Skyline Champion (SKY) 7 Aug 242025 Q1 Earnings call transcript

Good morning, and welcome to Champion Homes Inc.

First Quarter Fiscal 2025 Earnings Call. The company issued its earnings press release yesterday after the close. I would like to remind everyone that today's press release and statements made during this call include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties that could cause actual results to differ materially from the company's expectations and projections. Such risks and uncertainties include the factors set forth in the earnings release and in the company's filings with the Securities and Exchange Commission.

Additionally, during today's call, the company will discuss non-GAAP financial measures, which it believes can be useful in evaluating its performance. of can reconciliation the found and release. earnings definition these be measures in A like the Officer. to Mark now would I turn Homes and Yost, call President Chief Executive Champion to over Please go ahead.

first pleased progress and call for conclude the but far, quarter thoughts about you to the good I that traction of points by so CFO. second only momentum EVP joining strengthened, fourth key with the balance Hough, earnings to the from On in of I our year. report continued quarter to due Thank has go not today, our pleased this over joined our be the quarter, I'm primarily we call, our strategic morning, the our and positive everyone. our carried then initiatives. and discuss Laurie am will from first

year-over-year reflect from our customer Homes, first execution benefits early channels, our increasingly Our growth financing the affordable are reach critical the closely for notably our and demand supply. in amid with climbing strategic integration advancing units. are good results of limited rising sales XX% quarter Regional home joint venture. These our in X,XXX housing showcased the focus, with enhancing The robust addressing achievements quarter aligned to which across Champion realizing business,

improved alongside bringing million weeks revenue, our to market. in total community and strategic that purchases orders economic X the quarter. average, consumer our growth in by June in March demand. Backlog million, $XXX XX% Demand and of our first our backlog activity lead new weighing times saw of sale enthusiasm Sequentially, on quarter and increases on the acquisition versus demand. This as XX builder-developer, of channels. for driven home by were, the of up weeks year-over-year, a at soft XX, increased supported improving and organic our growth is Additionally, underscoring backlog end strong sentiment Canada in was $XX as $XX market uncertainty notable inflation million in remained retail,

increasing ahead our dynamic we that and we manufactured from propelling recent encouraging, bolstering Financial national company our presence provide to Champion and quarters, these expanding in continues following to well confidence This gained are further Homes direct-to-consumer overperform XXXX, million of value strategy. that appealing to our initiatives and schedule. products for our floor backlog. The name a Financing, fiscal options consumer through to the journey early our a emphasizes of with by buying plants enhancing expectations for solution. excited new commitment the announce to $XX have housing changed our been financing programs very and comprehensive million accessibility, plan We rates corporate range This with Homes launched recently. financing momentum selected end market. I'm and also marks our success can our integrating another Annual expectations, synergy and Regional our targeting shareholder acquisition higher successfully brand underscores have $XX customers Shareholder outcomes in independent Meeting, the Champion commitment enhancing to collaboration market and and cohesive production hit home milestone our our Inc. financing to to at the end this dealers steadily of Over we've our address Triad significant has locations. The of growth

position along providing these creating promise and our for leveraging and strategic growth a years actions, flagship value on on the our Champion with ahead. Altogether, commercial of delivering comprehensive for brand and shareholders. to focused our order growth, are strengthening housing pace our of the excellence We support accessible, for as commitment Homes catalyst market solutions

reflected solid, quarter, demand fiscal developers to remains As patterns have drive second growth. that move into ordering we retailers builder in our steady from continued and

response We ramping these orders from production community increased partners. in to are up also

the estimated our is are weather performance timing these delay to production shipments. Despite we believe quality on events top-line forward, due standards focused for impacts scale to that second and/or our possibly production. be Looking could the the of quarter high of down challenges, as of we flat sequentially we maintaining or

