GRBK - Earnings call transcript Q4 2021 | Green Brick Partners, Inc.

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Operator

Good afternoon, everyone and welcome to Green Brick’s Partners Earnings Call for the Fourth Quarter and Year ended December 31, 2021.

Following today’s remarks, we will hold a question-and-answer session.

As a reminder, this call is being recorded and will be available for playback. A slideshow supporting today’s presentation will accompany today’s webcast and is available on Green Brick Partners website, www.greenbrickpartners.com. From the homepage, please select reporting and presentations under Investor Relations and then navigate to the presentation named the Fourth Quarter 2021 Investor Call Presentation. States that statements conference the business. other its within provisions COVID-XX the operations, you make it Safe our financial reminds Reform on and of forward-looking Litigation of anticipated for aspects various the United the and company operational during XXXX, and XXXX call, this our will Harbor Act expectations The of Securities and including future Private prospects meaning of of impact statements results are our subject from forward-looking on to are current uncertainties are such Investors forth forward-looking cautioned materially and based to and expectations that in differ set those could or and statements. risks cause actual outcomes XX, the with the These annual in press fourth risks filings which earnings company’s and set risk quarterly Exchange and quarter our forth factors described and most XXXX the Tuesday, recent in was Commission. are March Securities release, released on forward-looking made Green update no duty undertakes to any are statements Brick that call. this Partners during

comments be financial required by our include release the the information G these regarding presentation yesterday addition, non-GAAP Regulation issued in website. other available reconciliation can the Brick metrics metrics. of metrics company’s that earnings the the will and In found these and Green on The

Green to the like now please would I Now, Jim conference Brick’s over Brickman. ahead. turn to CEO, go Brickman, Mr.

Jim Brickman

Costello, CFO Jed Dolson, and Hi, Thank With me you, Thanks everyone. for our operator. are our joining today. our Rick call COO.

fourth well and be things an focused our record-breaking over to of have as going year, jump our full we maximizing will In your slide wanted deck. changes over for your Rick to of and we pass to remarkable as In some for I time quarter made our who today. interest a Before providing to strategy. the spec overview into this highlights I attention will draw quarter presentation our questions, moment,

key update on our strategy, our financial Following will capital Rick's metrics, allocation investments. land remarks, cover I and an

provide Rick. and insight into kicking and Jed now to off market to conditions I'll closing our will demand. Rick? expansion Austin, Q&A, over my before remarks Finally, our it turn

Rick Costello

you thank 'XX. Please to And to of is XXXX to versus 'XX today QX Jim. for results. QX which Slide financial related fourth for four, all our us move joining highlights our Thanks, review quarter

During the any for total history quarter set residential Green the and Brick's results units quarter, fourth records for in revenues, EPS. revenues, company's

Now highlights. here are the

During QX setting our average XX% over increased that revenues for increased the XX% that which XX% in growth of record QX quarter, XXXX a 'XX, growth delivered and in we XXXX, were XXX an homes, a year-over-year revenues unit QX XXXX. units XX.X% Total of million QX we price. also $XXX increase combined in residential record represented that from with sales XX%

a points regarding margin basis peers. to margins XXXX focus and pace XXXX and than ASP, we QX later higher as over average sales our Home XX.X% price that levels backlog gross a our for also Now year-over-year. at gross believe will XX.X% QX our that on over [ph] note up to XXX we up was was our sustain I'll continue little discuss price

basis Best the improvement improving diluted our Forbes top our full for combine list. far increase When XXXX. XX to leverage, also growth QX QX Small QX revenues, our share strong growth, fact, experienced America's XXXX XXX% total our of margins named Companies in In was leverage, company QX bottom improvement year in ASP Brick XXXX XX% EPS outpacing of any over EPS unit increase XX% our to exceeded XXXX growth our in XXXX. an SG&A Green to both you prior line $X.XX per was a of for unit the of and points to addition down SG&A XXX QX for In and earnings and gross a X.X% XXXX from in QX

note of a structured we X.XX% our in rate well-received We X.X completed in at a Series average over our busy the capital preferred A $XXX by club an Capital. million fixed year a fourth term, million amount $XX Finally, agreement shares. December in Prudential and issued We the offering markets. had purchase of successfully Private the very of deal

of all completed again included added now banks in facility being related investors extended eight and line Voya. and year-over-year with to And million. been Prudential, lenders financial the million. to for to We total Hartford, and Securian added. new comparisons. Five accordion $XXX Our to new commitments Bearings, Please feature $XXX move $XXX amendment our was the commitments unsecured of highlights our full extension credit four maturity lender million a XXXX bringing of Slide December of have expansion group increased and The commitments, diverse we that an our of to have a year

and results For the history plus company's revenues controlled time on represent Green the revenues, in for units, record. year any ended year records owned and EPS XX/XX/XX Brick's set also for all residential lots total

Here are highlights. the

the delivered year which homes, represented full billion in were record of XXXX. revenues XX% a the For for that we full growth XXXX $X.X XX% increased year, Total XXXX. X,XXX over from

the of year. setting revenues XXX we that revenue year XX.X% full Home in over revenues up growth annual sales XXXX $X.XX year XXXX XX% XX,XXX far for lots. and the year Fortune growth XX% bottom to they leverage, said, with and the list. XX% I XX% of we've grew ending was and points controlled growth, growth rate total in a our metering Like all compounded virtually operations. of both by at XXXX XXX are like full our doubled has up one over grown six, of leverage year our discuss XX past XXXX. margin at our increase the full Green quarterly spec growing addition unit at over results, when significantly our was the of you and public record, our margins over on our unit record year, gross slide residential SG&A combine past unit growing line of years year Brick just and SG&A increased by And the Magazine's top we ASP XX%. fastest in XX% the basis the years year-over-year a builder. And XXXX. where turn And the were number companies our the six XX.X% EPS total XX% units diluted So And combined owned outpacing and the for our average fastest building up year, again the points for full up of an XX% impacts and two over sales, a a XX.X% in for growth to improved also basis total will for of to we of our for price increase growth lots improvement Please focus home named XXXX

were sales from net year in XXXX XXXX flat In net in orders meter to QX sales we with and full continued XXXX, net home XXXX QX XXXX. by sales our down as XX% sales. XXXX net Our were

to prices. a past result, units we increased to selling spec success XX% months better pre-sold selling margin units months XX as homes. specs less strength expect construction contribute under believe so holding margins all X return completion of better this the we margins our to mix This is our more pace capital. will of Managing operations, We believe units a spec completion risk back versus of continue of of than of has year. our to of us of to costs. total will and end QX As some We houses gross for the we to homes efficient corporate superior backlog is higher sales under of months gives a gross can as as we houses the meter construction increased four of total will sales before unmatched deciding sales spec mix return two in get aggressively, low level to and to construction from higher capture a under higher and units sale ahead construction year on a can XX% lead homes a

full $XXX,XXX of up were for and backlog year-over-year. QX full of and over year for is of XXX,XXX the $XXX,XXX XX.X% XX.X% year And ASP QX Our sales for the year. at average XXXX XX.X% end year-over-year price up our

of believe not turn demand result later full proactive it in session, Jim? of Jed's two over QX pace absorption please selling of per I'll up Jim. community we'll our per sales, a indicative in is absorption that but With our levels demand is community that but year of As recognize quarter metering about to the we XX% X.X and I'll, talk that ago. years units XXXX from

Jim Brickman

on focusing equity. I slide Okay. Please like where Thanks, a flip would to on Rick. return to start by seven

the for net For income the average on full equity XX.X% our annualized, return year. fourth was quarter

return Our at XX.X%. average equity on stands

income to the We unwavering last to average substantial conditions, components in period. XXX% to to sizable and return increase in Exceptional capital initiatives and on over two achieving owed by again brand simplified our with create This leverage XX% a results. plans. us design SG&A prioritizing level homes strong of focus we Trophy In with library positive and simplified allowed XXXX, Signature been market executed years, have have operational such net entry allocation of our over of communities absorption our expanded representing trophy critical approach a higher that has home all strategically Trophy a had revenue. packages equity increase closing

growth that two we by able by the to gross have basis margins basis see to over by points on also slide You XXX points expanding over years. will XX.X% capitalize this on XXX been year, and year this last

performing our peer of slide As the you we on some to see can in XX.X%. above industry, continued average well maintain margins best of the eight,

In where to spec process higher Our markets later the in prices higher focus Rick home pricing sell homes environment allows our we to strong us and wield achieve on therefore mentioned, we margins. to as in construction power. prices building raise continue at operations units can where are an

like Nine, our capital Slide next the On allocation. I to would address

new the very which significantly disciplined in continue subsidiaries growth, investing includes to executing exercise approach organic into and We a of growth expanding our builder markets. lot

finished forward. direct can success as our In home XXXX, of controlled year-over-year like lot show. increased into throughout land across exceeding indicators excuse discuss any development many lots far will robust moment, a expansion land of of by proportion Jed are our subsidiary our our such So XXXX, large growth position. of we X,XXX and attention it sites significance willingness XX, me, some lots $XXX to noteworthy over inventory delivering commit and announced our to gross XX% heavily announced, our a a owned pipeline spend our we on point what XXXX. our million to builders recently there a in XX to of communities we Austin. the On Slide In means for we would intend highlight margins. going higher as I believe invest we factor self-developing communities and lot our to coming our This peers metrics is in goal to of home to our our your We with key year, to

