PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Cavco Industries reported decreased net revenue and net income for Q1 FY2024 due to lower home sales, while strengthening its balance sheet and improving operating cash flow Financial Performance Summary (in thousands) | Financial Metric | Three Months Ended July 1, 2023 | Three Months Ended July 2, 2022 | | :--- | :--- | :--- | | **Net Revenue** | $475,875 thousand | $588,338 thousand | | **Gross Profit** | $117,879 thousand | $144,724 thousand | | **Income from Operations** | $56,199 thousand | $78,588 thousand | | **Net Income** | $46,411 thousand | $59,694 thousand | | **Diluted EPS** | $5.29 | $6.63 | Balance Sheet Highlights (in thousands) | Balance Sheet Item | July 1, 2023 | April 1, 2023 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $352,234 thousand | $271,427 thousand | | **Total current assets** | $858,687 thousand | $804,579 thousand | | **Total assets** | $1,353,047 thousand | $1,307,975 thousand | | **Total current liabilities** | $293,376 thousand | $293,391 thousand | | **Total stockholders' equity** | $1,022,826 thousand | $976,286 thousand | Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended July 1, 2023 | Three Months Ended July 2, 2022 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $82,293 thousand | $58,240 thousand | | **Net cash provided (used) by investing activities** | $2,086 thousand | ($24,399) thousand | | **Net cash used in financing activities** | ($1,490) thousand | ($40,213) thousand | | **Net increase (decrease) in cash** | $82,889 thousand | ($6,372) thousand | [Notes to Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail segment performance, including housing revenue decline and financial services growth, alongside loan portfolio concentration and undrawn credit facility - The company operates in two segments: **factory-built housing** (wholesale and retail) and **financial services** (consumer finance and insurance)[130](index=130&type=chunk) Revenue by Segment (in thousands) | Revenue by Segment (in thousands) | Three Months Ended July 1, 2023 | Three Months Ended July 2, 2022 | | :--- | :--- | :--- | | **Factory-built housing** | $457,109 | $572,597 | | **Financial services** | $18,766 | $15,741 | | **Total Net Revenue** | **$475,875** | **$588,338** | - As of July 1, 2023, the consumer loans receivable portfolio had significant concentration in **Texas (39%)** and **Florida (15%)**[82](index=82&type=chunk) - The company maintains a **$50 million** revolving credit facility expiring in 2027, with **no borrowings outstanding** as of July 1, 2023[16](index=16&type=chunk)[169](index=169&type=chunk) - Fair value adjustments from the Solitaire Homes acquisition resulted in an additional **$1.0 million** in Goodwill during the quarter[13](index=13&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reported a revenue decline due to lower home sales volume, a reduced backlog, and improved gross margin from favorable material costs [Company and Industry Outlook](index=21&type=section&id=Company%20and%20Industry%20Outlook) The manufactured housing industry saw a significant decline in shipments, leading to a reduced company backlog, yet affordability remains a key advantage - Industry home shipments for the calendar year through May 2023 decreased by **29.0%** compared to the same period last year[189](index=189&type=chunk) - The company's backlog was **$177 million** at July 1, 2023, a significant decrease from **$244 million** at April 1, 2023, and **$1.0 billion** at July 2, 2022[69](index=69&type=chunk) [Results of Operations](index=22&type=section&id=Results%20of%20Operations) Net revenue decreased due to lower housing volumes and prices, while financial services grew, and gross profit margin improved from favorable material costs Revenue Analysis (Q1 FY2024 vs Q1 FY2023) (in thousands) | Revenue Analysis (Q1 FY2024 vs Q1 FY2023) | Q1 FY2024 | Q1 FY2023 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Factory-built housing revenue** | $457.1M | $572.6M | ($115.5M) | (20.2)% | | **Financial services revenue** | $18.8M | $15.7M | $3.0M | 19.2% | | **Total Net Revenue** | **$475.9M** | **$588.3M** | **($112.4M)** | **(19.1)%** | | **Factory-built homes sold** | 4,582 | 5,346 | (764) | (14.3)% | | **Net revenue per home sold** | $99,762 | $107,108 | ($7,346) | (6.9)% | - The gross profit percentage for **factory-built housing** increased to **24.8%** from **24.4%** in the prior year, primarily due to favorable material costs[72](index=72&type=chunk)[194](index=194&type=chunk) - Selling, general and administrative expenses decreased by **$4.5 million (6.7%)** YoY, mainly from lower legal expenses, professional fees, and incentive compensation, partially offset by the addition of Solitaire Homes[48](index=48&type=chunk)[73](index=73&type=chunk) [Liquidity and Capital Resources](index=24&type=section&id=Liquidity%20and%20Capital%20Resources) Cash and equivalents increased significantly due to improved operating cash flow from working capital management, with an undrawn revolving credit facility Cash Flow Summary (in thousands) | Cash Flow Summary (in thousands) | Three Months Ended July 1, 2023 | Three Months Ended July 2, 2022 | | :--- | :--- | :--- | | **Beginning Cash Balance** | $283,490 | $259,334 | | **Operating Activities** | $82,293 | $58,240 | | **Investing Activities** | $2,086 | ($24,399) | | **Financing Activities** | ($1,490) | ($40,213) | | **Ending Cash Balance** | **$366,379** | **$252,962** | - The increase in cash from operating activities was primarily due to reductions in accounts receivable, inventories, and prepaid expenses, which offset lower net income[104](index=104&type=chunk) - Management believes that cash on hand and cash flow from operations will be sufficient to fund operations, cover obligations, and provide for growth for at least the next 12 months[102](index=102&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=25&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes occurred in the quantitative and qualitative disclosures about market risk from the prior Annual Report on Form 10-K - There have been no material changes from the quantitative and qualitative disclosures about market risk previously disclosed in the Form 10-K[81](index=81&type=chunk) [Item 4. Controls and Procedures](index=26&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective, with no material changes to internal control over financial reporting during the quarter - The President and Chief Executive Officer and the Chief Financial Officer concluded that as of July 1, 2023, the company's disclosure controls and procedures were effective[109](index=109&type=chunk) - There were no material changes to the company's internal control over financial reporting during the fiscal quarter ended July 1, 2023[110](index=110&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=27&type=section&id=Item%201.%20Legal%20Proceedings) Management believes pending legal matters are unlikely to materially adversely affect the company's financial position, liquidity, or operations - Management does not believe that loss contingencies from pending legal matters are likely to have a material adverse effect on the company's consolidated financial position, liquidity, or results of operations[174](index=174&type=chunk) [Item 1A. Risk Factors](index=27&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K were identified - The company states that there are no material changes to the risk factors discussed in Part I, Item 1A of its Form 10-K[86](index=86&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Repurchases of Equity Securities](index=27&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities,%20Use%20of%20Proceeds%20and%20Issuer%20Repurchases%20of%20Equity%20Securities) No stock repurchases occurred during the quarter, but the Board approved a new $100 million repurchase program, increasing total available funds - No stock repurchases were made during the fiscal quarter ended July 1, 2023. **$35.7 million** remained available under the existing program[111](index=111&type=chunk) - On August 1, 2023, the Board of Directors approved an additional **$100 million** stock repurchase program, increasing the total available amount for repurchases to **$135.7 million**[87](index=87&type=chunk) [Item 6. Exhibits](index=28&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL documents - The report includes certifications from the Principal Executive Officer and Principal Financial Officer as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[89](index=89&type=chunk)

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 ...

Financial Data and Key Metrics Changes - Net income increased by 121% year-over-year and 12% compared to the fourth quarter [7] - Net revenue for the period was $588.3 million, up 78.1% from $330.4 million in the previous year [19] - Consolidated gross profit as a percentage of net revenue was 24.6%, up from 22.4% in the same period last year [23] Business Line Data and Key Metrics Changes - Factory built housing segment net revenue increased by 83.4% to $572.6 million, driven by the addition of Commodore operations and a 26.9% increase in average revenue per home sold [20] - Financial services segment net revenue decreased by 13.2% to $15.7 million due to unrealized losses on marketable equity securities and decreased loan sales volume [22] Market Data and Key Metrics Changes - Backlog ended the quarter at 25 to 27 weeks compared to four weeks last quarter, with a drop of approximately 10% from $1.1 billion to $1 billion [13][14] - Retail traffic remains strong, but buyers have become more patient, resulting in lower deposit ratios [15] Company Strategy and Development Direction - The company is well-positioned for demand drivers despite high prices and increasing rates, focusing on manufactured housing as an affordable solution [9][11] - New manufacturing facilities in Glendale, Arizona, and Hamlet, North Carolina, are nearing completion, expected to begin operations in the coming months [17][18] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the economic uncertainty and inflation affecting prospective buyers but emphasizes the ongoing need for affordable housing [9][79] - The company anticipates a near-term reset of retail inventories, with orders potentially dropping below true buyer demand for a short timeframe [15] Other Important Information - The company executed nearly $39 million of stock repurchases, completing the previously authorized $100 million program [29] - An additional $100 million for future share repurchases was authorized by the Board [30] - The company reached an agreement in principle with the SEC to settle litigation, pending final approval [35] Q&A Session Summary Question: Growth rate in shipments and organic growth - Management confirmed organic growth in the number of homes sold is in the mid to high teens, excluding Commodore [38] Question: Moderation of order rates - Management indicated that orders are off the highs but are comparable to pre-pandemic levels with appropriate seasonality [40] Question: Impact of lower financial services profitability and Commodore pricing - Management noted that the lower financial services profitability and Commodore pricing are expected to impact margins, with a drag of about 200 basis points from Commodore [48] Question: Sustainability of production levels - Management expressed confidence in sustaining production levels above 5,000 units, citing improvements in staffing and supply chain conditions [74]

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 July 2, 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 jurisdictio ...

PART I [Business](index=4&type=section&id=Item%201.%20Business) Cavco Industries is a leading U.S. producer of factory-built homes, including manufactured and modular homes, with financial services - Cavco is one of the largest producers of manufactured homes in the United States, operating **26 homebuilding production lines** and distributing through **45 Company-owned retail stores**[9](index=9&type=chunk) - On September 24, 2021, Cavco acquired The Commodore Corporation, expanding its presence in the Northeast, Midwest, and Mid-Atlantic markets and adding six manufacturing facilities[10](index=10&type=chunk) - The business is divided into two segments: Factory-built Housing and Financial Services. The financial services arm includes CountryPlace for mortgages and Standard Casualty for property and casualty insurance[9](index=9&type=chunk)[11](index=11&type=chunk)[12](index=12&type=chunk) Factory-Built Homes Sold (Fiscal Years) | Fiscal Year | Homes Sold | | :--- | :--- | | 2022 | 16,697 | | 2021 | 14,214 | | 2020 | 15,100 | - The company's home order backlog increased significantly to approximately **$1.1 billion as of April 2, 2022**, up from **$603 million a year prior**. The acquisition of Commodore contributed **$264 million to this increase**[32](index=32&type=chunk) - The company faces competition from other national manufacturers, including Clayton Homes, Inc. and Skyline Champion Corporation, which may have greater financial resources[59](index=59&type=chunk) [Risk Factors](index=17&type=page&id=Item%201A.