Financial Data and Key Metrics Changes - Cavco Industries reported record revenues of 431.7millionforQ32022,a49.5288.8 million in Q3 2021 [10] - Diluted EPS rose to 8.57comparedto2.12 in the same quarter last year, with a significant impact from non-recurring tax credits [5][16] - The effective income tax rate was a benefit of 35.1% for Q3 2022, influenced by a non-recurring tax benefit of 34.4million[14][15]BusinessLineDataandKeyMetricsChanges−Thefactory−builthousingsegmentsawnetrevenuesincreaseby52.7413.6 million, driven by the acquisition of Commodore and a 24.4% increase in average revenue per home sold [10][12] - Total units sold increased by 22.8% to 4,424 units from 3,603 units in Q3 2021 [10] - Financial services segment net revenues increased by 0.6% to 18.1million,attributedtoahighernumberofinsurancepoliciesandhomeloansales[11]MarketDataandKeyMetricsChanges−Thebacklogremainedconsistentat1.1 billion, representing 36 to 38 weeks of production, indicating strong demand despite higher production rates [6] - Average selling prices on a consolidated basis were slightly down compared to Q2 2022, influenced by the mix of retail and wholesale sales [7][12] Company Strategy and Development Direction - The company plans to start operations at a new facility in Glendale, Arizona, which will double park model capacity [9] - The integration of Commodore is progressing well, with expectations for improved margins as lower-priced homes in backlog are sold [9][41] - The company is focused on operational improvements and optimizing customer relationships to capture synergies from the Commodore acquisition [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining production momentum despite ongoing labor challenges and supply chain inefficiencies [8][28] - The demand for manufactured housing remains strong, driven by demographic factors and a significant housing deficit [8][35] - Rising interest rates may pose short-term pressures, but the impact on manufactured housing is expected to be less severe compared to site-built homes [61] Other Important Information - Selling, general, and administrative expenses increased to 60.3million,primarilyduetotheadditionofCommodoreandhigherincentivewages[14]−Thecashbalancedecreasedto267.3 million, primarily due to the acquisition of Commodore and increased inventory purchases [17] Q&A Session Summary Question: Contribution of Commodore in the quarter - Management confirmed that Commodore contributed 73millioninrevenue,aligningwithexpectationsforcapacityandshipment[21][22]Question:Demandandorderrates−Managementclarifiedthatorderratesremainstrong,withseasonalpatternsobservedbutstillabovepre−pandemiclevels[23][24]Question:Grossmarginimpacts−Managementindicatedthatlowerlumberpricesbenefitedmargins,whilesellingCommodore′sprice−protectedhomesinbackloghadanegativeimpact[25][26]Question:Capacityutilizationandunitgrowth−Managementexpressedoptimismaboutmaintainingunitgrowthandproductioncapacity,withcurrentutilizationat809 million repurchased in the quarter [67]
Cavco(CVCO)2022-02-04 23:08