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GRBK Green Brick Partners

Filed: 4 May 21, 4:54pm

Exhibit 99
greenbrickpartnerslogocopy1a.jpg
GREEN BRICK PARTNERS, INC. REPORTS RECORD FIRST QUARTER 2021 RESULTS

QUARTERLY DILUTED EARNINGS PER SHARE OF $0.51 VS $0.31, UP 64.5%
BACKLOG OF $995.7 MILLION, UP 133.0%
NET NEW HOME ORDERS UP 71.2%
HOME BUILDING GROSS MARGIN UP 230 BPS
LOTS OWNED AND CONTROLLED UP 118.1%

PLANO, Texas, May 4, 2021 — Green Brick Partners, Inc. (Nasdaq: GRBK) (“we,” “Green Brick” or the “Company”) today reported record results for its first quarter ended March 31, 2021.

Jim Brickman, Chief Executive Officer, said, “We just reported the best first quarter in the history of the Company where net income attributable to Green Brick over the last twelve months through March 31, 2021 grew to $123.7 million, a 100% increase over the prior twelve-month period. Our first quarter net orders of 1,082 homes and ending backlog of $996 million both represent all-time records for the Company, up 28% and 45% over Q4 2020 record levels. To meet the unprecedented demand, Green Brick started a record 2,043 homes in the last six months and ended the quarter with 2,303 units under construction, a 62% increase from a year ago. We feel confident that our efforts will produce heightened earnings beginning next quarter and each successive quarter this year.”

Results for the Quarter Ended March 31, 2021:
For the three months ended March 31, 2021, our net new home orders and home starts reflect a record for any quarter since the Company’s inception. Homes under construction, backlog, and lots owned and controlled also represent a record as of the end of any quarter.
(Dollars in thousands, except per share data)Three Months Ended March 31,
20212020Increase
Net new home orders1,082 632 71.2 %
New homes delivered516 448 15.2 %
Total revenues$234,479 $213,267 9.9 %
Total cost of revenues175,490 164,298 6.8 %
Total gross profit$58,989 $48,969 20.5 %
Net income attributable to Green Brick Partners, Inc.$25,969 $15,917 63.2 %
Diluted net income attributable to Green Brick Partners, Inc. per share$0.51 $0.31 64.5 %
Residential units revenue$217,236 $191,187 13.6 %
Homebuilding gross margin percentage25.4 %23.1 %230 bps
Backlog$995,743 $427,322 133.0 %
Lots owned and controlled18,939 8,684 118.1 %
Homes under construction2,303 1,418 62.4 %
Average active selling communities96 94 2.1 %
Net income attributable to Green Brick Partners, Inc. as a percentage of the average total Green Brick Partners, Inc. stockholders’ equity15.9 %11.9 %400 bps

“This rapid uptick in sales and starts has not been at the cost of our land pipeline,” said Rick Costello, Chief Financial Officer. “During the quarter, we acquired approximately 5,600 homesites, expanding our total lots owned and controlled by 118% over the
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past twelve months and 31% in the past three months alone. This increase was achieved while starting a record number of homes and maintaining a debt to capital ratio of 26.4%, one of the lowest among the public homebuilders. Our record starts of 1,039 homes this quarter were despite the severe Texas snowstorm that impacted construction schedules, leading to the deferral of approximately 40 home closings into the second quarter. We believe Green Brick’s capacity to source highly profitable land without straining our balance sheet will continue to propel our operating and financial results beyond the bar set this quarter.”

Green Brick, like every other company in the United States and the global economy, has been impacted by the coronavirus, or COVID-19, pandemic and the impact of governmental actions taken to combat the pandemic. After an initial decline in orders and construction at the onset of the crisis, orders have subsequently achieved all-time highs. The significant increase in new home demand that we have seen since the second half of 2020 has, in turn, led to increased demand for the raw materials, products and appliances for new homes. Due to the increased demand for certain materials, we have recently and may continue to experience price increases, shortages and significant extensions to our lead time for the delivery of materials such as lumber, appliances and windows. As construction follows orders, we expect closings to grow substantially beginning in the second quarter of 2021.

Earnings Conference Call:
We will host our earnings conference call to discuss our first quarter ended March 31, 2021 at 12:00 p.m. Eastern Time on Wednesday, May 5, 2021. The call can be accessed by dialing 800-374-0137 for domestic participants or 904-685-8013 for international participants. Participants should reference conference ID code 3887441. A replay of the call will be available from approximately 2:45 p.m. Eastern Time on May 5, 2021 through 11:59 p.m. Eastern Time on May 19, 2021. To access the replay, the domestic dial-in number is 855-859-2056, the international dial-in number is 404-537-3406 and the conference ID code is 3887441.

Non-GAAP Financial Measures and Key Financial Metrics:
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.

