Green Brick Partners, Inc. Reports Fourth Quarter and Full Year 2023 Results

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EXPANSION INTO HOUSTON, TEXAS

Q4 HOMEBUILDING GROSS MARGIN OF 31.4%, UP 520 BPS YOY

Q4 DILUTED EPS OF $1.58, UP 33.9% YOY

RECORD HIGH FULL YEAR DILUTED EPS OF $6.14

NET NEW HOME ORDERS UP 60.5% FOR THE QUARTER AND 70.1% YOY

DEBT TO TOTAL CAPITAL OF 21.1%; NET DEBT TO TOTAL CAPITAL OF 11.4%

PLANO, Texas, February 29, 2024--(BUSINESS WIRE)--Green Brick Partners, Inc. (NYSE: GRBK) ("we," "Green Brick" or the "Company"), today reported results for its fourth quarter ended December 31, 2023.

Green Brick finished 2023 with a record $6.14 diluted EPS and record total revenues of $1.8 billion.

"For the fourth quarter, we delivered a record 825 homes, an increase of 13.5% due to shorter construction cycle times and strong demand. Our industry leading homebuilding gross margin was 31.4% for the quarter and 30.9% for the year. As a result, diluted EPS for the fourth quarter increased 34% year-over-year to $1.58 per share," said Jim Brickman, CEO and Co-Founder.

"Dallas-Fort Worth and Atlanta, our two primary markets, continue to rank very high among in-migration destination cities and are among the largest housing markets in the nation. Demand in these markets remained healthy throughout 2023, benefiting from favorable demographic shifts and strong employment. We continue to experience limited competition in our infill and infill-adjacent locations from new home builders as well as existing homeowners due to the ‘golden handcuffs’ of low-rate mortgages. As a result, our net new orders for the full year grew 70.1% year-over-year to 3,356, a record number for the company."

Mr. Brickman added, "During the fourth quarter, we started 948 homes, which tripled the pace of 4Q22. Our home starts for the last nine months have now averaged almost 900 homes per quarter. At the same time, our fourth quarter cycle times were 35% shorter year-over-year. Our backlog of $555 million at the end of 2023 increased 50.4% year-over-year, which we believe provides us a great platform to start 2024.

Our industry leading results would not have been possible without a fantastic team effort combined with our financial discipline and investment grade balance sheet. At the end of the year, our net debt to total capital ratio was 11.4% and our total debt to total capital ratio was only 21.1%, one of the lowest among our public homebuilder peers. Our low leverage and cost of debt have enabled us to retain more profits to fund our growth. Our return on equity was 24.9% for the full year, which we believe reflects the strategic advantages of our markets, our rigorous land underwriting and continued success of our management and land development teams. As we look ahead, we believe we are well positioned to continue delivering one of the best risk-adjusted returns on equity in the industry."

Mr. Brickman concluded, "We are excited to announce that Green Brick recently closed its first land acquisition in Houston, which will be co-developed with one of the largest public homebuilders in the country. Trophy will have 460 home sites in the community, and we expect to start home construction in 2025. Houston, the fourth most populous city in the U.S, continues to be one of the most active homebuilding markets in the county. We believe Trophy is in an excellent position to capture the demand for entry-level and move-up homes with their value-rich products. As demonstrated with Trophy’s meteoric growth in the Dallas-Fort Worth area the last five years, we believe Trophy has scalability in the Houston market as well."

Results for the Quarter Ended December 31, 2023:

(Dollars in thousands, except per share data)

Three Months Ended December 31,

2023

2022

Change

New homes delivered

825

727

13.5

%

Total revenues

$

450,382

$

431,089

4.5

%

Total cost of revenues

308,754

318,635

(3.1

)%

Total gross profit

$

141,628

$

112,454

25.9

%

Income before income taxes

$

101,843

$

77,954

30.6

%

Net income attributable to Green Brick Partners, Inc.

