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What changed in Legacy Housing Corp's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Legacy Housing Corp's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+158 added−195 removedSource: 10-K (2025-03-12) vs 10-K (2024-03-15)

Top changes in Legacy Housing Corp's 2024 10-K

158 paragraphs added · 195 removed · 135 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

64 edited+5 added−33 removed54 unchanged
Biggest changeDuring the years ended December 31, 2023 and 2022 we sold 2,877 and 4,189 home sections, including 151 and 139 tiny houses, respectively. Manufacturing Facilities. We currently operate three manufacturing facilities located in Fort Worth, Texas, Commerce, Texas and Eatonton, Georgia, each of which range in size from approximately 97,000 to 388,000 square feet.
Biggest changeWe currently operate three manufacturing facilities located in Fort Worth, Texas, Commerce, Texas and Eatonton, Georgia, each of which range in size from approximately 97,000 to 388,000 square feet. The production schedules for our manufacturing facilities are based on wholesale orders received from distributors, which fluctuate from week to week.
Our factories employ high-volume production techniques that allow us to produce approximately 70 home sections, or approximately 60 fully-completed homes on average depending on product mix, in 2 Table of Contents total per week. We use quality materials and operate our own component manufacturing facilities for many of the items used in the construction of our homes.
Our factories employ high-volume production techniques that allow us to produce up to approximately 70 home sections, or approximately 60 fully-completed homes on average depending on product mix, in total per week. We use quality materials and operate our own component manufacturing facilities for many of the items 2 Table of Contents used in the construction of our homes.
The terms of the financing typically include a three year term, a monthly interest payment, an annual curtailment payment and require the retailer to pay the principal amount of the loan to the Company upon the earlier of the sale of the home from by the retailer to its customer or the end of the term.
The terms of the financing typically include a three year term, a monthly interest payment, an annual curtailment payment and require the retailer to pay the principal amount of the loan to the Company upon the earlier of the sale of the home by the retailer to its customer or the end of the term.
The chart below highlights the increasing all-in average sales price per square foot difference between a new manufactured home and a new site-built home (excluding land). Average Price per Square Foot Comparison Source: U.S.
The chart below highlights the increasing all-in average sales price per square foot difference between a new manufactured home and a new site-built home (excluding land). ​ Source: U.S.
Additionally, some independent retailers operate multiple sales outlets. We continually seek to increase our wholesale shipments by growing sales at our existing independent retailers and by finding new independent retailers to sell our homes.
Additionally, some independent retailers operate multiple sales outlets. We seek to increase our wholesale shipments by growing sales at our existing independent retailers and by finding new independent retailers to sell our homes.
The inability to obtain any materials used in the production of our homes, whether resulting from material shortages, limitation of supplier facilities or other events affecting production of component parts, may affect our ability to meet or maintain production requirements. Pricing and availability of certain raw materials fluctuated during 2023 and 2022 due to factors in th e economic environment.
The inability to obtain any materials used in the production of our homes, whether resulting from material shortages, limitation of supplier facilities or other events affecting production of component parts, may affect our ability to meet or maintain production requirements. Pricing and availability of certain raw materials fluctuated during 2024 and 2023 due to factors in th e economic environment.
Our vertical integration enables us to respond quickly to our customers’ needs and modify designs during the construction process. 6 Table of Contents ● Manufacturing Facilities Strategically Located Near Customers in Key Markets. Our three manufacturing facilities are strategically located to allow us to serve over 150 independent retail locations and 13 company-owned retail locations primarily across 15 states.
Our vertical 6 Table of Contents integration enables us to respond quickly to our customers’ needs and modify designs during the construction process. ● Manufacturing Facilities Strategically Located Near Customers in Key Markets. Our three manufacturing facilities are strategically located to allow us to serve over 125 independent retail locations and 13 company-owned retail locations primarily across 15 states.
In addition to our company, there are a number of other national manufacturers competing for a significant share of the manufactured housing market in the United States, including Clayton Homes, Inc., Cavco Industries, Inc. and Skyline Champion Corporation. Certain of these competitors possess greater financial, manufacturing, distribution and marketing resources than we do.
In addition to our company, there are a number of other national manufacturers competing for a significant share of the manufactured housing market in the United States, including Clayton Homes, Inc., Cavco Industries, Inc. and Champion Homes, Inc. Certain of these competitors possess greater financial, manufacturing, distribution and marketing resources than we do.
We believe our target U.S. age group is wide ranging from young families who are often first time homebuyers to older homebuyers who may be downsizing or moving towards a more rural lifestyle. The comparatively low all-in cost of fully-equipped manufactured housing is attractive to our target consumers.
Our target U.S. age group is wide ranging from young families who are often first time homebuyers to older homebuyers who may be downsizing or moving towards a more rural lifestyle. The comparatively low all-in cost of fully-equipped manufactured housing is attractive to our target consumers.
We intend to expand financing and leasing solutions to manufactured housing community-owner customers, in a manner that includes developing new sites for products in or near urban locations where there is a shortage of sites to place our products. ● Continue to Focus on Innovation and Customization for Core Customer Groups.
We continue to expand financing solutions to manufactured housing community-owner customers in a manner that includes developing new sites for products in or near urban locations where there is a shortage of sites to place our products. ● Continue to Focus on Innovation and Customization for Core Customer Groups.
We also market to other types of customers, including owners of manufactured home communities, buyers interested in tiny houses, recreational buyers and houses for workforces or man-camp housing. Additionally, we continue to be well-positioned to react to any increase in demand for affordable, quickly-delivered manufactured homes as a result of unforeseen harsh weather conditions and similar events.
We also market to other types of customers, including owners of manufactured home communities, buyers interested in tiny houses, recreational buyers and houses for workforces housing. Additionally, we continue to be well-positioned to react to any increase in demand for affordable, quickly-delivered manufactured homes as a result of unforeseen harsh weather conditions and similar events.
By utilizing an assembly-line process that employs from approximately 150 to 275 individuals per facility, we are able to manufacture a home in approximately three to six days and can produce, on average, approximately 70 home sections, or 60 fully-completed homes depending on product mix, in total per week.
By using an assembly-line process that employs from approximately 150 to 275 individuals per facility, we are able to manufacture a home in approximately three to six days and can produce, on average, up to approximately 70 home sections, or 60 fully-completed homes depending on product mix, in total per week.
Additionally, our homes have vaulted ceilings in every room, have our copyrighted “furniture friendly” floor plans and, in most cases, are wider, have taller ceilings and steeper roof pitches than our competitors’ products.
Additionally, most of our homes have vaulted ceilings in every room, have our copyrighted “furniture friendly” floor plans and, in many cases, are wider, have taller ceilings and steeper roof pitches than our competitors’ products.
Altogether, we believe our ability to offer our customers a range of home sizes and styles, as well as sophisticated design and customization, allows us to accommodate virtually all reasonable customer requests.
Altogether, our ability to offer our customers a range of home sizes and styles, as well as sophisticated design and customization, allows us to accommodate virtually all reasonable customer requests.
We provide financing to owners of manufactured housing communities for our products that they buy in order to rent to their residents. 11 Table of Contents We also make loans to community owners for the purpose of acquiring or developing properties and, as part of the arrangement, these community owners contract to buy homes from us.
We provide financing to owners of manufactured housing communities for our products that they buy in order to rent to their residents. We also make loans to community owners for the purpose of acquiring or developing properties and, as part of the arrangement, these community owners contract to buy homes from us.
Distribution As of December 31, 2023, we distribute our manufactured homes primarily across 15 states through a network of over 150 independent retail locations, 13 company-owned retail locations and direct sales to owners of manufactured home communities. As is common in the industry, our independent distributors typically sell manufactured homes produced by other manufacturers in addition to our manufactured homes.
Distribution As of December 31, 2024, we distribute our manufactured homes primarily across 15 states through a network of over 125 independent retail locations, 13 company-owned retail locations and direct sales to owners of manufactured home communities. As is common in the industry, our independent distributors typically sell manufactured homes produced by other manufacturers in addition to our manufactured homes.
We utilize local market research to design homes that meet the specific requirements of our customers, and our homes are designed after extensive field research and consumer feedback. We frequently introduce new floor plans, decor, exterior design, features and accessories to appeal to changing consumer trends, and we offer an assortment of customizations to match each customer’s individual tastes.
We use local market research to design homes that meet the specific requirements of our customers, and our homes are designed after field research and consumer feedback. We introduce new floor plans, decor, exterior design, features and accessories to appeal to changing consumer trends, and we offer an assortment of customizations to match each customer’s individual tastes.
Our 13 company-owned retail locations, including 11 Heritage Housing stores and two Tiny House Outlet stores, exclusively sell our homes. We offer three types of financing solutions to our customers. We provide inventory financing for our independent retailers who purchase homes from us and then sell them to consumers.
Our 13 company-owned retail locations, including 12 Heritage Housing stores and one Tiny House Outlet stores, exclusively sell our homes. We offer three types of financing solutions to our customers. We provide inventory financing for our independent retailers who purchase homes from us and then sell them to consumers.
These financing solutions are structured to give us an attractive return on investment, when coupled with the gross margin we realize on products specifically targeted for these new manufactured housing communities. ● Strong Alignment of Interests through Co-Founders’ Ownership. We believe that our interests are strongly aligned with our stockholders as our co-founders, Curtis D.
These financing solutions are structured to give us an attractive return on investment, when coupled with the gross margin we realize on products specifically targeted for these new manufactured housing communities. ● Strong Alignment of Interests through Co-Founders’ Ownership. We believe that our interests are strongly aligned with our stockholders as our co-founders, Curtis D. Hodgson (Director) and Kenneth E.
Our homes are marketed under our premier “Legacy” brand name and, as of December 31, 2023, are sold to consumers, primarily across 15 states through a network of over 150 independent retail locations, 13 company-owned retail locations and through direct sales to owners of manufactured home communities.
Our homes are marketed under our premier “Legacy” brand name and, as of December 31, 2024, are sold to consumers, primarily across 15 states through a network of over 125 independent retail locations, 13 company-owned retail locations and through direct sales to owners of manufactured home communities.
Our company has been providing inventory financing to our independent retailers since our formation, and we now have over 150 independent retailers using our inventory financing solutions. We now have more than 3,500 retail customers that purchased their homes using our retail financing solutions. ● Support for Owners of Manufactured Home Communities.
