Market Newsdesk

SEATTLE, Feb. 27, 2023 (GLOBE NEWSWIRE) — Adaptive Biotechnologies Corporation (“Adaptive Biotechnologies”) (Nasdaq: ADPT), a commercial stage biotechnology company that aims to translate the genetics of the adaptive immune system into clinical products to diagnose and treat disease, today announced it will be participating in the upcoming 43^rd Annual Cowen Healthcare Conference in Boston, Masssachusetts.

Adaptive Biotechnologies’ management is scheduled to participate in a fireside chat on Monday, March 6^th at 12:50 p.m. Eastern Time. Interested parties may access a live and archived webcast of the presentation on the “Investors” section of the company website at: www.adaptivebiotech.com.

About Adaptive Biotechnologies

Adaptive Biotechnologies (“we” or “our”) is a commercial-stage biotechnology company focused on harnessing the inherent biology of the adaptive immune system to transform the diagnosis and treatment of disease. We believe the adaptive immune system is nature’s most finely tuned diagnostic and therapeutic for most diseases, but the inability to decode it has prevented the medical community from fully leveraging its capabilities. Our proprietary immune medicine platform reveals and translates the massive genetics of the adaptive immune system with scale, precision and speed. We apply our platform to partner with biopharmaceutical companies, inform drug development, and develop clinical diagnostics across our two business areas: Minimal Residual Disease (MRD) and Immune Medicine. Our commercial products and clinical pipeline enable the diagnosis, monitoring, and treatment of diseases such as cancer, autoimmune disorders, and infectious diseases. Our goal is to develop and commercialize immune-driven clinical products tailored to each individual patient.

ADAPTIVE MEDIA

Erica Jones, Associate Director, Product Communications
206-279-2423
[email protected]

ADAPTIVE INVESTORS

Karina Calzadilla, Vice President, Investor Relations
201-396-1687
[email protected]

SAN FRANCISCO, Feb. 27, 2023 (GLOBE NEWSWIRE) — ContextLogic Inc. (d/b/a Wish) (NASDAQ: WISH), one of the world’s largest mobile ecommerce platforms, today announced that its management team plans to participate in the following investor conferences in March:

• Event: 10th Annual JMP Securities Technology Conference
• Date: Monday, March 6, 2023
• Location: San Francisco, Calif.
• Participation: One-on-one meetings only
• Event: Loop Capital Markets 2023 Virtual Investor Conference
• Date: Monday, March 13, 2023
• Participation: One-and-one meetings and fireside chat presentation
• Fireside Chat: 1:00 PM ET

Portfolio managers and analysts who wish to request a meeting should contact their sales representative at each sponsoring firm. A live webcast of the fireside chat presentation at the Loop Capital Markets Virtual Investor Conference can be accessed by selecting “Investor Calendar” under the “News & Events” section of the Wish IR website at https://ir.wish.com. A replay of the webcast will be archived following the presentation in the “Investor Calendar” section.

About Wish

Wish brings an affordable and entertaining shopping experience to millions of consumers around the world. Since our founding in San Francisco in 2010, we have become one of the largest global ecommerce platforms, connecting millions of value-conscious consumers to merchants all over the world. Wish combines technology and data science capabilities and an innovative discovery-based mobile shopping experience to create a highly-visual, entertaining, and personalized shopping experience for its users. For more information about the company or to download the Wish mobile app, visit www.wish.com or follow @Wish on Facebook, Instagram and TikTok or @WishShopping on Twitter and YouTube.

Investor contact:

Ralph Fong, Wish
[email protected]

Media contact:

Carys Comerford-Green, Wish
[email protected]

SALT LAKE CITY, Feb. 27, 2023 (GLOBE NEWSWIRE) — Clarus Corporation (NASDAQ: CLAR) (“Clarus” and/or the “Company”), a global company focused on the outdoor and consumer enthusiast markets, reported financial results for the fourth quarter and full year ended December 31, 2022.

Fourth Quarter 2022 Financial Summary vs. Same Year‐Ago
Quarter

• Sales of $104.2 million compared to $118.2 million.
• Gross margin was 34.6% compared to 36.1%.
• Net loss of $81.6 million, or $(2.20) per diluted share, compared to net income of $14.0 million, or $0.36 per diluted share. Net loss in Q4 2022 included a non-cash impairment charge of $92.3 million in the Adventure segment.
• Adjusted net income before non‐cash items of $7.3 million, or $0.20 per diluted share, compared to $17.4 million, or $0.45 per diluted share.
• Adjusted EBITDA of $10.6 million with an adjusted EBITDA margin of 10.2% compared to $20.0 million with an adjusted EBITDA margin of 16.9%.

2022 Financial Summary vs. 2021

• Sales increased 19% to $448.1 million compared to $375.8 million.
• Gross margin was 36.5% compared to 36.4%; adjusted gross margin was 36.5% compared to 37.7%.
• Net loss was $69.8 million, or $(1.88) per diluted share, compared to net income of $26.1 million, or $0.73 per diluted share. Net loss in 2022 included the $92.3 million non-cash impairment expense in the Adventure segment.
• Adjusted net income before non‐cash items was $45.3 million, or $1.22 per diluted share, compared to $52.5 million, or $1.47 per diluted share.
• Adjusted EBITDA of $63.0 million with an adjusted EBITDA margin of 14.1% compared to $61.5 million with an adjusted EBITDA margin of 16.4%.

Management
Commentary

“While 2022 will go down as one of our most challenging years given various macroeconomic headwinds, our brands were largely resilient, and our team was nimble and tenacious,” said Clarus President John Walbrecht. “As the challenges set-in, we acted quickly by pivoting to areas of our business experiencing less headwinds, and we prioritized expense reductions, free cash flow generation, and debt reduction.

“Our areas of focus were Precision Sports, as well markets outside of North American wholesale in our Outdoor segment. The results were evident as we drove a record fourth quarter in Precision Sports with sales growth of 10%. In Outdoor, our focus on Europe and our International Global Distributor (“IGD”) markets, which did not experience the magnitude of headwinds as North America, allowed us to drive constant currency growth in the fourth quarter of 15% in Europe and 7% in our IGD market. Our continued focus on apparel and our direct-to-consumer business in our Outdoor segment also helped to offset broader headwinds, growing 15% and 19% in the fourth quarter, respectively.

“The pivot towards liquidity improvement was also apparent during the fourth quarter. Our focus on reducing working capital and lowering costs allowed us to generate $30 million in free cash flow which we used to bring our leverage to the bottom end of our 2x to 3x target.

“As we look ahead, we intend to execute on the biggest opportunities within our existing segments and enhance our operational performance. We also plan to focus on our core consumer through community-centric investments in proven areas like our direct-to-consumer business. We expect that these actions will position us to return to sustainable profitable growth and, with that, strong shareholder value creation.

“Finally, we are excited by the recent announcement of Neil Fiske as the new President for Black Diamond. He will be responsible for accelerating growth and lifting profitability by capitalizing on attractive expansion opportunities across various categories, channels, and regions.”

Fourth Quarter 2022 Financial
Results

Sales in the fourth quarter were $104.2 million compared to $118.2 million in the same year‐ago quarter. The fourth quarter of 2022 included revenue contribution of $3.8 million from MAXTRAX, an acquisition completed on December 1, 2021. Organic sales were down 11% in the quarter, MAXTRAX contributed 2% and foreign currency exchange was a 3% headwind. Foreign currency exchange was unfavorable to sales by $3.7 million in the fourth quarter as the U.S. dollar continued to strengthen against the Euro and Australia dollar.

Sales in the Outdoor segment were $55.3 million, or $57.7 million on a constant currency basis, compared to $65.1 million in the year ago quarter. The decline primarily reflected inventory destocking trends at the Company’s key North American retail accounts, which were partially offset by growth in the direct-to-consumer channels and European and IGD markets. Precision Sport sales increased 10% to $30.3 million, reflecting continued strong demand and market share gains. Sales in the Adventure segment were $18.5 million, reflecting lower consumer demand given the challenging economic environment and constraints on new vehicle deliveries which impacted new product sales in both Australia and North America.

Gross margin in the fourth quarter was 34.6% compared to 36.1% in the year‐ago quarter due to higher freight costs and unfavorable foreign currency exchange movement. Higher freight costs negatively impacted gross margin by 90 basis points and foreign currency exchange had a 220-basis points impact.

Selling, general and administrative expenses in the fourth quarter were $33.1 million compared to $32.6 million in the same year‐ago quarter. The inclusion of MAXTRAX and higher rent and selling expenses at the Adventure segment were nearly offset by lower non-cash stock-based compensation for performance awards at the corporate level.

Net loss in the fourth quarter was $81.6 million, or $(2.20) per diluted share, compared to net income of $14.0 million, or $0.36 per diluted share, in the prior year quarter. Net loss in the fourth quarter of 2022 included a non-cash impairment charge of $92.3 million in the Adventure segment due to the decline in the Company’s stock price and lower sales and profitability in the segment compared to expectations.

Adjusted net income before non-cash items in the fourth quarter, which excludes non‐cash items and transaction costs, was $7.3 million, or $0.20 per diluted share, compared to $17.4 million, or $0.45 per diluted share, in the same year‐ago quarter.

Adjusted EBITDA in the fourth quarter was $10.6 million, or an adjusted EBITDA margin of 10.2%, compared to $20.0 million, or an adjusted EBITDA margin of 16.9%, in the same year‐ago quarter. The decline in adjusted EBITDA was driven by lower sales in the Adventure segment, as well as unfavorable movements in foreign currency exchange rates and higher freight costs.

Net cash provided by operating activities for the three months ended December 31, 2022, was $32.4 million compared to $16.8 million in the prior year quarter. Capital expenditures in the fourth quarter of 2022 were $2.0 million compared to $11.8 million in the prior year quarter, which included $9.5 million for the purchase of the existing Barnes facility in Mona, Utah. Free cash flow for the fourth quarter of 2022 was $30.3 million compared to $5.0 million in the prior year quarter due to collection of accounts receivable and reduced inventory levels compared to September 30, 2022.

Liquidity at December 31, 2022 vs. December 31, 2021

• Cash and cash equivalents totaled $12.1 million compared to $19.5 million.
• Total debt of $139.0 million compared to $141.5 million.
• The Company’s credit facility matures in April of 2027 and bears interest at a variable rate that was approximately 6.3% at December 31, 2022.
• Remaining access to approximately $98 million on the Company’s revolving line of credit.
• Net debt leverage ratio of 2.0x compared to 2.0x

Full Year 2022 Financial
Results

Sales in 2022 increased 19% to a record $448.1 million compared to $375.8 million in 2021. The increase includes revenue contribution of $77.0 million from Rhino-Rack, an acquisition completed on July 1, 2021, and $15.9 million from MAXTRAX, an acquisition completed on December 1, 2021. Full year 2022 sales increased 1% on a proforma basis compared to 2021. Full year 2022 sales were negatively impacted by unfavorable foreign currency exchange movements of nearly $9 million compared to 2021.

From a segment perspective, Outdoor sales were up 1% to $222.3 million compared to 2021, Precision Sport sales were up 21% to $132.9 million and Adventure sales were $92.9 million.

Gross margin in 2022 improved to 36.5% compared to 36.4% in 2021 primarily due to the fair value inventory adjustment from the 2021 acquisitions not repeating in 2022, partially offset by unfavorable foreign currency exchange and higher freight costs. Adjusted gross margin in 2022 was 36.5% compared to 37.7% in the year-ago quarter.

Selling, general and administrative expenses in 2022 were $135.0 million compared to $105.5 million in 2021. The increase was primarily due to the inclusion of Rhino-Rack and MAXTRAX for the full year along with higher costs related to payroll and stock compensation expense at the corporate level and higher investment in the retail and direct to consumer initiatives in the Outdoor segment.

Net loss in 2022 was $69.8 million, or $(1.88) per diluted share, compared to net income of $26.1 million, or $0.73 per diluted share, in the prior year. Net loss in 2022 included the $92.3 million non-cash impairment charge in the Adventure segment discussed above.

Adjusted net income before non‐cash items in 2022, which excludes non‐cash items and transaction costs, was $45.3 million, or $1.22 per diluted share, compared to an adjusted net income before non‐cash items of $52.5 million, or $1.47 per diluted share, in 2021.

Adjusted EBITDA in 2022 was $63.0 million, or an adjusted EBITDA margin of 14.1%, compared to $61.5 million, or an adjusted EBITDA margin of 16.4%, in 2021.

Net cash provided by operating activities for the year ended December 31, 2022, was $14.6 million compared to $(0.3) million in 2021. Capital expenditures in 2022 were $8.2 million compared to $17.4 million in the prior year. Free cash flow for the year ended December 31, 2022, was $6.4 million compared to $(17.7) million in the same year‐ago period. This increase is primarily due to lower capital expenditures in 2022.

2023 Outlook

The Company expects fiscal year 2023 sales of approximately $420 million and adjusted EBITDA of approximately $60 million, or an adjusted EBITDA margin of 14.3%. In addition, capital expenditures are expected to range between $7 – $8 million and free cash flow is expected to range between $35 – $40 million for the full year 2023. Implicit in these expectations is caution and conservatism considering the challenging macro environment, higher interest rates, and the uncertain impact these challenges might have on the consumer.

Net Operating Loss
(NOL)

The Company estimates that it has available net operating loss (the “NOLs”) carryforwards for U.S. federal income tax purposes of approximately $17.7 million, which includes $1.8 million of U.S. federal NOL carryforwards that expire on December 31, 2023. The Company’s common stock is subject to a rights agreement dated February 7, 2008, that is intended to limit the number of 5% or more owners and therefore reduce the risk of a possible change of ownership under Section 382 of the Internal Revenue Code of 1986, as amended. Any such change of ownership under these rules would limit or eliminate the ability of the Company to use its existing NOLs for federal income tax purposes. However, there is no guaranty that the Company will be able fully utilize the NOLs to offset current and future earnings or that the rights agreement will achieve the objective of preserving the value of the NOLs.

Conference
Call

The Company will hold a conference call today at 5:00 p.m. Eastern time to discuss its fourth quarter 2022 results.

Date: Monday, February 27, 2023
Time: 5:00 p.m. Eastern time (3:00 p.m. Mountain time)
Registration Link: https://register.vevent.com/register/BIb931aede3576408897b50ed55fa33007

To access the call by phone, please register via the live call registration link above and you will be provided with dial-in instructions and details. If you have any difficulty connecting with the conference call, please contact Gateway Group at 1-949-574-3860.

The conference call will be broadcast live and available for replay here and on the Company’s website at www.claruscorp.com.

A replay of the conference call will be available after 7:00 p.m. Eastern Time on the same day through February 27, 2024.

About Clarus Corporation

Headquartered in Salt Lake City, Utah, Clarus Corporation is a global leading designer, developer, manufacturer and distributor of best-in-class outdoor equipment and lifestyle products focused on the outdoor and consumer enthusiast markets. Our mission is to identify, acquire and grow outdoor “super fan” brands through our unique “innovate and accelerate” strategy. We define a “super fan” brand as a brand that creates the world’s pre-eminent, performance-defining product that the best-in-class user cannot live without. Each of our brands has a long history of continuous product innovation for core and everyday users alike. The Company’s products are principally sold globally under the Black Diamond^®, Rhino-Rack^®, MAXTRAX^®, Sierra^®, and Barnes^® brand names through outdoor specialty and online retailers, our own websites, distributors, and original equipment manufacturers. Our portfolio of iconic brands is well-positioned for sustainable, long-term growth underpinned by powerful industry trends across the outdoor and adventure sport end markets. For additional information, please visit www.claruscorp.com or the brand websites at www.blackdiamondequipment.com, www.rhinorack.com, www.maxtrax.com.au, www.sierrabullets.com, www.barnesbullets.com, www.pieps.com, or www.goclimbon.com.

Use of Non‐GAAP Measures

The Company reports its financial results in accordance with U.S. generally accepted accounting principles (“GAAP”). This press release contains the non-GAAP measures: (i) adjusted gross margin and adjusted gross profit, (ii) net income before non-cash items and related income per diluted share, and adjusted net income before non-cash items and related income per diluted share, (iii) earnings before interest, taxes, other income or expense, depreciation and amortization (“EBITDA”), EBITDA margin, adjusted EBITDA, and adjusted EBTIDA margin, and (iv) free cash flow (defined as net cash provided by operating activities less capital expenditures). The Company believes that the presentation of certain non-GAAP measures, i.e.: (i) adjusted gross margin and adjusted gross profit, (ii) net income before non-cash items and related income per diluted share, and adjusted net income before non-cash items and related income per diluted share, (iii) EBITDA, EBITDA margin, adjusted EBITDA and adjusted EBITDA margin, and (iv) free cash flow, provide useful information for the understanding of its ongoing operations and enables investors to focus on period- over-period operating performance, and thereby enhances the user’s overall understanding of the Company’s current financial performance relative to past performance and provides, along with the nearest GAAP measures, a baseline for modeling future earnings expectations. Non-GAAP measures are reconciled to comparable GAAP financial measures within this press release. The Company cautions that non-GAAP measures should be considered in addition to, but not as a substitute for, the Company’s reported GAAP results. Additionally, the Company notes that there can be no assurance that the above referenced non-GAAP financial measures are comparable to similarly titled financial measures used by other publicly traded companies.

Forward-Looking
Statements

Please note that in this press release we may use words such as “appears,” “anticipates,” “believes,” “plans,” “expects,” “intends,” “future,” and similar expressions which constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are made based on our expectations and beliefs concerning future events impacting the Company and therefore involve a number of risks and uncertainties. We caution that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements. Potential risks and uncertainties that could cause the actual results of operations or financial condition of the Company to differ materially from those expressed or implied by forward-looking statements in this release, include, but are not limited to, those risks and uncertainties more fully described from time to time in the Company’s public reports filed with the Securities and Exchange Commission, including under the section titled “Risk Factors” in the Company’s Annual Report on Form 10-K, and/or Quarterly Reports on Form 10-Q, as well as in the Company’s Current Reports on Form 8-K. All forward-looking statements included in this press release are based upon information available to the Company as of the date of this press release and speak only as of the date hereof. We assume no obligation to update any forward-looking statements to reflect events or circumstances after the date of this press release.

Company
Contacts:

John C. Walbrecht
President
Tel 1‐801‐993‐1344
[email protected]

Michael J. Yates
Chief Financial Officer
Tel 1‐801-993‐1304
[email protected]

Investor Relations
Contact:

Gateway Group, Inc.
Cody Slach
Tel 1‐949‐574‐3860
[email protected]

CLARUS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except per share amounts)
	December 31, 2022				December 31, 2021
Assets
Current assets
Cash	$	12,061			$	19,465
Accounts receivable, net		66,553				66,180
Inventories		147,072				129,354
Prepaid and other current assets		9,899				11,831
Income tax receivable		3,034				116
Total current assets		238,619				226,946
Property and equipment, net		43,010				42,826
Other intangible assets, net		55,255				73,683
Indefinite-lived intangible assets		82,901				128,271
Goodwill		62,993				118,090
Deferred income taxes		17,912				22,433
Other long-term assets		17,455				19,578
Total assets	$	518,145			$	631,827
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	27,052			$	31,488
Accrued liabilities		25,170				27,473
Income tax payable		421				4,437
Current portion of long-term debt		11,952				9,585
Total current liabilities		64,595				72,983
Long-term debt, net		127,082				131,948
Deferred income taxes		18,506				35,280
Other long-term liabilities		15,854				21,448
Total liabilities		226,037				261,659
Stockholders’ Equity
Preferred stock, $0.0001 par value per share; 5,000
shares authorized; none issued		–				–
Common stock, $0.0001 par value per share; 100,000 shares authorized;
41,637 and 41,105 issued and 37,048 and 37,094 outstanding, respectively		4				4
Additional paid in capital		679,339				662,996
Accumulated deficit		(336,843	)			(263,342	)
Treasury stock, at cost		(32,707	)			(24,440	)
Accumulated other comprehensive loss		(17,685	)			(5,050	)
Total stockholders’ equity		292,108				370,168
Total liabilities and stockholders’ equity	$	518,145			$	631,827

