Smith Douglas Homes Corp. (NYSE: SDHC) (“Smith Douglas” or the “Company”) today announced results for the fourth quarter and year ended December 31, 2024.

Q4 2024 Results as compared to Q4 2023:

• Home closings increased 28% to 836
• Home closing revenue increased 32% to $287.5 million
• Home closing gross margin of 25.5% compared to 26.7%
• Net new home orders increased 9% to 569
• Pre-tax income of $30.0 million compared to $29.7 million
• Earnings of $0.46 per diluted share

Full Year 2024 Results as compared to Full Year 2023:

• Home closings increased 25% to 2,867
• Home closing revenue increased 28% to $975.5 million
• Home closing gross margin of 26.2% compared to 28.3%
• Net new home orders increased 12% to 2,649
• Pre-tax income of $116.9 million compared to $123.2 million
• Earnings of $1.81 per diluted share
• Debt-to-book capitalization decreased to 0.8% from 26.6%
• Active community count increased 13% to 78 at year end
• Total controlled lots increased 52% to 19,522

Greg Bennett, Vice Chairman and Chief Executive Officer, commented, “Smith Douglas ended the year on a strong note, generating pre-tax income of $30 million in the fourth quarter of 2024. New home deliveries for the quarter totaled 836, which was well above our stated guidance and represented a Company record for quarterly closings. Home closing gross margin came in line with our expectations for the quarter at 25.5%. I want to thank all our team members for their efforts this quarter and for making our first year as a public company a real success.”

Russ Devendorf, Executive Vice President and Chief Financial Officer added, “During the quarter we made further progress towards expanding our homebuilding operations in existing markets and establishing our presence in newer markets. Lot count at the end of the quarter stood at 19,522 lots, representing a 52% increase over last year. Approximately 96% of our unstarted controlled lots were controlled via option agreement, which is consistent with our land light strategy.”

Mr. Devendorf continued, “As we enter the heart of the 2025 spring selling season, we remain encouraged by the trends we are seeing in our markets. Traffic levels at our communities and online have been solid so far this year, though affordability issues continue to persist, while the supply of existing homes remains below historical levels. Given the value proposition Smith Douglas offers to buyers through our affordable pricing and the customization we can provide, we believe we can compete effectively in today’s market environment.”

Conference Call & Webcast Information

Management will host a conference call to discuss the Company’s results at 8:30 a.m. Eastern Time on March 12, 2025. 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: 5403062

Replay Numbers:

Toll Free - North America: (+1) 800-770-2030

Playback Passcode: 5403062

Replay will expire 7 days following the event

About Smith Douglas Homes

Headquartered in Woodstock, Georgia, Smith Douglas Homes completed its initial public offering in January 2024. Since its inception, Smith Douglas has been entrusted by over 17,500 families to fulfill their new home dreams. Ranked a top 50 builder nationally for several years and with 2,867 closings in 2024, 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, Central Georgia, Charlotte, Chattanooga, Greenville, 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, financial position, and ability to compete in the market environment. 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.

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’ 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:

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 24.6% 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:

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