0001558370-22-011928 | 10-K | XBRL Viewer

Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2021	Dec. 31, 2020	Mar. 31, 2022	Jun. 30, 2021
Document and Entity Information
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2021
Document Transition Report	false
Entity Registrant Name	Legacy Housing Corporation
Entity File Number	001-38761
Entity Incorporation, State or Country Code	TX
Entity Tax Identification Number	20-2897516
Entity Address, Address Line One	1600 Airport Freeway
Entity Address, Address Line Two	#100
Entity Address, City or Town	Bedford
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	76022
City Area Code	817
Local Phone Number	799-4900
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
ICFR Auditor Attestation Flag	false
Entity Shell Company	false
Title of 12(b) Security	Common Stock ($0.001 par value)
Trading Symbol	LEGH
Security Exchange Name	NASDAQ
Entity Public Float				$ 133,405,746
Entity Common Stock, Shares Outstanding			24,406,020
Entity Central Index Key	0001436208
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	FY
Amendment Flag	false
Auditor Name	Weaver, LLP	BKD, LLP
Auditor Firm ID	410	686
Auditor Location	Dallas, Texas	Dallas, Texas

BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 1,042	$ 768
Accounts receivable, net	8,614	3,536
Current portion of consumer loans	6,080	5,348
Current portion of notes receivable from mobile home parks ("MHP")	10,049	12,468
Current portion of other notes receivable	21,070	2,054
Inventories	41,230	27,224
Prepaid expenses and other current assets	4,456	3,234
Total current assets	92,541	54,632
Consumer loans, net	119,543	106,572
Notes receivable from mobile home parks ("MHP")	92,943	123,872
Other notes receivable, net	20,930	13,050
Inventories, net	2,678	8,656
Other assets	10,516	9,218
Property, plant and equipment, net	27,516	22,616
Total assets	366,667	338,616
Current liabilities:
Accounts payable	4,155	10,197
Accrued liabilities	20,686	14,860
Customer deposits	7,749	3,620
Escrow liability	9,350	7,729
Total current liabilities	41,940	36,406
Long-term liabilities:
Lines of credit	7,993	36,174
Deferred income taxes, net	3,004	1,971
Accrued liabilities, net of current portion		630
Dealer incentive liability	4,336	4,242
Total liabilities	57,273	79,423
Commitments and contingencies (Note 13)
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; 24,654,621 and 24,639,125 issued and 24,209,556 and 24,194,060 outstanding at December 31, 2021 and December 31, 2020, respectively	25	25
Treasury stock at cost, 445,065 shares at December 31, 2021 and December 31, 2020	(4,477)	(4,477)
Additional paid-in-capital	175,623	175,293
Retained earnings	138,223	88,352
Total stockholders' equity	309,394	259,193
Total liabilities and stockholders' equity	$ 366,667	$ 338,616

BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2021	Dec. 31, 2020
BALANCE SHEETS
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	90,000,000	90,000,000
Common stock, shares issued	24,654,621	24,639,125
Common stock, shares outstanding	24,209,556	24,194,060
Treasury stock, shares	445,065	445,065

STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	12 Months Ended
STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Net revenue:
Product sales	$ 165,995	$ 147,502
Consumer and MHP loans interest	27,195	25,360
Other	4,317	3,862
Total net revenue	197,507	176,724
Operating expenses:
Cost of product sales	114,050	109,723
Selling, general and administrative expenses	23,306	19,068
Dealer incentive	1,235	336
Income from operations	58,916	47,597
Other income (expense):
Non-operating interest income	2,095	915
Miscellaneous, net	503	288
Gain on settlement, net		1,075
Interest expense	(887)	(1,053)
Total other	1,711	1,225
Income before income tax expense	60,627	48,822
Income tax expense	(10,756)	(10,827)
Net income	$ 49,871	$ 37,995
Weighted average shares outstanding:
Basic	24,204,437	24,226,128
Diluted	24,275,989	24,236,395
Net income per share:
Basic	$ 2.06	$ 1.57
Diluted	$ 2.05	$ 1.57

STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY - USD ($) $ in Thousands	Common Stock	Treasury stock	Additional paid-in-capital	Retained earnings	Total
Beginning Balance at Dec. 31, 2019	$ 25	$ (3,060)	$ 175,067	$ 50,357	$ 222,389
Beginning Balance (in shares) at Dec. 31, 2019	24,620,079
Share based compensation expense and stock units vested			226		226
Share based compensation expense and stock units vested (in shares)	19,046
Purchase of treasury stock		(1,417)			(1,417)
Net income				37,995	37,995
Ending Balance at Dec. 31, 2020	$ 25	(4,477)	175,293	88,352	$ 259,193
Ending Balance (in shares) at Dec. 31, 2020	24,639,125				24,639,125
Share based compensation expense and stock units vested			230		$ 230
Share based compensation expense and stock units vested (in shares)	15,496
Proceeds from exercise of stock options			100		100
Net income				49,871	49,871
Ending Balance at Dec. 31, 2021	$ 25	$ (4,477)	$ 175,623	$ 138,223	$ 309,394
Ending Balance (in shares) at Dec. 31, 2021	24,654,621				24,654,621

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

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STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Operating activities:
Net income	$ 49,871	$ 37,995
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation expense	1,587	1,212
Amortization of debt discount and issuance costs	814	(637)
Provision for accounts receivable	246	97
Provision for long term inventory	(188)	620
Sale of leased property	(98)
Provision for loan loss-consumer loans	725	819
Deferred income taxes	1,033	205
Share based payment expense	230	226
Gain on sale of land		(66)
Changes in operating assets and liabilities:
Accounts receivable	(5,325)	(1,481)
Consumer loans originations	(25,998)	(19,247)
Consumer loans principal collections	10,473	11,196
Notes receivable MHP originations	(46,230)	(68,349)
Notes receivable MHP principal collections	78,957	23,529
Inventories	(7,840)	2,658
Prepaid expenses and other current assets	(1,221)	1,918
Other assets	(1,739)	(5,205)
Accounts payable	(6,042)	5,027
Accrued liabilities	4,589	6,682
Customer deposits	4,737	2,053
Escrow liability	1,621	199
Dealer incentive liability	94	(1,289)
Net cash provided by (used in) operating activities	60,296	(1,838)
Investing activities:
Purchases of property, plant and equipment	(5,952)	(2,845)
Proceeds from sale of land		30
Issuance of notes receivable	(36,806)	(5,082)
Notes receivable collections	9,026	4,358
Purchases of loans		(487)
Collections from purchased loans	1,790	1,308
Net cash used in investing activities	(31,942)	(2,718)
Financing activities:
Proceeds from exercise of stock options	100
Treasury stock purchase		(1,417)
Proceeds from issuance of note payable		6,546
Principal payments on note payable		(6,546)
Proceeds from lines of credit	96,088	67,698
Payments on lines of credit	(124,268)	(62,681)
Net cash provided by (used in) financing activities	(28,080)	3,600
Net increase (decrease) in cash and cash equivalents	274	(956)
Cash and cash equivalents at beginning of period	768	1,724
Cash and cash equivalents at end of period	1,042	768
Supplemental disclosure of cash flow information:
Cash paid for interest	873	985
Cash paid for taxes	$ 8,195	6,728
Supplemental disclosure of non-cash transactions:
Note receivable received in exchange of asset		$ 290

NATURE OF OPERATIONS

12 Months Ended

Dec. 31, 2021

NATURE OF OPERATIONS

NATURE OF OPERATIONS

1. NATURE OF OPERATIONS

Legacy Housing Corporation (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 and (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 dealers and mobile home parks.

In December 2018, the Company sold 4,000,000 shares of its common stock through an initial public offering (“IPO”) at $12.00 per share. Proceeds from the IPO, net of $4,504 of underwriting discounts and offering expenses paid by the Company, were $43,492. In January 2019, the Company sold an additional 600,000 shares of its common stock as part of the IPO at $12.00 per share. Proceeds from the January 2019 issuance, net of $505 of underwriting discounts and offering expenses paid by the Company, were $6,695.

On April 17, 2019, the Company purchased 300,000 shares of its common stock at the price of $10.20 per share, pursuant to the Company’s repurchase program. During the year ended December 31, 2020, the Company purchased 145,065 shares of its common stock at an average price of $9.77 per share, pursuant to the Company’s repurchase program. Under the repurchase program, the Company may purchase up to $10,000 of its common stock. Share purchases may be made from time to time in the open market or through privately negotiated transactions depending on market conditions, share price, trading volume and other factors. Such purchases, if any, will be made in accordance with applicable insider trading and other securities laws and regulations. These repurchases may be commenced or suspended at any time or from time to time without prior notice.

Corporate Conversion

Effective January 1, 2018, the Partnership converted into a Delaware corporation pursuant to a statutory conversion and changed its name to Legacy Housing Corporation. In order to consummate the corporate conversion completed on January 1, 2018, a certificate of conversion was filed with the Secretary of State of the State of Delaware and with the Secretary of State of the State of Texas. Holders of partnership interests in Legacy Housing, Ltd. received an initial allocation, on a proportional basis, of 20,000,000 shares of common stock of Legacy Housing Corporation.

Following the corporate conversion, Legacy Housing Corporation continues to hold all property and assets of Legacy Housing, Ltd. and all of the debts and obligations of Legacy Housing, Ltd. On the effective date of the corporate conversion, the officers of Legacy Housing, Ltd. became the officers of Legacy Housing Corporation. As a result of the corporate conversion, The Company is now a federal corporate taxpayer.

Basis of Presentation

The financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain amounts in the prior period financial statements have been reclassified to conform to the presentation of the current period financial statements. These reclassifications had no effect on the previously reported net income.

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 of accounts receivable, loans to mobile home parks, consumer loans and notes receivable, inventory obsolescence, income taxes, fair value of financial instruments and contingent liabilities. Actual results could differ from these estimates.

Segment Reporting

The Company has one reportable segment. All of the Company’s 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 is done through wholesale and retail operations that include providing transportation and consignment arrangements with dealers. The Company also provides financing options to the customers to facilitate such sale of homes. In addition, the sale of homes is directly related to financing provided by the Company. Accordingly, all significant operating and strategic decisions by the chief operating decision-maker, the Executive Chairman of the Board, are based upon analyses of the Company as one segment or unit.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2021

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and Cash Equivalents

The Company considers all cash and highly liquid investments with an original maturity of three months or less to be cash equivalents. The Company maintains cash balances in bank accounts that may, at times, exceed federally insured limits. The Company has not incurred any losses from such accounts and management considers the risk of loss to be minimal. As of December 31, 2021, the Company had one bank account that exceeded the FDIC limit by an aggregate amount of $490.

Accounts Receivable

Included in accounts receivable are receivables from direct sales of mobile homes and sales of parts and supplies to customers, consignment fees and interest receivables.

