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Cavco Industries Reports Fiscal 2024 Fourth Quarter and Year End Results

Cavco Industries, Inc.
Cavco Industries, Inc.


PHOENIX, May 23, 2024 (GLOBE NEWSWIRE) -- Cavco Industries, Inc. (Nasdaq: CVCO) today announced financial results for the fourth quarter and fiscal year ended March 30, 2024.

Quarterly Highlights

  • Net revenue and Net income of $420 million and $34 million, respectively.

  • Gross profit as a percentage of Net revenue was 23.6% with factory-built housing Gross profit as a percentage of Net revenue at 22.4%, down 170 bps and 200 bps, respectively, from last year's fourth quarter.

  • Net income per diluted share attributable to Cavco common stockholders was $4.03 compared to $5.39 in last year's fourth quarter.

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Full Fiscal Year Highlights

  • Net revenue was $1,795 million, down $348 million or 16.2% compared to $2,143 million last year.

  • Factory-built housing Gross profit as a percentage of Net revenue was 23.2%, compared to 25.3% in the prior year.

  • Income before income taxes was $199 million, down $108 million or 35.2% compared to $307 million in the prior year

  • Net income per diluted share attributable to Cavco common stockholders was $18.37 compared to $26.95 last year.

  • Backlogs at March 30, 2024 were $191 million, up $31 million or 19.4% compared to $160 million three months ago and down from $244 million at April 1, 2023.

  • Stock repurchases were approximately $110 million in the year.

Commenting on the results, Bill Boor, President and Chief Executive Officer, said, "The quarter started with several plants missing operating days due to thin backlogs coming out of the holidays. However, as the quarter progressed, order rates improved and almost all plants were back to 5-day operations."

He continued, "Against the backdrop of higher interest rates and economic challenges, our team continued to deliver solid margins and cash flow. During the year, we significantly increased capacity through the successful integration of the Solitaire acquisition and the Hamlet and Glendale plant startups; we expanded our retail distribution footprint; we rolled out our new Anthem series, the first nationally available HUD-approved manufactured duplex; and we responsibly managed our balance sheet with approximately $110 million of share repurchases. Affordable housing remains a pressing need and our ability to provide affordable homes for families has never been stronger."

Three months ended March 30, 2024 compared to three months ended April 1, 2023

 

Three Months Ended

 

 

 

 

($ in thousands, except revenue per home sold)

March 30,
2024

 

April 1,
2023

 

Change

Net revenue

 

 

 

 

 

 

 

Factory-built housing

$

398,493

 

$

456,058

 

$

(57,565

)

 

(12.6

)%

Financial services

 

21,625

 

 

20,322

 

 

1,303

 

 

6.4

%

 

$

420,118

 

$

476,380

 

$

(56,262

)

 

(11.8

)%

 

 

 

 

 

 

 

 

Factory-built modules sold

 

6,231

 

 

7,236

 

 

(1,005

)

 

(13.9

)%

 

 

 

 

 

 

 

 

Factory-built homes sold (consisting of one or more modules)

 

3,938

 

 

4,477

 

 

(539

)

 

(12.0

)%

 

 

 

 

 

 

 

 

Net factory-built housing revenue per home sold

$

101,192

 

$

101,867

 

$

(675

)

 

(0.7

)%

  • In the factory-built housing segment, the decrease in Net revenue was primarily due to lower sales volume.

  • Financial services segment Net revenue increased primarily due to more insurance policies in force in the current period compared to the prior year, partially offset by reduced revenue from loan sales.

