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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
August 10, 2023
UNITED HOMES GROUP, INC.
(Exact name of registrant as specified in its
charter)
Delaware |
|
001-39936 |
|
85-3460766 |
(State or other jurisdiction of
incorporation or organization) |
|
(Commission
File Number) |
|
(I.R.S. Employer
Identification Number) |
90 N Royal Tower Drive
Irmo, South Carolina |
29063 |
(Address of principal executive offices) |
(Zip Code) |
(844) 766-4663
Registrant’s telephone number, including
area code
(Former name or former address, if changed since
last report)
Check the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligation to the registrant under any of the following provisions:
¨ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
|
Trading
Symbol(s) |
|
Name of each exchange
on which registered |
Class A Common Shares, par value $0.0001 per share |
|
UHG |
|
The
Nasdaq Stock Market LLC |
Warrants, each exercisable for one Class A Common Share for $11.50 per share |
|
UHGWW |
|
The
Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company x
If an emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant
to Section 13(a) of the Exchange Act.
Item 2.02. Results of Operations and Financial Condition
On August 10, 2023, United Homes Group, Inc.
(the “Company”) issued a press release announcing its financial results for the three and six months ended June 30, 2023.
The press release is being furnished hereto as Exhibit 99.1. The information in this Item 2.02, including the Exhibit 99.1 attached
hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference
in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference
in such filing.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits:
99.1 Press Release, dated August 10, 2023
104 Cover
page interactive data file (embedded within the Inline XBRL document)
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: August 10, 2023
|
United Homes Group, Inc. |
|
|
|
By: |
/s/ Keith Feldman |
|
Name: |
Keith Feldman |
|
Title: |
Chief Financial Officer |
Exhibit 99.1
UNITED HOMES GROUP, INC. REPORTS 2023
SECOND QUARTER RESULTS
Second Quarter 2023 Highlights
| · | Average
sale price (ASP) of production-built homes increased to $313,000 from $300,000 in Q2 2022 |
| · | 385
homes closed resulted in $122.1 million of revenues |
| · | 341
net new home orders during Q2 2023 |
| · | Backlog
value was $94.2 million as of June 30, 2023 |
| · | Active
community count of 53 as of June 30, 2023 |
| · | Approximately
8,000 lots owned or controlled by the Company or affiliates as of June 30, 2023 |
| · | Total
liquidity of $178.7 million as of June 30, 2023, comprised of $92.7 million of cash
and $86.0 million of undrawn revolver capacity under our credit facility |
| · | Subsequent
to the second quarter, closed on new credit facility for $240 million with 3-year term, increasing
liquidity by $90 million. |
COLUMBIA, SC., August 10, 2023 / United Homes Group, Inc.
(the “Company”) (NASDAQ: UHG) today announced results for the second quarter ended June 30, 2023.
Second Quarter 2023 Operating Results
For
the second quarter 2023, net income was $245.4 million, or $4.27 per diluted share, which included change in fair value of
derivative liabilities of $242.3 million, predominantly due to changes in fair value on potential earn-out consideration due to
fluctuation in the stock price during the measurement period. The earn-out consideration would be
paid in common shares upon reaching certain stock price hurdles. The Company is required to record the non-cash fair value of this
earn-out as derivative liabilities on the consolidated balance sheets until UHG shares reach certain predetermined values. Excluding
the derivative liability, our adjusted book value1 was $91.0 million. Net income for the second quarter 2022 was
$25.9 million, or $0.69 per diluted share.
“United
Homes Group produced solid results in the second quarter of 2023, generating adjusted EBITDA2 of approximately $13.1 million,”
said Michael Nieri, Chief Executive Officer of United Homes Group, “Order activity throughout the quarter was strong, and as the
mix of closings with high lumber costs started to decline, we began realizing margin expansion. Based on current market conditions and
what’s already in backlog, we expect to see further sequential margin improvement in the second half of the year.”
