Cavco Industries (CVCO) 1 Nov 242025 Q2 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Second Quarter Fiscal Year 2025 Cavco Industries, Inc. 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. ahead. go Please

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

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

performance, remind financial we'd expectations current earnings forward-looking comments statements, savings, revenues, statements that of made and management during flow we begin, cost or in you by market contain Before this future assumptions or the may Cavco's about or operational like to cash conditions. use, share, the conference call volatility per markets future including credit or efficiencies, operational

its uncertainties, could behalf materially risks filings most forward-looking from differ to cause without or actual and in any actual from with that involve may to those All Exchange actual expressed review XX-K cause I Securities forward-looking statements. identify the statements Cavco. affect on factors described including, results which which or materially statements differ made Forms by in to XX-Q, recent events Commission, the specific results and you Cavco's company's Cavco's encourage forward-looking those of could results -- the limitation, and and

written obligation required also no This call, except oral, to this of to the revise this live the conference is update time-sensitive date or contains date conference undertakes circumstances accurate after or call forward-looking by of XXXX. reflect X, broadcast, that information only as whether statement, Cavco of as events Friday, or any law. November

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

us results. affecting want and by the to I second review hurricanes states Welcome, our to thank Southeast. today Thanks, recent the you other start addressing for and in Florida joining Mark. quarter

experienced as Hurricane many in the fortunate, the on hit not knows Recognizing others our significant October, everyone process their with region and some Hurricane rebuilding that families and they struck which Clearly, the or a early call survived and others rebuilding normalcy relieved employees dealing that to after Milton end and existing damage. many property our QX QX. cleanup the process unfolds. as were regain of long right throughout although and we many storms, the before cleanup were is Helene process As the are

the weather our our homes. Like way needed employees as folks have awesome back producing has been every downtime a the damage work continue and shown great did raw catastrophic production minor was coworkers, our job what efforts minimized. been but to much our event, preparing see through operations made to resiliency losses. their it's selling to It the retail could worse, feared, and material and of experienced for storms. to committed vitally And Relative

impact I'd like these generally. and of mind, it's storms know I address the quarter Since more we'll then upfront, top of business to cover the

First, were not insurance do policies impacted the not actively areas. operations our affected in we insurance as write

were As indicated, raw our to minimal. losses operations material physical damage and

to third finished Regarding shipments delayed resulted prevented because from approximately completing second quarter of million in quarter revenue the of $X Helene the conditions Hurricane from us net results, homes.

We provide impact lost. specifically to was on QX, how production much perspective also the wanted beyond time some

on this slowed Georgia fully how production days basis, a plants. XX our of to that how optimistic based equivalent and we quickly combination the pure lost and recovers market its last Southeast pre-storm is and combined a health. question about estimate The of On activity. the XX real through downtime the weeks we few We're of across to operations, Florida

Capacity up this we includes Units XX.X% in and progress improving that quarter quarter quarter. in switching additional we're up days the taken market. about and utilization July. Now sequentially discussion. shipped XX%, Xth very felt around as continuing to the from showing year's XX% the line was of to We good the production were results ramp overall with over the last our

pace So was running XX% closer our to capacity utilization.

growing we've possible across continued be The orders. XX%. XX our about by wide There ending to production represents of with still quickly as plants In operations ramping in X addition quarter to strong production. resulted some check the few needing more keep shipping seeing. weeks and orders we're growth market a of more backlog as in backlogs to our a continues approximately encouraged homes, Generally, backlogs backlogs to range been

For a about this inventory been XXXX. it that that It slow development about very their while expectation rates situation, time discussed community to every is recovery developer was has last we've our a year like what talking long us. challenges. we And due seems and the feel seen. time, inventory That's would unique in behind calendar we've improve we what mostly over order community

community This dealer, channels: quarter, growth we had builder all and X in developer.

