Earnings call transcript: Legacy Housing Q2 2025 beats expectations with strong revenue

Legacy Housing Corp (LEGH) reported its second-quarter 2025 earnings, surpassing market expectations with an earnings per share (EPS) of $0.61, compared to a forecast of $0.55, marking a 10.91% surprise. Revenue also exceeded projections, reaching $50.2 million against an expected $43.53 million, a 15.32% surprise. According to InvestingPro data, the company maintains a strong financial health score of 2.81 (GOOD), with notably strong cash flow and profitability metrics. Despite these positive results, the stock experienced a slight decrease in regular trading, closing at $23.59, down 0.17%. However, it rose 0.72% in premarket trading, reflecting investor optimism.

Key Takeaways

• Legacy Housing’s Q2 2025 EPS of $0.61 beat forecasts by 10.91%.
• Revenue reached $50.2 million, surpassing expectations by 15.32%.
• Stock showed mixed reactions, with a slight drop post-earnings but a 0.72% rise in premarket trading.
• Strong performance in Texas market and inventory finance sales.
• Continued focus on affordable housing and strategic growth initiatives.

Company Performance

Legacy Housing demonstrated robust performance in Q2 2025, with notable growth in product sales and financial metrics. The company increased its product sales by 21.3%, reaching $6.7 million, and improved its net revenue per product sold by 10.5%. InvestingPro analysis reveals the company holds more cash than debt on its balance sheet, with a strong current ratio of 3.91x, indicating excellent liquidity. Despite a 9.2% decrease in net income to $14.7 million, the company maintained a healthy financial position, with a cash balance increase to $2.6 million from $1.1 million. The book value per share rose by 11.2% to $21.32, reflecting strong shareholder value. Subscribers to InvestingPro can access 7 additional key insights about LEGH’s financial position.

Financial Highlights

• Revenue: $50.2 million, up from the forecasted $43.53 million.
• Earnings per share: $0.61, exceeding the forecast of $0.55.
• Gross profit margin improved slightly to 32.4%.
• Cash balance increased to $2.6 million from $1.1 million.
• Share repurchase of 260,635 shares for $5.8 million.

Earnings vs. Forecast

Legacy Housing’s Q2 2025 results significantly outperformed expectations, with an EPS surprise of 10.91% and a revenue surprise of 15.32%. The company’s ability to exceed both EPS and revenue forecasts highlights its effective management strategies and market position.

Market Reaction

Following the earnings announcement, Legacy Housing’s stock experienced a slight decline of 0.17% in regular trading, closing at $23.59. However, in premarket trading, the stock rose by 0.72%, reflecting a positive investor sentiment towards the company’s strong financial performance and future prospects.

Outlook & Guidance

Looking ahead, Legacy Housing remains cautiously optimistic about its full-year performance. The company is prioritizing backlog building and expects higher production in its Texas plants. With analyst price targets ranging from $26 to $34, and a consensus recommendation of 2.0, market experts maintain a positive outlook on the stock. The company is exploring opportunities in lending and capital allocation, while monitoring the potential passage of the Road to Housing Act, which could impact future operations. For detailed analysis and comprehensive insights, investors can access the full LEGH Pro Research Report, available exclusively on InvestingPro.

Executive Commentary

CEO Duncan Bates emphasized the company’s strategic focus on affordability and growth, stating, "We really don’t think that the affordable housing crisis is fixed in this industry or fixed in this country without this industry." He also expressed optimism about the company’s long-term outlook, noting, "We’re cautiously optimistic, but I think longer term, our outlook is pretty strong."

Risks and Challenges

• Elevated interest rates and higher operating costs could pressure margins.
• Slower demand in the Southeast market may impact future sales.
• Budget constraints among renters could affect affordability-focused initiatives.
• Commodity price fluctuations and labor costs remain key concerns.
• Competitive pressures in the affordable housing market.

Q&A

During the earnings call, analysts focused on the company’s dealer channel and retail performance, which are driving revenue growth. Questions also addressed pricing strategies, with management highlighting a balance between pricing and volume considerations. Additionally, the company is closely watching commodity prices and labor costs as part of its strategic planning.