$

73,020

$

55,547

31.5

%

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

$

1.58

$

1.18

33.9

%

Residential units revenue

$

448,525

$

430,026

4.3

%

Average sales price of homes delivered

$

543.5

$

589.5

(7.8

)%

Homebuilding gross margin percentage

31.4

%

26.2

%

520 bps

Backlog

$

555,200

$

369,095

$

186,105

Homes under construction

2,057

1,853

11.0

%

Results for the Year Ended December 31, 2023:

(Dollars in thousands, except per share data)

Twelve Months Ended December 31,

2023

2022

Change

New homes delivered

3,123

2,916

7.1

%

Total revenues

$

1,777,710

$

1,757,793

1.1

%

Total cost of revenues

1,229,528

1,234,768

(0.4

)%

Total gross profit

$

548,182

$

523,025

4.8

%

Income before income taxes

$

391,313

$

396,465

(1.3

)%

Net income attributable to Green Brick Partners, Inc.

$

284,626

$

291,900

(2.5

)%

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

$

6.14

$

6.02

2.0

%

Residential units revenue

$

1,769,255

$

1,703,951

3.8

%

Average sales price of homes delivered

$

566.1

$

581.9

(2.7

)%

Homebuilding gross margin percentage

30.9

%

29.8

%

110 bps

Selling, general and administrative expenses as a percentage of residential units revenue

10.9

%

9.6

%

130 bps

Earnings Conference Call:

We will host our earnings conference call to discuss our fourth quarter ended December 31, 2023 at 12:00 p.m. Eastern Time on Friday, March 1, 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/984972633

A telephone replay of the call will be available through March 31, 2024. To access the telephone replay, the domestic dial-in number is 1-800-770-2030, the international dial-in number is 1-647-362-9199 and the access code is 3162560, or by using the link at investors.greenbrickpartners.com.

GREEN BRICK PARTNERS, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

Three Months Ended December 31,

Twelve Months Ended December 31,

2023

2022

2023

2022

Residential units revenue

$

448,525

$

430,026

$

1,769,255

$

1,703,951

Land and lots revenue

1,857

1,063

8,455

53,842

Total revenues

450,382

431,089

1,777,710

1,757,793

Cost of residential units

307,479

317,806

1,223,079

1,196,914

Cost of land and lots

1,275

829

6,449

37,854

Total cost of revenues

308,754

318,635

1,229,528

1,234,768

Total gross profit

141,628

112,454

548,182

523,025

Selling, general and administrative expenses

(50,919

)

(44,629

)

(192,977

)

(163,943

)

Equity in income of unconsolidated entities

5,477

5,719

16,742

25,626

Other income, net

5,657

4,410

19,366

11,757

Income before income taxes

101,843

77,954

391,313

396,465

Income tax expense

21,484

16,790

84,638

82,468

Net income

80,359

61,164

306,675

313,997

Less: Net income attributable to noncontrolling interests

7,339

5,617

22,049

22,097

Net income attributable to Green Brick Partners, Inc.

$

73,020

$

55,547

$

284,626

$

291,900

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

Basic

$

1.60

$

1.19

$

6.20

$

6.07

Diluted

$

1.58

$

1.18

$

6.14

$

6.02

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

Basic

45,160

45,994

45,446

47,648

Diluted

45,635

46,332

45,917

47,987

GREEN BRICK PARTNERS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

December 31, 2023

December 31, 2022

ASSETS

Cash and cash equivalents

$

179,756

$

76,588

Restricted cash

19,703

16,682

Receivables

10,632

5,288

Inventory

1,533,223

1,422,680

Investments in unconsolidated entities

84,654

74,224

Right-of-use assets - operating leases

7,255

3,458

Property and equipment, net

7,054

2,919

Earnest money deposits

16,619

23,910

Deferred income tax assets, net

15,306

16,448

Intangible assets, net

367

452

Goodwill

680

680

Other assets

27,583

12,346

Total assets

$

1,902,832

$

1,655,675

LIABILITIES AND EQUITY

Liabilities:

Accounts payable

$

54,321

$

51,804

Accrued expenses

96,457

91,281

Customer and builder deposits

43,148

29,112

Lease liabilities - operating leases

7,898

3,582

Borrowings on lines of credit, net

(2,328

)

17,395

Senior unsecured notes, net

336,207

335,825

Notes payable

12,981

14,622

Total liabilities

548,684

543,621

Commitments and contingencies

Redeemable noncontrolling interest in equity of consolidated subsidiary

36,135

29,239

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 December 31, 2023 and December 31, 2022, respectively

47,603

47,696

Common stock, $0.01 par value: 100,000,000 shares authorized; 45,005,175 issued and outstanding as of December 31, 2023 and 46,032,930 issued and outstanding as of December 31, 2022, respectively

450

460

Additional paid-in capital

255,614

259,410

Retained earnings

997,037

754,341

Total Green Brick Partners, Inc. stockholders’ equity

1,300,704

1,061,907

Noncontrolling interests

17,309

20,908

Total equity

1,318,013

1,082,815

Total liabilities and equity

$

1,902,832

$

1,655,675

GREEN BRICK PARTNERS, INC.

