Cavco(CVCO) - 2024 Q4 - Annual Results

Financial Performance Overview This section provides a comprehensive review of Cavco's financial results for Q4 and the full fiscal year 2024, including key highlights, management commentary, and detailed segment analysis Q4 & Fiscal Year 2024 Highlights Cavco reported a year-over-year decline in financial performance for both the fourth quarter and the full fiscal year 2024, with Q4 net revenue at $420 million and full-year net revenue at $1.8 billion Q4 FY2024 Financial Performance | Metric | Q4 FY2024 | Q4 FY2023 | Change | | :--- | :--- | :--- | :--- | | Net Revenue | $420M | $476M | (11.8)% | | Net Income | $34M | $47M | (28.3)% | | Diluted EPS | $4.03 | $5.39 | (25.2)% | | Gross Profit Margin | 23.6% | 25.3% | (170 bps) | FY2024 Financial Performance | Metric | FY2024 | FY2023 | Change | | :--- | :--- | :--- | :--- | | Net Revenue | $1,795M | $2,143M | (16.2)% | | Income Before Taxes | $199M | $307M | (35.2)% | | Diluted EPS | $18.37 | $26.95 | (31.8)% | | Factory-built Housing Gross Margin | 23.2% | 25.3% | (210 bps) | - Backlogs increased by 19.4% sequentially to $191 million from $160 million three months prior, but were down from $244 million at the end of fiscal 2023[7] - The company executed approximately $110 million in stock repurchases during fiscal year 2024[7] Management Commentary CEO Bill Boor highlighted improved order rates and a return to full production, emphasizing the company's resilience, solid margins, successful capacity expansion, new product launches, and significant share repurchases - The quarter began with operational slowdowns due to thin backlogs, but order rates improved as the quarter progressed[6] - Key strategic achievements during the year include: - Increased capacity via the Solitaire acquisition and new plant startups in Hamlet and Glendale[6] - Expanded retail distribution footprint[6] - Launched the Anthem series, a nationally available HUD-approved manufactured duplex[6] - Repurchased approximately $110 million of company shares[6] Detailed Financial Analysis - Q4 FY2024 In Q4 FY2024, total net revenue decreased by 11.8% year-over-year to $420.1 million, primarily driven by a 12.6% decline in the factory-built housing segment from lower sales volume Revenue Analysis (Q4 FY2024) Q4 total net revenue fell to $420.1 million, with factory-built housing revenue decreasing 12.6% while financial services revenue increased 6.4% due to more insurance policies in force Revenue by Segment (Q4) | Revenue by Segment (Q4) | FY2024 | FY2023 | Change | | :--- | :--- | :--- | :--- | | Factory-built housing | $398.5M | $456.1M | (12.6)% | | Financial services | $21.6M | $20.3M | 6.4% | | Total Net Revenue | $420.1M | $476.4M | (11.8)% | - The number of factory-built homes sold decreased by 12.0% to 3,938 units from 4,477 units in the prior-year quarter[8] - The increase in financial services revenue was primarily due to more insurance policies in force[9] Profitability Analysis (Q4 FY2024) Consolidated gross profit for Q4 decreased 17.9% to $99.0 million, with the gross margin contracting 170 basis points to 23.6%, while SG&A expenses decreased 7.5% Profitability by Segment (Q4) | Profitability by Segment (Q4) | FY2024 | FY2023 | Change | | :--- | :--- | :--- | :--- | | Gross Profit | | | | | Factory-built housing | $89.3M | $111.4M | (19.8)% | | Financial services | $9.7M | $9.3M | 4.7% | | Income from Operations | | | | | Factory-built housing | $33.4M | $50.1M | (33.5)% | | Financial services | $4.2M | $4.1M | 3.3% | - The consolidated gross profit margin decreased to 23.6% from 25.3% in Q4 of the prior year[10] - SG&A expenses in the factory-built housing segment decreased primarily due to lower non-recurring consultant fees for energy tax credits, reduced SEC litigation costs, and lower compensation[10] Net Income and EPS (Q4 FY2024) For the fourth quarter, net income attributable to common stockholders was $33.9 million, a 28.3% decrease, resulting in a diluted net income per share of $4.03, down 25.2% Net Income and EPS (Q4) | Metric (Q4) | FY2024 | FY2023 | Change | | :--- | :--- | :--- | :--- | | Net Income Attributable to Cavco | $33.9M | $47.3M | (28.3)% | | Diluted Net Income per Share | $4.03 | $5.39 | (25.2)% | Detailed Financial Analysis - Full Year FY2024 For the full fiscal year 2024, net revenue declined 16.2% to $1.8 billion, leading to a 39.7% drop in income from operations and a 31.8% decrease in diluted EPS Revenue Analysis (Full Year FY2024) Full-year net revenue was $1.79 billion, a 16.2% decrease, primarily due to a 17.1% fall in factory-built housing revenue, partially offset by a 6.7% growth in financial services revenue Revenue by Segment (Full Year) | Revenue by Segment (Full Year) | FY2024 | FY2023 | Change | | :--- | :--- | :--- | :--- | | Factory-built housing | $1,716.6M | $2,069.5M | (17.1)% | | Financial services | $78.2M | $73.3M | 6.7% | | Total Net Revenue | $1,794.8M | $2,142.7M | (16.2)% | - The number of factory-built homes sold decreased by 12.6% to 16,928 units for the full year[13] - The decline in factory-built housing revenue was attributed to lower home sales volume and selling prices, partially offset by the Solitaire Homes acquisition[13] Profitability Analysis (Full Year FY2024) Full-year consolidated gross profit fell 23.1% to $426.9 million, with the gross margin declining 210 basis points to 23.8%, and financial services income from operations decreased 42.3% due to higher weather-related claims Profitability by Segment (Full Year) | Profitability by Segment (Full Year) | FY2024 | FY2023 | Change | | :--- | :--- | :--- | :--- | | Gross Profit | | | | | Factory-built housing | $398.9M | $523.5M | (23.8)% | | Financial services | $28.0M | $31.4M | (10.9)% | | Income from Operations | | | | | Factory-built housing | $172.7M | $285.6M | (39.6)% | | Financial services | $6.3M | $11.0M | (42.3)% | - The financial services segment's gross profit decline was mainly due to higher weather-related insurance claims and reduced revenue from loan sales[15] Net Income and EPS (Full Year FY2024) For the full fiscal year 2024, net income attributable to common stockholders decreased by 34.4% to $157.8 million, with diluted net income per share falling 31.8% to $18.37 Net Income and EPS (Full Year) | Metric (Full Year) | FY2024 | FY2023 | Change | | :--- | :--- | :--- | :--- | | Net Income Attributable to Cavco | $157.8M | $240.6M | (34.4)% | | Diluted Net Income per Share | $18.37 | $26.95 | (31.8)% | Financial Statements This section presents Cavco's key financial statements, including the consolidated balance sheets, statements of income, and other operating data, providing a detailed view of the company's financial position and performance Consolidated Balance Sheets As of March 30, 2024, Cavco's balance sheet remained strong with total assets of $1.35 billion, an increase from $1.31 billion a year prior, and total stockholders' equity grew to $1.03 billion Consolidated Balance Sheet Summary | Balance Sheet Item | March 30, 2024 | April 1, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $352.7M | $271.4M | | Total current assets | $851.8M | $804.6M | | Total assets | $1,354.2M | $1,308.0M | | Total current liabilities | $273.3M | $293.4M | | Total stockholders' equity | $1,033.4M | $976.3M | - Inventories decreased to $241.3 million from $263.2 million in the prior year[22] - Treasury stock increased to $274.7 million from $164.5 million, reflecting the company's share repurchase program[22] Consolidated Statements of Income The consolidated income statement shows a year-over-year decline in performance, with fiscal year 2024 net revenue at $1.8 billion and net income attributable to stockholders decreasing to $157.8 million Consolidated Statements of Income Summary | Income Statement (Full Year) | FY2024 | FY2023 | | :--- | :--- | :--- | | Net revenue | $1,794.8M | $2,142.7M | | Gross profit | $426.9M | $554.9M | | Income from operations | $179.0M | $296.6M | | Net income attributable to Cavco | $157.8M | $240.6M | | Diluted EPS | $18.37 | $26.95 | Other Operating Data For the full fiscal year 2024, capital expenditures were significantly lower at $17.4 million compared to $44.1 million in the prior year, while depreciation increased slightly Other Operating Data Summary | Operating Data (Full Year) | FY2024 | FY2023 | | :--- | :--- | :--- | | Capital expenditures | $17.4M | $44.1M | | Depreciation | $17.0M | $14.8M | | Amortization of other intangibles | $1.6M | $2.1M | Corporate Information This section provides an overview of Cavco Industries, including its business operations, product offerings, and details regarding the upcoming conference call for fiscal year 2024 results About Cavco Industries Cavco Industries, Inc., headquartered in Phoenix, Arizona, is a leading U.S. producer of factory-built housing products, operating under various brand names and offering complementary finance and insurance services - Cavco is one of the largest producers of manufactured and modular homes in the United States[19] - The company's brands include Cavco, Fleetwood, Palm Harbor, and Solitaire, among others[19] - Cavco operates integrated financial services through CountryPlace Mortgage and Standard Casualty insurance[19] Conference Call Information Cavco management will host a conference call on May 24, 2024, at 1:00 p.m. Eastern Time to review the fiscal 2024 fourth quarter and year-end results, accessible via webcast - A conference call to discuss the results is scheduled for May 24, 2024, at 1:00 p.m. (Eastern Time)[18] - A webcast and presentation archive will be available for 60 days on the investor relations website[18]