Good day and thank you for standing by. Welcome to the Legacy Housing Corporation Q1 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you will need to press star one one on your telephone. You will then hear an automated message advising you your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Max Affrick, General Counsel. Please go ahead. Good morning. This is Duncan Bates, Legacy's President and CEO. Thank you for joining Legacy's First Quarter 2025 conference call. Max Africk, our General Counsel, will read the safe harbor disclosure before getting started. Max. Thanks, Duncan. Before we begin, I will 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 contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from management's current expectations, and any projections as to the company's future performance represent management's best estimates as of today's call. Legacy, moreover, assumes no obligation to update these projections in the future unless otherwise required by applicable law. Thanks, Max. Jeff Fiedelman, Legacy's Chief Financial Officer, will discuss our first quarter financial performance. Then I'll provide additional corporate updates and open the call for Q&A. Jeff. Thanks, Duncan. Product sales primarily consist of direct sales, commercial sales, inventory finance sales, and retail store sales. Product sales decreased $6.5 million or 21.2% during the three months ended March 31st, 2025, as compared to the same period in 2024. This decrease was driven by a decrease in unit volume shipped, primarily in mobile home park sales, retail sales, direct sales, and other product sales categories. For the three months ended March 31st, 2025, our net revenue per product sold increased by 23.1% as compared to the same period in 2024. The increase is primarily due to a decrease in units sold to mobile home parks, which were sold at wholesale prices, and an increase in units sold to consumers, which were sold at higher retail prices. Consumer MHP and dealer loans interest income did not change during the three months ended March 31st, 2025, as compared to the same period in 2024. Between March 31st, 2025, and March 31st, 2024, our consumer loan portfolio increased by $20.3 million, our MHP loan portfolio increased by $20.1 million, and our dealer finance notes decreased by $2.4 million. Other revenue primarily consists of contract deposit forfeitures, consignment fees, commercial lease rents, land sales, service fees, and other miscellaneous income, and decreased $1.0 million or 59.2% during the three months ended March 31st, 2025, as compared to the same period in 2024. This decrease was primarily due to a $1.1 million decrease in forfeited deposits, partially offset by a $0.2 million increase in portfolio fees and service revenue and land sales, and a net $0.1 million decrease in other miscellaneous revenue. Cost of product sales decreased $3.3 million or 16.0% during the three months ended March 31st, 2025, as compared to the same period in 2024. The decrease in costs is primarily related to the decrease in units sold. Gross profit margin was 29.2% of product sales during the three months ended March 31st, 2025, as compared to 33.6% during the three months ended March 31st, 2024. The cost of other sales was $0.5 million during the three months ended March 31, 2025. Selling, general and administrative expenses increased $0.4 million or 6.9% during the three months ended March 31st, 2025, as compared to the same period in 2024. We had a $0.6 million increase in legal expense, a $0.5 million increase in loan loss provision, and a $0.3 million increase in other miscellaneous expense, offset by a $0.4 million decrease in warranty expense, a $0.3 million decrease in payroll and related expense, and a $0.3 million decrease in professional fees. Other income decreased $0.6 million or 35.5% during the three months ended March 31st, 2025, as compared to the same period in 2024. We had a decrease of $0.8 million in non-operating interest income, primarily as a result of the settlement agreement that we reached with a significant borrower in the third quarter of 2024, offset by a decrease of $0.2 million in interest expense. Net income decreased 32.1% to $10.3 million in the first quarter of 2025 compared to the first quarter of 2024. Basic earnings per share decreased to $0.43 per share or 30.6% in the first quarter of 2025 compared to the first quarter of 2024. As of March 31st, 2025, we had approximately $3.4 million in cash compared to $1.1 million as of December 31st, 2024. We did not draw on the revolver in the first quarter. The outstanding balance of the revolver was zero as of both March 31st, 2025, and December 31st, 2024. At the end of the first quarter of 2025, Legacy's book value per basic share outstanding was $20.87, an increase of 13.1% from the same period in 2024. Thanks, Jeff. Obviously, first quarter shipments were lower than we would have liked. I want to discuss the steps we have taken to address product sales growth moving forward. After the last earnings call in March, I flew with our founders to the Biloxi Mobile Home Show. It was a good opportunity for the three of us to walk houses, speak with customers, and discuss financing solutions. We left the show aligned on several important changes to our products, park financing program, and team. First, our product line needs to be simplified. Over time, we added too many floor plans, color choices, options, etc. We analyzed the sales data, dramatically reduced the number of choices, and simplified pricing. This change will allow our team to focus on the core products and gain efficiency in the plants. Next, our park financing product has historically catered to the rental model. Our customers purchase homes and rent them to tenants. Some community owners, especially in the Texas markets, want the flexibility to sell homes. We introduced a modification to the MHP program that accommodates this, subject to certain conditions. I believe this change will broaden our customer base and our core markets moving forward. Finally, management needs to allocate more time to sales, marketing, and the land development projects. We hired industry veterans in key positions, including General Manager in Fort Worth, Director of Engineering for the company, a Purchasing Manager for the company, and a Texas-based Regional Manager for our company-owned retail locations. We operate this business closely but understand the importance of senior management across manufacturing and retail to allocate our time effectively. This was a necessary reset, and I'm encouraged by the feedback today. Currently, production in Texas is up, and we're working hard to ship houses and extend our backlog. Moving to the market, we are now in the spring selling season. Despite market uncertainty and tariff risks, our outlook for the remainder of 2025 is positive. Independent dealers across most of the footprint are healthy. We saw some slowdown in our South Texas dealers post-election during the first quarter, but sales are now recovering. At our company-owned stores, unit sales in April of 2025 were the highest in three years. May 2025 is tracking equally as strong. We view retail finance as a leading indicator on the dealer side. A couple of recent data points: retail loan originations in April 2025 were the highest in one month since going public. Originations year-to-date through April of 2025 are up 51% over last year. Community shipments were lower than expected during the first quarter due to broader market uncertainty and timing delays with specific projects. Last week, I spoke with several community owners at the MHI conference. Demand for rentals in most regions is solid, and M&A activity is improving. I was encouraged by HUD Secretary Scott Turner's speech and the new administration's views on regulatory reform. Less restrictive zoning, access to government financing solutions, and updates to the HUD code will have a long-term positive impact on our industry if executed. Delinquencies across the loan portfolios remain low, and recovery rates continue to be strong. There were no material land sales during the first quarter, but we will continue to monetize non-core land holdings throughout the year. Near Austin, we continue pushing forward in Bastrop County with our 1,100 pad development. I drove the property a few weeks ago. The roads and utilities are completed in phase one. We still anticipate selling lots in phase one this summer. Phase two, the rental community, is not far behind. We are building the roads and water treatment plant now. Lot rent in the area is over $1,000 a month, and we believe this property is extremely valuable. We just need to finish it. Share repurchases during the first quarter were limited by a narrow window and trading restrictions. Despite the soft quarter, we are long-term focused and have plenty of balance sheet to repurchase shares at current trading levels. We continue to believe in the long-term fundamentals, manufactured housing, and the value proposition that Legacy Housing provides its customers. Operator, this concludes our prepared remarks. Please begin the Q&A. Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. One moment while we compile our Q&A roster. Our first question is going to come from the line of Mark Smith with Lake Street. Your line is open. Please go ahead. Hi, guys. I wanted to ask a little bit about pricing at first. It sounds like the main reason for average price per home going up so much is just due to the mix. Can you talk about any pricing maybe that you took during the quarter? Yeah. The primary driver of the increase in average selling price was the mix. Obviously, soft quarter with shipments to mobile home parks, but we had a pretty strong quarter with retail sales and inventory finance sales, which shifted the mix way up, I think too far up. In general, we're obviously looking closely into all the tariffs around raw materials. We pushed through a price increase in February. We're planning to push through another price increase in mid-June. I think the good news is, with the announcement yesterday, the price increase is not nearly as severe as we were expecting. Okay. Just back on MHP sales here, how much of this is just less demand from parks versus maybe timing of orders? If you could quantify or speak to maybe orders, your backlog, that would be great. Sure. I think it's a combination of both. We did have some shipments both out of all three plants or all three regions. Over in Georgia, we had a pretty large order that got pushed into the second quarter. In Texas, we had the same thing. Up north with our partnership, they were waiting on some raw material in order to get houses shipped. Those are three meaningful orders that did slip. We have been pushing hard on park sales. I mentioned in my comments, in the Texas region, our financing product works really well for community owners that are renting the homes. They buy the homes, they take the depreciation, they rent the homes versus setting up homes and selling them in your park. I think as guys in our Texas territories have spent a lot of money buying parks, they're trying to unlock or get some of their return, some of their capital, by selling the houses. That's a modification that we've done, and we're just rolling out now. The feedback's been pretty good, but I think that allows us to pick up some of the guys that have shifted more toward tenant-owned homes versus the traditional rental model that we believe in. Okay. Lastly, Duncan, can you just remind us any kind of capital spending or needs or use of cash kind of this year that are outside of the norm? Nothing outside of the norm. We're really pushing hard to get Bastrop completed. We've got some additional capital going into that. We're looking at opportunities all the time, whether it's to add to the dealer base or to add to the loan portfolio or to even add manufacturing capacity. We're currently monetizing some non-core real estate. You'll see that flowing in. Outside of that, it's developments, retail, manufacturing capacity, and adding more notes to the portfolio. Excellent. Thank you. Thank you. Thank you. One moment for our next question. Our next question is going to come from the line of Daniel Moore with CJS Securities. Your line is open. Please go ahead. Hi. This is Will for Dan. Can you talk about your expectations for production rates across your three plants for Q2 relative to Q1? What can you tell us about your discussions with customers in both retail and community markets and the cadence of order rates in Q1 and thus far in Q2? Thank you. I will. Yeah. We came out of a seasonably slower period. I think we're pretty enthusiastic about the dealer side of the business, and especially our company-owned retail stores. You see that in the retail loan originations. Parkside has been slower. It's lumpier. If you get large orders that are held for permitting or because the pads are not finished or they cannot get them set quick enough, it could have a meaningful impact on your quarter. That is what we saw here. I mentioned in my comments that we've really simplified the product portfolio, and we're rolling that out to the customer base now. I think you can imagine all the downstream effects of having too many color options and too many floor plans and too many additions to the house. We have really streamlined that, which will help us get production up even higher in the Texas plants where we have orders. In Georgia, Georgia continues to sell, and they continue to build. We are really focused on rebuilding the dealer base there and adding new independent dealers. I think as the team continues to make progress there, we will be able to push production in Georgia higher than where we are now. Certainly, production in Texas for Q2 will be higher than Q1. Thank you. How should we think about gross margin and operating margins in Q2 in the back half of the year relative to Q1? I'd say this is probably the lower end of the range, right? We're underabsorbed on labor. We just pushed through a price increase in February. We've got another one coming in June. We're keeping an eye on material prices, but I think somewhere around 30% seems realistic. Thank you. Just one more. How much of a sticking point have tariffs and trade uncertainty been for your retail and community customers? Conversely, do you see the reduction in proposed tariffs as a meaningful potential catalyst for demand? Yeah. I think the tariffs in our business, compared to a lot of other industries, are not a—I mean, they're a real consideration, but they're not a huge consideration. We manufacture all of our products here, and the vast majority of the raw materials that go into one of our homes are domestically sourced. I think the tougher thing for the business environment, regardless of what industry you're in, is just the uncertainty because everyone's impacted. I mean, I think you're hesitant to go out and make a large investment or add people to the team just given all of the moving pieces over the past few months. I think if we continue to move to some normalcy, that'll be good for our industry as well as the country. Thank you. Thank you. If you would like to ask a question, please press star one one on your telephone. Our next question is going to come from the line of Stefano Latapy with Cannell Capital LLC. Your line is open. Please go ahead. Stefano, your line might be muted. Hold on just one moment, please. Stefano, if you can hear me, please dial back in and press star one one. Your line is open. You can go ahead and speak. Hi. I have a question. This morning, Craig- Hallum came with a note on Cavco and Skyline Champion where they said that the shipments were strong for the quarter, and they are expecting a bit of a raise on the companies. I'm just asking why they have good shipments versus you guys. I think it comes down to a couple of things. I mean, we just talked about we had some delayed shipments, and I think a combination of pricing and the complexity of our product has hurt us this quarter. We've also had a lot of new people on the sales team, but I feel good about finishing the year strong. I think that pricing across the market has been really competitive, and we've chosen to keep our pricing where it is, even at lower volumes. As things pick up here, I think our pricing's fallen in line with where we've historically played, and the backlog will continue to build. Okay. So it's what more you will consider this to be more something specifically to you guys, you to where you explain on the call rather than the industry being weak? That's correct. Yeah. I think the industry, we're halfway through May right now, so a lot of things have happened since the end of the quarter. I think overall, I'm very confident in the industry, and I think others are too. Affordability is a real challenge. If you look at the price points of our homes and the financing solutions that we offer, I think if the industry gets any type of regulatory relief from the new administration, it could have a really positive impact. We're expecting a positive year. Thank you. Thank you. Thank you. I would now like to hand the conference back to Duncan Bates for any further remarks. Thank you for joining today's earnings call. We appreciate your interest in Legacy Housing Corporation. This concludes our call. This concludes today's conference call. Thank you for participating, and you may now disconnect. Everyone, have a great day.