Keith Feldman, Chief Financial Officer commented. “Our balance
sheet is solid with approximately $93 million of cash and having recently significantly increased our line of credit to $240 million,
we have ample liquidity to execute on our various growth initiatives which include acquiring other homebuilders that complement our business.”
Mr. Nieri concluded, “We see a clear runway for growth
for well-capitalized homebuilders moving forward. Millions of existing homeowners who financed their homes with lower-rate mortgages
are staying in their existing homes, resulting in a massive supply shortage in the existing home market. I believe this creates a huge
opportunity for the homebuilding industry and especially for United Homes Group given our focus on affordability and markets with favorable
in-migration trends. We are excited for what the future holds for our company.”
Homebuilding revenues for the second quarter 2023 were $122.1 million,
compared to $142.5 million in the second quarter 2022. Home closings during the second quarter 2023 were 385 compared to 459 in the year-ago
quarter. Average sales price (“ASP”) of 376 production-built homes (which excludes nine general contractor and build for
rent homes) closed during the second quarter 2023 was $313,000, compared to $300,000 during the second quarter 2022 of 451 production-built
homes (which excludes eight general contractor and build for rent homes), representing a 4.3% increase.
Homebuilding gross profit margin during the second quarter of 2023
was 19.6% compared to 28.8% during the second quarter 2022. Homebuilding adjusted gross profit margin3 in the second quarter
2023 was 21.4%, compared to 29.2% in the second quarter 2022. UHG’s year-over-year decline in both gross profit margin and adjusted
gross profit margin can be largely attributable to the Company offering sales incentives and selling inventory with higher lumber costs
that contracted in the second half of 2022. The Company expects margins to expand throughout the year due to closings on homes with current
lumber costs and as we see price increases on new sales.
1
Adjusted book value is a non-GAAP financial measure. See “Reconciliation of Non-GAAP Financial Measures.”
2
Adjusted EBITDA is a non-GAAP financial measure. See “Reconciliation of Non-GAAP Financial Measures.”
3 Adjusted
gross profit margin is a non-GAAP financial measure. See “Reconciliation of Non-GAAP Financial Measures.”
Selling, general and administrative expenses (SG&A) as a percentage
of homebuilding revenues was 13.4% in the second quarter 2023, which included $410,530 of equity-based compensation. Excluding equity-based
compensation and transaction related expenses, SG&A for the second quarter 2023 was 12.1% of homebuilding revenues.
Adjusted
EBITDA during the second quarter 2023 was $13.1 million compared to $27.8 million during the second quarter 2022. This decrease is largely
related to fewer closings and lower gross margins as described above.
Six Months Ended June 30, 2023 Operating Results
Net income was $40.9 million, or $0.89 per diluted share, which
included change in fair value of derivative liabilities of $35.3 million predominantly due to changes in fair value on potential
earn-out consideration due to fluctuation in the stock price during the measurement period. The earn-out consideration would be paid
in common shares upon reaching certain stock price hurdles. The Company is required to record the non-cash fair value of this
earn-out as derivative liabilities on the consolidated balance sheets until UHG shares reach certain predetermined values. Net income for the six months ended 2022 was $42.9 million,
or $1.15 per diluted share.
For the six months ended June 30, 2023, homebuilding revenues
were $216.9 million, compared to $250.9 million in the same period of fiscal 2022. Home closings for the six months ended June 30,
2023 were 713 compared to 873 in the same period of fiscal 2022.
Homebuilding gross profit margin for the six months ended June 30,
2023 was 18.8% compared to 27.2% during the same period of fiscal 2022. Homebuilding adjusted gross profit margin for the six months
ended June 30, 2023 was 20.9%, compared to 27.8% for the six months ended June 30, 2022. This reduction in margin is largely
attributable to fewer closings and selling through inventory constructed with higher lumber costs.
Adjusted
EBITDA for the six months ended June 30, 2023 was $21.6 million compared to $47.1 million during the same period of fiscal
2022.
