8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):
October 25, 2005

Cavco Industries, Inc.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction
of incorporation) 000-08822
(Commission File Number) 56-2405642
(IRS Employer
Identification No.)

1001 North Central Avenue, Suite 800, Phoenix, Arizona
(Address of principal executive offices) 85004
(Zip Code)

Registrant’s telephone number including area code: (602) 256-6263

Not applicable
(Former name or former address if changed from last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

 EX-10.1

 EX-99.1

EX-10.1 Amendment to Credit Agreement dated as of October 25, 2005

EX-99.1 Press Release

Item 1.01. Entry Into A Material Definitive Agreement

     On October 25, 2005, Cavco Industries, Inc., a Delaware corporation (the “Corporation”), entered into an amendment of its credit agreement with JPMorgan Chase Bank N.A. The amendment to the credit agreement eliminated certain covenants which limited investments in other entities and required a minimum leverage ratio. In addition, the covenant requiring the Corporation to meet a defined fixed charge coverage ratio was reduced from 1.50:1.00 to 1.25:1.00 and the covenant limiting acquisitions was modified to eliminate the maximum permitted dollar amount of acquisitions. A copy of the Corporation’s press release announcing this event is attached as Exhibit 99.1 and the amendment to the credit agreement is attached as Exhibit 10.1.

Item 2.02. Results of Operations and Financial Condition

     On October 27, 2005, Cavco Industries, Inc. a Delaware corporation (the “Corporation”), announced its financial results for its fiscal second quarter and six months ended September 30, 2005. A copy of the Corporation’s press release announcing these financial results is attached as Exhibit 99.1 hereto.

Item 9.01. Financial Statements and Exhibits

Exhibit
Number	Description
10.1	Amendment to Credit Agreement dated as of October 25, 2005
99.1	Press Release dated October 27, 2005

Page 2

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CAVCO INDUSTRIES, INC.
	(Registrant)
	By:	/s/ Daniel Urness
		Name: Daniel Urness
		Title: Interim Chief Financial Officer
Date: October 27, 2005

Page 3

EXHIBIT INDEX

Exhibit
Number	Description
10.1	Amendment to Credit Agreement dated as of October 25, 2005
99.1	Press Release dated October 27, 2005

Page 4

EX-10.1

Exhibit 10.1

Amendment to Credit Agreement

This agreement is dated as of October 25, 2005, by and between Cavco Industries, Inc. (the “Borrower”) and JPMorgan Chase Bank, N.A. (the “Bank”), and its successors and assigns. The provisions of this agreement are effective on the date that this agreement has been executed by all of the signers and delivered to the Bank (the “Effective Date”).

WHEREAS, the Borrower and the Bank entered into a credit agreement dated September 17, 2003, as amended (if applicable) (the “Credit Agreement”); and

WHEREAS, the Borrower has requested and the Bank has agreed to amend the Credit Agreement as set forth below;

NOW, THEREFORE, in mutual consideration of the agreements contained herein and for other good and valuable consideration, the parties agree as follows:

1.	DEFINED TERMS. Capitalized terms not defined herein shall have the meaning ascribed in the Credit Agreement.
2.	MODIFICATION OF CREDIT AGREEMENT. The Credit Agreement is hereby amended as follows:

2.1 From and after the Effective Date, the provisions in the Credit Agreement under Section 5.2 captioned “I. Investments.” and “J. Leverage Ratio.” are hereby deleted.

2.2 From and after the Effective Date, the provision in the Credit Agreement under Section 5.2 captioned “M. Fixed Charge Coverage Ratio.” is hereby amended and restated to read as follows:

M. Fixed Charge Coverage Ratio. Permit as of each fiscal quarter end, its ratio of net income before taxes, plus amortization, depreciation, interest expense, rent and operating lease payments minus any Distributions, for the twelve month period then ending to prior period current maturities of long term debt and capital leases, interest expense, taxes, rent and operating lease payments for the same such period to be less than 1.25 to 1.00.

