Cavco Industries Reports Fiscal 2025 First Quarter Results
August 01 2024 - 5:56PM
Cavco Industries, Inc. (Nasdaq: CVCO) ("we," "our," the "Company"
or "Cavco") today announced financial results for the first fiscal
quarter ended June 29, 2024.
Quarterly Highlights
-
Net revenue was $478 million, up $2 million or 0.4% compared
to $476 million in the first quarter of the prior year,
primarily on home sales volume growth.
-
Sequentially, home sales volume is up 20% and capacity utilization
is up to approximately 65% from approximately 60%.
-
Factory-built housing Gross profit as a percentage of Net revenue
was 22.6%, compared to 24.8% in the prior year.
- Financial services
Gross loss as a percentage of Net revenue was (0.6)%, compared to
Gross profit of 24.0% in the prior year. The segment pretax net
loss of $5.2 million resulted in a reduction in Diluted net income
per share of approximately $0.49 on an after tax basis. The loss
was caused by unusually high insurance claims from multiple weather
events in Texas, as well as the wildfires in New Mexico.
-
Income before income taxes was $44 million, down
$17 million or 27.9% compared to $61 million in the prior
year period.
-
Net income per diluted share attributable to Cavco common
stockholders was $4.11 compared to $5.29 in the prior year
quarter.
-
Backlogs totaled $232 million at the end of the quarter, up
$41 million, or 21.4%, from $191 million three months
ago, with modules in the backlog growing 22%.
-
Stock repurchases were approximately $29 million in the
quarter.
Commenting on the quarter, President and Chief Executive Officer
Bill Boor said, "The momentum we experienced exiting the fourth
quarter carried through the first quarter. Orders continued to
increase, resulting in production increases and a growing
backlog."
He continued, "While our factory-built housing results showed
continuing improvement, our consolidated results were negatively
impacted by very high claims costs in our insurance operations.
Those claims were driven by unusually high storm activity in Texas
and the Ruidoso fires in New Mexico. While weather related events
are unpredictable, our insurance operation has performed well over
time, and we continue to actively manage our exposure. Overall,
teams across the Company are stepping up to continued market
improvement and the opportunity to help more families achieve
homeownership."
Financial Results
|
Three Months Ended |
|
|
|
|
($ in thousands, except
revenue per home sold) |
June 29,2024 |
|
July 1,2023 |
|
Change |
Net
revenue |
|
|
|
|
|
|
|
Factory-built housing |
$ |
458,048 |
|
$ |
457,109 |
|
$ |
939 |
|
|
0.2 |
% |
Financial services |
|
19,551 |
|
|
18,766 |
|
|
785 |
|
|
4.2 |
% |
|
$ |
477,599 |
|
$ |
475,875 |
|
$ |
1,724 |
|
|
0.4 |
% |
|
|
|
|
|
|
|
|
Factory-built modules
sold |
|
7,671 |
|
|
7,406 |
|
|
265 |
|
|
3.6 |
% |
|
|
|
|
|
|
|
|
Factory-built homes sold
(consisting of one or more modules) |
|
4,721 |
|
|
4,582 |
|
|
139 |
|
|
3.0 |
% |
|
|
|
|
|
|
|
|
Net factory-built housing
revenue per home sold |
$ |
97,024 |
|
$ |
99,762 |
|
$ |
(2,738 |
) |
|
(2.7 |
)% |
-
In the factory-built housing segment, the increase in Net revenue
for the three months was due to higher home sales volume, partially
offset by lower home selling prices.