CLARUS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)
	Three Months Ended
	December 31, 2022				December 31, 2021
Sales
Domestic sales	$	56,224			$	65,170
International sales		47,958				53,013
Total sales		104,182				118,183
Cost of goods sold		68,124				75,501
Gross profit		36,058				42,682
Operating expenses
Selling, general and administrative		33,080				32,591
Transaction costs		87				2,571
Contingent consideration benefit		–				(1,605	)
Impairment of goodwill and indefinite-lived intangible assets		92,311				–
Total operating expenses		125,478				33,557
Operating (loss) income		(89,420	)			9,125
Other (expense) income
Interest expense, net		(2,835	)			(1,013	)
Other, net		806				(119	)
Total other expense, net		(2,029	)			(1,132	)
(Loss) income before income tax		(91,449	)			7,993
Income tax benefit		(9,845	)			(6,053	)
Net (loss) income	$	(81,604	)		$	14,046
Net (loss) income per share:
Basic	$	(2.20	)		$	0.39
Diluted		(2.20	)			0.36
Weighted average shares outstanding:
Basic		37,039				36,037
Diluted		37,039				38,980

CLARUS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)
	Twelve Months Ended
	December 31, 2022				December 31, 2021
Sales
Domestic sales	$	238,144			$	225,878
International sales		209,962				149,916
Total sales		448,106				375,794
Cost of goods sold		284,690				238,862
Gross profit		163,416				136,932
Operating expenses
Selling, general and administrative		135,039				105,494
Transaction costs		2,967				11,843
Contingent consideration expense (benefit)		493				(1,605	)
Impairment of goodwill and indefinite-lived intangible assets		92,311				–
Total operating expenses		230,810				115,732
Operating (loss) income		(67,394	)			21,200
Other income (expense)
Interest expense, net		(7,895	)			(2,939	)
Other, net		(1,842	)			(4,382	)
Total other expense, net		(9,737	)			(7,321	)
(Loss) income before income tax		(77,131	)			13,879
Income tax benefit		(7,351	)			(12,214	)
Net (loss) income	$	(69,780	)		$	26,093
Net (loss) income per share:
Basic	$	(1.88	)		$	0.79
Diluted		(1.88	)			0.73
Weighted average shares outstanding:
Basic		37,201				33,136
Diluted		37,201				35,686

CLARUS CORPORATION
RECONCILIATION FROM GROSS PROFIT TO ADJUSTED GROSS PROFIT
AND ADJUSTED GROSS MARGIN
THREE MONTHS ENDED
		December 31, 2022						December 31, 2021
Gross profit as reported		$	36,058			Gross profit as reported			42,682
Plus impact of inventory fair value adjustment			–			Plus impact of inventory fair value adjustment			1,309
Adjusted gross profit		$	36,058			Adjusted gross profit		$	43,991
Gross margin as reported			34.6%			Gross margin as reported			36.1%
Adjusted gross margin			34.6%			Adjusted gross margin			37.2%
TWELVE MONTHS ENDED
		December 31, 2022						December 31, 2021
Gross profit as reported		$	163,416			Gross profit as reported			136,932
Plus impact of inventory fair value adjustment			269			Plus impact of inventory fair value adjustment			4,769
Adjusted gross profit		$	163,685			Adjusted gross profit		$	141,701
Gross margin as reported			36.5%			Gross margin as reported			36.4%
Adjusted gross margin			36.5%			Adjusted gross margin			37.7%

CLARUS CORPORATION
RECONCILIATION FROM NET (LOSS) INCOME TO NET INCOME BEFORE NON-CASH ITEMS, ADJUSTED
NET INCOME BEFORE NON-CASH ITEMS AND RELATED EARNINGS PER DILUTED SHARE
(In thousands, except per share amounts)
	Three Months Ended
	December 31, 2022				Per Diluted Share				December 31, 2021				Per Diluted Share
Net (loss) income	$	(81,604	)		$	(2.20	)		$	14,046			$	0.36
Amortization of intangibles		3,586				0.10				3,863				0.10
Depreciation		1,826				0.05				1,649				0.04
Amortization of debt issuance costs		231				0.01				170				0.00
Stock-based compensation		2,219				0.06				3,063				0.08
Inventory fair value of purchase accounting		–				–				1,309				0.03
Impairment of goodwill and indefinite-lived intangible assets		92,311				2.49				–				–
Income tax benefit		(9,845	)			(0.27	)			(6,053	)			(0.16	)
Cash paid for income taxes		(1,484	)			(0.04	)			(1,631	)			(0.04	)
Net income before non-cash items	$	7,240			$	0.20			$	16,416			$	0.42
Transaction costs		87				0.00				2,571				0.07
Contingent consideration (benefit)		–				–				(1,605	)			(0.04	)
State cash taxes on adjustments		(2	)			(0.00	)			(21	)			(0.00	)
Adjusted net income before non-cash items	$	7,325			$	0.20			$	17,361			$	0.45

CLARUS CORPORATION
RECONCILIATION FROM NET (LOSS) INCOME TO NET INCOME BEFORE NON-CASH ITEMS, ADJUSTED
NET INCOME BEFORE NON-CASH ITEMS AND RELATED EARNINGS PER DILUTED SHARE
(In thousands, except per share amounts)
	Twelve Months Ended
	December 31, 2022				Per Diluted Share				December 31, 2021				Per Diluted Share
Net (loss) income	$	(69,780	)		$	(1.88	)		$	26,093			$	0.73
Amortization of intangibles		15,326				0.41				9,834				0.28
Depreciation		7,626				0.20				5,985				0.17
Amortization of debt issuance costs		824				0.02				505				0.01
Stock-based compensation		11,361				0.31				9,477				0.27
Inventory fair value of purchase accounting		269				0.01				4,769				0.13
Impairment of goodwill and indefinite-lived intangible assets		92,311				2.48				–				–
Income tax benefit		(7,351	)			(0.20	)			(12,214	)			(0.34	)
Cash paid for income taxes		(8,639	)			(0.23	)			(1,984	)			(0.06	)
Net income before non-cash items	$	41,947			$	1.13			$	42,465			$	1.19
Transaction costs		2,967				0.08				11,843				0.33
Contingent consideration (benefit)		493				0.01				(1,605	)			(0.04	)
State cash taxes on adjustments		(63	)			(0.00	)			(225	)			(0.01	)
Adjusted net income before non-cash items	$	45,344			$	1.22			$	52,478			$	1.47

CLARUS CORPORATION
RECONCILIATION FROM NET (LOSS) INCOME TO EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION, AND AMORTIZATION (EBITDA), AND ADJUSTED EBITDA
(In thousands)
	Three Months Ended
	December 31, 2022				December 31, 2021
Net (loss) income	$	(81,604	)		$	14,046
Income tax benefit		(9,845	)			(6,053	)
Other, net		(806	)			119
Interest expense, net		2,835				1,013
Operating (loss) income		(89,420	)			9,125
Depreciation		1,826				1,649
Amortization of intangibles		3,586				3,863
EBITDA		(84,008	)			14,637
Transaction costs		87				2,571
Contingent consideration benefit		–				(1,605	)
Inventory fair value of purchase accounting		–				1,309
Impairment of goodwill and indefinite-lived intangible assets		92,311				–
Stock-based compensation		2,219				3,063
Adjusted EBITDA	$	10,609			$	19,975

CLARUS CORPORATION
RECONCILIATION FROM NET (LOSS) INCOME TO EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION, AND AMORTIZATION (EBITDA), AND ADJUSTED EBITDA
(In thousands)
	Twelve Months Ended
	December 31, 2022				December 31, 2021
Net (loss) income	$	(69,780	)		$	26,093
Income tax benefit		(7,351	)			(12,214	)
Other, net		1,842				4,382
Interest expense, net		7,895				2,939
Operating (loss) income		(67,394	)			21,200
Depreciation		7,626				5,985
Amortization of intangibles		15,326				9,834
EBITDA		(44,442	)			37,019
Transaction costs		2,967				11,843
Contingent consideration expense (benefit)		493				(1,605	)
Inventory fair value of purchase accounting		269				4,769
Impairment of goodwill and indefinite-lived intangible assets		92,311				–
Stock-based compensation		11,361				9,477
Adjusted EBITDA	$	62,959			$	61,503

PEMBROKE, Bermuda, Feb. 27, 2023 (GLOBE NEWSWIRE) — James River Group Holdings, Ltd. (“James River” or the “Company”) (NASDAQ: JRVR) today reported fourth quarter 2022 net income available to common shareholders of $15.1 million ($0.40 per diluted share), compared to a net loss available to common shareholders of $66.3 million ($1.78 per diluted share) for the fourth quarter of 2021. Adjusted net operating income¹ for the fourth quarter of 2022 was $20.2 million ($0.53 per diluted share), compared to an adjusted net operating loss¹ of $67.5 million ($1.81 per diluted share) for the fourth quarter of 2021.

Fourth Quarter 2022 Highlights:

• Group combined ratio of 91.7% and Excess and Surplus Lines (“E&S”) segment combined ratio of 84.5% on business not subject to retroactive reinsurance accounting for loss portfolio transfers (the “combined ratio”). Unless specified otherwise, all underwriting performance ratios presented herein are for our business not subject to retroactive reinsurance accounting for loss portfolio transfers.
• E&S segment gross and net written premium growth of 11.3% and 20.5%, respectively, due to broad based growth, renewal rate increases and increased net retention.
• Net investment income increased 88.1% compared to the prior year quarter, and 31.9% sequentially compared to the third quarter of 2022, due to stronger returns from all asset classes.
• Adjusted net operating return on tangible common equity¹ of 23.5%.

Full Year 2022 Highlights:

• Group combined ratio of 93.5% was the lowest since 2014, and E&S segment combined ratio of 85.1% was the lowest since 2016.
• E&S segment gross and net written premium growth of 10.5% and 17.5%, respectively, with renewal rate increases averaging 10%.
• Underwriting profit of $49.6 million is the highest in the Company’s history and compares to the previous high of $29.5 million in 2016.
• Adjusted net operating return on tangible common equity¹ of 17.4%.

_______________________
¹ Adjusted net operating income (loss) and adjusted net operating return on tangible common equity are non-GAAP financial measures. See “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” at the end of this press release.

Frank D’Orazio, the Company’s Chief Executive Officer, commented, “The fourth quarter of 2022 capped a year of significant progress and profitable momentum for James River, while positioning the Company extremely well for the future. We continue to take advantage of compelling underwriting conditions in our insurance businesses, generating attractive growth, and validating the strength of our underwriting franchise. Moreover, we have decided to suspend underwriting activities in our Casualty Reinsurance segment, which we believe repositions the Company around its core strengths.”

