LEGH - Earnings call 3 2020 | Legacy Housing Corporation

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Legacy Housing Corporation Third Quarter 2020 Earnings Call. [Operator Instructions] Please be advised that today's call may be recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Curt Hodgson, Executive Chairman of the Board. Please go ahead.

Curtis Hodgson

Thank you for joining the call today.

may I contain listeners subject questions. forward-looking and and may remarks management's to begin, statements uncertainties, will forward-looking today statements, management we remind to that the prepared risks in Before response additional your make which are the Act of safe of forward-looking the XXXX. harbor the Private protection contained that is in claims Securities company for Therefore, the statements Litigation Reform risks we and may Commission. Actual in Securities discussion management's refer therefore, you from and detailed the to differ annual results of company's expectations, the uncertainties the with report more a current filed Exchange and

In required to call. represents Legacy any applicable by the update company's today's management's no assumes future in obligation to law. addition, performance projections as Housing these of otherwise estimates unless as projections the future

our Thomas turn performance detail. in discuss then turn more Now to quarter additional updates. our of to Kerkaert, Officer, over discussion a Chief I third corporate me Financial to the will provide and financials let the call

we're million in the third Overall, XX-month have revenue million $XX.X of a compared XXXX quarter XXXX. to quarter million $XX On increased quarter revenue to increased we of pleased by trailing results. the third or $XX.X third Net X.X%. basis, the in net with

solid have the quarter. income We experienced improvement from also our in operations for

to quarter year, expanding quarter this income the XX.X%. from the income XX.X% up increased per share last for Net in was year well, for from third $XX.X operations the million $X.X from Third share $X.XX quarter XXXX Earnings increased was year. per share million compared last to last $X.X of as year. per $X.XX million

$X.X months, XX.X%. Net at or Looking million trailing income is XX up the

$XX.XX $X.XX or has $X.XX the share a book last months in also third now XX%. as share, XX of share the of quarter per the to last grown continuously over share increased in value year, per We quarter third this have per from year per tangible it increase

strong performing XXXX, million current on is loan of orders $XX.X Interest loan is and good, are portfolios from XX-month next contribute overall over market line. demand remains the remainder revenue portfolio good, year the grow. rate at interest will to run backlog revenue our well. At and book good, Looking the our loan to top is continues the portfolio

are manufacturing from We the production dealing with fallout especially COVID, it effectively as impacts levels. and

We have address prices and cost production market labor in lumber additional increase the quarter. to to brought on increases during the raise third

meet Dow [ and as subcontracted up Production to midwest manufacturing the have also current to We demand north constraints. ] adapts

commentary will to our that, CFO, over now Kerkaert, turn to provide With quarter. I Tom it additional on the

Thomas Kerkaert

you, Curt. million Total the to third Thank $XX.X million compared for $XX.X product were in XXXX. quarter period the same for sales

quarters, in in product of As last third $XX.X for recent same coming to the product the quarter largest of product for manufactured million has been sales sales the sales total the million our year. part for XX.X% total period is of sales That quarter. compared to $XX.X parks home XX.X% case the at is

quarter of the net $X.X for compared of to represented revenue QX of a million Total revenue for million revenue net has grow continued revenue of XXXX. component XX.X% revenue. of Interest $X.X XX.X% interest or third as net to overall XXXX

consumer the of interest loan notes increased XX% XXXX. revenue In over was for XXXX revenue third from for home quarter the up year-over-year. from particular, flat of our compared the last was manufactured year. million $X.X Overall, Interest the quarter from portfolio interest roughly quarter park third $X.X the XX.X% revenue in to to million

loan by million million the park manufactured XXXX Year-over-year, the portfolio second for X.X% compared loan the $X.X home loan home or Similarly, $XXX.X quarter by to XXXX. quarter manufactured park million portfolio the increased $XXX.X for increased of third to consumer million for the X.X% increased of XXXX. million discounts, $XX from $XXX.X by The allowances to for second portfolio September XXXX. of other loss to end compared loan XX% at and million, quarter the inclusive $XXX.X of

Gross cost the quarter XX.X%, our up efforts XXXX, was situation. was increases third margin XX.X% margin kept XXXX, XX.X% pricing from in of suggesting of the which on that XXXX. for XX.X% of Product global increases from quarter with cost in is mitigation from realized the product third pace unavoidable disruption down sales and gross have health cost year-to-date and the

to expense has health the disruptions seen This in supply has most origins SG&A XXXX. in its which XXXX. impacted and The for the The salaries benefits, broad-based half reductions of the million, decrease across realized our the in quarter and XX% a $X.X year-over-year decline included company expense. third quarter significant changes which SG&A delivery board chain, our $X.X and the dramatically in were of is the and cost third the first us of from savings warranty of XXXX costs. million was

compared notes very the the our year trying to of Additionally, very as has in loan otherwise our favorable were held receivables XXXX prior quality these quarter times. third up well losses

to the basis measures through COVID-XX or of the may into what end continuing operational in These implemented other a the QX, Our sorry, additional pandemic needed start $X.X have measures reductions as savings the arise. -- are million go-forward resulted of be and on we're from evaluate operational in situations third about continuing quarter.

XXXX measures. $XX.X same increase we XX% cost to which ending months I the net to net in increased believe year. increased X.X%. this compared revenue is million for last for of period income September a while achieved the our income million X containment highlights $XX This has net the efficiency Finally,

quarter, fourth report. will the the is possibly than it good completes a to similar to and to we believe that our that reported. ahead better deliver we going just and outcome, financial we be is strong, which quarter quarter Curt, fourth think the Looking

Curtis Hodgson

Tom. you, Thank

industry As start we're quarter We and mentioned strong. fundamentals the at business the call, year-to-date remain I long-term financials. believe with the the and third pleased of the of the

to inventory this enhance improve of to in returns the I configuring and of These positive flexibility disciplined business and expect. reduce to kind to early shareholders impact and that remain rest proactive the will our this outperform our the come operational and the year, been the have remainder SG&A we of and to confront value our position for of We deliver actions year. continue I when COVID. look

this we'll take may At point, any questions you have.

Operator

the [Operator Alex Rygiel Instructions] comes Our first question with line from Riley. of B.

Alexander Rygiel

demand season quarter? Curt, you've hurricane coming third active seen the it a in quarters? over fairly the that impact how did year. demand this impact Or could How

Curtis Hodgson

good a that's question. Well,

robust because the production we're in capability isn't right Louisiana by Our and increase production our is in even increase going real to limited that now. business hit demand is hurricanes from particularly so challenge demand that an really

had we after the the the It's because lumber. COVID, so government shelled part quarter. not the for -- that guess, the levels in and to been replace benefits X pre-COVID I hoped Labor the story But was to of to unemployment that -- out. back Ls get labor third weren't easy of third as we were in able as quarter, production

entire we're Now in back XX-, the to said, kind added across production. at XX-week pre-COVID in But of we're were we XX-, where backlogs December, that we're industry. even looking

really demand that's the sure So satisfying problem [ ]. much as I'm put already in is the as demand not

I We had. order point Texas from we live shows. October they had and the view ever Georgia. And think most successful in in of that did and an don't them September were our had other We manufacturers that. shows

that's a on have insurance as he And Charles, did re-upping one with Lake we he customer us soon his So receiving huge closed settlement. as Louisiana, settlement. the in He's orders plans gets now.

your It coming will up. Alex. order question, that have book Charles, So from be I an I units, hundred Louisiana Lake we'll like. that assume answered it looks hope several

Alexander Rygiel

It the that does. sort of quarter? into third follow some quarter. Has raising And had continued With the that obviously high, fourth in up on answer. so some you in pricing demand response positive to of

Curtis Hodgson

The was the increase the of announced we XX, August in effective up. September. last had price lumber early of kind It run at peak was

haven't increase and out, had price then, the kind anticipated the rest with the since industry. up the parabolic increases a in curve it We and We way a of of lumber along price would peter series eventually the of but did. on summertime, had we

So increase as did, of prices don't have intend competitors some to as we our we any and decreases. didn't much our price

literally into the of tripled price into Ls, never intend rest almost next to labor prices in entirely for even you through year. incredible. But Lumber be those X period of to I year we fast and our like just enough to reflect because we prices year to couldn't able the to put lumber, just of lumber. a raise days, think before. maybe price the seen the and can't XX% effect and in it increases costs. due been and range, our XX about anything was It I've XX% current have overall, the increases hold

similar quarter. fourth say, challenge tad margins a just look we the to third I had, margins the were the margins probably in second the improved quarter. Our in for quarter, in

Alexander Rygiel

you little question, community can And give a your an update development last activities? on bit us of

Curtis Hodgson

Sure. the but work-from-home environment impossible and approvals. which Zoom last into all projects, at we're that Del property. speed normal San had I -- or when say we're for meetings, delays public goes believe treatment I place South a approvals regulatory XX% and have made We we get. some run say operating to We've then or matter in on won't our is Antonio our government mud, project you're it some of we're This step have of permit in in XX% biggest Valle, our Worth almost has just Fort would into we're developing. -- wastewater we've did the of not, our stuck

home can't So not nationwide. function all COVID when mobile my to has in-person meetings. have community People guess really just but impacted in they not at able development, probably development, is are development

Operator

Capital. Mark the comes Smith next Lake Our Street line question from with of

Mark Smith

increases? at First how question Curt, give of any you for into was much just mix me versus is the selling can insight price looking us price, that average

Curtis Hodgson

Yes.

the high probably single and average XX% is communities houses. a big than I think the down fill in right being you they and price part country. higher of seen to number ratios as unusually selling wides, XX% if to house wides, a of unit an wides. as of of has to had house, around doubles probably unusually mix multi-section our decrease such, industry singles XX% And that we've And of XX% single in look few a up as historically is the is the because singles now, we're our company. ago double a history This relative of years percentage at closer

than On a sell wides generally double basis, single more wides. section for per

increases over answers So -- your right our XX around up level period question, mostly wholesale $XX,XXX months around now That's That's due that that last $XX,XXX price to hope each. the from, Mark. each, say, of are in section prices the at time.

Mark Smith

for there lumber? commodities Yes, absolutely. then And or to feel kind about pressure you then where some any see looking some at what other And seen can out you've more or talk starting seeing lumber, maybe pressure you're you're of where you relief? like today

Curtis Hodgson

in and it a relief much lumber and was, in roof peaked last is Lumber about has decking number, X/X. This gone like and recently, dimensional say, not even siding things has month The since fallen And up has panels XX% Sure. months. up like seen September about floor decking just the where ago. X XxXs. a and firmed dimensional from

graph, at Looking on to much dimensional doesn't side. be the lumber the seem it moving

OSB other, softening. I softening. They -- we'll follows I would some the the some On and the think see we'll one see side, panel guess and usually, usually

believes. as but demand produce as I with, retail If above above I months. housing demand, work see housing to strong housing demand X was be in supply a we'll demand. next not both issues we extraordinary. XX have probably not manufactured for that, really their a through, that the the able will level. but We the And retail be be these there retail single-family demand. own not to as I within lots. would And What it soon would demand have able and between somewhat average to would think strong press average, would to way general, we I balance call retail extraordinary The production at it as guess is and extraordinary up the call failure keep but

Mark Smith

a about talk my about how next your that's good XX you're -- got And Can Okay. feeling segue question. the Retail stores performance into that has stores. been your you how today? you've and

Curtis Hodgson

he get partner, online. but line? in West -- Kenny, usually get that Texas can Kenny, that the out to aspect, you on you handles My was issues get did

up as X -- actually opened like still Tulsa, level. world and far for they up We've retail or same opened as way in Our a we retail us. to as stores about segment are contributor months the the challenge Mobile, of X a months to like a as at in We're X have. were guess I not number closed retail around of operation that they're a units been to manage I not our real in store selling. ago not store the X in fire year how We're Oklahoma. retail Alabama. on our put We contributor a we And that's top the learning multi-lot line. wouldn't earnings much last

