Company: SDHC
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001982518-25-000020
Chunk: 108

Company: Smith Douglas Homes Corp.
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 8
Chunk 108
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 cash used in investing activities during the three months ended March 31, 2024 was primarily due to purchases of property and equipment.

Financing activities

We generated $27.3 million and $22.7 million in net cash from financing activities for the three months ended March 31, 2025 and 2024, respectively. The net cash provided by financing activities during the three months ended March 31, 2025 was primarily due to $40.0 million in net borrowings under the Amended Credit Facility, partially offset by $13.9 million in tax distributions. The net cash provided by financing activities during the three months ended March 31, 2024 was primarily due to $116.3 million in net proceeds from the IPO and Reorganization Transactions, partially offset by $71.4 million in net repayments under the Prior Credit Facility and $16.3 million in distributions.

Material Cash Commitments

Other than with respect to the interest on the outstanding borrowings under our Amended Credit Facility, as described above, there have been no material changes to the material cash commitments described in Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report.

Off-Balance Sheet Arrangements

While using land bankers and third-party developers as part of our land-light operating strategy comes at an additional cost, we believe our lot acquisition strategy reduces our operating and financial risk relative to other homebuilders that own and develop a higher percentage of their land supply. As of March 31, 2025, we had 888 owned unstarted lots in real estate inventory on our balance sheet which represented only 4.3% of our total controlled lot supply.

Under the umbrella of our land-light strategy, we generally seek to avoid engaging in land development. Where possible, we prefer to work with third-party developers that will sell us finished lots under lot-option contracts. In situations where we cannot find a developer partner, we will work with third-party land bankers. Under these land bank arrangements, we typically assign the land or lots we have under contract to the land banker. The land banker will acquire the land or lots directly, and if land development is necessary, we will simultaneously enter into a development agreement to complete the lots for the land banker. Additionally, we will enter a lot-option contract to acquire the finished lots on a takedown to match our projected sales absorption and starts pace. Typically, we are required to put up a deposit ranging between 5-20%