Full transcript - Legacy Housing Corp (LEGH) Q2 2025:

Conference Operator: Ladies and gentlemen, thank you for standing by. Welcome to Legacy Housing Corporation’s second quarter twenty twenty five earnings call. At this time, all participants are in a listen only mode. After the speaker’s presentation, there will be a question and answer session. And to ask a question during the session, you would need to press 11 on your telephone.

You would then hear an automated message advised that your hand is raised. And to withdraw your question, please press 1. Please be advised that today’s conference is being recorded. I would like now to turn the conference over to Duncan Bates, President and Chief Executive Officer. Please go ahead, sir.

Duncan Bates, President and Chief Executive Officer, Legacy Housing Corporation: Good morning. This is Duncan Bates, Legacy’s President and CEO. Thank you for joining our second quarter twenty twenty five conference call. Max Zafrick, Legacy’s General Counsel, will read the Safe Harbor disclosure before getting started. Max?

Max Zafrick, General Counsel, Legacy Housing Corporation: Thanks, Duncan. Before we begin, I will remind our listeners that management’s prepared remarks today may contain forward looking statements, which are subject to risks and uncertainties, and management may make additional forward looking statements in response our questions. Actual results may differ from management’s current expectations, and Legacy assumes no obligation to update these projections in the future unless otherwise required by applicable law.

Duncan Bates, President and Chief Executive Officer, Legacy Housing Corporation: Thanks, Max. I’m joined today by Jeff Feinman, Legacy’s Chief Financial Officer. Jeff will discuss our second quarter financial performance, then I will provide additional corporate updates and open the call for q and a.

Jeff Feinman, Chief Financial Officer, Legacy Housing Corporation: Thanks, Duncan. Product sales primarily consist of direct sales, commercial sales, inventory finance sales, and retail store sales. Product sales increased $6,700,000 or 21.3% during the three months ended 06/30/2025 as compared to the same period in 2024. This increase was driven by an increase in unit volume shipped primarily in inventory finance sales, retail sales, and mobile home park sales categories. For the three months ended 06/30/2025, our net revenue per product sold increased by 10.5% as compared to the same period in 2024.

The increase is primarily due to an increase in units sold to consumers, which are sold at higher retail prices. Consumer MHP and dealer loans interest income increased 1,000,000 or 10.6% during the three months ended 06/30/2025 as compared to the same period in 2024. Between 06/30/2025 and 06/30/2024, our consumer loan portfolio increased by $24,600,000 our MHP loan portfolio increased by $20,300,000 and our dealer finance notes decreased by 500,000.0 Other revenue primarily consists of contract deposit forfeitures, consignment fees, commercial lease rents, land sales, service fees, and other miscellaneous income and decreased 100,000.0 or 10.8% during the three months ended 06/30/2025 as compared to the same period in 2024. This decrease was primarily due to a $200,000 decrease in forfeited deposits, partially offset by a net $100,000 increase in other miscellaneous revenue. The cost of product sales increased $4,400,000 or 20.3% during the three months ended 06/30/2025, as compared to the same period in 2024.

The increase in costs is primarily related to the increase in units sold. Gross profit margin was 32.4 of product sales during the three months ended 06/30/2025 as compared to 31.9% during the three months ended 06/30/2024. The cost of other sales was 600,000.0 during the three months ended 06/30/2025. Selling, general, and administrative expenses increased 1,100,000.0 or 19.1% during the three months ended 06/30/2025 as compared to the same period in 2024. We had a 1,100,000.0 increase in warranty expense, primarily due to an over accrual and warranty costs in the 2024 that we reversed.

And we also had a 500,000.0 increase in repossessed home expense, a 200,000.0 increase in bad debt expense, a 100,000.0 increase in loan loss provision, offset by a 600,000.0 decrease in legal expense, a 100,000.0 decrease in property tax expense, and a net 100,000.0 decrease in other miscellaneous expense. Other income decreased 2,800,000.0 or 74.5% during the three months ended 06/30/2024 as compared to the same period in 2024. We had a a we had a one decrease of 500,000.0 in nonoperating interest income reflecting a lower balance of of other notes receivable. Two, a 2,500,000 decrease in miscellaneous income, primarily due to land sales and a reversal of accrued liabilities during the three months ended 06/30/2024 that did not occur during the three months ended 06/30/2025. And three, a decrease of 200,000 in interest expense.

