What changed in this filing

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Item 1. Financial Statements

2024-02-02 compared with 2023-11-03 · 146 added, 171 removed, 515 unchanged (38% of the section changed)

3 unchanged sentences

(Dollars in thousands, except per share amounts)

September 30,

2023 April 1,

37 unchanged sentences

Issued 9,381,147 and 9,337,125 shares, respectively;

Outstanding 8,345,812 and 8,665,324 shares, respectively

Treasury stock, at cost;

10 unchanged sentences

(Dollars in thousands, except per share amounts)

Three Months Ended Six Months Ended

September 30,

2023 October 1,

2022 September 30,

2023 October 1,

Three Months Ended Nine Months Ended

2023 December 31,

2022 December 30,

2023 December 31,

$ 446,769 $ 500,603 $ 1,374,674 $ 1,666,333

7 unchanged sentences

Interest expense ( 842 ) ( 216 ) ( 1,365 ) ( 610 )

Other income, net 655 488 781 57

Other (expense) income, net ( 224 ) ( 348 ) 557 ( 291 )

Income before income taxes 43,907 76,081 156,245 248,202

6 unchanged sentences

Reclassification adjustment for securities sold 293 ( 13 ) 299 ( 19 )

Applicable income taxes

Applicable income tax (expense) benefit ( 62 ) 3 ( 63 ) 4

Net change in unrealized position of investments held

13 107 22 ( 412 )

Applicable income taxes

( 14 ) 79 ( 2 ) 109

Applicable income tax (expense) benefit ( 3 ) ( 23 ) ( 5 ) 86

Comprehensive income 36,228 59,663 124,224 193,140

11 unchanged sentences

(Dollars in thousands)

Six Months Ended

September 30,

2023 October 1,

Nine Months Ended

2023 December 31,

OPERATING ACTIVITIES

8 unchanged sentences

Gain on investments and sale of loans, net ( 5,958 ) ( 6,647 )

Distributions of earnings from equity method investments — 4,306

Changes in operating assets and liabilities, net of acquisitions

15 unchanged sentences

Proceeds from sale of investments 9,290 9,230

Return of invested capital from equity method investments — 12,213

Net cash used in investing activities ( 26,543 ) ( 29,199 )

15 unchanged sentences

Right-of-use assets recognized and operating lease obligations incurred $ 14,743 $ 3,535

Non-cash consideration for acquisitions $ 5,430 $ —

See accompanying Notes to Consolidated Financial Statements

8 unchanged sentences

In the opinion of management, these financial statements include all adjustments, including normal recurring adjustments, which are necessary to fairly state the results for the periods presented.

Certain prior period amounts have been reclassified including from Other income, net to Interest income to conform to current period classification.

Certain prior period amounts have been reclassified including from Other (expense) income, net to Interest income to conform to current period classification.

We have evaluated subsequent events after the balance sheet date through the date of the filing of this report with the SEC, and there were no disclosable subsequent events.

9 unchanged sentences

We design and build a wide variety of affordable manufactured homes, modular homes and park model RVs through 29 homebuilding production lines located throughout the United States and two production lines in Mexico.

We distribute our homes through a large network of independent distribution points as well as 68 Company-owned U.S.

We distribute our homes through a large network of independent distribution points in 48 states and Canada as well as 73 Company-owned U.S.

retail stores, of which 43 are located in Texas.

6 unchanged sentences

The results of operations are included in our Consolidated Financial Statements from the date of acquisition.

We have a 70% interest in Craftsman Homes, LLC and Craftsman Homes Development, LLC (collectively "Craftsman").

On September 28, 2023, we executed an amendment to the Membership Interest Purchase Agreement for Craftsman to acquire the remaining 30% ownership for cash on December 31, 2023.

Under the original agreement, we were obligated to purchase 20% on December 31, 2023, and the remaining 10% was under a put/call arrangement with no specified timetable.

As the remaining 10% was not mandatorily redeemable, it was classified as a temporary equity mezzanine item between liabilities and stockholders' equity in the Consolidated Balance Sheets as Redeemable noncontrolling interest.

As the remaining 10% is now mandatorily redeemable, the value attributed to this noncontrolling interest is included in Accrued expenses and other current liabilities on the Consolidated Balance Sheets at fair value.

See Note 21, Acquisition.

