CAVCO INDUSTRIES, INC. recently released its 10-K report. The company designs, produces, and sells factory-built homes in the United States through two segments: Factory-Built Housing and Financial Services. Its housing products include park model RVs, vacation cabins, modular homes, and commercial structures such as apartments, hotels, schools, and military housing, while its financial arm provides mortgages, home-only loans, and property and casualty insurance tied to the manufactured housing market.
In Item 7, management said the company’s outlook is shaped by housing demand, labor availability, supply-chain conditions, financing access, and regulatory developments. At March 28, 2026, the home order backlog was about $195 million in wholesale sales value, down $2 million from $197 million a year earlier, and management noted that orders can be canceled before production begins. Once production starts, orders become non-cancelable, and the company said it is balancing production levels and workforce size against demand to preserve efficiency.
The company also said it continues to extend commercial loan programs to distributors, community owners, and developers, with the aim of supporting manufactured home financing and product distribution. At the same time, it pointed to credit risk in that customer base and among inventory financing partners. In financial services, the company said it is servicing existing loans and insurance policies while managing regulatory requirements tied to forbearance, foreclosures, and policy cancellations.
Cavco said the lack of an efficient secondary market for manufactured home-only loans continues to constrain industry growth and raise borrowing costs. It is working with industry participants on secondary market opportunities for home-only loans and non-conforming mortgage portfolios, and it is investing in community-based lending and home-only lending programs to support sales through traditional distribution channels. The company also said that Fannie Mae and Freddie Mac’s 2025-2027 Underserved Markets Plans include enhanced mortgage products for manufactured homes titled as real property, but do not include purchases of home-only loans during that period.
For fiscal 2026, net revenue rose 11.4% to $2.245 billion from $2.015 billion. Factory-built housing revenue increased 11.6% to $2.157 billion, while financial services revenue rose 5.8% to $87.1 million. Total homes sold increased 5.5% to 20,842 from 19,753, and net factory-built housing revenue per home sold increased 5.8% to $103,510 from $97,864.
The company said the factory-built housing revenue increase was helped by the American Homestar acquisition, completed at the beginning of the third quarter of fiscal 2026, which added $90.5 million. Excluding American Homestar, higher average selling prices added $102.9 million and higher home sales volume added $30.8 million. Wholesale sales totaled 16,071 homes in fiscal 2026, up from 15,621, while retail sales rose to 4,771 from 4,132.
Gross profit increased 13.2% to $526.9 million. Factory-built housing gross profit rose 7.8% to $476.3 million, and financial services gross profit jumped 112.5% to $50.6 million. Management attributed the housing margin improvement to higher prices and higher home sales, partly offset by higher unit costs, while the financial services improvement reflected higher premiums, better underwriting results, and lower weather-related insurance claims.
Selling, general and administrative expenses increased 8.4% to $298.3 million. Factory-built housing SG&A rose 7.1% to $271.1 million, including $12.5 million of incremental expense from American Homestar. Excluding that acquisition, compensation expense increased $11.0 million and deal costs rose $3.9 million, partly offset by a prior-year $10 million non-cash charge tied to legacy trade names. Financial services SG&A increased 22.2% to $27.2 million, mainly because compensation and employee benefits rose $3.4 million.
Income before income taxes increased 15.9% to $244.7 million from $211.1 million. Factory-built housing pretax income rose to $221.4 million from $209.6 million, and financial services pretax income climbed to $23.3 million from $1.5 million. Net income tax expense was $54.1 million, with an effective tax rate of 22.1%, compared with $40.0 million and 19.0% in the prior year, reflecting lower tax credits tied to energy-efficient home and Energy Star-related eligibility changes.
Interest income fell to $16.3 million from $21.1 million, mainly because cash balances declined after the September 29, 2025 cash purchase of American Homestar and because of lower interest rates. Interest expense remained flat at $0.5 million, and other income, net was essentially unchanged at $0.3 million. Management said cash and cash equivalents, together with operating cash flow, should be sufficient to fund operations, obligations, and growth for the next 12 months and into the foreseeable future. Today the company's shares have moved -0.73% to a price of $491.49. Check out the company's full 10-K submission here.
