What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-11-12 compared with 2024-08-08 · 98 added, 84 removed, 149 unchanged (55% of the section changed)

4 unchanged sentences

We build, sell and finance manufactured homes and “tiny houses” that are distributed through a network of independent retailers and company owned stores and also sold directly to manufactured home communities.

We are the fourth largest producer of manufactured homes in the United States as ranked by the number of homes manufactured based on information available from the Manufactured Housing Institute and the Institute for Building Technology and Safety for the twelve month period ending December 31, 2023.

We are the sixth largest producer of manufactured homes in the United States as ranked by the number of homes manufactured based on information available from the Manufactured Housing Institute and the Institute for Building Technology and Safety for the six month period ending June 30, 2024.

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 and 1 to 3 1/2 bathrooms.

Our homes range in price, at retail, from approximately $33,000 to $180,000.

For the three and six months ended June 30, 2024, we sold 578 and 1,223 home sections, respectively (which are entire modules or single floors).

For the three and six months ended June 30, 2023, we sold 793 and 1,603 home sections, respectively

For the three and nine months ended September 30, 2024, we sold 549 and 1,772 home sections, respectively (which are entire modules or single floors).

For the three and nine months ended September 30, 2023, we sold 643 and 2,246 home sections, respectively

The Company has one reportable segment.

10 unchanged sentences

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, as of June 30, 2024, are sold to consumers, primarily in over 15 states through a network of independent retail locations, 13 company owned retail locations and through direct sales to owners of manufactured home communities.

Our homes are marketed under our premier “Legacy” brand name and, as of September 30, 2024, are sold to consumers, primarily in over 15 states through a 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 11 Heritage Housing stores and two Tiny House Outlet stores, exclusively sell our homes.

For the six months ended June 30, 2024, approximately 49% of our manufactured homes were sold in Texas, followed by 12% in North Carolina, 9% in Georgia, 7% in Oklahoma, and 4% in Michigan.

For the six months ended June 30, 2023, approximately 48% of our manufactured homes were sold in Texas, followed by 19% in Georgia, 7% in Louisiana, 4% in Florida, and 3% in Oklahoma.

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.

For the nine months ended September 30, 2023, approximately 49% of our manufactured homes were sold in Texas, followed by 15% in Georgia, 9% in Louisiana, 4% in Oklahoma, and 3% in Florida.

We offer three types of financing solutions to our customers.

6 unchanged sentences

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 purchased several properties in our market area for the purpose of developing manufactured housing communities and subdivisions.

As of June 30, 2024, these properties include the following (dollars in thousands):

● We have acquired several properties in our market area for the purpose of developing manufactured housing communities and subdivisions.

As of September 30, 2024, these properties include the following (dollars in thousands):

Date of Acquisition

9 unchanged sentences

February 2021

Richland, Mississippi (1)

February, 2024

Beaumont, Texas (1)

(1) Land and improvement values for Richland and Beaumont properties do not include the value of Company owned homes located in these communities.

● We also expect to provide financing solutions to owners of manufactured housing communities 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.

11 unchanged sentences

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 June 30, 2024 and 2023 (in thousands)

Comparison of Three Months ended September 30, 2024 and 2023 (in thousands)

Three months ended

September 30,

Product sales

3 unchanged sentences

Cost of product sales

Cost of other sales

Selling, general administrative expenses

9 unchanged sentences

Product sales primarily consist of direct sales, commercial sales, inventory finance sales and retail store sales.

Product sales decreased $10.7 million, or 25.2%, during the three months ended June 30, 2024 as compared to the same period in 2023.

This decrease was driven by an industry wide decrease in unit volumes shipped, primarily in direct sales, mobile home park sales and inventory finance sales categories.

Net revenue attributable to our factory-built housing consisted of the following during the three months ended June 30, 2024 and 2023:

Product sales decreased $6.8 million, or 18.5%, during the three months ended September 30, 2024 as compared to the same period in 2023.

