Q2 2024 Smith Douglas Homes Corp Earnings Call Transcript
Key Points
- Smith Douglas Homes Corp (SDHC) reported pre-tax income of $25.9 million, translating to $0.40 per diluted share for the quarter.
- The company closed 653 homes during the quarter, a 17% increase over the second quarter of 2023, generating $220.9 million in home closing revenue.
- Net new home orders for the quarter were 715, representing a 17% year-over-year increase.
- Home closing gross margin came in above guidance at 26.7%, driven by solid demand, stable pricing, and cost containment.
- The company has a strong balance sheet with $17 million in cash and no borrowings under its $250 million revolving credit facility.
- The company experienced some delays with municipalities on permitting and plats, which could impact future projections.
- Demand trends were slightly below typical seasonality in July and August, indicating potential softness in the market.
- The Houston division saw a decrease in orders from 149 in the first quarter to 98 in the second quarter, reflecting potential volatility.
- The company noted an uptick in cancellations in the Houston market during the second quarter.
- Land costs have increased, contributing to margin erosion, with land costs up about 300 basis points as a percentage of revenue compared to last year.
Thank you for standing by. My name is Kayla, and I will be your conference operator today. At this time, I would like to welcome everyone to the Smith Douglas Homes second quarter of 2024 earnings call. (Operator Instructions)
I would now like to turn the call over to Joe Thomas, Senior Vice President of Accounting and Finance. You may begin.
Good morning, and welcome to Smith Douglas' earnings conference call.
We issued a press release this morning outlining results for the second quarter of 2024, which we will discuss on today's call, and can be found on our website at investors.smithdouglas.com, or by selecting the Investor Relations link at the bottom of our homepage. Please note this call will be simultaneously webcast on the Investor Relations section of our website.
Before this call begins, I would like to remind everyone that certain statements made on this call, which are not historical facts, including statements concerning future
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