Cavco Industries Reports Fiscal 2024 Second Quarter Results
02 Novembro 2023 - 5:05PM
Cavco Industries, Inc. (Nasdaq: CVCO) ("we," "our," the "Company"
or "Cavco") today announced financial results for the second fiscal
quarter ended September 30, 2023.
Second Quarter Summary
-
Net revenue was $452 million, down 21.7% compared to
$577 million in the second quarter of the prior year.
-
Factory-built housing gross profit as a percentage of Net revenue
was 23.2%, compared to 26.7% in the prior year.
-
Financial services Gross profit as a percentage of Net revenue was
35.9% compared to 44.6% in the prior year.
-
Income before income taxes was $52 million, down 44.1%
compared to $93 million in the prior year period.
-
Net income per diluted share attributable to Cavco common
stockholders was $4.76 compared to $8.25 in the prior year
quarter.
-
Backlogs were $170 million at the end of the quarter, down
$7 million from $177 million three months prior.
-
Returned nearly $47 million to shareholders through stock
repurchases.
Commenting on the quarter, President and Chief Executive Officer
Bill Boor said, "Backlogs have stabilized at about 6 weeks,
reflecting modest improvement in wholesale orders while capacity
utilization remained essentially unchanged from Q1. Our plants, and
operations overall, continue to do an outstanding job maintaining
healthy margins and generating strong cash flow despite market
conditions."
He continued, "Prospective homeowners have gotten no relief from
the impact of rising interest rates and the affordable housing
crisis is intensifying. At Cavco, we continue to manage the
near-term challenges with a steady focus on improving the customer
experience, deepening our distribution partnerships and developing
innovative products and finance solutions so we can get more
families into homes."
Financial Results
|
Three Months Ended |
|
|
|
|
($ in thousands, except
revenue per home sold) |
September 30,2023 |
|
October 1,2022 |
|
Change |
Net
revenue |
|
|
|
|
|
|
|
Factory-built housing |
$ |
434,066 |
|
$ |
559,602 |
|
$ |
(125,536 |
) |
|
(22.4)% |
Financial services |
|
17,964 |
|
|
17,790 |
|
|
174 |
|
|
1.0 |
% |
|
$ |
452,030 |
|
$ |
577,392 |
|
$ |
(125,362 |
) |
|
(21.7)% |
|
|
|
|
|
|
|
|
Factory-built modules
sold |
|
6,912 |
|
|
8,863 |
|
|
(1,951 |
) |
|
(22.0)% |
|
|
|
|
|
|
|
|
Factory-built homes sold
(consisting of one or more modules) |
|
4,248 |
|
|
5,111 |
|
|
(863 |
) |
|
(16.9)% |
|
|
|
|
|
|
|
|
Net factory-built housing
revenue per home sold |
$ |
102,181 |
|
$ |
109,490 |
|
$ |
(7,309 |
) |
|
(6.7)% |
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
|
($ in thousands, except
revenue per home sold) |
September 30,2023 |
|
October 1,2022 |
|
Change |
Net
revenue |
|
|
|
|
|
|
|
Factory-built housing |
$ |
891,175 |
|
$ |
1,132,199 |
|
$ |
(241,024 |
) |
|
(21.3)% |
Financial services |
|
36,730 |
|
|
33,531 |
|
|
3,199 |
|
|
9.5 |
% |
|
$ |
927,905 |
|
$ |
1,165,730 |
|
$ |
(237,825 |
) |
|
(20.4)% |
|
|
|
|
|
|
|
|
Factory-built modules
sold |
|
14,318 |
|
|
18,105 |
|
|
(3,787 |
) |
|
(20.9)% |
|
|
|
|
|
|
|
|
Factory-built homes sold
(consisting of one or more modules) |
|
8,830 |
|
|
10,457 |
|
|
(1,627 |
) |
|
(15.6)% |
|
|
|
|
|
|
|
|
Net factory-built housing
revenue per home sold |
$ |
100,926 |
|
$ |
108,272 |
|
$ |
(7,346 |
) |
|
(6.8)% |
-
In the factory-built housing segment, the decrease in Net revenue
for the three and six months was due to lower home sales volume and
lower home selling prices, partially offset by the addition of
Solitaire Homes.
