CVCO

Image source: The Motley Fool. Friday, July 31, 2026 at 1:00 p.m. ET President and Chief Executive Officer - William Boor Executive Vice President and Chief Financial Officer - Allison Aden Chief Accounting Officer - Paul Bigbee Corporate Controller and Investor Relations - Mark Fusler Operator: Thank you for standing by, and welcome to the Cavco Industries, Inc.'s First Quarter Fiscal Year 2027 Earnings Call and Webcast. [Operator Instructions] As a reminder. Today's program is being recorded. And now I'd like to introduce your host for today's program, Mark Fusler, Corporate Controller and Investor Relations. Please go ahead, sir. Mark Fusler: Good day, and thank you for joining us for Cavco Industries First Quarter Fiscal Year 2027 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 Officer. Before we begin, we'd like to remind you that the comments made during this conference call by management may contain forward-looking statements. Forward-looking statements include statements about our future or expected business and financial performance and are not promises or guarantees of future performance, their 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 market conditions. All 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 focus -- factors that could affect our actual results, please refer to these contained in our statements and filings with the SEC, which are also available on our Investor Relations website and at sec.gov. This conference call also contains time-sensitive information that is accurate only as of the date of this live broadcast, Friday, July 31, 2026. Cavco undertakes no obligation to revise or update any forward-looking statements, 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 first quarter results for fiscal 2027. It's only been about 2 months since our year-end call in late May when we told you that March had showed a big pickup in orders and there was an associated backlog increase. The good news is that, that order momentum has carried through the first quarter. And even with sequential shipments being up 13%, our backlog still grew more than 50% from last quarter's ending level. Sequential orders were up double digits in every region. And as a result, backlogs grew significantly across the country as well. The Q1 backlog is also 50% higher than a year ago. And last year, it was declining rather than growing. Shipment improvement across the country led to a quarterly record of 5,657 units. Our production increases resulted in capacity utilization of 75%, still significantly below levels we're able to sustain. So there remains significant room to reach higher volume levels, assuming strong orders persist. This was the first quarter in our history that revenue exceeded $600 million. It was up about 10%, both sequentially and year-over-year. So just to conclude on these points, we raised production and shipments significantly and still saw a large increase in orders and backlogs, both sequentially and year-over-year. Factory-built gross margin dropped 40 basis points from last quarter, driven by 2 factors. Part of the downward pressure came from increased cost in manufacturing. The other factor was related to retail pricing. Wholesale pricing to independents remain generally stable across all regions, so that was not the driver. However, in our company-owned retail markets, which are concentrated in the Texas area, we saw increased price competition and these lower retail prices contributed to the sequential gross margin decline. We do continue to see higher retail traffic in Texas, but closing rates declined. This indicates that demand is good, but competition for qualified buyers intensified during the quarter. Shifting to Financial Services. As reported last quarter, we have found reliable purchasers of meaningful loan volume, which has enabled a nice improvement in loan origination and sales. This quarter, the origination growth met our expectations, and we anticipate we will be able to grow loan sales into future periods. Separately, while the first quarter is a seasonally higher insurance claims quarter, that operation continued their strong performance and exceeded our profit expectations. The favorable insurance claims results over the past couple of years have resulted in lower reinsurance costs as well. Very recently, we also received important outside confirmation of the strong insurance performance and trajectory when [ A.M. Best ] moved to a positive outlook for our financial strength and issuer credit ratings. Shifting to capital allocation. Our strong cash generation enabled us to continue investing in planned expansions and strategic projects while still repurchasing another $30 million of company stock. In a little over 5 years since we began our buybacks, we have now deployed over $600 million in repurchases with the objective of maintaining a responsible balance sheet. Over 19% of our outstanding shares have been bought back through this return of capital to our shareholders. And we finished the quarter with a healthy $243 million of unrestricted cash. Finally, a few weeks ago, the ROAD to Housing Act. became law. The bipartisan support for the new law and the prominence of manufactured housing elements within it are indicative of the growing awareness that our industry is an in-place solution to the affordable housing shortage in our country. The benefits of this law will show themselves over time as we are able to place innovative home designs in urban and suburban locations with improved market acceptance, appropriate regulations and better support for our homebuyers' funding needs. As I've commented in the past, pay attention to what's happening at the state level as well where more states are engaged in lowering unnecessary barriers to our homes being placed where they are needed. Now I'll turn it over to Allison to give more details on the financial results. Allison Aden: Thank you, Bill. Net revenue for the first fiscal quarter of 2027 was $610 million, up 9.5%, compared to $556.9 million during the prior year period. Sequentially, net revenues increased $59.8 million, driven by an increase in units sold, partially offset by a decrease in average revenue per home sold. Within the factory-built housing segment, net revenue was $586 million, up $50.3 million or 9.4% from $535.7 million in the prior year quarter. The increase was primarily due to the addition of American Homestar and an increase in legacy average revenue per home sold. The increase in legacy average revenue per home was primarily due to a higher proportion of homes sold through our company-owned stores and more multi-wides in the mix, partially offset by product pricing decreases. Financial Services segment net revenue was $24 million, up $2.8 million or 13.3% from $21.2 million in the prior year quarter. This increase was generated by higher loan sales and gains on the insurance subsidiary's equity portfolio. Consolidated gross margin in the first fiscal quarter as a percentage of net revenue was 22.1%, down from 23.3% in the same period last year. In the factory-built housing segment, the gross profit was 20.8% in Q1 of 2027, down from 22.6% in Q1 of 2026. The reduction was due to higher cost per unit sold. Financial Services gross margin as a percentage of revenue increased to 52.4% in Q1 of 2027 from 40.9% in Q1 of 2026. The increase was primarily due to the growing impact of premium rate increases, gains on the insurance subsidiary equity portfolio and underwriting changes on policy in addition to higher loan sales. Selling, general and administrative expenses in the first quarter of 2027 were $81.8 million or 13.4% of net revenue compared to $69.1 million or 12.4% of net revenue during the same quarter last year. The increase in these expenses was primarily due to the addition of American Homestar, along with the increases in compensation and employee-related costs and sales and marketing efforts. Interest income for the first quarter was $3.3 million, down from $5.1 million in the prior year quarter, resulting from lower cash balances after the purchase of American Homestar. Pretax profit was down 14.6% this quarter to $55.8 million from $65.3 million for the prior year period. The effective income tax rate was 24.2% for the first fiscal quarter compared to 20.9% in the same period of the prior year. The effective tax rate increased compared to the prior year period, primarily due to a reduction in Energy Star tax credits. Net income was $42.3 million compared to net income of $51.6 million in the same quarter of the prior year, and diluted earnings per share this quarter was $5.43 versus $6.42 per share in Q1 of 2026. During the quarter, we repurchased $30 million of common shares under our Board-authorized share repurchase program, leaving approximately $188 million under authorization for additional repurchases. Now I'll turn it over to Paul to discuss the balance sheet. Paul Bigbee: Thank you, Allison. In the quarter, we had an increase in cash and restricted cash of $8.6 million, bringing our balance to $266.2 million. Cash provided by operating activities was $74.5 million. Cash used in investing activities was $27.5 million related to plant improvements and equipment and cash used in financing activities was $38.4 million, primarily due to the share repurchases Allison just referred to. When we compare the June 27, 2026 balance sheet to March 28, 2026, accounts receivable increased from the increase in homes sold in the quarter. Total commercial loans receivable increased on greater loans originated with more shifting the long term due to the nature and timing of the contracts. Inventories increased from raw material purchases in anticipation of increased costs at our facilities and more finished goods at retail locations for anticipated sales activity. Accrued expenses and other current liabilities increased from higher customer deposits, volume rebates and warranty accruals as a result of higher sales, partially offset by lower bonus accruals due to the fiscal year 2026 payouts. Lastly, treasury stock increased due to stock buybacks executed in the period. And then with this, I'll turn it back to Bill. William Boor: Thank you, Paul. Just to summarize our opening remarks, it was great that we saw the momentum in March really carried forward through the first quarter and it led to record volume and strong backlog growth. The demand environment has felt very uncertain for a long time, but currently strong orders and backlogs are supporting increased production across the system. So with that, Jonathan, why don't we go ahead and open the line for questions. Operator: And our first question for today comes from the line of Daniel Moore from CJS Securities. Dan Moore: Backlog growth, 50%, as you talked about, implies net new orders reaching the highest quarterly level that we've seen since 2021. Just talk about what's driving that, break it down between retail, REITs, communities. And I was going to ask about pockets of strength geographically, but it sounds like it's pretty broad-based. Any additional color there would be great. William Boor: Yes, it has been broad-based. I mean when we looked at the regional dynamics on orders, the ones that had the biggest numbers are ones you really would expect to coming out of winter, the Midwest and the Northeast. So I think the big message there, as we said and you identified is that it is pretty broad-based. We don't always see that. Sometimes these things can move differentially. But we saw double-digit sequential growth in every region. I want like -- take me to your next part of your question? Dan Moore: Just between retail, REIT communities, anything relative areas of strength there? William Boor: Yes, I'm sorry. Yes, we saw that as well. On a percentage basis, I won't go into the actual percentages, but across the 3 channels that we track, builders, developers being one, communities being another and then retail, all of those were up 10% sequentially. So community, we've talked the last several quarters because it can be very bouncy, but it was strong this quarter. And none of the channels seem to really be out of the game of increased orders. Dan Moore: And in terms of the cadence, has that increase continued into June and into July as we kind of look into fiscal Q1? And at this stage, is it fair to say we're starting to see a more accelerated kind of share shift away from site built? Or is it a little too early to call? William Boor: Yes, I'm always kind of hesitant to call trends too quick. I will tell you, I mean, we're just finishing up July here, right? So -- and we don't like to go too far into reporting on the next quarter, but I will say we haven't really seen it crack. So we've still seen generally a continuation. Yes. I think watching manufactured housing relative to site builders is always interesting. They're showing -- from my look, they're showing a lot more volatility over a number of quarters when you just compare new home sales to MH shipments. I don't know always what to read into that. I know they're dealing with more issues around inventory in the market and trying to wean themselves off incentives, and those are problems manufactured housing just doesn't have right now. We generally don't have incentives, but we don't have inventory plugging up the retail channels. So we've got some advantages there. And I do think that I followed a few of the site builders calls this quarter, and it seems like, if anything, they continue to move up in price point. And so generally, I think about that upward horizon of what the playing field is for manufactured housing, and it just keeps feeling like it gets bigger, right? So I talk about a lot, and I hope it's not redundant. But at the upper price points, the question is really how much competition overlap do we have with site builders, and I feel like they continue to move up and abandon first-time buyer type prices. I don't think they can hit them. And then at the lower horizon where our prospective customers are just trying to figure out if they can qualify for a low-price quality home, that's where the real pain has been. And we haven't seen those folks get much relief with interest rates or anything else. I do think it's telling in my opinion that we've seen this increase in orders, not just for a month, but over a few months now. And it feels to me like people have somewhat accepted the level of interest rates we're at. We got a little bit of stability in rates earlier, which helps the buyer get all the way through the process and have some consistency in what their loan is going to look like when they get to the end of the process. And I think it's just -- people were struggling to get homes and it just kind of started to push through again. It's the opposite of when industry sometimes pull orders forward. In this case, it seems like we had some very real pent-up demand that has started to really press through. So the comparison with site builders is always an interesting one, but my big takeaway is I see them continuing to move up in price point. Dan Moore: And can you just tell a little bit more color on what's happening inside the plants in real time? Are we starting to ramp production month-over-month given the increase in backlog, holding steady, what are you seeing there? William Boor: Yes. Yes. Backlogs are a funny thing, right? I mean they're never stable. They're always either going up or down. We have generally in looking across our plants across the country, we have a bias where the plants are increasing production. And we saw that this quarter. I mean we got the pickup in orders in March, and we produced and shipped more homes in the first quarter. And as I was trying to indicate right now, the backlog support is continuing to increase production. The majority of our plants, hardly any were down. The majority were up compared to flat from quarter-to-quarter. The dynamic is interesting because when folks go a long period of time without a good backlog and they're struggling to keep -- just keep the orders coming in to produce, sometimes we can have a tendency to want the backlogs to be big before we really press behind them. And so we try to counteract that human tendency to want to cushion. And right now, with the backlogs at the levels they are, and I'm not sure we mentioned it, we're kind of in the 7- to 9-week range. That's up quite a bit. Our discussions with our plants are, hey, push behind this because big backlogs aren't great either, right? So it's a nice feeling to be able to lean in a little bit on these orders and backlogs. Dan Moore: Helpful. Last for me. A lot of moving parts, obviously, but the pricing pressure you talked about at retail, is that largely kind of Texas and surrounding markets? Or is that something that you're seeing more prevalent across the country? William Boor: Yes. We know that we experience what we experienced in our stores. I don't -- part of the reason why I highlighted in my remarks that our stores still are largely concentrated in Texas. We've expanded out of there for sure, but there's still a core concentration there. That was to say that I don't think we should assume that, that gets extrapolated across the rest of the country. I think it's been an interesting dynamic. I hope that my comments explained it reasonably well because if you're a manufacturer in Texas, you're feeling really good, right? Your prices are stable. Maybe you're going to have an opportunity if orders keep coming in and backlogs grow to even increase a little bit. And then on the retail side, they've got a lot of people out there shopping, and I think it just got a little competitive this quarter. So we'll keep our eye on it. Not having company-owned retailers, our visibility into what's going on in other markets is a little less clear. But I just don't think we should draw rash conclusions about what's going on countrywide or even if this is just a dynamic we've seen in the near term here. We'll keep an eye on it. Operator: And our next question comes from the line of Jesse Lederman from Zelman. Jesse Lederman: Could you help us understand like would the pricing pressure at captive retail, I know it's seems to be concentrated in Texas and like I don't want to make it like too big of a deal. But is that because the stores you think had too much inventory and that could end up filtering through to reduced orders from the manufacturing facilities? Or can you help us kind of think