Cavco Industries (CVCO) 4 Nov 222023 Q2 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Second Quarter Fiscal Year 2023 Cavco Industries Earnings Call Webcast. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Mark Fusler, Corporate Controller and Investor Relations. Please go ahead.

you Year us XXXX thank Second Cavco and Fiscal Quarter Earnings day, for for joining Industry's Good Conference Call.

you'll Officer; Vice call, and Chief Accounting Officer; this be Bill Bigbee, from During Boor, and Chief Paul Executive and Allison President Executive Officer. Aden, Chief Financial hearing President

volatility oral, required no or as call, except to written revise conference day accurate Friday, any by filings the materially performance, the these financial expectations management Cavco's conference reflect information of undertakes current actual differ and the earnings Exchange and also market Commission, I we uncertainties, forward-looking future statements, date from may any in materially the savings, XX-K law. in revenues, Before XXXX. forms, circumstances that those of made specific results Securities with conditions. risks described those statements, affect to could after which we'd whether and Cavco or this obligation that statements cause flow this during Cavco's is November those including cost to like made actual and or Cavco. or begin, only expressed This involve this limitation, markets of identify recent the most statements events of differ assumptions or or events as that on XX-Q may contain company's Cavco's which behalf about credit live results forward-looking factors encourage X, conference of broadcast forward-looking and operational you statements cash forward-looking including cause to time-sensitive use, All by share, remind statements. from in without comments call the to results per or or future by update you or efficiencies, call review contains could to forward-looking operational actual

Officer. Bill Chief Bill? over President to I'd Boor, call Executive like turn the and to Now

and retail and job for start today our us a of did Hurricane Damage and preparing the areas all to locations relief and review to responding results we manufacturing team the shifted want you to Welcome, was impacted by close who Most the the employees to were the that thank impressive to off that minimal, quarter and our were storm. second our their to the providing then Ian I entire following areas the by to supplies hit safe. great saying way for they more heavily attention was were situation. joining XXXX. fortunate

severely so such who Our the compared to as in lumber managing Revenues $XXX to reduced changing margin flowed grew of along the points XXX another And to prices year-over-year over with higher XX% million. P&L. through our businesses go turn out a and go affected, to results. another thoughts are help meaningful no to outstanding folks doing let's been transition Teams There's across have ways. others here, thanks average net up quarter, from a Gross in out by out impact housing were but doubled job easy impressively selling the to rose quarter who to income occasion those nearly more factory-built with our in a reached primarily attention and basis second and to our driven our great lesser costs price, market. OSB $XX million.

and quarters. established recent have level of throughput in plants they the at efficiency manufacturing Our continued higher

XX%. reported capacity As was in utilization release, our

declining in historically industry one rapidly consumer Ian taken rates, period days from potential However, we and interest XX%. rates with to is days. and transition to approximately high calculate this quarter at a consistent order Hurricane match using lost utilization operating remained with to for downtime increasing with Adjusted The all clearly confidence. some orders last

retailers retail process rates. rate, online evidenced higher their While by started to months. interest as the leads dropped their months Buyer ago several continuing healthy turn the at manage traffic, have plants remains and in recent producing a and are inventories are which off not quotes

inflation interest made prospective and, frankly, rates, have more and lead buyers shorter more cautious. home patient times However,

cancellations So wholesale backlog. down, orders resulting net in of are declining the

Our $XXX down weeks million, XX% backlog current to at equating XX sequentially production to is to approximately XX levels.

near While demand. near-term ongoing all reasons inventory the challenges term we're is I've touched The clouded in about long-term on. a industry of up clear picture and is by mid- retail adjustments, demand set confident very cyclical and the for