SUPPLEMENTAL INFORMATION

(Unaudited)

Residential Units Revenue and New Homes Delivered (dollars in thousands)

Three Months Ended December 31,

Twelve Months Ended December 31,

2023

2022

Change

%

2023

2022

Change

%

Home closings revenue

$

448,395

$

428,582

$

19,813

4.6

%

$

1,767,788

$

1,696,911

$

70,877

4.2

%

Mechanic’s lien contracts revenue

130

1,444

(1,314

)

(91.0

)%

1,467

7,040

(5,573

)

(79.2

)%

Residential units revenue

$

448,525

$

430,026

$

18,499

4.3

%

$

1,769,255

$

1,703,951

$

65,304

3.8

%

New homes delivered

825

727

98

13.5

%

3,123

2,916

207

7.1

%

Average sales price of homes delivered

$

543.5

$

589.5

$

(46.0

)

(7.8

)%

$

566.1

$

581.9

$

(15.8

)

(2.7

)%

Land and Lots Revenue

(dollars in thousands)

Three Months Ended December 31,

Twelve Months Ended December 31,

2023

2022

Change

%

2023

2022

Change

%

Lots revenue

$

1,857

$

1,063

$

794

74.7

%

$

7,426

$

19,090

$

(11,664

)

(61.1

)%

Land revenue

—

—

—

0.0

%

1,029

34,752

(33,723

)

(97.0

)%

Land and lots revenue

$

1,857

$

1,063

$

794

74.7

%

$

8,455

$

53,842

$

(45,387

)

(84.3

)%

Lots closed

18

14

4

28.6

%

73

288

(215

)

(74.7

)%

Average sales price of lots closed

$

103.2

$

75.9

$

27.3

36.0

%

$

101.7

$

66.3

$

35.4

53.4

%

New Home Orders and Backlog

(dollars in thousands)

Three Months Ended December 31,

Twelve Months Ended December 31,

2023

2022

Change

%

2023

2022

Change

%

Net new home orders

679

423

256

60.5

%

3,356

1,973

1,383

70.1

%

Revenue from net new home orders

$

381,044

$

247,818

$

133,226

53.8

%

$

1,953,903

$

1,210,315

$

743,588

61.4

%

Average selling price of net new home orders

$

561.2

$

585.9

$

(24.7

)

(4.2

)%

$

582.2

$

613.4

$

(31.2

)

(5.1

)%

Cancellation rate

7.2

%

20.3

%

(13.1

)%

(64.5

)%

6.6

%

13.8

%

(7.2

)%

(52.2

)%

Absorption rate per average active selling community per quarter

7.6

5.5

2.1

38.2

%

9.9

6.5

3.4

52.3

%

Average active selling communities

89

77

12

15.6

%

85

76

9

11.8

%

Active selling communities at end of period

91

80

11

13.8

%

Backlog

$

555,200

$

369,095

$

186,105

50.4

%

Backlog units

770

537

233

43.4

%

Average sales price of backlog

$

721.0

$

687.3

$

33.7

4.9

%

GREEN BRICK PARTNERS, INC.