Our company has been providing inventory financing to our independent retailers since our formation, and we now have over 125 independent retailers using our inventory financing solutions. We now have more than 3,600 retail customers that purchased their homes using our retail financing solutions. ● Support for Owners of Manufactured Home Communities.
Available Information We make available free of charge on our website, www.legacyhousingcorp.com, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments thereto, as soon as reasonably 14 Table of Contents practicable after such material is filed with, or furnished to, the Securities and Exchange Commission.
Available Information We make available free of charge on our website, www.legacyhousing.com, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments thereto, as soon as reasonably practicable after such material is filed with, or furnished to, the Securities and Exchange Commission.
We believe that the solution we are able to provide for our customers, as a result of the vertical integration of our company, 7 Table of Contents enhances our brand recognition as a leading producer, results in higher and more efficient utilization of our manufacturing factories and expands our direct-to-consumer outreach on the competitive advantages of our wide variety of customizable homes.
The solution we are able to provide for our customers, as a result of the vertical integration of our company, enhances our brand recognition as a leading producer, results in higher and more efficient utilization of our manufacturing factories and expands our direct-to-consumer outreach on the competitive advantages of our wide variety of customizable homes.
This will allow us to save costs, gain greater control over the quality of the materials we use in our products and increase customization to meet our customers’ changing preferences.
This allows us to save costs, gain greater control over the quality of the materials we use in our products and increase customization to meet our customers’ changing preferences.
In 2022, there were approximately 65,969,000 households in the United States with annual household incomes of less than $75,000, representing 50% of all U.S. households, according to the Current Population Survey published by the U.S. Census Bureau.
In 2022, there were approximately 62,162,000 households in the United States with annual household incomes of less than $75,000, representing 50% of all U.S. households, according to the Current Population Survey published by the U.S. Census Bureau.
We distribute our products primarily in the southern United States through a network of independent retail locations, company-owned retail locations and direct sales to owners of manufactured home communities. Our first company-owned retail location opened in June 2016. We believe our company-owned stores, on average, carry higher gross margins. ● Competitive Production Strategies and Direct Sourcing.
We distribute our products primarily in the southern United States through a network of independent retail locations, company-owned retail locations and direct sales to owners of manufactured home communities. Our first company-owned retail location opened in June 2016. Our company-owned stores generate higher gross margins. ● Competitive Production Strategies and Direct Sourcing.
During 2023, we sold 2,877 home sections (which are entire modules or single floors). Our homes address the significant need in the United States for affordable housing.
During 2024, we sold 2,471 home sections (which are entire modules or single floors). Our homes address the significant need in the United States for affordable housing.
Our Market Opportunity Manufactured housing is a competitive alternative to other forms of affordable housing, whether new or existing, or located in urban, suburban or rural areas. We believe the target market of manufactured home buyers consists of households with total annual income below $75,000 which comprised 50% of total U.S. households in 2022.
Our Market Opportunity Manufactured housing is a competitive alternative to other forms of affordable housing, whether new or existing, or located in urban, suburban or rural areas. Our target market of manufactured home buyers consists of households with total annual income below $75,000 which comprised 47% of total U.S. households in 2023.
As shown in the chart below, there is a growing gap between the average sale price for new single-family homes (including the land on which they were built) and the price of the average manufactured home; management sees this gap as an opportunity for the industry. Source: U.S.
As shown in the chart below, there is a growing gap between the average sale price for new single-family homes (including the land on which they were built) and the price of the average manufactured home. Source: U.S.
Hodgson (Executive Chairman of the Board) and Kenneth E. Shipley (Executive Vice President and Director) own a significant percentage of outstanding shares. By providing structural and economic alignment with the performance of our company, Messrs. Hodgson’s and Shipley’s continuing controlling interests are directly aligned with those of our investors.
Shipley (Executive Vice President and Chairman of the Board of Directors) own a significant percentage of outstanding shares. By providing structural and economic alignment with the performance of our company, Messrs. Hodgson’s and Shipley’s continuing controlling interests are aligned with those of our investors.
This operational focus has provided us with sustainable net sales and net income growth over the years. Our growth strategy includes the following key initiatives: ● Expand Financing Solutions for Our Customers. We recognize that offering financing solutions to our customers is an important component of being a vertically integrated company that provides affordable manufactured housing.
This operational focus has enabled us to maintain strong margins and to increase net income over the years. Our growth strategy includes the following key initiatives: ● Expand Financing Solutions for Our Customers. We recognize that offering financing solutions to our customers is an important component of being a vertically integrated company that provides affordable manufactured housing.
Census Bureau. 5 Table of Contents The manufactured housing industry shipped 89,200 manufactured homes in 2023 and 112,882 manufactured homes in 2022 according to data published by the U.S. Census Bureau. Manufactured housing shipments represent approximately 4% of total completed privately owned housing units. Source: U.S. Census Bureau Our Competitive Advantages We offer a complete solution for affordable manufactured housing.
Census Bureau. 5 Table of Contents The manufactured housing industry shipped 89,200 manufactured homes in 2023 and 112,882 manufactured homes in 2022 according to data published by the U.S. Census Bureau. Manufactured housing shipments represent approximately 4% of total completed privately owned housing units. ​ Source: U.S.
Currently, we have a manufacturing plant in Fort Worth, Texas that measures 97,000 square feet in size and produced 779 homes in 2023 and 1,082 homes in 2022, a manufacturing plant in Commerce, Texas that measures 130,000 square feet in size and produced 726 homes in 2023 and 946 homes in 2022, and a manufacturing plant in Eatonton, Georgia that measures 388,000 square feet in size and produced 640 homes in 2023 and 913 homes in 2022.
Currently, we have a manufacturing plant in Fort Worth, Texas that measures 97,000 square feet in size and produced 624 homes in 2024 and 779 homes in 2023, a manufacturing plant in Commerce, Texas that measures 130,000 square feet in size and produced 504 homes in 2024 and 726 homes in 2023, and a manufacturing plant in Eatonton, Georgia that measures 388,000 square feet in size and produced 505 homes in 2024 and 640 homes in 2023.
In such cases, we verify the order with the third party, then manufacture the home and ship it to the retailer. Payment is due from the third-party lender upon shipment of the product to the retailer and, depending on the terms of each arrangement, we may or may not have limited repurchase obligations associated with this inventory.
Payment is due from the third-party lender upon shipment of the product to the retailer and, depending on the terms of each arrangement, we may or may not have limited repurchase obligations associated with this inventory.
We believe our company-owned stores, on average, carry higher gross margins due to our ability to select critical markets and develop highly-trained sales representatives who possess a deep understanding of our business and customer needs. Our Products Overview.
Our company-owned stores, on average, carry higher gross margins due to our ability to select critical markets and develop highly-trained sales representatives who possess a deep understanding of our business and customer needs. Our Products Overview. We are one of the largest producers of manufactured homes in the United States.
We provide financing to community owners that buy or lease our products for use in their rental housing communities. ​ The following table provides an overview of consumer, MHP and dealer financing options as of December 31, 2023 ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Principal ​ ​ Average ​ ​ Amount ​ Number of ​ Contractual Rate ​ Remaining ​ ​ Outstanding ​ Loans (1) ​ or Monthly Fee ​ Term Consumer Financing ​ $ 159,738 3,527 13.2% average annual contractual rate 123 months MHP Community Financing ​ $ 184,280 612 8.0% average annual contractual rate 39 months Dealer Financing ​ $ 32,979 60 1.0% average monthly contractual rate 26 months ​ (1) Dealer finance number includes number of loan agreements which generally is one per dealer Inventory Financing.
We provide financing to community owners that buy or lease our products for use in their rental housing communities. ​ The following table provides an overview of consumer, MHP and dealer financing options as of December 31, 2024 ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Principal ​ ​ Average ​ ​ Amount ​ Number of ​ Contractual Rate ​ Remaining ​ ​ Outstanding ​ Loans (1) ​ or Monthly Fee ​ Term Consumer Financing ​ $ 177,289 3,641 13.1% average annual contractual rate 121 months MHP Community Financing ​ $ 208,175 538 7.8% average annual contractual rate 83 months Dealer Financing ​ $ 32,779 60 1.0% average monthly contractual rate 21 months ​ (1) Dealer finance includes number of loan agreements which generally is one per dealer Inventory Financing.
Our intellectual property includes copyrights issued by the U.S. Copyright Office for many of our floor plans. We are not currently aware of any claims of infringement or other challenges to our intellectual property rights. Government Regulation General.
Our intellectual property includes copyrights issued by the U.S. Copyright Office for many of our floor plans. We are not currently aware of any claims of infringement or other challenges to our intellectual property rights. Government Regulation Our manufactured homes are subject to numerous federal, state and local laws, codes and regulations.
Competition The manufactured housing industry is highly competitive at both the manufacturing and retail levels and is based upon several factors, including price, product features, reputation for service and quality, depth of distribution, promotion, merchandising and the terms of retail and wholesale consumer financing. We compete with other producers of manufactured homes and new producers continue to enter the market.
Competition The manufactured housing industry is highly competitive at both the manufacturing and retail levels and is based upon several factors, including price, product features, reputation for service and quality, depth of distribution, 11 Table of Contents promotion, merchandising and the terms of retail and wholesale consumer financing.
We maintain our website at www.legacyhousingcorp.com. Our sales and marketing strategy focuses on households with annual incomes of less than $75,000 which includes young families, working class families and persons age 55 and older.
We participate in industry trade shows and host an annual home show for our customers. We maintain our website at www.legacyhousing.com. Our sales and marketing strategy focuses on households with annual incomes of less than $75,000 which includes young families, working class families and persons age 55 and older.
We also compete with companies offering for sale homes repossessed from wholesalers or consumers and we compete with new and existing site-built homes, apartments, townhouses and condominiums.
We compete with other producers of manufactured homes and new producers continue to enter the market. We also compete with companies offering for sale homes repossessed from wholesalers or consumers and we compete with new and existing site-built homes, apartments, townhouses and condominiums.
We procure multiple sources of supplies for all key materials in order to mitigate any supply chain risk. We intend to continue seeking greater direct sourcing of materials from original manufacturers.
We currently buy these materials from various third-party manufacturers and distributors. We procure multiple sources of supplies for all key materials in order to mitigate any supply chain risk. We continue to seek greater direct sourcing of materials from original manufacturers.
