Legacy Housing Corp ((LEGH)) has held its Q3 earnings call. Read on for the main highlights of the call.
Meet Your ETF AI Analyst
- Discover how TipRanks' ETF AI Analyst can help you make smarter investment decisions
- Explore ETFs TipRanks' users love and see what insights the ETF AI Analyst reveals about the ones you follow.
Legacy Housing Corp’s recent earnings call presented a mixed sentiment, reflecting both positive developments and significant challenges. On the upside, the company reported increased net revenue per unit, growth in its consumer loan portfolio, a strong cash position, and a successful annual show. Additionally, there was a positive outlook for the Texas market and an increase in book value per share. However, these positives were tempered by a decline in home sales, decreased other revenue, increased costs, and a decrease in net income. The company also faces challenges in the Southeast market and has seen a rise in SG&A expenses, leading to an overall neutral sentiment.
Increased Net Revenue Per Unit
Legacy Housing Corp reported an 8% increase in net revenue per unit, rising from $63,500 to $68,500 year-over-year. This growth indicates a positive shift in the company’s pricing strategy or product mix, contributing to its revenue stream despite other challenges.
Growth in Consumer Loan Portfolio
The consumer loan portfolio saw a substantial increase of $21.4 million, marking a 12.8% growth over the past year. This expansion highlights the company’s successful efforts in expanding its financial services, providing a stable income source amid fluctuating product sales.
Strong Cash Position
Legacy Housing ended the third quarter of 2025 with $13.6 million in cash and secured a new revolving credit facility with a $15 million capacity and a $25 million accordion feature. This strong cash position underscores the company’s financial resilience and ability to invest in future growth opportunities.
Successful Annual Show
The company’s annual show in Fort Worth was notably successful, generating orders that ensure higher production rates for the fourth quarter and into the first quarter of 2026. This event’s success is a testament to the company’s strong market presence and customer engagement.
Positive Outlook for Texas Market
The Texas market is expected to experience growth due to the housing needs of data centers, projecting a robust business outlook for the next one to two years. This positive forecast is a promising sign for Legacy Housing’s regional operations.
Book Value Per Share Increase
Legacy Housing’s book value per basic share outstanding increased to $21.85, up by $1.90 from the same period in 2024. This increase reflects the company’s ability to enhance shareholder value despite facing operational challenges.
Decline in Home Sales
Home sales decreased by $1.4 million or 4.8% during the third quarter compared to the same period last year. This decline highlights the challenges the company faces in maintaining its sales momentum in a competitive market.
Decrease in Other Revenue
Other revenue saw a significant decrease of $3 million or 79% for the third quarter of 2025 compared to the third quarter of 2024. This drop was primarily due to a major land sale in the prior year, indicating a one-time revenue event that was not repeated.
Increased Cost of Product Sales
The cost of product sales increased by $1.6 million or 7.5% during the third quarter compared to the same period in 2024. Rising raw material costs and tariffs were major contributors to this increase, impacting the company’s product gross margin.
Decrease in Net Income
Net income decreased by $7.2 million or 45.3% to $8.6 million compared to $15.8 million in the third quarter of 2024. This significant decline underscores the financial pressures facing the company, despite other areas of growth.
Challenges in the Southeast Market
The company expressed concerns about the Southeast market, citing a lack of demand from community models and disaster relief housing as key challenges. This regional difficulty highlights the need for strategic adjustments to capture market opportunities.
Increased Selling, General, and Administrative Expenses
SG&A expenses increased by $1.3 million or 20.6% for the third quarter compared to the previous year. This rise in expenses reflects the company’s ongoing investments in operations and strategic initiatives.
Forward-Looking Guidance
During the earnings call, Legacy Housing Corp provided forward-looking guidance, noting a decline in home sales by $1.4 million or 4.8% compared to the previous year, while direct sales and company-owned outlet revenues increased. Net revenue per unit rose by 8%, and consumer loan interest income increased by 5.4% to $10.9 million. Despite a significant decrease in other revenue and a 45.3% drop in net income, the company highlighted its strong cash position and strategic initiatives, including the AmeriCasa acquisition aimed at enhancing retail sales.
In summary, Legacy Housing Corp’s earnings call painted a picture of a company navigating both opportunities and challenges. While there are positive developments such as increased net revenue per unit and a strong cash position, the company must address declining home sales and rising costs. The overall sentiment remains neutral, with a focus on strategic initiatives and regional market opportunities.