Core Viewpoint - United Homes Group, Inc. (UHG) reported a mixed performance in its fourth-quarter 2024 earnings, showing revenue growth but facing challenges in profitability and market conditions [2][10]. Financial Performance - UHG reported fourth-quarter 2024 revenues of $134.8 million, a 15.4% increase from $116.8 million in the prior-year quarter [2]. - The net income for the quarter was $0.7 million, or $0.01 per diluted share, compared to a net loss of $66.6 million, or $1.38 per share, in fourth-quarter 2023 [2]. - Gross profit for the quarter was $21.8 million, with a gross margin of 16.2%, up from $21.6 million and a gross margin of 18.5% in the prior-year period [4]. - Adjusted EBITDA was $7.7 million, down 23.2% from $10 million in fourth-quarter 2023 [5]. Operational Metrics - Home closings rose 6.9% year over year to 414 compared with 387 in fourth-quarter 2023 [3]. - Net new orders increased 19.4% to 351 from 294 in the prior-year period [3]. - The backlog stood at 157 homes valued at approximately $58.3 million, a decline from 189 homes valued at $57.6 million in the prior-year period [6]. Cost Management and Strategic Initiatives - Selling, general, and administrative (SG&A) expenses were $19.3 million, up 4.9% from the prior-year quarter [5]. - UHG focused on streamlining operations by rebidding direct construction costs and launching refreshed home designs, which have shown early positive sales traction [8]. - The company anticipates that product redesigns and cost optimizations will positively impact financial performance in 2025 [10]. Market Conditions - The company faced a competitive pricing environment, with builders sacrificing gross margins for volume due to higher mortgage rates affecting affordability [7]. - The cost of mortgage buydowns increased during the quarter, reaching approximately 5% of revenue [7]. Financial Restructuring - UHG refinanced its convertible notes in December, reducing leverage by $10 million and lowering annual cash interest expenses by approximately $4 million [9]. - The refinancing included a $70 million subordinated loan with a variable interest rate indexed to SOFR plus a spread of 6.75% to 7.75% [9]. Future Outlook - UHG plans to open 11 new communities in the second quarter of 2025 and another 15 in the third quarter of 2025, supporting future revenue growth [13]. - Early sales of redesigned home plans have demonstrated stronger gross margins, contributing to improved profitability as these homes become a larger share of deliveries [11].
United Homes Stock Declines Post Q4 Earnings Despite Higher Revenues