Green Brick Partners, Inc. · NYSE:GRBK
Green Brick Partners — Q3 2019 Earnings Presentation
23 slides from Green Brick Partners's earnings presentation, Nov 7, 2019
Slide 1: Third Quarter Investor Call Presentation 2019
Trophy Signature Homes | Hollyhock, Frisco, TX Exhibit 99.2 Move-Up Series THIRD QUARTER INVESTOR CALL PRESENTATION 2019
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 Chief Executive Officer Chief Financial Officer President of Texas Region • Over 40 years in real estate development • Over 26 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 Brands in Major Markets
GREEN BRICK IS A DIVERSIFIED BUILDER WITH 8 BRANDS IN 4 MAJOR MARKETS Team Builders Market Products Offered Price Range Structure Townhomes $320k - $880k Atlanta, GA Single Family Consolidated(1) $340k - $840k Condominiums Financial Services Townhomes $240k - $430k Consolidated(1) / Dallas, TX Singl
Slide 5: Market Update – Job Growth
MARKET UPDATE – JOB GROWTH National Economic Overview Top Job Growth Markets Ranked by Change in Employment, TTM August 2019 Rank MSA Employment Growth Growth % 1 New York-Newark-Jersey City, NY-NJ-PA 9,938,000 134,200 1.4 % 2 Dallas-Fort Worth-Arlington, TX 3,810,900 115,800 3.1 % 3 Houston-The Woo
Slide 6: Market Update - Starts
MARKET UPDATE - STARTS We are 2% to 5% of the starts in three of the largest housing markets in the U.S., giving us significant opportunity for growth National Housing Market Annual Starts by Market – TTM September 2019 40,000 35,000 33,572 30,000 29,435 25,000 26,380 25,461 24,095 20,000 19,703 17,
Slide 7: Land Position
LAND POSITION Land is well positioned in attractive submarkets Atlanta Metro Area Dallas Metro Area Submarket Grades GRBK Locations Most desirable Desirable area Median desirability More affordable Most affordable Land position highlights 85 36* 92 Active selling communities Communities Projected ac
Slide 8: Sustained Growth Through Prudent Land Development
SUSTAINED GROWTH THROUGH PRUDENT LAND DEVELOPMENT We have the strong balance sheet and operational excellence for continued growth LTM Total Revenue and End of Period Lot Supply for Green Brick Partners* September 2019 800,000 10000 9000 700,000 8000 600,000 7000 500,000 6,414 6000 400,000 6,235 500
Slide 9: Growth Drivers
GROWTH DRIVERS Green Brick continues to demonstrate industry-leading growth with industry-low financial leverage Total Revenue ($ in Millions) Backlog ($ in Millions) Lots Owned and Controlled $800 $350 10000 $700 $300 $746.7 $319.7 8000 9,269 $600 $250 $500 $200 6000 $400 $150 $300 4000 $100 $200 +
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 1,600 newly acquired homesites for Trophy Signature Homes Home Closings Revenue Revenue in Millions, ASP in Thousands Townhomes, Condominium, Single-Family Total and Attached Homes $450 $45
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 Homebuilding Revenues by Product Type LTM 9.30.17 Homebuilding Revenues LTM 9.30.18 Homebuilding Revenues LTM 9.30.19 Homebuilding Re
Slide 12: Green Brick Recent News
GREEN BRICK RECENT NEWS Recent Developments and Press Releases June 2019 • The Providence Group of Georgia announces new 122-home community in Alpharetta, GA. • Green Brick Partners’ subsidiary, CB JENI Homes, announces Terraces of Las Colinas, a new 79-townhome community in Irving, TX. $610.0 $462.
Slide 13: Green Brick Closes $75 Million 4.00% Senior Unsecured Notes
GREEN BRICK CLOSES $75 MILLION 4.00% SENIOR UNSECURED NOTES Notes will fund future growth at long-term rates significantly lower than peers • On August 8, 2019, we closed a $75.0 million private placement of senior unsecured notes due in 2026 with Prudential Private Capital, one of the world’s large
Slide 14: Financial Highlights
FINANCIAL HIGHLIGHTS (Unaudited) Qtr over Qtr Yr over Yr (Dollars in Millions, Except EPS) Q3 2019 Q3 2018 2019 YTD 2018 YTD Notes Change Change New Homes Delivered 443 312 42.0% 1,205 905 33.1% record for any quarter Net New Home Orders 436 297 46.8% 1,334 1,118 19.3% Net Orders Per Community Per Q
Slide 15: 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 Q3 2019 KPIs vs Peer Median by Market Capitalization, Last Twelve Months 1 2 15.0% GRBK Median Small Cap Median Mid Cap 12.3% 11.6% 10.0% 10.6% 10.0% 9.2% 8
Slide 16: 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 28.5% as of September 30, 2019 versus an average 44.2% for covered public builders (Peer data as of 6.30.19) Net Debt* to Total Capital Q3 2019 70.0%
Slide 17: 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 18: Appendix
APPENDIX BUILDING COMMUNITIES | DEVELOPING DREAMS 18
Slide 19: Non-GAAP Reconciliation: Adjusted Homebuilding Gross Margin
NON-GAAP RECONCILIATION Adjusted Homebuilding Gross Margin Reconciliation Twelve Twelve Twelve Three Months Three Months Nine Months Nine Months Months Months Months (Unaudited, in Thousands) Ended Ended Ended Ended Ended Ended Ended September September September September September September Septem
Slide 20: Non-GAAP Reconciliation: Adjusted Pre-tax Income and Return on Invested Capital
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 Nine Months Ended Nine Months Ended Twelve Months Ended (Unaudited, in Thousands) September 30, 2019 September 30, 2
Slide 21: Non-GAAP Reconciliation: EBITDA
NON-GAAP RECONCILIATION EBITDA Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended (Unaudited, in Thousands) September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Adjusted Pre-tax Income Attributable to Green Brick $21,414 $16,943 $57,489 $52,326 Add Back:
Slide 22: Non-GAAP Reconciliation: Net Income Return on Average Equity
NON-GAAP RECONCILIATION Net Income Return on Average Equity Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended Twelve Months Ended (Unaudited, in Thousands) September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 September 30, 2019 Net Income Attributable t
Slide 23: Third Quarter Investor Call Presentation 2019
The Providence Group of Georgia| East of Main, Alpharetta, GA Award-Winning Luxury Single-Family and Townhomes THIRD QUARTER INVESTOR CALL PRESENTATION 2019 2805 Dallas Parkway, Suite 400 Plano, Texas 75093 | www.greenbrickpartners.com