2.3 From and after the Effective Date, the provision in the Credit Agreement under Section 5.3 captioned “A. Acquisitions.” is hereby amended and restated to read as follows:

     A. Acquisitions. Purchase or acquire any securities, limited liability company interest or partnership interest (or warrants or other options or rights to acquire the same) of, or make any loans or advances to, any person, firm, limited liability company, partnership or corporation, except for a purchase, acquisition, loan or advance, where the Borrower has provided to the Bank pro forma statements demonstrating to the Bank that such purchase, acquisition, loan or advance will not result in the Borrower being out of compliance with any financial or other covenant contained herein.

3. RATIFICATION. The Borrower ratifies and reaffirms the Credit Agreement and the Credit Agreement shall remain in full force and effect as modified herein.

4. BORROWER REPRESENTATIONS AND WARRANTIES. The Borrower represents and warrants that (a) the representations and warranties contained in the Credit Agreement are true and correct in all material respects as of the date of this agreement, (b) no condition, act or event which could constitute an event of default under the Credit Agreement or any promissory note or credit facility executed in reference to the Credit Agreement exists, and (c) no condition, event, act or omission has occurred, which, with the giving of notice or passage of time, would constitute an event of default under the Credit Agreement or any promissory note or credit facility executed in reference to the Credit Agreement.

5. FEES AND EXPENSES. The Borrower agrees to pay all fees and out-of-pocket disbursements incurred by the Bank in connection with this agreement, including legal fees incurred by the Bank in the preparation, consummation, administration and enforcement of this agreement.

6. EXECUTION AND DELIVERY. This agreement shall become effective only after it is fully executed by the Borrower and the Bank, and the Bank shall have received from the Borrower the following documents: Note Modification Agreement.

7. ACKNOWLEDGEMENTS OF BORROWER. The Borrower acknowledges that as of the date of this agreement it has no offsets with respect to all amounts owed by the Borrower to the Bank arising under or related to the Credit Agreement on or prior to the date of this agreement. The Borrower fully, finally and forever releases and discharges the Bank and its successors, assigns, directors, officers, employees, agents and representatives from any and all claims, causes of action, debts

and liabilities, of whatever kind or nature, in law or in equity, of the Borrower, whether now known or unknown to the Borrower, which may have arisen in connection with the Credit Agreement or the actions or omissions of the Bank related to the Credit Agreement on or prior to the date hereof. The Borrower acknowledges and agrees that this agreement is limited to the terms outlined above, and shall not be construed as an agreement to change any other terms or provisions of the Credit Agreement. This agreement shall not establish a course of dealing or be construed as evidence of any willingness on the Bank’s part to grant other or future agreements, should any be requested.

8. NOT A NOVATION. This agreement is a modification only and not a novation. Except for the above-quoted modification(s), the Credit Agreement, any loan agreements, credit agreements, reimbursement agreements, security agreements, mortgages, deeds of trust, pledge agreements, assignments, guaranties, instruments or documents executed in connection with the Credit Agreement, and all the terms and conditions thereof, shall be and remain in full force and effect with the changes herein deemed to be incorporated therein. This agreement is to be considered attached to the Credit Agreement and made a part thereof. This agreement shall not release or affect the liability of any guarantor of any promissory note or credit facility executed in reference to the Credit Agreement or release any owner of collateral granted as security for the Credit Agreement. The validity, priority and enforceability of the Credit Agreement shall not be impaired hereby. To the extent that any provision of this agreement conflicts with any term or condition set forth in the Credit Agreement, or any document executed in conjunction therewith, the provisions of this agreement shall supersede and control. The Bank expressly reserves all rights against all parties to the Credit Agreement.

Borrower:
Cavco Industries, Inc.
By:	/s/ Daniel Urness
Daniel Urness                Interim CFO
Printed Name                                      Title
Date Signed: 10/25/05
Bank:
JPMorgan Chase Bank, N.A.
By:	/s/ Steven J. Krakoski
Steven J. Krakoski                Senior Vice President
Printed Name                                      Title
Date Signed: 10/25/05

EX-99.1

Exhibit 99.1

	For additional information, contact:
	Joseph Stegmayer
	Chairman and CEO
	Phone: 602-256-6263
	joes@cavco.com
	On the Internet:
	www.cavco.com

FOR IMMEDIATE RELEASE

CAVCO INDUSTRIES REPORTS SECOND QUARTER RESULTS
Sales increase 22% to $47.1 million
Net income up 65% to $3.5 million

PHOENIX, AZ — (October 27, 2005) – Cavco Industries, Inc. (NASDAQ: CVCO) today announced financial results for the second quarter and first six months of fiscal 2006 ended September 30, 2005.

     Net sales for the second quarter of fiscal 2006 rose 22% to $47,091,000 from $38,635,000 for the second quarter last year.

     Net income for the second quarter increased 65% to $3,517,000 compared with $2,131,000 in the same period one year ago. Net income per share for the second quarter this year was $0.56 versus $0.34 last year based on basic weighted average shares outstanding and $0.52 versus $0.33 per share based on diluted weighted average shares. The prior year included $0.03 per diluted share in income from discontinued retail operations.

     For the first six months of fiscal 2006, net sales climbed 25% to $92,967,000 from $74,572,000 for the same period last year. Net income for the first six months of this year was up 84% to $7,059,000 versus $3,838,000 for the comparable prior year period. Net income per share was $1.12 based on basic weighted average shares outstanding and $1.06 per share based on diluted weighted average shares for the first six months this year versus $0.61 and $0.59, respectively, for the six-month period in the prior year.

     Commenting on the quarter, Joseph Stegmayer, Chairman, President and Chief Executive Officer, said, “These results represented the best second quarter in the company’s history. All three manufacturing plants performed well, benefiting from strong demand and an excellent product mix. Profit margins were also positively affected by the fact that selling price increases, initiated earlier this calendar year, worked their way through our order backlog to favorably impact the quarter.”

     Mr. Stegmayer continued, “The first half of fiscal 2006 has been even better than we anticipated. We look for continued good results in the last six months of the year although the comparisons will be to increasingly strong results in the third and fourth quarters of last year. The greatest concern for the months ahead is the availability and price of the raw materials and components we buy. The escalating cost environment we have experienced for the past eighteen months has been further stimulated by the natural disasters in the United States and abroad. In addition to the terrible human toll taken by these catastrophes, the vast destruction of property and subsequent re-building efforts is predicted to cause sustained material shortages and price increases.”

     Cavco also announced that it has amended its revolving credit facility with JPMorgan Chase Bank N.A. to eliminate and modify certain covenants to provide more flexibility in the facility.

     Cavco’s senior management will hold a conference call to review these results tomorrow, October 28, 2005, at 1:00 p.m. (Eastern Time). Interested parties can access a live webcast of the conference call on the Internet at http://phx.corporate-ir.net/playerlink.zhtml?c=145386&s=wm&e=1149933. An archive of the webcast and presentation will be available for 90 days at this website.

     Cavco Industries, Inc., headquartered in Phoenix, is the largest producer of manufactured homes in Arizona, based on wholesale shipments. The Company is also a leading producer of park model homes and vacation cabins in the United States.

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     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 industry; 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, the cyclical nature of our business, limitations on our ability to raise capital, curtailment of available financing in the manufactured housing industry, competition, our ability to maintain relationships with retailers, pricing and availability of raw materials and our lack of recent operating history as an independent public company, together with all of the other risks described in our filings with the Securities and Exchange Commission. 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. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)

	September 30,			March 31,
	2005			2005
	(Unaudited)
ASSETS
Current assets
Cash	$	10,839		$	46,457
Short term investments		39,900
Restricted cash		1,168			1,028
Accounts receivable		9,329			7,545
Inventories		11,897			9,703
Prepaid expenses and other current assets		1,404			1,202
Deferred income taxes		3,590			3,610
Retail assets held for sale		334			1,114
Total current assets		78,461			70,659
Property, plant and equipment, at cost:
Land		6,050			2,330
Buildings and improvements		6,192			5,045
Machinery and equipment		6,656			6,446
		18,898			13,821
Accumulated depreciation		(6,810	)		(6,349	)
		12,088			7,472
Goodwill		67,346			67,346
Total assets	$	157,895		$	145,477
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	5,450		$	5,978
Accrued liabilities		25,815			22,099
Total current liabilities		31,265			28,077
Deferred income taxes		10,150			9,090
Commitments and contingencies
Stockholders’ equity
Preferred Stock, $.01 par value, 1,000,000 shares authorized; No shares issued or outstanding					—
Common Stock, $.01 par value; 10,000,000 shares authorized; Outstanding 6,334,776 and 6,288,730 shares		63			63
Additional paid-in capital		120,984			119,998
Unamortized value of restricted stock		(188	)		(313	)
Accumulated deficit		(4,379	)		(11,438	)
Total stockholders’ equity		116,480			108,310
Total liabilities and stockholders’ equity	$	157,895		$	145,477

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

	Three Months Ended				Six Months Ended
	September 30,				September 30,
	2005		2004		2005		2004
Net sales	$	47,091	$	38,635	$	92,967	$	74,572
Cost of sales		37,482		31,366		73,721		61,210
Gross profit		9,609		7,269		19,246		13,362
Selling, general and administrative expenses		4,207		4,068		8,319		7,418
Income from operations		5,402		3,201		10,927		5,944
Interest income		364		100		646		201
Income from continuing operations before income taxes		5,766		3,301		11,573		6,145
Income tax expense		2,249		1,320		4,514		2,457
Income from continuing operations		3,517		1,981		7,059		3,688
Income from discontinued retail operations less income taxes of $100 in 2004				150				150
Net Income	$	3,517	$	2,131	$	7,059	$	3,838
Net income per share (basic):
Continuing operations	$	0.56	$	0.32	$	1.12	$	0.59
Discontinued retail operations		—		0.02		—		0.02
Net Income	$	0.56	$	0.34	$	1.12	$	0.61
Net income per share (diluted):
Continuing operations	$	0.52	$	0.30	$	1.06	$	0.57
Discontinued retail operations		—		0.03		—		0.02
Net Income	$	0.52	$	0.33	$	1.06	$	0.59
Weighted average shares outstanding:
Basic		6,302,386		6,288,730		6,295,558		6,288,730
Diluted		6,720,397		6,520,528		6,685,694		6,522,178

On January 6, 2005, Cavco Industries, Inc. announced that its Board of Directors had authorized a 2-for-l split of its common stock in the form of a 100% stock dividend. The dividend was paid on January 31, 2005 to stockholders of record as of January 18, 2005. The information for the three and six months ended September 30, 2004 is presented as if this stock split had been completed as of the beginning of these periods.

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CAVCO INDUSTRIES, INC. AND SUBSIDIARY
Other Operating Data — Continuing Operations
(Dollars in thousands)

	Three Months Ended						Six Months Ended
	September 30,						September 30,
	2005			2004			2005			2004
Net sales
Manufacturing	$	45,122		$	38,338		$	89,910		$	73,283
Retail		3,309			2,204			6,347			4,935
Less: Intercompany		(1,340	)		(1,907	)		(3,290	)		(3,646	)
Net Sales	$	47,091		$	38,635		$	92,967		$	74,572
Floor shipments — manufacturing		1,825			1,730			3,637			3,375
Average sales price per floor — manufacturing	$	24,724		$	22,161		$	24,721		$	21,713
Home shipments — manufacturing		1,051			1,008			2,119			1,942
Average sales price per home — manufacturing	$	42,932		$	38,034		$	42,430		$	37,736
Home shipments — retail		40			33			81			71
Average sales price per home — retail	$	82,725		$	66,788		$	78,358		$	69,507
Capital expenditures	$	4,878		$	37		$	5,077		$	216
Depreciation	$	228		$	272		$	461		$	547

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