Net income decreased 9.2% to $14,700,000 in the 2025 compared to the 2024. Basic earnings per share decreased 9% to $0.61 per share in the 2025 compared to the 2024. As of 06/30/2025, we had approximately $2,600,000 in cash compared to $1,100,000 as of 12/31/2024. We drew a small amount on the revolver in the second quarter. The outstanding balance of the revolver was $100,000 as of June 3025, and was zero as of 12/31/2024.

At the end of the 2025, Legacy’s book value per basic share outstanding was $21.32, an increase of 11.2% from the same period in 2024. Finally, we repurchased 260,635 shares of common stock for 5,800,000.0 during the three months ended 06/30/2025. As of 06/30/2025, we had a remaining authorization of approximately $8,100,000 on our share repurchase program.

Duncan Bates, President and Chief Executive Officer, Legacy Housing Corporation: Thanks, Jeff. I’m pleased with our second quarter results. Our focus has remained on product sales. While there’s still uncertainty in the market and weakness in certain geographies and channels, we are seeing positive signs from the changes we’ve made. Earlier this year, we took a hard look at historical sales data and simplified our product line.

That process had its challenges, but some of the adjustments are paying off. As Jeff mentioned, product sales increased 21.3% during the second quarter compared to the same period in 2024. That growth was primarily driven by dealer activity. Product sales were up 58% sequentially over the 2025. Inventory finance sales or floor plan sales to independent dealers increased $4,900,000 or 53.3% compared to the 2024.

Retail sales or sales from our company owned retail stores rose $2,900,000 or 64.2% over the same period. These gains reflect stronger demand across our dealer channel and our continued traction from our product line simplification efforts. Commercial sales or sales to community owners increased 5.3% during the three months ended June 30 compared to the same period in 2024. Our community customers continue to face headwinds, including elevated interest rates, higher operating costs, and budget constraints among renters. Despite these challenges, we’re encouraged by ongoing discussions with both new and existing community owners regarding large orders, which should support volume growth in this channel.

Product gross margins were 32.4% in the 2025. I’m proud of our team’s strong execution and maintaining healthy margins during a rapidly evolving environment for materials and labor costs. We remain disciplined in our pricing strategy and continue to manage expenses carefully to protect profitability. Our top priority for the remainder of 2025 is continuing to build our backlog, which should support increased production volume in the coming quarters. We expect higher output out of our Texas plants where demand remains stronger, while activity in the Southeast is comparatively slower.

We continue to actively manage our loan portfolios. Since the 2024, our retail loan portfolio has grown by 24,600,000, while our MHP loan portfolio has grown by 20,300,000. Reflecting strong demand in our dealer channel, retail loan fundings were up 49% in the 2025 compared to the same period in 2024. There were no material land sales during the 2025, but we will continue to evaluate opportunities to monetize noncore land when pricing reflects underlying value. In the 2024, we completed a noncore land sale that generated a meaningful profit, creating a challenging year over year comparison for this quarter’s earnings.

We are focused on completing phase one of Falcon Ranch, our 1,100 lot development in Bastrop County. Phase one includes 115 lots with roads and utilities already complete. The final remaining project, a bridge, is currently under construction. At the same time, we’re making progress on phase two where utilities are now in place and road work is underway for the first 350 lots. Over the last eighteen months, we repurchased over 552,000 shares of common stock in the open market for an aggregate cost of 11,900,000.0, reducing out our outstanding share count by over 2%.

These repurchases reflect our continued confidence in the long term value of the business and our disciplined approach to capital allocation. With no debt and over 10,000,000 in cash on the balance sheet today, we remain well positioned to continue repurchasing shares. We are keeping our eyes on the Road to Housing Act, which passed the Senate Banking Committee and is awaiting a full Senate vote. The bill reauthorizes HUD’s price program, which provides grants to improve infrastructure like water and sewer systems and manufactured housing communities. It also removes the federal requirement for a permanent chassis, lowering build costs and allowing for more flexible home designs.

If passed, the bill should support growth in both home sales and community development. Operator, this concludes our prepared remarks. Please begin the Q and A.

Conference Operator: The first question comes from Rohit Seth with B. Riley Securities. Your line is open.