through the moving pieces there and what you think the cause of it was the pricing pressure at retail? William Boor: Yes, that's a good question. It's important. probably I should have brought it out somehow in my comments. You're picking me up a little bit. We definitely have not seen inventory really pick up. I think the -- I think it's a transaction-by-transaction dynamic that they've got a lot of people shopping and those people are jumping around store to store and the retail folks have just gotten pretty -- I'm not -- I use the term aggressive, and I don't want to be extreme, but they've been competing for those orders. I made the comment that closing percentages were down, but that's down on higher traffic. So we're still getting sales and things are still moving through the system, but with a lot of shoppers out there, it just seems like for the moment, at least, it's gotten pretty competitive. And I wouldn't I also would say it's not dramatic. Like we're not seeing ourselves or others selling at prices that aren't profitable in retail. It's just a little tighter. If you think about the spread between the selling price at retail and their invoice on the home, they have other costs. But if you just think about that spread, it's a little bit tighter than it was before. And maybe that's just the market kind of settling out as all these folks are out there shopping. Jesse Lederman: Sure. That makes sense. What's the appetite to continue to compete on cost in those markets versus like wanting to maintain your retailer margin? Like how do you kind of think through those dynamics? William Boor: Yes. Every day, every store is kind of the answer to that. I think it's just -- we have good healthy discussions with all of our retailers, particularly the regional level, kind of just making sure we're all keeping our eye on that balance, right? I mean I think it's an indication that we operate in a market. And so those guys are out there trying to do the calculus around whether we're going to make more near-term profit if we tighten up that margin and get the extra incremental sale or if we're going to make more total profit if we don't. And right now, it's kind of leaned a little bit more toward getting that order. Again, I don't want to overblow it. I think that it's -- and it's not -- it's something that gets worked out kind of at the operating level with our close involvement. Jesse Lederman: Okay. But good to hear. It doesn't sound like it's anything to where they're looking to destock and that will filter through to fewer orders from the independent retailers. William Boor: Yes. Jesse, that's where I think your question is actually really helpful to make sure the picture is complete. We have not seen inventory increase in our retail or in the independents that we sell. Jesse Lederman: Okay. Great to hear. A couple more for me on the SG&A, assuming a certain percentage of those costs are variable, of course, just kind of isolating what that implies for the fixed portion of SG&A, it looks like those costs were up roughly 2% sequentially, which would obviously already normalize for American Homestar. So it sounds like maybe that was like some stock-based comp and whatnot. Is that expected to persist? Or will those costs kind of unwind a little bit back to levels from fiscal 4Q as we move through the year here? Allison Aden: I think what's important is to highlight that from last quarter to this quarter, we were able to leverage our SG&A as a percentage of revenue, which is at the core of our business model. And if you look from an absolute dollar increase perspective, the quarter-to-quarter increases were associated with investments that we would expect when we're working toward having our pipeline grow. So our sales and bonus commission structure, those parts that drive the sales growth and drive the pipeline growth, we see those expenses come through SG&A. And that was a big part of the change from this quarter to last quarter. We've also been investing in our sales and marketing. And again, that's -- those are long-term investments that we make. The dollar impact can be kind of lumpy depending on activities that we have in marketing from one quarter to the next. But what we saw in SG&A and the raw dollar increase is kind of consistent with what we'd expect, continued very thoughtful, measured increase for sales and sales support activity, along with consistent but small investment in shared services, and we continue to be able to leverage SG&A as a percentage of revenue as we move forward. Jesse Lederman: Okay. That's really helpful, Allison. So it sounds like to summarize, there are some incremental costs -- fixed costs kind of isolating for the revenue growth and leveraging the variable costs that will probably kind of remain in kind of the structure for the next few quarters at least that are more structural in positioning the company for the expected growth in the future. Is that right? Allison Aden: That's a fair characterization. Jesse Lederman: Okay. And last one for me, I could requeue after is on the gross margin. Allison, you've given some really great commentary on costs in real time and what we can expect based on maybe some costs and what you know from during the quarter and subsequent to quarter end and how that may flow through to subsequent quarters relative to what you just printed. So would love any commentary there, given you did gross margin down 180 basis points year-over-year despite pretty steady capacity utilization. So I would just love any commentary you can give there. Allison Aden: Yes, of course. And I think what we'll focus on here is a little bit of what everybody probably wants is an understanding of how tariffs are impacting our COGS. Well, and we know there's an upward impact on our COGS. However, it's really difficult to precisely estimate the impact of tariffs. I think this quarter, our best overall estimate is that COGS was negatively impacted by about $5 million of tariffs and just/inflationary costs compared to the prior quarter. And what we've talked about is our suppliers' ability to really pass through that tariff is a large function of the level of demand for their products. So if the demand for lumber and steel, which are the 2 main commodities we're watching start to heat up, we are likely to see that impact our profit margin. But I think it's important that we're not seeing anything that we didn't expect. We continue to focus on the core of our COGS, which is low fixed cost, being able to leverage our factory overhead to offset as much increase in materials that we can. So we're seeing that working, and we feel comfortable with where we're positioned going forward. Jesse Lederman: Okay. That sounds good. And so that $5 million seems relatively steady which that was $5 million was last quarter and your expectations moving forward aren't materially different than that $5 million? Allison Aden: Yes. We all have limited visibility at this point to the impact of tariffs and inflation, but that's a fair statement. Jesse Lederman: Okay. And are there mitigating efforts that you're using to kind of work down that $5 million? Is there any way you think all else equal, you could get that number lower? Or have you kind of exhausted those options? Allison Aden: No. We absolutely continue to work forward. Our supply chain and our purchasing group is one of the strongest I've ever had the pleasure of being with, and they have been on top of the situation now for going on 18 almost 24 months. So there's a lot of activity around supply chain. There's a lot of strong partnerships that we've had really across all the commodities, particularly lumber and steel, we'll continue to leverage those and fight the good side. Operator: And our next question comes from the line of Greg Palm from Craig-Hallum. Greg Palm: Just wanted to follow up on the last, I guess, thinking about the margin levels because we've been dealing with inflationary inputs and tariffs for sort of years, and I know the impact maybe gotten a little bit worse, but is it more of a byproduct of your inability to pass through these costs now? Just given all of a sudden, we're recognizing obviously a much bigger headwind now than we have been. William Boor: Yes, I can comment on that quickly. Allison might want to add to what I say. Yes, I've been kind of -- I've had a view for a long time that our product markets have kind of separated from cost to a great extent. So we really are not a cost-plus manufacturer in any way. Having said that, when our costs go up, if we've got the opportunity -- well, say it a different way, our selling price on a home is based on the demand and what the market says that home is worth, not necessarily the cost we put into it. So I think the way this plays out is if we continue as an industry to see higher backlogs and higher capacity utilization, then you could expect price to go up, and that will be an upward pressure on gross margins regardless of what's going on in cost. So I don't know that everyone shares my view, but to some extent, my mental model is that these things are somewhat separated. If we had the opportunity to increase price in a market because the demand suggested that, we'd do it. So that's my view. And I know that's kind of different than others in some cases, and it's a pretty extreme view, but it's not as simple as saying, hey, our price went up, so let's go raise our -- or our costs went up, so let's go raise our price equal amount to see if we can get it back. Greg Palm: Go ahead if you need to continue to finish the thought or not? William Boor: No, I was just checking to see if people are on the table [indiscernible] what I said. Allison Aden: I think that's an excellent way to cover the point. Greg Palm: So I guess you kind of alluded to demand and if others in industry -- I mean, do you think others are seeing the level of orders that you're seeing right now? I mean, just based on what you've announced in terms of backlog, implied orders, July, I mean, do you think that this is an industry thing where everybody is seeing the same activity? William Boor: Yes, I don't really have a strong view. I don't have visibility into their orders and backlogs, to be honest. So I guess we'll find out over time. We follow the HUD numbers as you do. I know you follow that and look at how we're performing relative to that. They can be bouncy as well. But over time, I think they tell a story. And I'm happy with how our numbers over a number of quarters have compared to the movements in HUD shipments as a proxy for overall factory-built housing. So I feel like we're doing well. But as the HUD shipments come out, we'll see the extent to which the whole industry is experiencing the same things. I mean a 50% increase in backlog kind of is -- I mean, that's a big quarter jump. And I don't think the entirety of that is unique to us. I just think we've certainly done a good job of making sure we get hopefully more than our share of them. Greg Palm: Yes. Well, let me ask it this way. Are you, as a company, whether that's at the national level, at the local level, doing anything differently, pricing homes differently than, a, competition; and b, what you would have been doing a year ago? I mean I'm just trying to get a sense for whether maybe there's a company-specific item here that is translating into much, much higher order growth. William Boor: Not price. I'll tell you categorically, it's not -- if you're asking if the company has changed some strategy around pricing to go get orders, I would say absolutely not. We haven't changed our system, our system -- our philosophy is very much staying in close contact with our local operators, but they make a lot of the decisions. And I can say on the manufacturing side, and this is something we talk to them a lot about on the manufacturing side, the process is for them to be close to the market and make sure that our products are basically priced right in line with what we're seeing from the competition for like products. So yes, categorically, I'd just say that we haven't gone into a mode where we're chasing market share with price. I think where we're chasing market share is with things like projects that improve our quality, which we've done a lot of those over the past year. A lot of emphasis that we've talked in the past, and I won't drag you through around how we go to market, digital marketing, branding, product lines, national sales force to make sure we're touching all the right people within the larger customers. That's the hard work we've been doing over a number of years that I do think makes a difference. Greg Palm: Yes. That makes sense. And then I guess just lastly, now that ROAD to Housing Act. finally passed, are you getting any more feedback from the channel, from the regulatory folks? I mean, just trying to get a sense for when you think some of this stuff that was included in the bill might actually start to benefit the industry. William Boor: Yes. I think I always kind of try to tell people, I'm at the same time, incredibly excited about what that law represents and the opportunities it gives us over time. And also, I'm kind of realistic in my expectations about how quickly we see like actual volume come from it. One thing I've told people, and I might have said on these calls in the past that really caught my attention, and this is a little while ago, when the industry really got focused on trying to pursue this removable chassis. I was frankly surprised when I talked to company-owned retail leaders, folks within our organization in retail and also some independents at how excited they were about it because they don't always have the multiyear perspective, but they felt like there was a market for that quickly. So I think as we get the state definitions to align to the removable chassis and as municipalities start to realize they've got to open their minds to these good solutions, the permanent removing a chassis really gives them a home that's even that much less distinguishable from the site built. I think it's real volume. It will just take a little bit of time to get through that process, and it will be kind of an upward curve, right? So we're not sitting on this end sitting here doing projections about how much incremental volume this stuff will add over what time period. But directionally, I know it's going to be helpful, and it's going to help us break down some of the zoning barriers. And so it's good stuff. Operator: And our next question comes from the line of John Lovallo from UBS. John Lovallo: Maybe, Allison, I'll start with -- it seems like demand is pretty good. Pricing may be under a little bit of pressure at the retail side, but I wanted to focus on the $5 million of cost inflation. It seems to us at least that the recent rises in lumber, steel and aluminum would result in a little bit more margin pressure than perhaps you're alluding to going forward. And I just want to make sure that I'm understanding that correctly. And also, I mean, how do you kind of factor in diesel and freight into the equation? Allison Aden: Yes, excellent questions. And one of the things as we talk about the increases that we're seeing in the current period, when we -- the way to think about that is if you look at what's going on in the commodity markets right now, which we can all see and particularly if we think about those for lumber and for steel, what's going on right now in about 60 to 90 days comes through in our cost of goods sold. So as we report on it, it probably does feel a little bit of a lag indicator to what we're seeing in the marketplace. But we've seen that as a consistent part of our business model. So we have -- we use that time period as an opportunity to make sure that we're sourcing at the right levels and that we are getting as competitive of pricing as possible. But to your point, we will see the impact in lumber and steel this quarter, and we'll -- we expect to continue to see that in the out quarters. But it's something that everybody can have visibility to by watching those commodity markets with us. John Lovallo: Got it. Okay. And then -- sorry, Bill, were you going to say something? William Boor: No. No, we're good. John Lovallo: Okay. Sorry, yes. Maybe then switching to you, Bill, just back on the 21st Century ROAD to Housing Act. I mean, obviously, a positive. But we've been reading more and more that the HUD is currently understaffed given the DOGE pretty much took an act to the workforce there. I mean how do you think about the ability of HUD to actually execute upon this with the staffing levels that they have in place? William Boor: Yes. That's an interesting question because I haven't really -- I haven't been conscious of a big concern there. So unless I'm missing something, I think we aren't seeing it as a barrier. It would be an interesting question for me to talk to some people in D.C. and ask them directly. But when you look at it, they've got some things that they do have to do some pretty heavy lifting on around one of the ways the road to housing tries to impact zoning. And I think the federal government's ability to do that is somewhat limited. But one of the things they have there is some direction to HUD to examine construction, financing approaches and to give kind of models for how to set specifications for municipalities. It's kind of like they're trying to give tools to municipalities to enable municipalities to relax some of the barriers. I think that will take work, right? That's going to be labor-intensive for HUD. But some of the others that we're excited about like the -- removing the chassis, I think there's enough focus on that. And we're -- the infrastructure that's in place to provide guidance to HUD around specifications is all there. So I really think that they won't be slowing those kind of things down. That's kind of my perspective though, John. I'm not sure if -- you're picking up that's a concern. I'm going to tune into it more. John Lovallo: Yes. I mean we've heard that through several channels. But look, we're obviously a lot newer to this than you are. So you're probably right. The other thing I wanted to ask you about, though, is that the MBA recently put out a pretty cautious statement to the FHFA regarding the potential changes to the lending guidelines within the duty to serve program. And I guess the question is how are you thinking about the potential impact of DTS related to Cavco and just the broader industry? And