Cavco Industries, Inc. (NASDAQ:CVCO) Q2 2024 Earnings Conference Call November 3, 2023 1:00 PM ET Company Participants Mark Fusler - Corporate Controller and IR Bill Boor - President and CEO Allison Aden - Executive Vice President and CFO Paul Bigbee - Chief Accounting Officer Conference Call Participants Daniel Moore - CJS Securities Greg Palm - Craig-Hallum Jay McCanless - Wedbush Michael Chapman - Aviance Capital Partners Operator Good day. And welcome to the Cavco Industries Second Quarter Fiscal Year 2 ...

Six Months Ended In Financial services, Gross profit and Gross profit percentage decreased primarily due to higher insurance claims from Arizona and Texas weather related events partially offset by greater realized and unrealized gains on marketable equity securities. | --- | --- | --- | --- | --- | --- | --- | --- | --- | |----------------------------------------------------------------------------------|-------|--------------------|-----------|--------|-------------------------|-------|----------|-------- ...

Financial Data and Key Metrics Changes - Revenue for Q1 2024 was flat at $476 million, with pretax profit slightly increasing from $59 million to $61 million [7] - Net revenue decreased by $12.4 million or 19.1% compared to the prior year's first fiscal quarter [13] - Consolidated gross profit as a percentage of net revenue was 24.8%, up 20 basis points from 24.6% in the same period last year [15] - Net income attributable to shareholders decreased by $13.2 million or 22.1% from $46.4 million to $59.6 million [25] - Cash balance increased by $80.8 million or 29.8% from $271.4 million at the end of the prior fiscal year [28] Business Line Data and Key Metrics Changes - In the factory-built housing segment, net revenue was $457.1 million, down 20.2% from $572.6 million in the prior year quarter [13] - Financial services segment net revenue increased by 19.2% to $18.8 million from $15.7 million, driven by more insurance policies and higher premium rates [15] - Factory-built gross margins remained healthy at 24.8%, supported by lower material costs [10][16] Market Data and Key Metrics Changes - Backlogs decreased from seven to eight weeks to five to six weeks, indicating production is outpacing wholesale orders [8] - Order rates were up year-over-year and significantly increased over Q4 [8] - Interest income for Q1 was $4.6 million, up 251% from the prior year quarter due to higher interest rates [24] Company Strategy and Development Direction - The company aims to responsibly deploy capital focusing on plant improvements, further acquisitions, and evaluating lending operations [20] - The acquisition of Solitaire Homes is progressing well, with a focus on developing new models and updating existing products [11] - The company is prepared to ramp up production as market demand improves, despite current reduced production schedules [29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in underlying demand based on traffic and buyer activity, despite concerns over interest rates and economic confidence [9] - The company believes it has seen the bottom of wholesale orders and anticipates returning to full production schedules as market support develops [9] - The housing affordability problem is worsening, but the underlying demand continues to increase [49] Other Important Information - Selling, general, and administrative expenses decreased to $61.7 million from $66.1 million due to lower third-party support costs [18] - The effective income tax rate was 23.5%, down from 24.7% in the prior year, reflecting the expiration of Energy Star credits [19] - A new $100 million stock repurchase program was approved, increasing total availability to $135.7 million [26] Q&A Session Summary Question: What are the expectations for orders and shipments in the near term? - Management expects orders to continue building, with backlogs stabilizing and potentially increasing, supporting production ramp-up [58][61] Question: How are margins impacted by increased claims in financial services? - Management noted that high claims were due to weather events, but they do not expect this to continue in the near term [35][36] Question: How does the company plan to manage capital allocation between stock repurchases and expanding operations? - The company plans to use stock buybacks as a balance sheet management tool while also considering expansion opportunities [46][52] Question: What is the current state of order rates across different markets? - Retail orders are increasing significantly, while community orders are lagging due to inventory issues, but improvements are expected by year-end [75][79]

FORM 10-Q Commission File Number 000-08822 | --- | --- | --- | |-------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------| | Title of each class | (Former name, former address and former fiscal year, if changed since last report) \nSecurities registered pursuant to Section \nTrading Symbol(s) | 12(b) of the Act: \nName of ...

