Green Brick Partners, Inc. · NYSE:GRBK
Green Brick Partners — Q2 2018 Earnings Presentation
23 slides from Green Brick Partners's earnings presentation, Aug 6, 2018
Slide 1: Green Brick Partners Q2 2018 Investor Call Presentation
Exhibit 99.2 GREEN BRICK PARTNERS Q2 2018 INVESTOR CALL PRESENTATION AUGUST 6, 2018 1
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 Chief Executive Officer Chief Financial Officer • Over 40 years in real estate development and • Over 26 years of financial and operating experience in homebuilding. all aspects of real estate management. • Co-founded JBGL with Greenlight Capital in 2
Slide 4: Market Update: National Economic Overview
MARKET UPDATE National Economic Overview Top Job Growth Markets Ranked by Change in Employment – May 2018 Source: Metrostudy - MetroUSA 4
Slide 5: Market Update: Share of Starts in Largest Housing Markets
MARKET UPDATE We are 2% to 3% of the starts in two of the largest housing markets, giving us significant opportunity for growth National Housing Market Annual Starts by Market – May 2018 GRBK has also entered the Colorado Springs market through our investment in Challenger Homes. Source: Metrostudy
Slide 6: Market Update: Dallas Market Expansion
MARKET UPDATE Dallas market continues 7-year expansion but is still well below the 2006 peak of more than 50,000 starts Dallas/Fort Worth Market SFD-TH – Starts and closings Source: Metrostudy - MetroUSA 6
Slide 7: Market Update: Dallas Lot Inventory
MARKET UPDATE GRBK has over 4,700 lots in Dallas where the market continues its 7-year trend of constrained supply Dallas/Fort Worth Market Lot Inventory Source: Metrostudy - MetroUSA 7
Slide 8: Market Update: Atlanta Market Expansion
MARKET UPDATE The Atlanta market also continues to expand but is still well below prior peak AtlantaAtlanta Region Region 16 Year 16 History Year History AnnualAnnual Construction Construction Starts Startsand Closingsand Closings 2Q062Q06 Peaked Peaked 60,000 55,000 50,000 45,000 Units 40,000 35,00
Slide 9: Land Position in Attractive Submarkets
LAND POSITION Land is well positioned in attractive submarkets Atlanta Metro Area Dallas Metro Area Submarket Submarket Grades Grades A A B B C C D D E E GRBK GRBK Locations Locations Source: John Burns Real Estate Consulting (Regional Analysis and Forecast Published May 2018) 9 Note: GRBK Locations
Slide 10: Our Markets Exhibit Limited Supply
LIMITED SUPPLY Our markets exhibit limited supply Resale Months Supply in Major U.S. Cities(1) 8.5 6.2 6.0 5.5 5.0 4.8 4.8 4.3 3.7 3.5 3.5 3.2 3.2 3.1 3.0 2.8 2.5 2.3 2.3 2.2 2.1 2.1 2.1 2.1 2.0 1.8 1.7 1.6 1.5 1.0 0.8 0.8 Source: Metrostudy – MetroUSA 10 (1) Metrostudy – MetroUSA (Atlanta Housing M
Slide 11: Corporate Structure
CORPORATE STRUCTURE • Control positions in five separate homebuilders and 49.9% position with a pathway to control in one homebuilder • Acquire and develop land and provide land and construction financing to our Dallas and Atlanta Team BuildersTM • Participate in the profits of all of our Team Build
Slide 12: Development Spotlight: The Reserve on Parker
DEVELOPMENT SPOTLIGHT The Reserve on Parker – Carrollton, Texas • 106-lot community located in Carrollton, Texas. As of July 23, 2018 there were 52 Normandy Homes lots remaining in the community. • Normandy Homes offers residents of The Reserve on Parker seven different floorplans that range from 1,
Slide 13: GRBK: A True Growth Story
GRBK: A TRUE GROWTH STORY We have the strong balance sheet and operational excellence for continued growth Annual Revenue Growth for Green Brick Partners and Predecessor 13
Slide 14: Balance Sheet Strength
BALANCE SHEET STRENGTH GRBK has one of the lowest debt-to-capital ratios amongst public builders. We have the capital to continue growing profitably. • GRBK Net Debt to Capital(1) is 22.7% as of June 30, 2018 versus an average 38% for covered public builders • GRBK Debt to Capital is 27.4% as of Jun
Slide 15: Financial Highlights
FINANCIAL HIGHLIGHTS Unaudited 2017 vs 2018 Year-to-Date Q2 2018 Q2 2017 YTD 2018 YTD 2017 Q2 Increase Increase Home Closings - Units 327 237 38% 594 463 28% Net New Orders 387 270 43% 821 557 47% Homebuilding Revenues ($'s in thousands) $143,878 $100,345 43% $264,244 $193,742 36% 3rd Party Lot Clos
Slide 16: Operational Highlights
OPERATIONAL HIGHLIGHTS LTM Adjusted Gross Margins LTM GRBK Pre-Tax Income to Homebuilding Revenues 16
Slide 17: Industry-Leading Margins
INDUSTRY-LEADING MARGINS LTM Pretax Margin%* (LTM – Q2 2018 for GRBK / LTM – Q1 2018 for peers) Median: 8.4% Source: Citi Research data for comparative companies is reported as of July 31, 2018 * Amount presented reflects available Citi Research data provided June 29, 2018 17
Slide 18: Attractive Returns
ATTRACTIVE RETURNS Return on Invested Capital%(1) (LTM – Q2 2018 for GRBK / LTM – Q1 2018 for peers) Median: 11.7% Source: Citi Research data for comparative companies is reported as of June 29, 2018 (1) Non-GAAP figure. See Slide 20 for reconciliation 18
Slide 19: Appendix
APPENDIX 19
Slide 20: Non-GAAP Reconciliation: Adjusted Homebuilding Gross Margin
NON-GAAP RECONCILIATION Adjusted Homebuilding Gross Margin Reconciliation 12 Months 12 Months 12 Months 12 Months 12 Months Ended Ended Ended Ended Ended (Unaudited, in thousands) June 30, 2017 Sep 30, 2017 Dec 31, 2017 Mar 31, 2018 Jun 30, 2018 Sale of Residential Units $398,546 $419,156 $435,644 $
Slide 21: Non-GAAP Reconciliation: GRBK Pre-tax Income
NON-GAAP RECONCILIATION GRBK Pre-tax Income as a Percentage of Homebuilding Revenues 12 Months 12 Months 12 Months 12 Months 12 Months Ended Ended Ended Ended Ended (Unaudited, in thousands) Jun 30, 2017 Sep 30, 2017 Dec 31, 2017 Mar 31, 2018 Jun 30, 2018 LTM net income attributable to Green Brick $
Slide 22: Non-GAAP Reconciliation: Return on Invested Capital
NON-GAAP RECONCILIATION Return on Invested Capital 12 Months Ended (Unaudited, in thousands) June 30, 2018 Income before taxes $79,150 Add back: Capitalized interest charged to cost of sales $3,594 Earnings Before Interest and Taxes $82,744 Divided by: Borrowings on lines of credit $167,500 Notes pa
Slide 23: 2805 Dallas Parkway, Suite Plano, TX 75093 www.greenbrickpartners.com 23
2805 Dallas Parkway, Suite 400 Plano, TX 75093 www.greenbrickpartners.com 23