0001558370-24-003435 | 10-K | XBRL Viewer

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2023

Summary of significant components of the provision for income taxes


	Year ended
	December 31,
	2023		2022
Current:
Federal	$	13,763	$	13,092
State		1,037		1,222
Total current income tax provision		14,800		14,314
Deferred:
Federal		(445)		51
State		(79)		10
Total deferred income tax provision		(524)		61
Provision for income taxes	$	14,276	$	14,375

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


	Year ended
	December 31,
	2023		2022
Federal statutory rate	21.0	%		21.0	%
State income taxes, net of federal tax benefit	0.9			1.5
Energy efficiency credit	(1.1)			(5.0)
Effective tax rate	20.8	%		17.5	%

Summary of deferred tax assets and liabilities


	Year ended
	December 31,
	2023		2022
Deferred tax assets:
Allowance for doubtful accounts	$	983	$	439
Reserve accounts		231		204
State taxes		124		76
Payroll taxes		-		8
Uniform capitalization		19		15
Other		199		256
Total deferred tax assets		1,556		998
Deferred tax liabilities:
Installment sale revenue		(530)		(674)
Depreciation		(2,601)		(2,808)
Accrued interest receivable		(742)		(581)
Other		(21)		-
Total deferred tax liabilities		(3,894)		(4,063)
Net deferred tax liabilities	$	(2,338)	$	(3,065)

COMMITMENTS AND CONTINGENCIES - Leases (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Operating Leased Assets [Line Items]
Operating lease, term of contract (in years)	10 years
Rent expense	$ 645	$ 710
Sublease rental Income	$ 245	$ 326
Minimum
Operating Leased Assets [Line Items]
Operating lease, term of contract (in years)	5 years
Sublease, term of contract (in years)	3 years
Maximum
Operating Leased Assets [Line Items]
Operating lease, term of contract (in years)	10 years
Sublease, term of contract (in years)	11 years

DEALER FINANCED RECEIVABLES - Allowance for loan losses (Details) - Dealer Finance Receivable - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Receivables
Allowance for loan losses, beginning of year	$ 13
Provision for loan losses	429	$ 13
Allowance for loan losses, end of year	$ 442	$ 13

- Definition

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

+ References + Details

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock	Treasury stock	Additional paid-in-capital	Retained earnings Cumulative effect, period of adoption, adjustment	Retained earnings	Cumulative effect, period of adoption, adjustment	Total
Beginning Balance at Dec. 31, 2021	$ 25	$ (4,477)	$ 175,623		$ 138,223		$ 309,394
Beginning Balance (in shares) at Dec. 31, 2021	24,654,621
Share based compensation expense	$ 5		4,932				4,937
Share based compensation expense (in shares)	160,074
Net Income (Loss)					67,773		67,773
Ending Balance at Dec. 31, 2022	$ 30	(4,477)	180,555	$ (698)	205,996	$ (698)	$ 382,104
Ending Balance (in shares) at Dec. 31, 2022	24,814,695						24,814,695
Share based compensation expense			869				$ 869
Share based compensation expense (in shares)	28,799
Net Income (Loss)					54,460		54,460
Ending Balance at Dec. 31, 2023	$ 30	$ (4,477)	$ 181,424		$ 259,758		$ 436,735
Ending Balance (in shares) at Dec. 31, 2023	24,843,494						24,843,494

- Definition

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

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- Definition

Amount of equity (deficit) attributable to parent. Excludes temporary equity and equity attributable to noncontrolling interest.

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+ Details

LEASES

12 Months Ended

Dec. 31, 2023

LEASES

LEASES

8. LEASES

The Company currently has 13 operating leases, eight of which are for the Company’s Heritage Housing and Tiny Homes retail locations, three are subleased by the Company and two are for corporate and administrative offices in Bedford, TX and Norcross, GA. These leases typically have initial terms ranging from 5 to 10 years and include one or more options to renew.

Under ASC 842, the Company elected the modified retrospective approach, applying the new standard to all leases at the date of initial application. The Company adopted the new standard on January 1, 2022.

We determine if an arrangement is or contains a lease at inception. Operating leases are right-of-use (“ROU”) assets and are shown as ROU assets – operating leases on our balance sheets. The lease liabilities are shown as Operating lease obligations and Operating lease obligations, less the current portion on our balance sheets. ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease.

ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. We have elected the practical expedient to not separate lease and non-lease components. Therefore, lease payments included in the measurement of the lease liability include all fixed payments in the lease arrangement. We record a ROU asset for an amount equal to the lease liability, increased for any prepaid lease costs and initial direct costs and reduced by any lease incentives. We remeasure the lease liability and ROU asset when a change to our future minimum lease payments occurs. Key assumptions and judgments included in the determination of the lease liability include the discount rate used in the present value calculation and the exercise of renewal options.

Many of our leases contain renewal options. As the exercise of the renewal options is not likely at the commencement of a lease, we generally do not include the option periods in the lease term when determining the lease liabilities and ROU assets. We remeasure the lease liability and ROU asset when it is reasonably likely that we will exercise a renewal option.

Our leases do not provide information about the rate implicit in the lease. Therefore, we utilize an incremental borrowing rate to calculate the present value of our future lease obligations. The incremental borrowing rate represents the rate of interest we would have to pay on a collateralized borrowing, for an amount equal to the lease payments, over a similar term and in a similar economic environment. The remaining weighted-average lease term is 4.21 years and the weighted-average discount rate is 2.08%.

We consider lease payments that cannot be predicted with reasonable certainty upon lease commencement to be variable lease payments, which are recorded as incurred each period and are excluded from our calculation of lease liabilities. There were no variable lease costs for the year ended December 31, 2023.

Short-term leases, those with a term of 12 months or less, are not recorded on our Balance Sheet. Our short-term lease costs were not material for the year ended December 31, 2023.

Lease expense for operating leases consists of fixed lease payments recognized on a straight-line basis over the lease term plus variable lease payments as incurred. Amortization of the ROU asset for operating leases reflects amortization of the lease liability, any differences between straight-line expense and related lease payments during the accounting period, and any impairments.

As of December 31, 2023, present value of future lease payments under our operating lease liabilities were as follows:


2024	$	519
2025		495
2026		431
2027		345
2028		145
Thereafter		—
Total lease payments	$	1,935
Less amount representing interest		(50)
Total lease liability	$	1,885
Less current lease liability		(489)
Total non-current lease liability	$	1,396

COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Commitment
Self-insured liability	$ 242	$ 149
Repurchase agreements \| Maximum
Commitment
Repurchase commitment	$ 3,030	$ 8,925

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Dec. 31, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

SHARE-BASED COMPENSATION - Restricted stock units (Details) - Restricted stock units - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Number of units
Nonvested at the beginning	42,000	35,000
Granted	1,000	517,000
Vested	(18,000)	(160,000)
Canceled	(17,000)	(350,000)
Nonvested at the end	8,000	42,000
Weighted average grant date fair value
Nonvested at the beginning (in dollars per share)	$ 6.93	$ 14.01
Granted (in dollars per share)	23.26	11.82
Vested (in dollars per share)	14.98	24.32
Canceled (in dollars per share)	13.63	5.99
Nonvested at the end (in dollars per share)	$ 17.09	$ 6.93
Unrecognized compensation expense	$ 78
Unrecognized compensation expense, recognition period	7 months 6 days
Share based compensation expense	$ 234	$ 3,960

OTHER NOTES RECEIVABLE (Tables) - Other note receivable

12 Months Ended

Dec. 31, 2023

Accounts, Notes, Loans and Financing Receivable [Line Items]

Schedule of other notes receivable


	2023		2022
Outstanding principal balance	$	35,353	$	23,017
Loan discount and deferred financing fees		(527)		(295)
Allowance for loan losses		(236)		—
Total	$	34,590	$	22,722

Schedule of allowance for loan losses


	2023		2022
Allowance for loan losses, beginning of year	$	—	$	—
Provision for loan losses		236		—
Charge offs (recoveries)		—		—
Allowance for loan losses, end of year	$	236	$	—

Schedule of impaired and general reserve for allowance for loan losses


	2023		2022
Total Other notes receivable	$	35,353	$	23,017
Allowance for loan losses		236		—
Impaired loans individually evaluated for impairment		25,135		—
Specific reserve against impaired loans		84		—
Other notes receivable collectively evaluated for allowance		10,218		—
General allowance for loan losses		152		—

Schedule of disaggregation of outstanding principal balance of consumer loans receivable


	Year of Origination
	2023		2022		2021		2020		2019		Total		% of Portfolio
< 30 days past due	$	33,348	$	461	$	191	$	300	$	105	$	34,405	%	97.3
30-90 days past due		—		—		—		—		—		—		—
> 90 days past due		—		299		649		—		—		948		2.7
Total	$	33,348	$	760	$	840	$	300	$	105	$	35,353	%	100.0

CONSUMER LOANS RECEIVABLE - Aging of consumer loans receivable (Details) - Consumer - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Past due consumer loans:
Total consumer loans receivable (as a percent)	100.00%	100.00%
Financing receivable	$ 159,738	$ 142,340
Financial Asset, Past Due
Past due consumer loans:
Financing receivable	$ 2,345	$ 2,999
Consumer loans receivable past due (Percent)	1.50%	2.10%
31 - 60 days past due
Past due consumer loans:
Financing receivable	$ 624	$ 1,150
Consumer loans receivable past due (Percent)	0.40%	0.80%
61 - 90 days past due
Past due consumer loans:
Financing receivable	$ 149	$ 108
Consumer loans receivable past due (Percent)	0.10%	0.10%
91 - 120 days past due
Past due consumer loans:
Financing receivable	$ 123	$ 486
Consumer loans receivable past due (Percent)	0.10%	0.30%
Greater than 120 days past due
Past due consumer loans:
Financing receivable	$ 1,449	$ 1,255
Consumer loans receivable past due (Percent)	0.90%	0.90%

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Inventory, Property, plant and equipment, Impairment of Long Lived Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Inventories
Noncurrent finished goods inventory	$ 7,793	$ 6,987
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 - Shipping and Handling Costs & Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Shipping and handling costs	$ 621	$ 1,804

RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
RELATED PARTY TRANSACTIONS
Accounts receivable, net	$ 4,656	$ 4,873
Accounts payable	4,090	4,549
Home sales to related parties	189,144	257,015
Related Party \| Bell Mobile Homes
RELATED PARTY TRANSACTIONS
Accounts receivable, net	403	0
Accounts payable	18	132
Home sales to related parties	4,543	4,499
Related Party \| Shipley Bros
RELATED PARTY TRANSACTIONS
Accounts receivable, net	143	0
Accounts payable	67	0
Home sales to related parties	1,199	3,181
Related Party \| Principal Shareholder
RELATED PARTY TRANSACTIONS
Accounts receivable, net	$ 0	$ 68

- Definition

Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income before deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss).

+ References

+ Details

CONSUMER LOANS RECEIVABLE - Consumer loans receivable, net (Details) - Consumer - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Receivables
Consumer loans receivable	$ 159,738	$ 142,340
Loan discount and deferred financing fees	(2,473)	(2,501)
Allowance for loan losses	(765)	(830)	$ (884)
Total, net	$ 156,500	$ 139,009

- Definition

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

+ References + Details

LEASES (Details)	12 Months Ended
LEASES (Details)	Dec. 31, 2023 USD ($) lease
LEASES
Number of operating leases	13
Number of operating leases subleased	3
Operating lease, term of contract (in years)	10 years
Options to renew	true
Operating lease weighted average remaining lease term1	4 years 2 months 15 days
Weighted Average Discount Rate	2.08%
Variable lease cost \| $	$ 0
Minimum
LEASES
Operating lease, term of contract (in years)	5 years
Maximum
LEASES
Operating lease, term of contract (in years)	10 years
Heritage Housing and Tiny Homes retail locations
LEASES
Number of operating leases	8
Corporate and administrative offices in Bedford, TX and Norcross, GA
LEASES
Number of operating leases subleased	2

OTHER ASSETS (Tables)

12 Months Ended

Dec. 31, 2023

OTHER ASSETS.

