Green Brick Partners, Inc. Reports Second Quarter 2015 Results

Second Quarter Basic Adjusted EPS of $0.19;

Second Quarter Pre-Tax Income of $5.9 million;

Second Quarter Revenue of $72.0 million

Aug 12, 2015, 16:44 ET from Green Brick Partners, Inc.

PLANO, Texas, Aug. 12, 2015 /PRNewswire/ -- Green Brick Partners, Inc. (NASDAQ: GRBK) ("we," "Green Brick" or the "Company"), today reported results for its second quarter and six months ended June 30, 2015.

Results for the Second Quarter Ended June 30, 2015:

  • Basic adjusted net income attributable to Green Brick per common share ("Adjusted EPS") for the three months ended June 30, 2015 was $0.19. See "Reconciliation of Non-GAAP Financial Measures."
  • The dollar value of backlog units as of June 30, 2015 was $102.4 million, an increase of 29.8% compared to June 30, 2014. The average sales price of homes in backlog increased $82,467, or 25.1%, to $411,249 for the three months ended June 30, 2015, compared to $328,782 for the three months ended June 30, 2014. Homes under construction increased 39.9% to 522 as of June 30, 2015, compared to 373 as of June 30, 2014.
  • For the three months ended June 30, 2015, the Company had revenue of $72.0 million, gross profit of $17.3 million, and pre-tax income of $5.9 million.
  • Builder operations revenue for the three months ended June 30, 2015 was $60.4 million compared to $55.0 million for the three months ended June 30, 2014. Land development revenue for the three months ended June 30, 2015 was $11.6 million compared to $10.8 million for the three months ended June 30, 2014.

Results for the Six Months Ended June 30, 2015:

  • Basic adjusted net income attributable to Green Brick per common share ("Adjusted EPS") for the six months ended June 30, 2015 was $0.39. See "Reconciliation of Non-GAAP Financial Measures."
  • The Company increased homebuilding starts by 40.2% to 366 units during the six months ended June 30, 2015, from 261 units for the six months ended June 30, 2014.
  • For the six months ended June 30, 2015, the Company had revenue of $130.4 million, gross profit of $33.6 million, and pre-tax income of $12.1 million.
  • Builder operations revenue for the six months ended June 30, 2015 was $110.0 million compared to $104.7 million for the six months ended June 30, 2014. Land development revenue for the six months ended June 30, 2015 was $20.4 million compared to $24.2 million for the six months ended June 30, 2014. The decrease in land development revenue is due primarily to an increase in lot sales to our builders where revenue is not recognized until the house closing.

"I am pleased with our second quarter results and excited to announce that in July we raised $169.8 million in net proceeds in an oversubscribed underwritten public offering. We now have one of the most unleveraged balances sheets of any public builder, and the capital and lot positions to execute our plans for significant growth. We continue to expect pre-tax income attributable to Green Brick in the range of $29 to $32 million for all of 2015," stated James R. Brickman, Green Brick's Chief Executive Officer.

Explanatory Note Regarding Historical Results:

Results for periods prior to the completion of the Company's acquisition of JBGL Builder Finance LLC and its consolidated subsidiaries and affiliated companies (collectively, "Builder Finance"), and JBGL Capital Companies ("Capital"), a combined group of commonly managed limited liability companies and partnerships (collectively with Builder Finance, "JBGL") on October 27, 2014 (the "Transaction") are JBGL's historical results, as the Transaction is reflected as a "reverse recapitalization."

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.

Due to the tax effects of the Transaction on October 27, 2014, net income attributable to Green Brick per share for the three and six months ended June 30, 2015 is not comparable to net income attributable to Green Brick per share for the three and six months ended June 30, 2014. Furthermore, the weighted average shares outstanding for the three and six months ended June 30, 2014 (which does not reflect the effects of the rights offering conducted as part of the Transaction) is not indicative of the Company's future weighted average shares outstanding.

The following table calculates the non-GAAP measure of Adjusted EPS for the three and six months ended June 30, 2015 and June 30, 2014 and reconciles these amounts to net income attributable to Green Brick, as reported and prepared in accordance with GAAP. Adjusted EPS for the three and six months ended June 30, 2014 means pre-tax income for the period presented divided by the weighted average number of common shares outstanding for the three and six months ended June 30, 2015. Pre-tax income represents net income attributable to Green Brick for the period excluding provision for income taxes attributable to Green Brick due to the change in tax status of the JBGL entities, from pass through entities to taxable entities, during the three months ended December 31, 2014.

