Green Brick Partners, Inc. · NYSE:GRBK
Green Brick Partners — Investor Presentation (November 2019)
32 slides from Green Brick Partners's investor presentation, November 2019
Slide 1: Fall Investor Presentation November 2019
Trophy Signature Homes | Hollyhock, Frisco, TX Move-Up Series FALL INVESTOR PRESENTATION NOVEMBER 2019
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS This presentation and the oral statements made by representatives of the Company during the course of this presentation 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 a
Slide 3: Management Presenters
MANAGEMENT PRESENTERS Rick Costello Anthony England, CPA Chief Financial Officer Manager of Financial Analysis • Over 26 years of financial and operating experience in all aspects of real • 7+ years of experience in public accounting and in overseeing core estate management financial processes for G
Slide 4: Company Overview
COMPANY OVERVIEW BUILDING COMMUNITIES | DEVELOPING DREAMS 4
Slide 5: Sustained Growth Through Prudent Land Development
SUSTAINED GROWTH THROUGH PRUDENT LAND DEVELOPMENT We have the strong balance sheet and operational excellence for continued growth LTM Total Revenue and End of Period Lot Supply for Green Brick Partners* September 2019 800,000 10000 9000 700,000 8000 600,000 7000 500,000 6,414 6000 Dollars ($) Lots
Slide 6: Company at a Glance
COMPANY AT A GLANCE 2018 Total Homes Closed: 1,902(1) 2018 Total Home Closings Revenue: $751mm(1) Unconsolidated Builder Partners (2) (1) Includes homes closed and home closings revenue of Challenger Homes and GHO Homes for all of 2018. Challenger Homes is an unconsolidated entity and GHO Homes was
Slide 7: Nationally Ranked in Excellence
NATIONALLY RANKED IN EXCELLENCE 2019 ”A” RANKING IN 2019 PUBLIC BUILDER REPORT CARD Grade Builder Total Revenue (in millions) Capitalization A+ NVR $7,163.7 Large Cap A D.R. Horton $16,254.3 Large Cap A Green Brick Partners $623.6 Small Cap A Lennar Corp. $20,571.6 Large Cap A Pulte Group $10,188.3
Slide 8: Green Brick Is a Diversified Builder with 8 Brands in 4 Major Markets
GREEN BRICK IS A DIVERSIFIED BUILDER WITH 8 BRANDS IN 4 MAJOR MARKETS Team Builders Market Products Offered Price Range Structure Townhomes $320k - $880k Atlanta, GA Single Family Consolidated(1) $340k - $840k Condominiums Financial Services / Townhomes $240k - $430k Consolidated(1) Dallas, TX Singl
Slide 9: Green Brick Recent News
GREEN BRICK RECENT NEWS Recent Developments and Press Releases June 2019 • The Providence Group of Georgia announces new 122-home community in Alpharetta, GA. • Green Brick Partners’ subsidiary, CB JENI Homes, announces Terraces of Las Colinas, a new $610.0 79-townhome community in Irving, TX. $462.
Slide 10: Green Brick Closes $75 Million 4.00% Senior Unsecured Notes
GREEN BRICK CLOSES $75 MILLION 4.00% SENIOR UNSECURED NOTES Notes will fund future growth at long-term rates significantly lower than peers • On August 8, 2019, we closed a $75.0 million private placement of senior unsecured notes due in 2026 with Prudential Private Capital, one of the world’s large
Slide 11: Investment Highlights
INVESTMENT HIGHLIGHTS BUILDING COMMUNITIES | DEVELOPING DREAMS 11
Slide 12: Keys to Our Success
KEYS TO OUR SUCCESS Seasoned management team with track record of execution across cycles Differentiated business model drives industry-leading profitability and attractive returns Industry-leading growth profile and established track record of market share gains High quality land positions in leadi
Slide 13: Seasoned and Aligned Management Team
SEASONED AND ALIGNED MANAGEMENT TEAM • Our management team is comprised of building and finance veterans with decades of experience in our markets • Significant expertise in capital allocation, land acquisition, entitlement, development, construction, marketing, and home sales • Strong institutional
Slide 14: Pre-Tax Results Exceed Peer Small-Cap and Mid-Cap Builders
PRE-TAX RESULTS EXCEED PEER SMALL-CAP AND MID-CAP BUILDERS Green Brick achieves a return on invested capital that exceeds our peers Green Brick Q3 2019 KPIs vs Peer Median by Market Capitalization, Last Twelve Months 1 2 15.0% GRBK Median Small Cap Median Mid Cap 11.6% 11.8% 10.0% 10.6% 10.0% 9.6% 8
Slide 15: Balance Sheet Strength
BALANCE SHEET STRENGTH Unlike most peers, our conservative financial leverage allows us to continue high margin growth. • GRBK Net Debt* to Capital is 28.5% as of September 30, 2019 versus an average 44.2% for covered public builders (Peer data as of 9.30.19) Net Debt* to Total Capital Q3 2019 60.4%
Slide 16: Drivers for Increase in Return on Equity
DRIVERS FOR INCREASE IN RETURN ON EQUITY With significant growth drivers in place, Green Brick can enhance future returns on equity through: • Modest increase in debt to capital up to 35%. Consolidated debt is priced significantly less than most small-cap peers and mid-cap peers. • Scale our SG&A le
Slide 17: Growth Drivers
GROWTH DRIVERS Green Brick continues to demonstrate industry-leading growth with industry-low financial leverage Total Revenue ($ in Millions) Backlog ($ in Millions) Lots Owned and Controlled $800 $350 10000 $700 $300 $746.7 $319.7 8000 9,269 $600 $250 $500 6000 $200 $400 $150 4000 $300 $200 $100 +
Slide 18: Green Brick Is a Diversified Builder
GREEN BRICK IS A DIVERSIFIED BUILDER Rapidly expanding into entry-level and first-time move-up homes with over 1,600 newly acquired homesites for Trophy Signature Homes Home Closings Revenue Revenue in Millions, ASP in Thousands Townhomes, Condominium, Single-Family Total and Attached Homes $450 $45
Slide 19: Homebuyer Customer Diversification in Texas, Georgia, & Florida Markets
HOMEBUYER CUSTOMER DIVERSIFICATION IN TEXAS, GEORGIA, & FLORIDA MARKETS We also manage risk by diversifying our homebuyer customer mix Homebuyer Customer Mix LTM GRBK Homebuilding Revenues by Product Type LTM 9.30.17 Homebuilding Revenues LTM 9.30.18 Homebuilding Revenues LTM 9.30.19 Homebuilding Re
Slide 20: Financial Highlights
FINANCIAL HIGHLIGHTS (Unaudited) Qtr over Qtr Yr over Yr (Dollars in Millions, Except EPS) Q3 2019 Q3 2018 2019 YTD 2018 YTD Notes Change Change New Homes Delivered 443 312 42.0% 1,205 905 33.1% record for any quarter Net New Home Orders 436 297 46.8% 1,334 1,118 19.3% Net Orders Per Community Per Q
Slide 21: Market Update
MARKET UPDATE BUILDING COMMUNITIES | DEVELOPING DREAMS 21
Slide 22: Market Update – Job Growth
MARKET UPDATE – JOB GROWTH National Economic Overview Top Job Growth Markets Ranked by Change in Employment, TTM August 2019 Rank MSA Employment Growth Growth % 1 New York-Newark-Jersey City, NY-NJ-PA 9,938,000 134,200 1.4 % 2 Dallas-Fort Worth-Arlington, TX 3,810,900 115,800 3.1 % 3 Houston-The Woo
Slide 23: Market Update - Starts
MARKET UPDATE - STARTS We are 2% to 5% of the starts in three of the largest housing markets in the U.S., giving us significant opportunity for growth National Housing Market Annual Starts by Market – TTM September 2019 40,000 35,000 33,572 30,000 29,435 25,000 26,380 25,461 24,095 20,000 19,703 15,
Slide 24: Land Position
LAND POSITION Land is well positioned in attractive submarkets Atlanta Metro Area Dallas Metro Area Submarket Grades GRBK Locations Most desirable Desirable area Median desirability More affordable Most affordable Land position highlights 85 36* 92 Active selling communities Communities Projected ac
Slide 25: Award-Winning Communities
AWARD-WINNING COMMUNITIES Bellmoore Park Village at Twin Creeks Mustang Park Johns Creek, GA Allen, TX Carrollton, TX • 2016 Atlanta Home Builders Association • 2019 Dallas Builders Association McSAM • 2015 Dallas Builders Association McSAM Master Planned Community of the Year Award for Builder Neig
Slide 26: Award-Winning Homes
AWARD-WINNING HOMES The Montgomery at 5T Ranch The Fletcher at Mason Main Seville Plan at Village at Twin Creeks Argyle, TX Woodstock, GA Allen, TX • 2018 Dallas Builders Association McSAM • 2019 Atlanta Home Builders Association • 2016 Dallas Builders Association McSAM Award for Home of the Year OB
Slide 27: Appendix
APPENDIX BUILDING COMMUNITIES | DEVELOPING DREAMS 27
Slide 28: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Adjusted Homebuilding Gross Margin Reconciliation Twelve Twelve Twelve Three Months Three Months Nine Months Nine Months Months Months Months Ended Ended Ended Ended Ended Ended Ended (Unaudited, in Thousands) September September September September September September Septem
Slide 29: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Adjusted GRBK Pre-tax Income as a Percentage of Total Revenues and GRBK Pre-tax Income Return on Average Invested Capital Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended Twelve Months Ended (Unaudited, in Thousands) September 30, 2019 September 30, 2
Slide 30: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION EBITDA Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended (Unaudited, in Thousands) September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Adjusted Pre-tax Income Attributable to Green Brick $21,414 $16,943 $57,489 $52,326 Add Back:
Slide 31: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Net Income Return on Average Equity Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended Twelve Months Ended (Unaudited, in Thousands) September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 September 30, 2019 Net Income Attributable t
Slide 32: Fall Investor Presentation November 2019
The Providence Group of Georgia| East of Main, Alpharetta, GA Award-Winning Luxury Single-Family and Townhomes FALL INVESTOR PRESENTATION NOVEMBER 2019 32 2805 Dallas Parkway, Suite 400 Plano, Texas 75093 | www.greenbrickpartners.com
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