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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