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GREEN BRICK PARTNERS
Q1 2018 INVESTOR CALL PRESENTATION
MAY 7, 2018
E xhib it 99.2
GREEN BRICK PARTNERS Q1 2018 INVESTOR CALL PRESENTATION MAY 7, 2018 - - PowerPoint PPT Presentation
E xhib it 99.2 GREEN BRICK PARTNERS Q1 2018 INVESTOR CALL PRESENTATION MAY 7, 2018 1 FORWARD LOOKING STATEMENTS T his pre se nta tio n a nd the o ra l sta te me nts ma de b y re pre se nta tive s o f the Co mp a ny during the c o urse o f
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MAY 7, 2018
E xhib it 99.2
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T his pre se nta tio n a nd the o ra l sta te me nts ma de b y re pre se nta tive s o f the Co mp a ny during the c o urse o f this pre se nta tio n tha t a re no t histo ric a l fa c ts a re fo rwa rd-lo o king sta te me nts. T he se sta te me nts a re o fte n, b ut no t a lwa ys, ma d e thro ug h the use o f wo rds o r phra se s suc h a s “ma y,” “will,” “sho uld,” “c o uld,” “wo uld,” “pre dic ts,” “po te ntia l,” “c o ntinue ,” “e xpe c ts,” “a ntic ipa te s,” “future ,” “o utlo o k,” “stra te g y,” “po sitio ne d,” “inte nds,” “pla ns,” “b e lie ve s,” “pro je c ts,” “e stima te s” a nd simila r e xpre ssio ns, a s we ll a s sta te me nts in the future te nse . Altho ug h the Co mpa ny b e lie ve s tha t the a ssumptio ns unde rlying the se sta te me nts a re re a so na b le , individua ls c o nside ring suc h sta te me nts fo r a ny p urpo se a re c a utio ne d tha t suc h fo rwa rd- lo o king sta te me nts a re inhe re ntly unc e rtain a nd ne c e ssa rily invo lve risks tha t ma y a ffe c t the Co mpa ny’ s b usine ss pro spe c ts a nd pe rfo rma nc e , c a using a c tua l re sults to diffe r fro m tho se disc usse d during the pre se nta tio n, a nd a ny suc h diffe re nc e ma y b e ma te ria l. F a c to rs tha t c o uld c a use ac tua l re sults to diffe rfro m tho se a ntic ipa te d a re disc usse d in the Co mpa ny’ s a nnua l a nd q ua rte rly re po rts file d with the SE C. Any fo rwa rd-lo o king sta te me nts ma de a re sub je c t to risks a nd unc e rtaintie s, ma ny o f whic h a re b e yo nd ma na g e me nt’ s c o ntro l. T he se risks inc lude the risks de sc rib e d in the Co mp a ny’ s filing s with the SE
inc o rre c t, the Co mpa ny’ s a c tua l re sults a nd pla ns c o uld diffe r ma te ria lly fro m tho se e xpre sse d in a ny fo rwa rd-lo o king sta te me nts. Give n the se risks a nd unc e rtaintie s, yo u a re c autio ne d no t to pla c e undue re lia nc e o n suc h fo rwa rd-lo o king sta te me nts. T he se fo rwa rd-lo o king sta te me nts a re ma de o nly a s o f the da te he re o f. T he Co mpa ny unde rta ke s no o b lig a tio n to pub lic ly upda te a ny fo rwa rd-lo o king sta te me nts, whe the r a s a re sult o f ne w info rma tio n o r future e ve nts. T he Co mpa ny pre se nts Ba sic Adjuste d EPS, Dilute d Adjuste d EPS, Ba sic a nd Dilute d Adjuste d we ig hte d-a ve ra g e numb e r o f sha re s o utsta nding , GRBK Pre -ta x Inc o me a nd Adjuste d Ho me b uilding Gro ss Ma rg in. T he Co mpa ny b e lie ve s the se a nd simila r me a sure s a re use ful to ma na g e me nt a nd inve sto rs in e va lua ting its o pe ra ting pe rfo rma nc e a nd fina nc ing struc ture . T he Co mpa ny a lso b e lie ve s the se me a sure s fa c ilita te the c o mpa riso n o f the ir o pe ra ting pe rfo rma nc e a nd fina nc ing struc ture with o the r c o mpa nie s in the industry. Be c a use the se me a sure s a re no t c a lc ula te d in a c c o rda nc e with Ge ne ra lly Ac c e pte d Ac c o unting Princ iple s (“G AAP”), the y ma y no t b e c o mpa ra b le to o the r simila rly title d me a sure s o f o the r c o mpa nie s a nd sho uld no t b e c o nside re d in iso la tio n o r a s a sub stitute fo r, o r supe rio r to , fina nc ia lme a sure s pre pa re d in a c c o rda nc e with GAAP.
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Jim Bric kman Chie f E xe c utive Offic e r
ho me b uilding .
with Gre e nlig ht Ca pita l in 2008. JBGL wa s me rg e d into Gre e n Bric k in 2014.
O o f Princ e to n Ho me s a nd Princ e to n Re a lty Co rp.
