Cavco(US:CVCO)2021-05-27 23:17Financial Data and Key Metrics Changes - The company reported the highest quarterly net revenue in its history at $306.5 million, up 20.1% from $255.3 million in the prior year's fourth quarter [20] - Net income increased by 110% to $25.2 million compared to $12 million in the same quarter of the prior year, with net income per diluted share rising to $2.71 from $1.29 [32] - Consolidated gross profit as a percentage of net revenue was 23.1%, up from 20.3% in the same period last year [24] Business Line Data and Key Metrics Changes - In the factory-built housing segment, net revenue increased 19.6% to $288 million from $240.8 million in the prior year quarter, driven by a 13.8% increase in average revenue per home sold [21] - Units sold increased by 5.2%, contributing approximately $19.1 million to revenue [22] - In the financial services segment, net revenue rose 26.7% to $18.5 million from $14.6 million, primarily due to market gains on equity securities [23] Market Data and Key Metrics Changes - Backlogs grew by $131 million to $603 million, equating to approximately 32 to 34 weeks of production [11] - Order rates were up 50% over last year's fourth quarter and 40% for the year, accounting for about 85% of the backlog growth [11] - The homebuilding industry is still not meeting the level of new unit starts needed to balance household formations, indicating a significant demand for affordable housing [17] Company Strategy and Development Direction - The company is focused on investing in plants, seeking acquisitions, and new growth opportunities, including the development of a new park model facility in Glendale, Arizona [18] - The strategy includes improving productivity and workplace conditions, as well as training and career programs to enhance retention and skills [19] - The company is confident in future demand and is actively looking for opportunities to expand geographically, particularly in the Northeast [52] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing challenges with supply chain disruptions and labor availability but expressed optimism about maintaining throughput and efficiency [44][50] - The company is committed to addressing the backlog and providing more affordable housing, loans, and insurance coverage [78] - Management noted that while there are cycles driven by interest rates, the need for affordable housing remains significant [17] Other Important Information - The company faced increased costs due to supply chain issues, with certain materials like oriented strand board rising by 275% over the past year [12] - Selling, general, and administrative expenses increased to $44 million, or 14.3% of net revenue, compared to $37.4 million, or 14.7% of net revenue, in the same quarter last year [27] - The company accrued $1.4 million in expenses related to an SEC inquiry, which is considered financially immaterial to overall results [28][39] Q&A Session Summary Question: Revenue and gross margin benefit from the additional week year-over-year - Management indicated they would provide estimates later [41][42] Question: Expectations for shipments in fiscal Q1 relative to Q4 - Management noted ongoing supply chain disruptions but aimed to increase capacity utilization to pre-pandemic levels [44][45] Question: Incremental demand from trading down versus site-built homes - Management observed anecdotal evidence of increased demand for manufactured homes due to rising housing costs [48] Question: Labor availability and absenteeism improvements - Management expressed cautious optimism about improvements in labor availability as the economy recovers [50] Question: Updates on the CFO search - The search is ongoing, and management is actively working to fill the position [75]