Green Brick Partners, Inc. · NYSE:GRBK
Green Brick Partners — Q1 2019 Earnings Presentation
22 slides from Green Brick Partners's earnings presentation, May 2, 2019
Slide 1: First Quarter Investor Call Presentation 2019
Exhibit 99.2 FIRST QUARTER INVESTOR CALL PRESENTATION 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 Jim Brickman Rick Costello Jed Dolson Summer Loveland Chief Executive Officer Chief Financial Officer President of Texas Region Chief Accounting Officer • Over 40 years in real estate • Over 26 years of financial and • Over 15 years of land development • Over 25 years of experi
Slide 4: Green Brick is a diversified builder with brands in 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 - $430k Consolidated(1) / Dallas, TX Singl
Slide 5: Market Update: National Economic Overview
MARKET UPDATE National Economic Overview Top Job Growth Markets Ranked by Change in Employment, TTM Feb 2019 Rank MSA Employment Growth Growth % 1 New York-Newark-Jersey City, NY-NJ-PA 9,778,800 107,800 1.1% 2 Dallas-Fort Worth-Arlington, TX 3,730,600 102,500 2.8% 3 Houston-The Woodlands-Sugar Land,
Slide 6: Market Update: Annual Starts by Market
MARKET UPDATE We are 2% to 3% of the starts in two of the largest housing markets in the U.S., giving us significant opportunity for growth National Housing Market Annual Starts by Market – March 2019 40,000 35,000 34,523 30,000 30,206 28,082 25,000 24,145 24,423 20,000 20,039 18,066 15,000 15,793 1
Slide 7: Land Position
LAND POSITION Land is well positioned in attractive submarkets Atlanta Metro Area Dallas Metro Area Submarket Grades GRBK Locations Most desirable Desirable area Median desirability More affordable Most affordable Land position highlights 79 39* Active communities Communities as of 3.31.19 under dev
Slide 8: Sustained growth through prudent land development
SUSTAINED GROWTH THROUGH PRUDENT LAND DEVELOPMENT We have the strong balance sheet and operational excellence for continued growth Annual Revenue and Lot Growth for Green Brick Partners and Predecessor* March 2019 Annual Revenue and Lot Growth for Green Brick Partners and Predecessor 700,000 9000 80
Slide 9: Growth Drivers
GROWTH DRIVERS Green Brick continues to demonstrate industry-leading growth with industry-low financial leverage Total Revenue ($ in Millions) Backlog ($ in Millions) Lots Owned and Controlled $700 $350 9000 $600 $300 8000 $663.1 $307.5 7000 $500 $250 8,494 6000 $400 $200 5000 $300 $150 4000 3000 $2
Slide 10: Green Brick is a diversified builder: Home Closings Revenue Growth
GREEN BRICK IS A DIVERSIFIED BUILDER Home Closings Revenue Growth Revenue in Millions, ASP in Thousands Townhomes, Condominium, Single-Family Total $257.0 $353.0 $610.0 and Attached Homes $300 $400 $700 $229.0 $462.6 $240.0 $350 $233.6 $600 $391.9 $250 $151.9 $300 $500 $200 $250 $400 $150 $200 $300
Slide 11: Recent Developments
GREEN BRICK IS A DIVERSIFIED BUILDER Recent Developments • Purchase of GHO Homes in April 2018 • Entry into age-targeted segment • Entry into state of Florida $353.0 $610.0 • Building single-family and attached patio homes • 13% of LTM 3.31.19 revenues with 11 months of operations $462.6 • Introduct
Slide 12: Homebuyer Customer Diversification
HOMEBUYER CUSTOMER DIVERSIFICATION We manage risk by diversifying our homebuyer customer mix Homebuyer Customer Mix Percent of GRBK Revenues (y-axis) and YOY Increase in Segment Revenue Suburban Townhouse Second Time Plus Move-Up First Time Move-Up 50% 50% 25% 40% 40% 20% 30% 30% 15% 20% 20% 10% + -
Slide 13: Financial Highlights
FINANCIAL HIGHLIGHTS (Unaudited) Qtr over Qtr Q1 2018 Q1 2019 Increase New Homes Delivered 267 368 37.8% Net New Home Orders 434 444 2.3% 20.6% more home orders in Q1 2019 than Q1 2019 deliveries Residential Units Revenue $121,264 $161,588 33.3% Total Revenues $129,163 $168,628 30.6% Backlog $226,51
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 equity that exceeds our peers who are much more highly leveraged Green Brick KPI's vs Peer Median by Market Capitalization, Last Twelve Months 1 2 15.0% GRBK Median Small Cap Median Mid Cap 11.7% 11.6% 11.2%
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 27.5% as of March 31, 2019 versus an average 39% for covered public builders (Peer data as of 12.31.18) Net Debt* to Total Capital Q1 2019 61.9% 55.9
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 from 30% to target range of 30%- 35% • Scale our SG&A leverage by controlling corporate overhead growth while our Team Bui
Slide 17: Appendix
APPENDIX BUILDING COMMUNITIES | DEVELOPING DREAMS 17
Slide 18: Non GAAP Reconciliation: Adjusted Homebuilding Gross Margin
NON GAAP RECONCILIATION Adjusted Homebuilding Gross Margin Reconciliation 3 Months Ended 3 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended (Unaudited, in thousands) Mar 31, 2019 Mar 31, 2018 Mar 31, 2019 Mar 31, 2018 Mar 31, 2017 Residential units revenue $161,588 $121,264 $619,218 $465
Slide 19: Non GAAP Reconciliation: Pre-tax Income Ratios
NON GAAP RECONCILIATION GRBK Pre-tax Income as a Percentage of Total Revenues and GRBK Pre-tax Income to Average Invested Capital 3 Months Ended 3 Months Ended 12 Months Ended (Unaudited, in thousands) Mar 31, 2019 Mar 31, 2018 Mar 31, 2019 Net income attributable to Green Brick $12,605 $11,203 $53,
Slide 20: Non GAAP Reconciliation: EBITDA
NON GAAP RECONCILIATION EBITDA 3 Months Ended 3 Months Ended (Unaudited, in thousands) Mar 31, 2019 Mar 31, 2018 Pre-tax income attributable to Green Brick $16,433 $14,575 Add back: Capitalized interest charged to cost of revenues $1,140 $881 Add back: Depreciation and amortization expense $888 $402
Slide 21: Non GAAP Reconciliation: Net Income Return on Average Equity
NON GAAP RECONCILIATION Net Income Return on Average Equity 3 Months Ended 3 Months Ended 12 Months Ended (Unaudited, in thousands) Mar 31, 2019 Mar 31, 2018 Mar 31, 2019 Net income attributable to Green Brick $12,605 $11,203 $53,025 Beginning Total Green Brick stockholders’ equity 468,351 416,347 4
Slide 22: First Quarter Investor Call Presentation 2019
FIRST QUARTER INVESTOR CALL PRESENTATION 2019 2805 Dallas Parkway, Suite 400 Plano, Texas 75093 | www.greenbrickpartners.com22