This decrease was driven by a decrease in unit volumes shipped, primarily in direct sales, mobile home park sales and inventory finance sales categories.

Net revenue attributable to our factory-built housing consisted of the following during the three months ended September 30, 2024 and 2023:

Three months ended

September 30,

(in thousands)

2 unchanged sentences

Net revenue per unit sold

For the three months ended June 30, 2024, our net revenue per product sold decreased primarily due to a shift in product mix to smaller units.

We had decreases in direct sales, commercial sales and inventory finance sales, partially offset by an increase in retail store sales and other product sales.

Direct sales decreased $0.4 million, or 10.1% during the three months ended June 30, 2024 as compared to the same period in 2023.

Commercial sales decreased $4.6 million, or 29.2% during the three months ended June 30, 2024 as compared to the same period in 2023.

Inventory finance sales to dealers decreased $6.5 million, or 41.6% during the three months ended June 30, 2024 as compared to the same period in 2023.

Retail store sales increased $0.2 million, or 3.7% during the three months ended June 30, 2024 as compared to the same period in 2023.

Our revenue has decreased primarily due to a lower volume of shipments, a shift in product mix generally to smaller units and a slowdown in our dealer and mobile home park sales.

Our current business is dependent

on dealer sales, as reflected in direct sales and inventory finance sales, and our sales have slowed due to high levels of inventory on dealer lots and seasonality.

Our retail sales have improved as we have focused on improving the performance of our company owned stores.

For the three months ended September 30, 2024 , our net revenue per product sold did not change significantly as compared to the three months ended September 30, 2023.

We had decreases in direct sales, commercial sales, inventory finance sales and other product sales, partially offset by an increase in retail store sales.

Direct sales decreased $0.5 million, or 19.7% during the three months ended September 30, 2024 as compared to the same period in 2023.

Commercial sales decreased $1.6 million, or 11.2% during the three months ended September 30, 2024 as compared to the same period in 2023.

Inventory finance sales to dealers decreased $4.7 million, or 37.8% during the three months ended September 30, 2024 as compared to the same period in 2023.

Retail store sales increased $0.3 million, or 4.8% during the three months ended September 30, 2024 as compared to the same period in 2023.

Our revenue has decreased

primarily due to a lower volume of shipments, a shift in product mix generally to smaller units and a slowdown in our dealer and mobile home park sales.

Our current business is dependent on dealer sales, as reflected in direct sales and inventory finance sales, and our sales have slowed due to high levels of inventory on dealer lots.

Our retail sales have improved as we have focused on the performance of our company owned stores.

Our mobile home park business has been impacted by higher interest rates, and transaction volumes and new development have declined.

Consumer, MHP and dealer loans interest income increased $1.4 million, or 16.0%, during the three months ended June 30, 2024 as compared to the same period in 2023 due to growth in our loan portfolios.

Between June 30, 2024 and June 30, 2023 our consumer loan portfolio increased by $15.8 million, our MHP loan portfolio increased by $16.6 million, and our dealer finance notes increased by $0.9 million.

Other revenue primarily consists of contract deposit forfeitures, consignment fees, commercial lease rents, service fees and other miscellaneous income and decreased $0.8 million, or 45.5%, during the three months ended June 30, 2024 as compared to the same period in 2023.

This decrease was primarily due to a $1.0 million decrease in dealer finance fees, a $0.2 million decrease in commercial lease rents, partially offset by a $0.4 million increase in other miscellaneous revenue.

The cost of product sales decreased $8.2 million, or 27.4%, during the three months ended June 30, 2024 as compared to the same period in 2023.

Consumer, MHP and dealer loans interest income increased $1.5 million, or 17.3%, during the three months ended September 30, 2024 as compared to the same period in 2023 due to growth in our loan portfolios.

Between September 30, 2024 and September 30, 2023 our consumer loan portfolio increased by $15.6 million, our MHP loan portfolio increased by $22.0 million, and our dealer finance notes decreased by $0.7 million.

