All right. Good morning. This is Duncan Bates, Legacy's President and CEO. Thanks for joining our first quarter 2023 conference call. Max Africk, Legacy's General Counsel, will read the safe harbor disclosure before getting started. Thanks, Duncan. Before we begin, may I remind our listeners that management's prepared remarks today will contain forward-looking statements which are subject to risks and uncertainties, and management may make additional forward-looking statements in response to your questions. Therefore, the company claims the protection of the safe harbor for forward-looking statements that is contained in the Private Securities Litigation Reform Act of 1995. Actual results may vary or differ from management's current expectations, and therefore, we refer you to a more detailed discussion of the risks and uncertainties in the company's annual report filed with the Securities and Exchange Commission. In addition, any projections as to the company's future performance represent management's estimates as of today's call. Legacy Housing assumes no obligation to update these projections in the future unless otherwise required by applicable law. Thanks, Max. I'll run through our prepared remarks, then we'll open the call for Q&A. Product revenue decreased to $43.3 million or 16.4% in the first quarter of 2023 compared to the first quarter of 2022. The decrease primarily resulted from a reduction in shipments across all three plants. Also, we did not convert any independent dealer consignment agreements to floorplan financing agreements during this quarter as we did most quarters last year. The manufactured housing industry has slowed. According to MHI's March 2023 data, March shipments were up over February, but still well below 2022 numbers. We believe that our business has fared better than most. We made a big push on sales this year and have a nice backlog at all plants. Several longtime customers have stepped up with large orders. We have a small manufacturing footprint and continue to run near capacity. We anticipate having orders to feed all three plants. We believe that there are several major tailwinds for our industry as housing affordability nears record lows. As we discussed on the prior call, we have been working hard on improvements at our Eatonton, Georgia, manufacturing plant. We rightsized the workforce, brought in a third party to retrain and monitor the team, and have significantly improved our product quality. Production during the first quarter of 2023 was still below historical levels in Georgia. We recently gained momentum on the manufacturing side and have secured several large orders for the plant. Our team continues to push production volume without sacrificing quality. Consumer and MHP loan interest income increased to $7.7 million or 13.9% during the three months ended March 31, 2023, as compared to the same period in 2022. This increase was driven by increased balances in the MHP and consumer loan portfolios. Other revenue primarily consists of dealer finance fees and commercial lease rents, which increased to $1.8 million or 33.3% during the three months ended March 31, 2023, as compared to the same period in 2022. Our financing business generates predictable recurring revenue. We now have over $350 million in principal outstanding across our loan portfolios. The portfolios are performing well and defaults remain near record lows. Selling general and administrative expenses decreased $2.3 million or 29.3% during the three months ended March 31, 2023, as compared to the same period in 2022. This decrease was primarily due to a decrease in salaries and incentive costs and a decrease in legal expense, partially offset by an increase in warranty costs. Net income increased 1.1% to $16.3 million in the first quarter of 2023 compared to the first quarter of 2022. Basic earnings per share grew $0.01 per share in the first quarter of 2023, an increase of 1% from the same period in 2022. Legacy delivered an 18.7% return on equity over the last 12 months. At the end of the first quarter of 2023, Legacy's book value per basic share outstanding was $16.32, an increase of 20.3% from the same period in 2022. We continue to hold pricing and reduce our raw material inventory. Our top focus remains on sales, we are also looking at ways to reduce SG&A and warranty costs. Legacy's balance sheet is healthy. We ended the quarter with $3.2 million in cash and $7.8 million drawn on our line of credit. We also own $8.5 million of treasuries, yielding approximately 4.7%. As the economy slows, investors should start to see the beauty of our integrated business model. Sales were down during the first quarter, margins and earnings improved. From a strategic standpoint, I recently discussed the opportunities we are seeing in our industry with our founders. They have been waiting years for this. Our foundation is stable. We are well-positioned for growth. Operator, this concludes our prepared remarks. Please begin the Q&A. Thank you. Ladies and gentlemen, if you have a question or a comment at this time, please press star one one on your telephone. If your question has been answered or you wish to remove yourself from the queue, please press star one one again. We'll pause for a moment while we compile our Q&A roster. Our first question comes from Alex Rygiel with B. Riley. Your line is open. Hey, Alex. Alex? Hey, Duncan. How are you? I'm good. How are you? Very good. A couple quick questions here. First, yeah, can you sort of touch upon kind of the macro environment here? Obviously, we got a significant rise in mortgage rates. We had slowing demand for new home construction. Now that's kinda leaked into your space as well. Maybe talk just a little bit about the macro dynamic here. You know, it kind of feels like single-family home builders have kind of stabilized to kind of a lower level now, but going into sort of maybe normal seasonality. Do you feel like that's the case as well in the mobile industry? Yeah, I think that's right, Alex. You know, we certainly have seen demand slow. That said, you know, we've got three plants. We feel very comfortable keeping them full. I think the most important thing that you pointed out is, you know, there are some real tailwinds for this business. You've got mortgage rates, right, that have doubled. You've got underwriting standards for mortgages that have really tightened. You've got home prices, you know, near all-time highs. At the end of the day, you've got, you know, over 50% in this, you know, of households in this country that make less than $75,000 a year. Those are our customers, you know, and we tend to serve the lower end of this market. I think that, you know, although there is slowing demand, you know, we should see an uptick as this affordability problem worsens in our country. That's helpful. Can you talk a bit about your land development activities? The company's had a number of properties sort of on its books, been making some investments in some water treatment facilities and whatnot through the years. Can you talk about that in conjunction with your comment earlier about pretty confident that you can keep your plants full? Yeah, sure. Well, you know, I personally believe that the largest, you know, headwind this industry faces is, where do you put these things? We've got seven properties that we own outright, you know, that we have been developing into communities over the last few years. Our primary business is building, selling, and financing mobile homes. At the same time, we have made significant progress. I'll tell you know, that based on discussions with other developers in our industry, you know, there is, there's a lot of value here. I think there are certain properties that make sense for us to push forward, to, you know, through full development. There's probably others that, you know, could make sense to partner on, where we're allowed to, you know, to contribute homes and potentially financing and have some type of recurring cash flow stream. Look, there's others that we, you know, we haven't made much progress on that are primarily entitled raw land, that we, you know, we bought right. As you can imagine, you know, land in Texas around major metropolitan areas has really increased in value. There may be a couple of those that make sense to, you know, either sell or partner with somebody in the near term on. Lastly, I think in the past you've mentioned some geographic opportunities ahead. Can you maybe talk about that as it relates to sort of the business plan over the next kind of one to three years? Yeah, sure. You know, I think we're lining up for a, you know, pretty interesting and exciting time for our business. You know, we've got a great balance sheet. We've got, you know, recurring earnings from the financing business. This is a regional business. You know, you typically don't ship these homes much outside of 200-300 miles from where your plants are. You know, COVID created some, you know, some opportunities where, I mean, we shipped homes a lot farther, and we continue to do that. There are certainly regions that we don't hit as economically as we'd like to. You know, look, there are... If you're a single plant manufacturer, with no backlog and no balance sheet, you know, I think there will really be some, you know, some opportunities for us to move into some new geographic areas. You know, we're gonna be conservative. We're not, you know, going out and participating in a bank process where we're really gonna overpay for something. We're definitely getting some looks on things, which, you know, which is exciting for all of us. That's great. Thank you very much. One moment for our next question. Thanks, Duncan Bates. Our next question comes from Mark Smith with Lake Street. Your line is open. Hi, guys. First question I've got, Duncan, is really just on kind of average selling price. You know, what kind of price movement did we see here in the quarter? Mark, our last price increase was in June 2022. We have not raised prices since then, but we've also haven't dropped prices. I'd say, you know, it's been, you know, in line with the past few quarters. Okay. You know, there are also. Just one more comment on that. I mean, you know, we primarily sell our park model homes are very, very basic homes. You know, typically single wides without a lot of bells and whistles. You know, those have, typically lower prices than, you know, some of the big more elaborate homes that we're selling to dealers. You know, there has been Recently, we've been building a lot of park model homes. I think when you see, you know, when you see the filing, you'll see that there could be, you know, some mix issues there, but overall, pretty much in line. Okay. Then as we think about the pressure on the industry, you know, any more detail you can give us? You know, is it really, you know, rates that are pressuring consumers? Is it just kind of general consumer, consumers being squeezed in today's environment? What is it that's really hurting them? If so, rates, you know, can you guys use your lending arm, you know, as a lever with lower rates to incent more sales? Yeah. You know, I'll take it in two pieces, Mark. You know, about half of our business is selling through dealers to retail customers. I think there's been, you know, a lot of talk in the industry about that channel being backed up, right? You've got these dealers, whether they're company-owned or they're independent dealers, you know, that have a decent amount of inventory sitting on their lots. I think, you know, overall, what we're seeing and we're hearing is that foot traffic, you know, has picked up, but conversions are still, you know, below where they should be. I really think it's just, you know, there's a lot going on in the economy and the consumers are being squeezed. This is an affordable product, though, and, you know, we haven't raised our rates on the financing side of things. I think there's just some hesitation to go out and make, you know, a large purchase right now by most consumers. You know, I think that could change, you know, as other, you know, housing options, whether it's, you know, rent increasing or home prices. We already discussed the issues there of traditional stick-built homes. We're hoping to see more of a pickup on the dealer side of the business and that conversion rate get higher. On the park side of the business, which we sell homes directly at wholesale prices to community owners and developers, that's the other, say, half of our business. You know, we typically serve a customer base that I would categorize as regional entrepreneurs. You know, these are guys that have been in the industry for a long time and, you know, have ridden the ups and downs. You know, a lot of them took chips off the table when you had big institutional-backed guys, you know, paying astronomical prices. You know, a lot of those guys are our customers, and a lot of them are, you know, are deploying capital now, which has, which has helped us out on orders. You know, I think on the, you know, if you're a large institutional-backed player, I mean, a lot of these guys went out and consolidated it, you know, at all-time high prices on the park side. If you're using variable rate debt and you can't raise the rents as much as you need to, you know, some of their expansion plans may have changed. That's hopefully that helps. Last question for me is just any additional breakdown you can give us on the inventory, just what kind of you're sitting on in finished goods versus kind of raw material and when your comfort level with the inventory today? Yeah. I don't have the number directly in front of me. I'll tell you, our raw material inventory is around $17 million. The rest of the inventory is, you know, at our company-owned dealerships. Or company-owned dealerships or sitting in the lots. You know, I think we've got more inventory that we would like across the board. That's really an area that we've been focused on and we're making some progress on, especially on the raw material side. We've got a ways to go there. You know, company-owned dealerships, I think are in, you know, similar boat as a lot of the other dealers, where the inventory is not turning as quick as you'd like, and you've got some excess there. Okay, great. Thank you, Duncan. Thanks. One moment for our next question. Our next question comes from Tim Moore with EF Hutton. Your line is open. Hey, Tim. Hi, everyone. This is Leanne Hayden. I'm sorry, this is Leanne Hayden filling in for Tim, who's immersed in our annual conference right now. Regardless, really appreciate your time. Hey, Tim, you there? It's a female line for Tim. She's very low. Could you speak up, ma'am, a little bit? Oh, I'm sorry. Yeah, sure. Can you guys hear me? Yeah, yeah. That's much better. Okay, sorry about that. This is Leanne Hayden from EF Hutton. I'm filling in for Tim Moore. He is immersed in our annual conference right now. Regardless, thanks for the time. My first question is just a follow-up on pricing. You know, your pricing is still below your competitors despite their cuts. Do you plan to offer more promotions and online specials in order to preserve your ASPs, or what do you plan for that? You know, we have been able to hold our pricing. We certainly have seen our competitors start to cut pricing. You know, I think pricing is important to discuss in the context of our integrated model. You know, what we've been able to do recently is offer financing specials. We've held pricing, but, you know, we're offering a few months with no payments or, you know, other incentives to sell homes and finance them at what we believe are, you know, good returns for our business without sacrificing the price increases that we've pushed through over the past couple years. You know, that'll continue to be our strategy. I mean, we hit on the call like sales, you know, sales were down this quarter. You know, at the same time, we have been able to secure a decent amount of large orders. I mean, we're gonna keep holding price as long as we can, and if we need to use our financing tools to do that, we will. Okay. Yeah, that makes sense. My second question is regarding your more nimble, manufacturing footprint with only three plants. You know, if there's a sudden downturn in order volumes, what can you do to keep utilization up at your plants? Can you just reduce shift hours or retaining talented workers? How would something like that play out? Yeah, I mean, I think, you know, the typical ways are, you know, you can, you can slow down production, you know, whether it's not, you know, working as many hours in a week or cutting production days. You know, we haven't missed a day of production yet this year, so and I feel pretty good about where the backlog is moving forward. You know, there are some tools, but hopefully, you know, we're not planning to use them at this time, and cut production days. We're trying to really make a push on the sales front and continue to grow the backlog. You know, I think we'll start to see demand, you know, picking up. Okay. All right. That's great. How should we think about gross margin? It could be down this year versus last year when factoring in less of a pricing boost, but raw materials, cost inflation, you know, lapping that compared to a year ago from the Georgia plant and efficiencies in the second half of this year. Would that be something that would help? Yeah, we're really, you know, I finally feel like we've got some momentum in Georgia. It's been a long road to get here, and the team, you know, has really stepped up and done a good job. We're still a little bit below where we'd like to be. I think, though, you know, if we could get back to, you know, if we could push through one additional house a day by the end of the quarter, you know, I think that's a realistic goal, but also one that really helps us out from, you know, a cost efficiency standpoint. Again, we're, you know, holding prices and material prices are coming down. I think as long as those two things continue to move, in the same, you know, direction and we're able to keep production up, margins still should continue to be strong. Okay. That's great. Thank you so much. My last question is about the conversion of some dealers to a floor plan financing program. That seemed to boost your December 2022 quarter revenues by, you know, maybe $17 million. Does that mean that this year's December quarter would face a headwind decline for product sales as you lack the year ago benefit? Or what do you expect for that? Sure. I'll give everyone just a quick reminder on the consignment to floor plan financing conversion. We have had a consignment program in place for years that I wouldn't say is necessarily market. We've moved over to a market floor plan financing program. As we converted these dealers over, we essentially recognized the conversion as sales since there's no take back on the inventory. This was a project that started well over a year ago. We're trying to push everybody to the new program. We still have some dealers that have not converted over. We had a big conversion during the first quarter of last year. You know, I would not expect. You know, we don't have the same volume that we had the fourth quarter of last year, but we will have conversions, you know, that happen this year. It's just a smaller number and not something that we made a push on during the first quarter. Okay. That's all for me. Thank you so much for those answers. Yeah, thanks so much. Good luck with the conference. Thank you. One moment for our next question. Our next question comes from DeForest Hickman, who's a private investor. Your line is open. Hey, thanks for taking the questions. I'll bounce around a little bit. You talked about, you know, rising rate environment, but then also some, you know, opportunities you're seeing and some specials on the financing. You know, generally speaking, on a forward basis, you know, relative to the first quarter, should we expect the interest income dollars to be kind of consistent, or should those be moving, directionally higher? Yeah, they'll be moving directionally higher. You know, the financing in this industry, we've seen a pullback in financing in this industry, which I think creates a nice opportunity for us to deploy capital into the loan portfolios. You know, we're not borrowing to lend and take a spread. We've got some, you know, flexibility as far as where we set our rates and how long those rates are fixed for. The promotions that, you know, we've been running, include, say, a couple, say, three to six months without payments. you know, while the interest revenue won't pick up immediately as we make new loans, you know, toward the end of the year, you should start to see the benefits of all that cash that we've deployed into the loan portfolios. Okay, thank you. That's helpful. Then you did some brief comments on the land portfolio and on the development side. You know, just a little bit more color there. Is there anything, you know, in process in the sense like you're talking about transacting some of the land, is that just hypothetical or you have had, you know, negotiations about actually doing something? Yeah. Look, we continue to work on all of these developments in, you know, in the background. I think if you look out over the past, you know, year with the history in our business, right, we had some major challenges that we had to work through that took up a significant amount of management's time. We're, you know, we're back getting refocused on, you know, really pushing these developments forward. You know, I think like, there's certainly people that are building parks in Texas, and they're looking for land that's entitled. You know, we have created significant value by pushing these forward that hasn't been realized yet. You know, our plan, we don't, we don't have like a, you know, a for sale sign on any of this stuff. I mean, we have been approached, and I think, you know, we're always open to opportunities and hearing offers, but ultimately haven't made a, you know, a decision to do anything yet. It's kind of, you know, we're back refocused on pushing the developments forward and creating value there. If someone, you know, is interested in a certain piece, you know, we'll certainly listen to them. Okay. I apologize if this was asked and answered, but on the backlog size, did we give any color or commentary there, either on the units or dollar amounts or directionally where that's been moving? Yeah, you know, we don't publish a backlog number. You know, one area of our balance sheet that, you know, you can look to is we've got a liability for customer deposits. You'll see that's down, you know, a little less than $2 million over quarter over or since last quarter. That said, you know, it's difficult to transition your sales team after going through 2 years of, you know, order taking to really selling. That's something that I will tell you has been really the top focus for our management team. It's amazing when you get people, you know, you get a little bit momentum and you have, you know, the management team involved, and we've got, you know, longtime customer relationships, we've really been able to secure some, you know, some nice orders. You know, we're planning to continue that. You know, we've got, we've got several months of homes to build. Just building on those customer relationships, I've asked about this in the past. Is there still ongoing discussions regarding any long-term supply agreements or do we already have some in place? No, none right now. You know, we've talked with some larger players about it. I mean, you know, if we get a large order, say you get somebody wants 200 homes, we'll sell them under our, you know, our standard agreement and just space them out with the amount of production that they can handle or deliveries they can handle on a monthly basis. We do have customers that are taking, you know, significant volume from really all three of the factories, but they're not under any type of long-term supply agreement right now. Okay, great. You know, this is kind of a shorter question, but maybe warrants a longer answer. Can you help just, you know, shareholders, you came public a few years back. We had some issues on the accounting side. We've remedied those, but during that period of time, you weren't able to really discuss what was happening with shareholders, while the financial results were quite good. You talked about, you know, the ups and downs of the industry. Can you just give us, you know, an update in terms of, you know, what's the long-term strategy for this business? You know, you got three plants and, you know, you have some founders, they've been at this for a long time. They own, you know, a fair amount of stock. You know, what's the long-term outlook for the business? Is there any desire to, you know, sell the entire company, which would, you know, probably entail a pretty nice return for everybody? Yeah. No, no plans to, you know, for any type of larger transaction at this time. You know, we have worked through some issues on the SEC reporting side. I think, you know, some of that was caused by, you know, issues with our team internally, but, you know, we also had a large issue with a new or prior auditor. But, you know, we worked through that, and we've now have a team in place that can deliver, you know, accurate numbers in a timely manner. That's no longer the concern that it was. I think at this point, you know, our founders, you know, would love to see this business continue to grow for years. I'm very fortunate to have them as coaches and mentors in this business because they've both been in it for, you know, for over 40 years and, you know, probably have combined more experience in this industry than any two people in the country. Our goal is to continue growing the business. You know, we're always bottom line focused, and we're focused on, you know, continuing to invest our profits at high rates of return, you know, to grow Legacy's book value. If you look at what we've done over the last 12 months, you know, we're making almost 20% year-over-year on that money, which is pretty remarkable. You know, this business was started with less than $10 million, they've grown that at 10%-20% a year for 18 years. Then you look down and you're a, you know, $550 million market cap company. We're gonna continue to operate this in a conservative manner, invest our cash. You know, we're now, we've got the foundation set where we're not afraid to be opportunistic as things arise. We believe that we are, you know, we're at a time, and we're seeing it, where opportunities are popping up, and we've got the team to actually execute. Long way of saying we're gonna keep growing the business and plan to stay a public company. Okay, that's great. Maybe just a little bit more clarity there. When you talk about opportunities, is it organic? Is there facilities that are, you