Attached files
| file | filename |
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| 8-K - GREEN BRICK PARTNERS, INC. FORM 8-K 12.31.2016 - Green Brick Partners, Inc. | a12312016earningsgrbkform8.htm |
| EX-99.1 - EXHIBIT 99.1 GREEN BRICK PARTNERS, INC. EARNINGS RELEASE 12.31.2016 - Green Brick Partners, Inc. | ex991grbkearningsrelease12.htm |
Green Brick Partners
Fourth Quarter 2016 Investor Call Presentation
March 13, 2017
Exhibit 99.2
1
Forward-looking statements
This presentation and the oral statements made by representatives of the Company during the course of this presentation 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,” “could,”
“would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “outlook,” “strategy,” “positioned,” “intends,” “plans,” “believes,” “projects,”
“estimates” and similar expressions, as well as statements in the future tense. Although the Company believes that the assumptions underlying these
statements are reasonable, individuals considering such statements for any purpose are cautioned that such forward-looking statements are inherently
uncertain and necessarily involve risks that may affect the Company’s business prospects and performance, causing actual results to differ from those discussed
during the presentation, and any such difference may be material. Factors that could cause actual results to differ from those anticipated are discussed in the
Company’s annual and quarterly reports filed with the SEC.
Any forward-looking statements made are subject to risks and uncertainties, many of which are beyond management’s control. These risks include the risks
described in the Company’s filings with the SEC. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, the
Company’s actual results and plans could differ materially from those expressed in any forward-looking statements.
Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. These forward-looking statements are
made only as of the date hereof. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new
information or future events.
The Company presents Basic Adjusted EPS and Diluted Adjusted EPS and Basic and Diluted Adjusted weighted-average number of shares outstanding, Income
before taxes attributable to GRBK and Adjusted Homebuilding Gross Margin. The Company believes these and similar measures are useful to management and
investors in evaluating its operating performance and financing structure. The Company also believes these measures facilitate the comparison of their
operating performance and financing structure with other companies in the industry. Because these measures are not calculated in accordance with 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.
Jim Brickman
− Chief Executive Officer
− Over 35 years in real estate development and homebuilding
− Co-founded JBGL with Greenlight Capital in 2008. JBGL was merged into Green Brick
in 2014
− Previously served as Chairman and CEO of Princeton Homes and Princeton Realty Corp.
Rick Costello
− Chief Financial Officer
− Over 25 years of financial and operating experience in all aspects of real estate
management
− Previously served as CFO and COO of GL Homes, as AVP of finance of Paragon Group and
as an auditor for KPMG
Jed Dolson
− Head of Land Acquisition and Development
− Managed all Dallas land development for JBGL/GRBK since 2009
− Over 15 years in real estate development
Management presenters
2
Fourth quarter 2016 highlights
3
Fourth quarter pre-tax income attributable to Green Brick of
$13.7 million was up 80% from the same period in 2015
Full year home closing revenues of $365 million in 2016
were up 44% from 2015
Net new orders of 880 in 2016 increased 36% compared to
2015
Adjusted homebuilding gross margins improved to 23.1% for
2016, up from 22.1% in 2015
Homebuilding gross margins has now increased for 5
consecutive quarters
Our units in backlog are 18% higher than last year-end while
homes under construction now stand at 564 homes, up 11%
over last year
Backlog at December 31, 2016 is now at approximately $108
million, up 23% from year-end 2015
4
Housing starts are highly correlated to jobs and we build in
two of the highest job growth markets.
We are less than 1.5% of the starts in two of the fastest growing
housing markets, giving us significant opportunity for growth.
5
6
Dallas market continues 5-year expansion but
still well below prior peak
Dallas/Fort Worth Market
SFD-TH – Starts and Closings
Source: Metrostudy - MetroUSA
29,897
28,052
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
4Q06 4Q07 4Q08 4Q09 4Q10 4Q11 4Q12 4Q13 4Q14 4Q15 4Q16
A
nn
ua
l S
ta
rt
s
&
C
lo
si
ng
s
Annual Starts
Annual Closings
7
GRBK has over 3,500 lots in Dallas where the market
continues its 7-year trend of constrained supply
Dallas/Fort Worth Market
Lot Inventory
Source: Metrostudy - MetroUSA
47,006
18.9
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
4Q06 4Q07 4Q08 4Q09 4Q10 4Q11 4Q12 4Q13 4Q14 4Q15 4Q16
M
onths of Supply
Lo
ts
/S
ta
rt
s
Vacant Developed Lots
Annual Starts
VDL Months of Supply
8
Atlanta market also continues to expand
but still well below prior peak
Source: Metrostudy - MetroUSA
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
55,000
60,000
U
n
it
s
Quarter
Atlanta Region 16 Year History
Annual Construction Starts and Closings
Annual Starts Annual Closings
2Q06 Peaked
73% of activity is in North Atlanta.
