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Financial Data and Key Metrics Changes - Home sales decreased by $1.4 million, or 4.8%, during Q3 2025 compared to the same period last year, primarily due to declines in sales to mobile home park customers and independent dealers [5] - Net revenue per unit increased approximately 8% to $68,500 from $63,500 year over year [5] - Net income decreased by $7.2 million, or 45.3%, to $8.6 million compared to $15.8 million in Q3 2024, with a net income margin of 21.4%, down from 35.7% [12] - For the nine months ended September 2025, net income declined $13 million, or 28.7%, to $33.6 million from $47.1 million [12] Business Line Data and Key Metrics Changes - Product sales remained relatively flat year-to-date, declining slightly by $1.2 million, or 1.3% [6] - Consumer MHP and dealer loan interest income increased to $10.9 million, up 5.4% during Q3 compared to the prior year [6] - Other revenue decreased by $3 million, or 79%, for Q3 2025 compared to Q3 2024, primarily due to a significant land sale in the prior year [8] Market Data and Key Metrics Changes - The Texas Manufactured Housing Association reported a seasonally adjusted drop of 3.8% in August and a raw total decline of 6.1% from September 2024 [15] - Despite macroeconomic headwinds, the company held a successful annual show in September, leading to higher production rates expected for Q4 2025 [15] Company Strategy and Development Direction - The company is focusing on reducing working capital, particularly raw material and finished goods inventory, to free up $10-$20 million for reinvestment [17] - The acquisition of Americassim is aimed at enhancing retail distribution and integrating remote management technology to improve sales growth [19][20] - The company plans to increase its retail sales significantly, targeting a 50-100% increase in 2026 compared to 2025 [58][60] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about the slowing industry and the impact of tariffs and labor costs on profitability [15][29] - The company remains optimistic about the Texas market, anticipating strong demand due to upcoming housing needs related to data centers [18] - Management noted that the consumer loan portfolio remains strong, with 99% of mobile home notes performing as agreed [16] Other Important Information - The company ended Q3 2025 with $13.6 million in cash and a new revolving credit facility of $50 million [13] - The book value per share increased to $21.85, reflecting a strong balance sheet despite lower sales [13] Q&A Session Summary Question: Can you discuss the Americassim asset purchase and its revenue model? - The acquisition focuses on the HomeX product, which allows for remote management of retail locations, potentially increasing sales [30][31] Question: What are the expectations for production out of Texas manufacturing facilities? - The company expects to average six to seven homes per day in Texas and two to three in Georgia, indicating a profitable outlook for Q4 [34] Question: Will there be additional price increases to offset raw material costs? - The company has implemented price increases of approximately 3-4% and is monitoring the market for further adjustments [36] Question: How is the consumer loan portfolio performing? - The portfolio remains strong, with low percentages of loans in trouble, although there are concerns about potential impacts from immigration enforcement [40][42] Question: What is the expected impact of the Americassim acquisition on retail sales? - The acquisition is expected to increase retail sales by 50-60% in 2026 compared to 2025, with significant improvements anticipated from integrating new systems [58][60]

Core Viewpoint - Legacy Housing (LEGH) reported quarterly earnings of $0.35 per share, missing the Zacks Consensus Estimate of $0.57 per share, representing a -38.60% earnings surprise [1][2] Financial Performance - The company posted revenues of $40.48 million for the quarter ended September 2025, missing the Zacks Consensus Estimate by 14.31%, compared to $44.27 million in the same quarter last year [2] - Over the last four quarters, Legacy Housing has surpassed consensus EPS estimates only once [2] Stock Performance - Legacy Housing shares have declined approximately 8.4% since the beginning of the year, while the S&P 500 has gained 14.3% [3] Future Outlook - The company's earnings outlook will be crucial for investors, including current consensus earnings expectations for upcoming quarters [4] - The current consensus EPS estimate for the next quarter is $0.66 on revenues of $51.3 million, and for the current fiscal year, it is $2.25 on revenues of $184.37 million [7] Industry Context - The Real Estate - Operations industry, to which Legacy Housing belongs, is currently in the top 35% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

