Legacy Housing Corp 10-Q

Item 1. Financial Statements LEGACY HOUSING CORPORATION CONDENSED BALANCE SHEETS (in thousands, except share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, December 31, ​ ​ 2024 ​ 2023 Assets ​ ​ ​ ​ ​ ​ Current assets: ​ ​ Cash ​ $ 621 ​ $ 748 Accounts receivable, net ​ 4,314 ​ 4,656 Current portion of contracts - dealer financed ​ ​ 34,041 ​ ​ 32,538 Current portion of consumer loans receivable ​ 7,903 ​ 7,682 Current portion of notes receivable from mobile home parks (“MHP”) ​ 45,178 ​ 18,156 Current portion of other notes receivable ​ 14,669 ​ 6,013 Inventories ​ 34,250 ​ 33,176 Prepaid expenses and other current assets ​ 5,310 ​ 4,915 Total current assets ​ 146,286 ​ 107,884 Contracts - dealer financed ​ — ​ — Consumer loans receivable, net ​ 151,282 ​ 148,818 Notes receivable from mobile home parks (“MHP”), net ​ 137,384 ​ 163,824 Other notes receivable, net ​ 15,526 ​ 28,577 Inventories, net ​ ​ 8,727 ​ ​ 7,793 Other assets - leased mobile homes ​ ​ 5,049 ​ ​ 7,601 ROU assets - operating leases ​ ​ 1,661 ​ ​ 1,794 Other assets ​ 3,296 ​ 2,571 Property, plant and equipment, net ​ 40,760 ​ 37,880 Total assets ​ $ 509,971 ​ $ 506,742 Liabilities and Stockholders' Equity ​ ​ Current liabilities: ​ ​ Accounts payable ​ $ 3,604 ​ $ 4,090 Accrued liabilities ​ 19,761 ​ 18,504 Customer deposits ​ 4,109 ​ 4,146 Escrow liability ​ 10,953 ​ 10,104 Operating lease obligation ​ ​ 474 ​ ​ 489 Total current liabilities ​ 38,901 ​ 37,333 Long‑term liabilities: ​ ​ Operating lease obligation, less current portion ​ ​ 1,274 ​ ​ 1,396 Lines of credit ​ 11,797 ​ 23,680 Deferred income taxes, net ​ ​ 2,338 ​ ​ 2,338 Dealer incentive liability ​ 5,300 ​ 5,260 Total liabilities ​ 59,610 ​ 70,007 Commitments and contingencies (Note 15) ​ ​ Stockholders' equity: ​ ​ ​ ​ ​ ​ Preferred stock, $ .001 par value, 10,000,000 shares authorized: no shares issued or outstanding ​ ​ — ​ ​ — Common stock, $ .001 par value, 90,000,000 shares authorized; 24,852,740 and 24,843,494 issued and 24,316,488 and 24,398,429 outstanding at March 31, 2024 and December 31, 2023, respectively ​ ​ 31 ​ ​ 30 Treasury stock at cost, 536,252 and 445,065 shares at March 31, 2024 and December 31, 2023, respectively ​ ​ ( 6,348 ) ​ ​ ( 4,477 ) Additional paid-in-capital ​ ​ 181,780 ​ ​ 181,424 Retained earnings ​ ​ 274,898 ​ ​ 259,758 Total stockholders' equity ​ ​ 450,361 ​ ​ 436,735 Total liabilities and stockholders' equity ​ $ 509,971 ​ $ 506,742 See accompanying notes to unaudited interim condensed financial statements. 2 Table of Contents LEGACY HOUSING CORPORATION CONDENSED STATEMENTS OF INCOME (in thousands, except share and per share data) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended March 31, ​ ​ 2024 2023 ​ Net revenue: ​ ​ ​ Product sales ​ $ 30,833 ​ $ 43,318 ​ Consumer, MHP and dealer loans interest ​ 10,633 ​ 7,705 ​ Other ​ 1,777 ​ 1,834 ​ Total net revenue ​ 43,243 ​ 52,857 ​ Operating expenses: ​ ​ ​ Cost of product sales ​ 20,466 ​ 28,960 ​ Selling, general and administrative expenses ​ 5,889 ​ 5,412 ​ Dealer incentive ​ 138 ​ 131 ​ Total operating expenses ​ ​ 26,493 ​ ​ 34,503 ​ Income from operations ​ 16,750 ​ 18,354 ​ Other income (expense): ​ ​ ​ Non‑operating interest income ​ 1,302 ​ 695 ​ Miscellaneous, net ​ 737 ​ 753 ​ Interest expense ​ ( 276 ) ​ ( 91 ) ​ Total other income ​ 1,763 ​ 1,357 ​ Income before income tax expense ​ 18,513 ​ 19,711 ​ Income tax expense ​ ( 3,373 ) ​ ( 3,435 ) ​ Net income ​ $ 15,140 ​ $ 16,276 ​ Weighted average shares outstanding: ​ ​ ​ ​ ​ ​ ​ Basic ​ ​ 24,393,003 ​ ​ 24,374,677 ​ Diluted ​ ​ 25,125,016 ​ ​ 25,177,502 ​ Net income per share: ​ ​ ​ ​ ​ ​ ​ Basic ​ $ 0.62 ​ $ 0.67 ​ Diluted ​ $ 0.60 ​ $ 0.65 ​ ​ See accompanying notes to unaudited interim condensed financial statements. ​ 3 Table of Contents LEGACY HOUSING CORPORATION CONDENSED STATEMENTS OF CASH FLOWS (unaudited, in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended March 31, ​ ​ 2024 2023 Operating activities: ​ ​ ​ Net income ​ $ 15,140 ​ $ 16,276 ​ Adjustments to reconcile net income to net cash used in operating activities: ​ ​ ​ Depreciation and amortization expense ​ 423 ​ 430 ​ Amortization of deferred revenue ​ ​ ( 729 ) ​ ​ ( 290 ) ​ Provision for accounts and notes receivable ​ ​ ( 171 ) ​ ​ ( 43 ) ​ Provision for long term inventory ​ ​ 89 ​ ​ 19 ​ Gain from sale of leased property ​ ​ ( 57 ) ​ ​ ( 507 ) ​ Non-cash operating lease expense ​ ( 12 ) ​ 14 ​ Share based payment expense ​ ​ 257 ​ ​ 192 ​ Other non cash items ​ ​ 17 ​ ​ ( 21 ) ​ Changes in operating assets and liabilities: ​ ​ ​ Accounts receivable ​ 237 ​ 915 ​ Consumer loans activity, net ​ ( 2,428 ) ​ ( 2,287 ) ​ Notes receivable MHP activity, net ​ ( 1,245 ) ​ ( 11,667 ) ​ Dealer inventory loan activity, net ​ ​ ( 1,228 ) ​ ​ ( 2,189 ) ​ Inventories ​ ( 2,097 ) ​ ( 726 ) ​ Prepaid expenses and other current assets ​ ( 754 ) ​ 305 ​ Other assets - leased mobile homes ​ ​ 2,427 ​ ​ — ​ Other assets ​ ( 694 ) ​ ( 538 ) ​ Accounts payable and accrued liabilities ​ 772 ​ 109 ​ Right of use activity, net ​ 7 ​ ( 14 ) ​ Customer deposits ​ ( 37 ) ​ ( 2,369 ) ​ Escrow liability ​ ​ 849 ​ ​ ( 380 ) ​ Dealer incentive liability ​ 40 ​ 80 ​ Net cash provided by (used in) operating activities ​ 10,806 ​ ( 2,691 ) ​ Investing activities: ​ ​ ​ Purchases of property, plant and equipment ​ ( 871 ) ​ ( 761 ) ​ Proceeds from sale of leased property ​ ​ — ​ ​ 1,108 ​ Proceeds from sale of property ​ ​ 22 ​ ​ — ​ Issuance of notes receivable ​ ( 590 ) ​ ( 3,107 ) ​ Notes receivable collections ​ ​ 4,107 ​ ​ 468 ​ Collections from purchased loans ​ ​ 53 ​ ​ 106 ​ Net cash provided by (used in) investing activities ​ 2,721 ​ ( 2,186 ) ​ Financing activities: ​ ​ ​ Proceeds from exercise of stock options ​ ​ 100 ​ ​ — ​ Purchases of treasury stock ​ ​ ( 1,871 ) ​ ​ — ​ Proceeds from lines of credit ​ 12,736 ​ 20,188 ​ Payments on lines of credit ​ ( 24,619 ) ​ ( 14,896 ) ​ Net cash (used in) provided by financing activities ​ ( 13,654 ) ​ 5,292 ​ Net (decrease) increase in cash ​ ( 127 ) ​ 415 ​ Cash at beginning of period ​ 748 ​ 2,818 ​ Cash at end of period ​ $ 621 ​ $ 3,233 ​ Supplemental disclosure of cash flow information: ​ ​ ​ Cash paid for interest ​ $ 411 ​ $ 59 ​ Cash paid for taxes ​ $ — ​ $ 3,827 ​ ​ See accompanying notes to unaudited interim condensed financial statements. 4 Table of Contents LEGACY HOUSING CORPORATION ​ CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (in thousands, except share data) (unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Stock ​ Treasury ​ Additional ​ Retained ​ ​ ​ ​ Shares Amount stock paid-in-capital earnings Total Balances, December 31, 2022 ​ 24,814,695 ​ $ 30 ​ $ ( 4,477 ) ​ $ 180,555 ​ $ 205,996 ​ $ 382,104 Cumulative change in accounting principle, net of taxes (Note 1) ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 698 ) ​ ​ ( 698 ) Balances, January 1, 2023 (as adjusted for change in accounting principle) ​ 24,814,695 ​ $ 30 ​ $ ( 4,477 ) ​ $ 180,555 ​ $ 205,298 ​ $ 381,406 Share based compensation ​ 8,571 ​ ​ — ​ ​ — ​ ​ 191 ​ ​ — ​ ​ 191 Net income ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 16,276 ​ ​ 16,276 Balances, March 31, 2023 ​ 24,823,266 ​ $ 30 ​ $ ( 4,477 ) ​ $ 180,746 ​ $ 221,574 ​ $ 397,873 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Stock ​ Treasury ​ Additional ​ Retained ​ ​ ​ ​ Shares Amount stock ​ paid-in-capital earnings Total Balances, December 31, 2023 ​ 24,843,494 ​ $ 30 ​ $ ( 4,477 ) ​ $ 181,424 ​ $ 259,758 ​ $ 436,735 Share based compensation ​ 3,000 ​ ​ — ​ ​ — ​ ​ 257 ​ ​ — ​ ​ 257 Proceeds from exercise of stock options ​ 6,246 ​ ​ 1 ​ ​ — ​ ​ 99 ​ ​ — ​ ​ 100 Purchase of treasury stock ​ — ​ ​ — ​ ​ ( 1,871 ) ​ ​ — ​ ​ — ​ ​ ( 1,871 ) Net income ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 15,140 ​ ​ 15,140 Balances, March 31, 2024 ​ 24,852,740 ​ $ 31 ​ $ ( 6,348 ) ​ $ 181,780 ​ $ 274,898 ​ $ 450,361 ​ See accompanying notes to unaudited interim condensed financial statements. ​ ​ 5 Table of Contents LEGACY HOUSING CORPORATION NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (dollars in thousands) ​ 1. NATURE OF OPERATIONS Legacy Housing Corporation (referred herein as ”Legacy”, “we”, “our”, “us”, or the “Company”) was formed on January 1, 2018 as a Delaware corporation through a corporate conversion of Legacy Housing, Ltd. (the “Partnership”), a Texas limited partnership formed in May 2005. Effective December 31, 2019, the Company reincorporated from a Delaware corporation to a Texas corporation. The Company is headquartered in Bedford, Texas. The Company (1) manufactures and provides for the transport of mobile homes, (2) provides wholesale financing to dealers and mobile home parks, (3) provides retail financing to consumers and (4) is involved