more generally, how are you thinking about the opportunity for improved financing through either the HUD or FHFA? William Boor: Yes. Some of what's in the road to housing is direction to various departments to I'm going to use the word that's been thrown around a bit to generalize to modernize their programs. And I won't address that. I think that work just should happen. And those are things like raise your loan limits because you're out of market, right? So let's not talk so much about that. But the duty to serve, if we go back in time, and again, this is my view of things. I think there's a lot going on here, so I'll preface it with that. If we go back in time, the GSEs a number of years ago kind of prominently had aspects of duty to serve related to home-only lending, which they do not buy home-only loans. And then it just kind of quietly got less and less and went away. And I think part of that was their regulator, FHFA was not interested in it. They were dealing with big issues around conservatorship and other things, and it's a small market for those GSEs. Now in the last month or 2, I think FHFA has done a 180 and kind of looked at them and said, you guys got to really look at doing these things. I am really excited about where that might lead. Now I don't have -- I'm not going to get overly optimistic because we've been through it before. But if we make real progress with the GSEs on them creating a secondary market for home-only loans, I think that's a huge plus for the industry. And I've talked about that in Congress as well that -- I talked earlier in the answer to one of Dan's questions, I think, about the folks at the lower horizon that are just trying to see if they can afford to own a home, improve the secondary market or you develop a secondary market through the GSEs for home-only loans, and I think those loans become more affordable immediately. So I'm like cautiously excited about that increased positive discussion we're starting to hear, the rumbling we're starting to hear. And if that goes somewhere and they start to really take action on that, it will be -- I imagine it will be slow. They'll do pilot programs initially and all that to make sure they have data, frankly, whatever because these loans are proven to be good loans, good investor risk for the coupon that's on these loans currently. So if they test it, they're going to find that's a market they should be operating in to support affordable housing. So sorry for the rant, but you kind of triggered me on something that I just am frustrated it hasn't already happened. And we've seen 180 where they're now getting a little bit of pressure to look at the stuff again, and I think that's a great thing. Operator: And our next question comes from the line of Jordan Hymowitz from Philadelphia Financial. Jordon Hymowitz: I appreciate the long answer last time, by the way. I don't know of any stick-built owner that's up 50% in backlog. I mean if they're up 5%, it's been a home run. So it's clearly showing the affordability gap. I have 2 questions. One is your operating margin reflects your current utilization. But if you get a big increase in orders, the first thing that's going to happen on is that the operating margin will go up to 12% to 15% because you fill up the factories versus build new factories, correct? So is it an increase in volume have more than a direct flow through because the margins will increase? William Boor: Well, you get 2 things. One is you will get that spreading of fixed costs, which helps, right? I mean we always tell folks that we strive to be as variable as possible in our cost structure, but there's certainly some fixed costs even in cost of goods sold line. So you definitely get that. The other thing you'll get is that it's kind of the other side of the coin about affordability. But if plants start to be full, that means that retailers are looking for more homes because they know they can sell them, and that's when you start seeing pricing rise and more than covering maybe some of these operating costs. So it really has 2 effects, I think, what you're pointing at. Jordon Hymowitz: So -- but it's not unreasonable to think that there could be upside margin pressure if these backlogs come through. William Boor: Well, if they continue, right? I mean if we see -- there's a lot of scenarios. This is the uncertainty of the industry. If we see for whatever reason, we see orders now slow down a bit, we've got a backlog. So we'll be able to run that for a period and maybe -- but in that scenario, it will come down over time, and we'll kind of be back to where we started. If orders stay at the level they're at right now, the industry utilization is going to go up. And as the industry goes up, you're going to be in that different pricing scenario. Jordon Hymowitz: Second question is, there's different trials of HUD funding. And right now, your mortgages are 300 to 400 basis points higher than traditional stick-built homes. When does the first trial begin? And how much do you think a 300 or 400 basis point improvement in cost would even further exacerbate that affordability difference for you guys? William Boor: Yes. Just to be clear, 300 to 400 basis points on land home is high, right? I mean the land home tends to run looking at more about 0.5% to 1% higher than a stick-built land home mortgage. So probably what you're looking at is the difference between a home-only loan. Jordon Hymowitz: Correct. Just the home-only loan. Correct. William Boor: Yes. And those really don't move with mortgage rates. They're very sticky and aren't really as driven by like the 10-year as land home rates. And again, that's where we're talking -- that's where I got on my soapbox a minute ago talking about the GSEs and what a big difference it would make. It's that home-only lending market where a lot of our customers are just borrowing against the home. And if that comes down because the market becomes more efficient, then that really has a big impact on our market and folks' ability to afford homes, which I think is your question. Jordon Hymowitz: Correct. And when do you think the first trial could start in that? Because like I said, it's 300 to 400 basis points less on the home only. William Boor: Yes. I'm not sure that you're going to see home-only loan rates come down to being anywhere close to par with the land home because the loan values are smaller. And so there's some -- just fixed cost of origination and things like that, that will probably always have land home be a bit higher -- I'm sorry, home-only be a bit higher than a land home loan. And I can't even -- I would be probably foolish to guess at when the GSEs might try to actually start buying loans. I mean we're going to talk to them as much as they want to talk, and we'll provide loans if that's what we have to do. But I can't even make an educated guess on when we might see some movement there because we've been disappointed in the past. Jordon Hymowitz: Okay. But it's a huge positive. William Boor: Yes, absolutely. The direction of the discussion in D.C. is what's exciting, right? We just have to keep feeding that. Operator: [Operator Instructions] Our next question is a follow-up from the line of Jesse Lederman from Zelman. Jesse Lederman: I have a couple similarly related to the legislation, but more on the state level side, Bill, like you kind of talked about earlier, which seems really encouraging. We understand that a lot of the kind of reform on the state side specifies more similar zoning as for site-built single-family homes, but specifically for homes that are titled as real property on the MH side. So curious what you're hearing out of builder developers from your Rolodex in terms of what their appetite might be in some of those states and if that's increasing relative to discussions you've had previously? William Boor: Yes, here's where I'm going to fight my tendency to want to not overpromise and tell people about things that are on -- that are probably still out in time. But I will tell you to your question that we have had an increase of discussions with land developers that historically we haven't had before. So I think that -- I think people are starting to show up to the story. I don't know if I'm getting ahead of myself to set any expectations there, but you asked the question, and we've had some really good discussions with some folks that 2 years ago probably wouldn't have been interested. Jesse Lederman: That's awesome. Great to hear. And a question on -- this is probably premature, but just curious for the removal of the permanent chassis requirement really just makes it optional. I'm curious if that introduces any inefficiencies at the factory if you're going to have to -- one home is maybe going to be chassisless, the other home is going to have a chassis, like if you've thought through kind of the logistics of actually adding essentially a new product line to all of your different factories. William Boor: Yes. It's -- I mean, factories have unique constraints, but I'm pretty optimistic about this for a couple of reasons. One, if you've got a factory that's making both HUD and modular, they already do it, right? So it's not a big technological leap for that factory. And a lot of it has to do -- if the factory is constrained, it's due to some physical limitations in their factory. The other thing I'll tell you is that one of the things we've invested in, in a lot of our projects, in our plants is to -- instead of rolling the chassis in and building the floor on that and dragging that down the line, which kind of creates not as high quality from a level floor perspective. A lot of our project investments have been to build the home off the chassis and at the end of the line, raise it up and set it on to the chassis. So any factory that's set up that way is in great shape to build this product because we'll just be picking it up and setting on a chassis it won't forever be tied to versus the next home coming down the line might be built to stay on that chassis. But we think that from a manufacturing perspective, we can adapt to this pretty readily. Jesse Lederman: Okay. Awesome. That's really interesting. Two more quick ones for me. On transportation costs, freight costs have increased as well. I'm curious to the extent to which that also flows through the COGS line and how material that is. Allison Aden: We have seen increases in the transportation, but I think they've been somewhat offset partially at least by improvements that we're making in services and that they flow both through. So it's kind of a net impact of what we want to see as far as our customer service, slightly offset by some of the cost of that transportation is having to us. Jesse Lederman: When you think -- what do you mean exactly when you talk about customer service? Allison Aden: Cost of service. So cost of our technicians to go out and perform service requests to service. Jesse Lederman: Okay. Got it. Okay. That's helpful. Last one for me. Again, I really appreciate all the color. It's incredibly insightful. I try to kind of mix things on the removal of the chassis, if that's really going to strip costs out or if costs from perhaps the recycling of the steel from the chassis will just be replaced with the need to crane set homes or some other offsets. Curious what your math suggests on the potential cost removal from removing the chassis? William Boor: Our view is a little more on the conservative side. You offset the cost of not bearing a big steel chassis in the home forever, you offset that cost with -- you're going to need a little more structural like wood, for example, for the structure because the chassis does provide some structural integrity. When you get to the site to set the home instead of being able to kind of roll it in place, set it up and go, you're going to be looking at a lot more sets that require cranes. So for us, we're not really viewing it as big of a cost savings element as we are viewing it as a product innovation element and something that's going to allow us to make products that we'll continue to break down those zoning barriers and get into urban areas and things like that. You'll have customers in it and we fully expect to still make a lot of homes on permanent chassis. We'll have customers that don't value that and their set might be less expensive. So their total delivered cost might be lower with the permanent chassis and you'll have others that want to have their homes set very close to ground. They're going to invest in the foundation to do that. They're okay with the added set of costs. And so we're really going to have just an opportunity to sell to both types of customers. So we do it that way, Jesse, more than as a cost savings. Operator: This does conclude the question-and-answer session of today's program. I'd like to hand the program to Bill Boor, President and CEO, for any further remarks. William Boor: Yes. Thank you. We feel good about our positioning. I think hopefully, that's coming through. We feel like we're really well positioned. And I think that's because we've been very consistent in investing in our plants through the cycle. And I alluded to during the Q&A, we've had a very methodical and committed execution of a long-term go-to-market strategy that I think is paying off for us. So correctly predicting where the market is going to be even a couple of quarters out is really difficult. But instead, we just stayed steady and nimble, which is what I think is necessary in uncertain and sometimes volatile markets. So -- we believe building a better company and bringing better solutions to the affordability crisis is what creates value over time, and that's where our focus remains. I really thank all of you for joining us and for your interest in Cavco, and we look forward to keeping you updated. Thank you. Operator: Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Cavco Industries (CVCO) Q1 2027 Earnings Call Transcript was originally published by The Motley Fool

This article first appeared on GuruFocus. Net Revenue: $610 million, up 9.5% year-over-year from $556.9 million. Factory-Built Housing Revenue: $586 million, up 9.4% from $535.7 million in the prior year quarter. Financial Services Revenue: $24 million, up 13.3% from $21.2 million year-over-year. Consolidated Gross Margin: 22.1% of net revenue, down from 23.3% in the same period last year. Factory-Built Housing Gross Margin: 20.8%, down from 22.6% in Q1 of 2026. Financial Services Gross Margin: 52.4% of revenue, up from 40.9% in Q1 of 2026. SG&A Expenses: $81.8 million or 13.4% of net revenue, compared to $69.1 million or 12.4% in the prior year quarter. Pre-Tax Profit: $55.8 million, down 14.6% from $65.3 million in the prior year period. Net Income: $42.3 million, compared to $51.6 million in the same quarter of the prior year. Diluted Earnings Per Share: $5.43, versus $6.42 per share in Q1 of 2026. Units Shipped: Quarterly record of 5,657 units. Backlog: Grew more than 50% from last quarter's ending level and is 50% higher than a year ago. Capacity Utilization: 75%. Cash Flow from Operations: $74.5 million. Share Repurchases: $30 million of common shares repurchased during the quarter. Cash Position: $243 million of unrestricted cash; total cash and restricted cash of $266.2 million. Warning! GuruFocus has detected 8 Warning Signs with TU. Is CVCO fairly valued? Test your thesis with our free DCF calculator. Release Date: July 31, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Cavco Industries Inc (NASDAQ:CVCO) achieved record quarterly revenue exceeding $600 million for the first time in its history, up 10% year-over-year. The company saw a significant increase in orders and backlogs, with backlog growing more than 50% sequentially and year-over-year, driven by broad-based demand across all regions and sales channels. Cavco Industries Inc (NASDAQ:CVCO) set a quarterly record for shipments at 5,657 units, with production increases leading to a capacity utilization rate of 75%, leaving room for further growth. The Financial Services segment performed well, with strong insurance claims results leading to lower reinsurance costs and an improved outlook from AM Best, alongside growth in loan origination and sales. The company continues to return capital to shareholders, having repurchased $30 million of stock in the quarter, bringing total buybacks to over $600 million (19% of shares) while maintaining a healthy cash balance of $243 million. The passage of the Road to Housing Act is seen as a significant positive for the industry, potentially opening new markets and improving financing support for manufactured housing over time. Factory-built housing gross margin declined 180 basis points year-over-year, impacted by increased manufacturing costs and pricing pressure in company-owned retail markets, particularly in Texas. The company experienced increased price competition in its retail markets, leading to lower retail prices and a sequential decline in gross margin, despite higher traffic. Cost of goods sold was negatively impacted by approximately $5 million due to tariffs and inflationary costs, with expectations of continued pressure from rising lumber and steel prices. Pre-tax profit decreased 14.6% year-over-year, and diluted earnings per share fell to $5.43 from $6.42, partly due to a higher effective tax rate from reduced Energy Star tax credits. SG&A expenses increased to 13.4% of net revenue from 12.4% in the prior year, driven by the addition of American HomeStar, higher compensation costs, and increased sales and marketing efforts. The company noted that closing rates in its retail markets declined, indicating intensified competition for qualified buyers even as overall demand remained strong. Q: Backlog growth of 50% implies net new orders reaching the highest quarterly level since 2021. What's driving that, and can you break it down between retail, REITs, and communities? Is the strength broad-based geographically? A: (William C. Boor, President and CEO) The order momentum has been broad-based, with double-digit sequential growth in every region. The biggest numbers came from the Midwest and Northeast, which is expected coming out of winter. Across the three channels we trackbuilders/developers, communities, and retailall were up 10% sequentially. Community, which can be very bouncy, was strong this quarter, and none of the channels seem to be out of the game. Q: Has the increased order momentum continued