However, we on returns investment equity, risk importance Trophy communities lower Signature maintaining homes also the financial results on the Based will are on impressive our home note appropriate understand more that leverage to strong map, is XXX lots means basis. a incurred match leverage [ph]. almost are this our our for significant you our exceed also to adjusted X,XXX financial that sites. lower even On of allocated

affordable larger, utility reduce turn of like very now or conditions municipal believe proportion special prices. can demand. lots ways risk of even Dolson, per that improvement who districts the to lot will as have have is over and buying Austin such in the these as in these me, average well our I the risk $X,XXX mitigate our cost of capital districts municipal price districts fund and lot. long would case of we sizable of have development paper covering One call Jed further. thereby excuse of public be Jed? costs land a utility, we development also market communities development these life which as to Many under In an growth the these potential term submarkets, lots Trophy main communities, at longer

Jed Dolson

Jim. Thanks,

have construction XXX century as XX-XX product of the named our of in with with our will Downtown unit will as QX the Trophy closings Austin XX area as into XX. to XXXX, early start lot in cover news start maps to We the a Slides X, first development development Trophy February acres commence market home on entering announced Texas, XXXX. two and that where communities and Ranch. Elgin, as of Let's community The Green through debut purchased On Signature Trinity with of will we Austin XXX plan we XXXX for Brick sites homes. exciting land be joint miles Northeast make about see Austin We early Austin lines. developed neighborhood with XX its

to bullets employers our of Tesla who's The why the major unemployment, population two the exceptionally Samsung to will to many see and new excited. For have a have growth. low short a the is it's easy educated near we're plants, workforce city's on led who sizable city's maps, be The commute employers. major and and a located community

is no it's So lowest that also does a that, division. market and community realize said resell is levels that one surprise fifth Having make in largest of inventory we it one the of the the country. starts not

all incredibly an to in desire looked XX, of offerings. land So markets on tuned Slide side, all across the home at as we for our stay product continue Shifting Austin. ownership our in see gears demand we and additional strong to positions

earlier, were our been rather flat, As believe is home buyer of Rick the proactively net minds. forefront sales decrease interest on everyone's year this mentioned of orders indication of that full result demand. metering than our an although rates We have we know a our

some to affect we perspective interest buyers. put anticipate So rates how into we will rising our wanted

and level income average this to January, to December a we in the XX.X%, that limited up at stay go debt X% credit XX we of average on X% increase or as -- the appraisals. inventory for strong with debt home than inventory and loan under not had Overall, a demand Looking country, backend sales are of commonly XXXX pie. resell potentially for Slide to in would still of impact larger levels to more allowing could to try the referred by well score XXXX, order rates ratio home ratio a credit shown share our recipe all-time are below back see that the coupled buyer ratios home believe our to to buyer's We with XX% Resell lows to quality at at is share X%. ratios a in Should XXX. beyond. of backend continued income builders across most sales

months XXXX our X.X of cut months XXXX dropping In half from resale of was during of in in of X.X 'XX. in fact, months of to supply January supply supply January

can our believe a inventory. power believe us Home because We Value is of we pricing The see, coupled can average XX% lots. of release each raise has our of growth homes with supply the We afford only new job XX%. you price As appreciation mortgages. Austin to preference in for have of to per markets, X.X larger bigger high average month Burns will allow resale with creditworthy more versus national this markets continue buyers who prices Index and

to I remarks, turn Slide Before to back closing for this me sorry, some follow please Slide XX. Jim Seven,

new beyond how demand our is. for homes have Our indicative current the metrics chain challenges not we believe are demand of evaluating impacted for supply control. been strong by significantly And

we Here are the really to what seeing. you'll illustrate on see ground documented a teams have few our boots case studies

exceeding Echo lots we operate sale. with on bidding far sales seen of over In our four to our interest demand, home released biggest we communities revised at example, similar number demand for Georgia, Worth, list perspective accommodate our homebuyers. have an to sites division townhome XXXX our stories system. Dallas, for strategy one the incredible a market, Fort To of this released Atlanta, of For in Park,

In addition marketing on back to reducing spend incentives with cut market spend. significantly --

limited inventory, XXX disruptions believe digital overcome community to single we resale rates. supply a well-qualified with that For of coupled people interest or sign. and example, our marketing and In with able summary, generate were in of list XX sufficient are town buyers our the we one significant rising Texas of significant chain no to an homes, over using interest

closing I will remarks, up back Jim turn it to few Now a Jim? for

Jim Brickman

Thanks, to Okay. briefly Please Slide turn Jed. XX.

almost years I of mentioned have that capital. results two to equity total leading operating accomplished earlier, low return with over the philosophy inventory results we've maintaining lot record on and risen As debt core in industry investments XXX%

typically far has leverage Our below of peer group. and of financial absolute and this consistently often leverage the cap the metric and been has small been among midcap one peers lowest average the lowest

Slide meticulous to work this commitments focused our social and hard the a value financial performance, results of XX. our here I'd we to just are close the enhancing environmental, year shareholders capital in, our company and maintaining success, highlighting but our to of by Please by by strong visit disciplined our planning we investing team. everyone me, term in Our behaviors. in which defined Despite operate. remain and building the on long that excellence we on culmination also culture our approach by of our excuse our communities one are not governance like for

I expansion such oversee our governance source that, Q&A. making committee's society. As to of our efforts I turn over Operator? our to business and role our going for now operator the a in the the announce pleased am call will forward to With for value sustainability of

Operator

our the of your [Operator JPMorgan. line with question. instructions] And comes first Riha with [ph] question Please proceed from Mike

Unidentified Analyst

outside to the landscape for as of was I a your get the XXXX think framework closings home well Thanks. as focus you out Or guess good I haven't on all general, I in Good little in everyone. XXXX. ASP about I and a of I still the in to of count laid any on bit bit throughout of X,XXX how little the the delivery know sites Texas, the afternoon, community Congrats thanks hoping slides. information. year. morning in guidance direction but the to But a wanted results. to builders. believe for of it's the

Jim Brickman

Sure. Jim. is This Thanks, Mike.

be acquisition land development spend part figured in lumpy expensive we earlier gave the and little to mix as the depending color. of That we spend expect expecting neighborhood to entry communities was community growth bit add phase of growth. not out add Trophy some just digit just land anything a level When little into business. lower was to Rick, development we digit you It's me to you a that growth, communities have that. really ASP include on a Trophy it more our gets going that? did want land cost. The do some double the product of ASP, in we double are cost spend Let count

Rick Costello

year again bulk the the be counts the over as say of typically yearend end growth 'XX, should but to of of count as community well since low digit there digit ASP We numbers, we 'XX year beneath would I provide growth and the ending should provide community Yeah, low want of the double as be to don't those reference points. double the growth. is guidance, obvious end

Unidentified Analyst

there, in of this very was selling So I is trend bit do further on little for margins the higher helpful. of that XQ, sense. versus out of stands the, that margins One lot mix. dip XX% XX%, then the part cost question quarters I guess versus range of thing to to kind curious on, could a question I been of how a margins, the, home that you your the as a the Do sustainable? a any the two have XX% know be XX% makes forward? even I'd process about and you clear Appreciate a has it just, you going that's do construction any relates there that are sequentially. comments a given down success there current 'XX XQ gross inflation? last that. think three to of the was if into kind appreciation to thoughts XQ. XQ more of gross second than that of level price had on feel the obviously range sustainability of -- approach offsetting see like and one, that, current lot trend gross again due been don't But they it's kind No,

Jim Brickman

demand. Jed margins responsible operating Jim. planning part the is us in in question take and COO meeting margins shutter this our that I our room helping of the we Dolson take he's rest not still for you think could why Yeah, lot difficult going are to first any seeing dealing just really there's and the improvement of you of position probably with a because part and challenges at I'll expectations of environment. this of second for Jed, that that is buyer on explain just point said. and very don't the We our maintain because kind reduction be the But at

Jed Dolson

Yeah.

So, of metering selling potential the construction. Most to as are from perspective year. That the late and cost recipe the that chain later sales right of has delaying last we homes worked our until mitigate of supply fall, sales had a we delivered Jim lumber surprises packs mentioned, in by trying now in for are early well for us. were the winter stages

far marching feel we The goes. gross are So position for as as our quite about as good very XXXX expensive. lumber packs new

probably So and an continued would QX, affect new engineer value to early -- prices late but effort into those costs would we us minimize in QX are that, these raise

Unidentified Analyst

you pretty any stabilized worse, cycle And not Jed like the would -- upon, times seeing certainly they've but a now. direction not of right improve what going they we still to at getting they're other kind aren't much

Jed Dolson

and obviously times, live in the supply a cycle We've be of piece worse. in pandemic that now Yeah, unpredictability we pre are of not times short it's to getting of cycle that's matter elongated week. just is part that going a new norm kind but and realized It's correct. the the versus which

Unidentified Analyst

the, metering One I hoping Great. trends. still was higher pace know commentary any you're have let's demand the seen you on but impact I rates I sometimes that Any if some buyer sales weeks change market rates either way or in of a rise, even in last general its for one quick get could, change the filter the little that in in takes through marketplace. a or to four bit incentives in say noticed? it so you've traffic the to

Jim Brickman

no have in We incentives. had increase

favor. It's to really a actually the don't the that shifting a going still they're consumer. at all. think be tough direction builder's other see time We in I

robust strong. very So very, don't we demand see being it is anything and but

Jed Dolson

they With see a have existing And shop lot there, so of the interest more inventory rates typically the from what so pie The would takes all of but seeing because there's there's be metering and reset for to resale the figure increasing because releasing all. one of in you us adjustment, case, period period afford out builders. is of that adjust but sales, plenty a a out time to usually can an deals what lots of it out inventory not what would existing they few every at inventory is for. folks in can little preponderance and buyers we're healthy there, to have we're

Jim Brickman

that, just would their same. Mike say, market, also I see for rising have significantly keep basically typical footage payment yes, the in prices add would a gone markets our up, the wages to homes rate and square Mike, have I interest in we house but would trying and risen typically And just looking buyers smaller

country We're bigger seeing story all want not more successful one at right now, homes homes. are We that seeing the We're and across two now. much homes story right selling buyers in

Jed Dolson

Mike, are you're thing Apartments very are to other apartment as is, the rents full. continuing quickly. aware, escalate

our level Atlanta, in And very of unprecedented. for indicators there. Trophy's strong Dallas, is we business. in and Florida And the huge seeing really migration just are those entry demand So, markets course,

Unidentified Analyst

Appreciate Thanks much Great. it. so guys.

Operator

question. your comes Our proceed with the next Please from Carl line question of with Reichardt BTIG.

Carl Reichardt

the At looks by first, deck, the slide for thanks way Thanks new everybody. great.

it new -- isn't this you normal, portfolio think are normalized longer abnormal rest do combine business, different in for underwriting the the called What we looking? for a but do to sort Green for that if of you of are the compared Jed from piece a think then at the I markets businesses, of bits new think look term what absorptions if rest a pieces of and Signature Brick's pretend Trophy products you they Signatures absorptions are other and recently, for Trophy what Trophy Signatures you Let you the

Jim Brickman

with. think, I builders went meeting are top builder had we and of varies a in XX home it it's communities a we over Carl yesterday do We I we a that joint business from interesting. range a with the the think trades I that lot XX And and is And there, the XX a demand demand absorptions XX across there month. board. a for for The XX month. to think the seven right are there month now month a not

kind Rick expand trophies and we but dramatic pronounced companies. the think of some I in you I of highlighted see limb get in And those So, absorption have all spreading think continue the across, differences future. that versus rest trade more we're the and will the bases of to

Unidentified Analyst

go want You Jim? ahead, to

Jim Brickman

that. that all of for land Demand enough be that we but bought than XX, much based trades more want want works sure were always any didn't I follow underwrite of six to on because to us of ever understand conservative underwrite underwrite basis and really labor equation because Yeah, investors side Ted a sales said as up XX and I that that well. on or a we but upon make supply on community we most month. peers to eight could We're our neighborhoods didn't we conservative shareholders and and underwrote XX these when aren't there, the land aware the pretty our how and

Jed Dolson

have thing Carl, builders. be they half our that are traditionally two one bigger times I seen about the to other we rest have that the is that should of what absorption, communities is the are can pace a added Trophy higher community Trophy and as before count and

six somewhere units XXXX Trophy a at selling our at you assume and they expensive you they're and per definitely half X.X houses active of per how brands houses rest for one the be quarter, and between but would how a other and So XX of Trophy? that really is power and month, if six get, our XX things per on etcetera, maybe or community all take it So quarter it meter we I'm the horse. if times, two to sorry, communities depends X.X houses times for

Unidentified Analyst

Okay.

and to, want want six for day, got spot So the right constraints, core quarter hit pace balance, but is right. about of for for absorptions. the wouldn't damaged that you've XX those price as and be, try you then it to that model? we would where the to Rick, balance Trophy XX, end a Is to to raise the prices way That's don't think a quarter at probably point hit the to that price you supply gets the the you you sweet can the to get highest

Rick Costello

that's experience Yeah. we below our that's can to it, you quarter, but nine says, When Maybe three like higher. doing Jim Trophy you're think just conservatively. per about XX clearly month to per and be underwrite if four

