Green Brick Partners, Inc. · NYSE:GRBK
Green Brick Partners — Conference Presentation (November 2017)
23 slides from Green Brick Partners's conference presentation, Nov 13, 2017
Slide 1: Green Brick Partners Investor Conference Presentation November 2017
GREEN BRICK PARTNERS INVESTOR CONFERENCE PRESENTATION NOVEMBER 2017
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 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. R
Slide 4: Green Brick at a Glance
GREEN BRICK AT A GLANCE • Uniquely structured residential land development and homebuilding company Controlled Builders • We build and deliver homes through our controlled builders in which we own a 50%controlling interest as well as our investmentin unconsolidated builder partners • We sell lots an
Slide 5: GRBK: A True Growth Story
GRBK: A TRUE GROWTH STORY We have the strong balance sheet and operational excellence for continued growth Company records; 2017 is Last TwelveMonths as of 9.30.17 5
Slide 6: Business Model
BUSINESS MODEL • Uniquely structured business model that maximizes profitability and returns • Three complementary revenue streams • Preserves upside and limits downside • Controlled ownership of local builders with strong local management teams Sale of Land to Controlled Builders Sale of Homes 6
Slide 7: Corporate Structure
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% 49.99% 100% 7
Slide 8: Management Team
MANAGEMENT TEAM • Our management team is comprised of building and finance veterans with decades of experience in our core markets and expertise in capital allocation, land acquisition, entitlement, development, construction, marketing andhome sales • Strong institutional partnership with Greenlight
Slide 9: Balance Sheet Strength
BALANCE SHEET STRENGTH GRBK has one of the lowest debt-to-capital ratios amongst public builders • GRBK net debt to capital is about 17% versus an average 40% for covered public builders • GRBK’s eventual target is approximately 35% Net Debt to Total Capital Q3 2017 Citi Research data for comparativ
Slide 10: Financial Highlights
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 23
Slide 11: Operational Highlights
OPERATIONAL HIGHLIGHTS LTM Adjusted Gross Margins LTM Home Building Revenues (in millions) 11
Slide 12: Market Update: Housing Market Under Supplied
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. 12
Slide 13: Market Update: Housing Starts and Job Growth
MARKET UPDATE Housing starts are highly correlated to jobs and we build in two of the highest job growth markets National Economic Overview Top Job Growth Markets Ranked by Change in Employment - August 2017 Source: Metrostudy - MetroUSA 13
Slide 14: Market Update: Less Than 2.0% of Starts
MARKET UPDATE We are less than 2.0% of the starts in two of the largest housing markets, giving us significant opportunity for growth National Economic Overview Top Metrostudy CBSAs - Ranked by Annual Starts GRBK has also entered the Colorado Springsmarket (see #6) through our investment in Challeng
Slide 15: Market Update: Dallas Market Expansion
MARKET UPDATE Dallas market continues 6-year expansion but is still well below prior peak Dallas/Fort Worth Market SFD-TH - Starts and closings 45,000 Annual Starts Annual Closings 40,000 35,000 31,911 30,000 30,496 25,000 20,000 15,000 10,000 5,000 Source: Metrostudy - MetroUSA - 3Q07 3Q08 3Q09 3Q1
Slide 16: Market Update: Dallas Lot Inventory
MARKET UPDATE GRBK has almost 4,100 lots in Dallas where the market continues its 7-year trend of constrained supply Dallas/Fort Worth Market Lot Inventory 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 3Q07 3Q08 3Q09 3Q10 3Q11 3Q12 3Q13 Vacant Developed Lots 80.0 Annual St
Slide 17: Market Update: Atlanta Market Expansion
MARKET UPDATE The Atlanta market also continues to expand but is still well below prior peak Atlanta Region 16-Year Historic Annual Construction Starts and Closings 2Q06 Peaked 72% of activity is in North Atlanta where GRBK builds. 23,484 +10% 21,745+10% Source: Metrostudy - MetroUSA 17
Slide 18: Introduction to Challenger Homes
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 andthe Pikes Peak Region: • In January 2017, Forbes declared the
Slide 19: Key Investment Highlights
KEY INVESTMENT HIGHLIGHTS ✓ Experienced management team with strong institutional sponsorship ✓ Uniquely structured business model that maximizes profitability and returns✓ Focused, actionable and profitable operating strategy • Adjusted gross building margins LTM as of Sep 30 2017 of 23.0% (after c
Slide 20: Non-GAAP Reconciliation: Adjusted EPS
NON-GAAP RECONCILIATION Adjusted EPS Reconciliation Three Months Ended Nine Months Ended (Unaudited, in thousands, except per share amounts) Sept 30, 2017 Sept 30, 2017 Basic adjusted EPS Net income attributable to Green Brick - basic $9,280 $23,165 Income tax provision attributable to Green Brick $
Slide 21: Non-GAAP Reconciliation: Adjusted Homebuilding Gross Margin
NON-GAAP RECONCILIATION Adjusted Homebuilding Gross Margin Reconciliation 12 Months 12 Months 12 Months 12 Months 12 Months Ended Ended Ended Ended Ended (Unaudited, in thousands) Sep 30, 2016 Dec 31, 2016 Mar 31, 2017 June 30, 2017 Sept 30, 2017 Sale of Residential UnitsHomebuilding gross margin Ad
Slide 22: Non-GAAP Reconciliation: EBIT
NON-GAAP RECONCILIATION EBIT Reconciliation 3 Months 9 Months 3 Months 9 Months Ended Ended Ended Ended (Unaudited, in thousands) Sep 30, 2016 Sep 30, 2016 Sep 30, 2017 Sep 30, 2017 Sale of Residential Units $87,827 $248,187 $108,437 $302,179 Net income attributable to Green Brick - basic $6,243 $16
Slide 23: 2805 North Dallas Parkway, Suite Plano, TX 75093 www.greenbrickpartners.com 23
2805 North Dallas Parkway, Suite 400 Plano, TX 75093 www.greenbrickpartners.com 23
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