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Green Brick Partners, Inc. Reports Record First Quarter 2024 Results

DILUTED EPS OF $1.82, A RECORD FOR ANY FIRST QUARTER, UP 32.8%

RECORD HOMEBUILDING GROSS MARGIN OF 33.4%, UP 580 BASIS POINTS

NET NEW HOME ORDERS OF 1,071, FLAT YOY AND UP 58% SEQUENTIALLY

BACKLOG OF $725 MILLION, UP 31.8% YOY

DEBT TO TOTAL CAPITAL OF 18.3%; NET DEBT TO TOTAL CAPITAL OF 8.2%

Green Brick Partners, Inc. (NYSE: GRBK) (“we,” “Green Brick” or the “Company”) today reported record results for its first quarter ended March 31, 2024.

“Green Brick kicked off 2024 with excellent first quarter results highlighted by diluted earnings per share of $1.82, a record for any first quarter and an increase of 32.8% year-over-year. I am extremely proud of our teams being able to deliver consistently outstanding performance and results. During the first quarter, we delivered 821 homes, generating $443.1 million in home closings revenue,” said Jim Brickman, CEO and Co-Founder. “Our advantages in infill and infill-adjacent locations and self-development strategy produced a record homebuilding gross margin of 33.4%, which was the highest amongst our public homebuilding peers. More importantly, our accomplishments were achieved with a balance sheet that is stronger than ever. With record earnings and strong operating cash flows, we continued to invest in future growth while we decreased our debt-to-total-capital ratio by 550 basis points year-over-year to 18.3% at the end of the quarter and lowered our net-debt-to-total-capital ratio to 8.2%.”

“We achieved the second highest quarterly sales orders in company history at 1,071 net orders, just shy of the Covid-fueled 1,082 orders in the first quarter of 2021. Our absorption rate per average active selling community remained robust at 11.4 per quarter, or 3.8 per month, despite higher interest rates. Moreover, our net new home orders increased nearly 58% sequentially from the fourth quarter of 2023 due to strong demand within our markets. We were also able to reduce overall average incentive rates from 5.6% of sales price in 4Q23 to 3.8% in March 2024. Our cancellation rate dropped to 4.1%, the lowest of other public homebuilders in the quarter and the lowest in company history. Based on our strong sales performance, our backlog grew 30.7% sequentially to $725 million. Notably, our ending community count grew 24.1% year-over-year to 98. Additionally, we continued to grow starts as we started 997 homes in 1Q24, averaging over 940 starts during the last three quarters. With a mean companywide cycle time of 5.5 months for homes completed in the quarter, we improved our operations in terms of both scale and efficiency,” concluded Mr. Brickman.

Results for the Quarter Ended March 31, 2024:

(Dollars in thousands, except per share data)

Three Months Ended March 31,

 

 

 

2024

 

2023

 

%

New homes delivered

 

821

 

 

 

761

 

 

7.9

%

 

 

 

 

 

 

Total revenues

$

447,338

 

 

$

452,061

 

 

(1.0

)%

Total cost of revenues

 

299,081

 

 

 

327,455

 

 

(8.7

)%

Total gross profit

$

148,257

 

 

$

124,606

 

 

19.0

%

Income before income taxes

$

115,633

 

 

$

87,172

 

 

32.6

%

Net income attributable to Green Brick Partners, Inc.

$

83,301

 

 

$

64,180

 

 

29.8

%

Diluted net income attributable to Green Brick Partners, Inc. per common share

$

1.82

 

 

$

1.37

 

 

32.8

%

 

 

 

 

 

 

Residential units revenue

$

443,284

 

 

$

450,362

 

 

(1.6

)%

Average sales price of homes delivered

$

539.7

 

 

$

590.6

 

 

(8.6

)%

Homebuilding gross margin percentage

 

33.4

%

 

 

27.6

%

 

580 bps

 

 

 

 

 

 

Backlog

$

725,489

 

 

$

550,593

 

 

31.8

%

Homes under construction

 

2,233

 

 

 

1,759

 

 

26.9

%

Earnings Conference Call:

We will host our earnings conference call to discuss our first quarter ended March 31, 2024 at 12:00 p.m. Eastern Time on Thursday, May 2, 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/attendee/341898024

A telephone replay of the call will be available through June 1, 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.