Continuing need we and is focused allocation on homes with and We're and undeniable. the Carolina to in stay has state-of-the-art, focus last the the new Glendale, future, investing Park strategy plants. Mexico, financial are of to dynamics. and HUD-code for that will important, we facilities surrounding reached Arizona products high-quality to Homes, regard, is manufacturer sold cultures the our systems our producing agreement work our near-term and model retailer Model commenced focused week equally However, in a Texas, North production workplace. while New be and Both acquire on employees both they're Hamlet, theme we starting manage continue of growth flexibility Solitaire capital states. at our for on the fortunate production, as have strong In the Oklahoma, homes. both

value join retail X The fill very across respect team quality to X improve significantly stores addition chose and and in and plant we're for addition manufacturing the offerings as our out lines our capacity adds of Solitaire's homes. have combined appreciative provide we lot company. and they the their operations stores Their Hogstad capacity. And XX% locations roughly product what creates his of production of a Pete built will XX at complement and to to Cavco. retail that Solitaire, our system, have We

this near-term about As we expect greatest understand previously reported, the to I interest today the quarter. recognize is fourth in close to we trying transaction demand. early fiscal

this bigger how itself from housing environment. However, segment home the market is story building the manufactured differentiating is broader in

growth plans. become new high as are other market. builders demand, people we're high better not an XXs. we're for finding for that solution increased housing. sales strong. home, a to impacts share unable factory-built indicative manufactured more XX% the how homes community than is teens the homes, affordable solution adjusting a when in this look homes, XX the a past. interest we less anything taking at price, What considered In needed low a subject and of know a at to continuing families demand home retailers to certainly drivers because inflation, they're for that Similarly, share rates, a home homes with starter of attractive the months very recent to for had around able housing near-term is housing they the are might inventories, prices and ready families is The years. affordable time to hit Notably, has purchase is in in have industry the our the units shipments the demand unique communities have are At manufactured options. and build-to-rent a last been This provide their are approaching of of significantly so, general that or higher housing them. manufactured site X many is cycle weather same with also need of operator to buffer been While and time that have higher Rental option can

are the near-term which clearly downward and rates Just interest rate prices share price are community monthly on so growth market less pressure to points the to by is manufactured This aggressive payment impact is plans a gains can't housing high, reiterate, site anymore, builders demand. for recent simply at and offset hit changes. sensitive

worsened. that, demand discuss turn long-term undersupply is that over extreme in only it like of to been Our financial for speaking based recently to to years, strong and about on Allison housing confidence I'd to we've more results detail. lower-cost mid- in the the several has With

or Thank million, period you, year The increase. million $XXX.X during to for $XXX.X million Commodore million acquisition fiscal Net $XXX.X XX.X% the the this was prior quarter. compared contributed $XXX.X second Bill. of revenue Homes up

million, quarter. average pricing was was in in prior a increases. due was This or million, to per and in factory-built $XXX.X revenue increase a home increase sold by home Within homes increase up net sold. average XX.X% revenue per million driven to $XXX.X number segment, housing revenue the sold of XX.X%, second product the the The year in $XXX.X XX.X% compared increase

was As factory mentioned, Bill than QX lost market the utilization downtime. due quarter. lower was XXXX to to utilization some days XXXX QX approximately and XX% during scheduled Ian Hurricane

simplification, in decrease revenue of million sales Financial gross and acquired Gross to services of volume, year. in with This increase incentive consumer higher $XX.X amortize revenue due factory-built XX.X%, by during credit was in the due Our events housing solid Commodore, driven number Consolidated QX on to This energy of expenses decreased insurance wages extended QX the million as portfolio primarily which XXX The the housing driven same or prices production in million fiscal equity to SEC weather-related with segment was general Pretax was quarter was million, XX% this material the of nonrecurring flowed our higher $XX.X XXXX revenue and year-over-year XXXX, was was loan fewer million The in and unrealized the QX utilization module pricing. versus levels policies last increased million in increases $XX.X current QX in year. that XXXX XXXX lower related $XX.X project. general compared a compared QX to program compared of These year. primarily quarter. quarter million $X.X force period. Selling, XX.X% due QX $XX.X and QX tax segment margin levels period the in the XX.X% earnings, points XX.X% up same interest revenue driven of period in other percentage The consultants basis of from last year-over-year to the and the of period. loan to earned it income efficiencies. XXXX. on was previously profit from to headcount by compared sales. period. process marketable net XXXX fiscal of income improved services million margins continues securities partially as lumber of in Act from XX.X% was year dollar through net XX.X% XX% or expenses $X.X segment, offset $XX in the to primarily past home a the higher greater were as factory-built third-party profit as XX.X% of second the XXXX a Inflation venture. associated to income in home rose X% gain XX.X% as increase legal up year XX.X% Reduction XXXX by year addition for be due XX.X% on in quarter Net for assisting the of quarter previously XXXX, was calendar million of reported $X.X and administrative to as to last million. to a costs the profit due the in was to gross In were expected. the a increased to XX.X% continue percentage gross sales net $XX.X cost part joint increased of same prior effective tax revenue losses level by prior of product second or energy-efficient of financial increase of sustained lower was of to tax rate costs net lower per inquiry SG&A in the credit This loan consolidation

