Cavco Industries First Quarter Fiscal 2024 Earnings Release

Cavco Industries, Inc. (“we,” “our,” the “Company” or “Cavco”) announced financial results for the first fiscal quarter ended July 1, 2023.

First Quarter Summary

• Net revenue was $476 million, down 19% compared to $588 million in the first quarter of the prior year.
• Factory-built housing Gross profit as a percentage of Net revenue was 24.8%, compared to 24.4% in the prior year. The current year period was impacted by purchase accounting adjustments on acquired inventory related to Solitaire Homes, which reduced Factory-built housing margins by 40 basis points.
• Financial services Gross profit as a percentage of Net revenue was 24.0% compared to 32.6% in the prior year. The decrease was the result of higher insurance claims from weather related events.
• Income before income taxes was $61 million, down 23% compared to $79 million in the prior year period.
• Net income per diluted share attributable to Cavco common stockholders was $5.29 compared to $6.63 in the prior year quarter.
• Backlogs were $177 million at the end of the quarter, down $67 million from $244 million three months prior.

Commenting on the quarter, President and Chief Executive Officer Bill Boor said, “Demand during the quarter continued to show the effects of diminished affordability. Despite the challenging market environment, strong management across our businesses generated solid cash flow again this quarter. Our plants continue to demonstrate their ability to maintain margins by keeping costs as variable as possible, which is core to our operating philosophy. Our healthy financial position enables us to maintain our strategic focus throughout the cycle and we expect to emerge from this downturn stronger due to our focus on the undeniable need for affordable housing.”

He continued, “I’m also encouraged by the success of our digital marketplace, www.cavcohomes.com. We recently surpassed one million visitors in just six months since its launch, which is enabling us to funnel quality leads to our retailers. This shows that customers are out there shopping and the platform is another example of how we are executing our strategy of helping them buy homes.”

Financial Results

• In the factory-built housing segment, the decrease in Net revenue was due to 14.3% lower home sales volume and lower home selling prices, partially offset by the addition of Solitaire Homes.
• Financial services segment Net revenue increased from more insurance policies in force in the current period compared to the prior year.
• In the factory-built housing segment, Gross profit as a percent of Net revenue was up 20 basis points primarily related to lower input costs. The current year quarter also includes certain purchase accounting adjustments related to the acquisition of Solitaire Homes inventory, which negatively impacted margins by 40 basis points.
• In the financial services segment, Gross profit and Income from operations were negatively affected by higher insurance claims from weather related events.
• Selling, general and administrative expenses decreased primarily as a result of lower incentive compensation on reduced sales and lower legal and professional expenses.
• Income before income taxes in the financial services segment decreased $1.1 million from the same period last year. The net decline was directly caused by high claims volume in the insurance subsidiary generated by multiple weather events.

2023 Stock Repurchase Program

On August 1, 2023, the Company’s Board of Directors approved a new $100 million stock repurchase program that may be used to purchase its outstanding common stock. This increases the total available to $135.7 million including the amount remaining under the program announced in 2022.

The purchases may be made in the open market or one or more privately negotiated transactions in compliance with applicable securities laws and other legal requirements. While there is no expiration date, the actual timing, number and value of shares repurchased under the program will be determined by the Company in its discretion and will depend on a number of factors, including market conditions, applicable legal requirements and other strategic capital needs and opportunities. The plan does not obligate Cavco to acquire any particular amount of common stock and may be suspended or discontinued at any time. The Company expects to finance the program from existing cash resources.

To view the full fourth quarter results, click here.

About Cavco

Cavco Industries, Inc., headquartered in Phoenix, Arizona, designs and produces factory-built housing products primarily distributed through a network of independent and Company-owned retailers. We are one of the largest producers of manufactured and modular homes in the United States, based on reported wholesale shipments. Our products are marketed under a variety of brand names including Cavco, Fleetwood, Palm Harbor, Nationwide, Fairmont, Friendship, Chariot Eagle, Destiny, Commodore, Colony, Pennwest, R-Anell, Manorwood, MidCountry and Solitaire. We are also a leading producer of park model RVs, vacation cabins and factory-built commercial structures. Cavco’s finance subsidiary, CountryPlace Mortgage, is an approved Fannie Mae and Freddie Mac seller/servicer and a Ginnie Mae mortgage-backed securities issuer that offers conforming mortgages, non-conforming mortgages and home-only loans to purchasers of factory-built homes. Our insurance subsidiary, Standard Casualty, provides property and casualty insurance to owners of manufactured homes.

Contact:

Mark Fusler – Corporate Controller & Investor Relations – investor_relations@cavco.com – (602) 256-6263

Source: Cavco Industries, Inc.