Company Information - The company is listed on The Nasdaq Stock Market under the trading symbol LEGH [2]. - The address of the company's principal executive offices is 1600 Airport Freeway, 100 Bedford, Texas 76022 [1]. - The common stock has a par value of $0.001 per share [2]. Financial Reporting - Legacy Housing Corporation reported preliminary unaudited third quarter 2025 product sales and deliveries of floor sections [5]. - The report was filed on November 7, 2025, indicating the date of the earnings release [4]. - The press release detailing the financial results is attached as Exhibit 99.1 [7]. - The report does not include specific financial metrics or performance guidance for the upcoming quarters [5]. - The report is not deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 [5]. Company Status - The company has not indicated whether it is an emerging growth company [3]. - There is no mention of new products, technologies, market expansion, or acquisitions in the current report [5].

Revenue Performance - For the three months ended September 30, 2025, total net revenue decreased by $3.8 million, or 8.6%, to $40.5 million compared to $44.3 million in the same period of 2024[150]. - Total net revenue for the nine months ended September 30, 2025, was $126.3 million, a decrease of $3.7 million or 2.8% compared to $130.0 million in 2024[159]. Product Sales - Product sales decreased by $1.4 million, or 4.6%, primarily due to a decrease in unit volumes shipped, with total units sold dropping from 475 to 420, a decline of 11.6%[150][151]. - Product sales decreased by $1.2 million, or 1.3%, during the nine months ended September 30, 2025, primarily due to a $7.5 million decrease in mobile home park sales[161]. Revenue per Unit - The net revenue per unit sold increased by 7.9% to $68.5, attributed to higher retail prices for consumer sales[151]. - Net revenue per unit sold increased by 13.7% to $68.6 during the nine months ended September 30, 2025, compared to $60.3 in 2024[162]. Other Revenue - Other revenue decreased significantly by $3.0 million, or 78.8%, primarily due to a $2.7 million drop in land sales[154]. - Other revenue decreased by $4.1 million, or 63.1%, during the nine months ended September 30, 2025, primarily due to a decrease in land sale revenue[164]. Operating Expenses - The cost of product sales increased by $1.6 million, or 7.5%, with raw material and tariff costs rising from 39.4% to 47.7% of sales[155]. - Selling, general, and administrative expenses increased by $1.3 million, or 20.6%, due to higher legal and consulting expenses[156]. - Operating expenses increased by $6.3 million, or 7.7%, during the nine months ended September 30, 2025, totaling $88.2 million[159]. Net Income - Net income for the nine months ended September 30, 2025, was $33.6 million, a decrease of $13.5 million or 28.7% compared to $47.1 million in 2024[159]. Cash Flow - Cash at the end of the period increased to approximately $13.6 million as of September 30, 2025, compared to $1.1 million as of December 31, 2024[171]. - Net cash provided by operating activities was $18.1 million during the nine months ended September 30, 2025, down from $28.1 million in 2024[173]. Tax Rate - The effective tax rate for the nine months ended September 30, 2025, was 17.5%, down from 18.2% in 2024, primarily due to federal tax credits[168]. Financing and Debt - The Company entered into a new four-year senior secured revolving credit facility with an initial commitment of $50,000 and an additional $25,000 under an accordion feature[177]. - Interest expense under the Revolver for the three months ended September 30, 2025 was $2, a significant decrease from $175 in the same period of 2024[178]. - The outstanding balance of the Revolver as of September 30, 2025 was $0, indicating no current borrowings[178]. - The interest rate for the Revolver as of September 30, 2025 was 7.25%, down from 7.61% as of December 31, 2024[178]. Compliance and Obligations - The Company was in compliance with all financial covenants as of September 30, 2025, including a maximum leverage ratio of 1.00 to 1.00 and a minimum fixed charge coverage ratio of 1.75 to 1.00[178]. - The Company has contractual obligations for operating lease obligations totaling $1,041, with $120 due in 2025 and $776 due in 2026-2027[179]. - The maximum contingent obligations under repurchase agreements were approximately $713 as of September 30, 2025, down from $805 as of December 31, 2024[180]. Accounting Estimates - Critical accounting estimates are based on historical experiences and various factors, with actual results potentially differing from these estimates[181]. - Recent accounting pronouncements are detailed in the Company's September 30, 2025 Condensed Financial Statements[182].

