Green Brick Partners, Inc. (GRBK)

[Enterprising Investor]

Green Brick Partners, Inc. Reports Fourth Quarter and Full Year 2016 Results (3/13/17)

Fourth Quarter Basic EPS of $0.16 and Basic Adjusted EPS of $0.28, up 60.0% and 75.0%, respectively; Fourth Quarter Pre-Tax Income of $13.7 million, up 79.8%; Fourth Quarter Revenue of $119.8 million, up 40.1%; Backlog of $108.0 million, up 22.6%

PLANO, TX--(Marketwired - March 13, 2017) - Green Brick Partners, Inc. (NASDAQ: GRBK) ("we," "Green Brick" or the "Company"), today reported results for its fourth quarter and full year ended December 31, 2016.

Results for the Fourth Quarter Ended December 31, 2016:

Basic net income attributable to Green Brick per common share ("EPS") for the three months ended December 31, 2016 was $0.16, compared to $0.10 for the three months ended December 31, 2015. Basic adjusted net income attributable to Green Brick per common share ("Adjusted EPS") for the three months ended December 31, 2016 was $0.28, compared to $0.16 for the three months ended December 31, 2015. See "Reconciliation of Non-GAAP Financial Measures."

For the three months ended December 31, 2016, the Company had: pre-tax income of $13.7 million, an increase of 79.8%, compared to $7.6 million for the three months ended December 31, 2015; gross profit of $29.2 million, an increase of 72.7%, compared to $16.9 million for the three months ended December 31, 2015; and total revenue of $119.8 million, an increase of 40.1%, compared to $85.5 million for the three months ended December 31, 2015.

Builder operations revenue for the three months ended December 31, 2016 was $117.0 million, an increase of 55.8%, compared to $75.1 million for the three months ended December 31, 2015. Land development revenue for the three months ended December 31, 2016 was $2.8 million compared to $10.4 million for the three months ended December 31, 2015. The decrease in land development revenue is due to an increase in lot sales to Green Brick's builders where revenue is not recognized until the home closes.

The dollar value of backlog units as of December 31, 2016 was $108.0 million, an increase of 22.6% compared to December 31, 2015. The average sales price of homes in backlog increased approximately $17,335, or 4.0%, to $455,823 for the year ended December 31, 2016, compared to $438,488 for the year ended December 31, 2015.

Homes under construction increased 11.2% to 564 as of December 31, 2016, compared to 507 as of December 31, 2015.

Results for the Year Ended December 31, 2016:

Basic EPS for the year ended December 31, 2016 was $0.49, compared to $0.38 for the year ended December 31, 2015. Basic Adjusted EPS for the year ended December 31, 2016 was $0.80, compared to $0.50 for the year ended December 31, 2015. See "Reconciliation of Non-GAAP Financial Measures."

For the year ended December 31, 2016, the Company had: pre-tax income of $39.0 million, an increase of 60.0%, compared to $24.4 million for the year ended December 31, 2015; gross profit of $86.4 million, an increase of 38.8%, compared to $62.3 million for the year ended December 31, 2015; and total revenue of $380.3 million, an increase of 30.6%, compared to $291.1 million for the year ended December 31, 2015.

Builder operations revenue for the year ended December 31, 2016 was $365.2 million, an increase of 43.6%, compared to $254.3 million for the year ended December 31, 2015. Land development revenue for the year ended December 31, 2016 was $15.2 million compared to $36.9 million for the year ended December 31, 2015. The decrease in land development revenue is due primarily to an increase in lot sales to Green Brick's builders where revenue is not recognized until the home closes.

"Our superior land and lot positions combined with a significant improvement in our operations resulted in pre-tax earnings for the fourth quarter of $13.7 million, up 80% over 2015," said James R. Brickman, Green Brick's Chief Executive Officer. "Pre-tax earnings for the year of $39.0 million was up 60% over 2015 and backlog was up 23% compared to December 31, 2015. Yet again, we are 100% engaged to continue to improve our results in 2017."

Earnings Conference Call:

We will host our earnings conference call to discuss our fourth quarter and the year ended December 31, 2016 at 12:00 p.m. Eastern Time on Tuesday, March 14, 2017. 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 63683047. A replay of the call will be available from approximately 3:00 p.m. Eastern Time on March 14, 2017 through 11:59 p.m. Eastern Time on March 21, 2017. 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 63683047.

Increase in Lines of Credit:

On March 6, 2017, Flagstar Bank, FSB increased its commitment under the Unsecured Revolving Credit Facility (as defined in our Form 10-K) from $20.0 million to $35.0 million, which increased the aggregate lending commitments available under the Revolving Credit Facility from $70.0 million to $85.0 million.

Change in Classification:

Certain indirect project costs previously classified as salary expense and selling, general and administrative expense have been classified as cost of residential units for the year ended December 31, 2015 to properly present cost of residential units, salary expense, and selling, general and administrative expense.

Reconciliation of 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 the Company's 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 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.

On July 1, 2015, the Company completed an underwritten public offering of 17,000,000 shares of its common stock at a price to the public of $10.00 per share and granted to the underwriters a 30-day option to purchase up to an aggregate of 841,500 additional shares of common stock to cover over-allotments (the "Equity Offering"). On July 23, 2015, the underwriters exercised the option and purchased 444,897 additional shares. Due to the effects of the Equity Offering, the weighted average shares outstanding for the three months ended December 31, 2015 is indicative of the Company's future weighted average shares outstanding, however the weighted average shares outstanding for the year ended December 31, 2015 is not and therefore we believe adjusted EPS is a more meaningful measure to our investors.
 
About Green Brick Partners, Inc.:

Green Brick Partners, Inc. (NASDAQ: GRBK) is a uniquely structured company that combines residential land development and homebuilding. The Company acquires and develops land, provides land and construction financing to its controlled builders and participates in the profits of its controlled builders. The Company owns a controlling interest in four homebuilding companies in Dallas, Texas (CB JENI Homes DFW LLC, Normandy Homes (a division of CB JENI), Southgate Homes DFW LLC, and Centre Living Homes, LLC), as well as a leading homebuilder in Atlanta, Georgia (The Providence Group of Georgia, L.L.C.). The Company is engaged in all aspects of the homebuilding process, including land acquisition and the development, entitlements, design, construction, marketing and sales and the creation of brand images at its residential neighborhoods and master planned communities. For more information about Green Brick Partners, Inc.'s homebuilding partners go to www.greenbrickpartners.com/building-partners.html.

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