LEGH - Earnings call 1 2021 | Legacy Housing Corporation

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Operator

Good morning, ladies and gentlemen, and welcome to the Legacy Housing Corporation First Quarter 2021 Earnings Conference call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Mr. Curt Hodgson, Executive Chairman of the Board.

You may begin.

Curtis Hodgson

folks. morning, Good joining for today. Thank our you call

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

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

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

increased severely of houses -- the improvement Legacy considering deliver event across our track quarter, the its than may Net Southeast million stronger year. and it This strong the last by ability Southern United build was first seem, over that $XX.X record February continued results. financial revenue quarter, States. This representing X.X% to to in delivering impacted a weather result was

year. The receive our operations ability we spite the XX.X% and line, to an actually to taken the SG&A experienced we disrupted decrease $XX.X company-wide. this, mitigate and entire spending. increased our In and for of $XX.X ever raw price access improvement were time was for for closed been operations has increases in and a quarter, strong including from impact our inflation cost from Texas-based materials bottom Our have production steep, deliver million the income last to which homes and of to million week, the first in

on a continue continue We footprint. Net was $X focus the onetime the year to impact for if settlement increase quarter year. SG&A the in last exclude last and million over to the income grow first will while XX.X% to of opportunities reduce we you margins our quarter of realized protect

first earnings per per event, onetime onetime for share a grew basis. quarter, the adjusted on book XXXX a this $X.XX per return event. Legacy a first settlement Excluding share the on rolling in XX.X% to quarter share XX.X% value increase XX-month the of over delivered

We are pleased with in our our shareholders. delivering our value both to and continued success to customers

have portfolio we which our success, market orders strides Overall, is GAAP-based to great outcome, creating made importance mobile our communities. developing and performance are in and demand, acreage for the our not strong. Of loan in reflected home future are

During another XXX in outside the area, San wastewater first acres permitting our the hold acquisition of XXX -- Bastrop and of we quarter, we finally, completed the we County. Austin for secured, acreage Antonio in

point, Tom. to serve see group estate a will by a and key come. our our to advantage populated Our success. At Legacy-built will over demand competitive and for reinforce peer to We our to the years continued strategic major real over be will as future for houses product turn call this this I

Thomas Kerkaert

Curt. you, Thank

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

leased our a to of shippable the backlog. fleet quarter, are the that commercial loan quarter $XXX.X to X.X% revenue revenue-generated to on grow reliable represents houses of million, source loan over $XXX.X the the for years revenue commercial amount while the come. Interest a retail of fair in X.X% a is to we by revenue back million and past of This quarter book bright ended portfolio XX.X% expanded XXXX. portfolio to XXXX. Compared from XX.X% a to the a portfolios spots allowances. loan the portfolios overcame for of and our $X.X increase challenges XX, interest and loan like first this Further, continues retail March Looking net million, growing portfolios increase the interest represents revenue combination, for from increased into operational with In increased and conduit the the over first year to of by amounted future. XXXX, a the quarter company's

operations had modest stated, previously first the from XXXX. of challenges As we improvement income the in we despite Curt quarter had during

to it ability key XXXX and the comments commodity back factor for to We in losses the along substantial was Curt top in detriment that, over costs, pass first expenses of to the we SG&A and the Also, savings result. this Our compared legal line reduce quarter loan quarter final achieving expense. to without was any saw ability inflation significant just reported. With to our vital turn good I'll questions. to warranty

Curtis Hodgson

questions have. open Okay. up all it to that We'll you now

Operator

B. Your Instructions] comes question from [Operator first Riley. Alex Rygiel with

Alexander Rygiel

questions Curt, quarter. of here. Nice couple a

XQ? company there from First, Or did catch February? fully the up severe is some revenue the cost carryover or in weather into

Curtis Hodgson

to impacted February $X in started probably line million. the weather maybe quantify maybe top even $X million, event the this I by but call,

line. It we yard shipping capacity one of get least the weeks in shipped was was over from couldn't carnage And week, then state factor. impacted to because a The incredible. carried that it point recover the that. the the was to the at for course, have and to even spell followed and similarly we don't quite and Texas, bottom our the shut down the it entire cold was worst damage that record So where

a it is normally sitting ending had if higher good inventory of inventory kind we this would the we impacts So And than finished revenue. yard, also in good finished have.

run damage even but capacity, would our was a that in as production some allowed only fully now probably And of levels. had plants at it's recently, Now we're of Fort I partial the one We plant at back at of now, that near that quarter, end Worth. the to us record say recovered.