Accounts receivables are generally due within 30 days and 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. At December 31, 2021 and 2020, the allowance for doubtful accounts totaled $343 and $97, respectively.

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 13.5% as of December 31, 2021 and 13.8% as of December 31, 2020. Consumer loans receivable have maturities that range from 2 to 30 years.

Loan applications go through an underwriting process which considers credit history to evaluate credit risk of the consumer. Interest rates on approved loans are determined 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 $9,350 and $7,729 as of December 31, 2021 and 2020, respectively, and are included in escrow liability in the 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, 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 loss rate for the last three years, adjusted for the estimated loss discovery period 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 is normally 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. As of December 31, 2021 and 2020, total principal outstanding for consumer loans on nonaccrual status was $1,239 and $1,603, respectively.

Impaired loans are those loans where it is probable 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 used various factors to determine the value of the underlying collateral for impaired loans. These factors were: (1) the length of time the unit was unsold after construction; (2) the amount of time the house was occupied; (3) the cooperation level of the borrowers, i.e., loans requiring legal action or extensive field collection efforts; (4) units located on private property as opposed to a manufactured home park; (5) the length of time the borrower has lived in the house without making payments; (6) location, size, 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 fair value of the collateral is 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 $517 and $1,395 as of December 31, 2021 and 2020, respectively, and are included in other assets in the balance sheets.

Notes Receivable from Mobile Home Parks

The notes receivable from mobile home parks (“MHP Notes” or “Notes”) relate to mobile homes sold to mobile home parks and financed through notes receivable. The Notes have varying maturity dates and call for monthly principal and interest payments. The interest rate on the MHP Notes can be fixed or variable. Approximately $83,000 of the Notes have a fixed interest rate ranging from 6.9% to 8.9%. The remaining Notes have a variable rate typically set at 4.0% above prime with a minimum of 8.0%. The average interest rate per loan was approximately 7.6% and 7.7% as of December 31, 2021 and 2020, respectively with maturities that range from 1 to 19 years. The collateral underlying the Notes are individual mobile homes which can be repossessed and resold. The MHP Notes are generally personally guaranteed by the borrowers with substantial financial resources.

As of December 31, 2021, the Company had concentrations of MHP Notes with two independent third-parties and their respective affiliates that equaled 10.4% and 30.1% of the principal balance outstanding, all of which was secured by the mobile homes. As of December 31, 2020, the Company had concentrations of MHP Notes with one independent third-party and its affiliates that equaled 52.9% of the principal balance outstanding, all of which was secured by the mobile homes.

Allowance for Loan Losses—MHP Notes

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 reserve composed of specific and general reserve amounts. There were minimal past due balances on the MHP Notes as December 31, 2021 and 2020 and no charge offs were recorded for MHP Notes for the years ended December 31, 2021 and 2020, respectively. Allowance for loan loss is considered immaterial and accordingly no provision is recorded against the MHP Notes as of December 31, 2021 and 2020.

There were no impaired MHP Notes for the years ended December 31, 2021 and 2020, respectively, and there were no repossessed homes balances as of December 31, 2021 and 2020, 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.

Other Notes Receivable

Other notes receivable relate to various notes issued to mobile home park owners and dealers, which are not directly tied to sale of mobile homes. The other notes have varying maturity dates and call for monthly principal and interest payments. The other notes are collateralized by mortgages on real estate, units being financed and used as offices, as well as vehicles, and are typically personally guaranteed by the borrowers. The interest rate on the other notes are fixed and range from 5.00% to 12.00%. 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 December 31, 2021 and 2020, the allowance for loan losses on other notes was $74 and $75, respectively. There were no past due balances for other notes as of December 31, 2021 and 2020, respectively, and there were no impaired balances for other notes as of December 31, 2021 and 2020, respectively.

Inventories

Inventories consist of raw materials, work-in-process, and finished goods and are stated at the lower of cost or net realizable value. The cost of raw materials is based on the first-in first-out method. Finished goods and work-in-process are based on a standard cost system that approximates actual costs using the specific identification method.

Estimates of the lower of cost and net realizable value of inventory are determined by comparing the actual cost of the product to the estimated selling prices in the ordinary course of business based on current market and economic conditions, less reasonably predictable costs of completion, disposal, and transportation of the inventory. For the periods ending, December 31, 2021 and 2020, the Company recorded an insignificant amount of inventory write-down.

The Company evaluates inventory based on historical experience to estimate its inventory not expected to be sold in less than a year. The Company classifies its inventory not expected to be sold in one year as non-current. As of December 31, 2021 and 2020, non-current inventory was $2,678 and $8,656, respectively.

Property, Plant, and Equipment

Property, plant and equipment are carried at cost less accumulated depreciation. Depreciation expense is calculated using the straight-line method over the estimated useful lives of each asset. Estimated useful lives for significant classes of assets are as follows: buildings and improvements, 30 to 39 years; vehicles, 5 years; machinery and equipment, 7 years; and furniture and fixtures, 7 years. Repair and maintenance charges are expensed as incurred. Expenditures for major renewals or betterments which extend the useful lives of existing property, plant and equipment are capitalized and depreciated.

Impairment of Long-Lived Assets

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Assets are grouped at the lowest level in which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets. In such cases, if the future undiscounted cash flows of the underlying assets are less than the carrying amount, then the carrying amount of the long-lived asset will be adjusted for impairment to a level commensurate with a discounted cash flow analysis of the underlying asset or its determinable fair value. No impairment for long-lived assets was recorded for the years ended December 31, 2021 and 2020.

Dealer Incentive Liability

Under a dealer agreement with qualifying independent retailers, a portfolio is created for houses sold by the independent retailer with consumer loan arrangements financed by the Company. The independent retailer is eligible to a receive dealer incentive, which is a portion of total collections expected on a consumer loan portfolio after the Company’s contribution (collection thresholds set per the terms of dealer agreement which includes Legacy’s initial contribution, plus an allocation of interest and other agreed upon periodic fees) is met.

A dealer incentive liability is recorded in the Company’s balance sheet based on total outstanding balance of individual dealer loan portfolios at period end, less the remaining portion of the Company’s contribution in respective portfolios. As of December 31, 2021 and 2020, the dealer incentive liability was $4,336 and $4,242, respectively. Dealer incentive expense for the years ended December 31, 2021 and 2020 totaled $1,235 and $336, respectively, and is included in the Company’s statements of operations.

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 warranty liability balance is included as part of accrued liabilities in the Company’s balance sheet.

A tabular presentation of the activity within the warranty liability account for the years ended December 31, 2021 and 2020 is presented below:


	2021		2020
Warranty liability, beginning of period	$	2,594	$	3,078
Product warranty accrued		2,152		1,834
Warranty costs incurred		(1,870)		(2,318)
Warranty liability, end of period	$	2,876	$	2,594

Advertising Costs

The Company expenses all advertising and marketing expenses in the period incurred. Advertising costs for the years ended December 31, 2021 and 2020 were $367 and $1,193, respectively.

Fair Value Measurements

The Company accounts for its investments and derivative instruments in accordance with 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; (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.
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 has used derivatives to manage risks related to interest rate movements. The Company does not enter into derivative contracts for speculative purposes. Interest rate swap contracts are recognized as assets or liabilities on the balance sheets and are measured at fair value. The fair value was calculated and provided by the lender, a Level II valuation technique. Management reviewed the fair values for the instruments as provided by the lender and determined the related asset and liability to be an accurate estimate of future gains and losses to the Company. The Company is not a party to any interest rate swaps as of December 31, 2021.

Fair Value of Financial Instruments

The Company’s financial instruments consist primarily of cash and cash equivalents, accounts receivable, consumer loans, MHP Notes, other notes, accounts payable, lines of credit, notes payable, and dealer portion of consumer loans.

The carrying amounts of cash and cash equivalents, 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, notes payable and part of the MHP Notes 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 other notes based on the discounted value of the remaining principal and interest cash flows. The Company determined that the fair value of the consumer loan portfolio was approximately $125,600 compared to the book value of $125,623 as of December 31, 2021, and a fair value of approximately $115,000 compared to the book value of $111,920 as of December 31, 2020. The Company determined that the fair value of the fixed rate MHP Notes was approximately $83,000 compared to the book value of $83,773 as of December 31, 2021, and a fair value of approximately $108,000 compared to the book value of $109,806 as of December 31, 2020. The Company determined that the fair value of the fixed rate other notes was approximately $38,500 compared to the book value of $38,886 as of December 31, 2021, and a fair value of approximately $15,000 compared to the book value of $15,104 as of December 31, 2020. This is a Level III valuation technique.

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, Consignment 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 a consignment 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. The Company provides floor plan financing for independent retailers, which takes the form of a consignment arrangement. Consignment Sales are considered sales of consigned homes from independent dealers to individual customers. Retail Store Sales are homes sold through Company-owned retail locations. Consignment Sales and Retail Sales of homes may be financed by the Company, by a third party, or in paid in cash.

Revenue from product sales is recognized at a point in time when the performance obligation under the terms of a contract with our customers 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 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 separately recorded in the statement of operations.

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.

For the years ended December 31, 2021 and 2020, sales to an independent third-party and its affiliates accounted for $9,165 or 5.5% and $41,263 or 28.7% of our product sales, respectively.

For the years ended December 31, 2021 and 2020, total cost of product sales included $11,303 and $24,165 of costs, mainly relating to up front dealer commission and reimbursed dealer expenses for consignment sales and certain other similar costs incurred for retail store and commercial sales.

Other revenue consists of consignment fees, 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 are 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. Revenue for service fees and miscellaneous income is recognized at a point in time when the performance obligation is satisfied.

Disaggregation of Revenue. The following table summarizes customer contract revenues disaggregated by source of the revenue for the years ended December 31, 2021 and 2020:


	2021		2020
Product sales:
Direct sales	$	25,173	$	11,203
Commercial sales		46,835		70,186
Consignment sales		63,496		43,801
Retail store sales		20,011		17,436
Other (1)		10,480		4,876
Total product sales		165,995		147,502
Consumer and MHP loans interest:
Interest - consumer installment notes		16,658		15,979
Interest - MHP notes		10,537		9,381
Total consumer and MHP loans interest		27,195		25,360
Other		4,317		3,862
Total net revenue	$	197,507	$	176,724

(1)	Other product sales revenue from ancillary products and services including parts, freight and other services

Reserve for Repurchase Commitments

In accordance with customary business practice in the manufactured housing industry, the Company has entered into certain repurchase agreements with certain financial institutions and other credit sources who provide floor plan financing to industry retailers, which provided that the Company will be obligated, under certain circumstances, to repurchase homes sold to retailers in the event of a default by a retailer in its obligation to such credit sources. The Company’s obligation under these repurchase agreements ceases upon the purchase of the home by the retail customer. The Company applies ASC 460, Guarantees and ASC 450-20, Loss Contingencies, to account for its liability for repurchase commitments. The Company considers its current obligations on current contracts to be immaterial and accordingly have not recorded any reserve for repurchase commitments as of December 31, 2021 and 2020.

