Green Brick Partners, Inc. (NASDAQ:GRBK) Q2 2019 Earnings Conference Call - Final Transcript
Aug 09, 2019 • 12:00 pm ET
Good afternoon, everyone, and welcome to Green Brick Partners Earnings Call for the second quarter ended June 30, 2019. [Operator Instructions]. A slideshow supporting today's presentation is available on Green Brick Partners website, www.greenbrickpartners.com. Go to Investors & Governance, then click on the option that says Reporting, then scroll down the page until you see the Second Quarter Investor Call Presentation. The company reminds you that during this conference call, it will make various forward-looking statements within the meaning of the safe harbor provisions of United States Private Securities Litigation Reform Act of 1995.
Investors are cautioned that such forward-looking statements with respect to revenues, earnings, performance, strategies, prospects and other aspects of the business of Green Brick Partners are based on current expectations and are subject to risks and uncertainties. A few factors could cause actual results or outcomes to differ materially from those indicated by such forward-looking statements. Please read the cautionary statement regarding forward-looking statements contained in the company's press release, which was released on Thursday, August 8, and the risk factors described in the company's most recent annual and quarterly filings with the Securities and Exchange Commission. Green Brick Partners undertakes no duty to update any forward-looking statements that are made during this call.
Today, the company will be referring to pretax income attributable to Green Brick; pretax income attributable to Green Brick as a percentage of total revenues; pretax income as a percentage of average invested capital, EBITDA, net income return on average equity and adjusted homebuilding gross margin, which are non-GAAP financial measures. The reconciliation of adjusted homebuilding gross margin to homebuilding gross margin and the reconciliation of net income attributable to Green Brick to adjusted pretax income attributable to Green Brick are both contained in the earnings release that Green Brick issued yesterday.
I would now like to turn the conference call over to green Brick's CEO, Jim Brickman. Please go ahead, sir.
James R. Brickman
Hi, everybody. With me is Rick Costello, our CFO; and Jed Dolson, the President of our Texas region. Thank you for joining our call. As the operator mentioned, the presentation that accompanies this call can be found on our webpage at www.greenbrickpartners.com. At the top of our webpage, click on Investors & Governance, then click on the option that says reporting, and then scroll down the page until you see the Second Quarter Investor Call Presentation. I'll give everybody a few seconds to get this done. Starting off the call, we had a great second quarter with record-tying earnings of $0.29, record residential unit revenue of $175 million and a record backlog of $331million. Our adjusted homebuilding gross margin increased 180 basis points to 23.3% in the second quarter of 2019 from 21.5% in the first quarter of 2019.
We expect earnings growth to inflect positively starting in the third quarter of 2019 on a year-over-year basis. Due to great progress with our Trophy Signature's home brand, we expect this entry-level platform for which the company now controls over 1,600 homesites,