then the What's lumber. recovered. production laminates. shortages challenges in causing And us steel. labor, materials. we're federal our an not that compete in have building the having think and normally I it's shortages, jobs lumber. It's the coming would the along materials, pool It's hour to with price It's we and have. glue. don't now we with increases across are labor, $XX just It's against for So It's board, door It's for resin. the applicant government just shortages

a at production, challenged also which point we're we're top still capacity line. view. plant of in from So in We're means not challenged producing

the to if staff getting people off, on working everything at out The and I staff. takes We But look line the but their to construction When beyond. you generally in it the give. them is production are, think forever a it's restaurant restaurants, building meal. a tails to for problem and in work I it's environment. And half not hard within of industry is could us, still to get only this a and go find they but we're full,

I your if it I throughout the entire think economy. but there's answers question, the So just hits problems I that don't highlights. know think capacity

Alexander Rygiel

Definitely.

increases, was cost versus inflation? the the versus price and line, of this what price how from relates you cost you labor year? And you look curve, at behind? last year material inflation price XQ increases do Are XQ it do to As think ahead your in your increase your lagging

Curtis Hodgson

up And keep I so lot that. with you time on even price a that can't it been that's so of question, and very a good fluctuation model. a and severe reflecting on computer spend has The rapid

we bands here. To to as and to increase have a lot So another what quantify we're X-point-something of flying in effect estimate of year-over-year the we price you, prices of is it we up in for it see next just XX% week. percent take today, charge, that,

of currently materials of as plus don't are combine same. about as and So of stories in I normal. But about we're or middle as up percentage It's being being we ratio XX% the anecdotal but keeping triple the if it, you have, prices. And of X, up our lumber our May, same those steel about course, XX%. the materials are on margins proprietary a I publish sales, up

corresponding X, the an staff hour having keep $XX even are administrative unless increases labor in paying people. or And were we you paying X. to or hard an We course, is $XX hour we're Of reward to financially. them

going So that see I it's on back I a and want this don't to expand down, of reset pricing little bit. a

will huge Some leaps of take in our competitors prices.

Our philosophy but steady is increases. gradual

that vendors with in house somebody price have honor but want So shock because if increase prices one spread was X% agreements we price we do don't neither over day yesterday's XX fixate don't sometimes can on with. a to we'll they and very so what each, increases XX% lag, not of our it often their produced. We don't day we

has pricing, we even based So and house an become came X out. today, a ago. industry it move it's today's if order standard able the ship to It kind now in of we're basically, when on months

able I think we'll gross margin. same the maintain to be

But fact, gross was prior -- at our quarter our very to margin you In mean, quarters. analytical. margin know this when you I our you're Alex, -- look if almost statement, I in identical

increase been in continue have do we're increases through our Not order price going I pass single are to far and adjustments. margin so our due price canceled is to -- so to -- And costs to be able or as that. able we one we think yet to as

Alexander Rygiel

think about volume over XX%. Volume next X was in sections quarter about sort down we And quarters? sold looks the lastly, should the home like how of first

we sold should of how Looking of growing into the second quarter, the how XQ volume think about in the about XXX that And throughout that sort think in XQ? then year? we of sections cadence should

Curtis Hodgson

question. excellent Another

here. some favorable up We have coming comparisons

almost year or the the So around all shutdowns some the outages quarter because even of of pandemic, and second full quarter first that. the under plants was country had last

also on at think industry, quarter, see third second in as basis a I and to going significant and year-over-year that's gains So an Legacy. true fairly the you're

comparisons, production in production year As we been to the production recently, but plants, our ago would our year-over-year as we've able because guess, increase also because to XX%, part up maybe in response pandemic. far least I in at XX%, at decreased a part

seized So companies. where because private last were from and at companies opportunity. buying branding a of we're went different number one we're view. now of that from from and those That were because only caveat, point units that's from didn't X we that their they we orders us And a ahead any of buying of backlogs, have product year,

down top we slightly produce from So on resale. for be buy what ourselves will line the and on what we up manufacturers outside

I net was real total if with gains So or a production better increase picking an in sales top comfortable result, line in feel and number, well. I XX% as

it second should well. be and be good good a would quarter a So as quarter probably third it

Alexander Rygiel

that clarify number. to Just second quarter

we Then number. So that XQ volume XX% be price in growth layering of that? a top should a is on

Curtis Hodgson

as Not and up from industry lack more be As of I think be price see year-over-year the price Georgia XX% XX%? or meant I'm far on I Texas per the of year-over-year, tempered as XX%, a the in us, just one by numbers QX increases I 'XX. our production unit. competitors on did buying a by probably of production, of QX we'll quantity whole, in up you're these per Indiana. Price-wise, unit solidly 'XX or say a XX% going average to up basis. our but bit the more sorry, versus increases XX%

this of point. more they in taking backlogs, some been think So and advantage might at I competitors of bold their up be our XX% have

Operator

the Capital. line [Operator from Instructions] Street Smith Your question next Mark from of comes Lake