Other Income, Net

Other income primarily consists of interest related to other notes receivable balances and interest income earned on cash balances, reduced by interest expenses.

Interest Income

Interest on consumer loans, MHP Notes and other notes is recognized using the effective-interest method on the daily balances of the principal amounts outstanding and recorded as part of total revenue. Fees associated with the origination of loans and certain direct loan origination costs are netted and the net amount is deferred and recognized over the life of the loan as an adjustment of yield.

Share-Based Compensation

The Company accounts for share-based compensation in accordance with the provisions of ASC 718, Compensation—Stock Compensation. Share-based compensation expense is recognized based on the 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 unit (the ”RSU”) 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. As a recently formed public entity with a small public float and limited trading of its common shares on the NASDAQ Global Market, it was not practicable for the Company to estimate the volatility of its common shares; therefore, management estimated volatility based on the historical volatilities of a small group of companies considered as close to comparable to the Company as available, all equally weighted, over the expected life of the option. Management concluded that this group is more characteristic of the Company’s business than a broad industry index. 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.

Shipping and Handling Costs

Shipping and handling costs incurred to deliver product to our customers are included as a component of cost of product sales in the statement of operations. Shipping and handling costs for the years ended December 31, 2021 and 2020 were $1,981 and $706, respectively.

Income Taxes

The Company is subject to U.S. federal and state income taxes as a corporation. Prior to the corporate conversion, the Partnership was treated as a flow-through entity for U.S. federal income tax purposes, and as such, was generally not subject to U.S. federal income tax at the entity level. Rather, the tax liability with respect to its taxable income was passed through to its partners. Accordingly, prior to the corporate conversion, the Partnership only recorded a provision for Texas franchise tax as the Partnership’s taxable income was included in the income tax returns of the individual partners.

Income tax expense for the Company is recognized for the tax effects of the transactions reported in the financial statements and consist of taxes currently due, plus deferred taxes. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will be either taxable or deductible when the assets and liabilities are recovered or settled. Deferred tax assets and liabilities are reflected at income tax rates applicable to the period in which the deferred tax assets or liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes.

A valuation allowance, if needed, reduces deferred tax assets to the expected amount most likely to be realized. Realization of deferred tax assets is dependent upon the generation of a sufficient level of future taxable income and recoverable taxes paid in prior years. Although realization is not assured, management believes it is more likely than not that the deferred tax assets will be realized. In addition, management does not believe there are any unrecorded deferred tax liabilities that are material to the financial statements.

The determination of the provision for income taxes requires significant judgment, use of estimates, and the interpretation and application of complex tax laws. Significant judgment is required in assessing the timing and amounts of deductible and taxable items and the probability of sustaining uncertain tax positions. The benefits of uncertain tax positions are recorded in the Company’s financial statements only after determining a more-likely-than-not probability that the uncertain tax positions will withstand challenge, if any, from taxing authorities. When facts and circumstances change, the Company reassesses these probabilities and records any changes through the provision for income taxes. The Company recognizes interest and penalties relating to uncertain tax provisions as a component of tax expense. For the periods presented, management has determined there are no material uncertain tax positions which was performed for the tax years that remain subject to examination by major tax jurisdictions as of December 31, 2021, which includes the tax years 2018, 2019 and 2020.

Concentrations

Financial instruments that potentially subject the Company to concentrations of credit risk are accounts receivable, consumer loans, MHP Notes and other notes receivable. Management believes that its credit policies are adequate to minimize potential credit risk related to accounts receivable and other notes receivable. The consumer loans are secured by the mobile homes that were financed through the loans. The MHP Notes are secured by mobile homes, other assets, and are personally guaranteed. The MHP Notes personal guarantor may cover multiple parks and each park is treated as a customer. As of December 31, 2021, the Company had concentrations of MHP Notes with two independent third-parties and their respective affiliates that equaled 10.4% and 30.1% of the principal balance outstanding, all of which was secured by the mobile homes. As of December 31, 2020, the Company had concentrations of MHP Notes with one independent third-party and its affiliates that equaled 52.9% of the principal balance outstanding, all of which was secured by the mobile homes.

Recent Accounting Pronouncements

The Company has elected to use longer phase-in periods for the adoption of new or revised financial accounting standards under the JOBS Act as an emerging growth company.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. A lessee should recognize in the balance sheet a liability to make lease payments (the lease liability) and an asset representing its right to use the underlying asset for the lease term. The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from previous requirements. The Company plans to use longer phase-in period for adoption and accordingly this ASU is effective for the Company’s fiscal year beginning January 1, 2022. Modified retrospective application and early adoption is permitted. The Company expects that the adoption of this standard will result in a material increase to assets and liabilities on the balance sheet but will not have a material impact on the statement of operations. While the Company is continuing to assess all the effects of adoption, it currently believes the most significant effects relate to (i) the recognition of new right-of-use assets and lease liabilities on its balance sheet for its property and equipment operating leases and (ii) providing significant new disclosures about its leasing activities.

In June 2016, the FASB issued an accounting standards update 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 plans to use longer phase-in period for adoption and accordingly this ASU is effective for the Company’s fiscal year beginning January 1, 2023. The Company is continuing to evaluate the impact of the adoption of this ASU and is uncertain of the impact on the financial statements and disclosures at this point in time.

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.

CONSUMER LOANS RECEIVABLE

12 Months Ended

Dec. 31, 2021

CONSUMER LOANS RECEIVABLE

CONSUMER LOANS RECEIVABLE

3. CONSUMER LOANS RECEIVABLE

Consumer loans receivable, net of allowance for loan losses and deferred financing fees, consisted of the following at December 31, 2021 and 2020:


	2021		2020
Consumer loans receivable	$	129,119	$	115,639
Loan discount and deferred financing fees		(2,612)		(2,814)
Allowance for loan losses		(884)		(905)
Consumer loans receivable, net	$	125,623	$	111,920

The following table presents a detail of the activity in the allowance for loan losses for the years ended December 31, 2021 and 2020:


	2021		2020
Allowance for loan losses, beginning of period	$	905	$	913
Provision for loan losses		725		819
Charge offs		(746)		(827)
Allowance for loan losses	$	884	$	905

The impaired and general reserve for allowance for loan losses at December 31, 2021 and 2020:


	2021		2020
Total consumer loans	$	129,119	$	115,639
Allowance for loan losses	$	884	$	905
Impaired loans individually evaluated for impairment	$	1,239	$	1,603
Specific reserve against impaired loans	$	533	$	558
Other loans collectively evaluated for allowance	$	127,880	$	114,036
General allowance for loan losses	$	351	$	347

A detailed aging of consumer loans receivable that are past due as of December 31, 2021 and 2020 were as follows:


	2021		%	2020		%
Total consumer loans receivable	$	129,119	100.0	$	115,639	100.0
Past due consumer loans:
31 - 60 days past due	$	594	0.5	$	954	0.8
61 - 90 days past due		407	0.3		221	0.2
91 - 120 days past due		114	0.1		141	0.1
Greater than 120 days past due		967	0.7		1,261	1.1
Total past due	$	2,082	1.6	$	2,577	2.2

NOTES RECEIVABLE FROM MOBILE HOME PARKS ("MHP Notes")

12 Months Ended

Dec. 31, 2021

NOTES RECEIVABLE FROM MOBILE HOME PARKS ("MHP Notes")

NOTES RECEIVABLE FROM MOBILE HOME PARKS ("MHP Notes")

4. NOTES RECEIVABLE FROM MOBILE HOME PARKS (“MHP Notes”)

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 reserve composed of specific and general reserve amounts. As of December 31, 2021 and 2020, the MHP Note balance is presented net of unamortized finance fees of $445 and $183, respectively. The finance fees are amortized over the life of the MHP Notes.

There were minimal past due balances on the MHP Notes as of December 31, 2021 and 2020, respectively, and no charge offs were recorded for MHP Notes during the for the years ended December 31, 2021 and 2020, respectively. Allowance for loan loss is considered immaterial and accordingly no loss is recorded against the MHP Notes as of December 31, 2021 and 2020.

OTHER NOTES RECEIVABLE

12 Months Ended

Dec. 31, 2021

OTHER NOTES RECEIVABLE

OTHER NOTES RECEIVABLE

5. Other Notes Receivable

Other notes receivable, net of allowance for loan losses and deferred financing fees, consisted of the following at December 31, 2021 and 2020:


	2021		2020
Outstanding principal balance	$	42,074	$	15,179
Allowance for loan losses		(74)		(75)
Total	$	42,000	$	15,104

INVENTORIES

12 Months Ended

Dec. 31, 2021

INVENTORIES

INVENTORIES

6. INVENTORIES

Inventories consisted of the following at December 31, 2021 and 2020:


	2021		2020
Raw materials	$	15,431	$	12,713
Work in progress		714		412
Finished goods (1)		28,195		23,375
Allowance for obsolescence		(432)		(620)
Total	$	43,908	$	35,880

(1) Finished goods includes $2,678 and $8,656 as of December 31, 2021 and 2020, respectively, held for more than twelve months and classified as long-term.

PROPERTY, PLANT AND EQUIPMENT

12 Months Ended

Dec. 31, 2021

PROPERTY, PLANT AND EQUIPMENT

PROPERTY, PLANT AND EQUIPMENT

7. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following at December 31, 2021 and 2020:


	2021		2020
Land	$	14,949	$	12,968
Buildings and leasehold improvements		13,722		10,700
Vehicles		1,682		1,664
Machinery and equipment		5,058		4,127
Furniture and fixtures		298		298
Total		35,709		29,757
Less accumulated depreciation		(8,193)		(7,141)
Total property, plant and equipment	$	27,516	$	22,616

Depreciation expense was $1,145 with $450 included as a component of cost of product sales for the year ended December 31, 2021 and $1,013 with $409 included as a component of cost of product sales for the year ended December 31, 2020.

OTHER ASSETS

12 Months Ended

Dec. 31, 2021

OTHER ASSETS.

OTHER ASSETS

8. OTHER ASSETS

Other assets consisted of the following at December 31, 2021 and 2020:


	2021		2020
Leased property, net of accumulated depreciation	$	9,419	$	7,218
Prepaid rent		248		274
Other		332		331
Repossessed homes		517		1,395
Total	$	10,516	$	9,218

Depreciation expense for leased property was $442 and $199 for the years ended December 31, 2021 and 2020, respectively.

ACCRUED LIABILITIES

12 Months Ended

Dec. 31, 2021

ACCRUED LIABILITIES.

