CAVCO INDUSTRIES, INC. 10-Q

Item 1. Financial Statements CAVCO INDUSTRIES, INC. CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except per share amounts) September 27, 2025 March 29, 2025 ASSETS (Unaudited) Current assets Cash and cash equivalents $ 374,978 $ 356,225 Restricted cash, current 24,391 18,535 Accounts receivable, net 115,654 105,849 Short-term investments 16,865 19,842 Current portion of consumer loans receivable, net 33,493 35,852 Current portion of commercial loans receivable, net 43,468 43,492 Current portion of commercial loans receivable from affiliates, net 2,227 2,881 Inventories 258,423 252,695 Prepaid expenses and other current assets 65,048 74,815 Total current assets 934,547 910,186 Restricted cash 585 585 Investments 24,341 18,067 Consumer loans receivable, net 19,390 20,685 Commercial loans receivable, net 56,458 48,605 Commercial loans receivable from affiliates, net 5,292 4,768 Property, plant and equipment, net 236,709 227,620 Goodwill 121,969 121,969 Other intangibles, net 15,987 16,731 Operating lease right-of-use assets 33,791 35,576 Deferred income taxes — 1,853 Total assets $ 1,449,069 $ 1,406,645 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 44,075 $ 37,195 Accrued expenses and other current liabilities 273,975 265,971 Total current liabilities 318,050 303,166 Operating lease liabilities 30,360 31,538 Other liabilities 7,258 7,359 Deferred income taxes 7,264 — Total liabilities 362,932 342,063 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 9,470,820 and 9,436,732 shares, respectively; Outstanding 7,866,737 and 8,008,012 shares, respectively 95 94 Treasury stock, at cost; 1,604,083 and 1,428,720 shares, respectively ( 511,347 ) ( 424,624 ) Additional paid-in capital 294,984 290,940 Retained earnings 1,302,186 1,198,163 Accumulated other comprehensive income 219 9 Total stockholders' equity 1,086,137 1,064,582 Total liabilities and stockholders' equity $ 1,449,069 $ 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 Six Months Ended September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 Net revenue $ 556,527 $ 507,461 $ 1,113,384 $ 985,060 Cost of sales 422,120 391,339 849,471 765,536 Gross profit 134,407 116,122 263,913 219,524 Selling, general and administrative expenses 72,229 66,997 141,377 131,848 Income from operations 62,178 49,125 122,536 87,676 Interest income 5,046 5,692 10,149 11,203 Interest expense ( 112 ) ( 125 ) ( 276 ) ( 215 ) Other income, net 142 258 142 147 Income before income taxes 67,254 54,950 132,551 98,811 Income tax expense ( 14,873 ) ( 11,135 ) ( 28,528 ) ( 20,567 ) Net income $ 52,381 $ 43,815 $ 104,023 $ 78,244 Comprehensive income Net income $ 52,381 $ 43,815 $ 104,023 $ 78,244 Reclassification adjustment for securities sold 136 262 253 271 Applicable income tax expense ( 29 ) ( 55 ) ( 53 ) ( 57 ) Net change in unrealized position of investments held 8 ( 11 ) 12 54 Applicable income tax (expense) benefit ( 1 ) 3 ( 2 ) ( 11 ) Comprehensive income $ 52,495 $ 44,014 $ 104,233 $ 78,501 Net income per share Basic $ 6.62 $ 5.33 $ 13.12 $ 9.48 Diluted $ 6.55 $ 5.28 $ 12.96 $ 9.38 Weighted average shares outstanding Basic 7,909,326 8,226,298 7,931,589 8,256,664 Diluted 7,992,745 8,305,326 8,024,720 8,337,671 See accompanying Notes to Consolidated Financial Statements 2 Table of Contents CAVCO INDUSTRIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (Unaudited) Six Months Ended September 27, 2025 September 28, 2024 OPERATING ACTIVITIES Net income $ 104,023 $ 78,244 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 10,502 9,520 Provision for credit losses ( 64 ) ( 260 ) Deferred income taxes 9,071 88 Stock-based compensation expense 7,093 4,907 Non-cash interest income, net ( 457 ) ( 527 ) Loss (gain) on sale or retirement of property, plant and equipment, net ( 15 ) 26 Gain on investments and sale of loans, net ( 2,551 ) ( 1,694 ) Changes in operating assets and liabilities, net of acquisitions Accounts receivable ( 9,783 ) ( 17,261 ) Consumer loans receivable originated ( 29,807 ) ( 39,914 ) Proceeds received on consumer loans receivable 33,922 34,045 Inventories ( 5,728 ) ( 2,686 ) Prepaid expenses and other current assets 10,463 1,017 Commercial loans receivable originated ( 83,163 ) ( 54,724 ) Principal payments received on commercial loans receivable 75,438 55,147 Accounts payable, accrued expenses and other liabilities 15,050 36,146 Net cash provided by operating activities 133,994 102,074 INVESTING ACTIVITIES Purchases of property, plant and equipment ( 18,870 ) ( 9,854 ) Proceeds from sale of property, plant and equipment 38 127 Purchases of investments ( 15,590 ) ( 12,433 ) Proceeds from sale of investments 14,273 11,131 Net cash used in investing activities ( 20,149 ) ( 11,029 ) FINANCING ACTIVITIES Payments for taxes on stock option exercises and releases of equity awards ( 4,932 ) ( 2,921 ) Proceeds from exercise of stock options 1,884 1,793 Payments on finance leases and other secured financings ( 102 ) ( 177 ) Payments for common stock repurchases ( 86,086 ) ( 72,276 ) Net cash used in financing activities ( 89,236 ) ( 73,581 ) Net (decrease) increase in cash, cash equivalents and restricted cash 24,609 17,464 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 $ 399,954 $ 386,217 Supplemental disclosures of cash flow information Cash paid for income taxes $ 15,192 $ 18,825 Cash paid for interest $ 137 $ 30 Supplemental disclosures of noncash activity Change in GNMA loans eligible for repurchase $ ( 212 ) $ 496 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 31st 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 31st. 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 Six Months Ended September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 Factory-built housing Home sales $ 509,750 $ 469,676 $ 1,019,486 $ 906,105 Delivery, setup and other revenues 25,367 16,667 51,325 38,286 535,117 486,343 1,070,811 944,391 Financial services Insurance agency commissions received from third-party insurance companies 1,514 1,268 2,924 2,674 All other sources 19,896 19,850 39,649 37,995 21,410 21,118 42,573 40,669 $ 556,527 $ 507,461 $ 1,113,384 $ 985,060 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): September 27, 2025 September 28, 2024 Cash and cash equivalents $ 374,978 $ 364,113 Restricted cash, current 24,391 21,519 Restricted cash 585 585 $ 399,954 $ 386,217 5 Table of Contents 5. Investments Investments consisted of the following (in thousands): September 27, 2025 March 29, 2025 Available-for-sale debt securities $ 23,197 $ 21,415 Marketable equity securities 12,859 11,425 Non-marketable equity investments 5,150 5,069 41,206 37,909 Less short-term investments ( 16,865 ) ( 19,842 ) $ 24,341 $ 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): September 27, 2025 March 29, 2025 Amortized Cost Fair Value Amortized Cost Fair Value Residential mortgage-backed securities $ 8,753 $ 8,836 $ 4,122 $ 4,120 State and political subdivision debt securities 6,193 6,314 6,955 6,976 Corporate debt securities 7,974 8,047 10,326 10,319 $ 22,920 $ 23,197 $ 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. September 27, 2025 Amortized Cost Fair Value Due in less than one year $ 3,649 $ 3,640 Due after one year through five years 6,355 6,471 Due after five years through ten years 1,541 1,567 Due after ten years 2,622 2,683 Mortgage-backed securities 8,753 8,836 $ 22,920 $ 23,197 Net investment gains and losses on marketable equity securities were as follows (in thousands): Three Months Ended Six Months Ended September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 Marketable equity securities Net gain recognized during the period $ 993 $ 514 $ 1,592 $ 60 Less: Net (gain) loss recognized on securities sold during the period ( 47 ) 88 9 ( 464 ) Unrealized gain (loss) recognized during the period on securities still held $ 946 $ 602 $ 1,601 $ ( 404 ) 6 Table of Contents 6. Inventories Inventories consisted of the following (in thousands): September 27, 2025 March 29, 2025 Raw materials $ 77,535 $ 79,098 Work in process 34,349 29,808 Finished goods 146,539 143,789 $ 258,423 $ 252,695 7. Consumer Loans Receivable The following table summarizes consumer loans receivable (in thousands): September 27, 2025 March 29, 2025 Loans held for investment, previously securitized $ 12,168 $ 13,775 Loans held for investment 12,048 12,196 Loans held for sale 25,086 27,981 Construction advances 5,126 4,210 54,428 58,162 Deferred financing fees and other, net ( 675 ) ( 686 ) Allowance for loan losses ( 870 ) ( 939 ) 52,883 56,537 Less current portion ( 33,493 ) ( 35,852 ) $ 19,390 $ 20,685 The consumer loans held for investment had the following characteristics: September 27, 2025 March 29, 2025 Weighted average contractual interest rate 7.8 % 7.9 % Weighted average effective interest rate 8.3 % 10.3 % Weighted average months to maturity 222 221 The following table is a consolidated summary of the delinquency status of the outstanding principal balance of consumer loans receivable (in thousands): September 27, 2025 March 29, 2025 Current $ 52,812 $ 56,401 31 to 60 days 167 1,082 61 to 90 days 190 4 91+ days 1,259 675 $ 54,428 $ 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): September 27, 2025 2026 2025 2024 2023 2022 Prior Total Prime- FICO score 680 and greater $ 12,512 $ 7,954 $ 4,676 $ 320 $ 90 $ 13,125 $ 38,677 Near Prime- FICO score 620-679 2,372 1,918 622 — — 9,230 14,142 Sub-Prime- FICO score less than 620 — 320 — — — 598 918 No FICO score 172 65 202 — — 252 691 $ 15,056 $ 10,257 $ 5,500 $ 320 $ 90 $ 23,205 $ 54,428 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 September 27, 2025, 47 % of the outstanding principal balance of the consumer loans receivable portfolio was concentrated in Texas and 15 % was concentrated in Florida. 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 September 27, 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): September 27, 2025 March 29, 2025 Loans receivable (including from affiliates) $ 108,038 $ 100,297 Allowance for loan losses ( 387 ) ( 361 ) Deferred financing fees, net ( 206 ) ( 190 ) 107,445 99,746 Less current portion of commercial loans receivable (including from affiliates), net ( 45,695 ) ( 46,373 ) $ 61,750 $ 53,373 The commercial loans receivable balance had the following characteristics: September 27, 2025 March 29, 2025 Weighted average contractual interest rate 7.7 % 8.3 % Weighted average months outstanding 9 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 September 27, 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): September 27, 2025 2026 2025 2024 2023 2022 Prior Total Performing $ 55,071 $ 34,448 $ 15,641 $ 2,201 $ 392 $ 285 $ 108,038 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 September 27, 2025, our outstanding commercial loans receivable principal balance was concentrated primarily in California ( 14 %), New York ( 14 %), Arizona ( 14 %), and North Carolina ( 11 %). As of March 29, 2025, concentrations were 16 % in California and 17 % in New York. We had concentrations with one independent third-party and its affiliates that equaled 11 % and 10 % of the net commercial loans receivable principal balance outstanding, all of which was secured, as of September 27, 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): September 27, 2025 March 29, 2025 Salaries, wages and benefits $ 49,184 $ 45,640 Customer deposits 46,449 46,934 Estimated warranties 35,577 33,189 Unearned insurance premiums 34,010 33,863 Accrued volume rebates 29,194 21,208 Accrued insurance 12,689 13,094 Insurance loss reserves 10,260 16,201 Other 56,612 55,842 $ 273,975 $ 265,971 10. Warranties Activity in the liability for estimated warranties was as follows (in thousands): Three Months Ended Six Months Ended September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 Balance at beginning of period $ 34,383 $ 31,815 $ 33,189 $ 31,718 Charged to costs and expenses 17,023 13,990 33,648 26,081 Payments and deductions ( 15,829 ) ( 12,724 ) ( 31,260 ) ( 24,718 ) Balance at end of period $ 35,577 $ 33,081 $ 35,577 $ 33,081 9 Table of Contents 11. Other Liabilities The following table summarizes secured financings and other obligations (in thousands): September 27, 2025 March 29, 2025 Finance lease liabilities $ 6,045 $ 6,086 Other secured financing 1,535 1,594 7,580 7,680 Less current portion included in Accrued expenses and other current liabilities ( 322 ) ( 321 ) $ 7,258 $ 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 September 27, 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 September 27, 2025 September 28, 2024 Written Earned Written Earned Direct premiums $ 9,292 $ 11,184 $ 9,380 $ 12,177 Assumed premiums—nonaffiliated 11,716 10,963 11,303 10,095 Ceded premiums—nonaffiliated ( 7,654 ) ( 7,654 ) ( 8,880 ) ( 8,880 ) $ 13,354 $ 14,493 $ 11,803 $ 13,392 Six Months Ended September 27, 2025 September 28, 2024 Written Earned Written Earned Direct premiums $ 21,443 $ 22,716 $ 22,883 $ 24,479 Assumed premiums—nonaffiliated 23,198 21,833 23,038 19,599 Ceded premiums—nonaffiliated ( 15,364 ) ( 15,364 ) ( 17,065 ) ( 17,065 ) $ 29,277 $ 29,185 $ 28,856 $ 27,013 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 and six months ended September 27, 2025 a nd September 28, 2024 (in thousands): Three Months Ended Six Months Ended September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 Balance at beginning of period $ 13,118 $ 18,927 $ 16,201 $ 10,540 Net incurred losses during the period 7,782 14,128 18,885 32,091 Net claim payments during the period ( 10,640 ) ( 18,435 ) ( 24,826 ) ( 28,011 ) Balance at end of period $ 10,260 $ 14,620 $ 10,260 $ 14,620 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 $ 137 million and $ 133 million at September 27, 2025 and March 29, 2025, respectively, without reduction for the estimated resale value of the home s. During the three and six months ended September 27, 2025, we received a demand notice for one home. The inventory was obtained and resold. Our reserve for repurchase commitments, re corded in Accrued expenses and other current liabilities, was $ 3.3 million at September 27, 2025 and March 29, 2025. Construction-Period Mortgages. Loan contracts with off-balance sheet commitments are summarized below (in thousands): 11 Table of Contents September 27, 2025 March 29, 2025 Construction loan contract amount $ 10,459 $ 12,366 Cumulative advances ( 5,126 ) ( 4,210 ) $ 5,333 $ 8,156 Representations and Warranties of Mortgages Sold . The reserve for contingent repurchases and indemnification obliga tions was $ 0.6 million as of September 27, 2025 and 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 six months ended September 27, 2025 or September 28, 2024 . Interest Rate Lock Commitments ("IRLCs") . As of September 27, 2025 and March 29, 2025, w e had outstanding IRLCs with a notional amount of $ 25.2 million and $ 16.3 million, respectively. For the three and six months ended September 27, 2025, and September 28, 2024, we recognized insignificant non-cash gains on outstanding IRLCs. Forward Sales Commitments. As of September 27, 2025 and March 29, 2025, we had $ 14.4 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 and six months ended September 27, 2025, we recognized insignificant non-cash gains on Commitments. During the three and six months ended September 28, 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 six months ended September 27, 2025 and September 28, 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 Net income — — — — 52,381 — 52,381 Other comprehensive income, net — — — — — 114 114 Net issuance of common stock under stock incentive plans 17,457 — — 1,633 — — 1,633 Stock-based compensation — — — 3,530 — — 3,530 Common stock repurchases — — ( 36,354 ) — — — ( 36,354 ) Balance, September 27, 2025 9,470,820 $ 95 $ ( 511,347 ) $ 294,984 $ 1,302,186 $ 219 $ 1,086,137 12 Table of Contents 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 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 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 Six Months Ended September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 Net income $ 52,381 $ 43,815 $ 104,023 $ 78,244 Weighted average shares outstanding Basic 7,909,326 8,226,298 7,931,589 8,256,664 Effect of dilutive securities 83,419 79,028 93,131 81,007 Diluted 7,992,745 8,305,326 8,024,720 8,337,671 Net income per share Basic $ 6.62 $ 5.33 $ 13.12 $ 9.48 Diluted $ 6.55 $ 5.28 $ 12.96 $ 9.38 Anti-dilutive common stock equivalents excluded — 257 264 428 13 Table of Contents 17. Fair Value Measurements The book value and estimated fair value of our financial instruments were as follows (in thousands): September 27, 2025 March 29, 2025 Book Value Estimated Fair Value Book Value Estimated Fair Value Available-for-sale debt securities $ 23,197 $ 23,197 $ 21,415 $ 21,415 Marketable equity securities 12,859 12,859 11,425 11,425 Non-marketable equity investments 5,150 5,150 5,069 5,069 Consumer loans receivable 52,883 54,402 56,537 59,365 Commercial loans receivable 107,445 97,352 99,746 89,216 Other secured financing ( 1,535 ) ( 1,534 ) ( 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. September 27, 2025 March 29, 2025 Number of loans serviced with MSRs 3,550 3,647 Weighted average servicing fee (basis points) 34.25 34.74 Capitalized servicing multiple 170.69 % 179.97 % Capitalized servicing rate (basis points) 58.46 62.52 Serviced portfolio with MSRs (in thousands) $ 438,870 $ 451,080 MSRs (in thousands) $ 2,566 $ 2,820 14 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 September 27, 2025 Factory-built housing Financial services Consolidated Net revenue $ 535,117 $ 21,410 $ 556,527 Cost of sales 412,623 9,497 422,120 Gross profit 122,494 11,913 134,407 Selling, general and administrative expenses 65,757 6,472 72,229 Income from operations 56,737 5,441 62,178 Interest income 5,046 — 5,046 Interest expense ( 112 ) — ( 112 ) Other income, net 142 — 142 Income before income taxes 61,813 5,441 67,254 Income tax expense ( 13,661 ) ( 1,212 ) ( 14,873 ) Net income $ 48,152 $ 4,229 $ 52,381 Six Months Ended September 27, 2025 Factory-built housing Financial services Consolidated Net revenue $ 1,070,811 $ 42,573 $ 1,113,384 Cost of sales 827,473 21,998 849,471 Gross profit 243,338 20,575 263,913 Selling, general and administrative expenses 128,911 12,466 141,377 Income from operations 114,427 8,109 122,536 Interest income 10,149 — 10,149 Interest expense ( 276 ) — ( 276 ) Other income, net 142 — 142 Income before income taxes 124,442 8,109 132,551 Income tax expense ( 26,789 ) ( 1,739 ) ( 28,528 ) Net income $ 97,653 $ 6,370 $ 104,023 15 Table of Contents Three Months Ended September 27, 2025 Factory-built housing Financial services Consolidated Depreciation $ 4,898 $ 63 $ 4,961 Amortization $ 366 $ 6 $ 372 Capital expenditures $ 9,861 $ — $ 9,861 Six Months Ended September 27, 2025 Factory-built housing Financial services Consolidated Depreciation $ 9,633 $ 125 $ 9,758 Amortization $ 732 $ 12 $ 744 Capital expenditures $ 18,870 $ — $ 18,870 16 Table of Contents Three Months Ended September 28, 2024 Factory-built housing Financial services Consolidated Net revenue $ 486,343 $ 21,118 $ 507,461 Cost of sales 374,823 16,516 391,339 Gross profit 111,520 4,602 116,122 Selling, general and administrative expenses 61,440 5,557 66,997 Income (loss) from operations 50,080 ( 955 ) 49,125 Interest income 5,692 — 5,692 Interest expense ( 125 ) — ( 125 ) Other income, net 258 — 258 Income (loss) before income taxes 55,905 ( 955 ) 54,950 Income tax expense ( 11,099 ) ( 36 ) ( 11,135 ) Net income (loss) $ 44,806 $ ( 991 ) $ 43,815 Six Months Ended September 28, 2024 Factory-built housing Financial services Consolidated Net revenue $ 944,391 $ 40,669 $ 985,060 Cost of sales 729,361 36,175 765,536 Gross profit 215,030 4,494 219,524 Selling, general and administrative expenses 121,160 10,688 131,848 Income (loss) from operations 93,870 ( 6,194 ) 87,676 Interest income 11,203 — 11,203 Interest expense ( 215 ) — ( 215 ) Other income, net 147 — 147 Income (loss) before income taxes 105,005 ( 6,194 ) 98,811 Income tax (expense) benefit ( 21,755 ) 1,188 ( 20,567 ) Net income (loss) $ 83,250 $ ( 5,006 ) $ 78,244 Three Months Ended September 28, 2024 Factory-built housing Financial services Consolidated Depreciation $ 4,312 $ 63 $ 4,375 Amortization $ 378 $ 7 $ 385 Capital expenditures $ 4,878 $ 27 $ 4,905 Six Months Ended September 28, 2024 Factory-built housing Financial services Consolidated Depreciation $ 8,616 $ 128 $ 8,744 Amortization $ 764 $ 13 $ 777 Capital expenditures $ 9,729 $ 90 $ 9,819 17 Table of Contents September 27, 2025 March 29, 2025 Total assets: Factory-built housing $ 1,210,524 $ 1,191,216 Financial services 238,545 215,429 Consolidated $ 1,449,069 $ 1,406,645 19. Subsequent Events As announced on September 30, 2025 in a current report on Form 8-K, we completed the acquisition of American Homestar Corporation and other related entities (collectively "American Homestar"), including their two manufacturing facilities, nineteen retail locations and financial service operations. The addition of American Homestar to our existing manufacturing and retail system strengthens our position in the South Central U.S.. The purchase price totaled $ 190 million, before certain customary adjustments, and was funded with cash on hand. 18 Table of Contents