Certain of these competitors are larger than us and have access to substantially more capital and cost efficiencies. Protection of Proprietary Technology We rely on a combination of copyright and trade secret laws in the United States and other jurisdictions, as well as confidentiality procedures and contractual provisions, to protect our proprietary information, technology and brands.
Protection of Proprietary Technology We rely on a combination of copyright and trade secret laws in the United States and other jurisdictions, as well as confidentiality procedures and contractual provisions, to protect our proprietary information, technology and brands.
Seasonality Generally, we experience higher sales volume during the months of March through October. Our sales are generally slower during the winter months, and shipments can be delayed in certain geographic market areas that we serve which experience harsh weather conditions. Employees As of December 31, 2023, we had approximately 572 employees.
Our sales are generally slower during the winter months, and shipments can be delayed in certain geographic market areas that we serve which experience harsh weather conditions. Employees As of December 31, 2024, we had approximately 594 employees. Of our employees, approximately 486 individuals were hourly employees and 108 individuals were salaried employees.
We provide inventory financing to our independent retailers, who purchase homes from us and then sell them to consumers. ● Consumer Financing. We provide consumer financing for our products sold to end-users through both independent and our company-owned retail locations. ● Manufactured Housing Community Financing.
We provide consumer financing for our products sold to end-users through both independent and our company-owned retail locations. ● Manufactured Housing Community Financing.
We believe that the controlling interests and involvement of our co-founders has promoted long-term planning, an enhanced culture among our customers, development of strategic partners and employees, and ultimately the creation of value for our stockholders. Our Growth Strategy We have a strong operating history of investing in successful growth initiatives over the past 19 years.
We believe that the controlling interests and involvement of our co-founders has led to the creation of value for our stockholders. 7 Table of Contents Our Growth Strategy We have a strong operating history of investing in successful growth initiatives over the past 19 years.
We believe that a focused network of company-owned retail locations allows us to be more responsive and improve the customer experience at all stages, from manufacturing and design to sales, financing and customer service.
As of December 31, 2024, we distribute our products primarily across 15 states through a combination of 13 company-owned retail locations and over 125 independent retail locations. Our focused network of company-owned retail locations allows us to be more responsive and improve the customer experience at all stages, from manufacturing and design to sales, financing and customer service.
We seek to grow through selective acquisition of developable land in proximity to our manufacturing footprint. This will provide for a future revenue stream for the underlying land as well as ensure high utilization of our expertise in manufacturing and distribution.
This will provide for a future revenue stream for the underlying land as well as ensure high utilization of our expertise in manufacturing and distribution. We own over 1,000 acres of land across Texas.
We believe that our company-owned stores are, on average, more productive than our independent retail locations and carry higher gross margins. Sales and Marketing Our corporate marketing efforts focus on increasing our brand awareness and communicating our commitment to quality along with the many other competitive advantages our company offers.
Sales and Marketing Our corporate marketing efforts focus on increasing our brand awareness and communicating our commitment to quality along with the many other competitive advantages our company offers.
Additionally, we display our products at trade shows and support our retailers through the distribution of floor plan literature, brochures, decor selection displays and point of sale promotional material, as well as internet-based marketing assistance. We believe we have the most comprehensive printed catalog of manufactured housing products in the industry.
Additionally, we display our products at trade shows and support our retailers through the distribution of floor plan literature, brochures, decor selection displays and point of sale promotional material, as well as internet-based marketing assistance. Our independent retailers generally either pay cash to purchase inventory or finance their inventory needs through our inventory finance program.
We completed our initial public offering (the “IPO”) in December 2018 and our common stock trades on The NASDAQ Global Select Market under the symbol “LEGH.” We are the sixth largest producer of manufactured homes in the United States as ranked by number of homes manufactured based on information available from the Manufactured Housing Institute and IBTS for the nine month period ending September 30, 2023.
We completed our initial public offering (the “IPO”) in December 2018 and our common stock trades on The NASDAQ Global Select Market under the symbol “LEGH.” We are the one of the largest producers of manufactured homes in the United States.
The production schedules for our manufacturing facilities are based on wholesale orders received from distributors, which fluctuate from week to week. In general, our facilities are structured to operate on one 8- to 9-hour shift per day, five days per week. We currently manufacture a typical home in approximately three to six production days.
In general, our facilities are structured to operate on one 8- to 9-hour shift per day, five days per week. We currently manufacture a typical home in approximately three to six production days. For the year ended December 31, 2024, we produced, on average, approximately 39 home sections per week, or 31 fully-completed homes.
Of our employees, approximately 469 individuals were hourly employees and 103 individuals were salaried employees. Our employees are currently not represented by any collective bargaining unit.
Our employees are currently not represented by any collective bargaining unit.
A variety of state laws also regulate the form of financing documents and the allowable deposits, finance charge and fees chargeable pursuant to financing documents.
A variety of state laws also regulate the form of financing documents and the allowable deposits, finance charge and fees charged and impose individual and entity level licensing requirements in connection with the transactions.
We build a variety of sizes and floor plans of residential homes and tiny houses.
We produce a wide variety of homes that can be used by our customers in a number of ways. We build a variety of sizes and floor plans of residential homes and tiny houses.
A variety of laws affect the financing of the homes we manufacture. The Federal Consumer Credit Protection Act and Regulation Z promulgated under that act require written disclosure of information relating to such financing, including the amount of the annual percentage interest rate and the finance charge.
The Federal Consumer Credit Protection Act and Regulation Z promulgated thereunder require written disclosure of information relating to such financing, including the amount of the annual percentage interest rate and the finance charge, and substantive compliance requirements, such as an evaluation of the consumer’s ability to repay the transaction and limitations on loan originator compensation.
We believe there are significant growth opportunities to work with our development partners on such projects and view these opportunities as an important driver for both the sale of more homes and for financing bulk purchases of those homes by community owners. ● Pursue Selective Development Opportunites.
We have opportunities to work with our development partners on such projects and view these opportunities as an important driver for both the sale of more homes and the expansion of our commercial loan portfolios. ● Pursue Selective Development Opportunites. We seek to grow through selective acquisition of developable land in proximity to our manufacturing footprint.
The principal materials used in the production of our manufactured homes include wood, wood products, steel, aluminum, gypsum wallboard, windows, doors, fiberglass insulation, carpet, vinyl, fasteners, plumbing materials, appliances and electrical items. We currently buy these materials from various third-party manufacturers and distributors.
For the year ended December 31, 2023 we produced, on average, approximately 47 home sections per week, or 41 fully-completed homes. Raw Materials and Suppliers. The principal materials used in the production of our manufactured homes include wood, wood products, steel, aluminum, gypsum wallboard, windows, doors, fiberglass insulation, carpet, vinyl, fasteners, plumbing materials, appliances and electrical items.
We believe that we differentiate ourselves from our competition and have been able to grow our business as a result of the following key competitive strengths: ● Quality and Variety of Housing Designs. Based on more than 80 combined years of industry experience, our co-founders have developed an operating model that enables the efficient production of quality, customizable manufactured homes.
Census Bureau Our Competitive Advantages We offer a complete solution for affordable manufactured housing. We differentiate ourselves from our competition and have been able to grow our business as a result of the following key competitive strengths: ● Quality and Variety of Housing Designs.
Our independent retailers generally either pay cash to purchase inventory or finance their inventory needs through our inventory finance program. Certain of our independent retailers finance a portion of their inventory through wholesale floor plan financing arrangements with third parties.
Certain of our independent retailers finance a portion of their inventory through wholesale floor plan financing arrangements with third parties. In such cases, we verify the order with the third party, then manufacture the home and ship it to the retailer.
For the past 19 years, the industry has experienced a trend towards consolidation and, as a result, the bulk of the market share is controlled by a small number of companies. We are the country’s sixth largest producer of manufactured homes. Accordingly, we believe we have a significant opportunity to expand in this industry by effectively growing our market share.
For the past 20 years, the industry has experienced a trend towards consolidation and, as a result, the bulk of the market share is controlled by a small number of companies. There are significant competitors among lenders to manufactured home buyers including national, regional and local banks, independent finance companies, mortgage brokers and mortgage banks.
All of our customers are located in the United States. During the years ended December 31, 2023 and 2022, no customer accounted for more than 10% of our net sales. 10 Table of Contents Financing Solutions for Our Customers We offer three types of financing solutions: ● Inventory Financing.
All of our customers are located in the United States. Financing Solutions for Our Customers We offer three types of financing solutions: ● Inventory Financing. We provide inventory financing to our independent retailers, who purchase homes from us and then sell them to consumers. 10 Table of Contents ● Consumer Financing.
There are significant competitors among lenders to manufactured home buyers including national, regional and local banks, independent finance companies, mortgage brokers and mortgage banks. Examples of such lenders include 21st Mortgage Corporation, an affiliate of Clayton Homes, Inc., Berkshire Hathaway, Inc., Triad Finance Corporation and CU Factory Built Lending, LP.
Examples of such lenders include 21st Mortgage Corporation, an affiliate of Clayton Homes, Inc., Berkshire Hathaway, Inc., and Triad Finance Corporation. Certain of these competitors are larger than us and have access to substantially more capital and cost efficiencies.
All of our homes are constructed in one of our three U.S.-based manufacturing facilities.
Based on more than 80 combined years of industry experience, our co-founders have developed an operating model that enables the efficient production of quality, customizable manufactured homes. All of our homes are constructed in one of our three U.S.-based manufacturing facilities.
The HUD regulations, known collectively as the Federal Manufactured Home Construction and Safety Standards, cover all aspects of manufactured home construction, including structural integrity, fire safety, wind loads, thermal protection and 12 Table of Contents ventilation. Our Texas manufacturing facilities, and the plans and specifications of the HUD-compliant homes they produce, have been approved by a HUD-certified inspection agency.
The majority of our homes are built to comply with the HUD code which includes regulations that cover all aspects of manufactured home construction and installation, including structural integrity, fire safety, wind loads, thermal protection and ventilation. To the extent state and local regulations conflict with the HUD code, they are pre-empted.
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The Company owns over 1,000 acres of land in several counties in Texas: Bastrop County, Johnson County, Wise County, and Bexar County.
Added
During the years ended December 31, 2024 and 2023 we sold 2,471 and 2,877 home sections, including 124 and 151 tiny houses, respectively. We subcontract home production to other manufacturers for delivery in regions of the country that we do not serve from our own factories. Manufacturing Facilities.
Removed
As of December 31, 2023, we distribute our products primarily across 15 states through a combination of 13 company-owned retail locations and over 150 independent retail locations.
Added
A variety of laws affect the financing of the homes we manufacture.
Removed
We are the sixth largest producer of manufactured homes in the United States as ranked by number of homes manufactured based on information available from the Manufactured Housing Institute and IBTS for the nine month period ending September 30, 2023. We produce a wide variety of homes that can be used by our customers in a number of ways.
Added
Federal laws permit manufactured housing retailers to assist home buyers with securing financing for the purchase of homes without being considered loan originators under the loan originator compensation rule; however, they are prohibited from negotiating the financing terms. Governmental authorities enforcing these numerous laws and regulations can impose fines and/or seek injunctive relief for violations.
Removed
For the year ended December 31, 2023, we produced, on average, approximately 47 home sections per week, or 41 fully-completed homes. For the year ended December 31, 2022 we produced, on average, approximately 70 home sections per week, or 60 fully-completed homes. Raw Materials and Suppliers.
Added
We believe that our operations substantially comply with applicable federal laws and regulations. At the same time, Legacy has recently become aware that it may need to obtain certain licenses in order to comply with various state licensing requirements applicable to certain retail financing transactions.
Removed
Our company operates in a regulated industry, and there are many federal, state and local laws, codes and regulations that impact our business. Governmental authorities have the power to enforce compliance with their regulations, and violations may result in the payment of fines, the entry of injunctions or both.
Added
Should Legacy 12 Table of Contents determine, with its advisors and counsel, that it is required to obtain additional state licenses, Legacy will compose a plan to do so. ​ Seasonality Generally, we experience higher sales volume during the months of March through October.
Removed
Although we believe that our operations are in substantial compliance with the requirements of all applicable laws and regulations, we are unable to predict the ultimate cost of compliance with all applicable laws and enforcement policies. Federal Manufactured Homes Regulations. Our manufactured homes are subject to a number of federal, state and local laws, codes and regulations.
Removed
Construction of manufactured housing is governed by the National Manufactured Housing Construction and Safety Standards Act of 1974, and the regulations issued under such act by HUD.
Removed
Further, an independent HUD-certified third-party inspector regularly reviews our manufactured homes for compliance with HUD regulations during construction. Failure to comply with applicable HUD regulations could expose us to a wide variety of sanctions, including mandated closings of our manufacturing facilities. We believe our manufactured homes are in substantial compliance with all present HUD requirements.
Removed
Manufactured homes are typically built with wood products that contain formaldehyde resins. HUD regulates the allowable concentrations of formaldehyde in certain products used in manufactured homes and requires manufacturers to warn purchasers as to formaldehyde-associated risks. The Environmental Protection Agency (“EPA”) and other governmental agencies have in the past evaluated the effects of formaldehyde.
Removed
We use materials in our manufactured homes that meet HUD standards for formaldehyde emissions and believe we comply with HUD and other applicable government regulations in this regard. Transportation and Zoning Regulations. The transportation of manufactured homes on highways is subject to regulation by various federal, state and local authorities.
Removed
Such regulations may prescribe size and road use limitations and impose lower than normal speed limits and various other requirements. Our manufactured homes (including our tiny houses) are also subject to local zoning and housing regulations.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Company’s cybersecurity efforts are directly overseen by our Director of Information Technology, who reports directly to our Chief Executive Officer. The Company’s Board of Directors is made aware of cybersecurity incidents and threats, as appropriate, pursuant to corporate policy. ​ ​ 15 Table of Contents
Biggest changeThe Company’s cybersecurity efforts are directly overseen by our Director of Information Technology, who reports directly to our Chief Executive Officer. The Company’s Board of Directors is made aware of cybersecurity incidents and threats, as appropriate, pursuant to corporate policy. ​ ​ 13 Table of Contents

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeFacilities The following table sets forth certain information with respect to the facilities where our company operates: ​ ​ ​ ​ ​ ​ ​ ​ Date of ​ ​ ​ ​ Commencement ​ Owned / ​ Square Location ​ of Operations ​ Leased ​ Feet Manufacturing/Warehouse Facilities Fort Worth, TX 2005 Owned 96,880 Commerce, TX 2007 Owned 129,600 Eatonton, GA 2016 Owned 388,000 Retail Locations Acworth, GA ​ 2019 ​ Leased ​ 2,369 Albany, GA 2018 Leased 1,536 Asheboro, NC 2017 Leased 1,472 Athens, GA 2016 Leased 2,016 Augusta, GA 2018 Leased 3,136 Canton, TX 2018 Leased 2,362 Jennings, LA 2017 Owned 2,432 Minden, LA 2017 Leased 2,369 Mt.
Biggest changeFacilities The following table sets forth certain information with respect to the facilities where our company operates: ​ ​ ​ ​ ​ ​ ​ ​ Date of ​ ​ ​ ​ Commencement ​ Owned / ​ Square Location ​ of Operations ​ Leased ​ Feet Manufacturing/Warehouse Facilities Commerce, TX 2007 Owned 129,600 Eatonton, GA 2016 Owned 388,000 Fort Worth, TX 2005 Owned 96,880 Retail Locations Albany, GA ​ 2018 ​ Leased ​ 1,536 Asheboro, NC 2017 Leased 1,472 Athens, GA 2016 Leased 2,016 Augusta, GA 2018 Leased 3,136 Canton, TX 2018 Leased 2,362 Gainesville, TX 2017 Owned 2,240 Greenville, TX 2016 Owned 1,256 Jennings, LA 2017 Owned 2,432 Marble Falls, TX 2024 Owned 1,718 Minden, LA ​ 2017 ​ Leased ​ 2,369 Mt.
We believe that these facilities are adequately maintained and suitable for the purposes for which they are used. We currently operate 13 retail locations. Each retail location sits on approximately five to seven acres of land. We lease 9 of the 13 retail locations we operate in the business, pursuant to leases expiring from 2024 to 2028.
We believe that these facilities are adequately maintained and suitable for the purposes for which they are used. We currently operate 13 retail locations. Each retail location sits on approximately five to seven acres of land. We lease 8 of the 13 retail locations we operate in the business, pursuant to leases expiring from 2025 to 2028.
Pleasant, TX 2016 Leased 1,792 Sapulpa, OK ​ 2020 ​ Leased ​ 1,960 Greenville, TX 2016 Owned 1,256 Gainesville, TX 2017 Owned 2,240 Oklahoma City, OK 2016 Owned 2,100 Corporate/Regional Headquarters Bedford, TX 2018 Leased 8,020 Norcross, GA 2018 Leased 3,358 We own the manufacturing facilities and the land on which the facilities are located in Fort Worth, Texas and Commerce, Texas and Eatonton, Georgia.
Pleasant, TX 2016 Leased 1,792 Oklahoma City, OK 2016 Owned 2,100 Sapulpa, OK 2020 Leased 1,960 Corporate/Regional Headquarters Bedford, TX 2018 Leased 8,020 Norcross, GA 2018 Leased 3,358 We own the manufacturing facilities and the land on which the facilities are located in Fort Worth, Texas and Commerce, Texas and Eatonton, Georgia.
Total rent expense for the years ended December 31, 2023 and 2022 was $645,000 and $713,000, respectively. ​
Total rent expense for the years ended December 31, 2024 and 2023 was $631,000 and $645,000, respectively. ​

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeHowever, future events or circumstances, currently unknown to management, will determine whether the resolution of pending or threatened litigation or claims will ultimately have a material effect on our financial position, liquidity or results of operations in any future reporting periods. ​ ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. ​ 16 Table of Contents PART II
Biggest changeHowever, future events or circumstances, currently unknown to management, will determine whether the resolution of pending or threatened litigation or claims will ultimately have a material effect on our financial position, liquidity or results of operations in any future reporting periods. ​ ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. ​ 14 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeShare purchases may be made from time to time in the open market or through privately negotiated transactions depending on market conditions, share price, trading volume and other factors. Such purchases, if any, will be made in accordance with applicable insider trading and other securities laws and regulations.
Biggest changeSuch purchases, if any, will be made in accordance with applicable insider trading and other securities laws and regulations. These repurchases may be commenced or suspended at any time or from time to time without prior notice.
We have no plans to pay any cash dividends on our common stock for the foreseeable future and instead plan to retain earnings, if any, for future operations, to finance the growth of the business and service debt.
We currently have no plans to pay cash dividends on our common stock and instead plan to retain earnings, if any, for future operations, to finance the growth of the business and service debt.
As of December 31, 2023, there were 12 holders of record of our common stock. This does not include persons who hold our common stock in nominee or “street name” accounts through brokers or banks. Dividends We did not declare or pay cash dividends during 2023 or 2022.
As of December 31, 2024, there were 13 holders of record of our common stock. This does not include persons who hold our common stock in nominee or “street name” accounts through brokers or banks. Dividends We did not declare or pay cash dividends during 2024 or 2023.
In November 2022, the Company’s Board of Directors approved a new repurchase program (the “2022 Repurchase Program”). Under the 2022 Repurchase Program, the Company may purchase up to $10,000,000 of its common stock.
In November 2022, the Company’s Board of Directors approved a new repurchase program (the “2022 Repurchase Program”) that enabled the Company to purchase up to $10.0 million of its common stock. Share purchases may be made from time to time in the open market or through privately negotiated transactions depending on market conditions, share price, trading volume and other factors.
These repurchases may be commenced or suspended at any time or from time to time without prior notice. No shares have been purchased under the 2022 Repurchase Program. The 2022 Repurchase Program expires October 31, 2025. ITEM 6. [RESERVED] ​ 17 Table of Contents
The 2022 Repurchase Program expires October 31, 2025. ​ 15 Table of Contents ITEM 6. [RESERVED] ​
Added
In August, 2024, the Company’s Board of Directors authorized the repurchase of an additional $10.0 million of the Company’s common stock under the share repurchase program. The Company repurchased 262,530 shares of common stock for $5,398 in the open market during the year ended December 31, 2024.
