Exhibit 99.1
Smith Douglas Homes Reports Second Quarter 2024 Results
ATLANTA, August 14, 2024 (Business Wire) – Smith Douglas Homes Corp. (NYSE: SDHC) (“Smith Douglas” or the “Company”) today announced second
quarter results for the three and six months ended June 30, 2024.
Q2 2024 Results as compared to Q2 2023:
|
• |
Net new orders increased 17% to 715
|
|
• |
Home closings increased 17% to 653
|
|
• |
Revenue increased 22% to $220.9 million
|
|
• |
Pre-tax income of $25.9 million
|
|
• |
Earnings of $0.40 per diluted share
|
|
• |
Backlog homes increased 19% to 1,173
|
|
• |
Sales value of backlog homes increased 23% to $404.7 million
|
|
• |
Debt-to-book capitalization of 1.1%
|
|
• |
Active community count increased 70% to 75 at quarter end
|
|
• |
Total controlled lots increased 81% to 15,842
|
Greg Bennett, Vice Chairman and Chief Executive Officer, commented, “Despite ongoing affordability challenges for our homebuyers, we have achieved
another robust financial quarter due to our team’s unwavering commitment to operational excellence, combined with strong market demand. Our success is highlighted by a 17% year-over-year increase in closings and delivering above industry average
gross margins of 26.7% for the quarter, which resulted in a pretax income of $25.9 million.”
Russ Devendorf, Executive Vice President and Chief Financial Officer added, “During the quarter we have continued our prudent capital deployment
in support of growth while maintaining our disciplined commitment to our land light strategy. We grew our total controlled lot position by 12% for the quarter, with 96% of our unstarted controlled lots being controlled via option agreement. We
ended the quarter with over $17 million of cash, nearly $345 million of stockholder’s equity and zero borrowings under our credit facility, resulting in a net-debt-to-net book capitalization of (4.1)%.”
Conference Call & Webcast Information
Management will host a conference call to discuss the Company’s results at 8:30 a.m. Eastern Time on August 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: 9762287
Replay Numbers:
Toll Free - North America: (+1) 800-770-2030
Playback Passcode: 9762287
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.
Investor Relations
Joe Thomas
908-399-5413
investors@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 June 30,
|
|
|
Six months ended June 30,
|
|
| |
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
|
Home closing revenue
|
|
$
|
220,933
|
|
|
$
|
181,522
|
|
|
$
|
410,142
|
|
|
$
|
349,666
|
|
|
Cost of home closings
|
|
|
161,875
|
|
|
|
128,824
|
|
|
|
301,624
|
|
|
|
248,435
|
|
|
Home closing gross profit
|
|
|
59,058
|
|
|
|
52,698
|
|
|
|
108,518
|
|
|
|
101,231
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative costs
|
|
|
31,809
|
|
|
|
21,928
|
|
|
|
59,350
|
|
|
|
41,722
|
|
|
Equity in income from unconsolidated entities
|
|
|
(220
|
)
|
|
|
(226
|
)
|
|
|
(404
|
)
|
|
|
(436
|
)
|
|
Interest expense
|
|
|
591
|
|
|
|
301
|
|
|
|
1,289
|
|
|
|
546
|
|
|
Other expense (income), net
|
|
|
1,012
|
|
|
|
(46
|
)
|
|
|
1,010
|
|
|
|
(168
|
)
|
|
Income before income taxes
|
|
|
25,866
|
|
|
|
30,741
|
|
|
|
47,273
|
|
|
|
59,567
|
|
|
Provision for income taxes
|
|
|
1,132
|
|
|
|
- |
|
|
|
2,053
|
|
|
|
- |
|
|
Net income
|
|
|
24,734
|
|
|
$
|
30,741
|
|
|
|
45,220
|
|
|
$
|
59,567
|
|
|
Net income attributable to non-controlling interests and LLC members prior to IPO
|
|
|
21,088
|
|
|
|
|
|
|
|
38,602
|
|
|
|
|
|
|
Net income attributable to Smith Douglas Homes Corp.