-
Financial services segment Net revenue increased for the three and
six months from more insurance policies in force in the current
period compared to the prior year.
|
Three Months Ended |
|
|
|
|
($ in thousands) |
September 30,2023 |
|
October 1,2022 |
|
Change |
Gross
profit |
|
|
|
|
|
|
|
Factory-built housing |
$ |
100,507 |
|
|
$ |
149,665 |
|
|
$ |
(49,158 |
) |
|
(32.8)% |
Financial services |
|
6,450 |
|
|
|
7,934 |
|
|
|
(1,484 |
) |
|
(18.7)% |
|
$ |
106,957 |
|
|
$ |
157,599 |
|
|
$ |
(50,642 |
) |
|
(32.1)% |
|
|
|
|
|
|
|
|
Gross profit as % of Net
revenue |
|
|
|
|
|
|
|
Consolidated |
|
23.7 |
% |
|
|
27.3 |
% |
|
N/A |
|
(3.6)% |
Factory-built housing |
|
23.2 |
% |
|
|
26.7 |
% |
|
N/A |
|
(3.5)% |
Financial services |
|
35.9 |
% |
|
|
44.6 |
% |
|
N/A |
|
(8.7)% |
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
|
|
|
|
|
|
|
Factory-built housing |
$ |
56,455 |
|
|
$ |
61,640 |
|
|
$ |
(5,185 |
) |
|
(8.4)% |
Financial services |
|
5,051 |
|
|
|
5,254 |
|
|
|
(203 |
) |
|
(3.9)% |
|
$ |
61,506 |
|
|
$ |
66,894 |
|
|
$ |
(5,388 |
) |
|
(8.1)% |
|
|
|
|
|
|
|
|
Income from
operations |
|
|
|
|
|
|
|
Factory-built housing |
$ |
44,052 |
|
|
$ |
88,025 |
|
|
$ |
(43,973 |
) |
|
(50.0)% |
Financial services |
|
1,399 |
|
|
|
2,680 |
|
|
|
(1,281 |
) |
|
(47.8)% |
|
$ |
45,451 |
|
|
$ |
90,705 |
|
|
$ |
(45,254 |
) |
|
(49.9)% |
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
|
($ in thousands) |
September 30,2023 |
|
October 1,2022 |
|
Change |
Gross
profit |
|
|
|
|
|
|
|
Factory-built housing |
$ |
213,875 |
|
|
$ |
289,251 |
|
|
$ |
(75,376 |
) |
|
(26.1)% |
Financial services |
|
10,961 |
|
|
|
13,072 |
|
|
|
(2,111 |
) |
|
(16.1)% |
|
$ |
224,836 |
|
|
$ |
302,323 |
|
|
$ |
(77,487 |
) |
|
(25.6)% |
|
|
|
|
|
|
|
|
Gross profit as % of Net
revenue |
|
|
|
|
|
|
|
Consolidated |
|
24.2 |
% |
|
|
25.9 |
% |
|
N/A |
|
(1.7)% |
Factory-built housing |
|
24.0 |
% |
|
|
25.5 |
% |
|
N/A |
|
(1.5)% |
Financial services |
|
29.8 |
% |
|
|
39.0 |
% |
|
N/A |
|
(9.2)% |
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
|
|
|
|
|
|
|
Factory-built housing |
$ |
112,476 |
|
|
$ |
122,563 |
|
|
$ |
(10,087 |
) |
|
(8.2)% |
Financial services |
|
10,710 |
|
|
|
10,467 |
|
|
|
243 |
|
|
2.3 |
% |
|
$ |
123,186 |
|
|
$ |
133,030 |
|
|
$ |
(9,844 |
) |
|
(7.4)% |
|
|
|
|
|
|
|
|
Income from
operations |
|
|
|
|
|
|
|
Factory-built housing |
$ |
101,399 |
|
|
$ |
166,688 |
|
|
$ |
(65,289 |
) |
|
(39.2)% |
Financial services |
|
251 |
|
|
|
2,605 |
|
|
|
(2,354 |
) |
|
(90.4)% |
|
$ |
101,650 |
|
|
$ |
169,293 |
|
|
$ |
(67,643 |
) |
|
(40.0)% |
-
In the factory-built housing segment, Gross profit as a percent of
Net revenue for the three and six months was down primarily due to
lower average selling price, partially offset by lower input
costs.
- In the financial
services segment, Gross profit and Income from operations for the
three and six months were negatively affected by higher insurance
claims from weather related events.
- Selling, general
and administrative expenses decreased for the three and six months
primarily as a result of lower incentive compensation on reduced
sales and lower professional expenses.
|
Three Months Ended |
|
|
|
|
($ in thousands, except per
share amounts) |
September 30,2023 |
|
October 1,2022 |
|
Change |
Net income attributable to Cavco common
stockholders |
$ |
41,539 |
|
$ |
74,116 |
|
$ |
(32,577 |
) |
|
(44.0)% |
Diluted net income per
share |
$ |
4.76 |
|
$ |
8.25 |
|
$ |
(3.49 |
) |
|
(42.3)% |
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
|
($ in thousands, except per
share amounts) |
September 30,2023 |
|
October 1,2022 |
|
Change |
Net income attributable
to Cavco common stockholders |
$ |
87,896 |
|
$ |
133,718 |
|
$ |
(45,822 |
) |
|
(34.3)% |
Diluted net income per
share |
$ |
10.05 |
|
$ |
14.88 |
|
$ |
(4.83 |
) |
|
(32.5)% |
Items ancillary to our core operations had the
following impact on the results of operations:
|
|
Three Months Ended |
|
Six Months Ended |
($ in
millions) |
September 30,2023 |
|
October 1,2022 |
|
September 30,2023 |
|
October 1,2022 |
Net revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized (losses) recognized during the period on securities held
in the financial services segment |
$ |
(0.3 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(1.2 |
) |
Selling,
general and administrative expenses |
|
|
Expenses incurred in engaging third-party consultants in relation
to the non-recurring energy efficient home tax credits |
|
— |
|
|
|
(1.9 |
) |
|
|
— |
|
|
|
(4.5 |
) |
Legal and other expense related to the Securities and Exchange
Commission inquiry |
|
(0.7 |
) |
|
|
(1.4 |
) |
|
|
(1.0 |
) |
|
|
(2.8 |
) |
Other
income, net |
Corporate unrealized gains (losses) recognized during the period on
securities held |
|
— |
|
|
|
— |
|
|
|
0.1 |
|
|
|
(1.1 |
) |
Conference Call Details
Cavco's management will hold a conference call
to review these results tomorrow, November 3, 2023, at 1:00
p.m. (Eastern Time). Interested parties can access a live webcast
of the conference call on the Internet at
https://investor.cavco.com or via telephone. To participate by
phone, please register here to receive the dial in number and your
PIN. An archive of the webcast and presentation will be available
for 90 days at https://investor.cavco.com.
About Cavco
Cavco Industries, Inc., headquartered in
Phoenix, Arizona, designs and produces factory-built housing
products primarily distributed through a network of independent and
Company-owned retailers. We are one of the largest producers of
manufactured and modular homes in the United States, based on
reported wholesale shipments. Our products are marketed under a
variety of brand names including Cavco, Fleetwood, Palm Harbor,
Nationwide, Fairmont, Friendship, Chariot Eagle, Destiny,
Commodore, Colony, Pennwest, R-Anell, Manorwood, MidCountry and
Solitaire. We are also a leading producer of park model RVs,
vacation cabins and factory-built commercial structures. Cavco's
finance subsidiary, CountryPlace Mortgage, is an approved Fannie
Mae and Freddie Mac seller/servicer and a Ginnie Mae
mortgage-backed securities issuer that offers conforming mortgages,
non-conforming mortgages and home-only loans to purchasers of
factory-built homes. Our insurance subsidiary, Standard Casualty,
provides property and casualty insurance to owners of manufactured
homes.
Forward-Looking Statements
Certain statements contained in this release are forward-looking
statements. In general, all statements that are not historical in
nature are forward-looking. Forward-looking statements are
typically included, for example, in discussions regarding the
manufactured housing industry; our financial performance and
operating results; and the expected effect of certain risks and
uncertainties on our business, financial condition and results of
operations. All forward-looking statements are subject to risks and
uncertainties, many of which are beyond our control. As a result,
our actual results or performance may differ materially from
anticipated results or performance. Factors that could cause such
differences to occur include, but are not limited to: the impact of
local or national emergencies including the COVID-19 pandemic,
including such impacts from state and federal regulatory action
that restricts our ability to operate our business in the ordinary
course and impacts on (i) customer demand and the availability of
financing for our products, (ii) our supply chain and the
availability of raw materials for the manufacture of our products,
(iii) the availability of labor and the health and safety of our
workforce and (iv) our liquidity and access to the capital markets;
labor shortages and the pricing and availability of transportation
or raw materials; increased health and safety incidents; our
ability to negotiate reasonable collective bargaining agreements
with the unions representing certain employees; increases in the
rate of cancellations of home sales orders; our ability to
successfully integrate past acquisitions or future acquisitions;
involvement in vertically integrated lines of business, including
manufactured housing consumer finance, commercial finance and
insurance; information technology failures or cyber incidents; our
ability to maintain the security of personally identifiable
information of our customers, suppliers and employees; our
participation in certain financing programs for the purchase of our
products by industry distributors and consumers, which may expose
us to additional risk of credit loss; our exposure to significant
warranty and construction defect claims; our exposure to claims and
liabilities relating to products supplied to the Company or work
done by subcontractors; our contingent repurchase obligations
related to wholesale financing provided to industry distributors; a
write-off of all or part of our goodwill; our ability to maintain
relationships with independent distributors; our business and
operations being concentrated in certain geographic regions;
taxation authorities initiating or successfully asserting tax
positions which are contrary to ours; governmental and regulatory
disruption, including (i) prolonged delays by Congress and the
President to approve budgets or continuing appropriations
resolutions to facilitate the operation of the federal government
or (ii) shutdowns or delays at the Mexico border; curtailment of
available financing from home-only lenders and increased lending
regulations; the effect of increasing interest rates on our
customer's ability to finance home purchases; availability of
wholesale financing and limited floor plan lenders; market forces,
rising interest rates, fluctuations in exchange rates and housing
demand fluctuations; the cyclical and seasonal nature of our
business; competition; general deterioration in economic conditions
and turmoil in the financial markets; unfavorable zoning
ordinances; extensive regulation affecting the production and sale
of manufactured housing; potential financial impact on the Company
from the recently settled regulatory action by the SEC against the
Company, including potential higher insurance costs as a result of
such action, potential reputational damage that the Company may
suffer and the Company's potential ongoing indemnification
obligations related to ongoing litigation not involving the
Company; losses not covered by our director and officer insurance,
which may be large, adversely impacting financial performance; loss
of any of our executive officers; liquidity and ability to raise
capital may be limited; and organizational document provisions
delaying or making a change in control more difficult; together
with all of the other risks described in our filings with the SEC.
Readers are specifically referred to the Risk Factors described in
Item 1A of the Company's Annual Report on Form 10-K for the year
ended April 1, 2023 as may be updated from time to time in
future filings on Form 10-Q and other reports filed by the Company
pursuant to the Securities Exchange Act of 1934, which identify
important risks that could cause actual results to differ from
those contained in the forward-looking statements. Cavco expressly
disclaims any obligation to update any forward-looking statements
contained in this release, whether as a result of new information,
future events or otherwise, as required by law. Investors should
not place undue reliance on any such forward-looking
statements.
