What changed in this filing

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Item 1. Financial Statements

2024-11-01 compared with 2024-08-02 · 116 added, 65 removed, 405 unchanged (31% of the section changed)

3 unchanged sentences

(Dollars in thousands, except per share amounts)

September 28,

2024 March 30,

49 unchanged sentences

(Dollars in thousands, except per share amounts)

Three Months Ended

Three Months Ended Six Months Ended

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

$ 507,461 $ 452,030 $ 985,060 $ 927,905

7 unchanged sentences

Interest expense ( 125 ) ( 257 ) ( 215 ) ( 523 )

Other (expense) income, net ( 111 ) 126

Other income, net 258 655 147 781

Income before income taxes 54,950 51,661 98,811 112,338

8 unchanged sentences

Net change in unrealized position of investments held

Applicable income tax (expense) benefit ( 14 ) 12

( 11 ) 65 54 9

Applicable income tax (expense) 3 ( 14 ) ( 11 ) ( 2 )

Comprehensive income 44,014 41,627 78,501 87,996

11 unchanged sentences

(Dollars in thousands)

Three Months Ended

Six Months Ended

September 28,

2024 September 30,

OPERATING ACTIVITIES

21 unchanged sentences

Purchases of property, plant and equipment ( 9,854 ) ( 8,470 )

Payments for acquisitions, net — ( 1,298 )

Proceeds from sale of property, plant and equipment 127 4,490

1 unchanged sentence

Proceeds from sale of investments 11,131 5,356

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

Net cash used in by investing activities ( 11,029 ) ( 6,421 )

FINANCING ACTIVITIES

13 unchanged sentences

Change in GNMA loans eligible for repurchase $ 496 $ ( 3,250 )

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

See accompanying Notes to Consolidated Financial Statements

33 unchanged sentences

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

Three Months Ended

Three Months Ended Six Months Ended

September 28, 2024 September 30, 2023 September 28,

2024 September 30,

Factory-built housing

4 unchanged sentences

Insurance agency commissions received from third-party insurance companies

1,268 1,017 2,674 1,916

All other sources 19,850 16,947 37,995 34,814

2 unchanged sentences

Investments consisted of the following (in thousands):

September 28,

2024 March 30,

6 unchanged sentences

$ 12,845 $ 17,316

Investments in marketable equity securities consist of investments in the common stock of industrial and other companies.

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

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):

June 29, 2024 March 30, 2024

September 28, 2024 March 30, 2024

Value Amortized Cost Fair

8 unchanged sentences

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

September 28, 2024

Due in less than one year $ 7,534 $ 7,475

1 unchanged sentence

Due after five years through ten years 225 225

Due after ten years — —

Mortgage-backed securities 8,248 8,246

1 unchanged sentence

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

Three Months Ended

Three Months Ended Six Months Ended

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Marketable equity securities

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

Net gain (loss) recognized during the period $ 514 $ ( 185 ) $ 60 $ 275

Net loss (gain) recognized on securities sold during the period 88 ( 110 ) ( 464 ) ( 130 )

Unrealized gain (loss) recognized during the period on securities still held $ 602 $ ( 295 ) $ ( 404 ) $ 145

Inventories consisted of the following (in thousands):

September 28,

2024 March 30,

5 unchanged sentences

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

September 28,

2024 March 30,

10 unchanged sentences

The consumer loans held for investment had the following characteristics:

September 28,

2024 March 30,

3 unchanged sentences

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

September 28,

2024 March 30,

5 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):

June 29, 2024

September 28, 2024

2025 2024 2023 2022 2021 Prior Total

19 unchanged sentences

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

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

As of September 28, 2024, 53 % 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.

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 28, 2024 or March 30, 2024.

Commercial Loans Receivable

1 unchanged sentence

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

September 28,

2024 March 30,

6 unchanged sentences

The commercial loans receivable balance had the following characteristics:

September 28,

2024 March 30,

2 unchanged sentences

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 June 29, 2024 and March 30, 2024, there were no commercial loans considered nonperforming.

As of September 28, 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):

June 29, 2024

September 28, 2024

2025 2024 2023 2022 2021 Total

3 unchanged sentences

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

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 September 28, 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 September 28, 2024, we had concentrations of our outstanding principal balance of the commercial loans receivable balance in New York of 18 % and California of 16 %.

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 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

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

Total lease assets $ 43,581 $ 44,940

Lease Liabilities

Operating lease liabilities Accrued expenses and other current liabilities $ 5,466 $ 5,303

Finance lease liabilities Accrued expenses and other current liabilities 81 80

Operating lease liabilities Operating lease liabilities 33,873 35,148

Finance lease liabilities Other liabilities 6,066 6,086

Total lease liabilities $ 45,486 $ 46,617

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

No other state had concentrations in excess of 10% of the outstanding principal balance of the commercial loans receivable as of September 28, 2024 or March 30, 2024.

As of September 28, 2024 and March 30, 2024, one independent third-party and its affiliates comprised 12 % and 13 %, respectively, of the net commercial loans receivable principal balance outstanding, all of which are secured .