-
Financial services segment Net revenue increased for the three
months from more insurance policies in force in the current period
compared to the prior year, partially offset by reduced revenue
from loan sales.
|
Three Months Ended |
|
|
|
|
($ in thousands) |
June 29,2024 |
|
July 1,2023 |
|
Change |
Gross
profit |
|
|
|
|
|
|
|
Factory-built housing |
$ |
103,510 |
|
|
$ |
113,368 |
|
|
$ |
(9,858 |
) |
|
(8.7 |
)% |
Financial services |
|
(108 |
) |
|
|
4,511 |
|
|
|
(4,619 |
) |
|
(102.4 |
)% |
|
$ |
103,402 |
|
|
$ |
117,879 |
|
|
$ |
(14,477 |
) |
|
(12.3 |
)% |
|
|
|
|
|
|
|
|
|
Gross profit as % of Net
revenue |
|
|
|
|
|
|
|
|
Consolidated |
|
21.7 |
% |
|
|
24.8 |
% |
|
|
N/A |
|
|
(3.1 |
)% |
Factory-built housing |
|
22.6 |
% |
|
|
24.8 |
% |
|
|
N/A |
|
|
(2.2 |
)% |
Financial services |
|
(0.6 |
)% |
|
|
24.0 |
% |
|
|
N/A |
|
|
(24.6 |
)% |
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
|
|
|
|
|
|
|
Factory-built housing |
$ |
59,720 |
|
|
$ |
56,021 |
|
|
$ |
3,699 |
|
|
6.6 |
% |
Financial services |
|
5,131 |
|
|
|
5,659 |
|
|
|
(528 |
) |
|
(9.3 |
)% |
|
$ |
64,851 |
|
|
$ |
61,680 |
|
|
$ |
3,171 |
|
|
5.1 |
% |
|
|
|
|
|
|
|
|
Income from
operations |
|
|
|
|
|
|
|
Factory-built housing |
$ |
43,790 |
|
|
$ |
57,347 |
|
|
$ |
(13,557 |
) |
|
(23.6 |
)% |
Financial services |
|
(5,239 |
) |
|
|
(1,148 |
) |
|
|
(4,091 |
) |
|
356.4 |
% |
|
$ |
38,551 |
|
|
$ |
56,199 |
|
|
$ |
(17,648 |
) |
|
(31.4 |
)% |
-
In the factory-built housing segment, Gross profit as a percent of
Net revenue for the three months was down primarily due to lower
average selling price, partially offset by lower input costs.
- In the financial
services segment, Gross profit and Income from operations for the
three months ended was negatively impacted by higher insurance
claims from weather related events.
- Selling, general
and administrative expenses increased for the three months as a
result of increases in compensation including acquired retail
locations, partially offset by reduced incentive compensation from
lower earnings.
|
Three Months Ended |
|
|
|
|
|
($ in thousands, except per
share amounts) |
June 29,2024 |
|
July 1,2023 |
|
Change |
Net income attributable to Cavco common
stockholders |
$ |
34,429 |
|
$ |
46,357 |
|
$ |
(11,928 |
) |
|
(25.7 |
)% |
Diluted net income per
share |
$ |
4.11 |
|
$ |
5.29 |
|
$ |
(1.18 |
) |
|
(22.3 |
)% |
Items ancillary to our core operations had the
following impact on the results of operations:
|
|
Three Months Ended |
($ in
millions) |
June 29,2024 |
|
July 1,2023 |
Net
revenue |
Unrealized gains recognized during the period on securities held in
the financial services segment |
$ |
0.9 |
|
|
$ |
0.3 |
|
Selling,
general and administrative expenses |
|
|
Legal and other expense related to the Securities and Exchange
Commission inquiry |
|
— |
|
|
|
(0.3 |
) |
Other
(expense) income, net |
Unrealized (losses) gains on corporate equity securities |
|
(0.1 |
) |
|
|
0.1 |
|
Conference Call Details
Cavco's management will hold a conference call to review these
results tomorrow, August 2, 2024, at 1:00 p.m. (Eastern Time).
Interested parties can access a live webcast of the conference call
on the Internet at https://investor.cavco.com or via telephone. To
participate by phone, please register at Here to receive the
dial in number and your PIN. An archive of the webcast and
presentation will be available for 60 days at
https://investor.cavco.com.
