Legacy Housing (LEGH) Q1 2025 earnings summary

Executive summary

• Net revenue for Q1 2025 was $35.7 million, down 17.5% year-over-year, driven by a 21.2% decline in product sales volume, especially in mobile home park and retail sales.

• Net income fell 32.1% to $10.3 million, and basic EPS dropped 30.6% to $0.43 per share compared to Q1 2024.

• Management implemented product simplification, adjusted park financing, and made key hires to drive future growth.

• Book value per share rose 13.1% to $20.87, surpassing $500 million in total book value for the first time.

• Vertically integrated operations and diverse financing solutions continue to support the business model.

Financial highlights

• Net revenue per product sold increased 23.1% year-over-year, driven by a shift to higher-margin retail sales.

• Cost of product sales decreased 16.0%, but gross margin fell to 29.2% from 33.6% year-over-year.

• Other revenue dropped 59.2% due to lower contract deposit forfeitures.

• Operating income was $11.6 million, down 30.8% from Q1 2024.

• Inventory increased to $41.4 million from $37.5 million at year-end 2024.

Outlook and guidance

• Management expects higher production in Texas and Georgia plants in Q2 2025 versus Q1.

• Gross margin is expected to stabilize around 30% for the remainder of 2025.

• Retail and dealer loan originations are up 51% year-to-date through April 2025.

• Management remains optimistic about the year following recent operational changes.

• Management expects cash flow, cash on hand, and available credit to be sufficient for operations and growth for at least the next 12–18 months.