At December 30, 2023 we have a 70% interest in Craftsman Homes, LLC and Craftsman Homes Development, LLC (collectively "Craftsman").

On September 28, 2023, we executed an amendment to the Membership Interest Purchase Agreement (the "Agreement") for Craftsman to acquire the remaining 30% interest in Craftsman for cash on December 31, 2023.

An additional amendment was signed in December 2023 to move the acquisition date to January 1, 2024.

As the entire 30% is mandatorily redeemable, the value attributed to this noncontrolling interest at December 30, 2023 is included in Accrued expenses and other current liabilities on the Consolidated Balance Sheets at fair value.

On January 1, 2024 we acquired the remaining 30% interest in Craftsman for cash.

On November 15, 2023, the Company acquired certain assets and liabilities of Kentucky Dream Homes, LLC, a manufactured home retailer with locations in Kentucky and Florida.

The results of operations are included in our Consolidated Financial Statements from the date of acquisition.

See Note 21, Acquisition

For a description of significant accounting policies we used in the preparation of our Consolidated Financial Statements, please refer to Note 1 of the Notes to Consolidated Financial Statements included in the Form 10-K.

1 unchanged sentence

The following table summarizes Net revenue disaggregated by reportable segment and source (in thousands):

Three Months Ended Six Months Ended

September 30, 2023 October 1, 2022 September 30,

2023 October 1,

Three Months Ended Nine Months Ended

December 30, 2023 December 31, 2022 December 30,

2023 December 31,

Factory-built housing

8 unchanged sentences

$ 446,769 $ 500,603 $ 1,374,674 $ 1,666,333

Restricted Cash

Restricted cash consisted of the following (in thousands):

September 30,

2023 April 1,

Cash related to CountryPlace customer payments to be remitted to third parties $ 15,567 $ 11,123

Other restricted cash 2,198 940

17,765 12,063

Less current portion ( 17,180 ) ( 11,728 )

Corresponding amounts for customer payments to be remitted to third parties are recorded in Accounts payable.

Cash and Cash Equivalents and Restricted Cash

The following table provides a reconciliation of Cash and cash equivalents and Restricted cash reported within the Consolidated Balance Sheets to the combined amounts shown in the Consolidated Statements of Cash Flows (in thousands):

September 30,

2023 October 1,

2023 April 1,

Cash and cash equivalents $ 352,808 $ 271,427

Restricted cash, current 13,215 11,728

Restricted cash 585 335

1 unchanged sentence

Investments consisted of the following (in thousands):

September 30,

2023 April 1,

7 unchanged sentences

Our non-marketable equity investments include investments in other retail distribution operations and community-based initiatives.

We record investments in fixed maturity securities classified as available-for-sale at fair value and record the difference between fair value and cost in Accumulated other comprehensive loss in the Consolidated Balance Sheets.

The amortized cost and fair value of our investments in available-for-sale debt securities, by security type are shown in the table below (in thousands):

September 30, 2023 April 1, 2023

December 30, 2023 April 1, 2023

Value Amortized Cost Fair

8 unchanged sentences

Expected maturities differ from contractual maturities as borrowers may have the right to call or prepay obligations, with or without penalties.

September 30, 2023

December 30, 2023

Due in less than one year $ 7,585 $ 7,453

5 unchanged sentences

Net investment gains and losses on marketable equity securities were as follows (in thousands):

Three Months Ended Six Months Ended

September 30,

2023 October 1,

2022 September 30,

2023 October 1,

Three Months Ended Nine Months Ended

2023 December 31,

2022 December 30,

2023 December 31,

Marketable equity securities

Net (loss) gain recognized during the period $ ( 185 ) $ ( 233 ) $ 275 $ ( 2,575 )

Net gain (loss) recognized during the period $ 776 $ 707 $ 1,051 $ ( 1,868 )

Net (gain) loss recognized on securities sold during the period ( 235 ) ( 107 ) ( 365 ) 183

Unrealized (loss) gain recognized during the period on securities still held $ ( 295 ) $ ( 17 ) $ 145 $ ( 2,285 )

Unrealized gain (loss) recognized during the period on securities still held $ 541 $ 600 $ 686 $ ( 1,685 )

Inventories consisted of the following (in thousands):

September 30,

2023 April 1,

5 unchanged sentences

The following table summarizes consumer loans receivable (in thousands):