$XX The in with business buybacks $X million after model of ending quarter. to continues share generate of total the million our balance cash

our additional our in has authorized $XXX release, As the authorization. remaining to million indicated prior is amount an which repurchases, share in press for the Board incremental

have important sheet. responsibly So to to continue tool this we balance manage the

like With over the to to financial that, turn Allison discuss detail. more results it I'd in to

million million, base $XXX compared revenue $XX.X increase driven net Sequentially, Thank you, increased Bill. quarter the up fiscal an revenues the and to million, quarter-over-quarter prices year. $XX.X average selling business in of Net financial XX.X% XXXX second sold, million services. during $XXX.X by in increased prior for revenues units was or higher

prior Xth in a primarily up housing in the $XXX.X to sold, revenue from was excluding was QX home when the of of stores, for considering XX%, partially in sold week. our due plants quarter. holiday million, XXXX many for quarter. and segment, in year per period. utilization palette XX.X% more per homes million was home comparable revenue year a Utilization The was XX% million primarily decrease scheduled extent, or of decrease a when closed revenue approximately downtime but the factory-built were the available decreases, through Within a increase approximately of proportion was the increase mix. the prior our July from due offset X.X% $XXX.X all average lesser homes in average by days, XX% to XX% sold production company-owned net to Factory pricing by $XX.X nearly lower in multi-wide The all partially offset was

a the Financial the basis Services revenue segment in the XXXX, factory-built housing segment. average XX million, decreased XX.X% $X.X XXXX partially million gross in In the in segment, period of net XX.X% factory-built housing or selling was selling fiscal million, losses lower the basis to year, in to points due by same up from due gross financial XX.X%, average quarter primarily offset last rates. in revenue XX.X% and down Consolidated services insurance was net XX.X% lower driven points of prices, primarily $XX.X of premium lower margin $XX from in by as XX input versus percentage second higher QX QX prices profit costs. to

Financial significantly at of revenue with decreased Services QX barrel increased million. XX.X% of from XXXX. margin XX.X% impacted XXXX the as our gross the insurance The of in to a by division $X reinsurance event percentage QX from of limit division was Hurricane loss the in --

quarter of share-based revenue the in XX.X% or net second and administration of $XX.X million or to general the last compared variable based compensation $XX increase expenses due quarter revenue due performance to XX.X% from XXXX on primarily net higher Selling, expenses to in higher additional locations. same million were of during measures expenses these The compensation earnings, acquired year. improved was retail improving and

X.X% period. in per prior million million in $XX.X second Pretax $X.X year year's or the $X.XX last profit period. Diluted million per share $XX.X for prior was share $X.X stockholders from share this quarter was X.X% was per million $XX Net million, $XX.X from or million, to the capital $X.XX year up income versus earnings up quarter.

we $XXX.X the program. million repurchases authorized nearly of quarter, our under repurchased in the quarter began fourth share Board fiscal million During XXXX. the at since Cumulative stand program $XX repurchase we

As announced repurchases. under additional authorization leaves future has press the Board million. authorizing This $XXX.X $XXX latest for the in million expanded an our program, release,

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

capabilities. used receivable liabilities repurchases, $X.X million, commitment increased manufacturing used XX, to and primarily investing is increase investments approaching was loss excess in XXXX, sheet and balance activities the to increase March due loans with sale balance relatively for organic bringing Cash earnings, sales. Current of factory-built for held edged by Stockholders' capital our remained bonus Allison million a to as just restricted transitioning up the quarter, compensation difference originations are increased our enhancing and cash The related in was financing timing Cash as Allison. up of finally, $X.X as million. segment. in Thanks, increase investments an in higher expenditures equity has overall are enhance passes The actual highlighting $X $XXX.X higher in higher accruals share was provided in we consumer activities to over activities from and value $X.X to the XXXX, operating on more the of our growth billion. short-term in reflecting generated loans September to housing XX, maturity. million, current customer storms deposits. $XX.X shorter And previous reserves value. Comparing cash duration bonds cash of time discussed. million, portfolio In between primarily stable to receivables in accounts to shareholder

today share XXX,XXX sheet shares the [ of September the released presented same yesterday's The outstanding for shares later amount. XX-Q out last be the not common shares or and is the updated stock, to thing to and number in I decrease per wanted balance XX, data. in treasury increase balance we to which treasury 'XX outstanding amounts be earnings common in the the call impact by earnings do will sheet, release, by stock ] reflected on These

to back Now I'll turn it Bill.