Mark Smith

last for And one me. Okay. then

we'll at cuts there Looking you guys feel Do at the into level? creep sustainable see some Or that SG&A back SG&A? likely management like there. have things and you're are that done you some a

Curtis Hodgson

it of SG&A. Well, kind measure you how depends on

basis, SG&A. on I increases a it measure we in you gross If slight expect see will

back it place, of the put bit endured a of other half rollback salary year. back the in little put place probably probably gradually by people in the back with Our that probably put, already end half COVID place, of in we'll

to SG&A for for basis. of and and expenses these maybe, we'll a think price addition have sales other even we well, I I including effects And think basis, little would to All increases SG&A, on deserved stick to say, utilities, and that, see that should pretty control, expenses, of increase flat I raises In lot guess, would warranty a a I we a are say. and on gross rent behave count still bit bonuses, of people in down. let's as percentage

Operator

Sansone next line Instructions] Chris comes Advisors. [Operator the Sansone Our question from of with

Christopher Sansone

If On basis, much value how a a you had if year? had same from up don't number quarter. you? dollar backlog. front in I the is last that regarding to your the you question have estimate time Great of

Curtis Hodgson

testing don't really our put we're it because the keep see -- people Well, the a They like build to They're In specs, and placeholder they will who times orders really doesn't a real. they're us, that deposit. if carry with most name track of much now I want. in we changing corresponding delaying that basically aren't order or changing customer's in don't good the it won't. backlog who manufacturer,

orders they're don't genuine. that I placing think all among So that multiple are manufacturers

at where a sales normally the case you that make to That in such months, This time it now. to the November middle said, months. order That's to year. is of backlog and have the start through the you tough of small this forth kind we're the have have so winter not

not. allocation. We XX this try solidly X of to I year, figure we're we're there, I to are build which would and sitting weeks people ones on we're the weeks to to out putting X normally, out. going And which out. ones XX And say we're time

Christopher Sansone

remarkable. That's

much of in it that a is sales you how were consumer how housing, manufactured when or of much displaced COVID? preferences? And you that, as at So preference change do look is for from result a postponed change a in of think potentially it consumer

Curtis Hodgson

change years been in have that most we basically significant in said, flat preferences. take That industry an may in going manufacturing. they're measure The that in favor you But preferences were that disease is department. of last entire about the little year when realistic in have supply. a to of relative catalyzed XX an We're for for say we this increase supply be line The or ago. in that. assembly a have live trade It's to from organizations demand on can may not a we lack is production we're where Well, so. or and about run hard shift our of reporting the a Historically, seen have bit choices I a that. need change seeing think where to people's COVID to not

of your lost assembly line due So to suffers. if rest COVID, all of electricians you the the

absent sitting not. there, our to normally or a So and we're X disease battling who's And X produce randomly. that doing it's and affecting day a on Plants ability depending who's a X are that could strikes day X produce.

due Our absenteeism to is levels, virus. at record mostly the

Now between as imbalance say, back supply as the back will as earlier, increases, to per we'll say get units year. producing, gets and capacity that think demand I to And would normal, evaporate, that and industry capacity the absenteeism will and said be I let's I back. subsides XXX,XXX

people's lightly at they're many producing, anything, And they're significant units drill it's not look not if them, financials, ours you how of -- down. a -- If assembly run including and lack of just in they're it's because with absenteeism. you can't demand, line an

Operator

to time. call this closing at questions further the remarks. no back turn for now are There will management I

Curtis Hodgson

be we'll will for you the few months. our on Talk I our a best return you Bye. Thank equity to to in and joining deliver We appreciate think in peer the today. call group. really shareholders, that continue

Operator

Ladies and call. today's your thank concludes conference participation. We gentlemen, for this you

disconnect. You may now

Legacy Housing (LEGH) 17 Nov 202020 Q3 Earnings call transcript