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Green Brick Partners, Inc. Reports Strong Third Quarter 2017 Results

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Green Brick Partners, Inc. Reports Strong Third Quarter 2017 Results

Green Brick Partners, Inc. Reports Strong Third Quarter 2017 Results

Third Quarter Basic EPS of $0.19 and Basic Adjusted EPS of $0.29, up 46.2% and 45.0%; Third Quarter Pre-Tax Income of $14.6 million, up 48.1%; Third Quarter Revenue of $113.7 million, up 24.0%; Backlog of $164.6 million, up 18.7%

PLANO, TX--(Marketwired - November 06, 2017) - Green Brick Partners, Inc. (NASDAQ:GRBK) ("we," "Green Brick" or the "Company"), today reported results for its third quarter ended September 30, 2017.

Results for the Third Quarter Ended September 30, 2017:

  • Basic net income attributable to Green Brick per common share ("EPS") for the three months ended September 30, 2017 was $0.19, an increase of 46.2%, compared to $0.13 for the three months ended September 30, 2016. Basic adjusted net income attributable to Green Brick per common share ("Adjusted EPS") for the three months ended September 30, 2017 was $0.29, an increase of 45.0%, compared to $0.20 for the three months ended September 30, 2016. See "Reconciliation of Non-GAAP Financial Measures."
  • For the three months ended September 30, 2017, the Company had: pre-tax income of $14.6 million, an increase of 48.1%, compared to $9.9 million for the three months ended September 30, 2016; gross profit of $25.4 million, an increase of 23.1%, compared to $20.6 million for the three months ended September 30, 2016; and revenue of $113.7 million, an increase of 24.0%, compared to $91.7 million for three months ended September 30, 2016.
  • Builder operations revenue for the three months ended September 30, 2017 was $108.4 million, an increase of 23.5%, compared to $87.8 million for the three months ended September 30, 2016. Land development revenue for the three months ended September 30, 2017 was $5.3 million, an increase of 37.1%, compared to $3.8 million for the three months ended September 30, 2016.
  • The dollar value of backlog units as of September 30, 2017 was $164.6 million, an increase of 18.7% compared to September 30, 2016. The average sales price of homes in backlog increased $48,249, or 11.0%, to $488,522 for the three months ended September 30, 2017, compared to $440,273 for the three months ended September 30, 2016.
  • Homes under construction increased 7.5% to 715 as of September 30, 2017, compared to 665 as of September 30, 2016.

Results for the Nine Months Ended September 30, 2017:

  • Basic EPS for the nine months ended September 30, 2017 was $0.47, an increase of 42.4%, compared to $0.33 for the nine months ended September 30, 2016. Basic Adjusted EPS for the nine months ended September 30, 2017 was $0.74, an increase of 42.3%, compared to $0.52 for the nine months ended September 30, 2016. See "Reconciliation of Non-GAAP Financial Measures."
  • For the nine months ended September 30, 2017, the Company had: pre-tax income of $36.7 million, an increase of 44.9%, compared to $25.3 million for the nine months ended September 30, 2016; gross profit of $69.6 million, an increase of 21.8%, compared to $57.2 million for the nine months ended September 30, 2016; and revenue of $318.0 million, an increase of 22.0%, compared to $260.6 million for nine months ended September 30, 2016.
  • Builder operations revenue for the nine months ended September 30, 2017 was $302.2 million, an increase of 21.8%, compared to $248.2 million for the nine months ended September 30, 2016. Land development revenue for the nine months ended September 30, 2017 was $15.8 million, an increase of 27.8%, compared to $12.4 million for the nine months ended September 30, 2016.

"I am pleased to report that in the third quarter we achieved record quarterly pre-tax income of $14.6 million, an increase over third quarter 2016 of 48%. This was achieved on revenue of $113.7 million, which is an increase of 24% over third quarter 2016," said James R. Brickman, Green Brick's Chief Executive Officer. "Despite the significant increase in closings, our backlog grew 19% over third quarter 2016 to $164.6 million. We believe that this momentum will continue due to our superior lot position, strong balance sheet, teamwork and focus on operational excellence"

Earnings Conference Call:

We will host our earnings conference call to discuss our third quarter ended September 30, 2017 at 12:00 p.m. Eastern Time on Tuesday, November 7, 2017. The call can be accessed by dialing 800-374-0137 for domestic participants or 904-685-8013 for international participants. Participants should reference conference ID code 97853432. A replay of the call will be available from approximately 3:30 p.m. Eastern Time on November 7, 2017 through 11:59 p.m. Eastern Time on November 14, 2017. To access the replay, the domestic dial-in number is 855-859-2056, the international dial-in number is 404-537-3406 and the conference ID code is 97853432.

Investment in Unconsolidated Entity:

On August 15, 2017, the Company entered the Colorado market with the acquisition of a 49.9% interest in GB Challenger, LLC, a newly formed Texas limited liability company (the "Challenger Subsidiary"), which holds all of the equity interests in certain homebuilders operating under the name Challenger Homes. The consideration for the acquisition was 1,497,000 unregistered shares of the Company's common stock, par value $0.01 per share, subject to a holdback of 20,000 shares. The Company acquired a noncontrolling interest in Challenger Homes, one of Colorado's leading private homebuilders, and now our sixth builder partner, in order to expand its business with partners that are complementary to its current builder partner group and to gain a presence in the Colorado Springs market. Challenger Homes constructs townhouses, single family homes and luxury patio homes, and is headquartered in Colorado Springs, Colorado. The Company may have the opportunity to acquire an additional 20.1% or, in certain circumstances, all of the remaining interest in the Challenger Subsidiary on or after August 15, 2020. The Company incurred $0.2 million in related acquisition costs. The Company's investment in the Challenger Subsidiary is treated as an unconsolidated investment under the equity method of accounting, carried at cost, and is included in investment in unconsolidated entity in the Company's consolidated balance sheets.

Change in Classification:

Certain indirect project costs previously classified as salary expense and selling, general and administrative expense have been classified as cost of residential units for the three and nine months ended September 30, 2016 to properly present cost of residential units, salary expense, and selling, general and administrative expense.

Reconciliation of 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 the Company's 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 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.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
  Three Months Ended September 30, Nine Months Ended September 30,
  2017 2016 2017 2016
Sale of residential units $ 108,437   $ 87,827   $ 302,179   $ 248,187  
Sale of land and lots   5,269     3,843     15,815     12,377  
  Total revenues   113,706     91,670     317,994     260,564  
Cost of residential units   84,752     68,350     237,066     195,001  
Cost of land and lots   3,544     2,676     11,306     8,389  
  Total cost of sales   88,296     71,026     248,372     203,390  
  Total gross profit   25,410     20,644     69,622     57,174  
Salary expense   (5,218 )   (5,256 )   (15,985 )   (15,886 )
  Selling, general and administrative expense   (4,302 )   (4,130 )   (12,747 )   (12,275 )
    Operating profit   15,890     11,258     40,890     29,013  
  Equity in income of unconsolidated entity   968     -     968     -  
Other income, net   435
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