Legacy Housing Q2 2025 Earnings Call Transcript

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Provided by Quartr
August 8, 2025

Key Takeaways

  • Positive Sentiment: Product sales increased 21.3% year-over-year in Q2 2025, driven by higher volumes in inventory finance, retail store, and commercial channels.
  • Positive Sentiment: Net revenue per product sold rose by 10.5% compared to Q2 2024, reflecting a larger share of higher-priced consumer unit sales.
  • Negative Sentiment: Net income declined 9.2% to $14.7 million and EPS fell 9% to $0.61 per share, primarily due to lower other income and higher operating expenses.
  • Positive Sentiment: The company repurchased 260,635 shares for $5.8 million in Q2 2025 and retains an $8.1 million authorization, underscoring confidence in long-term value.
  • Neutral Sentiment: Legacy continues simplifying its product line and building backlog with strong dealer channel traction, while noting slower activity in its Southeast region.
AI Generated. May Contain Errors.
Earnings Conference Call
Legacy Housing Q2 2025
00:00 / 00:00

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to Legacy Housing Corporation's second quarter twenty twenty five earnings call. At this time, all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session. And to ask a question during the session, you would need to press 11 on your telephone.

Operator

You would then hear an automated message advised that your hand is raised. And to withdraw your question, please press 1. Please be advised that today's conference is being recorded. I would like now to turn the conference over to Duncan Bates, President and Chief Executive Officer. Please go ahead, sir.

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

Good morning. This is Duncan Bates, Legacy's President and CEO. Thank you for joining our second quarter twenty twenty five conference call. Max Zafrick, Legacy's General Counsel, will read the Safe Harbor disclosure before getting started. Max?

Max Africk
Max Africk
General Counsel at Legacy Housing Corporation

Thanks, Duncan. Before we begin, I will remind our listeners that management's prepared remarks today may contain forward looking statements, which are subject to risks and uncertainties, and management may make additional forward looking statements in response our questions. Actual results may differ from management's current expectations, and Legacy assumes no obligation to update these projections in the future unless otherwise required by applicable law.

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

Thanks, Max. I'm joined today by Jeff Feinman, Legacy's Chief Financial Officer. Jeff will discuss our second quarter financial performance, then I will provide additional corporate updates and open the call for q and a.

Jeff Fiedelman
Jeff Fiedelman
CFO at Legacy Housing Corporation

Thanks, Duncan. Product sales primarily consist of direct sales, commercial sales, inventory finance sales, and retail store sales. Product sales increased $6,700,000 or 21.3% during the three months ended 06/30/2025 as compared to the same period in 2024. This increase was driven by an increase in unit volume shipped primarily in inventory finance sales, retail sales, and mobile home park sales categories. For the three months ended 06/30/2025, our net revenue per product sold increased by 10.5% as compared to the same period in 2024.

Jeff Fiedelman
Jeff Fiedelman
CFO at Legacy Housing Corporation

The increase is primarily due to an increase in units sold to consumers, which are sold at higher retail prices. Consumer MHP and dealer loans interest income increased 1,000,000 or 10.6% during the three months ended 06/30/2025 as compared to the same period in 2024. Between 06/30/2025 and 06/30/2024, our consumer loan portfolio increased by $24,600,000 our MHP loan portfolio increased by $20,300,000 and our dealer finance notes decreased by 500,000.0 Other revenue primarily consists of contract deposit forfeitures, consignment fees, commercial lease rents, land sales, service fees, and other miscellaneous income and decreased 100,000.0 or 10.8% during the three months ended 06/30/2025 as compared to the same period in 2024. This decrease was primarily due to a $200,000 decrease in forfeited deposits, partially offset by a net $100,000 increase in other miscellaneous revenue. The cost of product sales increased $4,400,000 or 20.3% during the three months ended 06/30/2025, as compared to the same period in 2024.

Jeff Fiedelman
Jeff Fiedelman
CFO at Legacy Housing Corporation

The increase in costs is primarily related to the increase in units sold. Gross profit margin was 32.4 of product sales during the three months ended 06/30/2025 as compared to 31.9% during the three months ended 06/30/2024. The cost of other sales was 600,000.0 during the three months ended 06/30/2025. Selling, general, and administrative expenses increased 1,100,000.0 or 19.1% during the three months ended 06/30/2025 as compared to the same period in 2024. We had a 1,100,000.0 increase in warranty expense, primarily due to an over accrual and warranty costs in the 2024 that we reversed.

