Legacy Housing Gears Up for IPO

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Legacy Housing has filed an S-1 form with the U.S. Securities and Exchange Commission (SEC) regarding its initial public offering (IPO). No pricing details were given in the filing, but the offering is valued up to $69.0 million. The company intends to list its shares on the New Nasdaq under the symbol LEGH.

The underwriters for the offering are B. Riley and Oak Ridge Financial.

This company sells and finances manufactured homes and “tiny houses” that are distributed through a network of independent retailers and company-owned stores and are sold directly to manufactured-home communities.

Legacy is the fourth largest producer of manufactured homes in the United States as ranked by number of homes manufactured, based on information available from the Manufactured Housing Institute and Institute for Building Technology and Safety for the second quarter of 2018.

With current operations focused primarily in the southern United States, it offers customers an array of quality homes ranging in size from about 390 to 2,667 square feet consisting of one to five bedrooms, with one to three and a half bathrooms. These homes range in price, at retail, from roughly $22,000 to $95,000. In 2017, the firm sold 3,274 home sections (which are entire modules or single floors).

During the first nine months of 2018, Legacy has sold 3,045 home sections. Legacy commenced operations in 2005 and has experienced strong sales growth and increased equity holders’ capital at a compound annual growth rate of approximately 25% between 2009 and 2017. The firm currently has the largest backlog of orders in the company’s 13-year history.

In the filing, the firm described its finances as follows:

Our total net revenue and net income for the nine months ended September 30, 2018 were $127.2 million and $18.7 million, which was a 47% and 12% increase, respectively, over our total net revenue and net income for the nine months ended September 30, 2017 of $86.8 million and $16.7 million respectively. Our total net revenue and net income for the year ended December 31, 2017 were approximately $128.7 million and $26.3 million, compared to total net revenue and net income for the year ended December 31, 2016 of $110.5 million and $17.3 million.

Legacy intends to use the net proceeds from the offering for working capital and general corporate purposes.