Legacy Housing Corporation Reports 17.5% Revenue Decline in Q1 2025

Legacy Housing Corporation reported a decline in financial performance for the first quarter of 2025, with total net revenue of $35.7 million, down 17.5% from $43.2 million in the same period of 2024. The decrease was primarily driven by a significant drop in product sales, which fell by 21.2% to $24.3 million, compared to $30.8 million a year earlier. The company attributed this decline to reduced unit volumes shipped, particularly in mobile home park and retail sales. Despite the overall revenue drop, interest income from consumer, mobile home park (MHP), and dealer loans remained relatively stable at $10.7 million, reflecting a slight increase from $10.6 million in the prior year.

Operating expenses also decreased, totaling $24.1 million, down 9.1% from $26.5 million in the previous year. The cost of product sales decreased by 16.0% to $17.2 million, aligning with the reduction in sales volume. However, selling, general, and administrative expenses rose by 6.9% to $6.3 million, driven by increased legal expenses and provisions for loan losses. As a result, the company reported a net income of $10.3 million, a decline of 32.1% from $15.1 million in the first quarter of 2024, leading to a diluted earnings per share of $0.41, down from $0.60.

In terms of operational metrics, Legacy Housing sold 427 home sections during the first quarter of 2025, a decrease of 34% from 645 home sections sold in the same period last year. The company noted that approximately 62% of its manufactured homes were sold in Texas, with significant sales also occurring in Oklahoma and Georgia. The average revenue per unit sold increased by 23.1% to $69,400, attributed to a shift in sales mix towards higher-priced consumer sales rather than wholesale sales to mobile home parks.

Strategically, Legacy Housing has been focusing on expanding its market presence and enhancing its financing solutions. The company has acquired several properties for developing new manufactured housing communities, which it believes will provide attractive returns on investment. Additionally, the company has entered into a new credit agreement with Prosperity Bank, expanding its credit availability to support growth initiatives. As of March 31, 2025, Legacy Housing had approximately $3.4 million in cash, a significant increase from $1.1 million at the end of 2024, indicating improved liquidity.

Looking ahead, Legacy Housing anticipates challenges due to inflationary pressures affecting material and labor costs, which could impact gross margins. The company is actively exploring ways to mitigate these effects while ensuring it can meet future demand for its products. Management remains optimistic about the potential for growth through strategic investments in production capacity and the development of new housing communities, although it acknowledges the need to navigate current market conditions carefully.