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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-4631
DIVISION OF
CORPORATION FINANCE
Mail Stop 4631
April 2, 2018
Via E-Mail
Mr. Curtis D. Hodgson
Co-Chief Executive Officer
Mr. Kenneth E. Shipley
Co-Chief Executive Officer
Legacy Housing Corporation
1600 Forest Ridge Drive, #100
Bedford, TX 76002
Re: Legacy Housing Corporation
Amendment 1 to Draft Registration Statement
Submitted March 20, 2018
CIK No. 0001436208
Dear Messrs. Hodgson and Shipley:
We reviewed your amended draft registration statement and have the
following
comments. In some of our comments we may ask you to provide us information so
that
we may better understand your disclosure.
Please respond to this letter by providing the requested information
and either
submitting an amended draft registration statement or publicly filing your
registration
statement on EDGAR. If you do not believe that our comments apply to your
facts and
circumstances or do not believe that an amendment is appropriate, please tell
us why in
your response.
After reviewing the information you provide in response to these
comments and
your amended draft registration statement or filed registration statement, we
may have
additional comments.
Our operations are concentrated in the southern United States..., page 16
1. We note your response to comment 6 in our March 1, 2018 letter. Specify
the
aggregate unit number and aggregate dollar amount used in the measurement
of your
rates of delinquencies, default, and foreclosure losses during the periods
presented in
the financial statements.
Mr. Curtis D. Hodgson
Mr. Kenneth E. Shipley
Legacy Housing Corporation
April 2, 2018
Page 2
Strong Alignment of Interests through Co-Founders' Ownership, pages 7 and 52;
Executive Compensation, page 70
2. Revised disclosure on pages 7 and 52 state that Messrs. Curtis D. Hodgson
and
Kenneth E. Shipley received minimal salaries during past years, "being
compensated
instead solely through profit contributions." Revise the summary
compensation table
on page 70 to include the profit contributions received by Messrs. Hodgson
and
Shipley during the periods presented. See Item 402(a)((2) of Regulation S-K.
Critical Accounting Policies and Estimates, Factory-Built Housing Revenue
Recognition,
page 40
3. You disclose that revenue from consignment sales is either deferred until
payment is
received by you or recognized when the home is authorized to be shipped by
you,
collection is reasonably assured, and the nature of the independent dealer.
Please
provide further clarification on "the nature of the independent dealer." In
addition,
please expand your consignment sales disclosure, including the material
terms of the
consignment arrangements with your retailers and your consideration for
presenting
the consignment transactions on a gross basis.
Floor Plan Financing, Page 57
4. We note the updated disclosure on pages 57 and 58. Please also disclose the
consignment sales amounts recorded for all the periods presented.
Financial Statements
General
5. We note your response to comment 16 in our March 1, 2018 letter and
appreciate the
detailed analysis that you provided. In the next amendment, in addition to
the
revenue breakout on the income statement that you proposed, please also
disclose in
the notes the fact that you have a single operating and reportable segment
and the
basis for your conclusion.
Note 2 Summary of Significant Accounting Policies, Inventory, page F-9
6. We acknowledge your response to comments 22 and 23 in our March 1, 2018
letter.
As requested previously, please discuss methods and assumptions used to
determine
fair market value of your inventory as part of your inventory valuation
disclosure.
Please also address the following items:
Mr. Curtis D. Hodgson
Mr. Kenneth E. Shipley
Legacy Housing Corporation
April 2, 2018
Page 3
You continue to assert that a reserve for slow-moving inventory is not
necessary for finished goods inventory consigned to dealers due to
dealers'
incentive to sell these units. However, we also note from your
response to
prior comment 26 that you maintain the majority of the inventory
risk because
dealers may return inventory to you at any time and cancel the
consignment
arrangement with the appropriate notice. Please tell us if there
have been any
instances where dealers returned unsold units to you and any
subsequent
losses you incurred as a result.
We note from your disclosure that 22% of your consignment inventory
as of
December 31, 2016 was aged more than one year. Please tell us how
much of
the inventory has been subsequently sold by your dealers as of
December 31,
2017.
You disclose in your response and on page 39 of the amendment that
you
determine a reserve for slow-moving non-consigned inventory based
upon
$1,000 per unit, per anniversary. Please tell us how you concluded
that the
$1,000 per unit, per year amount is appropriate given the price of
your homes
range from $22,000 to $110,000.
7. We acknowledge your response to comment 24 in our March 1, 2018 letter. We
continue to have concerns with respect to classifying inventory over 12
months old as
of the balance sheet date as current. We do not believe that the current
classification
is appropriate to the extent the inventory is not expected to be used or
sold within the
normal operating cycle of your business.
Note 2 Summary of Significant Accounting Policies, Product Warranties, page
F-10
8. The product warranties table does not appear to add up. Please revise or
advise.
Note 5 Inventories, page F-15
9. We acknowledge your response to comment 28 in our March 1, 2018 letter. It
does
not appear that this comment has been addressed by your response to prior
comment
23 as you indicated. Please revise or advise.
You may contact SiSi Cheng, Staff Accountant, at (202) 551-5004 or W. John
Cash,
Accounting Branch Chief, at (202) 551-3768 if you have questions about comments
on
Mr. Curtis D. Hodgson
Mr. Kenneth E. Shipley
Legacy Housing Corporation
April 2, 2018
Page 4
the financial statements and related matters. You may contact Edward M. Kelly,
Senior
Counsel, at (202) 551-3728 or me at (202) 551-3395 if you have any other
questions.
Sincerely,
/s/ Jay Ingram
Jay Ingram
Legal Branch Chief
Office of Manufacturing and
Construction
cc: Via E-mail
Steve Wolosky, Esq.
Spencer G. Feldman, Esq.
Olshan Frome Wolosky LLP
1325 Avenue of the Americas, 15th Floor
New York, NY 10019