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]