Jeff Fiedelman
Jeff Fiedelman
CFO at Legacy Housing Corporation

And we also had a 500,000.0 increase in repossessed home expense, a 200,000.0 increase in bad debt expense, a 100,000.0 increase in loan loss provision, offset by a 600,000.0 decrease in legal expense, a 100,000.0 decrease in property tax expense, and a net 100,000.0 decrease in other miscellaneous expense. Other income decreased 2,800,000.0 or 74.5% during the three months ended 06/30/2024 as compared to the same period in 2024. We had a a we had a one decrease of 500,000.0 in nonoperating interest income reflecting a lower balance of of other notes receivable. Two, a 2,500,000 decrease in miscellaneous income, primarily due to land sales and a reversal of accrued liabilities during the three months ended 06/30/2024 that did not occur during the three months ended 06/30/2025. And three, a decrease of 200,000 in interest expense.

Jeff Fiedelman
Jeff Fiedelman
CFO at Legacy Housing Corporation

Net income decreased 9.2% to $14,700,000 in the 2025 compared to the 2024. Basic earnings per share decreased 9% to $0.61 per share in the 2025 compared to the 2024. As of 06/30/2025, we had approximately $2,600,000 in cash compared to $1,100,000 as of 12/31/2024. We drew a small amount on the revolver in the second quarter. The outstanding balance of the revolver was $100,000 as of June 3025, and was zero as of 12/31/2024.

Jeff Fiedelman
Jeff Fiedelman
CFO at Legacy Housing Corporation

At the end of the 2025, Legacy's book value per basic share outstanding was $21.32, an increase of 11.2% from the same period in 2024. Finally, we repurchased 260,635 shares of common stock for 5,800,000.0 during the three months ended 06/30/2025. As of 06/30/2025, we had a remaining authorization of approximately $8,100,000 on our share repurchase program.

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

Thanks, Jeff. I'm pleased with our second quarter results. Our focus has remained on product sales. While there's still uncertainty in the market and weakness in certain geographies and channels, we are seeing positive signs from the changes we've made. Earlier this year, we took a hard look at historical sales data and simplified our product line.

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

That process had its challenges, but some of the adjustments are paying off. As Jeff mentioned, product sales increased 21.3% during the second quarter compared to the same period in 2024. That growth was primarily driven by dealer activity. Product sales were up 58% sequentially over the 2025. Inventory finance sales or floor plan sales to independent dealers increased $4,900,000 or 53.3% compared to the 2024.

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

Retail sales or sales from our company owned retail stores rose $2,900,000 or 64.2% over the same period. These gains reflect stronger demand across our dealer channel and our continued traction from our product line simplification efforts. Commercial sales or sales to community owners increased 5.3% during the three months ended June 30 compared to the same period in 2024. Our community customers continue to face headwinds, including elevated interest rates, higher operating costs, and budget constraints among renters. Despite these challenges, we're encouraged by ongoing discussions with both new and existing community owners regarding large orders, which should support volume growth in this channel.

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

Product gross margins were 32.4% in the 2025. I'm proud of our team's strong execution and maintaining healthy margins during a rapidly evolving environment for materials and labor costs. We remain disciplined in our pricing strategy and continue to manage expenses carefully to protect profitability. Our top priority for the remainder of 2025 is continuing to build our backlog, which should support increased production volume in the coming quarters. We expect higher output out of our Texas plants where demand remains stronger, while activity in the Southeast is comparatively slower.

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

We continue to actively manage our loan portfolios. Since the 2024, our retail loan portfolio has grown by 24,600,000, while our MHP loan portfolio has grown by 20,300,000. Reflecting strong demand in our dealer channel, retail loan fundings were up 49% in the 2025 compared to the same period in 2024. There were no material land sales during the 2025, but we will continue to evaluate opportunities to monetize noncore land when pricing reflects underlying value. In the 2024, we completed a noncore land sale that generated a meaningful profit, creating a challenging year over year comparison for this quarter's earnings.

