8-K
Green Brick Partners, Inc. (GRBK)
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM 8-K
___________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 4, 2021
| Green Brick Partners, Inc. |
|---|
_________________________________________________
(Exact name of registrant as specified in its charter)
| Delaware | 001-33530 | 20-5952523 | |||
|---|---|---|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification Number) | |||
| 2805 Dallas Pkwy | , | Ste 400 | |||
| Plano | , | TX | 75093 | (469) | 573-6755 |
| (Address of principal executive offices, including Zip Code) | (Registrant’s telephone number, including area code) |
(Former name or former address, if changed since last report) Not Applicable
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, par value $0.01 per share | GRBK | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 2.02 Results of Operations and Financial Condition.
On May 4, 2021, Green Brick Partners, Inc. issued a press release announcing its financial and operational results for the first quarter ended March 31, 2021. A copy of the press release is furnished as Exhibit 99 to this report.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description of Exhibit |
|---|---|
| 99 | Press Release dated May 4, 2021. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| GREEN BRICK PARTNERS, INC. | |
|---|---|
| By: | /s/ Richard A. Costello |
| Name: | Richard A. Costello |
| Title: | Chief Financial Officer |
Date: May 4, 2021
Document
Exhibit 99
GREEN BRICK PARTNERS, INC. REPORTS RECORD FIRST QUARTER 2021 RESULTS
QUARTERLY DILUTED EARNINGS PER SHARE OF $0.51 VS $0.31, UP 64.5%
BACKLOG OF $995.7 MILLION, UP 133.0%
NET NEW HOME ORDERS UP 71.2%
HOME BUILDING GROSS MARGIN UP 230 BPS
LOTS OWNED AND CONTROLLED UP 118.1%
PLANO, Texas, May 4, 2021 — Green Brick Partners, Inc. (Nasdaq: GRBK) (“we,” “Green Brick” or the “Company”) today reported record results for its first quarter ended March 31, 2021.
Jim Brickman, Chief Executive Officer, said, “We just reported the best first quarter in the history of the Company where net income attributable to Green Brick over the last twelve months through March 31, 2021 grew to $123.7 million, a 100% increase over the prior twelve-month period. Our first quarter net orders of 1,082 homes and ending backlog of $996 million both represent all-time records for the Company, up 28% and 45% over Q4 2020 record levels. To meet the unprecedented demand, Green Brick started a record 2,043 homes in the last six months and ended the quarter with 2,303 units under construction, a 62% increase from a year ago. We feel confident that our efforts will produce heightened earnings beginning next quarter and each successive quarter this year.”
Results for the Quarter Ended March 31, 2021:
For the three months ended March 31, 2021, our net new home orders and home starts reflect a record for any quarter since the Company’s inception. Homes under construction, backlog, and lots owned and controlled also represent a record as of the end of any quarter.
| (Dollars in thousands, except per share data) | Three Months Ended March 31, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | Increase | ||||||
| Net new home orders | 1,082 | 632 | 71.2 | % | ||||
| New homes delivered | 516 | 448 | 15.2 | % | ||||
| Total revenues | $ | 234,479 | $ | 213,267 | 9.9 | % | ||
| Total cost of revenues | 175,490 | 164,298 | 6.8 | % | ||||
| Total gross profit | $ | 58,989 | $ | 48,969 | 20.5 | % | ||
| Net income attributable to Green Brick Partners, Inc. | $ | 25,969 | $ | 15,917 | 63.2 | % | ||
| Diluted net income attributable to Green Brick Partners, Inc. per share | $ | 0.51 | $ | 0.31 | 64.5 | % | ||
| Residential units revenue | $ | 217,236 | $ | 191,187 | 13.6 | % | ||
| Homebuilding gross margin percentage | 25.4 | % | 23.1 | % | 230 bps | |||
| Backlog | $ | 995,743 | $ | 427,322 | 133.0 | % | ||
| Lots owned and controlled | 18,939 | 8,684 | 118.1 | % | ||||
| Homes under construction | 2,303 | 1,418 | 62.4 | % | ||||
| Average active selling communities | 96 | 94 | 2.1 | % | ||||
| Net income attributable to Green Brick Partners, Inc. as a percentage of the average total Green Brick Partners, Inc. stockholders’ equity | 15.9 | % | 11.9 | % | 400 bps |
“This rapid uptick in sales and starts has not been at the cost of our land pipeline,” said Rick Costello, Chief Financial Officer. “During the quarter, we acquired approximately 5,600 homesites, expanding our total lots owned and controlled by 118% over the
past twelve months and 31% in the past three months alone. This increase was achieved while starting a record number of homes and maintaining a debt to capital ratio of 26.4%, one of the lowest among the public homebuilders. Our record starts of 1,039 homes this quarter were despite the severe Texas snowstorm that impacted construction schedules, leading to the deferral of approximately 40 home closings into the second quarter. We believe Green Brick’s capacity to source highly profitable land without straining our balance sheet will continue to propel our operating and financial results beyond the bar set this quarter.”
