Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Smith Douglas Homes Reports First Quarter 2024 Results By: Smith Douglas Homes Corp. via Business Wire May 14, 2024 at 07:30 AM EDT Smith Douglas Homes Corp. (NYSE: SDHC) (“Smith Douglas” or the “Company”) today announced first quarter results for the three months ended March 31, 2024. Q1 2024 Results as compared to Q1 2023: Net new orders increased 15% to 765 Home closings increased 13% to 566 Revenue increased 13% to $189.2 million Pre-tax income of $21.4 million Earnings of $0.33 per diluted share Backlog homes increased 19% to 1,110 Sales value of backlog homes increased 25% to $381.2 million Debt-to-book capitalization of 1.3% Active community count increased 49% to 70 at quarter end Total controlled lots increased 82% to 14,117 Greg Bennett, Vice Chairman and Chief Executive Officer, commented, “We are pleased by the results this quarter, our first as a public company, during which we completed our IPO in January and concurrently amended and increased the size of our credit facility. We achieved our sales and closings expectations and continue to produce excellent gross margins, coming in at 26.1% for the period.” Mr. Bennett continued, “During the quarter we also had the opportunity to expand our footprint by contracting for lots in the Central Georgia market in Houston County, which includes Perry and Warner Robbins and the surrounding submarket, as well as in Chattanooga, Tennessee. We intend to leverage our expansive operations in our Atlanta Division as we scale up the R-teams in these markets.” Russ Devendorf, Executive Vice President and Chief Financial Officer, added, “Having our capital markets transactions behind us, we are in a strong financial position and can now focus on executing our growth strategy. We finished the quarter with almost $33 million of cash, $333 million of stockholders’ equity and zero borrowings under our $250 million unsecured credit facility resulting in a negative net debt position with a net debt-to-net book capitalization of (9.4)%.” Conference Call & Webcast Information Management will host a conference call to discuss the Company’s results at 8:30 a.m. Eastern Time on May 14, 2024. Interested parties can dial in using the numbers below or access the call via a webcast link provided in the investor relations section of the company’s website. Dial-in Numbers: Toll Free - North America (+1) 800-715-9871 International: (+1) 646-307-1963 Conference ID: 4493724 Replay Numbers: Toll Free - North America: (+1) 800-770-2030 Playback Passcode: 4493724 Replay will expire 7 days following the event About Smith Douglas Homes Headquartered in Atlanta, Georgia, Smith Douglas Homes completed its initial public offering in January 2024. Since its inception, Smith Douglas has been entrusted by over 13,000 families to fulfill their new home dreams. Ranked a top 50 builder nationally for several years and with 2,297 closings in 2023, Smith Douglas currently holds the #36 position on the Builder Magazine Top 100 list. The Smith Douglas communities are primarily targeted to entry-level and empty-nest homebuyers looking to purchase a new home priced below the Federal Housing Administration loan limit in the metro areas of Atlanta, Birmingham, Charlotte, Houston, Huntsville, Nashville, and Raleigh. Smith Douglas offers its homebuyers a personalized, affordable-luxury buying experience at attractive prices. Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation statements regarding the Company’s performance, growth, strategic opportunities, and financial position. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the factors discussed under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, as the same may be updated from time to time in our subsequent filings with the Securities and Exchange Commission. These forward-looking statements are based on management’s current estimates and expectations. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change. Smith Douglas Homes Condensed Consolidated Statements of Income (Unaudited, in thousands, except share and per share amounts) Three months ended March 31, 2024 2023 Home closing revenue $ 189,209 $ 168,144 Cost of home closings 139,749 119,611 Home closing gross profit 49,460 48,533 Selling, general and administrative costs 27,541 19,794 Equity in income from unconsolidated entities (184 ) (210 ) Interest expenses 698 245 Other income, net (2 ) (122 ) Income before income taxes 21,407 28,826 Provisions for income taxes 921 — Net income 20,486 $ 28,826 Net income attributable to non-controlling interests and LLC members prior to IPO 17,514 Net income attributable to Smith Douglas Homes Corp. $ 2,972 Period from January 11, 2024 to March 31, 2024 Earnings per share: Basic $ 0.34 Diluted $ 0.33 Weighted average shares of common stock outstanding: Basic 8,846,154 Diluted 51,410,397 Smith Douglas Homes Condensed Consolidated Balance Sheets (Unaudited, in thousands, except share and per share amounts) March 31, 2024 December 31, 2023 Assets Cash and cash equivalents $ 32,778 $ 19,777 Real estate inventory 234,080 213,104 Deposits on real estate under option or contract 64,770 57,096 Real estate not owned 13,617 16,815 Property and equipment, net 1,634 1,543 Goodwill 25,726 25,726 Deferred tax asset, net 13,054 — Other assets 15,591 18,631 Total assets $ 401,250 $ 352,692 Liabilities and Stockholders’/Members’ Equity Liabilities: Accounts payable $ 11,510 $ 17,318 Customer deposits 8,989 7,168 Notes payable 4,247 75,627 Liabilities related to real estate