Market Overview

Green Brick Partners, Inc. Reports Third Quarter Results

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RECORD EPS OF $0.31 PER SHARE, UP 29.2%
43.4% INCREASE IN RESIDENTIAL UNITS REVENUE
46.8% INCREASE IN NEW HOME ORDERS
RECORD QUARTERLY RESIDENTIAL UNITS REVENUE AND GROSS PROFIT
EXPECTING 21% COMMUNITY GROWTH

PLANO, Texas, Nov. 07, 2019 (GLOBE NEWSWIRE) -- Green Brick Partners, Inc. (NASDAQ:GRBK) ("we," "Green Brick" or the "Company") today reported results for its third quarter ended September 30, 2019.

Results for the Third Quarter Ended September 30, 2019:

  • For the quarter ended September 30, 2019, basic net income attributable to Green Brick per common share ("EPS"), total revenue, gross profit, residential units revenue and homes under construction all reflect a record for any quarter. See the following details.

  • EPS for the three months ended September 30, 2019 was $0.31, a 29.2% increase compared to the quarterly earnings of $0.24 for the three months ended September 30, 2018.

  • For the three months ended September 30, 2019, total revenue was $209.4 million, an increase of 37.7% compared to $152.1 million for the three months ended September 30, 2018; gross profit was $44.7 million, an increase of 22.0% compared to $36.7 million for the three months ended September 30, 2018; and net income attributable to Green Brick was $15.7 million, an increase of 28.5% compared to $12.2 million for the three months ended September 30, 2018.

  • Residential units revenue for the three months ended September 30, 2019 was $199.9 million, an increase of 43.4% compared to $139.5 million for the three months ended September 30, 2018. Land and lots revenue for the three months ended September 30, 2019 was $9.5 million, a decrease of 24.7% compared to $12.6 million for the three months ended September 30, 2018.

  • The dollar value of backlog units as of September 30, 2019 was $319.7 million, an increase of 3.5% compared to $309.0 million as of September 30, 2018.

  • Average active selling communities increased from 72 communities as of September 30, 2018 to 80 communities as of September 30, 2019, an increase of 11.1%.

  • Homes under construction increased to 1,306 as of September 30, 2019, a 17.3% increase compared to 1,113 as of September 30, 2018.

Results for the Nine Months Ended September 30, 2019:

  • EPS for the nine months ended September 30, 2019 was $0.85, an increase of 11.8% compared to $0.76 for the nine months ended September 30, 2018.

  • For the nine months ended September 30, 2019, total revenue was $561.5 million, an increase of 28.1% compared to $438.5 million for the nine months ended September 30, 2018; gross profit was $120.4 million, an increase of 9.1%, compared to $110.4 million for the nine months ended September 30, 2018; and net income attributable to Green Brick was $42.7 million, an increase of 11.7% compared to $38.3 million for the nine months ended September 30, 2018.

  • Residential units revenue for the nine months ended September 30, 2019 was $536.6 million, a record for any nine-month period and an increase of 31.9% compared to $406.9 million for the nine months ended September 30, 2018. Land and lots revenue for the nine months ended September 30, 2019 was $25.0 million, a decrease of 21.0% compared to $31.6 million for the nine months ended September 30, 2018.

"We had a record-setting third quarter with EPS at its highest level at $0.31, up 29%, and with home closings revenue at a record $197 million, up 44%, both compared to the third quarter of 2018. Sales pace is typically slower when opening new neighborhoods. Even though we increased our community count by 13% during the third quarter of 2019, we increased our quarterly sales absorption pace per community by 34% year over year", said Jim Brickman, CEO of Green Brick Partners, Inc.

"We continue to believe that our selling community count will grow about 21% this year compared to January 1, 2019. Our first time move-up and entry level builder, Trophy Signature Homes, is off to a wonderful start. As a result, we are staged for continued earnings growth in 2020. I want to remind investors that earnings are not created equally. Our earnings growth is possible despite having one of the least leveraged balance sheets in the industry where we enjoy not only lower levels of debt but that debt is at a lower cost than almost every small and mid-cap peer, as evidenced by the recent $75 million 4.00% seven-year unsecured notes that closed in the third quarter with Prudential Private Capital. Our interest coverage was over eight times our interest incurred, which is nearly double that of the next small-cap builder and about five times that of the typical small-cap peer." Mr. Brickman continued, "During the third quarter of 2019, Fortune Magazine named Green Brick one of the 100 fastest growing companies in the world."

Earnings Conference Call:

We will host our earnings conference call to discuss our third quarter ended September 30, 2019 at 12:00 p.m. Eastern Time on Friday, November 8, 2019. 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 8092779. A replay of the call will be available from approximately 3:30 p.m. Eastern Time on November 8, 2019 through 11:59 p.m. Eastern Time on November 15, 2019. 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 8092779.

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 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.

Reclassifications:

Beginning in the first quarter of 2019, the Company reclassified its sales commission expenses from cost of residential units to selling, general and administrative expense in the condensed consolidated statements of income in order to be more comparable with a majority of its peers. There was no impact to net income from the reclassification in any period. Following this reclassification, the Company's adjusted homebuilding gross margin was 22.2% and 22.4% for the three and nine months ended September 30, 2019, respectively. Sales commission expenses represented 4.2% and 4.1% of the residential units revenue for the three and nine months ended September 30, 2019, respectively.


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,
    2019   2018   2019   2018
Residential units revenue   $ 199,918     $ 139,459     $ 536,560     $ 406,903  
Land and lots revenue   9,486     12,593     24,978     31,624  
Total revenues   209,404     152,052     561,538     438,527  
Cost of residential units   157,243     104,831     421,663     302,899  
Cost of land and lots   7,436     10,553     19,503     25,255  
Total cost of revenues   164,679     115,384     441,166     328,154  
Total gross profit   44,725     36,668     120,372     110,373  
Selling, general and administrative expense   25,078     19,643     71,104     57,790  
Change in fair value of contingent consideration   1,492         1,749      
Equity in income of unconsolidated entities   3,022     2,719     7,565     6,534  
Other income, net   3,795     363     6,663     1,831  
Income before income taxes   24,972     20,107     61,747     60,948  
Income tax expense   5,833     4,734     14,993     13,341  
Net income   19,139     15,373     46,754     47,607  
Less: Net income attributable to noncontrolling interests   3,468     3,176     4,018     9,338  
Net income attributable to Green Brick Partners, Inc.   $ 15,671     $ 12,197     $ 42,736     $ 38,269  
                 
Net income attributable to Green Brick Partners, Inc. per common share:                
Basic   $ 0.31     $ 0.24     $ 0.85     $ 0.76  
Diluted   $ 0.31     $ 0.24     $ 0.84     $ 0.75  
Weighted average common shares used in the calculation of net income attributable to Green Brick Partners, Inc. per common share:                
Basic   50,475     50,686     50,564     50,642  
Diluted   50,597     50,778     50,642     50,760  
                         


GREEN BRICK PARTNERS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

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