What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-08-07 compared with 2025-05-12 · 165 added, 139 removed, 583 unchanged (34% of the section changed)

12 unchanged sentences

Total current assets

Property, plant and equipment, net

Consumer loans receivable, net

3 unchanged sentences

ROU assets - operating leases

Property, plant and equipment, net

Liabilities and Stockholders' Equity

17 unchanged sentences

Common stock, $ .001 par value, 90,000,000 shares authorized;

24,866,342 and 24,865,906 issued and 24,129,362 and 24,158,311 outstanding at March 31, 2025 and December 31, 2024, respectively

Treasury stock at cost, 736,980 and 707,595 shares at March 31, 2025 and December 31, 2024, respectively

24,866,342 and 24,865,906 issued and 23,868,727 and 24,158,311 outstanding at June 30, 2025 and December 31, 2024, respectively

Treasury stock at cost, 997,615 and 707,595 shares at June 30, 2025 and December 31, 2024, respectively

Additional paid-in-capital

6 unchanged sentences

(in thousands, except share and per share data)

Three months ended March 31,

Three months ended June 30,

Six months ended June 30,

Product sales

28 unchanged sentences

Balances, March 31, 2024

Share based compensation

Purchase of treasury stock

Balances, June 30, 2024

paid-in-capital

3 unchanged sentences

Balances, March 31, 2025

Share based compensation

Purchase of treasury stock

Balances, June 30, 2025

See accompanying notes to unaudited interim condensed financial statements.

2 unchanged sentences

(unaudited, in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Operating activities:

6 unchanged sentences

Gain from sale of assets

Gain on foreclosure of property

Non-cash operating lease expense

20 unchanged sentences

Notes receivable collections

Purchases of loans

Collections from purchased loans

12 unchanged sentences

Cash paid for taxes

Foreclosure of properties related to other notes receivable

See accompanying notes to unaudited interim condensed financial statements.

15 unchanged sentences

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, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025, or any other period.

The results for the three and six months ended June 30, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025, or any other period.

The accompanying balance sheet as of December 31, 2024 was derived from audited financial statements included in the Company's annual report on Form 10-K for the year ended December 31, 2024 (the “Form 10-K”), filed on March 12, 2025.

9 unchanged sentences

Our CODM is the Chief Executive Officer.

The CODM assesses the Company’s operating and financial performance based on net income, total revenue and return on investment.

The CODM assesses the Company’s operating and financial performance based on consolidated net income, total revenue and return on investment.

The measures of profitability and expenses reviewed by the CODM are consistent with the financial statements presented in this filing.

The Company determined that it does not have significant segment expenses.

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.

LEGACY HOUSING CORPORATION

1 unchanged sentence

(dollars in thousands)

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.

Revenue Recognition

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.

12 unchanged sentences

The Company establishes an allowance for doubtful accounts for amounts that are deemed to be uncollectible.

At March 31, 2025, December 31, 2024, and December 31, 2023, the allowance for doubtful accounts totaled $ 763 , $ 578 , and $ 651 , respectively.

At March 31, 2025, December 31, 2024, and December 31, 2023 accounts receivable, net was $ 4,982 , $ 3,985 , and $ 4,656 , respectively.

At June 30, 2025, December 31, 2024, and December 31, 2023, the allowance for doubtful accounts totaled $ 866 , $ 578 , and $ 651 , respectively.

At June 30, 2025, December 31, 2024, and December 31, 2023 accounts receivable, net was $ 4,197 , $ 3,985 , and $ 4,656 , respectively.

Leased Property

6 unchanged sentences

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.

During the three months ended March 31, 2025, the Company sold 26 leased mobile homes for $ 950 to one mobile home park customer which is included in Product sales on the accompanying statements of income.

During the three months ended March 31, 2024, the Company sold 120 leased mobile homes for $ 5,450 to one mobile home park customer which is included in Product sales on the accompanying statements of income.

LEGACY HOUSING CORPORATION

1 unchanged sentence

(dollars in thousands)

Future minimum lease income under all operating leases for each of the next five years at March 31, 2025, is as follows:

Future minimum lease income under all operating leases for each of the next five years at June 30, 2025, is as follows:

Product Warranties

5 unchanged sentences

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, 2025 and 2024:

Three Months Ended March 31,

The following table summarizes activity within the warranty liability for the three and six months ended June 30, 2025 and 2024:

Three Months Ended June 30,

Six Months Ended June 30,

Warranty liability, beginning of period

Product warranty reserve accrued

Product warranty reserve accrued (released)

Warranty costs incurred

17 unchanged sentences

Stock options may be granted with a contractual life of up to ten years .

