Document
false0001373670 0001373670 2020-03-03 2020-03-03


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): March 3, 2020

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 March 3, 2020, Green Brick Partners, Inc. issued a press release announcing its financial and operational results for the fourth quarter and year ended December 31, 2019. A copy of the press release is furnished as Exhibit 99 to this report and is incorporated herein.

Item 9.01 Financial Statements and Exhibits.

(d)     Exhibits
Exhibit No.
Description of Exhibit
 
99
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:    March 3, 2020



Exhibit 99
greenbrickpartnerslogocopy.jpg
GREEN BRICK PARTNERS, INC. REPORTS RECORD FOURTH QUARTER RESULTS

RECORD BASIC EPS OF $0.32 PER SHARE, UP 23.1%
RECORD 111.5% INCREASE IN NEW HOME ORDERS
RECORD RESIDENTIAL UNITS REVENUE AND GROSS PROFIT
RECORD BACKLOG $346.8 MILLION
25.0% ENDING COMMUNITY GROWTH YEAR OVER YEAR

PLANO, Texas, March 3, 2020 — Green Brick Partners, Inc. (Nasdaq: GRBK) (“we,” “Green Brick” or the “Company”) today reported results for its fourth quarter and year ended December 31, 2019.

Results for the Fourth Quarter Ended December 31, 2019:
•
For the quarter ended December 31, 2019, basic net income attributable to Green Brick per common share (“EPS”), total revenue, residential units revenue, gross profit, and homes under construction all reflect a record for any quarter, as detailed below.

•
EPS for the three months ended December 31, 2019 was $0.32, a 23.1% increase compared to the quarterly earnings of $0.26 for the three months ended December 31, 2018.

•
For the three months ended December 31, 2019, total revenue was $230.1 million, an increase of 24.3% compared to $185.1 million for the three months ended December 31, 2018; gross profit was $48.7 million, an increase of 11.1% compared to $43.8 million for the three months ended December 31, 2018; and net income attributable to Green Brick was $15.9 million, an increase of 19.2% compared to $13.4 million for the three months ended December 31, 2018.

•
Residential units revenue for the three months ended December 31, 2019 was $223.3 million, an increase of 29.8% compared to $172.0 million for the three months ended December 31, 2018. Land and lots revenue for the three months ended December 31, 2019 was $6.9 million, a decrease of 47.8% compared to $13.1 million for the three months ended December 31, 2018.

•
The dollar value of backlog units as of December 31, 2019 was $346.8 million, an increase of 31.2% compared to $264.3 million as of December 31, 2018.

•
Average active selling communities increased from 76 communities for the quarter ended December 31, 2018 to 90 communities for the quarter ended December 31, 2019, an increase of 18.4%.

•
Homes under construction increased to 1,297 as of December 31, 2019, a 15.1% increase compared to 1,127 as of December 31, 2018.

Results for the Twelve Months Ended December 31, 2019:
•
EPS for the twelve months ended December 31, 2019 was $1.16, an increase of 13.7% compared to $1.02 for the twelve months ended December 31, 2018.

•
For the twelve months ended December 31, 2019, total revenue was $791.7 million, an increase of 26.9% compared to $623.6 million for the twelve months ended December 31, 2018; gross profit was $169.1 million, an increase of 9.6%, compared to $154.2 million for the twelve months ended December 31, 2018; and net income attributable to Green Brick was $58.7 million, an increase of 13.6% compared to $51.6 million for the twelve months ended December 31, 2018.

•
Residential units revenue for the twelve months ended December 31, 2019 was $759.8 million, a record for any twelve-month period and an increase of 31.3% compared to $578.9 million for the twelve months ended December 31, 2018. Land and lots revenue for the twelve months ended December 31, 2019 was $31.8 million, a decrease of 28.9% compared to $44.8 million for the twelve months ended December 31, 2018.


1

“Our future continues to be bright as we ended 2019 with yet another record-breaking quarter. We are exceedingly proud to report record highs in total revenues, gross profit, EPS, and the number of net new home orders in our history. We surpassed our goal of active selling communities as of year end as ending selling communities grew by 27% over just the past two quarters. Combined with our Q4 absorption rate increase of 78% year over year, we sold more homes than ever with net new home orders more than doubling with a year over year increase of 111%,” said Jim Brickman, CEO of Green Brick Partners, Inc.