into June and July? Is it fair to say we're seeing a more accelerated share shift away from site-built homes? A: (William C. Boor, President and CEO) We haven't seen the momentum crack and have seen a general continuation. Site builders are showing more volatility and dealing with inventory issues and trying to wean themselves off incentivesproblems manufactured housing doesn't have. Site builders continue to move up in price point, abandoning first-time buyer prices, which expands the playing field for manufactured housing. The increase in orders over a few months suggests people have accepted the current interest rate levels, and we're seeing real pent-up demand press through. Q: What's happening inside the plants in real time? Are you starting to ramp production month over month given the increase in backlog? A: (William C. Boor, President and CEO) We have a bias where the majority of plants are increasing production. We got the pickup in orders in March and produced and shipped more homes in the first quarter. Backlogs are now in the seven-to-nine week range, up quite a bit. Our discussions with plants are to push behind the orders because big backlogs aren't great eitherit's nice to lean in on these orders and backlogs. Q: The pricing pressure you talked about at retailis that largely Texas and surrounding markets or more prevalent across the country? A: (William C. Boor, President and CEO) Our company-owned stores are still largely concentrated in Texas, so I don't think we should extrapolate that across the rest of the country. In Texas, manufacturers are feeling good with stable prices, but on the retail side, there are a lot of shoppers and it got competitive this quarter. It's not dramaticwe're not seeing unprofitable salesbut the spread between retail selling price and invoice is a little tighter. We'll keep an eye on it. Q: Is the pricing pressure at captive retail because the stores had too much inventory, and could that filter through to reduce orders from manufacturing? A: (William C. Boor, President and CEO) We have definitely not seen inventory pick up. It's a transaction-by-transaction dynamic with a lot of people shopping and jumping around store to store. Closing percentages were down, but that's on higher traffic, so sales are still moving through the system. It's not dramaticwe're not seeing ourselves or others selling at prices that aren't profitable in retail. It's just a little tighter on the spread. Q: On SG&A, isolating the fixed portion, costs were up roughly 2% sequentially, normalizing for American HomeStar. Is that expected to persist or unwind back to fiscal 4Q levels? A: (Allison Aden, EVP and CFO) We were able to leverage SG&A as a percentage of revenue, which is at the core of our business model. The absolute dollar increases were associated with investment expected when working toward growing our pipelinesales and bonus commission structures that drive sales growth. We've also been investing in sales and marketing, which are long-term investments. The dollar impact can be lumpy, but we continue to be able to leverage SG&A as a percentage of revenue moving forward. Q: On gross margin, down 180 basis points year-over-year despite steady capacity utilization. Can you provide commentary on how tariffs are impacting COGS and what to expect in subsequent quarters? A: (Allison Aden, EVP and CFO) Our best overall estimate is that COGS was negatively impacted by about $5 million of tariffs and inflationary costs compared to the prior quarter. Suppliers' ability to pass through tariffs is a large function of demand for their products. If demand for lumber and steel heats up, we're likely to see that impact profit margins. We're not seeing anything we didn't expect, and we continue to focus on leveraging factory overhead and increasing materials as much as we can. Q: Is the $5 million tariff impact relatively steady, and are there mitigating efforts to work that number down? A: (Allison Aden, EVP and CFO) That's a fair statement that expectations aren't materially different. Our supply chain and purchasing group is one of the strongest I've ever been with, and they've been on top of the situation for almost 24 months. There's a lot of activity around the supply chain and strong partnerships across all commodities, particularly lumber and steel. We'll continue to leverage those and fight the good fight. Q: Is the margin pressure more a byproduct of your inability to pass through costs now, given the much bigger headwind? A: (William C. Boor, President and CEO) Our product markets have kind of separated from cost to a great extentwe're not a cost-plus manufacturer. Our selling price is based on demand and what the market says the home is worth, not necessarily the cost we put into it. If we continue to see higher backlogs and higher capacity utilization, you could expect price to go up, which will be upward pressure on gross margins regardless of costs. It's not as simple as saying costs went up, so let's raise prices. Q: Are you doing anything differently at the national or local level, pricing homes differently than competition or a year ago, that could translate into much higher order growth? A: (William C. Boor, President and CEO) Categorically, it's not price. We haven't changed our strategy around pricing to go get orders. Our philosophy is staying in close contact with local operators who make a lot of decisions. On the manufacturing side, the process is to be close to the market and ensure products are priced in line with competition. We're chasing market share with things like projects that improve quality, digital marketing, branding, For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in Cavco Industries, Inc.? Here are five stocks we like better. Revenue and demand reached record levels: Fiscal Q1 revenue rose 9.5% year over year to $610 million, while shipments climbed 13% sequentially to a record 5,657 homes. Backlog increased more than 50% year over year and quarter over quarter, supported by double-digit order growth across regions and sales channels. Profitability weakened despite higher sales: Gross margin fell to 22.1% from 23.3% due to higher unit costs, Texas retail competition, tariffs, inflation and freight expenses. Net income declined 18% to $42.3 million, while diluted EPS fell to $5.43 from $6.42 as SG&A expenses increased. Strong cash generation supported investment and buybacks: Cavco generated $74.5 million in operating cash flow, ended the quarter with $243 million in unrestricted cash and repurchased $30 million of stock. Management also said the new Road to Housing Act could expand manufactured-housing opportunities through regulatory, zoning and financing changes. Cavco's Future Looks Bright as Affordable Housing Demand Soars Cavco Industries (NASDAQ:CVCO) reported first-quarter fiscal 2027 revenue above $600 million for the first time, as order momentum continued across regions and sales channels, supporting higher production and a substantial increase in backlog. Net revenue for the quarter reached $610 million, up 9.5% from $556.9 million a year earlier. Chief Executive Officer Bill Boor said revenue also rose about 10% sequentially, driven by increased unit shipments. Cavco shipped a quarterly record 5,657 homes, up 13% from the prior quarter, while factory capacity utilization reached 75%. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now Cavco's Ratings Upside, Cheaper Homes Alternative? Despite the higher shipment volume, backlog grew more than 50% from the prior quarter’s ending level and was also 50% higher than a year earlier. Boor said sequential orders increased by double digits in every region, with the Midwest and Northeast posting particularly large gains after the winter season. Orders also rose more than 10% sequentially across the builders and developers, communities, and retail channels, he said. Boor said Cavco’s plants are generally increasing production as backlog levels support further output gains. The company’s backlog is now in a range of roughly seven to nine weeks, according to Boor, who said management is encouraging plants to “push behind” the stronger demand rather than wait for even larger order cushions. → Microsoft Just Flipped the AI Spending Narrative Overnight He said the company has not changed its pricing strategy to pursue market share and is not chasing orders through lower factory prices. Rather, Cavco is seeking to compete through product quality, digital marketing, branding, product lines and its national sales force. “We haven’t gone into a mode where we’re chasing market share with price,” Boor said. → Carrier Earnings Could Send the Stock to a New All-Time High Management said it believes recent order growth reflects pent-up demand beginning to move through the market, with buyers appearing to have become more accustomed to the current interest-rate environment. Boor also pointed to the widening price gap between manufactured housing and site-built homes, saying site builders appear to be moving toward higher price points and away from first-time-buyer price ranges. Consolidated gross margin declined to 22.1% of net revenue from 23.3% a year earlier. Factory-built housing gross margin fell to 20.8% from 22.6%, primarily due to higher cost per unit sold. Financial services gross margin, however, increased to 52.4% from 40.9%, helped by premium-rate increases, gains in the insurance subsidiary’s equity portfolio, underwriting changes and higher loan sales. Boor said factory-built gross margin declined 40 basis points sequentially, reflecting higher manufacturing costs and greater price competition at company-owned retail locations concentrated in Texas. Wholesale pricing to independent retailers remained generally stable across regions, he said. In Texas, Cavco saw higher retail traffic but lower closing rates as retailers competed more aggressively for qualified buyers. Boor said the situation was not driven by elevated inventory levels at company-owned or independent retailers, and he characterized the pricing pressure as a transaction-by-transaction competitive dynamic rather than broad-based discounting. Chief Financial Officer Allison Aden said the company estimates tariffs and inflationary costs reduced cost of goods sold by approximately $5 million compared with the prior quarter. She said commodity-market movements in lumber and steel typically affect Cavco’s cost of goods sold with a lag of roughly 60 to 90 days. Freight costs have increased as well, although some of that impact has been offset by improvements in service costs, she said. Aden said Cavco continues to focus on purchasing, supply-chain relationships and factory-overhead leverage to mitigate material-cost increases. Boor said home prices are determined by demand and market value rather than through a simple cost-plus model, adding that higher industry utilization could eventually support stronger pricing. Pre-tax profit declined 14.6% to $55.8 million from $65.3 million in the prior-year period. Net income was $42.3 million, compared with $51.6 million a year earlier, while diluted earnings per share fell to $5.43 from $6.42. Selling, general and administrative expenses rose to $81.8 million, or 13.4% of revenue, from $69.1 million, or 12.4% of revenue, a year earlier. The increase reflected the addition of American Homestar, higher compensation and employee-related costs, and expanded sales and marketing efforts. Aden said the company was still able to leverage SG&A as a percentage of revenue on a sequential basis. She described the increased spending as measured investment in sales, sales support, marketing and shared services intended to support future growth. Factory-built housing revenue rose 9.4% to $586 million, aided by the American Homestar acquisition and higher legacy average revenue per home. Financial services revenue increased 13.3% to $24 million, driven by higher loan sales and gains on the insurance subsidiary’s equity portfolio. Boor said Cavco has identified reliable purchasers for meaningful loan volume, supporting increased loan originations and sales. Cavco ended the quarter with $266.2 million in cash and restricted cash, including $243 million of unrestricted cash. Operating activities generated $74.5 million during the quarter, while the company spent $27.5 million on plant improvements and equipment. The company repurchased $30 million of common stock during the quarter, leaving approximately $188 million available under its authorization. Boor said Cavco has deployed more than $600 million toward repurchases over a little more than five years and has bought back more than 19% of its outstanding shares. Management also highlighted the recently enacted Road to Housing Act, which includes manufactured-housing provisions. Boor said the law could support broader placement of innovative home designs in urban and suburban locations over time through improved regulations, market acceptance and homebuyer financing support. He said the company views provisions related to removable chassis designs primarily as a product innovation and zoning opportunity, rather than a major cost-saving measure. Cavco expects to continue producing homes with permanent chassis as well, depending on customer preferences and delivered-cost considerations. Cavco Industries, Inc is a leading designer, manufacturer and retailer of factory-built homes and modular structures. The company produces a range of HUD-code manufactured homes, modular buildings, park model RVs and cabins through its network of production facilities. Its offerings cater to both residential and commercial markets, including customizable single- and multi-section homes, workforce and affordable housing solutions, educational and healthcare modules, as well as specialty lodging products for the recreational vehicle and hospitality industries. Since its founding in 1967, Cavco has grown through strategic investments and acquisitions, expanding its footprint across the United States and into parts of Canada and Mexico. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Cavco Industries Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

Cavco delivered record sales volume, solid earnings and an expanding backlog PHOENIX, July 30, 2026 (GLOBE NEWSWIRE) -- Cavco Industries, Inc. (Nasdaq: CVCO) ("we," "our," the "Company" or "Cavco") today announced financial results for the first fiscal quarter ended June 27, 2026. Quarterly Highlights Net revenue was $610 million, up $53 million or 9.5% compared to $557 million in the first quarter of the prior year. Home sales volume was up 4.4% and capacity utilization remained consistent year over year at approximately 75%. Factory-built housing Gross profit as a percentage of Net revenue was 20.8%, compared to 22.6% in the same period in the prior year. Financial services Gross profit as a percentage of Net revenue was 52.4%, compared to Gross profit of 40.9% in the prior year. Income before income taxes was $55.8 million, down $9.5 million, or 14.6% compared to $65.3 million in the same period in the prior year. Net income per diluted share attributable to Cavco common stockholders was $5.43 compared to $6.42 in the prior year quarter. Backlogs totaled $298 million at the end of the quarter representing 7-9 weeks of production compared to $195 million at the end of the prior year. Stock repurchases were approximately $30 million in the quarter. At the end of the first quarter, $188 million remains available for repurchases under our previously announced Board authorizations. Commenting on the quarter, President and Chief Executive Officer Bill Boor said, "This quarter saw the continuation of strong order momentum we saw at the end of Q4 2026. In Q1, we saw record shipments and grew our backlog by over 50%. These results don't happen with just one or two plants doing well. They are a reflection of order growth and the excellent job all of our teams have done responding to the market." He continued, "Externally, we saw progress on the regulatory front with the passing of the bipartisan 21st Century ROAD to Housing Act. The law highlights the role factory-built homes need to play in the housing affordability crisis with major sections dedicated to Manufactured Housing. It will enable innovation, provide regulatory clarity, improve access to financing, and encourage states and local authorities to reduce zoning barriers. Importantly, we are also seeing an increasing number of states passing legislation to improve zoning access at the local level. While we continue to manage through a challenging macro-economic environment for prospective homebuyers, the future is bright for factory-built housing solutions to help more families achieve home ownership." Financial Results In the Factory-built housing segment, the increase in Net revenue was due to higher home sales volume as a result of the American Homestar acquisition in the third quarter of the prior year and an increase in Net revenue per home sold. Financial services segment Net revenue increased primarily due to increased loan sales in the mortgage division and unrealized gains on the Financial services equity portfolio. In the factory-built housing segment, Gross profit increased due to an increase in home sales volume and price, partially offset by higher input costs. Selling, general and administrative expenses were higher due to the addition of American Homestar, and to a lesser extent, increases in compensation and employee related expenses, as well as sales and marketing expenses. In the financial services segment, Gross profit and Income from operations increased primarily due to lower claims losses, unrealized gains on the investment portfolio, and to a lesser extent, the addition of American Homestar in the current year. Selling, general and administrative expenses increased partially due to a headcount increase to handle increased loan activity due to a forward flow agreement signed in the fourth quarter of the prior year and higher incentive compensation on better results. Conference Call Details Cavco's management will hold a conference call to review these results tomorrow, July 31, 2026, 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. 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 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. 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 to 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 28, 2026 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.

