Core Viewpoint - An investigation has been initiated by Levi & Korsinsky, LLP regarding potential breaches of fiduciary duty by the board of directors of United Homes Group Inc (UHG), previously known as DiamondHead Holdings Corp, for shareholders who purchased stock before March 20, 2023 [1][2]. Group 1 - The investigation focuses on whether the UHG board of directors has violated its fiduciary duties to the company's stockholders [2]. - Levi & Korsinsky, LLP is a nationally recognized law firm with expertise in prosecuting securities litigation and has successfully recovered hundreds of millions of dollars for shareholders [3].

Revenue and Sales Performance - UHG's revenue for Q3 2024 was approximately $118.6 million, a 35.2% increase from $87.7 million in Q3 2023, driven by increased home closings and higher average sales prices [191][200]. - For the nine months ended September 30, 2024, UHG generated revenue of approximately $328.9 million, compared to $304.6 million for the same period in 2023, marking an increase of 8.0% [192]. - Revenue for the nine months ended September 30, 2024 was $328.9 million, an increase from $304.6 million in 2023, representing a growth of 7.8% [226]. Home Closings and Orders - The company closed 369 homes in Q3 2024, representing a 30.4% increase from 283 homes closed in Q3 2023 [201]. - Net new orders for the three months ended September 30, 2024 were 341 units, an increase of 69 units, or 25.4%, from 272 units for the same period in 2023 [210]. - Net new orders for the nine months ended September 30, 2024 were 1,048 units, an increase of 46 units, or 4.6%, from 1,002 units in 2023 [224]. Financial Losses and Profit Margins - The company reported a net loss of approximately $7.3 million for Q3 2024, which included $7.8 million related to the change in fair value of derivative liabilities [191]. - UHG's gross profit margin for Q3 2024 was 18.9%, a decrease of 0.9% from 19.8% in Q3 2023 [200]. - The adjusted EBITDA margin for Q3 2024 was 7.6%, down from 10.0% in Q3 2023, reflecting a decrease of 2.4% [191][200]. Backlog and Inventory - UHG's backlog decreased to 220 units in Q3 2024, down 22.0% from 282 units in Q3 2023 [200]. - Backlog for the three months ended September 30, 2024 was 220 units, a decrease of 62 units, or 22.0%, from 282 units for the same period in 2023 [212]. Costs and Expenses - Cost of sales for the nine months ended September 30, 2024 was $270.8 million, an increase of $24.3 million, or 9.9%, from $246.5 million for the same period in 2023 [216]. - Selling, general and administrative expense for the three months ended September 30, 2024 was $18.7 million, an increase of $5.1 million, or 37.5%, from $13.6 million for the same period in 2023 [204]. Cash Flow and Financing - As of September 30, 2024, the company had approximately $25.8 million in cash and cash equivalents, a decrease of $30.9 million from $56.7 million as of December 31, 2023 [230]. - Net cash flows used in operating activities for the nine months ended September 30, 2024, were $12.0 million, a decrease of $57.5 million compared to $45.5 million provided in the same period of 2023 [242]. - Net cash used in financing activities for the nine months ended September 30, 2024, was $6.2 million, a decrease of $31.8 million compared to $25.6 million provided in the same period of 2023 [244]. Acquisitions and Investments - The company completed the acquisition of Creekside Custom Homes for $12.7 million, recognizing goodwill of approximately $3.6 million [198]. - The Company used $12.7 million in cash to acquire homebuilding assets of Creekside Custom Homes during the nine months ended September 30, 2024 [243]. Tax and Earnings - The company's estimated annual effective tax rate for the fiscal year ending September 30, 2024 is 17.0%, down from 26.2% for the same period in 2023 [222]. - Net income for the nine months ended September 30, 2024 was $46.2 million, a decrease of $145.5 million, or 75.9%, from $191.7 million for the same period in 2023 [213]. Market and Economic Factors - A 100 basis point increase in overall interest rates would negatively affect the Company's net income by approximately $0.7 million [254]. - The Company has not entered into derivative financial instruments for trading or speculative purposes or to hedge against interest rate fluctuations [253].