Added
The Company did not repurchase any shares of common stock during the three months ended December 31, 2024. As of December 31, 2024, we had a remaining authorization of approximately $14,602. Between January 1, 2025 and March 10, 2025 the Company repurchased 29,385 shares of common stock for $674 in the open market.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeAs of December 31, 2023, these properties include the following ($’s in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Location Description ​ Date of Acquisition ​ Land ​ ​ Improvements ​ Total Bastrop County, Texas 368 Acres April 2018 ​ $ 4,215 ​ $ 8,884 ​ $ 13,099 Bexar County, Texas 69 Acres November 2018 ​ 842 ​ 107 ​ 949 Horseshoe Bay, Texas ​ 133 Acres Various 2018-2019 ​ 2,639 ​ 2,161 ​ 4,800 Johnson County, Texas ​ 91.5 Acres July 2019 ​ 449 ​ - ​ 449 Venus, Texas ​ 50 Acres August 2019 ​ 422 ​ 42 ​ 464 Wise County, Texas ​ 81.5 Acres ​ September 2020 ​ ​ 889 ​ ​ - ​ ​ 889 Bexar County, Texas ​ 233 Acres ​ February 2021 ​ ​ 1,550 ​ ​ 382 ​ ​ 1,932 ​ ​ ​ ​ ​ ​ $ 11,006 ​ $ 11,576 ​ $ 22,582 ​ ● We also expect to provide financing solutions to a select group of our manufactured housing community-owner customers in a manner that includes developing new sites for products in or near urban locations where there is a shortage of sites to place our products.
Biggest changeAs of December 31, 2024, these properties include the following ($’s in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Location Description ​ Date of Acquisition Land Improvements Total Bastrop County, Texas 368 Acres April 2018 ​ $ 4,215 ​ $ 16,642 ​ $ 20,857 Bexar County, Texas 69 Acres November 2018 ​ 842 ​ 138 ​ 980 Horseshoe Bay, Texas ​ 39 Acres Various 2018-2019 ​ 1,222 ​ 2,349 ​ 3,571 Johnson County, Texas ​ 91.5 Acres July 2019 ​ 449 ​ - ​ 449 Venus, Texas ​ 50 Acres August 2019 ​ 422 ​ 52 ​ 474 Wise County, Texas ​ 81.5 Acres ​ September 2020 ​ ​ 889 ​ ​ - ​ ​ 889 Bexar County, Texas ​ 233 Acres ​ February 2021 ​ ​ 1,550 ​ ​ 539 ​ ​ 2,089 Richland, Mississippi (1) ​ 22 Acres ​ February, 2024 ​ ​ 1,141 ​ ​ - ​ ​ 1,141 Bonham, Texas ​ 109 Acres ​ December, 2024 ​ ​ 1,533 ​ ​ - ​ ​ 1,533 Balch Springs, Texas ​ 6 Acres ​ December, 2024 ​ ​ 1,117 ​ ​ - ​ ​ 1,117 ​ ​ ​ ​ ​ ​ $ 13,380 ​ $ 19,720 ​ $ 33,100 ​ (1) Land and improvement values do not include the value of Company owned homes located in this community ​ ● We also may provide financing solutions to certain manufactured housing community-owner customers in a manner that includes developing new sites for products in or near urban locations where there is a shortage of sites to place our products.
Accordingly, all significant operating and strategic decisions by the chief operating decision-maker, the Chief Executive Officer, are based upon analyses of our company as one segment or unit. We believe our company is one of the most vertically integrated in the manufactured housing industry, allowing us to offer a complete solution to our customers.
Accordingly, all significant operating and strategic decisions by the chief operating decision maker, the Chief Executive Officer, are based upon analyses of our company as one operating segment. We believe our company is one of the most vertically integrated in the manufactured housing industry, allowing us to offer a complete solution to our customers.
For further information, see Note 2, Summary of Significant Accounting Policies, to our December 31, 2023 financial statements included in Part II, Item 8, Financial Statements and Supplementary Data, of this Form-10K. Allowance for Loan Losses—MHP Notes MHP Notes are stated at amounts due from customers net of allowance for loan losses.
For further information, see Note 2, Summary of Significant Accounting Policies, to our December 31, 2024 financial statements included in Part II, Item 8, Financial Statements and Supplementary Data, of this Form-10K. Allowance for Loan Losses—MHP Notes MHP Notes are stated at amounts due from customers net of allowance for loan losses.
Liquidity and Capital Resources Liquidity We believe that cash flow from operations and cash at December 31, 2023, and availability on our lines of credit will be sufficient to fund our operations and provide for growth for the next 12 to 18 months and into the foreseeable future.
Liquidity and Capital Resources Liquidity We believe that cash flow from operations and cash at December 31, 2024, and availability on our lines of credit will be sufficient to fund our operations and provide for growth for the next 12 to 18 months and into the foreseeable future.
Our homes are marketed under our premier “Legacy” brand name and currently are sold primarily across 15 states through a network of over 150 independent retail locations, 13 company-owned retail locations and through direct sales to owners of manufactured home communities.
Our homes are marketed under our premier “Legacy” brand name and currently are sold primarily across 15 states through a network of over 125 independent retail locations, 13 company-owned retail locations and through direct sales to owners of manufactured home communities.
Retail sales financed by us are recognized as revenue upon the execution of a sales and financing contract, receipt of a down payment and delivery of the home to the final customer, at which time title passes and collectability is reasonably assured. Revenue is recognized net of sales taxes.
Retail sales financed by us are recognized as revenue upon the execution of a sales and financing contract, receipt of a down payment and delivery of the home to the final customer, at which time title passes and collectability is reasonably assured.
We continue to explore opportunities to minimize the impact of inflation on our future profitability. ● Finally, our financial performance will be impacted by our ability to fulfill current orders for our manufactured homes from dealers and customers.
We continue to explore opportunities to minimize the impact of inflation on our future profitability. ● Finally, our financial performance may be impacted by our ability to fulfill current orders for our manufactured homes from dealers and customers.
On July 28, 2023, we terminated our credit agreement with Capital One, N.A. and entered into a new credit agreement with Prosperity Bank that expanded and extended our credit availability (see Lines of Credit , below). 23 Table of Contents ​ Cash We maintain cash balances in bank accounts that may, at times, exceed federally insured limits.
On July 28, 2023, we terminated our credit agreement with Capital One, N.A. and entered into a new credit agreement with Prosperity Bank that expanded and extended our credit availability (see Lines of Credit , below). ​ Cash We maintain cash balances in bank accounts that may, at times, exceed federally insured limits.
In June 2016, the FASB issued ASU 2016 13 Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities.
Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016 13 Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities.
At the Company's option, borrowings will bear interest at a per annum rate equal to, (i) Term Secured Overnight Financing Rate (“SOFR”) plus an applicable margin of 2.5% or 2.75% based upon the Company's average quarterly borrowings under the New Revolving Credit Agreement or (ii) a base rate plus an applicable margin of 2.5% or 2.75% based upon the Company's average quarterly borrowings under the New Revolver.
At the Company's option, borrowings will bear interest at a per annum rate equal to, (i) Term Secured Overnight Financing Rate (“SOFR”) plus an applicable margin of 2.5% or 2.75% based upon the Company's average quarterly borrowings under the Revolver or (ii) a base rate plus an applicable margin of 2.5% or 2.75% based upon the Company's average quarterly borrowings under the Revolver.
The maximum amount of our contingent obligations under such repurchase agreements was approximately $3,030,000 and $8,925,000 as of December 31, 2023 and 2022, respectively, without reduction for the resale value of the homes. We may be required to honor contingent repurchase obligations in the future and may incur additional expense as a consequence of these repurchase agreements.
The maximum amount of our contingent obligations under such repurchase agreements was approximately $805 and $3,030 as of December 31, 2024 and 2023, respectively, without reduction for the resale value of the homes. We may be required to honor contingent repurchase obligations in the future and may incur additional expense as a consequence of these repurchase agreements.
We have not incurred any losses from such accounts and management considers the risk of loss to be minimal. As of December 31, 2023, we had approximately $0.7 million in cash, compared to $2.8 million as of December 31, 2022.
We have not incurred any losses from such accounts and management considers the risk of loss to be minimal. As of December 31, 2024, we had approximately $1.1 million in cash, compared to $0.7 million as of December 31, 2023.
Our 13 company-owned retail locations, including 11 Heritage Housing stores and two Tiny House Outlet stores exclusively sell our homes. During the years ended December 31, 2023 and 2022, no independent retailer accounted for 10% or more of our product sales.
Our 13 company-owned retail locations, including 12 Heritage Housing stores and one Tiny House Outlet stores exclusively sell our homes. During the years ended December 31, 2024 and 2023, no independent retailer accounted for 10% or more of our product sales.
The effective tax rate for the year ended December 31, 2022 was 17.5% and primarily differs from the federal statutory rate of 21% primarily due to a federal tax credit for energy efficient construction and partially offset by state income taxes.
The effective tax rate for the year ended December 31, 2024 was 18.9% and primarily differs from the federal statutory rate of 21% primarily due to a federal tax credit for energy efficient construction and partially offset by state income taxes.
In order to maintain our growth, we will need to be able to continue to properly estimate anticipated future volumes when making commitments regarding the level of business that we will seek and accept, the mix of products that we intend to manufacture, the timing of production schedules and the levels and utilization of inventory, equipment and personnel.
In order to continue to grow, we must be able to properly estimate future volumes when making commitments regarding the level of business that we will seek and accept, the mix of products that we intend to manufacture, the timing of production schedules and the levels and utilization of inventory, equipment and personnel.
Factors Affecting Our Performance We believe that the growth of our business and our future success depend on various opportunities, challenges, trends and other factors, including the following: ● We have purchased several properties in our market area for the purpose of developing manufactured housing communities and subdivisions.
Factors Affecting Our Performance We believe that the growth of our business and our future success depend on various opportunities, challenges, trends and other factors, including, but not limited to, the following: ● We acquired several properties in our market area for the purpose of developing manufactured housing communities and subdivisions.
Income tax expense was $14.3 million for 2023 compared to $14.4 million for and 2022. The effective tax rate for the year ended December 31, 2023 was 20.8% and primarily differs from the federal statutory rate of 21% primarily due to a federal tax credit for energy efficient construction and partially offset by state income taxes.
The effective tax rate for the year ended December 31, 2023 was 20.8% and primarily differs from the federal statutory rate of 21% primarily due to a federal tax credit for energy efficient construction and partially offset by state income taxes.
However, we do have a repurchase agreement with a financial institution providing inventory financing for independent retailers of our products. Under this agreement, we have agreed to repurchase homes at declining prices over the term of the agreement (24 months). Our obligation under this repurchase agreement ceases upon the purchase of the home by the retail customer.
However, we do have repurchase agreements with financial institutions providing inventory financing for independent retailers of our products. Under these agreements, we have agreed to repurchase homes at declining prices over the term of the agreement. Our obligation under these repurchase agreements ceases upon the purchase of the home by the retail customer.
We determine the allowance by considering several factors including the aging of the past due balance, the customer’s payment history, and our previous loss history. We establish an allowance reserve composed of specific and general reserve amounts that are deemed to be uncollectible.
We determine the allowance by considering several factors including the aging of the past due balance, the customer’s payment history, and our previous loss history. We establish an allowance reserve composed of specific and general reserve amounts that are deemed to be uncollectible. Historically we have not experienced material losses on the MHP Notes.
Overview Legacy Housing Corporation builds, sells and finances manufactured homes and “tiny houses” that are distributed through a network of independent retailers and company-owned stores and are sold directly to manufactured housing communities.
Overview Legacy Housing Corporation builds, sells and finances manufactured homes and “tiny houses” that are distributed through a network of independent retailers and company-owned stores and are sold directly to manufactured housing communities. We are one of the largest producers of manufactured homes in the United States.
These were offset by $2.7 million of collections related to loans we made to third parties for the development of manufactured housing parks, proceeds of $1.1 million for the sale of leased property and collections of $0.4 million from our purchased consumer loans.
These were offset by $6.4 million of collections related to loans we made to third parties for the development of manufactured housing parks and proceeds of $1.6 million from the sale of property.
Approximately 63% of our 2022 product sales were attributable to our independent retail distributors, 9% to our company-owned retail locations and 29% directly to owners of manufactured housing communities. 18 Table of Contents The following table shows the states in which we sold most of our manufactured homes and the approximate percentage of this sales to our total product sales: ​ ​ ​ ​ ​ ​ ​ ​ ​ % of 2023 ​ % of 2022 ​ ​ Total ​ Total Location ​ Net Sales ​ Net Sales Texas 53 % 53 % Georgia 12 % 9 % Louisiana ​ 9 % 4 % Oklahoma ​ 4 % 3 % Michigan ​ 3 % — % Florida 3 % 5 % New Mexico 2 % 2 % North Carolina ​ 2 % 2 % Alabama ​ 2 % 5 % Colorado ​ 1 % 1 % Indiana ​ 1 % — % Kansas ​ 1 % 1 % South Carolina ​ 1 % 2 % Arizona ​ 1 % 5 % ​ We offer three types of financing solutions to our customers.
Approximately 51% of our 2023 product sales were attributable to our independent retail distributors, 12% to our company-owned retail locations and 37% directly to owners of manufactured housing communities. 16 Table of Contents The following table shows the states in which we sold most of our manufactured homes and the approximate percentage of this sales to our total product sales: ​ ​ ​ ​ ​ ​ ​ ​ ​ % of 2024 ​ % of 2023 Location ​ Product Sales ​ Product Sales Texas 54 % 53 % Georgia 11 % 12 % North Carolina ​ 7 % 2 % Oklahoma ​ 6 % 4 % Michigan ​ 3 % 3 % Florida 3 % 3 % Alabama 2 % 2 % New Mexico ​ 2 % 2 % South Carolina ​ 2 % 1 % Kentucky ​ 1 % — % Louisiana ​ 1 % 9 % ​ We offer three types of financing solutions to our customers.
Allowance for Loan Losses—Consumer Loan Receivable The allowance for loan losses reflects management’s estimate of losses inherent in the consumer loans that may be uncollectible based upon review and evaluation of the consumer loan portfolio as of the date of the balance sheet.
Actual results may differ from these estimates under different assumptions or conditions. Allowance for Loan Losses—Consumer Loan Receivable The allowance for loan losses reflects management’s estimate of losses inherent in the consumer loans that may be uncollectible based upon review and evaluation of the consumer loan portfolio as of the date of the balance sheet.
Net cash used in investing activities of $9.8 million in 2023 was primarily attributable to $14.8 million of originations related to loans we made to third parties for the development of manufactured housing parks, $8.5 million in proceeds from the sale of U.S. treasury notes, and $7.7 million in improvements and development related to property, plant and equipment.
Net cash used in investing activities of $6.7 million in 2024 was primarily attributable to $5.5 million of originations related to loans we made to third parties for the development of manufactured housing parks, and $9.2 million in improvements and development related to property, plant and equipment.
Approximately 51% of our 2023 product sales were attributable to our independent retail distributors, 12% to our company-owned retail locations and 37% directly to owners of manufactured housing communities.
Approximately 38% of our 2024 product sales were attributable to our independent retail distributors, 17% to our company-owned retail locations and 45% directly to owners of manufactured housing communities.
These solutions will be structured to give us an attractive return on investment when coupled with the gross margin we expect to make on products specifically targeted for sale to these new manufactured housing communities. 19 Table of Contents ● Inflation recently was near its highest rates in the U.S. over the last 30 years.
These solutions are structured to give us an attractive return on 17 Table of Contents investment when coupled with the gross margin we expect to make on products specifically targeted for sale to these new manufactured housing communities. ● Inflation rates have been high in the U.S. recently.
Department of Housing and Urban Development (“HUD”). Our factories employ high-volume production techniques that allow us to produce, on average, approximately 70 home sections, or 60 fully-completed homes depending on product mix, in total per week. We use quality materials and operate our own component manufacturing facilities for many of the items used in the construction of our homes.
Department of Housing and Urban Development (“HUD”). Our factories employ high-volume production techniques that allow us to produce up to, on average, approximately 70 home sections, or 60 fully-completed homes depending on product mix, in total per week.
The Company paid certain arrangement fees and other fees in connection with the New Revolver of approximately $271, which were capitalized as unamortized debt issuance costs and are amortized to interest expense over the life of the New Revolver. The New Revolver matures July 28, 2027.
The Company paid certain arrangement fees and other fees in connection with the Revolver of approximately $271, which were capitalized 22 Table of Contents as unamortized debt issuance costs and included in Prepaid expenses and other current assets in the accompanying balance sheets and are amortized to interest expense over the life of the Revolver.
This decrease was primarily due to a $3.2 million decrease in salaries and benefits costs, a $0.4 million decrease in warranty costs, a $0.1 million decrease in consulting and professional fees, and a $0.1 million decrease in depreciation and amortization expense, partially offset by a $1.0 million increase in loan loss provision, a $0.7 million increase in legal expense, a $0.4 million increase in marketing and advertising expense and a net $1.5 million decrease in other miscellaneous costs.
This decrease was primarily due to a $1.4 million decrease in warranty costs, a $0.4 million decrease in consulting and professional fees, and a $0.4 million decrease in salaries and benefits costs, partially offset by a $0.4 million increase in real estate taxes and a net $0.7 million increase in other miscellaneous costs.
Contractual Obligations The following table is a summary of contractual cash obligations as of December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payments Due by Period (in thousands) ​ ​ ​ ​ ​ ​ ​ Contractual Obligations Total 2024 2025 - 2026 2027 - 2028 After 2028 Lines of credit ​ $ 23,680 — — 23,680 — Operating lease obligations ​ $ 1,935 519 925 491 — ​ 25 Table of Contents Off-Balance Sheet Arrangements We did not have any off-balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, net sales, results of operations, liquidity or capital expenditures.
As of December 31, 2024, the Company was in compliance with all financial covenants, including that it maintain a maximum leverage ratio of no more than 1.00 to 1.00 and a minimum fixed charge coverage ratio of no less than 1.75 to 1.00. ​ Contractual Obligations The following table is a summary of contractual cash obligations as of December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payments Due by Period (in thousands) ​ ​ ​ ​ ​ ​ ​ Contractual Obligations Total 2025 2026 - 2027 2028 - 2029 After 2029 Lines of credit ​ $ — — — — — Operating lease obligations ​ $ 1,415 494 776 145 — ​ Off-Balance Sheet Arrangements We did not have any off-balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, net sales, results of operations, liquidity or capital expenditures.
For the year ended December 31, 2023, interest expense under the Revolver and New Revolver was $930, and for the year ended December 31, 2022, interest expense under the Revolver was $225. The outstanding balance of the New Revolver as of December 31, 2023 was $23,680, and the outstanding balance of the Revolver as of December 31, 2022 was $2,545.
The Revolver matures July 28, 2027. For the year ended December 31, 2024 and 2023, interest expense under the Revolver was $689 and $930, respectively. The outstanding balance of the Revolver as of December 31, 2024 and 2023 was $0 and $23,680, respectively.
Each home can be configured according to a variety of floor plans and equipped with features such as fireplaces, central air conditioning and state-of-the-art kitchens.
We use quality materials and operate our own component manufacturing facilities for many of the items used in the construction of our homes. Each home can be configured according to a variety of floor plans and equipped with features such as fireplaces, central air conditioning and state-of-the-art kitchens.
The amount of available credit under the New Revolver was $26,320 as of December 31, 2023 and the amount of available credit under the Revolver was $17,400 as of December 31, 2022. The New Revolver requires the Company to comply with certain financial and non-financial covenants.
The interest rate in effect as of December 31, 2024 and 2023 for the Revolver was 7.61% and 7.95%, respectively. The amount of available credit under the Revolver was $50,000 and $26,320 as of December 31, 2024 and 2023, respectively. The Revolver requires the Company to comply with certain financial and non-financial covenants.
Finished goods and work-in-process are based on a standard cost system that approximates actual costs using the specific identification method.
Inventories Inventories consist of raw materials, work in process, and finished goods and are stated at the lower of cost or net realizable value. The cost of raw materials is based on the first in first out method. Finished goods and work in process are based on a standard cost system that approximates actual costs using the specific identification method.
Net cash provided by financing activities of $21.2 million in 2023 was attributable to net uses of $21.1 million on our lines of credit offset by $0.1 million received from the exercise of stock options. Net cash used in financing activities of $5.6 million in 2022 was attributable to net payments of $5.6 million on our lines of credit.
Net cash used in financing activities of $28.9 million in 2024 was attributable to net uses of $23.7 million to pay down our lines of credit and $5.4 million of stock repurchases offset by $0.2 million received from the exercise of stock options.