Financial Data and Key Metrics Changes - Net income attributable to Cavco shareholders was $47.3 million, down from $53.6 million in the same quarter of the prior year, with diluted earnings per share at $5.39 compared to $5.80 [4] - Gross margins in financial services decreased to 45.7% in Q4 2023 from 58.5% in Q4 2022 due to weather events in Texas and Arizona [3] - Net revenue for the period was $476.4 million, down 5.8% or $29.1 million compared to $505.5 million in the prior year's fourth fiscal quarter [47] - Pre-tax profit decreased by 14.6% to $58.6 million from $68.6 million for the prior year period [64] Business Line Data and Key Metrics Changes - Within the factory-built housing segment, net revenue was $466.1 million, down 6.6% or $32.2 million from $488.3 million in the prior year quarter, primarily due to a decline in base business units [47] - Financial Services segment net revenue increased 18.4% to $20.3 million from $17.2 million, driven by more insurance policies in force and higher premium rates [91] Market Data and Key Metrics Changes - The company reported a 10% year-over-year decline in volumes and a 6% drop in revenue, indicating a challenging operating environment [42] - The retail inventory issue has largely been resolved, moving closer to a 1:1 ratio of homebuyer demand to manufacturer orders [44] Company Strategy and Development Direction - The company is focused on maintaining a variable cost structure to sustain profit and cash flow at lower volumes, which has been effective in the current environment [42] - The acquisition of Solitaire Homes is expected to enhance product offerings and support the company's strategic priorities [49][61] - The company is also investing in operational improvements and growth while managing its balance sheet through share buybacks [95] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about improving order rates, with net orders significantly higher compared to the last two quarters [58] - There is a positive sentiment among retailers, with healthy traffic and quotes indicating a potential increase in future orders [60] - The company anticipates that the fundamental need for homes will create positive pressure for future order improvement [60] Other Important Information - The company completed the acquisition of Solitaire Homes, which utilized approximately $106 million in net cash, leaving a strong cash balance of over $270 million [49] - Interest income for the fourth quarter was $3.9 million, up 212% from the prior year quarter, primarily due to higher interest rates on invested cash balances [48] Q&A Session Summary Question: What is the cadence of new order rates exiting Q4 and into Q1? - Management indicated that they do not expect further declines in order rates and may see a slight pickup in production [8] Question: Can you quantify the order rates and what has been seen in April and May? - Management noted that net orders on a same plant basis are up over March, indicating a significant pickup beyond seasonal trends [17] Question: What is the expected impact of the Solitaire acquisition on gross margins? - Management expects the impact of purchase accounting to continue for a couple of quarters, but long-term performance is anticipated to align with large manufacturing gross margin rates [72] Question: How does the company view the online sales channel in the future? - Management believes that a significant portion of home sales will begin with an online experience, indicating a central role in their strategy [76] Question: What is the current state of inventory levels among dealers? - Management acknowledged that while some dealers are still cautious about replacing homes, the overall inventory issue is largely resolved [110][117]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended April 1, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 000-08822 CAVCO INDUSTRIES INC. (Exact name of registrant as specified in its charter) Delaware 56-2405642 FORM 10-K (Mark One) (State or other jurisdiction of incor ...

Financial Data and Key Metrics Changes - Revenue increased by 16% year-over-year to $500.6 million, up from $431.7 million in the same quarter last year [26] - Pretax profit rose by 29% to $76.1 million compared to $58.9 million in the prior year [28] - Net income attributed to shareholders was $59.5 million, down from $79.6 million in the same period last year, with diluted earnings per share at $6.66 versus $8.57 [20] Business Line Data and Key Metrics Changes - Financial Services segment net revenue was $19.4 million, up 7.1% from $18.1 million, driven by a higher number of insurance policies [19] - In the factory-built housing segment, net revenue was $481.2 million, up 16.3% from $413.6 million, primarily due to a 15.9% increase in average revenue per home sold [26] Market Data and Key Metrics Changes - Backlog decreased by 34% sequentially to $427 million, equating to approximately 9 to 11 weeks at current production rates [13] - Cancellations were at about 60% of the previous quarter's rate, indicating a gradual improvement in order fulfillment [11] Company Strategy and Development Direction - The company successfully launched a new plant in Hamlet, North Carolina, which is fully staffed and operational [15] - A new consumer-facing digital home marketplace was launched, enhancing the homebuying experience and connecting consumers with retailers [23][24] - The acquisition of Solitaire Homes is expected to add significant value and enhance sales through its retail network [22] Management's Comments on Operating Environment and Future Outlook - Management noted that while the inventory issue is ongoing, there are early signs of a seasonal pickup in traffic and quotes, which are positive indicators for future orders [14] - The company remains optimistic about the long-term demand for manufactured housing due to the nationwide lack of affordable housing [38] Other Important Information - Gross margin as a percentage of revenue in Financial Services decreased to 46.6% from 61.2% due to weather-related impacts [27] - The company executed share repurchases totaling $34 million during the quarter [32] Q&A Session Summary Question: Trends in traffic inquiries and quotes across different markets - Management indicated that communities remain strong while street retail activity has decreased, but there are signs of optimism in January [46] Question: Production expectations given the decline in backlogs - Management expects to continue operating at reduced capacity until backlogs stabilize, with some plants adjusting to four-day work weeks [52] Question: Expectations for average selling prices as raw materials decrease - Management noted that pricing is more influenced by backlog levels and competitive dynamics rather than raw material costs alone [56] Question: Guidance on Solitaire Homes' annual revenues and shipments - Management indicated that the acquisition would increase manufacturing capacity by about 10% but cautioned that margins would be impacted in the next two quarters due to purchase accounting [72][74] Question: Insights from park operators regarding 2023 - Community operators, particularly large REITs, are maintaining growth plans and have significant capital invested, indicating steady demand [83]

| --- | --- | --- | --- | --- | --- | --- | --- | --- | |---------------------------------------------------|------------|-----------------------------------------------------------|----------|-------------------------------------------|-------|-------------------------------------|-------|---------------------------| | Activity in the liability for estimated | warranties | was as follows \nThree Months \nDecember 31, 2022 | (in \n | thousands): \nEnded \nJanuary 1, 2022 | | Nine Months \nDecember 31, 2022 ...

Cavco Industries, Inc. (NASDAQ:CVCO) Q2 2023 Results Conference Call November 4, 2022 1:00 PM ET Company Participants Mark Fusler - Corporate Controller, IR Bill Boor - President, CEO Allison Aden - EVP, CFO Paul Bigbee - CAO Conference Call Participants Daniel Moore - CJS Securities Greg Palm - Craig-Hallum Jay McCanless - Wedbush Operator Good day, and thank you for standing by. Welcome to the Second Quarter Fiscal Year 2023 Cavco Industries Earnings Call Webcast. [Operator Instructions] Please be advised ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended October 1, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 000-08822 CAVCO INDUSTRIES INC. (Exact name of registrant as specified in its charter) Delaware 56-2405642 (State or other jurisdic ...