Legacy Housing Corporation
11/07/2025 | Press release | Distributed by Public on 11/07/2025 16:01
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion should be read in conjunction with the financial statements and accompanying notes and the information contained in other sections of this Form 10-Q. It contains forward looking statements that involve risks and uncertainties, and is based on the beliefs of our management, as well as assumptions made by, and information currently available to, our management. Our actual results could differ materially from those anticipated by our management in these forward looking statements as a result of various factors, including those discussed in this Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2024, particularly under the heading "Risk Factors." Dollar amounts are in thousands unless otherwise noted.
Overview
We build, sell and finance manufactured homes and "tiny houses" that are distributed through a network of independent retailers and company-owned stores and are sold directly to manufactured housing communities. We are one of the largest producers of manufactured homes in the United States. With current operations focused primarily in the southern United States, we offer our customers an array of quality homes ranging in size from approximately 395 to 2,667 square feet consisting of 1 to 5 bedrooms, with 1 to 31/2 bathrooms. Our homes range in price, at retail, from approximately $33 to $180. For the three months ended September 30, 2025 and 2024 we sold 420 and 475 home sections (which are entire homes or single floors that are combined to create complete homes), respectively. For the nine months ended September 30, 2025 and 2024 we sold 1,334 and 1,536 home sections respectively.
The Company has one reportable segment. All of our activities are interrelated, and each activity is dependent and assessed based on how each of the activities of the Company supports the others. For example, the sale of manufactured homes includes coordinating or providing transportation for dealers. We also provide financing options for customers to facilitate home sales. Accordingly, all significant operating and strategic decisions by the chief operating decision maker, the Chief Executive Officer, are based upon analyses of our company as one operating segment.
We believe our company is one of the most vertically integrated in the manufactured housing industry, allowing us to offer a complete solution for our customers. We manufacture custom-made homes using quality materials, distribute those homes through our expansive network of independent retailers and company-owned distribution locations and provide tailored financing solutions for our customers. Our homes are constructed in the United States at our three manufacturing facilities in accordance with the construction and safety standards of the U.S. Department of Housing and Urban Development ("HUD"). Our factories employ high-volume production techniques that allow us to produce up to, on average, approximately 70 home sections, or 60 fully-completed homes depending on product mix, in total per week. We use quality materials and operate our own component manufacturing facilities for many of the items used in the construction of our homes. Each home can be configured according to a variety of floor plans and equipped with features such as fireplaces, central air conditioning and state-of-the-art kitchens.
Our homes are marketed under our premier "Legacy" brand name and currently are sold primarily across 15 states through a large network of independent retail locations, 13 company-owned retail locations and through direct sales to owners of manufactured home communities. Our 13 company-owned retail locations, including 12 Heritage Housing stores and one Tiny House Outlet stores exclusively sell our homes.
For the nine months ended September 30, 2025, approximately 56% of our manufactured homes were sold in Texas, followed by 8% in Georgia, 7% in Oklahoma, 5% in Tennessee, 4% in Florida, and 3% in Louisiana. For the nine months ended September 30, 2024, approximately 48% of our manufactured homes were sold in Texas, followed by 9% in North Carolina, 9% in Georgia, 8% in Oklahoma, 3% in Michigan, and 3% in Florida.
We offer three types of financing solutions to our customers. We provide inventory financing for our independent retailers who purchase homes from us and then sell them to consumers. We provide consumer financing for our products which are sold to end-users through both independent and company-owned retail locations. We also provide financing solutions to manufactured housing community owners that buy our products for use in their manufactured housing communities. Our ability to offer competitive financing options at our retail locations provides us with several competitive advantages and allows us to capture sales which may not have otherwise occurred without our ability to offer consumer financing.