 

Three Months Ended

 

 

 

 

($ in thousands)

March 30,
2024

 

April 1,
2023

 

Change

Gross profit

 

 

 

 

 

 

 

Factory-built housing

$

89,288

 

 

$

111,355

 

 

$

(22,067

)

 

(19.8

)%

Financial services

 

9,727

 

 

 

9,286

 

 

 

441

 

 

4.7

%

 

$

99,015

 

 

$

120,641

 

 

$

(21,626

)

 

(17.9

)%

 

 

 

 

 

 

 

 

Gross profit as % of Net revenue

 

 

 

 

 

 

 

Consolidated

 

23.6

%

 

 

25.3

%

 

 

N/A

 

 

(1.7

)%

Factory-built housing

 

22.4

%

 

 

24.4

%

 

 

N/A

 

 

(2.0

)%

Financial services

 

45.0

%

 

 

45.7

%

 

 

N/A

 

 

(0.7

)%

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

 

 

 

 

 

Factory-built housing

$

55,937

 

 

$

61,208

 

 

$

(5,271

)

 

(8.6

)%

Financial services

 

5,485

 

 

 

5,181

 

 

 

304

 

 

5.9

%

 

$

61,422

 

 

$

66,389

 

 

$

(4,967

)

 

(7.5

)%

 

 

 

 

 

 

 

 

Income from operations

 

 

 

 

 

 

 

Factory-built housing

$

33,351

 

 

$

50,147

 

 

$

(16,796

)

 

(33.5

)%

Financial services

 

4,242

 

 

 

4,105

 

 

 

137

 

 

3.3

%

 

$

37,593

 

 

$

54,252

 

 

$

(16,659

)

 

(30.7

)%

  • In the factory-built housing segment, Gross profit decreased from lower sales volume. Selling, general and administrative expenses decreased primarily as a result of decreases in non-recurring expenses related to third-party consultants fees for energy efficient home tax credits, lower costs in the current year related to the ongoing litigation between an indemnified former officer and the Securities and Exchange Commission (the "SEC"), Solitaire acquisition costs in the prior year period, as well as lower compensation on reduced earnings.

  • In the financial services segment, Gross profit increased primarily due to higher revenue from more insurance policies in force in the current period compared to the prior year and fewer weather related events compared to the prior year.

 

Three Months Ended

 

 

 

 

 

($ in thousands, except per share amounts)

March 30,
2024

 

April 1,
2023

 

Change

Net income attributable to Cavco common stockholders

$

33,934

 

$

47,312

 

$

(13,378

)

 

(28.3

)%

Diluted net income per share

$

4.03

 

$

5.39

 

$

(1.36

)

 

(25.2

)%

Items ancillary to our core operations had the following impact on the results of operations:

 

 

Three Months Ended

($ in millions)

March 30,
2024

 

April 1,
2023

Net revenue

Unrealized gains recognized during the period on marketable equity securities held in the financial services segment

$

0.9

 

 

$

0.4

 

Selling, general and administrative expenses

Expenses incurred in engaging third-party consultants in relation to the non-recurring energy efficient home tax credits

 

 

 

 

(2.2

)

Legal and other expense related to the SEC inquiry, including indemnified costs of a former officer

 

(0.4

)

 

 

(1.9

)

Acquisition related transaction costs

 

 

 

 

(1.9

)

Other income, net

Corporate unrealized gains recognized during the period on securities held

 

 

 

 

2.0

 

Income tax expense

Energy efficient home tax credits, net

 

 

 

 

3.0

 

Tax benefits from stock option exercises

 

0.2

 

 

 

0.5

 

Year ended March 30, 2024 compared to the year ended April 1, 2023

 

Year Ended

 

 

 

 

($ in thousands, except revenue per home sold)

March 30,
2024

 

April 1,
2023

 

Change

Net revenue

 

 

 

 

 

 

 

Factory-built housing

$

1,716,607

 

$

2,069,450

 

$

(352,843

)

 

(17.1

)%

Financial services

 

78,185

 

 

73,263

 

 

4,922

 

 

6.7

%

 

$

1,794,792

 

$

2,142,713

 

$

(347,921

)

 

(16.2

)%

 

 

 

 

 

 

 

 

Factory-built modules sold

 

27,355

 

 

32,885

 

 

(5,530

)

 

(16.8

)%

 

 

 

 

 

 

 

 

Factory-built homes sold (consisting of one or more modules)

 

16,928

 

 

19,376

 

 

(2,448

)

 

(12.6

)%

 

 

 

 

 

 

 

 

Net factory-built housing revenue per home sold

$

101,406

 

$

106,805

 

$

(5,399

)

 

(5.1

)%

  • In the factory-built housing segment, the year-over-year decrease in Net revenue was primarily due to lower home sales volume and lower selling prices, partially offset by full year activity from the Solitaire Homes acquisition compared to only three months of activity in the prior year.

