Legacy Housing (LEGH) Q4 2024 earnings summary

Executive summary

• Net income increased 13.2% to $61.6 million, with basic EPS up 14.3% year-over-year.

• Book value per share rose 13.9% to $20.40 at year-end 2024.

• Product sales declined 10.9% year-over-year due to lower unit volume, but net revenue per product sold rose 1.9% from moderate price increases.

• Net revenue for 2024 was $184.2 million, down 2.6% year-over-year.

• Management highlights strong demand for affordable housing and a focus on capital allocation, especially for households earning under $75,000.

Financial highlights

• Interest income from consumer, MHP, and dealer loans grew 10.1% to $41.2 million, driven by portfolio growth.

• Other revenue more than doubled, up 106.3% to $7.0 million, mainly from $8.9 million in land sales.

• Cost of product sales fell 9.7%, while gross profit margin slipped to 30.4% from 31.3% year-over-year.

• SG&A expenses decreased 4.4%, led by lower warranty, consulting, and salary costs.

• Income from operations was $63.6 million, a 1.5% decrease from 2023.

Outlook and guidance

• Retail finance fundings in Q1 2025 are tracking ahead of 2024's 8% growth.

• Community business is improving, with more large order requests and expectations for continued growth in 2025.

• Focus for 2025 includes Texas park sales, Southeast dealer sales, streamlining operations, and monetizing non-core assets.

• Management expects continued strong demand for affordable housing in 2025 and is committed to effective capital allocation.

• If share price declines, management plans aggressive share repurchases.