Factors Affecting Our Performance
We believe that the growth of our business and our future success depend on various opportunities, challenges, trends and other factors, including the following:
| ● | We have acquired several properties in our market area for the purpose of developing manufactured housing communities and subdivisions. As of September 30, 2025, these properties include the following (dollars in thousands): |
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Location |
Description |
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Date of Acquisition |
Land |
Improvements |
Total |
|||||||
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Bastrop County, Texas |
368 Acres |
April 2018 |
|
$ |
4,215 |
|
$ |
21,714 |
|
$ |
25,929 |
||
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Bexar County, Texas |
69 Acres |
November 2018 |
|
842 |
|
138 |
|
980 |
|||||
|
Horseshoe Bay, Texas |
|
39 Acres |
Various 2018-2019 |
|
1,212 |
|
2,322 |
|
3,534 |
||||
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Johnson County, Texas |
|
91.5 Acres |
July 2019 |
|
449 |
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- |
|
449 |
||||
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Venus, Texas |
|
50 Acres |
August 2019 |
|
422 |
|
52 |
|
474 |
||||
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Wise County, Texas |
|
81.5 Acres |
|
September 2020 |
|
|
889 |
|
|
0 |
|
|
889 |
|
Bexar County, Texas |
|
233 Acres |
|
February 2021 |
|
|
1,550 |
|
|
556 |
|
|
2,106 |
|
Richland, Mississippi (1) |
|
22 Acres |
|
February 2024 |
|
|
1,141 |
|
|
148 |
|
|
1,289 |
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Bonham, Texas |
|
124.71 Acres |
|
December 2024 & Sept 2025 |
|
|
1,826 |
|
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- |
|
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1,826 |
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Balch Springs, Texas |
|
15 Acres |
|
December 2024 & July 2025 |
|
|
1,567 |
|
|
- |
|
|
1,567 |
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Austin, Texas (Travis County) |
|
1.52 Acres |
|
June 2025 |
|
|
2,077 |
|
|
60 |
|
|
2,137 |
|
|
|
|
|
|
|
$ |
16,190 |
|
$ |
24,990 |
|
$ |
41,180 |
| (1) | Land and improvement values do not include the value of Company owned homes located in this community. |
| ● | We also may provide financing solutions to certain manufactured housing community-owner customers in a manner that includes developing new sites for products in or near urban locations where there is a shortage of sites to place our products. These solutions are structured to give us an attractive return on investment when coupled with the gross margin we expect to make on products specifically targeted for sale to these new manufactured housing communities. |
| ● | Inflation rates have been high in the U.S. Our ability to maintain gross margins can be adversely impacted by sudden increases in specific costs, such as increases in material and labor. In addition, measures used to combat inflation, such as increases in interest rates, could also have an impact on the ability of home buyers to obtain affordable financing. We continue to explore opportunities to minimize the impact of inflation on our future profitability. |
| ● | During the quarter, the Company experienced higher input costs attributable in part to increased tariffs on goods imported from China. Certain materials and components used in the manufacture of our homes, including electrical fixtures, hardware, and other finished products, are sourced either directly from China or through domestic suppliers affected by these tariffs. The resulting cost increases have placed pressure on our gross margins and may continue to do so if tariff levels remain elevated or expand to additional product categories. While management is taking steps to mitigate these effects through supplier diversification and selective price adjustments, the full impact of the current tariff environment remains uncertain and could affect our cost structure and profitability in future periods. |
Results of Operations
The following discussion should be read in conjunction with the information set forth in the financial statements and the accompanying notes appearing elsewhere in this Form 10-Q.