Thank time interest you, of from the improvement the pullback. was encouraging another This quarter rate Paul. showing

products, in drop but environment, to macro pace. We about market for run-up based have we're and data rates, homes. and XXXX shipments the industry XX,XXX indicates unit optimistic forward the in what and XXX,XXX need shipments undeniable certainly risk the pressing we're the we're demand seen uncertainty monthly and the interest more latest XXXX, our There's to following HUD in on the provide seeing now

please would for Gigi, open line questions? the you

Our first question Instructions] of [Operator line CJS the Securities. Daniel Moore comes from from

ramping a and production maybe you're you're overriding what color from on just demand perspective, a me maybe more with as bit Let little from seeing as start possible perspective, quickly where where more orders geographic of the you're in markets seeing And terms growth, kind mentioned REIT sequential and still what all businesses? are are of then back now community just to in lagging? X improvement an you

thanks been, these been it's times, many lot was not in orders, sales consecutive calls, of talking -- of kind continue. increasing for said but did the dramatic, which a about this steady of Yes, It the Dan, string I've question. we've increase. and a it's

level. highest And so the that's kind of

add been even rates build, where we're I'll and the been and Southeast and Texas and strong stands its biggest have regions the Southeast That's talk that plants own product specific, highest we as order very the to I has far continues been As has lag. think the consistent. Florida, seeing about backlog and strong. out regionally, well. area market as then as Florida Florida

thinnest having little product bit, seem there's so be well. that Florida. I And of builds happen market our that that the they're whether price backlog and as activity question, multi-section, the But points your guess, into are kind in ones most also point plants be make products, the to our a to some but I single of a adding brought lower And trend, to we're price backlogs biggest seeing. lower or the also question

regional adding So list and in what as of that well. hopefully, that on looking differences you're product for covers kind I'm

As combine far tend segments, we historically developers talk when and we as communities. to about builder the

separately, channels, for us the about trying it both I the of when out. spend the land conscious be it's this more lot all them So channel seemingly interesting I in time the to communities of in retailer, communities, know always so up And takes builds a were inventory talking and quarters that. quarter. channels kind the and work said in as lease X long developer we interest the to remarks, And there's of my builder, then

we're have -- of you the We've getting Enough them way about calls. saying big had of under we're a next. resident that their that like when order these try ratio kind think just of And there. anymore. been much that's feel don't inventories we're inventories. to think lot a high ready You I'm getting a that closer by home, have them communities impact I jumping to to have I control on setting really mean to they've starting talked getting to the a gotten a X:X to your and home being the to feel pretty then not back gun in

bit about that's that. And drain feel inventory been that pretty think order shipments, on they about rates wholesale off. a we a wholesale work when you as good So of

in bit a of it's So a that tailwind developing regard.

me Dan, touch I on everything let there? you're interested So if know in

the make Glad more you absolutely. I again appreciate up. employees importantly. and some to work the physical to to with made that Georgia and it as well disruptions. Obviously, Florida through and that, that relates up probably is as Great from XX% more, downtime as hear it obviously hard Backlog try to the then minimal offsetting color you'll damage

So to all are QX what in you puts just production takes we and how you shipment put those do -- in relative just we when about how and thinking saw together? QX growth

I points, I say you on scope of certainly, related anything have captured there mean But of and Yes, appreciate the hard that minimal it's focused damage stuff. say to the scheme our to specifically In the -- I the we're through. to operations will the we company, minimal. working on the was that Southeast, which that things

the that region. at XX XX to equivalent guess, this, or yes, waved We're days days of downtime less So of of in comments. my in -- kind I

Some a did much in happen didn't plants of of Florida that that have backlog.

