Third Quarter Summary
- Net revenue was $447 million, down
$54 million or 10.8% compared to $501 million in the third quarter of the prior year. - Factory-built housing Gross profit as a percentage of Net revenue was 22.4%, compared to 25.5% in the prior year.
- Financial services Gross profit as a percentage of Net revenue was 36.8%, compared to 46.6% in the prior year.
- Income before income taxes was $44 million, down
$32 million or 42.1% compared to $76 million in the prior year period. - Net income per diluted share attributable to Cavco common stockholders was
$4.27 compared to$6.66 in the prior year quarter. - Backlogs totaled $160 million at the end of the quarter, with modules in backlog growing 3% from the September quarter. Due to a decrease in backlog average selling price, the backlog value was down $10 million, or 5.9%, sequentially from $170 million.
- Stock repurchases were approximately
$50 million in the quarter.
Commenting on the quarter, President and Chief Executive Officer
He continued, "Our continuing strong cash flow has enabled us to remain focused on the underlying critical need for quality, affordable homes. To that end, in December we were excited to announce our new Anthem series, the first nationally available HUD-approved manufactured duplex. This is a great example of how we are working with developers and community operators on innovative solutions to improve housing affordability."
Financial Results
Three Months Ended | ||||||||||||||
($ in thousands, except revenue per home sold) | 2023 | 2022 | Change | |||||||||||
Net revenue | ||||||||||||||
Factory-built housing | $ | 426,939 | $ | 481,193 | $ | (54,254 | ) | (11.3 | )% | |||||
Financial services | 19,830 | 19,410 | 420 | 2.2 | % | |||||||||
$ | 446,769 | $ | 500,603 | $ | (53,834 | ) | (10.8 | )% | ||||||
Factory-built modules sold | 6,806 | 7,544 | (738 | ) | (9.8 | )% | ||||||||
Factory-built homes sold (consisting of one or more modules) | 4,160 | 4,442 | (282 | ) | (6.3 | )% | ||||||||
Net factory-built housing revenue per home sold | $ | 102,630 | $ | 108,328 | $ | (5,698 | ) | (5.3 | )% | |||||
Nine Months Ended | ||||||||||||||
($ in thousands, except revenue per home sold) | 2023 | 2022 | Change | |||||||||||
Net revenue | ||||||||||||||
Factory-built housing | $ | 1,318,114 | $ | 1,613,392 | $ | (295,278 | ) | (18.3 | )% | |||||
Financial services | 56,560 | 52,941 | 3,619 | 6.8 | % | |||||||||
$ | 1,374,674 | $ | 1,666,333 | $ | (291,659 | ) | (17.5 | )% | ||||||
Factory-built modules sold | 21,124 | 25,649 | (4,525 | ) | (17.6 | )% | ||||||||
Factory-built homes sold (consisting of one or more modules) | 12,990 | 14,899 | (1,909 | ) | (12.8 | )% | ||||||||
Net factory-built housing revenue per home sold | $ | 101,471 | $ | 108,289 | $ | (6,818 | ) | (6.3 | )% |
- In the factory-built housing segment, the decrease in Net revenue for the three and nine 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 nine months from 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) | 2023 | 2022 | Change | |||||||||||
Gross profit | ||||||||||||||
Factory-built housing | $ | 95,756 | $ | 122,923 | $ | (27,167 | ) | (22.1 | )% | |||||
Financial services | 7,295 | 9,045 | (1,750 | ) | (19.3 | )% | ||||||||
$ | 103,051 | $ | 131,968 | $ | (28,917 | ) | (21.9 | )% | ||||||
Gross profit as % of Net revenue | ||||||||||||||
Consolidated | 23.1 | % | 26.4 | % | N/A | (3.3 | )% | |||||||
Factory-built housing | 22.4 | % | 25.5 | % | N/A | (3.1 | )% | |||||||
Financial services | 36.8 | % | 46.6 | % | N/A | (9.8 | )% | |||||||
Selling, general and administrative expenses | ||||||||||||||
Factory-built housing | $ | 57,854 | $ | 54,127 | $ | 3,727 | 6.9 | % | ||||||
Financial services | 5,458 | 4,777 | 681 | 14.3 | % | |||||||||
$ | 63,312 | $ | 58,904 | $ | 4,408 | 7.5 | % | |||||||
Income from operations | ||||||||||||||
Factory-built housing | $ | 37,902 | $ | 68,796 | $ | (30,894 | ) | (44.9 | )% | |||||
Financial services | 1,837 | 4,268 | (2,431 | ) | (57.0 | )% | ||||||||
$ | 39,739 | $ | 73,064 | $ | (33,325 | ) | (45.6 | )% | ||||||
Nine Months Ended | ||||||||||||||
($ in thousands) | 2023 | 2022 | Change | |||||||||||
Gross profit | ||||||||||||||
Factory-built housing | $ | 309,631 | $ | 412,174 | $ | (102,543 | ) | (24.9 | )% | |||||
Financial services | 18,256 | 22,117 | (3,861 | ) | (17.5 | )% | ||||||||
$ | 327,887 | $ | 434,291 | $ | (106,404 | ) | (24.5 | )% | ||||||
Gross profit as % of Net revenue | ||||||||||||||
Consolidated | 23.9 | % | 26.1 | % | N/A | (2.2 | )% | |||||||
Factory-built housing | 23.5 | % | 25.5 | % | N/A | (2.0 | )% | |||||||
Financial services | 32.3 | % | 41.8 | % | N/A | (9.5 | )% | |||||||
Selling, general and administrative expenses | ||||||||||||||
Factory-built housing | $ | 170,330 | $ | 176,690 | $ | (6,360 | ) | (3.6 | )% | |||||
Financial services | 16,168 | 15,244 | 924 | 6.1 | % | |||||||||
$ | 186,498 | $ | 191,934 | $ | (5,436 | ) | (2.8 | )% | ||||||
Income from operations | ||||||||||||||
Factory-built housing | $ | 139,301 | $ | 235,484 | $ | (96,183 | ) | (40.8 | )% | |||||
Financial services | 2,088 | 6,873 | (4,785 | ) | (69.6 | )% | ||||||||
$ | 141,389 | $ | 242,357 | $ | (100,968 | ) | (41.7 | )% |
- In the factory-built housing segment, Gross profit as a percent of Net revenue for the three and nine 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 months ended was negatively impacted by reduced loan sales. The nine months were negatively affected by lower loan sales and higher insurance claims from weather related events.
- Selling, general and administrative expenses increased for the three months primarily as a result of higher legal expenses and the added cost of Solitaire operations (acquired fourth quarter of fiscal 2023), partially offset by lower incentive compensation on reduced sales. For the nine months, Selling, general and administrative expenses decreased primarily as a result of lower incentive compensation on reduced sales, partially offset by the addition of Solitaire.
Three Months Ended | ||||||||||||||
($ in thousands, except per share amounts) | 2023 | 2022 | Change | |||||||||||
Net income attributable to Cavco common stockholders | $ | 35,987 | $ | 59,524 | $ | (23,537 | ) | (39.5 | )% | |||||
Diluted net income per share | $ | 4.27 | $ | 6.66 | $ | (2.39 | ) | (35.9 | )% | |||||
Nine Months Ended | ||||||||||||||
($ in thousands, except per share amounts) | 2023 | 2022 | Change | |||||||||||
Net income attributable to Cavco common stockholders | $ | 123,883 | $ | 193,242 | $ | (69,359 | ) | (35.9 | )% | |||||
Diluted net income per share | $ | 14.34 | $ | 21.55 | $ | (7.21 | ) | (33.5 | )% | |||||
Items ancillary to our core operations had the following impact on the results of operations:
Three Months Ended | Nine Months Ended | |||||||||||||||
($ in millions) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Net revenue | ||||||||||||||||
Unrealized gains (losses) recognized during the period on securities held in the financial services segment | $ | 0.4 | $ | 0.7 | $ | 0.4 | $ | (0.5 | ) | |||||||
Selling, general and administrative expenses | ||||||||||||||||
Expenses incurred in engaging third-party consultants in relation to the non-recurring energy efficient home tax credits | — | (0.6 | ) | — | (5.1 | ) | ||||||||||
Legal and other expense related to the | (2.0 | ) | (0.8 | ) | (3.0 | ) | (3.6 | ) | ||||||||
Other income expense, net | ||||||||||||||||
Corporate unrealized gains (losses) recognized during the period on securities held | 0.2 | (0.1 | ) | 0.3 | (1.2 | ) | ||||||||||
2024 Stock Repurchase Program
On
The purchases may be made in the open market or one or more privately negotiated transactions in compliance with applicable securities laws and other legal requirements. While there is no expiration date, the actual timing, number and value of shares repurchased under the program will be determined by the Company in its discretion and will depend on a number of factors, including market conditions, applicable legal requirements and other strategic capital needs and opportunities. The plan does not obligate Cavco to acquire any particular amount of common stock and may be suspended or discontinued at any time. The Company expects to finance the program from existing cash resources.
Conference Call Details
Cavco's management will hold a conference call to review these results tomorrow,
About Cavco
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
CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except per share amounts) | |||||||
2023 | 2023 | ||||||
ASSETS | (Unaudited) | ||||||
Current assets | |||||||
Cash and cash equivalents | $ | 352,808 | $ | 271,427 | |||
Restricted cash, current | 13,215 | 11,728 | |||||
Accounts receivable, net | 70,501 | 89,347 | |||||
Short-term investments | 16,819 | 14,978 | |||||
Current portion of consumer loans receivable, net | 11,855 | 17,019 | |||||
Current portion of commercial loans receivable, net | 48,817 | 43,414 | |||||
Current portion of commercial loans receivable from affiliates, net | 2,135 | 640 | |||||
Inventories | 236,649 | 263,150 | |||||
Prepaid expenses and other current assets | 80,248 | 92,876 | |||||
Total current assets | 833,047 | 804,579 | |||||
Restricted cash | 585 | 335 | |||||
Investments | 16,099 | 18,639 | |||||
Consumer loans receivable, net | 24,279 | 27,129 | |||||
Commercial loans receivable, net | 38,836 | 53,890 | |||||
Commercial loans receivable from affiliates, net | 2,784 | 4,033 | |||||
Property, plant and equipment, net | 224,216 | 228,278 | |||||
120,744 | 114,547 | ||||||
Other intangibles, net | 28,613 | 29,790 | |||||
Operating lease right-of-use assets | 37,393 | 26,755 | |||||
Total assets | $ | 1,326,596 | $ | 1,307,975 | |||
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST, AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities | |||||||
Accounts payable | $ | 23,928 | $ | 30,730 | |||
Accrued expenses and other current liabilities | 247,244 | 262,661 | |||||
Total current liabilities | 271,172 | 293,391 | |||||
Operating lease liabilities | 33,285 | 21,678 | |||||
Other liabilities | 7,651 | 7,820 | |||||
Deferred income taxes | 5,788 | 7,581 | |||||
Redeemable noncontrolling interest | — | 1,219 | |||||
Stockholders' equity | |||||||
Preferred stock, | — | — | |||||
Common stock, | 94 | 93 | |||||
(262,072 | ) | (164,452 | ) | ||||
Additional paid-in capital | 277,847 | 271,950 | |||||
Retained earnings | 993,193 | 869,310 | |||||
Accumulated other comprehensive loss | (362 | ) | (615 | ) | |||
Total stockholders' equity | 1,008,700 | 976,286 | |||||
Total liabilities, redeemable noncontrolling interest and stockholders' equity | $ | 1,326,596 | $ | 1,307,975 |
CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share amounts) (Unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
Net revenue | $ | 446,769 | $ | 500,603 | $ | 1,374,674 | $ | 1,666,333 | |||||||
Cost of sales | 343,718 | 368,635 | 1,046,787 | 1,232,042 | |||||||||||
Gross profit | 103,051 | 131,968 | 327,887 | 434,291 | |||||||||||
Selling, general and administrative expenses | 63,312 | 58,904 | 186,498 | 191,934 | |||||||||||
Income from operations | 39,739 | 73,064 | 141,389 | 242,357 | |||||||||||
Interest income | 5,234 | 3,581 | 15,664 | 6,746 | |||||||||||
Interest expense | (842 | ) | (216 | ) | (1,365 | ) | (610 | ) | |||||||
Other (expense) income, net | (224 | ) | (348 | ) | 557 | (291 | ) | ||||||||
Income before income taxes | 43,907 | 76,081 | 156,245 | 248,202 | |||||||||||
Income tax expense | (7,920 | ) | (16,492 | ) | (32,274 | ) | (54,721 | ) | |||||||
Net income | 35,987 | 59,589 | 123,971 | 193,481 | |||||||||||
Less: net income attributable to redeemable noncontrolling interest | — | 65 | 88 | 239 | |||||||||||
Net income attributable to Cavco common stockholders | $ | 35,987 | $ | 59,524 | $ | 123,883 | $ | 193,242 | |||||||
Net income per share attributable to Cavco common stockholders | |||||||||||||||
Basic | $ | 4.31 | $ | 6.71 | $ | 14.47 | $ | 21.72 | |||||||
Diluted | $ | 4.27 | $ | 6.66 | $ | 14.34 | $ | 21.55 | |||||||
Weighted average shares outstanding | |||||||||||||||
Basic | 8,358,389 | 8,870,565 | 8,561,209 | 8,897,405 | |||||||||||
Diluted | 8,432,471 | 8,936,075 | 8,640,288 | 8,969,104 |
OTHER OPERATING DATA (Dollars in thousands) (Unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
Capital expenditures | $ | 4,767 | $ | 7,662 | $ | 13,237 | $ | 40,850 | |||||||
Depreciation | $ | 4,228 | $ | 3,389 | $ | 12,677 | $ | 10,663 | |||||||
Amortization of other intangibles | $ | 392 | $ | 501 | $ | 1,177 | $ | 1,511 |
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 |
Source:
2024 GlobeNewswire, Inc., source