capture housing attractive an homes traditional for affordable While influencing seeing the market in to integration price economic reduced The rate the distinct contrasting sparking end of the discussion over levels softened demonstrates performance. pricing has recent our solutions positioning home we market of new strategies events will dynamics and housing current our the consumers. industry Financing the these early of favorable The and interest attributed the partners choice underlie and as of inventory This avenues and feedback construction amid successes with pass the enhanced now conditions. Such are the improved is middle-class into the positive more segments and housing has orders, considerable demand. trends rise homebuyers deeper delve who effectiveness Laurie, Champion at quarterly of and increase to growth quality, our higher channel will a for market. at I different outlook many within of our opening point. financial new the

results flows. everyone. and our quarter, near-term discuss will morning, our of cash by first begin by Thanks, I Mark, reviewing discussion briefly the also followed financial and for good a expectations. sheet balance I'll our

period. U.S. million, in home the of and sequential quarter, selling X,XXX a Canada due mix quarter of wholesale markets fourth per homes be uncertainty XX% a average quarter the quarter increasing On including Regional sequential rates volume On sold. per year, lower product XXXX. We XX% same $XXX by price in of capacity continue the prices as saw margin a selling net X% to increased quarter, basis, factory-built market year the enthusiasm to in stability. of in term. new fiscal reflect combination and acquisition XX% $XXX to due and tempered last plants. the near XX.X% reduction reflecting that first the utilization Canadian quarter these $XXX retail or our in fourth regions quarter Current million the higher increase the lower selling to manufacturing a a in prior XXX revenue units additional Homes compared housing homes X,XXX U.S. growth was supported compared the quarter. sequential During the quarter. Average homes housing wholesale price. The to basis, the in the contracted sales and X% a from community in fiscal compared the by compared U.S. the home home interest sold homes units profit to contributed retail sold, selling was the quarter retail the increased representing opened to attributed the from price to revenue sales dynamics through housing in to our to we increased shift of number for across of average the key impact average homes. mix higher million first prior sold of XXXX. during recently in the to The sequential retail Consolidated with selling the points by healthy increased quarter that average increased during mitigated by XX% homes saw primarily and conditions in in home anticipated exceeded in most cost rates margin utilization during mix have net prices increased in XX%. primarily gross was brought $XX sales year number economic homes primarily to factory-built product decline can of which basis X%, gross a to the the increased first the resulting are channels. online lower fewer approximately markets expectations Capacity sold was These selling factors, price by with price new in was to XX% to period. primarily revenue demand higher sales to XX% increased $XX,XXX in partially $XXX,XXX mix. sold capacity The volume gross average to due during The on U.S. homes million U.S. and XX% The changes options.

the addition, accounting of effect carrying inventory acquired of was had the that with basis impacted gross by on a negative purchase XX value increases finished the impact margins point the which acquisition, to quarter. the consolidated goods during were In Homes Regional margin

accounting On increase the $XX a the purchase impact goods is sales, sell Regional prices, Homes and first costs, gross Homes increase acquisition. continue million this increased margin basis, expect $XXX anticipated of attributable better million. as came sequential to The synergy We in in to than off acquired. quarter term in captive the the remaining near selling average input to unit retail the wholesale lower capture Regional we the primarily from due stabilization inventory to finished acquisition. SG&A in

decrease $XX diluted share of $X.XX net first-quarter basis, income incurred unchanged. the to to during In same million decreased loss value due million million and gross a maximum accrual value the in ECN's the diluted adjustment of earn-out the million. $X.XX increased first amount last excluding of net to profitability. of year. The acquisition. $XX for of the change driven regional Regional of for related and higher to of and XX% per the fair diluted $X million per quarter in remains Adjusted EPS to addition, share sequential we note $X.X the the the Homes On that SG&A, SG&A charge income including was acquisition-related company's share earn-out income variable the Net higher fair related a the calendar period compared and lower share or in important related the first revenue by margins the costs earnout $X.XX, to earn-out or $XX approximately charge to acquisition. It's impact was per of quarter earnings

was rate shares As in impact energy-efficient and and The in XX.X% the to credits the XX.X% increase compared Adjusted a returned EBITDA equity on have lag. effective for we more to levels. ECN's in in margin was reminder, normal versus prior positively to the an rate which a higher recognition feel we tax by company's of wholesale by an period. prior XX.X% The period. EBITDA related the to period, of investment year lower tax was of demand X-quarter quarter compared of for sale gross for homes. Adjusted the margin mix, $XX tax quarter common gross year-ago tax year $XX impacted of product returning the effective SG&A. With stabilization million record the impacted margins effective was was our the XX.X% rate the million

quarter-to-quarter will we in by versus captive retail our through gross sold independent fluctuations forward, volumes margins Going be unit expect operations impacted wholesale channels.