Unidentified Analyst

Okay. last quarters orders Perfect. combination And and couple so down of of then overall been absorption count. community have the

at assuming point As over doesn't will that that particular that where change where look a is Jed's you you feel year inflect year supply positive quarter number comfortable a chain on again to there 'XX, you basis? feel

Rick Costello

Jed, all why that don't with you? studying been the you take that because time we've

Jed Dolson

Sorry. you this? Carl, could repeat

Unidentified Analyst

Yeah. overall over Which quarter XXXX, be and year? orders that will believe you do positive year

Jed Dolson

Rick, do year? poll last you have this for

Rick Costello

really the year. I sales know of half started second QX last we metering

and sure. So for Carl. QX QX

Jed Dolson

XXX last to Carl, we really, we even quarter to We we, sales. in really second slow down with things just want year over but get Yeah. of flow, the

until terms a that in wait we starts So XX, because over maybe we just at could maybe and rate greater spec. that of we're get higher to deliveries QX beat want percent in going than we XX,

know so that times, to we do going times cycle key what to are and going don't change the can that's everything. and the So the be cycle

Rick Costello

Carl, loaded. rear that be would end

Unidentified Analyst

Yeah.

That the cycle times would stay same. assume I'd Fair Okay. enough.

used or more I've two questions than my Okay. that.

over. it very I much, help. appreciate the So guys. turn will Really Thanks

Operator

B. your comes Riley. Our with the from line next of Alex question. - question Rygiel proceed Please

Alex Rygiel

why spec you talk in default by the time towards the and fourth stepped Thank more outlook cancel obviously was Can you much. that your homes about rates have quarter. that as close? to portfolio very shifts The up reduced

Rick Costello

Yeah. robust that lot some was comes buyers kicking a of you head such that well. rate well was one The full a first the it year under aberration. of a it a qualify when couldn't so obviously in to The a in months. January, function of out two is is February full X%, down lower have to QX closings quarter cancel as see and

those changed interpersonal just Some whatever folks, financing they or was. of lives his it or had their

you nothing see that change. that indicates So January, February is there's, or in as continuing there's

Jim Brickman

And, January. we a and in cancel February the than saw lower fact, rate

seeing we're accelerate, not the decelerate. market So

Alex Rygiel

help And year? pacing mentioned will hear. price Can good that in communities. of to you of us earlier sort It's the you occur one out higher this that calendar closing then understand some

Rick Costello

Well, you, back-blog, you in see case. a pretty our is high ASP always which the

have Jim the below basis, excited going overall rate You you're trophy be Does to always quite an a in those more get and builder to double to But be telling higher lot but lumpiness, backlog start a don't you a close lot of up in not backlog That's a I ASP full because few higher we going town -- communities is out the homes a have and and designed point out spec coming communities. see sense? and that do builder, before like of there. of should that price it And more originally QX we in much down. higher we going of just lack roll submarket we available most communities get on of off about a as good those the in going back just of is before no when QX don't then markets be said, in a that to of said, houses trophy year because measure dynamic make which had multiple available. settle by down availability, Frisco the Like it's digits. off, We're terms it's of DFW, started and appreciation. and still QX in we one dirt

Alex Rygiel

you. Very helpful. It sure does. Thank

Operator

from the proceed with And our of comes Wedbush. your Please question. James Mceniff with line question next

James Mceniff

Hey, everyone. good morning,

is Trophy Is just So margin you mix to gross goal level, the of bit? to, XX% that found little the and then that, a get function there's to question, pace maybe think, spec. by of, out to Jim, my from getting financial that Signature the you benefits a I earlier, it some that up have said sales first or ramping guys

Jim Brickman

like production off Trophy spec is, becoming build it's finally pre-sold GHL I think homes. our that than their obviously think more much It's but even us important along in the builder, with Florida growing. trying I that business, increase their a smaller of for part to across it's they're better sale at a board, they determined really

we homes, do we're it's across really just of only So building the is don't a units at that our really builder time, a because town in that's six home XX they're, pre-selling board, the lot and in

Rick Costello

the -- at depending to lot in or spec that at on a XX% his because close been pre-sold James, XX%, houses QX. who historically every QX point, we and have number of changes quarter that goes the more to

we because not not the range, trophy see And was of XX% of end to if in numbers our XX is sales. could easily being our that history. ourselves historic those at one So closings high XX% to higher, XX% were

So back historic now, the those we to but, but that, number the get that, see we'll go happy it to that ranges. for be we, could higher,

James Mceniff

And be thank Great. growth guidance digit with to count. and is both of do But most on progresses? comments some this you around that in half pretty expect for 'XX. as the on year fiscal double sequentially the as, And back know, it the to in on, Or maybe year-over-year roll come for and steep you then community going community roll decline I the most, loaded?

Jim Brickman

you can community on comp timing of kind Jed, growth? the our of help him

Jed Dolson

stay up to allowing are these XXX, year, would see forward. it I philosophies the us it the first the is Yeah, year. per add is communities of those phase, increased with, I would going lots half but that going half are which on -- coming you'll really I flat coming that, to think that second It's just of pretty XXX pick online the add get

Jim Brickman

not lots current we've made are of returns almost last XX,XXX One great other is, couple our resting most equity found, on balance sheet. those quarters over any having thing producing income. lots that on the really we

of of really So calls we're forward. some off nice this lot in not And we've And selling year. position bringing lot actually position. And such might be set had that we full of lots a we number lots. of builders going considering a because positions, a that were just but lot are in terms need have or short good our are our other builders income neighborhoods, little big for from

James Mceniff

that, the company might question this indicated sales pick be to up had last Well, number and was saw that my is the quarter thought land revenue so quarter, coming that be like, I down. back that other I going

pop need you Jim, revenue? up saying, for land start a back and to or higher that's to of going start we've are had, thinking you So that to level modeling what about those selling

Jim Brickman

we're we an right for us that anticipate part Jed didn't it's that and unsolicited our look being in really strategy at a number working, XXXX. -- Well, wild now. offers taking it's a had of We've a that of card

guess stay on I is tuned So the, the we're but it. that, answer sure considering

James Mceniff

my Thanks great. Okay, questions. taking for

Operator

Matt question. comes question of Tieton Management. your proceed the Please line Our Dhane with Capital next on with

Matthew Dhane

the quarter you. you I, level think picked increasing to I about are a the start here. the, there I see the ask down XXX, again? lower growth and and start Thank the XXX start expecting want to When to some in to, they in in fourth start

Jed Dolson

I high just, here of of take QX. in builders can same Jed deliveries only can our down function same That only so and story starts, handle in trade partners a And go can our message much. Matt that. it's Yes. kind QX. partially did or Hey, that, our here. the was

QX in a hundred which to our done we percent QX. kind we and of we in delivery next is and to had those batch, over a before get, buyers had had So could to transferred we homes start huge get really

we, helpful. when you'll we release when So numbers, I be our think one

with You'll be numbers. those happy

Matthew Dhane

Thanks, Great. Jed.

Operator

Housing Our with of Instructions] proceed Center. the line Please Barron Alex question. next with question your [Operator comes Research from

Alex Barron

if I that guys a Yeah, have what year are lines. I currently thanks. significant know your track two, increase percentage wanted of state idea buyers? people We sales you across to ask in that to or the are of those general types going you there's of are seeing. about buyers last in or been the migrating some Gentlemen who guys wondering was

Jim Brickman

harder that buying. Yeah. can a which more rent and before Jed, of will, answer it's It's difficult. you Jed renting is obviously in think be from rent, migrate bit, they're try and apartments that. some, becoming will people they to they will little Texas It part because attract than they're many

buy. But Florida they a Texas or seeing they terms do know or in rest you the question in So before address what migration? I the may of it's… it's, wanna Jed, a a you're new take have Georgia of

Jed Dolson

joint XX% at. rate. Yeah. our It, to cause it's difficult we Jim a mortgage capture mentioned, to We ventures, look very have we, as with at, look XX

are submarket. with markets, And we're our location data. by it's over based out-of-state even into XX% venture we out get not getting The, our that's are do all that I statement make buyers, partners. percentage as of buyers. of we mortgage seeing buyers product. we our, generalized higher we more buyer oftentimes still So joint And the affordable a in the but a significant a can But that at it Texas town see more submarket look buyers.

Alex Barron

have specific the Along buying I investors purchases same guys track you houses? you was helpful. lines policy or That's whether around Okay. wondering a if investor

Jim Brickman

comparable to We, also them. Yes, we our away which Georgia, like to And the out or investors for by We've either. optics. Alpharetta sector. And really see whether or that and to homes our close do the our we communities stay Germany don't balance do. business from off do sheet build investors approached with been unbelievable we don't they is we don't for sheet, communities sell and demand do we banking when build rent balance a infield to get for we you guys Frisco, to see really finally, Texas, want land

Alex Barron

And, to and choose you the to to returns don't not be owners? of don't you good of sell because communities full is it, or those types the as investors want because are

Rick Costello

be or of very, the an I single to, digits. then, the obviously because And you're sell all-cash Jim financing easier, to in investor, full. don't it's low on you're as sales we we if the, don't mentioned side, if the it's investor, the We, but harder want communities that's are

Alex Barron

Got it.

Jim Brickman

having We're Yeah.

Alex Barron

A separate?

Jim Brickman

same buyers, retail commissions sales sell almost guys you some strip but are our you of know of that's really not strategy we, we that, we real With aren't, out when almost at part all. can margin, and I all offering a the these home.

Alex Barron

comment lower? you also, Any can on rate guidance on the for guys And was tax XXXX. why tax On topic. a the rate can Okay. you offer separate

Jim Brickman

This, Rick?

Rick Costello

just next that the it'll probably year your infinitely much in change you allocation. the harder at but decrease harder XXXX returns had because it QX that, state just gone taxes hits year a we tax all of per at, And X,XXX, be up of to credits how at, it's on that. unit to the it's from on after from prior all a get based Oh, higher our energy get filed to interstate is that,

So it's, for be the closer XX% year. to to it's probably going

Alex Barron

Okay.

one could I one if And ask Thanks. last Okay.

Rick Costello

We've got please? another couple folks can along, we wanting to get if on move

Alex Barron

Okay.

I'll jump off. that. Thank about you. Sorry

Rick Costello

you. Thank

Operator

JMP with Our your line comes Aaron proceed with please Securities, the question. next on question Hecht of

Aaron Hecht

up happened sales was the those with margin? you some in land it margin next like looked so those really about this with that particular of on could sales pretty this that low. sales Doesn't the align land and to commentary year, guys, but low see quarter, Hey potential earnings anything have quarter strength a the

Rick Costello

builder. We Yeah, I exchange with can. public we another an did

exchange. a it's, really that's it but technically sale, So was an

Aaron Hecht

Okay.

Rick Costello

account we longevity a to that community in our increase us in helped wanted our submarket It and long-term. be

Aaron Hecht

preferred preferred Understood debt decide of How you over the and go the structure, capital balance with then guess your stock why, equity on I debt the strength potentially versus why you cost of that or you got to issuance. you sheet, preferred the on, did more given that did debt? terms the in issued,

Jim Brickman

Jim. is this I

investing longer just very One expected we were called term wanted thought correctly. thing this of we advantages second first XX matched And that in to interest the We of with type lock our is with, cost a that rise we that expanding into we, cost we were was that equity communities and matched of well, capital really these to we some asset land some of life we saw, larger, of positions. knew all, we and long the rates lower lowered better equity. in. And of million, term liability longer it

Aaron Hecht

guys. Appreciate it Thanks. it. Got

Rick Costello

Aaron. Thanks,

Operator

next JP And with our Mike Please comes your question, question proceed with from Morgan.

Unidentified Analyst

Right.

items? clarifications modeling XXXX. increasing terms of continue other equity from doubled in actually the million up those in, well as income in we of $XX from line for in, to as income at Should in other go similar equity trend the XXX,XXX a Just JVs the ‘XX JVs the and a almost see

Rick Costello

That's in Denver. park. is in the the the income Springs the always homes of and is most going of challenger out to but foot JV you'll income XX.X% investment And, Colorado be knocking the income. substantially XXK, other in unpredictable, Other they're see our as it

So improving. the their, piece Like their then our is second are mortgage of income the, business improving. And is all our ventures. biggest our brands to from

our that's correlated and to our top line capture and So, directly rates.

our that line are our going with top you you the business. up would see remain constant, the, if assume income JV So our is make, going and going, rates to capture going up

Unidentified Analyst

on And, Okay. to, and income the helpful. adjusted the upcoming you brick to interest tax green a the deduction. on the, just before closer No, Correct? that's said at XX% the attributable XXXX, non-controlling year rate, that rate for pretax tax to be for that would

Rick Costello

our have you after because to non-controlling, be back actually it don't it's partners. Well, for tax pay we out

income to a So the you your to income non-controlling attributable income, subtract pre-tax eligible to, brick. or you and that leftover out that, take green the is related pre-tax interest and or

net that So number,

Rick Costello

I at How it. look

Unidentified Analyst

That's misspoke, that's what Yeah. meant. but I maybe that's I

Rick. Yep. a lot, thanks page. So Thank we're on

Rick Costello

on You're target.

Operator

you and this Thank participation. have your the And asked you end question time. of reached session, the the and concludes also may for your disconnect and we line conference, this at today's

Green Brick Partners (GRBK) 2 Mar 222021 Q4 Earnings call transcript