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 since the second half of 2020 has, in turn, led to increased demand for the raw materials, products and appliances for new homes. Due to the increased demand for certain materials, we have recently and may continue to experience price increases, shortages and significant extensions to our lead time for the delivery of materials such as lumber, appliances and windows. As construction follows orders, we expect closings to grow substantially beginning in the second quarter of 2021.
Earnings Conference Call:
We will host our earnings conference call to discuss our first quarter ended March 31, 2021 at 12:00 p.m. Eastern Time on Wednesday, May 5, 2021. 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 3887441. A replay of the call will be available from approximately 2:45 p.m. Eastern Time on May 5, 2021 through 11:59 p.m. Eastern Time on May 19, 2021. 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 3887441.
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 March 31, | ||||
|---|---|---|---|---|
| 2021 | 2020 | |||
| Residential units revenue | $ | 217,236 | $ | 191,187 |
| Land and lots revenue | 17,243 | 22,080 | ||
| Total revenues | 234,479 | 213,267 | ||
| Cost of residential units | 162,072 | 147,187 | ||
| Cost of land and lots | 13,418 | 17,111 | ||
| Total cost of revenues | 175,490 | 164,298 | ||
| Total gross profit | 58,989 | 48,969 | ||
| Selling, general and administrative expenses | (29,488) | (26,869) | ||
| Equity in income of unconsolidated entities | 3,891 | 2,565 | ||
| Other income (loss), net | 1,870 | (1,909) | ||
| Income before income taxes | 35,262 | 22,756 | ||
| Income tax expense | 7,501 | 6,040 | ||
| Net income | 27,761 | 16,716 | ||
| Less: Net income attributable to noncontrolling interests | 1,792 | 799 | ||
| Net income attributable to Green Brick Partners, Inc. | $ | 25,969 | $ | 15,917 |
| Net income attributable to Green Brick Partners, Inc. per common share: | ||||
| Basic | $ | 0.51 | $ | 0.32 |
| Diluted | $ | 0.51 | $ | 0.31 |
| Weighted average common shares used in the calculation of net income attributable to Green Brick Partners, Inc. per common share: | ||||
| Basic | 50,633 | 50,454 | ||
| Diluted | 50,993 | 50,646 |
GREEN BRICK PARTNERS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
| March 31, 2021 | December 31, 2020 | |||
|---|---|---|---|---|
| ASSETS | ||||
| Cash and cash equivalents | $ | 28,688 | $ | 19,479 |
| Restricted cash | 14,750 | 14,156 | ||
| Receivables | 7,561 | 5,224 | ||
| Inventory | 920,890 | 844,635 | ||
| Investments in unconsolidated entities | 48,457 | 46,443 | ||
| Right-of-use assets - operating leases | 2,257 | 2,538 | ||
| Property and equipment, net | 3,506 | 3,595 | ||
| Earnest money deposits | 23,208 | 22,242 | ||
| Deferred income tax assets, net | 15,376 | 15,376 | ||
| Intangible assets, net | 601 | 622 | ||
| Goodwill | 680 | 680 | ||
| Other assets | 13,942 | 13,857 | ||
| Total assets | $ | 1,079,916 | $ | 988,847 |
| LIABILITIES AND EQUITY | ||||
| Liabilities: | ||||
| Accounts payable | $ | 39,000 | $ | 24,521 |
| Accrued expenses | 50,235 | 40,416 | ||
| Customer and builder deposits | 56,073 | 38,131 | ||
| Lease liabilities - operating leases | 2,289 | 2,591 | ||
| Borrowings on lines of credit, net | 3,809 | 106,687 | ||
| Senior unsecured notes, net | 235,561 | 111,056 | ||
| Notes payable | 119 | 2,125 | ||
| Contingent consideration | 368 | 368 | ||
| Total liabilities | 387,454 | 325,895 | ||
| Commitments and contingencies | ||||
| Redeemable noncontrolling interest in equity of consolidated subsidiary | 15,701 | 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; 51,124,215 and 51,053,858 issued and 50,732,276 and 50,661,919 outstanding as of March 31, 2021 and December 31, 2020, respectively | 511 | 511 | ||
| Treasury stock, at cost, 391,939 shares | (3,167) | (3,167) | ||
| Additional paid-in capital | 293,162 | 293,242 | ||
| Retained earnings | 375,625 | 349,656 | ||
| Total Green Brick Partners, Inc. stockholders’ equity | 666,131 | 640,242 | ||
| Noncontrolling interests | 10,630 | 9,167 | ||
| Total equity | 676,761 | 649,409 | ||
| Total liabilities and equity | $ | 1,079,916 | $ | 988,847 |
GREEN BRICK PARTNERS, INC.