Comparison of Three Months ended September 30, 2025 and 2024 (in thousands)
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Three months ended |
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September 30, |
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2025 |
2024 |
$ change |
% change |
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Net revenue: |
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|
|
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|
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Product sales |
|
$ |
28,787 |
|
$ |
30,169 |
|
$ |
(1,382) |
(4.6) |
% |
|
|
Consumer, MHP and dealer loans interest |
|
10,892 |
|
10,330 |
|
562 |
5.4 |
% |
||||
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Other |
|
799 |
|
3,767 |
|
(2,968) |
(78.8) |
% |
||||
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Total net revenue |
|
40,478 |
|
44,266 |
|
(3,788) |
(8.6) |
% |
||||
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Operating expenses: |
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Cost of product sales |
|
22,963 |
|
21,364 |
|
1,599 |
7.5 |
% |
||||
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Cost of other sales |
|
|
580 |
|
1,988 |
|
|
(1,408) |
|
N/A |
% |
|
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Selling, general administrative expenses |
|
7,315 |
|
6,065 |
|
1,250 |
20.6 |
% |
||||
|
Dealer incentive |
|
(89) |
|
(475) |
|
386 |
(81.3) |
% |
||||
|
Total operating expenses |
|
|
30,769 |
|
|
28,942 |
|
|
1,827 |
|
6.3 |
% |
|
Income from operations |
|
9,709 |
|
15,324 |
|
(5,615) |
(36.6) |
% |
||||
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Other income (expense) |
|
|
|
|
||||||||
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Non-operating interest income |
|
285 |
|
(17) |
|
302 |
(1,776.5) |
% |
||||
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Miscellaneous, net |
|
250 |
|
4,193 |
|
(3,943) |
(94.0) |
% |
||||
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Interest expense |
|
13 |
|
(175) |
|
188 |
(107.4) |
% |
||||
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Total other income (expense) |
|
548 |
|
4,001 |
|
(3,453) |
(86.3) |
% |
||||
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Income before income tax expense |
|
10,257 |
|
19,325 |
|
(9,068) |
(46.9) |
% |
||||
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Income tax expense |
|
(1,612) |
|
(3,522) |
|
1,910 |
(54.2) |
% |
||||
|
Net income |
|
$ |
8,645 |
|
$ |
15,803 |
|
$ |
(7,158) |
(45.3) |
% |
|
Product sales primarily consist of direct sales, commercial sales, inventory finance sales and retail store sales. Product sales decreased $1.4 million, or 4.6%, during the three months ended September 30, 2025 as compared to the same period in 2024. This decrease was driven by a decrease in unit volumes shipped, primarily in inventory finance sales, retail sales and mobile home park sales categories.
Net revenue attributable to our factory-built housing consisted of the following during the three months ended September 30, 2025 and 2024:
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Three months ended |
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September 30, |
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(in thousands) |
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2025 |
2024 |
$ Change |
% Change |
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Net revenue: |
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||||||||
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Product Sales |
|
$ |
28,787 |
|
$ |
30,169 |
|
$ |
(1,382) |
(4.6) |
% |
|
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Total units sold |
|
420 |
|
475 |
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(55) |
(11.6) |
% |
||||
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Net revenue per unit sold |
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$ |
68.5 |
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$ |
63.5 |
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$ |
5 |
7.9 |
% |
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For the three months ended September 30, 2025, our net revenue per product sold increased by 7.9% as compared to the same period in 2024. The increase is primarily due to an increase in units sold to consumers, which are sold at higher retail prices than our other channels. We had increases in retail and direct sales, which were more than offset by decreases in inventory finance sales, mobile home park sales, and other product sales. Inventory finance sales decreased $0.7 million, or 9% during the three months ended September 30, 2025 as compared to the same period in 2024. Retail sales increased $0.2 million, or 3.6% during the three months ended September 30, 2025 as compared to the same period in 2024. Mobile home park sales decreased $1.3 million, or 10.7% during the three months ended September 30, 2025 as compared to the same period in 2024. Direct sales increased $0.7 million, or 32.1% during the
three months ended September 30, 2025 as compared to the same period in 2024. Other product sales decreased $0.2 million, or 10.6% during the three months ended September 30, 2025 as compared to the same period in 2024. Our revenue decreased primarily due to a lower volume of unit sales partially offset by an increase in net revenue per unit sold.
Consumer, MHP and dealer loans interest income increased $0.6 million, or 5.4% during the three months ended September 30, 2025 as compared to the same period in 2024, with essentially all of the gain coming from consumer loan portfolio interest.
Other revenue primarily consists of contract deposit forfeitures, consignment fees, commercial lease rents, land sales, portfolio service revenue, park rental income, storage fees, and other miscellaneous income which decreased $3.0 million, or 78.8%, during the three months ended September 30, 2025 as compared to the same period in 2024. This decrease was primarily due to a $2.7 million decrease in land sales.
The cost of product sales increased $1.6 million, or 7.5%, during the three months ended September 30, 2025 as compared to the same period in 2024. The increase in costs is primarily related to an increase in raw material and tariff costs from 39.4% to 47.7% of sales, which is particularly notable given the favorable shift in sales mix towards higher margin products. The cost of other sales was $0.6 million during the three months ended September 30, 2025.
Selling, general and administrative expenses increased $1.3 million, or 20.6%, during the three months ended September 30, 2025 as compared to the same period in 2024. We had a $0.9 million increase in legal expense, $0.5 million increase in loan portfolio loss expense, $0.5 million increase in professional and consulting fee expense, and a $0.1 million increase in property tax expense offset by a $0.6 million decrease in payroll health benefit expense due to a significant medical claim accrual during the comparable period of 2024.
Other income (expense) decreased $3.5 million, or 86.3%, during the three months ended September 30, 2025 as compared to the same period in 2024. We had an (i) increase of $0.3 million in non-operating interest income due to a decrease in the required interest accrual allowance related to development loans in default offset by a reduction in interest income due to the decrease in development notes receivable over the comparable period of 2024, (ii) a decrease of $3.9 million in other income/expense primarily due to a fair market valuation gain adjustment on property acquired in foreclosure during the third quarter of 2024 related to the Rodwell default settlement, and (iii) a savings of $0.2 million in interest expense due to a reduction in the line of credit balance.
Income tax decreased $1.9 million during the three months ended September 30, 2025 as compared to the same period in 2024 due to a decrease in before tax income as well as the purchase of tax credits at a discount during the three months ended September 30, 2025. The effective tax rate for the three months ended September 30, 2025 was 15.7% and differs from the federal statutory rate of 21% primarily due to a federal tax credit for energy efficient construction and federal tax credits purchased at a discount by the Company in both the second and third quarters of 2025. The effective tax rate for the three months ended September 30, 2024 was 18.2%
Comparison of Nine Months ended September 30, 2025 and 2024 (in thousands)
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Nine months ended |
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September 30, |
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2025 |
2024 |
$ change |
% change |
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Net revenue: |
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Product sales |
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$ |
91,464 |
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$ |
92,653 |
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$ |
(1,189) |
(1.3) |
% |
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Consumer, MHP and dealer loans interest |
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32,431 |
|
30,807 |
|
1,624 |
5.3 |
% |
||||
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Other revenue |
|
2,415 |
|
6,544 |
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(4,129) |
(63.1) |
% |
||||
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Total net revenue |
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126,310 |
|
130,004 |
|
(3,694) |
(2.8) |
% |
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Operating expenses: |
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|
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Cost of product sales |
|
66,095 |
|
63,389 |
|
2,706 |
4.3 |
% |
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Cost of other sales |
|
|
1,724 |
|
1,988 |
|
(264) |
N/A |
% |
|||
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Selling, general administrative expenses |
|
20,249 |
|
17,528 |
|
2,721 |
15.5 |
% |
||||
|
Dealer incentive |
|
124 |
|
(1,005) |
|
1,129 |
(112.3) |
% |
||||
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Total operating expenses |
|
|
88,192 |
|
|
81,900 |
|
|
6,292 |
|
7.7 |
% |
|
Income from operations |
|
38,118 |
|
48,104 |
|
(9,986) |
(20.8) |
% |
||||
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Other income (expense) |
|
|
|
|
||||||||
|
Non-operating interest income |
|
1,251 |
|
2,270 |
|
(1,019) |
(44.9) |
% |
||||
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Miscellaneous, net |
|
1,414 |
|
7,945 |
|
(6,531) |
(82.2) |
% |
||||
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Interest expense |
|
(22) |
|
(686) |
|
664 |
(96.8) |
% |
||||
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Total other income |
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2,643 |
|
9,529 |
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(6,886) |
(72.3) |
% |
||||
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Income before income tax expense |
|
40,761 |
|
57,633 |
|
(16,872) |
(29.3) |
% |
||||
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Income tax expense |
|
(7,145) |
|
(10,502) |
|
3,357 |
(32.0) |
% |
||||
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Net income |
|
$ |
33,616 |
|
$ |
47,131 |
|
$ |
(13,515) |
(28.7) |
% |
|
Product sales primarily consist of direct sales, commercial sales, inventory finance sales and retail store sales. Product sales decreased $1.2 million, or 1.3%, during the nine months ended September 30, 2025 as compared to the same period in 2024. This decrease was driven by a $6.8 million increase in inventory finance sales and a $1.6 million increase in retail sales, offset by a decrease of $7.5 million in mobile home park sales, a $0.2 million decrease in direct sales, and a $1.9 million decrease in other product sales.
Net revenue attributable to our factory-built housing consisted of the following during the nine months ended September 30, 2025 and 2024:
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Nine Months Ended |
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September 30, |
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($ in thousands) |
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2025 |
2024 |
$ Change |
% Change |
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Net revenue: |
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|
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||||||||
|
Product Sales |
|
$ |
91,465 |
|
$ |
92,653 |
|
$ |
(1,188) |
(1.3) |
% |
|
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Total units sold |
|
1,334 |
|
1,536 |
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(202) |
(13.2) |
% |
||||
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Net revenue per unit sold |
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$ |
68.6 |
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$ |
60.3 |
|
$ |
8.3 |
13.7 |
% |
|
For the nine months ended September 30, 2025, our net revenue per product sold increased by 13.7% as compared to the same period in 2024. The increase is primarily due to a decrease in units sold to mobile home parks, which are sold at wholesale prices, and an increase in units sold to consumers, which are sold at higher retail prices. We had increases in inventory finance sales and retail sales, partially offset by decreases in mobile home park sales, direct sales, and other product sales. Inventory finance sales increased $6.8 million, or 27.0% during the nine months ended September 30, 2025 as compared to the same period in 2024. Retail sales increased $1.6 million, or 10.7% during the nine months ended September 30, 2025 as compared to the same period in 2024. Mobile home park sales decreased $7.5 million, or 20.2% during the nine months ended September 30, 2025 as compared to the same period in 2024. Direct sales decreased $0.2 million, or 2.9% during the nine months ended September 30, 2025 as compared to the same period in 2024. Other product sales decreased $1.9 million, or 24.4% during the nine months ended September 30, 2025 as compared to the same period in 2024.
Consumer, MHP and dealer loans interest income increased $1.6 million, or 5.3%, during the nine months ended September 30, 2025 as compared to the same period in 2024. Our consumer loan portfolio interest income increased by $2.0 million, our MHP loan portfolio interest income decreased by $0.2 million, and our dealer finance interest income decreased by $0.1 million.
Other revenue primarily consists of contract deposit forfeitures, consignment fees, commercial lease rents, land sales, portfolio service fees, storage fees, and other miscellaneous income and decreased $4.1 million, or 63.1%, during the nine months ended September 30, 2025 as compared to the same period in 2024. This decrease was primarily due to a $2.6 million decrease in land sale revenue and a $1.1 million decrease in deposit forfeitures.
The cost of product sales increased $2.7 million, or 4.3%, during the nine months ended September 30, 2025 as compared to the same period in 2024. The increase in costs is primarily related to an increase in raw materials and tariffs from 39.1% to 41.3% of sales, partially offset by a decrease in labor and factory overhead costs.
Selling, general and administrative expenses increased $2.7 million, or 15.5%, during the nine months ended September 30, 2025 as compared to the same period in 2024. We had a $1.7 million increase in loan portfolio loss expense, a $0.8 million increase in legal expense, a $0.7 million increase in service warranty expense, a $0.4 million increase in professional and consulting expense, and a $0.2 million increase in retail operations' payroll expense offset by a $0.7 million decrease in health benefits expense, a $0.4 million decrease in corporate and general payroll expense, a $0.15 million decrease in depreciation and amortization expense, and a $0.15 million decrease in postage and shipping expense. Professional and consulting expense increased primarily for due diligence related to pursuing corporate opportunities.
Other income (expense) decreased $6.9 million, or 72.3%, during the nine months ended September 30, 2025 as compared to the same period in 2024. We had (i) a decrease of $1.0 million in non-operating interest income primarily due to a lower balance of other development notes receivable, (ii) a $6.5 million decrease in other income/expense primarily due to land sales, reversal of accrued liabilities, and fair value gain adjustments related to settlements during the nine months ended September 30, 2024 that did not occur during the nine months ended September 30, 2025, and (iii) a decrease of $0.7 million in interest expense related to the reduction in the company's line of credit utilization.
Income tax decreased $3.4 million during the nine months ended September 30, 2025 as compared to the same period in 2024. This is primarily due to a $16.9 million decrease in before tax income between comparable nine month periods for 2025 and 2024 as well as the purchase of tax credits at a discount during 2025. The effective tax rate for the nine months ended September 30, 2025 was 17.5% and differs from the federal statutory rate of 21% primarily due to a federal tax credit for energy efficient construction and federal tax credits purchased at a discount by the Company during the second and third quarters, both partially offset by state income taxes. The effective tax rate for the nine months ended September30, 2024 was 18.2%.
Liquidity and Capital Resources
Liquidity
We believe that cash flow from operations and cash at September 30, 2025, and availability on our lines of credit will be sufficient to fund our operations and provide for growth for the next 12 to 18 months and into the foreseeable future. On July 28, 2023, we terminated our credit agreement with Capital One, N.A. and entered into a new credit agreement with Prosperity Bank that expanded and extended our credit availability (see Lines of Credit, below).
Cash
We maintain cash balances in bank accounts that may, at times, exceed federally insured limits. We have not incurred any losses from such accounts, and management considers the risk of loss to be minimal. As of September 30, 2025, we had approximately $13.6 million in cash, compared to $1.1 million as of December 31, 2024. We consider all cash and highly liquid investments with an original maturity of three months or less to be cash equivalents.
Cash Flow Activities
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Nine Months Ended |
||||
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September 30, |
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|
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|
(in thousands) |
||||
|
|
2025 |
2024 |
||||
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities |
|
$ |
18,123 |
|
$ |
28,100 |
|
Net cash provided by (used in) investing activities |
|
$ |
770 |
|
$ |
(1,511) |
|
Net cash used in financing activities |
|
$ |
(6,491) |
|
$ |
(26,767) |
|
Net change in cash |
|
$ |
12,402 |
|
$ |
(178) |
|
Cash at beginning of period |
|
$ |
1,149 |
|
$ |
748 |
|
Cash at end of period |
|
$ |
13,551 |
|
$ |
570 |
Comparison of Cash Flow Activities from September 30, 2025 to September 30, 2024
Net cash provided by operating activities was $18.1 million during the nine months ended September 30, 2025, compared to net cash of $28.1 million provided by operating activities during the nine months ended September 30, 2024. This change was predominantly the result of decreased net income, increased consumer loan originations net of collections due to a higher percentage of sales being financed by the company, increased other assets, decreased accounts payable and accrued liabilities, increased inventories, and increased accounts receivable partially offset by decreased MHP loan originations net of collections, decreased dealer inventory loan originations, and increased customer escrow liability.
Net cash provided by investing activities of $0.8 million during the nine months ended September 30, 2025 was primarily attributable to $6.0 million of development notes receivable collections net of originations offset by $5.7 million used in development of property and purchases of machinery and equipment. Net cash used in investing activities of $1.5 million during the nine months ended September 30, 2024 was primarily attributable to $7.3 million used in development of property and purchases of machinery and equipment offset by $4.1 million of development notes receivable collections net of originations, and proceeds of $1.6 million from the sale of company property.
Net cash used in financing activities of $6.5 million during the nine months ended September 30, 2025 was attributable $6.5 million of stock repurchases. Net cash used in financing activities of $26.8 million during the nine months ended September 30, 2024 was attributable to net payments of $21.6 million on our lines of credit, and $5.4 million of stock repurchases and $0.2 million received from the exercise of stock options.
In November 2022, our Board of Directors approved a share repurchase program to authorize the repurchase of up to $10.0 million of the Company's common stock. On August 6, 2024, our Board of Directors authorized the repurchase of an additional $10.0 million of the Company's common stock under the share repurchase program. We repurchased 262,530 shares of common stock for $5,398 in the open market during the year ended December 31, 2024. We repurchased 29,385 shares of common stock for $675 in the open market during the three months ended March 31, 2025. We repurchased 260,635 shares of common stock for $5,817 in the open market during the three months ended June 30, 2025. As of September 30, 2025, we had a remaining authorization of approximately $8,110.
Lines of Credit
On July 28, 2023, the Company entered into a new Credit Agreement (the "Revolver"), by and among the Company as borrower, the financial institutions from time to time party thereto, as lenders, and Prosperity Bank as administrative agent. Subsequently, the Company repaid in full the balance due on its prior line of credit with Capital One, N.A. and all commitments under this prior line of credit were terminated. The Revolver provides for a four-year senior secured revolving credit facility with an initial commitment of $50,000 and an additional $25,000 commitment under an accordion feature. The Revolver is secured by the Company's consumer loans receivables. At the Company's option, borrowings will bear interest at a per annum rate equal to, (i) Term Secured Overnight Financing Rate ("SOFR") plus an applicable margin of 2.5% or 2.75% based upon the Company's average quarterly borrowings under the Revolver or (ii) a base rate plus an applicable margin of 2.5% or 2.75% based upon the Company's average quarterly borrowings under the Revolver. The Company paid certain arrangement fees and other fees in connection with the Revolver of approximately $271, which were capitalized as unamortized debt issuance costs and included within lines of credit balance in the accompanying balance sheets and are amortized to interest expense over the life of the Revolver. The Revolver matures July 28, 2027.
For the three months ended September 30, 2025 and 2024, interest expense under the Revolver was $2 and $175, respectively. For the nine months ended September 30, 2025 and 2024, interest expense under the Revolver was $3 and $686, respectively. The outstanding balance of the Revolver as of September 30, 2025 and December 31, 2024 was $0 and $0, respectively. The interest rate in effect as of September 30, 2025 and December 31, 2024 for the Revolver was 7.25% and 7.61%, respectively. The amount of available credit under the Revolver was $50,000 and $50,000 as of September 30, 2025 and December 31, 2024, respectively. The Revolver requires the Company to comply with certain financial and non-financial covenants. As of September 30, 2025, the Company was in compliance with all financial covenants, including that it maintain a maximum leverage ratio of no more than 1.00 to 1.00 and a minimum fixed charge coverage ratio of no less than 1.75 to 1.00.
Contractual Obligations
The following table is a summary of contractual cash obligations as of September 30, 2025:
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Payments Due by Period (in thousands) |
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Contractual Obligations |
Total |
2025 |
2026 - 2027 |
2028 - 2029 |
After 2029 |
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Lines of credit |
|
$ |
- |
- |
- |
- |
- |
||||
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Operating lease obligations |
|
$ |
1,041 |
120 |
776 |
145 |
- |
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Off Balance Sheet Arrangements
We did not have any off-balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, net sales, results of operations, liquidity or capital expenditures. However, we do have repurchase agreements with financial institutions providing inventory financing for independent retailers of our products. Under these agreements, we have agreed to repurchase homes at declining prices over the term of the agreement. Our obligation under these repurchase agreements ceases upon the purchase of the home by the retail customer. The maximum amount of our contingent obligations under such repurchase agreements was approximately $713 and $805 as of September 30, 2025 and December 31, 2024, respectively, without reduction for the resale value of the homes. We may be required to honor contingent repurchase obligations in the future and may incur additional expense as a consequence of these repurchase agreements. We consider our obligations on current contracts to be immaterial and accordingly we have not recorded any reserve for repurchase commitment as of September 30, 2025.
Critical Accounting Estimates
Critical accounting estimates are those that we believe are both significant and require us to make difficult, subjective or complex judgments, often because we need to estimate the effect of inherently uncertain matters. We base our estimates and judgments on historical experiences and various other factors that we believe to be appropriate under the circumstances. Actual results may differ from these estimates, and we might obtain different estimates if we used different assumptions or conditions. Our critical accounting estimates are identified and described in our Annual Report on Form 10-K for the year ended December 31, 2024.
Recent Accounting Pronouncements
For information regarding recent accounting pronouncements, see Note 1 - Nature of Operations, Recent Accounting Pronouncements to our September 30, 2025 Condensed Financial Statements, included in Part I, Item 1, Financial Statements (Unaudited), of this Quarterly Report.
Legacy Housing Corporation published this content on November 07, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on November 07, 2025 at 22:01 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]