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GREEN BRICK PARTNERS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)

Three Months Ended March 31,
20212020
Residential units revenue$217,236 $191,187 
Land and lots revenue17,243 22,080 
Total revenues234,479 213,267 
Cost of residential units162,072 147,187 
Cost of land and lots13,418 17,111 
Total cost of revenues175,490 164,298 
Total gross profit58,989 48,969 
Selling, general and administrative expenses(29,488)(26,869)
Equity in income of unconsolidated entities3,891 2,565 
Other income (loss), net1,870 (1,909)
Income before income taxes35,262 22,756 
Income tax expense7,501 6,040 
Net income27,761 16,716 
Less: Net income attributable to noncontrolling interests1,792 799 
Net income attributable to Green Brick Partners, Inc.$25,969 $15,917 
Net income attributable to Green Brick Partners, Inc. per common share:
Basic$0.51 $0.32 
Diluted$0.51 $0.31 
Weighted average common shares used in the calculation of net income attributable to Green Brick Partners, Inc. per common share:
Basic50,633 50,454 
Diluted50,993 50,646 

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GREEN BRICK PARTNERS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)

March 31, 2021December 31, 2020
ASSETS
Cash and cash equivalents$28,688 $19,479 
Restricted cash14,750 14,156 
Receivables7,561 5,224 
Inventory920,890 844,635 
Investments in unconsolidated entities48,457 46,443 
Right-of-use assets - operating leases2,257 2,538 
Property and equipment, net3,506 3,595 
Earnest money deposits23,208 22,242 
Deferred income tax assets, net15,376 15,376 
Intangible assets, net601 622 
Goodwill680 680 
Other assets13,942 13,857 
Total assets$1,079,916 $988,847 
LIABILITIES AND EQUITY
Liabilities:
Accounts payable$39,000 $24,521 
Accrued expenses50,235 40,416 
Customer and builder deposits56,073 38,131 
Lease liabilities - operating leases2,289 2,591 
Borrowings on lines of credit, net3,809 106,687 
Senior unsecured notes, net235,561 111,056 
Notes payable119 2,125 
Contingent consideration368 368 
Total liabilities387,454 325,895 
Commitments and contingencies
Redeemable noncontrolling interest in equity of consolidated subsidiary15,701 13,543 
Equity:
Green Brick Partners, Inc. stockholders’ equity
Preferred stock, $0.01 par value: 5,000,000 shares authorized; none issued and outstanding— — 
Common stock, $0.01 par value: 100,000,000 shares authorized; 51,124,215 and 51,053,858 issued and 50,732,276 and 50,661,919 outstanding as of March 31, 2021 and December 31, 2020, respectively511 511 
Treasury stock, at cost, 391,939 shares(3,167)(3,167)
Additional paid-in capital293,162 293,242 
Retained earnings375,625 349,656 
Total Green Brick Partners, Inc. stockholders’ equity666,131 640,242 
Noncontrolling interests10,630 9,167 
Total equity676,761 649,409 
Total liabilities and equity$1,079,916 $988,847 

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GREEN BRICK PARTNERS, INC.
SUPPLEMENTAL INFORMATION
(Unaudited)

Residential Units Revenue and New Homes Delivered
(dollars in thousands)
Three Months Ended March 31,
20212020Change%
Home closings revenue$216,134 $189,248 $26,886 14.2 %
Mechanic’s lien contracts revenue1,102 1,939 (837)(43.2)%
Residential units revenue$217,236 $191,187 $26,049 13.6 %
New homes delivered516 448 68 15.2 %
Average sales price of homes delivered$418.9 $422.4 $(3.5)(0.8)%

Land and Lots Revenue
(dollars in thousands)
Three Months Ended March 31,
20212020Change%
Lots revenue$8,443 $22,080 $(13,637)(61.8)%
Land revenue8,800 — 8,800 100.0%
Land and lots revenue$17,243 $22,080 $(4,837)(21.9)%
Lots closed79 138 (59)(42.8)%
Average sales price of lots closed$106.9 $160.0 $(53.1)(33.2)%

New Home Orders and Backlog
(dollars in thousands)
Three Months Ended March 31,
20212020Change%
Net new home orders1,082 632 450 71.2 %
Cancellation rate6.0 %16.5 %(10.5)%(63.6)%
Absorption rate per average active selling community per quarter11.3 6.7 4.6 68.7 %
Average active selling communities96 94 2.1 %
Active selling communities at end of period90 93 (3)(3.2)%
Backlog$995,743 $427,322 $568,421 133.0 %
Backlog (units)2,029 970 1,059 109.2 %
Average sales price of backlog$490.8 $440.5 $50.3 11.4 %

  March 31, 2021December 31, 2020
Lots owned    
Central6,682 6,823 
Southeast1,883 2,097 
Total lots owned8,565 8,920 
Lots controlled    
Central9,045 4,398 
Southeast1,329 1,150 
Total lots controlled10,374 5,548 
Total lots owned and controlled (1)
18,939 14,468 
Percentage of lots owned45.2 %61.7 %

(1)Excludes lots with homes under construction.
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GREEN BRICK PARTNERS, INC.
SUPPLEMENTAL INFORMATION
(Unaudited)

