![](/files/S-1A/0001140361-23-052886/ny20009679x9_line04atl.jpg)
Delaware | | | 1531 | | | 93-1969003 |
(State or other jurisdiction of incorporation or organization) | | | (Primary Standard Industrial Classification Code Number) | | | (I.R.S. Employer Identification No.) |
Marc D. Jaffe Senet Bischoff Benjamin J. Cohen Latham & Watkins LLP 1271 Avenue of the Americas New York, New York 10022 Telephone: (212) 906-1200 Fax: (212) 751-4864 | | | Shane Tintle Michael Kaplan Davis Polk & Wardwell LLP 450 Lexington Avenue New York, New York 10017 Telephone: (212) 450-4000 |
Large accelerated filer | | | ☐ | | | Accelerated filer | | | ☐ |
Non-accelerated filer | | | ☒ | | | Smaller reporting company | | | ☐ |
Emerging growth company | | | ☒ | | | | |
| | Per Share | | | Total | |
Initial public offering price | | | $ | | | $ |
Underwriting discount(1) | | | $ | | | $ |
Proceeds, before expenses, to Smith Douglas Homes Corp. | | | $ | | | $ |
(1) | We have agreed to reimburse the underwriters for certain expenses in connection with this offering. See “Underwriting (conflicts of interest).” |
J.P. Morgan | | | BofA Securities | | | RBC Capital Markets | | | Wells Fargo Securities |
Wolfe | Nomura Alliance |
Wedbush Securities | | | Fifth Third Securities | | | Regions Securities LLC | | | Whelan Advisory Capital Markets |
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(1) | Based on Builder Magazine’s Top 100 list; achievements correspond to the year the ranking was based on. |
(2) | Purchase price of |
(1) | Includes Founder Fund and GSB Holdings. |
| | Smith Douglas Homes Corp. Pro Forma(1) | | Historical Smith Douglas Holdings LLC | | | Smith Douglas Homes Corp. Pro Forma(1) | | Historical Smith Douglas Holdings LLC | |||||||||||||||||||||||||||
| | Six months ended June 30, | | Year ended December 31, | | Six months ended June 30, | | Year ended December 31, | | | Nine months ended September 30, | | Year ended December 31, | | Nine months ended September 30, | | Year ended December 31, | |||||||||||||||||||
| | 2023 | | 2022 | | 2023 | | 2022 | | 2022 | | 2021 | | | 2023 | | 2022 | | 2023 | | 2022 | | 2022 | | 2021 | |||||||||||
| (In thousands) | | (Unaudited, in thousands) | | (In thousands) | | (In thousands) | | (Unaudited, in thousands) | | (In thousands) | |||||||||||||||||||||||||
Summary statement of income data: | | | | | | | | | | | | | ||||||||||||||||||||||||
Home closing revenue | | $ | | $ | | $349,666 | | $325,487 | | $755,353 | | $518,863 | | $ | | $ | | $547,304 | | $531,944 | | $755,353 | | $518,863 | ||||||||||||
Cost of home closings | | | | | 248,435 | | 230,046 | | 532,599 | | 395,917 | | | | | 388,983 | | 377,341 | | 532,599 | | 395,917 | ||||||||||||||
Home closing gross profit | | | | 101,231 | | 95,441 | | 222,754 | | 122,946 | | | | 158,321 | | 154,603 | | 222,754 | | 122,946 | ||||||||||||||||
Selling, general, and administrative costs | | | | 41,868 | | 35,136 | | 83,269 | | 64,231 | | | | 64,901 | | 56,080 | | 83,269 | | 64,231 | ||||||||||||||||
Equity in income from unconsolidated entities | | | | (436) | | (460) | | (1,120) | | (595) | | | | (658) | | (789) | | (1,120) | | (595) | ||||||||||||||||
Interest expense | | | | 400 | | 353 | | 734 | | 1,733 | | | | 795 | | 528 | | 734 | | 1,733 | ||||||||||||||||
Other (income) loss, net | | | | (168) | | (246) | | (573) | | 188 | | | | (217) | | (352) | | (573) | | 188 | ||||||||||||||||
Forgiveness of Paycheck Protection Program Loan | | | | | — | | — | | — | | (5,141) | | | | | — | | — | | — | | (5,141) | ||||||||||||||
Income before income taxes | | | | $59,567 | | $60,658 | | $140,444 | | $62,530 | | | | $93,500 | | $99,136 | | $140,444 | | $62,530 | ||||||||||||||||
Provision for income taxes | | | | | — | | — | | — | | — | | | | | — | | — | | — | | — | ||||||||||||||
Net income | | | | 59,567 | | 60,658 | | 140,444 | | 62,530 | | | | 93,500 | | 99,136 | | 140,444 | | 62,530 | ||||||||||||||||
Net income attributable to noncontrolling interests | | | | | | | | | | | | | | | ||||||||||||||||||||||
Net income attributable to Smith Douglas Homes Corp. | | | $ | | $ | | $ | | $ | | $ | | $ | | | $ | | $ | | $ | | $ | | $ | | $ | ||||||||||
Pro forma per share data: | | | | | | | | | | | | | ||||||||||||||||||||||||
Pro forma net income per share: | | | | | | | | | | | | | ||||||||||||||||||||||||
Basic and diluted | | $ | | $ | | | | | | $ | | $ | | | | | ||||||||||||||||||||
Pro forma weighted-average shares used to compute pro forma net income per share: | | | | | | | | | | | | | ||||||||||||||||||||||||
Basic and diluted | | | | | | | | | | | | |
| | Smith Douglas Homes Corp. Pro Forma(1) | | | Historical Smith Douglas Holdings LLC | |||||||
| | As of June 30, | | | As of June 30, | | | As of December 31, | ||||
| | 2023 | | | 2023 | | | 2022 | | | 2021 | |
| | (In thousands) | | | (Unaudited, in thousands) | | | (In thousands) | ||||
Summary balance sheet data: | | | | | | | | | ||||
Cash and cash equivalents | | | $ | | | $11,392 | | | $29,601 | | | $25,340 |
Total assets | | | | | 225,563 | | | 223,372 | | | 201,188 | |
Revolving line of credit | | | | | 10,000 | | | 15,000 | | | 72,000 | |
Total liabilities | | | | | 49,657 | | | 58,861 | | | 105,672 | |
Members’ equity | | | $ | | | $175,906 | | | $164,511 | | | $95,516 |
Equity attributable to Smith Douglas Homes Corp. | | | | | | | | | ||||
Noncontrolling interests | | | | | | | | | ||||
Total stockholders’/members’ equity | | | | | 175,906 | | | 164,511 | | | 95,516 | |
Total liabilities and stockholders’/members’ equity | | | | | $225,563 | | | $223,372 | | | $201,188 |
| | Smith Douglas Homes Corp. Pro Forma(1) | | | Historical Smith Douglas Holdings LLC | |||||||||||||
| | Six months ended June 30, | | | Year ended December 31, | | | Six months ended June 30, | | | Year ended December 31, | |||||||
| | 2023 | | | 2022 | | | 2023 | | | 2022 | | | 2022 | | | 2021 | |
| | (In thousands) | | | (Unaudited, in thousands) | | | (In thousands) | ||||||||||
Summary statements of cash flows data: | | | | | | | | | | | | | ||||||
Net cash provided by operating activities | | | | | | | $35,902 | | | $28,995 | | | $132,095 | | | $30,870 | ||
Net cash (used in) provided by investing activities | | | | | | | (180) | | | 572 | | | 361 | | | 847 | ||
Net cash used in financing activities | | | | | | | (53,931) | | | (29,982) | | | (128,195) | | | (38,541) | ||
Net increase (decrease) in cash and cash equivalents | | | | | | | (18,209) | | | (415) | | | 4,261 | | | (6,824) | ||
Other financial data(2): | | | | | | | | | | | | | ||||||
Home closing gross profit(3) | | | | | | | $101,231 | | | $95,441 | | | $222,754 | | | $122,946 | ||
Adj. home closing gross profit(5) | | | | | | | $102,186 | | | $96,560 | | | $225,511 | | | $124,981 | ||
Home closing gross margin(4) | | | | | | | 29.0% | | | 29.3% | | | 29.5% | | | 23.7% | ||
Adj. home closing gross margin(4) | | | | | | | 29.2% | | | 29.7% | | | 29.9% | | | 24.1% | ||
Adj. net income(5) | | | | | | | $44,675 | | | $45,494 | | | $105,333 | | | $46,898 | ||
EBITDA(5) | | | | | | | $61,344 | | | $62,570 | | | $144,707 | | | $67,284 | ||
Net income margin | | | | | | | 17.0% | | | 18.6% | | | 18.6% | | | 12.1% | ||
EBITDA margin(4)(5) | | | | | | | 17.5% | | | 19.2% | | | 19.2% | | | 13.0% | ||
Other operating data(2): | | | | | | | | | | | | | ||||||
Home closings | | | | | | | 1,060 | | | 978 | | | 2,200 | | | 1,848 | ||
ASP of homes closed | | | | | | | $330 | | | $333 | | | $343 | | | $281 | ||
Net new home orders | | | | | | | 1,276 | | | 1,048 | | | 1,928 | | | 1,920 | ||
Contract value of net new home orders | | | | | | | $421,248 | | | $374,892 | | | $667,530 | | | $597,761 | ||
ASP of net new home orders | | | | | | | $330 | | | $358 | | | $346 | | | $311 | ||
Cancellation rate(6) | | | | | | | 8.8% | | | 7.3% | | | 10.9% | | | 6.7% | ||
Backlog homes (period end)(7) | | | | | | | 985 | | | 1,113 | | | 771 | | | 1,043 | ||
Contract value of backlog homes (period end) | | | | | | | $330,258 | | | $397,125 | | | $258,718 | | | $345,521 | ||
ASP of backlog homes (period end) | | | | | | | $335 | | | $357 | | | $336 | | | $331 | ||
Active communities (period end)(8) | | | | | | | 44 | | | 50 | | | 53 | | | 52 | ||
Controlled lots (period end): | | | | | | | | | | | | | ||||||
Homes under construction | | | | | | | 706 | | | 898 | | | 623 | | | 711 | ||
Owned lots | | | | | | | 405 | | | 292 | | | 342 | | | 319 | ||
Optioned lots | | | | | | | 7,659 | | | 10,106 | | | 7,848 | | | 9,840 | ||
Total controlled lots | | | | | | | 8,770 | | | 11,296 | | | 8,813 | | | 10,870 |
| | Smith Douglas Homes Corp. Pro Forma(1) | | | Historical Smith Douglas Holdings LLC | |||||||
| | As of September 30, | | | As of September 30, | | | As of December 31, | ||||
| | 2023 | | | 2023 | | | 2022 | | | 2021 | |
| | (In thousands) | | | (Unaudited, in thousands) | | | (In thousands) | ||||
Summary balance sheet data: | | | | | | | | | ||||
Cash and cash equivalents | | | $ | | | $10,440 | | | $29,601 | | | $25,340 |
Total assets | | | | | 329,476 | | | 223,372 | | | 201,188 | |
Notes payable | | | | | 76,000 | | | 15,000 | | | 72,000 | |
Total liabilities | | | | | 141,692 | | | 58,861 | | | 105,672 | |
Members’ equity | | | | | 187,784 | | | 164,511 | | | 95,516 | |
Equity attributable to Smith Douglas Homes Corp. | | | | | | | | | ||||
Noncontrolling interests | | | | | | | | | ||||
Total stockholders’/members’ equity | | | | | 187,784 | | | 164,511 | | | 95,516 | |
Total liabilities and stockholders’/members’ equity | | | | | $329,476 | | | $223,372 | | | $201,188 |
| | Smith Douglas Homes Corp. Pro Forma(1) | | | Historical Smith Douglas Holdings LLC | |||||||||||||
| | Nine months ended September 30, | | | Year ended December 31, | | | Nine months ended September 30, | | | Year ended December 31, | |||||||
| | 2023 | | | 2022 | | | 2023 | | | 2022 | | | 2022 | | | 2021 | |
| | (In thousands) | | | (Unaudited, in thousands) | | | (In thousands) | ||||||||||
Summary statements of cash flows data: | | | | | | | | | | | | | ||||||
Net cash provided by operating activities | | | | | | | $54,958 | | | $58,105 | | | $132,095 | | | $30,870 | ||
Net cash (used in) provided by investing activities | | | | | | | (75,631) | | | 798 | | | 361 | | | 847 | ||
Net cash provided by (used in) financing activities | | | | | | | 1,512 | | | (67,124) | | | (128,195) | | | (38,541) | ||
Net (decrease) increase in cash and cash equivalents | | | | | | | (19,161) | | | (8,221) | | | 4,261 | | | (6,824) | ||
Other financial data(2): | | | | | | | | | | | | | ||||||
Home closing gross profit(3) | | | | | | | $158,321 | | | $154,603 | | | $222,754 | | | $122,946 | ||
Adj. home closing gross profit(5) | | | | | | | $159,823 | | | $156,444 | | | $225,511 | | | $124,981 | ||
Home closing gross margin(4) | | | | | | | 28.9% | | | 29.1% | | | 29.5% | | | 23.7% | ||
Adj. home closing gross margin(4) | | | | | | | 29.2% | | | 29.4% | | | 29.9% | | | 24.1% | ||
Adj. net income(5) | | | | | | | $70,125 | | | $74,352 | | | $105,333 | | | $46,898 | ||
EBITDA(5) | | | | | | | $96,479 | | | $102,155 | | | $144,707 | | | $67,284 | ||
Net income margin | | | | | | | 17.1% | | | 18.6% | | | 18.6% | | | 12.1% | ||
EBITDA margin(4)(5) | | | | | | | 17.6% | | | 19.2% | | | 19.2% | | | 13.0% | ||
Other operating data(2): | | | | | | | | | | | | | ||||||
Home closings | | | | | | | 1,643 | | | 1,575 | | | 2,200 | | | 1,848 | ||
ASP of homes closed | | | | | | | $333 | | | $338 | | | $343 | | | $281 | ||
Net new home orders | | | | | | | 1,844 | | | 1,504 | | | 1,928 | | | 1,920 | ||
Contract value of net new home orders | | | | | | | $614,683 | | | $535,455 | | | $667,530 | | | $597,761 | ||
ASP of net new home orders | | | | | | | $333 | | | $356 | | | $346 | | | $311 | ||
Cancellation rate(6) | | | | | | | 9.5% | | | 9.0% | | | 10.9% | | | 6.7% | ||
Backlog homes (period end)(7) | | | | | | | 1,042 | | | 972 | | | 771 | | | 1,043 | ||
Contract value of backlog homes (period end) | | | | | | | $350,439 | | | $349,542 | | | $258,718 | | | $345,521 | ||
ASP of backlog homes (period end) | | | | | | | $336 | | | $360 | | | $336 | | | $331 | ||
Active communities (period end)(8) | | | | | | | 62 | | | 55 | | | 53 | | | 52 | ||
Controlled lots (period end): | | | | | | | | | | | | | ||||||
Homes under construction | | | | | | | 905 | | | 792 | | | 623 | | | 711 | ||
Owned lots | | | | | | | 395 | | | 384 | | | 342 | | | 319 | ||
Optioned lots | | | | | | | 10,279 | | | 9,390 | | | 7,848 | | | 9,840 | ||
Total controlled lots | | | | | | | 11,579 | | | 10,566 | | | 8,813 | | | 10,870 |
(1) | Pro forma for the Transactions, including the Refinancing and the Devon Street Homes Acquisition. See “Unaudited pro forma condensed consolidated financial information.” |
(2) | For definitions and further information about how we calculate financial and operating data, including a reconciliation of adjusted home closing gross profit, adjusted net income, EBITDA, adjusted home closing gross margin, and EBITDA margin, please see “Management’s discussion and analysis of financial condition and results of operations—Reorganization transactions—Non-GAAP financial measures.” |
(3) | Home closing gross profit is home closing revenue less cost of home closings. |
(4) | Calculated as a percentage of home closing revenue. |
(5) | Adjusted home closing gross profit, adjusted home closing gross margin, adjusted net income, EBITDA, and EBITDA margin are included in this prospectus because they are non-GAAP financial measures used by management and our board of directors to assess our financial performance. For definitions of adjusted homes closing gross profit, adjusted home closing gross margin, adjusted net income, EBITDA, and EBITDA margin and reconciliations to our most directly comparable financial measures calculated and presented in accordance with GAAP, see “Management’s discussion and analysis of financial condition and results of operations—Reorganization transactions—Non-GAAP financial measures.” Our non-GAAP financial measures should not be considered in isolation from, or as substitutes for, financial information prepared in accordance with GAAP. Adjusted homes closing gross profit, adjusted home closing gross margin, adjusted net income, EBITDA, and EBITDA margin may be different than a similarly titled measure used by other companies. |
(6) | The cancellation rate is the total number of cancellations during the period divided by the total gross new home orders during the period. |
(7) | Backlog homes (period end) is the number of homes in backlog from the previous period plus the number of net new home orders generated during the current period minus the number of homes closed during the current period. |
(8) | A community becomes active once the model is completed or the community has its first sale. A community becomes inactive when it has fewer than two units remaining to sell. |
(1) | Includes Founder Fund and GSB Holdings. |
As of (in thousands, except per share and share amounts) | | | Smith Douglas Holdings LLC Historical | | | Smith Douglas Homes | Pro Forma | ||
Cash and cash equivalents | | | $ | | | $ | |||
Debt(2) | | | $76,000 | | | $ | |||
Total members’ equity | | | 187,784 | | | ||||
Stockholders’ equity | | | — | | | ||||
Class A common stock, par value $ per share; no shares authorized, issued and outstanding, actual; shares authorized, shares issued and outstanding, Smith Douglas Homes Corp. pro forma | | | — | | | ||||
Class B common stock, par value $ per share; no shares authorized, issued and outstanding, actual; shares authorized, shares issued and outstanding, Smith Douglas Homes Corp. pro forma | | | — | | | ||||
Additional paid-in-capital | | | — | | | ||||
Retained earnings | | | — | | | ||||
Equity attributable to Smith Douglas Homes Corp. | | | — | | | ||||
Non-controlling interest attributable to Smith Douglas LLC | | | — | | | ||||
Total stockholders’ and members’ equity | | | 187,784 | | | ||||
Total capitalization | | | $ | | | $ |
(1) | A $1.00 increase (decrease) in the assumed initial public offering price of $ per share, which is the midpoint of the price range listed on the cover page of this prospectus, would increase (decrease) the pro forma amount of each of cash and cash equivalents, additional paid-in capital, total stockholders’ equity, and total capitalization by approximately $ million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions. |
(2) | As of |
Assumed initial public offering price per share | | | | | $ | |
Pro forma net tangible book value as of | | | $ | | | |
Increase per share attributable to new investors in this offering | | | $ | | | |
Pro forma net tangible book value per share after this offering | | | | |||
Dilution per share to new Class A common stock investors in this offering | | | | | $ |
(in thousands) | | | Shares Purchased | | | Total Consideration | | | Average Price Per Share | ||||||
| Number | | | Percent | | | Amount | | | Percent | | ||||
Continuing Equity Owners | | | | | | | $ | | | | | $ | |||
New public investors | | | | | | | | | | | $ | ||||
Total | | | | | 100% | | | $ | | | | | $ |
| | Smith Douglas Holdings LLC historical | | | Devon Street Homes, L.P. historical | | | Transaction accounting adjustments (Acquisition of Devon Street Homes) | | | Notes | | | Smith Douglas Holdings LLC Pro forma for Devon Street Homes | | | Reorganization and offering adjustments | | | Notes | | | Smith Douglas Homes Corp. pro forma | |
Assets: | | | | | | | | | | | | | | | | | ||||||||
Cash and cash equivalents | | | $11,392 | | | $16,172 | | | $ | | | (a) | | | $ | | | $ | | | (d) | | | $ |
| | | | | | | | (b) | | | | | | | (e) | | | |||||||
| | | | | | | | | | | | | | (g) | | | ||||||||
| | | | | | | | | | | | | | (i) | | | ||||||||
| | | | | | | | | | | | | | (j) | | | ||||||||
| | | | | | | | | | | | | | (k) | | | ||||||||
Real estate inventory | | | 164,084 | | | 60,391 | | | | | (b) | | | | | | | | | |||||
Deposits on real estate under option or contract | | | 35,742 | | | — | | | | | | | | | | | | | ||||||
Real estate not owned | | | 1,737 | | | — | | | | | | | | | | | | | ||||||
Investments in unconsolidated entities | | | 136 | | | — | | | | | | | | | | | | | ||||||
Property and equipment, net | | | 1,264 | | | 310 | | | | | | | | | | | | | ||||||
Other assets | | | 11,208 | | | 103 | | | | | | | | | | | (f) | | | |||||
Deferred tax asset | | | — | | | — | | | | | | | | | | | (l) | | | |||||
| | | | | | | | | | | | | | (l) | | | ||||||||