$XX of The adjusted net partially cash until capital the In As flows independent versus income XXXX, we million cash and in with million to of quarter, generated dealer reflects offset of $XX $XXX no through cash to year in $XX We returned leveraged had the and strong working borrowings more maturities year, cash June operating receivables. higher the increase $XX million prior growth operating by million position the compared we equivalents shareholders of flows long-term prior million our cash in and share capital period. favorable floorplan for XX, our quarter and for the our changes XXXX. repurchases.

approved Additionally, authority closing strong for call remarks. the our purchase now replenishment in million generation. our cash $XXX Mark share confidence I'll some our the to Board back turn of reflecting

of our promising context company, you, broader Thank especially housing the in market. future The for the Laurie. exceptionally looks

our well While facing persistent revitalized enhance these housing our with value. seeing to ordering and platforms solutions. We are and expansions as traditional with growth for believe success. and retail, our volumes strategic factors innovative from partners, into we a financing we developers, retailers with consumer expand for are community builder sustained construction growth from along a Service demand solutions, need is Moreover, digital us Builder affordable and and set strong stakeholder position new challenges,

our to team, Before Kruger. of to new proven a Laurel the fantastic to and Laurel our session, wealth I warm a making we brings leadership her move Q&A addition. Counsel, a extend experience welcome General on to would like

please thanks Additionally, express wish line to want open answers. Bob for Spence the a him our and contributions I and heartfelt the operator, company. enjoyable questions well-deserved invaluable to now, for retirement. to We his And

Group. [Operator Greg And Palm move Craig-Hallum with to Capital we'll Instructions] first

saw results here. curious just quarter, back color if little the a kind outperformance of look expectations. maybe start some on the initial to Congrats on around us good I'll bit you give where of of you there. the I'm relative

Yes.

it, little of I strength bit than we really than certain fragmented think we're the orders, I'll demand, the surprised a geographies was stronger we would quarter and in order more, I Greg, demand during quarter. of, the probably certain consistency anticipated call better was kind say expected it. of I others. What think what markets, the

our words, saw demand in So, channels. we other all of order across

of builder builder-developer, order XX%. XX% retail, between year-over-year We So, were balanced. between and between that developer geographies growth saw them communities, all saw

So, Northeast, it's to all of strength consistency Central, the kind everywhere except we of our all range whether in saw geographies. South across of XX% type our geographies, order XX% the Canada, rate of

Every geography was So, was distribution every channel strong. strong.

on pleasant think I So, overall. acquisition surprise with of Homes financing expectations really the the acquisition did combined the Regional side. our a And starting was there, that to good and is flywheel retail job the team and a during very then quarter our side selling on overperform the

below. of bit And a It's to kind fiscal the QX just a quarter-ending little surprising little consistent bit given you backlog. mentioned guidance maybe

is So, it spots kind conservatism based question seen more I is, some us quarter? and you've weather around give Or the of is just on Maybe in potential maybe there, a please. like built-in this Texas? there bit color guess little July what events

Yes.

a have August on or Tropical hurricane it's Storm at Debbie looking timing as timing. impacts into bit Capital could deliveries and think of some delivery with potential the we I that Storm timing and go and September little

So, storm certain to that's affect how the in really is and just of headed going delivery where in geographies, trending Greg. it's anticipation

continues I through think the to strong pace order be July.