September 30,

2023 April 1,

9 unchanged sentences

$ 24,279 $ 27,129

The following table represents changes in the estimated allowance for loan losses, including related additions and deductions to the allowance for loan losses (in thousands):

Three Months Ended Six Months Ended

September 30,

2023 October 1,

2022 September 30,

2023 October 1,

Allowance for loan losses at beginning of period $ 1,144 $ 1,905 $ 1,153 $ 2,115

Change in estimated loan losses, net ( 99 ) ( 166 ) ( 108 ) ( 376 )

Charge-offs — — — ( 19 )

Recoveries — — — 19

Allowance for loan losses at end of period $ 1,045 $ 1,739 $ 1,045 $ 1,739

The consumer loans held for investment had the following characteristics:

September 30,

2023 April 1,

2 unchanged sentences

Weighted average months to maturity 173 150

The following table is a consolidated summary of the delinquency status of the outstanding amortized cost of consumer loans receivable (in thousands):

September 30,

The following table is a consolidated summary of the delinquency status of the outstanding principal balance of consumer loans receivable (in thousands):

2023 April 1,

4 unchanged sentences

$ 37,602 $ 45,669

The following table disaggregates gross consumer loans receivable by credit quality indicator and fiscal year of origination (in thousands):

September 30, 2023

The following table disaggregates the outstanding principal balance of consumer loans receivable by credit quality indicator and fiscal year of origination (in thousands):

December 30, 2023

2024 2023 2022 2021 2020 Prior Total

19 unchanged sentences

$ 11,250 $ 185 $ 2,082 $ 3,164 $ 2,765 $ 26,223 $ 45,669

As of September 30, 2023, 40 % of the outstanding principal balance of the consumer loans receivable portfolio was concentrated in Texas and 14 % was concentrated in Florida.

As of December 30, 2023, 42 % of the outstanding principal balance of the consumer loans receivable portfolio was concentrated in Texas and 14 % was concentrated in Florida.

As of April 1, 2023, 44 % of the outstanding principal balance of the consumer loans receivable portfolio was concentrated in Texas and 13 % was concentrated in Florida.

Other than Texas and Florida, no sta te had concentrations in excess of 10 % of the outstanding principal balance of the consumer loans receivable as of September 30, 2023 or April 1, 2023.

Repossessed homes totaled approximately $ 0.6 million and $ 1.1 million as of September 30, 2023 and April 1, 2023, respectively, and are included in Prepaid expenses and other current assets in the Consolidated Balance Sheets.

Homes undergoing foreclosure or similar proceedings in progress totaled approximately $ 0.8 million and $ 0.5 million as of September 30, 2023 and April 1, 2023, respectively.

Other than Texas and Florida, no sta te had concentrations in excess of 10 % of the outstanding principal balance of the consumer loans receivable as of December 30, 2023 or April 1, 2023.

Repossessed homes totaled approximately $ 0.8 million and $ 1.1 million as of December 30, 2023 and April 1, 2023, respectively, and are included in Prepaid expenses and other current assets in the Consolidated Balance Sheets.

Homes undergoing foreclosure or similar proceedings in progress totaled approximately $ 0.4 million and $ 0.5 million as of December 30, 2023 and April 1, 2023, respectively.

Commercial Loans Receivable

1 unchanged sentence

Commercial loans receivable, net consisted of the following (in thousands):

September 30,

2023 April 1,

6 unchanged sentences

The commercial loans receivable balance had the following characteristics:

September 30,

2023 April 1,

1 unchanged sentence

Weighted average months outstanding 11 9

The following table represents changes in the estimated allowance for loan losses (in thousands):

Three Months Ended Six Months Ended

September 30,

2023 October 1,

2022 September 30,

2023 October 1,

Balance at beginning of period

$ 1,614 $ 1,054 $ 1,586 $ 1,011

Change in estimated loan losses, net

( 117 ) 69 ( 89 ) 112

Balance at end of period

$ 1,497 $ 1,123 $ 1,497 $ 1,123

Loans with indicators of potential performance problems are placed on watch list status and are subject to additional monitoring and scrutiny.

Nonperforming status includes loans accounted for on a non-accrual basis and accruing loans with principal payments 90 days or more past due.

