CAVCO INDUSTRIES, INC. 10-Q

Item 1. Financial Statements CAVCO INDUSTRIES, INC. CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except per share amounts) June 28, 2025 March 29, 2025 ASSETS (Unaudited) Current assets Cash and cash equivalents $ 344,626 $ 356,225 Restricted cash, current 23,213 18,535 Accounts receivable, net 116,261 105,849 Short-term investments 17,821 19,842 Current portion of consumer loans receivable, net 37,795 35,852 Current portion of commercial loans receivable, net 47,102 43,492 Current portion of commercial loans receivable from affiliates, net 1,850 2,881 Inventories 258,068 252,695 Prepaid expenses and other current assets 68,536 74,815 Total current assets 915,272 910,186 Restricted cash 585 585 Investments 19,362 18,067 Consumer loans receivable, net 20,152 20,685 Commercial loans receivable, net 53,403 48,605 Commercial loans receivable from affiliates, net 5,247 4,768 Property, plant and equipment, net 231,880 227,620 Goodwill 121,969 121,969 Other intangibles, net 16,359 16,731 Operating lease right-of-use assets 34,118 35,576 Deferred income taxes 1,270 1,853 Total assets $ 1,419,617 $ 1,406,645 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 42,077 $ 37,195 Accrued expenses and other current liabilities 275,203 265,971 Total current liabilities 317,280 303,166 Operating lease liabilities 30,188 31,538 Other liabilities 7,316 7,359 Total liabilities 354,784 342,063 Stockholders' equity Preferred stock, $ 0.01 par value; 1,000,000 shares authorized; No shares issued or outstanding — — Common stock, $ 0.01 par value; 40,000,000 shares authorized; Issued 9,453,363 and 9,436,732 shares, respectively; Outstanding 7,916,350 and 8,008,012 shares, respectively 95 94 Treasury stock, at cost; 1,537,013 and 1,428,720 shares, respectively ( 474,993 ) ( 424,624 ) Additional paid-in capital 289,821 290,940 Retained earnings 1,249,805 1,198,163 Accumulated other comprehensive income 105 9 Total stockholders' equity 1,064,833 1,064,582 Total liabilities and stockholders' equity $ 1,419,617 $ 1,406,645 See accompanying Notes to Consolidated Financial Statements 1 Table of Contents CAVCO INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Dollars in thousands, except per share amounts) (Unaudited) Three Months Ended June 28, 2025 June 29, 2024 Net revenue $ 556,857 $ 477,599 Cost of sales 427,351 374,197 Gross profit 129,506 103,402 Selling, general and administrative expenses 69,148 64,851 Income from operations 60,358 38,551 Interest income 5,103 5,511 Interest expense ( 164 ) ( 90 ) Other (expense), net — ( 111 ) Income before income taxes 65,297 43,861 Income tax expense ( 13,655 ) ( 9,432 ) Net income $ 51,642 $ 34,429 Comprehensive income Net income $ 51,642 $ 34,429 Reclassification adjustment for securities sold 117 9 Applicable income tax expense ( 24 ) ( 2 ) Net change in unrealized position of investments held 4 65 Applicable income tax expense ( 1 ) ( 14 ) Comprehensive income $ 51,738 $ 34,487 Net income per share Basic $ 6.49 $ 4.15 Diluted $ 6.42 $ 4.11 Weighted average shares outstanding Basic 7,953,720 8,286,476 Diluted 8,041,008 8,372,254 See accompanying Notes to Consolidated Financial Statements 2 Table of Contents CAVCO INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (Unaudited) Three Months Ended June 28, 2025 June 29, 2024 OPERATING ACTIVITIES Net income $ 51,642 $ 34,429 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 5,169 4,761 Provision for credit losses ( 64 ) 89 Deferred income taxes 558 7 Stock-based compensation expense 3,564 2,195 Non-cash interest income, net ( 239 ) ( 286 ) Loss on sale or retirement of property, plant and equipment, net 80 11 Gain on investments and sale of loans, net ( 1,054 ) ( 177 ) Changes in operating assets and liabilities, net of acquisitions Accounts receivable ( 10,390 ) ( 7,977 ) Consumer loans receivable originated ( 15,231 ) ( 20,833 ) Proceeds received on consumer loans receivable 13,774 14,504 Inventories ( 5,373 ) ( 3,505 ) Prepaid expenses and other current assets 7,561 5,648 Commercial loans receivable originated ( 42,378 ) ( 26,750 ) Principal payments received on commercial loans receivable 34,532 22,356 Accounts payable, accrued expenses and other liabilities 13,372 22,921 Net cash provided by operating activities 55,523 47,393 INVESTING ACTIVITIES Purchases of property, plant and equipment ( 9,138 ) ( 4,975 ) Proceeds from sale of property, plant and equipment — 10 Purchases of investments ( 6,438 ) ( 4,547 ) Proceeds from sale of investments 7,861 4,163 Net cash used in investing activities ( 7,715 ) ( 5,349 ) FINANCING ACTIVITIES Payments for taxes on stock option exercises and releases of equity awards ( 4,709 ) ( 2,349 ) Proceeds from exercise of stock options 29 — Payments on finance leases and other secured financings ( 49 ) ( 51 ) Payments for common stock repurchases ( 50,000 ) ( 29,463 ) Net cash used in financing activities ( 54,729 ) ( 31,863 ) Net (decrease) increase in cash, cash equivalents and restricted cash ( 6,921 ) 10,181 Cash, cash equivalents and restricted cash at beginning of the fiscal year 375,345 368,753 Cash, cash equivalents and restricted cash at end of the period $ 368,424 $ 378,937 Supplemental disclosures of cash flow information Cash paid for income taxes $ 5,419 $ 4,720 Cash paid for interest $ 68 $ 22 Supplemental disclosures of noncash activity Change in GNMA loans eligible for repurchase $ 563 $ 76 Right-of-use assets recognized and operating lease obligations incurred $ — $ 1,315 See accompanying Notes to Consolidated Financial Statements 3 Table of Contents CAVCO INDUSTRIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. Basis of Presentation The accompanying unaudited Consolidated Financial Statements of Cavco Industries, Inc. and its subsidiaries (collectively, "we," "us," "our," the "Company" or "Cavco") have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC") for Quarterly Reports on Form 10-Q and Article 10 of SEC Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") have been condensed or omitted pursuant to such rules and regulations. 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 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 other than those mentioned in Note 19. 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 2025 Annual Report on Form 10-K for the year ended March 29, 2025, 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. Due to uncertainties, actual results could differ from the estimates and assumptions used in preparation of the Consolidated Financial Statements. The Consolidated Statements of Comprehensive Income and Consolidated Statements of Cash Flows for the interim periods are not necessarily indicative of the results or cash flows for the full year. 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 March 31 st . The current fiscal year will end on March 28, 2026 and will include 52 weeks. 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. 2. 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 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 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. We adopted ASU 2023-07 effective for the annual period beginning March 31, 2024, and for interim periods beginning March 30, 2025. ASU 2023-07 is applied retrospectively to all prior periods presented in the accompanying 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. 4 Table of Contents 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. 3. Revenue from Contracts with Customers The following table summarizes Net revenue disaggregated by reportable segment and source (in thousands): Three Months Ended June 28, 2025 June 29, 2024 Factory-built housing Home sales $ 509,736 $ 436,429 Delivery, setup and other revenues 25,958 21,619 535,694 458,048 Financial services Insurance agency commissions received from third-party insurance companies 1,410 1,406 All other sources 19,753 18,145 21,163 19,551 $ 556,857 $ 477,599 4. 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): June 28, 2025 March 29, 2025 Cash and cash equivalents $ 344,626 $ 356,225 Restricted cash, current 23,213 18,535 Restricted cash 585 585 $ 368,424 $ 375,345 5 Table of Contents 5. Investments Investments consisted of the following (in thousands): June 28, 2025 March 29, 2025 Available-for-sale debt securities $ 20,359 $ 21,415 Marketable equity securities 11,805 11,425 Non-marketable equity investments 5,019 5,069 37,183 37,909 Less short-term investments ( 17,821 ) ( 19,842 ) $ 19,362 $ 18,067 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 28, 2025 March 29, 2025 Amortized Cost Fair Value Amortized Cost Fair Value Residential mortgage-backed securities $ 5,175 $ 5,226 $ 4,122 $ 4,120 State and political subdivision debt