Legacy Housing(US:LEGH)2023-03-15 21:12Sales Performance - Legacy Housing Corporation sold 4,189 home sections in 2022, a 15.2% increase from 3,635 home sections sold in 2021[116]. - In 2022, approximately 53% of manufactured homes were sold in Texas, up from 50% in 2021, indicating a strong market presence[119]. - The total number of products sold in 2022 was 3,339, a 10.9% increase from 3,011 in 2021[153]. - Product sales increased by $56.1 million, or 33.8%, in 2022, driven by higher average sales prices and increased unit volumes[152]. - Direct sales increased to $45,549 in 2022 from $25,173 in 2021, representing an increase of 81%[271]. - Sales to two independent third-parties accounted for 5.9% and 5.4% of product sales in 2022[266]. Financial Performance - Net revenue for 2022 was $257.0 million, an increase of $59.5 million or 30.1% compared to 2021[150]. - Net income for 2022 reached $67,773, representing a 35.9% increase compared to $49,871 in 2021[198]. - Basic net income per share increased to $2.78 in 2022, up from $2.06 in 2021, reflecting a growth of 34.9%[198]. - Operating income for 2022 was $78,018, a 32.5% increase from $58,916 in 2021[198]. - Total net revenue for the year ended December 31, 2022, was $257,015, an increase of 30% compared to $197,507 in 2021[271]. Cash Flow and Liquidity - Net cash used in operating activities was $1.7 million in 2022, a significant decrease from $60.3 million provided in 2021[164]. - Cash and cash equivalents at the end of 2022 were $2.8 million, up from $1.0 million at the end of 2021[162]. - The available credit under the Revolver was $17.4 million as of December 31, 2022, down from a maximum limit of $70 million[172]. - The company reported a net cash used in operating activities of $(1,691) in 2022, a decrease from $60,296 in 2021[203]. Assets and Liabilities - Total current assets increased to $107,081,000 in 2022 from $92,541,000 in 2021, driven by an increase in cash and cash equivalents from $1,042,000 to $2,818,000[196]. - Total liabilities decreased from $57,273,000 in 2021 to $54,709,000 in 2022, indicating improved financial stability[196]. - The company’s inventories decreased from $42,000,000 in 2021 to $32,075,000 in 2022, indicating a potential shift in inventory management strategy[196]. - The maximum contingent obligations under repurchase agreements were approximately $8,925,000 as of December 31, 2022, compared to $4,908,000 in 2021[176]. Financing and Interest - The company offers three types of financing solutions, enhancing competitive advantages and facilitating sales[120]. - Consumer and MHP loans interest income grew by $1.4 million, or 5.0%, in 2022, primarily due to an increase in the average outstanding consumer loan portfolio balance[154]. - The average contractual interest rate for consumer loans was approximately 13.4% as of December 31, 2022, slightly down from 13.5% in 2021[220]. - Interest expense under the Revolver decreased from $887,000 in 2021 to $225,000 in 2022, with an outstanding balance of $2,545,000 as of December 31, 2022, down from $7,993,000 in 2021[173]. Inventory and Production - The company operates three manufacturing facilities, producing approximately 70 home sections or 60 fully-completed homes per week[118]. - Current manufacturing facilities are operating at or near peak capacity, with plans to increase production at the Georgia facility to meet demand from new markets[125]. - The company is actively reviewing opportunities to add production capacity in attractive regions to meet future demand[127]. - The company’s inventories decreased from $42,000,000 in 2021 to $32,075,000 in 2022, indicating a potential shift in inventory management strategy[196]. Compliance and Regulations - The company maintained compliance with financial covenants, including a tangible net worth of at least $120,000,000 and a debt to EBITDA ratio of 4-to-1 or less as of December 31, 2022[173]. - The company is classified as an "emerging growth company," allowing it to delay the adoption of certain accounting standards until it no longer qualifies[178]. - The Company plans to adopt ASU 2016-13 effective January 1, 2023, which is expected to increase allowance amounts due to changes in credit loss measurement[292]. Other Financial Metrics - Operating expenses increased by $41.4 million, or 31.6%, primarily due to higher costs of materials and labor[158]. - Other revenue increased by $2.1 million, or 48.2%, primarily due to a rise in consignment fees and commercial lease rents[157]. - The company approved a new repurchase program in November 2022, allowing for the purchase of up to $10,000 of its common stock[208]. - The accrued warranty liability at the end of 2022 was $3,049, up from $2,876 in 2021, showing a 6% increase[252].