EXPANSION INTO HOUSTON, TEXAS
Q4 HOMEBUILDING GROSS MARGIN OF 31.4%, UP
520 BPS YOY
Q4 DILUTED EPS OF $1.58, UP 33.9%
YOY
RECORD HIGH FULL YEAR DILUTED EPS OF
$6.14
NET NEW HOME ORDERS UP 60.5% FOR THE QUARTER
AND 70.1% YOY
DEBT TO TOTAL CAPITAL OF 21.1%; NET DEBT TO
TOTAL CAPITAL OF 11.4%
Green Brick Partners, Inc. (NYSE: GRBK) (“we,” “Green Brick” or
the “Company”), today reported results for its fourth quarter ended
December 31, 2023.
Green Brick finished 2023 with a record $6.14 diluted EPS and
record total revenues of $1.8 billion.
“For the fourth quarter, we delivered a record 825 homes, an
increase of 13.5% due to shorter construction cycle times and
strong demand. Our industry leading homebuilding gross margin was
31.4% for the quarter and 30.9% for the year. As a result, diluted
EPS for the fourth quarter increased 34% year-over-year to $1.58
per share,” said Jim Brickman, CEO and Co-Founder.
“Dallas-Fort Worth and Atlanta, our two primary markets,
continue to rank very high among in-migration destination cities
and are among the largest housing markets in the nation. Demand in
these markets remained healthy throughout 2023, benefiting from
favorable demographic shifts and strong employment. We continue to
experience limited competition in our infill and infill-adjacent
locations from new home builders as well as existing homeowners due
to the ‘golden handcuffs’ of low-rate mortgages. As a result, our
net new orders for the full year grew 70.1% year-over-year to
3,356, a record number for the company.”
Mr. Brickman added, “During the fourth quarter, we started 948
homes, which tripled the pace of 4Q22. Our home starts for the last
nine months have now averaged almost 900 homes per quarter. At the
same time, our fourth quarter cycle times were 35% shorter
year-over-year. Our backlog of $555 million at the end of 2023
increased 50.4% year-over-year, which we believe provides us a
great platform to start 2024.
Our industry leading results would not have been possible
without a fantastic team effort combined with our financial
discipline and investment grade balance sheet. At the end of the
year, our net debt to total capital ratio was 11.4% and our total
debt to total capital ratio was only 21.1%, one of the lowest among
our public homebuilder peers. Our low leverage and cost of debt
have enabled us to retain more profits to fund our growth. Our
return on equity was 24.9% for the full year, which we believe
reflects the strategic advantages of our markets, our rigorous land
underwriting and continued success of our management and land
development teams. As we look ahead, we believe we are well
positioned to continue delivering one of the best risk-adjusted
returns on equity in the industry.”
Mr. Brickman concluded, “We are excited to announce that Green
Brick recently closed its first land acquisition in Houston, which
will be co-developed with one of the largest public homebuilders in
the country. Trophy will have 460 home sites in the community, and
we expect to start home construction in 2025. Houston, the fourth
most populous city in the U.S, continues to be one of the most
active homebuilding markets in the county. We believe Trophy is in
an excellent position to capture the demand for entry-level and
move-up homes with their value-rich products. As demonstrated with
Trophy’s meteoric growth in the Dallas-Fort Worth area the last
five years, we believe Trophy has scalability in the Houston market
as well.”
Results for the Quarter Ended December 31, 2023:
(Dollars in thousands, except per share
data)
Three Months Ended December
31,
2023
2022
Change
New homes delivered
825
727
13.5
%
Total revenues
$
450,382
$
431,089
4.5
%
Total cost of revenues
308,754
318,635
(3.1
)%
Total gross profit
$
141,628
$
112,454
25.9
%
Income before income taxes
$
101,843
$
77,954
30.6
%
Net income attributable to Green Brick
Partners, Inc.
$
73,020
$
55,547
31.5
%
Diluted net income attributable to Green
Brick Partners, Inc. per common share
$
1.58
$
1.18
33.9
%
Residential units revenue
$
448,525
$
430,026
4.3
%
Average sales price of homes delivered
$
543.5
$
589.5
(7.8
)%
Homebuilding gross margin percentage
31.4
%
26.2
%
520 bps
Backlog
$
555,200
$
369,095
$
186,105
Homes under construction
2,057
1,853
11.0
%
Results for the Year Ended December 31, 2023:
(Dollars in thousands, except per share
data)
Twelve Months Ended December
31,
2023
2022
Change
New homes delivered
3,123
2,916
7.1
%
Total revenues
$
1,777,710
$
1,757,793
1.1
%
Total cost of revenues
1,229,528
1,234,768
(0.4
)%
Total gross profit
$
548,182
$
523,025
4.8
%
Income before income taxes
$
391,313
$
396,465
(1.3
)%
Net income attributable to Green Brick
Partners, Inc.
