Company: SDHC
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001628280-25-049591
Chunk: 144

Company: Smith Douglas Homes Corp.
Filing Date: 2025-11-05
Form: 10-Q
Item: Part I, Item 2
Chunk 144
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1)6.2%13.6%7.2%12.1%EBITDA margin(1)7.4%14.7%8.3%13.2%Adjusted EBITDA margin(1)8.5%15.0%9.1%13.7%

(1)Calculated as a percentage of home closing revenue.

Our EBITDA and EBITDA margin decreased from the three and nine months ended September 30, 2024 to the same periods in 2025, primarily as a result of decreases in net income of $21.6 million and $31.7 million, respectively. Our adjusted EBITDA and adjusted EBITDA margin decreased from the three and nine months ended September 30, 2024 to the same periods in 2025, primarily as a result of decreases in net income of $21.6 million and $31.7 million, respectively, real estate inventory impairment and lot option contract abandonment charges during the three and nine months ended September 30, 2025, which did not occur in 2024, and remeasurement of contingent consideration liability related to the Devon Street Homes Acquisition during the three and nine months ended September 30, 2024 which did not recur in 2025.

Net debt-to-net book capitalization

Net debt-to-net book capitalization is a supplemental measure of our leverage that is not required by, or presented in accordance with, GAAP and should not be considered as an alternative to debt-to-book capitalization or any other measure derived in accordance with GAAP. We caution investors that amounts presented in accordance with our definition of net debt-to-net book capitalization may not be comparable to similar measures disclosed by our competitors because not all companies and analysts calculate this non-GAAP financial measure in the same manner. We present this non-GAAP financial measure because we consider it to be an important supplemental measure of our leverage and believe it is frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry.

We define net debt-to-net book capitalization as:

•Total debt, less cash and cash equivalents, divided by

•Total debt, less cash and cash equivalents, plus equity.

This non-GAAP financial measure has limitations as an analytical tool in that it subtracts cash and cash equivalents and therefore may imply that the Company has less debt than the most comparable measure determined in accordance with GAAP. Because of this limitation, this non-GAAP financial measure