Company: UHG
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001830188-25-000012
Chunk: 92

Company: United Homes Group, Inc.
Filing Date: 2025-03-14
Form: 10-K
Item: Item 7
Chunk 92
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 year ended December 31, 2023.

Cancellation Rate: The cancellation rate is the total cancellations during the period divided by the total number of new sales for homes during the period. The cancellation rate for the year ended December 31, 2024 was 11.4%, a decrease of 2.2%, from 13.6% for the year ended December 31, 2023.

Backlog: Backlog consists of homes sold but not yet closed with customers. Backlog represents the number of homes in backlog from the previous period plus sales of homes during the current period less cancellations of existing sales contracts and home closings during the current period. A portion of the homes in backlog will not result in homes delivered due to cancellations. Backlog for the year ended December 31, 2024 was 157 units, a decrease of 32 units, or 16.9%, from 189 units for the year ended December 31, 2023.

Non-GAAP Financial Measures

Adjusted Gross Profit

Adjusted gross profit is a non-GAAP financial measure used by management of the Company as a supplemental measure in evaluating operating performance. The Company defines adjusted gross profit as gross profit excluding the effects of capitalized interest expensed in cost of sales, amortization included in homebuilding cost of sales (primarily adjustments resulting from the application of purchase accounting in connection with acquisitions), severance expense in cost of sales, abandoned project costs, and non-recurring remediation costs. The Company’s management believes this information is meaningful because it separates the impact that capitalized interest and non-recurring costs directly expensed in cost of sales have on gross profit to provide a more specific measurement of the Company’s gross profits. However, because adjusted gross profit information excludes certain balances expensed in cost of sales, which have real economic effects and could impact the Company’s results of operations, the utility of adjusted gross profit information as a measure of the Company’s operating performance may be limited. Other companies may not calculate adjusted gross profit information in the same manner that the Company does. Accordingly, adjusted gross profit information should be considered only as a supplement to gross profit information as a measure of the Company’s performance.

The following table presents a reconciliation of adjusted gross profit to the GAAP financial measure of gross profit for each of the periods indicated.

Year Ended December 31,20242023Revenue, net of sales discounts$463,714,017 $421,474,101 Cost of sales383,883,751 341,