Legacy Housing Corp Q4 FY2024 earnings call

• Product sales were down due to lower unit volume shipped, but net revenue per product sold increased because of moderate price increase. • Interest income from consumer MHP and dealer loans grew due to growth in loan portfolios. • Other revenue saw a significant increase mainly due to land sales. • Cost of product sales decreased as a result of fewer units sold. • Selling, general and administrative expenses decreased primarily due to lower warranty, consulting, and salary costs. • Company updates: Dealer business is healthy with new independent dealers signed in Texas and Southeast markets; community business is improving; lending portfolios are compounding; product margins were affected by lower production; a price increase was pushed through in February 2025; one mobile home park was sold; land development in Austin is ongoing; 2025 focus includes sales, dealer sales, streamlining operations, and asset monetization.

Product sales decreased $15.8 million or 10.9% in 2024 compared to 2023, driven primarily by a decrease in unit volume shipped. Net revenue per product sold increased 1.9% due to a moderate increase in unit prices. Consumer MHP and dealer loans interest income increased $3.8 million or 10.1% from 2023 to 2024 due to growth in loan portfolios, with the consumer loan portfolio increasing by $17.6 million and the MHP loan portfolio by $24.5 million between December 31, 2023 and 2024. Other revenue increased $7.0 million or 106.3% from 2023 to 2024, primarily due to land sales. The cost of product sales decreased $9.6 million or 9.7% in 2024. Selling, general and administrative expenses decreased $1.1 million or 4.4% in 2024. Other income expense net increased by $8.3 million in 2024.

• Retail finance fundings in the first quarter of 2025 are tracking well ahead of the 8% growth seen in 2024. • The community business is expected to continue improving in 2025. • Focus on ramping up production at Texas facilities and working on increasing production in Georgia.

• Market noise including politics, tariffs, recession risks, and interest rate considerations. • Labor market challenges affecting manufacturers. • Material price fluctuations from tariffs. • Potential impact of changing immigration policies, though not materially affecting the business yet.

Q: Dig in on land sales during the quarter, including details about the big sale and land acquisitions.

A: There was one land sale in the fourth quarter from a settlement agreement in Beaumont, TX; the company is opportunistically monetizing non-core assets. No land was purchased in the fourth quarter.

Q: Concerns regarding delinquencies and loan defaults.

A: Retail loan past due balances have crept up slightly but are not a cause for concern, with strong recovery rates; on the MHP side, there are levers for recovery and no loss was recognized from the settlement in 2024.

Q: Impact of changing immigration policies.

A: The company has been e-verifying employees for years, and underwriting criteria for borrowers are not materially affected by changing immigration policies.

Q: Sustainability of SG&A expenses.

A: No material changes are expected in SG&A expenses.

Q: Expectations for production rates in the first quarter and first half of 2025.

A: Focus is on ramping up production at Texas facilities, with Georgia production being slower but working on building backlog.

Q: Backlog comparison.

A: Backlog is healthy in Texas, and efforts are ongoing to improve backlog in Georgia.