SUPPLEMENTAL INFORMATION
(Unaudited)
| Residential Units Revenue and New Homes Delivered<br>(dollars in thousands) | Three Months Ended March 31, | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | Change | % | ||||||||||||
| Home closings revenue | $ | 216,134 | $ | 189,248 | $ | 26,886 | 14.2 | % | |||||||
| Mechanic’s lien contracts revenue | 1,102 | 1,939 | (837) | (43.2) | % | ||||||||||
| Residential units revenue | $ | 217,236 | $ | 191,187 | $ | 26,049 | 13.6 | % | |||||||
| New homes delivered | 516 | 448 | 68 | 15.2 | % | ||||||||||
| Average sales price of homes delivered | $ | 418.9 | $ | 422.4 | $ | (3.5) | (0.8) | % | |||||||
| Land and Lots Revenue<br>(dollars in thousands) | Three Months Ended March 31, | ||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||
| 2021 | 2020 | Change | % | ||||||||||||
| Lots revenue | $ | 8,443 | $ | 22,080 | $ | (13,637) | (61.8) | % | |||||||
| Land revenue | 8,800 | — | 8,800 | 100.0% | |||||||||||
| Land and lots revenue | $ | 17,243 | $ | 22,080 | $ | (4,837) | (21.9) | % | |||||||
| Lots closed | 79 | 138 | (59) | (42.8) | % | ||||||||||
| Average sales price of lots closed | $ | 106.9 | $ | 160.0 | $ | (53.1) | (33.2) | % | |||||||
| New Home Orders and Backlog<br>(dollars in thousands) | Three Months Ended March 31, | ||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 2021 | 2020 | Change | % | ||||||||||||
| Net new home orders | 1,082 | 632 | 450 | 71.2 | % | ||||||||||
| Cancellation rate | 6.0 | % | 16.5 | % | (10.5) | % | (63.6) | % | |||||||
| Absorption rate per average active selling community per quarter | 11.3 | 6.7 | 4.6 | 68.7 | % | ||||||||||
| Average active selling communities | 96 | 94 | 2 | 2.1 | % | ||||||||||
| Active selling communities at end of period | 90 | 93 | (3) | (3.2) | % | ||||||||||
| Backlog | $ | 995,743 | $ | 427,322 | $ | 568,421 | 133.0 | % | |||||||
| Backlog (units) | 2,029 | 970 | 1,059 | 109.2 | % | ||||||||||
| Average sales price of backlog | $ | 490.8 | $ | 440.5 | $ | 50.3 | 11.4 | % | |||||||
| March 31, 2021 | December 31, 2020 | ||||||||||||||
| --- | --- | --- | --- | --- | |||||||||||
| Lots owned | |||||||||||||||
| Central | 6,682 | 6,823 | |||||||||||||
| Southeast | 1,883 | 2,097 | |||||||||||||
| Total lots owned | 8,565 | 8,920 | |||||||||||||
| Lots controlled | |||||||||||||||
| Central | 9,045 | 4,398 | |||||||||||||
| Southeast | 1,329 | 1,150 | |||||||||||||
| Total lots controlled | 10,374 | 5,548 | |||||||||||||
| Total lots owned and controlled (1) | 18,939 | 14,468 | |||||||||||||
| Percentage of lots owned | 45.2 | % | 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 March 31, 2021 and December 31, 2020.