Other revenue primarily consists of contract deposit forfeitures, consignment fees, commercial lease rents, land sales, service fees and other miscellaneous income and decreased $0.4 million, or 8.7%, during the three months ended September 30, 2024 as compared to the same period in 2023.

This decrease was primarily due to a $2.4 million decrease in forfeited deposits and a $1.0 million decrease in dealer finance fees, partially offset by a $2.7 million increase in land sales and a $0.3 million increase in other miscellaneous revenue.

The cost of product sales decreased $3.5 million, or 13.9%, during the three months ended September 30, 2024 as compared to the same period in 2023.

The decrease in costs is primarily related to the decrease in units sold.

Selling, general and administrative expenses remained flat during the three months ended June 30, 2024 as compared to the same period in 2023.

We had a $0.8 million decrease in warranty costs and a $0.7 million decrease in payroll and related expense, a $0.2 million decrease in bad debt expense, offset by a $0.8 million increase in legal expense, a $0.4 million increase in property tax expense a $0.2 million increase in loan loss provision, and a $0.1 million increase in marketing expense and a net $0.2 million in other miscellaneous expense.

Dealer incentive expense decreased $0.6 million during the three months ended June 30, 2024 as compared to the same period in 2023.

Other income (expense) increased $3.2 million, or 538.3%, during the three months ended June 30, 2024 as compared to the same period in 2023.

There was (i) an increase of $2.6 million in miscellaneous income as a result of a gain of $1.3 million on the sale of real property in Georgia and a reversal of $1.3 million of accrued liabilities, (ii) an increase of $0.3 million in other miscellaneous income, and (iii) an increase of $0.3 million in interest income for other notes receivable net of allowances.

Income tax increased $0.5 million during the three months ended June 30, 2024 as compared to the same period in 2023.

The effective tax rate for the three months ended June 30, 2024 and 2023 was 18.2% and 17.0%, respectively, and differs from the federal statutory rate of 21% primarily due to a federal tax credit for energy efficient construction, partially offset by state income taxes.

Comparison of Six Months ended June 30, 2024 and 2023 (in thousands)

Six months ended

The cost of other sales increased $2.0 million during the three months ended September 30, 2024 as compared to the same period in 2023.

The increase in costs is due to the sale of land.

Selling, general and administrative expenses during the three months ended September 30, 2024 remained flat compared to the same period in 2023.

We had a $0.6 million increase in payroll and healthcare expense, a $0.2 million increase in marketing expense, a $0.1 million increase in other miscellaneous expense offset by a $0.3 million decrease in warranty expense, a $0.2 million decrease in loan loss provision and a $0.2 million decrease in bad debt expense and a $0.2 million decrease in professional fees.

Dealer incentive expense decreased $0.5 million during the three months ended September 30, 2024 as compared to the same period in 2023.

Other income (expense) increased $3.5 million, or 781.3%, during the three months ended September 30, 2024 as compared to the same period in 2023.

We had (i) a decrease of $0.8 million decrease in Non-operating interest income primarily as a result of the Settlement Agreement described in Note 4, Notes Receivable from Mobile Home Parks, in these Notes to Condensed Financial Statements (Unaudited) for the quarter ended September 30, 2024, (ii) an increase of $3.9 million in income in Miscellaneous, net also primarily as a result of the Settlement Agreement above, (iii) an increase of $0.4 million in income Miscellaneous, net due to a gain on conversion of inventory finance loans, (iv) a decrease of $0.1 million in Interest expense and (v) an increase of $0.1 million in expense in Miscellaneous, net related to other expenses.

Income tax increased $0.1 million during the three months ended September 30, 2024 as compared to the same period in 2023.

The effective tax rate for the three months ended September 30, 2024 and 2023 was 18.2% and 17.4%, respectively, and differs from the federal statutory rate of 21% primarily due to a federal tax credit for energy efficient construction, partially offset by state income taxes.

