Financial Data and Key Metrics Changes - Net sales increased by 15.3% year-over-year to $645 million, with homes sold increasing by 13% to a total of 6,646 homes [14][27] - Consolidated gross profit rose by 28% to $181 million, with gross margin expanding by 280 basis points to 25.3% [31] - Net income attributable to Champion Homes increased by 31% to $62 million, translating to earnings of $1.06 per diluted share [34] Business Line Data and Key Metrics Changes - Sales to independent retailers grew, supported by direct-to-consumer and digital capabilities [16] - The Regional Homes business showed organic growth, contributing positively to overall sales [17] - In the builder developer channel, homes sold increased year-over-year, with a growing project pipeline [18] Market Data and Key Metrics Changes - U.S. factory-built housing revenue increased by 17%, with the average selling price per home rising by 2.8% to $94,900 [27] - Canadian revenue declined by 16%, with the average home selling price decreasing by 0.6% to $122,900 due to a shift in product mix [29][30] Company Strategy and Development Direction - The company is focused on expanding retail and direct-to-consumer capabilities, along with strategic investments to support community and independent retail customers [11] - Champion Homes aims to leverage its strengths and drive additional value through customer-centric innovation and omnichannel retail [11][39] - The company is committed to sustainable profitable growth and long-term value creation [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for the fourth quarter, anticipating low double-digit revenue growth compared to the same quarter last year [22][46] - The company is closely monitoring the dynamic tariff environment and is prepared to scale production based on order demand [23][70] - Management highlighted the importance of affordable housing and expects strong medium-term and long-term demand in the U.S. and Canadian markets [24] Other Important Information - The company has a strong cash position with $582 million in cash and cash equivalents and plans to continue share repurchases [36] - Management expressed concerns for those affected by the California fires but reported no direct damage to facilities [21] Q&A Session Summary Question: Can you provide more color on order trends and customer outlook for 2025? - Management noted that orders slowed towards the end of Q3 due to seasonality but remains optimistic for Q4 with healthy traffic and quoting activity [46][47] Question: What are the strategic focuses moving forward? - Management emphasized focusing on fundamentals, product innovation, and enhancing customer experience while being smart with capital deployment [50][51] Question: How is the company managing backlogs and order rates? - Management indicated confidence in order rates and plans to align production with demand while monitoring the broader housing market [57][58] Question: What is the impact of tariffs on operations? - Management is closely monitoring the situation and has a playbook to balance costs, prices, and volume in response to potential tariff impacts [69][70] Question: What percentage of U.S. sales are through captive retail? - Currently, 35% of U.S. sales are through captive retail, with a balanced approach to growth across all channels [82] Question: How is the company planning to participate in rebuilding efforts in California? - Management is eager to assist in rebuilding efforts and is proactively engaging with local teams to prepare for future home deliveries [94]

Core Viewpoint - Champion Homes reported quarterly earnings of $1.04 per share, exceeding the Zacks Consensus Estimate of $0.79 per share, and showing an increase from $0.82 per share a year ago, representing an earnings surprise of 31.65% [1][2] Financial Performance - The company achieved revenues of $644.93 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 8.88%, compared to $559.46 million in the same quarter last year [2] - Over the last four quarters, Champion Homes has exceeded consensus EPS estimates three times and topped revenue estimates three times as well [2] Stock Performance - Since the beginning of the year, Champion Homes shares have increased by approximately 4.1%, outperforming the S&P 500's gain of 1.9% [3] - The current consensus EPS estimate for the upcoming quarter is $0.81 on revenues of $604.9 million, and for the current fiscal year, it is $3.32 on revenues of $2.44 billion [7] Industry Outlook - The Building Products - Mobile Homes and RV Builders industry is currently ranked in the bottom 34% of over 250 Zacks industries, indicating potential challenges for stocks in this sector [8] - The performance of Champion Homes may be influenced by the overall outlook for the industry, as research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]