As of September 30, 2023 and April 1, 2023, there were no commercial loans considered watch list or nonperforming.

The following table disaggregates our commercial loans receivable by credit quality indicator and fiscal year of origination (in thousands):

September 30, 2023

As of December 30, 2023 and April 1, 2023, there were no commercial loans considered nonperforming.

The following table disaggregates the outstanding principal balance of our commercial loans receivable by fiscal year of origination (in thousands):

December 30, 2023

2024 2023 2022 2021 2020 Prior Total

3 unchanged sentences

$ 80,193 $ 16,028 $ 4,071 $ 2,203 $ 1,231 $ — $ 103,726

As of September 30, 2023 and April 1, 2023, there were no commercial loans 90 days or more past due that were still accruing interest, and we were not aware of any potential problem loans that would have a material effect on the commercial loans receivable balance.

As of September 30, 2023, we had concentrations of our outstanding principal balance of the commercial loans receivable balance in New York of 16 % and California of 11 %.

As of December 30, 2023 and April 1, 2023, there were no commercial loans 90 days or more past due that were still accruing interest, and we were not aware of any potential problem loans that would have a material effect on the commercial loans receivable balance.

As of December 30, 2023, we had concentrations of our outstanding principal balance of the commercial loans receivable balance in New York of 15 % and California of 16 %.

As of April 1, 2023, 18 % of our outstanding principal balance of the commercial loans receivable balance was in New York.

No other state had concentrations in excess of 10 % of the outstanding principal balance of the commercial loans receivable as of September 30, 2023 or April 1, 2023.

As of September 30, 2023 and April 1, 2023, one independent third-party and its affiliates comprised 12 % of the net commercial loans receivable principal balance outstanding, all of which was secured .

No other state had concentrations in excess of 10 % of the outstanding principal balance of the commercial loans receivable as of December 30, 2023 or April 1, 2023.

As of December 30, 2023 and April 1, 2023, one independent third-party and its affiliates comprised 14 % and 12 %, respectively, of the net commercial loans receivable principal balance outstanding, all of which was secured .

Property, Plant and Equipment, net

Property, plant and equipment, net, consisted of the following (in thousands):

September 30,

2023 April 1,

7 unchanged sentences

$ 224,216 $ 228,278

Depreciation expense for the three and six months ended September 30, 2023 was $ 4.3 million and $ 8.4 million, respectively.

Depreciation expense for the three and six months ended October 1, 2022 was $ 3.8 million and $ 7.3 million, respectively.

Depreciation expense for the three and nine months ended December 30, 2023 was $ 4.2 million and $ 12.7 million, respectively.

Depreciation expense for the three and nine months ended December 31, 2022 was $ 3.4 million and $ 10.7 million, respectively.

We lease certain production and retail locations, office space and equipment.

The following table provides information about the financial statement classification of our lease balances reported within the Consolidated Balance Sheets as of September 30, 2023 and April 1, 2023 (in thousands):

Classification September 30,

The following table provides information about the financial statement classification of our lease balances reported within the Consolidated Balance Sheets as of December 30, 2023 and April 1, 2023 (in thousands):

Classification December 30,

2023 April 1,

Operating lease assets Operating lease right-of-use assets $ 34,413 $ 26,755

Operating lease assets Operating lease right-of-use ("ROU") assets $ 37,393 $ 26,755

Finance lease assets Property, plant and equipment, net (1)

6 unchanged sentences

Total lease liabilities $ 44,776 $ 34,183

(1) Recorded net of accumulated amortization of $ 0.3 million as of September 30, 2023 and April 1, 2023.

The present value of minimum payments for future fiscal years under non-cancelable leases as of September 30,

(1) Recorded net of accumulated amortization of $ 0.4 million and $ 0.3 million as of December 30, 2023 and April 1, 2023, respectively.

The present value of future minimum payments under non-cancelable leases as of December 30,

2023 was as follows (in thousands):

10 unchanged sentences

$ 38,590 $ 6,186 $ 44,776

Goodwill and Other Intangibles

Goodwill and Other Intangibles, net

Goodwill and other intangibles, net, consisted of the following (in thousands):

September 30, 2023 April 1, 2023

December 30, 2023 April 1, 2023

Amount Accumulated

12 unchanged sentences

$ 154,938 $ ( 5,581 ) $ 149,357 $ 150,641 $ ( 6,304 ) $ 144,337

During the six months ended September 30, 2023, fair value adjustments were made to certain assets and liabilities of Solitaire Homes in connection with the purchase accounting measurement period.