So while a production that's downtime. almost wave market to lose time I like in like never in

the happened try Georgia can where to they've work have the we some in very to extent that to up of healthy because it we catch And actually plants backlogs. We'll backlog. got

because don't that really the in But the ball areas back was of production in quarter. to on retail it really question when to as capability activity, bounce overtime I expect, couple some next a with to for there we've bouncing mean that things you we And for and people you that's down, in and since what in a opposed then when there own damage we're But effect really crystal health a think of back. There activity some boils there spots just the the are storm no But couple areas, region. was right? it broadly, itself. catch up the the when retailers -- I'd that. have people the weeks how feel just are focus we've So had devastation, to seeing that you'd bigger come But on. talk about to our stores region, and we it more third do back best weeks, to work right? dealing as a are is our of are region try even of tried the get

trying early in play stage that evaluate to but out. it's optimistic, bounce So got pretty this of to back, we're

so answer I a that's clear And question very quarter for. third the have don't really

that code in there? changes to spoken zoning, et more create back. HUD guess beyond what code. I'll And I seeing that the jump I'll out of more few general a just are you're of picture, could proposed there Understood. But cetera, just beyond maybe looking you've being past, quarters? the broaden one next bigger in about kind tailwind in and changes HUD seeing anything recently Is you're

I'll of stuff it's just everything think is your a right, and a continuing that before, talked Dan, long-term story. it's Yes. story say we've kind perspectives, I

I be think recent coded HUD directionally were HUD enabling code even the code. changes to multifamily positive, very

don't innovation facilitate it's can I touches is facilitate that that anything and that example. that innovation that on So to to and for going to of areas, zoning. update really stuff products And creating -- going more all urban in have kinds the discussion. into then our the to industry, is to go going

housing. thinking worst, housing I and affordability up out open a more the municipalities is to for where in to which challenging period for trying a how of said areas, option figure are factory-built where urban to I've that's better time, think long really their As close-in and is

So I trend, and of a it's always how and been feel good fast the about when. just question directional

Group. Palm Our next of from Greg Craig-Hallum Instructions] Capital line [Operator comes the from question

if the share the industry. some bit gaining growing. implied the numbers not the just quarter, but you the and Wondering kind are a versus dig volume we that can implies little It of order rate, more into backlog

So best, mix to more terms of are of whether to maybe some based, little get thought alluded I'm kind is areas kind curious it's changes of to that product? a you're some whether that or quicker. of of the trends in kind which bit there, You in your able geographically to adapt performing seeing a you're out product maybe

point. the a thoughts on any of as Just starting great be broad kind would outperformance

showing Yes. I'm couple Thanks offering shares us. And it That's wasn't to that Greg, you're production and think fact take But us kind of gas win that our remember that I up moral long is quite bit. for losing some sort same that interesting it's a because foot these share. I quarter-to-quarter the were story do to trying up. to take sitting to of really the question, kind extent move on I of ramp think the had can should here that the we've the probably of from the not calculations I thoughts, ago to trying a away

So think you industry earned like industry. lagging -- was little the do take the shipments relatively compared volume really when year to high further. we later, comp we've that Those looked became I back I the slowing I'll we've had. the then the maintained industry. we that down, were And a bit mean growth a when it

can gives a move how an just numbers example of So bit. those much

optimistic think slow in we've do what demonstrated all our we've We've to our market, of view early and a things of you to to far had need the focus big and knowing in an ability to as the happens past that kind do. As product, if is necessary. that's plan trying and rehire regionally down, that I of on decided the company

the been mentioned added plant-specific and In calls. and that's this really think before in we previous hold. also us, we last national I focus company work years, taking and is to pushing. sales, better team that on give couple REITs we sales, that had but our both community game never added the have And generally on -- I helped We've up operators this a in so think a of I've on sales supplement

but things, too. to I gaining market those we So from mean doing we're I are in numbers, in a there's don't away the and thrilled do of take lot numbers, excitement think the variability any shares. I'm some that

Yes.