Financial Performance - Legacy Housing Corporation reported product sales of $28.8 million for Q3 2025, a decrease of 4.6% compared to the same period last year [1] - The company delivered 420 floor sections in the quarter, down from 475 in the prior-year period, indicating a trend of lower unit volumes despite increased net revenue per unit [1] - The book value per share increased by 10.2% year-over-year, reflecting ongoing financial resilience [1] Executive Changes and Strategic Focus - Following the end of the quarter, Legacy Housing experienced significant executive transitions, including the departures of its CEO, CFO, and General Counsel [2] - The return of founders Kenneth Shipley and Curtis Hodgson has led to a renewed focus on cost discipline and expanding sales opportunities [2] Sales and Operational Outlook - Curt Hodgson, Executive Chairman, emphasized the company's commitment to providing value, controlling costs, and delivering profits for investors [3] - A major industry show held in late September generated enough orders to ensure Texas manufacturing facilities operate at a pace of 3 to 4 floors per day through year-end, exceeding the third quarter's rate [3] - The company maintains a robust balance sheet and prioritizes operational efficiency, supported by recent order activity [4] Company Overview - Legacy Housing Corporation is a leading provider of affordable manufactured homes in the U.S., focusing on quality, value, and customer service [5] - The company builds, sells, and finances manufactured homes and "tiny houses," distributed through independent retailers and company-owned stores [5] - Homes range in size from approximately 395 to 2,667 square feet, with prices ranging from approximately $33,000 to $180,000 [5]

Core Insights - Legacy Housing Corporation has announced the acquisition of AmeriCasa Solutions, LLC and its FutureHomeX® sales management platform in an all-cash transaction aimed at enhancing revenue growth and improving the homebuying experience [1][2][4] Company Overview - Legacy Housing is one of the largest manufacturers of manufactured homes in the U.S., operating through over 100 independent retailers and 12 company-owned stores, as well as direct sales to manufactured housing communities [2][9] - The company offers homes ranging from approximately 395 to 2,667 square feet, with retail prices between $33,000 and $180,000 [9] Acquisition Details - The acquisition includes a high-performing retail dealership in Houston, a chattel mortgage loan portfolio, an insurance agency, and a services center in Bogotá, Colombia, with the transaction expected to close on or before November 28, 2025 [2] - The FutureHomeX® Platform is designed to streamline the homebuying process through automation and AI, enhancing sales growth across retail dealerships and communities [2][6] Leadership Changes - Norman Newton, the CEO of AmeriCasa Solutions, will join Legacy Housing as Chief Revenue Officer under a five-year employment agreement, bringing over 30 years of executive experience [3][5] Strategic Goals - Legacy Housing's strategy includes expanding company-owned retail locations, increasing sales volume through advanced technology, and adding a Chief Revenue Officer to its leadership team [7]

Core Insights - Legacy Housing Corporation has completed a significant realignment, including the launch of the Legacy 250 initiative and a refresh of its management structure [1][4] Group 1: Legacy 250 Initiative - The Legacy 250 initiative aims to celebrate the Nation's 250th Anniversary by redesigning mobile homes to enhance the concept of the American Dream, featuring taller, wider homes with improved designs [2] - The introduction of the Legacy Ultimate Series includes innovative features such as an optional 8x12 shed storage module, enhancing storage space and quality of life for homeowners [2] Group 2: Product Features and Innovations - Modern floorplans have been developed to cater to family needs, incorporating integrated dining bars, media-focused family rooms, and high-quality bathrooms, providing a custom home feel at accessible price points [3] - The company has introduced industry-first 21 SEER concealed-duct "mini-split" heat pumps, which are located under the home to maximize usable living space [3] Group 3: Management and Strategic Review - A comprehensive year-long strategic review led to the resignation of the CEO, CFO, and General Counsel, with interim leadership provided by co-founder Kenny Shipley and veteran Ron Arrington [4] - The strategic review emphasized the company's strengths in producing high-quality mobile homes and improving administrative systems, aiming to enhance operational excellence and innovation in manufacturing [5] Group 4: Company Overview - Legacy Housing Corporation is one of the largest producers of manufactured homes in the U.S., offering homes ranging from approximately 395 to 2,667 square feet, with prices from about $33,000 to $180,000 [6]

