LEGH - Earnings call 4 2020 | Legacy Housing Corporation

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Legacy Housing Corporation Fourth Quarter 2020 Earnings Call. [Operator Instructions] Please be advised, today's conference may be recorded. I'd now like to hand the conference over to your host today, Mr. Curt Hodgson. 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 our prepared risks in Before response additional your take 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 may Actual management's from differ results expectations. current company's to you and therefore, more report discussion of the refer risks and the And the Commission. uncertainties in Securities detailed a annual with filed we Exchange

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

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

We over focus a a to through quarter to combination in results increased continued a board over a SG&A have line. Net track industry-leading and net fourth quarter of the of the the controlling Net increase our directly quarter, $XX.X been the performance. impacted our [indiscernible] reducing of the from on our per operations able increase and maintain delivered quarter, fourth the prior and share experienced $XX.X The share over on the XXXX increase Legacy value impressive over improvement Income decrease per $X.XX income fourth the for prior income increase XX.X% the side system quarter million of for XX.X% our increases the benefit fourth million in year. in fourth production last million with quarter, to bottom last increase the XX.X% revenue tracked of to has costs, has was a year-over-year. Earnings in XX.X% the year. $XX.X revenue share the operations The financial and a the and year. Legacy from from representing margins per side. in both our an price good margins across improvement solid quarter costs well. shareholders strong fourth book XX% quarter. to this We in year. grew as in record of an delivering increased in SG&A quarter

facilities. At performance Production Looking XX% factory saw We remain about year, rebounded loan levels. quarter overall output in -- compared market pre-COVID the performance backlog to this to increase a loan has demand, in strong. the XXXX, portfolio orders, and now or back to fourth and turn third manufacturing dramatic weather rest quarter. Despite point, in our Texas on at the South, and all looking to production the of X February's we're of for the call over opportunities the event back increase to impact of I'll Tom. track this

Thomas Kerkaert

Curt. you, Thank

Following a sales regarding comments Curt's $XXX.X increase. for for increase total revenue, accounted revenue was XX% the up XXXX. Product $X.X revenue on of million over XXXX million,

we faced to able strong on into We commercial success demand how proud we story. translate parks the range XXXX. to from challenges increased compared and X% responded wide of back saw company Looking during sales the year, are a of that obstacles home and we by revenue overcame. Overall we're the to our XXXX, mobile to

development this the grew park for increase XX% company's the revenue. loan XX.X% million loan a portfolio a XXXX, future to which a the portfolios that XX.X% amounted mobile retail net retail for to $XX.X loan for and X.X% into interest XXXX. the XXXX Interest commercial portfolio million interest expanded to XXXX. Interest In XX.X% line story with revenue, portfolios. by portfolio nearly for our in expect growth home to $XXX.X year-over-year. In We growth The $XXX in revenue is the continue combination, the growing and the increased while book XXXX loan loan from revenue commercial a million, conduit in to by over from represents key increased of increase was allowances.

reduction. previously improvement costs, reduce warranty and grew in from losses XXXX. the detriment stated, share $XX.X income compared accounted to significant by Reductions We by the for loan Curt were XX.X% had to from As XXXX. during able million. expenses we line, and top operations of income service operations Without our to portfolio XX.X% our SG&A to costs in we expense lion's payroll-related

in compared the on assets company XXXX. XXXX asset in XX.X% return Finally, improved on utilization with to of a its XX.X%

in prior return equity to improved over compared back is of XX% for it and final turn turnover comments note by Curt Our our XXXX. With to to year. grew that, on questions. the XX.X% XX% that I'll Also inventory in

Curtis Hodgson

Thank you, Tom.

Now just any. there any we'll ask questions if for are

Operator

the [Operator Meyers of from Street Instructions] Our line Ryan comes first question with Capital. Lake

Ryan Meyers

come production one pre-COVID First here, levels. looks me -- back good like for to to see it

thinking how guys not next you and you're are in increasing wondering about year, this of demand of of you sort what far or kind guys XXXX environment kind year so next here of year? a Just what -- from are kind seeing production about thinking

Curtis Hodgson

Ryan. Sure,

is I think demand is is challenged Because with by measured that's asking. backlog. the the is question Demand everybody unsatisfied. production, that strong, industry that

We're up. United There's really by to not the the Would to that be we're XX% trying sure decrease in production get to went operating striving enough States, XXX if not? or and backlog say, do all plants we're or all up, production So XX%. that.