At March 31, 2025, the Company had 8.7 million shares available for grant under the Plan.

As of March 31, 2025, approximately 1,013,000 options were outstanding, 189,000 options were exercisable, and 824,000 options remained nonvested.

Unrecognized compensation expense related to these options at March 31, 2025 was $ 4,056 and is expected to be recognized over 7.0 years.

Total share based compensation expense for the three months ended March 31, 2025 and 2024 was $ 171 and $ 257 , respectively.

At June 30, 2025, the Company had 8.7 million shares available for grant under the Plan.

As of June 30, 2025, approximately 1,013,000 options were outstanding, 289,000 options were exercisable, and 724,000 options remained nonvested.

Unrecognized compensation expense related to these options at June 30, 2025 was $ 3,890 and is expected to be recognized over 6.7 years.

Total share based compensation expense for the three months ended June 30, 2025 and 2024 was $ 174 and $ 174 , respectively.

Total share based compensation expense for the six months ended June 30, 2025 and 2024 was $ 344 and $ 431 , respectively.

The Company does not expect to pay dividends on its common stock.

16 unchanged sentences

This is considered a Level I valuation technique.

LEGACY HOUSING CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands)

Recent Accounting Pronouncements

5 unchanged sentences

The new standard has had no material impact on the Company's financial statements.

LEGACY HOUSING CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands)

In November, 2023 the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

23 unchanged sentences

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

LEGACY HOUSING CORPORATION

1 unchanged sentence

(dollars in thousands)

make a down payment.

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.

6 unchanged sentences

Warranty costs and contract costs are included in selling, general and administrative expenses in the statements of income.

Warranty and contract costs were $ 493 and $ 537 for the three months ended March 31, 2025 and 2024, respectively.

For the three months ended March 31, 2025 and 2024, total cost of product sales included $ 1,729 and $ 1,408 of costs relating to subcontracted production for commercial sales, transportation and delivery costs, and certain other costs incurred for retail store and commercial sales.

Warranty and contract costs were $ 490 and $ 381 for the three months ended June 30, 2025 and 2024, respectively.

Warranty and contract costs were $ 983 and $ 813 for the six months ended June 30, 2025 and 2024, respectively.

For the three months ended June 30, 2025 and 2024, total cost of product sales included $ 2,477 and $ 1,340 of costs relating to subcontracted production for commercial sales, transportation and delivery costs, and certain other costs incurred for retail store and commercial sales.

For the six months ended June 30, 2025 and 2024, total cost of product sales included $ 4,207 and $ 2,748 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, land sales, service fees and other miscellaneous income.

5 unchanged sentences

Land sales revenue is comprised of sales of land (real property) that was acquired as a result of maintaining or furthering our primary business of producing, selling and financing mobile homes.

For the three months ended March 31, 2025, there were no mobile home park (“MHP”) customers that accounted for more than 5.0 % of our product sales.

For the three months ended March 31, 2024, 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.

For the three and six months ended June 30, 2025, there were no mobile home park (“MHP”) customers that accounted for more than 5.0 % of our product sales.

For the three months ended June 30, 2024, MHP sales to two independent third parties and their affiliates accounted for $ 2,471 or 7.8 % and $ 2,114 or 6.7 % of our product sales.

For the six months ended June 30, 2024, MHP sales to two independent third parties and their affiliates accounted for $ 5,450 or 8.7 % and $ 3,677 or 5.9 % of our product sales.

LEGACY HOUSING CORPORATION

2 unchanged sentences

Disaggregation of Revenue.

The following table summarizes customer contract revenues disaggregated by the source of the revenue for the three ended March 31, 2025 and 2024:

The following table summarizes customer contract revenues disaggregated by the source of the revenue for the three and six months ended June 30, 2025 and 2024:

Three months ended

Six months ended

Product sales:

16 unchanged sentences

Interest income is recognized monthly per the terms of the financing agreements.

The average contractual interest rate per loan was approximately 13.1 % as of March 31, 2025 and December 31, 2024.

The average contractual interest rate per loan was approximately 13.1 % as of June 30, 2025 and December 31, 2024.