Financial Performance - Net sales for Q3 fiscal 2025 increased by 15.3% to $644.9 million compared to the prior-year period[4] - Net income increased by 31.0% to $61.5 million[8] - Adjusted EBITDA increased by 25.7% to $83.3 million, with an adjusted EBITDA margin of 12.9%[8] - Operating income for the three months ended December 28, 2024, reached $72,808, representing a 29.6% increase compared to $56,181 in the same quarter of 2023[26] - Basic net income per share for the three months ended December 28, 2024, was $1.07, up from $0.81 in the same quarter of 2023[26] Sales and Market Activity - The number of U.S. homes sold increased by 14.1% to 6,437, driven by increased demand across all sales channels[4] - Average selling price (ASP) per U.S. home sold rose by 2.8% to $94,900[4] - Net sales for the three months ended December 28, 2024, increased to $644,925, a 15.3% rise from $559,455 in the same period last year[26] Profitability and Margins - Gross profit margin expanded by 280 basis points to 28.1%[6] - Gross profit for the nine months ended December 28, 2024, was $511,570, up 32.0% from $387,434 in the prior year[26] Expenses and Financial Position - Selling, general, and administrative expenses (SG&A) rose to $108.2 million, representing 16.8% of net sales[7] - Cash and cash equivalents as of December 28, 2024, totaled $581.8 million, an increase of $11.5 million[9] - Cash and cash equivalents at the end of the period increased to $581,753 from $495,063, marking a 17.4% rise[28] - Total assets as of December 28, 2024, were $2,037,469, up 5.9% from $1,923,341 at the end of the previous year[24] - Total stockholders' equity increased to $1,528,299, a 7.4% rise from $1,422,370 in the prior year[24] Shareholder Actions - The company repurchased $20 million of its common stock during the quarter[9] Backlog and Cash Flow - Backlog decreased by 26.9% to $313 million from the sequential second quarter[4] - The company reported a net cash provided by operating activities of $194,852 for the nine months ended December 28, 2024, compared to $218,617 in the same period last year[28] - Net income attributable to Champion Homes, Inc. for the nine months ended December 28, 2024, was $162,065, a 12.6% increase from $143,908 in the same period last year[31] Adjusted Metrics - Adjusted EBITDA for the three months ended December 28, 2024, was $83,261, compared to $66,252 in the same quarter of 2023, reflecting a 25.7% increase[30]

Company Overview - Champion Homes (SKY) shares increased by 5.2% to $90.43 in the last trading session, following a period of 17.3% loss over the past four weeks, indicating a significant recovery in stock performance [1] - The company is benefiting from a digital direct-to-consumer strategy and expansion of its retail footprint, coinciding with an improving housing market in the United States [2] Financial Performance - Champion Homes is expected to report quarterly earnings of $0.79 per share, reflecting a year-over-year decrease of 3.7%, while revenues are projected to be $592.35 million, an increase of 5.9% from the previous year [3] - The consensus EPS estimate for the quarter has remained unchanged over the last 30 days, suggesting stability in earnings expectations [4] Industry Context - Champion Homes operates within the Zacks Building Products - Mobile Homes and RV Builders industry, where another company, Cavco (CVCO), also reported a 1.9% increase in stock price, but has seen an 11.8% decline over the past month [4] - Cavco's consensus EPS estimate for the upcoming report is $4.12, which represents a year-over-year change of -3.5%, indicating similar challenges within the industry [5]

Core Insights - SKY Perfect JSAT Corporation has selected a joint Non-Terrestrial Network (NTN) testbed from VIAVI Solutions and Rohde & Schwarz for its Universal NTN Innovation Lab, marking a significant step in satellite communications and 5G NTN technology [1][3][5] Group 1: NTN Lab and Testbed - The NTN Lab, launched in November 2024 at the Yokohama Satellite Control Center, is designed for technical NTN testing, aiming to provide robust connectivity using GEO and non-GEO satellites along with High-Altitude Platform Stations (HAPS) [3][5] - The joint NTN testbed covers Low Earth Orbit (LEO), Medium Earth Orbit (MEO), and GEO satellites, focusing on validating end-to-end connectivity, measuring quality of service, and ensuring reliability and stability [4][5] - Key components of the testbed include the VIAVI TM500-AS2 for base station testing, the R&S CMX500 mobile communication network tester, and the VIAVI TeraVM Real Data Applications engine for realistic application scenarios [4] Group 2: Strategic Importance and Future Developments - Initial testing will focus on GEO satellites operating in the Ku-band to enable high-capacity communications, with a strong emphasis on 5G NTN technologies [5] - The collaboration aims to accelerate technology demonstrations and use case development, paving the way for commercializing the NTN business [6] - SKY Perfect JSAT, as Asia's largest geostationary satellite operator, is expanding its Space Intelligence Business to enhance connectivity and contribute to national security [8]

Group 1 - Champion Homes (NYSE: SKY) experienced a significant positive day for its shareholders on October 28th [1] - The company operates manufacturing facilities that produce manufactured homes, which are a type of housing [1] Group 2 - The article discusses the investment philosophy of a value-oriented newsletter, Crude Value Insights, which focuses on analyzing cash flows and assessing the value of companies in the oil and gas sector [1] - The primary goal is to identify businesses trading at a significant discount to their intrinsic value using a combination of Benjamin Graham's investment philosophy and a contrarian market approach [1]

