Legacy Housing Corporation (NASDAQ:LEGH) Q4 2022 Earnings Call Transcript

But I think, again, now that we’re through a lot of the financial reporting issues, I’m looking forward to in addition to growth, really focusing on how we can improve the business. And from a marketing standpoint, we think that there’s a pretty good opportunity there. It’s just having the bandwidth to actually work with our team and get it done.

Tim Moore: That’s helpful color. I appreciate that. I mean, another question I had was, I’m just wondering you’re doing a good job in getting the quality assurance back on track with the Georgia plant. Have you and the Board thought about maybe adding ahead of operations to maybe visit all three plants every couple of weeks to just ensure the efficiencies in quality control.

Duncan Bates: Not at this time. We do have – we have really good general managers at all of these plants. And as you know, me, Curt and Kenny are all heavily involved, and this thing moves pretty quickly. We’re not scheduling a lot of meetings. It’s a lot of direct phone calls, and we can make changes quickly. We do operate in a very highly regulated industry. And so there is a code that we strictly build to. And it’s just given some of the labor challenges and turnover, sometimes you have issues there and like we had in Georgia. But I feel good about where the team is now. We’ve had a lot of people step up. And I think if we if we can continue to grow and especially expand the manufacturing footprint, then maybe at that time, a hire like that or an internal person moving into that role makes sense. But I think for the three plants right now, we feel pretty good about the management team that we have in place.

Tim Moore: That makes sense. I remember an enjoyed meeting Marc at your Fort Worth plant in late August. I was very impressed by him. Just maybe switching gears, talking now that you’ve been there 9 months and up to speed on the accounting enhancements and the Georgia facility coming along with these quality insurance. Are you now getting any more time to look for acquisition targets?

Duncan Bates: We’re getting there. One of the founders, Kenny Shipley, always says that the best deals come to you. And I think what’s been interesting over the last – really over the last month, maybe month and half is as other manufacturers slow down and financing in certain areas of our business becomes less attainable. I mean we are really seeing a lot more opportunities than we have at years, in years. And the key is when we’re allocating capital, we’re very return focused. We’re focused on the bottom line and growing book value and continuing to reinvest our money at attractive rates of return. And if you look at the returns on the loan portfolio, they’re pretty significant And so as we look at opportunities, there’s a high bar there.

And so we’ve got to make sure that we’re meeting and exceeding those return thresholds to actually deploy capital outside of the loan portfolios. But a long way of saying, we’re seeing more opportunities. We’re spending more time on them. And we think that over the next 12 months is a pretty interesting time to put money to work because we are long-term focused.

Tim Moore: Great. And that’s really helpful color and clarification on the capital allocation strategy. That’s it for my questions. Thanks a lot.

Duncan Bates: Yes. Thanks, Tim.

Operator: Thank you. And our next question coming from the line for Your line is open.