Fourth Quarter 2022 Operating Results

• Gross written premium of $378.4 million, consisting of the following:

	Three Months Ended December 31,
($ in thousands)	2022			2021			% Change
Excess and Surplus Lines	$	245,462		$	220,612		11	%
Specialty Admitted Insurance		116,142			114,161		2	%
Casualty Reinsurance		16,821			72,526		(77	)%
	$	378,425		$	407,299		(7	)%

• Net written premium of $187.7 million, consisting of the following:

	Three Months Ended December 31,
($ in thousands)	2022			2021			% Change
Excess and Surplus Lines	$	156,358		$	129,773		20	%
Specialty Admitted Insurance		18,866			17,854		6	%
Casualty Reinsurance		12,454			70,340		(82	)%
	$	187,678		$	217,967		(14	)%

• Net earned premium of $199.9 million, consisting of the following:

	Three Months Ended December 31,
($ in thousands)	2022			2021			% Change
Excess and Surplus Lines	$	147,317		$	134,587		9	%
Specialty Admitted Insurance		18,854			20,715		(9	)%
Casualty Reinsurance		33,715			36,386		(7	)%
	$	199,886		$	191,688		4	%

• E&S gross written premium for the fourth quarter of 2022 increased 11.3% compared to the prior year quarter, while net written premium increased 20.5% due to higher net retention within our excess casualty unit. Premium growth was broad based, with nine of thirteen underwriting divisions experiencing growth, led by general casualty, excess casualty and manufacturers and contractors. Renewal rate increases were 6.5% during the fourth quarter of 2022. This represents the twenty-fourth consecutive quarter of renewal rate increases compounding to 64.2%.
• Gross written premium for the Specialty Admitted Insurance segment increased 1.7% from the prior year quarter. During the quarter there was a combined 8.0% reduction to premium from our individual risk workers’ compensation business and our large workers’ compensation fronted program. The remaining segment premium increased 7.5% despite the loss of a fronting partner that was acquired at the end of 2021.
• Gross written premium in the Casualty Reinsurance segment decreased 76.8% compared to the prior year quarter primarily driven by the non-renewal of several treaties, as discussed previously. For the full year 2022, gross written premium declined 53.2% and was approximately in-line with our previously disclosed plan. The earning patterns of the business can extend over multiple years, so declines in net earned premium for this segment will lag the expected decline in gross and net written premium and for that reason, we expect to continue to have earned premium during 2023.
• Pre-tax favorable (unfavorable) reserve development by segment on business not subject to retroactive reinsurance accounting for loss portfolio transfers was as follows:

	Three Months Ended December 31,
($ in thousands)	2022				2021
Excess and Surplus Lines	$	258			$	17
Specialty Admitted Insurance		1,400				—
Casualty Reinsurance		(6,630	)			(115,013	)
	$	(4,972	)		$	(114,996	)

• During the fourth quarter of 2022, the Company reported modest favorable reserve development in E&S and Specialty Admitted segments. The Casualty Reinsurance segment experienced higher reported loss trends during the fourth quarter of 2022, which resulted in adverse development on treaties subject to the Casualty Reinsurance loss portfolio transfer retrocession agreement (the “Casualty Reinsurance LPT”) and select treaties not subject to the Casualty Reinsurance LPT. Adverse development on treaties not subject to the Casualty Reinsurance LPT totaled $6.6 million. The Company also recognized a $6.1 million increase in losses subject to the Casualty Reinsurance LPT.
• Gross fee income was as follows:

	Three Months Ended December 31,
($ in thousands)	2022			2021			% Change
Specialty Admitted Insurance	$	6,267		$	6,474		(3	)%

• The consolidated expense ratio was 23.9% for the fourth quarter of 2022, and increased from 13.9% in the prior year fourth quarter. The expense ratio in the prior year period benefited from favorable commission expense adjustments related to prior accident year losses in the Casualty Reinsurance segment that had a 6.6 point impact on the consolidated expense ratio, as well as higher ceding commission in our E&S segment prior to our change in retention effective in the third quarter of 2022 and lower compensation expenses.

Investment Results

Net investment income for the fourth quarter of 2022 was $22.8 million, an increase of 88.1% compared to $12.1 million for the same period in 2021. Growth in income from fixed maturities, bank loans and equities was 66.4% compared to the prior year quarter, and was driven by higher yields and growth in the portfolio from positive operating cash flow. During the fourth quarter of 2022, a portion of the Company’s renewable energy investments were sold and resulted in a gain of approximately $1.0 million. This sale increased income from renewable energy investments during the period.

The Company’s net investment income consisted of the following:

	Three Months Ended December 31,
($ in thousands)	2022			2021				% Change
Renewable Energy Investments	$	1,339		$	(1,134	)		NM
Other Private Investments		83			406			(80	)%
All Other Net Investment Income		21,411			12,867			66	%
Total Net Investment Income	$	22,833		$	12,139			88	%

The Company’s annualized gross investment yield on average fixed maturity, bank loan and equity securities for the three months ended December 31, 2022 was 4.0% (as compared to 2.8% for the three months ended December 31, 2021). The investment yield increased primarily as a result of higher market yields on fixed maturity securities and bank loans.

Net realized and unrealized gains on investments of $1.6 million for the three months ended December 31, 2022 compares to net realized and unrealized gains on investments of $1.8 million in the prior year quarter. The majority of the realized and unrealized gains during the fourth quarter of 2022 were related to changes in fair values of our small portfolio of common equity securities.

Taxes

The Company’s effective tax rate fluctuates from period to period based on the relative mix of income reported by country and the respective tax rates imposed by each tax jurisdiction. The effective tax rate for the year ended December 31, 2022 was 37.3%. The tax rate is impacted by the geographic mix of income, as losses in Bermuda do not create tax deductions for the Company.

Tangible Equity

Tangible equity² of $501.2 million at December 31, 2022 increased 5.6% compared to tangible equity of $474.9 million at September 30, 2022, due to net income available to common shareholders and a decrease in unrealized losses in the Company’s fixed maturity portfolio. Accumulated other comprehensive (loss) income (“AOCI”) improved by $12.2 million during the fourth quarter of 2022, due to an increase in the value of the Company’s fixed maturity securities.

Tangible equity excluding AOCI was $664.3 million at December 31, 2022 compared to $477.5 million at December 31, 2021, with the increase driven by positive net income and proceeds from the Series A preferred shares issued during the first quarter of 2022.

_______________________
² Tangible equity is a non-GAAP financial measure. See “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” at the end of this press release.

Capital Management

The Company announced that its Board of Directors declared a cash dividend of $0.05 per common share. This dividend is payable on March 31, 2023 to all shareholders of record on March 13, 2023.

Conference Call

James River will hold a conference call to discuss its fourth quarter results tomorrow, February 28, 2023 at 8:30 a.m. Eastern Time. Investors may access the conference call by dialing (800) 715-9871, Conference ID 3314205, or via the internet by visiting www.jrvrgroup.com and clicking on the “Investor Relations” link. A webcast replay of the call will be available by visiting the company website.

Forward-Looking Statements

This press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. In some cases, such forward-looking statements may be identified by terms such as believe, expect, seek, may, will, should, intend, project, anticipate, plan, estimate, guidance or similar words. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Although it is not possible to identify all of these risks and uncertainties, they include, among others, the following: the inherent uncertainty of estimating reserves and the possibility that incurred losses may be greater than our loss and loss adjustment expense reserves; inaccurate estimates and judgments in our risk management may expose us to greater risks than intended; downgrades in the financial strength rating of our regulated insurance subsidiaries impacting our ability to attract and retain insurance and reinsurance business that our subsidiaries write, our competitive position, and our financial condition; the potential loss of key members of our management team or key employees and our ability to attract and retain personnel; adverse economic factors resulting in the sale of fewer policies than expected or an increase in the frequency or severity of claims, or both; the impact of a persistent high inflationary environment on our reserves, the values of our investments and investment returns, and our compensation expenses; exposure to credit risk, interest rate risk and other market risk in our investment portfolio; reliance on a select group of brokers and agents for a significant portion of our business and the impact of our potential failure to maintain such relationships; reliance on a select group of customers for a significant portion of our business and the impact of our potential failure to maintain, or decision to terminate, such relationships; our ability to obtain reinsurance coverage at prices and on terms that allow us to transfer risk, adequately protect our company against financial loss and that supports our growth plans; losses resulting from reinsurance counterparties failing to pay us on reinsurance claims, insurance companies with whom we have a fronting arrangement failing to pay us for claims, or a former customer with whom we have an indemnification arrangement failing to perform its reimbursement obligations, and our potential inability to demand or maintain adequate collateral to mitigate such risks; inadequacy of premiums we charge to compensate us for our losses incurred; changes in laws or government regulation, including tax or insurance law and regulations; changes in U.S. tax laws and the interpretation of certain provisions of the 2017 Tax Act (including associated regulations), which may be retroactive and could have a significant effect on us including, among other things, by potentially increasing our tax rate, as well as on our shareholders; in the event we do not qualify for the insurance company exception to the passive foreign investment company (“PFIC”) rules and are therefore considered a PFIC, there could be material adverse tax consequences to an investor that is subject to U.S. federal income taxation; the Company or any of its foreign subsidiaries becoming subject to U.S. federal income taxation; a failure of any of the loss limitations or exclusions we utilize to shield us from unanticipated financial losses or legal exposures, or other liabilities; losses from catastrophic events, such as natural disasters and terrorist acts, which substantially exceed our expectations and/or exceed the amount of reinsurance we have purchased to protect us from such events; the effects of the COVID-19 pandemic and associated government actions on our operations and financial performance; potential effects on our business of emerging claim and coverage issues; the potential impact of internal or external fraud, operational errors, systems malfunctions or cyber security incidents; our ability to manage our growth effectively; failure to maintain effective internal controls in accordance with the Sarbanes-Oxley Act of 2002, as amended (“Sarbanes-Oxley”); changes in our financial condition, regulations or other factors that may restrict our subsidiaries’ ability to pay us dividends; and an adverse result in any litigation or legal proceedings we are or may become subject to. Additional information about these risks and uncertainties, as well as others that may cause actual results to differ materially from those in the forward-looking statements, is contained in our filings with the U.S. Securities and Exchange Commission (“SEC”), including our most recently filed Annual Report on Form 10-K. These forward-looking statements speak only as of the date of this release and the Company does not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

Non-GAAP Financial Measures

In presenting James River Group Holdings, Ltd.’s results, management has included financial measures that are not calculated under standards or rules that comprise accounting principles generally accepted in the United States (“GAAP”). Such measures, including underwriting profit (loss), adjusted net operating income (loss), tangible equity, tangible common equity, adjusted net operating return on tangible equity (which is calculated as annualized adjusted net operating income (loss) divided by the average quarterly tangible equity balances in the respective period), and adjusted net operating return on tangible common equity (which is calculated as annualized adjusted net operating income (loss) divided by the average quarterly tangible common equity balances in the respective period), are referred to as non-GAAP measures. These non-GAAP measures may be defined or calculated differently by other companies. These measures should not be viewed as a substitute for those measures determined in accordance with GAAP. Reconciliations of such measures to the most comparable GAAP figures are included at the end of this press release.

About James River Group Holdings, Ltd.

James River Group Holdings, Ltd. is a Bermuda-based insurance holding company that owns and operates a group of specialty insurance and reinsurance companies. The Company operates in three specialty property-casualty insurance and reinsurance segments: Excess and Surplus Lines, Specialty Admitted Insurance and Casualty Reinsurance. Each of the Company’s regulated insurance subsidiaries are rated “A-” (Excellent) by A.M. Best Company.

Visit James River Group Holdings, Ltd. on the web at www.jrvrgroup.com

For more information contact:

Brett Shirreffs
SVP, Finance, Investments and Investor Relations
[email protected]

James River Group Holdings, Ltd. and Subsidiaries

Condensed Consolidated Balance Sheet Data

(Unaudited)

($ in thousands, except for share data)	December 31, 2022			December 31, 2021
ASSETS
Invested assets:
Fixed maturity securities, available-for-sale, at fair value	$	1,783,417		$	1,677,561
Equity securities, at fair value		118,627			108,410
Bank loan participations, at fair value		154,991			156,043
Short-term investments		107,812			136,563
Other invested assets		27,447			51,908
Total invested assets		2,192,294			2,130,485
Cash and cash equivalents		173,164			190,123
Restricted cash equivalents (a)		103,215			102,005
Accrued investment income		14,418			11,037
Premiums receivable and agents’ balances, net		340,525			393,967
Reinsurance recoverable on unpaid losses, net		1,520,113			1,348,628
Reinsurance recoverable on paid losses		114,242			82,235
Deferred policy acquisition costs		59,603			68,526
Goodwill and intangible assets		217,507			217,870
Other assets		401,994			403,674
Total assets	$	5,137,075		$	4,948,550
LIABILITIES AND SHAREHOLDERS’ EQUITY
Reserve for losses and loss adjustment expenses	$	2,768,995		$	2,748,473
Unearned premiums		676,016			727,552
Funds held (a)		310,953			97,360
Deferred reinsurance gain		20,091			0
Senior debt		222,300			262,300
Junior subordinated debt		104,055			104,055
Accrued expenses		59,566			57,920
Other liabilities		276,435			225,528
Total liabilities		4,438,411			4,223,188
Series A redeemable preferred shares		144,898			0
Total shareholders’ equity		553,766			725,362
Total liabilities, Series A redeemable preferred shares, and shareholders’ equity	$	5,137,075		$	4,948,550
Tangible equity (b)	$	501,248		$	507,492
Tangible equity per share outstanding (b)	$	11.63		$	13.58
Shareholders’ equity per share outstanding	$	14.78		$	19.41
Common shares outstanding		37,470,237			37,373,066
(a) Restricted cash equivalents and the funds held liability includes funds posted by the Company to a trust account for the benefit of a third party administrator handling the claims on the Rasier commercial auto policies in run-off. Such funds held in trust secure the Company’s obligations to reimburse the administrator for claims payments, and are primarily sourced from the collateral posted to the Company by Rasier and its affiliates to support their obligations under the indemnity agreements and the loss portfolio transfer reinsurance agreement with the Company. The funds held liability also includes a notional funds withheld account balance related to the loss portfolio transfer retrocession transaction that our Casualty Reinsurance segment entered into in the first quarter of 2022, which will be reduced on a quarterly basis by paid losses on the subject business.
(b) See “Reconciliation of Non-GAAP Measures”

James River Group Holdings, Ltd. and Subsidiaries

Condensed Consolidated Income (Loss) Statement Data

(Unaudited)

	Three Months Ended December 31,								Twelve Months Ended December 31,
($ in thousands, except for share data)	2022				2021				2022				2021
REVENUES
Gross written premiums	$	378,425			$	407,299			$	1,496,580			$	1,507,299
Net written premiums		187,678				217,967				748,479				744,380
Net earned premiums		199,886				191,688				766,161				695,594
Net investment income		22,833				12,139				71,111				56,865
Net realized and unrealized gains (losses) on investments		1,556				1,826				(28,318	)			15,564
Other income		1,438				1,687				4,742				4,857
Total revenues		225,713				207,340				813,696				772,880
EXPENSES
Losses and loss adjustment expenses (a)		134,829				242,774				544,814				792,352
Other operating expenses		48,876				28,278				195,557				164,692
Other expenses		5,419				354				5,997				2,585
Interest expense		6,287				2,230				17,578				8,922
Amortization of intangible assets		91				91				363				363
Total expenses		195,502				273,727				764,309				968,914
Income (loss) before taxes		30,211				(66,387	)			49,387				(196,034	)
Income tax expense (benefit)		12,486				(94	)			18,414				(23,235	)
NET INCOME (LOSS)	$	17,725			$	(66,293	)		$	30,973			$	(172,799	)
Dividends on Series A preferred shares		(2,625	)			0				(8,750	)			0
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS	$	15,100			$	(66,293	)		$	22,223			$	(172,799	)
ADJUSTED NET OPERATING INCOME (LOSS) (b)	$	20,151			$	(67,465	)		$	69,542			$	(184,245	)
INCOME (LOSS) PER COMMON SHARE
Basic	$	0.40			$	(1.78	)		$	0.59			$	(4.94	)
Diluted	$	0.40			$	(1.78	)		$	0.59			$	(4.94	)
ADJUSTED NET OPERATING INCOME (LOSS) PER COMMON SHARE
Basic	$	0.54			$	(1.81	)		$	1.86			$	(5.27	)
Diluted	$	0.53			$	(1.81	)		$	1.85			$	(5.27	)
Weighted-average common shares outstanding:
Basic		37,463,802				37,318,807				37,442,856				34,956,957
Diluted		37,675,679				37,318,807				37,650,969				34,956,957
Cash dividends declared per common share	$	0.05			$	0.30			$	0.20			$	1.20
Ratios:
Loss ratio		67.8	%			126.7	%			68.5	%			113.9	%
Expense ratio (c)		23.9	%			13.9	%			25.0	%			23.0	%
Combined ratio		91.7	%			140.6	%			93.5	%			136.9	%
Accident year loss ratio		65.3	%			66.7	%			67.3	%			67.1	%
Accident year loss ratio ex-catastrophe losses		65.3	%			66.7	%			66.7	%			66.4	%
(a) Losses and loss adjustment expenses include a $0.7 million benefit and a $20.1 million expense for unrecognized deferred retroactive reinsurance gain for the three and twelve months ended December 31, 2022, respectively.
(b) See “Reconciliation of Non-GAAP Measures”.
(c) Calculated with a numerator comprising other operating expenses less gross fee income (in specific instances when the Company is not retaining insurance risk) included in “Other income” in our Condensed Consolidated Income Statements of $1.1 million and $3.8 million for the three and twelve months ended months ended December 31, 2022, respectively ($1.6 million and $4.5 million in the respective prior year periods), and a denominator of net earned premiums.

James River Group Holdings, Ltd. and Subsidiaries

Segment Results

EXCESS AND SURPLUS LINES

	Three Months Ended December 31,											Twelve Months Ended December 31,
($ in thousands)	2022				2021				% Change			2022				2021				% Change
Gross written premiums	$	245,462			$	220,612			11.3	%		$	921,164			$	833,657			10.5	%
Net written premiums	$	156,358			$	129,773			20.5	%		$	589,056			$	501,250			17.5	%
Net earned premiums	$	147,317			$	134,587			9.5	%		$	555,597			$	486,000			14.3	%
Losses and loss adjustment expenses excluding retroactive reinsurance		(95,888	)			(87,749	)		9.3	%			(366,352	)			(516,299	)		(29.0	)%
Underwriting expenses		(28,571	)			(22,760	)		25.5	%			(106,194	)			(91,179	)		16.5	%
Underwriting profit (loss) (a)	$	22,858			$	24,078			(5.1	)%		$	83,051			$	(121,478	)		—
Ratios:
Loss ratio		65.1	%			65.2	%						65.9	%			106.2	%
Expense ratio		19.4	%			16.9	%						19.2	%			18.8	%
Combined ratio		84.5	%			82.1	%						85.1	%			125.0	%
Accident year loss ratio		65.3	%			65.2	%						66.0	%			67.0	%
Accident year loss ratio ex-catastrophe losses		65.3	%			65.2	%						65.1	%			66.0	%
(a) See “Reconciliation of Non-GAAP Measures”.

SPECIALTY ADMITTED INSURANCE

	Three Months Ended December 31,											Twelve Months Ended December 31,
($ in thousands)	2022				2021				% Change			2022				2021				% Change
Gross written premiums	$	116,142			$	114,161			1.7	%		$	490,208			$	491,561			(0.3	)%
Net written premiums	$	18,866			$	17,854			5.7	%		$	76,390			$	83,935			(9.0	)%
Net earned premiums	$	18,854			$	20,715			(9.0	)%		$	74,137			$	75,371			(1.6	)%
Losses and loss adjustment expenses		(14,519	)			(16,504	)		(12.0	)%			(58,548	)			(55,875	)		4.8	%
Underwriting expenses		(1,847	)			(1,032	)		79.0	%			(11,355	)			(9,829	)		15.5	%
Underwriting profit (a), (b)	$	2,488			$	3,179			(21.7	)%		$	4,234			$	9,667			(56.2	)%
Ratios:
Loss ratio		77.0	%			79.7	%						79.0	%			74.1	%
Expense ratio		9.8	%			5.0	%						15.3	%			13.1	%
Combined ratio		86.8	%			84.7	%						94.3	%			87.2	%
Accident year loss ratio		84.4	%			79.7	%						84.6	%			77.5	%
(a) See “Reconciliation of Non-GAAP Measures”.
(b) Underwriting results for the three and twelve months ended months ended December 31, 2022 include gross fee income of $6.3 million and $23.6 million, respectively ($6.5 million and $22.7 million in the respective prior year periods).