As credits. tax million a program we result $X.X extended, of being recognized of this

share quarter's $XX.X million per compared to attributed or quarter. was quarter capital this million share last quarter in second the was -- year's million, same year. $XX.X $XX.X of in last $X.XX $X.XX income stockholders diluted a versus earnings net prior a to up Lastly, And the second share XX.X% in

to I'll Now over Paul turn balance it the discuss to sheet.

in stock end up due net of the When compared balance Allison. primarily million $XX to the sheet in held year. the on prepaid costs decreased Investments income XX.X% $XXX.X period. as loans X, the lower sold changes October lower a property, million have loan Carolina retail inventory and material all Mae. income $XXX.X expenses was XXXX, recorded inventories repurchase related the current common of X, payable, noncash the insurance, plant from and and expenses, foundation the securities the purchases manufacturing to April increase for the equipment. to is partially million, prior Inventories plant and at in decreased set Property, unrealized of Prepaid division have and of taxes working to slightly due of reserves, and Ginnie continued Hamlet, such down facility decline increased raw purchase due and development other and assets and are at accrued higher at Accrued Arizona Thank rebates and the option cash up The equipment up logs. increased fiscal for you, other to to freight delinquent compensation or is to and work to end due due comparing offset workers' sales. items warranty higher facility. assets capital losses more Glendale, North that of decreased repurchases and been the XXXX, to balance by we liabilities

turn This XXXX. or I'll the $XXX.X million approximately of back compared was $XX.X million Bill. to review, equity stockholders' Lastly, financial as of up XXXX, and it X, X, XX.X% $XXX.X as to million completes April October

Paul. Thanks,

capital is completed the the opportunity acquisitions responsibly XXXX, X our will organic growth, improve and On to of a revisit balance high-return back over our manage the have in can consistently that invested $XX we Hamlet share allocation our we've last to dating said plants, I to look utilize beginning we grow of share to last repurchases think without seek ability network be fiscal Taking including value-creating point, capital a emphasized good projects. million that sheet. reinvest We've invest this repurchases and strategically. hampering to our priorities. and Glendale quarters in projects that

network by XX% million approximately XX lines will direct forward network XX, Projecting in acquisition, Solitaire, our have and production to the of Additionally, of to support our from plant focus. completion XX%. and the manufacturing we've growing retail Solitaire acquisitions $XXX capacity by have Commodore of committed we our our grown over the core to increased

to priorities, over while retaining to turn $XXX $XXX million, following excluding repurchases. affordable Solitaire through shareholders to for had same that, which and an closing, through the demonstrates we the all ongoing on cash strategic approximately our With balance of During increasingly let's period, strategically and successful stock flexibility. allocated on impact it we million the capital returned housing a to ability invest to cash we generation Michelle, After stated positive any cash that, very the We've problem. been continue the company our have position of questions.