shift -- the up on I segment, staying sequentially, quite sense. if factory-built That and If could where but is bit. a is I volume about over Okay. the were this the think quarter basis makes whether or a year-over-year but margin, in volumes

better sequentially, a capacity looking was and margin bit just down yet So segment. costs input to housing utilization, And year-over-year on gross little down deflationary, basis. I'm factory-built a up specifically just was it

might want better been Anything point there's else that just have just And just it little to you that scenes? given thought we've talked about, anything the a I everything out? but if bit behind curious

lower going drive And which company-owned ASP through when only we from our retail mind really retail, more year-over-year through a ASP that the on in stores, mean in ASP pricing proportion the decrease serves bit. and sold keep wholesale primarily and to to to we our homes described. kind pricing, less time the have the get talked of time -- of a percentage in of then we we thing lower that down driving we And to the they're as was margin. I ASP a about due saw largest the part

[indiscernible] factor consider. So a that that is you

Yes.

capital of curious center, obviously, you've any out M&A related market on in pipeline, Okay. the update I sense. you're anything but appetite, That allocation, then your lastly, seeing kind buyback of to got guess, and there if that? front kind And makes

Thanks the Yes. for question.

capital X efficiencies manufactured to internally. It's examples And a also we've the I on of a of we balance in are in again our we process the evaluations responsible priorities of which and Future showing and Homes, use to plant. remain have And for buyback that, shares, acquisitions last manner $XXX our was our to a Kentucky certainly responsible another housing expand which these million look our Dream lending and sheet we ongoing really in manner manufacturer planned retailer. our after allocation And somewhat capacity that at quarter, a recent before manage commitment Homes, opportunities also purchase horizon, to improvement shareholders. authorizing again, continue we this and betting improve our opportunities. capital the of quarters think Board in once demonstrated announced support our operation. And purchase as our retailer. was our to Solitaire the cash by

and growing number invest been to add to just if we'd ones last you, of time we've of a couple and spend, into that. it I that do, them say love. -- several plant regularly. tell forward that over looking always years, that to capacities. the we've to putting $X that We've of They the And the we million I'll spend we doing in dollars able probably really plant dollar host had very is I had think looking been existing we're in but pretty to been we projects huge, would something a they're aren't all our we've

the give, answer in specific to and a that this it's M&A, we answer, seems it's capacity a give similar of it. because be always standard There opportunities incremental feel a focus. And because we how grow it's of then it's we your I'd about usually not question existing system industry. lot about the M&A with just So

that and space. always to work you hopefully tuned, And buyer with. stay discussion I have us, will want think have have of to you some to over you level acquisition so that see time, a opportunities. to be active be we they about continue And in And

comes from question McCanless of Our from Wedbush. line Jay next the

of we on a price that if kind wondered average for could topic stick I minute.

product point whether through know peak probably XX,XXX, it's an almost if running of the like to and XXX,XXX, market an X we're on close next fiscal close any coming months. few now as next at have to 'XX, retail back if XXX,XXX, look the you'll you about to You that pricing, quarters? at think way just Is and any over to mix in know inflection the go couple might XX,XXX. I you're or larger view there you pricing don't over where expansion see longer-term the sales

the what is call distribution ASP of the feel lot the for most has and I'd much a be that know we've ASP, would the of it would had, There think time, the but shifts tried I not guess -- have of in ratio ASP product the what is not it's if are I'm this, ago driven I from quarter I the me and track through I I wrong, think been to the by mean it homes. whether slow always primarily products say lose are I today, driven how is over last product but how Because incredibly different over factors. multi-section -- same of a of you years, all year X leakage factors ASP last And with Yes. that the really -- if homes our price. guess, kind other of product. I what reported, give down, but or we've I difference is of same sold the some sold -- correct a single-section every we've we're same most was interested much to precise what in

