Company: SDHC
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001982518-25-000020
Chunk: 49

Company: Smith Douglas Homes Corp.
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 1
Chunk 49
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consolidated entities increased 

33

slightly from the three months ended March 31, 2024, due to slightly 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. Our interest expense remained constant at $0.7 million for both of the three months ended March 31, 2025 and March 31, 2024. 

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 March 31, 2025, other expense (income), net decreased by $0.5 million from $2,000 to $0.5 million, which was primarily driven by a $0.7 million lot option contract abandonment charge during the three months ended March 31, 2025, while there were no such charges in the same period of the prior year, as well as an increase in interest income 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)

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