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Form 8-K Green Brick Partners, For: May 09

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May 9, 2016 4:13 PM EDT


UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

___________________

FORM 8-K
___________________


CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 9, 2016


Green Brick Partners, Inc.
_________________________________________________
(Exact name of registrant as specified in its charter)


_______Delaware_______ 
(State or other jurisdiction of incorporation)
_______001-33530_ ____ 
(Commission File Number)
_____20-5952523_____ 
(I.R.S. Employer
Identification Number) 

2805 Dallas Parkway, Suite 400
____Plano, Texas _____
(Address of principal
executive offices)



_____ 75093_____
(Zip code)

Registrant’s telephone number, including area code: (469) 573-6755
(Former name or former address, if changed since last report)
Not Applicable
___________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))





Item 2.02 Results of Operations and Financial Condition.

On May 9, 2016, Green Brick Partners, Inc. issued a press release announcing its results of operations for the first quarter ended March 31, 2016. A copy of the press release is furnished as Exhibit 99.1 to this report and is incorporated herein.

The information in Item 2.02 of this report, including Exhibit 99.1 attached hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, and shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d)     Exhibits
Exhibit No.
Description of Exhibit
 
99.1
Press Release, dated as of May 9, 2016.
99.2
Green Brick Partners, Inc. - First Quarter 2016 Investor Call Presentation, dated May 9, 2016.








SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
                
GREEN BRICK PARTNERS, INC.
By:
/s/ Richard A. Costello
Name:
Richard A. Costello
Title:
Chief Financial Officer

Date:    May 9, 2016




EXHIBIT INDEX
Exhibit No.
Description of Exhibit
 
99.1
Press Release, dated as of May 9, 2016.
99.2
Green Brick Partners, Inc. - First Quarter 2016 Investor Call Presentation, dated May 9, 2016.



Exhibit 99.1


GREEN BRICK PARTNERS, INC. REPORTS FIRST QUARTER 2016 RESULTS
First Quarter Pre-Tax Income of $4.5 million;
First Quarter Revenue of $70.0 million;
First Quarter Basic Adjusted EPS of $0.09;
Backlog of $129.2 million, up 39.3%

PLANO, Texas, May 9, 2016 — Green Brick Partners, Inc. (NASDAQ: GRBK) (“we,” “Green Brick” or the “Company”), today reported results for its first quarter ended March 31, 2016.

Results for the First Quarter Ended March 31, 2016:
•
For the three months ended March 31, 2016, the Company had revenue of $70.0 million, gross profit of $15.7 million, and pre-tax income of $4.5 million. This compares to revenues of $58.5 million, gross profit of $16.2 million, and pre-tax income of $6.2 million for the first quarter ended March 31, 2015. The decrease in pre-tax income is attributable to an increase in amortization of capitalized interest of $1.0 million and to an increase in lot sales to Green Brick’s builders where revenue is not recognized until the house closing.

•
Builder operations revenue for the three months ended March 31, 2016 was $66.6 million, an increase of 34.2%, compared to $49.7 million for the three months ended March 31, 2015. Land development revenue for the three months ended March 31, 2016 was $3.3 million compared to $8.8 million for the three months ended March 31, 2015.

•
The dollar value of backlog units as of March 31, 2016 was $129.2 million, an increase of 39.3% compared to March 31, 2015. The average sales price of homes in backlog increased $78,112, or 20.4%, to $461,393 for the three months ended March 31, 2016, compared to $383,281 for the three months ended March 31, 2015.

•
Homes under construction increased 4.6% to 541 as of March 31, 2016, compared to 517 as of March 31, 2015.

•
Basic adjusted net income attributable to Green Brick per common share (“Adjusted EPS”) for the three months ended March 31, 2016 was $0.09. See “Reconciliation of Non-GAAP Financial Measures.”

“We are very pleased with Green Brick’s progress this quarter. In addition, the 47% increase in Q1 2016 backlog from year-end and 29% increase in net orders should translate into substantially higher revenue and earnings as the year progresses,” said James R. Brickman, Green Brick's Chief Executive Officer. “In addition, during the last two quarters, we have acquired approximately 1,000 home sites in Atlanta and Dallas that we expect to develop into profitable neighborhoods in 2017 and beyond.”

Earnings Conference Call:
We will host our earnings conference call to discuss our first quarter ended March 31, 2016 at 12:00 p.m. Eastern Time on Tuesday, May 10, 2016. 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 2401401. A replay of the call will be available from approximately 3:00 p.m. Eastern Time on May 10, 2016 through 11:59 p.m. Eastern Time on May 17, 2016. 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 2401401.


1

Reclassifications:
Depreciation of model home furnishings for the three months ended March 31, 2015 has been reclassified from depreciation and amortization expense, which is included in other income, net in the consolidated statements of income to cost of residential units to conform to the current year presentation.

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 March 31, 2015 is not indicative of the Company’s future weighted average shares outstanding.


2

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

 
Three Months Ended March 31,
 
2016
 
2015
Sale of residential units
$
66,628

 
$
49,661

Sale of land and lots
3,330

 
8,791

Total revenues
69,958

 
58,452

Cost of residential units
51,929

 
35,964

Cost of land and lots
2,340

 
6,278

Total cost of sales
54,269

 
42,242

Total gross profit
15,689

 
16,210

Salary expense
(6,174
)
 
(4,862
)
Selling, general and administrative expense
(4,032
)
 
(2,939
)
Operating profit
5,483

 
8,409

Interest expense
—

 
(281
)
Depreciation and amortization expense
(56
)
 
(77
)
Interest on direct financing leases income
—

 
13

Other income, net
516

 
331

Income before provision for income taxes
5,943

 
8,395

Income tax provision
1,453

 
2,207

Net income
4,490

 
6,188

Less: net income attributable to noncontrolling interests
1,396

 
2,170

Net income attributable to Green Brick Partners, Inc.
$
3,094

 
$
4,018

 
 
 
 
Net income attributable to Green Brick Partners, Inc. per common share:
 
 
 
Basic
$0.06
 
$0.13
Diluted
$0.06
 
$0.13
Weighted average common shares used in the calculation of net income attributable to Green Brick Partners, Inc. per common share:
 
 
 
Basic
48,814

 
31,346

Diluted
48,814

 
31,346



3

GREEN BRICK PARTNERS, INC.
SUPPLEMENTAL INFORMATION
(Unaudited)

 
 
Three Months Ended 
 March 31,
 
Increase (Decrease)
New Homes Delivered and Home Sales Revenue
 
2016
 
2015
 
Change
 
%
New homes delivered
 
161

 
145

 
16

 
11.0%
Home sales revenue ($ in thousands)
 
$
66,628

 
$
49,661

 
$
16,967

 
34.2%
Average sales price of home delivered
 
$
413,839

 
$
342,490

 
$
71,349

 
20.8%

 
 
Three Months Ended 
 March 31,
 
Increase (Decrease)
Land and Lots Sales Revenue
 
2016
 
2015
 
Change
 
%
Land and lots sold
 
28

 
72

 
(44
)
 
(61.1)%
Land and lots sales revenue ($ in thousands)
 
$
3,330

 
$
8,791

 
$
(5,461
)
 
(62.1)%
Average sales price of land and lots sold
 
$
118,944

 
$
122,094

 
$
(3,150
)
 
(2.6)%

 
 
Three Months Ended 
 March 31,
 
Increase (Decrease)
New Home Orders & Backlog
 
2016
 
2015
 
Change
 
%
Net new home orders
 
240

 
186

 
54

 
29.0%
Average selling communities
 
44

 
36

 
8

 
22.2%
Selling communities at end of period
 
44

 
37

 
7

 
18.9%
Backlog ($ in thousands)
 
$
129,190

 
$
92,754

 
$
36,436

 
39.3%
Backlog (units)
 
280

 
242

 
38

 
15.7%
Average sales price of backlog
 
$
461,393

 
$
383,281

 
$
78,112

 
20.4%


4

The following table calculates the non-GAAP measure of Adjusted EPS for the three months ended March 31, 2016 and March 31, 2015 and reconciles these amounts to net income attributable to Green Brick, as reported and prepared in accordance with GAAP. Adjusted EPS for the three months ended March 31, 2016 and March 31, 2015 means pre-tax income for the period presented divided by the weighted average number of common shares outstanding for the three months ended March 31, 2016. Pre-tax income represents net income attributable to Green Brick for the period excluding provision for income taxes attributable to Green Brick.
(In thousands, except per share amounts):
 
Three Months Ended 
 March 31,
 
2016
 
2015
Basic Adjusted EPS
 
 
 
 
Net income attributable to Green Brick —basic
 
$
3,094

 
$
4,018

Income tax provision attributable to Green Brick
 
$
1,423

 
$
2,184

Pre-tax income
 
$
4,517

 
$
6,202

Adjusted weighted-average number of shares outstanding —basic
 
48,814

 
48,814

Basic Adjusted EPS
 
$0.09
 
$0.13
Diluted Adjusted EPS
 
 
 
 
Net income attributable to Green Brick —diluted
 
$
3,094

 
$
4,018

Income tax provision attributable to Green Brick
 
$
1,423

 
$
2,184

Pre-tax income
 
$
4,517

 
$
6,202

Adjusted weighted-average number of shares outstanding —diluted
 
48,814

 
48,814

Diluted Adjusted EPS
 
$0.09
 
$0.13

The following table calculates the non-GAAP measure of Adjusted Homebuilding Gross Margin for the three months ended March 31, 2016 and March 31, 2015 and reconciles these amounts to homebuilding gross margin, as reported and prepared in accordance with GAAP.
(In thousands):
 
Three Months Ended 
 March 31,
 
2016
 
2015
Homebuilding gross margin
 
$
14,699

 
$
13,697

Add back: capitalized interest charged to cost of sales
 
$
977

 
$
14

Adjusted Homebuilding Gross Margin
 
$
15,676

 
$
13,711







5

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.

Forward-Looking and Cautionary Statements
Any statements in this press release about Green Brick’s expectations, beliefs, plans, objectives, prospects, financial condition, assumptions or future events or performance 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 as “may,” “will,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “outlook,” “strategy,” “positioned,” “intends,” “plans,” “believes,” “projects,” “estimates” and similar expressions, as well as statements in the future tense. These statements are based on assumptions that Green Brick has made in light of its experience in the industry as well as its perceptions of historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances. Accordingly, all such forward-looking statements involve estimates and assumptions that are subject to risks, uncertainties and other factors that could cause actual results to differ materially from the results expressed in the statements. Among the factors that could cause actual results to differ materially from those projected in the forward-looking statements are the following: general economic conditions, seasonality, cyclicality and competition in the homebuilding industry; demand for real estate investments in the geographic markets in which we operate; significant inflation or deflation; labor and raw material shortages; the failure to recruit, retain and develop highly skilled and competent employees; an inability to acquire land suitable for residential homebuilding at reasonable prices; an inability to develop and sell communities successfully or within expected timeframes; risks related to regulatory approvals and government regulation; the interpretation of or changes to tax, labor and environmental laws and regulations; volatility of mortgage interest rates; the unavailability of mortgage financing; the occurrence of severe weather or natural disasters; risks related to future growth through strategic investments, joint ventures, partnerships and/or acquisitions; the inability to obtain suitable bonding for the development of housing projects; difficulty in obtaining sufficient capital; the occurrence of a major health and safety incident; poor relations with the residents of our communities; information technology failures and data security breaches; product liability claims, litigation and warranty claims; our debt and related service obligations; required accounting changes; an inability to maintain effective internal control over financial reporting; and other risks and uncertainties inherent in our business. Additional factors that could cause actual results to differ from those anticipated are discussed in the “Risk Factors” and “Management's Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s annual and quarterly reports filed with the Securities and Exchange Commission. Because the factors referred to above could cause actual results or outcomes to differ materially from those expressed or implied in any forward-looking statements made by Green Brick, you should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date of this press release, and Green Brick undertakes no obligation to update any forward-looking statement to reflect events or circumstances after such date.

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

6
Green Brick Partners First Quarter 2016 Investor Call Presentation May 9, 2016 Exhibit 99.2

 
1 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 as “may,” “will,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “outlook,” “strategy,” “positioned,” “intends,” “plans,” “believes,” “projects,” “estimates” and similar expressions, as well as statements in the future tense. Although the Company believes that the assumptions underlying these statements are reasonable, individuals considering such statements for any purpose are cautioned that such forward-looking statements are inherently uncertain and necessarily involve risks that may affect the Company’s business prospects and performance, causing actual results to differ from those discussed during the presentation, and any such difference may be material. Factors that could cause actual results to differ from those anticipated are discussed in the Company’s annual and quarterly reports filed with the SEC. Any forward-looking statements made are subject to risks and uncertainties, many of which are beyond management’s control. These risks include the risks described in the Company’s filings with the SEC. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, the Company’s actual results and plans could differ materially from those expressed in any forward-looking statements. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. These forward-looking statements are made only as of the date hereof. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information or future events. The Company presents Basic Adjusted EPS and Diluted Adjusted EPS and Basic and Diluted Adjusted weighted-average number of shares outstanding, Income before taxes attributable to GRBK and Adjusted Homebuilding Gross Margin. The Company believes these and similar measures are useful to management and investors in evaluating its operating performance and financing structure. The Company also believes these measures facilitate the comparison of their operating performance and financing structure with other companies in the 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.

 
 Jim Brickman − Chief Executive Officer − Over 35 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.  Rick Costello − Chief Financial Officer − Over 25 years of financial and operating experience in all aspects of real estate management − Previously served as CFO and COO of GL Homes, as AVP of finance of Paragon Group and as an auditor for KPMG  Jed Dolson − Head of Land Acquisition and Development − Managed all Dallas land development for JBGL/GRBK since 2009 − Over 15 years in real estate development Management presenters 2

 
TX G Green Brick at a glance  Uniquely structured residential land development and homebuilding company − We build and deliver homes through our current builders in which we own a 50% controlling interest − We sell lots and provide lot acquisition and vertical construction financing to our controlled builders  Currently focused on the high growth metropolitan areas of Dallas and Atlanta  Attractive land position of ~4,700 well-located residential lots as of March 31, 2016 − Approximately ~80% of our residential lots are owned − Virtually all of our owned lots are owned at corporate level vs. at the controlled builder level Products offered Townhomes, single family Single family Luxury homes Townhomes, contractor on luxury homes Townhomes, single family, luxury homes 3 Dallas CB JENI Normandy Homes Southgate Homes Centre Living Homes Atlanta The Providence Group Controlled builders

 
4 Housing starts are highly correlated to jobs and we build in two of the highest job growth markets.

 
We are less than 1.5% of the starts in two of the fastest growing housing markets, giving us significant opportunity for growth. 5

 
6 Our Dallas market has extremely low new home inventory

 
7 Our Atlanta market has extremely low new home inventory

 
GRBK has one of the lowest debt-to-capital ratios amongst public builders  GRBK net debt to capital is under 13% versus an average 50% for the public builder section  GRBK’s eventual target is approximately 35%. 8 GRBK Net Debt to Total Capital is as of March 31, 2016; the Net Debt to Total Capital of other public builders is as of Dec 31, 2015; “Net Debt” equals Total Debt minus Cash

 
1st quarter 2016 financial highlights  Q1 2016 versus Q1 2015: - Net new orders increased by 29% - Home sales revenues increased by 34% - Average sales price of homes delivered increased by 21% - Dollar value of units in backlog increased by 39% - Average sales price of units in backlog increased by 20% to over $461,000 9

 
1st quarter 2016 financial highlights (continued)  At March 31, 2016, we had 44 active selling communities, a year-over-year increase of 19%.  Lots owned and controlled increased year-over-year by 21% to 4,672 lots. 10

 
 We are a uniquely structured company that combines residential land development and homebuilding with strong sponsor ownership and controlling interests in our aligned homebuilders. Corporate structure 11 50%50%50%50% 80% 100%

 
Key takeaways  Our backlog grew 47% from December 31, 2015 to March 31, 2016, setting the stage for potential significant growth in 2016 and beyond.  Significant growth opportunities exist in Dallas and Atlanta ̶ two of the most attractive homebuilder markets in the U.S.  We have the balance sheet and management team to support significant growth  Proven success in executing our growth strategy with our controlled and aligned builders  Our operating model and low leverage results in superior risk adjusted returns. 12

 
Non-GAAP Reconciliation 13 (Unaudited, in thousands, except per share amounts) Quarter ended March 31, 2016 Basic Adjusted EPS Net income attributable to Green Brick — basic $3,094 Income tax provision attributable to Green Brick $1,423 Pre-tax income $4,517 Adjusted weighted-average number of shares outstanding — basic 48,814 Basic Adjusted EPS $0.09 Diluted Adjusted EPS Net income attributable to Green Brick — diluted $3,094 Income tax provision attributable to Green Brick $1,423 Pre-tax income $4,517 Adjusted weighted-average number of shares outstanding — diluted 48,831 Diluted Adjusted EPS $0.09 Homebuilding Gross Margin $14,699 Add back: Capitalized interest charged to cost of sales 977 Adjusted Homebuilding Gross Margin $15,676 Adjusted EPS Reconciliation and Adjusted Homebuilding Gross Margin

 

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