$
284,626
$
291,900
(2.5
)%
Diluted net income attributable to Green
Brick Partners, Inc. per common share
$
6.14
$
6.02
2.0
%
Residential units revenue
$
1,769,255
$
1,703,951
3.8
%
Average sales price of homes delivered
$
566.1
$
581.9
(2.7
)%
Homebuilding gross margin percentage
30.9
%
29.8
%
110 bps
Selling, general and administrative
expenses as a percentage of residential units revenue
10.9
%
9.6
%
130 bps
Earnings Conference Call:
We will host our earnings conference call to discuss our fourth
quarter ended December 31, 2023 at 12:00 p.m. Eastern Time on
Friday, March 1, 2024. The call can be accessed by dialing
1-888-660-6353 for domestic participants or 1-929-203-2106 for
international participants and should reference meeting number
3162560. Participants may also join the call via webcast at:
https://events.q4inc.com/attendee/984972633
A telephone replay of the call will be available through March
31, 2024. To access the telephone replay, the domestic dial-in
number is 1-800-770-2030, the international dial-in number is
1-647-362-9199 and the access code is 3162560, or by using the link
at investors.greenbrickpartners.com.
GREEN BRICK PARTNERS,
INC.
CONSOLIDATED STATEMENTS OF
INCOME
(In thousands, except per
share data)
(Unaudited)
Three Months Ended December
31,
Twelve Months Ended December
31,
2023
2022
2023
2022
Residential units revenue
$
448,525
$
430,026
$
1,769,255
$
1,703,951
Land and lots revenue
1,857
1,063
8,455
53,842
Total revenues
450,382
431,089
1,777,710
1,757,793
Cost of residential units
307,479
317,806
1,223,079
1,196,914
Cost of land and lots
1,275
829
6,449
37,854
Total cost of revenues
308,754
318,635
1,229,528
1,234,768
Total gross profit
141,628
112,454
548,182
523,025
Selling, general and administrative
expenses
(50,919
)
(44,629
)
(192,977
)
(163,943
)
Equity in income of unconsolidated
entities
5,477
5,719
16,742
25,626
Other income, net
5,657
4,410
19,366
11,757
Income before income taxes
101,843
77,954
391,313
396,465
Income tax expense
21,484
16,790
84,638
82,468
Net income
80,359
61,164
306,675
313,997
Less: Net income attributable to
noncontrolling interests
7,339
5,617
22,049
22,097
Net income attributable to Green Brick
Partners, Inc.
$
73,020
$
55,547
$
284,626
$
291,900
Net income attributable to Green Brick
Partners, Inc. per common share:
Basic
$
1.60
$
1.19
$
6.20
$
6.07
Diluted
$
1.58
$
1.18
$
6.14
$
6.02
Weighted average common shares used in the
calculation of net income attributable to Green Brick Partners,
Inc. per common share:
Basic
45,160
45,994
45,446
47,648
Diluted
45,635
46,332
45,917
47,987
GREEN BRICK PARTNERS,
INC.
CONSOLIDATED BALANCE
SHEETS
(In thousands, except share
data)
December 31, 2023
December 31, 2022
ASSETS
Cash and cash equivalents
$
179,756
$
76,588
Restricted cash
19,703
16,682
Receivables
10,632
5,288
Inventory
1,533,223
1,422,680
Investments in unconsolidated entities
84,654
74,224
Right-of-use assets - operating leases
7,255
3,458
Property and equipment, net
7,054
2,919
Earnest money deposits
16,619
23,910
Deferred income tax assets, net
15,306
16,448
Intangible assets, net
367
452
Goodwill
680
680
Other assets
27,583
12,346
Total assets
$
1,902,832
$
1,655,675
LIABILITIES AND EQUITY
Liabilities:
Accounts payable
$
54,321
$
51,804
Accrued expenses
96,457
91,281
Customer and builder deposits
43,148
29,112
Lease liabilities - operating leases
7,898
3,582
Borrowings on lines of credit, net
(2,328
)
17,395
Senior unsecured notes, net
336,207
335,825
Notes payable
12,981
14,622
Total liabilities
548,684
543,621
Commitments and contingencies
Redeemable noncontrolling interest in
equity of consolidated subsidiary
36,135
29,239
Equity:
Green Brick Partners, Inc. stockholders’
equity
Preferred stock, $0.01 par value:
5,000,000 shares authorized; 2,000 issued and outstanding as of
December 31, 2023 and December 31, 2022, respectively
47,603
47,696
Common stock, $0.01 par value: 100,000,000
shares authorized; 45,005,175 issued and outstanding as of December
31, 2023 and 46,032,930 issued and outstanding as of December 31,
2022, respectively
450
460
Additional paid-in capital
255,614
259,410
Retained earnings
997,037
754,341
Total Green Brick Partners, Inc.