Goodwill | | | — | | | — | | | | | (b) | | | | | | | | | |||||
Total assets | | | $225,563 | | | $76,976 | | | $ | | | | | $ | | | $ | | | | | $ | ||
Liabilities and members’ equity: | | | | | | | | | | | | | | | | | ||||||||
Liabilities: | | | | | | | | | | | | | | | | | ||||||||
Accounts payable | | | $10,688 | | | $2,541 | | | $ | | | | | $ | | | $ | | | | | $ | ||
Customer deposits | | | 9,461 | | | 174 | | | | | | | | | | | | | ||||||
Revolving line of credit | | | 10,000 | | | — | | | | | (a) | | | | | | | (i) | | | ||||
Construction loans | | | — | | | 271 | | | | | (b) | | | | | | | | | |||||
Lot loans | | | — | | | 20,540 | | | | | (b) | | | | | | | | | |||||
Promissory note payable | | | — | | | — | | | | | (b) | | | | | | | | | |||||
Contingent consideration | | | — | | | — | | | | | (b) | | | | | | | | | |||||
Liabilities related to real estate not owned | | | 1,737 | | | — | | | | | | | | | | | | | ||||||
Accrued expenses and other liabilities | | | 17,771 | | | 188 | | | | | (c) | | | | | | | (j) | | | ||||
| | | | | | | | | | | | | | (f) | | | ||||||||
TRA liability | | | — | | | — | | | | | | | | | | | (l) | | | |||||
Total liabilities | | | 49,657 | | | 23,714 | | | | | | | | | | | (d) | | | |||||
Members’ equity: | | | | | | | | | | | | | | | | | ||||||||
Class A Units | | | 173,306 | | | — | | | | | (c) | | | | | | | (g) | | | ||||
Class C Units | | | 2,000 | | | — | | | | | | | | | | | (k) | | | |||||
Class D Units | | | 600 | | | — | | | | | | | | | | | (k) | | | |||||
Partners’ equity | | | — | | | 53,262 | | | | | (b) | | | | | | | | | |||||
Stockholders’ equity: | | | | | | | | | | | | | | | | | ||||||||
Class A common stock | | | | | | | | | | | | | | | (e) | | | |||||||
Class B common stock | | | | | | | | | | | | | | | (d) | | | |||||||
Additional paid-in-capital | | | | | | | | | | | | | | | (d) | | | |||||||
| | | | | | | | | | | | | | (e) | | | ||||||||
| | | | | | | | | | | | | | (f) | | | ||||||||
| | | | | | | | | | | | | | (l) | | | ||||||||
| | | | | | | | | | | | | | (h) | | | ||||||||
Total stockholders’ equity attributable to Smith Douglas Homes Corp. | | | | | | | | | | | | | | | | | ||||||||
Non-controlling interest attributable to Smith Douglas Holdings LLC | | | | | | | | | | | | | | | (h) | | | |||||||
Total members’/partners’/ stockholders’ equity | | | 175,906 | | | 53,262 | | | | | | | | | | | | | ||||||
Total liabilities and equity | | | $225,563 | | | $76,976 | | | $ | | | | | $ | | | $ | | | | | $ |
| | Smith Douglas Holdings LLC historical | | | Devon Street Homes, L.P. historical | | | Transaction accounting adjustments (Acquisition of Devon Street Homes) | | | Notes | | | Smith Douglas Holdings LLC Pro forma for Devon Street Homes | | | Reorganization and offering adjustments | | | Notes | | | Smith Douglas Homes Corp. pro forma | |
Home closing revenue | | | $ 349,666 | | | $ 41,060 | | | $ | | | | | $ | | | $ | | | | | $ | ||
Cost of home closings | | | 248,435 | | | 32,151 | | | | | (aa) | | | | | | | | | |||||
Home closing gross profit | | | 101,231 | | | 8,909 | | | | | | | | | | | | | ||||||
Selling, general, and administrative costs | | | 41,868 | | | $3,419 | | | | | (cc) | | | | | | | (ff) | | | ||||
Equity in income from unconsolidated entities | | | (436) | | | — | | | | | | | | | | | | | ||||||
Interest expense | | | 400 | | | 580 | | | | | (dd) | | | | | | | (gg) | | | ||||
Other income, net | | | (168) | | | (125) | | | | | (ee) | | | | | | | | | |||||
Income before income taxes | | | 59,567 | | | $5,035 | | | | | | | | | | | | | ||||||
Provisions for income taxes | | | | | $49 | | | | | | | | | | | (hh) | | | ||||||
Net income | | | $59,567 | | | $4,986 | | | $ | | | | | $ | | | $ | | | | | $ | ||
Net income attributable to non-controlling interest | | | | | | | | | | | | | | | (ii) | | | |||||||
Net income attributable to Smith Douglas Homes Corp. | | | $ | | | $ | | | $ | | | | | $ | | | $ | | | | | $ | ||
Pro forma per share data: | | | | | | | | | | | | | | | | | ||||||||
Pro forma net income per share | | | | | | | | | | | | | | | | | ||||||||
Basic and diluted | | | | | | | | | | | | | | | (jj) | | | $ | ||||||
Pro forma weighted average shares used to compute pro forma net income per share | | | | | | | | | | | | | | | | | ||||||||
Basic and diluted | | | | | | | | | | | | | | | (jj) | | | $ |
| | Smith Douglas Holdings LLC historical | | | Devon Street Homes, L.P. historical | | | Transaction accounting adjustments (Acquisition of Devon Street Homes) | | | Notes | | | Smith Douglas Holdings LLC Pro forma for Devon Street Homes | | | Reorganization and offering adjustments | | | Notes | | | Smith Douglas Homes Corp. pro forma | |
Home closing revenue | | | $755,353 | | | $107,888 | | | $ | | | | | $ | | | $ | | | | | $ | ||
Cost of home closings | | | 532,599 | | | 80,390 | | | | | (aa) | | | | | | | | | |||||
Home closing gross profit | | | 222,754 | | | 27,498 | | | | | | | | | | | | | ||||||
Selling, general, and administrative costs | | | 83,269 | | | $7,640 | | | | | (bb) | | | | | | | (ff) | | | ||||
| | | | | | | | (cc) | | | | | | | | | ||||||||
Equity in income from unconsolidated entities | | | (1,120) | | | — | | | | | | | | | | | | | ||||||
Interest expense | | | 734 | | | 460 | | | | | (dd) | | | | | | | (gg) | | | ||||
Other income, net | | | (573) | | | (117) | | | | | (ee) | | | | | | | | | |||||
Income before income taxes | | | 140,444 | | | $19,515 | | | | | | | | | | | | | ||||||
Provisions for income taxes | | | | | $193 | | | | | | | | | | | (hh) | | | ||||||
Net income | | | $140,444 | | | $19,322 | | | $ | | | | | $ | | | $ | | | | | $ | ||
Net income attributable to non-controlling interest | | | | | | | | | | | | | | | (ii) | | | |||||||
Net income attributable to Smith Douglas Homes Corp. | | | $ | | | $ | | | $ | | | | | $ | | | $ | | | | | $ | ||
Pro forma per share data: | | | | | | | | | | | | | | | | | ||||||||
Pro forma net income per share | | | | | | | | | | | | | | | | | ||||||||
Basic and diluted | | | | | | | | | | | | | | | (jj) | | | $ | ||||||
Pro forma weighted average shares used to compute pro forma net income per share | | | | | | | | | | | | | | | | | ||||||||
Basic and diluted | | | | | | | | | | | | | | | (jj) | | | $ |
| | Smith Douglas Holdings LLC historical | | | Reorganization and offering adjustments | | | Notes | | | Smith Douglas Homes Corp. pro forma | |
Assets: | | | | | | | | | ||||
Cash and cash equivalents | | | $10,440 | | | $ | | | (a) | | | $ |
| | | | | | (b) | | | ||||
| | | | | | (d) | | | ||||
| | | | | | (f) | | | ||||
| | | | | | (g) | | | ||||
| | | | | | (h) | | | ||||
Real estate inventory | | | 220,734 | | | | | | | |||
Deposits on real estate under option or contract | | | 46,713 | | | | | | | |||
Real estate not owned | | | 18,333 | | | | | | | |||
Property and equipment, net | | | 1,656 | | | | | | | |||
Other assets | | | 15,135 | | | | | (c) | | | ||
Deferred tax asset | | | — | | | | | (i) | | | ||
| | | | | | (i) | | | ||||
Goodwill | | | 16,465 | | | | | | | |||
Total assets | | | $329,476 | | | $ | | | | | $ | |
Liabilities and members’ equity: | | | | | | | | | ||||
Liabilities: | | | | | | | | | ||||
Accounts payable | | | $16,428 | | | $ | | | | | $ | |
Customer deposits | | | 9,543 | | | | | | | |||
Notes payable | | | 76,000 | | | | | (f) | | | ||
Liabilities related to real estate not owned | | | 18,333 | | | | | | | |||
Accrued expenses and other liabilities | | | 21,388 | | | | | (g) | | | ||
| | | | | | (c) | | | ||||
TRA liability | | | — | | | | | (i) | | | ||
Total liabilities | | | 141,692 | | | | | | | |||
Members’ equity: | | | | | | | | | ||||
Class A Units | | | 185,184 | | | | | (a), (d) | | | ||
Class C Units | | | 2,000 | | | | | (h) | | | ||
Class D Units | | | 600 | | | | | (h) | | | ||
Stockholders’ equity: | | | | | | | | | ||||
Class A common stock | | | | | | | (b) | | | |||
Class B common stock | | | | | | | (a) | | | |||
Additional paid-in-capital | | | | | | | (a) | | | |||
| | | | | | (b) | | | ||||
| | | | | | (c) | | | ||||
| | | | | | (i) | | | ||||
| | | | | | (e) | | | ||||
Total stockholders’ equity attributable to Smith Douglas Homes Corp. | | | | | | | | | ||||
Non-controlling interest attributable to Smith Douglas Holdings LLC | | | | | | | (e) | | | |||
Total members’/partners’/ stockholders’ equity | | | 187,784 | | | | | | | |||
Total liabilities and equity | | | $329,476 | | | $ | | | | | $ |
| | Smith Douglas Holdings LLC historical | | | Devon Street Homes, L.P. historical for the seven months ended July 31, 2023 | | | Transaction accounting adjustments (Acquisition of Devon Street Homes) | | | Notes | | | Smith Douglas Holdings LLC Pro forma for Devon Street Homes | | | Reorganization and offering adjustments | | | Notes | | | Smith Douglas Homes Corp. pro forma | |
Home closing revenue | | | $547,304 | | | $47,287 | | | $ | | | | | $594,591 | | | $ | | | | | $ | ||
Cost of home closings | | | 388,983 | | | 36,799 | | | 354 | | | (aa) | | | 426,136 | | | | | | | |||
Home closing gross profit | | | 158,321 | | | 10,488 | | | (354) | | | | | 168,455 | | | | | | | ||||
Selling, general, and administrative costs | | | 64,901 | | | 4,183 | | | 1,547 | | | (bb) | | | 70,631 | | | | | (ee) | | | ||
Equity in income from unconsolidated entities | | | (658) | | | — | | | | | | | (658) | | | | | | | |||||
Interest expense | | | 795 | | | 726 | | | 3,902 | | | (cc) | | | 5,423 | | | | | (ff) | | | ||
Other income, net | | | (217) | | | (133) | | | 137 | | | (dd) | | | (213) | | | | | | | |||
Income before income taxes | | | 93,500 | | | $5,712 | | | (5,940) | | | | | 93,272 | | | | | | | ||||
Provisions for income taxes | | | — | | | 59 | | | | | | | 59 | | | | | (gg) | | | ||||
Net income | | | $93,500 | | | $5,653 | | | $(5,940) | | | | | $93,213 | | | $ | | | | | $ | ||
Net income attributable to non-controlling interest | | | | | | | | | | | | | | | (hh) | | | |||||||
Net income attributable to Smith Douglas Homes Corp. | | | $ | | | $ | | | $ | | | | | $ | | | $ | | | | | $ | ||
Pro forma per share data: | | | | | | | | | | | | | | | | | ||||||||
Pro forma net income per share | | | | | | | | | | | | | | | | | ||||||||
Basic and diluted | | | | | | | | | | | | | | | (ii) | | | $ | ||||||
Pro forma weighted average shares used to compute pro forma net income per share | | | | | | | | | | | | | | | | | ||||||||
Basic and diluted | | | | | | | | | | | | | | | (ii) | | | $ |
| | Smith Douglas Holdings LLC historical | | | Devon Street Homes, L.P. historical | | | Transaction accounting adjustments (Acquisition of Devon Street Homes) | | | Notes | | | Smith Douglas Holdings LLC Pro forma for Devon Street Homes | | | Reorganization and offering adjustments | | | Notes | | | Smith Douglas Homes Corp. pro forma | |
Home closing revenue | | | $755,353 | | | $107,888 | | | $ | | | | | $863,241 | | | $ | | | | | $ | ||
Cost of home closings | | | 532,599 | | | 80,390 | | | 4,252 | | | (aa) | | | 617,241 | | | | | | | |||
Home closing gross profit | | | 222,754 | | | 27,498 | | | (4,252) | | | | | 246,000 | | | | | | | ||||
Selling, general, and administrative costs | | | 83,269 | | | 7,640 | | | 2,063 | | | (bb) | | | 92,972 | | | | | (ee) | | | ||
Equity in income from unconsolidated entities | | | (1,120) | | | — | | | | | | | (1,120) | | | | | | | |||||
Interest expense | | | 734 | | | 460 | | | 5,687 | | | (cc) | | | 6,881 | | | | | (ff) | | | ||
Other income, net | | | (573) | | | (117) | | | 217 | | | (dd) | | | (473) | | | | | | | |||
Income before income taxes | | | 140,444 | | | 19,515 | | | (12,219) | | | | | 147,740 | | | | | | | ||||
Provisions for income taxes | | | — | | | 193 | | | | | | | 193 | | | | | (gg) | | | ||||
Net income | | | $140,444 | | | $19,322 | | | $(12,219) | | | | | $147,547 | | | $ | | | | | $ | ||
Net income attributable to non-controlling interest | | | | | | | | | | | | | | | (hh) | | | |||||||
Net income attributable to Smith Douglas Homes Corp. | | | $ | | | $ | | | $ | | | | | $ | | | $ | | | | | $ | ||
Pro forma per share data: | | | | | | | | | | | | | | | | | ||||||||
Pro forma net income per share | | | | | | | | | | | | | | | | | ||||||||
Basic and diluted | | | | | | | | | | | | | | | (ii) | | | $ | ||||||
Pro forma weighted average shares used to compute pro forma net income per share | | | | | | | | | | | | | | | | | ||||||||
Basic and diluted | | | | | | | | | | | | | | | (ii) | | | $ |
Cash consideration(1) | | | $74,868 |
Promissory note payable | | | 5,000 |
Contingent consideration(2) | | | 3,000 |
Total estimated consideration to be paid | | | $82,868 |
(1) | The cash consideration is funded by $2.9 million of cash on hand and $72.0 million of draws on our Existing Credit Facility. |
(2) | The contingent consideration represents management’s preliminary estimate of the fair value of the future payment to be made to the former owner of Devon Street Homes under the terms of the Gross Margin Earnout feature included in the executed APA for the Devon Street Homes Acquisition. Per the terms of the Gross Margin Earnout feature, the seller is entitled to receive a one time payment in the first quarter of 2025 based on the newly established Houston division’s gross margin (as defined) for the year ending December 31, 2024. The payout will be determined in accordance with the Gross Margin Calculation Payout Grid and ranges from a minimum of zero to a maximum of $5.0 million. |
Real estate inventory | | | $60,216 |
Deposits on real estate under option or contract | | | 7,193 |
Property and equipment, net | | | 69 |
Goodwill | | | 16,465 |
Other assets | | | 324 |
Accounts payable | | | (857) |
Customer deposits | | | (181) |
Accrued expenses and other liabilities | | | (361) |
Fair value of consideration transferred | | | $82,868 |
(a) | Reflects the net effect on cash and cash equivalents and stockholders’ equity of the issuance of shares of Class B common stock to the Continuing Equity Owners, which is equal to the number of LLC Interests held by such Continuing Equity Owners at the time of such issuance of Class B common stock, for nominal consideration. |
(b) | Reflects the net effect on cash and cash equivalents and stockholders’ equity of the receipt of offering proceeds to us of $ million, based on the sale of shares of Class A common stock (or shares if the underwriters exercise in full their option to purchase additional shares of Class A common stock) at the initial public offering price of $ per share (which is the midpoint of the estimated price range set forth on the cover pages of this prospectus), after deducting the estimated underwriting discount. See “Use of proceeds.” |
(c) | Reflects the expenses incurred in connection with the Transactions, including this offering, that Smith Douglas Holdings LLC will bear or reimburse to Smith Douglas Homes Corp. |
(d) | Reflects the purchase of LLC Interests from the Continuing Equity Owners on a pro rata basis for $ million in aggregate (or LLC Interests from the Continuing Equity Owners for $ million in aggregate if the underwriters exercise in full their option to purchase additional shares of Class A common stock) at a price per unit equal to the initial public offering price per share of Class A common stock in this offering less the underwriting discount. |
(e) | Upon completion of the Transactions, we will become the sole managing member of Smith Douglas Holdings LLC. Although we will have a minority economic interest in Smith Douglas Holdings LLC, we will have the sole voting interest in, and control of the management of, Smith Douglas Holdings LLC. As a result, we will consolidate the financial results of Smith Douglas Holdings LLC and will report a non-controlling interest related to the interests in Smith Douglas Holdings LLC held by the Continuing Equity Holders in our consolidated balance sheet. Immediately following the Transactions, the economic interests held by the noncontrolling interest will be approximately %. If the underwriters were to exercise their option to purchase additional shares of our Class A common stock in full, the economic interests held by the noncontrolling interest would be approximately %. |
(f) | Reflects repayment of all outstanding borrowings under our Existing Credit Facility on September 30, 2023, as if the Offering had occurred on that date. See “Use of proceeds.” |
(g) | Reflects a decrease in cash and cash equivalents and accrued expenses and other liabilities for the repayment of approximately $1.2 million in notes payable to related parties as if it occurred on September 30, 2023. See “Use of proceeds.” |
(h) | Reflects a decrease in cash and cash equivalents and members' equity for repurchases of 2,000 Class C Units and 600 Class D Units as if they occurred on September 30, 2023. See “Use of proceeds.” |
(i) | Reflects adjustments for deferred tax assets and obligations under the Tax Receivable Agreement triggered by the purchase of LLC Interests from each of the Continuing Equity Owners, as described in greater detail under “Our organizational structure” and “Certain relationships and related person transactions—Tax Receivable Agreement,” in connection with the completion of this offering. The pro forma adjustments reflect the following: |
(aa) | Reflects an increase in cost of home closings due to the $8.5 million fair value adjustment of real estate inventory completed and under construction as of January 1, 2022. This adjustment is being relieved into cost of home closings on a ratable basis over an estimated 48 months, with half of the adjustment relieved in the first 12 months and the remaining half relieved in the following 36 months. |
(bb) | Reflects estimated additional compensation payable to a key employee for each lot acquired after the acquisition of Devon Street Homes. Compensation is equal to $3,125 per lot approved by our Investment Committee and $3,125 per lot taken down, up to a maximum aggregate payout of $7.5 million. In the first 12 months after the acquisition, we estimate that 600 lots will be approved and 60 lots will be taken down. In the following 9 months, we estimate that an additional 450 lots will be approved and another 45 lots will be taken down. |
(cc) | Reflects a net increase in interest expense as if the new borrowings to finance the acquisition of Devon Street Homes and the pay off of Devon Street Homes' existing debt occurred on January 1, 2022. |
