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Cavco Industries Reports Fiscal 2016 Fourth Quarter and Year End Results

PHOENIX, May 26, 2016 (GLOBE NEWSWIRE) -- Cavco Industries, Inc. (Nasdaq:CVCO) today announced financial results for the fourth quarter and fiscal year ended April 2, 2016. The financial statements include the operations of two regional manufactured home builders acquired during the first quarter of fiscal 2016: Chariot Eagle, which primarily produces park model RVs; and Fairmont Homes, a premier builder of manufactured and modular homes and park model RVs.

Financial highlights include the following:

  • Net revenue for the fourth quarter of fiscal year 2016 totaled $177.3 million, up 25.6% from $141.2 million for the fourth quarter of fiscal year 2015. Net revenue for fiscal year 2016 was $712.4 million, 25.7% higher than $566.7 million for the prior fiscal year. The increase was from homes sold by newly acquired businesses this fiscal year and higher home sales volume at pre-existing operations.

  • Income before income taxes was $10.9 million for the fourth quarter of fiscal 2016, a 19.8% increase over $9.1 million reported in last year's fourth fiscal quarter. For the fiscal year ended April 2, 2016, income before income taxes increased 22.6% to $44.0 million as compared to the prior fiscal year's income before income taxes, as adjusted to exclude a net gain from asset sales, of $35.9 million.

  • Net income was $7.0 million for the fourth quarter of fiscal year 2016, compared to $6.0 million reported in the same quarter of the prior year, a 16.7% increase. For the fiscal year ended April 2, 2016, net income was $28.5 million, up 24.5% from adjusted net income of $22.9 million for the year ended March 28, 2015.

  • Net income per share for the fourth quarter of fiscal 2016, based on basic and diluted weighted average shares outstanding, was $0.78 and $0.77, respectively, versus $0.67 and $0.66, respectively for the quarter ended March 28, 2015. Net income per share for the year ended April 2, 2016, based on basic and diluted weighted average shares outstanding, was $3.21 and $3.15, respectively, versus adjusted basic and diluted net income per share of $2.59 and $2.54, respectively, for the prior year.

Adjusted amounts described above relate to a net gain of $1.4 million on the sale of idle properties recorded in Other income, net during the year ended March 28, 2015. These adjustments are reconciled to the relevant U.S. generally accepted accounting principles ("GAAP") financial measures in the tables at the end of this press release.

Commenting on the earnings release, Joseph Stegmayer, Chairman, President and Chief Executive Officer said, "We are pleased to report year-over-year improvement in our financial results this quarter. With Cavco's broad market reach and expanded line of manufactured home products, we look forward to the traditionally stronger spring and summer selling season that has already begun. The Company is well positioned to take advantage of reported overall demand growth for new single family homes."

In addition, Cavco was recently honored as 2016’s Manufacturer of the Year by the Manufactured Housing Institute, as voted by its peers, for the seventh consecutive year. Mr. Stegmayer concluded, "Receiving the MHI Manufacturer of the Year award from our industry peers is an extreme honor. This award is a testament to our associates’ commitment to product innovation, quality and high customer satisfaction. We believe that homebuyers look for value and long term enjoyment when selecting their home. The Cavco companies have spent more than 60 years creating a brand dedicated to delivering quality, value and exceptional customer service."

Cavco’s management will hold a conference call to review these results tomorrow, May 27, 2016, at 1:00 PM (Eastern Daylight Time). Interested parties can access a live webcast of the conference call on the Internet at www.cavco.com under the Investor Relations link. An archive of the webcast and presentation will be available for 90 days at www.cavco.com under the Investor Relations link.

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 Homes, Fleetwood Homes, Palm Harbor Homes, Fairmont Homes and Chariot Eagle. 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 Custom Homes brand. Cavco’s mortgage subsidiary, CountryPlace Mortgage, is an approved Fannie Mae and Freddie Mac seller/servicer, a Ginnie Mae mortgage backed securities issuer and offers conforming mortgages and chattel loans to purchasers of factory-built and site-built homes. Its insurance subsidiary, Standard Casualty, provides property and casualty insurance to owners of manufactured homes.

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: adverse industry conditions; our ability to successfully integrate past acquisitions, including the recent acquisitions of Fairmont Homes and Chariot Eagle, and any future acquisition or 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; a constrained consumer financing market; curtailment of available financing for retailers in the manufactured housing industry; our participation in certain wholesale and retail financing programs for the purchase of our products by industry distributors and consumers 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 declining housing demand; 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; 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 continued turmoil in the credit markets; increased costs of healthcare benefits for employees; governmental and regulatory disruption; information technology failures and data security breaches; extensive regulation affecting manufactured housing; 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 2015 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 any reliance on any such forward-looking statements.

/EIN News/ --


CAVCO INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amounts)
 