securities 6,483 6,531 6,955 6,976 Corporate debt securities 8,568 8,602 10,326 10,319 $ 20,226 $ 20,359 $ 21,403 $ 21,415 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 may differ from contractual maturities as borrowers at times have the right to call or prepay obligations, with or without penalties. June 28, 2025 Amortized Cost Fair Value Due in less than one year $ 5,697 $ 5,674 Due after one year through five years 7,100 7,180 Due after five years through ten years 1,931 1,949 Due after ten years 323 330 Mortgage-backed securities 5,175 5,226 $ 20,226 $ 20,359 Net investment gains and losses on marketable equity securities were as follows (in thousands): Three Months Ended June 28, 2025 June 29, 2024 Marketable equity securities Net gain (loss) recognized during the period $ 599 $ ( 454 ) Less: Net loss (gain) recognized on securities sold during the period 56 ( 552 ) Unrealized gain (loss) recognized during the period on securities still held $ 655 $ ( 1,006 ) 6 Table of Contents 6. Inventories Inventories consisted of the following (in thousands): June 28, 2025 March 29, 2025 Raw materials $ 78,964 $ 79,098 Work in process 32,368 29,808 Finished goods 146,736 143,789 $ 258,068 $ 252,695 7. Consumer Loans Receivable The following table summarizes consumer loans receivable (in thousands): June 28, 2025 March 29, 2025 Loans held for investment, previously securitized $ 13,030 $ 13,775 Loans held for investment 12,122 12,196 Loans held for sale 30,155 27,981 Construction advances 4,257 4,210 59,564 58,162 Deferred financing fees and other, net ( 709 ) ( 686 ) Allowance for loan losses ( 908 ) ( 939 ) 57,947 56,537 Less current portion ( 37,795 ) ( 35,852 ) $ 20,152 $ 20,685 The consumer loans held for investment had the following characteristics: June 28, 2025 March 29, 2025 Weighted average contractual interest rate 7.8 % 7.9 % Weighted average effective interest rate 7.9 % 10.3 % Weighted average months to maturity 225 221 The following table is a consolidated summary of the delinquency status of the outstanding principal balance of consumer loans receivable (in thousands): June 28, 2025 March 29, 2025 Current $ 58,034 $ 56,401 31 to 60 days 284 1,082 61 to 90 days 141 4 91+ days 1,105 675 $ 59,564 $ 58,162 7 Table of Contents The following table disaggregates the outstanding principal balance of consumer loans receivable by credit quality indicator and fiscal year of origination (in thousands): June 28, 2025 2026 2025 2024 2023 2022 Prior Total Prime- FICO score 680 and greater $ 5,204 $ 13,661 $ 9,045 $ 322 $ 91 $ 13,386 $ 41,709 Near Prime- FICO score 620-679 1,659 3,401 1,205 — — 9,836 16,101 Sub-Prime- FICO score less than 620 14 322 — — — 651 987 No FICO score — 65 440 — — 262 767 $ 6,877 $ 17,449 $ 10,690 $ 322 $ 91 $ 24,135 $ 59,564 March 29, 2025 2025 2024 2023 2022 2021 Prior Total Prime- FICO score 680 and greater $ 18,133 $ 9,209 $ 323 $ 92 $ 761 $ 13,197 $ 41,715 Near Prime- FICO score 620-679 2,948 1,210 — — 1,026 9,000 14,184 Sub-Prime- FICO score less than 620 537 — — — 17 680 1,234 No FICO score 317 441 — — — 271 1,029 $ 21,935 $ 10,860 $ 323 $ 92 $ 1,804 $ 23,148 $ 58,162 As of June 28, 2025, 53 % of the outstanding principal balance of the consumer loans receivable portfolio was concentrated in Texas. As of March 29, 2025, 54 % of the outstanding principal balance of the consumer loans receivable portfolio was concentrated in Texas and 11 % 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 28, 2025 or March 29, 2025. 8. Commercial Loans Receivable The commercial loans receivable balance consists of direct financing arrangements for the home product needs of our independent distributors, community owners and developers. Commercial loans receivable, net consisted of the following (in thousands): June 28, 2025 March 29, 2025 Loans receivable (including from affiliates) $ 108,143 $ 100,297 Allowance for loan losses ( 338 ) ( 361 ) Deferred financing fees, net ( 203 ) ( 190 ) 107,602 99,746 Less current portion of commercial loans receivable (including from affiliates), net ( 48,952 ) ( 46,373 ) $ 58,650 $ 53,373 The commercial loans receivable balance had the following characteristics: June 28, 2025 March 29, 2025 Weighted average contractual interest rate 8.0 % 8.3 % Weighted average months outstanding 10 10 8 Table of Contents 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 28, 