The following table presents additional information on the lots we owned as of March 31, 2021 and December 31, 2020.
March 31, 2021December 31, 2020
Total lots owned8,565 8,920 
Add certain lots included in Total Lots Controlled
Land under option for future acquisition and development5,838 740 
Lots under option through unconsolidated development joint ventures1,838 1,838 
Total lots self-developed16,241 11,498 
Self-developed lots as a percentage of total lots owned and controlled85.8 %79.5 %

Reconciliation of Non-GAAP Financial Measures

The following table represents the non-GAAP measure of adjusted homebuilding gross margin for three months ended March 31, 2021 and 2020 and reconciles these amounts to homebuilding gross margin, the most directly comparable GAAP measure.

(Unaudited, in thousands):Three Months Ended March 31,
20212020
Residential units revenue$217,236 $191,187 
Less: Mechanic’s lien contracts revenue(1,102)(1,939)
Home closings revenue$216,134 $189,248 
Homebuilding gross margin$54,904 $43,657 
Homebuilding gross margin percentage25.4 %23.1 %
Homebuilding gross margin54,904 43,657 
Add back: Capitalized interest charged to cost of revenues1,813 2,181 
Adjusted homebuilding gross margin$56,717 $45,838 
Adjusted homebuilding gross margin percentage26.2 %24.2 %

The following table presents the pre-tax income for the three months ended March 31, 2021 and 2020, which represents net income attributable to Green Brick for the period excluding the provision for income taxes attributable to Green Brick, and reconciles these amounts to net income attributable to Green Brick, the most directly comparable GAAP measure.

(Unaudited, in thousands):Three Months Ended March 31,
20212020
Net income attributable to Green Brick Partners, Inc.$25,969 $15,917 
Income tax expense attributable to Green Brick Partners, Inc.7,500 6,038 
Pre-tax income attributable to Green Brick Partners, Inc.$33,469 $21,955 

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The following table presents the non-GAAP measure of net income attributable to Green Brick Partners, Inc. for the three months ended March 31, 2021 and 2020, divided by the average total Green Brick Partners, Inc. stockholder’s equity to calculate our return on average equity. We believe this non-GAAP financial measure is relevant in measuring our profitability in relation to stockholder’s equity and should only be used to supplement Green Brick’s GAAP results.

Three Months Ended March 31,
(Unaudited, in thousands):20212020
Net income attributable to Green Brick Partners, Inc.$25,969 $15,917 
Beginning total Green Brick Partners, Inc. stockholders’ equity640,242 523,168 
Ending total Green Brick Partners, Inc. stockholders’ equity666,131 $542,982 
Average total Green Brick Partners, Inc. stockholders’ equity$653,187 $533,075 
Net income attributable to Green Brick Partners, Inc. as a percentage of the average total Green Brick Partners, Inc. stockholders’ equity15.9 %11.9 %

About Green Brick Partners, Inc.
Green Brick Partners, Inc. (Nasdaq: GRBK) is a diversified homebuilding and land development company. Green Brick owns five homebuilders in Dallas, 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 a homebuilder in Port St. Lucie, Florida (GHO Homes). Green Brick also owns a noncontrolling interest in Challenger Homes in Colorado Springs, Colorado and retains interests in related financial services platforms, including Green Brick Title, Providence Group Title, and Green Brick Mortgage. Green Brick is engaged in all aspects of the homebuilding process, including land acquisition and development, entitlements, design, construction, marketing, and sales for our residential neighborhoods and master planned communities. For more information about Green Brick Partners Inc.’s homebuilding partners, please visit https://greenbrickpartners.com/team-builders/.

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 include statements regarding (i) our strategy for growth, the drivers and timing of that growth, and the impact on our results over the remainder of 2021, (ii) our pace and ability to grow our operations to scale, our ability to capitalize on market opportunities and the impact on our results, (iii) our land and lot acquisition strategy and its ability to grow our operational and financial results, and (iv) our growth in closings, and the timing and significance of that growth. 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) continuing impacts from the COVID-19 pandemic, (2) general economic conditions, seasonality, cyclicality and competition in the homebuilding industry; (3) changes in macroeconomic conditions, including interest rates and unemployment rates, that could adversely impact demand for new homes or the ability of potential buyers to qualify; (4) shortages, delays or increased costs of raw materials, especially in light of COVID-19 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; (5) a shortage of labor, (6) an inability to acquire land in our markets at anticipated prices or difficulty in obtaining land-use entitlements; (7) our inability to successfully execute our strategies, including an inability to grow our operations or expand our Trophy brand; (8) a failure to recruit, retain or develop highly skilled and competent employees; (9) government regulation risks; (10) a lack of availability or volatility of mortgage financing or a rise in interest rates; (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; (15) changes in accounting standards that adversely affect our reported earnings or financial condition. 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 and Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission.

Contact: Richard A. Costello
Chief Financial Officer
(469) 573-6755
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