in financing and developing new manufactured home communities. The Company manufactures its mobile homes at plants located in Fort Worth, Texas, Commerce, Texas and Eatonton, Georgia. The Company relies on a network of dealers to market and sell its mobile homes. The Company also sells homes directly to consumers, through its own retail stores, and to dealers and mobile home parks. Basis of Presentation The accompanying unaudited interim condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC") as required by Regulation S-X, Rule 8-03. In the opinion of management, the unaudited interim condensed financial statements have been prepared on the same basis as the audited annual financial statements, and include all adjustments, consisting only of normal recurring adjustments, necessary for the fair statement of the Company's financial position for the periods presented. The results for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024, or any other period. The accompanying balance sheet as of December 31, 2023 was derived from audited financial statements included in the Company's annual report on Form 10-K for the year ended December 31, 2023 (the “Form 10-K”), filed on March 15, 2024. The accompanying financial statements do not include all of the information and footnotes required by GAAP for annual financial statements. Accordingly, they should be read in conjunction with the audited financial statements and notes thereto included in the Form 10-K. Use of Estimates The preparation of our financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of income and expenses during the reporting period. Material estimates that are susceptible to significant change in the near term primarily relate to the determination and valuation of accounts receivable, loans to mobile home parks, consumer loans receivable, other notes receivable, inventory obsolescence, income taxes, fair value of financial instruments and contingent liabilities. Actual results could differ from these estimates. Segment 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 providing transportation for dealers. We also provide financing options to the customers to facilitate such sale of homes. In addition, the sale of homes is directly related to financing provided by us. 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. 6 Table of Contents LEGACY HOUSING CORPORATION NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (dollars in thousands) ​ Revenue Recognition Product sales primarily consist of sales of mobile homes to consumers and mobile home parks through various sales channels, which include Direct Sales, Commercial Sales, Inventory Finance Sales, and Retail Store Sales. Direct Sales include homes sold directly to independent retailers or customers that are not financed by the Company and are not sold under an inventory finance arrangement. These types of homes are generally paid for prior to shipment. Commercial Sales include homes sold to mobile home parks under commercial loan programs or paid for upfront. Inventory Finance Sales include sales of homes to independent retailers, or dealers, who then resell the homes to consumers. Retail Store Sales are homes sold through Company-owned retail locations. Inventory Finance Sales and Retail Store Sales of homes may be financed by the Company or a third party, or they may be paid in cash. Consumer, MHP and dealer loans interest includes interest income from the consumer, MHP and dealer finance loan portfolios. Other revenue consists of consignment fees, commercial lease rents, service fees and other miscellaneous income. Share-Based Compensation The Company accounts for share-based compensation in accordance with the provisions of Accounting Standards Codification (“ASC”) 718, Compensation—Stock Compensation . Share-based compensation expense is recognized based on an award’s estimated grant date fair value in order to recognize compensation cost for those shares expected to vest. The Company has elected to record forfeitures as they occur. Compensation cost is recognized on a straight-line basis over the vesting period of the awards and adjusted as forfeitures occur. The fair value of each option grant with only service-based conditions is estimated using the Black-Scholes pricing model. The fair value of each restricted stock grant with only service-based conditions is calculated based on the closing price of the Company’s common stock on the grant date. The fair value of stock option awards on the date of grant is estimated using the Black-Scholes option pricing model, which requires the Company to make certain predictive assumptions. The risk-free interest rate is based on the implied yield of U.S. Treasury zero-coupon securities that correspond to the expected life of the award. The volatility is estimated based on the historical volatility of the Company’s common stock. The expected life of awards granted represents the period of time that the awards are expected to be outstanding based on the “simplified” method, which is allowed for companies that cannot reasonably estimate the expected life of options based on its historical award exercise experience. The Company does not expect to pay dividends on its common stock. Accounts Receivable “Accounts receivable, net” includes receivables from direct sales of mobile homes, sales of parts and supplies to customers, inventory finance fees and interest. “Accounts receivable, net” related to inventory finance fees and interest generally are due upon receipt, and all other accounts receivable generally are due within 30 days . Accounts receivable “net” are stated at amounts due from customers net of an allowance for doubtful accounts. Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines the allowance by considering several factors, including the aging of the past due balance, the customer’s payment history, and the Company’s previous loss history. The Company establishes an allowance for doubtful accounts for amounts that are deemed to be uncollectible. On March 31, 2024, December 31, 2023 and December 31, 2022, the allowance for doubtful accounts totaled $ 757 , $ 651 and $ 279 , respectively. 7 Table of Contents LEGACY HOUSING CORPORATION NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (dollars in thousands) ​ Leased Property The Company offers mobile home park operators the opportunity to lease mobile homes for rent in lieu of purchasing the homes for cash or under a longer-term financing agreement. In this arrangement title for the mobile homes remains with the Company, and the lease is accounted for as an operating lease. Our typical lease agreement is for 96 months or 120 months . It requires the lessee to maintain the home and to return the home to us at the end of the lease in good condition. It provides the lessee with a termination option for a fee, an option to extend the lease and a purchase option at fair market value. The leased mobile homes are included in other assets on the Company’s balance sheet, capitalized at manufactured cost and depreciated over a 15 year useful life. Homes returned to the Company upon expiration of the lease or in the event of default are sold by the Company through its standard sales and distribution channels. Depreciation expense for the leased property was $ 124 and $ 160 for the three months ended March 31, 2024 and 2023, respectively. During the three months ended March 31, 2024, the Company sold 120 leased mobile homes for $ 5.5 million to a mobile home park customer. Future minimum lease income under all operating leases for each of the next five years at March 31, 2024, is as follows: ​ ​ ​ ​ 2024 $ 901 2025 ​ 1,202 2026 ​ 1,202 2027 ​ 1,029 2028 ​ 841 Thereafter ​ 578 Total ​ $ 5,753 ​ Product Warranties The Company provides retail home buyers with a one-year warranty from the date of purchase on manufactured inventory. Product warranty costs are accrued when the covered homes are sold to customers. Product warranty expense is recognized based on the terms of the product warranty and the related estimated costs. Factors used to determine the warranty liability include the number of homes under warranty and the historical costs incurred in servicing the warranties. The accrued warranty liability is reduced as costs are incurred and the warranty liability balance is included as part of accrued liabilities in the Company’s balance sheet. The following table summarizes activity within the warranty liability for the three months ended March 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2024 2023 Warranty liability, beginning of period ​ $ 2,910 ​ $ 3,048 Product warranty accrued ​ 941 ​ 636 Warranty costs incurred ​ ( 537 ) ​ ( 627 ) Warranty liability, end of period ​ $ 3,314 ​ $ 3,057 ​ ​ 8 Table of Contents LEGACY HOUSING CORPORATION NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (dollars in thousands) ​ ​ Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016 13 Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For available for sale debt securities, credit losses should be measured in a manner similar to current GAAP, however Topic 326 will require that credit losses be presented as an allowance rather than as a write down and affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The Company used the longer phase in period for adoption, and accordingly this ASU became effective for the Company’s fiscal year beginning January 1, 2023. The adoption of ASU 2016-13 resulted in an increase in portfolio allowances of $ 900 at transition. The $ 900 was comprised of a $ 225 increase for MHP notes, a $ 187 increase for dealer financed contracts and a $ 488 increase for other notes receivable. The cumulative effect of the adoption was a net decrease of $ 698 to beginning retained earnings at January 1, 2023. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848. The amendments in this update extend the transition relief period for reference rate reform from December 31, 2022 to December 31, 2024. The amendments in ASU 2022-06 apply to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. ASU 2022-06 was effective upon issuance. The new standard has had no material impact on the Company's financial statements. ​ In November, 2023 the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 aims to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss. The update also requires disclosure regarding the chief operating decision maker and expands the interim segment disclosure requirements. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. We currently are evaluating the impact of ASU 2023-07 on our financial statements. ​ From time to time, new accounting pronouncements are issued by the FASB and other regulatory bodies that are adopted by the Company as of the specified effective dates. Unless otherwise discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s financial statements upon adoption. ​ ​ ​ 2. REVENUE Product sales primarily consist of sales of mobile homes to consumers and mobile home parks through various sales channels, which include Direct Sales, Commercial Sales, Inventory Finance Sales, and Retail Store Sales. Direct Sales include homes sold directly to independent retailers or customers that are not financed by the Company and are not sold under an inventory finance arrangement. These types of homes are generally paid for prior to shipment. Commercial Sales include homes sold to mobile home parks under commercial loan programs or paid for upfront. Inventory Finance Sales include sales of homes to independent retailers, or dealers, who then resell the homes to consumers. Retail Store 9 Table of Contents LEGACY HOUSING CORPORATION NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (dollars in thousands) ​ Sales are homes sold through Company-owned retail locations. Inventory Finance Sales and Retail Store Sales of homes may be financed by the Company or a third party, or they may be paid in cash. Revenue from product sales is recognized when the performance obligation under the terms of a contract with our customer is satisfied, which typically occurs upon delivery and transfer of title of the home, as this depicts when control of the promised good is transferred to our customers. For inventory financed sales, the independent dealer enters into a financing arrangement with the Company and is required to make monthly interest payments. Interest income is recorded separately in the statement of income. For other financed sales by the Company, the individual customer enters into a sales and financing contract and is required to make a down payment. These financed sales contain a significant financing component and any interest income is recorded separately in the statement of income. Revenue is measured as the amount of consideration expected to be received in exchange for transferring the homes to the customers. Sales and other similar taxes collected concurrently with revenue-producing activities are excluded from revenue. The Company made an accounting policy election to account for any shipping and handling costs that occur after the transfer of control as a fulfillment cost that is accrued when control is transferred. Warranty obligations associated with the sale of a unit are assurance-type warranties for a period of twelve months that are a guarantee of the home’s intended functionality and, therefore, do not represent a distinct performance obligation within the context of the contract. The Company has elected to use the practical expedient to expense the incremental costs of obtaining a contract if the amortization period of the asset that the Company would have otherwise recognized is one year or less. Contract costs, which include commissions incurred related to the sale of homes, are expensed at the point-in-time when the related revenue is recognized. Warranty costs and contract costs are included in selling, general and administrative expenses in the statements of income. Warranty and contract costs were $ 537 and $ 627 for the three months ended March 31, 2024 and 2023, respectively. For the three months ended March 31, 2024, mobile home park (“MHP”) sales to two independent third parties and their affiliates accounted for $ 5,450 or 17.7 % and $ 2,799 or 9.1 % of our product sales. The $ 5,450 represents sales of 120 leased mobile homes to a mobile home park customer, and these sales are included in Commercial Sales in the Disaggregation of Revenue table below. For the three months ended March 31, 2023, mobile home park (“MHP”) sales to an independent third party and its affiliates accounted for $ 5,647 or 13.0 % of our product sales. No other customer accounted for more than 5.0% of our product sales. For the three months ended March 31, 2024 and 2023, total cost of product sales included $ 1,408 and $ 2,623 of costs relating to subcontracted production for commercial sales, transportation and delivery costs, and certain other costs incurred for retail store and commercial sales. Other revenue consists of contract deposit forfeitures, consignment fees, commercial lease rents, service fees and other miscellaneous income. Consignment fees are charged to independent retailers on a monthly basis for homes held by the independent retailers pursuant to a consignment arrangement until the home is sold to an individual customer. Consignment fees are determined as a percentage of the home’s wholesale price to the independent dealer. Revenue recognition for consignment fees is recognized over time using the output method as it provides a faithful depiction of the Company’s performance toward completion of the performance obligation under the contract and the value transferred to the independent retailer for the time the home is held under consignment. The Company transitioned most of its independent retailers from consignment arrangements to inventory finance arrangements in late 2022. As a result, consignment fees transitioned to interest income for inventory finance arrangements, and this interest income is included in Consumer, MHP and dealer loans interest on the accompanying statement of income. Revenue for commercial leases is recognized as earned monthly over a contractual period of 96 or 120 months . Revenue for service fees and miscellaneous income is recognized at a point in time when the performance obligation is satisfied. 