On August 14, 2024, Smith Douglas Homes Corp (SDHC, Financial) released its 8-K filing detailing the financial performance for the second quarter of 2024. Smith Douglas Homes Corp is engaged in the design, construction, and sale of single-family homes in some of the highest growth and desirable markets in the Southeastern United States. The company operates in five geographical segments: Atlanta, Raleigh, Charlotte, Nashville, and Alabama.
Performance Overview
Smith Douglas Homes Corp (SDHC, Financial) reported a revenue of $220.93 million for Q2 2024, surpassing the analyst estimate of $209.14 million. However, the earnings per share (EPS) came in at $0.41, slightly below the estimated $0.43. The company’s performance is noteworthy given the ongoing affordability challenges faced by homebuyers.
Financial Achievements
Despite the challenges, Smith Douglas Homes Corp (SDHC, Financial) achieved a 17% year-over-year increase in home closings, with a total of 653 closings in Q2 2024 compared to 560 in Q2 2023. The company also reported a gross margin of 26.7%, which is above the industry average. This resulted in a pretax income of $25.9 million.
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.”
Key Financial Metrics
Smith Douglas Homes Corp (SDHC, Financial) ended the quarter with over $17 million in cash, nearly $345 million in stockholder’s equity, and zero borrowings under its credit facility. The net-debt-to-net book capitalization stood at (4.1)%, indicating a strong financial position.
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Revenue | $220.93 million | $181.52 million |
| Gross Profit | $59.06 million | $52.70 million |
| Net Income | $24.73 million | $30.74 million |
| EPS | $0.41 | $0.75 |
Income Statement Highlights
The income statement reveals that the cost of home closings increased to $161.88 million in Q2 2024 from $128.82 million in Q2 2023. Selling, general, and administrative costs also rose to $31.81 million from $21.93 million in the same period last year. The net income attributable to Smith Douglas Homes Corp was $3.65 million for Q2 2024.
Balance Sheet and Cash Flow
As of June 30, 2024, Smith Douglas Homes Corp (SDHC, Financial) reported total assets of $429.25 million, up from $352.69 million as of December 31, 2023. The company’s real estate inventory increased to $266.55 million from $213.10 million. Net cash used in operating activities was $9.23 million for the six months ended June 30, 2024.
Segment Performance
Among the geographical segments, Alabama showed the most significant growth with a 132% increase in home closing revenue. The Atlanta segment, however, experienced a 15% decline in revenue. The company’s new segment in Houston contributed $31.25 million in revenue.
Conclusion
Smith Douglas Homes Corp (SDHC, Financial) has demonstrated resilience and strong operational performance despite market challenges. The company’s ability to exceed revenue expectations while maintaining a robust financial position highlights its strategic execution and market demand. However, the slight miss on EPS indicates areas for potential improvement in cost management and operational efficiency.
Explore the complete 8-K earnings release (here) from Smith Douglas Homes Corp for further details.
