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| EX-99.1 - EXHIBIT 99.1 GREEN BRICK PARTNERS, INC. EARNINGS RELEASE 6.30.2017 - Green Brick Partners, Inc. | exhibit991grbkearningsrele.htm |
| 8-K - FORM 8-K 6.30.2017 - Green Brick Partners, Inc. | a6302017grbkform8-k.htm |
Green Brick Partners
Second Quarter 2017 Investor Call Presentation
August 7, 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 OfficerΩ
Over Ω 39 years in real estate development and homebuilding
CoΩ -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.Ω
Rick Costello
Chief Financial OfficerΩ
Over Ω 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 Ω
as an auditor for KPMG
Jed Dolson
Head of Land Acquisition and Development Ω – COO of Green Brick Communities
Over Ω 14 years of land development and property acquisition
Head of GRBK land acquisitions since Ω 2010
Masters Degree in Engineering, Stanford University, and Registered Engineer, State of Ω
Texas
Management presenters
2
3
Housing starts are highly correlated to jobs and we build in
two of the highest job growth markets.
We are less than 2.0% of the starts in two of the largest housing
markets, giving us significant opportunity for growth.
4
5
Dallas market continues 6-year expansion but
is still well below the prior peak
31,049
29,865
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
2Q07 2Q08 2Q09 2Q10 2Q11 2Q12 2Q13 2Q14 2Q15 2Q16 2Q17
A
nn
ua
l S
ta
rt
s
&
C
lo
si
ng
s
Annual Starts
Annual Closings
Dallas/Fort Worth Market
SFD-TH – Starts and Closings
Source: Metrostudy - MetroUSA
6
GRBK has almost 3,800 lots in Dallas where the market
continues its 7-year trend of constrained supply
Source: Metrostudy - MetroUSA
Dallas/Fort Worth Market
Lot Inventory
50,084
19.4
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
2Q07 2Q08 2Q09 2Q10 2Q11 2Q12 2Q13 2Q14 2Q15 2Q16 2Q17
M
onths of Supply
Lo
ts
/S
ta
rt
s
Vacant Developed Lots
Annual Starts
VDL Months of Supply
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
22,594
+10%
21,262
+15%
7
Atlanta market also continues to expand
but is still well below the prior peak
Source: Metrostudy - MetroUSA
72% of activity is in North Atlanta.
GRBK has one of the lowest debt-to-capital
ratios amongst public builders
GRBK net debt to capital is about 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%
8
Citi Research data for comparative companies is as of December 31, 2016;
“Net Debt” equals Total Debt minus Cash
Second quarter 2017 financial highlights
9
Second quarter pre -tax income attributable to Green Brick
of $12.0 million was up 9.9% from the same period in 2016
Lots owned and controlled stand at almost 5400 lots, up
over 20% year over year
Home closing revenues of $ 100.3 million in Q2 2017 were
up 7.1% from Q2 2016 and up almost 21% year to date
Net new orders of 270 homes in the second quarter of 2017
increased 13.0% compared to the second quarter of 2016;
orders for the last 12 months are 958, up 24.2% from the
same time last year
Last 12 month adjusted homebuilding gross margins
remained at 23.1% in Q2 2017 for the 3rd quarter in a row
Homes under construction now stand at 714 homes, up
8.2% over Q2 2016; starts for the last 12 months total 988,
up 14.9% compared to the year-ago total
Active selling communities total 54 at June 30, 2017, up
12.5% year-over-year
Backlog at June 30, 2017 is now at approximately $165
million, up 17.7% year over year
Second quarter 2017 operational highlights
10
TX
G
Green Brick at a glance
Uniquely structured residential land development and
homebuilding company
We build and deliver homes through our current Ω
builders in which we own a 50% controlling interest
We sell lots and provide lot acquisition and vertical Ω
construction financing to our controlled builders
Currently focused on the high growth metropolitan
areas of Dallas and Atlanta
Attractive land position of almost 5,400 well-located
residential lots as of June 30, 2017
Over Ω 79% of our residential lots are owned
Virtually all of our owned lots are owned at Ω
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
June 30, 2017
Six Months
Ended
June 30, 2017
Basic adjusted EPS
Net income attributable to Green Brick – basic $7,689 $13,886
Income tax provision attributable to Green Brick $4,349 $8,204
Pre-tax income $12,038 $22,090
Adjusted weighted-average number of shares outstanding –
basic 49,047 49,003
Basic adjusted EPS $0.25 $0.45
Diluted adjusted EPS
Net income attributable to Green Brick – diluted $7,689 $13,886
Income tax provision attributable to Green Brick $4,349 $8,204
Pre-tax income $12,038 $22,090
Adjusted weighted-average number of shares outstanding –
diluted 49,123 49,070
Diluted adjusted EPS $0.25 $0.45
Non-GAAP Reconciliation (continued)
15
Adjusted Homebuilding Gross Margin Reconciliation
(Unaudited, in thousands)
12 Months
Ended
Jun 30, 2016
12 Months
Ended
Sep 30, 2016
12 Months
Ended
Dec 31, 2016
12 Months
Ended
Mar 31, 2017
12 Months
Ended
June 30, 2017
Sale of Residential Units $304,597 $323,259 $365,164 $391,933 $398,546
Homebuilding gross margin $60,777 $67,684 $81,710 $87,922 $89,429
Add back: Capitalized Interest charged to
cost of sales
4,446 3,483 2,814 2,441 $2,492
Adjusted homebuilding gross margin $65,223 $71,167 $84,524 $90,363 $91,921
Adjusted gross margin percentage 21.4% 22.0% 23.1% 23.1% 23.1%