10 Table of Contents LEGACY HOUSING CORPORATION NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (dollars in thousands) ​ Disaggregation of Revenue. The following table summarizes customer contract revenues disaggregated by the source of the revenue for the three months ended March 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ ​ March 31, ​ ​ 2024 2023 Product sales: ​ ​ ​ ​ ​ ​ Direct sales ​ $ 1,795 ​ $ 7,426 Commercial sales ​ 13,602 ​ 15,565 Inventory finance sales ​ ​ 8,463 ​ ​ 13,615 Retail store sales ​ ​ 4,796 ​ ​ 3,967 Other product sales (1) ​ 2,177 ​ 2,745 Total product sales ​ 30,833 ​ 43,318 Consumer, MHP and dealer loans interest: ​ ​ Interest - consumer installment notes ​ 5,100 ​ 4,657 Interest - MHP notes ​ 4,608 ​ 3,048 Interest - dealer finance notes ​ ​ 925 ​ ​ — Total consumer, MHP and dealer loans interest ​ 10,633 ​ 7,705 Other ​ 1,777 ​ 1,834 Total net revenue ​ $ 43,243 ​ $ 52,857 (1) Other product sales revenue from ancillary products and services including parts, freight and other services ​ ​ 3. CONSUMER LOANS RECEIVABLE Consumer loans receivable result from financing transactions entered into with retail consumers of mobile homes sold through independent retailers and company-owned retail locations. Consumer loans receivable generally consist of the sales price and any additional financing fees, less the buyer’s down payment. Interest income is recognized monthly per the terms of the financing agreements. The average contractual interest rate per loan was approximately 13.2 % as of March 31, 2024 and December 31, 2023. Consumer loans receivable have maturities that range from 2 to 30 years . The Company reviews loan applications in an underwriting process which considers credit history, among other things, to evaluate credit risk of the consumer and determines interest rates on approved loans based on consumer credit score, payment ability and down payment amount. The Company uses payment history to monitor the credit quality of the consumer loans on an ongoing basis. The Company may also receive escrow payments for property taxes and insurance included in its consumer loan collections. The liabilities associated with these escrow collections totaled $ 10,953 and $ 10,104 as of March 31, 2024 and December 31, 2023, respectively, and are included in escrow liability in the accompanying balance sheets. Allowance for Loan Losses—Consumer Loans Receivable The allowance for loan losses reflects management’s estimate of losses inherent in the consumer loans that may be uncollectible based upon review and evaluation of the consumer loan portfolio as of the date of the balance sheet. An allowance for loan losses is determined after giving consideration to, among other things, the loan characteristics, 11 Table of Contents LEGACY HOUSING CORPORATION NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (dollars in thousands) ​ including the financial condition of borrowers, the value and liquidity of collateral, delinquency and historical loss experience. The allowance for loan losses is comprised of two components: the general reserve and specific reserves. The Company’s calculation of the general reserve considers the historical loan default rates and collateral recovery rates for the last three years and any qualitative factors both internal and external to the Company. Specific reserves are determined based on probable losses on specific classified impaired loans. The Company’s policy is to place a loan on nonaccrual status when there is a clear indication that the borrower’s cash flow may not be sufficient to meet payments as they become due, which generally is when either principal or interest is past due and remains unpaid for more than 90 days. Management implemented this policy based on an analysis of historical data, current performance of loans and the likelihood of recovery once principal or interest payments became delinquent and were aged more than 90 days. Payments received on nonaccrual loans are accounted for on a cash basis, first to interest and then to principal, as long as the remaining book balance of the asset is deemed to be collectible. The accrual of interest resumes when the past due principal or interest payments are brought within 90 days of being current. Impaired loans are those loans for which it is probable that the Company will be unable to collect all amounts due in accordance with the original contractual terms of the loan agreement, including scheduled principal and interest payments. Impaired loans, or portions thereof, are charged off when deemed uncollectible. A loan is generally deemed impaired if it is more than 90 days past due on principal or interest, is in bankruptcy proceedings, or is in the process of repossession. A specific reserve is created for impaired loans based on fair value of underlying collateral value, less estimated selling costs. The Company uses various factors to determine the value of the underlying collateral for impaired loans. These factors include: (1) the length of time the unit remained unsold after construction; (2) the amount of time the house was occupied; (3) the cooperation level of the borrowers (for example, loans requiring legal action or extensive field collection efforts may have a reduced value); (4) the physical location of the home; (5) the length of time the borrower has lived in the house without making payments; (6) the size of the home and market conditions; and (7) the experience and expertise of the particular dealer assisting in collection efforts. Collateral for repossessed loans is acquired through foreclosure or similar proceedings and is recorded at the estimated fair value of the home, less the costs to sell. At repossession, the collateral is recorded at the same amount as the principal balance as the loan. The fair value of the collateral is then computed based on the historical recovery rates of previously charged off loans, the loan is charged off and the loss is charged to the allowance for loan losses. At each reporting period, the fair value of the collateral is adjusted to the lower of the amount recorded at repossession or the estimated sales price less estimated costs to sell, based on current information. Repossessed homes totaled $ 2,940 and $ 2,215 as of March 31, 2024 and December 31, 2023, respectively, and are included in other assets in the accompanying balance sheets. Consumer loans receivable, net of allowance for loan losses and deferred financing fees, consists of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ As of March 31, As of December 31, ​ ​ 2024 ​ 2023 Consumer loans receivable ​ $ 162,196 ​ $ 159,738 Loan discount and deferred financing fees ​ ( 2,447 ) ​ ( 2,473 ) Allowance for loan losses ​ ( 564 ) ​ ( 765 ) Consumer loans receivable, net ​ $ 159,185 ​ $ 156,500 ​ ​ 12 Table of Contents LEGACY HOUSING CORPORATION NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (dollars in thousands) ​ The following table presents a detail of the activity in the allowance for loan losses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ ​ 2024 2023 Allowance for loan losses, beginning of period ​ $ 765 ​ $ 830 ​ Provision for loan losses ​ ( 268 ) ​ ( 70 ) ​ Charge offs ​ 67 ​ 56 ​ Allowance for loan losses, end of period ​ $ 564 ​ $ 816 ​ ​ The following table presents impaired and general reserve for allowance for loan losses: ​ ​ ​ ​ ​ ​ ​ ​ ​ As of March 31, As of December 31, ​ ​ 2024 ​ 2023 Total consumer loans ​ $ 162,196 ​ $ 159,738 Allowance for loan losses ​ $ 564 ​ $ 765 Impaired loans individually evaluated for impairment ​ $ 2,041 ​ $ 1,565 Specific reserve against impaired loans ​ $ 554 ​ $ 562 Other loans collectively evaluated for allowance ​ $ 160,155 ​ $ 158,173 General allowance for loan losses ​ $ 10 ​ $ 203 ​ As of March 31, 2024 and December 31, 2023, the total principal outstanding for consumer loans on nonaccrual status was $ 2,041 and $ 1,565 , respectively. A detailed aging of consumer loans receivable that are past due is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of March 31, ​ As of December 31, ​ ​ ​ 2024 ​ % ​ 2023 ​ % Total consumer loans receivable ​ $ 162,196 100.0 $ 159,738 100.0 Past due consumer loans: ​ ​ 31 - 60 days past due ​ $ 1,696 1.0 ​ $ 624 0.4 61 - 90 days past due ​ 357 0.2 ​ 149 0.1 91 - 120 days past due ​ 414 0.3 ​ 123 0.1 Greater than 120 days past due ​ 1,892 1.2 ​ 1,449 0.9 Total past due ​ $ 4,359 2.7 ​ $ 2,345 1.5 ​ ​ We evaluate the credit quality of our consumer loan portfolio based on the aging status of the loan and by payment activity. Loan delinquency reporting generally is based on borrower payment activity relative to the contractual terms of the loan. The following table disaggregates the outstanding principal balance of consumer loans receivable by credit quality indicator based on delinquency status and fiscal year of origination: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year of Origination ​ ​ 2024 ​ 2023 ​ 2022 ​ 2021 ​ 2020 ​ Prior ​ Total ​ % of Portfolio < 30 days past due ​ $ 7,224 ​ $ 30,879 ​ $ 24,317 ​ $ 21,050 ​ $ 12,713 ​ $ 61,654 ​ $ 157,837 ​ % 97.3 30-90 days past due ​ ​ — ​ ​ 509 ​ ​ 311 ​ ​ 429 ​ ​ 316 ​ ​ 489 ​ ​ 2,054 ​ ​ 1.3 > 90 days past due ​ ​ — ​ ​ 155 ​ ​ 165 ​ ​ 546 ​ ​ 110 ​ ​ 1,329 ​ ​ 2,305 ​ ​ 1.4 Total ​ $ 7,224 ​ $ 31,543 ​ $ 24,793 ​ $ 22,025 ​ $ 13,139 ​ $ 63,472 ​ $ 162,196 ​ % 100.0 ​ ​ ​ ​ 13 Table of Contents LEGACY HOUSING CORPORATION NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (dollars in thousands) ​ 4. NOTES RECEIVABLE FROM MOBILE HOME PARKS The notes receivable from mobile home parks (“MHP Notes”) relate to mobile homes sold to mobile home parks and financed through notes receivable. The MHP Notes have varying maturity dates and require monthly principal and interest payments. The interest rate on the MHP Notes can be fixed or variable, and the interest rates range from 6.9 % to 12.5 %, excluding the Default Loans defined below. The average interest rate per loan, excluding the Default Loans