ACCRUED LIABILITIES

9. ACCRUED LIABILITIES

Accrued liabilities consist of the following at December 31, 2021 and 2020:


	2021		2020
Warranty reserve	$	2,876	$	2,594
Litigation reserve		2,764		899
Payroll		1,685		2,428
Portfolio taxes and title		2,467		2,060
Property tax		546		401
Dealer rebates		1,160		215
Sales tax		310		683
Federal and state income taxes		7,445		5,603
Other		1,433		607
Total accrued liabilities	$	20,686	$	15,490
Accrued liabilities, non-current		—		630
Accrued liabilities, current	$	20,686	$	14,860

DEBT

12 Months Ended

Dec. 31, 2021

DEBT

DEBT

10. DEBT

Lines of Credit

Revolver 1

At December 31, 2019, the Company had a revolving line of credit (“Revolver 1”) with Capital One, N.A. with a maximum credit limit of $45,000 and a maturity date of May 11, 2020. On March 30, 2020, the Company entered into an agreement with Capital One, N.A. to replace Revolver 1 with a new revolving line of credit (“New Revolver”). The New Revolver has a maximum credit limit of $70,000 and a maturity date of March 30, 2024. For the period January 1, 2020 through March 30, 2020, Revolver 1 accrued interest at one-month LIBOR plus 2.40%. Amounts available under Revolver 1 were subject to a formula based on eligible consumer loans and MHP Notes and were secured by all accounts receivable and the consumer loans receivable and MHP Notes.

The New Revolver accrues interest at one-month LIBOR plus 2.00%. The interest rates in effect as of December 31, 2021 and 2020 were 2.10% and 2.15%, respectively. As with Revolver 1, amounts available under the New Revolver are subject to a formula based on eligible consumer loans and MHP Notes and are secured by all accounts

receivable and the consumer loans receivable and MHP Notes. The amount of available credit under the New Revolver was $61,841 as of December 31, 2021. In connection with the New Revolver, the Company paid certain arrangement fees and other fees of approximately $295, which were capitalized as unamortized debt issuance costs and will be amortized to interest expense over the life of the New Revolver.

For the years ended December 31, 2021 and 2020, interest expense under the Capital One Revolvers was $887 and $1,020, respectively. The outstanding balance as of December 31, 2021 and 2020 was $8,159 and $36,174, respectively. The New Revolver requires the Company to comply with certain financial and non-financial covenants. As of December 31, 2021, the Company was in compliance with all financial covenants, including that it maintain a tangible net worth of at least $120,000 and that it maintain a ratio of debt to EBITDA of 4 to 1, or less. As of December 31, 2021, the Company was not in compliance with certain non-financial covenants and obtained a waiver from Capital One.

Revolver 2

In April 2016, the Company entered into an agreement with Veritex Community Bank to secure an additional revolving line of credit of $15,000 (“Revolver 2”). Revolver 2 accrues interest at one-month LIBOR plus 2.50% and all unpaid principal and interest is due at maturity on April 4, 2021. Revolver 2 is secured by all finished goods inventory excluding repossessed homes. Amounts available under Revolver 2 are subject to a formula based on eligible inventory. On May 12, 2017, the Company entered into an agreement to increase the line of credit to $20,000. On October 15, 2018, Revolver 2 was amended to extend the maturity date from April 4, 2019 to April 4, 2021. In April 2020, this note was paid in full and the facility was terminated. The amount of available credit under Revolver 2 was $12,028 at March 31, 2020 and the interest rate in effect as of March 31, 2020 was 4.17%. The Company was in compliance with all required covenants as of March 31, 2020. For the year ended December 31, 2020 interest expense was $17. The outstanding balance as of March 31, 2020 was $2,001. The Company was in compliance with the other financial covenants that it maintain a tangible net worth of at least $80,000 when the facility was terminated.

PPP Loan

On April 10, 2020, the Company entered into a loan with Peoples Bank as the lender in an aggregate principal amount of $6,546 (the “Loan”) pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act. The Loan was evidenced by a promissory note (the “Note”) dated April 10, 2020 and had a maturity date of April 10, 2022. The Note had an interest rate of 1.00% per annum, with the first six months of interest deferred. Principal and interest were payable monthly commencing on November 10, 2020 and could be prepaid by the Company at any time prior to maturity with no prepayment penalties. On May 1, 2020, this loan was paid in full.

PILOT Agreement

In December 2016, the Company entered into a Payment in Lieu of Taxes (“PILOT”) agreement commonly offered in Georgia by local community development programs to encourage industry development. The net effect of the PILOT agreement is to provide the Company with incentives through the abatement of local, city and county property taxes and to provide financing for improvements to the Company’s Georgia plant (the “Project”). In connection with the PILOT agreement, the Putman County Development Authority provides a credit facility for up to $10,000 which can be drawn upon to fund Project improvements and capital expenditures as defined in the agreement. If funds are drawn, the Company would pay transactions costs and debt service payments. The PILOT agreement requires interest payments of 6.00% per annum on outstanding balances, which are due each December 1st through maturity on December 1, 2021, at which time all unpaid principal and interest are due. The PILOT agreement is collateralized by the assets of the Project. As of December 31, 2021, the Company had not drawn on this credit facility.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
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+ Details

INCOME TAXES

12 Months Ended

Dec. 31, 2021

INCOME TAXES

INCOME TAXES

11. INCOME TAXES

Significant components of the provision for income taxes are as follows (in thousands):


	Year ended
	December 31,
	2021		2020
Current:
Federal	$	8,443	$	8,885
State		1,280		1,737
Total current income tax provision		9,723		10,622
Deferred:
Federal		934		189
State		99		16
Total deferred income tax provision		1,033		205
Provision for income taxes	$	10,756	$	10,827

A reconciliation of the Company’s effective tax rate from operations to the U.S. federal income tax rate is as follows:


	Year ended
	December 31,
	2021		2020
Federal statutory rate	21.0	%		21.0	%
State income taxes, net of federal tax benefit	1.9			2.8
Energy efficiency credit	(5.2)			(2.3)
Other	-			0.7
Effective tax rate	17.7	%		22.2	%

The tax effects of cumulative temporary differences that give rise to deferred tax assets and liabilities are as follows (in thousands):


	Year ended
	December 31,
	2021		2020
Deferred tax assets:
Allowance for doubtful accounts	$	486	$	599
Reserve accounts		636		134
State taxes		44		263
Payroll taxes		157		297
Uniform capitalization		58		45
Total deferred tax assets		1,381		1,338
Deferred tax liabilities:
Installment sale revenue		(853)		(1,006)
Depreciation		(2,998)		(1,740)
Accrued interest receivable		(518)		(526)
Other		(16)		(37)
Total deferred tax liabilities		(4,385)		(3,309)
Net deferred tax liabilities	$	(3,004)	$	(1,971)

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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+ Details

SHARE BASED COMPENSATION

12 Months Ended

Dec. 31, 2021

SHARE BASED COMPENSATION

SHARE BASED COMPENSATION

12. SHARE BASED COMPENSATION

Pursuant to the Legacy Housing Corporation 2018 Incentive Compensation Plan (the “Compensation 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 and stock appreciation rights. Stock options may be granted with a contractual life of up to ten years. At December 31, 2021, the Company had 9.7 million shares available for grant under the Compensation Plan.

In February 2019, the Company granted 120,000 restricted shares of its common stock to members of senior management. The shares were granted on February 7, 2019 and had a grant date fair value of $1,636. The shares vest at a rate of 14.3% annually, beginning on February 7, 2019, and becoming fully vested on February 7, 2025. During the second quarter of 2020, 42,857 of these restricted shares were forfeited due to the departure of a member of senior management.

The Company granted 2,936 restricted shares of its common stock to the independent directors on the Company’s Board of Directors. The shares were granted on February 7, 2019 and became fully vested on December 13, 2019.

In August 2019, the Company granted 39,526 restricted shares of its common stock to a member of senior management. The shares were granted on August 2, 2019 and had a grant date fair value of $496. The shares vest at a rate of 20.0% annually, beginning on August 2, 2020, becoming fully vested on August 2, 2024. This grant was canceled during the second quarter of 2020 due to the departure of the member of senior management.

In March 2020, the Company granted 1,903 restricted shares of its common stock to the independent directors on the Company’s Board of Directors. The shares were granted on March 27, 2020 and had a grant date fair value of $18. The shares became fully vested on December 13, 2020.

In December 2020, the Company granted 2,022 restricted shares of its common stock to the independent directors on the Company’s Board of Directors. The shares were granted on December 2, 2020 and had a grant date fair value of $30. The shares became fully vested on October 4, 2021.

In November 2021, the Company granted 1,202 restricted shares of its common stock to the independent directors on the Company’s Board of Directors. The shares were granted on November 30, 2021 and had a grant date fair value of $30. The shares become fully vested on October 24, 2022.

The following is a summary of restricted stock units (the “RSU”) activity (in thousands, except per unit data):


	Number of Units		Weighted Average Grant Date Fair Value Per Unit
Nonvested, January 1, 2021	45	$	13.68
Granted	1	$	24.99
Vested	(11)	$	13.86
Nonvested, December 31, 2021	35	$	14.01

As of December 31, 2021, approximately 35,000 RSUs remained unvested. Unrecognized compensation expense related to these RSUs at December 31, 2021 was $390 and is expected to be recognized over 2.95 years.

In February 2019, the Company granted 58,694 incentive stock options to a member of senior management at an exercise price of $13.63 per share. The options vest at a rate of 12.5% annually, beginning on February 7, 2019, and

becoming fully vested on February 7, 2026. All options expire ten years after the date of grant. Weighted-average assumptions used in the Black-Scholes option pricing model for stock options granted were as follows: risk free interest rate of 2.41%; dividend yield of 0.00%; expected volatility of common stock of 65.0% and expected life of options of 7.9 years. During the second quarter of 2020, these options were forfeited due to the departure of a senior manager.

In August 2020, the Company granted 34,626 incentive stock options to a member of senior management at an exercise price of $14.44 per share. The options vest at a rate of 20.0% annually, beginning on August 10, 2021, and becoming fully vested on August 10, 2025. All options expire ten years after the date of grant. Weighted-average assumptions used in the Black-Scholes option pricing model for stock options granted were as follows: risk free interest rate of 0.24%; dividend yield of 0.00%; expected volatility of common stock of 75.0% and expected life of options of 6.5 years.

In September 2021, the Company granted 55,490 incentive stock options to a member of management at an exercise price of $18.02 per share. The options vest at a rate of 10.0% annually, beginning on September 23, 2022, and becoming fully vested on September 23, 2031. All options expire ten years after the date of grant. Weighted-average assumptions used in the Black-Scholes option pricing model for stock options granted were as follows: risk free interest rate of 1.41%; dividend yield of 0.00%; expected volatility of common stock of 75.0% and expected life of options of 7.8 years.

The following is a summary of option activity (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	Aggregate Intrinsic Value
Outstanding, January 1, 2021, nonvested	35	$	14.44	$	8.67	9.61
Granted	55	$	18.02	$	14.07	9.73
Exercised	(7)	$	14.44	$	8.67	—
Outstanding, December 31, 2021, nonvested	83	$	16.83	$	12.27	9.36	$	802
Exercisable, December 31, 2021	—	$	—	$	—	—	$	—

As of December 31, 2021, approximately 83,000 options remain nonvested. Unrecognized compensation expense related to these options at December 31, 2021 was $976 and is expected to be recognized over 9.36 years.

On March 31, 2020, the Company filed a registration statement on Form S-8 to register with the SEC approximately 2.3 million shares of Legacy common stock available for issuance under the 2018 Incentive Compensation Plan. The registration statement became effective upon filing.

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2021

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

13. 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. At December 31, 2021 and 2020, the Company accrued a $373 and $110 liability for incurred but not reported claims, respectively.

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 maximum amount for which the Company was liable under such agreements approximated $4,908 and $140 at December 31, 2021 and 2020, respectively, without reduction for the resale value of the homes. The Company considers its obligations on current contracts to be immaterial and accordingly have not recorded any reserve for repurchase commitment as of December 31, 2021 or 2020.

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 $698 and $602 for the years ended December 31, 2021 and 2020, 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 property is included in other revenue in the Company’s statements of operations and was approximately $394 and $343 for the years ended December 31, 2021 and 2020, respectively.

Future minimum lease commitments under all non-cancelable operating leases for each of the next five years at December 31, 2021, are as follows:


2022	$	632
2023		583
2024		483
2025		447
2026		384
Thereafter		385
Total	$	2,914

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's reasonable estimate of this liability is a range between $2,613 and $5,038 and has included legal reserves of $2,764 and $899 as of December 31, 2021 and 2020, 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.

DERIVATIVES

12 Months Ended

Dec. 31, 2021

DERIVATIVES.

DERIVATIVES

14. DERIVATIVES

On February 2, 2012, the Company entered into a master interest rate swap agreement. The Company elected not to designate the interest rate swap agreements as cash flow hedges and, therefore, gains or losses on the agreements as well as the other offsetting gains or losses on the hedged items attributable to the hedged risk are recognized in current earnings. ASC 815-10, Derivatives and Hedging, requires derivative instruments to be measured at fair value and recorded in the statements of financial position as either assets or liabilities. The Company entered into interest rate swap agreement with Capital One Bank on June 12, 2017 to fix the variable rate portion for $8,000 of the line of credit. This

interest rate swap agreement matured on May 11, 2020. Included in the statements of operations for the years ended December 31, 2020 is a loss of $15 which was the result of the changes in the fair values of the interest rate swap agreement.

EARNINGS PER SHARE

12 Months Ended

Dec. 31, 2021

EARNINGS PER SHARE

EARNINGS PER SHARE

15. 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. 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.


	Year ended
	December 31,
	2021		2020
Numerator:
Net income (in 000's)	$	49,871	$	37,995
Denominator:
Basic weighted-average common shares outstanding		24,204,437		24,226,128
Effect of dilutive securities:
Restricted stock grants		12,846		—
Stock options		58,706		10,267
Diluted weighted-average common shares outstanding		24,275,989		24,236,395
Earnings per share attributable to Legacy Housing Corporation
Basic	$	2.06	$	1.57
Diluted	$	2.05	$	1.57

The diluted earnings per share calculation excludes zero and 35,935 potential shares related to stock grants and stock options for the years ended December 31, 2021 and 2020, respectively, because the effect of including these potential shares would be antidilutive.

RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2021

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

16. RELATED PARTY TRANSACTIONS

Bell Mobile Homes, a retailer owned by one of the Company’s significant shareholders, purchases manufactured homes from the Company. Accounts receivable balances due from Bell Mobile Homes were $1 and $1 as of December 31, 2021 and 2020, respectively. Accounts payable balances due to Bell Mobile Homes for maintenance and related services were $49 and $61 as of December 31, 2021 and 2020, respectively. Home sales to Bell Mobile Homes were $3,724 and $2,631 for the years ended December 31, 2021 and 2020, respectively.

Shipley Bros., Ltd. (“Shipley Bros.”), a retailer owned by one of the Company’s significant shareholders, purchases manufactured homes from the Company. Home sales to Shipley Bros. were $2,825 and $1,786 as of December 31, 2021 and 2020, respectively. There were no accounts receivable balances or accounts payable balances due from/to Shipley Bros. as of December 31, 2021 and 2020, respectively.

SUBSEQUENT EVENTS

12 Months Ended

Dec. 31, 2021

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

17. SUBSEQUENT EVENTS

On January 5, 2022, the Company entered into an amended and restated employment agreement (the “Employment Agreement”) with Curtis D. Hodgson, Executive Chairman of the Company. The Employment Agreement provides for a term that commences on January 1, 2022 and expires on June 16, 2024, unless earlier terminated (the “Employment Period”). Pursuant to the Employment Agreement, Mr. Hodgson will continue to serve in his current

position with the Company, as set forth above, and will have duties, responsibilities, and authority that are customary to such position.

The Employment Agreement provides for Mr. Hodgson to receive a base salary of $200,000 per year and a signing bonus of 150,000 shares of restricted stock, which shall be vested upon grant. Mr. Hodgson is also eligible for an annual incentive bonus and equity awards. The annual inventive bonus will be determined by the Board but will not exceed 100% of Mr. Hodgson’s base salary. An equity award of 175,000 shares of the Company’s restricted stock will be granted if the Company’s stock price reaches and remains for a period of fifteen consecutive market days at a closing price of $36 per share. An additional equity award of 175,000 shares of the Company’s restricted stock will be granted if the Company’s stock price reaches and remains for a period of fifteen consecutive market days at a closing price of $48 per share.

On May 30, 2022, the Company submitted to Nasdaq a plan to regain compliance with Nasdaq Listing Rule 5250(c)(1) (the “Rule”) regarding the Company’s failure to file timely Form 10-K for the period ending December 31, 2021 and Form 10-Q for the period ending on March 31, 2022. On June 9, 2022, the Company received a response from Nasdaq informing the Company that Nasdaq granted an exception to the filing requirements set forth in the Rule that allows the Company to file these reports and any other required filings as required by the Rule on or before September 27, 2022.

On June 21, 2022, the Company received a Reservation of Rights notice from Capital One, N.A. The letter stated that the Company’s New Revolver was in default. The default condition occurred due to the Company’s failure to timely file the 10K and deliver certain financial statement to Capital One, N.A. On July 28, 2022, the Company executed a forbearance agreement with Capital One, N.A.

In connection with the preparation of these financial statements, an evaluation of subsequent events was performed through the date of filing. The Company recently updated its management of escrow collections. Historically, escrow collections were deposited in an unsegregated deposit account subject to the Company's credit agreement with Capital One, N.A. On June 28, 2022, the Company segregated escrow collections by purchasing an $8.5M certificate of deposit that is not subject to the credit agreement. The certificate of deposit principal amount will be adjusted periodically. The Company will continue to hold escrow collections separately from its other operating funds where required by law..

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2021

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

Basis of Presentation

Use of Estimates

Use of Estimates

Segment Reporting

Segment Reporting

Cash and Cash Equivalents

Accounts Receivable

Included in accounts receivable are receivables from direct sales of mobile homes and sales of parts and supplies to customers, consignment fees and interest receivables.

Consumer Loans Receivable

The Company uses payment history to monitor the credit quality of the consumer loans on an ongoing basis.

Allowance for Loan Losses—Consumer Loans Receivable

Repossessed homes totaled $517 and $1,395 as of December 31, 2021 and 2020, respectively, and are included in other assets in the balance sheets.

Notes Receivable from Mobile Home Parks

Allowance for Loan Losses—MHP Notes

Other Notes Receivable

Inventories

Property, Plant, and Equipment

Impairment of Long-Lived Assets

Dealer Incentive Liability

Product Warranties

A tabular presentation of the activity within the warranty liability account for the years ended December 31, 2021 and 2020 is presented below:


	2021		2020
Warranty liability, beginning of period	$	2,594	$	3,078
Product warranty accrued		2,152		1,834
Warranty costs incurred		(1,870)		(2,318)
Warranty liability, end of period	$	2,876	$	2,594

Advertising Costs

The Company expenses all advertising and marketing expenses in the period incurred. Advertising costs for the years ended December 31, 2021 and 2020 were $367 and $1,193, respectively.

Fair Value Measurements


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; (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.
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.

Fair Value of Financial Instruments

Revenue Recognition

For the years ended December 31, 2021 and 2020, sales to an independent third-party and its affiliates accounted for $9,165 or 5.5% and $41,263 or 28.7% of our product sales, respectively.

Disaggregation of Revenue. The following table summarizes customer contract revenues disaggregated by source of the revenue for the years ended December 31, 2021 and 2020:


	2021		2020
Product sales:
Direct sales	$	25,173	$	11,203
Commercial sales		46,835		70,186
Consignment sales		63,496		43,801
Retail store sales		20,011		17,436
Other (1)		10,480		4,876
Total product sales		165,995		147,502
Consumer and MHP loans interest:
Interest - consumer installment notes		16,658		15,979
Interest - MHP notes		10,537		9,381
Total consumer and MHP loans interest		27,195		25,360
Other		4,317		3,862
Total net revenue	$	197,507	$	176,724

(1)	Other product sales revenue from ancillary products and services including parts, freight and other services

Reserve for Repurchase Commitments

Other Income, Net

Other income primarily consists of interest related to other notes receivable balances and interest income earned on cash balances, reduced by interest expenses.