Ric k Coste llo Chie f F inanc ial Offic e r
a ll a spe c ts o f re a l e sta te ma na g e me nt.
O a nd COO o f GL Ho me s, a s AVP
PMG.
e llo g g Sc ho o l.
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Je d Dolson Pr e side nt of T e xas Re gion
a c q uisitio n.
la nd a c q uisitio ns sinc e 2010.
ng ine e ring , Sta nfo rd Unive rsity, a nd Re g iste re d E ng ine e r, Sta te o f T e xa s.
Summe r L
Chie f Ac c ounting Offic e r
fina nc ia l re po rting se rvic e s industry.
ina nc ia l Offic e r o f the Da lla s Po lic e a nd F ire Pe nsio n Syste m
T e xa s a nd Ca lifo rnia .
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So urc e : Me tro study - Me tro USA
Na tio na l E c o no mic Ove rvie w T
mplo yme nt – F e b rua ry 2018
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We ar e le ss than 2.0% of the star ts in two of the lar ge st housing mar ke ts, giving us signific ant oppor tunity for gr
So urc e : Me tro study - Me tro USA
GRBK ha s a lso e nte re d the Co lo ra do Spring s ma rke t thro ug h o ur inve stme nt in Cha lle ng e r Ho me s. Na tio na l Ho using Ma rke t Annua l Sta rts b y Ma rke t – F e b rua ry 2018
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Da lla s/ F
SF D-T H – Sta rts a nd c lo sing s Dallas mar ke t c ontinue s 6- ye ar e xpansion but is still we ll be low the 2006 pe ak of mor e than 50,000 star ts
So urc e : Me tro study - Me tro USA
33,518 31,923
10,000 15,000 20,000 25,000 30,000 35,000 40,000 1Q08 1Q09 1Q10 1Q11 1Q12 1Q13 1Q14 1Q15 1Q16 1Q17 1Q18
Annual Starts & Closings
Annual Starts Annual Closings
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Da lla s/ F
L
GRBK has ne ar ly 4,600 lots in Dallas whe r e the mar ke t c ontinue s its 7- ye ar tr e nd of c onstr aine d supply
So urc e : Me tro study - Me tro USA
53,599 19.2 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 1Q08 1Q09 1Q10 1Q11 1Q12 1Q13 1Q14 1Q15 1Q16 1Q17 1Q18 Months of Supply Lots/ Starts
Vacant Developed Lots Annual Starts VDL Months of Supply
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5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000 60,000
Units Quarter
Annual Starts Annual Closings 2Q06 Peaked
T he Atlanta mar ke t also c ontinue s to e xpand but is still we ll be low pr ior pe ak
So urc e : Me tro study - Me tro USA
~70% of a c tivity is in North Atla nta whe re GRBK builds.
24,451 +9.9% 22,727 +8.5%
Atla nta Re g io n 16 Ye a r Histo ry Annua l Co nstruc tio n Sta rts a nd Clo sing s
2Q06 Pe ake d
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de ve lo pme nt c o mpa ny.
b uilde rs in whic h we o wn a 50% to 80% c o ntro lling inte re st a s we ll a s o ur inve stme nt in unc o nso lida te d b uilde r pa rtne rs.
c o nstruc tio n fina nc ing to mo st o f o ur c o ntro lle d b uilde rs.
in T e xa s, Ge o rg ia , Co lo ra do , a nd F lo rida .
lo c a te d re side ntia l lo ts a s o f Ma rc h 31, 2017.
c o rpo ra te le ve l vs. a t the c o ntro lle d b uilde r le ve l.
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Unc onsolidate d Builde r Par tne r s Contr
s
Produc ts Offe re d
T
Sing le fa mily L uxury ho me s T
ho me s T
ho me s Ag e -ta rg e te d sing le fa mily, pa tio ho me s, luxury ho me s, to wnho me s
T e xa s
CB JE NI Ho me s No rma ndy Ho me s So uthg a te Ho me s Ce ntre L iving Ho me s
Ge org ia
T he Pro vide nc e Gro up
F lorida
GRBK GHO Ho me s
Contr
s
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Unc onsolidate d Builde r Par tne r s
Produc ts offe re d
T
Colora do
Cha lle ng e r Ho me s
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Home s Close d and Re ve nue s by Builde r for F ull Ye ar 2017(1)(2)(3)
(1)All a mo unts a re a ppro xima te . (2)Gre e n Bric k Pa rtne rs o wns a 49.9% inte re st in Cha lle ng e r Ho me s a s o f Aug ust 2017, with a pa thwa y to c o ntro lle d
Due to
mino rity inte re st,
c o nso lida te d fina nc ials do no t inc lude Cha lle ng e r units, re ve nue s, a nd lo ts o wne d. (3)GHO Ho me s wa s a c q uire d April
2017 T
2017 T
e ve nue s: $652.6M
(2) (3)
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c lo se d o n its a c q uisitio n o f a n 80%
lo rida ’ s T re a sure Co a st a nd ha s e xpa nde d its ne two rk o f T e a m Builde rsT
M to
se ve n.
a nd a ffilia te s a nd re ta ins c o ntro lling o wne rship o f GHO Ho me s thro ug h a n inve stme nt in a ne wly fo rme d e ntity, GRBK GHO Ho me s, L L C.
pa rtne r in GRBK GHO Ho me s, L L C.
the fa ste st g ro wing b uilde r in the ir Ne xt 100 list o f the la rg e st b uilde rs in the c o untry.
he a c q uisitio n will e xpa nd Gre e n Bric k’ s fo o tprint b y g e o g ra phy, pric e po int, a nd ta rg e t ma rke t.