(dd) | Reflects an increase in other expense associated with accreting the fair value of contingent consideration to the estimated payout based on a Monte Carlo simulation, as if the acquisition of Devon Street Homes occurred on January 1, 2022 using a discount rate of 8.25%. |
(ee) | Reflects share-based compensation expense from the grant of restricted stock unit awards pursuant to the 2023 Plan to certain of our directors and employees upon completion of this offering. This adjustment reflects compensation expense associated with the grant had it occurred on January 1, 2022, of which shares of our Class A common stock (subject to awards with an aggregate grant date fair value of $3.2 million) are expected to vest in full upon the one-year anniversary of the closing date of this offering, and shares of our Class A common stock (subject to an award with a grant date fair value of $6.0 million) are expected to vest in six equal installments on each of the first six anniversaries of the closing date of this offering, in each case subject to the applicable grantee's continued employment or service (as applicable) through the applicable vesting date, and further subject to accelerated vesting upon certain qualifying terminations of employment or service (as applicable) that occur following a change in control (as further described under the caption “Executive compensation—Narrative to summary compensation table—Equity compensation—IPO equity awards”). |
(ff) | Reflects a decrease in interest expense due to the repayment of all outstanding borrowings on our Existing Credit Facility on January 1, 2022, as if the Devon Street Homes Acquisition and the Offering had occurred on that date. See “Use of proceeds.” After this adjustment, remaining interest expense is interest on the promissory note and amortization of deferred Existing Credit Facility costs. |
(gg) | Provides for an assumed income tax expense on our earnings which is calculated at 25% of income before income tax expense. Following the Transactions, we will be subject to U.S. federal income taxes in addition to applicable state and local taxes with respect to our allocable share of net taxable income of Smith Douglas Holdings LLC. Accordingly, we have provided income taxes assuming a blended federal, state, and local rate of 25% on our allocable share of taxable income, and assuming no adjustments for non-taxable or non-deductible amounts of income and expenses. The actual rate could vary from the rate used in the pro forma financial statements. |
(hh) | Reflects the portion of our net income allocable to the non-controlling interest. After the Transactions, we will become the managing member of Smith Douglas Holdings LLC with a % economic interest but will control the management of Smith Douglas Holdings LLC. The Continuing Equity Owners will own the remaining % |
(ii) | Pro forma basic and dilutive net income per share is computed by dividing the net income attributable to holders of Class A common stock by the weighted-average shares of Class A common stock outstanding during the period. Class A common stock outstanding is also adjusted for any vested Class A common stock under the 2023 Plan. Shares of Class B common stock do not participate in earnings of Smith Douglas Homes Corp. As a result, the shares of Class B common stock are not considered participating securities and are not included in the weighted-average shares outstanding for purposes of computing pro forma net income per share. There are no outstanding dilutive securities due to the following: |
Six months ended June 30, (Unaudited, in thousands, except percentages) | | | Smith Douglas Homes Corp. pro forma(1) | | Historical Smith Douglas Holdings LLC | |||||||||||||
| 2023 | | 2023 | | 2022 | |||||||||||||
Nine months ended September 30, (Unaudited, in thousands, except percentages) | | | Smith Douglas Homes Corp. pro forma(1) | | Historical Smith Douglas Holdings LLC | |||||||||||||
| 2023 | | 2023 | | 2022 | |||||||||||||
Home closing revenue | | $ | | $349,666 | | $325,487 | | $ | | $547,304 | | $531,944 | ||||||
Cost of home closings | | | | 248,435 | | 230,046 | | | | 388,983 | | 377,341 | ||||||
Home closing gross profit(2) | | $ | | $101,231 | | $95,441 | | $ | | $158,321 | | $154,603 | ||||||
Capitalized interest charged to cost of home closings | | | | 955 | | 1,119 | | | | 1,502 | | $1,841 | ||||||
Adj. home closing gross profit | | | $ | | $102,186 | | $96,560 | | | $ | | $159,823 | | $156,444 | ||||
Home closing gross margin(3) | | % | | 29.0% | | 29.3% | | % | | 28.9% | | 29.1% | ||||||
Adj. home closing gross margin(3) | | % | | 29.2% | | 29.7% | | % | | 29.2% | | 29.4% |
(1) | Pro forma for the Transactions and the Devon Street Homes Acquisition. See “Unaudited pro forma condensed consolidated financial information.” |
(2) | Home closing gross profit is home closing revenue less cost of home closings. |
(3) | Calculated as a percentage of home closing revenue. |
Year ended December 31, (in thousands, except percentages) | | | Smith Douglas Homes Corp. pro forma(1) | | | Historical Smith Douglas Holdings LLC | |||
| 2022 | | | 2022 | | | 2021 | ||
Home closing revenue | | | $ | | | $755,353 | | | $518,863 |
Cost of home closings | | | | | 532,599 | | | 395,917 | |
Home closing gross profit(2) | | | $ | | | $222,754 | | | $122,946 |
Capitalized interest charged to cost of home closings | | | | | 2,757 | | | 2,035 | |
Adj. home closing gross profit | | | $ | | | $225,511 | | | $124,981 |
Home closing gross margin(3) | | | % | | | 29.5% | | | 23.7% |
Adj. home closing gross margin(3) | | | % | | | 29.9% | | | 24.1% |
(1) | Pro forma for the Transactions and the Devon Street Homes Acquisition. See “Unaudited pro forma condensed consolidated financial information.” |
(2) | Home closing gross profit is home closing revenue less cost of home closings. |
(3) | Calculated as a percentage of home closing revenue. |
Six months ended June 30, (Unaudited, in thousands, except percentages) | | | Smith Douglas Homes Corp. pro forma(1) | | Historical Smith Douglas Holdings LLC | |||||||||||||
| 2023 | | 2023 | | 2022 | |||||||||||||
Nine months ended September 30, (Unaudited, in thousands, except percentages) | | | Smith Douglas Homes Corp. pro forma(1) | | Historical Smith Douglas Holdings LLC | |||||||||||||
| 2023 | | 2023 | | 2022 | |||||||||||||
Net income | | $ | | $59,567 | | $60,658 | | $ | | $93,500 | | $99,136 | ||||||
Tax-effected adjustments(1) | | | | 14,892 | | 15,164 | | | | 23,375 | | 24,784 | ||||||
Adjusted net income | | $ | | $44,675 | | $45,494 | | $ | | $70,125 | | $74,352 |
(1) | For the |
Year ended December 31, (in thousands, except percentages) | | | Smith Douglas Homes Corp. pro forma(1) | | | Historical Smith Douglas Holdings LLC | |||
| 2022 | | | 2022 | | | 2021 | ||
Net income | | | $ | | | $140,444 | | | $62,530 |
Tax-effected adjustments(1) | | | | | 35,111 | | | 15,632 | |
Adjusted net income | | | $ | | | $105,333 | | | $46,898 |
(1) | For the year ended December 31, 2022 and 2021, our tax expenses assumes an anticipated 25% 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) |
Six months ended June 30, (Unaudited, in thousands, except percentages) | | | Smith Douglas Homes Corp. pro forma(1) | | Historical Smith Douglas Holdings LLC | |||||||||||||
| 2023 | | 2023 | | 2022 | |||||||||||||
Nine months ended September 30, (Unaudited, in thousands, except percentages) | | | Smith Douglas Homes Corp. pro forma(1) | | Historical Smith Douglas Holdings LLC | |||||||||||||
| 2023 | | 2023 | | 2022 | |||||||||||||
Net income | | $ | | $59,567 | | $60,658 | | $ | | $93,500 | | $99,136 | ||||||
Capitalized interest charged to cost of home closings | | | 955 | | 1,119 | | | 1,502 | | 1,841 | ||||||||
Interest expense | | | 400 | | 353 | | | 795 | | 528 | ||||||||
Interest income | | | (81) | | — | | | (116) | | — | ||||||||
Provision for income taxes | | | — | | — | | | — | | — | ||||||||
Depreciation | | | | 503 | | 440 | | | | 798 | | 650 | ||||||
EBITDA | | | $ | | $61,344 | | $62,570 | | | $ | | $96,479 | | $102,155 | ||||
Net income margin(2) | | | 17.0% | | 18.6% | | | 17.1% | | 18.6% | ||||||||
EBITDA margin(2) | | | 17.5% | | 19.2% | | | 17.6% | | 19.2% |
(1) | Pro forma for the Transactions and the Devon Street Homes Acquisition. See “Unaudited pro forma condensed consolidated financial information.” |
(2) | Calculated as a percentage of home closing revenue. |
Year ended December 31, (in thousands, except percentages) | | | Smith Douglas Homes Corp. pro forma(1) | | | Historical Smith Douglas Holdings LLC | |||
| 2022 | | | 2022 | | | 2021 | ||
Net income | | | $ | | | $140,444 | | | $62,530 |
Capitalized interest charged to cost of home closings | | | | | 2,757 | | | 2,035 | |
Interest expense | | | | | 734 | | | 1,733 | |
Interest income | | | | | (92) | | | (1) | |
Provision for income taxes | | | | | — | | | — | |
Depreciation | | | | | 864 | | | 987 | |
EBITDA | | | $ | | | $144,707 | | | $67,284 |
Net income margin(2) | | | | | 18.6% | | | 12.1% | |
EBITDA margin(2) | | | | | 19.2% | | | 13.0% |
(1) | Pro forma for the Transactions and the Devon Street Homes Acquisition. See “Unaudited pro forma condensed consolidated financial information.” |
(2) | Calculated as a percentage of home closing revenue. |
Six months ended June 30, | | | 2023 | | | 2022 | | | Period change | |||
| | Amount | | | Amount | | | Amount | | | Percent | |
Consolidated Statements of Income Data: | | | | | | | | | ||||
Home closing revenue | | | $349,666 | | | $325,487 | | | $24,179 | | | 7.4% |
Cost of home closings | | | 248,435 | | | 230,046 | | | 18,389 | | | 8.0% |
Home closing gross profit | | | 101,231 | | | 95,441 | | | 5,790 | | | 6.1% |
Selling, general, and administrative costs | | | 41,868 | | | 35,136 | | | 6,732 | | | 19.2% |
Equity in income from unconsolidated entities | | | (436) | | | (460) | | | 24 | | | (5.2)% |
Interest expense | | | 400 | | | 353 | | | 47 | | | 13.3% |
Other (income) loss, net | | | (168) | | | (246) | | | 78 | | | (31.7)% |
Income before income taxes | | | $59,567 | | | $60,658 | | | $(1,091) | | | (1.8)% |
Net income | | | $59,567 | | | $60,658 | | | $(1,091) | | | (1.8)% |
Six months ended June 30, | | 2023 | | 2022 | | Period change | ||||||||||||||||||
Nine months ended September 30, | | 2023 | | 2022 | | Period change | ||||||||||||||||||
| Amount | | Amount | | Amount | | Percent | | Amount | | Amount | | Amount | | Percent | |||||||||
Consolidated Statements of Income Data: | | | | | ||||||||||||||||||||
Home closing revenue | | $547,304 | | $531,944 | | $15,360 | | 2.9% | ||||||||||||||||
Cost of home closings | | | 388,983 | | 377,341 | | 11,642 | | 3.1% | |||||||||||||||
Home closing gross profit | | 158,321 | | 154,603 | | 3,718 | | 2.4% | ||||||||||||||||
Selling, general, and administrative costs | | 64,901 | | 56,080 | | 8,821 | | 15.7% | ||||||||||||||||
Equity in income from unconsolidated entities | | (658) | | (789) | | 131 | | (16.6)% | ||||||||||||||||
Interest expense | | 795 | | 528 | | 267 | | 50.6% | ||||||||||||||||
Other income, net | | | (217) | | (352) | | 135 | | (38.4)% | |||||||||||||||
Income before income taxes | | | $93,500 | | $99,136 | | $(5,636) | | (5.7)% | |||||||||||||||
Net income | | | $93,500 | | $99,136 | | $(5,636) | | (5.7)% | |||||||||||||||
Other operating data (unaudited): | | | | | | | | | ||||||||||||||||
Home closings | | 1,060 | | 978 | | 82 | | 8.4% | | 1,643 | | 1,575 | | 68 | | 4.3% | ||||||||
ASP of homes closed | | $330 | | $333 | | $(3) | | (0.9)% | | $333 | | $338 | | $(5) | | (1.5)% | ||||||||
Net new home orders | | 1,276 | | 1,048 | | 228 | | 21.8% | | 1,844 | | 1,504 | | 340 | | 22.6% | ||||||||
Contract value of net new home orders | | $421,248 | | $374,892 | | $46,356 | | 12.4% | | $614,683 | | $535,455 | | $79,228 | | 14.8% | ||||||||
ASP of net new home orders | | $330 | | $358 | | $(28) | | (7.8)% | | $333 | | $356 | | $(23) | | (6.5)% | ||||||||
Cancellation rate(1) | | 8.8% | | 7.3% | | 1.5% | | 20.5% | | 9.5% | | 9.0% | | 0.5% | | 5.6% | ||||||||
Backlog homes (period end)(2) | | 985 | | 1,113 | | (128) | | (11.5)% | | 1,042 | | 972 | | 70 | | 7.2% | ||||||||
Contract value of backlog homes (period end) | | $330,258 | | $397,125 | | $(66,867) | | (16.8)% | | $350,439 | | $349,542 | | $897 | | 0.3% | ||||||||
ASP of backlog homes (period end) | | $335 | | $357 | | $(22) | | (6.2)% | | $336 | | $360 | | $(24) | | (6.7)% | ||||||||
Active communities (period end)(3) | | 44 | | 50 | | (6) | | (12)% | | 62 | | 55 | | 7 | | 12.7% | ||||||||
Controlled lots: | | | | | ||||||||||||||||||||
Controlled lots (period end): | | | | | ||||||||||||||||||||
Homes under construction | | 706 | | 898 | | (192) | | (21.4)% | | 905 | | 792 | | 113 | | 14.3% | ||||||||
Owned lots | | 405 | | 292 | | 113 | | 38.7% | | 395 | | 384 | | 11 | | 2.9% | ||||||||
Optioned lots | | | 7,659 | | 10,106 | | (2,447) | | (24.2)% | | | 10,279 | | 9,390 | | 889 | | 9.5% | ||||||
Total controlled lots | | 8,770 | | 11,296 | | (2,526) | | (22.4)% | | 11,579 | | 10,566 | | 1,013 | | 9.6% |
nm* | Not meaningful |
1. | The cancellation rate is the total number of cancellations during the period divided by the total gross new home orders during the period. |
2. | Backlog homes (period end) is the number of homes in backlog from the previous period plus the number of net new home orders generated during the current period minus the number of homes closed during the current period. |
3. | A community becomes active once the model is completed or the community has its first sale. A community becomes inactive when it has fewer than two homes remaining to sell. |
Six months ended June 30, | | 2023 | | 2022 | ||||||||||||||||||||||||||||||||
Nine months ended September 30, | | 2023 | | 2022 | ||||||||||||||||||||||||||||||||
| 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 | | Home closing revenue | | Home closings | | ASP of homes closed | |||||||||||||
Alabama | | $42,867 | | 147 | | $292 | | $38,898 | | 147 | | $265 | | $75,915 | | 261 | | $291 | | $67,185 | | 242 | | $278 | ||||||||||||
Atlanta | | 170,278 | | 537 | | 317 | | 142,688 | | 449 | | 318 | | 250,772 | | 769 | | 326 | | 238,248 | | 734 | | 325 | ||||||||||||
Charlotte | | 26,871 | | 73 | | 368 | | 43,962 | | 114 | | 386 | | 42,026 | | 117 | | 359 | | 60,033 | | 153 | | 392 | ||||||||||||
Houston | | 10,260 | | 31 | | 331 | | — | | — | | — | ||||||||||||||||||||||||
Nashville | | 51,908 | | 144 | | 360 | | 47,835 | | 125 | | 383 | | 77,602 | | 214 | | 363 | | 79,921 | | 208 | | 384 | ||||||||||||
Raleigh | | | 57,742 | | 159 | | 363 | | 52,104 | | 143 | | 364 | | | 90,729 | | 251 | | 361 | | 86,557 | | 238 | | 364 | ||||||||||
Total | | $349,666 | | 1,060 | | $330 | | $325,487 | | 978 | | $333 | | $547,304 | | 1,643 | | $333 | | $531,944 | | 1,575 | | $338 |
As of June 30, | | 2023 | | 2022 | | Period change | ||||||||||||||||||||||||||||||||||||||||||||||||
As of September 30, | | 2023 | | 2022 | | 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 | | 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 | | 246 | | $73,028 | | $297 | | 191 | | $58,441 | | $306 | | 55 | | $14,587 | | $(9) | | 257 | | $78,431 | | $305 | | 147 | | $45,789 | | $311 | | 110 | | $32,642 | | $(6) | ||||||||||||||||||
Atlanta | | 374 | | 125,606 | | 336 | | 435 | | 143,901 | | 331 | | (61) | | (18,295) | | 5 | | 359 | | 119,157 | | 332 | | 424 | | 141,962 | | 335 | | (65) | | (22,805) | | (3) | ||||||||||||||||||
Charlotte | | 70 | | 25,035 | | 358 | | 112 | | 47,371 | | 423 | | (42) | | (22,336) | | (65) | | 68 | | 26,448 | | 289 | | 90 | | 37,326 | | 415 | | (22) | | (10,878) | | (126) | ||||||||||||||||||
Houston | | 101 | | 34,266 | | 339 | | — | | — | | — | | 101 | | 34,266 | | 339 | ||||||||||||||||||||||||||||||||||||
Nashville | | 129 | | 47,346 | | 367 | | 186 | | 74,171 | | 399 | | (57) | | (26,825) | | (32) | | 107 | | 38,881 | | 363 | | 141 | | 57,070 | | 405 | | (34) | | (18,189) | | (42) | ||||||||||||||||||
Raleigh | | | 166 | | 59,243 | | 357 | | 189 | | 73,241 | | 388 | | (23) | | (13,998) | | (31) | | | 150 | | 53,256 | | 355 | | 170 | | 67,395 | | 396 | | (20) | | (14,139) | | (41) | ||||||||||||||||
Total | | 985 | | $330,258 | | $335 | | 1,113 | | $397,125 | | $357 | | (128) | | $(66,867) | | $(22) | | 1,042 | | $350,439 | | $336 | | 972 | | $349,542 | | $360 | | 70 | | $897 | | $(24) |
Six months ended June 30, | | 2023 | | 2022 | | Period change | ||||||||||||
Nine months ended September 30, | | 2023 | | 2022 | | Period change | ||||||||||||
Alabama | | $3,676 | | $3,376 | | $300 | | $7,558 | | $6,846 | | $712 | ||||||
Atlanta | | 42,928 | | 34,226 | | 8,702 | | 64,210 | | 57,166 | | 7,044 | ||||||
Charlotte | | 4,313 | | 8,895 | | (4,582) | | 6,616 | | 12,050 | | (5,434) | ||||||
Houston | | 869 | | — | | 869 | ||||||||||||
Nashville | | 7,732 | | 10,705 | | (2,973) | | 12,519 | | 17,267 | | (4,748) | ||||||
Raleigh | | | 12,846 | | 12,844 | | 2 | | | 19,641 | | 20,842 | | (1,201) | ||||
Segment total | | 71,495 | | 70,046 | | 1,449 | | 111,413 | | 114,171 | | (2,758) | ||||||
Corporate(1) | | | (11,928) | | (9,388) | | (2,540) | | | (17,913) | | (15,035) | | (2,878) | ||||
Total | | $59,567 | | $60,658 | | $(1,091) | | $93,500 | | $99,136 | | $(5,636) |
(1) | Corporate primarily includes corporate overhead costs, such as payroll and benefits, business insurance, information technology, office costs, outside professional services and travel costs, and certain other amounts that are not allocated to the reportable segments. |
Year ended December 31, | | | 2022 | | | 2021 | | | Year over year change | |||
| | Amount | | | Amount | | | Amount | | | Percent | |
Consolidated Statements of Income Data: | | | | | | | | | ||||
Home closing revenue | | | $755,353 | | | $518,863 | | | $236,490 | | | 45.6% |
Cost of home closings | | | 532,599 | | | 395,917 | | | 136,682 | | | 34.5% |
Home closing gross profit | | | 222,754 | | | 122,946 | | | 99,808 | | | 81.2% |
Selling, general, and administrative costs | | | 83,269 | | | 64,231 | | | 19,038 | | | 29.6% |
Equity in income from unconsolidated entities | | | (1,120) | | | (595) | | | (525) | | | 88.2% |
Interest expense | | | 734 | | | 1,733 | | | (999) | | | (57.6)% |
Other (income) loss, net | | | (573) | | | 188 | | | 761 | | | 404.8% |
Year ended December 31, | | | 2022 | | | 2021 | | | Year over year change | |||
| | Amount | | | Amount | | | Amount | | | Percent | |
Forgiveness of Paycheck Protection Program Loan | | | — | | | (5,141) | | | 5,141 | | | *nm |
Income before income taxes | | | 140,444 | | | 62,530 | | | 77,914 | | | 124.6% |