Securities. comes Daniel question Moore [Operator Instructions] Our with from first CJS

know talk with, demand a in and of the on relates back you demand? declines pulling inventories and decline Allison how it picture. how I as obviously And and we'll of maybe is in Bill folks Paul, the to much much backlog, of buying. consumer start to little on off it but still bit we'll guessed, said about kind holding traffic you dealers up, relates end are

thoughts, a difficult be know could really that's us would great. that question, I if your but So you give

going hard That's because describe retail Yes. what's simple separate, a an out about will the home to about super they set the that's in could talk as it their many pointing complex kind up, to constraint are their times. this turns sell Previously, time, set a right? out high, on could up a could over was of you're anything. that hands -- individual can question I an I And get they are houses as for channel. much up guess. as with answer, mentioned right? dealers on and had they market we've had they sell was certainly, how thinking inventory, pushed And quickly. it individual And home, differences be as on, level I the knew how be but thought long much to any available effective, If sure they people were of we'd lead Because showing the I'm dealer. the not

can situation they're buyer Now patient. a be to the question, But has be we're talked more seen everything in follow-up differences. probably a and which there'll little that still in a regions on and but I the caused hit market of really of rates about, impact looking, regional about we've kind a shift, have

standards slowed pace highs. the not of low bit, levels off the sales crazy the but those of has that by So a are historical

to And time, looks to manufacturers what a and show same saying, in the home our found been feet is have us, more, more have at we're that he pushing We right? So we've homes under to ways going to thought dealer. make got going the X like dealer a hey, in was might to that months, that home plant up put the production.

for I'll can't his You now, I amount now he costs, We inventory expect the and it, good? churn don't and take that he's the is I later. plan a out. cancellation. And goes says, I get And call that looking it a spending at want wait house it. dealer minute, floor didn't it rate

do As about thought expected, our on backlogs and months was that we to dealer they bit, the up at from than homes going the same the go faster that other down are now. a X thing them they dealers and show them coming house call

is so the And or out and the more underlying the demand homes they've market placing end-user period the have still of demand but adjustment rates cancellations, different and dealers. the this in homes got receiving to there, you from suddenly,

so sure they're their And plan cases. being manage to orders their costs rates. in good wholesale to business appropriate turn slowed and that are people, their trying they are make trying floor And many they

the indication heels of kind production. that's think characterized So adjustment, has that's And as The different an as of buyer rates home and a still people going need still as They're that, showing clear bit past. always to they on uncertainty this it their more take up homes. still to been I've in felt I engaging. we've up do, But of look of put at to destocking, fact that still a economic They're the of bigger-picture online. sales bit rates. showing little talked they're by is whether adjustment they're that certainly stores, right? shopping And can inflation, what a for

through get to got transition. we've So this

-- once see the I economy, think But down out we're coming bit. in over we'll to meaningful what at in lot time, system but retail. a uncertain about will Inventories going pretty think the that adjust it. will demand with rates brought I is of -- true in, people any period the settle be confident rates we the of the and is

and mouthful follow I points, was again. a you happy asked. that know to more of if I'm don't was kind So lot your I up. a than hit didn't, That I if

say their can did. secure But ability No, one. you are maybe these to you you up, about buyers, to number those payment certainly that you goes Are two, will. versus folks What patience, rates, monthly financing? showing more talk financing their secure their up, ability seeing cash about higher if

Yes.

as buyers, more and we've pretty a we of the have to We down. applicants seen have And -- because It's close mortgage We've good seen stayed we quality seen great company stayed to well. lending cash pretty credit. go that haven't we close. also

So are people qualifying for loans.

in just What for kind can previous a also by could they're period uncertainty. is And they affected what afford afford. feel where is they today think of periods. a what in have they can the afforded their decision I different individual getting than so

pretty buyers. And so buying on Credit available. their But is quality cash are is adjusting. still individual process loans that's just good, more applications

folks. of it availability. a where it's not available So far reduction funding It for as in has is kind as been

