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Cavco Industries Reports Fiscal 2017 First Quarter Results

PHOENIX, Aug. 09, 2016 (GLOBE NEWSWIRE) -- Cavco Industries, Inc. (NASDAQ:CVCO) today announced financial results for the first fiscal quarter ended July 2, 2016.

Financial highlights include the following:

  • Net revenue for the first quarter of fiscal year 2017 totaled $185.1 million, up 14.5% from $161.7 million for the first quarter of fiscal year 2016. The increase was primarily from 17.0% higher sales volume, as the Company sold 3,395 homes this quarter compared to 2,902 homes during last year's first fiscal quarter. The current quarter contains one additional month of Fairmont Homes operations versus the same quarter last year, as Fairmont Homes was purchased by the Company on May 1, 2015.
  • Income before income taxes was $8.4 million for the first quarter of fiscal 2017, a 2.3% decrease from $8.6 million income before income taxes in the comparable quarter last year. Income before income taxes in the factory-built housing segment increased $2.7 million over the same period last year. The increase was primarily from improved operating leverage from higher home sales during the quarter. Income before income taxes in the financial services segment, comprised of the mortgage and insurance subsidiaries, decreased $2.9 million from the same period last year. The net decline was directly caused by high claims volume at the Company's insurance subsidiary generated by multiple unusually severe storms in Texas. While claims activity typically spikes in April and May, a prime season for storm activity in the area, the severity and occurrence of hail and wind storms and the damage to insured homes were considerably greater this year as compared to last year. Losses from these events were somewhat mitigated by reinsurance contracts.
  • Net income was $5.4 million for the first quarter of fiscal year 2017, consistent with net income of $5.4 million in the same quarter of the prior year.
  • Net income per share for the first quarter of fiscal 2017, based on basic and diluted weighted average shares outstanding, was $0.61 and $0.60, respectively, consistent with net income per share of $0.61 and $0.60, respectively, for the comparable quarter last year.

Commenting on the results, Joseph Stegmayer, Chairman, President and Chief Executive Officer said, "Overall housing demand continued to improve during the quarter, as reflected in the higher sales volume we are pleased to report. Although significant insurance claims activity from unpredictably extreme weather adversely impacted our financial services segment's results this quarter, the long-term prospects for this business remain positive. We look forward to the improved market opportunities available to our businesses and expect to continue to benefit from them during the fiscal year."

Cavco’s management will hold a conference call to review these results tomorrow, August 10, 2016, at 1:00 PM (Eastern 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, non-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 2016 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.

CAVCO INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amounts)

  July 2,
2016
  April 2,
2016
ASSETS (Unaudited)    
Current assets:      
Cash and cash equivalents $ 102,494     $ 97,766  
Restricted cash, current 10,133     10,218  
Accounts receivable, net 28,329     29,113  
Short-term investments 9,419     10,140  
Current portion of consumer loans receivable, net 22,513     21,918  
Current portion of commercial loans receivable, net 5,037     3,557  
Inventories 94,796     94,813  
Prepaid expenses and other current assets 23,908     22,196  
Deferred income taxes, current 9,216     8,998  
Total current assets 305,845     298,719  
Restricted cash 1,097     1,082  
Investments 29,108     28,948  
Consumer loans receivable, net 65,921     67,640  
Commercial loans receivable, net 22,070     21,985  
Property, plant and equipment, net 56,105     55,072  
Goodwill and other intangibles, net 80,297     80,389  
Total assets $ 560,443     $ 553,835  
LIABILITIES AND STOCKHOLDERS’ EQUITY      
Current liabilities:      
Accounts payable $ 18,952     $ 18,513  
Accrued liabilities 102,703     100,314  
Current portion of securitized financings and other 5,742     6,262  
Total current liabilities 127,397     125,089  
Securitized financings and other 53,725     54,909  
Deferred income taxes 20,678     20,611  
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 shares authorized; Outstanding 8,970,314 and 8,927,989 shares, respectively 90     89  
Additional paid-in capital 241,690     241,662  
Retained earnings 115,629     110,186  
Accumulated other comprehensive income 1,234     1,289  
Total stockholders’ equity 358,643     353,226  
Total liabilities and stockholders’ equity $ 560,443     $ 553,835  
               

/EIN News/ --

CAVCO INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in thousands, except per share amounts)
(Unaudited)

  Three Months Ended
  July 2,
 2016
  June 27,
 2015
Net revenue $ 185,141     $ 161,668  
Cost of sales 151,889     129,834  
Gross profit 33,252     31,834  
Selling, general and administrative expenses 24,687     22,659  
Income from operations 8,565     9,175  
Interest expense (1,161 )   (1,015 )
Other income, net 1,026     472  
Income before income taxes 8,430     8,632  
Income tax expense (2,987 )   (3,247 )
Net income $ 5,443     $ 5,385  
       
Comprehensive income:      
Net income $ 5,443     $ 5,385  
Unrealized loss on available-for-sale securities, net of tax (55 )   (409 )
Comprehensive income $ 5,388     $ 4,976  
       
Net income per share:      
Basic $ 0.61     $ 0.61  
Diluted $ 0.60     $ 0.60  
Weighted average shares outstanding:      
Basic 8,937,265     8,863,648  
Diluted 9,085,042     9,020,261  
           


CAVCO INDUSTRIES, INC.
OTHER OPERATING DATA
(Dollars in thousands)
(Unaudited)

  Three Months Ended
  July 2,
 2016
  June 27,
 2015
Net revenue:      
Factory-built housing $ 172,486     $ 147,546  
Financial services 12,655     14,122  
Total net revenue $ 185,141     $ 161,668  
       
Income (loss) before income taxes:      
Factory-built housing $ 10,738     $ 8,004  
Financial services (2,308 )   628  
Total income before income taxes $ 8,430     $ 8,632  
       
Capital expenditures $ 1,890     $ 526  
Depreciation $ 854     $ 745  
Amortization of other intangibles $ 92     $ 189  
       
Total factory-built homes sold 3,395     2,902  
           

 

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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