Credit Facility
In August, UHG closed a new $240 million credit
facility, replacing the previous $150 million facility, which was due to expire in June 2024. The new facility has a three-year
term, with a one-year extension option. The new facility’s covenants and reporting requirements are materially consistent with
the previous facility. Wells Fargo continues to serve as the Administrative Agent on the new facility, as the number of participating
lenders remains at five, of which, three lenders are new to the syndication group.
Earnings Conference Call
The Company will host a conference call via live webcast for
investors and other interested parties beginning at 5:00 p.m. Eastern Time on Thursday, August 10, 2023.
Interested parties can listen to the call live and view the related slides on the Internet under the Events & Presentations
heading in the Investors section of the Company’s website at www.unitedhomesgroup.com. Listeners should log into the website
at least fifteen minutes prior to the call to download and install any necessary audio software. The call can also be accessed toll
free at 888-259-6580, or 416-764-8624 for international participants, Conference ID: 29788545. Those dialing in should do so
at least ten minutes prior to the start of the call. An archive of the webcast will also be available on the Company’s
website.
About United Homes Group, Inc.
UHG is a publicly traded residential builder headquartered in Columbia,
SC. The company focuses on southeastern markets with 53 active communities in South Carolina and Georgia.
UHG employs an asset-light operating strategy with a focus on the
design, construction and sale of entry-level, first move up and second move up single-family houses. UHG currently designs, builds and
sells detached single-family homes, and, to a lesser extent, attached single-family homes, including duplex homes and town homes in three
major market regions in South Carolina: Midlands, Upstate, and Coastal, with a smaller presence in Georgia. UHG seeks to operate its
homebuilding business in high-growth markets, with substantial in-migrations and employment growth.
Under its asset-light lot operating strategy, UHG controls its supply
of finished building lots through lot purchase agreements with third parties including its Land Development Affiliates, which provide
UHG with the right to purchase finished lots after they have been developed by the applicable third party. This asset-light operating
strategy provides UHG with the ability to amass a pipeline of lots without the same risks associated with acquiring and developing raw
land.
As UHG reviews potential geographic markets into which it could expand
its homebuilding business, either organically or through strategic acquisitions, it intends to focus on selecting markets with positive
population and employment growth trends, favorable migration patterns, attractive housing affordability, low state and local income taxes,
and desirable lifestyle and weather characteristics. UHG believes that the Southeastern states generally offer these characteristics
to a greater extent than other geographic regions of the country, and expects the Southeastern states to be the principal focus of any
future expansion of its homebuilding business.
Forward-Looking Statements
Certain statements contained in this earnings release, other than
historical facts, may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933,
as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”). We intend for all such forward-looking statements to be covered by the applicable safe harbor provisions for forward-looking
statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act, as applicable. Such forward-looking
statements can generally be identified by our use of forward-looking terminology such as “may,” “will,” “expect,”
“intend,” “anticipate,” “estimate,” “believe,” “seek,” “continue,”
or other similar words.
Any such forward-looking statements are based on current expectations,
estimates and projections about the industry and markets in which we operate, and beliefs of, and assumptions made by, our management
and involve uncertainties that could significantly affect our financial results. Such statements include, but are not limited to, statements
about our future financial performance, strategy, expansion plans, future operations, future operating results, estimated revenues, losses,
projected costs, prospects, plans and objectives of management. Such statements are subject to known and unknown risks and uncertainties,
which could cause actual results to differ materially from those projected or anticipated, including, without limitation:
| · | the
outcome of any legal proceedings; |
| · | our
ability to recognize the anticipated benefits of the business combination, which may be affected
by, among other things, competition and the ability of the combined business to grow and
manage growth profitably; |
| · | changes
in applicable laws or regulations; |
| · | our
ability to execute our business model, including the success of our operations in new markets
and our ability to expand into additional new markets; |
| · | our
ability to successfully integrate homebuilding operations that we acquire; |
| · | a
slowdown in the homebuilding industry or changes in population growth rates in our markets; |
| · | volatility
and uncertainty in the credit markets and broader financial markets; |
| · | disruption
in the terms or availability of mortgage financing or an increase in the number of foreclosures
in our markets; |
| · | shortages
of, or increased prices for, labor, land or raw materials used in land development and housing
construction, including due to changes in trade policies; |
| · | delays
in land development or home construction resulting from natural disasters, adverse weather
conditions or other events outside our control; |
| · | our
ability to continue to leverage our asset-light operating strategy; |
| · | that
we have identified material weaknesses in our internal control over financial reporting which,
if not corrected, could affect the reliability of our consolidated financial statements; |
| · | the
ability to maintain the listing of our securities on Nasdaq or any other exchange; and |
| · | the
possibility that we may be adversely affected by other economic, business or competitive
factors. |
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this release and are not intended to be a guarantee of our performance in future periods.
