What changed in this filing

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Item 1. Financial Statements

2025-01-31 compared with 2024-11-01 · 102 added, 94 removed, 427 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 Six Months Ended

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Three Months Ended Nine Months Ended

2024 December 30,

2023 December 28,

2024 December 30,

$ 522,040 $ 446,769 $ 1,507,100 $ 1,374,674

7 unchanged sentences

Interest expense ( 155 ) ( 842 ) ( 370 ) ( 1,365 )

Other income, net 258 655 147 781

Other income (expense), net 168 ( 224 ) 315 557

Income before income taxes 69,336 43,907 168,147 156,245

6 unchanged sentences

Reclassification adjustment for securities sold ( 97 ) 293 174 299

Applicable income tax (expense) ( 55 ) — ( 57 ) ( 1 )

Applicable income tax benefit (expense) 20 ( 62 ) ( 37 ) ( 63 )

Net change in unrealized position of investments held

( 11 ) 65 54 9

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

Applicable income tax benefit (expense) ( 2 ) ( 3 ) ( 13 ) ( 5 )

Comprehensive income 56,391 36,228 134,892 124,224

11 unchanged sentences

(Dollars in thousands)

Six Months Ended

September 28,

2024 September 30,

Nine Months Ended

2024 December 30,

OPERATING ACTIVITIES

6 unchanged sentences

Non-cash interest income, net ( 787 ) ( 1,230 )

Loss on sale or retirement of property, plant and equipment, net 26 40

(Gain) loss on sale or retirement of property, plant and equipment, net ( 19 ) 186

Gain on investments and sale of loans, net ( 1,901 ) ( 5,958 )

16 unchanged sentences

Proceeds from sale of investments 22,706 9,290

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

Net cash used in investing activities ( 13,976 ) ( 26,543 )

FINANCING ACTIVITIES

29 unchanged sentences

The Company operates on a 52-53 week fiscal year ending on the Saturday nearest to March 31 st of each year.

Each fiscal quarter consists of 13 weeks, with an occasional fourth quarter extending to 14 weeks, if necessary, for the fiscal year to end on the Saturday nearest to March 31 st .

Each fiscal quarter consists of 13 weeks, with an occasional fourth quarter extending to 14 weeks, if necessary, for the fiscal year to end on the Saturday nearest March 31 st .

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

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.

For a description of significant accounting policies 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

8 unchanged sentences

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.

The new standard requires the identification and 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.

1 unchanged sentence

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

In November 2024, the FASB issued ASU No.

2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses ("ASU 2024-03"), and in January 2025, the FASB issued ASU No.

2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Clarifying the Effective Date ("ASU 2025-01").

ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statement.

ASU 2024-03, as clarified by ASU 2025-01, is effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027.

Both early adoption and retrospective application are permitted.

The Company is currently evaluating the impact that the adoption of these standards will have on its 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 Six Months Ended

September 28, 2024 September 30, 2023 September 28,

2024 September 30,

Three Months Ended Nine Months Ended

December 28, 2024 December 30, 2023 December 28,

2024 December 30,

Factory-built housing

9 unchanged sentences

Investments consisted of the following (in thousands):

September 28,

2024 March 30,

1 unchanged sentence

Marketable equity securities

11,827 11,961

Non-marketable equity investments

3 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):

September 28, 2024 March 30, 2024

December 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.

September 28, 2024

December 28, 2024

Due in less than one year $ 8,402 $ 8,332

4 unchanged sentences

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

Three Months Ended Six Months Ended

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Three Months Ended Nine Months Ended

2024 December 30,

2023 December 28,

2024 December 30,

Marketable equity securities

Net gain (loss) recognized during the period $ ( 954 ) $ 776 $ ( 440 ) $ 1,051

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

Net (gain) recognized on securities sold during the period ( 1,649 ) ( 235 ) ( 1,561 ) ( 365 )

Unrealized gain (loss) recognized during the period on securities still held $ ( 2,603 ) $ 541 $ ( 2,001 ) $ 686

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):

September 28, 2024

December 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 September 28, 2024, 53 % of the outstanding principal balance of the consumer loans receivable portfolio was concentrated in Texas.

As of December 28, 2024, 55 % 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 September 28, 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 December 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 September 28, 2024 and March 30, 2024, there were no commercial loans considered nonperforming.

As of December 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):

September 28, 2024

December 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 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 December 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 December 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 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 .

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

As of December 28, 2024 and March 30, 2024, one independent third-party and its affiliates comprised 10 % 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,

Customer deposits $ 46,712 $ 40,856

Salaries, wages and benefits $ 44,338 $ 38,125

Unearned insurance premiums 35,490 33,449

Customer deposits 39,795 40,856

Estimated warranties 34,412 31,718

Unearned insurance premiums 33,419 33,449

Accrued volume rebates 30,481 21,167

4 unchanged sentences

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

Three Months Ended Six Months Ended

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Three Months Ended Nine Months Ended

2024 December 30,

2023 December 28,

2024 December 30,

Balance at beginning of period $ 33,081 $ 33,015 $ 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

$ 7,206 $ 7,759

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.

On November 12, 2024, the Company entered into that certain Amended and Restated Credit Agreement among the Company, Bank of America, N.A., as administrative agent, swing line lender, letter of credit issuer, and the guarantors party thereto (the "Credit Agreement"), providing for a $ 75 million revolving credit facility (the "Revolving Credit Facility"), including a $ 10 million letter of credit sub-facility.

The Revolving Credit Facility matures on November 12, 2029.

The Credit Agreement amends and restates the previous credit agreement between the parties entered into on November 22, 2022.

Loans under the Revolving Credit Facility will bear interest at a rate equal to (i) the Secured Overnight Financing Rate, plus a credit spread adjustment of 0.10 % (as adjusted, "Term SOFR"), plus the "applicable rate" or (ii) the "base rate" (defined as the highest of (a) the Bank of America prime rate, (b) the Federal Funds rate plus 0.50 %, and (c) Term SOFR plus 1.00 %) plus the "applicable rate." The applicable rate will be determined in accordance with a pricing grid based on the Company's Consolidated Total Leverage Ratio (as defined in the Credit Agreement) ranging from 1.25 % to 1.50 % per annum for Term SOFR rate loans and from 0.25 % to 0.50 % per annum for base rate loans.

In addition, the Company will pay a commitment fee on the unused portion of the Revolving Credit Facility of 0.20 % per annum.

The Revolving Credit Facility is guaranteed, on a joint and several basis, by certain of the Company's subsidiaries.

Subject to certain conditions and requirements set forth in the Credit Agreement, including the availability of additional lender commitments, the Company may request from time to time one or more term loan facilities, or increases in the aggregate commitments under the Revolving Credit Facility, in an aggregate amount not exceeding $ 75 million.

The Credit Agreement contains customary representations and warranties, affirmative and negative covenants (including restrictions, subject to customary exceptions, qualifications, and baskets, on the ability of the Company and its subsidiaries to incur additional indebtedness or guarantees of indebtedness, pay dividends or distributions on, redeem, repurchase, or retire capital stock, make investments, loans, advances, or acquisitions, enter into sale and leaseback transactions, engage in transactions with affiliates, create liens, transfer or sell assets, create restrictions

on the payment of dividends or other distributions from subsidiaries, and consolidate, merge, or transfer all or substantially all of the assets of the Company and its subsidiaries taken as a whole), and events of default (as defined in the Credit Agreement).

In addition, 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.

As of December 28, 2024 and March 30, 2024, there were no borrowings outstanding under the Revolving Credit Facility or the previous credit agreement entered into on November 22, 2022 and we were in compliance with all covenants.

Reinsurance and Insurance Loss Reserves

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

Certain of Standard Casualty Company's 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

September 28, 2024 September 30, 2023

December 28, 2024 December 30, 2023

Written Earned Written Earned

6 unchanged sentences

$ 23,407 $ 27,887 $ 13,159 $ 12,746

Six Months Ended

September 28, 2024 September 30, 2023

Nine Months Ended

December 28, 2024 December 30, 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.

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,

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

Three Months Ended Nine Months Ended

2024 December 30,

2023 December 28,

2024 December 30,

Balance at beginning of period $ 14,620 $ 9,154 $ 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 $ 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 .

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 $ 122 million and $ 121 million at December 28, 2024 and March 30, 2024, respectively, without reduction for the estimated resale value of the home s.

In the quarter ended December 28, 2024 we received one repurchase demand notice for two homes.

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

Our reserve for repurchase commitments, re corded in Accrued expenses and other current liabilities, was $ 3.2 million at December 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 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 .

The reserve for contingent repurchases and indemnification obliga tions was $ 0.7 million as of December 28, 2024 and $ 0.6 million as of 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 nine months ended December 28, 2024 or December 30, 2023 .

Interest Rate Lock Commitments ("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.

As of December 28, 2024 and March 30, 2024, we had outstanding IRLCs with a notional amount of $ 10.1 million and $ 39.0 million, respectively.

For the three and nine months ended December 28, 2024, we recognized insignificant non-cash losses and gains, respectively, on outstanding IRLCs.

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

Forward Sales Commitments .

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.

As of December 28, 2024 and March 30, 2024, we had $ 15.0 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 nine months ended December 28, 2024, we recognized insignificant non-cash gains.

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

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 six months ended September 28, 2024 and September 30, 2023, respectively (dollars in thousands):

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

Equity Attributable to Cavco Stockholders

14 unchanged sentences

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

Net income — — — — 56,462 — 56,462

Other comprehensive income, net — — — — — ( 70 ) ( 70 )

Net issuance of common stock under stock incentive plans 5,637 — — ( 168 ) — — ( 168 )

Stock-based compensation — — — 1,746 — — 1,746

Common stock repurchases — — ( 42,722 ) — — — ( 42,722 )

Balance, December 28, 2024 9,422,969 $ 94 $ ( 391,128 ) $ 286,573 $ 1,161,833 $ ( 147 ) $ 1,057,225

Equity Attributable to Cavco Stockholders

17 unchanged sentences

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

Net income — — — — 35,987 — 35,987 —

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

Net issuance of common stock under stock incentive plans 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 $ —

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 28,

2024 September 30,

2023 September 28,

2024 September 30,

Three Months Ended Nine Months Ended

2024 December 30,

2023 December 28,

2024 December 30,

Net income attributable to Cavco common stockholders $ 56,462 $ 35,987 $ 134,706 $ 123,883

9 unchanged sentences

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

September 28, 2024 March 30, 2024

December 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 Six Months Ended

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Three Months Ended Nine Months Ended

2024 December 30,

2023 December 28,

2024 December 30,

Factory-built housing $ 500,860 $ 426,939 $ 1,445,251 $ 1,318,114

5 unchanged sentences

$ 69,336 $ 43,907 $ 168,147 $ 156,245

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