%20Risk%20Factors) The company faces significant operational, economic, and regulatory risks, including supply chain disruptions, interest rate fluctuations, and ongoing SEC litigation - Business and operational risks include impacts from the COVID-19 pandemic, labor shortages, raw material price fluctuations, and potential cyber incidents[99](index=99&type=chunk)[103](index=103&type=chunk)[118](index=118&type=chunk) - Industry and economic risks are significant, including tightened credit standards for home-only loans, rising interest rates, limited wholesale financing for distributors, and the cyclical nature of housing demand[137](index=137&type=chunk)[142](index=142&type=chunk)[144](index=144&type=chunk) - The company faces legal and regulatory risks, including extensive government regulation, restrictive local zoning, and ongoing SEC litigation filed in September 2021 related to actions by the former CEO and CFO[151](index=151&type=chunk)[152](index=152&type=chunk) - Contingent repurchase obligations for wholesale financing provided to distributors amounted to a maximum of approximately **$141.0 million as of April 2, 2022**[127](index=127&type=chunk) [Unresolved Staff Comments](index=26&type=page&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[159](index=159&type=chunk) [Properties](index=27&type=section&id=Item%202.%20Properties) The company operates 26 active manufacturing facilities across the U.S., mostly owned, along with administrative offices and retail stores Overview of Core Properties | Property Type | Count | Ownership Status | | :--- | :--- | :--- | | Active Manufacturing Facilities | 26 | Mostly Owned | | Component and Supply Facilities | 2 | 1 Owned, 1 Leased | | Inactive Manufacturing Facilities | 3 | All Owned | | Administrative & Other Locations | 5 | Mostly Leased | - The company owns the land for most of its manufacturing facilities, with exceptions for the Goodyear, AZ and Dorchester, WI plants, which are leased[163](index=163&type=chunk) [Legal Proceedings](index=28&type=section&id=Item%203.%20Legal%20Proceedings) Legal proceedings information, including ongoing SEC litigation against the company and former executives, is referenced from Note 16 - Information on legal proceedings is incorporated by reference from Note 16 to the Consolidated Financial Statements[164](index=164&type=chunk) [Mine Safety Disclosures](index=28&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Not applicable[165](index=165&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=29&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Cavco's common stock trades on Nasdaq, with no recent dividends, and the company actively engages in stock repurchase programs - The company's common stock is traded on the Nasdaq Global Select Market under the symbol CVCO[168](index=168&type=chunk) - No dividends have been paid on common stock in the past two fiscal years[169](index=169&type=chunk) Share Repurchase Activity (Q4 FY2022) | Period | Total Shares Purchased | Average Price Paid Per Share | Value of Shares Remaining Under Program (End of Period) | | :--- | :--- | :--- | :--- | | Mar 6, 2022 to Apr 2, 2022 | 115,200 | $264.52 | $38,960,000 | - A new **$100 million stock repurchase program** was approved by the Board of Directors on May 25, 2022[170](index=170&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Strong housing demand drove significant revenue and net income growth in FY2022, supported by strategic acquisitions and improved operational efficiency [Company Outlook](index=31&type=section&id=Company%20Outlook) The company anticipates continued strong housing demand, focusing on expanding lending programs and advocating for favorable financing policies despite supply chain challenges - Housing demand remains strong, with the home order backlog increasing to **$1.1 billion as of April 2, 2022**, up from **$603 million a year earlier**[180](index=180&type=chunk) - The company has reduced open production positions by nearly **25% over the past year**, achieving an average plant capacity utilization rate exceeding **80% in Q4 FY2022**[181](index=181&type=chunk) - Management is focused on expanding home-only lending programs and working with industry associations to encourage favorable legislative and GSE action to address financing needs for affordable homes[186](index=186&type=chunk)[187](index=187&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) FY2022 saw substantial increases in net revenue, gross profit, and net income, driven by higher housing sales and a significant energy-efficient home tax credit Net Revenue (FY2022 vs. FY2021) | Segment | FY2022 (in thousands) | FY2021 (in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Factory-built housing | $1,556,283 | $1,037,889 | 49.9% | | Financial services | $70,875 | $70,162 | 1.0% | | **Total** | **$1,627,158** | **$1,108,051** | **46.8%** | Gross Profit & Margin (FY2022 vs. FY2021) | Segment | FY2022 Gross Profit (in thousands) | FY2022 Margin | FY2021 Gross Profit (in thousands) | FY2021 Margin | | :--- | :--- | :--- | :--- | :--- | | Factory-built housing | $372,250 | 23.9% | $199,604 | 19.2% | | Financial services | $36,499 | 