Interest Income

Share-Based Compensation

Share-Based Compensation

Shipping and Handling Costs

Income Taxes

Concentrations

Recent Accounting Pronouncements

The Company has elected to use longer phase-in periods for the adoption of new or revised financial accounting standards under the JOBS Act as an emerging growth company.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2021

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of the activity within the warranty liability account


	2021		2020
Warranty liability, beginning of period	$	2,594	$	3,078
Product warranty accrued		2,152		1,834
Warranty costs incurred		(1,870)		(2,318)
Warranty liability, end of period	$	2,876	$	2,594

Schedule of disaggregation of revenue


	2021		2020
Product sales:
Direct sales	$	25,173	$	11,203
Commercial sales		46,835		70,186
Consignment sales		63,496		43,801
Retail store sales		20,011		17,436
Other (1)		10,480		4,876
Total product sales		165,995		147,502
Consumer and MHP loans interest:
Interest - consumer installment notes		16,658		15,979
Interest - MHP notes		10,537		9,381
Total consumer and MHP loans interest		27,195		25,360
Other		4,317		3,862
Total net revenue	$	197,507	$	176,724

(1)	Other product sales revenue from ancillary products and services including parts, freight and other services

CONSUMER LOANS RECEIVABLE (Tables)

12 Months Ended

Dec. 31, 2021

CONSUMER LOANS RECEIVABLE

Schedule of consumer loans, net of allowance for loan losses and deferred financing fees


	2021		2020
Consumer loans receivable	$	129,119	$	115,639
Loan discount and deferred financing fees		(2,612)		(2,814)
Allowance for loan losses		(884)		(905)
Consumer loans receivable, net	$	125,623	$	111,920

Schedule of allowance for loan losses


	2021		2020
Allowance for loan losses, beginning of period	$	905	$	913
Provision for loan losses		725		819
Charge offs		(746)		(827)
Allowance for loan losses	$	884	$	905

Schedule of impaired and general reserve for allowance for loan losses


	2021		2020
Total consumer loans	$	129,119	$	115,639
Allowance for loan losses	$	884	$	905
Impaired loans individually evaluated for impairment	$	1,239	$	1,603
Specific reserve against impaired loans	$	533	$	558
Other loans collectively evaluated for allowance	$	127,880	$	114,036
General allowance for loan losses	$	351	$	347

Schedule of consumer loans receivable that are past due


	2021		%	2020		%
Total consumer loans receivable	$	129,119	100.0	$	115,639	100.0
Past due consumer loans:
31 - 60 days past due	$	594	0.5	$	954	0.8
61 - 90 days past due		407	0.3		221	0.2
91 - 120 days past due		114	0.1		141	0.1
Greater than 120 days past due		967	0.7		1,261	1.1
Total past due	$	2,082	1.6	$	2,577	2.2

OTHER NOTES RECEIVABLE (Tables)

12 Months Ended

Dec. 31, 2021

OTHER NOTES RECEIVABLE

Schedule of other notes receivable, net of allowance for loan losses and deferred financing fees


	2021		2020
Outstanding principal balance	$	42,074	$	15,179
Allowance for loan losses		(74)		(75)
Total	$	42,000	$	15,104

INVENTORIES (Tables)

12 Months Ended

Dec. 31, 2021

INVENTORIES

Schedule of inventory


	2021		2020
Raw materials	$	15,431	$	12,713
Work in progress		714		412
Finished goods (1)		28,195		23,375
Allowance for obsolescence		(432)		(620)
Total	$	43,908	$	35,880

(1) Finished goods includes $2,678 and $8,656 as of December 31, 2021 and 2020, respectively, held for more than twelve months and classified as long-term.

PROPERTY, PLANT AND EQUIPMENT (Tables)

12 Months Ended

Dec. 31, 2021

PROPERTY, PLANT AND EQUIPMENT

Schedule of property, plant and equipment


	2021		2020
Land	$	14,949	$	12,968
Buildings and leasehold improvements		13,722		10,700
Vehicles		1,682		1,664
Machinery and equipment		5,058		4,127
Furniture and fixtures		298		298
Total		35,709		29,757
Less accumulated depreciation		(8,193)		(7,141)
Total property, plant and equipment	$	27,516	$	22,616

OTHER ASSETS (Tables)

12 Months Ended

Dec. 31, 2021

OTHER ASSETS.

Schedule of Other Assets


	2021		2020
Leased property, net of accumulated depreciation	$	9,419	$	7,218
Prepaid rent		248		274
Other		332		331
Repossessed homes		517		1,395
Total	$	10,516	$	9,218

ACCRUED LIABILITIES (Tables)

12 Months Ended

Dec. 31, 2021

ACCRUED LIABILITIES.

Schedule of accrued liabilities


	2021		2020
Warranty reserve	$	2,876	$	2,594
Litigation reserve		2,764		899
Payroll		1,685		2,428
Portfolio taxes and title		2,467		2,060
Property tax		546		401
Dealer rebates		1,160		215
Sales tax		310		683
Federal and state income taxes		7,445		5,603
Other		1,433		607
Total accrued liabilities	$	20,686	$	15,490
Accrued liabilities, non-current		—		630
Accrued liabilities, current	$	20,686	$	14,860

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2021

INCOME TAXES

Summary of significant components of the provision for income taxes

Significant components of the provision for income taxes are as follows (in thousands):


	Year ended
	December 31,
	2021		2020
Current:
Federal	$	8,443	$	8,885
State		1,280		1,737
Total current income tax provision		9,723		10,622
Deferred:
Federal		934		189
State		99		16
Total deferred income tax provision		1,033		205
Provision for income taxes	$	10,756	$	10,827

Schedule of reconciliation of the Company's effective tax rate from operations to the U.S. federal income tax rate


	Year ended
	December 31,
	2021		2020
Federal statutory rate	21.0	%		21.0	%
State income taxes, net of federal tax benefit	1.9			2.8
Energy efficiency credit	(5.2)			(2.3)
Other	-			0.7
Effective tax rate	17.7	%		22.2	%

Summary of deferred tax assets and liabilities

The tax effects of cumulative temporary differences that give rise to deferred tax assets and liabilities are as follows (in thousands):


	Year ended
	December 31,
	2021		2020
Deferred tax assets:
Allowance for doubtful accounts	$	486	$	599
Reserve accounts		636		134
State taxes		44		263
Payroll taxes		157		297
Uniform capitalization		58		45
Total deferred tax assets		1,381		1,338
Deferred tax liabilities:
Installment sale revenue		(853)		(1,006)
Depreciation		(2,998)		(1,740)
Accrued interest receivable		(518)		(526)
Other		(16)		(37)
Total deferred tax liabilities		(4,385)		(3,309)
Net deferred tax liabilities	$	(3,004)	$	(1,971)

SHARE BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2021

SHARE BASED COMPENSATION

Schedule of restricted stock units activity

The following is a summary of restricted stock units (the “RSU”) activity (in thousands, except per unit data):


	Number of Units		Weighted Average Grant Date Fair Value Per Unit
Nonvested, January 1, 2021	45	$	13.68
Granted	1	$	24.99
Vested	(11)	$	13.86
Nonvested, December 31, 2021	35	$	14.01

Schedule of stock option activity

The following is a summary of option activity (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	Aggregate Intrinsic Value
Outstanding, January 1, 2021, nonvested	35	$	14.44	$	8.67	9.61
Granted	55	$	18.02	$	14.07	9.73
Exercised	(7)	$	14.44	$	8.67	—
Outstanding, December 31, 2021, nonvested	83	$	16.83	$	12.27	9.36	$	802
Exercisable, December 31, 2021	—	$	—	$	—	—	$	—

COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Dec. 31, 2021

COMMITMENTS AND CONTINGENCIES

Schedule of future minimum lease commitments

Future minimum lease commitments under all non-cancelable operating leases for each of the next five years at December 31, 2021, are as follows:


2022	$	632
2023		583
2024		483
2025		447
2026		384
Thereafter		385
Total	$	2,914

EARNINGS PER SHARE (Tables)

12 Months Ended

Dec. 31, 2021

EARNINGS PER SHARE

Summary of reconciliation of the numerators and denominators used in the computations of both basic and diluted EPS


	Year ended
	December 31,
	2021		2020
Numerator:
Net income (in 000's)	$	49,871	$	37,995
Denominator:
Basic weighted-average common shares outstanding		24,204,437		24,226,128
Effect of dilutive securities:
Restricted stock grants		12,846		—
Stock options		58,706		10,267
Diluted weighted-average common shares outstanding		24,275,989		24,236,395
Earnings per share attributable to Legacy Housing Corporation
Basic	$	2.06	$	1.57
Diluted	$	2.05	$	1.57

NATURE OF OPERATIONS - IPO and Corporate Conversion (Details) - USD ($) $ / shares in Units, $ in Thousands			1 Months Ended		12 Months Ended
	Apr. 17, 2019	Jan. 01, 2018	Jan. 31, 2019	Dec. 31, 2018	Dec. 31, 2020
Nature of operations
Shares issued upon incorporation (in shares)		20,000,000
Shares repurchased	300,000				145,065
Share repurchase price (in dollars per share)	$ 10.20				$ 9.77
Value of shares authorized for repurchase					$ 10,000
IPO
Nature of operations
Shares issued from sale of common stock			600,000	4,000,000
Share price (in dollars per share)			$ 12.00	$ 12.00
Offering costs			$ 505	$ 4,504
Proceeds from IPO net of underwriting discounts and offering expenses			$ 6,695	$ 43,492

NATURE OF OPERATIONS - Segment Reporting (Details)	12 Months Ended
NATURE OF OPERATIONS - Segment Reporting (Details)	Dec. 31, 2021 segment
NATURE OF OPERATIONS
Number of reportable segment	1

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Cash and Cash Equivalents (Details) $ in Thousands	Dec. 31, 2021 USD ($) item
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Number of banks exceeding the FDIC limit \| item	1
Cash in excess of FDIC limit \| $	$ 490

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounts Receivable, Consumer Loans Receivable, Notes Receivable from Mobile Home Parks, Other Notes Receivable (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2021 USD ($) item	Dec. 31, 2020 USD ($) item
Accounts Receivable
Credit period	30 days
Allowance for doubtful accounts	$ 343	$ 97
Consumer Loans Receivable
Average contractual interest rate	13.50%	13.80%
Escrow liability	$ 9,350	$ 7,729
Number of components comprising the allowance for loan losses \| item	2
General reserve calculation, period of historical loss rate	3 years
Principal outstanding on consumer loans	$ 1,239	1,603
Repossessed Assets	517	1,395
Impaired loans individually evaluated for impairment	1,239	1,603
Financial Asset, Past Due [Member]
Consumer Loans Receivable
Consumer loans receivable	2,082	2,577
31 - 60 days past due
Consumer Loans Receivable
Consumer loans receivable	594	954
61 - 90 days past due
Consumer Loans Receivable
Consumer loans receivable	407	221
91 - 120 days past due
Consumer Loans Receivable
Consumer loans receivable	114	141
Greater than 120 days past due
Consumer Loans Receivable
Consumer loans receivable	$ 967	1,261
Minimum
Consumer Loans Receivable
Consumer loans receivable term	2 years
Maximum
Consumer Loans Receivable
Consumer loans receivable term	30 years
Notes Receivable from Mobile Home Parks
Consumer Loans Receivable
Repossessed Assets	$ 0	$ 0
Note receivable with fixed rate of interest	$ 83,000
Interest rate spread on the MHP Notes	4.00%
Interest rate on the MHP Notes	7.60%	7.70%
Charge offs	$ 0	$ 0
Allowance for loan losses	0	0
Impaired loans individually evaluated for impairment	$ 0	$ 0
Notes Receivable from Mobile Home Parks \| Minimum
Consumer Loans Receivable
Fixed rate of interest (as a percent)	6.90%
Interest rate spread (as a percent)	8.00%
Term of notes receivables	1 year	1 year
Notes Receivable from Mobile Home Parks \| Maximum
Consumer Loans Receivable
Fixed rate of interest (as a percent)	8.90%
Term of notes receivables	19 years	19 years
Other Note Receivable
Consumer Loans Receivable
Allowance for loan losses	$ 74	$ 75
Impaired loans individually evaluated for impairment	0	0
Consumer loans receivable	42,074	15,179
Other Note Receivable \| Financial Asset, Past Due [Member]
Consumer Loans Receivable
Consumer loans receivable	$ 0	$ 0
Other Note Receivable \| Minimum
Consumer Loans Receivable
Interest rate on the other notes	5.00%
Other Note Receivable \| Maximum
Consumer Loans Receivable
Interest rate on the other notes	12.00%
Notes Receivable from Mobile Home Parks \| Credit concentration risk \| Independent third party and affiliates
Consumer Loans Receivable
Number of Independent third parties \| item	2	1
Concentration risk percentage		52.90%
Notes Receivable from Mobile Home Parks \| Credit concentration risk \| Independent third party and affiliates \| Independent Third Party One
Consumer Loans Receivable
Concentration risk percentage	10.40%
Notes Receivable from Mobile Home Parks \| Credit concentration risk \| Independent third party and affiliates \| Independent Third Party Two
Consumer Loans Receivable
Concentration risk percentage	30.10%

