Company: SDHC
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001982518-25-000020
Chunk: 101

Company: Smith Douglas Homes Corp.
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 8
Chunk 101
---
 We present EBITDA, EBITDA margin, adjusted EBITDA, and adjusted EBITDA margin because we believe they provide useful information regarding the factors and trends affecting our business.

37

The following table presents a reconciliation of EBITDA, EBITDA margin, adjusted EBITDA, and adjusted EBITDA margin to the GAAP financial measure of net income and net income margin for each of the periods indicated:

Three months ended March 31,20252024Net income$18,710$20,486Capitalized interest charged to cost of home closings156721Interest expense666698Interest income(126)(78)Provision for income taxes857921Depreciation486341EBITDA$20,749$23,089Share-based payment expense612892Purchase accounting adjustments included in cost of home closings(152)119Real estate inventory impairment and lot option contract abandonment charges1,358—Adjusted EBITDA$22,567$24,100Net income margin(1)8.3%10.8%EBITDA margin(1)9.2%12.2%Adjusted EBITDA margin(1)10.0%12.7%

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

Our EBITDA and EBITDA margin decreased from the three months ended March 31, 2024 to the same period in 2025, primarily as a result of a $1.8 million decrease in net income and $0.6 million decrease in capitalized interest charge to cost of home closings. Our adjusted EBITDA and adjusted EBITDA margin decreased from the three months ended March 31, 2024 to the same period in 2025, primarily as a result of a $1.4 million increase in real estate inventory impairment and lot option contract abandonment charges.

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