We cannot guarantee the accuracy of any such forward-looking statements contained in this release, and we do not intend to publicly update
or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
For further information regarding risks and uncertainties associated
with our business, and important factors that could cause our actual results to vary materially from those expressed or implied in such
forward-looking statements, please refer to the factors listed and described under “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” and the “Risk Factors” sections of the documents we file from time
to time with the U.S. Securities and Exchange Commission, including, but not limited to, our Annual Report on Form 10-K and our
quarterly reports on Form 10-Q, copies of which may be obtained from our website at https://ir.unitedhomesgroup.com/financials/sec-filings/default.aspx
Investor Relations Contact:
Drew Mackintosh
drew@mackintoshir.com
Mobile: 310-924-9036
Media Contact:
Allen Hutto
allenhutto@greatsouthernhomes.com
Mobile: 803-665-2764
UNITED HOMES GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30, 2023 and DECEMBER 31, 2022 (UNAUDITED)
| |
June 30,
2023 | | |
December 31,
2022 (2) | |
ASSETS | |
| | | |
| | |
Cash and cash equivalents | |
$ | 92,741,831 | | |
$ | 12,238,835 | |
Accounts receivable, net | |
| 1,919,934 | | |
| 1,976,334 | |
Inventories: | |
| | | |
| | |
Homes under construction and finished
homes | |
| 89,756,401 | | |
| 163,997,487 | |
Developed lots | |
| 24,801,833 | | |
| 16,205,448 | |
Due from related party | |
| 8,420,919 | | |
| 1,437,235 | |
Related party note receivable | |
| 647,106 | | |
| — | |
Lot purchase agreement deposits | |
| 16,416,693 | | |
| 3,804,436 | |
Investment in Joint Venture | |
| 822,568 | | |
| 186,086 | |
Property and equipment, net | |
| 639,470 | | |
| 1,385,698 | |
Operating right-of-use assets | |
| 656,772 | | |
| 1,001,277 | |
Deferred tax asset | |
| 3,495,518 | | |
| — | |
Prepaid expenses
and other assets | |
| 6,565,316 | | |
| 6,112,044 | |
Total Assets | |
$ | 246,884,361 | | |
$ | 208,344,880 | |
| |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |
| | | |
| | |
Accounts payable | |
$ | 18,031,023 | | |
$ | 22,077,240 | |
Homebuilding debt and other affiliate
debt | |
| 63,961,416 | | |
| 120,797,006 | |
Operating lease liabilities | |
| 656,772 | | |
| 1,001,277 | |
Other accrued expenses and liabilities | |
| 4,759,106 | | |
| 5,465,321 | |
Income tax payable | |
| 1,320,104 | | |
| — | |
Derivative liabilities | |
| 208,155,641 | | |
| — | |
Convertible note
payable | |
| 67,133,585 | | |
| — | |
Total Liabilities | |
| 364,017,647 | | |
| 149,340,844 | |
Class A
common stock, $0.0001 par value; 350,000,000 shares authorized; 11,381,736 shares issued and outstanding on June 30, 2023, and
December 31, 2022, respectively. (1) | |
| 1,137 | | |
| 37 | |
Class B
common stock, $0.0001 par value; 60,000,000 shares authorized; 36,973,877 shares issued and outstanding on June 30, 2023, and
December 31, 2022, respectively. (1) | |
| 3,697 | | |
| 3,697 | |
Preferred Stock, $0.0001 par value;
40,000,000 shares authorized; none issued or outstanding. | |
| — | | |
| — | |
Additional
paid-in capital(1) | |
| 764,887 | | |
| 1,422,630 | |
Retained
Earnings/(accumulated deficit) (1) | |
