Legacy Housing(US:LEGH)2025-05-13 16:02Financial Data and Key Metrics Changes - Product sales decreased by $6,500,000 or 21.2% for Q1 2025 compared to Q1 2024, primarily due to a decrease in unit volumes shipped, especially in mobile home park sales and retail sales [4][6] - Net revenue per product sold increased by 23.1% compared to the same period in 2024, driven by a shift from wholesale sales to higher retail prices [4][5] - Net income decreased by 32.1% to $10,300,000 in Q1 2025 compared to Q1 2024, with basic earnings per share decreasing to $0.43, a drop of 30.6% [8] - Cash increased to approximately $3,400,000 as of 03/31/2025, up from $1,100,000 as of 12/31/2024 [8][9] - Book value per basic share outstanding increased by 13.1% to $20.87 from the same period in 2024 [9] Business Line Data and Key Metrics Changes - Other revenue decreased by $1,000,000 or 59.2% during Q1 2025 compared to Q1 2024, primarily due to a decrease in forfeited deposits [6] - Cost of product sales decreased by $3,300,000 or 16% during Q1 2025 compared to Q1 2024, attributed to the decrease in units sold [7] - Gross profit margin was 29.2% of product sales in Q1 2025, down from 33.6% in Q1 2024 [7] Market Data and Key Metrics Changes - Retail loan originations in April 2025 were the highest in one month since going public, with year-to-date originations up 51% over the previous year [16][17] - Community shipments were lower than expected in Q1 due to broader market uncertainty and timing delays [17] Company Strategy and Development Direction - The company plans to simplify its product line by reducing the number of choices and options to improve efficiency [11] - A modification to the mobile home park financing program was introduced to allow community owners more flexibility in selling homes [12] - Management is focusing on enhancing sales, marketing, and land development projects, with new hires in key positions [13] Management Comments on Operating Environment and Future Outlook - Despite market uncertainty and tariff risks, the outlook for the remainder of 2025 is positive, with independent dealers showing recovery [14] - Delinquencies across loan portfolios remain low, and recovery rates are strong [18] - The company anticipates selling lots in a new development phase this summer, with significant potential value [19] Other Important Information - Share repurchases were limited in Q1 due to trading restrictions, but the company remains focused on long-term fundamentals [20] Q&A Session Summary Question: Pricing and Average Selling Price - The increase in average selling price was primarily due to a favorable sales mix, with plans for further price increases in June [22][23] Question: MHP Sales and Order Backlog - The decrease in MHP sales was attributed to both reduced demand and timing of orders, with significant orders pushed into Q2 [24][25] Question: Capital Spending and Cash Use - No unusual capital spending is expected outside of ongoing developments, particularly in Bastrop [29] Question: Production Expectations for Q2 - Production rates in Texas are expected to increase in Q2 compared to Q1, with a focus on streamlining the product portfolio [33][37] Question: Impact of Tariffs and Trade Uncertainty - Tariffs are a consideration but not a major issue, with most raw materials sourced domestically; uncertainty remains a challenge for investment decisions [39][40] Question: Comparison with Competitors - Delayed shipments and product complexity have impacted performance compared to competitors, but confidence in the industry remains strong [43][44]