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Green Brick Partners — Oct 30, 2024 release

Fiscal 2024 third-quarter results · 8-K Item 2.02 · Exhibit 99.1 · 0001373670-24-000082
Open on SEC.gov ↗
Showing in the filing
Revenue
“record revenue”
Period
FY2024
Measure
GAAP-tied
Source
Prose
All guidance in this release · 2
Revenue for FY2024
“record revenue”
Finished lot costs as a percentage of home c… for FY2024
“remain essentially flat”
Exhibit 99.1 · full document
Exhibit 99 GREEN BRICK PARTNERS, INC. REPORTS RECORD THIRD QUARTER 2024 RESULTS HOME CLOSINGS REVENUE OF $523M, A RECORD FOR ANY THIRD QUARTER, UP 25.7% YOY DILUTED EPS OF $1.98, A RECORD FOR ANY THIRD QUARTER, UP 26.9% YOY NET NEW HOME ORDERS OF 877, A RECORD FOR ANY THIRD QUARTER, UP 11.3% YOY DEBT TO TOTAL CAPITAL OF 16.4%; NET DEBT TO TOTAL CAPITAL OF 12.5% PLANO, Texas, October 30, 2024 — Green Brick Partners, Inc. (NYSE: GRBK) (“we,” “Green Brick” or the “Company”), today reported record results for its third quarter ended September 30, 2024. “We are pleased to report that we completed our best third quarter in history, highlighted by 25.7% home closings revenues growth year-over-year. During the third quarter, we delivered 956 homes with an average selling price of $546,900, bringing total home closings revenues to $522.9 million. We continued to generate an industry-leading homebuilding gross margin of 32.7%. As a result, diluted EPS increased 27% year-over-year to $1.98 per share, a record for any third quarter. Our year-to-date diluted EPS of $6.12 is up 34.5% year-over year, another record for the company for any year-to-date period through the third quarter,” said Jim Brickman, CEO and Co-Founder. “Net new orders in the third quarter picked up from the previous quarter and grew 11.3% year-over-year to 877 units,” continued Mr. Brickman. “We were pleased to see a rebound of traffic in September, particularly with Trophy Signature Homes (“Trophy”). Trophy’s net sales represented 52% of the total sales in third quarter vs 41% in the third quarter last year. This growth is a reflection of larger communities in which Trophy was selling in the third quarter and its growth in year-to-date starts, which have increased from 44% of Green Brick’s total starts through September 2023 to 50% of overall starts in 2024. We believe the demographic shifts and housing supply shortage will continue to bolster the industry, especially in our markets, over the long term and are confident Green Brick is well poised to capitalize on pent-up housing demand and industry tailwinds.” Mr. Brickman added, “We expect to achieve record revenue for fiscal year 2024. This is a testament to our team and their operational effectiveness both currently and for the years prior as we have built out Green Brick’s foundation, including, at its core, our dedicated, experienced, and skilled employees. This is particularly rewarding as we celebrate the 10th anniversary of Green Brick as a public homebuilding company on October 27th. Reflecting the strength of our team, our active selling communities and homes under construction as of the end of the third quarter are up year-over-year 23% and 21%, respectively. We believe our superior land and lot positions will continue to serve as the springboard for our growth. Over 80% of our revenue year-to-date was generated in infill and infill adjacent submarkets where supply is more limited. Our year-to-date homebuilding gross margin of 33.6% is up 290 bps and reflects a record for any year in our history through the third quarter. With the ability to self-develop our lots, we expect finished lot costs as a percentage of home closings revenue to remain essentially flat for 2024 and 2025.” “Green Brick’s distinctive business model and strategy have yielded impressive results over the past decade. This has translated into exceptional returns for our stockholders, even while carrying land and lots on