| (117,903,007 | ) | |
| 57,577,672 | |
Total
Stockholders' equity(1) | |
| (117,133,286 | ) | |
| 59,004,036 | |
Total Liabilities
and Stockholders' equity | |
$ | 246,884,361 | | |
$ | 208,344,880 | |
| (1) | Retroactively restated as of December 31, 2022 for the Reverse Recapitalization
as a result of the Business Combination |
| (2) | The Condensed Consolidated
Balance Sheet as of December 31, 2022 (“Legacy UHG financial statements”)
has been prepared from Legacy UHG’s historical financial records and reflect the historical
financial position of Legacy UHG for the period presented on a carve-out basis in accordance
with generally accepted accounting principles in the United States of America (“GAAP”).
The Legacy UHG financial statements present historical information and results attributable
to the homebuilding operations of Great Southern Homes, Inc. |
UNITED HOMES GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND SIX MONTHS ENDED JUNE 30, 2023 AND 2022 (UNAUDITED)
| |
Three Months
Ended June 30, | | |
Six Months
Ended June 30, | |
| |
2023 | | |
2022 | | |
2023 | | |
2022 | |
Revenue, net of sales discounts | |
$ | 122,091,629 | | |
$ | 142,468,681 | | |
$ | 216,918,331 | | |
$ | 250,905,541 | |
Cost of sales | |
| 98,174,149 | | |
| 101,458,330 | | |
| 176,223,078 | | |
| 182,623,290 | |
Gross profit | |
| 23,917,480 | | |
| 41,010,351 | | |
| 40,695,253 | | |
| 68,282,251 | |
| |
| | | |
| | | |
| | | |
| | |
Selling, general and administrative expense | |
| 16,335,318 | | |
| 15,200,745 | | |
| 33,022,719 | | |
| 25,625,795 | |
Net income
from operations | |
$ | 7,582,162 | | |
$ | 25,809,606 | | |
$ | 7,672,534 | | |
$ | 42,656,456 | |
| |
| | | |
| | | |
| | | |
| | |
Other (expense) income, net | |
| (2,295,330 | ) | |
| 92,400 | | |
| (2,092,615 | ) | |
| 263,478 | |
Equity in net earnings from investment in joint venture | |
| 390,674 | | |
| — | | |
| 636,482 | | |
| — | |
Change in fair value of derivative liabilities | |
| 242,342,979 | | |
| — | | |
| 35,278,491 | | |
| — | |
Income before taxes | |
$ | 248,020,485 | | |
$ | 25,902,006 | | |
$ | 41,494,892 | | |
$ | 42,919,934 | |
Income tax expense | |
| (2,657,726 | ) | |
| — | | |
| (636,461 | ) | |
| — | |
Net income | |
$ | 245,362,759 | | |
$ | 25,902,006 | | |
$ | 40,858,431 | | |
$ | 42,919,934 | |
| |
| | | |
| | | |
| | | |
| | |
Basic and diluted earnings per share | |
| | | |
| | | |
| | | |
| | |
Basic | |
$ | 5.10 | | |
$ | 0.69 | | |
$ | 0.95 | | |
$ | 1.15 | |
Diluted | |
$ | 4.27 | | |
$ | 0.69 | | |
$ | 0.89 | | |
$ | 1.15 | |
| |
| | | |
| | | |
| | | |
| | |
Basic
and diluted weighted-average number of shares (1) | |
| | | |
| | | |
| | | |
| | |
Basic | |
| 48,122,141 | | |
| 37,347,350 | | |
| 42,877,744 | | |
| 37,347,350 | |
Diluted | |
| 57,874,253 | | |
| 37,444,348 | | |
| 48,800,225 | | |
| 37,395,849 | |
(1) Retroactively restated for the three and six months ending
June 30, 2022 for the Reverse Recapitalization as a result of the Business Combination
UNITED HOMES GROUP, INC
GAAP TO NON-GAAP RECONCILIATIONS
THREE AND SIX MONTHS ENDED JUNE 30, 2023 and 2022 (UNAUDITED)
Adjusted gross profit is a non-GAAP financial
measure used by management of UHG as a supplemental measure in evaluating operating performance. UHG defines adjusted gross profit as
