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Item 1. Financial Statements

2024-08-02 compared with 2024-02-02 · 94 added, 285 removed, 376 unchanged (50% of the section changed)

3 unchanged sentences

(Dollars in thousands, except per share amounts)

2023 April 1,

2024 March 30,

ASSETS (Unaudited)

20 unchanged sentences

Total assets $ 1,380,682 $ 1,354,160

LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS' EQUITY

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

5 unchanged sentences

Deferred income taxes 4,598 4,575

Redeemable noncontrolling interest — 1,219

Stockholders' equity

13 unchanged sentences

Total stockholders' equity 1,038,540 1,033,411

Total liabilities, redeemable noncontrolling interest and stockholders' equity $ 1,326,596 $ 1,307,975

Total liabilities and stockholders' equity $ 1,380,682 $ 1,354,160

See accompanying Notes to Consolidated Financial Statements

2 unchanged sentences

(Dollars in thousands, except per share amounts)

Three Months Ended Nine Months Ended

2023 December 31,

2022 December 30,

2023 December 31,

Three Months Ended

$ 477,599 $ 475,875

16 unchanged sentences

Reclassification adjustment for securities sold 9 3

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

Applicable income tax (expense) ( 2 ) ( 1 )

Net change in unrealized position of investments held

13 107 22 ( 412 )

Applicable income tax (expense) benefit ( 14 ) 12

12 unchanged sentences

(Dollars in thousands)

Nine Months Ended

2023 December 31,

Three Months Ended

OPERATING ACTIVITIES

6 unchanged sentences

Non-cash interest income, net ( 286 ) ( 297 )

Loss (gain) on sale or retirement of property, plant and equipment, net 186 ( 116 )

Loss on sale or retirement of property, plant and equipment, net 11 190

Gain on investments and sale of loans, net ( 177 ) ( 3,165 )

Distributions of earnings from equity method investments — 4,306

Changes in operating assets and liabilities, net of acquisitions

11 unchanged sentences

Purchases of property, plant and equipment ( 4,975 ) ( 4,183 )

Payments for acquisitions, net ( 19,702 ) —

Proceeds from sale of property, plant and equipment 10 4,434

1 unchanged sentence

Proceeds from sale of investments 4,163 3,545

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

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

Net cash (used in) provided by investing activities ( 5,349 ) 2,086

FINANCING ACTIVITIES

14 unchanged sentences

Right-of-use assets recognized and operating lease obligations incurred $ 1,315 $ 687

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

See accompanying Notes to Consolidated Financial Statements

7 unchanged sentences

In addition, references throughout to numbered "Notes" refer to these Notes to Consolidated Financial Statements (Unaudited), unless otherwise stated.

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 (expense) income, net to Interest income to conform to current period classification.

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

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.

These Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and the Notes to the Consolidated Financial Statements included in our 2023 Annual Report on Form 10-K for the year ended April 1, 2023, filed with the SEC ("Form 10-K").

These Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and the Notes to the Consolidated Financial Statements included in our 2024 Annual Report on Form 10-K for the year ended March 30, 2024, filed with the SEC ("Form 10-K").

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying Notes.

4 unchanged sentences

The current fiscal year will end on March 29, 2025 and will include 52 weeks.

We operate in two segments:

(1) factory-built housing, which includes wholesale and retail factory-built housing operations, and (2) financial services, which includes manufactured housing consumer finance and insurance.

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 in 48 states and Canada as well as 73 Company-owned U.S.

retail stores, of which 43 are located in Texas.

The financial services segment is comprised of a finance subsidiary, CountryPlace Acceptance Corp.

("CountryPlace"), and an insurance subsidiary, Standard Casualty Company ("Standard Casualty").

CountryPlace is an approved Federal National Mortgage Association and Federal Home Loan Mortgage Corporation seller/servicer and a Government National Mortgage Association ("GNMA") mortgage-backed securities issuer that offers conforming mortgages, non-conforming mortgages and home-only loans to purchasers of factory-built homes.

Standard Casualty provides property and casualty insurance primarily to owners of manufactured homes.

During fiscal 2023, we completed the acquisition of Solitaire Inc.

and other related entities (collectively "Solitaire Homes"), including their four manufacturing facilities and twenty-two retail locations by acquiring 100% of the outstanding stock of Solitaire Homes.