below, was approximately 8.0 % as of March 31, 2024 and December 31, 2023, with maturities that range from 1 to 10 years . The collateral underlying the MHP Notes are individual mobile homes which can be repossessed and resold. The MHP Notes are generally personally guaranteed by borrowers with substantial financial resources. As of March 31, 2024, the Company had concentrations of MHP Notes with three independent third-parties and their respective affiliates that equated to 24.0 %, 17.2 % and 13.4 % of the principal balance outstanding, all of which was secured by the mobile homes. As of December 31, 2023, the Company had concentrations of MHP Notes with three independent third-parties and their respective affiliates that equated to 24.5 %, 17.9 % and 14.0 % of the principal balance outstanding, all of which was secured by the mobile homes. MHP Notes are stated at amounts due from customers, net of allowance for loan losses. The Company determines the allowance by considering several factors, including the aging of the past due balance, the customer’s payment history, and the Company’s previous loss history. The Company establishes an allowance composed of specific and general reserve amounts. As of March 31, 2024 and December 31, 2023, the MHP Notes balance is presented net of unamortized finance fees of $ 1 ,257 and $ 1,565 , respectively. The finance fees are amortized over the life of the MHP Notes. As of March 31, 2024 and December 31, 2023 there were past due balances of $ 262 and $ 98 , respectively, on the MHP Notes excluding the Default Loans, as defined below. For the three months ended March 31, 2024 and 2023, there were no charge offs recorded for MHP Notes. Allowance for loan loss for the MHP Notes was $ 616 and $ 735 as of March 31, 2024 and December 31, 2023, respectively. As of March 31, 2024 and December 31, 2023, there was a minimal impaired balance of MHP Notes. Collateral for repossessed loans is acquired through foreclosure or similar proceedings and is recorded at the estimated fair value of the home, less the costs to sell. Approximately $ 54 million of MHP Notes and Other notes receivable is with borrowers either owned or operated by one individual. Approximately $ 36 million of these notes currently is in default (the “Default Loans”) and is the subject of ongoing litigation in which the Company is the plaintiff. These notes are collateralized by mobile homes and land and are personally guaranteed by multiple borrowers. The Company evaluated the recoverability of these notes as of March 31, 2024 and determined a provision for expected loan losses is not deemed necessary based on the analysis of the underlying collateral. The Company accelerated the Default Loans at the end of January, 2024. Upon acceleration, the loans accrue interest at a rate of 17.5 % and are due on demand. At March 31, 2024 the Default Loans are presented on the accompanying balance sheets under the heading Current assets, with $ 26 million in Current portion of notes receivable from mobile home parks (“MHP”) and $ 10 million in Current portion of other notes receivable. During the three months ended March 31, 2024, the Company foreclosed on property and homes of $ 2.3 million that is included on the accompanying balance sheets in Property, plant and equipment, net. 14 Table of Contents LEGACY HOUSING CORPORATION NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (dollars in thousands) ​ Notes receivable from mobile home parks, net of allowance for loan losses and deferred financing fees, consisted of the following at March 31, 2024 and December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of March 31, ​ As of December 31, ​ ​ 2024 ​ 2023 Outstanding principal balance ​ $ 184,435 ​ $ 184,280 Loan discount and deferred financing fees ​ ​ ( 1,257 ) ​ ​ ( 1,565 ) Allowance for loan losses ​ ( 616 ) ​ ( 735 ) Total ​ $ 182,562 ​ $ 181,980 ​ The following table presents a detail of the activity in the allowance for loan losses for the three months ended March 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended March 31, ​ Three months ended March 31, ​ ​ 2024 ​ 2023 Allowance for loan losses, beginning of period ​ $ 735 ​ $ — Provision for loan losses ​ ​ ( 119 ) ​ ​ 205 Charge offs (recoveries) ​ — ​ — Allowance for loan losses, end of period ​ $ 616 ​ $ 205 ​ The following table presents impaired and general reserve for allowance for loan losses at March 31, 2024 and December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of March 31, ​ As of December 31, ​ ​ 2024 ​ 2023 Total MHP loans ​ $ 184,435 ​ $ 184,280 Allowance for loan losses ​ ​ 616 ​ ​ 735 Impaired loans individually evaluated for impairment ​ ​ 29,884 ​ ​ 31,215 Specific reserve against impaired loans ​ ​ 5 ​ ​ 5 Other loans collectively evaluated for allowance ​ 154,552 ​ 153,065 General allowance for loan losses ​ ​ 611 ​ ​ 730 ​ We evaluate the credit quality of our MHP portfolio based on the aging status of the loan and by payment activity. Loan delinquency reporting is generally based upon borrower payment activity relative to the contractual terms of the loan. The following table disaggregates the outstanding principal balance of MHP receivable by credit quality indicator based on delinquency status and fiscal year of origination and is presented as of March 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year of Origination ​ ​ 2024 ​ 2023 ​ 2022 ​ 2021 ​ 2020 ​ Prior ​ Total ​ % of Portfolio < 30 days past due ​ $ 6,247 ​ $ 44,028 ​ $ 46,610 ​ $ 25,829 ​ $ 31,134 ​ $ 3,855 ​ $ 157,703 ​ % 85.5 30-90 days past due ​ ​ — ​ ​ 11,950 ​ ​ 4,340 ​ ​ 8,328 ​ ​ 1,948 ​ ​ — ​ ​ 26,566 ​ ​ 14.4 > 90 days past due ​ ​ — ​ ​ 120 ​ ​ 46 ​ ​ — ​ ​ — ​ ​ — ​ ​ 166 ​ ​ 0.1 Total ​ $ 6,247 ​ $ 56,098 ​ $ 50,996 ​ $ 34,157 ​ $ 33,082 ​ $ 3,855 ​ $ 184,435 ​ % 100 ​ ​ ​ ​ ​ 15 Table of Contents LEGACY HOUSING CORPORATION NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (dollars in thousands) ​ 5. OTHER NOTES RECEIVABLE Other notes receivable relate to notes issued to mobile home park owners and dealers and are not directly tied to the sale of mobile homes. These other notes have varying maturity dates and generally require monthly principal and interest payments. They are collateralized by mortgages on real estate, mobile homes that we have financed for which the borrower uses as offices, as well as vehicles. These notes typically are personally guaranteed by the borrowers. The interest rates on the other notes generally are fixed and range from 5.00 % to 17.90 %. The Company reserves for estimated losses on the other notes based on current economic conditions that may affect the borrower’s ability to pay, the borrower’s financial strength, and historical loss experience. As of March 31, 2024 and December 31, 2023 there were past due balances of $ 286 and $ 22 , respectively, on the other notes excluding the Default Loans, as defined below. For the three months ended March 31, 2024 and 2023, there were no charge offs recorded for other notes. Allowance for loan loss for the other notes was $ 176 and $ 236 as of March 31, 2024 and December 31, 2023, respectively. As of March 31, 2024 and December 31, 2023, the impaired balance of other notes was $ 76 and $ 84 , respectively. Collateral for repossessed loans is acquired through foreclosure or similar proceedings and is recorded at the estimated fair value of the home, less the costs to sell. Approximately $ 54 million of MHP Notes and Other notes receivable is with borrowers either owned or operated by one individual. Approximately $ 36 million of these notes currently is in default (the “Default Loans” as defined in Note 4 above) and is the subject of ongoing litigation in which the Company is the plaintiff. These notes are collateralized by mobile homes and land and are personally guaranteed by multiple borrowers. The Company evaluated the recoverability of these notes as of March 31, 2024 and determined a provision for expected loan losses is not deemed necessary based on the analysis of the underlying collateral. The Company accelerated the Default Loans at the end of January, 2024. Upon acceleration, the loans accrue interest at a rate of 17.5 % and are due on demand. At March 31, 2024 the Default Loans are presented on the accompanying balance sheets under the heading Current assets, with $ 26 million in Current portion of notes receivable from mobile home parks (“MHP”) and $ 10 million in Current portion of other notes receivable. During the three months ended March 31, 2024, the Company foreclosed on property and homes of $ 2.3 million that is included on the accompanying balance sheets in Property, plant and equipment, net. Other notes receivable, net of allowance for loan losses and deferred financing fees, consisted of the following