CAVCO INDUSTRIES, INC.CONSOLIDATED BALANCE
SHEETS(Dollars in thousands, except per share
amounts) |
|
|
|
|
|
September 30,2023 |
|
April 1,2023 |
ASSETS |
(Unaudited) |
|
|
Current assets |
|
|
|
Cash and cash equivalents |
$ |
377,264 |
|
|
$ |
271,427 |
|
Restricted cash, current |
|
17,180 |
|
|
|
11,728 |
|
Accounts receivable, net |
|
88,560 |
|
|
|
89,347 |
|
Short-term investments |
|
14,358 |
|
|
|
14,978 |
|
Current portion of consumer loans receivable, net |
|
10,503 |
|
|
|
17,019 |
|
Current portion of commercial loans receivable, net |
|
48,583 |
|
|
|
43,414 |
|
Current portion of commercial loans receivable from affiliates,
net |
|
1,959 |
|
|
|
640 |
|
Inventories |
|
244,476 |
|
|
|
263,150 |
|
Prepaid expenses and other current assets |
|
72,560 |
|
|
|
92,876 |
|
Total current assets |
|
875,443 |
|
|
|
804,579 |
|
Restricted cash |
|
585 |
|
|
|
335 |
|
Investments |
|
20,507 |
|
|
|
18,639 |
|
Consumer loans receivable,
net |
|
25,233 |
|
|
|
27,129 |
|
Commercial loans receivable,
net |
|
40,998 |
|
|
|
53,890 |
|
Commercial loans receivable from
affiliates, net |
|
2,928 |
|
|
|
4,033 |
|
Property, plant and equipment,
net |
|
223,664 |
|
|
|
228,278 |
|
Goodwill |
|
116,015 |
|
|
|
114,547 |
|
Other intangibles, net |
|
29,005 |
|
|
|
29,790 |
|
Operating lease right-of-use
assets |
|
34,413 |
|
|
|
26,755 |
|
Total assets |
$ |
1,368,791 |
|
|
$ |
1,307,975 |
|
LIABILITIES,
REDEEMABLE NONCONTROLLING INTEREST, AND STOCKHOLDERS'
EQUITY |
|
|
|
Current liabilities |
|
|
|
Accounts payable |
$ |
41,095 |
|
|
$ |
30,730 |
|
Accrued expenses and other current liabilities |
|
264,380 |
|
|
|
262,661 |
|
Total current liabilities |
|
305,475 |
|
|
|
293,391 |
|
Operating lease liabilities |
|
30,529 |
|
|
|
21,678 |
|
Other liabilities |
|
7,792 |
|
|
|
7,820 |
|
Deferred income taxes |
|
5,740 |
|
|
|
7,581 |
|
Redeemable noncontrolling interest |
|
— |
|
|
|
1,219 |
|
Stockholders' equity |
|
|
|
Preferred stock, $0.01 par value; 1,000,000 shares authorized; No
shares issued or outstanding |
|
— |
|
|
|
— |
|
Common stock, $0.01 par value; 40,000,000 shares authorized; Issued
9,356,421 and 9,337,125 shares, respectively |
|
94 |
|
|
|
93 |
|
Treasury stock, at cost; 844,742 and 671,801 shares,
respectively |
|
(211,646 |
) |
|
|
(164,452 |
) |
Additional paid-in capital |
|
274,204 |
|
|
|
271,950 |
|
Retained earnings |
|
957,206 |
|
|
|
869,310 |
|
Accumulated other comprehensive loss |
|
(603 |
) |
|
|
(615 |
) |
Total stockholders' equity |
|
1,019,255 |
|
|
|
976,286 |
|
Total liabilities, redeemable