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

We are focused on completing phase one of Falcon Ranch, our 1,100 lot development in Bastrop County. Phase one includes 115 lots with roads and utilities already complete. The final remaining project, a bridge, is currently under construction. At the same time, we're making progress on phase two where utilities are now in place and road work is underway for the first 350 lots. Over the last eighteen months, we repurchased over 552,000 shares of common stock in the open market for an aggregate cost of 11,900,000.0, reducing out our outstanding share count by over 2%.

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

These repurchases reflect our continued confidence in the long term value of the business and our disciplined approach to capital allocation. With no debt and over 10,000,000 in cash on the balance sheet today, we remain well positioned to continue repurchasing shares. We are keeping our eyes on the Road to Housing Act, which passed the Senate Banking Committee and is awaiting a full Senate vote. The bill reauthorizes HUD's price program, which provides grants to improve infrastructure like water and sewer systems and manufactured housing communities. It also removes the federal requirement for a permanent chassis, lowering build costs and allowing for more flexible home designs.

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

If passed, the bill should support growth in both home sales and community development. Operator, this concludes our prepared remarks. Please begin the Q and A.

Operator

The first question comes from Rohit Seth with B. Riley Securities. Your line is open.

Rohit Seth
Senior Research Analyst at B. Riley Securities

Hi. Thanks for taking my question. So good order flow coming in through the second quarter, a good rebound on volumes. Just curious what you're seeing as we enter July, August. Have you seen the same momentum continue?

Rohit Seth
Senior Research Analyst at B. Riley Securities

And is it coming from the same channels? Just get a sense of how you see the rest of the year.

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

Yeah. We hey, Rohit. Mhmm. You know, we're really we're happy with the second quarter performance. Obviously, the, you know, the dealer side of our business really drove the, you know, the the the revenue growth. Continue to see that, you know, this quarter. And, you know, we're seeing signs of life on the community side. I think the, you know, the difficult thing has been, you know, the prices for mobile home parks have gone up pretty dramatically. You've got increased financing costs. You got you know, homes are more expensive.

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

Operating costs are higher, and you've got a you've got a renter that, you know, can only afford so much. And so I think, you know, there there is a shift to, you know, smaller houses, and we're having some success in that. But we really you know, we need to land a couple of these large orders, you know, to really see an uptick in that side of our business for the rest of the year.

Rohit Seth
Senior Research Analyst at B. Riley Securities

K. And then on the Bastrop, looks like you got making some progress there. Do you think you'll be selling plots there by the fourth quarter? Is this something happening in '25, or is this more 2026?

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

You know, that's the that's the goal. I mean, the final piece of this thing is we've gotta build a bridge, and the bridge is under construction, you know, and it's well underway. But, you know, ultimately, Roads are and utilities are all in phase one. You gotta complete the bridge to, you know, connect it to the, you know, infrastructure outside of the the community. And it's not you know, I wouldn't say we're, like, crossing any waterway.

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

I did and, but it's certainly a project. So the goal is to get that done. There's a way to, you know, shortcut kind of, you know, starting to sell lots. That's something we're looking at, you know, where we can go ahead and plot before the, before the bridge is done. But, you know, we're we're just well underway on construction there.

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

So, you know, the goal is certainly to sell lots as as soon as possible. There's a lot of demand down there. We've got a dealer on-site who's, you know, who's been doing, you know, really well with with sales this year. And, you know, what's been interesting for me to watch is, like, we're really gaining ground on phase two where you've got all the utilities in, and, we're putting the roads down for the first 350 rental lot. So good progress.

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

We've made a couple key hires down there. You know, we've got the we've got the cash to push this thing forward, and, we're working as as hard as we can to get it open.

Rohit Seth
Senior Research Analyst at B. Riley Securities

Yeah. Fantastic. If I can squeeze one last one in on the s g and a line. It's running up a little bit higher than, you know, as a percentage of sales. And is this, like, the new normal or at least for the year?

Rohit Seth
Senior Research Analyst at B. Riley Securities

Just any sense of kind of the trajectory on SG

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

and No. I think SG and A will kinda dip back in line to where it's where it's been. We had some kinda wonky comparisons with, you know, year over year accruals for things like warranty expense and, you know, legal expense and and others that, you know, shifted that upward.

Rohit Seth
Senior Research Analyst at B. Riley Securities

Alright. Fantastic. Thank you. I'll pass it on.