Rohit Seth, Analyst, B. Riley Securities: Hi. Thanks for taking my question. So good order flow coming in through the second quarter, a good rebound on volumes. Just curious what you’re seeing as we enter July, August. Have you seen the same momentum continue?

And is it coming from the same channels? Just get a sense of how you see the rest of the year.

Duncan Bates, President and Chief Executive Officer, Legacy Housing Corporation: Yeah. We hey, Rohit. Mhmm. You know, we’re really we’re happy with the second quarter performance. Obviously, the, you know, the dealer side of our business really drove the, you know, the the the revenue growth.

Rohit Seth, Analyst, B. Riley Securities: Continue

Duncan Bates, President and Chief Executive Officer, Legacy Housing Corporation: to see that, you know, this quarter. And, you know, we’re seeing signs of life on the community side. I think the, you know, the difficult thing has been, you know, the prices for mobile home parks have gone up pretty dramatically. You’ve got increased financing costs. You got you know, homes are more expensive.

Operating costs are higher, and you’ve got a you’ve got a renter that, you know, can only afford so much. And so I think, you know, there there is a shift to, you know, smaller houses, and we’re having some success in that. But we really you know, we need to land a couple of these large orders, you know, to really see an uptick in that side of our business for the rest of the year.

Rohit Seth, Analyst, B. Riley Securities: K. And then on the Bastrop, looks like you got making some progress there. Do you think you’ll be selling plots there by the fourth quarter? Is this something happening in ’25, or is this more 2026?

Duncan Bates, President and Chief Executive Officer, Legacy Housing Corporation: You know, that’s the that’s the goal. I mean, the final piece of this thing is we’ve gotta build a bridge, and the bridge is under construction, you know, and it’s well underway. But, you know, ultimately, Roads are and utilities are all in phase one. You gotta complete the bridge to, you know, connect it to the, you know, infrastructure outside of the the community. And it’s not you know, I wouldn’t say we’re, like, crossing any waterway.

I did and, but it’s certainly a project. So the goal is to get that done. There’s a way to, you know, shortcut kind of, you know, starting to sell lots. That’s something we’re looking at, you know, where we can go ahead and plot before the, before the bridge is done. But, you know, we’re we’re just well underway on construction there.

So, you know, the goal is certainly to sell lots as as soon as possible. There’s a lot of demand down there. We’ve got a dealer on-site who’s, you know, who’s been doing, you know, really well with with sales this year. And, you know, what’s been interesting for me to watch is, like, we’re really gaining ground on phase two where you’ve got all the utilities in, and, we’re putting the roads down for the first 350 rental lot. So good progress.

We’ve made a couple key hires down there. You know, we’ve got the we’ve got the cash to push this thing forward, and, we’re working as as hard as we can to get it open.

Rohit Seth, Analyst, B. Riley Securities: Yeah. Fantastic. If I can squeeze one last one in on the s g and a line. It’s running up a little bit higher than, you know, as a percentage of sales. And is this, like, the new normal or at least for the year?

Just any sense of kind of the trajectory on SG

Duncan Bates, President and Chief Executive Officer, Legacy Housing Corporation: and No. I think SG and A will kinda dip back in line to where it’s where it’s been. We had some kinda wonky comparisons with, you know, year over year accruals for things like warranty expense and, you know, legal expense and and others that, you know, shifted that upward.

Rohit Seth, Analyst, B. Riley Securities: Alright. Fantastic. Thank you. I’ll pass it on.

Conference Operator: Thanks. And the next question will come from Alex Rajaele with Texas Capital Securities. Your line is open.

Alex Rajaele, Analyst, Texas Capital Securities: Thank you. Good morning, Duncan.

Duncan Bates, President and Chief Executive Officer, Legacy Housing Corporation: Hey. Good morning, Alex.

Alex Rajaele, Analyst, Texas Capital Securities: As it relates to being encouraged by discussions with community owners for large orders, what are the primary items that are either sparking these interests or maybe keeping them on hold until an order?

