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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)%.”

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.

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.



	Three months ended September 30,				Nine months ended 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


	September 30, 2024		December 31, 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:
Preferred stock, $0.0001 par value – 10,000,000 shares authorized; none issued and outstanding as of September 30, 2024	—		—
Class A common stock, $0.0001 par value – 250,000,000 shares authorized; 8,846,154 shares issued and outstanding as of September 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 September 30, 2024	4		—
Additional paid-in capital	57,010		—
Retained earnings	11,420		—
Total stockholders’ equity attributable to Smith Douglas Homes Corp.	68,435		—
Non-controlling interests attributable to Smith Douglas Holdings LLC	303,925		—
Total stockholders’/members’ equity	372,360		208,903
Total liabilities and stockholders’/members’ equity	$	460,050	$	352,692


Nine months ended September 30,	2024		2023
Net cash provided by operating activities	$	13,655	$	54,958
Net cash used in investing activities	(3,780)		(75,631)
Net cash (used in) provided by financing activities	(5,936)		1,512
Net increase (decrease) in cash and cash equivalents	3,939		(19,161)
Cash and cash equivalents, beginning of period	19,777		29,601
Cash and cash equivalents, end of period	$	23,716	$	10,440


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Home closings	812		583		2,031		1,643
ASP of homes closed	$	342	$	339	$	339	$	333
Net new home orders	600		568		2,080		1,844
Contract value of net new home orders	$	205,164	$	193,435	$	708,446	$	614,683
ASP of net new home orders	$	342	$	341	$	341	$	333
Cancellation rate(2)	11.4%		11.0%		11.3%		9.5%
Backlog homes (period end)(3)	961		1,042		961		1,042
Contract value of backlog homes (period end)	$	332,035	$	350,439	$	332,035	$	350,439
ASP of backlog homes (period end)	$	346	$	336	$	346	$	336
Active communities (period end)(4)	74		62		74		62
Controlled lots (period end):
Homes under construction	1,135		905		1,135		905
Owned lots	611		395		611		395
Optioned lots	16,132		10,279		16,132		10,279
Total controlled lots	17,878		11,579		17,878		11,579


Three months ended September 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	$	37,780	129	$	293	$	33,048	114	$	290	14	%	13	%	1	%
Atlanta	121,334		350	347		80,494		232	347		51	%	51	%	—	%
Charlotte	32,070		82	391		15,155		44	344		112	%	86	%	14	%
Houston	30,830		97	318		10,260		31	331		200	%	213	%	(4	%)
Nashville	20,097		52	386		25,694		70	367		(22)	%	(26)	%	5	%
Raleigh	35,724		102	350		32,987		92	359		8	%	11	%	(3)	%
Total	$	277,835	812	$	342	$	197,638	583	$	339	41	%	39	%	1	%


Nine months ended September 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	$	121,020	406	$	298	$	75,915	261	$	291	59	%	56	%	2	%
Atlanta	264,174		764	346		250,772		769	326		5	%	(1)	%	6	%
Charlotte	60,886		159	383		42,026		117	359		45	%	36	%	7	%
Houston	86,108		266	324		10,260		31	331		739	%	758	%	(2	%)
Nashville	63,834		173	369		77,602		214	363		(18)	%	(19)	%	2	%
Raleigh	91,955		263	350		90,729		251	361		1	%	5	%	(3)	%
Total	$	687,977	2,031	$	339	$	547,304	1,643	$	333	26	%	24	%	2	%


As of September 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	173	$	50,321	$	291	257	$	78,431	$	305	(33)	%	(36)	%	(5	%)
Atlanta	363	126,406		348		359	119,157		332		1	%	6	%	5	%
Charlotte	104	42,454		408		68	26,448		389		53	%	61	%	5	%
Houston	168	55,392		330		101	34,266		339		66	%	62	%	(3	%)
Nashville	36	14,983		416		107	38,881		363		(66)	%	(61)	%	15	%
Raleigh	117	42,479		363		150	53,256		355		(22)	%	(20)	%	2	%
Total	961	$	332,035	$	346	1,042	$	350,439	$	336	(8	%)	(5	%)	3	%


As of September 30,	2024			2023			Period over period change
	Owned(1)	Optioned	Total Controlled	Owned(1)	Optioned	Total Controlled	Owned(1)		Optioned		Total Controlled
Alabama	390	1,388	1,778	329	1,578	1,907	19	%	(12)	%	(7)	%
Atlanta	567	7,950	8,517	318	4,612	4,930	78	%	72	%	73	%
Charlotte	141	2,339	2,480	67	1,101	1,168	110	%	112	%	112	%
Houston	364	1,713	2,077	242	1,157	1,399	50	%	48	%	48	%
Nashville	84	913	997	166	816	982	(49)	%	12	%	2	%
Raleigh	200	1,491	1,691	178	1,015	1,193	12	%	47	%	42	%
Other	—	338	338	—	—	—	100	%	100	%	100	%
Total	1,746	16,132	17,878	1,300	10,279	11,579	34	%	57	%	54	%


	Three months ended September 30,						Nine months ended September 30,
	2024		2023		Period over period change		2024		2023		Period over period change
Alabama	$	4,188	$	3,882	$	306	$	14,351	$	7,558	$	6,793
Atlanta	28,929		21,282		7,647		61,512		64,210		(2,698)
Charlotte	5,120		2,303		2,817		9,124		6,616		2,508
Houston	4,305		869		3,436		11,117		869		10,248
Nashville	2,707		4,787		(2,080)		7,809		12,519		(4,710)
Raleigh	5,770		6,795		(1,025)		15,787		19,641		(3,854)
Segment total	51,019		39,918		11,101		119,700		111,413		8,287
Other(1)	(13,195)		(5,985)		(7,210)		(36,656)		(17,913)		(18,743)
Total	$	37,824	$	33,933	$	3,891	$	83,044	$	93,500	$	(10,456)

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.

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)	September 30, 2024		December 31, 2023
Notes payable	$	3,463	$	75,627
Stockholders’/ Members’ equity	372,360		208,903
Total capitalization	$	375,823	$	284,530
Debt-to-book capitalization	0.9%		26.6%
Notes payable	$	3,463	$	75,627
Less: cash and cash equivalents	23,716		19,777
Net debt	(20,253)		55,850
Stockholders’/ Members’ equity	372,360		208,903
Total net capitalization	$	352,107	$	264,753
Net debt-to-net book capitalization	(5.8)%		21.1%

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 24.5% 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.


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Net income	$	37,824	$	33,933	$	83,044	$	93,500
Provision for income taxes	1,761		—		3,814		—
Income before income taxes	39,585		33,933		86,858		93,500
Tax-effected adjustments(1)	9,710		8,324		21,306		22,936
Adjusted net income	$	29,875	$	25,609	$	65,552	$	70,564

(1)For the three and nine months ended September 30, 2024 and 2023, our tax expenses assumes a 24.5% 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).


	Three months ended September 30, 2024		Period from January 11, 2024 to September 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