| March 31, 2021 | December 31, 2020 | |||
|---|---|---|---|---|
| Total lots owned | 8,565 | 8,920 | ||
| Add certain lots included in Total Lots Controlled | ||||
| Land under option for future acquisition and development | 5,838 | 740 | ||
| Lots under option through unconsolidated development joint ventures | 1,838 | 1,838 | ||
| Total lots self-developed | 16,241 | 11,498 | ||
| Self-developed lots as a percentage of total lots owned and controlled | 85.8 | % | 79.5 | % |
Reconciliation of Non-GAAP Financial Measures
The following table represents the non-GAAP measure of adjusted homebuilding gross margin for three months ended March 31, 2021 and 2020 and reconciles these amounts to homebuilding gross margin, the most directly comparable GAAP measure.
| (Unaudited, in thousands): | Three Months Ended March 31, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | |||||||
| Residential units revenue | $ | 217,236 | $ | 191,187 | ||||
| Less: Mechanic’s lien contracts revenue | (1,102) | (1,939) | ||||||
| Home closings revenue | $ | 216,134 | $ | 189,248 | ||||
| Homebuilding gross margin | $ | 54,904 | $ | 43,657 | ||||
| Homebuilding gross margin percentage | 25.4 | % | 23.1 | % | ||||
| Homebuilding gross margin | 54,904 | 43,657 | ||||||
| Add back: Capitalized interest charged to cost of revenues | 1,813 | 2,181 | ||||||
| Adjusted homebuilding gross margin | $ | 56,717 | $ | 45,838 | ||||
| Adjusted homebuilding gross margin percentage | 26.2 | % | 24.2 | % |
The following table presents the pre-tax income for the three months ended March 31, 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 March 31, | |||||
|---|---|---|---|---|---|---|
| 2021 | 2020 | |||||
| Net income attributable to Green Brick Partners, Inc. | $ | 25,969 | $ | 15,917 | ||
| Income tax expense attributable to Green Brick Partners, Inc. | 7,500 | 6,038 | ||||
| Pre-tax income attributable to Green Brick Partners, Inc. | $ | 33,469 | $ | 21,955 |
The following table presents the non-GAAP measure of net income attributable to Green Brick Partners, Inc. for the three months ended March 31, 2021 and 2020, divided by the average total Green Brick Partners, Inc. stockholder’s equity to calculate our return on average equity. We believe this non-GAAP financial measure is relevant in measuring our profitability in relation to stockholder’s equity and should only be used to supplement Green Brick’s GAAP results.
| Three Months Ended March 31, | ||||||
|---|---|---|---|---|---|---|
| (Unaudited, in thousands): | 2021 | 2020 | ||||
| Net income attributable to Green Brick Partners, Inc. | $ | 25,969 | $ | 15,917 | ||
| Beginning total Green Brick Partners, Inc. stockholders’ equity | 640,242 | 523,168 | ||||
| Ending total Green Brick Partners, Inc. stockholders’ equity | 666,131 | $ | 542,982 | |||
| Average total Green Brick Partners, Inc. stockholders’ equity | $ | 653,187 | $ | 533,075 | ||
| Net income attributable to Green Brick Partners, Inc. as a percentage of the average total Green Brick Partners, Inc. stockholders’ equity | 15.9 | % | 11.9 | % |
About Green Brick Partners, Inc.
Green Brick Partners, Inc. (Nasdaq: GRBK) is a diversified homebuilding and land development company. Green Brick owns five 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 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, Providence Group Title, and Green Brick Mortgage. Green Brick is engaged in all aspects of the homebuilding process, including land acquisition and development, entitlements, design, construction, marketing, and sales for our residential neighborhoods and master planned communities. For more information about Green Brick Partners Inc.’s homebuilding partners, please visit https://greenbrickpartners.com/team-builders/.
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 strategy for growth, the drivers and timing of that growth, and the impact on our results over the remainder of 2021, (ii) our pace and ability to grow our operations to scale, our ability to capitalize on market opportunities and the impact on our results, (iii) our land and lot acquisition strategy and its ability to grow our operational and financial results, and (iv) our growth in closings, and the timing and significance of that growth. 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 and Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission.
Contact: Richard A. Costello
Chief Financial Officer
(469) 573-6755
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