Cavco Industries Reports Fiscal 2026 Third Quarter Results

Core Viewpoint - Cavco Industries, Inc. reported financial results for the third fiscal quarter ended December 27, 2025, highlighting a significant acquisition and mixed performance in various segments [1][4]. Acquisition Details - On September 29, 2025, Cavco completed the acquisition of American Homestar Corporation, which includes two manufacturing lines, nineteen retail locations, and a financial services operation. The results of American Homestar are now included in Cavco's consolidated financial statements [2]. Quarterly Highlights - Industry shipments slowed during the quarter, particularly in HUD shipments, prompting Cavco to maintain production through backlog management and holiday downtime. The market sentiment remains optimistic regarding affordable housing [4]. - The financial services segment showed strong results, with improved profitability in the insurance operation. The first full quarter with American Homestar reflected deal costs and integration expenses, but future benefits from the acquisition are anticipated to exceed expectations [4]. Financial Results - Net revenue for the quarter was $581.0 million, an increase of $59 million or 11.3% compared to $522.0 million in the same quarter of the previous year, driven by home sales volume and average selling price growth [6]. - Factory-built housing revenue was $558.5 million, up 11.5% from $500.9 million, while financial services revenue increased by 6.2% to $22.5 million [5][6]. - Gross profit as a percentage of net revenue for factory-built housing decreased to 21.7% from 23.6% year-over-year, while financial services gross profit increased to 65.2% from 55.5% [6][8]. Operational Metrics - Factory-built modules sold increased by 5.3% to 8,818 units, with a net revenue per home sold rising by 8.0% to $106,971 [5][7]. - Backlogs totaled $160 million at the end of the quarter, representing 4-6 weeks of production [6]. Income and Expenses - Income before income taxes was $58 million, down 16.9% from $69 million in the prior year, with net income per diluted share at $5.58, a decrease of 19.1% from $6.90 [6][10]. - Selling, general, and administrative expenses increased by 23.3% to $81.4 million, primarily due to the addition of American Homestar and associated deal costs [8][11]. Long-term Outlook - The company anticipates that the integration of American Homestar will yield positive impacts as the investment phase concludes, with expectations for increased production in the upcoming Spring selling season [4].