CASUALTY REINSURANCE

	Three Months Ended December 31,											Twelve Months Ended December 31,
($ in thousands)	2022				2021				% Change			2022				2021				% Change
Gross written premiums	$	16,821			$	72,526			(76.8	)%		$	85,208			$	182,081			(53.2	)%
Net written premiums	$	12,454			$	70,340			(82.3	)%		$	83,033			$	159,195			(47.8	)%
Net earned premiums	$	33,715			$	36,386			(7.3	)%		$	136,427			$	134,223			1.6	%
Losses and loss adjustment expenses		(25,104	)			(138,521	)		(81.9	)%			(99,823	)			(220,178	)		(54.7	)%
Underwriting expenses		(11,260	)			1,466			—				(42,987	)			(31,571	)		36.2	%
Underwriting loss (a)	$	(2,649	)		$	(100,669	)		(97.4	)%		$	(6,383	)		$	(117,526	)		(94.6	)%
Ratios:
Loss ratio		74.5	%			380.7	%						73.2	%			164.0	%
Expense ratio		33.4	%		(4.0		)%						31.5	%			23.6	%
Combined ratio		107.9	%			376.7	%						104.7	%			187.6	%
Accident year loss ratio		54.8	%			64.6	%						63.3	%			61.5	%
(a) See “Reconciliation of Non-GAAP Measures”.

Underwriting Performance Ratios

The following table provides the underwriting performance ratios of the Company inclusive of the business subject to retroactive reinsurance accounting for loss portfolio transfers. There is no economic impact to the Company over the life of a loss portfolio transfer contract so long as any additional losses subject to the contract are within the limit of the loss portfolio transfer and the counterparty performs under the contract. Retroactive reinsurance accounting is not indicative of our current and ongoing operations. Management believes that providing loss ratios and combined ratios on business not subject to retroactive reinsurance accounting for loss portfolio transfers gives the users of our financial statements useful information in evaluating our current and ongoing operations.

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2022			2021			2022			2021
Excess and Surplus Lines:
Loss Ratio	65.1	%		65.2	%		65.9	%		106.2	%
Impact of retroactive reinsurance	(3.4	)%		—	%		2.8	%		—	%
Loss Ratio including impact of retroactive reinsurance	61.7	%		65.2	%		68.7	%		106.2	%
Combined Ratio	84.5	%		82.1	%		85.1	%		125.0	%
Impact of retroactive reinsurance	(3.4	)%		—	%		2.8	%		—	%
Combined Ratio including impact of retroactive reinsurance	81.1	%		82.1	%		87.9	%		125.0	%
Casualty Reinsurance:
Loss Ratio	74.5	%		380.7	%		73.2	%		164.0	%
Impact of retroactive reinsurance	12.9	%		—	%		3.2	%		—	%
Loss Ratio including impact of retroactive reinsurance	87.4	%		380.7	%		76.4	%		164.0	%
Combined Ratio	107.9	%		376.7	%		104.7	%		187.6	%
Impact of retroactive reinsurance	12.9	%		—	%		3.2	%		—	%
Combined Ratio including impact of retroactive reinsurance	120.8	%		376.7	%		107.9	%		187.6	%
Consolidated:
Loss Ratio	67.8	%		126.7	%		68.5	%		113.9	%
Impact of retroactive reinsurance	(0.3	)%		—	%		2.6	%		—	%
Loss Ratio including impact of retroactive reinsurance	67.5	%		126.7	%		71.1	%		113.9	%
Combined Ratio	91.7	%		140.6	%		93.5	%		136.9	%
Impact of retroactive reinsurance	(0.3	)%		—	%		2.6	%		—	%
Combined Ratio including impact of retroactive reinsurance	91.4	%		140.6	%		96.1	%		136.9	%

RECONCILIATION OF NON-GAAP MEASURES

Underwriting Profit

The following table reconciles the underwriting profit by individual operating segment and for the entire Company to consolidated income before taxes. We believe that the disclosure of underwriting profit by individual segment and of the Company as a whole is useful to investors, analysts, rating agencies and other users of our financial information in evaluating our performance because our objective is to consistently earn underwriting profits. We evaluate the performance of our segments and allocate resources based primarily on underwriting profit. We define underwriting profit as net earned premiums and gross fee income (in specific instances when the Company is not retaining insurance risk) less losses and loss adjustment expenses, excluding the impact of loss portfolio transfers accounted for as retroactive reinsurance and other operating expenses. Other operating expenses include the underwriting, acquisition, and insurance expenses of the operating segments and, for consolidated underwriting profit, the expenses of the Corporate and Other segment. Our definition of underwriting profit may not be comparable to that of other companies.

	Three Months Ended December 31,								Twelve Months Ended December 31,
($ in thousands)	2022				2021				2022				2021
Underwriting profit (loss) of the operating segments:
Excess and Surplus Lines	$	22,858			$	24,078			$	83,051			$	(121,478	)
Specialty Admitted Insurance		2,488				3,179				4,234				9,667
Casualty Reinsurance		(2,649	)			(100,669	)			(6,383	)			(117,526	)
Total underwriting profit (loss) of operating segments		22,697				(73,412	)			80,902				(229,337	)
Other operating expenses of the Corporate and Other segment		(6,051	)			(4,351	)			(31,260	)			(27,609	)
Underwriting profit (loss) (a)		16,646				(77,763	)			49,642				(256,946	)
Losses and loss adjustment expenses – retroactive reinsurance		682				—				(20,091	)			—
Net investment income		22,833				12,139				71,111				56,865
Net realized and unrealized gains (losses) on investments		1,556				1,826				(28,318	)			15,564
Other income (expense)		(5,128	)			(268	)			(5,016	)			(2,232	)
Interest expense		(6,287	)			(2,230	)			(17,578	)			(8,922	)
Amortization of intangible assets		(91	)			(91	)			(363	)			(363	)
Consolidated income (loss) before taxes	$	30,211			$	(66,387	)		$	49,387			$	(196,034	)
(a) Included in underwriting results for the three and twelve months ended months ended December 31, 2022 is gross fee income of $6.3 million and $23.6 million, respectively ($6.5 million and $22.7 million in the respective prior year periods).

Adjusted Net Operating Income

We define adjusted net operating income as income available to common shareholders excluding a) the impact of loss portfolio transfers accounted for as retroactive reinsurance, b) net realized and unrealized gains (losses) on investments, c) certain non-operating expenses such as professional service fees related to a purported class action lawsuit, various strategic initiatives, and the filing of registration statements for the offering of securities, and d) severance costs associated with terminated employees. We use adjusted net operating income as an internal performance measure in the management of our operations because we believe it gives our management and other users of our financial information useful insight into our results of operations and our underlying business performance. Adjusted net operating income should not be viewed as a substitute for net income calculated in accordance with GAAP, and our definition of adjusted net operating income may not be comparable to that of other companies.

Our income (loss) available to common shareholders reconciles to our adjusted net operating income (loss) as follows:

	Three Months Ended December 31,
	2022								2021
($ in thousands)	Income Before Taxes				Net Income				Loss Before Taxes				Net Loss
Income (loss) available to common shareholders	$	27,586			$	15,100			$	(66,387	)		$	(66,293	)
Losses and loss adjustment expenses – retroactive reinsurance		(682	)			375				—				—
Net realized and unrealized investment (gains) losses		(1,556	)			(743	)			(1,826	)			(1,378	)
Other expenses		5,419				5,419				251				206
Adjusted net operating income (loss)	$	30,767			$	20,151			$	(67,962	)		$	(67,465	)
	Twelve Months Ended December 31,
	2022								2021
($ in thousands)	Income Before Taxes				Net Income				Loss Before Taxes				Net Loss
Income (loss) available to common shareholders	$	40,637			$	22,223			$	(196,034	)		$	(172,799	)
Losses and loss adjustment expenses – retroactive reinsurance		20,091				16,786				—				—
Net realized and unrealized investment losses (gains)		28,318				25,014				(15,564	)			(13,292	)
Other expenses		5,519				5,519				2,214				1,846
Adjusted net operating income (loss)	$	94,565			$	69,542			$	(209,384	)		$	(184,245	)

Tangible Equity (per Share) and Tangible Common Equity (per Share)

We define tangible equity as shareholders’ equity plus mezzanine Series A preferred shares and the unrecognized deferred retroactive reinsurance gain on loss portfolio transfers less goodwill and intangible assets (net of amortization). We define tangible common equity as tangible equity less mezzanine Series A preferred shares. Our definition of tangible equity and tangible common equity may not be comparable to that of other companies, and it should not be viewed as a substitute for shareholders’ equity calculated in accordance with GAAP. We use tangible equity and tangible common equity internally to evaluate the strength of our balance sheet and to compare returns relative to this measure. The following table reconciles shareholders’ equity to tangible equity and tangible common equity for December 31, 2022, September 30, 2022, and December 31, 2021.

	December 31, 2022						September 30, 2022						December 31, 2021
($ in thousands, except for share data)	Equity			Equity per share			Equity			Equity per share			Equity			Equity per share
Shareholders’ equity	$	553,766		$	14.78		$	526,804		$	14.07		$	725,362		$	19.41
Plus: Series A redeemable preferred shares		144,898						144,898						—
Plus: Deferred reinsurance gain		20,091						20,773						—
Less: Goodwill and intangible assets		217,507						217,598						217,870
Tangible equity	$	501,248		$	11.63		$	474,877		$	11.02		$	507,492		$	13.58
Less: Series A redeemable preferred shares		144,898						144,898						—
Tangible common equity	$	356,350		$	9.51		$	329,979		$	8.81		$	507,492		$	13.58
Common shares outstanding		37,470,237						37,450,438						37,373,066
Common shares from assumed conversion of Series A preferred shares		5,640,158						5,640,158						—
Common shares outstanding after assumed conversion of Series A preferred shares		43,110,395						43,090,596						37,373,066

REDWOOD CITY, Calif., Feb. 27, 2023 (GLOBE NEWSWIRE) — Codexis, Inc. (Nasdaq:CDXS), a leading enzyme engineering company, today announced that management will participate in both a panel discussion and a fireside chat at the Cowen 43^rd Annual Health Care Conference, being held March 6-8, 2023, in Boston, Massachusetts.

Stephen Dilly, MBBS, PhD, President and Chief Executive Officer of Codexis, will participate in a panel discussion titled, “SynBio & AI Driven Drug Discovery,” taking place on Monday, March 6, 2023, at 4:40 pm ET. Dr. Dilly and other members of the management team will also participate in a fireside chat taking place on Tuesday, March 7, 2023, at 11:10 am ET. Webcasts of both events will be available in the Investor Relations section of the Company’s website, http://ir.codexis.com.The panel presentation and fireside chat webcasts will be archived for 30 and 90 days, respectively, following the event.