our balance sheet. Our year-to-date return on equity is 27.0%. This success is underpinned by our conservative balance sheet and financial discipline,” concluded Mr. Brickman. “At the end of the third quarter, our net debt to total capital ratio was 12.5% and our total debt to total capital ratio was only 16.4% with a weighted average pay rate of 3.4%. As we look ahead to the next decade, we remain committed to investing in our business and people to strengthen our platform and propel our growth.” Results for the Quarter Ended September 30, 2024: (Dollars in thousands, except per share data) Three Months Ended September 30, 2024 2023 Change New homes delivered 956  754  26.8  % Total revenues $ 523,660  $ 418,978  25.0  % Total cost of revenues 352,097  279,965  25.8  % Total gross profit $ 171,563  $ 139,013  23.4  % 1 Income before income taxes $ 118,976  $ 98,086  21.3  % Net income attributable to Green Brick Partners, Inc. $ 89,111  $ 72,156  23.5  % Diluted net income attributable to Green Brick Partners, Inc. per common share $ 1.98  $ 1.56  26.9  % Residential units revenue $ 522,859  $ 415,923  25.7  % Average sales price of homes delivered $ 546.9  $ 551.5  (0.8) % Homebuilding gross margin percentage 32.7  % 33.3  % -60 bps Selling, general and administrative expenses as a percentage of residential units revenue 11.0  % 11.3  % -30 bps Backlog revenue $ 581,848  $ 622,560  $ (40,712) Homes under construction 2,330  1,934  20.5  % Results for the Nine Months Ended September 30, 2024: (Dollars in thousands, except per share data) Nine Months Ended September 30, 2024 2023 Change New homes delivered 2,764  2,298  20.3  % Total revenues $ 1,531,629  $ 1,327,328  15.4  % Total cost of revenues 1,022,143  920,774  11.0  % Total gross profit $ 509,486  $ 406,554  25.3  % Income before income taxes $ 373,786  $ 289,470  29.1  % Net income attributable to Green Brick Partners, Inc. $ 277,770  $ 211,606  31.3  % Diluted net income attributable to Green Brick Partners, Inc. per common share $ 6.12  $ 4.55  34.5  % Residential units revenue $ 1,513,281  $ 1,320,730  14.6  % Average sales price of homes delivered $ 547.4  $ 574.1  (4.7) % Homebuilding gross margin percentage 33.6  % 30.7  % 290 bps Selling, general and administrative expenses as a percentage of residential units revenue 11.0  % 10.8  % 20 bps Earnings Conference Call: We will host our earnings conference call to discuss our third quarter ended September 30, 2024 at 12:00 p.m. Eastern Time on Thursday, October 31, 2024. The call can be accessed by dialing 1-888-660-6353 for domestic participants or 1-929-203-2106 for international participants and should reference meeting number 3162560. Participants may also join the call via webcast at: https://events.q4inc.com/attend ee/478287045 A telephone replay of the call will be available through November 30, 2024. To access the telephone replay, the domestic dial-in number is 1-800-770-2030, the international dial-in number is 1-609-800-9909 and the access code is 3162560, or by using the link at investors.greenbrickpartners.com. 2 GREEN BRICK PARTNERS, INC. CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Residential units revenue $ 522,859  $ 415,923  $ 1,513,281  $ 1,320,730  Land and lots revenue 801  3,055  18,348  6,598  Total revenues 523,660  418,978  1,531,629  1,327,328  Cost of residential units 351,666  277,446  1,005,162  915,600  Cost of land and lots 431  2,519  16,981  5,174  Total cost of revenues 352,097  279,965  1,022,143  920,774  Total gross profit 171,563  139,013  509,486  406,554  Selling, general and administrative expenses (57,740) (46,884) (165,912) (142,058) Equity in income of unconsolidated entities 992  1,345  4,770  11,265  Other income, net 4,161  4,612  25,442  13,709  Income before income taxes 118,976  98,086  373,786  289,470  Income tax expense 23,078  20,975  71,816  63,154  Net income 95,898  77,111  301,970  226,316   Net