Smith Douglas Homes(SDHC) - 2024 Q3 - Quarterly Results

Financial Performance - Home closings increased by 39% to 812 in Q3 2024 compared to Q3 2023[2] - Home closing revenue rose by 41% to $277.8 million in Q3 2024[2] - Gross margin for home closings was 26.5$39.6 million in Q3 2024[2] - Net income attributable to Smith Douglas Homes Corp. was $5.3 million in Q3 2024[6] - Net income for the three months ended September 30, 2024, was$37.824 million, compared to $33.933 million in the same period last year, reflecting a period-over-period increase of$3.891 million[16] - Adjusted net income for the three months ended September 30, 2024, is $29,875,000, compared to$25,609,000 for the same period in 2023, reflecting a year-over-year increase of 8.8%[24] - For the nine months ended September 30, 2024, adjusted net income is $65,552,000, down from$70,564,000 in the same period of 2023, indicating a decrease of 7.1%[24] - The company's income before income taxes for the three months ended September 30, 2024, is $39,585,000, up from$33,933,000 in the prior year[24] Operational Metrics - Active community count grew by 19% to 74 at the end of Q3 2024[2] - Total controlled lots increased by 54% to 17,878 year-over-year[2] - Homes under construction as of September 30, 2024, were 1,135, compared to 905 in the same period last year, indicating increased production capacity[15] - The backlog of homes at the end of September 30, 2024, was 961 homes with a contract value of $332.035 million, down from 1,042 homes valued at$350.439 million in 2023[14] - The cancellation rate for the three months ended September 30, 2024, was 11.4%, slightly up from 11.0% in the previous year[12] - The ASP of backlog homes as of September 30, 2024, was $346,000, compared to$336,000 in the previous year, indicating a 3% increase[14] - The total controlled lots as of September 30, 2024, increased to 17,878, up from 11,579 in the previous year, with optioned lots rising to 16,132 from 10,279[15] - Active communities at the end of September 30, 2024, totaled 74, up from 62 in the previous year, reflecting the company's market expansion efforts[12] Geographic Expansion - The company expanded its geographic presence into Greenville, SC, and continued to build infrastructure in Central Georgia and Chattanooga, TN[2] Debt and Capitalization - Cash position at the end of Q3 2024 was $24 million with zero borrowings under the credit facility[2] - As of September 30, 2024, the company's net debt-to-net book capitalization is (5.8)$75,627,000 to $3,463,000, while stockholders' equity increased from$208,903,000 to $372,360,000[21] - The total capitalization increased from$284,530,000 as of December 31, 2023, to $375,823,000 as of September 30, 2024[21] - The net debt is reported as (20,253,000), indicating a strong cash position compared to total debt[21] Taxation - The provision for income taxes for the three months ended September 30, 2024, is$1,761,000, while there was no provision in the same period of 2023[24] - The company uses a 24.5% federal and state blended tax rate for tax-effected adjustments in calculating adjusted net income[24] - The company emphasizes that adjusted net income is a useful measure for evaluating operating performance and comparability to industry peers[23] Segment Performance - The company reported a significant increase in home closing revenue in the Houston segment, which rose by 739% to $86.108 million from$10.260 million in the previous year[13]