Core Viewpoint - United Homes Group, Inc. reported significant declines in profitability for the third quarter of 2024, despite strong revenue growth and increased home closings and orders [1][7][9]. Revenue Performance - United Homes registered revenues of $118.6 million in the third quarter, reflecting a 35.2% increase year over year [2]. - Home closings during the quarter were 369, up 30.4% from 283 in the same period last year [2]. - Net new home orders were 341, representing a 25.4% increase compared to 272 in the year-ago period [2]. Pricing and Sales Metrics - The average sale price (ASP) of production-built homes was approximately $320,000, a 1.3% increase from $316,000 in the previous year [3]. - The active community count as of September 30, 2024, was 55, with 8,600 lots owned or controlled by the company or related parties [3]. Profitability Analysis - Gross profit improved 28.6% year over year to $22.4 million, but gross margin contracted by 98 basis points to 18.9% [5]. - Adjusted gross margin was 20.6%, down from 22.1% in the year-ago period [5]. - The operating loss totaled $7.4 million compared to an operating profit of $152.6 million in the previous year [7]. - The net loss was $7.3 million against a net profit of $150.8 million in the year-ago quarter [7]. - Adjusted EBITDA was $8.9 million, up 2.1% from the previous year [7]. Operating Expenses - Selling, general and administrative expenses increased by 37.1% year over year to $18.7 million [6]. Liquidity Position - United Homes ended the third quarter with cash and cash equivalents of $25.8 million, slightly up from $24.9 million at the end of the second quarter [8]. Management Insights - Management indicated that the company is implementing initiatives to drive growth, reduce direct costs, and manage overhead effectively [10]. - The company is updating its product offerings to remain competitive and meet market demand [10].

Financial Data and Key Metrics Changes - For Q3 2024, the company reported a net loss of $7.3 million, influenced by a change in fair value of $7.8 million related to potential earn-out liabilities [17] - Revenue for Q3 2024 was $118.6 million, up from $87.7 million in Q3 2023, marking a significant year-over-year increase [18] - Gross profit for Q3 2024 was $22.4 million with a gross profit margin of 18.9%, compared to $17.4 million and 19.8% in Q3 2023 [20] - Average sales price for production-built homes in Q3 2024 was approximately $320,000, slightly up from $316,000 in Q3 2023 [19] Business Line Data and Key Metrics Changes - Home sales revenue grew by 35% year-over-year, with a 30% increase in new home deliveries [5] - Home closings in Q3 2024 totaled 369 homes, compared to 283 homes in Q3 2023 [19] - Net new orders for Q3 2024 were 341 homes, up from 272 homes in Q3 2023 [20] Market Data and Key Metrics Changes - The company noted steady traffic in its communities, although conversion rates were affected by mortgage rate fluctuations [6] - The backlog at the end of Q3 was 220 homes valued at approximately $79.9 million [20] Company Strategy and Development Direction - The company aims to transition from a private home builder to a production-focused builder, emphasizing affordable housing segments [8][12] - The strategy includes leveraging relationships with land bankers to maintain capital efficiency and reduce risk [14] - The focus will remain on the affordable housing market, which is seen as undersupplied and in high demand [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to adapt to market conditions and execute strategic initiatives, despite a competitive environment [16] - The favorable housing fundamentals in the Southeast are expected to provide a consistent pipeline of new home buyers [11] - The company anticipates elevated incentives for home buyers due to the current mortgage rate environment [7] Other Important Information - As of September 30, 2024, the company had 55 active communities and approximately 80,600 lots under control [23] - Total liquidity was reported at $89 million, consisting of $25.8 million in cash and $63.2 million available on the credit facility [23] Q&A Session Summary - The call concluded without a detailed Q&A session, as the operator indicated the end of the conference call [24]

