Legacy Housing Corporation Q2 FY2025 earnings call

• Product sales growth: Inventory finance sales up $4.9 million or 53.3%, retail sales up $2.9 million or 64.2%, commercial sales up 5.3% but facing headwinds. • Gross margins: 32.4% in Q2 2025, maintained despite material and labor cost challenges. • Loan portfolios: Retail loan portfolio up $24.6M, MHP loan portfolio up $20.3M since Q2 2024. • Falcon Ranch: Focus on Phase 1 completion, aiming to sell lots soon; Phase 2 progress with utilities and roads. • Share repurchases: Repurchased 260,635 shares for $5.8M in Q2 2025, remaining authorization $8.1M.

Product sales increased $6.7 million or 21.3% during Q2 2025 compared to Q2 2024, driven by unit volume in inventory finance, retail, and mobile home park sales. Net revenue per product sold rose 10.5%. Consumer MHP and dealer loans interest income increased $1.0 million or 10.6%, with consumer loan portfolio up $24.6M, MHP loan portfolio up $20.3M, and dealer finance notes down $0.5M. Other revenue decreased $0.1 million or 10.8%. Cost of product sales increased $4.4 million or 20.3%, with gross profit margin at 32.4% vs 31.9% in Q2 2024. Selling, general and administrative expenses increased $1.1 million or 19.1%. Net income decreased 9.2% to $14.7 million, and basic earnings per share fell 9.0% to $0.61.

• Continue building backlog to support increased production volume, especially in Texas plants where demand is stronger. • Expect higher output in Texas, slower activity in Southeast. • Evaluate opportunities to monetize noncore land. • Goal to complete Phase 1 at Falcon Ranch and sell lots as soon as possible.

• Market uncertainty in certain geographies and channels. • Headwinds for community customers like elevated interest rates, higher operating costs, budget constraints for renters. • SG&A fluctuations due to year-over-year accrual mismatches (e.g., warranty, legal expenses). • Potential challenges in completing Falcon Ranch projects on time.

Q: Good order flow, momentum in July-August?

A: Dealer side driving growth, community side needs large orders to uptick.

Q: Selling plots at Falcon Ranch by 4th quarter?

A: Goal is to complete bridge and sell lots soon, bridge under construction.

Q: SG&A trajectory?

A: SG&A will dip back in line, wonky comparisons due to accrual shifts.

Q: What's sparking community owner interests?

A: Large customers working with disrepair communities, financing market opening, customers monetizing gains.

Q: Average selling price, sustainability?

A: Elevated due to retail store sales, expect to stay elevated but balance with volume.

Q: Georgia market slower?

A: Southeast market slower, more reliant on community customers, Texas market stronger.

Q: Product sales volume, YTD flat?

A: Some community orders slipped, dealer side stronger but market choppy.

Q: Retail store sustainability?

A: Good quarter, focus on bringing underperforming stores up, July slower but progress.

Q: Gross margin outlook?

A: Product gross margin improved, total margin affected by SG&A and accrual mismatches.

Q: Stock buybacks continued?

A: Will weigh against other opportunities, but opportunistic with good returns.

Q: Tariffs, inflation impact?

A: Input prices up, balance between price and volume.

Q: Consumer behavior, MHP market?

A: Renters price sensitive, pressure on community operators, legislative progress encouraging.