|
|
$
|
3,646
|
|
|
|
|
|
|
$
|
6,618
|
|
|
|
|
|
|
|
Three months ended
June 30, 2024
|
|
|
Period from January 11,
2024 to June 30, 2024
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.41
|
|
|
$
|
0.75
|
|
|
Diluted
|
|
$
|
0.40
|
|
|
$
|
0.74
|
|
|
Weighted average shares of common stock outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
8,846,154
|
|
|
|
8,846,154
|
|
|
Diluted
|
|
|
51,431,974
|
|
|
|
51,414,509
|
|
Smith Douglas Homes
Condensed Consolidated Balance Sheets
| |
|
June 30,
2024
|
|
|
December 31,
2023
|
|
| |
|
(unaudited) |
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
17,298
|
|
|
$
|
19,777
|
|
|
Real estate inventory
|
|
|
266,553
|
|
|
|
213,104
|
|
|
Deposits on real estate under option or contract
|
|
|
66,253
|
|
|
|
57,096
|
|
|
Real estate not owned
|
|
|
13,635
|
|
|
|
16,815
|
|
|
Property and equipment, net
|
|
|
3,351
|
|
|
|
1,543
|
|
|
Goodwill
|
|
|
25,726
|
|
|
|
25,726
|
|
|
Deferred tax asset, net
|
|
|
10,934
|
|
|
|
- |
|
|
Other assets
|
|
|
25,504
|
|
|
|
18,631
|
|
|
Total assets
|
|
$
|
429,254
|
|
|
$
|
352,692
|
|
|
Liabilities and Stockholders’/Members’ Equity
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
21,458
|
|
|
$
|
17,318
|
|
|
Customer deposits
|
|
|
9,543
|
|
|
|
7,168
|
|
|
Notes payable
|
|
|
3,859
|
|
|
|
75,627
|
|
|
Liabilities related to real estate not owned
|
|
|
13,635
|
|
|
|
16,815
|
|
|
Accrued expenses and other liabilities
|
|
|
25,799
|
|
|
|
26,861
|
|
|
Tax receivable agreement liability
|
|
|
10,401
|
|
|
|
- |
|
|
Total liabilities
|
|
|
84,695
|
|
|
|
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 June 30, 2024
|
|
|
- |
|
|
|
- |
|
|
Class A common stock, $0.0001 par value – 250,000,000 shares authorized; 8,846,154 shares issued and outstanding as of
June 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
June 30, 2024
|
|
|
4
|
|
|
|
-
|
|
|
Additional paid-in capital
|
|
|
55,776
|
|
|
|
- |
|
|
Retained earnings
|
|
|
6,321
|
|
|
|
-
|
|
|
Total stockholders’ equity attributable to Smith Douglas Homes Corp.
|
|
|
62,102
|
|
|
|
-
|
|
|
Non-controlling interests attributable to Smith Douglas Holdings LLC
|
|
|
282,457
|
|
|
|
-
|
|
|
Total members’/stockholders’ equity
|
|
|
344,559
|
|
|
|
208,903
|
|
|
Total liabilities and stockholders’/members’ equity
|
|
$
|
429,254
|
|
|
$
|
352,692
|
|
Smith Douglas Homes
Summary Cash Flow Information
(Unaudited, dollars in thousands)
|
Six months ended June 30,
|
|
2024
|
|
|
2023
|
|
|
Net cash (used in) provided by operating activities
|
|
$
|
(9,234
|
)
|
|
$
|
35,902
|
|
|
Net cash used in investing activities
|
|
|
(3,153
|
)
|
|
|
(180
|
)
|
|
Net cash provided by (used in) financing activities
|
|
|
9,908
|
|
|
|
(53,931
|
)
|
|
Net decrease in cash and cash equivalents
|
|
|
(2,479
|
)
|
|
|
(18,209
|
)
|
|
Cash and cash equivalents, beginning of period
|
|
|
19,777
|
|
|
|
29,601
|
|
|
Cash and cash equivalents, end of period
|
|
$
|
17,298
|
|
|
$
|
11,392
|
|
Smith Douglas Homes
Selected Other Operating Data
(Unaudited, dollars in thousands)
| |
|
Three months ended June 30,
|
|
|
Six months ended June 30,
|
|
| |
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
|
Home closings
|
|
|
653
|
|
|
|
560
|
|
|
|
1,219
|
|
|
|
1,060
|
|
|
ASP of homes closed
|
|
$
|
338
|
|
|
$
|
324
|
|
|
$
|
336
|
|
|
$
|
330
|
|
|
Net new home orders
|
|
|
715
|
|
|
|
612
|
|
|
|
1,480
|
|
|
|
1,276
|
|
|
Contract value of net new home orders
|
|
$
|
243,842
|
|
|
$
|
206,130
|
|
|
$
|
503,282
|
|
|
$
|
421,248
|
|
|
ASP of net new home orders
|
|
$
|
341
|
|
|
$
|
337
|
|
|
$
|
340
|
|
|
$
|
330
|
|
|
Cancellation rate(1)
|
|
|
11.8
|
%
|
|
|
8.7
|
%
|
|
|
11.2
|
%
|
|
|
8.8
|
%
|
|
Backlog homes (period end)(2)
|
|
|
1,173
|
|
|
|
985
|
|
|
|
1,173
|
|
|
|
985
|
|
|
Contract value of backlog homes (period end)
|
|
$
|
404,750
|
|
|
$
|
330,258
|
|
|
$
|
404,750
|
|
|
$
|
330,258
|
|
|
ASP of backlog homes (period end)
|
|
$
|
345
|
|
|
$
|
335
|
|
|
$
|
345
|
|
|
$
|
335
|
|
|
Active communities (period end)(3)
|
|
|
75
|
|
|
|
44
|
|
|
|
75
|
|
|
|
44
|
|
|
Controlled lots (period end):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Homes under construction
|
|
|
1,088
|
|
|
|
706
|
|
|
|
1,088
|
|
|
|
706
|
|
|
Owned lots
|
|
|
587
|
|
|
|
405
|
|
|
|
587
|
|
|
|
405
|
|
|
Optioned lots
|
|
|
14,167
|
|
|
|
7,659
|
|
|
|
14,167
|
|
|
|
7,659
|
|
|
Total controlled lots
|
|
|
15,842
|
|
|
|
8,770
|
|
|
|
15,842
|
|
|
|
8,770
|
|
| (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 June 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
|
|
$
|
43,585
|
|
|
|
145
|
|
|
$
|
301
|
|
|
$
|
18,800
|
|
|
|
66
|
|
|
$
|
285
|
|
|
|
132
|
%
|
|
|
120
|
%
|
|
|
6
|
%
|
|
Atlanta
|
|
|
80,220
|
|
|
|
231
|
|
|
|
347
|
|
|
|
94,104
|
|
|
|
302
|
|
|
|
312
|
|
|
|
(15
|
)%
|
|
|
(24
|
)%
|
|
|
11
|
%
|
|
Charlotte
|
|
|
15,352
|
|
|
|
43
|
|
|
|
357
|
|
|
|
14,369
|
|
|
|
40
|
|
|
|
359
|
|
|
|
7
|
%
|
|
|
8
|
%
|
|
|
(1
|
)%
|
|
Houston
|
|
|
31,248
|
|
|
|
95
|
|
|
|
329
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
Nashville
|
|
|
21,707
|
|
|
|
58
|
|
|
|
374
|
|
|
|
28,019
|
|
|
|
79
|
|
|
|
355
|
|
|
|
(23
|
)%
|
|
|
(27
|
)%
|
|
|
6
|
%
|
|
Raleigh
|
|
|
28,821
|
|
|
|
81
|
|
|
|
356
|
|
|
|
26,230
|
|
|
|
73
|
|
|
|
359
|
|
|
|
10
|
%
|
|
|
11
|
%
|
|
|
(1
|
)%
|
|
Total
|
|
$
|
220,933
|
|
|
|
653
|
|
|
$
|
338
|
|
|
$
|
181,522
|
|
|
|
560
|
|
|
$
|
324
|
|
|
|
22
|
%
|
|
|
17
|
%
|
|
|
4
|
%
|
|
Six months
ended June 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
|
|
$
|
83,240
|
|
|
|
277
|
|
|
$
|
301
|
|
|
$
|
42,867
|
|
|
|
147
|
|
|
$
|
292
|
|
|
|
94
|
%
|
|
|
88
|
%
|
|
|
3
|
%
|
|
Atlanta
|
|
|
142,840
|
|
|
|
414
|
|
|
|
345
|
|
|
|
170,278
|
|
|
|
537
|
|
|
|
317
|
|
|
|
(16