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.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements include all statements that are
not historical facts. These forward-looking statements reflect
Cavco's current expectations and projections with respect to our
expected future business and financial performance, including,
among other things: (i) expected financial performance and
operating results, such as revenue and gross margin percentage;
(ii) our liquidity and financial resources; (iii) our outlook with
respect to the Company and the manufactured housing business in
general; (iv) the expected effect of certain risks and
uncertainties on our business; and (iv) the strength of Cavco's
business model. These statements may be preceded by, followed by,
or include the words "aim," "anticipate," "believe," "estimate,"
"expect," "forecast," "future," "goal," "intend," "likely,"
"outlook," "plan," "potential," "project," "seek," "target," "can,"
"could," "may," "should," "would," "will," the negatives thereof
and other words and terms of similar meaning. A number of factors
could cause actual results or outcomes to differ materially from
those indicated by these forward-looking statements. These factors
include, among other factors, Cavco's ability to manage: (i)
customer demand and the availability of financing for our products;
(ii) labor shortages and the pricing, availability, or
transportation of raw materials; (iii) the impact of local or
national emergencies; (iv) excessive health and safety incidents or
warranty and construction claims; (v) increases in cancellations of
home sales; (vi) information technology failures or cyber
incidents; (vii) our ability to maintain the security of personally
identifiable information of our customers, (viii) comply with the
numerous laws and regulations applicable to our business, including
state, federal, and foreign laws relating manufactured housing,
privacy, the internet, and accounting matters; (ix) successfully
defend against litigation, government inquiries, and
investigations, and (x) other risks and uncertainties indicated
from time to time in documents filed or to be filed with the
Securities and Exchange Commission (the "SEC") by Cavco. The
forward-looking statements herein represent the judgment of Cavco
as of the date of this release and Cavco disclaims any intent or
obligation to publicly update or review any forward-looking
statement, whether as a result of new information, future
developments, or otherwise. This press release should be read in
conjunction with the information included in the Company's other
press releases, reports, and other filings with the SEC. Readers
are specifically referred to the Risk Factors described in Item 1A
of the Company's Annual Report on Form 10-K for the year ended
March 30, 2024 as may be updated from time to time in future
filings on Form 10-Q and other reports filed by the Company
pursuant to the Securities Exchange Act of 1934, which identify
important risks that could cause actual results to differ from
those contained in the forward-looking statements. Understanding
the information contained in these filings is important in order to
fully understand Cavco's reported financial results and our
business outlook for future periods.
|
|
|
|
CAVCO INDUSTRIES, INC.CONSOLIDATED BALANCE
SHEETS(Dollars in thousands, except per share
amounts) |
|
|
|
|
|
June 29,2024 |
|
March 30,2024 |
ASSETS |
(Unaudited) |
|
|
Current assets |
|
|
|
Cash and cash equivalents |
$ |
359,296 |
|
|
$ |
352,687 |
|
Restricted cash, current |
|
19,056 |
|
|
|
15,481 |
|
Accounts receivable, net |
|
85,051 |
|
|
|
77,123 |
|
Short-term investments |
|
20,671 |
|
|
|
18,270 |
|
Current portion of consumer loans receivable, net |
|
28,887 |
|
|
|
20,713 |
|
