Green Brick Partners, Inc. · NYSE:GRBK
Green Brick Partners — Q3 2017 Earnings Presentation
22 slides from Green Brick Partners's earnings presentation, Nov 6, 2017
Slide 1: Green Brick Partners Q3 2017 Investor Call Presentation
1 GREEN BRICK PARTNERS Q3 2017 INVESTOR CALL PRESENTATION NOVEMBER 6, 2017 Exhibit 99.2
Slide 2: Forward Looking Statements
2 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 suc
Slide 3: Management Presenters
3 MANAGEMENT PRESENTERS Jim Brickman Chief Executive Officer • Over 39 years in real estate development and homebuilding. • Co-founded JBGL with Greenlight Capital in 2008. JBGL was merged into Green Brick in 2014. • Previously served as Chairman and CEO of Princeton Homes and Princeton Realty Corp.
Slide 4: Market Update: The housing market is being under supplied
4 MARKET UPDATE The housing market is being under supplied • Demand is there; the new challenge is building new homes that buyers want in locations they can afford.
Slide 5: Market Update: Top Job Growth Markets
5 MARKET UPDATE National Economic Overview Top Job Growth Markets Ranked by Change in Employment – August 2017 Housing starts are highly correlated to jobs and we build in two of the highest job growth markets Source: Metrostudy - MetroUSA
Slide 6: Market Update: Top Metrostudy CBSAs by Annual Starts
6 MARKET UPDATE National Economic Overview Top Metrostudy CBSAs – Ranked by Annual Starts We are less than 2.0% of the starts in two of the largest housing markets, giving us significant opportunity for growth Source: Metrostudy - MetroUSA GRBK has also entered the Colorado Springs market (see #6) t
Slide 7: Market Update: Dallas/Fort Worth Market Starts and Closings
7 MARKET UPDATE Dallas/Fort Worth Market SFD-TH – Starts and closings Dallas market continues 6-year expansion but is still well below prior peak Source: Metrostudy - MetroUSA 31,911 30,496 - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 3Q07 3Q08 3Q09 3Q10 3Q11 3Q12 3Q13 3Q14 3Q15 3
Slide 8: Market Update: Dallas/Fort Worth Lot Inventory
8 MARKET UPDATE Dallas/Fort Worth Market Lot Inventory GRBK has almost 4,100 lots in Dallas where the market continues its 7-year trend of constrained supply Source: Metrostudy - MetroUSA 49,677 18.7 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,00
Slide 9: Market Update: Atlanta Market
9 MARKET UPDATE The Atlanta market also continues to expand but is still well below prior peak Source: Metrostudy - MetroUSA 23,484 +10% 21,745 +10% 72% of activity is in North Atlanta where GRBK builds. Atlanta Region 16-Year Historic Annual Construction Starts and Closings 2Q06 Peaked
Slide 10: Green Brick at a Glance
10 GREEN BRICK AT A GLANCE • Uniquely structured residential land development and homebuilding company • We build and deliver homes through our controlled builders in which we own a 50% controlling interest as well as our investment in unconsolidated builder partners • We sell lots and provide lot a
Slide 11: Introduction to Challenger Homes
11 INTRODUCTION TO CHALLENGER HOMES • On August 15, 2017, GRBK acquired a 49.9% ownership of Challenger Homes, effective August 1, 2017 • With this investment in an unconsolidated subsidiary, Green Brick has expanded into Colorado Springs and the Pikes Peak Region: • In January 2017, Forbes declared
Slide 12: Corporate Structure
12 CORPORATE STRUCTURE • We are a uniquely structured company that combines residential land development and homebuilding with strong sponsor ownership and controlling interests in our aligned homebuilders. 50%50%50%50% 100% 49.99%
Slide 13: Quarterly Spotlight: East of Main in Alpharetta, GA
13 QUARTERLY SPOTLIGHT East of Main in Alpharetta, GA – Blending Historic Preservation with the Needs of Modern Buyers • East of Main in Alpharetta, GA showcases why The Providence Group is the premier Atlanta builder developing high barrier-to-entry in-fill complex neighborhoods with a mix of townh
Slide 14: GRBK: A True Growth Story
14 GRBK: A TRUE GROWTH STORY We have the strong balance sheet and operational excellence for continued growth Company records; 2017 is Last Twelve Months as of 9.30.17
Slide 15: Balance Sheet Strength
15 BALANCE SHEET STRENGTH GRBK has one of the lowest debt-to-capital ratios amongst public builders Citi Research data for comparative companies is reported as of November 3, 2017; “Net Debt” equals Total Debt minus Cash Net Debt to Total Capital Q3 2017 • GRBK net debt to capital is about 17% versu
Slide 16: Financial Highlights
16 FINANCIAL HIGHLIGHTS Quarter over Quarter Year over Year Last 12 Months Q3 2016 Q3 2017 Increase YTD 2016 YTD 2017 Increase 9/30/16 9/30/17 Increase Net New Home Orders 204 241 18% 683 798 17% 835 995 19% Home Closings - Units 196 235 20% 569 698 23% 763 973 28% Home Closing Revenues $87.8 $108.4
Slide 17: Operational Highlights
17 OPERATIONAL HIGHLIGHTS LTM Adjusted Gross Margins LTM Home Building Revenues (in millions)
Slide 18: Key Takeaways
18 KEY TAKEAWAYS • Significant growth opportunities exist in Dallas, Atlanta and Colorado Springs ̶ three of the most attractive homebuilder markets in the U .S. • We have the four pillars to support significant growth: lot position, balance sheet, management team, and builders. • Proven success in
Slide 19: Non-GAAP Reconciliation: Adjusted EPS
19 NON-GAAP RECONCILIATION Adjusted EPS Reconciliation (Unaudited, in thousands, except per share amounts) Three Months Ended Sept 30, 2017 Nine Months Ended Sept 30, 2017 Basic adjusted EPS Net income attributable to Green Brick – basic $9,280 $23,165 Income tax provision attributable to Green Bric
Slide 20: Non-GAAP Reconciliation: Adjusted Homebuilding Gross Margin
20 NON-GAAP RECONCILIATION Adjusted Homebuilding Gross Margin Reconciliation (Unaudited, in thousands) 12 Months Ended Sep 30, 2016 12 Months Ended Dec 31, 2016 12 Months Ended Mar 31, 2017 12 Months Ended June 30, 2017 12 Months Ended Sept 30, 2017 Sale of Residential Units $323,259 $365,164 $391,9
Slide 21: Non-GAAP Reconciliation: EBIT
21 NON-GAAP RECONCILIATION EBIT Reconciliation (Unaudited, in thousands) 3 Months Ended Sep 30, 2016 9 Months Ended Sep 30, 2016 3 Months Ended Sep 30, 2017 9 Months Ended Sep 30, 2017 Sale of Residential Units $87,827 $248,187 $108,437 $302,179 Net income attributable to Green Brick – basic $6,243
Slide 22: 2805 North Dallas Parkway, Suite Plano, TX 75093 www.greenbrickpartners.com
22 2805 North Dallas Parkway, Suite 400 Plano, TX 75093 www.greenbrickpartners.com