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c o ntro lling inte re sts in o ur a lig ne d ho me b uild e rs.
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Co ntro l Co ntro l Co ntro l Co ntro l
49.99% with pa thwa y to c o ntro l
Co ntro l Co ntro l
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We have the str
ational e xc e lle nc e for c ontinue d gr
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GRBK has one of the lowe st de bt- to- c apital r atios amongst public builde r
gr
Source: Company filings. d a ta fo r c o mpa ra tive c o mpa nie s is re p o rte d a s
De b t” e q ua ls T
minus Ca sh.
Ne t De b t to T
ne t de b t to c a pita l is a b o ut 20.5% ve rsus a n a ve ra g e 40% fo r c o ve re d pub lic b uilde rs
’ s e ve ntua l ta rg e t is a ppro xima te ly 30 to 35%
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Q1 2018 Q1 2017 17 vs 18 Q1 I nc re ase Ho me Clo sing s - Units 267 226 18% Ne t Ne w Orde rs 434 287 51% Ho me b uilding Re ve nue s ($’ s in tho usands) $120,366 $93,397 29% 3rd Party L
$7,899 $5,940 33% T
$128,265 $99,337 29% GRBK Pre -T ax I nc o me ($’ s in tho usands) $14,538 $10,052 45% E PS $0.22 $0.13 69% Bac klo g ($’ s in tho usands) $226,516 $145,164 56% Ho me b uilding Gro ss Marg in 21.5% 21.0% Adjuste d Gro ss Marg in 22.1% 21.7% GRBK Pre -T ax / Ho me b uilding Re ve nue s 12.1% 10.8% T
6,318 4,956 27% Units Unde r Co nstruc tio n 760 625 22% L ast 12 Mo nths Starts 1,188 993 20%
Unaudite d
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L T M Adjuste d Gr
gins L T M GRBK Pr e - T ax Inc ome to Home building Re ve nue s
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GRBK Pr e - tax Inc ome as a Pe r c e ntage of Home building Re ve nue s
(Una udite d, in tho usa nds)
12 Months E nde d Ma r 31, 2017 12 Months E nde d Jun 30, 2017 12 Months E nde d Se p 30, 2017 12 Months E nde d De c 31, 2017 12 Months E nde d Ma r 31, 2018
L T M Ne t inc o me a ttrib uta b le to Gre e n Bric k $26,859 $27,805 $30,842 $14,970 $19,976 L T M I nc o me ta x pro visio n a ttrib uta b le to Gre e n Bric k $17,693 $17,829 $19,541 $38,896 $38,376 L T M GRBK Pre -ta x inc o me $44,552 $45,634 $50,383 $53,866 $58,352
L T M Sa le of Re side ntia l Units $391,933 $398,546 $419,156 $435,644 $462,613
L T M GRBK Pre -ta x inc o me a s a % o f Ho me b uilding Re ve nue s 11.4% 11.5% 12.0% 12.4% 12.6% 17 (Una udite d, in tho usa nds)
3 Months E nde d Ma r 31, 2017 3 Months E nde d Ma r 31, 2018
Ne t inc o me a ttrib uta b le to Gre e n Bric k $6,197 $11,203 I nc o me ta x pro visio n a ttrib uta b le to Gre e n Bric k $3,855 $3,335 GRBK Pre -ta x inc o me $10,052 $14,538
Sa le of Re side ntia l Units $93,397 $120,366
GRBK Pre -ta x inc o me a s a % o f Ho me b uilding Re ve nue s 10.8% 12.1%
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Adjuste d Home building Gr
gin Re c onc iliation
(Una udite d, in tho usa nds)
12 Months E nde d Ma r 31, 2017 12 Months E nde d June 30, 2017 12 Months E nde d Se p 30, 2017 12 Months E nde d De c 31, 2017 12 Months E nde d Ma r 31, 2018
Sa le o f Re side ntia l Units $391,933 $398,546 $419,156 $435,644 $462,613 Ho me b uilding g ro ss ma rg in $87,922 $89,429 $93,637 $93,579 $99,800 Add b a c k: Ca pita lize d I nte re st c ha rg e d to c o st
$2,441 $2,492 $2,639 $2,630 $2,784
Adjuste d home building g ross ma rg in $90,363 $91,921 $96,276 $96,209 $102,584
Adjuste d g ro ss ma rg in pe rc e nta g e 23.1% 23.1% 23.0% 22.1% 22.2% 18
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2805 No rth Da lla s Pa rkwa y, Suite 400 Pla no , T X 75093 www.g re e nbric kpa rtne rs.c o m
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