Consumer loans receivable have maturities that range from 3 to 30 years .

2 unchanged sentences

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 $ 12,388 and $ 11,623 as of March 31, 2025 and December 31, 2024, respectively, and are included in escrow liability in the accompanying balance sheets.

The liabilities associated with these escrow collections totaled $ 13,175 and $ 11,623 as of June 30, 2025 and December 31, 2024, respectively, and are included in escrow liability in the accompanying balance sheets.

Allowance for Loan Losses—Consumer Loans Receivable

29 unchanged sentences

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 from the consumer loan portfolio totaled $ 5,076 and $ 3,931 as of March 31, 2025 and December 31, 2024, respectively, and are included in other assets in the accompanying balance sheets.

Repossessed homes from the consumer loan portfolio totaled $ 6,384 and $ 3,931 as of June 30, 2025 and December 31, 2024, 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 June 30,

As of December 31,

8 unchanged sentences

The following table presents a detail of the activity in the allowance for loan losses:

Three months ended March 31,

Three months ended June 30,

Six Months Ended June 30,

Allowance for loan losses, beginning of period

3 unchanged sentences

The following table presents impaired and general reserve for allowance for loan losses:

As of March 31,

As of June 30,

As of December 31,

6 unchanged sentences

A detailed aging of consumer loans receivable that are past due is as follows:

As of March 31,

As of June 30,

As of December 31,

8 unchanged sentences

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 and is presented as of March 31, 2025:

Year of Origination

3 unchanged sentences

> 90 days past due

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

LEGACY HOUSING CORPORATION

1 unchanged sentence

(dollars in thousands)

4.9 % to 11.5 %.

The average interest rate per loan was approximately 7.8 % as of March 31, 2025 and December 31, 2024, with maturities that range from 1 to 10 years .

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 4.9 % to 11.5 %.

The average interest rate per loan was approximately 7.9 % as of June 30, 2025 and 7.8 % as of December 31, 2024, 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.

As of March 31, 2025, the Company had concentrations of MHP Notes with three independent third-parties and their respective affiliates that equated to 23.9 %, 13.1 % and 11.5 % of the principal balance outstanding, all of which were secured by the mobile homes.

As of June 30, 2025, the Company had concentrations of MHP Notes with three independent third-parties and their respective affiliates that equated to 24.0 %, 9.5 % and 11.4 % of the principal balance outstanding, all of which were secured by the mobile homes.

As of December 31, 2024, the Company had concentrations of MHP Notes with three independent third-parties and their respective affiliates that equated to 23.5 %, 14.6 % and 11.4 % of the principal balance outstanding, all of which were secured by the mobile homes.

2 unchanged sentences

The Company establishes an allowance composed of specific and general reserve amounts.

As of March 31, 2025 and December 31, 2024, the MHP Notes balance is presented net of unamortized finance fees of $ 958 and $ 1,057 , respectively.

As of June 30, 2025 and December 31, 2024, the MHP Notes balance is presented net of unamortized finance fees of $ 929 and $ 1,057 , respectively.

The finance fees are amortized over the life of the MHP Notes.

As of March 31, 2025, there were past due balances of $ 131 on MHP Notes.

As of June 30, 2025, there were past due balances of $ 103 on MHP Notes.

As of December 31, 2024, there were past due balances of $ 17 on the MHP Notes.

For the three months ended March 31, 2025 and 2024, there were no charge offs recorded for MHP Notes.

Allowance for loan loss for the MHP Notes was $ 776 and $ 654 as of March 31, 2025 and December 31, 2024, respectively.

As of March 31, 2025 and December 31, 2024, there was a minimal impaired balance of MHP Notes.

For the three and six months ended June 30, 2025 and 2024, there were no charge offs recorded for MHP Notes.

Allowance for loan loss for the MHP Notes was $ 900 and $ 654 as of June 30, 2025 and December 31, 2024, respectively.

As of June 30, 2025 and December 31, 2024, 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.

11 unchanged sentences

● Forest Hollow conveyed clear title, and the undisputed right to possess, all real and personal property located on or at the Forest Hollow Mobile Home Community, 6650 Broad Oak Street, Beaumont, TX 77713 (the “Forest Hollow Mobile Home Community”) to Legacy;

● Cleveland conveyed clear title, and the undisputed right to possess, all real and personal property located on or at the Cleveland Mobile Home Community, 110 Old Hwy 49 S.