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

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.

Recent Accounting Pronouncements

The Company considers the applicability and impact of all Accounting Standards Updates ("ASUs") issued by the Financial Accounting Standards Board ("FASB").

ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on the Company's Consolidated Financial Statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Taxes Disclosures, which requires greater disaggregation of income tax disclosures.

The new standard requires additional information to be disclosed with respect to the income tax rate reconciliation and income taxes paid disaggregated by jurisdiction.

This ASU should be applied prospectively for fiscal years beginning after December 15, 2024, with retrospective application permitted.

The Company is currently evaluating the impacts of this guidance on the Company’s Consolidated Financial Statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which requires companies to enhance the disclosures about segment expenses.

The new standard requires the disclosure of the Company’s Chief Operating Decision Maker ("CODM"), expanded incremental line-item disclosures of significant segment expenses used by the CODM for decision-making, and the inclusion of previous annual only segment disclosure requirements on a quarterly basis.

This ASU should be applied retrospectively for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The Company is currently evaluating the impacts of this guidance on the Company’s Consolidated Financial Statements.

Revenue from Contracts with Customers

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

Three Months Ended Nine Months Ended

December 30, 2023 December 31, 2022 December 30,

2023 December 31,

Three Months Ended

Factory-built housing

4 unchanged sentences

Insurance agency commissions received from third-party insurance companies

1,229 887 3,145 3,313

All other sources 18,145 17,867

1 unchanged sentence

$ 477,599 $ 475,875

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):

2023 April 1,

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

Restricted cash, current 13,215 11,728

Restricted cash 585 335

$ 366,608 $ 283,490

Investments consisted of the following (in thousands):

2023 April 1,

2024 March 30,

Available-for-sale debt securities $ 20,025 $ 18,669

Marketable equity securities

10,628 11,961

Non-marketable equity investments

5 unchanged sentences

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):

December 30, 2023 April 1, 2023

June 29, 2024 March 30, 2024

Value Amortized Cost Fair

7 unchanged sentences

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

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

December 30, 2023

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

June 29, 2024

Due in less than one year $ 7,880 $ 7,778

5 unchanged sentences

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

Three Months Ended Nine Months Ended

2023 December 31,

2022 December 30,

2023 December 31,

Three Months Ended

Marketable equity securities

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

Net (loss) gain recognized during the period $ ( 454 ) $ 460

Net (gain) recognized on securities sold during the period ( 552 ) ( 20 )

Unrealized (loss) gain recognized during the period on securities still held $ ( 1,006 ) $ 440

Inventories consisted of the following (in thousands):

2023 April 1,

2024 March 30,

Raw materials $ 75,589 $ 78,241

4 unchanged sentences

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

2023 April 1,

2024 March 30,

Loans held for investment, previously securitized $ 15,989 $ 16,968

9 unchanged sentences

The consumer loans held for investment had the following characteristics:

2023 April 1,

2024 March 30,

Weighted average contractual interest rate 8.1 % 8.1 %

2 unchanged sentences

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,

2024 March 30,

Current $ 50,756 $ 43,810

4 unchanged sentences

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

June 29, 2024

2025 2024 2023 2022 2021 Prior Total

8 unchanged sentences

$ 12,131 $ 12,297 $ 327 $ 95 $ 1,941 $ 25,857 $ 52,648

April 1, 2023

March 30, 2024

2024 2023 2022 2021 2020 Prior Total

8 unchanged sentences

$ 16,187 $ 328 $ 96 $ 2,105 $ 2,799 $ 24,141 $ 45,656

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 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.

As of June 29, 2024, 49 % of the outstanding principal balance of the consumer loans receivable portfolio was concentrated in Texas.

As of March 30, 2024, 46 % of the outstanding principal balance of the consumer loans receivable portfolio was concentrated in Texas and 10 % 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 June 29, 2024 or March 30, 2024.

