Cavco(CVCO) - 2025 Q1 - Quarterly Results

Cavco Industries Fiscal 2025 First Quarter Results Quarterly Highlights Cavco's Q1 FY2025 net revenue increased slightly to $478M, but diluted EPS fell to $4.11 due to financial services losses from high claims | Financial Metric | Q1 FY2025 | Q1 FY2024 | Change | | :--- | :--- | :--- | :--- | | Net Revenue | $478M | $476M | +0.4% | | Income Before Income Taxes | $44M | $61M | -27.9% | | Diluted EPS | $4.11 | $5.29 | -22.3% | | Backlog (End of Quarter) | $232M | N/A | +21.4% (QoQ) | - The financial services segment incurred a pretax net loss of $5.2 million, reducing diluted EPS by approximately $0.49 after tax, attributed to unusually high insurance claims from weather events in Texas and wildfires in New Mexico[2] - Operational momentum in the housing segment was strong, with home sales volume up 20% sequentially and factory capacity utilization increasing from approximately 60% to 65%[2] - The company repurchased approximately $29 million of its stock during the quarter[3] Management Commentary Management noted strong housing segment momentum and growing backlog, despite high weather-related insurance claims impacting consolidated results - Management confirmed that strong momentum from the end of fiscal 2024 continued into the first quarter, evidenced by increasing orders, production, and a growing backlog[3] - Consolidated results were negatively impacted by very high claims costs in the insurance operations, driven by unusual storm activity in Texas and fires in New Mexico[3] - Despite the unpredictable nature of weather events, the CEO stated that the insurance operation has performed well over time and exposure is actively managed[3] Financial Performance Analysis Financial performance was mixed, with housing revenue up slightly but gross margin compressed, while financial services swung to a loss due to high claims Revenue Analysis Overall net revenue increased slightly by 0.4%, driven by a modest rise in both factory-built housing and financial services segments | Segment | Q1 FY2025 Revenue | Q1 FY2024 Revenue | Change (%) | | :--- | :--- | :--- | :--- | | Factory-built housing | $458.0M | $457.1M | +0.2% | | Financial services | $19.6M | $18.8M | +4.2% | | Total Net Revenue | $477.6M | $475.9M | +0.4% | - The increase in factory-built housing revenue was driven by a 3.0% rise in homes sold (4,721 vs. 4,582), which was partially offset by a 2.7% decrease in the net revenue per home sold[4] - Financial services revenue increased due to a higher number of insurance policies in force compared to the prior year[5] Profitability Analysis Gross profit and income from operations significantly declined due to lower housing margins and substantial losses in financial services | Profitability Metric | Q1 FY2025 | Q1 FY2024 | Change (%) | | :--- | :--- | :--- | :--- | | Gross Profit | | | | | Factory-built housing | $103.5M | $113.4M | -8.7% | | Financial services | $(0.1)M | $4.5M | -102.4% | | Total Gross Profit | $103.4M | $117.9M | -12.3% | | Income from Operations | | | | | Factory-built housing | $43.8M | $57.3M | -23.6% | | Financial services | $(5.2)M | $(1.1)M | -356.4% | | Total Income from Operations | $38.6M | $56.2M | -31.4% | - The gross margin for factory-built housing declined to 22.6% from 24.8% year-over-year, primarily due to lower average selling prices, which was partially offset by lower input costs[2][6] - The financial services segment's profitability was severely impacted by higher insurance claims from weather-related events, causing its gross margin to plummet from 24.0% to -0.6%[6][7] - Selling, general and administrative (SG&A) expenses rose 5.1% to $64.9 million, mainly from increased compensation related to acquired retail locations[6][8] Net Income and EPS Net income attributable to Cavco and diluted EPS both decreased significantly year-over-year | Metric | Q1 FY2025 | Q1 FY2024 | Change (%) | | :--- | :--- | :--- | :--- | | Net Income Attributable to Cavco | $34.4M | $46.4M | -25.7% | | Diluted Net Income Per Share | $4.11 | $5.29 | -22.3% | Financial Statements Unaudited financial statements show stable assets at $1.38 billion but a decline in net income to $34.4 million due to profitability pressures Consolidated Balance Sheets The balance sheet shows an increase in total assets to $1.38 billion and stable stockholders' equity | Balance Sheet Item | June 29, 2024 | March 30, 2024 | | :--- | :--- | :--- | | Total Current Assets | $877.6M | $851.8M | | Total Assets | $1,380.7M | $1,354.2M | | Total Current Liabilities | $296.0M | $273.3M | | Total Liabilities | $342.1M | $320.8M | | Total Stockholders' Equity | $1,038.5M | $1,033.4M | - Cash and cash equivalents increased to $359.3 million from $352.7 million at the end of the prior fiscal year[14] Consolidated Statements of Income The income statement reflects stable net revenue but significant declines in gross profit and net income | Income Statement Item | Q1 FY2025 | Q1 FY2024 | | :--- | :--- | :--- | | Net Revenue | $477.6M | $475.9M | | Gross Profit | $103.4M | $117.9M | | Income from Operations | $38.6M | $56.2M | | Income Before Income Taxes | $43.9M | $60.7M | | Net Income | $34.4M | $46.4M | Other Operating Data Capital expenditures and depreciation remained relatively consistent year-over-year | Operating Data | Q1 FY2025 | Q1 FY2024 | | :--- | :--- | :--- | | Capital Expenditures | $4.9M | $4.2M | | Depreciation | $4.4M | $4.2M | | Amortization of other intangibles | $0.4M | $0.4M | Corporate Information This section outlines Cavco's core business, upcoming investor call details, and standard forward-looking statement disclaimers About Cavco Cavco Industries is a major US producer of manufactured and modular homes, offering related financial services through subsidiaries - Cavco Industries, Inc. is a major US producer of manufactured and modular homes, marketed under brands including Cavco, Fleetwood, and Palm Harbor[12] - The company's subsidiaries provide related financial services: CountryPlace Mortgage offers home loans, and Standard Casualty provides property and casualty insurance to manufactured homeowners[12] Conference Call Information Management will host a conference call on August 2, 2024, to discuss the first quarter results - Management will host a conference call to review the Q1 results on August 2, 2024, at 1:00 p.m. Eastern Time[11] Forward-Looking Statements The report includes forward-looking statements subject to risks and uncertainties, advising readers to consult SEC filings - The report contains forward-looking statements regarding future business and financial performance, which are subject to risks and uncertainties; readers are advised to consult the company's SEC filings for a full understanding of these risks[13]