Richland, MS 39218 (the “Cleveland Mobile Home Community”) to Legacy;

LEGACY HOUSING CORPORATION

1 unchanged sentence

(dollars in thousands)

● Cleveland conveyed clear title, and the undisputed right to possess, all real and personal property located on or at the Cleveland Mobile Home Community, 110 Old Hwy 49 S.

Richland, MS 39218 (the “Cleveland Mobile Home Community”) to Legacy;

● Cleveland and Forest Hollow assigned all intangible assets, including all leases, contracts, and goodwill applicable or related to the real and personal property located on or at the Forest Hollow Mobile Home Community and the Cleveland Mobile Home Community to Legacy;

10 unchanged sentences

The Company recorded a gain of $ 5.4 million in 2024 on the settlement agreement and transactions related to the Cleveland Mobile Home Community and the Forest Hollow Mobile Home Community.

The Company evaluated the recoverability of the New Note as of March 31, 2025 and determined a provision for expected loan losses is not necessary based on the analysis of the fair value of underlying collateral.

Notes receivable from mobile home parks, net of allowance for loan losses and deferred financing fees, consisted of the following at March 31, 2025 and December 31, 2024:

As of March 31,

The Company evaluated the recoverability of the New Note as of June 30, 2025 and determined a provision for expected loan losses is not necessary based on the analysis of the fair value of underlying collateral.

Notes receivable from mobile home parks, net of allowance for loan losses and deferred financing fees, consisted of the following at June 30, 2025 and December 31, 2024:

As of June 30,

As of December 31,

3 unchanged sentences

Allowance for loan losses

The following table presents a detail of the activity in the allowance for loan losses for the three months ended March 31, 2025 and 2024:

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 and six months ended June 30, 2025 and 2024:

Three months ended

Six months ended

Allowance for loan losses, beginning of period

2 unchanged sentences

Allowance for loan losses, end of period

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, 2025 and December 31, 2024:

As of March 31,

The following table presents impaired and general reserve for allowance for loan losses at June 30, 2025 and December 31, 2024:

As of June 30,

As of December 31,

7 unchanged sentences

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, 2025:

Year of Origination

10 unchanged sentences

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, 2025, the Company had concentrations of other notes receivable with three independent third-parties and their respective affiliates that equated to 31.7 %, 21.4 % and 10.3 % of the principal balance outstanding, all of which were secured by the mobile homes.

As of December 31, 2024, the Company had concentrations of other notes receivable with three independent third-parties and their respective affiliates that equated to 33.7 %, 22.7 % and 10.5 % of the principal balance outstanding, all of which were secured by the mobile homes.

As of March 31, 2025, there were past due balances of $ 1,698 on other notes.

As of December 31, 2024, there were past due balances of $ 1,357 on other notes.

For the three months ended March 31, 2025 and 2024, there were no charge offs recorded for other notes.

Allowance for loan loss for the other notes was $ 468 and $ 364 as of March 31, 2025 and December 31, 2024, respectively.

As of March 31, 2025 and December 31, 2024, the impaired balance of other notes was $ 168 and $ 141 , 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.

Note 4, Notes Receivable from Mobile Home Parks, in these Notes to Condensed Financial Statements (Unaudited) for the quarter ended March 31, 2025 provides details regarding a settlement agreement related to prior

LEGACY HOUSING CORPORATION

1 unchanged sentence

(dollars in thousands)

notes receivable.

As of June 30, 2025, the Company had concentrations of other notes receivable with three independent third-parties and their respective affiliates that equated to 40.0 %, 27.0 % and 7.9 % of the principal balance outstanding, all of which were secured by the mobile homes.

As of June 30, 2025, there were past due balances of $ 1,704 on other notes.

As of December 31, 2024, there were past due balances of $ 1,357 on other notes.

For the three and six months ended June 30, 2025 and 2024, there were no charge offs recorded for other notes.

Allowance for loan loss for the other notes was $ 432 and $ 364 as of June 30, 2025 and December 31, 2024, respectively.

As of June 30, 2025 and December 31, 2024, the impaired balance of other notes was $ 210 and $ 141 , 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.

Note 4, Notes Receivable from Mobile Home Parks, in these Notes to Condensed Financial Statements (Unaudited) for the quarter ended June 30, 2025 provides details regarding a settlement agreement related to prior notes receivable.

Prior to the three months ending September 30, 2024, the Company recorded the old Notes described in Note 4 in MHP notes and other notes.

