EX-99.1 2 cvco-2018331xex991.htm EXHIBIT 99.1 Exhibit


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For additional information, contact:
Dan Urness
CFO and Treasurer
danu@cavco.com
News Release
Phone: 602-256-6263
On the Internet: www.cavco.com
FOR IMMEDIATE RELEASE
CORRECTING and REPLACING -- CAVCO INDUSTRIES REPORTS FISCAL 2018 FOURTH QUARTER AND YEAR END RESULTS

PHOENIX, May 29, 2018 (GLOBE NEWSWIRE) -- In a release issued earlier today under the same headline by Cavco Industries, Inc. (Nasdaq:CVCO), please note the conference call time should be May 30, 2018 at 11:00 AM Eastern Time rather than 1:00 PM Eastern Time as originally issued. The corrected release follows:
Cavco Industries Reports Fiscal 2018 Fourth Quarter and Year End Results
Cavco Industries, Inc. (Nasdaq:CVCO) today announced financial results for the fourth quarter and fiscal year ended March 31, 2018. On April 3, 2017, the Company completed the acquisition of Lexington Homes, Inc., which operates a manufactured housing plant in Lexington, Mississippi. Since the acquisition date, the results from this new business are included in Cavco's consolidated financial statements presented herein.
Three months ended March 31, 2018 compared to the three months ended April 1, 2017
•
Net revenue was $242.5 million, up 22.5% from $198.0 million. The increase was the result of higher home prices and sales volume. The Company recognized $14.8 million of home sales revenue and $1.8 million of income from operations from early commercial loan payoffs received under Cavco's wholesale lending programs. This revenue was previously deferred in prior periods in the normal course of business.
•
Income before income taxes was $30.7 million, an 86.1% increase over $16.5 million. Current quarter results include $4.5 million of other income from gains realized in the sale of corporate investments.
•
Income tax expense was $8.6 million, resulting in an effective tax rate of 27.9% compared to $5.6 million and an effective tax rate of 33.9%.
•
Net income was $22.1 million compared to $10.9 million, a 102.8% increase.
•
Net income per share, based on basic and diluted weighted average shares outstanding, was $2.45 and $2.40, respectively, versus $1.21 and $1.19, respectively.
Twelve months ended March 31, 2018 compared to the twelve months ended April 1, 2017
•
Net revenue was $871.2 million, 12.6% higher than $773.8 million. The increase was primarily from a larger proportion of higher priced homes sold and improved home sales volume.
•
Income before income taxes increased 42.0% to $78.5 million as compared to $55.3 million. In addition to the investment gain described above, the improvement was from increased home sales volume and pricing, a $3.4 million favorable dispute settlement resolution in the third fiscal quarter and improved earnings in the financial services segment.