income attributable to noncontrolling interests 6,787  4,955  24,200  14,710  Net income attributable to Green Brick Partners, Inc. $ 89,111  $ 72,156  $ 277,770  $ 211,606  Net income attributable to Green Brick Partners, Inc. per common share: Basic $ 1.99  $ 1.58  $ 6.18  $ 4.60  Diluted $ 1.98  $ 1.56  $ 6.12  $ 4.55  Weighted average common shares used in the calculation of net income attributable to Green Brick Partners, Inc. per common share: Basic 44,457  45,320  44,614  45,543  Diluted 44,530  45,792  45,019  45,988  3 GREEN BRICK PARTNERS, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except share data) (Unaudited) September 30, 2024 December 31, 2023 ASSETS Cash and cash equivalents $ 80,069  $ 179,756  Restricted cash 24,579  19,703  Receivables 11,329  10,632  Inventory 1,918,046  1,533,223  Investments in unconsolidated entities 59,356  84,654  Right-of-use assets - operating leases 7,535  7,255  Property and equipment, net 6,901  7,054  Earnest money deposits 13,869  16,619  Deferred income tax assets, net 15,307  15,306  Intangible assets, net 303  367  Goodwill 680  680  Other assets 34,096  27,583  Total assets $ 2,172,070  $ 1,902,832  LIABILITIES AND EQUITY Liabilities: Accounts payable $ 67,346  $ 54,321  Accrued expenses 165,900  96,457  Customer and builder deposits 45,065  43,148  Lease liabilities - operating leases 8,600  7,898  Borrowings on lines of credit, net (1,718) (2,328) Senior unsecured notes, net 298,994  336,207  Notes payable —  12,981  Total liabilities 584,187  548,684  Commitments and contingencies Redeemable noncontrolling interest in equity of consolidated subsidiary 42,841  36,135  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 September 30, 2024 and December 31, 2023, respectively 47,603  47,603  Common stock, $0.01 par value: 100,000,000 shares authorized; 44,498,248 issued and outstanding as of September 30, 2024 and 45,005,175 issued and outstanding as of December 31, 2023, respectively 445  450  Additional paid-in capital 243,199  255,614  Retained earnings 1,229,490  997,037  Total Green Brick Partners, Inc. stockholders’ equity 1,520,737  1,300,704  Noncontrolling interests 24,305  17,309  Total equity 1,545,042  1,318,013  Total liabilities and equity $ 2,172,070  $ 1,902,832  4 GREEN BRICK PARTNERS, INC. SUPPLEMENTAL INFORMATION (Unaudited) Residential Units Revenue and New Homes Delivered (dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 Change % 2024 2023 Change % Home closings revenue $ 522,859  $ 415,827  $ 107,032  25.7% $ 1,512,901  $ 1,319,393  $ 193,508  14.7  % Mechanic’s lien contracts revenue —  96  (96) (100.0)% 380  1,337  (957) (71.6) % Residential units revenue $ 522,859  $ 415,923  $ 106,936  25.7% $ 1,513,281  $ 1,320,730  $ 192,551  14.6  % New homes delivered 956  754  202  26.8% 2,764  2,298  466  20.3  % Average sales price of homes delivered $ 546.9  $ 551.5  $ (4.6) (0.8)% $ 547.4  $ 574.1  $ (26.7) (4.7) % Land and Lots Revenue (dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 Change % 2024 2023 Change % Lots revenue $ 800  $ 2,026  $ (1,226) (60.5)% $ 5,644  $ 5,569  $ 75  1.3  % Land revenue 1  1,029  (1,028) (99.9)% 12,704  1,029  11,675  1,134.6  % Land and lots revenue $ 801  $ 3,055  $ (2,254) (73.8)% $ 18,348  $ 6,598  $ 11,750  178.1  % Lots closed 8 19 (11) (57.9)% 79  55  24  43.6  % Average sales price of lots closed $ 100.0  $ 106.6  $ (6.6) (6.2)% $ 71.4  $ 101.3  $ (29.9) (29.5) % New Home Orders and Backlog (dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 Change % 2024 2023 Change % Net new home orders 877  788  89  11.3% 2,803  2,677  126  4.7  % Revenue from net new home orders $ 454,358  $ 452,436  $ 1,922  0.4% $ 1,539,549  $ 1,572,859  $ (33,310) (2.1)% Average selling price of net new home orders $ 518.1  $ 574.2  $ (56.1) (9.8)% $ 549.3  $ 587.5  $ (38.2) (6.5)% Cancellation rate 8.5  % 6.1  % 2.4  % 39.3% 7.1  % 6.5  % 0.6  % 9.2  % Absorption