v) our strategy for growth, the drivers and acceleration of that growth, and the impact on our results during 2022, and (vi) our ability to capitalize on market opportunities and the impact on our results. 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 and inflation 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 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) a failure to recruit, retain or develop highly skilled and competent employees; (8) government regulation risks; (9) a lack of availability or volatility of mortgage financing or a rise in interest rates; (10) severe weather events or natural disasters; (11) difficulty in obtaining sufficient capital to fund our growth; (12) our ability to meet our debt service obligations; (13) a decline in the value of our inventories and resulting write-downs of the carrying value of our real estate assets; (14) 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: Richard A. Costello
Chief Financial Officer
(469) 573-6755