This article first appeared on GuruFocus. Net Revenue: $550.1 million, up 8.2% from $508.4 million in the prior year period. Factory-Built Housing Segment Revenue: $528 million, up 8.2% from $487.9 million in the prior year quarter. Financial Services Segment Revenue: $22.1 million, up 7.7% from $20.5 million in the prior year quarter. Consolidated Gross Margin: 23.1%, up from 22.8% in the same period last year. Factory-Built Housing Gross Profit Margin: 21.2%, down from 22.3% in Q4 of 2025. Financial Services Gross Margin: 69.4%, up from 36.8% in Q4 of 2025. Selling, General and Administrative Expenses: $75.6 million or 13.7% of net revenue, down from $77.5 million or 15.2% of net revenue last year. Net Income: $42.5 million, up from $36.3 million in the same quarter of the prior year. Diluted Earnings Per Share: $5.42, up from $4.47 in last year's fourth quarter. Operating Cash Flow: $67.4 million. Share Repurchases: $30 million during the quarter, with $160 million completed for the year. Unrestricted Cash Balance: $237 million at year-end. Is CVCO fairly valued? Test your thesis with our free DCF calculator. Release Date: May 22, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Cavco Industries Inc (NASDAQ:CVCO) achieved an all-time high of 20,842 homes shipped in a year where total industry HUD shipments were slightly down. Operating income increased by 14%, excluding a $10 million noncash write-off from the previous year. The company successfully integrated American Homestar, with tangible cost synergies exceeding $10 million annually. Financial Services segment showed strong performance, with increased loan originations and favorable insurance results. Cavco Industries Inc (NASDAQ:CVCO) broke ground on a new high-capacity plant in Phoenix, indicating confidence in future growth and market expansion. Sequential revenue and operating income were down by 5% and 6%, respectively, compared to the previous quarter. Capacity utilization for the quarter was approximately 70%, indicating underutilization of production capabilities. Average selling price decreased by about 2% sequentially due to a mix shift towards single-section homes. The effective income tax rate increased to 22.2% from 15.4% in the prior year, driven by lower tax credits and reduced stock-based compensation benefits. The IRS code has eliminated Energy Star tax credits effective June 30, 2026, which will impact future financial benefits. Q: Can you discuss the sequential improvement in March and whether it continued into April and May in terms of traffic and order rates? Also, which geographic areas showed the most improvement? A: March saw a significant pickup in wholesale orders across all regions, particularly in the Northwest, Southwest, and Texas. This trend continued into April, with order rates maintaining March levels and backlog weeks improving in all regions. May typically sees a retail slowdown, but no significant drop-off from March and April's pace has been observed. (William Boor, CEO) Q: Are you planning to increase production rates in fiscal Q1 due to the recent order uptick? A: Yes, the improved backlog across the board allows us to increase production rates, especially in plants that had been holding back due to low backlogs. We aim to produce at the level of incoming orders, maintaining a healthy backlog range. (William Boor, CEO) Q: How are tariffs and material costs affecting your gross margins, particularly in Factory-Built Housing? A: Tariffs are impacting our costs, but the effect is tied to demand levels for materials like lumber and steel. Recent increases in lumber prices and expected steel price hikes will pressure margins. However, stable product pricing and strong Financial Services margins have helped lift consolidated gross margins. (Allison Aden, CFO) Q: Can you elaborate on the demand environment and how it compares to a normal year? A: The spring selling season showed a delayed but solid pickup in March, with orders increasing significantly. This was a positive indicator, especially after a slow start due to weather impacts in January and February. The demand environment by the end of the quarter was encouraging. (William Boor, CEO) Q: What are the expected benefits and timeline for the ROAD to Housing Act? A: The Act includes several benefits, such as the removal of permanent chassis requirements, zoning improvements, and modernization of FHA Title 1 financing. These changes will take time to implement but are expected to significantly impact the industry by improving funding availability and reducing regulatory barriers. (William Boor, CEO) For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Image source: The Motley Fool. Friday, May 22, 2026 at 1 p.m. ET President and Chief Executive Officer — William C. Boor Executive Vice President and Chief Financial Officer — Allison K. Aden Chief Accounting Officer — Paul W. Bigbee Corporate Controller and Investor Relations — Mark Fusler Operator: Thank you for standing by, and welcome to the CAVCO Industries Fourth Quarter 26 Earnings Call and Webcast. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. To ask a question during this session, you will need to press *11 on your telephone. If your question has been answered and you would like to remove yourself from the queue, simply press *11 again. As a reminder, today's program is being recorded. And now I would like to introduce your host for today's program, Mark Fusler, Corporate Controller and Investor Relations. Please go ahead, sir. Mark Fusler: Good day, and thank you for joining us for Capital Industries' fourth Quarter Fiscal Year 26 Earnings Conference Call. During this call, you will be hearing from Bill Boor, President and Chief Executive Officer Allison Aden, Executive Vice President and Chief Financial Officer and Paul W. Bigbee, Chief Accounting Officer. Before we begin, we would like to remind you that the comments made during this call by management may contain forward-looking statements. Forward-looking statements include statements about our future and expected business and financial performance, and are not promises or guarantees of future performance. There 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 market conditions. All forward-looking statements involve risks and uncertainties, which could affect Capco'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 sec.gov. This conference call also contains time sensitive information that is accurate only as of the date of this live broadcast, Friday, 05/22/2026. 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 would like to turn the call over to Bill Boor, President and Chief Executive Officer. Bill? William C. Boor: Welcome, and thank you for joining us today to review our fourth quarter results for fiscal 26. I want to take a few minutes to talk about the fiscal year and then we will get into the fourth quarter discussion. The headline is that in a year in which total industry HUD shipments were down slightly, we hit an all time high of 20.8 thousand homes shipped. Operating income was up 14%, excluding a $10 million non-cash write-off last year. In the broader picture, our peak to peak ability to deliver homes is up significantly due to the continuous improvement in our plants, the major plant modernization projects we completed in recent years, and the acquisition of American HomeStar. And as I will touch on in a moment, this time last year, our backlogs were declining going into Q1. While this year, they are increasing. In fiscal 26, we also continued a multiyear strategy to transform how we go to market. We built on our unified branding under the Cavco name by rolling out our Which makes it much easier for potential buyers to shop our homes Nationwide product line framework in Q4. and for our dealer partners to help those customers find the homes that best fit their needs. We believe these advancements that began several years ago, a redesign of digital marketing have significantly improved our position and will contribute to market share growth in an industry we also expect to be growing in the coming years. Turning to the quarter, sequential revenue was down 5%, and operating income was down 6%. However, both were up compared to last year by 833% respectively. Again, last year's quarter had a $10 million intangible write-down. So, excluding that, this year, the quarter operating profit was up about 6% year over year. While Q4 weather is expected to be challenging across the Northern US, this quarter got off to a slow start with unusual weather across the Southern States. We lost production days and market time in January and early February. Our capacity utilization for the quarter was approximately 70% and our production pace was generally in balance with orders through most of the quarter. We then saw a large pickup in wholesale orders in March, which expanded backlogs late in the quarter. The order pickup was big enough that we finished the quarter with almost 25% more floors in the backlog than when we started it. And we finished with 5 to 7 weeks of backlog, which, again, was growing as we closed out the quarter. Average selling price was down about 2% sequentially. If we break that apart, our company owned retail sales were healthy. But down from a very strong third quarter. This decrease in the percentage of our integrated sales coupled with a mix shift towards single section homes accounted for the sequential ASP drop. Product pricing was essentially flat. We feel good about what we are seeing with retail traffic, wholesale orders, and backlog growth. The combination of these 3 positive signals gives us the opportunity to push some production where lower backlogs had been holding our plants back. Touching on American HomeStar, we are through a lot of the operational integration with most of the work ahead focused on systems integration. As we reported last quarter, our internal view of tangible cost synergies had increased from our deal assumptions, and was in excess of $10 million annually. That view still holds. And in Q4, we were already very close to that pace. We still see more opportunity ahead to exceed $10 million mostly in SG&A and additional purchasing savings. In financial services, both the lending and insurance operations contribute to another strong quarter. We reached a new agreement with a purchaser of home only loans that allowed us to ramp up originations and sell some loans off the balance sheet. The investor agreement will enable us to continue ramping loan originations and sales going forward. In insurance, we had continued strong results from a combination of underwriting changes we have talked about in previous quarters, and continued favorable claims experience. Now shifting back to manufacturing, I wanna touch on the press release we issued Wednesday evening announcing that we broke ground on a new plan in the fourth quarter. This decision is part of an overall Southwest operation strategy to create growth and optionality in the region. It will be a high capacity state of the art plant here in the Phoenix area with 1 line initially and the infrastructure in place for a second line in the future. We have been very consistent in our strong conviction about the growing role of factory built housing in meeting the supply needs of the nation and in our capital allocation approach. We are confident this is a solid investment that will enable us to expand our selling area in the Southwest. We are expecting the Cavco El Mirage plant to be operational in mid-calendar year 2027. Continuing on the topic of capital allocation, strong cash generated by operations enabled us to deploy over $360 million in the fiscal year. We continued our share repurchases during quarter with another $30 million used to buy back company stock. For the year, we completed a $160 million of share repurchases We also invested $173 million to acquire American HomeStar, and an additional $35 million to expand and modernize our existing plants. And we finished the year with a healthy unrestricted cash balance of $237 million. Finally, I wanna comment briefly on the legislation passed by the House this week by a 396-to-13 vote. The prominence of American housing in the bill the bipartisan awareness of the critical role our homes need to play in resolving the housing supply crisis. Various parts of the bill will enable product innovation, reduce regulatory confusion, improve consumer and commercial funding availability, and encourage zoning improvement. I feel I have had a front row seat to watch this work develop over the last several years, and I wanna acknowledge our industry association leaders at MHI. Who worked over a long period of time, first to increase awareness of our solutions in DC, and then ensure the legislation itself protected and enhanced the industry's ability to make more homes. As you would expect, there were potential traps in the process and the folks at MHI were masterful working through it all. it is expected that this bill will be approved by the Senate and the White House has already issued a statement of support. The benefits will take time to fully develop, but they are real. And they will be impactful. Now I will turn it over to Allison to give more details on the financial results. Allison K. Aden: Thank you, Bill. Net revenue for the fourth fiscal quarter of 26 was $550.1 million up 8.2% compared to $508.4 million during the prior year period. Sequentially, net revenues decreased $30.9 million driven by a decrease in both units sold and average revenue per home sold. Within the factory built housing segment, net revenue is $528 million up $40.2 million or 8.2% from $487.9 million in the prior year quarter. The increase was primarily due to the addition of American HomeStar, and the 7.8% in legacy average revenue per home sold. Partially offset by an 8.9% decrease in legacy home units sold. The increase in legacy average revenue per home was primarily due to a higher proportion of homes sold through our company owned stores product pricing increases, and more multi wides in the mix. Financial Services segment net revenue was $22.1 million up $1.6 million or 7.7%. from $20.5 million in the prior year quarter. The increase was due to greater loan sales after securing a long term investor agreement and to a lesser extent, the addition of American HomeStar Financial Services. Consolidated gross margins in the fourth fiscal quarter as a percentage of net revenue was 23.1% up from 22.8% in the same period last year. In the factory built housing segment, the gross profit was 21.2% in Q4 of 26 down from 22.3% in Q4 of 25. The reduction is due to higher costs, per unit sold. Financial services gross margin as a percentage of revenue increased to 69.4% in Q4 of 26 from 36.8% in Q4 of 25. This increase is primarily due to the growing impact of rate increases and underwriting changes on policies in addition to higher loan sales. Selling, general, and administrative expenses in the fourth quarter were $75.6 million or 13.7% of net revenue. Compared to $77.5 million or 15.2% of net revenue during the same quarter last year. The decrease in these expenses was primarily due to the $10 million write-off of tradename values as part of the rebranding project in the prior year. Partially offset by the addition of American HomeStar. Interest income for the fourth quarter was $3.2 million down from $4.5 million in the prior year quarter. Resulting from lower cash balances after the purchase of American HomeStar. Pretax profit was up 27.1% this quarter to $54.6 million from $42.9 million for the prior year period. The effective income tax rate was 22.2% for the fourth fiscal quarter, compared to 15.4% in the same period of the prior year. The increase in the effective tax rate was primarily driven by lower tax credits and reduced stock based compensation benefit related to the prior year quarter. As a reminder, we benefited from the ENERGY STAR tax credit program. The IRS code eliminated these credits effective 6/30/2026 and as a result, we will not benefit from these credits in the future. Net income was $42.5 million compared to $36.3 million in the same quarter of the prior year. And diluted earnings per share this quarter was $5.42 versus $4.47 in last year's fourth quarter. Before we discuss the balance sheet, I would like to take a minute to talk about capital allocation. During the quarter, we repurchased $30 million of common shares under our Board authorized share repurchase program. In addition, the board of directors recently extended the authorization by an additional $150 million reflecting confidence in our strong cash generation. Leaving approximately $218 million under authorization for repurchases. Our capital deployment will continue to align with our strategic priorities which include enhancing our plant facilities, pursuing additional acquisitions, and consistently assessing opportunities