at March 31, 2024 and December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ As of March 31, As of December 31, ​ ​ 2024 ​ 2023 Outstanding principal balance ​ $ 30,694 ​ $ 35,353 Loan discount and deferred financing fees ​ ​ ( 323 ) ​ ​ ( 527 ) Allowance for loan losses ​ ( 176 ) ​ ( 236 ) Total ​ $ 30,195 ​ $ 34,590 ​ ​ The following table presents a detail of the activity in the allowance for loan losses for the three months ended March 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended March 31, ​ Three months ended March 31, ​ ​ 2024 ​ 2023 Allowance for loan losses, beginning of period ​ $ 236 ​ $ — Provision for loan losses ​ ​ ( 60 ) ​ ​ 433 Charge offs (recoveries) ​ — ​ — Allowance for loan losses, end of period ​ $ 176 ​ $ 433 16 Table of Contents LEGACY HOUSING CORPORATION NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (dollars in thousands) ​ ​ The following table presents impaired and general reserve for allowance for loan losses at March 31, 2024 and December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of March 31, ​ As of December 31, ​ ​ 2024 ​ 2023 Total Other notes receivable ​ $ 30,694 ​ $ 35,353 Allowance for loan losses ​ ​ 176 ​ ​ 236 Impaired loans individually evaluated for impairment ​ ​ 24,609 ​ ​ 25,135 Specific reserve against impaired loans ​ ​ 76 ​ ​ 84 Other notes receivable collectively evaluated for allowance ​ 6,085 ​ 10,218 General allowance for loan losses ​ ​ 100 ​ ​ 152 ​ We evaluate the credit quality of our Other notes receivable portfolio based on the aging status of the loan and by payment activity. Loan delinquency reporting is generally based upon borrower payment activity, relative to the contractual terms of the loan. The following table disaggregates the outstanding principal balance of Other notes receivable by credit quality indicator based on delinquency status and fiscal year of origination and is presented as of March 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year of Origination ​ ​ 2024 ​ 2023 ​ 2022 ​ 2021 ​ 2020 ​ Prior ​ Total ​ % of Portfolio < 30 days past due ​ $ — ​ $ 17,493 ​ $ 466 ​ $ — ​ $ 300 ​ $ 101 ​ $ 18,360 ​ % 59.8 30-90 days past due ​ ​ — ​ ​ 11,274 ​ ​ 229 ​ ​ 183 ​ ​ — ​ ​ — ​ ​ 11,686 ​ ​ 38.1 > 90 days past due ​ ​ — ​ ​ — ​ ​ — ​ ​ 648 ​ ​ — ​ ​ — ​ ​ 648 ​ ​ 2.1 Total ​ $ — ​ $ 28,767 ​ $ 695 ​ $ 831 ​ $ 300 ​ $ 101 ​ $ 30,694 ​ % 100.0 ​ ​ ​ ​ 6. DEALER FINANCED RECEIVABLES Dealer finance receivable are receivables for loans that we make to independent retailers, or dealers, for the purchase of mobile homes so that dealers can then market them for sale to consumers. The loans are part of our inventory finance program. In late 2022 and early 2023, the Company transitioned many of its dealers from a traditional consignment arrangement to an inventory finance arrangement. The terms of the financing typically include a three year term, a monthly interest payment, an annual curtailment payment and require the retailer to pay the principal amount of the loan to the Company upon the earlier of the sale of the home by the retailer to its customer or the end of the term. Dealer financed notes receivable, net of allowance for loan losses and deferred financing fees, consisted of the following at March 31, 2024 and December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of March 31, ​ As of December 31, ​ ​ 2024 ​ 2023 Outstanding principal balance ​ $ 34,207 ​ $ 32,980 Loan discount and deferred financing fees ​ ​ — ​ ​ — Allowance for loan losses ​ ( 166 ) ​ ( 442 ) Total ​ $ 34,041 ​ $ 32,538 ​ 17 Table of Contents LEGACY HOUSING CORPORATION NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (dollars in thousands) ​ The following table presents a detail of the activity in the allowance for loan losses for the three months ended March 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended March 31, ​ Three months ended March 31, ​ ​ 2024 ​ 2023 Allowance for loan losses, beginning of period ​ $ 442 ​ $ 13 Provision for loan losses ​ ​ ( 276 ) ​ ​ 260 Charge offs (recoveries) ​ — ​ — Allowance for loan losses, end of period ​ $ 166 ​ $ 273 ​ The dealer financed loan portfolio was established primarily in late 2022 and 2023 as a result of converting from consignment arrangements with dealers to inventory finance arrangements with dealers. As such, there is relatively little historical data to measure credit quality of the loans in this portfolio. ​ ​ 7. LEASES The Company currently has 13 operating leases, eight of which are for the Company’s Heritage Housing and Tiny Homes retail locations, three are subleased by the Company and two are for corporate and administrative offices in Bedford, TX and Norcross, GA. These leases typically have initial terms ranging from 5 to 10 years and include one or more options to renew. Under ASC 842, the Company elected the modified retrospective approach, applying the new standard to all leases at the date of initial application. The Company adopted the new standard on January 1, 2022. We determine if an arrangement is or contains a lease at inception. Operating leases are right-of-use (“ROU”) assets and are shown as ROU assets – operating leases on our balance sheets. The lease liabilities are shown as Operating lease obligation and Operating lease obligation, less current portion on our balance sheets. ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. We have elected the practical expedient to not separate lease and non-lease components. Therefore, lease payments included in the measurement of the lease liability include all fixed payments in the lease arrangement. We record a ROU asset for an amount equal to the lease liability, increased for any prepaid lease costs and initial direct costs and reduced by any lease incentives. We remeasure the lease liability and ROU asset when a change to our future minimum lease payments occurs. Key assumptions and judgments included in the determination of the lease liability include the discount rate used in the present value calculation and the exercise of renewal options. Many of our leases contain renewal options. As the exercise of the renewal options is not likely at the commencement of a lease, we generally do not include the option periods in the lease term when determining the lease liabilities and ROU assets. We remeasure the lease liability and ROU asset when it is reasonably likely that we will exercise a renewal option. Our leases do not provide information about the rate implicit in the lease. Therefore, we utilize an incremental borrowing rate to calculate the present value of our future lease obligations. The incremental borrowing rate represents the rate of interest we would otherwise pay on a collateralized borrowing, for an amount equal to the lease payments, over a similar term and in a similar economic environment. As of March 31, 2024, the remaining weighted-average lease term is 3.80 years and the weighted-average discount rate is 2.10 %. 18 Table of Contents LEGACY HOUSING CORPORATION NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (dollars in thousands) ​ We consider lease payments that cannot be predicted with reasonable certainty upon lease commencement to be variable lease payments, which are recorded as incurred each period and are excluded from our calculation of lease liabilities. There were no variable lease costs for the year ended March 31, 2024. Short-term leases, those with a term of 12 months or less, are not recorded on our balance sheet. Our short-term lease costs were not material for the year ended March 31, 2024. Lease expense for operating leases consists of fixed lease payments recognized on a straight-line basis over the lease term plus variable lease payments as incurred. Amortization of the ROU asset for operating leases reflects amortization of the lease liability, any differences between straight-line expense and related lease payments during the accounting period, and any impairments. As of March 31, 2024, present value of future lease payments under our operating lease liabilities were as follows: ​ ​ ​ ​ ​ 2024 $ 373 2025 ​ 494 2026 ​ 431 2027 ​ 345 2028 ​ 145 Thereafter ​ — Total lease payments ​ $ 1,788 Less amount representing interest ​ ​ ( 40 ) Total lease liability ​ $ 1,748 Less current lease liability ​ ​ ( 474 ) Total non-current lease liability ​ $ 1,274 ​ ​ 8. INVENTORIES Inventories consisted of the following at March 31, 2024 and December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ As of March 31, As of December 31, ​ ​ 2024 ​ 2023 Raw materials ​ $ 12,377 ​ $ 13,506 Work in progress ​ 471 ​ 552 Finished goods ​ ​ 30,129 ​ ​ 26,911 Total ​ $ 42,977 ​ $ 40,969 ​ Finished goods expected to be held for more than twelve months is classified as long-term and represented $ 8,727 and $ 7,793 as of March 31, 2024 and December 31, 2023, respectively. The Company has an inventory allowance of $ 527 and $ 439 as of March 31, 2024 and December 31, 2023, respectively, for finished goods expected to be held for more than twelve months. ​ ​ 19 Table of Contents LEGACY HOUSING CORPORATION NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (dollars in thousands) ​ 9. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consisted of the following at March 31, 2024 and December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ As of March 31, As of December 31, ​ ​ 2024 ​ 2023 Land ​ $ 17,287 ​ $ 14,953 Buildings and leasehold improvements ​ 13,578 ​ 13,419 Construction in Progress ​ ​ 12,010 ​ ​ 11,576 Vehicles ​ 1,571 ​ 1,571 Machinery and equipment ​ 6,772 ​ 6,527 Furniture and fixtures ​ 336 ​ 329 Total ​ 51,554 ​ 48,375 Less accumulated depreciation ​ ( 10,794 ) ​ ( 10,495 ) Total property, plant and equipment ​ $ 40,760 ​ $ 37,880 ​ Depreciation expense was $ 403 with $ 158 included as a component of cost of product sales for the three months ended March 31, 2024, and $ 270 with $ 126 included as a component of cost of product sales for the three months ended March 31, 2023. 10. OTHER ASSETS Other assets consisted of the following at March 31, 2024 and December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ As of March 31, As of December 31, ​ ​ 2024 ​ 2023 Prepaid rent ​ $ 349 ​ $ 349 Other ​ 7 ​ 7 Repossessed homes ​ 2,940 ​ 2,215 Total ​ $ 3,296 ​ $ 2,571 ​ ​ ​ ​ 20 Table of Contents LEGACY HOUSING CORPORATION NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (dollars in thousands) ​ 11. ACCRUED LIABILITIES Accrued liabilities consisted of the following at March 31, 2024 and December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ As of March 31, As of December 31, ​ ​ 2024 ​ 2023 Warranty reserve ​ $ 3,314 ​ $ 2,910 Litigation reserve ​ 610 ​ 990 Payroll ​ ​ 845 ​ ​ 879 Portfolio taxes and title ​ 2,359 ​ 2,234 Property tax ​ ​ 364 ​ ​ 1,018 Dealer rebates ​ ​ 879 ​ ​ 1,040 Sales tax ​ 251 ​ 190 Federal and state income taxes ​ 7,137 ​ 3,759 Other ​ 4,002 ​ 5,484 Total accrued liabilities ​ $ 19,761 ​ $ 18,504 ​ ​ 12. 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 and all escrow accounts associated with the 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 March 31, 2024, interest expense for the under the Revolver was $ 2 76, and for the three months ended March 31, 2023, interest expense under the prior line of credit was $ 91 . The outstanding balance of the Revolver as of March 31, 2024 and December 31, 2023 was $ 11,797 and $ 23,680 , respectively. The interest rate in effect as of March 31, 2024 and December 31, 2023 for the Revolver was 7.67 % and 7.95 %, respectively. The amount of available credit under the Revolver was $ 38,203 and $ 26,320 as of March 31, 2024 and December 31, 2023, respectively. The Revolver requires the Company to comply with certain financial and non-financial covenants. As of March 31, 2024, 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. ​ 13. SHARE-BASED COMPENSATION Pursuant to the Legacy Housing Corporation 2018 Incentive Compensation Plan (the “Plan”), the Company may issue up to 10.0 million equity awards to employees, directors, consultants and nonemployee service providers in the form of stock options, stock, restricted stock and stock appreciation rights. Stock options may be granted with a contractual life of up to ten years . At March 31, 2024, the Company had 8.7 million shares available for grant under the Plan. 21 Table of Contents LEGACY HOUSING CORPORATION NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (dollars in thousands) ​ Restricted Stock The following is a summary of restricted stock award activity for the year ended December 31, 2023 and the three months ended March 31, 2024 (number of units in thousands except per unit data): ​ ​ ​ ​ ​ ​ ​ ​ Number of Units ​ ​ Weighted Average Grant Date Fair Value Per Unit Nonvested, January 1, 2023 ​ 42 ​ $ 6.93 Granted ​ 1 ​ $ 23.26 Vested ​ ( 18 ) ​ $ 14.98 Canceled ​ ( 17 ) ​ $ 13.63 Nonvested, December 31, 2023 ​ 8 ​ $ 17.09 ​ ​ ​ ​ ​ ​ Nonvested, January 1, 2024 ​ 8 ​ $ 17.09 Granted ​ - ​ $ - Vested ​ - ​ $ - Canceled ​ - ​ $ - Nonvested, March 31, 2024 ​ 8 ​ $ 17.09 ​ As of March 31, 2024, approximately 8,000 shares of restricted stock remained unvested. Unrecognized compensation expense related to these restricted stock awards at March 31, 2024 was $ 42 and is expected to be recognized over 0.4 years. Compensation expense for restricted stock awards for the three months ended March 31, 2024 and 2023 was $ 37 and $ 66 , respectively. 22 Table of Contents LEGACY HOUSING CORPORATION NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (dollars in thousands) ​ Stock Options The following is a summary of option award activity for the year ended December 31, 2023 and the three months ended March 31, 2024 (number of units in thousands except per unit data): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of Units Weighted Average Exercise Price Per Unit Weighted Average Grant Date Fair Value Per Unit Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value Outstanding, January 1, 2023 ​ 1,025 ​ $ 40.59 ​ $ 4.99 ​ 9.44 ​ ​ ​ Granted ​ 43 ​ $ 22.94 ​ $ 15.32 ​ 4.70 ​ ​ ​ Exercised ​ ( 6 ) ​ $ 16.01 ​ $ 8.57 ​ — ​ ​ ​ Forfeited ​ ( 56 ) ​ $ 16.01 ​ $ 8.57 ​ — ​ ​ ​ Outstanding, December 31, 2023 ​ 1,006 ​ $ 41.35 ​ $ 5.22 ​ 8.28 ​ $ ​ Exercisable, December 31, 2023 ​ 96 ​ $ 42.18 ​ $ 4.76 ​ 8.44 ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding, January 1, 2024 ​ 1,006 ​ $ 41.35 ​ $ 5.22 ​ 8.28 ​ ​ ​ Granted ​ — ​ $ — ​ $ — ​ - ​ ​ ​ Exercised ​ ( 6 ) ​ $ 16.01 ​ $ 8.57 ​ — ​ ​ ​ Forfeited ​ — ​ $ - ​ $ - ​ — ​ ​ ​ Outstanding, March 31, 2024 ​ 1,000 ​ $ 41.51 ​ $ 5.20 ​ 8.03 ​ $ ​ Exercisable, March 31, 2024 ​ 90 ​ $ 44.00 ​ $ 4.49 ​ 8.44 ​ $ — ​ As of March 31, 2024, approximately 910,000 options remained nonvested. Unrecognized compensation expense related to these options at March 31, 2024 was $ 4,332 and is expected to be recognized over 8.0 years. Compensation expense for stock option awards for the three months ended March 31, 2024 and 2023 was $ 147 and $ 126 , respectively. ​ 14. INCOME TAXES The provision for income tax expense for the three months ended March 31, 2024 and 2023 was $ 3,373 and $ 3,435 respectively. The effective tax rate for the three months ended March 31, 2024 and 2023 was 18.2 % and 17.4 %, respectively. These rates differ from the federal statutory rate of 21 % primarily due to a federal tax credit for the sale of energy efficient homes under the Internal Revenue Code §45L, partially offset by state income taxes. The §45L tax credit was initially established under the Federal Energy Policy Act of 2005 and was extended through December 31, 2032 by the Inflation Reduction Act of 2022. ​ 15. COMMITMENTS AND CONTINGENCIES As of January 1, 2020, the Company instituted a self-insured health benefits plan with a stop-loss policy, which provides medical benefits to employees electing coverage under the plan. The Company estimates and records costs for incurred but not reported medical claims and claim development. This reserve is based on historical experience and other assumptions, some of which are subjective. The Company will adjust its self-insured medical benefits reserve based on actual experience, estimated costs and changes to assumptions. As of March 31, 2024 and December 31, 2023, the Company accrued a $ 253 and $ 242 liability for incurred but not reported claims, respectively. These accrued amounts are included in accrued liabilities on the accompanying balance sheets. 