“Entering 2020 with such a strong foundation of excellence has placed us in a position primed for continued success, including the largest backlog to date. We continue to approach Green Brick’s future with enthusiasm and optimism but also conservative financial leverage. We look forward to improving upon the record-setting results we saw this past quarter and 2019.”

Earnings Conference Call:
We will host our earnings conference call to discuss our fourth quarter ended December 31, 2019 at 12:00 p.m. Eastern Time on Wednesday, March 4, 2020. 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 2798239. A replay of the call will be available from approximately 3:30 p.m. Eastern Time on March 4, 2020 through 11:59 p.m. Eastern Time on March 11, 2020. 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 2798239.

Reconciliation of 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 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.

In addition, this press release contains our debt to total capitalization ratio which is calculated as the sum of borrowings on lines of credit and the senior unsecured notes, net of debt issuance costs, divided by the total Green Brick Partners, Inc. stockholders’ equity.

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 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 22.7% and 22.4% for the three and twelve months ended December 31, 2019, respectively. Sales commission expenses represented 4.5% and 4.2% of the residential units revenue for the three and twelve months ended December 31, 2019, respectively.

2

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


 
Three Months Ended December 31,
 
Years Ended December 31,

 
2019
 
2018
 
2019
 
2018
Residential units revenue
 
$
223,270

 
$
171,990

 
$
759,830

 
$
578,893

Land and lots revenue
 
6,852

 
13,130

 
31,830

 
44,754

Total revenues
 
230,122

 
185,120

 
791,660

 
623,647

Cost of residential units
 
176,221

 
130,380

 
597,884

 
433,279

Cost of land and lots
 
5,191

 
10,911

 
24,694

 
36,166

Total cost of revenues
 
181,412

 
141,291

 
622,578

 
469,445

Total gross profit
 
48,710

 
43,829

 
169,082

 
154,202

Selling, general and administrative expense
 
27,555

 
22,912

 
98,659

 
80,702

Change in fair value of contingent consideration
 
3,157

 
1,693

 
4,906

 
1,693

Equity in income of unconsolidated entities
 
2,244

 
725

 
9,809

 
7,259

Other income, net
 
2,340

 
774

 
9,003

 
2,605

Income before income taxes
 
22,582

 
20,723

 
84,329

 
81,671

Income tax expense
 
5,034

 
3,795

 
20,027

 
17,136

Net income
 
17,548

 
16,928

 
64,302

 
64,535

Less: Net income attributable to noncontrolling interests
 
1,628

 
3,574

 
5,646

 
12,912

Net income attributable to Green Brick Partners, Inc.
 
$
15,920

 
$
13,354

 
$
58,656

 
$
51,623


 


 


 


 


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


 


 


 


Basic
 
$
0.32

 
$
0.26

 
$
1.16

 
$
1.02

Diluted
 
$
0.31

 
$
0.26

 
$
1.16

 
$
1.02

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


 


 


 


Basic
 
50,429

 
50,678

 
50,530

 
50,652

Diluted
 
50,619

 
50,723

 
50,636

 
50,751



3

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


December 31, 2019

December 31, 2018
ASSETS
Cash
$
33,269

 
$
38,315

Restricted cash
4,416

 
3,440

Receivables
4,720

 
4,842

Inventory
753,567

 
668,961

Investments in unconsolidated entities
30,294

 
20,269

Right-of-use assets - operating leases
3,462

 
—

Property and equipment, net
4,309

 
4,690

Earnest money deposits
14,686

 
16,793

Deferred income tax assets, net
15,262

 
16,499

Intangible assets, net
707

 
856

Goodwill
680

 
680

Other assets
10,167

 
8,681

Total assets
$
875,539

 
$
784,026

LIABILITIES AND EQUITY
Liabilities:


 


Accounts payable
$
30,044

 
$
26,091

Accrued expenses
24,656

 
29,201

Customer and builder deposits
23,954

 
31,978

Lease liabilities - operating leases
3,564

 
—

Borrowings on lines of credit, net
164,642

 
200,386

Senior unsecured notes, net
73,406

 
—

Contingent consideration
5,267

 
2,207

Total liabilities
325,533

 
289,863

Commitments and contingencies


 


Redeemable noncontrolling interest in equity of consolidated subsidiary
13,611

 
8,531

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; 50,879,949 and 50,719,884 issued and 50,488,010 and 50,583,128 outstanding as of December 31, 2019 and December 31, 2018, respectively
509

 
507

Treasury stock, at cost, 391,939 and 136,756 shares as of December 31, 2019 and December 31, 2018, respectively
(3,167
)
 
(981
)
Additional paid-in capital
290,799

 
291,299

Retained earnings
235,027

 
177,526

Total Green Brick Partners, Inc. stockholders’ equity
523,168

 
468,351

Noncontrolling interests
13,227

 
17,281

Total equity
536,395

 
485,632

Total liabilities and equity
$
875,539

 
$
784,026



4

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,
 

 
 
 
2019
 
2018
 
Change
 
%
 
2019
 
2018
 
Change
 
%
Home closings revenue
 
$
223,270

 
$
169,534

 
$
53,736

 
31.7
 %
 
$
752,273

 
$
571,177

 
$
181,096

 
31.7
 %
Mechanic’s lien contracts revenue
 
—

 
2,456

 
(2,456
)
 
(100.0
)%
 
7,557

 
7,716

 
(159
)
 
(2.1
)%
Residential units revenue
 
$
223,270

 
$
171,990

 
$
51,280

 
29.8
 %
 
$
759,830

 
$
578,893

 
$
180,937

 
31.3
 %
New homes delivered
 
514

 
382

 
132

 
34.6
 %
 
1,719

 
1,287

 
432

 
33.6
 %
Average sales price of homes delivered
 
$
434.4

 
$
443.8

 
$
(9.4
)
 
(2.1
)%
 
$
437.6

 
$
443.8

 
$
(6.2
)
 
(1.4
)%
Land and Lots Revenue
(dollars in thousands)
 
Three Months Ended December 31,
 

 
Twelve Months Ended December 31,
 

 
 
 
2019
 
2018
 
Change
 
%
 
2019
 
2018
 
Change
 
%
Lots revenue
 
$
6,852

 
$
10,780

 
$
(3,928
)
 
(36.4
)%
 
$
31,820

 
$
35,074

 
$
(3,254
)
 
(9.3
)%
Land revenue
 
—

 
2,350

 
(2,350
)
 
(100.0
)%
 
10

 
9,680

 
(9,670
)
 
(99.9
)%
Land and lots revenue
 
$
6,852

 
$
13,130

 
$
(6,278
)
 
(47.8
)%
 
$
31,830

 
$
44,754

 
$
(12,924
)
 
(28.9
)%
Lots closed
 
45

 
76

 
(31
)
 
(40.8
)%
 
211

 
239

 
(28
)
 
(11.7
)%
Average sales price of lots closed
 
$
152.3

 
$
141.8

 
$
10.5

 
7.4
 %
 
$
150.8

 
$
146.8

 
$
4.0

 
2.7
 %
New Home Orders and Backlog
(dollars in thousands)
 
Three Months Ended December 31,
 

 
Twelve Months Ended December 31,
 

 
 
 
2019
 
2018
 
Change
 
%
 
2019
 
2018
 
Change
 
%
Net new home orders
 
590

 
279

 
311

 
111.5
 %
 
1,923

 
1,397

 
526

 
37.7
 %
Cancellation rate
 
10.6
%
 
22.1
%
 
(11.5
)%
 
(52.0
)%
 
12.9
%
 
14.9
%
 
(2.0
)%
 
(13.4
)%
Absorption rate per average active selling community per quarter
 
6.6

 
3.7

 
2.9

 
78.4
 %
 
5.6

 
5.3

 
0.3

 
5.7
 %
Average active selling communities
 
90

 
76

 
14

 
18.4
 %
 
86

 
66

 
20

 
30.3
 %
Active selling communities at end of period
 
95

 
76

 
19

 
25.0
 %
 
 
 
 
 
 
 
 
Backlog
 
$
346,828

 
$
264,275

 
$
82,553

 
31.2
 %
 
 
 
 
 
 
 
 
Backlog (units)
 
786

 
582

 
204

 
35.1
 %
 
 
 
 
 
 
 
 
Average sales price of backlog
 
$
441.3

 
$
454.1

 
$
(12.8
)
 
(2.8
)%
 
 
 
 
 
 
 
 
  
 
December 31, 2019
 
December 31, 2018
Lots owned
 
  

 
  

Central
 
4,223

 
4,447

Southeast
 
2,196

 
1,788

Total lots owned
 
6,419

 
6,235

Lots controlled
 
  

 
  

Central
 
1,410

 
853

Southeast
 
1,147

 
990

Total lots controlled
 
2,557

 
1,843

Total lots owned and controlled (1)
 
8,976

 
8,078

Percentage of lots owned
 
71.5
%
 
77.2
%
 
(1)
Total lots excludes lots with homes under construction.

5

Reconciliation of Non-GAAP Financial Measures

The following table represents the non-GAAP measure of adjusted pre-tax income for the three and twelve months ended December 31, 2019 and 2018, which represents net income attributable to Green Brick for the period, excluding the provision for income taxes attributable to Green Brick and one-time transaction expenses related to a public secondary offering of the Company’s shares in 2018.

(Unaudited, in thousands):
 
Three Months Ended December 31,
 
Twelve Months Ended December 31,
 
2019
 
2018
 
2019
 
2018
Net income attributable to Green Brick Partners, Inc.
 
$
15,920

 
$
13,354

 
$
58,656

 
$
51,623

Income tax expense attributable to Green Brick Partners, Inc.
 
4,959

 
3,754

 
19,712

 
16,984

Transaction expenses
 
—

 
—

 
—

 
827

Adjusted pre-tax income attributable to Green Brick Partners, Inc.
 
$
20,879

 
$
17,108

 
$
78,368

 
$
69,434


The following table represents the non-GAAP measure of adjusted homebuilding gross margin for the three and twelve months ended December 31, 2019 and 2018 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,
 
2019
 
2018
 
2019
 
2018
Residential units revenue
 
$
223,270

 
$
171,990

 
$
759,830

 
$
578,893

Less: Mechanic’s lien contracts revenue
 
—

 
(2,456
)
 
(7,557
)
 
(7,716
)
Home closings revenue
 
$
223,270

 
$
169,534

 
$
752,273

 
$
571,177

Homebuilding gross margin
 
$
48,249

 
$
40,945

 
$
160,952

 
$
144,013

Add back: Capitalized interest charged to cost of revenues
 
2,333

 
1,405

 
7,886

 
3,987

Adjusted homebuilding gross margin
 
$
50,582

 
$
42,350

 
$
168,838

 
$
148,000

Adjusted homebuilding gross margin percentage
 
22.7
%
 
25.0
%
 
22.4
%
 
25.9
%

About Green Brick Partners, Inc.:
Green Brick Partners, Inc. (Nasdaq: GRBK) is a diversified homebuilding and land development company. Green Brick owns a controlling interest in five homebuilders in Dallas, Texas (CB JENI Homes, Normandy Homes, Southgate Homes, Centre Living Homes, and Trophy Signature Homes), as well as 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. 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’s homebuilding partners and financial services platforms, please visit https://greenbrickpartners.com/team-builders/.


6

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,” “forecast,” “intend,” “objective,” “plan,” “predict,” “projection,” “seek,” “strategy,” “target,” “will” or other words of similar meaning. Forward-looking statements in this press release and the earnings call include statements regarding the Company’s (i) strategy for growth, the drivers of that growth, and the impact on the Company’s results, and (ii) expectations regarding community count growth and the timing of that growth. These forward-looking statements involve estimates and assumptions which may be affected by risks and uncertainties in the Company’s 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) adverse impacts from general economic conditions, seasonality, cyclicality and competition in the homebuilding industry; (2) a failure to recruit, retain or develop highly skilled and competent employees; (3) unsuccessful integration or management of acquisitions; (4) shortages of labor or raw materials; (5) an inability to acquire land for reasonable prices; (6) an inability to develop or sell communities; (7) government regulation risks; (8) a lack of availability or volatility of mortgage financing; (9) a severe weather event or natural disasters; (10) difficulty in obtaining sufficient capital; (11) poor relations with community residents; and (12) an increase in our debt levels or related service obligations. For a more detailed discussion of these and other risks and uncertainties applicable to the Company please see the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission.

Contact: Richard A. Costello
Chief Financial Officer
(469) 573-6755

7