The New Note is recorded in MHP notes only.

Other notes receivable, net of allowance for loan losses and deferred financing fees, consisted of the following at March 31, 2025, December 31, 2024 and December 31, 2023:

As of March 31,

Other notes receivable, net of allowance for loan losses and deferred financing fees, consisted of the following at June 30, 2025, December 31, 2024 and December 31, 2023:

As of June 30,

As of December 31,

3 unchanged sentences

Allowance for loan losses

The following table presents a detail of the activity in the allowance for loan losses for the three months ended March 31, 2025 and 2024:

The following table presents a detail of the activity in the allowance for loan losses for the three and six months ended June 30, 2025 and 2024:

Three months ended

Six months ended

Allowance for loan losses, beginning of period

2 unchanged sentences

Allowance for loan losses, end of period

The following table presents impaired and general reserve for allowance for loan losses at March 31, 2025 and December 31, 2024:

As of March 31,

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 June 30, 2025 and December 31, 2024:

As of June 30,

As of December 31,

7 unchanged sentences

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 Other notes

LEGACY HOUSING CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands)

receivable by credit quality indicator based on delinquency status and fiscal year of origination and is presented as of March 31, 2025:

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 June 30, 2025:

Year of Origination

7 unchanged sentences

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, consisted of the following at March 31, 2025, December 31, 2024 and December 31, 2023:

As of March 31,

Dealer financed notes receivable, net of allowance for loan losses, consisted of the following at June 30, 2025, December 31, 2024 and December 31, 2023:

As of June 30,

As of December 31,

2 unchanged sentences

Allowance for loan losses

The following table presents a detail of the activity in the allowance for loan losses for the three months ended March 31, 2025 and 2024:

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 and six months ended June 30, 2025 and 2024:

Three months ended

Six months ended

Allowance for loan losses, beginning of period

4 unchanged sentences

An allowance for loan losses is determined after considering, among other things, the loan characteristics, the financial condition of the dealer and the value and liquidity of collateral.

LEGACY HOUSING CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands)

INVENTORIES, NET

Inventories, net consisted of the following at March 31, 2025 and December 31, 2024:

As of March 31,

Inventories, net consisted of the following at June 30, 2025 and December 31, 2024:

As of June 30,

As of December 31,

2 unchanged sentences

Finished goods, net

Finished goods includes an allowance of $ 703 and $ 688 as of March 31, 2025 and December 31, 2024, respectively.

Finished goods includes an allowance of $ 722 and $ 688 as of June 30, 2025 and December 31, 2024, respectively.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following at March 31, 2025 and December 31, 2024:

As of March 31,

Property, plant and equipment consisted of the following at June 30, 2025 and December 31, 2024:

As of June 30,

As of December 31,

5 unchanged sentences

Total property, plant and equipment

Depreciation expense was $ 399 and $ 403 for the three months ended March 31, 2025 and 2024, respectively, and includes depreciation expense for leased mobile homes.

Depreciation expense also includes $ 167 and $ 158 as a component of cost of product sales for the three months ended March 31, 2025 and 2024, respectively.

Other assets consisted of the following at March 31, 2025 and December 31, 2024:

As of March 31,

As of December 31,

Repossessed homes

Repossessed homes balance as of March 31, 2025 includes $ 5,076 for homes repossessed from the consumer loan portfolio and $ 1,198 for homes repossessed from the MHP loan portfolio.

Repossessed homes balance as of December 31, 2024 includes $ 3,931 for homes repossessed from the consumer loan portfolio and $ 1,198 for homes repossessed from the MHP loan portfolio.

Depreciation expense was $ 391 and $ 454 for the three months ended June 30, 2025 and 2024, respectively, and includes depreciation expense for leased mobile homes.

Depreciation expense also includes $ 164 and $ 167 as a component of cost of product sales for the three months ended June 30, 2025 and 2024, respectively.

LEGACY HOUSING CORPORATION

1 unchanged sentence

(dollars in thousands)

Other assets consisted of the following at June 30, 2025 and December 31, 2024:

As of June 30,

As of December 31,

Repossessed homes

Repossessed homes balance as of June 30, 2025 includes $ 6,384 for homes repossessed from the consumer loan portfolio and $ 1,198 for homes repossessed from the MHP loan portfolio.