  • Financial services segment Net revenue increased year-over-year primarily due to more insurance policies in force in the current year compared to the prior year, partially offset by reduced revenue from loan sales.

 

Year Ended

 

 

 

 

($ in thousands)

March 30,
2024

 

April 1,
2023

 

Change

Gross profit

 

 

 

 

 

 

 

Factory-built housing

$

398,919

 

 

$

523,529

 

 

$

(124,610

)

 

(23.8

)%

Financial services

 

27,983

 

 

 

31,403

 

 

 

(3,420

)

 

(10.9

)%

 

$

426,902

 

 

$

554,932

 

 

$

(128,030

)

 

(23.1

)%

 

 

 

 

 

 

 

 

Gross profit as % of Net revenue

 

 

 

 

 

 

 

Consolidated

 

23.8

%

 

 

25.9

%

 

 

N/A

 

 

(2.1

)%

Factory-built housing

 

23.2

%

 

 

25.3

%

 

 

N/A

 

 

(2.1

)%

Financial services

 

35.8

%

 

 

42.9

%

 

 

N/A

 

 

(7.1

)%

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

 

 

 

 

 

Factory-built housing

$

226,267

 

 

$

237,898

 

 

$

(11,631

)

 

(4.9

)%

Financial services

 

21,653

 

 

 

20,425

 

 

 

1,228

 

 

6.0

%

 

$

247,920

 

 

$

258,323

 

 

$

(10,403

)

 

(4.0

)%

 

 

 

 

 

 

 

 

Income from operations

 

 

 

 

 

 

 

Factory-built housing

$

172,652

 

 

$

285,631

 

 

$

(112,979

)

 

(39.6

)%

Financial services

 

6,330

 

 

 

10,978

 

 

 

(4,648

)

 

(42.3

)%

 

$

178,982

 

 

$

296,609

 

 

$

(117,627

)

 

(39.7

)%

  • In the factory-built housing segment, Gross profit decreased from lower home sales and lower selling prices. Selling, general and administrative expenses decreased as a result of lower incentive compensation on reduced sales.

  • In the financial services segment, Gross profit decreased primarily due to higher weather related insurance claims and reduced revenue from loan sales.

 

Year Ended

 

 

 

 

 

($ in thousands, except per share amounts)

March 30,
2024

 

April 1,
2023

 

Change

Net income attributable to Cavco common stockholders

$

157,817

 

$

240,554

 

$

(82,737

)

 

(34.4

)%

Diluted net income per share

$

18.37

 

$

26.95

 

$

(8.58

)

 

(31.8

)%

Items ancillary to our core operations had the following impact on the results of operations:

 

 

Year Ended

($ in millions)

March 30,
2024

 

April 1,
2023

Net revenue

Unrealized gains (losses) recognized during the period on securities held in the financial services segment

$

1.3

 

 

$

(0.1

)

Selling, general and administrative expenses

 

 

Expenses incurred in engaging third-party consultants in relation to the non-recurring energy efficient home tax credits

 

 

 

 

(7.3

)

Legal and other expense related to the SEC inquiry, net of recovery

 

(3.4

)

 

 

(5.5

)

Acquisition transaction costs

 

 

 

 

(2.5

)

Other income, net

Gains recognized during the period on corporate securities

 

0.3

 

 

 

0.8

 

Income tax expense

Energy efficient home tax credits, net

 

 

 

 

8.1

 

Tax benefits from stock option exercises

 

1.3

 

 

 

0.9

 

Conference Call Details

Cavco's management will hold a conference call to review these results tomorrow, May 24, 2024 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 60 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

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that are not historical facts. These forward-looking statements reflect Cavco’s current expectations and projections with respect to our expected future business and financial performance, including, among other things: (i) expected financial performance and operating results, such as revenue and gross margin percentage; (ii) our liquidity and financial resources; (iii) our outlook with respect to the Company and the manufactured housing business in general; (iv) the expected effect of certain risks and uncertainties on our business; and (iv) the strength of Cavco’s business model. These statements may be preceded by, followed by, or include the words "aim," "anticipate," "believe," "estimate," "expect," "forecast," "future," "goal," "intend," "likely," "outlook," "plan," "potential," "project," "seek," "target," "can," "could," "may," "should," "would," "will," the negatives thereof and other words and terms of similar meaning. A number of factors could cause actual results or outcomes to differ materially from those indicated by these forward-looking statements. These factors include, among other factors, Cavco’s ability to manage: (i) customer demand and the availability of financing for our products; (ii) labor shortages and the pricing, availability, or transportation of raw materials; (iii) the impact of local or national emergencies; (iv) excessive health and safety incidents or warranty and construction claims; (v) increases in cancellations of home sales; (vi) information technology failures or cyber incidents; (vii) our ability to maintain the security of personally identifiable information of our customers, (viii) comply with the numerous laws and regulations applicable to our business, including state, federal, and foreign laws relating manufactured housing, privacy, the internet, and accounting matters; (ix) successfully defend against litigation, government inquiries, and investigations, and (x) other risks and uncertainties indicated from time to time in documents filed or to be filed with the Securities and Exchange Commission (the "SEC") by Cavco. The forward-looking statements herein represent the judgment of Cavco as of the date of this release and Cavco disclaims any intent or obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments, or otherwise. This press release should be read in conjunction with the information included in the Company's other press releases, reports, and other 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. Understanding the information contained in these filings is important in order to fully understand Cavco’s reported financial results and our business outlook for future periods.

CAVCO INDUSTRIES, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share amounts)

 

 

March 30,
2024

 

April 1,
2023

ASSETS

(Unaudited)

 

 

Current assets

 

 

 

Cash and cash equivalents

$

352,687

 

 

$

271,427

 

Restricted cash, current

 

15,481

 

 

 

11,728

 

Accounts receivable, net

 

77,123

 

 

 

89,347

 

Short-term investments

 

18,270

 

 

 

14,978

 

Current portion of consumer loans receivable, net

 

20,713

 

 

 

17,019

 

Current portion of commercial loans receivable, net

 

40,787

 

 

 

43,414

 

Current portion of commercial loans receivable from affiliates, net

 

2,529

 

 

 

640

 

Inventories

 

241,339

 

 

 

263,150

 

Prepaid expenses and other current assets

 

82,870

 

 

 

92,876

 

Total current assets

 

851,799

 

 

 

804,579

 

Restricted cash

 

585

 

 

 

335

 

Investments

 

17,316

 

 

 

18,639

 

Consumer loans receivable, net

 

23,354

 

 

 

27,129

 

Commercial loans receivable, net

 

45,660

 

 

 

53,890

 

Commercial loans receivable from affiliates, net

 

2,065

 

 

 

4,033

 

Property, plant and equipment, net

 

224,199

 

 

 

228,278

 

Goodwill

 

121,934

 

 

 

114,547

 

Other intangibles, net

 

28,221

 

 

 

29,790

 

Operating lease right-of-use assets

 

39,027

 

 

 

26,755

 

Total assets

$

1,354,160

 

 

$

1,307,975

 

LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST, AND STOCKHOLDERS' EQUITY

 

 

 

Current liabilities

 

 

 

Accounts payable

$

33,531

 

 

$

30,730

 

Accrued expenses and other current liabilities

 