rate per average active selling community per quarter 8.4  9.2  (0.8) (8.7)% 9.3  10.8  (1.5) (13.9) % Average active selling communities 105  86  19  22.1% 100  83  17  20.5  % Active selling communities at end of period 106  86  20  23.3% Backlog revenue $ 581,848  $ 622,560  $ (40,712) (6.5)% Backlog units 809  916  (107) (11.7)% Average sales price of backlog $ 719.2  $ 679.7  $ 39.5  5.8% 5 GREEN BRICK PARTNERS, INC. SUPPLEMENTAL INFORMATION (Unaudited) September 30, 2024 December 31, 2023 Central Southeast Total Central Southeast Total Lots owned Finished lots 4,070  726  4,796  4,014  964  4,978  Lots in communities under development 20,942  1,887  22,829  9,122  1,335  10,457  Land held for future development (1) 3,800  —  3,800  8,366  —  8,366  Total lots owned 28,812  2,613  31,425  21,502  2,299  23,801  Lots controlled Lots under option contracts 851  —  851  1,169  —  1,169  Land under option for future development 1,656  223  1,879  1,710  460  2,170  Lots under option through unconsolidated development joint ventures 2,627  270  2,897  1,210  331  1,541  Total lots controlled 5,134  493  5,627  4,089  791  4,880  Total lots owned and controlled (2) 33,946  3,106  37,052  25,591  3,090  28,681  Percentage of lots owned 84.9  % 84.1  % 84.8  % 84.0  % 74.4  % 83.0  % (1) Land held for future development consists of raw land parcels where development activities have been postponed due to market conditions or other factors. (2) Total lots excludes lots with homes under construction. The following table presents additional information on the lots we owned as of September 30, 2024 and December 31, 2023. September 30, 2024 December 31, 2023 Total lots owned (1) 31,425  23,801  Add certain lots included in Total Lots Controlled Land under option for future acquisition and development 1,879  2,170  Lots under option through unconsolidated development joint ventures 2,897  1,541  Total lots self-developed 36,201  27,512  Self-developed lots as a percentage of total lots owned and controlled (1) 97.7  % 95.9  % (1) Total lots owned includes finished lot purchases, which were less than 1.8% of total lots self-developed as of September 30, 2024. 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. 6 The following table represents the non-GAAP measure of adjusted homebuilding gross margin for the three and nine months ended September 30, 2024 and 2023 and reconciles these amounts to homebuilding gross margin, the most directly comparable GAAP measure. (Unaudited, in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Residential units revenue $ 522,859  $ 415,923  $ 1,513,281  $ 1,320,730  Less: Mechanic’s lien contracts revenue —  (96) (380) (1,337) Home closings revenue $ 522,859  $ 415,827  $ 1,512,901  $ 1,319,393  Homebuilding gross margin $ 171,193  $ 138,427  $ 508,003  $ 404,644  Homebuilding gross margin percentage 32.7  % 33.3  % 33.6  % 30.7  % Homebuilding gross margin 171,193  138,427  508,003  404,644  Add back: Capitalized interest charged to cost of revenues 2,788  2,968  8,539  10,456  Add back: Land impairment charge $ 1,308  $ —  $ 1,308  $ —  Adjusted homebuilding gross margin $ 175,289  $ 141,395  $ 517,850  $ 415,100  Adjusted homebuilding gross margin percentage 33.5  % 34.0  % 34.2  % 31.5  % Net debt to total capitalization is calculated as the total debt less cash and cash equivalents, divided by the sum of total Green Brick Partners, Inc. stockholders’ equity and total debt less cash and cash equivalents. The closest GAAP financial measure to the net debt to total capitalization ratio is the debt to total capitalization ratio. The following table represents a reconciliation of the net debt to total capitalization ratio as of September 30, 2024: Gross Cash and cash equivalents Net Total debt, net of debt issuance costs $ 297,276  $ (80,069) $ 217,207  Total Green Brick Partners, Inc. stockholders’ equity 1,520,737  —  1,520,737  Total capitalization $ 1,818,013  $ (80,069) $ 1,737,944  Debt to total capitalization ratio 16.4  % Net debt to total capitalization ratio 12.5  % About Green Brick Partners, Inc. Green Brick Partners, Inc (NYSE: GRBK), the third largest homebuilder in Dallas-Fort Worth, is a diversified homebuilding and land development company that operates through its seven subsidiary homebuilders in Texas, Georgia, and Florida. 