within our lending operation. Share buybacks will then serve as a mechanism to prudently manage our balance sheet after considering these initiatives. Now I will turn it over to Paul to discuss the balance sheet. Paul W. Bigbee: Thank you, Allison. In the quarter, cash and restricted cash increased $15.1 million bringing our balance to $257.6 million Operating cash flow provided $67.4 million consisting of $50.2 million in net income and noncash adjustments and $17.2 million from working capital. Investing activities used $22.6 million primarily for plant capital expenditures. While financing activities used $30 million driven by share repurchases. When we compare the 3/28/2026 balance sheet to 3/29/2025, several of the balances increased from the addition of American HomeStar. Including inventories, property, plant, and equipment, goodwill and intangibles, accrued liabilities, and deferred income taxes. The decrease in short term consumer loans receivable is due to the increase in loan sales after securing a long term agreement to sell loans to a third party investor. Long term investments increase from more fixed income and equity holdings at the insurance subsidiary. Legacy accrued expenses and other current liabilities increased from higher customer deposits and volume rebate and warranty accruals. Which were partially offset by lower insurance loss reserves. Treasury stock increased due to stock buybacks executed in the period. With that, I will turn it back to Bill. William C. Boor: Okay. Thank you, Paul. I want to take a minute before going to Q&A to talk about operating excellence. In manufacturing, that shows itself in volume certainly. But a great indicator of the quality of an operation is its safety culture and results. Our recordable injury rate has improved each of the last 5 years. Over that period, we reduced our injury rate 65%. And while we started above the industry benchmark, we have been well below it each of the last 4 years. Again, I bring this up partly because in addition to investors, our employees sometimes tune into these calls and I really wanna acknowledge the focus they have brought to this priority and their important accomplishments. But I also bring it up for the external audience to understand that these types of safety improvements are indicative of the focus we have on executing the fundamentals with excellence, I am as proud of these safety results as anything else we have accomplished over the past several years. I could cite examples of operational process improvement across all our operations from retail's intense focus on training, to the work that insurance has done to rethink their operation that is led to significantly improved results. To the work in CountryPlace to source new investors and improve our facing systems. Periodically, I think it is important to highlight examples like these that say something about the real improvement over extended periods of time. That can be overlooked in our quarterly cadence. These are examples of that intense focus on day in and day out process execution and how that leads to the outcome of improving business results over time. So, Jonathan, I guess with that, why do not we go ahead and open it up for questions? Operator: Certainly. And our first question for today comes from the line of Dan Moore from CJS Securities. Your question please. Analyst (Daniel Moore): Yes. Bill, Allison, Paul, good afternoon. I should say good morning. Thanks for calling, and thanks for taking your questions. Yeah. Maybe just talk about the sequential improvement we saw in March and whether that held true into April and thus far in May in terms of traffic, order rate, sequentially? And then where are you seeing the most improvement from a geographic perspective and where are there, you know, maybe some areas that are still a little bit sluggish? William C. Boor: Yeah. I will take a initial stab at that. The yeah. It really was a quarter where, you know, we always talked in the third quarter call about being anxious to see how the spring selling season shapes up. And January and February, I would not necessarily say they were slow, but they were not showing a significant pickup. And then it just kind of came in March And so we felt that was a real positive. It was a significant jump up and to be honest, it occurred across the board in every region. Some of the stronger results, but this is all relative. It was pretty noticeable literally in every region that we track. Some of the strongest results, if you differentiate, were in the Northwest, the Southwest, and Texas. But, I would not take anything away from the significant uptick that we saw in the other the other regions. Dan, can you I know I did not address all your questions. Can you remind me of your other question? Analyst (Daniel Moore): Yeah. Just in into April and thus far in May, whether you are seeing, you know, steady from March, continued improvement across those markets? What are we seeing sequentially? William C. Boor: Yeah. Yeah, it is. As you guys know, we do not like to get too far in the forward or into the current quarter, but this quarter the earnings announcement comes kind of late, so it is fair to give a little bit of an indication how this quarter is shaping up. So I will continue on that discussion. That April order rates stayed up at that, you know, relatively in that March level. And I guess 1 of the best indicators of continued strength is that I am looking at our backlog weeks in all of our regions. And each 1 of those showed an improvement in backlog through April. So we did see it. It was not just a blip. We did see it pick up you know, May, we are still in the middle of. I can tell you, you know, we talked about the spring selling season in retail, which is kind of the lead Right? You get a sale in retail and that causes wholesale order that eventually gets built. Retail typically hitting into May, you will see a little bit of a slowdown as people are focused on other things. But I have not really looked that closely at how May's gonna come out in total, and I have not sensed that we feel like something really died off from the pace that we are seeing in March and April. So all seem to be pretty positive indicators, and I am gonna wanna temper those comments as I think I always should, and you guys know this. it is still an uncertain environment out there, but what we saw in March and April in orders and backlog growth were pretty encouraging. Analyst (Daniel Moore): Super helpful. And as that ties into production, sound like in your prepared remarks, that gave you confidence to pick up production rates a bit as we move into fiscal Q1. Just want to make sure I am hearing that correctly and whether or not you expect to see some level of increase in shipments sequentially Q1 versus Q4? William C. Boor: Yeah. As you guys know, when we talk about backlog in aggregate, it is kind of the average of a system that has a lot of plants in different markets in different stages of the cycle. And we have been in that mode for quite a while where we have had some plants that have had plenty of backlog for quite a while, and so they have been running you know, at a pretty high level. And we have had other plants across the country that have had to hold it back a little bit because of low backlogs. With this across the board improvement in backlogs in generally, I think it does give us the ability for some of those plants that have been riding the brake a little bit to let it go. So, yeah, I do expect us to you know, increase. We are not we are not in business to see our backlogs to get to extraordinarily high levels. We would like with the range that they are in now in total and we wanna be producing at that level of orders. Analyst (Daniel Moore): Really helpful. And maybe 1 more, and I will jump back in queue. Talk about what you are expecting or seeing from tariffs And then just more generally, expectations for gross margins, particularly in factory built housing you know, fiscal Q1 and the next quarter or 2 relative to the 21.2%, I think, we did in fiscal Q4. Allison K. Aden: Yes. Thanks for that. It gives us a chance really to talk about the impact of tariffs. Which we, consistent with our comments last quarter, we know is having an upward impact on our COGS. it is really difficult to precisely estimate the amount of the impact. But I would say that the impact this quarter is very much consistent with last quarter. And, really, the reason for, the challenges is simply the supplier's ability to pass through tariffs is tightly tied to the function of the level of demand for their products. So the demand for lumber or steel starts to heat up. We are we are likely gonna see a more of a fulsome impact from tariffs. And if we just think about, you know, how that relates to margins, as we have said in the past, it is difficult, to project, forward on margins. But indeed, a key component that does impact our margins is the cost of these commodities. And primarily, that is lumber, that is OSB. And for the last several quarters, we have been benefiting from pretty low and, I would call it, stable lumber and OSB prices. But recently, we have seen lumber started to tick up. And as we all watch, the indexes for both lumber and those commodities, where, really, we can expect any changes that we do see to roll through our COGS cost of goods about 60 days later. I think important development is that we are expecting a pretty negative impact from steel producers who are starting to really announce price increases and stringent allocation limit limitations. Just as a balancing factor, right, our margins are also dependent upon pricing. And, you know, it is been a good fact pattern to see overall product price somewhat stabilized during the last 2 quarters. But we are in a position really at this point to call that a trend as it exit certainly varies as we have talked about pricing can vary by geographical location. And then just to tie in some of Bill's comments on financial services, our margins also depend on the activity in our financial services segment. And most notably our insurance, division. And we certainly have seen strong financial services margins in the recent quarters that have helped lift our consolidated gross margins. So just kind of summarizing that, we certainly do acknowledge that the higher material input cost are expected and, will pressure our margins. We are gonna continue to stay very focused on maintaining our low fixed cost and being able to flex our variable cost, you know, with the increase in production. So, hopefully, that helps a bit. Analyst (Daniel Moore): Thank you, Allison. I will jump back with any follow ups. Appreciate it. Operator: It. Thank you. Thank you. And our next question comes from the line of Greg Palm from Craig-Hallum. Your question please. Analyst (Greg Palm): Yes. Thanks for taking the questions. I wanted to go back and, maybe go over the demand environment a little bit more, you know, spring, seasonality wise, you know, usually, you see some improvement. So I guess I am curious Was it better than you expected? Like, can you just help maybe characterize kind of what you saw in March and April versus what you would normally see in a, you know, call it normal year? William C. Boor: Yeah. I think you know, when we look at just on the wholesale side, I think you know, January is usually the slow month coming out of the holidays. Nothing surprising there. And we did get nailed across the South. I mean, 1 likes to talk about weather in these calls in any context, but we lost production in some plants and no 1 was out buying homes for a little while. And kind of the late January, early February time frame. So living through that, it was not surprising to see kind of orders at the level they were. And know, in a way and I am not sure this is the right characterization. In a way, I feel like we got a pretty good spring. It just showed up really late in the order numbers. And so seeing March increase the way it did, it just looked to me like a little bit of a delayed spring, but a pretty solid 1. And, you know, it is like I said a minute ago, it kind of all starts in retail. And when retail starts selling homes, they start placing orders. And with that stuff happening late in the quarter, that is why for us, you saw more of a backlog increase than necessarily a shift volume increase. But I yeah. I mean, Greg, I think, you know, to kind of be more concise than that wordy answer, I would say that we felt pretty good about it by the time the quarter ended and as we flowed into to April. Analyst (Greg Palm): Yep. Okay. that is that is fair color. And then in terms of you talked about geographic mix. What did you see across, like, the community channel to what you saw, or what you are seeing across kind of retail right now? William C. Boor: Yeah. I appreciate that because did not think to comment on it in the prepared remarks. But it kinda ties back to discussions we had last quarter. Right, Greg? Last quarter, we told folks that communities were down a little bit for us. But I also tried to emphasize that when you look quarter to quarter at community volume, it can be bouncy even when nothing in particular is really going on. that is noteworthy. So to follow-up that comment last quarter, this quarter, we saw communities bounce back up. So I think it helped just to confirm that Q3 was not you know, was not a trend or was not something wrong in the community channel. And we saw it bounce back pretty healthily this past quarter. So when you got flattish volume, what does that mean about the channels? Some of the offsetting drop was in the dealer channel this time. And that, again, I would not tell you know, we are kind of reporting the facts but I would not tell people that we note anything that is really necessarily wrong in the dealer channel. I think that those late orders a lot of those were coming through that dealer channel. And so I think we will just see this as kinda normal variation within the channels. So communities bounce back a bit. Analyst (Greg Palm): I expect retail will because they were the source of a lot of our orders. Okay. Understood. And then, you know, last 1, you kind of alluded to the regulatory stuff, Road to Housing Act. And, you know, help us understand the timeline of some of these, you know, perceived benefits that you might see. And I do not know if there is a way for you to kinda you know, rank order what you are focused on the most. But just curious to get your thoughts there. William C. Boor: Yeah. that is a good challenge to do that here on the fly. Yeah. I think, you know, a lot has been talked about the permanent chassis removal. We are gonna you know, I will tell you 1 thing about the permanent chassis, which I was happy to see. When we talked to dealers, our internal and external, I was actually a bit surprised when this chassis discussion started how many of our retail folks were really kind of positive and excited about the prospect. So we are in good shape. I mean, when you make a modular home, you are generally making it to have a removable chassis. And so our factories that do modular kind of from an engineering and factory perspective are in a position to make HUD code homes without a chassis as soon as that, you know, law gets changed, the wording gets changed in the definition, And as I said before, as soon as states kind of conform to it, So it will take a little bit of time. And I think excuse my cough. I think you know, we will probably be talking about it every quarter because it is interesting and it is a future opportunity. But it will kind of layer in over time. And I think it is gonna be significant in the long term. The zoning you know, different things can happen at the federal, state, and local level as far as what can be done to help the supply of factory built housing. And the federal has got the message. I mean, when I talk to folks in DC, they are very aware of the zoning challenges, but those decisions largely get made at the local level. This legislation has some aspects to it that talk about providing kind of carrots in the form of funding for municipalities that enable or take down zoning barriers. that is the battle we have been waging for years and years. So how much that takes root will be interesting to watch, but I think we talked about it last quarter that some states are chiming in on this as well. We have got some legislation coming it is already been passed in both Texas and Kentucky in particular. That kind of even the playing field. Take away the discriminatory barriers to factory built housing. So I think that is a pretty prominent 1 that maybe will take a little longer just because on I have learned not to be too optimistic about zoning. Solutions, but I think we are pushing in the right direction. The primacy of HUD as our primary regulator that is a little bit