James Brickman on capital allocation

About James Brickman

At Green Brick Partners' 2021 Investor Day, CEO and co-founder Jim Brickman discussed the company's financial performance and strategy. He stated that revenue had more than tripled and pre-tax earnings increased about six times over the prior five years, with compounded annual growth rates of 28 percent for revenue and 44 percent for pre-tax income since 2015. Brickman said the company expects to continue growing and leveraging SG&A so that earnings grow faster than revenues, and that its growth rate is accelerating. He noted that the company has been planning for succession and building bench strength to maintain a strong growth rate over the next five to ten years. Brickman described his personal experience with excessive debt during a prior downturn, saying he "avoided going broke or putting a single property or entity into bankruptcy" but lost much of his net worth, which he said explains why Green Brick Partners is one of the lower leveraged public builders. He stated the company expects to operate with no more than 35 percent debt to total capital. Brickman also mentioned that the company admires D.R. Horton as a competitor but now competes directly with them through its Trophy Signature Homes brand, and that Green Brick has a collaborative relationship with Meritage Homes on large transactions. He said the company has been selective in land acquisitions, saying "we've said no to a lot of deals this year" and will continue to do so until further through its lot supply.

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