Company: SDHC
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001628280-25-049591
Chunk: 108

Company: Smith Douglas Homes Corp.
Filing Date: 2025-11-05
Form: 10-Q
Item: Part I, Item 8
Chunk 108
---
. For the three and nine months ended September 30, 2025, equity in income from unconsolidated entities increased $0.2 million and $0.7 million, respectively, from the three and nine months ended September 30, 2024, in each case primarily due to higher title insurance revenue generated by the title company.

Interest expense

Interest expense is comprised of interest incurred, but not capitalized on our Prior Credit Facility, Amended Credit Facility, other borrowings, and amortization of debt issuance costs. For the three and nine months ended September 30, 2025, interest expense increased $0.3 million and $0.4 million, respectively, from the three and nine months ended September 30, 2024, in each case primarily due to higher outstanding borrowings on our Amended Credit Facility.

Other expense (income), net

Other expense (income), net primarily consists of interest income, credit card rebates, insurance settlements, changes in fair value of contingent consideration related to the Devon Street Homes Acquisition, and other miscellaneous income and expenses. For the three months ended September 30, 2025, other expense (income), net reflected a negative impact of $1.6 million from the three months ended September 30, 2024, which was primarily due to a $1.6 million lot option contract abandonment charge for the three months ended September 30, 2025, while there were no such charges in the same period of the prior year. For the nine months ended September 30, 2025, other expense (income), net reflected a negative impact of $1.0 million from the nine months ended September 30, 2024, which was primarily due to the $2.3 million lot option contract abandonment charge during the nine months ended September 30, 2025, which did not occur in 2024, offset by a positive impact due to remeasurement of contingent liability charges of $1.3 million during the nine months ended September 30, 2024, which did not recur in 2025.

Provision for income taxes

After consummation of the IPO, Smith Douglas Homes Corp. became subject to U.S. federal, state, and local income taxes with respect to its allocable share of taxable income of Smith Douglas Holdings LLC assessed at the prevailing corporate tax rates. Smith Douglas Holdings LLC operates as a limited liability company and is treated as a partnership for income tax purposes. Accordingly, it incurs no