(In thousands, except per share amounts):

Three Months Ended  June 30,

Six Months Ended  June 30,

2015

2014

2015

2014

Basic Adjusted EPS

Net income attributable to Green Brick —basic

$

3,788

$

7,410

$

7,806

$

14,759

Income tax provision attributable to Green Brick

$

2,127

$

(25)

$

4,310

$

301

Pre-tax income

$

5,915

$

7,385

$

12,116

$

15,060

Adjusted weighted-average number of shares outstanding —basic

31,346

31,346

31,346

31,346

Basic Adjusted EPS

$0.19

$0.24

$0.39

$0.48

Diluted Adjusted EPS

Net income attributable to Green Brick —diluted

$

3,788

$

7,410

$

7,806

$

14,759

Income tax provision attributable to Green Brick

$

2,127

$

(25)

$

4,310

$

301

Pre-tax income

$

5,915

$

7,385

$

12,116

$

15,060

Adjusted weighted-average number of shares outstanding —diluted

31,353

31,353

31,350

31,350

Diluted Adjusted EPS

$0.19

$0.24

$0.39

$0.48

 

The following table calculates the non-GAAP measure of Adjusted Homebuilding Gross Margin for the three and six months ended June 30, 2015 and June 30, 2014 and reconciles these amounts to homebuilding gross margin, as reported and prepared in accordance with GAAP.

(In thousands):

Three Months Ended  June 30,

Six Months Ended  June 30,

2015

2014

2015

2014

Homebuilding gross margin

$

14,261

$

13,829

$

28,108

$

26,074

Add back: capitalized interest charged to cost of sales

$

912

$

$

926

$

105

Adjusted Homebuilding Gross Margin

$

15,173

$

13,829

$

29,034

$

26,179

 

Earnings Conference Call:

We will host our earnings conference call to discuss our second quarter and six months ended June 30, 2015 at 12:00 p.m. Eastern Time on Thursday, August 13, 2015. 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 4500046 A replay of the call will be available from approximately 3:00 p.m. Eastern Time on August 13, 2015 through 11:59 p.m. Eastern Time on August 20, 2015. 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 4500046.

GREEN BRICK PARTNERS, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2015

2014

2015

2014

Sale of residential units

$

60,369

$

55,049

$

110,030

$

104,685

Sale of land and lots

11,618

10,794

20,409

24,167

Total revenues

71,987

65,843

130,439

128,852

Cost of residential units

46,108

41,220

81,922

78,611

Cost of land and lots

8,600

8,141

14,878

17,909

Total cost of sales

54,708

49,361

96,800

96,520

Total gross profit

17,279

16,482

33,639

32,332

Salary expense

(4,647)

(2,823)

(9,509)

(5,978)

Management fees expense – related party

(390)

(770)

Selling, general and administrative expense

(3,376)

(2,491)

(6,315)

(4,772)

Operating profit

9,256

10,778

17,815

20,812

Interest expense

(509)

(281)

(708)

Depreciation and amortization expense

(361)

(138)

(588)

(246)

Interest and fees income

102

252

Interest on direct financing leases income

203

13

428

Other income, net

275

429

606

480

Income before provision for income taxes

9,170

10,865

17,565

21,018

Income tax provision

2,166

4,373

338

Net income

7,004

10,865

13,192

20,680

Less: net income attributable to noncontrolling interests

3,216

3,455

5,386

5,921

Net income attributable to Green Brick Partners, Inc.

$

3,788

$

7,410

$

7,806

$

14,759

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

Basic

$0.12

$0.67

$0.25

$1.33

Diluted

$0.12

$0.67

$0.25

$1.33

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

Basic

31,346

11,109

31,346

11,109

Diluted

31,353

11,109

31,350

11,109

 

GREEN BRICK PARTNERS, INC.

SUPPLEMENTAL INFORMATION

Three Months Ended  June 30,

Increase (Decrease)

Six Months Ended  June 30,

Increase (Decrease)

New Homes Delivered and Home Sales Revenue

2015

2014

Change

%

2015

2014

Change

%

New homes delivered

162

154

8

5.2%

307

292

15

5.1%

Home sales revenue              ($ in thousands)

$

60,369

$

55,049

$

5,320

9.7%

$

110,030

$

104,685

$

5,345

5.1%

Average sales price of home delivered

$

372,648

$

357,459

$

15,189

4.2%

$

358,404

$

358,511

$

(107)

—%

Three Months Ended  June 30,

Increase (Decrease)

Six Months Ended  June 30,

Increase (Decrease)

Land and Lots Sales Revenue

2015

2014

Change

%

2015

2014

Change

%

Land and lots sold

113

107

6

5.6%

185

242

(57)

(23.6)%

Land and lots sales revenue ($ in thousands)

$

11,618

$

10,794

$

824

7.6%

$

20,409

$

24,167

$

(3,758)

(15.6)%

Average sales price of land and lots sold

$

102,817

$

100,885

$

1,932

1.9%

$

110,319

$

99,865

$

10,454

10.5%

 

Six Months Ended  June 30,

Increase (Decrease)

New Home Orders & Backlog

2015

2014

Change

%

Net new home orders

347

325

22

6.8%

Average selling communities

37

25

12

48.0%

Selling communities at end of period

43

25

18

72.0%

Backlog ($ in thousands)

$

102,401

$

78,908

$

23,493

29.8%

Backlog (units)

249

240

9

3.8%

Average sales price of backlog

$

411,249

$

328,782

$

82,467

25.1%

 

About Green Brick Partners, Inc.:

Green Brick Partners, Inc. is a uniquely structured company that combines residential land development and homebuilding. The Company acquires and develops land, provides land and construction financing to its controlled builders and participates in the profits of its controlled builders. The Company owns a controlling interest in four homebuilding companies in Dallas, Texas (CB JENI Homes DFW LLC, Normandy Homes (a division of CB JENI), Southgate Homes DFW LLC, and Centre Living Homes, LLC), as well as a leading homebuilder in Atlanta, Georgia (The Providence Group of Georgia, L.L.C.). The Company is engaged in all aspects of the homebuilding process, including land acquisition and the development, entitlements, design, construction, marketing and sales and the creation of brand images at its residential neighborhoods and master planned communities.

Forward-Looking and Cautionary Statements

Any statements in this press release about Green Brick's expectations, beliefs, plans, objectives, prospects, financial condition, assumptions or future events or performance, that are not historical facts are forward-looking statements. These statements are often, but not always, made through the use of words or phrases such as "may," "will," "should," "could," "would," "predicts," "potential," "continue," "expects," "anticipates," "future," "outlook," "strategy," "positioned," "intends," "plans," "believes," "projects," "estimates"   and similar expressions, as well as statements in the future tense. These statements are based on assumptions that Green Brick has made in light of its experience in the industry as well as its perceptions of historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances. Accordingly, all such forward-looking statements involve estimates and assumptions that are subject to risks, uncertainties and other factors that could cause actual results to differ materially from the results expressed in the statements. Among the factors that could cause actual results to differ materially from those projected in the forward-looking statements are the following: cyclicality in the homebuilding industry and adverse changes in general economic conditions; fluctuations and cycles in value of, and demand for, real estate investments; significant inflation or deflation; the unavailability of subcontractors; labor and raw material shortages and price fluctuations; the failure to recruit, retain and develop highly skilled and competent employees; an inability to acquire undeveloped land, partially-finished developed lots and finished lots suitable for residential homebuilding at reasonable prices; an inability to develop communities successfully or within expected timeframes; an inability to sell properties in response to changing economic, financial and investment conditions; risks related to participating in the homebuilding business through controlled homebuilding subsidiaries; risks relating to buy-sell provisions in the operating agreements governing two builder subsidiaries; risks related to geographic concentration; risks related to government regulation; the interpretation of or changes to tax, labor and environmental laws; the timing of receipt of regulatory approvals and of the opening of projects; fluctuations in the market value of land, building lots and housing inventories; volatility of mortgage interest rates; the unavailability of mortgage financing; the number of foreclosures in our markets; interest rate increases or adverse changes in federal lending programs; increases in unemployment or underemployment; any limitation on, or reduction or elimination of, tax benefits associated with owning a home; the occurrence of severe weather or natural disasters; high cancellation rates; competition in the land development, homebuilding and financial services industries; risks related to future growth through strategic investments, joint ventures, partnerships and/or acquisitions; the inability to obtain suitable bonding for the development of housing projects; difficulty in obtaining sufficient capital; risks related to environmental laws and regulations; the occurrence of a major health and safety incident; poor relations with the residents of our communities; information technology failures and data security breaches; product liability claims, litigation and warranty claims; the seasonality of the homebuilding industry; utility and resource shortages or rate fluctuations; the failure of employees or other representatives to comply with applicable regulations and guidelines; future litigation, arbitration or other claims; uninsured losses or losses in excess of insurance limits; cost and availability of insurance and surety bonds; continued volatility and uncertainty in the credit markets and broader financial markets; availability, terms and deployment of capital; our debt and related service obligations; required accounting changes; an inability to maintain effective internal control over financial reporting; and other risks and uncertainties inherent in our business. Additional factors that could cause actual results to differ from those anticipated are discussed in the Company's annual and quarterly reports filed with the Securities and Exchange Commission. Because the factors referred to above could cause actual results or outcomes to differ materially from those expressed or implied in any forward-looking statements made by Green Brick, you should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date of this press release, and Green Brick undertakes no obligation to update any forward-looking statement to reflect events or circumstances after such date.

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SOURCE Green Brick Partners, Inc.