probably less about volume. Although it will impact it will help keep bad regulations that cause the cost of our homes to go up. It will keep that at bay. And we will be able to work with HUD to improve the houses over time in ways that are cost efficient. So that is a little bit less about volume, I guess. But a really important aspect of the of the overall law. And then the other 1 I would touch on, which I have always kinda harped on in DC whenever I get it. Anyone's ear is they are pushing for FHA title 1 financing, which is home only financing to I will use the term, modernize their programs there is almost no loans done for home only purchases through FHA programs And you know, that is just flat out not right. And so the law is pushing FH to modernize things like their loan limits, eligibility, and things like that. that is real funding availability cost of funding improvement for our customers, which is critical. So I am not sure I really prioritize them, and I am not sure if I gave a sense of timing. I think these things do take time, but I am also very I think they are huge. Improvements. So I think there are things that over time are gonna make a real difference. Alright. Appreciate those thoughts. Thanks. Yeah. As you jump it off, 1 other thing I think I will touch on people have heard a lot about the institutional investor. Dan and a lot of that is around the build to rent or purchase to rent model that a lot of institutional investors have been doing. Probably a topic for separate discussion at some point if we want to sit around and just talk about opinions about whether that is useful or not. I will stay out of that space. But it was a real threat to--like it, unwittingly, it was a real threat to the home or the community ownership model that is been so successful for manufactured housing over time, the land lease communities. Because you can imagine if they got defined as an institutional investor, they would not be buying homes. And, again, given a lot of credit to MHI, we got an exemption a clear exemption from any institutional ban on the purchase of homes for manufactured housing, which is just gigantic. I mean, that averted a real mess. So wanted to throw that in as well because that is been really important here. Operator: Thank you. And our next question comes from the line of Jesse Lederman from Zelman and Associates. Your question please. Analyst: Hey. Thanks for taking my questions. Bill, I would love to talk a little bit more about the El Mirage project Obviously, pretty groundbreaking. No pun intended. You know, building some more capacity here. To start the call, you kinda talked about the peak to peak capacity relative to entering the year is already a bit higher. So, like, layering that in plus your at 70% capacity nationally now. Why do you feel like adding new capacity and adding a new factory is, you know, a good use of funds, and what are the demand assumptions that support needing the additional capacity in that area? William C. Boor: Yeah. it is I mean, it is a very fair and good question, Jesse. We--I will start by saying this. We are very in my opinion, we look at investments whether they are plant modernization projects or acquisitions or something as significant as a new plant like this we look at them in a very with a lot of scrutiny. You know, we are very focused on whether we believe we can get an appropriate return for the risk and making sure that we are investing above the cost of capital. So you will have to take it on faith, but you can rest assured that we believe this is a return project. Now it is we do not make a project decision like this that will not start up for over another year and will be a you know, very long lived asset. It will be in the system for decades. We do not make that based on how we are feeling about this quarter or what the last year looked like as far as demand. And I will not I will say this because I think it is the best summary, but I do not mean to imply it is this simple. Jesse Lederman: We made this decision because there is a 4 million to 6 million housing unit deficit in the country, and we think factory built housing is a solution. So if this industry gets to whatever full capacity is because we start to unleash that demand. William C. Boor: this industry, you know, will not have enough capacity to meet that opportunity and that need. So I think we are gonna need greenfield capacity and I am clearly thinking longer term than this quarterly call. And it was with that strategic conviction that we took this on it is going to give us some optionality in the region. You know, we look at it not on a single plant with blinders. We look at it in perspective to the other plants we have got in the region. And we look at our market opportunities Frankly, in Arizona, historically, if you look through time, we have limited our selling area because we did not wanna generate long term dealer relationships in farther away markets like up into Colorado and places like that, if we could not continue to supply those folks when the market was strong. And so we have kind of self-limited a little bit in the Southwest over time. And 1 of the opportunities this is going to open up for us is to actually push into some New geographies with some distribution. So I hope that helps give kind of a flavor for at least how we are thinking about it. I understand and I think it is a very fair question about you know, how do you pull the trigger on new capacity when you have been under you know, full capacity for a while and again, my most simple answer is 4 million to 6 million unit housing deficit. Analyst: Yeah. that is a great response. Though. I appreciate that. it is you know, long term decision that you made, and it is helpful to understand that even in the near term, you think there is some there is some demand and areas around region where you are already operating that can be unlocked. Yep. Not sure if these next couple are for you or Allison, but kind of wanna understand 1, the investment in the facility overall, if you are willing to share And then 2, how the like, the margin drag on the p and l kind of as you are ramping up to facility to capacity, how we should think about the timing of that maybe in calendar 2027 and beyond. Kind of what that, what that looks like and how to think through that. Allison K. Aden: Yeah. I think that let's address the margin because as we bring on an additional line consistently, And we will ramp we will ramp that lineup. But it is gonna be 1 line of multiple lines that we have. So we obviously would scale the plant in total Right? So we scale we would scale the direct labor. We would scale the support. So I would not anticipate that bringing on additional capacity in our network in the way that we are able to monitor very closely KPIs would create a any kind of a noticeable drag. Obviously, there will be a ramp up period as they are all as there always is implants, but we are, you know, so skilled at doing this and focusing on just the core manufacturing key indicators and metrics, then we will do it in a measured fashion. it is something that we have done before, it is something that we have proven we can do. So we are actually pretty excited about it and have you know, plenty of time to plan for it as it comes online in a very methodical a very methodical manner. William C. Boor: I think that is a good point that is I was gonna say maybe not to scale, but I am not even sure that is true. Over the last several years, they were not complete greenfields. But we brought Glendale was a completely new plan. I mean, why I say it was a complete greenfield? We bought a building that was already you know, the walls were up. But it had never been used for any other purpose. And we found it in saw that we could use it for park models, and so we essentially added green at Glendale a few years ago And similarly, the hand the Hamlet deal, which is kind of half acquisition, half greenfield, we bought a plant that was being used to make volumetric So, like, the multiunit 5 story hotel apartment type construction. And we bought that and retooled it. So in a way, that was bringing new volume into the manufactured housing single family industry. So we do have a couple examples in the last 4 or 5 years where we brought this stuff on and I think we have been pretty successful even we are not betting all the time that the market's gonna be flat out make everything you can make. So a lot of analysis, a lot of scenario planning, a lot of making sure that we were comfortable we could get an acceptable return and grow the market. Analyst: Absolutely. Thanks so much, guys. Appreciate the color as always. Yeah. Thanks, Jesse. Operator: Thank you. And as a reminder, if you do have a question at this time, please press Our next question is a follow-up from the line of Dan Moore from CJS Securities. Your question please. Analyst (Daniel Moore): Thanks again, Bill and Allison. Just 1 or 2 more. 1 of your Texas based competitors recently cited, you know, pretty interesting incremental demand in that market for workforce housing related to both data center build out as well as energy. Wondering what you are seeing, you know, or expect to see as it relates to that in Texas, which is considerable market for you. William C. Boor: Yeah. I do not have the benefit of exactly what they said, but I would probably echo the statements. We have seen some market opportunities particularly around energy. So, yeah, I think and I do know, I made my comments earlier when asked about regions that Texas was 1 of the areas that we have seen orders kind of pick up relative to even other healthy regions. Analyst (Daniel Moore): Helpful. And 1 more. Just anything you can expand on as it relates to the agreement with new third party lender How should we think about that advancing the trajectory or margin opportunity of financial services And any specifics around you know, I assume you are yeah. there is quarterly or annual specified amounts of loans that you are supposed to generate. I do not know what you are willing to share there, but anything would be helpful. Thank you. Allison K. Aden: Yeah. Sure. I will turn down. I will take this. So the forward flow agreement includes a minimum commitment of approximately 25 million of originated loans per quarter. Over a 2 year period. And if then if we talk about it from an economic standpoint, it is consistent with our existing gain on sale transaction. So we are not really seeing a material change in our margin profile. Think strategically, we are looking at this more as more as increasing our lending capacity in a capital efficient manner. Rather than really a market margin expansion. William C. Boor: Yeah. Just to kind of echo and follow under those comments that I believe over time we have talked with folks that our capital allocation, we are willing within, you know, we are not talking about changing our balance sheet to be a lender, but we are willing at times when there is no buyers of our loans to use some of our balance sheet. To originate loans and hold them on the balance sheet. And we did a little bit of that. I think it got up to--I will look around the table to confirm my number, into the mid to high thirties of loans that we have on our balance sheet. And we did that with the belief that, 1, at some point in time, we are gonna find investors are gonna be interested in those loans. And 2, if we do not originate good loans, then that is not a bad plan b. But our plan a is always to originate loans for other investors. And I will tell you that folks at CountryPlace these are not simple, you know, short discussions to get these in place. They did a really good job working with this investor to develop a partnership, basically. And that gives us the certainty now to increase our originations And, and to Paul's point, be even more capital efficient because we will originate loans and we will be selling them off. So the pace of activity in CountryPlace will go up, but the balance sheet will not grow. Accordingly. So this is kind of you know, what we had planned for planned and hoped for when we did some loans onto our own balance sheet over the last couple of years. Analyst (Daniel Moore): Alright. Super helpful. Greg. Appreciate the color. Operator: Thank you. And our next question comes from the line of Ian Lapey from Gabelli Funds. Your question please. Analyst (Ian Lapie): Hi. Good afternoon. Congratulations on a good quarter and year. Thanks, Ian. Oh, you are welcome. it is been about a year since the brand realignment. Can you just talk about how you think that is gone so far? William C. Boor: Ian, I think it is gone really well. We should probably do a poll of independent dealers and even our internal salespeople, but I think it has gone very well rebranding all of our plants under Cavco. it is created so much more opportunity for us to market. Kind of more across regions. And then, Ian, it is kind of this progression that, again, I could talk all day about, but this progression we have had of digital marketing,, to get everything under the same brand, And then we did this product line work this year, which we just kind of unveiled in Q4 which takes all the products that any 1 of our factories makes, and they can be cat based on their characteristics put within 1 of these product lines. So it is really interesting in my opinion what we have done, and I am excited about it that we are not telling our plants to make different products. We expect our plants to make products that are good for their local market. But now we are putting an umbrella structure on and so our marketing team can market on a broader base you know, a given product line and we know our customers can then shop the product line that makes most sense for them and find homes in their area that fit within that product line. So it is it is the branding has been a critical part of getting to this point. And I think the acceptance, you know, 1 of the things you know you are gonna have to manage through when you rebrand like that is you know, and I will just use this as a glaring example that the independent dealers that we have had relationships with for decades have been used to selling whatever it is, Fleetwood homes or Palm Harbor homes. To them, that is their partnership. And we ask them to shift their mindset to selling Cavco homes. And it took some conversation but I think people have gotten it. They have seen the value in it. And I believe that most of those folks, if not you know, the vast majority of those folks in my opinion, get it now and they are happy with the change. Analyst (Ian Lapie): Okay. Greg. And then on the CountryPlace investor agreement, are these only your homes? Are they only at your retailers? Are they at independent retailers? William C. Boor: Yeah. They are--oh, sorry. Analyst (Ian Lapie): Go No. Go ahead. I interrupted you. Oh, the other part was, is the investor ultimately planning, to securitize these or do you know? William C. Boor: Yeah. They are not solely for Capco produced homes. CountryPlace like most lenders, think, in the business, CountryPlace will lend on various manufacturers. Their relationship is really more with the dealer or the community operator. To give another opportunity, another option for the lender. Or for the source of the loan for their customers. So it is not exclusive to Cavco. We do at times and we have done this particularly within our owned retail. We do at times do special programs focused on Cavco homes, but they will lend to any manufacturer. And so the buyer of these loans is not solely getting loans on Capco Homes. And as far as their plans, probably out of my zone to comment and speculate a little I mean, the source of some of this money in this--we have seen this over time in the lending business, the source is really insurance company money that they are managing And so my understanding, my expectation is they are gonna portfolio those loans for the for the most part. Analyst (Ian Lapie): And I guess you could envision a scenario where you know, a buyer of manufactured homes gets enough that they wanna do a securitization. William C. Boor: But it you know, at our pace that we are talking about 25 million a month or a quarter. A quarter? You need to get up to call it, 200 million of a portfolio to have an efficient securitization. So it is certainly not a near term plan that they would be securitized. In my opinion in my opinion. Analyst (Ian Lapie): Yep. And then last 1. What are you expecting for CapEx this fiscal year? And I do not think you said how much the new plant would cost. I imagine that will be a big chunk of the CapEx this year. Allison K. Aden: Yeah. We are not we are not gonna go down into any plant specific information including the capital and the project, but your question and you can correct me if I am wrong. Your question might be around sustaining