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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Smith Douglas Homes Corp | NYSE:SDHC | NYSE | Common Stock |
| Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|
| -0.39 | -1.18% | 32.75 | 33.10 | 31.75 | 32.84 | 33,714 | 01:00:00 |
From Oct 2024 to Nov 2024
Smith Douglas Homes Corp. (NYSE: SDHC) (“Smith Douglas” or the “Company”) today announced third quarter results for the three and nine months ended September 30, 2024.
Q3 2024 Results as compared to Q3 2023:
Greg Bennett, Vice Chairman and Chief Executive Officer, commented, “Our team's commitment to our core operational strategies - offering homebuyers a personalized buying experience, working closely with suppliers and trade partners for an efficient production cycle, and maintaining a land light balance sheet - continues to deliver strong results. We achieved record results in the third quarter, with 812 closings for $277.8 million in home closing revenue, and gross margins of 26.5%, all of which translated to pretax income of $39.6 million.”
Russ Devendorf, Executive Vice President and Chief Financial Officer, added, “During the quarter we further expanded our geographic presence by expanding into Greenville, SC as well as continuing to build our infrastructure in Central Georgia and Chattanooga, TN. This strategic growth reflects our commitment to meeting demand for quality homes in the Southeastern and Southern United States.”
Mr. Devendorf continued, “As we approach the fourth quarter, our financial condition remains strong. As of September 30, 2024, we had 16,743 unstarted controlled lots, 96% of which are controlled via option agreement. We had 74 active communities at quarter end and 961 homes in backlog. We increased our total controlled lot position by 54% year-over-year and ended the quarter with $24 million of cash, $372 million of stockholder’s equity and zero borrowings under our credit facility, resulting in a net debt-to-net book capitalization of (5.8)%.”
Conference Call & Webcast Information
Management will host a conference call to discuss the Company’s results at 8:30 a.m. Eastern Time on November 12, 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: 8743844
Replay Numbers:
Toll Free - North America: (+1) 800-770-2030 Playback Passcode: 8743844 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 15,000 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, Chattanooga, 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
September 30,
Nine months ended
September 30,
2024
2023
2024
2023
Home closing revenue
$
277,835
$
197,638
$
687,977
$
547,304
Cost of home closings
204,140
140,548
505,764
388,983
Home closing gross profit
73,695
57,090
182,213
158,321
Selling, general, and administrative costs
34,137
22,952
93,487
64,674
Equity in income from unconsolidated entities
(396
)
(222
)
(800
)
(658
)
Interest expense
614
476
1,903
1,022
Other (income) expense, net
(245
)
(49
)
765
(217
)
Income before income taxes
39,585
33,933
86,858
93,500
Provision for income taxes
1,761
—
3,814
—
Net income
37,824
$
33,933
83,044
$
93,500
Net income attributable to non-controlling interests and LLC members prior to IPO
32,477
71,079
Net income attributable to Smith Douglas Homes Corp.
$
5,347
$
11,965
Three months
ended
September 30,
2024
Period from
January 11,
2024 to
September
30, 2024
Earnings per share:
Basic
$
0.60
$
1.35
Diluted
$
0.58
$
1.30
Weighted average shares of common stock outstanding:
Basic
8,846,154
8,846,154
Diluted
51,533,407
51,502,413
Smith Douglas Homes
Condensed Consolidated Balance Sheets
September 30,
2024
December 31,
2023
(unaudited)
Assets
Cash and cash equivalents
$
23,716
$
19,777
Real estate inventory
282,013
213,104
Deposits on real estate under option or contract
80,209
57,096
Real estate not owned
9,445
16,815
Property and equipment, net
3,569
1,543
Goodwill
25,726
25,726
Deferred tax asset, net
10,693
—
Other assets
24,679
18,631
Total assets
$
460,050
$
352,692
Liabilities and Stockholders’/Members’ Equity
Liabilities:
Accounts payable
$
23,505
$
17,318
Customer deposits
7,608
7,168
Notes payable
3,463
75,627
Liabilities related to real estate not owned
9,445
16,815
Accrued expenses and other liabilities
33,268
26,861
Tax receivable agreement liability
10,401
—
Total liabilities
87,690
143,789
Commitments and contingencies (Note 9)
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 September 30, 2024
—
—
Class A common stock, $0.0001 par value – 250,000,000 shares authorized; 8,846,154 shares issued and outstanding as of September 30, 2024
1
—
Class B common stock, $0.0001 par value – 100,000,000 shares authorized; 42,435,897 shares issued and outstanding as of September 30, 2024
4
—
Additional paid-in capital
57,010
—
Retained earnings
11,420
—
Total stockholders’ equity attributable to Smith Douglas Homes Corp.
68,435
—
Non-controlling interests attributable to Smith Douglas Holdings LLC
303,925
—
Total stockholders’/members’ equity
372,360
208,903
Total liabilities and stockholders’/members’ equity
$
460,050
$
352,692
Smith Douglas Homes
Summary Cash Flow Information
(Unaudited, dollars in thousands)
Nine months ended September 30,
2024
2023
Net cash provided by operating activities
$
13,655
$
54,958
Net cash used in investing activities
(3,780
)
(75,631
)
Net cash (used in) provided by financing activities
(5,936
)
1,512
Net increase (decrease) in cash and cash equivalents
3,939
(19,161
)
Cash and cash equivalents, beginning of period
19,777
29,601
Cash and cash equivalents, end of period
$
23,716
$
10,440
Smith Douglas Homes
Selected Other Operating Data
(Unaudited, dollars in thousands)
Three months ended
September 30,
Nine months ended
September 30,
2024
2023
2024
2023
Home closings
812
583
2,031
1,643
ASP of homes closed
$
342
$
339
$
339
$
333
Net new home orders
600
568
2,080
1,844
Contract value of net new home orders
$
205,164
$
193,435
$
708,446
$
614,683
ASP of net new home orders
$
342
$
341
$
341
$
333
Cancellation rate(2)
11.4
%
11.0
%
11.3
%
9.5
%
Backlog homes (period end)(3)
961
1,042
961
1,042
Contract value of backlog homes (period end)
$
332,035
$
350,439
$
332,035
$
350,439
ASP of backlog homes (period end)
$
346
$
336
$
346
$
336
Active communities (period end)(4)
74
62
74
62
Controlled lots (period end):
Homes under construction
1,135
905
1,135
905
Owned lots
611
395
611
395
Optioned lots
16,132
10,279
16,132
10,279
Total controlled lots
17,878
11,579
17,878
11,579
(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)
Home Closing Revenue
Three months ended
September 30,
2024
2023
Period over period change
Home
closing
revenue
Home
closings
ASP of
homes
closed
Home
closing
revenue
Home
closings
ASP of
homes
closed
Home
closing
revenue
Home
closings
ASP of
homes
closed
Alabama
$
37,780
129
$
293
$
33,048
114
$
290
14
%
13
%
1
%
Atlanta
121,334
350
347
80,494
232
347
51
%
51
%
—
%
Charlotte
32,070
82
391
15,155
44
344
112
%
86
%
14
%
Houston
30,830
97
318
10,260
31
331
200
%
213
%
(4
%)
Nashville
20,097
52
386
25,694
70
367
(22
)%
(26
)%
5
%
Raleigh
35,724
102
350
32,987
92
359
8
%
11
%
(3
)%
Total
$
277,835
812
$
342
$
197,638
583
$
339
41
%
39
%
1
%
Nine months ended
September 30,
2024
2023
Period over period change
Home
closing
revenue
Home
closings
ASP of
homes
closed
Home
closing
revenue
Home
closings
ASP of
homes
closed
Home
closing
revenue
Home
closings
ASP of
homes
closed
Alabama
$
121,020
406
$
298
$
75,915
261
$
291
59
%
56
%
2
%
Atlanta
264,174
764
346
250,772
769
326
5
%
(1
)%
6
%
Charlotte
60,886
159
383
42,026
117
359
45
%
36
%
7
%
Houston
86,108
266
324
10,260
31
331
739
%
758
%
(2
%)
Nashville
63,834
173
369
77,602
214
363
(18
)%
(19
)%
2
%
Raleigh
91,955
263
350
90,729
251
361
1
%
5
%
(3
)%
Total
$
687,977
2,031
$
339
$
547,304
1,643
$
333
26
%
24
%
2
%
Backlog
As of
September 30,
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
173
$
50,321
$
291
257
$
78,431
$
305
(33
)%
(36
)%
(5
%)
Atlanta
363
126,406
348
359
119,157
332
1
%
6
%
5
%
Charlotte
104
42,454
408
68
26,448
389
53
%
61
%
5
%
Houston
168
55,392
330
101
34,266
339
66
%
62
%
(3
%)
Nashville
36
14,983
416
107
38,881
363
(66
)%
(61
)%
15
%
Raleigh
117
42,479
363
150
53,256
355
(22
)%
(20
)%
2
%
Total
961
$
332,035
$
346
1,042
$
350,439
$
336
(8
%)
(5
%)
3
%
Controlled Lots
As of
September 30,
2024
2023
Period over period change
Owned(1)
Optioned
Total
Controlled
Owned(1)
Optioned
Total
Controlled
Owned(1)
Optioned
Total
Controlled
Alabama
390
1,388
1,778
329
1,578
1,907
19
%
(12
)%
(7
)%
Atlanta
567
7,950
8,517
318
4,612
4,930
78
%
72
%
73
%
Charlotte
141
2,339
2,480
67
1,101
1,168
110
%
112
%
112
%
Houston
364
1,713
2,077
242
1,157
1,399
50
%
48
%
48
%
Nashville
84
913
997
166
816
982
(49
)%
12
%
2
%
Raleigh
200
1,491
1,691
178
1,015
1,193
12
%
47
%
42
%
Other
—
338
338
—
—
—
100
%
100
%
100
%
Total
1,746
16,132
17,878
1,300
10,279
11,579
34
%
57
%
54
%
(1)
Includes homes under construction and owned lots.
Net Income
Three months ended September 30,
Nine months ended September 30,
2024
2023
Period over
period
change
2024
2023
Period over
period
change
Alabama
$
4,188
$
3,882
$
306
$
14,351
$
7,558
$
6,793
Atlanta
28,929
21,282
7,647
61,512
64,210
(2,698
)
Charlotte
5,120
2,303
2,817
9,124
6,616
2,508
Houston
4,305
869
3,436
11,117
869
10,248
Nashville
2,707
4,787
(2,080
)
7,809
12,519
(4,710
)
Raleigh
5,770
6,795
(1,025
)
15,787
19,641
(3,854
)
Segment total
51,019
39,918
11,101
119,700
111,413
8,287
Other(1)
(13,195
)
(5,985
)
(7,210
)
(36,656
)
(17,913
)
(18,743
)
Total
$
37,824
$
33,933
$
3,891
$
83,044
$
93,500
$
(10,456
)
(1)
Other primarily includes homebuilding operations in non-reportable segments, 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:
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)
September 30,
2024
December 31,
2023
Notes payable
$
3,463
$
75,627
Stockholders’/ Members’ equity
372,360
208,903
Total capitalization
$
375,823
$
284,530
Debt-to-book capitalization
0.9
%
26.6
%
Notes payable
$
3,463
$
75,627
Less: cash and cash equivalents
23,716
19,777
Net debt
(20,253
)
55,850
Stockholders’/ Members’ equity
372,360
208,903
Total net capitalization
$
352,107
$
264,753
Net debt-to-net book capitalization
(5.8
)%
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 24.5% 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
September 30,
Nine months ended
September 30,
2024
2023
2024
2023
Net income
$
37,824
$
33,933
$
83,044
$
93,500
Provision for income taxes
1,761
—
3,814
—
Income before income taxes
39,585
33,933
86,858
93,500
Tax-effected adjustments(1)
9,710
8,324
21,306
22,936
Adjusted net income
$
29,875
$
25,609
$
65,552
$
70,564
(1)
For the three and nine months ended September 30, 2024 and 2023, our tax expenses assumes a 24.5% 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/20241111261245/en/
Investor Relations Joe Thomas investors@smithdouglas.com
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