Legacy Housing Q2 Earnings Call Highlights

Key Points

• Record Q2 results: Revenue rose 32.3% year over year to $66.3 million, while net income increased nearly 60% to $23.5 million and diluted EPS climbed to $0.99.
• Workforce housing drove growth: Product sales increased 40% as shipments rose to 718 homes, including 113 units delivered under a 380-unit contract expected to continue through 2026. Management cited a healthy backlog but said securing trained labor remains a key constraint.
• Financial position strengthened: First-half operating cash flow more than doubled to $24.4 million, cash reached $29 million, and the company had no borrowings under its $50 million revolving facility. Legacy also reported solid credit quality, though it modified a $48.6 million matured mobile-home-park loan.

Legacy Housing NASDAQ: LEGH reported record second-quarter net income as revenue growth was driven by higher-value home sales and the start of deliveries under a large workforce housing contract.

Total net revenue rose 32.3% year over year to $66.3 million for the second quarter of 2026, while net income increased nearly 60% to a company-record $23.5 million. Diluted earnings per share rose to $0.99 from $0.60 in the prior-year quarter, Chief Financial Officer Jon Langbert said on the company’s earnings call.

Workforce Housing Deliveries Lift Product Sales

Product sales increased 40% to $53.8 million, supported by a 27.3% increase in unit shipments to 718 homes. Net revenue per unit rose to approximately $74,900 from $68,100 a year earlier, which Langbert attributed to a shift toward higher-value homes.

The company shipped 113 units during the quarter under a 380-unit workforce housing contract, with deliveries expected to continue through the remainder of 2026. Commercial sales to mobile home parks also rose about 12.5%.

Those gains were partly offset by lower dealer inventory finance sales, as dealers continued to sell through existing inventory, as well as modestly lower direct and retail-store sales.

CEO Kenneth E. Shipley said Legacy has a broader backlog beyond workforce housing, citing expanded sales efforts in Texas and Georgia, increased mobile home park activity, and progress with independent dealers.

“We’ve got a healthy backlog everywhere right now,” Shipley said.

Management said it sees further workforce housing opportunities, including potential demand associated with data center construction projects. However, Langbert identified the ability to secure and retain trained labor as the company’s principal near-term constraint on converting its sales opportunities into production.

Loan Income, Cash Flow and Balance Sheet

Interest income from Legacy’s loan portfolio increased 5.4% to $11.5 million, primarily due to growth in its consumer lending book. At quarter-end, the consumer loan portfolio totaled approximately $202.2 million, notes receivable from mobile home parks were approximately $209 million, and dealer inventory finance receivables were approximately $23.2 million.

Langbert said credit quality remained solid across the company’s lending portfolios. Legacy recorded a roughly $600,000 benefit from its provision for loan losses during the quarter, compared with a $1.1 million expense in the prior-year period. Beginning in the second quarter, the company began presenting the provision for loan losses as a separate line item rather than within selling, general and administrative expenses.

Operating cash flow for the first half of 2026 reached $24.4 million, compared with $11 million a year earlier. The increase reflected stronger earnings and a $10.7 million increase in customer deposits, including a roughly $7.1 million non-refundable advance received during the first quarter related to the workforce housing order.

Legacy ended the quarter with $29 million in cash, up from $8.5 million at the end of 2025, and no borrowings under its $50 million Prosperity Bank revolving credit facility. Stockholders’ equity was $562.2 million at quarter-end, while book value per share was $23.64.

The company’s effective tax rate was 11.2%, down from 17.3% a year earlier. Langbert said the rate benefited from the Federal Energy-Efficient Home Tax Credit, or Section 45L, and the reversal of certain uncertain tax position accruals. He said Legacy expects its effective tax rate to move closer to the statutory rate during the second half after the Section 45L credit terminated June 30.

Real Estate, Technology and Financing Updates

Shipley said Legacy is nearing key development milestones at its Bastrop County, Texas, project, including a Texas Department of Transportation driveway and final plat filing. He said the company could begin placing homes at the site before the end of the year, though he cautioned that timing remains dependent on governmental approvals and other development steps.

Langbert said the extended development timeline has coincided with appreciation in lot values in the Austin-area market.

During the question-and-answer session, Langbert also described efforts to introduce more technology and artificial intelligence tools across the business. The company has created a financial analysis department with four analysts working on areas including bills of materials, manufacturing processes, sales software, loan underwriting and pricing of repossessed homes.

“We are absolutely adding technology where we can through the entire production cycle,” Langbert said.

Legacy received approximately $700,000 in tariff refunds during the quarter following the Supreme Court’s ruling on IEEPA tariffs, benefiting gross margin, according to Langbert. He added that rates on many Chinese-origin goods remain above pre-2025 levels, and the company continues to respond through supplier diversification, increased domestic sourcing and selective price adjustments.

Litigation and Leadership Change

Langbert said Legacy’s litigation involving Americasa, a manufactured housing business whose assets Legacy acquired in late 2025, is now pending in Texas Business Court. Legacy sued the sellers in March over alleged misrepresentations and post-closing misappropriation of receipts, while the sellers have filed counterclaims that Legacy believes lack merit. The company said the case could result in future adjustments to provisional acquisition accounting, depending on its outcome.

Legacy also wrote off its approximately $560,000 minority investment in Corpus Americasa during the quarter.

Separately, Legacy modified a roughly $48.6 million note owed by a group of mobile home park borrowers after it matured in July without being repaid in full. Since quarter-end, the company received a $2 million principal payment and agreed to an 18-month interest-only period followed by amortizing payments at a market rate, along with additional collateral and an increased personal guarantee. Langbert said Legacy does not expect to recognize a loss based on the collateral.

The call also marked the retirement of Curt Hodgson as executive chairman and director in July. Shipley, Legacy’s co-founder and CEO, praised Hodgson’s more than four decades of work building the company and said Legacy would continue its focus on profitability.

About Legacy Housing (NASDAQ:LEGH)

Legacy Housing Corp. designs, builds and markets factory-built homes, focusing on both single-section and multi-section manufactured housing products. The company offers a range of floor plans and customization options, including energy-efficient features and accessible design elements. Its core business activities encompass in-house design, procurement of building materials, plant-based construction and nationwide distribution through an independent network of retail partners.

Founded in 2009 and headquartered in Dallas, Texas, Legacy Housing operates in key regions across the southeastern and southwestern United States.

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