Green Brick Partners, Inc. · NYSE:GRBK
Green Brick Partners — Q1 2020 Earnings Presentation
22 slides from Green Brick Partners's earnings presentation, 2020
Slide 1: First Quarter Investor Call Presentation 2020
Exhibit 99.2 The Providence Group Pratt Stacks | Atlanta, GA FIRST QUARTER INVESTOR CALL PRESENTATION 2020 BUILDING COMMUNITIES | DEVELOPING DREAMS
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation 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 exp
Slide 3: Management Presenters
MANAGEMENT PRESENTERS Jim Brickman Rick Costello Jed Dolson Chief Executive Officer Chief Financial Officer President of Texas Region • Over 40 years in real estate development • Over 25 years of financial and operating • Over 15 years of land development and and homebuilding. experience in all aspe
Slide 4: 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 Atlanta, GA Townhomes $320k - $690k Consolidated(1) Single Family $340k - $1.01M Condominiums $380k - $580k Financial Services Dallas, TX Townhomes $230k - $480k Consolid
Slide 5: Green Brick Partners and Team Builders COVID-19 Response
GREEN BRICK PARTNERS AND TEAM BUILDERS COVID-19 RESPONSE Measures taken as part of comprehensive COVID-19 response Land Spend Purchasing • Reduced our purchases of lots and land. • Cost savings from renegotiations with trade partners for both labor and materials • Significantly slowed most land deve
Slide 6: Our Markets and COVID-19
OUR MARKETS AND COVID-19 DFW MAP OF RECESSION RESISTANT CITIES / COUNTIES North Texas tops the list of recession resistant markets in the country Denton County Collin County • Of the several North Texas suburbs where Green Brick builds, three municipalities are in the top four and four are in the to
Slide 7: Our Markets and COVID-19
OUR MARKETS AND COVID-19 Multiple factors further mitigate our risk in markets outside of Texas • Atlanta: In the lot-constrained North Atlanta suburbs, Green Brick owns nearly 1,500 lots which are entitled for a breadth of products including condo, townhome, and single-family units. After reviewing
Slide 8: Land Position
LAND POSITION Land is well positioned in attractive submarkets Atlanta Metro Area Dallas Metro Area GRBK Locations Submarket Grades Most desirable Desirable area Median desirability More affordable Most affordable Land position highlights 93 29* Active selling communities Communities as of 3.31.20 u
Slide 9: Consistent Concentration of Owned Lots Should Drive Future Cash Flow
CONSISTENT CONCENTRATION OF OWNED LOTS SHOULD DRIVE FUTURE CASH FLOW Lots Owned and Controlled Year over Year Change in Green Brick Percentages of Owned and Controlled Lots 3.31.2019 Lots Owned and Controlled • With a 1.6 year supply of finished or nearly-finished lots at March 31st, 2020, Green Bri
Slide 10: Industry-Leading Gross Margin
INDUSTRY-LEADING GROSS MARGIN Green Brick maintains some of the best margins in the industry, well above most small and mid-cap peers • GRBK Gross Margin Percentage is 23.1% for the quarter ended March 31, 2020 versus an average 19.0% for covered public builders (Peer data based on most recent filin
Slide 11: Green Brick Is a Diversified Builder
GREEN BRICK IS A DIVERSIFIED BUILDER Home Closings Revenue Revenue in Millions, ASP in Thousands Townhomes, Condominiums, Single-Family Total and Attached Homes $200 $120 $120 $180 $100 $100 $124.2 $160 $189.2 $140 $80 $80 $120 $60 $60 $100 $65.0 $120.4 $62.4 $80 $40 $58.0 $40 $60 +12% $40 $20 $20 +
Slide 12: 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 Quarterly GRBK Home Closings Revenue by Product Type Q1 2018 Home Closings Revenue Q1 2020 Home Closings Revenue 10% 12% 6% 6% 5% 37% 22% 57%
Slide 13: Financial Highlights
FINANCIAL HIGHLIGHTS (Unaudited) (Dollars in Millions, Except EPS) Q1 2020 Q1 2019 Qtr over Qtr Change Notes New Homes Delivered 448 368 21.7% Strong order growth and margin improvement demonstrate the Net New Home Orders 632 444 42.3% health of markets prior to COVID-19 pandemic. Average Selling Co
Slide 14: Backlog
BACKLOG 3.31.2020 Record Backlog is up 39% YOY and 23% Sequentially Comparison of Prior Year Closings to Total of Q1 Actual Closings plus March 31st Ending Backlog 1,800 1,719 82.5% of PY 1,600 closings 1,400 448 79.7% of PY 1,200 1,287 closings 1,000 75.2% of PY 368 990 970 closings 800 844 62.1% o
Slide 15: Our Business Is a Variable Cost Business
OUR BUSINESS IS A VARIABLE COST BUSINESS With SG&A leverage stabilized at 12.2% for the last twelve months ended 3.31.2020, Green Brick has the capability to scale overhead with changes in expected revenues Green Brick SG&A Leverage* vs Total Revenues Revenue in Thousands 1,000,000 20.0% 12.2% 12.5%
Slide 16: COVID-19 Preparedness
COVID-19 PREPAREDNESS Based on our assumed key performance indicators, we believe Green Brick is one of the best prepared public builders for the current recession Percentage of Closed and Sold Rank(1) Builder Gross Margin % Interest Coverage % Owned Lots vs Controlled Homes vs Prior Year Closings(2
Slide 17: Balance Sheet Strength
BALANCE SHEET STRENGTH Green Brick continues to maintain its position as one of the lowest leveraged public builders • GRBK Net Debt* to Capital is 27.9% as of March 31, 2020 versus an average 39.5% for covered public builders (Peer data based on most recent filings as of 5.7.2020). Net Debt* to Tot
Slide 18: Appendix
APPENDIX BUILDING COMMUNITIES | DEVELOPING DREAMS 18
Slide 19: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Adjusted Homebuilding Gross Margin Reconciliation Three Months Ended Three Months Ended (Unaudited, in Thousands) March 31, 2020 March 31, 2019 Residential Units Revenue $191,187 $161,588 Less: Mechanic’s Lien Contracts Revenue (1,939) (2,355) Home Closings Revenue $189,248 $
Slide 20: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Adjusted GRBK Pre-tax Income, EBITDA, and Interest Coverage Ratio Three Months Ended Three Months Ended (Unaudited, in Thousands) March 31, 2020 March 31, 2019 Net Income Attributable to Green Brick $ 15,917 $ 12,605 Income Tax Expense Attributable to Green Brick 5,988 3,794
Slide 21: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Supporting Calculations for Covid-19 Preparedness Ranking on Slide 16 Percentage of Closed and Sold Gross Rank Peer Rank Peer Homes vs Prior Year Closings Margin % Percentage of Builder % Owned 1 TMHC 93.6% 1 LGIH 23.4% Closed and Sold Gross Interest Rank by Rank by Lots vs M
Slide 22: First Quarter Investor Call Presentation 2020
Southgate Homes Edgewood | Frisco, TX FIRST QUARTER INVESTOR CALL PRESENTATION 2020 2805 Dallas Parkway, Suite 400 Plano, Texas 75093 | www.greenbrickpartners.com BUILDING COMMUNITIES | DEVELOPING DREAMS