Green Brick Partners, Inc. · NYSE:GRBK
Green Brick Partners — Q3 2020 Earnings Presentation
23 slides from Green Brick Partners's earnings presentation, 2020
Slide 1: Third Quarter Investor Call Presentation 2020
THIRD 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 Chief Operating Officer and Executive VP • Over 40 years in real estate development • Over 27 years of financial and operating • Over 19 years of land development and and homebuilding. experie
Slide 4: Green Brick is a diversified builder with brands in major markets
GREEN BRICK IS A DIVERSIFIED BUILDER WITH 8 BRANDS IN 4 MAJOR MARKETS YTD 2020 Team Builders Market Products Offered Range of Ownership Closing Prices Dallas, TX Single Family $204k - $548k 100% Dallas, TX Townhomes $223k - $499k 100% Financial Services Dallas, TX Single Family $320k - $722k 100% 49
Slide 5: Recent News
RECENT NEWS Green Brick Partners is featured in Fortune Magazine’s 100 Fastest Growing Companies in the world list for the second year in a row • Green Brick Partners climbed 38 spots to finish in 55th place on Fortune Magazine’s 100 Fastest Growing Companies list, and was one of only four homebuild
Slide 6: Our markets remain resilient despite the impact of COVID-19
OUR MARKETS REMAIN RESILIANT DESPITE THE IMPACT OF COVID-19 Out of the Ten Largest MSAs, DFW and Atlanta ended the quarter with the lowest unemployment rates in the country Unemployment Rate by Top 10 Largest MSAs August 2020 Unemployment Rate 16.00% • Dallas and Atlanta saw 605k and 220k jobs added
Slide 7: Home ownership rate continues above 67%, indicating sustained secular change
HOME OWNERSHIP RATE CONTINUES ABOVE 67%, INDICATING SUSTAINED SECULAR CHANGE National Home Ownership Participation Rate vs Home Ownership Rate for Adults Under 35 70.0% 52.0% 69.0% 50.0% 48.0% 68.0% 46.0% 67.0% Under 35 Ownership Rate National Ownership Rate 44.0% 66.0% 42.0% 65.0% 40.0% After Augus
Slide 8: Growth Drivers
GROWTH DRIVERS Green Brick continues to demonstrate industry-leading growth with industry-low financial leverage Total Revenue ($ in Millions) Backlog ($ in Millions) Lots Owned and Controlled $1,000 $600 12,500 $952.0 $553.1 10,000 12,066 $750 $450 7,500 $500 $576.0 $300 8,101 $309.0 5,000 $250 $15
Slide 9: Sustained growth through prudent land development
SUSTAINED GROWTH THROUGH PRUDENT LAND DEVELOPMENT We have the strong balance sheet and operational excellence for continued growth LTM Total Revenue and End of Period Lot Supply for Green Brick Partners* September 2020 1,000,000 12500 800,000 10000 6,631 600,000 6,419 7500 Dollars ($) Lots 6,235 400
Slide 10: With total lots up 31.5% sequentially, we have a clear pathway for growth
WITH TOTAL LOTS UP 31.5% SEQUENTIALLY, WE HAVE A CLEAR PATHWAY FOR GROWTH Green Brick’s capacity to acquire and entitle land is critical to meet growing buyer demand • During Q3 2020, Green Brick added roughly 3,600 lots owned and controlled at 16 different communities across Dallas and Atlanta. Thi
Slide 11: Expansion of Trophy Signature Homes remains key growth driver
EXPANSION OF TROPHY SIGNATURE HOMES REMAINS KEY GROWTH DRIVER Growing from 7 to 20 selling communities over the past 12 months, Trophy brand has significantly expanded in the DFW market • Trophy opened 12 new selling communities during Q3 2020. Painted Tree McKinney, TX • Trophy’s value-oriented app
Slide 12: 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 100 22* 3,470 Active selling communities Communities Lots as
Slide 13: 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 23.8% for the nine months ended September 30, 2020 versus an average 19.2% for covered public builders (Peer data based on most rece
Slide 14: 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 Q3 2018 Home Closings Revenue YTD Q3 2020 Home Closings Revenue 13% 10% 9% 8% 4% 5
Slide 15: Financial Highlights
FINANCIAL HIGHLIGHTS (Unaudited) Q3 Q3 Qtr over Qtr YTD Q3 YTD Q3 YTD over (Dollars in Millions, Except EPS) Notes 2020 2019 Change 2020 2019 YTD Change New Homes Delivered 622 443 40.4% 1,623 1,205 34.7% We closed a record # of units for any quarter. Net New Home Orders 823 436 88.8% 2,037 1,334 52
Slide 16: 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 Debt to Capit
Slide 17: Balance Sheet Strength
BALANCE SHEET STRENGTH Green Brick continues to maintain its position as one of the lowest leveraged public builders • GRBK Debt to Capital is 25.3% as of September 30, 2020 versus an average 38.5% for covered public builders (Peer data based on most recent filings as of 10.29.2020). Debt to Total C
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 Nine Months Ended Nine Months Ended (Unaudited, in Thousands) September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 Residential Units Revenue $263,855 $199,918 $683,7
Slide 20: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Adjusted GRBK Pre-tax Income, EBITDA, and Interest Coverage Ratio Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended (Unaudited, in Thousands) September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 Net Income Attributable to Green B
Slide 21: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION GRBK Pre-tax Income Return on Average Invested Capital (Unaudited, in Thousands) Nine Months Ended September 30, 2020 Net Income Attributable to Green Brick $ 84,383 Income Tax Expense Attributable to Green Brick 17,354 Adjusted Pre-tax Income Attributable to Green Brick $ 10
Slide 22: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Supporting Calculations for Risk-Adjusted Growth Ranking on Slide 16 Growth in Gross Net Debt Rank Peer Homebuilding Rank Peer Rank Peer Margin % to Capital Pre-Tax Return Revenues Builder YOY Growth in Gross Rank Interest Debt to on Average 1 GRBK 27.4% 1 GRBK 23.8% 1 GRBK 2
Slide 23: Third Quarter Investor Call Presentation 2020
THIRD QUARTER INVESTOR CALL PRESENTATION 2020 2805 Dallas Parkway, Suite 400 Plano, Texas 75093 | www.greenbrickpartners.com BUILDING COMMUNITIES | DEVELOPING DREAMS