Duncan Bates, President and Chief Executive Officer, Legacy Housing Corporation: Well, you know, we we’ve got a handful of, you know, I would call them, like, large customers that we’ve worked with for a long period of time. And, you know, these guys tend to buy communities that are in disrepair, and they fix them up, and they replace all the homes. And, you know, then they move to the next one. And so, you know, especially through, like, COVID, we had some, you know, some huge orders as these guys really expanded, and then they took a, you know, they took a breather. And so, you know, what we’re seeing is we’ve got some large customers that have either, you know, purchased or, have communities under contract where, you know, they’ll need a decent amount of homes.

And I I think, you know, on the on the other side, on the new customers, I mean, we’ve been for the past couple years, you know, we’ve been growing with some younger guys as we replace, you know, the, you know, kind of the legacy customer base. And, you know, those guys may start by ordering six homes, and then next year, they order 20 homes. And, you know, you just keep you keep growing with them as their portfolio builds. I think, you know, one change is that it seems like the financing markets have opened up a little bit. Right?

So we’re seeing, you know, some payoffs on the on the MHP portfolio as, you know, now we’ve got customers who have parks, you know, with newer houses in them, and they’re stabilized. And they’re, you know, they’re monetizing those and, you know, rolling those those those gains into new properties to do the same thing.

Mark Smith, Analyst, Lake Street: Makes sense.

Alex Rajaele, Analyst, Texas Capital Securities: And then

Rohit Seth, Analyst, B. Riley Securities: can you talk a

Alex Rajaele, Analyst, Texas Capital Securities: bit about average selling price? Are you surprised that it’s holding up here, and any thoughts there on that?

Duncan Bates, President and Chief Executive Officer, Legacy Housing Corporation: Yeah. I mean, the the average selling price for the quarter, you know, we went, like, on a quarter quarter over quarter basis from, say, 61,000 to 68,000. I think the bulk of that was just driven by, you know, the increase in, you know, sales through our company owned retail stores. You know? But we we were, you know, we were slower to raise raise prices during COVID.

You know, we’ve raised prices more aggressively, you know, with with as we’ve figured out kind of the, you know, the the impact of tariffs on our costs. And so, you know, I I do, you know, I I do expect it to stay elevated, but certainly, you know, there’s a point where it’s at the detriment of or to the detriment of, you know, volume through the plants.

Alex Rajaele, Analyst, Texas Capital Securities: And then you talked a bit about Georgia being a little bit slower maybe in the second half. Any additional color on that?

Duncan Bates, President and Chief Executive Officer, Legacy Housing Corporation: Yeah. The Southeast market just feels, you know, feels slow. I think, you know, Cavco, commented on that during their call. You know, Florida’s slower. We’re seeing, you know, similar things in the Southeast.

I mean, we’ve got customers that are doing things. We’ve, you know, won some new customers over there. We’ve had some, you know, workforce housing builds over there. Dealer base isn’t as strong out of that plant. So you’re, you know, you’re you’re more reliant on, or we’re more reliant on community customers.

And but it it just seems a little bit slower than what we’re seeing in Texas.

Alex Rajaele, Analyst, Texas Capital Securities: Understood. Thank you.

Conference Operator: Thanks, Alex. And the next question is going to come from Daniel Moore with CJS Securities. Your line is open.

Daniel Moore, Analyst, CJS Securities: Good morning, Duncan. Good morning, Jeff. Wanted to so obviously, you had a really nice jump in in product sales in the quarter. Volume’s up double digits. Year to date, we’re we’re relatively flat.

Just wanna make sure and and and just kind of remind me, were were there any sales that may have slipped from q one to q two, or is it more demand actually improving, you know, as we’ve worked through the year?

Duncan Bates, President and Chief Executive Officer, Legacy Housing Corporation: You know, I think we had we had some orders on the community side that slipped. I mean, first quarter wasn’t our strongest performance from a product sales standpoint. But, you know, you see that, you know, community sales, at least quarter over quarter, are you know, were relatively flat. They were up, you know, 5% or so. So, you know, there were some like, there were certainly some orders that slipped, but they were mainly on the, you know, mainly on the community side.

I think, you know, we saw on the dealer side was was actually some you know, a little bit better strength. But, you know, the market’s still choppy. I mean, it’s still, like, Parkside’s slower than we’d like it to be, You know, certain geographies either even within, you know, areas that we serve out of our Georgia plant or out of our Texas plants seem to be slower than others. So, you know, we’re we’re cautiously optimistic on the year, but, you know, we continue to be here every day working and trying to get houses built and shipped.

