Green Brick Partners, Inc. · NYSE:GRBK
Green Brick Partners — Q2 2020 Earnings Presentation
21 slides from Green Brick Partners's earnings presentation, 2020
Slide 1: Second Quarter Investor Call Presentation 2020
Exhibit 99.2 SECOND 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 Financial Services Condominiums $380k - $580k Dallas, TX Townhomes $230k - $480k Consolid
Slide 5: Our Markets Remain Resilient Despite the Impact of COVID
OUR MARKETS REMAIN RESILIANT DESPITE THE IMPACT OF COVID Out of the Ten Largest MSAs, DFW and Atlanta ended the quarter with some of the lowest unemployment rates in the country Unemployment Rate by Top 10 Largest MSAs • Dallas and Atlanta saw reductions of 140k and 113k in unemployed June 2020 Unem
Slide 6: Current Market Indicators Show a Secular Change in Home Ownership
WE BELIEVE CURRENT MARKET INDICATORS SHOW A SECULAR CHANGE IN HOME OWNERSHIP National Home Ownership Participation Rate vs Home Ownership Rate for Adults Under 35 70.0% 52.0% 50.0% After August 2019 rate cut 69.0% by the Fed, we have 48.0% continued to see home 68.0% participation rates 46.0% accele
Slide 7: Green Brick Enters the Second Half of 2020 with Stronger Prospects
GREEN BRICK ENTERS THE SECOND HALF OF 2020 WITH STRONGER PROSPECTS Improving Market Conditions and Key Strategies Will Drive Future Success • Suburban Living: Growth in new home orders has been primarily focused on suburban areas, a key market for Green Brick.(1) We believe this growth can be attrib
Slide 8: Land Position
LAND POSITION Land is well positioned in attractive submarkets Atlanta Metro Area Dallas Metro Area Submarket Grades Most desirable Desirable area Median desirability More affordable Most affordable GRBK Locations Land position highlights 90 15 27* Active selling communities New selling communities
Slide 9: 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 six months ended June 30, 2020 versus an average 18.8% for covered public builders (Peer data based on most recent fil
Slide 10: 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 $300 $300 $450 $250 $250 $280.9 $375 $416.0 $200 $200 $300 $150 $150 $225 $264.2 $135.1 $135.0 $100 $129.2 $100 $150 $50 +5% $50 + 108% $75
Slide 11: 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 Year-to-Date GRBK Home Closings Revenue by Product Type YTD Q2 2018 Home Closings Revenue YTD Q2 2020 Home Closings Revenue Over the remainder
Slide 12: Financial Highlights
FINANCIAL HIGHLIGHTS (Unaudited) Q2 Q2 Qtr over Qtr YTD Q2 YTD Q2 YTD over (Dollars in Millions, Except EPS) Notes 2020 2019 Change 2020 2019 YTD Change New Homes Delivered 553 394 40.4% 1,001 762 31.4% We closed a record # of units for any quarter Net New Home Orders 582 453 28.5% 1,214 898 35.2% C
Slide 13: Green Brick Provides the Highest Risk-Adjusted Growth Among Peers
GREEN BRICK PROVIDES THE HIGHEST RISK-ADJUSTED GROWTH AMONG PEERS Based on our key performance indicators, we believe Green Brick has one of the best growth opportunity profiles among peers Growth in Homebuilding Pre-Tax Income Return to Rank(1) Builder Gross Margin % Interest Coverage Net Debt to C
Slide 14: Balance Sheet Strength
BALANCE SHEET STRENGTH Green Brick continues to maintain its position as one of the lowest leveraged public builders • GRBK Net Debt(1) to Capital is 23.7% as of June 30, 2020 versus an average 34.8% for covered public builders (Peer data based on most recent filings as of 8.4.2020). Net Debt(1) to
Slide 15: Appendix
APPENDIX BUILDING COMMUNITIES | DEVELOPING DREAMS 15
Slide 16: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Adjusted Homebuilding Gross Margin Reconciliation Three Months Ended Three Months Ended Six Months Ended Six Months Ended (Unaudited, in Thousands) June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Residential Units Revenue $228,667 $175,054 $419,854 $336,642 Less: Mech
Slide 17: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Adjusted GRBK Pre-tax Income, EBITDA, and Interest Coverage Ratio Three Months Ended Three Months Ended Six Months Ended Six Months Ended (Unaudited, in Thousands) June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Net Income Attributable to Green Brick $ 33,647 $ 14,460
Slide 18: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Adjusted GRBK Pre-tax Income as a Percentage of Total Revenues and GRBK Pre-tax Income Return on Average Invested Capital (Unaudited, in Thousands) Six Months Ended June 30, 2020 Net Income Attributable to Green Brick $ 49,564 Income Tax Expense Attributable to Green Brick 7,
Slide 19: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Reconciliation of Green Brick Basic EPS excluding Tax Credits Three Months Ended Three Months Ended Add Back: (Unaudited, in Thousands) June 30, 2020 June 30, 2020 Energy Tax Credits (Excluding Tax Credits) Income before Income Taxes $ 36,185 $ 36,185 Less: Income Tax Expense
Slide 20: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Supporting Calculations for Risk-Adjusted Growth Ranking on Slide 13 Growth in Gross Net Debt Rank Peer Homebuilding Rank Peer Rank Peer Revenues Margin % to Capital Pre-Tax Return Builder YOY Growth in Gross Rank Interest Net Debt on Average 1 LGIH 24.9% 1 LGIH 24.0% 1 MTH 2
Slide 21: Second Quarter Investor Call Presentation 2020
SECOND QUARTER INVESTOR CALL PRESENTATION 2020 2805 Dallas Parkway, Suite 400 Plano, Texas 75093 | www.greenbrickpartners.com BUILDING COMMUNITIES | DEVELOPING DREAMS