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 retains interests in related financial services platforms, including Green Brick Title and BHome Mortgage. Green Brick 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/brands-services/ 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,”, “poised,” “intend,” “plan,” “predict,” “seek,” “strategy,” “target,” “will” or other words of similar meaning. Specifically, these statements reflect our beliefs and expectations regarding (i) our strategic advantages, including our focus on owning land and self-developing and on infill and infill-adjacent locations, and the impact on our future results; (ii) our positioning to capture future demand, increase market share and succeed in the current environment, including our ability to maintain industry-leading performance and margins; (iii) our ability to successfully implement our growth strategy, including our expectations for expansion and growth of our Trophy brand, and ancillary business opportunities; (iv) our expectations regarding trends in our markets, 7 such as demographic trends and demand for single-family homes; (v) our business priorities and our strategies to maintain the strength of our balance sheet and financial flexibility, and our positioning in the industry; (vi) the advantages of our lot and land strategies and locations, including the benefits to our returns, margins and ability to scale; (vii) our investments in land, lots and development in 2024, and the impact on our growth; (viii) our expected lot deliveries in 2024; (ix) our flexibility in adjusting home prices; (x) the demand for home ownership in the markets in which we operate and our ability to capitalize on such demand; (xi) the land-light model; (xii) our ability to scale our business and improve our operating leverage; and (xiii) our ability to deliver efficient and cost-effective growth, including our ability to manage costs and cycle times. These risks include, but are not limited to: (1) general economic conditions, seasonality, cyclicality and competition in the homebuilding industry; (2) 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; (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) significant periods of inflation or deflation; (5) a shortage of qualified 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 the successful development of our communities within expected time frames and the growth and expansion of our Trophy brand; (8) a failure to recruit, retain or develop highly skilled and competent employees; (9) the geographic concentration of our operations; (10) government regulation risks; (11) adverse changes in the availability or volatility of mortgage financing; (12) severe weather events or natural disasters; (13) difficulty in obtaining sufficient capital to fund our growth; (14) our ability to meet our debt service obligations; (15) a decline in the value of our inventories and resulting write-downs of the carrying value of our real estate assets; (16) our ability to adequately self-insure; and (17) changes in accounting standards that adversely affect our reported earnings or financial condition.. Green Brick assumes no obligation to update any forward-looking statements, which speak only as of the date they are made. 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: Benting Hu Vice President of Finance 469-573-6755 IR@greenbrickpartners.com 8
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other guidance in this release
Text is the filed exhibit, verbatim.