Net income | | | $140,444 | | | $62,530 | | | $77,914 | | | 124.6% |
Other operating data (unaudited): | | | | | | | | | ||||
Home closings | | | 2,200 | | | 1,848 | | | 352 | | | 19.0% |
ASP of homes closed | | | $343 | | | $281 | | | $62 | | | 22.1% |
Net new home orders | | | 1,928 | | | 1,920 | | | 8 | | | 0.4% |
Contract value of net new home orders | | | $667,530 | | | $597,761 | | | $69,769 | | | 11.7% |
ASP of net new home orders | | | $346 | | | $311 | | | $35 | | | 11.3% |
Cancellation rate(1) | | | 10.9% | | | 6.7% | | | 4.2% | | | 62.7% |
Backlog homes (period end)(2) | | | 771 | | | 1,043 | | | (272) | | | (26.1)% |
Contract value of backlog homes (period end) | | | $258,718 | | | $345,521 | | | $(86,803) | | | (25.1)% |
ASP of backlog homes (period end) | | | $336 | | | $331 | | | $5 | | | 1.5% |
Active communities (period end)(3) | | | 53 | | | 52 | | | 1 | | | 1.9% |
Controlled lots: | | | | | | | | | ||||
Homes under construction | | | 623 | | | 711 | | | (88) | | | (12.4)% |
Owned lots | | | 342 | | | 319 | | | 23 | | | 7.2% |
Optioned lots | | | 7,848 | | | 9,840 | | | (1,992) | | | (20.2)% |
Total controlled lots | | | 8,813 | | | 10,870 | | | (2,057) | | | (18.9)% |
Year ended December 31, | | | 2022 | | | 2021 | ||||||||||||
| | Home closing revenue | | | Home closings | | | ASP of homes closed | | | Home closing revenue | | | Home closings | | | ASP of homes closed | |
Alabama | | | $96,660 | | | 338 | | | $286 | | | $56,034 | | | 240 | | | $233 |
Atlanta | | | 332,102 | | | 1,016 | | | 327 | | | 235,387 | | | 843 | | | 279 |
Charlotte | | | 89,310 | | | 223 | | | 400 | | | 83,497 | | | 263 | | | 317 |
Nashville | | | 120,243 | | | 307 | | | 392 | | | 68,287 | | | 231 | | | 296 |
Raleigh | | | 117,038 | | | 316 | | | 370 | | | 75,658 | | | 271 | | | 279 |
Total | | | $755,353 | | | 2,200 | | | $343 | | | $518,863 | | | 1,848 | | | $281 |
As of December 31, | | | 2022 | | | 2021 | | | Year over year 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 | | | 90 | | | $27,398 | | | $304 | | | 211 | | | $57,486 | | | $272 | | | (121) | | | $(30,088) | | | $ 32 |
Atlanta | | | 385 | | | 119,854 | | | 311 | | | 404 | | | 127,231 | | | 315 | | | (19) | | | (7,377) | | | (4) |
Charlotte | | | 66 | | | 24,887 | | | 377 | | | 124 | | | 47,700 | | | 385 | | | (58) | | | (22,813) | | | (8) |
Nashville | | | 81 | | | 31,259 | | | 386 | | | 138 | | | 52,158 | | | 378 | | | (57) | | | (20,899) | | | 8 |
Raleigh | | | 149 | | | 55,320 | | | 371 | | | 166 | | | 60,946 | | | 367 | | | (17) | | | (5,626) | | | 4 |
Total | | | 771 | | | $ 258,718 | | | $336 | | | 1,043 | | | $ 345,521 | | | $331 | | | (272) | | | $(86,803) | | | $5 |
Year ended December 31, | | | 2022 | | | 2021 | | | Year over year change | |||
| | Amount | | | Amount | | | Amount | | | Percent | |
Consolidated Statements of Income Data: | | | | | | | | | ||||
Home closing revenue | | | $755,353 | | | $518,863 | | | $236,490 | | | 45.6% |
Cost of home closings | | | 532,599 | | | 395,917 | | | 136,682 | | | 34.5% |
Home closing gross profit | | | 222,754 | | | 122,946 | | | 99,808 | | | 81.2% |
Selling, general, and administrative costs | | | 83,269 | | | 64,231 | | | 19,038 | | | 29.6% |
Equity in income from unconsolidated entities | | | (1,120) | | | (595) | | | (525) | | | 88.2% |
Interest expense | | | 734 | | | 1,733 | | | (999) | | | (57.6)% |
Other (income) loss, net | | | (573) | | | 188 | | | (761) | | | (404.8)% |
Forgiveness of Paycheck Protection Program Loan | | | — | | | (5,141) | | | 5,141 | | | *nm |
Income before income taxes | | | 140,444 | | | 62,530 | | | 77,914 | | | 124.6% |
Net income | | | $140,444 | | | $62,530 | | | $77,914 | | | 124.6% |
Other operating data (unaudited): | | | | | | | | | ||||
Home closings | | | 2,200 | | | 1,848 | | | 352 | | | 19.0% |
ASP of homes closed | | | $343 | | | $281 | | | $62 | | | 22.1% |
Net new home orders | | | 1,928 | | | 1,920 | | | 8 | | | 0.4% |
Contract value of net new home orders | | | $667,530 | | | $597,761 | | | $69,769 | | | 11.7% |
ASP of net new home orders | | | $346 | | | $311 | | | $35 | | | 11.3% |
Cancellation rate(1) | | | 10.9% | | | 6.7% | | | 4.2% | | | 62.7% |
Backlog homes (period end)(2) | | | 771 | | | 1,043 | | | (272) | | | (26.1)% |
Contract value of backlog homes (period end) | | | $258,718 | | | $345,521 | | | $(86,803) | | | (25.1)% |
ASP of backlog homes (period end) | | | $336 | | | $331 | | | $5 | | | 1.5% |
Active communities (period end)(3) | | | 53 | | | 52 | | | 1 | | | 1.9% |
Controlled lots: | | | | | | | | | ||||
Homes under construction | | | 623 | | | 711 | | | (88) | | | (12.4)% |
Owned lots | | | 342 | | | 319 | | | 23 | | | 7.2% |
Optioned lots | | | 7,848 | | | 9,840 | | | (1,992) | | | (20.2)% |
Total controlled lots | | | 8,813 | | | 10,870 | | | (2,057) | | | (18.9)% |
nm* | Not meaningful |
1. | The cancellation rate is the total number of cancellations during the period divided by the total gross new home orders during the period. |
2. | Backlog homes (period end) is the number of homes in backlog from the previous period plus the number of net new home orders generated during the current period minus the number of homes closed during the current period. |
3. | A community becomes active once the model is completed or the community has its first sale. A community becomes inactive when it has fewer than two homes remaining to sell. |
Year ended December 31, | | | 2022 | | | 2021 | ||||||||||||
| | Home closing revenue | | | Home closings | | | ASP of homes closed | | | Home closing revenue | | | Home closings | | | ASP of homes closed | |
Alabama | | | $96,660 | | | 338 | | | $286 | | | $56,034 | | | 240 | | | $233 |
Atlanta | | | 332,102 | | | 1,016 | | | 327 | | | 235,387 | | | 843 | | | 279 |
Charlotte | | | 89,310 | | | 223 | | | 400 | | | 83,497 | | | 263 | | | 317 |
Nashville | | | 120,243 | | | 307 | | | 392 | | | 68,287 | | | 231 | | | 296 |
Raleigh | | | 117,038 | | | 316 | | | 370 | | | 75,658 | | | 271 | | | 279 |
Total | | | $755,353 | | | 2,200 | | | $343 | | | $518,863 | | | 1,848 | | | $281 |
As of December 31, | | | 2022 | | | 2021 | | | Year over year 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 | | | 90 | | | $27,398 | | | $304 | | | 211 | | | $57,486 | | | $272 | | | (121) | | | $(30,088) | | | $ 32 |
Atlanta | | | 385 | | | 119,854 | | | 311 | | | 404 | | | 127,231 | | | 315 | | | (19) | | | (7,377) | | | (4) |
Charlotte | | | 66 | | | 24,887 | | | 377 | | | 124 | | | 47,700 | | | 385 | | | (58) | | | (22,813) | | | (8) |
Nashville | | | 81 | | | 31,259 | | | 386 | | | 138 | | | 52,158 | | | 378 | | | (57) | | | (20,899) | | | 8 |
Raleigh | | | 149 | | | 55,320 | | | 371 | | | 166 | | | 60,946 | | | 367 | | | (17) | | | (5,626) | | | 4 |
Total | | | 771 | | | $ 258,718 | | | $336 | | | 1,043 | | | $ 345,521 | | | $331 | | | (272) | | | $(86,803) | | | $5 |
Year ended December 31, | | | 2022 | | | 2021 | | | Year over year change |
Alabama | | | $10,694 | | | $3,920 | | | $6,774 |
Atlanta | | | 81,403 | | | 43,969 | | | 37,434 |
Charlotte | | | 19,209 | | | 10,084 | | | 9,125 |
Nashville | | | 24,914 | | | 9,376 | | | 15,538 |
Raleigh | | | 28,819 | | | 8,855 | | | 19,964 |
Segment total | | | 165,039 | | | 76,204 | | | 88,835 |
Corporate(1) | | | (24,595) | | | (13,674) | | | (10,921) |
Total | | | $140,444 | | | $62,530 | | | $77,914 |
(1) | Corporate primarily includes corporate overhead costs, such as payroll and benefits, business insurance, information technology, office costs, outside professional services and travel costs, and certain other amounts that are not allocated to the
|
Three months ended (unaudited and in thousands) | | | Sep. 30, 2021 | | | Dec. 31, 2021 | | | Mar. 31, 2022 | | | Jun. 30, 2022 | | | Sep. 30, 2022 | | | Dec. 31, 2022 | | | Mar. 31, 2023 | | | Jun. 30, 2023 | | | Sep. 30, 2023 |
Consolidated Statements of Income Data: | | | | | | | | | | | | | | | | | | | |||||||||
Home closing revenue | | | $137,891 | | | $121,637 | | | $155,216 | | | $170,271 | | | $206,457 | | | $223,409 | | | $168,144 | | | $181,522 | | | $197,638 |
Cost of home closings | | | 106,531 | | | 94,237 | | | 110,737 | | | 119,309 | | | 147,295 | | | 155,258 | | | 119,611 | | | 128,824 | | | 140,548 |
Home closing gross profit | | | 31,360 | | | $27,400 | | | 44,479 | | | 50,962 | | | 59,162 | | | 68,151 | | | 48,533 | | | 52,698 | | | 57,090 |
Selling, general, and administrative costs | | | 16,404 | | | 15,881 | | | 16,514 | | | 18,622 | | | 20,944 | | | 27,189 | | | 19,860 | | | 22,008 | | | 23,033 |
Equity in income from unconsolidated entities | | | (120) | | | (118) | | | (209) | | | (251) | | | (329) | | | (331) | | | (210) | | | (226) | | | (222) |
Interest expense | | | 260 | | | 976 | | | 176 | | | 177 | | | 175 | | | 206 | | | 179 | | | 221 | | | 395 |
Other (income) loss, net | | | 132 | | | 131 | | | (239) | | | (7) | | | (106) | | | (221) | | | (122) | | | (46) | | | (49) |
Forgiveness of paycheck protection program loan | | | (5,141) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Income before income taxes | | | 19,825 | | | 10,530 | | | 28,237 | | | 32,421 | | | 38,478 | | | 41,308 | | | 28,826 | | | 30,741 | | | 33,933 |
Net income | | | $19,825 | | | $10,530 | | | $28,237 | | | $32,421 | | | $38,478 | | | $41,308 | | | $28,826 | | | $30,741 | | | $33,933 |
Three months ended (unaudited and in thousands) | | | Sep. 30, 2021 | | | Dec. 31, 2021 | | | Mar. 31, 2022 | | | Jun. 30, 2022 | | | Sep. 30, 2022 | | | Dec. 31, 2022 | | | Mar. 31, 2023 | | | Jun. 30, 2023 | | | Sep. 30, 2023 |
Home closing revenue | | | $137,891 | | | $121,637 | | | $155,216 | | | $170,271 | | | $206,457 | | | $223,409 | | | $168,144 | | | $181,522 | | | $197,638 |
Cost of home closings | | | 106,531 | | | 94,237 | | | 110,737 | | | 119,309 | | | 147,295 | | | 155,258 | | | 119,611 | | | 128,824 | | | 140,548 |
Home closing gross profit(1) | | | 31,360 | | | 27,400 | | | 44,479 | | | 50,962 | | | 59,162 | | | 68,151 | | | 48,533 | | | 52,698 | | | 57,090 |
Capitalized interest charged to cost of home closings | | | 560 | | | 500 | | | 578 | | | 541 | | | 722 | | | 916 | | | 603 | | | 352 | | | 547 |
Adj. home closing gross profit | | | $31,920 | | | $27,900 | | | $45,057 | | | $51,503 | | | $59,884 | | | $69,067 | | | $49,136 | | | $53,050 | | | $57,637 |
Home closing gross margin(1) | | | 22.7% | | | 22.5% | | | 28.7% | | | 29.9% | | | 28.7% | | | 30.5% | | | 28.9% | | | 29.0% | | | 28.9% |
Adj. home closing gross margin(2) | | | 23.1% | | | 22.9% | | | 29.0% | | | 30.2% | | | 29.0% | | | 30.9% | | | 29.2% | | | 29.2% | | | 29.2% |
(1) | Home closing gross profit is home closing revenue less cost of home closings. |
(2) | Calculated |
Three months ended (unaudited and in thousands) | | | Sep. 30, 2021 | | | Dec. 31, 2021 | | | Mar. 31, 2022 | | | Jun. 30, 2022 | | | Sep. 30, 2022 | | | Dec. 31, 2022 | | | Mar. 31, 2023 | | | Jun. 30, 2023 |
Net income | | | $19,825 | | | $10,530 | | | $28,237 | | | $32,421 | | | $38,478 | | | $41,308 | | | $28,826 | | | $30,741 |
Capitalized interest charged to cost of home closings | | | 560 | | | 500 | | | 578 | | | 541 | | | 723 | | | 915 | | | 603 | | | 352 |
Interest expense | | | 260 | | | 976 | | | 176 | | | 177 | | | 175 | | | 206 | | | 179 | | | 221 |
Interest income | | | — | | | — | | | — | | | — | | | — | | | (92) | | | (62) | | | (19) |
Provision for income taxes | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Depreciation | | | 348 | | | 240 | | | 220 | | | 220 | | | 210 | | | 214 | | | 250 | | | 253 |
EBITDA | | | $20,993 | | | $12,246 | | | $29,211 | | | $33,359 | | | $39,586 | | | $42,551 | | | $29,796 | | | $31,548 |
Net income margin(1) | | | 14.4% | | | 8.7% | | | 18.2% | | | 19.0% | | | 18.6% | | | 18.5% | | | 17.1% | | | 16.9% |
EBITDA margin(1) | | | 15.2% | | | 10.1% | | | 18.8% | | | 19.6% | | | 19.2% | | | 19.0% | | | 17.7% | | | 17.4% |
Three months ended (unaudited) | | | Sep. 30, 2021 | | | Dec. 31, 2021 | | | Mar. 31, 2022 | | | Jun. 30, 2022 | | | Sep. 30, 2022 | | | Dec. 31, 2022 | | | Mar. 31, 2023 | | | Jun. 30, 2023 |
Consolidated Statements of Income Data: | | | | | | | | | | | | | | | | | ||||||||
Home closing revenue | | | 100% | | | 100% | | | 100% | | | 100% | | | 100% | | | 100% | | | 100% | | | 100% |
Cost of home closings | | | 77.3% | | | 77.5% | | | 71.3% | | | 70.1% | | | 71.3% | | | 69.5% | | | 71.1% | | | 71.0% |
Home closing gross profit | | | 22.7% | | | 22.5% | | | 28.7% | | | 29.9% | | | 28.7% | | | 30.5% | | | 28.9% | | | 29.0% |
Selling, general, and administrative costs | | | 11.9% | | | 13.0% | | | 10.6% | | | 10.9% | | | 10.2% | | | 12.2% | | | 11.9% | | | 12.1% |
Equity in income from unconsolidated entities | | | (0.1)% | | | (0.1)% | | | (0.1)% | | | (0.1)% | | | (0.1)% | | | (0.2)% | | | (0.1)% | | | (0.1)% |
Interest expense | | | 0.2% | | | 0.8% | | | 0.1% | | | 0.1% | | | 0.1% | | | 0.1% | | | 0.1% | | | 0.1% |
Other (income) loss, net | | | 0.1% | | | 0.1% | | | (0.1)% | | | —% | | | (0.1)% | | | (0.1)% | | | (0.1)% | | | —% |
Forgiveness of paycheck protection program loan | | | (3.8)% | | | —% | | | —% | | | —% | | | —% | | | —% | | | —% | | | —% |
Income before income taxes | | | 14.4% | | | 8.7% | | | 18.2% | | | 19.0% | | | 18.6% | | | 18.5% | | | 17.1% | | | 16.9% |
Net income | | | 14.4% | | | 8.7% | | | 18.2% | | | 19.0% | | | 18.6% | | | 18.5% | | | 17.1% | | | 16.9% |
Three months ended (unaudited and in thousands) | | | Sep. 30, 2021 | | | Dec. 31, 2021 | | | Mar. 31, 2022 | | | Jun. 30, 2022 | | | Sep. 30, 2022 | | | Dec. 31, 2022 | | | Mar. 31, 2023 | | | Jun. 30, 2023 | | | Sep. 30, 2023 |
Net income | | | $19,825 | | | $10,530 | | | $28,237 | | | $32,421 | | | $38,478 | | | $41,308 | | | $28,826 | | | $30,741 | | | $33,933 |
Capitalized interest charged to cost of home closings | | | 560 | | | 500 | | | 578 | | | 541 | | | 722 | | | 916 | | | 603 | | | 352 | | | 547 |
Interest expense | | | 260 | | | 976 | | | 176 | | | 177 | | | 175 | | | 206 | | | 179 | | | 221 | | | 395 |
Interest income | | | — | | | — | | | — | | | — | | | — | | | (92) | | | (62) | | | (19) | | | (35) |
Provision for income taxes | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Depreciation | | | 348 | | | 240 | | | 220 | | | 220 | | | 210 | | | 214 | | | 250 | | | 253 | | | 295 |
EBITDA | | | $20,993 | | | $12,246 | | | $29,211 | | | $33,359 | | | $39,585 | | | $42,552 | | | $29,796 | | | $31,548 | | | $35,135 |
Net income margin(1) | | | 14.4% | | | 8.7% | | | 18.2% | | | 19.0% | | | 18.6% | | | 18.5% | | | 17.1% | | | 16.9% | | | 17.2% |
EBITDA margin(1) | | | 15.2% | | | 10.1% | | | 18.8% | | | 19.6% | | | 19.2% | | | 19.0% | | | 17.7% | | | 17.4% | | | 17.8% |
(1) | Calculated as |
Three months ended (unaudited) | | | Sep. 30, 2021 | | | Dec. 31, 2021 | | | Mar. 31, 2022 | | | Jun. 30, 2022 | | | Sep. 30, 2022 | | | Dec. 31, 2022 | | | Mar. 31, 2023 | | | Jun. 30, 2023 | | | Sep. 30, 2023 |
Consolidated Statements of Income Data: | | | | | | | | | | | | | | | | | | | |||||||||
Home closing revenue | | | 100% | | | 100% | | | 100% | | | 100% | | | 100% | | | 100% | | | 100% | | | 100% | | | 100% |
Cost of home closings | | | 77.3% | | | 77.5% | | | 71.3% | | | 70.1% | | | 71.3% | | | 69.5% | | | 71.1% | | | 71.0% | | | 71.1% |
Home closing gross profit | | | 22.7% | | | 22.5% | | | 28.7% | | | 29.9% | | | 28.7% | | | 30.5% | | | 28.9% | | | 29.0% | | | 28.9% |
Selling, general, and administrative costs | | | 11.9% | | | 13.0% | | | 10.6% | | | 10.9% | | | 10.2% | | | 12.2% | | | 11.9% | | | 12.1% | | | 11.6% |
Equity in income from unconsolidated entities | | | (0.1)% | | | (0.1)% | | | (0.1)% | | | (0.1)% | | | (0.1)% | | | (0.2)% | | | (0.1)% | | | (0.1)% | | | (0.1)% |
Interest expense | | | 0.2% | | | 0.8% | | | 0.1% | | | 0.1% | | | 0.1% | | | 0.1% | | | 0.1% | | | 0.1% | | | 0.2% |
Other (income) loss, net | | | 0.1% | | | 0.1% | | | (0.1)% | | | —% | | | (0.1)% | | | (0.1)% | | | (0.1)% | | | —% | | | —% |
Forgiveness of paycheck protection program loan | | | (3.8)% | | | —% | | | —% | | | —% | | | —% | | | —% | | | —% | | | —% | | | —% |
Income before income taxes | | | 14.4% | | | 8.7% | | | 18.2% | | | 19.0% | | | 18.6% | | | 18.5% | | | 17.1% | | | 16.9% | | | 17.2% |
Net income | | | 14.4% | | | 8.7% | | | 18.2% | | | 19.0% | | | 18.6% | | | 18.5% | | | 17.1% | | | 16.9% | | | 17.2% |
Six months ended June 30, | | 2023 | | 2022 | ||||||||
Nine months ended September 30, | | 2023 | | 2022 | ||||||||
Net cash provided by operating activities | | $35,902 | | $28,995 | | $54,958 | | $58,105 | ||||
Net cash (used in) provided by investing activities | | (180) | | 572 | | (75,631) | | 798 | ||||
Net cash used in financing activities | | | (53,931) | | (29,982) | |||||||
Net cash provided by (used in) financing activities | | | 1,512 | | (67,124) | |||||||
Net decrease in cash and cash equivalents | | (18,209) | | (415) | | (19,161) | | (8,221) | ||||
Cash and cash equivalents, beginning of period | | | 29,601 | | 25,340 | | | 29,601 | | 25,340 | ||
Cash and cash equivalents, end of period | | $11,392 | | $24,925 | | $10,440 | | $17,119 |
Year ended December 31, | | | 2022 | | | 2021 |
Net cash provided by operating activities | | | $132,095 | | | $30,870 |
Net cash provided by investing activities | | | 361 | | | 847 |
Net cash used in financing activities | | | (128,195) | | | (38,541) |
Net increase (decrease) in cash and cash equivalents | | | 4,261 | | | (6,824) |
Cash and cash equivalents, beginning of year | | | 25,340 | | | 32,164 |
Cash and cash equivalents, end of year | | | $29,601 | | | $25,340 |
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1) | Raleigh-Durham is a custom market area by John Burns that includes the Franklin, Johnston, Wake, Chatham, Durham, Orange, and Person counties. |
(1) | Based on Builder Magazine’s Top 100 list; achievements correspond to the year the ranking was based on. |
(2) | Purchase price of |
| | Historical Smith Douglas Holdings LLC | | | Historical Smith Douglas Holdings LLC | |||||||||||||||||||||||||||||||
As of June 30, | | 2023 | | 2022 | ||||||||||||||||||||||||||||||||
As of September 30, | | 2023 | | 2022 | ||||||||||||||||||||||||||||||||
Market | | Owned(2) | | Optioned | | Total Controlled | | Owned(2) | | Optioned | | Total Controlled | | Owned(2) | | Optioned | | Total Controlled | | Owned(2) | | Optioned | | Total Controlled | ||||||||||||
Alabama(1) | | 315 | | 1,483 | | 1,798 | | 239 | | 2,620 | | 2,859 | | 329 | | 1,578 | | 1,907 | | 229 | | 2,173 | | 2,402 | ||||||||||||