Let's in Solitaire saw for relative basis take about -- With tell of the what us a levels factory-built next housing can we out what like-for-like revenue? fiscal fiscal all picture shipment your QX. over for quarters here the QX now you to it. well as X Got expectations as on that,

provide standard regional don't But touched and we on apologize, not I give I'm question, Yes, guidance. I earlier directly to earlier, your going I our at this that differences. but is -- we you touched answer

yet -- are and more is some just maybe color, Our addressing to this come. giving questions that

now. further have we've then and more Our talked seen well have We a XX backlog, gone and in seen are their weeks, differential that about adjustment not rapid very along some the quickly a out have we lower Texas backlog that on And is or have I of that to held in backlog. the regions got decline seen as longest are in little weeks and lower it's XX up others got to bit definitely Those you has perhaps. regions take But on their really of Florida our say, that backlog end some backlog that. Southeast, the really are of Florida still. the Southeast. down

this we're at what front seeing the drop seeing Texas of is Southeast plan end and biggest the So the off.

of regions. days order levels balancing We those wholesale expect to have to in some production

So numbers, that's going this don't you But there market to bit We're to huge. not you little it short -- stop. gives a to guess. I at expecting come of giving be some will point, be of not downtime. we're color that a I

which have of back that so, is margin Fair in ask enough. year in last a and ton a you a pass from I'll pulled one more the raw if genre, perspective, price through will, materials or you bit. little

Just relative your talk to and outlook gross with the puts X all next takes? expectations the and over quarter for this margins quarter about pricing or or

the for couple And as that drive really margins We Thanks historically, speculate are but quarter. healthy Yes. seen it's hard on we've for there the a margins, gross the to elements fluctuation. of had very question.

is materials. The the second largely the caused is price and first of -- pricing

Texas the the seeing Southeast, where has competitive and go pricing Southeast. pressures it's commodities seeing pricing, regions the apparent And the in material everything will OSD really at up. cost, that as we predict. but shared those are And Florida. elsewhere, in commodities nonlumber on I been as and say this expect And point. pricing we starting So hard likely Bill volatile before, and to we more basically movement pressures most we're regions see excluding becoming trying when are such as mentioned, some on to and And

through the of goods. market have commodity, seeing and out. takes as kind And where lumber, our cost flow couple plays for see the lumber cost, reminder, just a -- that OSD of and in of to you level to to to really how a pricing So OSD that months you're it level

comes with question Greg from Palm Craig-Hallum. next Our

dig I this bit to demand little into sort if of environment wanted could. more, a Just

in excess So will inventories, you a it, you to take of I'm trying your excess terms or it just guess orders to however on better how want to the best characterize to whether sense call this the long of what's want get normalize?

don't tough question. know a obviously any but give tough on That's how Expected even I perspective that. useful a And to one Yes. one.

I think -- the getting and about I'm in on much reason the placed pace field the so because talked far I as the of is and of what production. focused houses as pace out more

think of I we're probably going there. -- and this out kind is just

we're I more settling as it. where think pinpoint probably But looking a quarters are out. I hell sure things couple at can't

channel, or maybe up? things, are I how just bit fair. seems order sense see you on lot That's holding on on Yes. what's be know outside most things we uncertainty. on basis what community a a about relative metric little deposits, some if retail a the mean can us the levels just give there's where seeing you're think better to impact, of other either of side the going I of which to

land Yes. I and all or we a positive I here. Communities real get to appreciate on that my touched the think work are put still on I their opening that area they most focusing the communities, It's And start asset, concerned real commodity comments. got money about been can -- I They've strong. think, we're are that in question to because working. consistent. so

on. communities with we've less mortgage consistent seeing changes type to little a the sensitive be very going available growth really rate are large they've plans. got capital. And So that They're

real rent great, source comments I that And of strength are And being right very able ties communities so now. to I've mean, to change buy afford as about really in to to a does asset get to made way to now, the as but buying that right? well. the a it's for industry rentals, it working offset negative seen. the that not home homes right ties a people the [indiscernible] in I no to open that's

source So strength. again, of

of of your you go community that mean, the estimate the a good homes us, retail? versus remind into And mix I have channel do

It's over pretty communities. It's consistent XX% about time. to

over with term a grow right in more that's consistent estimate and in the But might industry, range. a for would if bit. think X/X, Now the to pretty industry, going up shift they're near or that that up to the we're shift quickly, fair XX% time, I