239,736

 

 

 

262,661

 

Total current liabilities

 

273,267

 

 

 

293,391

 

Operating lease liabilities

 

35,148

 

 

 

21,678

 

Other liabilities

 

7,759

 

 

 

7,820

 

Deferred income taxes

 

4,575

 

 

 

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 9,389,953 and 9,337,125 shares, respectively; Outstanding 8,320,718 and 8,665,324 shares, respectively

 

94

 

 

 

93

 

Treasury stock, at cost; 1,069,235 and 671,801 shares, respectively

 

(274,693

)

 

 

(164,452

)

Additional paid-in capital

 

281,216

 

 

 

271,950

 

Retained earnings

 

1,027,127

 

 

 

869,310

 

Accumulated other comprehensive loss

 

(333

)

 

 

(615

)

Total stockholders' equity

 

1,033,411

 

 

 

976,286

 

Total liabilities, redeemable noncontrolling interest and stockholders' equity

$

1,354,160

 

 

$

1,307,975

 

 


CAVCO INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per share amounts)

(Unaudited)

 

 

Three Months Ended

 

Year Ended

 

March 30,
2024

 

April 1,
2023

 

March 30,
2024

 

April 1,
2023

Net revenue

$

420,118

 

 

$

476,380

 

 

$

1,794,792

 

 

$

2,142,713

 

Cost of sales

 

321,103

 

 

 

355,739

 

 

 

1,367,890

 

 

 

1,587,781

 

Gross profit

 

99,015

 

 

 

120,641

 

 

 

426,902

 

 

 

554,932

 

Selling, general and administrative expenses

 

61,422

 

 

 

66,389

 

 

 

247,920

 

 

 

258,323

 

Income from operations

 

37,593

 

 

 

54,252

 

 

 

178,982

 

 

 

296,609

 

Interest income

 

5,334

 

 

 

3,933

 

 

 

20,998

 

 

 

10,679

 

Interest expense

 

(284

)

 

 

(300

)

 

 

(1,649

)

 

 

(910

)

Other income, net

 

292

 

 

 

676

 

 

 

849

 

 

 

385

 

Income before income taxes

 

42,935

 

 

 

58,561

 

 

 

199,180

 

 

 

306,763

 

Income tax expense

 

(9,001

)

 

 

(11,201

)

 

 

(41,275

)

 

 

(65,922

)

Net income

 

33,934

 

 

 

47,360

 

 

 

157,905

 

 

 

240,841

 

Less: net income attributable to redeemable noncontrolling interest

 

 

 

 

48

 

 

 

88

 

 

 

287

 

Net income attributable to Cavco common stockholders

$

33,934

 

 

$

47,312

 

 

$

157,817

 

 

$

240,554

 

 

 

 

 

 

 

 

 

Net income per share attributable to Cavco common stockholders

 

 

 

 

 

 

 

Basic

$

4.07

 

 

$

5.45

 

 

$

18.55

 

 

$

27.20

 

Diluted

$

4.03

 

 

$

5.39

 

 

$

18.37

 

 

$

26.95

 

Weighted average shares outstanding

 

 

 

 

 

 

 

Basic

 

8,338,595

 

 

 

8,683,376

 

 

 

8,506,673

 

 

 

8,844,326

 

Diluted

 

8,428,613

 

 

 

8,781,079

 

 

 

8,591,911

 

 

 

8,924,452

 

 


CAVCO INDUSTRIES, INC.

OTHER OPERATING DATA

(Dollars in thousands)

(Unaudited)

 

 

Three Months Ended

 

Year Ended

 

March 30,
2024

 

April 1,
2023

 

March 30,
2024

 

April 1,
2023

Capital expenditures

$

4,184

 

$

3,256

 

$

17,421

 

$

44,106

Depreciation

$

4,279

 

$

4,170

 

$

16,956

 

$

14,833

Amortization of other intangibles

$

392

 

$

559

 

$

1,569

 

$

2,070


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