Atlanta | | 338 | | 3,384 | | 3,722 | | 477 | | 4,120 | | 4,597 | | 318 | | 4,612 | | 4,930 | | 463 | | 4,014 | | 4,477 | ||||||||||||
Charlotte | | 81 | | 1,127 | | 1,208 | | 89 | | 1,203 | | 1,292 | | 67 | | 1,101 | | 1,168 | | 86 | | 1,222 | | 1,308 | ||||||||||||
Houston | | 242 | | 1,157 | | 1,399 | | — | | — | | — | ||||||||||||||||||||||||
Nashville | | 207 | | 662 | | 869 | | 215 | | 1,051 | | 1,266 | | 166 | | 816 | | 982 | | 235 | | 907 | | 1,142 | ||||||||||||
Raleigh | | | 170 | | 1,003 | | 1,173 | | 170 | | 1,112 | | 1,282 | | | 178 | | 1,015 | | 1,193 | | 163 | | 1,074 | | 1,237 | ||||||||||
Total | | 1,111 | | 7,659 | | 8,770 | | 1,190 | | 10,106 | | 11,296 | | 1,300 | | 10,279 | | 11,579 | | 1,176 | | 9,390 | | 10,566 |
| | Historical Smith Douglas Holdings LLC | | | Historical Smith Douglas Holdings LLC | |||||||||||||||||||||||||||||||
As of December 31, | | 2022 | | 2021 | | 2022 | | 2021 | ||||||||||||||||||||||||||||
Market | | Owned(2) | | Optioned | | Total Controlled | | Owned(2) | | Optioned | | Total Controlled | | Owned(2) | | Optioned | | Total Controlled | | Owned(2) | | Optioned | | Total Controlled | ||||||||||||
Alabama(1) | | 152 | | 2,005 | | 2,157 | | 224 | | 2,264 | | 2,488 | | 152 | | 2,005 | | 2,157 | | 224 | | 2,264 | | 2,488 | ||||||||||||
Atlanta | | 430 | | 3,201 | | 3,631 | | 388 | | 4,171 | | 4,559 | | 430 | | 3,201 | | 3,631 | | 388 | | 4,171 | | 4,559 | ||||||||||||
Charlotte | | 55 | | 931 | | 986 | | 92 | | 1,311 | | 1,403 | | 55 | | 931 | | 986 | | 92 | | 1,311 | | 1,403 | ||||||||||||
Houston | | — | | — | | — | | — | | — | | — | ||||||||||||||||||||||||
Nashville | | 168 | | 705 | | 873 | | 192 | | 1,088 | | 1,280 | | 168 | | 705 | | 873 | | 192 | | 1,088 | | 1,280 | ||||||||||||
Raleigh | | | 160 | | 1,006 | | 1,166 | | 134 | | 1,006 | | 1,140 | | | 160 | | 1,006 | | 1,166 | | 134 | | 1,006 | | 1,140 | ||||||||||
Total | | 965 | | 7,848 | | 8,813 | | 1,030 | | 9,840 | | 10,870 | | 965 | | 7,848 | | 8,813 | | 1,030 | | 9,840 | | 10,870 |
(1) | Includes lots controlled in Birmingham and Huntsville. |
(2) | Includes homes under construction |
| | Historical Smith Douglas Holdings LLC | | | Historical Smith Douglas Holdings LLC | |||||||
As of June 30, | | 2023 | | 2022 | ||||||||
As of September 30, | | 2023 | | 2022 | ||||||||
Backlog homes finished or under construction | | 55% | | 64% | | 51% | | 57% | ||||
Unsold homes under construction | | 4% | | 4% | | 12% | | 5% | ||||
Unsold completed homes | | 1% | | 0% | | 2% | | 1% | ||||
Model homes | | 4% | | 4% | | 5% | | 4% | ||||
Owned unstarted finished lots | | | 36% | | 27% | | | 30% | | 33% | ||
Total | | 100% | | 100% | | 100% | | 100% |
| | Historical Smith Douglas Holdings LLC | ||||
As of December 31, | | | 2022 | | | 2021 |
Backlog homes finished or under construction | | | 47% | | | 64% |
Unsold homes under construction | | | 9% | | | 1% |
Unsold completed homes | | | 4% | | | 0% |
Model homes | | | 5% | | | 4% |
Owned unstarted finished lots | | | 35% | | | 31% |
Total | | | 100% | | | 100% |
| | Historical Smith Douglas Holdings LLC | | | Historical Smith Douglas Holdings LLC | |||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended June 30, | | 2023 | | 2022 | | Period Over Period Change | ||||||||||||||||||||||||||||||||||||||||||||||||
Nine months ended September 30, | | 2023 | | 2022 | | Period Over Period Change | ||||||||||||||||||||||||||||||||||||||||||||||||
Market | | Orders | | Starts | | Closings | | Orders | | Starts | | Closings | | Orders | | Starts | | Closings | | Orders | | Starts | | Closings | | Orders | | Starts | | Closings | | Orders | | Starts | | Closings | ||||||||||||||||||
Alabama | | 304 | | 246 | | 147 | | 127 | | 147 | | 147 | | 177 | | 99 | | 0 | | 428 | | 359 | | 261 | | 178 | | 211 | | 242 | | 250 | | 148 | | 19 | ||||||||||||||||||
Atlanta | | 526 | | 548 | | 537 | | 480 | | 506 | | 449 | | 46 | | 42 | | 88 | | 743 | | 760 | | 769 | | 754 | | 827 | | 734 | | (11) | | (67) | | 35 | ||||||||||||||||||
Charlotte | | 77 | | 78 | | 73 | | 102 | | 110 | | 114 | | (25) | | (32) | | (41) | | 119 | | 124 | | 117 | | 119 | | 154 | | 153 | | — | | (30) | | (36) | ||||||||||||||||||
Houston | | 61 | | 38 | | 31 | | — | | — | | — | | 61 | | 38 | | 31 | ||||||||||||||||||||||||||||||||||||
Nashville | | 193 | | 155 | | 144 | | 173 | | 177 | | 125 | | 20 | | (22) | | 19 | | 241 | | 225 | | 214 | | 211 | | 216 | | 208 | | 30 | | 9 | | 6 | ||||||||||||||||||
Raleigh | | | 176 | | 160 | | 159 | | 166 | | 166 | | 143 | | 10 | | (6) | | 16 | | | 252 | | 243 | | 251 | | 242 | | 239 | | 238 | | 10 | | 4 | | 13 | ||||||||||||||||
Totals | | 1,276 | | 1,187 | | 1,060 | | 1,048 | | 1,106 | | 978 | | 228 | | 81 | | 82 | | 1,844 | | 1,749 | | 1,643 | | 1,504 | | 1,647 | | 1,575 | | 340 | | 102 | | 68 |
| | Historical Smith Douglas Holdings LLC | | | Historical Smith Douglas Holdings LLC | |||||||||||||||||||||||||||||||||||||||||||||||||
Year ended December 31, | | 2022 | | 2021 | | Year Over Year Change | | 2022 | | 2021 | | Year Over Year Change | ||||||||||||||||||||||||||||||||||||||||||
Market | | Orders | | Starts | | Closings | | Orders | | Starts | | Closings | | Orders | | Starts | | Closings | | Orders | | Starts | | Closings | | Orders | | Starts | | Closings | | Orders | | Starts | | Closings | ||||||||||||||||||
Alabama | | 217 | | 267 | | 338 | | 352 | | 332 | | 240 | | (135) | | (65) | | 98 | | 217 | | 267 | | 338 | | 352 | | 332 | | 240 | | (135) | | (65) | | 98 | ||||||||||||||||||
Atlanta | | 997 | | 1,051 | | 1,016 | | 779 | | 748 | | 843 | | 218 | | 303 | | 173 | | 997 | | 1,051 | | 1,016 | | 779 | | 748 | | 843 | | 218 | | 303 | | 173 | ||||||||||||||||||
Charlotte | | 165 | | 185 | | 223 | | 227 | | 258 | | 263 | | (62) | | (73) | | (40) | | 165 | | 185 | | 223 | | 227 | | 258 | | 263 | | (62) | | (73) | | (40) | ||||||||||||||||||
Houston | | — | | — | | — | | — | | — | | — | | — | | — | | — | ||||||||||||||||||||||||||||||||||||
Nashville | | 250 | | 297 | | 307 | | 261 | | 245 | | 231 | | (11) | | 52 | | 76 | | 250 | | 297 | | 307 | | 261 | | 245 | | 231 | | (11) | | 52 | | 76 | ||||||||||||||||||
Raleigh | | | 299 | | 312 | | 316 | | 301 | | 296 | | 271 | | (2) | | 16 | | 45 | | | 299 | | 312 | | 316 | | 301 | | 296 | | 271 | | (2) | | 16 | | 45 | ||||||||||||||||
Totals | | 1,928 | | 2,112 | | 2,200 | | 1,920 | | 1,879 | | 1,848 | | 8 | | 233 | | 352 | | 1,928 | | 2,112 | | 2,200 | | 1,920 | | 1,879 | | 1,848 | | 8 | | 233 | | 352 |
| | Historical Smith Douglas Holdings LLC | | | Historical Smith Douglas Holdings LLC | |||||||
As of June 30, | | 2023 | | 2022 | ||||||||
As of September 30, | | 2023 | | 2022 | ||||||||
Net new home orders | | 1,276 | | 1,048 | | 1,844 | | 1,504 | ||||
Contract value of net new home orders | | $421,248 | | $374,892 | | $614,683 | | $535,455 | ||||
ASP of net new home orders | | $330 | | $358 | | $333 | | $356 | ||||
Cancellation rate | | 8.8% | | 7.3% | | 9.5% | | 9.0% |
| | Historical Smith Douglas Holdings LLC | ||||
As of December 31, | | | 2022 | | | 2021 |
Net new home orders | | | 1,928 | | | 1,920 |
Contract value of net new home orders | | | $667,530 | | | $597,761 |
ASP of net new home orders | | | $346 | | | $311 |
Cancellation rate | | | 10.9% | | | 6.7% |
| | Historical Smith Douglas Holdings LLC | | | Historical Smith Douglas Holdings LLC | |||||||
As of June 30, | | 2023 | | 2022 | ||||||||
As of September 30, | | 2023 | | 2022 | ||||||||
Backlog homes (period end) | | 985 | | 1,113 | | 1,042 | | 972 | ||||
Contract value of backlog homes (period end) | | $330,258 | | $397,125 | | $350,439 | | $349,542 | ||||
ASP of backlog homes (period end) | | $335 | | $357 | | $336 | | $360 |
| | Historical Smith Douglas Holdings LLC | ||||
As of December 31, | | | 2022 | | | 2021 |
Backlog homes (period end) | | | 771 | | | 1,043 |
Contract value of backlog homes (period end) | | | $258,718 | | | $345,521 |
ASP of backlog homes (period end) | | | $336 | | | $331 |
Name | | | Age | | | Position(s) |
Thomas L. Bradbury | | | 79 | | | Executive Chairman and Director |
Gregory S. Bennett | | | 58 | | | President, Chief Executive Officer, Vice Chairman, and Director |
Russell Devendorf | | | 50 | | | Executive Vice President and Chief Financial Officer |
Brett A. Steele | | | 53 | | | Vice President, General Counsel, and Secretary |
Julie Bradbury | | | 48 | | | Director |
Jeffrey T. Jackson | | | 57 | | | Director |
Neil B. Wedewer | | | 70 | | | Director |
Neill B. Faucett | | | 78 | | | Director Nominee |
George Ervin Perdue III | | | 76 | | | Director Nominee |
Janice E. Walker | | | 51 | | | Director Nominee |
Name and Principal Position | | | Year | | | Salary ($) | | | Stock Awards ($) | | | Non-Equity Incentive Plan Compensation ($)(1) | | | All Other Compensation ($)(2) | | | Total ($) |
Gregory S. Bennett President, Chief Executive Officer, & Vice Chairman | | | 2022 | | | 250,000 | | | — | | | — | | | 1,131,617 | | | 1,381,617 |
Thomas L. Bradbury Executive Chairman | | | 2022 | | | — | | | — | | | — | | | 56,807 | | | 56,807 |
Russell Devendorf Executive Vice President & Chief Financial Officer | | | 2022 | | | 650,000 | | | — | | | 860,510 | | | 13,100 | | | 1,523,610 |
Brett A. Steele Vice President, General Counsel, & Secretary | | | 2022 | | | 251,125 | | | — | | | 240,833 | | | 13,100 | | | 505,058 |
(1) | Amounts reflect annual and long-term cash incentive bonuses paid to Messrs. Devendorf and Steele with respect to 2022. We provide additional information regarding such bonuses in “—Narrative to Summary Compensation Table—2022 Cash Incentive Compensation” below. |
(2) | Amounts reported for each of the named executive officers include (i) safe harbor matching contributions made by us under our 401(k) plan ($10,437 for Mr. Bennett, $12,200 for Mr. Devendorf, and $12,200 for Mr. Steele); (ii) Company-paid reimbursement of cell phone expenses ($900 for each of Messrs. Bennett, Devendorf and Steele); (iii) the aggregate incremental cost to us of personal use of our aircraft ($70,280 for Mr. Bennett and $56,807 for Mr. Bradbury); and (iv) non-pro rata distributions to Mr. Bennett in respect of his Class A units pursuant to our operating agreement ($1,050,000 for Mr. Bennett). |
Named Executive Officer | | | Title | | | Annual Base Salary ($) | | | Target Annual Bonus ($) | | | Target Long-Term Incentive Award ($) |
Gregory S. Bennett | | | President, Chief Executive Officer, & Vice Chairman | | | $1,000,000 | | | $3,000,000 | | | $2,000,000 |
Thomas L. Bradbury | | | Executive Chairman | | | $1,000,000 | | | $250,000 | | | $250,000 |
Russell Devendorf | | | Executive Vice President & Chief Financial Officer | | | $650,000 | | | $500,000 | | | $500,000 |
Brett A. Steele | | | Vice President, General Counsel, & Secretary | | | $350,000 | | | $150,000 | | | $150,000 |
Name | | | Fees Earned or Paid in Cash ($) | | | All Other Compensation ($) | | | Total ($) |
Julie Bradbury | | | 75,000 | | | — | | | 75,000 |
Jeffrey T. Jackson | | | 95,000 | | | — | | | 95,000 |
David McPherson | | | 75,000 | | | 1,397,741(2) | | | 1,472,741 |
Name | | | Fees Earned or Paid in Cash ($) | | | All Other Compensation ($) | | | Total ($) |
Neil B. Wedewer | | | 18,750(1) | | | — | | | 18,750 |
Howe Whitman | | | 56,250 | | | 18,750(3) | | | 75,000 |
(1) | Mr. Wedewer commenced service as a non-employee director in December 2022, and his cash retainer fees reflect his partial year of service. |
(2) | Amount represents consulting fees earned and cell phone expense reimbursements paid to Mr. McPherson during 2022. Mr. McPherson is party to a consulting agreement with us pursuant to which he shall provide consulting services to us during the period beginning August 1, 2016 and ending July 31, 2025 in exchange for (i) an annual fee equal to $550,000 plus (ii) eligibility to earn an annual bonus. Mr. McPherson earned a bonus equal to $846,841 with respect to 2022, which was paid in February 2023. We also reimbursed Mr. McPherson for cell phone expenses in the amount of $900 during 2022. |
(3) | Mr. Whitman’s cash retainer fee with respect to the fourth quarter of 2022 ($18,750) was paid in the form of a charitable contribution in his name to the Wilberforce School. |
Participants(1) | | | LLC Interests purchased by us | | | Total purchase price |
Founder Fund(2) | | | | | $ | |
GSB Holdings(3) | | | | | $ |
(1) | Additional details regarding these stockholders and their equity holdings are provided in this prospectus under the caption “Principal stockholders.” |
(2) | Thomas Bradbury, our Executive Chairman of the board of directors, is co-trustee of Founder Fund. |
(3) | Gregory Bennett, our Chief Executive Officer, and Vice Chairman of our board of directors, is sole member of GSB Holdings. |
| | Class A Common Stock Beneficially Owned(1) | | | Class B Common Stock Beneficially Owned | | | Combined Voting Power(2) | ||||||||||||||||||||||||||||||||||
| | Before this offering | | | | | After this offering (no exercise of over- allotment option) | | | | | After this offering (with full exercise or over- allotment option) | | | | | Before this offering | | | | | After this offering (no exercise of over- allotment option) | | | | | After this offering (with full exercise or over- allotment option) | | | | | After this offering (No exercise of over- allotment option) | | | After this offering (with full exercise of over- allotment option) | |||||||
Name of beneficial owner | | | Number | | | % | | | Number | | | % | | | Number | | | % | | | Number | | | % | | | Number | | | % | | | Number | | | % | | | % | | | % |
5% Stockholders | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||
Founder Fund(3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||
GSB Holdings(4) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||
Named Executive Officers, Directors, and Director Nominees | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||
Thomas L. Bradbury(3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||
Gregory S. Bennett(4) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||
Russell Devendorf | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||
Brett A. Steele | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||
Julie Bradbury | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||
Neill B. Faucett | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||
Jeffrey T. Jackson | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Class A Common Stock Beneficially Owned(1) | | | Class B Common Stock Beneficially Owned | | | Combined Voting Power(2) | ||||||||||||||||||||||||||||||||||
| | Before this offering | | | | | After this offering (no exercise of over- allotment option) | | | | | After this offering (with full exercise or over- allotment option) | | | | | Before this offering | | | | | After this offering (no exercise of over- allotment option) | | | | | After this offering (with full exercise or over- allotment option) | | | | | After this offering (No exercise of over- allotment option) | | | After this offering (with full exercise of over- allotment option) | |||||||
Name of beneficial owner | | | Number | | | % | | | Number | | | % | | | Number | | | % | | | Number | | | % | | | Number | | | % | | | Number | | | % | | | % | | | % |
George E. “Sonny” Perdue III | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||
Janice E. Walker | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||
Neil B. Wedewer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||
All directors, director designees, director nominees, and executive officers as a group (10 persons)(5) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
* | Represents beneficial ownership of less than 1%. |
(1) | Each Continuing Equity Owner will be entitled to redeem their LLC Interests from time to time at each holder’s option, for shares of Class A common stock on a one-for-one basis. LLC Interests may also be redeemed in the event that the majority of the holders of LLC Interests, in connection with an IPO, deliver redemption notices, provided that such redemption is pro rata from all members, each at our election (determined solely by our independent directors (within the meaning of the Exchange rules) who are disinterested), for shares of Class A common stock, on a one-for-one basis or, to the extent there is cash available from a secondary offering, a cash payment equal to a volume weighted average market price of one share of Class A common stock, for each LLC Interest so redeemed, in each case, in accordance with the terms of the Smith Douglas LLC Agreement; provided that, at our election (determined solely by our independent directors (within the meaning of the Exchange rules) who are disinterested), we may effect a direct exchange by Smith Douglas Homes Corp. of such Class A common stock, or such cash, as applicable, for such LLC Interests. The Continuing Equity Owners may, subject to certain exceptions, exercise such redemption right for as long as their LLC Interests remain outstanding. See “Certain relationships and related person transactions—Smith Douglas LLC Agreement.” In this table, beneficial ownership of LLC Interests has been reflected as beneficial ownership of shares of our Class A common stock for which such LLC Interests may be exchanged. When an LLC Interest is exchanged by a Continuing Equity Holder, a corresponding share of Class B common stock automatically be transferred to Smith Douglas Homes Corp. for no consideration and canceled. |
(2) | Represents the percentage of voting power of our Class A common stock and Class B common stock, voting as a single class. Each share of Class A common stock entitles the registered holder thereof to one vote per share, and each share of Class B common stock entitles the registered holder thereof to ten votes per share prior to the Sunset Date, in each case, on all matters presented to stockholders for a vote generally, including the election of directors. From and after the occurrence of the Sunset Date each share of our Class B common stock will entitle its holder to one vote per share on all matters presented to our stockholders generally. The Class A common stock and Class B common stock will vote as a single class on all matters except as required by law or our amended and restated certificate of incorporation. Our Class B common stock does not have any of the economic rights (including rights to dividends and distributions upon dissolution or liquidation) associated with our Class A common stock. See “Description of capital stock.” |