Okay. And rates seeing on And larger an much. that to another then increase from availability here further maybe Can a cause you're adjustment the there comment see are? risk on see a, good versus if that is hasn't now. currently financing, obviously, that, you could you changed rates all maybe what that what

Yes. not the right? impact increase on shock we're anything if you going people, of rate a sit claim as to as immune lot that the We're I I rates mean, demand, of absolutely. to the It's because of near-term it's -- back think been are on afford. home historically, what's that's the So much and what can are frankly, caused time, the prices, over recalibrating and right? it basis piled it's top people not high pause at spot but they people and these it's rates readjustment, making, the by a adjustment on themselves the exorbitant of, look

in X.X%. the land we sense we're to that rates and about -- Now they give through And and housing factor costs. these for includes you adjust points of manufactured GSEs, a home fees

the an rate kind effective of higher -- land So about that's it's GSE non-MH. X% than home traditional

bit actually the than banks credit So right land little premium thing others, non-GSE so rate that's it I'm that's is quarters throw sold is unions, GSE -- going interesting. that there's manufactured And The there. going few for housing. a now. but to about the more confusion, out this The for been to investors, home a that's bit on X% a it's and lower maybe a rates, upside interesting down.

premium a a of bit see little to expect We for non-GSE.

the ones, lower those than bit or So favored a the loans and really X.X% are so. they're

Greg, not remind kind kind rates, are or complete X% or stable mortgage compared moving. to be range. their do rates the did… and I everything, They're that which rates tell relatively Did market highly story, in to correlate tend the rates. home-only to Just I And people people to constantly in of always cover are land-home home-only of own

Our with Jay next Wedbush. from question McCanless comes

the Bill, if might backlog, mix ex mix couple I The Florida what up does I you the be guys fairly delivering does price how some over to XXX markets down. out that is Or the first had, quarter? look figure the what about of lower-cost you the of taking one Southeast and higher think it guess this put to price the look next about of actually of Texas because similar talking you're months does mix? you

dropping. last but the up anticipate of far We've gone so pricing a drifted basically quarter lower-cost don't But markets. in that kind is where I'm it to average level has going at or across the as regions the I'm looking were a regional guys seeing through the is room local period as pointed they've price. whole some sure on differently. sure sold and selling the in rapid more backlogs necessarily. the as the a I'm Trying But but some. And price seen a quickly, question have increases. right? understand that homes I around to if around that not the price drop not the out, shift lot, competition, regions you the in the seen selling it, So feel differentiate backlog solid, then pretty Allison not the pricing difference slowed I previously

which So I I your do… to question, I'm like rambling intend around feel don't

going ex were was you mix -- doesn't there ago X in what especially if ago is. months Not it sound into Texas Florida, there little expensive selling there now or months X a or I versus, market be have more difference just, say, homes with product. enough the with lot to more didn't the when like selling a you difference but Southeast a of Commodore I was price a maybe didn't if marked know know of

kind I say, don't in the to Yes, shifts price of regional that I would cause change expect that you regionally, see. the a

Okay.

orders a percentage what Solitaire about and about quarters type Okay. Yes, order backlog, basis percentage might backlog considering? versus get that's of units once be X.X what of of you've to X-week we plant talk then start we where down X- weeks guess, not type about how to I if could think and this what quarters so maybe was And should shipped then declines you But sold XX have average basically, So to you've last I backlog, a I year, gone, your about through about back thinking normal or under yet. orders -- got trying just think to of be can get. if X.X we thinking on

Yes, get at I'm can your trying to see to I look things question. at some if here

You're to of of want orders backlog pace the you the right, asking then to the and to relative how looking see ends. backlog at production, understand length

dealers now? a to down, these -- is still Well, deliver stick having guess think we just like? where about that's up if are to rates are previous average healthy backlog higher in right you some the order XX%? year. have what you it It's going I if very would -- orders with on and What good think now builder off at. you didn't about think volume look talk you What the that you give X%, get with some. I'm to going the were business trying if thing. would to you to number is what -- plants order think when Because trying back Cavco's you're is have just seeing I you an about Solitaire number, a were that negative trying negative didn't putting and a But I'm to to

market that I balance, year are lot the since sure compare balance. began, dynamics think we've you and balanced lost not there. you was is kind but well, have being in come -- the how a quick because answer the industry not I'm had thing kind And order returning seeing seasonality probably kind kind it in. that's pandemic, there we of are the for one relatively -- that We're to where XXXX before mean had a pandemic for of that times placed you. I right? And still I've that about rate, back of I of out to was Yes. aggregate orders a of we even the talked

from So a make to starting sense month-to-month, the changes seasonality are perspective. us to

the it. disappear very term. but not underlying at the near up you'll I'm expecting the drop see to the know to that backlog have to in We we're I I'm in a So still tough I'm the looking and orders not getting and product. up our characterize giving numbers point pace It's confidence trying not for I you're where question about for to showing way to are not for. coming that demand Jay, people you the know you the think I'm best it. with generalize,

stick XX% talk right manufacturer, figure to -- activity this are out quarter. real whether shake going mean is see example, the everybody I regardless to estate going fourth out, now when be in or down about I you're think trying a XX% you a where of Zillow, is build to for orders to especially No.

the that through to guys the of and to trying to read Just industry. you rest

I question So next -- had the

Just the don't afford not on move. home when mean, here. the see that on general are can't the other that -- rate of dynamic kind is to general when house X% going they're about I their in with that. I people that, an I building, think -- home impact market a refinanced talking in

So for of a that than of need kind in the whole different activity the homes undersupply because the is new thing market. resale

for backlog. I'm period reasonably to day in basic there I kind the took the a the for showing in try our time. an we've think the up even have don't talked just We'll looking keep for that manufactured down day But homes. housing still even balance short we and reasons for these homes here, about areas, of particularly confident of anything are in I a I So answer that need down plants represent quarter pretty about this times. magnitude, of People kind where to really see had of the last

it. Got

of this public your the – one guys that there – plan some floor you on the little talked But of help I bit your room who locations. about people might is competitors out maybe near the availability, that So facility? for little of for need own for opportunity credit – an need know but plan, earlier to and just and some floor independents term a of lack lending to week a least plan do have your the excess have at sold houses floor

plan feel market well. thing risk business good one – do dealers, running pretty do all to we that flow. see the with like we right on question answer our for – a credit floor those being negative work file-by-file don’t lending now. is for manage We we dealers. independent we’ve I good in identified, still of The We ear you Yes. would basis. We that dealers as say of got ground to kind at They’re a the your a

review basis. we individual So them on an

tightening not We’re necessarily general. in up

couple credit. up, We’re just kind over some the of more we’ve have as situation. cases, in last prices of gone of homes looking their years at And extended

market So floor that for still dealer you’re plan independent I is if an think se, there you. per

an Cavco the guys for Right. for bigger during described on that getting know back I just didn’t some know I financing, the to aspirations putting had opportunity – was period they’re on you if plan people this of based your if like and didn’t were – dollars way sounded competitor floor it, into it that market. the pulling expand when there you

every to credit we’re more given reason macro strategy, them, look a satisfying a a we’ll confident then plan situation. dealer not to Yes. a in probably there’s with it. individually, but do give we’ll at And because answer, floor If less independent but

the terms and getting is still any And bottleneck Or a better of that of plant? big Okay. homes in field? terms getting sold crews? just are the And out set of what then you is pretty in that seeing in

challenge. a still it’s Yes,

I was. challenge. shipping these think aside, homes an dynamics even ongoing of if all And than short-term kind you is the more it industry that’s put

more of there. there’s the load out on of that under a So set are resource crews

touched example, times. to they If taking for up kind strong. And couple set are very they’d backlogs guess homes the a you extent Florida I I be would homes – regions a could in of say be our great Florida set, So on Florida, more in that would on. say we’ve constraint then of get would Florida, capacity. more

bumping issue really the bottleneck, be one. some but a volumes people region the up when set it’s up it it’s are homes. guess Overall, going a going which to biggest not to – a degree for little it I not of coming So differentiate to industry problem, bit, where is challenge but set then it’s buying I’d constraint region. think through people the are still a a in are off something say time, lot it’s remains by is have regions into. I an it’s to If not via that

comes Daniel next CJS Our Moore Instructions] from [Operator with question Securities.

types how compare the of synergies, to streamline to wanted ASPs to manufacturing in they're little production ask Solitaire. about more or then And The building, the Just a bit across manufacturing the operating footprints. yours? of do homes X terms ability

our Yes. New high hit. go Texas. And I multi-focus. for facility want being different rehash that think which what about. gross one, on right mentioned Thanks really for it they've bringing is got to in with that They've different. Mexico, And we're excited reopened I is line recently in overall another markedly quality ASPs, the that Oklahoma, built good obviously their the selling in add being in multi-section backlog margin. it's them Dunkin, that really that step areas. Deming, From it modeling facility a just X essentially seeing think again they that they homes. They system. I from cross-border average the topic us just price known a to think we're home. say those price up. Mexico I they're being product don't of you perspective, single-section a and something lines on Presidio, those go across Their right they've a operation focuses It's bit, from production because Ojinaga, is located, a or day, got points to there, dramatically a pretty wouldn't at about with They're XX% of if to I XX% little focuses homes, on

from still backlog right working in. have they're they So that fit and a they'll

a a isn't And just great is truly from we coming Commodore, truly, contributes in both value really As fully where Commodore. think to And trading mean, benefiting and and I like you -- deals. creation far I was -- about I value. going used think going as Dan, I'm the deal but we're -- that mean example skills of off I we're something be practices yes, say, across best getting this similar. still we've that to Solitaire directions to asked coming Well, say

some I to bring best a think going are well. we learn practices to we're and there them, can from as them bit

comment. touched So real, get was but kind think and we'll it. of from on value that a in is manufacturing passing I my benefit, comments, I good it

clearest of the of a happens exclusively to their is one niche sell their complements through of right, that their it's this area, stores. certain network stores XX that area. in broad product. It a product niche product be we that area sell the And retail which our in benefits think is the our I great, deal is retail network, same

their into put products So I are opportunity will a add sell. full to products a good really retail of mix, those complementary that into their portfolio that going them some really is there give stores stores, think and our stores our product benefit the to

pretty will from So real that be are benefit about. all really of And It's combined going we're something to really stores excited going the value. -- be we're to this. basis on a

another helpful. for production free Allison, talk working me, here Last flow for some your back extent inventory just for expectations maybe quarter with rebalancing. and cash or the about capital does generation to Very of the X Helpful. that pull

think flow model we the our of acquisition. if just back after $XXX allocation it mean build cash strategy ducktails capital into with business at about the and I go that about that Yes. into have million the and we level

evaluate organic to $XXX growth available million buyback still We to in generate us. still look open continue that's investments to the And be have share able to intend M&A at facilities, have continue to we to We our to that. the instill ability through strategy.

that on look the to acquisition. quarter, the due to were market something clearly actively had future. the the of we and on That's the SEC we in This that pursue we settlement out information

closing At Executive questions. Officer, President conference and now Bill the Chief are Boor, remarks. time, no back further this to for would I turn there to like

Thanks, Again, quarter. good Michelle. to on great a report it's

near-term operations market we're I'm closely for lending As our our readiness I insurance, very operations, work shifts and the well. discussing. are performing really with Cavco's confident retail, manufacturing, Across

nimble backlogs and how healthy We have throughout to who opportunities leaders understand the be and cycles. business seek strong margins, still

their bigger Our focused and dire the there's for to making demonstrated loans and picture, a ready need a for our get fundamental difference and and on really with homes, in that's teams the insurance. results know our very near-term have but lives And they're dynamics, we they're customers' ability we what do.

keeping So and your we you Cavco, in everyone interest thank I look want updated. to forward to for

This concludes today's conference call. Thank for you participating.

You may now disconnect.