Financial Performance - In Q3 2024, United Homes Group closed 369 homes, generating revenue of $118.6 million, a 35% increase from $87.7 million in Q3 2023[1][3] - Revenue for the three months ended September 30, 2024, was $118,643,955, a 35.2% increase from $87,728,091 in the same period of 2023[22] - For the nine months ended September 30, 2024, revenues were $328.9 million, compared to $304.6 million for the same period in 2023[6] - Net loss for the three months ended September 30, 2024, was $(7,339,235), a significant decrease from net income of $150,842,687 in the same period of 2023[22] - The company reported a basic loss per share of $(0.15) for the three months ended September 30, 2024, compared to earnings of $3.12 per share in the same period of 2023[22] Profitability Metrics - The gross profit percentage for Q3 2024 was 18.9%, down from 19.8% in Q3 2023, primarily due to increased sales incentives[4][7] - Gross profit for the three months ended September 30, 2024, was $22,383,027, compared to $17,410,295 in the prior year, reflecting a gross profit margin of 18.9%[22][26] - Adjusted gross profit for the three months ended September 30, 2024, was $24,480,958, with an adjusted gross profit margin of 20.6%[26] - Adjusted EBITDA for Q3 2024 was $9.0 million, slightly up from $8.8 million in Q3 2023[5][9] - Adjusted EBITDA for the three months ended September 30, 2024, was $8,978,713, reflecting a slight increase from $8,797,192 in the same period of 2023[29] - The adjusted EBITDA margin for the three months ended September 30, 2024, was 7.6%, compared to 10.0% in the same period of 2023[29] Orders and Backlog - Net new home orders increased by 25% year-over-year, totaling 341 in Q3 2024 compared to 272 in Q3 2023[2][3] - Total net new orders for the three months ended September 30, 2024, reached 341, a 25% increase from 272 in the same period of 2023[39] - The company’s total backlog inventory as of September 30, 2024, was 220 homes, with a backlog value of $79.9 million, representing a 16% increase in inventory and a 39% increase in backlog value compared to the previous year[41] Assets and Liabilities - Total assets decreased to $282,611,518 as of September 30, 2024, down from $298,647,328 at the end of 2023[21] - Total liabilities decreased to $262,822,204 as of September 30, 2024, down from $329,829,864 at the end of 2023[21] - Homebuilding debt decreased to $72,196,208 from $80,451,429 at the end of 2023[21] - Cash and cash equivalents decreased to $25,818,156 from $56,671,471 at the end of 2023[21] Equity and Retained Earnings - Total stockholders' equity for Q3 2024 was $19.8 million, with an adjusted book value of $87.7 million[2][4] - The company’s retained earnings improved to $12,257,158 as of September 30, 2024, from a deficit of $(33,981,864) at the end of 2023[21] - The company’s total stockholders' equity as of September 30, 2024, was $19,789,314, with an adjusted book value of $87,671,035 after excluding goodwill and derivative liabilities[37] Operational Expenses - SG&A expenses as a percentage of revenues were 15.8% in Q3 2024, including $1.6 million in stock-based compensation[4][8] - Adjusted SG&A for the three months ended September 30, 2024, was $16,434,672, with an adjusted SG&A percentage of 15.8%[33] - The company incurred $1,567,945 in stock-based compensation expense for the three months ended September 30, 2024[33] Market Expansion - The company plans to expand into new geographic markets focusing on positive population and employment growth trends[15] Interest and Derivative Liabilities - Interest expense in cost of sales for the three months ended September 30, 2024, was $1,524,748, slightly down from $1,531,318 in the same period of 2023[29] - The change in fair value of derivative liabilities for the three months ended September 30, 2024, was $7,784,965, compared to a loss of $(149,703,161) in the same period of 2023[29]