This resulted in additional Goodwill of $ 1.0 million.

Amortization expense recognized on intangible assets for the three and six months ended September 30, 2023 was $ 0.4 million and $ 0.8 million, respectively.

Amortization expense recognized on intangible assets for the three and six months ended October 1, 2022 was $ 0.5 million and $ 1.0 million, respectively.

Changes to Goodwill for the nine months ended December 30, 2023 were as follows (in thousands):

Goodwill beginning of the period $ 114,547

Solitaire Goodwill adjustments (1) 1,137

Kentucky Dream Homes (1) 4,591

Other immaterial acquisition 469

(1) See Note 21, Acquisitions

Amortization expense recognized on intangible assets for the three and nine months ended December 30, 2023 was $ 0.4 million and $ 1.2 million, respectively.

Amortization expense recognized on intangible assets for the three and nine months ended December 31, 2022 was $ 0.5 million and $ 1.5 million, respectively.

Customer relationships have a weighted average remaining life of 7.1 years and other finite lived intangibles have a weighted average remaining life of 2.8 years.

Expected amortization for future fiscal years is as follows (in thousands):

Expected future amortization is as follows (in thousands):

Remainder of fiscal year 2024 $ 392

7 unchanged sentences

Accrued expenses and other current liabilities consisted of the following (in thousands):

September 30,

2023 April 1,

4 unchanged sentences

Accrued volume rebates 25,086 22,858

Accrued self-insurance 13,671 11,467

Other 63,752 76,774

1 unchanged sentence

Activity in the liability for estimated warranties was as follows (in thousands):

Three Months Ended Six Months Ended

September 30,

2023 October 1,

2022 September 30,

2023 October 1,

Three Months Ended Nine Months Ended

2023 December 31,

2022 December 30,

2023 December 31,

Balance at beginning of period $ 33,015 $ 30,841 $ 31,368 $ 26,250

4 unchanged sentences

The following table summarizes secured financings and other obligations (in thousands):

September 30,

2023 April 1,

Finance lease payables $ 6,205 $ 6,243

Finance lease liabilities $ 6,186 $ 6,243

Mandatorily redeemable noncontrolling interest 2,796 2,268

4 unchanged sentences

We are party to a Credit Agreement (the "Credit Agreement") that expires in 2027 with Bank of America, N.A., providing for a $ 50 million revolving credit facility (the "Revolving Credit Facility"), which may be increased up to an aggregate amount of $ 100 million.

Borrowings under the Revolving Credit Facility generally bear interest at the Secured Overnight Financing Rate plus a credit spread and a margin based on our Consolidated Total Leverage Ratio .

The Credit Agreement includes the following financial covenants:

(i) as of the end of any fiscal quarter, the Consolidated Total Leverage Ratio (as defined in the Credit Agreement) cannot exceed 3.25 to 1.00 and (ii) a requirement to maintain Consolidated EBITDA (as defined in the Credit Agreement) for any period of four fiscal quarters of at least $75 million.

The Credit Agreement also contains customary representations and warranties, and affirmative negative covenants.

As of September 30, 2023 and April 1, 2023, there were no borrowings outstanding under the Revolving Credit Facility and we were in compliance with all covenants.

As of December 30, 2023 and April 1, 2023, there were no borrowings outstanding under the Revolving Credit Facility and we were in compliance with all covenants.

Reinsurance and Insurance Loss Reserves

3 unchanged sentences

Three Months Ended

September 30, 2023 October 1, 2022

December 30, 2023 December 31, 2022

Written Earned Written Earned

6 unchanged sentences

$ 13,159 $ 12,746 $ 10,750 $ 11,474

Six Months Ended

September 30, 2023 October 1, 2022

Nine Months Ended

December 30, 2023 December 31, 2022

Written Earned Written Earned

10 unchanged sentences

Standard Casualty establishes reserves for claims and claims expense on reported and incurred but not reported ("IBNR") claims of non-reinsured losses.

Reserves for claims are included in the Accrued expenses and other current liabilities line item on the Consolidated Balance Sheets and claims expenses are recorded in Cost of sales on the Consolidated Statements of Comprehensive Income.