GREEN BRICK PARTNERS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended March 31,

 

 

2024

 

2023

Residential units revenue

 

$

443,284

 

 

$

450,362

 

Land and lots revenue

 

 

4,054

 

 

 

1,699

 

Total revenues

 

 

447,338

 

 

 

452,061

 

Cost of residential units

 

 

295,313

 

 

 

326,124

 

Cost of land and lots

 

 

3,768

 

 

 

1,331

 

Total cost of revenues

 

 

299,081

 

 

 

327,455

 

Total gross profit

 

 

148,257

 

 

 

124,606

 

Selling, general and administrative expenses

 

 

(50,570

)

 

 

(45,945

)

Equity in income of unconsolidated entities

 

 

2,592

 

 

 

4,221

 

Other income, net

 

 

15,354

 

 

 

4,290

 

Income before income taxes

 

 

115,633

 

 

 

87,172

 

Income tax expense

 

 

24,842

 

 

 

19,031

 

Net income

 

 

90,791

 

 

 

68,141

 

Less: Net income attributable to noncontrolling interests

 

 

7,490

 

 

 

3,961

 

Net income attributable to Green Brick Partners, Inc.

 

$

83,301

 

 

$

64,180

 

 

 

 

 

 

Net income attributable to Green Brick Partners, Inc. per common share:

 

 

 

 

Basic

 

$

1.84

 

 

$

1.38

 

Diluted

 

$

1.82

 

 

$

1.37

 

Weighted average common shares used in the calculation of net income attributable to Green Brick Partners, Inc. per common share:

 

 

 

 

Basic

 

 

44,942

 

 

 

45,945

 

Diluted

 

 

45,430

 

 

 

46,351

 

GREEN BRICK PARTNERS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)

 

 

March 31, 2024

 

December 31, 2023

ASSETS

Cash and cash equivalents

$

185,897

 

 

$

179,756

 

Restricted cash

 

24,611

 

 

 

19,703

 

Receivables

 

8,630

 

 

 

10,632

 

Inventory

 

1,655,494

 

 

 

1,533,223

 

Investments in unconsolidated entities

 

34,701

 

 

 

84,654

 

Right-of-use assets - operating leases

 

6,997

 

 

 

7,255

 

Property and equipment, net

 

6,826

 

 

 

7,054

 

Earnest money deposits

 

16,464

 

 

 

16,619

 

Deferred income tax assets, net

 

15,306

 

 

 

15,306

 

Intangible assets, net

 

345

 

 

 

367

 

Goodwill

 

680

 

 

 

680

 

Other assets

 

20,623

 

 

 

27,583

 

Total assets

$

1,976,574

 

 

$

1,902,832

 

LIABILITIES AND EQUITY

Liabilities:

 

 

 

Accounts payable

$

53,330

 

 

$

54,321

 

Accrued expenses

 

114,218

 

 

 

96,457

 

Customer and builder deposits

 

54,120

 

 

 

43,148

 

Lease liabilities - operating leases

 

7,873

 

 

 

7,898

 

Borrowings on lines of credit, net

 

(2,260

)

 

 

(2,328

)

Senior unsecured notes, net

 

311,303

 

 

 

336,207

 

Notes payable

 

113

 

 

 

12,981

 

Total liabilities

 

538,697

 

 

 

548,684

 

Commitments and contingencies

 

 

 

Redeemable noncontrolling interest in equity of consolidated subsidiary

 

38,186

 

 

 

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 March 31, 2024 and December 31, 2023, respectively

 

47,603

 

 

 

47,603

 

Common stock, $0.01 par value: 100,000,000 shares authorized; 45,096,392 issued and 45,025,151 outstanding as of March 31, 2024 and 45,005,175 issued and outstanding as of December 31, 2023, respectively

 

451

 

 

 

450

 

Treasury stock, at cost: 71,241 shares as of March 31, 2024 and none as of December 31, 2023

 

(3,758

)

 

 

 

Additional paid-in capital

 

259,412

 

 

 

255,614

 

Retained earnings

 

1,079,619

 

 

 

997,037

 

Total Green Brick Partners, Inc. stockholders’ equity

 

1,383,327

 

 

 

1,300,704

 

Noncontrolling interests

 

16,364

 

 

 

17,309

 

Total equity

 

1,399,691

 

 

 

1,318,013

 

Total liabilities and equity

$

1,976,574

 

 

$

1,902,832

 

GREEN BRICK PARTNERS, INC.