Accrued Expenses and Other Current Liabilities

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

September 28,

2024 March 30,

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

Customer deposits $ 46,712 $ 40,856

Salaries, wages and benefits 43,673 38,125

Unearned insurance premiums 35,490 33,449

2 unchanged sentences

Insurance loss reserves 14,620 10,540

Accrued self-insurance 14,692 14,124

Accrued insurance 14,194 14,124

Other 55,250 49,757

1 unchanged sentence

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

Three Months Ended

Three Months Ended Six Months Ended

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Balance at beginning of period $ 31,815 $ 32,401 $ 31,718 $ 31,368

4 unchanged sentences

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

September 28,

2024 March 30,

3 unchanged sentences

$ 7,529 $ 7,759

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.

As of September 28, 2024, 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 September 28, 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

3 unchanged sentences

Three Months Ended

June 29, 2024 July 1, 2023

September 28, 2024 September 30, 2023

Written Earned Written Earned

6 unchanged sentences

$ 11,803 $ 13,392 $ 13,134 $ 11,784

Six Months Ended

September 28, 2024 September 30, 2023

Written Earned Written Earned

Direct premiums

$ 22,883 $ 24,479 $ 20,446 $ 18,047

Assumed premiums—nonaffiliated

23,038 19,599 19,305 17,421

Ceded premiums—nonaffiliated

( 17,065 ) ( 17,065 ) ( 12,565 ) ( 12,565 )

$ 28,856 $ 27,013 $ 27,186 $ 22,903

Typical insurance policies written or assumed have a maximum coverage of $ 0.4 million per claim, of which we cede $ 0.15 million of the risk of loss per reinsurance.

1 unchanged sentence

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.

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

The following details the activity in the incurred but not reported ("IBNR") reserve for the three and six months ended September 28, 2024 a nd September 30, 2023 (in thousands):

Three Months Ended Six Months Ended

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Balance at beginning of period $ 18,927 $ 13,001 $ 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 $ 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 $ 3.0 million at June 29, 2024 and $ 2.9 million at March 30, 2024 .

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 $ 126 million and $ 121 million at September 28, 2024 and March 30, 2024, respectively, without reduction for the estimated resale value of the home s.

During the three and six months ended September 28, 2024 we did not receive any demand notices.

In all cas es, 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 $ 3.1 million at September 28, 2024 and $ 2.9 million at March 30, 2024 .

Construction-Period Mortgages.

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

September 28,

2024 March 30,

3 unchanged sentences

Representations and Warranties of Mortgages Sold .

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 .

The reserve for contingent repurchases and indemnification obliga tions was $ 0.6 million as of both September 28, 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 six months ended September 28, 2024 or September 30, 2023 .

Interest Rate Lock Commitments ("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.

As of September 28, 2024 and March 30, 2024, we had outstanding IRLCs with a notional amount of $ 14.7 million and $ 39.0 million, respectively.

For the three and six months ended September 28, 2024, we recognized insignificant non-cash gains on outstanding IRLCs.

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

Forward Sales 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.

As of September 28, 2024 and March 30, 2024, we had $ 7.1 million and $ 2.8 million in outstanding forward sales commitments for sales of mortgage backed securities and whole loan commitments (collectively, the "Commitments"), respectively.

During the three and six months ended September 28, 2024, we recognized insignificant non-cash losses.

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

Legal Matters.

3 unchanged sentences

Stockholders' Equity and Redeemable Noncontrolling Interest

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):

The following tables represent changes in stockholders' equity attributable to Cavco's stockholders and redeemable noncontrolling interest during the six months ended September 28, 2024 and September 30, 2023, respectively (dollars in thousands):

Equity Attributable to Cavco Stockholders

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

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

Shares Amount

6 unchanged sentences

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

Net income — — — — 43,815 — 43,815

Other comprehensive income, net — — — — — 198 198

Net issuance of common stock under stock incentive plans 16,275 — 1,220 — — 1,220

Stock-based compensation — — — 2,713 — — 2,713

Common stock repurchases — — ( 44,509 ) — — — ( 44,509 )

Balance, September 28, 2024 9,417,332 $ 94 $ ( 348,406 ) $ 284,995 $ 1,105,371 $ ( 77 ) $ 1,041,977

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 (loss) income Total Redeemable noncontrolling interest

Shares Amount

7 unchanged sentences

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 —

Net issuance of common stock under stock incentive plans 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 $ —

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

Three Months Ended Six Months Ended

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Net income attributable to Cavco common stockholders $ 43,815 $ 41,539 $ 78,244 $ 87,896

9 unchanged sentences

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

June 29, 2024 March 30, 2024

September 28, 2024 March 30, 2024

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 28,

2024 March 30,

9 unchanged sentences

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

Three Months Ended

Three Months Ended Six Months Ended

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Factory-built housing $ 486,343 $ 434,066 $ 944,391 $ 891,175

1 unchanged sentence

$ 507,461 $ 452,030 $ 985,060 $ 927,905

Income before income taxes:

Income (loss) before income taxes:

Factory-built housing $ 55,905 $ 50,226 $ 105,005 $ 112,051

1 unchanged sentence

$ 54,950 $ 51,661 $ 98,811 $ 112,338

September 28,

2024 March 30,

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