noncontrolling interest and stockholders' equity |
$ |
1,368,791 |
|
|
$ |
1,307,975 |
|
CAVCO INDUSTRIES, INC.CONSOLIDATED
STATEMENTS OF INCOME(Dollars in thousands, except per
share amounts)(Unaudited) |
|
|
Three Months Ended |
|
Six Months Ended |
|
September 30,2023 |
|
October 1,2022 |
|
September 30,2023 |
|
October 1,2022 |
Net revenue |
$ |
452,030 |
|
|
$ |
577,392 |
|
|
$ |
927,905 |
|
|
$ |
1,165,730 |
|
Cost of sales |
|
345,073 |
|
|
|
419,793 |
|
|
|
703,069 |
|
|
|
863,407 |
|
Gross profit |
|
106,957 |
|
|
|
157,599 |
|
|
|
224,836 |
|
|
|
302,323 |
|
Selling, general and
administrative expenses |
|
61,506 |
|
|
|
66,894 |
|
|
|
123,186 |
|
|
|
133,030 |
|
Income from operations |
|
45,451 |
|
|
|
90,705 |
|
|
|
101,650 |
|
|
|
169,293 |
|
Interest income |
|
5,812 |
|
|
|
1,851 |
|
|
|
10,430 |
|
|
|
3,165 |
|
Interest expense |
|
(257 |
) |
|
|
(233 |
) |
|
|
(523 |
) |
|
|
(394 |
) |
Other income, net |
|
655 |
|
|
|
488 |
|
|
|
781 |
|
|
|
57 |
|
Income before income taxes |
|
51,661 |
|
|
|
92,811 |
|
|
|
112,338 |
|
|
|
172,121 |
|
Income tax expense |
|
(10,088 |
) |
|
|
(18,613 |
) |
|
|
(24,354 |
) |
|
|
(38,229 |
) |
Net income |
|
41,573 |
|
|
|
74,198 |
|
|
|
87,984 |
|
|
|
133,892 |
|
Less: net income attributable to
redeemable noncontrolling interest |
|
34 |
|
|
|
82 |
|
|
|
88 |
|
|
|
174 |
|
Net income attributable to Cavco
common stockholders |
$ |
41,539 |
|
|
$ |
74,116 |
|
|
$ |
87,896 |
|
|
$ |
133,718 |
|
|
|
|
|
|
|
|
|
Net income per share attributable
to Cavco common stockholders |
|
|
|
|
|
|
|
Basic |
$ |
4.80 |
|
|
$ |
8.32 |
|
|
$ |
10.15 |
|
|
$ |
15.01 |
|
Diluted |
$ |
4.76 |
|
|
$ |
8.25 |
|
|
$ |
10.05 |
|
|
$ |
14.88 |
|
Weighted average shares
outstanding |
|
|
|
|
|
|
|
Basic |
|
8,656,537 |
|
|
|
8,903,703 |
|
|
|
8,663,430 |
|
|
|
8,910,933 |
|
Diluted |
|
8,731,419 |
|
|
|
8,978,997 |
|
|
|
8,742,734 |
|
|
|
8,983,425 |
|
CAVCO INDUSTRIES, INC.OTHER OPERATING
DATA(Dollars in thousands)(Unaudited) |
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
September 30,2023 |
|
October 1,2022 |
|
September 30,2023 |
|
October 1,2022 |
Capital expenditures |
$ |
4,287 |
|
$ |
8,181 |
|
$ |
8,470 |
|
$ |
33,188 |
Depreciation |
$ |
4,275 |
|
$ |
3,836 |
|
$ |
8,449 |
|
$ |
7,274 |
Amortization of other
intangibles |
$ |
393 |
|
$ |
502 |
|
$ |
785 |
|
$ |
1,010 |
For additional
information, contact: |
|
Mark
Fusler |
Corporate Controller and
Investor Relations |
investor_relations@cavco.com |
|
Phone:
602-256-6263 |
On the Internet:
www.cavcoindustries.com |
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