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4 days ago
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- Yahoo
Fleetwood Homes now operating as Cavco-Waco
WACO, Texas (FOX 44) – Waco mobile home dealer Fleetwood Homes is now operating as Cavco-Waco. The company says this comes as part of a broader brand realignment by parent company Cavco Industries. The shift reflects the company's nationwide strategy to simplify the homebuying process and to strengthen recognition of its affordable housing solutions across the country. According to Cavco President and CEO Bill Boor, the name unification was driven by a desire to make homebuying easier for customers. Cavco-Waco employs approximately 200 people in the local community, while Cavco Industries supports approximately 800 across its locations in Seguin, Austin, Fort Worth and Presidio. The company is located at 2801 Gholson Road in Waco, and is among 31 Cavco-owned manufacturers and builders of manufactured homes who have adopted the company's national brand name. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Yahoo
24-05-2025
- Business
- Yahoo
Q4 2025 Cavco Industries Inc Earnings Call
Mark Fusler; Investor Relations; Cavco Industries Inc William Boor; President, Chief Executive Officer, Director; Cavco Industries Inc Allison Aden; Chief Financial Officer, Executive Vice President, Treasurer; Cavco Industries Inc Paul Bigbee; Chief Accounting Officer; Cavco Industries Inc Justin Ages; Analyst; CJS Securities Greg Palm; Analyst; Craig-Hallum Capital Group Jay McCanless; Analyst; Wedbush Jesse Lederman; Analyst; Zelman & Associates Operator Good day, and thank you for standing by. Welcome to the Cavco Industries fourth-quarter 2025 earnings call. (Operator Instructions) Please be advised that today's conference is being recorded. I would now like to hand the conference over to Mark Fusler, Corporate Controller and Investor Relations. Please go ahead. Mark Fusler Good day and thank you for joining us for Cavco Industries fourth quarter and fiscal year 2025 earnings conference call. During this call, you'll be hearing from Bill Boor, President and Chief Executive Officer; Allison Aden, Executive Vice President and Chief Financial Officer; and Paul Bigbee, Chief Accounting we begin, we'd like to remind you that comments made during this conference call by management may contain forward-looking statements and non-GAAP financial measures. Forward-looking statements include statements about our expected future business and financial performance and are not promises or guarantees of future performance. They are expectations or assumptions about Cavco's financial and operational performance, revenues, earnings per share, cash flow or use, cost savings, operational efficiencies, current or future volatility in the credit markets or future credit forward-looking statements involve risks and uncertainties, which could affect Cavco's actual results and could cause its actual results to differ materially from those expressed in any forward-looking statements made by or on behalf of Cavco. For a discussion of material risks and important factors that could affect our actual results, please refer to those contained in our filings with the SEC, which are also available on our Investor Relations website and at appendix to our press release also contains reconciliations of our non-GAAP financial metrics to the most comparable GAAP measure. This conference call also contains time-sensitive information that is accurate only as of the date of this live broadcast, Friday, May 23, 2025, and Cavco undertakes no obligation to revise or update any forward-looking statement, whether written or oral, to reflect events or circumstances after the date of this conference call, except as required by law. Now I'd like to turn the call over to Bill Boor, President and Chief Executive Officer. Bill? William Boor Thanks, Mark. Welcome, and thank you for joining us today to review our fourth quarter results. Seasonally, the fourth quarter ushers in the spring selling season. In our last call, we've talked about the steady increase in orders over several quarters through calendar 2024 and how that has enabled us to increase production rates where our plants had supporting quarter-to-quarter trend of increasing orders continued in Q4, boosted by a pickup in March. This was after unusually challenging weather in February slowed installations in the field and caused some unplanned downtime in several plants. Harsh February weather is obviously expected in Northern states, but the weather across the South was we lost 24 operating days across our system. The good news is the weather backs up installations and shipments, but it doesn't negate in March, we saw the expected spring pickup to close out a solid quarter. More generally, a lot of economic uncertainty entered the mix in Q4. However, March's uptick indicates that our buyers are out there trying to purchase new homes. Overall, our unit shipments were up almost 29% year over backlog was down sequentially. To dissect that a bit, backlogs were expected to be down in January. They continued to decline in February for the reasons outlined earlier. And then we saw a healthy increase in March. While there is a range in the individual plants, across the system, we have 5 to 7 weeks of activity across the retail channels is generally positive, and our plants are either holding production levels or looking to increase depending on their specific market conditions. Earlier in Q4, we announced that we renamed our manufacturing plants to the Cavco name. This is part of a rebranding of our homes under product lines that tie directly to the characteristics of the homes rather than the legacy brands of the new and cohesive branding approach will make it easier for homebuyers to quickly narrow their home search to the product lines that match their needs. Clearly, this change will better leverage all of the work we've done in digital marketing over the past few years and will benefit our dealers with improved leads from plant investments and marketing improvements have Cavco ready to continue ramping shipments through both industry growth and market share gains. Our steady strategic investment through the downturn in both acquisitions and plant improvements has meaningfully grown our peak-to-peak capacity. This consistent investment has been enabled by strong cash generation and our debt-free balance we've continued investing strategically, we've also continued our four-plus year buyback program. This quarter, we repurchased about $33 million of stock. Cumulatively, since the initial repurchase authorization in fiscal 2021, we bought back 15.5% of our outstanding shares. We continue to be confident that we can repurchase shares without hindering any strategic opportunities. With that, I'd like to hand it over to Allison to provide more details around the fourth-quarter results. Allison Aden Thank you, Bill. Net revenue for the fourth fiscal quarter of 2025 was $508.4 million, up $88.2 million or 21% compared to $420.1 million during the prior year. Sequentially, net revenue decreased $13.7 million, driven by a decline in average revenue per home sold. Within the factory-built housing segment, net revenue was $487.9 million, up $89.4 million or 22.4% from $398.5 million in the prior year quarter. The increase was primarily due to a 28.5% increase in homes sold, partially offset by a 4.7% decline in average revenue per home decrease in average revenue per home was primarily due to a lower proportion of homes sold through our company-owned stores, product pricing decreases and more single wides in the mix. Factory utilization for Q4 of 2025 was approximately between 70% to 75% when considering all available production was approximately 60% in Q4 of the prior year. Financial services segment net revenue was $20.5 million, down $1.1 million or 5.2% from $21.6 million in the prior year. This decline was due to fewer loan sales and fewer insurance policies in force, partially offset by higher insurance premium gross margin in the fourth quarter as a percentage of net revenue was 22.8%, down 80 basis points from 23.6% in the same period last year. In the factory-built housing segment, the gross profit decreased 10 basis points to 22.3% in Q4 2025 versus 22.4% in Q4 of 2024, driven by lower average selling services gross margin as a percentage of revenue decreased to 36.8% in Q4 of 2025 from 45% in Q4 of 2024, primarily due to reduced revenue from loan sales. Selling, general, and administrative expenses in the fourth quarter of 2025 were $77.5 million or 15.2% of net revenue compared to $61.4 million or 14.6% of net revenue during the same quarter last increase in SG&A was primarily due to a $10 million write-off of intangible trade name values due to our brand realignment Additionally, compensation increased as a result of higher bonuses and commission expenses on higher earnings compared to the prior year profit was flat at $42.9 million this quarter compared to the prior year quarter. The effective income tax rate was 15.4% for the fourth quarter compared to 21% in the same period last year. The decrease in the effective tax rate was due to higher Energy Star tax credits and greater tax benefits from stock option income was $36.3 million compared to net income of $33.9 million in the same quarter of the prior year, and diluted earnings per share this quarter was $4.47 versus $4.03 in last year's fourth quarter. Adjusting for expenses associated with our brand realignment, adjusted net income was $43.9 million compared to $33.9 million with adjusted diluted EPS of $5.40 per share versus $4.03 per share in last year's fourth the quarter, we also repurchased $33.2 million of common shares, and during the full year, we repurchased $150 million of shares. Also, the Board of Directors recently extended the authorization by an additional $150 million, reflecting confidence in our strong cash generation, leaving approximately $228 million under authorization for future share repurchases. Now I'll turn it over to Paul to discuss the balance sheet. Paul Bigbee Thanks, Allison. In the quarter, we had a decrease in cash and restricted cash of $3.3 million, bringing our balance to $375.3 million. Cash provided by operating activities was $38.7 million, partially impacted by the increase of current liabilities and accounts receivable. Cash used in investing activities was $10.1 million and cash used in financing activities was $31.9 million, primarily due to share the March 29, 2025, balance sheet to March 30, 2024, the increase in accounts receivable is related to organic growth in the factory-built housing segment. Unit shipments are up 28.5% in the fourth quarter of fiscal 2025 compared to a year ago. The increase in short-term consumer loans receivables due to higher origination of loans held for sale in excess of actual increased from higher finished goods inventory at company-owned retail lots due to increased demand as well as higher raw material purchases to support increased production. Goodwill and intangibles decreased from the $10 million write-off of intangible trade name values. Current liabilities are up from increased compensation and bonus accruals and higher earnings, increased insurance loss reserves and higher customer treasury stock increased $150 million due to buybacks executed in fiscal year 2025. With that, I'll turn it back to Bill. William Boor Okay. Thank you, Paul. Liz, let's go ahead and open up the line for questions. Operator (Operator Instructions) Daniel Moore, CJS Securities. Justin Ages Hi, good morning. This is Justin on for Dan. Can you talk about your expectations for production rates for fiscal first quarter relative to the fourth quarter? And then what can you tell us about your discussions with customers in both retail and community markets and the cadence of order rates in April and thus far in May? William Boor Yeah. We don't usually get too far into the current quarter. But I know this when we report on the fourth quarter, quite a bit of time has passed since the quarter end. So I understand the production rate question first. This quarter, we were kind of consistent with the previous quarter, pretty flat in Q4 with Q3. Like I said, the quarter started off kind of expectedly with January. And we knew that we were entering into the year at a higher production rate than the order rates. We talked about that last quarter. That was a decision we made to kind of ramp up in anticipation of the spring selling March picked up. And what I'd say about the current quarter that we're in now, first quarter of the fiscal year, is that April has pretty much been consistent with that March positive trend as far as orders and a little bit of backlog I can give you that much and say that from a production perspective, when we talk to all of our plants, we have a range of backlogs in the plants. And there are some plants that don't have the backlog really to increase production rate at the you really could only put our plants in two categories, those that are holding at this level, anticipating and hoping that they'll get a little backlog and be able to start ramping up, and a good number of our plants that are kind of talking about our next move will be up in production. So we really don't have any that seem to be looking at decreasing production rates for any overall, the bias across our plants is for increasing production rates. And that will be dependent on what the market gives us for sure. You also asked, I think, about the different channels. Retail, the dealers have been pretty solid for quite a while now, and that continues. And communities, almost hate to bring it up because it was such a long discussion, but with communities for a long time, we were kind of held back on order rates as an industry because of inventory challenges and a little bit of hesitance with the seen them continue to, I guess, build back up. They got past the inventory. And now I would say the general feeling is they've moved pretty much back toward their proportionate share of order rates. So we feel good about that too. That's been evolving over quite a bit of really, I think -- and when we talk communities, I always point out, we're talking about both kind of the land lease and rental communities as well as the builder channel. Lumping all those together, they're kind of returning back to their proportionate share of orders, which is a real positive. Justin Ages All right. That's helpful. And then one. more if I could. How should we think about gross margin and operating margins in Q1 and over the next quarters relative to the Q4 results? Allison Aden Yeah, thank you. While we saw some downward impact from reduced average selling prices of our homes, we saw lower input costs and reduced cost on service with our factory-built gross margins declined only really 10 basis points year over year to 22.3%. And what I would say is that this demonstrates a couple of elements that we're going to -- that will determine our future margins in the factory-built housing versus we are seeing regions where pricing is becoming more apparent -- pricing pressures are a little bit more apparent and starting to see some competition in pricing in regions. The second, really, component to look to will be movement in commodities, as you know, can be volatile and hard to predict. It's difficult to say, but we typically see increases this time of the year as builders and wholesalers order for the spring building season. And while prices are trending flat at the moment, there is a possibility of another surge soon, and we'll also have to see how terrace play through.I'll say last point is on the consolidated margins, our consolidated margins also depends on the activity in our financial services segment, most notably in our insurance division. Given the recent activity in that division, while we're making strategic structural changes to limit losses, large storm activity can result in increased claims that could impact margins in the future. That helps? Justin Ages Yeah, very helpful. I appreciate you taking the questions. Thank you. Operator Greg Palm, Craig-Hallum. Greg Palm Yeah, good morning. Thanks. I wanted to just start with a little bit on what you saw in February. You mentioned some lost production days. What states or what regions exactly did you see that? And just to be clear, it was the month of February. Was that right? William Boor Yeah. February was really unusual. I mean, it seems like a long time ago, but February, the weather and it really was kind of, I would say, across the Sunbelt. But to be more precise, I think it really -- Texas got hit with a lot of very unusual weather and the Southeast we did lose -- I mean, really, there's a couple of effects that I talked about briefly in the opening comments. In the field, setups really kind of stopped in a period of time in some of those states where they should have been fine from a weather perspective historically. And then we did lose some time in some of our plants across the Southeast in Texas.I think I've commented that there were about 24 down days across our plants due to just February's weather. And that's pretty unusual. So at that point, we were -- we're always kind of anxious, all of us. I know you guys as well as us are always kind of anxious to see how spring dates up for us. And February made us wait a little bit to really get an indication of that. Does that help, Greg? Greg Palm Yeah. And just to be clear, did that -- I assume that impacted the margin somewhat, but any way to quantify exactly how sort of those lost production days might have impacted factory margins? William Boor Yeah, I think you're directionally -- I'll take a stab at it, but then Allison, maybe you can correct or fill in anything. I think directionally, you're right. We've talked in the past, while we try to keep our -- we focus as an organization on trying to keep our costs as variable as above gross margin, there is a component of sticking cost. And so any time you kind of lose a little bit of volume directionally, there's a downward pressure on gross margin. My sense -- but happy if Allison feels differently, my sense is it probably wasn't a huge impact on our gross margin that we reported. But directionally, it would have been a downward pressure. Is that fair, Allison? Allison Aden Yeah, I think that's balance, Bill. Greg Palm And I guess maybe looking ahead as it relates to the kind of the rebrand, maybe let's unpack or dig into that a little bit more in kind of the, number one, the rationale and maybe the feedback so far and what you really hope to get out of that. William Boor Yeah, I appreciate that question because it's so hard to give this justice and what we try to be pretty concise in our prepared remarks. Just to give you a little bit of history, we've got 31 plants. And for the most part, those plants have come through a number of acquisitions over the years, really dating back to the Fleetwood acquisition, which was, I think, we've done in the past is if we had a plant that came to us through Fleetwood, they were -- they continue to be called the Fleetwood plant in the market. And as a result of that, their products tended to be branded as Fleetwood it didn't matter what they were making. So if they were making a lower-priced product or even if they were making a higher price, no matter what the characteristics of the product was that was coming out of that plant, people would refer to it as a Fleetwood home. And that was fine for a we're getting to the point now where with the investments we've made in online marketing and the opportunity we see to do more national marketing or programs that are national in scope, that started to not work well. We saw the opportunity. And so what we've really done is we said, okay, all of our plants are Cavco whatever products they make, we're really not changing the physical product a given plant makes, but no longer is the name of that product tied to the name of that plant. So now we have product lines which are categories of homes that we make. And they'll be named with that short list of products, think about maybe four product lines across the nation. And those product line names will tie to characteristics of the if it's a high-end customizable higher-priced product, full tape and texture, that will fit into a given product line rather than just having the plant's name associated with it. If it's a lower-priced DOG, gypsum products with less customization, that will be in a different product you can imagine if you're a customer starting your search online, you're going to be looking at trying to figure out, okay, I think I'm in this category of homes. And we're going to be able to more directly help you say, okay, you're looking for this product line, and here are some independent or company dealers that can help you after you're ready to go talk to a it's really going to improve the leads that go to those dealers, and it's going to help the customer quickly -- much more quickly get their search narrowed down to homes that really fit their needs. So this is a big going to allow us to do some interesting things. We've recently introduced some national products that are going to be available in all of our markets because plants in every market can produce those. The ability to do marketing campaigns much more efficiently on has greatly we really think this is going to add a lot of clarity for folks shopping for our homes. It might have been a little long-winded there, Greg, instead of too concise in the opening statements. Does that do a good job of explaining it? Greg Palm Yeah. Makes sense. I will get back in queue. Thanks. Operator Jay McCanless, Wedbush. Jay McCanless Good morning, everyone. Thanks for taking my questions. So digging down on the tariffs, I know during the supply chain days, tankless water heaters were an issue, some other things like that. I guess if you think about your cost of goods sold bucket, your input bucket, is there anything in there that we need to really be concerned about from a tariff perspective? I know now has a plant in Georgia now, so that should, I think, at least protect them partially. But are there any other things in the COGS bucket we need to be keeping an eye on? Allison Aden Jay, if I could, let me just share key points and please jump in where you want to enter your comment. I think there's really three key points as we think about tariffs and how they could impact our business. The first is that many products we use are exempted really from any recent tariffs and that includes US lumber and we've been successful managing tariffs on Canadian lumber that have been in place for several years now. And although a few months ago, there was some discussion around potentially increasing this tariff rate associated with Canadian lumber. Those discussions have now been set aside. So we don't see any incremental impact important to note that we do purchase many lighting, electrical and plumbing components, windows and doors that are sourced from China. And therefore, we do expect to see some impact that could reach between, call it, 5% to 8% of our material costs. And just as a reminder, the material costs are roughly about half of the cost of goods sold. Does that help? Jay McCanless So 5% to 8% on basic 50% of the COGS bucket, is that the way to think about it, Allison? Allison Aden Yeah, that'd be the way to think about it at this point, Jay. William Boor No, it's good to clarify that. I was going to say your question, I'm not sure I'm adding a lot of value. But your question really kind of has two components, right? The cost increase, which Allison covered. And also, are we worried about just supply, just the access to the far, I don't believe we've gotten to the point where we feel like our ability to get the materials we need for a home has been really challenged. I guess the scenario where that might take place is if site building remodel, repair, remodel and our business kind of takes off. But right now, we'll keep our eye on it. But I don't think we have a high degree of concern about just being able to access the materials we need. Jay McCanless Okay, that's great. So my second question, could you talk about where chattel rates are now and what you guys are seeing on credit availability for consumers? Mark Fusler Yeah, I can take the interest rate. We've seen a little bit of a spread start happening with lenders. So right now, the range is about 8% to 9%. But haven't really seen any impact to availability. Jay McCanless Good to hear. And then more of a broad question on the price competition you talked about, Allison, in the prepared remarks. Is it price competition across the Board or is it more focused on lower-priced homes, single wides? Any more detail you can give us on that price competition comment would be helpful. William Boor Yeah, I can jump in there, Allison. I think I wouldn't say in general we're seeing a huge pickup in price competition. There are parts of the country and the one that has stood out for quite a while is Florida where the market has just been it's kind of interesting because you look at the Southeast and speaking over the last really 1 to 2 years, the Southeast has been fairly strong. But then Florida stands out as a very challenging market. And it continues to be it's pretty isolated where we've seen any meaningful price competition. And generally, I'd say we haven't across the country. Your comment or your question really hit on an interesting point. We have seen kind of, particularly this quarter, we've seen kind of the product for product pricing on single wides have a little more pressure than it seems like it is the low end. One that's picking up because we've seen a mix shift towards single wides. But also that's where we've seen a little bit -- relatively a little bit more leakage in product for product pricing. Jay McCanless That's good to know. So more competitive on single-section homes? William Boor We'll keep our eye on that, Jay, because sometimes, and I think we all do this, I know we do it internally. Sometimes we're looking with a magnifying glass at some of these small number changes. We've commented before, if you look back at the cycle that we've been coming out of, this industry pricing has held up pretty well. And for a number of quarters, we've kind of seen the true price, true wholesale same product with its price quarter-to-quarter, it's been a very slow small decline. Jay McCanless Great. Thank you, Bill. Operator Jesse Lederman, Zelman & Associates. Jesse Lederman Thanks for taking my question. Bill, I'd love for you to clarify. You made a comment about April being pretty consistent with March as far as orders. I just want to clarify, are you saying that like from an absolute perspective, April is consistent with March? Or are you saying that the momentum you saw in April -- in March rather has continued into April? Because I would have expected as you continue into the spring selling season and go from March to April, that you would see some lift in activity. So I'm just trying to clarify what you meant earlier. William Boor Yeah. Without parsing it too much, I wasn't trying to imply that it was flat. I was saying that March was an uptick, and April has kind of seasonally been consistent with that uptick. We didn't see a reverse course on the trend. Jesse Lederman Got it. So April, in other words, is following normal seasonality, you would say? Is that right? William Boor I think generally it's fair. Yeah, I'm not trying to be evasive, but again, seasonality is kind of an interesting thing to track too because one year the seasonality looks a little different than the next, but we feel good about April kind of continuing the positive, momentum that we saw in March. Jesse Lederman Okay, great. But even still, it sounds like pricing is flattish, maybe down incrementally on an apples-to-apples basis just because of pressure in some region like Florida specifically. Would you normally see an increase in kind of the spring months as you enter the spring selling season, which is typically stronger from a demand perspective? Or do you not normally have seasonality in pricing from that standpoint? William Boor I don't think we've ever really noted seasonality in pricing because the industry kind of knows what's coming. And so if orders are hard to come by, you might see some price pressure. And if orders are falling pretty good to everyone, you might see it tick it doesn't seem -- this is kind of my sense because it's not something I've looked at that closely. But we don't generally go into a seasonally stronger season and expect to see price jump up, for example. I think it's pretty -- it's not -- pricing does not seem to be seasonal.I think where we are in the pricing is kind of interesting because we've had -- as I said, we've had a number of quarters now. I probably should keep track of the number where we just saw this nice incremental growth in orders quarter-to-quarter. And yet we've continued to see that very slow same-product price leakage, I call it, because it's not really some point, if the market continues to strengthen, that's going to flatten out and maybe increase as we would normally see. But there's always the economic -- macroeconomic risks and interest rates and all those things. And if it reverses the trend that we're kind of seeing in March, April and volume goes down, then you could see continued leakage or even an know it's volatile. It's a cyclical industry. But it's really a question of whether the orders continue to strengthen. And if they do, I think we'll see that pricing at least steady and start to increase. Jesse Lederman Fair enough. Yeah, that makes sense. And then just to clarify, the fiscal 4Q margin did not include yet any impact from tariffs. Is that correct? And if so, when do you expect to see that flow through?In other words, if pricing is relatively stable and then you get kind of a 2% to 3% increase in the overall cost of the home, presumably, margin could come under pressure. Can you talk a little bit more about maybe the timing currently of -- with -- if tariffs were in that 4Q number, and if not, when that may expect to come through? Allison Aden So tariffs really didn't have an impact in Q4. And consistent with the way that we talked about materials working the way through our COGS, from the time that we see the pricing in commodities, the time that it's actually within the cost of goods, it's about 60 to 90 days. So as tariffs just kind of now begin to take effect, it'd probably be another 60 if you put those elements together suggests maybe some limited impact in the end of Q1 and then maybe a little bit heavier impact in Q2. But again, I think we're very keenly focused on a tight level of -- a tight number of products or input costs that it will effect for been very successful in managing supply chain shortages in the past, and we stay keenly aware of and very close to our vendor relationships. So we believe that we're going to be able to be very proactive in the management of the impacts of the tariffs in the quarters to come. Jesse Lederman Awesome. And last 1 for me. Bill, you did a really great job at the House subcommittee hearing last week. It'd be great to just get your thoughts on what you think the key takeaway was from the hearing. And yes, if you could give some color on that, that would be great. Thanks so much. William Boor I appreciate your comments on it. It's -- things happen slowly in that town. And every opportunity is an opportunity for politics to creep in. And I think we saw that even on a discussion about affordable housing, which clearly is something both sides of the aisle agree about trying to improve the supply.I think it was good that the discussion focused on supply. We've talked in the past that if the government steps in and tries to put more money in people's hands to buy homes, to me, that's just inflationary on the price of the doesn't really help the true root cause problem, which is a supply problem. And I think the conversation did focus on supply, which is encouraging. There are two House bills that are in place that I think would be important. I'm not going to go too long on this because I know it's -- I have a risk of doing of them is to clarify HUD as the sole regulator of our industry. And some of you might remember that we've been working through a situation with the Department of Energy, where they've proposed rules on energy efficiency that really weren't well tuned to our processes, and that's created some dysfunction in the regulatory environment. And so getting the HUD clarity that the HUD is the sole regulator, I think, is a big deal, and I do believe there's a good chance that that will happen other is interesting, too, and it's removing the chassis from the definition of a manufactured house under the HUD code. And the way I think about this is pretty simple. We would still make a lot of homes that have a permanent chassis affixed to the home. But just removing that from the definition of a manufactured home just opens up innovation opportunities for our opens up the possibility of more easily being able to do multistory homes. A lot of the innovation that could take place, it opens up the possibility of more easily setting at ground level or at or near ground level and not have any elevation that's required by the chassis in certain ways that we set up homes. And if you think about those kind of opportunities, you start to see the opportunity for product innovation for urban and suburban markets, and that opens up a whole new market opportunity for this those things will not -- I always will caution like, let's say, take the chassis removal. That won't open up opportunities overnight. There's a lot of work that has to happen at the state level once the federal definition has improved. But all of these things are aimed toward more supply of factory-built housing, which is a supply the country needs at the lower end of the affordability I appreciate the question. I try not to ramble on too much, but those are actions. Those are things that are really active right now in Congress. And if we can kind of push them through, I think that's real good momentum for the industry. Jesse Lederman Great to hear. Thanks so much again for all the color. William Boor Thanks, Jesse. Operator Danny Eggerichs, Craig-Hallum Capital Group. Greg Palm Yeah, thanks. I guess just on the tariffs and whether that's on some of the inputs that you alluded to or even something like steel, I guess the question is, how are you and some of your peers acting like? Are there surcharges that are being put in place in case? Or how would you expect to sort of counter if things actually get bad from here? William Boor I'll take a shot at that. We've seen, in some markets, different manufacturers propose that they're going to increase price or add surcharges for the tariffs. And we've seen a lot of manufacturers, including us, saying to our customers, this is happening. So we're not going to try to be preemptive but understand that our pricing is going to be -- it could be more could be week-to-week or we could put a price increase in because of tariffs. So our position has been more skewed toward that of just telling people in an open, transparent way. Just understand that if the tariffs do have a meaningful impact on our cost structure that price could be affected.I don't know if that's helpful in the sense that people can't really plan for it, but we're just setting the stage to try to be very reactive to what the cost structure might be impacted. Now having said that, I've always talked that cost and price in our industry over the years have become more independent in my mind. So whether we can push through a cost increase in a given location is really a function more of the supply-demand dynamics in that I could envision if we see some meaningful impact of tariffs. There will be markets where we can increase price and kind of push it through and try to maintain our margins. But if we have other areas, I mentioned Florida earlier. We've got other areas where the demand is just not there, then the price will probably not be affected by the I hope that's not a nonanswer. But I think people are more in the mode of just being ready to be fluid with this whole situation. And we've seen more with us. And I think also with our competitors, we've seen more open discussion about the potential reality of this and be ready and we have seen a lot of preemptive moves. Greg Palm Yeah. I guess what I was asking is whether you expect to pass it along or take the hit yourself. And the way I understand it is it depends on the market, but for the most part, it sounds like you're still focused on maintaining that margin to some extent. William Boor Yeah. I'm kind of a bit of a Econ101 thinker on a lot of this stuff. And if we have a market that demand is really exceeding supply, then the market price of our homes is going to go up really regardless of what's going on in the cost side. So I really do think of the pricing of our products being somewhat independent from the cost. Greg Palm Yeah, okay. And I guess just maybe a follow-up on just sort of the activity in March or April because I think what you're seeing is definitely quite a bit better than, call it, general housing. So any thoughts on whether that's a byproduct of the customer base, a byproduct of maybe the financing market and it not being as important to manufacturing housing? I'm just curious if you've got any theories why demand is holding up at least better on a relative basis. William Boor And Greg, your question is really in comparison to the site builder dynamics? Greg Palm Correct. William Boor Yeah. I'm saying I'm going to try to keep myself from being long-winded because you guys are hitting on questions I can talk a lot about. I think it's been interesting. And I don't consider myself an expert on this, but I'll give you my view. The site builders actually got a period of a boost when the mortgage lock-in effect on people who already owned houses at 3% rates kept people -- kept previously owned homes or the previously owned home market, the inventory was really so if people needed a new home or needed a home, they're probably going to be buying a new home because that's what was available for a while. Now if you look at the stats on the broader housing market, the average mortgage rate is starting to move up. And we're starting to see more inventory of not new homes in the so it seems to me like they got a period where their market opportunity was expanded by the lack of used homes on the market, and now they're getting kind of compressed back into a more historic proportion of home sales. And so you've seen -- I don't think it's really stopped their market, but you've seen the growth opportunity kind of compress down a little not a subject to those dynamics. Our buyers, I think, are completely -- not completely, but a large segment of our buyers are early about monthly price. Many more historically, a larger proportion of all the manufactured home purchases are new manufactured it really is a different customer base. And it's a different market dynamics. And I don't think we're as affected by the concept of how many days of inventory are there on the market for home sales. So I don't know if that made sense, but I really think the dynamics are completely different. I mean, site builders are growing a bit slower than we are right now because the previously owned homes are coming back on the market and inventory is rising. Operator Jay McCanless, Wedbush. Jay McCanless Two questions for me. The first one, since you talked so much about Florida, could you give us any sense of what Florida is for annual shipments for Cavco or percentage of annual revenue just so we have a sense of what's going on there? William Boor And I'm not sure I have an actual number. I mean, we've got two plants in Florida so you can get a -- if you just do a ratio of 2 out of 31, I think that's at a very high level about rates or the production capacity we have down there. And certainly, the market is not entirely those plants, while they're running with pretty low backlogs and have been for quite a while, their production level is down. But obviously, we haven't shut either one of those lines. So overall, I don't think when you look at it in comparison to the total company, I don't think it's a huge amount. And it's been the case for quite a while. Jay McCanless Okay. That's good to know. And then specifically on OSB prices, we've seen those come down pretty dramatically, and it seems like they keep going down every week. Do you guys expect that to be a tailwind on your first quarter, your second quarter gross margin, just given how much OSB you typically use in a home? Allison Aden I think you're right. We did -- we have seen prices in March reflected kind of a steady demand that's almost back to the lows that we saw in 2020. I'd just say, Jay, from a history and experience perspective, that picture can change pretty quickly. And we do -- going back on my earlier comment, we do typically see increases in builders and wholesaler orders in the spring building season. I think this is just something -- a specific factor we'll have to stay close to. Jay McCanless Okay. Great. Thanks. Appreciate it. Operator That concludes today's question-and-answer session. I'd like to turn the call back to Bill Boor for closing remarks. William Boor In a cyclical industry like ours, clearly, macroeconomic drivers can have a big impact on demand. I mean, we've talked about that a lot in the call. And so we're very focused on the key to success being making real-time adjustments across our system.I think our results continue to reflect both a positive view about the general direction of the industry's volume opportunity, but at the same time, an organization that stays very nimble. And we're able to react accordingly to whatever the market gives feel very well positioned to react to market shifts and to continue to get solid results for our shareholders. I want to thank you for joining us today and for your interest in Cavco. And we look forward to keeping you updated on our progress. Thank you. Operator This concludes today's conference call. Thank you for participating. 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Yahoo
22-05-2025
- Business
- Yahoo
Cavco Industries Reports Fiscal 2025 Fourth Quarter and Year End Results
Net income per diluted share was $4.47 and Adjusted net income (non-GAAP) per diluted share was $5.40 after previously announced non-cash charge PHOENIX, May 22, 2025 (GLOBE NEWSWIRE) -- Cavco Industries, Inc. (Nasdaq: CVCO) today announced financial results for the fourth quarter and fiscal year ended March 29, 2025. Quarterly Highlights Net revenue of $508 million up 21% from $420 million in the prior year quarter. Gross profit as a percentage of Net revenue was 22.8% with factory-built housing Gross profit as a percentage of Net revenue at 22.3%, down 80 basis points ("bps") and 10 bps, respectively, from last year's fourth quarter. Net income and Adjusted net income (non-GAAP)* were $36 million and $44 million, respectively. Net income per diluted share attributable to Cavco common stockholders was $4.47 and Adjusted net income (non-GAAP) per diluted share* was $5.40 compared to $4.03 in last year's fourth quarter. Full Fiscal Year Highlights Net revenue was $2,015 million, up $221 million or 12.3% compared to $1,795 million last year. Factory-built housing Gross profit as a percentage of Net revenue was 22.9%, compared to 23.2% in the prior year. Income before income taxes was $211 million, up $12 million or 6.0% compared to $199 million in the prior year. Net income per diluted share attributable to Cavco common stockholders was $20.71 compared to $18.37 last year. Adjusted net income (non-GAAP) per diluted share* for the year ended was $21.63. Backlogs at March 29, 2025 were $197 million, up from $191 million at March 30, 2024. Stock repurchases were approximately $150 million in the year. On May 20, 2025, the Company's Board of Directors approved an additional $150 million stock repurchase program. Commenting on the results, Bill Boor, President and Chief Executive Officer, said, "A significant pickup in activity in March helped close out a