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Press release content from Globe Newswire. The AP news staff was not involved in its creation.
PRESS RELEASE: Paid content from Globe Newswire
Press release content from Globe Newswire. The AP news staff was not involved in its creation.

Green Brick Partners, Inc. Reports Record Third Quarter 2021 Results

November 2, 2021 GMT

Record Home Closings Revenues of $338.9 Million, Up 28.4%
Income Before Taxes of $65.2 Million, Up 41.9%
Record Backlog of $1,017.2 Million, Up 83.9%
Home Building Gross Margin Up 210 Bps
Record Lots Owned and Controlled Up 101.8%

PLANO, Texas, Nov. 02, 2021 (GLOBE NEWSWIRE) -- Green Brick Partners, Inc. (Nasdaq: GRBK) (“we,” “Green Brick” or the “Company”) today reported record results for its third quarter ended September 30, 2021.

“Our third quarter income of $48.5 million was a record for any third quarter,” said Jim Brickman, CEO and Co-Founder. “The average sales price of a home in our backlog is up 20.8% over the prior year and 7.2% over Q2 2021. Despite rising input costs, we believe that our focus on price over pace will continue to sustain our industry-leading margins and strong financial performance.”

“After we saw the huge upward shift in demand in June 2020, our land teams did a fantastic job of quickly pivoting to acquire well located land. As a result, during the last twelve months our lot position grew over 100% to 24,354 owned and controlled lots. With our record $1 billion backlog, leading margins, and superior lot position, Green Brick is extremely well positioned to grow our business in 2022 and beyond. At the end of the third quarter, we now have a record 863 spec homes, up nearly 50% year-over-year, included in our record 2,555 homes under construction. Most of our homes under construction should convert to closings over the next three quarters. The sale and closing of the increased number of spec homes will allow us to capture the most current price increases and to maximize profitability.”

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Results for the Quarter Ended September 30, 2021:

For the quarter ended September 30, 2021, our residential units revenue and backlog reflect a record for any quarter since the Company’s inception. Homes under construction and lots owned and controlled also represent a Company record as of the end of any quarter.

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(Dollars in thousands, except per share data)Three Months Ended September 30,  
 2021 2020 Increase
New homes delivered738  622  18.6%
      
Total revenues$342,340  $275,821  24.1%
Total cost of revenues251,004  207,935  20.7%
Total gross profit$91,336  $67,886  34.5%
Income before income taxes$65,158  $45,923  41.9%
Net income attributable to Green Brick Partners, Inc.$48,507  $34,819  39.3%
Diluted net income attributable to Green Brick Partners, Inc. per share$0.95  $0.68  39.7%
      
Residential units revenue$338,900  $263,885  28.4%
Homebuilding gross margin percentage26.9% 24.8% 210 bps
      
Backlog$1,017,220  $553,058  83.9%
Lots owned and controlled24,354  12,066  101.8%
Homes under construction2,555  1,361  87.7%

Green Brick, like every other company in the United States and the global economy, has been impacted by the coronavirus, or COVID-19, pandemic and the impact of governmental actions taken to combat the pandemic. After an initial decline in orders and construction at the onset of the crisis, orders have subsequently achieved all-time highs. The significant increase in new home demand that we have seen and that the industry has experienced since the second half of 2020 has, in turn, led to substantial price increases, but also increased demand for labor and the raw materials, products and appliances for new homes. As a result, we have and expect to continue to experience increases in cost and decreased availability of skilled labor as well as increases, shortages, and significant extensions to our lead time for the delivery of key materials and inputs.

Earnings Conference Call:
We will host our earnings conference call to discuss our third quarter ended September 30, 2021 at 12:00 p.m. Eastern Time on Wednesday, November 3, 2021. 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 13724238. Participants may also join the call via webcast at: greenbrickpartners.com/reporting/.

A replay of the call will be available from approximately 3:00 p.m. Eastern Time on November 3, 2021 through 11:59 p.m. Eastern Time on December 1, 2021. 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 13724238.

Non-GAAP Financial Measures and Key Financial Metrics:

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.

GREEN BRICK PARTNERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)

  Three Months Ended September 30, Nine Months Ended September 30,
  2021 2020 2021 2020
Residential units revenue $338,900  $263,885  $889,636  $683,739 
Land and lots revenue 3,440  11,936  60,989  38,182 
Total revenues 342,340  275,821  950,625  721,921 
Cost of residential units 247,899  198,422  654,136  521,332 
Cost of land and lots 3,105  9,513  45,188  29,839 
Total cost of revenues 251,004  207,935  699,324  551,171 
Total gross profit 91,336  67,886  251,301  170,750 
Selling, general and administrative expenses (33,709) (29,177) (97,182) (81,718)
Change in fair value of contingent consideration   (210)   (210)
Equity in income of unconsolidated entities 5,555  5,299  14,039  13,038 
Other income, net 1,976  2,125  6,239  3,004 
Income before income taxes 65,158  45,923  174,397  104,864 
Income tax expense 13,898  9,969  37,093  17,357 
Net income 51,260  35,954  137,304  87,507 
Less: Net income attributable to noncontrolling interests 2,753  1,135  10,565  3,124 
Net income attributable to Green Brick Partners, Inc. $48,507  $34,819  $126,739  $84,383 
         
Net income attributable to Green Brick Partners, Inc. per common share:        
Basic $0.96  $0.69  $2.50  $1.67 
Diluted $0.95  $0.68  $2.48  $1.66 
Weighted average common shares used in the calculation of net income attributable to Green Brick Partners, Inc. per common share:        
Basic 50,732  50,617  50,689  50,552 
Diluted 51,079  50,876  51,046  50,739 

GREEN BRICK PARTNERS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)

 September 30, 2021 December 31, 2020
ASSETS
Cash and cash equivalents$21,561  $19,479 
Restricted cash31,442  14,156 
Receivables7,029  5,224 
Inventory1,170,297  844,635 
Investments in unconsolidated entities52,735  46,443 
Right-of-use assets - operating leases5,023  2,538 
Property and equipment, net3,172  3,595 
Earnest money deposits26,403  22,242 
Deferred income tax assets, net15,376  15,376 
Intangible assets, net558  622 
Goodwill680  680 
Other assets13,040  13,857 
Total assets$1,347,316  $988,847 
LIABILITIES AND EQUITY
Liabilities:   
Accounts payable$48,314  $24,521 
Accrued expenses64,567  40,416 
Customer and builder deposits70,079  38,131 
Lease liabilities - operating leases5,053  2,591 
Borrowings on lines of credit, net122,717  106,687 
Senior unsecured notes, net235,737  111,056 
Notes payable222  2,125 
Contingent consideration  368 
Total liabilities546,689  325,895 
Commitments and contingencies   
Redeemable noncontrolling interest in equity of consolidated subsidiary17,406  13,543 
Equity:   
Green Brick Partners, Inc. stockholders’ equity   
Preferred stock, $0.01 par value: 5,000,000 shares authorized; none issued and outstanding   
Common stock, $0.01 par value: 100,000,000 shares authorized; 51,151,911 and 51,053,858 issued and 50,759,972 and 50,661,919 outstanding as of September 30, 2021 and December 31, 2020, respectively511  511 
Treasury stock, at cost, 391,939 shares(3,167) (3,167)
Additional paid-in capital293,050  293,242 
Retained earnings476,395  349,656 
Total Green Brick Partners, Inc. stockholders’ equity766,789  640,242 
Noncontrolling interests16,432  9,167 
Total equity783,221  649,409 
Total liabilities and equity$1,347,316  $988,847 

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,
    
 2021 2020 Change % 2021 2020 Change %
Home closings revenue $338,075  $262,319  $75,756  28.9% $886,488  $678,352  $208,136  30.7%
Mechanic’s lien contracts revenue 825  1,566  (741) (47.3)% 3,148  5,387  (2,239) (41.6)%
Residential units revenue $338,900  $263,885  $75,015  28.4% $889,636  $683,739  $205,897  30.1%
New homes delivered 738  622  116  18.6% 2,011  1,623  388  23.9%
Average sales price of homes delivered $458.1  $421.7  $36.4  8.6% $440.8  $418.0  $22.8  5.5%
Land and Lots Revenue
(dollars in thousands)
  Three Months Ended
September 30,
      Nine Months Ended
September 30,
    
 2021 2020 Change % 2021 2020 Change %
Lots revenue $2,126  $11,936  $(9,810) (82.2)% $15,184  $37,798  $(22,614) (59.8)%
Land revenue 1,314    1,314  100.0% 45,805  384  45,421  11,828.4%
Land and lots revenue $3,440  $11,936  $(8,496) (71.2)% $60,989  $38,182  $22,807  59.7%
Lots closed  31   138  (107) (77.5)%  173   302  (129) (42.7)%
Average sales price of lots closed $68.6  $86.5  $(17.9) (20.7)% $87.8  $125.2  $(37.4) (29.9)%
New Home Orders and Backlog
(dollars in thousands)
  Three Months Ended
September 30,
      Nine Months Ended
September 30,
    
 2021 2020 Change % 2021 2020 Change %
Net new home orders 689  823  (134) (16.3)% 2,375  2,037  338  16.6%
Cancellation rate 6.9% 11.7% (4.8)% (41.0)% 6.7% 14.7% (8.0)% (54.4)%
Absorption rate per average active selling community per quarter 8.2  8.7  (0.5) (5.7)% 8.8  6.9  1.9  27.5%
Average active selling communities 84  95  (11) (11.6)% 90  98  (8) (8.2)%
Active selling communities at end of period 80  100  (20) (20.0)%        
Backlog $1,017,220  $553,058  $464,162  83.9%        
Backlog (units) 1,827  1200  627  52.3%        
Average sales price of backlog $556.8  $460.9  $95.9  20.8%        
  September 30, 2021 December 31, 2020
Lots owned(1)    
Central 14,917  6,823 
Southeast 2,212  2,097 
Total lots owned 17,129  8,920 
Lots controlled(1)    
Central 6,440  4,398 
Southeast 785  1,150 
Total lots controlled 7,225  5,548 
Total lots owned and controlled(1) 24,354  14,468 
Percentage of lots owned 70.3% 61.7%
 

(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 September 30, 2021 and December 31, 2020.

 September 30, 2021 December 31, 2020
Total lots owned17,129  8,920 
Add certain lots included in Total Lots Controlled   
Land under option for future acquisition and development2,577  740 
Lots under option through unconsolidated development joint ventures1,903  1,838 
Total lots self-developed21,609  11,498 
Self-developed lots as a percentage of total lots owned and controlled88.7% 79.5%

Reconciliation of Non-GAAP Financial Measures

The following table represents the non-GAAP measure of adjusted homebuilding gross margin for the three and nine months ended September 30, 2021 and 2020 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,
 2021 2020 2021 2020
Residential units revenue $338,900  $263,885  $889,636  $683,739 
Less: Mechanic’s lien contracts revenue (825) (1,566) (3,148) (5,387)
Home closings revenue $338,075  $262,319  $886,488  $678,352 
Homebuilding gross margin $90,875  $65,184  $234,834  $161,450 
Homebuilding gross margin percentage 26.9% 24.8% 26.5% 23.8%
         
Homebuilding gross margin 90,875  65,184  234,834  161,450 
Add back: Capitalized interest charged to cost of revenues 2,569  2,914  6,915  7,802 
Adjusted homebuilding gross margin $93,444  $68,098  $241,749  $169,252 
Adjusted homebuilding gross margin percentage 27.6% 26.0% 27.3% 25.0%

The following table presents the pre-tax income for the three and nine months ended September 30, 2021 and 2020, 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 September 30, Nine Months Ended September 30,
 2021 2020 2021 2020
Net income attributable to Green Brick Partners, Inc. $48,507  $34,819  $126,739  $84,383 
Income tax expense attributable to Green Brick Partners, Inc. 13,896  9,968  37,089  17,354 
Pre-tax income attributable to Green Brick Partners, Inc. $62,403  $44,787  $163,828  $101,737 

About Green Brick Partners, Inc.

Green Brick Partners, Inc. is a diversified homebuilding and land development company. Green Brick owns five subsidiary homebuilders in Dallas, 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 include statements regarding (i) our belief that our land position and back-log will position us to grow our business in 2022 and beyond, (ii) 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 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 over the remainder of 2021 and 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) continuing impacts from the COVID-19 pandemic; (2) general economic conditions, seasonality, cyclicality and competition in the homebuilding industry; (3) changes in macroeconomic conditions, including interest rates and unemployment rates, that could adversely impact demand for new homes or the ability of potential buyers to qualify; (4) shortages, delays or increased costs of raw materials, especially in light of COVID-19 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; (5) a shortage of 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 an inability to grow our operations or expand our Trophy brand; (8) a failure to recruit, retain or develop highly skilled and competent employees; (9) government regulation risks; (10) a lack of availability or volatility of mortgage financing or a rise in interest rates; (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; (15) 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