SUPPLEMENTAL INFORMATION

(Unaudited)

December 31, 2023

December 31, 2022

Central

Southeast

Total

Central

Southeast

Total

Lots owned

Finished lots

4,014

964

4,978

1,901

998

2,899

Lots in communities under development

9,122

1,335

10,457

10,309

1,698

12,007

Land held for future development(1)

8,366

—

8,366

6,575

—

6,575

Total lots owned

21,502

2,299

23,801

18,785

2,696

21,481

Lots controlled

Lots under option contracts

1,169

—

1,169

2,212

6

2,218

Land under option for future development

1,710

460

2,170

110

18

128

Lots under option through unconsolidated development joint ventures

1,210

331

1,541

1,289

411

1,700

Total lots controlled

4,089

791

4,880

3,611

435

4,046

Total lots owned and controlled (2)

25,591

3,090

28,681

22,396

3,131

25,527

Percentage of lots owned

84.0

%

74.4

%

83.0

%

83.9

%

86.1

%

84.2

%

_________________

(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 December 31, 2023 and December 31, 2022.

December 31, 2023

December 31, 2022

Total lots owned(1)

23,801

21,481

Add certain lots included in Total Lots Controlled

Land under option for future acquisition and development

2,170

128

Lots under option through unconsolidated development joint ventures

1,541

1,700

Total lots self-developed

27,512

23,309

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

95.9

%

91.3

%

_________________

(1) Total lots owned includes finished lot purchases, which were less than 3.2% 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 and twelve months ended December 31, 2023 and 2022 and reconciles these amounts to homebuilding gross margin, the most directly comparable GAAP measure.

(Unaudited, in thousands):

Three Months Ended December 31,

Twelve Months Ended December 31,

2023

2022

2023

2022

Residential units revenue

$

448,525

$

430,026

$

1,769,255

$

1,703,951

Less: Mechanic’s lien contracts revenue

(130

)

(1,444

)

(1,467

)

(7,040

)

Home closings revenue

$

448,395

$

428,582

$

1,767,788

$

1,696,911

Homebuilding gross margin

$

141,010

$

112,189

$

545,654

$

506,129

Homebuilding gross margin percentage

31.4

%

26.2

%

30.9

%

29.8

%

Homebuilding gross margin

141,010

112,189

545,654

506,129

Add back: Capitalized interest charged to cost of revenues

2,740

3,141

13,196

13,444

Add back: Land impairment charge

$

—

$

6,020

$

—

$

6,020

Adjusted homebuilding gross margin

$

143,750

$

121,350

$

558,850

$

525,593

Adjusted homebuilding gross margin percentage

32.1

%

28.3

%

31.6

%

31.0

%

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 December 31, 2023:

Gross

Cash and cash equivalents

Net

Total debt, net of debt issuance costs

$

346,860

$

(179,756

)

$

167,104

Total Green Brick Partners, Inc. stockholders’ equity

1,300,704

—

1,300,704

Total capitalization

$

1,647,564

$

(179,756

)

$

1,467,808

Debt to total capitalization ratio

21.1

%

—

%

—

%

Net debt to total capitalization ratio

—

%

—

%

11.4

%

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. 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 https://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. Forward-looking statements in this press release and in our earnings call include statements regarding (i) our position to succeed in the current environment, including our ability to maintain industry-leading performance and margins; (ii) our strategies to capitalize on market opportunities, including our advantages to do so and the impact to our results; (iii) our expectations regarding trends in our markets, such as demographic trends and demand for single-family homes; (iv) our beliefs regarding returns on capital and position amongst market peers; (v) the use of proceeds for investments and potential opportunities, including expectations for performance in markets we invest in; (vi) our priorities and strategies for growth, the drivers of that growth, and the impact on our future results, including in the Austin market expansion of our Trophy brand, and potential new, related business; (vii) our expectations for our expansion into the Houston market, including the opportunities and positioning of our Trophy brand for growth and ability to capitalize on such opportunities; (viii) our capital resources and flexibility to capitalize on market opportunities and the impact on our financial and operational performance; (ix) the advantages of our lot and land strategies and locations, including the benefits to our returns, margins and ability to scale; (x) our expectations for our investments in land, lots and development in 2024, and the impact on our growth; (xi) our beliefs regarding our infill and infill-adjacent locations, including competition and the impact to our results; (xii) our expectations for growth of our Trophy brand and the drivers of that growth; (xiii) our beliefs that we operate in the most advantageous markets in the U.S.; (xiv) our beliefs regarding our financial and operational strengths and the benefits to returns on equity; and (xv) our beliefs regarding our position and ability to scale, 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240229983950/en/

Contacts

Benting Hu
Vice President of Finance
469-573-6755
IR@greenbrickpartners.com

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