think feel reduction. we but all I time, when plants surprising that's like, the gotten the But unit industry, for plants. the pace. call of around go more generally I'd that, to ultimately, of I fill XXX from than XX,XXX shipments what's an a the in ECON to same same and a lot giving and we for the I is you, seen that just or any I utilization point we're period Jay. shipments and about in industry obviously So industry more We've inflection in to back this, going across up higher But see say build I XXX,XXX product XX% hindsight, going backlogs like industry's drive of backlogs progress it at is that turning you about if see obviously going it's of the you XXX,XXX up, start view to XX,XXX wouldn't industry's product can down that guess, my are could demand. and up price see price feel plants, kind not though, up transparent precisely don't obviously inflation. And We've direction. to heading think I back on

good rates great where and are where talk we Chattel any That's those color. we've quarter Could versus now? improvement decrease last you And last in also and if about year. right or were seen

is Yes, where declining they but in pretty months, last this the steady few Mark. were They've slowly Jay, been from are quarter. they last

So at this point, X% range. high we have a high --

there's So Xs Xs high in down high and topping the like X.X%. looks quoted are that they're some the about X.X%, it in then

comes Our next question Moore from Daniel the line of from CJS Securities.

the shot the a little challenges ticking ASPs given at with Southeast and One question. lower. least in weather a take I'll more just forward-looking

about costs, quarters? next of guys QX, of Just lumber kind of input margin how other relative experienced this think thinking to good the about bad quarter, gross remainder are or couple you movements any year we in the the guys, what as we factory-built

And the think I is is, is particular, way we rates that margins. the XX-day little we a we to think in obviously, component piece can that the lumber bit. gross first, we materials. a come And factor. what like have primarily another them large And call. lag profit And for relatively about those commodity discussed gross where market And about pricing pricing all margins seen OSB, the are about but largest the mean I flat the to all is and it's think to from into of earlier materials element us, talked in this I in for Yes. before, our rate see down OSB. on we've a they're incorporated builders, cost your that point, the

factor So commodities, way eventually, like its it all through. will the

And can also see too. margins, just see you history, our our can the as for in in gross it -- you

factory we top seen our COGS overhead we'll again, as line on the we experience our have in ramp factory-built housing As past, to that leverage component. continue

COGS possible. As extremely to we both variable expense SG&A, components keep on as the those the we've trying as discussed, on of both seen have and

Very helpful, near-term from how well Allison. rebuild, at Georgia. -- And demand is -- from appreciated. inventories TBD, from might there's in last would maybe you one, Or some be potentially how point. that thoughts reconstruction about of either do as Midterm, think replenishing Florida and just expect there in difficult FEMA any too much obviously, and interruptions just a of boost you much too but terms as

time Yes. there's that out We existing stock I We're guess is that on not supply think want increased out. supply taken you know my that thoughts know if to we just has been been about demand, the watching over things these it right? out, way. has play taken

there's interesting know events so back It's time. been demand its sometimes feather way a because to of interesting demand. the while, weather for surge you've It -- much in And increasing tends when too. and industry we watch a It's the see a in. short don't of to these we been been as that you period an catastrophic watch in over

dramatic demand my that's quickly these guess expectation. expectation how about after kind lowered increases things. I in my I've So of we see

was ago areas mean, it it is yet right replenished creates And years it seeing not I we're of that that a even So that we I Hurricane think Florida, know from can't Ian, any demand. couple put more. have storm. still in that I

be can out. drawn it So

could pretty I know was be but going call saying, the to public an nothing had is has just we're of think a FEMA thought housing, tangible industry, they point. would a FEMA could ordering with there about question even of nothing orders that state term. But has and have homes, that happened the the I the one. really Dan. we some tangible manufacturers like or in it basically interesting relief near from in there's on, But Your some across what hopefully, that possibility FEMA industry this at report some I sounds

At Boor, to over for conference remarks. like this would closing CEO, the President time, and to I Bill back turn

Thank you.

families. forward make homes share for provide interest appreciation ongoing for our that theme, keeping in want to Thank stand I you We the storm, by affected continue today you and the Just deserving to concern and impressive on look Cavco. kind to folks us of for joining your our efforts again once to our updated. for teammates for

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

may You now disconnect.