Repossessed homes balance as of December 31, 2024 includes $ 3,931 for homes repossessed from the consumer loan portfolio and $ 1,198 for homes repossessed from the MHP loan portfolio.

ACCRUED LIABILITIES

Accrued liabilities consisted of the following at March 31, 2025 and December 31, 2024:

As of March 31,

Accrued liabilities consisted of the following at June 30, 2025 and December 31, 2024:

As of June 30,

As of December 31,

14 unchanged sentences

The Revolver matures July 28, 2027.

For the three months ended March 31, 2025 and 2024, interest expense under the Revolver was $ 0 and $ 276 , respectively.

The outstanding balance of the Revolver as of March 31, 2025 and December 31, 2024 was $ 0 .

The interest rate in effect as of March 31, 2025 and December 31, 2024 for the Revolver was 6.76 % and 7.61 %, respectively.

The amount of available credit under the Revolver was $ 50,000 as of March 31, 2025 and December 31, 2024.

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

As of March 31, 2025, the Company was in compliance with all financial covenants, including that it maintain a maximum leverage ratio of no more than 1.00 to 1.00 and a minimum fixed charge coverage ratio of no less than 1.75 to 1.00.

The provision for income tax expense for the three months ended March 31, 2025 and 2024 was $ 2,452 and $ 3,373 respectively.

The effective tax rate for the three months ended March 31, 2025 and 2024 was 19.3 % and 18.2 %, 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.

LEGACY HOUSING CORPORATION

1 unchanged sentence

(dollars in thousands)

For the three months ended June 30, 2025 and 2024, interest expense under the Revolver was $ 3 and $ 235 , respectively.

For the six months ended June 30, 2025 and 2024, interest expense under the Revolver was $ 3 and $ 511 , respectively.

The outstanding balance of the Revolver as of June 30, 2025 and December 31, 2024 was $ 142 and $ 0 , respectively.

The interest rate in effect as of June 30, 2025 and December 31, 2024 for the Revolver was 6.76 % and 7.61 %, respectively.

The amount of available credit under the Revolver was $ 49,858 and $ 50,000 as of June 30, 2025 and December 31, 2024, respectively.

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

As of June 30, 2025, the Company was in compliance with all financial covenants, including that it maintain a maximum leverage ratio of no more than 1.00 to 1.00 and a minimum fixed charge coverage ratio of no less than 1.75 to 1.00.

The provision for income tax expense for the three and six months ended June 30, 2025 was $ 3,081 and $ 5,533 respectively.

The effective tax rate for the three and six months ended June 30, 2025 was 17.3 % and 18.1 %, 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 and to a $ 3.4 million federal tax credit purchased by the Company at a discount in this second quarter and applied to the current year, both partially offset by state income taxes.

The provision for income tax expense for the three and six months ended June 30, 2024 was $ 3,607 and $ 6,980 respectively.

The effective tax rate for the three and six months ended June 30, 2024 was 18.2 % This rate differs 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 ends June 30, 2026 pursuant to the One Big Beautiful Bill Act of 2025.

COMMITMENTS AND CONTINGENCIES

3 unchanged sentences

The Company will adjust its self-insured medical benefits reserve based on actual experience, estimated costs and changes to assumptions.

As of March 31, 2025 and December 31, 2024, the Company accrued a $ 809 and $ 861 liability for incurred but not reported claims, respectively.

As of June 30, 2025 and December 31, 2024, the Company accrued a $ 878 and $ 861 liability for incurred but not reported claims, respectively.

These accrued amounts are included in accrued liabilities on the accompanying balance sheets.

3 unchanged sentences

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 $ 672 and $ 805 at March 31, 2025 and December 31, 2024, 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, 2025 and December 31, 2024.

The maximum amount for which the Company was liable under such agreements approximated $ 512 and $ 805 at June 30, 2025 and December 31, 2024, 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 June 30, 2025 and December 31, 2024.

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 for the three months ended March 31, 2025 and 2024 was $ 149 and $ 159 , respectively.

Rent expense for the three months ended June 30, 2025 and 2024 was $ 136 and $ 161 , respectively.

Rent expense for the six months ended June 30, 2025 and 2024 was $ 284 and $ 320 , 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 for the three months ended March 31, 2025 and 2024 was approximately $ 21 and $ 54 , respectively.

Rental income from the subleased properties for the three months ended June 30, 2025 and 2024 was approximately $ 22 and $ 60 , respectively.