capital, or do you wanna know more broadly our estimate including projects? Yeah. Analyst (Ian Lapie): I mean, I think CapEx was $35 million in this fiscal year. And so Maybe. Curious as to next year. William C. Boor: Maybe the way for us to handle that and you guys might have the numbers specifically is separate sustaining from plant modernization investments. Yeah. Allison K. Aden: I think the way that we have thought of it before and you are right around the 35 million. When you I usually gauge a capital investment. When you look at the all in depreciation, rate, and because we are in a growth scenario, we are investing, you know, about $10 million in addition to what is being depreciated off every year. So that gets to your $35 million number. And then as Bill mentioned, you know, the amount that we are investing in El Mirage, we are not gonna come on specifically, but clearly, it is right down the fairway of our strategic capital allocation. We are investing in our plants and in our organic growth. So I think, you know, the good news here is that we continue to find investment asset opportunities for our cash that, you know, have a pretty strong IRR hurdle. William C. Boor: Yeah. Just to put an explanation point on that, 1 of the things we look at in a new investment including El Mirage, and it is not how we make it. We do not make the decision the simplistically, but we look at the capital spending per capacity unit as just a check and El Mirage is kind of right in the zone where we have done acquisitions and plant modernizations and other projects. So it is kind of a nice verification that we are feeling right about the return. But I think dividing you might have basically said this. I think dividing the 35, it includes both the sustaining capital and plant modernization, which we have been doing a good bit over the last several years. And I guess Make it trying to make sure I understand. I guess your comment is that our depreciation is about our sustaining capital. Allison K. Aden: Right. Plus some amount for growth as you would expect in our kind of where we are in a business model. William C. Boor: Okay. 35 or So 35 clearly is not sustaining capital. That had some serious projects in it. So Yep. Analyst (Ian Lapie): Okay. Greg. Thank you very much. Thanks, Ian. Operator: Thank you. This does conclude the question-and-answer session of today's program. I would like to hand the program back to Bill Boor for any further remarks. William C. Boor: All right. Thanks, Jonathan. I will just say a word or 2 here. As every CEO probably in every earnings call the last couple of years has said, uncertainty still feels like it is pretty high. With our macro backdrop, we need to be focused on reacting quickly to changing conditions rather than locking in on any prediction, and that is kind of how we run the business. Even in the near term, we have gotta be ready to turn. And go a different direction. I think that nimbleness is where our teams have really shown they really excelled over time. But against that continuing uncertainty for the moment, it is nice to see orders up and backlogs that allow us to lean in on throughput. We are intent on setting more shipment records in the future. I mean, I started off by talking about hitting an all time high for a fiscal year and hopefully, we will have many more records in the future in that regard. And that means we are making a bigger dent in the country's unmet need for quality affordable homes. So I really wanna thank everyone for joining us and for your interest in Cavco, and we will look forward to keeping you updated. Operator: Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day. Before you buy stock in Cavco Industries, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Cavco Industries wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $481,589!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,345,714!* Now, it’s worth noting Stock Advisor’s total average return is 993% — a market-crushing outperformance compared to 208% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of May 22, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Cavco (CVCO) Q4 2026 Earnings Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved an all-time high of 20.8 thousand homes shipped in fiscal 2026 despite a slight decline in total industry HUD shipments. Attributed peak-to-peak delivery capacity growth to continuous plant modernization, process improvements, and the successful acquisition of American HomeStar. Transformed market positioning through a unified Cavco branding strategy and a nationwide product line framework to simplify the consumer shopping experience. Experienced a slow start to Q4 due to unusual weather in the Southern U.S., but saw a significant wholesale order surge in March that expanded backlogs by nearly 25%. Reported that American HomeStar integration is progressing well, with tangible cost synergies already nearing the targeted $10 million annual pace. Maintained a strong focus on operational excellence, evidenced by a 65% reduction in recordable injury rates over the last five years. Emphasized that the decision to break ground on the new El Mirage plant is driven by the long-term 4 million to 6 million unit national housing deficit. Expects the new high-capacity El Mirage plant in Phoenix to be operational by mid-calendar year 2027, expanding the Southwest selling area. Anticipates margin pressure from rising material costs, specifically noting expected price increases and allocation limitations from steel producers. Assumes a 60-day lag for recent upticks in lumber and OSB commodity prices to impact the cost of goods sold. Projects long-term benefits from the House-passed housing bill, which is expected to modernize FHA Title 1 financing and reduce regulatory barriers. Guidance methodology remains focused on nimbleness and reacting to changing macro conditions rather than locking into specific long-term predictions. Noted the elimination of ENERGY STAR tax credits effective June 30, 2026, which will increase the future effective tax rate. Identified potential margin headwinds if demand for lumber or steel accelerates, allowing suppliers to pass through more of the tariff costs. Highlighted a successful legislative effort to secure a clear exemption for land-lease communities from potential institutional investor bans. Reported a $10 million non-cash write-off in the prior year related to trade name values during the rebranding project. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management confirmed that the March order strength continued through April, with backlog weeks improving across every region. The uptick in backlogs allows plants that were previously 'riding the brake' to increase production and throughput in the coming quarter. The agreement includes a minimum commitment of approximately 25 million of originated loans per quarter over two years. This partnership allows Cavco to increase lending capacity and sell loans off the balance sheet, improving capital efficiency without changing the margin profile. Management views the investment as a long-term play on the national housing shortage rather than a reaction to current quarterly demand. The new plant will allow Cavco to service previously self-limited geographies in the Southwest, such as Colorado, where they lacked consistent supply capability. The act's focus on permanent chassis removal for HUD homes is viewed positively by dealers and will be easily implemented by Cavco's modular-capable plants. Modernizing FHA Title 1 loan limits is expected to significantly improve funding availability and costs for home-only purchasers.

Interested in Cavco Industries, Inc.? Here are five stocks we like better. Cavco Industries reported a strong fiscal fourth quarter, with revenue up 8.2% year over year to $550.1 million and diluted EPS rising to $5.42 from $4.47. Profitability improved as pre-tax profit jumped 27.1%, helped by lower SG&A as a percentage of revenue. Management said orders recovered sharply in March after weather disruptions early in the quarter, lifting backlog to nearly 25% above the start of the quarter. April order rates stayed near March levels, suggesting the pickup was sustained rather than a one-time event. Cavco highlighted progress on American Homestar integration and financial services, while also outlining a new Arizona plant planned for mid-2027. The company remains active on capital allocation, including $160 million in buybacks during fiscal 2026 and a newly expanded $150 million repurchase authorization. Cavco's Future Looks Bright as Affordable Housing Demand Soars Cavco Industries (NASDAQ:CVCO) reported higher fourth-quarter revenue and profit compared with the prior year, while management said orders strengthened late in the period and backlogs improved heading into the new fiscal year. On the company’s fiscal fourth-quarter earnings call, President and CEO Bill Boor said Cavco shipped an all-time high 20,842 homes in fiscal 2026, despite total industry HUD shipments being down slightly. He said operating income for the year rose 14% when excluding a $10 million non-cash write-off recorded in the prior year. → CAVA Group’s Stock Looks Delicious After Strong Earnings Cavco's Ratings Upside, Cheaper Homes Alternative? “In the broader picture, our peak-to-peak ability to deliver homes is up significantly due to the continuous improvement in our plants, the major plant modernization projects we've completed in recent years, and the acquisition of American Homestar,” Boor said. Net revenue for the fiscal fourth quarter was $550.1 million, up 8.2% from $508.4 million in the prior-year period. Sequentially, revenue declined by $30.9 million due to lower units sold and lower average revenue per home sold. → SpaceX IPO: Opportunity? Or the Ultimate Hype Trade? Within the factory-built housing segment, net revenue was $528 million, up 8.2% from $487.9 million a year earlier. The company said the increase was driven primarily by the addition of American Homestar and a 7.8% increase in legacy average revenue per home sold, partly offset by an 8.9% decline in legacy home units sold. Financial services revenue was $22.1 million, up 7.7% from $20.5 million in the year-ago quarter. The company cited higher loan sales after securing a long-term investor agreement, along with the addition of American Homestar Financial Services. → 2 Software Stocks Turning AI Fears Into Fundamental Gains Consolidated gross margin was 23.1% of revenue, compared with 22.8% a year earlier. Factory-built housing gross margin declined to 21.2% from 22.3%, reflecting higher costs per unit sold. Financial services gross margin rose to 69.4% from 36.8%, driven by rate increases, underwriting changes and higher loan sales. Selling, general and administrative expenses were $75.6 million, or 13.7% of revenue, compared with $77.5 million, or 15.2% of revenue, a year earlier. The prior-year period included the $10 million trade name write-off related to the company’s rebranding project. Pre-tax profit increased 27.1% to $54.6 million from $42.9 million. Net income was $42.5 million, compared with $36.3 million a year earlier, and diluted earnings per share were $5.42, up from $4.47. Boor said the quarter began slowly due to unusual weather across southern states, which caused lost production days and reduced market activity in January and early February. Capacity utilization was approximately 70% for the quarter. Orders improved sharply in March, expanding backlogs late in the quarter. Boor said Cavco ended the period with nearly 25% more floors in backlog than at the start of the quarter, with five to seven weeks of backlog. In response to analyst questions, Boor said the March order improvement occurred across every region the company tracks, with some of the strongest relative results in the Northwest, Southwest and Texas. He said April order rates remained near March levels, and backlog weeks improved across all regions through April. “It wasn't just a blip,” Boor said. “We did see it pick up.” Boor said stronger backlogs give the company an opportunity to raise production at plants that had been constrained by lower order levels. He said Cavco does not aim to build unusually high backlogs, but wants to produce at the level of incoming orders. Boor said Cavco has completed much of the operational integration of American Homestar, with remaining work focused largely on systems integration. He reiterated that the company’s internal estimate of tangible cost synergies remains above $10 million annually, and said Cavco was already “very close to that pace” in the fourth quarter. Management said additional opportunities remain, primarily in SG&A and purchasing savings. In financial services, Boor said lending and insurance both contributed to a strong quarter. Cavco reached a new agreement with a purchaser of home-only loans, allowing the company to increase originations and sell some loans off the balance sheet. Chief Accounting Officer Paul Bigbee said the forward-flow agreement includes a minimum commitment of about $25 million of originated loans per quarter over a two-year period. He said the economics are consistent with existing gain-on-sale transactions and described the agreement as a way to increase lending capacity in a capital-efficient manner rather than materially expand margins. Cavco also discussed its recently announced groundbreaking for a new plant in El Mirage, Arizona. Boor said the project is part of a broader Southwest operations strategy intended to create growth and optionality in the region. The plant is expected to be operational in mid-calendar 2027. Boor described it as a high-capacity, state-of-the-art facility in the Phoenix area, with one production line initially and infrastructure for a second line in the future. Asked why Cavco is adding capacity while national utilization is around 70%, Boor said the decision was based on a long-term view of the national housing shortage and the role of factory-built housing. “We made this decision because there's a $4 million-$6 million housing unit deficit in the country, and we think factory-built housing is a solution,” Boor said. The company did not disclose the specific investment amount for the new plant. Management said it does not expect a noticeable margin drag as the facility ramps, citing Cavco’s experience bringing on capacity in prior projects. Cavco generated $67.4 million in operating cash flow during the quarter. Cash and restricted cash increased by $15.1 million to $257.6 million. Investing activities used $22.6 million, primarily for plant capital expenditures, while financing activities used $30 million, driven by share repurchases. For fiscal 2026, Boor said Cavco deployed more than $360 million, including: $160 million for share repurchases; $173 million to acquire American Homestar; $35 million to expand and modernize existing plants. The board recently increased Cavco’s share repurchase authorization by $150 million, leaving about $218 million available for future buybacks. Management also addressed potential cost pressures. Executive Vice President and CFO Allison Aden said tariffs are having an upward impact on cost of goods sold, though the amount is difficult to estimate. She said lumber had recently begun to move higher and that steel producers were announcing price increases and allocation limitations. Boor also discussed federal housing legislation passed by the House, saying it reflected bipartisan recognition of manufactured housing’s role in addressing supply constraints. He cited potential benefits related to product innovation, regulatory clarity, financing availability and zoning, while cautioning that the effects would take time to develop. In closing, Boor said uncertainty remains elevated and that Cavco will continue to focus on reacting quickly to changing conditions. Still, he said the company is encouraged by recent order and backlog trends and remains focused on setting additional shipment records in the future. Cavco Industries, Inc is a leading designer, manufacturer and retailer of factory-built homes and modular structures. The company produces a range of HUD-code manufactured homes, modular buildings, park model RVs and cabins through its network of production facilities. Its offerings cater to both residential and commercial markets, including customizable single- and multi-section homes, workforce and affordable housing solutions, educational and healthcare modules, as well as specialty lodging products for the recreational vehicle and hospitality industries. Since its founding in 1967, Cavco has grown through strategic investments and acquisitions, expanding its footprint across the United States and into parts of Canada and Mexico. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Cavco Industries Q4 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for May 2026.