more really issue we how think timing of that it's through piece. a So, of

CJS Securities. to Daniel We move next with Moore

it demand. on are sounds fiscal side? I'll into kind continued And strength start that as retail traditional QX. From remarks, prepared the move just the correct? cadence there steady seeing higher of level like is with your a at retail we maybe Is or of build you

we've Yes. been mentioned Retail, all I building a actually, quarter, in actually has of seen channels. minutes I through ago, few strength strong. still the very Like our think very,

with all But other on probably soften a that, of conditions, to the actually been good. of in markets some order little customer a exceedingly scaling the they've been weeks. kind growth demand for side. I up bit So, retail expect few the do Coast East than has weather just

you a bit think say, days versus, X quarter, XX just or Last How that builder on or conversations you on. maybe signed community described color little more I going? X side. the that And XXX let's ago? are recovery And, more is developers momentum those gaining

Yes.

back not would in It's community the sequential a So, I healthy. channel, say, is kind of robust. They're manner. coming

them time. The back. to shining demand. demand channel. to Builder sales our So, quarter. it's But good is are was XX% not of highest we the year-over-year. bit Overall, little star of all builder probably healthy, anticipate continue that pick up a for over a up It was

XX% by like So, we followed in builders, Organic strong during growth retail. quarter. the saw was up retail

quarter. signed So, were both new of as those deliveries as channels We many sales considerably. during up up builders the far many,

what So, multiple signed that pace of previous of quarters. we a accelerating. last new builder It's up quarter and sign-up is

to good rate, is traction which see. gained accelerating that's So, an at

comfortable discussed those like would understand, backlog today? of that much about too build you to higher. you managing I'm you sure you little backlog. continue to early do to Would ramping a get it then But, And where sounded how are level? think make bit? let weeks production Is on just trying Any we be there? of doesn't them thoughts like to kind a

Yes.

backlogs to is X getting to weeks normal. think XX I

end. and other pace. And, June continue election side have order things backlog our I we a better the cycle, going just lower and monitor to generally a bit about quarter Fed the even given year, on backlogs given and that, little is higher the volatility mentioned, it's the of things. since timing as than the to our the be grown uncertainty given what do of think I all on But those to the

order order So, we've and pace through of seen far. which slows the July strong for thus the continued because holiday July holiday. Usually, accelerate, is surprising down, it's July the been pace

So, be ramp I important. through to think increasing that to is going production

for overall or long too have don't we customers. So, backlogs our

about the mix, reasonable kind to obviously next back a the quarter norm sounds And fluctuations over from a I but the to then, of appreciate new a with think margin or color. Laurie, perspective. XX%, gross place we're like around X It

Yes, fluctuations life impacted as in independent going mix, them content. wholesale our versus expect gross quarter-to-quarter as to captive channels unit to versus margins, double we're retail the single Dan, wholesale volumes sold through the see product well our life option and by

So, hard to different those or fluctuate predict points. XXX by based of but on basis all variables could XXX

RBC to Markets. move Capital Dahl We with next Mike

normal ago, That's the margins. a now Laurie, we're kind of near-term I points. think the want quarter guidance for period expectations. with a and XX% here time was to Like material difference over terms in pretty and that of to calling gross near-term about stick that at how XXX mid-XXs sitting margin in of short the a was basis

the You times mix few impact. mentioned a now

costs you maybe you buckets that out? specifically quarter upside You in And costs X products flow lower XQ to back this how the drove in pieces the bucket helpful as also mentioned your the around or XQ wood as if through be terms margins put some other the or far upside. remarks. Can as some well. up opening then the input what next XX% that's quantifiable the would can maybe just to actually and of expected I'm impacted of what interested

really bucket captive much retail how retail mix content option certainly the as going Hi, question. Mike, to the is versus would our say forward. we're well directly to independents going going Yes, versus thanks going as and going for impact product the wholesale components. not is to that forward, through margins I

During the level option kind off. see we the of content did quarter,

and and prior features quarters. and less been had we been options stopped features we So, that we price of in actions the that decline seeing had seeing lower

that seeing mix we've versus captive from flowing feel through mix life we is hopefully So, comfortable quarter level independent. in in quarter, great and deal how single a but double the trough component, are we life versus hit of that wholesale at a much to

So, unfortunately, I than there's answer a other can't give variability. you a clear

I a guess question. then XQ the to just follow-up as

you out dynamics that you indication a some potentially You mix Mark, do called some the the have and, retail gives backlog quarter. in of of weather impacting

is that where shipments can for what calling quarter-to-quarter more mix XQ, XXX, the in but understand against expect range, appreciate basis fluctuation out to near-term us points, So, I the that? XQ, on help XXX of your based can you you'd be expectation at specifically for fall

Yes.

if things geographies that shake safe out. obviously, quarter, XXX a think, just But a comes it's because weather around look I coming specific think to the depending, area probably would on on I points you, be you be barometer at a depending early the kind basis to the with about to all Mike, data in. how in, somewhere fair to that It's tell, would the of little too be honest in. think be

we we expect quarter, more sales weather and would think I captive talking is based were we retail to saw Mark in first that about. expecting overall, that the Mike, continue and the seasonality than events on

if I sorry, can one. to that just So, respond

terms that understand part the mix, the a headwind. business. of so, But weather as could be built So, of you've also in that captive retail the far out as

that So, on the elevated relative later XQ that basis are near saying was you terms to a term, might expect what in of beyond very you more go-forward mix the year? even captive in

Yes.

with to move next Philip We'll Jefferies. Ng

momentum the weakening, tick guys. starts where choppy an a impressive, pretty low environment certainly you're in consumer is guess especially bill seeing the is I the end, environment

I what's in coming behaving been activity of lately. some rates have guess on rates that your with kind get to of charter how down perspective? curious pickup thoughts latest And in driving So, the your

And overall, price to that looking the we think coming really home. channels that's for fill need. affordable think other seeing base retail I I and point can an Phil, Yes, we're customer is

disenfranchised for that facilitated trade-off that's we're buyer what see And get can I things. a site they what the can to they more by and really, seeing really get. And, with we're builds few of starting So, and who's that. more value think

marketing and Our shoppers programs direct-to-consumer have up picked online significantly.

capture higher than a allowing getting that's rate capture customers. much we're to were we those us So, before

to and obviously, those do the a of that Champion X what with flywheel combination footprint got we've with momentum in is our drivers and some the Financing retail we're Additionally, channel. of that able creating

So, and seeing customers I is come short supply better costs a think high it to alternative. amid you're really

that So, we're starting see to momentum.

XX-year color bit secret few in channel Any a a rates? mortgage the I come quite on mean, down last weeks.

flat during relatively quarter, were rates the around channel the averaging X%. So,

tendency they the for a to year. do have lag So,

And robust. seasonally then, being that perhaps color of XQ weather, kind and rest you progress how year? on about sales, could Can think through Mark, of due the gave to down you backlogs help us the but pretty some sequentially sound orders

Yes.

what quarter to of think quarter, more quarter I third last overall quarter. Generally, or expectations versus higher all half, and where thinking quarter, maintenance second first probably quarter Phil, I the last So, we be than we the to expect were outages. from our think were the year fourth the second have second we half

are down X So, the I holiday last slightly in think and from just things standpoint. generally, year quarters time a the of

take from from the So, come maybe the due quarter as kind that's but down first then this in to is anticipated third first be flat last quarter's slightly today. And half this to are right results coming stronger with going orders of than production. just they how our the we'll timing where is half, to in I second stronger in fourth in watch ramp. and we aggressively quarter, now being think we we see down higher, and But of

depressed just you due see you that's to would like in bigger something normal a weather? Mark, is how not seasonal given XQ XQ, Or bump envision?

continue quarters we it's little see of want how mean, the I this if how of with have in then we demand more we it extra and the slow then in at going cycle now, out we're pace at could. of the keeping I feather in up continue phase come there, I in cycle obviously, then right if feathers relook come backlog a little as to getting produce. But that have and we to and to the the how the we're and kind things steady with ramping order aggressive a ramping we rethink and about Yes. backlog. at and election half mean, get rates pace, to second election and the to kind Phil, obviously, line. for aggressively year, early. up the too into top

next move to Bouley We Barclays. Matthew with

want wholesale. I captive versus retail the around to to discussion the go back

revenues obviously, XX% guess, up, legacy sequentially XX%. I more were was or so regional So, up and Champion like

kind little So, was here, quarter going like differences, the and be it surprised about a of how strong you thinking of presumably, by were June to there's sounded geographic course, the business overall. captive retail

kind hey, going really going business there that, a look, big you seasonality guys what do to bump captive June just to think this think see it for now as So, this trying differences? of I'm sort there I get be out is, performance kind quarter, the we Was be typical mean June the you that is of drove seasonal at a owning what better is retail? we the of about of to geographic in quarter? Or

Yes.

a are overall, the I we are driving also gaining One, those are share. say few geographies think will I business. strong. their geographies, things captive in

we've gain those share accelerating got and we're the in good So, of geographies. geographies

regional with captive and bringing the a lot to products of having phenomenal. the the that is we're that leadership just culture legacy the and expanded is of and product acceleration also the kind regional offering locations people from a and retail it's phenomenal, Champion So, on win-win the of success plants to the coming from is marketing, of the enhanced synergies retail. And,

teams and integration think with very and customer. acquisition pleased teamwork just that between taking overall, care the and So, we're the of the the I

strong, So, I think all was that been has why is so which very of healthy. it

our to the If funnel we are of and through consumer. that end those And inventory. go lot you now, retail remember a had quarter, the into prior shipments of going

So, in the good we you tied there recall, had a it pickup was last because lot inventory. of finished of just somewhat of up quarter, a timing, if

it's actually going Now through.

think always I'll seasonal retail. And pickup be spring-summer I the, generally, So, a it, do months. in there's call to going

A people a in tax returns post-tax use I'll a time. down return You pickup call usually have as retail, of payment. it, lot great

in or the into season get coming there. through you a you'll to little And little the normal go holiday then bump a September So, frame, bit are get usually August, starts a as and then seasonality time slower. decline things where in retail,

will seasonality, you yes. see So,

have okay, therefore should in half seen be an seasonality that Yes, of back that, kind of in question, have is and that just and business, seasonality the as little you wholesale back the improvement a latter this past? than in kind if we will ASP in be to crazy the there And that? So, I gross give your of would margin combination see is calendar that perspective. seasonal quarter, maybe level, to going second from then there maybe years mean, of there then higher the the of greater to it a ASP this also more the surprising initiatives kind maybe it because mix do we we a a into goes course, the year gross more going think ASP half the margins, perhaps of think reflect

analysis of your ASP Matt, on. Hi, is yes, spot

double-lives in mix to a shifts, single live ASP the number shift wholesale So, as versus option of versus that with the retail and see we're going along of content.

ASPs margins. that will and So, all of variability impact

next move to with We'll McCanless Wedbush. Jay

lowest product So, highest with revenue your margin lowest? all gross top you're parts, these new and types pieces in you these are could between selling, order from sales different builder to different What et sources business? rank the maybe developer, to cetera,

to product type. are the our consistent Yes. margin from of The gross plants out type of margins out wholesale relatively product gross

that about us how forward? synergies of going use number of or kind good and you been also, new for at fixed to businesses that you going And about from end the the at a there the then also, happening. forward, think SG&A what's regional talked the the Financial being And top of some just we to for guess should be range. point model is Champion on going have to all a breakout some other things brought I

normal with the So, gross to the primarily line. be $X.X exception the coming new adjustment, And SG&A say, of going Financing SG&A, the runs is margin SG&A of concluded cost Champion joint the our million auditors a with would Regional be at variable. From consolidating through we XX% to venture. levels. perspective, And we're earn-out that the capture we're the from have around for synergy our sales going I

majority to is revenue the offset on going a the an line minority through the of to running interest Triad's representing So, P&L that be face of XX%. with

just you those I X a wanted we lag. record that results Sorry, Jay, to on quarter remind

to closing does And I at additional for there any like time. that further this remarks. no or appear now turn are it would it questions to Mark back

I thank want progress earnings call. a this fiscal great our everyone look to attention second-quarter have and and updating to on we you, Thank morning, day. on for our your you forward

does conclude for you program. today's Thank This participation. your

at afternoon. You have time, wonderful may any disconnect a and