23 Table of Contents LEGACY HOUSING CORPORATION NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (dollars in thousands) ​ The Company is contingently liable under terms of repurchase agreements with financial institutions providing inventory financing for independent retailers of its products. These arrangements, which are customary in the industry, provide for the repurchase of products sold to retailers in the event of default by the retailer. The Company’s obligation under these repurchase agreements ceases upon the purchase of the home by the retail customer. The Company believes that risk of loss is mitigated due to the resale value of the repurchased homes and the fact that the agreements are spread over many retailers. The maximum amount for which the Company was liable under such agreements approximated $ 1,671 and $ 3,030 at March 31, 2024 and December 31, 2023, respectively, without reduction for the resale value of the homes. The Company considers its obligations on current contracts to be immaterial and accordingly has not recorded any reserve for repurchase commitment as of March 31, 2024 and December 31, 2023. Leases. The Company leases facilities under operating leases that typically have 10 year terms. These leases usually offer the Company a right of first refusal that affords the Company the option to purchase the leased premises under certain terms in the event the landlord attempts to sell the leased premises to a third party. Rent expense was $ 159 and $ 182 for the three months ended March 31, 2024 and 2023, respectively. The Company also subleases properties to third parties, ranging from 3-year to 11-year terms with various renewal options. Rental income from the subleased properties was approximately $ 54 and $ 67 for the three months ended March 31, 2024 and 2023, respectively. See Note 7 – Leases, for a schedule of the Company’s future minimum lease commitments. Legal Matters The Company is party to certain legal proceedings that arise in the ordinary course and are incidental to its business. Certain of the claims pending against the Company in these proceedings allege, among other things, breach of contract and warranty, product liability and personal injury. The Company has determined that it is probable that it has some liability related to the claims. The Company has included legal reserves of $ 610 and $ 990 as of March 31, 2024 and December 31, 2023, respectively, in accrued liabilities on the accompanying balance sheets. Although litigation is inherently uncertain, based on past experience and the information currently available, management does not believe that the currently pending and threatened litigation or claims will have a material adverse effect on the Company’s financial position, liquidity or results of operations. However, future events or circumstances currently unknown to management will determine whether the resolution of pending or threatened litigation or claims will ultimately have a material effect on the Company’s financial position, liquidity or results of operations in any future reporting periods. 16. FAIR VALUE MEASUREMENTS The Company accounts for its investments and derivative instruments in accordance with the provisions of Accounting Standards Codification (“ASC”) 820 10, Fair Value Measurement, which among other things provides the framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level I measurement) and the lowest priority to unobservable inputs (Level III measurements). The three levels of fair value hierarchy under ASC 820 10, Fair Value Measurement, are as follows: Level I Quoted prices are available in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. ​ Level II Significant observable inputs other than quoted prices in active markets for which inputs to the valuation methodology include: (1) Quoted prices for similar assets or liabilities in active markets; (2) Quoted prices for identical or similar assets or liabilities in inactive markets; (3) Inputs other than quoted prices that are observable; and (4) Inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specified (contractual) term, the Level II input must be observable for substantially the full term of the asset or liability. 24 Table of Contents LEGACY HOUSING CORPORATION NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (dollars in thousands) ​ ​ Level III Significant unobservable inputs that reflect an entity’s own assumptions that market participants would use in pricing the assets or liabilities. The asset or liability fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The Company’s financial instruments consist primarily of cash, accounts receivable, consumer loans, MHP Notes, other notes, accounts payable, and lines of credit. The carrying amounts of cash, accounts receivable, and accounts payable approximate their respective fair values because of the short-term maturities or expected settlement dates of these instruments. This is considered a Level I valuation technique. The lines of credit, part of the MHP Notes and part of the other notes receivables have variable interest rates that reflect market rates and their fair value approximates their carrying value. This is considered a Level II valuation technique. The Company also assessed the fair value of the consumer loans receivable, the fixed rate MHP Notes and the portion of other note receivables with fixed rates based on the discounted value of the remaining principal and interest cash flows. This is considered a Level III valuation technique. The following table shows the fair market value and book value of these portfolios as of March 31, 2024 and December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of March 31, ​ As of December 31, ​ ​ 2024 ​ 2023 Consumer loan portfolio, fair value ​ $ 157,590 ​ $ 155,146 Consumer loan portfolio, book value ​ 159,185 ​ 156,499 Fixed rate MHP Notes, fair value ​ ​ 150,269 ​ 176,270 Fixed rate MHP Notes, book value ​ ​ 156,278 ​ 178,724 Fixed rate other notes, fair value ​ ​ 22,313 ​ 34,340 Fixed rate other notes, book value ​ ​ 22,816 ​ 34,590 ​ ​ ​ ​ 25 Table of Contents LEGACY HOUSING CORPORATION NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (dollars in thousands) ​ 17. EARNINGS PER SHARE Basic earnings per common share (“EPS”) is computed based on the weighted-average number of common shares outstanding during the reporting period. Basic weighted average common shares outstanding do not include shares of restricted stock that have not yet vested, although such shares are included as outstanding shares in the Company’s balance sheets. Diluted EPS is based on the weighted-average number of common shares outstanding plus the number of additional shares that would have been outstanding had the dilutive common shares been issued. The following table reconciles the numerators and denominators used in the computations of both basic and diluted EPS. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ ​ March 31, ​ ​ 2024 2023 Numerator: ​ ​ ​ ​ ​ ​ Net income (in 000's) ​ $ 15,140 ​ $ 16,276 Denominator: ​ ​ ​ ​ ​ ​ Basic weighted-average common shares outstanding ​ ​ 24,393,003 ​ ​ 24,374,677 Effect of dilutive securities: ​ ​ ​ ​ ​ ​ Restricted stock grants ​ ​ 6,135 ​ ​ 13,383 Stock options ​ ​ 725,878 ​ ​ 789,442 Diluted weighted-average common shares outstanding ​ ​ 25,125,016 ​ ​ 25,177,502 Earnings per share attributable to Legacy Housing Corporation ​ ​ ​ ​ ​ ​ Basic ​ $ 0.62 ​ $ 0.67 Diluted ​ $ 0.60 ​ $ 0.65 ​ ​ ​ 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. We repurchased 91,187 shares for $ 1.9 million in the open market during the three months ended March 31, 2024. As of March 31, 2024, we had a remaining authorization of approximately $ 8.1 million. Between April 1, 2024 and May 9, 2024, we repurchased 170,342 shares for $ 3.5 million in the open market. ​ ​ 18. RELATED PARTY TRANSACTIONS Bell Mobile Homes (“Bell”), a retailer owned by one of the Company’s significant stockholders, purchases manufactured homes from the Company. Accounts receivable balances due from Bell were $ 189 and $ 403 as of March 31, 2024 and December 31, 2023, respectively. Accounts payable balances due to Bell were $ 43 and $ 18 as of March 31, 2024 and December 31, 2023, respectively. Home sales to Bell were $ 1,119 and $ 479 for the three months ended March 31, 2024 and 2023, respectively. Shipley Bros., Ltd. And Crazy Red’s Mobile Homes (together, “Shipley”), retailers owned by one of the Company’s significant shareholders, purchase manufactured homes from the Company. Accounts receivable balances due from Shipley were $ 0 and $ 143 as of March 31, 2024 and December 31, 2023, respectively. Accounts payable balances due to Shipley were $ 15 and $ 67 as of March 31, 2024 and December 31, 2023. Home sales to Shipley were $ 299 and $ 632 for the three months ended March 31, 2024 and 2023, respectively. At March 31, 2024, the Company had a receivable of $ 1 from a principal shareholder. This amount is included in the Company’s accounts receivable balance as of March 31, 2024. ​ 26 Table of Contents LEGACY HOUSING CORPORATION NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) (dollars in thousands) ​ 19. SUBSEQUENT EVENTS In connection with the preparation of these financial statements, we evaluated subsequent events after the balance sheet date of March 31, 2024 and through the date of this filing and determined that no events occurred that would require adjustments or disclosures in the financial statements except those listed below. 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. We repurchased 91,187 shares for $ 1.9 million in the open market during the three months ended March 31, 2024. As of March 31, 2024, we had a remaining authorization of approximately $ 8.1 million. Between April 1, 2024 and May 9, 2024, we repurchased 170,342 shares for $ 3.5 million in the open market. ​ ​ 27 Table of Contents