not owned 13,617 16,815 Accrued expenses and other liabilities 19,371 26,861 Tax receivable agreement liability 10,401 — Total liabilities 68,135 143,789 Commitments and contingencies (Note 15) Members’ equity: Class A units — 206,303 Class C units — 2,000 Class D units — 600 Total members’ equity — 208,903 Stockholders’ equity: Preferred stock, $0.0001 par value – 10,000,000 shares authorized; none issued and outstanding as of March 31, 2024 — — Class A common stock, $0.0001 par value – 250,000,000 shares authorized; 8,846,154 shares issued and outstanding as of March 31, 2024 1 — Class B common stock, $0.0001 par value – 100,000,000 shares authorized; 42,435,897 shares issued and outstanding as of March 31, 2024 4 — Additional paid-in capital 56,746 — Retained earnings 2,972 — Total stockholders’ equity attributable to Smith Douglas Homes Corp. 59,723 — Non-controlling interests attributable to Smith Douglas Holdings LLC 273,392 — Total members’/stockholders’ equity 333,115 208,903 Total liabilities and stockholders’/members’ equity $ 401,250 $ 352,692 Smith Douglas Homes Summary Cash Flow Information (unaudited, dollars in thousands) Three months ended March 31, 2024 2023 Amount Amount Cash (used in) provided by operating activities $ (9,273 ) $ 26,555 Cash (used in) provided by investing activities $ (430 ) $ 38 Cash provided by (used in) financing activities $ 22,704 $ (43,800 ) Net increase (decrease) in cash and cash equivalents $ 13,001 $ (17,207 ) Smith Douglas Homes Selected Other Operating Data (unaudited, dollars in thousands) Three months ended March 31, 2024 2023 Period over period change Amount Amount Amount Percent Home closings 566 500 66 13.2 % ASP of homes closed $ 334 $ 336 $ (2 ) (0.6 )% Net new home orders 765 664 101 15.2 % Contract value of net new home orders $ 259,440 $ 215,118 $ 44,322 20.6 % ASP of net new home orders $ 339 $ 324 $ 15 4.6 % Cancellation rate(1) 10.6 % 8.9 % 1.7 % 19.1 % Backlog homes (period end)(2) 1,110 934 176 18.8 % Contract value of backlog homes (period end) $ 381,155 $ 305,643 $ 75,512 24.7 % ASP of backlog homes (period end) $ 343 $ 327 16 4.9 % Active communities (period end)(3) 70 47 23 48.9 % Controlled lots: Homes under construction 896 638 258 40.4 % Owned lots 693 370 323 87.3 % Optioned lots 12,528 6,734 5,794 86.0 % Total controlled lots 14,117 7,742 6,375 82.3 % [nm* Not meaningful] 1. The cancellation rate is the total number of cancellations during the period divided by the total gross new home orders during the period. 2. Backlog homes (period end) is the number of homes in backlog from the previous period plus the number of net new home orders generated during the current period minus the number of homes closed during the current period. 3. A community becomes active once the model is completed or the community has its first sale. A community becomes inactive when it has fewer than two homes remaining to sell. Smith Douglas Homes Selected Financial Information by Segment (unaudited, dollars in thousands) Three months ended March 31, 2024 2023 Home closing revenue Home closings ASP of homes closed Home closing revenue Home closings ASP of homes closed Alabama $ 39,655 132 $ 300 $ 24,067 81 $ 297 Atlanta 62,620 183 342 76,174 235 324 Charlotte 13,464 34 396 12,502 33 379 Houston 24,030 74 325 — — — Nashville 22,030 63 349 23,889 65 368 Raleigh 27,410 80 343 31,512 86 366 Total $ 189,209 566 $ 334 $ 168,144 500 $ 336 As of March 31, 2024 2023 Period over period change Backlog homes Contract value of backlog homes ASP of backlog homes Backlog homes Contract value of backlog homes ASP of backlog homes Backlog homes Contract value of backlog homes ASP of backlog homes Alabama 172 $ 52,198 $ 303 151 $ 43,928 $ 291 21 $ 8,270 $ 12 Atlanta 434 151,356 349 445 140,209 315 (11 ) 11,147 34 Charlotte 93 36,143 389 79 28,229 357 14 7,914 32 Houston 197 63,839 324 — — — 197 63,839 324 Nashville 68 25,531 375 116 42,110 363 (48 ) (16,579 ) 12 Raleigh 146 52,088 357 143 51,167 358 3 921 (1 ) Total 1,110 $ 381,155 $ 343 934 $ 305,643 $ 327 176 $ 75,512 $ 16 Three months ended March 31, 2024 2023 Period over period change Net income: Alabama $ 4,604 $ 2,241 $ 2,363 Atlanta 14,571 19,549 (4,978 ) Charlotte 1,624 1,933 (309 ) Houston 3,366 — 3,366 Nashville 2,313 3,231 (918 ) Raleigh 4,810 7,231 (2,421 ) Segment total 31,288 34,185 (2,897 ) Corporate(1) (10,802 ) (5,359 ) (5,443 ) Total $ 20,486 $ 28,826 $ (8,340 ) (1) Corporate primarily includes corporate overhead costs, such as payroll and benefits, business insurance, information technology, office costs, outside professional services and travel costs, and certain other amounts that are not allocated to the reportable segments. Non-GAAP Financial Measures In addition to our results determined in accordance with generally accepted accounting principles in the U.S. (“GAAP”), this press release includes net-debt-to-net book capitalization and adjusted net income. Net-debt-to-net-book capitalization Net-debt-to-net book capitalization is a supplemental measure of our leverage that is not required by, or presented in accordance with, GAAP and should not be considered as an alternative to debt-to-book capitalization or any other measure derived in accordance with GAAP. We caution investors that amounts presented in accordance with our definition of net-debt-to-net book capitalization may not be comparable to similar measures disclosed by our competitors because not all companies and analysts calculate this non-GAAP financial measure in the same manner. We present this non-GAAP financial