Financial Data and Key Metrics Changes - For Q2 2024, net income was $28.6 million, including a change in fair value of $32.1 million related to potential earnout accounting [10] - Revenue for Q2 2024 was $109.4 million, down from $122.1 million in Q2 2023 [11] - Gross profit for Q2 2024 was $19.6 million with a gross profit margin of 17.9%, down from $23.9 million and 19.6% in Q2 2023 [12] Business Line Data and Key Metrics Changes - The company delivered 337 homes in Q2 2024, generating revenue of $109 million, with the Midlands operations contributing the highest number of deliveries [6][7] - Home sales gross margin was 17.9% on a GAAP basis and 20.9% on an adjusted basis [7] - Net new home orders for Q2 2024 were 323 homes, flat year-over-year, but coastal operations saw a 59% increase and upstate operations a 44% increase [7] Market Data and Key Metrics Changes - The company ended Q2 2024 with 59 active communities, up from 53 in Q2 2024 [14] - The average sales price during Q2 2024 was approximately $341,000, compared to $313,000 in Q2 2023 [11] Company Strategy and Development Direction - The company is focused on acquiring lots in a capital-efficient manner and building homes in high-growth Southeastern markets, targeting affordable segments [3][5] - The strategy includes a combination of mergers and acquisitions (M&A) and organic growth, with a commitment to maintaining local builders' operations post-acquisition [5] - The company aims to improve absorption rates by focusing on slower-moving communities and adjusting product offerings [16][17] Management's Comments on Operating Environment and Future Outlook - Management noted a transition period in Q2 2024 due to consolidating acquisitions and rationalizing the workforce, which impacted results but did not alter the long-term outlook [4] - Positive homebuilding fundamentals were highlighted, including steady job growth and low inventory levels [5] - The company remains optimistic about the future, focusing on starting and selling homes to meet delivery goals [6] Other Important Information - The company had approximately 9,300 lots under control as of June 30, 2024, with a strong liquidity position of $80 million [14] - Adjusted SG&A expense for Q2 2024 was approximately $16.1 million, or 14.7% of revenue [13] Q&A Session Summary Question: Can you talk about your absorptions and strategy for improvement? - Management acknowledged current absorption rates and emphasized a focus on slower-moving communities, adjusting product and pricing strategies [15][16] Question: Can you discuss the lot count and the land market? - Management indicated a tightening of the filter for land acquisitions and noted that while they are still acquiring land, they are focusing on quality deals [18][19] Question: How is the integration of acquisitions progressing? - Management provided updates on the integration of three acquisitions, noting varying levels of progress and operational alignment [25][26] Question: Does the strategy change with interest rates coming down? - Management confirmed a continued focus on affordability and value engineering, adjusting incentives based on market conditions [27][28]

Core Insights - United Homes Group, Inc. (UHG) reported a significant decline in earnings per share, which fell to 50 cents in Q2 2024, down 88.3% from $4.27 in the same quarter last year [1] - The company experienced a decrease in revenues, totaling $109.4 million in Q2 2024, a decline of 10.4% year over year [2] - Home closings decreased to 337 units, down 12.5% from 385 units in the previous year, while net new home orders also fell to 323, down 5.3% from 341 units [2] Revenue Analysis - The average sale price (ASP) of production-built homes increased to approximately $341,000, an 8.9% rise from $313,000 in the previous year, driven by changes in product mix due to acquisitions [3] - The active community count as of June 30, 2024, was 59, with 9,300 lots owned or controlled by the company or its affiliates [4] Gross Margin and Profitability - Gross profit declined by 18.1% to $19.6 million, with gross margin contracting by 170 basis points to 17.9% due to amortization of purchase accounting adjustments, severance costs, and abandoned project costs [5] - Adjusted gross margin was reported at 20.9%, down from 21.4% in the previous year, primarily due to continued sales incentives offered to homebuyers [6] - Operating loss was recorded at $0.04 million compared to an operating profit of $7.6 million in the previous year, with net income down 88.3% to $28.6 million [8] Operating Expenses - Selling, general and administrative (SG&A) expenses increased by 20.1% to $19.6 million, with SG&A as a percentage of revenues at 17.9% [7] Liquidity and Cash Position - UHG ended Q2 2024 with cash and cash equivalents of $24.9 million, a decrease from $28.7 million at the end of the first quarter [9] Overall Assessment - The company faced disappointing top-line and bottom-line results, with declines in home closings and net new home orders, alongside gross margin contraction [10] - However, the increase in ASP for production-built homes was noted as a positive aspect during the quarter [10]

Financial Performance - In Q2 2024, United Homes Group closed 337 homes, generating revenue of $109.4 million, down from $122.1 million in Q2 2023[1][2] - Net income for Q2 2024 was $28.6 million, or $0.50 per diluted share, compared to $245.4 million, or $4.27 per diluted share in Q2 2023[2] - Total revenue for Q2 2024 was $109,420,037, a decrease of 10.4% compared to $122,091,629 in Q2 2023[16] - Gross profit for Q2 2024 was $19,577,696, down 18.1% from $23,917,480 in Q2 2023[16] - Adjusted EBITDA for Q2 2024 was $7.7 million, a decrease from $13.1 million in Q2 2023[4] - Adjusted EBITDA for Q2 2024 was $7,660,139, down from $13,109,262 in Q2 2023, reflecting a margin of 7.0% compared to 10.7% in the prior year[22] - The company reported a basic earnings per share of $0.59 for Q2 2024, down from $5.10 in Q2 2023[16] - For the six months ended June 30, 2024, revenues were $210.3 million, compared to $216.9 million for the same period in 2023[5][6] Equity and Assets - The company reported total stockholders' equity of $25.7 million and an adjusted book value of $85.6 million for Q2 2024[2] - Total stockholders' equity as of June 30, 2024, was $25,745,352, with an adjusted book value of $85,633,639 after excluding goodwill and derivative liabilities[27] - Total assets decreased to $284,032,996 as of June 30, 2024, from $298,647,328 at the end of 2023, a decline of 4.7%[15] - Total liabilities decreased to $258,287,644 as of June 30, 2024, down from $329,829,864 at the end of 2023, a reduction of 21.7%[15] - Cash and cash equivalents decreased to $24,915,782 from $56,671,471, a decline of 56.0%[15] Sales and Orders - The average sale price (ASP) of production-built homes increased to approximately $341,000, an 8.9% rise from $313,000 in Q2 2023[1][2] - The company reported a total of 323 net new orders in Q2 2024, a 5% decrease compared to 341 in Q2 2023[30] - The backlog inventory as of June 30, 2024, was 248 homes, with a total backlog value of $81.2 million, representing a 31% increase in inventory compared to 189 homes in the previous year[32] - The Upstate market saw a 44% increase in net new orders in Q2 2024, totaling 82 orders compared to 57 in Q2 2023[30] Operational Strategy - United Homes Group aims to expand into markets with positive population and employment growth trends, focusing on affordable housing segments[10] - The company plans to leverage its land-light operating strategy to mitigate risks associated with acquiring and developing raw land[9] - The company is focusing on improving operational efficiency and managing costs in response to declining revenues and profits[18] Cost Management - Gross profit as a percentage of revenue was 17.9% in Q2 2024, down from 19.6% in Q2 2023[3] - Adjusted gross profit for Q2 2024 was $22,845,124, compared to $26,077,447 in Q2 2023, reflecting a decrease of 12.8%[19] - Adjusted SG&A for Q2 2024 was $16,077,590, with an adjusted SG&A margin of 14.7%[25] - Interest expense in cost of sales decreased to $1,659,089 in Q2 2024 from $2,159,967 in Q2 2023[22] - The company incurred $1,504,416 in severance expenses during the first half of 2024[22] Market Trends - The company controlled approximately 9,300 lots as of June 30, 2024, with over 95% controlled via option agreements or land banking[1][2] - The company experienced a 31% increase in backlog value in the Coastal market, with a backlog value of $18.1 million as of June 30, 2024[32]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___ to ___ Commission File Number: 001-39936 United Homes Group, Inc. (Exact name of Registrant as specified in its charter) Delaware 85-3460766 (State or ...

United Homes Group, Inc. (NASDAQ:UHG) Q1 2024 Earnings Conference Call May 10, 2024 8:30 AM ET Company Participants Erin McGinnis - General Counsel Jack Micenko - President Shelton Twine - Chief Operating Officer Keith Feldman - Chief Financial Officer Conference Call Participants Carl Reichardt - BTIG Operator Good day, everyone and welcome to the United Homes Group First Quarter 2024 Earnings Call. [Operator Instructions] Please note this call may be recorded and I will be standing by should you need any ...