What changed in this filing

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Item 1. Business

2024-05-24 compared with 2023-05-19 · 36 added, 45 removed, 382 unchanged (17% of the section changed)

8 unchanged sentences

The terms "Cavco," "us," "we," "our," the "Company," and any other similar terms refer to Cavco Industries, Inc.

and its consolidated subsidiaries, unless otherwise indicated in this Annual Report on Form 10-K for the fiscal year ended April 1, 2023 ("Annual Report").

and its consolidated subsidiaries, unless otherwise indicated in this Annual Report on Form 10-K for the fiscal year ended March 30, 2024 ("Annual Report").

We construct homes using an assembly-line process in which each module or floor section is completed in stages.

This assembly-line process is designed to be flexible in order to accommodate customer requested customizations.

Our operations include 29 homebuilding production lines located throughout the United States and two production lines in Mexico.

Our operations include a total of 31 homebuilding production lines, 29 located throughout the United States and two production lines in Mexico.

We distribute our homes through a large network of independent distribution points in 48 states and Canada and 79 Company-owned U.S.

retail stores, of which 47 are located in Texas.

On January 3, 2023, we completed the acquisition of Solitaire, Inc.

and other related entities (collectively "Solitaire Homes").

This transaction added four manufacturing lines, including the two in Mexico, and 22 retail locations.

The addition of Solitaire Homes strengthens our position in the Southwest and expands our manufacturing capabilities into Mexico.

The transaction was accounted for as a business combination and the results of operations have been included in the accompanying Consolidated Financial Statements since the date of acquisition.

CountryPlace originates and services single-family, conforming and non-confirming residential mortgages and home-only loans for itself and others.

11 unchanged sentences

Our operations are generally managed on a decentralized basis with oversight from the home office.

This decentralization enables our operators the flexibility to adapt to local market demand, be more customer focused and have the autonomy to make swift decisions, while still being held accountable for operational and financial performance.

This decentralization enables our operators to adapt to local market demand, be more customer focused and have the autonomy to make swift decisions, while still being held accountable for operational and financial performance.

Our marketing efforts are focused on providing manufactured homes that are customizable and appeal to a wide range of home buyers, on a regional basis, in the markets we serve.

18 unchanged sentences

We also offer a variety of structural, decorative and energy efficient customizations to meet the home buyer's specifications.

With manufacturing facilities strategically positioned across the United States and Mexico, we utilize local market research to design homes to meet the demands of our customers.

With manufacturing facilities strategically positioned across the United States and in Mexico, we utilize local market research to design homes to meet the demands of our customers.

We have the ability to react and modify floor plans and designs to consumers' specific needs.

29 unchanged sentences

Douglas and Moultrie, Georgia;

Shippenville and Emlenton, Pennsylvania;

Shippenville (two lines) and Emlenton, Pennsylvania;

Martinsville and Rocky Mount, Virginia;

Cherryville, North Carolina;

Crouse and Hamlet, North Carolina;

and Ocala and Plant City, Florida.

12 unchanged sentences

It is difficult to predict the future of housing demand, employee availability, our supply chain or the Company's performance and operations.

Our home order backlog at April 1, 2023 was approximately $244 million in wholesale sales values, down $870 million from $1.1 billion one year earlier.

Our home order backlog at March 30, 2024 was approximately $191 million in wholesale sales values, down $53 million from $244 million one year earlier.

Distributors may cancel orders prior to production without penalty.

4 unchanged sentences

We sold 16,928, 19,376 and 16,697 factory-built homes in fiscal years 2024, 2023 and 2022, respectively, through Company-owned and independent distribution channels.

As of April 1, 2023, there were a total of 64 Company-owned retail stores, located in Oregon, Arizona, Nevada, New Mexico, Texas, Indiana, Oklahoma, Florida and New York.

Fifty of the Company-owned retail stores are located in Texas.

As of March 30, 2024, there were a total of 79 Company-owned retail stores, located in Oregon, Arizona, Nevada, New Mexico, Texas, Indiana, Oklahoma, Florida and New York.

Forty-seven of the Company-owned retail stores are located in Texas.

Company-owned retail stores are generally located on main roads or highways with high visibility, each having a sales office, which is generally a factory-built structure, and a variety of model homes of various sizes, floor plans, features and prices.

3 unchanged sentences

We internally finance home inventories at Company-owned retail stores.

As of April 1, 2023, we had a network of independent distributors, of which 9% were in Arizona, 8% in each of Florida and North Carolina, 7% in California and 5% each in New York, Texas and Oregon, based on the quantity of wholesale shipments during fiscal year 2023.

As of March 30, 2024, we had a network of independent distributors, of whom 10% were in North Carolina, 9% in Arizona, 6% in each of Florida and Texas, 5% each in California, New York and South Carolina, based on the quantity of wholesale shipments during fiscal year 2024.

The remaining 54% were in 41 other states and Canada.

1 unchanged sentence

Some independent distributors operate multiple sales outlets.

No independent distributor accounted for 10% or more of factory-built housing revenue during any fiscal year within the three-year period ended April 1, 2023.

No independent distributor accounted for 10% or more of factory-built housing revenue during any fiscal year within the three-year period ended March 30, 2024.

We continually seek to increase wholesale shipments by growing sales at existing independent distributors and by identifying new independent distributors to sell our homes.

25 unchanged sentences

Ginnie Mae permits cash obligations on loans in forbearance from COVID-19 to be offset by other incoming cash flows from loans such as loan pre-payments.

Through fiscal year 2023, monthly collections of principal and interest from borro wers have exceeded scheduled principal and interest payments owed to investors;

however, mandatory extended forbearance under the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act") and certain other regulations related to COVID-19 could negatively impact cash obligations in the future.

Through fiscal year 2024, monthly collections of principal and interest from borrowers have exceeded scheduled principal and interest payments owed to investors;

however, any future regulatory mandates requiring extended forbearance could negatively impact future cash obligations.

We believe that providing financing alternatives improves our responsiveness to the financing needs of prospective home buyers and presents opportunities for additional sources of loan origination and servicing revenues.

3 unchanged sentences

In addition to writing direct policies, we assume and cede reinsurance in the ordinary course of business.

In Texas, policies are written through one affiliated managing general agent, whic h produces a ll premiums, and through local agents, most of which are manufactured home distributors.

In Texas, policies are written through one affiliated managing general agent, whic h produces a ll premiums, and through local agents, most of whom are manufactured home distributors.

All business outside the state of Texas is written on a direct basis through local agents.

12 unchanged sentences

We also work independently and with industry trade associations to encourage favorable legislative and GSE action to address the financing needs of buyers of affordable homes.

In April 2022, Fannie Mae and Freddie Mac released their Underserved Markets Plans for 2022 through 2024 that describe, with specificity, the actions they would take over the three-year period to fulfill the "Duty to Serve" obligation.

The plans were modified in January 2023.

As with prior plans, the 2022 through 2024 plans offer enhanced mortgage loan products for manufactured homes titled a s real property, including Fannie Mae's "MH Advantage" and Freddie Mac's "ChoiceHome" programs that began in the latter part of calendar year 2018.

Although some progress has been made with these programs, meaningful positive im pact in the form of increased home orders has yet to be realized.

The plans do not include purchases of home-only loans during the three-year timeframe.

Federal law requires GSEs to implement the "Duty to Serve" requirements specified in the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended by the Housing and Economic Recovery Act of 2008Fannie Mae and Freddie Mac periodically update their Underserved Markets Plans that describe, with specificity, the actions they would take over the applicable plan period to fulfill the "Duty to Serve" obligation.

As with prior plans, the most recent plans offer enhanced mortgage loan products for manufactured homes titled as real property, including Fannie Mae's "MH Advantage" and Freddie Mac's "ChoiceHome" programs that began in the latter part of calendar year 2018.

Although some progress has been made with these programs, meaningful positive impact in the form of increased home orders has yet to be realized.

The plans do not include significant ongoing purchases of home-only loans during the three-year timeframe.

Expansion of the secondary market for home-only loans through GSE participation could support further demand for housing as lending options would likely become more affordable to home buyers.

5 unchanged sentences

Our obligation under these repurchase agreements ceases upon the purchase of the home by the retail customer.

The maximum amount of contingent obligations under such repurchase agreements was approximately $177.9 million and $141.0 million as of April 1, 2023 and April 2, 2022, respectively.

The increase is the result of higher home sales prices and an increased number of units under these programs.

The maximum amount of contingent obligations under such repurchase agreements was approximately $120.5 million and $177.9 million as of March 30, 2024 and April 1, 2023, respectively.

The decrease is the result of lower home sales prices and a decreased number of units under these programs.

The risk of loss under these agreements is spread over many distributors and is further reduced by the resale value of the homes that we obtain upon the execution of a repurchase.

During the fourth quarter of fiscal 2023, we received a repurchase demand notice and the inventory was obtained shortly after year end.

As the fair value of the inventory exceeded the amount for which it was repurchased, no reserve was deemed necessary.

There were no other repurchases during fiscal 2023.

We continue to make certain commercial loan programs available to members of our wholesale distribution chain.

6 unchanged sentences

According to data reported by the Manufactured Housing Institute, approximatel y 89,000 H UD code manufactured homes were shipped during calendar year 2023, compared to the 113,000 shipped during calendar year 2022 and 106,000 shipments in 2021.

Prior to 2019, annual shipments had increased each year since calendar year 2009 when 50,000 HUD code manufactured homes were shipped, the lowest level since the industry began recording statistics in 1959.

Home Buyer Demographics.

12 unchanged sentences

adult population is estimated to expand by approximately 8.0 million between 2024 and 2029.

A large segment of the population who are generally first-time home buyers, those born between 1976 to 1995 often referred to as Gen Y or Millennials, are attracted by the affordability, product diversity and location flexibility of factory-built homes.

A large segment of the population who are generally first-time home buyers, those born between 1976 to 1995 often referred to as Gen Y or Millennials, is attracted by the affordability, product diversity and location flexibility of factory-built homes.

The age 55 and older category is reported to be the fastest growing segment of the U.S.

107 unchanged sentences

The FHA allowed for an extension of the foreclosure-related eviction moratorium for foreclosed borrowers through September 30, 2021.

When the eviction moratorium for federally backed loans ended, mortgage servicers could only proceed with foreclosures if borrowers had abandoned their properties or had not responded to mortgage servicers' efforts to assist with loss mitigation options.

On February 10, 2023, President Biden extended the national emergency declaration for the COVID-19 pandemic which ultimately terminated on May 11, 2023.

On May 11, 2023, the national emergency declaration for the COVID-19 pandemic ended.

The Treasury Department issued guidance regarding the Homeowner Assistance Fund ("HAF"), which was established under section 3206 of the American Rescue Plan Act of 2021.

7 unchanged sentences

Ginnie Mae eligibility requirements include risk-based capital adjustments for excess value of mortgage servicing rights.

The final net worth and base liquidity requirements become effective on September 30, 2023, and additional loan origination and Ginnie Mae's risk-based capital requirements become effective December 31, 2023.

We have evaluated the proposal and believe that CountryPlace's capital and liquidity are such that we will continue to satisfy the requirements as currently proposed.

The final net worth and base liquidity requirements became effective on September 30, 2023, and additional loan origination and Ginnie Mae's risk-based capital requirements become effective December 31, 2023.

We have evaluated the requirements and believe that, after review of CountryPlace's capital and liquidity, we continue to satisfy such requirements.

On April 19, 2021, the CFPB issued an interim final rule, effective November 30, 2021, amending Regulation F to require debt collectors to provide written notice to certain consumers of their protections under the Center for Disease Control and Prevention's eviction moratorium order of March 29, 2021.

The interim final rule also prohibits certain communications methods and content and places limits on debt collectors' attempts to communicate with consumers who are obligated to repay debt, attorneys representing them or related parties.

The interim final rule also prohibits certain communication methods and content and places limits on debt collectors' attempts to communicate with consumers who are obligated to repay debt, attorneys representing them or related parties.

On December 9, 2021, the Federal Trade Commission ("FTC") amended the Safeguards Rule, 16 CFR Part 314, which addresses the safeguard and protections that financial institutions are required to have in place to protect consumer financial data and other sensitive information.

24 unchanged sentences

Senior management sets the direction regarding company environmental priorities and initiatives and monitors all progress and performance.

The Board of Directors oversees all strategic priorities, including environmental initiatives and periodically reviews reports on Cavco's environmental management, strategy, disclosures, initiatives and policies.

Cavco's Board of Directors (the "Board") oversees all strategic priorities, including environmental initiatives and periodically reviews reports on Cavco's environmental management, strategy, disclosures, initiatives and policies.

We are conscious that the thoughtful choice of components and materials can further reduce our impact on the environment and provide clean, healthy air quality within the home.

17 unchanged sentences

As we work together to make a difference in providing affordable homes nationally, we are committed to fostering the dream of homeownership for our team members.

At Cavco, we have launched a formalized internal program to help us support our people.

At Cavco, we have launched a formalized internal program to support our people.

We call it Homes for our Own, and it generally involves two primary elements:

12 unchanged sentences

We are committed to responsible corporate governance.

Governance starts with the Company's leadership, which includes the executive officers and the Company's Board of Directors.

Governance starts with the Company's leadership, which includes the executive officers and the Company's Board.

As a public company, officers and Board members are fiscally prudent and legally responsible for proper use of Company funds and assets.

The Company expects high standards of ethical conduct from its Board members, management and all employees as described in Cavco's Corporate Governance Guidelines and Code of Conduct.

The Company expects high standards of ethical conduct from its Board members, management, and all employees as described in Cavco's Corporate Governance Guidelines and in Cavco's Code of Conduct.

We continue to focus on setting clear expectations.

Our Executive Team will continue its stewardship through direct oversight and involvement.

Cavco's Corporate Governance Guidelines, the charters of committees of our Board of Directors and our Code of Conduct can be found in the General Document section on our investor relations website at www.investor.cavco.com.

Unless expressly noted, the information on our investor relations website or any other website is not incorporated by reference in this Annual Report and should not be considered part of this Annual Report or any other filing we make with the Securities Exchange Commission ("SEC").

Cavco's Corporate Governance Guidelines, the charters of committees of our Board and our Code of Conduct can be found in the General Document section on our investor relations website at www.investor.cavco.com.

Within the time period required by the Securities and Exchange Commission ("SEC"), we will post on our website any amendment to the Code of Conduct and any waiver applicable to any executive officer, director or senior financial officer.

Additional information on our Corporate Governance policies can be found in our proxy statement filed with the SEC.

2 unchanged sentences

We believe that an engaged, productive workforce is critically important to creating shareholder value.

To that end, we are committed to providing a safe workplace and opportunities for professional growth and advancement based on performance, qualification, demonstrated skill and achievement at a fair wage.

As part of our commitment to focus on safety, our Safety Now program builds safety awareness and provides training and incentives to create a "safety first" culture throughout our manufacturing operations.

4 unchanged sentences

This training includes increasing technical skills, improving professional skills, expanding technology experience and educating on safety and security protocols, to name a few.

We also have the Master of Craft program which is a development program for manufacturing line workers that provides a structured path of training and development for an employee to learn more, earn more and map out their career along the way.

We have a multi-channel bi-lingual compliance training initiative so that our team members will understand our commitment to, and their responsibility for, maintaining high standards of integrity in the workplace.

7 unchanged sentences

Available Information

The Company's periodic and current reports, proxy statements, as well as any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are made available free of charge through our web site, www.cavcoindustries.com, as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC.

The Company's periodic and current reports, proxy statements, as well as any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are made available free of charge through our website, www.cavcoindustries.com, as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC.

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-K

Item 1. Business