What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-10-31 compared with 2025-08-04 · 67 added, 30 removed, 152 unchanged (39% of the section changed)

37 unchanged sentences

Our insurance subsidiary, Standard Casualty Company, provides property and casualty insurance primarily to owners of manufactured homes.

We operate a total of 31 homebuilding production lines with domestic locations in Millersburg and Woodburn, Oregon;

As of September 27, 2025 we operate a total of 31 homebuilding production lines with domestic locations in Millersburg and Woodburn, Oregon;

Riverside, California;

17 unchanged sentences

Company and Industry Outlook

According to data reported by the Manufactured Housing Institute, industry home shipments for the calendar year through May 2025 were 44,927, an increase of 5.3% compared to 42,650 shipments in the same calendar period last year.

According to data reported by the Manufactured Housing Institute, industry home shipments for the calendar year through August 2025 were 70,757, an increase of 3.2% compared to 68,550 shipments in the same calendar period last year.

The manufactured h ousing industry offers solutions to the housing crisis with lower average price per square foot than a site-built home and the comparatively lower cost associated with manufactured home ownership, which remains competitive with rental housing.

24 unchanged sentences

These shortages may also result in extended order backlogs, delays in the delivery of homes and reduced gross margins from home sales.

Our backlog at June 28, 2025 was $200 million compared to $197 million at March 29, 2025, an increase of $3 million, and down $32 million compared to $232 million at June 29, 2024.

Our backlog at September 27, 2025 was $210 million compared to $197 million at March 29, 2025, an increase of $13 million, and down $66 million compared to $276 million at September 28, 2024.

While it is difficult to predict the future of housing demand, employee availability, supply chain and Company performance and operations, maintaining an appropriately sized and well-trained workforce is key to meeting demand.

3 unchanged sentences

Three Months Ended

($ in thousands, except revenue per home sold) June 28,

2025 June 29,

($ in thousands, except revenue per home sold) September 27,

2025 September 28,

Factory-built housing $ 535,117 $ 486,343 $ 48,774 10.0 %

6 unchanged sentences

Net factory-built housing revenue per home sold $ 103,344 $ 98,991 $ 4,353 4.4 %

Factory-built housing Net revenue increased for the three months ended June 28, 2025 due to higher home sales volume and an increase in Net revenue per home sold.

Six Months Ended

($ in thousands, except revenue per home sold) September 27,

2025 September 28,

Factory-built housing $ 1,070,811 $ 944,391 $ 126,420 13.4 %

Financial services 42,573 40,669 1,904 4.7 %

$ 1,113,384 $ 985,060 $ 128,324 13.0 %

Factory-built homes sold

by Company-owned retail sales centers 2,210 2,045 165 8.1 %

to independent retailers, builders, communities and developers 8,384 7,589 795 10.5 %

10,594 9,634 960 10.0 %

Net factory-built housing revenue per home sold $ 101,077 $ 98,027 $ 3,050 3.1 %

Factory-built housing Net revenue increased for the three and six months ended September 27, 2025 due to higher home sales volume and an increase in Net revenue per home sold.

Net factory-built housing revenue per home sold is a volatile metric dependent upon several factors.

4 unchanged sentences

Changes in the number of modules per home, the selection of different home types/models and optional home upgrades create changes in product mix, also causing fluctuations in this metric.

For the three months ended June 28, 2025, Financial services Net revenue increased primarily due to higher insurance premiums.

For the three and six months ended September 27, 2025, Financial services Net revenue increased primarily due to higher insurance premiums.

Three Months Ended

($ in thousands) June 28,

2025 June 29,

($ in thousands) September 27,

2025 September 28,

Factory-built housing $ 122,493 $ 111,520 $ 10,973 9.8 %

Financial services 8,661 (108) 8,769 NM

Financial services 11,914 4,602 7,312 158.9 %

$ 134,407 $ 116,122 $ 18,285 15.7 %

3 unchanged sentences

Financial services 55.6 % 21.8 % N/A 33.8 %

Factory-built housing Gross profit for the three months ended June 28, 2025 increased due to higher sales volume.

