Cavco(CVCO) - 2026 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements Cavco Industries reported strong Q1 FY2026 results, with net revenue increasing 16.6% to $556.9 million and net income rising 50.0% to $51.6 million Consolidated Balance Sheets Total assets slightly increased to $1.42 billion as of June 28, 2025, driven by receivables, with liabilities growing and equity stable Consolidated Balance Sheet Highlights (in thousands) | Account | June 28, 2025 | March 29, 2025 | | :--- | :--- | :--- | | Total Current Assets | $915,272 | $910,186 | | Total Assets | $1,419,617 | $1,406,645 | | Total Current Liabilities | $317,280 | $303,166 | | Total Liabilities | $354,784 | $342,063 | | Total Stockholders' Equity | $1,064,833 | $1,064,582 | Consolidated Statements of Comprehensive Income Net revenue increased 16.6% to $556.9 million for Q1 FY2026, with net income rising 50.0% to $51.6 million and diluted EPS reaching $6.42 Quarterly Income Statement Summary (in thousands, except per share data) | Metric | Q1 FY2026 (ended June 28, 2025) | Q1 FY2025 (ended June 29, 2024) | YoY Change | | :--- | :--- | :--- | :--- | | Net Revenue | $556,857 | $477,599 | +16.6% | | Gross Profit | $129,506 | $103,402 | +25.2% | | Income from Operations | $60,358 | $38,551 | +56.6% | | Net Income | $51,642 | $34,429 | +50.0% | | Diluted EPS | $6.42 | $4.11 | +56.2% | Consolidated Statements of Cash Flows Operating cash flow increased to $55.5 million, while investing activities used $7.7 million and financing activities used $54.7 million, primarily for stock repurchases Quarterly Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended June 28, 2025 | Three Months Ended June 29, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $55,523 | $47,393 | | Net cash used in investing activities | ($7,715) | ($5,349) | | Net cash used in financing activities | ($54,729) | ($31,863) | - The company repurchased $50.0 million of its common stock during the quarter, a significant increase from the $29.5 million repurchased in the same period last year[14] Notes to Consolidated Financial Statements Notes highlight revenue growth led by factory-built housing, financial services profitability, and the $190 million acquisition of American Homestar Corporation Net Revenue by Segment (in thousands) | Segment | Q1 FY2026 | Q1 FY2025 | YoY Change | | :--- | :--- | :--- | :--- | | Factory-built housing | $535,694 | $458,048 | +17.0% | | Financial services | $21,163 | $19,551 | +8.2% | | Total Net Revenue | $556,857 | $477,599 | +16.6% | Income Before Income Taxes by Segment (in thousands) | Segment | Q1 FY2026 | Q1 FY2025 | | :--- | :--- | :--- | | Factory-built housing | $62,629 | $49,101 | | Financial services | $2,668 | ($5,240) | | Total Income Before Taxes | $65,297 | $43,861 | - On July 14, 2025, the company entered into a definitive agreement to acquire American Homestar Corporation for $190 million in cash, funded from cash on hand[54][55] Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes 16.6% revenue growth to increased home sales and improved gross margin, especially in financial services, while maintaining strong liquidity for operations and the $190 million acquisition Company and Industry Outlook Industry home shipments increased 5.3% year-to-date, with the company's backlog at $200 million, while management remains cautious about material costs and labor availability - Industry home shipments for the calendar year through May 2025 increased by 5.3% compared to the same period last year[61] - The company's backlog was $200 million as of June 28, 2025, compared to $232 million a year prior and $197 million at the end of fiscal 2025[68] Results of Operations Net revenue increased 16.6% driven by higher home sales, leading to a 25.2% rise in gross profit and a significant improvement in financial services gross margin Homes Sold by Channel | Channel | Q1 FY2026 | Q1 FY2025 | YoY Change | | :--- | :--- | :--- | :--- | | Company-owned retail | 1,023 | 1,013 | +1.0% | | Independent retailers, etc. | 4,393 | 3,708 | +18.5% | | Total Homes Sold | 5,416 | 4,721 | +14.7% | Gross Profit as % of Net Revenue | Segment | Q1 FY2026 | Q1 FY2025 | Change (bps) | | :--- | :--- | :--- | :--- | | Consolidated | 23.3% | 21.7% | +160 bps | | Factory-built housing | 22.6% | 22.6% | 0 bps | | Financial services | 40.9% | (0.6)% | +4150 bps | Liquidity and Capital Resources The company maintains strong liquidity, with operating cash flow increasing to $55.5 million, sufficient to fund operations and the $190 million American Homestar acquisition, despite significant stock repurchases - The company expects its current cash position and operating cash flows to be sufficient to fund operations and the planned acquisition of American Homestar[79] - Net cash used in financing activities increased primarily due to repurchasing more shares of common stock at a higher average price[84] Quantitative and Qualitative Disclosures About Market Risk No material changes were reported regarding quantitative and qualitative disclosures about market risk from the prior Annual Report on Form 10-K - There have been no material changes to the market risk disclosures from those in the company's Form 10-K[86] Controls and Procedures As of June 28, 2025, disclosure controls and procedures were deemed 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 June 28, 2025, the company's disclosure controls and procedures were effective[88] - No material changes to the company's internal control over financial reporting occurred during the fiscal quarter[89] PART II. OTHER INFORMATION Legal Proceedings The company is involved in ordinary course legal proceedings, but management does not anticipate a material adverse effect on its financial position or operations - Management does not believe that pending legal matters are likely to have a material adverse effect on the company's consolidated financial position, liquidity, or results of operations[45][92] Risk Factors No material changes to risk factors were reported from those disclosed in the company's Annual Report on Form 10-K - The report refers to the risk factors discussed in Part I, Item 1A of the company's Form 10-K, indicating no material changes[93] Unregistered Sales of Equity Securities and Use of Proceeds The company repurchased 108,293 shares for $50.4 million in Q1 FY2026, with $28 million remaining under the 2024 plan and $150 million under the May 2025 plan Issuer Purchases of Equity Securities (Q1 FY2026) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Mar 30 - May 3, 2025 | 55,744 | $479.62 | | May 4 - May 31, 2025 | 24,813 | $459.65 | | Jun 1 - Jun 28, 2025 | 27,736 | $427.55 | | Total | 108,293 | N/A | - As of June 28, 2025, $28 million remained available from the October 2024 repurchase authorization, and the full $150 million was available from the May 2025 authorization[95] Other Information No director or officer adopted, modified, or terminated a Rule 10b5-1 trading arrangement during the quarter ended June 28, 2025 - No director or officer adopted, modified, or terminated a Rule 10b5-1 trading plan during the quarter[95] Exhibits The report lists filed exhibits, including the merger agreement for American Homestar acquisition, credit agreement amendments, and officer certifications - Key exhibits filed include the merger agreement for the acquisition of American Homestar, Inc. and certifications by the Principal Executive Officer and Principal Financial Officer[96]