gross profit excluding the effects of capitalized interest expensed in cost of sales. UHG’s management believes this information
is meaningful because it separates the impact that capitalized interest expensed in cost of sales has on gross profit to provide a more
specific measurement of UHG’s gross profits. However, because adjusted gross profit information excludes capitalized interest expensed
in cost of sales, which has real economic effects and could impact UHG’s results of operations, the utility of adjusted gross profit
information as a measure of UHG’s operating performance may be limited. Other companies may not calculate adjusted gross profit
information in the same manner that UHG does. Accordingly, adjusted gross profit information should be considered only as a supplement
to gross profit information as a measure of UHG’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.
| |
Three Months
Ended June 30 | | |
Six Months
Ended June 30 | |
| |
2023 | | |
2022 | | |
2023 | | |
2022 | |
Revenue, net of sales discounts | |
$ | 122,091,629 | | |
$ | 142,468,681 | | |
$ | 216,918,331 | | |
$ | 250,905,541 | |
Cost of sales | |
| 98,174,149 | | |
| 101,458,330 | | |
| 176,223,078 | | |
| 182,623,290 | |
Gross profit | |
$ | 23,917,480 | | |
$ | 41,010,351 | | |
$ | 40,695,253 | | |
$ | 68,282,251 | |
Interest expense
in cost of sales | |
| 2,159,967 | | |
| 627,369 | | |
| 4,546,799 | | |
| 1,585,269 | |
Adjusted gross profit | |
$ | 26,077,447 | | |
$ | 41,637,720 | | |
$ | 45,242,052 | | |
$ | 69,867,520 | |
Gross
profit %(a) | |
| 19.6 | % | |
| 28.8 | % | |
| 18.8 | % | |
| 27.2 | % |
Adjusted
gross profit %(a) | |
| 21.4 | % | |
| 29.2 | % | |
| 20.9 | % | |
| 27.8 | % |
(a) Calculated as a percentage of revenue
UNITED HOMES GROUP, INC
GAAP TO NON-GAAP RECONCILIATIONS
THREE AND SIX MONTHS ENDED JUNE 30, 2023 and 2022 (UNAUDITED)
Earnings before interest, taxes, depreciation
and amortization, or EBITDA, and adjusted EBITDA are supplemental non-GAAP financial measures used by management of UHG. UHG defines
EBITDA as net income before (i) capitalized interest expensed in cost of sales, (ii) interest expensed in other (expense) income,
net, (iii) depreciation and amortization, (iv) taxes. UHG defines adjusted EBITDA as EBITDA before stock-based compensation
expense, transaction cost expense and change in fair value of derivative liabilities. Management of UHG believes EBITDA and adjusted
EBITDA are useful because they provide a more effective evaluation of UHG’s operating performance and allow comparison of UHG’s
results of operations from period to period without regard to UHG’s financing methods or capital structure or other items that
impact comparability of financial results from period to period such as fluctuations in interest expense or effective tax rates, levels
of depreciation or amortization, or unusual items. EBITDA and adjusted EBITDA should not be considered as alternatives to, or more meaningful
than, net income or any other measure as determined in accordance with GAAP. UHG’s computations of EBITDA and adjusted EBITDA may
not be comparable to EBITDA or adjusted EBITDA of other companies. UHG presents EBITDA and adjusted EBITDA because they believe these
metrics provide useful information regarding the factors and trends affecting UHG’s business.
The following table presents a reconciliation
of EBITDA and adjusted EBITDA to the GAAP financial measure of net income for each of the periods indicated.
| |
Three Months
Ended June 30, | | |
Six Months
Ended June 30, | |
| |
2023 | | |
2022 | | |
2023 | | |
2022 | |
Net income | |
$ | 245,362,759 | | |
$ | 25,902,006 | | |
$ | 40,858,431 | | |
$ | 42,919,934 | |
Interest expense in cost of sales | |
| 2,159,967 | | |
| 627,369 | | |
| 4,546,799 | | |
| 1,585,269 | |
Interest expense in other (expense) income, net | |
| 3,419,309 | | |
| — | | |
| 3,419,309 | | |
| — | |
Depreciation and amortization | |
| 251,846 | | |
| 2,606 | | |
| 466,776 | | |
| 175,217 | |
Taxes | |
| 2,745,736 | | |
| 2,952 | | |
| 637,844 | | |
| (44,306 | ) |
EBITDA | |
$ | 253,939,617 | | |
$ | 26,534,933 | | |
$ | 49,929,159 | | |
$ | 44,636,114 | |
Stock-based compensation expense | |
| 410,530 | | |
| 53,288 | | |
| 4,909,686 | | |
| 1,321,510 | |
Transaction cost expense | |
| 1,102,094 | | |
| 1,163,894 | | |
| 2,066,118 | | |
| 1,163,894 | |
Change in fair value of derivative liabilities | |
| (242,342,979 | ) | |
| — | | |
| (35,278,491 | ) | |
| — | |
Adjusted EBITDA | |
$ | 13,109,262 | | |
$ | 27,752,115 | | |
$ | 21,626,472 | | |
$ | 47,121,518 | |
EBITDA
margin(a) | |
| 208.0 | % | |
| 18.6 | % | |
| 23.0 | % | |
| 17.8 | % |
Adjusted
EBITDA margin(a) | |
| 10.7 | % | |
| 19.5 | % | |
| 10.0 | % | |
| 18.8 | % |
(a) Calculated as a percentage of revenue
UNITED HOMES GROUP, INC
GAAP TO NON-GAAP RECONCILIATIONS
Continued
The Company does not use derivative instruments
to hedge exposure to cash flow, market or foreign currency risks. The Company evaluates all of its financial instruments, including issued
warrants to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. The classification
of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end
of each reporting period. The following table presents information about the Company’s Stockholders’ equity, removing all
derivative liabilities that are measured at fair value as of June 30, 2023 to present the Company’s Adjusted Total Stockholders’
equity. The Company believes adjusted Total Stockholders’ equity is useful because it believes this non-GAAP measure provides a
more accurate depiction of the Company’s true equity to its Stockholders’, removing these longer-term, non-cash liabilities,
which fluctuate with their valuation.
