Green Brick Partners Inc (GRBK) Q1 2024 Earnings Call Transcript Highlights: Record Earnings ...

GuruFocus Research
4 min read

In This Article:

  • Diluted Earnings Per Share (EPS): $1.82, a record for any first quarter in company history.

  • Homebuilding Gross Margin: Reached a new company high of 33.4%.

  • Book Value Per Share: Grew 27% from a year ago to $29.67 at the end of Q1 2024.

  • Return on Equity: Attractive at 25.5% for the quarter.

  • Debt to Total Capital Ratio: Decreased 550 basis points to 18.3%.

  • Net Debt to Total Capital Ratio: Dropped to 8.2%.

  • Net Income: Increased 30% to $83 million.

  • Revenue from Home Closings: $443 million for Q1 2024.

  • Net New Home Orders: 1,071, the second highest in company history.

  • Active Selling Communities: Increased 24% year over year to 98.

  • Backlog Value: Increased 32% year over year to $725 million.

  • SG&A as Percentage of Revenue: Increased 120 basis points year over year to 11.4%.

Release Date: May 02, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Record diluted earnings per share of $1.82 for Q1 2024, the highest for any first quarter in company history.

  • Achieved a homebuilding gross margin of 33.4%, leading the industry and marking a new company high.

  • Strong balance sheet with a net debt to total capital ratio of 8.2% and total debt to total capital ratio of 18.3%, one of the lowest among public homebuilding peers.

  • Increased home deliveries by 8% year-over-year to 821 homes, driven by increased levels of finished and finishing spec home inventory.

  • Net new home orders were 1,071 for Q1 2024, the second highest in company history, demonstrating strong demand despite higher interest rates.

Negative Points

  • Average selling price (ASP) declined 8.6% year-over-year to $540,000, influenced by the closing out of infill communities and opening new communities in surrounding infill adjacent areas.

  • Selling, General and Administrative expenses (SG&A) as a percentage of residential units revenue increased by 120 basis points year-over-year to 11.4%, primarily due to payroll and incentive compensation growth.

  • Equity income from unconsolidated entities decreased to $2.6 million in Q1 2024, down 38.6% year-over-year, following the sale of the company's interest in Challenger Homes.

  • Revenue from new home orders was slightly down year-over-year to $613 million due to the lower ASP.

  • Despite strong sales performance, the quarterly absorption rate moderated from record levels in Q1 of 2023.

Q & A Highlights

Q: Can you discuss the expectations for community count and starts for the rest of the year? A: Rick Costello, CFO, mentioned that while the company has seen a good pace of starts that has grown each quarter, they are not ready to issue specific guidance on community count.

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