(3) | Consists of LLC Interests (and associated shares of Class B common stock) held by Bradbury Family Trust II A (“Founder Fund”) that will be issued in connection with the Transactions. As a co-trustee of Founder Fund, Mr. Bradbury may be deemed to have shared voting and investment power with respect to such securities. The address for Founder Fund is 110 Village Trail, Suite 115, Woodstock, GA 30188. |
(4) | Consists of LLC Interests (and associated shares of Class B common stock) held by GSB Holdings LLC (“GSB Holdings”), that will be issued in connection with the Transactions. Mr. Bennett is the sole member of GSB Holdings, and may be deemed to have sole voting and investment power with regard to the securities held GSB Holdings. The address for GSB Holdings is 210 Road 1 South, Cartersville, GA, 30120. |
(5) | Consists of LLC Interests (and associated shares of Class B common stock), all of which will be issued in connection with the Transactions. |
Name | | | Number of Shares |
J.P. Morgan Securities LLC | | | |
BofA Securities, Inc. | | | |
RBC Capital Markets, LLC | | | |
Wells Fargo Securities, LLC | | | |
Nomura Securities International, Inc. | | | |
WR Securities, LLC | | | |
Wedbush Securities Inc. | | | |
Fifth Third Securities, Inc. | | | |
Regions Securities LLC | | | |
Whelan Advisory Capital Markets | | | |
Total | | |
| | Without option to purchase additional shares exercise | | | With full option to purchase additional shares exercise | |
Per Share | | | | | ||
Total | | | | |
Smith Douglas Homes Corp. | | | |
Financial Statements | |||
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Interim Condensed Financial Statements (unaudited) | | | |
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Smith Douglas Holdings LLC | | | |
Consolidated Financial Statements | | | |
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Interim Condensed Consolidated Financial Statements (unaudited) | | | |
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Devon Street Homes, L.P. | | | |
Consolidated Financial Statements | | | |
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Interim Consolidated Financial Statements (unaudited) | | | |
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| |
| | June 20, 2023 (Date of Formation) | |
Assets: | | | |
Contributions receivable | | | — |
Total assets | | | $— |
Commitments and contingencies (Note 4) | | | |
Stockholder’s equity | | | |
Common stock $0.0001 per share, 100 shares authorized, no shares issued or outstanding | | | — |
Total stockholders’ equity | | | $— |
| | 2023 | | | June 20, 2023 | |
| | (unaudited) | | | (Date of Formation) | |
Assets: | | | | | ||
Cash | | | — | | | — |
Contributions receivable | | | — | | | — |
Total assets | | | $— | | | $— |
Commitments and contingencies (Note 4) | | | | | ||
Stockholder’s equity | | | | | ||
Common stock $0.0001 per share, 100 shares authorized, | | | — | | | — |
Total stockholders’ equity | | | $— | | | $— |
December 31, (in thousands) | | | 2022 | | | 2021 |
Assets: | | | | | ||
Cash and cash equivalents | | | $29,601 | | | $25,340 |
Real estate inventory | | | 142,065 | | | 138,931 |
Deposits on real estate under option or contract | | | 33,027 | | | 24,803 |
Real estate not owned | | | 2,446 | | | 1,466 |
Investments in unconsolidated entities | | | 448 | | | 2,310 |
Property and equipment, net | | | 1,306 | | | 1,187 |
Other assets | | | 14,479 | | | 7,151 |
Total assets | | | $223,372 | | | $201,188 |
| | | | |||
Liabilities: | | | | | ||
Accounts payable | | | $10,935 | | | $8,822 |
Customer deposits | | | 9,439 | | | 9,874 |
Revolving line of credit | | | 15,000 | | | 72,000 |
Liabilities related to real estate not owned | | | 2,446 | | | 1,466 |
Accrued expenses and other liabilities | | | 21,041 | | | 13,510 |
Total liabilities | | | 58,861 | | | 105,672 |
Commitments and contingencies (Note 14) | | | | | ||
Members’ equity | | | 164,511 | | | 95,516 |
Total liabilities and members’ equity | | | $223,372 | | | $201,188 |
Year ended December 31, (in thousands) | | | 2022 | | | 2021 |
Home closing revenue | | | $755,353 | | | $518,863 |
Cost of home closings | | | 532,599 | | | 395,917 |
| | | | |||
Home closing gross profit | | | 222,754 | | | 122,946 |
| | | | |||
Selling, general, and administrative costs | | | 83,269 | | | 64,231 |
Equity in income from unconsolidated entities | | | (1,120) | | | (595) |
Interest expense | | | 734 | | | 1,733 |
Other (income) loss, net | | | (573) | | | 188 |
Forgiveness of Paycheck Protection Program Loan | | | — | | | (5,141) |
Net income | | | $140,444 | | | $62,530 |
Years ended December 31, 2022 and 2021 (In thousands, except number of units) | | | Class A Units | | | Class C Units | | | Class D Units | | | Total Members’ Equity | |||||||||
| Units | | | Amount | | | Units | | | Amount | | | Units | | | Amount | | ||||
Balance December 31, 2020 | | | 111,111 | | | $71,372 | | | 2,000 | | | $2,000 | | | 600 | | | $600 | | | $73,972 |
Distributions | | | — | | | (40,798) | | | — | | | (80) | | | — | | | (108) | | | (40,986) |
Net income | | | — | | | 62,342 | | | — | | | 80 | | | — | | | 108 | | | 62,530 |
Balance December 31, 2021 | | | 111,111 | | | 92,916 | | | 2,000 | | | 2,000 | | | 600 | | | 600 | | | 95,516 |
Distributions | | | — | | | (71,261) | | | — | | | (80) | | | — | | | (108) | | | (71,449) |
Net income | | | — | | | 140,256 | | | — | | | 80 | | | — | | | 108 | | | 140,444 |
Balance December 31, 2022 | | | 111,111 | | | $161,911 | | | 2,000 | | | $2,000 | | | 600 | | | $600 | | | $164,511 |
Year ended December 31, (in thousands) | | | 2022 | | | 2021 |
Cash flows from operating activities: | | | | | ||
Net income | | | $140,444 | | | $62,530 |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | ||
Depreciation | | | 864 | | | 987 |
Gain on sale of property and equipment | | | (23) | | | (3) |
Accrued incentive compensation expense | | | 2,189 | | | 1,450 |
Abandonment of lot option contracts | | | 366 | | | — |
Forgiveness of Paycheck Protection Program Loan | | | — | | | (5,141) |
Amortization of debt issuance costs | | | 616 | | | 938 |
Equity in earnings from unconsolidated entities | | | (1,120) | | | (595) |
Distributions of income from unconsolidated entities | | | 1,046 | | | 625 |
Noncash lease expense | | | 439 | | | 467 |
Changes in assets and liabilities: | | | | | ||
Real estate inventory | | | (3,499) | | | (16,600) |
Deposits on real estate under option or contract | | | (8,590) | | | (15,181) |
Other assets | | | (6,287) | | | (1,017) |
Accounts payable | | | 2,113 | | | (654) |
Customer deposits | | | (435) | | | 3,664 |
Accrued expenses and other liabilities | | | 3,972 | | | (600) |
Net cash provided by operating activities | | | 132,095 | | | 30,870 |
| | | | |||
Cash flows from investing activities: | | | | | ||
Purchases of property and equipment | | | (1,000) | | | (730) |
Net payments to related party | | | — | | | (38) |
Cash paid for investments in unconsolidated entities | | | (9) | | | (844) |
Distributions of capital from unconsolidated entities | | | 1,330 | | | 2,403 |
Proceeds from sales of property and equipment | | | 40 | | | 56 |
Net cash provided by investing activities | | | 361 | | | 847 |
| | | | |||
Cash flows from financing activities: | | | | | ||
Borrowings under revolving credit facility and construction loans | | | 40,000 | | | 393,079 |
Repayments under revolving credit facility and construction loans | | | (97,000) | | | (384,956) |
Payments on notes payable | | | (33) | | | (5,066) |
Payments on notes payable - related party | | | (177) | | | (82) |
Proceeds from sales of real estate not owned | | | 9,146 | | | 2,783 |
Payments related to repurchases of real estate not owned | | | (8,166) | | | (1,317) |
Distributions to members | | | (71,449) | | | (40,986) |
Payment of debt issuance costs | | | (516) | | | (1,996) |
Net cash used in financing activities | | | (128,195) | | | (38,541) |
Net increase (decrease) in cash and cash equivalents | | | 4,261 | | | (6,824) |
Cash and cash equivalents, beginning of year | | | 25,340 | | | 32,164 |
Cash and cash equivalents, end of year | | | $29,601 | | | $25,340 |
Year ended December 31, (in thousands) | | | 2022 | | | 2021 |
Supplemental Disclosure of Cash Flow Information: | | | | | ||
Cash paid for interest, net of amounts capitalized | | | $134 | | | $988 |
Real estate inventory distributed to the Company by unconsolidated entities | | | $615 | | | $345 |
Right-of-use assets obtained in exchange for new operating lease liabilities | | | $1,580 | | | $241 |
| | 2022 | | | 2021 | |
Development reimbursement receivables from land bankers (Note 11) | | | $8,993 | | | $3,608 |
Debt issuance costs, net of accumulated amortization | | | 1,315 | | | 1,416 |
Prepaid insurance and other expenses | | | 995 | | | 558 |
Operating lease right-of-use assets | | | 2,048 | | | 907 |
Other assets | | | 1,128 | | | 662 |
Total other assets | | | $14,479 | | | $7,151 |
| | 2022 | | | 2021 | |
Lots held for construction | | | $27,467 | | | $20,629 |
Homes under construction, completed homes, and model homes | | | 114,598 | | | 118,302 |
Total real estate inventory | | | $142,065 | | | $138,931 |
| | 2022 | | | 2021 | |
Capitalized interest, beginning of year | | | $1,017 | | | $958 |
Interest incurred | | | 3,591 | | | 3,827 |
Interest expensed | | | (734) | | | (1,733) |
Interest charged to cost of home closings | | | (2,757) | | | (2,035) |
Capitalized interest, end of year | | | $1,117 | | | $1,017 |
| | 2022 | | | 2021 | |
Automobiles | | | $311 | | | $368 |
Airplanes | | | 1,141 | | | 1,141 |
Furniture and fixtures | | | 2,954 | | | 2,473 |
Computer equipment | | | 40 | | | 97 |
| | 4,446 | | | 4,079 | |
Less: Accumulated depreciation and amortization | | | (3,140) | | | (2,892) |
Net property and equipment | | | $1,306 | | | $1,187 |
Year ending December 31, | | | |
2023 | | | $— |
2024 | | | — |
2025 | | | 15,000 |
| | $15,000 |
| | 2022 | | | 2021 | |
Payroll and related liabilities | | | $8,486 | | | $5,395 |
Accrued incentive compensation | | | 4,528 | | | 2,794 |
Warranty reserves | | | 2,071 | | | 1,516 |
Lease liabilities | | | 2,077 | | | 920 |
Due to related parties and notes payable - related party | | | 1,316 | | | 1,493 |
Other liabilities | | | 2,563 | | | 1,392 |
Total accrued expenses and other liabilities | | | $21,041 | | | $13,510 |
Year ended December 31, | | | 2022 | | | 2021 |
Balance, beginning of year | | | $1,516 | | | $1,177 |
Additions to reserve from new home closings | | | 1,509 | | | 1,028 |
Warranty claims | | | (774) | | | (581) |
Adjustments to pre-existing reserves | | | (180) | | | (108) |
Balance, end of year | | | $2,071 | | | $1,516 |
Year ended December 31, | | | 2022 | | | 2021 |
Operating lease costs | | | $528 | | | $501 |
Variable lease costs - operating | | | $166 | | | $179 |
As of December 31, | | | 2022 | | | 2021 |
ROU assets | | | $2,048 | | | $907 |
Lease liabilities | | | $2,077 | | | $920 |
Weighted average remaining lease term (in months) | | | 61 | | | 32 |
Weighted average discount rate | | | 6.01% | | | 3.79% |
Year ending December 31, | | | |
2023 | | | $555 |
2024 | | | 437 |
2025 | | | 403 |
2026 | | | 410 |
2027 | | | 368 |
Thereafter | | | 250 |
Total lease payments | | | 2,423 |
Less imputed interest | | | (346) |
Total lease liability | | | $2,077 |
December 31, 2022 | | | Deposits or investments | | | Remaining purchase price |
Option contracts | | | $33,027 | | | $420,136 |
Option contracts with unconsolidated entities | | | 319 | | | 3,145 |
Total option contracts | | | $33,346 | | | $423,281 |
December 31, 2021 | | | Deposits or investments | | | Remaining purchase price |
Option contracts | | | $24,889 | | | $426,580 |
Option contracts with unconsolidated entities | | | 2,255 | | | 13,936 |
Total option contracts | | | $27,144 | | | $440,516 |
(a) | First, to the holders of outstanding Class D Units (ratably based upon the number of Class D Units held by each) until such holders have received an amount equal to any unpaid Class D preferred distribution plus $1,000 for each outstanding Class D Unit; |
(b) | Second, if assets remain to be distributed, to the holders of outstanding Class C Units (ratably based upon the number of Class C Units held by each) until such holders have received an amount equal to any unpaid Class C preferred distribution plus $2,000,000; |
(c) | Then any assets remaining are distributed among Class A Unitholders. |
Year ended December 31, | | | 2022 | | | 2021 |
Operating lease costs (related party) | | | $314 | | | $268 |
Variable lease costs - operating (related party) | | | $73 | | | $99 |
Year ending December 31, | | | |
2023 | | | $327 |
2024 | | | 337 |
2025 | | | 347 |
2026 | | | 357 |
2027 | | | 368 |
Thereafter | | | 250 |
Total lease payments | | | 1,986 |
Less imputed interest | | | (323) |
Total lease liability (related party) | | | $1,663 |
Year ended December 31, | | | 2022 | | | 2021 |
Home closing revenue: | | | | | ||
Alabama | | | $96,660 | | | $56,034 |
Atlanta | | | 332,102 | | | 235,387 |
Charlotte | | | 89,310 | | | 83,497 |
Nashville | | | 120,243 | | | 68,287 |
Raleigh | | | 117,038 | | | 75,658 |
Total | | | $755,353 | | | $518,863 |
Year ended December 31, | | | 2022 | | | 2021 |
Net income (loss): | | | | | ||
Alabama | | | $10,694 | | | $3,920 |
Atlanta | | | 81,403 | | | 43,969 |
Charlotte | | | 19,209 | | | 10,084 |
Nashville | | | 24,914 | | | 9,376 |
Raleigh | | | 28,819 | | | 8,855 |
Segment total | | | 165,039 | | | 76,204 |
Corporate(1) | | | (24,595) | | | (13,674) |
Total | | | $140,444 | | | $62,530 |
(1) | Corporate primarily includes corporate overhead costs, such as payroll and benefits, business insurance, information technology, office costs, outside professional services and travel costs, and certain other amounts that are not allocated to the reportable segments. For the year ended December 31, 2021, the Corporate balance includes $5.1 million of income from forgiveness of a PPP loan. |
As of December 31, | | | 2022 | | | 2021 |
Assets: | | | | | ||
Alabama | | | $32,840 | | | $33,621 |
Atlanta | | | 83,343 | | | 62,333 |
Charlotte | | | 17,659 | | | 20,350 |
Nashville | | | 25,921 | | | 28,580 |
Raleigh | | | 28,900 | | | 27,019 |
Segment total | | | 188,663 | | | 171,903 |
Corporate(1) | | | 34,709 | | | 29,285 |
Total | | | $223,372 | | | $201,188 |
(1) | Corporate primarily includes cash and cash equivalents, property and equipment, and other assets that are not allocated to the segments. |
(Unaudited, in thousands) | | June 30, 2023 | | December 31, 2022 | ||||||||
| | September 30, 2023 | | December 31, 2022 | ||||||||
| (Unaudited, in thousands) | |||||||||||
Assets: | | | | | ||||||||
Cash and cash equivalents | | $11,392 | | $29,601 | | $10,440 | | $29,601 | ||||
Real estate inventory | | 164,084 | | 142,065 | | 220,734 | | 142,065 | ||||
Deposits on real estate under option or contract | | 35,742 | | 33,027 | | 46,713 | | 33,027 | ||||
Real estate not owned | | 1,737 | | 2,446 | | 18,333 | | 2,446 | ||||
Investments in unconsolidated entities | | 136 | | 448 | ||||||||
Property and equipment, net | | 1,264 | | 1,306 | | 1,656 | | 1,306 | ||||
Goodwill | | 16,465 | | — | ||||||||
Other assets | | | 11,208 | | 14,479 | | | 15,135 | | 14,927 | ||
Total assets | | $225,563 | | $223,372 | | | $329,476 | | $223,372 | |||
| | |||||||||||
Liabilities: | | | | | ||||||||
Accounts payable | | $10,688 | | $10,935 | | $16,428 | | $10,935 | ||||
Customer deposits | | 9,461 | | 9,439 | | 9,543 | | 9,439 | ||||
Revolving line of credit | | 10,000 | | 15,000 | ||||||||
Notes payable | | 76,000 | | 15,000 | ||||||||
Liabilities related to real estate not owned | | 1,737 | | 2,446 | | 18,333 | | 2,446 | ||||
Accrued expenses and other liabilities | | | 17,771 | | 21,041 | | | 21,388 | | 21,041 | ||
Total liabilities | | 49,657 | | 58,861 | | 141,692 | | 58,861 | ||||
Commitments and contingencies (Note 13) | | | | | ||||||||
Members’ equity | | | 175,906 | | 164,511 | | | 187,784 | | 164,511 | ||
Total liabilities and members’ equity | | $225,563 | | $223,372 | | | $329,476 | | $223,372 |
Six Months Ended June 30, (Unaudited, in thousands) | | 2023 | | 2022 | ||||||||
| | Nine Months Ended September 30, | ||||||||||
| | 2023 | | 2022 | ||||||||
| (Unaudited, in thousands) | |||||||||||
Home closing revenue | | $349,666 | | $325,487 | | $547,304 | | $531,944 | ||||
Cost of home closings | | | 248,435 | | 230,046 | | | 388,983 | | 377,341 | ||
| | |||||||||||
Home closing gross profit | | 101,231 | | 95,441 | | 158,321 | | 154,603 | ||||
| | |||||||||||
Selling, general and administrative costs | | 41,868 | | 35,136 | | 64,901 | | 56,080 | ||||
Equity in income from unconsolidated entities | | (436) | | (460) | | (658) | | (789) | ||||
Interest expense | | 400 | | 353 | | 795 | | 528 | ||||
Other income, net | | | (168) | | (246) | | | (217) | | (352) | ||
Net income | | $59,567 | | $60,658 | | | $93,500 | | $99,136 |
Six Months Ended June 30, 2023 and 2022 (Unaudited, in thousands, except number of units) | | | Class A Units | | | Class C Units | | | Class D Units | | | Total Members’ Equity | |||||||||
| Units | | | Amount | | | Units | | | Amount | | | Units | | | Amount | | ||||
Balance December 31, 2021 | | | 111,111 | | | $92,916 | | | 2,000 | | | $2,000 | | | 600 | | | $600 | | | $95,516 |
Distributions | | | — | | | (36,490) | | | — | | | (40) | | | — | | | (54) | | | (36,584) |
Net income | | | — | | | 60,564 | | | — | | | 40 | | | — | | | 54 | | | 60,658 |
Balance June 30, 2022 | | | 111,111 | | | $116,990 | | | 2,000 | | | $2,000 | | | 600 | | | $600 | | | $119,590 |
Balance December 31, 2022 | | | 111,111 | | | $161,911 | | | 2,000 | | | $2,000 | | | 600 | | | $600 | | | $164,511 |
Distributions | | | — | | | (48,078) | | | — | | | (40) | | | — | | | (54) | | | (48,172) |
Net income | | | — | | | 59,473 | | | — | | | 40 | | | — | | | 54 | | | 59,567 |
Balance June 30, 2023 | | | 111,111 | | | $173,306 | | | 2,000 | | | $2,000 | | | 600 | | | $600 | | | $175,906 |
(Unaudited, in thousands, except number of units) | | ||||||||||||||||||||
| | Class A Units | | | Class C Units | | | Class D Units | | | Total Members’ Equity | ||||||||||
| | Units | | | Amount | | | Units | | | Amount | | | Units | | | Amount | | |||
Balance December 31, 2021 | | | 111,111 | | | $92,916 | | | 2,000 | | | $2,000 | | | 600 | | | $600 | | | $95,516 |
Distributions | | | — | | | (58,854) | | | — | | | (60) | | | — | | | (81) | | | (58,995) |
Net income | | | — | | | 98,995 | | | — | | | 60 | | | — | | | 81 | | | 99,136 |
Balance September 30, 2022 | | | 111,111 | | | $133,057 | | | 2,000 | | | $2,000 | | | 600 | | | $600 | | | $135,657 |
Balance December 31, 2022 | | | 111,111 | | | $161,911 | | | 2,000 | | | $2,000 | | | 600 | | | $600 | | | $164,511 |
Distributions | | | — | | | (70,086) | | | — | | | (60) | | | — | | | (81) | | | (70,227) |
Net income | | | — | | | 93,359 | | | — | | | 60 | | | — | | | 81 | | | 93,500 |
Balance September 30, 2023 | | | 111,111 | | | $185,184 | | | 2,000 | | | $2,000 | | | 600 | | | $600 | | | $187,784 |
Six Months Ended June 30, (Unaudited, in thousands) | | 2023 | | 2022 | ||||||||
| | Nine Months Ended September 30, | ||||||||||
| | 2023 | | 2022 | ||||||||
| (Unaudited, in thousands) | |||||||||||
Cash flows from operating activities: | | | | | ||||||||
Net income | | $59,567 | | $60,658 | | $93,500 | | $99,136 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | ||||||||
Depreciation | | 503 | | 440 | | 798 | | 650 | ||||
Loss (gain) on sale of property and equipment | | 5 | | (4) | ||||||||
Accrued incentive compensation expense | | 755 | | 632 | | 1,115 | | 1,256 | ||||
Abandonment of lot option contracts | | 10 | | 20 | ||||||||
Amortization of debt issuance costs | | 339 | | 292 | | 508 | | 438 | ||||
Equity in earnings from unconsolidated entities | | (436) | | (460) | | (658) | | (789) | ||||
Distributions of income from unconsolidated entities | | 462 | | 436 | | 697 | | 757 | ||||
Noncash lease expense | | 228 | | 217 | | 349 | | 328 | ||||
Other | | 14 | | 57 | ||||||||
Changes in assets and liabilities: | | | | | ||||||||
Real estate inventory | | (21,310) | | (35,621) | | (34,340) | | (37,487) | ||||
Deposits on real estate under option or contract | | (2,725) | | (8,662) | | (6,503) | | (10,302) | ||||
Other assets | | 2,704 | | (587) | | (870) | | (2,784) | ||||
Accounts payable | | (247) | | 11,959 | | 4,636 | | 4,344 | ||||
Customer deposits | | 22 | | 2,308 | | (77) | | 599 | ||||
Accrued expenses and other liabilities | | | (3,975) | | (2,633) | | | (4,211) | | 1,902 | ||
Net cash provided by operating activities | | 35,902 | | 28,995 | | 54,958 | | 58,105 | ||||
| | | | |||||||||
Cash flows from investing activities: | | | | | ||||||||
Purchases of property and equipment | | (486) | | (434) | | (1,104) | | (581) | ||||
Net payments to related party | | — | | (28) | ||||||||
Cash paid for investments in unconsolidated entities | | — | | (9) | ||||||||
Distributions of capital from unconsolidated entities | | 286 | | 1,033 | | 320 | | 1,330 | ||||
Proceeds from sales of property and equipment | | | 20 | | 10 | |||||||
Acquisition of Devon Street | | (74,868) | | — | ||||||||
Other | | | 21 | | 49 | |||||||
Net cash (used in) provided by investing activities | | (180) | | 572 | | (75,631) | | 798 | ||||
| | | | |||||||||
Cash flows from financing activities: | | | | | ||||||||
Borrowings under revolving credit facility and construction loans | | 43,000 | | 27,000 | | 133,000 | | 46,000 | ||||
Repayments under revolving credit facility and construction loans | | (48,000) | | (24,000) | | (77,000) | | (55,000) | ||||
Payments on notes payable | | (3) | | (29) | | (5) | | (31) | ||||
Payments on notes payable - related party | | (47) | | (42) | | (143) | | (62) | ||||
Proceeds from sales of real estate not owned | | 1,044 | | 8,586 | | 19,948 | | 8,659 | ||||
Payments related to repurchases of real estate not owned | | (1,753) | | (4,913) | | (4,061) | | (7,695) | ||||
Distributions to members | | | (48,172) | | (36,584) | | | (70,227) | | (58,995) | ||
Net cash used in financing activities | | | (53,931) | | (29,982) | |||||||
Net cash provided by (used in) financing activities | | | 1,512 | | (67,124) | |||||||
Net decrease in cash and cash equivalents | | (18,209) | | (415) | | (19,161) | | (8,221) | ||||
Cash and cash equivalents, beginning of period | | | 29,601 | | 25,340 | | | 29,601 | | 25,340 | ||
Cash and cash equivalents, end of period | | | $11,392 | | $24,925 | | | $10,440 | | $17,119 | ||
| | | | |||||||||
Supplemental Disclosure of Cash Flow Information: | | | | | ||||||||
Cash paid for interest, net of amounts capitalized | | | $143 | | $3 | | | $24 | | $(28) | ||
Right-of-use assets obtained in exchange for new operating lease liabilities | | $— | | $1,580 | | | $230 | | $1,580 | |||
Seller note payable and contingent consideration related to acquisition of Devon Street | | | $8,000 | | $— | |||||||
Real estate inventory distributed to the Company by unconsolidated entities | | | $— | | $615 |
| | June 30, 2023 | | | December 31, 2022 | |
Development reimbursement receivables from land bankers (Note 10) | | | $6,159 | | | $8,993 |
Debt issuance costs, net of accumulated amortization | | | 976 | | | 1,315 |
Prepaid insurance and other expenses | | | 825 | | | 995 |
Operating lease right-of-use assets | | | 1,820 | | | 2,048 |
Other assets | | | 1,428 | | | 1,128 |
Total other assets | | | $11,208 | | | $14,479 |
| | September 30, 2023 | | | December 31, 2022 | |
Development reimbursement receivables from land bankers (Note 10) | | | $7,616 | | | $8,993 |
Debt issuance costs, net of accumulated amortization | | | 816 | | | 1,315 |
Prepaid insurance and other expenses | | | 2,639 | | | 995 |
Operating lease right-of-use assets | | | 1,928 | | | 2,048 |
Other assets | | | 2,136 | | | 1,576 |
Total other assets | | | $15,135 | | | $14,927 |
| | June 30, 2023 | | | December 31, 2022 | |
Lots held for construction | | | $28,812 | | | $27,467 |
Homes under construction, completed homes and model homes | | | 135,272 | | | 114,598 |
Total real estate inventory | | | $164,084 | | | $142,065 |
| | September 30, 2023 | | | December 31, 2022 | |
Lots held for construction | | | $26,007 | | | $27,467 |
Homes under construction, completed homes and model homes | | | 194,727 | | | 114,598 |
Total real estate inventory | | | $220,734 | | | $142,065 |
| | Six Months Ended June 30, | ||||
| | 2023 | | | 2022 | |
Capitalized interest, beginning of period | | | $1,117 | | | $1,017 |
Interest incurred | | | 572 | | | 1,247 |
Interest expensed | | | (400) | | | (353) |
Interest charged to cost of home closings | | | (955) | | | (1,119) |
Capitalized interest, end of period | | | $334 | | | $792 |
| | June 30, 2023 | | | December 31, 2022 | |
Automobiles | | | $311 | | | $311 |
Airplanes | | | 1,141 | | | 1,141 |
Furniture and fixtures | | | 3,056 | | | 2,954 |
Computer equipment | | | 80 | | | 40 |
| | 4,588 | | | 4,446 | |
Less: Accumulated depreciation and amortization | | | (3,324) | | | (3,140) |
Net property and equipment | | | $1,264 | | | $1,306 |
| | Nine Months Ended September 30, | ||||
| | 2023 | | | 2022 | |
Capitalized interest, beginning of period | | | $1,117 | | | $1,017 |
Interest incurred | | | 1,676 | | | 2,162 |
Interest expensed | | | (795) | | | (528) |
Interest charged to cost of home closings | | | (1,502) | | | (1,841) |
Capitalized interest, end of period | | | $496 | | | $810 |
| | September 30, 2023 | | | December 31, 2022 | |
Automobiles | | | $311 | | | $311 |
Airplanes | | | 1,141 | | | 1,141 |
Furniture and fixtures | | | 3,673 | | | 2,954 |
Computer equipment | | | 107 | | | 40 |
| | 5,232 | | | 4,446 | |
Less: Accumulated depreciation and amortization | | | (3,576) | | | (3,140) |
Net property and equipment | | | $1,656 | | | $1,306 |
Year ending December 31, | | | ||||
2023 (1) | | $— | | $417 | ||
2024 | | — | | 1,667 | ||
2025 | | | 10,000 | | 72,667 | |
2026 | | | 1,249 | |||
| $10,000 | | | $76,000 |
(1) | Remaining payments are for the |
| | June 30, 2023 | | | December 31, 2022 | |
Payroll and related liabilities | | | $3,358 | | | $8,486 |
Accrued incentive compensation | | | 4,619 | | | 4,528 |
Warranty reserves | | | 2,383 | | | 2,071 |
Lease liabilities | | | 1,861 | | | 2,077 |
Due to related parties and notes payable – related party | | | 1,269 | | | 1,316 |
Accruals related to real estate development and other liabilities | | | 4,281 | | | 2,563 |
Total accrued expenses and other liabilities | | | $17,771 | | | $21,041 |
| | September 30, 2023 | | | December 31, 2022 | |
Payroll and related liabilities | | | $4,191 | | | $8,486 |
Accrued incentive compensation | | | 4,979 | | | 4,528 |
Warranty reserve | | | 2,763 | | | 2,071 |
Lease liabilities | | | 1,974 | | | 2,077 |
Due to related parties and notes payable – related party | | | 1,159 | | | 1,316 |
Accruals related to real estate development and other liabilities | | | 3,287 | | | 2,563 |
Contingent consideration | | | 3,035 | | | — |
Total accrued expenses and other liabilities | | | $21,388 | | | $21,041 |
Six Months Ended June 30, | | 2023 | | 2022 | ||||||||
| Nine Months Ended September 30, | |||||||||||
| | 2023 | | 2022 | ||||||||
Balance, beginning of period | | $2,071 | | $1,516 | | $2,071 | | $1,516 | ||||
Additions to reserve from new home closings | | 698 | | 651 | | 1,012 | | 1,063 | ||||
Estimated fair value of warranty liability assumed in Devon Street acquisition | | 203 | | — | ||||||||
Warranty claims | | (331) | | (337) | | (493) | | (581) | ||||
Adjustments to pre-existing reserves | | | (55) | | (127) | | | (30) | | (160) | ||
Balance, end of period | | $2,383 | | $1,703 | | | $2,763 | | $1,838 |
Six Months Ended June 30, | | 2023 | | 2022 | ||||||||
| Nine Months Ended September 30, | |||||||||||
| | 2023 | | 2022 | ||||||||
Operating lease costs | | $286 | | $242 | | $438 | | $385 | ||||
Variable lease costs - operating | | $88 | | $91 | | $115 | | $113 |
| | September 30, 2023 | | | December 31, 2022 | |
ROU assets | | | $1,928 | | | $2,048 |
Lease liabilities | | | $1,974 | | | $2,077 |
Weighted average remaining lease term (in months) | | | 51 | | | 61 |
Weighted average discount rate | | | 6.39% | | | 6.01% |
| | June 30, 2023 | | | December 31, 2022 | |
ROU assets | | | $1,820 | | | $2,048 |
Lease liabilities | | | $1,861 | | | $2,077 |
Weighted average remaining lease term (in months) | | | 56 | | | 61 |
Weighted average discount rate | | | 6.07% | | | 6.01% |
Year ending December 31, | | | ||||
2023 (1) | | $281 | | $167 | ||
2024 | | 437 | | 581 | ||
2025 | | 403 | | 473 | ||
2026 | | 410 | | 412 | ||
2027 | | 368 | | 368 | ||
Thereafter | | | 250 | | | 251 |
Total lease payments | | 2,149 | | 2,252 | ||
Less imputed interest | | | (288) | | | (278) |
Total lease liability | | $1,861 | | | $1,974 |
(1) | Remaining payments are for the |
June 30, 2023 | | | Deposits or investments | | | Remaining purchase price |
Option contracts | | | $35,742 | | | $455,144 |
Option contracts with unconsolidated entities | | | 33 | | | 425 |
Total option contracts | | | $35,775 | | | $455,569 |
December 31, 2022 | | | Deposits or investments | | | Remaining purchase price |
Option contracts | | | $33,027 | | | $420,136 |
Option contracts with unconsolidated entities | | | 319 | | | 3,145 |
Total option contracts | | | $33,346 | | | $423,281 |
| | September 30, 2023 | ||||
| | Deposits or investments | | | Remaining purchase price | |
Option contracts | | | $46,713 | | | $572,377 |
Option contracts with unconsolidated entities | | | — | | | — |
Total option contracts | | | $46,713 | | | $572,377 |
| | December 31, 2022 | ||||
| | Deposits or investments | | | Remaining purchase price | |
Option contracts | | | $33,027 | | | $420,136 |
Option contracts with unconsolidated entities | | | 319 | | | 3,145 |
Total option contracts | | | $33,346 | | | $423,281 |
(a) | First, to the holders of outstanding Class D Units (ratably based upon the number of Class D Units held by each) until such holders have received an amount equal to any unpaid Class D preferred distribution plus $1,000 for each outstanding Class D Unit; |
(b) | Second, if assets remain to be distributed, to the holders of outstanding Class C Units (ratably based upon the number of Class C Units held by each) until such holders have received an amount equal to any unpaid Class C preferred distribution plus $2,000,000; |
(c) | Then any assets remaining are distributed among Class A Unitholders. |
Six Months Ended June 30, | | 2023 | | 2022 | ||||||||
| Nine Months Ended September 30, | |||||||||||
| | 2023 | | 2022 | ||||||||
Operating lease costs (related party) | | $173 | | $140 | | $260 | | $227 | ||||
Variable lease costs - operating (related party) | | $40 | | $36 | | $59 | | $50 |
Year ending December 31, | | | ||||
2023 (1) | | $165 | | $84 | ||
2024 | | 337 | | 337 | ||
2025 | | 347 | | 347 | ||
2026 | | 357 | | 357 | ||
2027 | | 368 | | 368 | ||
Thereafter | | | 250 | | | 250 |
Total lease payments | | 1,824 | | 1,743 | ||
Less imputed interest | | | (272) | | | (248) |
Total lease liability (related party) | | $1,552 | | | $1,495 |
(1) | Remaining payments are for the |
Six Months Ended June 30, | | | 2023 | | | 2022 |
Home closing revenue: | | | | | ||
Alabama | | | $42,867 | | | $38,898 |
Atlanta | | | 170,278 | | | 142,688 |
Charlotte | | | 26,871 | | | 43,962 |
Nashville | | | 51,908 | | | 47,835 |
Raleigh | | | 57,742 | | | 52,104 |
Total | | | $349,666 | | | $325,487 |
Six Months Ended June 30, | | | 2023 | | | 2022 |
Net income (loss): | | | | | ||
Alabama | | | $3,676 | | | $3,376 |
Atlanta | | | 42,928 | | | 34,226 |
Charlotte | | | 4,313 | | | 8,895 |
Nashville | | | 7,732 | | | 10,705 |
Raleigh | | | 12,846 | | | 12,844 |
Segment total | | | 71,495 | | | 70,046 |
Corporate (1) | | | (11,928) | | | (9,388) |
Total | | | $59,567 | | | $60,658 |
| | Nine Months Ended September 30, | ||||
| | 2023 | | | 2022 | |
Home closing revenue: | | | | | ||
Alabama | | | $75,915 | | | $67,185 |
Atlanta | | | 250,772 | | | 238,248 |
Charlotte | | | 42,026 | | | 60,033 |
Houston | | | 10,260 | | | — |
Nashville | | | 77,602 | | | 79,921 |
Raleigh | | | 90,729 | | | 86,557 |
Total | | | $547,304 | | | $531,944 |
| | Nine Months Ended September 30, | ||||
| | 2023 | | | 2022 | |
Net income (loss): | | | | | ||
Alabama | | | $7,558 | | | $6,846 |
Atlanta | | | 64,210 | | | 57,166 |
Charlotte | | | 6,616 | | | 12,050 |
Houston | | | 869 | | | — |
Nashville | | | 12,519 | | | 17,267 |
Raleigh | | | 19,641 | | | 20,842 |
Segment total | | | 111,413 | | | 114,171 |
Corporate(1) | | | (17,913) | | | (15,035) |
Total | | | $93,500 | | | $99,136 |
(1) | Corporate primarily includes corporate overhead costs, such as payroll and benefits, business insurance, information technology, office costs, outside professional services and travel costs, and certain other amounts that are not allocated to the reportable segments. |
| | June 30, 2023 | | | December 31, 2022 | |
Assets: | | | | | ||
Alabama | | | $42,089 | | | $32,840 |
Atlanta | | | 81,421 | | | 83,343 |
Charlotte | | | 24,607 | | | 17,659 |
Nashville | | | 30,436 | | | 25,921 |
Raleigh | | | 31,299 | | | 28,900 |
Segment total | | | 209,852 | | | 188,663 |
Corporate (1) | | | 15,711 | | | 34,709 |
Total | | | $225,563 | | | $223,372 |
| | September 30, 2023 | | | December 31, 2022 | |
Assets: | | | | | ||
Alabama | | | $55,276 | | | $32,840 |
Atlanta | | | 85,842 | | | 83,343 |
Charlotte | | | 25,095 | | | 17,659 |
Houston(1) | | | 88,768 | | | — |
Nashville | | | 28,479 | | | 25,921 |
Raleigh | | | 31,203 | | | 28,900 |
Segment total | | | 314,663 | | | 188,663 |
Corporate(2) | | | 14,813 | | | 34,709 |
Total | | | $329,476 | | | $223,372 |
(1) | Balance includes goodwill of ~$16.5 million resulting from the acquisition of Devon Street Homes LP. |
(2) | Corporate primarily includes cash and cash equivalents, property and equipment, and other assets that are not allocated to the segments. |
Cash consideration(1) | | | $74,868 |
Seller note payable | | | 5,000 |
Contingent consideration(2) | | | 3,000 |
Total estimated consideration to be paid | | | $82,868 |
(1) | The cash consideration was funded by $2.9 million of cash on hand and $72.0 million of draws on the Company’s Credit Facility. |
(2) | The contingent consideration represents management’s preliminary estimate of the fair value of the future payment to be made to the former owner of Devon Street under the terms of the Gross Margin Earnout feature included in the executed Asset Purchase Agreement for the Devon Street acquisition. Per the terms of the Gross Margin Earnout feature, the seller is entitled to receive a one-time payment in the first quarter of 2025 based on the newly established Houston division’s gross margin (as defined) for the year ending December 31, 2024. The payout will be determined in accordance with the Gross Margin Calculation Payout Grid and ranges from a minimum of zero to a maximum of $5.0 million. |
Real estate inventory | | | $60,216 |
Deposits on real estate under option or contract | | | 7,193 |
Property and equipment, net | | | 69 |
Goodwill | | | 16,465 |
Other assets | | | 324 |
Accounts payable | | | (857) |
Customer deposits | | | (181) |
Accrued expenses and other liabilities | | | (361) |
Fair value of consideration transferred | | | $82,868 |
| | Pro forma for the nine months ended September 30, | ||||
| | 2023 | | | 2022 | |
Home closing revenue | | | $594,591 | | | $613,641 |
Net income | | | $94,024 | | | $104,952 |
Asset or liability | | | Fair value hierarchy | | | Fair value (in thousands) | |||
| September 30, 2023 | | | December 31, 2022 | |||||
Measured at fair value on a recurring basis: | | | | | | | |||
Contingent consideration | | | Level 3 | | | $3,035 | | | $— |
| | | | | | ||||
Disclosed at fair value: | | | | | | | |||
Borrowings under Credit Facility | | | Level 2 | | | $71,000 | | | $15,000 |
Seller note payable | | | Level 2 | | | $5,000 | | | $— |
Assets | | | |
Cash | | | $17,030,181 |
Real estate inventories (note 3) | | | 56,054,672 |
Other assets | | | 171,968 |
Furniture and equipment, net | | | 239,398 |
Total assets | | | $73,496,219 |
| | ||
Liabilities and Partners' Equity | | | |
| | ||
Liabilities: | | | |
Accounts payable and accrued liabilities | | | $2,220,852 |
Customer deposits | | | 203,845 |
Construction loans (note 4) | | | 261,474 |
Lot loans (note 4) | | | 16,975,158 |
Total liabilities | | | 19,661,329 |
Partners' equity | | | 53,834,890 |
Total liabilities and partners' equity | | | $73,496,219 |
Revenues | | | $107,887,747 |
Cost of sales | | | 77,369,809 |
Indirect construction costs | | | 3,020,376 |
Total cost of sales | | | 80,390,185 |
Gross profit | | | 27,497,562 |
Operating expenses: | | | |
Selling, general and administrative expenses | | | 7,525,825 |
Depreciation expense | | | 113,924 |
Interest expense | | | 460,266 |
Total operating expenses | | | 8,100,015 |
Income from operations | | | 19,397,547 |
Other income | | | 117,390 |
Income before provision for Texas franchise tax | | | 19,514,937 |
Texas franchise tax | | | 192,778 |
Net income | | | $19,322,159 |
| | General Partner | | | Limited Partners | | | Total | |
Balance - January 1, 2022 | | | $402,770 | | | $39,938,786 | | | $40,341,556 |
Partner distributions | | | (58,288) | | | (5,770,537) | | | (5,828,825) |
Net income | | | 193,222 | | | 19,128,937 | | | 19,322,159 |
Balance - December 31, 2022 | | | $537,704 | | | $53,297,186 | | | $53,834,890 |
Cash flows from operating activities: | | | |
Net income | | | $19,322,159 |
Adjustments to reconcile net income to net cash provided by operating activities: | | | |
Depreciation | | | 113,924 |
Changes in assets and liabilities: | | | |
(Increase) decrease in: | | | |
Real estate inventories | | | (2,540,608) |
Other assets | | | 244,015 |
Increase (decrease) in: | | | |
Accounts payable and accrued liabilities | | | (1,802,359) |
Customer deposits | | | (368,129) |
Net cash provided by operating activities | | | 14,969,002 |
Cash flows from investing activities: | | | |
Purchases of furniture and equipment | | | (37,105) |
Net cash used in investing activities | | | (37,105) |
| | ||
Cash flows from financing activities: | | | |
Net proceeds from (payments on) construction loans | | | (4,662,400) |
Net proceeds from lot loans | | | 4,864,228 |
Partner distributions | | | (5,828,825) |
Net cash used in financing activities | | | (5,626,997) |
Net increase (decrease) in cash | | | 9,304,900 |
Cash - beginning | | | 7,725,281 |
Cash - ending | | | $17,030,181 |
Balance, beginning of year | | | $217,474 |
Accruals during the year | | | 269,010 |
Payments during the year | | | (63,975) |
Reversal of accruals | | | (198,120) |
Balance, end of year | | | $224,389 |
| | Ending | | | Beginning | |
Customer deposits | | | $203,845 | | | $571,974 |
Completed homes and inventory lots | | | $460,266 |
Capitalized interest - sold homes | | | 283,439 |
Capitalized interest - inventory homes and lots | | | 97,664 |
Model homes | | | 27,324 |
Total interest | | | $868,693 |
Interest income | | | $2,360 |
Miscellaneous | | | 115,030 |
Total other income | | | $117,390 |
Completed: | | | | | ||
Under contract for sale | | | $1,378,822 | | ||
Unsold | | | 4,026,747 | | ||
Models | | | 2,153,547 | | ||
Under construction: | | | | |||
Under contract for sale | | | 9,664,595 | | ||
Unsold | | | 14,594,062 | | ||
Models | | | 345,627 | | ||
Improved lots | | | 17,020,317 | | ||
Indirect construction costs | | | 1,979,205 | | ||
Lot option deposits | | | 4,891,750 | | ||
Total real estate inventories | | | $56,054,672 | |
| | Total Line Commitment | | | Total Commitment Used | | | Outstanding Balance | | | Residential Inventory Collateral | | | Interest Rate | | | Line Maturity Date | |
| | $25,000,000 | | | $5,323,794 | | | $2,887,365 | | | $7,394,247 | | | 7.5% | | | 4/24/2024 | |
| | 25,000,000 | | | 6,058,610 | | | 7,199,669 | | | 12,081,403 | | | 7.5% | | | 12/21/2024 | |
| | 20,000,000 | | | 6,772,425 | | | 5,350,825 | | | 9,381,000 | | | 7.5% | | | 9/17/2023 | |
| | 7,000,000 | | | 2,636,197 | | | 1,798,773 | | | 2,636,197 | | | 7.5% | | | 7/25/2023 | |
Total | | | $77,000,000 | | | $20,791,026 | | | $17,236,632 | | | $31,492,847 | | | | |
| | $ | |
| | ||
| | ||
| | ||
| | $ |
| | Ending | | | Beginning | |
Customer deposits | | | $203,845 | | | $571,974 |
Completed homes and inventory lots | | | $460,266 |
Capitalized interest - sold homes | | | 283,439 |
Capitalized interest - inventory homes and lots | | | 97,664 |
| | ||
Total | |||
| | $ |
Interest income | | | $2,360 |
Miscellaneous | | | 115,030 |
Total other income | | | $117,390 |
| | | | |||
Under contract for sale | | | $ | | ||
| | | ||||
Models | | | 2,153,547 | | ||
Under construction: | | | | |||
Under contract for sale | | | 9,664,595 | | ||
Unsold | | | 14,594,062 | | ||
Models | | | 345,627 | | ||
Improved lots | | | 17,020,317 | | ||
Indirect construction costs | | | | |||
| | |||||
| ||||||
Total | ||||||
| | $ | |
| | Total Line Commitment | | | Total Commitment Used | | | Outstanding Balance | | | Residential Inventory Collateral | | | Interest Rate | | | Line Maturity Date | |
| | $25,000,000 | | | $5,323,794 | | | $2,887,365 | | | $7,394,247 | | | 7.5% | | | 4/24/2024 | |
| | 25,000,000 | | | 6,058,610 | | | 7,199,669 | | | 12,081,403 | | | 7.5% | | | 12/21/2024 | |
| | 20,000,000 | | | 6,772,425 | | | 5,350,825 | | | 9,381,000 | | | 7.5% | | | 9/17/2023 | |
| | 7,000,000 | | | 2,636,197 | | | 1,798,773 | | | 2,636,197 | | | 7.5% | | | 7/25/2023 | |
Total | | | $77,000,000 | | | $20,791,026 | | | $17,236,632 | | | $31,492,847 | | | | |
| | General Partner | | | Limited Partners | | | Total | |
Balance - January 1, 2023, audited | | | $537,704 | | | $53,297,186 | | | $53,834,890 |
Partner distributions | | | (55,585) | | | (5,502,934) | | | (5,558,519) |
Net income | | | 49,856 | | | 4,935,698 | | | 4,985,554 |
Balance - June 30, 2023, reviewed | | | $531,975 | | | $52,729,950 | | | $53,261,925 |
Balance, beginning of | | | $ |
Accruals during the | | | |
Payments during the | | | |
Reversal of accruals | | | ( |
Balance, end of | | | $ |
| | Ending | | | Beginning | |
Customer deposits - June 30, 2023 | | | $173,694 | | | $203,845 |
Customer deposits - December 31, 2022 | | | $203,845 | | | $571,974 |
| | Ending | | | Beginning | |
Customer deposits | | | $203,845 | | | $571,974 |
Completed homes and inventory lots | | | $ |
Capitalized interest - sold homes | | | |
Capitalized interest - inventory homes and lots | | | |
Model homes | | | |
Total interest | | | $ |
Interest income | | | $2,360 |
Miscellaneous | | | 115,030 |
Total other income | | | $117,390 |
Completed: | | | | | ||
Under contract for sale | | | $ | | ||
Unsold | | | | |||
Models | | | | |||
Under construction: | | | | |||
Under contract for sale | | | | |||
Unsold | | | | |||
Models | | | | |||
Improved lots | | | | |||
Indirect construction costs | | | | |||
Lot option deposits | | | | |||
Total real estate inventories | | | $ | |
| | Total Line Commitment | | | Total Commitment Used | | | Outstanding Balance | | | Residential Inventory Collateral | | | Interest Rate | | | Line Maturity Date | |
| | $25,000,000 | | | $5,448,573 | | | $5,367,369 | | | $7,581,820 | | | 8.25% | | | 4/24/2025 | |
| | 25,000,000 | | | 7,887,573 | | | 6,599,425 | | | 10,352,055 | | | 8.25% | | | 12/21/2024 | |
| | 20,000,000 | | | 2,488,910 | | | 1,771,140 | | | 1,771,140 | | | 8.25% | | | 9/17/2023 | |
| | 7,000,000 | | | 7,072,875 | | | 7,072,875 | | | 10,379,488 | | | 8.00% | | | 7/25/2023 | |
Total | | | $77,000,000 | | | $22,897,931 | | | $20,810,809 | | | $30,084,503 | | | | |
| | Total Line Commitment | | | Total Commitment Used | | | Outstanding Balance | | | Residential Inventory Collateral | | | Interest Rate | | | Line Maturity Date | |
| | $25,000,000 | | | $5,323,794 | | | $2,887,365 | | | $7,394,247 | | | 7.5% | | | 4/24/2024 | |
| | 25,000,000 | | | 6,058,610 | | | 7,199,669 | | | 12,081,403 | | | 7.5% | | | 12/21/2024 | |
| | 20,000,000 | | | 6,772,425 | | | 5,350,825 | | | 9,381,000 | | | 7.5% | | | 9/17/2023 | |
| | 7,000,000 | | | 2,636,197 | | | 1,798,773 | | | 2,636,197 | | | 7.5% | | | 7/25/2023 | |
Total | | | $77,000,000 | | | $20,791,026 | | | $17,236,632 | | | $31,492,847 | | | | |
Interest and financing costs paid | | | $868,693 |
Interest and financing costs capitalized | | | $381,103 |
Texas franchise taxes paid | | | $150,000 |
Assets | | | |
Cash | | | $16,172,100 |
Real estate inventories (note 3) | | | 60,390,979 |
Other assets | | | 102,922 |
Furniture and equipment, net | | | 310,118 |
Total assets | | | $76,976,119 |
| | ||
Liabilities and Partners' Equity | | ||
| | ||
Liabilities: | | | |
Accounts payable and accrued liabilities | | | $2,729,691 |
Customer deposits | | | 173,694 |
Construction loans (note 4) | | | 271,051 |
Lot loans (note 4) | | | 20,539,758 |
Total liabilities | | | 23,714,194 |
Partners' equity | | | 53,261,925 |
Total liabilities and partners' equity | | | $76,976,119 |
Revenues | | | $41,059,664 |
Cost of sales | | | 31,012,919 |
Indirect construction costs | | | 1,138,080 |
Total cost of sales | | | 32,150,999 |
Gross profit | | | 8,908,665 |
| | ||
Operating expenses: | | | |
Selling, general and administrative expenses | | | 3,366,688 |
Depreciation expense | | | 52,689 |
Interest expense | | | 580,483 |
Total operating expenses | | | 3,999,860 |
Income from operations | | | 4,908,805 |
Other income | | | 125,773 |
Income before provision for Texas franchise tax | | | 5,034,578 |
Texas franchise tax | | | 49,024 |
Net income | | | $4,985,554 |
| | General Partner | | | Limited Partners | | | Total | |
Balance - January 1, 2023, audited | | | $537,704 | | | $53,297,186 | | | $53,834,890 |
Partner distributions | | | (55,585) | | | (5,502,934) | | | (5,558,519) |
Net income | | | 49,856 | | | 4,935,698 | | | 4,985,554 |
Balance - June 30, 2023, reviewed | | | $531,975 | | | $52,729,950 | | | $53,261,925 |
Cash flows from operating activities: | | | |
Net income | | | $4,985,554 |
Adjustments to reconcile net income to net cash provided by operating activities: | | | |
Depreciation | | | 52,689 |
Changes in assets and liabilities: | | | |
(Increase) decrease in: | | | |
Real estate inventories | | | (4,336,307) |
Other assets | | | 69,046 |
Increase (decrease) in: | | | |
Accounts payable and accrued liabilities | | | 508,839 |
Customer deposits | | | (30,151) |
Net cash provided by operating activities | | | 1,249,670 |
Cash flows from financing activities: | | | |
Purchases of furniture and equipment | | | (123,409) |
Net cash used in investing activities | | | (123,409) |
Cash flows from investing activities: | | | |
Net proceeds from construction loans | | | 9,577 |
Net proceeds from lot loans | | | 3,564,600 |
Partner distributions | | | (5,558,519) |
Net cash used in financing activities | | | (1,984,342) |
Net decrease in cash | | | (858,081) |
Cash - beginning | | | 17,030,181 |
Cash - ending | | | $16,172,100 |
Balance, beginning of period | | | $224,389 |
Accruals during the period | | | 126,444 |
Payments during the period | | | (46,581) |
Reversal of accruals | | | (115,266) |
Balance, end of period | | | $188,986 |
| | Ending | | | Beginning | |
Customer deposits - June 30, 2023 | | | $173,694 | | | $203,845 |
Customer deposits - December 31, 2022 | | | $203,845 | | | $571,974 |
Completed homes and inventory lots | | | $580,483 |
Capitalized interest - sold homes | | | 186,609 |
Capitalized interest - inventory homes and lots | | | 82,633 |
Model homes | | | 19,406 |
Total interest | | | $869,131 |
Completed: | | | |
Under contract for sale | | | $2,820,151 |
Unsold | | | 3,477,151 |
Models | | | 2,519,946 |
Under construction: | | | |
Under contract for sale | | | 9,405,674 |
Unsold | | | 11,946,680 |
Models | | | 203,616 |
Improved lots | | | 23,913,053 |
Indirect construction costs | | | 2,095,162 |
Lot option deposits | | | 4,009,546 |
Total real estate inventories | | | $60,390,979 |
| | Total Line Commitment | | | Total Commitment Used | | | Outstanding Balance | | | Residential Inventory Collateral | | | Interest Rate | | | Line Maturity Date | |
| | $25,000,000 | | | $5,448,573 | | | $5,367,369 | | | $7,581,820 | | | 8.25% | | | 4/24/2025 | |
| | 25,000,000 | | | 7,887,573 | | | 6,599,425 | | | 10,352,055 | | | 8.25% | | | 12/21/2024 | |
| | 20,000,000 | | | 2,488,910 | | | 1,771,140 | | | 1,771,140 | | | 8.25% | | | 9/17/2023 | |
| | 7,000,000 | | | 7,072,875 | | | 7,072,875 | | | 10,379,488 | | | 8.00% | | | 7/25/2023 | |
Total | | | $77,000,000 | | | $22,897,931 | | | $20,810,809 | | | $30,084,503 | | | | |
Interest and financing costs paid | | | $869,131 |
Interest and financing costs capitalized | | | $269,242 |
Texas franchise taxes paid | | | $195,000 |
J.P. Morgan | BofA Securities | RBC Capital Markets | Wells Fargo Securities |
Wolfe | Nomura Alliance |
Wedbush Securities | | | Fifth Third Securities | | | Regions Securities LLC | | | Whelan Advisory Capital Markets |
Item 13. | Other expenses of issuance and distribution. |
SEC registration fee | | | $11,020* |
FINRA filing fee | | | 15,500* |
Exchange listing fee | | | 25,000* |
Printing and engraving expenses | | | * |
Legal fees and expenses | | | * |
Accounting fees and expenses | | | * |
Transfer agent fees and expenses | | | * |
Miscellaneous fees and expenses | | | * |
Total | | | $* |
* | To be provided by amendment. |
Item 14. | Indemnification of directors and officers. |
Item 15. | Recent sales of unregistered securities. |
Item 16. | Exhibits and financial statements. |
Exhibit No. | | | |
| | Form of Underwriting Agreement. | |
| | Asset Purchase Agreement, dated July 31, 2023, by and among SDH Houston LLC, Devon Street Homes, L.P., Devon Street Homes G.P., L.L.C., and John Stephen Ray, The BRR 2022 Trust U/T/A dated April 20, 2022, The CAR 2022 Trust U/T/A dated April 20, 2022 and The TTR 2022 Trust U/T/A dated April 20, 2022. | |
| | Certificate of Incorporation of Smith Douglas Homes Corp., as in effect prior to the consummation of the Transactions. | |
| | Form of Amended and Restated Certificate of Incorporation of Smith Douglas Homes Corp., to be in effect upon the consummation of the Transactions. | |
| | Bylaws of Smith Douglas Homes Corp., as in effect prior to the consummation of the Transactions. | |
| | Form of Amended and Restated Bylaws of Smith Douglas Homes Corp. to be in effect upon the consummation of the Transactions. | |
| | Specimen Class A Common Stock Certificate of Smith Douglas Homes Corp. | |
5.1*** | | | Opinion of Latham & Watkins LLP. |
10.1***† | | | Form of Amended Credit |
| | Form of Tax Receivable Agreement, to be effective upon the consummation of the Transactions. | |
| | Form of LLC Agreement of Smith Douglas Holdings LLC, to be effective upon the consummation of the Transactions. | |
| | Form of Registration Rights Agreement, to be effective upon the consummation of the Transactions. | |
| | Form of 2023 Incentive Award Plan. | |
| | Form of Stock Option Grant Notice and Stock Option Agreement under the 2023 Incentive Award Plan. | |
| | Form of Restricted Stock Unit Award Grant Notice and Restricted Stock Unit Award Agreement under the 2023 Incentive Award Plan. | |
| | Form of Non-Employee Director Compensation Program. | |
| | Form of Indemnification Agreement. | |
10.10#*** | | | Employment Agreement by and among Smith Douglas Homes Corp., Smith Douglas Holdings LLC, SDH Management Services LLC and Gregory S. Bennett, to be effective upon the consummation of the |
10.11#*** | | | Employment Agreement by and among Smith Douglas Homes Corp., Smith Douglas Holdings LLC, SDH Management Services LLC and Thomas L. Bradbury, to be effective upon the consummation of the |
10.12#*** | | | Employment Agreement by and among Smith Douglas Homes Corp., Smith Douglas Holdings LLC, SDH Management Services LLC and Russell Devendorf, to be effective upon the consummation of the |
10.13#*** | | | Employment Agreement by and among Smith Douglas Homes Corp., Smith Douglas Holdings LLC, SDH Management Services LLC and Brett A. Steele, to be effective upon the consummation of the |
| | Letter regarding change in certifying accountant. | |
| | List of Subsidiaries. | |
| | Consent of Ernst & Young LLP, as to Smith Douglas Homes Corp. | |
| | Consent of Ernst & Young LLP, as to Smith Douglas Holdings LLC. | |
| | Consent of Doeren Mayhew & Co., P.C., as to Devon Street Homes, L.P. | |
23.4*** | | | Consent of Latham & Watkins LLP (contained in its opinion filed as Exhibit 5.1 hereto). |
| | Consent of John Burns Research and Consulting, LLC. | |
| | Power of Attorney (included on the signature page of the initial filing of the Registration Statement). | |
| | Consent of Neill B. Faucett, to be named as Director Nominee. | |
| | Consent of George Ervin Perdue III, to be named as Director Nominee. | |
| | Consent of Janice E. Walker, to be named as Director Nominee. | |
| | Filing Fee Table. |
* | Filed herewith |
** | Previously filed |
*** | To be filed by amendment |
# | Indicates management contract or compensatory plan |
† | Certain portions of this exhibit (indicated by “[***]”) have been omitted pursuant to Regulation S-K, Item (601)(b)(10). The Registrant undertakes to furnish supplemental copies including the omitted portions upon request by the SEC. |
^ | Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Registrant undertakes to furnish supplemental copies of any of the omitted schedules upon request by the SEC. |
Item 17. | Undertakings. |
(h) | The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser. |
(i) | Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of Smith Douglas Homes Corp. pursuant to the foregoing provisions, or otherwise, Smith Douglas Homes Corp. has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by Smith Douglas Homes Corp. of expenses incurred or paid by a director, officer or controlling person of Smith Douglas Homes Corp. in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, Smith Douglas Homes Corp. will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction, the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. |
(j) | The undersigned hereby further undertakes that: |
(1) | For purposes of determining any liability under the Securities Act the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by Smith Douglas Homes Corp. pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. |
(2) | For the purpose of determining any liability under the Securities Act each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| | Smith Douglas Homes Corp. | ||||
| | | | |||
| | By: | | | /s/Gregory S. Bennett | |
| | Name: | | | Gregory S. Bennett | |
| | Title: | | | President, Chief Executive Officer, Vice Chairman, and Director |
Signature | | | Title | |
| | | ||
/s/Gregory S. Bennett | | | President, Chief Executive Officer, Vice Chairman, and Director (Principal Executive Officer) | |
Gregory S. Bennett | | | ||
| | | ||
/s/Russell Devendorf | | | Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | |
Russell Devendorf | | | ||
| | | ||
* | | | Executive Chairman and Director | |
Thomas L. Bradbury | | | ||
| | | ||
* | | | Director | |
Julie Bradbury | | | ||
| | | ||
* | | | Director | |
Jeffrey T. Jackson | | | ||
| | | ||
* | | | Director | |
Neil B. Wedewer | | |
*By: | | | /s/ Gregory S. Bennett | | | |
| | Gregory S. Bennett | | | ||
| | Attorney-in-fact | | |