|
)%
|
|
|
(23
|
)%
|
|
|
9
|
%
|
|
Charlotte
|
|
|
28,816
|
|
|
|
77
|
|
|
|
374
|
|
|
|
26,871
|
|
|
|
73
|
|
|
|
368
|
|
|
|
7
|
%
|
|
|
5
|
%
|
|
|
2
|
%
|
|
Houston
|
|
|
55,278
|
|
|
|
169
|
|
|
|
327
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
Nashville
|
|
|
43,737
|
|
|
|
121
|
|
|
|
361
|
|
|
|
51,908
|
|
|
|
144
|
|
|
|
360
|
|
|
|
(16
|
)%
|
|
|
(16
|
)%
|
|
|
—
|
%
|
|
Raleigh
|
|
|
56,231
|
|
|
|
161
|
|
|
|
349
|
|
|
|
57,742
|
|
|
|
159
|
|
|
|
363
|
|
|
|
(3
|
)%
|
|
|
1
|
%
|
|
|
(4
|
)%
|
|
Total
|
|
$
|
410,142
|
|
|
|
1,219
|
|
|
$
|
336
|
|
|
$
|
349,666
|
|
|
|
1,060
|
|
|
$
|
330
|
|
|
|
17
|
%
|
|
|
15
|
%
|
|
|
2
|
%
|
Backlog
|
As of June 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
|
|
|
169
|
|
|
$
|
50,122
|
|
|
$
|
297
|
|
|
|
246
|
|
|
$
|
73,028
|
|
|
$
|
297
|
|
|
|
(31
|
)%
|
|
|
(31
|
)%
|
|
|
—
|
%
|
|
Atlanta
|
|
|
492
|
|
|
|
170,724
|
|
|
|
347
|
|
|
|
374
|
|
|
|
125,606
|
|
|
|
336
|
|
|
|
32
|
%
|
|
|
36
|
%
|
|
|
3
|
%
|
|
Charlotte
|
|
|
121
|
|
|
|
49,498
|
|
|
|
409
|
|
|
|
70
|
|
|
|
25,035
|
|
|
|
358
|
|
|
|
73
|
%
|
|
|
98
|
%
|
|
|
14
|
%
|
|
Houston
|
|
|
200
|
|
|
|
64,445
|
|
|
|
322
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
Nashville
|
|
|
52
|
|
|
|
20,681
|
|
|
|
398
|
|
|
|
129
|
|
|
|
47,346
|
|
|
|
367
|
|
|
|
(60
|
)%
|
|
|
(56
|
)%
|
|
|
8
|
%
|
|
Raleigh
|
|
|
139
|
|
|
|
49,280
|
|
|
|
355
|
|
|
|
166
|
|
|
|
59,243
|
|
|
|
357
|
|
|
|
(16
|
)%
|
|
|
(17
|
)%
|
|
|
(1
|
)%
|
|
Total
|
|
|
1,173
|
|
|
$
|
404,750
|
|
|
$
|
345
|
|
|
|
985
|
|
|
$
|
330,258
|
|
|
$
|
335
|
|
|
|
19
|
%
|
|
|
23
|
%
|
|
|
3
|
%
|
Controlled Lots
|
As of June 30,
|
|
2024
|
|
|
2023
|
|
|
Period over period change
|
|
| |
|
Owned(1)
|
|
|
Optioned
|
|
|
Total Controlled
|
|
|
Owned(1)
|
|
|
Optioned
|
|
|
Total Controlled
|
|
|
Owned(1)
|
|
|
Optioned
|
|
|
Total Controlled
|
|
|
Alabama
|
|
|
355
|
|
|
|
1,420
|
|
|
|
1,775
|
|
|
|
315
|
|
|
|
1,483
|
|
|
|
1,798
|
|
|
|
13
|
%
|
|
|
(4
|
)%
|
|
|
(1
|
)%
|
|
Atlanta
|
|
|
485
|
|
|
|
7,457
|
|
|
|
7,942
|
|
|
|
338
|
|
|
|
3,384
|
|
|
|
3,722
|
|
|
|
43
|
%
|
|
|
120
|
%
|
|
|
113
|
%
|
|
Charlotte
|
|
|
144
|
|
|
|
2,021
|
|
|
|
2,165
|
|
|
|
81
|
|
|
|
1,127
|
|
|
|
1,208
|
|
|
|
78
|
%
|
|
|
79
|
%
|
|
|
79
|
%
|
|
Houston
|
|
|
384
|
|
|
|
1,390
|
|
|
|
1,774
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
100
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
|
Nashville
|
|
|
93
|
|
|
|
820
|
|
|
|
913
|
|
|
|
207
|
|
|
|
662
|
|
|
|
869
|
|
|
|
(55
|
)%
|
|
|
24
|
%
|
|
|
5
|
%
|
|
Raleigh
|
|
|
214
|
|
|
|
1,059
|
|
|
|
1,273
|
|
|
|
170
|
|
|
|
1,003
|
|
|
|
1,173
|
|
|
|
26
|
%
|
|
|
6
|
%
|
|
|
9
|
%
|
|
Total
|
|
|
1,675
|
|
|
|
14,167
|
|
|
|
15,842
|
|
|
|
1,111
|
|
|
|
7,659
|
|
|
|
8,770
|
|
|
|
51
|
%
|
|
|
85
|
%
|
|
|
81
|
%
|
| (1) |
Includes homes under construction and owned lots.
|
Net Income
| |
|
Three months ended June 30,
|
|
|
Six months ended June 30,
|
|
| |
|
2024
|
|
|
2023
|
|
|
Period over period change
|
|
|
2024
|
|
|
2023
|
|
|
Period over period change
|
|
|
Alabama
|
|
$
|
5,559
|
|
|
$
|
1,435
|
|
|
$
|
4,124
|
|
|
$
|
10,163
|
|
|
$
|
3,676
|
|
|
$
|
6,487
|
|
|
Atlanta
|
|
|
18,012
|
|
|
|
23,379
|
|
|
|
(5,367
|
)
|
|
|
32,583
|
|
|
|
42,928
|
|
|
|
(10,345
|
)
|
|
Charlotte
|
|
|
2,380
|
|
|
|
2,380
|
|
|
|
—
|
|
|
|
4,004
|
|
|
|
4,313
|
|
|
|
(309
|
)
|
|
Houston
|
|
|
3,446
|
|
|
|
—
|
|
|
|
3,446
|
|
|
|
6,812
|
|
|
|
—
|
|
|
|
6,812
|
|
|
Nashville
|
|
|
2,789
|
|
|
|
4,501
|
|
|
|
(1,712
|
)
|
|
|
5,102
|
|
|
|
7,732
|
|
|
|
(2,630
|
)
|
|
Raleigh
|
|
|
5,207
|
|
|
|
5,615
|
|
|
|
(408
|
)
|
|
|
10,017
|
|
|
|
12,846
|
|
|
|
(2,829
|
)
|
|
Segment total
|
|
|
37,393
|
|
|
|
37,310
|
|
|
|
83
|
|
|
|
68,681
|
|
|
|
71,495
|
|
|
|
(2,814
|
)
|
|
Corporate(1)
|
|
|
(12,659
|
)
|
|
|
(6,569
|
)
|
|
|
(6,090
|
)
|
|
|
(23,461
|
)
|
|
|
(11,928
|
)
|
|
|
(11,533
|
)
|
|
Total
|
|
$
|
24,734
|
|
|
$
|
30,741
|
|
|
$
|
(6,007
|
)
|
|
$
|
45,220
|
|
|
$
|
59,567
|
|
|
$
|
(14,347
|
)
|
| (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’ 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)
|
|
June 30,
2024
|
|
|
December 31,
2023
|
|
|
Notes payable
|
|
$
|
3,859
|
|
|
$
|
75,627
|
|
|
Stockholders’/ Members’ equity
|
|
|
344,559
|
|
|
|
208,903
|
|
|
Total capitalization
|
|
$
|
348,418
|
|
|
$
|
284,530
|
|
|
Debt-to-book capitalization
|
|
|
1.1
|
%
|
|
|
26.6
|
%
|
|
Notes payable
|
|
$
|
3,859
|
|
|
$
|
75,627
|
|
|
Less: cash and cash equivalents
|
|
|
17,298
|
|
|
|
19,777
|
|
|
Net debt
|
|
|
(13,439
|
)
|
|
|
55,850
|
|
|
Stockholders’/ Members’ equity
|
|
|
344,559
|
|
|
|
208,903
|
|
|
Total net capitalization
|
|
$
|
331,120
|
|
|
$
|
264,753
|
|
|
Net-debt-to-net book capitalization
|
|
|
(4.1
|
)%
|
|
|
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 June 30,
|
|
|
Six months ended June 30,
|
|
| |
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
|
Net income
|
|
$
|
24,734
|
|
|
$
|
30,741
|
|
|
$
|
45,220
|
|
|
$
|
59,567
|
|
|
Provision for income taxes
|
|
|
1,132
|
|
|
|
—
|
|
|
|
2,053
|
|
|
|
—
|
|
|
Income before income taxes
|
|
|
25,866
|
|
|
|
30,741
|
|
|
|
47,273
|
|
|
|
59,567
|
|
|
Tax-effected adjustments(1)
|
|
|
6,467
|
|
|
|
7,685
|
|
|
|
11,818
|
|
|
|
14,892
|
|
|
Adjusted net income
|
|
$
|
19,399
|
|
|
$
|
23,056
|
|
|
$
|
35,455
|
|
|
$
|
44,675
|
|
| (1) |
For the three months ended June 30, 2024 and 2023, 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).
|