2025 and March 29, 2025, 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 28, 2025 2026 2025 2024 2023 2022 Prior Total Performing $ 33,246 $ 49,507 $ 19,163 $ 4,910 $ 998 $ 319 $ 108,143 March 29, 2025 2025 2024 2023 2022 2021 Prior Total Performing $ 66,843 $ 24,215 $ 7,006 $ 1,014 $ 1,219 $ — $ 100,297 As of June 28, 2025 and March 29, 2025, approximately 16 % of our outstanding commercial loans receivable principal balance was concentrated in California. As of June 28, 2025 and March 29, 2025, approximately 14 % and 17 %, respectively, was concentrated in New York. As of June 28, 2025, Arizona and North Carolina each had approximately 12 % concentrations. We had concentrations with one independent third-party and its affiliates that equaled 12 % and 10 % of the net commercial loans receivable principal balance outstanding, all of which was secured, as of June 28, 2025 and March 29, 2025, respectively. The risks created by these concentrations have been considered in the determination of the adequacy of the allowance for loan losses. 9. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): June 28, 2025 March 29, 2025 Salaries, wages and benefits $ 47,431 $ 45,640 Customer deposits 47,145 46,934 Estimated warranties 34,383 33,189 Unearned insurance premiums 34,322 33,863 Accrued volume rebates 27,660 21,208 Accrued insurance 13,239 13,094 Insurance loss reserves 13,118 16,201 Other 57,905 55,842 $ 275,203 $ 265,971 9 Table of Contents 10. Warranties Activity in the liability for estimated warranties was as follows (in thousands): Three Months Ended June 28, 2025 June 29, 2024 Balance at beginning of period $ 33,189 $ 31,718 Charged to costs and expenses 16,625 12,091 Payments and deductions ( 15,431 ) ( 11,994 ) Balance at end of period $ 34,383 $ 31,815 11. Other Liabilities The following table summarizes secured financings and other obligations (in thousands): June 28, 2025 March 29, 2025 Finance lease liabilities $ 6,066 $ 6,086 Other secured financing 1,567 1,594 7,633 7,680 Less current portion included in Accrued expenses and other current liabilities ( 317 ) ( 321 ) $ 7,316 $ 7,359 12. Debt We are party to an 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 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 up to $ 150 million. As of June 28, 2025 and March 29, 2025, there were no borrowings outstanding under the Revolving Credit Facility and we were in compliance with all covenants. 13. Reinsurance and Insurance Loss Reserves 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. 10 Table of Contents The effects of reinsurance on premiums written and earned were as follows (in thousands): Three Months Ended June 28, 2025 June 29, 2024 Written Earned Written Earned Direct premiums $ 12,151 $ 11,532 $ 13,503 $ 12,302 Assumed premiums—nonaffiliated 11,482 10,870 11,735 9,504 Ceded premiums—nonaffiliated ( 7,710 ) ( 7,710 ) ( 8,185 ) ( 8,185 ) $ 15,923 $ 14,692 $ 17,053 $ 13,621 Typical insurance policies written or assumed have a maximum coverage of $ 0.4 million per claim, of which we cede $ 0.2 million of the risk of loss per reinsurance. Therefore, our risk of loss is limited to $ 0.3 million per claim on typical policies, subject to the reinsurers meeting their obligations. After this limit, amounts are recoverable through reinsurance for catastrophic losses in excess of $ 4.0 million per occurrence, up to a maximum of $ 90 million in the aggregate for that occurrence. The following details the activity in the incurred but not reported reserve for the three months ended June 28, 2025 a nd June 29, 2024 (in thousands): Three Months Ended June 28, 2025 June 29, 2024 Balance at beginning of period $ 16,201 $ 10,540 Net incurred losses during the period 11,103 17,963 Net claim payments during the period ( 14,186 ) ( 9,576 ) Balance at end of period $ 13,118 $ 18,927 14. Commitments and Contingencies 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 $ 133 million at June 28, 2025 and March 29, 2025, without reduction for the estimated resale value of the home s. In the three months ended June 28, 2025, we did not receive any demand notices. Our reserve for repurchase commitments, re corded in Accrued expenses and other current liabilities, was $ 3.2 million at June 28, 2025 and $ 3.3 million at March 29, 2025. Construction-Period Mortgages. Loan contracts with off-balance sheet commitments are summarized below (in thousands): June 28, 2025 March 29, 2025 Construction loan contract amount $ 10,368 $ 12,366 Cumulative advances ( 4,257 ) ( 4,210 ) $ 6,111 $ 8,156 Representations and Warranties of Mortgages Sold . The reserve for contingent repurchases and indemnification obliga tions was $ 0.5 million as of June 28, 2025 and $ 0.6 million as of March 29, 2025, 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 28, 2025 or June 29, 2024 . 