Cavco Industries, Inc. announced financial results for the fourth quarter and fiscal year ended April 2, 2022 and provided updates on other business items. The current fiscal year includes 52 weeks while fiscal year 2021 contained 53 weeks, with the extra week falling in the fourth quarter.
On September 24, 2021, Cavco completed the acquisition of certain assets and liabilities of The Commodore Corporation (“Commodore”), which operates six manufacturing plants and two retail locations. Since the acquisition date, the results of Commodore are included in Cavco’s consolidated financial statements.
Quarterly Highlights
- Record breaking Net revenue and Net income of $505 million and $54 million, respectively.
- Gross profit as a percentage of Net revenue increased to 25.6% with factory-built housing gross profit as a percentage of Net revenue at 24.5%, up 390 bps from last year’s fourth quarter.
- Earnings per diluted share was $5.80 compared to $2.71 in last year’s fourth quarter.
- Factory utilization exceeded 80%.
- Backlogs were $1.1 billion at April 2, 2022, compared to $603 million at April 3, 2021, of which Commodore contributed $264 million of the year over year growth. Backlog levels in the fourth fiscal quarter were consistent with the third quarter.
- Returned nearly $31 million to shareholders through stock repurchases.
Full Fiscal Year Highlights
- Twelfth straight year of revenue and earnings growth, growing Net revenue 47% and Income before income taxes 119%.
- Gross profit as a percentage of Net revenue increased 350 bps to 25.1%, with factory-built housing gross profit as a percentage of Net revenue increasing 470 bps to 23.9%.
- Earnings per diluted share was $21.34 compared to $8.25 last year. This year was favorably impacted by $3.28 from non-recurring energy efficient home tax credits, which was discussed in the third quarter.
- Demonstrated commitment to its capital allocation strategy by delivering on its three established priorities:
- Invested in organic growth, including the expansion of existing manufacturing facility capacity, a new park model facility in Glendale, Arizona and a new HUD manufacturing facility in Hamlet, North Carolina
- Added 6 new manufacturing facilities through the acquisition of Commodore
- Returned nearly $60 million to shareholders through stock repurchases.
“We are extremely proud of the successful year that all of our operations have had. Our manufacturing teams have found innovative ways to increase manufacturing output and efficiencies, and plant for plant, we are producing more homes than before the pandemic, despite continuing labor and supply challenges. We also continue to deliver on projects designed to further expand our manufacturing capabilities, including two new manufacturing facilities that are expected to open later this year,” said Bill Boor, President and Chief Executive Officer.
Mr. Boor continued, “Demand for our homes continues to be strong, despite the recent rise in interest rates. As an affordable home builder, we can provide the potential of home ownership that many people aspire to achieve. With these rising interest rates and other inflationary pressures, we believe that our products become more attractive to other forms of home ownership. That is why we continually strive to increase the number of homes we build and deliver on our commitment to provide high-quality, energy-efficient and affordable homes to our customers.”
On May 25, 2022, the Company’s Board of Directors approved a new $100 million stock repurchase program that may be used to purchase its outstanding common stock. The previous program that was approved on October 27, 2020 has now been fully utilized, with the remaining $39 million being repurchased in the first quarter of fiscal year 2023.
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. 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.
“When the previous authorization was announced, we said that it would not limit our strategic investments. We are pleased to have now returned $100 million of value directly to our stockholders in a little over a year, while investing approximately $200 million into growing and improving our operations,” said Mr. Boor. He continued, “As before, our priorities for capital remain unchanged. This newly authorized plan will allow us to continue to return value to our shareholders without compromising our ability to create long-term value, as we still seek out additional investment opportunities.”
Learn more here.
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. It is one of the largest producers of manufactured and modular homes in the United States, based on reported wholesale shipments.
Its products are marketed under a variety of brand names including Cavco, Fleetwood, Palm Harbor, Nationwide, Fairmont, Friendship, Chariot Eagle, Destiny, Commodore, Colony, Pennwest, R-Anell, Manorwood and MidCountry. It is also a leading producer of park model RVs, vacation cabins, and factory-built commercial structures.