Schedule of Other assets


	2023		2022
Prepaid rent	$	349	$	349
Other		7		338
Repossessed homes		2,215		795
Total	$	2,571	$	1,482

NOTES RECEIVABLE FROM MOBILE HOME PARKS ("MHP Notes") (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Notes Receivable from Mobile Home Parks
Receivables
Unamortized financing fees	$ 1,565	$ 1,068
Charge offs	0	0
Allowance for loan losses	735
Financing receivable	184,280	143,810
Provision for loan losses	735	$ 0
Notes Receivable from Mobile Home Parks \| Financial Asset, Past Due [Member]
Receivables
Financing receivable	98
MHP and Other Notes Receivable \| Credit concentration risk \| Independent third party and affiliates one \| Independent Third Party One
Receivables
Financing receivable	55,000
Receivables currently in default and are the subject of ongoing litigation	$ 37,000

CONSUMER LOANS RECEIVABLE - Impaired and general reserve for allowance for loan losses (Details) - Consumer - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Receivables
Total consumer loans	$ 159,738	$ 142,340
Allowance for loan losses	765	830	$ 884
Impaired loans individually evaluated for impairment	1,565	1,610
Specific reserve against impaired loans	562	612
Other loans collectively evaluated for allowance	158,173	140,730
General allowance for loan losses	$ 203	$ 218

- Definition

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

+ References + Details

REVENUE (Details) $ in Thousands	12 Months Ended
REVENUE (Details) $ in Thousands	Dec. 31, 2023 USD ($) item	Dec. 31, 2022 USD ($) item
Disaggregation of revenue
Incremental costs of obtaining a contract	true
Term Of Product Warranty	1 year
Product sales	$ 145,100	$ 222,052
Dealer commission, reimbursed dealer expenses and other similar costs	$ 10,188	$ 11,588
Minimum
Disaggregation of revenue
Term of lease agreement	96 months
Maximum
Disaggregation of revenue
Term of lease agreement	120 months
Revenue from contract with customer product and service benchmark \| Customer concentration risk \| Independent Third Party and Affiliates [Member]
Disaggregation of revenue
Number of Independent third parties \| item	2	2
Revenue from contract with customer product and service benchmark \| Customer concentration risk \| Independent Third Party One
Disaggregation of revenue
Product sales	$ 10,134	$ 13,008
Concentration risk percentage	7.00%	5.90%
Revenue from contract with customer product and service benchmark \| Customer concentration risk \| Independent Third Party Two
Disaggregation of revenue
Product sales	$ 10,033	$ 11,879
Concentration risk percentage	6.90%	5.40%

INVENTORIES

12 Months Ended

Dec. 31, 2023

INVENTORIES

INVENTORIES

9. INVENTORIES

Inventories consisted of the following at December 31, 2023 and 2022:


	2023		2022
Raw materials	$	13,506	$	17,442
Work in progress		552		592
Finished goods		26,911		21,028
Total	$	40,969	$	39,062

Finished goods expected to be held for more than twelve months is classified as long-term and represented $7,793 and $6,987 as of December 31, 2023 and 2022, respectively. The Company has an inventory allowance of $439 and $402 as of December 31, 2023 and December 31, 2022, respectively, for finished goods expected to be held for more than twelve months.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Receivables (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2023 USD ($) item	Dec. 31, 2022 USD ($) item	Dec. 31, 2021 USD ($)
Accounts Receivable
Credit period	30 days
Allowance for doubtful accounts	$ 651	$ 279	$ 343
Loan Receivable
Escrow liability	$ 10,104	9,653
Number of components comprising the allowance for loan losses \| item	2
General reserve calculation, period of historical loss rate	3 years
Repossessed Assets	$ 2,215	795
Minimum
Loan Receivable
Consumer loans receivable term	2 years
Maximum
Loan Receivable
Consumer loans receivable term	30 years
Notes Receivable from Mobile Home Parks
Loan Receivable
Repossessed Assets	$ 0	$ 0
Loan receivable, average interest rate	8.00%	8.10%
Charge offs	$ 0	$ 0
Allowance for loan losses	735
Provision for loan losses	735	0
Impaired financing receivable		0
Financing receivable	184,280	$ 143,810
Notes Receivable from Mobile Home Parks \| Financial Asset, Past Due
Loan Receivable
Financing receivable	$ 98
Notes Receivable from Mobile Home Parks \| Minimum
Loan Receivable
Loans receivable, fixed and variable interest rate	6.90%
Term of notes receivables	1 year	1 year
Notes Receivable from Mobile Home Parks \| Maximum
Loan Receivable
Loans receivable, fixed and variable interest rate	12.50%
Term of notes receivables	10 years	10 years
Other Note Receivable
Loan Receivable
Allowance for loan losses	$ 236	$ 0
Provision for loan losses	236
Impaired financing receivable	84	0
Financing receivable	35,353	23,017
Other Note Receivable \| Financial Asset, Past Due
Loan Receivable
Financing receivable	$ 22	0
Other Note Receivable \| Minimum
Loan Receivable
Interest rate on the other notes	5.00%
Other Note Receivable \| Maximum
Loan Receivable
Interest rate on the other notes	17.90%
Dealer Finance Receivable
Loan Receivable
Term of notes receivables	3 years
Allowance for loan losses	$ 442	13
Provision for loan losses	429	13
Financing receivable	$ 32,980	$ 30,049
Consumer
Loan Receivable
Average contractual interest rate	13.20%	13.40%
Principal outstanding on consumer loans	$ 1,565	$ 1,610
Allowance for loan losses	765	830	$ 884
Provision for loan losses	(114)	(243)
Financing receivable	159,738	142,340
Consumer \| Financial Asset, Past Due
Loan Receivable
Financing receivable	$ 2,345	$ 2,999
Notes Receivable from Mobile Home Parks \| Credit concentration risk \| Independent Third Party and Affiliates [Member]
Loan Receivable
Number of Independent third parties \| item	3	3
Notes Receivable from Mobile Home Parks \| Credit concentration risk \| Independent Third Party and Affiliates [Member] \| Independent Third Party One
Loan Receivable
Concentration risk percentage	14.00%	12.30%
Notes Receivable from Mobile Home Parks \| Credit concentration risk \| Independent Third Party and Affiliates [Member] \| Independent Third Party Two
Loan Receivable
Concentration risk percentage	17.90%	16.60%
Notes Receivable from Mobile Home Parks \| Credit concentration risk \| Independent Third Party and Affiliates [Member] \| Independent Third party Three
Loan Receivable
Concentration risk percentage	24.50%	34.00%
Other Note Receivable \| Independent Third Party and Affiliates [Member]
Loan Receivable
Number of Independent third parties \| item	1	1
Other Note Receivable \| Credit concentration risk \| Independent Third Party and Affiliates [Member]
Loan Receivable
Concentration risk percentage	64.40%	77.60%

SHARE-BASED COMPENSATION

12 Months Ended

Dec. 31, 2023

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION

16. SHARE BASED COMPENSATION

Pursuant to the Legacy Housing Corporation 2018 Incentive Compensation Plan (the “Plan”), the Company may issue up to 10.0 million equity awards to employees, directors, consultants and nonemployee service providers in the form of stock options, stock and stock appreciation rights. Stock options may be granted with a contractual life of up to ten years. At December 31, 2023, the Company had 8.7 million shares available for grant under the Plan.

Restricted Stock

The following is a summary of restricted stock award activity for the year ending December 31, 2023 (in thousands, except per unit data):


	Number of Units		Weighted Average Grant Date Fair Value Per Unit
Nonvested, January 1, 2022	35	$	14.01
Granted	517	$	11.82
Vested	(160)	$	24.32
Canceled	(350)	$	5.99
Nonvested, December 31, 2022	42	$	6.93

Nonvested, January 1, 2023	42	$	6.93
Granted	1	$	23.26
Vested	(18)	$	14.98
Canceled	(17)	$	13.63
Nonvested, December 31, 2023	8	$	17.09

As of December 31, 2023, approximately 8,000 shares of restricted stock remained unvested. Unrecognized compensation expense related to these restricted stock awards at December 31, 2023 was $78 and is expected to be recognized over 0.6 years. Compensation expense for restricted stock awards for the years ended December 31, 2023 and 2022 was $234 and $3,960, respectively.

Stock Options

The following is a summary of option award 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, 2022	83	$	16.83	$	12.27	9.36
Granted	1,025	$	40.59	$	4.99	9.44
Exercised	—	$	-	$	-	—
Forfeited	(83)	$	16.83	$	12.27	—
Outstanding, December 31, 2022	1,025	$	40.59	$	4.99	9.44	$
Exercisable, December 31, 2022	—	$	—	$	—	—	$	—

Outstanding, January 1, 2023	1,025	$	40.59	$	4.99	9.44
Granted	43	$	22.94	$	15.32	4.70
Exercised	(6)	$	16.01	$	8.57	—
Forfeited	(56)	$	16.01	$	8.57	—
Outstanding, December 31, 2023	1,006	$	41.35	$	5.22	8.28	$
Exercisable, December 31, 2023	96	$	42.18	$	4.76	8.44	$	—

As of December 31, 2023, approximately 1,006,000 options remain unvested. Unrecognized compensation expense related to these options at December 31, 2023 was $4,479 and is expected to be recognized over 8.3 years. Compensation expense for stock option awards for the years ended December 31, 2023 and 2022 was $535 and $348, respectively.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2023

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash

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, 2023, the Company had one bank account that exceeded the FDIC limit by $105. We consider all cash and highly liquid investments with an original maturity of three months or less to be cash equivalents.

Held to Maturity Securities

Management determines the appropriate classification of its investment securities at the time of purchase. The Company’s investments as of December 31, 2022 consisted of US Treasury Notes, and these treasury notes were sold prior to maturity on June 22, 2023.

Accounts Receivable

“Accounts receivable, net” includes receivables from direct sales of mobile homes, sales of parts and supplies to customers, inventory finance fees and interest.

“Accounts receivables, net” related to inventory finance fees and interest generally are due upon receipt, and all other accounts receivables generally are due within 30 days. Accounts receivable “net” are stated at amounts due from customers net of an allowance for doubtful accounts. Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines the allowance by considering several factors, including the aging of the past due balance, the customer’s payment history, and the Company’s previous loss history. The Company establishes an allowance for doubtful accounts for amounts that are deemed to be uncollectible. At December 31, 2023, 2022 and 2021, the allowance for doubtful accounts totaled $651, $279 and $343, 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 13.2% and 13.4% as of December 31, 2023 and 2022, respectively. Consumer loans receivable have maturities that range from 2 to 30 years.

The Company reviews loan applications in an underwriting process which considers credit history, among other things, to evaluate credit risk of the consumer and determines interest rates on approved loans based on consumer credit score, payment ability and down payment amount.

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

The Company also may receive escrow payments for property taxes and insurance included in its consumer loan collections. The liabilities associated with these escrow collections totaled $10,104 and $9,653 as of December 31, 2023 and 2022, respectively, and are included in escrow liability in the accompanying balance sheets.

Allowance for Loan Losses—Consumer Loans Receivable

The allowance for loan losses reflects management’s estimate of losses inherent in the consumer loans that may be uncollectible based upon review and evaluation of the consumer loan portfolio as of the date of the balance sheet. An allowance for loan losses is determined after giving consideration to, among other things, the loan characteristics, including the financial condition of borrowers, the value and liquidity of collateral, delinquency and historical loss experience.

The allowance for loan losses is comprised of two components: the general reserve and specific reserves. The Company’s calculation of the general reserve considers the historical loan default rates and collateral recovery rates for the last three years and any qualitative factors both internal and external to the Company. Specific reserves are determined based on probable losses on specific classified impaired loans.

The Company’s policy is to place a loan on nonaccrual status when there is a clear indication that the borrower’s cash flow may not be sufficient to meet payments as they become due, which generally is when either principal or interest is past due and remains unpaid for more than 90 days. Management implemented this policy based on an analysis of historical data, current performance of loans and the likelihood of recovery once principal or interest payments became delinquent and were aged more than 90 days. Payments received on nonaccrual loans are accounted for on a cash basis, first to interest and then to principal, as long as the remaining book balance of the asset is deemed to be collectible. The accrual of interest resumes when the past due principal or interest payments are brought within 90 days of being current. As of December 31, 2023 and 2022, total principal outstanding for consumer loans on nonaccrual status was $1,565 and $1,610, respectively.

Impaired loans are those loans for which it is probable that the Company will be unable to collect all amounts due in accordance with the original contractual terms of the loan agreement, including scheduled principal and interest payments. Impaired loans, or portions thereof, are charged off when deemed uncollectible. A loan is generally deemed impaired if it is more than 90 days past due on principal or interest, is in bankruptcy proceedings, or is in the process of repossession. A specific reserve is created for impaired loans based on fair value of underlying collateral value, less estimated selling costs. The Company uses various factors to determine the value of the underlying collateral for impaired loans. These factors include: (1) the length of time the unit remained unsold after construction; (2) the amount of time the house was occupied; (3) the cooperation level of the borrowers (for example, loans requiring legal action or extensive field collection efforts may have a reduced value); (4) the physical location of the home; (5) the length of time the borrower has lived in the house without making payments; (6) the size of the home and market conditions; and (7) the experience and expertise of the particular dealer assisting in collection efforts.

Collateral for repossessed loans is acquired through foreclosure or similar proceedings and is recorded at the estimated fair value of the home, less the costs to sell. At repossession, the collateral is recorded at the same amount as the principal balance as the loan. The fair value of the collateral is then computed based on the historical recovery rates of previously charged-off loans, the loan is charged off and the loss is charged to the allowance for loan losses. At each reporting period, the fair value of the collateral is adjusted to the lower of the amount recorded at repossession or the estimated sales price less estimated costs to sell, based on current information. Repossessed homes totaled $2,215 and $795 as of December 31, 2023 and 2022, respectively, and are included in other assets in the accompanying balance sheets.

Notes Receivable from Mobile Home Parks

The notes receivable from mobile home parks (“MHP Notes”) relate to mobile homes sold to mobile home parks and financed through notes receivable. The MHP Notes have varying maturity dates and call for monthly principal and interest payments. The interest rate on the MHP Notes can be fixed or variable, and the interest rates range from 6.9% to 12.5%. The average interest rate per loan was approximately 8.0% and 8.1% as of December 31, 2023 and 2022, respectively, and with maturities that range from 1 to 10 years. The collateral underlying the MHP Notes are individual mobile homes which can be repossessed and resold. The MHP Notes are generally personally guaranteed by the borrowers with substantial financial resources.

As of December 31, 2023, the Company had concentrations of MHP Notes with three independent third-parties and their respective affiliates that equaled 14.0%, 17.9% and 24.5% of the principal balance outstanding, all of which was secured by the mobile homes. As of December 31, 2022, the Company had concentrations of MHP Notes with three independent third-parties and their respective affiliates that equaled 12.3%, 16.6% and 34.0% of the principal balance outstanding, all of which was secured by the mobile homes.

Allowance for Loan Losses—MHP Notes

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, 2023 there were past due balances of $98 on the MHP Notes, and for the year ended December 31, 2023, there were no charge offs recorded for MHP Notes. Allowance for loan loss for the MHP Notes was $735 as of December 31, 2023. As of December 31, 2022 there were minimal past due balances on the MHP Notes, and for the year ended December 31, 2022, no charge offs were recorded for MHP Notes. Allowance for loan loss was considered immaterial and accordingly no provision was recorded against the MHP Notes as of December 31, 2022.

As of December 31, 2023, there was a minimal impaired balance of MHP Notes and there was no repossessed home balance. As of December 31, 2022 there was no impaired loan balance for MHP Notes and no repossessed homes balance. 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 and are not directly tied to the sale of mobile homes. These other notes have varying maturity dates and generally require monthly principal and interest payments. They are collateralized by mortgages on real estate, mobile homes that we have financed for which the borrower uses as offices, as well as vehicles. These notes typically are personally guaranteed by the borrowers. The interest rates on the other notes are fixed and generally range from 5.0% to 17.9%. 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, 2023, the allowance for loan losses on other notes was $236, the past due balance for other notes was $22, and the impaired balance for other notes was $84. As of December 31, 2022, the allowance for loan losses on other notes was $0. There were no past due balances for other notes as of December 31, 2022, and there were no impaired balances for other notes as of December 31, 2022.

Dealer Finance Receivable

Dealer finance receivable are receivables for loans that we make to independent retailers, or dealers, for the purchase of mobile homes so that dealers can then market them for sale to consumers. The loans are part of our inventory finance program. In late 2022 and early 2023, the Company transitioned many of its dealers from a traditional consignment arrangement to an inventory finance arrangement. The terms of the financing typically include a three year term, a monthly interest payment, an annual curtailment payment and require the retailer to pay the principal amount of the loan to the Company upon the earlier of the sale of the home by the retailer to its customer or the end of the term.

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, 2023 and 2022, the Company recorded an insignificant amount of inventory write-down.

The Company evaluates finished goods 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, 2023 and 2022, non-current inventory was $7,793 and $6,987, respectively.

Leased Property

The Company offers mobile home park operators the opportunity to lease mobile homes for rent in lieu of purchasing the homes for cash or under a longer-term financing agreement. In this arrangement title for the mobile homes remains with the Company, and the lease is accounted for as an operating lease.

Our typical lease agreement has a term of 96 or 120 months. It requires the lessee to maintain the home and to return the home to us at the end of the lease in good condition. It provides the lessee with a termination option for a fee, an option to extend the lease and a purchase option at fair market value.

The leased mobile homes are included in other assets on the Company’s balance sheet, capitalized at manufactured cost and depreciated over a 15 year useful life. Homes returned to the Company upon expiration of the lease or in the event of default are sold by the Company through its standard sales and distribution channels. Depreciation expense for the leased property was $632 and $582 for the years ended December 31, 2023 and 2022, respectively.

Future minimum lease income under all operating leases for each of the next five years at December 31, 2023,is as follows:


2024	$	1,825
2025		1,825
2026		1,825
2027		1,653
2028		1,460
Thereafter		804
Total	$	9,392

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. No impairment for long-lived assets was recorded for the years ended December 31, 2023 and 2022.

Dealer Incentive Liability

The Company has entered into agreements with qualifying independent retailers, or dealers, that provides incentives to retailers when their customers finance the purchase of a home with the Company. The agreements provide for a portfolio for these consumer loans. The independent retailer is eligible to receive a dealer incentive, which is a portion of total collections expected on this consumer loan portfolio after the Company recovers its contribution (the collection thresholds are set per the terms of the dealer agreement, and the contribution includes the Company’s initial contribution, interest and fees).

A dealer incentive liability is recorded in the Company’s balance sheet based on the 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, 2023 and 2022, the dealer incentive liability was $5,260 and $5,516, respectively. Dealer incentive expense for the years ended December 31, 2023 and 2022 totaled $586 and $1,315, respectively, and is included in the Company’s statements of income.

Product Warranties

The Company provides retail home buyers with a one-year warranty from the date of purchase on manufactured inventory. Product warranty costs are accrued when the covered homes are sold to customers. Product warranty expense is recognized based on the terms of the product warranty and the related estimated costs. Factors used to determine the warranty liability include the number of homes under warranty and the historical costs incurred in servicing the warranties. The accrued warranty liability is reduced as costs are incurred and the warranty liability balance is included as part of accrued liabilities in the Company’s balance sheet.

The following table summarizes activity within the warranty liability for the years ended December 31, 2023 and 2022:


	2023		2022
Warranty liability, beginning of year	$	3,049	$	2,876
Product warranty accrued		2,552		2,874
Warranty costs incurred		(2,691)		(2,701)
Warranty liability, end of year	$	2,910	$	3,049

Advertising Costs

The Company expenses all advertising and marketing expenses in the period incurred. Advertising costs for the years ended December 31, 2023 and 2022 were $409 and $120, respectively.

Fair Value Measurements

The Company accounts for its investments and derivative instruments in accordance with the provisions of Accounting Standards Codification (“ASC”) 820-10, Fair Value Measurement, which among other things provides the framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level I measurement) and the lowest priority to unobservable inputs

(Level III measurements). The three levels of fair value hierarchy under ASC 820-10, Fair Value Measurement, are as follows:


Level I	Quoted prices are available in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.
Level II	Significant observable inputs other than quoted prices in active markets for which inputs to the valuation methodology include: (1) Quoted prices for similar assets or liabilities in active markets; (2) Quoted prices for identical or similar assets or liabilities in inactive markets; (3) Inputs other than quoted prices that are observable; (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

The Company’s financial instruments consist primarily of cash, investments in U.S. Treasury Notes, accounts receivable, consumer loans, MHP Notes, other notes, accounts payable and lines of credit.

The carrying amounts of cash, accounts receivable, and accounts payable approximate their respective fair values because of the short-term maturities or expected settlement dates of these instruments. This is considered a Level I valuation technique. The investment in US Treasury Notes has quoted prices available in active markets that the Company can access at measurement dates. The US Treasury Notes were sold by the Company on June 22, 2023. The Company determined that the fair value of the investment in US Treasury Notes was approximately $8,409 compared to the book value of $8,412 as of December 31, 2022. This was considered a Level I valuation technique. The lines of credit, notes payable, part of the MHP Notes and part of the other note receivables have variable interest rates that reflect market rates and their fair value approximates their carrying value. This is considered a Level II valuation technique. The Company also assessed the fair value of the consumer loans receivable, the fixed rate MHP Notes and the portion of other note receivables with fixed rates based on the discounted value of the remaining principal and interest cash flows. This is considered a Level III valuation technique. The following table shows the fair market value and book value of these portfolios as of December 31, 2023 and December 31, 2022:


	2023		2022
Consumer loan portfolio, fair value	$	155,146	$	138,800
Consumer loan portfolio, book value		156,499		139,009
Fixed rate MHP Notes, fair value		176,270		128,400
Fixed rate MHP Notes, book value		178,724		129,966
Fixed rate other notes, fair value		34,340		21,600
Fixed rate other notes, book value		34,590		22,722

Revenue Recognition

Product sales primarily consist of sales of mobile homes to consumers and mobile home parks through various sales channels, which include Direct Sales, Commercial Sales, Inventory Finance Sales, and Retail Store Sales. Direct Sales include homes sold directly to independent retailers or customers that are not financed by the Company and are not sold under a inventory finance arrangement. These types of homes are generally paid for prior to shipment. Commercial Sales include homes sold to mobile home parks under commercial loan programs or paid for upfront. The Company provides inventory financing for independent retailers who purchase homes from us and then sell them to consumers. Inventory Finance Sales are considered sales of homes to the independent dealer. Retail Store Sales are homes sold through Company-owned retail locations. Inventory Finance Sales and Retail Sales of homes may be financed by the Company, by a third party, or paid in cash.

Consumer, MHP and dealer loans interest includes interest income from the consumer, MHP and dealer finance loan portfolios. Other revenue consists of consignment fees, commercial lease rents, service fees and other miscellaneous income.

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, 2023 and 2022.

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.

Interest related to other notes receivable balances and interest income earned on cash balances is shown in Non-operating Interest Income on the statements of income.

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 an award’s estimated grant date fair value in order to recognize compensation cost for those shares expected to vest. The Company has elected to record forfeitures as they occur. Compensation cost is recognized on a straight-line basis over the vesting period of the awards and adjusted as forfeitures occur.

The fair value of each option grant with only service-based conditions is estimated using the Black-Scholes pricing model. The fair value of each restricted stock grant with only service-based conditions is calculated based on the closing price of the Company’s common stock on the grant date.

The fair value of stock option awards on the date of grant is estimated using the Black-Scholes option pricing model, which requires the Company to make certain predictive assumptions. The risk-free interest rate is based on the

implied yield of U.S. Treasury zero-coupon securities that correspond to the expected life of the award. The volatility is estimated based on the historical volatility of the Company’s common stock. The expected life of awards granted represents the period of time that the awards are expected to be outstanding based on the “simplified” method, which is allowed for companies that cannot reasonably estimate the expected life of options based on its historical award exercise experience. The Company does not expect to pay dividends on its common stock.

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 statements of income. Shipping and handling costs for the years ended December 31, 2023 and 2022 were $621 and $1,804, respectively.

Earnings Per Share

Basic earnings per common share (“EPS”) is computed based on the weighted-average number of common shares outstanding during the reporting period. Basic weighted average common shares outstanding do not include shares of restricted stock that have not yet vested, although such shares are included as outstanding shares in the Company’s balance sheets. Diluted EPS is based on the weighted-average number of common shares outstanding plus the number of additional shares that would have been outstanding had the dilutive common shares been issued.

Income Taxes

The Company is subject to U.S. federal and state income taxes as a corporation. 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 judgment, use of estimates, and the interpretation and application of complex tax laws. 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 for the tax years that remain subject to examination by major tax jurisdictions as of December 31, 2023, which includes the tax years 2020, 2021 and 2022.

Concentrations

Financial instruments that potentially subject the Company to concentrations of credit risk are accounts receivable, consumer loans, MHP Notes, inventory finance loans 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 and inventory finance 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, 2023, the Company had concentrations of MHP Notes with three independent third-parties and their respective affiliates that equaled 14.0%, 17.9% and 24.5% of the principal balance outstanding, all of which was secured by the mobile homes. As of December 31, 2022, the Company had concentrations of MHP Notes with three independent third-parties and their respective affiliates that equaled 12.3%, 16.6% and 34.0% of the principal balance outstanding, all of which was secured by the mobile homes. As of December 31, 2023 and 2022, the Company had concentration of other notes receivable with one independent third-party and its affiliates that equaled 64.4% and 77.6%, respectively, of the principal balance outstanding. The other notes are secured by land and other assets and are personally guaranteed.

Recent Accounting Pronouncements

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

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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. ASU 2016-02 was effective for the Company for fiscal years beginning after December 15, 2021, and interim periods within those years. The Company adopted this standard in the first quarter of fiscal 2022 and elected certain practical expedients permitted under the transition guidance, including the package of practical expedients; however, the Company did not elect the hindsight practical expedient. Additionally, the Company elected the optional transition method that allowed for a cumulative-effect adjustment in the period of adoption and did not restate prior periods. The adoption of ASU 2016-02 resulted in an increase in total assets and total liabilities of $3,258 at transition. However, this standard did not have a material impact on the consolidated statement of income or the consolidated statement of cash flows. See Note 8 for further discussion on leases.

In June 2016, the FASB issued ASU 2016-13 Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For available for sale debt securities, credit losses should be measured in a manner similar to previous GAAP, however Topic 326 requires 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 affected loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The Company used the longer phase-in period for adoption, and accordingly this ASU became effective for the Company’s fiscal year beginning January 1, 2023. The adoption of ASU 2016-13 resulted in an increase in portfolio allowances of $900 at transition. The $900 was comprised of a $225 increase for MHP notes, a $187 increase for dealer financed contracts and a $488 increase for other notes receivable. The cumulative effect of the adoption was a net decrease of $698 to beginning retained earnings at January 1, 2023.

In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848. The amendments in this update extend the transition relief period for reference rate reform from December 31, 2022 to December 31, 2024. The amendments in ASU 2022-06 apply to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference LIBOR or another

reference rate expected to be discontinued because of reference rate reform. ASU 2022-06 was effective upon issuance. The new standard has had no material impact on the Company's financial statements.

In November, 2023 the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 aims to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss. The update also requires disclosure regarding the chief operating decision maker and expands the interim segment disclosure requirements. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact of ASU 2023-07 on our financial statements.

From time to time, new accounting pronouncements are issued by the FASB and other regulatory bodies that are adopted by the Company as of the specified effective dates. Unless otherwise discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s Financial Statements upon adoption.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentrations (Details) - Independent Third Party and Affiliates [Member] - item	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Notes Receivable from Mobile Home Parks \| Credit concentration risk
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Number of Independent third parties	3	3
Notes Receivable from Mobile Home Parks \| Credit concentration risk \| Independent Third Party One
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration risk percentage	14.00%	12.30%
Notes Receivable from Mobile Home Parks \| Credit concentration risk \| Independent Third Party Two
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration risk percentage	17.90%	16.60%
Notes Receivable from Mobile Home Parks \| Credit concentration risk \| Independent Third party Three
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration risk percentage	24.50%	34.00%
Other note receivable
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Number of Independent third parties	1	1
Other note receivable \| Credit concentration risk
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Concentration risk percentage	64.40%	77.60%

LEASES (Tables)

12 Months Ended

Dec. 31, 2023

LEASES

Schedule of present value of future lease payments under operating lease liabilities


2024	$	519
2025		495
2026		431
2027		345
2028		145
Thereafter		—
Total lease payments	$	1,935
Less amount representing interest		(50)
Total lease liability	$	1,885
Less current lease liability		(489)
Total non-current lease liability	$	1,396

LEASES - Future minimum lease payments (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
LEASES
2024	$ 519
2025	495
2026	431
2027	345
2028	145
Total lease payments	1,935
Less amount representing interest	(50)
Total lease liability	1,885
Less current lease liability	(489)	$ (650)
Total non-current lease liability	$ 1,396	$ 2,121

REVENUE

12 Months Ended

Dec. 31, 2023

REVENUE

REVENUE

3. REVENUE

Revenue from product sales is recognized when the performance obligation under the terms of a contract with our customer is satisfied, which typically occurs upon delivery and transfer of title of the home, as this depicts when control of the promised good is transferred to our customers. For inventory financed sales, the independent dealer enters into a financing arrangement with the Company and is required to make monthly interest payments. Interest income is separately recorded in the statement of income. For other financed sales by the Company, the individual customer enters into a sales and financing contract and is required to make a down payment. These financed sales contain a significant financing component and any interest income is separately recorded in the statement of income.

Revenue is measured as the amount of consideration expected to be received in exchange for transferring the homes to the customers. Sales and other similar taxes collected concurrently with revenue-producing activities are excluded from revenue.

The Company made an accounting policy election to account for any shipping and handling costs that occur after the transfer of control as a fulfillment cost that is accrued when control is transferred. Warranty obligations associated with the sale of a unit are assurance-type warranties for a period of twelve months that are a guarantee of the home’s intended functionality and, therefore, do not represent a distinct performance obligation within the context of the contract. The Company has elected to use the practical expedient to expense the incremental costs of obtaining a contract if the amortization period of the asset that the Company would have otherwise recognized is one year or less. Contract costs, which include commissions incurred related to the sale of homes, are expensed at the point-in-time when the

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

For the year ended December 31, 2023, sales to two independent third-parties and their affiliates accounted for $10,134 or 7.0% and $10,033 or 6.9% of our product sales, respectively. For the year ended December 31, 2022, sales to two independent third-parties and their affiliates accounted for $13,008 or 5.9% and $11,879 or 5.4% of our product sales, respectively.

For the years ended December 31, 2023 and 2022, total cost of product sales included $10,188 and $11,588 of costs relating to subcontracted production for commercial sales, reimbursed dealer expenses for inventory finance sales, and certain other similar costs incurred for retail store and commercial sales.

Other revenue consists of contract deposit forfeitures, consignment fees, commercial lease rents, service fees and other miscellaneous income. Consignment fees are charged to independent retailers on a monthly basis for homes held by the independent retailers pursuant to a consignment arrangement until the home is sold to an individual customer. Consignment fees are determined as a percentage of the home’s wholesale price to the independent dealer. Revenue recognition for consignment fees is recognized over time using the output method as it provides a faithful depiction of the Company’s performance toward completion of the performance obligation under the contract and the value transferred to the independent retailer for the time the home is held under consignment. The Company transitioned most of its independent retailers from consignment arrangements to inventory finance arrangements in late 2022. Revenue for commercial leases is recognized as earned monthly over a contractual period of 96 or 120 months. Revenue for service fees and miscellaneous income is recognized at a point in time when the performance obligation is satisfied.

Disaggregation of Revenue. The following table summarizes customer contract revenues disaggregated by source of the revenue for the years ended December 31, 2023 and 2022:


	Year ended
	December 31,
	2023		2022
Product sales:
Direct sales	$	17,540	$	45,549
Commercial sales		54,955		61,373
Inventory finance sales		44,135		84,037
Retail store sales		19,169		19,629
Other (1)		9,301		11,464
Total product sales		145,100		222,052
Consumer, MHP and dealer loans interest:
Interest - consumer installment notes		19,360		18,369
Interest - MHP notes		14,330		10,195
Interest - dealer finance notes		3,730		—
Total consumer, MHP and dealer loans interest		37,420		28,564
Other		6,624		6,399
Total net revenue	$	189,144	$	257,015

(1)

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

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-9

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-10

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-15

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-13

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Topic 606
-Publisher FASB
-URI https://asc.fasb.org//606/tableOfContent

+ Details

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

12 Months Ended

Dec. 31, 2023

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

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

5. 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, 2023 and 2022, the MHP Note balance is presented net of unamortized finance fees of $1,565 and $1,068, respectively. The finance fees are amortized over the life of the MHP Notes.

As of December 31, 2023 there were past due balances of $98 on the MHP Notes, and for the year ended December 31, 2023, there were no charge offs recorded for MHP Notes. Allowance for loan loss for the MHP Notes was $735 as of December 31, 2023. As of December 31, 2022 there were minimal past due balances on the MHP Notes, and for the year ended December 31, 2022, no charge offs were recorded for MHP Notes. Allowance for loan loss was considered immaterial and accordingly no provision was recorded against the MHP Notes as of December 31, 2022.

Approximately $55 million of MHP Notes and Other notes receivable is with borrowers either owned or operated by one individual. Approximately $37 million of these notes currently is in default and is the subject of ongoing litigation in which the Company is the plaintiff. These notes are collateralized by mobile homes and land and are personally guaranteed by multiple borrowers. The Company evaluated the recoverability of these notes as of December

31, 2023 and determined a provision for expected loan losses is not deemed necessary based on the analysis of the underlying collateral.

Notes receivable from mobile home parks, net of allowance for loan losses and deferred financing fees, consisted of the following at December 31, 2023 and 2022:


	2023		2022
Outstanding principal balance	$	184,280	$	143,810
Loan discount and deferred financing fees		(1,565)		(1,068)
Allowance for loan losses		(735)		—
Total	$	181,980	$	142,742

The following table presents a detail of the activity in the allowance for loan losses for the years ended December 31, 2023 and 2022:


	2023		2022
Allowance for loan losses, beginning of year	$	—	$	—
Provision for loan losses		735		—
Charge offs (recoveries)		—		—
Allowance for loan losses, end of year	$	735	$	—

The following table presents impaired and general reserve for allowance for loan losses at December 31, 2023 and 2022:


	2023		2022
Total MHP loans	$	184,280	$	134,067
Allowance for loan losses		735		—
Impaired loans individually evaluated for impairment		31,215		—
Specific reserve against impaired loans		5		—
Other loans collectively evaluated for allowance		153,065		—
General allowance for loan losses		730		—

We evaluate the credit quality of our MHP portfolio based on the aging status of the loan and by payment activity. Loan delinquency reporting is generally based upon borrower payment activity relative to the contractual terms of the loan. The following table disaggregates the outstanding principal balance of MHP receivable by credit quality indicator based on delinquency status and fiscal year of origination:


	Year of Origination
	2023		2022		2021		2020		2019		Total		% of Portfolio
< 30 days past due	$	55,783	$	51,809	$	36,215	$	35,551	$	4,073	$	183,431	%	99.5
30-90 days past due		—		—		—		—		—		—		—
> 90 days past due		462		387		—		—		—		849		0.5
Total	$	56,245	$	52,196	$	36,215	$	35,551	$	4,073	$	184,280	%	100

SUBSEQUENT EVENTS

12 Months Ended

Dec. 31, 2023

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

20. SUBSEQUENT EVENTS

In connection with the preparation of these financial statements, we evaluated subsequent events after the balance sheet date of December 31, 2023 and through the date of this filing and determined that no events occurred that would require adjustments or disclosures in the financial statements.

DEALER FINANCED RECEIVABLES (Tables) - Dealer Finance Receivable

12 Months Ended

Dec. 31, 2023

Receivables

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


	2023		2022
Outstanding principal balance	$	32,980	$	30,049
Loan discount and deferred financing fees		—		—
Allowance for loan losses		(442)		(13)
Total	$	32,538	$	30,036

Schedule of allowance for loan losses


	2023		2022
Allowance for loan losses, beginning of year	$	13	$	—
Provision for loan losses		429		13
Charge offs (recoveries)		—		—
Allowance for loan losses, end of year	$	442	$	13

DEBT SECURITIES (Details) - USD ($) $ in Thousands		12 Months Ended
DEBT SECURITIES (Details) - USD ($) $ in Thousands	Jun. 22, 2023	Dec. 31, 2023	Dec. 31, 2022
DEBT SECURITIES
Held to maturity securities		$ 0	$ 8,412
Gain on sale of debt securities	$ 12	$ 12

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Cash and Cash Equivalents (Details) $ in Thousands	Dec. 31, 2023 USD ($) item
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Number of banks exceeding the FDIC limit \| item	1
Cash in excess of FDIC limit \| $	$ 105

OTHER ASSETS

12 Months Ended

Dec. 31, 2023

OTHER ASSETS.

OTHER ASSETS

11. OTHER ASSETS

Other assets consisted of the following at December 31, 2023 and 2022:


	2023		2022
Prepaid rent	$	349	$	349
Other		7		338
Repossessed homes		2,215		795
Total	$	2,571	$	1,482

COMMITMENTS AND CONTINGENCIES - Legal Matters (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
COMMITMENTS AND CONTINGENCIES
Legal reserves	$ 990	$ 753

NATURE OF OPERATIONS - Segment Reporting (Details)	12 Months Ended
NATURE OF OPERATIONS - Segment Reporting (Details)	Dec. 31, 2023 segment
NATURE OF OPERATIONS
Number of reportable segment	1

CONSUMER LOANS RECEIVABLE - Disaggregation of outstanding principal balance of consumer loans receivable (Details) - Consumer - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Disaggregation the outstanding principal balance of consumer loans receivable
2023	$ 32,911
2022	25,040
2021	22,324
2020	13,740
2019	13,054
Prior	52,669
Financing Receivable, before Allowance for Credit Loss, Total	$ 159,738	$ 142,340
% of Portfolio	100.00%
Less than 30 days past due
Disaggregation the outstanding principal balance of consumer loans receivable
2023	$ 32,584
2022	24,951
2021	21,705
2020	13,550
2019	12,857
Prior	51,747
Financing Receivable, before Allowance for Credit Loss, Total	$ 157,394
% of Portfolio	98.50%
30-90 days past due
Disaggregation the outstanding principal balance of consumer loans receivable
2023	$ 217
2022	89
2021	108
2020	86
Prior	231
Financing Receivable, before Allowance for Credit Loss, Total	$ 731
% of Portfolio	0.50%
> 90 days past due
Disaggregation the outstanding principal balance of consumer loans receivable
2023	$ 110
2021	511
2020	104
2019	197
Prior	691
Financing Receivable, before Allowance for Credit Loss, Total	$ 1,613
% of Portfolio	1.00%

INVENTORIES (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
INVENTORIES
Raw materials	$ 13,506	$ 17,442
Work in progress	552	592
Finished goods	26,911	21,028
Total	40,969	39,062
Inventories, net	7,793	6,987
Inventory allowance for finished goods	$ 439	$ 402

BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Current assets:
Cash	$ 748	$ 2,818
Held to maturity securities	0	8,412
Accounts receivable, net	4,656	4,873
Current portion of contracts - dealer financed	32,538	29,441
Current portion of consumer loans receivable	7,682	6,801
Current portion of notes receivable from mobile home parks ("MHP")	18,156	9,670
Current portion of other notes receivable	6,013	8,927
Inventories	33,176	32,075
Prepaid expenses and other current assets	4,915	4,064
Total current assets	107,884	107,081
Contracts - dealer financed		595
Consumer loans receivable, net	148,818	132,208
Notes receivable from mobile home parks ("MHP"), net	163,824	133,072
Other notes receivable, net	28,577	13,795
Inventories, net	7,793	6,987
Other assets - leased mobile homes	7,601	8,824
ROU assets - operating leases	1,794	2,663
Other assets	2,571	1,482
Property, plant and equipment, net	37,880	30,106
Total assets	506,742	436,813
Current liabilities:
Accounts payable	4,090	4,549
Accrued liabilities	18,504	16,895
Customer deposits	4,146	9,715
Escrow liability	10,104	9,653
Operating lease obligation	489	650
Total current liabilities	37,333	41,462
Longterm liabilities:
Operating lease obligation, less current portion	1,396	2,121
Lines of credit	23,680	2,545
Deferred income taxes, net	2,338	3,065
Dealer incentive liability	5,260	5,516
Total liabilities	70,007	54,709
Commitments and contingencies (Note 17)
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; 24,843,494 and 24,814,695 issued and 24,398,429 and 24,369,630 outstanding at December 31, 2023 and 2022, respectively	30	30
Treasury stock at cost, 445,065 shares at December 31, 2023 and 2022, respectively	(4,477)	(4,477)
Additional paid-in-capital	181,424	180,555
Retained earnings	259,758	205,996
Total stockholders' equity	436,735	382,104
Total liabilities and stockholders' equity	$ 506,742	$ 436,813

DEBT SECURITIES

12 Months Ended

Dec. 31, 2023

DEBT SECURITIES

DEBT SECURITIES

12. DEBT SECURITIES

Debt securities have been classified according to management’s intent. The Company purchased US Treasury Notes in November 2022 that were to mature in November 2023. The Debt Securities were sold prior to maturity on June 22, 2023 and the proceeds were used to pay down the credit line. The Company recognized a gain of $12 when the Debt Securities were sold. The debt securities were classified as held-to-maturity and the amortized cost was $8,412 at December 31, 2022. There were no such securities held at December 31, 2023.

LINES OF CREDIT (Details) - USD ($) $ in Thousands			12 Months Ended
LINES OF CREDIT (Details) - USD ($) $ in Thousands	Jul. 28, 2023	Mar. 30, 2020	Dec. 31, 2023	Dec. 31, 2022	Jul. 28, 2022
Lines of Credit
Interest expense			$ 930	$ 225
Revolver
Lines of Credit
Maximum borrowing capacity		$ 70,000
Effective interest rate (in percent)				6.12%
Amount of available credit				$ 17,400
Outstanding balance				$ 2,545
Deferred debt issuance costs		$ 295
Borrowing amount suspended					$ 50,000
Current borrowing capacity					$ 20,000
Revolver \| SOFR
Lines of Credit
Spread rate		2.00%
New Revolver
Lines of Credit
Maximum borrowing capacity	$ 50,000
Effective interest rate (in percent)			7.95%
Amount of available credit			$ 26,320
Outstanding balance			$ 23,680
Deferred debt issuance costs	$ 271
Term of facility	4 years
Additional commitment accordion feature	$ 25,000
Interest rate based upon average quarterly borrowings	2.75%
financial covenants:
Maximum leverage ratio			1.00%
Minimum fixed charge coverage ratio			1.75
New Revolver \| SOFR
Lines of Credit
Spread rate	2.50%
New Revolver \| Base rate
Lines of Credit
Spread rate	2.50%

OTHER NOTES RECEIVABLE (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
MHP and Other Notes Receivable \| Credit concentration risk \| Independent Third Party One \| Independent third party and affiliates one
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding principal balance	$ 55,000
Receivables currently in default and are the subject of ongoing litigation	37,000
Other note receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding principal balance	35,353	$ 23,017
Loan discount and deferred financing fees	(527)	(295)
Allowance for loan losses	(236)	0
Total, net	$ 34,590	$ 22,722

EARNINGS PER SHARE- Tabular (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Numerator:
Net income (in 000's)	$ 54,460	$ 67,773
Denominator:
Basic weighted-average common shares outstanding	24,385,190	24,357,785
Effect of dilutive securities:
Diluted weighted-average common shares outstanding	25,070,626	24,742,419
Earnings per share attributable to Legacy Housing Corporation
Basic (in dollars per share)	$ 2.23	$ 2.78
Diluted (in dollars per share)	$ 2.17	$ 2.74
Restricted stock units
Effect of dilutive securities:
Dilutive securities	2,283	13,286
Employee Stock Option [Member]
Effect of dilutive securities:
Dilutive securities	683,153	371,348

RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2023

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

19. 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 $403 and $0 as of December 31, 2023 and 2022, respectively. Accounts payable balances due to Bell Mobile Homes were $18 and $132 as of December 31, 2023 and 2022, respectively. Home sales to Bell Mobile Homes were $4,543 and $4,499 for the years ended December 31, 2023 and 2022, respectively.

Shipley Bros., Ltd. and Crazy Red’s Mobile Homes (together, “Shipley Bros.”), retailers owned by one of the Company’s significant shareholders, purchase manufactured homes from the Company. Accounts receivable balances due from Shipley Bros. were $143 and $0 as of December 31, 2023 and 2022, respectively. Accounts payable balances due to Shipley Bros. were $67 and $0 as of December 31, 2023 and 2022, respectively. Home sales to Shipley Bros. were $1,199 and $3,181 as of December 31, 2023 and 2022, respectively.

At December 31, 2023 and 2022, the Company had an accounts receivable balance of $0 and $68, respectively, from a principal shareholder.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-5

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-6

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(g)(3))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
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-Paragraph 1
-Subparagraph (SX 210.6-07(2)(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(e))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//850/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-6

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

+ Details

STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Operating activities:
Net income	$ 54,460	$ 67,773
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization expense	1,726	1,936
Amortization of deferred revenue	(1,285)	(1,383)
Amortization of Treasury Note Discount	(76)	(25)
Amortization of lines of credit cost	70	74
Provision for accounts and notes receivable	1,354	(109)
Provision for long term inventory	49	(83)
Gain from sale of leased property	(507)	(753)
Non-cash operating lease expense	(50)	62
Deferred income taxes	(524)	61
Share based payment expense	769	4,936
Gain on disposal of treasury note	(12)
Changes in operating assets and liabilities:
Accounts receivable	(155)	309
Consumer loans activity, net	(17,362)	(13,346)
Notes receivable MHP activity, net	(39,192)	(39,423)
Dealer inventory loan activity, net	(2,930)	(26,553)
Inventories	(1,956)	5,699
Prepaid expenses and other current assets	(1,323)	485
Other assets	(1,246)	(1,449)
Accounts payable and accrued liabilities	(5)	(3,397)
Right of use activity, net	33	46
Customer deposits	(5,569)	1,966
Escrow liability	451	303
Dealer incentive liability	(256)	1,180
Net cash used in operating activities	(13,536)	(1,691)
Investing activities:
Purchases of property, plant and equipment	(7,713)	(3,800)
Proceeds from sale of leased property	1,108	1,684
Purchase of investments - treasury notes		(8,386)
Sale of investments - treasury notes	8,500
Issuance of notes receivable	(14,786)	(4,394)
Notes receivable collections	2,745	23,495
Collections from purchased loans	377	482
Net cash (used in) provided by investing activities	(9,769)	9,081
Financing activities:
Proceeds from exercise of stock options	100
Proceeds from lines of credit	110,761	100,589
Payments on lines of credit	(89,626)	(106,203)
Net cash provided by (used in) financing activities	21,235	(5,614)
Net (decrease) increase in cash	(2,070)	1,776
Cash at beginning of year	2,818	1,042
Cash at end of year	748	2,818
Supplemental disclosure of cash flow information:
Cash paid for interest	478	$ 251
Supplemental disclosure of non-cash transactions:
Acquisition of property plant and equipment, included in accrued liabilities	$ 1,154

OTHER NOTES RECEIVABLE - Allowance for loan losses (Details) - Other Note Receivable $ in Thousands	12 Months Ended
	Dec. 31, 2023 USD ($)
Financing Receivable, Allowance for Credit Loss
Allowance for loan losses, beginning of year	$ 0
Provision for loan losses	236
Allowance for loan losses, end of year	$ 236

- Definition

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

+ References + Details

STATEMENTS OF INCOME - USD ($) $ in Thousands	12 Months Ended
STATEMENTS OF INCOME - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Net revenue:
Product sales	$ 145,100	$ 222,052
Consumer, MHP and dealer loans interest	37,420	28,564
Other	6,624	6,399
Total net revenue	189,144	257,015
Operating expenses:
Cost of product sales	99,692	150,114
Selling, general and administrative expenses	24,279	27,568
Dealer incentive	586	1,315
Total operating expenses	124,557	178,997
Income from operations	64,587	78,018
Other income (expense):
Nonoperating interest income	3,019	2,942
Miscellaneous, net	2,060	1,563
Interest expense	(930)	(375)
Total other	4,149	4,130
Income before income tax expense	68,736	82,148
Income tax expense	(14,276)	(14,375)
Net income	$ 54,460	$ 67,773
Weighted average shares outstanding:
Basic (in shares)	24,385,190	24,357,785
Diluted (in shares)	25,070,626	24,742,419
Net income per share:
Basic (in dollars per share)	$ 2.23	$ 2.78
Diluted (in dollars per share)	$ 2.17	$ 2.74

INVENTORIES (Tables)

12 Months Ended

Dec. 31, 2023

INVENTORIES

Schedule of inventory


	2023		2022
Raw materials	$	13,506	$	17,442
Work in progress		552		592
Finished goods		26,911		21,028
Total	$	40,969	$	39,062

INCOME TAXES

12 Months Ended

Dec. 31, 2023

INCOME TAXES

INCOME TAXES

15. INCOME TAXES

The provision for income tax expense for the years ended December 31, 2023 and 2022 was $14,276 and $14,375, respectively. The effective tax rates for the years ended December 31, 2023 and 2022 were 20.8% and 17.5%,

respectively. These rates differ from the federal statutory rate of 21% primarily due to a federal tax credit for the sale of energy efficient homes under the Internal Revenue Code §45L, partially offset by state income taxes. The §45L tax credit was initially established under the Federal Energy Policy Act of 2005 and was extended through December 31, 2032 by the Inflation Reduction Act of 2022. Significant components of the provision for income taxes are as follows:


	Year ended
	December 31,
	2023		2022
Current:
Federal	$	13,763	$	13,092
State		1,037		1,222
Total current income tax provision		14,800		14,314
Deferred:
Federal		(445)		51
State		(79)		10
Total deferred income tax provision		(524)		61
Provision for income taxes	$	14,276	$	14,375

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,
	2023		2022
Federal statutory rate	21.0	%		21.0	%
State income taxes, net of federal tax benefit	0.9			1.5
Energy efficiency credit	(1.1)			(5.0)
Effective tax rate	20.8	%		17.5	%

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


	Year ended
	December 31,
	2023		2022
Deferred tax assets:
Allowance for doubtful accounts	$	983	$	439
Reserve accounts		231		204
State taxes		124		76
Payroll taxes		-		8
Uniform capitalization		19		15
Other		199		256
Total deferred tax assets		1,556		998
Deferred tax liabilities:
Installment sale revenue		(530)		(674)
Depreciation		(2,601)		(2,808)
Accrued interest receivable		(742)		(581)
Other		(21)		-
Total deferred tax liabilities		(3,894)		(4,063)
Net deferred tax liabilities	$	(2,338)	$	(3,065)

- 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.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//740/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-14

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-21

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 270
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482526/740-270-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 17
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-17

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

OTHER NOTES RECEIVABLE - Impaired and general reserve for allowance for loan losses (Details) - Other Note Receivable - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total consumer loans	$ 35,353	$ 23,017
Allowance for loan losses	236	$ 0
Impaired loans individually evaluated for impairment	25,135
Specific reserve against impaired loans	84
Other loans collectively evaluated for allowance	10,218
General allowance for loan losses	$ 152

- Definition

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

+ References + Details

CONSUMER LOANS RECEIVABLE

12 Months Ended

Dec. 31, 2023

CONSUMER LOANS RECEIVABLE

CONSUMER LOANS RECEIVABLE

4. CONSUMER LOANS RECEIVABLE

Consumer loans receivable, net of allowance for loan losses and deferred financing fees, consisted of the following at December 31, 2023 and 2022:


	2023		2022
Consumer loans receivable	$	159,738	$	142,340
Loan discount and deferred financing fees		(2,473)		(2,501)
Allowance for loan losses		(765)		(830)
Consumer loans receivable, net	$	156,500	$	139,009

The following table presents a detail of the activity in the allowance for loan losses for the years ended December 31, 2023 and 2022:


	2023		2022
Allowance for loan losses, beginning of year	$	830	$	884
Provision for loan losses		(114)		(243)
Charge offs		49		189
Allowance for loan losses, end of year	$	765	$	830

The following table presents impaired and general reserve for allowance for loan losses at December 31, 2023 and 2022:


	2023		2022
Total consumer loans	$	159,738	$	142,340
Allowance for loan losses	$	765	$	830
Impaired loans individually evaluated for impairment	$	1,565	$	1,610
Specific reserve against impaired loans	$	562	$	612
Other loans collectively evaluated for allowance	$	158,173	$	140,730
General allowance for loan losses	$	203	$	218

A detailed aging of consumer loans receivable that are past due as of December 31, 2023 and 2022 were as follows:


	2023		%	2022		%
Total consumer loans receivable	$	159,738	100.0	$	142,340	100.0
Past due consumer loans:
31 - 60 days past due	$	624	0.4	$	1,150	0.8
61 - 90 days past due		149	0.1		108	0.1
91 - 120 days past due		123	0.1		486	0.3
Greater than 120 days past due		1,449	0.9		1,255	0.9
Total past due	$	2,345	1.5	$	2,999	2.1

We evaluate the credit quality of our consumer loan portfolio based on the aging status of the loan and by payment activity. Loan delinquency reporting generally is based on borrower payment activity relative to the contractual terms of the loan. The following table disaggregates the outstanding principal balance of consumer loans receivable by credit quality indicator based on delinquency status and fiscal year of origination:


	Year of Origination
	2023		2022		2021		2020		2019		Prior		Total		% of Portfolio
< 30 days past due	$	32,584	$	24,951	$	21,705	$	13,550	$	12,857	$	51,747	$	157,394	%	98.5
30-90 days past due		217		89		108		86		—		231		731		0.5
> 90 days past due		110		—		511		104		197		691		1,613		1.0
Total	$	32,911	$	25,040	$	22,324	$	13,740	$	13,054	$	52,669	$	159,738	%	100.0

INCOME TAXES - Tabular (Details) - USD ($) $ in Thousands	12 Months Ended
INCOME TAXES - Tabular (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Current:
Federal	$ 13,763	$ 13,092
State	1,037	1,222
Total current income tax provision	14,800	14,314
Deferred:
Federal	(445)	51
State	(79)	10
Total deferred income tax provision	(524)	61
Provision for income taxes	$ 14,276	$ 14,375
Effective Income Tax Rate Reconciliation
Federal statutory rate	21.00%	21.00%
State income taxes, net of federal tax benefit	0.90%	1.50%
Energy efficiency credit	(1.10%)	(5.00%)
Effective tax rate	20.80%	17.50%
Deferred tax assets:
Allowance for doubtful accounts	$ 983	$ 439
Reserve accounts	231	204
State taxes	124	76
Payroll taxes		8
Uniform capitalization	19	15
Other	199	256
Total deferred tax assets	1,556	998
Deferred tax liabilities:
Installment sale revenue	(530)	(674)
Depreciation	(2,601)	(2,808)
Accrued interest receivable	(742)	(581)
Other	(21)
Total deferred tax liabilities	(3,894)	(4,063)
Net deferred tax liabilities	$ (2,338)	$ (3,065)

NOTES RECEIVABLE FROM MOBILE HOME PARKS ("MHP Notes") - Impaired and general reserve for allowance for loan losses (Details) - MHP Notes - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total consumer loans	$ 184,280	$ 134,067
Allowance for loan losses	735
Impaired loans individually evaluated for impairment	31,215
Specific reserve against impaired loans	5
Other loans collectively evaluated for allowance	153,065
General allowance for loan losses	$ 730

- Definition

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

+ References + Details

ACCRUED LIABILITIES

12 Months Ended

Dec. 31, 2023

ACCRUED LIABILITIES.

ACCRUED LIABILITIES

13. ACCRUED LIABILITIES

Accrued liabilities consist of the following at December 31, 2023 and 2022:


	2023		2022
Warranty reserve	$	2,910	$	3,049
Litigation reserve		990		753
Payroll		879		1,006
Portfolio taxes and title		2,234		1,610
Property tax		1,018		54
Dealer rebates		1,040		1,402
Sales tax		190		61
Federal and state income taxes		3,759		6,699
Other		5,484		2,261
Total accrued liabilities	$	18,504	$	16,895

EARNINGS PER SHARE

12 Months Ended

Dec. 31, 2023

EARNINGS PER SHARE

EARNINGS PER SHARE

18. EARNINGS PER SHARE


	Year ended
	December 31,
	2023		2022
Numerator:
Net income (in 000's)	$	54,460	$	67,773
Denominator:
Basic weighted-average common shares outstanding		24,385,190		24,357,785
Effect of dilutive securities:
Restricted stock grants		2,283		13,286
Stock options		683,153		371,348
Diluted weighted-average common shares outstanding		25,070,626		24,742,419
Earnings per share attributable to Legacy Housing Corporation
Basic	$	2.23	$	2.78
Diluted	$	2.17	$	2.74

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Leased Property (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Lessor, Description Of Leases [Line Items]
Depreciation expense on leased property	$ 632	$ 582
Minimum
Lessor, Description Of Leases [Line Items]
Term of lease agreement	96 months
Maximum
Lessor, Description Of Leases [Line Items]
Term of lease agreement	120 months
Leased Mobile Homes
Lessor, Description Of Leases [Line Items]
Useful life	15 years

NOTES RECEIVABLE FROM MOBILE HOME PARKS ("MHP Notes") - Notes receivable from mobile home parks (Details) - MHP Notes - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding principal balance	$ 184,280	$ 143,810
Loan discount and deferred financing fees	(1,565)	(1,068)
Allowance for loan losses	(735)
Total, net	$ 181,980	$ 142,742

- Definition

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

+ References + Details

- Definition

Amortized cost, before allowance for credit loss, of financing receivable. Excludes financing receivable covered under loss sharing agreement and net investment in lease.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 326
-SubTopic 20
-Name Accounting Standards Codification
-Section 55
-Paragraph 80
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479294/326-20-55-80

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 326
-SubTopic 20
-Name Accounting Standards Codification
-Section 55
-Paragraph 79
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479294/326-20-55-79

Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 326
-SubTopic 20
-Name Accounting Standards Codification
-Section 45
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479344/326-20-45-1

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 210
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(3)(b))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480566/210-10-S99-1

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Name Regulation S-K (SK)
-Number 229
-Section 1405
-Paragraph (a)
-Subparagraph (1)
-Publisher SEC

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Name Regulation S-K (SK)
-Number 229
-Section 1405
-Paragraph (a)
-Subparagraph (2)
-Publisher SEC

Reference 7: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1404
-Paragraph (a)
-Publisher SEC

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 326
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479319/326-20-50-14

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Section 50
-Paragraph 7A
-SubTopic 10
-Topic 310
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481962/310-10-50-7A

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 326
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479319/326-20-50-5

+ Details

PROPERTY, PLANT AND EQUIPMENT

12 Months Ended

Dec. 31, 2023

PROPERTY, PLANT AND EQUIPMENT

PROPERTY, PLANT AND EQUIPMENT

10. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following at December 31, 2023 and 2022:


	2023		2022
Land	$	14,953	$	14,953
Buildings and leasehold improvements		13,419		11,818
Construction in Progress		11,576		5,131
Vehicles		1,571		1,556
Machinery and equipment		6,527		5,750
Furniture and fixtures		329		300
Total		48,375		39,508
Less accumulated depreciation		(10,495)		(9,402)
Total property, plant and equipment	$	37,880	$	30,106

Depreciation expense was $1,663 with $512 included as a component of cost of product sales for the year ended December 31, 2023 and $1,137 with $568 included as a component of cost of product sales for the year ended December 31, 2022.

OTHER ASSETS (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
OTHER ASSETS.
Prepaid rent	$ 349	$ 349
Other	7	338
Repossessed homes	2,215	795
Total	$ 2,571	$ 1,482

CONSUMER LOANS RECEIVABLE - Allowance for loan losses (Details) - Consumer - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Financing Receivable, Allowance for Credit Loss
Allowance for loan losses, beginning of year	$ 830	$ 884
Provision for loan losses	(114)	(243)
Charge offs	49	189
Allowance for loan losses, end of year	$ 765	$ 830

- 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 - Disaggregation of outstanding principal balance of Other notes receivable (Details) - Other Note Receivable - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Disaggregation the outstanding principal balance of consumer loans receivable
2023	$ 33,348
2022	760
2021	840
2020	300
2019	105
Financing Receivable, before Allowance for Credit Loss, Total	$ 35,353	$ 23,017
% of Portfolio	100.00%
Less than 30 days past due
Disaggregation the outstanding principal balance of consumer loans receivable
2023	$ 33,348
2022	461
2021	191
2020	300
2019	105
Financing Receivable, before Allowance for Credit Loss, Total	$ 34,405
% of Portfolio	97.30%
> 90 days past due
Disaggregation the outstanding principal balance of consumer loans receivable
2022	$ 299
2021	649
Financing Receivable, before Allowance for Credit Loss, Total	$ 948
% of Portfolio	2.70%

ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
ACCRUED LIABILITIES.
Warranty reserve	$ 2,910	$ 3,049
Litigation reserve	990	753
Payroll	879	1,006
Portfolio taxes and title	2,234	1,610
Property tax	1,018	54
Dealer rebates	1,040	1,402
Sales tax	190	61
Federal and state income taxes	3,759	6,699
Other	5,484	2,261
Total accrued liabilities	$ 18,504	$ 16,895

PROPERTY, PLANT AND EQUIPMENT (Tables)

12 Months Ended

Dec. 31, 2023

PROPERTY, PLANT AND EQUIPMENT

Schedule of property, plant and equipment


	2023		2022
Land	$	14,953	$	14,953
Buildings and leasehold improvements		13,419		11,818
Construction in Progress		11,576		5,131
Vehicles		1,571		1,556
Machinery and equipment		6,527		5,750
Furniture and fixtures		329		300
Total		48,375		39,508
Less accumulated depreciation		(10,495)		(9,402)
Total property, plant and equipment	$	37,880	$	30,106

REVENUE - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Disaggregation of Revenue
Product sales	$ 145,100	$ 222,052
Consumer and MHP loans interest:
Interest - consumer installments notes	19,360	18,369
Interest - MHP notes	14,330	10,195
Interest - dealer finance notes	3,730
Total consumer, MHP and dealer loans interest	37,420	28,564
Other	6,624	6,399
Total net revenue	189,144	257,015
Direct sales
Disaggregation of Revenue
Product sales	17,540	45,549
Commercial sales
Disaggregation of Revenue
Product sales	54,955	61,373
Inventory finance sales
Disaggregation of Revenue
Product sales	44,135	84,037
Retail store sales
Disaggregation of Revenue
Product sales	19,169	19,629
Other (1)
Disaggregation of Revenue
Product sales	$ 9,301	$ 11,464

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2023

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

17. 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, 2023 and 2022, the Company accrued a $242 and $149 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 Company believes that risk of loss is mitigated due to the resale value of the repurchased homes and the fact that the agreements are spread over many retailers. The maximum amount for which the Company was liable under such agreements approximated $3,030 and $8,925 at December 31, 2023 and 2022, 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, 2023 or 2022.

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 $645 and $710 for the years ended December 31, 2023 and 2022, 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 was approximately $245 and $326 for the years ended December 31, 2023 and 2022, respectively. See Note 6 – Leases, for a schedule of the Company’s future minimum lease commitments.

Legal Matters

The Company is party to certain legal proceedings that arise in the ordinary course and are incidental to its business. Certain of the claims pending against the Company in these proceedings allege, among other things, breach of contract and warranty, product liability and personal injury. The Company has determined that it is probable that it has some liability related to the claims. The Company has included legal reserves of $990 and $753 as of December 31, 2023 and 2022, 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.

Pay vs Performance Disclosure - USD ($) $ in Thousands	12 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Pay vs Performance Disclosure
Net Income (Loss)	$ 54,460	$ 67,773

- Definition

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

+ References

+ Details

BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2023	Dec. 31, 2022
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	24,843,494	24,814,695
Common stock, shares outstanding	24,398,429	24,369,630
Treasury stock, shares	445,065	445,065

Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2023	Dec. 31, 2022	Mar. 10, 2024	Jun. 30, 2023
Document and Entity Information
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2023
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	false
ICFR Auditor Attestation Flag	true
Document Financial Statement Error Correction [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				$ 235,772,057
Entity Common Stock, Shares Outstanding			24,401,429
Entity Central Index Key	0001436208
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	FY
Amendment Flag	false
Auditor Name	Frazier & Deeter, LLC	Daszkal Bolton, LLP
Auditor Firm ID	215	229
Auditor Location	Tampa, Florida	Sunrise, Florida

ACCRUED LIABILITIES (Tables)

12 Months Ended

Dec. 31, 2023

ACCRUED LIABILITIES.

Schedule of accrued liabilities


	2023		2022
Warranty reserve	$	2,910	$	3,049
Litigation reserve		990		753
Payroll		879		1,006
Portfolio taxes and title		2,234		1,610
Property tax		1,018		54
Dealer rebates		1,040		1,402
Sales tax		190		61
Federal and state income taxes		3,759		6,699
Other		5,484		2,261
Total accrued liabilities	$	18,504	$	16,895

SHARE-BASED COMPENSATION - Summary of Stock options activity (Details) - Employee Stock Option [Member] - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Number of units
Outstanding at the beginning	1,025,000	83,000
Granted	43,000	1,025,000
Exercised	(6,000)
Forfeited	(56,000)	(83,000)
Outstanding at the end	1,006,000	1,025,000	83,000
Exercisable	96,000
Weighted Average Exercise Price Per Unit
Outstanding at the beginning (in dollars per share)	$ 40.59	$ 16.83
Granted (in dollars per share)	22.94	40.59
Exercised (in dollars per share)	16.01
Forfeited (in dollars per share)	16.01	16.83
Outstanding at the end (in dollars per share)	41.35	40.59	$ 16.83
Exercisable (in dollars per share)	42.18
Weighted Average Grant Date Fair Value Per Unit
Outstanding at the beginning (in dollars per share)	4.99	12.27
Granted (in dollars per share)	15.32	4.99
Exercised (in dollars per share)	8.57
Forfeited (in dollars per share)	8.57	12.27
Outstanding at the end (in dollars per share)	5.22	$ 4.99	$ 12.27
Exercisable (in dollars per share)	$ 4.76
Weighted Average Remaining Contractual Life and Aggregate Intrinsic Value
Outstanding (in years)	8 years 3 months 10 days	9 years 5 months 8 days	9 years 4 months 9 days
Granted (in years)	4 years 8 months 12 days	9 years 5 months 8 days
Exercisable (in years)	8 years 5 months 8 days
Non-vested shares	1,006,000
Unrecognized compensation expense	$ 4,479
Unrecognized compensation expense, recognition period	8 years 3 months 18 days
Share based compensation expense	$ 535	$ 348

DEALER FINANCED RECEIVABLES

12 Months Ended

Dec. 31, 2023

DEALER FINANCED RECEIVABLES

DEALER FINANCED RECEIVABLES

7. DEALER FINANCED RECEIVABLES

Dealer financed receivables include receivables from loans that we make to independent retailers, or dealers, for the purchase of mobile homes so that dealers can then market them for sale to consumers. Dealer financed notes receivable, net of allowance for loan losses and deferred financing fees, consisted of the following at December 31, 2023 and 2022:


	2023		2022
Outstanding principal balance	$	32,980	$	30,049
Loan discount and deferred financing fees		—		—
Allowance for loan losses		(442)		(13)
Total	$	32,538	$	30,036

The following table presents a detail of the activity in the allowance for loan losses for the years ended December 31, 2023 and 2022:


	2023		2022
Allowance for loan losses, beginning of year	$	13	$	—
Provision for loan losses		429		13
Charge offs (recoveries)		—		—
Allowance for loan losses, end of year	$	442	$	13

The dealer financed loan portfolio was established primarily in late 2022 and 2023 as a result of converting from consignment arrangements with dealers to inventory finance arrangements with dealers. As such, there is relatively little historical data to measure credit quality of the loans in this portfolio.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands	Jan. 01, 2022	Dec. 31, 2023	Jan. 01, 2023	Dec. 31, 2022
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Assets		$ 506,742		$ 436,813
Liabilities		70,007		54,709
Lease, Practical Expedients, Package [true false]	true
Lease, Practical Expedient, Use of Hindsight [true false]	false
Retained earnings		259,758		205,996
MHP Notes
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for loan losses		735
Other Note Receivable
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for loan losses		$ 236		$ 0
Cumulative effect, period of adoption, adjustment \| ASU 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Assets	$ 3,258
Liabilities	$ 3,258
Cumulative effect, period of adoption, adjustment \| ASU 2016-13
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for loan losses			$ 900
Retained earnings			(698)
Cumulative effect, period of adoption, adjustment \| MHP Notes \| ASU 2016-13
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for loan losses			225
Cumulative effect, period of adoption, adjustment \| Dealer Financed Contracts [Member] \| ASU 2016-13
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for loan losses			187
Cumulative effect, period of adoption, adjustment \| Other Note Receivable \| ASU 2016-13
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for loan losses			$ 488

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2023

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of future minimum lease income

Future minimum lease income under all operating leases for each of the next five years at December 31, 2023,is as follows:


2024	$	1,825
2025		1,825
2026		1,825
2027		1,653
2028		1,460
Thereafter		804
Total	$	9,392

Schedule of the activity within the warranty liability account


	2023		2022
Warranty liability, beginning of year	$	3,049	$	2,876
Product warranty accrued		2,552		2,874
Warranty costs incurred		(2,691)		(2,701)
Warranty liability, end of year	$	2,910	$	3,049

Schedule of Fair Market value and book value of the portfolios


	2023		2022
Consumer loan portfolio, fair value	$	155,146	$	138,800
Consumer loan portfolio, book value		156,499		139,009
Fixed rate MHP Notes, fair value		176,270		128,400
Fixed rate MHP Notes, book value		178,724		129,966
Fixed rate other notes, fair value		34,340		21,600
Fixed rate other notes, book value		34,590		22,722

SHARE-BASED COMPENSATION - Plan (Details) shares in Millions	12 Months Ended
	Dec. 31, 2023 shares
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	10.0
Number of shares available for grant	8.7
Employee Stock Option [Member]
SHARE-BASED COMPENSATION
Contractual life	10 years

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 35
-Paragraph 1D
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+ Details

NATURE OF OPERATIONS

12 Months Ended

Dec. 31, 2023

NATURE OF OPERATIONS

NATURE OF OPERATIONS

1. NATURE OF OPERATIONS

Legacy Housing Corporation (referred herein as ”Legacy”, “we”, “our”, “us”, or the “Company”) was formed on January 1, 2018 as a Delaware corporation through a corporate conversion of Legacy Housing, Ltd., (the “Partnership”) a Texas limited partnership formed in May 2005. Effective December 31, 2019, the Company reincorporated from a Delaware corporation to a Texas corporation. The Company is headquartered in Bedford, Texas.

The Company (1) manufactures and provides for the transport of mobile homes, (2) provides wholesale financing to dealers and mobile home parks 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 consumers, through its own retail stores, and to dealers and mobile home parks.

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”).

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. 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 includes providing transportation for dealers. We also provide financing options to the customers to facilitate such sale of homes. In addition, the sale of homes is directly related to financing provided by us. Accordingly, all significant operating and strategic decisions by the chief operating decision-maker, the Chief Executive Officer, are based upon analyses of our company as one segment or unit.

OTHER NOTES RECEIVABLE

12 Months Ended

Dec. 31, 2023

OTHER NOTES RECEIVABLE

OTHER NOTES RECEIVABLE

6. Other Notes Receivable

Other notes receivable include loans that we make to community owners for the purpose of acquiring or developing properties and, as part of the arrangement, these community owners contract to buy homes from us.

Other notes receivable, net of allowance for loan losses and deferred financing fees, consisted of the following at December 31, 2023 and 2022:


	2023		2022
Outstanding principal balance	$	35,353	$	23,017
Loan discount and deferred financing fees		(527)		(295)
Allowance for loan losses		(236)		—
Total	$	34,590	$	22,722

The following table presents a detail of the activity in the allowance for loan losses for the years ended December 31, 2023 and 2022:


	2023		2022
Allowance for loan losses, beginning of year	$	—	$	—
Provision for loan losses		236		—
Charge offs (recoveries)		—		—
Allowance for loan losses, end of year	$	236	$	—

The following table presents impaired and general reserve for allowance for loan losses at December 31, 2023 and 2022:


	2023		2022
Total Other notes receivable	$	35,353	$	23,017
Allowance for loan losses		236		—
Impaired loans individually evaluated for impairment		25,135		—
Specific reserve against impaired loans		84		—
Other notes receivable collectively evaluated for allowance		10,218		—
General allowance for loan losses		152		—

We evaluate the credit quality of our Other notes receivable portfolio based on the aging status of the loan and by payment activity. Loan delinquency reporting is generally based upon borrower payment activity, relative to the contractual terms of the loan. The following table disaggregates the outstanding principal balance of Other notes receivable by credit quality indicator based on delinquency status and fiscal year of origination:


	Year of Origination
	2023		2022		2021		2020		2019		Total		% of Portfolio
< 30 days past due	$	33,348	$	461	$	191	$	300	$	105	$	34,405	%	97.3
30-90 days past due		—		—		—		—		—		—		—
> 90 days past due		—		299		649		—		—		948		2.7
Total	$	33,348	$	760	$	840	$	300	$	105	$	35,353	%	100.0

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2023

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

Basis of Presentation

Use of Estimates

Use of Estimates

Segment Reporting

Segment Reporting

Cash

Held to Maturity Securities

Accounts Receivable

“Accounts receivable, net” includes receivables from direct sales of mobile homes, sales of parts and supplies to customers, inventory finance fees and interest.

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

Notes Receivable from Mobile Home Parks

Allowance for Loan Losses—MHP Notes

Other Notes Receivable

Dealer Finance Receivable

Inventories

Leased Property

Future minimum lease income under all operating leases for each of the next five years at December 31, 2023,is as follows:


2024	$	1,825
2025		1,825
2026		1,825
2027		1,653
2028		1,460
Thereafter		804
Total	$	9,392

Property, Plant, and Equipment

Impairment of Long-Lived Assets

Dealer Incentive Liability

Product Warranties

The following table summarizes activity within the warranty liability for the years ended December 31, 2023 and 2022:


	2023		2022
Warranty liability, beginning of year	$	3,049	$	2,876
Product warranty accrued		2,552		2,874
Warranty costs incurred		(2,691)		(2,701)
Warranty liability, end of year	$	2,910	$	3,049

Advertising Costs

The Company expenses all advertising and marketing expenses in the period incurred. Advertising costs for the years ended December 31, 2023 and 2022 were $409 and $120, respectively.

Fair Value Measurements

(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.

Fair Value of Financial Instruments

The Company’s financial instruments consist primarily of cash, investments in U.S. Treasury Notes, accounts receivable, consumer loans, MHP Notes, other notes, accounts payable and lines of credit.


	2023		2022
Consumer loan portfolio, fair value	$	155,146	$	138,800
Consumer loan portfolio, book value		156,499		139,009
Fixed rate MHP Notes, fair value		176,270		128,400
Fixed rate MHP Notes, book value		178,724		129,966
Fixed rate other notes, fair value		34,340		21,600
Fixed rate other notes, book value		34,590		22,722

Revenue Recognition

Reserve for Repurchase Commitments

Interest Income

Interest related to other notes receivable balances and interest income earned on cash balances is shown in Non-operating Interest Income on the statements of income.

Share-Based Compensation

Share-Based Compensation

Shipping and Handling Costs

Earnings Per Share

Earnings Per Share

Income Taxes

Concentrations

Recent Accounting Pronouncements

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

DEALER FINANCED RECEIVABLES - net of allowance for loan losses and deferred financing fees (Details) - Dealer Finance Receivable - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Receivables
Outstanding principal balance	$ 32,980	$ 30,049
Allowance for loan losses	(442)	(13)
Total, net	$ 32,538	$ 30,036

- Definition

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

+ References + Details

- Definition

Amortized cost, before allowance for credit loss, of financing receivable. Excludes financing receivable covered under loss sharing agreement and net investment in lease.

+ References

+ Details

NOTES RECEIVABLE FROM MOBILE HOME PARKS ("MHP Notes") - Allowance for loan losses (Details) - MHP Notes - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Accounts, Notes, Loans and Financing Receivable [Line Items]
Provision for loan losses	$ 735	$ 0
Allowance for loan losses, end of year	$ 735

- Definition

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

+ References + Details

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Leased Property - Future Minimum Lease Income (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Future minimum lease income
2024	$ 1,825
2025	1,825
2026	1,825
2027	1,653
2028	1,460
Thereafter	804
Total	$ 9,392

REVENUE (Tables)

12 Months Ended

Dec. 31, 2023

REVENUE

Schedule of disaggregation of revenue


	Year ended
	December 31,
	2023		2022
Product sales:
Direct sales	$	17,540	$	45,549
Commercial sales		54,955		61,373
Inventory finance sales		44,135		84,037
Retail store sales		19,169		19,629
Other (1)		9,301		11,464
Total product sales		145,100		222,052
Consumer, MHP and dealer loans interest:
Interest - consumer installment notes		19,360		18,369
Interest - MHP notes		14,330		10,195
Interest - dealer finance notes		3,730		—
Total consumer, MHP and dealer loans interest		37,420		28,564
Other		6,624		6,399
Total net revenue	$	189,144	$	257,015

LINES OF CREDIT

12 Months Ended

Dec. 31, 2023

LINES OF CREDIT.

LINES OF CREDIT

14. LINES OF CREDIT

Revolver

On March 30, 2020, the Company entered into an agreement with Capital One (“Capital One”) for a revolving line of credit (“Revolver”). The Revolver had a maximum credit limit of $70,000 and a maturity date of March 30, 2024.

On June 21, 2022, we received a Reservation of Rights notice from Capital One. The letter stated that the Company’s Revolver was in default. The default condition occurred due to the our failure to timely file the Form 10-K and deliver certain financial statements to Capital One. On July 28, 2022, we entered into a Limited Waiver and First Amendment to Credit Agreement (the “Amendment”) with Capital One. The Amendment replaced the LIBOR

borrowing rate with a secured overnight financing rate (“SOFR”) and waived a default arising out of a monetary judgment against the Company that exceeded the amount allowed in the Revolver.

On August 24, 2022, we received a Notice of Default and Partial Suspension of Loan Commitments from Capital One. The notice stated that the July 28, 2022 forbearance agreement had been terminated and that Capital One was permitted to suspend $50,000 of the $70,000 loan commitment under the Revolver. As a result, the available line of credit in the Revolver was limited to $20,000.

The Revolver accrued interest at one-month SOFR plus 2.00%. Amounts available under the Revolver were subject to a formula based on eligible consumer loans and MHP Notes and were secured by all accounts receivable, consumer loans and MHP Notes. In connection with the Revolver, the Company paid certain arrangement fees and other fees of approximately $295, which were capitalized as unamortized debt issuance costs and were amortized to interest expense over the life of the Revolver. The Revolver required the Company to comply with certain financial and non-financial covenants.

On July 28, 2023, upon entry into the New Revolver described below, the Capital One Revolver was repaid in full, and all commitments thereunder were terminated.

New Revolver

On July 28, 2023, the Company entered into a new Credit Agreement (the “New Revolver”), by and among the Company as borrower, the financial institutions from time to time party thereto, as lenders, and Prosperity Bank as administrative agent. The New Revolver provides for a four-year senior secured revolving credit facility with an initial commitment of $50,000 and an additional $25,000 commitment under an accordion feature. The New Revolver is secured by the Company’s consumer loans receivables and all escrow accounts associated with the consumer loans receivables. At the Company's option, borrowings will bear interest at a per annum rate equal to, (i) Term Secured Overnight Financing Rate (“SOFR”) plus an applicable margin of 2.5% or 2.75% based upon the Company's average quarterly borrowings under the New Revolving Credit Agreement or (ii) a base rate plus an applicable margin of 2.5% or 2.75% based upon the Company's average quarterly borrowings under the New Revolver. The Company paid certain arrangement fees and other fees in connection with the New Revolver of approximately $271, which were capitalized as unamortized debt issuance costs and included within lines of credit balance in the accompanying balance sheets and are amortized to interest expense over the life of the New Revolver. The New Revolver matures July 28, 2027.

For the year ended December 31, 2023, interest expense under the Revolver and New Revolver was $930, and for the year ended December 31, 2022, interest expense under the Revolver was $225. The outstanding balance of the New Revolver as of December 31, 2023 was $23,680, and the outstanding balance of the Revolver as of December 31, 2022 was $2,545. The interest rate in effect as of December 31, 2023 for the New Revolver was 7.95% and the interest rate in effect as of December 31, 2022 for the Revolver was 6.12%. The amount of available credit under the New Revolver was $26,320 as of December 31, 2023 and the amount of available credit under the Revolver was $17,400 as of December 31, 2022. The New Revolver requires the Company to comply with certain financial and non-financial covenants. As of December 31, 2023, the Company was in compliance with all financial covenants, including that it maintain a maximum leverage ratio of no more than 1.00 to 1.00 and a minimum fixed charge coverage ratio of no less than 1.75 to 1.00.

- 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://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 470
-Name Accounting Standards Codification
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-URI https://asc.fasb.org//470/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 1I
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

+ Details

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Dealer Incentive Liability, Advertising Costs (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Dealer Incentive Liability
Dealer incentive liability	$ 5,260	$ 5,516
Dealer incentive expense	$ 586	$ 1,315

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fair value of financial instruments (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
U.S. Treasury \| Fair Value \| Level 1
Fair value of financial instruments
Debt securities		$ 8,409
U.S. Treasury \| Book Value
Fair value of financial instruments
Debt securities		8,412
Consumer loan portfolio \| Fair Value \| Level 3
Fair value of financial instruments
Loans	$ 155,146	138,800
Consumer loan portfolio \| Book Value
Fair value of financial instruments
Loans	156,499	139,009
Notes Receivable from Mobile Home Parks \| Fair Value \| Level 3
Fair value of financial instruments
Notes receivable	176,270	128,400
Notes Receivable from Mobile Home Parks \| Book Value
Fair value of financial instruments
Notes receivable	178,724	129,966
Other Note Receivable \| Fair Value \| Level 3
Fair value of financial instruments
Notes receivable	34,340	21,600
Other Note Receivable \| Book Value
Fair value of financial instruments
Notes receivable	$ 34,590	$ 22,722

CONSUMER LOANS RECEIVABLE (Tables) - Consumer

12 Months Ended

Dec. 31, 2023

Receivables

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


	2023		2022
Consumer loans receivable	$	159,738	$	142,340
Loan discount and deferred financing fees		(2,473)		(2,501)
Allowance for loan losses		(765)		(830)
Consumer loans receivable, net	$	156,500	$	139,009

Schedule of allowance for loan losses


	2023		2022
Allowance for loan losses, beginning of year	$	830	$	884
Provision for loan losses		(114)		(243)
Charge offs		49		189
Allowance for loan losses, end of year	$	765	$	830

Schedule of impaired and general reserve for allowance for loan losses


	2023		2022
Total consumer loans	$	159,738	$	142,340
Allowance for loan losses	$	765	$	830
Impaired loans individually evaluated for impairment	$	1,565	$	1,610
Specific reserve against impaired loans	$	562	$	612
Other loans collectively evaluated for allowance	$	158,173	$	140,730
General allowance for loan losses	$	203	$	218

Schedule of consumer loans receivable that are past due


	2023		%	2022		%
Total consumer loans receivable	$	159,738	100.0	$	142,340	100.0
Past due consumer loans:
31 - 60 days past due	$	624	0.4	$	1,150	0.8
61 - 90 days past due		149	0.1		108	0.1
91 - 120 days past due		123	0.1		486	0.3
Greater than 120 days past due		1,449	0.9		1,255	0.9
Total past due	$	2,345	1.5	$	2,999	2.1

Schedule of disaggregation of outstanding principal balance of consumer loans receivable


	Year of Origination
	2023		2022		2021		2020		2019		Prior		Total		% of Portfolio
< 30 days past due	$	32,584	$	24,951	$	21,705	$	13,550	$	12,857	$	51,747	$	157,394	%	98.5
30-90 days past due		217		89		108		86		—		231		731		0.5
> 90 days past due		110		—		511		104		197		691		1,613		1.0
Total	$	32,911	$	25,040	$	22,324	$	13,740	$	13,054	$	52,669	$	159,738	%	100.0

EARNINGS PER SHARE (Tables)

12 Months Ended

Dec. 31, 2023

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,
	2023		2022
Numerator:
Net income (in 000's)	$	54,460	$	67,773
Denominator:
Basic weighted-average common shares outstanding		24,385,190		24,357,785
Effect of dilutive securities:
Restricted stock grants		2,283		13,286
Stock options		683,153		371,348
Diluted weighted-average common shares outstanding		25,070,626		24,742,419
Earnings per share attributable to Legacy Housing Corporation
Basic	$	2.23	$	2.78
Diluted	$	2.17	$	2.74

NOTES RECEIVABLE FROM MOBILE HOME PARKS ("MHP Notes") (Tables) - Notes Receivable from Mobile Home Parks

12 Months Ended

Dec. 31, 2023

Accounts, Notes, Loans and Financing Receivable [Line Items]

Schedule of other notes receivable


	2023		2022
Outstanding principal balance	$	184,280	$	143,810
Loan discount and deferred financing fees		(1,565)		(1,068)
Allowance for loan losses		(735)		—
Total	$	181,980	$	142,742

Schedule of allowance for loan losses


	2023		2022
Allowance for loan losses, beginning of year	$	—	$	—
Provision for loan losses		735		—
Charge offs (recoveries)		—		—
Allowance for loan losses, end of year	$	735	$	—

Schedule of impaired and general reserve for allowance for loan losses


	2023		2022
Total MHP loans	$	184,280	$	134,067
Allowance for loan losses		735		—
Impaired loans individually evaluated for impairment		31,215		—
Specific reserve against impaired loans		5		—
Other loans collectively evaluated for allowance		153,065		—
General allowance for loan losses		730		—

Schedule of disaggregation of outstanding principal balance of consumer loans receivable


	Year of Origination
	2023		2022		2021		2020		2019		Total		% of Portfolio
< 30 days past due	$	55,783	$	51,809	$	36,215	$	35,551	$	4,073	$	183,431	%	99.5
30-90 days past due		—		—		—		—		—		—		—
> 90 days past due		462		387		—		—		—		849		0.5
Total	$	56,245	$	52,196	$	36,215	$	35,551	$	4,073	$	184,280	%	100

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Product Warranty (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Term of product warranty	1 year
Warranty liability, beginning of year	$ 3,049	$ 2,876
Product warranty accrued	2,552	2,874
Warranty costs incurred	(2,691)	(2,701)
Warranty liability, end of year	2,910	3,049
Advertising Costs	$ 409	$ 120

SHARE-BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2023

SHARE-BASED COMPENSATION

Schedule of restricted stock units activity

The following is a summary of restricted stock award activity for the year ending December 31, 2023 (in thousands, except per unit data):


	Number of Units		Weighted Average Grant Date Fair Value Per Unit
Nonvested, January 1, 2022	35	$	14.01
Granted	517	$	11.82
Vested	(160)	$	24.32
Canceled	(350)	$	5.99
Nonvested, December 31, 2022	42	$	6.93

Nonvested, January 1, 2023	42	$	6.93
Granted	1	$	23.26
Vested	(18)	$	14.98
Canceled	(17)	$	13.63
Nonvested, December 31, 2023	8	$	17.09

Schedule of stock option activity

The following is a summary of option award 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, 2022	83	$	16.83	$	12.27	9.36
Granted	1,025	$	40.59	$	4.99	9.44
Exercised	—	$	-	$	-	—
Forfeited	(83)	$	16.83	$	12.27	—
Outstanding, December 31, 2022	1,025	$	40.59	$	4.99	9.44	$
Exercisable, December 31, 2022	—	$	—	$	—	—	$	—

Outstanding, January 1, 2023	1,025	$	40.59	$	4.99	9.44
Granted	43	$	22.94	$	15.32	4.70
Exercised	(6)	$	16.01	$	8.57	—
Forfeited	(56)	$	16.01	$	8.57	—
Outstanding, December 31, 2023	1,006	$	41.35	$	5.22	8.28	$
Exercisable, December 31, 2023	96	$	42.18	$	4.76	8.44	$	—

NOTES RECEIVABLE FROM MOBILE HOME PARKS ("MHP Notes") - Disaggregates the outstanding principal balance of MHP receivable (Details) - MHP Notes - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Disaggregation the outstanding principal balance of consumer loans receivable
2023	$ 56,245
2022	52,196
2021	36,215
2020	35,551
2019	4,073
Financing Receivable, before Allowance for Credit Loss, Total	$ 184,280	$ 143,810
% of Portfolio	100.00%
Less than 30 days past due
Disaggregation the outstanding principal balance of consumer loans receivable
2023	$ 55,783
2022	51,809
2021	36,215
2020	35,551
2019	4,073
Financing Receivable, before Allowance for Credit Loss, Total	$ 183,431
% of Portfolio	99.50%
> 90 days past due
Disaggregation the outstanding principal balance of consumer loans receivable
2023	$ 462
2022	387
Financing Receivable, before Allowance for Credit Loss, Total	$ 849
% of Portfolio	0.50%

PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
PROPERTY, PLANT AND EQUIPMENT
Total	$ 48,375	$ 39,508
Less accumulated depreciation	(10,495)	(9,402)
Total property, plant and equipment	37,880	30,106
Depreciation expense	1,663	1,137
Cost of product sales
PROPERTY, PLANT AND EQUIPMENT
Depreciation expense	512	568
Land
PROPERTY, PLANT AND EQUIPMENT
Total	14,953	14,953
Buildings and leasehold improvements
PROPERTY, PLANT AND EQUIPMENT
Total	13,419	11,818
Construction in Progress
PROPERTY, PLANT AND EQUIPMENT
Total	11,576	5,131
Vehicles
PROPERTY, PLANT AND EQUIPMENT
Total	1,571	1,556
Machinery and equipment
PROPERTY, PLANT AND EQUIPMENT
Total	6,527	5,750
Furniture and fixtures
PROPERTY, PLANT AND EQUIPMENT
Total	$ 329	$ 300