Daniel Moore, Analyst, CJS Securities: Got it. And then specifically for retail, obviously, retail stores had their highest quarter, you know, over 7,000,000 in sales, highest quarter that we’ve seen in in multiple years. Is that a function, you know, I guess, talk to the sustainability of that and and and any update you can provide on how the investments you’ve been making in retail sales force are progressing.

Duncan Bates, President and Chief Executive Officer, Legacy Housing Corporation: Yeah. I mean, the the key to retail’s systems processes and and people, and you need to get people, you know, selling houses and making commissions to retain them. And I think that’s something that we’ve, you know, we’ve struggled with for a while. We’ve we’ve got, you know, a pretty good team on the retail side. They had a great quarter.

You know? We’ve got certain stores that are performing better than others. And, you know, the focus right now is bringing the underperforming stores up to, you know, some type of baseline, you know, and continuing to perform at the stores that are doing better. So it was a good quarter for the retail team. I think it’s a, you know, representative of what we can do, and and we just gotta we gotta keep we gotta keep pushing forward on that.

You know, July was a little bit slower, but, you know, not not terrible either. So I I think some of these, you know, some of these changes are are helping, but we still have a ways ways to go. I mean, I I really view that as an opportunity for us. And you see what it does if if we can push more volume through that channel. You know, it does help us on the, you know, on the revenue side, and and it’s reflected in the average selling price.

Daniel Moore, Analyst, CJS Securities: Helpful. One or two more. It’s just a little bit of so on on the gross margin side, overall, saw a little bit of pressure, you know, year over year, but then you called out, I think, you know, on product sales gross margin improved. So just I guess, if I look at holistically, we were at 47%, for the company. Is that a you know, we expect that to be kinda new level or improve as we move forward just to talk about the puts and takes there?

Duncan Bates, President and Chief Executive Officer, Legacy Housing Corporation: Yeah. See, when I when I when I talk about gross margin, I’m really just looking at the, you know, the product gross margin. So product revenue and and, the cost of goods sold.

Mark Smith, Analyst, Lake Street: Mhmm.

Duncan Bates, President and Chief Executive Officer, Legacy Housing Corporation: And so in ’24, I’ve got 31.9%, you know, which were you know, jumped up to 32.4% for the 2025. I think if you look at it as a whole, you know, we had a bump in SG and A due to, you know, some expenses, but also due to kind of some, you know, some mismatches of accruals from the 2024 that, you know, if you look at gross margin in total, it’s lower for the second quarter. I but I’m I’m discussing just product gross margin.

Daniel Moore, Analyst, CJS Securities: Makes sense. Lastly, I think you touched on this, but, you know, bought back 6,000,000 of stock in the quarter, I think 11,000,000 year to date. But the stock’s sitting here, you know, not too far above book value. Is that likely continued use of capital and cash flow as we move forward?

Duncan Bates, President and Chief Executive Officer, Legacy Housing Corporation: Yeah. I mean, we’ve gotta weigh it against other opportunities. And, you know, we’re seeing a lot right now, on the on the lending side, you know, to put put money to work at at good rates of return. You know, the the business has, you know, over the last twenty years, you know, generated, say, you know, 15 or 10 to 15% after tax returns pretty consistently. And so, you know, we’re, we obviously we’re we’re watching the stock, but we’re gonna be opportunistic buyers.

We’re not just gonna buy stock just to buy it if we’ve got opportunities to deploy the capital elsewhere.

Daniel Moore, Analyst, CJS Securities: Very good. Makes sense. Appreciate the color.

Duncan Bates, President and Chief Executive Officer, Legacy Housing Corporation: Thanks, Dan.

Conference Operator: And the next question comes from Mark Smith with Lake Street.

Mark Smith, Analyst, Lake Street: Duncan, wanted to ask first just you’re just talking about products margin a little bit. Would love to hear kind of your outlook as we think about tariffs and some inflationary pressure, if you’re seeing any items that are that are moving higher, kind of your outlook here as we think about second half or even into next year.