11 Table of Contents Interest Rate Lock Commitments ("IRLCs") . As of June 28, 2025 and March 29, 2025, w e had outstanding IRLCs with a notional amount of $ 24.1 million and $ 16.3 million, respectively. For the three months ended June 28, 2025 and the three months ended June 29, 2024, we recognized insignificant non-cash gains on outstanding IRLCs. Forward Sales Commitments. As of June 28, 2025 and March 29, 2025, we had $ 18.7 million and $ 20.8 million in outstanding forward sales commitments for sales of mortgage backed securities and whole loan commitments (collectively, the "Commitments"), respectively. During the three months ended June 28, 2025, we recognized insignificant non-cash gains on Commitments. During the three months ended June 29, 2024, we recognized insignificant non-cash losses. Legal Matters. We are party to certain lawsuits in the ordinary course of business. Based on management's present knowledge of the facts and (in certain cases) advice of outside counsel, management does not believe that loss contingencies arising from pending matters are likely to have a material adverse effect on our consolidated financial position, liquidity or results of operations after taking into account any existing reserves, which reserves are included in Accrued expenses and other current liabilities on the Consolidated Balance Sheets. However, future events or circumstances that may currently be unknown to management will determine whether the resolution of pending or threatened litigation or claims will ultimately have a material effect on our consolidated financial position, liquidity or results of operations in any future reporting periods. 15. Stockholders' Equity The following tables represent changes in Stockholders' equity during the three months ended June 28, 2025 and June 29, 2024, respectively (dollars in thousands): Treasury stock Additional paid-in capital Retained earnings Accumulated other comprehensive income Total Common Stock Shares Amount Balance, March 29, 2025 9,436,732 $ 94 $ ( 424,624 ) $ 290,940 $ 1,198,163 $ 9 $ 1,064,582 Net income — — — — 51,642 — 51,642 Other comprehensive income, net — — — — — 96 96 Net issuance of common stock under stock incentive plans 16,631 1 — ( 4,682 ) — — ( 4,681 ) Stock-based compensation — — — 3,563 — — 3,563 Common stock repurchases — — ( 50,369 ) — — — ( 50,369 ) Balance, June 28, 2025 9,453,363 $ 95 $ ( 474,993 ) $ 289,821 $ 1,249,805 $ 105 $ 1,064,833 Treasury stock Additional paid-in capital Retained earnings Accumulated other comprehensive (loss) income Total Common Stock Shares Amount 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 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, June 29, 2024 9,401,057 $ 94 $ ( 303,897 ) $ 281,062 $ 1,061,556 $ ( 275 ) $ 1,038,540 12 Table of Contents 16. 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 June 28, 2025 June 29, 2024 Net income $ 51,642 $ 34,429 Weighted average shares outstanding Basic 7,953,720 8,286,476 Effect of dilutive securities 87,288 85,778 Diluted 8,041,008 8,372,254 Net income per share Basic $ 6.49 $ 4.15 Diluted $ 6.42 $ 4.11 Anti-dilutive common stock equivalents excluded 602 257 17. Fair Value Measurements The book value and estimated fair value of our financial instruments were as follows (in thousands): June 28, 2025 March 29, 2025 Book Value Estimated Fair Value Book Value Estimated Fair Value Available-for-sale debt securities $ 20,359 $ 20,359 $ 21,415 $ 21,415 Marketable equity securities 11,805 11,805 11,425 11,425 Non-marketable equity investments 5,019 5,019 5,069 5,069 Consumer loans receivable 57,947 59,672 56,537 59,365 Commercial loans receivable 107,602 98,675 99,746 89,216 Other secured financing ( 1,567 ) ( 1,555 ) ( 1,594 ) ( 1,569 ) See Note 20, Fair Value Measurements, and the Fair Value of Financial Instruments caption in Note 1, Summary of Significant Accounting Policies, in the Form 10-K for