EX-99.1 2 c91969exv99w1.htm EXHIBIT 99.1 Exhibit 99.1
Exhibit 99.1
(NEWS RELEASE)
For additional information, contact: Joseph Stegmayer Chairman and CEO Phone: 602-256-6263 joes@cavco.com On the Internet: www.cavco.com a) Joseph Stegmayer Chairman and CEO Phone: 602.256.6263 joes@cavco.com On the Internet: www.cavco.com b) Joseph Stegmayer Chairman and CEO Phone: 602.256.6263 joes@cavco.com On the Internet: www.cavco.com For additional information, contact: c) Joseph Stegmayer Chairman and CEO Phone: 602.256.6263 joes@cavco.com On the Internet: www.cavco.com d) Stegmayer Chairman and CEO Phone: 602.256.6263 joes@cavco.com On the Internet: www.cavco.com News Release
FOR IMMEDIATE RELEASE
CAVCO INDUSTRIES REPORTS FISCAL SECOND QUARTER RESULTS
PHOENIX, November 5, 2009 — Cavco Industries, Inc. (NASDAQ: CVCO) today announced financial results for the second quarter and first six months of its fiscal year 2010 ended September 30, 2009.
As previously reported, Cavco and an investment partner, Third Avenue Value Fund (“Third Avenue”), acquired certain manufactured housing assets of Fleetwood Enterprises, Inc. on August 17, 2009 (“Date of Acquisition”) through their jointly owned corporation, FH Holding, Inc., now named Fleetwood Homes, Inc. (“Fleetwood Homes” or the “subsidiary”).
The transaction included seven manufactured housing plants located in Nampa, Idaho; Woodburn, Oregon; Riverside, California; Waco, Texas; Lafayette, Tennessee; Douglas, Georgia; and Rocky Mount, Virginia, and two idled factories located in Woodland, California and Waco, Texas. In addition, Fleetwood Homes purchased all related equipment, accounts receivable, inventory, certain trademarks and trade names, intellectual property, and specified contracts and leases and assumed express warranty liabilities pertaining to certain of the previous operations. The purchase price of the transaction was $25.8 million and was paid in cash by the subsidiary. Neither Cavco nor Fleetwood Homes incurred debt in connection with the purchase or subsequent operations.
Financial information for Fleetwood Homes is included in the Cavco Industries, Inc. consolidated financial statements since the Date of Acquisition. Fleetwood Homes was formed by Cavco and Third Avenue with each contributing $35.0 million in exchange for equal ownership interests. Although Cavco holds a fifty-percent financial interest in the new subsidiary, Fleetwood Homes is required to be fully consolidated under generally accepted accounting principles. Third Avenue’s financial interest in Fleetwood Homes is considered a “noncontrolling interest,” as determined by generally accepted accounting principles. As a result, amounts attributable to Third Avenue are stated under the caption “noncontrolling interest” in the consolidated financial statements.
Net sales for the second quarter of fiscal 2010 totaled $29,377,000, down 2% from $30,030,000 for the second quarter of fiscal year 2009.
Net loss attributable to Cavco stockholders for the fiscal 2010 second quarter was $163,000 compared to net income of $518,000 reported in the same quarter one year ago. Net loss per share based on basic and diluted weighted average shares outstanding was $0.03 versus basic and diluted net income per share of $0.08 last year. During the quarter we incurred $711,000 in non-recurring acquisition related costs for the purchase of the Fleetwood Homes assets.
For the first six months of fiscal 2010, net sales decreased 34% to $42,972,000 from $65,539,000 for the comparable prior year period. Net loss attributable to Cavco stockholders for the first half of fiscal 2010 was $1,612,000 compared to net income of $1,371,000 last year. For the six months ended September 30, 2009, net loss per share based on basic and diluted weighted average shares outstanding was $0.25, versus basic and diluted net income per share of $0.21 and $0.20, respectively for the prior year period.
Commenting on the quarter, Joseph Stegmayer, Chairman, President and Chief Executive Officer, said, “We are pleased to report, for the first time, the results of our newly expanded operations after successfully completing the purchase of the Fleetwood Homes assets. Our performance, while modest, was encouraging considering the challenges current economic conditions presented. Diligent efforts are underway to grow sales volume and improve profit margins at all ten of our factories. A particular focus this quarter was on controlling operating and overhead costs in connection with the acquisition.”

 

 

 

Mr. Stegmayer continued, “During the entire purchase process, we were driven by our belief in the long-term opportunities associated with the Fleetwood Homes brand and operations, and encouraged by the tangible enthusiasm of the Fleetwood people. Combining Fleetwood Homes with the strength of Cavco’s business, we are building a formidable nationwide competitor in the manufactured housing industry.”
Cavco’s senior management will hold a conference call to review these results tomorrow, November 6, 2009, 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, or the web site www.opencompany.info. 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, is the 2nd largest producer of HUD code manufactured homes in the United States, based on reported wholesale shipments of both Cavco and Fleetwood Homes. The Company is also a leading producer of park model homes and vacation cabins in the United States.
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; general deterioration in economic conditions and continued turmoil in the credit markets; a write-off of all or part of our goodwill, which could adversely affect operating results and net worth; the cyclical and seasonal nature of our business; limitations on our ability to raise capital; curtailment of available financing in the manufactured housing industry; our contingent repurchase obligations related to wholesale financing; competition; our ability to maintain relationships with retailers; labor shortages; pricing and availability of raw materials and unfavorable zoning ordinances; our ability to successfully integrate Fleetwood Homes and any future acquisition or attain the anticipated benefits and the risk that the acquisition of Fleetwood Homes and other future acquisitions may adversely impact our liquidity; 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 2009 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.
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CAVCO INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
                 
    September 30,     March 31,  
    2009     2009  
    (Unaudited)        
ASSETS
                
Current assets
                
Cash and cash equivalents
   $ 82,222     $ 70,557  
Short-term investments
     2,481       4,464  
Restricted cash
     422       244  
Accounts receivable
     11,164       6,234  
Inventories
     17,222       9,333  
Prepaid expenses and other current assets
     3,541       3,676  
Deferred income taxes
     7,683       3,434  
 
            
Total current assets
     124,735       97,942  
 
            
 
                
Property, plant and equipment, at cost:
                
Land
     16,194       6,580  
Buildings and improvements
     21,040       7,355  
Machinery and equipment
     10,858       8,203  
 
            
 
     48,092       22,138  
Accumulated depreciation
     (9,788 )     (9,279 )
 
            
 
     38,304       12,859  
 
                
Inventory finance notes receivable, net
     3,163       484  
Goodwill and other intangibles, net
     68,939       67,346  
 
            
 
                
Total assets
   $ 235,141     $ 178,631  
 
            
 
                
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
Current liabilities
                
Accounts payable
   $ 5,118     $ 739  
Accrued liabilities
     29,577       13,753  
 
            
Total current liabilities
     34,695       14,492  
 
                
Deferred income taxes
     18,867       16,099  
 
                
Commitments and contingencies
                
 
                
Cavco Industries, Inc. stockholders’ equity
                
Preferred Stock, $.01 par value; 1,000,000 shares authorized;
No shares issued or outstanding
     —       —  
Common Stock, $.01 par value; 20,000,000 shares authorized;
Outstanding 6,509,684 and 6,506,843 shares, respectively
     65       65  
Additional paid-in capital
     126,255       126,045  
Retained earnings
     20,318       21,930  
 
            
Total Cavco Industries, Inc. stockholders’ equity
     146,638       148,040  
 
                
Noncontrolling interest
     34,941       —  
 
            
Total equity
     181,579       148,040  
 
            
 
                
Total liabilities and stockholders’ equity
   $ 235,141     $ 178,631  
 
            
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CAVCO INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
                                 
    Three Months Ended     Six Months Ended  
    September 30,     September 30,  
    2009     2008     2009     2008  
 
                                
Net sales
   $ 29,377     $ 30,030     $ 42,972     $ 65,539  
Cost of sales
     25,229       26,329       38,730       57,650  
 
                        
Gross profit
     4,148       3,701       4,242       7,889  
Selling, general and administrative expenses
     4,541       3,145       7,010       6,246  
 
                        
(Loss) income from operations
     (393 )     556       (2,768 )     1,643  
Interest income
     29       285       56       579  
 
                        
(Loss) income before income taxes
     (364 )     841       (2,712 )     2,222  
Income tax benefit (expense)
     142       (323 )     1,041       (851 )
 
                        
Net (loss) income
     (222 )     518       (1,671 )     1,371  
Less: net loss attributable to noncontrolling interest
     (59 )     —       (59 )     —  
 
                        
Net (loss) income attributable to Cavco Industries, Inc. common stockholders
   $ (163 )   $ 518     $ (1,612 )   $ 1,371  
 
                        
 
                                
Net (loss) income per share attributable to Cavco Industries, Inc. common stockholders:
                                
Basic
   $ (0.03 )   $ 0.08     $ (0.25 )   $ 0.21  
 
                        
Diluted
   $ (0.03 )   $ 0.08     $ (0.25 )   $ 0.20  
 
                        
 
                                
Weighted average shares outstanding:
                                
Basic
     6,507,547       6,484,362       6,507,225       6,472,677  
 
                        
Diluted
     6,507,547       6,705,005       6,507,225       6,695,902  
 
                        
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CAVCO INDUSTRIES, INC.
OTHER OPERATING DATA — CONTINUING OPERATIONS
(Dollars in thousands, except average sales price amounts)
(Unaudited)
                                 
    Three Months Ended     Six Months Ended  
    September 30,     September 30,  
    2009     2008     2009     2008  
Net sales
                                
Manufacturing
   $ 28,736     $ 29,888     $ 41,702     $ 63,971  
Retail
     2,106       1,808       4,123       4,324  
Less: Intercompany
     (1,465 )     (1,666 )     (2,853 )     (2,756 )
 
                        
Net sales
   $ 29,377     $ 30,030     $ 42,972     $ 65,539  
 
                        
 
                                
Floors sold — manufacturing
     1,203       1,168       1,715       2,457  
 
                        
Average sales price per floor — manufacturing
   $ 23,887     $ 25,589     $ 24,316     $ 26,036  
 
                        
 
                                
Homes sold — manufacturing
     780       751       1,158       1,606  
 
                        
Average sales price per home — manufacturing
   $ 36,841     $ 39,798     $ 36,012     $ 39,833  
 
                        
 
                                
Homes sold — retail
     26       37       59       60  
 
                        
 
                                
Capital expenditures
   $ 147     $ 742     $ 157     $ 817  
 
                        
Depreciation
   $ 225     $ 198     $ 509     $ 425  
 
                        
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