Duncan Bates, President and Chief Executive Officer, Legacy Housing Corporation: Yeah. As you can imagine, there’s a lot of moving parts. You know, I think from, you know, the inner the, you know, the tariffs and the impact on international goods, you know, we’ve adjusted our pricing accordingly. But you’ve got, you know, you’ve got moving, like, moving commodity prices in other materials. I mean, you’ve seen kind of lumber futures have crept up.

OSB has been low. Steel’s been, you know, relatively flat. And but, you know, what’s what I don’t think is going lower lower labor costs. And so that’s, you know, something that we’re keeping an eye on. I think there’s a, you know, there’s a balance between price and volume, and, you know, that’s like you you gotta keep you gotta keep the plants running.

You gotta keep you know, you can’t be under absorbed on labor. But, certainly, the, you know, the input prices on, you know, most of these products that we buy to assemble houses are going up.

Mark Smith, Analyst, Lake Street: Yeah. And back to to pricing a little bit in the ASP, it sounds like it was it was largely a function of of the sales mix. But but can you quantify or talk to maybe over the last six months any any kind of pricing action that you guys have taken?

Duncan Bates, President and Chief Executive Officer, Legacy Housing Corporation: Yeah. I mean, we’ve we’ve had, know, we’ve had a couple price increases this year. We started in February. You know, we had a a one that I’d say it’s more material kind of, you know, mid to late June. And it’s, you know, it’s something that we’re, like, we’re keeping an eye on, but it’s also a difficult time right now.

I mean, there just seems to be a lot of moving, you know, moving pieces with commodity prices. I think with a little bit higher prices, it does give you some flexibility, you know, to run, like you know, to put the advertising machine to work and do some, you know, sales and other types of incentives, especially as we head into our fall show coming up in September.

Mark Smith, Analyst, Lake Street: K. And the last one for me. Just just curious your thoughts around kind of consumer behavior, you know, and if you’re seeing a difference out there between kind of the the renter in how they’re holding up, versus kind of a a homeowner or home buyer. Any differences there, and and if there’s some pressure on renters if that’s maybe hurting the the MHP market a bit.

Duncan Bates, President and Chief Executive Officer, Legacy Housing Corporation: You know, I think the renters I think the renters are, you know, fairly, maybe not tapped out, but they’re they’re certainly price sensitive. And, you know, if if your if your mobile home park model, you know, is showing that you’re gonna, you know, continue to raise rents and, you know, costs of everything else have gone up. All your operating costs, you know, homes are more expensive, financing’s more expensive. You know, I think it I think it does put pressure on the on the community operators where, you know, the spread isn’t as great as it was a few years ago, which is, you know, shifting a lot of these guys to smaller houses that they can rent at, you know, similar prices and keep them, you know, keep the monthly payments affordable. I think, you know, the the second quarter, obviously, dealer business performed a little bit better, but I wouldn’t say that, you know, demand is off the charts on the on the dealer business, you know, right now.

I mean, I think it’s it’s spotty. Customers are price conscious. And, you know, but compared to a stick built home, I mean, you’re, you know, you’re you’re you’re so much more affordable. And that although the, you know, the next few quarters could be choppy, you know, I really don’t think that, you know, the affordable housing crisis is fixed in this industry or fixed, you know, in this country without this industry. And so the you know, some of the some of the work at, you know, legislative level is, you know, is pretty encouraging where there’s been a lot of talks, you know, for years about regulatory reform to the HUD code, and, you know, you’re starting to actually see some traction given, you know, how bad the affordability problem is in this country.

And so, you know, I I don’t think it like, there’s we’re we’re cautiously optimistic, but I think longer term, our outlook is is pretty strong.

Mark Smith, Analyst, Lake Street: Excellent. That’s helpful. Thank you.

Duncan Bates, President and Chief Executive Officer, Legacy Housing Corporation: Alright. Thank you.

Conference Operator: I show no more further questions in the queue. I would now like to turn the call back over to Duncan for closing remarks.

Duncan Bates, President and Chief Executive Officer, Legacy Housing Corporation: Thank you for joining today’s earnings call. We appreciate your interest in Legacy Housing. We’re hosting our fall show in Fort Worth on September. Feel free to register on our website. Operator, this concludes our call.

Thank you.

Conference Operator: Thank you. This does conclude today’s conference call, and thank you for participating. And you may now disconnect.

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