Current portion of commercial loans receivable, net |
|
40,363 |
|
|
|
40,787 |
|
Current portion of commercial loans receivable from affiliates,
net |
|
1,784 |
|
|
|
2,529 |
|
Inventories |
|
244,844 |
|
|
|
241,339 |
|
Prepaid expenses and other current assets |
|
77,622 |
|
|
|
82,870 |
|
Total current assets |
|
877,574 |
|
|
|
851,799 |
|
Restricted cash |
|
585 |
|
|
|
585 |
|
Investments |
|
14,916 |
|
|
|
17,316 |
|
Consumer loans receivable,
net |
|
22,151 |
|
|
|
23,354 |
|
Commercial loans receivable,
net |
|
50,918 |
|
|
|
45,660 |
|
Commercial loans receivable from
affiliates, net |
|
2,279 |
|
|
|
2,065 |
|
Property, plant and equipment,
net |
|
224,749 |
|
|
|
224,199 |
|
Goodwill |
|
121,969 |
|
|
|
121,934 |
|
Other intangibles, net |
|
27,829 |
|
|
|
28,221 |
|
Operating lease right-of-use
assets |
|
37,712 |
|
|
|
39,027 |
|
Total assets |
$ |
1,380,682 |
|
|
$ |
1,354,160 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
Current liabilities |
|
|
|
Accounts payable |
$ |
31,431 |
|
|
$ |
33,531 |
|
Accrued expenses and other current liabilities |
|
264,574 |
|
|
|
239,736 |
|
Total current liabilities |
|
296,005 |
|
|
|
273,267 |
|
Operating lease liabilities |
|
33,873 |
|
|
|
35,148 |
|
Other liabilities |
|
7,666 |
|
|
|
7,759 |
|
Deferred income taxes |
|
4,598 |
|
|
|
4,575 |
|
Stockholders' equity |
|
|
|
Preferred stock, $0.01 par value; 1,000,000 shares authorized; No
shares issued or outstanding |
|
— |
|
|
|
— |
|
Common stock, $0.01 par value; 40,000,000 shares authorized; Issued
9,401,057 and 9,389,953 shares, respectively; Outstanding 8,251,522
and 8,320,718, respectively |
|
94 |
|
|
|
94 |
|
Treasury stock, at cost; 1,149,535 and 1,069,235 shares,
respectively |
|
(303,897 |
) |
|
|
(274,693 |
) |
Additional paid-in capital |
|
281,062 |
|
|
|
281,216 |
|
Retained earnings |
|
1,061,556 |
|
|
|
1,027,127 |
|
Accumulated other comprehensive loss |
|
(275 |
) |
|
|
(333 |
) |
Total stockholders' equity |
|
1,038,540 |
|
|
|
1,033,411 |
|
Total liabilities and stockholders' equity |
$ |
1,380,682 |
|
|
$ |
1,354,160 |
|
|
|
CAVCO INDUSTRIES, INC.CONSOLIDATED
STATEMENTS OF INCOME(Dollars in thousands, except per
share amounts)(Unaudited) |
|
|
|
Three Months Ended |
|
June 29,2024 |
|
July 1,2023 |
Net revenue |
$ |
477,599 |
|
|
$ |
475,875 |
|
Cost of sales |
|
374,197 |
|
|
|
357,996 |
|
Gross profit |
|
103,402 |
|
|
|
117,879 |
|
Selling, general and
administrative expenses |
|
64,851 |
|
|
|
61,680 |
|
Income from operations |
|
38,551 |
|
|
|
56,199 |
|
Interest income |
|
5,511 |
|
|
|
4,618 |
|
Interest expense |
|
(90 |
) |
|
|
(266 |
) |
Other (expense) income, net |
|
(111 |
) |
|
|
126 |
|
Income before income taxes |
|
43,861 |
|
|
|
60,677 |
|
Income tax expense |
|
(9,432 |
) |
|
|
(14,266 |
) |
Net income |
|
34,429 |
|
|
|
46,411 |
|
Less: net income attributable to
redeemable noncontrolling interest |
|
— |
|
|
|
54 |
|
Net income attributable to Cavco
common stockholders |
$ |
34,429 |
|
|
$ |
46,357 |
|
|
|
|
|
Net income per share attributable
to Cavco common stockholders |
|
|
|
Basic |
$ |
4.15 |
|
|
$ |
5.35 |
|
Diluted |
$ |
4.11 |
|
|
$ |
5.29 |
|
Weighted average shares
outstanding |
|
|
|
Basic |
|
8,286,476 |
|
|
|
8,670,434 |
|
Diluted |
|
8,372,254 |
|
|
|
8,758,080 |
|
|
|
CAVCO INDUSTRIES, INC.OTHER OPERATING
DATA(Dollars in thousands)(Unaudited) |
|
|
|
Three Months Ended |
|
June 29,2024 |
|
July 1,2023 |
Capital expenditures |
$ |
4,914 |
|
|
$ |
4,183 |
|
Depreciation |
$ |
4,369 |
|
|
$ |
4,174 |
|
Amortization of other
intangibles |
$ |
392 |
|
|
$ |
392 |
|
For additional information, contact:
Mark FuslerCorporate Controller and Investor
Relationsinvestor_relations@cavco.com
Phone: 602-256-6263On the
Internet: www.cavcoindustries.com
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