Commercial Loans Receivable

1 unchanged sentence

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

2023 April 1,

2024 March 30,

Loans receivable $ 96,366 $ 91,938

5 unchanged sentences

The commercial loans receivable balance had the following characteristics:

2023 April 1,

2024 March 30,

Weighted average contractual interest rate 7.0 % 7.4 %

1 unchanged sentence

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

As of June 29, 2024 and March 30, 2024, 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

$ 48,598 $ 34,344 $ 6,522 $ 2,462 $ 1,478 $ 774 $ 94,178

April 1, 2023

2023 2022 2021 2020 2019 Prior Total

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

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 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):

2023 April 1,

Property, plant and equipment, at cost

Buildings and improvements $ 170,423 $ 167,291

Machinery and equipment 78,496 76,826

Land 39,822 39,822

Construction in progress 7,913 5,472

June 29, 2024

2025 2024 2023 2022 2021 Total

$ 69,499 $ 19,089 $ 3,761 $ 1,925 $ 2,092 $ 96,366

Accumulated depreciation ( 72,438 ) ( 61,133 )

March 30, 2024

2024 2023 2022 2021 2020 Total

$ 57,691 $ 25,066 $ 4,823 $ 2,144 $ 2,214 $ 91,938

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.

As of June 29, 2024 and March 30, 2024, 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 June 29, 2024, we had concentrations of our outstanding principal balance of the commercial loans receivable balance in New York of 19 % and California of 14 %.

As of March 30, 2024, 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 June 29, 2024 or March 30, 2024.

As of June 29, 2024 and March 30, 2024, one independent third-party and its affiliates comprised 11 % and 13 %, respectively, of the net commercial loans receivable principal balance outstanding, all of which are secured .

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 December 30, 2023 and April 1, 2023 (in thousands):

Classification December 30,

2023 April 1,

The following table provides information about the financial statement classification of our lease balances reported within the Consolidated Balance Sheets as of June 29, 2024 and March 30, 2024 (in thousands):

Classification June 29,

2024 March 30,

Operating lease assets Operating lease right-of-use ("ROU") assets $ 37,712 $ 39,027

7 unchanged sentences

Total lease liabilities $ 45,486 $ 46,617

(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):

Operating Leases Finance Leases Total

Remainder of fiscal 2024 $ 1,688 $ 89 $ 1,777

Fiscal 2025 7,035 356 7,391

Fiscal 2026 6,980 356 7,336

Fiscal 2027 4,545 356 4,901

Fiscal 2028 3,649 356 4,005

Fiscal 2029 3,456 356 3,812

Thereafter 20,276 10,230 30,506

47,629 12,099 59,728

Amount representing interest ( 9,039 ) ( 5,913 ) ( 14,952 )

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

Goodwill and Other Intangibles, net

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

December 30, 2023 April 1, 2023

Amount Accumulated

Amortization Net

Amount Accumulated

Amortization Net

Indefinite-lived

Goodwill $ 120,744 $ — $ 120,744 $ 114,547 $ — $ 114,547

Trademarks and trade names

16,980 — 16,980 16,980 — 16,980

State insurance licenses

1,100 — 1,100 1,100 — 1,100

138,824 — 138,824 132,627 — 132,627

Customer relationships 15,000 ( 4,965 ) 10,035 16,900 ( 5,818 ) 11,082

1,114 ( 616 ) 498 1,114 ( 486 ) 628

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

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 future amortization is as follows (in thousands):

Remainder of fiscal year 2024 $ 392

Fiscal 2025 1,530

Fiscal 2026 1,488

Fiscal 2027 1,415

Fiscal 2028 1,299

Fiscal 2029 1,265

Thereafter 3,144

(1) Recorded net of accumulated amortization of $ 0.5 million and $ 0.4 million as of June 29, 2024 and March 30, 2024, respectively.

Accrued Expenses and Other Current Liabilities

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

2023 April 1,

2024 March 30,

Salaries, wages and benefits $ 40,823 $ 38,125

Customer deposits 44,994 40,856

Estimated warranties 32,822 31,368

Unearned insurance premiums 35,914 33,449

Estimated warranties 31,815 31,718

Accrued volume rebates 24,671 21,167

Insurance loss reserves 18,927 10,540

Accrued self-insurance 14,692 14,124

2 unchanged sentences

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

Three Months Ended Nine Months Ended

2023 December 31,

2022 December 30,

2023 December 31,

Three Months Ended

Balance at beginning of period $ 31,718 $ 31,368

4 unchanged sentences

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

2023 April 1,

2024 March 30,

Finance lease liabilities $ 6,147 $ 6,166

Mandatorily redeemable noncontrolling interest 2,796 2,268

Other secured financing 1,849 1,916

10,924 10,890

Less current portion included in Accrued expenses and other current liabilities ( 330 ) ( 323 )

$ 7,666 $ 7,759

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.

