Company: SDHC
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001982518-25-000064
Chunk: 94

Company: Smith Douglas Homes Corp.
Filing Date: 2025-08-06
Form: 10-Q
Item: Part I, Item 8
Chunk 94
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 $116,000 and $131,000, respectively, which is included in selling, general and administrative costs in the accompanying unaudited condensed consolidated statements of income. The unamortized compensation cost related to PSUs of approximately $1.3 million as of June 30, 2025 is expected to be recognized over a weighted-average period of approximately 2.72 years. There were no PSUs granted during the six months ended June 30, 2024.

Note 12 - Income taxes and tax receivable agreement:

Smith Douglas Homes Corp. is taxed as a subchapter C corporation and is subject to federal and state income taxes. Smith Douglas Homes Corp.’s sole material asset is its ownership interest in Smith Douglas Holdings LLC, which is a limited liability company that is taxed as a partnership for U.S. federal and certain state and local income tax purposes. Smith Douglas Holdings LLC’s net taxable income and related tax credits, if any, are passed through to its members and included in the members’ tax returns. The income tax burden on the earnings taxed to the non-controlling interest holders is not reported by the Company in its unaudited condensed consolidated financial statements under U.S. GAAP.The estimated annual effective tax rate for the year ending December 31, 2025 is 4.5%. The difference between the estimated annual effective income tax rate and the U.S. federal statutory rate is primarily due to: (1) income attributable to non-controlling interests which is not taxable to Smith Douglas Homes Corp., (2) Smith Douglas Holdings LLC’s election to be taxed at the entity level, and (3) state income taxes.The Company’s income tax provision was $0.7 million and $1.6 million for the three and six months ended June 30, 2025, respectively, $1.1 million for the three months ended June 30, 2024, and $2.1 million for the period from January 11, 2024 to June 30, 2024. As the IPO occurred during the six months ended June 30, 2024, and the Company had no business transactions or activities prior to the IPO, no amounts related to the provision for income taxes were incurred for the period from January 1, 2024 to January 10, 2024.As of June 30, 2025, the Company has recorded a deferred tax asset of $9.5 million resulting from the step-up in basis allowed under Section 743(b