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Inventory, Property, plant and equipment, Impairment of Long Lived Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Inventories
Noncurrent finished goods inventory	$ 2,678	$ 8,656
Impairment for long-lived assets	$ 0	$ 0
Buildings and improvements \| Minimum
Inventories
Useful lives	30 years
Buildings and improvements \| Maximum
Inventories
Useful lives	39 years
Vehicles
Inventories
Useful lives	5 years
Machinery and equipment
Inventories
Useful lives	7 years
Furniture and fixtures
Inventories
Useful lives	7 years

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Dealer Incentive Liability, Advertising Costs (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Dealer Incentive Liability
Dealer incentive liability	$ 4,336	$ 4,242
Dealer incentive expense	$ 1,235	$ 336

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Product Warranty (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Term of product warranty	1 year
Warranty liability, beginning of period	$ 2,594	$ 3,078
Product warranty accrued	2,152	1,834
Warranty costs incurred	(1,870)	(2,318)
Warranty liability, end of period	2,876	2,594
Advertising Costs	$ 367	$ 1,193

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fair value of financial instruments (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Consumer Loan \| Fair Value \| Level 3
Fair value of financial instruments
Loans	$ 125,600	$ 115,000
Consumer Loan \| Book Value
Fair value of financial instruments
Loans	125,623	111,920
Notes Receivable from Mobile Home Parks \| Fair Value \| Level 3
Fair value of financial instruments
Notes receivable	83,000	108,000
Notes Receivable from Mobile Home Parks \| Book Value
Fair value of financial instruments
Notes receivable	83,773	109,806
Other Note Receivable \| Fair Value \| Level 3
Fair value of financial instruments
Notes receivable	38,500	15,000
Other Note Receivable \| Book Value
Fair value of financial instruments
Notes receivable	$ 38,886	$ 15,104

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognition (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Disaggregation of revenue
Incremental costs of obtaining a contract	true
Term Of Product Warranty	1 year
Product sales	$ 165,995	$ 147,502
Dealer commission, reimbursed dealer expenses and other similar costs	11,303	24,165
Revenue from contract with customer product and service benchmark \| Customer concentration risk \| Independent third party and affiliates
Disaggregation of revenue
Product sales	$ 9,165	$ 41,263
Concentration risk percentage	5.50%	28.70%

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8906-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9031-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9038-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Disaggregation of Revenue
Product sales	$ 165,995	$ 147,502
Consumer and MHP loans interest:
Interest - consumer installments notes	16,658	15,979
Interest - MHP notes	10,537	9,381
Total consumer and MHP loans interest	27,195	25,360
Other	4,317	3,862
Total net revenue	197,507	176,724
Direct sales
Disaggregation of Revenue
Product sales	25,173	11,203
Commercial sales
Disaggregation of Revenue
Product sales	46,835	70,186
Consignment sales
Disaggregation of Revenue
Product sales	63,496	43,801
Retail store sales
Disaggregation of Revenue
Product sales	20,011	17,436
Other
Disaggregation of Revenue
Product sales	$ 10,480	$ 4,876

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Shipping and Handling Costs & Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Shipping and handling costs	$ 1,981	$ 706
Uncertain tax positions	$ 0	$ 0	$ 0	$ 0

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentrations (Details) - Notes Receivable from Mobile Home Parks - Independent third party and affiliates - Credit concentration risk - item	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Number of Independent third parties	2	1
Concentration risk percentage		52.90%
Independent Third Party One
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration risk percentage	10.40%
Independent Third Party Two
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration risk percentage	30.10%

CONSUMER LOANS - Consumer loans receivable, net (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
CONSUMER LOANS RECEIVABLE
Consumer loans receivable	$ 129,119	$ 115,639
Loan discount and deferred financing fees	(2,612)	(2,814)
Allowance for loan losses	(884)	(905)	$ (913)
Consumer loans receivable, net	$ 125,623	$ 111,920

CONSUMER LOANS - Allowance for loan losses (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
CONSUMER LOANS RECEIVABLE
Allowance for loan losses, beginning of period	$ 905	$ 913
Provision for loan losses	725	819
Charge offs	(746)	(827)
Allowance for loan losses, end of period	$ 884	$ 905

CONSUMER LOANS - Impaired and general reserve for allowance for loan losses (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
CONSUMER LOANS RECEIVABLE
Total consumer loans receivable	$ 129,119	$ 115,639
Allowance for loan losses	884	905	$ 913
Impaired loans individually evaluated for impairment	1,239	1,603
Specific reserve against impaired loans	533	558
Other loans collectively evaluated for allowance	127,880	114,036
General allowance for loan losses	$ 351	$ 347

CONSUMER LOANS - Aging of consumer loans receivable (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Past due consumer loans:
Total consumer loans receivable	$ 129,119	$ 115,639
Total consumer loans receivable (as a percent)	100.00%	100.00%
Financial Asset, Past Due [Member]
Past due consumer loans:
Consumer loans receivable	$ 2,082	$ 2,577
Consumer loans receivable past due (Percent)	1.60%	2.20%
31 - 60 days past due
Past due consumer loans:
Consumer loans receivable	$ 594	$ 954
Consumer loans receivable past due (Percent)	0.50%	0.80%
61 - 90 days past due
Past due consumer loans:
Consumer loans receivable	$ 407	$ 221
Consumer loans receivable past due (Percent)	0.30%	0.20%
91 - 120 days past due
Past due consumer loans:
Consumer loans receivable	$ 114	$ 141
Consumer loans receivable past due (Percent)	0.10%	0.10%
Greater than 120 days past due
Past due consumer loans:
Consumer loans receivable	$ 967	$ 1,261
Consumer loans receivable past due (Percent)	0.70%	1.10%

NOTES RECEIVABLE FROM MOBILE HOME PARKS ("MHP Notes") (Details) - Notes Receivable from Mobile Home Parks - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Notes Receivable
Unamortized finance fees	$ 445	$ 183
Charge offs	0	0
Allowance for loan losses	$ 0	$ 0

- Definition

Amount of allowance for credit loss on financing receivable. Excludes allowance for financing receivable covered under loss sharing agreement.

+ References + Details

OTHER NOTES RECEIVABLE (Details) - Other Note Receivable - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Notes Receivable
Outstanding principal balance	$ 42,074	$ 15,179
Allowance for loan losses	(74)	(75)
Total	$ 42,000	$ 15,104

- Definition

Amount of allowance for credit loss on financing receivable. Excludes allowance for financing receivable covered under loss sharing agreement.

+ References + Details

- Definition

Amount, before allowance for credit loss, of financing receivable.

+ References + Details

INVENTORIES (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
INVENTORIES
Raw materials	$ 15,431	$ 12,713
Work in progress	714	412
Finished goods (1)	28,195	23,375
Allowance for obsolescence	(432)	(620)
Total	43,908	35,880
Inventories, net	$ 2,678	$ 8,656

PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
PROPERTY, PLANT AND EQUIPMENT
Total	$ 35,709	$ 29,757
Less accumulated depreciation	(8,193)	(7,141)
Total property, plant and equipment	27,516	22,616
Depreciation expense	1,145	1,013
Cost of product sales
PROPERTY, PLANT AND EQUIPMENT
Depreciation expense	450	409
Land
PROPERTY, PLANT AND EQUIPMENT
Total	14,949	12,968
Buildings and leasehold improvements
PROPERTY, PLANT AND EQUIPMENT
Total	13,722	10,700
Vehicles
PROPERTY, PLANT AND EQUIPMENT
Total	1,682	1,664
Machinery and equipment
PROPERTY, PLANT AND EQUIPMENT
Total	5,058	4,127
Furniture and fixtures
PROPERTY, PLANT AND EQUIPMENT
Total	$ 298	$ 298

OTHER ASSETS (Details) - USD ($) $ in Thousands	12 Months Ended
OTHER ASSETS (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
OTHER ASSETS.
Leased property, net of accumulated depreciation	$ 9,419	$ 7,218
Prepaid rent	248	274
Other	332	331
Repossessed homes	517	1,395
Total	10,516	9,218
Depreciation expense on leased property	$ 442	$ 199

ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
ACCRUED LIABILITIES.
Warranty reserve	$ 2,876	$ 2,594
Litigation reserve	2,764	899
Payroll	1,685	2,428
Portfolio taxes and title	2,467	2,060
Property tax	546	401
Dealer rebates	1,160	215
Sales tax	310	683
Federal and state income taxes	7,445	5,603
Other	1,433	607
Total	20,686	15,490
Accrued liabilities, non-current		630
Accrued Liabilities, Current	$ 20,686	$ 14,860

DEBT - Lines of Credit (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
DEBT - Lines of Credit (Details) - USD ($) $ in Thousands	Mar. 30, 2020	Dec. 31, 2021	Dec. 31, 2020	Mar. 31, 2020	Dec. 31, 2019	May 12, 2017	Apr. 30, 2016
Revolver 1
Lines of Credit
Maximum borrowing capacity	$ 70,000				$ 45,000
Effective interest rate		2.10%	2.15%
Amount of available credit		$ 61,841
Interest expense		887	$ 1,020
Outstanding balance		8,159	36,174
Tangible net worth		$ 120,000
Debt to EBITDA ratio		4
Deferred debt issuance costs		$ 295
Revolver 1 \| London Interbank Offered Rate (LIBOR)
Lines of Credit
Spread rate	2.40%	2.00%
Revolver 2
Lines of Credit
Maximum borrowing capacity						$ 20,000	$ 15,000
Effective interest rate				4.17%
Amount of available credit				$ 12,028
Interest expense			$ 17
Outstanding balance				$ 2,001
Tangible net worth		$ 80,000
Revolver 2 \| London Interbank Offered Rate (LIBOR)
Lines of Credit
Spread rate		2.50%