more information on the methodologies we use in determining fair value. Mortgage Servicing . Mortgage Servicing Rights ("MSRs") are recorded at fair value in Prepaid expenses and other current assets on the Consolidated Balance Sheets. June 28, 2025 March 29, 2025 Number of loans serviced with MSRs 3,595 3,647 Weighted average servicing fee (basis points) 34.45 34.74 Capitalized servicing multiple 176.69 % 179.97 % Capitalized servicing rate (basis points) 60.87 62.52 Serviced portfolio with MSRs (in thousands) $ 444,256 $ 451,080 MSRs (in thousands) $ 2,704 $ 2,820 13 Table of Contents 18. Business Segment Information We operate principally 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, and qualifies as other activity under the segment reporting guidance as it does not meet the quantitative thresholds to be reported separately. The factory-built housing segment generates revenue from building and selling manufactured and modular homes to both wholesale customers and end consumers through Company owned retail stores. The Financial services segment generates revenue through lending products for manufactured home purchasers, and through writing and holding insurance policies for manufactured homes. The Company's Chief Executive Officer is the chief operating decision maker ("CODM"). The CODM assesses segment performance and allocates resources, including reinvesting profits and making acquisitions, based on Gross p rofit and Income before income taxes. The CODM also uses these metrics in the budgeting process when determining how to allocate resources. The CODM is not provided asset information by reportable segment. The following tables provide selected financial data by segment (dollars in thousands): Three Months Ended June 28, 2025 Factory-built housing Financial services Consolidated Net revenue $ 535,694 $ 21,163 $ 556,857 Cost of sales 414,850 12,501 427,351 Gross profit 120,844 8,662 129,506 Selling, general and administrative expenses 63,154 5,994 69,148 Income from operations 57,690 2,668 60,358 Interest income 5,103 — 5,103 Interest expense ( 164 ) — ( 164 ) Income before income taxes 62,629 2,668 65,297 Income tax expense ( 13,128 ) ( 527 ) ( 13,655 ) Net Income $ 49,501 $ 2,141 $ 51,642 Three Months Ended June 28, 2025 Factory-built housing Financial services Consolidated Depreciation $ 4,735 $ 62 $ 4,797 Amortization $ 366 $ 6 $ 372 Capital expenditures $ 9,009 $ — $ 9,009 14 Table of Contents Three Months Ended June 29, 2024 Factory-built housing Financial services Consolidated Net revenue $ 458,048 $ 19,551 $ 477,599 Cost of sales 354,537 19,660 374,197 Gross profit 103,511 ( 109 ) 103,402 Selling, general and administrative expenses 59,720 5,131 64,851 Income from operations 43,791 ( 5,240 ) 38,551 Interest income 5,511 — 5,511 Interest expense ( 90 ) — ( 90 ) Other expense, net ( 111 ) — ( 111 ) Income before income taxes 49,101 ( 5,240 ) 43,861 Income tax expense ( 10,656 ) 1,224 ( 9,432 ) Net Income $ 38,445 $ ( 4,016 ) $ 34,429 Three Months Ended June 29, 2024 Factory-built housing Financial services Consolidated Depreciation $ 4,304 $ 65 $ 4,369 Amortization $ 386 $ 6 $ 392 Capital expenditures $ 4,852 $ 62 $ 4,914 June 28, 2025 March 29, 2025 Total assets: Factory-built housing $ 1,186,689 $ 1,191,216 Financial services 232,928 215,429 Consolidated $ 1,419,617 $ 1,406,645 19. Subsequent Events On July 4, 2025, the new tax law commonly referred to as the One Big Beautiful Bill Act was enacted. We are in the process of evaluating its impact on our Consolidated Financial Statements. On July 14, 2025, the Company entered into a definitive agreement to acquire American Homestar Corporation and its subsidiaries (collectively, "American Homestar"), a Houston-based company best known in the market as Oak Creek Homes. American Homestar operates two manufacturing facilities, nineteen retail locations, writes and sells a limited number of manufactured home loans and acts as an agent for third party insurers. Cavco will acquire American Homestar for $ 190 million in cash, subject to customary purchase price adjustments. The acquisition is intended to be funded entirely from the Company's cash on hand and is expected to close in the Company's third quarter of fiscal year 2026, subject to applicable regulatory approvals and the satisfaction of certain customary closing conditions. 15 Table of Contents