The following is a summary of the Smith Douglas Homes Corp. (SDHC) Q1 2024 Earnings Call Transcript:

Financial Performance:

• Smith Douglas Homes reported Q1 pre-tax income of $21.4 million and $0.33 per diluted share.

• Home sales revenue was $189 million due to a 13% increase in deliveries.

• Gross margin was 26.1% for the quarter, driven by the company's focus on affordable housing segments.

• The average sales price of homes was $334,000 for the quarter.

• Net income was $20.5 million, reflecting an effective tax rate of 4.3%.

Business Progress:

• The rise in mortgage rates has led to an increase in new home buyers, specifically in the affordable housing segment.

• Smith Douglas Homes operates on a land lot strategy with 95% of lots controlled via option agreements.

• The company has seen consistent sales and traffic trends throughout Q1.

• The company is planning to extend its efficient homebuilding style to other Southeast markets and has already expanded into Central Georgia, Houston County, and Chattanooga, Tennessee.

• The company intends to operate in more communities to expand its footprint and reach a larger customer base.

• Smith Douglas Homes expects the margin to be around 26% or more for Q2 despite anticipating margin compression due to land and lot costs in an effort to increase volume.

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