know, actively producing units or, you know, maybe a building we're looking at that is unfinished that we would, you know, put some production assets in there? Like, you know, how do you frame opportunity? Because, and I'm trying to be very respectful. I think you guys have done a fantastic job historically, but, you know, it's hard to know exactly what's going on when we're only getting, you know, quarterly updates. You know, you had this strategy for a period of time on the land development side that, you know, has taken some time on the permitting side and, you know, maybe we're looking for some partners. That's changed to some extent. You know, just any color you could provide shareholders in terms of, you know, what that opportunity set is in terms of, you know, capital deployment. Thank you. Yeah, sure. I'd say first of all, you know, now that we are through some of these issues that take, you know, have taken up a lot of management time to get back on track. You know, we do plan to have more of an IR presence and update the market on our strategy. You know, there are. When I talk about opportunities, I think we first have to start with, you know, the opportunities in our own business. I mean, you know, our margins are great, but there are a lot of areas where we can improve those. You know, we can do a better job on the sales side. We can do a better job on managing our inventory. We can do a better job on managing our costs and SG&A. Those are all, you know, those are all things that we're aggressively focused on now. I think, you know, once we have all of those set and there are, you know, there's other products that we'd like to manufacture. There's other markets that we'd like to manufacture in. There's opportunities to realize value from these developments. Especially right now, there's opportunities to deploy capital on the financing side. We're looking at all of these through a, you know, a lens that focuses strictly on returns. There may be times when we feel like there's better returns generated by deploying all of our cash into land development. We think that there's times when the best return we can get is by deploying it in the financing businesses. You know, I think that there will be times when we feel like, hey, you know, there are single plant operating businesses in this country and attractive geographies where we can make a return that, you know, may compare to what we currently do on the manufacturing side. Then that also gives us, you know, additional units to finance. Okay, great. That's a very helpful answer. I look forward to the company being more active with investors because I think there's a very good story to tell. Thanks for taking all my questions. I appreciate it. Yeah, absolutely. Thanks for the questions. One moment for our next question. Our next question comes from Roman Nemtsov. He's also a private investor. Your line is open. Thank you. Duncan, great presentation. Quick question on the land development side. Is the idea if you do proceed with the plan for these various sites that you have that you guys own, is the idea then to build a business around it, raise capital to, from JV partners? How does this fit into the company's longer term strategy on, like is this gonna be a long-term hold? Are you gonna be spinning them off? Like, how do you think about that as you kind of near completion on some of the entitlements stuff on these parcels? Yeah, sure. Like I said, we continue to push forward with them. I can't tell you I have the answer for that yet. You know, I think the plan is to, you know, to monetize them, you know, as we see fit. I think ultimately what makes our business special is the, you know, the stable recurring revenue side of it. As I look forward to growing the business, I don't think anyone, you know, wants to own a cyclical manufacturing company. They wanna own something that generates predictable returns and has high margins. You know, as I think... We'll use that lens to look at the, you know, the entire business. We think about land development, and I think it's how do we, how do we either develop or partner on these, and create a business model that we can replicate and grow and generate, you know, recurring income from them? Yeah, I think that's the exactly the right way to look at it. I think I would encourage you to think through it from effectively like a JV fund management route, right? Where you bring capital in and like you said, collect, either collect fees or JV with somebody to do this, so the capital outlay is not all on the company side. Just a suggestion. Great presentation. Super excited about the business. Yeah. Thanks for the questions. I'm not showing any further questions at this time. I'd like to turn the call back over to Duncan for any closing remarks. Perfect. Thank you. two final comments. One, you know, thank you to our customers. I mentioned during the call in the press release that certain longtime customers have placed large orders. The orders keep our facilities full and keep our workers paid, and we truly appreciate your business. Secondly, I'd like to thank everyone who joined today's earnings call. We appreciate your interest in Legacy Housing. Feel free to reach out to us with any follow-up questions. My contact information is at the bottom of the press release. Operator, this concludes our call. Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day.