About Codexis

Codexis is a leading enzyme engineering company leveraging its proprietary CodeEvolver^® platform to discover and develop novel, high performance enzymes and biotherapeutics. Codexis enzymes have applications in the sustainable manufacturing of small molecule pharmaceuticals, in RNA and DNA synthesis and the creation of next generation life science tools, and as gene therapies and oral enzyme therapies. Codexis’ unique enzymes can drive improvements such as higher yields, reduced energy usage and waste generation, improved return on capital in manufacturing, improved sensitivity in genomic and diagnostic applications, and more efficacious therapeutics. For more information, visit www.codexis.com.

Investor Relations Contact:

Argot Partners
Brendan Strong/Carrie McKim
(212) 600-1902
[email protected]

Media Relations Contact:

Lauren Musto
(781) 572-1147
[email protected]

RECORD HOME CLOSINGS REVENUE FOR ANY Q4 OF
$428.6
MILLION

RECORD GROSS PROFIT FOR ANY Q4 OF $112.4 MILLION

DEBT TO TOTAL CAPITAL FELL TO
25.7%

AVERAGE PRICE OF Q4 HOMES CLOSED OF
$589.5K
, UP
15.7%

Q4 GROSS MARGIN, FLAT; ADJUSTED GROSS MARGIN OF
28.3%
, UP 130 BPS

PLANO, Texas, Feb. 27, 2023 (GLOBE NEWSWIRE) — Green Brick Partners, Inc. (NYSE: GRBK) (“we,” “Green Brick” or the “Company”) today reported results for its fourth quarter ended December 31, 2022.

“Our team did a great job closing out the year. For the full year ended December 31, 2022, we delivered 2,916 homes — a record number — generating 25.3% year-over-year growth in total revenue to $1.76 billion. Diluted earnings per share for 2022 increased 61.8% year-over-year to $6.02, with an annual gross margin of 29.8% and return on equity of 31.4%,” said Jim Brickman, CEO and Co-Founder. “While producing these results, we lowered our debt-to-total-capital ratio to 25.7%. We believe that these numbers reflect our superior lot position and operational excellence, as well as validate our ROE-driven approach.”

“For the fourth quarter, we delivered 727 homes and achieved record home closing revenue for any fourth quarter of $429 million. Our total gross profit was $112 million, also highest for any fourth quarter. Diluted earnings per share was $1.18, down 4.8% year-over-year. Net new home orders decreased 11.1% to 423, the smallest decline amongst peers. Importantly, we started to regain sales momentum since November. December sales were up 43% over the average of the prior six months. Our cancellation rate also improved throughout the quarter and was down to 12% in December. We started off 2023 with increased sales momentum particularly with our finished or finishing spec homes. Several communities opened in January and sold particularly well. Our cancellation rate has further improved in 2023, dropping to single digits. We believe our sales success is based in part upon our geographic footprint with supply-constrained locations in Dallas and Atlanta. These markets have some of the strongest demographic tailwinds and job growth in the country”

“We have also reduced construction costs of our homes. Homes started in Dallas during December and later have savings that average approximately $40,000 compared to homes started in the second and third quarter of 2022. The savings vary based on product line and floor plan and primarily resulted from significantly lower lumber prices and reduced labor costs. On average, our cycle time has been reduced by 30 days from peak 2022 levels, and we believe it should continue to improve slightly,” continued Mr. Brickman.

“We will continue to manage sales and pricing on a community-by-community basis as the market normalizes and to regulate our inventory levels to match starts to sales. We expect pent-up demand will enhance our sales if mortgage rates stabilize at less than 6%,” said Mr. Brickman. “Because we expect to have as many as approximately 6,000 finished lots at the end of 2023, with roughly 75% in infill locations, we have the capability to ramp up home construction quickly and increase active selling communities. So, if the pie gets smaller in 2023, we believe that we are well-positioned to take market share from other builders in our markets while maintaining our industry leading gross margins.”

Results for the Quarter Ended
December 31, 2022
:

For the quarter ended December 31, 2022, our home closings revenue and gross profit reflect records for any fourth quarter since the Company’s inception, as detailed below.

(Dollars in thousands, except per share data)	Three Months Ended December 31,
		2022				2021			Change
New homes delivered		727				823			(11.7)%
Total revenues	$	431,089			$	452,251			(4.7)%
Total cost of revenues		318,635				341,493			(6.7)%
Total gross profit	$	112,454			$	110,758			1.5%
Income before income taxes	$	77,954			$	82,589			(5.6)%
Net income attributable to Green Brick Partners, Inc.	$	55,547			$	63,471			(12.5)%
Diluted net income attributable to Green Brick Partners, Inc. per common share	$	1.18			$	1.24			(4.8)%
Residential units revenue	$	430,026			$	420,051			2.4%
Average sales price of homes delivered	$	589.5			$	509.3			15.7%
Homebuilding gross margin percentage		26.2	%			26.2	%		0 bps
Backlog	$	369,095			$	869,856			$	(500,761)
Homes under construction		1,853				2,278			(18.7)%

Results for the Year Ended
December 31, 2022
:

For the year ended December 31, 2022, our net income attributable to Green Brick per diluted common share, total revenues, new homes delivered, and homebuilding gross margin percentage reflect a record for any year since the Company’s inception, as detailed below.

(Dollars in thousands, except per share data)	Twelve Months Ended December 31,
		2022				2021			Change
New homes delivered		2,916				2,834			2.9	%
Total revenues	$	1,757,793			$	1,402,876			25.3	%
Total cost of revenues		1,234,768				1,040,817			18.6	%
Total gross profit	$	523,025			$	362,059			44.5	%
Income before income taxes	$	396,465			$	256,986			54.3	%
Net income attributable to Green Brick Partners, Inc.	$	291,900			$	190,210			53.5	%
Diluted net income attributable to Green Brick Partners, Inc. per common share	$	6.02			$	3.72			61.8	%
Residential units revenue	$	1,703,951			$	1,309,687			30.1	%
Average sales price of homes delivered	$	581.9			$	460.7			26.3	%
Homebuilding gross margin percentage		29.8	%			26.4	%		340 bps
Selling, general and administrative expenses as a percentage of residential units revenue		9.6	%			10.3	%		-70 bps

Earnings Conference Call:

We will host our earnings conference call to discuss our fourth quarter ended December 31, 2022 at 12:00 p.m. Eastern Time on Tuesday, February 28, 2023. The call can be accessed by dialing 1-888-660-6353 for domestic participants or 1-929-203-2106 for international participants and should reference meeting number 3162560. Participants may also join the call via webcast at: https://events.q4inc.com/attendee/115470786

A telephone replay of the call will be available through March 30, 2023. To access the telephone replay, the domestic dial-in number is 1-800-770-2030, the international dial-in number is 1-647-362-9199 and the access code is 3162560, or by using the link at investors.greenbrickpartners.com.

GREEN BRICK PARTNERS, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

		(Unaudited)
		Three Months Ended December 31,								Twelve Months Ended December 31,
			2022				2021				2022				2021
Residential units revenue		$	430,026			$	420,051			$	1,703,951			$	1,309,687
Land and lots revenue			1,063				32,200				53,842				93,189
Total revenues			431,089				452,251				1,757,793				1,402,876
Cost of residential units			317,806				310,228				1,196,914				964,364
Cost of land and lots			829				31,265				37,854				76,453
Total cost of revenues			318,635				341,493				1,234,768				1,040,817
Total gross profit			112,454				110,758				523,025				362,059
Selling, general and administrative expenses			(44,629	)			(37,087	)			(163,943	)			(134,269	)
Equity in income of unconsolidated entities			5,719				5,674				25,626				19,713
Other income, net			4,410				3,244				11,757				9,483
Income before income taxes			77,954				82,589				396,465				256,986
Income tax expense			16,790				15,512				82,468				52,605
Net income			61,164				67,077				313,997				204,381
Less: Net income attributable to noncontrolling interests			5,617				3,606				22,097				14,171
Net income attributable to Green Brick Partners, Inc.		$	55,547			$	63,471			$	291,900			$	190,210
Net income attributable to Green Brick Partners, Inc. per common share:
Basic		$	1.19			$	1.25			$	6.07			$	3.75
Diluted		$	1.18			$	1.24			$	6.02			$	3.72
Weighted average common shares used in the calculation of net income attributable to Green Brick Partners, Inc. per common share:
Basic			45,994				50,732				47,648				50,700
Diluted			46,332				51,104				47,987				51,060

GREEN BRICK PARTNERS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

	December 31, 2022			December 31, 2021
ASSETS
Cash and cash equivalents	$	76,588		$	77,166
Restricted cash		16,682			16,388
Receivables		5,288			6,871
Inventory		1,422,680			1,203,743
Investments in unconsolidated entities		74,224			55,616
Right-of-use assets – operating leases		3,458			4,596
Property and equipment, net		2,919			2,812
Earnest money deposits		23,910			26,008
Deferred income tax assets, net		16,448			15,741
Intangible assets, net		452			537
Goodwill		680			680
Other assets		12,346			11,709
Total assets	$	1,655,675		$	1,421,867
LIABILITIES AND EQUITY
Liabilities:
Accounts payable	$	51,804		$	45,682
Accrued expenses		91,281			61,351
Customer and builder deposits		29,112			64,610
Lease liabilities – operating leases		3,582			4,745
Borrowings on lines of credit, net		17,395			(738	)
Senior unsecured notes, net		335,825			335,446
Notes payable		14,622			210
Total liabilities		543,621			511,306
Commitments and contingencies
Redeemable noncontrolling interest in equity of consolidated subsidiary		29,239			21,867
Equity:
Green Brick Partners, Inc. stockholders’ equity
Preferred stock, $0.01 par value: 5,000,000 shares authorized; 2,000 issued and outstanding as of December 31, 2022 and 2021, respectively		47,696			47,696
Common stock, $0.01 par value: 100,000,000 shares authorized; 46,032,930 issued and outstanding as of December 31, 2022 and 51,151,911 and 50,759,972 issued and outstanding as of December 31, 2021, respectively		460			512
Treasury stock, at cost: none as of December 31, 2022 and 391,939 shares as of December 31, 2021		—			(3,167	)
Additional paid-in capital		259,410			289,641
Retained earnings		754,341			539,866
Total Green Brick Partners, Inc. stockholders’ equity		1,061,907			874,548
Noncontrolling interests		20,908			14,146
Total equity		1,082,815			888,694
Total liabilities and equity	$	1,655,675		$	1,421,867

GREEN BRICK PARTNERS, INC.

SUPPLEMENTAL INFORMATION

(Unaudited)

Residential Units Revenue and New Homes Delivered (dollars in thousands)		Three Months Ended December 31,													Twelve Months Ended December 31,
			2022			2021		Change				%				2022			2021		Change			%
Home closings revenue		$	428,582		$	419,132		$	9,450			2.3	%		$	1,696,911		$	1,305,620		$	391,291		30.0	%
Mechanic’s lien contracts revenue			1,444			919			525			57.1	%			7,040			4,067			2,973		73.1	%
Residential units revenue		$	430,026		$	420,051		$	9,975			2.4	%		$	1,703,951		$	1,309,687		$	394,264		30.1	%
New homes delivered			727			823			(96	)		(11.7	)%			2,916			2,834			82		2.9	%
Average sales price of homes delivered		$	589.5		$	509.3		$	80.2			15.7	%		$	581.9		$	460.7		$	121.2		26.3	%

Land and Lots Revenue (dollars in thousands)		Three Months Ended December 31,													Twelve Months Ended December 31,
		2022			2021			Change				%			2022			2021			Change				%
Lots revenue		$	1,063		$	9,682		$	(8,619	)		(89.0	)%		$	19,090		$	24,866		$	(5,776	)		(23.2)        %
Land revenue			—			22,518			(22,518	)		(100.0	)%			34,752			68,323			(33,571	)		(49.1)        %
Land and lots revenue		$	1,063		$	32,200		$	(31,137	)		(96.7	)%		$	53,842		$	93,189		$	(39,347	)		(42.2)        %
Lots closed			14			150			(136	)		(90.7	)%			288			323			(35	)		(10.8)        %
Average sales price of lots closed		$	75.9		$	64.5		$	11.4			17.7	%		$	66.3		$	77.0		$	(10.7	)		(13.9)        %

New Home Orders and Backlog (dollars in thousands)		Three Months Ended December 31,															Twelve Months Ended December 31,
			2022				2021			Change				%				2022				2021			Change				%
Net new home orders			423				476				(53	)		(11.1	)%			1,973				2,851				(878	)		(30.8)        %
Revenue from new net home orders		$	247,818			$	271,768			$	(23,950	)		(8.8	)%		$	1,210,315			$	1,488,613			$	(278,298	)		(18.7	)%
Average selling price of net new home orders		$	585.9			$	570.9			$	15.0			2.6	%		$	613.4			$	522.1			$	91.3			17.5	%
Cancellation rate			20.3	%			12.3	%			8.0	%		65.0	%			13.8	%			7.7	%			6.1	%		79.2	%
Absorption rate per average active selling community per quarter			5.5				6.2				(0.7	)		(11.3	)%			6.5				8.2				(1.7	)		(20.7)        %
Average active selling communities			77				77				—			—	%			76				87				(11	)		(12.6)        %
Active selling communities at end of period			80				74				6			8.1	%
Backlog		$	369,095			$	869,856			$	(500,761	)		(57.6	)%
Backlog units			537				1,480				(943	)		(63.7	)%
Average sales price of backlog		$	687.3			$	587.7			$	99.6			16.9	%

GREEN BRICK PARTNERS, INC.

SUPPLEMENTAL INFORMATION

(Unaudited)

	December 31, 2022									December 31, 2021
	Central			Southeast			Total			Central			Southeast			Total
Lots owned
Finished lots	1,901			998			2,899			1,328			797			2,125
Lots in communities under development	10,309			1,698			12,007			16,439			1,675			18,114
Land held for future development(1)	6,575			—			6,575			—			—			—
Total lots owned	18,785			2,696			21,481			17,767			2,472			20,239
Lots controlled
Lots under third party option contracts	2,212			6			2,218			2,670			70			2,740
Land under option for future acquisition and development	110			18			128			3,318			508			3,826
Lots under option through unconsolidated development joint ventures	1,289			411			1,700			1,333			483			1,816
Total lots controlled	3,611			435			4,046			7,321			1,061			8,382
Total lots owned and controlled ( 2 )	22,396			3,131			25,527			25,088			3,533			28,621
Percentage of lots owned	83.9	%		86.1	%		84.2	%		70.8	%		70.0	%		70.7	%

 

(1) Land held for future development consists of raw land parcels where development activities have been postponed due to market conditions or other factors.
(2) Total lots excludes lots with homes under construction.

The following table presents additional information on the lots we owned as of December 31, 2022 and December 31, 2021.

	December 31, 2022			December 31, 2021
Total lots owned	21,481			20,239
Add certain lots included in Total Lots Controlled
Land under option for future acquisition and development	128			3,826
Lots under option through unconsolidated development joint ventures	1,700			1,816
Total lots self-developed	23,309			25,881
Self-developed lots as a percentage of total lots owned and controlled	91.3	%		90.4	%

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 our 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 U.S. 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.

The following table represents the non-GAAP measure of adjusted homebuilding gross margin for the twelve months ended months ended December 31, 2022 and 2021 and reconciles these amounts to homebuilding gross margin, the most directly comparable GAAP measure.

(Unaudited, in thousands):		Three Months Ended December 31,								Twelve Months Ended December 31,
			2022				2021				2022				2021
Residential units revenue		$	430,026			$	420,051			$	1,703,951			$	1,309,687
Less: Mechanic’s lien contracts revenue			(1,444	)			(919	)			(7,040	)			(4,067	)
Home closings revenue		$	428,582			$	419,132			$	1,696,911			$	1,305,620
Homebuilding gross margin		$	112,189			$	109,671			$	506,129			$	344,505
Homebuilding gross margin percentage			26.2	%			26.2	%			29.8	%			26.4	%
Homebuilding gross margin			112,189				109,671				506,129				344,505
Add back: Capitalized interest charged to cost of revenues			3,141				3,326				13,444				10,241
Add back: Land impairment charge		$	6,020			$	—			$	6,020			$	—
Adjusted homebuilding gross margin		$	121,350			$	112,997			$	525,593			$	354,746
Adjusted homebuilding gross margin percentage			28.3	%			27.0	%			31.0	%			27.2	%

About Green Brick Partners, Inc.

Green Brick Partners, Inc. is a diversified homebuilding and land development company that operates in Texas, Georgia, and Florida and has a non-controlling interest in a Colorado homebuilder. Green Brick owns five subsidiary homebuilders in Texas (CB JENI Homes, Normandy Homes, Southgate Homes, Trophy Signature Homes, and a 90% interest in Centre Living Homes), as well as a controlling interest in a homebuilder in Atlanta, Georgia (The Providence Group) and an 80% interest in a homebuilder in Port St. Lucie, Florida (GHO Homes). Green Brick also owns a noncontrolling interest in Challenger Homes in Colorado Springs, Colorado, and retains interests in related financial services platforms, including Green Brick Title and BHome Mortgage. The Company is engaged in all aspects of the homebuilding process, including land acquisition and development, entitlements, design, construction, marketing, and sales for its residential neighborhoods and master-planned communities. For more information about Green Brick Partners Inc.’s subsidiary homebuilders, please visit greenbrickpartners.com/homebuilders.

Forward-Looking and Cautionary Statements:

This press release and our earnings call contain “forward-looking statements” within the meaning of the Private Securities Litigation Act of 1995. These statements concern expectations, beliefs, projections, plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts and typically include the words “anticipate,” “believe,” “consider,” “estimate,” “expect,” “feel,” “intend,” “plan,” “predict,” “seek,” “strategy,” “target,” “will” or other words of similar meaning. Forward-looking statements in this press release and in our earnings call include statements regarding (i) our position to adapt and succeed in a rapidly changing environment, including our focus on operational efficiency; (ii) our expectations regarding trends in our markets, including demand for new homes and available inventories; (iii) our beliefs regarding the relationship between our financial results and our lot strategy, operations and ROE-driven approach; (iv) our expectations related to reduction of construction costs and average cycle times; (v) our intention to manage sales, pricing and inventory levels for each of our communities; (vi) our priorities and strategies for growth, the drivers of that growth, and its impact on our future results; (vii) our expectation to sustain our industry-leading margins; (viii) our positioning and flexibility to capitalize on market opportunities and grow our market share as well as the impact on our financial and operational performance; (ix) our beliefs that our lot and land positions will support future growth; (x) our beliefs that we operate in the most advantageous markets in the U.S.; (xi) our expectations related to the number and location quality of our finished lots at the end of 2023; (xii) our expectations for future demand, including the impact of lower stabilized mortgage rates; and (xiii) our expectation to continue to provide favorable returns on equity to our shareholders. These forward-looking statements reflect our current views about future events and involve estimates and assumptions which may be affected by risks and uncertainties in our business, as well as other external factors, which could cause future results to materially differ from those expressed or implied in any forward-looking statement. These risks include, but are not limited to: (1) changes in macroeconomic conditions, including increased interest rates and inflation, that could adversely impact demand for new homes or the ability of potential buyers to qualify for acceptable financing; (2) general economic conditions, seasonality, cyclicality and competition in the homebuilding industry; (3) shortages, delays or increased costs of raw materials and increased demand for materials, or increases in other operating costs, including costs related to labor, real estate taxes and insurance, which in each case exceed our ability to increase prices; (4) a shortage of qualified and available labor; (5) an inability to acquire land in our current and new markets at acceptable prices or difficulty in obtaining land- use entitlements; (6) our inability to successfully execute our strategies, including an inability to grow or expand our operations or expand our Trophy brand; (7) our inability to implement or capitalize on new strategic investments; (8) a failure to recruit, retain or develop highly skilled and competent employees; (9) government regulation risks; (10) adverse changes in availability or volatility of mortgage financing; (11) severe weather events or natural disasters; (12) difficulty in obtaining sufficient capital to fund our growth; (13) our ability to meet our debt service obligations; (14) a decline in the value of our inventories and resulting write-downs of the carrying value of our real estate assets; and (15) changes in accounting standards that adversely affect our reported earnings or financial condition. For a more detailed discussion of these and other risks and uncertainties applicable to Green Brick please see our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission.

Contact:

Benting Hu
Vice President of Finance
(469) 808-1014
[email protected]