Green Brick Partners, Inc. · NYSE:GRBK
Green Brick Partners — Q4 2019 Earnings Presentation
22 slides from Green Brick Partners's earnings presentation, March 2020
Slide 1: Fourth Quarter Investor Call Presentation 2019
The Providence Group Exhibit Pratt Stacks | 99.2 Atlanta, GA FOURTH QUARTER INVESTOR CALL PRESENTATION 2019 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 Condominiums $380k - $580k Financial Services Dallas, TX Townhomes $230k - $480k Consolid
Slide 5: Market Update – Job Growth
MARKET UPDATE – JOB GROWTH National Economic Overview Top Job Growth Markets Ranked by Change in Employment, TTM December 2019 Rank MSA Employment Growth Growth % 1 Dallas-Fort Worth-Arlington, TX 3,886,800 127,600 3.4% 2 New York-Newark-Jersey City, NY-NJ-PA 10,083,000 97,300 1.0% 3 Los Angeles-Lon
Slide 6: Market Update - Starts
MARKET UPDATE - STARTS We are 2% to 5% of the starts in three of the largest housing markets in the U.S., giving us significant opportunity for growth National Housing Market Annual Starts by Market – TTM December 2019 40,000 35,000 34,718 30,000 30,547 25,000 26,632 25,877 24,416 20,000 18,905 19,2
Slide 7: Land Position
LAND POSITION Land is well positioned in attractive submarkets Atlanta Metro Area Dallas Metro Area GRBK Locations Submarket Grades Most desirable Desirable area Median desirability More affordable Most affordable Land position highlights 95 37* Active selling communities Communities as of 12.31.19
Slide 8: Sustained Growth Through Prudent Land Development
SUSTAINED GROWTH THROUGH PRUDENT LAND DEVELOPMENT We have the strong balance sheet and operational excellence for continued growth LTM Total Revenues and End of Period Lot Supply for Green Brick Partners* December 2019 9,500 800,000 8,500 700,000 7,500 6,419 600,000 6,500 500,000 6,235 5,500 Dollars
Slide 9: Growth Drivers
GROWTH DRIVERS Green Brick continues to demonstrate industry-leading growth with industry-low financial leverage Total Revenues ($ in Millions) Backlog ($ in Millions) Lots Owned and Controlled $1,000 $400 10000 $350 $800 $300 $346.8 8000 8,976 $600 $791.7 $250 6000 $200 6,219 $400 $150 4000 $458.2
Slide 10: Green Brick Is a Diversified Builder
GREEN BRICK IS A DIVERSIFIED BUILDER Rapidly expanding into entry-level and first-time move-up homes with over 2,000 acquired homesites for Trophy Signature Homes Home Closings Revenue Revenue in Millions, ASP in Thousands Townhomes, Condominium, Single-Family Total and Attached Homes $500 $500 $800
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 LTM GRBK Home Closings Revenue by Product Type LTM 12.31.17 Home Closings Revenue LTM 12.31.19 Home Closings Revenue 2% 5% 15% 13% 19% 73% 46%
Slide 12: Green Brick Recent News
GREEN BRICK RECENT NEWS Recent Developments and Press Releases September 2019 • Green Brick Partners makes Fortune's list of 100 Fastest Growing Companies in the world. • Appen Media Group awards Best Home Builder to The Providence Group of Georgia. $610.0 $462.6 October 2019 $391.9 • GHO Homes clos
Slide 13: Financial Highlights
FINANCIAL HIGHLIGHTS (Unaudited) Qtr over Qtr Yr over Yr (Dollars in Millions, Except EPS) Q4 2019 Q4 2018 2019 YTD 2018 YTD Notes Change Change New Homes Delivered 514 382 34.6% 1,719 1,287 33.6% Sustained 30%+ growth for quarterly and annual results Unprecedented order growth which more than doubl
Slide 14: Pre-Tax Results Exceed Peer Small-Cap and Mid-Cap Builders
PRE-TAX RESULTS EXCEED PEER SMALL-CAP AND MID-CAP BUILDERS Green Brick achieves a return on invested capital that exceeds our peers Green Brick Q4 2019 KPIs vs Peer Median by Market Capitalization, Last Twelve Months 1 2 15.0% GRBK Average Small Cap Average Mid Cap 12.5% 11.8% 10.0% 11.0% 10.9% 9.9%
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 28.1% as December 31, 2019 versus an average 37.6% for covered public builders (Peer data based on most recent filings as of 2.28.20) Net Debt* to To
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 up to 35%. Consolidated debt is priced significantly less than most small-cap peers and mid-cap peers. • Scale our SG&A le
Slide 17: Appendix
APPENDIX BUILDING COMMUNITIES | DEVELOPING DREAMS 17
Slide 18: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Adjusted Homebuilding Gross Margin Reconciliation Three Months Ended Three Months Ended Twelve Months Ended Twelve Months Ended Twelve Months Ended (Unaudited, in Thousands) December 31, 2019 December 31, 2018 December 31, 2019 December 31, 2018 December 31, 2017 Residential
Slide 19: 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 Three Months Ended Three Months Ended Twelve Months Ended Twelve Months Ended (Unaudited, in Thousands) December 31, 2019 December 31, 2018 December 31, 2
Slide 20: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION EBITDA Three Months Ended Three Months Ended Twelve Months Ended Twelve Months Ended (Unaudited, in Thousands) December 31, 2019 December 31, 2018 December 31, 2019 December 31, 2018 Adjusted Pre-tax Income Attributable to Green Brick $20,879 $17,108 $78,368 $69,434 Add Back:
Slide 21: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Net Income Return on Average Equity Three Months Ended Three Months Ended Twelve Months Ended Twelve Months Ended (Unaudited, in Thousands) December 31, 2019 December 31, 2018 December 31, 2019 December 31, 2018 Net Income Attributable to Green Brick $ 15,920 $ 13,354 $ 58,65
Slide 22: Fourth Quarter Investor Call Presentation 2019
Southgate Homes Edgewood | Frisco, TX FOURTH QUARTER INVESTOR CALL PRESENTATION 2019 2805 Dallas Parkway, Suite 400 Plano, Texas 75093 | www.greenbrickpartners.com BUILDING COMMUNITIES | DEVELOPING DREAMS