Comparison of Nine Months ended September 30, 2024 and 2023 (in thousands)

Nine months ended

September 30,

Product sales

3 unchanged sentences

Cost of product sales

Cost of other sales

Selling, general administrative expenses

9 unchanged sentences

Product sales primarily consist of direct sales, commercial sales, inventory finance sales and retail store sales.

Product sales decreased $23.0 million, or 26.9%, during the six months ended June 30, 2024 as compared to the same period in 2023.

This decrease was driven by an industry wide decrease in unit volumes shipped, primarily in direct sales, mobile home park sales and inventory finance sales categories.

Net revenue attributable to our factory-built housing consisted of the following during six months ended June 30, 2024 and 2023:

Six Months Ended

Product sales decreased $29.9 million, or 24.4%, during the nine months ended September 30, 2024 as compared to the same period in 2023.

This decrease was driven by a decrease in unit volumes shipped, primarily in direct sales, mobile home park sales and inventory finance sales categories.

Net revenue attributable to our factory-built housing consisted of the following during nine months ended September 30, 2024 and 2023:

Nine Months Ended

September 30,

($ in thousands)

2 unchanged sentences

Net revenue per unit sold

For the six months ended June 30, 2024, our net revenue per product sold decreased primarily due to a shift in product mix to smaller units and to a large sale of homes in the first quarter of 2024 from our leased home portfolio to a mobile home park customer at a lower than average price than our typical new home.

We had decreases in direct sales, commercial sales and inventory finance sales, partially offset by an increase in retail store sales and other product sales.

Direct sales decreased $6.0 million, or 53.8% during the six months ended June 30, 2024 as compared to the same period in 2023.

Commercial sales decreased $6.6 million, or 21.0% during the six months ended June 30, 2024 as compared to the same period in 2023.

Inventory finance sales to dealers decreased $11.7 million, or 39.9% during the six months ended June 30, 2024 as compared to the same period in 2023.

Retail store sales increased $1.0 million, or 12.0% during the six months ended June 30, 2024 as compared to the same period in 2023.

For the nine months ended September 30, 2024, our net revenue per product sold decreased primarily due to a shift in product mix to smaller units and to a large sale of homes in the first quarter of 2024 from our leased home portfolio to a mobile home park customer at a lower than average price than our typical new home.

We had decreases in direct sales, commercial sales and inventory finance sales, partially offset by an increase in retail store sales.

Direct sales decreased $6.5 million, or 47.4% during the nine months ended September 30, 2024 as compared to the same period in 2023.

Commercial sales decreased $8.2 million, or 18.0% during the nine months ended September 30, 2024 as compared to the same period in 2023.

Inventory finance sales to dealers decreased $16.4 million, or 39.2% during the nine months ended September 30, 2024 as compared to the same period in 2023.

Retail store sales increased $1.2 million, or 9.1% during the nine months ended September 30, 2024 as compared to the same period in 2023.

Our revenue has decreased primarily due to a lower volume of shipments, a shift in product mix generally to smaller units and a slowdown in our dealer and mobile home park sales.

Our current business is dependent on dealer sales, as reflected in direct sales and inventory finance sales, and our sales have slowed due to high levels of inventory on dealer lots and seasonality.

Our retail sales have

improved as we have focused on improving the performance of our company owned stores.

Our current business is dependent on dealer sales, as reflected in direct sales and inventory finance sales, and our sales have slowed due to high levels of inventory on dealer lots and

Our retail sales have improved as we have focused on the performance of our company owned stores.

Our mobile home park business has been impacted by higher interest rates, and transaction volumes and new development have declined.

Consumer, MHP and dealer loans interest income increased $4.3 million, or 26.5%, during the six months ended June 30, 2024 as compared to the same period in 2023 due to growth in our loan portfolios.

Other revenue primarily consists of contract deposit forfeitures, consignment fees, commercial lease rents, service fees and other miscellaneous income and decreased $1.0 million, or 27.0%, during the six months ended June 30, 2024 as compared to the same period in 2023.

