Cavco Industries, Inc. has recently released its 10-Q report, providing a detailed insight into the company's financial performance and operations. Cavco Industries, Inc. is a leading designer, producer, and retailer of factory-built homes in the United States, with operations in two segments: Factory-Built Housing and Financial Services. The company markets its products under various brand names, including Cavco, Fleetwood, Palm Harbor, and Nationwide, and operates a network of independent and company-owned retailers, planned community operators, and residential developers.
In the 10-Q report, Cavco Industries, Inc. discussed various aspects of its business, including management's discussion and analysis of financial condition and results of operations, forward-looking statements, company overview, industry outlook, results of operations, gross profit, selling, general and administrative expenses, and other components of net income.
The company reported a 0.4% increase in net revenue for the three months ended June 29, 2024, compared to the same period in 2023. The factory-built housing segment saw an increase in net revenue primarily due to higher home sales volume, partially offset by lower home selling prices. However, the financial services segment also reported an increase in net revenue, primarily due to more insurance policies in force, partially offset by reduced revenue from loan sales.
Gross profit for the period decreased by 12.3%, with the factory-built housing segment experiencing a decrease in gross profit primarily due to lower average selling prices, partially offset by lower input costs. The financial services segment saw a significant decrease in gross profit primarily due to higher insurance claims from extreme weather-related events in Texas and New Mexico.
Selling, general, and administrative expenses increased by 5.1% for the period, driven by increases in compensation, including acquired retail locations, and reduced incentive compensation from lower earnings in the factory-built housing segment. In the financial services segment, selling, general, and administrative expenses decreased primarily due to lower compensation costs.
The company reported an increase in interest income and a decrease in interest expense, while income tax expense decreased primarily due to lower profit before tax and a lower effective tax rate due to an increase in energy star tax credits.
Cavco Industries, Inc. also provided an outlook on the industry, stating that industry home shipments for the calendar year through May 2024 increased by 19.4% compared to the same period last year, despite higher interest rates and continued inflationary pressures tempering industry demand. The company emphasized its efforts to identify niche market opportunities and maintain a conservative cost structure to build added value into its homes.
The company's backlog at June 29, 2024, was $232 million, compared to $191 million at March 30, 2024, representing an increase of $41 million. Cavco Industries, Inc. also discussed the challenges it faces, including fluctuations in the cost of materials and labor, shortages in the availability of materials and/or labor, and the lack of an efficient secondary market for manufactured home-only loans.
Today the company's shares have moved -4.6% to a price of $382.97. Check out the company's full 10-Q submission here.