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.

We are party to a Credit Agreement (the "Credit Agreement") that matures in November 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.

As of June 29, 2024 and March 30, 2024, there were no borrowings outstanding under the Revolving Credit Facility and we were in compliance with all covenants.

Reinsurance and Insurance Loss Reserves

Certain of Standard Casualty's premiums and benefits are assumed from and ceded to other insurance companies under various reinsurance agreements.

Certain of Standard Casualty Company's ("Standard Casualty") premiums and benefits are assumed from and ceded to other insurance companies under various reinsurance agreements.

We remain obligated for amounts ceded in the event that the reinsurers do not meet their obligations.

1 unchanged sentence

Three Months Ended

December 30, 2023 December 31, 2022

Written Earned Written Earned

Direct premiums

$ 11,135 $ 10,693 $ 7,454 $ 7,529

Assumed premiums—nonaffiliated

8,430 8,459 7,709 8,358

Ceded premiums—nonaffiliated

( 6,406 ) ( 6,406 ) ( 4,413 ) ( 4,413 )

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

Nine Months Ended

December 30, 2023 December 31, 2022

June 29, 2024 July 1, 2023

Written Earned Written Earned

9 unchanged sentences

After this limit, amounts are recoverable through reinsurance for catastrophic losses in excess of $ 4.0 million per occurrence, up to a maximum of $ 110 million in the aggregate for that occurrence.

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

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,

The following details the activity in the incurred but not reported ("IBNR") reserve for the three months ended June 29, 2024 and July 1, 2023 (in thousands):

Three Months Ended

Balance at beginning of period $ 10,540 $ 10,939

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 $ 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.

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 $ 121 million at June 29, 2024 and March 30, 2024, without reduction for the estimated resale value of the homes.

During the first quarter of fiscal 2025 we did not receive any demand notices.

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 .

Our reserve for repurchase commitments, recorded in Accrued expenses and other current liabilities, was $ 3.0 million at June 29, 2024 and $ 2.9 million at March 30, 2024 .

Construction-Period Mortgages.

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

2023 April 1,

2024 March 30,

Construction loan contract amount $ 3,252 $ 1,960

2 unchanged sentences

Representations and Warranties of Mortgages Sold .

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 .

The reserve for contingent repurchases and indemnification obliga tions was $ 0.6 million as of June 29, 2024 and March 30, 2024, 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 three months ended June 29, 2024 or July 1, 2023 .

Interest Rate Lock Commitments ("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.

As of June 29, 2024 and July 1, 2023, w e had outstanding IRLCs with a notional amount of $ 24.5 million and $ 31.1 million, respectively.

For the three months ended June 29, 2024 and July 1, 2023, we recognized insignificant non-cash gains on outstanding IRLCs.

Forward Sales 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.

As of June 29, 2024 and July 1, 2023, we had $ 4.7 million and $ 1.1 million in outstanding forward sales commitments ("Commitments"), respectively.

During the three months ended June 29, 2024, we recognized insignificant non-cash losses.

During the three months ended July 1, 2023, we recognized an insignificant non-cash gain.

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 nine months ended December 30, 2023 (dollars in thousands):

The following tables represent changes in stockholders' equity attributable to Cavco's stockholders and redeemable noncontrolling interest during the three months ended June 29, 2024 and July 1, 2023, respectively (dollars in thousands):

Equity Attributable to Cavco Stockholders

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

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

Shares Amount

Balance, April 1, 2023 9,337,125 $ 93 $ ( 164,452 ) $ 271,950 $ 869,310 $ ( 615 ) $ 976,286 $ 1,219

Net income — — — — 46,357 — 46,357 54

Other comprehensive loss, net — — — — — ( 42 ) ( 42 ) —

Issuance of common stock under stock incentive plans, net 10,095 — — ( 1,213 ) — — ( 1,213 ) —

Stock-based compensation — — — 1,438 — — 1,438 —

Distributions — — — — — — — ( 120 )

Valuation adjustment — — — — — — — ( 33 )