solid quarter after unusually harsh weather across the southern states in February impacted the transition into the Spring selling season. We held production levels throughout the quarter and are well positioned to increase from here as the market allows." He continued, 'As previously announced, in the 4th quarter, we significantly improved our go-to-market position by unifying our 31 manufacturing facilities under the Cavco name. Going forward, national product lines will logically segment our homes based on specific characteristics, simplifying the home search process for our home buyers. All of this leverages our national marketing efforts and the strength we have built in our Cavco name.' *Adjusted net income (non-GAAP) and adjusted net income (non-GAAP) per diluted share exclude a $10.0 million non-cash charge related to the abandonment of indefinite-lived assets associated with the Company's prior brands. See the Exhibit A for the calculation of adjusted results and the manner in which the adjusted measures are determined in this press release. Three months ended March 29, 2025 compared to three months ended March 30, 2024 Three Months Ended ($ in thousands, except revenue per home sold) March 29,2025 March 30,2024 Change Net revenue Factory-built housing $ 487,860 $ 398,493 $ 89,367 22.4 % Financial services 20,498 21,625 (1,127 ) (5.2 ) % $ 508,358 $ 420,118 $ 88,240 21.0 % Factory-built modules sold 8,260 6,231 2,029 32.6 % Factory-built homes sold (consisting of one or more modules) 5,060 3,938 1,122 28.5 % Net factory-built housing revenue per home sold $ 96,415 $ 101,192 $ (4,777 ) (4.7 ) % In the factory-built housing segment, the increase in Net revenue was primarily due to higher sales volume, partially offset by a lower proportion of homes sold through our Company-owned stores, lower average selling price primarily caused by product price decreases, and sales mix. Financial services segment Net revenue decreased primarily due to fewer loan sales in the current period compared to the prior year, partially offset by higher insurance premiums. Three Months Ended ($ in thousands) March 29,2025 March 30,2024 Change Gross profit Factory-built housing $ 108,573 $ 89,288 $ 19,285 21.6 % Financial services 7,544 9,727 (2,183 ) (22.4 ) % $ 116,117 $ 99,015 $ 17,102 17.3 % Gross profit as % of Net revenue Consolidated 22.8 % 23.6 % N/A (0.8 ) % Factory-built housing 22.3 % 22.4 % N/A (0.1 ) % Financial services 36.8 % 45.0 % N/A (8.2 ) % Selling, general and administrative expenses Factory-built housing $ 71,458 $ 55,937 $ 15,521 27.7 % Financial services 6,029 5,485 544 9.9 % $ 77,487 $ 61,422 $ 16,065 26.2 % Income from operations Factory-built housing $ 37,115 $ 33,351 $ 3,764 11.3 % Financial services 1,515 4,242 (2,727 ) (64.3 ) % $ 38,630 $ 37,593 $ 1,037 2.8 % In the factory-built housing segment, Gross profit increased from higher sales volume. Selling, general and administrative expenses increased primarily as a result of a $10.0 million one-time, non-cash charge related to the adjustment of certain legacy brand intangibles due to the consolidation of the Company's brand as well as increased incentive compensation on higher earnings. In the financial services segment, Gross profit decreased primarily due to reduced revenue from loan sales compared to the prior year. Three Months Ended ($ in thousands, except per share amounts) March 29,2025 March 30,2024 Change Net income attributable to Cavco common stockholders $ 36,330 $ 33,934 $ 2,396 7.1 % Diluted net income per share $ 4.47 $ 4.03 $ 0.44 10.9 % Adjusted net income (non-GAAP) attributable to Cavco common stockholders $ 43,900 $ 33,934 $ 9,966 29.4 % Adjusted diluted net income (non-GAAP) per share $ 5.40 $ 4.03 $ 1.37 34.0 % Year ended March 29, 2025 compared to the year ended March 30, 2024 Year Ended ($ in thousands, except revenue per home sold) March 29,2025 March 30,2024 Change Net revenue Factory-built housing $ 1,933,111 $ 1,716,607 $ 216,504 12.6 % Financial services 82,347 78,185 4,162 5.3 % $ 2,015,458 $ 1,794,792 $ 220,666 12.3 % Factory-built modules sold 32,428 27,355 5,073 18.5 % Factory-built homes sold (consisting of one or more modules) 19,753 16,928 2,825 16.7 % Net factory-built housing revenue per home sold $ 97,864 $ 101,406 $ (3,542 ) (3.5 ) % In the factory-built housing segment, the year-over-year increase in Net revenue was primarily due to higher home sales volume, partially offset by lower average selling prices. Financial services segment Net revenue increased year-over-year primarily due to higher insurance premiums in the current year compared to the prior year, partially offset by reduced revenue from loan sales. Year Ended ($ in thousands) March 29,2025 March 30,2024 Change Gross profit Factory-built housing $ 441,796 $ 398,919 $ 42,877 10.7 % Financial services 23,795 27,983 (4,188 ) (15.0 ) % $ 465,591 $ 426,902 $ 38,689 9.1 % Gross profit as % of Net revenue Consolidated 23.1 % 23.8 % N/A (0.7 ) % Factory-built housing 22.9 % 23.2 % N/A (0.3 ) % Financial services 28.9 % 35.8 % N/A (6.9 ) % Selling, general and administrative expenses Factory-built housing $ 253,027 $ 226,267 $ 26,760 11.8 % Financial services 22,288 21,653 635 2.9 % $ 275,315 $ 247,920 $ 27,395 11.0 % Income from operations Factory-built housing $ 188,769 $ 172,652 $ 16,117 9.3 % Financial services 1,507 6,330 (4,823 ) (76.2 ) % $ 190,276 $ 178,982 $ 11,294 6.3 % In the factory-built housing segment, Gross profit increased from higher home sales, partially offset by lower average selling prices. Selling, general and administrative expenses increased as a result of higher incentive compensation on higher sales and a $10.0 million one-time, non-cash charge related to the adjustment of certain legacy brand intangibles due to the consolidation of the Company's brand. In the financial services segment, Gross profit decreased primarily due to higher weather related insurance claims and reduced revenue from loan sales. Year Ended ($ in thousands, except per share amounts) March 29,2025 March 30,2024 Change Net income attributable to Cavco common stockholders $ 171,036 $ 157,817 $ 13,219 8.4 % Diluted net income per share $ 20.71 $ 18.37 $ 2.34 12.7 % Adjusted net income (non-GAAP) attributable to Cavco common stockholders $ 178,606 $ 157,817 $ 20,789 13.2 % Adjusted diluted net income (non-GAAP) per share $ 21.63 $ 18.37 $ 3.26 17.7 % Conference Call Details Cavco's management will hold a conference call to review these results tomorrow, May 23, 2025 at 10:00 a.m. (Eastern Time). Interested parties can access a live webcast of the conference call on the Internet at 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 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. 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) compliance 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) successful defense 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 March 30, 2024 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. For additional information, contact: Mark FuslerCorporate Controller and Investor Relationsinvestor_relations@ Phone: 602-256-6263On the Internet: INDUSTRIES, INC. CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except per share amounts) March 29,2025 March 30,2024 ASSETS (Unaudited) Current assets Cash and cash equivalents $ 356,225 $ 352,687 Restricted cash, current 18,535 15,481 Accounts receivable, net 105,849 77,123 Short-term investments 19,842 18,270 Current portion of consumer loans receivable, net 35,852 20,713 Current portion of commercial loans receivable, net 43,492 40,787 Current portion of commercial loans receivable from affiliates, net 2,881 2,529 Inventories 252,695 241,339 Prepaid expenses and other current assets 74,815 82,870 Total current assets 910,186 851,799 Restricted cash 585 585 Investments 18,067 17,316 Consumer loans receivable, net 20,685 23,354 Commercial loans receivable, net 48,605 45,660 Commercial loans receivable from affiliates, net 4,768 2,065 Property, plant and equipment, net 227,620 224,199 Goodwill 121,969 121,934 Other intangibles, net 16,731 28,221 Operating lease right-of-use assets 35,576 39,027 Deferred income taxes 1,853 — Total assets $ 1,406,645 $ 1,354,160 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 37,195 $ 33,531 Accrued expenses and other current liabilities 265,971 239,736 Total current liabilities 303,166 273,267 Operating lease liabilities 31,538 35,148 Other liabilities 7,359 7,759 Deferred income taxes — 4,575 Total liabilities 342,063 320,749 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 9,436,732 and 9,389,953 shares, respectively; Outstanding 8,008,012 and 8,320,718 shares, respectively 94 94 Treasury stock, at cost; 1,428,720 and 1,069,235 shares, respectively (424,624 ) (274,693 ) Additional paid-in capital 290,940 281,216 Retained earnings 1,198,163 1,027,127 Accumulated other comprehensive income (loss) 9 (333 ) Total stockholders' equity 1,064,582 1,033,411 Total liabilities and stockholders' equity $ 1,406,645 $ 1,354,160 CAVCO INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share amounts) (Unaudited) Three Months Ended Year Ended March 29,2025 March 30,2024 March 29,2025 March 30,2024 Net revenue $ 508,358 $ 420,118 $ 2,015,458 $ 1,794,792 Cost of sales 392,241 321,103 1,549,867 1,367,890 Gross profit 116,117 99,015 465,591 426,902 Selling, general and administrative expenses 77,487 61,422 275,315 247,920 Income from operations 38,630 37,593 190,276 178,982 Interest income 4,533 5,334 21,089 20,998 Interest expense (147 ) (284 ) (517 ) (1,649 ) Other (expense) income, net (93 ) 292 222 849 Income before income taxes 42,923 42,935 211,070 199,180 Income tax expense (6,593 ) (9,001 ) (40,034 ) (41,275 ) Net income 36,330 33,934 171,036 157,905 Less: net income attributable to redeemable noncontrolling interest — — — 88 Net income attributable to Cavco common stockholders $ 36,330 $ 33,934 $ 171,036 $ 157,817 Net income per share attributable to Cavco common stockholders Basic $ 4.53 $ 4.07 $ 20.97 $ 18.55 Diluted $ 4.47 $ 4.03 $ 20.71 $ 18.37 Weighted average shares outstanding Basic 8,015,611 8,338,595 8,157,615 8,506,673 Diluted 8,120,407 8,428,613 8,259,956 8,591,911 CAVCO INDUSTRIES, INC. OTHER OPERATING DATA (Dollars in thousands) (Unaudited) Three Months Ended Year Ended March 29,2025 March 30,2024 March 29,2025 March 30,2024 Capital expenditures $ 6,174 $ 4,184 $ 21,427 $ 17,421 Depreciation $ 4,578 $ 4,279 $ 17,729 $ 16,956 Amortization of other intangibles $ 376 $ 392 $ 1,530 $ 1,569 CAVCO INDUSTRIES, A: Unaudited Non-GAAP Financial Measures - Adjusted Net Income and Adjusted Net Income per Diluted Share(Dollars in thousands)(Unaudited) Use of non-GAAP measures To supplement our financial statements presented in accordance with U.S. generally accepted accounting principles ('GAAP'), we report non-GAAP financial measures such as Adjusted net income and Adjusted net income per diluted share. The $10.0 million non-cash charge relates to the adjustment of certain legacy brand indefinite-lived intangible values due to the unification of the Company's extensive manufacturing brand lineup under the Cavco name. This charge is tax effected and excluded from Adjusted net income and Adjusted earnings per diluted share because it is a non-cash charge that is non-recurring and not indicative of the Company's core operational results. These non-GAAP financial measures are not a substitute for GAAP results and should be considered in conjunction with GAAP results. Three Months Ended Year Ended March 29,2025 March 29,2025 Adjusted net income As reported Net income (GAAP) $ 36,330 $ 171,036 Plus after-tax impact(1)of indefinite lived asset charge 7,570 7,570 Adjusted net income (non-GAAP) $ 43,900 $ 178,606 Earnings per diluted share As reported diluted earnings per share (GAAP) $ 4.47 $ 20.71 After-tax impact of indefinite lived asset charge 0.93 0.92 Adjusted net income (non-GAAP) per diluted share $ 5.40 $ 21.63 (1) The impact to net income reflects the tax effect of the noted item, which is based on the enacted rate in the jurisdiction in which the expense is in to access your portfolio
Associated Press
14-03-2025
- Business
- Associated Press
Cavco Unifies Under a Strong Brand Strategy
Phoenix, Ariz., March 14, 2025 (GLOBE NEWSWIRE) -- FOR IMMEDIATE RELEASE Cavco Unifies Under a Strong Brand Strategy Strategic brand alignment strengthens Cavco's position in the affordable housing market and simplifies the homebuying journey PHOENIX, Ariz., March 14, 2025 (GLOBE NEWSWIRE) – Cavco Industries, Inc. (Nasdaq: CVCO) enters 2025 with momentum – celebrating 60 years of building high-quality, affordable homes and introducing their new tagline, 'Where Exceptional Meets Affordable.' After decades of impressive growth and acquisitions, Cavco remains committed to providing a safe and engaging workplace for its associates, developing innovative products and solving the affordable housing crisis. Building on this momentum, the company is proud to announce that it is unifying its extensive manufacturing brand lineup under the Cavco name, strengthening its national brand identity and recognition. This repositioning leverages the resources, experience and vision of the corporate brand with the unique, local expertise and reputation of the regional manufacturing facilities. Additionally, the company will streamline product segmentation to maximize digital marketing effectiveness and simplify the homebuying process. Moving forward, homes will be identified by defined product lines rather than legacy brand names. This shift ensures prospective homebuyers, dealers, communities and developers can more easily find the right Cavco-built affordable home that meets their needs. This brand and product alignment is the natural next step in the company's development, reinforcing its leadership in the manufactured housing industry. 'With Cavco's growth and our focus on the customer experience, the time is right to rethink how we can improve the customer's ability to quickly focus their home search,' said Bill Boor, Cavco President and CEO. 'This realignment to a single brand that focuses on product characteristics will transform how we go to market across our national manufacturing operation, leveraging our investment in digital marketing and opening new national marketing opportunities. It's a big win for Cavco, our retail partners and most importantly, our homebuyers.' As a result of this strategic brand realignment, Cavco will record a non-cash charge in the fourth quarter of fiscal 2025, impacting pre-tax earnings by approximately $9.9 million and reducing net income by approximately $7.6 million. This reflects the adjustment of legacy intangible brand values. 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. 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.