  April 2,
 2016
  March 28,
 2015
ASSETS (Unaudited)    
Current assets:      
Cash and cash equivalents $ 97,766     $ 96,597  
Restricted cash, current 10,218     9,997  
Accounts receivable, net 29,113     26,994  
Short-term investments 10,140     7,106  
Current portion of consumer loans receivable, net 21,918     24,073  
Current portion of commercial loans receivable, net 3,557     2,330  
Inventories 94,813     75,334  
Prepaid expenses and other current assets 22,196     14,460  
Deferred income taxes, current 8,998     8,573  
Total current assets 298,719     265,464  
Restricted cash 1,082     1,081  
Investments 28,948     24,813  
Consumer loans receivable, net 67,640     74,085  
Commercial loans receivable, net 21,985     15,751  
Property, plant and equipment, net 55,072     44,712  
Goodwill and other intangibles, net 80,389     76,676  
Total assets $ 553,835     $ 502,582  
LIABILITIES AND STOCKHOLDERS’ EQUITY      
Current liabilities:      
Accounts payable $ 18,513     $ 17,805  
Accrued liabilities 100,314     77,076  
Current portion of securitized financings and other 6,262     6,590  
Total current liabilities 125,089     101,471  
Securitized financings and other 54,909     60,370  
Deferred income taxes 20,611     20,587  
Stockholders’ equity:      
Preferred stock, $.01 par value; 1,000,000 shares authorized; No shares issued          
or outstanding      
Common stock, $.01 par value; 40,000,000 and 20,000,000 shares authorized,           
respectively; Outstanding 8,927,989 and 8,859,199 shares, respectively 89     89  
Additional paid-in capital 241,662     237,916  
Retained earnings 110,186     81,645  
Accumulated other comprehensive income 1,289     504  
Total stockholders’ equity 353,226     320,154  
Total liabilities and stockholders’ equity $ 553,835     $ 502,582  







CAVCO INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in thousands, except per share amounts)
(Unaudited)
 
  Three Months Ended   Year Ended
  April 2,
 2016
  March 28,
 2015
  April 2,
 2016
  March 28,
 2015
Net revenue $ 177,293     $ 141,248     $ 712,352     $ 566,659  
Cost of sales 140,627     110,228     567,907     440,523  
Gross profit 36,666     31,020     144,445     126,136  
Selling, general and administrative expenses 25,145     21,184     98,103     87,659  
Income from operations 11,521     9,836     46,342     38,477  
Interest expense (1,139 )   (1,155 )   (4,363 )   (4,587 )
Other income, net 519     452     2,049     3,437  
Income before income taxes 10,901     9,133     44,028     37,327  
Income tax expense (3,913 )   (3,180 )   (15,487 )   (13,510 )
Net income 6,988     5,953     28,541     23,817  
               
Comprehensive income:              
Net income $ 6,988     $ 5,953     $ 28,541     $ 23,817  
Unrealized gain on available-for-sale                       
securities, net of tax 1,527     102     785     68  
Comprehensive income 8,515     6,055     29,326     23,885  
               
Net income per share attributable to Cavco              
common stockholders:              
Basic $ 0.78     $ 0.67     $ 3.21     $ 2.69  
Diluted $ 0.77     $ 0.66     $ 3.15     $ 2.64  
Weighted average shares outstanding:              
Basic 8,913,460     8,859,042     8,889,731     8,854,359  
Diluted 9,066,220     9,020,318     9,046,347     9,015,779  








CAVCO INDUSTRIES, INC.
OTHER OPERATING DATA
(Dollars in thousands)
(Unaudited)
 
    Three Months Ended   Year Ended
    April 2,
 2016
  March 28,
 2015
  April 2,
 2016
  March 28,
2015
Net revenue:                
Factory-built housing   $ 162,867     $ 127,416     $ 655,148     $ 513,707  
Financial services   14,426     13,832     57,204     52,952  
Total net revenue   $ 177,293     $ 141,248     $ 712,352     $ 566,659  
                 
Capital expenditures   $ 1,072     $ 527     $ 3,519     $ 2,210  
Depreciation   $ 969     $ 582     $ 3,468     $ 2,378  
Amortization of other intangibles   $ 37     $ 345     $ 454     $ 1,379  
                 
Total factory-built homes sold   2,960     2,556     12,339     9,999  






CAVCO INDUSTRIES, INC.

NON-GAAP FINANCIAL MEASURES
(Unaudited)

We prepare our financial statements in accordance with GAAP. Within this press release, we make reference to adjusted income before income taxes, adjusted net income, and adjusted net income per share, which are non-GAAP financial measures. The Company believes that these non-GAAP financial measures are useful to investors because they allow evaluation of the financial results of the Company excluding the impact of certain items and facilitate comparisons of prior periods. These measures should be reviewed in conjunction with the relevant GAAP financial measures and are not presented as alternative measures. These measures, excluding certain items affecting comparability, may not be comparable to similarly titled measures reported by other companies.

During the twelve months ended March 28, 2015, the Company sold the idle Woodland, California production facility for $4.7 million and the idle Albemarle, North Carolina facility for $0.9 million, and two idle retail locations, resulting in an aggregate net gain of $1.4 million.

Income before income taxes

    Twelve Months Ended
    April 2, 2016   March 28, 2015
Income before income taxes   $ 44,028     $ 37,327  
Exclude: Net gain on sale of idle properties       (1,430 )
Adjusted income before income taxes   $ 44,028     $ 35,897  



Net income

    Twelve Months Ended
    April 2, 2016   March 28, 2015
Net income   $ 28,541     $ 23,817  
Exclude: Net gain on sale of idle properties, net of income taxes       (912 )
Adjusted net income   $ 28,541     $ 22,905  



Net income per share

    Twelve Months Ended
    April 2, 2016   March 28, 2015
Basic net income per share   $ 3.21     $ 2.69  
Exclude: Net gain on sale of idle properties, per basic share       (0.10 )
Adjusted basic net income per share   $ 3.21     $ 2.59  


    Twelve Months Ended
    April 2, 2016   March 28, 2015
Diluted net income per share   $ 3.15     $ 2.64  
Exclude: Net gain on sale of idle properties, per diluted share       (0.10 )
Adjusted diluted net income per share   $ 3.15     $ 2.54  


 

For additional information, contact:

Dan Urness
CFO and Treasurer
danu@cavco.com

Phone: 602-256-6263
On the Internet: www.cavco.com

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