Smith Douglas Homes Reports First Quarter 2024 Results
ATLANTA, May 14, 2024 (Business Wire) – 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.
Investor Relations
Drew Mackintosh
(310) 924-9036
ir@smithdouglas.com
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 expense
|
|
|
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).
|