stockholders’ equity
1,300,704
1,061,907
Noncontrolling interests
17,309
20,908
Total equity
1,318,013
1,082,815
Total liabilities and equity
$
1,902,832
$
1,655,675
GREEN BRICK PARTNERS,
INC.
SUPPLEMENTAL
INFORMATION
(Unaudited)
Residential Units Revenue and New Homes
Delivered (dollars in thousands)
Three Months Ended December
31,
Twelve Months Ended December
31,
2023
2022
Change
%
2023
2022
Change
%
Home closings revenue
$
448,395
$
428,582
$
19,813
4.6
%
$
1,767,788
$
1,696,911
$
70,877
4.2
%
Mechanic’s lien contracts revenue
130
1,444
(1,314
)
(91.0
)%
1,467
7,040
(5,573
)
(79.2
)%
Residential units revenue
$
448,525
$
430,026
$
18,499
4.3
%
$
1,769,255
$
1,703,951
$
65,304
3.8
%
New homes delivered
825
727
98
13.5
%
3,123
2,916
207
7.1
%
Average sales price of homes delivered
$
543.5
$
589.5
$
(46.0
)
(7.8
)%
$
566.1
$
581.9
$
(15.8
)
(2.7
)%
Land and Lots Revenue
(dollars in thousands)
Three Months Ended December
31,
Twelve Months Ended December
31,
2023
2022
Change
%
2023
2022
Change
%
Lots revenue
$
1,857
$
1,063
$
794
74.7
%
$
7,426
$
19,090
$
(11,664
)
(61.1
)%
Land revenue
—
—
—
0.0
%
1,029
34,752
(33,723
)
(97.0
)%
Land and lots revenue
$
1,857
$
1,063
$
794
74.7
%
$
8,455
$
53,842
$
(45,387
)
(84.3
)%
Lots closed
18
14
4
28.6
%
73
288
(215
)
(74.7
)%
Average sales price of lots closed
$
103.2
$
75.9
$
27.3
36.0
%
$
101.7
$
66.3
$
35.4
53.4
%
New Home Orders and Backlog
(dollars in thousands)
Three Months Ended December
31,
Twelve Months Ended December
31,
2023
2022
Change
%
2023
2022
Change
%
Net new home orders
679
423
256
60.5
%
3,356
1,973
1,383
70.1
%
Revenue from net new home orders
$
381,044
$
247,818
$
133,226
53.8
%
$
1,953,903
$
1,210,315
$
743,588
61.4
%
Average selling price of net new home
orders
$
561.2
$
585.9
$
(24.7
)
(4.2
)%
$
582.2
$
613.4
$
(31.2
)
(5.1
)%
Cancellation rate
7.2
%
20.3
%
(13.1
)%
(64.5
)%
6.6
%
13.8
%
(7.2
)%
(52.2
)%
Absorption rate per average active selling
community per quarter
7.6
5.5
2.1
38.2
%
9.9
6.5
3.4
52.3
%
Average active selling communities
89
77
12
15.6
%
85
76
9
11.8
%
Active selling communities at end of
period
91
80
11
13.8
%
Backlog
$
555,200
$
369,095
$
186,105
50.4
%
Backlog units
770
537
233
43.4
%
Average sales price of backlog
$
721.0
$
687.3
$
33.7
4.9
%
GREEN BRICK PARTNERS,
INC.
SUPPLEMENTAL
INFORMATION
(Unaudited)
December 31, 2023
December 31, 2022
Central
Southeast
Total
Central
Southeast
Total
Lots
owned
Finished lots
4,014
964
4,978
1,901
998
2,899
Lots in communities under development
9,122
1,335
10,457
10,309
1,698
12,007
Land held for future development(1)
8,366
—
8,366
6,575
—
6,575
Total lots owned
21,502
2,299
23,801
18,785
2,696
21,481
Lots
controlled
Lots under option contracts
1,169
—
1,169
2,212
6
2,218
Land under option for future
development
1,710
460
2,170
110
18
128
Lots under option through unconsolidated
development joint ventures
1,210
331
1,541
1,289
411
1,700
Total lots controlled
4,089
791
4,880
3,611
435
4,046
Total lots owned and controlled (2)
25,591
3,090
28,681
22,396
3,131
25,527
Percentage of lots owned
84.0
%
74.4
%
83.0
%
83.9
%
86.1
%
84.2
%
_________________
(1) Land held for future development
consists of raw land parcels where development activities have been
postponed due to market conditions or other factors.
(2) Total lots excludes lots with homes
under construction.
The following table presents additional information on the lots
we owned as of December 31, 2023 and December 31, 2022.
December 31, 2023
December 31, 2022
Total lots owned(1)
23,801
21,481
Add certain lots included in Total Lots
Controlled
Land under option for future acquisition
and development
2,170
128
Lots under option through unconsolidated
development joint ventures
1,541
1,700
Total lots self-developed
27,512
23,309
Self-developed lots as a percentage of
total lots owned and controlled(1)
95.9
%
91.3
%
_________________
(1) Total lots owned includes finished lot
purchases, which were less than 3.2% of total lots self-developed
as of December 31, 2023.
Non-GAAP Financial Measures
In this press release, we utilize certain financial measures
that are non-GAAP financial measures as defined by the Securities
and Exchange Commission. We present these measures because we
believe they and similar measures are useful to management and
investors in evaluating our operating performance and financing
structure. We also believe these measures facilitate the comparison
of our operating performance and financing structure with other
companies in our industry. Because these measures are not
calculated in accordance with U.S. Generally Accepted Accounting
Principles (“GAAP”), they may not be comparable to other similarly
titled measures of other companies and should not be considered in
isolation or as a substitute for, or superior to, financial
measures prepared in accordance with GAAP.
The following table represents the non-GAAP measure of adjusted
homebuilding gross margin for the three and twelve months ended
December 31, 2023 and 2022 and reconciles these amounts to
homebuilding gross margin, the most directly comparable GAAP
measure.
(Unaudited, in thousands):
Three Months Ended December
31,
Twelve Months Ended December
31,
2023
2022
2023
2022
Residential units revenue
$
448,525
$
430,026
$
1,769,255
$
1,703,951
Less: Mechanic’s lien contracts
revenue
(130
)
(1,444
)
(1,467
)
(7,040
)
Home closings revenue
$
448,395
$
428,582
$
1,767,788
$
1,696,911
Homebuilding gross margin
$
141,010
$
112,189
$
545,654
$
506,129
Homebuilding gross margin percentage
31.4
%
26.2
%
30.9
%
29.8
%
Homebuilding gross margin
141,010
112,189
545,654
506,129
Add back: Capitalized interest charged to
cost of revenues
2,740
3,141
13,196
13,444
Add back: Land impairment charge
$
—
$
6,020
$
—
$
6,020
Adjusted homebuilding gross margin
$
143,750
$
121,350
$
558,850
$
525,593
Adjusted homebuilding gross margin
percentage
32.1
%
28.3
%
31.6
%
31.0
%
Net debt to total capitalization is calculated as the total debt
less cash and cash equivalents, divided by the sum of total Green
Brick Partners, Inc. stockholders’ equity and total debt less cash
and cash equivalents. The closest GAAP financial measure to the net
debt to total capitalization ratio is the debt to total
capitalization ratio. The following table represents a
reconciliation of the net debt to total capitalization ratio as of
December 31, 2023:
Gross
Cash and cash
equivalents
Net
Total debt, net of debt issuance costs
$
346,860
$
(179,756
)
$
167,104
Total Green Brick Partners, Inc.
stockholders’ equity
1,300,704
—
1,300,704
Total capitalization
$
1,647,564
$
(179,756
)
$
1,467,808
Debt to total capitalization ratio
21.1
%
—
%
—
%
Net debt to total capitalization ratio
—
%
—
%
11.4
%
About Green Brick Partners, Inc.
Green Brick Partners, Inc (NYSE: GRBK), the third largest
homebuilder in Dallas-Fort Worth, is a diversified homebuilding and
land development company that operates in Texas, Georgia, and
Florida. Green Brick owns five subsidiary homebuilders in Texas (CB
JENI Homes, Normandy Homes, Southgate Homes, Trophy Signature
Homes, and a 90% interest in Centre Living Homes), as well as a
controlling interest in a homebuilder in Atlanta, Georgia (The
Providence Group) and an 80% interest in a homebuilder in Port St.
Lucie, Florida (GHO Homes). Green Brick also retains interests in
related financial services platforms, including Green Brick Title
and BHome Mortgage. The Company is engaged in all aspects of the
homebuilding process, including land acquisition and development,
entitlements, design, construction, marketing, and sales for its
residential neighborhoods and master-planned communities. For more
information about Green Brick Partners Inc.’s subsidiary
homebuilders, please visit
https://greenbrickpartners.com/brands-services/.
Forward-Looking and Cautionary Statements:
This press release 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 expressions concerning
matters that are not historical facts and typically include the
words “anticipate,” “believe,” “consider,” “estimate,” “expect,”
“feel,” “intend,” “plan,” “predict,” “seek,” “strategy,” “target,”
“will” or other words of similar meaning. Forward-looking
statements in this press release and in our earnings call include
statements regarding (i) our position to succeed in the current
environment, including our ability to maintain industry-leading
performance and margins; (ii) our strategies to capitalize on
market opportunities, including our advantages to do so and the
impact to our results; (iii) our expectations regarding trends in
our markets, such as demographic trends and demand for
single-family homes; (iv) our beliefs regarding returns on capital
and position amongst market peers; (v) the use of proceeds for
investments and potential opportunities, including expectations for
performance in markets we invest in; (vi) our priorities and
strategies for growth, the drivers of that growth, and the impact
on our future results, including in the Austin market expansion of
our Trophy brand, and potential new, related business; (vii) our
expectations for our expansion into the Houston market, including
the opportunities and positioning of our Trophy brand for growth
and ability to capitalize on such opportunities; (viii) our capital
resources and flexibility to capitalize on market opportunities and
the impact on our financial and operational performance; (ix) the
advantages of our lot and land strategies and locations, including
the benefits to our returns, margins and ability to scale; (x) our
expectations for our investments in land, lots and development in
2024, and the impact on our growth; (xi) our beliefs regarding our
infill and infill-adjacent locations, including competition and the
impact to our results; (xii) our expectations for growth of our
Trophy brand and the drivers of that growth; (xiii) our beliefs
that we operate in the most advantageous markets in the U.S.; (xiv)
our beliefs regarding our financial and operational strengths and
the benefits to returns on equity; and (xv) our beliefs regarding
our position and ability to scale, including our ability to manage
costs and cycle times.
These forward-looking statements reflect our current views about
future events and involve estimates and assumptions which may be
affected by risks and uncertainties in our business, as well as
other external factors, which could cause future results to
materially differ from those expressed or implied in any
forward-looking statement. These risks include, but are not limited
to: (1) changes in macroeconomic conditions, including increased
interest rates and inflation that could adversely impact demand for
new homes or the ability of potential buyers to qualify; (2)
general economic conditions, seasonality, cyclicality and
competition in the homebuilding industry; (3) shortages, delays or
increased costs of raw materials and increased demand for
materials, or increases in other operating costs, including costs
related to labor, real estate taxes and insurance, which in each
case exceed our ability to increase prices; (4) a shortage of
qualified labor; (5) an inability to acquire land in our current
and new markets at anticipated prices or difficulty in obtaining
land-use entitlements; (6) our inability to successfully execute
our strategies, including an inability to grow our operations or
expand our Trophy brand; (7) our inability to implement new
strategic investments; (8) a failure to recruit, retain or develop
highly skilled and competent employees; (9) government regulation
risks in the industries or markets we operate in; (10) a lack of
availability or volatility of mortgage financing for homebuyers;
(11) severe weather events or natural disasters; (12) difficulty in
obtaining sufficient capital to fund our growth; (13) our ability
to meet our debt service obligations; (14) a decline in the value
of our inventories and resulting write-downs of the carrying value
of our real estate assets, and (15) changes in accounting standards
that adversely affect our reported earnings or financial condition.
Green Brick assumes no obligation to update any forward-looking
statements, which speak only as of the date they are made. For a
more detailed discussion of these and other risks and uncertainties
applicable to Green Brick please see our most recent Annual Report
on Form 10-K filed with the Securities and Exchange Commission.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240229983950/en/
Benting Hu Vice President of Finance 469-573-6755
IR@greenbrickpartners.com
Green Brick Partners (NYSE:GRBK)
Historical Stock Chart
Von Mai 2024 bis Jun 2024
Green Brick Partners (NYSE:GRBK)
Historical Stock Chart
Von Jun 2023 bis Jun 2024