As been then line issue that people additional let's of kind the say, out for us, department very electrical -- fight X It's in we capacity well COVID, work with X of at doesn't and COVID plans point in assembly manpower from are physical have our as basically a view. an we a of format.

business, not all has of that a on lumber lot production but a of the the home demand effect steel increasing everything is giving the us backlog, been had through like So it's everything, feeling side, roof. from to mobile industries, to just challenging which the going

rate pessimistic they all It's like ago, is greater little the are birth not adding X the a say. not years great. were United that demand households The rate I'm we're than immigration States. more that in bit and While more

So never caused our backlogs these by more I'm it a against the problem. That usually said, up been than has March, is what backlog little skeptical better. And supply problems in the all a demand time we're we industries that call [indiscernible]. the true year, is this of

they per another in to floor of we which gives that. to October. I call -- about more mean, people what our we we're now than And September, So if And it dedicated priority I'd out half revenue. priority, a say is charge want production $X,XXX us about August,

for question? would along we that entire the as that your keep stomach, margins we're as long the So expect better-than-average plants up expect as would to XXX I all with in and increase better-than-average answer United way. Does margins having can I year, capacity States the to material the but endeavoring increases

Ryan Meyers

Yes, that kind Are That's what does. similar you of any did here a to that. then increases XXXX? kind helpful. in in follow-up And XXXX, to expecting of you price guys

Curtis Hodgson

month. one had another Every We've already one in X. effective January, February

if or we're them effective we another addition to We've customers, hour Every March in that they line, them pay X. some of even labor on there'll are one now price X. just we commodities more the buy come just Another buy, on commodity had many because And having work, people wage. April -- sure we be I'm get our $X the of to to to increases to an to work, give increases. their come one

$X if hour. get they to work another X they per So come consecutive days,

having this. well is reacting a as labor. This So the remember in like it a there's remember when of to in if we're Rita, had haven't shortage days anybody. time. including I'm everything, as long Katrina was shortages 'XX, that to we And back environment you long,

large have inventories probably of in industry. the the largest We raw materials,

almost we X-month So a weather our component. on suppliers even X- from can every delay or

We don't competitors truckload. have. year. by don't have times. numbers you'll that's warehouses the have in We some buy any buy our through container. problem that I us buy think challenging this the what's And by we quantity. got with And rather We our

Ryan Meyers

headwinds give update not out if helpful here? how many an us been Can to performing the on that's any that's retail That's people so And going improving good have stores or been with and of you kind been there's far? if as hear.

Kenneth Shipley

some systems just new so challenge guys and controls where where putting manage we're been can key -- bit Shipley. up with and couple this work these struggled mean, I and real better, can question, you we me going. we This year. Kenny these story we want is get the still the to. And if and over been a stores. have that can I've Curt, doing take stores. we've what that didn't added I little of if place we -- been a in see we we're can it's And a we've people, so some

Curtis Hodgson

permit we on Ryan, development. complement things development that's now treatment last to the that X sites side. Texas. from X,XXX very fantastic miles To We're the question, in outside put regulator us of allow acres will Tesla from here a targeted up We new about own get week got difficult to water Austin, Texas the X,XXX home that for to progressing are facility over

in plattered -- in several or plattered Texas. are We markets preliminary

development ground X I least since progress or is last maybe concerned, shortly we've expect breaking the at far as as we'll in think so... call. So of be a I lot earnings would X made sites,

Operator

with Rygiel comes B. Riley. question next Our Alex from

Alexander Rygiel

can Curt, development talk gentlemen. XXXX Nice capital XXXX? you to regards some needs continue last and about these answer, of that To with of properties in quarter, on

Curtis Hodgson

that's right on -- which and small, or million X we a have is and line $XX rather plus LIBOR Well, our line. now, million $XX

And capital per cheap. of cost in or year. the flowing is So $XX addition, cash million rather million we're $XX

increase longer any takes until we a lot worth capital I our are of in we or industry don't it know these it capacity we that internally that And lot million thing in grow demand could I telling any my dramatically if assured on eye particular targets. supply. comments, up we it capital a mean in So goes prefer or we Getting just demand. even that that retail, it. We the away. and a I'm for add that think for I us. will organically, appear to behind $XX be I to of us needs is, decision massive. to wouldn't just And our the with is has -- company that, does have for get the we the then demand absorb we a COVID an not or is there's we think us. level, have been without have don't raise. sure would increased at competitors people have have good part is people to looking We said, early that deposits. be another having have have this ago, challenging we that's it that us I They alternatives really no know to used issue. have based of want them. cash backlog, unusual our get increase one same I combine raise, like capital But market we're after need industry increased There's how year on if no months and necessarily X keep or same going thing to I'm means And It backlogs, on. a Backlog, any At deposits But of out XX million you'd backlog year-over-year. our is of that. At $XX have to if said have really But actual asked. retail -- doesn't which same token, people that right on just we acquisition backlog? And can.