•
Income tax expense was $17.0 million, creating an effective tax rate of 21.7% compared to income tax expense of $17.3 million and an effective rate of 31.3%. The current fiscal year benefited from the Tax Cuts and Jobs Act, which made broad and complex changes to the U.S. tax code. In connection with lower federal income tax liability related to the Tax Act and requisite revaluation of the net deferred income tax balance, the Company recorded a net income tax benefit of $4.8 million (or $0.52 per diluted share). Additionally, the Company recognized benefits of $2.1 million (or $0.23 per diluted share) from the current year adoption of accounting standards that required excess tax benefits on stock option exercises to be recorded as a reduction of income tax expense instead of equity as was previously required.
•
Net income was $61.5 million, up 61.8% from net income of $38.0 million.
•
Net income per share, based on basic and diluted weighted average shares outstanding, was $6.82 and $6.68, respectively, versus basic and diluted net income per share of $4.23 and $4.17, respectively.
Commenting on the results, Joseph Stegmayer, Chairman, President and Chief Executive Officer said, "We were pleased to complete the fiscal year with improved income from operations and growth in product sales. Fourth quarter gross profit as a percentage of revenue improved from home sales prices gradually increasing throughout the year to address rapidly rising material and labor input costs. Still, we work to keep prices competitive and affordable through efficient factory production processes and cost controls. We are also focused on improving production workforce size and productivity to raise home building levels further."
Mr. Stegmayer continued, "Fiscal year 2019 begins with optimism about demand for housing as home ownership rates, currently at a low 64.2%, are reported to be trending higher. With housing prices and rental rates also on the rise, we believe systems-built housing will be an increasingly sought after option for affordable living."
Cavco’s management will hold a conference call to review these results tomorrow, May 30, 2018, at 11:00 AM (Eastern Time). Interested parties can access a live webcast of the conference call on the Internet at www.cavco.com under the Investor Relations link. An archive of the webcast and presentation will be available for 90 days at www.cavco.com under the Investor Relations link.
Cavco Industries, Inc., headquartered in Phoenix, Arizona, designs and produces factory-built housing products primarily distributed through a network of independent and Company-owned retailers. The Company is one of the largest producers of manufactured homes in the United States, based on reported wholesale shipments, marketed under a variety of brand names including Cavco Homes, Fleetwood Homes, Palm Harbor Homes, Fairmont Homes, Friendship Homes, Chariot Eagle and Lexington Homes. The Company is also a leading producer of park model RVs, vacation cabins, and systems-built commercial structures, as well as modular homes built primarily under the Nationwide Homes brand. Cavco’s mortgage subsidiary, CountryPlace Mortgage, is an approved Fannie Mae and Freddie Mac seller/servicer, a Ginnie Mae mortgage-backed securities issuer that offers conforming mortgages, non-conforming mortgages and home-only loans to purchasers of factory-built homes. Our insurance subsidiary, Standard Casualty, provides property and casualty insurance to owners of manufactured homes.




Certain statements contained in this release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities and Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. In general, all statements that are not historical in nature are forward-looking. Forward-looking statements are typically included, for example, in discussions regarding the manufactured housing and site-built housing industries; our financial performance and operating results; and the expected effect of certain risks and uncertainties on our business, financial condition and results of operations. All forward-looking statements are subject to risks and uncertainties, many of which are beyond our control. As a result, our actual results or performance may differ materially from anticipated results or performance. Factors that could cause such differences to occur include, but are not limited to: adverse industry conditions; our ability to successfully integrate past acquisitions, including the recent acquisition of Lexington Homes, and any future acquisition or the ability to attain the anticipated benefits of such acquisitions; the risk that any past or future acquisition may adversely impact our liquidity; involvement in vertically integrated lines of business, including manufactured housing consumer finance, commercial finance and insurance; a constrained consumer financing market; curtailment of available financing for retailers in the manufactured housing industry; our participation in certain wholesale and retail financing programs for the purchase of our products by industry distributors and consumers may expose us to additional risk of credit loss; significant warranty and construction defect claims; our contingent repurchase obligations related to wholesale financing; market forces and housing demand fluctuations; net losses were incurred in certain prior periods and there can be no assurance that we will generate income in the future; a write-off of all or part of our goodwill; the cyclical and seasonal nature of our business; limitations on our ability to raise capital; competition; our ability to maintain relationships with independent distributors; our business and operations being concentrated in certain geographic regions; labor shortages; pricing and availability of raw materials; unfavorable zoning ordinances; loss of any of our executive officers; organizational document provisions delaying or making a change in control more difficult; volatility of stock price; general deterioration in economic conditions and continued turmoil in the credit markets; increased costs of healthcare benefits for employees; governmental and regulatory disruption; information technology failures and data security breaches; extensive regulation affecting manufactured housing; together with all of the other risks described in our filings with the Securities and Exchange Commission. Readers are specifically referred to the Risk Factors described in Item 1A of the 2017 Form 10-K, as may be amended from time to time, which identify important risks that could cause actual results to differ from those contained in the forward-looking statements. Cavco expressly disclaims any obligation to update any forward-looking statements contained in this release, whether as a result of new information, future events or otherwise. Investors should not place any reliance on any such forward-looking statements.