SUPPLEMENTAL INFORMATION

(Unaudited)

 

Residential Units Revenue and New Homes Delivered

(dollars in thousands)

 

Three Months Ended March 31,

 

 

 

 

 

2024

 

2023

 

Change

 

%

Home closings revenue

 

$

443,094

 

$

449,430

 

$

(6,336

)

 

(1.4

)%

Mechanic’s lien contracts revenue

 

 

190

 

 

932

 

 

(742

)

 

(79.6

)%

Residential units revenue

 

$

443,284

 

$

450,362

 

$

(7,078

)

 

(1.6

)%

New homes delivered

 

 

821

 

 

761

 

 

60

 

 

7.9

%

Average sales price of homes delivered

 

$

539.7

 

$

590.6

 

$

(50.9

)

 

(8.6

)%

Land and Lots Revenue

(dollars in thousands)

 

Three Months Ended March 31,

 

 

 

 

 

2024

 

2023

 

Change

 

%

Lots revenue

 

$

4,054

 

$

1,699

 

$

2,355

 

 

138.6

%

Lots closed

 

 

63

 

 

18

 

 

45

 

 

250.0

%

Average sales price of lots closed

 

$

64.3

 

$

94.4

 

$

(30.1

)

 

(31.9

)%

New Home Orders and Backlog

(dollars in thousands)

 

Three Months Ended March 31,

 

 

 

 

 

2024

 

2023

 

Change

 

%

Net new home orders

 

 

1,071

 

 

 

1,067

 

 

 

4

 

 

0.4

%

Revenue from net new home orders

 

$

613,384

 

 

$

630,928

 

 

$

(17,544

)

 

(2.8

)%

Average selling price of net new home orders

 

$

572.7

 

 

$

591.3

 

 

$

(18.6

)

 

(3.1

)%

Cancellation rate

 

 

4.1

%

 

 

6.2

%

 

 

(2.1

)%

 

(33.9

)%

Absorption rate per average active selling community per quarter

 

 

11.4

 

 

 

13.3

 

 

 

(1.9

)

 

(14.3

)%

Average active selling communities

 

 

94

 

 

 

80

 

 

 

14

 

 

17.5

%

Active selling communities at end of period

 

 

98

 

 

 

79

 

 

 

19

 

 

24.1

%

Backlog

 

$

725,489

 

 

$

550,593

 

 

$

174,896

 

 

31.8

%

Backlog units

 

 

1,020

 

 

 

843

 

 

 

177

 

 

21.0

%

Average sales price of backlog

 

$

711.3

 

 

$

653.1

 

 

$

58.2

 

 

8.9

%

GREEN BRICK PARTNERS, INC.

SUPPLEMENTAL INFORMATION

(Unaudited)

 

 

March 31, 2024

 

December 31, 2023

 

Central

 

Southeast

 

Total

 

Central

 

Southeast

 

Total

Lots owned

 

 

 

 

 

 

 

 

 

 

 

Finished lots

3,408

 

 

952

 

 

4,360

 

 

4,014

 

 

964

 

 

4,978

 

Lots in communities under development

17,192

 

 

1,252

 

 

18,444

 

 

9,122

 

 

1,335

 

 

10,457

 

Land held for future development(1)

3,800

 

 

 

 

3,800

 

 

8,366

 

 

 

 

8,366

 

Total lots owned

24,400

 

 

2,204

 

26,604

 

 

21,502

 

 

2,299

 

 

23,801

 

 

 

 

 

 

 

 

 

 

 

 