This decrease was primarily due to a $2.0 million decrease in dealer finance fees, a $0.3 million decrease in commercial lease rents, partially offset by a $1.1 million increase in forfeited deposits and a $0.2 million increase in other miscellaneous revenue.

The cost of product sales decreased $16.6 million, or 28.4%, during the six months ended June 30, 2024 as compared to the same period in 2023.

Consumer, MHP and dealer loans interest income increased $5.8 million, or 23.2%, during the nine months ended September 30, 2024 as compared to the same period in 2023 due to growth in our loan portfolios.

Other revenue primarily consists of contract deposit forfeitures, consignment fees, commercial lease rents, land sales, service fees and other miscellaneous income and decreased $1.4 million, or 17.5%, during the nine months ended September 30, 2024 as compared to the same period in 2023.

This decrease was primarily due to a $2.9 million decrease in dealer finance fees, a $1.3 million decrease in forfeited deposits, partially offset by a $2.7 million increase in land sales and a $0.1 million increase in other miscellaneous revenue.

The cost of product sales decreased $20.1 million, or 24.1%, during the nine months ended September 30, 2024 as compared to the same period in 2023.

The decrease in costs is primarily related to the decrease in units sold.

Selling, general and administrative expenses increased $0.5 million, or 4.8%, during the six months ended June 30, 2024 as compared to the same period in 2023.

This increase was primarily due to a $1.0 million increase in legal expense, a $0.5 million increase in property tax expense, a $0.1 million increase in marketing expense, a $0.1 million increase in professional fees, and a net $0.1 million increase in other miscellaneous expense partially offset by a $0.7 million decrease in payroll and related expense, a $0.5 million decrease in warranty costs, and a $0.1 million decrease in loan loss provision.

Dealer incentive expense decreased $0.6 million during the six months ended June 30, 2024 as compared to the same period in 2023.

Other income (expense) increased $3.6 million, or 183.8%, during the six months ended June 30, 2024 as compared to the same period in 2023.

There was (i) an increase of $2.6 million in miscellaneous income as a result of a gain of $1.3 million on the sale of real property in Georgia and a reversal of $1.3 million of accrued liabilities, (ii) an increase of $0.6 million in interest income for other notes receivable net of allowances, (iii) an increase of $0.6 million in other miscellaneous income, and (iii) an increase of $0.2 million in interest expense.

Income tax increased $0.5 million during the six months ended June 30, 2024 as compared to the same period in 2023.

The effective tax rate for the six months ended June 30, 2024 and 2023 was 18.2% and 17.2%, respectively, and differs from the federal statutory rate of 21% primarily due to a federal tax credit for energy efficient construction, partially offset by state income taxes.

The cost of other sales increased $2.0 million during the nine months ended September 30, 2024 as compared to the same period in 2023.

The increase in costs is due to the sale of land.

Selling, general and administrative expenses increased $0.5 million, or 2.8%, during the nine months ended September 30, 2024 as compared to the same period in 2023.

This increase was primarily due to a $0.4 million increase in legal expense, a $0.4 million increase in property tax expense, a $0.4 million increase in marketing expense, a $0.1 million increase in payroll and related expense, and a net $0.4 million increase in other miscellaneous expense partially offset by a $1.0 million decrease in warranty costs and a $0.2 million decrease in loan loss provision.

Dealer incentive expense decreased $1.0 million during the nine months ended September 30, 2024 as compared to the same period in 2023.

Other income (expense) increased $7.1 million, or 296.7%, during the nine months ended September 30, 2024 as compared to the same period in 2023.

We had (i) $0.2 million increase in Non-operating interest income, (ii) a $0.8 million increase in income in Miscellaneous, net as a result of a gain on the sales of real property, (iii) a $1.3 million increase in income in Miscellaneous, net due to a reversal of accrued liabilities, (iv) an increase of $1.1 million in income Miscellaneous, net due to a gain on conversion of inventory finance loans, (v) $0.1 million increase in Interest expense and (vi) a $3.8 million net increase in income in Miscellaneous, net partially as a result of the Settlement Agreement described above,.

Income tax increased $0.6 million during the nine months ended September 30, 2024 as compared to the same period in 2023.

The effective tax rate for the nine months ended September 30, 2024 and 2023 was 18.2% and 17.3%, respectively, and differs from the federal statutory rate of 21% primarily due to a federal tax credit for energy efficient construction, partially offset by state income taxes.

Liquidity and Capital Resources

We believe that cash flow from operations and cash at June 30, 2024, 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.

We believe that cash flow from operations and cash at September 30, 2024, 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.

2 unchanged sentences

We have not incurred any losses from such accounts, and management considers the risk of loss to be minimal.

As of June 30, 2024, we had approximately $0.1 million in cash, compared to $0.7 million as of December 31, 2023.

As of September 30, 2024, we had approximately $0.6 million in cash, compared to $0.7 million as of December 31, 2023.

We consider all cash and highly liquid investments with an original maturity of three months or less to be cash equivalents.

Cash Flow Activities

Six Months Ended

Nine Months Ended

September 30,

(in thousands)

Net cash provided by (used in) operating activities

Net cash provided by investing activities

Net cash (used in) investing activities

Net cash (used in) provided by financing activities

2 unchanged sentences

Cash at end of period

Comparison of Cash Flow Activities from June 30, 2024 to June 30, 2023

Net cash provided by operating activities was $14.3 million during the six months ended June 30, 2024, compared to net cash of $7.5 million used in operating activities during the six months ended June 30, 2023.

Comparison of Cash Flow Activities from September 30, 2024 to September 30, 2023

Net cash provided by operating activities was $28.1 million during the nine months ended September 30, 2024, compared to net cash of $5.3 million used in operating activities during the nine months ended September 30, 2023.

This change was predominantly the result of decreased MHP loan originations net of collections, decreased consumer loan originations net of collections, and decreased dealer inventory loan originations net of collections.

Net cash provided by investing activities of $2.1 million during the six months ended June 30, 2024 was primarily attributable to $4.8 million of collections of loans we made to third parties for the development of manufactured housing parks and $1.6 million in proceeds from the sale of property, offset by $2.6 million used in improvements and development of property, plant and equipment and $1.7 million used to issue notes to third parties for the development of manufactured housing parks.

Net cash provided by investing activities of $3.9 million during the six months ended June 30, 2023 was primarily attributable to $8.5 million received from the sale of treasury notes, $1.1 million received from the sale of leases homes, $0.9 million of collections of loans we made to third parties for the development of manufactured housing parks and $0.2 million of collections from other purchased loans, offset by $5.3 million of loans we made to third parties for the development of manufactured housing parks and $1.5 used in improvements and development of property, plant and equipment.

Net cash used in financing activities of $17.1 million during the six months ended June 30, 2024 was attributable to net payments of $11.8 million on our lines of credit, $5.4 million of stock repurchases and $0.1 million received from the exercise of stock options.

Net cash provided by financing activities of $2.2 million during the six months ended June 30, 2023 was attributable to net proceeds of $2.2 million on our lines of credit.

Net cash used in investing activities of $1.5 million during the nine months ended September 30, 2024 was primarily attributable to $5.8 million of collections of loans we made to third parties for the development of manufactured housing parks, $1.6 million in proceeds from the sale of property and $0.1 million in proceeds from collections of purchased loans, offset by $7.3 million used in improvements and development of property, plant and equipment and $1.7 million used to issue notes to third parties for the development of manufactured housing parks.

Net cash used in investing activities of $7.6 million during the nine months ended September 30, 2023 was primarily attributable to $13.9 million used to issue notes to third parties for the development of manufactured housing parks, $4.6 million used in improvements and development of property, plant and equipment, offset by $8.5 million received from the sale of treasury notes, $1.1 million received from the sale of leases homes, $1.0 million of collections of loans we made to third parties for the development of manufactured housing parks and $0.3 million of collections from other purchased loans.

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, $5.4 million of stock repurchases and $0.2 million received from the exercise of stock options.

Net cash provided by financing activities of $10.6 million during the nine months ended September 30, 2023 was attributable to net proceeds of $10.5 million on our lines of credit and $0.1 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.

We repurchased 170,342 shares for $3.5 million in the open market during the three months ended June 30, 2024, and we repurchased 261,529 shares for $5.4 million in the open market during the six months ended June 30, 2024.

As of June 30, 2024, we had a remaining authorization of

approximately $4.6 million.

We repurchased 1,001 shares for $0.02 million in the open market

during the three months ended September 30, 2024, and we repurchased 262,530 shares for $5.4 million in the open market during the nine months ended September 30, 2024.

As of September 30, 2024, we had a remaining authorization of approximately $14.6 million.

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.

8 unchanged sentences

The Revolver matures July 28, 2027.

For the three months ended June 30, 2024, interest expense under the Revolver was $235, and for the three months ended June 30, 2023, interest expense under the prior line of credit was $195.

For the six months ended June 30, 2024, interest expense under the Revolver was $511, and for the six months ended June 30, 2023, interest expense under the prior line of credit was $285.

The outstanding balance of the Revolver as of June 30, 2024 and December 31, 2023 was $11,861 and $23,680, respectively.

The interest rate in effect as of June 30, 2024 and December 31, 2023 for the Revolver was 7.67% and 7.95%, respectively.

The amount of available credit under the Revolver was $38,139 and $26,320 as of June 30, 2024 and December 31, 2023, respectively.

For the three months ended September 30, 2024, interest expense under the Revolver was $175, and for the three months ended September 30, 2023, interest expense under the Revolver and prior line of credit was $302.

For the nine months ended September 30, 2024, interest expense under the Revolver was $686, and for the nine months ended September 30, 2023, interest expense under the Revolver and prior line of credit was $588.

The outstanding balance of the Revolver as of September 30, 2024 and December 31, 2023 was $2,111 and $23,680, respectively.

The interest rate in effect as of September 30, 2024 and December 31, 2023 for the Revolver was 7.61% and 7.95%, respectively.

The amount of available credit under the Revolver was $47,889 and $26,320 as of September 30, 2024 and December 31, 2023, respectively.

The Revolver requires the Company to comply with certain financial and non-financial covenants.

As of June 30, 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.

As of September 30, 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.

Contractual Obligations

The following table is a summary of contractual cash obligations as of June 30, 2024:

The following table is a summary of contractual cash obligations as of September 30, 2024:

Payments Due by Period (in thousands)

7 unchanged sentences

Our obligation under this repurchase agreement ceases upon the purchase of the home by the retail customer.

The maximum amount of our contingent obligations under such repurchase agreements was approximately $1,040 and $3,030 as of June 30, 2024 and December 31, 2023, respectively, without reduction for the resale value of the homes.

The maximum amount of our contingent obligations under such repurchase agreements was approximately $856 and $3,030 as of September 30, 2024 and December 31, 2023, 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 June 30, 2024.

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, 2024.

Critical Accounting Estimates

4 unchanged sentences

Recent Accounting Pronouncements

For information regarding recent accounting pronouncements, see Note 1 – Nature of Operations, Recent Accounting Pronouncements to our June 30, 2024 Condensed Financial Statements, included in Part I, Item 1, Financial Statements (Unaudited), of this Quarterly Report.

For information regarding recent accounting pronouncements, see Note 1 – Nature of Operations, Recent Accounting Pronouncements to our September 30, 2024 Condensed Financial Statements, included in Part I, Item 1, Financial Statements (Unaudited), of this Quarterly Report.

Emerging Growth Company Status

6 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis