Smith Douglas Homes Reports Third Quarter 2024 Results
ATLANTA--(BUSINESS WIRE)--November 12, 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:
-- Home closings increased 39% to 812 -- Home closing revenue increased 41% to $277.8 million -- Home closing gross margin of 26.5% -- Net new home orders increased 6% to 600 -- Pretax income of $39.6 million -- Earnings of $0.58 per diluted share -- Debt-to-book capitalization of 0.9% -- Active community count increased 19% to 74 at quarter end -- Total controlled lots increased 54% to 17,878
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 Nine months ended
September 30, 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
======= =======
Period from
Three months January 11,
ended 2024 to
September 30, September
2024 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, December 31,
2024 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:
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November 12, 2024 07:00 ET (12:00 GMT)
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