Mark Smith

a looks but here maybe mix. from you're you First of price like from bit. was just standpoint a benefit is today? of during average homes up question got what Can of and the pricing you seeing up little for a selling big the on demand talk following kind about pretty me bit quarter, little It mix

Curtis Hodgson

by you it I can't I and it. because last have April's talking more up this were production year that has our looked looked than up numbers. at or double looked -- sales. I about, unit wides year measure that It that floor, the sections but an we I don't anomaly we're We by you're guys about like went just measure gone because at -- opinion recently selling

have sections up a percentage gone as more our Our than homes.

an incline ago. So relative I margins good bad. in a Typically, are they a to that's don't or but the double if know it's year are little that we're in having units bit better do single, than multisection in wides I significant. think

Mark Smith

as leads to far of is housing, manufactured in and specialty as demand moving out people the into many you're Okay. from And what now. your today? people seeing looking kind out for that affordable And of is your bit as what next are there far markets products question kind a your housing. right within you're at the suburbs? from demand But housing as locations seeing urban how crazy Obviously, market

Curtis Hodgson

on you a participant? are Kenny, as

Kenneth Shipley

Yes, I'm Curt. on it,

Curtis Hodgson

question, that handle and ahead please. Go

Kenneth Shipley

Mark. again. that sorry, I'm Ask

Mark Smith

Yes. that we're overall a you housing today. seen Kenny, just for more housing a the kind is little bit Have demand of a what the madness and you're increase seeing perspective seeing Or from market? in tempered? the it of manufactured little

Kenneth Shipley

own want there's and of a Yes. available. problem again. -- Austin, there's and acreage problem to because [ get are lot then not -- the it's Fort are move a still go dealers, of some from to customers those into a outside communities ] bigger They The in these and out go retail that's working guys. it's put they're them areas. But I'm Dallas, then is a ] for to mean place to trying put a smaller wanting I place that Worth, to hearing from especially because cities, San [ these Antonio, to cities home

So do problems. -- to because place I and in of put so. Yes, it's to of continue just out -- hard lot and the it's there, a them mean, sell it's -- to it's

Curtis Hodgson

that. Alex, Okay. up follow me on let

were see brand-new not I'm under home to small any subdivision a fly But of any airplane mobile Dallas after the state or size of hardly after entire would or subdivision you in into construction Texas. you mobile If of Austin, parks communities under home construction. aware subdivision

place to really too company's having by From don't our a in need have excited developments starting when to are get problem. our hard about this to So XX-month it's on we perspective, we already add work backlog. lagging on We put to early it development.

a own I developments slow selfish Texas. we now, don't years' we've own we some kind for right developments we production which the spaces supply have our that X,XXX for land of for supply know, couple eventually, is got of, walk So of -- reasons. But out --

put in can solving probably the so. So pull to internally to choose trigger this do anytime we're on that place problem and we

Mark Smith

to was local pace that Okay. And with you little than just the question bit on shutdown that move sounds was kind a hard you've permitting maybe having able before next it issues like -- slowed Are down those governments having more of and time of my working be government your a projects. development and forward. kind to

Curtis Hodgson

at the it be start even construction we're is -- to far maybe myself, slow riding I'm traditional gem time, extremely need to It's I of we're which time, we're city it's their maybe months. They're years and a has thinking production. we're and double compared things before you meeting time going from X the going we're permitting required in vaccines meetings plot, Bastrop I to the going ready for if can stuff, triple. But mean usually construction. approved back -- at getting is land. soon, it start than it's with which not and Bastrop Zoom things County, and one on and a meeting with not away piece But Hopefully, Tesla virtual it final thinking new I one in [ Yes. But to County, from start don't ] mean, been in you is And keep When is a for construction herd into the to the think plotting least X over stuff, and we you're real higher and normal. we the the too all mean, level offices. have them, one still week that even to going the away of will week all I get on facility. is. county it's much

in -- no should Major, X,XXX-plus project be location. started this we sites than It's I summer, company. Bastrop the would So say. County later construction major for one in

Mark Smith

of of the then just that is have rates of of And loans, and you're kind can about that how MHP to any charging for your trended Perfect. me has kind fixed kind talk if outlook. your mix on question your last gone in that you float,

Curtis Hodgson

prices revenue what nominally resets $XX than points Well, but what their with interest because the that competitive consumer, lower telling be -- from we're a What while telling on of But or at good if book the the interest got retroactively, we having make because rate that. To up know more the and before we've of to parks. If noticed, is And loans. know were -- down We're we're up go had I don't X.X% where is our more X that's which interest and rates at, of course, is times, communities, rates to year-over-year, back order we you because now, it X pretty was that interest analytical, we to business lowered we especially you million, whereas lower us ago, big higher get our charging to of on have in lot to any our interest X it's to a world's don't year impressively. was prepaid, you're in $XX do a and somebody competitive. higher probably nonperforming owes total our necessarily million to offer book. where point margins. to we're probably we're not we rates consumers, going part is be we X.X%. you with don't

our So keep ahead to the we books. just them loan go and on advise

X%, interest view rate we're the and their to as that's why daughter keeping understand the don't interest can But phenomenal I squeezed Fed to think years borrow pedal interest environment, long which be for they rate. my is going an as at from are. point of I XX rate the pretty on metal

high. But the And had have We're That's typically, home long of park loan party were lenders. chain and any X.X% X.X%, have to don't are our to because We a at that by in charge to even income they part are loans those X.X%, one. the first they you of and competing history mobile not rate on banks never a think, one fair with alternatives. plan. loans charge ability before they're a We other our with so big starting of that, hard -- loss that. We've prove in of the the so real money been then us pay now is that, company. competitors, title. well, back, the that's was those copycat competing the to when And they don't just

Mark Smith

these you've of a been As new reset fixed gone you to terms rate? some agreements of MHP kind more have -- loans? the Or still of on these some floating

Curtis Hodgson

the Yes. with MHP, X to we pushback ceiling. prime were some There on was that. floor plus

We're basically lock X gone that. rate in of we've we're then We because the higher now XX years So prices, financing interest and to years XX used the in years. doing MHP. those And X-year be out a for floating after total package.

"My we communities. to I selling your lower to a in more because still margins might Mobile net would be up Our been able increase time getting prices prices continue can't Park than They rent," faster rents. paying we're which lot and they'd to to increase from respond, the "Well, mobile to itself all Home say, value, they've able increase home in money." So rents you thought struggling. I'm gone rents, than But the parks up making have get go and to our are gosh. Buck and so complaints that I'm want their I

percentage-wise, from traditional increase retailers, and are probably increasing I picked demand this think independent support to would and year-over-year, independent is flat parks. from has happening retailers. Parks of the what so sales relative is such ratio this, as in is up the distribution, Kenny Now

I for doing question Our are the is first own the they lots what healthy is and of, your with supportive economy houses. think, really

houses their to are buying I hunting think live going or relatives cabins stuff backyard are in their to put people or second own in.

country So increasing, much smaller be years lot units increasing, even XX more in in to they the is lived of of people number is or households a of families ago. though living this alone particular, necessarily population or the than housing XX, not

even understand? in increase increase an we corresponding Do you So have in a without households population.

Mark Smith

Yes.

Operator

We Instructions] B. with have Rygiel from Riley. question Alex a [Operator follow-up

Alexander Rygiel

Curt, of out maybe future about have could you you there of sort the ballpark product of quantify rental market, income and the the talk amount the rented this opportunity? in annual

Curtis Hodgson

that we let be before advantage But taxes of I'm very interesting somebody GAAP tax either lease those going taking deferring all view, quantify we first the that a deferred are we Jeff point to a that. do But it I anomaly Tom from very tax. expensed it. it's of do CapEx or time of to requires that, and in accounting. If GAAP

be income GAAP means in of the you're does not tax we're that getting what point it our all seeing statement the there's GAAP that That leases we while not So mean? side go gets income a corresponding though from income expense real future, that even in in as showing benefit accounting. Well, of now, no having the the expense. view that these will on,

you So units. I a when Jeff, it's Tom, how these X, really got we there. do leasing X, X, there? X big we're how we've leased do plus know line the Or down many don't you out units have many years out know? X, know

Jeffrey Burt

Yes.

at generate lease the have revenue. $X.X just coming XXX And of we year, had additional on million the We XXX the of assuming on that would in rest the lease. no units, units on quarter, those end --

Curtis Hodgson

you Alex. There go,

Alexander Rygiel

what does revenue in line get item From that I've what seen, which the captured that's segment? --

Jeffrey Burt

other -- sales other yes, the in the income third the -- on that's or revenue? is category. line it -- other it's That Other in statement, other is

Operator

showing I'm to the company. would back no at Instructions] now questions the this time. conference turn I [Operator further like to

Curtis Hodgson

all there, least, thank are the great. say to turbulent Well, know attending. for but business that you the houses, out I we're is selling times

back Katrina and In days in seen this since the great fact, haven't 'XX. I Rita it

just trying can that publicize to have all The we And we we've problem only the as is ] get doing what producing to sold. is done. [ got industry So fine. we're

and all thanks you day, attending. good have Bye. a So for

Operator

participation, a Ladies and and gentlemen, your this for day. concludes you have Thank today's wonderful conference.

You may disconnect. all

Legacy Housing (LEGH) 12 May 212021 Q1 Earnings call transcript