The following details the activity in the reserve for the three and six months ended September 30, 2023 and October 1, 2022 (in thousands):

Three Months Ended Six Months Ended

September 30,

2023 October 1,

2022 September 30,

2023 October 1,

The following details the activity in the reserve for the three and nine months ended December 30, 2023 and December 31, 2022 (in thousands):

Three Months Ended Nine Months Ended

2023 December 31,

2022 December 30,

2023 December 31,

Balance at beginning of period $ 9,154 $ 7,790 $ 10,939 $ 8,149

4 unchanged sentences

Repurchase Contingencies .

The maximum amount for which the Company was liable under the terms of repurchase agreements with financial institutions that provide inventory financing to independent distributors of our products approximated $ 157 million and $ 178 million at September 30, 2023 and April 1, 2023, respectively, without reduction for the resale value of the homes.

During the second quarter of fiscal 2024, we received one repurchase demand notice and the inventory was obtained shortly after period end.

As the fair value of the inventory exceeded its carrying value, no reserve was deemed necessary.

During the fourth quarter of fiscal 2023, we received one repurchase demand notice and the inventory was acquired during the first quarter of fiscal 2024.

Our reserve for repurchase commitments, recorded in Accrued expenses and other current liabilities, was $ 3.7 million at September 30, 2023 and $ 5.2 million at April 1, 2023 .

The maximum amount for which the Company was liable under the terms of repurchase agreements with financial institutions that provide inventory financing to independent distributors of our products approximated $ 116 million and $ 178 million at December 30, 2023 and April 1, 2023, respectively, without reduction for the estimated resale value of the homes.

During the third quarter of fiscal 2024, we received one repurchase demand notice for three homes.

During the nine months ended December 30, 2023, we received three repurchase demand notices covering nine homes, of which six homes had been repurchased by period end.

In all cases, the estimated fair value exceeded the repurchase price so no loss reserve was deemed necessary.

Our reserve for repurchase commitments, recorded in Accrued expenses and other current liabilities, was $ 2.7 million at December 30, 2023 and $ 5.2 million at April 1, 2023 .

Construction-Period Mortgages.

Loan contracts with off-balance sheet commitments are summarized below (in thousands):

September 30,

2023 April 1,

3 unchanged sentences

Representations and Warranties of Mortgages Sold .

The reserve for contingent repurchases and indemnification obliga tions was $ 0.6 million as of September 30, 2023 and $ 0.7 million as of April 1, 2023, included in Accrued expenses and other current liabilities on the Consolidated Balance Sheets.

There were no claim requests that resulted in the repurchase of any loans during the six months ended September 30, 2023 or October 1, 2022 .

The reserve for contingent repurchases and indemnification obliga tions was $ 0.6 million as of December 30, 2023 and $ 0.7 million as of April 1, 2023, included in Accrued expenses and other current liabilities on the Consolidated Balance Sheets.

There were no claim requests that resulted in the repurchase of any loans during the nine months ended December 30, 2023 or December 31, 2022 .

Interest Rate Lock Commitments ("IRLCs") .

As of September 30, 2023, w e had outstanding IRLCs with a notional amount of $ 31.6 million.

For the three and six months ended September 30, 2023, we recognized insignificant non-cash losses on outstanding IRLCs.

For the three and six months ended October 1, 2022, we recognized insignificant non-cash losses and gains, respectively, on outstanding IRLCs.

As of December 30, 2023 and April 1, 2023, w e had outstanding IRLCs with a notional amount of $ 24.1 million and $ 64.9 million, respectively.

For the three and nine months ended December 30, 2023, we recognized insignificant non-cash gains and losses, respectively, on outstanding IRLCs.

For the three and nine months ended December 31, 2022, we recognized insignificant non-cash gains on outstanding IRLCs.

Forward Sales Commitments .

As of September 30, 2023, we had $ 1.5 million in outstanding forward sales commitments ("Commitments").

During the three and six months ended September 30, 2023, we recognized insignificant non-cash gains.

During the three and six months ended October 1, 2022, we recognized non-cash gains and losses of $ 0.2 million and $ 0.1 million, respectively, relating to our Commitments.

As of December 30, 2023 and April 1, 2023, we had $ 0.8 million and $ 1.6 million in outstanding forward sales commitments ("Commitments"), respectively.

During the three and nine months ended December 30, 2023, we recognized insignificant non-cash losses.

During the three and nine months ended December 31, 2022, we recognized non-cash losses of $ 0.2 million and $ 0.3 million, respectively, relating to our Commitments.

Legal Matters.

3 unchanged sentences

Stockholders' Equity and Redeemable Noncontrolling Interest

The following table represents changes in stockholders' equity attributable to Cavco's stockholders and redeemable noncontrolling interest during the six months ended September 30, 2023 (dollars in thousands):

The following table represents changes in stockholders' equity attributable to Cavco's stockholders and redeemable noncontrolling interest during the nine months ended December 30, 2023 (dollars in thousands):

Equity Attributable to Cavco Stockholders

Treasury stock Additional paid-in capital Retained earnings Accumulated other comprehensive loss Total Redeemable noncontrolling interest

Treasury stock Additional paid-in capital Retained earnings Accumulated other comprehensive income (loss) Total Redeemable noncontrolling interest

Shares Amount

15 unchanged sentences

Balance, September 30, 2023 9,356,421 94 ( 211,646 ) 274,204 957,206 ( 603 ) 1,019,255 —

The following table represents changes in stockholders' equity attributable to Cavco's stockholders and redeemable noncontrolling interest during the six months ended October 1, 2022 (dollars in thousands):

Net income — — — — 35,987 — 35,987 —

Other comprehensive income, net — — — — — 241 241 —

Issuance of common stock under stock incentive plans, net 24,726 — — 1,934 — — 1,934 —

Stock-based compensation — — — 1,709 — — 1,709 —

Common stock repurchases — — ( 50,426 ) — — — ( 50,426 ) —

Balance, December 30, 2023 9,381,147 $ 94 $ ( 262,072 ) $ 277,847 $ 993,193 $ ( 362 ) $ 1,008,700 $ —

Equity Attributable to Cavco Stockholders

Treasury stock Additional paid-in capital Retained earnings Accumulated other comprehensive loss Total Redeemable noncontrolling interest

Treasury stock Additional paid-in capital Retained earnings Accumulated other comprehensive income (loss) Total Redeemable noncontrolling interest

Shares Amount

14 unchanged sentences

Balance, October 1, 2022 9,314,152 93 ( 100,000 ) 267,183 762,474 ( 818 ) 928,932 926

Net income — — — — 59,524 — 59,524 65

Other comprehensive income, net — — — — — 74 74 —

Issuance of common stock under stock incentive plans, net 5,548 — — ( 90 ) — — ( 90 ) —

Stock-based compensation — — — 1,330 — — 1,330 —

Common stock repurchases — — ( 34,270 ) — — — ( 34,270 ) —

Distributions — — — — — — — ( 120 )

Valuation adjustment — — — — — — — 61

Balance, December 31, 2022 9,319,700 $ 93 $ ( 134,270 ) $ 268,423 $ 821,998 $ ( 744 ) $ 955,500 $ 932

Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share (dollars in thousands, except per share amounts):

Three Months Ended Six Months Ended

September 30,

2023 October 1,

2022 September 30,

2023 October 1,

Three Months Ended Nine Months Ended

2023 December 31,

2022 December 30,

2023 December 31,

Net income attributable to Cavco common stockholders $ 35,987 $ 59,524 $ 123,883 $ 193,242

9 unchanged sentences

The book value and estimated fair value of our financial instruments were as follows (in thousands):

September 30, 2023 April 1, 2023

December 30, 2023 April 1, 2023

Value Estimated

14 unchanged sentences

Mortgage Servicing Rights ("MSRs") are recorded at fair value in Prepaid expenses and other current assets on the Consolidated Balance Sheets.

September 30,

2023 April 1,

8 unchanged sentences

In the ordinary course of business, we sell homes and lend to certain of these operations through our commercial lending programs.

For the three and six months ended September 30, 2023, the total amount of sales to related parties was $ 16.0 million and $ 31.0 million, respectively.

For the three and six months ended October 1, 2022, the total amount of sales to related parties was $ 20.1 million and $ 37.3 million, respectively.

As of September 30, 2023, receivables from related parties included $ 6.0 million of accounts receivable and $ 4.9 million of commercial loans outstanding.