Operator

Thanks. And the next question will come from Alex Rajaele with Texas Capital Securities. Your line is open.

Alex Rygiel
MD & Head - Equity Research at Texas Capital Securities

Thank you. Good morning, Duncan.

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

Hey. Good morning, Alex.

Alex Rygiel
MD & Head - Equity Research at Texas Capital Securities

As it relates to being encouraged by discussions with community owners for large orders, what are the primary items that are either sparking these interests or maybe keeping them on hold until an order?

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

Well, you know, we we've got a handful of, you know, I would call them, like, large customers that we've worked with for a long period of time. And, you know, these guys tend to buy communities that are in disrepair, and they fix them up, and they replace all the homes. And, you know, then they move to the next one. And so, you know, especially through, like, COVID, we had some, you know, some huge orders as these guys really expanded, and then they took a, you know, they took a breather. And so, you know, what we're seeing is we've got some large customers that have either, you know, purchased or, have communities under contract where, you know, they'll need a decent amount of homes.

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

And I I think, you know, on the on the other side, on the new customers, I mean, we've been for the past couple years, you know, we've been growing with some younger guys as we replace, you know, the, you know, kind of the legacy customer base. And, you know, those guys may start by ordering six homes, and then next year, they order 20 homes. And, you know, you just keep you keep growing with them as their portfolio builds. I think, you know, one change is that it seems like the financing markets have opened up a little bit. Right?

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

So we're seeing, you know, some payoffs on the on the MHP portfolio as, you know, now we've got customers who have parks, you know, with newer houses in them, and they're stabilized. And they're, you know, they're monetizing those and, you know, rolling those those those gains into new properties to do the same thing.

Alex Rygiel
MD & Head - Equity Research at Texas Capital Securities

Makes sense. And then can you talk a bit about average selling price? Are you surprised that it's holding up here, and any thoughts there on that?

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

Yeah. I mean, the the average selling price for the quarter, you know, we went, like, on a quarter quarter over quarter basis from, say, 61,000 to 68,000. I think the bulk of that was just driven by, you know, the increase in, you know, sales through our company owned retail stores. You know? But we we were, you know, we were slower to raise raise prices during COVID.

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

You know, we've raised prices more aggressively, you know, with with as we've figured out kind of the, you know, the the impact of tariffs on our costs. And so, you know, I I do, you know, I I do expect it to stay elevated, but certainly, you know, there's a point where it's at the detriment of or to the detriment of, you know, volume through the plants.

Alex Rygiel
MD & Head - Equity Research at Texas Capital Securities

And then you talked a bit about Georgia being a little bit slower maybe in the second half. Any additional color on that?

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

Yeah. The Southeast market just feels, you know, feels slow. I think, you know, Cavco, commented on that during their call. You know, Florida's slower. We're seeing, you know, similar things in the Southeast.

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

I mean, we've got customers that are doing things. We've, you know, won some new customers over there. We've had some, you know, workforce housing builds over there. Dealer base isn't as strong out of that plant. So you're, you know, you're you're more reliant on, or we're more reliant on community customers.

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

And but it it just seems a little bit slower than what we're seeing in Texas.

Alex Rygiel
MD & Head - Equity Research at Texas Capital Securities

Understood. Thank you.

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

Thanks, Alex.

Operator

And the next question is going to come from Daniel Moore with CJS Securities. Your line is open.

Daniel Moore
Director - Research at CJS Securities

Good morning, Duncan. Good morning, Jeff. Wanted to so obviously, you had a really nice jump in in product sales in the quarter. Volume's up double digits. Year to date, we're we're relatively flat.

Daniel Moore
Director - Research at CJS Securities

Just wanna make sure and and and just kind of remind me, were were there any sales that may have slipped from q one to q two, or is it more demand actually improving, you know, as we've worked through the year?

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

You know, I think we had we had some orders on the community side that slipped. I mean, first quarter wasn't our strongest performance from a product sales standpoint. But, you know, you see that, you know, community sales, at least quarter over quarter, are you know, were relatively flat. They were up, you know, 5% or so. So, you know, there were some like, there were certainly some orders that slipped, but they were mainly on the, you know, mainly on the community side.