measure because we consider it to be an important supplemental measure of our leverage and believe it is frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry. We define net-debt-to-net book capitalization as: Total debt, less cash and cash equivalents, divided by Total debt, less cash and cash equivalents, plus stockholders’/members’ equity. This non-GAAP financial measure has limitations as an analytical tool in that it subtracts cash and cash equivalents and therefore may imply that the Company has less debt than the most comparable measure determined in accordance with GAAP. Because of this limitation, this non-GAAP financial measure should be considered along with other financial measures presented in accordance with GAAP. The presentation of this non-GAAP financial measure is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. We have reconciled this non-GAAP financial measure with the most directly comparable GAAP financial measure in the following table: As of (in thousands, except percentages) March 31, 2024 December 31, 2023 Notes payable $ 4,247 $ 75,627 Stockholders’/Members’ equity 333,115 208,903 Total capitalization $ 337,362 $ 284,530 Debt-to-book capitalization 1.3 % 26.6 % Notes payable $ 4,247 $ 75,627 Less: cash and cash equivalents 32,778 19,777 Net debt (28,531 ) 55,850 Stockholders’/Members’ equity 333,115 208,903 Total net capitalization $ 304,584 264,753 Net debt-to-book capitalization (9.4 )% 21.1 % Adjusted net income Adjusted net income is not a measure of net income or net income margin as determined by GAAP. Adjusted net income is a supplemental non-GAAP financial measure used by management and external users of our consolidated financial statements, such as industry analysts, investors, lenders, and rating agencies. We define adjusted net income as net income adjusted for the tax impact using a 25.0% federal and state blended tax rate (assuming 100% public ownership to adjust for the impact of taxes on earnings attributable to Smith Douglas Holdings LLC as if Smith Douglas Holdings LLC was a subchapter C corporation in the periods presented). Management believes adjusted net income is useful because it allows management to more effectively evaluate our operating performance and comparability to industry peers who record income tax expense on their income before tax as opposed to the income of Smith Douglas Holdings LLC not being taxed at the entity level and, therefore, not reflecting a charge against earnings for income tax expense. Adjusted net income should not be considered as an alternative to, or more meaningful than, net income or any other measure as determined in accordance with GAAP. Our computation of adjusted net income may not be comparable to adjusted net income of other companies. We present adjusted net income because we believe it provides useful information regarding our comparability to peers. The following table presents a reconciliation of adjusted net income to the GAAP financial measure of net income for each of the periods indicated: Three months ended March 31, (in thousands, except percentages) 2024 2023 Net income $ 20,486 $ 28,826 Provision for income taxes 921 — Income before income taxes 21,407 28,826 Tax-effected adjustments(1) 5,352 7,207 Adjusted net income $ 16,055 $ 21,619 (1) For the year ended December 31, 2023 and 2022, our tax expenses assumes a 25.0% federal and state blended tax rate (assuming 100% public ownership to adjust for the impact of taxes on earnings attributable to Smith Douglas Holdings LLC as if Smith Douglas Holdings LLC was a subchapter C corporation in the periods presented). View source version on businesswire.com: https://www.businesswire.com/news/home/20240513037376/en/Contacts Investor Relations Drew Mackintosh (310) 924-9036 ir@smithdouglas.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Smith Douglas Homes Reports First Quarter 2024 Results By: Smith Douglas Homes Corp. via Business Wire May 14, 2024 at 07:30 AM EDT Smith Douglas Homes Corp. (NYSE: SDHC) (“Smith Douglas” or the “Company”) today announced first quarter results for the three months ended March 31, 2024. Q1 2024 Results as compared to Q1 2023: Net new orders increased 15% to 765 Home closings increased 13% to 566 Revenue increased 13% to $189.2 million Pre-tax income of $21.4 million Earnings of $0.33 per diluted share Backlog homes increased 19% to 1,110 Sales value of backlog homes increased 25% to $381.2 million Debt-to-book capitalization of 1.3% Active community count increased 49% to 70 at quarter end Total controlled lots increased 82% to 14,117 Greg Bennett, Vice Chairman and Chief Executive Officer, commented, “We are pleased by the results this quarter, our first as a public company, during which we completed our IPO in January and concurrently amended and increased the size of our credit facility. We achieved our sales and closings expectations and continue to produce excellent gross margins, coming in at 26.1% for the period.” Mr. Bennett continued, “During the quarter we also had the opportunity to expand our footprint by contracting for lots in the Central Georgia market in Houston County, which includes Perry and Warner Robbins and the surrounding submarket, as well as in Chattanooga, Tennessee. We intend to leverage our expansive operations in our Atlanta Division as we scale up the R-teams in these markets.” Russ Devendorf, Executive Vice President and Chief Financial Officer, added, “Having our capital markets transactions behind us, we are in a strong financial position and can now focus on