Legacy Housing Corp (NASDAQ:LEGH) Q4 2018 Earnings Conference Call Transcript

Apr 09, 2019 • 11:00 am ET

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Legacy Housing Corp (NASDAQ:LEGH) Q4 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen, and welcome to Legacy Housing Corporation's Earnings Call Regarding 2018 Financials. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. (Operator Instructions) As a reminder, today's conference may be recorded.

I would now like to turn the call over to Mr. Curt Hodgson. Sir, you may begin.

Executive
Curtis D. Hodgson

Good morning, everybody, and thank you for joining us on our first call. And realize that this is our first call, so we are going to be learning as we go ourselves. I've been tasked with some housekeeping words here, which I'm going to say before I begin my prepared comments. And those tasks are, before we begin, I remind our listeners that management's prepared remarks today will contain forward-looking statements, which are subject to risk and uncertainties, and management may make additional forward-looking statements in response to your questions. Therefore, the Company claims the protection of the safe harbor for forward-looking statements that is contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from management's current expectations, and therefore we refer you to a more detailed discussion of the risk and uncertainties in the Company's annual report filed with the Securities and Exchange Commission.

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

So as I said before, welcome to our first-ever earnings call for Legacy Housing. Obviously, 2018 was an exciting time for me and for our Company. We are pleased with our 2018 financial results, which resulted in $161 million in gross revenue, the highest annual revenue ever generated by Legacy in a year, in which we spent considerable time, resources and energy in our successful effort to complete our public offering. The Company sold 3,950 home sections in 2018 compared to 3,274 in 2017, an increase of over 20%. Put in terms of complete homes, we sold 3,392 units in 2018, compared to 2,900 in 2017, a 17% increase. We also increased the average selling price of our products to approximately $41,000, as opposed to approximately $38,000 in 2017. This was attributable to sales price increases in 2017, as well as more sales being made through our Company-owned retail stores, which carry higher prices and margins.

As for our view of the manufactured housing industry, overall, the industry is continuing its -- excuse me, continuing its incremental recovery, but remains well below long-term averages. We certainly see an opportunity for continued demand and growth for the industry, especially with the need for affordable housing and the potential for a rising interest rate environment. It typically spurs growth in our industry. We did see some softening in certain key markets at the end of 2018, mainly in Texas and Louisiana, with respect to sales through our independent dealers, even