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

I think, you know, we saw on the dealer side was was actually some you know, a little bit better strength. But, you know, the market's still choppy. I mean, it's still, like, Parkside's slower than we'd like it to be, You know, certain geographies either even within, you know, areas that we serve out of our Georgia plant or out of our Texas plants seem to be slower than others. So, you know, we're we're cautiously optimistic on the year, but, you know, we continue to be here every day working and trying to get houses built and shipped.

Daniel Moore
Director - Research at CJS Securities

Got it. And then specifically for retail, obviously, retail stores had their highest quarter, you know, over 7,000,000 in sales, highest quarter that we've seen in in multiple years. Is that a function, you know, I guess, talk to the sustainability of that and and and any update you can provide on how the investments you've been making in retail sales force are progressing.

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

Yeah. I mean, the the key to retail's systems processes and and people, and you need to get people, you know, selling houses and making commissions to retain them. And I think that's something that we've, you know, we've struggled with for a while. We've we've got, you know, a pretty good team on the retail side. They had a great quarter.

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

You know? We've got certain stores that are performing better than others. And, you know, the focus right now is bringing the underperforming stores up to, you know, some type of baseline, you know, and continuing to perform at the stores that are doing better. So it was a good quarter for the retail team. I think it's a, you know, representative of what we can do, and and we just gotta we gotta keep we gotta keep pushing forward on that.

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

You know, July was a little bit slower, but, you know, not not terrible either. So I I think some of these, you know, some of these changes are are helping, but we still have a ways ways to go. I mean, I I really view that as an opportunity for us. And you see what it does if if we can push more volume through that channel. You know, it does help us on the, you know, on the revenue side, and and it's reflected in the average selling price.

Daniel Moore
Director - Research at CJS Securities

Helpful. One or two more. It's just a little bit of so on on the gross margin side, overall, saw a little bit of pressure, you know, year over year, but then you called out, I think, you know, on product sales gross margin improved. So just I guess, if I look at holistically, we were at 47%, for the company. Is that a you know, we expect that to be kinda new level or improve as we move forward just to talk about the puts and takes there?

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

Yeah. See, when I when I when I talk about gross margin, I'm really just looking at the, you know, the product gross margin. So product revenue and and, the cost of goods sold.

Daniel Moore
Director - Research at CJS Securities

Mhmm.

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

And so in '24, I've got 31.9%, you know, which were you know, jumped up to 32.4% for the 2025. I think if you look at it as a whole, you know, we had a bump in SG and A due to, you know, some expenses, but also due to kind of some, you know, some mismatches of accruals from the 2024 that, you know, if you look at gross margin in total, it's lower for the second quarter. I but I'm I'm discussing just product gross margin.

Daniel Moore
Director - Research at CJS Securities

Makes sense. Lastly, I think you touched on this, but, you know, bought back 6,000,000 of stock in the quarter, I think 11,000,000 year to date. But the stock's sitting here, you know, not too far above book value. Is that likely continued use of capital and cash flow as we move forward?

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

Yeah. I mean, we've gotta weigh it against other opportunities. And, you know, we're seeing a lot right now, on the on the lending side, you know, to put put money to work at at good rates of return. You know, the the business has, you know, over the last twenty years, you know, generated, say, you know, 15 or 10 to 15% after tax returns pretty consistently. And so, you know, we're, we obviously we're we're watching the stock, but we're gonna be opportunistic buyers.

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

We're not just gonna buy stock just to buy it if we've got opportunities to deploy the capital elsewhere.

Daniel Moore
Director - Research at CJS Securities

Very good. Makes sense. Appreciate the color.

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

Thanks, Dan.

Operator

And the next question comes from Mark Smith with Lake Street.

Mark Smith
Senior Research Analyst at Lake Street Capital Markets

Duncan, wanted to ask first just you're just talking about products margin a little bit. Would love to hear kind of your outlook as we think about tariffs and some inflationary pressure, if you're seeing any items that are that are moving higher, kind of your outlook here as we think about second half or even into next year.

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

Yeah. As you can imagine, there's a lot of moving parts. You know, I think from, you know, the inner the, you know, the tariffs and the impact on international goods, you know, we've adjusted our pricing accordingly. But you've got, you know, you've got moving, like, moving commodity prices in other materials. I mean, you've seen kind of lumber futures have crept up.

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

OSB has been low. Steel's been, you know, relatively flat. And but, you know, what's what I don't think is going lower lower labor costs. And so that's, you know, something that we're keeping an eye on. I think there's a, you know, there's a balance between price and volume, and, you know, that's like you you gotta keep you gotta keep the plants running.

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

You gotta keep you know, you can't be under absorbed on labor. But, certainly, the, you know, the input prices on, you know, most of these products that we buy to assemble houses are going up.

Mark Smith
Senior Research Analyst at Lake Street Capital Markets

Yeah. And back to to pricing a little bit in the ASP, it sounds like it was it was largely a function of of the sales mix. But but can you quantify or talk to maybe over the last six months any any kind of pricing action that you guys have taken?

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

Yeah. I mean, we've we've had, know, we've had a couple price increases this year. We started in February. You know, we had a a one that I'd say it's more material kind of, you know, mid to late June. And it's, you know, it's something that we're, like, we're keeping an eye on, but it's also a difficult time right now.

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

I mean, there just seems to be a lot of moving, you know, moving pieces with commodity prices. I think with a little bit higher prices, it does give you some flexibility, you know, to run, like you know, to put the advertising machine to work and do some, you know, sales and other types of incentives, especially as we head into our fall show coming up in September.

Mark Smith
Senior Research Analyst at Lake Street Capital Markets

K. And the last one for me. Just just curious your thoughts around kind of consumer behavior, you know, and if you're seeing a difference out there between kind of the the renter in how they're holding up, versus kind of a a homeowner or home buyer. Any differences there, and and if there's some pressure on renters if that's maybe hurting the the MHP market a bit.

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

You know, I think the renters I think the renters are, you know, fairly, maybe not tapped out, but they're they're certainly price sensitive. And, you know, if if your if your mobile home park model, you know, is showing that you're gonna, you know, continue to raise rents and, you know, costs of everything else have gone up. All your operating costs, you know, homes are more expensive, financing's more expensive. You know, I think it I think it does put pressure on the on the community operators where, you know, the spread isn't as great as it was a few years ago, which is, you know, shifting a lot of these guys to smaller houses that they can rent at, you know, similar prices and keep them, you know, keep the monthly payments affordable. I think, you know, the the second quarter, obviously, dealer business performed a little bit better, but I wouldn't say that, you know, demand is off the charts on the on the dealer business, you know, right now.

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

I mean, I think it's it's spotty. Customers are price conscious. And, you know, but compared to a stick built home, I mean, you're, you know, you're you're you're so much more affordable. And that although the, you know, the next few quarters could be choppy, you know, I really don't think that, you know, the affordable housing crisis is fixed in this industry or fixed, you know, in this country without this industry. And so the you know, some of the some of the work at, you know, legislative level is, you know, is pretty encouraging where there's been a lot of talks, you know, for years about regulatory reform to the HUD code, and, you know, you're starting to actually see some traction given, you know, how bad the affordability problem is in this country.

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

And so, you know, I I don't think it like, there's we're we're cautiously optimistic, but I think longer term, our outlook is is pretty strong.

Mark Smith
Senior Research Analyst at Lake Street Capital Markets

Excellent. That's helpful. Thank you.

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

Alright. Thank you.

Operator

I show no more further questions in the queue. I would now like to turn the call back over to Duncan for closing remarks.

Duncan Bates
Duncan Bates
President & CEO at Legacy Housing Corporation

Thank you for joining today's earnings call. We appreciate your interest in Legacy Housing. We're hosting our fall show in Fort Worth on September. Feel free to register on our website. Operator, this concludes our call. Thank you.

Operator

Thank you. This does conclude today's conference call, and thank you for participating. And you may now disconnect.

Executives
    • Duncan Bates
      Duncan Bates
      President & CEO
    • Max Africk
      Max Africk
      General Counsel
    • Jeff Fiedelman
      Jeff Fiedelman
      CFO
Analysts
    • Rohit Seth
      Senior Research Analyst at B. Riley Securities
    • Alex Rygiel
      MD & Head - Equity Research at Texas Capital Securities
    • Daniel Moore
      Director - Research at CJS Securities
    • Mark Smith
      Senior Research Analyst at Lake Street Capital Markets
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