Rental income from the subleased properties for the six months ended June 30, 2025 and 2024 was approximately $ 43 and $ 114 , respectively.

LEGACY HOUSING CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands)

Legal Matters

2 unchanged sentences

The Company has determined that it is probable that it has some liability related to the claims.

The Company has included legal reserves of $ 490 and $ 328 as of March 31, 2025 and December 31, 2024, respectively, in accrued liabilities on the accompanying balance sheets.

The Company has included legal reserves of $ 468 and $ 328 as of June 30, 2025 and December 31, 2024, 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.

LEGACY HOUSING CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands)

FAIR VALUE MEASUREMENTS

The following table shows the estimated fair market value and book value of our consumer loan portfolio, MHP notes and other notes, net of allowances, loan discount fees and deferred financing fees, as of March 31, 2025 and December 31, 2024:

As of March 31,

As of June 30,

As of December 31,

11 unchanged sentences

This is considered a Level III valuation technique.

LEGACY HOUSING CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

(dollars in thousands)

EARNINGS PER SHARE

4 unchanged sentences

Three months ended

Six months ended

Net income (in 000's)

7 unchanged sentences

On August 6, 2024, our Board of Directors authorized the repurchase of an additional $ 10.0 million of the Company’s common stock under the share repurchase program.

We repurchased 262,530 shares of common stock for $ 5,398 in the open market during the year ended December 31, 2024.

We repurchased 29,385 shares of common stock for $ 675 in the open market during the three months ended March 31, 2025.

We repurchased 260,635 shares of common stock for $ 5,817 in the open market during the three months ended June 30, 2025.

As of June 30, 2025, we had a remaining authorization of approximately $ 8,110 .

LEGACY HOUSING CORPORATION

1 unchanged sentence

(dollars in thousands)

repurchased 262,530 shares of common stock for $ 5,398 in the open market during the year ended December 31, 2024.

We repurchased 29,385 shares of common stock for $ 675 in the open market during the three months ended March 31, 2025.

As of March 31, 2025, we had a remaining authorization of approximately $ 13,927 .

Between April 1, 2025 and May 12, 2025 we repurchased 11,466 shares of common stock for $ 261 in the open market.

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 $ 64 and $ 115 as of March 31, 2025 and December 31, 2024, respectively.

Accounts payable balances due to Bell were $ 24 and $ 58 as of March 31, 2025 and December 31, 2024, respectively.

Home sales to Bell were $ 384 and $ 1,119 for the three months ended March 31, 2025 and 2024, respectively.

Accounts receivable balances due from Bell were $ 6 and $ 115 as of June 30, 2025 and December 31, 2024, respectively.

Accounts payable balances due to Bell were $ 53 and $ 58 as of June 30, 2025 and December 31, 2024, respectively.

Home sales to Bell were $ 1,162 and $ 1,312 for the three months ended June 30, 2025 and 2024, respectively.

Home sales to Bell were $ 1,547 and $ 2,431 for the six months ended June 30, 2025 and 2024, 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 $ 65 and $ 78 as of March 31, 2025 and December 31, 2024, respectively.

Accounts payable balances due to Shipley were $ 20 and $ 22 as of March 31, 2025 and December 31, 2024, respectively.

Home sales to Shipley were $ 392 and $ 299 for the three months ended March 31, 2025 and 2024, respectively.

Accounts receivable balances due from Shipley were $ 46 and $ 78 as of June 30, 2025 and December 31, 2024, respectively.

Accounts payable balances due to Shipley were $ 38 and $ 22 as of June 30, 2025 and December 31, 2024, respectively.

Home sales to Shipley were $ 805 and $ 1,361 for the three months ended June 30, 2025 and 2024, respectively.

Home sales to Shipley were $ 1,197 and $ 1,660 for the six months ended June 30, 2025 and 2024, respectively.

SUBSEQUENT EVENTS

In connection with the preparation of these interim financial statements, we evaluated subsequent events after the balance sheet date of March 31, 2025 and through the date of this filing and determined that no events occurred that would require adjustments or disclosures in the interim financial statements other than those disclosed in Note 15 – Earnings Per Share of these interim financial statements.

In connection with the preparation of these interim financial statements, we evaluated subsequent events after the balance sheet date of June 30, 2025 and through the date of this filing and determined that no events occurred that would require adjustments or disclosures in the interim financial statements.

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 1. Financial Statements