| |
| | |
June 30,
2023 |
|
Total Stockholders' equity | |
| | | |
$ |
(117,133,286 |
) |
Contingent earnout liability | |
| 199,711,577 | |
|
|
|
Derivative private placement warrant liability | |
| 2,343,664 | |
|
|
|
Derivative public warrant liability | |
| 5,606,250 | |
|
|
|
Derivative stock option liability | |
| 494,150 | |
|
|
|
Total Derivative Liability | |
| | | |
208,155,641 |
|
Adjusted Book Value | |
| | | |
$ |
91,022,355 |
|
UNITED HOMES GROUP, INC
OPERATIONAL METRICS BY MARKET
$’s in millions
| |
Three
Months Ended June 30, | | |
| |
| |
2023 | | |
2022 | | |
Period Over Period % Change | |
Market | |
Net New
Orders | | |
Closings | | |
Net New
Orders | | |
Closings | | |
Net New
Orders | | |
Closings | |
Coastal | |
| 39 | | |
| 67 | | |
| 42 | | |
| 25 | | |
| -7 | % | |
| 168 | % |
Midlands | |
| 245 | | |
| 241 | | |
| 196 | | |
| 286 | | |
| 25 | % | |
| -16 | % |
Upstate | |
| 57 | | |
| 77 | | |
| 101 | | |
| 148 | | |
| -44 | % | |
| -48 | % |
Total | |
| 341 | | |
| 385 | | |
| 339 | | |
| 459 | | |
| 1 | % | |
| -16 | % |
| |
As of June 30, | | |
As of June 30, | | |
| |
| |
2023 | | |
2022 | | |
Period Over Period % Change | |
Market | |
Backlog
Inventory | | |
Revenue | | |
Backlog
Inventory | | |
Revenue | | |
Backlog
Inventory | | |
Revenue | |
Coastal | |
| 49 | | |
$ | 16.9 | | |
| 125 | | |
$ | 40.4 | | |
| -61 | % | |
| -58 | % |
Midlands | |
| 172 | | |
$ | 53.0 | | |
| 333 | | |
$ | 99.1 | | |
| -48 | % | |
| -46 | % |
Upstate | |
| 72 | | |
$ | 24.3 | | |
| 133 | | |
$ | 42.5 | | |
| -46 | % | |
| -43 | % |
Total | |
| 293 | | |
$ | 94.2 | | |
| 591 | | |
$ | 182.0 | | |
| -50 | % | |
| -48 | % |
| |
Six Months
Ended June 30, | | |
| |
| |
2023 | | |
2022 | | |
Period Over Period % Change | |
Market | |
Net New
Orders | | |
Closings | | |
Net New
Orders | | |
Closings | | |
Net New
Orders | | |
Closings | |
Coastal | |
| 109 | | |
| 138 | | |
| 91 | | |
| 102 | | |
| 20 | % | |
| 35 | % |
Midlands | |
| 442 | | |
| 417 | | |
| 482 | | |
| 530 | | |
| -8 | % | |
| -21 | % |
Upstate | |
| 179 | | |
| 158 | | |
| 240 | | |
| 241 | | |
| -25 | % | |
| -34 | % |
Total | |
| 730 | | |
| 713 | | |
| 813 | | |
| 873 | | |
| -10 | % | |
| -18 | % |
v3.23.2
Cover
|
Aug. 10, 2023 |
Document Information [Line Items] |
|
Document Type |
8-K
|
Amendment Flag |
false
|
Document Period End Date |
Aug. 10, 2023
|
Entity File Number |
001-39936
|
Entity Registrant Name |
UNITED HOMES GROUP, INC.
|
Entity Central Index Key |
0001830188
|
Entity Tax Identification Number |
85-3460766
|
Entity Incorporation, State or Country Code |
DE
|
Entity Address, Address Line One |
90 N Royal Tower Drive
|
Entity Address, City or Town |
Irmo
|
Entity Address, State or Province |
SC
|
Entity Address, Postal Zip Code |
29063
|
City Area Code |
844
|
Local Phone Number |
766-4663
|
Written Communications |
false
|
Soliciting Material |
false
|
Pre-commencement Tender Offer |
false
|
Pre-commencement Issuer Tender Offer |
false
|
Entity Emerging Growth Company |
true
|
Elected Not To Use the Extended Transition Period |
false
|
Common Class A [Member] |
|
Document Information [Line Items] |
|
Title of 12(b) Security |
Class A Common Shares, par value $0.0001 per share
|
Trading Symbol |
UHG
|
Security Exchange Name |
NASDAQ
|
Warrant [Member] |
|
Document Information [Line Items] |
|
Title of 12(b) Security |
Warrants, each exercisable for one Class A Common Share for $11.50 per share
|
Trading Symbol |
UHGWW
|
Security Exchange Name |
NASDAQ
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