Company: SDHC
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001982518-25-000020
Chunk: 96

Company: Smith Douglas Homes Corp.
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 8
Chunk 96
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 on our cash and cash equivalents.

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 significant liability for federal or state income taxes, since the taxable income or loss is passed through to its members. Provision for income taxes was $0.9 million for both the three months ended March 31, 2025 and 2024, which reflects an effective tax rate of 4.5% and 4.3%, respectively.

Net income

The following table sets forth net income by reportable segment for the periods presented (in thousands):

 Three months ended March 31, 20252024Period over period change Southeast$23,855$21,005$2,850Central7,01010,283(3,273)Segment total30,86531,288(423)Other(1)(12,155)(10,802)(1,353)Total$18,710$20,486$(1,776)

(1)Other primarily includes homebuilding operations in non-reportable segments, 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.

Net income for the three months ended March 31, 2025 decreased by $1.8 million, or 9% from the same period of the prior year. The decrease was primarily due to an increase of $5.5 million in selling, general and administrative costs, partially offset by an increase of $4.1 million in home closing gross profit. 

Southeast: The $2.9 million increase in net income for the three months ended March 31, 2025 compared to the same period in the prior year was primarily due to an increase in home closing revenue and gross profit due to an increase in homes closed of 32% and an increase in ASP of homes closed of 1%, partially offset by an increase in selling, general, and administrative costs.

Central: The $3.3 million decrease in net income for the three months ended March 31, 2025 compared to the same period in the prior year was