Q2 2024 United Homes Group Inc Earnings Call Transcript
Key Points
- United Homes Group Inc (UHG) has a strong pipeline of 9,300 lots, with over 95% controlled via option agreements or land banking arrangements, reducing risk and upfront costs.
- The company delivered 337 homes in Q2 2024, generating $109 million in revenue, with significant contributions from the Midlands, upstate, and coastal operations.
- UHG's coastal operations posted a 59% order growth, and upstate operations generated a 44% order growth year-over-year.
- The company is seeing improvements in construction as building materials and labor availability have improved, with lumber costs trending down, which is expected to benefit margins.
- UHG ended the quarter in a strong financial condition with $80 million in total liquidity, including $25 million in cash and $55 million of availability on its credit facility.
- Net income for Q2 2024 was impacted by a change in fair value related to potential earnout liabilities, which fluctuates based on stock price, affecting financial statements.
- Revenue for Q2 2024 decreased to $109.4 million from $122.1 million in Q2 2023, and home closings also decreased from 385 homes in Q2 2023 to 337 homes in Q2 2024.
- Gross profit margins decreased to 17.9% in Q2 2024 from 19.6% in Q2 2023, primarily due to higher levels of sales incentives and nonrecurring expenses.
- The company continues to face challenges with rising lot costs, which may offset gains from decreasing lumber costs.
- UHG's net new orders were flat year-over-year, with 323 homes in Q2 2024 compared to 341 homes in Q2 2023, indicating a need for strategic adjustments to improve absorption rates.
Thank you for standing by. My name is Mandeep, and I'll be your operator today. At this time, I'd like to welcome everyone to the United Homes Group second-quarter 2024 earnings call and webcast. (Operator Instructions) Thank you.
I would now like to turn the call over to Aaron Erin Reeves McGinnis, General Counsel. You may begin.
Good morning, and welcome to United Homes Group's second-quarter 2024 earnings call. Before the call begins, I would like to note that this call will include forward-looking statements within the meaning of the federal securities laws. United Homes Group cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. These risks and uncertainties include, but are not limited to, the risk factors described by United Homes Group in its filings with the Securities and Exchange Commission.
Accordingly, forward-looking statements should not be relied upon as representing our views
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