NASDAQ:LEGH Legacy Housing Q4 2024 Earnings Report $25.22 +0.92 (+3.79%) Closing price 05/2/2025 04:00 PM EasternExtended Trading$25.22 0.00 (0.00%) As of 05/2/2025 04:05 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Legacy Housing EPS ResultsActual EPS$0.59Consensus EPS $0.52Beat/MissBeat by +$0.07One Year Ago EPSN/ALegacy Housing Revenue ResultsActual Revenue$54.19 millionExpected Revenue$44.59 millionBeat/MissBeat by +$9.60 millionYoY Revenue GrowthN/ALegacy Housing Announcement DetailsQuarterQ4 2024Date3/12/2025TimeAfter Market ClosesConference Call DateThursday, March 13, 2025Conference Call Time11:00AM ETUpcoming EarningsLegacy Housing's Q1 2025 earnings is scheduled for Monday, May 12, 2025, with a conference call scheduled on Tuesday, May 13, 2025 at 11:00 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Annual Report (10-K)Earnings HistoryCompany ProfilePowered by Legacy Housing Q4 2024 Earnings Call TranscriptProvided by QuartrMarch 13, 2025 ShareLink copied to clipboard.PresentationSkip to Participants Operator00:00:00Hello, everyone, and welcome to the Legacy Housing Corporation Full Year twenty twenty four Earnings Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. To participate, you will need to press Please be advised that today's conference is being recorded. Now it's my pleasure to turn the call over to our CEO, Duncan Bates. Operator00:00:37Please proceed. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:00:39Good morning. This is Duncan Bates, Legacy's President and CEO. Thank you for joining our call to discuss Legacy's year end twenty twenty four results. Results. Max Afrik, Legacy's General Counsel, will read the Safe Harbor disclosure before getting started. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:00:55Max? Max AfrickGeneral Counsel at Legacy Housing Corporation00:00:56Thanks, Duncan. Before we begin, I will remind our listeners that management's prepared remarks today will contain forward looking statements, which are subject to risks and uncertainties, and management may make additional forward looking statements in response to your questions. Therefore, the company claims the protection of the Safe Harbor for forward looking statements that is contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from management's current expectations and any projections as to the company's future performance represent management's best estimates as of today's call. Legacy assumes no obligation to update these projections in the future unless otherwise required by applicable law. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:01:37Thanks, Max. I'm joined today by Jeff Fiedleman, Legacy's Chief Financial Officer. Jeff will discuss our 2024 financial performance, then I will provide additional corporate updates and open the call for Q and A. Jeff? Jeffrey FiedelmanChief Financial Officer at Legacy Housing Corporation00:02:00Thanks, Duncan. Product sales decreased $15,800,000 or 10.9% in 2024 as compared to 2023. This decrease was driven primarily by a decrease in unit volume shipped, primarily in direct sales and inventory finance sales categories. In 2024, our net revenue per product sold increased 1.9% as compared to 2023, primarily because of a moderate increase in unit prices. Consumer MHP and dealer loans interest income increased $3,800,000 or 10.1% from 2023 to 2024 due to growth in our loan portfolios. Jeffrey FiedelmanChief Financial Officer at Legacy Housing Corporation00:02:48This increase was driven primarily by increased balances in the MHP and consumer loan portfolios. Between 12/31/2024 and 12/31/2023, our consumer loan portfolio increased by $17,600,000 our MHP loan portfolio increased by $24,500,000 and our dealer finance notes balance did not change. The change in the balance of our MHP loan portfolio is primarily due to a settlement agreement we reached with a significant borrower as discussed in our 10 ks. Other revenue primarily consists of contract deposit forfeitures, consignment fees, commercial lease rents, land sales, service fees and other miscellaneous income and increased $7,000,000 or 106.3% from 2023 to 2024. This increase was primarily due to $8,900,000 in land sales related to the Forest Hollow mobile home community and the property in Marble Falls, Texas 0 Point 5 Million Dollars in rental income from our mobile home park properties, partially offset by a $1,500,000 decrease in forfeited deposits, a 600,000 decrease in rental income from leased mobile homes and a $300,000 decrease in other miscellaneous revenue. Jeffrey FiedelmanChief Financial Officer at Legacy Housing Corporation00:04:26The cost of product sales decreased $9,600,000 or 9.7% in 2024 as compared to 2023. The decrease in costs is primarily related to a decrease in units sold. Gross profit margin was 30.4% of product sales during 2024 as compared to 31.3% during 2023. The cost of other sales was $8,200,000 in 2024 and primarily reflects the cost associated with our land sales. Selling, general and administrative expenses decreased $1,100,000 or 4.4% in 2024 as compared to 2023. Jeffrey FiedelmanChief Financial Officer at Legacy Housing Corporation00:05:15This decrease was primarily due to a 1,400,000 decrease in warranty costs, a $400,000 decrease in consulting and professional fees, and a $400,000 decrease in salaries and benefit costs, partially offset by a $400,000 increase in real estate taxes and a net 700,000 increase in other miscellaneous costs. Other income expense net increased by $8,300,000 in 2024 as compared to 2023. We had an $8,500,000 increase in miscellaneous net primarily due to: one, gains related to the settlement agreement described discussed above two, a gain on the sale of property in Georgia three, gains related to properties acquired through foreclosure and four, reversals of certain balance sheet liabilities. We had a $400,000 decrease in interest income on other notes and a 200,000 decrease in interest expense. Net income increased 13.2% to $61,600,000 in 2024 compared to 2023. Jeffrey FiedelmanChief Financial Officer at Legacy Housing Corporation00:06:40Basic earnings per share increased $0.32 per share or 14.3% in 2024 compared to 2023. As of 12/31/2024, we had approximately $1,100,000 in cash compared to $700,000 as of 12/31/2023. The outstanding balance of the revolver as of 12/31/2024 and 12/31/2023 was 0 and $23,700,000 respectively. At the end of 2024, legacy's book value per basic share outstanding was $20.4 an increase of 13.9% from the year ended 2023. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:07:34Thanks, Jeff. Before I run through my notes, I want to acknowledge that there's a lot of noise and uncertainty in the market right now. Politics, tariffs, recession risks, interest rate considerations, etcetera. Many of the call participants are long term investors in legacy housing. I don't know how 2025 will shake out, but I can assure you that our team will be in the office every day, managing the business closely and making adjustments as needed. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:08:07We continue to believe in the long term fundamentals of manufactured housing and the value proposition that legacy housing provides its customers. High quality, affordable homes combined with financing solutions that keep monthly payments low. Our target market of homebuyers consists of households with total annual income below $75,000 which comprised 47% of total U. S. Households in 2023. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:08:40This group, nearly half of all households in The United States, has been severely impacted by increasing rental rates, higher prices for site built homes, elevated mortgage rates and stagnant wage growth. A few data points from yesterday's 10 ks filing. The average price for a new single family home in 2023 was $511,000 including the land compared to a manufactured home of $123,000 In 02/2005, '20 years ago, approximately 18% of new single family homes sold in The United States were under 150,000 Today, it's essentially zero. Legacy's average selling price in 2024 was approximately $61,000 per unit, up from $60,000 in 2023. The vast majority of Legacy's business is wholesale, but even with the retail markup and other expenses, our homes and financing solutions provide an affordable alternative to site built homes, which a large portion of households in our country cannot currently afford. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:10:01We continue to see coverage of factory built housing in the media and hear positive talks of regulatory reform from the new administration. The affordable housing crisis is not solved without the manufactured housing industry. Dealer business across most of our footprint is healthy. We are moving out of a seasonally slow season. The team continues to sign new independent dealers in both our Texas and Southeast markets. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:10:33Retail finance fundings in the first quarter of twenty twenty five are tracking well ahead of the 8% growth we saw in 2024. Our community business is improving. As discussed on previous calls, higher interest rates have depressed community transaction volumes, which tends to drive demand for new park model homes. We are receiving more inbound requests for large orders and think the community business will continue to improve in 2025. Legacy's lending portfolios continue to compound. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:11:11For 2024, interest revenue from MHP, retail and floor plan financing was $41,200,000 compared to $37,200,000 in 2023. Our delinquencies remain low, although normalizing to pre COVID levels, and recovery rates are strong. In 2024, average interest rates for new retail loans were 1% higher than 2023. Product gross margins were 30.4% in 2024. Under absorbed labor given lower production levels during the year impacted margins. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:11:51We continue to watch labor closely and expect margins to normalize with production improving. We are also keeping a very close eye on material price fluctuations from the tariffs. We pushed through the first price increase since COVID in February of twenty twenty five. During the fourth quarter, Legacy sold one of the mobile home parks that was deeded to us under the settlement agreement. As Jeff mentioned, the sale resulted in a meaningful gain at year end. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:12:21We are setting and renting homes in the second park now to increase occupancy before monetizing. A few updates on land development. We continue to focus on the properties in Austin. In Bastrop County, our 1,100 pad development near Austin, the roads and utilities are nearly complete in Phase one. We still anticipate selling lots in Phase one this summer. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:12:48As I mentioned during our last call, we own 300 developed lots mobile home lots in Horseshoe Bay, Texas. Our dealership nearby in Marble Falls, Texas is now open and we are selling land and homes there. I'm proud of the team's progress this year. We finished 2024 with 33.5% GAAP net income margins, up from 28.8% in 2023. Over the last three years, we have increased book value by nearly 60% to $494,000,000 dollars There's still a lot of work to do though. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:13:29For 2025, we're focused on sales and specifically park sales in Texas and dealer sales in the Southeast, streamlining our product offering, systems, processes and employee retention at our retail business, continuing to monetize non core assets and finishing construction and putting homes on our land in Austin. Legacy's integrated business model provides multiple avenues to generate returns for our shareholders regardless of economic conditions. We are currently in a meaningful net cash position and if our stock trades off this year, we will repurchase shares aggressively. Operator, this concludes our prepared remarks. Please begin the Q and A. Operator00:14:18Thank you so much. And as a reminder to our audience, Thank you. One moment for our first question. It comes from Mark Smith with Lake Street. Please proceed. Mark SmithSenior Research Analyst at Lake Street Capital Markets, LLC00:14:41Hi, guys. I wanted to just dig in a little deeper on land sales during the quarter. If you can give a little more color on kind of the big sale, how it came about, why at that point to make that sale and then future ones potentially coming? It sounds like you're still trying to improve the other one before selling it. And then also just land acquisitions, I think that you guys may have bought some property in Texas during fourth quarter? Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:15:11Yes. Hey, Mark. Thanks for the question. Yes, there is only one land sale during the fourth quarter and that was the sale of a mobile home park from the settlement agreement in Beaumont, Texas. So that's the big sale. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:15:28Obviously, throughout the year, we did monetize other land that we own, some in Eatonton, as well as down in Horseshoe Bay. And so we are looking at our portfolio closely and if they are non core assets and the price makes sense to monetize them, we will be opportunistic with that going forward. Mark SmithSenior Research Analyst at Lake Street Capital Markets, LLC00:15:58Okay. And did you guys purchase some land in Q4 in Texas? Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:16:05We did not purchase the land. I think what the settlement agreement taught our team is how to foreclose on land. And so there is a meaningful portion of our loan portfolio on the MHP and specifically we call it development loans, but other notes receivable that are secured by land. And if we're tracking borrowers down for payments or notes mature, then we're going to take that land back and we'll monetize it when the price makes sense. But there's a decent amount of equity in that portfolio as well. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:16:58So when we sell it, the returns look pretty good. Mark SmithSenior Research Analyst at Lake Street Capital Markets, LLC00:17:04Okay. And that brings up a good point. Maybe if you can speak broadly about any concerns that investors may have around delinquency, squeeze consumers, kind of a tough environment today on your ability to to take back and kind of be covered if a loan goes bad whether it's MHP or consumer? Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:17:30Yes, I think they are a little bit different between the two portfolios. So maybe we start on the retail loan portfolio. We've seen past due balances creep up a little bit, but it's certainly not to a point where we're concerned. And I think what's important to understand is there are several features of that loan portfolio that make the recovery really strong. I mean, one is, you've seen the prices of homes since COVID go up essentially 40%. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:18:19And so if you got a meaningful down payment and somebody has made payments on homes for a period of time, when we're selling we're currently selling repos now for around 100% of the principal that's outstanding on those. The other piece is there are features of that of those loans where we work with our dealers to make sure that we're able to repo houses and resell houses and the economics make sense. On the MHP side, and really the key to both of these portfolios is keeping the monthly payments affordable. If a park owner is able to buy houses from us and finance them through us and we keep their monthly payment low, then they are able to rent that house out to a renter and generate a profit. And as long as they get those houses set up, the numbers work. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:19:35I think where people get into trouble is they take houses, they don't get them set up and they're paying us and not generating rental income. So we keep a close eye on that. And on the MHP side, there's a lot of levers for recovery. And obviously, this year, we tested that in a big way and ultimately didn't flush a dollar of that through our income statement and have had some significant gains as we've monetized those assets. Mark SmithSenior Research Analyst at Lake Street Capital Markets, LLC00:20:18Okay. Next question for me is just looking at changing immigration policies, potential higher deportations. Curious any potential impact this could have both on customers and demand as well as maybe your labor market? Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:20:37Yes. I mean, as a public company, I mean, we've been e verifying for years. So everyone we hire goes through that process. I think even with some of the economic indicators down, I think any manufacturer is struggling with labor. And so that's something that we continue to keep a close eye on, but aren't worried about that necessarily impacting our workforce. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:21:12When we finance someone purchasing a home, the underwriting criteria requires certain things from these borrowers and these aren't people that came across the border and decided to buy a mobile home. These are people that have been in the country for years and they have stable jobs and they can afford that house. So while there's noise in the market, we haven't seen a material change in our business from the immigration policies. Mark SmithSenior Research Analyst at Lake Street Capital Markets, LLC00:21:57Perfect. And last one for me. SG and A, certainly down at good healthy levels here. I'm just curious the sustainability and if there's anything we should have on our radar as far as maybe increasing SG and A expenses here in 2025? Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:22:14Well, there is as you know, Mark, from covering us for a long time, SG and A is a hot topic with the Board and under a always under a microscope. So we're going to continue to run the business the same way and I don't see any material changes in SG and A. Mark SmithSenior Research Analyst at Lake Street Capital Markets, LLC00:22:37Excellent. Thank you. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:22:39Yes. Thanks, Mark. Operator00:22:42Thank you. Our next question comes from the line of Daniel Moore with CJS Securities. Please proceed. Will GildeaEquity Research Associate at CJS Securities00:22:51Hi. This is Will on for Dan. Can you talk about your expectations for production rates across your three plants for Q1 and first half of twenty twenty five? Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:23:02Hey. Yes. Well, like I mentioned in the prepared remarks, I wish I knew I wish I had a crystal ball for 2025, but there's obviously a lot of moving pieces. We've been really focused on ramping up production at our Texas facilities. We're heading into the spring selling season with a good backlog and are heading to a mobile home show next week, we hope to continue to build that backlog. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:23:43So our production is still not where we want it. I think you know but I think ultimately we're moving in the right direction. Georgia is a little bit slower than we'd like. We've continued to grow the park side of the business in Georgia. The dealer slide lags, but we're focused on building a backlog there and ramping production from the levels that we're at right now. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:24:21But overall, I'm comfortable with it, but it's our number one focus right now is ramping up production and getting homes shipped. Will GildeaEquity Research Associate at CJS Securities00:24:36Thank you. And then just maybe you could add a little bit more color to backlogs exiting this quarter compared to last quarter and year over year? Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:24:47Yes. I mean, if you follow the company for as you guys have for the past couple of years, it's been a little choppy, like we took pricing up with COVID. I think our prices were elevated when some of our competitors came off of pricing. And now with tariffs and with the labor market, that pricing is normalized and the backlog looks pretty healthy. We don't report a backlog number, but certainly in Texas, we've got a pretty meaningful backlog and in Georgia, we're working on it. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:25:39Thank you very much. Operator00:25:57As I see no further questions in queue, I will turn the call back to Duncan Bates for his final comments. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:26:04Thank you for joining today's earnings call. We appreciate your interest in Legacy Housing. If you're in Biloxi for the Mobile Home Show next week, please come by and see us. Operator, this concludes our call. Operator00:26:17Thank you so much and thank you everyone who participated in today's conference. You may now disconnect.Read moreParticipantsExecutivesDuncan BatesPresident and Chief Executive OfficerMax AfrickGeneral CounselJeffrey FiedelmanChief Financial OfficerAnalystsMark SmithSenior Research Analyst at Lake Street Capital Markets, LLCWill GildeaEquity Research Associate at CJS SecuritiesPowered by Conference Call Audio Live Call not available Earnings Conference CallLegacy Housing Q4 202400:00 / 00:00Speed:1x1.25x1.5x2xTranscript SectionsPresentationParticipants Earnings DocumentsPress Release(8-K)Annual report(10-K) Legacy Housing Earnings HeadlinesLegacy Housing Corporation Announces Timing of First Quarter 2025 Earnings Release and Conference CallApril 29, 2025 | globenewswire.comLegacy Housing's (NASDAQ:LEGH) investors will be pleased with their impressive 156% return over the last five yearsApril 19, 2025 | finance.yahoo.comTrump’s treachery Trump’s Final Reset Inside the shocking plot to re-engineer America’s financial system…and why you need to move your money now.May 3, 2025 | Porter & Company (Ad)Legacy Housing: Moving On UpMarch 22, 2025 | seekingalpha.comLegacy Housing Corporation (NASDAQ:LEGH) Q4 2024 Earnings Call TranscriptMarch 14, 2025 | msn.comLegacy Housing Corporation Reports 2024 Financial Results: Net Income Increases 13.2% Despite Revenue DeclineMarch 14, 2025 | nasdaq.comSee More Legacy Housing Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Legacy Housing? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Legacy Housing and other key companies, straight to your email. Email Address About Legacy HousingLegacy Housing (NASDAQ:LEGH) engages in the building, sale, and financing of manufactured homes and tiny houses primarily in the southern United States. It manufactures and provides for the transport of mobile homes, including 1 to 5 bedrooms with 1 to 3 1/2 bathrooms; and provides wholesale financing to dealers and mobile home parks, as well as retail financing to consumers. The company also offers inventory financing for its independent retailers; consumer financing for its products; and financing to manufactured housing community owners that buy or lease its products for use in their rental housing communities. In addition, it involved in financing and developing new manufactured home communities. The company markets its homes under the Legacy brand through a network of independent retailers and company-owned stores; and directly to manufactured home communities. Legacy Housing Corporation was founded in 2005 and is headquartered in Bedford, Texas.View Legacy Housing ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Amazon Earnings: 2 Reasons to Love It, 1 Reason to Be CautiousMeta Takes A Bow With Q1 Earnings - Watch For Tariff Impact in Q2Palantir Earnings: 1 Bullish Signal and 1 Area of ConcernVisa Q2 Earnings Top Forecasts, Adds $30B Buyback PlanMicrosoft Crushes Earnings, What’s Next for MSFT Stock?Qualcomm's Earnings: 2 Reasons to Buy, 1 to Stay AwayAMD Stock Signals Strong Buy Ahead of Earnings Upcoming Earnings Palantir Technologies (5/5/2025)Vertex Pharmaceuticals (5/5/2025)Realty Income (5/5/2025)Williams Companies (5/5/2025)CRH (5/5/2025)Advanced Micro Devices (5/6/2025)American Electric Power (5/6/2025)Constellation Energy (5/6/2025)Marriott International (5/6/2025)Energy Transfer (5/6/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. Start Your 30-Day Trial MarketBeat All Access Features Best-in-Class Portfolio Monitoring Get personalized stock ideas. Compare portfolio to indices. Check stock news, ratings, SEC filings, and more. Stock Ideas and Recommendations See daily stock ideas from top analysts. Receive short-term trading ideas from MarketBeat. Identify trending stocks on social media. Advanced Stock Screeners and Research Tools Use our seven stock screeners to find suitable stocks. Stay informed with MarketBeat's real-time news. Export data to Excel for personal analysis. Sign in to your free account to enjoy these benefits In-depth profiles and analysis for 20,000 public companies. Real-time analyst ratings, insider transactions, earnings data, and more. Our daily ratings and market update email newsletter. Sign in to your free account to enjoy all that MarketBeat has to offer. Sign In Create Account Your Email Address: Email Address Required Your Password: Password Required Log In or Sign in with Facebook Sign in with Google Forgot your password? Your Email Address: Please enter your email address. Please enter a valid email address Choose a Password: Please enter your password. Your password must be at least 8 characters long and contain at least 1 number, 1 letter, and 1 special character. Create My Account (Free) or Sign in with Facebook Sign in with Google By creating a free account, you agree to our terms of service. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
PresentationSkip to Participants Operator00:00:00Hello, everyone, and welcome to the Legacy Housing Corporation Full Year twenty twenty four Earnings Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. To participate, you will need to press Please be advised that today's conference is being recorded. Now it's my pleasure to turn the call over to our CEO, Duncan Bates. Operator00:00:37Please proceed. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:00:39Good morning. This is Duncan Bates, Legacy's President and CEO. Thank you for joining our call to discuss Legacy's year end twenty twenty four results. Results. Max Afrik, Legacy's General Counsel, will read the Safe Harbor disclosure before getting started. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:00:55Max? Max AfrickGeneral Counsel at Legacy Housing Corporation00:00:56Thanks, Duncan. Before we begin, I will remind our listeners that management's prepared remarks today will contain forward looking statements, which are subject to risks and uncertainties, and management may make additional forward looking statements in response to your questions. Therefore, the company claims the protection of the Safe Harbor for forward looking statements that is contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from management's current expectations and any projections as to the company's future performance represent management's best estimates as of today's call. Legacy assumes no obligation to update these projections in the future unless otherwise required by applicable law. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:01:37Thanks, Max. I'm joined today by Jeff Fiedleman, Legacy's Chief Financial Officer. Jeff will discuss our 2024 financial performance, then I will provide additional corporate updates and open the call for Q and A. Jeff? Jeffrey FiedelmanChief Financial Officer at Legacy Housing Corporation00:02:00Thanks, Duncan. Product sales decreased $15,800,000 or 10.9% in 2024 as compared to 2023. This decrease was driven primarily by a decrease in unit volume shipped, primarily in direct sales and inventory finance sales categories. In 2024, our net revenue per product sold increased 1.9% as compared to 2023, primarily because of a moderate increase in unit prices. Consumer MHP and dealer loans interest income increased $3,800,000 or 10.1% from 2023 to 2024 due to growth in our loan portfolios. Jeffrey FiedelmanChief Financial Officer at Legacy Housing Corporation00:02:48This increase was driven primarily by increased balances in the MHP and consumer loan portfolios. Between 12/31/2024 and 12/31/2023, our consumer loan portfolio increased by $17,600,000 our MHP loan portfolio increased by $24,500,000 and our dealer finance notes balance did not change. The change in the balance of our MHP loan portfolio is primarily due to a settlement agreement we reached with a significant borrower as discussed in our 10 ks. Other revenue primarily consists of contract deposit forfeitures, consignment fees, commercial lease rents, land sales, service fees and other miscellaneous income and increased $7,000,000 or 106.3% from 2023 to 2024. This increase was primarily due to $8,900,000 in land sales related to the Forest Hollow mobile home community and the property in Marble Falls, Texas 0 Point 5 Million Dollars in rental income from our mobile home park properties, partially offset by a $1,500,000 decrease in forfeited deposits, a 600,000 decrease in rental income from leased mobile homes and a $300,000 decrease in other miscellaneous revenue. Jeffrey FiedelmanChief Financial Officer at Legacy Housing Corporation00:04:26The cost of product sales decreased $9,600,000 or 9.7% in 2024 as compared to 2023. The decrease in costs is primarily related to a decrease in units sold. Gross profit margin was 30.4% of product sales during 2024 as compared to 31.3% during 2023. The cost of other sales was $8,200,000 in 2024 and primarily reflects the cost associated with our land sales. Selling, general and administrative expenses decreased $1,100,000 or 4.4% in 2024 as compared to 2023. Jeffrey FiedelmanChief Financial Officer at Legacy Housing Corporation00:05:15This decrease was primarily due to a 1,400,000 decrease in warranty costs, a $400,000 decrease in consulting and professional fees, and a $400,000 decrease in salaries and benefit costs, partially offset by a $400,000 increase in real estate taxes and a net 700,000 increase in other miscellaneous costs. Other income expense net increased by $8,300,000 in 2024 as compared to 2023. We had an $8,500,000 increase in miscellaneous net primarily due to: one, gains related to the settlement agreement described discussed above two, a gain on the sale of property in Georgia three, gains related to properties acquired through foreclosure and four, reversals of certain balance sheet liabilities. We had a $400,000 decrease in interest income on other notes and a 200,000 decrease in interest expense. Net income increased 13.2% to $61,600,000 in 2024 compared to 2023. Jeffrey FiedelmanChief Financial Officer at Legacy Housing Corporation00:06:40Basic earnings per share increased $0.32 per share or 14.3% in 2024 compared to 2023. As of 12/31/2024, we had approximately $1,100,000 in cash compared to $700,000 as of 12/31/2023. The outstanding balance of the revolver as of 12/31/2024 and 12/31/2023 was 0 and $23,700,000 respectively. At the end of 2024, legacy's book value per basic share outstanding was $20.4 an increase of 13.9% from the year ended 2023. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:07:34Thanks, Jeff. Before I run through my notes, I want to acknowledge that there's a lot of noise and uncertainty in the market right now. Politics, tariffs, recession risks, interest rate considerations, etcetera. Many of the call participants are long term investors in legacy housing. I don't know how 2025 will shake out, but I can assure you that our team will be in the office every day, managing the business closely and making adjustments as needed. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:08:07We continue to believe in the long term fundamentals of manufactured housing and the value proposition that legacy housing provides its customers. High quality, affordable homes combined with financing solutions that keep monthly payments low. Our target market of homebuyers consists of households with total annual income below $75,000 which comprised 47% of total U. S. Households in 2023. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:08:40This group, nearly half of all households in The United States, has been severely impacted by increasing rental rates, higher prices for site built homes, elevated mortgage rates and stagnant wage growth. A few data points from yesterday's 10 ks filing. The average price for a new single family home in 2023 was $511,000 including the land compared to a manufactured home of $123,000 In 02/2005, '20 years ago, approximately 18% of new single family homes sold in The United States were under 150,000 Today, it's essentially zero. Legacy's average selling price in 2024 was approximately $61,000 per unit, up from $60,000 in 2023. The vast majority of Legacy's business is wholesale, but even with the retail markup and other expenses, our homes and financing solutions provide an affordable alternative to site built homes, which a large portion of households in our country cannot currently afford. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:10:01We continue to see coverage of factory built housing in the media and hear positive talks of regulatory reform from the new administration. The affordable housing crisis is not solved without the manufactured housing industry. Dealer business across most of our footprint is healthy. We are moving out of a seasonally slow season. The team continues to sign new independent dealers in both our Texas and Southeast markets. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:10:33Retail finance fundings in the first quarter of twenty twenty five are tracking well ahead of the 8% growth we saw in 2024. Our community business is improving. As discussed on previous calls, higher interest rates have depressed community transaction volumes, which tends to drive demand for new park model homes. We are receiving more inbound requests for large orders and think the community business will continue to improve in 2025. Legacy's lending portfolios continue to compound. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:11:11For 2024, interest revenue from MHP, retail and floor plan financing was $41,200,000 compared to $37,200,000 in 2023. Our delinquencies remain low, although normalizing to pre COVID levels, and recovery rates are strong. In 2024, average interest rates for new retail loans were 1% higher than 2023. Product gross margins were 30.4% in 2024. Under absorbed labor given lower production levels during the year impacted margins. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:11:51We continue to watch labor closely and expect margins to normalize with production improving. We are also keeping a very close eye on material price fluctuations from the tariffs. We pushed through the first price increase since COVID in February of twenty twenty five. During the fourth quarter, Legacy sold one of the mobile home parks that was deeded to us under the settlement agreement. As Jeff mentioned, the sale resulted in a meaningful gain at year end. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:12:21We are setting and renting homes in the second park now to increase occupancy before monetizing. A few updates on land development. We continue to focus on the properties in Austin. In Bastrop County, our 1,100 pad development near Austin, the roads and utilities are nearly complete in Phase one. We still anticipate selling lots in Phase one this summer. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:12:48As I mentioned during our last call, we own 300 developed lots mobile home lots in Horseshoe Bay, Texas. Our dealership nearby in Marble Falls, Texas is now open and we are selling land and homes there. I'm proud of the team's progress this year. We finished 2024 with 33.5% GAAP net income margins, up from 28.8% in 2023. Over the last three years, we have increased book value by nearly 60% to $494,000,000 dollars There's still a lot of work to do though. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:13:29For 2025, we're focused on sales and specifically park sales in Texas and dealer sales in the Southeast, streamlining our product offering, systems, processes and employee retention at our retail business, continuing to monetize non core assets and finishing construction and putting homes on our land in Austin. Legacy's integrated business model provides multiple avenues to generate returns for our shareholders regardless of economic conditions. We are currently in a meaningful net cash position and if our stock trades off this year, we will repurchase shares aggressively. Operator, this concludes our prepared remarks. Please begin the Q and A. Operator00:14:18Thank you so much. And as a reminder to our audience, Thank you. One moment for our first question. It comes from Mark Smith with Lake Street. Please proceed. Mark SmithSenior Research Analyst at Lake Street Capital Markets, LLC00:14:41Hi, guys. I wanted to just dig in a little deeper on land sales during the quarter. If you can give a little more color on kind of the big sale, how it came about, why at that point to make that sale and then future ones potentially coming? It sounds like you're still trying to improve the other one before selling it. And then also just land acquisitions, I think that you guys may have bought some property in Texas during fourth quarter? Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:15:11Yes. Hey, Mark. Thanks for the question. Yes, there is only one land sale during the fourth quarter and that was the sale of a mobile home park from the settlement agreement in Beaumont, Texas. So that's the big sale. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:15:28Obviously, throughout the year, we did monetize other land that we own, some in Eatonton, as well as down in Horseshoe Bay. And so we are looking at our portfolio closely and if they are non core assets and the price makes sense to monetize them, we will be opportunistic with that going forward. Mark SmithSenior Research Analyst at Lake Street Capital Markets, LLC00:15:58Okay. And did you guys purchase some land in Q4 in Texas? Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:16:05We did not purchase the land. I think what the settlement agreement taught our team is how to foreclose on land. And so there is a meaningful portion of our loan portfolio on the MHP and specifically we call it development loans, but other notes receivable that are secured by land. And if we're tracking borrowers down for payments or notes mature, then we're going to take that land back and we'll monetize it when the price makes sense. But there's a decent amount of equity in that portfolio as well. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:16:58So when we sell it, the returns look pretty good. Mark SmithSenior Research Analyst at Lake Street Capital Markets, LLC00:17:04Okay. And that brings up a good point. Maybe if you can speak broadly about any concerns that investors may have around delinquency, squeeze consumers, kind of a tough environment today on your ability to to take back and kind of be covered if a loan goes bad whether it's MHP or consumer? Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:17:30Yes, I think they are a little bit different between the two portfolios. So maybe we start on the retail loan portfolio. We've seen past due balances creep up a little bit, but it's certainly not to a point where we're concerned. And I think what's important to understand is there are several features of that loan portfolio that make the recovery really strong. I mean, one is, you've seen the prices of homes since COVID go up essentially 40%. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:18:19And so if you got a meaningful down payment and somebody has made payments on homes for a period of time, when we're selling we're currently selling repos now for around 100% of the principal that's outstanding on those. The other piece is there are features of that of those loans where we work with our dealers to make sure that we're able to repo houses and resell houses and the economics make sense. On the MHP side, and really the key to both of these portfolios is keeping the monthly payments affordable. If a park owner is able to buy houses from us and finance them through us and we keep their monthly payment low, then they are able to rent that house out to a renter and generate a profit. And as long as they get those houses set up, the numbers work. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:19:35I think where people get into trouble is they take houses, they don't get them set up and they're paying us and not generating rental income. So we keep a close eye on that. And on the MHP side, there's a lot of levers for recovery. And obviously, this year, we tested that in a big way and ultimately didn't flush a dollar of that through our income statement and have had some significant gains as we've monetized those assets. Mark SmithSenior Research Analyst at Lake Street Capital Markets, LLC00:20:18Okay. Next question for me is just looking at changing immigration policies, potential higher deportations. Curious any potential impact this could have both on customers and demand as well as maybe your labor market? Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:20:37Yes. I mean, as a public company, I mean, we've been e verifying for years. So everyone we hire goes through that process. I think even with some of the economic indicators down, I think any manufacturer is struggling with labor. And so that's something that we continue to keep a close eye on, but aren't worried about that necessarily impacting our workforce. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:21:12When we finance someone purchasing a home, the underwriting criteria requires certain things from these borrowers and these aren't people that came across the border and decided to buy a mobile home. These are people that have been in the country for years and they have stable jobs and they can afford that house. So while there's noise in the market, we haven't seen a material change in our business from the immigration policies. Mark SmithSenior Research Analyst at Lake Street Capital Markets, LLC00:21:57Perfect. And last one for me. SG and A, certainly down at good healthy levels here. I'm just curious the sustainability and if there's anything we should have on our radar as far as maybe increasing SG and A expenses here in 2025? Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:22:14Well, there is as you know, Mark, from covering us for a long time, SG and A is a hot topic with the Board and under a always under a microscope. So we're going to continue to run the business the same way and I don't see any material changes in SG and A. Mark SmithSenior Research Analyst at Lake Street Capital Markets, LLC00:22:37Excellent. Thank you. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:22:39Yes. Thanks, Mark. Operator00:22:42Thank you. Our next question comes from the line of Daniel Moore with CJS Securities. Please proceed. Will GildeaEquity Research Associate at CJS Securities00:22:51Hi. This is Will on for Dan. Can you talk about your expectations for production rates across your three plants for Q1 and first half of twenty twenty five? Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:23:02Hey. Yes. Well, like I mentioned in the prepared remarks, I wish I knew I wish I had a crystal ball for 2025, but there's obviously a lot of moving pieces. We've been really focused on ramping up production at our Texas facilities. We're heading into the spring selling season with a good backlog and are heading to a mobile home show next week, we hope to continue to build that backlog. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:23:43So our production is still not where we want it. I think you know but I think ultimately we're moving in the right direction. Georgia is a little bit slower than we'd like. We've continued to grow the park side of the business in Georgia. The dealer slide lags, but we're focused on building a backlog there and ramping production from the levels that we're at right now. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:24:21But overall, I'm comfortable with it, but it's our number one focus right now is ramping up production and getting homes shipped. Will GildeaEquity Research Associate at CJS Securities00:24:36Thank you. And then just maybe you could add a little bit more color to backlogs exiting this quarter compared to last quarter and year over year? Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:24:47Yes. I mean, if you follow the company for as you guys have for the past couple of years, it's been a little choppy, like we took pricing up with COVID. I think our prices were elevated when some of our competitors came off of pricing. And now with tariffs and with the labor market, that pricing is normalized and the backlog looks pretty healthy. We don't report a backlog number, but certainly in Texas, we've got a pretty meaningful backlog and in Georgia, we're working on it. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:25:39Thank you very much. Operator00:25:57As I see no further questions in queue, I will turn the call back to Duncan Bates for his final comments. Duncan BatesPresident and Chief Executive Officer at Legacy Housing Corporation00:26:04Thank you for joining today's earnings call. We appreciate your interest in Legacy Housing. If you're in Biloxi for the Mobile Home Show next week, please come by and see us. Operator, this concludes our call. Operator00:26:17Thank you so much and thank you everyone who participated in today's conference. You may now disconnect.Read moreParticipantsExecutivesDuncan BatesPresident and Chief Executive OfficerMax AfrickGeneral CounselJeffrey FiedelmanChief Financial OfficerAnalystsMark SmithSenior Research Analyst at Lake Street Capital Markets, LLCWill GildeaEquity Research Associate at CJS SecuritiesPowered by