For the three and nine months ended December 30, 2023, the total amount of sales to related parties was $ 11.6 million and $ 42.6 million, respectively.

For the three and nine months ended December 31, 2022, the total amount of sales to related parties was $ 18.7 million and $ 56.0 million, respectively.

As of December 30, 2023, receivables from related parties included $ 6.5 million of accounts receivable and $ 4.9 million of commercial loans outstanding.

As of April 1, 2023, receivables from related parties included $ 5.7 million of accounts receivable and $ 4.7 million of commercial loans outstanding.

On January 3, 2023 (the "Acquisition Date"), we completed the acquisition of Solitaire Homes, including their four manufacturing facilities and twenty-two retail locations by acquiring 100% of the outstanding stock of Solitaire Homes for $ 110.8 million, subject to customary adjustments.

Our provisional estimates of the fair values of the assets that we acquired and the liabilities that we assumed were based on the information that was available as of the Acquisition Date.

We are continuing to evaluate the underlying inputs and assumptions used in our valuations.

Accordingly, these provisional estimates are subject to change during the measurement period, which is up to one year from the Acquisition Date.

During the six months ended September 30, 2023, we made certain adjustments to the assets and liabilities based on information that became available.

The following table presents our provisional estimates of the fair values of the assets that we acquired and the liabilities that we assumed on the Acquisition Date as of the end of the 2024 second quarter (in thousands):

Solitaire Acquisition

On January 3, 2023 (the "Acquisition Date"), we completed the acquisition of Solitaire Homes, including their four manufacturing facilities and 22 retail locations, by acquiring 100% of the outstanding stock of Solitaire Homes for $ 110.8 million.

Our estimates of the fair values of the assets that we acquired and the liabilities that we assumed were based on the information that was available as of the Acquisition Date.

During the nine months ended December 30, 2023, we made certain adjustments to the assets and liabilities based on information that became available.

The following table presents the fair values of the assets that we acquired and the liabilities that we assumed on the Acquisition Date as of December 30, 2023 (in thousands):

2023 Adjustments January 3, 2023

(as Adjusted at September 30, 2023)

(as Adjusted at December 30, 2023)

Cash $ 5,119 $ ( 79 ) $ 5,040

10 unchanged sentences

Net assets acquired $ 110,781 $ — $ 110,781

Pro Forma Impact of Acquisition (Unaudited) .

Pro Forma Impact of Solitaire Acquisition (Unaudited) .

The following table presents supplemental pro forma information as if the above acquisition had occurred on April 3, 2022 (in thousands, except per share data):

October 1, 2022

Three Months Ended Six Months Ended

December 31, 2022

Three Months Ended Nine Months Ended

Net revenue $ 536,776 $ 1,774,853

1 unchanged sentence

Diluted net income per share 6.89 22.23

Kentucky Dream Homes Acquisition

On November 15, 2023, the Company acquired certain assets and assumed certain liabilities of Kentucky Dream Homes, LLC ("KDH"), a manufactured home retailer with locations in Kentucky and Florida for total consideration of $ 23.8 million, which includes $ 5.4 million non-cash commercial loan forgiveness.

The remaining $ 18.4 million was paid with cash on hand.

The final purchase price is subject to customary adjustments.

The business is included in the Factory-built housing reportable business segment.

The fair value of the assets acquired and liabilities assumed are included in the Consolidated Balance Sheet as of December 30, 2023, including $ 4.6 million allocated to goodwill.

The purchase accounting is subject to final adjustment, primarily for the working capital and amounts allocated to goodwill.

We have included the financial results in our unaudited Consolidated Financial Statements from the date of acquisition.

Pro forma historical results of operations related to this acquisition have not been presented because they are not significant to our unaudited Consolidated Financial Statements for the periods presented.

Business Segment Information

2 unchanged sentences

The following table provides selected financial data by segment (in thousands):

Three Months Ended Six Months Ended

September 30,

2023 October 1,

2022 September 30,

2023 October 1,

Three Months Ended Nine Months Ended

2023 December 31,

2022 December 30,

2023 December 31,

Factory-built housing $ 426,939 $ 481,193 $ 1,318,114 $ 1,613,392

5 unchanged sentences

$ 43,907 $ 76,081 $ 156,245 $ 248,202

September 30,

2023 April 1,

6 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements