Company: SDHC
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001628280-25-049591
Chunk: 35

Company: Smith Douglas Homes Corp.
Filing Date: 2025-11-05
Form: 10-Q
Item: Part I, Item 1
Chunk 35
---
 reserves from new home closings532 555 1,431 1,374 Warranty claims(98)(97)(354)(339)Adjustments to pre‑existing reserves(207)(251)(695)(563)Balance, end of period$4,004 $3,311 $4,004 $3,311 

Note 8 ‑ Leases:

The Company leases certain office space and equipment for use in its operations. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. Some leases contain renewal options and, in accordance with ASC Topic 842, Leases, the lease term includes those renewals only to the extent that they are reasonably certain to be exercised.Lease cost included in the accompanying unaudited condensed consolidated statements of income as a component of selling, general and administrative costs is presented in the table below (in thousands). Three months endedSeptember 30,Nine months endedSeptember 30, 2025202420252024Operating lease costs$75 $201 $561 $540 Variable lease costs - operating$141 $98 $220 $208 The following table presents additional information about the Company’s leases (dollars in thousands): September 30,2025December 31,2024Right-of-use (ROU) assets$2,037 $3,065 Lease liabilities$2,157 $3,183 

23

ROU assets are included within other assets and lease liabilities are included within accrued expenses and other liabilities in the accompanying unaudited condensed consolidated balance sheets.

Note 9 ‑ Commitments and contingencies:

The Company is subject to certain contingent liabilities resulting from litigation, claims, and other commitments which arise in the ordinary course of business. Management and legal counsel believe that the probable resolution of such contingencies will not materially affect the financial position, results of operations, or cash flows of the Company. In the normal course of business, the Company posts letters of credit and performance and other surety bonds related to certain development obligations with local municipalities, government agencies and developers. As of September 30, 2025 and December 31, 2024, performance and surety bonds totaled $44.1 million and $32.1 million, respectively. As of September 30, 2025 and December 31, 2024, there were no outstanding letters of credit.

Note 10 - Equity:

The following table summarizes the capitalization