ASU 2022-06 was effective upon issuance. The new standard has had no material impact on the Company's financial statements. From time to time, new accounting pronouncements are issued by the FASB and other regulatory bodies that are adopted by the Company as of the specified effective dates.
From time to time, new accounting pronouncements are issued by the FASB and other regulatory bodies that are adopted by the Company as of the specified effective dates.
During 2023, we sold 2,877 home sections (which are entire homes or single floors that are combined to create complete homes) and in 2022, we sold 4,189 home sections. The Company has one reportable segment. All of our activities are interrelated, and each activity is dependent and assessed based on how each of the activities of Company supports the others.
During 2024, we sold 2,471 home sections (which are entire homes or single floors that are combined to create complete homes) and in 2023, we sold 2,877 home sections. The Company has one reportable segment.
Between December 31, 2023 and December 31, 2022 our consumer loan portfolio increased by $17.5 million, our MHP loan portfolio increased by $39.2 million, our other notes portfolio increased by $11.9 million and our dealer finance notes increased by $2.5 million.
Between December 31, 2024 and December 31, 2023 our consumer loan portfolio increased by $17.6 million, our MHP loan portfolio increased by $24.5 million, and our dealer finance notes balance did not change.
The accrued warranty liability is reduced as costs are incurred, and warranty liability balance is included as part of accrued liabilities in our balance sheet. 21 Table of Contents Results of Operations The following discussion should be read in conjunction with the information set forth in the financial statements and the accompanying notes appearing elsewhere in this Form 10-K.
Revenue is recognized net of sales taxes. ​ 19 Table of Contents Results of Operations The following discussion should be read in conjunction with the information set forth in the financial statements and the accompanying notes appearing elsewhere in this Form 10-K.
This change was primarily a result of increased cash used for a decrease in operating income before non-cash adjustments, increased volume of consumer loan originations net of principal collections, increased inventories, increased prepaid expenses and other current assets, decreased customer deposits and a decrease in dealer incentives.
This change was primarily a result of increased cash provided by operating income before non-cash adjustments, decreased volume of MHP loan originations net of principal collections, decreased inventories, decreased other assets – leased mobile homes, increased accounts payable, increased customer deposits and increased escrow liability.
We had decreases in direct sales, commercial sales, inventory finance sales and retail store sales. We believe the market for mobile homes in 2023 slowed considerably from prior years due to the economic environment, including higher inflation and rising home costs.
We had decreases in direct sales, inventory finance sales and other product sales. We believe the market for mobile homes in 2024 remained slow due to the economic environment, including higher inflation and rising home costs. Direct sales decreased $8.4 million, or 47.8% from 2023 to 2024, mainly due to general slowdown in the market for mobile homes.
The amendments in this update extend the transition relief period for reference rate reform from December 31, 2022 to December 31, 2024. The amendments in ASU 2022-06 apply to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform.
The amendments in ASU 2022-06 apply to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. ASU 2022-06 was effective upon issuance. The new standard has had no material impact on the Company's financial statements.
On July 28, 2023, the Company entered into a new Credit Agreement (the “New Revolver”), by and among the Company as borrower, the financial institutions from time to time party thereto, as lenders, and Prosperity Bank as administrative agent.
Between January 1, 2025 and March 10, 2025 we repurchased 29,385 shares of common stock for $674 in the open market Lines of Credit On July 28, 2023, the Company entered into a new Credit Agreement (the “Revolver”), by and among the Company as borrower, the financial institutions from time to time party thereto, as lenders, and Prosperity Bank as administrative agent.
Net revenue attributable to our factory-built housing consisted of the following in 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ ​ ​ ​ ($ in thousands) ​ ​ ​ ​ ​ ​ 2023 2022 $ Change % Change Net revenue: ​ ​ ​ ​ Product Sales ​ $ 145,100 ​ $ 222,052 ​ $ (76,952) (34.7) % Total units sold ​ 2,434 ​ 3,339 ​ (905) (27.1) % Net revenue per unit sold ​ $ 59.6 ​ $ 66.5 ​ $ (6.9) (10.4) % ​ 22 Table of Contents In 2023, our net revenue per product sold decreased primarily because of the conversion of consignment arrangements to inventory finance arrangements that occurred in 2022 but not in 2023, and this was partially offset by an increase in unit prices in 2023, as rising material and labor costs were passed on to our customers.
Net revenue attributable to our factory-built housing consisted of the following in 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ ​ ​ ​ ($ in thousands) ​ ​ ​ ​ ​ ​ 2024 2023 $ Change % Change Net revenue: ​ ​ ​ ​ Product Sales ​ $ 129,345 ​ $ 145,100 ​ $ (15,755) (10.9) % Total units sold ​ 2,129 ​ 2,434 ​ (305) (12.5) % Net revenue per unit sold ​ $ 60.8 ​ $ 59.6 ​ $ 1.1 1.9 % ​ In 2024, our net revenue per product sold increased primarily because of a moderate increase in unit prices, as rising material and labor costs were passed on to our customers.
The cost of product sales decreased $50.4 million, or 33.6%, in 2023 as compared to 2022. The decrease in costs is primarily related to a decrease in units sold. Selling, general and administrative expenses decreased $3.3 million, or 11.9%, in 2023 as compared to 2022.
The cost of product sales decreased $9.6 million, or 9.7%, in 2024 as compared to 2023. The decrease in costs is primarily related to a decrease in units sold. The cost of other sales was $8.2 million in 2024 and primarily reflects the cost associated with our land sales.
Retail store sales decreased $0.5 million, or 2.4% from 2023 to 2022, and we believe our efforts to to focus on our own retail sales channel in 2023 helped moderate the impact of market conditions.
Commercial sales increased $0.2 million, or 0.3% from 2023 to 2024 reflecting steady purchases of mobile homes by mobile home park operators. Retail store sales increased $0.9 million, or 4.5% from 2023 to 2024 as our continued efforts to focus on our own retail sales channel helped moderate the impact of market conditions.
The $900 was comprised of a $225 increase for MHP notes, a $187 increase for dealer financed contracts and a $488 increase for other notes receivable.
The $900 was comprised of a $225 increase for MHP notes, a $187 increase for dealer financed contracts and a $488 increase for other 23 Table of Contents notes receivable. The cumulative effect of the adoption was a net decrease of $698 to beginning retained earnings at January 1, 2023.
Cash Flow Activities ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ ​ (in thousands) ​ 2023 2022 ​ ​ ​ ​ ​ ​ ​ Net cash used in operating activities ​ $ (13,536) ​ $ (1,691) Net cash (used in) provided by investing activities ​ $ (9,769) ​ $ 9,081 Net cash provided by (used in) financing activities ​ $ 21,235 ​ $ (5,614) Net change in cash ​ $ (2,070) ​ $ 1,776 Cash at beginning of year ​ $ 2,818 ​ $ 1,042 Cash at end of year ​ $ 748 ​ $ 2,818 ​ Comparison of Cash Flow Activities from 2023 to 2022 Net cash used in operating activities was $13.5 million during the year ended December 31, 2023, compared to net cash of $1.7 million used in operating activities during 2022.
We consider all cash and highly liquid investments with an original maturity of three months or less to be cash equivalents. 21 Table of Contents Cash Flow Activities ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ ​ (in thousands) ​ 2024 2023 ​ ​ ​ ​ ​ ​ ​ Net cash provided by (used in) operating activities ​ $ 35,993 ​ $ (13,536) Net cash used in investing activities ​ $ (6,714) ​ $ (9,769) Net cash (used in) provided by financing activities ​ $ (28,878) ​ $ 21,235 Net change in cash ​ $ 401 ​ $ (2,070) Cash at beginning of period ​ $ 748 ​ $ 2,818 Cash at end of period ​ $ 1,149 ​ $ 748 ​ Comparison of Cash Flow Activities from 2024 to 2023 Net cash provided by operating activities was $36.0 million during the year ended December 31, 2024, compared to net cash of $13.5 million used in operating activities during 2023.
Our Georgia manufacturing facility has unutilized square footage available and with additional investment can add capacity to increase the number of homes that can be manufactured. We intend to increase production at the Georgia facility over time, particularly in response to orders increasingly being generated from new markets.
Our Georgia manufacturing facility has space available and with additional investment can add capacity to increase the number of homes that can be manufactured.
Other revenue primarily consists of contract deposit forfeitures, consignment fees, commercial lease rents, service fees and other miscellaneous income and increased $0.2 million, or 3.5%, primarily due to a $2.7 million increase in forfeited deposits, a $0.3 million increase in servicer fee revenue and a $2.8 million decrease in consignment fees.
Other revenue primarily consists of contract deposit forfeitures, consignment fees, commercial lease rents, land sales, service fees and other miscellaneous income and increased $7.0 million, or 106.3%, primarily due to $8.9 million in land sales related to the Forest Hollow mobile home community and the property in Marble Falls, Texas, $0.5 million in rental income from our mobile home park properties, partially offset by a $1.5 million decrease in forfeited deposits, a $0.6 million decrease in rental income from leased mobile homes and a $0.3 million decrease in other miscellaneous revenue.
Dealer incentive expense decreased $0.7 million, or 55.4% in 2023 as compared to 2022. Other income (expense), net did not change in 2023, as compared to 2022.
Dealer incentive expense decreased $1.5 million, or 258.7% in 2024 as compared to 2023. Other income (expense), net increased by $8.3 million in 2024, as compared to 2023.
The increase in cash used in operating activities was partially offset by a decreased volume of dealer inventory loans net of collections, decreased other assets, and decreased accounts payable and accrued liabilities.
The increase in cash provided by operating activities was partially offset by decreased accrued liabilities and decreased dealer incentive liability.
The New Revolver provides for a four-year senior secured revolving credit facility with an initial commitment of $50,000 and an additional $25,000 commitment under an accordion feature. The New Revolver is secured by the Company’s consumer loans receivables and all escrow accounts associated with the consumer loans receivables.
Subsequently, the Company repaid in full the balance due on its prior line of credit with Capital One, N.A. and all commitments under this prior line of credit were terminated. The Revolver provides for a four-year senior secured revolving credit facility with an initial commitment of $50,000 and an additional $25,000 commitment under an accordion feature.
Comparison of Years ended December 31, 2023 and 2022 (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ ​ ​ 2023 2022 $ change % change Net revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product sales ​ $ 145,100 ​ $ 222,052 ​ $ (76,952) (34.7) % Consumer and MHP loans interest ​ 37,420 ​ 28,564 ​ 8,856 31.0 % Other ​ 6,624 ​ 6,399 ​ 225 3.5 % Total net revenue ​ 189,144 ​ 257,015 ​ (67,871) (26.4) % Operating expenses: ​ ​ ​ ​ Cost of product sales ​ 99,692 ​ 150,114 ​ (50,422) (33.6) % Selling, general administrative expenses ​ 24,279 ​ 27,568 ​ (3,289) (11.9) % Dealer incentive ​ 586 ​ 1,315 ​ (729) (55.4) % Total operating expenses ​ ​ 124,557 ​ ​ 178,997 ​ ​ (54,440) ​ (30.4) % Income from operations ​ 64,587 ​ 78,018 ​ (13,431) (17.2) % Other income (expense) ​ ​ ​ ​ Non‑operating interest income ​ 3,019 ​ 2,942 ​ 77 2.6 % Miscellaneous, net ​ 2,060 ​ 1,563 ​ 497 31.8 % Interest expense ​ (930) ​ (375) ​ (555) 148.0 % Total other ​ 4,149 ​ 4,130 ​ 19 0.5 % Income before income tax expense ​ 68,736 ​ 82,148 ​ (13,412) (16.3) % Income tax expense ​ (14,276) ​ (14,375) ​ 99 (0.7) % Net income ​ $ 54,460 ​ $ 67,773 ​ $ (13,313) (19.6) % ​ Product sales primarily consist of direct sales, commercial sales, inventory finance sales and retail store sales.
Comparison of Years ended December 31, 2024 and 2023 (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ ​ ​ ​ 2024 2023 $ change % change Net revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product sales ​ $ 129,345 ​ $ 145,100 ​ $ (15,755) (10.9) % Consumer, MHP and dealer loans interest ​ 41,182 ​ 37,420 ​ 3,762 10.1 % Other revenue ​ 13,664 ​ 6,624 ​ 7,040 106.3 % Total net revenue ​ 184,191 ​ 189,144 ​ (4,953) (2.6) % Operating expenses: ​ ​ ​ ​ Cost of product sales ​ 90,071 ​ 99,692 ​ (9,621) (9.7) % Cost of other sales ​ ​ 8,218 ​ — ​ 8,218 N/A % Selling, general administrative expenses ​ 23,222 ​ 24,279 ​ (1,057) (4.4) % Dealer incentive ​ (930) ​ 586 ​ (1,516) (258.7) % Total operating expenses ​ ​ 120,581 ​ ​ 124,557 ​ ​ (3,976) ​ (3.2) % Income from operations ​ 63,610 ​ 64,587 ​ (977) (1.5) % Other income (expense) ​ ​ ​ ​ Non‑operating interest income ​ 2,635 ​ 3,019 ​ (384) (12.7) % Miscellaneous, net ​ 10,482 ​ 2,060 ​ 8,422 408.8 % Interest expense ​ (689) ​ (930) ​ 241 (25.9) % Total other income ​ 12,428 ​ 4,149 ​ 8,279 199.5 % Income before income tax expense ​ 76,038 ​ 68,736 ​ 7,302 10.6 % Income tax expense ​ (14,396) ​ (14,276) ​ (120) 0.8 % Net income ​ $ 61,642 ​ $ 54,460 ​ $ 7,182 13.2 % ​ Product sales primarily consist of direct sales, commercial sales, inventory finance sales and retail store sales.
We consider our obligations on current contracts to be immaterial and accordingly we have not recorded any reserve for repurchase commitment as of December 31, 2023. Recent Accounting Pronouncements The Company elected to use longer phase in periods for the adoption of new or revised financial accounting standards under the JOBS Act while it was an emerging growth company.
We consider our obligations on current contracts to be immaterial and accordingly we have not recorded any reserve for repurchase commitment as of December 31, 2024.
Unless otherwise discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s Financial Statements upon adoption. Emerging Growth Company Status The Company’s status as an “emerging growth company” ended on December 31, 2023. An “emerging growth company,” as defined in the JOBS Act.
Unless otherwise discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s Financial Statements upon adoption. ​ ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Not applicable for smaller reporting companies. ​ 24 Table of Contents
Inventory finance sales decreased $39.9 million, or 47.5% from 2023 to 2022, due to the conversion of consignment arrangements to inventory finance arrangements that occurred in 2022 but not in 2023. Consumer, MHP and dealer loans interest income increased $8.9 million, or 31.0%, from 2023 to 2022 due to growth in our loan portfolios.
Inventory finance sales decreased $7.4 million, or 16.8% from 2023 to 2024, primarily due to dealers continuing to sell through their existing inventories. 20 Table of Contents Consumer, MHP and dealer loans interest income increased $3.8 million, or 10.1%, from 2023 to 2024 due to growth in our loan portfolios.
Product sales decreased $77.0 million, or 34.7%, in 2023 as compared to 2022. This decrease was driven by (i) the conversion of certain independent dealer consignment arrangements to inventory finance arrangements in 2022 that did not occur in 2023 and (ii) a decrease in unit volumes.
Product sales decreased $15.8 million, or 10.9%, in 2024 as compared to 2023. This decrease was driven primarily by a decrease in unit volumes shipped, primarily in direct sales and inventory finance sales categories.
For example, the sale of manufactured homes includes providing transportation for dealers. We also provide financing options to the customers to facilitate such sale of homes. In addition, the sale of homes is directly related to financing provided by us.
All of our activities are interrelated, and each activity is dependent and assessed based on how each of the activities of the Company supports the others. For example, the sale of manufactured homes includes coordinating or providing transportation for dealers. We also provide financing options for customers to facilitate home sales.
The cumulative effect of the adoption was a net decrease of $698 to beginning retained earnings at January 1, 2023. 26 Table of Contents In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848.
In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848. The amendments in this update extend the transition relief period for reference rate reform from December 31, 2022 to December 31, 2024.
Removed
We are the sixth largest producer of manufactured homes in the United States as ranked by number of homes manufactured based on information available from the Manufactured Housing Institute and IBTS for the nine month period ending September 30, 2023.
Added
Allowance for Loan Losses—Other Notes Receivable Other notes receivable are stated at amounts due from customers net of allowance for loan losses. We determine the allowance by considering several factors including the aging of the past due balance, the customer’s payment history, 18 Table of Contents and our previous loss history.
Removed
Actual results may differ from these estimates under different assumptions or conditions. Management believes the following accounting policies are critical to our operating results or may affect significant judgments and estimates used in the preparation of our financial statements.
Added
We establish an allowance reserve composed of specific and general reserve amounts that are deemed to be uncollectible. Historically we have not experienced material losses on the Other notes receivable. Allowance for Loan Losses—Dealer Financed Receivables Dealer financed receivables are stated at amounts due from customers net of allowance for loan losses.
Removed
Historically we have not experienced material losses on the MHP Notes. 20 Table of Contents Inventories Inventories consist of raw materials, work-in-process, and finished goods. Finished goods are stated at the lower of cost or net realizable value. Raw materials cost approximates the first-in first-out method.
Added
We determine the allowance by considering several factors including the aging of the past due balance, the customer’s payment history, and our previous loss history. We establish a general reserve for amounts that are deemed to be uncollectible. Historically we have not experienced material losses on the Dealer financed receivables.
Removed
We evaluate finished goods inventory based on age, and we classify our finished goods inventory greater than one year old as non-current.
Added
The change in the balance of our MHP loan portfolio is primarily due a settlement agreement we reached with a significant borrower, as discussed in Note 5, Notes Receivable from Mobile Home Parks, to our December 31, 2024 financial statements included in Part II, Item 8, Financial Statements and Supplementary Data, of this Form-10K, which resulted in reclassifying balances from Other notes receivable, net to Notes receivable from mobile home parks on our balance sheet.
Removed
Product Warranties We provide retail home buyers with a one-year warranty from the date of purchase on manufactured inventory. Product warranty costs are accrued when the covered homes are sold to customers. Product warranty expense is recognized based on the terms of the product warranty and the related estimated costs.
Added
Selling, general and administrative expenses decreased $1.1 million, or 4.4%, in 2024 as compared to 2023.
Removed
Factors used to determine the warranty liability include the number of homes under warranty and the historical costs incurred in servicing the warranties.
Added
We had a $8.5 million increase in Miscellaneous, net primarily due to (i) gains related to the settlement agreement described above, (ii) a gain on the sale of property in Georgia, (iii) gains related to properties acquired through foreclosure and (iv) reversals of certain balance sheet liabilities.
Removed
The conversion of consignment arrangements to inventory finance arrangements resulted in an increase to product sales of approximately $29.1 million during 2022, and the conversion had a minimal impact on product sales in 2023.
Added
We had a $0.4 million decrease in interest income on Other notes and a $0.2 million decrease in interest expense. Income tax expense was $14.4 million for 2024 compared to $14.3 million for 2023.
Removed
Direct sales decreased $28.0 million, or 61.5% from 2023 to 2022, mainly due to general slowdown in the market for mobile homes. Commercial sales decreased $6.4 million, or 10.5% from 2023 to 2022, due to mobile home park operators slowing or delaying purchases of mobile homes.
Added
Net cash provided by financing activities of $21.2 million in 2023 was attributable to net proceeds from our lines of credit. In November 2022, our Board of Directors approved a share repurchase program to authorize the repurchase of up to $10.0 million of the Company’s common stock.
Removed
Interest income in 2023 from dealer finance notes resulted from the 2022 conversion of consignment arrangements to inventory finance arrangements and the addition of new dealer finance notes in 2023.
Added
On August 6, 2024, our Board of Directors authorized the repurchase of an additional $10.0 million of the Company’s common stock under the share repurchase program. We repurchased 262,530 shares of common stock for $5,398 in the open market during the year ended December 31, 2024. As of December 31, 2024, we had a remaining authorization of approximately $14,602.
Removed
Net changes included a $1.3 million increase in income from gains related to financing dealer and consumer loans, a decrease of $0.2 million in capital gains related to the sale of leased property, an increase of $0.1 million in interest income, a decrease of $0.5 million in other income, a $0.6 million increase in interest expense and an increase of $0.1 million in other expense.
Added
The Revolver is secured by the Company’s consumer loans receivables and all escrow accounts associated with the consumer loans receivables.

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