The following is a summary of the Legacy Housing Corporation (LEGH) Q4 2023 Earnings Call Transcript:

Financial Performance:

• Legacy Housing saw a one-time increase of $29.1 million in product sales in 2022, with about $20 million recognized in Q4 of 2022.

• The effective tax rate increased from 17.5% in 2022 to 20.8% in 2023 due to changes in energy tax programs, but is expected to drop to around 18% in 2024.

• The adoption of the CECL led to a $900,000 increase in portfolio allowances.

• Managed to reduce SG&A by 11.9% and controlled overhead expenses effectively, resulting in net income margins of 29% for 2023.

Business Progress:

• Dealer sign-ups reached their highest level since early 2023, with the retail side of the business expected to recover gradually in 2024.

• Due to worsening housing affordability in the U.S., the company sees opportunities with its products targeted at lower-income households.

• Despite shipment delays impacting Q4 sales, the company sees growth potential in the workforce housing segment and remained focused on improving working capital and employment.

• A plan to increase retail presence through company-owned stores targets higher retail margins and better financing opportunities.

• While maintaining strong performance in their consumer loan portfolios and focusing on strategic projects for long-term stability, the company also considers divesting some properties for potentially high returns.

More details: Legacy Housing IR

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