CAVCO INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amounts)
 
March 31,
2018
 
April 1,
2017
ASSETS
(Unaudited)
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
186,766

 
$
132,542

Restricted cash, current
11,228

 
11,573

Accounts receivable, net
35,043

 
29,448

Short-term investments
11,866

 
11,289

Current portion of consumer loans receivable, net
31,096

 
31,115

Current portion of commercial loans receivable, net
5,481

 
7,932

Inventories
109,152

 
93,855

Prepaid expenses and other current assets
27,961

 
29,806

Deferred income taxes, current
—

 
9,204

Total current assets
418,593

 
356,764

Restricted cash
1,264

 
724

Investments
33,573

 
30,256

Consumer loans receivable, net
63,855

 
64,686

Commercial loans receivable, net
11,120

 
17,901

Property, plant and equipment, net
63,355

 
56,964

Goodwill and other intangibles, net
83,020

 
80,021

Total assets
$
674,780

 
$
607,316

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
23,785

 
$
24,010

Accrued liabilities
126,500

 
109,789

Current portion of securitized financings and other
26,044

 
6,417

Total current liabilities
176,329

 
140,216

Securitized financings and other
33,768

 
51,574

Deferred income taxes
7,577

 
21,118

Stockholders’ equity:
 
 
 
Preferred stock, $.01 par value; 1,000,000 shares authorized; No shares issued or outstanding
—

 
—

Common stock, $.01 par value; 40,000,000 shares authorized; Outstanding 9,044,858 and 8,994,968 shares, respectively
90

 
90

Additional paid-in capital
246,197

 
244,791

Retained earnings
209,381

 
148,141

Accumulated other comprehensive income
1,438

 
1,386

Total stockholders’ equity
457,106

 
394,408

Total liabilities and stockholders’ equity
$
674,780

 
$
607,316





CAVCO INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share amounts)
(Unaudited)

 
Three Months Ended
 
Year Ended
 
March 31,
2018
 
April 1,
2017
 
March 31,
2018
 
April 1,
2017
Net revenue
$
242,529

 
$
197,998

 
$
871,235

 
$
773,797

Cost of sales
188,225

 
155,864

 
690,555

 
615,760

Gross profit
54,304

 
42,134

 
180,680

 
158,037

Selling, general and administrative expenses
28,404

 
25,112

 
106,907

 
101,231

Income from operations
25,900

 
17,022

 
73,773

 
56,806

Interest expense
(1,092
)
 
(1,059
)
 
(4,397
)
 
(4,443
)
Other income, net
5,896

 
511

 
9,147

 
2,918

Income before income taxes
30,704

 
16,474

 
78,523

 
55,281

Income tax expense
(8,564
)
 
(5,586
)
 
(17,021
)
 
(17,326
)
Net income
$
22,140

 
$
10,888

 
$
61,502

 
$
37,955

 
 
 
 
 
 
 
 
Net income per share:
 
 
 
 
 
 
 
Basic
$
2.45

 
$
1.21

 
$
6.82

 
$
4.23

Diluted
$
2.40

 
$
1.19

 
$
6.68

 
$
4.17

Weighted average shares outstanding:
 
 
 
 
 
 
 
Basic
9,039,815

 
8,994,233

 
9,024,437

 
8,976,064

Diluted
9,240,296

 
9,122,235

 
9,201,706

 
9,105,743






CAVCO INDUSTRIES, INC.
OTHER OPERATING DATA
(Dollars in thousands)
(Unaudited)

 
Three Months Ended
 
Year Ended
 
March 31,
2018
 
April 1,
2017
 
March 31,
2018
 
April 1,
2017
Net revenue:
 
 
 
 
 
 
 
Factory-built housing
$
228,074

 
$
184,458

 
$
815,519

 
$
720,971

Financial services
14,455

 
13,540

 
55,716

 
52,826

Total net revenue
$
242,529

 
$
197,998

 
$
871,235

 
$
773,797

 
 
 
 
 
 
 
 
Capital expenditures
$
5,361

 
$
952

 
$
8,386

 
$
5,295

Depreciation
$
959

 
$
833

 
$
3,658

 
$
3,319

Amortization of other intangibles
$
92

 
$
92

 
$
368

 
$
368

 
 
 
 
 
 
 
 
Total factory-built homes sold
4,063

 
3,697

 
14,537

 
13,820