Group 1 - Legacy Housing Corporation (NASDAQ: LEGH) has seen positive performance for shareholders in recent months [1] - The company specializes in the production and sale of affordable housing [1] Group 2 - Crude Value Insights provides an investment service focused on oil and natural gas, emphasizing cash flow and growth potential [1] - Subscribers benefit from a stock model account, cash flow analyses of exploration and production firms, and live sector discussions [2]

Financial Data and Key Metrics Changes - Product sales increased by $6.7 million or 21.3% for Q2 2025 compared to Q2 2024, driven by higher unit volume shipped [5] - Net income decreased by 9.2% to $14.7 million in Q2 2025 compared to Q2 2024, with basic earnings per share down 9% to $0.61 [10] - Gross profit margin improved to 32.4% in Q2 2025 from 31.9% in Q2 2024 [7][15] - Cash increased to approximately $2.6 million as of June 30, 2025, compared to $1.1 million at the end of 2024 [10] - Book value per basic share outstanding rose by 11.2% to $21.32 from the same period in 2024 [11] Business Line Data and Key Metrics Changes - Inventory finance sales increased by $4.9 million or 53.3% compared to Q2 2024 [13] - Retail sales rose by $2.9 million or 64.2% over the same period [14] - Commercial sales to community owners increased by 5.3% during Q2 2025 compared to Q2 2024 [14] - Consumer loan portfolio increased by $24.6 million, while MHP loan portfolio grew by $20.3 million [16] Market Data and Key Metrics Changes - The Southeast market is experiencing slower growth compared to Texas, with challenges in community customer demand due to elevated interest rates and operating costs [40] - The company is seeing a shift towards smaller houses as a response to affordability issues faced by renters [24][66] Company Strategy and Development Direction - The company aims to build its backlog to support increased production volume in the coming quarters, focusing on Texas where demand is stronger [15] - Ongoing discussions with community owners regarding large orders are expected to support volume growth despite current headwinds [14][35] - The company is actively managing its loan portfolios and evaluating opportunities to monetize noncore land [16][18] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the second half of the year, noting that while dealer business performed well, community sales remain choppy [45][66] - The company is monitoring legislative developments, such as the Road to Housing Act, which could support growth in home sales and community development [18][66] - Management highlighted the importance of maintaining healthy margins amid rising material and labor costs [15][60] Other Important Information - The company repurchased 260,635 shares of common stock for $5.8 million during Q2 2025, with a remaining authorization of approximately $8.1 million on its share repurchase program [11][17] - The company is focused on completing phase one of the Falcon Ranch development, with plans to sell lots as soon as possible [17][27] Q&A Session Summary Question: What is the momentum seen in July and August? - Management noted that dealer activity continues to drive revenue growth, with signs of life on the community side, but challenges remain due to increased costs and prices [22][24] Question: Progress on the Bastrop project and timeline for selling plots? - The goal is to sell lots as soon as possible, with infrastructure nearing completion, but the final bridge construction is necessary for full connectivity [25][27] Question: SG&A expenses running higher than expected? - Management indicated that SG&A expenses will likely return to historical levels, attributing current increases to specific accruals and expenses [29] Question: What is driving interest from community owners for large orders? - Long-term relationships with large customers and improved financing conditions are sparking interest, although some orders have been delayed [34][35] Question: Average selling price trends and sustainability? - The average selling price increased from $61,000 to $68,000, driven by retail sales, and management expects prices to remain elevated but acknowledges potential volume impacts [37][38] Question: Outlook on tariffs and inflationary pressures? - Management is monitoring commodity prices and labor costs, indicating that while some materials are stable, labor costs are expected to rise [60][61] Question: Differences in consumer behavior between renters and homeowners? - Renters are becoming more price-sensitive, impacting the MHP market, while the affordable housing crisis remains a significant issue [66]