executing our growth strategy. We finished the quarter with almost $33 million of cash, $333 million of stockholders’ equity and zero borrowings under our $250 million unsecured credit facility resulting in a negative net debt position with a net debt-to-net book capitalization of (9.4)%.” Conference Call & Webcast Information Management will host a conference call to discuss the Company’s results at 8:30 a.m. Eastern Time on May 14, 2024. Interested parties can dial in using the numbers below or access the call via a webcast link provided in the investor relations section of the company’s website. Dial-in Numbers: Toll Free - North America (+1) 800-715-9871 International: (+1) 646-307-1963 Conference ID: 4493724 Replay Numbers: Toll Free - North America: (+1) 800-770-2030 Playback Passcode: 4493724 Replay will expire 7 days following the event About Smith Douglas Homes Headquartered in Atlanta, Georgia, Smith Douglas Homes completed its initial public offering in January 2024. Since its inception, Smith Douglas has been entrusted by over 13,000 families to fulfill their new home dreams. Ranked a top 50 builder nationally for several years and with 2,297 closings in 2023, Smith Douglas currently holds the #36 position on the Builder Magazine Top 100 list. The Smith Douglas communities are primarily targeted to entry-level and empty-nest homebuyers looking to purchase a new home priced below the Federal Housing Administration loan limit in the metro areas of Atlanta, Birmingham, Charlotte, Houston, Huntsville, Nashville, and Raleigh. Smith Douglas offers its homebuyers a personalized, affordable-luxury buying experience at attractive prices. Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation statements regarding the Company’s performance, growth, strategic opportunities, and financial position. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the factors discussed under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, as the same may be updated from time to time in our subsequent filings with the Securities and Exchange Commission. These forward-looking statements are based on management’s current estimates and expectations. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change. Smith Douglas Homes Condensed Consolidated Statements of Income (Unaudited, in thousands, except share and per share amounts) Three months ended March 31, 2024 2023 Home closing revenue $ 189,209 $ 168,144 Cost of home closings 139,749 119,611 Home closing gross profit 49,460 48,533 Selling, general and administrative costs 27,541 19,794 Equity in income from unconsolidated entities (184 ) (210 ) Interest expenses 698 245 Other income, net (2 ) (122 ) Income before income taxes 21,407 28,826 Provisions for income taxes 921 — Net income 20,486 $ 28,826 Net income attributable to non-controlling interests and LLC members prior to IPO 17,514 Net income attributable to Smith Douglas Homes Corp. $ 2,972 Period from January 11, 2024 to March 31, 2024 Earnings per share: Basic $ 0.34 Diluted $ 0.33 Weighted average shares of common stock outstanding: Basic 8,846,154 Diluted 51,410,397 Smith Douglas Homes Condensed Consolidated Balance Sheets (Unaudited, in thousands, except share and per share amounts) March 31, 2024 December 31, 2023 Assets Cash and cash equivalents $ 32,778 $ 19,777 Real estate inventory 234,080 213,104 Deposits on real estate under option or contract 64,770 57,096 Real estate not owned 13,617 16,815 Property and equipment, net 1,634 1,543 Goodwill 25,726 25,726 Deferred tax asset, net 13,054 — Other assets 15,591 18,631 Total assets $ 401,250 $ 352,692 Liabilities and Stockholders’/Members’ Equity Liabilities: Accounts payable $ 11,510 $ 17,318 Customer deposits 8,989 7,168 Notes payable 4,247 75,627 Liabilities related to real estate not owned 13,617 16,815 Accrued expenses and other liabilities 19,371 26,861 Tax receivable agreement liability 10,401 — Total liabilities 68,135 143,789 Commitments and contingencies (Note 15) Members’ equity: Class A units — 206,303 Class C units — 2,000 Class D units — 600 Total members’ equity — 208,903 Stockholders’ equity: Preferred stock, $0.0001 par value – 10,000,000 shares authorized; none issued and outstanding as of March 31, 2024 — — Class A common stock, $0.0001 par value – 250,000,000 shares authorized; 8,846,154 shares issued and outstanding as of March 31, 2024 1 — Class B common stock, $0.0001 par value – 100,000,000 shares authorized; 42,435,897 shares issued and outstanding as of March 31, 2024 4 — Additional paid-in capital 56,746 — Retained earnings 2,972 — Total stockholders’ equity attributable to Smith Douglas Homes Corp. 59,723 — Non-controlling interests attributable to Smith Douglas Holdings LLC 273,392 — Total members’/stockholders’ equity 333,115 208,903 Total liabilities and stockholders’/members’ equity $ 401,250 $ 352,692 Smith Douglas Homes Summary Cash Flow Information (unaudited, dollars in thousands) Three months ended March 31, 2024 2023 Amount Amount Cash (used in) provided by operating activities $ (9,273 ) $ 26,555 Cash (used in) provided by investing activities $ (430 ) $ 38 Cash provided by (used in) financing activities $ 22,704 $ (43,800 ) Net increase (decrease) in cash and cash equivalents $ 13,001 $ (17,207 ) Smith Douglas Homes Selected Other Operating Data (unaudited, dollars in thousands) Three months ended March 31, 2024 2023 Period over period change Amount Amount Amount Percent Home closings 566 500 66 13.2 % ASP of homes closed $ 334 $ 336 $ (2 ) (0.6 )% Net new home orders 765 664 101 15.2 % Contract value of net new home orders $ 259,440 $ 215,118 $ 44,322 20.6 % ASP of net new home orders $ 339 $ 324 $ 15 4.6 % Cancellation rate(1) 10.6 % 8.9 % 1.7 % 19.1 % Backlog homes (period end)(2) 1,110 934 176 18.8 % Contract value of backlog homes (period end) $ 381,155 $ 305,643 $ 75,512 24.7 % ASP of backlog homes (period end) $ 343 $ 327 16 4.9 % Active communities (period end)(3) 70 47 23 48.9 % Controlled lots: Homes under construction 896 638 258 40.4 % Owned lots 693 370 323 87.3 % Optioned lots 12,528 6,734 5,794 86.0 % Total controlled lots 14,117 7,742 6,375 82.3 % [nm* Not meaningful] 1. The cancellation rate is the total number of cancellations during the period divided by the total gross new home orders during the period. 2. Backlog homes (period end) is the number of homes in backlog from the previous period plus the number of net new home orders generated during the current period minus the number of homes closed during the current period. 3. A community becomes active once the model is completed or the community has its first sale. A community becomes inactive when it has fewer than two homes remaining to sell. Smith Douglas Homes Selected Financial Information by Segment (unaudited, dollars in thousands) Three months ended March 31, 2024 2023 Home closing revenue Home closings ASP of homes closed Home closing revenue Home closings ASP of homes closed Alabama $ 39,655 132 $ 300 $ 24,067 81 $ 297 Atlanta 62,620 183 342 76,174 235 324 Charlotte 13,464 34 396 12,502 33 379 Houston 24,030 74 325 — — — Nashville 22,030 63 349 23,889 65 368 Raleigh 27,410 80 343 31,512 86 366 Total $ 189,209 566 $ 334 $ 168,144 500 $ 336 As of March 31, 2024 2023 Period over period change Backlog homes Contract value of backlog homes ASP of backlog homes Backlog homes Contract value of backlog homes ASP of backlog homes Backlog homes Contract value of backlog homes ASP of backlog homes Alabama 172 $ 52,198 $ 303 151 $ 43,928 $ 291 21 $ 8,270 $ 12 Atlanta 434 151,356 349 445 140,209 315 (11 ) 11,147 34 Charlotte 93 36,143 389 79 28,229 357 14 7,914 32 Houston 197 63,839 324 — — — 197 63,839 324 Nashville 68 25,531 375 116 42,110 363 (48 ) (16,579 ) 12 Raleigh 146 52,088 357 143 51,167 358 3 921 (1 ) Total 1,110 $ 381,155 $ 343 934 $ 305,643 $ 327 176 $ 75,512 $ 16 Three months ended March 31, 2024 2023 Period over period change Net income: Alabama $ 4,604 $ 2,241 $ 2,363 Atlanta 14,571 19,549 (4,978 ) Charlotte 1,624 1,933 (309 ) Houston 3,366 — 3,366 Nashville 2,313 3,231 (918 ) Raleigh 4,810 7,231 (2,421 ) Segment total 31,288 34,185 (2,897 ) Corporate(1) (10,802 ) (5,359 ) (5,443 ) Total $ 20,486 $ 28,826 $ (8,340 ) (1) Corporate primarily includes corporate overhead costs, such as payroll and benefits, business insurance, information technology, office costs, outside professional services and travel costs, and certain other amounts that are not allocated to the reportable segments. Non-GAAP Financial Measures In addition to our results determined in accordance with generally accepted accounting principles in the U.S. (“GAAP”), this press release includes net-debt-to-net book capitalization and adjusted net income. Net-debt-to-net-book capitalization Net-debt-to-net book capitalization is a supplemental measure of our leverage that is not required by, or presented in accordance with, GAAP and should not be considered as an alternative to debt-to-book capitalization or any other measure derived in accordance with GAAP. We caution investors that amounts presented in accordance with our definition of net-debt-to-net book capitalization may not be comparable to similar measures disclosed by our competitors because not all companies and analysts calculate this non-GAAP financial measure in the same manner. We present this non-GAAP financial measure because we consider it to be an important supplemental measure of our leverage and believe it is frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry. We define net-debt-to-net book capitalization as: Total debt, less cash and cash equivalents, divided by Total debt, less cash and cash equivalents, plus stockholders’/members’ equity. This non-GAAP financial measure has limitations as an analytical tool in that it subtracts cash and cash equivalents and therefore may imply that the Company has less debt than the most comparable measure determined in accordance with GAAP. Because of this limitation, this non-GAAP financial measure should be considered along with other financial measures presented in accordance with GAAP. The presentation of this non-GAAP financial measure is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. We have reconciled this non-GAAP financial measure with the most directly comparable GAAP financial measure in the following table: As of (in thousands, except percentages) March 31, 2024 December 31, 2023 Notes payable $ 4,247 $ 75,627 Stockholders’/Members’ equity 333,115 208,903 Total capitalization $ 337,362 $ 284,530 Debt-to-book capitalization 1.3 % 26.6 % Notes payable $ 4,247 $ 75,627 Less: cash and cash equivalents 32,778 19,777 Net debt (28,531 ) 55,850 Stockholders’/Members’ equity 333,115 208,903 Total net capitalization $ 304,584 264,753 Net debt-to-book capitalization (9.4 )% 21.1 % Adjusted net income Adjusted net income is not a measure of net income or net income margin as determined by GAAP. Adjusted net income is a supplemental non-GAAP financial measure used by management and external users of our consolidated financial statements, such as industry analysts, investors, lenders, and rating agencies. We define adjusted net income as net income adjusted for the tax impact using a 25.0% federal and state blended tax rate (assuming 100% public ownership to adjust for the impact of taxes on earnings attributable to Smith Douglas Holdings LLC as if Smith Douglas Holdings LLC was a subchapter C corporation in the periods presented). Management believes adjusted net income is useful because it allows management to more effectively evaluate our operating performance and comparability to industry peers who record income tax expense on their income before tax as opposed to the income of Smith Douglas Holdings LLC not being taxed at the entity level and, therefore, not reflecting a charge against earnings for income tax expense. Adjusted net income should not be considered as an alternative to, or more meaningful than, net income or any other measure as determined in accordance with GAAP. Our computation of adjusted net income may not be comparable to adjusted net income of other companies. We present adjusted net income because we believe it provides useful information regarding our comparability to peers. The following table presents a reconciliation of adjusted net income to the GAAP financial measure of net income for each of the periods indicated: Three months ended March 31, (in thousands, except percentages) 2024 2023 Net income $ 20,486 $ 28,826 Provision for income taxes 921 — Income before income taxes 21,407 28,826 Tax-effected adjustments(1) 5,352 7,207 Adjusted net income $ 16,055 $ 21,619 (1) For the year ended December 31, 2023 and 2022, our tax expenses assumes a 25.0% federal and state blended tax rate (assuming 100% public ownership to adjust for the impact of taxes on earnings attributable to Smith Douglas Holdings LLC as if Smith Douglas Holdings LLC was a subchapter C corporation in the periods presented). View source version on businesswire.com: https://www.businesswire.com/news/home/20240513037376/en/Contacts Investor Relations Drew Mackintosh (310) 924-9036 ir@smithdouglas.com
Smith Douglas Homes Corp. (NYSE: SDHC) (“Smith Douglas” or the “Company”) today announced first quarter results for the three months ended March 31, 2024. Q1 2024 Results as compared to Q1 2023: Net new orders increased 15% to 765 Home closings increased 13% to 566 Revenue increased 13% to $189.2 million Pre-tax income of $21.4 million Earnings of $0.33 per diluted share Backlog homes increased 19% to 1,110 Sales value of backlog homes increased 25% to $381.2 million Debt-to-book capitalization of 1.3% Active community count increased 49% to 70 at quarter end Total controlled lots increased 82% to 14,117 Greg Bennett, Vice Chairman and Chief Executive Officer, commented, “We are pleased by the results this quarter, our first as a public company, during which we completed our IPO in January and concurrently amended and increased the size of our credit facility. We achieved our sales and closings expectations and continue to produce excellent gross margins, coming in at 26.1% for the period.” Mr. Bennett continued, “During the quarter we also had the opportunity to expand our footprint by contracting for lots in the Central Georgia market in Houston County, which includes Perry and Warner Robbins and the surrounding submarket, as well as in Chattanooga, Tennessee. We intend to leverage our expansive operations in our Atlanta Division as we scale up the R-teams in these markets.” Russ Devendorf, Executive Vice President and Chief Financial Officer, added, “Having our capital markets transactions behind us, we are in a strong financial position and can now focus on executing our growth strategy. We finished the quarter with almost $33 million of cash, $333 million of stockholders’ equity and zero borrowings under our $250 million unsecured credit facility resulting in a negative net debt position with a net debt-to-net book capitalization of (9.4)%.” Conference Call & Webcast Information Management will host a conference call to discuss the Company’s results at 8:30 a.m. Eastern Time on May 14, 2024. Interested parties can dial in using the numbers below or access the call via a webcast link provided in the investor relations section of the company’s website. Dial-in Numbers: Toll Free - North America (+1) 800-715-9871 International: (+1) 646-307-1963 Conference ID: 4493724 Replay Numbers: Toll Free - North America: (+1) 800-770-2030 Playback Passcode: 4493724 Replay will expire 7 days following the event About Smith Douglas Homes Headquartered in Atlanta, Georgia, Smith Douglas Homes completed its initial public offering in January 2024. Since its inception, Smith Douglas has been entrusted by over 13,000 families to fulfill their new home dreams. Ranked a top 50 builder nationally for several years and with 2,297 closings in 2023, Smith Douglas currently holds the #36 position on the Builder Magazine Top 100 list. The Smith Douglas communities are primarily targeted to entry-level and empty-nest homebuyers looking to purchase a new home priced below the Federal Housing Administration loan limit in the metro areas of Atlanta, Birmingham, Charlotte, Houston, Huntsville, Nashville, and Raleigh. Smith Douglas offers its homebuyers a personalized, affordable-luxury buying experience at attractive prices. Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation statements regarding the Company’s performance, growth, strategic opportunities, and financial position. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the factors discussed under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, as the same may be updated from time to time in our subsequent filings with the Securities and Exchange Commission. These forward-looking statements are based on management’s current estimates and expectations. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change. Smith Douglas Homes Condensed Consolidated Statements of Income (Unaudited, in thousands, except share and per share amounts) Three months ended March 31, 2024 2023 Home closing revenue $ 189,209 $ 168,144 Cost of home closings 139,749 119,611 Home closing gross profit 49,460 48,533 Selling, general and administrative costs 27,541 19,794 Equity in income from unconsolidated entities (184 ) (210 ) Interest expenses 698 245 Other income, net (2 ) (122 ) Income before income taxes 21,407 28,826 Provisions for income taxes 921 — Net income 20,486 $ 28,826 Net income attributable to non-controlling interests and LLC members prior to IPO 17,514 Net income attributable to Smith Douglas Homes Corp. $ 2,972 Period from January 11, 2024 to March 31, 2024 Earnings per share: Basic $ 0.34 Diluted $ 0.33 Weighted average shares of common stock outstanding: Basic 8,846,154 Diluted 51,410,397 Smith Douglas Homes Condensed Consolidated Balance Sheets (Unaudited, in thousands, except share and per share amounts) March 31, 2024 December 31, 2023 Assets Cash and cash equivalents $ 32,778 $ 19,777 Real estate inventory 234,080 213,104 Deposits on real estate under option or contract 64,770 57,096 Real estate not owned 13,617 16,815 Property and equipment, net 1,634 1,543 Goodwill 25,726 25,726 Deferred tax asset, net 13,054 — Other assets 15,591 18,631 Total assets $ 401,250 $ 352,692 Liabilities and Stockholders’/Members’ Equity Liabilities: Accounts payable $ 11,510 $ 17,318 Customer deposits 8,989 7,168 Notes payable 4,247 75,627 Liabilities related to real estate not owned 13,617 16,815 Accrued expenses and other liabilities 19,371 26,861 Tax receivable agreement liability 10,401 — Total liabilities 68,135 143,789 Commitments and contingencies (Note 15) Members’ equity: Class A units — 206,303 Class C units — 2,000 Class D units — 600 Total members’ equity — 208,903 Stockholders’ equity: Preferred stock, $0.0001 par value – 10,000,000 shares authorized; none issued and outstanding as of March 31, 2024 — — Class A common stock, $0.0001 par value – 250,000,000 shares authorized; 8,846,154 shares issued and outstanding as of March 31, 2024 1 — Class B common stock, $0.0001 par value – 100,000,000 shares authorized; 42,435,897 shares issued and outstanding as of March 31, 2024 4 — Additional paid-in capital 56,746 — Retained earnings 2,972 — Total stockholders’ equity attributable to Smith Douglas Homes Corp. 59,723 — Non-controlling interests attributable to Smith Douglas Holdings LLC 273,392 — Total members’/stockholders’ equity 333,115 208,903 Total liabilities and stockholders’/members’ equity $ 401,250 $ 352,692 Smith Douglas Homes Summary Cash Flow Information (unaudited, dollars in thousands) Three months ended March 31, 2024 2023 Amount Amount Cash (used in) provided by operating activities $ (9,273 ) $ 26,555 Cash (used in) provided by investing activities $ (430 ) $ 38 Cash provided by (used in) financing activities $ 22,704 $ (43,800 ) Net increase (decrease) in cash and cash equivalents $ 13,001 $ (17,207 ) Smith Douglas Homes Selected Other Operating Data (unaudited, dollars in thousands) Three months ended March 31, 2024 2023 Period over period change Amount Amount Amount Percent Home closings 566 500 66 13.2 % ASP of homes closed $ 334 $ 336 $ (2 ) (0.6 )% Net new home orders 765 664 101 15.2 % Contract value of net new home orders $ 259,440 $ 215,118 $ 44,322 20.6 % ASP of net new home orders $ 339 $ 324 $ 15 4.6 % Cancellation rate(1) 10.6 % 8.9 % 1.7 % 19.1 % Backlog homes (period end)(2) 1,110 934 176 18.8 % Contract value of backlog homes (period end) $ 381,155 $ 305,643 $ 75,512 24.7 % ASP of backlog homes (period end) $ 343 $ 327 16 4.9 % Active communities (period end)(3) 70 47 23 48.9 % Controlled lots: Homes under construction 896 638 258 40.4 % Owned lots 693 370 323 87.3 % Optioned lots 12,528 6,734 5,794 86.0 % Total controlled lots 14,117 7,742 6,375 82.3 % [nm* Not meaningful] 1. The cancellation rate is the total number of cancellations during the period divided by the total gross new home orders during the period. 2. Backlog homes (period end) is the number of homes in backlog from the previous period plus the number of net new home orders generated during the current period minus the number of homes closed during the current period. 3. A community becomes active once the model is completed or the community has its first sale. A community becomes inactive when it has fewer than two homes remaining to sell. Smith Douglas Homes Selected Financial Information by Segment (unaudited, dollars in thousands) Three months ended March 31, 2024 2023 Home closing revenue Home closings ASP of homes closed Home closing revenue Home closings ASP of homes closed Alabama $ 39,655 132 $ 300 $ 24,067 81 $ 297 Atlanta 62,620 183 342 76,174 235 324 Charlotte 13,464 34 396 12,502 33 379 Houston 24,030 74 325 — — — Nashville 22,030 63 349 23,889 65 368 Raleigh 27,410 80 343 31,512 86 366 Total $ 189,209 566 $ 334 $ 168,144 500 $ 336 As of March 31, 2024 2023 Period over period change Backlog homes Contract value of backlog homes ASP of backlog homes Backlog homes Contract value of backlog homes ASP of backlog homes Backlog homes Contract value of backlog homes ASP of backlog homes Alabama 172 $ 52,198 $ 303 151 $ 43,928 $ 291 21 $ 8,270 $ 12 Atlanta 434 151,356 349 445 140,209 315 (11 ) 11,147 34 Charlotte 93 36,143 389 79 28,229 357 14 7,914 32 Houston 197 63,839 324 — — — 197 63,839 324 Nashville 68 25,531 375 116 42,110 363 (48 ) (16,579 ) 12 Raleigh 146 52,088 357 143 51,167 358 3 921 (1 ) Total 1,110 $ 381,155 $ 343 934 $ 305,643 $ 327 176 $ 75,512 $ 16 Three months ended March 31, 2024 2023 Period over period change Net income: Alabama $ 4,604 $ 2,241 $ 2,363 Atlanta 14,571 19,549 (4,978 ) Charlotte 1,624 1,933 (309 ) Houston 3,366 — 3,366 Nashville 2,313 3,231 (918 ) Raleigh 4,810 7,231 (2,421 ) Segment total 31,288 34,185 (2,897 ) Corporate(1) (10,802 ) (5,359 ) (5,443 ) Total $ 20,486 $ 28,826 $ (8,340 ) (1) Corporate primarily includes corporate overhead costs, such as payroll and benefits, business insurance, information technology, office costs, outside professional services and travel costs, and certain other amounts that are not allocated to the reportable segments. Non-GAAP Financial Measures In addition to our results determined in accordance with generally accepted accounting principles in the U.S. (“GAAP”), this press release includes net-debt-to-net book capitalization and adjusted net income. Net-debt-to-net-book capitalization Net-debt-to-net book capitalization is a supplemental measure of our leverage that is not required by, or presented in accordance with, GAAP and should not be considered as an alternative to debt-to-book capitalization or any other measure derived in accordance with GAAP. We caution investors that amounts presented in accordance with our definition of net-debt-to-net book capitalization may not be comparable to similar measures disclosed by our competitors because not all companies and analysts calculate this non-GAAP financial measure in the same manner. We present this non-GAAP financial measure because we consider it to be an important supplemental measure of our leverage and believe it is frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry. We define net-debt-to-net book capitalization as: Total debt, less cash and cash equivalents, divided by Total debt, less cash and cash equivalents, plus stockholders’/members’ equity. This non-GAAP financial measure has limitations as an analytical tool in that it subtracts cash and cash equivalents and therefore may imply that the Company has less debt than the most comparable measure determined in accordance with GAAP. Because of this limitation, this non-GAAP financial measure should be considered along with other financial measures presented in accordance with GAAP. The presentation of this non-GAAP financial measure is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. We have reconciled this non-GAAP financial measure with the most directly comparable GAAP financial measure in the following table: As of (in thousands, except percentages) March 31, 2024 December 31, 2023 Notes payable $ 4,247 $ 75,627 Stockholders’/Members’ equity 333,115 208,903 Total capitalization $ 337,362 $ 284,530 Debt-to-book capitalization 1.3 % 26.6 % Notes payable $ 4,247 $ 75,627 Less: cash and cash equivalents 32,778 19,777 Net debt (28,531 ) 55,850 Stockholders’/Members’ equity 333,115 208,903 Total net capitalization $ 304,584 264,753 Net debt-to-book capitalization (9.4 )% 21.1 % Adjusted net income Adjusted net income is not a measure of net income or net income margin as determined by GAAP. Adjusted net income is a supplemental non-GAAP financial measure used by management and external users of our consolidated financial statements, such as industry analysts, investors, lenders, and rating agencies. We define adjusted net income as net income adjusted for the tax impact using a 25.0% federal and state blended tax rate (assuming 100% public ownership to adjust for the impact of taxes on earnings attributable to Smith Douglas Holdings LLC as if Smith Douglas Holdings LLC was a subchapter C corporation in the periods presented). Management believes adjusted net income is useful because it allows management to more effectively evaluate our operating performance and comparability to industry peers who record income tax expense on their income before tax as opposed to the income of Smith Douglas Holdings LLC not being taxed at the entity level and, therefore, not reflecting a charge against earnings for income tax expense. Adjusted net income should not be considered as an alternative to, or more meaningful than, net income or any other measure as determined in accordance with GAAP. Our computation of adjusted net income may not be comparable to adjusted net income of other companies. We present adjusted net income because we believe it provides useful information regarding our comparability to peers. The following table presents a reconciliation of adjusted net income to the GAAP financial measure of net income for each of the periods indicated: Three months ended March 31, (in thousands, except percentages) 2024 2023 Net income $ 20,486 $ 28,826 Provision for income taxes 921 — Income before income taxes 21,407 28,826 Tax-effected adjustments(1) 5,352 7,207 Adjusted net income $ 16,055 $ 21,619 (1) For the year ended December 31, 2023 and 2022, our tax expenses assumes a 25.0% federal and state blended tax rate (assuming 100% public ownership to adjust for the impact of taxes on earnings attributable to Smith Douglas Holdings LLC as if Smith Douglas Holdings LLC was a subchapter C corporation in the periods presented). View source version on businesswire.com: https://www.businesswire.com/news/home/20240513037376/en/