Cavco Industries, Inc. on Thursday announced its financial results for the third fiscal quarter ended January 1, 2022 and provided updates on other business items.
On September 24, 2021, Cavco completed the acquisition of certain assets and liabilities of The Commodore Corporation, 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 $432 million and $80 million, respectively, of which Commodore contributed $73 million and $2 million, respectively. Net income was favorably impacted by a $29.9 million net benefit primarily from estimated non-recurring tax credits for the construction of energy-efficient homes over an approximately five-year period.
- Gross profit as a percentage of Net revenue increased to 26.7% with factory-built housing gross profit as a percentage of Net revenue at 25.2%, a 110 basis point improvement sequentially from the prior quarter ended October 2, 2021.
- Earnings per diluted share was $8.57 compared to $2.12 in last year’s third quarter. This quarter was favorably impacted by $3.23 from non-recurring energy-efficient home tax credits.
- Factory utilization improved to approximately 80%, consistent with pre-pandemic levels.
- Backlogs were $1.1 billion at the end of the quarter, consistent with the prior quarter ended October 2, 2021 and up $633 million from a year ago. Commodore contributed $277 million of this year-over-year growth.
- Returned nearly $9 million to shareholders through stock repurchases, with $29 million repurchased through the fiscal year to date.
Commenting on the quarter, Bill Boor, President and Chief Executive Officer said, “Our record third-quarter results reflect strength in manufactured housing demand as well as our ability to increase home production, improving our plant utilization to pre-pandemic levels of approximately 80%. While we still face labor and supply challenges, our production improvement is directly attributable to the innovation of our team members who are completing homes in a more efficient manner.”
Mr. Boor continued, “Demand for our products remains strong, with order rates above 2019 levels. Demographics, long-term undersupply, rising home prices and upward interest rate pressure are all intensifying the need for affordable housing. That is why we continue to invest in production capacity, through our previously announced Glendale, Arizona greenfield project and ongoing investment in many of our existing plants.
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Update on New Park Model Facility in Arizona
We continue to make progress on the new Glendale, Arizona facility that focuses on park model production and is expected to begin operations in the mid-calendar year 2022.
Conference Call Details
Cavco’s management will hold a conference call to review these results tomorrow, February 4, 2022, 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 at + 1 (844) 348-1686 (domestic) or + 1 (213) 358-0891 (international). An archive of the webcast and presentation will be available for 90 days at https://investor.cavco.com.
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. Our 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.
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.