Gross profit as a percentage of Net revenue for the three months was flat as increased Net revenue per home sold was offset by increased input costs driven largely by increased material costs.

Financial services Gross profit in dollars and as a percentage of Financial services Net revenue for the three months increased due to higher insurance premiums, lower claim losses and reduced costs from improved underwriting guidelines.

Six Months Ended

($ in thousands) September 27,

2025 September 28,

Factory-built housing $ 243,338 $ 215,030 $ 28,308 13.2 %

Financial services 20,575 4,494 16,081 357.8 %

$ 263,913 $ 219,524 $ 44,389 20.2 %

Gross profit as % of Net revenue

Consolidated 23.7 % 22.3 % N/A 1.4 %

Factory-built housing 22.7 % 22.8 % N/A (0.1) %

Financial services 48.3 % 11.1 % N/A 37.2 %

Factory-built housing Gross profit and Gross profit as a percentage of Net revenue for the three and six months ended September 27, 2025 increased due to higher sales volume and an increase in Net revenue per home sold.

Financial services Gross profit in dollars and as a percentage of Financial services Net revenue for the three and six months ended September 27, 2025 increased due to higher insurance premiums and lower claim losses.

The claim loss reduction resulted from policy underwriting improvements and severe weather events in the prior year periods.

Selling, General and Administrative Expenses

Three Months Ended

($ in thousands) June 28,

2025 June 29,

($ in thousands) September 27,

2025 September 28,

Factory-built housing $ 65,757 $ 61,440 $ 4,317 7.0 %

2 unchanged sentences

Selling, general and administrative expenses as % of Net revenue 13.0 % 13.2 % N/A (0.2) %

Factory-built housing Selling, general and administrative expenses increased for the three months ended June 28, 2025 as a result of variable compensation driven by higher incentive compensation due to higher earnings compared to the prior year period.

Financial services Selling, general and administrative expenses for the three months increased primarily due to increases in compensation year over year.

Six Months Ended

($ in thousands) September 27,

2025 September 28,

Factory-built housing $ 128,911 $ 121,160 $ 7,751 6.4 %

Financial services 12,466 10,688 1,778 16.6 %

$ 141,377 $ 131,848 $ 9,529 7.2 %

Selling, general and administrative expenses as % of Net revenue 12.7 % 13.4 % N/A (0.7) %

Factory-built housing Selling, general and administrative expenses increased for the three and six months ended September 27, 2025 as a result of variable compensation driven by higher incentive compensation due to higher earnings compared to the prior year periods.

Financial services Selling, general and administrative expenses for the three and six months ended September 27, 2025 increased primarily due to increases in compensation year over year.

Other Components of Net Income

Three Months Ended

($ in thousands) June 28,

2025 June 29,

($ in thousands) September 27,

2025 September 28,

Interest income $ 5,046 $ 5,692 $ (646) (11.3) %

Interest expense (112) (125) (13) (10.4) %

Other expense, net — (111) 111 100.0 %

Other income, net 142 258 (116) 45.0 %

Income tax expense (14,873) (11,135) 3,738 33.6 %

Effective tax rate 22.1 % 20.3 % N/A 1.8 %

Six Months Ended

($ in thousands) September 27,

2025 September 28,

Interest income $ 10,149 $ 11,203 $ (1,054) (9.4) %

Interest expense (276) (215) 61 28.4 %

Other income, net 142 147 (5) 3.4 %

Income tax expense (28,528) (20,567) 7,961 38.7 %

Effective tax rate 21.5 % 20.8 % N/A 0.7 %

Interest income consists primarily of interest earned on cash balances held in money market accounts, and interest earned on commercial floorplan lending.

Interest expense consists primarily of interest related to finance leases.

Other (expense), net primarily consists of realized and unrealized gains and losses on corporate investments and gains and losses from the sale of property, plant and equipment.

Other income, net primarily consists of realized and unrealized gains and losses on corporate investments and gains and losses from the sale of property, plant and equipment.

Income tax expense increased compared to the prior year period due to higher profit before income taxes.

Liquidity and Capital Resources

We believe that cash and cash equivalents at June 28, 2025, together with cash flow from operations, will be sufficient to fund our operations, cover our obligations, provide for our planned acquisition of American Homestar and provide for growth for the next 12 months and into the foreseeable future.

We believe that cash and cash equivalents at September 27, 2025, together with cash flow from operations, will be sufficient to fund our operations, cover our obligations, provide for our planned acquisition of American Homestar and provide for growth for the next 12 months and into the foreseeable future.

We maintain cash in U.S.

11 unchanged sentences

We believe that stockholders' equity at the insurance subsidiary remains sufficient and do not believe that the ability to pay ordinary dividends to Cavco at anticipated levels will be restricted per state regulations.

The following is a summary of the Company's cash flows for the three months ended June 28, 2025 and June 29, 2024, respectively:

Three Months Ended

(in thousands) June 28,

2025 June 29,

The following is a summary of the Company's cash flows for the six months ended September 27, 2025 and September 28, 2024, respectively:

Six Months Ended

(in thousands) September 27,

2025 September 28,

2024 $ Change

4 unchanged sentences

Cash, cash equivalents and restricted cash at end of the period $ 399,954 $ 386,217 $ 13,737

Net cash provided by operating activities increased primarily from higher Net income, partially offset by changes in Accounts receivable and Inventory due to increased working capital needs on higher revenue and reduced cash provided by Accounts payable, accrued expenses and other liabilities compared to the prior year due largely to lower insurance loss reserves in the current period.

Consumer loan originations decreased $5.6 million to $15.2 million for the three months ended June 28, 2025 from $20.8 million for the three months ended June 29, 2024, and proceeds from consumer loans decreased 0.7 million to $13.8 million for the three months ended June 28, 2025 from $14.5 million for the three months ended June 29, 2024.

Commercial loan originations increased $15.6 million to $42.4 million for the three months ended June 28, 2025 from $26.8 million for the three months ended June 29, 2024.

Net cash provided by operating activities increased primarily from higher Net income, a decrease in Consumer loans originated compared to the prior year period and a decrease in Prepaid expenses and other current assets.

The increase was partially offset by an increase in Commercial loans originated.

Consumer loan originations decreased $10.1 million to $29.8 million for the six months ended September 27, 2025 from $39.9 million for the six months ended September 28, 2024, and proceeds from consumer loans decreased $0.1 million to $33.9 million for the six months ended September 27, 2025 from $34.0 million for the six months ended September 28, 2024.

Commercial loan originations increased $28.5 million to $83.2 million for the six months ended September 27, 2025 from $54.7 million for the six months ended September 28, 2024.

Proceeds from the collection on commercial loans provided $75.4 million this year, compared to $55.1 million in the prior year, a net increase of $20.3 million.

4 unchanged sentences

Critical Accounting Estimates

There have been no significant changes to our critical accounting estimates during the three months ended June 28, 2025, as compared to those disclosed in Part II, Item 7 of the Form 10-K, under the heading "Critical Accounting Estimates," which provides a discussion of the critical accounting estimates that management believes are critical to the Company's operating results or may affect significant judgments and estimates used in the preparation of the Company's Consolidated Financial Statements.

There have been no significant changes to our critical accounting estimates during the six months ended September 27, 2025, as compared to those disclosed in Part II, Item 7 of the Form 10-K, under the heading "Critical Accounting Estimates," which provides a discussion of the critical accounting estimates that management believes are critical to the Company's operating results or may affect significant judgments and estimates used in the preparation of the Company's Consolidated Financial Statements.

Quantitative and Qualitative Disclosures About Market Risk

1 unchanged sentence

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 2. Management’s Discussion and Analysis