PHOENIX – 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.
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.
(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
*
(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