Financial Performance - Net sales for the three months ended September 28, 2024, increased to $616,877,000, up 33% from $464,236,000 for the same period last year[8]. - Gross profit for the six months ended September 28, 2024, was $330,548,000, representing a 34% increase from $246,162,000 for the same period last year[8]. - Net income attributable to Champion Homes, Inc. for the three months ended September 28, 2024, was $54,734,000, a 20% increase from $45,669,000 for the same period last year[8]. - Total revenue for the three months ended September 28, 2024, was $616.877 million, compared to $464.236 million for the same period in 2023, reflecting a 32.7% increase[54]. - Net sales for the six months ended September 28, 2024, were $1.2 billion, an increase of $315.7 million, or 34.0%, compared to the same period last year[103]. - Adjusted EBITDA for the three months ended September 28, 2024, was $74.2 million, an increase of $15.4 million, or 26.2%, from the same period last year[101]. - Total gross profit increased by $84.4 million, or 34.3%, to $330.5 million for the six months ended September 28, 2024[107]. Assets and Liabilities - Total current assets increased to $1,014,114,000 as of September 28, 2024, compared to $918,302,000 as of March 30, 2024, reflecting a growth of 10.4%[7]. - Total liabilities increased to $535,416,000 as of September 28, 2024, from $501,971,000 as of March 30, 2024, reflecting a rise of 6.6%[7]. - Retained earnings increased to $924,408,000 as of September 28, 2024, compared to $866,485,000 as of March 30, 2024, showing a growth of 6.7%[7]. - Total assets increased to $2.03 billion as of September 28, 2024, compared to $1.92 billion as of September 30, 2023[64]. - Other current liabilities totaled $268.4 million as of September 28, 2024, an increase from $247.5 million as of March 30, 2024[44]. Cash Flow and Investments - The company reported net cash provided by operating activities of $144,442,000 for the six months ended September 28, 2024, compared to $129,138,000 for the same period last year, an increase of 11.8%[12]. - Cash used in investing activities decreased to $22.6 million for the six months ended September 28, 2024, from $174.6 million in the same period of the prior year, due to reduced investments in floor plan loans and ECN stock[130]. - Cash used in financing activities was $47.3 million for the six months ended September 28, 2024, compared to $0.8 million in the same period of the prior year, primarily due to $40.0 million in common stock repurchases[131]. - The company has a $200.0 million revolving credit facility, with $168.5 million available for borrowing as of September 28, 2024[128]. Shareholder Activities - The Company issued 19,000 shares under equity-based compensation plans during the three months ended September 28, 2024, resulting in an additional capital paid in of $574,365[14]. - Champion Homes, Inc. repurchased 214,000 shares during the three months ended September 28, 2024, totaling $20,141[14]. - The Board of Directors approved a share repurchase program for up to $120 million, with an additional $20 million approved on October 28, 2024[142]. - During the three months ended September 28, 2024, the Company repurchased 214,275 shares at an average price of $93.32 per share[142]. - The share repurchase program does not have an expiration date and may be suspended or discontinued at any time[142]. Operational Highlights - The company operates 43 manufacturing facilities in the U.S. and 5 in Canada, with 72 sales centers across the U.S. as of September 28, 2024[19]. - The number of U.S. homes sold increased by 31.3% to 6,357 units for the three months ended September 28, 2024, compared to 4,842 units for the same period in 2023[82]. - U.S. manufacturing facilities in operation at the end of the period increased to 43, up from 39 in the prior year[82]. - The Company completed the acquisition of Regional Homes in October 2023, which constituted approximately 26% of total assets and about 24% of net sales for the six months ended September 28, 2024[139]. Expenses and Taxation - Selling, general, and administrative expenses for the three months ended September 28, 2024, were $99.7 million, an increase of $35.2 million, or 54.6%, compared to $64.5 million for the same period in 2023[91]. - Income tax expense for the three months ended September 28, 2024, was $15.4 million, with an effective tax rate of 21.6%, compared to $14.8 million and 24.5% in the prior year[97]. - Interest income, net decreased to $4.7 million for the three months ended September 28, 2024, down from $10.5 million, a change of 54.8%[95]. Acquisitions and Investments - The Company acquired Regional Enterprises, LLC for a total purchase consideration of $316.9 million, which included $279.5 million in cash and 455,098 shares of common stock valued at approximately $27.9 million[31]. - The Company made a $137.8 million equity investment in ECN Capital Corp., acquiring approximately 12% of its total outstanding common shares[40]. - The investment in ECN's common stock totaled $70.5 million as of September 28, 2024, reflecting a share of earnings of $0.7 million for the three months ended[41]. Compliance and Controls - The Company's disclosure controls and procedures were evaluated as effective as of September 28, 2024, by the CEO and CFO[138]. - There were no changes in internal control over financial reporting that materially affected the Company during the fiscal quarter[139].