our backlog pretty solid. is So

Alexander Rygiel

energy what Can bit in also little a Kenny. of the talk sort be then the regards business you're with been interest for seeing And how as a your the about a long and rebound you economy, rates And Texas migrant the and then time impact Curt, that in you've the how secondly, workforce could business? to rising address so market tailwind?

Curtis Hodgson

to interest when buy don't up. mean, things be they borrows when go or the And of just positive house. housing on manufactured The up interest substantially that. appear Right sales you our rates now, manufactured XX% level to housing, sales interest we at rates. brought their the for buy Almost rates at home housing company. retail, in this are everybody their regular the all of when they go related money up is retial financed instance, I when sell cost

is dramatically which remains per So wide a per month whereas what the our cost at single same, home, tick $XXX conventional with can a up housing kind go of just X%. of is, up

few be you that's years, in our could living we'd were -- X%, deal years And Federal X the payments XX-year low. for we've the taking don't and really with that And last you though a rates to government all had interest and be even borrow the interest below even extreme, If houses the used. with XX even competition houses have months are down for anymore. economic if they that's should X,XXX for multimillion-dollar that rates mansions essentially because life so for

been that our benefit. that, customers we're but subsidizing site-built that which, for $XXX-some per means in sell is the advantage time But that are $XXX,XXX in for We're very rate our It's around pretty building, these by these effectively those put the these of that's I buy the can get rates. FHA people points And properties a our We and mean, of using those So market. to mobile month, many them designed that were to home in financing, take the properties intend incredible. competition. fighting low which interest is subdivisions, products, X% loan. this it. on you less you will paper actually environment interest than

So Alex? relevant, got I when off I can't on did very asked ask, what else interest What you tangent. are really else because you and remember my rates

Alexander Rygiel

the tailwinds. economy, the in rebound energy and as the workforce complex Texas The migrant

Curtis Hodgson

Yes.

affordable I on think there's D.C. positive is Washington, huge right so The housing now. in for many tailwinds a going across-the-board. change

to that of purchase to credit, to was was Biden's of refundable I a and home a with One $XX,XXX President subsidize platform the expect come tax that he going pass.

orders have. the to track better couple past that anything barrel. margin Texas, a the and are last on business we're housing of our in And hadn't some probably to man than getting isn't for camp for do years. gotten relative we we $XX X going the And camp best back is addition, fracking, which of man housing, our to is particularly, type oil There relationship because well and type that. Mexico at In now we for business

this I on mean seen run cross wasn't an a COVID factories. And part production was, enough competing paying it for haven't for times the hit, change pay is be for year. people nothing makes conference run hitting just to people I government I against extremely them hard have to week XX predicting think to given. the down just it of run years a the industry good and of was. much these we're fingers line. We cover people we're it would when part that our the stay the a hope had demand. work. The call to so U.S. general electrical factories. utility home, it We example to that hard. I've mean $X,XXX it, don't I at which that. So we higher assembly all thickness my I get couldn't that We But come department, whole an to to just It's couldn't cylinders. than will now. happen as I But in

were Fort which Worth, is well than We've X a anything. same to we X or up. Commerce we're increase get is any when that of without we're -- without staffed normally pretty It a normal much back materials, at a is day high. through or that production. out able weather and staffing all-time or of we Georgia capacity. now. could problems be X problem an to X X shortage day, struggling to We're In higher build was going actually a production. X So doing day, to any just facility pretty

where production still we still So our in basis, their brand able buy X We facilities. private out I or have to us. Midwest out expect on relationships for X we'll be the of and a product producing more they're of eke would that some

And top our keep think and I should able going be up be significantly. So if we year-over-year fine. line just year. to we will It for roll is to these this can be margins, fairly rock

Operator

queue no conference conclude at showing -- for We're to today's time. questions you like in participating. call. Thank will I'd this further Instructions] [Operator turn this

You may now disconnect.

Legacy Housing (LEGH) 18 Mar 212020 Q4 Earnings call transcript