Detached captures 85% of all market activity.
Starts
Up 67% in 2013
Up 19% in 2014
Up 15% in 2015
Starts Forecast
Up 12% in 2017
Up 9% in 2018
26,400
21,616
+14%
20,337
+15%
GRBK has one of the lowest debt-to-capital
ratios amongst public builders
GRBK net debt to capital is under 12% versus an average 40% for covered public builders
GRBK’s has no off-balance sheet debt embedded in unconsolidated JV’s, unlike many peers
GRBK’s eventual target is approximately 35%
9
Citi Research data for comparative companies is as of June 30, 2016;
“Net Debt” equals Total Debt minus Cash
Fourth quarter 2016 financial highlights
Q4 2016 versus Q4 2015:
- Net new orders increased by 23%
- Home sales revenues increased by 56%
- Dollar value of units in backlog increased by 23%
Full year 2016 versus full year 2015:
- Net new orders increased by 36%
- Home sales revenues increased by 44%
10
TX
G
Green Brick at a glance
Uniquely structured residential land development and
homebuilding company
− We build and deliver homes through our current
builders in which we own a 50% controlling interest
− We sell lots and provide lot acquisition and vertical
construction financing to our controlled builders
Currently focused on the high growth metropolitan
areas of Dallas and Atlanta
Attractive land position of almost 5,200 well-located
residential lots as of December 31, 2016
− About 82% of our residential lots are owned
− Virtually all of our owned lots are owned at
corporate level vs. at the controlled builder level
Products offered
Townhomes, single family
Single family
Luxury homes
Townhomes,
contractor on luxury homes
Townhomes, single family,
luxury homes
11
Dallas
CB JENI
Normandy Homes
Southgate Homes
Centre Living Homes
Atlanta
The Providence Group
Controlled builders
We are a uniquely structured company that combines residential land development and homebuilding with
strong sponsor ownership and controlling interests in our aligned homebuilders.
Corporate structure
12
50%50%50%50%
100%
Key takeaways
Significant growth opportunities exist in Dallas and
Atlanta ̶ two of the most attractive homebuilder
markets in the U.S.
We have the balance sheet and management team to
support significant growth
Proven success in executing our growth strategy with
our controlled and aligned builders
Our operating model and low leverage results in
superior risk adjusted returns.
13
Non-GAAP Reconciliation
14
Adjusted EPS Reconciliation
(Unaudited, in thousands, except per share amounts)
Three Months
Ended
Dec 31, 2016
Year Ended
Dec 31, 2016
Basic adjusted EPS
Net income attributable to Green Brick – basic $7,676 $23,756
Income tax provision attributable to Green Brick $6,001 $15,261
Pre-tax income $13,677 $39,017
Adjusted weighted-average number of shares outstanding – basic 48,910 48,879
Basic adjusted EPS $0.28 $0.80
Diluted adjusted EPS
Net income attributable to Green Brick – diluted $7,676 $23,756
Income tax provision attributable to Green Brick $6,001 $15,261
Pre-tax income $13,767 $39,017
Adjusted weighted-average number of shares outstanding – diluted 48,930 48,886
Diluted adjusted EPS $0.28 $0.80
Non-GAAP Reconciliation (continued)
15
Adjusted Homebuilding Gross Margin Reconciliation
(Unaudited, in thousands)
12 Months
Ended
Dec 31, 2015
12 Months
Ended
Mar 31, 2016
12 Months
Ended
Jun 30, 2016
12 Months
Ended
Sep 30, 2016
12 Months
Ended
Dec 31, 2016
Homebuilding gross margin $52,499 $53,396 $60,777 $67,684 $81,710
Add back: Capitalized Interest charged to
cost of sales
3,747 4,710 4,446 3,483 2,814
Adjusted homebuilding gross margin $56,246 $58,106 $65,223 $71,167 $84,524
Adjusted gross margin percentage 22.1% 21.4% 21.4% 22.0% 23.1%