DEBT - PPP Loans (Details) - USD ($)	Apr. 10, 2020	Dec. 31, 2016
Paycheck Protection Program
Notes Payable
Face amount	$ 6,546
Interest rate	1.00%
Period of deferred interest	6 months
Prepayment penalties	$ 0
PILOT Agreement
Notes Payable
Maximum borrowing capacity		$ 10,000,000
Interest rate		6.00%

INCOME TAXES (Details) - USD ($) $ in Thousands	12 Months Ended
INCOME TAXES (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Current:
Federal	$ 8,443	$ 8,885
State	1,280	1,737
Total current income tax provision	9,723	10,622
Deferred:
Federal	934	189
State	99	16
Total deferred income tax provision	1,033	205
Provision for income taxes	$ 10,756	$ 10,827
Effective Income Tax Rate Reconciliation
Federal statutory rate	21.00%	21.00%
State income taxes, net of federal tax benefit	1.90%	2.80%
Energy efficiency credit	(5.20%)	(2.30%)
Other		0.70%
Effective tax rate (as a percent)	17.70%	22.20%
Deferred tax assets:
Allowance for doubtful accounts	$ 486	$ 599
Reserve accounts	636	134
State taxes	44	263
Payroll taxes	157	297
Uniform capitalization	58	45
Total deferred tax assets	1,381	1,338
Deferred tax liabilities:
Installment sale revenue	(853)	(1,006)
Depreciation	(2,998)	(1,740)
Accrued interest receivable	(518)	(526)
Other	(16)	(37)
Total deferred tax liabilities	(4,385)	(3,309)
Net deferred tax liabilities	$ (3,004)	$ (1,971)

SHARE BASED COMPENSATION - Plan (Details) - USD ($) $ in Thousands								3 Months Ended	12 Months Ended
	Nov. 30, 2021	Sep. 23, 2021	Dec. 02, 2020	Aug. 10, 2020	Mar. 27, 2020	Aug. 02, 2019	Feb. 07, 2019	Jun. 30, 2020	Dec. 31, 2021
SHARE-BASED COMPENSATION
Number of shares may be issued to employees, directors, consultants and nonemployee service providers in the form of stock options, stock and stock appreciation rights									10,000,000.0
Number of shares available for grant									9,700,000
Stock options
SHARE-BASED COMPENSATION
Contractual life									10 years
Stock options \| Senior management
SHARE-BASED COMPENSATION
Contractual life		10 years		10 years			10 years
Vesting percentage		10.00%		20.00%			12.50%
Restricted shares \| Senior management
SHARE-BASED COMPENSATION
Restricted shares granted (in shares)						39,526	120,000
Grant date fair value						$ 496	$ 1,636
Vesting percentage						20.00%	14.30%
Restricted shares forfeited (in shares)								42,857
Restricted shares \| Independent directors
SHARE-BASED COMPENSATION
Restricted shares granted (in shares)	1,202		2,022		1,903		2,936
Grant date fair value	$ 30		$ 30		$ 18

SHARE BASED COMPENSATION - Restricted stock units (Details) - Restricted stock units $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2021 USD ($) $ / shares shares
Number of units
Nonvested at the beginning \| shares	45,000
Granted \| shares	1,000
Vested \| shares	(11,000)
Nonvested at the end \| shares	35,000
Weighted average grant date fair value
Nonvested at the beginning (in dollars per share) \| $ / shares	$ 13.68
Granted (in dollars per share) \| $ / shares	24.99
Vested (in dollars per share) \| $ / shares	13.86
Nonvested at the end (in dollars per share) \| $ / shares	$ 14.01
Unrecognized compensation expense \| $	$ 390
Unrecognized compensation expense, recognition period	2 years 11 months 12 days

SHARE BASED COMPENSATION - Stock options (Details) - Stock options - $ / shares				12 Months Ended
	Sep. 23, 2021	Aug. 10, 2020	Feb. 07, 2019	Dec. 31, 2021
SHARE-BASED COMPENSATION
Stock options granted (in shares)				55,000
Exercise price (in dollar per share)				$ 18.02
Fair value assumptions for options granted
Expiration period				10 years
Senior management
SHARE-BASED COMPENSATION
Stock options granted (in shares)	55,490	34,626	58,694
Exercise price (in dollar per share)	$ 18.02	$ 14.44	$ 13.63
Vesting percentage	10.00%	20.00%	12.50%
Fair value assumptions for options granted
Risk free interest rate	1.41%	0.24%	2.41%
Dividend yield	0.00%	0.00%	0.00%
Expected volatility	75.00%	75.00%	65.00%
Expiration period	10 years	10 years	10 years
Expected life	7 years 9 months 18 days	6 years 6 months	7 years 10 months 24 days

SHARE BASED COMPENSATION - Summary of Stock options activity (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Mar. 31, 2020
2018 Incentive Compensation Plan
Weighted Average Remaining Contractual Life and Intrinsic Value
Common stock available for issuance			2,300,000
Stock options
Number of units
Outstanding, nonvested	35,000
Granted	55,000
Exercised	(7,000)
Outstanding, nonvested	83,000	35,000
Weighted Average Exercise Price
Outstanding at the beginning (in dollars per share)	$ 14.44
Granted (in dollars per share)	18.02
Exercised (in dollars per share)	14.44
Outstanding at the end (in dollars per share)	16.83	$ 14.44
Weighted Average Fair Value
Outstanding at the beginning (in dollars per share)	8.67
Granted (in dollars per share)	14.07
Exercised (in dollars per share)	8.67
Outstanding at the end (in dollars per share)	$ 12.27	$ 8.67
Weighted Average Remaining Contractual Life and Intrinsic Value
Granted (in years)	9 years 8 months 23 days
Outstanding (in years)	9 years 4 months 9 days	9 years 7 months 9 days
Outstanding at the end (in dollars)	$ 802
Non-vested shares	83,000	35,000
Unrecognized compensation expense	$ 976
Unrecognized compensation expense, recognition period	9 years 4 months 9 days

COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Commitment
Self-insured liability	$ 373	$ 110
Repurchase agreements \| Maximum
Commitment
Repurchase commitment	$ 4,908	$ 140

COMMITMENTS AND CONTINGENCIES - Leases (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Operating Leased Assets [Line Items]
Operating lease, term of contract (in years)	10 years
Rent expense	$ 698	$ 602
Sublease rental income	394	$ 343
Future minimum lease commitments
2022	632
2023	583
2024	483
2025	447
2026	384
Thereafter	385
Total	$ 2,914
Minimum
Operating Leased Assets [Line Items]
Sublease, term of contract (in years)	3 years
Maximum
Operating Leased Assets [Line Items]
Sublease, term of contract (in years)	11 years

COMMITMENTS AND CONTINGENCIES - Legal Matters (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Legal Matters
Legal reserves	$ 2,764	$ 899
Maximum
Legal Matters
Amount set aside for potential claims	5,038
Minimum
Legal Matters
Amount set aside for potential claims	$ 2,613

DERIVATIVES (Details) - Interest rate swap agreement - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Jun. 12, 2017
Derivative instruments
Losses (gains) resulted from changes in fair values of the interest rate swap agreement	$ 15
Line of credit
Derivative instruments
Interest rate swap agreement		$ 8,000

EARNINGS PER SHARE- Tabular (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Numerator:
Net income (in 000's)	$ 49,871	$ 37,995
Denominator:
Basic weighted-average common shares outstanding	24,204,437	24,226,128
Effect of dilutive securities:
Diluted weighted-average common shares outstanding	24,275,989	24,236,395
Earnings per share attributable to Legacy Housing Corporation
Basic	$ 2.06	$ 1.57
Diluted	$ 2.05	$ 1.57
Restricted stock units
Effect of dilutive securities:
Dilutive securities	12,846
Stock options
Effect of dilutive securities:
Dilutive securities	58,706	10,267

EARNINGS PER SHARE - Antidilutive Securities (Details) - shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Earnings Per Share, Diluted, Other Disclosures [Abstract]
Antidilutive shares excluded from calculation of earnings per share	0	35,935

RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Bell Mobile Homes
RELATED PARTY TRANSACTIONS
Accounts receivable related parties	$ 1	$ 1
Accounts payable related parties	49	61
Home sales to related parties	3,724	2,631
Shipley Bros.
RELATED PARTY TRANSACTIONS
Accounts receivable related parties	0	0
Accounts payable related parties	0	0
Home sales to related parties	$ 2,825	$ 1,786

- Definition

Amount of revenue, fees and commissions earned from transactions between (a) a parent company and its subsidiaries; (b) subsidiaries of a common parent; (c) an entity and trusts for the benefit of employees, for example, but not limited to, pension and profit-sharing trusts that are managed by or under the trusteeship of the entity's management; (d) an entity and its principal, owners, management, or members of their immediate families; and (e) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iv))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442552-122756

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 946
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07.1(c))
-URI http://asc.fasb.org/extlink&oid=120401555&loc=SL114874292-224272

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(iii)(B))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442526-122756

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iii)(C))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442552-122756

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(5))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442526-122756

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
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-Subparagraph (SX 210.13-02(a)(5))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442552-122756

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 10
-Section S99
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-Subparagraph (SX 210.13-01(a)(4)(iv))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442526-122756

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03.1(e))
-URI http://asc.fasb.org/extlink&oid=123367319&loc=SL114868664-224227

+ Details

SUBSEQUENT EVENTS (Details) - Subsequent event $ / shares in Units, $ in Thousands	Jan. 05, 2022 USD ($) D $ / shares shares	Jun. 28, 2022 USD ($)
SUBSEQUENT EVENTS
Certificate of deposit \| $		$ 8,500
Mr. Hodgson, Executive Chairman \| Employment Agreement
SUBSEQUENT EVENTS
Base salary \| $	$ 200,000
Percentage of base salary	100.00%
Mr. Hodgson, Executive Chairman \| Employment Agreement \| Restricted shares
SUBSEQUENT EVENTS
Granted	150,000
Mr. Hodgson, Executive Chairman \| Employment Agreement \| Restricted shares \| Stock Price Reaches Closing Price of $36 Per Share
SUBSEQUENT EVENTS
Granted	175,000
Number of threshold trading days \| D	15
Share price (in dollars per share) \| $ / shares	$ 36
Mr. Hodgson, Executive Chairman \| Employment Agreement \| Restricted shares \| Stock Price Reaches Closing Price of $48 Per Share
SUBSEQUENT EVENTS
Granted	175,000
Number of threshold trading days \| D	15
Share price (in dollars per share) \| $ / shares	$ 48