51.5% | $39,373 | 56.1% | | **Consolidated** | **$408,749** | **25.1%** | **$238,977** | **21.6%** | - Selling, general and administrative (SG&A) expenses increased by **37.4% to $206.3 million**, but improved as a percentage of net revenue to **12.7% from 13.6% in the prior year**[197](index=197&type=chunk)[198](index=198&type=chunk) - Income tax expense was **$14.2 million**, resulting in a low effective tax rate of **6.7% for FY2022**, primarily due to **$35.7 million in non-recurring net tax credits** related to the sale of energy-efficient homes[204](index=204&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) Operating cash flow increased in FY2022, but overall cash decreased due to significant investing activities for acquisitions and stock repurchases Summary of Cash Flows (Fiscal Years Ended) | (in thousands) | April 2, 2022 | April 3, 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $144,224 | $114,031 | | Net cash used in investing activities | ($159,102) | ($23,349) | | Net cash used in financing activities | ($65,095) | ($6,982) | | **Net (decrease) increase in cash** | **($79,973)** | **$83,700** | - The increase in cash used for investing activities was primarily due to the purchases of Commodore and Craftsman[211](index=211&type=chunk) - The increase in cash used for financing activities was mainly related to common stock repurchases and payments of secured term loans[212](index=212&type=chunk) [Critical Accounting Estimates](index=38&type=section&id=Critical%20Accounting%20Estimates) Critical accounting estimates involve significant judgment for warranty reserves, deferred tax asset valuation allowances, and goodwill impairment assessments - Key estimates include warranty reserves, which are sensitive to the average costs incurred to service a home[219](index=219&type=chunk) - The determination of valuation allowances for deferred tax assets requires significant judgment based on forecasts of future taxable profits[220](index=220&type=chunk) - Goodwill and intangible asset valuation involves significant estimates regarding future cash flows, growth rates, and discount rates. The fair value of reporting units would need to decrease by over **450% to indicate impairment**[221](index=221&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=39&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is interest rate sensitivity, impacting housing demand, loan portfolio fair values, and Interest Rate Lock Commitments - The company's primary market risk is interest rate sensitivity, which can adversely affect housing demand and financing availability[226](index=226&type=chunk) Impact of 1% Unfavorable Interest Rate Change on Fair Value | Instrument | Reduction in Fair Value (in thousands) | | :--- | :--- | | Consumer loans receivable | $2,592 | | Commercial loans receivable | $421 | | Securitized financings | $883 | - The company had outstanding Interest Rate Lock Commitments (IRLCs) with a notional amount of **$51.7 million as of April 2, 2022**, which are subject to interest rate and fallout risk[228](index=228&type=chunk) [Financial Statements and Supplementary Data](index=39&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section incorporates the Consolidated Financial Statements, auditor's reports, and notes by reference from page F-1 - This item refers to the Consolidated Financial Statements and related notes commencing on page F-1 of the report[229](index=229&type=chunk) [Controls and Procedures](index=40&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management and the independent auditor concluded that disclosure controls and internal control over financial reporting were effective as of April 2, 2022, excluding recently acquired businesses representing approximately 17% of total assets - Management concluded that the company's disclosure controls and procedures were effective as of April 2, 2022[232](index=232&type=chunk) - Management concluded that internal control over financial reporting was effective as of April 2, 2022. This assessment excluded the internal controls of the recently acquired Craftsman and Commodore entities[235](index=235&type=chunk)[236](index=236&type=chunk) - The independent registered public accounting firm, RSM US LLP, provided an unqualified audit opinion on the effectiveness of the company's internal control over financial reporting as of April 2, 2022[237](index=237&type=chunk)[242](index=242&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=44&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2022 Proxy Statement - Required information is incorporated by reference from the 2022 Proxy Statement[252](index=252&type=chunk) [Executive Compensation](index=44&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation information is incorporated by reference from the 2022 Proxy Statement - Required information is incorporated by reference from the 2022 Proxy Statement[254](index=254&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=44&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership details and equity compensation plan information are incorporated by reference from the 2022 Proxy Statement Equity Compensation Plan Information (as of April 2, 2022) | Plan Category | Securities to be Issued Upon Exercise | Weighted-Average Exercise Price | Securities Remaining for Future Issuance | | :--- | :--- | :--- | :--- | | Approved by stockholders | 230,614 | $131.53 | 283,208 | | Not approved by stockholders | — | — | — | | **Total** | **230,614** | **$131.53** | **283,208** | [Certain Relationships and Related Transactions, and Director Independence](index=45&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on related party transactions and director independence is incorporated by reference from the 2022 Proxy Statement - Required information is incorporated by reference from the 2022 Proxy Statement[258](index=258&type=chunk) [Principal Accounting Fees and Services](index=45&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Principal accounting fees and services information is incorporated by reference from the 2022 Proxy Statement - Required information is incorporated by reference from the 2022 Proxy Statement[259](index=259&type=chunk) PART IV [Exhibits, Financial Statement Schedules](index=46&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists financial statements and exhibits, noting the omission of schedules as information is provided elsewhere - Financial Statements are listed in the Index on page F-1. All schedules have been omitted[262](index=262&type=chunk) [Form 10-K Summary](index=47&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company indicates no Form 10-K summary is provided - None[270](index=270&type=chunk) [Financial Statements and Notes](index=49&type=section&id=Financial%20Statements%20and%20Notes) [Report of Independent Registered Public Accounting Firm](index=50&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) The independent auditor issued an unqualified opinion on the financial statements, identifying the valuation of acquired intangibles as a critical audit matter - The auditor issued an unqualified opinion on the financial statements[278](index=278&type=chunk) - A critical audit matter was identified concerning the valuation of acquired intangible assets from The Commodore Corporation acquisition, which required significant auditor judgment to evaluate management's estimates of future cash flows, royalty rates, and discount rates[284](index=284&type=chunk)[285](index=285&type=chunk) [Consolidated Financial Statements](index=52&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements present Cavco's financial position, showing increased assets, equity, revenue, and net income for FY2022 Key Balance Sheet Data (as of April 2) | (in thousands) | 2022 | 2021 | | :--- | :--- | :--- | | Total Current Assets | $744,117 | $651,799 | | Total Assets | $1,154,972 | $951,833 | | Total Current Liabilities | $294,170 | $237,104 | | Total Stockholders' Equity | $830,455 | $683,640 | Key Income Statement Data (Year Ended) | (in thousands, except EPS) | April 2, 2022 | April 3, 2021 | | :--- | :--- | :--- | | Net Revenue | $1,627,158 | $1,108,051 | | Gross Profit | $408,749 | $238,977 | | Income from Operations | $202,496 | $88,825 | | Net Income Attributable to Stockholders | $197,699 | $76,646 | | Diluted EPS | $21.34 | $8.25 | [Notes to Consolidated Financial Statements](index=56&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed disclosures on accounting policies, significant estimates, acquisitions, segment information, and financial instruments - Revenue from wholesale factory-built housing is recognized upon shipment, while retail sales are recognized upon delivery, setup, and customer acceptance[305](index=305&type=chunk)[307](index=307&type=chunk) - Goodwill is tested annually for impairment, and as of April 2, 2022, all goodwill is attributed to the factory-built housing segment. No impairment was recognized in fiscal years 2020, 2021, or 2022[329](index=329&type=chunk)[330](index=330&type=chunk) - The company is contingently liable under repurchase agreements with financial institutions, with a maximum liability of approximately **$141.0 million as of April 2, 2022**[334](index=334&type=chunk)[425](index=425&type=chunk) - The effective income tax rate for FY2022 was significantly lowered by tax credits, predominantly a **$37.5 million benefit** related to the sale of energy-efficient homes under IRC §45L[417](index=417&type=chunk)[419](index=419&type=chunk) - The company acquired a controlling **70% interest in Craftsman** on July 4, 2021, and purchased The Commodore Corporation on September 24, 2021, for total consideration of **$146.2 million**[463](index=463&type=chunk)[468](index=468&type=chunk)