Balance, July 1, 2023 9,347,220 93 ( 164,452 ) 272,175 915,667 ( 657 ) 1,022,826 1,120

Net income — — — — 41,539 — 41,539 34

Other comprehensive income, net — — — — — 54 54 —

Issuance of common stock under stock incentive plans, net 9,201 1 — 478 — — 479 —

Stock-based compensation — — — 1,551 — — 1,551 —

Common stock repurchases — — ( 47,194 ) — — — ( 47,194 ) —

Distributions — — — — — — — ( 180 )

Conversion to mandatorily redeemable noncontrolling interest — — — — — — — ( 974 )

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

Balance, March 30, 2024 9,389,953 $ 94 $ ( 274,693 ) $ 281,216 $ 1,027,127 $ ( 333 ) $ 1,033,411

Net income — — — — 34,429 — 34,429

Other comprehensive income, net — — — — — 58 58

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

Net issuance of common stock under stock incentive plans 11,104 — — ( 2,348 ) — — ( 2,348 )

Stock-based compensation — — — 2,194 — — 2,194

Common stock repurchases ( 29,204 ) ( 29,204 )

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

Balance, June 29, 2024 9,401,057 $ 94 $ ( 303,897 ) $ 281,062 $ 1,061,556 $ ( 275 ) $ 1,038,540

Equity Attributable to Cavco Stockholders

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

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

Shares Amount

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Other comprehensive loss, net — — — — — ( 42 ) ( 42 ) —

Issuance of common stock under stock incentive plans, net 5,957 — — ( 848 ) — — ( 848 ) —

Stock-based compensation — — — 1,425 — — 1,425 —

Common stock repurchases — — ( 38,960 ) — — — ( 38,960 ) —

Distributions — — — — — — — ( 240 )

Balance, July 2, 2022 9,298,235 93 ( 100,000 ) 263,626 688,358 ( 515 ) 851,562 677

Net income — — — — 74,116 — 74,116 82

Other comprehensive loss, net — — — — — ( 303 ) ( 303 ) —

Issuance of common stock under stock incentive plans, net 15,917 — — 1,457 — — 1,457 —

Stock-based compensation — — — 2,100 — — 2,100 —

Distributions — — — — — — — ( 240 )

Valuation adjustment — — — — — — — 407

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 ) —

Net issuance of common stock under stock incentive plans 10,095 — — ( 1,213 ) — — ( 1,213 ) —

Stock-based compensation — — — 1,438 — — 1,438 —

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

Distributions — — — — — — — ( 120 )

Valuation adjustment — — — — — — — ( 33 )

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

Balance, July 1, 2023 9,347,220 $ 93 $ ( 164,452 ) $ 272,175 $ 915,667 $ ( 657 ) $ 1,022,826 $ 1,120

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 Nine Months Ended

2023 December 31,

2022 December 30,

2023 December 31,

Three Months Ended

Net income attributable to Cavco common stockholders $ 34,429 $ 46,357

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

December 30, 2023 April 1, 2023

June 29, 2024 March 30, 2024

Value Estimated

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

2023 April 1,

2024 March 30,

Number of loans serviced with MSRs 3,782 3,842

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MSRs (in thousands) $ 3,179 $ 3,168

Related Party Transactions

We have non-marketable equity investments in other distribution operations outside of Company-owned retail stores.

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 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.

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 December 30, 2023)

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

Investments 334 — 334

Accounts receivable 3,536 ( 787 ) 2,749

Inventories 58,045 ( 143 ) 57,902

Property, plant and equipment 36,109 ( 103 ) 36,006

Other current assets 1,519 59 1,578

Intangible assets 3,400 — 3,400

Total identifiable assets acquired 108,062 ( 1,053 ) 107,009

Accounts payable and accrued liabilities 11,251 84 11,335

Net identifiable assets acquired 96,811 ( 1,137 ) 95,674

Goodwill 13,970 1,137 15,107

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

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):

December 31, 2022

Three Months Ended Nine Months Ended

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

Net income attributable to Cavco common stockholders 61,567 199,371

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

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

Three Months Ended Nine Months Ended

2023 December 31,

2022 December 30,

2023 December 31,

Three Months Ended

Factory-built housing $ 458,048 $ 457,109

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$ 43,861 $ 60,677

2023 April 1,

2024 March 30,

Total assets:

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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