Cavco Industries Reports Fiscal 2020 First Quarter Results

Phoenix, Arizona, UNITED STATES

PHOENIX, July 29, 2019 (GLOBE NEWSWIRE) -- Cavco Industries, Inc. (Nasdaq: CVCO) today announced financial results for the first fiscal quarter ended June 29, 2019.

Financial highlights include the following:

  • Net revenue for the first quarter of fiscal year 2020 was $264.0 million, up 7.1% from $246.4 million for the first quarter of fiscal year 2019. The increase was primarily from higher home selling prices and changes in product mix.

  • Income before income taxes increased 13.7% to $27.4 million for the first quarter of fiscal year 2020 compared to $24.1 million in the same quarter last year. During the period, the Company experienced higher gross profit margins from increased home selling prices coupled with lower material input costs.

  • Income tax expense was $6.1 million, an effective tax rate of 22.2%, for the first quarter of fiscal year 2020 compared to $4.4 million and an effective tax rate of 18.4% in the same quarter of the prior year. The lower effective tax rate in the prior year primarily relates to greater tax benefits from stock option exercises, as illustrated below.

  • Net income increased 8.1% to $21.3 million for the first quarter of fiscal year 2020, from $19.7 million in the same quarter of the prior year. Diluted net income per share was $2.31 for the three months ended June 29, 2019, compared to $2.12 for the comparable period last year.

During each period presented, ancillary items had the following impact on the results of operations (in millions):

  Three Months Ended
June 29, 2019
 Three Months Ended
June 30, 2018
Selling, general and administrative expenses  
 Amortization of additional director and officer insurance premiums $(2.1) $ 
 Legal and other expenses related to the Company's response to the Securities and Exchange Commission inquiry (0.8)  
Other income, net  
 Unrealized gains on corporate equity securities 0.9  1.5 
Income tax expense  
 Tax benefits from stock option exercises 0.6  1.2 

Commenting on the quarter, Bill Boor, President and Chief Executive Officer said, "Both our factory-built housing and financial services businesses have delivered another quarter of strong and growing financial results. From an industry perspective, the homebuying ability of our customers continues to be supported by positive economic drivers, including consumer confidence, growth in jobs and wages, low unemployment and ongoing efforts to advance financing options. Given this positive macroeconomic backdrop, we are optimistic about the demand dynamics for affordable housing and our ability to compete effectively in this market. As we have discussed previously, there are isolated geographic areas, particularly the South Central and South Eastern United States, experiencing some softness in factory orders. That said, our overall backlog is healthy at seven weeks of production."

Mr. Boor continued, "Our gross margins have remained strong this quarter. The Company maintained effective home pricing strategies while continuing to benefit from generally lower commodity prices. Our home sales order backlog has stabilized at $131 million at the end of the quarter compared to $129 million at the end of last quarter. We believe we are in a solid position to produce strong results throughout fiscal year 2020."

Cavco’s management will hold a conference call to review these results tomorrow, July 30, 2019, at 1:00 PM (Eastern Time). Interested parties can access a live webcast of the conference call on the Internet at An archive of the webcast and presentation will be available for 90 days at