 

Lots controlled

 

 

 

 

 

 

 

 

 

 

 

Lots under third party option contracts

1,183

 

 

 

 

1,183

 

 

1,169

 

 

 

 

1,169

 

Land under option for future acquisition and development

110

 

 

430

 

 

540

 

 

1,710

 

 

460

 

 

2,170

 

Lots under option through unconsolidated development joint ventures

2,157

 

 

302

 

 

2,459

 

 

1,210

 

 

331

 

 

1,541

 

Total lots controlled

3,450

 

 

732

 

 

4,182

 

 

4,089

 

 

791

 

 

4,880

 

Total lots owned and controlled (2)

27,850

 

 

2,936

 

 

30,786

 

 

25,591

 

 

3,090

 

28,681

 

Percentage of lots owned

87.6

%

 

75.1

%

 

86.4

%

 

84.0

%

 

74.4

%

 

83.0

%

___________________
(1)

Land held for future development consist 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 March 31, 2024 and December 31, 2023.

 

March 31, 2024

 

December 31, 2023

Total lots owned(1)

26,604

 

 

23,801

 

Add certain lots included in Total Lots Controlled

 

 

 

Land under option for future acquisition and development

540

 

 

2,170

 

Lots under option through unconsolidated development joint ventures

2,459

 

 

1,541

 

Total lots self-developed

29,603

 

 

27,512

 

Self-developed lots as a percentage of total lots owned and controlled(1)

96.2

%

 

95.9

%

___________________
(1)

Total lots owned includes finished lot purchases, which were less than 2.4% of total lots self-developed as of December 31, 2023.

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, 2024 and 2023 and reconciles these amounts to homebuilding gross margin, the most directly comparable GAAP measure.

(Unaudited, in thousands):

 

Three Months Ended March 31,

 

2024

 

2023

Residential units revenue

 

$

443,284

 

 

$

450,362

 

Less: Mechanic’s lien contracts revenue

 

 

(190

)

 

 

(932

)

Home closings revenue

 

$

443,094

 

 

$

449,430

 

Homebuilding gross margin

 

$

147,917

 

 

$

123,915

 

Homebuilding gross margin percentage

 

 

33.4

%

 

 

27.6

%

 

 

 

 

 

Homebuilding gross margin

 

 

147,917

 

 

 

123,915

 

Add back: Capitalized interest charged to cost of revenues

 

 

2,684

 

 

 

3,626

 

Adjusted homebuilding gross margin

 

$

150,601

 

 

$

127,541

 

Adjusted homebuilding gross margin percentage

 

 

34.0

%

 

 

28.4

%

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 March 31, 2024.

 

Gross

 

Less: Cash and cash

equivalents

 

Net

Total debt, net of debt issuance costs

$

309,156

 

 

$

(185,897

)

 

$

123,259

 

Total Green Brick Partners, Inc. stockholders’ equity

 

1,383,327

 

 

 

 

 

 

1,383,327

 

Total capitalization

$

1,692,483

 

 

$

(185,897

)

 

$

1,506,586

 

 

 

 

 

 

 

Debt to total capitalization ratio

 

18.3

%

 

 

 

 

Net debt to total capitalization ratio

 

 

 

 

 

8.2

%

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 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,” “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 infill and infill-adjacent locations, and the impact on our future results; (ii) our positioning to capture future demand 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 within DFW and into Austin and Houston, and ancillary business opportunities, (iv) our expectations regarding trends in our markets, such as demographic trends and demand for single-family homes; (v) 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 expectations for our investments in land, lots and development in 2024, and the impact on our growth; (viii) our expected lot deliveries in 2024; (ix) the demand for home ownership in the markets in which we operate and our ability to capitalize on such demand, and (x) our ability to deliver efficient and cost-effective growth, including our ability to manage costs and cycle times. 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 increased 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 qualified 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) our inability to implement new strategic investments; (8) a failure to recruit, retain or develop highly skilled and competent employees; (9) government regulation risks in the industries or markets we operate in; (10) a lack of availability or volatility of mortgage financing for homebuyers; (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, and (15) 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.

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