Financial Data and Key Metrics Changes - Net sales increased 33% to $617 million compared to the same quarter last year, with U.S. factory-built housing revenue increasing 37% [18] - Net income attributable to Champion Homes for the second quarter increased 20% to $55 million or earnings of $0.94 per diluted share compared to $46 million or earnings of $0.79 per diluted share during the same period last year [24] - Adjusted EBITDA for the quarter was $74 million compared to $59 million in the prior year period, with an adjusted EBITDA margin of 12.0% compared to 12.7% in the prior year period [25] Business Line Data and Key Metrics Changes - Home sales increased 29% year-over-year to 6,536 units, with a 14% increase in organic sales orders year-over-year [9] - The average selling price per U.S. homes sold increased by 4.5% to $92,400 due to a higher mix of units sold through company-owned retail sales centers [19] - Manufacturing capacity utilization was 60% compared to 58% in the sequential first quarter of fiscal 2025 [20] Market Data and Key Metrics Changes - Canadian revenue during the quarter was $22 million, representing a 23% decline in the number of homes sold and a 1.5% decline in the average selling price per home versus the prior year period [21] - The company observed a softening in order rates in the third fiscal quarter, which is typical for the slower winter selling season [13] Company Strategy and Development Direction - The company is enhancing its digital direct-to-consumer strategy and advancing the integration of the Regional Homes acquisition [8] - Champion Financing has gained significant momentum, with new financing options launched for independent dealers and consumer client financing programs [12] - The company is strategically expanding its reach into Builder-as-a-Service and consumer retail sales through digital platforms [28] Management's Comments on Operating Environment and Future Outlook - Management expressed concern for those affected by hurricanes and noted that 9 of their 48 plant locations were impacted, leading to expected timing delays in order fulfillment [14] - Despite immediate headwinds, management anticipates strong medium- and long-term demand in hurricane-affected regions, which is expected to increase demand for housing [16] - The outlook remains optimistic, with healthy demand and resilient margins expected to support sustained growth [27] Other Important Information - The company returned capital to shareholders through $20 million in share repurchases and replenished its $100 million share repurchase authority [26] - The effective tax rate for the quarter was 21.6%, positively impacted by an increase in recognition of tax credits related to energy-efficient homes [23] Q&A Session Summary Question: Impact of storms on volume and revenue - Management indicated that production was interrupted due to power outages and flooding, and catching up on demand will depend on infrastructure rebuild [31] Question: Gross margin performance - Management noted positive impacts on gross margins from lower forest product input costs and stronger captive retail sales, with purchase accounting impacts expected to be immaterial going forward [33] Question: Expectations for order rates and backlog - Management expects a softening in order rates due to the presidential election and anticipates backlog may moderate before picking up in the spring and summer selling season [37] Question: Builder developer channel performance - Management reported strong order growth from community REITs and builder developers, with optimism in the marketplace [39] Question: M&A appetite and capital allocation - Management confirmed M&A is a priority, with a robust pipeline and plans for further acquisitions alongside innovation and shareholder returns [40] Question: FEMA orders and charter rates - Management has not received FEMA orders yet but expects significant demand for housing in affected regions, with charter rates currently running at about 8% to 8.5% for good credit [45][46]

Group 1: Earnings Performance - Champion Homes reported quarterly earnings of $0.93 per share, exceeding the Zacks Consensus Estimate of $0.61 per share, and up from $0.82 per share a year ago, representing an earnings surprise of 52.46% [1] - The company posted revenues of $616.88 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 7.87%, compared to $464.24 million in the same quarter last year [2] - Over the last four quarters, Champion Homes has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times [2] Group 2: Stock Performance and Outlook - Champion Homes shares have increased approximately 18.7% since the beginning of the year, while the S&P 500 has gained 21.8% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the upcoming quarter is $0.73 on revenues of $603.05 million, and for the current fiscal year, it is $2.66 on revenues of $2.42 billion [7] Group 3: Industry Context - The Building Products - Mobile Homes and RV Builders industry, to which Champion Homes belongs, is currently ranked in the bottom 12% of over 250 Zacks industries, indicating potential challenges [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5] - The Zacks Rank for Champion Homes is currently 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6]

CHAMPION HOMES ANNOUNCES SECOND QUARTER FISCAL 2025 RESULTS Troy, Michigan, October 28, 2024 /Business Wire/ -- Champion Homes, Inc. (NYSE: SKY) ("Champion Homes") today announced financial results for its second quarter ended September 28, 2024 ("fiscal 2025"). Second Quarter Fiscal 2025 Highlights (compared to Second Quarter Fiscal 2024) • Net sales increased 32.9% to $616.9 million • U.S. homes sold increased 31.3% to 6,357 • Total backlog increased 5.6% to $427 million from the sequential first quarter ...