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. The Company is one of the largest producers of manufactured homes in the United States, based on reported wholesale shipments, marketed under a variety of brand names including Cavco, Fleetwood, Palm Harbor, Fairmont, Friendship, Chariot Eagle and Lexington. The Company is also a leading producer of park model RVs, vacation cabins and systems-built commercial structures, as well as modular homes built primarily under the Nationwide Homes brand. 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 within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities and Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. 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 and site-built housing industries; 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: our ability to successfully integrate past acquisitions or future acquisitions and the ability to attain the anticipated benefits of such acquisitions; the risk that any past or future acquisition may adversely impact our liquidity; involvement in vertically integrated lines of business, including manufactured housing consumer finance, commercial finance and insurance; information technology failures or cyber incidents; curtailment of available financing from home-only lenders; availability of wholesale financing and limited floor plan lenders; our participation in certain wholesale and retail financing programs for the purchase of our products by industry distributors and consumers, which may expose us to additional risk of credit loss; significant warranty and construction defect claims; our contingent repurchase obligations related to wholesale financing; market forces and housing demand fluctuations; net losses were incurred in certain prior periods and there can be no assurance that we will generate income in the future; a write-off of all or part of our goodwill; the cyclical and seasonal nature of our business; limitations on our ability to raise capital; competition; our ability to maintain relationships with independent distributors; our business and operations being concentrated in certain geographic regions; labor shortages and the pricing and availability of raw materials; unfavorable zoning ordinances; loss of any of our executive officers; organizational document provisions delaying or making a change in control more difficult; volatility of stock price; general deterioration in economic conditions and turmoil in the credit markets; governmental and regulatory disruption, including federal government shutdowns; extensive regulation affecting manufactured housing; potential financial impact on the Company from the subpoenas we received from the SEC, including the risk of potential litigation or regulatory action, and costs and expenses arising from the SEC subpoenas and the events described in or covered by the SEC subpoenas, which include the Company's indemnification obligations and insurance costs regarding such matters, and potential reputational damage that the Company may suffer; and losses not covered by our director and officer insurance may be large, adversely impacting financial performance; together with all of the other risks described in our filings with the Securities and Exchange Commission. Readers are specifically referred to the Risk Factors described in Item 1A of the 2019 Form 10-K, as may be amended from time to time, 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. Investors should not place undue reliance on any such forward-looking statements.

(Dollars in thousands, except share amounts)

 June 29,
 March 30,
Current assets:   
Cash and cash equivalents$199,820  $187,370 
Restricted cash, current12,853  12,148 
Accounts receivable, net41,952  40,701 
Short-term investments13,230  12,620 
Current portion of consumer loans receivable, net31,035  30,058 
Current portion of commercial loans receivable, net16,693  15,234 
Inventories118,532  116,203 
Assets held for sale3,030  3,061 
Prepaid expenses and other current assets41,903  44,654 
Total current assets479,048  462,049 
Restricted cash351  351 
Investments32,533  32,137 
Consumer loans receivable, net54,946  56,727 
Commercial loans receivable, net29,965  27,772 
Property, plant and equipment, net64,376  63,484 
Goodwill and other intangibles, net82,616  82,696 
Operating lease right-of-use assets12,248   
Total assets$756,083  $725,216 
Current liabilities:   
Accounts payable$24,816  $29,305 
Accrued liabilities130,371  125,181 
Current portion of securitized financings and other20,143  19,522 
Total current liabilities175,330  174,008 
Operating lease liabilities9,260   
Deferred income taxes6,957  7,002 
Securitized financings and other14,199  14,618 
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; Outstanding 9,111,624 and 9,098,320 shares, respectively91  91 
Additional paid-in capital248,825  249,447 
Retained earnings301,360  280,078 
Accumulated other comprehensive income (loss)61  (28)
Total stockholders’ equity550,337  529,588 
Total liabilities and stockholders’ equity$756,083  $725,216 

(Dollars in thousands, except per share amounts)

 Three Months Ended
 June 29,
 June 30,
Net revenue$264,042  $246,403 
Cost of sales203,744  194,927 
Gross profit60,298  51,476 
Selling, general and administrative expenses35,264  29,213 
Income from operations25,034  22,263 
Interest expense(486) (972)
Other income, net2,814  2,845 
Income before income taxes27,362  24,136 
Income tax expense(6,080) (4,445)
Net income$21,282  $19,691 
Net income per share:   
Basic$2.34  $2.18 
Diluted$2.31  $2.12 
Weighted average shares outstanding:   
Basic9,102,685  9,048,579 
Diluted9,217,599  9,267,048 

(Dollars in thousands)

 Three Months Ended
 June 29,
 June 30,
Net revenue:   
Factory-built housing$248,768  $232,762 
Financial services15,274  13,641 
Total net revenue$264,042  $246,403 
Gross profit:   
Factory-built housing$52,135  $43,886 
Financial services8,163  7,590 
Total gross profit$60,298  $51,476 
Income before income taxes:   
Factory-built housing$24,313  $21,608 
Financial services3,049  2,528 
Total income before income taxes$27,362  $24,136 
Capital expenditures$2,063  $1,679 
Depreciation$1,160  $1,020 
Amortization of other intangibles$80  $84 
Total factory-built homes sold3,807  3,887 

For additional information, contact: 
Mark Fusler
Director of Financial Reporting and Investor Relations
Phone: 602-256-6263
On the Internet: