Green Brick Partners, Inc. · NYSE:GRBK
Green Brick Partners — Q4 2018 Earnings Presentation
22 slides from Green Brick Partners's earnings presentation, Mar 4, 2019
Slide 1: Fourth Quarter Investor Call Presentation 2018
Exhibit 99.2 FOURTH QUARTER INVESTOR CALL PRESENTATION 2018
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 Homebuilder with Different Team Builder Brands
GREEN BRICK IS A HOMEBUILDER WITH 8 DIFFERENT TEAM BUILDER BRANDS Voting Team Builders Market Products Offered Price Range Control Townhomes $320k - $880k 51%(1) Atlanta, GA Single Family $340k - $840k Financial Services Townhomes $240k - $430k 51%(1) Dallas, TX / Single Family $320k - $620k Dallas,
Slide 5: Market Update: National Economic Overview
MARKET UPDATE National Economic Overview Top Job Growth Markets Ranked by Change in Employment, TTM Oct 2018 Rank MSA Employment Growth Growth % 1 Houston-The Woodlands-Sugar Land, TX 3,158,800 117,800 3.9% 2 Dallas-Fort Worth-Arlington, TX 3,752,400 109,000 3.0% 3 New York-Newark-Jersey City, NY-NJ
Slide 6: Market Update: Annual Starts by Market
MARKET UPDATE We are 2% to 3% of the starts in two of the largest housing markets in the U.S., giving us significant opportunity for growth National Housing Market Annual Starts by Market – December 2018 40,000 35,000 34,750 30,000 30,146 28,074 25,000 24,611 25,202 20,000 21,057 19,473 17,787 15,00
Slide 7: Market Spotlight: Frisco, Texas
MARKET SPOTLIGHT Frisco, Texas ”1,800 COMPANIES LEFT CALIFORNIA IN A YEAR “JOB GAINS PUT DALLAS ON LIST OF TOP U.S. – WITH MOST BOUND FOR TEXAS” HOME MARKETS FOR 2019” - DALLAS BUSINESS JOURNAL (12/13/18) – DALLAS MORNING NEWS (1/16/19) ”WELCOME HOME, NORTH TEXAS TELLS COMPANIES” – US NEWS (2/8/19)
Slide 8: Land Position
LAND POSITION Land is well positioned in attractive submarkets Atlanta Metro Area Dallas Metro Area Submarket Grades GRBK Locations A B C D E Land position highlights 76 22 3 Active communities Communities Markets nationwide as of 12.31.18 under development Source: John Burns Real Estate Consulting
Slide 9: Sustained Growth Through Prudent Land Development
SUSTAINED GROWTH THROUGH PRUDENT LAND DEVELOPMENT We have the strong balance sheet and operational excellence for continued growth Annual Revenue and Lot Growth for Green Brick Partners and Predecessor* December 2018 Annual Revenue and Lot Growth for Green Brick Partners and Predecessor 700,000 9000
Slide 10: Growth Drivers
GROWTH DRIVERS Green Brick continues to demonstrate industry-leading growth with industry-low financial leverage Total Revenue ($ in Millions) Backlog ($ in Millions) Lots Owned and Controlled $700 $300 9000 8000 $600 $250 $623.6 $264.3 7000 $500 8,078 $200 6000 $400 5000 $150 $300 4000 $100 3000 $2
Slide 11: Green Brick Is a Diversified Builder
GREEN BRICK IS A DIVERSIFIED BUILDER Home Closings Revenue Growth Revenue in Millions, ASP in Thousands Townhome Single-Family Total $300 $350 $600 $571.2 $250 $300 $500 $255.3 $315.9 $250 $200 $400 $435.6 $202.7 $232.9 $226.1 $200 $365.2 $150 $300 $139.1 $150 $100 $200 $100 $50 $100 $50 +46% YOY +2
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% +12% YOY 30% 30% 15% +18% Y
Slide 13: Financial Highlights
FINANCIAL HIGHLIGHTS (Unaudited) Qtr over Qtr YOY Q4 2017 Q4 2018 2017 2018 Increase Increase Net New Home Orders 265 279 5.3% 1,063 1,397 31.4% New Homes Delivered 292 382 30.8% 990 1,287 30.0% Residential Units Revenue $134,509 $171,990 27.9% $439,520 $578,893 31.7% Total Revenues $137,424 $185,12
Slide 14: Financial Results Exceed Peer Small-Cap and Mid-Cap Builders
FINANCIAL RESULTS EXCEED PEER SMALL-CAP AND MID-CAP BUILDERS Green Brick KPI's vs Peer Median by Market Capitalization, LTM 1 2 3 GRBK Median Small Cap Median Mid Cap Median Large Cap 16.8% 15.0% 14.5% 13.1% 11.6% 11.7% 11.6% 11.2% 11.1% 9.2% 8.1% 7.3% 6.2% 5.0% Pretax Income % of Revenues Pre-Tax I
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 25.7% as of December 31, 2018 versus an average 39% for covered public builders Net Debt* to Total Capital Q4 2018 61.9% 55.9% 52.0% 43.0% 41.9% 41.6
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 Buil
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 (Unaudited, in thousands) Dec 31, 2018 Dec 31, 2017 Dec 31, 2018 Dec 31, 2017 Residential units revenue $171,990 $134,509 $578,893 $439,520 Less: Mechanic’s lien co
Slide 19: Non GAAP Reconciliation: Pre-tax Income and Invested Capital
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 12 Months Ended (Unaudited, in thousands) Dec 31, 2018 Dec 31, 2017 Dec 31, 2018 Dec 31, 2017 Net income (loss) attributable
Slide 20: Non GAAP Reconciliation: EBITDA
NON GAAP RECONCILIATION EBITDA 3 Months Ended 3 Months Ended 12 Months Ended 12 Months Ended (Unaudited, in thousands) Dec 31, 2018 Dec 31, 2017 Dec 31, 2018 Dec 31, 2017 Adjusted pre-tax income attributable to Green Brick $17,108 $17,161 $69,434 $53,866 Add back: Capitalized interest charged to cos
Slide 21: Non GAAP Reconciliation: Adjusted Net Income, EPS, and ROE
NON GAAP RECONCILIATION Adjusted net income, EPS, and ROE 3 Months Ended 3 Months Ended 12 Months Ended 12 Months Ended (Unaudited, in thousands) Dec 31, 2018 Dec 31, 2017 Dec 31, 2018 Dec 31, 2017 Net income (loss) attributable to Green Brick $13,354 ($8,195) $51,623 $14,970 Add back: Impairment of
Slide 22: Fourth Quarter Investor Call Presentation 2018
FOURTH QUARTER INVESTOR CALL PRESENTATION 2018 2805 Dallas Parkway, Suite 400 Plano, Texas 75093 | www.greenbrickpartners.com22